Document:

exv10w6

Exhibit 10.6

ENVIRONMENTAL AND HAZARDOUS

SUBSTANCE INDEMNIFICATION AGREEMENT

     THIS ENVIRONMENTAL AND HAZARDOUS SUBSTANCE INDEMNIFICATION AGREEMENT (this “Agreement”),
made as of the 22nd day of December 2010, by and between SIR Park Place, LLC, with offices at 18100
Von Karman Avenue, Suite 500, Irvine, California (“Borrower” and/or “Indemnitor”), and Ames
Community Bank, with offices at 925 Gateway Drive, Grimes, Iowa 50111 (“Indemnitee”) and other
Indemnified Parties (as defined below).

W I T N E S S E T H:

          WHEREAS, pursuant to that certain Loan Agreement dated as of the date hereof, by and
between Borrower and Indemnitee (the “Loan Agreement”), Borrower has executed and delivered to
Indemnitee that certain Promissory Note dated of even date herewith (the “Note”), payable to the
order of Indemnitee in the stated principal amount not exceeding $5,000,000 which Note evidences a
Loan made by Indemnitee to Borrower;

          WHEREAS, the Note is secured by that certain Mortgage, Assignment of Leases and Rents,
Security Agreement and Fixture Financing Statement dated as of the date hereof (the “Security
Instrument”), executed by Borrower, encumbering that certain property (the “Property”) more
particularly described therein; and

          WHEREAS, Indemnitor will derive substantial benefit from the Loan and Indemnitor enters into
this Agreement to induce Indemnitee to make the Loan.

          NOW THEREFORE, in consideration of the premises and other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, Indemnitor hereby represents, warrants and
covenants to the Indemnified Parties (as hereinafter defined) as follows:

          1. Indemnitor, to the best of its knowledge, represents and warrants to the Indemnified
Parties that: (a) there are no Hazardous Substances or underground storage tanks in, on, under
or about the Property, except those that are both (i) in compliance with Environmental Laws
(defined below) (and with permits issued pursuant thereto, if any) and (ii) fully disclosed to
Indemnitee in writing pursuant to the written environmental assessments of the Property
delivered to Indemnitee (collectively, the “Environmental Report”), (b) except as disclosed in
the Environmental Report, no Asbestos is located on the Property; (c) there are no past or
present Releases of Hazardous Substances in, on, under or from the Property in violation of any
Environmental Law or which would require Remediation under or to achieve compliance with
Environmental Laws 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 notice or other communication from any Person (including a
Governmental Authority) alleging noncompliance with or potential liability under Environmental
Laws, or other environmental conditions in connection with the Property, or any actual
administrative or judicial proceedings in connection with any of the foregoing; (f)

1

 

the
Property has not been a site for the use, generation, manufacture, storage, treatment, release,
threatened release, discharge, disposal, transportation or presence of Hazardous Substances in
violation of Environmental Laws; (g) there are no claims or actions pending or threatened
against Indemnitor or the Property by any Governmental Authority or by any other Person relating
to Hazardous Substances or pursuant to the Environmental Laws; (h) Indemnitor has truthfully and
fully provided to Indemnitee, any and all information relating to environmental conditions in,
on, under or from the Property that is known to Indemnitor or that is contained in Indemnitor’s
files and records, including any reports relating to Hazardous Substances in, on, under or from
the Property and/or to the environmental condition of the Property.

          2. Indemnitor covenants and agrees that: (a) all uses and operations on or of the Property,
whether by Indemnitor or any other Person including any Tenant, shall be in compliance with all
Environmental Laws and permits issued pursuant thereto; (b) there shall be no Releases of
Hazardous Substances in, on, under or from the Property; (c) the Property shall not be used as a
site for the use, generation, manufacture, storage, treatment, releases, discharge and/or
transportation of Hazardous Substances, and there shall be no Hazardous Substances in, on, or
under the Property, in each case except those that are stored, used or maintained in compliance
with all Environmental Laws and with permits issued pursuant thereto, if and to the extent
required; (d) 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 (the “Environmental Liens”); and (e) Indemnitor shall, at its
sole cost and expense, fully and expeditiously cooperate in all activities pursuant to Section 3
below, including providing all relevant information and making knowledgeable persons available
for interviews. Indemnitor shall in all instances comply with, and ensure compliance by all
occupants of the Property with, all applicable Legal Requirements with respect to Asbestos and
other Hazardous Substances, and shall keep the Property free and clear of any Liens imposed
pursuant to such Legal Requirements. In the event that Indemnitor receives any notice or
communication from any Governmental Authority or any source whatsoever with respect to Asbestos
or any other Hazardous Substances on, affecting or installed on the Property, Indemnitor shall
immediately notify Indemnitee.

          3. (a) Indemnitee, its environmental consultant, and any other Person designated by
Indemnitee, including any receiver and any representative of a Governmental Authority, shall
have the right, but not the obligation, at intervals of not less than one year, or more
frequently if the Indemnitee reasonably believes that a Hazardous Substance or other
environmental condition violates or threatens to violate any Environmental Law, after notice to
Indemnitor, to enter upon the Property at all reasonable times to assess any and all aspects of
the environmental condition of the Property and its use, including conducting any environmental
assessment or audit of the Property or portions thereof to confirm
Indemnitor’s compliance with this Agreement, and Indemnitor shall cooperate in all
reasonable ways with Indemnitee in connection with any such assessment or audit. Such audit
shall be performed in a manner so as to minimize interference with the conduct of business at
the Property. If such assessment or audit discloses the existence of a violation of any
Environmental Law or the possibility of any potential liability under any Environmental Law or
if such audit was required or prescribed by law, regulation or Governmental or
quasi-

2

 

Governmental Authority, Indemnitor shall pay all reasonable costs and expenses incurred in
connection with such assessment or audit; otherwise, the costs and expenses of such audit shall,
notwithstanding anything to the contrary set forth in this Agreement, be paid by Indemnitee.

               (b) Indemnitor shall give prompt written notice to Indemnitee of: (a) any proceeding or
inquiry by any Person with respect to the presence of any Hazardous Substances on, under, from
or about the Property, (b) all claims made or threatened by any Person against Indemnitor or the
Property relating to any loss or injury resulting from any Hazardous Substance, (c) Indemnitor’s
discovery of any occurrence or condition on any real property adjoining or in the vicinity of
the Property that could cause the Property to be subject to any investigation or cleanup
pursuant to any Environmental Law, and (d) any violation of Environmental Laws by any other
Person of which Borrower has knowledge if same may affect the Property. In the event that any
environmental site assessment or report recommends that an operations and maintenance plan or
program be implemented for Asbestos or any other Hazardous Substance, Indemnitor shall cause
such operations and maintenance plan to be prepared and implemented at Indemnitor’s sole cost
and expense upon request of Indemnitee within thirty (30) days after such recommendation. In
the event that any investigation, site monitoring, containment, cleanup, removal, Remediation,
restoration or other work of any kind is required under an applicable Environmental Law (the
“Remedial Work”), Indemnitor shall commence and thereafter diligently prosecute to completion
any Remedial Work within thirty (30) days after written demand by Indemnitee for performance
thereof (or such shorter period of time as may be required under applicable law). All Remedial
Work shall be performed by contractors approved in advance by Indemnitee. Unless the cost of
the Remedial Work is to be paid by a governmental program or by proceeds of a policy of
insurance, all costs and expenses of such Remedial Work shall be paid by Indemnitor, including
Indemnitee’s reasonable attorneys’ fees and costs and engineer consulting fees of engineers and
other professionals incurred in connection with monitoring or review of such Remedial Work. In
the event Indemnitor shall fail to timely commence, or cause to be commenced, or fail to
diligently prosecute to completion, such Remedial Work, Indemnitee may, but shall not be
required to, cause such Remedial Work to be performed, and all costs and expenses thereof, or
incurred in connection therewith, shall be paid by Indemnitee.

