<Page>

                                                                   Exhibit 10.03

Application is hereby made to The Northwestern Mutual Life Insurance Company
("Lender") for a mortgage loan (the "Loan") to be made to NTS Realty Holdings
Limited Partnership, a Delaware limited partnership ("Borrower"), to be secured
by a satisfactory first lien on six (6) Projects (all as listed on Exhibit A
hereto) making up the Property (as defined below) with terms and conditions as
set forth in this Application. Further, Borrower certifies to Lender that any
Projects not currently owned by Borrower will, in fact, be owned by Borrower
prior to Closing.

The security consists of six (6) separate parcels of land shown on Exhibit A
hereto under "Acres" (the "Land"), totaling approximately 110.90 acres, and
improved with six (6) garden apartment projects containing a combined 1,338
units, including landscaping, paved walkways, driveways, parking for
approximately 2,612 cars and other improvements (the "Improvements"). The
Improvements are as described in the drawings and specifications required under
the Condition hereof entitled DRAWINGS AND SPECIFICATIONS/CHANGE ORDERS. The
Land and the Improvements constitute the "Property". Each parcel of Land and the
Improvements located thereon constitute a "Project" and collectively the Parcels
and the Improvements located thereon constitute the "Projects". Collectively,
all of the Projects constitute the "Property".

The loan documentation may include separate Promissory Notes (or Amended &
Restated Promissory Notes, as the case may be) for each Project, as Lender may
determine, based on the allocated loan amounts (the "Allocated Loan Amounts")
and the allocated loan percentages (the "Allocated Loan Percentages"), all as
shown on Exhibit A attached hereto.

Lender has, for certain purposes, allocated the Loan to the various Projects
according to the Allocated Loan Amounts and Allocated Loan Percentages as shown
on Exhibit A attached hereto. After a Partial Release and after a Substitution
(as defined below), Lender shall determine new Allocated Loan Percentages for
all Projects (including any and all Substitute Projects that then constitute the
security for the Loan), which shall thereafter be in effect and thereafter known
as the Allocated Loan Percentages.

                                      TERMS

<Table>
<S>                                         <C>
         LOAN AMOUNT:                       $72,000,000

         TERM:                              10 YEARS

         AMORTIZATION:                      30 YEARS


                                       1
<Page>

         INTEREST RATE:                     5.98%

                                            NOTE: Lender waives the prepayment
                                            fees on Lender's loans 332021,
                                            332064, 332128, and 332129.

         EARNEST MONEY DEPOSIT:             $720,000

         MONTHLY STANDBY FEE:               0.30% (30 basis points) of the
                                            unadvanced Loan Amount. Unadvanced
                                            loan amount is defined as the
                                            difference between the Loan Amount
                                            and the sum of the outstanding loan
                                            balances on Lender's loans 332021,
                                            332064, 332128, and 332129.
</Table>


                                   DEFINITIONS

<Table>
<S>                      <C>
    DEBT SERVICE
    COVERAGE (22.2):     "Debt Service Coverage" means a number calculated by
                         dividing Net Income Available for Debt Service for a
                         fiscal period by the debt service during the same
                         fiscal period under all loans (including the Loan)
                         secured by any portion of the Property. For purposes of
                         the preceding sentence, "debt service" means the actual
                         debt service due under all loans secured by any portion
                         of the Property based upon an amortization schedule
                         which is the shorter of the actual amortization
                         schedule or 30 years (whether or not amortization is
                         actually required) and, if an accrual loan, as if
                         interest and principal on such loans were due monthly.


    EVENT OF
    DEFAULT (22.3):      "Event of Default" means a default remaining uncured
                         after notice to Borrower and the expiration of the
                         applicable cure period as set forth in the Condition
                         hereof entitled NOTICE OF DEFAULT.

    GOLF BROOK LOAN
    PREVIOUSLY ADVANCED
    AMOUNT               The outstanding balance of the original Promissory Note
                         for the Golf Brook Project evidencing the existing
                         mortgage loan made for the benefit of Lender, including
                         any and all accrued and unpaid interest thereon.


                                       2
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    GOLF BROOK PROJECT:  That certain Project known as Golf Brook, as shown on
                         Exhibit "A" hereto.

    LOAN CLOSING
    DATE (22.4):         "Loan Closing Date" means the earlier of the date on
                         which (i) the lien instrument(s) securing the Loan is
                         recorded or (ii) escrow closes and the title company is
                         committed to issue the title policy required under the
                         condition hereof entitled TITLE INSURANCE.

    NET INCOME
    AVAILABLE FOR
    DEBT SERVICE (22.5): "Net Income Available for Debt Service" means net
                         income (prior to giving effect to any capital gains or
                         losses and any extraordinary items) from the Property,
                         determined in accordance with generally accepted
                         accounting principles, for a fiscal period plus (to the
                         extent deducted in determining net income from the
                         Property) the following:

                         (A)  Interest on debt secured by any portion of the
                              Property for such fiscal period;

                         (B)  Depreciation, if any, of fixed assets at or
                              constituting the Property and LESS the following;

                         (C)  A replacement reserve for capital improvements,
                              unit remodels and structural items based on not
                              less than $750 per unit per annum;

                         (D)  The amount, if any, by which actual gross income
                              during such fiscal period exceeds that which would
                              be earned from the rental of 10% of the gross
                              leasable area in the Property;

                         (E)  The amount, if any, by which the actual management
                              fee is less than 3% of gross revenue during such
                              fiscal period;

                         (F)  The amount, if any, by which the actual real
                              estate taxes are less than $855 per annum; and

                         (G)  The amount, if any, by which total actual
                              operating expenses, excluding management fees,
                              real estate taxes and replacement reserves, are
                              less than $3,720 per annum.


                                       3
<Page>

                         All adjustments to net income referenced above shall be
                         calculated in a manner satisfactory to Lender.

    SABAL PARK PROJECT:  That certain Project known as Sabal Park, as shown on
                         Exhibit "A" hereto.


    SABAL PARK PROJECT
    LOAN PURCHASE PRICE  The amount paid in order for Lender to purchase from
                         Nationwide Life Insurance Company (as an outside third
                         party lender to Borrower) the existing mortgage loan on
                         the Sabal Park Project originally made for the benefit
                         of Nationwide Life Insurance Company.
</Table>

                                   CONDITIONS

1.      REQUIRED PAYMENTS (30): Interest only on the amount advanced (which, for
the purposes hereof, shall include both the Golf Brook Loan Previously Advanced
Amount and the Sabal Park Project Loan Purchase Price), shall be payable on the
15th day of the month following the date on which the Loan proceeds are
advanced. On the 15th day of the following month and on the 15th day of each
month thereafter until maturity, monthly interest and principal payments of
$430,751 shall be payable.

Interest will be calculated assuming each month contains 30 days and each
calendar year contains 360 days. In the event of a partial month, however,
interest for such month will be calculated based on the actual number of days
the loan balance is outstanding in the partial month and the actual number of
days in the respective calendar year.

Payments shall be made directly to Lender by electronic transfer of funds using
the Automated Clearing House System. All payments shall be applied first in
payment of interest, calculated monthly on the unpaid principal balance, and the
remainder in payment of principal. In any event, the entire unpaid principal
balance plus accrued interest shall be due and payable no later than the Loan
maturity date.

2.      PREPAYMENT IN FULL; "PAYOFF AMOUNT" PREPAYMENT RELATED TO A PARTIAL
RELEASE (104): Provided the Loan has been fully advanced, Borrower shall have
the right, upon not less than 10 business days prior written notice, beginning
October 1, 2005 of paying the Loan in full with a prepayment fee. Borrower's
failure to prepay within 20 business days of the date of Borrower's written
notice of prepayment shall be deemed a withdrawal of Borrower's notice of
prepayment, and Borrower shall be required to submit another written notice of
prepayment pursuant to the terms and conditions set forth in this Condition if
Borrower thereafter elects to prepay the Loan. In addition,


                                       4
<Page>

solely in the event of a partial release of security as described in the
Condition below entitled PARTIAL RELEASE, a prepayment of the Loan in part shall
be permitted. In the event of such a Partial Release, the amount being prepaid
is sometimes referred to herein as the "Payoff Amount".

The prepayment fee represents consideration to Lender for loss of yield and
reinvestment costs and shall also be payable whenever prepayment occurs as a
result of the application of Condemnation Proceeds, except as otherwise provided
herein (as defined in the Condition hereof entitled APPLICATION OF CONDEMNATION
PROCEEDS). The prepayment fee shall be the greater of Yield Maintenance or 1% of
the outstanding principal balance of the Loan or the Payoff Amount, as
applicable; except that if prepayment occurs as a result of application of
Condemnation Proceeds (less expenses of collection) the prepayment fee shall be
payable only to the extent the Condemnation Proceeds include an amount for the
prepayment fee as part of the award.

" Yield Maintenance" means the amount, if any, by which

        (A)     The present value of the Then Remaining Payments calculated by
                using a periodic discount rate (corresponding to the payment
                frequency on the Loan) which, when compounded for such number of
                payment periods in a year, equals the linearly interpolated per
                annum effective yield of the 2 Most Recently Auctioned United
                States Treasury Obligations having maturity dates most nearly
                equivalent to the maturity date of the Loan as reported in the
                issue of THE WALL STREET JOURNAL dated 1 business day preceding
                the prepayment date;

                exceeds

                (B)     The outstanding principal balance of the Loan (exclusive
                of all accrued interest) or the Payoff Amount (exclusive of all
                accrued interest), as applicable.

If such United States Treasury obligation yields shall not be reported as of
such time or the yields as of such time shall not be ascertainable, then the
periodic discount rate shall be equal to the linearly interpolated per annum
effective yield of the 2 Treasury Constant Maturity Series yields having
maturity dates most nearly equivalent to the maturity date of the Loan reported,
for the latest day for which such yields shall have been so reported, as of 1
business day preceding the prepayment date, in Federal Reserve Statistical
Release H.15 (519) (or any comparable successor publication) for actively traded
United States Treasury obligations.

"Then Remaining Payments" means payments in such amounts and at such times as
would have been payable subsequent to the date of such prepayment in accordance
with the terms of the Condition hereof entitled REQUIRED PAYMENTS.


                                       5
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"Most Recently Auctioned United States Treasury Obligations" means the U.S.
Treasury bonds, notes and bills with maturities of 30 years, 10 years, 5 years,
2 years and 1 year which, as of the date the prepayment fee is calculated, were
most recently auctioned by the United States Treasury.

The prepayment fee shall also be payable in the event of prepayment after
default and acceleration of the Loan; however, if such prepayment occurs prior
to October 1, 2005, the prepayment fee shall be the greater of Yield Maintenance
or 6% of the outstanding principal balance of the Loan or the Payoff Amount, as
applicable.

In the event of a partial prepayment of the Loan for any reason contemplated in
this Application, the prepayment fee, if required, shall be an amount equal to
the prepayment fee if the Loan were prepaid in full, multiplied by a fraction,
the numerator of which shall be the principal amount prepaid and the denominator
of which shall be the outstanding principal balance of the Loan immediately
preceding the partial prepayment date.

Notwithstanding the above and provided the Loan is not in default, the Loan may
be prepaid in full without a prepayment fee at any time during the last 60 days
of the term of the Loan.

3.      COMMITMENT EXPIRATION DATE / STANDBY FEE (120): Time is of the essence
of the Commitment (as defined in the Condition hereof entitled CONTRACT). If the
requirements set forth in the Commitment are not satisfied and the Loan is not
fully advanced by February 28, 2005 (the "Standby Fee Date"), the Monthly
Standby Fee shall be paid to Lender on the Standby Fee Date and on the same day
of each month thereafter during the Standby Fee Period. "Standby Fee Period"
means a period commencing on the Standby Fee Date and ending on the earlier of
(i) the date on which the Loan is fully advanced or (ii) the Commitment
Expiration Date. At the end of the Standby Fee Period, Borrower shall be
entitled to a refund for any portion of a month for which the Monthly Standby
Fee shall have been paid but which shall occur outside of the Standby Fee
Period. If the requirements set forth in the Commitment are not satisfied and
the Loan is not fully advanced by May 30, 2005 (the "Commitment Expiration
Date"), the Commitment shall terminate and Lender shall have no further
obligation.

4.      EARNEST MONEY DEPOSIT (130): The Earnest Money Deposit has been
submitted with the application. The Earnest Money Deposit shall be held by
Lender and refunded only at the time of the initial advance of the Loan proceeds
on or before the Commitment Expiration Date. Except as described below, if the
initial advance of Loan proceeds does not occur on or before the Commitment
Expiration Date, the Earnest Money Deposit will be retained by Lender.

If Borrower shall timely perform its obligations under the Commitment and shall
timely satisfy all conditions of the Commitment, but Lender shall fail to make
the initial advance of Loan proceeds in accordance with the terms of the
Commitment, Lender shall refund to Borrower, within 15 business days after
Lender's receipt of Borrower's written request


                                       6
<Page>

therefor (but in no event sooner than 15 business days after the Commitment
Expiration Date), the entire amount of the Earnest Money Deposit and any Standby
Fees previously paid by Borrower.

The Earnest Money Deposit may be in the form of an irrevocable letter of credit
(in the form attached) from a commercial bank with a C rating or better
according to Fitch Ratings or, if no longer available, a similar publication
satisfactory to Lender. Such letter of credit will be converted to cash to be
retained by Lender if the Earnest Money Deposit is not to be refunded.

Borrower agrees that Lender shall have until October 9, 2004 (the "Acceptance
Deadline") to accept this application; provided, however, that: (i) Lender shall
have the option of extending the Acceptance Deadline by written notice to
Borrower if Borrower fails to submit to Lender in a timely fashion all
information reasonably requested by Lender in order to complete its underwriting
process, and (ii) the Acceptance Deadline may also be extended as provided
below. Notwithstanding the foregoing, if Borrower fails to submit all
information reasonably requested by Lender by the later of 3 weeks prior to the
Acceptance Deadline or the expiration of a five (5) business day period
immediately following Lender's written request therefor, the entire Earnest
Money Deposit shall be deemed earned and shall be retained by Lender. If
Borrower withdraws or modifies this application in a material manner prior to
the Acceptance Deadline, the entire Earnest Money Deposit shall be deemed earned
in full and shall be retained by Lender. Lender may accept this application
after the Acceptance Deadline if such acceptance is prior to the withdrawal
thereof by Borrower.

