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):

November 20, 2014

Steadfast Apartment REIT, Inc.

(Exact Name of Registrant as Specified in Charter)

Maryland	333-191049	36-4769184
(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 Century Crest at Barrett Lakes Apartments

On November 20, 2014 (the “Closing Date”), Steadfast Apartment REIT, Inc. (the “Company”), through STAR Barrett Lakes, LLC (“STAR Barrett Lakes”), an indirect wholly-owned subsidiary of the Company, acquired from a third-party seller a fee simple interest in a 500-unit multifamily residential community located in Kennesaw, Georgia, commonly known as Century Crest at Barrett Lakes Apartments (the “Barrett Lakes Property”). On the Closing Date, Steadfast Asset Holdings, Inc., an affiliate of the Company, assigned to STAR Barrett Lakes the Purchase and Sale Agreement, dated as of September 10, 2014, for the purchase of the Barrett Lakes Property. The Company has initiated the process to re-name the Barrett Lakes Property to “The 1800 at Barrett Lakes.”

STAR Barrett Lakes acquired the Barrett Lakes Property for an aggregate purchase price of $49,000,000, exclusive of closing costs. STAR Barrett Lakes financed the payment of the purchase price for the Barrett Lakes Property with a combination of (1) proceeds from the Company’s public offering and (2) a loan in the aggregate principal amount of $34,300,000 (the “Loan”) from Berkeley Point Capital LLC (“Berkeley”), pursuant to the requirements of the Federal Home Loan Mortgage Corporation (Freddie Mac) Capital Markets Execution Program, as evidenced by the Multifamily Loan and Security Agreement (the “Loan Agreement”) and the Multifamily Note (the “Note” and, together with the Loan Agreement, the Mortgage and the Guaranty, each described below, the “Loan Documents”). For additional information on the terms of the Loan and Loan Documents, see Item 2.03 below.

The Barrett Lakes Property was constructed in two phases in 1988 and 1997 and consists of 39 residential buildings and a clubhouse/leasing office situated on an approximately 67.8-acre site. The garden-style property is comprised of 190 one-bedroom apartment homes, 220 two-bedroom apartment homes and 90 three-bedroom apartment homes that average 1,086 square feet with an average monthly rent of $827. Apartment amenities at the Barrett Lakes Property include balconies/patios, washer and dryer connections and storage and walk-in closets. In addition, select units have black/stainless appliances, vaulted ceilings, crown molding and fireplaces. Property amenities at the Barrett Lakes Property include two swimming pools, a sauna, lighted tennis courts, a fitness center, a clubhouse, an internet cafe with WI-FI, a playground and detached garages. As of November 17, 2014, the Barrett Lakes Property was approximately 96% occupied.

An acquisition fee of approximately $532,512 was earned by Steadfast Apartment Advisor, LLC (the “Advisor”) in connection with the acquisition of the Barrett Lakes Property. A financing coordination fee of approximately $343,000 was earned by the Advisor in connection with the financing of the Barrett Lakes Property.

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

Management of the Barrett Lakes Property

On the Closing Date, STAR Barrett Lakes and Steadfast Management Company, Inc. (“Steadfast Management”), an affiliate of the Advisor, entered into a Property Management Agreement (the “Management Agreement”) pursuant to which Steadfast Management serves as the exclusive leasing agent and manager of the Barrett Lakes Property. Pursuant to the Management Agreement, STAR Barrett Lakes is to pay Steadfast Management a monthly management fee in an amount equal to 3% of the Barrett Lakes Property’s gross collections (as defined in the Management Agreement) for such month. The Management Agreement has an initial term that expires on November 20, 2015 and will continue thereafter on a month-to-month basis unless either party gives 60 days prior written notice of its desire to terminate the Management Agreement. STAR Barrett Lakes may terminate the Management Agreement at any time upon 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 Management Agreement due to a material breach of the other party’s obligations under the Management Agreement that remains uncured for 30 days after notification of such breach.

STAR Barrett Lakes also entered into a Construction Management Services Agreement (the “Construction Services Agreement”) with Pacific Coast Land & Construction, Inc. (“PCL”), an affiliate of the Advisor. Pursuant to the Construction Services Agreement, PCL will provide construction management services with respect to capital improvements and renovations from time to time for the Barrett Lakes Property for a fee in an amount equal to 8% of the total cost of the improvements and renovations. The Construction Services Agreement may be terminated by either party with 30 days prior written notice to the other party.

The material terms of the agreements described above are qualified in their entirety by the agreements attached as Exhibits 10.3 and 10.4 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.

Loan

In connection with the acquisition of the Barrett Lakes Property, STAR Barrett Lakes borrowed $34,300,000 from Berkeley pursuant to the Note. The Loan has an 84-month term with a maturity date of December 1, 2021 (the “Maturity Date”). STAR Barrett Lakes paid a loan origination fee of $171,500 to Berkeley in connection with the Loan.

Interest on the outstanding principal balance of the Loan accrues at the one-month London Interbank Offered Rate (LIBOR) plus 1.77%, as further described in the Note, and is payable on the first day of each month beginning on January 1, 2015. Beginning January 1, 2015 and continuing until the Maturity Date, a monthly payment of interest on the outstanding principal balance of the Loan, as further described in the Note, will be due and payable on the first day of each month. The entire outstanding principal balance and any accrued and unpaid interest on the Loan is due and payable in full on the Maturity Date.

STAR Barrett Lakes may voluntarily prepay all of the unpaid principal balance of the Loan and all accrued interest thereon and other sums due to Berkeley under the Loan Documents following the first year of the Loan, provided that STAR Barrett Lakes provides Berkeley with prior notice of such prepayment and pays a prepayment fee, all in accordance with the terms of the Note.

The performance of the obligations of STAR Barrett Lakes under the Loan is secured by a Multifamily Deed to Secure Debt, Assignment of Rents and Security Agreement with respect to the Barrett Lakes Property (the “Mortgage”). Additionally, pursuant to an Assignment of Management Agreement and Subordination of Management Fees, STAR Barrett Lakes assigned all of its rights under the Management Agreement to Berkeley upon an event of default under the Loan Documents.

The Company entered into a Guaranty (the “Guaranty”) in connection with the Loan. The Company absolutely, unconditionally and irrevocably guaranteed to Berkeley the full and prompt payment and performance when due of all amounts for which STAR Barret Lakes is personally liable under the Loan Documents, in addition to all costs and expenses incurred by Berkeley in enforcing such Guaranty.

The material terms of the agreements described above are qualified in their entirety by the agreements attached as Exhibits 10.5, 10.6, 10.7, 10.8 and 10.9 to this Current Report on Form 8-K and incorporated herein by reference.

Item 7.01 Regulation FD Disclosure.

On November 25, 2014, the Company distributed a press release announcing the completion of the acquisition of the Barrett Lakes Property. The full text of the press release is attached as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated by reference into this Item 7.01.

The information furnished under Item 7.01 of this Current Report on Form 8-K, including Exhibit 99.1, shall not be deemed to be “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section, nor shall such information be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such filing.

Item 9.01    Financial Statements and Exhibits.

(a) Financial Statements of Businesses Acquired.

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

(b) Pro Forma Financial Information.

See Paragraph (a) above.

(d) Exhibits.

Exhibit	Description
10.1	Purchase and Sale Agreement, dated as of September 10, 2014, by and between Steadfast Asset Holdings, Inc. and Carlyle Centennial Crest at Barrett Lakes, L.P. and Fidelity National Title Insurance Company in its capacity as the escrow agent
10.2	Assignment and Assumption of Purchase Agreement, dated as of November 20 2014, by and between Steadfast Asset Holdings, Inc. and STAR Barrett Lakes, LLC
10.3	Property Management Agreement, made and entered into as of November 20, 2014, by and between Steadfast Management Company, Inc. and STAR Barrett Lakes, LLC
10.4	Construction Management Services Agreement entered into as of November 20, 2014, by and between STAR Barrett Lakes, LLC and Pacific Coast Land & Construction, Inc.
10.5	Multifamily Note, effective as of November 20, 2014, by STAR Barrett Lakes, LLC in favor of Berkeley Point Capital LLC
10.6	Multifamily Loan and Security Agreement, dated as of November 20, 2014, by and between STAR Barrett Lakes, LLC and Berkeley Point Capital LLC
10.7	Multifamily Deed to Secure Debt, Assignment of Rents and Security Agreement, dated as of November 20, 2014, between STAR Barrett Lakes, LLC and Berkeley Point Capital LLC
10.8	Guaranty, dated as of November 20, 2014, by Steadfast Apartment REIT, Inc. to and for the benefit of Berkeley Point Capital LLC
10.9	Assignment of Management Agreement and Subordination of Management Fees, dated as of November 20, 2014, by and among STAR Barrett Lakes, LLC, Berkeley Point Capital LLC and Steadfast Management Company, Inc.
99.1	Press release, dated November 25, 2014

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 APARTMENT REIT, INC.
Date:	November 25, 2014	By:	/s/ Kevin J. Keating
			Kevin J. Keating
			Treasurer

EXHIBIT INDEX

Exhibit	Description
10.1	Purchase and Sale Agreement, dated as of September 10, 2014, by and between Steadfast Asset Holdings, Inc. and Carlyle Centennial Crest at Barrett Lakes, L.P. and Fidelity National Title Insurance Company in its capacity as the escrow agent
10.2	Assignment and Assumption of Purchase Agreement, dated as of November 20 2014, by and between Steadfast Asset Holdings, Inc. and STAR Barrett Lakes, LLC
10.3	Property Management Agreement, made and entered into as of November 20, 2014, by and between Steadfast Management Company, Inc. and STAR Barrett Lakes, LLC
10.4	Construction Management Services Agreement entered into as of November 20, 2014, by and between STAR Barrett Lakes, LLC and Pacific Coast Land & Construction, Inc.
10.5	Multifamily Note, effective as of November 20, 2014, by STAR Barrett Lakes, LLC in favor of Berkeley Point Capital LLC
10.6	Multifamily Loan and Security Agreement, dated as of November 20, 2014, by and between STAR Barrett Lakes, LLC and Berkeley Point Capital LLC
10.7	Multifamily Deed to Secure Debt, Assignment of Rents and Security Agreement, dated as of November 20, 2014, between STAR Barrett Lakes, LLC and Berkeley Point Capital LLC
10.8	Guaranty, dated as of November 20, 2014, by Steadfast Apartment REIT, Inc. to and for the benefit of Berkeley Point Capital LLC
10.9	Assignment of Management Agreement and Subordination of Management Fees, dated as of November 20, 2014, by and among STAR Barrett Lakes, LLC, Berkeley Point Capital LLC and Steadfast Management Company, Inc.
99.1	Press release, dated November 25, 2014

EX-10.1

EXHIBIT 10.1

PURCHASE AND SALE AGREEMENT

BETWEEN

CARLYLE CENTENNIAL CREST AT BARRETT LAKES, L.P.,

a Delaware limited partnership

AS SELLER

AND

STEADFAST ASSET HOLDINGS, INC.,

a California corporation

AS PURCHASER

As of September 10, 2014

16236-83    

Table of Contents

			Page
ARTICLE 1 PURCHASE AND SALE			1
	1.1	Agreement of Purchase and Sale	1
	1.2	Property Defined	3
	1.3	Permitted Exceptions	3
	1.4	Purchase Price	3
	1.5	Payment of Purchase Price	3
	1.6	Earnest Money	3
	1.7	Ownership of Century Tradenames and Service Marks	4
ARTICLE 2 TITLE AND SURVEY			4
	2.1	Title Examination; Commitment for Title Insurance	4
	2.2	Survey	4
	2.3	Title Objections; Cure of Title Objections	5
	2.4	Conveyance of Title	6
	2.5	Pre-Closing “Gap” Title/Survey Defects	7
	2.6	Seller's Covenant Not to Encumber	7
ARTICLE 3 INSPECTION			8
	3.1	Right of Inspection	8
	3.2	Right of Termination	9
	3.3	Confidentiality	9
ARTICLE 4 CLOSING			11
	4.1	Time and Place	11
	4.2	Seller's Obligations at Closing	11
	4.3	Purchaser's Obligations at Closing	13
	4.4	Credits and Prorations	14
	4.5	Closing Costs	17
	4.6	Conditions Precedent to Obligation of Purchaser	17
	4.7	Conditions Precedent to Obligation of Seller	18
	4.8	Seller's Tax Deferred Exchange	18
	4.9	Purchaser's Tax Deferred Exchange	19
ARTICLE 5 REPRESENTATIONS, WARRANTIES AND COVENANTS			20
	5.1	Representations and Warranties of Seller	20
	5.2	Knowledge Defined	22
	5.3	Survival of Seller's Representations and Warranties	23
	5.4	Covenants of Seller	23
	5.5	Representations and Warranties of Purchaser	25
	5.6	Survival of Purchaser's Representations and Warranties	27
	5.7	Covenants of Purchaser	27

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ARTICLE 6 DEFAULT			28
	6.1	Default by Purchaser	28
	6.2	Default by Seller	28
	6.3	Notice of Default; Opportunity to Cure	29
	6.4	Recoverable Damages	29
ARTICLE 7 RISK OF LOSS			30
	7.1	Damage	30
	7.2	Definition of Major Damage	30
	7.3	Seller's Insurance	31
ARTICLE 8 COMMISSIONS			31
	8.1	Broker's Commission	31
	8.2	Survival	31
ARTICLE 9 DISCLAIMERS AND WAIVERS			31
	9.1	No Reliance on Documents	31
	9.2	Disclaimers	32
	9.3	Certain Definitions	35
	9.4	Effect and Survival of Disclaimers	35
ARTICLE 10 ESCROW AGENT			36
	10.1	Investment of Earnest Money	36
	10.2	Payment on Demand	36
	10.3	Exculpation of Escrow Agent	36
	10.4	Stakeholder	36
	10.5	Interest	37
	10.6	Execution by Escrow Agent	37
ARTICLE 11 MISCELLANEOUS			37
	11.1	Assignment	37
	11.2	Notices	37
	11.3	Modifications	39
	11.4	Calculation of Time Periods	40
	11.5	Successors and Assigns	40
	11.6	Entire Agreement	40
	11.7	Further Assurances	40
	11.8	Counterparts	40
	11.9	Severability	40
	11.10	Applicable Law	40
	11.11	No Third Party Beneficiary	41
	11.12	Seller's Access to Records after Closing	41
	11.13	Schedules	41
	11.14	Captions	41
	11.15	Construction	42
	11.16	Termination of Agreement	42
	11.17	Survival	42

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11.18	Time of Essence	42
11.19	Covenant Not to Record	42
11.20	Limitation of Seller's Liability	42
11.21	JURY WAIVER	42
11.22	Audit Requirements	41
11.23	Attorney's Fees	42

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PURCHASE AND SALE AGREEMENT

THIS PURCHASE AND SALE AGREEMENT (this “Agreement”) is made as of September 10, 2014 (the “Effective Date”), by and between CARLYLE CENTENNIAL CREST AT BARRETT LAKES, L.P., a Delaware limited partnership (“Seller”), and STEADFAST ASSET HOLDINGS, INC., a California corporation (“Purchaser”).

FIDELITY NATIONAL TITLE INSURANCE COMPANY (“Escrow Agent”; in its capacity as title insurer sometimes herein called the“Title Company”), having an address at 1300 Dove Street, Suite 310, Newport Beach, CA 92660, Attn: Karen Robertson, is a party tothisAgreementforthelimitedpurposessetforthherein.

W I T N E S S E T H:

ARTICLE 1

PURCHASE AND SALE

1.1Agreement of Purchase and Sale. Subject to the terms and conditions hereinafter set forth, Seller agrees to sell and convey and Purchaser agrees to purchase the following:

(a)that certaintractorparceloflandbeing moreparticularlydescribedonSchedule 1.1(a),attachedheretoandmadeaparthereof(thepropertydescribedinthisclause(a)beinghereinreferredtocollectivelyasthe“Land”);

(b)all those rights, easements and appurtenances pertaining to the Land (whether now or hereafter existing), including (i) all right, title and interest of Seller (if any) in and to any streets, alleys or rights-of-way (whether open, closed or proposed), within or adjacent to the Land, and (ii) all right, title and interest of Seller with respect to any easements, covenants, agreements, rights, privileges, tenements, hereditaments and appurtenances that now or hereafter benefit or burden the Land (the property described in this clause (b) herein referred to collectively as the“Related Rights”);

(c)thebuildings,structures,facilities, installations,fixturesandotherimprovementsof every kind ontheLand,including specifically, without limitation, those certain buildings containing apartment units and related facilities and commonly known as Century Crest at Barrett Lakes apartments (thepropertydescribedinthisclause(c)beinghereinreferredtocollectivelyasthe“Improvements”,andtheLand, the Related RightsandtheImprovementsbeinghereinaftersometimescollectivelyreferredtoasthe“Real Property”);

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(d)all of Seller's right, title and interest in, to and under all tangible personal property upon the Land or within the Improvements, including specifically, without limitation, appliances, equipment, furniture, furnishings, carpeting, draperies and curtains, tools and supplies, and other items of tangible personal property owned by Seller and used exclusively in connection with the ownership, use, maintenance or operation of the Land and the Improvements, and including those items of tangible personal property identified on Schedule 1.1(d), attached hereto and incorporated herein by this reference, but excluding (i) cash and cash equivalents (except to the extent prorated at Closing), and any reserves or other deposits funded or made in connection with any financing encumbering the Property, (ii) computer software and computer files, (iii) any time clock(s), (iv) personal property owned by tenants under the Leases, (v) any equipment installed by, or in connection with, any telecommunication or utility provider and which is owned by any party other than Seller (excluding any reversionary interest that Seller may have therein which shall be assigned to Purchaser to the extent assignable), (vi) any items owned by employees of Seller or any property manager, (vii) any items leased to Seller, (viii) any digital voice receivers used in connection with recorded music at the Property, and (ix) all brochures, advertising copy, promotional materials, manuals, reports, portfolios, binders, training materials and other items on which the name “Century” or any of the other Marks (as defined in Section 1.7) appears (the property described in this clause (d), other than the excluded items, being herein referred to collectively as the “Tangible Personal Property”). Seller agrees to cooperate reasonably, if feasible, with Purchaser to transfer any property specific computer data files in electronic format to Purchaser provided Seller will not be in breach of any license agreement or other agreement with respect to the transfer of such data;

(e)all of Seller's right, title and interest as landlord or lessor in, to and under all written agreements listed and described on Schedule 1.1(e) (collectively, the “Rent Roll”) attached hereto and made a part hereof as well as under all similar agreements hereafter executed by Seller in accordance with the terms of this Agreement, pursuant to which any portion of the Land or Improvements is used or occupied by anyone other than Seller (the property described in this clause (e) being herein referred to collectively as the “Leases”);

(f)allofSeller'sright,titleandinterestin,toandunder(i)the Designated Service Contracts (as defined in Section 5.7of this Agreement);(ii)allassignableexistingwarrantiesandguarantiesissuedtoor inuring to the benefit of Seller inconnectionwiththeImprovementsortheTangible Personal Property;(iii) all governmental permits, licenses and approvals, if any, belonging to or inuring to the benefit of Seller and pertaining to the Real Property or the Tangible Personal Property, but only to the extent that such permits, licenses and approvals are assignable and only to the extent that such permits, licenses and approvals relate to the Real Property or the Tangible Personal Property as opposed to other property of Seller or its affiliates; (iv) resident and tenant files for current residents and tenants as of the Closing Date and, to the extent in the possession of Seller or its property manager as of the Effective Date, at any time during the previous twelve (12) months; (v) architectural and civil plans and specifications (to the extent in the possession of Seller or Seller's property manager); (vi) other non-confidential and non-proprietary records owned by Seller and used in connection with the operation of the Real Property or any part thereof and located on-site as of the Closing Date; (vii) all rights to use the name “Crest at Barrett Lakes” in connection

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with the Real Property; and (viii) all assignable telephone numbers and websites domain names associated with the Real Property including but not limited to the right, at Purchaser’s expense and at Purchaser’s sole option, to use http://www.century-apartments.com/century-crest-at-barret-lakes for a period of ninety (90) days after the Closing solely for the purpose of forwarding visitors to Purchaser’s website for the Real Property; but excluding any rights in or to the use of the Marks (as hereinafter defined) (thepropertydescribedin this clause (f), other than the excluded items, beingsometimeshereinreferredtocollectivelyasthe“Intangible Property”).

1.2Property Defined. The Land, the Related Rights, the Improvements, the Tangible Personal Property, the Leases and the Intangible Property are hereinafter sometimes referred to collectively as the “Property”.

1.3Permitted Exceptions. The Property shall be conveyed, and Purchaser shall accept the Property, subject to the matters which are, or are deemed to be, Permitted Exceptions pursuant to ARTICLE 2 hereof (herein referred to collectively as the “Permitted Exceptions”).

1.4Purchase Price. Seller is to sell and Purchaser is to purchase the Property for the total purchase price of Forty-Nine Million and No/100 Dollars ($49,000,000.00) (the “Purchase Price”).

1.5Payment of Purchase Price. The Purchase Price for the Property (inclusive of the Earnest Money theretofore delivered to Escrow Agent) shall be paid at Closing in cash by wire transfer of immediately available federal funds to a bank account of Escrow Agent designated by Escrow Agent in writing to Purchaser prior to the Closing (“Escrow Agent's Account”), and, as adjusted by prorations and adjustments as herein provided shall be subsequently payable in full at Closing in cash by wire transfer of immediately available federal funds to or for the benefit of Seller.

1.6Earnest Money.

(a)Within one (1) business day following the Effective Date (the “Opening of Escrow”),Purchasershall depositwithEscrow Agentthe sum of Four Hundred Ninety Thousand and No/100 Dollars ($490,000.00)bywiretransfer of immediately available funds (the “Initial Earnest Money”) in accordance with the wiring instructions attached hereto as Schedule 1.6(a). If, on the Inspection Date (as defined below), this Agreement is still in full force and effect, Purchaser shall deposit with Escrow Agent, within one (1) business day following the Inspection Date, an additional sum of Four Hundred Ninety Thousand and No/100 Dollars ($490,000.00) by wire transfer of immediately available funds (the “Additional Earnest Money”). The Initial Earnest Money, the Additional Earnest Money (if and when deposited) and the Extension Earnest Money (as hereinafter defined, if and when deposited), together with all interest accrued thereon, if any, shall individually and collectively be referred to herein as the “Earnest Money”. The Earnest Money shall be applied to the Purchase Price on the Closing Date and paid to Seller through the escrow process outlined herein.

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(b)IfPurchaserfailstodeliverthe Earnest Money, or any portion thereof, to the Escrow Agent within the time periods specified above, Seller shall have the right to terminate this Agreement, and upon such termination, Purchaser and Seller shall have no further rights, or obligations hereunder, except those which expressly survive termination of this Agreement.

(c)In any event, if Purchaser is entitled to have the Earnest Money returned to Purchaser, pursuant to any provision of this Agreement, One Hundred and no/100 Dollars ($100.00)of the Earnest Money shall nevertheless be paid to Seller as good and sufficient consideration for entering into this Agreement. In addition, Seller acknowledges that Purchaser, in evaluating the Property and performing its due diligence investigation of the Property, will devote internal resources and incur expenses, and that such efforts and expenses of Purchaser also constitute good, valuable and sufficient consideration for this Agreement.

1.7Ownership of Century Tradenames and Service Marks.

(a)Purchaserherebyacknowledgesand agreesthatthename“Century”andanyothertradenameorservicemarkthatincludestheword“Century” (hereinaftercollectivelyreferredtoasthe“Marks”),andeachofthem,aretradenamesandservicemarksofSeller;thattheMarks,andeachofthem,arethesoleandexclusivepropertyofSeller,whichownsallright,title,andinterestinandtotheMarks,andeachofthem;andPurchaser agreesthat,bythisAgreement,PurchasershallacquirenoownershiprightorinterestofanykindinortotheMarks,oranyofthem. PurchaserfurtheracknowledgesandagreesthatanyusebyPurchaseroftheMarks,oranyofthem,inanymannerinconnectionwiththePropertyorotherwise,willresultinimmediateandirreparableinjurytoSeller and its affiliates,andthatSellerand its affiliates shallbeentitledtotemporary,preliminary,andpermanentinjunctivereliefagainstPurchaserintheeventofanysuchuseoftheMarks,oranyofthem,byPurchaser,orintheeventofanyotherviolationbyPurchaserofthisSection 1.7. Purchaser may continue to use “Crest at Barrett Lakes” in the name of the Property after Closing provided Purchaser does not use the “Century” name or any of the Marks; provided,however, nothing contained herein shall be deemed to be a warranty of Seller's or Purchaser's right to use such names. Nothing herein shall limit the right (if any) of Seller to use the name “Crest at Barrett Lakes” or “Century Crest at Barrett Lakes” in any city other than Kennesaw, Georgia and the cities surrounding Kennesaw, Georgia, and nothing herein shall limit the right of Purchaser, at Purchaser’s expense at Purchaser’s sole option, to use http://www.century-apartments.com/century-crest-at-barret-lakes for a period of ninety (90) days after the Closing solely for the purpose of forwarding visitors to Purchaser’s website for the Real Property.

(b)SellerandPurchasershallreasonablycooperatewitheachotherinconnectionwiththeremovalofthe“Century”namefromtheProperty within sixty (60) days after Closing, including changes in signage, lease forms, marketing materials and thelike.

(c)ThisSection 1.7shallsurvivetheClosing.

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ARTICLE 2

TITLE AND SURVEY

2.1Title Examination; Commitment for Title Insurance. Purchaser shall obtain from Title Company, at Purchaser's expense, a commitment for an Owner's Policy of title insurance (the “Title Commitment”) for the Property, along with all underlying title exception documents referenced therein.Survey. Within one (1) day following the Effective Date, Seller shall, at Seller's expense, deliver to Purchaser that certain ALTA/ACSM Land Title Survey of the Real Property dated April 10, 2014, last revised May 23, 2014, prepared by Watts & Browning Engineers, Inc., and bearing the seal of Virgil Hammond, Georgia Registered Land Surveyor No. 2554. Purchaser, may, at Purchaser’s sole cost and expense, obtain updates to such survey delivered by Seller or obtain a new survey. Such survey shall constitute the "Survey" hereunder unless Purchaser obtains an updated or new survey in which event, the Survey shall be the updated or new survey obtained by Purchaser. For purposes of the Deed to be delivered to Purchaser at the Closing, the legal description of the Property shall be the legal description attached hereto as Schedule 1.1(a), less and except any right-of-way or other conveyances made by Seller prior to the Effective Date. If, however, the metes and bounds description drawn from the Survey reflects a legal description different from the legal description attached hereto as Schedule 1.1(a), Seller shall also deliver a quit claim deed, at Closing, containing the legal description drawn from the Survey.

2.2Title Objections; Cure of Title Objections.

(a)Purchaser or its attorneys shall have until that date which is ten (10) days prior to the Inspection Date (the “Title Objection Deadline”) to notify Seller and its attorneys, in writing, of such objections as Purchaser may have to the Title Commitment (including the title exception documents referred to therein) or Survey, other than the Permitted Exceptions described in clauses (a) through (d) of Section 2.4. Any item contained in the Title Commitment, any matter shown on the Survey or any document that is of record and properly indexed as of the date of such initial title examination that Seller is not required or has not agreed in writing to discharge pursuant to the provisions of Sections 2.3 or 2.5 shall be a “Permitted Exception”.

(b)IntheeventPurchasershallnotifySellerofobjectionstotitleortomattersshownonaSurveyon or before the Title Objection Deadline,Sellershallhavetheright,butnottheobligation,tocuresuchobjections except as otherwise expressly provided in this Section 2.3(d), hereinbelow. On or before the fifth (5th) day following Seller's receipt of Purchaser's notice of objections, SellershallnotifyPurchaserinwritingwhetherSellerelectstoattempttocuresuchobjections (and Seller's failure to provide such a notice shall be deemed an election by Seller not to cure any such objection). IfSellerelectstoattempttocure, then Sellershalluse commercially reasonable efforts toattempttoremove,satisfyorcurethesame to Purchaser’s reasonable satisfaction. IfSellerelects(or is deemed to have elected) nottocureany objectionsspecifiedinPurchaser'snotice, or if Seller notifies Purchaser of Seller's intent to cureanyobjectionand thereafter Seller fails or is unable to effect a cure prior to Closing (or any date to which the Closing has been extended), then in either such case Purchaser shall have the right to elect one, but not both, of the following options, which election must in each case be made within the time period provided in paragraph (c) below:

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(i)to accept a conveyance of the PropertysubjecttothePermittedExceptions,specificallyincludinganymatterobjectedtobyPurchaserwhichSellerisunwillingorunabletocure,andwithoutreductionofthePurchasePrice;or

(ii)toterminatethisAgreement bysendingwrittennoticethereoftoSeller,andupondeliveryofsuchnoticeoftermination,thisAgreement shallterminateandthe Earnest Money shallbereturnedtoPurchaser,andthereafterneitherpartyheretoshallhaveanyfurtherrights,obligationsorliabilitieshereunder with respect to the Property,excepttotheextentthatanyright,obligationorliabilitysetforthhereinexpresslysurvivesterminationofthisAgreement; provided, however that if such termination is due to an objection that Seller previously notified Purchaser that Seller intended to cure and thereafter failed to do so prior to Closing, then Seller shall additionally pay to Purchaser, concurrently with such termination, Purchaser’s Third Party Costs (as hereinafter defined), which obligation shall survive termination.

(c)IfSeller notifies Purchaser that Seller does not intend to attempt to cure any title objection, or if Seller is deemed to have elected not to cure any title objections, or if Seller notifies Purchaser of Seller's intent to cureanyobjectionand SellerlaternotifiesPurchaserthatSellerhas failed or willbeunabletoeffectacurethereof, then in any such case Purchaser shall, within five (5) days after receiving Seller's notice or the date of Seller's deemed election or notice of failed cure, as applicable, notify Seller in writing whether Purchaser shall elect toaccepttheconveyanceunderclause(b)(i) above or to terminate this Agreement under clause (b)(ii)above (with Purchaser's failure to provide such a notice deemed an election by Purchaser to accept conveyance under clause (b)(i) above).

(d)Notwithstanding anything contained herein to the contrary, Seller shall be obligated at Closing to discharge (i) all mortgages of Seller (regardless of whether Purchaser objects to such mortgage), (ii) all monetary liens arising by, through or under Seller, and (iii) all exceptions or encumbrances created by, through or under Seller in violation of Section 2.6 hereinbelow. The term “mortgage” as used herein includes any mortgage, deed of trust, deed to secure debt and similar security instrument securing an indebtedness of Seller and encumbering the Property or any portion thereof; the terms “discharge” and “discharged” as used herein include compliance with a statutory bonding procedure that has the legal effect of removing the mortgage or item as a lien on the Property or otherwise allows the mortgage or item to be removed from the title exceptions in the Title Policy (as defined below).

2.3Conveyance of Title. At Closing, Seller shall convey and transfer the Property to Purchaser. It shall be a condition to Purchaser's obligation to close this transaction that title to the Real Property conveyed and transferred to Purchaser shall be such title to the Real Property as will enable the Title Company to issue to Purchaser an extended coverage American Land Title Association (ALTA) Form 2006 Owner's Policy of Title Insurance for the Property (the “Title Policy”) covering the Real Property, in the full amount of the Purchase Price, subject to the following matters, which shall be deemed to be Permitted Exceptions:

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(a)therightsoftenants,astenantsonly,without any right to acquire any portion of the Property, undertheLeasesdescribedin the Rent Roll andanynewLeasesenteredintobetweentheEffectiveDateandClosingand(if required) approvedbyPurchaserinaccordancewiththetermsofthisAgreement;

(b)thelienofalladvaloremrealestatetaxesandassessmentsnotyetdueandpayableasofthedateofClosing,subjecttoadjustmentashereinprovided;

(c)local,stateandfederallaws,ordinancesorgovernmentalregulations,includingbutnotlimitedto,building,zoningand land use laws,ordinancesandregulations,noworhereafterineffectrelatingtotheProperty;

(d)all items set forth as exceptions in Schedule B, Part II, of the Title Policy delivered to Purchaser by the Title Company at Closing;

(e)additional items, if any, appearing of record or shown on the Survey, except to the extent Seller agrees or is required to cure any such matters pursuant to Section 2.3or 2.5hereof;

(f)monetary liens arising by, through or under Purchaser; and

(g)additional items, if any, approved by Purchaser pursuant to Section 2.6hereof.

2.4Pre-Closing “Gap” Title/Survey Defects. Whether or not Purchaser shall have furnished to Seller any notice of title objections pursuant to the foregoing provisions of this Agreement, Purchaser may, at or prior to Closing, notify Seller in writing of any objections to title or survey matters affecting the Property and first raised by the Title Company or the Surveyor between (a) the date of the most recent version of the Title Commitment and/or Survey, as applicable, and (b) the Closing Date; provided, however, that Purchaser must notify Seller of any such objections within five (5) business days of Purchaser's first receipt of the updated Title Commitment, updated survey or other document, whichever first provides notice of the condition giving rise to any such objection. With respect to any objections to title or survey matters set forth in such notice, except for objections arising or resulting from Seller's breach of the covenant contained in Section 2.6 hereof, Seller shall have the same option to cure and Purchaser shall have the same option to accept title subject to such matters or to terminate this Agreement as those which apply to any notice of objections made by Purchaser on or before the Title Objection Deadline.

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Seller's Covenant Not to Encumber. Seller agrees that, between the Effective Date and the Closing Date, Seller will not sell, assign, rent, convey (absolutely or as security), grant a security interest in, or otherwise encumber or dispose of, the Property (or any part thereof or estate therein) in any manner that will survive Closing, except as approved in writing by Purchaser or as expressly provided in this Agreement. Notwithstanding the foregoing, Seller shall have the right to (i) continue leasing apartment units in the Property in the manner described in Section 5.4(b) hereof, (ii) terminate, amend or enter into service contracts in the manner described in Section 5.4(g) hereof, and (iii) use, deplete, remove or replace items of Tangible Personal Property in the ordinary course of business, provided any appliances, leasing office and pool furniture, fitness center equipment and other similar items of equipment or furniture so removed by Seller are promptly replaced by Seller, at its cost, with items of comparable value and utility.

ARTICLE 3

INSPECTION

3.1Right of Inspection.

(a)Beginning on the Effective Date, and continuing thereafter so long as this Agreement remains in full force and effect, Purchaser and its agents, representatives, contractors and consultants shall, at Purchaser’s sole cost and expense and upon two (2) business days prior telephonic notice to Seller, have the right to make physical inspections of the Property and to examine at such place or places at the Property, in the offices of the property manager, any operating files maintained by Seller or its property manager in connection with the operation, leasing, maintenance and/or management of the Property, including, without limitation, the Leases, lease files, service contracts, bills, invoices, receipts and other general records relating to the income and expenses of the Property, correspondence, surveys, plans and specifications, warranties for services and materials provided to the Property and similar materials, but excluding materials not directly related to the operation, leasing, maintenance, and/or management of the Property such as Seller's internal memoranda, financial projections, insurance policies (other than certificates), operating budgets, appraisals, accounting and tax records (other than accounting records specifically set forth in the list of Deliveries or required under Section 11.22) and similar proprietary or confidential information (the “Excluded Items”). Seller shall have the right, but not the obligation, to have one of its representatives accompany Purchaser or its representatives on each such inspection or examination. Seller shall reasonably cooperate with Purchaser in its inspections and examinations of the Property, but Seller shall not be obligated to incur any liability, undue time commitment or expense in connection therewith. In addition to the foregoing, Seller shall provide to Purchaser, within three (3) days after the Effective Date, at the sole expense of Seller, all documents pertaining to the Property described on Schedule 3.1 attached hereto or otherwise reasonably requested by Purchaser, but excluding any Excluded Items; provided, however, that Purchaser agrees that the items notated thereon as “to be made available at the Property only” shall not be delivered by Seller to Purchaser but shall be made available to Purchaser at the Property and all items noted thereon as "electronic" shall be delivered to Purchaser in an electronic format.

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(b)Purchaser’s inspections of the Property shall not damage the Property in any respect, shall not be invasive in any respect (including, without limitation, soil borings, test pits, groundwater testing, or Phase II or Phase III environmental testing; it being agreed by Seller that testing for radon shall not be deemed invasive), and shall be conducted in accordance with standards customarily employed in the industry and in compliance with all governmental laws, rules and regulations. Following each such entry by the Purchaser Parties with respect to the Inspections, Purchaser shall promptly restore, or cause to be restored, any damage caused to the Property by Purchaser or its employees, agents or representatives during any Inspections to substantially its original condition as existed immediately prior to any such Inspections. Purchaser shall not have the right to submit any samples or other materials to any testing laboratory or similar facility without obtaining the prior written consent of Seller other than as is customary in connection with friable asbestos specifically identified in a Phase I environmental assessment or radon assessment.

(c)Purchaser shall indemnify, hold harmless and defend Seller, its members, and their respective, members, affiliates, indirect owners (including trusts and plans), trustees, officers, directors, shareholders, agents and employees from and against any and all claims, demands, causes of action, liabilities, losses, costs, damages and expenses (including reasonable attorneys' fees and expenses and court costs incurred in defending any such claim or in enforcing this indemnity but expressly excluding punitive, consequential, special or incidental damages, except to the extent actually required by law to be paid to a third party unaffiliated with Seller) of whatsoever nature (for purposes of this Section 3.1, individually a “Claim” and collectively, “Claims”) that are incurred by Seller or any other indemnified party and arising out of or in connection with the acts or omissions of Purchaser and its agents, representatives, contractors and consultants, or any of them, in connection with the Inspections of the Property, including but not limited to Claims arising out of or in connection with personal injury or death of persons, loss, destruction or damage to property, or liens or claims of lien filed against the Property, but excluding any Claims to the extent of any gross negligence or willful misconduct of Seller or any other indemnified party. Notwithstanding the foregoing, Purchaser shall have no liability for pre-existing conditions discovered by any inspection of the Real Property except to the extent actually aggravated by Purchaser. This Section 3.1(c) shall survive Closing or any termination of this Agreement.

3.2Right of Termination. Seller agrees that in the event Purchaser determines, in Purchaser's sole and absolute discretion, that it does not wish to acquire the Property for any reason or no reason, then Purchaser shall have the right to terminate this Agreement by giving written notice of such termination to Seller on or before the date that is thirty (30) days following the Opening of Escrow (the “Inspection Date”). Upon any such termination of this Agreement pursuant to Purchaser's rights under this Section, 3.2 the Earnest Money shall be promptly returned to Purchaser in accordance with Section 1.6 hereof, and Purchaser and Seller shall have no further rights and obligations hereunder except those which expressly survive termination of this Agreement. If Purchaser fails to give Seller timely notice of termination on or before the Inspection Date, then Purchaser shall no longer have the right to terminate this Agreement under this Section 3.2 and (subject to any contrary provisions of this Agreement) shall be bound to proceed to Closing and consummate the transaction contemplated hereby pursuant to the terms of this Agreement. Time is of the essence with respect to the provisions of this Section 3.2. The period commencing on the

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Effective Date and ending on the Inspection Date may sometimes be referred to herein as the "Inspection Period".

3.3Confidentiality.

(a)Purchaser acknowledges that all reports and other information provided to Purchaser, including those items set forth and described in Schedule 3.1 hereof (the “Deliveries”), under this Agreement or separate arrangement with Seller or Broker are for informational purposes only and shall not be construed as a representation or warranty on the part of Seller or any other party regarding the Property. Notwithstanding any provision of this Agreement, Purchaser shall not have access to, and Seller shall not be obligated to make available to Purchaser, any confidential, proprietary or privileged information of Seller related to the Property, such excluded materials to include Seller’s internal memoranda, financial projections, operating budgets, appraisals, tax returns and similar proprietary, confidential or privileged information. Notwithstanding anything in the foregoing to the contrary, Seller will make available to Purchaser financial statements, operating reports and rent rolls used in Seller’s ordinary course of business.

(b)The existence and contents of this Agreement, the negotiations of parties with respect to the possible sale and purchase of the Property and any matters disclosed by any Inspections undertaken by Purchaser with respect to the Property and any additional information furnished by Seller to Purchaser from time to time (including, without limitation, the Deliveries) 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. No advertisement or other publicity concerning this transaction shall be made or disseminated by either party at any time without the review and approval of both parties hereto. Both parties recognize the need to disclose, and agree to the disclosure of, certain aspects of this transaction to their respective lenders, investors, accountants, attorneys and other consultants. Neither party is responsible for the actions of third parties as to the disclosure of confidential information, but each party agrees to inform their lender, investors, accountants, attorneys and other consultants of the confidentiality of this transaction and all such other information and, upon request of the other, agrees to use reasonable efforts to obtain confidentiality agreements from such third parties. Notwithstanding the foregoing of this Section 3.3, either of Seller or Purchaser (or both) may issue a press release generally describing the transaction from and after Closing, provided that any such press release issued by either party must be approved in advance by the other party if and to the extent that it identifies the other party or any non-public information relating thereto. Notwithstanding anything in this Agreement to the contrary, Seller hereby acknowledges and agrees that Purchaser or its affiliates, agents, consultants and/or representatives may communicate with any local governmental authority having jurisdiction over the Property for the purpose of gathering information reasonably related to the zoning compliance of and taxes relating to the Property.

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(c)If this Agreement is terminated, Purchaser shall, within seven (7) days from the date of such termination, return or cause to be returned to Seller all Deliveries and, if requested by Seller and upon reimbursement of Purchaser's actual costs therefor, deliver to Seller copies of all third party reports prepared by or on behalf of Purchaser (to the extent Purchaser is legally entitled to do so), without representation or warranty and without any right of reliance thereon. The provisions of this Section 3.3 shall survive the termination of this Agreement.

ARTICLE 4

CLOSING

4.1Time and Place. The consummation of the transaction as contemplated hereby (“Closing”) shall be held at the office of Escrow Agent on the date that is thirty (30) days following the Inspection Date, via escrow funds and fully executed documents. At Closing, Seller and Purchaser shall perform the obligations set forth in, respectively, Section 4.2and Section 4.3. The Closing may be held at such other place or such earlier time and date as Seller and Purchaser shall mutually reasonably approve in writing. Notwithstanding the foregoing, Purchaser shall have the right to extend Closing for up to thirty (30) days beyond the original outside Closing Date upon delivery of written notice to Seller at least three (3) business days prior to the then-scheduled Closing Date, along with a simultaneous delivery to Escrow Agent of an additional Earnest Money deposit, by wire transfer of immediately available funds, in the amount of Three Hundred Fifty Thousand and No/100 Dollars ($350,000.00) (the “Extension Earnest Money”). The Extension Earnest Money shall be applied as a credit against the Purchase Price at Closing. The date on which the Closing is scheduled to occur hereunder (or, if earlier or as extended hereby, the date on which Closing occurs) is sometimes referred to herein as the “Closing Date”. The parties will endeavor to “pre-close” on the business day prior to the Closing Date, so as to allow the wire transfers of the Purchase Price from Purchaser and/or its lender to Escrow Agent to occur at the opening of business on the Closing Date or as promptly thereafter as practical.

4.2Seller's Obligations at Closing. At Closing, Seller shall:

(a)delivertoPurchaseradulyexecuted limited warrantydeed inthe form attached hereto as Schedule 4.2(a) and by this reference made a part hereof,conveyingtheReal Property to PurchasersubjectonlytothePermittedExceptions (collectively, the“Deed”);

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(b)delivertoPurchaser a bill of sale and assignment andassumption of leases and service contracts, in the form attached hereto as Schedule 4.2(b) and by this reference made a part hereof, duly executed by Seller, pursuant to which (i) Seller shall convey the Tangible Personal Property and the Intangible Property to Purchaser, and (ii) Seller shall assign to Purchaser, and Purchaser shall assume from and after the date of Closing, Seller's interest in and to the Leases and Designated Service Contracts, as amended or supplemented pursuant to this Agreement (collectively, the “Bill of Sale and Assignment”);

(c)joinwithPurchasertoexecuteanotice (the “Tenant Notice”)inthe formof Schedule 4.2(c) attached hereto,whichPurchasershallsendtoeachtenantundereachoftheLeasesinformingsuchtenantofthesaleofthePropertyandoftheassignmenttoPurchaserofSeller'sinterestin,andobligationsunder,theLeases(including,ifapplicableanysecuritydeposits)anddirectingthatallrentandothersumspayableaftertheClosingundereachsuchLeaseshallbepaidassetforthinthenotice;

(d)delivertoPurchaseracertificate (the “Seller's Closing Certificate”),datedasofthedateofClosingandduly executedby Seller,in the form of Schedule 4.2(d) attached hereto,statingthattherepresentationsandwarrantiesofSellercontainedinSection 5.1of thisAgreementaretrueandcorrectinallmaterialrespectsasofthedateofClosing(withnecessarymodificationstoreflectanychangesthereinoridentifyinganyrepresentationorwarrantywhichisnot,ornolongeris,trueandcorrectandexplainingthestateoffactsgivingrisetothechange); provided, however, that the inclusion of any change or exception in such certificate shall not prejudice Purchaser's rights under this Agreement with respect to the subject matter of such change or exception, including the right of Purchaser to terminate this Agreement and receive a return of the Earnest Money, as provided in Section 4.6 or Section 6.2, as the case may be. The Seller's Closing Certificate shall include an updated Rent Roll dated no earlier than two (2) days prior to the Closing Date as to which Seller shall make the same representations and warranties, as of the date of such Rent Roll, as Seller makes under Section 5.1(d) with respect to the Rent Roll attached hereto;

(e)delivertoPurchasersuchevidenceastheTitleCompanymayreasonablyrequireastotheauthorityofthepersonorpersonsexecutingdocumentsonbehalfofSeller;

(f)delivertoPurchaseranaffidavitdulyexecutedby SellerstatingthatSellerisnota“foreignperson”asdefinedintheFederalForeignInvestmentinRealPropertyTaxActof1980andthe1984TaxReformAct;

(g)deliver to the Title Company a title insurance affidavit, duly executed by Seller or a representative of Seller, in form and content reasonably satisfactory to Seller and the Title Company regarding construction, debts, liens and parties in possession and other matters customarily required by Title Company and, if applicable, a customary “gap” indemnity not to exceed five (5) days in duration and otherwise in form and substance reasonably acceptable to Seller;

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(h)deliver to Purchaser at the Property theLeases, together with such leasing and property files andrecords, and other Deliveries, all to the extent not previously delivered and the originals thereof to the extent in Seller’s or Seller' property manager's possession;

(i)delivertoPurchaserpossessionandoccupancyoftheProperty,subject onlytothePermittedExceptions;

(j)deliver a closing statement evidencing the transaction contemplated by this Agreement and such additional documents as shall be reasonably requested by the Title Company or required to consummate the transaction contemplated by this Agreement; provided, however, that in no event shall Seller be required to indemnify the Title Company, Purchaser, or any other party pursuant to any such documents, or undertake any other material liability not expressly contemplated in this Agreement, unless Seller elects to do so in its sole discretion;

(k)if the legal description attached hereto as Schedule 1.1(a) differs from the legal description of the Property drawn from the Survey, Seller shall at Closing deliver (in addition to the Deed) a quit claim deed conveying the Property pursuant to the legal description drawn from the Survey, which legal description shall be subject to Seller's approval, which approval shall not be unreasonably withheld;

(l)deliver to Purchaser a broker lien waiver affidavit, as is customary in the State of Georgia; and

(m)deliver to the Title Company an affidavit affirming the residence of Seller, as required by Georgia law, duly executed by Seller or a representative of Seller, in form and content reasonably satisfactory to Seller and the Title Company.

4.3Purchaser's Obligations at Closing. At Closing, Purchaser shall:

(a)delivertoEscrow AgentthefullamountofthePurchase Price (inclusive of the Earnest Money theretofore delivered to Escrow Agent) asincreasedordecreasedbyprorationsandadjustmentsashereinprovided,prior to 3:00 p.m. (Eastern time) ontheClosingDate,inimmediatelyavailablefederalfundswiretransferredtoEscrow Agent's Account, and deliver to Escrow Agent instructions to release the full amount of the Purchase Price, as increased or decreased by prorations and adjustments as herein provided, to Seller;

(b)joinSellerinexecutionofallcounterparts of theBill of Sale and Assignment and the Tenant Notice. In connection with the Tenant Notice,PurchasershalldelivertoeachandeverytenantofthePropertyunderaLeasethereofasignedstatementacknowledgingPurchaser'sreceiptandresponsibilityforeachtenant'ssecuritydeposit(totheextent credited ordeliveredbySellertoPurchaseratClosing),ifany,allincompliancewithandto the extent required bytheapplicablelaw. Theprovisionsofthissub-sectionshallsurviveClosing;

(c)delivertoSellersuchevidenceastheTitleCompanymayreasonablyrequireastotheauthorityofthepersonorpersonsexecutingdocumentsonbehalfofPurchaser;

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(d)delivertoSelleracertificate datedasofthedateofClosingandduly executedby Purchaser, statingthattherepresentationsandwarrantiesofPurchasercontainedinSection 5.5 of thisAgreementaretrueandcorrectinallmaterialrespectsasofthedateofClosing (with necessary modifications to reflect any changes therein or identifying any representation or warranty which is not, or no longer is, true and correct and explaining the state of facts giving rise to the change); provided, however, that the inclusion of any change or exception in such certificate shall not prejudice Seller's rights under this Agreement with respect to the subject matter of such change or exception, including the right of Seller to terminate this Agreement and receive the Earnest Money, as provided in Section 4.7 or Section 6.1, as the case nay be;

(e)deliveraclosing statement evidencing the transaction contemplated by this Agreement andsuchadditionaldocumentsasshallbereasonablyrequestedbytheTitleCompanyorrequiredtoconsummatethetransactioncontemplatedbythisAgreement; provided, however, that in no event shall Purchaser be required to indemnify the Title Company, Seller, or any other party pursuant to any such documents, or undertake any other material liability not expressly contemplated in this Agreement, unless Purchaser elects to do so in its sole discretion; and

(f)deliver to Seller a broker lien waiver affidavit, as is customary in the State of Georgia.

4.4Credits and Prorations.

(a)AllincomeandexpensesinconnectionwiththeoperationofthePropertyshallbeapportioned,asof11:59p.m.(Eastern time)ontheday prior to the ClosingDate,asifPurchaserwerevestedwithtitletothePropertyduringtheentireClosingDate,suchthat,exceptasotherwiseexpresslyprovidedtothecontraryinthisAgreement,SellershallhavethebenefitofincomeandtheburdenofexpensesforthedayprecedingtheClosingDateandthePurchasershallhavethebenefitofincomeandtheburdenofexpensesfortheClosingDateandthereafter.Items (1)-(5) below will be prorated at Closing utilizing the information known at that time. A post-closing “true-up” shall take place within ninety (90) days of the Closing Date to adjust the prorations of said items (1), (3), (4) and (5), if necessary, and within a reasonable time to adjust the proration of said item (2), if necessary. Suchprorateditemsshallinclude,withoutlimitation,thefollowing:

(1)rents,ifany,based on the amount collected for the current month.Theterm“rents”asusedinthisAgreementincludesallpaymentsdueandpayableby, or received from,tenantsundertheLeases other than refundable deposits, application fees, reimbursement payments that are attributable to periods prior to Closing, late charges, pet and cleaning charges and termination payments (which refundable deposits shall be treated as set forth in Section 4.4(b)(1), but such other amounts shall be retained by Seller);

(2)advaloremtaxesandassessmentsleviedagainsttheProperty (includingpersonalpropertytaxesontheTangible Personal Property), which shall be prorated as set forth in Section 4.4(b)(2) hereof;

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(3)payments or amounts dueundertheDesignated Service Contracts. To the extent any rebate, concession or commission payable to Seller under any Designated Service Contract has accrued before Closing but has not been paid to Seller, Seller shall receive a credit for such accrued amounts at Closing; Seller shall retain any signing bonus or similar payments received by Seller before Closing to the extent solely relating to the period prior to Closing and all other up-front payments shall be prorated;

(4)gas,electricity,waterandotherutilitychargesforwhichSellerisliable,ifany,suchchargestobeapportionedatClosingonthebasisofthemostrecentmeterreading occurringpriortoClosing or the most recent utility bill received by Seller, as applicable, including, without limitation, water charges not yet due and payable to such utility provider at Closing, but which amounts are customarily billed directly to Seller and reimbursed by tenants;and

(5)anyotheroperatingexpenses, income orotheritemspertainingtothePropertywhicharecustomarilyproratedbetweenapurchaserandasellerincomparable commercial transactions in theareainwhichthePropertyislocated.

(b)Notwithstandinganythingcontainedintheforegoingprovisions:

(1)AtClosing,(A)Sellershall credit to Purchaser the amount of such unforfeited resident deposits as shown on the rent roll, and(B)PurchasershallcredittotheaccountofSellerallrefundablecashorotherdepositspostedwithutilitycompaniesservingtheProperty,or,at either party's option,Purchaser shall contract directly with the utility companies andSellershallbeentitledtoreceiveandretainsuchrefundablecashanddeposits; provided that Purchaser and Seller will cooperate so that utility service to the Property is not interrupted. For the purposes of this Section 4.4(b)(1) the term “unforfeited resident deposits” means any refundable resident deposits which are held by Seller and which Seller has not applied against delinquent rents, property damage or otherwise in accordance with the applicable Lease.

(2)Anyadvaloremtaxesfor the current year paidatorpriortoClosingshallbeproratedbasedupontheamountsactuallypaid for the current tax year. Ifalltaxesandassessmentsforthecurrenttax yearhavenotbeenpaidbeforeClosing,then SellershallbechargedatClosinganamountequaltothatportionofsuchtaxesandassessmentswhichrelatestotheperiodbeforeClosingandPurchasershallpaythetaxesandassessmentspriortotheirbecomingdelinquent.Anysuchapportionmentmadewithrespecttoataxyearforwhichthetaxrateorassessedvaluation,orboth,havenotyetbeenfixedshallbebaseduponthetaxrateand/orassessedvaluationlastfixed. Totheextentthattheactualtaxesandassessmentsforthecurrenttax yeardifferfromtheamountapportionedatClosing,thepartiesshallmakeallnecessaryadjustmentsbyappropriatepaymentsbetweenthemselvesfollowingClosing promptly following the availability of the final tax bills. For avoidance of doubt, any refunds generated from appeal of ad valorem taxes for year

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(s) prior to the current year shall remain the property of Seller and paid to Seller by Purchaser, if and to the extent received by Purchaser; provided however that Seller shall have no right to commence any appeal after the Effective Date.

(3)Gas, electricity, water and other utility charges referred to in Section 4.4(a)(4) above which are payable by any tenant directly to a third party shall not be apportioned hereunder, and Purchaser shall accept title subject to any of such charges which are unpaid and Purchaser shall look solely to the responsible tenant for the payment of the same.

(4)If Seller shall have paid any gas, electricity, water or other utility charges referred to in Section 4.4(a)(4) above directly to a third party which are reimbursable by tenants, but shall not have been reimbursed therefor by the time of Closing, Seller shall not receive any credit for such charges so paid by Seller. Rather, Purchaser shall use reasonable efforts for a period of sixty (60) days after the Closing Date, to collect all such reimbursable utility bills for utility charges incurred by Seller and reimbursable to Seller from the tenants under the Leases for periods prior to Closing (“RUBS”), and, if received by Purchaser, shall promptly remitted the same to Seller. Thereafter, Buyer shall have no obligation to remit RUBS income to Seller.

(5)Intentionally omitted.

(6)Seller shall pay in full all leasing commissions and locators' and finders' fees, if any, due to leasing or other agents (pursuant to a contractual arrangement with Seller) for each Lease and Lease renewal entered into by Seller prior to the Closing Date promptly when due.

(7)The Tangible Personal Property is included in this sale, without further charge.

(8)UnpaidanddelinquentrentcollectedbySellerandPurchaserafterthedateofClosingshallbedeliveredasfollows: (a)ifSellercollectsanyunpaidordelinquentrentfortheProperty,Sellershall,withinfifteen(15)daysafterthereceiptthereof,delivertoPurchaseranysuchrentwhichPurchaserisentitledtohereunderrelatingtothedateofClosingandanyperiodthereafter,and(b) ifPurchasercollectsanyunpaidordelinquentrentfromtheProperty,Purchasershall,withinfifteen(15)daysafterthereceiptthereof,delivertoSelleranysuchrentwhichSellerisentitledtohereunderrelatingtotheperiodpriortothedateofClosing. SellerandPurchaseragreethatallrentreceivedbySellerorPurchaseraftertheClosingshallbeappliedfirsttocurrentrentals and thentodelinquentrentals,ifany,ininverseorderofmaturity. PurchaserwillmakeagoodfaitheffortafterClosing for up to ninety (90) daystocollectallrentsintheusualcourseofPurchaser'soperationoftheProperty,butPurchaserwillnotbeobligatedtoincur any expense or instituteanylawsuitorothercollectionprocedurestocollectdelinquentrents. Notwithstanding the foregoing, Seller shall have the sole right to collect rents, if any, which are unpaid or delinquent as of Closing, from tenants who are no longer

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in occupancy as of the Closing (and Purchaser shall promptly deliver any such rents to Seller if received by Purchaser after Closing).

(9)TheprovisionsofthisSection 4.4(b) shallsurviveClosing.

(c)The Purchase Price shall be adjusted for any "rent ready" credit under Section 5.4(e) hereof.

4.5Closing Costs. Seller shall pay (a) the fees of any counsel representing it in connection with this transaction, (b) applicable Georgia transfer taxes due upon recordation of the Deed, (c) the cost of the Survey provided by Seller (but not the cost of any update or revision to the Survey), (d) the costs of curing all title objections for which Seller is responsible under this Agreement, (e) the costs of recording the Deed and all mortgage cancellations, (f) one-half (1/2) of any escrow fees charged by the Escrow Agent (up to a maximum of $500.00), and (g) all fees payable to Broker. Purchaser shall pay (A) the fees of any counsel representing Purchaser in connection with this transaction, (B) all premiums for the Title Policy and any lender’s policy, and any and all endorsements to the Title Policy required by Purchaser or Purchaser’s lender(s), (C) the cost of Purchaser’s inspections of the Property, (D) the cost of any updates or revisions to the Survey, including updates or revisions necessary to comply with the requirements of Purchaser or Purchaser’s lender(s) and (E) one-half (1/2) of any escrow fees charged by the Escrow Agent. All other costs and expenses incident to this transaction and the closing thereof shall be paid by the party incurring same.

4.6Conditions Precedent to Obligation of Purchaser. The obligation of Purchaser to consummate the transaction hereunder shall be subject to the fulfillment on or before the date of Closing (or such earlier time as otherwise required hereby) of all of the following conditions, any or all of which may be waived by Purchaser in its sole discretion:

(a)SellershallhavedeliveredtoEscrow Agentalloftheitemsrequiredtobedeliveredby Seller or Seller's agents pursuanttothetermsofthisAgreement,includingbutnotlimitedto,thoseprovidedforinSection 4.2.

(b)AlloftherepresentationsandwarrantiesofSellercontainedinthisAgreementshallbetrueandcorrectinallmaterialrespectsasofthedateofClosing (with necessary modifications to reflect any changes therein or identifying any representation or warranty which is not, or no longer is, true and correct and explaining the state of facts giving rise to the change).

(c)Sellershallhaveperformedandobserved,inallmaterialrespects,allcovenantsandagreementsofthisAgreementtobeperformedandobservedbySellerasofthedateofClosing.

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(d)The Title Company is unconditionally committed to issue the Title Policy subject only to the Permitted Exceptions upon payment of the premium therefor and satisfaction by Purchaser of all requirements set forth in the Title Commitment which are within the control of Purchaser to satisfy.

In the event any of the foregoing conditions has not been satisfied by the Closing Date, Purchaser shall have the right to terminate this Agreement by written notice given to Seller on the Closing Date, whereupon Escrow Agent shall promptly refund the Earnest Money to Purchaser and the parties shall have no further rights, duties or obligations hereunder, other than those which are expressly provided herein to survive the termination of this Agreement; provided, however, that if any of the foregoing conditions has not been satisfied due to a default by Purchaser or Seller hereunder, then Purchaser's and Seller's respective rights, remedies and obligations shall instead be determined in accordance with Article 6.

4.7Conditions Precedent to Obligation of Seller. The obligation of Seller to consummate the transaction hereunder shall be subject to the fulfillment on or before the date of Closing of all of the following conditions, any or all of which may be waived by Seller in its sole discretion:

(a)Escrow Agent shall have received thePurchase Price asadjustedpursuanttoandpayableinthemannerprovidedforinthisAgreement.

(b)PurchasershallhavedeliveredtoEscrow Agentallofthe materialitemsrequiredtobedeliveredby Purchaser pursuanttothetermsofthisAgreement,includingbutnotlimitedto,thoseprovidedforinSection 4.3.

(c)AlloftherepresentationsandwarrantiesofPurchasercontainedinthisAgreementshallbetrueandcorrectinallmaterialrespectsasofthedateofClosing (with necessary modifications to reflect any changes therein or identifying any representation or warranty which is not, or no longer is, true and correct and explaining the state of facts giving rise to the change).

(d)Purchasershallhaveperformedandobserved,inallmaterialrespects,allcovenantsandagreementsofthisAgreementtobeperformedandobservedbyPurchaserasofthedateofClosing.

In the event any of the foregoing conditions has not been satisfied by the Closing Date, Seller shall have the right to terminate this Agreement by written notice given to Purchaser on the Closing Date, whereupon Escrow Agent shall promptly refund the Earnest Money to Purchaser and the parties shall have no further rights, duties or obligations hereunder, other than those which are expressly provided herein to survive a termination of this Agreement; provided, however, if any of the foregoing conditions has not been satisfied due to a default by Purchaser or Seller hereunder, then Purchaser's and Seller's respective rights, remedies and obligations shall instead be determined in accordance with Article 6.

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4.8Seller's Tax Deferred Exchange. Seller may convey the Property as part of a tax deferred exchange for the benefit of Seller pursuant to Section 1031 of the Internal Revenue Code. With respect thereto, Seller may assign all of Seller's contract rights and obligations hereunder to an exchange accommodation titleholder or a qualified intermediary, as part of, and in furtherance of, such tax deferred exchange. Purchaser agrees to reasonably cooperate in such exchange for the benefit of Seller at no cost, expense or liability to Purchaser and without reduction or alteration of the rights of Purchaser under this Agreement and with respect to Seller; and Purchaser further agrees to execute any and all documents (subject to the reasonable approval of Purchaser's legal counsel) as are reasonably necessary in connection with such exchange at Seller's sole expense provided that Purchaser shall not be required to undertake any liability or obligation in so doing and provided that such exchange does not extend the Closing Date. As part of such exchange, Seller shall convey the Property directly to Purchaser and Purchaser shall not be obligated to acquire or convey any other property as part of such exchange. Seller shall indemnify, hold harmless and defend Purchaser from and against any and all claims, demands, causes of action, liabilities, losses, costs, damages and expenses (including reasonable attorneys' fees and expenses and court costs incurred in defending any such claim or in enforcing this indemnity) that may be incurred by Purchaser and arising out of Purchaser's participation in such exchange for the benefit of Seller, which obligation shall survive the Closing. Notwithstanding the foregoing, should Seller fail to effect a tax deferred exchange as contemplated in this Section 4.8for any reason, then the sale by Seller of the Property shall be consummated in accordance with terms and conditions of this Agreement just as though the provisions of this Section 4.8had been omitted from this Agreement, except that Purchaser shall be reimbursed and indemnified from resulting costs and expenses as provided in this Section. Nothing contained in this Section 4.8shall release Seller of any of its obligations or liabilities under this Agreement, whether accruing before, at or after Closing, nor shall anything contained in this Section 4.8impose any liability or obligation on Purchaser with respect to the tax consequences of this transaction to Seller.

4.9Purchaser's Tax Deferred Exchange. Purchaser may acquire any the Property as part of a tax deferred exchange for the benefit of Purchaser pursuant to Section 1031 of the Internal Revenue Code. With respect thereto, Purchaser may assign all of Purchaser's contract rights and obligations hereunder to an exchange accommodation titleholder or a qualified intermediary, as part of, and in furtherance of, such tax deferred exchange. Seller agrees to reasonably cooperate in such exchange for the benefit of Purchaser at no cost, expense or liability to Seller and without reduction or alteration of the rights of Seller under this Agreement and with respect to Purchaser; and Seller further agrees to execute any and all documents (subject to the reasonable approval of Seller's legal counsel) as are reasonably necessary in connection with such exchange at Purchaser's sole expense provided that Seller shall not be required to undertake any liability or obligation in so doing and provided that such exchange does not extend the Closing Date. As part of such exchange, Seller shall convey the Property directly to Purchaser and Seller shall not be obligated to acquire or convey any other property as part of such exchange. Purchaser shall indemnify, hold harmless and defend Seller from and against any and all claims, demands, causes of action, liabilities, losses, costs, damages and expenses (including reasonable attorneys' fees and expenses and court costs

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incurred in defending any such claim or in enforcing this indemnity) that may be incurred by Seller and arising out of Seller's participation in such exchange for the benefit of Purchaser. Notwithstanding the foregoing, should Purchaser fail to effect a tax deferred exchange as contemplated in this Section 4.9 for any reason, then the purchase by Purchaser of the Property shall be consummated in accordance with terms and conditions of this Agreement just as though the provisions of this Section 4.9 had been omitted from this Agreement, except that Seller shall be reimbursed and indemnified from resulting costs and expenses as provided in this Section. Nothing contained in this Section 4.9 shall release Purchaser of any of its obligations or liabilities under this Agreement, whether arising before, at or after Closing, nor shall anything contained in this Section 4.9 impose any liability or obligation on Seller with respect to the tax consequences of this transaction to Purchaser.

ARTICLE 5

REPRESENTATIONS, WARRANTIES AND COVENANTS

5.1Representations and Warranties of Seller. The Seller makes the following representations and warranties to Purchaser as of the Effective Date and as of the Closing Date (upon delivery of Seller’s Closing Certificate, as required pursuant to Section 4.2(d), hereof). Such representations and warranties are subject to those matters, if any, disclosed in Seller's disclosure statement attached hereto as Schedule 5.1 and made a part hereof by this reference (“Seller's Disclosure Statement”), and (ii) the Permitted Exceptions.

(a)Organization and Authority. The Seller has been duly organized and is validly existing and in good standing under the laws of the State of Delaware and is duly qualified to transact business and in good standing in the State where the Property is located. Seller has the full right and authority to enter into this Agreement and to transfer the Property pursuant hereto and to consummate or cause to be consummated the transactions contemplated herein. The person signing this Agreement on behalf of Seller is authorized to do so. Neither the execution and delivery of this Agreement nor any other documents executed and delivered, or to be executed and delivered, by Seller in connection with the transactions described herein, will violate any provision of Seller's organizational documents or of any agreements, regulations, or laws to or by which Seller is bound. This Agreement has been, and each document to be executed and delivered by Seller at Closing shall have been as of Closing, duly authorized, executed and delivered by Seller, is a valid and binding obligation of Seller and is enforceable against Seller in accordance with its terms subject to (i) applicable bankruptcy, insolvency, reorganization, moratorium, and other laws affecting the rights of creditors generally; and (ii) the exercise of judicial discretion in accordance with general principles of equity.

(b)Consents. Seller has obtained all consents and permissions (if any) related to the transactions herein contemplated and required under any covenant, agreement, encumbrance, law or regulation by which Seller or the Property is bound.

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(c)Pending Actions. Except as set forth on Schedule 5.1, Seller has not received written notice of any, and to Seller's actual knowledge (without a duty to investigate), there is no pending or threatened in writing, action, suit, arbitration, administrative or judicial proceeding, or unsatisfied order or judgment against Seller which pertains directly to Seller, the Property or the transaction contemplated by this Agreement, which in either case, if adversely determined, could have a material adverse effect on Seller’s ability to consummate the transaction contemplated herein or on the use, operation or value of the Property.

(d)Leases and Rent Roll. Seller is the lessor or landlord under the Leases. The Rent Roll attached as Schedule 1.1(e) is, and each rent roll hereafter delivered by Seller to Purchaser shall be the rent roll maintained by Seller and relied on by Seller for internal administration and accounting purposes, and Seller has no basis, to Seller's actual knowledge (without a duty to investigate), to believe that any such rent roll is not accurate in any material respect. Notwithstanding anything to the contrary contained in this Agreement, Seller does not represent or warrant that any particular Lease will be in force or effect at Closing or that the tenants under the Leases will have performed their obligations thereunder. The termination of any Lease prior to Closing by reason of the tenant's default or for any other reason not constituting a default by Seller under this Agreement shall not affect the obligations of Purchaser under this Agreement in any manner or entitle Purchaser to an abatement of or credit against the Purchase Price or give rise to any other claim on the part of Purchaser.

(e)Condemnation. Seller has not received written notice of any, and to Seller’s actual knowledge (without duty to investigate) there is no, pending or threatened in writing, condemnation proceeding relating to the Property.

(f)Insurance. Seller has not received, prior to the Effective Date, any written notice from Seller's current insurance carrier of any defects or inadequacies in or on the Property or any part or component thereof that would materially and adversely affect the insurability of the Property or cause any material increase in the premiums for insurance for the Property, that have not been cured or repaired.

(g)Environmental Matters. (i) Seller has received no written notice from any governmental authority or any other person or entity asserting any violation of Environmental Laws related to the Property which has not been cured or corrected as of the Effective Date, and (ii) other than the environmental reports previously delivered to Purchaser, Seller has not commissioned any study relating to the presence or absence of Hazardous Materials on the Property. The term “Environmental Laws” includes without limitation the Resource Conservation and Recovery Act and the Comprehensive Environmental Response, Compensation, and Liability Act and other federal laws governing the environment as in effect on the date of this Agreement together with their implementing regulations as of the date of this Agreement applicable to the Property, and all applicable state, regional, county, municipal and other local laws, regulations and ordinances that are equivalent or similar to the federal laws recited above or that purport to regulate hazardous or toxic substances and materials. The term “Hazardous Materials” includes petroleum (including crude oil or any fraction thereof) and any substance, material, waste, pollutant or contaminant listed

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or defined as hazardous or toxic under any Environmental Laws, in any case at levels or concentrations requiring monitoring, reporting, remediation or removal in accordance with Environmental Laws.

(h)Service Contracts. There are no material service, supply, equipment rental or similar agreements (each a “Service Contract” and collectively “Service Contracts”) to which Seller is a party affecting the Property other than those set forth in Schedule 5.1(h) and the copies of the Service Contracts that have been delivered by Seller to Purchaser are true, correct and complete in all material respects and include any material amendments or modifications thereto. To Seller's knowledge, Seller is not in default with respect to its obligations or liabilities under any of the Service Contracts where the failure to cure such default would have a Material Adverse Effect. “Material Adverse Effect” means, with respect to any fact or circumstance, that such fact or circumstance would individually or in the aggregate have a material adverse effect on title to the Property or any portion thereof, on Seller's ability to consummate the transaction contemplated herein, or on the value or operation of the Property.

(i)Employees. Seller has no employees that Purchaser shall be obligated to employ following the Closing.

(j)Operating Statements. The operating statements for the Property delivered to Purchaser are the operating statements maintained by Seller and relied on by Seller for internal administration and accounting purposes; provided,however, that Seller does not and will not represent or warrant that Purchaser will be able to, or should be able to, operate the Property according to and with similar results as shown in such operating statements.

(k)Violations. Seller has not received any written notice from any governmental authority that the Real Property is not in material compliance with all applicable laws, ordinances and regulations.

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

(m)Patriot Act and Related Matters. Seller is not:

(A)listed on the Specially Designated Nationals and Blocked Persons List maintained by OFAC pursuant to the Order and/or on any other list of terrorists or terrorist organizations maintained pursuant to any of the rules and regulations of OFAC or pursuant to any other applicable Orders (such lists are collectively referred to as the “Lists”); or

(B)a person who has been determined by competent authority to be subject to the prohibitions contained in the Orders; or owned or controlled by, or acts for or on behalf of, any person on the Lists or any other person who has been determined by competent authority to be subject to the prohibitions contained in the Orders.

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(n)Deliveries. Seller shall not intentionally withhold from Purchaser any information, in Seller’s possession, related to the condition of the Property, which Seller is otherwise obligated to provide to Purchaser pursuant to Sections 3.1(a) or 5.4(k) of this Agreement. The foregoing notwithstanding, in the event of any inconsistency or conflict between the immediately preceding sentence and any provision of Article 9 of this Agreement, the provisions of Article 9 shall control in all respects.

5.2Knowledge Defined. References to the “knowledge” of Seller shall refer only to the actual knowledge, without investigation or inquiry, on the Effective Date and on the Closing Date as specified in the Seller’s Closing Certificate, of the Designated Representatives (as hereinafter defined) of Seller, and shall not be construed, by imputation or otherwise, to refer to the knowledge of any property manager or broker, or to any other officer, agent, manager, representative or employee of Seller or any affiliate of Seller, or to impose upon such Designated Representatives any duty to investigate the matter to which such actual knowledge, or the absence thereof, pertains. As used herein, the term “Designated Representatives” shall refer to the following persons: (i) Andy Trotter, Chief Investment Officer, and (ii) Shannon Watkins, Asset Manager. In no event shall Purchaser have any personal claim against the above-named individuals as a result of the reference thereto in this Section 5.2 and Purchaser waives and releases all such claims which Purchaser now has or may later acquire against them in connection with the transactions contemplated in this Agreement.

5.3Survival of Seller's Representations and Warranties. The representations and warranties of Seller set forth in Section 5.1, as updated by Seller's Closing Certificate to the extent permitted hereunder, shall survive Closing for a period of nine (9) months after Closing. Except with respect to fraudulent misrepresentation for which the Agreement is terminated under Section 6.2, in which event Section 6.2 shall apply, no claim for a breach of any representation or warranty of Seller or breach of this Agreement by Seller shall be actionable or payable (a) if the breach in question results from or is based on a condition, state of facts or other matter which was known to Purchaser prior to Closing, (b) unless the valid claims for all such breaches collectively aggregate Twenty-Five Thousand and No/100 Dollars ($25,000.00) or more, in which event the full amount of such valid claims shall be actionable, up to but not exceeding the amount of the Cap (as defined below), and (c) unless written notice containing a description of the specific nature of such breach shall have been given by Purchaser to Seller prior to the expiration of said nine (9) month period and an action shall have been commenced by Purchaser against Seller within eleven (11) months after Closing. In the event of any breach by Seller of its representations and warranties contained herein which Purchaser first discovers after Closing and provides timely notice as aforesaid, Seller shall indemnify and hold Purchaser harmless from and against any and all loss, damage, cost or expense resulting therefrom up to but not exceeding the Cap. Seller shall not be liable to Purchaser to the extent Purchaser's claim is satisfied from any insurance policy, Service Contract or Lease. As used herein, the term “Cap” shall mean the total aggregate amount equal to two percent (2%) of the Purchase Price. In no event shall Seller's aggregate liability to Purchaser for any and all breaches of any representation, warranty of Seller in this Agreement or Seller's Closing Certificate exceed the amount of the Cap, and Purchaser hereby waives and disclaims any right to damages or compensation for any and all such breaches in excess of the Cap.

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5.4Covenants of Seller.    Seller hereby covenants with Purchaser, from the Effective Date until the Closing or earlier termination of this Agreement, as follows:

(a)Operation of Property. Seller shall operate and maintain the Property in a manner consistent with the manner in which Seller operates and maintains the Property as of the date hereof.

