Real Estate Preferred Equity Agreement

Real Estate Preferred Equity Agreement

This Real Estate Preferred Equity Agreement (the "Agreement") is entered into as of by and between the parties identified below. This Agreement sets forth the terms and conditions under which Investor will contribute preferred equity capital to Sponsor with respect to the Property described herein.

1. Property Identification

2. Parties

Individual    Corporation    LLC    Partnership    Other

Individual    Corporation    LLC    Partnership    Other

3. Contribution, Closing and Use of Proceeds

Investor agrees to contribute preferred equity in the aggregate amount of (the "Preferred Equity") to Sponsor on or before the Funding Date described below. The Preferred Equity shall be used for project costs, capital improvements, operating reserves and other uses expressly permitted by Sponsor and agreed in writing.

4. Preferred Return and Distribution Priority

The Preferred Equity shall accrue a preferred return at the annual rate of per annum, computed on an actual/365 basis, payable in accordance with the distribution waterfall set forth below.

Accrual type:    Cumulative    Non-Cumulative    Compounding:

Liquidation Preference (multiple of contributed capital):   Participation: Participating    Non-Participating    If participating, Investor share of residual proceeds:

5. Conversion, Redemption and Maturity

Conversion Right: Investor has a conversion right to convert Preferred Equity into ownership interests under the terms set forth below.    No conversion right.

If convertible, conversion ratio or method:

6. Representations, Warranties and Covenants

Each party represents and warrants to the other that it is duly organized, validly existing and in good standing under applicable law, has all requisite power and authority to execute and deliver this Agreement, and that this Agreement constitutes a valid and binding obligation enforceable in accordance with its terms. Investor represents that it is acquiring the Preferred Equity for investment and not for distribution or resale in violation of applicable securities laws.

Sponsor covenants to use commercially reasonable efforts to operate, maintain and preserve the Property, to comply with applicable laws, to obtain and maintain insurance with limits customary for projects of similar nature, and to provide Investor with financial reports and project updates as set forth herein.

7. Transfer Restrictions; Tag-Along/Drag-Along

Transfer of Preferred Equity by Investor is subject to Sponsor's prior written consent, which shall not be unreasonably withheld, except as restricted by applicable securities laws. Sponsor's transfers of the Property or Sponsor interests shall be subject to tag-along and drag-along provisions set forth in the definitive transaction documents.

8. Events of Default and Remedies

Events of Default shall include: (a) failure to make payments when due under this Agreement beyond any applicable cure period; (b) Sponsor insolvency or bankruptcy; (c) material breach of Sponsor's representations, warranties or covenants that remains uncured for the applicable cure period; and (d) any unauthorized transfer of the Preferred Equity. Upon an Event of Default, Investor shall have the remedies set forth in the definitive documents, including acceleration, foreclosure on collateral, or other equitable relief, subject to applicable law.

Cure period for Sponsor monetary defaults:

9. Insurance, Taxes and Maintenance

Sponsor shall maintain casualty, liability and such other insurance as is customary for properties of similar type and value, naming Investor as an additional insured where appropriate. Sponsor shall be responsible for payment of real estate taxes, assessments and ordinary course maintenance unless otherwise agreed in writing.

10. Disclosures

Lead-Based Paint (if residential built before 1978):    Yes    No

Known Material Environmental Conditions (mold, contamination, prior damage):    Yes    No

11. Governing Law; Miscellaneous

This Agreement shall be governed by and construed in accordance with the laws of the State of without regard to principles of conflicts of law. This Agreement, together with the definitive transaction documents executed by the parties, constitutes the entire agreement between the parties with respect to its subject matter and supersedes all prior and contemporaneous agreements and understandings, whether written or oral.

Amendments to this Agreement shall be effective only if in writing and signed by both parties. If any provision of this Agreement is held invalid or unenforceable, the remaining provisions shall remain in full force and effect.

Notices under this Agreement shall be delivered to the addresses provided above for Investor and Sponsor, or such other addresses as a party may designate in writing in accordance with this paragraph.

12. Signatures

Each person executing this Agreement warrants and represents that he or she is duly authorized to execute and deliver this Agreement on behalf of the party for which they sign and that their signature binds such party to the terms hereof.

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