EXHIBIT 10.12

Freddie Mac Loan Numbers: 70864428 and 708644090
Freddie Mac Deal Number: 150801
Freddie Mac Rollup Number: 504194674

        

CREDIT AGREEMENT
BY AND BETWEEN
STAR Delano, LLC,
a Delaware limited liability company

AND

STAR Meadows, LLC,
a Delaware limited liability company

individually and collectively as Borrower

AND

PNC Bank, National Association, a national banking association,
as Lender
August 26, 2015

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TABLE OF CONTENTS

Page

1.
DEFINITIONS
 
 
 
 
 
 
 
1

 
1.1

 
Definitions
 
 
 
 
 
 
1

 
1.2

 
Construction
 
 
 
13

 
1.3

 
Accounting Principles
 
 
 
14

 
 
 
 
 
 
 
 
2.
REVOLVING CREDIT FACILITY
 
 
 
 
15

 
2.1

 
Revolving Credit Commitment
 
 
15

 
2.2

 
(a) Term
 
 
 
 
 
 
16

 
2.3

 
Nature of Lender's Obligations with Respect to the Loan
 
17

 
2.4

 
Fees
 
 
 
 
 
 
18

 
2.5

 
Loan Requests
 
 
 
20

 
2.6

 
The Loan
 
 
 
 
 
 
21

 
2.7

 
The Revolving Credit Note
 
 
22

 
2.8

 
Use of Proceeds
 
 
 
 
 
 
22

 
2.9

 
Additions to the Collateral Pool
 
 
22

 
2.10

 
Release of Collateral
 
 
 
25

 
2.11

 
Payment of the Loan Balance Without Termination
 
25

 
2.12

 
Valuations
 
 
 
 
 
 
25

 
2.13

 
Termination
 
26

 
2.14

 
Material Adverse Change to Borrower or a Mortgaged Property
27

 
2.15

 
Release of Collateral Followed by a Permanent Loan
 
28

 
2.16

 
Non-Compliance with Sublimits
 
 
 
 
 
29

 
2.17

 
Loan Documents
 
 
 
 
 
30

 
2.18

 
Guaranty
 
 
 
 
 
30

 
2.19

 
Release of a Borrower
 
 
 
 
 
30

 
 
 
 
 
 
 
 
 
 
3.
INTEREST RATES
 
 
 
 
 
 
 
 
30

 
3.1

 
Interest Rate
 
30

 
3.2

 
Interest Rate Determinations
 
31

 
3.3

 
Interest Periods
 
31

 
3.4

 
Illegality; Increased Costs
 
33

 
 
 
 
 
 
 
 
 
 
 
 
 
 
4.
PAYMENTS
 
 
 
 
 
 
 
 
 
34

 
4.1

 
Payments
 
34

 
4.2

 
Payment Dates
 
34

 
4.3

 
Prepayments
 
35

 
4.4

 
Accrued Interest
 
36

 
4.5

 
Additional Payment Obligations
 
36

 
4.6

 
Additional Compensation in Certain Circumstances
 
37

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

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5.
CONDITIONS OF LENDING
 
 
 
38

 
5.1

 
Initial Borrowing Tranche
 
38

 
5.2

 
Each Subsequent Borrowing Tranche
 
40

 
 
 
 
 
 
 
 
 
 
 
 
 
 
6.
REPRESENTATIONS AND WARRANTIES
 
 
 
41

 
6.1

 
Representations and Warranties
 
41

 
6.2

 
Updates
 
47

 
6.3

 
Survival of Representations and Warranties
 
47

 
 
 
 
 
 
 
 
 
 
 
 
 
 
7.
COVENANTS
 
 
 
47

 
7.1

 
Covenants
 
47

 
7.2

 
Notice of Material Adverse Change
 
50

 
7.3

 
Annual Evaluation
 
51

 
 
 
 
 
 
 
 
 
 
 
 
 
 
8.
DEFAULT
 
 
 
51

 
8.1

 
Events of Default
 
51

 
8.2

 
Consequences of Event of Default
 
54

 
 
 
 
 
 
 
 
 
 
 
 
 
 
9.
MISCELLANEOUS
 
 
 
 
 
 
 
 
54

 
9.1

 
Cooperation by Borrower; Borrower's Obligations
 
54

 
9.2

 
Successors and Assigns
 
55

 
9.3

 
Modifications, Amendments or Waivers
 
55

 
9.4

 
Forbearance
 
55

 
9.5

 
Remedies Cumulative
 
56

 
9.6

 
Reimbursement and Indemnification of Lender and Servicer by Borrower; Taxes
 
56

 
9.7

 
Holidays
 
56

 
9.8

 
Notices
 
57

 
9.9

 
Severability
 
58

 
9.10

 
Governing Law; Consent to Jurisdiction and Venue
 
58

 
9.11

 
Prior Understanding
 
58

 
9.12

 
Duration; Survival
 
58

 
9.13

 
Disclosure of Information
 
59

 
9.14

 
Exceptions
 
59

 
9.15

 
Relationship of Parties; No Third Parties Benefited
 
59

 
9.16

 
Authority to File Notices
 
 
60

 
9.17

 
WAIVER OF TRIAL BY JURY
 
 
60

 
9.18

 
Interpretation
 
 
60

 
9.19

 
Brokerage Fee
 
 
60

 
9.20

 
Advertising
 
 
60

 
9.21

 
Time of Essence
 
 
61

 
9.22

 
Counterparts
 
 
61

 
9.23

 
NOTICE OF FINAL AGREEMENT
 
 
62

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CREDIT AGREEMENT
THIS CREDIT AGREEMENT (“Agreement”) is dated as of August 26, 2015 and is made
by and between STAR Delano, LLC, a Delaware limited liability company and STAR
Meadows, LLC, a Delaware limited liability company, each having an address c/o
Steadfast Companies, 18100 Von Karman Avenue, Suite 500, Irvine, CA 92612
(individually and collectively the “Borrower”) and PNC Bank, National
Association, a national banking association, having an address of 26901 Agoura
Road, Suite 200, Calabasas Hills, CA 91301 (together, with its successors and/or
assigns, “Lender”).
RECITALS
WHEREAS, Borrower desires to obtain a revolving credit facility from Lender in
an amount up to, but not exceeding Two Hundred Million and NO/100 Dollars
($200,000,000), subject to increase to an amount not to exceed Three Hundred
Fifty Million and NO/100 Dollars ($350,000,000) as provided herein;
WHEREAS, Borrower has offered to grant Lender a security interest in certain
real property and other assets owned by Borrower as security for Borrower’s
repayment of such revolving loan; and
WHEREAS, Lender is willing to make the above described loan to Borrower secured
by an interest in such real property and other assets owned by Borrower.
NOW, THEREFORE, the parties hereto, in consideration of their mutual covenants
and agreements hereinafter set forth and intending to be legally bound hereby,
covenant and agree as follows:
1.DEFINITIONS
1.1.    Definitions.
In addition to words and terms (a) defined elsewhere in this Agreement, or (b)
if not defined elsewhere in this Agreement as defined in the Loan Agreement (as
defined below), the following words and terms shall have the following meanings,
respectively, unless the context hereof clearly requires otherwise:
“Accrued Interest” shall have the meaning set forth in Section 4.4.
“Addition Fee” shall have the meaning as set forth in Section 2.4.9.

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“Advisor” shall mean Steadfast Apartment Advisor, LLC, a Delaware limited
liability company.
“Affiliate” or “Affiliates” shall mean (i) any other Person which, directly or
indirectly, is in Control of, is under the Control of, or is under common
Control with, such Person; or (ii) any other Person who is a director or officer
of (A) such Person, (B) any subsidiary of such Person, or (C) any Person
described in clause (i) of this definition; provided, however, that no publicly
held corporation other than Sponsor shall be considered an Affiliate for any
purpose.
“Agreement” shall mean this Credit Agreement, as the same may be amended,
modified, increased or supplemented from time to time, including all schedules
attached hereto.
“Allocated Loan Amount” shall mean for each Mortgaged Property the maximum debt
amount determined by Freddie Mac taking into account the Sublimits. For purposes
of determining the Addition Fees for any addition of a Mortgaged Property, the
Allocated Loan Amount shall be calculated based on a Mortgaged Property’s “as
is” Net Operating Income and Valuation at the time of such Mortgaged Property’s
addition to the Collateral Pool. For purposes of determining the Seasoning Fee
or Partial Termination Fee, Net Worth or Liquidity, the Allocated Loan Amount
shall be calculated based on a Mortgaged Property’s “as is” Net Operating Income
and Valuation on or about the most recent anniversary of the Closing Date.
“Anniversary Delivery Date” shall have the meaning set forth in Section 7.3.
“Attorneys’ Fees and Costs” shall mean (i) fees and out of pocket costs of
Lender’s and Servicer’s attorneys, as applicable, including costs of Lender’s
and Servicer’s in-house counsel, support staff costs, costs of preparing for
litigation, computerized research, mileage, deposition costs, postage,
duplicating, process service, videotaping and similar costs and expenses; (ii)
costs and fees of expert witnesses in the event of actual litigation between the
parties, including appraisers; and (iii) investigatory fees.
“Authorized Officer” shall mean those individuals, designated by written Notice
to Lender from Borrower, authorized to execute Notices, reports and other
documents on behalf of Borrower required hereunder; provided, further, that the
individuals so designated as the Authorized Officers of Borrower shall be the
sole representatives of Borrower for the purpose of giving or receiving any
Notices permitted or required by this Agreement. Borrower may amend such list of
individuals from time to time by giving written Notice of such amendment to
Lender.

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“Base Rate” shall mean the LIBOR Index Rate (truncated to the 5th decimal place,
if necessary) plus the applicable Margin. Interest accruing at the Base Rate
shall be calculated monthly in the manner provided in this Agreement based on
the aggregate principal balance of the Base Rate Borrowing Tranches outstanding
during the applicable Month, and such interest shall be paid in arrears, as
provided herein. The LIBOR Index Rate plus the applicable Margin with respect to
each Base Rate Borrowing Tranche shall remain fixed throughout the applicable
Interest Period and shall then be recalculated as of each renewal of such Base
Rate Borrowing Tranche in accordance with Section 3.2.1. The Margin with respect
to each Base Rate Borrowing Tranche shall be determined and redetermined from
time to time in accordance with Section 3.2.1.
“Base Rate Borrowing Tranche” shall mean any Borrowing Tranche which accrues
interest at the Base Rate.
“Benefit Arrangement” shall mean at any time an “employee benefit plan,” within
the meaning of Section 3(3) of ERISA, including without limitation a Pension
Plan or a Multiemployer Plan and which is maintained, sponsored or otherwise
contributed to by any member of the ERISA Group.
“Borrower” shall mean the entity(ies) defined as Borrower in the Recitals
together with any Proposed Borrower that joins in this Agreement pursuant to the
terms and conditions of Section 2.9.2.2.
“Borrower’s Knowledge” shall mean the knowledge of: (a) any officer or employee
of Borrower, (b) any officer of Sponsor or Guarantor, (c) any officer of any
holder of the membership or other equity interest in Borrower, and/or (d) any
officer of any Affiliate that manages or operates any of the Collateral Pool
Properties.
“Borrowing Date” shall mean, with respect to any Borrowing Tranche, the date of
borrowing or renewal, as the case may be, which shall be a Business Day or, in
the case of a renewal which would otherwise fall on a day other than a Business
Day, the first Business Day thereafter.
“Borrowing Tranche” shall mean each advance at the Base Rate hereunder having a
particular Interest Period outstanding at any one time, and all advances at the
Prime Rate. Two (2) or more Borrowing Tranches accruing interest at a Base Rate
may be combined to form a single Borrowing Tranche (a) with the same Interest
Period without a payment of any penalty or fee in the event such two (2) or more
Borrowing Tranches mature and are renewed at the same time with the same
Interest Period or (b) in the event two (2) or more Borrowing Tranches mature at
different times, with payment of the applicable Accrued Interest if one (1) or
more Borrowing Tranches are advanced or prepaid and at the request of the
Borrower then combined with one (1) or more other Borrowing Tranches with the
same Interest Period. For all purposes hereunder, all Prime Rate fundings
permitted or required hereunder shall be aggregated and deemed a single
Borrowing Tranche.

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“Business Day” shall mean any day other than (i) a Saturday or Sunday or a legal
holiday on which either Lender or Servicer is closed for business, and (ii) in
connection with any Loan Request or Renewal Request for a Base Rate Borrowing
Tranche which will accrue interest in part based on the LIBOR Index Rate, any
day in which business is not carried on in the London interbank market.
“Closing Date” shall mean the first date on which both of the following
requirements are met: (i) this Agreement has been fully executed and (ii) the
first advance is made by Lender pursuant to this Agreement. The closing shall
take place on the Closing Date at such time and place as the parties agree.
“Collateral” shall mean the Collateral Pool Properties, and all other property
of Borrower on which first priority liens and security interests have been
granted for the benefit of Lender to secure the Loan and all other obligations
of Borrower under the Collateral Pool Property Documents.
“Collateral Pool” and “Collateral Pool Properties” shall mean the Mortgaged
Property or Mortgaged Properties, as the case may be, as set forth in Schedule
1.1(A), together with any Mortgaged Properties which have been added to the
Collateral Pool and less any Mortgaged Properties which have been released from
the Collateral Pool hereunder. Schedule 1.1(A) shall be deemed amended each time
a Mortgaged Property is added to the Collateral Pool or released from the
Collateral Pool in accordance with the terms of this Agreement. As a condition
precedent to the addition of a Mortgaged Property to the Collateral Pool, such
Mortgaged Property shall be acceptable to Lender in its sole discretion, fully
constructed and shall have received all final certificates of occupancy.
“Collateral Pool Property Documents” shall mean the Lender’s then current
versions of the Revolving Credit Note, Loan Agreements, Security Instruments,
guaranties, indemnities, O&M Programs, and any other documents now or in the
future executed (or, in the case of a UCC financing statement, authorized) by
Borrower, any Guarantor or any Affiliate of Borrower or Guarantor in connection
with the Loan or the Collateral, as such documents may be amended from time to
time. The Collateral Pool Property Documents shall include, but not be limited
to, those documents set forth in Schedule 1.1(B). To the extent a Borrower or
Proposed Borrower shall execute a Loan Agreement or Security Instrument after
the date hereof, such documents will include any previously negotiated changes
approved by Lender to the extent determined to be applicable by Lender in its
reasonable discretion.
“Commitment” or “Loan” shall mean Two Hundred Million and NO/100 Dollars
($200,000,000) as of the Closing Date, subject to increase as provided in
Section 2.1.2 hereof and contraction as provided in Section 2.1.3 hereof.
“Commitment Fee” shall have the meaning set forth in Section 2.4.5.

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“Contraction Option Date” shall mean each date that the Commitment is decreased
pursuant to Section 2.1.3.
“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.
“Delivery Date” shall have the meaning set forth in Section 7.3
“Dollar”, “U.S. Dollars” and the symbol $ shall mean lawful money of the United
States of America.
“Early Termination Fee” shall have the meaning set forth in Section 2.13.4.
“ERISA” shall mean the Employee Retirement Income Security Act of 1974, as the
same may be amended or supplemented from time to time, and any successor statute
of similar import, and the rules and regulations thereunder, as from time to
time in effect.
“ERISA Group” shall mean, at any time, Borrower and all members of a controlled
group of corporations and all trades or businesses (whether or not incorporated)
under common control and all other entities which, together with Borrower, are
treated as a single employer under Section 414 of the Internal Revenue Code.
“Event of Default” shall mean any of the events described in Section 8.1 or
otherwise referred to herein as an “Event of Default”.
“Expansion Fee” shall have the meaning set forth in Section 2.4.10.
“Expansion Option Date” shall mean each date that the Commitment is increased
pursuant to Section 2.1.2.
“Expiration Date” shall mean the earlier to occur of (i) the Maturity Date, or
(ii) the date specified by Borrower as the Expiration Date under Section 2.13.2.
“Extension Fee” shall mean Fifty Thousand and NO/100 Dollars ($50,000.00).
“Extension Option Date” shall mean the date the Scheduled Maturity Date is
extended pursuant to Section 2.2(b).
“Extension Option” shall have the meaning set forth in Section 2.2(b).

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“Facility Debt Service” shall mean, for the purposes of this Agreement, the sum
of (i) the interest due on the Revolving Credit Note, including any default
interest, subject to a floor of one and one-quarter percent (1.25%) for the
LIBOR Index Rate or any other index then being used by Lender to determine the
interest rate of the Revolving Credit Note pursuant to this Agreement and (ii)
an amount equal to one hundred (100) basis points (0.010) of the then
outstanding amount of such Revolving Credit Note, but exclusive of any voluntary
or mandatory principal prepayments allowed or required hereunder. Facility Debt
Service shall be annualized at the time of Lender’s determination based on the
interest rates then accruing under all outstanding Borrowing Tranches,
notwithstanding the duration of any Interest Period. Facility Debt Service shall
be recalculated (a) as of each Loan Request, (b) as of each Renewal Request, or
deemed renewal under Section 3.3.3, (c) on or about the date of each Valuation
performed in accordance with Section 2.12, (d) as of each addition, substitution
or release of a property to or from the Collateral Pool, (e) as of each
repayment of any principal portion of the Outstanding Borrowing Tranche, (f) as
of the exercise of the Extension Option, (g) as of the Expansion Option Date,
and (h) upon the occurrence of any Material Adverse Change.
“Facility DSCR” shall mean, at the time of Lender’s determination, the then
prevailing computation of the Net Operating Income of the Collateral Pool
Properties divided by the then prevailing computation of Facility Debt Service.
“Freddie Mac” shall mean the Federal Home Loan Mortgage Corporation.
“GAAP” shall mean generally accepted accounting principles as are in effect from
time to time, subject to the provisions of Section 1.3, and applied on a
consistent basis both as to classification of items and amounts.
“Guarantor” shall mean collectively (i) Steadfast Apartment REIT, Inc., a
Maryland corporation, and (ii) any entity or individual who becomes a Guarantor
pursuant to the terms of this Agreement.
“Guaranty” shall have the meaning assigned to such term in Section 2.18 together
with all amendments, modifications, supplements or replacements thereto.
“Guide” shall have the meaning set forth in Section 7.3.
“ICE” means ICE Benchmark Administration Limited.
“Indebtedness” shall mean at any time and from time to time the principal amount
of the Revolving Credit Note then outstanding, interest thereon, and any other
amounts due under the Revolving Credit Note, this Agreement, the Loan
Agreement(s), Security Instrument(s) or any other Loan Document, including,
without limitation, prepayment premiums, Accrued Interest, Unused

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Commitment Fees, Extension Fees, other fees due hereunder or thereunder, late
charges, default interest, and advances to protect the security of any Security
Instrument under Section 7 of such Security Instrument(s).
“Initial Market Value” shall mean the Market Value of any Mortgaged Property as
determined by Lender based on Lender’s then current underwriting policies as of
the date the same is included in the Collateral Pool pursuant to the provisions
hereof. The Initial Market Value of the Collateral Pool Properties is shown at
Schedule 1.1(A). The Lender shall update Schedule 1.1(A) or otherwise confirm
Initial Market Value in writing as of the date the same is included in the
Collateral Pool pursuant to the provisions hereof.
“Interest Period” shall have the meaning assigned to such term in Section 3.3.
“Internal Revenue Code” shall mean the Internal Revenue Code of 1986, as the
same may be amended or supplemented from time to time, and any successor statute
of similar import, and the rules and regulations thereunder, as from time to
time in effect.
“Law” shall mean any law (including common law), constitution, statute, treaty,
regulation, rule, ordinance, final issued opinion, binding release, ruling,
order, injunction, writ, or decree of any Official Body.
“Lender” shall mean at any time and from time to time, the entity that is the
holder of the Revolving Credit Note, provided, that Lender may in its sole
discretion designate Servicer to perform some or all of Lender’s obligations
under this Agreement, the Revolving Credit Note and the other Loan Documents.
PNC National Bank, a national banking association, the initial Lender, intends
to sell the Revolving Credit Note to Freddie Mac and assign all of its interests
in this Agreement and the other Loan Documents to Freddie Mac subsequent to the
Closing Date, provided the Collateral Pool Properties serve as Collateral for
the Loan as of the date of said assignment.
“LIBOR Index” means ICE’s one (1) or three (3) month, as applicable LIBOR rate
for United States Dollar deposits, as displayed on the LIBOR Index page used to
establish the LIBOR Index 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.

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“LIBOR Index Rate” means for any Interest Period with respect to any Borrowing
Tranche the rate of Interest on ICE’s LIBOR rate for the LIBOR Index released by
ICE the second Business Day preceding the first day of such applicable Interest
Period, as such LIBOR rate is displayed on the LIBOR Index Page; provided
however, that at any time the LIBOR Index Rate is less than zero, the LIBOR
Index Rate shall be deemed zero for all purposes of the Revolving Credit Note
and this Agreement.
“Lien” shall mean any Security Instrument, pledge, lien, security interest,
charge or other encumbrance or security arrangement of any nature whatsoever,
whether voluntarily or involuntarily given, including any conditional sale or
title retention arrangement, and any assignment, deposit arrangement or lease
intended as, or having the effect of, security and any filed financing statement
or other notice of any of the foregoing that legally creates a lien or other
encumbrance at the time of filing.
“Liquidity” shall have the meaning set forth in Section 2.18.
“Loan Agreement” shall mean the Multifamily Loan and Security Agreement executed
by the applicable Borrower in connection with each Borrowing Tranche.
“Loan Document” or “Loan Documents” shall mean any or all of this Agreement, the
Revolving Credit Note, the Collateral Pool Property Documents and any other
instruments, certificates or documents executed by Borrower or any Affiliate of
Borrower now or hereafter delivered hereunder or thereunder or in connection
herewith or therewith, as the same may be supplemented or amended from time to
time in accordance herewith or therewith.
“Loan Request” shall have the meaning set forth in Section 2.5.
“Lowest Margin” shall mean the applicable Margin for a Facility DSCR greater
than or equal to 1.85:1.00 as set forth in Schedule 3.2.
“LTV Ratio” shall mean the product, expressed as a percentage, determined by
dividing the Outstanding Borrowing Tranches by the aggregate of the then current
Market Values of the Collateral Pool Properties exclusive of any voluntary or
mandatory principal prepayments allowed or required hereunder. The LTV Ratio
shall be recalculated based on Lender’s then current underwriting policies
consistently applied (a) as of each Loan Request, (b) as of each Renewal
Request, or deemed renewal under Section 3.3.3, (c) on or about the date of each
Valuation performed in accordance with Section 2.12, (d) as of each addition,
substitution or release of a property to or from the Collateral Pool, (e) as of
each repayment of any principal portion of the Outstanding Borrowing Tranches,
(f) as of the exercise of the Extension Option, (g) as of the Expansion Option
Date, and (h) upon the occurrence of any Material Adverse Change.