(b)Execution of New Leases and Renewals. Seller shall use reasonable efforts to negotiate new leases for unrented apartment units in the Improvements and/or Lease renewals for rented apartment units in the Improvements and shall maintain an advertising and marketing program for apartment units in the Improvements consistent with Seller's past practices at the Property. Except for amendments or leases entered into pursuant to renewal notices mailed prior to the execution of this Agreement, unless Purchaser agrees otherwise in writing, any new leases or renewals of existing leases for such apartment units entered into by Seller after the Effective Date until the Closing or earlier termination of this Agreement shall be on Seller's standard apartment lease form for the Property, and shall be for terms of no less than four (4) months and no more than twelve (12) months. Seller shall not collect any rents more than two (2) months in advance. In all cases, Seller shall retain the discretion to set rent rates, concessions and other terms of occupancy, provided Seller shall only enter into new leases, renewals or modifications in the ordinary course of business taking into account Seller's then-current good faith evaluation of market conditions. Each such new lease, renewal or modification entered into by Seller shall constitute a “Lease” for purposes of this Agreement. Seller shall promptly provide to Purchaser copies of any Leases entered into by Seller after the Effective Date, and if requested by Purchaser, updated copies of the Rent Roll.

(c)Maintenance of Insurance. Seller shall keep the Improvements insured against loss or damage (including rental loss) by fire and all risks covered by the Seller's insurance that is currently in force, provided that Seller may make commercially reasonable adjustments in Seller's insurance coverage for the Property which are consistent with Seller's general insurance program for Seller's other apartment properties as in effect from time to time.

(d)Enforcement of Existing Leases. Seller shall perform the landlord's material obligations to the tenants under the Leases and enforce the material obligations of the tenants under the Leases, in each case in accordance with the current management standards of Seller for its apartment properties.

(e)Preparation of Vacant Units for Lease. Seller shall place apartment units that are now vacant or that become vacant into rent-ready condition on or before the Closing Date in accordance with Seller's current management standards for its apartment properties as though no sale of the Property were contemplated or, at Seller's option, provide Purchaser a credit at Closing equal to Seven Hundred Fifty Dollars ($750.00) per unit for the apartment units that are not in rent-ready condition on the Closing Date; provided, however, that with respect to apartment units vacated during the three (3) day period ending on the Closing Date, Seller shall have no obligation either to put such units into rent-ready condition or to give Purchaser a credit for the cost of doing so. Not more than forty-eight (48) hours prior to the Closing Date, upon Seller’s receipt of Purchaser’s request, a representative of Purchaser and a representative of Seller shall conduct an onsite walk-

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through of the then unoccupied rental units on the Property to determine whether any of such unoccupied rental units are in “rent ready” condition.

(f)Removal and Replacement of Tangible Personal Property.  Seller shall not remove any Tangible Personal Property except as may be required for necessary repair or replacement (which repair and replacement shall be of equal quality and quantity as existed as of the time of the removal), or otherwise in accordance with current inventory and management standards of Seller for its apartment properties, provided that any appliances, leasing office furniture, pool furniture, fitness center equipment, or other similar items of equipment so removed by Seller are promptly replaced by Seller, at its cost, with items of comparable value and utility.

(g)Execution of New Contracts. Seller shall not, without Purchaser's prior written consent in each instance (which consent may be withheld in Purchaser's sole discretion), materially amend, renew or terminate any of the Service Contracts, or enter into any contract or agreement that will be an obligation affecting the Property or binding on Purchaser after the Closing, except that (i) Seller may enter into, amend or enforce (including enforcement by termination) Service Contracts in the ordinary course of business as reasonably necessary for the continued operation and maintenance of the Property, provided any new or amended Service Contracts are terminable without cause or penalty on thirty (30) days' notice without penalty or other termination payment, and (ii) Seller may conduct leasing activity as provided in Section 5.4(b) hereof. Seller shall promptly provide to Purchaser copies of any Service Contracts entered into by Seller after the Effective Date.

(h)Maintenance of Permits. Seller shall make commercially reasonable efforts to maintain in existence all licenses, permits and approvals that are now in existence with respect to, and are required for, the ownership, operation or improvement of the Property, and are of a continuing nature.

(i)Management Contracts. As of Closing the property management contract pertaining to the Property shall have been terminated.

(j)Notices. Seller shall promptly notify Purchaser in writing following Seller's receipt of any written notice (i) given or received by Seller concerning any litigation affecting the Property, (ii) received by Seller from any governmental authority that the Real Property is not in compliance with any applicable law ordinance or regulation and (iii) given or received by Seller concerning any commencement of a tax appeal or zoning change.

(k)Other Deliveries.If requested by Purchaser after the Inspection Date (which request shall not be made more often than once every seven (7) days following the Inspection Date), Seller shall promptly provide to Purchaser any documents or materials actually received by Seller after the Effective Date that Seller would have provided to Purchaser as a Delivery, along with the other Deliveries (pursuant to Section 3.1(a), hereinabove) if such documents or materials had been in Seller’s possession at the time of Seller’s delivery of the Deliveries to Purchaser.

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5.5Representations and Warranties of Purchaser. Purchaser hereby makes the following representations and warranties to Seller as of the Effective Date and as of the Closing Date (upon delivery of Purchaser’s Closing Certificate, as required pursuant to Section 4.3(d), hereof):

(a)Organization and Authority. Purchaser has been duly organized and is validly existing under the laws of the state of its formation. Purchaser has the full right and authority to enter into this Agreement and to purchase the Property pursuant hereto and to consummate or cause to be consummated the transactions contemplated herein. The person signing this Agreement on behalf of Purchaser is authorized to do so. Neither the execution and delivery of this Agreement nor any other documents executed and delivered, or to be executed and delivered, by Purchaser in connection with the transactions described herein, will violate any provision of Purchaser's organizational documents or of any agreements, regulations, or laws to or by which Purchaser is bound. This Agreement has been duly authorized, executed and delivered by Purchaser, is a valid and binding obligation of Purchaser and is enforceable against Purchaser in accordance with its terms subject to (i) applicable bankruptcy, insolvency, reorganization, moratorium, and other laws affecting the rights of creditors generally; and (ii) the exercise of judicial discretion in accordance with general principles of equity.

(b)Consents. Purchaser has obtained all consents and permissions (if any) related to the transactions herein contemplated and required under any covenant, agreement, encumbrance, law or regulation by which Purchaser is bound.

(c)Pending Actions. To Purchaser's knowledge, there is no action, suit, arbitration, administrative or judicial administrative proceeding, or unsatisfied order or judgment pending or threatened against Purchaser or the transaction contemplated by this Agreement, which, if adversely determined, could individually or in the aggregate have a material adverse effect on Purchaser's ability to consummate the transaction contemplated herein.

(d)Financial Status. Purchaser is solvent, has not made a general assignment for the benefit of its creditors, and has not admitted in writing its inability to pay its debts as they become due, nor has Purchaser filed, nor does it contemplate the filing of, any bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings, or any other proceeding for the relief of debtors in general, nor has any such proceeding been instituted by or against Purchaser, nor is any such proceeding to Purchaser's knowledge threatened or contemplated. The purchase of the Property will not render Purchaser insolvent.

(e)ERISA. Purchaser is not (i) an “employee benefit plan” within the meaning of Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), (ii) a “governmental plan” under Section 3(32) of ERISA, (iii) any plan described in Section 4975 of the Internal Revenue Code, or (iv) an entity whose underlying assets include “plan assets” by reason of the application of the ERISA “plan assets” regulation (29 C.F.R. 2510.3-101).

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(f)Patriot Act and Related Matters.

Purchaser is not:

(i)listed on the Specially Designated Nationals and Blocked Persons List maintained by OFAC pursuant to the Order and/or on any other list of terrorists or terrorist organizations maintained pursuant to any of the rules and regulations of OFAC or pursuant to any other applicable Orders (such lists are collectively referred to as the “Lists”); or

(ii)a person who has been determined by competent authority to be subject to the prohibitions contained in the Orders; or owned or controlled by, or acts for or on behalf of, any person on the Lists or any other person who has been determined by competent authority to be subject to the prohibitions contained in the Orders.

5.6Survival of Purchaser's Representations and Warranties. The representations and warranties of Purchaser set forth in Section 5.5shall survive Closing for a period of nine (9) months after Closing.

5.7Covenants of Purchaser.

(a)PurchaserherebycovenantswithSellerthat, upon any termination of this Agreement, subject to the terms and conditions of Section 3.3(c), PurchasershalluponSeller'srequestfurnishtoSellercopiesofanyreportsreceivedbyPurchaserinconnectionwithanyinspection of thePropertyforthepresenceofHazardousMaterials(asdefinedinSection 5.1(g) hereof), Mold or any Mold Condition (as defined below). EXCEPT FOR CLAIMS BASED ON A BREACH BY SELLER OF THE REPRESENTATIONS AND WARRANTIES CONTAINED IN SECTION 5.1(g), PURCHASER IRREVOCABLY WAIVES ANY CLAIM AGAINST SELLER ARISING FROM THE PRESENCE OF HAZARDOUS MATERIALS OR MOLD OR ANY MOLD CONDITION ON THE PROPERTY OR THE BREACH OF ENVIRONMENTAL LAWS WITH RESPECT TO THE PROPERTY. Upon any termination of this Agreement, subject to the terms and conditions of Section 3.3(c), PurchasershallalsouponSeller'srequestfurnishtoSellercopiesofanyotherreportsreceivedbyPurchaserrelatingtoanyotherinspectionsofthePropertyconductedonPurchaser'sbehalf,ifany. Any such reports furnished to Seller shall be furnished at Seller's risk and without representation or warranty, express or implied, of any kind whatsoever. “Mold” means mold, mildew, fungus or other potentially dangerous organisms. “Mold Condition” means the presence or suspected presence of Mold or any condition(s) that reasonably can be expected to give rise to or indicate the presence of Mold, including observed or suspected instances of water damage or intrusion, the presence of wet or damp wood, cellulose wallboard, floor coverings or other materials, inappropriate climate control, discoloration of walls, ceilings or floors, complaints of respiratory ailment or eye irritation by residents, employees or any other occupants or invitees in the Property, or any notice from a governmental agency of complaints regarding the indoor air quality at the Property.

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(b)“Designated Service Contracts” means (i) those certain Service Contracts which are assignable in accordance with their terms that Purchaser identifies by written notice delivered to Seller on or before the Inspection Date as the Service Contracts Purchaser elects Seller to assign to Purchaser at Closing, (ii) those assignable Service Contracts regarding which Purchaser has failed to deliver such written notice on or before the Inspection Date, and (iii) those Service Contracts (the “Must Take Service Contracts”) attached hereto as Schedule 5.7(b) which are assignable in accordance with their terms and which may not be terminated without cause or penalty, with thirty (30) days (or less) written notice. Purchaser hereby covenants with Seller that on or before the Inspection Date, Purchaser shall deliver written notice to Seller instructing which of the assignable Service Contracts Purchaser desires for Seller to assign to Purchaser and which it does not. If Purchaser fails to timely deliver such notice, Purchaser shall be deemed to have chosen to have all assignable Service Contracts assigned to Purchaser, and all such Service Contracts shall be deemed part of the “Designated Service Contracts.” If Purchaser charges any vendor approval fees that would otherwise be payable by a service provider in connection with the assignment of any Service Contracts (such as Compliance Depot charges), Purchaser agrees to waive and release such fees. At Closing, Seller will cause the Service Contracts which Purchaser has elected not to have assigned to Purchaser (other than the Must Take Service Contracts), by operation of the aforesaid notice on or before the Inspection Date, to be terminated at Seller’s expense, such termination to be effective as of the Closing Date. The provisions of this Section 5.7(b) shall survive Closing.

ARTICLE 6

DEFAULT

6.1Default by Purchaser. If the sale of the Property as contemplated hereunder is not consummated due to Purchaser's default hereunder, then Seller shall be entitled, as its sole and exclusive remedy for such default, to terminate this Agreement and receive the Earnest Money as liquidated damages for the breach of this Agreement and not as a penalty, it being agreed between the parties hereto that the actual damages to Seller in the event of such breach are impractical to ascertain and the amount of the Earnest Money is a reasonable estimate thereof, Seller hereby expressly waiving and relinquishing any and all other remedies at law or in equity. Seller's right to receive the Earnest Money is intended not as a penalty, but as full liquidated damages. The right to receive the Earnest Money as full liquidated damages is Seller's sole and exclusive remedy in the event of default hereunder by Purchaser, and Seller hereby waives and releases any right to (and hereby covenants that it shall not) sue Purchaser: (a) for specific performance of this Agreement, or (b) to recover any damages of any nature or description other than or in excess of the Earnest Money. Purchaser hereby waives and releases any right to (and hereby covenants that it shall not) sue Seller or seek or claim a refund of the Earnest Money (or any part thereof) on the grounds it is unreasonable in amount and exceeds Seller's actual damages or that its retention by Seller constitutes a penalty and not agreed upon and reasonable liquidated damages. This Section 6.1 is subject to Section 6.4 hereof.

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6.2Default by Seller. If the sale of the Property as contemplated hereunder is not consummated due to Seller's default hereunder, then Purchaser shall be entitled, as its sole remedy for such default, either (a) to receive the return of the Earnest Money and reimbursement of the lesser of (i) One Hundred Thousand and no/100 Dollars ($100,000.00) in the aggregate, or (ii) the amount of all direct third party out-of-pocket costs and expenses actually incurred (as substantiated by third party paid receipts) by Purchaser in connection with this Agreement and the inspection and acquisition of the Property (“Third-Party Costs”) which return and reimbursement shall operate to terminate this Agreement and release Seller from any and all liability hereunder (other than the obligations which expressly survive termination, including without limitation any obligation of Seller under this Agreement to pay to Purchaser the Third Party Costs), or (b) to seek specific performance of Seller's obligation to execute and deliver the documents required to convey (and otherwise cause the conveyance of) the Property to Purchaser, it being understood and agreed that the remedy of specific performance shall not be available to enforce any other obligation of Seller hereunder. In no event shall Seller be liable for consequential, speculative, remote or punitive damages (except to the extent actually required by law to be paid to a third party unaffiliated with Purchaser), or, except as set forth in the preceding sentence, any damages other than Third-Party Costs, and Purchaser hereby waives and releases any right to seek or collect any such consequential, speculative, remote or punitive damages (except to the extent actually required by law to be paid to a third party unaffiliated with Purchaser), or, except as set forth in the preceding sentence, any damages other than Third-Party Costs (such Third Party Costs to be limited in all cases as provided above). Purchaser shall be deemed to have elected (a) above if Purchaser fails to file suit for specific performance against Seller in a court having jurisdiction in the county and state in which the Property is located, on or before sixty (60) days following the date upon which Closing was to have occurred. The foregoing notwithstanding, in the event that Seller's default constitutes an Intentional Seller Default (as hereinafter defined) and Purchaser makes the election described in clause (a) above, then in addition to the remedies described in clause (a) above, Seller shall pay to Purchaser (and Purchaser shall have the right to file suit against Seller seeking money damages in an amount up to $250,000.00. “Intentional Seller Default” means any one or more of the following: (A) fraudulent misrepresentation, (B) criminal conduct (i.e. conduct that constitutes a felony under applicable law), or (C) an intentional or deliberate act of (x) Seller, (y) any affiliate or agent of Seller, or (z) any other party, at the request or direction of, or in collusion with, Seller, in each case of clauses (x), (y) or (z) above to the extent that the same results in Purchaser's inability to consummate the transaction contemplated in this Agreement in accordance with the terms hereof.

6.3Notice of Default; Opportunity to Cure. Neither Seller nor Purchaser shall be deemed to be in default hereunder until and unless such party has been given written notice of its failure to comply with the terms hereof and thereafter does not cure such failure within five (5) business days after receipt of such notice; provided, however, that this Section 6.3 (i) shall not be applicable to Purchaser's failure to deliver the Earnest Money or any portion thereof on the date required hereunder or to a party's failure to make any deliveries required of such party on the Closing Date and, accordingly, (ii) shall not have the effect of extending the Closing Date or the due date of any Earnest Money deposit hereunder.

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6.4Recoverable Damages. Notwithstanding Sections 6.1and 6.2hereof, in no event shall the provisions of Sections 6.1and 6.2limit (i) either Purchaser's or Seller's obligation to indemnify the other party, or the damages recoverable by the indemnified party against the indemnifying party due to, a party's express obligation to indemnify the other party in accordance with Sections 3.1, 4.8, 4.9, 5.3 or 8.1(b) of this Agreement, or (ii)  either party's obligation to pay costs, fees or expenses under Section 4.5 hereof, or the damages recoverable by either party against the other party due to a party's failure to pay such costs. In addition, if this Agreement terminates for any reason, other than a default by Seller hereunder for which Purchaser has elected to pursue the remedy of specific performance, and Purchaser or any affiliate of Purchaser asserts any claim or right to the Property related to such termination that would otherwise delay or prevent Seller from having clear, indefeasible, and marketable title to the Property, then Seller shall have all rights and remedies available at law or in equity with respect to such assertion by Purchaser and any actual loss or damage suffered by Seller as a result of such assertion; provided, however, that in no event shall Purchaser be liable for consequential, speculative, remote or punitive damages except to the extent actually required by law to be paid to a third party unaffiliated with Seller, and Seller hereby waives and releases any right to seek or collect any such consequential, speculative, remote or punitive damages except to the extent actually required by law to be paid to a third party unaffiliated with Seller.

ARTICLE 7

RISK OF LOSS

7.1Damage. In the event of “damage” (as hereinafter defined) to the Property or any portion thereof, then Seller shall promptly notify Purchaser thereof. In the event such damage is “major” (as hereinafter defined), Purchaser may, at its sole discretion, elect to proceed with the Closing (subject to the other provisions of this Agreement) or may terminate this Agreement by delivering written notice thereof to Seller within fifteen (15) days after Purchaser's receipt of Seller's notice respecting the damage. If, within fifteen (15) days of receipt of Seller's notice respecting such major damage, Purchaser delivers written notice of termination of this Agreement to Seller, this Agreement shall terminate, all Earnest Money shall be returned to Purchaser and, except for obligations of the parties which survive termination of this Agreement, the parties shall have no further obligations hereunder. If Purchaser does not timely elect to terminate this Agreement, Purchaser shall have no further right to terminate this Agreement as a result of the damage and in such event, Seller shall assign to Purchaser at Closing all insurance proceeds or condemnation awards paid or payable as a result of such damage and pay any insurance deductible due under Seller's insurance policy(ies). If the damage is not major, Seller shall assign to Purchaser at Closing all insurance proceeds or condemnation awards paid or payable as a result of such damage and pay any insurance deductible due under Seller's insurance policy(ies). In the event the damage is not major and prior to Closing sufficient insurance proceeds are not received or committed in writing by the insurance carrier sufficient to repair any damage, Seller shall repair such damage by Closing or give Seller a credit at Closing in an amount sufficient to pay for the cost unpaid as of Closing for repair of the applicable damage (i.e., to restore the Property to substantially the same condition as immediately before such casualty), such amount to be determined by an architect or other appropriate professional selected by Seller and approved by Purchaser, such approval not to be unreasonably withheld, conditioned or delayed. Any assignment by Seller to Purchaser of insurance

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proceeds respecting loss of rental income shall be limited to that portion of such proceeds attributable to periods after Closing.

7.2Definition of Major Damage. For purposes of Section 7.1:

(a)“damage” means (i) physical damage to or destruction of all or part of the Real Property by reason of fire, earthquake, tornado, flood or other casualty occurring after the Effective Date or (ii) the physical taking of all or part of the Real Property by condemnation or by conveyance in lieu of condemnation occurring after the Effective Date; and

(b)“major” damage refers to the following: (i) damage such that the cost of repairing or restoring the premises in question to a condition substantially similar to that of the premises in question prior to the event of damage would in the opinion of an architect selected by Seller and reasonably approved by Purchaser, be equal to or greater than Seven Hundred Fifty Thousand and No/100 Dollars ($750,000.00) and (ii) any damage due to a condemnation or conveyance in lieu of condemnation which materially impairs the current use or value of a Property or access to such Property from public roads or the number or utility of parking spaces. If Purchaser does not give notice to Seller of Purchaser's reasons for disapproving an architect within five (5) business days after receipt of notice of the proposed architect, then Purchaser shall be deemed to have approved the architect selected by Seller.

7.3Seller's Insurance. If necessary or appropriate for Purchaser to evaluate its options or enforce its rights under this Article 7 following any damage to the Property, Seller shall promptly provide to Purchaser on request a copy of Seller's property insurance policies (or other applicable insurance policies) with respect to the Property.

ARTICLE 8

COMMISSIONS

8.1Broker's Commission. The parties acknowledge that CBRE (“Broker”) has been retained by and represents Seller as broker in connection with the subject transaction, and is to be compensated for its services by Seller. Seller agrees that Seller shall pay to Broker upon, but only upon, final consummation of the transaction contemplated herein, a brokerage commission pursuant to a separate written agreement between Seller and Broker.

(b)PurchaserandSellereachherebyrepresentsandwarrantstotheotherthatithasnotdisclosedthisAgreementorthesubjectmatterhereofto,andhasnototherwisedealtwith,anyrealestatebroker,agentorsalesman(otherthanBroker)soastocreate anylegalrightorclaiminanysuchbroker,agentorsalesman(otherthanBroker)forarealestatecommissionorsimilarfeeorcompensationwithrespecttothenegotiationand/orconsummationofthisAgreementortheconveyanceofthePropertybySellertoPurchaser. Except as provided in this Section 8.1 with respect to Broker, Purchaser and Seller shall indemnify, hold harmless and defend each other from and against any and claims and demands for a real estate brokerage commission or similar fee or compensation arising out of any claimed dealings with the indemnifying party and relating to this

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Agreement or the purchase and sale of the Property (including reasonable attorneys' fees and expenses and court costs incurred in defending any such claim or in enforcing this indemnity).

8.2Survival. ThisArticle 8shallsurvivetherescission,cancellation,terminationorconsummationofthisAgreement.

ARTICLE 9

DISCLAIMERS AND WAIVERS

9.1No Reliance on Documents. EXCEPT FOR THE EXPRESS REPRESENTATIONS AND WARRANTIES SET FORTH IN SECTION 5.1 HEREOF AND IN THE CLOSING DOCUMENTS, SELLER MAKES NO REPRESENTATION OR WARRANTY AS TO THE TRUTH, ACCURACY OR COMPLETENESS OF ANY MATERIALS, DATA OR INFORMATION DELIVERED BY SELLER TO PURCHASER IN CONNECTION WITH THE TRANSACTION CONTEMPLATED HEREBY. PURCHASER ACKNOWLEDGES AND AGREES THAT ALL MATERIALS, DATA AND INFORMATION DELIVERED BY SELLER TO PURCHASER IN CONNECTION WITH THE TRANSACTION CONTEMPLATED HEREBY ARE PROVIDED TO PURCHASER AS A CONVENIENCE ONLY AND THAT ANY RELIANCE ON OR USE OF SUCH MATERIALS, DATA OR INFORMATION BY PURCHASER SHALL BE AT THE SOLE RISK OF PURCHASER, EXCEPT AS OTHERWISE EXPRESSLY STATED HEREIN. WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, PURCHASER ACKNOWLEDGES AND AGREES THAT (A) ANY ENVIRONMENTAL OR OTHER REPORT WITH RESPECT TO THE PROPERTY WHICH IS DELIVERED BY SELLER TO PURCHASER SHALL BE FOR GENERAL INFORMATIONAL PURPOSES ONLY, (B) PURCHASER SHALL NOT HAVE ANY RIGHT TO RELY ON ANY SUCH REPORT DELIVERED BY SELLER TO PURCHASER, BUT RATHER WILL RELY ON ITS OWN INSPECTIONS AND INVESTIGATIONS OF THE PROPERTY AND ANY REPORTS COMMISSIONED BY PURCHASER WITH RESPECT THERETO, AND (C) NEITHER SELLER, ANY AFFILIATE OF SELLER NOR THE PERSON OR ENTITY WHICH PREPARED ANY SUCH REPORT DELIVERED BY SELLER TO PURCHASER SHALL HAVE ANY LIABILITY TO PURCHASER FOR ANY INACCURACY IN OR OMISSION FROM ANY SUCH REPORT.

9.2Disclaimers. EXCEPT FOR THE EXPRESS REPRESENTATIONS AND WARRANTIES OF SELLER SET FORTH IN SECTION 5.1 HEREOF AND IN THE CLOSING DOCUMENTS, PURCHASER UNDERSTANDS AND AGREES THAT SELLER IS NOT MAKING AND HAS NOT AT ANY TIME MADE ANY WARRANTIES OR REPRESENTATIONS OF ANY KIND OR CHARACTER, EXPRESSED OR IMPLIED, WITH RESPECT TO THE PROPERTY, INCLUDING, BUT NOT LIMITED TO, ANY WARRANTIES OR REPRESENTATIONS AS TO HABITABILITY, MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, TITLE (OTHER THAN SELLER'S LIMITED OR SPECIAL WARRANTY OF TITLE TO BE SET FORTH IN THE DEED), ZONING, TAX CONSEQUENCES, LATENT OR PATENT PHYSICAL OR ENVIRONMENTAL CONDITION, UTILITIES, OPERATING HISTORY OR

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PROJECTIONS, VALUATION, GOVERNMENTAL APPROVALS, THE COMPLIANCE OF THE PROPERTY WITH APPLICABLE LAWS, THE ABSENCE OR PRESENCE OF HAZARDOUS MATERIALS OR OTHER TOXIC SUBSTANCES (INCLUDING WITHOUT LIMITATION MOLD OR ANY MOLD CONDITION), COMPLIANCE WITH ENVIRONMENTAL LAWS OR ACCESS LAWS, THE TRUTH, ACCURACY OR COMPLETENESS OF THE PROPERTY DOCUMENTS OR ANY OTHER INFORMATION PROVIDED BY OR ON BEHALF OF SELLER TO PURCHASER, OR ANY OTHER MATTER OR THING REGARDING THE PROPERTY. PURCHASER ACKNOWLEDGES AND AGREES THAT UPON CLOSING SELLER SHALL SELL AND CONVEY TO PURCHASER AND PURCHASER SHALL ACCEPT THE PROPERTY “AS IS, WHERE IS, WITH ALL FAULTS”, EXCEPT TO THE EXTENT EXPRESSLY PROVIDED OTHERWISE IN THIS AGREEMENT. PURCHASER HAS NOT RELIED AND WILL NOT RELY ON, AND SELLER IS NOT LIABLE FOR OR BOUND BY, ANY EXPRESSED OR IMPLIED WARRANTIES, GUARANTIES, STATEMENTS, REPRESENTATIONS OR INFORMATION PERTAINING TO THE PROPERTY OR RELATING THERETO (INCLUDING SPECIFICALLY, WITHOUT LIMITATION, PROPERTY INFORMATION PACKAGES DISTRIBUTED WITH RESPECT TO THE PROPERTY) MADE OR FURNISHED BY SELLER, THE MANAGER OF THE PROPERTY, OR ANY REAL ESTATE BROKER OR AGENT REPRESENTING OR PURPORTING TO REPRESENT SELLER, TO WHOMEVER MADE OR GIVEN, DIRECTLY OR INDIRECTLY, ORALLY OR IN WRITING, UNLESS SPECIFICALLY SET FORTH IN THIS AGREEMENT.

PURCHASER REPRESENTS TO SELLER THAT PURCHASER HAS CONDUCTED, OR WILL CONDUCT PRIOR TO CLOSING, SUCH INVESTIGATIONS OF THE PROPERTY, INCLUDING BUT NOT LIMITED TO, THE PHYSICAL AND ENVIRONMENTAL CONDITIONS THEREOF, AS PURCHASER DEEMS NECESSARY TO SATISFY ITSELF AS TO THE CONDITION OF THE PROPERTY AND THE EXISTENCE OR NONEXISTENCE OR CURATIVE ACTION TO BE TAKEN WITH RESPECT TO ANY HAZARDOUS MATERIALS OR TOXIC SUBSTANCES ON OR DISCHARGED FROM THE PROPERTY (INCLUDING WITHOUT LIMITATION ANY MOLD OR MOLD CONDITION), OR WITH RESPECT TO ACCESS LAWS, AND WILL RELY SOLELY UPON SAME AND NOT UPON ANY INFORMATION PROVIDED BY OR ON BEHALF OF SELLER OR ITS AGENTS OR EMPLOYEES WITH RESPECT THERETO, OTHER THAN SUCH REPRESENTATIONS, WARRANTIES AND COVENANTS OF SELLER AS ARE EXPRESSLY SET FORTH IN THIS AGREEMENT. UPON CLOSING, PURCHASER SHALL ASSUME THE RISK THAT ADVERSE MATTERS, INCLUDING BUT NOT LIMITED TO, DESIGN, CONSTRUCTION DEFECTS, ADVERSE PHYSICAL OR ENVIRONMENTAL CONDITIONS, OR NONCOMPLIANCE WITH ACCESS LAWS, MAY NOT HAVE BEEN REVEALED BY PURCHASER'S INVESTIGATIONS, AND PURCHASER, UPON CLOSING, SHALL BE DEEMED TO HAVE WAIVED, RELINQUISHED AND RELEASED SELLER (AND SELLER'S AND ITS PARTNERS' RESPECTIVE OFFICERS, DIRECTORS, SHAREHOLDERS, EMPLOYEES AND AGENTS) FROM AND AGAINST ANY AND ALL CLAIMS, DEMANDS, CAUSES OF ACTION (INCLUDING CAUSES OF ACTION IN

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TORT OR UNDER ANY ENVIRONMENTAL LAW), LOSSES, DAMAGES, LIABILITIES, FINES, PENALTIES (WHETHER BASED ON STRICT LIABILITY OR OTHERWISE), COSTS AND EXPENSES (INCLUDING ATTORNEYS' FEES AND COURT COSTS) OF ANY AND EVERY KIND OR CHARACTER, KNOWN OR UNKNOWN, WHICH PURCHASER MIGHT HAVE ASSERTED OR ALLEGED AGAINST SELLER (AND SELLER'S AND ITS PARTNERS' RESPECTIVE OFFICERS, DIRECTORS, SHAREHOLDERS, EMPLOYEES AND AGENTS) AT ANY TIME BY REASON OF OR ARISING OUT OF ANY LATENT OR PATENT CONSTRUCTION DEFECTS OR PHYSICAL CONDITIONS, VIOLATIONS OF ANY APPLICABLE LAWS (INCLUDING, WITHOUT LIMITATION, ANY ENVIRONMENTAL LAWS OR ACCESS LAWS) AND ANY AND ALL OTHER ACTS, OMISSIONS, EVENTS, CIRCUMSTANCES OR MATTERS REGARDING THE PROPERTY. THE FOREGOING SHALL NOT BE INTERPRETED TO WAIVE ANY CLAIM OF PURCHASER WITH RESPECT TO ANY BREACH BY SELLER OF ANY EXPRESS REPRESENTATIONS AND WARRANTIES MADE BY SELLER IN SECTION 5.1THAT EXPRESSLY SURVIVE CLOSING PURSUANT TO SECTION 5.3, OR RIGHTS OF PURCHASER UNDER SECTION 6.2.

PURCHASER AGREES THAT SHOULD ANY INVESTIGATION, CLEANUP, REMEDIATION OR REMOVAL OF HAZARDOUS SUBSTANCES OR OTHER ENVIRONMENTAL CONDITIONS (INCLUDING WITHOUT LIMITATION ANY MOLD OR MOLD CONDITION) ON OR RELATED TO THE PROPERTY BE REQUIRED AFTER THE DATE OF CLOSING, SELLER SHALL HAVE NO LIABILITY TO PURCHASER TO PERFORM OR PAY FOR SUCH INVESTIGATION, CLEAN-UP, REMOVAL OR REMEDIATION, AND PURCHASER EXPRESSLY WAIVES AND RELEASES ANY CLAIM TO THE CONTRARY. PURCHASER FURTHER AGREES THAT SHOULD ANY INVESTIGATION OR CURATIVE ACTION ON OR RELATED TO THE PROPERTY BE REQUIRED AFTER THE DATE OF CLOSING UNDER ANY ACCESS LAWS, SELLER SHALL HAVE NO LIABILITY TO PURCHASER TO PERFORM OR PAY FOR SUCH INVESTIGATION OR CURATIVE ACTION AND PURCHASER EXPRESSLY WAIVES AND RELEASES ANY CLAIM TO THE CONTRARY. THE FOREGOING SHALL NOT BE INTERPRETED TO WAIVE ANY BREACH BY SELLER OF ANY EXPRESS REPRESENTATIONS AND WARRANTIES MADE BY SELLER IN SECTION 5.1THAT EXPRESSLY SURVIVE CLOSING PURSUANT TO SECTION 5.3,OR RIGHTS OF PURCHASER UNDER SECTION 6.2.

PURCHASER REPRESENTS AND WARRANTS THAT THE TERMS OF THE RELEASE CONTAINED HEREIN AND ITS CONSEQUENCES HAVE BEEN COMPLETELY READ AND UNDERSTOOD BY PURCHASER, AND PURCHASER HAS HAD THE OPPORTUNITY TO CONSULT WITH, AND HAS CONSULTED WITH, LEGAL COUNSEL OF PURCHASER'S CHOICE WITH REGARD TO THE TERMS OF THIS RELEASE. PURCHASER ACKNOWLEDGES AND WARRANTS THAT PURCHASER'S EXECUTION OF THIS RELEASE IS FREE AND VOLUNTARY.

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9.3Certain Definitions. The term “Access Laws” means the Americans With Disabilities Act, the Fair Housing Act, the Rehabilitation Act and other federal laws and all applicable state, regional, county, municipal and other local laws, regulations and ordinances governing access to handicapped or disabled persons or the construction or design of residential dwelling units, places of public accommodation, or common areas which are at or on the Property.

9.4Effect and Survival of Disclaimers. SellerandPurchaseracknowledgethattheprovisionsofthisARTICLE 9 areanintegralpartofthetransactionscontemplated in this Agreement andamaterialinducementtoSellertoenterintothisAgreement and that Seller would not enter into this Agreement but for the provisions of this ARTICLE 9 SellerandPurchaseragreethattheprovisionsofthisARTICLE 9shallsurviveClosingoranyterminationofthisAgreement.

ARTICLE 10

ESCROW AGENT

10.1Investment of Earnest Money. EscrowAgentshallinvesttheEarnestMoneypursuant to Purchaser's directions, which may be in an interest bearing account at a commercial bank whose deposits are insured by the Federal Deposit Insurance Corporation. Escrow Agent shall notify Seller, no later than one (1) business day after Escrow Agent's receipt thereof, that Escrow Agent has received the Earnest Money in immediately available funds, and is holding the same in accordance with the terms of this Agreement. However, EscrowAgentshallinvesttheEarnestMoneyonlyinsuchaccountsaswillallowEscrowAgenttodisbursetheEarnestMoneyuponno more than one(1)business days'notice. Escrow Agent shall not commingle the Earnest Money with any funds of Escrow Agent or any other person or entity without the prior written consent of Purchaser.

10.2Payment on Demand. UponreceiptofanywrittencertificationfromSellerorPurchaserclaimingtheEarnest Money pursuanttotheprovisionsofthisAgreement,EscrowAgentshallpromptlyforwardacopythereoftotheothersuchparty(i.e.,PurchaserorSeller,whicheverdidnotclaimtheEarnest Money pursuanttosuchnotice)and,unlesssuchotherpartywithinfive (5) businessdaysthereafternotifiesEscrowAgentofanyobjectiontosuchrequesteddisbursement of theEarnest Money in which case Escrow Agent shall retain the Earnest Money subject to Section 10.4 below,EscrowAgentshalldisburse the Earnest Money tothepartydemandingthesameandshallthereuponbereleasedanddischargedfromanyfurtherdutyorobligationhereunder.

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10.3Exculpation of Escrow Agent. ItisagreedthatthedutiesofEscrowAgentarehereinspecificallyprovidedandarepurelyministerialinnature,andthatEscrowAgentshallincurnoliabilitywhatsoeverexceptforitsmisconductornegligence,solongasEscrowAgentisactingingoodfaith. SellerandPurchaserdoeachherebyreleaseEscrowAgentfromanyliabilityforanyerrorofjudgmentorforanyactdoneoromittedtobedonebyEscrowAgentinthegoodfaithperformanceofitsdutieshereunderanddoeachherebyindemnifyEscrowAgentagainst,andagreetohold,save,anddefendEscrowAgentharmlessfrom,anycosts,liabilities,andexpensesincurredbyEscrowAgentinservingasEscrowAgenthereunderandinfaithfullydischargingitsdutiesandobligationshereunder.

10.4Stakeholder. EscrowAgentisactingasastakeholderonlywithrespecttothe Earnest Money. IfthereisanydisputeastowhetherEscrowAgentisobligatedtodelivertheEarnest Money orastowhomtheEarnest Money istobedelivered,EscrowAgentmayrefusetomakeanydeliveryand may continue to hold the Earnest MoneyuntilreceiptbyEscrowAgentofanauthorizationinwriting,signedbySellerandPurchaser,directingthedisposition of the Earnest Money,or,intheabsenceofsuchwrittenauthorization,untilfinaldeterminationoftherightsofthepartiesinanappropriatejudicialproceeding. Ifsuchwrittenauthorizationisnotgiven,oraproceedingforsuchdeterminationisnotbegun,withinthirty(30)daysofnoticetoEscrowAgentofsuchdispute,EscrowAgentmaybringanappropriateactionorproceedingforleavetodeposittheEarnest Money inacourtofcompetentjurisdictionlocated in the Atlanta metropolitan areapendingsuchdetermination. EscrowAgentshallbereimbursedforallcostsandexpensesofsuchactionorproceeding,including,withoutlimitation,reasonableattorneys'feesanddisbursements,bythepartydeterminednottobeentitledtotheEarnest Money. UponmakingdeliveryoftheEarnest Money inanyofthemannershereinprovided,EscrowAgentshallhavenofurtherliabilityorobligationhereunder.

10.5Interest. AllinterestandotherincomeearnedontheEarnestMoneydepositedwithEscrowAgenthereundershallbereportedforincometaxpurposesasearningsofPurchaser. In connection therewith, Purchaser shall provide an executed W-9 to Escrow Agent.

10.6Execution by Escrow Agent. EscrowAgenthasexecutedthisAgreementsolelyforthepurposeofacknowledgingandagreeingtotheprovisionsofthis ARTICLE 10 EscrowAgent'sconsenttoanymodificationoramendmentofthisAgreementotherthanthisARTICLE 10shallnotberequired.

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ARTICLE 11

MISCELLANEOUS

11.1Assignment. Purchaser may not assign its rights under this Agreement, other than to a Permitted Affiliate, without first obtaining Seller’s written approval, which approval may be given or withheld in Seller's sole discretion. Any transfer, directly or indirectly, of any stock, partnership interest or other ownership interest in Purchaser in excess of 49% without Seller's written approval, which approval shall not be unreasonably withheld, delayed or conditioned, shall constitute a default by Purchaser under this Agreement, provided, however, (i) Purchaser may assign this Agreement one time at or prior to Closing to a Permitted Affiliate without Seller's consent, and (ii) Seller or Purchaser may assign its rights under this Agreement to a reputable exchange accommodation to facilitate a tax deferred exchange pursuant to Sections 4.8 and 4.9 hereof. For purposes hereof, the term “Permitted Affiliate” means an entity that controls, is controlled or managed by, or is under common control with Purchaser, Steadfast Apartment REIT, Inc., and/or those persons controlling and/or managing Purchaser and is solvent at the time of assignment and at the time of Closing, is not rendered insolvent by such assignment, and has sufficient assets to consummate the transaction contemplated herein. No transfer or assignment by Purchaser shall release or relieve Purchaser of its obligations hereunder.

11.2Notices. Anynotice,requestorothercommunication(a“notice”)requiredorpermittedtobegivenhereundershallbeinwritingandshallbedeliveredbyhandorovernightcourier(suchasUnitedParcelServiceorFederalExpress), sent by facsimile (provided a copy of such notice is deposited with an overnight courier for next business day delivery),mailedbyUnitedStatesregisteredorcertifiedmail,returnreceiptrequested,postageprepaidandaddressedtoeachpartyatitsaddressassetforthbelow or electronically by email. Anysuchnoticeshallbeconsideredgivenonthedateofsuchhandorcourierdelivery,confirmed facsimile or email transmission if received on a business day (provided a copy of such notice is deposited with an overnight courier for next business day delivery), depositwithsuchovernightcourierfornextbusinessdaydelivery,ordeposit in theUnitedStatesmail,butthetimeperiod(ifanyisprovidedherein)inwhichtorespondtosuchnoticeshallcommenceonthedateofhandorovernightcourierdeliveryoronthedatereceivedfollowingdepositintheUnitedStatesmailasprovidedabove. Rejectionorotherrefusaltoacceptorinabilitytodeliverbecauseofchangedaddressofwhichnonoticewasgivenshallbedeemedtobereceiptofthenotice. Bygivingatleastfive(5)days'priorwrittennoticethereof,anypartymayfromtimetotimeandatanytimechangeitsmailingaddresshereunder. Anynoticeofanypartymaybegivenbysuchparty'scounsel.

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Theparties'respectiveaddressesfornoticepurposesareasfollows. Telephone numbersaregivenforconvenienceofreferenceonly. Noticebytelephoneshallnotbeeffective.

IftoSeller:

Centennial Holding Company, LLC

3348 Peachtree Road, NE    Suite 1000     Atlanta, GA 30326

Attention: Andrew Trotter

Telephone: 404/835-3152

Facsimile: 404/816-8088

Email : atrotter@centennialholdingco.com

with a copy to:

Burr & Forman LLP

171 17th Street NW

Suite 1100

Atlanta, Georgia 30363

Attention: Rick Fishman, Esq.

Telephone: 404/685-4307

Facsimile: 404/817-3244

Email: rfishman@burr.com

and a copy to:

Mayer Brown LLP

1999 K Street NW

Washington, DC 20006

Attention: John W. Jarrell, Jr.

Telephone: 202/263-3249

Facsimile: 202/263-5249

Email: jjarrell@maverbrown.com

and a copy to:

The Carlyle Group

1001 Pennsylvania Avenue, NW

Suite 220 South

Washington, DC 20004

Attention: George Gummere

Telephone: 202/729-5565

Email: george.gummere@carlyle.com

38

IftoPurchaser:

Steadfast Asset Holdings, Inc.

18100 Von Karman, Suite 500

Irvine, California 92612

Attention: Ana Marie del Rio, Esq.

Telephone: 949/852-0700

Facsimile: 949/852-0143

Email: AnaMarie.delRio@SteadfastCo.com

and a copy to:

Morris, Manning & Martin, LLP

1600 Atlanta Financial Center

3343 Peachtree Road NE

Atlanta GA 30326-1044

Attention: Christina M. Graham, Esq.

Telephone: 404/504-7652

Email: cmg@mmmlaw.com

IftoEscrowAgent:

Fidelity National Title Insurance Company

1300 Dove Street, Suite 310

Newport Beach, CA 92660

Attention: Brian Lewis

Telephone: 949/622-5000

Facsimile: 866/935-6314

Email: brian.lewis@fnf.com

11.3Modifications. ThisAgreementcannotbechangedorally,andnoagreementshallbeeffectivetowaive,change,modifyordischargeitinwholeorinpartunlesssuchagreementisinwritingandissignedbythepartiesagainstwhomenforcementofanywaiver,change,modificationordischargeissought. Signatures inscribed on the signature pages of this Agreement or any formal amendment which are transmitted by telecopy or email transmission (e.g., PDF files) shall be valid and effective to bind the party so signing.  Each party agrees to promptly deliver to the other party an executed original of this Agreement or any such formal amendment with its actual signature, but a failure to do so shall not affect the enforceability of this Agreement or any such formal amendment, it being expressly agreed that each party to this Agreement or any formal amendment shall be bound by its own telecopied or emailed signature and shall accept the telecopied or emailed signature of the other party to this Agreement or any formal amendment.

39

11.4Calculation of Time Periods. Unlessotherwisespecified,incomputinganyperiodoftimedescribedinthisAgreement,thedayoftheactoreventafterwhichthedesignatedperiodoftimebeginstorunisnottobeincludedandthelastdayoftheperiodsocomputedistobeincluded,unlesssuchlastdayisaSaturday,SundayorlegalholidayunderthelawsoftheStateinwhichthePropertyislocated,inwhicheventtheperiodshallrununtiltheendofthenextdaywhichisneitheraSaturday,Sundayorlegalholiday.Thefinaldayofanysuchperiodshallbedeemedtoendat5:00p.m.,Eastern time.

11.5Successors and Assigns. SubjecttoSection 11.1hereof,thetermsandprovisionsofthisAgreementaretoapplytoandbindthepermittedsuccessorsandassignsofthepartieshereto.

11.6Entire Agreement. ThisAgreement,includingtheSchedules, containtheentireagreementbetweenthepartiespertainingtothesubjectmatterhereofandfullysupersedeallpriorwrittenororalagreementsandunderstandingsbetweenthepartiespertainingtosuchsubjectmatter.

11.7Further Assurances. Eachpartyagreesthatitwillwithoutfurtherconsiderationexecuteanddeliversuchotherdocumentsandtakesuchotheraction,whetherpriororsubsequenttoClosing,asmaybereasonablyrequestedbytheotherpartytoconsummatemoreeffectivelythepurposesorsubjectmatterofthisAgreement. Withoutlimitingthegeneralityoftheforegoing,Purchasershall,ifreasonablyrequestedbySeller,executeacknowledgmentsofreceiptwithrespecttoanymaterialsdeliveredbySellertoPurchaserwithrespecttotheProperty. TheprovisionsofthisSection 11.7shallsurviveClosing.

11.8Counterparts. ThisAgreementmaybeexecutedinidentical counterparts,andallsuchexecutedcounterpartsshallconstitutethesameagreement. ItshallbenecessarytoaccountforonlyonesuchcounterpartinprovingthisAgreement.

11.9Severability. IfanyprovisionofthisAgreementisdeterminedbyacourtofcompetentjurisdictiontobeinvalidorunenforceable,theremainderofthisAgreementshallnonethelessremaininfullforceandeffect.

11.10Applicable Law. ThisAgreementisperformableinthestateinwhichthePropertyislocatedandshallinallrespectsbegovernedby,andconstruedinaccordancewith,thesubstantivefederallawsoftheUnitedStatesandthelawsofsuchstate. SellerandPurchaserherebyirrevocablysubmittothejurisdictionofanystateorfederalcourtsittinginthestateand judicial district inwhichthePropertyislocatedinanyactionorproceedingarisingoutoforrelatingtothisAgreementandherebyirrevocablyagreethatallclaimsinrespectofsuchactionorproceedingshallbeheardanddeterminedinastateorfederalcourtsittinginthestateand judicial district inwhichthePropertyislocated.PurchaserandSelleragreethattheprovisionsofthisSection 11.10 shallsurvivetheClosingofthetransactioncontemplatedbythisAgreement.

40

11.11No Third Party Beneficiary. The provisions of this Agreement and of the documents to be executed and delivered at Closing are and will be for the benefit of Seller and Purchaser only and are not for the benefit of any third party, and accordingly, no third party shall have the right to enforce the provisions of this Agreement or of the documents to be executed and delivered at Closing.

11.12Seller's Access to Records after Closing. PurchasershallreasonablycooperatewithSeller, at Seller’s sole cost,foraperiodofone (1)yearafterClosingto make available Purchaser's employees and Property records, as Seller may reasonably request, incaseofSeller'sneedinresponsetoanylegalrequirement,taxaudit,taxreturnpreparation, securities law filing,orlitigationthreatenedorbroughtagainstSeller,byallowingSelleranditsagentsorrepresentativesaccess,uponreasonableadvancenotice(whichnoticeshallidentifythenatureoftheinformationsoughtbySeller),atallreasonabletimestoexamineandmakecopiesofanyandallinstruments,filesandrecords which predate the Closing; provided, however, that nothing contained in this Section shall require Purchaser to retain any files or records for any particular period of time. This Section 11.12shall survive Closing.

11.13Schedules. ThefollowingschedulesattachedheretoshallbedeemedtobeanintegralpartofthisAgreement:

Schedule 1.1 (a)-    Legal Description of the Land

Schedule 1.1(d)    -    Inventory of Tangible Personal Property

Schedule 1.1(e)    -    Rent Roll

Schedule 1.6(a)    -    Earnest Money Wiring Instructions

Schedule 3.1        -    Deliveries

Schedule 4.2(a)    -    Special Warranty Deed

Schedule 4.2(b)    -    Bill of Sale and Assignment

Schedule 4.2(c)    -    Tenant Notice

Schedule 4.2(d)    -    Seller's Closing Certificate

Schedule 5.1        -    Seller's Disclosure Statement

Schedule 5.1(h)    -    List of Service Contracts

Schedule 5.7(b)    -    Schedule of Must Take Service Contracts

11.14Captions. ThesectionheadingsappearinginthisAgreementareforconvenienceofreferenceonlyandarenotintended,toanyextentandforanypurpose,tolimitordefinethetextofanysectionoranysubsectionhereof.

11.15Construction. ThepartiesacknowledgethatthepartiesandtheircounselhavereviewedandrevisedthisAgreementandthatthenormalruleofconstructiontotheeffectthatanyambiguitiesaretoberesolvedagainstthedraftingpartyshallnotbeemployedintheinterpretationofthisAgreementoranyschedulesoramendmentshereto.

41

11.16Termination of Agreement. ItisunderstoodandagreedthatifeitherPurchaserorSellerterminatesthisAgreementpursuanttoarightofterminationgrantedhereunder,suchterminationshalloperatetorelieveSellerandPurchaserfromallobligationsunderthisAgreement,exceptforsuchobligationsasarespecificallystatedhereintosurvivetheterminationofthisAgreement.

11.17Survival. Theprovisionsofthefollowing SectionsofthisAgreementshallsurviveClosingandshallnotbemergedintotheexecutionanddeliveryoftheDeed: 3.1(c); 4.2(c); 4.4; 4.5; 4.8; 4.9; 5.1; 5.2; 5.3; 5.5; 5.6; 5.7; Article 8; Article 9;11.7; 11.10; 11.12; 11.17; 11.22; 11.23; those additional provisions of Article 11 which govern the administration, interpretation or enforcement of this Agreement; and any other provisions contained herein that by their terms survive the Closing (the “Obligations Surviving Closing”). Except for the Obligations Surviving Closing, all representations, warranties, covenants and agreements contained in this Agreement shall be merged into the instruments and documents executed and delivered at Closing. The Obligations Surviving Closing shall survive the Closing; provided, however, that the representations and warranties of Seller contained in Section 5.1, as updated by Seller's Closing Certificate, and the representations and warranties of Purchaser contained in Section 5.5, shall survive for the period, and are subject to the terms, set forth in Sections 5.3 and 5.6 respectively.

11.18Time of Essence. Time is of the essence with respect to this Agreement.

11.19Covenant Not to Record. Purchaser shall not record this Agreement or any memorandum or other evidence thereof. Any such recording shall constitute a material default hereunder on the part of Purchaser.

11.20Limitation of Seller's Liability. Purchaser shall have no recourse against any of the past, present or future, direct or indirect, shareholders, partners, members, managers, principals, directors, officers, agents, incorporators, affiliates or representatives of Seller or its general partner or of any of the assets or property of any of the foregoing for the payment or collection of any amount, judgment, judicial process, arbitral award, fee or cost or for any other obligation or claim arising out of or based upon this Agreement and requiring the payment of money by Seller. This Section 11.20shall survive the Closing.

11.21JURY WAIVER. IN ANY LAWSUIT OR OTHER PROCEEDING INITIATED BY SELLER OR PURCHASER UNDER OR WITH RESPECT TO THIS AGREEMENT, SELLER AND PURCHASER EACH WAIVE ANY RIGHT IT MAY HAVE TO TRIAL BY JURY.

42

11.22Audit Requirements. Seller shall, at no cost to Seller, provide to Purchaser (at Purchaser’s expense) copies of, or shall provide Purchaser reasonable access to, such factual information as may be (a) necessary to conduct any audit required by Rule 3-14 of Securities and Exchange Commission Regulation S-X (“Rule 3-14”), (b) reasonably requested by Purchaser and (c) in the possession of Seller, its property manager, accountants or affiliates, to enable Purchaser's auditor to conduct an audit, in accordance with Rule 3-14, 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, if required by Rule 3-14 (provided, however, such audit shall not include an audit of management fees). Purchaser shall be responsible for all out-of-pocket costs associated with this audit. Seller shall reasonably cooperate (at no cost to Seller) with Purchaser’s auditor in the conduct of such audit. In addition, Seller agrees to provide to Purchaser, if reasonably requested by such auditor, historical financial statements for the Property for the year to date of the year in which Closing occurs plus one (1) prior calendar year, including (without limitation) income and balance sheet data for the Property, whether required before or after Closing, but only to the extent reasonably requested in connection with such Rule 3-14 audit. Seller shall maintain its records for use under this Section for a period of not less than one (1) year after the Closing Date. The provisions of this Section shall survive Closing. Notwithstanding anything contained herein to the contrary, Seller shall not be liable to Purchaser based on the results of any audit, or the lack of any information required to conduct such audit.

11.23Attorneys' Fees. In any action to enforce or interpret the provisions of this Agreement, the party against whom any final judgment is entered agrees to pay the prevailing party all reasonable costs, charges, and expenses, including reasonable attorneys’ fees actually incurred in connection therewith.

[Signatures on following pages.]

43

INWITNESSWHEREOF,thepartiesheretohavedulyexecutedthisAgreementasoftheEffectiveDate.

SELLER:

CARLYLE CENTENNIAL CREST AT BARRETT LAKES, L.P., a Delaware limited partnership

By: Centennial Crest GP, LLC, a Delaware limited liability company, its authorized General Partner

By: Centennial CCP GP I, LLC, a Delaware limited liability company, its sole Member

By: Centennial Holding Company, LLC, a Georgia limited liability company, its Manager/Member

By:	/s/ W. Porter Payne, Jr.
Name:	W. Porter Payne, Jr.
Its:	Chief Executive Officer

[SIGNATURES CONTINUED ON THE FOLLOWING PAGES]

44

PURCHASER:

STEADFAST ASSET HOLDINGS, INC.,

a California corporation

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

[SIGNATURES CONTINUED ON THE FOLLOWING PAGE]

45

EscrowAgenthasexecutedthisAgreementforthelimitedpurposessetforth herein.

ESCROW AGENT:

FIDELITY NATIONAL TITLE INSURANCE COMPANY

By:		/s/ Valerie Rapp
Name:		Valerie Rapp
Title:		VP Escrow Officer
	MAVR@FNF.COM

[END OF SIGNATURES]

46

Schedule 1.1(a)

LEGAL DESCRIPTION OF THE LAND

ALL THAT TRACT OR PARCEL OF LAND LYING AND BEING IN LAND LOTS 791, 792 AND 793 OF THE 16TH DISTRICT, 2ND SECTION AND LAND LOT 210 OF THE 20TH DISTRICT, 2ND SECTION, OF COBB COUNTY, GEORGIA, AND BEING MORE PARTICULARLY DESCRIBED AS FOLLOWS:

BEGINNING AT AN IRON PIN FOUND (1/2” REBAR) MARKING THE COMMON CORNER OF LAND LOTS 791, 792, 793 AND 794 OF THE 16TH DISTRICT, 2ND SECTION OF COBB COUNTY; THENCE ALONG THE SOUTH LINE OF LAND LOT 792 (SAID LINE BEING COMMON TO LAND LOTS 792 AND 793), SOUTH 89°47‘27“ WEST FOR A DISTANCE OF 669.80 FEET TO AN IRON PIN FOUND (1-1/2” CRIMPED TOP PIPE); THENCE DEPARTING SAID SOUTH LINE OF LAND LOT 792 AND PROCEED SOUTH 00°14‘00“ WEST FOR A DISTANCE OF 495.17 FEET TO AN IRON PIN PLACED (1/2” REBAR); THENCE SOUTH 00° 14‘00“ WEST FOR A DISTANCE OF 847.50 FEET TO AN IRON PIN PLACED (1/2” REBAR) ON THE SOUTH LINE OF LAND LOT 793 (SAID LINE BEING COMMON TO LAND LOTS 793 & 864); THENCE ALONG THE SOUTH LINE OF LAND LOT 793 (SAID LINE BEING COMMON TO LAND LOTS 793 & 864), NORTH 89°06‘43“ WEST FOR A DISTANCE OF 648.52 FEET TO A NAIL FOUND AT BASE OF 1” AXLE IN ROCK PILE MARKING THE SOUTHWEST CORNER OF LAND LOT 793 AND ON THE EAST LINE OF LAND LOT 210 OF THE 20TH DISTRICT, 2ND SECTION OF COBB COUNTY (SAID LINE HEREINAFTER BEING REFERRED TO AS THE DISTRICT LINE); THENCE DEPARTING SAID DISTRICT LINE AND PROCEED NORTH 88°55‘09“ WEST FOR A DISTANCE OF 363.02 FEET TO AN IRON PIN PLACED (1/2” REBAR); THENCE NORTH 31°11‘20“ WEST A DISTANCE OF 394.24 FEET TO AN IRON PIN FOUND (1/2” REBAR); THENCE NORTH 41°29‘14“ WEST A DISTANCE OF 94.44 FEET TO AN IRON PIN FOUND (5/8” REBAR); THENCE NORTH 45°20‘57“ WEST A DISTANCE OF 178.68 FEET TO AN IRON PIN FOUND (3/4” REBAR); THENCE NORTH 39°50‘52“ WEST A DISTANCE OF 80.81 FEET TO AN IRON PIN PLACED (1/2” REBAR); THENCE NORTH 23°17‘20“ WEST A DISTANCE OF 113.61 FEET TO AN IRON PIN PLACED (1/2” REBAR) ON THE EASTERLY RIGHT-OF-WAY LINE OF GREERS CHAPEL ROAD (VARIABLE R/W); THENCE ALONG THE EASTERLY RIGHT-OF-WAY LINE OF GREERS CHAPEL ROAD THE FOLLOWING COURSES AND DISTANCES: 1) 25.96 FEET ALONG THE ARC OF A CURVE TO THE LEFT, SAID CURVE HAVING A RADIUS OF 196.52 FEET AND BEING SUBTENDED BY A CHORD OF NORTH 03°11‘59“ EAST, 25.94 FEET TO A POINT; 2) THENCE NORTH 00°35‘06“ WEST FOR A DISTANCE OF 514.81 FEET TO AN IRON PIN PLACED (1/2” REBAR) WHERE GREERS CHAPEL ROAD INTERSECTS THE SOUTHEASTERLY RIGHT-OF-WAY LINE OF BARRETT LAKES BOULEVARD (VARIABLE R/W, FKA: NEW GREERS CHAPEL ROAD); THENCE ALONG THE SOUTHEASTERLY, SOUTHERLY AND SOUTHEASTERLY RIGHT-OF-WAY LINE OF BARRETT LAKES BOULEVARD (VARIABLE R/W) THE FOLLOWING COURSES AND DISTANCES: 1) 210.72 FEET ALONG THE ARC OF A CURVE TO THE RIGHT, SAID CURVE HAVING A RADIUS OF 348.00 FEET AND BEING SUBTENDED BY A CHORD OF NORTH 31°02‘21“ EAST, 207.52 FEET TO AN IRON PIN PLACED (1/2” REBAR); 2) THENCE SOUTH

41°36’50” EAST A DISTANCE OF 4.50 FEET TO AN IRON PIN PLACED (1/2” REBAR); 3) THENCE 192.98 FEET ALONG THE ARC OF A CURVE TO THE RIGHT, SAID CURVE HAVING A RADIUS OF 343.50 FEET AND BEING SUBTENDED BY A CHORD OF NORTH 64°28‘49“ EAST, 190.45 FEET TO AN IRON PIN PLACED (1/2” REBAR); 4) THENCE NORTH 09°25’32” WEST A DISTANCE OF 3.15 FEET TO AN IRON PIN PLACED (1/2” REBAR); 5) THENCE NORTH 80°29‘41“ EAST AND CROSSING THE DISTRICT LINE FOR A DISTANCE OF 754.59 FEET TO AN IRON PIN PLACED (1/2” REBAR); 6) THENCE 804.09 FEET ALONG THE ARC OF A CURVE TO THE LEFT, SAID CURVE HAVING A RADIUS OF 800.00 FEET AND BEING SUBTENDED BY A CHORD OF NORTH 51°42‘02“ EAST 770.67 FEET TO AN IRON PIN FOUND (3/4” REBAR); 7) THENCE NORTH 22°54‘22“ EAST A DISTANCE OF 408.52 FEET TO AN IRON PIN FOUND (1/2” REBAR); 8) THENCE 181.66 FEET ALONG THE ARC OF A CURVE TO THE RIGHT, SAID CURVE HAVING A RADIUS OF 522.96 FEET AND BEING SUBTENDED BY A CHORD OF NORTH 32°51‘26“ EAST, 180.75 FEET TO AN IRON PIN PLACED (1/2” REBAR); THENCE DEPARTING THE SOUTHEASTERLY RIGHT-OF-WAY LINE OF BARRETT LAKES BOULEVARD (VARIABLE R/W, FKA: NEW GREERS CHAPEL ROAD) AND PROCEED SOUTH 42°49‘17“ EAST FOR A DISTANCE OF 842.11 FEET TO AN IRON PIN PLACED (1/2” REBAR) WITHIN A GEORGIA POWER EASEMENT; THENCE SOUTH 89°27‘09“ WEST FOR A DISTANCE OF 290.07 FEET TO AN IRON PIN PLACED (1/2” REBAR) ON THE EAST LINE OF LAND LOT 792 (SAID LINE BEING COMMON TO LAND LOTS 791 & 792 OF THE 16TH DISTRICT, 2ND SECTION OF COBB COUNTY; THENCE ALONG THE EAST LINE OF LAND LOT 792 (SAID LINE BEING COMMON TO LAND LOTS 791 & 792), SOUTH 00°56‘29“ EAST FOR A DISTANCE OF 682.09 FEET TO AN IRON PIN FOUND (1/2” REBAR) MARKING THE COMMON CORNER OF LAND LOTS 791, 792, 793 AND 794 AND THE POINT OF BEGINNING. SAID TRACT OR PARCEL CONTAINING 67.83537 ACRES OR 2,954,909 SQUARE FEET.

Schedule 1.1(d)

INVENTORY OF TANGIBLE PERSONAL PROPERTY

[SEE ATTACHED PAGES]

[INTENTIONALLY OMITTED]

Schedule 1.1(e)

RENT ROLL

[SEE ATTACHED PAGES]

[INTENTIONALLY OMITTED]

Schedule 1.6(a)

EARNEST MONEY WIRING INSTRUCTIONS

[INTENTIONALLY OMITTED]

Schedule 3.1

Deliveries

	CONSTRUCTION / REHABILITATION	(Delivery Method)/ Delivered (Date)	Not applicable to Property	Not available to Seller
1	Plans & Specifications: Site plan and most current civil, landscape, architectural, structural mechanical, electrical and fire protection plans, including elevations	(On-Site)
2	Construction contracts, if any, including for all work completed in past 3 years	N/A
3	Current capital improvements with schedule (past 3 years)	(Electronic)
4	Detailed unit-by-unit list of upgraded vs. non-upgraded units (if applicable)	(Electronic)
5	Warranties in effect, if any (construction, roof, mechanical equipment, etc.)	(Electronic)
6	Copies of all licenses, permits, and governmental approvals, including business license (with expiration date & annual costs), fictitious business name statements and building permits (showing placed in service/completion dates)	(Electronic)
7	Certificate(s) of Occupancy for all buildings	(Electronic)
8	List and description of tenant or common area work in progress, if any	N/A
9	Copies of all governmental correspondence or notices pertaining to the property, including but not limited to building code, health code, zoning and fire code,	(Electronic)
10	Maintenance records/work orders, including water intrusion log, for past 12 months	(On-Site)
11	Operation & Maintenance (O&M) Manuals, if any, for maintenance of equipment or hazardous materials	(Electronic)
	FINANCIAL
1	Monthly operating statements, YTD & 3-year historical (cash flow and income statements, balance sheets)	(Electronic)
2	Year-end financial statements: Trailing-12 and audited statements, past 3 years	(Electronic)
3	Operating budget, current year	(Electronic)
4	Property tax bills and Assessment notices, current and past 3 years, with proof of payment (including special assessments or districts and all documentation concerning appeals)	(Electronic)
5	Utility bills for any master-metered utility expenses and any resident unit utilities paid by the Property, monthly YTD and past calendar year (access to utility billing site is preferred, if applicable)	(Electronic)

6	List of utilities paid by Owner/Residents and list of account numbers	(Electronic)
7	List of meters and required deposits (if any / typically for gas, electric, water, phone)	(Electronic)
8	Security deposit/resident ledgers, current	(Electronic)
9	Name and version of accounting software (Yardi Voyager 6.0)	(Electronic)
10	Tax returns, past 3 years - For company purchases only	(Electronic)
11	Loan documents (full closing binder and all amendments/modifications/extensions) and all material correspondence and/or notices given to or received from lender/servicer - For loan assumptions only	N/A
12	REIT Property Services Questionnaire (form for completion to be provided by buyer)	(On-Site)
13	General Ledger, prior year, most recent quarter-end and YTD (in Excel format)	(Electronic)
14	Trial Balance, prior year, most recent quarter-end and YTD (in Excel format)	(Electronic)
15	Bank Statements and Reconciliations, prior year, most recent quarter-end and YTD (monthly)	(Electronic)
16	Cash Disbursement Journal, prior year, most recent quarter-end and YTD	(Electronic)
17	Check Register, prior year, most recent quarter-end and YTD	(Electronic)
18	Accounts Payable Aging Detail, prior year, most recent quarter-end and YTD	(Electronic)
19	Aged Delinquency Report (showing total rent outstanding) with status of any files placed for eviction or collection	(Electronic)
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 #13-17 above)	(TBD)
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)	(TBD)
	MANAGEMENT/LEASING/OPERATIONS
1	Monthly rent rolls, prior year and YTD, in Excel (with all lease charges broken out, to include unit square footage, monthly rent, deposits, financial concessions, other concessions, lease term, extension options, defaults (financial or otherwise), and such other information as Buyer may require)	(Electronic)
2	Market rent survey (comparison of subject w/other properties)	(Electronic)
3	Occupancy history, monthly for past 3 years and current YTD	(Electronic)
4	Current leases for all tenants with all available tenant correspondence files, including amendments/letters/agreements/default notices given or received, with all historical litigation pleadings, if any (access to electronic lease files is preferred, if applicable)	(On-Site)
5	Current or former lease selections, as the case may be, with copies of back-up for rents received (for both resident and any housing authority portion paid, as applicable), prior year and YTD (25 selections to be made by Buyer’s independent REIT 3-14 auditors)	(TBD)

6	Current form of lease with all addenda	(Electronic)
7	List of leases under negotiation or currently out for signature	(On-Site)
8	Current tenant contact sheet (name, address, phone number)	(On-Site)
9	Current staff list (names, titles, hire dates, salary, unit info, hours per week, list of benefits, commissions offered, if any)	(Electronic)
10	Intentionally Deleted.
11	Intentionally Deleted.
12	Intentionally Deleted.
13	Inventory of personal property on site, including items such as furniture, supplies, appliances	(Electronic)
14	Property brochure	(Electronic)
15	List of all active vendors utilized at the property (name, function, contact information)	(Electronic)
16	Copies of all operating and management service contracts, including but not limited to:	(Electronic)
	a. Advertising (including any apt. locator services & pay-per-lease agreements)
	b. Alarm monitoring (including any firm alarm & security cameras)
	c. Cable/TV (including any revenue sharing programs); if none, please indicate so in writing
	d. Elevator
	e. Equipment leases (such as copier, postage machines, key control systems)
	f. Fire extinguisher (including any fire sprinkler systems)
	g. Furniture rental
	h. HVAC
	i. Internet (including any leased equipment such as modems and firewalls
	j. Janitorial services (including any uniform cleaning services)
	k. Landscaping (including any pond/lake maintenance and snow removal)
	l. Laundry
	m. Pest control (including any termite contracts)
	n. Phone (landlines, cell phones, pagers, answering service)
	o. Pool (maintenance, emergency phone, etc.)
	p. Property management agreement; indicate whether entity is related party for disclosure purposes
	q. Security (including any on-site courtesy officer arrangements)
	r. Trash (including recycling programs); Also a copy of the most recent invoice
	s. Revenue Sharing (such as vending machines, pay phones)
	t. Collection Recovery
	u. Credit/application verification
	v. Training programs (including any safety training materials and/or Safety Plan)

	w. Software (including any property management software such as OneSite, Yardi, etc.)
	x. Common Area Services (such as office cleaning, dog waste removal, etc.)
	y. Utility Billing by Third Party
	z. Gate/Access Systems (including software for programming access cards/remotes)
	aa. Towing/Parking Services
	bb. Website Domain (including any website hosting)
	cc. Boiler Maintenance and Water Treatment
	PHYSICAL ITEMS
1	Property information, including number of pools, spas, dumpsters (with size), buildings, storage units, laundry rooms	(Electronic)
2	Marketing photos, including aerial photos if available	(Electronic)
3	Parking: indicate carport, garages, or open spaces and how many of each	(Electronic)
4	Unit floor plans with sq. footage	(Electronic)
5	List of model units, if any (apt. #, bedrooms, rent loss)	(Electronic)
6	List of fire safety equipment, such as smoke sensors, suppression devices, etc. (including system type, rating, map of locations, etc.)	(On-Site)
7	Current insurance certificates: Evidence of Commercial Property Insurance and Certificate of Insurance and copies of all current Certificates of Liability Insurance for any commercial tenants (such as laundry, cell towers, etc.)	(Electronic)
8	Insurance loss run history, past 3 years and YTD (property & general liability)	(Electronic)
9	Copies of insurance policies, past 3 years	(Electronic)
10	All existing third party reports, including, but not limited to:
	a. Certified, as-built ALTA Survey	(Electronic)
	b. Intentionally Deleted.
	c. Asbestos	N/A
	d. Lead-Based Paint Report	N/A
	e. Engineering study or inspection (structural or otherwise)	N/A
	f. Mold	(Electronic)
	g. Phase I Environmental	(Electronic)
	h. Intentionally Deleted.
	i. Operations & Maintenance (O&M) Plans, if any	(Electronic)
	j. Radon	(Electronic)
	k. Soils/Geotechnical	N/A
	l. Termite	(Electronic)
	m. Fire/Life Safety Inspection Report (current)	(Electronic)
	TITLE AND AGREEMENTS
1	Existing Owner’s Title Insurance Policy	(Electronic)
2	Zoning: any reports, compliance letters, maps, ordinances, amendments, unrecorded CC&R’s, special use permits, etc.	(Electronic)
3	Pending litigation summary and copies of all pleadings, if applicable	N/A

4	Governmental Agreements: Any city or county development agreements, bonds, tax increment financing agreements, municipal utility agreements, etc.	N/A
5	Condo / Association documents, if applicable (articles of incorporation, bylaws, unrecorded CC&R’s, Declaration of Horizontal Regime, budgets, material notices, rules and regulations, etc.)	(Electronic)
6	Development Agreements: Any unrecorded development agreements or restrictions with any private party	N/A
7	Access Agreements: Any unrecorded agreements for shared roadways, driveways or other access	(Electronic)
8	Amenities Agreements: Any unrecorded reciprocal easement agreements or shared used agreements for any amenities	N/A
9	Other Unrecorded Agreements: Any agreements that will be binding on the property after closing or that provide any material benefit to or obligation on the property	N/A

Schedule 4.2(a)

FORM OF LIMITED WARRANTY DEED

(Above Reserved for Recording)

After recording, please return to:

[INSERT SELLER COUNSEL]

STATE OF GEORGIA

COUNTY OF _____________

LIMITED WARRANTY DEED

THIS INDENTURE, made effective as of the _____ day of _____________, 20__, between ______________________________, a ____________________________ ("Grantor"), and _____________________, a _______________ ("Grantee");

WITNESSETH:

THAT, for and in consideration of the sum of TEN AND NO/100 DOLLARS ($10.00) in hand paid and other valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Grantor does hereby transfer and convey unto Grantee all Grantor's right, title and interest in and to that land lying in _____________ County, Georgia being more fully described in Exhibit "A" attached hereto and made a part hereof, together with all improvements located thereon, if any, together with all rights, members and appurtenances in any manner appertaining or belonging to said property (collectively, the "Property");

TO HAVE AND TO HOLD the Property unto Grantee forever in FEE SIMPLE.

AND THE SAID Grantor shall warrant and forever defend the right, title and interest to the Property unto Grantee against the claims of all persons claiming by, through or under Grantor, except for claims arising under and by virtue of the Permitted Exceptions attached hereto as Exhibit "B".

(The words "Grantor" and "Grantee" shall include all genders, singular and plural, and their respective heirs, successors and assigns where the context requires or permits);

IN WITNESS WHEREOF, Grantor has executed this Deed under seal on the day and year first above written.

Signed, sealed and delivered in the presence of: Unofficial Witness Notary Public My commission expires: __________             [NOTARIAL SEAL] ___________________________ By: _______________________________ Name: _____________________________ Title: ______________________________

Exhibits To Limited Warranty Deed

A - Legal Description Of Land

B - Permitted Exceptions

Schedule 4.2(b)

[FORM OF BILL OF SALE AND ASSIGNMENT AND ASSUMPTION

OF LEASES AND SERVICE CONTRACTS]

* * *

BILL OF SALE AND ASSIGNMENT AND ASSUMPTION

OF LEASES AND SERVICE CONTRACTS

This Bill of Sale and Assignment and Assumption of Leases and Service Contracts (this “Agreement”) is made and entered into this ____ day of _____, 201_, by and between ___________________________, a ____________________ (“Seller”), and ___________________, a ___________ (“Purchaser”).

W I T N E S S E T H:

WHEREAS, Seller and Purchaser (by assignment from Steadfast Asset Holdings, Inc.) are parties to that certain Purchase and Sale Agreement, dated _____, 201_ [DESCRIBE AMENDMENTS, IF APPLICABLE] (the “Contract”), having [NAME OF ESCROW AGENT] as party for the limited purposes set forth therein;

WHEREAS, concurrently with the execution and delivery of this Agreement and pursuant to the Contract, Seller is conveying to Purchaser, by Limited Warranty Deed, (i) those certain tracts or parcels of real property located in the ______________, _____________ County, ____________, and more particularly described on Exhibit A, attached hereto and made a part hereof (the “Land”), (ii) the rights, easements and appurtenances pertaining to the Land (the “Related Rights”), and (iii) the buildings, structures, fixtures and other improvements on and within the Land (the “Improvements”; and the Land, the Related Rights and the Improvements being sometimes collectively referred to as the “Real Property”);

WHEREAS, Seller has agreed to convey to Purchaser certain personal property and assign to Purchaser certain leases and service contracts as hereinafter set forth;

NOW, THEREFORE, in consideration of the receipt of Ten Dollars ($10.00), the assumptions by Purchaser hereinafter set forth and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Seller and Purchaser agree as follows:

1.    Bill of Sale:

(a)    Seller hereby sells, assigns, transfers and conveys to Purchaser all of Seller's right, title and interest in, to and under the Tangible Personal Property and the Intangible Property. Seller warrants to Purchaser that Seller owns good title to the Tangible Personal Property, that the Tangible Personal Property is free and clear of all liens, charges and encumbrances other than the Permitted Exceptions (as defined in the Contract), and that Seller has full right, power and authority to sell the Tangible Personal Property and to make this Bill of Sale. Seller further warrants to Purchaser that Seller has not conveyed to any third party its right, title and interest, if any, in the Tangible Personal Property or the Intangible Property.

