Exhibit 10.18


 


Freddie Mac Loan Number: 708050077


Property Name: Villas at Oak Crest


 


MULTIFAMILY NOTE 


(CME)


 


MULTISTATE - FIXED RATE


DEFEASANCE


 


(Revised 10-18-2011)


 


	US $12,380,000.00	Effective Date: January 31, 2012


 


FOR VALUE RECEIVED, VILLAS PARTNERS,
LLC. a Delaware limited liability company (together with such party’s or parties’ successors and assigns, “Borrower”)
jointly and severally (if more than one) promises to pay to the CBRE CAPITAL MARKETS, INC., a Texas corporation,
the principal sum of $12, 380,000.00, with interest on the unpaid principal balance, as hereinafter provided.


 


1.          Defined Terms 


 


(a)          As used in this Note:


 


“Base Recourse”
means a portion of the Indebtedness equal to 0.00% of the original principal balance of this Note.


 


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


 


“Cut-off
Date” means the 12th Installment Due Date.


 


“Defeasance Date”
means the 2nd anniversary of the "startup date" of the last REMIC within the meaning of Section 860G (a)(9)
of the Tax Code which holds all or any portion of the Loan.


 


“Default Rate”
means an annual interest rate equal to 4 percentage points above the Fixed Interest Rate. However, at no time will the Default
Rate exceed the Maximum Interest Rate.


 


“Defeasance Period”
is the period beginning the day after the Defeasance Date until but not including the first day of the Window Period. The Defeasance
Period only applies if this Note is assigned to a REMIC trust prior to the Cut-off Date. 


 


“Fixed Interest Rate”
means the annual interest rate of 4.32%.


 


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


 




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The “First Installment
Due Date” under this Note is March 1, 2012.


 


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


 


“Loan” meansloan
evidenced by this Note.


 


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


 


“Lockout Period”
means the period beginning on the day that this Note is assigned to a REMIC trust until and including the Defeasance Date. The
Lockout Period only applies if this Note is assigned to a REMIC trust prior to the Cut-off Date.


 


“Maturity Date”
means the earlier of (i) February 1, 2019 (“Scheduled Maturity Date”), or (ii) the date on which the unpaid
principal balance of this Note becomes due and payable by acceleration or otherwise pursuant to the Loan or the exercise by Lender
of any right or remedy under any Loan Document; provided, however, that if the unpaid principal balance of this Note becomes due
and payable by acceleration but such acceleration is rendered null and void and of no further force and effect by operation of
law or agreement by such acceleration will have no effect on the Maturity Date.


 


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


 


“Prepayment Premium Period”
means the period during which, if a prepayment of principal occurs, a prepayment premium will be payable by Borrower to Lender.
The Prepayment Premium is the period from and including the date of this Note until but not including (i) the day that this Note
is assigned to a trust, if this Note is assigned to a REMIC trust prior to the Cut-off Date, or (ii) the first day of Window Period,
if this Note is not assigned to a REMIC trust or if this Note is assigned to a REMIC trust on or after the Cut-off Date.


 


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


 


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


 


“Yield Maintenance Expiration
Date” means August 1.2018.


 


“Yield Maintenance Period”
means the period from and including the date of this Note until but not including (i) the day that this Note is assigned to a REMIC
trust, if this Note is assigned to a REMIC trust prior to the Cut-off Date, or (ii) the Yield Maintenance Expiration Date, if this
Note is not assigned to a REMIC trust or if this Note is assigned to a REMIC trust on or after the Cut-off Date.


 




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


 


		2.	Address for Payment. AH payments due under this Note will be payable at c/o GEMSA
Loan Services, L.P. , P.O. Box 297480, Houston, TX 77297, or such other place as may be designated by Notice to Borrower
from or on behalf of Lender.