Notwithstanding anything herein to the contrary, if Lender accepts this
application subject to modifications, Borrower shall be obligated to negotiate
in good faith in regard to such modifications. If agreement can not be reached
regarding the modifications prior to the Acceptance Deadline, the Acceptance
Deadline shall be extended for a period of five business days and Lender shall
have the right to accept the original application on or before such extended
Acceptance Deadline without such modifications. If Lender shall not accept the
original application or if Borrower and Lender are unable to negotiate a
modified application and Lender chooses not to accept the original application,
the Earnest Money Deposit, without interest, shall be returned to Borrower.

5.      REFUND OF EARNEST MONEY DEPOSIT (135); ELIMINATION OF A PROJECT FROM THE
DEFINITION OF PROPERTY IN THE EVENT OF CASUALTY:

a.      REFUND OF EARNEST MONEY DEPOSIT

(I)     Notwithstanding anything herein to the contrary, Lender may elect to
terminate the Commitment and Borrower shall be entitled to a refund of the
Earnest Money Deposit less a $50,000 fee for Lender's efforts in processing the
Loan if:

        (A)     The condition of the Property is not satisfactory to Lender
                based upon the Environmental Report (as defined in the Condition
                hereof entitled


                                       7
<Page>

                ENVIRONMENTAL ENGINEER'S REPORT) such that Lender's disapproval
                is final or Lender approves the Environmental Report subject to
                exceptions which can be cured, the cost to cure such exceptions
                is greater than $250,000 per Project or as determined by Lender
                and the Environmental Engineer (as hereinafter defined) and
                Borrower chooses not to cure; or

        (B)     The condition of the Property is not satisfactory to Lender
                based upon the Consultant's Report (as defined in the Condition
                hereof entitled CONSULTANT SERVICES) such that Lender's
                disapproval is final or Lender approves the Consultant's Report
                subject to exceptions which can be cured, the cost to cure such
                exceptions is greater than $250,000 per Project as determined by
                Lender and Lender's Consultants and Borrower chooses not to
                cure, but in either case has provided Lender with evidence that
                Lender's Consultants (as hereinafter defined) have been paid; or

        (C)     Either the title to, or survey of, the Property are not
                reasonably satisfactory to Lender based upon the report required
                in the Condition hereof entitled TITLE INSURANCE ("Title
                Report") and the survey required in the Condition hereof
                entitled SURVEY such that Lender's disapproval is final (for
                reasons other than mortgage liens, judgment liens, mechanics
                liens or non-payment of real estate taxes, special assessments
                or other charges) or Lender approves the Title Report and survey
                subject to exceptions which can be cured, the cost to cure such
                exceptions (other than mortgage liens, judgment liens, mechanics
                liens or non-payment of real estate taxes, special assessments
                or other charges) is greater than $250,000 per Project and
                Borrower chooses not to cure; or

        (D)     The Environmental Report (as defined in the Condition hereof
                entitled ENVIRONMENTAL ENGINEER'S REPORT) is not satisfactory to
                Lender such that Lender requires additional environmental
                investigation and/or testing that will result in Borrower paying
                $15,000 or more in additional costs per Project pursuant to the
                condition hereof entitled Lender's Out Of Pocket Expenses, and
                Borrower fails to authorize and prepay for such additional
                environmental investigation and/or testing.

        (E)     The costs associated with the above listed subs-sections (A),
                (B), (C) and (D) that are required by Lender will result in
                Borrower paying in excess of $1,000,000 (in the aggregate) in
                additional costs for the Property and Borrower fails to
                authorize the same.

(II)    Notwithstanding anything herein to the contrary, Borrower shall be
entitled to a refund of the Earnest Money Deposit less a $150,000 fee for
Lender's efforts in processing the Loan if the proper regulatory approval to
form and operate the Borrower entity is not obtained from the Securities and
Exchange Commission on or before the Commitment Expiration Date, in a form
satisfactory to Lender.


                                       8
<Page>

(III)   Notwithstanding anything herein to the contrary, Borrower shall be
entitled to a refund of the Earnest Money Deposit less a $350,000 fee for
Lender's efforts in processing the Loan if the required approval to form and
operate the Borrower entity is not obtained from the partners of Borrower
representing at least a 50% ownership interest in each of the Projects on or
before the Commitment Expiration Date, in a form satisfactory to Lender;
provided, however, that if NTS Realty Capital, Inc., a Delaware corporation,
and/or NTS Realty Partners, LLC, a Delaware limited liability company, fail to
do the following:

         (A) vote their ownership interests in any Project in the affirmative
         for the approval of the formation and operation of the Borrower; and/or
         (B) recommend an affirmative vote to all of the limited partners for
         the approval of the formation and operation of the Borrower,

this paragraph (III) shall be null and void and of no further effect.

b.      ELIMINATION OF A PROJECT IN THE EVENT OF A CASUALTY: Notwithstanding
anything herein to the contrary, either Borrower or Lender may elect to
eliminate one of the Projects from the following definitions:

        (I)     Land;
        (II)    Improvements; and
        (III)   Property

if and only if there is an occurrence of a casualty not covered by insurance on
such Project prior to the Closing of the Loan with such casualty resulting in
damage to such Project in excess of $3,000,000; provided, however, that if such
Project is to be so eliminated from the security for the Loan, then and in such
event Lender, in its sole discretion, shall decrease the Loan amount and make
other corresponding changes including but not limited to changes in the
Allocated Loan Percentages.

6.      FINANCIAL STATEMENTS (140): Borrower shall furnish to Lender:

        (A)     The following financial statements for each of the Projects (or
                the Property) within 120 days after the close of each fiscal
                year of Borrower (the "Property Financial Statements Due Date"):

                (i)     An unaudited balance sheet as of the last day of such
                        fiscal year;

                (ii)    An unaudited statement of operations for such fiscal
                        year with a detailed line item break-down of all sources
                        of income and expenses for each of the Projects (or the
                        Property), including capital expenses broken down
                        between leasing commissions, tenant improvements,
                        capital maintenance, common area renovation, and
                        expansion;


                                       9
<Page>

                (iii)   A current rent roll identifying location, leased area,
                        lease begin and end dates, current contract rent, rent
                        increases and increase dates, percentage rent, expense
                        reimbursements, and any other recovery items;

                (iv)    An operating budget for the current fiscal year; and

        (B)     The following financial statements for the Borrower within 120
                days after the close of each fiscal year (the "Borrower
                Financial Statements Due Date"):

                (i)     An audited balance sheet as of the last day of such
                        fiscal year; and

                (ii)    An audited statement of cash flows for such fiscal year;
                        and

The Property Financial Statements Due Date, and the Borrower Financial
Statements Due Date, are each sometimes hereinafter referred to as a "Financial
Statements Due Date."

If audited, the financial statements identified in items (A)(i), (A)(ii),
(B)(i), and (B)(ii), above, shall each be prepared in accordance with generally
accepted accounting principles by a certified public accountant satisfactory to
Lender. All unaudited financial statements shall contain a certification by the
managing general partner of Borrower stating that they have been prepared in
accordance with generally accepted accounting principles and that they are true
and correct. The expense of preparing all of the financial statements required
in (A) and (B), above, shall be borne by Borrower. Lender shall have the right
to conduct an independent audit at its own expense at any time. Lender requires
the financial statements required herein to accurately record the value of the
Property for financial and regulatory reporting. Except as otherwise
specifically prescribed herein, all accounting terms not specifically or
completely defined herein shall be construed in conformity with, and all
financial data (including financial ratios and other financial calculations)
required to be submitted pursuant to this Agreement shall be prepared in
conformity with generally accepted accounting principles, applied on a
consistent basis, as in effect from time to time, applied in a manner consistent
with that used in preparing the audited financial statements.

If at any time any changes in generally accepted accounting principles would
affect the computation of any financial ratio or requirement set forth in any
Loan Document, and either the Borrower or the Lender shall so request, the
Lender shall negotiate in good faith to amend such ratio or requirement to
preserve the original intent thereof in light of such change in generally
accepted accounting principles; provided that, until so amended, (i) such ratio
or requirement shall continue to be computed in accordance with generally
accepted accounting principles prior to such change therein and (ii) the
Borrower shall provide to the Lender financial statements and other documents
required under this Agreement or as reasonably requested hereunder setting forth
a


                                       10
<Page>

reconciliation between calculations of such ratio or requirement made before and
after giving effect to such change in generally accepted accounting principles.

At least 30 days prior to the Loan Closing Date, Borrower shall provide Lender a
representative sample of the financial statements required herein for Lender's
approval. The annual financial statements required herein shall be in the same
format as the approved representative sample.

In addition to all other remedies available to Lender hereunder, at law, and in
equity, if any financial statement or proof of payment of property taxes and
assessments is not furnished to Lender as required in this Condition and the
Condition hereof entitled TAXES AND SPECIAL ASSESSMENTS within 30 days after
Lender shall have given written notice to Borrower that it has not been received
as required:

        (X)     Interest on the unpaid principal balance of the Loan shall, as
                of the applicable Financial Statements Due Date or the date such
                proof of payment of property taxes and assessments was due,
                accrue and be payable at the rate equal to the sum of the
                Interest Rate plus 1% per annum (the "Increased Rate");
                provided, however, that such Increased Rate shall not be
                enforced by Lender and shall be waived by Lender to the extent
                and in the event that the Borrower shall provide Lender with the
                following: (i) a written notice of Borrower's on-going protest
                to the appropriate taxing authority of Borrower's payment of
                real estate taxes for a particular Project (the "Real Estate Tax
                Protest"); (ii) a copy of said Real Estate Tax Protest; and
                (iii) evidence of an escrow of funds and/or bond in the amount
                of the real estate taxes subject to the Real Estate Tax Protest,
                in a form and an amount reasonably satisfactory to Lender; and

        (Y)     Lender may elect to obtain an independent appraisal and audit of
                the Property at Borrower's expense and Borrower will, upon
                request, promptly make Borrower's books and records regarding
                the Property available to Lender and the person(s) performing
                the appraisal and audit (which obligation Borrower agrees can be
                specifically enforced by Lender).

The amount of the payments due during the time in which the Increased Rate is in
effect shall be increased with no change in the Amortization. Commencing on the
date on which such financial statements and proof of payment of property taxes
and assessments are received by Lender, interest on the unpaid principal balance
shall again accrue at the Interest Rate and the payments shall be reduced
accordingly.

7.      CROSS DEFAULT AND CROSS LIEN / ASSIGNMENT OF EXISTING LOAN DOCUMENTS/
MODIFICATION OF EXISTING LOAN DOCUMENTS:

CROSS DEFAULT AND CROSS LIEN. Except as specifically stated otherwise, the loan
documentation shall include a lien instrument for each Project. A default under
any note and/or any lien instrument securing the Loan shall constitute a default
under all notes


                                       11
<Page>

and all lien instruments. Except as specifically stated otherwise, each lien
instrument may secure the entire Loan amount.

ASSIGNMENT OF EXISTING LOAN DOCUMENTS FOR SABAL PARK PROJECT. Lender agrees that
it will purchase, amend and restate Borrower's existing loan documents with
another institutional lender for the Sabal Park Project, subject to Lender's
approval of the following: (i) the form and substance of the assignment
documentation from the existing lender; (ii) that the existing loan documents do
not contain any provision which might make the existing loan documents not
enforceable in accordance with their terms; and (iii) that Lender's purchase,
amendment and restatement of the existing loan documents would not impose any
cost or expense on the Lender nor constitute a violation by Lender or Borrower
of any law or regulatory authority to which Lender, Borrower or the Loan is
subject.

Further, the existing loan documentation for the Sabal Park Project must be
satisfactory to Lender as to the following: (i) the ability to amend and restate
the loan documents to Lender's form; and (ii) the release and indemnification
from Borrower. In the event that Lender does, in fact, agree to accept an
assignment of an existing lender's interest in Borrower's existing mortgage loan
documents, then and in such event, Borrower agrees to pay Lender a fixed service
fee of $3,500.00 per Project for administrative and legal costs and, further,
Borrower agrees to pay any and all costs imposed by the existing lender.

With regard to the release and indemnification from Borrower, the following
language will be added to the amendment and restatement of the Sabal Park
Project lien instrument:

                "MORTGAGE WAIVER LANGUAGE: Borrower acknowledges and agrees that
        Lender is relying on the agreements of Borrower contained herein in
        connection with the purchase by assignment of the Note and the Lender
        (the "Original Loan Documents"), which purchase is being done by Lender
        as an accommodation to, and at the request of Borrower.

                Borrower hereby fully and forever releases, discharges, and
        waives all liabilities, claims, demands, causes of action, or defenses
        of any kind or character whatsoever, whether known or unknown, and
        whether arising by statute, in contract, in tort, or otherwise at law or
        equity, that Borrower may have against Lender, or any prior lender, with
        respect to any statements, representations, discussions, negotiations,
        actions, or failures to act of the Lender, or any prior lender,
        occurring on or before the date hereof relating to: (i) any of the
        Original Loan Documents or any other document or instrument executed in
        connection therewith or in connection with the loan transaction to which
        they relate, (ii) the performance by Lender, or any prior lender, of any
        of the obligations thereunder or related thereto, or (iii) any other
        transaction contemplated by, relating to, or in connection with any of
        the Original Loan


                                       12
<Page>

        Documents or any other document or instrument executed in connection
        therewith or in connection with the loan transaction to which they
        relate.

                Borrower hereby represents and warrants to Lender that (a) there
        are no defenses, counterclaims or offsets with respect to any of the
        Original Loan Documents which would, in any manner, reduce or diminish
        Borrower's obligation to Lender to repay the principal sum evidenced by
        the Note, accrued but unpaid interest thereon, and all other obligations
        of Borrower to Lender under the Note, this instrument or any of the Loan
        Documents, (b) at no time did the Original Loan Documents require, nor
        were any payments made which would constitute, the payment of interest
        or other charges which in the aggregate would have resulted in usury,
        and (c) all deposits and escrow amounts, if any, paid under the Original
        Loan Documents have been returned to Borrower. It is the intent of
        Borrower and Lender that the agreements and obligations of Borrower and
        Lender shall be governed by the restatement of the Note and the Mortgage
        and any other document entered into between Borrower and Lender or by
        Borrower for the benefit of Lender.