(b)    all of Seller's right, title and interest in, to and under all tangible personal property upon the Land or within the Improvements, including specifically, without limitation, appliances, equipment, furniture, furnishings, carpeting, draperies and curtains, tools and supplies, and other items of tangible personal property owned by Seller and used exclusively in connection with the ownership, use, maintenance or operation of the Land and the Improvements, and including those items of tangible personal property identified on Exhibit B, attached hereto and incorporated herein by this reference, but excluding (i) cash and cash equivalents (except to the extent prorated at Closing), and any reserves or other deposits funded or made in connection with any financing encumbering the Property, (ii) computer software and computer files, (iii) any time clock(s), (iv) personal property owned by tenants under the Leases, (v) any equipment installed by, or in connection with, any telecommunication or utility provider and which is owned by any party other than Seller (excluding any reversionary interest that Seller may have therein which shall be assigned to Purchaser to the extent assignable), (vi) any items owned by employees of Seller or any property manager, (vii) any items leased to Seller, (viii) any digital voice receivers used in connection with recorded music at the Property, and (ix) all brochures, advertising copy, promotional materials, manuals, reports, portfolios, binders, training materials and other items on which the name “Century” or any of the Marks (as defined in Section 1.7 of the Contract) appears (the property described in this clause (d), other than the excluded items, being herein referred to collectively as the “Tangible Personal Property”). Seller agrees to cooperate reasonably, if feasible, with Purchaser to transfer any property specific computer data files in electronic format to Purchaser provided Seller is not in breach of any license agreement or other agreement with respect to the transfer of such data;

(c)    all of Seller's right, title and interest in, to and under (i) the Designated Service Contracts (as defined in Section 5.7 of the Contract); (ii) all assignable existing warranties and guaranties issued to or inuring to the benefit of Seller in connection with the Improvements or the Tangible Personal Property; (iii) all governmental permits, licenses and approvals, if any, belonging to or inuring to the benefit of Seller and pertaining to the Real Property or the Tangible Personal Property, but only to the extent that such permits, licenses and approvals are assignable and only to the extent that such permits, licenses and approvals relate to the Real Property or the Tangible Personal Property as opposed to other property of Seller or its affiliates; (iv) resident and tenant files for current residents and tenants as of the Closing Date; (v) architectural and civil plans and specifications (to the extent in Seller's possession); (vi) other non-confidential and non-proprietary records owned by Seller and used in connection with the operation of the Real Property or any part thereof, and located on-site as of the Closing Date; (vii) all rights to use the name “Crest at Barrett Lakes” in connection with the Real Property; and (viii) all assignable telephone numbers and websites domain names associated with the Real Property including but not limited to the right, at Purchaser’s expense, to use www.______________________ for a period of one (1) year after the Closing solely for the purpose of forwarding visitors to Purchaser’s website for the Real Property; but excluding any rights in or to the use of the Marks (the property described in this clause (c), other than the excluded items, being sometimes herein referred to collectively as the “Intangible Property”). ;

2.    Assignment and Assumption of Leases:

(a)    Seller hereby sells, assigns, transfers and conveys to Purchaser all of Seller's right, title and interest as landlord in, to and under all rental agreements, leases and other agreements in effect as of the date of this Agreement demising space in or providing for the use or occupancy of the Real Property (the “Leases”), together with any and all unapplied refundable tenant security and other unapplied refundable deposits in Seller's (or any affiliate’s or agent’s) possession with respect to the Leases as of the date of this Agreement (collectively, the “Deposits”). The assignment of the Deposits has been made by means of a credit or payment on the closing statement executed by Seller and Purchaser.

(b)    Purchaser hereby assumes all of the covenants, agreements, conditions and other terms and provisions stated in the Leases which, under the terms of the Leases, are to be performed, observed, and complied with by the landlord from and after the date of this Agreement. Purchaser acknowledges that Purchaser shall become solely responsible and liable as landlord under the Leases for obligations arising or accruing from and after the date hereof.

(c)    For purposes of this Paragraph 2, the word “landlord” means the landlord, lessor or other equivalent party under any of the Leases, and the word “tenant” means the tenant, lessee or other equivalent party under any of the Leases.

3.    Assignment and Assumption of Service Contracts:

(a)    Seller hereby sells, assigns, transfers and conveys to Purchaser all of Seller's right, title and interest in, to and under those service, supply, equipment rental and similar agreements set forth on Exhibit C, attached hereto and made part hereof by this reference (the “Service Contracts”).

(b)    Purchaser hereby assumes all of the covenants, agreements, conditions and other terms and provisions stated in the Service Contracts which, under the terms of the Service Contracts, are to be performed, observed, and complied with by the property owner from and after the date of this Agreement. Purchaser acknowledges that Purchaser shall become solely responsible and liable under the Service Contracts for obligations arising or accruing from and after the date hereof, including with respect to any and all payments coming due under the Service Contracts for which Purchaser has received a credit or payment on the closing statement executed by Purchaser and Seller (the “Credited Payments”).

4.    Qualifications. This Agreement is subject to the Permitted Exceptions (as defined in the Contract). This Agreement is also subject to those provisions of the Contract limiting Seller's liability to Purchaser, including but not limited to Section 11.20 of the Contract.

5.    Counterparts. This Agreement may be executed in two or more identical counterparts, and it shall not be necessary that any one of the counterparts be executed by all of the parties hereto. Each fully or partially executed counterpart shall be deemed an original, but all of such counterparts taken together shall constitute one and the same instrument.

6.    Successors and Assigns. This Agreement shall inure to the benefit of, and be binding upon, the successors, executors, administrators, legal representatives and assigns of the parties hereto.

7.    Governing Law. This Agreement shall be construed under and enforced in accordance with the laws of the State of Georgia.

EXECUTED effective as of the date first above written.

SELLER: _________________________________, a____________________________ By: ___________________________,a____________________________ By: ___________________________ Name:__________________________ Title:__________________________ PURCHASER: ________________________________, a ____________________________ By: _________________________________ Name: _______________________________ Title: ________________________________

Exhibits to Bill of Sale and Assignment

A - Legal Description of Land

B - Inventory of Tangible Personal Property

C - List of Designated Service Contracts

EXHIBIT 4.2(c)

“TENANT NOTICE “

_______________, 201_

TO: All Valued Residents of [**COMMUNITY NAME**]

Re:    Notice of Lease Assignment and Transfer of Security Deposit

This letter is to notify you that the property commonly known as [**COMMUNITY NAME**], [**ADDRESS**] (“Property”) has this date been sold and the ownership transferred.

In connection with this sale, all of the interest of the lessor under your lease of space in the Property, together with your security deposit, have been transferred to the new owner. You are hereby notified that, from and after the date hereof and until further notice, all future payments under your lease should be made payable to [**COMMUNITY NAME**] 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,

(legal signature block)

Schedule 4.2(d)

FORM OF SELLER'S CLOSING CERTIFICATE

_____________________________________________________________________________

THIS CERTIFICATION is made as of _____________, 201_, by ___________________________, a ____________________ (“Seller”), in favor of _______________________, a __________ (“Purchaser”).

Seller hereby certifies to Purchaser that the representations and warranties of Seller set forth in Section 5.1 of that certain Purchase and Sale Agreement between Seller and _________________________ [if applicable: as amended] (the “Agreement”) dated as of __________, 20__, as amended, are true and correct in all material respects as of the date hereof, except as to:

(a) The Rent Roll attached hereto as Exhibit A replaces the Rent Roll attached to the Agreement as Schedule 1.3; and

(b) [If applicable: The items disclosed on Exhibit B attached hereto replace Seller's Disclosure Schedule attached to the Agreement as Schedule 5.1].

The representations and warranties set forth in Section 5.1 of the Agreement, as updated by this Certificate of Seller's Representations and Warranties, will survive only for a period of nine (9) months from the date hereof.

This certificate is delivered pursuant to Section 4.2(d) of the Agreement, and Seller's liability hereunder is subject to Section 5.3 of the Agreement, including the Cap as defined therein.

___________________________, a ____________________

By:    

___________________, its _______________

Exhibits to Seller's Closing Certificate

Exhibit A --     Updated Rent Roll

Exhibit B --     Additional Items for Seller's Disclosure Schedule [if applicable]

Schedule 5.1

SELLER'S DISCLOSURE STATEMENT

NONE.

Schedule 5.1(h)

LIST OF SERVICE CONTRACTS

[SEE ATTACHED PAGES]

[INTENTIONALLY OMITTED]

Schedule 5.7(b)

SCHEDULE OF MUST TAKE SERVICE CONTRACTS

1.Great American Lease

2.Clubhouse Services

3.Deep Green

4.Comcast

EX-10.2

EXHIBIT 10.2

ASSIGNMENT AND ASSUMPTION OF PURCHASE AGREEMENT

For good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, STEADFAST ASSET HOLDINGS, INC., a California corporation (“Assignor”), hereby assigns to STAR BARRETT LAKES, 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 dated September 10, 2014, (as may have been amended or may hereafter be amended, the “Purchase Agreement”), between Carlyle Centennial Crest at Barrett Lakes, L.P., a Delaware limited partnership (“Seller”) and Assignor for the purchase and sale of that certain real property located in Kennesaw, Georgia, 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 APPEAR ON FOLLOWING PAGE)

WITNESS THE EXECUTION HEREOF, as of this November 20, 2014.

ASSIGNOR:

STEADFAST ASSET HOLDINGS, INC.,

a California corporation

By:	/s/ Ana Marie del Rio
	Ana Marie del Rio, Vice President

ASSIGNEE:

STAR BARRETT LAKES, LLC

a Delaware limited liability company

By:	Steadfast Apartment Advisor, LLC, a
	Delaware limited liability company, its Manager

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

2

Exhibit A

LEGAL DESCRIPTION OF THE LAND

ALL THAT TRACT OR PARCEL OF LAND L Y1NG AND BEING IN LAND LOTS 791, 792

AND 793 OF THE 16TH DISTRICT, 2ND SECTION AND LAND LOT 210 OF THE 20TH

DISTRICT, 2ND SECTION, OF COBB COUNTY, GEORGIA, AND BEING MORE

PARTICULARLY DESCRIBED AS FOLLOWS:

BEGINNING AT AN IRON PIN FOUND (1/2" REBAR) MARKING THE COMMON

CORNER OF LAND LOTS 791, 792, 793 AND 794 OF THE 16TH DISTRICT, 2ND

SECTION OF COBB COUNTY; THENCE ALONG THE SOUTH LINE OF LAND LOT 792

(SAID LINE BEING COMMON TO LAND LOTS 792 AND 793), SOUTH 89°47'27" WEST

FOR A DISTANCE OF 669.80 FEET TO AN IRON PIN FOUND (1-1/2" CRIMPED TOP

PIPE); THENCE DEPARTING SAID SOUTH LINE OF LAND LOT 792 AND PROCEED

SOUTH 00°14'00" WEST FOR A DISTANCE OF 495.17 FEET TO AN IRON PIN PLACED

(1/2" REBAR); THENCE SOUTH 00° 14'00" WEST FOR A DISTANCE OF 847.50 FEET TO

AN IRON PIN PLACED (1/2" REBAR) ON THE SOUTH LINE OF LAND LOT 793 (SAID

LINE BEING COMMON TO LAND LOTS 793 & 864); THENCE ALONG THE SOUTH

LINE OF LAND LOT 793 (SAID LINE BEING COMMON TO LAND LOTS 793 & 864),

NORTH 89°06'43" WEST FOR A DISTANCE OF 648.52 FEET TO A NAIL FOUND AT

BASE OF 1" AXLE IN ROCK PILE MARKING THE SOUTHWEST CORNER OF LAND

LOT 793 AND ON THE EAST LINE OF LAND LOT 210 OF THE 20TH DISTRICT, 2ND

SECTION OF COBB COUNTY (SAID LINE HEREINAFTER BEING REFERRED TO AS

THE DISTRICT LINE); THENCE DEPARTING SAID DISTRICT LINE AND PROCEED

NORTH 88°55'09" WEST FOR A DISTANCE OF 363.02 FEET TO AN IRON PIN PLACED

(1/2" REBAR); THENCE NORTH 31 °11 '20" WEST A DISTANCE OF 394.24 FEET TO AN

IRON PIN FOUND (1/2" REBAR); THENCE NORTH 41°29'14" WEST A DISTANCE OF

94.44 FEET TO AN IRON PIN FOUND (5/8" REBAR); THENCE NORTH 45°20'57" WEST

A DISTANCE OF 178.68 FEET TO AN IRON PIN FOUND (3/4" REBAR); THENCE NORTH

39°50'52" WEST A DISTANCE OF 80.81 FEET TO AN IRON PIN PLACED (1/2" REBAR);

THENCE NORTH 23°17'20" WEST A DISTANCE OF 113.61 FEET TO AN IRON PIN

PLACED (1/2" REBAR) ON THE EASTERLY RIGHT-OF-WAY LINE OF GREERS

CHAPEL ROAD (VARIABLE R/W); THENCE ALONG THE EASTERLY RIGHT-OF-WAY

LINE OF GREERS CHAPEL ROAD THE FOLLOWING COURSES AND DISTANCES: 1)

25.96 FEET ALONG THE ARC OF A CURVE TO THE LEFT, SAID CURVE HAVING A

RADIUS OF 196.52 FEET AND BEING SUBTENDED BY A CHORD OFNORTH03°11'59"

EAST, 25.94 FEET TO A POINT; 2) THENCE NORTH 00°35'06" WEST FOR A DISTANCE

OF 514.81 FEET TO AN IRON PIN PLACED (1/2" REBAR) WHERE GREERS CHAPEL

ROAD INTERSECTS THE SOUTHEASTERLY RIGHT-OF-WAY LINE OF BARRETT

LAKES BOULEVARD (VARIABLE RIW, FKA: NEW GREERS CHAPEL ROAD); THENCE

ALONG THE SOUTHEASTERLY, SOUTHERLY AND SOUTHEASTERLY RlGHT-OFWAY

LINE OF BARRETT LAKES BOULEVARD (VARIABLE R/W) THE FOLLOWING

COURSES AND DISTANCES: 1) 210.72 FEET ALONG THE ARC OF A CURVE TO THE

RIGHT, SAID CURVE HAVING A RADIUS OF 348.00 FEET AND BEING SUBTENDED

BY A CHORD OF NORTH 31 °02'21" EAST, 207.52 FEET TO AN IRON PIN PLACED (1/2"

REBAR); 2) THENCE SOUTH 41 °36'50" EAST A DISTANCE OF 4.50 FEET TO AN IRON PIN PLACED (1/2" REBAR); 3) THENCE 192.98 FEET ALONG THE ARC OF A CURVE

TO THE RIGHT, SAID CURVE HAVING A RADTIJS OF 343.50 FEET AND BEING

SUBTENDED BY A CHORD OF NORTH 64°28'49" EAST, 190.45 FEET TO A.1\[ IRON PIN

PLACED (112" REBAR); 4) THENCE NORTH 09"25'32" WEST A DISTANCE OF 3.15

FEET TO AN IRON PIN PLACED (112" REBAR); 5) THENCE NORTH 80°29'41" EAST

AND CROSSING THE DISTRICT LINE FOR A DISTANCE OF 754.59 FEET TO AN IRON

PIN PLACED (1/2" REBAR); 6) THENCE 804.09 FEET ALONG THE ARC OF A CURVE

3

TO THE LEFT, SAID CURVE HAVING A RADIUS OF 800.00 FEET AND BEING

SUBTENDED BY A CHORD OF NORTH 51°42'02" EAST 770.67 FEET TO AN IRON PIN

FOUND (3/4" REBAR); 7) THENCE NORTH 22°54'22" EAST A DISTANCE OF 408.52

FEET TO AN IRON PIN FOUND (112" REBAR); 8) THENCE 181.66 FEET ALONG THE

ARC OF A CURVE TO THE RIGHT, SAID CURVE HAVING A RADIUS OF 522.96 FEET

AND BEING SUBTENDED BY A CHORD OF NORTH 32°51 '26" EAST, 180.75 FEET TO

AN IRON PIN PLACED (1/2" REBAR); THENCE DEPARTING THE SOUTHEASTERLY

RIGHT-OF-WAY LINE OF BARRETT LAKES BOULEVARD (VARIABLE R/W, FKA:

NEW GREERS CHAPEL ROAD) AND PROCEED SOUTH 42°49'17" EAST FOR A

DISTANCE OF 842.11 FEET TO AN IRON PIN PLACED (l/2" REBAR) WITHIN A

GEORGIA POWER EASEMENT; THENCE SOUTH 89°27'09" WEST FOR A DISTANCE

OF 290.Q7 FEET TO AN IRON PIN PLACED (112" REBAR) ON THE EAST LINE OF LAND

LOT 792 (SAID LINE BEING COMMON TO LAND LOTS 791 & 792 OF THE 16TH

DISTRICT, 2ND SECTION OF COBB COUNTY; THENCE ALONG THE EAST LINE OF

LAND LOT 792 (SAID LINE BEING COMMON TO LAND LOTS 791 & 792), SOUTH

00°56'29" EAST FOR A DISTANCE OF 682.09 FEET TO AN IRON PIN FOUND (112"

REBAR) MARKING THE COMMON CORNER OF LAND LOTS 791, 792, 793 AND 794

AND THE POINT OF BEGINNING. SAID TRACT OR PARCEL CONTAINING 67.83537

ACRES OR 2,954,909 SQUARE FEET.

4

EX-10.3

EXHIBIT 10.3

PROPERTY MANAGEMENT AGREEMENT

THIS PROPERTY MANAGEMENT AGREEMENT (this “Agreement”) is made and entered into as of November 20, 2014 (the “Effective Date”), by and between STAR BARRETT LAKES, LLC, a Delaware limited liability company (“Owner”), and STEADFAST MANAGEMENT COMPANY, INC., a California corporation (“Manager”).

ARTICLE 1

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.

“Hazardous Materials” means any material defined as a hazardous substance under the Comprehensive Environmental Response, Compensation and Liability Act of 1980, the Resource Conservation and Recovery Act, or any state or local statute regulating the storage, release, transportation or other disposition of hazardous material, as any of those laws may have been amended to the date hereof, and the administrative regulations promulgated thereunder prior to the date hereof, and, whether or not defined as hazardous substances under the foregoing Governmental Requirements, petroleum products (other than petroleum products used in accordance with Governmental Requirements by Owner or its tenants in the usual and ordinary course of their activities), PCBs and radon gas.

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

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

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

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

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

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

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

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

“Security Deposit Account” has the meaning given in Section 5.1.

“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.

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 Ella S. Neyland, President. 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:

2

(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.

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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.

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.

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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.

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.

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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.

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, 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. No later 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 any regulatory or use agreements. Owner acknowledges that Manager does not hold itself out to be an expert or consultant with respect to, or represent that, the Property currently complies with applicable ordinances, regulations, rules, statutes, or laws of governmental entities having jurisdiction over the Properties or the requirements of the Board of Fire Underwriters or other similar bodies (collectively, “Governmental Requirements”). Manager shall take such action as may be reasonably necessary to comply with any Governmental Requirements applicable to Manager, including the collection and payment of all sales and other taxes (other than income taxes) which may be assessed or charged by the State or any governmental entities in connection with Manager’s compensation. If Manager discovers that the Property does not comply with any Governmental Requirements, Manager shall take such action as may be reasonably necessary to bring the Property into compliance with such Governmental Requirements, subject to the limitation contained in Section 3.5 of this Agreement regarding the making of alterations and repairs. Manager, however, shall not take any such action as long as Owner is contesting or has affirmed its intention to contest and promptly 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 Three Percent (3.0%) 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. 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 4.3, Manager shall be entitled to receive all compensation and reimbursements, if any, due to Manager through the date of termination. Within 30 days after any termination, Manager shall deliver to Owner’s Representative, the report required by Section 3.13(a) for any period not covered by such a report at time of termination, and within 30 days after any such termination, Manager shall deliver to Owner’s Representative, as required by Section 3.13(b), the statement of cash flow for the Fiscal Year or portion thereof ending on the date of termination. In addition, upon termination of this Agreement for any reason, Manager will submit to Owner within 30 days after termination any reports required hereunder, all of the cash and bank accounts of the Property, including, without limitation, the Security Deposit Account, investments and records. Manager will, within 30 days after termination, turn over to Owner all copies of all books and records kept for the Property. If Manager desires to retain records of the Property, Manager must reproduce them at its own expense.

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 Manager and held separate from all other of Manager’s funds and accounts, unless 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 Sections 2.4 and 5.2, 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 pursuant to the terms of this Agreement 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 STAR Barrett Lakes, LLC, 18100 Von Karman Avenue, Suite 500, Irvine, CA 92612, Attention: Kevin Keating; and in the case of Manager to Steadfast Management Company, Inc., 18100 Von Karman Avenue, Suite 500, Irvine, CA 92612, Attention: Christopher Hilbert, or to such other address as shall, from time to time, have been designated by written notice by either party given to the other party as herein provided.

Section 6.3Entire 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.

[Signatures appear on following page.]

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

OWNER:	STAR BARRETT LAKES, LLC,
	a Delaware limited liability company
	By:	Steadfast Apartment Advisor, LLC, its Manager
		By:	/s/ Ana Marie del Rio
			Ana Marie del Rio, Secretary

MANAGER:	STEADFAST MANAGEMENT COMPANY, INC.,
	a California corporation
	By:	/s/ William C. Stoll
		William C. Stoll, Vice President

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EXHIBIT A

ESTIMATED PASS-THROUGH AMOUNTS

Benefits Administration	3.0% of total employee costs
IT Infrastructure, Licenses and Support	At cost and expense
Marketing/Training/Continuing Education	$20.00 p.u.p.y.

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EXHIBIT B

THE PROPERTY

The 1800 Barrett Lakes is located at 1800 Barrett Lakes Boulevard NW, Kennesaw, Georgia, in the County of Cobb, and described as follows:

The Property is comprised of 39 buildings with 500 units and 38 detached garages. Site amenities include leasing center, clubhouse, two swimming pools, sauna, two lighted tennis courts, fitness center, and playground. It is situated on 68.19 acres. Phase 1 was built in 1989 and phase 2 was built in 1997.

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EX-10.4

EXHIBIT 10.4

CONSTRUCTION MANAGEMENT SERVICES AGREEMENT

THIS CONSTRUCTION MANAGEMENT SERVICES AGREEMENT (this “Agreement”) is entered into as of November 20, 2014 by and between STAR BARRETT LAKES, LLC, a Delaware limited liability company (the “Company”), and PACIFIC COAST LAND & CONSTRUCTION, INC., a California corporation (the “Construction Manager”).

RECITALS

A.    The Company, directly or through a wholly-owned subsidiary, owns that certain 500-unit multifamily housing development located in Kennesaw, Georgia and commonly known as The 1800 at Barrett Lakes (the “Project”), which Project is scheduled to undertake certain capital improvements projects (the “Improvements”) and/or certain revitalization projects (the “Revitalization”) from time to time.

B.    The Construction Manager is experienced and staffed to oversee and manage completion of the Improvements and Revitalization.

C.    The Company desires to engage the Construction Manager to provide certain services for the Company with respect to the Improvements and Revitalization, including but not limited to compliance with the Agreement(s) for Contractor Services executed in connection with the Improvements and Revitalization, a form of which is attached hereto as Exhibit A, and will be entered into with each contractor (the “Contractor Agreements”).

NOW, THEREFORE, in consideration of the foregoing, of the mutual promises of the parties hereto, and of other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:

AGREEMENT

1.Appointment. The Company hereby appoints the Construction Manager to render services in connection with the Improvements and Revitalization as contemplated herein and in the Contractor Agreements, and confirms and ratifies the appointment of the Construction Manager with respect to such services rendered for the Company to date, if any.

2.Authority. The Construction Manager shall have the authority and the obligation to:

(a)monitor the Scope of Work (as described in the applicable Contractor Agreement) and timely completion of each Improvement and Revitalization project, as such Improvement and Revitalization project is to be completed pursuant to the applicable Contractor Agreement;

(b)make recommendations with respect to the Improvements and Revitalization and their repair or construction;

(c)assist the Company in making determinations and taking action under the Contractor Agreements;

(d)coordinate accurate and timely draw requests for lender, if any, and release of all applicable contractor lien rights for work completed; and

(e)maintain complete and accurate records relating to the Improvements and Revitalization, the Contractor Agreements and the services provided under this Agreement.

3.Fees. For services that are to be, or have been, performed under this Agreement, the Company agrees to pay the Construction Manager a fee (the “Construction Management Fee”), in an amount equal to Eight Percent (8%) of the total costs of the Improvements and Revitalization, which Construction Management Fee shall be payable from time to time as and when the Company makes payments under the Contractors Agreement.

4.Insurance; Indemnification. During the term of this Agreement, Construction Manager shall procure and maintain, at its sole cost and expense, at least the following types and amounts of insurance coverage: (a) Commercial General Liability with limits no less than $1 Million per occurrence and $2 Million in the aggregate; (b) Commercial Automobile Liability with limits no less than $1 Million, combined single limit, (c) Worker's Compensation insurance with limits no less than the minimum amount required by applicable law; and (d) Errors and Omissions/Professional Liability with limits no less than $1 Million per occurrence. All required insurance policies shall be issued by insurance companies with a Best's Rating of no less than A-VII and provide that such insurance carriers give the Company at least 30 days' prior written notice of cancellation or non-renewal of policy coverage. The policies are to name the Company or its applicable subsidiary as additional insureds and will waive any right of subrogation of the insurers against the Company or any of its affiliates.

The Company shall defend, indemnify and hold harmless the Construction Manager and its officers, directors, employees, agents, successors and permitted assigns (each, an “Indemnitee") from and against all claims, costs, losses and damages, arising out of or resulting from any third party claim, suit, action or proceeding relating to the Project or the Improvements and Revitalization. Construction Manager shall defend, indemnify and hold harmless the Company and its Indemnitees from and against all losses arising out of or resulting solely from the willful, fraudulent or grossly negligent acts or omissions of Construction Manager.

5.Termination. This Agreement may be terminated by either party with 30-days prior written notice to the other party.

6.Assignment; Successors and Assigns. No party shall assign its rights or delegate its obligations without the consent of the other party, which consent may be withheld in such other parties’ sole and absolute discretion; provided, however, that no consent is required for an assignment to an affiliate of

such party. In the event of an assignment permitted hereunder, this Agreement shall be binding on the parties hereto and their successors and assigns.

7.Arbitration. All claims and disputes arising under or relating to this Agreement are to be settled by binding arbitration in the state of California or another location mutually agreeable to the parties. The arbitration shall be conducted on a confidential basis pursuant to the Commercial Arbitration Rules of the American Arbitration Association. Any decision or award as a result of any such arbitration proceeding shall be in writing and shall provide an explanation for all conclusions of law and fact and shall include the assessment of costs, expenses, and reasonable attorneys' fees. Any such arbitration shall be conducted by an arbitrator experienced in construction matters and mutually agreed upon by the parties. The arbitrator shall include a written record of the arbitration hearing. The ruling of such arbitrator shall be binding upon the parties hereto and shall be final and non-appealable. An award of arbitration may be confirmed in a court of competent jurisdiction.

8.Separability of Provisions. Each provision of this Agreement shall be considered separable and if for any reason any provision that is not essential to the effectuation of the basic purposes of this Agreement is determined to be invalid and contrary to any existing or future law, such invalidity shall not impair the operation of or affect those provisions of this Agreement which are valid.

9.Facsimile Signatures; Counterparts. This Agreement may be executed in several counterparts, each of which shall be deemed to be an original copy and all of which together shall constitute one agreement binding on all parties hereto, notwithstanding that all the parties shall not have signed the same counterpart. Any party may effect the execution and delivery of this Agreement by signing the same and sending a copy thereof to the other party or its attorney by facsimile or electronic transmission. Such facsimile document, including the signatures thereon, shall be treated in all respects as an original instrument bearing an original signature.

10.No Continuing Waiver. The waiver of any party of any breach of this Agreement shall not operate or be construed to be a waiver of any subsequent breach.

11.Applicable Law. This Agreement shall be construed and enforced under the laws of the state in which the Project is located.

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Construction Management Services Agreement

IN WITNESS WHEREOF, the parties have caused this Construction Management Services Agreement to be duly executed as of the date as first written above.

COMPANY:

STAR BARRETT LAKES, LLC, a Delaware limited liability company

By: STEADFAST APARTMENT ADVISOR, LLC, its Manager

By:	/s/ Ana Marie del Rio
Name:	Ana Marie del Rio
Its:	Secretary

CONSTRUCTION MANAGER:

PACIFIC COAST LAND & CONSTRUCTION, INC., a California corporation

By:	/s/ Dinesh Davar
Name:	Dinesh Davar
Its:	Chief Financial Officer

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Construction Management Services Agreement

AGREEMENT FOR CONTRACTOR SERVICES

This Agreement for Contractor Services (this "Agreement") is made as of ___________, 20__, between ______________________________, a _________________ ("Owner"), and __________________________________________, a __________________________ ("Contractor"). For purposes of this Agreement, Owner shall mean Owner or its agent, Pacific Coast Land & Construction, Inc., a California corporation ("Construction Manager"), as directed by Owner.

1. Job Site: _____________________ Apartments, located at _____________________________, City of ________, State of _________________ (the "Job Site").

2. Scope of the Work: Contractor agrees to furnish all supervision, labor, materials, equipment, supplies, services, machinery, tools and all other elements necessary for the proper, complete, expeditious and efficient performance of the work described below which shall be hereinafter referred to as (the “Work”):

(a)    Attached Proposal / Work Scope from Contractor. □Attached, or

(b)    Other (please describe): __________________________________________________________________________________________________

3. Contract Plans and Specifications: The addenda, drawings, plans, general and supplementary conditions and specifications attached to this Agreement, together with__________________ (collectively, the "Plans and Specifications"), constitute the approved Plans and Specifications for the Work. Contractor and its subcontractors will be and are bound by any and all of said Plans and Specifications insofar as they relate in any part or in any way to the work covered by this Agreement. In the event of any conflict between the provisions of Plans and Specifications and the Contractor’s proposal, the Plans and Specifications shall govern.

4. Commencement and Completion: The Work shall commence on _______________, 20__and shall be complete in accordance with this Agreement without delay on ______________, 20__.The term “day”, used throughout this Agreement, refers to calendar days. Contractor shall not be entitled to any additional compensation for any Permitted Delays. If this Agreement is not signed and returned to the Owner before any work commences, this Agreement will be considered as accepted as presented to the Contractor.

5. Payment:

(a)Contract Price: The Owner agrees to pay the Contractor for the full and faithful performance of the Work, including all applicable taxes, and the Contractor agrees to accept such payment as full and just compensation therefor. The Work is to be done on a time and material basis as it is set forth in the “Scope of Work” referenced in Section 2 above, and the total estimated cost for the Work is ___________________________________________ DOLLARS AND __/100 ($________.__) (the “Contract Price”) in current funds subject to additions and deductions for changes and/or charges as may be agreed upon in writing pursuant to this Agreement.

(b)Progress Payments: All applications for payment ("Invoices"), in form acceptable to Owner, shall include a complete description of the labor and materials supplied, and the work done during the period covered by the Invoice (the "Invoice Period"). All Invoices shall be accompanied by (i) a list of all suppliers and subcontractors whose materials or services have been utilized by Contractor to perform the work described in the Invoice, and (ii) signed waivers of and releases from any claim of lien, or stop notice that could be asserted by such suppliers, subcontractors and Contractor as a result of the work performed during the Invoice Period. Each Invoice will be accompanied by certified statements from each supplier and subcontractor (1) indicating the total amount due them as a result of the work performed during the Invoice Period, (2) acknowledging that Contractor may or may not (in the Owner’s sole discretion) be paid by means of a joint check prepared based upon such certified statements, and (3) agreeing that such supplier's or subcontractor's negotiation of any such check shall be its representation that it has been timely and fully paid for work performed through the end of the Invoice Period. Such certified statements shall be in the form prescribed by the laws of the state in which the Job Site is located, or if no such prescribed form exists, in substantially the form attached hereto as Exhibit A. Contractor agrees to furnish, if and when required by Owner, payroll affidavits, receipts, vouchers, releases of claims for labor, material and subcontractors performing work or furnishing material under this Agreement, all in form satisfactory to Owner. Subject to the payment provisions of this Agreement, ninety percent (90%) of the amount set forth in the Invoices shall be paid in any calendar month upon payment of the progress payment for such month to Contractor. Invoices shall not be submitted more frequently than monthly, and shall include all charges made since the preceding Invoice Period.

(i)    Final Payment. Contractor shall not be paid the remaining ten percent (10%) of the Contract Price until the Work has been completed in accordance with the Plans and Specifications, including but not limited to, (1) receipt of properly executed warranties; (2) attic stock materials designated in the Plans and Specifications; (3) spare parts designated in the Plans and Specifications; (4) final lien releases from all suppliers, subcontractors and Contractor in the form prescribed by the laws of the state in which the Job Site is located, or if no such prescribed form exists, in substantially the form attached hereto as Exhibit B; (5) reasons listed in “Withholding Payment” have been removed; in each case to Owner’s satisfaction and (a) either (i) thirty (30) days have elapsed after a Notice of Completion for the Work has been recorded, or (ii) if a Notice of Completion for the Work is not recorded, Contractor receives a written notice of acceptance of the Work from Owner within thirty (30) days after Owner determines in good faith that the Work has been fully and acceptably performed, and (b) within ten (10) days after Lender has released retainage funds, which will not occur prior to 50% completion for the entire project, however, holding retainage could extend to final completion of the project.

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Construction Management Services Agreement

(ii)    Designated Representatives. Owner and Contractor shall each designate a field representative, as such representative may be changed from time to time by written notice to the other party. All notices, writings or other communications concerning this Agreement or the Work shall be made through each party's designated field representative, which for purposes of this Agreement shall be the respective Designated Representatives set forth below. All addenda, change orders, or modifications to this Agreement must be signed by an authorized Designated Representative.

1. General Conditions: This Agreement includes the General Conditions attached hereto and made a part hereof.

2. Supplementary Conditions:This Agreement also includes the Supplementary Conditions, if any, attached hereto as Appendix 1 and made a part hereof. In the event of any conflict between the provisions of Appendix 1 and any other provision of this Agreement, the provisions of Appendix 1 shall control. All Supplementary Conditions must be initialed by both Owner and Contractor in order to be binding upon the parties.

NOTICE: STATE REQUIRED NOTICES AND/OR DISCLOSURES, IF ANY, ARE ATTACHED HERETO AS APPENDIX 2.

OWNER: _____________________________, a ________________________ By: Pacific Coast Land & Construction, Inc.,         a California corporation,    authorized agent of Owner      By:__________________________________________________      Name: ______________________________________________      Title: ________________________________________________ Dated: _________________________________________________ Address: 18100 Von Karman Avenue, Suite 500                  Irvine, CA 92612 Designated Representative: _____________________________________________ CONTRACTOR: ____________________________________, a _______________ By:__________________________________________________ Its:__________________________________________________ Dated:_______________________________________________ Address: _____________________________________________ License No.:__________________________________________ Federal Tax I.D. or F.I.C.A. No.:_______________________ Designated Representative: _____________________________________________

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Construction Management Services Agreement

GENERAL CONDITIONS

1.    The Work.

(a)    Plans and Specifications; Laws. The Work shall be performed in strict accordance with: (i) the Plans and Specifications; and (ii) all applicable federal, state and local codes, laws, permits, orders, ordinances and any rules and regulations promulgated there under, (collectively "Laws").

(b)    Shop Drawings. Contractor shall submit such shop drawings, product data, samples and similar submittals (collectively, "Shop Drawings") to Owner as are required to accomplish the Work with reasonable promptness and in such sequence so as to cause no delay in the Work or in the activities of Owner or other contractors. Owner shall review and approve all Shop Drawings with reasonable promptness. Such review shall be for the sole purpose of verifying that the Shop Drawings comply with the requirements of the Plans and Specifications and are otherwise satisfactory to Owner. Owner’s review and approval of the Shop Drawings is not an endorsement or approval of the safety or design of the Shop Drawings or their compliance with the Laws (Contractor is solely liable for such matters). For purposes of this Agreement, Shop Drawings are drawings, diagrams, schedules and other information specially prepared for the Work. Product data are illustrations, standard schedules, performance charts, instructions, brochures, diagrams and other information furnished by Contractor to illustrate materials or equipment used in connection with the Work. Samples are examples of illustrative material or workmanship and establish standards by which the Work will be evaluated.

(c)    List of Suppliers and Subcontractors. Concurrently with signing this Agreement, Contractor shall submit a signed statement under penalty of perjury to Owner in the form of Exhibit C attached hereto ("Supplier Statement") showing the names and addresses of all persons from whom Contractor expects to request or has requested services, materials, fixtures, or machinery and equipment for the Work. Owner may object to any person or entity identified in the Supplier Statement by written notice to Contractor within five (5) calendar days after Owner receives the Supplier Statement. Owner's failure to notify Contractor within the 5-day period constitutes acceptance of all persons identified in the Supplier Statement, subject to Owner's rights in Paragraph 2(a). If Owner timely objects to any person or entity identified in the Supplier Statement, Contractor shall immediately replace the objectionable person or entity and resubmit an alternate to Owner for approval in accordance with the requirements and time constraints in this Paragraph1(c) until an acceptable alternate is submitted. No additions to or changes of such statement will be made without the Owner's prior written consent.

(d)    Protection of the Work. Contractor shall take all steps necessary to protect the Work from loss or damage by the elements, including fire, flood, rain, wind, hail, sand, cave-ins, collapses, and other hazards, and by the defective or incomplete labor or materials of others, or otherwise. In the event of such loss or damage, Contractor shall promptly replace and restore the Work or any damaged portion thereof at its expense.

(e)    Overtime and Extra Labor and Equipment. Contractor shall, at its expense, work such overtime and engage such extra labor and equipment as may be required to ensure the diligent prosecution and timely completion of the Work.

(f)    Reduction in the Work. Owner may, by written notice to Contractor, reduce the amount of the Work to be completed by Contractor, without any liability to Contractor except to pay for work satisfactorily completed.

(g)    Permitted Delay. Contractor shall be excused for any delay in performance or completion of the Work caused by (1) acts of God, public utilities or public bodies, (2) the elements beyond average weather conditions for the region, (3) modifications requested by Owner, and (4) other matters Contractor could not reasonably anticipate, control or avoid ("Permitted Delays"). In such event, the Completion Date shall be extended for a period equal to the Permitted Delay to the extent that it affects the critical path for performance of the Work, and provided that Contractor gives Owner written notice of the nature of the delay within twenty-four (24) hours after the delay begins, and under no circumstances shall the time of completion be extended to a date which will prevent Owner from completing the entire project within the time that Owner allows for such completion. Contractor shall not be entitled to any additional compensation for any Permitted Delays.

(h)    Material Furnished By Others. In the event the scope of work includes installation of material or equipment furnished by others, it shall be the responsibility of Contractor to examine the items so provided and thereupon unload, lift, handle, store and install the items with such skill and care as to insure a satisfactory installation. Loss or damage due to acts of Contractor shall be charged to the account of Contractor and deducted from monies owed to Contractor under this Agreement.

2. Job Site Conditions.

(a)    Supervision of the Work. Contractor shall supervise and direct the Work at all times. In this regard, Contractor shall (i) enforce strict discipline and good order among its employees (and those of its subcontractors and suppliers), (ii) faithfully and rigidly observe and ensure that its agents, employees, suppliers and subcontractors so observe, all (1) Laws and prudent business practices, and (2) rules of Owner and Contractor in effect at the Job Site from time to time, (iii) not employ or allow at the Job Site any unfit person or anyone not skilled in the work assigned to him and (iv) retain only competent persons on the jobsite. Any person Owner determines to be incompetent, disorderly or otherwise unsatisfactory shall be immediately removed from the Job Site and shall not again be employed at the Job Site or at any other job of Owner. Contractor shall not allow its own employees, its subcontractors' employees, or any other persons associated with the Work to (i) consume alcoholic beverages or illegal substances at the Job Site, (ii) perform any labor or work or traveling to or from the Job Site while under the influence of alcohol or illegal substances, and (iii) bring pets to the Job Site.

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Construction Management Services Agreement

(b)    No Defects. Contractor's commencement of the Work constitutes Contractor's acceptance of the work of other contractors previously completed or commenced, and Contractor's acknowledgment that the Plans and Specifications are free of defects that would adversely affect Contractor's performance of the Work. Contractor waives all claims against Owner with respect thereto. If Contractor discovers a defect in the Plans and Specifications, the Work or in the work of others, Contractor shall immediately notify Owner of such defect.

(c)    Signs. Contractor shall not post any sign at or in the vicinity of the Job Site nor permit any of its suppliers, subcontractors or employees to do so without the prior written approval of the style, size, type, color and location of the sign from Owner and from each applicable governmental agency.

(d)    Integration of the Work. If necessary to integrate the Work with the work of others at the Job Site, Contractor shall (i) cut, fit, patch or plaster the Work so that it will be properly integrated with, receive or be received by, as applicable, the work of others, and (ii) alter the work of others provided (1) the prior written consent of Owner and the other contractors’ whose work will be affected is obtained, and (2) Contractor patches, plasters, paints, repairs and restores, at its expense, such altered work of others.

(e)    Hazardous Material. Contractor shall not permit any Hazardous Material (as defined below) to be located, used, incorporated into the Work or brought onto the Job Site in connection with the Work unless (i) absolutely necessary because no alternative is available, (ii) the precise nature and quantity of the Hazardous Material is specified in writing to Owner, (iii) the prior written approval of Owner is obtained, and (iv) Contractor complies with all Laws and prudent business practices concerning the Hazardous Material required. If Contractor encounters any material it reasonably believes to be Hazardous Material, or becomes aware of any incident involving Hazardous Material at the Job Site, Contractor shall immediately stop the Work in the area so affected and shall immediately report the same to Owner. Contractor shall also immediately notify Owner of any notice Contractor receives concerning the presence or use of Hazardous Material at the Job Site. Contractor shall be liable for all on and off-site disposal or transport of Hazardous Material (and shall sign any manifest for the transport or storage of such Hazardous Material), and for any discharge, release, injury to any person, or injury or damage to any property resulting from use of Hazardous Material in the performance of the Work. Contractor shall, at its expense, cause the removal of the Hazardous Material and remedy any associated problems in accordance with applicable Laws and prudent business practices. "Hazardous Material" shall mean (1) any Hazardous Material as defined under the Comprehensive Environmental Response, Compensation and Liability Act of 1980, the Resource Conservation and Recovery Act, or under any applicable state or local Laws, (2) any substance or matter that results in liability to any person or entity from discharge of or exposure to such substance or matter under any statutory or common law theory, (3) pesticides, asbestos, formaldehyde, polychlorinated biphenyl, solvents, petroleum and motor fuel hydrocarbon material, and (4) any other substance or matter that becomes subject to any federal, state or local agency order or requirement for removal, treatment or remedial action.

To the extent permitted by Law, and without in any way limiting any other indemnity obligation under this Agreement, Contractor shall indemnify, defend (at Contractor's sole cost and with legal counsel acceptable to Owner) and hold Owner and their respective officers, directors, agents, employees, representatives, shareholders, partners, affiliates, successors and assigns harmless, from and against any and all claims, losses, costs or liabilities arising out of an incurred connection with removing or remediating any Hazardous Materials on or about the Job Site or transported on, to, from or about the Job Site by Contractor. This indemnity shall be effective during and after completion of the Work.

(f)    Cleanup, Storage and Safety. Contractor shall maintain the site of the Work and the vicinity thereof, in a clean, neat and safe condition, to Owner's satisfaction and shall (i) store all materials, supplies and equipment in appropriate containers or enclosures that are secure from access by persons not associated with the Work in locations acceptable to Owner, (ii) remove from the Job Site all excess material and debris nightly during the performance of the Work, and all equipment, unused material and supplies and temporary structures upon completion of the Work, (iii) return each fence, barrier and obstruction that is temporarily relocated or displaced by Contractor to its original position and condition immediately after its relocation or displacement is no longer necessary. No temporary structures, including construction trailers or other temporary office facilities, shall be placed or maintained at or in the vicinity of the Job Site without the Owner's prior written approval. Contractor shall take all reasonable safety precautions in the performance of the Work, including compliance with all OSHA requirements. Contractor shall immediately notify Owner of any injury to any employee or agent of Contractor occurring at the Job Site.

3. Examination by Contractor.

(a)    Review of Relevant Matters. Contractor has examined, investigated and familiarized itself with: (i) the Plans and Specifications; (ii) the nature and location of the Job Site; (iii) the conformation of the ground and improvements of other contractors on which the Work is to be performed; (iv) the character, quality and quantity of the materials, equipment and facilities necessary to complete the Work in a good and workmanlike manner; (v) the general and local conditions relating to the Work; and (vi) all other matters that may affect Contractors performance of this Agreement.

(b)    No Reliance on Owner. Contractor enters into this Agreement relying solely on its own examination and investigation of the foregoing matters and not on any representation or information relating to the Job Site or the Work (or the completion thereof) made by Owner or any agent of Owner not expressly contained in this Agreement. Contractor assumes all risk of unknown Job Site conditions and releases Owner from any claim for additional compensation resulting from concealed or unknown and unusual Job Site conditions.

(c)    Satisfaction with Plans. Any clarifications of any inadequacy, inconsistency, omission or conflict in the Plans and Specification or conflict or inconsistency in the Plans and Specifications and the Shop Drawings shall be made by Owner. Contractor's failure to request any such clarification before execution of this Agreement shall not relieve Contractor of its obligation to perform in accordance with Owner's interpretations of the Plans and Specifications thereafter. Contractor shall not be entitled to any additional compensation for performing the Work pursuant to Owner's interpretation of the Plans and Specifications.

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4.    Insurance.

Contractor shall, at its sole expense, maintain in effect at all times during the term of this Agreement and for a period of one year following completion of the Work, from a carrier with a Best rating of A-VIII or better, Workers' Compensation and Employer’s Liability, Commercial General Liability and Commercial Automobile Liability Insurance that covers all risks associated with the performance of the Work, the operation of vehicles, and the behavior of Contractor, its employees, suppliers, subcontractors and any other persons or entities associated with the Work at the request of or on behalf of Contractor. Except as otherwise permitted by Law, such insurance shall include the following:

(a)    Statutory Workers' Compensation Insurance for all employees of Contractor together with Employer’s Liability coverage with minimum policy limits of one million dollars ($1,000,000) for bodily injury by accident/each accident, $1,000,000 bodily injury by disease/each employee, and $1,000,000 bodily injury by disease/policy limit. Coverage must include waiver of subrogation endorsement in favor of Owner.

(b)    Commercial General Liability Insurance (Occurrence Form), including, but not limited to, Products-Completed Operations coverage and Contractual Liability assumed by Contractor with minimum policy limits of two million dollars ($2,000,000) General Aggregate, $2,000,000 Products-Completed Operations Aggregate, $1,000,000 Each Occurrence and $1,000,000 Personal and Advertising Injury. Such coverage shall include an endorsement naming Owner as additional insured stating “Certificate Holder is named as Additional Insured per ACORD 25 Form (or equivalent form), an endorsement providing that the insurance afforded under Contractor’s policy is primary insurance with respect to Owner, and that any other insurance maintained by Owner is excess and non-contributory. Coverage must include a Waiver of Subrogation endorsement.

(c)    Commercial Automobile Liability with minimum policy limits of $1,000,000 Combined Single Limit per accident for bodily injury and property damage, including coverage for owned, hired or non-owned vehicles operated by or on behalf of Contractor and used in connection with this Agreement. Owner will be named as additional insured.

(d)    In addition to the above requirements, Owner reserves the right to require Umbrella or Excess Liability coverage. Such additional requirements, if any, are attached hereto as Exhibit E.

5.    Withholding Payment.

(a)    Reasons for Withholding. Owner may withhold payments otherwise due to Contractor under this Agreement for any of the following reasons:

(i)    Omission of any Work required by this Agreement or Contractor's failure to cure defective or damaged Work;

(ii)    Failure to submit to Owner all information and waivers and releases required under this Agreement;

(iii)    Mechanics' liens, materialmen's liens, stop notices or bonded claims are filed or recorded or reasonable evidence indicating the probable filing or recording of such liens, notices or claims by Contractor or its suppliers or subcontractors, in which case Owner may withhold (1) in the case of a lien, notice or claim by Contractor, the amount claimed in the lien, notice or claim, and (2) in the case of a lien, notice or claim by Contractor's suppliers or subcontractors, One Hundred Fifty Percent (150%) of the amount sought;

(iv)    Contractor's failure to make payments properly to subcontractors, suppliers, materialmen, laborers, or other persons entitled to file a mechanics' lien, materialmen's lien, stop notice or claim as well as to union fringe benefit trust funds (to the extent required);

(v)    The existence of reasonable doubt by Owner that the Work will be completed for the balance of the Contract Price then unpaid, unless Contractor deposits with Owner funds in the amount of such suspected deficiency or performs a sufficient portion of the remaining Work to be performed at Contractor's sole cost so that such portion of the Contract Price then remaining unpaid is determined by Owner to be sufficient to complete the Work;

(vi)    Contractor's failure to complete the Work, or any reasonable indication that the Work will not be completed within the time required in this Agreement;

(vii)    Contractor's failure to construct, install or perform the items of the Work as required in this Agreement, or any reasonable indication that Contractor will be unable to perform the terms of the Work as required in this Agreement; and

(viii)    Any other grounds for withholding payment permitted by the Laws, or as otherwise permitted by this Agreement.

(b)    Payment of Withheld Amount. Whenever the grounds giving rise to the above withholding have been removed, Owner shall pay Contractor the amount withheld less any expenses or damages Owner incurs as a result of the withholding, the cause of the withholding or the removal of the cause of the withholding. If any of Contractor's laborers, subcontractors, suppliers or materialmen are not paid, Owner may pay such persons directly. Any payment Owner makes directly to any of Contractor's laborers, subcontractors, suppliers or materialmen or for their benefit shall be deemed payment to Contractor and shall be credited against the Contract Price.

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6.    Changes in the Work.

(a)    Change Order Request. Owner may, at any time and from time to time, order additions, deletions or other modifications to the Work (a "Work Change") by submitting a written change order request to Contractor ("Change Order Request"). Owner's Designated Representative is the only person authorized to sign Change Order Requests. Contractor shall not be compensated for any Work Change performed by Contractor at the request of anyone other than Owner's Designated Representative pursuant to a written Change Order Request. Upon receipt of a duly authorized Change Order Request, Contractor shall perform any extra work, make any substitutions in the Work, or omit any portion of the Work required thereby and shall not thereafter perform any work or order materials that are inconsistent with such Change Order Request. Contractor or anyone acting for or on behalf of Contractor shall not be entitled to any additional compensation for any labor, materials or equipment performed or ordered after receipt of a duly authorized Change Order Request if the same are not consistent with the Change Order Request. Contractor shall (i) maintain records of all duly authorized modifications made to the Work, (ii) notify Owner's Representative of each such duly authorized modification immediately upon making the modification, and (iii) show such duly authorized modifications on a copy of the Plans and Specifications.

(b)    Change Order Statement. Upon receipt of a Change Order Request, Contractor shall promptly furnish to Owner a statement in the form of Exhibit D ("Change Order Statement") setting forth in detail, with a labor and material breakdown by trades and work classifications, (i) Contractor's estimate of any changes in the Contract Price attributable to the Change Order Request, and (ii) any proposed adjustment of the Completion Date resulting from the Change Order Request. Such Change Order Statement shall be delivered to Owner within five (5) business day after Contractor's receipt of a Change Order Request. Contractor shall have no claim for additional compensation as a result of the Change Order Request unless a Change Order Statement is delivered to Owner as required by this paragraph.

(c)     Adjustments to Contract Price.

(i)    Upon receipt of a Change Order Statement, Owner shall determine the adjustment, if any, to the Contract Price. Contractor shall be deemed to have accepted the adjustment or nonadjustment to the Contract Price if Owner does not receive written objection notice from Contractor within five (5) business days after Contractor's receipt of notice of the amount of the adjustment or nonadjustment to the Contract Price from Owner. If Contractor timely delivers a written objection notice to Owner, the adjustment shall be determined by applying one of the following standards: (1) by reference to Unit Prices or (2) in the case of additions to the Work, cost of performing the additional work plus fifteen percent (15%), and in the case of deletions from the Work, an amount equal to the savings in cost plus ten percent (10%). The Work shall not be delayed or interrupted during resolution of the adjustment or nonadjustment to the Contract Price.

(ii)    Alternatively, and in Owner's sole discretion, Owner may ask Contractor to submit bid prices for the modifications in the Work. Such bid prices shall be consistent with the contract prices for the Plans and Specification covered by this Agreement. If any bid price is not consistent, Owner may accept bids from other contractors. If the same are lower than that of Contractor, Owner will afford Contractor the opportunity to adjust its bid accordingly. If Contractor does not agree to adjust its bid accordingly within five (5) business days, Owner may, at its option, renegotiate or terminate this Agreement in its entirety.

(d)     Contractor Initiated Changes. If the Contractor initiates a substitution, deviation or change in the work which affects the scope ofwork or the expense of other trades, Contractor shall be liable for the expense thereof, and any incidental extra work created by the change to the Owner’s work.

7.    Warranty, Testing and Correction.

(a)    Warranty of Materials and Workmanship. Notwithstanding that any labor, equipment, or material furnished or installed by Contractor has been approved or accepted by Owner or any governmental agency, Contractor expressly warrants that all labor, material, equipment, and fixtures furnished or installed by it (or by its subcontractors or materialmen) hereunder shall be of good quality, free of any faults and defects including patent, latent or developed defects, and shall be completed as required in this Agreement. This warranty shall survive for so long as Owner may be held liable for the matters warranted hereunder (in their respective roles as contractor, builder or seller) but in no event less than one (1) year after the date of completion and final acceptance of the Work. The above warranty shall not limit or affect other warranties or guarantees expressly or impliedly made by Contractor or any of its subcontractors or materialmen and shall not limit or affect any remedies concerning express or implied warranties or negligent or willful acts or omissions of Contractor or any of its subcontractors or materialmen. The above warranty shall be for the benefit of Owner and its respective successors and assigns.

(b)    Testing and Inspection of the Work. Contractor shall, at its expense, obtain all inspections and approvals required by any Law or other guidelines of any public authority having jurisdiction over the Work. Contractor shall furnish Owner with originals of all certificates of inspection, testing and approval. Owner shall not be responsible for reviewing, nor shall its review and acceptance of the Work or any part thereof be deemed an endorsement or approval of, the safety or design of the Work or any part thereof or a determination of conformance with the Laws; provided, however, that Owner may test, inspect and approve the Work or cause the same to be accomplished without notice to Contractor. Contractor shall make all portions of the Work available for inspection, testing and approval by Owner and all applicable governmental authorities. Contractor shall notify Owner in writing of any inspection or testing that must be performed within a certain time period so as not to require modification of the Work or the work of others in connection with the inspection, testing and approval. If Contractor fails to so notify Owner, Contractor shall assume full responsibility for and costs of the uncovering of the Work or the work of others to allow the required inspection, testing and approval and the restoration of the Work and the work of others so affected.

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Construction Management Services Agreement

(c)    Correction and Removal of Defective Work. Contractor shall, at its own expense, provide all materials and labor to correct any defects in the Work, materials or equipment supplied by Contractor (together with any damage to all finishes, fixtures, equipment and personal property damaged as a result of such defects) in a manner reasonably satisfactory to Owner. Contractor shall begin all corrective work necessary to cure any defect in the Work, materials or equipment supplied by Contractor within three (3) calendar days after receiving written notice from Owner; provided, however, that any defect related to plumbing, heating, electrical, and roofing shall be completed immediately after the notice to repair if Contractor is performing such type of work or supplying appurtenant equipment (e.g., HVAC). Contractor shall diligently prosecute all corrective work to completion. Contractor shall report to Owner in writing all action Contractor took to remedy the defective Work, materials or equipment and shall obtain the Owner's signature acknowledging its satisfaction of the corrective work. If any defect is not satisfactorily remedied in the above specified time, or if Owner elects (in its sole discretion) to remedy the defect, Owner may, at its election remedy such defect. If Owner remedies a defect for Contractor, Contractor shall pay to Owner the costs of all corrective work plus interest at the Default Rate from the date the corrective work is completed until the correction costs are paid by Contractor.

8.    Indemnification, Release and Limitation of Liability.

(a)    Indemnification. Contractor shall indemnify, defend (at Contractor's sole cost and with legal counsel acceptable to Owner) and hold the Owner, Construction Manager and their partners, shareholders, directors, officers, agents and employees (collectively, the "Indemnified Parties"), harmless from all losses of profit, obligations, liabilities, claims, demands, damages, debts, expenses, and causes of action including, without limitation, (i) attorney fees, (ii) liabilities or damages incurred by Owner as a result of damage to property owned by Owner or others, (iii) bodily injury, (iv) death, and (v) any claims against or expenses incurred by Owner as a result of Owner's failure to timely and fully perform its obligations under any contract with a purchaser of real property from Owner, or incurred by Owner as a result of the failure of Owner to timely and fully perform its obligations under any contract with a contractor or supplier which arises from or relates to (1) defects in or inferiority of the materials, design or workmanship of the Work, (2) acts and omissions of Contractor or of any person or entity acting on Contractor's behalf, in connection with the Work, (3) Contractor's failure to fulfill its obligations under this Agreement in strict accordance with its terms, including Contractor's failure to perform any portion of the Work, (4) Contractor's breach of any representation or warranty given in this Agreement or elsewhere or provided for by law, (5) the behavior and activities of Contractor, its employees, agents, subcontractors, materialmen, suppliers, and any other persons or entities associated with the performance of the Work, (6) violation or alleged violation of any Laws by Contractor or by any of Contractor's directors, officers, employees, agents, subcontractors or suppliers, (7) any unpatented or patented inventions, article or appliance manufactured or used by or on behalf of Contractor in connection with the performance of the Work, (8) any use or misuse of the Job Site or any portion thereof or improvement thereon by Contractor or any of its agents, employees, subcontractors or suppliers, or (9) any and all claims of lien and liens arising out of or in any manner directly or indirectly related to the Work, (provided that at the time such claim of lien or liens is brought or filed, Contractor has been paid all sums due to Contractor for the work performed to the date of such claim of lien or liens). To the extent permitted by law, this indemnification shall apply regardless of any active or passive negligent act or omission of the Indemnified Parties, but shall not include any injury or harm that is caused exclusively by the gross negligence or willful misconduct of the Indemnified Parties or any of them. This indemnification shall be effective during and after completion of the Work.

(b)    Release. Contractor waives and releases Owner from all claims, demands, expenses, debts, damages, and liabilities, including, lost wages, pain and suffering, permanent or temporary disability, medical and hospital expenses, attorney fees, and costs of repair and replacement of Contractor's property, which arises from or relates to (a) the physical condition, security or maintenance of the Job Site and the vicinity thereof; (b) vandalism, theft, or any other willful or negligent act by any person or entity at the Job Site or in the vicinity thereof, including, the operation of a motor vehicle; or (c) the activities, omissions or behavior, whether or not negligent, of suppliers and other contractors and subcontractors, whose services have been or are being utilized by or on behalf of Owner, as well as the activities, omissions or behavior of their agents and employees, whether or not actively or passively negligent. Nothing in this subparagraph (b) shall release any of the Indemnified Parties from liability for their exclusive willful or grossly negligent acts.

9.    Trade Unions and Employees.

(a)    Labor Relations/Contractor. Contractor agrees to comply with all of the terms and conditions of labor agreements governing the work insofar as Contractor may lawfully do so, and in particular agrees to comply with the terms and provisions of said agreements setting forth the jurisdiction and the scope of work claimed by each of such crafts and the procedure contained therein for resolution of jurisdictional disputes. In the absence of any such procedure, or if such procedure fails to promptly resolve the jurisdictional dispute, Contractor agrees, at his own cost and expense, upon request of Owner to take any and all lawful steps to secure a binding and final determination of said jurisdictional dispute by the National Labor Relations Board. Nothing in this Agreement shall relieve Contractor of its obligation to provide adequate staff to perform the Work in the manner prescribed by this Agreement. Immediately upon receipt of Owner's oral or written request, Contractor shall furnish Owner with a copy of (i) each collective bargaining agreement or other labor agreement governing compensation of Contractor's employees and any other person associated with the Work, (ii) Contractor's payroll records demonstrating that Contractor is not delinquent concerning payment of its employees, and (iii) Contractor's records demonstrating that Contractor is not delinquent payments to health and welfare, pension, vacation, apprenticeship, or other union fringe benefit trust funds.

(b)    Labor Relations/Contractor's Agents. Within five (5) business days of receipt of a written request from Owner, Contractor shall obtain and furnish Owner with (i) statements from each union fringe benefit trust fund established as a result of every collective bargaining agreement or other labor agreement applicable to the Work, including the collective bargaining agreement or other labor agreement governing the employees of Contractor's subcontractors, (ii) a copy of each collective bargaining agreement or other labor agreement governing compensation of the employees of Contractor's subcontractors, (iii) each such subcontractor's payroll records demonstrating that such subcontractor is not delinquent concerning payments of its employees, and (iv) each such subcontractor's records demonstrating that such subcontractor is not delinquent with respect to payments to health, welfare, pension, vacation, apprenticeship, or other union fringe benefit trust funds, in all cases, to the extent required or permitted by law.

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Construction Management Services Agreement

(c)    Labor Relations/Breach. If Contractor or any of its subcontractors are or become, during the term of this Agreement, delinquent in the payment to the appropriate health, welfare pension, vacation or apprenticeship fund or funds (and regardless of whether the employees involved are employed on the Job Site or elsewhere), Owner may (i) deduct the full amount of such delinquencies from payments to be made to Contractor hereunder and without recourse by Contractor, (ii) pay such amount so deducted without inquiry as to the correctness of the amount or the validity of such claimed delinquencies, (1) directly to the appropriate fund or funds, or (2) by joint check payable to Contractor and the appropriate fund or funds.

10.    Liens and Stop Notices. Contractor shall pay when due, all claims asserted and debts in favor of persons or entities who furnish labor, material, services, fixtures, or equipment applied to or utilized in the performance of the Work. Contractor shall not cause or permit (a) the recordation of any claim of lien on Owner's property, (b) the imposition of any stop notice on funds held by a lender (a "Project Lender") that are intended to be paid to Owner pursuant to an agreement to finance completion in whole or in part of the project at the Job Site, and (c) the garnishment or attachment of funds held by Owner, by promptly satisfying all claims and debts asserted against Contractor or Contractor's subcontractors by such persons or entities. In addition, Contractor shall use all possible means to cause (a) Owner's property to be released from all claims of lien, (b) all funds withheld from Owner on account of stop notices to be released from the effect of such notices, and (c) all suits to be dismissed against Owner within fourteen (14) days after each such claim of lien has been recorded against Owner's property, each such stop notice has been served upon a Project Lender and each such suit is brought against Owner, Contractor shall not apply any payments made by Owner to satisfy claims of suppliers, materialmen, subcontractors, utilities, or insurance companies unless such claims have arisen as a result of the work described in the Invoice being paid by Owner. Contractor agrees within fourteen (14) days after written demand to cause the effect of any suit or lien to be removed from the premises, and in the event Contractor shall fail to do so, Owner is authorized to use whatever means in its discretion it may deem appropriate to cause said lien or suit to be removed or dismissed and the cost thereof, together with reasonable attorney’s fees, shall be immediately due and payable to Owner by Contractor.

11.    Bonding.

(a)    Faithful Performance Bond. Owner may at any time require Contractor to furnish a faithful performance bond issued in a form and by a surety company acceptable to Owner securing the Contractor's faithful performance of its obligations under this Agreement, in an amount not less than the value of the Work remaining to be performed. Upon Owner's request, Contractor shall indemnify the surety or post adequate collateral, or both, to secure any indemnity to any surety. Owner shall pay the bond premium amount up to a maximum of one percent (1%) of the Contract Price.

(b)    Labor and Material Payment Bond. Owner may at any time require Contractor to furnish a labor and material payment bond issued in a form and by a surety company acceptable to Owner, securing Contractor's payment of all monies owed to its employees, subcontractors, suppliers and any other persons or entities who may claim a mechanics' lien or materialmen's lien upon the Job Site. Upon Owner's request, Contractor shall indemnify the surety or post adequate collateral, or both, to secure any indemnity to any surety. The labor and material payment bond shall be an amount the lesser of one hundred and fifty percent (150%) of the Contract Price, or the maximum allowed by Law.

12.    Default and Remedies.

(a)    Failure to Perform. Contractor's failure to comply with any of the provisions of this Agreement or in the event that Contractor at any time refuses, neglects or fails to supply a sufficient number of properly skilled workmen or a sufficient quantity of materials of proper quality, (ii) make prompt payment to his materialmen and or laborers or fails in any respect to properly and diligently prosecute the work covered by this Agreement, or becomes delinquent with respect to his materialmen and or payment required to be made to any Health and Welfare, Pension, Vacation, Apprenticeship or other employee benefit program or trust, (iii) fulfill any of the provisions these General Conditions by him to be performed, or otherwise fails to perform fully any and all of the agreements herein contained, or the occurrence of any of the events set forth in Sections 12(b)(i)-(iv) below, shall constitute a default by Contractor, and Owner may, at its sole election and without notice to Contractor, take any one or more of the following remedial actions, none of which (other than subparagraph (iv) of this Paragraph 12) shall be deemed exclusive of any other:

(i)    Any remedy provided elsewhere in this Agreement.

(ii)    If Contractor fails to remedy any default within forty-eight (48) hours after receipt of written notice at the address appearing on the signature page of this Agreement or such longer period as is reasonably necessary if such breach cannot be cured within such forty-eight (48) hour time period (provided Contractor commences to cure immediately and thereafter diligently prosecutes such cure to completion), Owner may elect to terminate the Contractor's right to perform the Work in whole or in part without liability to Contractor for any Work thereafter performed by Owner or anyone else. In such event, Owner may: (1) complete the Work or correct any failures in the Work and procure such equipment, labor and materials as is necessary therefor, and in so doing use any of Contractor's equipment and consume any materials on the Job Site until it is completed, and Contractor shall pay Owner the cost of such completion or correction, plus fifteen percent (15%) of such costs to compensate Owner for overhead and administration; (2) sue for and recover from Contractor the reasonable value of all or a portion of the cost to complete the performance of the Work; (3) sue for and recover from Contractor all damages arising out of such default, including but not limited to, loss of profits and recovery of any and all costs and expenses whatsoever directly or indirectly related to such default, or (4) pursue all alternatives under (1), (2) and (3). If Owner completes the Work, Contractor shall receive no further payment until the Work is completed. When the Work is completed, Owner shall pay Contractor the amount owing on the Contract Price less all of the costs Owner incurred in completing the Work, the fifteen percent (15%) markup described above and any attorney fees incurred by Owner as a result of such breach.

(iii)    Owner may withhold payment of any monies due until the default has been cured.

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Construction Management Services Agreement

(iv)    Contractor acknowledges that if Contractor breaches this Agreement by delay in commencing or completing the Work (for any reason other than a Permitted Delay), the damages Owner would suffer ("Delay Damages") would include, among other items, losses, payments, liabilities and damages resulting from additional direct costs (including such items as Job Site payroll, cost of supervision, cost of site office facilities, Job Site telephone and rental value of any equipment not being utilized in connection with the other Work being performed at the Job Site), additional overhead expenses of the main office (including such items as salaries of executives and all other personnel, rent, and utilities), increased labor and material costs, and damages Owner may be required to pay to other contractors and third parties. Contractor also acknowledges that such Delay Damages would be difficult and impracticable to ascertain. Therefore, for any day Contractor fails to commence or complete the Work required Contractor shall pay Owner, upon demand, liquidated damages of $______ per day for each day of delay. The parties agree that the liquidated damages amount is a fair and reasonable approximation of the Delay Damages and shall be Owner's sole and exclusive remedy on account of any such delay. Such liquidated damages may be deducted from amounts otherwise due Contractor. If the liquidated damages are not paid upon Owner's demand, and the amounts otherwise due Contractor by Owner are less than the amount of the liquidated damages, the difference shall bear interest from the date of demand at the Default Rate, until paid in full by Contractor.

(v)    Owner may set off the costs to complete the Work against monies due to Contractor under any other contract between Owner (or any entity owned or controlled by the Owner) and Contractor (or any entity owned or controlled by Contractor), whether such contract is in effect before or after this Agreement.

(vi)    Owner may pay any sums to any such persons, firms, itself or other entities to whom Contractor is obligated and to charge such sums paid to the account of Contractor without recourse by Contractor and without inquiry as to the validity of such obligation and the correctness of the amount thereof. If such sum is greater than the amount then due Contractor, the excess shall be a debt due from Contractor to Owner and shall bear interest at the Default Rate from the date due until paid.

(vii)    Any and all such other remedies as may be provided at law or in equity.

(b)    Termination for Insolvency. Owner may terminate Contractor's right to do the Work by giving Contractor at least twenty-four (24) hours written notice at any time after the occurrence of any of the following events (i) the filing of a petition for relief under the Bankruptcy Code or the institution of any other insolvency proceedings by, against, or on behalf of Contractor, (ii) the appointment of a receiver for Contractor, (iii) the death, dissolution or liquidation of Contractor, (iv) the transfer to others of more than twenty-five (25%) of the assets or ownership interest of Contractor, and (v) any act of insolvency by Contractor. If an order for relief is entered under the Bankruptcy Code for the benefit of Contractor, Owner may terminate Contractor's right to do the Work by giving twenty-four (24) hours’ notice to Contractor, its trustee and its surety, if any, unless Contractor, the surety or its trustee: (1) immediately cures or takes action to cure all defaults of Contractor, (2) provides Owner adequate assurance of performance under this Agreement, (3) makes Owner whole for all loss suffered by Owner as a result of Contractor's default, and (4) assumes all obligations of Contractor within statutory time limits.

(c)    Termination by Owner. Owner may also terminate this Agreement at any time before Contractor begins the Work and notifies Owner in writing of such commencement if (1) Owner sells the property on which the Work is being performed or (2) the economic climate does not warrant proceeding with the project of which the Work is a part. In such circumstance, Contractor shall be entitled to receive that portion of the Contract Price earned by Contractor for Work performed to the satisfaction of Owner less any payments made before the date this Agreement is terminated. Contractor shall not be entitled to any additional compensation or damages as a result of termination of this Agreement pursuant to this Paragraph 12(c).

(d)    Assignment of Contracts upon Termination. If Contractor's right to perform the Work is terminated, any agreement of Contractor relating to the Work with third parties shall, at the election of Owner, be assigned to Owner without the need for further documentation.

(e)    Dispute Resolution. Any dispute arising out of or relating to this Agreement shall be submitted to mediation by a neutral mediator with the parties equally sharing all costs of the mediation. Failure to mediate shall result in a forfeiture of any rights to attorneys' fees and costs as set forth below. Any dispute arising out of or relating to this Agreement, after having been submitted to mediation, shall be settled by arbitration in accordance with the rules of the American Arbitration Association. The parties shall equally share all initial costs of arbitration. The prevailing party shall be entitled to reimbursement of attorneys' fees and costs as set forth below. All decisions of the arbitrator shall be final, binding and conclusive on all parties. Judgment may be entered upon any such decision in accordance with applicable Law in any court having jurisdiction thereof. The venue for mediation and/or arbitration for any dispute arising out of or relating to this Agreement shall be in the state where the Job Site is located.

13. Contractor Representations. Contractor represents and warrants the following to Owner:

(a)    Authority. Contractor is duly organized, validly existing and in good standing under the laws of the state in which it is organized and is duly authorized to operate in the state where the Job Site is located. Contractor has all necessary powers to carry on its business. Contractor has the right, power, legal capacity and authority to enter into this Agreement. This Agreement and each document or instrument to be executed by Contractor pursuant to this Agreement, are and shall be valid, legally binding obligations of and enforceable against Contractor in accordance with their terms. Contractor has taken all necessary action to authorize the execution, delivery and performance of this Agreement. No further, approval or authority of any nature or other action by any person or entity is required in connection with the execution and delivery of this Agreement by Contractor, and the performance of the Work by Contractor.

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Construction Management Services Agreement

(b)    Litigation. Except as disclosed to Owner in writing concurrently with the execution of this Agreement by Contractor, there is no suit, action, arbitration, or legal administrative or other proceeding, or non-insured workers' compensation claim or governmental investigation pending or to its best knowledge threatened after doing diligent inquiry, against or affecting Contractor. Contractor is not in default concerning any order, writ, injunction or decree of any federal, state, local or foreign court, department, agency or instrumentality. No attachments, execution proceedings, assignments for the benefit of creditors and insolvency, bankruptcy, reorganization or other proceedings are pending or threatened against Contractor or to its knowledge, any general partners of Contractor nor are any of such proceedings contemplated.

(c)    Financial Capability. Contractor is and will remain financially solvent and financially capable of discharging its obligations under this Agreement.

(d)    Skill. Contractor and everyone acting on its behalf in connection with the Work is skilled in performing the Work and in the means, methods, techniques, sequences and procedures related to completing the Work in the most expeditious and economical manner consistent with the interest of Owner. Contractor is familiar with all manufacturer's instructions and specifications concerning the Work and the application, connection, erection and use of all equipment, materials and supplies incorporated into or that are a part of the Work. Contractor is also familiar with all Laws applicable to the Work, has carefully studied the Work requirements and the Plans and Specifications, has made a thorough investigation and inspection of the physical condition of the Job Site and will remain familiar with all the physical and economic risks associated with the performance of the Work and assumes all such risks.

(e)    Licenses. Contractor has and shall maintain all licenses and permits necessary to perform the Work and all other obligations of Contractor under this Agreement.

(f)    Agreement. Contractor has read and has familiarized itself with all of the provisions of this Agreement on its own and without relying on any information obtained from Owner.

(g)    Safety. Contractor shall, at its own expense,comply with all specific safety requirements promulgated by any government authority, including, without limitation, the requirements of the Occupational Safety Health Act of 1970, the Construction Safety Act of 1969, the California Labor Code, all successions and amendments to the foregoing, and all standards and regulations relating to occupational health and safety which have been or shall be promulgated by the parties or agencies which administer the same. Contractor shall have and exercise full responsibility for compliance hereunder by itself, its agents, employees, materialmen, and subcontractors with respect to its portion of the work on this Project: and shall directly receive, respond to, defend and be responsible for any citation, assessment, fine, or penalty by reason of Contractor’s failure or failure of Contractor’s agents, employees, materialmen, and subcontractors to so comply. Contractor shall indemnify and hold harmless Owner from and against any liability, loss, damage, cost, claims, awards, judgments, fines, expenses, including litigation expense, reasonable attorney’s fees, claims or liability for harm to persons or property, expenses incurred pursuant to or attendant to any hearing or meeting and any other applicable cost which may be incurred by Owner resulting from Contractor’s failure to fulfill covenants set forth in this paragraph.

In the event Contractor fails to comply with any citation issued by the Secretary of Labor or of any other body responsible for the administration and/or enforcement of any statute, regulation or ordinance relating to occupational health and safety within the period specified in any such citation or order, Owner may, in his discretion, exercise the rights and remedies provided him under the terms of this Agreement, including, but not limited to, the rights and remedies provided.

14.    Miscellaneous.

(a)    Nondiscrimination. Contractor shall comply with all nondiscrimination Laws to the extent applicable to Contractor's performance of this Agreement.

(b)    Joint Payment. Owner may, at its election and without the Contractor's consent, make any payment due hereunder jointly to Contractor, any of its subcontractors, materialmen, suppliers, and any other persons or entities who may claim a mechanics' lien or materialmen's lien as a result of the Work.

(c)    Construction. Whenever used in this Agreement, the singular shall include the plural and the plural the singular. The word "including" shall mean "including without limitation." The word “materialman” shall have the same meaning as the term “material supplier”.