 


		3.	Payments.



 


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



 


		(b)	Interest under this Note
will be computed, payable and allocated on the basis of an actual /360 interest calculation schedule (interest is payable for
the actual number of days in each month, and each month’s interest is ca1culated by multiplying the unpaid principal amount
of this Note as of the first day of the month for which interest is being calculated by the Fixed Interest Rate, dividing the
product by 360, and multiplying the quotient by the number of days in the month for which interest is being calculated). The portion
of the monthly installment of principal and interest under this Note attributable to principal and the portion attributable to
interest will vary based upon the number of days inthe month for which such installment is paid. Each monthly payment of principal
and interest will first be applied to pay in full interest due, and the balance of the monthly installment payment paid by Borrower
will be credited to principal



 


		(c)	Unless disbursement of principal is made by Lender to Borrower on
the first day of a calendar month, interest for the period beginning on the date of disbursement and ending on and including the
last day of such calendar month will be payable by Borrower simultaneously with the execution of this Note. If disbursement of
principal is made by Lender to Borrower on the first day of a calendar month, then no payment will be due from Borrower at the
time of the execution of this Note. The Installment Due Date for the first monthly installment payment under Section 3(d) of interest-only
or principal and interest, as applicable, will be the First Installment Due Date set forth in Section l (a) of this Note. Except
as provided in this Section 3(c), Section 10 and in Section 11, accrued interest will be payable in arrears



 




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		(d)            	(i)           	Beginning on the First
Installment Due Date, and continuing until and Including the monthly installment due on February 1, 2014, accrued
interest-only will be payable by Borrower in consecutive monthly installments due and payable on the first day of each calendar
month. The amount of each monthly installment of interest-only payable pursuant to this Section 3(d)(i) on an Installment Due
Date will vary, and will equal Sl,485.60000 multiplied by the number of days in the month prior to the Installment Due Date.
	 	 	 	 
	  	   	(ii)	Beginning on March 1, 2014, and continuing until and including the monthly installment due on the
Maturity Date, principal and accrued interest will be payable by Borrower in consecutive monthly installments due and payable on
the first day of each calendar month. The amount of the monthly installment of principal and interest payable pursuant to this
3(d) (ii) on an Installment Due Date will be $61, 410.56.



 


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



 


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



 


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



 


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



 


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



 


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



 









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		6.	Acceleration. If an Event of Default has occurred and is continuing,
the entire unpaid principal balance, any accrued interest, any prepayment premium payable under Section 10 and Section 11, and
all other amounts payable under this Note and any other Loan Document, will at once become due and payable, at the option of Lender,
without any Notice to Borrower (except if notice is required by applicable law, then after such notice). Lender may exercise this
option to accelerate regardless of any prior forbearance. For purposes of exercising such option, Lender will calculate the prepayment
premium as if prepayment occurred on the date of acceleration. If prepayment occurs thereafter, Lender will recalculate the prepayment
premium as of the actual prepayment date.



 


		7.	Late Charge.



 


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



 


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



 


8. Default Rate


 


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



 


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



 




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



 


		9.	Limits on Personal Liability.



 






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



 


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



 


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



 




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



 


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



 


		(iii)	Either of the following occurs:



 


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



 


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



 


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



 


	 	[Deferred]	Hazard Insurance premiums or other Insurance premiums
	 	[Collect]	Taxes or payments in lieu of taxes (PILOT)
	 	[Deferred]	water and sewer charges (that could become a lien on the Mortgaged Property)
	 	[N/A]	Ground Rents
	 	[Deferred]	assessments or other charges (that could become a lien on the Mortgaged Property)


 


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



 


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



 




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		(vii)	Any of the following Transfers occurs:



 


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



 


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



 


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



 


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


 


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



 


		(i)	Borrower will be personally liable for the performance of and compliance with all of Borrower's
obligations under Sections 6. and l0.02(b) of the Loan Agreement (relating to environmental matters).



 


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



 


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



 


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



 


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



 


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



 




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



 


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



 


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



 


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



 


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



 


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



 


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



 




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



 


		(g)	For purposes of Section 9(f)
the term “Related Party” will include all of the following:



 


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



 


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



 


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



 


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



 


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



 


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



 


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



 


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



 


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



 




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		10.	Voluntary and involuntary Prepayments During the Prepayment
Premium Period (Section Applies unless until Loan is Assigned to REMIC Trust Prior to the Cut-off Date).



 


		(a)	This Section 10 will apply unless and until this Note is assigned to a REMIC trust prior to the
Cut-off Date.



 


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



 


		(c)	During the Prepayment Premium Period, Borrower may voluntarily prepay
all of the unpaid principal balance of this Note on an Installment Due Date so long as Borrower designates the date for such prepayment
in a Notice from Borrower to Lender given at least 30 days prior to the date of such prepayment. Unless Lender has previously notified
Borrower of the expiration of the Prepayment Premium Period, upon receipt of such Notice from Borrower, Lender will notify Borrower
if the Note has been assigned to a REMIC trust prior to the Cut-off Date and the Prepayment Premium Period has expired. If an Installment
Due Date (as defined in Section 1(a)) falls on a day which is not a Business Day, then with respect to payments made under this
Section 10 only, the term “Installment Due Date” will mean the Business immediately preceding the scheduled Installment
Due Date.



