Ex 10.8 Guaranty






Exhibit 10.8
Freddie Mac Loan Number:   940979209
Property Name: Estancia Apartments


    
GUARANTY


MULTISTATE – ASSUMPTIONS AND TRANSFERS
(CME AND PORTFOLIO)


(Revised 9-2-2011)


THIS GUARANTY (“Guaranty”) is entered into effective as of  this 29 day of June, 2012, by STEADFAST INCOME REIT, INC., a Maryland corporation (jointly and severally if more than one, “Guarantor”) for the benefit of the Federal Home Loan Mortgage Corporation (“Lender”).
RECITALS
		
	A.
	ESTANCIA TULSA, LLC, a Delaware limited liability company (“Original Borrower”) previously obtained a loan from CBRE MELODY & COMPANY, a Texas corporation (“Original Lender”) in the amount of $20,500,000.00 (“Loan”). The Loan was evidenced by a Multifamily Note in favor of Original Lender dated September 6, 2007 (“Note”). The Note was secured by a Multifamily Mortgage, Deed of Trust, or Deed to Secure Debt dated the same date as the Note (“Security Instrument”), encumbering the real property described in the Security Instrument (“Mortgaged Property”). Original Lender sold the Note, assigned its rights in the Security Instrument, and transferred the Loan to Lender, which is now the holder of the Note and the owner of the Loan.


		
	B.
	As a condition to allowing Original Borrower to transfer the Property to SIR ESTANCIA, LLC, a Delaware limited liability company (“Borrower”) and allowing Borrower to assume the Loan (“Transfer”), Lender has required that Guarantor execute this Guaranty.


AGREEMENT
NOW, THEREFORE, to induce Lender to consent to the Transfer, and in consideration thereof and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Guarantor agrees as follows:
		
	1.
	Defined Terms. “Indebtedness,” “Loan Documents” and “Property Jurisdiction” and other capitalized terms used but not defined in this Guaranty will have the meanings assigned to them in the Security Instrument.


2.        Scope of Guaranty.
(a)    Guarantor hereby absolutely, unconditionally, and irrevocably guarantees to Lender each of the following:

    
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(i)    Guarantor guarantees the full and prompt payment when due, whether at the Maturity Date or earlier, by reason of acceleration or otherwise, and at all times thereafter, of each of the following: 
(A)    Guarantor guarantees a portion of the Indebtedness equal to 0.00% of the original principal balance of the Note (“Base Guaranty”).
		
	 (B)
	In addition to the Base Guaranty, Guarantor guarantees all other amounts for which Borrower is personally liable under Sections 9(c), 9(d), and 9(f) of the Note. 




(C)    Guarantor guarantees all costs and expenses, including reasonable Attorneys’ Fees and Costs incurred by Lender in enforcing its rights under this Guaranty.
(ii)    Guarantor guarantees the full and prompt payment and performance when due of all of Borrower’s obligations under Section 18 of the Security Instrument.
(b)    (i)    If the Base Guaranty stated in Section 2(a)(i)(A) is 100% of the original principal balance of the Note, then each of the following will apply: 
(A)     The Base Guaranty will mean and include, and Guarantor hereby absolutely, unconditionally, and irrevocably guarantees to Lender the full and complete prompt payment of the entire Indebtedness and the performance of all Borrower’s obligations under the Loan Documents. 
(B)     For so long as the Base Guaranty remains in effect (there being no limit to the duration of the Base Guaranty unless otherwise expressly provided in this Guaranty), the obligations guaranteed pursuant to Sections 2(a)(i)(B), 2(a)(i)(C) and Section 3 will be part of, and not in addition to or in limitation of, the Base Guaranty.
(ii)    If the Base Guaranty stated in Section 2(a)(i)(A) is less than 100% of the original principal balance of the Note, then this Section 2(b) will be completely inapplicable.   
(c)    If Guarantor is not liable for the entire Indebtedness, then all payments made by Borrower with respect to the Indebtedness and all amounts received by Lender from the enforcement of its rights under the Security Instrument and the other Loan Documents (except this Guaranty) will be applied first to the portion of the Indebtedness for which neither Borrower nor Guarantor has personal liability. 
3.    Additional Guaranty Relating to Bankruptcy. 