                Borrower shall indemnify, defend and hold Lender (and its
        successors and assigns) harmless from and against any and all losses,
        liabilities, damages, expenses, penalties, actions, judgments, suits,
        costs or disbursements of any kind or nature whatsoever (including,
        without limitation, reasonable attorney's fees and disbursements of
        Lender's counsel) in connection with any claims by the Florida
        Department of Revenue or other third party that additional documentary
        stamp tax or intangibles tax are due in connection with the merger, the
        assumption of the Note and/or the execution and delivery of this
        Agreement or any other documents executed by Borrower and Lender in
        connection with the assumption of the Note."

MODIFICATION OF EXISTING LOAN DOCUMENTS FOR GOLF BROOK PROJECT. Lender agrees
that it will agree to leave in place the existing mortgage loan documents from
Lender on the Golf Brook Project and amend and restate the same in order to
accomplish the following: (i) the amendment and restatement of the loan
documents to Lender's current form; and (ii) the increase and/or modification of
the existing mortgage loan documents, as may be appropriate.

8.      LIMITATION OF LIABILITY/GUARANTEE OF RECOURSE OBLIGATIONS (210): Except
as provided below, Borrower shall not have or incur any personal liability for
the repayment of the Loan and Lender shall look solely to the Property for
repayment of the Loan. However, Borrower shall be personally liable, and Lender
may seek judgment against Borrower, for:

        (A)     Rents and other income from the Property received by Borrower or
                those acting on behalf of Borrower after any default remaining
                uncured prior to the Conveyance Date, which rents and other
                income have not been


                                       13
<Page>

                applied to the payment of principal and interest on the Loan or
                to reasonable operating expenses of the Property;

        (B)     Amounts necessary to repair damage to Property caused by
                intentional acts or omissions of Borrower or those acting on
                behalf of Borrower, but only to the extent not previously
                recovered by Lender under applicable insurance;

        (C)     Insurance loss proceeds and Condemnation Proceeds released to
                Borrower but not applied in accordance with any agreement
                between Borrower and Lender as to their application;

        (D)     The amount of insurance loss proceeds which would have been
                available with respect to a casualty on the Property, but were
                not available due to the default by Borrower in carrying all
                insurance required by Lender;

        (E)     Damages suffered by Lender as a result of fraud or
                misrepresentation in connection with the Loan by Borrower or any
                other person or entity acting on behalf of Borrower;

        (F)     Amounts in excess of any rents or other revenues collected by
                Lender from operation of Property from and after acceleration of
                the Loan until the Conveyance Date, which amounts are necessary
                to pay real estate taxes, special assessments and insurance
                premiums (to the extent not previously deposited with Lender
                pursuant to the Condition hereof entitled DEPOSITS), and amounts
                required to fulfill Borrower's obligations as lessor under any
                leases of the Property, in each case, either paid by Lender and
                not reimbursed prior to, or remaining due or delinquent on, the
                Conveyance Date.

        (G)     All security deposits under leases of the Property or any
                portion of the Property collected by Borrower, any agent of
                Borrower or any predecessor of Borrower, and not refunded to the
                tenants thereunder in accordance with their respective leases,
                applied in accordance with such leases or law or delivered to
                Lender, and all advance rents collected by Borrower, any agent
                of Borrower or any predecessor of Borrower and not applied in
                accordance with the leases of the Property or delivered to
                Lender.

                and

        (H)     All outstanding amounts due under the Loan, including principal,
                interest, and other charges if there shall be a violation of the
                Condition hereof entitled PROHIBITION ON TRANSFER/ONE-TIME
                TRANSFER.

"Conveyance Date" means (i) the later of (a) the date on which title vests in
the purchaser at the foreclosure sale of the Property pursuant to the lien
instrument


                                       14
<Page>

securing the Loan or (b) the date on which Borrower's statutory right of
redemption shall expire or be waived or (ii) the date of the conveyance of the
Property to Lender in lieu of foreclosure.

As a condition to making the Loan, the Borrower (not the partners of Borrower)
shall guarantee (A) through (H) above by executing Lender's form of Guarantee of
Recourse Obligations.

9.      ENVIRONMENTAL INDEMNITY AGREEMENT (230): On or prior to the Loan Closing
Date, Borrower shall execute Lender's form of Environmental Indemnity Agreement.
In the case of a later transfer of the Property from Borrower to an approved
transferee where the transferee and Creditworthy Party (as defined below) are
both acceptable to Lender and such transfer is in compliance with the Loan
Documents and where the transferee and the Creditworthy Party undertake the
environmental liability obligation under the indebtedness due under the Loan,
then and in such event the Borrower hereunder shall remain liable under the
Environmental Indemnity Agreement except for acts or occurrences after the date
of such transfer of the Property.

10.     PROHIBITION ON TRANSFER/ONE-TIME TRANSFER (260): The present ownership
and management of the Property is a material consideration to Lender in making
the Loan, and Borrower shall not (i) convey title to all or any part of the
Property, (ii) enter into any contract to convey (land contract/installment
sales contract/contract for deed) title to all or any part of the Property which
gives a purchaser possession of, or income from, the Property prior to a
transfer of title to all or any part of the Property ("Contract to Convey") or
(iii) cause or permit a Change in the Proportionate Ownership (as defined below)
of Borrower. Any such conveyance, entering into a Contract to Convey, or Change
in the Proportionate Ownership of Borrower shall constitute a default under the
terms of the Loan.

For purposes of this Condition, a "Change in the Proportionate Ownership" means,
in the case of a corporation, a change in, or the existence of a lien on, the
ownership of the stock of such corporation; in the case of a trust, a change in,
or the existence of a lien on, the beneficial ownership of such trust; in the
case of a limited liability company, a change in the ownership of, or the
existence of a lien on, the limited liability company interests of such limited
liability company; in the case of a partnership, a change in the ownership of,
or the existence of a lien on, the partnership interests of such partnership.

The continuing ownership and influence of J. D. Nichols and Brian F. Lavin is an
important factor to Lender. Accordingly, notwithstanding the foregoing, Lender
shall not consider a change in the limited partners of the Borrower to be a
Change in the Proportionate Ownership of Borrower. Further, notwithstanding the
foregoing, Lender shall not withhold its consent to a Change in the
Proportionate Ownership of Borrower provided that the change consists solely of
a transfer of ownership interest in the Borrower to or among the following:

        (i) the Nichols Family (as defined below);


                                       15
<Page>

        (ii) the Lavin Family (as defined below); and/or
        (iii) the then current employees (at the time of any such transfer of
        ownership interest in the Borrower) of:
                (a) Borrower; and/or
                (b) NTS Development Company, a Kentucky corporation for so long
                as NTS Development Company continues to act as the management
                company for the Property;

provided, however, that the following is true immediately after such transfer
and continues to be true at all times thereafter:

        (I) J. D. Nichols, Brian F. Lavin, the Nichols Family and/or the Lavin
        Family continue to own, directly or indirectly, greater than a 51%
        minimum lien-free interest in NTS Realty Capital, Inc., a Delaware
        corporation and NTS Realty Capital, Inc., a Delaware corporation is the
        managing general partner of Borrower;

        (II J. D. Nichols, Brian F. Lavin, the Nichols Family and/or the Lavin
        Family continue to own, directly or indirectly, greater than a 51%
        minimum lien-free interest in NTS Realty Partners, LLC, a Delaware
        limited liability company; and

        (III) there are no other general partners of Borrower, other than NTS
        Realty Capital, Inc. and NTS Realty Partners, LLC.

        For purposes hereof, the "Nichols Family" shall mean J. D. Nichols,
        his/her spouse, his/her descendants and their spouses, any trusts or
        estates for the benefit of said parties, and any entities owned and
        controlled (ownership and voting interests in excess of 51%) by said
        parties.

        For purposes hereof, the "Lavin Family" shall mean Brian F. Lavin,
        his/her spouse, his/her descendants and their spouses, any trusts or
        estates for the benefit of said parties, and any entities owned and
        controlled (ownership and voting interests in excess of 51%) by said
        parties.

Notwithstanding the foregoing, provided the Loan is not in default, upon the
prior written request from Borrower, Lender shall not withhold its consent to a
one-time transfer of all but not less than all of the Property, provided:

        (A)     The Property shall have achieved Debt Service Coverage of at
                least 1.5X for the last full fiscal year and there are no junior
                liens on the Property;

        (B)     The transferee or an owner of the transferee (the "Creditworthy
                Party") has a net worth determined in accordance with generally
                accepted accounting principles of at least $100 million with
                cash and cash equivalents of at least $5 million after funding
                the equity needed to close


                                       16
<Page>

                the purchase and a minimum overall real estate portfolio debt
                service coverage ratio of 1.30X for the prior 12 month period.

        (C)     The transferee or the Creditworthy Party is experienced in the
                ownership and management of at least 2,000 garden apartment
                units;

        (D)     Neither the transferee nor the Creditworthy Party is subject to
                any bankruptcy, reorganization or insolvency proceedings or any
                criminal charges or proceedings and is not a current or past
                litigant, plaintiff or defendant in any suit brought against or
                by Lender;

        (E)     Pursuant to written documents prepared by and satisfactory to
                Lender, the transferee assumes and the Creditworthy Party
                guarantees all the obligations and liabilities of Borrower under
                the Loan Documents, whether arising prior to or after the date
                of the transfer of the Property, and Lender receives a
                satisfactory enforceability opinion with respect thereto from
                counsel approved by Lender; provided, however, that if an
                environmental report in a form satisfactory to Lender has been
                obtained prior to the transfer, then and in such event the
                transferee and Creditworthy Party shall not be obligated to
                guarantee the obligations and liabilities under the
                Environmental Indemnity Agreement arising prior to the date of
                the transfer.

        (F)     The Creditworthy Party executes Lender's then current form of
                Guarantee of Recourse Obligations, the Creditworthy Party and
                the transferee execute lender's then current form of
                Environmental Indemnity Agreement, and Lender receives a
                satisfactory enforceability opinion with respect to the
                foregoing from counsel approved by Lender;

        (G)     An environmental report, which meets Lender's then current
                requirements and is updated to no earlier than 90 days prior to
                the date of transfer, is provided to Lender at least 30 days
                prior to the date of transfer and is satisfactory to Lender at
                the time of transfer;

        (H)     Borrower (i) shall remain liable under the Environmental
                Indemnity Agreement except for acts or occurrences after the
                date of transfer of the Property; and (ii) shall, except as
                provided in (i), be released from all obligations and
                liabilities under the Loan Documents;

        (I)     Lender receives an endorsement to its policy of title insurance,
                satisfactory to Lender, insuring Lender's lien on the Property
                as a first and valid lien on the Property subject only to liens
                and encumbrances theretofore approved by Lender;

        (J)     Pursuant to a written document prepared by and satisfactory to
                Lender, the transferee (i) acknowledges that, in furtherance and
                not in limitation of


                                       17
<Page>

                clause (E) above, it shall be bound by the representation and
                warranty contained in the Condition hereof entitled BUSINESS
                RESTRICTION REPRESENTATION AND WARRANTY and (ii) certifies that
                such representation and warranty is true and correct as of the
                date of transfer and shall remain true and correct at all times
                during the term of the Loan; and

        (K)     The outstanding balance of the Loan at the time of the transfer
                is not more than 65% of the gross purchase price of the
                Property.

If the transferee shall satisfy the financial requirements set forth in
subparagraph (B) above, all references to the Creditworthy Party in clauses (C)
through (F) above shall be deemed deleted.

If Borrower shall make a one-time transfer pursuant to this Condition,

        (X)     Lender shall be paid a fee equal to one-half of one percent
                (.5%) of the then outstanding balance of the Loan;

        (Y)     No modification of the interest rate or repayment terms of the
                Loan will be required; and

        (Z)     No subsequent transfers of the Property shall be allowed, and no
                change(s) in the proportionate ownership of transferee shall be
                allowed without Lender's prior written consent, which consent
                shall be given at Lender's sole discretion.

                Notwithstanding any other language contained herein, Borrower
                and Lender agree that the underlying ownership structure of a
                particular transferee may cause Lender to determine that the
                definition of Change in the Proportionate Ownership of such
                transferee does not adequately address Lender's underlying
                ownership concerns for such transferee, and accordingly, Lender
                reserves the right to amend the definition of Change in the
                Proportionate Ownership as it applies to a particular
                transferee.

11.     PROHIBITION AGAINST OTHER LIENS AND RENT ASSIGNMENTS (270): If Borrower
        creates or permits the existence of any lien on any portion of the
        Property or on any personal property described in the lien instrument
        (other than the lien securing the Loan), or if Borrower assigns any of
        its interest in its revocable license to collect, use and enjoy rents
        and profits from the Property, or if the owners of Borrower (who are not
        limited partners) grant or permit to exist a security interest in or
        other encumbrance on the ownership interests in Borrower, then the Loan
        shall be in default and may be declared due and payable; except that,
        upon written notice to Lender, Borrower may proceed to contest in good
        faith and by appropriate proceedings any mechanics liens, tax liens or
        judgment liens after the Loan Closing Date with respect to the Property
        or any personal property described in the lien instrument, provided,
        however, that Borrower has


                                       18
<Page>

        done one of the following: (i) deposited funds sufficient to satisfy the
        contested amount in an escrow satisfactory to Lender; (ii) deposited a
        bond sufficient to satisfy the contested amount, in a form satisfactory
        to Lender; or (iii) made other arrangement satisfactory to Lender.

12.     PARTIAL RELEASE: Upon Borrower's written request, up to three (3)
        releases (the "Release" or "Releases") for the release of up to three
        (3) Projects (in the aggregate) shall be allowed under the Lien
        Instrument(s) at any time during the Loan, provided no Event of Default
        has occurred and is continuing. These Releases shall be subject to the
        following terms and conditions:

                A.      Payment of a release fee equal to $25,000 per Project
                        released (or to be released);

                B.      Each Release shall consist of not less than one entire
                        Project and, in all instances, shall consist of entire
                        Projects (not portions thereof); and

                C.      Payment to Lender toward the unpaid principal balance of
                        the Loan, an amount equal to:

                                the then unpaid principal balance of the portion
                                of the Loan allocated to the Project(s) being
                                released multiplied by One Hundred Ten Percent
                                (110%).

