EX-10.8






(El Dorado)

(99-1069656)




THIS INSTRUMENT CONTAINS INDEMNIFICATION PROVISIONS AND

PROVISIONS LIMITING LENDER’S LIABILITY FOR NEGLIGENCE




ENVIRONMENTAL INDEMNITY AGREEMENT




THIS ENVIRONMENTAL INDEMNITY AGREEMENT (“Agreement”) is made as of the 1st day of November,
2007 by APARTMENT REIT VILLAS OF EL DORADO, LLC, a Delaware limited liability company (“Borrower”),
and NNN APARTMENT REIT, INC., a Maryland corporation (individually, “Principal”, Borrower and
Principal hereinafter individually and collectively referred to as “Indemnitor”), for the benefit
of THE BANK OF NEW YORK TRUST COMPANY, NATIONAL ASSOCIATION, AS TRUSTEE FOR THE REGISTERED HOLDERS
OF MORGAN STANLEY CAPITAL I INC., COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES, SERIES 2007-IQ14,
having an address at c/o Capmark Finance Inc., 116 Welsh Road, Horsham, Pennsylvania 19044
(“Indemnitee”) and other Indemnified Parties (as hereinafter defined).



RECITALS




A. Borrower is the current fee owner of that certain real property located in the City of
McKinney, County of Collin and State of Texas, known as Villas of El Dorado and more particularly
described in Exhibit A attached hereto (said real property, together with any real property
hereafter encumbered by the lien of the Security Instrument (as defined in the Note), being herein
collectively referred to as the “Land”, the Land, together with all structures, buildings and
improvements now or hereafter located on the Land, being collectively referred to as the
“Property”).



B. Indemnitee is the current holder of a loan (“Loan”) assumed by Borrower in the original
principal amount of $13,600,000.00, evidenced by a certain promissory note dated November 29, 2006
in the principal amount of $13,600,000.00 made by El Dorado, LLC, a Texas limited liability company
(“Original Borrower”) to the order of Royal Bank of Canada, a Canadian chartered bank (“Note”) and
secured by, among other things, the Security Instrument which will encumber the Property.



C. Pursuant to that certain Agreement of Assumption and Modification of Security Instrument
and Other Loan Documents dated as of the date hereof (the “Assumption Agreement”), Indemnitee
consented to the transfer of the Loan from Original Borrower to Borrower (the “Transfer”)



D. Indemnitee is unwilling to consent to the Transfer unless Indemnitor agrees to provide the
indemnification, representations, warranties, and covenants and other matters described in this
Agreement for the benefit of the Indemnified Parties.



E. Principal will derive substantial benefit from the Loan. Indemnitor enters into this
Agreement to induce Indemnitee to consent to the Transfer.



CERTAIN DEFINED TERMS




As used in this Agreement, the following terms shall have the following meanings:



“Business Day” means a day on which commercial banks are not authorized or required by law to
close in New York, New York.



“Environmental Law” means any present and future federal, state and local laws, statutes,
ordinances, rules, regulations and the like, as well as common law, relating to protection of human
health or the environment, relating to Hazardous Substances, relating to liability for or costs of
Remediation or prevention of Releases of Hazardous Substances or relating to liability for or costs
of other actual or threatened danger to human health or the environment. The term “Environmental
Law” includes, but is not limited to, the following statutes, as amended, any successor thereto,
and any regulations promulgated pursuant thereto, and any state or local statutes, ordinances,
rules, regulations and the like addressing similar issues: the Comprehensive Environmental
Response, Compensation and Liability Act; the Emergency Planning and Community Right-to-Know Act;
the Hazardous Substances Transportation Act; the Resource Conservation and Recovery Act (including
but not limited to Subtitle I relating to underground storage tanks); the Solid Waste Disposal Act;
the Clean Water Act; the Clean Air Act; the Toxic Substances Control Act; the Safe Drinking Water
Act; the Occupational Safety and Health Act; the Federal Water Pollution Control Act; the Federal
Insecticide, Fungicide, and Rodenticide Act; the Endangered Species Act; the National Environmental
Policy Act; and the River and Harbors Appropriation Act. The term “Environmental Law” also
includes, but is not limited to, any present and future federal, state and local laws, statutes,
ordinances, rules, regulations and the like, as well as common law: conditioning transfer of
property upon a negative declaration or other approval of a governmental authority of the
environmental condition of the property; requiring notification or disclosure of Releases of
Hazardous Substances or other environmental condition of the Property to any governmental authority
or other person or entity, whether or not in connection with transfer of title to or interest in
property; imposing conditions or requirements in connection with permits or other authorization for
lawful activity; relating to nuisance, trespass or other causes of action related to the Property;
and relating to wrongful death, personal injury, or property or other damage in connection with any
physical condition or use of the Property.