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“Margin” shall mean with respect to a Borrowing Tranche, the sum of the Net
Spread and the Servicing Spread.
“Market Value” shall mean as to each individual Mortgaged Property, the Initial
Market Value of such property, in each case as such Market Value may be
subsequently increased or decreased in accordance with the terms and conditions
of this Agreement; provided, that, with respect to such Mortgaged Properties
acquired or developed within twelve (12) months prior to the date such Mortgaged
Property is added to the Collateral Pool, the Initial Market Value shall not
exceed the sum of (i) the purchase price paid by Borrower (or an Affiliate) for
such Mortgaged Property, (ii) the capital expenditures paid by Borrower (or an
Affiliate) for such Mortgaged Property during such twelve (12) month period,
(iii) the acquisition costs (not to exceed three percent (3%) of the purchase
price paid by Borrower (or an Affiliate)) paid by Borrower (or an Affiliate) in
connection with the purchase of such Collateral Pool Property and (iv) any
escrows held by or on behalf of Lender on account of capital expenditures (i.e.
replacement reserves or repair escrows) for such Mortgaged Property; provided,
further, that Lender may agree, in its sole discretion, to a Borrower’s written
request to limit Lender’s recovery from a Mortgaged Property to a certain dollar
amount due to recording tax considerations in a particular Property Jurisdiction
(which limitation shall be memorialized in the applicable Security Instrument),
in which event the Market Value for such Mortgaged Property shall never exceed
such limited recovery amount.
“Material Adverse Change” shall mean any set of circumstances or events which,
in Lender’s reasonable discretion, would have or is then reasonably expected to
have a material adverse effect on (i) the validity or enforceability of this
Agreement or the other Loan Documents taken as a whole, (ii) the ability of
Borrower (in the aggregate) to duly perform its Obligations, (iii) the ability
of Lender to enforce its legal remedies pursuant to this Agreement or the other
Loan Documents taken as a whole, including, without limitation, by realizing
upon any Collateral or any guaranty, (iv) the financial condition of Borrower
(in the aggregate) or any Guarantor, or (v) the financial performance or Market
Value of any Mortgaged Property.
“Maturity Date” shall mean, the earlier of (i) the Scheduled Maturity Date and
(ii) the date on which the unpaid principal balance of the Revolving Credit Note
becomes due and payable by acceleration or otherwise pursuant to this Agreement
or any Loan Document or the exercise by Lender of any right or remedy under this
Agreement or any Loan Document to accelerate the stated Maturity Date.
“Maximum Facility Available” shall mean, at the time of determination, the
maximum amount which Borrower may borrow under this Agreement without violating
the Sublimits set forth in Section 2.5.3.
“Maximum LTV Ratio” shall mean seventy-five percent (75%).

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“Minimum Expansion Amount” shall have the meaning set forth in Section 2.1.
“Minimum Net Worth” shall have the meaning as set forth in Section 2.18.
“Minimum Net Worth Requirement” shall have the meaning set forth in Section
2.18.
“Month” shall mean the appropriate calendar month.
“Monthly Payment Statement” shall have the meaning set forth in Section 4.2.
“Mortgaged Property” shall have the definition set forth in the applicable Loan
Agreement.
“Multiemployer Plan” shall mean any employee benefit plan which is a
“multiemployer plan” within the meaning of Section 4001(a)(3) of ERISA and to
which Borrower or any member of the ERISA Group is then making or accruing an
obligation to make contributions or, within the preceding five (5) Pension Plan
years, has made or had an obligation to make such contributions.
“Net Operating Income” shall mean an annualized dollar amount, as determined by
Lender in its sole discretion in accordance with Lender’s then applicable
underwriting standards, which is equal to all income from the operations of the
Collateral Pool Properties that is available for repayment of debt and return of
equity after deducting for economic vacancy and all expenses (exclusive of debt
service on account of the Loan). Net Operating Income shall be calculated by
Lender for each individual Mortgaged Property as of the Closing Date and
thereafter on or about the date of each Valuation performed in accordance with
Section 2.12, in accordance with Lender’s then current methodology, consistently
applied, excluding from such calculation expenses from depreciation,
amortization, interest expenses, non-recurring items and capital expenses, but
including in such calculation an assumed capital expense reserve in an amount
consistent with Lender’s then current requirements for such capital reserves. In
addition, upon the addition, substitution or release of any real property in the
Collateral Pool pursuant to the provisions hereof, Lender shall redetermine Net
Operating Income for the Collateral Pool in the following manner: (i) in the
event of an addition of a real property to the Collateral Pool, Lender shall add
the Net Operating Income of the real property added to the Collateral Pool to
the most recent determination of Net Operating Income for the existing
Collateral Pool; (ii) in the event of a release of a real property from the
Collateral Pool, Lender shall subtract the Net Operating Income of the real
property released from the Collateral Pool from the most recent determination of
Net Operating Income for the Collateral Pool; or (iii) in the event of a
substitution of a real property in the Collateral Pool, Lender shall (x) add the
Net Operating Income of the real property added to in the Collateral Pool to the
most recent determination of Net Operating Income for the existing Collateral
Pool and (y) subtract the Net Operating Income of the real property released
from the Collateral Pool from the most recent determination of Net Operating
Income for the Collateral Pool.

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“Net Spread” shall have the meaning set forth in Section 2.4.6.2 with respect to
any Borrowing Tranche hereunder.
“Notice” shall have the meaning set forth in Section 9.8.
“O&M Programs” shall mean a written program of operations and maintenance for a
Mortgaged Property approved in writing by Lender.
“Obligation” shall mean any obligation or liability of Borrower to Lender,
howsoever created, arising or evidenced, whether direct or indirect, absolute or
contingent, now or hereafter existing, or due or to become due, under or in
connection with this Agreement, the Revolving Credit Note or any other Loan
Document, excluding any Permanent Loan or any other liability of Borrower to
Lender not created under this Agreement, the Revolving Credit Note or the other
Loan Documents.
“Official Body” shall mean any national, federal, state, local or other
government or political subdivision or any agency, authority, bureau,
commission, department or instrumentality of either, or any court, tribunal,
grand jury or arbitrator, in each case whether foreign or domestic, to the
extent having jurisdiction over the Mortgaged Property, Borrower, Guarantor, the
Loan or the Lender as the case may be.
“Outstanding Borrowing Tranches” shall mean the sum of all Borrowing Tranches
outstanding at any one time.
“Partial Termination Fee” shall have the meaning set forth in Section 2.4.8.
“Payment Date” shall have the meaning set forth in Section 4.2.
“PBGC” shall mean the Pension Benefit Guaranty Corporation established pursuant
to Subtitle A of Title IV of ERISA or any successor.
“Pension Plan” shall mean at any time an employee pension benefit plan which is
covered by Title IV of ERISA or is subject to the minimum funding standards
under Section 412 of the Internal Revenue Code and either (i) is maintained by
any member of the ERISA Group for employees of any member of the ERISA Group or
(ii) has at any time within the preceding five (5) years been maintained by any
entity which was at such time a member of the ERISA Group for employees of any
entity which was at such time a member of the ERISA Group.
“Permanent Loan” shall have the meaning set forth in Section 2.15.1.
“Permanent Loan Collateral” shall have the meaning set forth in Section 2.15.1.

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“Permitted Exceptions” shall mean those title exceptions approved by Lender on
Lender’s title insurance policy.
“Potential Default” shall mean any event or condition which, with the passage of
time, the giving of notice, or a determination by Lender, or any combination of
the foregoing, would constitute an Event of Default.
“Prime Rate” shall mean the rate of interest per annum established on the first
day of each Month during the term hereof and published in The Wall Street
Journal as the prime rate, or any comparable publication reasonably selected by
Lender in the event The Wall Street Journal no longer publishes the prime rate,
plus the applicable Margin.
“Prime Rate Borrowing Tranche” shall mean all Prime Rate fundings in the
aggregate which accrue interest at the Prime Rate. Notwithstanding anything to
the contrary contained herein, no Prime Rate Borrowing Tranches will be
permitted hereunder except as may be required pursuant to Sections 3.3.2 or 3.4.
“Prohibited Transaction” shall mean any prohibited transaction as defined in
Section 4975 of the Internal Revenue Code or Section 406 of ERISA for which
neither an individual nor a class exemption has been issued by the United States
Department of Labor.
“Proposed Borrower” shall mean a Single Asset Entity that is an Affiliate of
Borrower and is the owner of one or more properties which have been proposed to
be included in the Collateral Pool, pursuant to the terms hereof.
“Renewal Date” shall have the meaning set forth in Section 3.3.3.
“Renewal Request” shall have the meaning set forth in Section 3.3.3.
“Reportable Event” shall mean a reportable event described in Section 4043 of
ERISA and regulations thereunder with respect to a Pension Plan or Multiemployer
Plan.
“Required Financial Statements” shall have the meaning set forth in Section 7.3.
“Revolving Credit Note” shall mean the Multifamily Revolving Credit Note of
Borrower, in the amount of Three Hundred Fifty Million and NO/100 Dollars
($350,000,000.00), which evidences the Loan, together with all amendments,
increases, extensions, renewals, replacements, refinancings or refundings
thereof in whole or in part.
“Scheduled Maturity Date” shall mean September, 1, 2020 unless otherwise
extended pursuant to Section 2.2(b) hereof.

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“Seasoning Fee” shall mean the Seasoning Spread times the applicable Mortgaged
Property’s Allocated Loan Amount.
“Seasoning Period” shall have the meaning set forth in the definition of
“Seasoning Spread.”
“Seasoning Spread” shall mean the following, as applicable:
Seasoning Spread (Basis Points)
Seasoning Period
25 basis points (0.0025)
The second anniversary of the date the applicable Mortgaged Property was added
to the Collateral Pool until, but not including, the third anniversary date (the
“Second Seasoning Period”).
50 basis points (0.0050)
The third anniversary of the date the applicable Mortgaged Property was added to
the Collateral Pool until, but not including, the fourth anniversary date (the
“Third Seasoning Period”).
75 basis points (0.0075)
The fourth anniversary of the date the applicable Mortgaged Property was added
to the Collateral Pool until, but not including, the fifth anniversary date (the
“Fourth Seasoning Period”).
100 basis points (0.0100)
The fifth anniversary of the date the applicable Mortgaged Property was added to
the Collateral Pool until, but not including, the sixth anniversary date (the
“Fifth Seasoning Period”).

“Securitized Product” shall mean Freddie Mac’s then current product for
financing a performing loan that is intended to be securitized in a
securitization where the most subordinate debt component of such securitization
is sold to a party unrelated to Freddie Mac.
“Seismic Report Fee” shall mean a non-refundable fee equal to Lender’s and
Servicer’s reasonable out-of-pocket costs and expenses incurred in obtaining a
seismic report with respect to any real property for which Lender, in its
reasonable discretion, deems such report necessary. Lender currently requires a
Seismic Report Fee of Five Hundred and NO/100 Dollars ($500) for each real
property located in the states of California, Washington and Oregon.
“Servicer” shall mean PNC Bank, National Association, a national banking
association, or any subsequent independent contractor appointed by Lender, at
Lender’s sole cost and expense, to administer the Loan and the Loan Documents or
otherwise perform certain functions in connection therewith under the terms of a
Servicing Agreement. Pursuant to the terms of any Servicing Agreement, Lender
may designate Servicer to perform some or all of Lender’s obligations under this
Agreement, the Revolving Credit Note and the other Loan Documents.

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“Servicing Agreement” shall mean any agreement between Lender and an independent
contractor pursuant to which Lender appoints said independent contractor as
Servicer under this Agreement, the Revolving Credit Note and the other Loan
Documents.
“Servicing Spread” shall mean five basis points (0.0005) times the Outstanding
Borrowing Tranches.
“Single Asset Entity” shall mean an entity which conforms to the requirements of
Section 6.13 of the Loan Agreement. Notwithstanding the foregoing, a Single
Asset Entity may own one or more of the Collateral Pool Properties so long as
each Mortgaged Property is subject to the Liens created pursuant to the Loan
Documents.
“Solvent” shall mean, with respect to any Person on a particular date, that on
such date (i) the fair value of the assets of such Person is greater than the
total amount of liabilities, including, without limitation, contingent
liabilities, of such Person, (ii) the present fair saleable value of the assets
of such Person is not less than the amount that will be required to pay the
probable liability of such Person on its debts as they become absolute and
matured, (iii) such Person is able to realize upon its assets and pay its debts
and other liabilities, contingent obligations and other commitments as they
mature in the normal course of business, (iv) such Person does not intend to,
and does not believe that it will, incur debts or liabilities beyond such
Person’s ability to pay as such debts and liabilities mature, and (v) such
Person is not engaged in business or a transaction, and is not about to engage
in business or a transaction, for which such Person’s property would constitute
unreasonably small capital after giving due consideration to the prevailing
practice in the industry in which such Person is engaged. In computing the
amount of contingent liabilities at any time, it is intended that such
liabilities will be computed at the amount which, in light of all the facts and
circumstances existing at such time, represents the amount that can reasonably
be expected to become an actual or matured liability of such Person after giving
effect to any rights of contribution, subrogation or indemnification of such
Person.
“Sponsor” shall mean collectively (i) Steadfast Apartment REIT, Inc., a Maryland
corporation. and (ii) any entity or individual which becomes a sponsor.
“ Sponsor Liquidity Event” shall mean a liquidation of the Sponsor which shall
include a sale or merger of the Sponsor into another entity or the Sponsor’s
public issuance of common stock, convertible debt, equity or other similar
securities or a merger of the Sponsor’s Advisor into the Sponsor, dissolution or
winding up of Sponsor or Borrower or any plan of liquidation related to the
Sponsor or Borrower adopted directly or indirectly by Sponsor’s board of
directors (each an “Event”) of which any Event must be approved by Lender prior
to the occurrence of such Event.
“Sublimits” shall have the meaning set forth in Section 2.5.3.

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“Underwriting Materials” shall mean all materials required by Lender pursuant to
Lender’s then current loan underwriting requirements including, without
limitation, a current appraisal acceptable to Lender for the proposed Mortgaged
Property(ies).
“Unused Capacity Fee” shall have the meaning set forth in Section 2.4.4.
“Unused Capacity Fee Effective Date” shall have the meaning set forth in Section
2.4.4.
“Unused Commitment Fee” shall have the meaning set forth in Section 2.4.3.
“Valuation” shall have the meaning set forth in Section 2.12.
“Valuation Letter” shall have the meaning set forth in Section 2.4.4.
1.2.    Construction.
Unless the context of this Agreement otherwise clearly requires, the following
rules of construction shall apply to this Agreement and each of the other Loan
Documents.
1.2.1.    Number; Inclusion.
References to the plural include the singular, the plural, the part and the
whole; “or” has the inclusive meaning represented by the phrase “and/or”, and
“including” has the meaning represented by the phrase “including without
limitation”; each gender shall include any other gender;
1.2.2.    Determination.
References to “determination” of or by Lender shall be deemed to include
good-faith estimates by Lender (in the case of quantitative determinations) and
good-faith beliefs by Lender (in the case of qualitative determinations) and
such determinations shall be conclusive absent manifest error;
1.2.3.    Lender’s Discretion and Consent; References to Lender’s Requirements.
Whenever Lender is granted the right herein to act in its sole discretion or to
grant or withhold consent, such right shall be exercised in good faith, and
whenever a reference is made to “Lender’s then current requirements”, “Lender’s
then current programs” or the like, such reference shall be deemed to mean such
requirements, programs and the like as are then standard in the secondary
multifamily mortgage industry, as such standards are generally reflected in the
then current version of the Freddie Mac Multifamily Seller/Servicer Guide.
1.2.4.    Documents Taken as a Whole.

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The words “hereof,” “herein,” “hereunder,” “hereto” and similar terms in this
Agreement or any other Loan Document refer to this Agreement or such other Loan
Document as a whole and not to any particular provision of this Agreement or
such other Loan Document;
1.2.5.    Headings.
The section and other headings contained in this Agreement or such other Loan
Document and the Table of Contents preceding this Agreement or such other Loan
Document are for reference purposes only and shall not control or affect the
construction of this Agreement or such other Loan Document or the interpretation
thereof in any respect;
1.2.6.    Implied References to this Agreement.
Article, section, subsection, clause, and schedule references are to this
Agreement unless otherwise specified, and schedules attached hereto are
incorporated herein by this reference;
1.2.7.    Persons.
Reference to any Person includes such Person’s successors and assigns (but only
if such successors and assigns are permitted by this Agreement or such other
Loan Document, as the case may be), and reference to a Person in a particular
capacity excludes such Person in any other capacity;
1.2.8.    Modifications to Documents.
Reference to any agreement (including this Agreement and any other Loan Document
together with any schedules and exhibits hereto or thereto), document or
instrument means such agreement, document or instrument as amended, modified,
replaced, substituted for, superseded or restated;
1.2.9.    From, To and Through.
Relative to the determination of any period of time, “from” means “from and
including”, “to” means “to but excluding”, and “through” means “through and
including”; and
1.2.10.    Conflicts with Other Loan Documents.
In the event of any conflict between the terms and provisions of this Agreement
and any other Loan Document, the terms and provisions of this Agreement shall
prevail.
1.3.    Accounting Principles.
Except as otherwise provided in this Agreement, all computations and
determinations as to accounting or financial matters and all financial
statements to be delivered pursuant to this Agreement shall be made and prepared
in accordance with GAAP (including principles of

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consolidation where appropriate) and all accounting or financial terms shall
have the meanings ascribed to such terms by GAAP. In the event of any change
after the date hereof in GAAP, and if such change would result in the inability
to determine compliance with any financial covenants set forth herein, then the
parties hereto agree to endeavor, in good faith, to agree upon an amendment to
this Agreement that would adjust such financial covenants in a manner that would
not affect the substance thereof, but would allow compliance therewith to be
determined in accordance with Borrower’s financial statements at that time.
2.    REVOLVING CREDIT FACILITY
2.1.    Revolving Credit Commitment.
2.1.1.    Revolving Line of Credit.
Subject to the terms and conditions hereof and relying upon the representations
and warranties herein set forth, Lender agrees to advance funds to Borrower at
any time or from time to time during the term hereof, provided that after giving
effect to any particular advance the Outstanding Borrowing Tranches outstanding
at any one time shall not exceed the amount which would be permitted to be
outstanding under the Sublimits. Within such limits of time and amount and
subject to the other provisions of this Agreement, Borrower may borrow, repay
and reborrow pursuant to this Section 2.1. All advances under this Agreement and
the Revolving Credit Note constitute a single indebtedness, and all of the
Collateral is security for the Revolving Credit Note and for the performance of
all of the Obligations.
2.1.2.    Expansion Option.
At any time after January 1, 2016 but prior to the twelve (12) months
immediately preceding the Scheduled Maturity Date, Borrower shall have the right
to increase the Commitment as described below, up to a maximum of Three Hundred
Fifty Million and NO/100 Dollars ($350,000,000) provided that (i) neither a
Potential Default or Event of Default under this Agreement shall have occurred
and then be continuing at the time of such request to increase and (ii)
Guarantor complies with the Minimum Net Worth and Liquidity Requirements set
forth in Section 2.18 at the time of such request to increase. Borrower shall
exercise such right by (i) delivering to Lender (A) sixty (60) days prior
written notice of its intent to increase the Commitment, which notice shall be
accompanied by (B) a transaction fee as provided in Section 2.4.2, and (C) at
such closing, all reasonable costs and expenses that Lender and Servicer incur
in connection with such increase, including, but not limited to, Attorneys’ Fees
and Costs and (ii) by executing and where appropriate acknowledging (A)
amendments to this Agreement, the Revolving Credit Note and any of the other
Loan Documents, in form and substance reasonably acceptable to Lender, as Lender
deems reasonably necessary to evidence the increase in the Commitment and to
increase the amount of coverage under Lender’s existing title insurance
policies, and (B) any other amendments or

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agreements deemed reasonably necessary by Lender. All amendments referred to in
clause (ii)(A) of the preceding sentence shall be prepared by Lender’s counsel
and delivered to Borrower within a reasonable time of Borrower’s notice to
Lender under clause (i) of the preceding sentence. Upon Borrower’s compliance
with all of the provisions of items (i) and (ii) above, the Commitment shall be
increased to the amount selected by Borrower, but not more than Three Hundred
Fifty Million and NO/100 Dollars ($350,000,000). The minimum amount of each
increase in the Commitment requested by Borrower pursuant to this Section shall
be Seventy-five Million and NO/100 Dollars ($75,000,000) (“Minimum Expansion
Amount”), provided however, if the first expansion option is exercised in an
amount greater than the Minimum Expansion Amount, the second expansion option
may be exercised in an amount which would increase the Commitment to Three
Hundred Fifty Million and NO/100 Dollars ($350,000,000).
2.1.3.    Contraction Option.
Borrower shall have the right to decrease the Commitment as described below;
provided such decrease of the Commitment is a result of either Borrower’s (i)
sale of a Mortgaged Property to a third party as reasonably determined by
Lender; or (ii) refinancing of the Mortgaged Property in connection with a
Permanent Loan pursuant to the provisions of Section 2.15. Borrower shall
exercise such right by (i) delivering to Lender (a) sixty (60) days prior
written notice of its intent to decrease the Commitment, which notice shall be
accompanied by (b) the Partial Termination Fee as set forth in Section 2.10, (c)
all reasonable costs and expenses that Lender and Servicer incur in connection
with such decrease, including, but not limited to, Attorneys’ Fees and Costs and
(ii) by executing and where appropriate acknowledging (a) amendments to this
Agreement, the Revolving Credit Note and any of the other Loan Documents, in
form and substance reasonably acceptable to Lender, as Lender deems reasonably
necessary to evidence the decrease in the Commitment, and (b) any other
amendments or agreements deemed reasonably necessary by Lender. All amendments
referred to in clause (ii)(a) of the preceding sentence shall be prepared by
Lender’s counsel and delivered to Borrower within a reasonable time of
Borrower’s notice to Lender under clause (i) of the preceding sentence. Upon
Borrower’s compliance with all of the provisions of items (i) and (ii) above,
the Commitment shall be decreased by an amount equal to the Allocated Loan
Amount of the released Mortgaged Property in the event of a third party sale, or
decreased by the amount of the Permanent Loan in the event of a refinance
pursuant to the provisions of Section 2.15. Once Borrower has elected to
decrease the Commitment any unexercised expansion of the Commitment as set forth
in Section 2.1.2 shall be deemed null and void and of no further force and
effect. If Borrower elects not to decrease the Commitment, then in the event of
an early termination pursuant to Section 2.13, Lender shall calculate the Early
Termination Fee as set forth in Section 2.13.4.
2.2.    (a)    Term. The term of the Loan shall commence on the Closing Date and
shall terminate on the Scheduled Maturity Date unless otherwise terminated
earlier by Borrower, pursuant to and subject to the provisions of Section 2.13
hereof, or by Lender following an Event to Default,

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pursuant to the provisions hereof. The entire Indebtedness shall be due and
payable on the Expiration Date without prepayment penalty or fee (other than
accrued and unpaid Unused Commitment Fees due hereunder).
(b)    Provided the following conditions are met and subject to Lender’s
approval, in its sole discretion, Borrower shall have one (1) option to extend
the Scheduled Maturity Date for an additional period of one (1) year (the
“Extension Option”):
(i)    Borrower shall provide written Notice to Lender at least sixty (60) days,
but no more than ninety (90) days, prior to the initial Scheduled Maturity Date,
which Notice shall be supplemented by such additional information as Lender may
reasonably require to determine, in its sole discretion, whether the conditions
set forth in this Section 2.2(b) have been satisfied;
(ii)    Borrower shall pay (x) the Extension Fee to Lender together with the
Notice delivered pursuant to clause (i) above (provided, that if Borrower elects
to terminate the Extension Option prior to the initial Scheduled Maturity Date
for any reason, Lender shall reimburse Borrower for the Extension Fee) and (y)
all of Lender’s and Servicer’s reasonable costs and expenses (including, without
limitation, Attorneys’ Fees and Costs) incurred in connection therewith prior to
the initial Scheduled Maturity Date;
(iii)    Borrower shall provide to Lender all documents in connection therewith
as Lender shall require, in its reasonable discretion;
(iv)    no Potential Default or Event of Default shall have occurred under this
Agreement or any of the Loan Documents; and
(v)    Borrower shall be in compliance with the Sublimits.
(c)    If the Extension Option is exercised pursuant to Section 2.2(b) hereof,
the Scheduled Maturity Date shall be September 1, 2021, and the Net Spread
applicable for any Borrowing Tranche shall be redetermined by Lender in its sole
discretion in accordance with Section 2.4.6.2 hereof. Lender and Borrower shall
evidence the new Scheduled Maturity Date and applicable Net Spread pursuant to
this Section 2.2(c) by executing a confirmation substantially in the form
attached hereto as Schedule 2.2.
(d)    If Borrower does not exercise the Extension Option, the entire
Indebtedness shall be payable on the initial Scheduled Maturity Date without the
payment of a prepayment penalty or fee (other than accrued and unpaid Unused
Capacity Fees or Unused Commitment Fees due hereunder).
2.3.    Nature of Lender’s Obligations with Respect to the Loan.