 


		(d)	Notwithstanding Section 10
(c), Borrower may voluntarily prepay all of the unpaid principal balance of this Note on a Business Day other than an Installment
Due Date if Borrower provides Lender with the Notice set forth in Section 10 (c) above and meets the other requirements set forth
in this Section10(d). Borrower acknowledges that Lender has agreed that Borrower may prepay principal on a Business Day other
than an InstallmentDue Date only because Lender will deem any prepayment received by Lender on any day other than an Installment
Due Date to have been received on the Installment Due Date immediately following such prepayment and Borrower will be responsible
for an interest that would have been due if the prepayment had actually been made on the Installment Due Date immediately following
such prepayment.



 




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



 


		(f)	Except as provided in Section 10(g), a prepayment premium will be due and payable by Borrower in
connection with any prepayment of principal under this Note during the Prepayment Premium Period. The prepayment premium will be
computed as follows:



 


		(i)	For any prepayment made during the Yield Maintenance Period, the
prepayment premium will be whichever is the greater of subsections (A) and (B) below:



 


		(A)	1.0% of the amount of principal being prepaid;
	 	 	 or



		(B)	the product obtained by multiplying:
	 	 	 



		(1)	the amount of principal being prepaid or accelerated,
	 	 	by






		(2)	the excess (if any) of the Monthly Note Rate over the Assumed Reinvestment Rate,
	 	 	by






		(3)	the Present Value Factor. 



 


For purposes
of Section 10 (f) (i) (B), the following definitions will apply:


 


Monthly Note Rate: 1/12
of the Fixed Interest Rate, expressed as a decimal calculated to 5 digits.


 


Prepayment Date:in
the case of voluntary prepayment, thedate on which the prepayment is made; in case of the application by Lender of collateral
or security to a portion of the principal balance, the date of such application.


 




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Assumed
Reinvestment Rate: 1/12 of the yield rate expressed as a decimal to 2 digits, as of the close of the trading session which
is 5 Business Days before the Prepayment Date, found among the Daily Treasury Yield Curve Rates, commonly known as Constant Maturity
Treasury (“CMT”) rates, with a maturity equal to the remaining Yield Maintenance Period, as reported on the
U.S. Department of the Treasury website. If no published CMT maturity matches the remaining Yield Maintenance Period, Lender will
interpolate as a decimal to 2 digits the yield rate between (a) the CMT with a maturity closest to, but shorter than, the remaining
Yield Maintenance Period, and (b) the CMT with a maturity closest to, but longer than, the remaining Yield Maintenance Period,
as follows:


 


 


 


		A =	yield rate for the CMT with a maturity shorter than
the remaining Yield Maintenance Period



		B =	yield rate for the CMT with a maturity longer than the
remaining Yield Maintenance Period



		C =	number of months to maturity for the CMT maturity shorter
than the remaining Yield Maintenance Period



		D =	number of months to maturity for the CMT maturity longer
than the remaining Yield Maintenance Period



		E =	number of months remaining in the Yield Maintenance Period



 


In the event the U.S. Department
of the Treasury ceases publication of the CMT rates, the Assumed Reinvestment Rate will equal the yield rate on the first U.S.
Treasury security which is not callable or indexed to inflation which matures after the expiration of the Yield Maintenance Period.


 


Present Value Factor:
the factor that discounts to present value the costs resulting to Lender from the difference in interest rates during the months
remaining in the Yield Maintenance Period, using the Assumed Reinvestment Rate as the discount rate, which monthly compounding,
expressed numerically as follows:


 


 


 


n
= the number of months remaining in Yield Maintenance Period; provided, however, if a prepayment occurs on an Installment Due Date,
then the number of months remaining in the Yield Maintenance Period will be calculated beginning with the month in which such prepayment
occurs and if such prepayment occurs on a Business Day other than an Installment Due Date, then the number of months remaining
in the Yield Maintenance Period will be calculated beginning with the month immediately following the date of such prepayment.