“Hazardous Substances” includes but is not limited to any and all substances (whether solid,
liquid or gas) defined, listed, or otherwise classified as pollutants, hazardous wastes, hazardous
substances, hazardous materials, extremely hazardous wastes, or words of similar meaning or
regulatory effect under any present or future Environmental Laws or that may have a negative impact
on human health or the environment, including but not limited to petroleum and petroleum products,
asbestos and asbestos-containing materials, mold, polychlorinated biphenyls, lead, radon,
radioactive materials, flammables and explosives.



“Indemnified Parties” includes Indemnitee, any person or entity who is or will have been
involved in the origination of the Loan, any person or entity who is or will have been involved in
the servicing of the Loan, any person or entity in whose name the encumbrance created by the
Security Instrument is or will have been recorded, persons and entities who may hold or acquire or
will have held a full or partial interest in the Loan, including, but not limited to, custodians,
trustees and other fiduciaries who hold or have held a full or partial interest in the Loan for the
benefit of third parties.



“Legal Action” means any claim, suit or proceeding, whether administrative or judicial in
nature.



“Losses” includes any liabilities, obligations, claims, demands, damages, penalties, causes of
action, losses, fines, costs and expenses (including without limitation reasonable attorneys’ fees
and expenses).



“Release” includes but is not limited to any release, deposit, discharge, emission, leaking,
leaching, spilling, seeping, migrating, injecting, pumping, pouring, emptying, escaping, dumping,
disposing or other movement of Hazardous Substances.



“Remediation” includes but is not limited to any response, remedial, removal, or corrective
action; any activity to clean up, detoxify, decontaminate, contain or otherwise remediate any
Hazardous Substance; any actions to prevent, cure or mitigate any, Release of any Hazardous
Substance; any action to comply with any Environmental Laws or with any permits issued pursuant
thereto; any inspection, investigation, study, monitoring, assessment, audit, sampling and testing,
laboratory or other analysis, or evaluation relating to any Hazardous Substances or to anything
referred to herein.



AGREEMENT




NOW THEREFORE, in consideration of the premises and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, Indemnitor hereby represents, warrants,
covenants and agrees for the benefit of Indemnified Parties as follows:



1. Environmental Representations and Warranties. To the best of Indemnitor’s
knowledge, (a) there are no Hazardous Substances or underground storage tanks at, in, on or under
the Property, except those that are both (i) in compliance with all Environmental Laws and with
permits issued pursuant thereto and (ii) fully disclosed to Indemnitee in writing pursuant to the
written report(s) resulting from the environmental assessment(s) of the Property delivered to
Indemnitee (such report(s) are identified in Exhibit B attached hereto and are referred to below
collectively as the “Environmental Report”); (b) there are no past, present or threatened Releases
of Hazardous Substances at, in, on, under or from the Property except as described in the
Environmental Report; (c) there is no threat of any Release of Hazardous Substances migrating to
the Property except as described in the Environmental Report; (d) there is no past or present
non-compliance with Environmental Laws, or with permits issued pursuant thereto, in connection with
the Property, except as described in the Environmental Report; (e) Indemnitor does not know of and
has not received any written notice or other communication from any person or entity (including but
not limited to a governmental entity) relating to Hazardous Substances or Remediation thereof, of
possible liability of any person or entity pursuant to any Environmental Law, of other
environmental conditions in connection with the Property, or regarding any actual or potential
administrative or judicial proceedings in connection with any of the foregoing; and (f) Indemnitor
has truthfully and fully provided to Indemnitee in writing any and all information relating to
conditions at, in, on, under or from the Property that is known to any Indemnitor and that is
contained in the files and records of any Indemnitor, including, but not limited to, any reports
relating to Hazardous Substances at, in, on, under or from the Property and/or to the environmental
condition of the Property.