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Except in connection with Borrower’s cure of Sublimits violation pursuant to
Section 4.3.2, the aggregate amount of the Outstanding Borrowing Tranches
hereunder at any time shall never exceed the amount which would be permitted to
be outstanding under the Sublimits. Lender shall have no obligation to permit
more than ten (10) Borrowing Tranches to be outstanding at any one time (except
as provided in Section 2.5.3.3) or permit a Borrowing Tranche in an amount less
than Ten Million and NO/100 Dollars ($10,000,000). Lender shall have no
obligation to make any additional advance hereunder on or after the Business Day
immediately preceding the Maturity Date. In addition to the foregoing, while a
Potential Default or Event of Default exists, Lender may refuse to make any
additional advances to Borrower.
2.4.    Fees.
2.4.1.    Fees Paid Prior to the Closing Date.
Lender acknowledges that, in addition to Borrower’s obligations under Section
5.1.6, Borrower has paid to Lender, as consideration for Lender’s costs in
underwriting the transaction contemplated hereby, an Addition Fee and a Seismic
Report Fee, if and as applicable, for each Mortgaged Property described at
Schedule 1.1(A) and proposed by Borrower to be included in the Collateral Pool
on the Closing Date.
2.4.2.    Fees and Costs Due on the Closing Date.
Borrower shall pay on the Closing Date (simultaneously with the closing of the
Loan), as further consideration for Lender’s cost in underwriting the
commitment, (a) a non-refundable transaction fee, payable to Servicer, equal to
the amount of forty basis points (0.0040) times the Commitment, of which Freddie
Mac shall be entitled to receive from Servicer the amount equal to five basis
points (0.0005) times the Commitment, and (b) all reasonable out-of-pocket
costs, expenses and disbursements (including fees and expenses of counsel for
Lender and Servicer), incurred by Lender and Servicer in connection with the
negotiation and execution of this Agreement and other instruments and documents
to be delivered hereunder.
2.4.3.    Unused Commitment Fee.
Accruing from the Closing Date until the Maturity Date, Borrower shall pay to
Lender, as consideration for Lender’s commitment hereunder, a nonrefundable
unused commitment fee (the “Unused Commitment Fee”) equal to ten basis points
(0.001) per annum (computed on the basis of a year of 360 days and actual days
elapsed) on the average daily difference between the amount of (i) the
Commitment and (ii) the Maximum Facility Available. Except as otherwise provided
in connection with Borrower’s election to terminate this Agreement prior to the
Maturity Date pursuant to Section 2.13.2, in which instance all fees shall be
payable in accordance with the provisions of Section 2.13.4. All Unused
Commitment Fees shall be payable monthly in arrears on each Payment Date and
shall be set forth on the applicable Monthly Payment Statement. Unused
Commitment

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Fee payments which cover less than one (1) month shall be prorated based on the
actual number of days elapsed. Any accrued but unpaid Unused Commitment Fees
shall also be due and payable on the Expiration Date.
2.4.4.    Unused Capacity Fee.
Borrower shall pay to Lender, as further consideration for Lender’s commitment
hereunder, a nonrefundable unused capacity fee (the “Unused Capacity Fee”) equal
to one hundred basis points (0.01)(computed on the basis of a three hundred
sixty (360) day year and actual days elapsed) times the average daily difference
between the amount of the (i) Maximum Facility Available, and (ii) the
Outstanding Borrowing Tranches. The Unused Capacity Fee shall accrue from the
Closing Date to the Expiration Date, shall be computed for each Month during the
term of this Agreement and shall be payable, if at all, in arrears on each
Payment Date, provided that any Unused Capacity Fee due in the Month in which
the Expiration Date falls shall be due and payable on the Expiration Date.
Unused Capacity Fee payments which cover a period of less than one (1) Month
shall be prorated based on the actual number of days elapsed. Prior to the
assessment of any Unused Capacity Fee, except an assessment resulting from
unused capacity in connection with Borrower’s pay down of the Indebtedness,
Lender shall deliver to Servicer a Valuation letter pursuant to Section 2.12
(“Valuation Letter”). The Valuation Letter shall include (i) the Net Operating
Income and Market Value for each Collateral Pool Property; and (ii) an effective
date on which the assessment for the Unused Capacity Fee shall commence (“Unused
Capacity Fee Effective Date”). The Unused Capacity Fee Effective Date shall be
twelve (12) Business Days after the date of the Valuation Letter.
2.4.5.    Commitment Fees. The commitment fee (the “Commitment Fee”) payable to
Servicer on the Closing Date shall be equal to the amount of thirty-five basis
points (0.0035) times the Commitment as more fully set forth in Section
2.4.2(a).
2.4.6.    Margin and Net Spread.
2.4.6.1.    Intentionally Omitted.
2.4.6.2.    Borrowing Tranches. The net spread (the “Net Spread”) applicable for
any Borrowing Tranche shall be as set forth in Schedule 3.2. With respect to the
Extension Option, the Net Spread applicable for any Borrowing Tranche during
such extension period shall be determined by Lender in its sole discretion and
communicated to Borrower (provided, that Lender will communicate indicative (but
not final) Net Spreads for such extension period to Borrower at least two (2)
Business Days prior to the Scheduled Maturity Date). With respect to the
expansion option set forth in Section 2.1.2, the Net Spread applicable for any
Borrowing Tranche for such expanded amount of the Commitment shall be determined
by Lender in its sole discretion and communicated to Borrower (provided, that
Lender will communicate indicative (but not final) Net

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Spreads for such expansion to Borrower at least two (2) Business Days prior to
the Expansion Option Date and such Net Spread for such expanded amount of the
Commitment shall be blended together with the Net Spread then in effect as
determined by Lender, Lender and Borrower shall evidence any new or blended
applicable Net Spread pursuant to this Section 2.4.6.2, by executing a
confirmation substantially in the form attached hereto as Schedule 2.2.
2.4.7.    Seasoning Fee. Upon the second anniversary of the date the applicable
Mortgaged Property was added to the Collateral Pool (and upon each subsequent
anniversary thereafter) for so long as the Mortgaged Property shall remain in
the Collateral Pool, an annual Seasoning Fee will be assessed for such Mortgaged
Property. On each Payment Date during the applicable Seasoning Period,
one-twelfth (1/12th) of the applicable Seasoning Fee shall be paid in arrears on
each Payment Date beginning with the Payment Date immediately after the
applicable anniversary date and shall be set forth on the applicable Monthly
Payment Statement. Any Seasoning Fee payments which cover less than one (1)
month shall be prorated based on the actual number of days elapsed. The
applicable Seasoning Fee shall continue to be due and payable until the date on
which Lender is required to deliver its release of the applicable Mortgaged
Property pursuant to Sections 2.10, 2.13 or 2.15, as applicable. After such
date, any remaining portion of any such annual Seasoning Fee that would have
been due after the date of such release will not be due. Any accrued but unpaid
Seasoning Fees shall also be due and payable on the Expiration Date.
2.4.8.    Partial Termination Fee. In the event a Mortgaged Property is released
pursuant to Section 2.10, and not refinanced or acquisition financed, as
applicable, by a Securitized Product, Lender, in its sole discretion, may,
within one hundred twenty (120) days of such release, reduce the Commitment by
the Allocated Loan Amount and Borrower shall pay a partial termination fee
(“Partial Termination Fee”) on such Allocated Loan Amount.  The Partial
Termination Fee due and payable in the event a Mortgaged Property is released
pursuant to Section 2.10 and sold to a third party, as reasonably determined by
Lender, and not financed by a Securitized Product, shall be one percent (1.0%)
of the Allocated Loan Amount.  The Partial Termination Fee due and payable in
the event a Mortgaged Property is released pursuant to Section 2.10  and not (i)
sold to a third party, as reasonably determined by Lender; and (ii) not financed
or refinanced, as applicable, through the Securitized Product, shall be the
present value of the Lowest Margin times the Allocated Loan Amount that would
have been paid to Lender from the date of the release of the Mortgaged Property
from the Collateral Pool to the Scheduled Maturity Date, but in no event less
than one percent (1.0%) of the Allocated Loan Amount.   No Partial Termination
Fee shall be owed in the event (x) Lender or its successors is not offering the
Securitized Product; or (y) a Mortgaged Property is released pursuant to Section
2.10 and is financed or refinanced, as applicable, through the Securitized
Product, and Borrower will have the option, in its sole discretion, subject to
compliance with the terms of Section 2.1.3, to reduce the Commitment by the
amount of the financing for the Mortgaged Property refinanced through the
Securitized Product. If Borrower elects not to reduce the

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Commitment, then in the event of an early termination pursuant to Section 2.13,
Lender shall calculate the Early Termination Fee as set forth in Section 2.13.4.
2.4.9.    Addition Fee. For each Mortgaged Property added to the Collateral Pool
pursuant to Section 2.9 of this Agreement, Borrower shall pay to Servicer a
non-refundable addition fee equal to the amount of twenty basis points (0.0020)
times the Allocated Loan Amount for such Mortgaged Property and shall pay to
Lender a non-refundable addition fee equal to the amount of ten basis points
(0.0010) times the Allocated Loan Amount for such Mortgaged Property, each in
accordance with the terms of Section 2.9.3 of this Agreement (collectively, the
“Addition Fee”).
2.4.10.     Expansion Fee. Upon each Expansion Option Date, Borrower shall pay
to Servicer an expansion fee equal to thirty-five basis points (0.0035) times
the Minimum Expansion Amount (“Expansion Fee”). .
2.5.    Loan Requests.
2.5.1.    Borrower may from time to time prior to the Maturity Date request
Lender to make an advance, consistent with the Sublimits, by delivering Notice
to Servicer (a “Loan Request”) in the form attached hereto as Schedule 2.5.
Provided however that for the calendar year 2015, no advance shall occur later
than December 11, 2015. Borrower may at any time submit one (1) or more Loan
Requests; each Loan Request shall specify the items set forth on Schedule 2.5.
including, but not limited to, (i) the proposed Borrowing Date (which Borrowing
Date shall be in accordance with the requirements of Section 2.6) and (ii) the
amount of the proposed Borrowing Tranche, which shall not be less than Ten
Million and NO/100 Dollars ($10,000,000) for the addition of any Collateral Pool
Property and such lesser amount as determined by Lender in its sole discretion.
Notwithstanding anything to the contrary contained herein, (i) no Prime Rate
Borrowing Tranches will be permitted hereunder except as may be required
pursuant to Sections 3.3.2 or 3.4.
Borrower may from time to time request an increase to an existing Borrowing
Tranche by delivering to Servicer a Loan Request in the form attached hereto as
Schedule 2.5. Any request of an increase to an existing Borrowing Tranche shall
be in an amount not less than One Million and NO/100 Dollars ($1,000,000.00),
and such advance shall be made only upon Borrower’s compliance with Section
2.5.3.
In the case of a Loan Request for a Borrowing Tranche or increase of a Borrowing
Tranche, Borrower shall deliver a Loan Request, fully completed, authorized and
executed by Servicer and an Authorized Officer, indicating (a) the Interest
Period for purposes of determining the LIBOR Index Rate (or such alternative
index as may be selected by Lender in accordance with the provisions of Section
3.4) and (b) the Base Rate, including the LIBOR Index Rate (or such alternative
index as may be selected by Lender in accordance with the provisions of Section
3.4) and Margin that comprise such Base Rate.

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Notwithstanding the foregoing, any Loan Request made contemporaneously with a
request for the addition of a real property under Section 2.9 shall be subject
to the time requirements set forth in Section 2.9. Borrower may revoke any
pending but unfunded Loan Request provided that Borrower reimburses Lender and
Servicer for any reasonable costs and expenses (including Attorneys’ Fees and
Costs) incurred in connection with such Loan Request.
2.5.2.    Intentionally Omitted.
2.5.3.    Sublimits.
Notwithstanding anything to the contrary set forth herein, Borrower may borrow
hereunder only to the extent that after giving effect to such borrowing
(collectively, the “Sublimits”):
2.5.3.1.    the LTV Ratio shall not exceed the Maximum LTV Ratio;
2.5.3.2.    the Facility DSCR shall not be less than 1.45:1.00;
2.5.3.3.    the number of Borrowing Tranches outstanding shall not exceed ten
(10), unless an Expansion has occurred, in which event the number of Borrowing
Tranches shall not exceed fifteen (15) if the Commitment has been increased to
Two Hundred Seventy-Five Million and No/100 Dollars ($275,000,000.00 and shall
not exceed twenty (20) if the Commitment has been increased to Three Hundred
Fifty Million and No/100 Dollars ($350,000,000.00); and
2.5.3.4.    the aggregate amount of the Outstanding Borrowing Tranches shall not
exceed the Commitment.
Notwithstanding the foregoing, in the event either of the Sublimits set forth in
Section 2.5.3.1 or Section 2.5.3.2 above are not satisfied at any time prior to
the Expiration Date, Borrower shall comply with the provisions of Section 4.3.2.
2.6.    The Loan.
After receipt by Servicer of a Loan Request pursuant to Section 2.5.1, and
subject to the Sublimits of Section 2.5.3 and the provisions of Section 5.2,
Lender, relying on the truth and accuracy of the matters set forth in the Loan
Request (but without any obligation to inquire into the truth and accuracy of
such matters), shall fund the amount requested in such Loan Request to Borrower
in U.S. Dollars and immediately available funds on the Borrowing Date. Provided
all conditions set forth in this Agreement and the other Loan Documents are
satisfied, the Borrowing Date shall be the Business Day set forth in the Loan
Request, provided that such date is at least two (2) but not more than five (5)
Business Days after the date of the Loan Request. Lender shall fund the amounts
requested in any Loan Request by 3:00 p.m. Eastern Time on the Borrowing Date.
Notwithstanding the foregoing, any Loan Request made contemporaneously with a
request for the

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addition of a real property under Section 2.9 shall be subject to the time
requirements set forth in Section 2.9.
2.7.    The Revolving Credit Note.
The obligation of Borrower to repay the aggregate unpaid principal amount of the
Loan, together with interest thereon, shall be evidenced by the Revolving Credit
Note payable to the order of Lender.
2.8.    Use of Proceeds.
The proceeds of the Loan may be used by Borrower solely for the purpose of
carrying on a business or commercial enterprise and not for personal, family,
household or agricultural purposes.
2.9.    Additions to the Collateral Pool.
2.9.1.    Procedure for Proposing a Real Property Addition to the Collateral
Pool.
Borrower or Proposed Borrower, as the case may be, may propose to add one (1) or
more real properties to the Collateral Pool by delivering to Lender (i) a
written proposal for addition of the proposed real property(ies), (ii) an
Addition Fee for each proposed real property as and when required pursuant to
Section 2.9.3, (iii) a Seismic Report Fee, if and as applicable, for each
proposed real property, and (iv) the Underwriting Materials with respect to the
proposed real property(ies) and with respect to Proposed Borrower, if
applicable, provided that, Borrower shall utilize its best efforts to aggregate
such submission(s) relating to one or more multifamily real properties to cause
such submission(s) to constitute no more than three (3) proposals being
submitted to Lender in any one (1) Month. Upon Lender’s receipt of all fees
required hereunder and all Underwriting Materials, Lender shall notify Borrower
or Proposed Borrower of the same. The determination of whether Borrower or
Proposed Borrower has provided Lender with all Underwriting Materials shall be
in Lender’s discretion. For purposes of this Section 2.9, Borrower or Proposed
Borrower may submit a multifamily real property for addition to the Collateral
Pool, if Borrower or Proposed Borrower has a contract to purchase such real
property, provided that Borrower or Proposed Borrower consummates the purchase
of such real property on or before the date such real property is proposed to be
added to the Collateral Pool and a Borrowing Tranche must be funded with respect
thereto, concurrent with Borrower’s or Proposed Borrower’s acquisition of same
and joinder to this Agreement subject to Lender’s timely receipt of all
Underwriting Materials. Both the Addition Fee and the Seismic Report Fee, if
any, shall be deemed earned upon delivery thereof, whether or not Lender
approves or disapproves such real property for addition hereunder. Borrower or
Proposed Borrower shall pay all reasonable costs and expenses that Lender and
Servicer incur in connection with any such proposal to add a real property to
the Collateral Pool, including, but not limited to, Attorneys’ Fees and Costs
and any reasonable costs and expenses incurred with respect to third

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party reports, whether or not Lender approves or disapproves such real property
for addition hereunder. Borrower (or Proposed Borrower as applicable) or its
Affiliates shall be permitted to engage and pay directly the third-party
consultants to be retained for the required property condition reports and
environmental reports provided that (A) Lender and Servicer approve in advance
and in writing each such consultant and the scope of each such report, and (B)
each such report states that it is made for the benefit, use and reliance of
Lender and Servicer, as well as Borrower (or Proposed Borrower as applicable)
and/or its Affiliate. Notwithstanding the foregoing, only proposed Mortgaged
Properties presented by Borrower or Proposed Borrower to Servicer for
underwriting and approval pursuant to this Agreement will be eligible for
addition to the Collateral Pool.
2.9.2.    Procedure for Adding a Real Property to the Collateral Pool.
2.9.2.1.    With respect to any multifamily real property that Borrower or
Proposed Borrower, as the case may be, proposes for addition to the Collateral
Pool, Lender shall, within twenty (20) days of the date on which Lender notifies
Borrower or Proposed Borrower that it has received all Underwriting Materials,
use its best efforts to accept or reject in writing the proposed real property
on the basis of whether such proposed real property meets Lender’s then current
requirements for addition to the Collateral Pool, as determined by Lender in its
sole discretion, and in the event that Lender accepts the proposed real property
for addition to the Collateral Pool, Lender shall provide Borrower or Proposed
Borrower with a written approval letter and use its best efforts to add such
real property to the Collateral Pool within twenty (20) days of the date of such
acceptance, subject to Borrower’s or Proposed Borrower’s timely performance of
all obligations listed under Section 2.9.2.2. Each property must pass Lender’s
own assessment of earthquake risk to be included in the Collateral Pool.
Notwithstanding anything contained herein to the contrary, no real property
shall be submitted for addition unless the value of such property, as determined
by Lender, in its sole discretion, is equal to or greater than Ten Million and
NO/100 Dollars ($10,000,000). The failure of Lender to respond to Borrower’s or
Proposed Borrower’s request within such twenty (20) day period shall be deemed a
rejection by Lender of the proposal to add the real property to the Collateral
Pool. If Lender provide(s) the reason(s) for such rejection, Borrower or
Proposed Borrower shall have forty-five (45) days to cure or otherwise resolve
to the satisfaction of Lender, the objections of Lender to such proposed real
property (Lender, in its sole discretion, may require that Borrower or Proposed
Borrower provide within such forty-five (45) day cure period necessary updates
of any or all of the Underwriting Materials). If Borrower or Proposed Borrower
does not satisfy Lender’s objections, then such proposal shall be deemed
terminated (unless Lender, in its sole discretion shall opt to extend such
forty-five (45) day cure period) provided that, any such termination shall not
prevent Borrower or Proposed Borrower from subsequently resubmitting a real
property (together with all fees required hereunder and the Underwriting
Materials) for addition to the Collateral Pool, further provided that Borrower
or Proposed Borrower may not resubmit the same real property for addition to the
Collateral Pool more often than one (1) time in any twelve (12) month period
unless otherwise permitted by Lender.

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Notwithstanding anything contained in the foregoing to the contrary, under no
circumstances shall the addition of any real property increase the amount of the
Commitment.
2.9.2.2.    If and upon the date of acceptance by Lender of a multifamily real
property submitted for addition to the Collateral Pool (such acceptance to be in
writing, together with Lender’s determination of the Initial Market Value of
such real property and the Net Operating Income of such property), whether
following the initial proposal of such real property or after satisfying any
objections of Lender, such real property shall be added to the Collateral Pool,
provided that, prior to such addition (or in the instance of the documents
required under item (iii)(b) below, as soon as practicable after such addition),
no Event of Default, Potential Default or Material Adverse Change shall exist
and then be continuing and Borrower or Proposed Borrower shall (i) pay the
Addition Fee pursuant to Section 2.9.3, (ii) pay all costs and expenses that
Lender or Servicer incur in connection with the inclusion of such real property,
including, but not limited to, Attorneys’ Fees and Costs, and (iii) submit the
following to Lender: (a) all Collateral Pool Property Documents requested by
Lender, where appropriate, fully executed and where appropriate duly
acknowledged and filed of record in the appropriate official public records,
(b) copies of all filing receipts and acknowledgements issued by any
governmental authority evidencing any recordation or filing necessary to perfect
Lender’s Lien on the subject real property or other evidence satisfactory to
Lender of such recordation and filing of the applicable Security Instrument, (c)
evidence satisfactory to Lender that, subject to the Permitted Exceptions, (1)
in the case of personal property, the Lien constitutes a first priority security
interest in favor of Lender and, (2) in the case of real property, the Security
Instrument constitutes a valid and perfected first priority Lien in favor of
Lender (such evidence to be in the form of a title insurance policy acceptable
to Lender in both form and substance), (d) such consents to the transaction by
Guarantor as requested by Lender or Servicer in form and substance acceptable to
the requesting party, (e) opinions of counsel acceptable to Lender and (f) such
other certificates and documentation as required by Lender or Servicer and (iv)
in the case of a Proposed Borrower, such Proposed Borrower shall also execute
(a) separate allonges to the Revolving Credit Note and (b) a joinder agreement,
both of which shall be in form and substance satisfactory to Lender in its sole
discretion. If Borrower or Proposed Borrower fails to perform any of the acts,
where applicable, or to submit any of the documents and evidence listed under
(i), (ii), (iii) and (iv) above together with any and all updates to the
Underwriting Materials reasonably requested by Lender within forty-five (45)
days of the date of Lender’s acceptance, Lender may at its option reject the
proposed real property and terminate such proposal. In the event that Borrower
or Proposed Borrower performs all of the acts and submits all of the documents
and evidence listed in (i), (ii), (iii) and (iv) above within forty-five (45)
days of the date of Lender’s acceptance, the proposed real property shall be
added to the Collateral Pool.
2.9.3.    Addition Fee.