                        Said payment shall be applied to one or more of the
                        Promissory Notes evidencing the Loan, as Lender may
                        determine.

                D.      For any Release, payment to Lender of a prepayment fee
                        on such principal prepaid calculated in the manner set
                        forth in the Condition hereof entitled PREPAYMENT IN
                        FULL. Said payment shall be applied to one or more of
                        the Promissory Notes evidencing the Loan, as Lender may
                        determine.

                E.      Debt Service Coverage immediately following the partial
                        release and payment required under this Condition shall
                        equal or exceed 1.30X Debt Service Coverage using then
                        current underwriting. The Debt Service Coverage will be
                        calculated on an amortizing basis whether or not
                        amortization is actually required on the Loan at the
                        time of the release.

                F.      No more than one Release per twelve month period will be
                        allowed; provided, however, that such Release may, in
                        fact, cover more than one Project.


                                       19
<Page>

                G.      Borrower furnishing Lender, at Borrower's sole cost,
                        with a partial release title endorsement and/or title
                        update in a form satisfactory to Lender.

13.     INTENTIONALLY DELETED.

14.     ORGANIZATIONAL DOCUMENTS (300): Within 30 days after the date hereof,
Borrower shall submit to Lender for approval certified copies of all
organizational documents for the Borrower and the general partners of Borrower
requested by Lender. After the Loan Closing Date, Borrower shall provide to
Lender a certified copy of any amendment to any such organizational document
within 30 days of the execution of said amendment.

15.     PROPERTY MANAGEMENT (305): The management company shall be satisfactory
to Lender during the term of the Loan. Any change in the management company
without the prior written consent of Lender shall constitute a default under the
terms of the Loan. Lender acknowledges that NTS Development Company, a Kentucky
corporation is the current management company for the Property and, further,
that said current management company is approved by Lender.

16.     SECURITY INTEREST IN PERSONAL PROPERTY (310): A satisfactory first
security interest effective against third parties is required covering the
interests of Borrower in all tangible and intangible personal property,
including, without limiting the generality of the foregoing, all carpeting,
blinds, ranges, microwave ovens, refrigerators, dishwashers, easily removable
equipment and fixtures, furniture, etc. now owned or leased or hereafter
acquired or leased and used on or about or related to the Property.

17.     TENANT LEASES (320): As soon as available after constitution of the
Commitment, but in no event later than 30 days prior to the Loan Closing Date,
Lender shall be furnished for its review and approval a rent roll, in a form
acceptable to Lender, and copies of each Project's standard form lease(s) (the
"Relevant Leases"). The rent roll shall contain a certification by the managing
general partner of Borrower stating that it is true and complete and shall
specifically identify all Relevant Leases. This Condition shall be satisfied
prior to any advance. As a condition to making the Loan, Borrower shall grant to
Lender an absolute assignment of Borrower's right, title and interest in all
leases, including Borrower's right to collect, use and enjoy the rents and
profits therefrom. Lender in return shall grant to Borrower a revocable license
to collect, use and enjoy said rents and profits.

18.     TENANTS USING CHLORINATED SOLVENTS (325): Borrower covenants not to
lease any of the Property, without the prior written consent of the Lender, to
(i) dry cleaning operations that perform dry cleaning on site with chlorinated
solvents or (ii) any other tenants that use chlorinated solvents in the
operation of their businesses.

19.     LOAN CLOSING AND ADVANCE OF LOAN PROCEEDS (400): If the Property is free
of all liens and claims (except those approved in writing by Lender) and all the
conditions of the Commitment required to be fulfilled prior to the advance of
Loan proceeds have


                                       20
<Page>

been complied with, the Loan will be closed and the Loan proceeds will be
advanced in full.

20.     REGIONAL OFFICE INSPECTION (514): Prior to the initial advance of Loan
proceeds, inspection and approval of the Property is required by a member of
Lender's Regional Office staff.

21.     PHOTOGRAPHS (515): At least 30 days prior to the Loan Closing Date,
Borrower shall furnish to Lender 2 copies of 3 different 8 x 10-inch color
commercial photographs of the Property (1 aerial view and 2 exterior views).

22.     CONSULTANT SERVICES (521): Lender shall hire 3rd-party consultants
("Lender's Consultants") to prepare a report ("Consultant's Report") for Lender
on various aspects of the cost, design, construction and operation, of the
Improvements in accordance with a Construction Consulting Agreement to be
entered into between Lender and said consultants. Borrower agrees to provide all
drawings, specifications and change orders for the Improvements to Lender's
Consultants, if available, and to cooperate fully and completely in disclosing
information to the Lender and Lender's Consultants. If requested by Borrower,
Lender shall provide to Borrower an informational copy of the proposal from
Lender's Consultants as authorized by Lender.

Borrower acknowledges that it has or will perform its own due diligence on the
Property and agrees that it will not rely on the Consultant's Report which is a
limited scope report prepared for Lender.

Prior to the initial advance of Loan proceeds, subject to the condition entitled
REFUND OF EARNEST MONEY DEPOSIT, Borrower shall repair or correct, to Lender's
satisfaction, any deficiencies at the Property noted in the Consultant's Report
or detected by Lender, as may be required by Lender.

23.     DRAWINGS AND SPECIFICATIONS/CHANGE ORDERS (522): As soon as available,
but in no event later than 30 days prior to the Loan Closing Date, Borrower
shall submit, to the extent available, the following for review by Lender and
Lender's Consultants:

        (A)     2 complete sets of drawings to include site, landscape,
                structural, architectural, mechanical, electrical and others as
                the Improvements may require.

        (B)     2 complete sets of specifications covering all elements of
                construction. If the Property is to include any new
                construction, all products to be installed on the Property or
                incorporated into the construction of the Improvements shall be
                free of asbestos containing materials and lead based paints.

        (C)     2 copies of a report describing the soil conditions at the
                building site and providing recommendations for foundation and
                pavement design and


                                       21
<Page>

                construction. The report shall: (i) be prepared by a soil or
                geotechnical engineer; and (ii) be satisfactory to Lender;

        (D)     2 copies of soundproofing details and acoustical test ratings
                for party walls, floors between living units and hallways.

24.     ENVIRONMENTAL ENGINEER'S REPORT (531): Lender shall retain an
environmental engineer or other qualified professional (the "Environmental
Engineer") to prepare an environmental report or reports for the Property (the
"Environmental Report"). The Environmental Report shall clearly cover, to
Lender's satisfaction, the matters which are contained in the ENVIRONMENTAL SITE
ASSESSMENT SCOPE OF WORK, attached hereto. Lender shall provide to Borrower an
informational copy of the Environmental Report proposal authorized by Lender
(the "Environmental Proposal"). Borrower authorizes, and has obtained any
necessary authorizations from 3rd parties, for Lender and the Environmental
Engineer to enter onto the Property and conduct any inspections or tests in
connection with any aspect of the Environmental Report as outlined in the
Environmental Proposal.

The Environmental Engineer will agree that Borrower shall be entitled to rely on
the Environmental Report on the condition that Borrower agrees that the
liability of the Environmental Engineer to Borrower shall be limited to the
greater of $50,000 or the cost of the Environmental Report.

It shall be a condition to Lender's obligations hereunder that the environmental
condition of the Property be satisfactory to Lender. If the environmental
condition of the Property is not satisfactory to Lender and Borrower fails to
completely remediate to Lender's satisfaction any unsatisfactory environmental
condition, or if Borrower refuses to permit Lender to complete any environmental
investigation Lender deems necessary to determine the environmental condition of
the Property, then Lender may, in its sole discretion, terminate the Commitment
and retain the Earnest Money pursuant to the condition entitled REFUND OF
EARNEST MONEY DEPOSIT.

25.     LENDER'S OUT-OF-POCKET EXPENSES (532): Borrower has submitted with the
application the sum of Sixty Thousand Dollars ($60,000) which represents full
payment for the costs of the Environmental Engineer and Lender's Consultants
unless unusual and unexpected conditions are encountered. If the amount received
from Borrower for the Environmental Engineer and Lender's Consultants exceeds
the invoices paid to them, the difference will be refunded to Borrower as soon
after closing or termination of the transaction as is reasonably possible. If
unusual and unexpected conditions are encountered, additional work will not be
done without the authorization of Borrower and agreement by Borrower to pay any
additional costs. If Borrower authorizes the additional work, Borrower
acknowledges that the additional work is a necessary condition to the making of
the Loan and is, therefore, for the benefit of Borrower. Accordingly, Borrower
hereby agrees to indemnify, defend and hold Lender harmless against any loss,
cost or liability resulting from the presence on the Property of the


                                       22
<Page>

Environmental Engineer, Lender's Consultants or other parties whose services are
retained in connection with the additional work.

26.     INSURANCE (600): At least 30 days prior to the Loan Closing Date,
Borrower shall provide Lender with evidence of, and shall maintain, the
following types of insurance in amounts and form and with companies, all
satisfactory to Lender:

        (A)     All risk property insurance with a deductible of not greater
                than $100,000, including Demolition and Increased Cost of
                Construction (DICC) coverage equal to a minimum of 5% of the
                estimated replacement cost, with an Agreed Amount Endorsement
                for the estimated replacement cost of the Improvements. If such
                all risk property insurance policy contains a terrorism
                exclusion, then Borrower shall purchase a separate insurance
                policy acceptable to Lender for such terrorism coverage, which
                separate insurance policy shall include the insurance coverage
                specified in subparagraph (C), below. Notwithstanding the
                foregoing, (i) Borrower shall only be required to carry
                terrorism coverage in an amount equal to the lesser of (a) the
                outstanding principal balance of the Loan, or (b) the amount of
                terrorism coverage that Borrower can purchase for an amount
                equal to 1/2 of the premium that Borrower is currently paying
                for the all risk property insurance required herein with a
                terrorism exclusion; and (ii) Borrower shall only be required to
                maintain such terrorism coverage on renewals of such coverage
                occurring after the Loan Closing Date if such coverage is
                available either through Borrower's all risk property insurance
                policy or a separate policy (provided, however, for purposes of
                both clause (i) and clause (ii), above, the deductible
                applicable to such terrorism coverage shall, subject to Lender's
                prior written approval, be increased as necessary to permit
                Borrower to carry terrorism coverage in the amount specified in
                item (i) (a), above). All insurance coverages specified in this
                subparagraph shall be provided on a replacement cost, agreed
                amount basis with no coinsurance provision;

        (B)     Loss of rents insurance equal to 12 months rent or business
                income insurance for 100% of the annual gross earnings from
                business derived from the Property;

        (C)     Flood insurance, if the Property is located in a flood plain (as
                that term is used in the National Flood Insurance Program), in
                an amount not less than 25% of the estimated replacement cost;

        (D)     Borrower's own commercial general liability insurance policy
                with Lender, and Lender's wholly owned subsidiaries and agents,
                named as additional insureds for their interests in the
                Property; and

        (E)     Other insurance as required by Lender from time to time.


                                       23
<Page>

All property insurance policies required above or placed by Borrower in
connection with the Property shall include a standard mortgagee endorsement in
favor of Lender. Borrower shall provide certificates of Insurance (Acord-27 for
Property, Acord 25-S for Liability) evidencing coverages required above. Such
certificates shall provide at least 30 days notice of cancellation to Lender and
shall list Lender as the certificate holder.

27.     APPLICATION OF INSURANCE LOSS PROCEEDS (601): Insurance loss proceeds
from all property insurance policies, whether or not required by Lender, shall,
at Lender's option, be applied on the Loan, whether or not due, or to the
restoration of the Property. If Lender elects to apply the insurance loss
proceeds to the prepayment of the Loan, no prepayment fee shall be due on such
prepayment.

Notwithstanding the foregoing, Lender agrees that, if the insurance loss
proceeds are less than the unpaid principal balance of the Loan attributable to
the applicable Project(s) (based on the Allocated Loan Percentage(s)) and if the
casualty occurs prior to the last eighteen (18) months years of the Loan term,
the insurance loss proceeds (less expenses of collection) shall be applied to
restoration of the applicable Project(s) to its condition prior to the casualty,
subject to satisfaction of the following conditions:

        (A)     There shall be no existing Event of Default at the time of the
                casualty, and if there shall occur any Event of Default after
                the date of the casualty, Lender shall have no further
                obligation to release insurance loss proceeds hereunder.

        (B)     The casualty insurer shall not have denied liability for payment
                of insurance loss proceeds as a result of any act, neglect, use
                or occupancy of the Property by Borrower.

        (C)     Lender shall be satisfied that all insurance loss proceeds,
                together with supplemental funds to be made available by
                Borrower, shall be sufficient to complete restoration of the
                Project(s). Any remaining insurance loss proceeds may, at the
                option of Lender, be applied on the Loan, whether or not due, or
                be released to Borrower.

        (D)     If required by Lender, Lender shall be furnished a satisfactory
                report addressed to Lender from an environmental engineer or
                other qualified professional satisfactory to Lender to the
                effect that no adverse environmental impact to the Project(s)
                resulted from the casualty.

        (E)     Lender shall release casualty insurance proceeds as restoration
                of the Project(s) progresses if Lender is furnished satisfactory
                evidence of the costs of restoration and if, at the time of such
                release, there shall exist no Monetary Default (as hereinafter
                defined) and no default under the Loan with respect to which
                Lender shall have given Borrower notice pursuant to the
                Condition hereof entitled NOTICE OF DEFAULT. If the estimated
                cost of restoration exceeds $250,000, (i) the drawings and
                specifications for the


                                       24
<Page>

                restoration shall be approved by Lender in writing prior to
                commencement of the restoration and (ii) Lender shall receive an
                administration fee equal to 1% of the cost of restoration.

        (F)     Prior to each release of funds, Borrower shall obtain for the
                benefit of Lender an endorsement to Lender's title insurance
                policy insuring Lender's lien as a first and valid lien on the
                Project(s) subject only to liens and encumbrances theretofore
                approved by Lender.

        (G)     Borrower shall pay all costs and expenses incurred by Lender,
                including, but not limited to, outside legal fees, title
                insurance costs, 3rd-party disbursement fees, 3rd-party
                engineering reports and inspections deemed necessary by Lender.

        (H)     All reciprocal easement and operating agreements, if any,
                benefiting the Projects shall remain in full force and effect
                between the parties thereto on and after restoration of the
                Project(s).