2. Environmental Covenants. Indemnitor covenants and agrees that: (a) all uses and
operations on or of the Property by Indemnitor or any other person or entity shall be in compliance
with all Environmental Laws and permits issued pursuant thereto; (b) there shall be no intentional
Releases of Hazardous Substances at, in, on, under or from the Property by Indemnitor or anyone
controlled by, controlling or under common control with Indemnitor; (c) Indemnitor shall keep the
Property free and clear of all liens and other encumbrances imposed pursuant to any Environmental
Law, whether due to any act or omission of Indemnitor or any other person or entity (“Environmental
Liens”); (d) Indemnitor shall, at its sole cost and expense, perform any environmental site
assessment or other investigation of environmental conditions in connection with the Property
pursuant to any written request of Indemnitee (provided that such request is made based upon
Indemnitee’s reasonable belief that there are Hazardous Substances at, in, on, under or from the
Property which are not in compliance with Environmental Laws) and share with Indemnitee the reports
and other results thereof, and Indemnitee and the other Indemnified Parties shall be entitled to
rely on such reports and other results thereto (e) Indemnitor shall, at its sole cost and expense,
comply with all reasonable written requests of Indemnitee to (i) reasonably effectuate Remediation
of any condition (including but not limited to a Release of a Hazardous Substance) at, in, on,
under or from the Property; (ii) comply with any Environmental Law; (iii) comply with any directive
from any governmental authority; and (iv) take any other reasonable action necessary or appropriate
for the protection of human health or the environment; and (f) Indemnitor shall immediately notify
Indemnitee in writing of (i) any presence or Releases or threatened Releases of Hazardous
Substances at, in, on, under, from or migrating towards the Property; (ii) any non-compliance with
any Environmental Laws related in any way to the Property; (iii) any actual or potential
Environmental Lien; (iv) any required or proposed Remediation of environmental conditions relating
to the Property; and (v) any written or oral notice or other communication of which any Indemnitor
becomes aware from any source whatsoever (including but not limited to a governmental entity)
relating in any way to environmental conditions in connection with the Property or any actual or
potential administrative or judicial proceedings in connection with anything referred to in this
Agreement.



3. Indemnified Parties’ Rights/Cooperation and Access. Indemnitor shall cooperate
with and provide access to the Property to Indemnified Parties and any person or entity designated
by Indemnified Parties to assess any and all aspects of the environmental condition of the Property
and its use, including but not limited to conducting any environmental assessment or audit (the
scope of which shall be determined in Indemnitee’s sole and absolute discretion) and taking samples
of soil, groundwater or other water, air or building materials, and conducting other invasive
testing. Except as otherwise provided in Section 5.4 of the Security Instrument, with respect to
any assessment or audit requested by Indemnitee following the occurrence of an Event of Default or
based upon Indemnitee’s reasonable belief that there are Hazardous Substances at, in, on, under or
from the Property which are not in compliance with Environmental Laws, all such investigations
shall be performed at Indemnitor’s sole cost and expense.



4. INDEMNIFICATION. INDEMNITOR COVENANTS AND AGREES, AT ITS SOLE COST AND EXPENSE, TO
PROTECT, DEFEND, INDEMNIFY, RELEASE AND HOLD INDEMNIFIED PARTIES HARMLESS FROM AND AGAINST ANY AND
ALL LOSSES IMPOSED UPON OR INCURRED BY OR ASSERTED AGAINST ANY INDEMNIFIED PARTIES AND DIRECTLY OR
INDIRECTLY ARISING OUT OF OR IN ANY WAY RELATING TO ANY ONE OR MORE OF THE FOLLOWING (EXCEPT TO THE
EXTENT THE SAME RELATE SOLELY TO HAZARDOUS SUBSTANCES FIRST INTRODUCED TO THE PROPERTY BY ANYONE
OTHER THAN INDEMNITOR OR ITS RESPECTIVE AGENTS OR EMPLOYEES FOLLOWING THE FORECLOSURE OF THE
SECURITY INSTRUMENT (OR THE DELIVERY AND ACCEPTANCE OF A DEED IN LIEU OF SUCH FORECLOSURE), THE
EXPIRATION OF ANY APPLICABLE RIGHT OF REDEMPTION AND THE OBTAINING BY THE PURCHASER AT SUCH
FORECLOSURE SALE OR GRANTEE UNDER SUCH DEED OF POSSESSION OF THE PROPERTY): (A) THE PAST, PRESENT
OR FUTURE PRESENCE, RELEASE OR THREATENED RELEASE OF ANY HAZARDOUS SUBSTANCES AT, IN, ON, UNDER OR
FROM THE PROPERTY; (B) ANY PAST, PRESENT OR THREATENED NON-COMPLIANCE OR VIOLATIONS OF ANY
ENVIRONMENTAL LAWS (OR PERMITS ISSUED PURSUANT TO ANY ENVIRONMENTAL LAW) IN CONNECTION WITH THE
PROPERTY OR OPERATIONS THEREON; (C) ANY LEGAL OR ADMINISTRATIVE PROCESSES OR PROCEEDINGS OR
JUDICIAL PROCEEDINGS IN ANY WAY CONNECTED WITH ANY MATTER ADDRESSED IN THIS AGREEMENT; (D) ANY
PERSONAL INJURY, WRONGFUL DEATH, OR PROPERTY OR OTHER DAMAGE ARISING UNDER ANY STATUTORY OR COMMON
LAW OR TORT LAW THEORY CONCERNING HAZARDOUS SUBSTANCES; AND (E) ANY MISREPRESENTATION OR INACCURACY
IN ANY REPRESENTATION OR WARRANTY OR MATERIAL BREACH OR FAILURE TO PERFORM ANY COVENANTS OR OTHER
OBLIGATIONS IN THIS AGREEMENT OR ANY COVENANTS OR OTHER OBLIGATIONS IN THE SECURITY INSTRUMENT
WHICH ARE RELATED TO HAZARDOUS SUBSTANCES OR ENVIRONMENTAL LAW.