(d)    No Waiver. Owner's express or implied waiver of any provision of this Agreement shall not constitute a future or further waiver by Owner of the same or other provision of this Agreement. Delay in the enforcement of any remedy, or in the exercise of any right, shall not be a waiver.

(e)    Entire Agreement. This Agreement and all of the addenda, attachments, schedules and exhibits hereto, which are hereby incorporated into this Agreement by this reference, are the entire agreement between the parties, and supersede all previous communications, representations or agreements, either written or oral, between the parties hereto concerning the subject matter hereof. Any changes to this Agreement (including any change to any of the attachments hereto) must be in writing to be effective and signed by each party's respective Designated Representatives.

(f)    Counterparts; Facsimile Signatures. This Agreement may be executed in counterparts. Each counterpart is an original, and all counterparts together shall constitute one instrument.This Agreement may be executed by facsimile signature by any party and such signature will be deemed binding for all purposes hereof without delivery of an original signature being thereafter required. In addition, any party may effect the execution and delivery of this Agreement by signing the same and sending a copy thereof to the other party or its attorney by facsimile transmission. Such facsimile document, including the signatures thereon, shall be treated in all respects as an original instrument bearing an original signature.

(g)    Severability. If any portion of this Agreement is declared by court of competent jurisdiction to be invalid or unenforceable, such portion shall be deemed severed from this Agreement, and the remaining portions shall remain in full force.

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Construction Management Services Agreement

(h)    Assignment. Owner may, assign all or part of this Agreement at any time. Contractor may not assign or further subcontract any portion of the Work or its obligations hereunder or assign, transfer, convey or otherwise dispose of this Agreement or its right, title or interest in or to this Agreement or any part hereof without the prior written consent of Owner and any sureties under bonds or guaranties made in favor of Owner concerning the Work. Owner's consent to an assignment shall not release Contractor from (1) any obligation otherwise imposed upon Contractor by this Agreement, (2) the consequences of a breach of this Agreement by Contractor's assignee or Contractor, or (3) the failure of Contractor's assignee or Contractor to satisfy all of the warranties made by Contractor in this Agreement. If Contractor is a corporation, a change in ownership of twenty-five percent (25%) or more of its stock, whether in one or more transactions, shall constitute an assignment ofthe Work. Contractor acknowledges the reasonableness of this provision due to the personal service nature of this Agreement.

(i)    Title to Improvements. Title to all materials, fixtures, Plans and Specifications and Shop Drawings shall be deemed vested in Owner when and as the same shall have been installed, affixed permanently to the realty or otherwise delivered to Owner. Owner shall not be liable for loss or damage to any material or fixtures as to which title is not then vested in Owner at the time of such loss or damage whether such material or fixtures are on the Job Site, in transit, under the control of Owner, or otherwise.

(j)    Time. Time is of the essence of this Agreement. It shall be Contractor’s obligation to conform to Owner’s progress schedule, subject to Owner’s modification, which is incorporated herein by this reference and made a part hereof. Contractor shall prepare and obtain approval as required by the Plans and Specifications for all shop drawings, details, samples, and do all other things necessary and incidental to the prosecution of his work in conformance with the said progress schedule. If in the opinion of the Owner the Contractor falls behind in the progress of the Work, the Owner may direct the Contractor to take such steps as the Owner deems necessary to improve the rate of progress, including, without limitation, requiring the Contractor to increase the number of shifts, personnel, overtime operations, days of work, equipment, amount of plant, or other remedies and to submit to Owner for approval an outline schedule demonstrating the manner in which the required rate of progress will be regained, without additional costs to the Owner. Owner may require Contractor to prosecute, in preference to other parts of the Work, such part or parts if the work as Owner may specify.

(k)    Attorney Fees. If either party institutes any action to enforce or interpret any provision of this Agreement the prevailing party shall be entitled to recover from the other party all costs, including costs of litigation and reasonable attorney fees and expert or consultant fees.

(l)    Independent Contractor. Contractor is an independent contractor and shall, at its sole expense, and without increase in the Contract Price, comply with all Laws and pay all manufacturers' sales, use and processing taxes and all federal, state and local taxes.

(m)    Survival of Obligations. Any indemnity, guaranty, representation or warranty given by Contractor to Owner in this Agreement shall survive the expiration or termination of this Agreement.

(n)    No Third Party Beneficiaries. This Agreement is between Owner and Contractor. Except as expressly set forth herein, no other person or entity is intended to be, nor shall be, benefited by the terms hereof, whether as a third party beneficiary or otherwise.

(o)    Default Rate. As used herein, the term "Default Rate" means the maximum legal rate which may be charged at the time.

_______________________________________________ OWNER ____________________________________________________ CONTRACTOR

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Construction Management Services Agreement

EXHIBITA

TO

AGREEMENT FOR CONTRACTOR SERVICES

SUBCONTRACTORS AND SUPPLIER’S CONDITIONAL WAIVER AND RELEASE

UPON PROGRESS PAYMENT

FORM OF SUBCONTRACTOR'S AND SUPPLIER’S CERTIFIED STATEMENT

TO ACCOMPANY INVOICE

_________________________

CONDITIONAL WAIVER AND RELEASE ON

PROGRESS PAYMENT

NOTICE: THIS DOCUMENT WAIVES THE CLAIMANT’S LIEN, STOP PAYMENT NOTICE, AND PAYMENT BOND RIGHTS EFFECTIVE ON RECEIPT OF PAYMENT. A PERSON SHOULD NOT RELY ON THIS DOCUMENT UNLESS SATISFIED THAT THE CLAIMANT HAS RECEIVED PAYMENT.

Identifying Information:

Name of Claimant:________________________________________________________________________

Name of Customer:_______________________________________________________________________

Job Location:____________________________________________________________________________

Owner:_________________________________________________________________________________

Through Date:____________________________________________________________________________

Conditional Waiver and Release

This document waives and releases lien, stop payment notice, and payment bond rights the claimant has for labor and service provided, and equipment and material delivered, to the customer on this job through the Through Date of this document. Rights based upon labor or service provided, or equipment or material delivered, pursuant to a written change order that has been fully executed by the parties prior to the date that this document is signed by the claimant, are waived and released by this document, unless listed as an Exception below. This document is effective only on the claimant’s receipt of payment from the financial institution on which the following check is drawn:

Maker of Check:______________________________________________________________________

Amount of Check$____________________________________________________________________

Check Payable to: ____________________________________________________________________

Exceptions

This document does not affect any of the following:

(1) Retentions.

(2) Extras for which the claimant has not received payment.

(3) The following progress payments for which the claimant has previously given a conditional waiver and release but has not received payment:

16

Construction Management Services Agreement

Date(s) of waiver and release: _______________________________________________________

Amount(s) of unpaid progress payment(s): $ _____________________________________________

(4) Contract rights, including:

(A)    a right based on rescission, abandonment, or breach of contract, and

(B)    the right to recover compensation for work not compensated by the payment.

SIGNATURE

Claimant’s Signature: ___________________________________________

Claimant’s Title: _______________________________________________

Date of Signature: ______________________________________________

NOTE: This form is to be used by a party who applies for a progress payment when the progress check has not yet cleared the bank. This release only becomes effective when the check, properly endorsed, has cleared the bank.

17

Construction Management Services Agreement

EXHIBIT B

TO

AGREEMENT FOR CONTRACTOR SERVICES

SUBCONTRACTORS AND SUPPLIER’S CONDITIONAL WAIVER AND RELEASE

UPON FINAL PAYMENT

FORM OF SUBCONTRACTORS AND SUPPLIER'S CERTIFIED STATEMENT

TO ACCOMPANY INVOICE

_____________________________CONDITIONAL WAIVER AND RELEASE ON

FINAL PAYMENT

NOTICE: THIS DOCUMENT WAIVES THE CLAIMANT’S LIEN, STOP PAYMENT NOTICE, AND PAYMENT BOND RIGHTS EFFECTIVE ON RECEIPT OF PAYMENT. A PERSON SHOULD NOT RELY ON THIS DOCUMENT UNLESS SATISFIED THAT THE CLAIMANT HAS RECEIVED PAYMENT.

Identifying Information:

Name of Claimant:________________________________________________________________________

Name of Customer:_______________________________________________________________________

Job Location:____________________________________________________________________________

Owner:_________________________________________________________________________________

Conditional Waiver and Release

This document waives and releases lien, stop payment notice, and payment bond rights the claimant has for labor and service provided, and equipment and material delivered, to the customer on this job. Rights based upon labor or service provided, or equipment or material delivered, pursuant to a written change order that has been fully executed by the parties prior to the date that this document is signed by the claimant, are waived and released by this document, unless listed as an Exception below. This document is effective only on the claimant’s receipt of payment from the financial institution on which the following check is drawn:

Maker of Check:______________________________________________________________________

Amount of Check$____________________________________________________________________

Check Payable to: ____________________________________________________________________

Exceptions

This document does not affect any of the following:

Disputed claims for extras in the amount of: $__________________________________________

SIGNATURE

Claimant’s Signature: _______________________________________________

Claimant’s Title: _______________________________________________

Date of Signature: _______________________________________________

NOTE: This release is not effective until the check that constitutes final payment has been properly endorsed and has cleared the bank.

18

Construction Management Services Agreement

EXHIBIT C

LIST OF SUPPLIERS AND SUBCONTRACTORS

The following is a list of all suppliers and subcontractors whose materials and services will be or have been utilized by Contractor in the performance of the Work or as described in the Invoice, together with a description of the materials and services provided by such suppliers and subcontractors in connection with the Work or during the Invoice Period, and the price charged by such suppliers and subcontractors for such materials and services. If necessary, this list will be continued on an additional sheet. If this list is being submitted with an Invoice, attach a copy of each invoice submitted by the following suppliers and subcontractors representing all of the materials and services that Contractor has provided during the Invoice Period.

Material or Services

Name and Address                    Provided and Price Charged

1.

2.

3.

4.

5.

6.

Invoice Period: _____________________________________________, 20 to _____________________________________________, 20__ __________________________________________________, a ____________________________________________________ By:__________________________________________________ Its:__________________________________________________ "Subcontractor"

19

Construction Management Services Agreement

EXHIBIT D

TO

AGREEMENT FOR CONTRACTOR SERVICES

CHANGE ORDER REQUEST

FROM:_____________________________        TO:_____________________________

_____________________________

_____________________________

_____________________________

Change Order No.: _____________________________

Previous Change Order Nos.: _____________________________

The following changes are to be made in the Contract between Owner and Contractor:

One original Contract Price was      $

Net change by previous Change Order    $

The Contract Price before this Change Order was    $

The Contract Price will be (increased) (decreased)

(unchanged) by this Change Order    $

The new Contract Price including this Change

Order will be ……………………………………………………………………………………………………………………….    $

The time for completion will be (increased) (decreased) (unchanged) by days.

The Completion Date for the Work is (not extended) (extended to ).

Owner: By: ________________________________________________ Owner’s Authorized Representative Dated:____________________________ Contractor: By: ______________________________________________ Its: _______________________________________________ Dated: ___________________________

20

Construction Management Services Agreement

EXHIBIT E

TO

AGREEMENT FOR CONTRACTOR SERVICES

ADDITIONAL REQUIRED INSURANCE

None.

21

Construction Management Services Agreement

EX-10.5

EXHIBIT 10.5

Freddie Mac Loan Number: 708218687

Property Name: The 1800 at Barrett Lakes

MULTIFAMILY NOTEFLOATING RATE

(Revised 7-17-2014)

US $34,300,000 Effective Date: November 20, 2014

FOR VALUE RECEIVED, STAR BARRETT LAKES, LLC, a Delaware limited liability company (together with such party’s or parties’ successors and assigns, “Borrower”) jointly and severally (if more than one), promises to pay to the order of BERKELEY POINT CAPITAL LLC, a Delaware limited liability company, the principal sum of $34,300,000, with interest on the unpaid principal balance, as hereinafter provided.

1.    Defined Terms.

(a)    As used in this Note:         

“Amortization Period” means a period of 0 full consecutive calendar months.

“Base Recourse” meansa portion of the Indebtedness equal to 0% of the original principal balance of this Note.

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

“Capped Interest Rate” is not applicable, there is no Capped Interest Rate for the Loan.

“Default Rate” means a variable annual interest rate equal to 4 percentage points above the Floating Interest Rate in effect from time to time. However, at no time will the Default Rate exceed the Maximum Interest Rate.

“First Installment Due Date” means January 1, 2015.

Multifamily Note

Floating Rate

“Floating Interest Rate” means the variable annual interest rate calculated for each Interest Adjustment Period so as to equal the Index Rate for such Interest Adjustment Period (truncated at the 5^th decimal place if necessary) plus the Margin. However, in no event will the Floating Interest Rate exceed the Capped Interest Rate.

“Freddie Mac” means the Federal Home Loan Mortgage Corporation.

“ICE” means ICE Benchmark Administration Limited.

“Index Rate” means, for any Interest Adjustment Period, the LIBOR Index Rate for such Interest Adjustment Period.

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

“Interest Adjustment Period” means each successive ONE (1) calendar month period until the entire Indebtedness is paid in full, except that the first Interest Adjustment Period is the period from the date of this Note through November 30, 2014. Therefore, the second Interest Adjustment Period will be the period from December 1, 2014 through December 31, 2014, and so on until the entire Indebtedness is paid in full.

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

“LIBOR” means the London Interbank Offered Rate.

“LIBOR Index” means ICE’s one (1) month LIBOR rate for United States Dollar deposits, as displayed on the LIBOR Index Page used to establish the LIBOR Index Rate.

“LIBOR Index Rate” means, for any Interest Adjustment Period after the first Interest Adjustment Period, ICE’s LIBOR rate for the LIBOR Index released by ICE most recently preceding the first day of such Interest Adjustment Period, as such LIBOR rate is displayed on the LIBOR Index Page. The LIBOR Index Rate for the first Interest Adjustment Period means ICE’s LIBOR rate for the LIBOR Index released by ICE most recently preceding the first day of the month in which the first Interest Adjustment Period begins, as such LIBOR rate is displayed on the LIBOR Index Page.

Multifamily Note	Page 2
Floating Rate

“LIBOR Index Page” is the Bloomberg L.P., page “BBAM”, or such other page for the LIBOR Index as may replace page BBAM on that service, or at the option of Lender (i) the applicable page for the LIBOR Index on another service which electronically transmits or displays ICE LIBOR rates, or (ii) any publication of LIBOR rates available from ICE. In the event ICE ceases to set or publish a LIBOR rate/interest settlement rate for the LIBOR Index, Lender will designate an alternative index, and such alternative index will constitute the LIBOR Index Page.    

“Loan” means the loan evidenced by this Note.

“Loan Agreement” means the Multifamily Loan and Security Agreement entered into by and between Borrower and Lender, effective as of the effective date of this Note, as amended, modified, or supplemented from time to time.

“Lockout Period” means the period from the date of this Note through the day preceding the 12th Installment Due Date under this Note.

“Margin” means 1.77 percentage points (one-hundred and seventy-seven basis points).

“Maturity Date” meansthe earlier of(i) December 1, 2021 (“Scheduled Maturity Date”)and (ii) the date on which the unpaid principal balance of this Note becomes due and payable by acceleration or otherwise pursuant to the Loan Documents or the exercise by Lender of any right or remedy under any Loan Document; provided, however, that if the unpaid principal balance of this Note becomes due and payable by acceleration but such acceleration is rendered null and void and of no further force and effect by operation of law or agreement by Lender, such acceleration will have no effect on the Maturity Date.

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

“Prepayment Premium Period” means the period during which, if a prepayment of principal occurs, a prepayment premium will be payable by Borrower to Lender. The Prepayment Premium Period is the period from and including the date of this Note until but not including the first day of the Window Period.

“Program Plus® Seller/Servicer” means an institution approved to sell multifamily mortgages to Freddie Mac as a Program Plus Seller/Servicer.

“Remaining Amortization Period” means, at any point in time, the number of consecutive calendar months equal to the number of months in the Amortization Period minus the number of scheduled monthly installments of principal and interest that have elapsed since the date of this Note.

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Multifamily NoteFloating Rate    

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

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

(b) Other capitalized terms used but not defined in this Note will have the meanings given to such terms in the Loan Agreement.

2. Address for Payment. All payments due under this Note will be payable at

Payment Mailing Address: Berkeley Point Capital LLC Lockbox Box 773194 3194 Solutions Center Chicago, IL 60677-3001 Payment Overnight Address: Berkeley Point Capital LLC Lockbox Box 773194 350 East Devon Avenue Itasca, IL 60143 Payment Wiring Instructions: PNC Bank, NA ABA#043000096 Berkeley Point Capital LLC Credit #1019788912 Ref Loan # 077042554

or such other place as may be designated by Notice to Borrower from or on behalf of Lender.

3.    Payments.

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

(b) Interest under this Note will be computed, payable and allocated on the basis of an actual/360 interest calculation schedule (interest is payable for the actual number of days in each month, and each month’s interest is calculated by multiplying the unpaid principal amount of this Note as of the first day of the month for which interest is being calculated by the applicable Floating Interest Rate, dividing the product by 360, and multiplying the quotient by the number of days in the month for which interest is being calculated). For convenience in determining the amount of a monthly installment of principal and interest under this Note, Lender will use a 30/360 interest calculation payment schedule (each year is treated as consisting of twelve 30-day months). However, as provided above, the portion of the monthly installment actually payable as and allocated to interest will be based upon an actual/360 interest calculation schedule, and the amount of each installment attributable to principal and the amount attributable to interest will vary based upon the number of days in the month for which such installment is paid. Each monthly payment of principal and interest will first be applied to pay in full interest due, and the balance of the monthly payment paid by Borrower will be credited to principal.

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Multifamily NoteFloating Rate    

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

(d) Beginning on the First Installment Due Date, and continuing until and including the monthly installment due on the Maturity Date, accrued interest-only will be payable by Borrower in consecutive monthly installments due and payable on the first day of each calendar month. The amount of the monthly installment of interest-only payable pursuant to this Section 3(d) on an Installment Due Date will equal the product of (i) annual interest on the unpaid principal balance of this Note as of the first day of the Interest Adjustment Period immediately preceding the Installment Due Date at the Floating Interest Rate in effect for such Interest Adjustment Period, divided by 360, multiplied by (ii) the number of days in such Interest Adjustment Period.

(e) Reserved.

(f) Reserved.

(g) Reserved.

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

(i) Lender will provide Borrower with Notice, given in the manner specified in the Loan Agreement, of the amount of each monthly installment due under this Note. However, if Lender has not provided Borrower with prior notice of the monthly payment due on any Installment Due Date, then Borrower will pay on that Installment Due Date an amount equal to the monthly installment payment for which Borrower last received notice. If Lender at any time determines that Borrower has paid one or more monthly installments in an incorrect amount because of the operation of the preceding sentence, or because Lender has miscalculated the Floating Interest Rate or has otherwise miscalculated the amount of any monthly installment, then Lender will give notice to Borrower of such determination. If such determination discloses that Borrower has paid less than the full amount due for the period for which the determination was made, Borrower, within 30 calendar days after receipt of the notice from Lender, will

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Multifamily NoteFloating Rate    

pay to Lender the full amount of the deficiency. If such determination discloses that Borrower has paid more than the full amount due for the period for which the determination was made, then the amount of the overpayment will be credited to the next installment(s) of interest only or principal and interest, as applicable, due under this Note (or, if an Event of Default has occurred and is continuing, such overpayment will be credited against any amount owing by Borrower to Lender).

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

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

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

(m) In accordance with Section 16, interest charged under this Note cannot exceed the Maximum Interest Rate. If the Floating Interest Rate at any time exceeds the Maximum Interest Rate, resulting in the charging of interest hereunder to be limited to the Maximum Interest Rate, then any subsequent reduction in the Floating Interest Rate will not reduce the rate at which interest under this Note accrues below the Maximum Interest Rate until the total amount of interest accrued hereunder equals the amount of interest which would have accrued had the Floating Interest Rate at all times been in effect.

(n) Reserved.

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

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Multifamily NoteFloating Rate    

5. Security. The Indebtedness is secured by, among other things, the Security Instrument, and reference is made to the Security Instrument and the Loan Agreement for other rights with respect to collateral for the Indebtedness.

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

7. Late Charge.

(a) If any monthly installment of interest or principal and interest or other amount payable under this Note or under the Loan Agreement or any other Loan Document is not received in full by Lender within 10 days after the installment or other amount is due, counting from and including the date such installment or other amount is due (unless applicable law requires a longer period of time before a late charge may be imposed, in which event such longer period will be substituted), Borrower must pay to Lender, immediately and without demand by Lender, a late charge equal to 5% of such installment or other amount due (unless applicable law requires a lesser amount be charged, in which event such lesser amount will be substituted). If the Loan is not fully amortizing, the late charge will not be due on the final payment of principal owed on the Maturity Date if such payment is not timely made.

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

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Multifamily NoteFloating Rate    

8. Default Rate.

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

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

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

9. Limits on Personal Liability.

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

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Multifamily NoteFloating Rate    

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

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

(i) Borrower fails to pay to Lender upon demand after an Event of Default all Rents to which Lender is entitled under Section 3 of the Security Instrument and the amount of all security deposits collected by Borrower from tenants then in residence. However, Borrower will not be personally liable for any failure described in this Section 9(c)(i) if Borrower is unable to pay to Lender all Rents and security deposits as required by the Security Instrument because of a valid order issued in a bankruptcy, receivership, or similar judicial proceeding.

(ii) Borrower fails to apply all Insurance proceeds and Condemnation proceeds as required by the Loan Agreement. However, Borrower will not be personally liable for any failure described in this Section 9(c)(ii) if Borrower is unable to apply Insurance or Condemnation proceeds as required by the Loan Agreement because of a valid order issued in a bankruptcy, receivership, or similar judicial proceeding.

(iii) Either of the following occurs:

(A)    Borrower fails to deliver the statements, schedules and reports required by Section 6.07 of the Loan Agreement and Lender exercises its right to audit those statements, schedules and reports.

(B)    If an Event of Default has occurred and is continuing, Borrower fails to deliver all books and records relating to the Mortgaged Property or its operation in accordance with the provisions of Section 6.07 of the Loan Agreement.

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Multifamily NoteFloating Rate    

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

[Collect] Hazard Insurance premiums or other Insurance premiums,

[Collect] Taxes or payments in lieu of taxes (PILOT)

[Deferred] water and sewer charges (that could become a lien on the Mortgaged Property)

[N/A] Ground Rents

[Deferred] assessments or other charges (that could become a lien on the Mortgaged Property)

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

(vi) Borrower fails to comply with any provision of Section 6.13(a)(iii) through (xxvi) of the Loan Agreement or any SPE Equity Owner fails to comply with any provision of Section 6.13(b)(iii) through (v) of the Loan Agreement (subject to possible full recourse liability as set forth in Section 9(f)(ii)).

(vii) Any of the following Transfers occurs:

(A) Any Person that is not an Affiliate creates a mechanic’s lien or other involuntary lien or encumbrance against the Mortgaged Property and Borrower has not complied with the provisions of the Loan Agreement.

(B) A Transfer of property by devise, descent or operation of law occurs upon the death of a natural person and such Transfer does not meet the requirements set forth in the Loan Agreement.

(C) Borrower grants an easement that does not meet the requirements set forth in the Loan Agreement.

(D) Borrower executes a Lease that does not meet the requirements set forth in the Loan Agreement.

(viii) Reserved.

(ix) through (xviii) are Reserved.

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Multifamily NoteFloating Rate    

(d) In addition to the Base Recourse, Borrower will be personally liable to Lender for all of the following:

(i) Borrower will be personally liable for the performance of all of Borrower’s obligations under Sections 6.12 and 10.02(b) of the Loan Agreement (relating to environmental matters).

(ii) Borrower will be personally liable for the costs of any audit under Section 6.07 of the Loan Agreement.

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

(iv) Reserved.

(v) Reserved.

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

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

(i) Borrower fails to comply with Section 6.13(a)(i) or (ii) of the Loan Agreement or any SPE Equity Owner fails to comply with Section 6.13(b)(i) or (ii) of the Loan Agreement.

(ii) Borrower fails to comply with any provision of Section 6.13(a)(iii) through (xxvi) of the Loan Agreement or any SPE Equity Owner fails to comply with any provision of Section 6.13(b)(iii) through (v) of the Loan Agreement and a court of competent jurisdiction holds or determines that such failure or combination of failures is the basis, in whole or in part, for the substantive consolidation of the assets and liabilities of Borrower or any SPE Equity Owner with the assets and liabilities of a debtor pursuant to Title 11 of the Bankruptcy Code.

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Multifamily NoteFloating Rate    

(iii) A Transfer that is an Event of Default under Section 7.02 of the Loan Agreement occurs other than a Transfer set forth in Section 9(c)(vii) above (for which Borrower will have personal liability for Lender’s loss or damage); provided, however, that Borrower will not have any personal liability for a Transfer consisting solely of the involuntary removal or involuntary withdrawal of a general partner in a limited partnership or a manager in a limited liability company.

(iv) There was fraud or written material misrepresentation by Borrower or any officer, director, partner, member, or employee of Borrower in connection with the application for or creation of the Indebtedness or there is fraud in connection with any request for any action or consent by Lender.

(v) Borrower or any SPE Equity Owner voluntarily files for bankruptcy protection under the Bankruptcy Code.

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

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

(viii) An order of relief is entered against Borrower or any SPE Equity Owner pursuant to the Bankruptcy Code or other federal or state law affecting debtor and creditor rights in any involuntary bankruptcy proceeding initiated or joined in by a Related Party.

(ix) An involuntary bankruptcy or other involuntary insolvency proceeding is commenced against Borrower or any SPE Equity Owner (by a party other than Lender) but only if Borrower or such SPE Equity Owner has failed to use commercially reasonable efforts to dismiss such proceeding or has consented to such proceeding. “Commercially reasonable efforts” will not require any direct or indirect interest holders in Borrower or any SPE Equity Owner to contribute or cause the contribution of additional capital to Borrower or any SPE Equity Owner.

(x) through (xii) are reserved.

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Multifamily NoteFloating Rate    

(g) Forpurposesof Sections 9(f) and (h), the term “Related Party” will include all of the following:

(i) Borrower, anyGuarantor, or any SPE Equity Owner.

(ii) Any Person that holds, directly or indirectly, any ownership interest (includingany shareholder, member or partner) in Borrower, any Guarantor, or any SPE Equity Owner or any Person that has a right to manage Borrower, any Guarantor, or any SPE Equity Owner.

(iii) Any Person in which Borrower, any Guarantor, or any SPE Equity Ownerhasanyownership interest (direct or indirect) or right to manage.

(iv) Any Person in which any partner, shareholder, or member of Borrower, any Guarantor, or any SPE Equity Owner has an ownership interest or right to manage.

(v) Any Person in which any Person holding an interest in Borrower, any Guarantor, or any SPE Equity Owner also has any ownership interest.

(vi) Any creditorof Borrower that is related by blood, marriage or adoption to Borrower, any Guarantor, or any SPE Equity Owner.

(vii) Any creditorof Borrower that is related to any partner, shareholder or member of, or any other Person holding an interest in, Borrower, any Guarantor, or any SPE Equity Owner.

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

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Multifamily NoteFloating Rate    

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

10. Voluntary and Involuntary Prepayments.

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

(b) Borrower may not voluntarily prepay any portion of the principal balance of this Note during the Lockout Period, if a Lockout Period is applicable to this Note. However, if any portion of the principal balance of this Note is prepaid during the Lockout Period by reason of the application by Lender of any proceeds of collateral or other security to any portion of the unpaid principal balance of this Note or following a determination that the prohibition on voluntary prepayments during the Lockout Period is in contravention of applicable law, then Borrower must also pay to Lender upon demand by Lender, a prepayment premium equal to 5% of the amount of principal being prepaid.

(c) Following the end of the Lockout Period, Borrower may voluntarily prepay all of the unpaid principal balance of this Note on an Installment Due Date so long as Borrower designates the date for such prepayment in a Notice from Borrower to Lender given at least 30 days prior to the date of such prepayment. If an Installment Due Date (as defined in Section 1(a)) falls on a day which is not a Business Day,thenwith respect to payments made under this Section 10 only, the term “Installment Due Date” will mean the Business Day immediately preceding the scheduled Installment Due Date.

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

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

(f) Except as provided in Section 10(g), a prepayment premium will be due and payable by Borrower in connection with any prepayment of principal under this Note during the Prepayment Premium Period. The prepayment premium will be 1.0% of the amount of principal being prepaid for any prepayments occurring during the Prepayment Premium Period but after the Lockout Period (if applicable).

(g) Notwithstanding any other provision of this Section 10, no prepayment premium will be payable with respect to any of the following:

(i)  Any prepayment made during the Window Period.

(ii)  Any prepayment occurring as a result of the application of any Insurance proceeds or Condemnation award.

(iii)  Any prepayment required under the terms of the Loan Agreement in connection with a Condemnation proceeding.

(iv) Any prepayment of the entire principal balance of this Note that occurs on or after the 12^th Installment Due Date under this Note with the proceeds of a fixed interest rate mortgage loan that is the subject of a binding commitment for purchase between Freddie Mac and a Freddie Mac-approved Program Plusࣨ Seller/Servicer.

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

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

11. Reserved.

12. Reserved.

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

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

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

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

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

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

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

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

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21. Notices; Written Modifications.

(a) All Notices, demands, and other communications required or permitted to be given pursuant to this Note will be given in accordance with Section 11.03 of the Loan Agreement.

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

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

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

24. State-Specific Provisions. N/A

25. Attached Riders. The following Riders are attached to this Note:

• Rider to the Multifamily Note – Aluminum Wiring and/or Galvanized         Steel Piping/Polybutylene Piping    

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Multifamily NoteFloating Rate    

26. Attached Exhibit. The following Exhibit, if marked with an “X” in the space provided, is attached to this Note:

X Exhibit A Modifications to Multifamily Note

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

BORROWER:

STAR BARRETT LAKES, LLC

a Delaware limited liability company

By:    STEADFAST APARTMENT ADVISOR, LLC

a Delaware limited liability company

Non-Member Manager

By:	/s/ Kevin J. Keating	(SEAL)
Name:	Kevin J. Keating
Title:	Treasurer

36-4769184

Borrower’s Employer ID Number

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RIDER TO MULTIFAMILY NOTE

ALUMINUM WIRING

AND/OR

GALVANIZED STEEL PIPING/POLYBUTYLENE PIPING

(Revised 3-1-2014)

The following changes are made to the Note which precedes this Rider:

A. Section 9(d)(i) is deleted and replaced with the following:

(i) Borrower will be personally liable for the performance of all of Borrower’s obligations under Sections 6.12 and 10.02(b) of the Loan Agreement (relating to environmental matters), Section 6.09(h) (relating to aluminum wiring), and under Section 6.09(i) of the Loan Agreement (relating to galvanized steel piping/polybutylene piping), as well as for all costs, loss, or damage incurred or suffered by Lender as a result of either or both of the following:

(A) The existence of aluminum wiring at the Mortgaged Property, including replacing all such aluminum wiring.

(B) The existence of galvanized steel piping/polybutylene piping at the Mortgaged Property, including replacing all such piping and repairing any damage associated with the leaks in or other failure of any galvanized steel piping/polybutylene piping.

Multifamily NoteAluminum Wiring and/or Galvanized Steel Piping/Polybutylene Piping                    

EXHIBIT A

MODIFICATIONS TO MULTIFAMILY NOTE

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

1. The definition of “Lockout Period” in Section 1(a) is deleted and replaced with the following:

“Lockout Period” means the period from the date of this Note through the day preceding the 12th24^th Installment Due Date under this Note.

2.    Section 10(g)(iv) is deleted and replaced with the following:

(iv) Any prepayment of the entire principal balance of this Note that occurs on or after the 12^th24^th Installment Due Date under this Note with the proceeds of a fixed interest rate mortgage loan that is the subject of a binding commitment for purchase between Freddie Mac and a Freddie Mac-approved Program Plusࣨ Seller/Servicer.

Multifamily Note	Page A-1
Floating Rate

EX-10.6

EXHIBIT 10.6

Freddie Mac Loan Number: 708218687            

Property Name: The 1800 at Barrett Lakes

MULTIFAMILY LOAN AND SECURITY AGREEMENT

(Revised 7-2-2014)

Borrower:	STAR BARRETT LAKES, LLC, a Delaware limited liability company
Lender:	BERKELEY POINT CAPITAL LLC,a Delaware limited liability company
Date:	November 20, 2014
Loan Amount:	$34,300,000

Reserve Fund Information
(See Article IV)
Imposition Reserves     (fill in “Collect” or “Deferred” as appropriate for each item)
Collect	Insurance
Collect	Taxes
Deferred	water/sewer
N/A	Ground Rents
Deferred	assessments/other charges
Repairs & Repair Reserve		Repairs required?	X	Yes	No
		If No, is radon testing required?		Yes	No
		If Yes, is a Reserve required?	X	Yes	No
If Yes to Repairs, but No Reserve, is a Letter of Credit required?				Yes	No

Replacement Reserve	X	Yes	If Yes:	X	Funded		Deferred
		No
Rental Achievement Reserve		Yes	If Yes:		Cash		Letter of Credit
	X	No
Cap Agreement Reserve (Cap Collateral)				X	Yes		No
Other Reserve(s)					Yes	X	No
If Yes, specify:

Attached Riders

(See Article XIII)

Name of Rider	Date Revised
Rider to Multifamily Loan and Security Agreement – Replacement Reserve Fund – Immediate Deposits	(2022)
Rider to Multifamily Loan and Security Agreement – Repair Reserve Fund	(2022)
Rider to Multifamily Loan and Security Agreement – No Defeasance	(2018)
Rider to Multifamily Loan and Security Agreement – Additional Provisions for Loans Equal to or Greater than $25,000,000	(2018)
Rider to Multifamily Loan and Security Agreement – Property Improvement Alterations	(2048)
Rider to Multifamily Loan and Security Agreement – Limited Partner or Non-Managing Member Transfer	(2023)
Rider to Multifamily Loan and Security Agreement – Rate Cap Agreement and Rate Cap Agreement Reserve Fund	(2038)
Rider to Multifamily Loan and Security Agreement – Termite or Wood Damaging Insect Control	(2018)
Rider to Multifamily Loan and Security Agreement – Galvanized Steel Piping/Polybutylene Piping	(2018)
Rider to Multifamily Loan and Security Agreement – Trade Names	(2018)
Rider to Multifamily Loan and Security Agreement – Month to Month Leases	(2018)

Exhibit B Modifications
(See Article XIV)
Are anyExhibit B modifications attached?	X	Yes	No

TABLE OF CONTENTS

ARTICLE I DEFINED TERMS; CONSTRUCTION

1.01 Defined Terms

1.02 Construction

ARTICLE II LOAN

2.01 Loan Terms

2.02 Prepayment Premium

2.03 Exculpation

2.04 Application of Payments

2.05 Usury Savings

2.06 Floating Rate Mortgage - Third Party Cap Agreement

ARTICLE III LOAN SECURITY AND GUARANTY

3.01 Security Instrument

3.02 Reserve Funds

3.03 Uniform Commercial Code Security Agreement

3.04 Cap Agreement and Cap Collateral Assignment

3.05 Guaranty

3.06 Reserved

3.07 Reserved

ARTICLE IV RESERVE FUNDS AND REQUIREMENTS

4.01 Reserves Generally

4.02 Reserves for Taxes, Insurance and Other Charges

4.03 Repairs; Repair Reserve Fund

4.04 Replacement Reserve Fund

4.05 Rental Achievement Provisions

4.06 Debt Service Reserve

4.07 Rate Cap Agreement Reserve Fund

4.08 Reserved

4.09 Reserved

4.10 Reserved

ARTICLE V REPRESENTATIONS AND WARRANTIES

5.01 Review of Documents

5.02 Condition of Mortgaged Property

5.03 No Condemnation

Multifamily Loan and Security Agreement Page iii

5.04 Actions; Suits; Proceedings

5.05 Environmental

5.06 Commencement of Work; No Labor or Materialmen’s Claims

5.07 Compliance with Applicable Laws and Regulations

5.08 Access; Utilities; Tax Parcels

5.09 Licenses and Permits

5.10 No Other Interests

5.11 Term of Leases

5.12 No Prior Assignment; Prepayment of Rents

5.13 Illegal Activity

5.14 Taxes Paid

5.15 Title Exceptions

5.16 No Change in Facts or Circumstances

5.17 Financial Statements

5.18 ERISA – Borrower Status

5.19 No Fraudulent Transfer or Preference

5.20 No Insolvency or Judgment

5.21 Working Capital

5.22 Cap Collateral

5.23 Ground Lease

5.24 Purpose of Loan

5.25 Through 5.39 are Reserved

5.40    Recycled SPE Borrower

5.41    Recycled SPE Equity Owner

5.42 Through 5.50 are Reserved

5.51 Survival

ARTICLE VI BORROWER COVENANTS

6.01 Compliance with Laws

6.02 Compliance with Organizational Documents

6.03 Use of Mortgaged Property

6.04 Non-Residential Leases

6.05 Prepayment of Rents

6.06 Inspection

6.07 Books and Records; Financial Reporting

6.08 Taxes; Operating Expenses; Ground Rents

6.09 Preservation, Management and Maintenance of Mortgaged Property

6.10 Insurance

6.11 Condemnation

6.12 Environmental Hazards

6.13 Single Purpose Entity Requirements

6.14 Repairs and Capital Replacements

6.15 Residential Leases Affecting the Mortgaged Property

6.16 Litigation; Government Proceedings

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6.17 Further Assurances and Estoppel Certificates; Lender’s Expenses

6.18 Cap Collateral

6.19 Ground Lease

6.20 ERISA Requirements

6.21 through 6.43 are Reserved

ARTICLE VII	TRANSFERS OF THE MORTGAGED PROPERTY OR INTERESTS
	IN BORROWER

7.01 Permitted Transfers

7.02 Prohibited Transfers

7.03 Conditionally Permitted Transfers

7.04 Preapproved Intrafamily Transfers

7.05 Lender’s Consent to Prohibited Transfers

7.06 SPE Equity Owner Requirement Following Transfer

7.07 Additional Transfer Requirements - External Cap Agreement

7.08 Reserved

7.09 Reserved

ARTICLE VIII SUBROGATION

ARTICLE IX EVENTS OF DEFAULT AND REMEDIES

9.01 Events of Default

9.02 Protection of Lender’s Security; Security Instrument Secures Future Advances

9.03 Remedies

9.04 Forbearance

9.05 Waiver of Marshalling

ARTICLE X RELEASE; INDEMNITY

10.01 Release

10.02 Indemnity

10.03 Reserved

ARTICLE XI MISCELLANEOUS PROVISIONS

11.01 Waiver of Statute of Limitations, Offsets and Counterclaims

11.02 Governing Law; Consent to Jurisdiction and Venue

11.03 Notice

11.04 Successors and Assigns Bound

11.05 Joint and Several (and Solidary) Liability

11.06 Relationship of Parties; No Third Party Beneficiary

11.07 Severability; Amendments

Multifamily Loan and Security Agreement Page v

11.08 Disclosure of Information

11.09 Determinations by Lender

11.10 Sale of Note; Change in Servicer; Loan Servicing

11.11 Supplemental Financing

11.12 Defeasance

11.13 Lender’s Rights to Sell or Securitize

11.14 Cooperation with Rating Agencies and Investors

11.15 Letter of Credit Requirements

11.16 Through 11.18 are Reserved

11.19 State Specific Provisions

11.20 Time is of the Essence

ARTICLE XII DEFINITIONS

ARTICLE XIII INCORPORATION OF ATTACHED RIDERS

ARTICLE XIV INCORPORATION OF ATTACHED EXHIBITS

Multifamily Loan and Security Agreement Page vi

MULTIFAMILY LOAN AND SECURITY AGREEMENT

THIS MULTIFAMILY LOAN AND SECURITY AGREEMENT (“Loan Agreement”) is dated as of the 20^th day of November, 2014 and is made by and between STAR BARRETT LAKES, LLC, a Delaware limited liability company (“Borrower”), and BERKELEY POINT CAPITAL LLC,a Delaware limited liability company (together with its successors and assigns, “Lender”).

RECITAL

Lender has agreed to make and Borrower has agreed to accept a loan in the original principal amount of $34,300,000 (“Loan”). Lender is willing to make the Loan to Borrower upon the terms and subject to the conditions set forth in this Loan Agreement.

AGREEMENT

NOW, THEREFORE, in consideration of these promises, the mutual covenants contained in this Loan Agreement and other good and valuable consideration, the receipt and sufficiency of which are acknowledged, the parties agree as follows:

ARTICLE I        DEFINED TERMS; CONSTRUCTION.

1.01 Defined Terms. Each defined term in this Loan Agreement will have the meaning ascribed to that term in Article XII unless otherwise defined in this Loan Agreement.

1.02 Construction.

(a) The captions and headings of the Articles and Sections of this Loan Agreement are for convenience only and will be disregarded in construing this Loan Agreement.

(b) Any reference in this Loan Agreement to an “Exhibit,” an “Article” or a “Section” will, unless otherwise explicitly provided, be construed as referring, respectively, to an Exhibit attached to this Loan Agreement or to an Article or Section of this Loan Agreement.

(c) All Exhibits and Riders attached to or referred to in this Loan Agreement are incorporated by reference in this Loan Agreement.

(d) Any reference in this Loan Agreement to a statute or regulation will be construed as referring to that statute or regulation as amended from time to time.

(e) Use of the singular in this Loan Agreement includes the plural and use of the plural includes the singular.

Multifamily Loan and Security Agreement Page 1

(f) As used in this Loan Agreement, the term “including” means “including, but not limited to” and the term “includes” means “includes without limitation.”

(g) The use of one gender includes the other gender, as the context may require.

(h) Unless the context requires otherwise, (i) any definition of or reference to any agreement, instrument or other document in this Loan Agreement will be construed as referring to such agreement, instrument or other document as from time to time amended, supplemented or otherwise modified (subject to any restrictions on such amendments, supplements or modifications set forth in this Loan Agreement), and (ii) any reference in this Loan Agreement to any Person will be construed to include such Person’s successors and assigns.

(i) Any reference in this Loan Agreement to “Lender’s requirements,” “as required by Lender,” or similar references will be construed, after Securitization, to mean Lender’s requirements or standards as determined in accordance with Lender’s and Loan Servicer’s obligations under the terms of the Securitization documents.

ARTICLE II         LOAN.

2.01 Loan Terms. The Loan will be evidenced by the Note and will bear interest and be paid in accordance with the payment terms set forth in the Note.

2.02 Prepayment Premium. Borrower will be required to pay a prepayment premium in connection with certain prepayments of the Indebtedness, including a payment made after Lender’s exercise of any right of acceleration of the Indebtedness, as provided in the Note.

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

Multifamily Loan and Security Agreement Page 2

2.04 Application of Payments. If at any time Lender receives, from Borrower or otherwise, any amount applicable to the Indebtedness which is less than all amounts due and payable at such time, then Lender may apply that payment to amounts then due and payable in any manner and in any order determined by Lender (unless otherwise required by applicable law), in Lender’s sole and absolute discretion. Neither Lender’s acceptance of an amount that is less than all amounts then due and payable, nor Lender’s application of such payment in the manner authorized, will constitute or be deemed to constitute either a waiver of the unpaid amounts or an accord and satisfaction. Notwithstanding the application of any such amount to the Indebtedness, Borrower’s obligations under this Loan Agreement, the Note and all other Loan Documents will remain unchanged.

2.05 Usury Savings. If any applicable law limiting the amount of interest or other charges permitted to be collected from Borrower is interpreted so that any charge provided for in any Loan Document, whether considered separately or together with other charges levied in connection with any other Loan Document, violates that law, and Borrower is entitled to the benefit of that law, that charge is reduced to the extent necessary to eliminate that violation. The amounts, if any, previously paid to Lender in excess of the permitted amounts will be applied by Lender to reduce the principal amount of the Indebtedness. For the purpose of determining whether any applicable law limiting the amount of interest or other charges permitted to be collected from Borrower has been violated, all Indebtedness which constitutes interest, as well as all other charges levied in connection with the Indebtedness which constitute interest, will be deemed to be allocated and spread ratably over the stated term of the Note. Unless otherwise required by applicable law, such allocation and spreading will be effected in such a manner that the rate of interest so computed is uniform throughout the stated term of the Note.

2.06 Floating Rate Mortgage - Third Party Cap Agreement. If (a) the Note does not provide for interest to accrue at a floating or variable interest rate (other than during any Extension Period, if applicable), and (b) a third party Cap Agreement is not required, then this Section 2.06 and Section 3.04 will be of no force or effect.

(a) So long as there is no Event of Default, Lender or Loan Servicer will remit to Borrower each Cap Payment received by Lender or Loan Servicer with respect to any month for which Borrower has paid in full the monthly installment of principal and interest or interest only, as applicable, due under the Note. Alternatively, at Lender’s option, so long as there is no Event of Default, Lender may apply a Cap Payment received by Lender or Loan Servicer with respect to any month to the applicable monthly payment of accrued interest due under the Note if Borrower has paid in full the remaining portion of such monthly payment of principal and interest or interest only, as applicable.

Multifamily Loan and Security Agreement Page 3

(b) Neither the existence of a Cap Agreement nor anything in this Loan Agreement will relieve Borrower of its primary obligation to timely pay in full all amounts due under the Note and otherwise due on account of the Indebtedness.

ARTICLE III     LOAN SECURITY AND GUARANTY.

3.01 Security Instrument. Borrower will execute the Security Instrument dated of even date with this Loan Agreement. The Security Instrument will be recorded in the applicable land records in the Property Jurisdiction.

3.02 Reserve Funds.

(a) Security Interest. To secure Borrower’s obligations under this Loan Agreement and to further secure Borrower’s obligations under the Note and the other Loan Documents, Borrower conveys, pledges, transfers and grants to Lender a security interest pursuant to the Uniform Commercial Code of the Property Jurisdiction or any other applicable law in and to all money in the Reserve Funds, as the same may increase or decrease from time to time, all interest and dividends thereon and all proceeds thereof.

(b) Supplemental Loan. If this Loan Agreement is entered into in connection with a Supplemental Loan and if the same Person is or becomes both Senior Lender and Supplemental Lender, then:

(i) Borrower assigns and grants to Supplemental Lender a security interest in the Reserve Funds established in connection with the Senior Indebtedness as additional security for all of Borrower’s obligations under the Supplemental Note.

(ii) In addition, Borrower assigns and grants to Senior Lender a security interest in the Reserve Funds established in connection with the Supplemental Indebtedness as additional security for all of Borrower’s obligations under the Senior Note.

(iii) It is the intention of Borrower that all amounts deposited by Borrower in connection with either the Senior Loan Documents, the Supplemental Loan Documents, or both, constitute collateral for the Supplemental Indebtedness secured by the Supplemental Instrument and the Senior Indebtedness secured by the Senior Instrument, with the application of such amounts to such Senior Indebtedness or Supplemental Indebtedness to be at the discretion of Senior Lender and Supplemental Lender.

Multifamily Loan and Security Agreement Page 4

3.03 Uniform Commercial Code Security Agreement. This Loan Agreement is also a security agreement under the Uniform Commercial Code for any of the Mortgaged Property which, under applicable law, may be subjected to a security interest under the Uniform Commercial Code, for the purpose of securing Borrower’s obligations under this Loan Agreement and to further secure Borrower’s obligations under the Note, Security Instrument and other Loan Documents, whether such Mortgaged Property is owned now or acquired in the future, and all products and cash and non-cash proceeds thereof (collectively, “UCC Collateral”), and by this Loan Agreement, Borrower grants to Lender a security interest in the UCC Collateral.

3.04 Cap Agreement and Cap Collateral Assignment. Reserved.

3.05 Guaranty. Borrower will cause each Guarantor (if any) to execute a Guaranty of all or a portion of Borrower’s obligations under the Loan Documents effective as of the date of this Loan Agreement.

3.06    Reserved.

3.07    Reserved.

ARTICLE IV        RESERVE FUNDS AND REQUIREMENTS.

4.01 Reserves Generally.

(a) Establishment of Reserve Funds; Investment of Deposits. Unless otherwise provided in Section 4.03 and/or Section 4.04, each Reserve Fund will be established on the date of this Loan Agreement and each of the following will apply:

(i) All Reserve Funds will be deposited in an Eligible Account at an Eligible Institution or invested in “permitted investments” as then defined and required by the Rating Agencies.

(ii) Lender will not be obligated to open additional accounts or deposit Reserve Funds in additional institutions when the amount of any Reserve Fund exceeds the maximum amount of the federal deposit insurance or guaranty. Borrower acknowledges and agrees that it will not have the right to direct Lender as to any specific investment of monies in any Reserve Fund. Lender will not be responsible for any losses resulting from investment of monies in any Reserve Fund or for obtaining any specific level or percentage of earnings on such investment.

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(b) Interest on Reserve Funds; Trust Funds. Unless applicable law requires, Lender will not be required to pay Borrower any interest, earnings or profits on the Reserve Funds. Any amounts deposited with Lender under this Article IV will not be trust funds, nor will they operate to reduce the Indebtedness, unless applied by Lender for that purpose pursuant to the terms of this Loan Agreement.

(c) Use of Reserve Funds. Each Reserve Fund will, except as otherwise provided in this Loan Agreement, be used for the sole purpose of paying, or reimbursing Borrower for payment of, the item(s) for which the applicable Reserve Fund was established. Borrower acknowledges and agrees that, except as specified in this Loan Agreement, monies in one Reserve Fund will not be used to pay, or reimburse Borrower for, matters for which another Reserve Fund has been established.

(d) Termination of Reserve Funds. Upon the payment in full of the Indebtedness, Lender will pay to Borrower all funds remaining in any Reserve Funds.

(e) Reserved.

4.02 Reserves for Taxes, Insurance and Other Charges.

(a) Deposits to Imposition Reserve Deposits. Borrower will deposit with Lender on the day monthly installments of principal or interest, or both, are due under the Note (or on another day designated in writing by Lender), until the Indebtedness is paid in full, an additional amount sufficient to accumulate with Lender the entire sum required to pay, when due, the items marked “Collect” below. Except as provided in Section 4.02(e), Lender will not require Borrower to make Imposition Reserve Deposits with respect to the items marked “Deferred” below.

[Collect] Hazard Insurance premiums or premiums for other Insurance required by Lender under Section 6.10

[Collect] Taxes and payments in lieu of taxes

[Deferred] water and sewer charges that could become a Lien on the Mortgaged Property

[N/A] Ground Rents

[Deferred] assessments or other charges that could become a Lien on the Mortgaged Property

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The amounts deposited pursuant to this Section 4.02(a) are collectively referred to in this Loan Agreement as the “Imposition Reserve Deposits.” The obligations of Borrower for which the Imposition Reserve Deposits are required are collectively referred to in this Loan Agreement as “Impositions.” The amount of the Imposition Reserve Deposits must be sufficient to enable Lender to pay each Imposition before the last date upon which such payment may be made without any penalty or interest charge being added. Lender will maintain records indicating how much of the monthly Imposition Reserve Deposits and how much of the aggregate Imposition Reserve Deposits held by Lender are held for the purpose of paying Taxes, Insurance premiums, Ground Rent (if applicable) and each other Imposition.

(b) Disbursement of Imposition Reserve Deposits. Lender will apply the Imposition Reserve Deposits to pay Impositions so long as no Event of Default has occurred and is continuing. Lender will pay all Impositions from the Imposition Reserve Deposits held by Lender upon Lender’s receipt of a bill or invoice for an Imposition. If Borrower holds a ground lessee interest in the Mortgaged Property and Imposition Reserve Deposits are collected for Ground Rent, then Lender will pay the monthly or other periodic installments of Ground Rent from the Imposition Reserve Deposits, whether or not Lender receives a bill or invoice for such installments. Lender will have no obligation to pay any Imposition to the extent it exceeds the amount of the Imposition Reserve Deposits then held by Lender. Lender may pay an Imposition according to any bill, statement or estimate from the appropriate public office, Ground Lessor (if applicable) or insurance company without inquiring into the accuracy of the bill, statement or estimate or into the validity of the Imposition.

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

(d) Delivery of Invoices. Borrower will promptly deliver to Lender a copy of all notices of, and invoices for, Impositions.

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(e) Deferral of Collection of Any Imposition Reserve Deposits; Delivery of Receipts. If Lender does not collect an Imposition Reserve Deposit with respect to an Imposition either marked “Deferred” in Section 4.02(a) or pursuant to a separate written deferral by Lender, then on or before the earlier of the date each such Imposition is due, or the date this Loan Agreement requires each such Imposition to be paid, Borrower will provide Lender with proof of payment of each such Imposition. Upon Notice to Borrower, Lender may revoke its deferral and require Borrower to deposit with Lender any or all of the Imposition Reserve Deposits listed in Section 4.02(a), regardless of whether any such item is marked “Deferred” (i) if Borrower does not timely pay any of the Impositions, (ii) if Borrower fails to provide timely proof to Lender of such payment, (iii) at any time during the existence of an Event of Default or (iv) upon placement of a Supplemental Loan in accordance with Section 11.11.

(f) through (i) are Reserved.

4.03 Repairs; Repair Reserve Fund. Reserved.

4.04 Replacement Reserve Fund. Reserved.

4.05 Rental Achievement Provisions. Reserved.

4.06    Debt Service Reserve. Reserved.

4.07    Rate Cap Agreement Reserve Fund. Reserved.

4.08    Reserved.

4.09    Reserved.

4.10    Reserved.

ARTICLE V        REPRESENTATIONS AND WARRANTIES.

Borrower represents and warrants to Lender as follows as of the date of this Loan Agreement:

5.01 Review of Documents. Borrower has reviewed: (a) the Note, (b) the Security Instrument, (c) the Commitment Letter, and (d) all other Loan Documents.

5.02 Condition of Mortgaged Property. Except as Borrower may have disclosed to Lender in writing in connection with the issuance of the Commitment Letter, the Mortgaged Property has not been damaged by fire, water, wind or other cause of loss, or any previous damage to the Mortgaged Property has been fully restored.

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5.03 No Condemnation. No part of the Mortgaged Property has been taken in Condemnation or other like proceeding, and, to the best of Borrower’s knowledge after due inquiry and investigation, no such proceeding is pending or threatened for the partial or total Condemnation or other taking of the Mortgaged Property.

5.04 Actions; Suits; Proceedings.

(a) There are no judicial, administrative, mediation or arbitration actions, suits or proceedings pending or, to the best of Borrower’s knowledge, threatened in writing against or affecting Borrower (and, if Borrower is a limited partnership, any of its general partners or if Borrower is a limited liability company, any member of Borrower) or the Mortgaged Property which, if adversely determined, would have a Material Adverse Effect.

(b)    Reserved.

5.05 Environmental. Except as previously disclosed by Borrower to Lender in writing (which written disclosure may be in certain environmental assessments and other written reports accepted by Lender in connection with the funding of the Indebtedness and dated prior to the date of this Loan Agreement), each of the following is true:

(a) Borrower has not at any time engaged in, caused or permitted any Prohibited Activities or Conditions on the Mortgaged Property.

(b) To the best of Borrower’s knowledge after due inquiry and investigation, no Prohibited Activities or Conditions exist or have existed on the Mortgaged Property.

(c) The Mortgaged Property does not now contain any underground storage tanks, and, to the best of Borrower’s knowledge after due inquiry and investigation, the Mortgaged Property has not contained any underground storage tanks in the past. If there is an underground storage tank located on the Mortgaged Property that has been previously disclosed by Borrower to Lender in writing, that tank complies with all requirements of Hazardous Materials Laws.

(d) To the best of Borrower’s knowledge after due inquiry and investigation, Borrower has complied with all Hazardous Materials Laws, including all requirements for notification regarding releases of Hazardous Materials. Without limiting the generality of the foregoing, all Environmental Permits required for the operation of the Mortgaged Property in accordance with Hazardous Materials Laws now in effect have been obtained and all such Environmental Permits are in full force and effect.

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(e) To the best of Borrower’s knowledge after due inquiry and investigation, no event has occurred with respect to the Mortgaged Property that constitutes, or with the passage of time or the giving of notice, or both, would constitute, noncompliance with the terms of any Environmental Permit.

(f) There are no actions, suits, claims or proceedings pending or, to the best of Borrower’s knowledge after due inquiry and investigation, threatened in writing, that involve the Mortgaged Property and allege, arise out of, or relate to any Prohibited Activity or Condition.

(g) Borrower has received no actual or constructive notice of any written complaint, order, notice of violation or other communication from any Governmental Authority with regard to air emissions, water discharges, noise emissions or Hazardous Materials, or any other environmental, health or safety matters affecting the Mortgaged Property or any property that is adjacent to the Mortgaged Property.

5.06 Commencement of Work; No Labor or Materialmen’s Claims. Except as set forth on Exhibit E, prior to the recordation of the Security Instrument, no work of any kind has been or will be commenced or performed upon the Mortgaged Property, and no materials or equipment have been or will be delivered to or upon the Mortgaged Property, for which the contractor, subcontractor or vendor continues to have any rights including the existence of or right to assert or file a mechanic’s or materialmen’s Lien. If any such work of any kind has been commenced or performed upon the Mortgaged Property, or if any such materials or equipment have been ordered or delivered to or upon the Mortgaged Property, then prior to the execution of the Security Instrument, Borrower has satisfied each of the following conditions:

(a) Borrower has fully disclosed in writing to the title insurance company issuing the mortgagee title insurance policy insuring the Lien of the Security Instrument that work has been commenced or performed on the Mortgaged Property, or materials or equipment have been ordered or delivered to or upon the Mortgaged Property.

(b) Borrower has obtained and delivered to Lender and the title company issuing the mortgagee title insurance policy insuring the Lien of the Security Instrument Lien waivers from all contractors, subcontractors, suppliers or any other applicable party, pertaining to all work commenced or performed on the Mortgaged Property, or materials or equipment ordered or delivered to or upon the Mortgaged Property.

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Borrower represents and warrants that all parties furnishing labor and materials for which a Lien or claim of Lien may be filed against the Mortgaged Property have been paid in full and, except for such Liens or claims insured against by the policy of title insurance to be issued in connection with the Loan, there are no mechanics’, laborers’ or materialmen’s Liens or claims outstanding for work, labor or materials affecting the Mortgaged Property, whether prior to, equal with or subordinate to the Lien of the Security Instrument.

5.07 Compliance with Applicable Laws and Regulations.

(a) To the best of Borrower’s knowledge after due inquiry and investigation, each of the following is true:

(i) All Improvements and the use of the Mortgaged Property comply with all applicable statutes, rules and regulations, including all applicable statutes, rules and regulations pertaining to requirements for equal opportunity, anti-discrimination, fair housing, environmental protection, zoning and land use (“legal, non-conforming” status with respect to uses or structures will be considered to comply with zoning and land use requirements for the purposes of this representation).

(ii) The Improvements comply with applicable health, fire, and building codes.

(iii) There is no evidence of any illegal activities relating to controlled substances on the Mortgaged Property.

(b)    Reserved.

(c)    Reserved.

5.08 Access; Utilities; Tax Parcels. The Mortgaged Property: (a) has ingress and egress via a publicly dedicated right of way or via an irrevocable easement permitting ingress and egress, (b) is served by public utilities and services generally available in the surrounding community or otherwise appropriate for the use in which the Mortgaged Property is currently being utilized, and (c) constitutes one or more separate tax parcels.

5.09 Licenses and Permits.

(a) Borrower, any commercial tenant of the Mortgaged Property and/or any operator of the Mortgaged Property is in possession of all material licenses, permits and authorizations required for use of the Mortgaged Property, which are valid and in full force and effect as of the date of this Loan Agreement.

(b) Through (i) are reserved.

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5.10 No Other Interests. To the best of Borrower’s knowledge after due inquiry and investigation, no Person has (a) any possessory interest in the Mortgaged Property or right to occupy the Mortgaged Property except under and pursuant to the provisions of existing Leases by and between tenants and Borrower (a form of residential lease having been previously provided to Lender together with the material terms of any and all Non-Residential Leases at the Mortgaged Property), or (b) an option to purchase the Mortgaged Property or an interest in the Mortgaged Property, except as has been disclosed to and approved in writing by Lender.

5.11 Term of Leases. All Leases for residential dwelling units with respect to the Mortgaged Property are on forms acceptable to Lender, are for initial terms of at least 6 months and not more than 2 years (unless otherwise approved in writing by Lender), and do not include options to purchase.

5.12 No Prior Assignment; Prepayment of Rents. Borrower has (a) not executed any prior assignment of Rents (other than an assignment of Rents securing any prior indebtedness that is being assigned to Lender, or that is being paid off and discharged with the proceeds of the Loan evidenced by the Note or, if this Loan Agreement is entered into in connection with a Supplemental Loan, other than an assignment of Rents securing any Senior Indebtedness), and (b) not performed any acts and has not executed, and will not execute, any instrument which would prevent Lender from exercising its rights under any Loan Document. At the time of execution of this Loan Agreement, unless otherwise approved by Lender in writing, there has been no prepayment of any Rents for more than 2 months prior to the due dates of such Rents.

5.13 Illegal Activity. No portion of the Mortgaged Property has been or will be purchased with the proceeds of any illegal activity.

5.14 Taxes Paid. Borrower has filed all federal, state, county and municipal tax returns required to have been filed by Borrower, and has paid all Taxes which have become due pursuant to such returns or to any notice of assessment received by Borrower, and Borrower has no knowledge of any basis for additional assessment with respect to such taxes. To the best of Borrower’s knowledge after due inquiry and investigation, there are not presently pending any special assessments against the Mortgaged Property or any part of the Mortgaged Property.

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5.15 Title Exceptions. To the best of Borrower’s knowledge after due inquiry and investigation, none of the items shown in the schedule of exceptions to coverage in the title policy issued to and accepted by Lender contemporaneously with the execution of this Loan Agreement and insuring Lender’s interest in the Mortgaged Property will have a Material Adverse Effect on the: (a) ability of Borrower to pay the Loan in full, (b) ability of Borrower to use all or any part of the Mortgaged Property in the manner in which the Mortgaged Property is being used on the Closing Date, except as set forth in Section 6.03, (c) operation of the Mortgaged Property, or (d) value of the Mortgaged Property.

5.16 No Change in Facts or Circumstances.

(a) All information in the application for the Loan submitted to Lender, including all financial statements for the Mortgaged Property, Borrower, and any Borrower Principal, and all Rent Schedules, reports, certificates, and any other documents submitted in connection with the application (collectively, “Loan Application”) is complete and accurate in all material respects as of the date such information was submitted to Lender.

(b) There has been no change in any fact or circumstance since the Loan Application was submitted to Lender that would make any information submitted as part of the Loan Application materially incomplete or inaccurate.

(c) The organizational structure of Borrower is as set forth in Exhibit H.

5.17 Financial Statements. The financial statements of Borrower and each Borrower Principal furnished to Lender as part of the Loan Application reflect in each case a positive net worth as of the date of the applicable financial statement.

5.18 ERISA – Borrower Status. Borrower represents as follows:

(a) Borrower is not an “investment company,” or a company under the Control of an “investment company,” as such terms are defined in the Investment Company Act of 1940, as amended.

(b) Borrower is not an “employee benefit plan,” as defined in Section 3(3) of ERISA, which is subject to Title I of ERISA or a “plan” to which Section 4975 of the Tax Code applies, and the assets of Borrower do not constitute “plan assets” of one or more such plans within the meaning of 29 C.F.R. Section 2510.3-101, as modified by Section 3(42) of ERISA.

(c) Borrower is not a "governmental plan" within the meaning of Section 3(32) of ERISA, and is not subject to state statutes regulating investments or fiduciary obligations with respect to governmental plans.

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5.19 No Fraudulent Transfer or Preference. No Borrower or Borrower Principal (a) has made, or is making in connection with and as security for the Loan, a transfer of an interest in the property of Borrower or Borrower Principal to or for the benefit of Lender or otherwise as security for any of the obligations under the Loan Documents which is or could constitute a voidable preference under federal bankruptcy, state insolvency or similar applicable creditors’ rights laws, or (b) has made, or is making in connection with the Loan, a transfer (including any transfer to or for the benefit of an insider under an employment contract) of an interest of Borrower or any Borrower Principal in property which is or could constitute a voidable preference under federal bankruptcy, state insolvency or similar applicable creditors’ rights laws, or (c) has incurred, or is incurring in connection with the Loan, any obligation (including any obligation to or for the benefit of an insider under an employment contract) which is or could constitute a fraudulent transfer under federal bankruptcy, state insolvency, or similar applicable creditors’ rights laws.

5.20 No Insolvency or Judgment.

(a) No Pending Proceedings or Judgments. No Borrower or Borrower Principal is (i) the subject of or a party to (other than as a creditor) any completed or pending bankruptcy, reorganization or insolvency proceeding, or (ii) the subject of any judgment unsatisfied of record or docketed in any court located in the United States.

(b) Insolvency. Borrower is not presently insolvent, and the Loan will not render Borrower insolvent. As used in this Section, the term “insolvent” means that the total of all of a Person’s liabilities (whether secured or unsecured, contingent or fixed, or liquidated or unliquidated) is in excess of the value of all of the assets of the Person that are available to satisfy claims of creditors.

5.21 Working Capital. After the Loan is made, Borrower intends to have sufficient working capital, including cash flow from the Mortgaged Property or other sources, not only to adequately maintain the Mortgaged Property, but also to pay all of Borrower’s outstanding debts as they come due (other than any balloon payment due upon the maturity of the Loan). Lender acknowledges that no members or partners of Borrower or any Borrower Principal will be obligated to contribute equity to Borrower for purposes of providing working capital to maintain the Mortgaged Property or to pay Borrower’s outstanding debts except as may otherwise be required under their organizational documents.

5.22    Cap Collateral. Reserved.

5.23 Ground Lease. Reserved.

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5.24 Purpose of Loan. The purpose of the Loan is as indicated by the checked boxes below:

[ ] Refinance Loan: The Loan is a refinancing of existing indebtedness and, except to the extent specifically required by Lender, there is to be no change in the ownership of either the Mortgaged Property or Borrower Principals. The intended use of any cash received by Borrower from Lender, to the extent applicable, in connection with the refinancing has been fully disclosed to Lender.

[ X ] Acquisition Loan: All of the consideration given or received or to be given or received in connection with the acquisition of the Mortgaged Property has been fully disclosed to Lender. The Mortgaged Property was or will be purchased from Carlyle Centennial Crest at Barrett Lakes, L.P., a Delaware limited partnership (“Property Seller”). No Borrower or Borrower Principal has or had, directly or indirectly (through a family member or otherwise), any interest in the Property Seller and the acquisition of the Mortgaged Property is an arm’s-length transaction. To the best of Borrower’s knowledge after due inquiry and investigation, the purchase price of the Mortgaged Property represents the fair market value of the Mortgaged Property and Property Seller is not or will not be insolvent subsequent to the sale of the Mortgaged Property.

[ ] Supplemental Loan: The Loan is a Supplemental Loan and, except to the extent specifically required or approved by Lender, there has been no change in the ownership of either the Mortgaged Property or Borrower Principals since the date of the Senior Note. The intended use of any cash received by Borrower from Lender, to the extent applicable, in connection with the refinancing has been fully disclosed to Lender.

[ ] Cross-Collateralized/Cross-Defaulted Loan Pool: The Loan is part of a cross-collateralized/cross-defaulted pool of loans described as follows:

____ being simultaneously made to Borrower and/or Borrower’s Affiliates

____ made previously to Borrower and/or Borrower’s Affiliates

The intended use of any cash received by Borrower from Lender, to the extent applicable, in connection with the Loan and the other loans comprising the cross-collateralized/cross-defaulted loan pool has been fully disclosed to Lender.

5.25 through 5.39 are reserved.

5.40    Recycled SPE Borrower. Reserved.

5.41    Recycled SPE Equity Owner. Reserved.

5.42 through 5.50 are reserved.

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5.51 Survival. The representations and warranties set forth in this Loan Agreement will survive until the Indebtedness is paid in full; however, the representations and warranties set forth in Section 5.05 will survive beyond repayment of the entire Indebtedness, to the extent provided in Section 10.02(i).

ARTICLE VI     BORROWER COVENANTS.

6.01 Compliance with Laws. Borrower will comply with all laws, ordinances, rules, regulations and requirements of any Governmental Authority having jurisdiction over the Mortgaged Property and all licenses and permits and all recorded covenants and agreements relating to or affecting the Mortgaged Property, including all laws, ordinances, regulations, requirements and covenants pertaining to health and safety, construction of improvements on the Mortgaged Property, Repairs, Capital Replacements, fair housing, disability accommodation, zoning and land use, applicable building codes, special use permits and environmental regulations, Leases and the maintenance and disposition of tenant security deposits. Borrower will take appropriate measures to prevent, and will not engage in or knowingly permit, any illegal activities at the Mortgaged Property, including those that could endanger tenants or visitors, result in damage to the Mortgaged Property, result in forfeiture of the Mortgaged Property, or otherwise materially impair the Lien created by the Security Instrument or Lender’s interest in the Mortgaged Property. Borrower will at all times maintain records sufficient to demonstrate compliance with the provisions of this Section 6.01.

6.02 Compliance with Organizational Documents. Borrower will at all times comply with all laws, regulations and requirements of any Governmental Authority relating to Borrower’s formation, continued existence and good standing in its state of formation and, if different, in the Property Jurisdiction. Borrower will at all times comply with its organizational documents, including its partnership agreement (if Borrower is a partnership), its by-laws (if Borrower is a corporation or housing cooperative corporation or association) or its operating agreement (if Borrower is a limited liability company or tenancy-in-common). If Borrower is a housing cooperative corporation or association, Borrower will at all times maintain its status as a “cooperative housing corporation” as such term is defined in Section 216(b) of the Internal Revenue Code of 1986, as amended, or any successor statute thereto.

6.03 Use of Mortgaged Property.

(a) Unless required by applicable law, without the prior written consent of Lender, Borrower will not take any of the following actions:

(i) Allow changes in the use for which all or any part of the Mortgaged Property is being used at the time this Loan Agreement is executed.

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(ii) Convert any individual dwelling units or common areas to commercial use.

(iii) Initiate a change in the zoning classification of the Mortgaged Property or acquiesce to a change in the zoning classification of the Mortgaged Property.

(iv) Establish any condominium or cooperative regime with respect to the Mortgaged Property beyond any which may be in existence on the date of this Loan Agreement.

(v) Combine all or any part of the Mortgaged Property with all or any part of a tax parcel which is not part of the Mortgaged Property.

(vi) Subdivide or otherwise split any tax parcel constituting all or any part of the Mortgaged Property.

(vii) Add to or change any location at which any of the Mortgaged Property is stored, held or located unless Borrower (A) gives Notice to Lender within 30 days after the occurrence of such addition or change, (B) executes and delivers to Lender any modifications of or supplements to this Loan Agreement that Lender may require, and (C) authorizes the filing of any financing statement which may be filed in connection with this Loan Agreement, as Lender may require.

(b) Reserved.

(c) Notwithstanding anything contained in this Section to the contrary, if Borrower is a housing cooperative corporation or association, Lender acknowledges and consents to Borrower’s use of the Mortgaged Property as a housing cooperative.

6.04 Non-Residential Leases.

(a) Prohibited New Non-Residential Leases or Modified Non-Residential Leases. Except as set forth in Section 6.04(b), Borrower will not enter into any New Non-Residential Lease, enter into any Modified Non-Residential Lease or terminate any Non-Residential Lease (including any Non-Residential Lease in existence on the date of this Loan Agreement) without the prior written consent of Lender.

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(b) New Non-Residential Leases or Modified Non-Residential Leases for which Lender’s Consent is Not Required. Lender’s consent will not be required for Borrower to enter into a Modified Non-Residential Lease or a New Non-Residential Lease, provided that the Modified Non-Residential Lease or New Non-Residential Lease satisfies each of the following requirements:

(i) The tenant under the New Non-Residential Lease or Modified Non-Residential Lease is not an Affiliate of Borrower or any Guarantor.

(ii) The terms of the New Non-Residential Lease or Modified Non-Residential Lease are at least as favorable to Borrower as those customary in the applicable market at the time Borrower enters into the New Non-Residential Lease or Modified Non-Residential Lease.

(iii) The Rents paid to Borrower pursuant to the New Non-Residential Lease or Modified Non-Residential Lease are not less than 90% of the rents paid to Borrower pursuant to the Non-Residential Lease, if any, for that portion of the Mortgaged Property that was in effect prior to the New Non-Residential Lease or Modified Non-Residential Lease.

(iv) The term of the New Non-Residential Lease or Modified Non-Residential Lease, including any option to extend, is 10 years or less.

(v) Any New Non-Residential Lease must provide that the space may not be used or operated, in whole or in part, for any of the following:

(A) The operation of a so-called “head shop” or other business devoted to the sale of articles or merchandise normally used or associated with illegal or unlawful activities such as, but not limited to, the sale of paraphernalia used in connection with marijuana or controlled drugs or substances.

(B) A gun shop, shooting gallery or firearms range.

(C) A so-called massage parlor or any business which sells, rents or permits the viewing of so-called “adult” or pornographic materials such as, but not limited to, adult magazines, books, movies, photographs, sexual aids, sexual articles and sex paraphernalia.

(D) Any use involving the sale or distribution of any flammable liquids, gases or other Hazardous Materials.

(E) An off-track betting parlor or arcade.

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(F) A liquor store or other establishment whose primary business is the sale of alcoholic beverages for off-site consumption.

(G) A burlesque or strip club.

(H) Any illegal activity.

(vi) The aggregate of the income derived from the space leased pursuant to the New Non-Residential Lease accounts for less than 20% of the gross income of the Mortgaged Property on the date that Borrower enters into the New Non-Residential Lease.

(vii) Such New Non-Residential Lease is not an oil or gas lease, pipeline agreement or other instrument related to the production or sale of oil or natural gas.

(c) Executed Copies of Non-Residential Leases. Borrower will, without request by Lender, deliver a fully executed copy of each Non-Residential Lease to Lender promptly after such Non-Residential Lease is signed.

(d) Subordination and Attornment Requirements. All Non-Residential Leases, regardless of whether Lender’s consent or approval is required, will specifically include the following provisions:

(i) The Lease is subordinate to the Lien of the Security Instrument, with such subordination to be self-executing.

(ii) The tenant will attorn to Lender and any purchaser at a foreclosure sale, such attornment to be self-executing and effective upon acquisition of title to the Mortgaged Property by any purchaser at a foreclosure sale or by Lender in any manner.

(iii) The tenant agrees to execute such further evidences of attornment as Lender or any purchaser at a foreclosure sale may from time to time request.

(iv) The tenant will, upon receipt of a written request from Lender following the occurrence of and during the continuance of an Event of Default, pay all Rents payable under the Lease to Lender.

(v)    Reserved.

(vi)    Reserved.

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6.05 Prepayment of Rents. Borrower will not receive or accept Rent under any Lease (whether a residential Lease or a Non-Residential Lease) for more than 2 months in advance.

6.06 Inspection.

(a) Right of Entry. Borrower will permit Lender, its agents, representatives and designees and any interested Governmental Authority to make or cause to be made entries upon and inspections of the Mortgaged Property to inspect, among other things: (i) Repairs, (ii) Capital Replacements, in process and upon completion, and (iii) Improvements (including environmental inspections and tests performed by professional inspection engineers) during normal business hours, or at any other reasonable time, upon reasonable Notice to Borrower if the inspection is to include occupied residential units (which Notice need not be in writing). During normal business hours, or at any other reasonable time, Borrower will also permit Lender to examine all books and records and contracts and bills pertaining to the foregoing. Notice to Borrower will not be required in the case of an emergency, as determined in Lender’s Discretion, or when an Event of Default has occurred and is continuing.