          4. (a) Except to the extent arising out of the negligence or willful misconduct of the
Indemnified Parties, Indemnitor shall, at its sole cost and expense, protect, defend, indemnify,
release and hold harmless the Indemnified Parties from and against any and all Losses imposed
upon or incurred by or asserted against any Indemnified Parties, and arising out of or in
connection with or in any way relating to any one or more of the following: (i) any presence of
any Hazardous Substances in, on, above or under the Property;
(ii) any past, present or threatened Release of Hazardous Substances in, on, above, under
or from the Property; (iii) any activity by Indemnitor, any Person affiliated with Indemnitor,
any Tenant or other users of the Property or any other Person in connection with any actual,
proposed or threatened use, treatment, storage, holding, existence, disposition or other
Release, generation, production, manufacturing, processing, refining, control, management,
abatement, removal, handling, transfer or transportation to or from the Property of any
Hazardous Substances at any time located in, under, on or above the Property; (iv) any

3

 

activity
by Indemnitor, any Affiliate of Indemnitor or any Tenant or other users of the Property in
connection with any actual or proposed Remediation of any Hazardous Substances at any time
located in, under, on or above the Property, whether or not such Remediation is voluntary or
pursuant to court or administrative order, including any removal, remedial or corrective action;
(v) any past, present or threatened violations of any Environmental Laws (or permits issued
pursuant to any Environmental Law) in connection with the Property or operations thereon,
including any failure by Indemnitor, any Affiliate of Indemnitor or any Tenant or other users of
the Property to comply with any order of any Governmental Authority in connection with
Environmental Laws; (vi) the imposition, recording or filing of any Environmental Lien
encumbering the Property; (vii) any administrative processes or proceedings or judicial
proceedings in any way connected with any matter addressed in this Agreement; (viii) any past,
present or threatened injury to, destruction of or loss of natural resources in any way
connected with the Property, including costs to investigate and assess such injury, destruction
or loss; (ix) any acts of Indemnitor or other users of the Property, in accepting any Hazardous
Substances for transport to disposal or treatment facilities, incineration vessels or sites
selected by Indemnitor or such other users, from which there is a Release, or a threatened
Release of any Hazardous Substance which causes the incurrence of costs for Remediation; (x) any
personal injury, wrongful death, or property damage caused by Hazardous Substances arising under
any statutory or common law or tort law theory, including damages assessed for the maintenance
of a private or public nuisance or for the conducting of an abnormally dangerous activity on or
near the Property; and (xi) any misrepresentation in any representation or warranty or breach or
failure to perform any covenants or other obligations pursuant to this Agreement.

               (b) Upon written request by any Indemnified Party, Indemnitor shall defend such Indemnified
Party (if requested by any Indemnified Party, in the name of the Indemnified Party) by attorneys
and other professionals approved by the Indemnified Parties.

          5. The term “Hazardous Substances” means any and all substances, materials or wastes
(whether solid, liquid or gas) defined, listed, or otherwise classified as pollutants,
contaminants, toxic substances, hazardous wastes, hazardous substances, hazardous materials,
extremely hazardous wastes, or words of similar meaning or regulatory effect under any present
or future Environmental Laws, including, but not limited to, urea formaldehyde insulation,
medical wastes, petroleum and petroleum products, Asbestos and Asbestos-containing materials,
polychlorinated biphenyls, lead, radon, radioactive materials, fungicides, insecticides,
rodenticides, pesticides, flammables and explosives. The term “Asbestos” means asbestos or any
substance or material containing asbestos.

          6. The term “Environmental Law” means any present or future, federal, state and local laws,
statutes, ordinances, rules, regulations and the like, as well as common law, relating to
protection of human health, the environment or natural resources, Hazardous Substances,
liability for or costs of Remediation or prevention of Releases of Hazardous Substances or
otherwise relating to liability for or costs of other actual or threatened danger to human
health or the environment, and 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

4

 

of 1980, as amended
(including Superfund Amendments and Reauthorization Act of 1986, “CERCLA”), 42 U.S.C. Section
9601 et seq.; the Emergency Planning and Community Right-to-Know Act of 1986, 42 U.S.C. Section
11001 et seq.; the Hazardous Substances Transportation Act; the Resource Conservation and
Recovery Act of 1976, as amended, 42 U.S.C. Section 6901 et seq. (including Subtitle I relating
to underground storage tanks); the Solid Waste Disposal Act; the Clean Water Act; the Clean Air
Act, as amended 42 U.S.C. Section 7401 et seq; the Toxic Substances Control Act, as amended, 15
U.S.C. Section 2601 et seq.; the Safe Drinking Water Act, as amended, 42 U.S.C. Section 300f et
seq.; the Occupational Safety and Health Act, as amended, 29 U.S.C. Section 651; the Federal
Water Pollution Control Act, as amended, 33 U.S.C. Section 1251 et seq.; the Federal
Insecticide, Fungicide and Rodenticide Act; the Endangered Species Act; the National
Environmental Policy Act; and the River and Harbors Appropriation Act. “Environmental Law” also
includes, but is not limited to, any present or 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; and requiring notification or disclosure of Releases of
Hazardous Substances or other environmental condition of the Property to any Governmental
Authority or other Person , whether or not in connection with transfer of title to or interest
in property.

          7. The term “Release” of any Hazardous Substance means any release, deposit, discharge,
emission, leaking, spilling, seeping, migrating, injecting, pumping, pouring, emptying,
escaping, dumping, disposing or other movement of Hazardous Substances.

          8. The term “Remediation” includes, but is not limited to, any response, remedial removal,
or corrective action, any activity to cleanup, 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.

          9. The term “Indemnified Parties” means Indemnitee and in each case any other Person
designated by Lender (i) who is or will have been involved in the origination of the Loan and/or
participation in the Loan, (ii) who is or will have been involved in the servicing of the Loan,
(iii) in whose name the encumbrance created by the Security
Instrument is or will have been recorded, (iv) who may hold or acquire or will have held a
full or partial interest in the Loan (including pursuant to a pledge or collateral assignment)
as well as the respective directors, officers, shareholders, members, partners, employees,
agents, servants, representatives, contractors, subcontractors, Affiliates, subsidiaries,
successors and assigns of any and all of the foregoing (including any other Person who holds or
acquires or will have held a participation or other full or partial interest in the Loan or the
Property, whether during the term of the Loan or as a part of or following a foreclosure of the
Loan and including any successors by merger, consolidation or acquisition of all or a
substantial portion of Indemnitee’s assets and business), and/or (v) who is controlling,
controlled by or

5

 

under
common control with any Person described in clauses (i)-(iv). The term
“Indemnified Party” shall mean any one of the Indemnified Parties.

          10. The term “Losses” includes any and all claims, actions, suits, liabilities (including
strict liabilities), actions, proceedings, obligations, debts, damages, losses, costs, expenses,
diminutions in value, fines, penalties, charges, fees, expenses, judgments, awards, amounts paid
in settlement, costs of Remediation (whether or not performed voluntarily), engineers’ fees,
environmental consultants’ fees, and costs of investigation (including sampling, testing and
analysis of soil, water, air, building materials and other materials and substances whether
solid, liquid or gas) or punitive damages, of whatever kind or nature (including reasonable
attorneys’ fees and other costs of defense). Losses shall include, without limitation to the
foregoing, the following: (a) all Remediation costs and expenses, and (b) all other direct or
indirect consequential damages, including, without limitation, any third party tort claims or
governmental claims, fines or penalties against an Indemnified Party, or any Person controlled
by an Indemnified Party.