5. Duty to Defend and Attorneys and Other Fees and Expenses. Upon written request by
any Indemnified Party, Indemnitor shall defend, and provide legal representation for such
Indemnified Party with respect to any of the matters referenced in Section 4 above (if requested by
any Indemnified Party, in the name of the Indemnified Party) by attorneys and other professionals
approved by Indemnified Parties. Notwithstanding the foregoing, any Indemnified Parties may, in
their sole and absolute discretion, engage their own attorneys and other professionals to defend or
assist them with respect to such matters, and, at the option of Indemnified Parties, their
attorneys shall control the resolution of such matters. Upon demand, Indemnitor shall pay or, in
the sole and absolute discretion of Indemnified Parties, reimburse Indemnified Parties for the
payment of reasonable fees and disbursements of attorneys, engineers, environmental consultants,
laboratories and other professionals in connection therewith.



6. Unimpaired Liability. The liability of Indemnitor under this Agreement shall in no
way be limited or impaired by, and Indemnitor hereby consents to and agrees to be bound by, any
amendment or modification of the provisions of the Note, the Security Instrument or any of the
other Loan Documents (as defined in the Security Instrument).



7. Enforcement. Indemnified Parties may enforce the obligations of Indemnitor without
first resorting to or exhausting any security or collateral and without first having recourse to
the Note, the Security Instrument or any other Loan Documents or any of the Property, through
foreclosure proceedings or otherwise. Nothing herein shall inhibit or prevent Indemnitee from
suing on the Note, foreclosing or exercising any power of sale under the Security Instrument, or
exercising any other rights and remedies thereunder.



8. Survival. The obligations and liabilities of Indemnitor under this Agreement shall
survive indefinitely notwithstanding any termination, satisfaction, assignment, entry of a judgment
of foreclosure, exercise of any power of sale or delivery of a deed in lieu of foreclosure of the
Security Instrument.



9. Interest. Any amounts payable to any Indemnified Parties under this Agreement
shall become immediately due and payable on demand and, if not paid within 30 days of such demand,
shall bear interest at a per annum rate equal to the Default Rate (as defined in the Note).



10. Waivers. (a) Indemnitor hereby waives (i) any right or claim, of right to cause a
marshalling of any Indemnitor’s assets or to cause Indemnitee or other Indemnified Parties to
proceed against any of the security for the Loan before proceeding under this Agreement against
Indemnitor; (ii) all rights and remedies accorded by applicable law to Indemnitor except any rights
of subrogation which Indemnitor may have, provided that the indemnity provided for hereunder shall
neither be contingent upon the existence of any such rights of subrogation nor subject to any
claims or defenses whatsoever which may be asserted in connection with the enforcement or attempted
enforcement of such subrogation rights including, without limitation, any claim that such
subrogation rights were abrogated by any acts of Indemnitee or other Indemnified Parties; (iii) any
right to assert a counterclaim, other than a mandatory or compulsory counterclaim, in any action or
proceeding brought against or by Indemnitee or other Indemnified Parties; (iv) notice of acceptance
hereof and of any action taken or omitted in reliance hereon; (v) presentment for payment, demand
of payment, protest or notice of nonpayment or failure to perform or observe, or other proof,
notice or demand; and (vi) all homestead exemption rights against the obligations hereunder (to the
extent applicable) and the benefits Of any statutes of limitations or repose. Notwithstanding
anything to the contrary contained herein, Indemnitor hereby agrees to postpone the exercise of any
rights of subrogation with respect to any collateral securing the Loan until the Loan shall have
been paid in full.