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For each property added to the Collateral Pool, Borrower shall pay, in addition
to any other fees payable to Lender and Servicer upon such addition, the
Addition Fee. The Addition Fee shall be due and payable to the Lender and
Servicer as applicable, upon Lender’s approval of the addition of the proposed
real property to the Collateral Pool.
2.10.    Release of Collateral.
Lender shall, upon thirty (30) days advance written Notice, release the Liens
granted hereunder with respect to a Mortgaged Property or Mortgaged Properties
which constitute(s) less than all Collateral Pool Properties, provided that (i)
Borrower shall pay Lender (a) the Partial Termination Fee described in Section
2.4.8 of this Agreement, if applicable and (b) all costs and expenses that
Lender or Servicer incur in connection with such release, including, but not
limited to, Attorneys’ Fees and Costs and all other amounts due to Lender
hereunder in connection with such release, including, without limitation,
Accrued Interest and unpaid interest, if applicable, (ii) at the time of the
request for such release, no Event of Default or Potential Default shall exist,
(iii) after giving effect to such release, no Event of Default or Potential
Default shall exist, and (iv) Borrower shall be in compliance with all
provisions hereof including, without limitation, the Sublimits, provided,
however, that if such release would otherwise cause Borrower to be in
non-compliance with the Sublimits set forth in Section 2.5.3, Borrower shall
have the opportunity to cure the same prior to or simultaneously with such
release by either (a) pledging multifamily real property collateral in form,
substance, value and in a manner all acceptable to Lender, in its sole
discretion, in accordance with Section 2.9 or (b) prepaying so much of the Loan
as is necessary to cause compliance with the Sublimits, each in accordance with
the provisions of Section 4.3. Upon the release of a Lien on a Mortgaged
Property, if the owner of such Mortgaged Property owns no other Collateral Pool
Properties, such owner shall be released from its obligations under the Loan
Documents. Notwithstanding the foregoing, under no circumstances may Borrower
receive a release of the Security Instrument with respect to the last property
in the Collateral Pool prior to the Maturity Date, unless Borrower has elected
to terminate this Agreement under Section 2.13 hereunder. Borrower may revoke a
pending request to release a Mortgaged Property at any time; provided that
Borrower pays all of Lender’s reasonable costs and expenses with respect to such
release request, including, without limitation, Attorneys’ Fees and Costs; in
which event, Borrower shall be entitled to reimbursement of the Partial
Termination Fee, if any, paid to Lender in connection with such request to
release a Mortgaged Property.
2.11.    Payment of the Loan Balance Without Termination.
Prior to the Maturity Date, Borrower shall have the right to repay the entire
Loan (i.e., the Revolving Credit Note), subject in each instance to the
provisions of Sections 4.3 and 4.4, all without any release of any Lien, and
subsequently reborrow hereunder, provided that Borrower is at such time, and
thereafter remains, in compliance with the provisions of this Agreement,
including, without

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limitation, the obligation to be in compliance with the Sublimits and the
obligations to pay all fees due and payable hereunder. Under no circumstances
shall Borrower be entitled to any additional advances or re-advances under the
Revolving Credit Note on or after the Maturity Date.
2.12.    Valuations.
2.12.1.    Timing and Procedure of Valuation.
In addition to any other provisions requiring valuations hereunder, Lender shall
perform, in accordance with its then current underwriting policies, practices
and procedures consistently applied, a valuation (the “Valuation”) to determine
the then (i) Market Value and (ii) Net Operating Income of each of the
Collateral Pool Properties, which Valuation shall be performed on the first date
such Collateral Pool Property is added to the Collateral Pool, on or about the
first anniversary date of the Closing Date of this Agreement, and annually
thereafter. In connection with the first Valuation, Borrower shall deliver to
Servicer by no later than ninety (90) days prior to the first anniversary date,
a current rent roll (which shall be no more than thirty (30) days old) and a
twelve (12) month operating statement with respect to each Mortgaged Property,
each certified by an Authorized Officer. Annually thereafter, in connection with
the Valuation, Borrower shall deliver to Servicer by no later than ninety (90)
days prior to the anniversary date, a current rent roll (which shall be no more
than thirty (30) days old) and a twelve (12) month operating statement with
respect to each Mortgaged Property, each certified by an Authorized Officer. Any
operating statement required hereunder shall relate to the operations of the
applicable Mortgaged Property during the preceding calendar year. Without
limiting the foregoing, each such rent roll and operating statement shall be in
such form and contain such detail as Lender may reasonably require, and Lender
may require that any such rent rolls and operating statements shall be verified
by an independent party acceptable to Lender, if Lender in its reasonable
discretion believes the information contained therein is inaccurate or
misleading.
2.12.2.    Valuations that Disclose a Decrease in Market Value and/or Net
Operating Income.
If any Valuation discloses that the Market Value and/or Net Operating Income of
the Collateral Pool Properties has decreased below the then current values or
calculations thereof, the Maximum Facility Available may be adjusted in
accordance with the provisions of Section 2.5.3 and in the event such decrease
in Market Value or Net Operating Income shall cause Borrower to be in
non-compliance with the Sublimits set forth in Section 2.5.3, Borrower shall
comply with the provisions of Section 4.3.2.
2.12.3.    Valuations that Disclose an Increase in Market Value and/or Net
Operating Income.

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If any Valuation discloses that the Market Value and/or Net Operating Income of
the Collateral Pool Properties has increased above the then current values
thereof, the Maximum Facility Available may be adjusted, if necessary, in
accordance with the provisions of Section 2.5.3, and Borrower shall be entitled
to borrow and reborrow hereunder, subject to the Sublimits, up to the amount of
the Commitment in accordance with the terms of this Agreement.
2.13.    Termination.
2.13.1.    Rights to Terminate.
Borrower and Lender shall have the rights to terminate this Agreement or to
accelerate the Loan, as applicable, as set forth in this Section 2.13.
2.13.2.    Borrower’s Right to Terminate the Agreement.
At any time during the term of the Loan, Borrower shall have the right to
terminate this Agreement in full and the parties’ obligations under the Loan
Documents, provided that Borrower (i) delivers to Lender thirty (30) days
advance written Notice of its revocable election to terminate this Agreement
specifying the Expiration Date, (ii) repays all Accrued Interest (as hereinafter
defined) on, and principal with respect to, the Loan in full and (iii) performs
all Obligations under this Agreement, the Revolving Credit Note and the other
Loan Documents, including, but not limited to, Borrower’s obligations to pay all
fees as specified in Section 2.13.4. Notwithstanding anything herein to the
contrary, a Sponsor Liquidity Event shall be deemed an election by Borrower to
terminate this Agreement. In the event Borrower has complied with the
requirements set forth in this Section 2.13.2, Lender shall release the Liens
granted hereunder on the Expiration Date in accordance with Section 2.10.
Without limiting any other provision contained herein, in the event Borrower
shall revoke any such request to terminate its Obligations under this Agreement
in full and the parties’ obligations under the Loan Documents, Borrower shall
pay all costs and expenses incurred by Lender and Servicer in connection with
such revocation, including, without limitation, Attorneys’ Fees and Costs.
2.13.3.    Lender’s Right to Accelerate.
Lender shall have the right to (i) accelerate the Loan upon an Event of Default
that remains uncured by Borrower beyond the expiration of any applicable cure
period under this Agreement, the Revolving Credit Note, or any other of the Loan
Documents and to (ii) collect the Accrued Interest and liquidated fees pursuant
to Section 2.13.4.
2.13.4.    Fees Due Upon Early Termination and/or Acceleration.
In the event (i) Borrower shall terminate Borrower’s obligations under the Loan
Documents pursuant to the provisions of Section 2.13.2 or (ii) Lender shall
accelerate the Loan pursuant to the

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provisions of Section 2.13.3 prior to the Scheduled Maturity Date, Borrower
shall pay (i) any Accrued Interest with respect to each outstanding Borrowing
Tranche calculated in accordance with Section 4.4 and (ii) an early termination
fee (an “Early Termination Fee”) equal to the greater of (a) one percent (1.0%)
of the Commitment, or (b) the present value of the Lowest Margin times the
Commitment that would have been paid to Lender from the date of the termination
to the Scheduled Maturity Date; provided, that, in the event the Borrower’s
termination under Section 2.13.2 is the result of a Sponsor Liquidity Event,
then the Early Termination Fee shall be equal to two percent (2.0%) of the
Commitment if the Sponsor Liquidity Event occurs during the period from the
Closing Date until the second (2nd) anniversary date of the Closing Date or one
percent (1.0%) of the Commitment thereafter. In the event Borrower elects not to
reduce the Commitment after the release of a Mortgaged Property and the
refinancing of such Mortgaged Property through the Securitized Product as set
forth in Section 2.4.8 of this Agreement, for purposes of calculating the Early
Termination Fee, Lender will reduce the Commitment by the amount of the
financing for such Mortgaged Property in the Securitized Product.
2.14.    Material Adverse Change to Borrower or a Mortgaged Property.
If (i) Borrower or a Mortgaged Property experiences a Material Adverse Change or
(ii) a Material Adverse Change occurs with respect to this Agreement or any of
the other Loan Documents taken as a whole, Borrower shall promptly notify Lender
of the same in writing as soon as Borrower has notice thereof. If Lender shall
receive Notice of a Material Adverse Change in accordance with the preceding
sentence, or otherwise becomes aware of a Material Adverse Change, which
Material Adverse Change affects a Mortgaged Property, Lender may promptly
conduct a Valuation of the affected Mortgaged Property pursuant to Section 2.12.
Until such time as such Valuation, if requested (which Borrower shall have the
right to request), shall be completed, the Mortgaged Property which experienced
the Material Adverse Change, or which is owned by a Borrower that experienced a
Material Adverse Change, shall be deemed, for the purposes of determining
whether any new borrowing request satisfies all of the Sublimits set forth in
Section 2.5.3, to have a Market Value and Net Operating Income reasonably
determined and quantified by Lender upon the information then available to
Lender. Lender shall promptly provide Borrower with written Notice of the
results of such Valuation. If the results of such Valuation disclose that the
Market Value of the affected Mortgaged Property has decreased, then the Market
Value shall thereafter be deemed to be the amount shown in such Valuation. In
the event that such Valuation hereunder shall cause Borrower to be in
non-compliance with the Sublimits set forth in Section 2.5.3, Borrower shall
comply with the provisions of Section 4.3.2. If Lender shall receive Notice of a
Material Adverse Change from Borrower hereunder, or otherwise becomes aware of a
Material Adverse Change which affects Borrower or the enforceability of this
Agreement or the other Loan Documents taken as a whole, Borrower shall promptly
provide any information or documents reasonably requested by Lender, including,
but not limited to, (a) with respect to a Material Adverse Change which affects
Borrower, financial statements and Borrower’s business plan to cure such
Material Adverse Change

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or (b) with respect to a Material Adverse Change which affects the
enforceability of this Agreement or the other Loan Documents taken as a whole,
replacement documents in form and substance acceptable to Lender in its
discretion, together with a legal opinion regarding the enforceability of such
replacement documents, acceptable to Lender in its discretion.
2.15.    Release of Collateral Followed by a Permanent Loan.
2.15.1.    Permanent Loan.
Borrower may request that Lender cause Servicer to make a permanent loan (the
“Permanent Loan”) to be secured by one or more Collateral Pool Properties
designated by Borrower (the “Permanent Loan Collateral”) to be simultaneously
released from the Collateral Pool and encumbered in favor of Servicer as
security for Borrower’s obligations under the Permanent Loan, which request
shall be made in accordance with the provisions of Section 2.15.2. The Permanent
Loan shall be made in accordance with the terms and conditions of the
Securitized Product. Notwithstanding the foregoing, under no circumstances may
Borrower receive a release of the Security Instrument with respect to the last
property in the Collateral Pool prior to the Maturity Date, unless Borrower has
elected to terminate this Agreement under Section 2.13 hereunder. Servicer shall
be permitted to collect from Borrower (and Borrower shall pay to Servicer) a
commitment fee for such Permanent Loan, as reasonably determined by Servicer
based on then-current market commitment fees.
2.15.2.    Procedure for Making a Permanent Loan.
Borrower may request that Lender cause Servicer to make a Permanent Loan to
Borrower, which request (i) shall be in writing, which writing shall specify (a)
the Mortgaged Property(ies) that will constitute the Permanent Loan Collateral,
(b) the original principal amount of the requested Permanent Loan, (c) the
related reduction in the Maximum Facility Available, (d) whether Borrower has
selected Lender’s then current early rate lock delivery option, and (e) any
payment or prepayment of a Borrowing Tranche, and (ii) shall be accompanied by
(a) any fees then due and owing under the Securitized Product for each Mortgaged
Property proposed by Borrower to be subject to the Permanent Loan, and (b) the
Underwriting Materials. Following receipt of all of the items specified in (i)
and (ii) of the previous sentence, Lender shall use its best efforts to consent
to Borrower’s request within forty-five (45) days of such Notice, provided that
(1) at the time of such request no Event of Default or Potential Default exists,
(2) the Permanent Loan shall be made in accordance with, and subject to, the
terms and conditions of the Securitized Product, (3) after giving effect to such
release, no Event of Default or Potential Default shall exist and Borrower will
be in compliance with all provisions hereof, including the Sublimits set forth
in Section 2.5.3, further provided that if any release occasioned by a Permanent
Loan would otherwise cause Borrower to be in non-compliance with the Sublimits,
Borrower shall have the opportunity to cure the same, prior to or simultaneously
with the release and the consummation of the Permanent Loan (which shall occur

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pursuant to the Securitized Product), by (A) pledging collateral in form,
substance, value and in a manner all acceptable to Lender, in its sole
discretion, or (B) prepaying so much of the Loan as is necessary to cause
compliance with the Sublimits, each in accordance with the provisions of Section
4.3, (4) Borrower shall provide evidence to Lender of title insurance in form
and substance acceptable to Lender and in the face amount of the Permanent Loan,
(5) the proposed Borrower under the Permanent Loan shall execute and deliver
such documents as Lender, in its discretion, may request in order to evidence
the making of the Permanent Loan and in order to grant Lender a first priority
Lien on the real and personal property constituting the Permanent Loan
Collateral subject, in each case, to any Permitted Exceptions, and (6) Borrower
shall pay Lender any fees then due and owing under the Securitized Product.
Thereafter, Servicer shall use commercially reasonable efforts to consummate the
Permanent Loan within thirty (30) days after its consent to Borrower’s request
thereof. Notwithstanding the foregoing, in the event that Borrower selects
Lender’s then current early rate lock delivery option, Lender shall use its best
efforts, subject to Borrower’s timely compliance with Lender’s requests, to lock
the interest rate for the requested Permanent Loan within seven (7) Business
Days of Borrower’s Notice hereunder. Any Permanent Loan granted pursuant to the
foregoing provisions shall not reduce the Commitment hereunder unless Borrower
elects pursuant to Section 2.4.8. Simultaneous with the closing of the Permanent
Loan, Lender shall release the Lien granted hereunder on the Permanent Loan
Collateral. Notwithstanding the foregoing, at any time prior to the release and
consummation of the Permanent Loan, Borrower may by written Notice revoke its
request for a release and a Permanent Loan pursuant to this Section 2.15;
provided, however, that Borrower shall reimburse Lender and Servicer
respectively, for Lender’s and Servicer’s costs and expenses, including breakage
costs and Attorneys’ Fees and Costs and any other fees due under this Agreement,
that Lender or Servicer incur in connection with such proposed release and
Permanent Loan financing prior to Borrower’s revocation.
2.16.    Non-Compliance With Sublimits.
If Borrower is unable to cause compliance with the Sublimits pursuant to Section
2.10, 2.15.2, 3.3.3 or 4.3.2.1 hereof, within fifteen (15) days following Notice
thereof from Servicer (or Lender) of Borrower’s non-compliance with the
Sublimits, then, for so long as Borrower fails to comply with the Sublimits, the
Net Spread applicable to all Borrowing Tranches then outstanding (and thereafter
renewed) shall automatically increase to one hundred basis points (0.01) over
the highest Net Spread shown on Schedule 3.2 (as such Net Spreads are adjusted
by Lender pursuant to Section 2.2(e) and Section 2.4.6.2), further increased, if
at all, in accordance with Schedule 3.2, as a result of the duration of such
Base Rate Borrowing Tranche(s) Interest Period; provided, however, such increase
shall not constitute a cure of an Event of Default under Section 8.1.3.
2.17.    Loan Documents.

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From time to time, but subject to the limitations in Section 1.2.3 herein,
Lender in its sole discretion revises its form Loan Documents to add, delete or
change requirements, conditions and other provisions of its form documents.
Freddie Mac, in its sole discretion, may use the prior or revised form of Loan
Documents in conjunction with any Mortgaged Properties added to the Collateral
Pool after the date hereof.
2.18.    Guaranty.
Borrower shall cause Guarantor to guaranty all or a portion of Borrower’s
non-recourse carve-out and environmental indemnity obligations under the Loan
Documents, as set forth in the Guaranty (“Guaranty”). Sponsor will maintain a
minimum net worth (“Minimum Net Worth”) of thirty percent (30%) of the aggregate
Allocated Loan Amount and liquid assets (“Liquidity”) equal to seven and
one-half percent (7.5%) of the aggregate Allocated Loan Amount with first such
measurement being at Closing. Guarantor must attest to compliance with the
Minimum Net Worth and Liquidity covenants annually thereafter pursuant to the
terms set forth in Section 7.3, pursuant to the terms of Section 2.1.2 and as
part of each Loan Request. In the event Lender determines, after an evaluation
performed pursuant to Section 7.3, 2.1.2 or as part of a Loan Request, that
Sponsor is not in compliance with the Minimum Net Worth and Liquidity
requirements, upon written request by Borrower, Lender may, in its sole
discretion, permit Borrower to add one or more Persons as a Guarantor to satisfy
the Minimum Net Worth and Liquidity requirements; provided however, such
addition as approved by Lender shall be completed within forty-five (45) days
after Lender’s performance of the valuation pursuant to Section 7.3.
2.19.    Release of a Borrower
At such time as the Lien encumbering Collateral Pool Property is fully released
by Lender pursuant to Sections 2.10, 2.13.2 or 2.15 hereof, Lender shall
promptly release and forever discharge the applicable Single Asset Entity
Borrower from any and all of its obligations under the Revolving Credit Note,
this Agreement and all Loan Documents (a) provided such Borrower no longer owns
any remaining Collateral Pool Properties and (b) except as to environmental
indemnifications under Sections 6.12 and 10.02 of the applicable Loan Agreement.
3.    INTEREST RATES
3.1.    Interest Rate.
The interest rate on each Borrowing Tranche evidenced by the Revolving Credit
Note shall be the Base Rate or, if required pursuant to Sections 3.3.2 or 3.4
hereof, the Prime Rate. Interest rates under this Agreement and the Revolving
Credit Note shall be computed on the basis of a year of three hundred sixty
(360) days and actual days elapsed.
3.2.    Interest Rate Determinations.

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3.2.1.    Prime Rate and Base Rate Determination.
(a)    The initial Prime Rate applicable to any Prime Rate Borrowing Tranche
required under Sections 3.3.2 or 3.4 shall equal the Prime Rate as of the
Borrowing Date or Renewal Date, as applicable. The Prime Rate shall thereafter
fluctuate in accordance with any changes to the Prime Rate as published from
time to time during the term of the Prime Rate Borrowing Tranche.
(b)    The Base Rate applicable to any Base Rate Borrowing Tranche hereunder
shall, subject to the provisions set forth below, equal the Base Rate calculated
as of the date of the Loan Request and set forth in the Loan Request. In the
event that the Base Rate, calculated as of the Borrowing Date, is more than
twenty-five basis points (0.0025) higher or lower than the Base Rate set forth
in the Loan Request, the Base Rate applicable to such Loan Request shall instead
be the Base Rate calculated as of the Borrowing Date. Thereafter, (i) the
portion of the Base Rate attributable to the LIBOR Index Rate (or such
alternative index as may be selected by Lender in accordance with the provisions
of Section 3.4) for any Base Rate Borrowing Tranche shall be redetermined as of
each renewal of such Borrowing Tranche pursuant to Section 3.3.3 and (ii) the
Margin for all Borrowing Tranches then outstanding shall be redetermined as of
each determination and redetermination of the Net Spread. As determined and
redetermined pursuant to this Agreement, the same Margin shall apply to all
Borrowing Tranches then outstanding. The portion of the Margin attributable to
the Net Spread shall be determined based on the Facility DSCR in accordance with
the table set forth in Schedule 3.2. The Facility DSCR and Net Operating Income
shall each be redetermined in accordance with the definitions thereof, as
applicable.
3.2.2.    Prime Rate, Base Rate and Margin Quotations.
Borrower may call Servicer on or before the date on which a Loan Request is to
be delivered or prior to the end of an Interest Period, to receive both a
calculation of the resulting Facility DSCR for a proposed Prime Rate (if
required pursuant to Sections 3.3.2 or 3.4) or Base Rate Borrowing Tranche and
an indication of the rates then in effect, including the Margin, but both
parties acknowledge that such projection shall not be binding on Lender or
Borrower, nor shall such projection affect the rate of interest which thereafter
is actually in effect when the election is made.
3.3.    Interest Periods.
Upon each Loan Request for a new Base Rate Borrowing Tranche, and upon each
Renewal Request applicable to a Base Rate Borrowing Tranche, Borrower shall
notify Lender of the period (the “Interest Period”) which may only be a one (1)
month (having original durations to maturity of approximately thirty (30) days)
or three (3) month (having original durations to maturity of approximately
ninety (90) days) for which the LIBOR Index Rate shall be determined.
3.3.1.    Interest Period to End on a Business Day.