          11. 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
(whether or not such Indemnitor has received notice thereof) of the provisions of the Loan
Documents or any other agreement to or with Indemnitee or Indemnitor or any Person who succeeds
Indemnitor or Borrower as owner of the Property.

          12. Indemnitee may enforce the obligations of Indemnitor without first resorting to or
exhausting any security or collateral or 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. This Agreement shall also constitute collateral and security for the debt of
Borrower pursuant to the Loan and shall be secured by the Security Instrument. It is not
necessary for an Event of Default to have occurred for Indemnified Parties to exercise their
rights pursuant to this Agreement.

          13. The term of the indemnity provided for herein will commence on the date hereof and
continue until such time as no legal action can be successfully brought against Indemnitee
and/or any Indemnified Party due to applicable statutes of limitation. WITHOUT IN ANY WAY
LIMITING THE ABOVE, IT IS EXPRESSLY UNDERSTOOD THAT INDEMNITOR’S DUTY TO INDEMNIFY THE
INDEMNIFIED PARTIES SHALL SURVIVE: (i) ANY JUDICIAL OR NON-JUDICIAL FORECLOSURE UNDER THE
SECURITY INSTRUMENT, OR TRANSFER OF THE PROPERTY IN LIEU THEREOF;
(ii) THE RELEASE AND RECONVEYANCE OR CANCELLATION OF THE SECURITY INSTRUMENT; AND (iii) THE
SATISFACTION OF ALL OF BORROWER’S OBLIGATIONS UNDER THE LOAN DOCUMENTS.

          14. Any amounts payable to Indemnitee under this Agreement shall become immediately due and
payable and, if not paid within ten (10) days of written demand therefor shall bear interest at
the rate equal to the lesser of (a) the Default Rate (as defined in the Note), or (b) the
maximum interest rate which Borrower or any other Indemnitor may by law pay or Indemnified
Parties may charge and collect, from the date payment was due.

6

 

          15. 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 near the Property or otherwise obligated by law to bear the cost. Indemnitee shall
be and hereby is subrogated to all of Indemnitor’s rights now or hereafter in such claims.

          16. Indemnitor shall cooperate with Indemnitee, and provide access to Indemnitee and any
professionals engaged by Indemnitee, upon Indemnitee’s request, to conduct, contract for,
evaluate or interpret any environmental assessments, audits, investigations, testing, sampling,
analysis and similar procedures on the Property.

          18. No delay on Indemnitee’s part in exercising any right, power or privilege under this
Agreement shall operate as a waiver of any such privilege, power or right.

          17. Indemnitor shall, within five (5) business days of receipt thereof, give written notice
to the Indemnitee of (i) any notice or advice from any Governmental Authority or any source
whatsoever with respect to Hazardous Substances on, from or affecting the Property, and (ii) any
claim, suit or proceeding, whether administrative or judicial in nature (“Legal Action”),
brought against the Indemnitor or instituted with respect to the Property, with respect to which
Indemnitor may have liability under this Agreement. Such notice shall comply with the
provisions of paragraph 24 hereof.

          18. Indemnitee shall, at all times, be free to independently establish to its satisfaction
and in its absolute discretion the compliance with the terms of this Agreement, including random
inspections on a reasonable basis so long as such inspections do not unreasonably interfere with
the rights of any Tenant in the Property.

          19. To the extent applicable, Indemnitor has filed all federal, state, county, municipal,
and city income and other tax returns required to have been filed by it and has paid all taxes
and related liabilities which have become due pursuant to such returns or pursuant to any
assessments received by it. No Indemnitor knows of any basis for any additional assessment in
respect of any such taxes and related liabilities for prior years.

          20. All notices given under this Agreement shall be given and become effective as provided
in the Loan Agreement.

          21. The terms of this Agreement are for the sole and exclusive protection and use of
Indemnitee and the 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 Indemnified Parties are not such excluded third-party beneficiaries.

          22. Capitalized terms used herein and not specifically defined herein shall have the
respective meanings ascribed to such terms in the Loan Agreement or Loan Documents.

7

 

          23. This Agreement may be executed in several counterparts, each of which counterparts
shall be deemed an original instrument and 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.

          24. This Agreement may not be modified, amended, waived, extended, changed, discharged or
terminated orally or by any act or failure to act on the part of Indemnitee, 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.

          25. Any one or more parties liable upon or in respect of this Agreement may be released
without affecting the liability of any party not so released.

          26. 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.

          27. If any term, condition or covenant of this Agreement shall be held to be invalid,
illegal or unenforceable in any respect, this Agreement shall be construed without such
provision.

          28. THIS AGREEMENT SHALL BE GOVERNED BY, AND INTERPRETED AND CONSTRUED IN ACCORDANCE WITH,
THE LAWS OF THE STATE OF IOWA.

          29. The rights of Indemnitee under this Agreement shall be in addition to any other rights
and remedies of Indemnitee against Indemnitor under any other document or instrument now or
hereafter executed by Indemnitor, or at law or in equity (including, without limitation, any
right of reimbursement or contribution pursuant to the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, 42 U.S.C. Section 9601 et seq., as heretofore or
hereafter amended from time to time), or the environmental laws of the state of Iowa.

IMPORTANT: READ BEFORE SIGNING. THE TERMS OF THIS AGREEMENT SHOULD BE READ CAREFULLY BECAUSE
ONLY THOSE TERMS IN WRITING
ARE ENFORCEABLE. NO OTHER TERMS OR ORAL PROMISES NOT CONTAINED IN THIS WRITTEN CONTRACT MAY BE
LEGALLY ENFORCED. YOU MAY CHANGE THE TERMS OF THIS AGREEMENT ONLY BY ANOTHER WRITTEN AGREEMENT.

By signing below, the parties hereto acknowledge that it concurrently received of a copy of the
documents and each document referenced herein.

          IN WITNESS WHEREOF, Borrower has duly executed this Agreement the day and year first above
written.

8

 

	 	 	 	 	 
	 	BORROWER:	 
	 	

SIR Park Place, LLC, an Iowa limited liability company

by: Steadfast Income Advisor, LLC, its Manager

 	 
	 	By:  	/s/  James
Kasim	 
	 	 	Name:  	James
Kasim 	 
	 	 	Title:  	Chief
Financial Officer 	 
	 

	 	 	 	 	 	 

	STATE OF                         

	 	)	 	 	 
	 

	 	)	 	 	SS.
	COUNTY OF                     

	 	)	 	 	 

     This instrument was acknowledged before me on this ___ day of December, 2010 by
____________ as ____________of Steadfast Income Advisor, LLC, the Manager of
SIR Park Place, LLC.

[See
Attached Certificate]                

Notary Public in and for the State of ______

9exv10w7

Exhibit 10.7

PROPERTY MANAGEMENT AGREEMENT

     THIS PROPERTY MANAGEMENT AGREEMENT (this “Agreement”) is made and entered into as
of December 22nd, 2010 (the “Effective Date”), by and between SIR PARK PLACE, LLC, an
Illinois limited liability company (“Owner”), and STEADFAST MANAGEMENT CO., INC., a
California corporation (“Manager”).

ARTICLE 1

DEFINITIONS

     Section 1.1 Definitions. The following terms shall have the following meanings when
used in this Agreement:

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

     “Annual Business Plan” has the meaning given in Section 3.11(a).

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

     “Depository” means such bank or federally-insured or other financial institution as
Owner shall designate in writing.

     “Effective Date” has the meaning given in the introductory paragraph.