(b) Inspection of Mold. If Lender determines that Mold has or may have developed as a result of a water intrusion event or leak, Lender, at Lender’s Discretion, may require that a professional inspector inspect the Mortgaged Property to confirm whether Mold has developed and, if so, thereafter as frequently as Lender determines is necessary until any issue with Mold and its cause(s) are resolved to Lender’s satisfaction. Such inspection will be limited to a visual and olfactory inspection of the area that has experienced the Mold, water intrusion event or leak. Borrower will be responsible for the cost of each such professional inspection and any remediation deemed to be necessary as a result of the professional inspection. After any issue with Mold is remedied to Lender’s satisfaction, Lender will not require a professional inspection any more frequently than once every 3 years unless Lender otherwise becomes aware of Mold as a result of a subsequent water intrusion event or leak.

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(c) Certification in Lieu of Inspection. If Lender or Loan Servicer determines not to conduct an annual inspection of the Mortgaged Property, and in lieu thereof Lender requests a certification, Borrower will provide to Lender a factually correct certification, each year that the annual inspection is waived, to the following effect:

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

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

6.07    Books and Records; Financial Reporting.

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

(b) Delivery of Statement of Income and Expenses; Rent Schedule and Other Statements. Borrower will furnish to Lender each of the following:

(i) Within 25 days after the end of each calendar quarter prior to Securitization and within 35 days after each calendar quarter after Securitization, each of the following:

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(A) A Rent Schedule dated no earlier than the date that is 5 days prior to the end of such quarter.

(B) A statement of income and expenses for Borrower’s operation of the Mortgaged Property that is either of the following:

(1) For the 12 month period ending on the last day of such quarter.

(2) If at the end of such quarter Borrower or any Affiliate of Borrower has owned the Mortgaged Property for less than 12 months, for the period commencing with the acquisition of the Mortgaged Property by Borrower or its Affiliate, and ending on the last day of such quarter.

(C) When requested by Lender, a balance sheet showing all assets and liabilities of Borrower relating to the Mortgaged Property as of the end of that fiscal quarter.

(ii) Within 90 days after the end of each fiscal year of Borrower, each of the following:

(A) An annual statement of income and expenses for Borrower’s operation of the Mortgaged Property for that fiscal year.

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

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

(iii) Within 30 days after the date of filing, copies of all tax returns filed by Borrower.

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(c) Delivery of Borrower Financial Statements Upon Request. Borrower will furnish to Lender each of the following:

(i) Upon Lender’s request, in Lender’s sole and absolute discretion prior to a Securitization, and thereafter upon Lender’s request in Lender’s Discretion, a monthly Rent Schedule and a monthly statement of income and expenses for Borrower’s operation of the Mortgaged Property, in each case within 25 days after the end of each month.

(ii) Upon Lender’s request in Lender’s sole and absolute discretion prior to a Securitization, and thereafter upon Lender’s request in Lender’s Discretion, a statement that identifies all owners of any interest in Borrower and any Designated Entity for Transfers and the interest held by each (unless Borrower or any Designated Entity for Transfers is a publicly-traded entity in which case such statement of ownership will not be required), and if Borrower or a Designated Entity for Transfers is a corporation then all officers and directors of Borrower and the Designated Entity for Transfers, and if Borrower or a Designated Entity for Transfers is a limited liability company then all Managers who are not members, in each case within 10 days after such request.

(iii) Upon Lender’s request in Lender’s Discretion, such other financial information or property management information (including information on tenants under Leases to the extent such information is available to Borrower, copies of bank account statements from financial institutions where funds owned or controlled by Borrower are maintained, and an accounting of security deposits) as may be required by Lender from time to time, in each case within 30 days after such request.

(iv) Upon Lender’s request in Lender’s Discretion, a monthly property management report for the Mortgaged Property, showing the number of inquiries made and rental applications received from tenants or prospective tenants and deposits received from tenants and any other information requested by Lender within 30 days after such request. However, Lender will not require the foregoing more frequently than quarterly except when there has been an Event of Default and such Event of Default is continuing, in which case Lender may require Borrower to furnish the foregoing more frequently.

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(d) Form of Statements; Audited Financials. A natural person having authority to bind Borrower (or the SPE Equity Owner or Guarantor, as applicable) will certify each of the statements, schedules and reports required by Sections 6.07(b), 6.07(c) and 6.07(f) to be complete and accurate. Each of the statements, schedules and reports required by Sections 6.07(b), 6.07(c) and 6.07(f) will be in such form and contain such detail as Lender may reasonably require. Lender also may require that any of the statements, schedules or reports listed in Sections 6.07(b), 6.07(c) and 6.07(f) be audited at Borrower’s expense by independent certified public accountants acceptable to Lender, at any time when an Event of Default has occurred and is continuing or at any time that Lender, in its reasonable judgment, determines that audited financial statements are required for an accurate assessment of the financial condition of Borrower or of the Mortgaged Property.

(e) Failure to Timely Provide Financial Statements. If Borrower fails to provide in a timely manner the statements, schedules and reports required by Sections 6.07(b), 6.07(c) and 6.07(f), Lender will give Notice to Borrower specifying the statements, schedules and reports required by Sections 6.07(b), 6.07(c) and 6.07(f) that Borrower has failed to provide. If Borrower has not provided the required statements, schedules and reports within 10 Business Days following such Notice, then (i) Borrower will pay a late fee of $500 for each late statement, schedule or report, plus an additional $500 per month that any such statement, schedule or report continues to be late, and (ii) Lender will have the right to have Borrower’s books and records audited, at Borrower’s expense, by independent certified public accountants selected by Lender in order to obtain such statements, schedules and reports, and all related costs and expenses of Lender will become immediately due and payable and will become an additional part of the Indebtedness as provided in Section 9.02. Notice to Borrower of Lender’s exercise of its rights to require an audit will not be required in the case of an emergency, as determined in Lender’s Discretion, or when an Event of Default has occurred and is continuing.

(f) Delivery of Guarantor and SPE Equity Owner Financial Statements Upon Request. Borrower will cause each Guarantor and, at Lender’s request in Lender’s Discretion, any SPE Equity Owner, to provide to Lender (i) within 90 days after the close of such party’s fiscal year, such party’s balance sheet and profit and loss statement (or if such party is a natural person, within 90 days after the close of each calendar year, such party’s personal financial statements) in form reasonably satisfactory to Lender and certified by such party to be accurate and complete, and (ii) such additional financial information (including copies of state and federal tax returns with respect to any SPE Equity Owner but Lender will only require copies of such tax returns with respect to each Guarantor if an Event of Default has occurred and is continuing) as Lender may reasonably require from time to time and in such detail as reasonably required by Lender.

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(g) Reporting Upon Event of Default. If an Event of Default has occurred and is continuing, Borrower will deliver to Lender upon written demand all books and records relating to the Mortgaged Property or its operation.

(h) Credit Reports. Borrower authorizes Lender to obtain a credit report on Borrower at any time.

(i) Reserved.

6.08 Taxes; Operating Expenses; Ground Rents.

(a) Payment of Taxes and Ground Rent. Subject to the provisions of Sections 6.08(c) and (d), Borrower will pay or cause to be paid (i) all Taxes when due and before the addition of any interest, fine, penalty or cost for nonpayment, and (ii) if Borrower’s interest in the Mortgaged Property is as a Ground Lessee, then the monthly or other periodic installments of Ground Rent before the last date upon which each such installment may be made without penalty or interest charges being added.

(b) Payment of Operating Expenses. Subject to the provisions of Section 6.08(c), Borrower will (i) pay the expenses of operating, managing, maintaining and repairing the Mortgaged Property (including utilities, Repairs and Capital Replacements) before the last date upon which each such payment may be made without any penalty or interest charge being added, and (ii) pay Insurance premiums at least 30 days prior to the expiration date of each policy of Insurance, unless applicable law specifies some lesser period.

(c) Payment of Impositions and Reserve Funds. If Lender is collecting Imposition Reserve Deposits pursuant to Article IV, then so long as no Event of Default exists, Borrower will not be obligated to pay any Imposition for which Imposition Reserve Deposits are being collected, whether Taxes, Insurance premiums, Ground Rent (if applicable) or any other individual Impositions, but only to the extent that sufficient Imposition Reserve Deposits are held by Lender for the purpose of paying that specific Imposition and Borrower has timely delivered to Lender any bills or premium notices that it has received with respect to that specific Imposition (other than Ground Rent). Lender will have no liability to Borrower for failing to pay any Impositions to the extent that: (i) any Event of Default has occurred and is continuing, (ii) insufficient Imposition Reserve Deposits are held by Lender at the time an Imposition becomes due and payable, or (iii) Borrower has failed to provide Lender with bills and premium notices as provided in this Section.

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(d) Right to Contest. Borrower, at its own expense, may contest by appropriate legal proceedings, conducted diligently and in good faith, the amount or validity of any Imposition other than Insurance premiums and Ground Rent (if applicable), if: (i) Borrower notifies Lender of the commencement or expected commencement of such proceedings, (ii) the Mortgaged Property is not in danger of being sold or forfeited, (iii) if Borrower has not already paid the Imposition, Borrower deposits with Lender reserves sufficient to pay the contested Imposition, if requested by Lender, and (iv) Borrower furnishes whatever additional security is required in the proceedings or is reasonably requested by Lender, which may include the delivery to Lender of reserves established by Borrower to pay the contested Imposition.

6.09 Preservation, Management and Maintenance of Mortgaged Property.

(a) Maintenance of Mortgaged Property; No Waste. Borrower will keep the Mortgaged Property in good repair, including the replacement of Personalty and Fixtures with items of equal or better function and quality. Borrower will not commit waste or permit impairment or deterioration of the Mortgaged Property.

(b) Abandonment of Mortgaged Property. Borrower will not abandon the Mortgaged Property.

(c) Preservation of Mortgaged Property. Borrower will restore or repair promptly, in a good and workmanlike manner, any damaged part of the Mortgaged Property to the equivalent of its original condition, or such other condition as Lender may approve in writing, whether or not Insurance proceeds or Condemnation awards are available to cover any costs of such Restoration or repair; provided, however, that Borrower will not be obligated to perform such Restoration or repair if (i) no Event of Default has occurred and is continuing, and (ii) Lender has elected to apply any available Insurance proceeds and/or Condemnation awards to the payment of Indebtedness pursuant to Section 6.10(l) or Section 6.11(d).

(d) Property Management. Borrower will provide for professional management of the Mortgaged Property by the Property Manager at all times under a property management agreement approved by Lender in writing. Borrower will not surrender, terminate, cancel, modify, renew or extend its property management agreement, or enter into any other agreement relating to the management or operation of the Property with Property Manager or any other Person, or consent to the assignment by the Property Manager of its interest under such property management agreement, in each case without the consent of Lender, which consent will not be unreasonably withheld.

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(i) If at any time Lender consents to the appointment of a new Property Manager, such new Property Manager and Borrower will, as a condition of Lender’s consent, execute an Assignment of Management Agreement in a form acceptable to Lender.

(ii) If any such replacement Property Manager is an Affiliate of Borrower, and if a nonconsolidation opinion was delivered on the Closing Date, Borrower will deliver to Lender an updated nonconsolidation opinion in form and substance satisfactory to Lender with regard to nonconsolidation.

(iii) Reserved.

(e) Alteration of Mortgaged Property. Borrower will give Notice to Lender of and, unless otherwise directed in writing by Lender, will appear in and defend any action or proceeding purporting to affect the Mortgaged Property, Lender’s security or Lender’s rights under this Loan Agreement. Borrower will not (and will not permit any tenant or other Person to) remove, demolish or alter the Mortgaged Property or any part of the Mortgaged Property, including any removal, demolition or alteration occurring in connection with a rehabilitation of all or part of the Mortgaged Property, except that each of the following is permitted:

(i) Repairs or Capital Replacements pursuant to Sections 4.03 or 4.04.

(ii) Repairs or Capital Replacements made in connection with the replacement of tangible Personalty.

(iii) If Borrower is a cooperative housing corporation or association, Repairs or Capital Replacements to the extent permitted with respect to individual dwelling units under the form of a proprietary lease or occupancy agreement.

(iv)  Repairs orCapital Replacements in connection with making an individual unit ready for a new occupant or pursuant to Sections 6.09(a) and (c).

(v)    Reserved.

(vi)    Reserved.

(vii)    Reserved.

(viii)    Reserved.

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(f) Establishment of MMP. Unless otherwise waived by Lender in writing, Borrower will have or will establish and will adhere to the MMP. If Borrower is required to have an MMP, Borrower will keep all MMP documentation at the Mortgaged Property or at the Property Manager’s office and available for review by Lender or the Loan Servicer during any annual assessment or other inspection of the Mortgaged Property that is required by Lender. At a minimum, the MMP must contain a provision for: (i) staff training, (ii) information to be provided to tenants, (iii) documentation of the plan, (iv) the appropriate protocol for incident response and remediation, and (v) routine, scheduled inspections of common space and unit interiors.

(g) No Reduction of Housing Cooperative Charges. If Borrower is a housing cooperative corporation or association, until the Indebtedness is paid in full, Borrower will not reduce the maintenance fees, charges or assessments payable by shareholders or residents under proprietary leases or occupancy agreements below a level which is sufficient to pay all expenses of Borrower, including all operating and other expenses for the Mortgaged Property and all payments due pursuant to the terms of the Note and any Loan Documents.

(h) through (k) are reserved.

6.10 Insurance. At all times during the term of this Loan Agreement, Borrower will maintain at its sole cost and expense, for the mutual benefit of Borrower and Lender, all of the Insurance specified in this Section 6.10, as required by Lender and applicable law, and in such amounts and with such maximum deductibles as Lender may require, as those requirements may change:

(a) Hazard Insurance. Borrower will keep the Improvements insured at all times against relevant physical hazards that may cause damage to the Mortgaged Property as Lender may require (“Hazard Insurance”). Required Hazard Insurance coverage may include any or all of the following:

(i) All Risks of Physical Loss. Insurance against loss or damage from fire, wind, hail, flood, and other related perils within the scope of a “Special Causes of Loss” or “All Risk” policy, in an amount not less than the Replacement Cost of the Mortgaged Property.

(ii) Ordinance and Law. If the Mortgaged Property constitutes a legal non-conforming use, then “Ordinance and Law Coverage” in the amount required by Lender, including the follow endorsements:

(A)    “Loss to the Undamaged Portion of the Building.”

(B)    “Demolition Cost.”

(C)    “Increased Cost of Construction.”

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(D)    “Increased Period of Restoration.”

(iii) Flood. If any of the Improvements are located in an area identified by the Federal Emergency Management Agency (or any successor to that agency) as a “Special Flood Hazard Area,” flood Insurance in the amount required by Lender.

(iv) Windstorm. If windstorm and/or windstorm related perils and/or “named storm” are excluded from the “Special Causes of Loss” policy required under Section 6.10(a)(i), then separate coverage for such risks (“Windstorm Coverage”), either through an endorsement or a separate policy. Windstorm Coverage will be written in an amount not less than the Replacement Cost of the Mortgaged Property.

(v) Boiler and Machinery/Equipment Breakdown. If the Mortgaged Property contains a central heating, ventilation and cooling system (“HVAC System”) where steam boilers and/or other pressurized systems are in operation and are regulated by the Property Jurisdiction, Insurance providing coverage in the amount required by Lender for:

(A)    Damage to the HVAC System.

(B) Other portions of the Mortgaged Property if the damage is the result of an explosion of steam boilers, pressure vessels or similar apparatus now or in the future installed at the Mortgaged Property.

(vi) Builder’s Risk. During any period of construction or Restoration, builder’s risk Insurance (including fire and other perils within the scope of a policy known as “Causes of Loss – Special Form” or “All Risk” policy) in an amount not less than the sum of the related contractual arrangements.

(vii) Other. Insurance for other physical perils applicable to the Mortgaged Property as may be required by Lender including earthquake, sinkhole, mine subsidence, avalanche, mudslides, and volcanic eruption. If Lender reasonably requires any updated reports or other documentation to determine whether additional Insurance is necessary or prudent, Borrower will pay for the updated reports or other documentation at its sole cost and expense.

(viii) Reserved.

(ix)    Reserved.

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(b) Business Income/Rental Value. Business income/rental value Insurance for all relevant perils to be covered in the amount required by Lender, but in no case less than the effective gross income attributable to the Mortgaged Property for the preceding 12 months, as determined by Lender in Lender’s Discretion, and otherwise sufficient to avoid any co-insurance provisions.

(c) Commercial General Liability Insurance. Commercial general liability Insurance against legal liability claims for personal and bodily injury, property damage and contractual liability in such amounts and with such maximum deductibles as Lender may require, but not less than $1,000,000 per occurrence and $2,000,000 in the general aggregate on a per-location basis, plus excess and/or umbrella liability coverage in such amounts as Lender may require.

(d) Terrorism Insurance. Insurance required under Section 6.10(a)(i) and (ii) and Section 6.10(b) will provide coverage for acts of terrorism. Terrorism coverage may be provided through one or more separate policies, which will be on terms (including amounts) consistent with those required under Section 6.10(a)(i) and (ii) and Section 6.10(b).

(e) Payment of Premiums. All Hazard Insurance premiums and premiums for other Insurance required under this Section 6.10 will be paid in the manner provided in Article IV, unless Lender has designated in writing another method of payment.

(f) Policy Requirements. The following requirements apply with respect to all Insurance required by this Section 6.10:

(i) All Insurance policies will be in a form approved by Lender.

(ii) All Insurance policies will be issued by Insurance companies authorized to do business in the Property Jurisdiction and/or acting as eligible surplus insurers in the Property Jurisdiction, which have a general policyholder’s rating satisfactory to Lender.

(iii) All Hazard Insurance policies will contain a standard mortgagee or mortgage holder’s clause and a loss payable clause, in favor of, and in a form approved by, Lender.

(iv) If any Insurance policy contains a coinsurance clause, the coinsurance clause will be offset by an agreed amount endorsement in an amount not less than the Replacement Cost.

(v) All commercial general liability and excess/umbrella liability policies will name Lender, its successors and/or assigns, as additional insured.

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(vi) Professional liability policies will not include Lender, its successors and/or assigns, as additional insured.

(vii) All Hazard Insurance policies and liability Insurance policies will provide that the insurer will notify Lender in writing of cancelation of policies at least 10 days before the cancelation of the policy by the insurer for nonpayment of the premium or nonrenewal and at least 30 days before cancelation by the insurer for any other reason.

(g) Evidence of Insurance; Insurance Policy Renewals. Borrower will deliver to Lender a legible copy of each Insurance policy, and Borrower will promptly deliver to Lender a copy of all renewal and other notices received by Borrower with respect to the policies. Borrower will ensure that the Mortgaged Property is continuously covered by the required Insurance. At least 15 days prior to the expiration date of each Insurance policy, Borrower will deliver to Lender evidence acceptable to Lender in Lender’s Discretion that each policy has been renewed. If the evidence of a renewal does not include a legible copy of the renewal policy, Borrower will deliver a legible copy of such renewal no later than the earlier of the following:

(i)     60 days after the expiration date of the original policy.

(ii) The date of any Notice of an insured loss given to Lender under Section 6.10(i).

(h) Compliance With Insurance Requirements. Borrower will comply with all Insurance requirements and will not permit any condition to exist on the Mortgaged Property that would invalidate any part of any Insurance coverage required under this Loan Agreement.

(i) Obligations Upon Casualty; Proof of Loss.

(i) If an insured loss occurs, then Borrower will give immediate written notice to the Insurance carrier and to Lender.

(ii) Borrower authorizes and appoints Lender as attorney in fact for Borrower to make proof of loss, to adjust and compromise any claims under policies of Hazard Insurance, to appear in and prosecute any action arising from such Hazard Insurance policies, to collect and receive the proceeds of Hazard Insurance, to hold the proceeds of Hazard Insurance, and to deduct from such proceeds Lender’s expenses incurred in the collection of such proceeds. This power of attorney is coupled with an interest and therefore is irrevocable. However, nothing contained in this Section 6.10 will require Lender to incur any expense or take any action.

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(j) Lender’s Options Following a Casualty. Lender may, at Lender’s option, take one of the following actions:

(i) Require a “repair or replacement” settlement, in which case the proceeds will be used to reimburse Borrower for the cost of restoring and repairing the Mortgaged Property to the equivalent of its original condition or to a condition approved by Lender (“Restoration”). If Lender determines to require a repair or replacement settlement and to apply Insurance proceeds to Restoration, Lender will apply the proceeds in accordance with Lender’s then-current policies relating to the Restoration of casualty damage on similar multifamily properties.

(ii) Require an “actual cash value” settlement in which case the proceeds may be applied to the payment of the Indebtedness, whether or not then due.

(k) Borrower’s Options Following a Casualty. Subject to Section 6.10(l), Borrower may take the following actions:

(i) If a casualty results in damage to the Mortgaged Property for which the cost of Repairs will be less than the Borrower Proof of Loss Threshold, Borrower will have the sole right to make proof of loss, adjust and compromise the claim and collect and receive any proceeds directly without the approval or prior consent of Lender so long as the Insurance proceeds are used solely for the Restoration of the Mortgaged Property.

(ii) If a casualty results in damage to the Mortgaged Property for which the cost of Repairs will be more than the Borrower Proof of Loss Threshold, but less than the Borrower Proof of Loss Maximum, Borrower is authorized to make proof of loss and adjust and compromise the claim without the prior consent of Lender, and Lender will hold the applicable Insurance proceeds to be used to reimburse Borrower for the cost of Restoration of the Mortgaged Property and will not apply such proceeds to the payment of the Indebtedness.

(l) Lender’s Right to Apply Insurance Proceeds to Indebtedness. Lender will have the right to apply Insurance proceeds to the payment of the Indebtedness if Lender determines, in Lender’s Discretion, that any of the following conditions are met:

(i) An Event of Default (or any event, which, with the giving of Notice or the passage of time, or both, would constitute an Event of Default) has occurred and is continuing.

(ii) There will not be sufficient funds from Insurance proceeds, anticipated contributions of Borrower of its own funds or other sources acceptable to Lender to complete the Restoration.

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(iii) The rental income from the Mortgaged Property after completion of the Restoration will not be sufficient to meet all operating costs and other expenses, deposits to Reserve Funds and Loan repayment obligations relating to the Mortgaged Property.

(iv) The Restoration will be completed less than (A) 6 months prior to the Maturity Date if re-leasing will be completed prior to the Maturity Date, or (B) 12 months prior to the Maturity Date if re-leasing will not be completed prior to the Maturity Date.

(v) The Restoration will not be completed within one year after the date of the loss or casualty.

(vi) The casualty involved an actual or constructive loss of more than 30% of the fair market value of the Mortgaged Property, and rendered untenantable more than 30% of the residential units of the Mortgaged Property.

(vii) After completion of the Restoration the fair market value of the Mortgaged Property is expected to be less than the fair market value of the Mortgaged Property immediately prior to such casualty (assuming the affected portion of the Mortgaged Property is re-let within a reasonable period after the date of such casualty).

(viii) Leases covering less than 35% of the residential units of the Mortgaged Property will remain in full force and effect during and after the completion of Restoration.

(m) Lender’s Succession to Insurance Policies. If the Mortgaged Property is sold at a foreclosure sale or Lender acquires title to the Mortgaged Property, Lender will automatically succeed to all rights of Borrower in and to any Insurance policies and unearned Insurance premiums and in and to the proceeds resulting from any damage to the Mortgaged Property prior to such sale or acquisition.

(n) Payment of Installments After Application of Insurance Proceeds. Unless Lender otherwise agrees in writing, any application of any Insurance proceeds to the Indebtedness will not extend or postpone the due date of any monthly installments referred to in the Note, Article IV of this Loan Agreement or change the amount of such installments.

(o) Assignment of Insurance Proceeds. Borrower agrees to execute such further evidence of assignment of any Insurance proceeds as Lender may require.

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(p) Borrower Acknowledgment of Lender’s Right to Change Insurance Requirements. Borrower acknowledges and agrees that Lender’s Insurance requirements may change from time to time throughout the term of the Indebtedness.

6.11 Condemnation.

(a) Rights Generally. Borrower will promptly notify Lender in writing of any action or proceeding or notice relating to any proposed or actual condemnation or other taking, or conveyance in lieu thereof, of all or any part of the Mortgaged Property, whether direct or indirect (“Condemnation”). Borrower will appear in and prosecute or defend any action or proceeding relating to any Condemnation unless otherwise directed by Lender in writing. Borrower authorizes and appoints Lender as attorney in fact for Borrower to commence, appear in and prosecute, in Lender’s or Borrower’s name, any action or proceeding relating to any Condemnation and to settle or compromise any claim in connection with any Condemnation, after consultation with Borrower and consistent with commercially reasonable standards of a prudent lender. This power of attorney is coupled with an interest and therefore is irrevocable. However, nothing contained in this Section 6.11(a) will require Lender to incur any expense or take any action. Borrower transfers and assigns to Lender all right, title and interest of Borrower in and to any award or payment with respect to (i) any Condemnation, or any conveyance in lieu of Condemnation, and (ii) any damage to the Mortgaged Property caused by governmental action that does not result in a Condemnation.

(b) Application of Award. Lender may hold such awards or proceeds andapply such awards or proceeds, after the deduction of Lender’s expenses incurred in the collection of such amounts (including Attorneys’ Fees and Costs) at Lender’s option, to the Restoration or repair of the Mortgaged Property or to the payment of the Indebtedness, with the balance, if any, to Borrower. Unless Lender otherwise agrees in writing, any application of any awards or proceeds to the Indebtedness will not extend or postpone the due date of any monthly installments referred to in the Note or Article IV of this Loan Agreement, or change the amount of such installments. Borrower agrees to execute such further evidence of assignment of any Condemnation awards or proceeds as Lender may require.

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(c) Borrower’s Right to Condemnation Proceeds. Notwithstanding any provision to the contrary in this Section 6.11, but subject to Section 6.11(e), in the event of a partial Condemnation of the Mortgaged Property, as long as no Event of Default, or any event which, with the giving of Notice or the passage of time, or both, would constitute an Event of Default, has occurred and is continuing, in the event of a partial Condemnation resulting in proceeds or awards in the amount of less than $100,000, Borrower will have the sole right to make proof of loss, adjust and compromise the claim and collect and receive any proceeds directly without the approval or prior consent of Lender so long as the proceeds or awards are used solely for the Restoration of the Mortgaged Property.

(d) Right to Apply Condemnation Proceeds to Indebtedness. In the event of a partial Condemnation of the Mortgaged Property resulting in proceeds or awards in the amount of $100,000 or more and subject to Section 6.11(e), Lender will have the right to exercise its option to apply Condemnation proceeds to the payment of the Indebtedness only if Lender, in Lender’s Discretion, determines that at least one of the following conditions is met:

(i) An Event of Default (or any event, which, with the giving of Notice or the passage of time, or both, would constitute an Event of Default) has occurred and is continuing.

(ii) There will not be sufficient funds from Condemnation proceeds, anticipated contributions of Borrower of its own funds or other sources acceptable to Lender to complete the Restoration.

(iii) The rental income from the Mortgaged Property after completion of the Restoration will not be sufficient to meet all operating costs and other expenses, deposits to Reserve Funds and Loan repayment obligations relating to the Mortgaged Property.

(iv) The Restoration will not be completed at least one year before the Maturity Date (or 6 months before the Maturity Date if re-leasing of the Mortgaged Property will be completed within such 6 month period).

(v) The Restoration will not be completed within one year after the date of the Condemnation.

(vi) The Condemnation involved an actual or constructive loss of more than 15% of the fair market value of the Mortgaged Property, and rendered untenantable more than 25% of the residential units of the Mortgaged Property.

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(vii) After Restoration the fair market value of the Mortgaged Property is expected to be less than the fair market value of the Mortgaged Property immediately prior to the Condemnation (assuming the affected portion of the Mortgaged Property is re-let within a reasonable period after the date of the Condemnation).

(viii) Leases covering less than 35% of residential units of the Mortgaged Property will remain in full force and effect during and after the completion of Restoration.

(e) Right to Apply Condemnation Proceeds in Connection with a Partial Release. Notwithstanding anything to the contrary set forth in this Loan Agreement, including this Section 6.11, for so long as the Loan or any portion of the Loan is included in a Securitization, then each of the following will apply:

(i) If any portion of the Mortgaged Property is released from the Lien of the Loan in connection with a Condemnation and if the ratio of (A) the unpaid principal balance of the Loan to (B) the value of the Mortgaged Property (taking into account only the related land and buildings and not any personal property or going-concern value), as determined by Lender in its sole and absolute discretion based on a commercially reasonable valuation method permitted in connection with a Securitization, is greater than 125% immediately after such Condemnation and before any Restoration or repair of the Mortgaged Property (but taking into account any planned Restoration or repair of the Mortgaged Property as if such planned Restoration or repair were completed), then Lender will apply any net proceeds or awards from such Condemnation, in full, to the payment of the principal of the Indebtedness whether or not then due and payable, unless Lender has received an opinion of counsel that a different application of such net proceeds or awards will not cause such Securitization to fail to meet applicable federal income tax qualification requirements or subject such Securitization to any tax.

(ii) If neither Borrower nor Lender has the right to receive any or all net proceeds or awards as a result of the provisions of any agreement affecting the Mortgaged Property (including any Ground Lease, condominium document, or reciprocal easement agreement) and, therefore cannot apply such net proceeds or awards to the payment of the principal of the Indebtedness as set forth above, then Borrower will prepay the Indebtedness in an amount which Lender, in its sole and absolute discretion, deems necessary to ensure that the Securitization will not fail to meet applicable federal income tax qualification requirements or be subject to any tax as a result of the Condemnation.

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(f) Succession to Condemnation Proceeds. If the Mortgaged Property is sold at a foreclosure sale or Lender acquires title to the Mortgaged Property, Lender will automatically succeed to all rights of Borrower in and to any Condemnation proceeds and awards prior to such sale or acquisition.

6.12 Environmental Hazards.

(a) Prohibited Activities and Conditions. Except for matters described in this Section 6.12, Borrower will not cause or permit Prohibited Activities or Conditions. Borrower will comply with all Hazardous Materials Laws applicable to the Mortgaged Property. Without limiting the generality of the previous sentence, Borrower will: (i) obtain and maintain all Environmental Permits required by Hazardous Materials Laws and comply with all conditions of such Environmental Permits, (ii) cooperate with any inquiry by any Governmental Authority, and (iii) comply with any governmental or judicial order that arises from any alleged Prohibited Activity or Condition.

(b) Employees, Tenants and Contractors. Borrower will take all commercially reasonable actions (including the inclusion of appropriate provisions in any Leases executed after the date of this Loan Agreement) to prevent its employees, agents and contractors, and all tenants and other occupants from causing or permitting any Prohibited Activities or Conditions. Borrower will not lease or allow the sublease or use of all or any portion of the Mortgaged Property to any tenant or subtenant for nonresidential use by any user that, in the ordinary course of its business, would cause or permit any Prohibited Activity or Condition.

(c) O&M Programs. As required by Lender, Borrower will also have established a written operations and maintenance program with respect to certain Hazardous Materials. Each such operations and maintenance program and any additional or revised operations and maintenance programs established for the Mortgaged Property pursuant to this Section 6.12 must be approved by Lender and will be referred to in this Loan Agreement as an “O&M Program.” Borrower will comply in a timely manner with, and cause all employees, agents, and contractors of Borrower and any other Persons present on the Mortgaged Property to comply with each O&M Program. Borrower will pay all costs of performance of Borrower’s obligations under any O&M Program, and Lender’s out of pocket costs incurred in connection with the monitoring and review of each O&M Program must be paid by Borrower upon demand by Lender. Any such out-of-pocket costs of Lender that Borrower fails to pay promptly will become an additional part of the Indebtedness as provided in Section 9.02.

(d) Notice to Lender. Borrower will promptly give Notice to Lender upon the occurrence of any of the following events:

(i) Borrower’s discovery of any Prohibited Activity or Condition.

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(ii) Borrower’s receipt of or knowledge of any written complaint, order, notice of violation or other communication from any tenant, Property Manager, Governmental Authority or other Person with regard to present or future alleged Prohibited Activities or Conditions, or any other environmental, health or safety matters affecting the Mortgaged Property.

(iii) Borrower’s breach of any of its obligations under this Section 6.12.

Any such Notice given by Borrower will not relieve Borrower of, or result in a waiver of, any obligation under this Loan Agreement, the Note or any other Loan Document.

(e) Environmental Inspections, Tests and Audits. Borrower will pay promptly the costs of any environmental inspections, tests or audits, a purpose of which is to identify the extent or cause of or potential for a Prohibited Activity or Condition (“Environmental Inspections”), required by Lender in connection with any foreclosure or deed in lieu of foreclosure, or as a condition of Lender’s consent to any Transfer under Article VII, or required by Lender following a reasonable determination by Lender that Prohibited Activities or Conditions may exist. Any such costs incurred by Lender (including Attorneys’ Fees and Costs and the costs of technical consultants whether incurred in connection with any judicial or administrative process or otherwise) that Borrower fails to pay promptly will become an additional part of the Indebtedness as provided in Section 9.02. As long as: (i) no Event of Default has occurred and is continuing, (ii) Borrower has actually paid for or reimbursed Lender for all costs of any such Environmental Inspections performed or required by Lender, and (iii) Lender is not prohibited by law, contract or otherwise from doing so, Lender will make available to Borrower, without representation of any kind, copies of Environmental Inspections prepared by third parties and delivered to Lender. Lender reserves the right, and Borrower expressly authorizes Lender, to make available to any party, including any prospective bidder at a foreclosure sale of the Mortgaged Property, the results of any Environmental Inspections made by or for Lender with respect to the Mortgaged Property. Borrower consents to Lender notifying any party (either as part of a notice of sale or otherwise) of the results of any Environmental Inspections made by or for Lender. Borrower acknowledges that Lender cannot control or otherwise ensure the truthfulness or accuracy of the results of any Environmental Inspections and that the release of such results to prospective bidders at a foreclosure sale of the Mortgaged Property may have a material and adverse effect upon the amount that a party may bid at such sale. Borrower agrees that Lender will have no liability whatsoever as a result of delivering the results of any Environmental Inspections made by or for Lender to any third party, and Borrower releases and forever discharges Lender from any and all claims, damages or causes of action arising out of, connected with or incidental to the results of the delivery of any Environmental Inspections made by or for Lender.

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(f) Remedial Work. If any investigation, site monitoring, containment, clean-up, Restoration or other remedial work (“Remedial Work”) is necessary to comply with any Hazardous Materials Law or order of any Governmental Authority that has or acquires jurisdiction over the Mortgaged Property or the use, operation or improvement of the Mortgaged Property, or is otherwise required by Lender as a consequence of any Prohibited Activity or Condition or to prevent the occurrence of a Prohibited Activity or Condition, Borrower will, by the earlier of (i) the applicable deadline required by Hazardous Materials Law, or (ii) 30 days after Notice from Lender demanding such action, begin performing the Remedial Work, and thereafter diligently prosecute it to completion, and must in any event complete the work by the time required by applicable Hazardous Materials Law. If Borrower fails to begin on a timely basis or diligently prosecute any required Remedial Work, Lender may, at its option, cause the Remedial Work to be completed, in which case Borrower will reimburse Lender on demand for the cost of doing so. Any reimbursement due from Borrower to Lender will become part of the Indebtedness as provided in Section 9.02.

6.13    Single Purpose Entity Requirements.

(a) Single Purpose Entity Requirements. Until the Indebtedness is paid in full, each Borrower and any SPE Equity Owner will remain a “Single Purpose Entity,” which means at all times since its formation and thereafter it will satisfy each of the following conditions:

(i) It will not engage in any business or activity, other than the ownership, operation and maintenance of the Mortgaged Property and activities incidental thereto.

(ii) It will not acquire, own, hold, lease, operate, manage, maintain, develop or improve any assets other than the Mortgaged Property and such Personalty as may be necessary for the operation of the Mortgaged Property and will conduct and operate its business as presently conducted and operated.

(iii) It will preserve its existence as an entity duly organized, validly existing and in good standing (if applicable) under the laws of the jurisdiction of its formation or organization and will do all things necessary to observe organizational formalities.

(iv) It will not merge or consolidate with any other Person.

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(v) It will not take any action to dissolve, wind-up, terminate or liquidate in whole or in part; to sell, transfer or otherwise dispose of all or substantially all of its assets; to change its legal structure; transfer or permit the direct or indirect transfer of any partnership, membership or other equity interests, as applicable, other than Transfers permitted under this Loan Agreement; issue additional partnership, membership or other equity interests, as applicable, or seek to accomplish any of the foregoing.

(vi) It will not, without the prior unanimous written consent of all of Borrower’s partners, members, or shareholders, as applicable, and, if applicable, the prior unanimous written consent of 100% of the members of the board of directors or of the board of Managers of Borrower or the SPE Equity Owner, take any of the following actions:

(A) File any insolvency, or reorganization case or proceeding, to institute proceedings to have Borrower or any SPE Equity Owner be adjudicated bankrupt or insolvent.

(B) Institute proceedings under any applicable insolvency law.

(C) Seek any relief under any law relating to relief from debts or the protection of debtors.

(D) Consent to the filing or institution of bankruptcy or insolvency proceedings against Borrower or any SPE Equity Owner.

(E) File a petition seeking, or consent to, reorganization or relief with respect to Borrower or any SPE Equity Owner under any applicable federal or state law relating to bankruptcy or insolvency.

(F) Seek or consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator, custodian, or any similar official for Borrower or a substantial part of its property or for any SPE Equity Owner or a substantial part of its property.

(G) Make any assignment for the benefit of creditors of Borrower or any SPE Equity Owner.

(H) Admit in writing Borrower’s or any SPE Equity Owner’s inability to pay its debts generally as they become due.

(I) Take action in furtherance of any of the foregoing.

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(vii) It will not amend or restate its organizational documents if such change would cause the provisions set forth in those organizational documents not to comply with the requirements set forth in this Section 6.13.

(viii) It will not own any subsidiary or make any investment in, any other Person.

(ix) It will not commingle its assets with the assets of any other Person and will hold all of its assets in its own name.

(x) It will not incur any debt, secured or unsecured, direct or contingent (including guaranteeing any obligation), other than the following:

(A) The Indebtedness (and any further indebtedness as described in Section 11.11 with regard to Supplemental Instruments).

(B) Customary unsecured trade payables incurred in the ordinary course of owning and operating the Mortgaged Property provided the same are not evidenced by a promissory note, do not exceed, in the aggregate, at any time a maximum amount of 2% of the original principal amount of the Indebtedness and are paid within 60 days of the date incurred.

(C) through (F) are reserved.

(xi) It will maintain its records, books of account, bank accounts, financial statements, accounting records and other entity documents separate and apart from those of any other Person and will not list its assets as assets on the financial statement of any other Person; provided, however, that Borrower’s assets may be included in a consolidated financial statement of its Affiliate provided that (A) appropriate notation will be made on such consolidated financial statements to indicate the separateness of Borrower from such Affiliate and to indicate that Borrower’s assets and credit are not available to satisfy the debts and other obligations of such Affiliate or any other Person, and (B) such assets will also be listed on Borrower’s own separate balance sheet.

(xii) Except for capital contributions or capital distributions permitted under the terms and conditions of its organizational documents, it will only enter into any contract or agreement with any general partner, member, shareholder, principal or Affiliate of Borrower or any Guarantor, or any general partner, member, principal or Affiliate thereof, upon terms and conditions that are commercially reasonable and substantially similar to those that would be available on an arm’s-length basis with third parties.

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(xiii) It will not maintain its assets in such a manner that will be costly or difficult to segregate, ascertain or identify its individual assets from those of any other Person.

(xiv) It will not assume or guaranty (excluding any guaranty that has been executed and delivered in connection with the Note) the debts or obligations of any other Person, hold itself out to be responsible for the debts of another Person, pledge its assets to secure the obligations of any other Person or otherwise pledge its assets for the benefit of any other Person, or hold out its credit as being available to satisfy the obligations of any other Person.

(xv) It will not make or permit to remain outstanding any loans or advances to any other Person except for those investments permitted under the Loan Documents and will not buy or hold evidence of indebtedness issued by any other Person (other than cash or investment-grade securities).

(xvi) It will file its own tax returns separate from those of any other Person, except to the extent that Borrower is treated as a “disregarded entity” for tax purposes and is not required to file tax returns under applicable law, and will pay any taxes required to be paid under applicable law.

(xvii) It will hold itself out to the public as a legal entity separate and distinct from any other Person and conduct its business solely in its own name, will correct any known misunderstanding regarding its separate identity and will not identify itself or any of its Affiliates as a division or department of any other Person.

(xviii) It will maintain adequate capital for the normal obligations reasonably foreseeable in a business of its size and character and in light of its contemplated business operations and will pay its debts and liabilities from its own assets as the same become due.

(xix) It will allocate fairly and reasonably shared expenses with Affiliates (including shared office space) and use separate stationery, invoices and checks bearing its own name.

(xx) It will pay (or cause the Property Manager to pay on behalf of Borrower from Borrower’s funds) its own liabilities (including salaries of its own employees) from its own funds.

(xxi) It will not acquire obligations or securities of its partners, members, shareholders, or Affiliates, as applicable.

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(xxii) Except as contemplated or permitted by the property management agreement with respect to the Property Manager, it will not permit any Affiliate or constituent party independent access to its bank accounts.

(xxiii) It will maintain a sufficient number of employees (if any) in light of its contemplated business operations and pay the salaries of its own employees, if any, only from its own funds.

(xxiv) If such entity is a single member limited liability company, such entity will satisfy each of the following conditions:

(A) Be formed and organized under Delaware law.

(B) Have either one springing member that is a corporation or two springing members who are natural persons. If there is more than one springing member, only one springing member will be the sole member of Borrower or SPE Equity Owner (as applicable) at any one time, and the second springing member will become the sole member only upon the first springing member ceasing to be a member.

(C) Otherwise comply with all Rating Agencies’ criteria for single member limited liability companies (including the delivery of Delaware single member limited liability company opinions acceptable in all respects to Lender).

(D) At all times Borrower or SPE Equity Owner (as applicable) will have one and only one member.

(xxv) If such entity is a single member limited liability company that is board-managed, such entity will have a board of Managers separate from that of Guarantor and any other Person and will cause its board of Managers to keep minutes of board meetings and actions and observe all other Delaware limited liability company required formalities.

(xxvi) If an SPE Equity Owner is required pursuant to this Loan Agreement, if Borrower is (A) a limited liability company with more than one member, then Borrower has and will have at least one member that is an SPE Equity Owner that has satisfied and will satisfy the requirements of Section 6.13(b) and such member is its managing member, or (B) a limited partnership, then all of its general partners are SPE Equity Owners that have satisfied and will satisfy the requirements set forth in Section 6.13(b).

(xxvii)    Reserved.

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(xxviii)    Reserved.

(b) SPE Equity Owner Requirements. The SPE Equity Owner, if applicable, will at all times since its formation and thereafter comply in its own right (subject to the modifications set forth below), and will cause Borrower to comply, with each of the requirements of a Single Purpose Entity. Upon the withdrawal or the disassociation of an SPE Equity Owner from Borrower, Borrower will immediately appoint a new SPE Equity Owner, whose organizational documents are substantially similar to those of the withdrawn or disassociated SPE Equity Owner, and deliver a new nonconsolidation opinion to Lender in form and substance satisfactory to Lender with regard to nonconsolidation by a bankruptcy court of the assets of each of Borrower and SPE Equity Owner with those of its Affiliates.

(i) With respect to Section 6.13(a)(i), the SPE Equity Owner will not engage in any business or activity other than being the managing member or general partner, as the case may be, of Borrower and owning at least 0.5% equity interest in Borrower.

(ii) With respect to Section 6.13(a)(ii), the SPE Equity Owner has not and will not acquire or own any assets other than its equity interest in Borrower and personal property related thereto.

(iii) With respect to Section 6.13(a)(viii), the SPE Equity Owner will not own any subsidiary or make any investment in any other Person, except for Borrower.

(iv) With respect to Section 6.13(a)(x), the SPE Equity Owner has not and will not incur any debt, secured or unsecured, direct or contingent (including guaranteeing any obligation), other than (A) customary unsecured payables incurred in the ordinary course of owning Borrower provided the same are not evidenced by a promissory note, do not exceed, in the aggregate, at any time a maximum amount of $10,000 and are paid within 60 days of the date incurred, and (B) in its capacity as general partner of Borrower (if applicable).

(v) With respect to Section 6.13(a)(xiv), the SPE Equity Owner will not assume or guaranty the debts or obligations of any other Person, hold itself out to be responsible for the debts of another Person, pledge its assets to secure the obligations of any other Person or otherwise pledge its assets for the benefit of any other Person, or hold out its credit as being available to satisfy the obligations of any other Person, except for in its capacity as general partner of Borrower (if applicable).

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(c) Effect of Transfer on Special Purpose Entity Requirements. Notwithstanding anything to the contrary in this Loan Agreement, no Transfer will be permitted under Article VII unless the provisions of this Section 6.13 are satisfied at all times.

6.14 Repairs and Capital Replacements.

(a) Completion of Repairs. Borrower will commence any Repairs as soon as practicable after the date of this Loan Agreement and will diligently proceed with and complete such Repairs on or before the Completion Date. All Repairs and Capital Replacements will be completed in a good and workmanlike manner, with suitable materials, and in accordance with good building practices and all applicable laws, ordinances, rules, regulations, building setback lines and restrictions applicable to the Mortgaged Property. Borrower agrees to cause the replacement of any material or work that is defective, unworkmanlike or that does not comply with the requirements of this Loan Agreement, as determined by Lender.

(b) Purchases. Without the prior written consent of Lender, no materials, machinery, equipment, fixtures or any other part of the Repairs or Capital Replacements will be purchased or installed under conditional sale contracts or lease agreements, or any other arrangement wherein title to such Repairs or Capital Replacements is retained or subjected to a purchase money security interest, or the right is reserved or accrues to anyone to remove or repossess any such Repairs or Capital Replacements, or to consider them as personal property.

(c) Lien Protection. Borrower will promptly pay or cause to be paid, when due, all costs, charges and expenses incurred in connection with the construction and completion of the Repairs or Capital Replacements, and will keep the Mortgaged Property free and clear of any and all Liens other than the Lien of the Security Instrument and any other junior Lien to which Lender has consented.

(d) Adverse Claims. Borrower will promptly advise Lender in writing of any litigation, Liens or claims affecting the Mortgaged Property and of all complaints and charges made by any Governmental Authority that may delay or adversely affect the Repairs or Capital Replacements.

6.15 Residential Leases Affecting the Mortgaged Property.

(a) Borrower will, promptly upon Lender’s request, deliver to Lender an executed copy of each residential Lease then in effect. All Leases for residential dwelling units will be on forms acceptable to Lender, will be for initial terms of at least 6 months and not more than 2 years, and will not include options to purchase.

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(b) If Borrower is a cooperative housing corporation or association, notwithstanding anything to the contrary contained in this Loan Agreement, so long as Borrower remains a cooperative housing corporation or association and is not in breach of any covenant of this Loan Agreement, Lender consents to each of the following:

(i) The execution of Leases for terms in excess of 2 years to a tenant shareholder of Borrower, so long as such Leases, including proprietary Leases, are and will remain subordinate to the Lien of the Security Instrument.

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

6.16 Litigation; Government Proceedings. Borrower will give prompt Notice to Lender of any litigation or governmental proceedings pending or, to the best of Borrower’s knowledge, threatened in writing against Borrower or any Borrower Principal which might have a Material Adverse Effect. As and when requested by Lender, Borrower will provide Lender with written updates on the status of all litigation proceedings affecting Borrower or any Borrower Principal.

6.17 Further Assurances and Estoppel Certificates; Lender’s Expenses. Within 10 days after a request from Lender, in Lender’s Discretion, Borrower will take each of the following actions:

(a) Deliver to Lender a written statement, signed and acknowledged by Borrower, certifying to Lender or any Person designated by Lender, as of the date of such statement: (i) that the Loan Documents are unmodified and in full force and effect (or, if there have been modifications, that the Loan Documents are in full force and effect as modified and setting forth such modifications), (ii) the unpaid principal balance of the Note, (iii) the date to which interest under the Note has been paid, (iv) that Borrower is not in default in paying the Indebtedness or in performing or observing any of the covenants or agreements contained in this Loan Agreement or any of the other Loan Documents (or, if Borrower is in default, describing such default in reasonable detail), (v) whether there are any then-existing setoffs or defenses known to Borrower against the enforcement of any right or remedy of Lender under the Loan Documents, and (vi) any additional facts requested by Lender.

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(b) Execute, acknowledge and/or deliver, at its sole cost and expense, all further acts, deeds, conveyances, assignments, estoppel certificates, financing statements or amendments, transfers and assurances as Lender may require from time to time in order to better assure, grant and convey to Lender the rights intended to be granted, now or in the future, to Lender under this Loan Agreement and the Loan Documents or in connection with Lender’s consent rights under Article VII.

Borrower acknowledges and agrees that, in connection with each request by Borrower under this Loan Agreement or any Loan Document, Borrower will pay all reasonable Attorneys’ Fees and Costs and expenses incurred by Lender and Loan Servicer, including any fees charged by the Rating Agencies, if applicable, regardless of whether the matter is approved, denied or withdrawn. Any amounts payable by Borrower under this Loan Agreement will be deemed a part of the Indebtedness, will be secured by the Security Instrument and will bear interest at the Default Rate if not fully paid within 10 days of written demand for payment.

6.18 Cap Collateral. Reserved.

6.19 Ground Lease. Reserved.

6.20 ERISA Requirements.

(a) Borrower will not engage in any transaction which would cause an obligation, or action taken or to be taken under this Loan Agreement (or the exercise by Lender of any of its rights under the Note, this Loan Agreement or any of the other Loan Documents) to be a non-exempt prohibited transaction under ERISA or Section 4975 of the Tax Code.

(b) Borrower will deliver to Lender such certifications or other evidence from time to time throughout the term of this Loan Agreement, as requested by Lender in Lender’s Discretion, confirming each of the following:

(i) Borrower is not an “employee benefit plan” as defined in Section 3(3) of ERISA, which is subject to Title I of ERISA, a “plan” to which Section 4975 of the Tax Code applies, or an entity whose underlying assets constitute “plan assets” of one or more of such plans.

(ii) Borrower is not a “governmental plan” within the meaning of Section 3(32) of ERISA.

(iii) Borrower is not subject to state statutes regulating investments or fiduciary obligations with respect to governmental plans.

(iv) One or more of the following circumstances is true:

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(A) Equity interests in Borrower are publicly offered securities within the meaning of 29 C.F.R. Section 2510.3-101(b)(2), as amended from time to time or any successor provision.

(B) Less than 25% of each outstanding class of equity interests in Borrower are held by “benefit plan investors” within the meaning of Section 3(42) of ERISA, as amended from time to time or any successor provision.

(C) Borrower qualifies as either an “operating company” or a “real estate operating company” within the meaning of 29 C.F.R. Section 2510.3-101(c) or (e), as either may be amended from time to time or any successor provisions, or is an investment company registered under the Investment Company Act of 1940.

6.21 through 6.43 are reserved.

ARTICLE VII TRANSFERS OF THE MORTGAGED PROPERTY OR INTERESTS IN BORROWER.

Upon the occurrence of a Transfer prohibited by or requiring Lender’s approval (if applicable) under this Article VII, Lender may, in Lender’s Discretion, by Notice to Borrower and the proposed transferee(s), modify or render void, any or all of the negotiated modifications to the Loan Documents (and/or deferral of deposits to Reserve Funds) as a condition to Lender’s consent to the proposed Transfer.

7.01 Permitted Transfers. The occurrence of any of the following Transfers will not constitute an Event of Default under this Loan Agreement, notwithstanding any provision of Section 7.02 to the contrary:

(a) A Transfer to which Lender has consented.

(b) A Transfer that is not a prohibited Transfer pursuant to Section 7.02.

(c) A Transfer that is conditionally permitted pursuant to Section 7.03 upon the satisfaction of all applicable conditions.

(d) The grant of a leasehold interest in an individual dwelling unit for a term of 2 years or less (or longer if approved by Lender in writing) not containing an option to purchase.

(e) Entering into any New Non-Residential Lease, or modifying or terminating any Non-Residential Lease, in each case in compliance with Section 6.04.

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(f) A Condemnation with respect to which Borrower satisfies the requirements of Section 6.11.

(g) A Transfer of obsolete or worn out Personalty or Fixtures that are contemporaneously replaced by items of equal or better function and quality, which are free of Liens, encumbrances and security interests other than those created by the Loan Documents or consented to by Lender.

(h) The creation of a mechanic’s, materialmen’s, or judgment Lien against the Mortgaged Property, which is released of record, bonded, or otherwise remedied to Lender’s satisfaction within 60 days of the date of creation; provided, however, if Borrower is diligently prosecuting such release or other remedy and advises Lender that such release or remedy cannot be consummated within such 60-day period, Borrower will have an additional period of time (not exceeding 120 days from the date of creation or such earlier time as may be required by applicable law in which the lienor must act to enforce the Lien) within which to obtain such release of record or consummate such other remedy.

(i) If Borrower is a housing cooperative corporation or association, the Transfer of the shares in the housing cooperative or the assignment of the occupancy agreements or Leases relating thereto to tenant shareholders of the housing cooperative or association.

(j) A Supplemental Instrument that complies with Section 11.11(if applicable) or Defeasance that complies with Section 11.12(if applicable).

(k) If applicable, a Preapproved Intrafamily Transfer that satisfies the requirements of Section 7.04.

7.02 Prohibited Transfers. The occurrence of any of the following Transfers will constitute an Event of Default under this Loan Agreement:

(a) A Transfer of all or any part of the Mortgaged Property or any interest in the Mortgaged Property, including the grant, creation or existence of any Lien on the Mortgaged Property, whether voluntary, involuntary or by operation of law, and whether or not such Lien has priority over the Lien of the Security Instrument, other than the Lien of the Security Instrument or, if this Loan Agreement is entered into in connection with a Supplemental Loan, the Lien of the Senior Instrument, or any other Lien to which Lender has consented.

(b) A Transfer or series of Transfers of any legal or equitable interest of any Guarantor which owns a direct or indirect interest in Borrower that result(s) in such Guarantor no longer owning any direct or indirect interest in Borrower.

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(c) A Transfer or series of Transfers of any legal or equitable interest since the Closing Date that result(s) in a change of more than 50% of the ownership interests (or beneficial interests, if the applicable entity is a trust) in Borrower or any Designated Entity for Transfers.

(d) A Transfer of any general partnership interest in a partnership, or any manager interest (whether a member manager or nonmember manager) in a limited liability company, or a change in the trustee of a trust other than as permitted in Section 7.04, if such partnership, limited liability company, or trust, as applicable, is Borrower or a Designated Entity for Transfers.

(e) If Borrower or any Designated Entity for Transfers is a corporation whose outstanding voting stock is held by 100 or more shareholders, one or more Transfers by a single transferor within a 12-month period affecting an aggregate of 10% or more of that stock.

(f) The grant, creation or existence of any Lien, whether voluntary, involuntary or by operation of law, and whether or not such Lien has priority over the Lien of the Security Instrument, on any ownership interest in Borrower or any Designated Entity for Transfers, if the foreclosure of such Lien would result in a Transfer prohibited under Sections 7.02(b), (c), (d), or (e).

(g) If Borrower is a trust (i) the termination or revocation of the trust, or (ii) the removal, appointment or substitution of a trustee of the trust.

(h) Reserved.

(i) Reserved.

(j) Reserved.

7.03 Conditionally Permitted Transfers. The occurrence of any of the following Transfers will not constitute a prohibited Transfer under Section 7.02, provided that Borrower has complied with all applicable specified conditions in this Section.

(a) Transfer by Devise, Descent or Operation of Law. Upon the death of a natural person, a Transfer which occurs by devise, descent, or by operation of law to one or more Immediate Family Members of such natural person or to a trust or family conservatorship established for the benefit of such Immediate Family Members (each a “Beneficiary”), provided that each of the following conditions is satisfied:

(i) The Property Manager continues to be responsible for the management of the Mortgaged Property, and such Transfer will not result in a change in the day-to-day operations of the Mortgaged Property.

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(ii) Lender receives confirmation acceptable to Lender, in Lender’s Discretion, that Borrower continues to satisfy the requirements of Section 6.13.

(iii) Each Guarantor executes such documents and agreements as Lender requires in Lender’s Discretion to evidence and effect the ratification of each Guaranty, or in the event of the death of any Guarantor, Borrower causes one of the following to occur:

(A) One or more Persons acceptable to Lender, in Lender’s Discretion, execute(s) and deliver(s) to Lender a guaranty in a form acceptable to Lender and in substantially the same form as the Guaranty executed on the Closing Date, without any cost or expense to Lender.

(B) The estate of the deceased Guarantor immediately ratifies the Guaranty in writing, and within 6 months after the date of the death of the deceased Guarantor one or more Persons, acceptable to Lender in Lender’s Discretion, execute(s) and deliver(s) to Lender a guaranty in a form acceptable to Lender and in substantially the same form as the Guaranty executed on the Closing Date, without any cost or expense to Lender.

(iv) Borrower gives Lender Notice of such Transfer together with copies of all documents effecting such Transfer not more than 30 calendar days after the date of such Transfer, and contemporaneously with the Notice, takes each of the following additional actions:

(A) Borrower reaffirms the representations and warranties under Article V.

(B) Borrower satisfies Lender, in Lender’s Discretion, that the Beneficiary’s organization, credit and experience in the management of similar properties are appropriate to the overall structure and documentation of the existing financing.

(v) Borrower or Beneficiary causes to be delivered to Lender such legal opinions as Lender deems necessary, in Lender’s Discretion, including a nonconsolidation opinion (if a nonconsolidation opinion was delivered on the Closing Date and if required by Lender), an opinion that the ratification of the Loan Documents and Guaranty (if applicable) have been duly authorized, executed, and delivered and that the ratification documents and Guaranty (if applicable) are enforceable as the obligations of Borrower, Beneficiary or Guarantor, as applicable.

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(vi) Borrower (A) pays the Transfer Processing Fee to Lender, and (B) pays or reimburses Lender, upon demand, for all costs and expenses including all Attorneys’ Fees and Costs, incurred by Lender in connection with such Transfer; provided, however, that Lender will not be entitled to collect a Transfer Fee.

(b) Easement, Restrictive Covenant or Other Encumbrance. The grant of an easement, restrictive covenant or other encumbrance, provided that each of the following conditions is satisfied:

(i) Borrower provides Lender with at least 30 days prior Notice of the proposed grant.

(ii) Prior to the grant, Lender determines, in Lender’s Discretion, that the easement, restrictive covenant or other encumbrance will not materially affect the operation or value of the Mortgaged Property or Lender’s interest in the Mortgaged Property.

(iii) Borrower pays or reimburses Lender, upon demand, for all costs and expenses, including all Attorneys’ Fees and Costs, incurred by Lender in connection with reviewing Borrower’s request for Lender’s review of such grant of easement, restrictive covenant or other encumbrance; provided, however, that Lender will not be entitled to collect a Transfer Fee.

(iv) If the Note is held by a REMIC trust, Lender may require an opinion of counsel which meets each of the following requirements:

(A) The counsel providing the opinion is acceptable to Lender.

(B)  The opinion is addressed to Lender.

(C)  The opinion is paid for by Borrower.

(D)  The opinion is in form and substance satisfactory to Lender in its sole and absolute discretion.

(E)  The opinion confirms each of the following:

(1) The grant of such easement has been effected in accordance with the requirements of Treasury Regulation Section 1.860G-2(a)(8) (as such regulation may be modified, amended or replaced from time to time).

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(2) The qualification and status of the REMIC trust as a REMIC will not be adversely affected or impaired as a result of such grant.

(3) The REMIC trust will not incur a tax under Section 860G(d) of the Tax Code as a result of such grant.

(c) Publicly-Held Fund or Publicly-Held Real Estate Investment Trust. If a Designated Entity for Transfers is a publicly-held fund or a publicly-held real estate investment trust, either of the following:

(i) The public issuance of common stock, convertible debt, equity or other similar securities (“Public Fund/REIT Securities”) and the subsequent Transfer of such Public Fund/REIT Securities.

(ii) The acquisition by a single Public Fund/REIT Securities holder of an ownership percentage of 10% or more in the Designated Entity for Transfers, if Borrower provides notice of that acquisition to Lender within 30 days following the acquisition.

(d) Transaction Specific Transfers.

(i) through (viii) are reserved.

(e) through (i) are reserved.

7.04 Preapproved Intrafamily Transfers. The occurrenceof a Transfer of more than a 50% interest in Borrower or a Designated Entity for Transfers as set forth in this Section will be considered to be a “PreapprovedIntrafamily Transfer”provided that each of the conditions set forth in Sections 7.04(a) and (b) is satisfied:

(a) Type of Transfer. The Transfer is one of the following:

(i) A sale or transfer to one or more of the transferor’s Immediate Family Members.

(ii) A sale or transfer to any trust having as its sole beneficiaries the transferor and/or one or more of the transferor’s Immediate Family Members.

(iii) A sale or transfer from a trust to any one or more of its beneficiaries who are the settlor and/or Immediate Family Members of the settlor of the trust.

(iv) The substitution or replacement of the trustee of any trust with a trustee who is an Immediate Family Member of the settlor of the trust.

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(v) A sale or transfer from a natural person to an entity owned and under the Control of the transferor or the transferor’s Immediate Family Members.

(b) Conditions. The Preapproved Intrafamily Transfer satisfies each of the following conditions:

(i) Borrower must provide Lender with 30 days prior Notice of the proposed Preapproved Intrafamily Transfer.

(ii) Following the Transfer, Control and management of the day-to-day operations of Borrower continue to be held by the Person exercising such Control and management immediately prior to the Transfer and there is no change in the Guarantor, if applicable.

(iii) At the time of the Preapproved Intrafamily Transfer, no Event of Default has occurred and is continuing and no event or condition has occurred and is continuing that, with the giving of Notice or the passage of time, or both, would become an Event of Default.

(iv) At any time that one Person acquires 25% or more of the aggregate of direct or indirect interests in Borrower or a Designated Entity for Transfers as a result of the Preapproved Intrafamily Transfer, Borrower must meet the following additional requirements:

(A) Borrower must pay to Lender the Transfer Processing Fee at the time the Borrower provides Lender with the Notice set forth in Section 7.04(b)(i).

(B) Borrower must pay or reimburse Lender, upon demand, for all costs and expenses, including all Attorneys’ Fees and Costs, incurred by Lender in connection with the Preapproved Intrafamily Transfer.

(C) Borrower must deliver to Lender organizational charts reflecting the structure of Borrower prior to and after the Preapproved Intrafamily Transfer, together with copies of the then-current organizational documents of Borrower and any other entity in which interests were transferred, including any amendments made in connection with the Preapproved Intrafamily Transfer.

(D) Each transferee with an interest of 25% or more must deliver to Lender a certification that each of the following is true:

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(1) He/she/it has not been convicted of fraud or a crime involving moral turpitude (or if an entity, then no principal of such entity has been convicted of fraud or a crime involving moral turpitude).

(2) He/she/it has not been involved in a bankruptcy or reorganization within the 10 years preceding the date of the Preapproved Intrafamily Transfer.

(E) Borrower must deliver to Lender searches confirming that no transferee with an interest of 25% or more is on the list of Specially Designated Nationals or other blocked persons published by the U.S. Office of Foreign Assets Control, or on the list of persons or entities prohibited from doing business with the Department of Housing and Urban Development.

(F) If a nonconsolidation opinion was delivered on the Closing Date and if, after giving effect to the Preapproved IntrafamilyTransfer and all prior Transfers, 50% or more in the aggregate of direct or indirect interests in Borrower are owned by any Person and its Affiliates that owned less than a 50% direct or indirect interest in Borrower as of the Closing Date, Borrower must deliver to Lender an opinion of counsel for Borrower, in form and substance satisfactory to Lender, with regard to nonconsolidation.

7.05 Lender’s Consent to Prohibited Transfers.

(a) Conditions for Lender’s Consent. With respect to a Transfer that would otherwise constitute an Event of Default under this Article VII, Lender will consent, without any adjustment to the rate at which the Indebtedness bears interest or to any other economic terms of the Indebtedness set forth in the Note, provided that, prior to such Transfer, each of the following requirements is satisfied:

(i) Borrower has submitted to Lender all information required by Lender to make the determination required by this Section along with the Transfer Processing Fee.

(ii) No Event of Default has occurred and is continuing and no event or condition has occurred and is continuing that, with the giving of Notice or the passage of time, or both, would become an Event of Default unless such Transfer would cure the Event of Default.

(iii) Lender in Lender’s Discretion has determined that the transferee meets Lender’s eligibility, credit, management and other standards (including

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any standards with respect to previous relationships between Lender and the transferee).

(iv) Lender in Lender’s Discretion has determined that the transferee’s organization, credit and experience in the management of similar properties to be appropriate to the overall structure and documentation of the Loan.

(v) Lender in Lender’s Discretion has determined that the Mortgaged Property will be managed by a Property Manager meeting the requirements of Section 6.09(d).

(vi) Lender in Lender’s Discretion has determined that the Mortgaged Property, at the time of the proposed Transfer, meets all of Lender’s standards as to its physical condition, occupancy, net operating income and the accumulation of reserves.

(vii) Lender in Lender’s Discretion has determined that the transferee and any SPE Equity Owner of such transferee meet the requirements of Section 6.13.

(viii) If a Supplemental Instrument is outstanding, Borrower has obtained the consent of the Supplemental Lender, if different from Lender.

(ix) In the case of a Transfer of all or any part of the Mortgaged Property, each of the following conditions is satisfied:

(A) The transferee executes Lender’s then-standard assumption agreement that, among other things, requires the transferee to perform all obligations of Borrower set forth in the Note, the Security Instrument, this Loan Agreement and any other Loan Document, and may require that the transferee comply with any provisions of this Loan Agreement or any other Loan Document which previously may have been waived or modified by Lender.

(B) If Lender requires, the transferee causes one or more Persons acceptable to Lender, in Lender’s Discretion, to execute and deliver to Lender a Guaranty in a form acceptable to Lender.

(C) The transferee executes such additional documentation (including filing financing statements, as applicable) as Lender may require.

(x) In the case of a Transfer of any interest in Borrower or a Designated Entity for Transfers, if a Guarantor requests that Lender release the Guarantor from its obligations under a Guaranty executed and delivered in

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connection with the Note, this Loan Agreement or any of the other Loan Documents, then Borrower causes one or more Persons acceptable to Lender, in Lender’s Discretion, to execute and deliver to Lender a Guaranty in a form acceptable to Lender.

(xi) Lender has received such legal opinions as Lender deems necessary, including a nonconsolidation opinion (if a nonconsolidation opinion was delivered on the Closing Date and if required by Lender), an opinion that the assignment and assumption of the Loan Documents has been duly authorized, executed, and delivered and that the assignment documents and the Loan Documents are enforceable as the obligations of Borrower, transferee and Guarantor, as applicable.

(xii) Lender collects all costs, including the cost of all title searches, title insurance and recording costs, and all Attorneys’ Fees and Costs incurred in reviewing the Transfer request and any fees charged by the Rating Agencies, if applicable.

(xiii) At the time of the Transfer, Borrower pays the Transfer Fee to Lender.

(xiv) The Transfer will not occur during any Extension Period, if applicable.

(xv) Reserved.

(b) Continuing Liability of Borrower. If Borrower requests a release of its liability under the Loan Documents in connection with a Transfer of all of Borrower’s interest in the Mortgaged Property, and Lender approves the Transfer pursuant to Section 7.05(a), then one of the following will apply:

(i) If Borrower delivers to Lender a current Site Assessment which (A) is dated within 90 days prior to the date of the proposed Transfer, and (B) evidences no presence of Hazardous Materials on the Mortgaged Property and no other Prohibited Activities or Conditions with respect to the Mortgaged Property (“Clean Site Assessment”), then Lender will release Borrower from all of Borrower’s obligations under the Loan Documents except for any liability under Section 6.12 or Section 10.02(b) with respect to any loss, liability, damage, claim, cost or expense which directly or indirectly arises from or relates to any Prohibited Activities or Conditions existing prior to the date of the Transfer.

(ii) If Borrower does not deliver a Clean Site Assessment as described in Section 7.05(b)(i), then Lender will release Borrower from all of Borrower’s obligations under the Loan Documents except for liability under Section 6.12 or Section 10.02(b).

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(c) Continuing Liability of Guarantor. If Guarantor requests a release of its liability under the Guaranty in connection with a Transfer which is permitted, preapproved, or approved by Lender pursuant to this Article VII, and Borrower has provided a replacement Guarantor acceptable to Lender under the terms of Section 7.05(a)(ix)(B), then one of the following will apply:

(i) If Borrower delivers to Lender a Clean Site Assessment, then Lender will release Guarantor from all of Guarantor’s obligations except Guarantor’s obligation to guaranty Borrower’s liability under Section 6.12 or Section 10.02(b) with respect to any loss, liability, damage, claim, cost or expense which directly or indirectly arises from or relates to any Prohibited Activities or Conditions existing prior to the date of the Transfer.

(ii) If Borrower does not deliver a Clean Site Assessment as described in Section 7.05(b)(i), then Lender will release Guarantor from all of Guarantor’s obligations except for Guarantor’s obligation to guaranty Borrower’s liability under Section 6.12 or Section 10.02(b).

7.06 SPE Equity Owner Requirement Following Transfer. Following any Transfer pursuant to this Article VII, Borrower must satisfy the applicable conditions regarding an SPE Equity Owner set forth in Section 6.13(a)(xxvi) of this Loan Agreement.

7.07 Additional Transfer Requirements - External Cap Agreement.

(a) Continuation of Cap Agreement. If a Transfer of all or part of the Mortgaged Property permitted by this Loan Agreement occurs, Borrower will ensure that any third-party Cap Agreement is transferred to the applicable transferee or, if the Cap Agreement is not transferable, Borrower will replace the third-party Cap Agreement in accordance with Lender’s then-current requirements.

(b) Establishment or Modification of Rate Cap Agreement Reserve Fund

(i) If the third-party Cap Agreement which will be in place immediately following the Transfer is scheduled to expire prior to the Maturity Date, Lender may require Borrower to establish a Rate Cap Agreement Reserve Fund.

(ii) If Borrower has previously established a Rate Cap Agreement Reserve Fund, then Lender will determine whether the balance of any existing Rate Cap Agreement Reserve Fund is sufficient under then-current market conditions to purchase a Replacement Cap Agreement, and may then take any of the following actions:

(A) Lender may require Borrower to make an additional deposit into the Rate Cap Agreement Reserve Fund.

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(B) If funding of the Rate Cap Agreement Reserve Fund has been deferred, Lender may require Borrower to begin making monthly deposits into the Rate Cap Agreement Reserve Fund.

(C) Lender may require Borrower to increase the amount of monthly deposits to the Rate Cap Agreement Reserve Fund.

7.08    Reserved.

7.09    Reserved.

ARTICLE VIII    SUBROGATION.

If, and to the extent that, the proceeds of the Loan, or subsequent advances under Section 9.02, are used to pay, satisfy or discharge a Prior Lien, such Loan proceeds or advances will be deemed to have been advanced by Lender at Borrower’s request, and Lender will automatically, and without further action on its part, be subrogated to the rights, including Lien priority, of the owner or holder of the obligation secured by the Prior Lien, whether or not the Prior Lien is released.

ARTICLE IX     EVENTS OF DEFAULT AND REMEDIES.

9.01 Events of Default. The occurrence of any one or more of the following will constitute an Event of Default under this Loan Agreement:

(a) Borrower fails to pay or deposit when due any amount required by the Note, this Loan Agreement or any other Loan Document.

(b) Borrower fails to maintain the Insurance coverage required by Section 6.10.

(c) Borrower or any SPE Equity Owner fails to comply with the provisions of Section 6.13 or if any of the assumptions contained in any nonconsolidation opinions delivered to Lender at any time is or becomes untrue in any material respect.

(d) Borrower or any SPE Equity Owner, any of its officers, directors, trustees, general partners or managers or any Guarantor commits fraud or a material misrepresentation or material omission in connection with: (i) the application for or creation of the Indebtedness, (ii) any financial statement, Rent Schedule, or other report or information provided to Lender during the term of the Indebtedness, or (iii) any request for Lender’s consent to any proposed action, including a request for disbursement of funds under this Loan Agreement.

(e) Borrower fails to comply with the Condemnation provisions of Section 6.11.

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(f) A Transfer occurs that violates the provisions of Article VII, whether or not any actual impairment of Lender’s security results from such Transfer.

(g) A forfeiture action or proceeding, whether civil or criminal, is commenced which could result in a forfeiture of the Mortgaged Property or otherwise materially impair the Lien created by the Security Instrument or Lender’s interest in the Mortgaged Property.

(h) Borrower fails to perform any of its obligations under this Loan Agreement (other than those specified in Sections 9.01(a) through (g)), as and when required, which failure continues for a period of 30 days after Notice of such failure by Lender to Borrower. However, if Borrower’s failure to perform its obligations as described in this Section 9.01(h) is of the nature that it cannot be cured within the 30 day cure period after such Notice from Lender but reasonably could be cured within 90 days, then Borrower will have additional time as determined by Lender in Lender’s Discretion, not to exceed an additional 60 days, in which to cure such default, provided that Borrower has diligently commenced to cure such default during the initial 30 day cure period and diligently pursues the cure of such default. However, no such Notice or cure periods will apply in the case of any such failure which could, in Lender’s judgment, absent immediate exercise by Lender of a right or remedy under this Loan Agreement, result in harm to Lender, danger to tenants or third parties, or impairment of the Note, the Security Instrument or this Loan Agreement or any other security given under any other Loan Document.

(i) Borrower fails to perform any of its obligations as and when required under any Loan Document other than this Loan Agreement which failure continues beyond the applicable cure period, if any, specified in that Loan Document.

(j) The holder of any other debt instrument secured by a mortgage, deed of trust or deed to secure debt on the Mortgaged Property exercises any right to declare all amounts due under that debt instrument immediately due and payable.

(k) Any of the following occurs:

(i) Borrower or any SPE Equity Owner commences any case, Proceeding or other action under any existing or future law of any jurisdiction, domestic or foreign, relating to bankruptcy, insolvency, reorganization, conservatorship or relief of debtors (A) seeking to have an order for relief entered with respect to it, or seeking to adjudicate it bankrupt or insolvent, or seeking reorganization, arrangement, adjustment, winding-up, liquidation, dissolution, composition or other relief with respect to it or its debt, or (B) seeking appointment of a receiver, trustee, custodian, conservator or other similar official for it or for all or any substantial part of its assets.

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(ii) Any party other than Lender commences any case, Proceeding, or other action of a nature referred to in Section 9.01(k)(i) against Borrower or any SPE Equity Owner which (A) results in the entry of an order for relief or any such adjudication or appointment, or (B) has not been dismissed, discharged or bonded for a period of 90 days.

(iii) Any case, Proceeding or other action is commenced against Borrower or any SPE Equity Owner seeking issuance of a warrant of attachment, execution, distraint or similar process against all or any substantial part of its assets which results in the entry of any order by a court of competent jurisdiction for any such relief which is not vacated, discharged, or stayed or bonded pending appeal within 90 days from the entry thereof.

(iv) Borrower or any SPE Equity Owner takes any action in furtherance of, or indicating its consent to, approval of, or acquiescence in, any of the acts set forth in Section 9.01(k)(i), (ii) or (iii).

(l) Borrower or any SPE Equity Owner has made any representation or warranty in Article V or any other Section of this Loan Agreement that is false or misleading in any material respect.

(m) If the Loan is secured by an interest under a Ground Lease, Borrower fails to comply with the provisions of Section 6.19.