        (I)     Lender shall be satisfied that Projected Debt Service Coverage
                of at least 1.0X will be produced from the leasing (at the
                applicable Project(s)) of not more than 80% of the apartment
                units to former tenants or approved new tenants with leases
                satisfactory to Lender for terms of at least one year to
                commence not later than 30 days following completion of such
                restoration (the "Approved Leases").

"Projected Debt Service Coverage" means a number calculated by dividing
Projected Operating Income Available for Debt Service for the first fiscal year
following restoration of the Property by the debt service during the same fiscal
year under all loans secured by any portion of the Property. For purposes of the
preceding sentence, "debt service" means the greater of (x) debt service due
under all such loans during the first fiscal year following completion of the
restoration of the Property and (y) debt service that would be due and payable
during such fiscal year if all such loans were amortized over 30 years (whether
or not amortization is actually required) and if interest on such loans were due
as it accrues at the face rate shown on the notes therefor (whether or not such
loans require interest payments based on such face rates).

"Projected Operating Income Available for Debt Service" means projected gross
annual rent from the Approved Leases at the applicable Project(s) or at the
entire Property, as the case may be, for the first full fiscal year following
completion of the restoration of the Property less:

        (A)     The operating expenses of the applicable Project(s) or at the
                entire Property, as the case may be, for the last fiscal year
                preceding the casualty and

        (B)     The following:


                                       25
<Page>

                (i)     A replacement reserve for capital improvements, unit
                        remodels and structural items, based on not less than
                        $750 per unit per year per annum;

                (ii)    The amount, if any, by which actual gross income during
                        such fiscal period exceeds that which would be earned
                        from the rental of 90% of the gross leaseable area in
                        the applicable Project(s) or the entire Property, as the
                        case may be;

                (iii)   The amount, if any, by which the actual management fee
                        is less than 3% of gross revenue during such fiscal
                        period;

                (iv)    The amount, if any, by which the actual real estate
                        taxes are less than $855 per annum; and

                (v)     The amount, if any, by which total operating expenses,
                        excluding management fees, real estate taxes and
                        replacement reserves, are less than $3,720 per annum.

All projections referenced above shall be calculated in a manner satisfactory to
Lender.

28.     APPLICATION OF CONDEMNATION PROCEEDS (602): All condemnation awards and
any other proceeds ("Condemnation Proceeds") resulting from damage to, the
taking of, or any sale or transfer in lieu of a taking of, all or any portion of
the Property in connection with condemnation proceedings, the exercise of any
power of eminent domain or the threat thereof (a "Taking"), shall, at Lender's
option, be applied on the Loan, whether or not due, or to the restoration of the
Property. If Lender elects to apply the Condemnation Award to the prepayment of
the Loan, no prepayment shall be due on such prepayment unless the same was
collected as part of the Condemnation Award.

Notwithstanding the foregoing, Lender agrees that, if the Condemnation Proceeds
are less than the unpaid principal balance of the Loan allocated to the
Project(s) (based on the Allocated Loan Percentage) and are received prior to
the last eighteen (18) months of the Loan term, the Condemnation Proceeds (less
expenses of collection) shall be applied to restoration of the Project(s) to its
condition, or the functional equivalent of its condition, prior to the Taking,
subject to satisfaction of the requirements stated in the Condition hereof
entitled APPLICATION OF INSURANCE LOSS PROCEEDS and subject to the further
requirement that restoration or replacement of the Improvements at the
Project(s) to their functional and economic utility prior to such damage or
Taking be possible.

29.     DEPOSITS (603): To assure the timely payment of real estate taxes and
special assessments (including personal property taxes, if appropriate),
following the occurrence of an Event of Default, Lender shall thenceforth have
the option to require


                                       26
<Page>

that Borrower remit monthly payments, in amounts satisfactory to Lender. Such
amounts shall be held by Lender.

30.     PRIOR NOTICE OF ADVANCES (1020): Lender shall not be required to advance
Loan proceeds under the Commitment unless it has received notice in writing from
Borrower at least 5 business days prior to the date of the advance.

31.     FIXTURES (1030): All affixed items owned by Borrower such as engines,
boilers, elevators and machinery and all heating apparatus, electrical
equipment, air-conditioning equipment, water and gas fixtures and all fixtures
of every description placed or used on the Property or appurtenant thereto shall
be included in the lien instrument.

32.     TAXES AND SPECIAL ASSESSMENTS (1040): Prior to any advance of Loan
proceeds, Borrower shall disclose to Lender, and Lender shall review and
approve, all special assessments affecting the Property, whether or not then due
and payable. Unless otherwise provided herein, prior to every advance, all
installments of special assessments, whether or not then due and payable, and
all installments of general real estate taxes due shall be paid in full unless
disputed, in which case an escrow satisfactory to Lender shall be established.
Borrower shall deliver to Lender the official receipt of the proper officer
showing timely payment of all general real estate taxes and special assessments
within 30 days after Lender shall have given written notice to Borrower
requesting such proof of payment.

Borrower certifies that the following special assessments are the only
assessments outstanding and shall be paid in full according to the payment
schedule listed below:

<Table>
<Caption>
    Assessment                Total Amount                  Payment Schedule
    ----------                ------------                  ----------------
<S>                           <C>                           <C>
    NONE

</Table>

33.     TITLE (1045): Title to the Property shall be satisfactory to Lender's
legal counsel. Title and beneficial interest to the Property shall be vested in
Borrower and shall be unchanged by act of Borrower, by death, or by operation of
law until the Loan is fully funded unless otherwise provided by a separate
Condition in the Commitment.

34.     TITLE INSURANCE (1050): A title commitment containing a correct legal
description and legible copies of all instruments listed therein as exceptions
must be furnished to Lender by Borrower, at Borrower's expense, from First
American Title Insurance Company, Chicago Title Insurance Company or
Commonwealth Land Title Insurance Company or other title insurance company
satisfactory to Lender; provided, however, that if a title insurance company
other than First American Title Insurance Company or Chicago Title Insurance
Company is used, Borrower shall cause such title insurer to obtain reinsurance
in an amount satisfactory to Lender. If the title is satisfactory, the closing
documents will be prepared. After the lien instrument shall have been placed of
record, a title policy for each Project shall be issued to Lender, in the
Allocated Loan Amount for each Project, insuring the interest of Lender to be a
first and valid lien on


                                       27
<Page>

each Project. Each policy shall be in the form of ALTA Loan Policy -1970, as
revised 10/17/70 and 10/17/84 for the full Allocated Loan Amount. All policies
shall contain a tie-in endorsement and shall not contain a so called "Creditor's
Rights exception". The title policy for each of the Project(s) located in
Florida, Indiana and Kentucky shall contain an endorsement insuring, to Lender's
satisfaction, that the Project and the use thereof complies with applicable
zoning laws; provided, however, that if such zoning endorsement is not available
on a particular Project, at Lender's option, Lender may instead accept a zoning
opinion from Borrower's counsel. The cost of such title policy(ies) and any
endorsements required by Lender shall be borne by Borrower. If there are
periodic advances of funds, a title endorsement must be furnished prior to each
advance, showing no intervening liens or encumbrances.

35.     SURVEY (1055): At least 30 days prior to the Loan Closing Date, Borrower
shall furnish to Lender 3 copies of a recently certified As-Built Survey for
each of the Project(s), satisfactory to Lender, together with 1 copy to the
title company and 1 copy to Lender's Consultants. The survey(s) must comply with
the most current American Land Title Association (ALTA) and American Congress on
Surveying and Mapping (ACSM) Minimum Standard Detail Requirements for Land Title
Surveys and include the items indicated in the attached Table A Optional Survey
Responsibilities and Specifications for As-Built Survey. Survey requirements are
attached.

36.     ACCURACY OF DATA SUBMITTED AND FINANCIAL CONDITION (1060): The
Commitment is subject to the accuracy as of the date hereof of all information,
data, representations, exhibits, and other materials submitted in connection
with the application. Prior to and as a condition of each advance of Loan
proceeds, there shall be since the date of the application, no material adverse
change in the Property, the projected revenues from the Property, or in the
assets, liabilities or condition, financial or otherwise, of Borrower.

Acceptance of the application by Lender or issuance of a separate letter of
commitment shall not constitute or imply review or approval of any agreement,
document, drawing, report or information required by the Commitment to be
satisfactory to Lender. Notification to Borrower of such review and approval
shall be by separate letter(s) from Lender.

37.     DEFAULTS (1065): Prior to and as a condition of each advance of Loan
proceeds, there shall exist no default under the Loan or in any other loan with
Lender in which Borrower or any guarantor named herein is a borrower, a
guarantor or a principal officer, principal stockholder, trustee or manager of a
borrower or a guarantor. All amounts due Lender including principal and, to the
extent permitted by applicable law, interest not paid when due shall bear
interest at the Default Rate, which is defined as the lower of the interest rate
then in effect plus 5% per annum or the maximum rate permitted by law.

38.     NOTICE OF DEFAULT (1067): Upon the occurrence of a default, Lender shall
not accelerate the Loan unless:


                                       28
<Page>

        (A)     In the case of a default in any payment required under the Loan,
                whether or not payable to Lender, (a "Monetary Default"), Lender
                shall have given Borrower notice of such Monetary Default and
                Borrower shall not have cured such Monetary Default by payment
                of all amounts in default (including payment of interest at the
                Default Rate from the date of default to the date of cure on
                amounts owed to Lender) within 5 business days thereafter;

        (B)     In the case of any other default under the Loan (a "Non-Monetary
                Default"), Lender shall have given Borrower notice of such
                Non-Monetary Default and Borrower shall not have cured such
                default within 30 days thereafter (or, if the Non-Monetary
                Default is not curable within 30 days, Borrower shall not have
                (i) diligently undertaken and continued to pursue the curing of
                such Non-Monetary Default and (ii) deposited an amount
                sufficient to cure such Non-Monetary Default in an escrow
                account satisfactory to Lender).

In no event shall the notice and cure periods recited above be deemed to be a
grace period for the purposes of commencing interest at the Default Rate.

39.     MAXIMUM RATE (1070): The total of all interest under the Loan and any
fees or other payments which are construed to be interest shall never exceed the
maximum lawful rate permitted under applicable law.

40.     LEGAL APPROVAL (1080): The form of the transaction and the content and
the execution of all Loan Documents shall be satisfactory to Lender's legal
counsel and shall comply with all laws applicable to Borrower or the Property.

41.     SURVIVAL (1085): All provisions of the Commitment, where applicable,
shall survive the closing or closings of the Loan.

Notwithstanding the foregoing, to the extent any provision of the Commitment
conflicts or is inconsistent with any provision of the other Loan Documents, the
other Loan Documents shall control.

42.     ASSIGNMENT (1090): Subsequent to the advance of all Loan proceeds,
Lender may assign all or any part of the Loan to another lender at no cost to
Borrower. In the event of a proposed assignment of the Loan to another lender,
said lender shall have the right to enter the Property upon reasonable prior
notice to Borrower for additional environmental review or testing as said lender
may deem necessary, at no further cost to Borrower. The Commitment may not be
assigned by Borrower. Any assignment or attempted assignment of the Commitment
by Borrower shall be void.

43.     BUSINESS RESTRICTION REPRESENTATION AND WARRANTY (1092): Borrower
represents and warrants that Borrower, all persons and entities owning (directly
or indirectly) an ownership interest in Borrower (with the exception of any and
all limited partners), all


                                       29
<Page>

guarantors of all or any portion of the Loan, and all persons and entities
executing any separate indemnity agreement in favor of Lender in connection with
the Loan: (i) are not, and shall not become, a person or entity with whom Lender
is restricted from doing business with under regulations of the Office of
Foreign Asset Control ("OFAC") of the Department of the Treasury (including, but
not limited to, those named on OFAC's Specially Designated and Blocked Persons
list) or under any statute, executive order (including, but not limited to, the
September 24, 2001 Executive Order Blocking Property and Prohibiting
Transactions With Persons Who Commit, Threaten to Commit, or Support Terrorism),
or other governmental action; (ii) are not knowingly engaged in, and shall not
knowingly engage in, any dealings or transaction or be otherwise associated with
such persons or entities described in clause (i); and (iii) are not, and shall
not become, a person or entity whose activities are regulated by the
International Money Laundering Abatement and Financial Anti-Terrorism Act of
2001 or the regulations or orders thereunder.

44.     BORROWER'S CERTIFICATION (1095): Prior to the Loan Closing Date,
Borrower shall certify to Lender that the following representations and
warranties are true and correct as of the Loan Closing Date and will be true and
correct at the time of the initial advance of Loan proceeds:

        (A)     All Relevant Leases and a true and complete rent roll as to all
                Leases, have been furnished to Lender, and any representations
                and warranties made by landlord contained in the leases were
                true when made, in all material respects;

        (B)     The property is not subject to any form of rent control under
                any federal, state or local law, statute, ordinance, rule,
                regulation, code or program;

        (C)     All material information (which specifically includes any and
                all financial information) submitted to Lender in connection
                with the Loan is true and complete;

        (D)     Except as otherwise disclosed in the surveys delivered to Lender
                pursuant to the Condition hereof entitled SURVEY, the
                Environmental Report or the Consultant's Report, to the best of
                Borrower's knowledge and belief after appropriate due diligence
                and inquiry:

                (i)     The Property does not contain, nor will it contain
                        during the term of the Loan, underground storage tanks,
                        asbestos, urea formaldehyde insulation, PCB's, petroleum
                        products, drums, materials spills, stressed vegetation,
                        present or past dumping or fill, discolored or disturbed
                        soil, unusual or noxious odors, monitoring wells, roads
                        or trails with no apparent outlet or purpose, hazardous
                        substances, toxic substances, radon or other material
                        that could be a hazard to health, safety or property
                        values, or that could be a violation of any


                                       30
<Page>

                        federal, state or local law, statute, ordinance, rule,
                        regulation or code;

                (ii)    No part of the Property contains a cemetery or burial
                        ground;

                (iii)   No part of the Property has been designated as wetlands
                        under any federal, state or local law, statute,
                        ordinance, rule, regulation or code, or by any
                        governmental agency;

                (iv)    The Property is not located in a flood plain;

                (v)     The Property can be legally occupied and there is no
                        violation of any federal, state or local building,
                        zoning, use, environmental, Development of Regional
                        Impact and concurrency laws or other law, statute,
                        ordinance, rule, regulation or code affecting Borrower
                        or the Property;

                (vi)    The Property is in compliance with the Americans with
                        Disabilities Act and the Fair Housing Act; and

                (vii)   The Property is adequately served by public water and
                        sewage systems, gas and electricity;


45.     OUTSIDE COUNSEL (1099):

        (a)     OUTSIDE COUNSEL FOR PROJECTS NOT LOCATED IN FLORIDA. Lender may
hire outside counsel to act for it, and the cost of such counsel and all other
costs of every kind, including, but not limited to, the cost of title reports,
surveys, recording and filing fees and any tax required to be paid at the time
of recording the lien instrument (unless prohibited by law), shall be paid by
Borrower, whether or not the Loan is advanced. Unless Lender hires outside
counsel for the Projects, all Loan Documents will be prepared by Lender at no
expense to Borrower. With the exception of those Projects located in Florida,
Lender does not intend to hire outside counsel unless necessary in the opinion
of Lender's legal staff.