 


ARR
= Assumed Reinvestment Rate


 




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		(ii)	For any prepayment made after the expiration of the Yield Maintenance Period but during the remainder
of the Prepayment Premium Period, the prepayment premium will be 1.0% of the amount of principal being prepaid.



 


		(g)	Notwithstanding any other provision of this Section 10, no prepayment premium will be payable with
to (i) any prepayment made during the Window Period, or (ii) any prepayment occurring as a result of the application of any insurance
proceeds or Condemnation award under the Loan Agreement.



 


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



 


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



 


		11.	Voluntary and Involuntary Prepayments During the Lockout Period and During the Defeasance Period (Section Applies if Loan
is Assigned to REMIC Trust Prior to the Cut-off Date).



 


		(a)	This Section 11 will apply in the event this Note is assigned to a REMIC trust prior to the Cut-off
Date. This Section 11 will be of no effect if this Note is assigned to a REMIC trust on or after the Cut-off Date or if this Note
is not assigned to a REMIC trust.



 


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



 




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		(c)	Borrower may not voluntarily prepay any portion of the principal
of this Note during the Lockout Period or during the Defeasance Period; provided, however, any prepayment occurring as a result
of the application of any Insurance proceeds or Condemnation award under the Loan Agreement will be permitted during the Lockout
Period and during the Defeasance Period. If any portion of the principal balance of this Note is prepaid during the Lockout Period
or during the Defeasance Period by reason of the application by Lender of any proceeds of collateral or other security to any portion
of the unpaid principal balance of this Note or following a determination that the prohibition on voluntary prepayments during
the Lockout Period or during the Defeasance Period is in contravention applicable law, then Borrower must also pay to Lender upon
demand by Lender, a prepayment premium equal to 5.0% of the amount of principal being prepaid.



 


		(d)	Notwithstanding any other provision of this Section 11, no prepayment
premium will be payable with respect to (i) any prepayment made during Window Period, or (ii) any prepayment occurring as a result
of the application of any Insurance proceeds or Condemnation award under the Loan Agreement. 



 


		(e)	After the expiration of the Lockout Period and the Defeasance Period,
Borrower may voluntarily prepay all of the unpaid principal balance of this Note on an Installment Due Date so long as Borrower
designates the date for such prepayment in a Notice from Borrower to Lender given at least 30 days prior to the date of such prepayment
If an Installment Due Date (as in Section 1(a)) falls on a day which is not a Business Day, then with respect to payments made
under this Section 11 only, the term “Installment Date” will mean the Business Day immediately preceding the scheduled
Installment Due Date.



 


		(f)	Notwithstanding Section 11(e) above, following the end of the Lockout
Period the Defeasance Period, Borrower may voluntarily prepay all of the unpaid principal balance of this Note on a Business Day
other than an Installment Due Date if Borrower provides Lender with the Notice set forth in Section 11 (c) and meets the other
requirements set forth in this Section 11(f). Borrower acknowledges that Lender has agreed that Borrower may prepay principal on
a Business Day other than an Installment Due Date only because Lender will deem any prepayment received by Lender on any day other
than an Installment Due Date to have been received on the Installment Due Date immediately following such prepayment and Borrower
will be responsible for all interest that would have been due if the prepayment had actually been made on the Installment Due Date
immediately following such prepayment.



 




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



 


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



 


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



 


		(j)	If, after the expiration of the Lockout Period, Borrower defeases
the Loan as described in Section 11.12 of the Loan Agreement during the Defeasance Period, Borrower will not have the right to
voluntarily prepay any of the principal of this Note at any time.



 


		12.	Defeasance (Section Applies if Loan is Assigned to REMIC Trust Prior to the Cut- off Date).



 


		(a)	This Section 12 will apply in the event this Note is assigned to a REMIC trust prior to the Cut-off
Date. This Section 12 will be of no effect if this Note is assigned to a REMIC trust on or after the Cut-off Date or if this Note
is not assigned to a REMIC trust.



 


		(b)	Section 5 of this Note is amended by adding a new paragraph at the end of the Section as follows:



 


If Borrower obtains a release
of the Mortgaged Property from the hen of the Security Instrument pursuant to Section 11.12 of the Loan Agreement, the Indebtedness
will be secured by the Pledge Agreement and reference will be made to the Pledge Agreement for other rights of Lender as to collateral
for Indebtedness.