(n) If the Loan is a Supplemental Loan, any Event of Default occurs under (i) the Senior Note, the Senior Instrument or any other Senior Loan Document, or (ii) any loan document related to another loan in connection with the Mortgaged Property, regardless of whether Borrower has obtained Supplemental Lender’s approval of the placement of such Lien on the Mortgaged Property. In addition, if the Loan is a Supplemental Loan, as Borrower under both the Supplemental Instrument and the Senior Instrument, Borrower acknowledges and agrees that if there is an Event of Default under the Supplemental Note, the Supplemental Instrument or any other Supplemental Loan Document, such Event of Default will be an Event of Default under the terms of the Senior Instrument and will entitle Senior Lender to invoke any and all remedies permitted to Senior Lender by applicable law, the Senior Note, the Senior Instrument or any of the other Senior Loan Documents.

(o) If the Mortgaged Property is subject to any covenants, conditions and/or restrictions, land use restriction agreements or similar agreements, Borrower fails to perform any of its obligations under any such agreement as and when required, and such failure continues beyond any applicable cure period.

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(p) A Guarantor files for bankruptcy protection under the Bankruptcy Code or a Guarantor voluntarily becomes subject to any reorganization, receivership, insolvency proceeding or other similar proceeding pursuant to any other federal or state law affecting debtor and creditor rights, or any creditor (other than Lender) of a Guarantor commences any involuntary case against a Guarantor pursuant to the Bankruptcy Code or other federal or state law affecting debtor and creditor rights, unless each of the following conditions is satisfied:

(i) Borrower or Guarantor provides Notice of such action to Lender within 30 days after the filing of such action.

(ii) Either (A) the case is dismissed or discharged within 90 days after filing, or (B) within 90 days following the date of such filing or commencement, the affected Guarantor is replaced with one or more other Persons acceptable to Lender, in Lender’s Discretion, each of whom executes and delivers to Lender a replacement Guaranty in form and content acceptable to Lender, together with such legal opinions as Lender deems necessary; provided, however, that if Lender determines, in Lender’s Discretion, that any proposed replacement Guarantor is not acceptable, then the action will constitute a prohibited Transfer governed by Section 7.02.

(iii) If Borrower must provide a replacement Guarantor pursuant to Section 9.01(p)(ii), then Borrower pays the Transfer Processing Fee to Lender.

(q)    With respect to a Guarantor, either of the following occurs:

(i) The death of any Guarantor who is a natural person, unless within 30 days following the Guarantor’s death, Borrower causes one of the following to occur:

(A) One or more Persons acceptable to Lender, in Lender’s Discretion, execute(s) and deliver(s) to Lender a guaranty in a form acceptable to Lender and in substantially the same form as the Guaranty executed on the Closing Date, without any cost or expense to Lender.

(B) The estate of the deceased Guarantor immediately ratifies the Guaranty in writing, and within 6 months after the date of the death of the deceased Guarantor one or more Persons, acceptable to Lender in Lender’s Discretion, execute(s) and deliver(s) to Lender a guaranty in a form acceptable to Lender and in substantially the same form as the Guaranty executed on the Closing Date, without any cost or expense to Lender.

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(ii) The dissolution of any Guarantor who is an entity, unless within 30 days following the dissolution of the Guarantor, Borrower causes one or more Persons acceptable to Lender, in Lender’s Discretion, to execute and deliver to Lender a guaranty in a form acceptable to Lender and in substantially the same form as the Guaranty executed on the Closing Date, without any cost or expense to Lender.

(r) If a Cap Agreement is required, Borrower fails to provide Lender with a Replacement Cap Agreement prior to the expiration of the then-existing Cap Agreement.

(s)    through (rr) are reserved.

9.02 Protection of Lender’s Security; Security Instrument Secures Future Advances.

(a) If Borrower fails to perform any of its obligations under this Loan Agreement or any other Loan Document, or if any action or proceeding is commenced which purports to affect the Mortgaged Property, Lender’s security or Lender’s rights under this Loan Agreement, including eminent domain, insolvency, code enforcement, civil or criminal forfeiture, enforcement of Hazardous Materials Laws, fraudulent conveyance or reorganizations or proceedings involving a bankrupt or decedent, then Lender, in Lender’s Discretion, may make such appearances, file such documents, disburse such sums and take such actions as Lender reasonably deems necessary to perform such obligations of Borrower and to protect Lender’s interest, including: (i) payment of Attorneys’ Fees and Costs, (ii) payment of fees and out-of-pocket expenses of accountants, inspectors and consultants, (iii) entry upon the Mortgaged Property to make Repairs or secure the Mortgaged Property, (iv) procurement of the Insurance required by Section 6.10, (v) payment of amounts which Borrower has failed to pay under Section 6.08, (vi) performance of Borrower’s obligations under Section 6.09, and (vii) advances made by Lender to pay, satisfy or discharge any obligation of Borrower for the payment of money that is secured by a Prior Lien.

(b) Any amounts disbursed by Lender under this Section 9.02, or under any other provision of this Loan Agreement that treats such disbursement as being made under this Section 9.02, will be secured by the Security Instrument, will be added to, and become part of, the principal component of the Indebtedness, will be immediately due and payable and will bear interest from the date of disbursement until paid at the Default Rate.

(c) Nothing in this Section 9.02 will require Lender to incur any expense or take any action.

9.03 Remedies.

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(a) Upon an Event of Default, Lender may exercise any or all of its rights and remedies provided under the Loan Documents and Borrower will pay all costs associated therewith, including Attorneys’ Fees and Costs.

(b) Each right and remedy provided in this Loan Agreement is distinct from all other rights or remedies under this Loan Agreement or any other Loan Document or afforded by applicable law or equity, and each will be cumulative and may be exercised concurrently, independently or successively, in any order. Lender’s exercise of any particular right or remedy will not in any way prevent Lender from exercising any other right or remedy available to Lender. Lender may exercise any such remedies from time to time and as often as Lender chooses.

(c) Lender will have all remedies available to Lender under Revised Article 9 of the Uniform Commercial Code of the Property Jurisdiction, the Loan Documents and under applicable law.

(d) Lender may also retain (i) all money in the Reserve Funds, including interest, and (ii) any Cap Payment, and in Lender’s sole and absolute discretion, may apply such amounts, without restriction and without any specific order of priority, to the payment of any and all Indebtedness.

(e) If a claim or adjudication is made that Lender has acted unreasonably or unreasonably delayed acting in any case where, by law or under this Loan Agreement or the other Loan Documents, Lender has an obligation to act reasonably or promptly, then Lender will not be liable for any monetary damages, and Borrower’s sole remedy will be limited to commencing an action seeking injunctive relief or declaratory judgment. Any action or proceeding to determine whether Lender has acted reasonably will be determined by an action seeking declaratory judgment.

9.04 Forbearance.

(a) Lender may (but will not be obligated to) agree with Borrower, from time to time, and without giving Notice to, or obtaining the consent of, or having any effect upon the obligations of, any Guarantor or other third party obligor, to take any of the following actions:

(i) Extend the time for payment of all or any part of the Indebtedness.

(ii) Reduce the payments due under this Loan Agreement, the Note or any other Loan Document.

(iii) Release anyone liable for the payment of any amounts under this Loan Agreement, the Note or any other Loan Document.

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(iv) Accept a renewal of the Note.

(v) Modify the terms and time of payment of the Indebtedness.

(vi) Join in any extension or subordination agreement.

(vii) Release any portion of the Mortgaged Property.

(viii) Take or release other or additional security.

(ix) Modify the rate of interest or period of amortization of the Note or change the amount of the monthly installments payable under the Note.

(x) Otherwise modify this Loan Agreement, the Note or any other Loan Document.

(b) Any forbearance by Lender in exercising any right or remedy under the Note, this Loan Agreement or any other Loan Document or otherwise afforded by applicable law, will not be a waiver of or preclude the exercise of any other right or remedy, or the subsequent exercise of any right or remedy. The acceptance by Lender of payment of all or any part of the Indebtedness after the due date of such payment, or in an amount which is less than the required payment, will not be a waiver of Lender’s right to require prompt payment when due of all other payments on account of the Indebtedness or to exercise any remedies for any failure to make prompt payment. Enforcement by Lender of any security for the Indebtedness will not constitute an election by Lender of remedies so as to preclude the exercise of any other right available to Lender. Lender’s receipt of any awards or proceeds under Sections 6.10 and 6.11 will not operate to cure or waive any Event of Default.

9.05 Waiver of Marshalling. Notwithstanding the existence of any other security interests in the Mortgaged Property held by Lender or by any other party, Lender will have the right to determine the order in which any or all of the Mortgaged Property will be subjected to the remedies provided in this Loan Agreement or any other Loan Document or applicable law. Lender will have the right to determine the order in which any or all portions of the Indebtedness are satisfied from the proceeds realized upon the exercise of such remedies. Borrower and any party who now or in the future acquires a security interest in the Mortgaged Property and who has actual or constructive notice of the Security Instrument waives any and all right to require the marshalling of assets or to require that any of the Mortgaged Property be sold in the inverse order of alienation or that any of the Mortgaged Property be sold in parcels or as an entirety in connection with the exercise of any of the remedies permitted by applicable law or provided in this Loan Agreement.

ARTICLE X        RELEASE; INDEMNITY.

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10.01 Release. Borrower covenants and agrees that, in performing any of its duties under this Loan Agreement, none of Lender, Loan Servicer or any of their respective agents or employees will be liable for any losses, claims, damages, liabilities and expenses that may be incurred by any of them as a result of such performance, except that no party will be released from liability for any losses, claims, damages, liabilities or expenses arising out of the willful misconduct or gross negligence of such party.

10.02 Indemnity.

(a) General Indemnity. Borrower agrees to indemnify, hold harmless and defend Lender, including any custodian, trustee and other fiduciaries who hold or have held a full or partial interest in the Loan for the benefit of third parties,any prior owner or holder of the Note, the Loan Servicer, any prior Loan Servicer, the officers, directors, shareholders, partners, employees and trustees of each of the foregoing, and the heirs, legal representatives, successors and assigns of each of the foregoing (collectively, “Indemnitees”) against any and all losses, claims, damages, liabilities and expenses including Attorneys’ Fees and Costs, which may be imposed or incurred by any of them directly or indirectly arising out of, or in any way relating to, or as a result of: (i) any failure of the Mortgaged Property to comply with the laws, regulations, ordinance, code or decree of any Governmental Authority, including those pertaining to the Americans with Disabilities Act, zoning, occupancy and subdivision of real property, (ii) any obligation of Borrower under any Lease, and (iii) any accident, injury or death to any natural person on the Mortgaged Property or any damage to personal property located on the Mortgaged Property, except that no such party will be indemnified from liability for any losses, claims, damages, liabilities or expenses arising out of the willful misconduct or gross negligence of such party.

(b) Environmental Indemnity. Borrower agrees to indemnify, hold harmless and defend Indemnitees from and against all proceedings, claims, damages, penalties and costs (whether initiated or sought by Governmental Authorities or private parties), including Attorneys’ Fees and Costs and remediation costs, whether incurred in connection with any judicial or administrative process or otherwise, arising directly or indirectly from any of the following:

(i) Any breach of any representation or warranty of Borrower in Section 5.05.

(ii) Any failure by Borrower to perform any of its obligations under Section 6.12.

(iii) The existence or alleged existence of any Prohibited Activity or Condition.

(iv) The presence or alleged presence of Hazardous Materials on or under the Mortgaged Property or in any of the Improvements.

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(v) The actual or alleged violation of any Hazardous Materials Law.

(c) Indemnification Regarding ERISA Covenants. BORROWER WILL INDEMNIFY LENDER AND DEFEND AND HOLD LENDER HARMLESS FROM AND AGAINST ALL CIVIL PENALTIES, EXCISE TAXES, OR OTHER LOSS, COST, DAMAGE AND EXPENSE (INCLUDING REASONABLE ATTORNEYS’ FEES AND COSTS INCURRED IN THE INVESTIGATION, DEFENSE AND SETTLEMENT OF CLAIMS AND LOSSES INCURRED IN CORRECTING ANY PROHIBITED TRANSACTION OR IN THE SALE OF A PROHIBITED LOAN, AND IN OBTAINING ANY INDIVIDUAL PROHIBITED TRANSACTION EXEMPTION UNDER ERISA THAT MAY BE REQUIRED, IN LENDER’S SOLE AND ABSOLUTE DISCRETION) THAT LENDER MAY INCUR, DIRECTLY OR INDIRECTLY, AS A RESULT OF DEFAULT UNDER SECTION 6.20. THIS INDEMNITY WILL SURVIVE ANY TERMINATION, SATISFACTION OR FORECLOSURE OF THE SECURITY INSTRUMENT.

(d) Securitization Indemnification.

(i) Borrower agrees to indemnify, hold harmless and defend the Indemnified Parties from and against any and all proceedings, losses, claims, damages, liabilities, penalties, costs and expenses (whether initiated or sought by Governmental Authorities or private parties), including Attorneys’ Fees and Costs, which may be incurred by any Indemnified Party (either directly or indirectly), which arise out of, are in any way related to, or are as a result of a claim that the Borrower Information contains an untrue statement of any material fact or the Borrower Information omits to state a material fact necessary in order to make the statements therein, in light of the circumstances under which they are made, not misleading (collectively, the “Securitization Indemnification”).

(ii) Borrower will not be liable under the Securitization Indemnification if the claim is based on Borrower Information which Lender has materially misstated or materially misrepresented in the Disclosure Document.

(iii)    For purposes of this Section 10.02(d):

(A) “Borrower Information” includes any information provided at any time to Lender or Loan Servicer by Borrower, any SPE Equity Owner, any Guarantor, any Property Manager or any Affiliates of the foregoing with respect to any of the following:

(1) Any Person listed in Section 10.02(d)(iii)(A).

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(2) The Loan.

(3) The Mortgaged Property.

Borrower Information includes: (i) representations and warranties made in the Loan Documents, (ii) financial statements of Borrower, any SPE Equity Owner, any Designated Entity for Transfers or any Guarantor, and (iii) operating statements and rent rolls with respect to the Mortgaged Property. Borrower Information does not include any information provided directly to Lender or Loan Servicer by a third party such as an appraiser or an environmental consultant.

(B) The term “Lender” includes its officers and directors.

(C) An “Issuer Person” includes all of the following:

(1) Any Person that has filed the registration statement, if any, relating to the Securitization, and any Affiliate of such Person.

(2) Any Person acting as issuer, depositor, sponsor and/or in a similar capacity with respect to the Securitization, and any Affiliate of such Person.

(D) The “Issuer Group” includes all of the following:

(1) Each director and officer of any Issuer Person.

(2) Each entity that Controls any Issuer Person within the meaning of Section 15 of the Securities Act or Section 20 of the Securities Exchange Act.

(E) The “Underwriter Group” includes all of the following:

(1) Each entity which is acting as an underwriter, manager, placement agent, initial purchaser or in a similar capacity with respect to the Securitization.

(2) Each of its directors and officers.

(3) Each entity that Controls any such entity within the meaning of Section 15 of the Securities Act or Section 20 of the Securities Exchange Act and is acting as an

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underwriter, manager, placement agent, initial purchaser or in a similar capacity with respect to the Securitization.

(4) The directors and officers of such entity described in Section 10.02(d)(iii)(E)(1).

(F) “Indemnified Party” or “Indemnified Parties” means one or more of Lender, Issuer Person, Issuer Group, and Underwriter Group.

(e) Selection and Direction of Counsel. Counsel selected by Borrower to defend Indemnitees will be subject to the approval of those Indemnitees. In any circumstances in which the indemnity under this Article X applies, Lender may employ its own legal counsel and consultants to prosecute, defend or negotiate any claim or legal or administrative proceeding and Lender, with the prior written consent of Borrower (which will not be unreasonably withheld, delayed or conditioned) may settle or compromise any action or legal or administrative proceeding. However, unless an Event of Default has occurred and is continuing, or the interests of Borrower and Lender are in conflict, as determined by Lender in Lender’s Discretion, Lender will permit Borrower to undertake the actions referenced in this Article X so long as Lender approves such action, which approval will not be unreasonably withheld or delayed. Borrower will reimburse Lender upon demand for all costs and expenses incurred by Lender, including all costs of settlements entered into in good faith, consultants’ fees and Attorneys’ Fees and Costs.

(f) Settlement or Compromise of Claims. Borrower will not, without the prior written consent of those Indemnitees who are named as parties to a claim or legal or administrative proceeding (“Claim”), settle or compromise the Claim if the settlement (i) results in the entry of any judgment that does not include as an unconditional term the delivery by the claimant or plaintiff to Lender of a written release of those Indemnitees, satisfactory in form and substance to Lender, or (ii) may materially and adversely affect Lender, as determined by Lender in Lender’s Discretion.

(g) Effect of Changes to Loan on Indemnification Obligations. Borrower’s obligation to indemnify the Indemnitees will not be limited or impaired by any of the following, or by any failure of Borrower or any Guarantor to receive notice of or consideration for any of the following:

(i) Any amendment or modification of any Loan Document.

(ii) Any extensions of time for performance required by any Loan Document.

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(iii) Any provision in any of the Loan Documents limiting Lender’s recourse to property securing the Indebtedness, or limiting the personal liability of Borrower or any other party for payment of all or any part of the Indebtedness.

(iv) The accuracy or inaccuracy of any representations and warranties made by Borrower under this Loan Agreement or any other Loan Document.

(v) The release of Borrower or any other Person, by Lender or by operation of law, from performance of any obligation under any Loan Document.

(vi) The release or substitution in whole or in part of any security for the Indebtedness.

(vii) Lender’s failure to properly perfect any Lien or security interest given as security for the Indebtedness.

(h) Payments by Borrower. Borrower will, at its own cost and expense, do all of the following:

(i) Pay or satisfy any judgment or decree that may be entered against any Indemnitee or Indemnitees in any legal or administrative proceeding incident to any matters against which Indemnitees are entitled to be indemnified under this Article X.

(ii) Reimburse Indemnitees for any expenses paid or incurred in connection with any matters against which Indemnitees are entitled to be indemnified under this Article X.

(iii) Reimburse Indemnitees for any and all expenses, including Attorneys’ Fees and Costs, paid or incurred in connection with the enforcement by Indemnitees of their rights under this Article X, or in monitoring and participating in any legal or administrative proceeding.

(i) Other Obligations. The provisions of this Article X will be in addition to any and all other obligations and liabilities that Borrower may have under applicable law or under other Loan Documents, and each Indemnitee will be entitled to indemnification under this Article X without regard to whether Lender or that Indemnitee has exercised any rights against the Mortgaged Property or any other security, pursued any rights against any Guarantor, or pursued any other rights available under the Loan Documents or applicable law. If Borrower consists of more than one Person, the obligation of those Persons to indemnify the Indemnitees under this Article X will be joint and several. The obligation of Borrower to indemnify the Indemnitees under this Article X will survive any repayment or discharge of the Indebtedness, any foreclosure proceeding, any

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foreclosure sale, any delivery of any deed in lieu of foreclosure, and any release of record of the Lien of the Security Instrument. Notwithstanding the foregoing, if Lender has never been a mortgagee-in-possession of, or held title to, the Mortgaged Property, Borrower will have no obligation to indemnify the Indemnitees under this Article X after the date of the release of record of the Lien of the Security Instrument by payment in full at the Maturity Date or by voluntary prepayment in full.

(j)    Reserved.

10.03    Reserved.

ARTICLE XI     MISCELLANEOUS PROVISIONS.

11.01 Waiver of Statute of Limitations, Offsets and Counterclaims. Borrower waives the right to assert any statute of limitations as a bar to the enforcement of this Loan Agreement or the Lien of the Security Instrument or to any action brought to enforce any Loan Document. Borrower waives the right to assert a counterclaim, other than a compulsory counterclaim, in any action or proceeding brought against it by Lender or otherwise to offset any obligations to make the payments required by the Loan Documents. No failure by Lender to perform any of its obligations under the Loan Documents will be a valid defense to, or result in any offset against, any payments that Borrower is obligated to make under any of the Loan Documents.

11.02 Governing Law; Consent to Jurisdiction and Venue.

(a) This Loan Agreement, and any Loan Document which does not itself expressly identify the law which is to apply to it, will be governed by the laws of the Property Jurisdiction.

(b) Borrower agrees that any controversy arising under or in relation to the Note, the Security Instrument, this Loan Agreement or any other Loan Document may be litigated in the Property Jurisdiction. The state and federal courts and authorities with jurisdiction in the Property Jurisdiction will have jurisdiction over all controversies that may arise under or in relation to the Note, any security for the Indebtedness or any other Loan Document. Borrower irrevocably consents to service, jurisdiction and venue of such courts for any such litigation and waives any other venue to which it might be entitled by virtue of domicile, habitual residence or otherwise. However, nothing in this Section 11.02 is intended to limit Lender’s right to bring any suit, action or proceeding relating to matters under this Loan Agreement in any court of any other jurisdiction.

11.03 Notice.

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(a) All Notices under or concerning this Loan Agreement will be in writing. Each Notice will be deemed given on the earliest to occur of: (i) the date when the Notice is received by the addressee, (ii) the first Business Day after the Notice is delivered to a recognized overnight courier service, with arrangements made for payment of charges for next Business Day delivery, or (iii) the third Business Day after the Notice is deposited in the United States mail with postage prepaid, certified mail, return receipt requested. Addresses for Notice are as follows:

If to Lender:	Berkeley Point Capital LLC One Beacon Street, 14th Floor Boston, Massachusetts 02108 Attention: Director Loan Servicing
If to Borrower:	c/o STAR Barrett Lakes, LLC 18100 Von Karman Avenue Suite 500 Irvine, California 92612 Attention: Ana Marie del Rio

(b) Any party to this Loan Agreement may change the address to which Notices intended for it are to be directed by means of Notice given to the other party in accordance with this Section 11.03. Each party agrees that it will not refuse or reject delivery of any Notice given in accordance with this Section 11.03, that it will acknowledge, in writing, the receipt of any Notice upon request by the other party and that any Notice rejected or refused by it will be deemed for purposes of this Section 11.03 to have been received by the rejecting party on the date so refused or rejected, as conclusively established by the records of the U.S. Postal Service or the courier service.

(c) Any Notice under the Note and any other Loan Document that does not specify how Notices are to be given will be given in accordance with this Section 11.03.

(d) Reserved.

11.04 Successors and Assigns Bound. This Loan Agreement will bind the respective successors and assigns of Borrower and Lender, and the rights granted by this Loan Agreement will inure to Lender’s successors and assigns.

11.05 Joint and Several (and Solidary) Liability. If more than one Person signs this Loan Agreement as Borrower, the obligations of such Persons will be joint and several. For a Mortgaged Property located in Louisiana, if more than one Person signs this Loan Agreement as Borrower, the obligations of such Persons with be joint and several and solidary, and wherever the phrase “joint and several” appears in this Loan Agreement, the phrase is amended to read “joint, several, and solidary.”

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11.06 Relationship of Parties; No Third Party Beneficiary.

(a) The relationship between Lender and Borrower will be solely that of creditor and debtor, respectively, and nothing contained in this Loan Agreement will create any other relationship between Lender and Borrower. Nothing contained in this Loan Agreement will constitute Lender as a joint venturer, partner or agent of Borrower, or render Lender liable for any debts, obligations, acts, omissions, representations or contracts of Borrower.

(b) No creditor of any party to this Loan Agreement and no other Person will be a third party beneficiary of this Loan Agreement or any other Loan Document. Without limiting the generality of the preceding sentence: (i) any arrangement (“Servicing Arrangement”) between Lender and any Loan Servicer for loss sharing or interim advancement of funds will constitute a contractual obligation of such Loan Servicer that is independent of the obligation of Borrower for the payment of the Indebtedness, (ii) Borrower will not be a third party beneficiary of any Servicing Arrangement, and (iii) no payment by the Loan Servicer under any Servicing Arrangement will reduce the amount of the Indebtedness.

11.07 Severability; Amendments.

(a) The invalidity or unenforceability of any provision of this Loan Agreement will not affect the validity or enforceability of any other provision, and all other provisions will remain in full force and effect. This Loan Agreement contains the entire agreement among the parties as to the rights granted and the obligations assumed in this Loan Agreement.

(b) This Loan Agreement may not be amended or modified except by a writing signed by the party against whom enforcement is sought.

11.08 Disclosure of Information. Borrower acknowledges that Lender may provide to third parties with an existing or prospective interest in the servicing, enforcement, evaluation, performance, ownership, purchase, participation or Securitization (if applicable) of the Loan, including any of the Rating Agencies, any entity maintaining databases on the underwriting and performance of commercial mortgage loans, as well as governmental regulatory agencies having regulatory authority over Lender, any and all information which Lender now has or may hereafter acquire relating to the Loan, the Mortgaged Property, Borrower, any SPE Equity Owner or any Guarantor, as Lender determines necessary or desirable and that such information may be included in disclosure documents in connection with a Securitization (if applicable) or syndication of participation interests, including a prospectus, prospectus supplement, offering memorandum, private placement memorandum or similar document (each, a “Disclosure Document”) and also may be included in any filing with the Securities and Exchange Commission pursuant to the Securities Act or the Securities Exchange Act. To the fullest

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extent permitted under applicable law, Borrower irrevocably waives all rights, if any, to prohibit such disclosure, including any right of privacy.

11.09 Determinations by Lender. Unless otherwise provided in this Loan Agreement, in any instance where the consent or approval of Lender may be given or is required, or where any determination, judgment or decision is to be rendered by Lender under this Loan Agreement, the granting, withholding or denial of such consent or approval and the rendering of such determination, judgment or decision will be made or exercised by Lender (or its designated representative) at its sole and exclusive option and in its sole and absolute discretion.

11.10 Sale of Note; Change in Servicer; Loan Servicing. The Note or a partial interest in the Note (together with this Loan Agreement and the other Loan Documents) may be sold one or more times without prior Notice to Borrower. A sale may result in a change of the Loan Servicer. There also may be one or more changes of the Loan Servicer unrelated to a sale of the Note. If there is a change of the Loan Servicer, Borrower will be given Notice of the change. All actions regarding the servicing of the Loan evidenced by the Note, including the collection of payments, the giving and receipt of Notice, inspections of the Mortgaged Property, inspections of books and records, and the granting of consents and approvals, may be taken by the Loan Servicer unless Borrower receives Notice to the contrary. If Borrower receives conflicting Notices regarding the identity of the Loan Servicer or any other subject, any such Notice from Lender will govern.

11.11    Supplemental Financing.

(a) This Section will apply only if at the time of any application referred to in Section 11.11(b), Freddie Mac has in effect a product described in its Multifamily Seller/Servicer Guide under which it purchases supplemental mortgages on multifamily properties that meet specified criteria (“Supplemental Mortgage Product”). For purposes of this Section 11.11 only, the term “Freddie Mac” will include any affiliate or subsidiary of Freddie Mac.

(b) After the first anniversary of the date of the Senior Indebtedness, Freddie Mac will consider an application from an originating lender that is generally approved by Freddie Mac to sell mortgages to Freddie Mac under the Supplemental Mortgage Product (“Approved Seller/Servicer”) for the purchase by Freddie Mac of a proposed indebtedness of Borrower to the Approved Seller/Servicer to be secured by one or more Supplemental Instruments on the Mortgaged Property. Freddie Mac will purchase each Supplemental Loan secured by the Mortgaged Property if each of the following conditions is satisfied:

(i) At the time of the proposed Supplemental Loan, no Event of Default may have occurred and be continuing and no event or condition may have occurred and be continuing that, with the giving of Notice or the passage of time, or both, would become an Event of Default.

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(ii) Borrower and the Mortgaged Property must be acceptable to Freddie Mac under its Supplemental Mortgage Product.

(iii) New loan documents must be entered into to reflect each Supplemental Loan, such documents to be acceptable to Freddie Mac in its discretion.

(iv) No Supplemental Loan may cause the combined debt service coverage ratio of the Mortgaged Property after the making of that Supplemental Loan to be less than the Minimum DSCR. As used in this Section, the term “combined debt service coverage ratio” means, with respect to the Mortgaged Property, the ratio of:

(A) the annual net operating income from the operations of the Mortgaged Property at the time of the proposed Supplemental Loan,

to

(B) the aggregate of the annual principal and interest payable on all of the following:

(I) the Indebtedness under this Loan Agreement (using a 30 year amortization schedule),

(II) any “Indebtedness” as defined in any security instruments recorded against the Mortgaged Property (using a 30 year amortization schedule for any Supplemental Loans), and

(III) the proposed “Indebtedness” for any Supplemental Loan (using a 30 year amortization schedule).

As used in this Section, “annual principal and interest” with respect to a floating rate loan will be calculated by Freddie Mac using an interest rate equal to one of the following:

(X) If the loan has an internal interest rate cap, the Capped Interest Rate.

(Y) If the loan has an external interest rate cap, the external interest rate cap.

(Z) If the loan has no interest rate cap, the greater of (I) 7%, or (II) the then-current LIBOR Index Rate plus the Margin plus 300 basis points.

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The annual net operating income of the Mortgaged Property will be as determined by Freddie Mac in its discretion considering factors such as income in place at the time of the proposed Supplemental Loan and income during the preceding 12 months, and actual, historical and anticipated operating expenses. Freddie Mac will determine the combined debt service coverage ratio of the Mortgaged Property based on its underwriting. Borrower will provide Freddie Mac such financial statements and other information Freddie Mac may require to make these determinations.

(v) No Supplemental Loan may cause the combined loan to value ratio of the Mortgaged Property after the making of that Supplemental Loan to exceed the Maximum Combined LTV, as determined by Freddie Mac. As used in this Section, “combined loan to value ratio” means, with respect to the Mortgaged Property, the ratio, expressed as a percentage, of:

(A) the aggregate outstanding principal balances of all of the following:

(I) the Indebtedness under this Loan Agreement,

(II) any “Indebtedness” as defined in any security instruments recorded against the Mortgaged Property, and

(III) the proposed “Indebtedness” for any Supplemental Loan,

to

(B) the value of the Mortgaged Property.

Freddie Mac will determine the combined loan to value ratio of the Mortgaged Property based on its underwriting. Borrower will provide Freddie Mac such financial statements and other information Freddie Mac may require to make these determinations. In addition, Freddie Mac, at Borrower’s expense, may obtain MAI appraisals of the Mortgaged Property in order to assist Freddie Mac in making the determinations under this Section. If Freddie Mac requires an appraisal, then the value of the Mortgaged Property that will be used to determine whether the Maximum Combined LTV has been met will be the lesser of the appraised value set forth in such appraisal or the value of the Mortgaged Property as determined by Freddie Mac.

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(vi) Borrower’s organizational documents are amended to permit Borrower to incur additional debt in the form of Supplemental Loans (Lender will consent to such amendment(s)).

(vii) One or more Persons acceptable to Freddie Mac executes and delivers to the Approved Seller/Servicer a Guaranty in a form acceptable to Freddie Mac with respect to the exceptions to non-recourse liability described in Freddie Mac’s form promissory note, unless Freddie Mac has elected to waive its requirement for a Guaranty.

(viii) The loan term of each Supplemental Loan will be coterminous with the Senior Indebtedness or longer than the Senior Indebtedness, in Freddie Mac’s discretion.

(ix) The Prepayment Premium Period of each Supplemental Loan will be coterminous with the Prepayment Premium Period or the combined Lockout Period and Defeasance Period, as applicable, of the Senior Indebtedness.

(x) The interest rate of each Supplemental Loan will be determined by Freddie Mac in its discretion.

(xi) Lender enters into an intercreditor agreement (“Intercreditor Agreement”) acceptable to Freddie Mac and to Lender for each Supplemental Loan.

(xii) Borrower’s payment of fees and other expenses charged by Lender, Freddie Mac, the Approved Seller/Servicer, and the Rating Agencies (including reasonable Attorneys’ Fees and Costs) in connection with reviewing and originating each Supplemental Loan.

(xiii) Commencing on the date that a Supplemental Loan is originated and continuing for so long as any Supplemental Loan is outstanding, Senior Lender may begin collection of Imposition Deposits for any of the following Impositions marked ‘Deferred’ in Section 4.02(a):

(A) Hazard Insurance premiums or premiums for other Insurance required by Lender under Section 6.10.

(B)    Taxes and payments in lieu of taxes

(C)    Ground Rents

Such deposits will be credited to the payment of any such required Imposition deposits under any Supplemental Loan.

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(xiv) If any covenants, conditions and restrictions affecting the Mortgaged Property provide for a lien for any assessments or other unpaid amounts, Borrower will provide satisfactory evidence that such lien will be subordinate to the lien of the Supplemental Instrument.

(xv) All other requirements of the Supplemental Mortgage Product must be met, unless Freddie Mac has elected to waive one or more of its requirements.

(xvi) Reserved.

(xvii) Reserved.

(c) No later than 5 Business Days after Lender’s receipt of a written request from Borrower, Lender will provide the following information to an Approved Seller/Servicer:

(i) The then-current outstanding principal balance of the Senior Indebtedness.

(ii) Payment history of the Senior Indebtedness.

(iii) Whether any Reserve Funds are being collected on the Senior Indebtedness and the amount of each such Reserve Fund deposit as of the date of the request.

(iv) Whether any Repairs, Capital Replacements or improvements or rental achievement or burn-off guaranty requirements are existing or outstanding under the terms of the Senior Indebtedness.

(v) A copy of the most recent inspection report for the Mortgaged Property.

(vi) Whether any modifications or amendments have been made to the Loan Documents for the Senior Indebtedness since origination of the Senior Indebtedness and, if applicable, a copy of such modifications and amendments.

(vii) Whether to Lender’s knowledge any Event of Default exists under the Senior Indebtedness.

Lender will only be obligated to provide this information in connection with Borrower’s request for a Supplemental Loan from an Approved Seller/Servicer. Notwithstanding anything in this Section to the contrary, if Freddie Mac is the owner of the Note, this Section 11.11(c) is not applicable.

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(d) Lender will have no obligation to consent to any mortgage or Lien on the Mortgaged Property that secures any indebtedness other than the Indebtedness, except as set forth in this Loan Agreement.

(e) If a Supplemental Loan is made to Borrower, Borrower agrees that the terms of the Intercreditor Agreement will govern with respect to any distributions of excess proceeds by Lender to the Supplemental Lender, and Borrower agrees that Lender may distribute any excess proceeds received by Lender pursuant to the Loan Documents to Supplemental Lender pursuant to the Intercreditor Agreement.

11.12 Defeasance.(Section Applies if Loan is Assigned to REMIC Trust Prior to the Cut-off Date and if the Note provides for Defeasance). This Section 11.12 will apply only if the Note is assigned to a REMIC trust prior to the Cut-off Date, and if the Note provides for Defeasance. If both of these conditions are met, then, subject to Section 11.12(a) and (c), Borrower will have the right to defease the Loan in whole (“Defeasance”) and obtain the release of the Mortgaged Property from the Lien of the Security Instrument upon the satisfaction of each of the following conditions:

(a) Borrower will not have the right to obtain Defeasance at any of the following times:

(i) If the Loan is not assigned to a REMIC trust.

(ii) During the Lockout Period.

(iii) After the expiration of the Defeasance Period.

(iv) After Lender has accelerated the maturity of the unpaid principal balance of, accrued interest on, and other amounts payable under, the Note pursuant to Section 11 of the Note.

(b) Borrower will give Lender Notice (“Defeasance Notice”) specifying a Business Day (“Defeasance Closing Date”) on which Borrower desires to close the Defeasance. The Defeasance Closing Date specified by Borrower may not be more than 60 calendar days, nor less than 30 calendar days, after the date on which Lender receives the Defeasance Notice. Lender will acknowledge receipt of the Defeasance Notice and will notify Borrower of the identity of the accommodation borrower (“Successor Borrower”).

(c) The Defeasance Notice must be accompanied by a $10,000 non-refundable fee (“Defeasance Fee”). If Lender does not receive the Defeasance Fee, then Borrower’s right to obtain Defeasance pursuant to that Defeasance Notice will terminate.

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(d) (i)    If Borrower timely pays the Defeasance Fee, but Borrower fails to perform its other obligations under this Section, Lender will have the right to retain the Defeasance Fee as liquidated damages for Borrower’s default and, except as provided in Section 11.12(d)(ii), Borrower will be released from all further obligations under this Section 11.12. Borrower acknowledges that Lender will incur financing costs in arranging and preparing for the release of the Mortgaged Property from the Lien of the Security Instrument in reliance on the executed Defeasance Notice. Borrower agrees that the Defeasance Fee represents a fair and reasonable estimate, taking into account all circumstances existing on the date of this Loan Agreement, of the damages Lender will incur by reason of Borrower’s default.

(ii) If the Defeasance is not consummated on the Defeasance Closing Date for any reason, Borrower agrees to reimburse Lender for all third party costs and expenses (other than financing costs covered by Section 11.12(d)(i)) incurred by Lender in reliance on the executed Defeasance Notice, within 5 Business Days after Borrower receives a written demand for payment, accompanied by a statement, in reasonable detail, of Lender’s third party costs and expenses.

(iii) All payments required to be made by Borrower to Lender pursuant to this Section 11.12 will be made by wire transfer of immediately available funds to the account(s) designated by Lender in its acknowledgement of the Defeasance Notice.

(e) No Event of Default has occurred and is continuing.

(f) Borrower will deliver each of the following documents to Lender, in form and substance satisfactory to Lender, on or prior to the Defeasance Closing Date, unless Lender has issued a written waiver of its right to receive any such document:

(i) One or more opinions of counsel for Borrower confirming each of the following:

(A) Lender has a valid and perfected first Lien and first priority security interest in the Defeasance Collateral and the proceeds of the Defeasance Collateral.

(B) The Pledge Agreement is duly authorized, executed, delivered and enforceable against Borrower in accordance with its terms.

(C) If, as of the Defeasance Closing Date, the Note is held by a REMIC trust, then each of the following is correct:

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(1) The Defeasance has been effected in accordance with the requirements of Treasury Regulation Section 1.860G-2(a)(8) (as such regulation may be modified, amended or replaced from time to time).

(2) The qualification and status of the REMIC trust as a REMIC will not be adversely affected or impaired as a result of the Defeasance.

(3) The REMIC trust will not incur a tax under Section 860G(d) of the Tax Code as a result of the Defeasance.

(D) The Defeasance will not result in a “sale or exchange” of the Note within the meaning of Section 1001(c) of the Tax Code and the temporary and final regulations promulgated thereunder.

(ii) A written certificate from an independent certified public accounting firm (reasonably acceptable to Lender), confirming that the Defeasance Collateral will generate cash sufficient to make all Scheduled Debt Payments as they fall due under the Note, including full payment due on the Note on the Maturity Date.

(iii) Lender’s form of a pledge and security agreement (“Pledge Agreement”) and financing statements which pledge and create a first priority security interest in the Defeasance Collateral in favor of Lender.

(iv) Lender’s form of a transfer and assumption agreement (“Transfer and Assumption Agreement”), pursuant to which Borrower and any Guarantor (in each case, subject to satisfaction of all requirements under this Loan Agreement) will be relievedfrom liability in connection with the Loan to the extent described in Sections 7.05(b)(i) and 7.05(c)(i), respectively, and Successor Borrower will assume all remaining obligations.

(v) Forms of all documents necessary to release the Mortgaged Property from the Liens created by the Security Instrument and related UCC financing statements (collectively, “Release Instruments”), each in appropriate form required by the Property Jurisdiction.

(vi) Any other opinions, certificates, documents or instruments that Lender may reasonably request.

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(g) Borrower will deliver to Lender, on or prior to the Defeasance Closing Date, each of the following:

(i) The Defeasance Collateral, which meets all of the following requirements:

(A) It is owned by Borrower, free and clear of all Liens and claims of third-parties.

(B) It is in an amount sufficient to provide for (1) redemption payments to occur prior, but as close as possible, to all successive Installment Due Dates occurring under the Note after the Defeasance Closing Date, and (2) delivery of redemption proceeds at least equal to the amount of principal and interest due on the Note on each Installment Due Date including full payment due on the Note on the Maturity Date (“Scheduled Debt Payments”).

(C) All redemption payments received from the Defeasance Collateral will be paid directly to Lender to be applied on account of the Scheduled Debt Payments occurring after the Defeasance Closing Date.

(D) The pledge of the Defeasance Collateral will be effected through the book-entry facilities of a qualified securities intermediary designated by Lender in conformity with all applicable laws.

(ii) All accrued and unpaid interest and all other sums due under the Note, this Loan Agreement and under the other Loan Documents, including all amounts due under Section 11.12(i), up to the Defeasance Closing Date.

(h) Reserved.

(i) Borrower will pay all reasonable costs and expenses incurred by Lender in connection with the Defeasance in full on or prior to the Defeasance Closing Date, which payment is required prior to Lender’s issuance of the Release Instruments and whether or not Defeasance is completed. Such expenses include all fees, costs and expenses incurred by Lender and its agents in connection with the Defeasance (including Attorneys’ Fees and Costs for the review and preparation of the Pledge Agreement and of the other materials described in this Loan Agreement and any related documentation, and any servicing fees, Rating Agencies’ fees or other costs related to the Defeasance).

Lender reserves the right to require that Borrower post a deposit to cover costs which Lender reasonably anticipates that Lender will incur in connection with the Defeasance.

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(j) No Transfer Fee will be payable to Lender upon a Defeasance made in accordance with this Section 11.12.

(k) Reserved.

11.13 Lender’s Rights to Sell or Securitize. Borrower acknowledges that Lender, and each successor to Lender’s interest, may (without prior Notice to Borrower or Borrower’s prior consent), sell or grant participations in the Loan (or any part of the Loan), sell or subcontract the servicing rights related to the Loan, securitize the Loan or place the Loan in a trust. Borrower, at its expense, agrees to cooperate with all reasonable requests of Lender in connection with any of the foregoing including taking the following actions:

(a) Executing any financing statements or other documents deemed necessary by Lender or its transferee to create, perfect or preserve the rights and interest to be acquired by such transferee.

(b) Delivering revised organizational documents, counsel opinions, and executed amendments to the Loan Documents satisfactory to the Rating Agencies.

(c) Providing updated financial information with appropriate verification through auditors’ letters, if required by Lender.

(d) Providing updated information on all litigation proceedings affecting Borrower or any Borrower Principal as required in Section 6.16.

(e) Reviewing information contained in any Disclosure Document and providing a mortgagor estoppel certificate, written confirmation of Borrower’s indemnification obligations under this Loan Agreement, and such other information about Borrower, any SPE Equity Owner, any Guarantor, any Property Manager or the Mortgaged Property as Lender may require for Lender’s offering materials.

11.14 Cooperation with Rating Agencies and Investors. Borrower covenants and agrees that if Lender decides to include the Loan as an asset of a Secondary Market Transaction, Borrower will do all of the following:

(a) At Lender’s request, meet with representatives of the Rating Agencies and/or investors to discuss the business and operations of the Mortgaged Property.

(b) Permit Lender or its representatives to provide related information to the Rating Agencies and/or investors.

(c) Cooperate with the reasonable requests of the Rating Agencies and/or investors in connection with all of the foregoing.

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11.15 Letter of Credit Requirements.

(a) Any Letter of Credit required under this Loan Agreement must satisfy the following conditions:

(i) It must be a clean, irrevocable, unconditional standby letter of credit.

(ii) It must name Lender as the sole beneficiary and permit Lender to assign the Letter of Credit without further consent from Issuer.

(iii) It must have an initial term of not less than 12 months.

(iv) It must be in the form required by Lender.

(v) It must provide that it may be drawn on by Lender or Loan Servicer, in whole or in part, by presentation to Issuer of a sight draft without any other restrictions on the right to draw.

(vi) It must be issued by an Issuer meeting Lender’s requirements, which Issuer (i) must be an Eligible Institution, and (ii) may not, unless Lender agrees in writing, be an affiliate of Borrower or Lender.

(vii) It must be obtained on behalf of Borrower by a Person other than Borrower’s general partners or managing members if Borrower is a general or limited partnership or limited liability company. Neither Borrower nor the general partners or managing members, if applicable, may have any liability or other obligations under any reimbursement agreement with respect to the Letter of Credit.

(viii) It may not be secured by a lien on all or any part of the Mortgaged Property or related Personalty.

(ix) When delivered to Lender, it must be accompanied by an opinion acceptable to Lender in Lender’s Discretion issued by counsel to the Issuer of the Letter of Credit that includes opinions as to Issuer’s power and authority to issue the Letter of Credit and the enforceability of the Letter of Credit against Issuer.

(b) If at any time the Issuer of a Letter of Credit held by Lender ceases to be an Eligible Institution, Lender will have the right to immediately draw down the Letter of Credit in full and hold the Proceeds in an escrow account in accordance with the terms of this Loan Agreement.

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(c) Each Letter of Credit held by Lender pursuant to this Loan Agreement provides additional collateral for the Indebtedness in addition to the lien of the Security Instrument.

11.16 Reserved.

11.17    Splitting the Note.

(a) Lender has the right from time to time to sever the Note into two or more separate promissory notes in such denominations as Lender determines in its sole discretion, which promissory notes may be included in separate sales or Securitizations undertaken by Lender. In conjunction with any such action, Lender may redefine the interest rate and amortization schedule; provided however, each of the following will be true:

(i) If Lender redefines the interest rate, the weighted average of the margins contained in the severed promissory notes taken in the aggregate will equal the Margin (as defined in the Note).

(ii) If Lender redefines the amortization schedule, the amortization of the severed promissory notes taken in the aggregate will require no more amortization to be paid under the Loan than as required under the Note at the time such action was taken by Lender and such redefined amortization will not result in a change in the amount of the monthly payment due under the Note.

(b) Borrower will only be required to make one payment under such separate promissory notes. Subject to the foregoing, each severed promissory note, and the Loan evidenced by each severed promissory note, will be upon all of the terms and provisions contained in this Loan Agreement and the Loan Documents which continue in full force and effect, except that Lender may allocate specific collateral given for the Loan as security for performance of specific promissory notes, in each case with or without cross default provisions.

(c) Borrower agrees to cooperate with all reasonable requests of Lender to accomplish the foregoing, including execution and prompt delivery to Lender of a severance agreement and such other documents as Lender requires in Lender’s Discretion, and Lender will reimburse Borrower for all costs reasonably incurred by Borrower in connection with actions taken by Borrower pursuant to Lender’s request under the terms of this Section 11.17.

(d) Borrower hereby appoints Lender its attorney-in-fact with full power of substitution (which appointment will be deemed to be coupled with an interest and irrevocable until the Loan is paid in full and the Security Instrument is discharged of record, with Borrower hereby ratifying all that its said attorney may

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do by virtue of such power) to make and execute all documents necessary or desirable to effect the severance set forth in Section 11.17(a); provided, however, Lender will not make or execute any such documents under such power until 10 Business Days after Lender has given Borrower Notice of Lender’s intent to exercise its rights under such power.

(e) Borrower’s failure to deliver any of the documents requested by Lender under this Section for a period of 10 Business Days after Notice of such request by Lender will, at Lender’s option, constitute an Event of Default under this Loan Agreement.

11.18 Reserved.

11.19 State Specific Provisions. Reserved

11.20 Time is of the Essence. Time is of the essence with respect to each covenant of this Loan Agreement.

ARTICLE XII     DEFINITIONS.

The following terms, when used in this Loan Agreement (including when used in the recitals), will have the following meanings:

“Affiliate” of any Person means:

(i)    Any other individual or entity that is, directly or indirectly, one of the following:

(A)    In Control of the applicable Person.

(B)    Under the Control of the applicable Person.

(C)    Under common Control with the applicable Person.

(ii) Any individual that is a director or officer of the applicable Person.

(iii) Any individual that is a director or officer of any entity described in clause (i) of this definition.

“Approved Seller/Servicer” is defined in Section 11.11(b).

“Assignment of Management Agreement” means the Assignment of Management Agreement and Subordination of Management Fees, dated the same date as this Loan Agreement, among Borrower, Lender and Property Manager, including all schedules, riders, allonges and addenda, as such Assignment of Management Agreement may be amended from time to time, and any

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future Assignment of Management Agreement and Subordination of Management Fees executed in accordance with Section 6.09(d).

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

“Bankruptcy Code” means the United States Bankruptcy Code, 11 U.S.C. Section 101 et seq., as amended from time to time.

“Borrower” means all Persons identified as “Borrower” in the first paragraph of this Loan Agreement, together with their successors and assigns.

“Borrower Information” is defined in Section 10.02(d).

“Borrower Principal” means any of the following:

(i) Any general partner of Borrower (if Borrower is a partnership).

(ii) Any manager or managing member of Borrower (if Borrower is a limited liability company).

(iii) Any Person (limited partner, member or shareholder) with a collective direct or indirect equity interest in Borrower equal to or greater than 25%.

(iv) Any Guarantor of all or any portion of the Loan or of any obligations of Borrower under the Loan Documents.

“Borrower Proof of Loss Threshold” means $172,000.

“Borrower Proof of Loss Maximum” means $688,000.

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

“Cap Agreement” means any interest rate cap agreement, interest rate swap agreement or other interest rate-hedging contract or agreement obtained by Borrower from a Cap Provider as a requirement of any Loan Document or as a condition of Lender’s making the Loan.

“Cap Collateral” means all of the following:

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(i) The Cap Agreement.

(ii) The Cap Payments.

(iii) All rights of Borrower under any Cap Agreement and all rights of Borrower to all Cap Payments, including contract rights and general intangibles, whether existing now or arising after the date of this Loan Agreement.

(iv) All rights, liens and security interests or guaranties granted by a Cap Provider or any other Person to secure or guaranty payment of any Cap Payments whether existing now or granted after the date of this Loan Agreement.

(v) All documents, writings, books, files, records and other documents arising from or relating to any of the foregoing, whether existing now or created after the date of this Loan Agreement.

(vi) All cash and non-cash proceeds and products of (ii) through (v) of this definition.

“Cap Payment(s)” means any and all monies payable pursuant to any Cap Agreement by a Cap Provider.

“Cap Provider” means the interest rate cap provider or other counterparty to a Cap Agreement or any guarantor of the obligations of any such cap provider or counterparty.

“Capital Replacement” means the replacement of those items listed on Exhibit F.

“Capped Interest Rate” is defined in the Note, if applicable.

“Claim” is defined in Section 10.02(f).

“Clean Site Assessment” is defined in Section 7.05(b)(i).

“Closing Date” means the date on which Lender disburses the proceeds of the Loan to or for the account of Borrower.

“Commitment Letter” means the fully executed commitment letter or early rate lock application between Lender and Borrower issued in connection with the Loan, as such document may have been modified, amended or extended.

“Completion Date” means, with respect to any Repair, the date specified for that Repair in theRepair Schedule of Work, as such date may be extended.

“Condemnation” is defined in Section 6.11(a).

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“Control” means to possess, directly or indirectly, the power to direct or cause the direction of the management or policies of a Person, whether through the ownership of voting securities, by contract or otherwise, including the power to elect a majority of the directors or trustees of a corporation or trust, as the case may be.

“Cut-off Date” is defined in the Note, if applicable.

“Default Rate” is defined in the Note.

“Defeasance” is defined in Section 11.12.

“Defeasance Closing Date” is defined in Section 11.12(b).

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

“Defeasance Fee” is defined in Section 11.12(c).

“Defeasance Notice” is defined in Section 11.12(b).

“Defeasance Period” is defined in the Note, if applicable.

“Designated Entity for Transfers” means each entity so identified in Exhibit I, and that entity’s successors and permitted assigns.

“Disclosure Document” is defined in Section 11.08.

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

“Eligible Institution” means a federal or state chartered depository institution or trust company insured by the Federal Deposit Insurance Corporation, the short term unsecured debt obligations or commercial paper of which are rated at least A-1 by Standard & Poor’s Ratings Services, a division of The McGraw-Hill Companies, Inc., P-1 by Moody’s Investors Service, Inc. and F-3 by Fitch, Inc. in the case of accounts in which funds are held for 30 days or less or, in the case of letters of credit or accounts in which funds are held for more than 30 days, the long term unsecured debt obligations of which are rated at least “A” by Fitch, Inc. and Standard & Poor’s

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Ratings Services, a division of The McGraw-Hill Companies, Inc., and “A2” by Moody’s Investors Service, Inc. If at any time an Eligible Institution does not meet the required rating, the Loan Servicer must move the Eligible Account within 30 days of such event to an appropriately rated Eligible Institution.

“Environmental Inspections” is defined in Section 6.12(e).

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

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

“Event of Default” means the occurrence of any event listed in Section 9.01.

“Extension Period” is defined in the Note, if applicable.

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

“FHLB Obligations” mean direct, non-callable and non-redeemable securities issued, or fully insured as to payment, by the Federal Home Loan Bank.

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

“Freddie Mac” means the Federal Home Loan Mortgage Corporation.

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

“Freddie Mac Web Site” means the web site of Freddie Mac, located at www.freddiemac.com.

“GAAP” means generally accepted accounting principles.

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

“Guarantor” means the Person(s) required by Lender to guaranty all or a portion of Borrower’s obligations under the Loan Documents, as set forth in the Guaranty. The required Guarantors as of the date of this Loan Agreement are set forth in Exhibit I.

“Guaranty” means the Guaranty executed by Guarantor and/or any replacement or supplemental guaranty executed pursuant to the terms of this Loan Agreement.

“Hazard Insurance” is defined in Section 6.10(a).

“Hazardous Materials” means petroleum and petroleum products and compounds containing them, including gasoline, diesel fuel and oil; explosives; flammable materials; radioactive materials; polychlorinated biphenyls (PCBs) and compounds containing them; lead and lead-based paint; asbestos or asbestos containing materials in any form that is or could become friable; underground or above-ground storage tanks, whether empty or containing any substance; any substance the presence of which on the Mortgaged Property is prohibited by any Governmental Authority; any substance that requires special handling and any other material or substance now or in the future that (i) is defined as a “hazardous substance,” “hazardous material,” “hazardous waste,” “toxic substance,” “toxic pollutant,” “contaminant,” or “pollutant” by or within the meaning of any Hazardous Materials Law, or (ii) is regulated in any way by or within the meaning of any Hazardous Materials Law.

“Hazardous Materials Law” and “Hazardous Materials Laws” means any and all federal, state and local laws, ordinances, regulations and standards, rules, policies and other governmental requirements, administrative rulings and court judgments and decrees in effect now or in the future, including all amendments, that relate to Hazardous Materials or the protection of human health or the environment and apply to Borrower or to the Mortgaged Property. Hazardous Materials Laws include the Comprehensive Environmental Response, Compensation and Liability Act, 42 U.S.C. Section 9601, et seq., the Resource Conservation and Recovery Act of 1976, 42 U.S.C. Section 6901, et seq., the Toxic Substance Control Act, 15 U.S.C. Section 2601, et seq., the Clean Water Act, 33 U.S.C. Section 1251, et seq., and the Hazardous Materials Transportation Act, 49 U.S.C. Section 5101 et seq., and their state analogs.

“HVAC System” is defined in Section 6.10(a)(v).

“Immediate Family Members” means a Person’s spouse, parent, child (including stepchild), grandchild (including step-grandchild) or sibling.

“Imposition Reserve Deposits” is defined in Section 4.02(a).

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“Impositions” is defined in Section 4.02(a).

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

“Indebtedness” means the principal of, interest at the fixed or variable rate set forth in the Note on, and all other amounts due at any time under, the Note, this Loan Agreement or any other Loan Document, including prepayment premiums, late charges, default interest, and advances as provided in Section 9.02 to protect the security of the Security Instrument.

“Indemnified Party/ies” is defined in Section 10.02(d).

“Indemnitees” is defined in Section 10.02(a).

“Installment Due Date” is defined in the Note.

“Insurance” means Hazard Insurance, liability insurance and all other insurance that Lender requires Borrower to maintain pursuant to this Loan Agreement.

“Intercreditor Agreement” is defined in Section 11.11(b).

“Issuer” means the issuer of any Letter of Credit.

“Issuer Group” is defined in Section 10.02(d).

“Issuer Person” is defined in Section 10.02(d).

“Land” means the land described in Exhibit A.

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

“Lender” means the entity identified as “Lender” in the first paragraph of this Loan Agreement, or any subsequent holder of the Note.

“Lender’s Discretion” means Lender’s reasonable discretion unless otherwise set forth in this Loan Agreement.

“Letter of Credit” means any letter of credit required under the terms of this Loan Agreement or any other Loan Document.

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“LIBOR Index Rate” is defined in the Note, if applicable.

“Lien” means any mortgage, deed of trust, deed to secure debt, security interest or other lien or encumbrance on the Mortgaged Property.

“Loan” is defined on Page 1 of this Loan Agreement.

“Loan Agreement” means this Multifamily Loan and Security Agreement.

“Loan Application” is defined in Section 5.16(a).

“Loan Documents” means the Note, the Security Instrument, this Loan Agreement, all guaranties, all indemnity agreements, all collateral agreements, UCC filings, O&M Programs, the MMP and any other documents now or in the future executed by Borrower, any Guarantor or any other Person in connection with the Loan evidenced by the Note, as such documents may be amended from time to time.

“Loan Servicer” means the entity that from time to time is designated by Lender to collect payments and deposits and receive Notices under the Note, the Security Instrument, this Loan Agreement and any other Loan Document, and otherwise to service the Loan evidenced by the Note for the benefit of Lender.

“Lockout Period,” if applicable, is defined in the Note.

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

“Margin” is defined in the Note, if applicable.

“Material Adverse Effect” means a significant detrimental effect on: (i) the Mortgaged Property, (ii) the business, prospects, profits, operations or condition (financial or otherwise) of Borrower, (iii) the enforceability, validity, perfection or priority of the Lien of any Loan Document, or (iv) the ability of Borrower to perform any obligations under any Loan Document.

“Maturity Date” means the Scheduled Maturity Date, as defined in the Note.

“Maximum Combined LTV” means 70%.

“Minimum DSCR” means, with respect to a Supplemental Loan, (i) if the Senior Indebtedness bears interest at a fixed rate, 1.25:1, or (ii) if the Senior Indebtedness bears interest at a floating rate, 1.15:1.

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“MMP” means a moisture management plan to control water intrusion and prevent the development of Mold or moisture at the Mortgaged Property throughout the term of this Loan Agreement.

“Modified Non-Residential Lease” means an extension or modification of any Non-Residential Lease, which Non-Residential Lease was in existence as of the date of this Loan Agreement.

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

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

(i) The Land, or, if Borrower’s interest in the Land is pursuant to a Ground Lease, the Ground Lease and the Leasehold Estate.

(ii) The Improvements.

(iii) The Fixtures.

(iv) The Personalty.

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

(vi) All proceeds paid or to be paid by any insurer of the Land, the Improvements, the Fixtures, the Personalty or any other part of the Mortgaged Property, whether or not Borrower obtained the Insurance pursuant to Lender’s requirement.

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

(viii) All contracts, options and other agreements for the sale of the Land, or the Leasehold Estate, as applicable, the Improvements, the Fixtures, the Personalty or any other part of the Mortgaged Property entered into by Borrower now or in the

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future, including cash or securities deposited to secure performance by parties of their obligations.

(ix) All proceeds from the conversion, voluntary or involuntary, of any of the items described in items (i) through (viii) of this definition, into cash or liquidated claims, and the right to collect such proceeds.

(x) All Rents and Leases.

(xi) All earnings, royalties, accounts receivable, issues and profits from the Land, the Improvements or any other part of the Mortgaged Property, and all undisbursed proceeds of the Loan.

(xii) All Imposition Reserve Deposits.

(xiii) All refunds or rebates of Impositions by any Governmental Authority or insurance company (other than refunds applicable to periods before the real property tax year in which this Loan Agreement is dated).

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

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

(xvi) If required by the terms of Section 4.05 or elsewhere in this Loan Agreement, all rights under any Letter of Credit and the Proceeds, as such Proceeds may increase or decrease from time to time.

(xvii) If the Note provides for interest to accrue at a floating or variable rate and there is a Cap Agreement, the Cap Collateral.

(xviii) through (xxv) are Reserved.

“New Non-Residential Lease” is any Non-Residential Lease not in existence as of the date of this Loan Agreement.

“Non-Residential Lease” is a Lease of a portion of the Mortgaged Property to be used for non-residential purposes.

“Note” means the Multifamily Note (including any Amended and Restated Note, Consolidated, Amended and Restated Note, or Extended and Restated Note) executed by Borrower in favor of Lender and dated as of the date of this Loan Agreement, including all schedules, riders, allonges

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and addenda, as such Multifamily Note may be amended, modified and/or restated from time to time.

“Notice” or “Notices” means all notices, demands and other communication required under the Loan Documents, provided in accordance with the requirements of Section 11.03.

“O&M Program” is defined in Section 6.12(c) and consists of the following: Asbestos, Above Ground Storage Tank, and Polychlorinated Biphenyls.

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

“Personalty” means all of the following:

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

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

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

(iv) Any operating agreements relating to the Land or the Improvements.

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

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

(vii) Any rights of Borrower in or under any Letter of Credit.

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“Pledge Agreement” is defined in Section 11.12(f)(iii).

“Preapproved Intrafamily Transfer” is defined in Section 7.04.

“Prepayment Premium Period” is defined in the Note.

“Prior Lien” means a pre-existing mortgage, deed of trust or other Lien encumbering the Mortgaged Property.

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

“Proceeds” means the cash obtained by a draw on a Letter of Credit.

“Prohibited Activity or Condition” means each of the following:

(i) The presence, use, generation, release, treatment, processing, storage (including storage in above-ground and underground storage tanks), handling or disposal of any Hazardous Materials on or under the Mortgaged Property.

(ii) The transportation of any Hazardous Materials to, from or across the Mortgaged Property.

(iii) Any occurrence or condition on the Mortgaged Property, which occurrence or condition is or may be in violation of Hazardous Materials Laws.

(iv) Any violation of or noncompliance with the terms of any Environmental Permit with respect to the Mortgaged Property.

(v) Any violation or noncompliance with the terms of any O&M Program.

However, the term “Prohibited Activity or Condition” expressly excludes lawful conditions permitted by an O&M Program or the safe and lawful use and storage of quantities of: (i) pre-packaged supplies, cleaning materials and petroleum products customarily used in the operation and maintenance of comparable multifamily properties, (ii) cleaning materials, personal grooming items and other items sold in pre-packaged containers for consumer use and used by tenants and occupants of residential dwelling units in the Mortgaged Property, and (iii) petroleum products used in the operation and maintenance of motor vehicles from time to time located on the Mortgaged Property’s parking areas, so long as all of the foregoing are used, stored, handled, transported and disposed of in compliance with Hazardous Materials Laws.

“Property Jurisdiction” means the jurisdiction in which the Land is located.

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“Property Manager” means Steadfast Management Company, Inc., a California corporation, or another residential rental property manager which is approved by Lender in writing.

“Property Seller” is defined in Section 5.24.

“Public Fund/REIT Securities” is defined in Section 7.03(c).

“Rate Cap Agreement Reserve Fund”means the account established pursuant to Section 4.07, if applicable, to pay for the cost of a Replacement Cap Agreement.

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

“Release Instruments” is defined in Section 11.12(f).

“Remedial Work” is defined in Section 6.12(f).

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

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

“Repairs” means the repairs to be made to the Mortgaged Property, as described on the Repair Schedule of Work or as otherwise required by Lender in accordance with this Loan Agreement.

“Replacement Cap Agreement”means any replacement Cap Agreement provided to Lender pursuant to Section 4.07(c). The Replacement Cap Agreement must satisfy each of the following requirements:

(i) It must have an effective date not later than the day following the last day of the term of the Cap Agreement that preceded it, and may not expire before the earlier of (A) the 1^st anniversary of the effective date of such Replacement Cap Agreement or (B) the Maturity Date.

(ii) It must obligate the Cap Provider, which Cap Provider must be acceptable to Lender, to make monthly payments to Lender equal to the excess of (A) the actual interest

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on a notional principal amount of the Indebtedness over (B) interest on that notional amount at the same fixed cap rate as that in the original Cap Agreement.

“Replacement Cost” means the estimated replacement cost of the Improvements, Fixtures, and Personalty (or, when used in reference to a property that is not the Mortgaged Property, all improvements, fixtures, and personalty located on such property), excluding any deduction for depreciation, all as determined annually by Borrower using customary methodology and sources of information acceptable to Lender in Lender’s Discretion. Replacement Cost will not include the cost to reconstruct foundations or site improvements, such as driveways, parking lots, sidewalks, and landscaping.

“Reserve Fund” means each account established for Imposition Reserve Deposits, the Replacement Reserve Fund, the Repair Reserve Fund (if any), the Rate Cap Agreement Reserve Fund (if any), the Rental Achievement Reserve Fund (if any), and any other account established pursuant to Article IV of this Loan Agreement.

“Restoration” is defined in Section 6.10(j)(i).

“Scheduled Debt Payments” is defined in Section 11.12(g)(i)(B).

“Secondary Market Transaction” means: (i) any sale or assignment of this Loan Agreement, the Note and the other Loan Documents to one or more investors as a whole loan, (ii) a participation of the Loan to one or more investors, (iii) any deposit of this Loan Agreement, the Note and the other Loan Documents with a trust or other entity which may sell certificates or other instruments to investors evidencing an ownership interest in the assets of such trust or other entity, or (iv) any other sale, assignment or transfer of the Loan or any interest in the Loan to one or more investors.

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

“Securitization Indemnification” is defined in Section 10.02(d).

“Security Instrument” means the mortgage, deed of trust, deed to secure debt or other similar security instrument encumbering the Mortgaged Property and securing Borrower’s performance of its Loan obligations, including Borrower’s obligations under the Note and this Loan Agreement (including any Amended and Restated Security Instrument, Consolidation, Modification and Extension Agreement, Extension and Modification Agreement or similar agreement or instrument amending and restating existing security instruments).

“Senior Indebtedness” means, for a Supplemental Loan, if any, the Indebtedness evidenced by each Senior Note and secured by each Senior Instrument for the benefit of each Senior Lender.

“Senior Instrument” – Not applicable.

“Senior Lender” means each holder of a Senior Note.

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“Senior Loan Documents” means, for a Supplemental Loan, if any, all documents relating to each loan evidenced by a Senior Note.

“Senior Note” means, for a Supplemental Loan, if any, each Multifamily Note secured by a Senior Instrument.

“Servicing Arrangement” is defined in Section 11.06(b).

“Single Purpose Entity” is defined in Section 6.13(a).

“Site Assessment” means an environmental assessment report for the Mortgaged Property prepared at Borrower’s expense by a qualified environmental consultant engaged by Borrower, or by Lender on behalf of Borrower, and approved by Lender, and in a manner reasonably satisfactory to Lender, based upon an investigation relating to and making appropriate inquiries to evaluate the risks associated with Mold and any existence of Hazardous Materials on or about the Mortgaged Property, and the past or present discharge, disposal, release or escape of any such substances, all consistent with ASTM Standard E1527-05 (or any successor standard published by ASTM) and good customary and commercial practice.

“SPE Equity Owner” is not applicable. Borrower will not be required to maintain an SPE Equity Owner in its organizational structure during the term of the Loan and all references to SPE Equity Owner in this Loan Agreement and in the Note will be of no force or effect.

“Successor Borrower” is defined in Section 11.12(b).

“Supplemental Indebtedness” the Indebtedness evidenced by the Supplemental Note and secured by the Supplemental Instrument for the benefit of Supplemental Lender, if any.

“Supplemental Instrument” means, for a Supplemental Loan, if any, the Security Instrument executed to secure the Supplemental Note.

“Supplemental Lender” means, for a Supplemental Loan, if any, the lender named in the Supplemental Instrument and its successors and/or assigns.

“Supplemental Loan” means a loan that is subordinate to the Senior Indebtedness.

“Supplemental Loan Documents” means, for a Supplemental Loan, if any, all documents relating to the loan evidenced by the Supplemental Note.

“Supplemental Mortgage Product” is defined in Section 11.11(a).

“Supplemental Note” means, for a Supplemental Loan, if any, the Multifamily Note secured by the Supplemental Instrument.

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“Tax Code” means the Internal Revenue Code of the United States, 26 U.S.C. Section 1 et seq., as amended from time to time.

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

“Total Insurable Value” means the sum of the Replacement Cost, business income/rental value Insurance and the value of any business personal property.

“Transfer” means any of the following:

(i) A sale, assignment, transfer or other disposition or divestment of any interest in Borrower, a Designated Entity for Transfers, or the Mortgaged Property (whether voluntary, involuntary or by operation of law).

(ii) The granting, creating or attachment of a Lien, encumbrance or security interest (whether voluntary, involuntary or by operation of law).

(iii) The issuance or other creation of an ownership interest in a legal entity, including a partnership interest, interest in a limited liability company or corporate stock.

(iv) The withdrawal, retirement, removal or involuntary resignation of a partner in a partnership or a member or Manager in a limited liability company.

(v) The merger, dissolution, liquidation, or consolidation of a legal entity or the reconstitution of one type of legal entity into another type of legal entity.

(vi) A change of the Guarantor.

For purposes of defining the term “Transfer,” the term “partnership” means a general partnership, a limited partnership, a joint venture, a limited liability partnership, or a limited liability limited partnership and the term “partner” means a general partner, a limited partner, or a joint venturer.

“Transfer” does not include any of the following:

(i) A conveyance of the Mortgaged Property at a judicial or non-judicial foreclosure sale under the Security Instrument.

(ii) The Mortgaged Property becoming part of a bankruptcy estate by operation of law under the Bankruptcy Code.

(iii) The filing or recording of a Lien against the Mortgaged Property for local taxes and/or assessments not then due and payable.

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“Transfer and Assumption Agreement” is defined in Section 11.12(f)(iv).

“Transfer Fee” means a fee paid when the Transfer is completed. Unless otherwise specified, the Transfer Fee will be equal to the lesser of the following:

(i) 1% of the outstanding principal balance of the Indebtedness as of the date of the Transfer.

(ii) $250,000.

“Transfer Processing Fee” means a nonrefundable fee of $15,000 for Lender’s review of a proposed or completed Transfer.

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

“UCC Collateral” is defined in Section 3.03.

“Underwriter Group” is defined in Section 10.02(d).

“Uniform Commercial Code” means the Uniform Commercial Code as promulgated in the applicable jurisdiction.

“Windstorm Coverage” is defined in Section 6.10(a)(iv).

ARTICLE XIII    INCORPORATION OF ATTACHED RIDERS.

The Riders listed on Page ii are attached to and incorporated into this Loan Agreement.

ARTICLE XIV    INCORPORATION OF ATTACHED EXHIBITS.

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The following Exhibits, if marked with an “X” in the space provided, are attached to this Loan Agreement:

X	Exhibit A	Description of the Land (required)
X	Exhibit B	Modifications to Multifamily Loan and Security Agreement
X	Exhibit C	Repair Schedule of Work
X	Exhibit D	Repair Disbursement Request (required)
	Exhibit E	Work Commenced at Mortgaged Property
X	Exhibit F	Capital Replacements (required)
	Exhibit G	Description of Ground Lease
X	Exhibit H	Organizational Chart of Borrower as of the Closing Date (required)
N
X	Exhibit I	Designated Entities for Transfers and Guarantor(s) (required)

Exhibit J Description of Release Parcel

Exhibit K Reserved

Exhibit L Reserved

REMAINDER OF PAGE INTENTIONALLY LEFT BLANK;
SIGNATURES ON FOLLOWING PAGES

Multifamily Loan and Security Agreement Page 103

BORROWER:

STAR BARRETT LAKES, LLC

a Delaware limited liability company

By:    STEADFAST APARTMENT ADVISOR, LLC

a Delaware limited liability company

Non-Member Manager

By:	/s/ Kevin J. Keating	(SEAL)
Name:	Kevin J. Keating
Title:	Treasurer

SIGNATURES CONTINUE ON FOLLOWING PAGE

Multifamily Loan and Security Agreement Page 104

LENDER:

BERKELEY POINT CAPITAL LLC

a Delaware limited liability company

By:	/s/ Deborah Demoney	(SEAL)
	Deborah Demoney
	Assistant Vice President

By:	/s/ Heidi Marrin	(SEAL)
	Heidi Marrin
	Director

Multifamily Loan and Security Agreement Page 105

RIDER TO MULTIFAMILY LOAN AND SECURITY AGREEMENT

REPLACEMENT RESERVE FUND – IMMEDIATE DEPOSITS

(Revised 7-1-2014)

The following changes are made to the Loan Agreement which precedes this Rider:

A.    Section 4.04 is deleted and replaced with the following:

4.04    Replacement Reserve Fund.

(a) Deposits to Replacement Reserve Fund. On the Closing Date, the parties will establish the Replacement Reserve Fund and Borrower will pay the Initial Deposit to Lender for deposit into the Replacement Reserve Fund. Commencing on the date the first installment of principal and/or interest is due under the Note and continuing on the same day of each successive month until the Loan is paid in full, Borrower will pay the Monthly Deposit to Lender for deposit into the Replacement Reserve Fund, together with its regular monthly payments of principal and/or interest as required by the Note. A transfer of funds into the Replacement Reserve Fund from the Repair Reserve Fund, pursuant to the terms of Section 4.03(e), if applicable, will not alter or reduce the amount of any deposits to the Replacement Reserve Fund.

(b) Costs Charged by Lender.

(i) If Lender, in Lender’s Discretion, retains a professional inspection engineer or other qualified third party to inspect any Capital Replacements pursuant to the terms of Section 6.06, Lender may charge Borrower an amount sufficient to pay all reasonable costs and expenses charged by such third party inspector.

(ii) If there are sufficient funds in Replacement Reserve Fund, Lender will be entitled, but not obligated, to deduct from the Replacement Reserve Fund the costs and expenses set forth in Section 4.04(b)(i). Lender will be entitled to charge Borrower for such costs and expenses and Borrower will pay the amount of such item(s) to Lender immediately after Notice from Lender to Borrower of such charge(s).

(iii) If there are insufficient funds in the Replacement Reserve Fund, then Lender will be entitled to charge Borrower for the costs and expenses specified in Section 4.04(b)(i), and Borrower will pay the

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amount of such item(s) to Lender immediately after Notice from Lender to Borrower of such charge(s).

(c) Adjustments to Replacement Reserve Fund. If the initial term of the Loan is greater than 120 months, then the following provisions will apply:

(i) Lender reserves the right to adjust the amount of the Monthly Deposit based on Lender’s assessment of the physical condition of the Mortgaged Property, however, Lender will not make such an adjustment prior to the date that is 120 months after the first installment due date, nor more frequently than every 10 years thereafter during the term of the Loan.

(ii) Borrower will pay the cost of any assessment required by Lender pursuant to Section 4.04(c)(i) to Lender immediately after Notice from Lender to Borrower of such charge.

(iii) Upon Notice from Lender or Loan Servicer, Borrower will begin paying the Revised Monthly Deposit on the first monthly payment date that is at least 30 days after the date of Lender’s or Loan Servicer’s Notice. If Lender or Loan Servicer does not provide Borrower with Notice of a Revised Monthly Deposit, Borrower will continue to pay the Monthly Deposit or the Revised Monthly Deposit then in effect.

(d) Insufficient Amount in Replacement Reserve Fund. If Borrower requests disbursement from the Replacement Reserve Fund for a Capital Replacement in accordance with this Loan Agreement in an amount which exceeds the amount on deposit in the Replacement Reserve Fund, Lender will disburse to Borrower only the amount on deposit in the Replacement Reserve Fund. Borrower will pay all additional amounts required in connection with any such Capital Replacement from Borrower’s own funds.

(e) Reserved.

(f) Reserved.

(g) Disbursements from Replacement Reserve Fund.