    
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(a)    Notwithstanding any limitation on liability provided for elsewhere in this Guaranty, Guarantor hereby absolutely, unconditionally, and irrevocably guarantees to Lender the full and prompt payment when due, whether at the Maturity Date or earlier, by reason of acceleration, or otherwise, and at all times thereafter, the entire Indebtedness, in the event that any of the following occurs:
(i)    Borrower voluntarily files for bankruptcy protection under the United States Bankruptcy Code. 
(ii)    Borrower voluntarily becomes subject to any reorganization, receivership, insolvency proceeding, or other similar proceeding pursuant to any other federal or state law affecting debtor and creditor rights. 
(iii)    An order of relief is entered against Borrower pursuant to the United States Bankruptcy Code or other federal or state law affecting debtor and creditor rights in any involuntary bankruptcy proceeding initiated or joined in by a “Related Party.”  
(b)    For purposes of this Section, the term “Related Party” means each of the following:
(i)    Borrower or Guarantor.
(ii)    Any person or entity that holds, directly or indirectly, any ownership interest in or right to manage Borrower or Guarantor, including any shareholder, member, or partner of Borrower or Guarantor.
(iii)    Any person or entity in which any ownership interest (direct or indirect) or right to manage is held by Borrower, Guarantor or any partner, shareholder or member of, or any other person or entity holding an interest in, Borrower or Guarantor.
(iv)    Any other creditor of Borrower that is related by blood, marriage or adoption to Borrower, Guarantor or any partner, shareholder or member of, or any other person or entity holding an interest in, Borrower or Guarantor. 
(c)    If Borrower, Guarantor or any Related Party has solicited creditors to initiate or participate in any proceeding referred to in this Section, regardless of whether any of the creditors solicited actually initiates or participates in the proceeding, then such proceeding will be considered as having been initiated by a Related Party.
		
	4.
	Guarantor’s Obligations Survive Foreclosure. The obligations of Guarantor under this Guaranty will survive any foreclosure proceeding, any foreclosure sale, any delivery of any deed in lieu of foreclosure, and any release of record of the Security Instrument, and, in addition, the obligations of Guarantor relating to Borrower’s obligations under 



    
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Section 18 of the Security Instrument will survive any repayment or discharge of the Indebtedness. Notwithstanding the foregoing, if Lender has never been a mortgagee-in-possession of or held title to the Mortgaged Property, Guarantor will have no obligation under this Guaranty relating to Borrower’s obligations under Section 18 of the Security Instrument after the date of the release of record of the lien of the Security Instrument as a result of the payment in full of the Indebtedness on the Maturity Date or by voluntary prepayment in full.


		
	5.
	Guaranty of Payment and Performance. Guarantor’s obligations under this Guaranty constitute an unconditional guaranty of payment and performance and not merely a guaranty of collection.




		
	6.
	No Demand by Lender Necessary; Waivers by Guarantor. [Multistate] The obligations of Guarantor under this Guaranty will be performed without demand by Lender and will be unconditional regardless of the genuineness, validity, regularity, or enforceability of the Note, the Security Instrument, or any other Loan Document, and without regard to any other circumstance which might otherwise constitute a legal or equitable discharge of a surety, a guarantor, a borrower or a mortgagor. Guarantor hereby waives, each of the following, to the fullest extent permitted by applicable law:


(a)    The benefit of all principles or provisions of law, statutory or otherwise, which are or might be in conflict with the terms of this Guaranty and agrees that Guarantor’s obligations will not be affected by any circumstances, whether or not referred to in this Guaranty, which might otherwise constitute a legal or equitable discharge of a surety, a guarantor, a borrower, or a mortgagor.
(b)    The benefits of any right of discharge under any and all statutes or other laws relating to a guarantor, a surety, a borrower, or a mortgagor, and any other rights of a surety, a guarantor, a borrower, or a mortgagor under such statutes or laws.
(c)    Diligence in collecting the Indebtedness, presentment, demand for payment, protest, all notices with respect to the Note and this Guaranty which may be required by statute, rule of law, or otherwise to preserve Lender’s rights against Guarantor under this Guaranty, including notice of acceptance, notice of any amendment of the Loan Documents, notice of the occurrence of any default or Event of Default, notice of intent to accelerate, notice of acceleration, notice of dishonor, notice of foreclosure, notice of protest, and notice of the incurring by Borrower of any obligation or indebtedness.
(d)    All rights to cause a marshalling of Borrower’s assets or to require Lender to take any of the following actions:
(i)    Proceed against Borrower or any other guarantor of Borrower’s payment or performance under the Loan Documents (“Other Guarantor”).

    
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(ii)     Proceed against any general partner of Borrower or any Other Guarantor if Borrower or any Other Guarantor is a partnership.
(iii)     Proceed against or exhaust any collateral held by Lender to secure the repayment of the Indebtedness.
(iv)    Pursue any other remedy it may now or hereafter have against Borrower, or, if Borrower is a partnership, any general partner of Borrower. 
(e)    Any right to object to the timing, manner or conduct of Lender’s enforcement of its rights under any of the Loan Documents.
(f)    Any right to revoke this Guaranty as to any future advances by Lender under the terms of the Security Instrument to protect Lender’s interest in the Mortgaged Property.
		
	7.
	Modification of Loan Documents. At any time or from time to time and any number of times, without notice to Guarantor and without affecting the liability of Guarantor, Lender may take any of the following actions:


(a)    Extend the time for payment of the principal of or interest on the Indebtedness or renew the Indebtedness in whole or in part.
(b)    Extend the time for Borrower’s performance of or compliance with any covenant or agreement contained in the Note, the Security Instrument or any other Loan Document, whether presently existing or hereinafter entered into, or waive such performance or compliance. 
(c)    Accelerate the Maturity Date of the Indebtedness as provided in the Note, the Security Instrument, or any other Loan Document.
(d)    With Borrower, modify or amend the Note, the Security Instrument, or any other Loan Document in any respect, including an increase in the principal amount.
(e)    Modify, exchange, surrender or otherwise deal with any security for the Indebtedness or accept additional security that is pledged or mortgaged for the Indebtedness.
		
	8.
	Joint and Several Liability. The obligations of Guarantor (and each party named as a Guarantor in this Guaranty) and any Other Guarantor will be joint and several. Lender, in its sole and absolute discretion, may take any of the following actions:


(a)    Bring suit against Guarantor, or any one or more of the parties named as a Guarantor in this Guaranty, and any Other Guarantor, jointly and severally, or against any one or more of them.
(b)    Compromise or settle with Guarantor, any one or more of the parties named as a 

    
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Guarantor in this Guaranty, or any Other Guarantor, for such consideration as Lender may deem proper.
(c)    Release one or more of the parties named as a Guarantor in this Guaranty, or any Other Guarantor, from liability.
(d)    Otherwise deal with Guarantor and any Other Guarantor, or any one or more of them, in any manner, and no such action will impair the rights of Lender to collect from Guarantor any amount guaranteed by Guarantor under this Guaranty. 
		
	9.
	Subordination of Borrower’s Indebtedness to Guarantor. Any indebtedness of Borrower held by Guarantor now or in the future is and will be subordinated to the Indebtedness and Guarantor will collect, enforce and receive any such indebtedness of Borrower as trustee for Lender, but without reducing or affecting in any manner the liability of Guarantor under the other provisions of this Guaranty.


		
	10.
	Waiver of Subrogation. Guarantor will have no right of, and hereby waives any claim for, subrogation or reimbursement against Borrower or any general partner of Borrower by reason of any payment by Guarantor under this Guaranty, whether such right or claim arises at law or in equity or under any contract or statute, until the Indebtedness has been paid in full and there has expired the maximum possible period thereafter during which any payment made by Borrower to Lender with respect to the Indebtedness could be deemed a preference under the United States Bankruptcy Code. 