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If the last day of any Interest Period is not a Business Day, the Interest
Period shall be deemed to mature on the Business Day immediately following such
date.
3.3.2.    No Interest Periods Beyond the Expiration Date.
Borrower shall not select or renew an Interest Period for any Base Rate
Borrowing Tranche that would end after the Expiration Date. If at the time of
any such selection or renewal the period of time remaining prior to the
Expiration Date is less than thirty (30) days then such Borrowing Tranche shall
bear interest at the Prime Rate. No Prime Rate Borrowing Tranche may remain
outstanding in excess of thirty (30) days at any one time.
3.3.3.    Renewals.
In the case of a redetermination of an Interest Period at the end of an Interest
Period, for purposes of calculating interest due under the applicable Borrowing
Tranche the first day of the new Interest Period shall be the first Business Day
immediately following the last day of the preceding Interest Period (such date,
the “Renewal Date”). For each Base Rate Borrowing Tranche, if no new Interest
Period is specified within two (2) Business Days prior to the last day of such
Interest Period, by delivery to Lender of a fully completed, authorized and
executed request therefor (a “Renewal Request”) in the form attached hereto as
Schedule 3.3.3, the Borrowing Tranche shall be renewed for an Interest Period of
one-month at the Base Rate then applicable to a Borrowing Tranche disbursed on
the applicable Renewal Date having a one-month Interest Period. Notwithstanding
anything contained herein to the contrary, (i) no Borrowing Tranche may be
renewed with a principal amount of less than One Million and 00/100 Dollars
($1,000,000) and (ii) in the event the Facility DSCR is less than required in
accordance with Section 2.5.3.2 hereto or the LTV Ratio exceeds the ratio
required in accordance with Section 2.5.3.1 hereto, Borrower may renew or
consolidate (but not increase the outstanding principal amount of) any Borrowing
Tranche(s) then outstanding, all in accordance with the provisions of this
Section 3.3.3, provided that, as of the date of such renewal or consolidation
(a) no Event of Default or Potential Default, other than Borrower’s failure to
comply with Sections 2.5.3.1 or 2.5.3.2, shall then exist, (b) Borrower’s
failure to comply with Sections 2.5.3.1 or 2.5.3.2 shall have been for a period
of less than ninety (90) days, and (c) Borrower is otherwise in full compliance
with all other terms and conditions of the Loan Documents, including the
provisions of Section 4.5. Borrower must assure compliance with Sections 2.5.3.1
or 2.5.3.2 pursuant to the provisions of Section 4.3.
3.3.4.    Interest After Default.
So long as (i) any payment under this Agreement remains past due for thirty (30)
days or more, or (ii) any other Event of Default has occurred and is continuing,
interest on the Loan shall accrue on the unpaid principal balance from the
earlier of the due date of the first unpaid installment or the occurrence of
such other Event of Default at the Default Rate (as defined in the Revolving

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Credit Note) set forth in the Revolving Credit Note. If the unpaid principal
balance and all accrued interest on the Loan are not paid in full on the
Expiration Date, the unpaid principal balance and all accrued interest on the
Loan shall thereafter bear interest at the default rate set forth in the
Revolving Credit Note. Borrower acknowledges that (a) its failure to make timely
payments will cause Lender to incur additional expenses in servicing and
processing the Loan, (b) during the time that any installment is delinquent for
more than thirty (30) days, 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 (c) it is extremely difficult and impractical to
determine those additional costs and expenses. Borrower also acknowledges that,
during the time that any installment is delinquent for more than thirty (30)
days or any other Event of Default has occurred and is continuing, Lender’s risk
of nonpayment 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 set forth in the Revolving Credit Note represents a fair and
reasonable estimate, taking into account all circumstances existing on the date
of this Agreement, of the additional costs and expenses Lender will incur by
reason of Borrower’s delinquent payment and the additional compensation Lender
is entitled to receive for the increased risks of nonpayment associated with a
delinquent loan.
3.3.5.    Late Charge.
If any amount payable under this Agreement, the Revolving Credit Note or any
other Loan Document, other than (i) the outstanding amount of the Revolving
Credit Note payable on the Expiration Date or (ii) the then outstanding amount
of the Loan payable upon acceleration of the Revolving Credit Note, is not
received by Lender as provided in the Revolving Credit Note, Borrower shall pay
to Lender, immediately and without demand by Lender, a late charge as specified
in the Revolving Credit Note. 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 specified in the Revolving Credit Note represents a fair and reasonable
estimate, taking into account all circumstances existing on the date of this
Agreement, 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 specified in the Revolving Credit Note.
3.4.    Illegality; Increased Costs.
3.4.1.    Reserved.
3.4.2.    Illegality; Increased Costs.

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At any time at which Lender shall have reasonably determined that (a) adequate
and reasonable means do not exist for ascertaining the applicable LIBOR Index
Rate, (b) a contingency has occurred which materially and adversely affects the
London interbank market, (c) the making, maintenance or funding of any Borrowing
Tranche bearing interest in part at the LIBOR Index Rate has been made unlawful
by Lender’s compliance in good faith with any Law or any interpretation or
application thereof by any Official Body or with any request or directive of any
such Official Body (whether or not having the force of Law, but other than as a
result of any misconduct by Lender), (d) the Base Rate (as determined with
reference to the LIBOR Index Rate) will not adequately and fairly reflect the
cost to Lender of the establishment or maintaining of any such Borrowing
Tranche, or (e) after making all reasonable efforts, deposits of the relevant
amount in Dollars for the relevant Interest Period for a Borrowing Tranche are
not available to Lender in the London interbank market, then Lender shall have
the rights specified in Section 3.4.3.
3.4.3.    Lender’s Rights.
In the case of the events specified in Section 3.4.2 above, Lender shall
promptly notify Borrower thereof. Upon the date as shall be specified in such
Notice, the obligation of Lender to make advances under any Borrowing Tranche(s)
at the Base Rate shall be suspended until Lender shall have later notified
Borrower of Lender’s reasonable determination that the circumstances set forth
in Section 3.4.2 no longer exist. If at any time Lender notifies Borrower that
it has made a determination under Section 3.4.2, then with respect to any Loan
Request previously submitted but not yet funded, and with respect to any
Borrowing Tranche on which an Interest Period shall thereafter expire, each such
new or renewal Borrowing Tranche(s) shall thereafter bear interest at the Prime
Rate, in each case subject to Section 3.3.2 hereof. Lender agrees to exercise
its rights under Section 3.4.2 in a manner that is non-discriminating to
Borrower and only if Lender is also exercising its rights thereunder with
respect to other borrowers similarly situated.
4.    PAYMENTS
4.1.    Payments.
All payments and prepayments to be made in respect of principal, interest,
Unused Commitment Fees or other fees or amounts due from Borrower hereunder
shall be due and payable on the date when due without presentment, demand,
protest, or notice of any kind, including, but not limited to, notice of
Lender’s intent to accelerate Borrower’s Obligations under the Loan Documents
and notice of such acceleration, all of which (unless expressly provided in the
Loan Documents) are hereby waived by Borrower to the maximum extent permitted by
applicable Law, and without set-off, counterclaim or other deduction of any
nature, and Lender’s right to action therefor shall immediately accrue. Such
payments shall be made to Lender in immediately available funds when due.
Lender’s Monthly Payment Statement shall, in the absence of manifest error, be
conclusive as to the amount of principal of and interest on the Loan and other
amounts owing under

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this Agreement, provided that Borrower may challenge the accuracy of any Monthly
Payment Statement within one (1) year of the date of such Monthly Payment
Statement.
4.2.    Payment Dates.
Subject to the provisions of Section 4.3, interest on the Loan shall be payable
in arrears and shall be due, together with all other amounts set forth on the
applicable Monthly Payment Statement, prior to 12:00 p.m. Eastern Time on the
first (1st) day of any calendar month during the term hereof (the “Payment
Date”) and shall be paid by wire transfer of immediately available funds to an
account specified by Servicer and, simultaneously with such wire transfer,
Borrower shall provide Notice to Lender that such payment has been made (which
Notice shall include the federal reference number applicable to such transfer).
Lender shall deliver to Borrower an invoice (the “Monthly Payment Statement”)
detailing the interest and principal (if applicable), Unused Commitment Fees and
other fees due and payable. Except in the case of a prepayment under Section
4.3, Lender shall deliver the Monthly Payment Statement detailing charges due
for the current calendar month via fax or by other electronic transmittal at
least five (5) Business Days prior to the first day of the succeeding calendar
month. In the instance of a renewal of an Interest Period pursuant to Section
3.3.3, interest on such renewed Borrowing Tranche shall be due and payable on
the next Payment Date, subject to any adjustments in interest rates, as if the
Interest Period had not expired and then been renewed. Interest on prepayments
under Section 4.3 shall be due on the date such prepayment is due. Interest on
the principal amount of the Loan or other monetary Obligation shall be due and
payable on demand after such principal amount or other monetary Obligation
becomes due and payable (whether on the stated maturity date, upon acceleration
or otherwise).
4.3.    Prepayments.
4.3.1.    Voluntary Prepayments.
Borrower shall have the right, at its option, from time to time to prepay the
Loan in whole or part at any time, but no prepayment may be less than One
Million and NO/100 Dollars ($1,000,000.00) plus the accrued interest thereon.
Whenever Borrower desires to prepay any part of the Loan, Borrower shall provide
a prepayment Notice to Lender by 12:00 p.m. Eastern Time at least ten (10)
Business Days prior to the date of the proposed prepayment setting forth the
following information:
(x)    the estimated date on which the proposed prepayment is to be made; and
(y)    a statement indicating the application of the prepayment to a particular
Borrowing Tranche(s); and
(z)    the amount to be prepaid.

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The principal amount of the Borrowing Tranche(s) for which a prepayment Notice
is given, together with interest on such principal amount, shall be due and
payable by 12:00 p.m. Eastern Time on the date specified in such prepayment
Notice as the date on which the proposed prepayment is to be made. Lender shall,
upon receipt of Borrower’s Notice, prepare and deliver to Borrower the same day
via facsimile or other electronic transmittal a statement of interest due with
respect to such prepayment, provided that in the event Borrower’s prepayment
Notice is not received by Lender prior to 12:00 p.m. Noon Eastern Time, Lender
shall not be obligated to prepare and deliver such statement of interest until
the Business Day following Lender’s receipt of such Notice.

4.3.2.    Sublimit Violations (Mandatory Prepayment / Collateral Addition).
4.3.2.1.    Upon Borrower’s receipt of Notice that it is not in compliance with
the Sublimits, Borrower must either (i) within ninety (90) days of the Notice of
Borrower’s non-compliance with the Sublimits, pledge multi-family real property
collateral in form, substance, value and in a manner all acceptable to Lender,
in its sole discretion, in accordance with Section 2.9 or (ii) within forty-five
(45) days of the Notice of Borrower’s non-compliance with the Sublimits, prepay
so much of the Loan as is necessary to cause compliance with the Sublimits.
Borrower shall provide Notice to Lender and Servicer, within twenty (20) days of
Servicer’s (or Lender’s) Notice to Borrower of Borrower’s non-compliance with
the Sublimits, of Borrower’s election to proceed under clause (i) or clause (ii)
of the preceding sentence. If Borrower provides notice of its election to pledge
multi-family real property, Borrower may also cure any Sublimit non-compliance
by providing evidence satisfactory to Lender, within sixty (60) days of the
Notice of Borrower’s non-compliance with the Sublimits, that circumstances with
respect to the Collateral Pool have changed such that Borrower is no longer in
non-compliance with the Sublimits. Lender shall deliver to Borrower as soon as
practicable, but in any event within two (2) Business Days after such Notice of
Borrower’s election to prepay the Loan a statement of the principal and interest
due with respect to any required prepayment. Notwithstanding the foregoing, if
Borrower is unable to cause compliance with the Sublimits within fifteen (15)
days following Notice thereof from Servicer (or Lender) of Borrower’s
non-compliance with the Sublimits, then, for so long as Borrower fails to comply
with the Sublimits, the Net Spread applicable to all Borrowing Tranches then
outstanding (and thereafter renewed) shall automatically increase to one hundred
basis points (0.01) over the highest Net Spread shown on Schedule 3.2, (as such
Net Spreads are adjusted by Lender pursuant to Sections 2.2(c) and 2.4.6.2)
further increased, if at all, in accordance with Schedule 3.2, as a result of
the duration of such Borrowing Tranche(s) Interest Period; provided however,
such increase shall not constitute a cure of an Event of Default under Section
8.1.3.
4.3.2.2.    In the event of a casualty or condemnation affecting any of the
Collateral Pool Properties, any award and/or proceeds payable with respect to
such casualty or condemnation and applied to Borrower’s Obligations in
accordance with the provisions of the applicable Loan Agreement shall be applied
without any prepayment fee or other penalty (but any

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Accrued Interest shall be paid), and this Agreement, and the parties’
obligations under the Loan Documents, shall be terminated, at Borrower’s
election in accordance with Section 2.13.
4.3.2.3.    Any mandatory prepayment of the Loan in accordance with the
provisions of this Section 4.3.2 shall be applied, as directed by Borrower, to a
particular Borrowing Tranche or Borrowing Tranches under the Revolving Credit
Note until the Revolving Credit Note has been repaid in full or, in the absence
of any specific direction from Borrower, as selected by Lender in its sole
discretion.
4.4.    Accrued Interest.
Unless Borrower for any reason (i) repays a Borrowing Tranche permitted
hereunder accruing interest at the Prime Rate or (ii) repays all or a part of a
Base Rate Borrowing Tranche upon the expiration of such Base Rate Borrowing
Tranche’s Interest Period, any prepayment under Section 4.3 shall be accompanied
by a payment of the Accrued Interest (as hereinafter defined). The Accrued
Interest for any Base Rate Borrowing Tranche shall be an amount equal to the
interest, applicable to the particular Borrowing Tranche being prepaid, which
would have otherwise accrued over the remainder of the applicable Interest
Period (“Accrued Interest”). In addition, upon Lender’s exercise of any right of
acceleration under this Agreement, the Revolving Credit Note, or any other Loan
Document following an Event of Default, Borrower shall pay to Lender the Accrued
Interest on all Base Rate Borrowing Tranches at the time of acceleration, and
all other sums and fees payable to Lender hereunder.
4.5.    Additional Payment Obligations.
Notwithstanding anything to the contrary set forth herein, if Lender shall
determine that the Facility DSCR is less than required pursuant to Section
2.5.3.2 or that the LTV Ratio exceeds the ratio permitted in accordance with
Section 2.5.3.1, and such noncompliance shall continue (a) past the period set
forth in Section 2.5.3, and thereafter (b) remain uncured for fifteen (15) days
following Notice thereof from Servicer (or Lender), then the Net Spread
applicable to all Borrowing Tranches then outstanding (and thereafter renewed)
shall automatically increase to one hundred basis points (0.01) over the highest
Net Spread shown on Schedule 3.2 (as such Net Spreads are adjusted by Lender
pursuant to Sections 2.2(c) and 2.4.6.2), further increased, if at all, in
accordance with Schedule 3.2, as a result of the duration of such Borrowing
Tranche(s) Interest Period.
4.6.    Additional Compensation in Certain Circumstances.
4.6.1.    Increased Costs Resulting from Taxes, Etc.
If any change in any Law, guideline or interpretation or application thereof by
any Official Body charged with the interpretation or administration thereof or
compliance with any written

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request or directive of any Official Body (other than as a result of any
misconduct by Lender) which is applicable to Lender:
4.6.1.1.    subjects Lender to any tax or adverse changes the basis of taxation
with respect to this Agreement, the Revolving Credit Note, the Loan or payments
by Borrower of any principal, interest, fees, or other amounts due from Borrower
hereunder or under the Revolving Credit Note (except for taxes on the overall
net income of Lender;
4.6.1.2.    imposes upon Lender any condition or denies Lender any right, the
result of which is to increase the cost to, reduce the income receivable by, or
impose any expense (including breakage costs) upon Lender with respect to this
Agreement, the Revolving Credit Note or the making, maintenance or funding of
any Borrowing Tranche by an amount which Lender in its discretion deems to be
material;
then Lender shall from time to time notify Borrower of the amount determined in
good faith (using any averaging and attribution methods employed in good faith)
by Lender to be necessary to compensate Lender for such increase in cost. Such
Notice shall set forth in reasonable detail the basis for such determination.
Such amount shall be due and payable by Borrower to Lender thirty (30) days
after such Notice is given.
4.6.2.    Termination.
Upon the occurrence of any event described in Section 4.6.1, Borrower may elect
to terminate this Agreement and the parties’ obligations under the Loan
Documents in accordance with the provisions of Section 2.13, and Borrower’s
obligations hereunder shall terminate upon Borrower’s repayment in full of the
Loan and the Borrower shall not be obligated to pay the fees set forth in
Section 2.13.4.
4.6.3.    Indemnity.
In addition to the compensation required by Section 4.6.1, Borrower shall
jointly and severally indemnify Lender and Servicer against all losses, claims,
damages, liabilities and expenses, including Attorneys’ Fees and Costs (
individually and collectively, the “Loss”) which may be imposed or incurred by
Lender and/or Servicer directly or indirectly arising out of, or in any way
relating to, or a result of any of the following:
4.6.3.1.    attempt by Borrower to revoke (expressly, by later inconsistent
notices or otherwise) in whole or part any Loan Request under Section 2.5, any
request to release a Mortgaged Property under Section 2.10, or notice relating
to prepayments under Section 4.3, or
4.6.3.2.    default by Borrower in the performance or observance of any covenant
or condition contained in this Agreement or any other Loan Document, including
any

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failure of Borrower to pay when due (by acceleration or otherwise) any
principal, interest, Accrued Interest, Unused Commitment Fee, Unused Capacity
Fee or any other amount due hereunder.
If Lender sustains or incurs any such Loss, it shall from time to time notify
Borrower of the amount determined in good faith by Lender (which determination
may include such assumptions, allocations of costs and expenses and averaging or
attribution methods as Lender shall deem reasonable) to be necessary to
indemnify Lender for such Loss. Such Notice shall set forth in reasonable detail
the basis for such determination (which shall be conclusive absent manifest
error). Such amount shall be due and payable by Borrower to Lender thirty (30)
days after such Notice is given.
5.    CONDITIONS OF LENDING
The obligation of Lender to fund the Loan hereunder is subject to the
performance by Borrower of its Obligations to be performed hereunder at or prior
to the funding of any Base Rate or permitted Prime Rate Borrowing Tranche(s),
and to the satisfaction of the following further conditions:
5.1.    Initial Borrowing Tranche.
On the Closing Date:
5.1.1.    Delivery of Loan Documents.
All Loan Documents not previously executed and delivered to Lender shall have
been duly executed and delivered to Lender, together with all appropriate
financing statements.
5.1.2.    Validity of Representations.
The representations and warranties of Borrower contained in Section 6 and in
each of the other Loan Documents shall be true and accurate in all material
respects on and as of the Closing Date with the same effect as though such
representations and warranties had been made on and as of such date (except
representations and warranties which relate solely to an earlier date or time,
which representations and warranties shall be true and correct on and as of the
specific dates or times referred to therein), and Borrower shall have performed
and complied with all covenants and conditions hereof and thereof, no Event of
Default or Potential Default shall have occurred and be continuing or shall
exist.
5.1.3.    Officer’s Certificate.
There shall be delivered to and for the benefit of Lender a certificate, in form
and substance acceptable to Lender, dated the Closing Date and signed by an
Authorized Officer, certifying as appropriate as to:

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5.1.3.1.    all required actions taken by Borrower in connection with this
Agreement and the other Loan Documents;
5.1.3.2.    the names of the officer or officers authorized to sign this
Agreement and the other Loan Documents and the true signatures of such officer
or officers and specifying the Authorized Officers permitted to act on behalf of
Borrower for purposes of this Agreement and the true signatures of such
Authorized Officers, on which Lender may conclusively rely;
5.1.3.3.    copies of the organizational documents of Borrower including its
certificate of incorporation, by-laws, certificate of limited partnership,
partnership agreement, certificate of formation, and limited liability company
agreement, as applicable, as in effect on the Closing Date certified by the
appropriate state official where such documents are filed in a state office
together with certificates from the appropriate state officials as to the
continued existence and good standing of Borrower in each state where organized
or qualified to do business and bring-down certificates by facsimile or
electronic mail dated within thirty (30) days of the Closing Date, all of which
shall be attached to such officer’s certificate; and
5.1.3.4.    the matters described in Section 5.1.8.
5.1.4.    Opinion of Counsel.
There shall be delivered to Lender, written opinions of counsel for Borrower
dated the Closing Date and in form and substance satisfactory to Lender and its
counsel as to matters customary to the transactions contemplated herein, or as
Lender may reasonably request including, but not limited to, an enforceability
opinion with respect to Virginia law.
5.1.5.    Legal Details.
All legal documents and due diligence in connection with the transactions
contemplated by this Agreement and the other Loan Documents shall be in form and
substance satisfactory to Lender and counsel for Lender, and Lender shall have
received all such other counterpart originals or certified or other copies of
such documents or due diligence items in connection with such transactions, in
form and substance satisfactory to Lender and said counsel, as Lender or said
counsel may reasonably request.
5.1.6.    Payment of Fees.
Borrower shall have paid or caused to be paid to Lender and Freddie Mac to the
extent not previously paid all fees accrued through the Closing Date and all of
Lender’s and Freddie Mac’s costs and expenses, including, but not limited to,
Attorneys’ Fees and Costs, title insurance premiums, surveys, appraisals, all
costs incurred in obtaining environmental, engineering and credit

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reports, all third party due diligence costs and other costs and expenses
incurred by either Lender or Freddie Mac in connection with the closing of this
Loan.
5.1.7.    Consents.
All material consents required to effectuate the transactions contemplated
hereby shall have been obtained.
5.1.8.    No Material Adverse Change.
Since the date of Borrower’s formation, no Material Adverse Change shall have
occurred; prior to the Closing Date, there shall have been no material change in
the ownership or management of Borrower.
5.1.9.    No Violation of Laws.
The making of the Loan shall not contravene any Law applicable to Borrower, its
Affiliates or Lender.
5.1.10.    No Actions or Proceedings.
No action, proceeding, investigation, regulation or legislation shall have been
instituted, or, to Borrower’s Knowledge threatened or proposed before any court,
governmental agency or legislative body to enjoin, restrain or prohibit, or to
obtain damages in respect of, this Agreement, the other Loan Documents or the
consummation of the transactions contemplated hereby or thereby or which, in
Lender’s sole discretion, would make it inadvisable to consummate the
transactions contemplated by this Agreement or any of the other Loan Documents.
5.1.11.    Collateral Initially Included in Collateral Pool.
With respect to the Collateral which is part of the Collateral Pool at Closing,
Borrower shall have delivered all Underwriting Materials required hereunder for
inclusion of such Collateral into the Collateral Pool, and Lender, in its sole
discretion, shall have approved the inclusion therein.
5.1.12.    Other Conditions.
Borrower shall have satisfied such other reasonable conditions as required by
Lender or Lender’s legal counsel.
5.2.    Each Subsequent Borrowing Tranche.
At the time of funding of any Borrowing Tranche (excluding renewals, conversions
and continuances of any outstanding Borrowing Tranche(s) which do not increase
the outstanding principal amount of the Loan made hereunder) other than the
funds advanced on the Closing Date,

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and after giving effect to the proposed extensions of credit: (i) the
representations and warranties of Borrower contained in Section 6 and in the
other Loan Documents shall be true and correct in all material respects on and
as of the date of the funding of any such Borrowing Tranche with the same effect
as though such representations and warranties had been made on and as of the
date of the funding of any such Borrowing Tranche (except representations and
warranties that expressly relate solely to an earlier date or time, which
representations and warranties shall be true and correct in all material
respects on and as of the specific dates or times referred to therein and except
such changes as would not constitute a Material Adverse Change) and Borrower
shall have performed and complied with all covenants and conditions hereof; (ii)
no Event of Default or, to Borrower’s Knowledge, Potential Default shall have
occurred and be continuing or shall exist; (iii) the funding of any Borrowing
Tranche shall not contravene any Law applicable to Borrower, Guarantor, Sponsor
or Lender; (iv) Borrower shall have delivered to Lender a duly executed and
completed Loan Request or Renewal Request, as the case may be; and (v) Borrower
shall have paid all fees and expenses incurred by Lender or Servicer in
connection therewith.
6.    REPRESENTATIONS AND WARRANTIES
6.1.    Representations and Warranties.
Borrower represents and warrants to Lender, as of the date hereof and as of the
Expansion Option Date, Contraction Option Date, Extension Option Date, the date
each Loan Request is funded, the date of the addition of a Mortgaged Property to
the Collateral Pool, the date of each release of a Lien on a Mortgaged Property,
the date of a release of a Borrower, each Renewal Date, the date a joinder
agreement is executed by a Proposed Borrower and such other date as may be
specifically required pursuant to any other Loan Document:
6.1.1.    Organization and Qualification.
Each Borrower is a corporation, partnership, limited liability company, or real
estate investment trust, duly organized, validly existing and in good standing
under the Laws of its applicable jurisdiction of organization or formation, as
the case may be, and Borrower has the lawful power to own or lease the
applicable Collateral Pool Property and to engage in the business it presently
conducts or proposes to conduct. Borrower is duly licensed or qualified and in
good standing in all jurisdictions where the applicable property owned or leased
by it or where the nature of the business transacted by it or both makes such
licensing or qualification necessary and where the failure to be so qualified
would result in a Material Adverse Change.
6.1.2.    Single Asset Entity.
Each Borrower which owns a Collateral Pool Property is a Single Asset Entity
with a purpose limited to owning, maintaining and operating only its respective
Mortgaged Property.