(i) Requests for Disbursement. Lender will disburse funds from the Replacement Reserve Fund as follows:

(A) Borrower’s Request. If Borrower determines, at any time or from time to time, that a Capital Replacement is necessary or desirable, Borrower will perform such Capital

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Replacement Reserve Fund - Immediate Deposits

Replacement and request from Lender, in writing, reimbursement for such Capital Replacement. Borrower’s request for reimbursement will include (1) a detailed description of the Capital Replacement performed, together with evidence, satisfactory to Lender, that the cost of such Capital Replacement has been paid, and (2) if required by Lender, lien waivers from each contractor and material supplier supplying labor or materials for such Capital Replacement.

(B) Lender’s Request. If Lender reasonably determines at any time or from time to time, that a Capital Replacement is necessary for the proper maintenance of the Mortgaged Property, it will so notify Borrower, in writing, requesting that Borrower obtain and submit to Lender bids for all labor and materials required in connection with such Capital Replacement. Borrower will submit such bids and a time schedule for completing each Capital Replacement to Lender within 30 days after Borrower’s receipt of Lender’s Notice. Borrower will perform such Capital Replacement and request from Lender, in writing, reimbursement for such Capital Replacement. Borrower’s request for reimbursement will include (1) a detailed description of the Capital Replacement performed, together with evidence, satisfactory to Lender, that the cost of such Capital Replacement has been paid, and (2) if required by Lender, lien waivers from each contractor and material supplier supplying labor or materials for such Capital Replacement.

(ii) Conditions Precedent. Disbursement from the Replacement Reserve Fund will be made no more frequently than once every Replacement Reserve Disbursement Period and, except for the final disbursement, no disbursement will be made in an amount less than the Minimum Replacement Disbursement Request Amount. Disbursements will be made only if the following conditions precedent have been satisfied, as determined by Lender in Lender’s Discretion:

(A) Each Capital Replacement has been performed and/or installed on the Mortgaged Property in a good and workmanlike manner with suitable materials (or in the case of a partial disbursement, performed and/or installed on the Mortgaged Property to an acceptable stage), in accordance with good building practices and all applicable laws,

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Replacement Reserve Fund - Immediate Deposits

ordinances, rules and regulations, building setback lines and restrictions applicable to the Mortgaged Property, and has been paid for by Borrower as evidenced by copies of all applicable paid invoices or bills submitted to Lender by Borrower at the time Borrower requests disbursement from the Replacement Reserve Fund.

(B) There is no condition, event or act that would constitute a default (with or without Notice and/or lapse of time).

(C) No Lien or claim based on furnishing labor or materials has been recorded, filed or asserted against the Mortgaged Property, unless Borrower has properly provided a bond or other security against loss in accordance with applicable law.

(D) All licenses, permits and approvals of any Governmental Authority required for the Capital Replacement as completed to the applicable stage have been obtained and submitted to Lender upon Lender’s request.

(h) Right to Complete Capital Replacements. If Borrower abandons or fails to proceed diligently with any Capital Replacement in a timely fashion or an Event of Default occurs and continues under this Loan Agreement for 30 days after Notice of such failure by Lender to Borrower, Lender will have the right (but not the obligation) to enter upon the Mortgaged Property and take over and cause the completion of such Capital Replacement. However, no such Notice or cure period will apply in the case of such failure which could, in Lender’s sole and absolute discretion, absent immediate exercise by Lender of a right or remedy under this Loan Agreement, result in harm to Lender, tenants or third parties or impairment of the security given under this Loan Agreement, the Security Instrument or any other Loan Document. Any contracts entered into or indebtedness incurred upon the exercise of such right may be in the name of Borrower, and Lender is irrevocably appointed the attorney in fact for Borrower, such appointment being coupled with an interest, to enter into such contracts, incur such obligations, enforce any contracts or agreements made by or on behalf of Borrower (including the prosecution and defense of all actions and proceedings in connection with the Capital Replacement and the payment, settlement or compromise of all bills and claims for materials and work performed in connection with the Capital Replacement) and do any and all things necessary or proper to complete any Capital Replacement, including signing Borrower’s name to any contracts and documents as may be deemed necessary by Lender. In no event will Lender be required to expend its own funds to complete any

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Replacement Reserve Fund - Immediate Deposits

Capital Replacement, but Lender may, in Lender’s Discretion, advance such funds. Any funds advanced will be added to the Indebtedness, secured by the Security Instrument and payable to Lender by Borrower in accordance with the provisions of the Note, this Loan Agreement, the Security Instrument and any other Loan Document pertaining to the protection of Lender’s security and advances made by Lender.

(i) Completion of Capital Replacements. Lender’s disbursement of monies from the Replacement Reserve Fund or other acknowledgment of completion of any Capital Replacement in a manner satisfactory to Lender in Lender’s Discretion will not be deemed a certification by Lender that the Capital Replacement has been completed in accordance with applicable building, zoning or other codes, ordinances, statutes, laws, regulations or requirements of any Governmental Authority. Borrower will at all times have the sole responsibility for ensuring that all Capital Replacements are completed in accordance with all such requirements of any Governmental Authority.

(j)    Reserved.

(k)    Reserved.

B.The following definitions are added to Article XII:

“Initial Deposit” means $0.

“Minimum Replacement Disbursement Request Amount” means $5,000.

“Monthly Deposit” means $13,042.

“Replacement Reserve Deposit” means the Initial Deposit, the Monthly Deposit and/or the Revised Monthly Deposit, as appropriate.

“Replacement ReserveDisbursement Period” means the interval between disbursements from the Replacement Reserve Fund, which interval will be no shorter than once a quarter.

“Replacement Reserve Fund” means the account established pursuant to this Loan Agreement to defray the costs of Capital Replacements.

“Revised Monthly Deposit” means the adjusted amount per month that Lender determines Borrower must deposit in the Replacement Reserve Fund following any adjustment determination by Lender pursuant to Section 4.04(c).

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Replacement Reserve Fund - Immediate Deposits

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Replacement Reserve Fund - Immediate Deposits

RIDER TO MULTIFAMILY LOAN AND SECURITY AGREEMENT

REPAIR RESERVE FUND

(Revised 7-1-2014)

The following changes are made to the Loan Agreement which precedes this Rider:

A.        Section 4.03 is deleted and replaced with the following:

4.03 Repair Reserve Fund.

(a) Deposits to Repair Reserve Fund. Lender and Borrower acknowledge that Borrower has established the Repair Reserve Fund by depositing the Repair Reserve Deposit with Lender on the date of this Loan Agreement, and that Borrower must complete the Repairs required pursuant to Section 6.14.

(b) Costs Charged by Lender.

(i) If Lender, in Lender’s Discretion, retains a professional inspection engineer or other qualified third party to inspect any Repairs pursuant to the terms of Section 6.06, Lender may charge Borrower an amount sufficient to pay all reasonable costs and expenses charged by such third party inspector.

(ii) Lender will be entitled, but not obligated, to deduct from the Repair Reserve Fund the costs and expenses set forth in Section 4.03(b)(i). Lender will be entitled to charge Borrower for such costs and expenses and Borrower will pay the amount of such item(s) to Lender immediately after Notice from Lender to Borrower of such charge(s).

(iii) If there are insufficient funds to pay for the costs and expenses set forth in Section 4.03(b)(i), then Lender will be entitled to charge Borrower for the costs and expenses specified in Section 4.03(b)(i), and Borrower will pay the amount of such item(s) to Lender immediately after Notice from Lender to Borrower of such charge(s).

(c) Insufficient Amount in Repair Reserve Fund. If Lender determines, in Lender’s Discretion that the money in the Repair Reserve Fund is insufficient to pay for the Repairs, Lender will provide Borrower with Notice of such insufficiency, and as soon as possible (but in no event later

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Repair Reserve Fund

than 20 days after such Notice) Borrower will pay to Lender an amount, in cash, equal to such deficiency, which Lender will deposit in the Repair Reserve Fund.

(d) Disbursements of Repair Reserve Fund.

(i) Disbursement. From time to time, as construction and completion of the Repairs progresses, upon Borrower’s submission of a Repair Disbursement Request in the form attached to this Loan Agreement as Exhibit D, and provided that no Event of Default has occurred and no condition exists which but for the passage of time or giving of Notice, or both, would constitute an Event of Default, Lender will make disbursements from the Repair Reserve Fund for payment or reimbursement of the actual costs of the Repairs. In connection with each disbursement, Borrower will take each of the following actions:

(A) Sign Borrower’s Repair Disbursement Request.

(B) Include with each Repair Disbursement Request a report setting out the progress of the Repairs and any other reports or information relating to the construction of the Repairs that may be reasonably requested by Lender.

(C) Include with each Repair Disbursement Request copies of any applicable invoices and/or bills and appropriate lien waivers for the prior period for which disbursement was made, executed by all contractors and suppliers supplying labor or materials for the Repairs.

(D) Include with each Repair Disbursement Request, a report prepared by the professional engineer employed by Lender as to the status of the Repairs, unless Lender has waived this requirement in writing.

(E) Include with each Repair Disbursement Request, Borrower’s written representation and warranty that the Repairs as completed to the applicable stage do not violate any laws, ordinances, rules or regulations, or building setback lines or restrictions, applicable to the Mortgaged Property.

Except for the final Repair Disbursement Request, no Repair Disbursement Request may be for an amount less than the Minimum Repair Disbursement Request Amount.

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Repair Reserve Fund

(ii) Conditions Precedent. Lender will not be obligated to make any disbursement from the Repair Reserve Fund to or for the benefit of Borrower unless at the time of such Repair Disbursement Request all of the following conditions exist:

(A) There exists no condition, event or act that would constitute a default (with or without Notice and/or lapse of time) under this Loan Agreement or any other Loan Document.

(B) Borrower is in full compliance with the provisions of this Loan Agreement, the other Loan Documents and any request or demand by Lender permitted by this Loan Agreement.

(C) No lien or claim based on furnishing labor or materials has been recorded, filed or asserted against the Mortgaged Property, unless Borrower has properly provided bond or other security against loss in accordance with applicable law.

(D) All licenses, permits, and approvals of any Governmental Authority required for the Repairs as completed to the applicable stage have been obtained and submitted to Lender upon Lender’s request.

(iii) Reporting Requirements; Completion. Prior to the applicable Completion Date, Borrower will deliver to Lender, in addition to the information required by Section 4.03(d)(i) above, all of the following:

(A) Contractor’s Certificate. If required by Lender, a certificate signed by each major contractor and supplier of materials, as reasonably determined by Lender, engaged to provide labor or materials for the Repairs to the effect that such contractor or supplier has been paid in full for all work completed and that the portion of the Repairs provided by such contractor or supplier has been fully completed in accordance with the plans and specifications (if any) provided to it by Borrower and that such portion of the Repairs is in compliance with all applicable building codes and other rules and regulations promulgated by any applicable regulatory authority or Governmental Authority.

(B) Borrower’s Certificate. A certificate signed by Borrower to the effect that the Repairs have been fully paid for and that all money disbursed pursuant to this Loan Agreement has

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Repair Reserve Fund

been used for the Repairs and no claim exists against Borrower or against the Mortgaged Property out of which a lien based on furnishing labor or material exists or might ripen. Borrower may except from the certificate described in the preceding sentence any claim(s) that Borrower intends to contest, provided that any such claim is described in Borrower’s certificate and Borrower certifies to Lender that the money in the Repair Reserve Fund is sufficient to make payment of the full amount which might in any event be payable in order to satisfy such claim(s). If required by Lender, Borrower also must certify to Lender that such portion of the Repairs is in compliance with all applicable building codes and zoning ordinances.

(C) Engineer’s Certificate. If required by Lender, a certificate signed by the professional engineer employed by Lender to the effect that the Repairs have been completed in a good and workmanlike manner in compliance with the Repair Schedule of Work and all applicable building codes, zoning ordinances and other rules and regulations promulgated by applicable regulatory or Governmental Authorities.

(D) Other Certificates. Any other certificates of approval, acceptance or compliance required by Lender from any Governmental Authority having jurisdiction over the Mortgaged Property and the Repairs.

(iv) Inspection. Prior to and as a condition of the final disbursement of funds from the Repair Reserve Fund, Lender will inspect or will cause the Repairs and Improvements to be inspected in accordance with the terms of Section 6.06(a), to determine whether all interior and exterior Repairs have been completed in a manner acceptable to Lender.

(v) Indirect and Excess Disbursements from Repair Reserve Fund. Lender, in its sole and absolute discretion, is authorized to hold, use and disburse funds from the Repair Reserve Fund to pay any and all costs, charges and expenses whatsoever and howsoever incurred or required in connection with the construction and completion of the Repairs, or, if an Event of Default has occurred and is continuing, in the payment or performance of any obligation of Borrower to Lender. If Lender, for purposes specified in this Section 4.03, elects to pay any portion of the money in the Repair Reserve Fund to parties other than Borrower, then Lender may do so, at any time and from time to time, and the amount of advances

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Repair Reserve Fund

to which Borrower will be entitled under this Loan Agreement will be correspondingly reduced.

(vi) Repair Schedule of Work. All disbursements from the Repair Reserve Fund will be limited to the costs of those items set forth on the Repair Schedule of Work. Without the prior written consent of Lender, Borrower will not make any payments from the Repair Reserve Fund other than for the costs of those items set forth on the Repair Schedule of Work or alter the Repair Schedule of Work.

(e) Termination of Repair Reserve Fund. The provisions of this Section 4.03 will cease to be effective upon the completion of the Repairs in accordance with this Loan Agreement to Lender’s satisfaction, and the full disbursement by Lender of the Repair Reserve Fund. If there are funds remaining in the Repair Reserve Fund after the Repairs have been completed in accordance with this Loan Agreement, and provided no Event of Default has occurred and is continuing under this Loan Agreement or under any of the other Loan Documents, and no condition exists which but for the passage of time or giving of Notice, or both, would constitute an Event of Default, such funds remaining in the Repair Reserve Fund will be refunded by Lender to Borrower.

(f) Right to Complete Repairs. If Borrower abandons or fails to proceed diligently with the Repairs or otherwise, or there exists an Event of Default under this Loan Agreement, Lender will have the right (but not the obligation) to enter upon the Mortgaged Property and take over and cause the completion of the Repairs. Any contracts entered into or indebtedness incurred upon the exercise of such right may be in the name of Borrower, and Lender is irrevocably appointed the attorney in fact of Borrower, such appointment being coupled with an interest, to enter into such contracts, incur such obligations, enforce any contracts or agreements made by or on behalf of Borrower (including the prosecution and defense of all actions and proceedings in connection with the Repairs and the payment, settlement, or compromise of all claims for materials and work performed in connection with the Repairs) and do any and all things necessary or proper to complete the Repairs including signing Borrower’s name to any contracts and documents as may be deemed necessary by Lender. In no event will Lender be required to expend its own funds to complete the Repairs, but Lender may, in Lender’s sole and absolute discretion, advance such funds. Any funds advanced will be added to the Indebtedness, secured by the Security Instrument and payable to Lender by Borrower in accordance with the provisions of the Loan Documents pertaining to the protection of Lender’s security and advances made by Lender. Borrower waives any and all claims it may have against Lender for materials used, work performed or resultant damage to the Mortgaged Property.

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Repair Reserve Fund

(g) Completion of Repairs. Lender’s disbursement of monies in the Repair Reserve Fund or other acknowledgment of completion of any Repair in a manner satisfactory to Lender will not be deemed a certification by Lender that the Repair has been completed in accordance with applicable building, zoning or other codes, ordinances, statutes, laws, regulations or requirements of any Governmental Authority. Borrower will at all times have the sole responsibility for insuring that all Repairs are completed in accordance with all such governmental requirements.

B.    The following definitions are added to Article XII:

“Minimum Repair Disbursement Request Amount” means $5,000.

“RepairDisbursement Request” means Borrower’s written requests to Lender in the form attached as Exhibit D for the disbursement of money from the Repair Reserve Fund pursuant to Article IV.

“Repair Reserve Deposit” means $10,125.

“Repair Reserve Disbursement Period” means the interval between disbursements from the Repair Reserve Fund, which interval will be no shorter than once every 30 days during the term of this Loan Agreement.

“Repair Reserve Fund” means the account which may be established by this Loan Agreement into which the Repair Reserve Deposit is deposited.

“Repair Schedule of Work” means the Repair Schedule of Work attached as Exhibit C.

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Repair Reserve Fund

RIDER TO MULTIFAMILY LOAN AND SECURITY AGREEMENT

NO DEFEASANCE

(Revised 3-1-2014)

The following changes are made to the Loan Agreement which precedes this Rider:

A. Section 7.01(i) is deleted and replaced with the following:

(i) A Supplemental Instrument that complies with Section 11.11.

B. Section 11.12 is deleted.

C. The following definitions are deleted from Article XII:

“Cut-off Date”

“Defeasance”

“Defeasance Closing Date”

“Defeasance Collateral”

“Defeasance Fee”

“Defeasance Notice”

“Defeasance Period”

“Lockout Period”

“Pledge Agreement”

“Release Instruments”

“Scheduled Debt Payments”

“Successor Borrower”

“Transfer and Assumption Agreement”

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No Defeasance

RIDER TO MULTIFAMILY LOAN AND SECURITY AGREEMENT

ADDITIONAL PROVISIONS FOR

LOANS EQUAL TO OR GREATER THAN $25,000,000

(Revised 3-1-2014)

A. Section 11.14is deleted and replaced with the following:

11.14 Cooperation with Rating Agencies and Investors. At the request of Lender and, to the extent not already required to be provided by Borrower under this Loan Agreement, Borrower must use reasonable efforts to satisfy the market standards to which Lender customarily adheres or which may be reasonably required in the marketplace or by the Rating Agencies in connection with any Securities secured by or evidencing ownership interests in the Note and this Loan Agreement, including all of the following:

(a)    Borrower will providefinancial and other information with                 respect to the Mortgaged Property, the Borrower and the                 Property Manager.

(b)    Borrower will perform or permit or cause to be performed                 or permitted such site inspections, appraisals, market                 studies, environmental reviews and reports (Phase I and, if                 appropriate, Phase II), engineering reports and other due                 diligence investigations of the Mortgaged Property, as may                 be requested by Lender in Lender’s Discretion or may                 reasonably be requested by the Rating Agencies or as may                 be necessary or appropriate in connection with the                     Secondary Market Transaction.

(c)    Borrower will make such representations and warranties as            of the closing date of the Secondary Market Transaction             with respect to the Mortgaged Property, Borrower and the             Loan Documents as are customarily provided in                 securitization transactions and as may be requested by             Lender in Lender’s Discretion or may reasonably be             requested by the Rating Agencies and consistent with the             facts covered by such representations and warranties as             they exist on the date of this Loan Agreement, including             the representations and warranties made in the Loan             Documents, together,

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Additional Provisions for Loans Equal to or Greater than $25,000,000

if customary, with appropriate             verification of and/or consents to the Provided Information             through letters of auditors or opinions of counsel of                 independent attorneys acceptable to Lender and to the             Rating Agencies.

(d) Borrower, at Borrower’s expense, will cause its counsel to render opinions, which may be relied upon by Lender, the Rating Agencies and their respective counsel, agents and representatives, as to nonconsolidation, fraudulent conveyance, and true sale or any other opinion customary in securitization transactions with respect to the Mortgaged Property and Borrower and its Affiliates, which counsel and opinions must be satisfactory to Lender in Lender’s Discretion and be reasonably satisfactory to the Rating Agencies.

(e) Borrower will execute such amendments to the Loan Documents and organizational documents, establish and fund the Replacement Reserve Fund, if any, and complete any Repairs, if any, as may be requested by Lender or by the Rating Agencies or otherwise to effect the Secondary Market Transaction; provided, however, that the Borrower will not be required to modify or amend any Loan Document if such modification or amendment would (i) change the interest rate, the stated maturity or the amortization of principal set forth in the Note, or (ii) modify or amend any other material economic term of the Loan.

(f) Borrower will pay all reasonable third party costs and expenses incurred by Lender in connection with Borrower’s complying with requests made under this Section.

B.    The following definitions are added to Article XII:

“Provided Information” means the information provided by Borrower as required by Section 11.14 (a), (b) and (c).

“Securities” means rated single or multi‑class securities.

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Additional Provisions for Loans Equal to or Greater than $25,000,000

RIDER TO MULTIFAMILY LOAN AND SECURITY AGREEMENT

PROPERTY IMPROVEMENT ALTERATIONS

(Revised 9-25-2014)

The following changes are made to the Loan Agreement which precedes this Rider:

A. Section 6.09(e) is deleted and replaced with the following:

(e) Alteration of Mortgaged Property. Borrower will give Notice to Lender of and, unless otherwise directed in writing by Lender, will appear in and defend any action or proceeding purporting to affect the Mortgaged Property, Lender’s security or Lender’s rights under this Loan Agreement. Borrower will not (and will not permit any tenant or other Person to) remove, demolish or alter the Mortgaged Property or any part of the Mortgaged Property, including any removal, demolition or alteration occurring in connection with a rehabilitation of all or part of the Mortgaged Property, except that each of the following is permitted:

(i) Repairs or Capital Replacements pursuant to Sections 4.03 or 4.04.

(ii) Repairs or Capital Replacements made in connection with the replacement of tangible Personalty.

(iii) If Borrower is a cooperative housing corporation or association, Repairs or Capital Replacements to the extent permitted with respect to individual dwelling units under the form of a proprietary lease or occupancy agreement.

(iv)  Repairs orCapital Replacements in connection with making an individual unit ready for a new occupant or pursuant to Sections 6.09(a) and (c).

(v) Property Improvement Alterations, provided that each of the following conditions is satisfied:

(A) At least 30 days prior to the commencement of any Property Improvement Alterations, Borrower must submit to Lender a Property Improvement Notice. The Property Improvement Notice must include all of the following information:

(1) The expected start date and completion date of the Property Improvement Alterations.

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Property Improvement Alterations

(2) A description of the anticipated Property Improvement Alterations to be made

(3) The projected budget of the Property Improvement Alterations and the source of funding.

In the event any changes to Property Improvement Alterations as described in the Property Improvement Alterations Notice are made that extend beyond the overall scope and intent of the Property Improvement Alterations set forth in the Property Alterations Notice (e.g., renovations changed to renovate common areas but Property Improvement Alterations Notice only described renovations to the residential dwelling unit bathrooms), Borrower must submit a new Property Alterations Notice to Lender in accordance with this subsection 6.09(e)(v)(A).

(B) The Property Improvement Alterations may not be commenced within 12 months prior to the Maturity Date without prior written consent of the Lender and must be completed at least 6 months prior to the Maturity Date.

(C) Neither the performance nor completion of the Property Improvement Alterations may result in any of the following:

(1) An adverse effect on any Major Building Systems.

(2) A change in residential dwelling unit configurations on a permanent basis.

(3)    An increase or decrease in the total number of residential dwelling units.

(4) The demolition of any existing Improvements.

(5) A permanent obstruction of tenants’ access to units or a temporary obstruction of tenants’ access to units without a reasonable alternative access provided during the period of renovation which causes the obstruction.

(D) The cost of the Property Improvement Alterations made to residential dwelling units during the term of the Mortgage must not exceed the Property Improvement Total Amount.

(E) The Leases used to calculate Minimum Occupancy for use in Section 6.09(e)(v)(I) must meet all of the following conditions:

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Property Improvement Alterations

(1) The Leases are with tenants that are not Affiliates of Borrower or Guarantor (except as otherwise expressly agreed by Lender in writing).

(2) The Leases are on arms’ length terms and conditions.

(3) The Leases otherwise satisfy the requirements of the Loan Documents.

(F) The Property Improvement Alterations must be completed in accordance with Section 6.14 and any reference to Repairs in Sections 6.06 and 6.14 will be deemed to include Property Improvement Alterations.

(G) Upon completion of the applicable Property Improvement Alterations, Borrower must provide all of the following to the Lender:

(1) Borrower’s Certificate of Property Improvement Alterations Completion, in the form attached as Schedule 1 to this Rider (“Certificate of Completion”).

(2) Any other certificates or approval, acceptance or compliance required by Lender, including certificates of occupancy, from any Governmental Authority having jurisdiction over the Mortgaged Property and the Property Improvement Alterations and professional engineers certifications.

(H) Borrower must deliver to Lender within 10 days of Lender’s request a written status update on the Property Improvement Alterations.

(I) While Property Improvement Alterations that result in individual residential dwelling units not being available for leasing are ongoing, if a Rent Schedule shows that the occupancy of the Mortgaged Property has decreased to less than the Minimum Occupancy, Borrower must take each of the following actions:

(1) Complete all pending Property Improvement Alterations to such individual residential dwelling units in a timely manner until the Mortgaged Property satisfies the Minimum Occupancy requirement.

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Property Improvement Alterations

(2) Suspend any additional Property Improvement Alterations which would cause residential dwelling units to be unavailable for leasing until the Mortgaged Property satisfies the Minimum Occupancy requirement.

(J) In the event Property Improvement Alterations have commenced on the Mortgaged Property, Borrower will deliver to Lender, upon Lender’s request, the Certificate of Completion together with such additional information as Lender may request within a timely manner.

(K) At no time during the term of the Mortgage may the Property Improvement Total Amount (including any amounts expended by Borrower on Property Improvement Alterations for Non-Residential Units) outstanding for services and/or materials that are then due and payable exceed $3,430,000; provided that at no time will such amount exceed the Property Improvement Total Amount.

B. The following definitions are added to Article XII:

“Major Building System” means one that is integral to the Improvements, providing basic services to the tenants and other occupants of the Improvements including

• Electrical (electrical lines or power upgrades, excluding fixture replacement)

• HVAC (central and unit systems, excluding replacement of in kind unit systems)

• Plumbing (supply and waste lines, excluding fixture replacement)

• Structural (foundation, framing, and all building support elements)

“Minimum Occupancy” means 85% of units at the Mortgaged Property with leases that comply with Section 5.11 and Section 6.09(e)(v)(E).

“Property Improvement Alterations” means alterations and additions to the Improvements existing at or upon the Mortgaged Property as of the date of this Loan Agreement, which are being made to renovate or upgrade the Mortgaged Property and are not otherwise permitted under this Section 6.09(e). Repairs, Capital Replacements, Restoration or other work required to be performed at the Mortgaged Property pursuant to Sections 6.10 or 6.11 will not constitute Property Improvement Alterations.

“Property Improvement Notice” means a Notice to Lender that Borrower intends to begin the Property Improvement Alterations identified in the Property Improvement Notice.

“Property Improvement Total Amount” means the aggregate of $9,840,000 during the term of the Mortgage.

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Property Improvement Alterations

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Property Improvement Alterations

SCHEDULE 1

Freddie Mac Loan Number:

Property Name:

BORROWER’S CERTIFICATE OF

PROPERTY IMPROVEMENT ALTERATIONS COMPLETION

(Revised 6-10-2014)

THIS BORROWER’S CERTIFICATE OF PROPERTY IMPROVEMENT ALTERATIONS COMPLETION (“Certificate”) is made as of _______ ___, 20___, by ______________, a ________________ (“Borrower”) for the benefit of ________________, a ________________, and it successors and assigns (collectively, “Lender”).

In connection with Section 6.09(e)(v)(G) of the Loan Agreement, Borrower certifies to Lender as follows:

[INSERT THE APPLICABLE SECTION (a) AND DELETE THE OTHER:

USE THE FOLLOWING IF ALL PROPERTY IMPROVEMENT ALTERATIONS THAT WERE COMMENCED HAVE BEEN COMPLETED]

(a) All Property Improvement Alterations described in the Property Improvement Notice that were commenced have been completed. The completed Property Improvement Alterations and their completion dates are as follows:

Description of Property Improvement Alteration Commenced Completion Date

OR

[USE THE FOLLOWING IF MINIMUM OCCUPANCY HAS DECREASED BELOW THE MINIMUM OCCUPANCY REQUIREMENT AND NOT ALL THE PROPERTY IMPROVEMENT ALTERATIONS THAT WERE COMMENCED HAD BEEN COMPLETED AT SUCH TIME]

(a) All Property Improvement Alterations described in the Property Improvement Notice that resulted in individual residential dwelling units not being available for leasing that were

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Property Improvement Alterations

commenced have been or will be completed in a timely manner. Such Property Improvement Alterations that were commenced and their completion dates and/or, if applicable, anticipated completion dates, are as follows:

Description of Property Improvement Alteration Commenced Completion Date Anticipated Completion Date Comments

FOR ALL LOANS:

(b) The completed Property Improvement Alterations were completed in a good and workmanlike manner and in compliance with all laws (including, without limitation, any and all life safety laws, environmental laws, building codes, zoning ordinances and laws for the handicapped and/or disabled)

(c) Should Borrower intend to contest any claim or claims for labor, materials or other costs, Borrower agrees to give Lender notice within 30 days of the existence of such claim or claims and certifies to Lender that payment of the full amount which might in any event be payable in order to satisfy such claim or claims will be made.

[INSERT THE FOLLOWING IF MINIMUM OCCUPANCY HAS DECREASED BELOW THE MINIMUM OCCUPANCY REQUIREMENT]

(d) Any additional Property Improvement Alterations not yet commenced which would cause residential dwelling units to be unavailable for leasing have been suspended.

[BORROWER SIGNATURE]

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Property Improvement Alterations

RIDER TO MULTIFAMILY LOAN AND SECURITY AGREEMENT

LIMITED PARTNER OR NON-MANAGING MEMBER TRANSFER

(Revised 7-2-2014)

The following changes are made to the Loan Agreement which precedes this Rider:

A.    Section 7.03(d)(vi) is deleted and replaced with the following:

(vi) Limited Partner or Non-Managing Member Transfer. A Transfer that results in the cumulative Transfer of more than 50% and up to 100% of the non-managing membership interests in or the limited partnership interests in Borrower or any Designated Entity for Transfer (“Investor Interests”) to third party transferees (“Investor Interest Transfer”), provided that each of the following conditions is satisfied:

(A) Borrower provides Lender with at least 30 days prior Notice of the proposed Investor Interest Transfer.

(B) At the time of the proposed Investor Interest Transfer, no Event of Default has occurred and is continuing and no event or condition has occurred and is continuing that, with the giving of Notice or the passage of time, or both, would become an Event of Default.

(C) Following the Investor Interest Transfer, Control and management of the day-to-day operations of Borrower continue to be held by the Person exercising such Control and management immediately prior to the Investor Interest Transfer and there is no change in the Guarantor, if applicable.

(D) The Investor Interest Transfer does not result in a Transfer of the type described in Section 7.02(b).

(E) At any time that one Person acquires 25% or more of the aggregate of direct or indirect Investor Interests as a result of the Investor Interest Transfer, Borrower must meet the following additional requirements:

(1) Borrower pays to Lender the Transfer Processing Fee at the time the Borrower provides Lender with the Notice set forth subsection (A) above.

(2) Borrower pays or reimburses Lender, upon demand, for all costs and expenses, including all Attorneys’ Fees and Costs, incurred by Lender in connection with the Investor Interest Transfer.

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Limited Partner or Non-Managing Member Transfer

(3) Lender receives confirmation acceptable to Lender that (X) the requirements of Section 6.13 continue to be satisfied, and (Y) the term of existence of the holder of 25% or more of the Investor Interests after the Investor Interest Transfer (exclusive of any unexercised extension options or rights) does not expire prior to the Maturity Date.

(4) Lender receives organizational charts reflecting the structure of Borrower prior to and after the Investor Interest Transfer and copies of the then-current organizational documents of Borrower and the entity in which Investor Interests were transferred, if different from Borrower, including any amendments.

(5) Each transferee with an interest of 25% or more delivers to Lender a certification that each of the following is true:

(X) He/she/it has not been convicted of fraud or a crime involving moral turpitude (or if an entity, then no principal of such entity has been convicted of fraud or a crime involving moral turpitude).

(Y) He/she/it has not been involved in a bankruptcy or reorganization within the ten years preceding the date of the Investor Interest Transfer.

(6) Borrower delivers to Lender searches confirming that no transferee with an interest of 25% or more is on the list of Specially Designated Nationals or other blocked persons published by the U.S. Office of Foreign Assets Control, or on the list of persons or entities prohibited from doing business with the Department of Housing and Urban Development.

(7) If a nonconsolidation opinion was delivered on the Closing Date and if, after giving effect to the Investor Interest Transfer and all prior Transfers, 50% or more in the aggregate of direct or indirect interests in Borrower are owned by any Person and its Affiliates that owned less than a 50% direct or indirect interest in Borrower as of the Closing Date, Borrower delivers to Lender an opinion of counsel for Borrower, in form and substance satisfactory to Lender, with regard to nonconsolidation.

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Limited Partner or Non-Managing Member Transfer

B. The following definitions are added to Article XII:

“Investor Interest Transfer” is defined in Section 7.03(d)(vi).

“Investor Interests” is defined in Section 7.03(d)(vi).

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Limited Partner or Non-Managing Member Transfer

RIDER TO MULTIFAMILY LOAN AND SECURITY AGREEMENT

RATE CAP AGREEMENT AND RATE CAP AGREEMENT RESERVE FUND

(Revised 7-17-2014)

The following changes are made to the Loan Agreement which precedes this Rider:

A.    Section 3.04 is deleted and replaced with the following:

3.04    Cap Agreement and Cap Collateral Assignment.

(a) Cap Agreement. To protect against fluctuations in interest rates, Borrower must obtain and maintain a Cap Agreement at all times so long as the Loan is outstanding. The Cap Agreement must be successfully bid no later than the Closing Date and be effective for an initial term ending not earlier than the third (3^rd) anniversary of the Closing Date. The initial Cap Agreement must be in a Notional Amount equal to the principal amount of the Loan on the Closing Date and have a Strike Rate that does not exceed the Original Strike Rate. The Cap Agreement, including any Replacement Cap Agreement, must obligate the Cap Provider to make monthly payments directly to Lender or to Loan Servicer on behalf of Lender in an amount equal to the excess of (i) the interest on the Notional Amount at the Index Rate over (ii) interest on the Notional Amount at the Strike Rate.

(b) Replacement Cap Agreement. At least 60 days prior to the date on which an existing Cap Agreement terminates, Borrower must give Notice to and provide evidence satisfactory to Lender that Borrower will deliver a Replacement Cap Agreement. Borrower must ensure that the Replacement Cap Agreement is in full force and effect not later than the day immediately following the expiration of the then-existing Cap Agreement. Any Replacement Cap Agreement must (i) have a term not earlier than one year from its effective date, (ii) have a Strike Rate that does not exceed the Original Strike Rate, and (iii) be in a Notional Amount equal to the outstanding Indebtedness on the effective date of the Replacement Cap Agreement.

(c) Attorneys’ Fees and Costs. Borrower must pay or reimburse Lender, upon demand, for all costs and expenses in connection with any Replacement Cap Agreement, including (i) all Attorneys’ Fees and Costs, incurred by Lender, and (ii) the cost of the cap broker, if any.

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Rate Cap Agreement and Rate Cap Agreement Reserve Fund

(d) Cap Collateral. To secure Borrower’s payment obligations under the Loan, Borrower grants to Lender a security interest in the Cap Collateral, including any Replacement Cap Agreement.

B.    Section 4.07 is deleted and replaced with the following:

4.07    Rate Cap Agreement Reserve Fund.

(a) Deposits to Rate Cap Agreement Reserve Fund. If the initial Cap Agreement terminates prior to the Maturity Date, Lender will establish the Rate Cap Agreement Reserve Fund on the Closing Date. Commencing on the date the first installment of principal and/or interest is due under the Note and continuing on the same day for each successive month until the purchase of the last Replacement Cap Agreement, Borrower must pay to Lender an amount equal to the Rate Cap Reserve Deposit.

(b) Adjustments to Rate Cap Reserve Deposit. Lender will recompute the amount of the Rate Cap Reserve Deposit every six (6) months based on the outstanding Indebtedness at the time Lender recomputes the amount of the Rate Cap Reserve Deposit. Lender will provide Notice to Borrower of any revised Rate Cap Reserve Deposit.

(c) Disbursements from Rate Cap Agreement Reserve Fund. Lender will apply the funds in the Rate Cap Agreement Reserve Fund to the cost of the Replacement Cap Agreement, unless an Event of Default has occurred and is continuing, in which case Lender at its option may apply such funds to the Indebtedness in any amount and in any order as Lender determines in Lender’s discretion. To the extent there are funds in the Rate Cap Agreement Reserve Fund in excess of the cost of the Replacement Cap Agreement, such funds may be applied to pay Attorneys’ Fees and Costs related to the Replacement Cap Agreement and to pay the cap broker.

(d) Termination of Rate Cap Agreement Reserve Fund. Upon purchase by Borrower of a Replacement Cap Agreement with an expiration date on or after the Maturity Date, Borrower will no longer be required to make Rate Cap Reserve Deposits. Any funds remaining in the Rate Cap Agreement Reserve Fund will be returned to Borrower upon the earlier to occur of (i) purchase of a Cap Agreement with a termination date not earlier that the Maturity Date, or (ii) payment in full of the Indebtedness.

C. Section 5.22 is deleted and replaced with the following:

5.22 Cap Collateral.

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Rate Cap Agreement and Rate Cap Agreement Reserve Fund

(a) Obligation to Make Cap Payments. Borrower has instructed each Cap Provider and any guarantor of a Cap Provider’s obligations to make Cap Payments directly to Lender or to Loan Servicer on behalf of Lender.

(b) Dodd-Frank Act. Borrower has complied with the applicable requirements of the Dodd-Frank Act in purchasing the initial Cap Agreement.

D. Section 6.18 is deleted and replaced with the following:

6.18 Cap Collateral.

(a) Obligation to Make Payments. Borrower will instruct each Cap Provider and any guarantor of a Cap Provider’s obligations to make Cap Payments directly to Lender or to Loan Servicer on behalf of Lender.

(b) Dodd-Frank Act. Borrower will comply with the applicable requirements of the Dodd-Frank Act in purchasing any Replacement Cap Agreement.

E. The following definitions are added to Article XII:

“Cap Provider” means the third-party financial institution approved by Lender that is the counterparty under the Cap Agreement or any Replacement Cap Agreement.

“Dodd Frank Act” means the Dodd-Frank Wall Street Reform and Consumer Protection Act.

“Index Rate” means the published variable rate index designated in the Cap Agreement as the “Floating Rate Option,” which Index Rate must be 1-month LIBOR.

“Notional Amount” means the dollar amount designated in the Cap Agreement as the “Notional Amount” which must be (i) with respect to the initial Cap Agreement, an amount equal to the principal amount of the Loan on the Closing Date, and (ii) with respect to any Replacement Cap Agreement, an amount equal to the outstanding Indebtedness on the commencement date of the Replacement Cap Agreement.

“Original Strike Rate” means 4.23%.

“Rate Cap Reserve Deposit” means a monthly amount payable by Borrower sufficient to accumulate funds in an amount equal to 125100% of the amount estimated by Lender to be sufficient to purchase, immediately prior to termination of the then-existing Cap Agreement, a Replacement Cap Agreement (i) expiring on the Maturity Date (or on the two-year anniversary of the expiring Cap Agreement, whichever occurs first), (ii) having a Notional Amount equal to the outstanding Indebtedness on the commencement date of the Replacement Cap Agreement, and (iii) having a Strike Rate not greater than the Original Strike Rate.

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Rate Cap Agreement and Rate Cap Agreement Reserve Fund

“Replacement Cap Agreement” means any Cap Agreement satisfying the provisions of this Loan Agreement, using documentation approved by Lender, and purchased by Borrower to replace the initial Cap Agreement or any subsequent Cap Agreement.

“Strike Rate” means a fixed rate of interest under the Cap Agreement that does not exceed the Original Strike Rate.

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Rate Cap Agreement and Rate Cap Agreement Reserve Fund

RIDER TO MULTIFAMILY LOAN AND SECURITY AGREEMENT

TERMITE OR WOOD DAMAGING INSECT CONTROL

(Revised 3-1-2014)

The following changes are made to the Loan Agreement which precedes this Rider:

A. Section 6.09(k) is deleted and replaced with the following:

(k) Termite or Wood Damaging Insect Control. Within ninety (90) days of the Closing Date,Borrower will enter intomaintaina contract with a qualified service provider for control of termites or other wood damaging insects at the Mortgaged Property and maintain such contract for so long as the Indebtedness remains outstanding.

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Termite or Wood Damaging Insect Control

RIDER TO MULTIFAMILY LOAN AND SECURITY AGREEMENT

GALVANIZED STEEL PIPING/POLYBUTYLENE PIPING

(Revised 3-1-2014)

The following changes are made to the Loan Agreement which precedes this Rider:

A.    Section 6.09(i) is deleted and replaced with the following:

(i) Galvanized Steel Piping/Polybutylene Piping. Without limiting any other provisions of this Section 6.09, Borrower’s obligations set forth in Section 6.09(a), 6.09(c) and Section 6.09(d) will also include all of the following:

(i) Borrower will inspect galvanized steel piping/polybutylene piping at the Mortgaged Property for potential leaks or failures.

(ii) Borrower will replace galvanized steel piping/polybutylene piping with copper or PVC or CPVC piping, if it is deemed prudent to prevent damage to the Mortgaged Property.

(iii) Borrower will immediately replace damaged galvanized steel piping/polybutylene piping (and as much adjacent undamaged piping as is prudent) with copper or PVC or CPVC piping.

(iv) Borrower will promptly repair, restore, or replace any of the Mortgaged Property damaged by leaks in, or other failure of, any galvanized steel piping/polybutylene piping.

B.    Section 6.09(e)(vii) is deleted and replaced with the following:

(vii)    Repairs made pursuant to Section 6.09(i).

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Galvanized Steel Piping/Polybutylene Piping

RIDER TO MULTIFAMILY LOAN AND SECURITY AGREEMENT

TRADE NAMES

(Revised 3-1-2014)

The following changes are made to the Loan Agreement which precedes this Rider:

A.    Section 6.30 is deleted and replaced with the following:

6.30 Lender’s Right To Use Trade Name. Notwithstanding anything contained in this Loan Agreement, Borrower agrees that Lender will have an irrevocable license, coupled with an interest and for which consideration has been paid and received, to use and disseminate existing brochures, pamphlets, and other marketing materials relating to any of the Mortgaged Property, notwithstanding that they may include the name “STAR” and “Steadfast” and/or associated trademark rights and trade names relating to any of the Mortgaged Propertyfor a period not to exceed 120 days after the date Lender acquires the Mortgaged Property by foreclosure or deed-in-lieu of foreclosure.

B. Section (xv) of the definition of “Mortgaged Property” in Article XII is modified to read as follows:

(xv) All names under or by which any of the Mortgaged Property may be operated or known, and all trademarks, trade names and goodwill relating to any of the Mortgaged Property; provided however, that the name “STAR” and “Steadfast” and/or associated trademark rights are not assigned to Lender, subject to Section 6.30 of this Loan Agreement.

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Trade Names

RIDER TO MULTIFAMILY LOAN AND SECURITY AGREEMENT

MONTH TO MONTH LEASES

(Revised 3-1-2014)

The following changes are made to the Loan Agreement which precedes this Rider:

A. Section 5.11 is deleted and replaced with the following:

5.11 Term of Leases. Unless otherwise approved in writing by Lender, all Leases for residential dwelling units with respect to the Mortgaged Property are on forms acceptable to Lender, are for initial terms of at least 6 months and not more than 2 years, and do not include options to purchase; provided, however, that up to 10% of all Leases may be for an initial term of less than 6 months, but not less than 1 month.

B.    Section 6.15(a) is deleted and replaced with the following:

(a) Borrower will, promptly upon Lender’s request, deliver to Lender an executed copy of each residential Lease then in effect. All Leases for residential dwelling units will be on forms acceptable to Lender, will be for initial terms of at least 6 months and not more than 2 years, and will not include options to purchase; provided, however, that up to 10% of all Leases may be for an initial term of less than 6 months, but not less than 1 month.

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Month to Month Leases

EXHIBIT A

DESCRIPTION OF THE LAND

ALL THAT TRACT OR PARCEL OF LAND LYING AND BEING IN LAND LOTS 791, 792 AND 793 OF THE 16TH DISTRICT, 2ND SECTION AND LAND LOT 210 OF THE 20TH DISTRICT, 2ND SECTION, OF COBB COUNTY, GEORGIA, AND BEING MORE PARTICULARLY DESCRIBED AS FOLLOWS:

BEGINNING AT AN IRON PIN FOUND (1/2” REBAR) MARKING THE COMMON CORNER OF LAND LOTS 791, 792, 793 AND 794 OF THE 16TH DISTRICT, 2ND SECTION OF COBB COUNTY; THENCE ALONG THE SOUTH LINE OF LAND LOT 792 (SAID LINE BEING COMMON TO LAND LOTS 792 AND 793), SOUTH 89°47‘27“ WEST FOR A DISTANCE OF 669.80 FEET TO AN IRON PIN FOUND (1-1/2” CRIMPED TOP PIPE); THENCE DEPARTING SAID SOUTH LINE OF LAND LOT 792 AND PROCEED SOUTH 00°14‘00“ WEST FOR A DISTANCE OF 495.17 FEET TO AN IRON PIN PLACED (1/2” REBAR); THENCE SOUTH 00° 14‘00“ WEST FOR A DISTANCE OF 847.50 FEET TO AN IRON PIN PLACED (1/2” REBAR) ON THE SOUTH LINE OF LAND LOT 793 (SAID LINE BEING COMMON TO LAND LOTS 793 & 864); THENCE ALONG THE SOUTH LINE OF LAND LOT 793 (SAID LINE BEING COMMON TO LAND LOTS 793 & 864), NORTH 89°06‘43“ WEST FOR A DISTANCE OF 648.52 FEET TO A NAIL FOUND AT BASE OF 1” AXLE IN ROCK PILE MARKING THE SOUTHWEST CORNER OF LAND LOT 793 AND ON THE EAST LINE OF LAND LOT 210 OF THE 20TH DISTRICT, 2ND SECTION OF COBB COUNTY (SAID LINE HEREINAFTER BEING REFERRED TO AS THE DISTRICT LINE); THENCE DEPARTING SAID DISTRICT LINE AND PROCEED NORTH 88°55‘09“ WEST FOR A DISTANCE OF 363.02 FEET TO AN IRON PIN PLACED (1/2” REBAR); THENCE NORTH 31°11‘20“ WEST A DISTANCE OF 394.24 FEET TO AN IRON PIN FOUND (1/2” REBAR); THENCE NORTH 41°29‘14“ WEST A DISTANCE OF 94.44 FEET TO AN IRON PIN FOUND (5/8” REBAR); THENCE NORTH 45°20‘57“ WEST A DISTANCE OF 178.68 FEET TO AN IRON PIN FOUND (3/4” REBAR); THENCE NORTH 39°50‘52“ WEST A DISTANCE OF 80.81 FEET TO AN IRON PIN PLACED (1/2” REBAR); THENCE NORTH 23°17‘20“ WEST A DISTANCE OF 113.61 FEET TO AN IRON PIN PLACED (1/2” REBAR) ON THE EASTERLY RIGHT-OF-WAY LINE OF GREERS CHAPEL ROAD (VARIABLE R/W); THENCE ALONG THE EASTERLY RIGHT-OF-WAY LINE OF GREERS CHAPEL ROAD THE FOLLOWING COURSES AND DISTANCES: 1) 25.96 FEET ALONG THE ARC OF A CURVE TO THE LEFT, SAID CURVE HAVING A RADIUS OF 196.52 FEET AND BEING SUBTENDED BY A CHORD OF NORTH 03°11‘59“ EAST, 25.94 FEET TO A POINT; 2) THENCE NORTH 00°35‘06“ WEST FOR A DISTANCE OF 514.81 FEET TO AN IRON PIN PLACED (1/2” REBAR) WHERE GREERS CHAPEL ROAD INTERSECTS THE SOUTHEASTERLY RIGHT-OF-WAY LINE OF BARRETT LAKES BOULEVARD (VARIABLE R/W, FKA: NEW GREERS CHAPEL ROAD); THENCE ALONG THE SOUTHEASTERLY, SOUTHERLY AND SOUTHEASTERLY RIGHT-OF-WAY LINE OF BARRETT LAKES BOULEVARD (VARIABLE R/W) THE FOLLOWING COURSES AND DISTANCES: 1) 210.72 FEET ALONG THE ARC OF A CURVE TO THE

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RIGHT, SAID CURVE HAVING A RADIUS OF 348.00 FEET AND BEING SUBTENDED BY A CHORD OF NORTH 31°02‘21“ EAST, 207.52 FEET TO AN IRON PIN PLACED (1/2” REBAR); 2) THENCE SOUTH 41°36’50” EAST A DISTANCE OF 4.50 FEET TO AN IRON PIN PLACED (1/2” REBAR); 3) THENCE 192.98 FEET ALONG THE ARC OF A CURVE TO THE RIGHT, SAID CURVE HAVING A RADIUS OF 343.50 FEET AND BEING SUBTENDED BY A CHORD OF NORTH 64°28‘49“ EAST, 190.45 FEET TO AN IRON PIN PLACED (1/2” REBAR); 4) THENCE NORTH 09°25’32” WEST A DISTANCE OF 3.15 FEET TO AN IRON PIN PLACED (1/2” REBAR); 5) THENCE NORTH 80°29‘41“ EAST AND CROSSING THE DISTRICT LINE FOR A DISTANCE OF 754.59 FEET TO AN IRON PIN PLACED (1/2” REBAR); 6) THENCE 804.09 FEET ALONG THE ARC OF A CURVE TO THE LEFT, SAID CURVE HAVING A RADIUS OF 800.00 FEET AND BEING SUBTENDED BY A CHORD OF NORTH 51°42‘02“ EAST 770.67 FEET TO AN IRON PIN FOUND (3/4” REBAR); 7) THENCE NORTH 22°54‘22“ EAST A DISTANCE OF 408.52 FEET TO AN IRON PIN FOUND (1/2” REBAR); 8) THENCE 181.66 FEET ALONG THE ARC OF A CURVE TO THE RIGHT, SAID CURVE HAVING A RADIUS OF 522.96 FEET AND BEING SUBTENDED BY A CHORD OF NORTH 32°51‘26“ EAST, 180.75 FEET TO AN IRON PIN PLACED (1/2” REBAR); THENCE DEPARTING THE SOUTHEASTERLY RIGHT-OF-WAY LINE OF BARRETT LAKES BOULEVARD (VARIABLE R/W, FKA: NEW GREERS CHAPEL ROAD) AND PROCEED SOUTH 42°49‘17“ EAST FOR A DISTANCE OF 842.11 FEET TO AN IRON PIN PLACED (1/2” REBAR) WITHIN A GEORGIA POWER EASEMENT; THENCE SOUTH 89°27‘09“ WEST FOR A DISTANCE OF 290.07 FEET TO AN IRON PIN PLACED (1/2” REBAR) ON THE EAST LINE OF LAND LOT 792 (SAID LINE BEING COMMON TO LAND LOTS 791 & 792 OF THE 16TH DISTRICT, 2ND SECTION OF COBB COUNTY; THENCE ALONG THE EAST LINE OF LAND LOT 792 (SAID LINE BEING COMMON TO LAND LOTS 791 & 792), SOUTH 00°56‘29“ EAST FOR A DISTANCE OF 682.09 FEET TO AN IRON PIN FOUND (1/2” REBAR) MARKING THE COMMON CORNER OF LAND LOTS 791, 792, 793 AND 794 AND THE POINT OF BEGINNING. SAID TRACT OR PARCEL CONTAINING 67.83537 ACRES OR 2,954,909 SQUARE FEET.

TOGETHER WITH THOSE EASEMENT RIGHTS ARISING UNDER THAT CERTAIN LIMITED WARRANTY DEED FROM SENIOR CORP., A DELAWARE CORPORATION TO STERLING HIGHLANDS DEVELOPMENT PARTNERS, LTD., A GEORGIA CORPORATION, DATED APRIL 1, 1988, RECORDED IN DEED BOOK 4865, PAGE 382, RECORDS OF COBB COUNTY, GEORGIA; AS RE-RECORDED JUNE 22, 1988 AT 1:14 PM., RECORDED IN DEED BOOK 4975, PAGE 385, AFORESAID RECORDS.

ALSO DESCRIBED AS:

BEING THE SAME PROPERTY DESCRIBED IN THE LIMITED WARRANTY DEED FROM SENIOR CORP. TO STERLING HIGHLANDS DEVELOPMENT PARTNERS, LTD., DATED APRIL 1, 1988, AND RECORDED APRIL 4, 1988 IN DEED BOOK 4865, PAGE 382

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COBB COUNTY RECORDS; AS RE-RECORDED JUNE 22, 1988, RECORDED IN DEED BOOK 4975, PAGE 385, AFORESAID RECORDS, MORE PARTICULARY DESCRIBED AS FOLLOWS:

TRACT I

All that tract of land in Land Lots 791, 792 and 793 of the 16th District, 2nd Section, and Land Lot 210 of the 20th District, 2nd Section of Cobb County, Georgia, described as follows;

Beginning at a one inch iron pin set at the point common to Land Lots 792, 793, 794 and 791 of said 16th District and running thence North 88°56’07” West along the south line of Land Lot 792, 671.50 feet to a one inch iron pin found; thence leaving the south line of Land Lot 792 South 01°23’24” West, 495.17 feet to a point; thence South 86°11’49” West, 1,510.95 feet to an iron pin set on the east side of Greers Chapel Road (being a 50 foot right-of-way); thence along the east side of Greers Chapel Road along the arc of a curve having a radius of 207.38 feet to the left (said arc being subtended by a chord bearing North 05°10’30” East, 21.12 feet), 21.13 feet to an iron pin set; thence North 00°34’18” East, 712.35 feet to an iron pin set; thence, leaving the east side of Green Chapel Road North 42°27’30” East, 30.44 feet to an iron pin set on the south side of Relocated Greers Chapel Road (being a 100 foot right-of-way); thence along the south side of Relocated Greers Chapel Road North 81°39’03” East, 1,021.47 feet to an iron pin set; thence along the arc of a curve having a radius of 800.00 feet to the left (said arc being subtended by a chord bearing North 52°51’24” East, 770.67 feet), 804.09 feet to a point; thence North 24°03’44” East, 408.52 feet to a point; thence along the arc of a curve having a radius of 522.96 feet to the right (said arc being subtended by a chord bearing North 34°00’48” East, 180.75 feet), 181.66 feet to an iron pin set; thence leaving the southeast side of Relocated Greers Chapel Road South 41°39’25” East, 842.19 feet to an iron pin set; thence North 89°26’24” West, 290.00 feet to a 3/4 inch iron pin found on the line common to Land Lots 791 and 792; thence along the line common to Land Lots 791 and 792 South 00°04’52” West, 683.15 feet to the POINT OF BEGINNING, said tract of land containing 45.637 acres as shown on that Boundary Survey for Sterling Highlands Development Partners, Ltd., First American Title Insurance Company and First Union National Bank of Georgia dated September 30, 1987, last revised March 25, 1988, prepared by Hill-Fister Engineers, Inc., Randy Lemon Tibbitts, GRLS No. 2137.

TRACT II

All that tract of Land in Land Lot 793 of the 16th District, 2nd Section, and Land Lot 210 of the 20th District, 2nd Section of Cobb County, Georgia, described as follows:

TO FIND THE POINT OF BEGINNING, begin at a one inch iron pin set at the point common to Land Lots 792, 793, 794 and 791 of said 16th District; run thence North 88°56’07” West along the south line of Land Lot 792, 671.50 feet to a one inch iron pin found; thence leaving the south line of Land Lot 792 South 01°23’24” West, 495.17 feet to the POINT OF BEGINNING; from the POINT OF BEGINNING as thus established run thence South 01°23’24” West, a distance of 847.43 feet to a one inch iron pin found on the south line of Land Lot 793 of said 16th District; thence along the south line of Land Lot 793 North 87°56’59” West, 648.62 feet to a piece of drill

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steel found at the southwest corner of Land Lot 793; thence leaving the south line of Land Lot 793 North 87°45’44” West, a distance of 362.90 feet to a 1/2 inch iron pin found; thence North 30°02’13” West, 394.20 feet to a 1/2 inch iron pin found; thence North 40°19’42” West, 94.40 feet to an iron pin set; thence North 44°12’09” West, 178.63 feet to an iron pin set; thence North 38°39’47” West, 80.81 feet to an iron pin set; thence North 22°08’08” West, 113.57 feet to an iron pin set at the east side of Greers Chapel Road (being a 50 foot right-of-way); thence leaving the east side of Greers Chapel Road North 86°11’49” East, a distance of 1,510.95 feet to the POINT OF BEGINNING, said tract of land containing 22.577 acres as shown on that Boundary Survey for Sterling Highlands Development Partners, Ltd., First American Title Insurance Company and First Union National Bank of Georgia dated September 30, 1987, last revised March 25, 1988, prepared by Hill-Fister Engineers, Inc., Randy Lemon Tibbitts, GRLS No. 2137.

LESS AND EXCEPT THE PROPERTY DESCRIBED IN THE RIGHT OF WAY DEED FROM CARLYLE CENTENNIAL CREST AT BARRETT LAKES, L.P. TO COBB COUNTY DEPARTMENT OF TRANSPORTATION, DATED JULY 28, 2008 AND RECORDED OCTOBER 13, 2008 IN DEED BOOK 14642, PAGE 6451 COBB COUNTY RECORDS.

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EXHIBIT B

MODIFICATIONS TO MULTIFAMILY LOAN AND SECURITY AGREEMENT

1.    Section 5.09(a) is revised to read as follows:

(a) Borrower, any commercial tenant of the Mortgaged Property and/or any operatorproperty manager of the Mortgaged Propertyand, to the best of Borrower’s knowledge after due inquiry and investigation, any commercial tenant of the Mortgaged Property, is in possession of all material licenses, permits and authorizations required for use of the Mortgaged Property, which are valid and in full force and effect as of the date of this Loan Agreement.

2.    Section 6.04(a) is revised to read as follows:

(a) Prohibited New Non-Residential Leases or Modified Non-Residential Leases. Except as set forth in Section 6.04(b), Borrower will not enter into any New Non-Residential Lease, enter into any Modified Non-Residential Lease or terminate any Non-Residential Lease (including any Non-Residential Lease in existence on the date of this Loan Agreement) without the prior written consent of Lender, except Borrower may terminate any Non-Residential Lease (including any Non-Residential Lease in existence on the date of this Loan Agreement) as a result of a default thereunder that continues after any applicable notice or cure period without the prior written consent of Lender, provided that Borrower gives Lender written notice within ten (10) days of such termination.

3. The lead-in clause of Section 6.04(d) is revised to read as follows:

(d) Subordination and Attornment Requirements. All Non-Residential Leases, regardless of whether Lender’s consent or approval is required, will specifically include the following provisionsunless otherwise agreed to by Lender:

4.    Section 6.06(a) is revised to read as follows:

(a) Right of Entry. Borrower will permit Lender, its agents, representatives and designees and any interested Governmental Authority to make or cause to be made entries upon and inspections of the Mortgaged Property to inspect, among other things: (i) Repairs, (ii) Capital Replacements, in process and upon completion, and (iii) Improvements (including environmental inspections and tests performed by professional inspection engineers) during normal business hours, or at any other reasonable time, upon reasonable Notice to Borrower if the inspection is to include occupied residential units(which Notice need not be in writing). During normal business hours, or at any other reasonable time, upon reasonable Notice to Borrower,Borrower will also permit Lender to examine all books and records and contracts and bills pertaining to the foregoing. Notice to Borrower will not be required in the case of an emergency, as determined in Lender’s Discretion, or when an Event of Default has occurred and is continuing.

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5.    Section 6.07(c)(ii) is revised to read as follows:

(ii) Upon Lender’s request in Lender’s sole and absolute discretion prior to a Securitization, and thereafter upon Lender’s request in Lender’s Discretion, a statement that identifies all owners of any interest in Borrower and any Designated Entity for Transfers and the interest held by each (unless Borrower or any Designated Entity for Transfers is a publicly-tradedheld entity in which case such statement of ownership will not be required), and if Borrower or a Designated Entity for Transfers is a corporation then all officers and directors of Borrower and the Designated Entity for Transfers, and if Borrower or a Designated Entity for Transfers is a limited liability company then all Managers who are not members, in each case within 10 days after such request.

6.    Section 6.08(b) is revised to read as follows:

(b) Payment of Operating Expenses. Subject to the provisions of Section 6.08(c), Borrower will (i) pay the expenses of operating, managing, maintaining and repairing the Mortgaged Property (including utilities, Repairs and Capital Replacements)(an “Operating Expense”) before the last date upon which each such payment may be made without any penalty or interest charge being added; provided, however, Borrower, at its own expense, may contest by appropriate legal proceedings, conducted diligently and in good faith, the amount or validity of any Operating Expense, if (A) Borrower notifies Lender of the commencement or expected commencement of such proceedings, (B) the Mortgaged Property is not in danger of being sold or forfeited, (C) Borrower has demonstrated to Lender’s reasonable satisfaction that any delay in paying the Operating Expense will not result in (1) damage to the Mortgaged Property, (2) a depreciation of the Mortgaged Property as determined by Lender in Lender’s Discretion, or (3) otherwise impair Lender’s interest under the Loan Documents, (D) if Borrower has not already paid the Operating Expense, Borrower deposits with Lender reserves sufficient to pay the contested Operating Expense, if requested by Lender, and (E) Borrower furnishes whatever additional security is required in the proceedings or is reasonably requested by Lender, which may include the delivery to Lender of reserves established by Borrower to pay the contested Operating Expense, and (ii) pay Insurance premiums at least 30 days prior to the expiration date of each policy of Insurance, unless applicable law specifies some lesser period.

7.    Section 6.10(m) is revised to read as follows:

(m) Lender’s Succession to Insurance Policies. If the Mortgaged Property is sold at a foreclosure sale or Lender acquires title to the Mortgaged Property, Lender will automatically succeed to all rights of Borrower in and to any Insurance policies(other than blanket Insurance policies) and unearned Insurance premiums(other than blanket Insurance policies) and in and to the proceeds resulting from any damage to the Mortgaged Property prior to such sale or acquisition.

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8.    Section 6.13(a)(xviii) is revised to read as follows:

(xviii) It will maintain adequate capital for the normal obligations reasonably foreseeable in a business of its size and character and in light of its contemplated business operations and will pay its debts and liabilities from its own assets as the same become due; provided, however, that the foregoing shall not require any Person (including any Guarantor) to make additional capital contributions or loans to such entity.

9.    Section 7.03(c) is revised to read as follows:

(c) Publicly-Held Fund or Publicly-Held Real Estate Investment Trust. If a Designated Entity for Transfers is a publicly-held corporation,fund or a publicly-held real estate investment trust, either of the following:

(i) The public issuance of common stock, convertible debt, equity or other similar securities (“Public Fund/REIT Securities”) and the subsequent Transfer of such Public Fund/REIT Securities.

(ii) The acquisition by a single Public Fund/REIT Securities holder of an ownership percentage of 10% or more in the Designated Entity for Transfers, if Borrower provides notice of that acquisition to Lender within 30 days following the acquisition.

10.    Section 11.03 is revised by adding the following new subpart (e):

(e) Lender will endeavor to give to the individuals or entities listed below (“Courtesy Notice Parties”) courtesy copies of any Notice given to Borrower or any Guarantor by Lender, at the addresses set forth below; provided, however, failure to provide such courtesy copies of Notices will not affect the validity or sufficiency of any notice to Borrower or any Guarantor, will not affect Lender’s rights and remedies hereunder or under any other Loan Documents, and will not subject Lender to any claims by or liability to Borrower, any of the Courtesy Notice Parties, or any other individual or entity.

Steadfast Companies

105 Oronoco Street, Suite 312

Alexandria, Virginia 22314

Attention:  Ginger Davis, Associate General Counsel

Morris, Manning & Martin, LLP

3343 Peachtree Road NE

Suite 1600

Atlanta, Georgia 30342

Attention: Christina Graham, Partner

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11. The definition of “Minimum DSCR” in Article XII of the Multifamily Loan and Security Agreement must be deleted and replaced with the following:

“Minimum DSCR” means, with respect to a Supplemental Loan, (i) if the Senior Indebtedness bears interest at a fixed rate, 1.25:1, or (ii) if the Senior Indebtedness bears interest at an adjustable rate, 1.10:1.

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EXHIBIT C

REPAIR SCHEDULE OF WORK

Description of Repair	Cost	Completion Date (Days after Origination)
Repair Sidewalk Cracks	$3,600	180
Install Accessible Parking Stall	$300	180
Repair Asphalt Pavement Cracks	$1,500	180
Replace Settled Pavement and Inlet Lid	$2,700	180

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EXHIBIT D

REPAIR DISBURSEMENT REQUEST

The undersigned requests from (“Lender”) the disbursement of funds in the amount of $_________________ (“Disbursement Request”) from the Repair Reserve Fund established pursuant to the Multifamily Loan and Security Agreement dated , 20 by and between Lender and the undersigned ( “Loan Agreement”) to pay for repairs to the multifamily apartment project known as and located in .

The undersigned represents and warrants to Lender that the following information and certifications provided in connection with this Disbursement Request are true and correct as of the date hereof:

1. Purpose for which disbursement is requested:

2. To whom the disbursement will be made (may be the undersigned in the case of reimbursement for advances and payments made or cost incurred for work done by the undersigned):    

3. Estimated costs of completing the uncompleted Repairs as of the date of this Disbursement Request:

4. The undersigned certifies that each of the following is true:

(a)    The disbursement requested pursuant to this Disbursement Request will be used solely to pay a cost or costs allowable under the Loan Agreement.

(b)    None of the items for which disbursement is requested pursuant to this Disbursement Request has formed the basis for any disbursement previously made from the Repair Reserve Fund.

(c)    All labor and materials for which disbursements have been requested have been incorporated into the Improvements or suitably stored upon the Mortgaged Property in accordance with reasonable and standard building practices, the Loan Agreement and all applicable laws, ordinances, rules and regulations of any governmental authority having jurisdiction over the Mortgaged Property.

(d)    The materials, supplies and equipment furnished or installed for the Repairs are not subject to any Lien or security interest or that the funds to be disbursed

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pursuant to this Disbursement Request are to be used to satisfy any such Lien or security interest.

5. All capitalized terms used in this Disbursement Request without definition will have the meanings ascribed to them in the Loan Agreement.

IN WITNESS WHEREOF, the undersigned has executed this Disbursement Request as of the day and date first above written.

BORROWER:

Date:    

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EXHIBIT E

WORK COMMENCED AT MORTGAGED PROPERTY

NONE

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EXHIBIT F

CAPITAL REPLACEMENTS

• Carpet/vinyl flooring

• Window treatments

• Roofs

• Furnaces/boilers

• Air conditioners

• Ovens/ranges

• Refrigerators

• Dishwashers

• Water heaters

• Garbage disposals

• Asphaltic Concrete

• Pool and/or spa plaster/liner

• Recreation/Play area and equipment

• Exterior Walls (paint/finish)

• Recaulking Exterior Facades

• Hot and cold water distribution

• Kitchen countertops and sinks

• Other items that Lender may approve subject to any conditions that Lender may require, all in Lender’s sole and absolute discretion.

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EXHIBIT G

DESCRIPTION OF GROUND LEASE

N/A

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EXHIBIT H

ORGANIZATIONAL CHART OF BORROWER AS OF THE CLOSING DATE

Multifamily Loan and Security Agreement Page H-1

EXHIBIT I

DESIGNATED ENTITIES FOR TRANSFERS AND GUARANTOR(S)

Designated Entities for Transfers

• Steadfast Apartment REIT Operating Partnership, L.P.

• Steadfast Apartment Advisor, LLC

Guarantor(s)

• Steadfast Apartment REIT, Inc.

Multifamily Loan and Security Agreement Page I-1

EX-10.7

EXHIBIT 10.7

Melissa A. Johnson, Esq.

Krooth & Altman LLP

1850 M Street, NW, Suite 400

Washington, DC 20036

Freddie Mac Loan Number: 708218687

MULTIFAMILY DEED TO SECURE DEBT,

ASSIGNMENT OF RENTS

AND SECURITY AGREEMENT

GEORGIA

(Revised 3-1-2014)

MULTIFAMILY DEED TO SECURE DEBT,

ASSIGNMENT OF RENTS

AND SECURITY AGREEMENT

GEORGIA

(Revised 3-1-2014)

THIS MULTIFAMILY DEED TO SECURE DEBT, ASSIGNMENT OF RENTS AND SECURITY AGREEMENT (“Instrument”) is made to be effective as of the 20^th day of November, 2014, between STAR BARRETT LAKES, LLC, a limited liability company organized and existing under the laws of Delaware, whose address is 18100 Von Karman Avenue, Suite 500, Irvine, California 92612, as grantor (“Borrower”), and BERKELEY POINT CAPITAL LLC,a limited liability company organized and existing under the laws of Delaware, whose address is 4550 Montgomery Avenue, Suite 1100, Bethesda, Maryland 20814, as grantee (“Lender”). Borrower’s organizational identification number, if applicable, is 5608101.

RECITAL

Borrower is indebted to Lender in the principal amount of $34,300,000, as evidenced by Borrower’s Multifamily Note payable to Lender, dated as of the date of this Instrument, and maturing on December 1, 2021 (“Maturity Date”).

AGREEMENT

TO SECURE TO LENDER the repayment of the Indebtedness, and all renewals, extensions and modifications of the Indebtedness, and the performance of the covenants and agreements of Borrower contained in the Loan Documents, Borrower grants, conveys and assigns to Lender and Lender’s successors and assigns, with power of sale, the Mortgaged Property, including the Land located in Cobb County, State of Georgia and described in Exhibit A attached to this Instrument. To have and to hold the Mortgaged Property unto Lender and Lender’s successors and assigns forever. As used in this Instrument, the term “Mortgaged Property” is synonymous with the term “Secured Property,” and the term “Lien” is synonymous with the term “security interest and title.”

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

Georgia        

Multifamily Deed to Secure Debt, Assignment of Rents

and Security Agreement

UNIFORM COVENANTS

(Revised 7-17-2014)

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

1. Definitions. The following terms, when used in this Instrument (including when used in the above recitals), will have the following meanings and any capitalized term not specifically defined in this Instrument will have the meaning ascribed to that term in the Loan Agreement:

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

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

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

“Event of Default” means the occurrence of any event described in Section 8.

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

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

“Ground Lease” means the lease described in the Loan Agreement pursuant to which Borrower leases the Land, as such lease may from time to time be amended, modified, supplemented, renewed and extended.

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

“Indebtedness” means the principal of, interest at the fixed or variable rate set forth in the Note on, and all other amounts due at any time under, the Note, this Instrument or any other Loan Document, including prepayment premiums, late charges, default interest, and advances as provided in Section 7 to protect the security of this Instrument.

“Land” means the landdescribed in Exhibit A.

“Leasehold Estate” means Borrower’s interest in the Land and any other real property leased by Borrower pursuant to the Ground Lease, if applicable, including all of the following:

(a) All rights of Borrower to renew or extend the term of the Ground Lease.

(b) All amounts deposited by Borrower with Ground Lessor under the Ground Lease.

(c) Borrower’s right or privilege to terminate, cancel, surrender, modify or amend the Ground Lease.

(d) All other options, privileges and rights granted and demised to Borrower under the Ground Lease and all appurtenances with respect to the Ground Lease.

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

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

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“Loan Agreement” means the Multifamily Loan and Security Agreement executed by Borrower in favor of Lender and dated as of the date of this Instrument, as such agreement may be amended from time to time.

“Loan Documents” means the Note, this Instrument, the Loan Agreement, all guaranties, all indemnity agreements, all collateral agreements, UCC filings, O&M Programs, the MMP and any other documents now or in the future executed by Borrower, any guarantor or any other Person in connection with the loan evidenced by the Note, as such documents may be amended from time to time.

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

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

(a) The Land, or, if Borrower’s interest in the Land is pursuant to a Ground Lease, the Ground Lease and the Leasehold Estate.

(b) The Improvements.

(c) The Fixtures.

(d) The Personalty.

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

(f) All proceeds paid or to be paid by any insurer of the Land, the Improvements, the Fixtures, the Personalty or any other part of the Mortgaged Property, whether or not Borrower obtained the insurance pursuant to Lender’s requirement.

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

(h) All contracts, options and other agreements for the sale of the Land, or the Leasehold Estate, as applicable, the Improvements, the Fixtures, the Personalty or any other part of the Mortgaged Property entered into by Borrower now or in the future, including cash or securities deposited to secure performance by parties of their obligations.

(i) All proceeds from the conversion, voluntary or involuntary, of any of the items described in subsections (a) through (h) inclusive into cash or liquidated claims, and the right to collect such proceeds.

(j) All Rents and Leases.

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

(l) All Imposition Reserve Deposits.

(m) All refunds or rebates of Impositions by Governmental Authority or insurance company (other than refunds applicable to periods before the real property tax year in which this Instrument is dated).

(n) All tenant security deposits which have not been forfeited by any tenant under any Lease and any bond or other security in lieu of such deposits.

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

(p) If required by the terms of Section 4.05 of the Loan Agreement, all rights under the Letter of Credit and the Proceeds, as such Proceeds may increase or decrease from time to time.

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(q) If the Note provides for interest to accrue at a floating or variable rate and there is a Cap Agreement, the Cap Collateral.

“Note” means the Multifamily Note (including any Amended and Restated Note, Consolidated, Amended and Restated Note, or Extended and Restated Note) executed by Borrower in favor of Lender and dated as of the date of this Instrument, including all schedules, riders, allonges and addenda, as such Multifamily Note may be amended, modified and/or restated from time to time.

“Notice” or “Notices” means all notices, demands and other communication required under the Loan Documents, provided in accordance with the requirements of Section 11.03 of the Loan Agreement.

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

“Personalty” means all of the following:

(a) Accounts (including deposit accounts) of Borrower related to the Mortgaged Property.

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

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

(d) Any operating agreements relating to the Land or the Improvements.

(e) Any surveys, plans and specifications and contracts for architectural, engineering and construction services relating to the Land or the Improvements.

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

(g) Any rights of Borrower in or under letters of credit.

“Property Jurisdiction” means the jurisdiction in which the Land is located.

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

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

2. Uniform Commercial Code Security Agreement.

(a) This Instrument is also a security agreement under the Uniform Commercial Code for any of the Mortgaged Property which, under applicable law, may be subjected to a security interest under the Uniform Commercial Code, for the purpose of securing Borrower’s obligations under this Instrument and to further secure Borrower’s obligations under the Note, this Instrument and other Loan Documents, whether such Mortgaged Property is owned now or acquired in the future, and all products and cash and non-cash proceeds thereof (collectively, “UCC Collateral”), and by this Instrument, Borrower grants to Lender a security interest in the UCC Collateral. To the extent necessary under applicable law, Borrower hereby authorizes Lender to prepare and file financing statements, continuation statements and financing statement amendments in such form as Lender may require to perfect or continue the perfection of this security interest.

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(b) Unless Borrower gives Notice to Lender within 30 days after the occurrence of any of the following, and executes and delivers to Lender modifications or supplements of this Instrument (and any financing statement which may be filed in connection with this Instrument) as Lender may require, Borrower will not (i) change its name, identity, structure or jurisdiction of organization; (ii) change the location of its place of business (or chief executive office if more than one place of business); or (iii) add to or change any location at which any of the Mortgaged Property is stored, held or located.

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

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

3. Assignment of Rents; Appointment of Receiver; Lender in Possession.

(a) As part of the consideration for the Indebtedness, Borrower absolutely and unconditionally assigns and transfers to Lender all Rents.

(i) It is the intention of Borrower to establish a present, absolute and irrevocable transfer and assignment to Lender of all Rents and to authorize and empower Lender to collect and receive all Rents without the necessity of further action on the part of Borrower.

(ii) Promptly upon request by Lender, Borrower agrees to execute and deliver such further assignments as Lender may from time to time require. Borrower and Lender intend this assignment of Rents to be immediately effective and to constitute an absolute present assignment and not an assignment for additional security only.