     “Fiscal Year” means the calendar year beginning January 1 and ending December 31 of
each calendar year, or such other fiscal year as determined by Owner and of which Manager is
notified in writing; provided that the first Fiscal Year of this Agreement shall be the period
beginning on the Effective Date and ending on December 31 of the calendar year in which the
Effective Date occurs.

     “Governmental Requirements” has the meaning given in Section 3.14.

     “Gross Collections” means all amounts actually collected as rents or other charges for
use and occupancy of apartment units and from users of garage spaces (if any), leases of other
non-dwelling facilities in the Property and concessionaires (if any) in respect of the Property,
including furniture rental, parking fees, forfeited security deposits, application fees, late
charges, income from coin-operated machines, proceeds from rental interruption insurance, and other
miscellaneous income collected at the Property; excluding, however, all other receipts, including
but not limited to, income derived from interest on investments or otherwise, proceeds of claims on
account of insurance policies (other than rental interruptions insurance), abatement of taxes,
franchise fees, and awards arising out of eminent domain proceedings, discounts and dividends on
insurance policies.

     “Hazardous Materials” means any material defined as a hazardous substance under the
Comprehensive Environmental Response, Compensation and Liability Act of 1980, the Resource
Conservation and Recovery Act, or any state or local statute regulating the storage, release,
transportation or other disposition of hazardous material, as any of those laws may have been
amended to the date hereof, and the administrative regulations promulgated thereunder prior to

1

 

the date hereof, and, whether or not defined as hazardous substances under the foregoing Governmental
Requirements, petroleum products (other than petroleum products used in accordance with
Governmental Requirements by Owner or its tenants in the usual and ordinary course of their
activities), PCBs and radon gas.

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

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

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

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

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

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

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

     “Security Deposit Account” has the meaning given in Section 2.3.

     “State” means the state in which the Property is located.

ARTICLE 2

APPOINTMENT OF AGENCY AND RENTAL RESPONSIBILITY

     Section 2.1 Appointment. Owner hereby appoints Manager and Manager hereby accepts
appointment as the sole and exclusive leasing agent and manager of the Property on the terms and
conditions set forth herein. Owner warrants and represents to Manager that Owner owns fee simple
title to the Property with all requisite authority to hereby appoint Manager and to enter into this
Agreement.

     Section 2.2 Owner’s Representative. Owner shall from time to time designate one or
more persons to serve as Owner’s representative (“Owner’s Representative”) in all dealings
with Manager hereunder. Whenever the approval, consent or other action of Owner is called for
hereunder, such approval, consent or action shall be binding on Owner if specified in writing and
signed by Owner’s Representative. The initial Owner’s Representative shall be Kyle Winning. Any
Owner’s Representative may be changed at the discretion of Owner, at any time, and shall be
effective upon Manager’s receipt of written notice identifying the new Owner’s Representative.

2

 

     Section 2.3 Leasing. Manager shall perform all promotional, leasing and management
activities required to lease apartment units in the Property. Throughout the term of this
Agreement, Manager shall use its diligent efforts to lease apartment units in the Property.
Manager shall advertise the Property, prepare and secure advertising signs, space plans, circulars,
marketing brochures and other forms of advertising. Owner hereby authorizes Manager pursuant to
the terms of this Agreement to advertise the Property in conjunction with institutional advertising
campaigns and allocate costs on a pro rata basis among the Properties being advertised (to the
extent authorized by the Annual Business Plan). All inquiries for any leases or renewals or
agreements for the rental of the Property or portions thereof shall be referred to Manager and all
negotiations connected therewith shall be conducted solely by or under the direction of Manager.
Manager is hereby authorized to execute, deliver and renew residential tenant leases on behalf of
Owner. Manager is authorized to utilize the services of apartment locator services and the fees of
such services shall be operating expenses of the Property and, to the extent paid by Manager,
reimbursable by Owner.

     Section 2.4 Manager’s Standard of Care. Manager shall perform its duties under this
Agreement in a manner consistent with professional property management services. In no event shall
the scope or quality of services provided by Manager for the Property hereunder be less than those
generally performed by professional property managers of similar properties in the market area
where the Property is located. Manager shall make available to Owner the full benefit of the
judgment, experience, and advice of the members and employees of Manager’s organization with
respect to the policies to be pursued by Owner in operating the Property, and will perform the
services set forth herein and such other services as may be requested by Owner in managing,
operating, maintaining and servicing the Property.

ARTICLE 3

SERVICES TO BE PERFORMED BY MANAGER

     Section 3.1 Expense of Owner. All acts performed by Manager in the performance of its
obligations under this Agreement shall be performed as an independent contractor of Owner, and all
obligations or expenses incurred thereby, shall be for the account of, on behalf of, and at the
expense of Owner, except as otherwise specifically provided in this Article 3, provided Owner shall
be obligated to reimburse Manager only for the following:

          (a) Costs and Expenses. All costs and expenses incurred by Manager on behalf of Owner
in connection with the management and operation of the Property, including but not limited to all
compensation payable to the employees at the Property and identified in the Operating Budget and
taxes and assessments payable in connection therewith and reasonable travel and expenses associated
therewith, all marketing costs, all collection and lease enforcement costs, all maintenance and
repair costs incurred in accordance with Section 3.5 hereof, all utilities and related services,
all on-site overhead costs and all other costs reasonably incurred by Manager in the operation and
management of the Property, excluding, however, all of Manager’s general overhead
costs, including without limitation, all expenses incurred at
Manager’s corporate headquarters and other Manager office sites other than the property
management office located at the Property (i.e., office expenses, long distance phone
calls, employee training, postage, copying, supplies, electronic data processing and accounting

3

 

expenses), general accounting and reporting expenses for services included among Manager’s duties
under the Agreement; and

          (b) Other. All sums otherwise due and payable by Owner as expenses of the Property
authorized to be incurred by Manager under the terms of this Agreement and the Operating Budget,
including compensation payable under Section 4.1 hereof to Manager for its services hereunder.

     Manager may use employees normally assigned to other work centers or part-time employees to
properly staff the Property, reduced, increased or emergency work load and the like including the
property manager, business manager, assistant managers, leasing directors, or other administrative
personnel, maintenance employees or maintenance supervisors whose wages and related expenses shall
be reimbursed on a pro rata basis for the time actually spent at the Property. A property manager
or business manager at the Property and any other persons performing functions substantially
similar to those of a business manager, including but not limited to assistant managers, leasing
directors, leasing agents, sales directors, sales agents, bookkeepers, and other administrative
and/or maintenance personnel performing work at the site, and on-site maintenance personnel, shall
not be considered executive employees of Manager. All reimbursable payments made by Manager
hereunder shall be reimbursed from funds deposited in an account established pursuant to Section
5.2 of this Agreement. Manager shall not be obligated to make any advance to or for the account of
Owner nor shall Manager be obligated to incur any liability or obligation for the account of Owner
without assurance that the necessary funds for the discharge thereof will be provided by Owner. In
the performance of its duties as agent and manager of the Property, Manager shall act solely as an
independent contractor of Owner. All debts and liabilities to third persons incurred by Manager in
the course of its operation and management of the Property shall be the debts and liabilities of
Owner only, and Manager shall not be liable for any such debt or liabilities, except to the extent
Manager has exceeded its authority hereunder.

     Section 3.2 Covenants Concerning Payment of Operating Expenses. Owner covenants to pay
all sums for reasonable operating expenses in excess of gross receipts required to operate the
Property upon written notice and demand from Manager within five days after receipt of written
notice for payment thereof.