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6.1.3.    Power and Authority.
Borrower has full power to enter into, execute, deliver and carry out this
Agreement and the other Loan Documents to which it is a party, to incur the Loan
contemplated by the Loan Documents and to perform its Obligations under the Loan
Documents to which it is a party, and all such actions have been duly authorized
by all necessary proceedings on its part.
6.1.4.    Validity and Binding Effect.
This Agreement has been duly and validly executed and delivered by Borrower and
each other Loan Document which Borrower is required to execute and deliver on or
after the date hereof will have been duly executed and delivered by Borrower on
the required date of delivery of such Loan Document. This Agreement and each
other Loan Document executed by Borrower, Guarantor or Sponsor constitutes, or
will constitute, legal, valid and binding obligations of Borrower, Guarantor or
Sponsor on and after its date of delivery thereof, enforceable against Borrower,
Guarantor or Sponsor in accordance with its terms, except to the extent that
enforceability of any of such Loan Documents may be limited by bankruptcy,
insolvency, reorganization, moratorium or other similar Laws affecting the
enforceability of creditors’ rights generally or limiting the right of specific
performance. There is no offset, defense, counterclaim or right of rescission
with respect to any of the Loan Documents.
6.1.5.    No Conflict.
Neither the execution and delivery of this Agreement or the other Loan Documents
by Borrower or its Affiliates nor the consummation of the transactions herein or
therein contemplated or compliance with the terms and provisions hereof or
thereof by any of them will conflict with, constitute a default under or result
in any breach or violation of (i) the terms and conditions, as applicable, of
the certificate of incorporation, by-laws, certificate of limited partnership,
partnership agreement, certificate of formation, limited liability company
agreement or other organizational documents of Borrower or its Affiliates, (ii)
to Borrower’s Knowledge any Law or any material agreement or instrument or
order, writ, judgment, injunction or decree to which Borrower or any of its
Affiliates is a party or is subject, or by which Borrower or any of its
Affiliates is bound, or (iii) result in the creation or enforcement of any Lien,
charge or encumbrance whatsoever upon any property (now or hereafter acquired)
of Borrower (other than Liens granted under the Loan Documents), nor will they
result in or require (except as specifically contemplated by this Agreement) the
creation or imposition of any Lien of any nature upon any of the collateral of
Borrower other than the Liens of the Loan Documents.
6.1.6.    Litigation.

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There are no actions, suits, proceedings or investigations pending, or to
Borrower’s Knowledge threatened, against Borrower, Sponsor or its Affiliates at
law or equity before any Official Body which individually or in the aggregate
may result in any Material Adverse Change. Neither Borrower nor its Affiliates
are in violation of any order, writ, injunction or decree of any Official Body
which may result in any Material Adverse Change.
6.1.7.    Use of Proceeds.
Borrower intends to use the proceeds of the Loan in accordance with Section 2.8.
6.1.8.    Full Disclosure.
Neither this Agreement nor any other Loan Document, nor any material
certificate, statement, agreement or other documents furnished to Lender by
Borrower or its Affiliates or, to Borrower’s Knowledge, any other Person in
connection herewith or therewith, contains any untrue statement of a material
fact or omits to state a material fact necessary in order to make the statements
contained herein and therein, in light of the circumstances under which they
were made, not misleading. There is no fact known to Borrower which has resulted
or will result in a Material Adverse Change which has not been set forth in this
Agreement or in the certificates, statements, agreements, financial projections
or other documents furnished in writing to Lender prior to or at the date hereof
in connection with the transactions contemplated hereby.
6.1.9.    Taxes.
All federal, state, local and other tax returns required to have been filed with
respect to Borrower, Guarantor and Sponsor have been filed, and payment or
adequate provision has been made for the payment of all taxes, fees, assessments
and other governmental charges which have or may become due pursuant to said
returns or to assessments received, except to the extent that such taxes, fees,
assessments and other charges are being contested in good faith by appropriate
proceedings diligently conducted and for which such reserves or other
appropriate provisions, if any, as shall be required by GAAP shall have been
made. There are no agreements or waivers extending the statutory period of
limitations applicable to any federal income tax return of Borrower, Guarantor
or Sponsor for any period.
6.1.10.    Consents and Approvals.
There are no other filings, consents or approvals necessary for the execution of
this Agreement by Borrower or its performance hereunder or under the Loan
Documents, all of which shall have been obtained or made on or prior to the
Closing Date.
6.1.11.    No Event of Default.

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No event has occurred and is continuing and no condition exists or will exist
after giving effect to the borrowings or other extensions of credit to be made
on the Closing Date or thereafter under or pursuant to the Loan Documents, which
constitutes an Event of Default or a Potential Default.
6.1.12.    Investment Companies; Regulated Entities.
Borrower is not an “investment company” registered or required to be registered
under the Investment Company Act of 1940 or under the “control” of an
“investment company” as such terms are defined in the Investment Company Act of
1940 and shall not become such an “investment company” or under such “control.”
Borrower is not subject to any other federal or state statute or regulation
limiting its ability to incur any debt.
6.1.13.    Pension Plans and Benefit Arrangements.
The representations and warranties set forth in this Section 6.1.13 shall only
apply to the extent Borrower is at any time, and from time to time, subject to
the provisions of ERISA.
6.1.13.1.    Borrower and each other member of the ERISA Group are in compliance
in all material respects with any applicable provisions of ERISA with respect to
all Benefit Arrangements, Pension Plans and Multiemployer Plans. There has been
no Prohibited Transaction with respect to any Benefit Arrangement or any Pension
Plan or, with respect to any Multiemployer Plan, which could result in any
material liability of Borrower or any other member of the ERISA Group. Borrower
and all members of the ERISA Group have made when due any and all payments
required to be made under any agreement relating to a Multiemployer Plan or any
Law pertaining thereto. With respect to each Pension Plan and Multiemployer
Plan, Borrower and each member of the ERISA Group (i) have fulfilled in all
material respects their obligations under the minimum funding standards of
ERISA, (ii) have not incurred any liability to the PBGC, and (iii) have not had
asserted against them any penalty for failure to fulfill the minimum funding
requirements of ERISA.
6.1.13.2.    Each Multiemployer Plan is able to pay benefits thereunder when
due.
6.1.13.3.    Neither Borrower nor any other member of the ERISA Group has
instituted or intends to institute proceedings to terminate any Pension Plan.
6.1.13.4.    No event requiring notice to the PBGC under Section 302(f)(4)(A) of
ERISA has occurred or is reasonably expected to occur with respect to any
Pension Plan, and no amendment with respect to which security is required under
Section 307 of ERISA has been made or is reasonably expected to be made to any
Pension Plan.

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6.1.13.5.    The aggregate actuarial present value of all benefit liabilities
(whether or not vested) under each Pension Plan, determined on a plan
termination basis, as disclosed in, and as of the date of, the most recent
actuarial report for such Pension Plan, does not exceed the aggregate fair
market value of the assets of such Pension Plan.
6.1.13.6.    Neither Borrower nor any other member of the ERISA Group has
incurred or reasonably expects to incur any material withdrawal liability under
ERISA to any Multiemployer Plan. Neither Borrower nor any other member of the
ERISA Group has been notified by any Multiemployer Plan that such Multiemployer
Plan has been terminated within the meaning of Title IV of ERISA, and no
Multiemployer Plan is reasonably expected to be reorganized or terminated,
within the meaning of Title IV of ERISA.
6.1.13.7.    To the extent that any Benefit Arrangement is insured, Borrower and
all members of the ERISA Group have paid when due all premiums required to be
paid for all periods through and including the Closing Date. To the extent that
any Benefit Arrangement is funded other than with insurance, Borrower and all
other members of the ERISA Group have made when due all contributions required
to be paid for all periods through the Closing Date.
6.1.13.8.    All Pension Plans, Benefit Arrangements and Multiemployer Plans
have been administered in accordance with their terms and any Law.
6.1.14.    Other Indebtedness.
Other than the Loan, Borrower has not incurred any debt other than (i) unsecured
trade debt incurred in the ordinary course of business and (ii) subordinate
intercompany debt.
6.1.15.    Solvency.
Borrower (in the aggregate), Guarantor and Sponsor are Solvent. After giving
effect to the transactions contemplated by the Loan Documents, including the
Loan incurred thereunder and the Liens granted to and for the benefit of Lender,
Borrower (in the aggregate), Guarantor and Sponsor will be Solvent. Borrower has
not entered into this Credit Agreement or any Loan Document with the actual
intent to hinder, delay, or defraud any creditor, and Borrower has received
reasonably equivalent value in exchange for its obligations under the Loan
Documents. Borrower does not intend to, and Borrower does not believe that it
will, incur debts and liabilities beyond its ability to pay such debts as they
mature (taking into account the timing and amounts to be payable on or in
respect of obligations of Borrower).
6.1.16.    Representations and Warranties in the Loan Documents.

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All representations and warranties made by Borrower (or any of its Affiliates)
in any Loan Document, or certificates delivered in connection therewith, are
true, accurate and correct in all material respects.
6.1.17.    No Bankruptcy Filing.
Borrower is not contemplating either the filing of a petition by it under any
state or federal bankruptcy or insolvency laws or the liquidation of all or a
major portion of its assets or property of Borrower (except pursuant to a
Sponsor Liquidity Event), and Borrower has no knowledge of any Person
contemplating the filing of any such petition against Borrower.
6.1.18.    Formation.
Each Borrower was formed in the State of Delaware unless otherwise noted in the
applicable Loan Agreement.
6.1.19.    Compliance.
To Borrower’s Knowledge after due inquiry, Borrower, each Mortgaged Property and
the use thereof and operations thereat by Borrower, comply in all material
respects with all applicable Laws. Borrower is not in default or violation of
any order, writ, injunction, decree or demand of any Official Body, the
violation of which is reasonably likely to result in a Material Adverse Change.
To Borrower’s Knowledge after due inquiry, all required permits, licenses, and
certificates for Borrower’s lawful use and operation of the Collateral Pool
Properties, including, but not limited to, certificates of occupancy, apartment
licenses, or the equivalent have been obtained and are in full force and effect.
6.1.20.    Not a Foreign Person.
Borrower is not a “foreign person” within the meaning of Section 1445(f)(3) of
the Internal Revenue Code.
6.1.21.    Labor Matters.
Borrower is not a party to any collective bargaining agreements.
6.1.22.    No Liabilities.
Borrower has no liabilities or obligations including, without limitation,
contingent obligations (including, without limitation, liabilities or
obligations in tort, in contract, at law, in equity, pursuant to a statute or
regulation, or otherwise) prohibited by this Agreement.
6.1.23.    Intellectual Property.

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All trademarks, trade names and service marks that Borrower owns or has pending,
or under which Borrower is licensed, are in good standing and uncontested.
Borrower has not infringed, is not infringing, and has not received notice of
infringement with respect to any asserted trademarks, trade names or service
marks of others. To Borrower’s Knowledge there is no infringement by others of
any trademarks, trade names or service marks of Borrower.
6.1.24.    Conduct of Business.
Borrower does not conduct its business “also known as”, “doing business as” or
under any other name.
6.1.25.    No Default.
The execution, delivery and performance of the obligations imposed on Borrower,
if any, under this Agreement, the Revolving Credit Note and the other Loan
Documents will not cause Borrower to be in default under the provisions of any
agreement, judgment or order to which Borrower is a party or by which Borrower
is bound. There is no litigation or other claim pending before any court or
administrative or governmental body or overtly threatened by a written
communication against Borrower, any Mortgaged Property, or any other property of
Borrower which would result in a Material Adverse Change or which is not covered
by insurance.
6.1.26.    Intentionally Omitted.
6.1.27.    Authorized Officer/Authorized Representative.
The officers and employees of Borrower who are now (or in the future become)
Authorized Officers of Borrower (i) have direct supervisory and managerial
control over the Borrower and the Collateral Pool Properties, subject to the
management thereof in accordance with the terms of the Loan Documents, and (ii)
are familiar with the organization and operations of Borrower and with the
operations of the Collateral Pool Properties.
6.1.28.    Fraudulent Conveyances.
Borrower has not entered into any agreements, transactions or series of
transactions with the intent to hinder, delay, or defraud any creditor, and
Borrower has not entered into any agreements, transactions or series of
transactions other than for valid consideration of reasonably equivalent value
in exchange for its obligations thereunder.
6.1.29.    No Existing Material Adverse Circumstances.
As of the date hereof, there exists no set of circumstances which, had such
circumstances arisen subsequent to the date hereof, would constitute a Material
Adverse Change.

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6.2.    Updates.
Borrower shall provide with each Loan Request that will result in an increase in
the Loan, written revisions to any representations or warranties in this
Agreement which have become outdated or incorrect in any material respect. In
addition, should any such updates, corrections or additions relate to a matter
which would be a Material Adverse Change, Borrower shall promptly provide Lender
in writing with such revisions as may be necessary or appropriate, to correct or
update same. Notwithstanding the providing of revised information, a breach of
warranty or representation resulting from the prior inaccuracy or incompleteness
shall not be deemed to have been cured thereby or waived by Lender unless and
until Lender, in its sole and absolute discretion, shall have accepted in
writing such revisions or updates; further provided that no representation or
warranty shall be deemed to have been updated by any such revision unless and
until Lender funds the additional Loan Request.
6.3.    Survival of Representations and Warranties.
Borrower agrees that (i) all of the representations and warranties of Borrower
set forth in this Agreement and in the other Loan Documents delivered on the
Closing Date are made as of the Closing Date (except as expressly otherwise
provided) and (ii) all representations and warranties made by Borrower shall
survive the delivery of the Revolving Credit Note and continue (a) for so long
as any amount remains owing to Lender under this Agreement, the Revolving Credit
Note or any of the other Loan Documents or (b) until the date on which Lender
releases all assets in the Collateral Pool from any Lien securing the Loan
Documents pursuant to the provisions of Section 2.10 or Section 2.15, whichever
is later but in any event not later than the date the Agreement is terminated
pursuant to Section 2.13. All representations, warranties, covenants and
agreements made in this Agreement or in the other Loan Documents shall be deemed
to have been relied upon by Lender notwithstanding any investigation heretofore
or hereafter made by Lender or on its behalf.
7.    COVENANTS
7.1.    Covenants.
Borrower covenants and agrees that until the later of (i) payment in full of the
Loan and interest thereon, and satisfaction of all of the other Obligations of
Borrower under the Loan Documents and (ii) the Expiration Date, Borrower shall
comply at all times with the following covenants:
7.1.1.    Preservation of Existence.
Borrower shall, and shall cause each of its members, partners, Sponsor and
Guarantor to, maintain its legal existence as a corporation, general or limited
partnership or limited liability company and its license or qualification and
good standing in each jurisdiction in which its ownership

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or lease of property or the nature of its business makes such license or
qualification necessary unless the failure to maintain the same shall not result
in a Material Adverse Change to Borrower or any Mortgaged Property.
7.1.2.    Subsequent Periodic Valuations.
Borrower shall cooperate with Lender and its agents and provide such information
in its possession as such parties shall reasonably require to complete a new
Valuation for each Mortgaged Property.
7.1.3.    Special ERISA Related Covenants.
The covenants set forth in this Section 7.1.3, shall only apply to the extent
Borrower is at any time and from time to time subject to the provisions of
ERISA.
7.1.3.1.    Borrower shall at all times be a “real estate operating company”
within the meaning of such term contained in 29 CFR § 2510.3-101(d) or an entity
whose underlying assets are not deemed to be assets of a Pension Plan as defined
in Section 3(3) of ERISA.
7.1.3.2.    Borrower shall, and shall cause each other member of the ERISA Group
to, comply with ERISA, the Internal Revenue Code and other applicable Laws
applicable to Pension Plans and Benefit Arrangements. Without limiting the
generality of the foregoing, Borrower shall cause all of its Pension Plans and
all Pension Plans maintained by any member of the ERISA Group to be funded in
accordance with the minimum funding requirements of ERISA and shall make, and
cause each member of the ERISA Group to make, in a timely manner, all
contributions due to Pension Plans, Benefit Arrangements and Multiemployer
Plans.
7.1.3.3.    Borrower and members of the ERISA Group shall not:
(i)    fail to satisfy the minimum funding requirements of ERISA and the
Internal Revenue Code with respect to any Pension Plan;
(ii)    request a minimum funding waiver from the Internal Revenue Service with
respect to any Pension Plan;
(iii)    engage in a Prohibited Transaction with any Pension Plan, Benefit
Arrangement or Multiemployer Plan which, alone or in conjunction with any other
circumstances or set of circumstances resulting in liability under ERISA, would
constitute a Material Adverse Change;
(iv)    permit the aggregate actuarial present value of all benefit liabilities
(whether or not vested) under each Pension Plan, determined on a plan
termination basis, as disclosed in the most recent actuarial report completed
with respect to such Pension Plan,

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to exceed, as of any actuarial valuation date, the fair market value of the
assets of such Pension Plan;
(v)    fail to make when due any contribution to any Multiemployer Plan that
Borrower or any member of the ERISA Group may be required to make under any
agreement relating to such Multiemployer Plan, or any Law pertaining thereto;
(vi)    withdraw (completely or partially) from any Multiemployer Plan or
withdraw (or be deemed under Section 4062(e) of ERISA to withdraw) from any
Multiple Employer Pension Plan (as such term is defined in ERISA), where any
such withdrawal is likely to result in a material liability of Borrower or any
member of the ERISA Group;
(vii)    terminate, or institute proceedings to terminate, any Pension Plan,
where such termination is likely to result in a material liability to Borrower
or any member of the ERISA Group;
(viii)    make any amendment to any Pension Plan with respect to which security
is required under Section 307 of ERISA; or
(ix)    fail to give any and all notices and make all disclosures and
governmental filings required under ERISA or the Internal Revenue Code, where
such failure is likely to result in a Material Adverse Change.
7.1.4.    Further Documentation.
In the event any further documentation or information is required by Lender to
enable Lender to sell the Loan, Borrower shall provide, or cause to be provided
to Lender, at Borrower’s sole cost and expense, such documentation or
information. Borrower shall execute and deliver to Lender such documentation,
including, but not limited to, any amendments, corrections, deletions or
additions to this Agreement, the Revolving Credit Note, and the other Loan
Documents as is required by Lender; provided that Borrower and Lender shall not
be required to do anything that has the effect of (i) materially increasing any
obligation undertaken by or imposed under the Loan Documents as executed, (ii)
changing the material, economic or other business terms set forth in the Loan
Documents, or (iii) imposing on Borrower or Guarantor greater liability or
obligation under the Loan Documents than as set forth in the Agreement, the
Revolving Credit Note or any other Loan Documents.
7.1.5.    Intentionally Omitted.
7.1.6.    Enforceability of Loan Documents.
In the event that any of the Loan Documents shall cease to be legal, valid and
binding agreements enforceable against the party executing the same or such
party’s successors and assigns

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(as permitted under the Loan Documents) in accordance with the respective terms
thereof, resulting in the failure to provide the practical benefit of the
respective Liens, security interests, rights, titles, interests, remedies,
powers or privileges intended to be created thereby (except to the extent that
enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar Laws affecting the enforceability of creditors’
rights generally or limiting the right to specific performance) or shall in any
way be terminated (except in accordance with its terms) or become or be declared
ineffective or inoperative or shall in any way be challenged or contested,
resulting in the failure to provide the practical benefit of the respective
Liens, security interests, rights, titles, interests, remedies, powers or
privileges intended to be created thereby, Borrower shall use best efforts to
cure any such defect(s) in such Loan Document(s), provided that if Borrower is
unable to cure any such defect(s) relating to Borrower, any Affiliate, the Loan
Documents or the applicable Collateral Pool Properties within thirty (30) days
Lender may in its discretion, upon ten (10) days’ Notice to Borrower, accelerate
Borrower’s obligations under the Revolving Credit Note but without payment of
any prepayment or other premium or any amount due pursuant to Section 2.13 other
than Accrued Interest.
7.1.7.    ERISA Matters.
The provisions set forth in this Section 7.1.7, shall only apply to the extent
Borrower is at any time and from time to time subject to the provisions of
ERISA. In the event that any of the following occurs: (i) any Reportable Event,
which Lender determines in good faith constitutes grounds for the termination of
any Pension Plan by the PBGC or the appointment of a trustee to administer or
liquidate any Pension Plan, shall have occurred and be continuing; (ii)
proceedings shall have been instituted or other action taken to terminate any
Pension Plan, or a termination notice shall have been filed with respect to any
Pension Plan; (iii) a trustee shall be appointed to administer or liquidate any
Pension Plan; (iv) the PBGC shall give notice of its intent to institute
proceedings to terminate any Pension Plan or Pension Plans or to appoint a
trustee to administer or liquidate any Pension Plan; and, in the case of the
occurrence of (i), (ii), (iii) or (iv) above, Lender determines in good faith
that the amount of Borrower’s liability is likely to cause a Material Adverse
Change; (v) Borrower or any member of the ERISA Group shall fail to make any
contributions when due to a Pension Plan or a Multiemployer Plan; (vi) Borrower
or any member of the ERISA Group shall make any amendment to a Pension Plan with
respect to which security is required under Section 307 of ERISA; (vii) Borrower
or any member of the ERISA Group shall withdraw completely or partially from a
Multiemployer Plan; or (viii) any applicable Law, rule or regulation is adopted,
changed or interpreted by any governmental authority or agency or court with
respect to or otherwise affecting one or more Pension Plans, Multiemployer Plans
or Benefit Arrangements; and, with respect to any of the events specified in
(v), (vi), (vii) or (viii), Lender determines in good faith that any such
occurrence would be reasonably likely to materially and adversely affect the
total enterprise represented by Borrower and the other members of the ERISA
Group, Borrower shall use commercially reasonable efforts to cure such
occurrence(s), provided that if Borrower is

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unable to cure any such occurrence(s) within thirty (30) days, Lender may in its
discretion, upon ten (10) days’ Notice to Borrower, accelerate Borrower’s
obligations under the Revolving Credit Note but without payment of any Early
Termination Fee.
7.2.    Notice of Material Adverse Change.
Borrower shall promptly notify Lender of any Material Adverse Change affecting
Borrower, any Mortgaged Property, this Agreement or the other Loan Documents
taken as a whole.
7.3.    Annual Evaluation.
Borrower shall deliver and cause Guarantor to deliver to Servicer by no later
than sixty (60) days prior to the first anniversary of the Closing Date and
thereafter no later than ninety (90) days after the most recent calendar year
end dated as of December 31st, the items set forth in clauses (i) through (iv)
below for the purpose of Lender determining that Guarantor satisfies the Net
Worth and Liquidity requirements set forth in Section 2.18. Borrower shall and
will cause Guarantor to comply with this section annually thereafter.
(i)    the most recent fiscal year-end financial statements for (a) Borrower,
and (b) Guarantor (the “Required Financial Statements”), which Required
Financial Statements must (x) comply with the requirements of the then current
version of the Guide in accordance with GAAP, and if a conflict between GAAP and
the Guide exists, GAAP shall control, (y) include a balance sheet, income
statement and statement of cash flows, each in form and substance reasonably
acceptable to Lender and (z) be certified by an Authorized Officer of Borrower
and Sponsor, as applicable;
(ii)    a complete Freddie Mac Form 1115 (which then current Freddie Mac Form
1115 will be provided by Servicer) for Borrower and Guarantor, dated as of
December 31st, including, without limitation, fully completed net worth,
liquidity and contingent liabilities sections;
(iii)    a complete Freddie Mac Form No. 1116 (which then current Freddie Mac
Form 1116 will be provided by Servicer) for the Guarantor, dated as of December
31st as certified; and
(iv)    a statement showing any change in the (a) Liquidity, (b) Net Worth, (c)
contingent liabilities and (d) value of encumbered assets as set forth in Form
1116 of Guarantor (in each case, as determined in accordance with Freddie Mac
Form 1115), dated as of December 31st, as certified by an Authorized Officer of
Guarantor.