        (b)     OUTSIDE COUNSEL FOR PROJECTS LOCATED IN FLORIDA. Lender shall
retain outside counsel (the "Florida Legal Opinion Counsel"), at Borrower's
expense, to provide legal opinions required by the terms of the Commitment for
the Projects located in Florida. Lender does not otherwise intend to hire
outside counsel for the Projects located in Florida unless necessary in the
opinion of Lender's legal staff.

46.     LEGAL OPINIONS (1100): As soon as available after constitution of the
Commitment, but in no event later than 30 days prior to the Loan Closing Date,
Lender shall have received the following, each of which shall be satisfactory to
Lender:


                                       31
<Page>

        (A)     LEGAL OPINIONS FOR PROJECTS NOT LOCATED IN FLORIDA.

        (i)     A satisfactory form of the opinion to be delivered on the Loan
                Closing Date by counsel approved by Lender in which such counsel
                shall opine that nothing has come to their attention which would
                lead them to believe that any of the representations, warranties
                and certifications of Borrower are inaccurate in any material
                respect. The opinion shall describe what investigation
                (including a review of applicable laws and all documents and
                materials reasonably necessary to make such opinion meaningful,
                including an environmental report for the Property and all
                permits or approvals necessary to operate the Property for its
                intended purpose) was made and, to the extent necessary, may
                rely on certifications by architects and engineers. The opinion
                shall also state that Borrower is duly organized and in good
                standing under applicable law, has authority to conduct its
                business and to execute and deliver the Loan Documents; that the
                Loan Documents have been duly authorized, executed and delivered
                and are valid and binding obligations of Borrower enforceable in
                accordance with their terms and do not conflict with any
                instrument, judgment, statute or regulation by which Borrower or
                the Property is bound; such opinion to be in a format acceptable
                to Lender and may contain a general exception to enforceability
                for fundamental issues that have general application to all loan
                contracts and specific exceptions only with regard to provisions
                which are unique or of material importance to the Loan or arise
                out of recent statutory, regulatory or judicial developments.

        (ii)    A satisfactory form of the opinion to be delivered on the Loan
                Closing Date, by counsel approved by Lender in which such
                counsel shall opine that the Guarantee of Recourse Obligations
                and the Environmental Indemnity Agreement (collectively, the
                "Ancillary Documents") have been duly authorized, executed and
                delivered by the signatories thereto, are valid and binding
                obligations of the signatories thereto and do not conflict with
                any instrument, judgment, statute or regulation by which any of
                the signatories is bound, that the Ancillary Documents are
                enforceable in accordance with their terms, and that each
                corporate signatory thereto is duly organized and in good
                standing under applicable law, has authority to conduct its
                business and to execute and deliver the Ancillary Documents.

        (A)     LEGAL OPINIONS FOR PROJECTS LOCATED IN FLORIDA.

        (i)     A satisfactory form of the opinion to be delivered on the Loan
                Closing Date by counsel approved by Lender, in which such
                counsel opines that Borrower is duly organized and in good
                standing under applicable law, has authority to conduct its
                business, and that the Loan Documents, including the Guarantee
                of Recourse Obligations and the Environmental Indemnity
                Agreement (collectively, the "Ancillary Documents") have been
                duly authorized, executed and delivered and do not conflict with
                any


                                       32
<Page>

                instrument, judgment, statute or regulation by which Borrower or
                the Property is bound.

        (ii)    A satisfactory form of the opinion to be delivered on the Loan
                Closing Date by counsel retained by Lender, in which such
                counsel opines (i) with regard to land use and other applicable
                laws affecting the Property, and (ii) that the Loan Documents,
                including the Ancillary Documents, are valid and binding
                obligations of Borrower enforceable in accordance with their
                terms. Such opinion shall rely upon the opinion described in (A)
                above, with regard to due organization, good standing, authority
                to conduct its business, and execution and delivery of the Loan
                Documents, including the Ancillary Documents. Borrower shall
                cooperate fully with counsel retained by Lender in completing a
                questionnaire relating to land use and operation of the Property
                and provide such counsel with all materials necessary to produce
                the legal opinions required of it hereunder and to determine
                that it is reasonable for Lender to rely upon such legal
                opinions.

47.     RELEASE AND SUBSTITUTION OF SECURITY (5155):

Upon Borrower's prior written request, after the closing of the Loan and the
advance of Loan proceeds, and provided that there is no default under the Loan,
the Borrower may upon not less than 60 days prior written notice (the
"Substitution Notice"), substitute a project(s) (the "Substitute Project(s)"),
for portions of the Security (up to a maximum of four (4) Projects currently
subject to the Lien Instrument (the "Replaced Project" or the "Release
Project(s)") shall be released from the Lien Instrument and replaced with
Substitute Project(s), subject to the following:

        (A)     Payment of a nonrefundable service fee for each Substitution to
                be submitted with each written Substitution Notice (i.e.,
                Borrower's request for release and substitution). If the
                Substitution consists of one Project, the service fee will be
                $25,000; two Projects, the service fee will be $50,000; three
                Projects, the service fee will be $75,000; or four Projects, the
                service fee will be $100,000.

        (B)     Payment of a release fee equal to one percent (1.0%) of the
                Allocated Loan Amount as defined in Exhibit A, adjusted to
                reflect amortization of principal that has occurred since the
                Loan Closing Date, notwithstanding the preceding, the release
                fee shall not exceed $100,000 per Project;

        (C)     The property to be released (i.e., the Release Project(s)) shall
                consist of not less than one Project as defined in Exhibit A;

        (D)     No more than two (2) substitutions or releases of collateral
                shall have been completed in the prior 12 month period;


                                       33
<Page>

        (E)     The Substitute Project(s) is owned 100% by Borrower, title to
                the Substitute Project(s) shall be satisfactory to Lender's
                legal counsel, and the requirements set forth in the Condition
                entitled TITLE INSURANCE shall be met with respect to the
                Substitute Project(s) prior to closing on the release and
                substitution. A title policy, satisfactory to Lender, shall be
                issued to Lender insuring the interest of Lender to be a first
                and valid lien on the Substitute Project(s). The title policy
                shall contain a tie-in endorsement and shall not contain a
                so-called Creditor's Rights exception or other exception related
                to fraudulent conveyance. The cost of such title policy shall be
                borne by the Borrower. Lender shall receive a first lien on the
                Substitute Project(s), satisfactory to Lender. The date of
                delivery and recordation of the lien instrument for the
                Substitute Project(s) shall be the Substitution Date, and the
                transaction to permit a Substitute Project(s) to replace the
                Release Project(s) is sometimes referred to herein as a
                "Substitution".

        (F)     At least 30 days prior to closing on the release and
                substitution, Borrower shall furnish four copies of a recently
                certified as-built survey, complying with the requirements set
                forth in the Condition entitled SURVEY with respect to the
                Substitute Project(s);

        (G)     The physical and environmental condition of the Substitute
                Property shall be satisfactory to Lender in its sole and
                absolute discretion. Borrower shall prepay the estimated cost
                (to be determined by Lender) of the Consultant's Report and
                Environmental Report. Said reports shall be satisfactory to
                Lender with respect to the Substitute Project(s) based on the
                requirements set forth in the Conditions entitled CONSULTANT
                SERVICES and ENVIRONMENTAL ENGINEER'S REPORT;

        (H)     The Substitute Project(s) shall be acceptable to Lender in all
                respects, in Lender's sole and absolute discretion. The
                Substitute Project(s) shall be garden apartment project(s)
                and/or similar apartment projects at least equal to the Release
                Property in each of the following respects, as determined by
                Lender in its sole and absolute discretion: (i) appraised value;
                (ii) stability of cash flow; (iii) tenant credit, quality, and
                diversification; and (iv) location quality and diversification;

        (I)     The then current Net Income Available For Debt Service (the
                "NIADS") for the Substitute Project(s) (adjusted to reflect
                gross rental income based on the lower of the prior twelve month
                actual results or the current rent roll annualized; neither to
                exceed that which would be earned from the rental of 90% of the
                net rentable area of the Substitute Project(s)) shall be at
                least 105% of the then current NIADS of the Release Project(s)
                and the NIADS originally allocated to the Release Project(s) at
                the Loan Closing Date;


                                       34
<Page>

        (J)     The Substitute Project(s) shall meet all of the conditions to
                closing set forth herein as if said Substitute Project(s) were
                part of the original security for the Loan;

        (K)     Borrower shall deliver such amendments and reaffirmations of the
                Loan Documents executed by Borrower or the Principals as Lender
                may require to effectuate the substitution of the Substitute
                Project(s) for the Release Project(s). Upon completion of the
                Substitution, the Substitute Project(s) shall be included in the
                Lien Instrument and the Release Project(s) shall be released;
                and

        (L)     Lender shall receive an update to the legal opinion(s) required
                under the Condition entitled LEGAL OPINIONS with respect to the
                Substitute Project(s) and the amendments and reaffirmations
                referenced in the preceding clause. Upon completion of the
                Substitution, the Substitute Project(s) shall be included in the
                Lien Instrument, and the Replaced Project(s) shall be released.

48.     INFORMATION SUBMITTED (1110): Borrower hereby certifies that all
material information and statements (which specifically includes any and all
financial information), heretofore furnished to Lender are true and complete to
the best of Borrower's knowledge and belief and are made for the purpose of
inducing favorable action by Lender.

49.     FEDERAL EQUAL CREDIT OPPORTUNITY (1115): The Federal Equal Credit
Opportunity Act prohibits creditors from discriminating against credit
applicants on the basis of sex, marital status, race, color, religion, national
origin, age (provided the applicant has the capacity to contract), receipt of
income from a public assistance program, and the good faith exercise of rights
under the Consumer Credit Protection Act. The Federal Agency which administers
compliance with this law concerning this life insurance company is the Federal
Trade Commission, Equal Credit Opportunity, Washington, D.C. 20580, (202)
724-1140.

Borrower has the right, within 60 days of notification of any adverse action
with respect to this application, to a statement of specific reasons for the
action taken. The statement of reason can be obtained by contacting Lender at
720 E. Wisconsin Avenue, Milwaukee, WI 53202, ATTN: Vice President - Real Estate
Production or (414) 271-1444. Lender shall respond to a request for specific
reason within 30 days of its receipt of the request.

50.     HEADINGS (1120): The paragraph headings contained herein are for
convenience and reference only and in no way define, limit or describe the scope
or intent of, or in any way affect, the provisions hereof.

51.     SUBMISSION OF INFORMATION (1130): An estimate of the earliest date on
which the initial advance of funds may occur is the date which appears above
Borrower's


                                       35
<Page>

signature hereon. The initial advance may occur on that date, on the Loan
Closing Date or on such other date prior to the Commitment Expiration Date as
may be mutually agreed upon by Borrower and Lender. The information required
herein to be approved by Lender shall be submitted by Borrower to Lender, where
applicable, at least 30 days prior to the Loan Closing Date. In every case,
Borrower is encouraged to submit said information to Lender as soon as available
to allow adequate time for Lender review and approval.

52.     CONTRACT (1135): If Lender agrees to make the Loan, either (i) this
application, upon Lender giving Borrower written notice of acceptance hereof, or
(ii) a separate letter of commitment issued by Lender, upon the timely
acceptance thereof by Borrower, shall constitute the "Commitment". In the event
of any conflict, the terms of the separate letter of commitment, if issued,
shall govern over this application. The Commitment, shall represent the complete
contract between Borrower and Lender and shall supersede all prior negotiations
of the parties. Lender's agreement to the terms and conditions set forth herein
or in the Loan Documents is particular to this Loan in the context of the
current facts and circumstances only, and shall not be deemed to imply in any
manner that Lender will again agree to any term or condition in connection with
any refinance, extension or other modification of the Loan or with any other
loan or transaction, whether with Borrower, its affiliate or a third party.

Borrower acknowledges and agrees that, upon the constitution of the Commitment,
Borrower shall be contractually bound to Lender to close the Loan and take Loan
advances as contemplated herein. If Borrower fails to comply with any covenant
or condition in the Commitment, Lender shall have the right (i) to retain any
amounts paid hereunder and not previously returned, (ii) to receive payment on
any letter of credit delivered hereunder, and, in addition, (iii) to claim and
receive all provable damages, including loss of bargain, sustained by Lender as
a result of such default in excess of the amounts retained or received.

53.     Estimated Loan Closing Date: February 28, 2005

        Executed this 11th day of August, 2004.

        NTS Realty Holdings Limited Partnership,
        A Delaware limited partnership

        BY:   NTS Realty Capital, Inc., a Delaware corporation,
                 its Managing General Partner


          BY:                                           Borrower's Taxpayer I.D:
             --------------------------
                                                                  --------------
              ITS:
                  ---------------------


                                       36
<Page>

                                           file name:"credit.doc"
                                                                    Revised 9/94
                                                                    ML-130


                                   IRREVOCABLE
                            STANDBY LETTER OF CREDIT
                               (Bank and Address)

Amount U.S. $__________                                      No.________________

To:     The Northwestern Mutual Life Insurance Company (Beneficiary)
        720 East Wisconsin Avenue
        Milwaukee, Wisconsin 53202
        Attn:  Real Estate Dept. - Investment Processing


        We hereby establish in your favor an irrevocable letter of credit for
the account of __________________ (Account Party) and authorize you to draw on
us up to an aggregate amount of $__________________ available by your drafts AT
SIGHT. This is a clean letter of credit; no documents are required.