     Section 3.3 Employment of Personnel. Manager shall use its diligent efforts to
investigate, hire, pay, supervise and discharge the personnel necessary to be employed by it to
properly maintain, operate and lease the Property, including without limitation a property manager
or business manager at the Property. Such personnel shall in every instance be deemed agents or
employees, as the case may be, of Manager. Owner has no right of supervision or direction of
agents or employees of Manager whatsoever; however, Owner shall have the right to require the
reassignment or termination of any employee. All Owner directives shall be communicated to
Manager’s senior level management employees. Manager and all personnel of Manager who handle or
who are responsible for handling Owner’s monies shall be bonded in favor of Owner. Manager agrees to
obtain and keep in effect fidelity insurance in an amount not less than Two Hundred Fifty Thousand
Dollars ($250,000). All reasonable salaries, wages and other compensation of personnel employed by
Manager, including so-called fringe benefits, worker’s compensation, medical and health insurance
and the like, shall be deemed to be

4

 

reimbursable expenses of Manager. Manager may allow its
employees who work at the Property and provide services to the Property after normal business
hours, to reside at the Property for reduced rents (or rent fee as provided in the Operating
Budget) in consideration of their benefit to Owner and the Property, provided such reduced rents
are reflected in the Annual Business Plan.

     Section 3.4 Utility and Service Contracts. Manager shall make, at Owner’s expense and
in Owner’s name or in Manager’s name, as agent for Owner, contracts for water, electricity, gas,
fuel, oil, telephone, vermin extermination, trash removal, cable television, security protection
and other services deemed by Manager to be necessary or advisable for the operation of the
Property. In Owner’s name or in Manager’s name, as agent for Owner, and at Owner’s expense,
Manager shall also place orders for such equipment, tools, appliances, materials, and supplies as
are reasonable and necessary to properly maintain the Property. Owner agrees to pay or reimburse
Manager for all expenses and liabilities incurred by reason of this Section provided that such
amounts are in accordance with the Operating Budget.

     Section 3.5 Maintenance and Repair of Property. Manager shall use its diligent
efforts to maintain, at Owner’s expense, the buildings, appurtenances and grounds of the Property
in good condition and repair, including interior and exterior cleaning, painting and decorating,
plumbing, carpentry and such other normal maintenance and repair work as may be reasonably
desirable taking into consideration the amount allocated therefor in the Annual Business Plan.
With respect to any expenditure not contemplated by the Annual Business Plan, Manager shall not
incur any individual item of repair or replacement in excess of Five Thousand Dollars ($5,000.00)
unless authorized in writing by Owner’s Representative, excepting, however, that emergency repairs
immediately necessary for the preservation and safety of the Property or to avoid the suspension of
any service to the Property or danger of injury to persons or damage to property may be made by
Manager without the approval of Owner’s Representative. Owner shall not establish standards of
maintenance and repair that violate or may violate any laws, rules, restrictions or regulations
applicable to Manager or the Property or that expose Manager to risk of liability to tenants or
other persons. Manager shall not be obligated by this Section to perform any Major Capital
Improvements.

     Section 3.6 Supervision of Capital Improvements or Major Repairs. When requested by
Owner in writing or set forth in an Approved Business Plan, Manager, at Owner’s expense and in
Owner’s name or in Manager’s name, as agent for Owner, shall supervise the installation and
construction of all Major Capital Improvements to the Property where such work constitutes other
than normal maintenance and repair, for additional compensation as set forth in a separate
agreement. In such events, Manager may negotiate contracts with all necessary contractors,
subcontractors, materialmen, suppliers, architects, and
engineers on behalf of, and in the name of, Owner, and may compromise and settle any dispute
or claim arising therefrom on behalf of and in the name of Owner; provided only that Manager shall
act in good faith and in the best interest of Owner at all times and Owner shall approve all
contracts for such work. Manager will furnish or will cause to be furnished all personnel
necessary for proper supervision of the work and may assign personnel located at the Property where
such work is being performed to such supervisory work (and such assignment shall not reduce or
abate any other fees or compensation owed to Manager under this Agreement). Owner acknowledges
that Manager, or an affiliate of Manager, may bid on any such work, and that Manager, or an
affiliate

5

 

 of Manager, may be selected to perform part or all of the work; provided that if Manager
desires to select itself, or its affiliate to do any work, it shall first notify Owner of the terms
upon which it, or its affiliate, proposes to contract for the work, and terms upon which the
independent contractors have offered to perform, and shall state the reasons for preferring itself,
or its affiliate, over independent contractors and Owner shall have fifteen days to disapprove
Manager, or its affiliate, and to request performance by an independent contractor. Only Owner
shall have the power to compromise or settle any dispute or claim arising from work performed by
Manager, or its affiliate; and it is expressly understood that the selection of Manager, or its
affiliate, will not affect any fee or other compensation payable to Manager hereunder. For the
purposes of this Agreement, the term “Major Capital Improvements” shall mean work having an
estimated cost of $25,000 or more. If Owner and Manager fail to reach an agreement for Manager’s
additional compensation as provided in this Section 3.6, Owner may contract with a third party to
supervise installation or construction of Major Capital Improvements.

     Section 3.7 Insurance.

          (a) Owner Requirements. Owner agrees to maintain all forms of insurance required by
law or any loan documents covering the Property and as reasonably deemed by Owner to be necessary
or needed to adequately protect Owner and Manager, including but not limited to public liability
insurance, boiler insurance, fire and extended coverage insurance, and burglary and theft
insurance. All insurance coverage shall be placed with such companies, in such amounts and with
such beneficial interest appearing therein as shall be reasonably acceptable to Owner. Public
liability insurance shall be maintained in such amounts as Owner determines as commercially
reasonable or as otherwise required by its lenders or investors.

          (b) Manager Requirements. Manager agrees to maintain, at its own expense, public
liability insurance in an amount not less than Three Million Dollars ($3,000,000) and all other
forms of insurance required by law or any loan documents covering the Property and as reasonably
deemed by Owner and Manager to be necessary or needed to adequately protect Owner and Manager,
including but not limited to workers compensation insurance, professional liability, employee
practices, and fidelity insurance. Manager shall use its diligent efforts to investigate and make a
written report to the insurance company as to all accidents, claims for damage relating to the
ownership, operation and maintenance of the Property, any damage or destruction to the Property and
the estimated cost of repair thereof, and shall prepare any and all reports for any insurance
company in connection therewith. All such reports shall be timely filed with the insurance company
as required under the terms of the insurance policy involved. With the prior written approval of
Owner, Manager is authorized to settle any and all claims against insurance companies arising out
of any policies, including the execution of proofs of loss, the
adjustment of losses, signing of receipts and collection of monies (no approval by Owner shall
be required for the settlement of claims of $5,000 or less). Manager is further authorized to
contract for the maintenance and repair of any damage or casualty in accordance with Section 3.6
above. Manager shall receive as an additional fee for such services that fee designated in the
loss adjustment as a general contractor’s fee, provided that insurance proceeds that exceed the
cost of repairing the damage or restoring the loss are available to pay such fees. In such event
Manager shall be responsible for all costs incurred by Manager in adjusting such loss and
contracting for repairs.

6

 

          (c) Loss or Liability Claims. Owner and Manager mutually agree for the benefit of
each other to look only to the appropriate insurance coverages in effect pursuant to this Agreement
in the event any demand, claim, action, damage, loss, liability or expense occurs as a result of
injury to person or damage to property, regardless whether any such demand, claim, action, damage,
loss, liability or expense is caused or contributed to, by or results from the negligence of Owner
or Manager or their respective subsidiaries, affiliates, employees, directors, officers, agents or
independent contractors and regardless whether the injury to person or damage to property occurs in
and about the Property or elsewhere as a result of the performance of this Agreement. Except for
claims that are covered by the indemnity contained in Section 3.7(d) below, Owner agrees that
Owner’s insurance shall be primary without right of subrogation against Manager with respect to all
claims, actions, damage, loss or liability in or about the Property. Nevertheless, in the event
such insurance proceeds are insufficient to satisfy (or such insurance does not cover) the demand,
claim, action, loss, liability or expense, Owner agrees, at its expense, to indemnify and hold
Manager and its subsidiaries, affiliates, officers, directors, employees, agents or independent
contractors harmless to the extent of the excess liability. For purposes of this Section 3.7(c),
any deductible amount under any policy of insurance shall not be deemed to be included as part of
collectible insurance proceeds.