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(iii) For purposes of giving effect to this absolute assignment of Rents, and for no other purpose, Rents will not be deemed to be a part of the Mortgaged Property. However, if this present, absolute and unconditional assignment of Rents is not enforceable by its terms under the laws of the Property Jurisdiction, then the Rents will be included as a part of the Mortgaged Property and it is the intention of Borrower that in this circumstance this Instrument create and perfect a Lien on Rents in favor of Lender, which Lien will be effective as of the date of this Instrument.

(b) (i)    Until the occurrence of an Event of Default, Lender hereby grants to Borrower a revocable license to collect and receive all Rents, to hold all Rents in trust for the benefit of Lender and to apply all Rents to pay the installments of interest and principal then due and payable under the Note and the other amounts then due and payable under the other Loan Documents, including Imposition Reserve Deposits, and to pay the current costs and expenses of managing, operating and maintaining the Mortgaged Property, including utilities, Taxes and insurance premiums (to the extent not included in Imposition Reserve Deposits), tenant improvements and other capital expenditures.

(ii) So long as no Event of Default has occurred and is continuing, the Rents remaining after application pursuant to the preceding sentence may be retained by Borrower free and clear of, and released from, Lender’s rights with respect to Rents under this Instrument.

(iii) After the occurrence of an Event of Default, and during the continuance of such Event of Default, Borrower authorizes Lender to collect, sue for and compromise Rents and directs each tenant of the Mortgaged Property to pay all Rents to, or as directed by, Lender. From and after the occurrence of an Event of Default, and during the continuance of such Event of Default, and without the necessity of Lender entering upon and taking and maintaining control of the Mortgaged Property directly, or by a receiver, Borrower’s license to collect Rents will automatically terminate and Lender will without Notice be entitled to all Rents as they become due and payable, including Rents then due and unpaid. Borrower will pay to Lender upon demand all Rents to which Lender is entitled.

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

(c) If an Event of Default has occurred and is continuing, then Lender will have each of the following rights and may take any of the following actions:

(i) Lender may, regardless of the adequacy of Lender’s security or the solvency of Borrower and even in the absence of waste, enter upon and take and maintain full control of the Mortgaged Property in order to perform all acts that Lender in its discretion determines to be necessary or desirable for the operation and maintenance of the Mortgaged Property, including the execution, cancellation or modification of Leases, the collection of all Rents, the making of Repairs to the Mortgaged Property and the execution or termination of contracts providing for the management, operation or maintenance of the Mortgaged Property, for the purposes of enforcing the assignment of Rents pursuant to Section 3(a), protecting the Mortgaged Property or the security of this Instrument, or for such other purposes as Lender in its discretion may deem necessary or desirable.

(ii) Alternatively, if an Event of Default has occurred and is continuing, regardless of the adequacy of Lender’s security, without regard to Borrower’s solvency and without the necessity of giving prior notice (oral or written) to Borrower, Lender may apply to any court having jurisdiction for the appointment of a receiver for the Mortgaged Property to take any or all of the actions set forth in the preceding sentence. If Lender elects to seek the appointment of a receiver for the Mortgaged Property at any time after an Event of Default has occurred and is continuing, Borrower, by its execution of this Instrument, expressly consents to the appointment of such receiver, including the appointment of a receiver ex parte if permitted by applicable law.

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(iii) If Borrower is a housing cooperative corporation or association, Borrower hereby agrees that if a receiver is appointed, the order appointing the receiver may contain a provision requiring the receiver to pay the installments of interest and principal then due and payable under the Note and the other amounts then due and payable under the other Loan Documents, including Imposition Reserve Deposits, it being acknowledged and agreed that the Indebtedness is an obligation of Borrower and must be paid out of maintenance charges payable by Borrower’s tenant shareholders under their proprietary leases or occupancy agreements.

(iv) Lender or the receiver, as the case may be, will be entitled to receive a reasonable fee for managing the Mortgaged Property.

(v) Immediately upon appointment of a receiver or immediately upon Lender’s entering upon and taking possession and control of the Mortgaged Property, Borrower will surrender possession of the Mortgaged Property to Lender or the receiver, as the case may be, and will deliver to Lender or the receiver, as the case may be, all documents, records (including records on electronic or magnetic media), accounts, surveys, plans, and specifications relating to the Mortgaged Property and all security deposits and prepaid Rents.

(vi) If Lender takes possession and control of the Mortgaged Property, then Lender may exclude Borrower and its representatives from the Mortgaged Property.

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

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

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(e) If the Rents are not sufficient to meet the costs of taking control of and managing the Mortgaged Property and collecting the Rents, any funds expended by Lender for such purposes will become an additional part of the Indebtedness as provided in Section 7.

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

4. Assignment of Leases; Leases Affecting the Mortgaged Property.

(a) As part of the consideration for the Indebtedness, Borrower absolutely and unconditionally assigns and transfers to Lender all of Borrower’s right, title and interest in, to and under the Leases, including Borrower’s right, power and authority to modify the terms of any such Lease, or extend or terminate any such Lease.

(i) It is the intention of Borrower to establish a present, absolute and irrevocable transfer and assignment to Lender of all of Borrower’s right, title and interest in, to and under the Leases. Borrower and Lender intend this assignment of the Leases to be immediately effective and to constitute an absolute present assignment and not an assignment for additional security only.

(ii) For purposes of giving effect to this absolute assignment of the Leases, and for no other purpose, the Leases will not be deemed to be a part of the Mortgaged Property.

(iii) However, if this present, absolute and unconditional assignment of the Leases is not enforceable by its terms under the laws of the Property Jurisdiction, then the Leases will be included as a part of the Mortgaged Property and it is the intention of Borrower that in this circumstance this Instrument create and perfect a Lien on the Leases in favor of Lender, which Lien will be effective as of the date of this Instrument.

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

(c) (i)    Borrower acknowledges and agrees that the exercise by Lender, either     directly or by a receiver, of any of the rights conferred under this Section 4         will not be construed to make Lender a mortgagee-in-possession of the     Mortgaged Property so long as Lender has not itself entered into actual     possession of the Land and the Improvements.

(ii) The acceptance by Lender of the assignment of the Leases pursuant to Section 4(a) will not at any time or in any event obligate Lender to take any action under this Instrument or to expend any money or to incur any expenses.

(iii) Except to the extent of Lender’s gross negligence or willful misconduct, Lender will not be liable in any way for any injury or damage to person or property sustained by any Person or Persons in or about the Mortgaged Property.

(iv) Prior to Lender’s actual entry into and taking possession of the Mortgaged Property, Lender will not be obligated for any of the following:

(A)  Lender will not be obligated to perform any of the terms, covenants and conditions contained in any Lease (or otherwise have any obligation with respect to any Lease).

(B)  Lender will not be obligated to appear in or defend any action or proceeding relating to the Lease or the Mortgaged Property.

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(C)  Lender will not be responsible for the operation, control, care, management or repair of the Mortgaged Property or any portion of the Mortgaged Property. The execution of this Instrument by Borrower will constitute conclusive evidence that all responsibility for the operation, control, care, management and repair of the Mortgaged Property is and will be that of Borrower, prior to such actual entry and taking of possession.

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

(e) Borrower will, promptly upon Lender’s request, deliver to Lender an executed copy of each residential Lease then in effect.

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

(i) Borrower may execute leases of apartments for a term in excess of 2 years to a tenant shareholder of Borrower, so long as such leases, including proprietary leases, are and will remain subordinate to the Lien of this Instrument.

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

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5. Prepayment Premium. Borrower will be required to pay a prepayment premium in connection with certain prepayments of the Indebtedness, including a payment made after Lender’s exercise of any right of acceleration of the Indebtedness, as provided in the Note.

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

7. Protection of Lender’s Security; Instrument Secures Future Advances.

(a) If Borrower fails to perform any of its obligations under this Instrument or any other Loan Document, or if any action or proceeding is commenced which purports to affect the Mortgaged Property, Lender’s security or Lender’s rights under this Instrument, including eminent domain, insolvency, code enforcement, civil or criminal forfeiture, enforcement of Hazardous Materials Laws, fraudulent conveyance or reorganizations or proceedings involving a bankrupt or decedent, then Lender at Lender’s option may make such appearances, file such documents, disburse such sums and take such actions as Lender reasonably deems necessary to perform such obligations of Borrower and to protect Lender’s interest, including all of the following:

(i) Lender may pay Attorneys’ Fees and Costs.

(ii) Lender may pay fees and out-of-pocket expenses of accountants, inspectors and consultants.

(iii) Lender may enter upon the Mortgaged Property to make Repairs or secure the Mortgaged Property.

(iv) Lender may procure the Insurance required by the Loan Agreement.

(v) Lender may pay any amounts which Borrower has failed to pay under the Loan Agreement.

(vi) Lender may perform any of Borrower’s obligations under the Loan Agreement.

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(vii) Lender may make advances to pay, satisfy or discharge any obligation of Borrower for the payment of money that is secured by a Prior Lien.

(b) Any amounts disbursed by Lender under this Section 7, or under any other provision of this Instrument that treats such disbursement as being made under this Section 7, will be secured by this Instrument, will be added to, and become part of, the principal component of the Indebtedness, will be immediately due and payable and will bear interest from the date of disbursement until paid at the Default Rate.

(c) Nothing in this Section 7 will require Lender to incur any expense or take any action.

8. Events of Default. An Event of Default under the Loan Agreement will constitute an Event of Default under this Instrument.

9. Remedies Cumulative. Each right and remedy provided in this Instrument is distinct from all other rights or remedies under this Instrument, the Loan Agreement or any other Loan Document or afforded by applicable law or equity, and each will be cumulative and may be exercised concurrently, independently or successively, in any order. Lender’s exercise of any particular right or remedy will not in any way prevent Lender from exercising any other right or remedy available to Lender. Lender may exercise any such remedies from time to time and as often as Lender chooses.

10. Waiver of Statute of Limitations, Offsets, and Counterclaims. Borrower waives the right to assert any statute of limitations as a bar to the enforcement of the Lien of this Instrument or to any action brought to enforce any Loan Document. Borrower hereby waives the right to assert a counterclaim, other than a compulsory counterclaim, in any action or proceeding brought against it by Lender or otherwise to offset any obligations to make the payments required by the Loan Documents. No failure by Lender to perform any of its obligations under this Instrument will be a valid defense to, or result in any offset against, any payments that Borrower is obligated to make under any of the Loan Documents.

11. Waiver of Marshalling.

(a) Notwithstanding the existence of any other security interests in the Mortgaged Property held by Lender or by any other party, Lender will have the right to determine the order in which any or all of the Mortgaged Property will be subjected to the remedies provided in this Instrument, the Note, the Loan Agreement or any other Loan Document or applicable law. Lender will have the right to determine the order in which any or all portions of the Indebtedness are satisfied from the proceeds realized upon the exercise of such remedies.

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(b) Borrower and any party who now or in the future acquires a security interest in the Mortgaged Property and who has actual or constructive notice of this Instrument waives any and all right to require the marshalling of assets or to require that any of the Mortgaged Property be sold in the inverse order of alienation or that any of the Mortgaged Property be sold in parcels or as an entirety in connection with the exercise of any of the remedies permitted by applicable law or provided in this Instrument.

12. Further Assurances; Lender’s Expenses.

(a) Borrower will deliver, at its sole cost and expense, all further acts, deeds, conveyances, assignments, estoppel certificates, financing statements or amendments, transfers and assurances as Lender may require from time to time in order to better assure, grant and convey to Lender the rights intended to be granted, now or in the future, to Lender under this Instrument and the Loan Documents or in connection with Lender’s consent rights under Article VII of the Loan Agreement.

(b) Borrower acknowledges and agrees that, in connection with each request by Borrower under this Instrument or any Loan Document, Borrower will pay all reasonable Attorneys’ Fees and Costs and expenses incurred by Lender, including any fees payable in accordance with any request for further assurances or an estoppel certificate pursuant to the Loan Agreement, regardless of whether the matter is approved, denied or withdrawn. Any amounts payable by Borrower under this Instrument or under any other Loan Document will be deemed a part of the Indebtedness, will be secured by this Instrument and will bear interest at the Default Rate if not fully paid within 10 days of written demand for payment.

13. Governing Law; Consent to Jurisdiction and Venue. This Instrument, and any Loan Document which does not itself expressly identify the law that is to apply to it, will be governed by the laws of the Property Jurisdiction. Borrower agrees that any controversy arising under or in relation to the Note, this Instrument or any other Loan Document may be litigated in the Property Jurisdiction. The state and federal courts and authorities with jurisdiction in the Property Jurisdiction will have jurisdiction over all controversies that may arise under or in relation to the Note, any security for the Indebtedness or any other Loan Document. Borrower irrevocably consents to service, jurisdiction and venue of such courts for any such litigation and waives any other venue to which it might be entitled by virtue of domicile, habitual residence or otherwise. However, nothing in this Section 13 is intended to limit Lender’s right to bring any suit, action or proceeding relating to matters under this Instrument in any court of any other jurisdiction.

14. Notice. All Notices, demands and other communications under or concerning this Instrument will be governed by the terms set forth in the Loan Agreement.

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15. Successors and Assigns Bound. This Instrument will bind the respective successors and assigns of Borrower and Lender, and the rights granted by this Instrument will inure to Lender’s successors and assigns.

16. Joint and Several Liability. If more than one Person signs this Instrument as Borrower, the obligations of such Persons will be joint and several.

17. Relationship of Parties; No Third Party Beneficiary.

(a) The relationship between Lender and Borrower will be solely that of creditor and debtor, respectively, and nothing contained in this Instrument will create any other relationship between Lender and Borrower. Nothing contained in this Instrument will constitute Lender as a joint venturer, partner or agent of Borrower, or render Lender liable for any debts, obligations, acts, omissions, representations or contracts of Borrower.

(b) No creditor of any party to this Instrument and no other Person will be a third party beneficiary of this Instrument or any other Loan Document. Without limiting the generality of the preceding sentence, (i) any arrangement (“Servicing Arrangement”) between Lender and any Loan Servicer for loss sharing or interim advancement of funds will constitute a contractual obligation of such Loan Servicer that is independent of the obligation of Borrower for the payment of the Indebtedness, (ii) Borrower will not be a third party beneficiary of any Servicing Arrangement, and (iii) no payment by the Loan Servicer under any Servicing Arrangement will reduce the amount of the Indebtedness.

18. Severability; Amendments.

(a) The invalidity or unenforceability of any provision of this Instrument will not affect the validity or enforceability of any other provision, and all other provisions will remain in full force and effect. This Instrument contains the entire agreement among the parties as to the rights granted and the obligations assumed in this Instrument.

(b) This Instrument may not be amended or modified except by a writing signed by the party against whom enforcement is sought; provided, however, that in the event of a Transfer prohibited by or requiring Lender’s approval under Article VII of the Loan Agreement, some or all of the modifications to the Loan Documents (if any) may be modified or rendered void by Lender at Lender’s option by Notice to Borrower and the transferee(s).

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19. Construction.

(a) The captions and headings of the Sections of this Instrument are for convenience only and will be disregarded in construing this Instrument. Any reference in this Instrument to a “Section” will, unless otherwise explicitly provided, be construed as referring to a Section of this Instrument.

(b) Any reference in this Instrument to a statute or regulation will be construed as referring to that statute or regulation as amended from time to time.

(c) Use of the singular in this Instrument includes the plural and use of the plural includes the singular.

(d) As used in this Instrument, the term “including” means “including, but not limited to” and the term “includes” means “includes without limitation.”

(e) The use of one gender includes the other gender, as the context may require.

(f) Unless the context requires otherwise any definition of or reference to any agreement, instrument or other document in this Instrument will be construed as referring to such agreement, instrument or other document as from time to time amended, supplemented or otherwise modified (subject to any restrictions on such amendments, supplements or modifications set forth in this Instrument).

(g) Any reference in this Instrument to any person will be construed to include such person’s successors and assigns.

20. Subrogation. If, and to the extent that, the proceeds of the loan evidenced by the Note, or subsequent advances under Section 7, are used to pay, satisfy or discharge a Prior Lien, such loan proceeds or advances will be deemed to have been advanced by Lender at Borrower’s request, and Lender will automatically, and without further action on its part, be subrogated to the rights, including Lien priority, of the owner or holder of the obligation secured by the Prior Lien, whether or not the Prior Lien is released.

END OF UNIFORM COVENANTS; STATE-SPECIFIC PROVISIONS FOLLOW

21-30.     Reserved.

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31. Acceleration; Remedies.

(a) At any time during the existence of an Event of Default, Lender, at Lender’s option, may declare the Indebtedness to be immediately due and payable without further demand, and may invoke the power of sale granted in this Instrument (and Borrower appoints Lender as Borrower’s agent and attorney-in-fact to exercise such power of sale in the name and on behalf of Borrower) and any other remedies permitted by Georgia law or provided in this Instrument or in any other Loan Document. Borrower acknowledges that the power of sale granted in this Instrument may be exercised by Lender without prior judicial hearing. Lender will be entitled to collect all costs and expenses incurred in pursuing such remedies, including reasonable Attorneys’ Fees and Costs and costs of documentary evidence, abstracts and title reports.

(b) Lender may sell and dispose of the Mortgaged Property at public auction, at the usual place for conducting sales at the courthouse in the county where all or any part of the Mortgaged Property is located, to the highest bidder for cash, first advertising the time, terms and place of such sale by publishing a notice of sale once a week for four consecutive weeks (without regard to the actual number of days) in a newspaper in which sheriff’s advertisements are published in such county, all other notice being waived by Borrower; and Lender may thereupon execute and deliver to the purchaser a sufficient instrument of conveyance of the Mortgaged Property in fee simple, which may contain recitals as to the happening of the default upon which the execution of the power of sale granted by this Section depends. The recitals in the instrument of conveyance will be presumptive evidence that Lender duly complied with all preliminary acts prerequisite to the sale and instrument of conveyance. Borrower constitutes and appoints Lender as Borrower’s agent and attorney-in-fact to make such recitals, sale and conveyance. Borrower ratifies all of Lender’s acts, as such attorney-in-fact, and Borrower agrees that such recitals will be binding and conclusive upon Borrower and that the conveyance to be made by Lender (and in the event of a deed in lieu of foreclosure, then as to such conveyance) will be effectual to bar all right, title and interest, equity of redemption, including all statutory redemption, homestead, dower, curtsey and all other exemptions of Borrower, or its successors in interest, in and to the Mortgaged Property.

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(c) The Mortgaged Property may be sold in one parcel and as an entirety, or in such parcels, manner or order as Lender, in its discretion, may elect, and one or more exercises of the powers granted in this Section will not extinguish or exhaust the power unless the entire Mortgaged Property is sold or the Indebtedness is paid in full, and Lender will collect the proceeds of such sale, applying such proceeds as provided in this Section. In the event of a deficiency, Borrower will immediately on demand from Lender pay such deficiency to Lender, subject to the provisions of the Note limiting Borrower’s personal liability for payment of the Indebtedness. Borrower acknowledges that Lender may bid for and purchase the Mortgaged Property at any foreclosure sale and will be entitled to apply all or any part of the Indebtedness as a credit to the purchase price. Borrower covenants and agrees that Lender will apply the proceeds of the sale in the following order: (i) to all reasonable costs and expenses of the sale, including reasonable Attorneys’ Fees and Costs and costs of title evidence; (ii) to the Indebtedness in such order as Lender, in Lender’s discretion, directs; and (iii) the excess, if any, to the person or persons legally entitled to the excess. The power and agency granted in this Section 31 are coupled with an interest, are irrevocable by death or otherwise and are in addition to the remedies for collection of the Indebtedness as provided by law.

(d) If the Mortgaged Property is sold pursuant to this Section 31, Borrower, or any person holding possession of the Mortgaged Property through Borrower, will surrender possession of the Mortgaged Property to the purchaser at such sale on demand. If possession is not surrendered on demand, Borrower or such person will be a tenant holding over and may be dispossessed in accordance with Georgia law.

32. Release. Upon payment of the Indebtedness, Lender will cancel this Instrument. Borrower will pay Lender’s reasonable costs incurred in canceling this Instrument.

33. Borrower’s Waiver Of Certain Rights. To the fullest extent permitted by law, Borrower agrees that Borrower will not at any time insist upon, plead, claim or take the benefit or advantage of any present or future law providing for any appraisement, valuation, stay, extension or redemption, homestead, moratorium, reinstatement, marshalling or forbearance, and Borrower, for Borrower, Borrower’s heirs, devisees, representatives, successors and assigns, and for any and all persons ever claiming any interest in the Mortgaged Property, to the fullest extent permitted by law, waives and releases all rights of redemption, valuation, appraisement, stay of execution, reinstatement (including all rights under O.C.G.A. Section 44-14-85), notice of intention to mature or declare due the whole of the Indebtedness, and all rights to a marshalling of assets of Borrower, including the Mortgaged Property.

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34. Deed To Secure Debt. This conveyance is to be construed under the existing laws of the State of Georgia as a deed passing title, and not as a mortgage, and is intended to secure the payment of the Indebtedness.

35. Assumption Not a Novation. Lender’s acceptance of an assumption of the obligations of this Instrument and the Note, and the release of Borrower pursuant to Article VII of the Loan Agreement or otherwise, will not constitute a novation and will not affect the priority of the Lien created by this Instrument.

36. WAIVER OF TRIAL BY JURY.

(a) BORROWER AND LENDER EACH COVENANTS AND AGREES NOT TO ELECT A TRIAL BY JURY WITH RESPECT TO ANY ISSUE ARISING OUT OF THIS INSTRUMENT OR THE RELATIONSHIP BETWEEN THE PARTIES AS BORROWER AND LENDER THAT IS TRIABLE OF RIGHT BY A JURY.

(b) BORROWER AND LENDER EACH WAIVES ANY RIGHT TO TRIAL BY JURY WITH RESPECT TO SUCH ISSUE TO THE EXTENT THAT ANY SUCH RIGHT EXISTS NOW OR IN THE FUTURE. THIS WAIVER OF RIGHT TO TRIAL BY JURY IS SEPARATELY GIVEN BY EACH PARTY, KNOWINGLY AND VOLUNTARILY WITH THE BENEFIT OF COMPETENT LEGAL COUNSEL.

37. Incorporation of Riders. The following Riders are attached to this Instrument:

• Rider to the Multifamily Security Instrument – Trade Names

38. Attached Exhibits. The following Exhibits, if marked with an “X” in the space provided, are attached to this Instrument:

|X|    Exhibit A    Description of the Land (required)

||    Exhibit B    Modifications to Instrument

||    Exhibit C    Ground Lease Description (if applicable)

REMAINDER OF PAGE INTENTIONALLY LEFT BLANK

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IN WITNESS WHEREOF, Borrower has signed and delivered this Instrument or has caused this Instrument to be signed and delivered by its duly authorized representative.

	BORROWER:
	STAR BARRETT LAKES, LLC
	a Delaware limited liability company
	By:	STEADFAST APARTMENT ADVISOR, LLC
		a Delaware limited liability company
		Non-Member Manager
		By:	/s/ Kevin J. Keating	(SEAL)
		Name:	Kevin J. Keating
		Title:	Treasurer

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RIDER TO MULTIFAMILY SECURITY INSTRUMENT

TRADE NAMES

(Revised 3-1-2014)

The following changes are made to the Instrument which precedes this Rider:

A. Subsection (o) of the definition of Mortgaged Property in Section 1 is restated as follows:

(o) All names under or by which any of the above Mortgaged Property may be operated or known, and all trademarks, trade names, and goodwill relating to any of the Mortgaged Property; provided however, that the names “STAR,” and “Steadfast” and/or associated trademark rights are not assigned to Lender, subject to Section 6.30 of the Loan Agreement.

Rider to Georgia        

Multifamily Deed to Secure Debt, Assignment of Rents

and Security Agreement

Trade Names

EXHIBIT A

DESCRIPTION OF THE LAND

ALL THAT TRACT OR PARCEL OF LAND LYING AND BEING IN LAND LOTS 791, 792 AND 793 OF THE 16TH DISTRICT, 2ND SECTION AND LAND LOT 210 OF THE 20TH DISTRICT, 2ND SECTION, OF COBB COUNTY, GEORGIA, AND BEING MORE PARTICULARLY DESCRIBED AS FOLLOWS:

BEGINNING AT AN IRON PIN FOUND (1/2” REBAR) MARKING THE COMMON CORNER OF LAND LOTS 791, 792, 793 AND 794 OF THE 16TH DISTRICT, 2ND SECTION OF COBB COUNTY; THENCE ALONG THE SOUTH LINE OF LAND LOT 792 (SAID LINE BEING COMMON TO LAND LOTS 792 AND 793), SOUTH 89°47‘27“ WEST FOR A DISTANCE OF 669.80 FEET TO AN IRON PIN FOUND (1-1/2” CRIMPED TOP PIPE); THENCE DEPARTING SAID SOUTH LINE OF LAND LOT 792 AND PROCEED SOUTH 00°14‘00“ WEST FOR A DISTANCE OF 495.17 FEET TO AN IRON PIN PLACED (1/2” REBAR); THENCE SOUTH 00° 14‘00“ WEST FOR A DISTANCE OF 847.50 FEET TO AN IRON PIN PLACED (1/2” REBAR) ON THE SOUTH LINE OF LAND LOT 793 (SAID LINE BEING COMMON TO LAND LOTS 793 & 864); THENCE ALONG THE SOUTH LINE OF LAND LOT 793 (SAID LINE BEING COMMON TO LAND LOTS 793 & 864), NORTH 89°06‘43“ WEST FOR A DISTANCE OF 648.52 FEET TO A NAIL FOUND AT BASE OF 1” AXLE IN ROCK PILE MARKING THE SOUTHWEST CORNER OF LAND LOT 793 AND ON THE EAST LINE OF LAND LOT 210 OF THE 20TH DISTRICT, 2ND SECTION OF COBB COUNTY (SAID LINE HEREINAFTER BEING REFERRED TO AS THE DISTRICT LINE); THENCE DEPARTING SAID DISTRICT LINE AND PROCEED NORTH 88°55‘09“ WEST FOR A DISTANCE OF 363.02 FEET TO AN IRON PIN PLACED (1/2” REBAR); THENCE NORTH 31°11‘20“ WEST A DISTANCE OF 394.24 FEET TO AN IRON PIN FOUND (1/2” REBAR); THENCE NORTH 41°29‘14“ WEST A DISTANCE OF 94.44 FEET TO AN IRON PIN FOUND (5/8” REBAR); THENCE NORTH 45°20‘57“ WEST A DISTANCE OF 178.68 FEET TO AN IRON PIN FOUND (3/4” REBAR); THENCE NORTH 39°50‘52“ WEST A DISTANCE OF 80.81 FEET TO AN IRON PIN PLACED (1/2” REBAR); THENCE NORTH 23°17‘20“ WEST A DISTANCE OF 113.61 FEET TO AN IRON PIN PLACED (1/2” REBAR) ON THE EASTERLY RIGHT-OF-WAY LINE OF GREERS CHAPEL ROAD (VARIABLE R/W); THENCE ALONG THE EASTERLY RIGHT-OF-WAY LINE OF GREERS CHAPEL ROAD THE FOLLOWING COURSES AND DISTANCES: 1) 25.96 FEET ALONG THE ARC OF A CURVE TO THE LEFT, SAID CURVE HAVING A RADIUS OF 196.52 FEET AND BEING SUBTENDED BY A CHORD OF NORTH 03°11‘59“ EAST, 25.94 FEET TO A POINT; 2) THENCE NORTH 00°35‘06“ WEST FOR A DISTANCE OF 514.81 FEET TO AN IRON PIN PLACED (1/2” REBAR) WHERE GREERS CHAPEL ROAD INTERSECTS THE SOUTHEASTERLY RIGHT-OF-WAY LINE OF BARRETT LAKES BOULEVARD (VARIABLE R/W, FKA: NEW GREERS CHAPEL ROAD); THENCE ALONG THE SOUTHEASTERLY, SOUTHERLY AND SOUTHEASTERLY RIGHT-OF-WAY LINE OF BARRETT LAKES BOULEVARD (VARIABLE R/W) THE FOLLOWING COURSES AND DISTANCES: 1) 210.72 FEET ALONG THE ARC OF A CURVE TO THE

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RIGHT, SAID CURVE HAVING A RADIUS OF 348.00 FEET AND BEING SUBTENDED BY A CHORD OF NORTH 31°02‘21“ EAST, 207.52 FEET TO AN IRON PIN PLACED (1/2” REBAR); 2) THENCE SOUTH 41°36’50” EAST A DISTANCE OF 4.50 FEET TO AN IRON PIN PLACED (1/2” REBAR); 3) THENCE 192.98 FEET ALONG THE ARC OF A CURVE TO THE RIGHT, SAID CURVE HAVING A RADIUS OF 343.50 FEET AND BEING SUBTENDED BY A CHORD OF NORTH 64°28‘49“ EAST, 190.45 FEET TO AN IRON PIN PLACED (1/2” REBAR); 4) THENCE NORTH 09°25’32” WEST A DISTANCE OF 3.15 FEET TO AN IRON PIN PLACED (1/2” REBAR); 5) THENCE NORTH 80°29‘41“ EAST AND CROSSING THE DISTRICT LINE FOR A DISTANCE OF 754.59 FEET TO AN IRON PIN PLACED (1/2” REBAR); 6) THENCE 804.09 FEET ALONG THE ARC OF A CURVE TO THE LEFT, SAID CURVE HAVING A RADIUS OF 800.00 FEET AND BEING SUBTENDED BY A CHORD OF NORTH 51°42‘02“ EAST 770.67 FEET TO AN IRON PIN FOUND (3/4” REBAR); 7) THENCE NORTH 22°54‘22“ EAST A DISTANCE OF 408.52 FEET TO AN IRON PIN FOUND (1/2” REBAR); 8) THENCE 181.66 FEET ALONG THE ARC OF A CURVE TO THE RIGHT, SAID CURVE HAVING A RADIUS OF 522.96 FEET AND BEING SUBTENDED BY A CHORD OF NORTH 32°51‘26“ EAST, 180.75 FEET TO AN IRON PIN PLACED (1/2” REBAR); THENCE DEPARTING THE SOUTHEASTERLY RIGHT-OF-WAY LINE OF BARRETT LAKES BOULEVARD (VARIABLE R/W, FKA: NEW GREERS CHAPEL ROAD) AND PROCEED SOUTH 42°49‘17“ EAST FOR A DISTANCE OF 842.11 FEET TO AN IRON PIN PLACED (1/2” REBAR) WITHIN A GEORGIA POWER EASEMENT; THENCE SOUTH 89°27‘09“ WEST FOR A DISTANCE OF 290.07 FEET TO AN IRON PIN PLACED (1/2” REBAR) ON THE EAST LINE OF LAND LOT 792 (SAID LINE BEING COMMON TO LAND LOTS 791 & 792 OF THE 16TH DISTRICT, 2ND SECTION OF COBB COUNTY; THENCE ALONG THE EAST LINE OF LAND LOT 792 (SAID LINE BEING COMMON TO LAND LOTS 791 & 792), SOUTH 00°56‘29“ EAST FOR A DISTANCE OF 682.09 FEET TO AN IRON PIN FOUND (1/2” REBAR) MARKING THE COMMON CORNER OF LAND LOTS 791, 792, 793 AND 794 AND THE POINT OF BEGINNING. SAID TRACT OR PARCEL CONTAINING 67.83537 ACRES OR 2,954,909 SQUARE FEET.

TOGETHER WITH THOSE EASEMENT RIGHTS ARISING UNDER THAT CERTAIN LIMITED WARRANTY DEED FROM SENIOR CORP., A DELAWARE CORPORATION TO STERLING HIGHLANDS DEVELOPMENT PARTNERS, LTD., A GEORGIA CORPORATION, DATED APRIL 1, 1988, RECORDED IN DEED BOOK 4865, PAGE 382, RECORDS OF COBB COUNTY, GEORGIA; AS RE-RECORDED JUNE 22, 1988 AT 1:14 PM., RECORDED IN DEED BOOK 4975, PAGE 385, AFORESAID RECORDS.

ALSO DESCRIBED AS:

BEING THE SAME PROPERTY DESCRIBED IN THE LIMITED WARRANTY DEED FROM SENIOR CORP. TO STERLING HIGHLANDS DEVELOPMENT PARTNERS, LTD., DATED APRIL 1, 1988, AND RECORDED APRIL 4, 1988 IN DEED BOOK 4865, PAGE 382

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COBB COUNTY RECORDS; AS RE-RECORDED JUNE 22, 1988, RECORDED IN DEED BOOK 4975, PAGE 385, AFORESAID RECORDS, MORE PARTICULARY DESCRIBED AS FOLLOWS:

TRACT I

All that tract of land in Land Lots 791, 792 and 793 of the 16th District, 2nd Section, and Land Lot 210 of the 20th District, 2nd Section of Cobb County, Georgia, described as follows;

Beginning at a one inch iron pin set at the point common to Land Lots 792, 793, 794 and 791 of said 16th District and running thence North 88°56’07” West along the south line of Land Lot 792, 671.50 feet to a one inch iron pin found; thence leaving the south line of Land Lot 792 South 01°23’24” West, 495.17 feet to a point; thence South 86°11’49” West, 1,510.95 feet to an iron pin set on the east side of Greers Chapel Road (being a 50 foot right-of-way); thence along the east side of Greers Chapel Road along the arc of a curve having a radius of 207.38 feet to the left (said arc being subtended by a chord bearing North 05°10’30” East, 21.12 feet), 21.13 feet to an iron pin set; thence North 00°34’18” East, 712.35 feet to an iron pin set; thence, leaving the east side of Green Chapel Road North 42°27’30” East, 30.44 feet to an iron pin set on the south side of Relocated Greers Chapel Road (being a 100 foot right-of-way); thence along the south side of Relocated Greers Chapel Road North 81°39’03” East, 1,021.47 feet to an iron pin set; thence along the arc of a curve having a radius of 800.00 feet to the left (said arc being subtended by a chord bearing North 52°51’24” East, 770.67 feet), 804.09 feet to a point; thence North 24°03’44” East, 408.52 feet to a point; thence along the arc of a curve having a radius of 522.96 feet to the right (said arc being subtended by a chord bearing North 34°00’48” East, 180.75 feet), 181.66 feet to an iron pin set; thence leaving the southeast side of Relocated Greers Chapel Road South 41°39’25” East, 842.19 feet to an iron pin set; thence North 89°26’24” West, 290.00 feet to a 3/4 inch iron pin found on the line common to Land Lots 791 and 792; thence along the line common to Land Lots 791 and 792 South 00°04’52” West, 683.15 feet to the POINT OF BEGINNING, said tract of land containing 45.637 acres as shown on that Boundary Survey for Sterling Highlands Development Partners, Ltd., First American Title Insurance Company and First Union National Bank of Georgia dated September 30, 1987, last revised March 25, 1988, prepared by Hill-Fister Engineers, Inc., Randy Lemon Tibbitts, GRLS No. 2137.

TRACT II

All that tract of Land in Land Lot 793 of the 16th District, 2nd Section, and Land Lot 210 of the 20th District, 2nd Section of Cobb County, Georgia, described as follows:

TO FIND THE POINT OF BEGINNING, begin at a one inch iron pin set at the point common to Land Lots 792, 793, 794 and 791 of said 16th District; run thence North 88°56’07” West along the south line of Land Lot 792, 671.50 feet to a one inch iron pin found; thence leaving the south line of Land Lot 792 South 01°23’24” West, 495.17 feet to the POINT OF BEGINNING; from the POINT OF BEGINNING as thus established run thence South 01°23’24” West, a distance of 847.43 feet to a one inch iron pin found on the south line of Land Lot 793 of said 16th District; thence along the south line of Land Lot 793 North 87°56’59” West, 648.62 feet to a piece of drill

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steel found at the southwest corner of Land Lot 793; thence leaving the south line of Land Lot 793 North 87°45’44” West, a distance of 362.90 feet to a 1/2 inch iron pin found; thence North 30°02’13” West, 394.20 feet to a 1/2 inch iron pin found; thence North 40°19’42” West, 94.40 feet to an iron pin set; thence North 44°12’09” West, 178.63 feet to an iron pin set; thence North 38°39’47” West, 80.81 feet to an iron pin set; thence North 22°08’08” West, 113.57 feet to an iron pin set at the east side of Greers Chapel Road (being a 50 foot right-of-way); thence leaving the east side of Greers Chapel Road North 86°11’49” East, a distance of 1,510.95 feet to the POINT OF BEGINNING, said tract of land containing 22.577 acres as shown on that Boundary Survey for Sterling Highlands Development Partners, Ltd., First American Title Insurance Company and First Union National Bank of Georgia dated September 30, 1987, last revised March 25, 1988, prepared by Hill-Fister Engineers, Inc., Randy Lemon Tibbitts, GRLS No. 2137.

LESS AND EXCEPT THE PROPERTY DESCRIBED IN THE RIGHT OF WAY DEED FROM CARLYLE CENTENNIAL CREST AT BARRETT LAKES, L.P. TO COBB COUNTY DEPARTMENT OF TRANSPORTATION, DATED JULY 28, 2008 AND RECORDED OCTOBER 13, 2008 IN DEED BOOK 14642, PAGE 6451 COBB COUNTY RECORDS.

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EXHIBIT B

MODIFICATIONS TO INSTRUMENT

The following modifications are made to the text of the Instrument that precedes this Exhibit:

NONE

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EX-10.8

EXHIBIT 10.8

Freddie Mac Loan Number: 708218687

Property Name: The 1800 at Barrett Lakes

GUARANTY

MULTISTATE

(Revised 10-24-2014)

THIS GUARANTY (“Guaranty”) is entered into to be effective as of November 20, 2014, by STEADFAST APARTMENT REIT, INC., a Maryland corporation (“Guarantor”, collectively if more than one), for the benefit of BERKELEY POINT CAPITAL LLC, a Delaware limited liability company (“Lender”).

RECITALS

A. Pursuant to the terms of a Multifamily Loan and Security Agreement dated the same date as this Guaranty (as amended, modified or supplemented from time to time, the "Loan Agreement"), STAR BARRETT LAKES, LLC, a Delaware limited liability company (“Borrower”) has requested that Lender make a loan to Borrower in the amount of $34,300,000 (“Loan”). The Loan will be evidenced by a Multifamily Note from Borrower to Lender dated effective as of the effective date of this Guaranty (as amended, modified or supplemented from time to time, the “Note”). The Note will be secured by a Multifamily Mortgage, Deed of Trust, or Deed to Secure Debt dated effective as of the effective date of the Note (as amended, modified or supplemented from time to time, the “Security Instrument”), encumbering the Mortgaged Property described in the Loan Agreement.

B. As a condition to making the Loan to Borrower, Lender requires that Guarantor execute this Guaranty.

C. Guarantor has a direct or indirect ownership or other financial interest in Borrower and/or will otherwise derive a material benefit from the making of the Loan.

AGREEMENT

NOW, THEREFORE, in order to induce Lender to make the Loan to Borrower, and in consideration thereof and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Guarantor agrees as follows:

Guaranty - Multistate

1. Defined Terms. The terms“Indebtedness”, “Loan Documents”, and “Property Jurisdiction”, and other capitalized terms used but not defined in this Guaranty, will have the meanings assigned to them in the Loan Agreement.

2. Scope of Guaranty.

(a) Guarantor hereby absolutely, unconditionally and irrevocably guarantees to Lender each of the following:

(i) Guarantor guarantees the full and prompt payment when due, whether at the Maturity Date or earlier, by reason of acceleration or otherwise, and at all times thereafter, of each of the following:

(A) Guarantor guarantees a portion of the Indebtedness equal to 0% of the original principal balance of the Note (“Base Guaranty”).

(B) In addition to the Base Guaranty, Guarantor guarantees all other amounts for which Borrower is personally liable under Sections 9(c), 9(d) and 9(f) of the Note (provided, however, that Guarantor will have no liability for failure of Borrower or SPE Equity Owner to comply with (I) Section 6.13(a)(xviii) of the Loan Agreement, and (II) the requirement in Section 6.13(a)(x)(B) of the Loan Agreement as to payment of trade payables within 60 days of the date incurred).

(C) Guarantor guarantees all costs and expenses, including reasonable Attorneys’ Fees and Costs incurred by Lender in enforcing its rights under this Guaranty.

(ii) Guarantor guarantees the full and prompt payment and performance of and/or compliance with all of Borrower’s obligations under Sections 6.12, 10.02(b) and 10.02(d) of the Loan Agreement when due and the accuracy of Borrower’s representations and warranties under Section 5.05 of the Loan Agreement.

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(b) If the Base Guaranty stated in Section 2(a)(i)(A) is 100% of the original principal balance of the Note, then the following will be applicable:

(i) The Base Guaranty will mean and include, and Guarantor hereby absolutely, unconditionally and irrevocably guarantees to Lender, the full and complete prompt payment of the entire Indebtedness, the performance of and/or compliance with all of Borrower’s obligations under the Loan Documents when due, and the accuracy of Borrower’s representations and warranties contained in the Loan Documents.     

(ii)  For so long as the Base Guaranty remains in effect (there being no limit to the duration of the Base Guaranty unless otherwise expressly provided in this Guaranty), the obligations guaranteed pursuant to Sections 2(a)(i)(B) and 2(a)(i)(C) will be part of, and not in addition to or in limitation of, the Base Guaranty.

(c) If the Base Guaranty stated in Section 2(a)(i)(A) is less than 100% of the original principal balance of the Note, then Section 2(b) will be completely inapplicable.

(d) If Guarantor is not liable for the entire Indebtedness, then all payments made by Borrower with respect to the Indebtedness and all amounts received by Lender from the enforcement of its rights under the Loan Agreement and the other Loan Documents (except this Guaranty) will be applied first to the portion of the Indebtedness for which neither Borrower nor Guarantor has personal liability.

3.Additional Guaranty Relating to Bankruptcy.

(a) Notwithstanding any limitation on liability provided for elsewhere in thisGuaranty,Guarantorhereby absolutely, unconditionally and irrevocably guarantees to Lender the full and prompt payment when due, whether at the Maturity Date or earlier, by reason of acceleration or otherwise, and at all times thereafter, the entire Indebtedness, in the event that:

(i) Borrower or any SPE Equity Owner voluntarily files for bankruptcy protection under the Bankruptcy Code.

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

(iii) The Mortgaged Property or any part of the Mortgaged Property becomes an asset in a voluntary bankruptcy or becomes subject to any voluntary reorganization, receivership, insolvency proceeding, or other similar

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voluntary proceeding pursuant to any other federal or state law affecting debtor and creditor rights.

(iv) An order of relief is entered against Borrower or any SPE Equity Owner pursuant to the Bankruptcy Code or other federal or state law affecting debtor and creditor rights in any involuntary bankruptcy proceeding initiated or joined in by a Related Party.

(v) An involuntary bankruptcy or other involuntary insolvency proceeding is commenced against Borrower or any SPE Equity Owner (by a party other than Lender) but only if Borrower or such SPE Equity Owner has failed to use commercially reasonable efforts to dismiss such proceeding or has consented to such proceeding. “Commercially reasonable efforts” will not require any direct or indirect interest holders in Borrower or any SPE Equity Owner to contribute or cause the contribution of additional capital to Borrower or any SPE Equity Owner.

(b) For purposesof Section 3(a) the term “Related Party” will include all of the

following:

(i) Borrower, any Guarantor or any SPE Equity Owner.

(ii) Any Person that holds, directly or indirectly, any ownership interest (including any shareholder, member or partner) in Borrower, any Guarantor or any SPE Equity Owner or any Person that has a right to manage Borrower, any Guarantor or any SPE Equity Owner.

(iii) Any Person in which Borrower, any Guarantor or any SPE Equity Owner has any ownership interest (direct or indirect) or right to manage.

(iv) Any Person in which any partner, shareholder or member of Borrower, any Guarantor or any SPE Equity Owner has an ownership interest or right to manage.

(v) Any Person in which any Person holding an interest in Borrower, any Guarantor or any SPE Equity Owner also has any ownership interest.

(vi) Any creditor of Borrower that is related by blood, marriage or adoption to Borrower, any Guarantor or any SPE Equity Owner.

(vii) Any creditor of Borrower that is related to any partner, shareholder or member of, or any other Person holding an interest in, Borrower, any Guarantor or any SPE Equity Owner.

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(c) If Borrower, any Guarantor, any SPE Equity Owner or any Related Party has solicited creditors to initiate or participate in any proceeding referred to in Section 3(a), regardless of whether any of the creditors solicited actually initiates or participates in the proceeding, then such proceeding will be considered as having been initiated by a Related Party.

4. Guarantor’s Obligations Survive Foreclosure. The obligations of Guarantor under this Guaranty will survive any foreclosure proceeding, any foreclosure sale, any delivery of any deed in lieu of foreclosure, and any release of record of the Security Instrument, and, in addition, the obligations of Guarantor relating to Borrower’s representations and warranties under Section 5.05 of the Loan Agreement, and Borrower’s obligations under Sections 6.12 and 10.02(b) of the Loan Agreementwill survive any repayment or discharge of the Indebtedness. Notwithstanding the foregoing, if Lender has never been a mortgagee-in-possession of or held title to the Mortgaged Property, Guarantor will have no obligation under this Guaranty relating to Borrower’s representations and warranties under Section 5.05 of the Loan Agreement or Borrower’s obligations relating to environmental matters under Sections 6.12 and 10.02(b) of the Loan Agreement after the date of the release of record of the lien of the Security Instrument as a result of the payment in full of the Indebtedness on the Maturity Date or by voluntary prepayment in full.

5. Guaranty of Payment and Performance. Guarantor’s obligations under this Guaranty constitute an unconditional guaranty of payment and performance and not merely a guaranty of collection.

6. No Demand by Lender Necessary; Waivers by Guarantor – All States Except California. The obligations of Guarantor under this Guaranty must be performed without demand by Lender and will be unconditional regardless of the genuineness, validity, regularity or enforceability of the Note, the Loan Agreement, or any other Loan Document, and without regard to any other circumstance which might otherwise constitute a legal or equitable discharge of a surety, a guarantor, a borrower or a mortgagor. Guarantor hereby waives, to the fullest extent permitted by applicable law, all of the following:

(a) The benefit of all principles or provisions of law, statutory or otherwise, which are or might be in conflict with the terms of this Guaranty and agrees that Guarantor’s obligations will not be affected by any circumstances, whether or not referred to in this Guaranty, which might otherwise constitute a legal or equitable discharge of a surety, a guarantor, a borrower or a mortgagor.

(b) The benefits of any right of discharge under any and all statutes or other laws relating to a guarantor, a surety, a borrower or a mortgagor, and any other rights of a surety, a guarantor, a borrower or a mortgagor under such statutes or laws.

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(c) Diligence in collecting the Indebtedness, presentment, demand for payment, protest, all notices with respect to the Note and this Guaranty which may be required by statute, rule of law or otherwise to preserve Lender’s rights against Guarantor under this Guaranty, including notice of acceptance, notice of any amendment of the Loan Documents, notice of the occurrence of any default or Event of Default, notice of intent to accelerate, notice of acceleration, notice of dishonor, notice of foreclosure, notice of protest, and notice of the incurring by Borrower of any obligation or indebtedness.

(d) All rights to cause a marshalling of the Borrower’s assets or to require Lender to do any of the following:

(i) Proceed against Borrower or any other guarantor of Borrower’s payment or performance under the Loan Documents (an “Other Guarantor”).

(ii)  Proceed against any general partner of Borrower or any Other Guarantor if Borrower or any Other Guarantor is a partnership.

(iii)  Proceed against or exhaust any collateral held by Lender to secure the repayment of the Indebtedness.

(iv) Pursue any other remedy it may now or hereafter have against Borrower, or, if Borrower is a partnership, any general partner of Borrower.

(e) Any right to object to the timing, manner or conduct of Lender’s enforcement of its rights under any of the Loan Documents.

(f) Any right to revoke this Guaranty as to any future advances by Lender under the terms of the Loan Agreement to protect Lender’s interest in the Mortgaged Property.

7. Modification of Loan Documents. At any time or from time to time and any number of times, without notice to Guarantor and without affecting the liability of Guarantor, all of the following will apply:

(a)    Lender may extend the time for payment of the principal of or interest on the Indebtedness or renew the Indebtedness in whole or in part.

(b)    Lender may extend the time for Borrower’s performance of or compliance with any covenantor agreement contained in the Note, the Loan Agreement or any other Loan Document, whether presently existing or entered into after the date of this Guaranty, or waive such performance or compliance.

(c)    Lender may accelerate the Maturity Date of the Indebtedness as provided in the Note, the Loan Agreement, or any other Loan Document.

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(d)    Lender and Borrower may modify or amend the Note, the Loan Agreement, or any other Loan Document in any respect, including an increase in the principal amount.

(e)    Lender may modify, exchange, surrender or otherwise deal with any security for the Indebtedness or accept additional security that is pledged or mortgaged for the Indebtedness.

8. Joint and Several Liability. The obligations of Guarantor (and each party named as a Guarantor in this Guaranty) and any Other Guarantor will be joint and several. Lender, in its sole and absolute discretion, may take any of the following actions:

(a) Lender may bring suit against Guarantor, or any one or more of the parties named as a Guarantor in this Guaranty, and any Other Guarantor, jointly and severally, or against any one or more of them.

(b) Lender may compromise or settle with Guarantor, any one or more of the parties named as a Guarantor in this Guaranty, or any Other Guarantor, for such consideration as Lender may deem proper.

(c) Lender may release one or more of the parties named as a Guarantor in this Guaranty, or any Other Guarantor, from liability.

(d) Lender may otherwise deal with Guarantor and any Other Guarantor, or any one or more of them, in any manner.

No action of Lender described in this Section 8 will affect or impair the rights of Lender to collect from any one or more of the parties named as a Guarantor under this Guaranty any amount guaranteed by Guarantor under this Guaranty.

9. Limited Release of Guarantor Upon Transfer of Mortgaged Property.    If Guarantor requests a release of its liability under this Guaranty in connection with a Transfer which Lender has approved pursuant to Section 7.05(a) of the Loan Agreement, and Borrower has provided a replacement Guarantor acceptable to Lender, then one of the following will apply:

(a)    If Borrower delivers to Lender a Clean Site Assessment, then Lender will release Guarantor from all of Guarantor’s obligations except Guarantor’s obligation to guaranty Borrower’s liability under Section 6.12 (Environmental Hazards) or Section 10.02(b) (Environmental Indemnification) of the Loan Agreement with respect to any loss, liability, damage, claim, cost or expense which directly or indirectly arises from or relates to any Prohibited Activities or Conditions existing prior to the date of the Transfer.

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(b)    If Borrower does not deliver a Clean Site Assessment as described in Section 7.05(b)(i) of the Loan Agreement, then Lender will release Guarantor from all of Guarantor’s obligations except for Guarantor’s obligation to guaranty Borrower’s liability under Section 6.12 (Environmental Hazards) or Section 10.02(b) (Environmental Indemnification) of the Loan Agreement.

10. Subordination of Borrower’s Indebtedness to Guarantor. Any indebtedness of Borrower held by Guarantor now or in the future is and will be subordinated to the Indebtedness and Guarantor will collect, enforce and receive any such indebtedness of Borrower as trustee for Lender, but without reducing or affecting in any manner the liability of Guarantor under the other provisions of this Guaranty.

11. Waiver of Subrogation. Guarantor will have no right of, and hereby waives any claim for, subrogation or reimbursement against Borrower or any general partner of Borrower by reason of any payment by Guarantor under this Guaranty, whether such right or claim arises at law or in equity or under any contract or statute, until the Indebtedness has been paid in full and there has expired the maximum possible period thereafter during which any payment made by Borrower to Lender with respect to the Indebtedness could be deemed a preference under the United States Bankruptcy Code.

12. Preference. If any payment by Borrower is held to constitute a preference under any applicable bankruptcy, insolvency, or similar laws, or if for any other reason Lender is required to refund any sums to Borrower, such refund will not constitute a release of any liability of Guarantor under this Guaranty. It is the intention of Lender and Guarantor that Guarantor’s obligations under this Guaranty will not be discharged except by Guarantor’s performance of such obligations and then only to the extent of such performance.

13. Financial Information and Litigation. Guarantor, from time to time upon written request by Lender, will deliver to Lender (a) such financial statements as Lender may reasonably require and (b) written updates on the status of all litigation proceedings that were disclosed or should have been disclosed by Guarantor to Lender as of the date of this Guaranty. If an Event of Default has occurred and is continuing, Guarantor will deliver to Lender upon written request copies of its state and federal tax returns.

14. Assignment. Lender may assign its rights under this Guaranty in whole or in part and upon any such assignment, all the terms and provisions of this Guaranty will inure to the benefit of such assignee to the extent so assigned. The terms used to designate any of the parties in this Guaranty will be deemed to include the heirs, legal representatives, successors and assigns of such parties, and the term “Lender” will also include any lawful owner, holder or pledgee of the Note.

15. Complete and Final Agreement. This Guaranty and the other Loan Documents represent the final agreement between the parties and may not be contradicted by evidence of prior, contemporaneous or subsequent oral agreements. There are no unwritten oral agreements between the parties. All prior or contemporaneous agreements,

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understandings, representations, and statements, oral or written, are merged into this Guaranty and the other Loan Documents. Guarantor acknowledges that Guarantor has received a copy of the Note and all other Loan Documents. Neither this Guaranty nor any of its provisions may be waived, modified, amended, discharged, or terminated except by a writing signed by the party against which the enforcement of the waiver, modification, amendment, discharge, or termination is sought, and then only to the extent set forth in that writing.

16. Governing Law. This Guaranty will be governed by and enforced in accordance with the laws of the Property Jurisdiction, without giving effect to the choice of law principles of the Property Jurisdiction that would require the application of the laws of a jurisdiction other than the Property Jurisdiction.

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

18. Guarantor’s Interest in Borrower. Guarantor represents to Lender that Guarantor has a direct or indirect ownership or other financial interest in Borrower and/or will otherwise derive a material financial benefit from the making of the Loan.

19. Reserved.

20. Reserved.

21. Reserved.

22. Reserved.

23. Reserved.

24. Reserved.

25. State-Specific Provisions.

If the Property Jurisdiction is Georgia: Guarantor waives the benefit of O.C.G.A. Section 10‑7‑24.

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26.    Community Property Provision.

Not applicable.

27. WAIVER OF TRIAL BY JURY.

(a) GUARANTOR AND LENDER EACH COVENANTS AND AGREES NOT TO ELECT A TRIAL BY JURY WITH RESPECT TO ANY ISSUE ARISING OUT OF THIS GUARANTY OR THE RELATIONSHIP BETWEEN THE PARTIES AS GUARANTOR AND LENDER THAT IS TRIABLE OF RIGHT BY A JURY.

(b) GUARANTOR AND LENDER EACH WAIVES ANY RIGHT TO TRIAL BY JURY WITH RESPECT TO SUCH ISSUE TO THE EXTENT THAT ANY SUCH RIGHT EXISTS NOW OR IN THE FUTURE. THIS WAIVER OF RIGHT TO TRIAL BY JURY IS SEPARATELY GIVEN BY EACH PARTY, KNOWINGLY AND VOLUNTARILY WITH THE BENEFIT OF COMPETENT LEGAL COUNSEL.

28. Attached Riders. The following Riders, if marked with an “X” in the space provided, are attached to this Guaranty:

None

Material Adverse Change Rider

Minimum Net Worth/Liquidity Rider

X Other:

• Rider to Guaranty – Completion Guaranty for Property Improvement Alterations

29. Attached Exhibit. The following Exhibit, if marked with an “X” in the space provided, is attached to this Guaranty:

Exhibit A Modifications to Guaranty

(Remainder of page intentionally left blank; signature pages follow.)

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IN WITNESS WHEREOF, Guarantor has signed and delivered this Guaranty under seal or has caused this Guaranty to be signed and delivered under seal by its duly authorized representative. Guarantor intends that this Guaranty will be deemed to be signed and delivered as a sealed instrument.

	GUARANTOR:
	STEADFAST APARTMENT REIT, INC.
	a Maryland corporation
	By:	/s/ Kevin J. Keating	(SEAL)
	Name:	Kevin J. Keating
	Title:	Treasurer

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(a) Name and Address of Guarantor

Name:        STEADFAST APARTMENT REIT, INC.

Address:     18100 Von Karman Avenue, Suite 500

Irvine, California 92612    

Attention: Ana Marie del Rio

(b) Guarantor represents and warrants that Guarantor is:

	single
	married
X	an entity

(c)Guarantor represents and warrants that Guarantor’s state of residence is N/A.

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RIDER TO GUARANTY

COMPLETION GUARANTY FOR

PROPERTY IMPROVEMENT ALTERATIONS

(Revised 9-25-2014)

The following changes are made to the Guaranty which precedes this Rider:

A.    Section 2(a) is amended to include the following new subsection (iii):

(iii) Guarantor guarantees the full and prompt payment and performance of, and compliance with, Borrower’s obligations under Section 6.09(e)(v) of the Loan Agreement to the extent Property Improvement Alterations have commenced and remain uncompleted.

Rider to Guaranty    

Completion Guaranty for Property Improvement Alterations

.

EXHIBIT A

MODIFICATIONS TO GUARANTY

The following modifications are made to the text of the Guaranty that precedes this Exhibit:

None.

Guaranty - Multistate Exhibit A - 1

EX-10.9

EXHIBIT 10.9

Freddie Mac Loan Number: 708218687

Property Name: The 1800 at Barrett Lakes

ASSIGNMENT OF MANAGEMENT AGREEMENT AND
SUBORDINATION OF MANAGEMENT FEES

(Revised 3-1-2014)

THIS ASSIGNMENT OF MANAGEMENT AGREEMENT AND SUBORDINATION OF MANAGEMENT FEES (“Assignment”) is made effective as of the 20^th day of November, 2014, by and among STAR BARRETT LAKES, LLC, a Delaware limited liability company, having its principal place of business at 18100 Von Karman Avenue, Suite 500, Irvine, California 92612 (“Borrower”), BERKELEY POINT CAPITAL LLC,a Delaware limited liability company, having an address at 4550 Montgomery Avenue, Suite 1100, Bethesda, Maryland 20814 (“Lender”), and STEADFAST MANAGEMENT COMPANY, INC., a California corporation, having its principal place of business at 18100 Von Karman Avenue, Suite 500, Irvine, CA 92612 (“Property Manager”).

RECITALS:

A. Borrower has requested that Lender make a loan to Borrower in the amount of $34,300,000 (“Loan”). The Loan will be evidenced by a Multifamily Note from Borrower to Lender effective as of the date of this Assignment (“Note”). The Note is secured by, among other things, a Multifamily Loan and Security Agreement (“Loan Agreement”) and a Multifamily Deed to Secure Debt ( “Security Instrument”), dated as of the date of this Assignment, which grants Lender a first lien on the property encumbered by the Security Instrument (“Mortgaged Property”). The Note, the Loan Agreement, the Security Instrument, this Assignment and any of the other documents evidencing the Loan are collectively referred to as the “Loan Documents”. Other capitalized terms used but not defined in this Assignment will have the meanings given to those terms in the Loan Agreement.

B. Pursuant to a Management Agreement between Borrower and Property Manager (“Management Agreement”) (a true and correct copy of which is attached as Exhibit A), Borrower employed Property Manager exclusively to lease, operate and manage the Mortgaged Property, and Property Manager is entitled to certain management fees (“Management Fees”) pursuant to the Management Agreement.

C. Lender requires as a condition to the making of the Loan that Borrower assign the Management Agreement and that Property Manager subordinate its interest in the Management Fees in lien and payment to the Loan as set forth below.

Schedule A

Assignment of Management Agreement and

Subordination of Management Fees        

For good and valuable consideration the parties agree as follows:

1. Assignment of Management Agreement. As additional collateral security for the Loan, Borrower conditionally transfers, sets over, and assigns to Lender all of Borrower’s right, title and interest in and to the Management Agreement and all extensions and renewals. This transfer and assignment will automatically become a present, unconditional assignment, at Lender’s option, upon a default by Borrower under the Note, the Loan Agreement, the Security Instrument or any of the other Loan Documents (each, an “Event of Default”), and the failure of Borrower to cure such Event of Default within any applicable grace period.

2. Subordination of Management Fees. The Management Fees and all rights and privileges of Property Manager to the Management Fees are and will at all times continue to be subject and unconditionally subordinate in all respects in lien and payment to the lien and payment of the Loan Agreement, the Security Instrument, the Note, and the other Loan Documents, and to any renewals, extensions, modifications, assignments, replacements, or consolidations of the Loan Documents and the rights, privileges, and powers of Lender under the Note, the Loan Agreement, the Security Instrument, or any of the other Loan Documents.

3. Estoppel. Property Manager and Borrower represent and warrant that all of the following are true as of the date of this Assignment:

(a) The Management Agreement is in full force and effect and has not been modified, amended or assigned other than pursuant to this Assignment.

(b) Neither Property Manager nor Borrower is in default under any of the terms, covenants or provisions of the Management Agreement and Property Manager knows of no event which, but for the passage of time or the giving of notice or both, would constitute an event of default under the Management Agreement.

(c) Neither Property Manager nor Borrower has commenced any action or given or received any notice for the purpose of terminating the Management Agreement.

(d) The Management Fees and all other sums due and payable to the Property Manager under the Management Agreement have been paid in full.

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4. Agreement by Borrower and Property Manager. Borrower and Property Manager agree that if there is an Event of Default by Borrower (continuing beyond any applicable grace period) under the Note, the Loan Agreement, the Security Instrument or any of the other Loan Documents during the term of this Assignment or upon the occurrence of any event which would entitle Lender to terminate the Management Agreement in accordance with the terms of the Loan Documents, Lender may terminate the Management Agreement without payment of any cancellation fee or penalty and require Property Manager to transfer its responsibility for the management of the Mortgaged Property to a management company selected by Lender in Lender’s sole discretion, effective as of the date set forth in Lender’s notice to Property Manager. Following any such termination, Property Manager agrees to apply all rents, security deposits, issues, proceeds and profits of the Mortgaged Property in accordance with Lender’s written directions to Property Manager.

5. Lender’s Right to Replace Property Manager. If Lender, in Lender’s reasonable discretion, at any time during the term of this Assignment, determines that the Mortgaged Property is not being managed in accordance with generally accepted management practices for properties similar to the Mortgaged Property, Lender will deliver written notice to Borrower and Property Manager, which notice will specify with particularity the grounds for Lender’s determination. If Lender reasonably determines that the conditions specified in Lender’s notice are not remedied to Lender’s reasonable satisfaction by Borrower or Property Manager within 30 days from receipt of such notice or that Borrower or Property Manager have failed to diligently undertake correcting such conditions within such 30‑day period, Lender may direct Borrower to terminate Property Manager as manager of the Mortgaged Property and terminate the Management Agreement without payment of any cancellation fee or penalty and to replace Property Manager with a management company acceptable to Lender in Lender’s sole discretion pursuant to a management agreement acceptable to Lender in Lender’s sole discretion.

6. Receipt of Management Fees. Property Manager will not be obligated to return or refund to Lender any Management Fees or other fee, commission or other amount received by Property Manager prior to the occurrence of the Event of Default, and to which Property Manager was entitled under the Management Agreement. If the Property Manager receives any Management Fees after it has received notice of an Event of Default, Property Manager agrees that such Management Fees will be received and held in trust for Lender, to be applied by Lender to amounts due under the Loan Documents.

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Subordination of Management Fees	Page 3

7. Consent and Agreement by Property Manager. Property Manager acknowledges and consents to this Assignment and agrees that Property Manager will act in conformity with the provisions of this Assignment and Lender’s rights under this Assignment or otherwise related to the Management Agreement. If the responsibility for the management of the Mortgaged Property is transferred from Property Manager in accordance with the provisions of this Assignment, then Property Manager will fully cooperate in transferring its responsibility to a new management company and complete such transfer no later than 30 days from the date the Management Agreement is terminated. Further, Property Manager agrees as follows:

(a) It will not contest or impede the exercise by Lender of any right Lender has under or in connection with this Assignment.

(b) It will give at least 30 days prior written notice to Lender of its intention to terminate the Management Agreement or otherwise discontinue its management of the Mortgaged Property, in the manner provided for in this Assignment.

(c) It will not amend any of the provisions or terms of the Management Agreement without the prior consent of Lender.

8. Termination. When the Loan is paid in full and the Security Instrument is released or assigned of record, this Assignment and all of Lender’s right, title and interest hereunder with respect to the Management Agreement will terminate.

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Subordination of Management Fees	Page 4

9. Notices.

(a) All notices under or concerning this Assignment (“Notice”) will be in writing. Each Notice will be deemed given on the earliest to occur of: (i) the date when the Notice is received by the addressee, (ii) the first Business Day after the Notice is delivered to a recognized overnight courier service, with arrangements made for payment of charges for next Business Day delivery, or (iii) the third Business Day after the Notice is deposited in the United States mail with postage prepaid, certified mail, return receipt requested. Addresses for Notice are as follows:

If to Lender:	Berkeley Point Capital LLC One Beacon Street, 14th Floor Boston, Massachusetts 02108 Attention: Director Loan Servicing
If to Borrower:	18100 Von Karman Avenue Suite 500 Irvine, California 92612 Attention: Ana Marie del Rio
If to Property Manager:	18100 Von Karman Avenue Suite 500 Irvine, California 92612 Attention: Christopher Hilbert

(b) Any party to this Assignment may change the address to which Notices intended for it are to be directed by means of Notice given to the other parties in accordance with this Section 9. Each party agrees that it will not refuse or reject delivery of any Notice given in accordance with this Section 9, that it will acknowledge, in writing, the receipt of any Notice upon request by the other party and that any Notice rejected or refused by it will be deemed for purposes of this Section 9 to have been received by the rejecting party on the date so refused or rejected, as conclusively established by the records of the U.S. Postal Service or the courier service.

10. Governing Law; Consent to Jurisdiction and Venue.

(a) This Assignment will be construed in accordance with and governed by the laws of the Property Jurisdiction.

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Subordination of Management Fees	Page 5

(b) Borrower and Property Manager agree that any controversy arising under or in relation to this Assignment may be litigated in the Property Jurisdiction. The state and federal courts and authorities with jurisdiction in the Property Jurisdiction will have jurisdiction over all controversies that may arise under or in relation to this Assignment. Borrower and Property Manager irrevocably consent to service, jurisdiction and venue of such courts for any such litigation and waive any other venue to which it might be entitled by virtue of domicile, habitual residence or otherwise. However, nothing in this Section 10 is intended to limit Lender’s right to bring any suit, action or proceeding relating to matters under this Assignment in any court of any other jurisdiction.

11. Captions, Cross References and Exhibits. The captions assigned to provisions of this Assignment are for convenience only and will be disregarded in construing this Assignment. Any reference in this Assignment to an “Exhibit” or a “Section,” unless otherwise explicitly provided, will be construed as referring, respectively, to an Exhibit attached to this Assignment or to a section of this Assignment. All Exhibits attached to or referred to in this Assignment are incorporated by reference into this Assignment.

12. Number and Gender. Use of the singular in this Assignment includes the plural, use of the plural includes the singular, and use of one gender includes all other genders, as the context may require.

13. No Partnership. This Assignment is not intended to, and will not, create a partnership or joint venture among the parties, and no party to this Assignment will have the power or authority to bind any other party except as explicitly provided in this Assignment.

14. Severability. The invalidity or unenforceability of any provision of this Assignment will not affect the validity of any other provision, and all other provisions will remain in full force and effect.

15. Entire Assignment. This Assignment contains the entire agreement among the parties as to the rights granted and the obligations assumed in this Assignment.

16. No Waiver; No Remedy Exclusive. Any forbearance by a party to this Assignment in exercising any right or remedy given under this Assignment or existing at law or in equity will not constitute a waiver of or preclude the exercise of that or any other right or remedy. Unless otherwise explicitly provided, no remedy under this Assignment is intended to be exclusive of any other available remedy, but each remedy will be cumulative and will be in addition to other remedies given under this Assignment or existing at law or in equity.

Assignment of Management Agreement and
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17. Third Party Beneficiaries. Neither any creditor of any party to this Assignment, nor any other person, is intended to be a third party beneficiary of this Assignment.

18. Further Assurances and Corrective Instruments. To the extent permitted by law, the parties will, from time to time, execute, acknowledge and deliver, or cause to be executed, acknowledged and delivered, such supplements to this Assignment and such further instruments as may reasonably be required for carrying out the intention of or facilitating the performance of this Assignment.

19. Counterparts. This Assignment may be executed in multiple counterparts, each of which will constitute an original document and all of which together will constitute one agreement.

20. Indemnity. By executing this Assignment Borrower agrees to indemnify and hold harmless Lender and its successors and assigns from and against any and all losses, claims, damages, liabilities and expenses including Attorneys’ Fees and Costs, which may be imposed or incurred in connection with this Assignment.

21. Costs and Expenses. Wherever pursuant to this Assignment it is provided that Borrower will pay any costs and expenses, such costs and expenses will include Lender’s Attorneys’ Fees and Costs.

22. Determinations by Lender. In any instance where the consent or approval of Lender may be given or is required, or where any determination, judgment or decision is to be rendered by Lender under this Assignment, the granting, withholding or denial of such consent or approval and the rendering of such determination, judgment or decision will be made or exercised by Lender (or its designated representative) at its sole and exclusive option and in its sole and absolute discretion and will be final and conclusive, except as may be otherwise expressly and specifically provided in this Assignment.

23. Successors and Assigns. This Assignment will be binding upon and inure to the benefit of Borrower, Lender and Property Manager and their respective successors and assigns forever.

24. Secondary Market.  Lender may sell, transfer and deliver the Note and assign the Loan Agreement, the Security Instrument, this Assignment and the other Loan Documents to one or more investors in the secondary mortgage market (“Investors”). In connection with such sale, Lender may retain or assign responsibility for servicing the Loan, including the Note, the Loan Agreement, the Security Instrument, this Assignment and the other Loan Documents, or may delegate some or all of such responsibility and/or obligations to a servicer including any subservicer or master servicer, on behalf of the Investors. All references to Lender in this Assignment will refer to and include any such servicer to the extent applicable.

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IN WITNESS WHEREOF the undersigned have executed this Assignment as of the date and year first written above.

BORROWER:

STAR BARRETT LAKES, LLC

a Delaware limited liability company

By:    STEADFAST APARTMENT ADVISOR, LLC

a Delaware limited liability company

Non-Member Manager

By:	/s/ Kevin J. Keating	(SEAL)
Name:	Kevin J. Keating
Title:	Treasurer

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Subordination of Management Fees	Page 8

LENDER:

BERKELEY POINT CAPITAL LLC

a Delaware limited liability company

By:	/s/ Deborah Demoney	(SEAL)
	Deborah Demoney
	Assistant Vice President

By:	/s/ Heidi Marrin	(SEAL)
	Heidi Marrin
	Director

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Subordination of Management Fees	Page 9

PROPERTY 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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SCHEDULE A

MODIFICATIONS TO ASSIGNMENT OF MANAGEMENT AGREEMENT

The following modifications are made to the text of the Assignment that precedes this Exhibit:

1.    Section 6 is revised to read as follows:

6. Receipt of Management Fees. Property Manager will not be obligated to return or refund to Lender any Management Fees or other fee, commission or other amount received by Property Manager prior to the occurrence of the Event of Default, and to which Property Manager was entitled under the Management Agreement. If the Property Manager receives any Management Fees after it has received notice of an Event of Default, Property Manager agrees that such Management Fees will be received and held in trust for Lender, to be applied by Lender to amounts due under the Loan Documents; provided, however, that nothing herein will prevent Property Manager from terminating the Management Agreement in the event Property Manager is not paid all fees due to it under the Management Agreement.

Schedule A

Assignment of Management Agreement and

Subordination of Management Fees        

EXHIBIT AMANAGEMENT AGREEMENT

[INTENTIONALLY OMITTED]

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EX-99.1

2-2-2 Steadfast Apartment REIT Acquires 1800 Barrett Lakes in Kennesaw, Ga.

	EXHIBIT 99.1
	18100 Von Karman Avenue Suite 500 Irvine, CA 92612 949.852.0700

NEWS RELEASE

Contact:    Jennifer Franklin

Phone:        949.333.1721

Email:        jfranklin@steadfastcmg.com

STEADFAST APARTMENT REIT ACQUIRES 500-UNIT COMMUNITY NEAR ATLANTA FOR $49 MILLION

IRVINE, Calif., Nov. 25, 2014 – Steadfast Apartment REIT announced today the acquisition of 1800 Barrett Lakes, a 500-unit apartment community situated in the Atlanta submarket of Kennesaw, Ga., for $49 million. The REIT now has invested over $234 million in six apartment communities in four Midwestern and Southern states.

“1800 Barrett Lakes is located in one of the stronger submarkets within the Atlanta area,” said Ella Shaw Neyland, president of Steadfast Apartment REIT. “We believe that the new Atlanta Braves baseball stadium—just six miles from the property,—the expansion of the McCollum Field County Airport and the addition of a $38 million mixed‐use development project will continue to drive demand for apartments in Kennesaw.”

(more)

2-2-2 Steadfast Apartment REIT Acquires 1800 Barrett Lakes in Kennesaw, Ga.

Constructed in two phases between 1988 and 1997, the 96 percent occupied Barrett Lakes consists of 39 garden-style buildings on an expansive 68-acre site. One-, two- and three-bedroom apartments offer spacious layouts that average 1,086 square feet and have average in-place rents of $827. Select apartment homes are upgraded with fireplaces, vaulted ceilings and crown molding.

Barrett Lakes also boasts a rich amenity package, which includes two swimming pools, a sauna, lighted tennis courts, a fitness center, a clubhouse, a playground, and an internet café.

Approximately 40% of the apartment homes have been renovated to include upgraded cabinetry, countertops and appliances. Steadfast plans to continue the interior upgrades when turning the units between residents and will add additional enhancements like vinyl wood flooring and faux wood blinds throughout the renovated apartment homes.

Located just 15 miles northwest of Atlanta, the city of Kennesaw is within close proximity to 6.6 million square feet of office space and 6.4 million square feet of retail space, including the Town Center Mall, one of the largest malls in the greater Atlanta area.

Additionally, Kennesaw State University continues to spark growth in the immediate area with its current 26,000-student base. The university has plans for $795 million in projects to accommodate growing student enrollment, which is projected to reach 30,000 by 2016.  

Barrett Lakes is the REIT’s second acquisition in Georgia. In October 2014, the REIT acquired the 696-unit Residences at McGinnis Ferry in Suwanee—30 miles northeast of downtown Atlanta.

About Steadfast Apartment REIT

Steadfast Apartment REIT intends to acquire and operate a diverse portfolio of well-positioned, institutional-quality apartment communities in targeted markets throughout the United States that have demonstrated high occupancy and income levels across market cycles.

2-2-2 Steadfast Apartment REIT Acquires 1800 Barrett Lakes in Kennesaw, Ga.

Steadfast Apartment REIT is sponsored by Steadfast REIT Investments LLC, an affiliate of Steadfast Companies, an Orange County, Calif.-based group of affiliated real estate investment and operating companies that acquire, develop and manage real estate in the U.S. and Mexico.

This release contains certain forward-looking statements. Because such statements include risks, uncertainties and contingencies, actual results may differ materially from those expressed or implied by such forward-looking statements and you should not place undue reliance on any such statements. A number of important factors could cause actual results to differ materially from the forward-looking statements contained in this release. Such factors include those described in the Risk Factors sections of the Steadfast Apartment REIT annual report on Form 10-K and other reports filed with the Securities and Exchange Commission. Forward-looking statements in this document speak only as of the date on which such statements were made, and the company undertakes no obligation to update any such statements that may become untrue because of subsequent events. Such forward-looking statements are subject to the safe harbor protection for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995.

THIS PRESS RELEASE SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY SECURITIES.

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