        All drafts must be marked "Drawn under Letter of Credit

of ________________________________

No. _______________________________

dated _____________________________".

        Unless extended pursuant to the terms hereof, this letter of credit will
expire _____________________ (one month after the commitment expiration date).

1. EXTENSIONS OF EXPIRATION DATE. (a) Notwithstanding the expiration date stated
above, this letter of credit shall in no circumstance expire unless 15 days
advance written notice of its expiration date has been given to Beneficiary at
its address above, Attention: Real Estate Department - Investment Processing.

(b) If the expiration date is a day on which our offices are closed for any
reason other than a force majeure event, the expiration date shall automatically
be extended to the next day our offices are open. If the expiration date is a
day on which our offices are closed because of a force majeure event, the
expiration date shall automatically be extended to the 30th calendar day on
which our offices are open following such interruption.


                                       37
<Page>

(c) If you draw on us within 20 days prior to the expiration date and the draw
request is rejected, refused or denied for any reason, the expiration date shall
automatically be extended for a period of 20 calendar days.

2. WAIVER OF WAITING PERIOD. If a drawing hereunder is made by presentment of a
draft prior to 1 p.m. ______ time, we will, on the same business day, at your
request, either, (a) confirm to you the wire transfer of the amount specified,
in immediately available funds, and will notify you of the Federal Reserve Bank
confirmation number relating to such transfer by 3:00 p.m. _______ time, or (b)
deliver to you a cashier's check in the amount specified.

3. TRANSFERABILITY. This Credit is transferable in its entirety, but not in
part, to a transferee of the Beneficiary. Such transfer shall be effected by
presentation of this Credit to the Bank accompanied by an appropriate instrument
of assignment. Upon such presentation the Bank shall issue forthwith an
irrevocable standby letter of credit to the transferee (as the new
"Beneficiary") with provisions consistent with those of this Credit. Each letter
of credit issued to a transferee may be transferred in the same manner and
subject to the same conditions as herein provided.

4. HONORING DRAFTS. We hereby agree with the drawers, endorsers, and bona fide
holders of drafts drawn under and in compliance with the terms of this Credit,
that such drafts will be duly honored on due presentation to the drawees if
negotiated on or before the expiration of this Credit, or presented at this
office on or before such expiration.

                                     Authorized Signature and Title


This credit is subject to the Uniform
Customs and Practice for Documentary
Credits (1993) Revision, International
Chamber of Commerce Publication No. 500


                                       38
<Page>

                                                                       PERMANENT
                                                                       STAC 1055



                                MINIMUM STANDARD
                               DETAIL REQUIREMENTS



                                       for



                                    ALTA/ACSM
                               LAND TITLE SURVEYS


                              [SEAL]           [SEAL]


                                  as adopted by


                         AMERICAN LAND TITLE ASSOCIATION
                    AMERICAN CONGRESS ON SURVEYING & MAPPING
                   NATIONAL SOCIETY OF PROFESSIONAL SURVEYORS


                                      1999





                                       39
<Page>

                    MINIUMIM STANDARD DETAIL REQUIREMENTS FOR
                          ALTA/ACSM LAND TITLE SURVEYS

[SEAL]                                                                    [SEAL]

                                  as adopted by
                         AMERICAN LAND TITLE ASSOCIATION
                    AMERICAN CONGRESS ON SURVEYING & MAPPING
                                       and
                   NATIONAL SOCIETY OF PROFESSIONAL SURVEYORS


It is recognized that members of the American Land Title Association (ALTA) have
specific needs, peculiar to title insurance matters, which require particular
information for acceptance by title insurance companies when said companies are
asked to insure title to land without exceptions as to the many matters which
might be discoverable from survey and inspection and not be evidenced by the
public records. In the general interest of the public, the surveying profession,
title insurers and abstracters, ALTA, the American Congress on Surveying and
Mapping (ACSM) and the National Society of Professional Surveyors, Inc. (NSPS)
jointly promulgate and set forth such details and criteria for standards. It is
understood that local variations may require local adjustments to suit local
situations, and often must be applied. It is recognized that title insurance
companies are entitled to rely on the survey furnished to them being of the
appropriate professional quality, both as to completeness and as to accuracy. It
is equally recognized that for the performance of a survey, the surveyor will be
provided with appropriate data which can be relied upon in the preparation of
the survey.

For a survey of real property and the plat or map of the survey to be acceptable
to a title insurance company for purposes of insuring title to said real
property free and clear of survey matters (except those matters disclosed by the
survey and indicated on the plat or map), certain specific and pertinent
information shall be presented for the distinct and clear understanding between
the client (insured), the title insurance company (insurer), and the surveyor
(the person professionally responsible for the survey).

These requirements are:

1. The client shall request the survey or arrange for the survey to be requested
and shall provide a written authorization to proceed with the survey from the
person responsible for paying for the survey. Unless specifically authorized in
writing by the insurer, the insurer shall not be responsible for any costs
associated with the preparation of the survey. The request shall specify that an
"ALTA/ACSM LAND TITLE SURVEY" is required, meeting the then-current accuracy
standards jointly adopted by ALTA, ACSM and NSPS. The request shall also
designate which of the optional items listed in Table A are to be incorporated.
The request shall set forth the record description of the property. Complete
copies of the record description of the property, any


                                       40
<Page>

record easements benefitting the property, the record easements or servitudes
and covenants affecting the property ("Record Documents"), documents of record
referred to in the Record Documents, and any other documents containing desired
appropriate information affecting the property being surveyed and to which the
survey shall make reference shall be provided to the surveyor for notation on
the plat or map of survey.

2. The plat or map of such survey shall bear the name, address, telephone
number, and signature of the professional land surveyor who made the survey, his
or her official seal and registration number, the date the survey was completed
and the dates of all revisions, and the caption "ALTA/ACSM Land Title Survey"
with the certification set forth in paragraph 8.

3. An "ALTA/ACSM LAND TITLE SURVEY" shall be in accordance with the then-current
"Accuracy Standards for Land Title Surveys" ("Accuracy Standards") as adopted,
from time to time, by the American Congress on Surveying and Mapping, the
National Society of Professional Surveyors, and the American Land Title
Association and incorporated herein by reference.

4. On the plat or map of an "ALTA/ACSM LAND TITLE SURVEY," the survey boundary
shall be drawn to a convenient scale, with that scale clearly indicated. A
graphic scale, shown in feet or meters or both, shall be included. A north arrow
shall be shown and when practicable, the plat or map of survey shall be oriented
so that north is at the top of the drawing. Symbols or abbreviations used shall
be identified on the face of the plat or map by use of a legend or other means.
If necessary for clarity, supplementary or exaggerated diagrams shall be
presented accurately on the plat or map. The plat or map shall be a minimum size
of 8 1/2 by 11 inches.

5. The survey shall be performed on the ground and the plat or map of an "ALTA/
ACSM LAND TITLE SURVEY" shall contain, in addition to the required items already
specified above, the following applicable information:

(a)  All data necessary to indicate the mathematical dimensions and
     relationships of the boundary represented, with angles given directly or by
     bearings, and with the length and radius of each curve, together with
     elements necessary to mathematically define each curve. The point of
     beginning of the surveyor's description shall be shown as well as the
     remote point of beginning if different. A bearing base shall refer to some
     well-fixed bearing line, so that the bearings may be easily re-established.
     All bearings around the boundary shall read in a clockwise direction
     wherever possible. The North arrow shall be referenced to its bearing base
     and should that bearing base differ from record title, that difference
     shall be noted.

(b)  When record bearings or angles or distances differ from measured bearings,
     angles or distances, both the record and measured bearings, angles, and
     distances shall be clearly indicated. If the record description fails to
     form a


                                       41
<Page>

     mathematically closed figure, the surveyor shall so indicate.

(c)  Measured and record distances from corners of parcels surveyed to the
     nearest right-of-way lines of streets in urban or suburban areas, together
     with recovered lot corners and evidence of lot corners, shall be noted. The
     distances to the nearest intersecting street shall be indicated and
     verified. Names and widths of streets and highways abutting the property
     surveyed and widths of rights of way shall be given. Any use contrary to
     the above shall be noted. Observable evidence of access (or lack thereof)
     to such abutting streets or highways shall be indicated. Observable
     evidence of private roads shall be so indicated. Streets abutting the
     premises, which have been described in Record Documents, but not physically
     opened, shall be shown and so noted.

(d)  The identifying titles of all recorded plats, filed maps, right of way
     maps, or similar documents which the survey represents, wholly or in part,
     shall be shown with their appropriate recording data, filing dates and map
     numbers, and the lot, block, and section numbers or letters of the surveyed
     premises. For non-platted adjoining land, names, and recording data
     identifying adjoining owners as they appear of record shall be shown. For
     platted adjoining land, the recording data of the subdivision plat shall be
     shown. The survey shall indicate platted setback or building restriction
     lines which have been recorded in subdivision plats or which appear in a
     Record Document which has been delivered to the surveyor. Contiguity,
     gores, and overlaps along the exterior boundaries of the surveyed premises,
     where ascertainable from field evidence or Record Documents, or interior to
     those exterior boundaries, shall be clearly indicated or noted. Where only
     a part of a recorded lot or parcel is included in the survey, the balance
     of the lot or parcel shall be indicated.

(e)  All evidence of monuments shall be shown and noted to indicate which were
     found and which were placed. All evidence of monuments found beyond the
     surveyed premises on which establishment of the corners of the surveyed
     premises are dependent, and their application related to the survey shall
     be indicated.

(f)  The character of any and all evidence of possession shall be stated and the
     location of such evidence carefully given in relation to both the measured
     boundary lines and those established by the record. An absence of notation
     on the survey shall be presumptive of no observable evidence of possession.

(g)  The location of all buildings upon the plot or parcel shall be shown and
     their locations defined by measurements perpendicular to the boundaries. If
     there are no buildings erected on the property being surveyed, the plat or
     map shall bear the statement, "No buildings." Proper street numbers shall
     be shown where available.


                                       42
<Page>

(h)  All easements evidenced by a Record Document which have been delivered to
     the surveyor shall be shown, both those burdening and those benefitting the
     property surveyed, indicating recording information. If such an easement
     cannot be located, a note to this effect shall be included. Observable
     evidence of easements and/or servitudes of all kinds, such as those created
     by roads; rights-of-way; water courses; drains; telephone, telegraph, or
     electric lines; water, sewer, oil or gas pipelines on or across the
     surveyed property and on adjoining properties if they appear to affect the
     surveyed property, shall be located and noted. If the surveyor has
     knowledge of any such easements and/or servitudes, not observable at the
     time the present survey is made, such lack of observable evidence shall be
     noted. Surface indications, if any, of underground easements and/or
     servitudes shall also be shown.

(i)  The character and location of all walls, buildings, fences, and other
     visible improvements within five feet of each side of the boundary lines
     shall be noted. Without expressing a legal opinion, physical evidence of
     all encroaching structural appurtenances and projections, such as fire
     escapes, bay windows, windows and doors that open out, flue pipes, stoops,
     eaves, cornices, areaways, steps, trim, etc., by or on adjoining property
     or on abutting streets, on any easement or over setback lines shown by
     Record Documents shall be indicated with the extent of such encroachment or
     projection. If the client wishes to have additional information with regard
     to appurtenances such as whether or not such appurtenances are independent,
     division, or party walls and are plumb, the client will assume the
     responsibility of obtaining such permissions as are necessary for the
     surveyor to enter upon the properties to make such determinations.

(j)  Driveways and alleys on or crossing the property must be shown. Where there
     is evidence of use by other than the occupants of the property, the
     surveyor must so indicate on the plat or map. Where driveways or alleys on
     adjoining properties encroach, in whole or in part, on the property being
     surveyed, the surveyor must so indicate on the plat or map with appropriate
     measurements.

(k)  As accurately as the evidence permits, the location of cemeteries and
     burial grounds (i) disclosed in the process of researching title to the
     premises or (ii) observed in the process of performing the field work for
     the survey, shall be shown.

(l)  Ponds, lakes, springs, or rivers bordering on or running through the
     premises being surveyed shall be shown.

6. As a minimum requirement, the surveyor shall furnish two sets of prints of
the plat or map of survey to the title insurance company or the client. If the
plat or map of survey consists of more than one sheet, the sheets shall be
numbered, the total number of sheets indicated and match lines be shown on each
sheet. The prints shall be on


                                       43
<Page>

durable and dimensionally stable material of a quality standard acceptable to
the title insurance company. At least two copies of the boundary description
prepared from the survey shall be similarly furnished by the surveyor and shall
be on the face of the plat or map of survey, if practicable, or otherwise
attached to and incorporated in the plat or map. Reference to date of the
"ALTA/ACSM LAND TITLE SURVEY," surveyor's file number (if any), political
subdivision, section, township and range, along with appropriate aliquot parts
thereof, and similar information shown on the plat or map of survey shall be
included with the boundary description.

7. Water boundaries necessarily are subject to change due to erosion or
accretion by tidal action or the flow of rivers and streams. A realignment of
water bodies may also occur due to many reasons such as deliberate cutting and
filling of bordering lands or by avulsion. Recorded surveys of natural water
boundaries are not relied upon by title insurers for location of title.

When a property to be surveyed for title insurance purposes contains a natural
water boundary, the surveyor shall measure the location of the boundary
according to appropriate surveying methods and note on the plat or map the date
of the measurement and the caveat that the boundary is subject to change due to
natural causes and that it may or may not represent the actual location of the
limit of title. When the surveyor is aware of changes in such boundaries, the
extent of those changes shall be identified.