          (d) Manager Indemnity. Notwithstanding anything contained in this Agreement to the
contrary, Manager shall indemnify and hold harmless Owner, and its representative subsidiaries,
affiliates, officers, directors, employees, agents or independent contractors, from all demands,
claims, actions, losses, liabilities or expenses that are not covered by insurance and which is
determined to have resulted from the gross negligence, willful misconduct or breach of this
Agreement by Manager in connection with the performance of its duties and obligations under this
Agreement.

          (e) Acts of Tenants and Third Parties. In no event shall Manager have any liability
to Owner or others for any acts of vandalism, trespass or criminal activity of any kind by tenants
or third parties on or with respect to the Property and Owner’s insurance shall be primary
insurance without right of subrogation against Manager regarding claims arising out of or resulting
from acts of vandalism, trespass or criminal activity.

     Section 3.8 Collection of Monies. Manager shall use its diligent efforts to collect
all rents and other charges due from tenants, users of garage spaces, carports, storage spaces (if
any), commercial lessees (if any) and concessionaires (if any) in respect of the Property and
otherwise due Owner with respect to the Property in the ordinary course of business, provided that
Manager does not guarantee the creditworthiness of any tenants, users, lessees or concessionaires or
collectability of accounts receivable from any of the foregoing. Owner authorizes Manager to
request, demand, collect, receive and receipt for all such rent and other charges and to institute
legal proceedings in the name of Owner, and at Owner’s expense, for the collection thereof, and for
the dispossession of tenants and other persons from the Property or to cancel or terminate any
lease, license or concession agreement for breach or default thereunder, and such expense may
include the engaging of legal counsel for any such matter. All monies collected by Manager shall
be deposited in the separate bank account referred to in Section 5.2 herein.

7

 

     Section 3.9 Manager Disbursements.

          (a) Manager’s Compensation and Reimbursements. From Gross Collections, Manager shall
be authorized to retain and pay (1) Manager’s compensation, together with all sales or other taxes
(other than income) which Manager is obligated, presently or in the future, to collect and pay to
the State or any other governmental authority with respect to the Property or employees at the
Property, (2) the amounts reimbursable to Manager under this Agreement, (3) the amount of all real
estate taxes and other impositions levied by appropriate authorities with respect to the Property
which, if not escrowed with any mortgagee, shall be paid upon specific written direction of Owner
before interest begins to accrue thereon; and (4) amounts otherwise due and payable as operating
expenses of the Property authorized to be incurred under the terms of this Agreement.

          (b) Debt Service. The provisions of this Section 3.9 regarding disbursements shall
include the payment of debt service related to any mortgages of the Property, unless otherwise
instructed in writing by Owner.

          (c) Third Parties. All costs, expenses, debts and liabilities owed to third persons
that are incurred by Manager pursuant to the terms of this Agreement and in the course of managing,
leasing and operating the Property shall be the responsibility of Owner and not Manager. Owner
agrees to provide sufficient working capital funds to Manager so that all amounts due and owing may
be promptly paid by Manager. Manager is not obligated to advance any funds. If at any time there
is not sufficient cash in the account available to Manager pursuant to Section 5.2 with which to
promptly pay the bills due and owing, Manager will request that the necessary additional funds be
deposited by Owner in an amount sufficient to meet the shortfall. Owner will deposit the
additional funds requested by Manager within five days.

          (d) Other Provisions. The provisions of this Section 3.9 regarding reimbursements to
Manager shall not limit Manager’s rights under any other provision of this Agreement.

     Section 3.10 Use and Maintenance of Premises. Manager agrees that it will not
knowingly permit the use of the Property for any purpose that might void any insurance policy held
by Owner or that might render any loss thereunder uncollectible, or that would be in violation of
Governmental Requirements, or any covenant or restriction of any lease of the Property. Manager
shall use its good faith efforts to secure substantial compliance by the tenants with the terms and conditions of their respective
leases. All costs of correcting or complying with, and all fines payable in connection with, all
orders or violations affecting the Property placed thereon by any governmental authority or Board
of Fire Underwriters or other similar body shall be at the cost and expense of Owner.

     Section 3.11 Annual Business Plan.

          (a) Submission. On or before November 1 of each Fiscal Year during the term of this
Agreement, or such earlier date as reasonably requested by Owner, its lenders or investors, Manager
shall prepare and submit to Owner for Owner’s approval, an Annual

8

 

Business Plan for the promotion,
leasing, operations, repair and maintenance of the Property for the succeeding Fiscal Year during
which this Agreement is to remain in effect (the “Annual Business Plan”). The Annual
Business Plan shall include a detailed budget of projected income and expenses for the Property for
such Fiscal Year (the “Operating Budget”) and a detailed budget of projected capital
improvements for the Property for such Fiscal Year (the “Capital Budget”).

          (b) Approval. Manager shall meet with Owner to discuss the proposed Annual Business
Plan and Owner shall approve the proposed Annual Business Plan within 20 days of its submission to
Owner, or as soon thereafter as commercially practicable. To be effective, any notice which
disapproves a proposed Annual Business Plan must contain specific objections in reasonable detail
to individual line items. If Owner fails to provide an effective notice disapproving a proposed
Annual Business Plan within such 20-day period, the proposed Annual Business Plan shall be deemed
to be approved. Owner acknowledges that the Operating Budget is intended only to be a reasonable
estimate of the income and expenses of the Property for the ensuing Fiscal Year. Manager shall not
be deemed to have made any guarantee, warranty or representation whatsoever in connection with the
Operating Budget.

          (c) Revision. Manager may revise the Operating Budget from time to time, as
necessary, to reflect any unpredicted significant changes, variables or events or to include
significant additional, unanticipated items of revenue and expense. Any such revision shall be
submitted to Owner for approval, which approval shall not be unreasonably withheld, delayed or
conditioned.

          (d) Implementation. Manager agrees to use diligence and to employ all reasonable
efforts to ensure that the actual costs of maintaining and operating the Property shall not exceed
the Operating Budget either in total or in any one accounting category. Any expense causing or
likely to cause a variance of greater than ten percent (10%) or $25,000, whichever is greater, in
any one accounting category for the current month cumulative year-to-date total shall be promptly
explained to Owner by Manager in the next operating statement submitted by Manager to Owner.

     Section 3.12 Records, Reporting. Manager shall maintain at the regular business
office of Manager or at such other address as Manager shall advise Owner in writing, separate books
and journals and orderly files, containing rental records, insurance policies, leases,
correspondence, receipts, bills and vouchers, and all other documents and papers pertaining directly to the Property and the operation
thereof. All corporate statements, receipts, invoices, checks, leases, contracts, worksheets,
financial statements, books and records, and all other instruments and documents relating to or
arising from the operation or management of the Property shall be and remain the property of Owner
and the Owner shall have the right to inspect such records at any reasonable time upon prior
notice; Manager shall have the right to request and maintain copies of all such matters, at
Manager’s cost and expense, at all reasonable times during the term of this Agreement, and for a
reasonable time thereafter not to exceed three years. All on-site records, including leases, rent
rolls, and other related documents shall remain at the respective Property for which such records
are maintained as the property of Owner.

9

 

     Section 3.13 Financial Reports.