(b) INDEMNITOR HEREBY WAIVES TO THE FULLEST EXTENT PERMITTED BY LAW THE RIGHT TO TRIAL BY JURY
IN ANY ACTION, PROCEEDING OR COUNTERCLAIM, WHETHER IN CONTRACT, TORT OR OTHERWISE, RELATING
DIRECTLY OR INDIRECTLY TO THE LOAN, THE NOTE, THE SECURITY INSTRUMENT, THIS AGREEMENT OR THE OTHER
LOAN DOCUMENTS GOVERNING THE LOAN OR ANY ACTS OR OMISSIONS OF ANY INDEMNIFIED PARTIES IN CONNECTION
THEREWITH.



11. Subrogation. Indemnitor shall take any and all reasonable actions, including
institution of legal action against third parties, necessary or appropriate to obtain
reimbursement, payment or compensation from such persons responsible for the presence of any
Hazardous Substances at, in, on, under or from the Property or otherwise obligated by law to bear
the cost. Indemnified Parties shall be and hereby are subrogated to all of Indemnitor’s rights now
or hereafter in such claims.



12. Transfer of Loan. Indemnitee may, at any time, sell, transfer or assign the Loan,
the Note, the Security Instrument, this Agreement and the other Loan Documents, and any or all
servicing rights with respect thereto, or grant participations therein or issue mortgage
pass-through certificates or other securities evidencing a beneficial interest in a rated or
unrated public offering or private placement (the “Securities”). Indemnitee may forward to each
purchaser, transferee, assignee, servicer, participant or investor in such Securities or any credit
rating agency rating such Securities (the foregoing entities hereinafter collectively referred to
as the “Investor”) and each prospective Investor all documents and information (including but not
limited to financial information) which Indemnitee now has or may hereafter acquire relating to
Indemnitor and the Property, whether furnished by Indemnitor or otherwise, as Indemnitee determines
necessary or desirable. In connection with any such sale, transfer or assignment of the Loan,
Indemnitor further agrees that upon request by Indemnitee, Indemnitor shall, within 15 days after
request by Lender, enter into such amendments or modifications to this Agreement or any of the
other Loan Documents, as applicable, as may be reasonably required by Indemnitee in order to
facilitate any such sale, transfer or assignment without impairing Indemnitor’s rights or
increasing Indemnitor’s obligations hereunder or under any of the other Loan Documents.



13. Notices. All notices or other written communications hereunder shall be deemed to
have been properly given and shall be effective for all purposes (i) upon delivery, if delivered in
person, (ii) one Business Day after having been deposited for overnight delivery with any reputable
overnight courier service, (iii) three Business Days after having been deposited in any post office
or mail depository regularly maintained by the U.S. Postal Service and sent by registered or
certified mail, postage prepaid, return receipt requested, or (iv) if by telecopy, upon transmittal
to the recipient’s telecopy number. All such communications shall be mailed, sent or delivered,
addressed to the party for whom it is intended at its address set forth in the Assumption
Agreement.



14. Submission to Jurisdiction. With respect to any claim or action arising
hereunder, Indemnitor (a) irrevocably submits to the nonexclusive jurisdiction of the courts of the
State in which the Property is located and the United States District Court located in the county
in which the Property is located and appellate courts from any thereof, (b) irrevocably waives any
objection which it may have at any time to the laying of venue of any suit, action or proceeding
arising out of or relating to this Agreement brought in any such court and (c) irrevocably waives
any claim that any such suit, action or proceeding brought in any such court has been brought in an
inconvenient forum.



15. No Third-Party Beneficiary. The terms of this Agreement are for the sole and
exclusive protection and use of Indemnified Parties. No party shall be a third-party beneficiary
hereunder, and no provision hereof shall operate or inure to the use and benefit of any such third
party. It is agreed that those persons and entities included in the definition of Indemnified
Parties are not such excluded third party beneficiaries.