 


 




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		(c)	Section 9 of this Note is amended by adding a new paragraph at the end thereof as follows:



 


If Borrower obtains a release
of Mortgaged Property from the lien of the Security Instrument pursuant to Section 11.12 of the Loan Agreement, Borrower will have
no personal liability under this Note or the Pledge Agreement for the repayment of the Indebtedness or for the performance of any
other obligations Borrower under this Note or the Pledge Agreement (other than any liability under Section 6.12 or Section l 0.02
of the Loan Agreement for events that occur prior to the Defeasance Closing Date, whether discovered before or after the Defeasance
Closing Date), and Lender’s only recourse for the satisfaction of the Indebtedness and the performance of such obligations
will be Lender’s exercise its rights and remedies with respect to the collateral held by Lender under the Pledge Agreement
as security for the Indebtedness.


 


		(d)	Section 21(a) of this Note is amended by adding a new paragraph at the end of that subsection as
follows:



 


If Borrower obtains a release
of the Mortgaged Property from the lien of the Security Instrument pursuant to Section 11.12 of the Loan Agreement, all Notices,
demands and other communications required or permitted to be given pursuant to this Note will be given in accordance with the Pledge
Agreement.


 


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



 


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



 




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



 


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



 


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



 


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



 


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



 


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



 


		21.	Notices; Written Modifications. 



 


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



 


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



 




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



 


23. WAIVER OF TRIAL BY
JURY. BORROWER AND LENDER EACH


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


 


		24.	State-Specific Provisions. N/A



 


		25.	Attached Riders. The following Riders are attached
to this Note: NONE



 


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



 


	 	|X|	Exhibit A	Modifications to Multifamily Note


 


[SIGNATURE APPEARS ON FOLLOWING
PAGE]


 




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[SIGNATURE PAGE FOR MULTIFAMILY
NOTE)


 


IN WITNESS WHERROF, and in consideration
of the Lender’s agreement to lend Borrower the principal amount set forth above, Borrower has signed and delivered this Note
under seal or has caused this Note to be signed and delivered under seal by its duly authorized representative.


 


	 	BORROWER:
	 	 
	 	VILLAS PARTNERS, LLC,
	 	 a Delaware limited liability company
	 	 	 
	 	By:	Oak Crest Villas JV, LLC, a
	 	 	Delaware limited liability company, its sole member
	 	 	 
	 	 	By:	Madison Oak Crest, LLC, a
	 	 	 	Delaware limited liability company,
	 	 	 	its manager
	 	 	 	 
	 	 	 	By: 	/s/ Ryan L. Hanks	 
	 	 	 	 	Ryan L. Hanks, Manager


 


30-0710159


Borrower’s Employer ID Number


 




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EXHIBIT A


 


MODIFICATIONS TO MULTIFAMILY NOTE


 


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


 


		1.	Section 9(c)(i) is modified by deleting the first sentence in its entirety and replacing it with
the following sentence:



 


Borrower fails to pay to Lender upon demand
after an Event of Default all Rents received by Borrower to which Lender is entitled under Section 3 of the Security Instrument
and the amount of all security deposits collected by Borrower from tenants then in residence.


 


		2.	Section 9(c)(ii) is modified by deleting the first sentence in its entirety and replacing it with
the following sentence:



 


Borrower fails to apply all Insurance proceeds
and Condemnation proceeds received by Borrower as required by the Loan Agreement.


 


		3.	Section 9(f)(iv) is deleted in its entirety and replaced with the following:



 


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


 




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Freddie Mac Loan Number: 708050077 


Property Name: Villas at Oak Crest


 


ALLONGE TO MULTIFAMILY NOTE


 


ALLONGE TO THAT CERTAIN MULTIFAMILY NOTE DATED AS
OF JANUARY 31, 2012 IN THE ORIGINAL PRINCIPAL AMOUNT OF $12,380,000.00 EXECUTED BY VILLAS PARTNERS, LLC, A DELAWARE LIMITED LIABILITY
COMPANY, IN FAVOR OF CBRE CAPITAL MARKETS, INC.


 


PAY TO THE ORDER OF Federal
Home Loan Mortgage Corporation WITHOUT RECOURSE.


 


	 	CBRE CAPITAL MARKETS, INC., a
	 	Texas corporation
	 	 
	 	By: 	/s/ Jay R. Arthur	 
	 	Name:  JAY R. ARTHUR
	 	Title:  SR. VICE PRESIDENT/ CONTROLLER