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8.    DEFAULT
8.1.    Events of Default.
The occurrence or existence of any one or more of the following events or
conditions (whatever the reason therefor and whether voluntary, involuntary or
effected by operation of Law) shall be an “Event of Default”:
8.1.1.    Payments Under Loan Documents.
Borrower shall fail to pay any principal under any Borrowing Tranche (including
scheduled installments, mandatory prepayments or the payment due at maturity),
or shall fail to pay any interest on the Loan or any other amount owing
hereunder or under any other Loan Documents after such principal, interest or
other amount becomes due in accordance with the terms hereof or thereof or shall
fail to pay to Lender an amount which is payable under this Agreement or, any
other Loan Document “upon demand”, and such “upon demand payment” is not made
within five (5) days of either written Notice to Borrower or request for such
payment as set forth in any invoice or monthly statement provided to Borrower.
8.1.2.    Breach of Representation or Warranty.
Subject to Section 1.2.10, any representation or warranty made at any time by
Borrower herein or in any other Loan Document, or in any certificate, other
instrument or statement furnished pursuant to the provisions hereof or thereof,
shall prove to have been false or misleading in any material respect as of the
time it was made or furnished and the result of such false or misleading
representation, warranty, certificate, other instrument or statement is a
Material Adverse Change which is not cured within thirty (30) days after written
Notice thereof from Lender to Borrower, or within such additional reasonable
time as may be necessary, in Lender’s judgment to cure such breach, in the event
Borrower commences such cure within such thirty (30) day period and thereafter
diligently pursues such cure, not to exceed ninety (90) additional days;
8.1.3.    Facility DSCR/LTV Ratio.
Either the Facility DSCR fails to comply with the requirements of Section
2.5.3.2 or the LTV Ratio exceeds the ratio permitted pursuant to Section 2.5.3.1
for a period of ninety (90) consecutive days from the date of Borrower’s receipt
of Notice of such non-compliance.
8.1.4.    Breach of Covenant.
Borrower shall default in the observance or performance of any covenant,
condition or provision hereof or under any other Loan Document, which default is
not otherwise specified as an “Event of Default” under (i) the provisions of
this Article 8 or (ii) Section 9.01 of any Loan

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Agreement with respect to the initial Collateral Pool Properties (or the same
sections or any similar sections of any Loan Agreement with respect to any
future Mortgaged Property(ies)) and is not cured within thirty (30) days after
Notice thereof from Lender to Borrower of such default, or within such
additional reasonable time as may be necessary in Lender’s judgment to cure such
breach, in the event Borrower commences such cure within such thirty (30) day
period and thereafter diligently pursues such cure for a period not to exceed
sixty (60) additional days (such cure period to be applicable only in the event
such default can be remedied by corrective action of Borrower as determined by
Lender in its reasonable discretion) provided that, no such Notice or grace
period shall apply in the case of any default which could, in Lender’s judgment,
absent immediate exercise by Lender of a right or remedy under this Agreement or
any of the other Loan Documents, result in additional harm to Lender, impairment
of the Revolving Credit Note, or any rights of Lender under this Agreement or
any security given under any other Loan Document;
8.1.5.    Event of Default under the Loan Documents.
Borrower shall be in default under any provision of the Revolving Credit Note,
or any other Loan Document, including, without limitation, any Security
Instrument, beyond any applicable notice and cure period;
8.1.6.    Final Judgments or Orders.
Any final judgments or orders for the payment of money in excess of Five Hundred
Thousand and NO/100 Dollars ($500,000) in the aggregate shall be entered against
Borrower by a court having jurisdiction in the premises, which judgment is not
discharged, vacated, bonded or stayed pending appeal within a period of thirty
(30) days from the date of entry;
8.1.7.    Notice of Lien or Assessment.
Subject to Section 1.2.10, a notice of Lien or assessment in excess of One
Million and NO/100 Dollars ($1,000,000) which is not a Permitted Exception is
filed of record with respect to all or any part of any of Borrower’s assets, or
any taxes or debts owing at any time or times hereafter to the United States, or
any department, agency or instrumentality thereof, or by any state, county,
municipal or other governmental agency, including the PBGC, becomes payable and
the same is not paid or otherwise discharged within thirty (30) days after the
same becomes payable, unless the same is being contested in accordance with the
Loan Documents;
8.1.8.    Insolvency.
Borrower ceases to be Solvent or admits in writing its inability to pay its
debts as they mature;

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8.1.9.    Cessation of Business.
Borrower ceases to conduct the business of Borrower, or Borrower is enjoined,
restrained or in any way prevented by court order from conducting all or any
material part of the business of Borrower, and such injunction, restraint or
other preventive order is not dismissed within thirty (30) days after the entry
thereof;
8.1.10.    Lien Priority.
The Liens granted to and for the benefit of Lender do not constitute valid first
priority Liens (subject to Permitted Exceptions) under applicable Laws and such
default shall continue unremedied for a period of thirty (30) Business Days
after Borrower’s Knowledge of the occurrence thereof or such additional
reasonable time period necessary to cure such default, in the event Borrower
commences such cure within such thirty (30) day period and thereafter diligently
pursues such cure for a period not to exceed sixty (60) additional days (such
cure period to be applicable only in the event such default can be remedied by
corrective action of Borrower as determined by Lender in its reasonable
discretion); or
8.1.11.    Bankruptcy and Other Proceedings.
Borrower voluntarily files for bankruptcy protection under the United States
Bankruptcy Code or 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 an
involuntary case is commenced against Borrower by any creditor (other than
Lender) of Borrower pursuant to the United States Bankruptcy Code or other
federal or state law affecting debtor and creditor rights and is not dismissed
or discharged within ninety (90) days after filing.
8.1.12.    Material Adverse Change.
There shall occur a Material Adverse Change which is not corrected to the
reasonable satisfaction of Lender within thirty (30) days after the occurrence
of such Material Adverse Change, or such additional reasonable time period
necessary to cure such Material Adverse Change, in the event Borrower commences
such cure within such thirty (30) day period and thereafter diligently pursues
such cure for a period not to exceed thirty (30) additional days (such cure
period to be applicable only in the event such default can be remedied by
corrective action of Borrower to the satisfaction of Lender as determined by
Lender in its reasonable discretion). Provided however, a Material Adverse
Change pursuant to subsections (iv) or (v) of the definition of Material Adverse
Change shall not constitute an Event of Default if (w) Lender determines that
Borrower is in compliance with Section 2.5.3, (x) Guarantor complies with the
Minimum Net Worth and Liquidity requirements set forth in Section 2.18 as of the
date of Lender’s Notice to Borrower of such perceived Material Adverse Change
pursuant to subsection (iv) of the definition of Material Adverse Change,

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(y) all amounts due under this Agreement, the Note and the other Loan Documents
are current, and (z) the Material Adverse Change does not involve fraud or
written material misrepresentation.
8.2.    Consequences of Event of Default.
8.2.1.    Remedies Cumulative.
Upon an Event of Default under Section 8.1, Lender shall be entitled to all of
the rights and remedies granted to Lender under the Loan Documents and
applicable Law, all of which rights and remedies shall be cumulative and
non-exclusive, to the extent permitted by applicable Law. Following an Event of
Default, the Loan may be reinstated only upon the express written approval of
Lender, to be granted, withheld or conditioned in its sole discretion.
8.2.2.    Acceleration of Loan.
Upon an Event of Default, Lender shall be entitled, without limitation, to (a)
accelerate the Loan, and to (b) collect as liquidated damages (i) any Accrued
Interest applicable to any outstanding Base Rate Borrowing Tranches and (ii) an
Early Termination Fee, each in accordance with Section 2.13.4.
8.3    Notice of Sale.
Any notice required to be given by Lender of a sale, lease, or other disposition
of any Collateral that is personal property or any other intended action by
Lender under the Uniform Commercial Code, if given at least ten (10) Business
Days prior to such proposed action, shall constitute commercially reasonable
notice thereof to Borrower.
9.    MISCELLANEOUS
9.1.    Cooperation by Borrower; Borrower’s Obligations.
Borrower grants to Lender the right to distribute on a confidential basis
financial and other information concerning Borrower, Sponsor, Guarantor or
Borrower’s partners or members, the Collateral Pool Properties, and other
pertinent information with respect to the Loan to any party purchasing
securities issued by Lender; provided that the recipient is informed that such
information is confidential and that Lender use commercially reasonable efforts
to get the recipient to agree to be bound by this Section 9.1.
9.2.    Successors and Assigns.
This Agreement shall be binding upon and shall inure to the benefit of Lender,
Borrower and their respective successors and assigns, except that Borrower may
not assign or transfer any of its respective rights or Obligations hereunder or
any interest herein.

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9.3.    Modifications, Amendments or Waivers.
Lender and Borrower may from time to time enter into written agreements amending
or changing any provision of this Agreement or any other Loan Document or the
rights of Lender or Borrower hereunder or thereunder, or may grant written
waivers or consents to a departure from the due performance of the Obligations
of Borrower hereunder or thereunder. Any such written agreement, waiver or
consent (i) shall be effective to bind Lender and Borrower and (ii) shall be
accompanied in each instance by a written affirmation executed by any guarantors
consenting to such actions.
9.4.    Forbearance.
Lender may (but shall not be obligated to) agree with Borrower, from time to
time, and without giving notice to, or obtaining the consent of, or having any
effect upon the obligations of, any guarantor or other third party obligor, to
take any of the following actions: extend the time for payment of all or any
part of the Loan; reduce the payments due under this Agreement, the Revolving
Credit Note, or any other Loan Document; release anyone liable for the payment
of any amounts under this Agreement, the Revolving Credit Note, or any other
Loan Document; modify the terms and time of payment of the Loan; join in any
extension or subordination agreement; release any Mortgaged Property; take or
release other or additional security; modify the rate of interest or period of
amortization of the Revolving Credit Note or change the amount of the monthly
installments payable under the Revolving Credit Note; and otherwise modify this
Agreement, the Revolving Credit Note, or any other Loan Document.
Any forbearance by Lender in exercising any right or remedy under the Revolving
Credit Note, this Agreement, or any other Loan Document or otherwise afforded by
applicable Law, shall be in writing and shall not be deemed a waiver of or
preclude the exercise of any right or remedy except as expressly provided in
such writing. The acceptance by Lender of payment of all or any part of the Loan
after the due date of such payment, or in an amount which is less than the
required payment, shall not be a waiver of Lender’s right to require prompt
payment when due of all other payments on account of the Loan or to exercise any
remedies for any failure to make prompt payment. Enforcement by Lender of any
security for the Loan shall not constitute an election by Lender of remedies so
as to preclude the exercise of any other right available to Lender. Lender’s
receipt of any awards or proceeds shall not operate to cure or waive any Event
of Default except to the extent of satisfaction of the Loan.
9.5.    Remedies Cumulative.
Each right and remedy provided in this Agreement is distinct from all other
rights or remedies under this Agreement or any other Loan Document or afforded
by applicable Law, and each shall be cumulative and may be exercised
concurrently, independently, or successively, in any order.

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9.6.    Reimbursement and Indemnification of Lender and Servicer by Borrower;
Taxes.
Borrower agrees unconditionally upon demand to pay or reimburse to Lender and
Servicer and to hold Lender and Servicer harmless against (i) liability for the
payment of all reasonable out-of-pocket costs, expenses and disbursements
(including fees and expenses of counsel for Lender and Servicer, incurred by
Lender and Servicer (a) in connection with the administration and interpretation
of this Agreement, and other instruments and documents to be delivered
hereunder, (b) relating to any amendments, waivers or consents pursuant to the
provisions hereof, (c) in connection with the enforcement of this Agreement or
any other Loan Document, or collection of amounts due hereunder or thereunder or
the proof and allowability of any claim arising under this Agreement or any
other Loan Document, whether in bankruptcy or receivership proceedings or
otherwise, and (d) in any workout or restructuring or in connection with the
protection, preservation, exercise or enforcement of any of the terms hereof or
of any rights hereunder or under any other Loan Document or in connection with
any foreclosure, collection or bankruptcy proceedings, or (ii) all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind or nature whatsoever which may be imposed
on, incurred by or asserted against Lender or Servicer, in its capacity as such,
in any way relating to or arising out of this Agreement or any other Loan
Documents or any action taken or omitted by Lender or Servicer hereunder or
thereunder, provided that no Borrower shall be liable for any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements (A) if the same results from Lender’s
negligence or willful misconduct or breach of this Agreement, (B) if the same
results from any action taken with respect to a Mortgaged Property after Lender
has acquired title to such Mortgaged Property in a foreclosure proceeding or
deed in lieu accepted by Lender , (C) if Borrower was not given notice of the
subject claim and the opportunity to participate in the defense thereof, at its
expense (except that Borrower shall remain liable to the extent such failure to
give notice does not result in a loss to Borrower), or (D) if the same results
from a compromise or settlement agreement entered into without the consent of
Borrower, which shall not be unreasonably withheld. Borrower agrees
unconditionally to pay all stamp, document, transfer, mortgage registration,
recording or filing taxes or fees and similar impositions now or hereafter
determined by Lender to be payable in connection with this Agreement or any
other Loan Document, and Borrower agrees unconditionally to hold Lender and
Servicer harmless from and against any and all present or future claims,
liabilities or losses with respect to or resulting from any omission to pay or
delay in paying any such taxes, fees or impositions.
9.7.    Holidays.
Whenever the funding of a Borrowing Tranche hereunder shall be due on a day
which is not a Business Day such payment shall be due on the next Business Day
and such extension of time shall be included in computing interest and fees,
except that the Loan shall be due on the Business Day preceding the Expiration
Date if the Expiration Date is not a Business Day. Whenever any

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payment or action to be made or taken hereunder (other than payment of the Loan)
shall be stated to be due on a day which is not a Business Day, such payment or
action shall be made or taken on the next following Business Day, and such
extension of time shall not be included in computing interest or fees, if any,
in connection with such payment or action.
9.8.    Notices.
(a)    All Notices under or concerning this 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 by fax or other electronic transmittal, (to
be followed by a second form of delivery if by electronic transmittal; provided
however, such failure to do so will not constitute Notice being improperly
provided except for a Notice of an Event of Default), (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:    
PNC Bank, National Association
26901 Agoura Road, Suite 200
Calabasas Hills, CA 91301
Attention: Loan Servicing Manager

If to Borrower:    
STAR Delano, LLC
STAR Meadows, LLC
c/o Steadfast Companies
18100 Von Karman Avenue
Suite 500
Irvine, CA 92612
Attention: Ana Marie del Rio, General Counsel
Lender shall endeavor to give the individuals or entities listed below courtesy
copies of any notice given to Borrower by Lender or Servicer, at the address set
forth below; provided, however, that failure to provide such courtesy copies of
Notices shall not affect the validity or sufficiency of any Notice to Borrower,
shall not affect Lender’s rights and remedies hereunder or under any other Loan
Documents, nor subject Lender to any claims by or liability to Borrower or any
other individual or entity, it being acknowledged and agreed that no individual
or entity listed below is a third-party beneficiary to any of the Loan
Documents.

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Steadfast Companies
105 Oronoco Street, Suite 312
Alexandria, Virginia 22314
Attention: Ginger Davis, Associate General Counsel

(b)    Any party to this 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 9.8. Each party agrees that it will not refuse
or reject delivery of any Notice given in accordance with this Section 9.8, 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 9.8 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 Revolving Credit Note and any other Loan Document
that does not specify how Notices are to be given will be given in accordance
with this Section 9.8.
(d)    Any Notice given by or delivered to any one Borrower at the address and
in the manner required herein shall be deemed given by or delivered to, as
applicable, all parties constituting the Borrower hereunder.
9.9.    Severability.
The invalidity or unenforceability of any provision of this Agreement shall not
affect the validity or enforceability of any other provision, and all other
provisions shall remain in full force and effect. This Agreement contains the
entire agreement between the parties as to the rights granted and the
obligations assumed in this Agreement. This Agreement may not be amended or
modified except by a writing signed by the party against whom enforcement is
sought.
9.10.    Governing Law; Consent to Jurisdiction and Venue.
This Agreement, and any Loan Document which does not itself expressly identify
the Law that is to apply to it, shall be governed by the Laws of the
Commonwealth of Virginia. Borrower and Lender agree that any controversy arising
under or in relation to this Agreement or any other Loan Document which does not
expressly identify the Law that is to apply to it, shall be litigated in the
courts located in the Commonwealth of Virginia. The state and federal courts and
authorities with jurisdiction in the Commonwealth of Virginia shall have
non-exclusive jurisdiction over all controversies which shall arise under or in
relation to this Agreement. Borrower and Lender 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 Agreement is intended to limit
any right that Lender may have

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to bring any suit, action or proceeding relating to matters arising under this
Agreement in any court of any other jurisdiction.
9.11.    Prior Understanding.
This Agreement and the other Loan Documents supersede all prior understandings
and agreements, whether written or oral, between the parties hereto and thereto
relating to the transactions provided for herein and therein, including any
prior confidentiality agreements and commitments.
9.12.    Duration; Survival.
All representations and warranties of Borrower contained herein or made in
connection herewith shall survive the funding of the initial advance hereunder
and shall not be waived by the execution and delivery of this Agreement, any
investigation by Lender, the funding of any Borrowing Tranche, or payment in
full of the Loan (subject to the terms and provisions of Section 6.3 herein).
All covenants and agreements of Borrower contained herein shall continue in full
force and effect from and after the date hereof so long as Borrower may borrow
hereunder and until the later of (i) the Expiration Date or (ii) the payment in
full of the Obligations. All covenants and agreements of Borrower contained
herein relating to the payment of principal, interest, premiums, additional
compensation or expenses and indemnification, including those set forth in the
Revolving Credit Note, shall survive payment in full of the Loan and the
Expiration Date. Notwithstanding any of the foregoing to the contrary, in no
event shall (a) the release of Lender’s Lien on any Mortgaged Property, (b) the
maturity, expiration or early termination of the Revolving Credit Note or (c)
the expiration or early termination of this Agreement, be deemed to terminate
any covenants, agreements, representations or warranties contained in this
Agreement, the Revolving Credit Note or any of the other Loan Documents, to the
extent that such covenant, agreement, representation or warranty, shall, by its
terms survive the, release, maturity, expiration or early termination of this
Agreement, the Revolving Credit Note or any of the other Loan Documents.
9.13.    Disclosure of Information.
Lender may furnish information regarding Borrower or the Collateral Pool
Properties to third parties with an existing or prospective interest in the
servicing, enforcement, evaluation, performance, purchase or securitization of
the Loan, including, but not limited to, trustees, master servicers, special
servicers, rating agencies, and organizations maintaining databases on the
underwriting and performance of multifamily mortgage loans. Borrower irrevocably
waives any and all rights it may have under applicable Law to prohibit such
disclosure, including, but not limited to, any right of privacy.
9.14.    Exceptions.

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The representations, warranties and covenants contained herein shall be
independent of each other, and no exception to any representation, warranty or
covenant shall be deemed to be an exception to any other representation,
warranty or covenant contained herein unless expressly provided, nor shall any
such exceptions be deemed to permit any action or omission that would be in
contravention of applicable Law.
9.15.    Relationship of Parties; No Third Parties Benefited.
The relationship between Lender and Borrower shall be solely that of creditor
and debtor, respectively, and nothing contained in this Agreement shall create
any other relationship between Lender and Borrower. No creditor of any party to
this Agreement and no other person shall be a third party beneficiary of this
Agreement or any other Loan Document. Without limiting the generality of the
preceding sentence, (i) an agreement, if any, including any Servicing Agreement,
between Lender and Servicer for interim advancement of funds shall constitute a
contractual obligation of such Servicer that is independent of the obligation of
Borrower for the payment of the Loan, (ii) Borrower shall not be a third party
beneficiary of any Servicing Agreement, and (iii) no payment by Servicer under
any such agreement will reduce the outstanding principal amount of the Loan or
any interest accrued thereon.
9.16.    Authority to File Notices.
Borrower irrevocably appoints Lender as its attorney-in-fact, with full power of
substitution, to file for record, at Borrower’s cost and expense and in
Borrower’s name, any notices that Lender considers reasonably necessary or
desirable to protect the Collateral.
9.17.    WAIVER OF TRIAL BY JURY.
BORROWER AND LENDER EACH (A) COVENANTS AND AGREES NOT TO ELECT A TRIAL BY JURY
WITH RESPECT TO ANY ISSUE ARISING OUT OF THIS AGREEMENT OR THE RELATIONSHIP
BETWEEN THE PARTIES AS BORROWER AND LENDER THAT IS TRIABLE OF RIGHT BY A JURY
AND (B) WAIVES ANY RIGHT TO TRIAL BY JURY WITH RESPECT TO SUCH ISSUE TO THE
EXTENT THAT ANY SUCH RIGHT EXISTS NOW OR IN THE FUTURE. THIS WAIVER OF RIGHT TO
TRIAL BY JURY IS SEPARATELY GIVEN BY EACH PARTY, KNOWINGLY AND VOLUNTARILY WITH
THE BENEFIT OF COMPETENT LEGAL COUNSEL.
AMDR
Initials of the Authorized Officer of Borrower

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9.18.    Interpretation.
Whenever the context requires, all words used in the singular will be construed
to have been used in the plural, and vice versa, and each gender will include
any other gender. The captions of the articles, sections and schedules of this
Agreement are for convenience only and do not define or limit any terms or
provisions. In the event of a conflict between the terms of the other Loan
Documents and the terms of this Agreement, the terms of this Agreement shall
control.
9.19.    Brokerage Fee.
Borrower represents to Lender that no broker or other Person is entitled to a
brokerage fee or commission as a result of Borrower’s actions or undertakings in
connection with the financing contemplated hereunder and agrees to hold Lender
harmless from all claims for brokerage commissions which may be made as a result
of such actions or undertakings, if any. Borrower agrees to hold Lender harmless
from all claims for brokerage commissions which may be made as a result of
Borrower’s actions or undertakings in connection with the financing contemplated
hereunder.
9.20.    Advertising.
Lender may include the name of Borrower, the name and location of any Mortgaged
Property, the Commitment and the number of apartment units contained in any
Mortgaged Property on Lender’s client list and in any typical advertisement.
9.21.    Time of Essence.
Time is of the essence with respect to each obligation of Borrower and Lender
hereunder.
9.22.    Counterparts.
This Agreement may be executed by different parties hereto on any number of
separate counterparts, each of which, when so executed and delivered, shall be
an original, and all such counterparts shall together constitute one and the
same instrument.
9.23.    NOTICE OF FINAL AGREEMENT.
THIS AGREEMENT REPRESENTS THE FINAL AGREEMENT BETWEEN THE PARTIES HERETO AND MAY
NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL
AGREEMENTS OF THE PARTIES HERETO. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN
THE PARTIES HERETO.