		
	11.
	Preference. If any payment by Borrower is held to constitute a preference under any applicable bankruptcy, insolvency, or similar laws, or if for any other reason Lender is required to refund any sums to Borrower, such refund will not constitute a release of any liability of Guarantor under this Guaranty. It is the intention of Lender and Guarantor that Guarantor’s obligations under this Guaranty will not be discharged except by Guarantor’s performance of such obligations and then only to the extent of such performance.


		
	12.
	Financial Information. Guarantor, from time to time upon written request by Lender, will deliver to Lender such financial statements as Lender may reasonably require. 


		
	13.
	Assignment. Lender may assign its rights under this Guaranty in whole or in part and upon any such assignment, all the terms and provisions of this Guaranty will inure to the benefit of such assignee to the extent so assigned. The terms used to designate any of the parties in this Guaranty will be deemed to include the heirs, legal representatives, successors and assigns of such parties, and the term “Lender” will also include any lawful owner, holder or pledgee of the Note. Reference in this Guaranty to “person” or “persons” will be deemed to include individuals and entities. 


		
	14.
	Complete and Final Agreement. This Guaranty and the other Loan Documents represent the final agreement between the parties and may not be contradicted by evidence of prior, contemporaneous or subsequent oral agreements. There are no unwritten oral agreements between the parties. All prior or contemporaneous agreements, 



    
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understandings, representations, and statements, oral or written, are merged into this Guaranty and the other Loan Documents. Guarantor acknowledges that Guarantor has received a copy of the Note and all other Loan Documents. Neither this Guaranty nor any of its provisions may be waived, modified, amended, discharged, or terminated except pursuant to a written agreement signed by the party against which the enforcement of the waiver, modification, amendment, discharge, or termination is sought, and then only to the extent set forth in that agreement.
		
	15.
	Governing Law. This Guaranty will be governed by and enforced in accordance with the laws of the Property Jurisdiction, without giving effect to the choice of law principles of the Property Jurisdiction that would require the application of the laws of a jurisdiction other than the Property Jurisdiction. 


		
	16.
	Jurisdiction; Venue. Guarantor agrees that any controversy arising under or in relation to this Guaranty may be litigated in the Property Jurisdiction, and that the state and federal courts and authorities with jurisdiction in the Property Jurisdiction will have jurisdiction over all controversies which may arise under or in relation to this Guaranty. Guarantor irrevocably consents to service, jurisdiction and venue of such courts for any such litigation and waives any other venue to which it might be entitled by virtue of domicile, habitual residence or otherwise. However, nothing in this Guaranty is intended to limit Lender’s right to bring any suit, action or proceeding relating to matters arising under this Guaranty against Guarantor or any of Guarantor’s assets in any court of any other jurisdiction. 


		
	17.
	Guarantor’s Interest in Borrower. Guarantor represents to Lender that Guarantor has a direct or indirect ownership or other financial interest in Borrower and/or will otherwise derive a material financial benefit from the Transfer.


		
	18.
	STATE-SPECIFIC PROVISIONS:  If Lender elects to enforce this Guaranty before, or without, enforcing the Security Instrument, Guarantor waives any right, whether pursuant to 12 Okla. Stat. 686 or otherwise, to require Lender to set off the value of the Mortgaged Property against the Indebtedness.


19.    Residence; Community Property Provision. 
(a)     Guarantor represents and warrants that his/her state of residence is N/A. 
(b)    Guarantor represents and warrants that s/he is: N/A
[____] single 
[____] married  
		
	20.
	GUARANTOR AND LENDER EACH (A) AGREES NOT TO ELECT A TRIAL BY JURY WITH RESPECT TO ANY ISSUE ARISING OUT OF THIS GUARANTY OR THE RELATIONSHIP BETWEEN THE PARTIES AS GUARANTOR AND 



    
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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. 
		