          (a) Monthly Reports. On or before the tenth day of each month during the term of this
Agreement, Manager shall deliver or cause to be delivered to Owner’s Representative a statement of
cash flow for the Property (on a cash and not an accrual basis) for the preceding calendar month.
All notices from any mortgagee claiming any default in any mortgage on the Property, and any other
notice from any mortgagee not of a routine nature, shall be promptly delivered by Manager to
Owner’s Representative.

          (b) Annual Reports. Within 45 days after the end of each Fiscal Year, Manager shall
deliver to Owner’s Representative a statement of cash flow showing the results of operations for
the Fiscal Year or portion thereof during which the provisions of this Agreement were in effect.

          (c) Employee Files. Manager shall execute and file punctually when due all forms,
reports and returns required by law relating to the employment of personnel.

     Section 3.14 Compliance with Governmental Requirements. Manager shall comply with all
laws, ordinances and regulations relating to the management, leasing and occupancy of the Property.
Owner acknowledges that Manager does not hold itself out to be an expert or consultant with
respect to, or represent that, the Property currently complies with applicable ordinances,
regulations, rules, statutes, or laws of governmental entities having jurisdiction over the
Properties or the requirements of the Board of Fire Underwriters or other similar bodies
(collectively, “Governmental Requirements”). Manager shall take such action as may be
reasonably necessary to comply with any Governmental Requirements applicable to Manager, including
the collection and payment of all sales and other taxes (other than income taxes) which may be
assessed or charged by the State or any governmental entities in connection with Manager’s
compensation. If Manager discovers that the Property does not comply with any Governmental
Requirements, Manager shall take such action as may be reasonably necessary to bring the Property
into compliance with such Governmental Requirements, subject to the limitation contained in Section
3.5 of this Agreement regarding the making of alterations and repairs. Manager, however, shall not
take any such action as long as Owner is contesting or has affirmed its intention to contest and
promptly institute proceedings contesting any such order or requirement. If, however, failure to
comply promptly with any such order or requirement would or might expose Manager to civil or
criminal liability, Manager shall have the right, but not the obligation, to cause the same to be
complied with and Owner agrees to indemnify and hold Manager harmless for taking such actions and
to promptly reimburse Manager for expenses incurred thereby. Manager shall promptly, and in no
event later than 72 hours from the time of receipt, notify Owner’s Representative in writing of all
such orders or notices. Manager shall not be liable for any effort or judgment or for any mistake
of fact or of law, or for anything that it may do or refrain from doing, except in cases of willful
misconduct or gross negligence of Manager.

10

 

ARTICLE 4

MANAGER’S COMPENSATION, TERM

     Section 4.1 Fees Paid to Manager. Commencing on the date hereof, Owner shall pay to
Manager a fee (the “Management Fee”), payable monthly in arrears, in an amount equal to
Three and One-half Percent (3.5%) of Gross Collections for such month. The Management Fee shall
not be subject to off-sets and charges unless agreed upon by the parties.

     Section 4.2 Term. This Agreement shall commence on the Effective Date, and shall
thereafter continue for a period of one (1) year from the Effective Date, unless otherwise
terminated as provided herein. Thereafter, if neither party gives written notice to the other at
least 30 days prior to the expiration date hereof that this Agreement is to terminate, then this
Agreement shall be automatically renewed on a month-to-month basis.

     Section 4.3 Termination Rights. Notwithstanding anything that may be contained herein
to the contrary, with or without grounds or cause therefor, Owner may terminate this Agreement at
any time by giving Manager thirty (30) days written notice thereof; provided, however, upon a
determination that this Agreement may be terminated for cause due to the gross negligence, willful
misconduct or bad acts of Manager or any of its employees, Owner may immediately terminate with
contract by giving Manager five (5) days written notice thereof. Any notice given pursuant to this
Article 4, shall be sent by certified mail.

     Section 4.4 Duties on Termination. Upon any termination of this Agreement as
contemplated in this Section 4.4, Manager shall be entitled to receive all compensation and
reimbursements, if any, due to Manager through the date of termination. If Owner or Manager shall
materially breach its obligations hereunder, and such breach remains uncured for a period of 10
days after written notification of such breach, the party not in breach hereunder may terminate
this Agreement by giving written notice to the other. Within 30 days after any termination,
Manager shall deliver to Owner’s Representative, the report required by Section 3.13(a) for any
period not covered by such a report at time of termination, and within 30 days after any such
termination, Manager shall deliver to Owner’s Representative, as required by Section 3.13(b), the
statement of cash flow for the Fiscal Year or portion thereof ending on the date of termination.
In addition, upon
termination of this Agreement for any reason, Manager will submit to Owner within 30 days
after termination any reports required hereunder, all of the cash and bank accounts of the
Property, including, without limitation, the Security Deposit Account, investments and records.
Manager will, within 30 days after termination, turn over to Owner all copies of all books and
records kept for the Property. If Manager desires to retain records of the Property, Manager must
reproduce them at its own expense.

ARTICLE 5

PROCEDURES FOR HANDLING RECEIPTS AND OPERATING CAPITAL

     Section 5.1 Security Deposits. Manager shall collect, deposit, hold, disburse and pay
security deposits as required by applicable State law and all other applicable laws, and in
accordance with the terms of each tenant’s lease. The amount of each security deposit will be
specified in the tenant’s lease. Security deposits will be deposited at the direction of Owner
into a separate interest-bearing account (the “Security Deposit Account”) at a Depository selected

11

 

by Owner. The Security Deposit Account shall be established in the name of the Owner and held
separate from all other of Manager’s funds and accounts, unless the Owner informs Manager, in
writing that it intends to hold the Security Deposit Account. If such account is held by Manager,
only representatives of Manager will be signatories to this account. To the extent possible, the
Security Deposit Account shall be fully insured by the Federal Deposit Insurance Corporation
(FDIC). Owner agrees to indemnify and hold harmless Manager, and Manager’s representatives,
officers, directors and employees for any loss or liability with respect to any use by Owner of the
tenant security deposits that is inconsistent with the terms of tenant leases and applicable laws.

     Section 5.2 Separation of Owner’s Monies. Manager shall deliver all collected rents,
charges and other amounts received in connection with the management and operation of the Property
(except for tenants’ security deposits, which will be handled as specified in this Agreement) to a
Depository designated by Owner.

     Section 5.3 Depository Accounts. Except to the extent that Manager has not complied
with its obligations under Section 2.3(c), Owner and Manager agree that Manager shall have no
liability for loss of funds of Owner contained in the bank accounts for the Property maintained by
Owner or Manager pursuant to this Agreement due to insolvency of the bank or financial institution
in which its accounts are kept, whether or not the amounts in such accounts exceed the maximum
amount of federal or other deposit insurance applicable with respect to the financial institution
in question.

     Section 5.4 Working Capital. In addition to the funds derived from the operation of
the Property, Owner shall furnish and maintain in the operating accounts of the Property such other
funds as may be necessary to discharge financial commitments required to efficiently operate the
Property and to meet all payrolls and satisfy, before delinquency, and to discharge all accounts
payable. Manager shall have no responsibility or obligation with respect to the furnishing of any
such funds. Nevertheless, Manager shall have the right, but not the obligation, to advance funds
or contribute property on behalf of Owner to satisfy obligations of Owner in connection with this
Agreement and the Property. Manager shall keep appropriate records to document all reimbursable
expenses paid by Manager, which records shall be made available for inspection by Owner or its
agents on request. Owner agrees to reimburse Manager upon demand for money paid or property
contributed in connection with the Property and this Agreement.