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IN WITNESS WHEREOF, the parties hereto, by their officers thereunto duly
authorized, have executed this Agreement as of the day and year first above
written.
WITNESS:
 
 
BORROWER:
 
 
 
 
 
 
 
 
 
 
/s/ Linda Syharath
 
STAR DELANO, LLC
 
Print Name:
Linda Syharath
 
a Delaware limited liability company
 
 
 
 
 
 
 
 
 
 
 
By:
Steadfast Apartment Advisor, LLC,
 
 
 
 
a Delaware limited liability company,
 
 
 
 
its Manager
 
 
 
 
 
 
 
 
 
 
 
 
 
By:
/s/ Ana Marie del Rio
 
 
 
 
 
 
Name:
Ana Marie del Rio
 
 
 
 
 
Title:
Secretary
 

[Signatures Continue on the Following Page]

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WITNESS:
 
 
BORROWER:
 
 
 
 
 
 
 
 
 
 
/s/ Linda Syharath
 
STAR MEADOWS, LLC
 
Print Name:
Linda Syharath
 
a Delaware limited liability company
 
 
 
 
 
 
 
 
 
 
 
By:
Steadfast Apartment Advisor, LLC,
 
 
 
 
a Delaware limited liability company,
 
 
 
 
its Manager
 
 
 
 
 
 
 
 
 
 
 
 
 
By:
/s/ Ana Marie del Rio
 
 
 
 
 
 
Name:
Ana Marie del Rio
 
 
 
 
 
Title:
Secretary
 

[Signatures Continue on the Following Page]

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WITNESS:
 
 
LENDER:
 
 
 
 
 
 
 
 
 
 
/s/ Kathleen Poe
 
PNC BANK, NATIONAL ASSOCIATION
Print Name:
Kathleen Poe
 
a national banking association
 
 
 
 
 
 
 
 
 
 
 
By:
/s/ Todd Weaver
 
 
 
 
Todd Weaver
 
 
 
 
Senior Vice President
 
 
 
 
 
 
 
 
 

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SCHEDULE 1.1(A)

LIST OF COLLATERAL POOL PROPERTIES
AND ASSOCIATED INITIAL NET OPERATING INCOMES AND MARKET VALUES
Mortgaged Property
Initial Net Operating Income
Initial Market Value
Allocated Loan Amount
The Meadows at North Richland Hills

The Delano at North Richland Hills
$1,620,283.00

$2,032,562.00
$32,600,000.00

$38,500,000.00
$24,450,000.00

$28,875,000.00
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

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SCHEDULE 1.1(B)

LIST OF
COLLATERAL POOL PROPERTY DOCUMENTS
(a)    Multifamily Mortgage/Deed of Trust/Deed to Secure Debt, Assignment Of
Rents, Security Agreement and Fixture Filing
(b)    Multifamily Loan and Security Agreement
(c)    UCC-1 Financing Statements
(d)    Documents evidencing O & M Programs (if any)
(e)    Title insurance policy acceptable to Lender, in an amount equal to not
less than the Initial Market Value of such Mortgaged Property, which title
insurance shall include the following endorsements (where and if applicable):
(i) a tie-in or aggregate endorsement, (ii) a multiple foreclosure endorsement,
(iii) a first loss endorsement, (iv) a last dollar endorsement, (v) a variable
rate mortgage endorsement, and (vi) a revolving credit endorsement
(f)    Guaranty

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SCHEDULE 2.2

FORM OF
[SCHEDULED MATURITY DATE EXTENSION CONFIRMATION] OR [NET SPREAD TABLE AFTER
EXPANSION TO COMMITMENT CONFIRMATION]
[______________], 20[__]
[__________]
[__________]
[__________]
[__________]
Attention: [__________]

Ladies and Gentlemen:
Reference is made to that Credit Agreement dated as of [__________], as amended
(the “Credit Agreement”) initially by and between [__________], a [__________],
having an address at [__________] (“Borrower”) and [__________], a [__________],
having an address at [__________] (together with its successors and assigns,
“Lender”). Unless otherwise defined herein, terms defined in the Credit
Agreement are used herein with the same meanings.
Pursuant to Section 2.1.2 of the Credit Agreement, the Borrower has elected to
increase the Commitment as set forth in Section 2.1.2 of the Credit Agreement,
and the Net Spread applicable to any Borrowing Tranche on or after such increase
shall be as set forth on Exhibit A hereto.     OR
Pursuant to Section 2.2(b) of the Credit Agreement, the Extension Option has
been exercised, the Scheduled Maturity Date has been extended as set forth in
Section 2.2(b) of the Credit Agreement, and the Net Spread applicable to any
Borrowing Tranche on or after the initial Scheduled Maturity Date shall be as
set for the on Exhibit A hereto.
Sincerely,
LENDER:

_______________________, a _____________________________

By: __________________________
Name:
Title:

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[signatures continue on next page]

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ACKNOWLEDGED AND AGREED

BORROWER:

_______________________, a _____________________________

By: __________________________
Name:
Title:

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EXHIBIT A TO SCHEDULE 2.2

[NET SPREAD TABLE APPLICABLE DURING AN EXTENSION PERIOD] OR [NET SPREAD TABLE
APPLICABLE AFTER AN EXPANSION TO THE COMMITMENT]

Facility DSCR

Net Spread*

Margin*

Greater than or equal to [__] : 1.00 but less than [__]: 1.00
[_______]
[_______]
Greater than or equal to [__]: 1.00 but less than [___]: 1.00
[_______]
[_______]
Greater than or equal to [___] : 1.00
[_______]
[_______]

* The Net Spread and Margin set forth above each assumes that the Base Rate
Borrowing Tranche will have a one-month Interest Period. [The Net Spread and
Margin shall be increased by [__] basis points ([___]) for any Base Rate
Borrowing Tranche having a three-month Interest Period]

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[BORROWER MAY, SUBJECT TO LENDER’S CONSENT, REVISE THIS FORM OF LOAN REQUEST TO
PROVIDE FOR MULTIPLE BORROWING TRANCHES UNDER A SINGLE LOAN REQUEST FORM]
SCHEDULE 2.5

FORM OF
LOAN REQUEST
______________, 20__
[Lender’s Name and Address]
Attention:
Ladies and Gentlemen:
Reference is made to the Credit Agreement dated as of __________, 20____, as
amended (the “Credit Agreement”) by and between _________________________, a
______________________, having an address at
_________________________________________ (“Borrower”) and
_______________________, a ______________________ (“Lender”). Unless otherwise
defined herein, terms defined in the Credit Agreement are used herein with the
same meanings.
I, _______________, the _______________ of Borrower, a _______________, do
hereby certify on behalf of Borrower as of the date hereof, as follows:
Borrower is entitled to and hereby requests Lender to make an advance under the
Credit Agreement in the amount of $__________ (which must be greater than or
equal to _______________________ and 00/100 Dollars ($______________). Funds
should be delivered to Borrower by wire to the following account:
Bank Name and Location:     
ABA Number:     
Account Name:     
Account Number:     
Further Credit Instructions:     
Attention:     
1.    The requested date of the advance (the “Borrowing Date”) is
______________.

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2.    The Borrowing Tranche or [increase of an existing Borrowing Tranche as
requested herein] shall bear interest at (check one):
_____    Prime Rate*
_____    Base Rate
* Prime Rate is available only as specified in the Credit Agreement
3.    The Interest Period (if the Base Rate is selected) applicable to the
advance is (check one):
_____    one-month
_____    three-month*

*subject to a [___] ([__]) basis point ([____]) increase in the Margin otherwise
applicable to such Borrowing Tranche

4.    Borrower will (check one):
_____
Pay all interest due and payable under the Borrowing Tranche [requested herein]
or [as increased by this requested advance] in monthly installments pursuant to
the terms of the Credit Agreement.

_____
Prepay all interest for such Borrowing Tranche as of the Borrowing Date.

5.    If applicable, the Base Rate for the Base Rate Borrowing Tranche requested
hereunder shall be ___________ (_____%) consisting of a LIBOR Index Rate of
__________ percent (___ %) and a Margin of ________ (__%).

6.    Following the disbursement of the funds comprising the Borrowing Tranche
[requested herein] or [as increased as requested herein], the total number of
Borrowing Tranches outstanding will be ________(__), which is not more than
________ (___).
7.    If applicable (i.e. in the event of a Loan Request for [a Borrowing
Tranche] or [increase of an existing Borrowing Tranche], the maturity date of
the Interest Period of the Borrowing Tranche [requested herein] or [increased
herein] is (choose and complete one of the following):
____________, 20__ (which is the last day of the Interest Period, in the event
that such date is a Business Day)

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______________, 20__ (which is the Business Day following the last day of the
Interest Period, in the event that such date is not a Business Day).
8.    This request for an advance is made pursuant to and in accordance with the
provisions of the Credit Agreement. The proceeds of such advance are to be used
for a permitted purpose under Section 2.8 of the Credit Agreement.
9.    The principal amount outstanding under the Credit Agreement on the date
hereof, prior to any advance in response to this request, is $_____________.
10.    To the best of Borrower’s Knowledge following diligent inquiry, the
advance of the funds requested herein will not cause Borrower to be in
non-compliance with the Sublimits set forth in Section 2.5.3 of the Credit
Agreement.
11.    Guarantor is in compliance with the requirements set forth in Section
2.18 of the Credit Agreement relating to the Net Worth and Liquidity.
12.    To the best of Borrower’s Knowledge following diligent inquiry, the
computations set forth in Paragraphs [20] through [23] as certified by Servicer
are accurate.
13.    Except as set forth herein and approved by Lender, all of the covenants
and all of the representations and warranties contained in the Credit Agreement
and the other Loan Documents, and all of the other terms, covenants and
conditions contained in the Loan Documents continue to be materially true and
correct and continue to be complied with on the date hereof, and will continue
to be materially true and correct and will continue to be complied with as of
the date of, and subsequent to, the requested advance exceptions.
14.    No Potential Default or Event of Default has occurred and is continuing
under the Loan Documents.
15.    There has been no Material Adverse Change to any Mortgaged Property or
Borrower since the date of the last Loan Request that will cause Borrower to be
in violation of the Sublimits after the funding of the Borrowing Tranche
requested herein or will render the Base Rate requested herein inaccurate.
16.    All of the other terms and conditions set forth in the Credit Agreement
and the other Loan Documents pertaining to the Loan have been satisfied.
17.    All items that Borrower and Guarantor are required to furnish to Lender
pursuant to the Credit Agreement to accompany this request are true and complete
in all material respects.

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18.    The undersigned is an Authorized Officer of Borrower.
19.    Notice of this Loan Request shall be deemed received by Lender when (i)
sent by facsimile to (_____) ____-________ and (ii) verbally confirmed by
telephone call to either (when called in the following order of priority): (1)
__________ (__________), (2) __________ (__________), (3) __________
(__________) or such additional names and numbers as Lender may specify upon
prior written Notice to Borrower.
[The Loan Request continues on the following page]

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IN WITNESS WHEREOF, the undersigned has executed this Certificate this ______
day of ___________, ____.
BORROWER:

_______________________, a _____________________________

By:_________________________
Name:
Title:

As to item 11 set forth herein:

GUARANTOR:

Steadfast Apartment REIT, Inc., a
Maryland corporation

By: ___________________________

Name: _________________________

Title: __________________________

[The Loan Request continues on the following page]

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20.    The current LTV Ratio is ___________(__%), which is less than or equal to
the Maximum LTV Ratio specified in Section 2.5.3.1 of _________ percent (____%),
determined as follows:
A.
The current Loan balance
$_____________
B.
The current aggregate Market Value of the Collateral Pool
$____________
C.
Item A divided by Item B and then multiplied by 100% equals the LTV Ratio
____________%

21.    Following the disbursement of the funds comprising the Borrowing Tranche
[requested herein] or [increased herein], the LTV Ratio will equal
_________________(__%), which is less than or equal to the Maximum LTV Ratio set
forth in Schedule 2.5.3.1 of the Credit Agreement of _____________ percent
(_____%), determined as follows:
A.
The Loan balance upon disbursement of the funds comprising the Borrowing
Tranche(s) requested herein
$_____________
B.
The current aggregate Market Value of the Collateral Pool
$____________
C.
Item A divided by Item B and then multiplied by 100% equals the LTV Ratio
____________%

22.    The current Facility DSCR is ______ : 1.00, which is not less than _____
: 1.00, determined as follows:

A.
Net Operating Income of the Collateral Pool Properties determined by Lender
$_____________
B.
Facility Debt Service (as defined in the Credit Agreement)
$_____________
C.
Item A divided by Item B equals the Facility DSCR
____________%

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23.    Following the disbursement of the funds comprising the Borrowing Tranche
[requested herein] or [increased herein] the Facility DSCR will be ______ :
1.00, which is not less than _____ : 1.00, determined as follows:

A.
Net Operating Income of the Collateral Pool Properties as determined by Lender
$_____________
B.
Facility Debt Service (as defined in the Credit Agreement)
$_____________
C.
Item A divided by Item B equals the Facility DSCR
____________%

Servicer hereby certifies (i) to the accuracy of each of the mathematical
computations set forth in paragraphs s through v above (acknowledging that
Servicer has relied, with Lender’s consent and without independent verification
thereof, on the Net Operating Income and Market Value(s) prepared by Lender),
and (ii) to the best of its knowledge and belief, that all statements made by
Borrower herein are true and accurate in all material respects.
SERVICER

_______________________, a _____________________________

By: _______________________________
Name:
Title:

Dated: ___________________________________

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SCHEDULE 2.5.3

FORM OF NOTICE FOR SUBLIMIT VIOLATIONS

[DATE]

____________________
____________________
____________________

Re:    _____ Revolving Credit Facility

Dear __________________:

In accordance with the Credit Agreement by and between ____________________, a
____________________ (individually and collectively the “Borrower”) and PNC
Bank, National Association, a national banking association (“Servicer”) dated
__________ __, 2015, requires a Valuation of each of the Collateral Pool
Properties. Such Valuation has been performed in accordance with Freddie Mac’s
current underwriting policies, practices and procedures (subject to the terms
and provisions of Section 1.2.3 of the Credit Agreement) and is based in large
part, but not entirely, on Borrower’s supplied property level financial
statements as provided to the Servicer. Based on this analysis, Freddie Mac has
determined the following LTV Ratio, Facility DSCR and NOI:

LTV Ratio:

Facility DSCR:

NOI:

The [LTV Ratio] [and] [Facility DSCR] are not in compliance with the Sublimits
set forth in [Sections 2.5.3.1 and 2.5.3.2][Section 2.5.3.1][Section 2.5.3.2] of
the Credit Agreement.

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Please call the undersigned at ______________________________ if you have any
questions.

Sincerely,

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SCHEDULE 3.2

NET SPREAD TABLE

Facility DSCR

Net Spread*

Margin*

Greater than or equal to 1.45 : 1.00 but less than 1.65: 1.00
210 bps
215 bps
Greater than or equal to 1.65 : 1.00 but less than 1.85: 1.00
200 bps
205 bps
Greater than or equal to 1.85 : 1.00
180 bps
185 bps

* The Net Spread and Margin set forth above assume that the Borrowing Tranches
will have a one-month Interest Period. The Net Spread and Margin shall be
increased by ten (10) basis points (0.001) for any Base Rate Borrowing Tranche
having a three-month Interest Period.

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[BORROWER MAY, SUBJECT TO LENDER’S CONSENT, REVISE THIS FORM OF RENEWAL REQUEST
TO PROVIDE FOR THE RENEWAL OF MULTIPLE BORROWING TRANCHES UNDER A SINGLE RENEWAL
REQUEST FORM OR TO PROVIDE FOR THE SPLITTING OF A MATURING BORROWING TRANCHE
INTO MULTIPLE BORROWING TRANCHES UNDER A SINGLE RENEWAL REQUEST FORM]
SCHEDULE 3.3.3

RENEWAL REQUEST
______________, 20__
[Lender’s Name and Address]
Attention:
Ladies and Gentlemen:
Reference is made to the Credit Agreement dated as of _____________, 20___, as
amended (the “Credit Agreement”) by between ______________________, a
_____________________ (individually and collectively the “Borrower”) and
________________________, a __________________________ (“Lender”). Unless
otherwise defined herein, terms defined in the Credit Agreement are used herein
with the same meanings.
I, __________________, the _______________ of Borrower, a
__________________________, do hereby certify on behalf of each Borrower as of
the date hereof, as follows:
_____Borrower hereby requests Lender to renew the Borrowing Tranche in the
amount of $______________, whose then-current Interest Period will mature on
___________, ____.
or
_____ Borrower, in accordance with the provisions of the Credit Agreement, will
repay $___________ of the outstanding principal amount of the Borrowing Tranche
originally funded in the amount of $____________, whose Interest Period will
mature on ________, ____, prior to such maturity date, and hereby requests
Lender to renew such Borrowing Tranche in the amount of the remaining principal
balance of such Borrowing Tranche, the remaining principal balance being equal
to $___________.
[or

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_____ Borrower hereby requests Lender to combine two (2) or more Borrowing
Tranches pursuant to the provisions of the Credit Agreement into a single
Borrowing Tranche, specifically Borrower hereby requests that Lender combine the
Borrowing Tranche in the amount of $______________, whose Interest Period will
mature on ___________, ____ with the Borrowing Tranche in the amount of
$______________, whose Interest Period will mature on ___________, ____ [add
descriptions of additional Borrowing Tranches as necessary.]
1.    The Borrowing Tranche shall bear interest at (check one):
_____    Prime Rate*
_____    Base Rate
* Prime Rate is available only as specified in the Credit Agreement
2.    The Interest Period (if the Base Rate is selected) applicable to the
renewed Borrowing Tranche is (check one):
_____    one-month
_____    three-month*

* subject to a [____] ([__]) basis point ([_____]) increase in the Margin
otherwise applicable to such Borrowing Tranche

3.    Borrower will (check one):
_____
Pay all interest due and payable under the requested Borrowing Tranche in
monthly installments pursuant to the terms of the Credit Agreement.

_____
Prepay all interest for such Borrowing Tranche as of the Borrowing Date.

4.    The principal amount outstanding under the Credit Agreement on the date
hereof, prior to any advance in response to this request, is $_____________.
5.    If applicable, the Base Rate for the Borrowing Tranche renewed hereunder
shall be ___________ (_____%) consisting of a LIBOR Index Rate of ___________
percent (____ %) and a Margin of ________ (____%).
6.     If applicable (i.e. in the event of the renewal of a Borrowing Tranche),
the maturity date of the Interest Period of the Borrowing Tranche requested
herein is (choose and complete one of the following):
____________, 20__ (which is the last day of the Interest Period, in the event
that such date is a Business Day)
______________, 20__ (which is the Business Day following the last day of the
Interest Period, in the event that such date is not a Business Day).

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7.    To the best of Borrower’s Knowledge following diligent inquiry, the
computations set forth in Paragraphs 12 through 14 as certified by Servicer are
accurate.
8.    [Check one of the following:]
____ No Potential Default or Event of Default has occurred or is continuing
under the Loan Documents; or
____ No Potential Default or Event of Default, other than Borrower’s
non-compliance with Section 2.5.3.2 of the Credit Agreement, has occurred and is
continuing under the Loan Documents, Borrower is otherwise in full compliance
with the terms of the Loan Agreement, and will not increase the outstanding
principal balance of the Loan pursuant to this Renewal Request.
9.    All of the other terms and conditions set forth in the Credit Agreement
and the other Loan Documents pertaining to the Loan have been satisfied.
10.    The undersigned is an Authorized Officer of Borrower.
11.    Notice of this Loan Request shall be deemed received by Lender when (i)
sent by facsimile to (____) ____-_________ and (ii) verbally confirmed by
telephone call to either (when called in the following order of priority): (1)
[__________] ([__________]), (2) [__________] ([__________]), (3) [__________]
([__________] or such additional names and numbers as Lender may specify upon
prior written notice to Borrower.

[The Renewal Request continues on the following page]

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IN WITNESS WHEREOF, the undersigned has executed this Certificate this ______
day of ___________, ____.
BORROWER:

_______________________, a _____________________________

By: ________________________________
Name:
Title:

[The Renewal Request continues on the following page]

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12.    The current LTV Ratio is ___________(__%), which is less than or equal to
the Maximum LTV Ratio set forth in Section 2.5.3.1 of the Credit Agreement of
________________ percent (____%), determined as follows:

A.
The current Loan balance
$_____________
B.
The current aggregate Market Value of the Collateral Pool
$____________
C.
Item A divided by Item B and then multiplied by 100% equals the LTV Ratio
____________%

13.    The current Facility DSCR is [___] : 1.00, which [check one:]
___ is less than _____ : 1.00, or

___ is greater than or equal to _____: 1.00,

determined as follows:

A.
Net Operating Income of the Collateral Pool Properties determined by Lender
$_____________
B.
Facility Debt Service (as defined in the Credit Agreement)
$_____________
C.
Item A divided by Item B equals the Facility DSCR
____________%

14.    Following the renewal of the Borrowing Tranche for the Interest Period
requested herein, the Facility DSCR will be ______ : 1.00, which [check one:]
___ is less than ____ : 1.00, or
___ is greater than or equal to _____ : 1.00,
determined as follows:

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A.
Net Operating Income of the Collateral Pool Properties as determined by Lender
$_____________
B.
Facility Debt Service (as defined in the Credit Agreement)
$_____________
C.
Item A divided by Item B equals the Facility DSCR
____________%

Servicer hereby certifies (i) to the accuracy of each of the mathematical
computations set forth in paragraphs 12 through 14 above (acknowledging that
Servicer has relied, with Lender’s consent and without independent verification
thereof, on the Net Operating Income and Market Value(s) prepared by Lender),
and (ii) to the best of its knowledge and belief, that all statements made by
Borrower herein are true and accurate in all material respects.
SERVICER:

_______________________, a _____________________________

By: ______________________________
Name:
Title:

Dated: ___________________________________

 
 

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