	21.
	Attached Riders.  The following Riders, if marked with an “X” in the space provided, are attached to this Guaranty:


[X]    None
[__]    Material Adverse Change Rider
[__]    Minimum Net Worth/Liquidity Requirements Rider
		
	22.
	Attached Exhibit.  The following Exhibit, if marked with an “X” in the space provided, is attached to this Guaranty:


[X]    Exhibit A    Modifications to Guaranty




{Signatures on next page}

    
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IN WITNESS WHEREOF, Guarantor has signed and delivered this Guaranty under seal or has caused this Guaranty to be signed and delivered under seal by its duly authorized representative. 
GUARANTOR:


STEADFAST INCOME REIT, INC., a Maryland corporation


    	
		
	By:
	/s/ Rodney F. Emery

	Name:
	Rodney F. Emery

	Title:
	President








[Corporate Seal]


Name and Address of Guarantor:
Steadfast Income REIT, Inc.
18100 Von Karman Ave.
Suite 500   
Irvine, CA  92612






{Acknowledgment on next page}

    
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CALIFORNIA ALL PURPOSE ACKNOWLEDGMENT




State of CALIFORNIA    )
County of ORANGE        )  ss 




On June 26, 2012, before me, Mary L. Kelly, Notary Public, personally appeared Rodney F. Emery, who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s) or the entity upon behalf of which the person(s) acted, executed the instrument.


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


WITNESS my hand and official seal.


    	
	
	/s/ Mary L. Kelly








	
		
	State of CALIFORNIA    ) ss.

	County of ORANGE       )

	 

	Subscribed and sworn to (or affirmed) before me on this 26th day of June, 2012, by Rodney F. Emery, proved to me on the basis of satisfactory evidence to be the person(s) who appeared before me.

	 

	 

	Signature
	/s/ Mary L. Kelly











    
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EXHIBIT A
MODIFICATIONS TO GUARANTY
The following modifications are made to the text of the Guaranty which precedes this Exhibit:
1.    Section 3(b) is hereby deleted and replaced with the following:


		
	(b)
	For purposes of this Section, the term “Related Party” will include all of the following:


		
	(i)
	Borrower or any Guarantor.


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


		
	(iii)
	Any Person in which Borrower or any Guarantor has any ownership interest (direct or indirect) or right to manage.


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


		
	(v)
	Any Person in which any Person holding an interest in Borrower or any Guarantor also has an ownership interest of five percent (5%) or more.


		
	(vi)
	Any creditor of Borrower that is related by blood, marriage or adoption to Borrower or any Guarantor.


		
	(vii)
	Any creditor of Borrower that is related to (A) any partner, shareholder or member of Borrower, (B) any officer director, or manager of any Guarantor, (C) any other Person holding an interest in Borrower,  or (D) any other Person holding an interest of five percent (5%) or more in any Guarantor.  




2.    The following is added as a new Section 23:


23.    Term of Existence.


		
	(a)
	In the event Guarantor fails to provide to Lender Notice, given not later than six (6) months prior to the expiration of Guarantor’s term of existence, that Guarantor has extended its term of existence to a date that is later than the Maturity Date of the Loan (a “Term Extension Event of Default”) then Guarantor must do one of the following within 10 days after the Term Extension Event of Default: 


		
	(i)
	deliver to Lender as collateral security for the Loan a letter of credit (“Term Extension Letter of Credit”) in the amount of $4,100,000 and otherwise in accordance with Lender’s standard requirements for letters of credit, except that the initial term of the Term Extension Letter of Credit must be no less than six (6) months; or  


		
	(ii)
	provide Lender with a replacement Guarantor, which replacement 



    
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Guarantor must be acceptable to Lender in Lender’s sole discretion.  If the replacement Guarantor is an entity other than a publically-traded REIT, the replacement Guaranty must be modified to include Freddie Mac’s standard form Minimum Net Worth/Liquidity Rider to Guaranty (CME and Portfolio) reflecting a minimum net worth requirement of $20,000,000 and a minimum required liquidity of $4,100,000.


If Guarantor provides the Term Extension Letter of Credit, Guarantor must ensure that the Term Extension Letter of Credit remains in force and effect until the Maturity Date.  Guarantor must continuously renew the Term Extension Letter of Credit not later than 30-days’ prior to the then expiration of the Term Extension Letter of Credit, or Lender may draw upon the Term Extension Letter of Credit as if an Event of Default has occurred. 




    

    
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