16. Counterparts. This Agreement may be executed in several counterparts, each of
which counterparts shall be deemed an original instrument arid all of which together shall
constitute a single Agreement. The failure of any party hereto to execute this Agreement or any
counterpart hereof shall not relieve the other signatories from, their obligations hereunder.



17. No Oral Change. This Agreement and any provisions hereof may not be modified,
amended, waived, extended, changed, discharged or terminated orally or by any act or failure to act
on the part of any Indemnitor or any Indemnified Party, but only by an agreement in writing signed
by the party against whom enforcement of any modification, amendment, waiver, extension, change,
discharge or termination is sought.



18. Headings. The headings and captions of the various sections of this Agreement are
for convenience of reference only and are not to be construed as defining or limiting, in any way,
the scope or intent of the provisions hereof.



19. Number and Gender/Successors and Assigns. All pronouns and any variations thereof
shall be deemed to refer to the masculine, feminine, neuter, singular or plural as the identity of
the person or persons referred to may require. Without limiting the effect of specific references
in any provision of this Agreement, the term “Indemnitor” shall be deemed to refer to each and
every person or entity comprising an Indemnitor from time to time, as the sense of a particular
provision may require, and to include the heirs, executors, administrators, legal representatives,
successors and assigns of Indemnitor, all of whom shall be bound by the provisions of this
Agreement, provided that no obligation of arty Indemnitor may be assigned except with the written
consent of Indemnitee. Each reference herein to the term “Indemnitee” shall be deemed to include
its successors and assigns. This Agreement shall inure to the benefit of Indemnified Parties and
their respective successors and assigns.



20. Joint and Several Liability. If Indemnitor consists of more than one person or
entity, the obligations and liabilities of each such person hereunder are joint and several.



21. Release of Liability. Any one or more parties liable under or pursuant to this
Agreement may be released without affecting the liability of any party not so released.



22. Rights Cumulative. The rights and remedies herein provided are cumulative and not
exclusive of any rights or remedies which Indemnitee has under the Note, the Security Instrument or
the other Loan Documents or would otherwise have at law or in equity.



23. Severability. Wherever possible, each provision of this Agreement shall be
interpreted in such a manner as to be effective and valid under applicable law, but if any
provision of this Agreement is held to be illegal, invalid or unenforceable in any respect, such
provision shall be fully severable and shall be ineffective to the extent of such illegality,
invalidity or unenforceability, without invalidating the remainder of such provision or the
remaining provisions of this Agreement.



24. Governing Law. This Agreement shall be deemed to be governed, construed, applied
and enforced in accordance with the laws of the state in which the Property is located and the
applicable laws of the United States of America.



25. Attorneys’ Fees. For purposes of this Agreement, the term “attorneys’ fees” shall
include any and all reasonable attorneys’, paralegal and law clerk fees and disbursements,
including, but not limited to, fees and disbursements at the pre-trial, trial and appellate levels
incurred or paid by Indemnitee in protecting its interest in the Property, the Leases (as such term
is defined in the Security Instrument) and the Rents (as such term is defined in the Security
Instrument) and enforcing its rights hereunder.



26. Miscellaneous. Whenever pursuant to this Agreement (i) Indemnitee exercises any
right given to it to approve or disapprove, (ii) any arrangement or term is to be satisfactory to
Indemnitee, or (iii) any other decision or determination is to be made by Indemnitee, the decision
of Indemnitee to approve or disapprove, all decisions that arrangements or terms are satisfactory
or not satisfactory and all other decisions and determinations made by. Indemnitee, shall be in
the sole and absolute discretion of Indemnitee and shall be final and conclusive, except as may be
otherwise expressly and specifically provided herein.



Signature Page Follows




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IN WITNESS WHEREOF, this Agreement has been executed and delivered by Indemnitor and is
effective as of the day and year first above written.




	 	 	INDEMNITOR: BORROWER:






APARTMENT REIT VILLAS OF EL DORADO, LLC, a Delaware
limited liability company




	 	 	 	By:
NNN Apartment REIT Holdings, L.P., a Virginia
limited partnership, its sole member






	 	 	 	By:
NNN Apartment REIT, Inc., a Maryland
corporation, its general partner






By: /s/ S. Jay Olander

Name: S. Jay Olander

Title: Chief Executive Officer





PRINCIPAL:




NNN APARTMENT REIT, INC., a Maryland corporation




By: /s/ S. Jay Olander

Name: S. Jay Olander

Title: Chief Executive Officer





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