     Section 5.5 Authorized Signatures. Any persons from time to time designated by
Manager shall be authorized signatories on all bank accounts established by Manager pursuant to
this Agreement and shall have authority to make disbursements from such accounts. Funds may be
withdrawn from all bank accounts established by Manager, in accordance with this Article 5, only
upon the signature of an individual who has been granted that authority by Manager and funds may
not be withdrawn from such accounts by Owner unless Manager is in default hereunder.

ARTICLE 6

MISCELLANEOUS

     Section 6.1 Assignment. Upon 30 days written notification, Owner may assign its
rights and obligations to any successor in title to the Property and upon such assignment shall be

12

 

relieved of all liability accruing after the effective date of such assignment. This Agreement may
not be assigned or delegated by Manager without the prior written consent of Owner, which Owner may
withhold in its sole discretion. Manager shall assign or provide a security interest in this
Agreement at the request of Owner, its lenders or investors. Any unauthorized assignment shall be
null and void ab initio, and shall not in any event release Manager from any liabilities hereunder.

     Section 6.2 Notices. All notices required or permitted by this Agreement shall be in
writing and shall be sent by registered or certified mail, addressed in the case of Owner to SIR
Park Place, LLC, 18100 Von Karman Avenue, Suite 500, Irvine, CA 92612, Attn: R. Kyle Winning; and
in the case of Manager to Steadfast Management Company, Inc., 4343 Von Karman Avenue, Suite 300,
Newport Beach, CA 92660, Attention: Ana Marie del Rio, or to such other address as shall, from
time to time, have been designated by written notice by either party given to the other party as
herein provided.

     Section 6.3 Entire Agreement. This Agreement shall constitute the entire agreement
between the parties hereto and no modification thereof shall be effective unless in writing
executed by the parties hereto.

     Section 6.4 No Partnership. Nothing contained in this Agreement shall constitute or
be construed to be or create a partnership or joint venture between Owner, its successors or
assigns, on the one part, and Manager, its successors and assigns, on the other part.

     Section 6.5 No Third Party Beneficiary. Neither this Agreement nor any part hereof
nor any service relationship shall inure to the benefit of any third party, to any trustee in
bankruptcy, to any assignee for the benefit of creditors, to any receiver by reason of insolvency,
to any other fiduciary or officer representing a bankrupt or insolvent estate of either party, or
to the creditors or claimants of such an estate. Without limiting the generality of the foregoing
sentence, it is specifically understood and agreed that such insolvency or bankruptcy of either
party hereto shall, at the option of the other party, void all rights of such insolvent or bankrupt
party hereunder (or so many of such rights as the other party shall elect to void).

     Section 6.6 Severability. If any one or more of the provisions of this Agreement, or
the applicability of any such provision to a specific situation, shall be held invalid or
unenforceable, such provision should be modified to the minimum extent necessary to make it or its
application valid and enforceable, and the validity and enforceability of all other provisions of
this Agreement and all other applications of such provisions shall not be affected thereby.

     Section 6.7 Captions, Plural Terms. Unless the context clearly requires otherwise,
the singular number herein shall include the plural, the plural number shall include the singular
and any gender shall include all genders. Titles and captions herein shall not affect the
construction of this Agreement.

     Section 6.8 Attorneys’ Fees. Should either party employ an attorney to enforce any of
the provisions of this Agreement, or to recover damages for breach of this Agreement, the
non-prevailing party in any action agrees to pay to the prevailing party all reasonable costs,

13

 

damages and expenses, including reasonable attorneys’ fees, expended or incurred by the prevailing
party in connection therewith.

     Section 6.9 Signs. Manager shall have the right to place signs on the Property in
accordance with applicable Governmental Requirements stating that Manager is the manager and
leasing agent for the Property.

     Section 6.10 Survival of Indemnities. The indemnification obligations of the parties
to this Agreement shall survive the termination of this Agreement to the extent of any claim or
cause of action based on an event occurring prior to the date of termination.

     Section 6.11 Governing Law. This Agreement shall be construed under and in accordance with the laws of the State and is
fully performable with respect to the Property in the county in which the Property is located.

     Section 6.12 Competitive Properties. Manager may, individually or with others, engage
or possess an interest in any other project or venture of every nature and description, including
but not limited to, the ownership, financing, leasing, operation, management, brokerage and sale of
real estate projects including apartment projects other than the Property, whether or not such
other venture or projects are competitive with the Property and Owner shall not have any claim as
to such project or venture or to the income or profits derived therefrom.

     Section 6.13 Set Off. Without prejudice to Manager’s right to terminate this
Agreement in accordance with the terms of this Agreement, Manager may at any time and without
notice to Owner, set off or transfer any sums held by Manager for or on behalf of Owner in the
accounts (other than the Security Deposit Account) maintained pursuant to this Agreement in or
towards satisfaction of any of Owner’s liabilities to Manager in respect of any sums due to Manager
under this Agreement.

     Section 6.14 Notice of Default. Manager shall not be deemed in default under this
Agreement, and Owner’s right to terminate Manager as a result of such default shall not accrue,
until Owner has delivered written notice of default to Manager and Manager has failed to cure same
within 30 days from the date of receipt of such notice.

     Section 6.15 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original.

[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]

14

 

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

	 	 	 	 	 	 	 

	OWNER:	 	SIR PARK PLACE, LLC,	 	 
	 	 	an Illinois limited liability company	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	Steadfast Income Advisor, LLC, its Manager	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	By:  /s/  James
Kasim
	 	 
	 

	 	 	 	      Name:  James
Kasim 
	 	 
	 

	 	 	 	      Title:   Chief
Financial
Officer 
	 	 
	 
	 	 	 	 	 	 
	MANAGER:	 	STEADFAST MANAGEMENT CO., INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:  /s/  Christopher
M. Hilbert 
	 
	 

	 	 	Name:  Christopher
M. Hilbert 
	 	 
	 

	 	 	Title:  Executive
Vice President 
	 	 

15

 

EXHIBIT A

THE PROPERTY

Legal Description: 615 Park Street, Des Moines, IA 50309

The real property situated in the City of Des Moines, County of Polk, State of Iowa, and described
as follows:

Units 403 through 409, inclusive, Units 411, 412 and 422, Units 501 and 502, Units 504 through 508,
inclusive, Units 510 through 512, inclusive, Units 601 through 612, inclusive, Units 701 through
712, inclusive, Units 801 through 812, inclusive, Units 901 through 912, inclusive, Units 1001,
1002, 1004 and 1005, Units 1007 through 1012, inclusive, Units 1101 through 1112, inclusive, Units
1201 through 1212, inclusive, Units 1301 and 1302, Units 1304 through 1312 inclusive, Units 1401
and 1402, Units 1404 through 1412, inclusive, Units 1501 through 1503, inclusive, Unites 1506
through 1512, inclusive, Units 1601 through 1616, inclusive, Garage Units P1 though P20, inclusive,
Garage Units P21a and P21b, Garage Units P22 and P23, Garage Units P25 through P51, inclusive,
Garage Units P53 through P58, inclusive, Garage Units P60a and P60b, Garage Units P62 through P68,
inclusive, Garage Units P69a and 69b, Garage Units P70 through P90, Garage Units P92 through P102,
inclusive, together with percentage interest in the Common Elements as provided in the Declaration
of Submission to the Horizontal Property Regime referred to below, in PARK PLACE CONDO LLC, a
Condominium, City of Des Moines, and County of Polk, Iowa, and located upon Lots 6 and 7 in Block
“R” in Grimmel’s Addition to the Town of Fort Des Moines, in accordance with and subject to the
Declaration of Submission to Horizontal Property Regime, recorded on December 18, 2006 in Book
11997 Page 522 in the records of the Polk County Iowa recorder as amended.

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00182-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00182-of-00352.parquet"}]]