8. When the surveyor has met all of the minimum standard detail requirements for
an ALTA/ACSM Land Title Survey, the following certification shall be made on the
plat:

To (name of client), (name of lender, if known), (name of title insurance
company, if known), (name of others as instructed by client):

This is to certify that this map or plat and the survey on which it is based
were made in accordance with "Minimum Standard Detail Requirements for ALTA/ACSM
Land Title Surveys," jointly established and adopted by ALTA, ACSM and NSPS in
1999, and includes Items _________ of Table A thereof. Pursuant to the Accuracy
Standards as adopted by ALTA, NSPS, and ACSM and in effect on the date of this
certification, undersigned further certifies that [Surveyor to complete
certificate with the appropriate ONE of the following three phrases]

o    the Positional Uncertainties resulting from the survey measurements made on
     the survey do not exceed the allowable Positional Tolerance.

o    the survey measurements were made in accordance with the "Minimum Angle,
     Distance, and Closure Requirements for Survey Measurements Which Control
     Land Boundaries for ALTA/ACSM Land Title Surveys."

o    proper field procedures, instrumentation, and adequate survey personnel
     were employed in order to achieve results comparable to those outlined in
     the "Minimum Angle, Distance, and Closure


                                       44
<Page>

     Requirements for Survey Measurements Which Control Land Boundaries for
     ALTA/ACSM Land Title Surveys."

Date: _________________________

(signed)

      _________________________
(seal)
      Registration No.

Adopted by the American Land Title Association on October 6, 1999.
Adopted by the Board of Direction, American Congress on Surveying and Mapping on
October 20, 1999.
Adopted by the Board of Directors, National Society of Professional Surveyors on
October 19, 1999.
American Land Title Association, 1828 L St., N.W., Suite 705, Washington, D.C.
20036.
American Congress on Surveying and Mapping, 5410 Grosvenor Lane, Bethesda, MD
20814.
National Society of Professional Surveyors, 5410 Grosvenor Lane, Bethesda, MD
20814.


                                       45
<Page>




















                                       46
<Page>

                                     TABLE A
               OPTIONAL SURVEY RESPONSIBILITIES AND SPECIFICATIONS
                               FOR AS-BUILT SURVEY

NOTE: The items of Table A must be negotiated between the surveyor and client.
It may be necessary for the surveyor to qualify or expand upon the description
of these items, e.g. in reference to Item 6, there may be a need for an
interpretation of a restriction. The surveyor cannot make a certification on the
basis of an interpretation.

If indicated by "As-Built" the following optional items are to be included in
the ALTA/ACSM LAND TITLE AS-BUILT SURVEY:

<Table>
<S>                      <C>
   1.  NOT REQUIRED      Monuments placed (or a reference monument or witness to
                         the corner) at all major corners of the boundary of the
                         property, unless already marked or referenced by an
                         existing monument or witness to the corner.

   2.  AS-BUILT          Vicinity map showing the property surveyed in reference
                         to nearby highway(s) or major street intersection(s).

   3.  AS-BUILT          Flood zone designation (with proper annotation based on
                         Federal Flood Insurance Rate Maps or the state or local
                         equivalent, by scaled map location and graphic plotting
                         only.)

   4.  AS-BUILT          Land area.

   5.  NOT REQUIRED      Contours and the datum of the elevations.

   6.  AS-BUILT          Identify and show if possible, setback, height, and
                         floor space area restrictions of record or disclosed by
                         applicable zoning or building codes (in addition to
                         those recorded in subdivision maps). If none, so state.

   7.  AS-BUILT          (a) Exterior PERIMETER dimensions of all buildings at
                             ground level

       AS-BUILT          (b) Square footage of:

       AS-BUILT              (1) exterior footprint of all buildings at ground
                                 level

       AS-BUILT              (2) gross floor area of all buildings; or

       NOT REQUIRED          (3) other areas to be defined by the client

       AS-BUILT          (c) Measured height of all buildings above grade at a
                             defined location. If no defined location is
                             provided, the point of measurement shall be shown.


                                       47
<Page>

   8.  AS-BUILT          Substantial, visible improvements (in addition to
                         buildings) such as signs, parking areas or structures,
                         swimming pools, etc.

   9.  AS-BUILT          Parking areas and, if striped, the striping and the
                         type (e.g. handicapped, motorcycle, regular, etc.) and
                         number of parking spaces.

  10.  AS-BUILT          Indication of access to a public way such as curb cuts
                         and driveways.

  11.  AS-BUILT          Location of utilities (representative examples of which
                         are shown below) existing on or serving the surveyed
                         property as determined by:

       AS-BUILT          (a) Observed evidence:

                         o    railroad tracks and sidings;
                         o    manholes, catch basins, valve vaults or other
                              surface indications of subterranean uses;
                         o    wires and cables (including their function)
                              crossing the surveyed premises, all poles on or
                              within ten feet of the surveyed premises, and the
                              dimensions of all crosswires or overhangs
                              affecting the surveyed premises; and
                         o    utility company installations on the surveyed
                              premises.

       NOT REQUIRED      (b) Observed evidence together with plans and markings
                         provided by client, utility companies, and other
                         appropriate sources (with reference as to the source of
                         information)

  12.  NOT REQUIRED      Governmental Agency survey-related requirements as
                         specified by the client.

  13.  AS-BUILT          Names of adjoining owners of platted lands.

  14.  AS-BUILT          Observable evidence of earth moving work, building
                         construction or building additions within recent
                         months.

  15.  NOT REQUIRED      Any changes in street right of way lines either
                         completed or proposed, and available from the
                         controlling jurisdiction. Observable evidence of recent
                         street or sidewalk construction or repairs.

  16.  NOT REQUIRED      Observable evidence of site use as a solid waste dump,
                         sump or sanitary landfill.


                                       48
<Page>

  17.  AS-BUILT          DISTANCE OF BUILDINGS TO PROPERTY LINES, ADJACENT
                         BUILDINGS, SETBACKS OR EASEMENTS WHEN ADJACENT TO SAME.

  18.  AS-BUILT          OBSERVABLE EVIDENCE OF WETLANDS

  19.  AS-BUILT          NUMBER OF STORIES OF EACH BUILDING

  20.  AS-BUILT          FINISH FLOOR ELEVATION AT LOWEST HABITABLE LEVEL OF
                         EACH BUILDING IF BUILDING IS LOCATED IN A FLOOD ZONE.

  21.  AS-BUILT          FOR MULTI-BUILDING PROPERTIES SUCH AS APARTMENTS, THE
                         REFERENCE NUMBER OF EACH BUILDING AS INDICATED ON SITE
                         PLAN

  22.  AS-BUILT          NUMBER OF PARKING SPACES REQUIRED IN ORDER TO COMPLY
                         WITH LOCAL ZONING REQUIREMENTS.
</Table>

       ITEMS 17-22 ARE ADDITIONAL ITEMS REQUIRED BY THE NORTHWESTERN MUTUAL LIFE
       INSURANCE COMPANY.





                                       49
<Page>

                 THE NORTHWESTERN MUTUAL LIFE INSURANCE COMPANY
                          ENVIRONMENTAL SITE ASSESSMENT
                                  SCOPE OF WORK
                             (REV. FEBRUARY 5, 1999)

The intent of this scope of work is to set forth the minimum requirements
necessary for The Northwestern Mutual Life Insurance Company to determine the
environmental condition of the Property. For purposes of this Scope of Work,
"Property" is defined as a property being considered for acquisition, collateral
for a loan, or sale. This Scope of Work is not intended to limit the
investigation performed by the consultant. Rather, it is intended to provide the
minimum requirements necessary for The Northwestern Mutual Life Insurance
Company's Environmental Unit to evaluate certain conditions, including
environmental hazards present, on or about the Property. This Scope of Work is
also intended to address all of the factors necessary to establish an "innocent
landowner defense" as specified in the Superfund Amendment and Reauthorization
Act.

I.   SITE INVESTIGATION: The consultant shall perform an on-site reconnaissance
     of the interior and exterior of all structures located on the Property. A
     description of all current and/or planned operations at the Property must
     be provided. In addition, all of the items listed below shall be addressed
     within the consultant's report and will include a description of the
     location, quantity, and condition of all items. The consultant will provide
     a negative affirmation if no such conditions are found.

     A.   Operational Issues:

          1.   The consultant will discuss all current and/or proposed
               operations that are or will be conducted at the Property. The
               consultant shall provide a list of all current or proposed
               tenants and a description of their planned or present operations
               at the Property, where appropriate.

          2.   The consultant will provide an inventory of all chemicals
               presently and/or proposed to be used by each tenant at the
               Property (including petroleum products) with a description of the
               chemical usage and a discussion of the chemical components, with
               detail similar to that which would typically be found on a
               Material Safety Data Sheet.

          3.   The consultant will provide a discussion of all storage
               methodologies for new product and/or waste materials and a
               discussion of any containers or drums that are not labeled or
               identified. This discussion will include a review of RCRA,
               including storage timeframes, storage area requirements, and
               disposal programs.

          4.   The consultant will provide a discussion of any materials spills,
               stressed vegetation, evidence of present or past dumping,
               discolored or disturbed soil.

          5.   The consultant will discuss any evidence of past or present
               underground storage tanks was observed at the Property.

          6.   The consultant will discuss any wells, including drinking water,
               groundwater monitoring, or dry wells that are present on the
               Property.


                                       50
<Page>

          7.   The consultant will discuss any roads or trails with no apparent
               outlet or purpose that were identified at the Property.

          8.   The consultant will provide a discussion of all wastewater
               discharges at the Property, including any industrial process
               water discharges, sanitary sewer discharges, and storm water
               discharges.

          9.   The consultant will also discuss any other materials stored,
               generated, or present on or under the Property which would pose a
               hazard to health, safety or to the value of the Property.

     B.   Building Materials

          1.   Asbestos containing materials present at the Property shall be
               evaluated according to guidelines detailed in Appendix A of this
               scope of work.

          2.   A determination will be made as to whether any building equipment
               may contain any PCBs. This will include a determination of
               transformer ownership, if applicable. Any such equipment that is
               identified will be discussed, including its location and
               condition. Such items will be noted on appropriate site plans.

          3.   Lead based paint at the Property will be evaluated in accordance
               with the guidelines discussed in Appendix D of this scope of
               work. It is acceptable to render a determination that paint which
               was applied after the Consumer Product Safety Commission ban on
               residential, interior lead based paint (1979) does not contain
               lead. This assumption will not be acceptable for applications
               that are still suspect, such as applications on steel beams,
               metal grid work, etc.

          4.   Radon at the property shall be evaluated as discussed in
               Appendix B of this scope of work.

          5.   The consultant will determine the presence of refrigerated
               drinking water fountains listed in the Federal Register (dated
               January 18, 1990) as Drinking Water Coolers That Are Not Lead
               Free and will document location, make and model number. Lead in
               drinking water sampling shall not be collected from refrigerated
               drinking water fountains.

          6.   The local municipality or purveyor of the water system will be
               contacted to determine if their testing is consistent with Safe
               Drinking Water Act (SDWA) requirements. If the Property uses on
               site well water for consumptive purposes, the consultant shall
               determine if the water has been tested for SDWA compounds. In
               both instances a copy of the most recent analytical testing data
               will be provided in the report. Additionally, lead in the
               drinking water at the Property will be evaluated by conducting
               sampling and laboratory analysis of the water consistent with
               Appendix C of this scope of work.

     C.   The consultant will evaluate the potential for any groundwater
          contamination which may have resulted from historical or current
          on-site operations. In addition,


                                       51
<Page>

          historical or current releases known to exist on adjacent or nearby
          properties that could impact the Property will be evaluated. This will
          include, but not be limited to, past or present onsite dry-cleaning
          operations, industrial uses, or any other operation which would use
          hazardous substances. If it is determined that potential groundwater
          impact exists at the Property, the appropriate Northwestern Mutual
          Life environmental analyst will be contacted immediately to discuss
          the need for further evaluation of the condition. If it is determined
          that groundwater testing and/or subsurface soils testing is warranted,
          the consultant will incorporate the findings of such an investigation
          into the environmental site assessment report before it is finalized.

     D.   The consultant shall determine if any imported (from off-site) fill
          has been used at the Property. This will include, but shall not be
          limited to, landfill activities, uncontrolled dumping or filling
          activities, and controlled filling activities necessary to facilitate
          construction. In all instances, the consultant will determine whether
          imported fill materials contain regulated levels of hazardous
          materials.

          1.   If the Property is a new development or a proposed development,
               the consultant will obtain a certification from the developer,
               borrower source, general contractor, and/or soils engineering
               company who supervised the placement of fill soils. This
               certification will provide a statement that the fill materials
               were free of impact. The consultant should determine if fill
               materials are a planned development item so that proper
               documentation can be obtained for future fill.

          2.   If the Property is an existing development, it is understood that
               it may not be possible to obtain a certification similar to that
               expressed above. In these instances, the consultant will address
               the likelihood of the placement of uncontrolled fill at the
               Property and will attempt to identify the source of any such
               fill.

     E.   The consultant shall determine if any part of the Property has been
          designated as a wetland under any federal, state or local law or
          regulation or by any governmental agency. The consultant shall also
          discuss observations made pertaining specifically to wetlands while
          on-site. The consultant will research the National Wetlands Inventory
          Map and provide a color copy, if available. The consultant shall
          provide a discussion of all agencies researched if such a map is
          unavailable. On properties that have previously been developed, the
          consultant will provide a statement as to the existence of wetlands
          currently on the Property. On new development projects, if it is
          determined that a potential or identified wetland is present on the
          Property, the appropriate Northwestern Mutual Life environmental
          analyst will be contacted as soon as possible so that the need for a
          wetland delineation survey can be evaluated. If an actual wetland
          delineation is required, it will constitute a change order and will be
          negotiated between the appropriate parties.

     F.   The consultant shall determine if aboveground high-voltage
          transmission lines and substations exist on the Property or within
          300 ft of the Property boundary. If


                                       52
<Page>

          so, two approximate measurements must be provided in the report and
          represented on appropriate site plans. These two measurements will
          include the distance from the overhead utility easement boundary to
          the nearest Property boundary, and the distance from the overhead
          utility easement boundary to the nearest occupied building on the
          Property. The consultant should not discuss electromagnetic radiation,
          EMF fields, or collect any EMF measurements.

II.  SURROUNDING PROPERTY INVESTIGATION:

     A.   Immediately adjacent properties will be visually evaluated, to the
          extent possible, for the presence of all of the items listed in
          Section I above. The current and historical use of all immediately
          adjacent properties will be discussed in the report and indicated on
          the Site Plan and/or Site Vicinity Plan as described in Section V of
          this scope of work.

     B.   The consultant will evaluate the potential for possible groundwater
          contamination that may have resulted from historical or current
          activities at surrounding properties. Historical or current releases
          on adjacent or nearby properties will be evaluated to determine
          whether they may have impacted the Property.

III. HISTORICAL REVIEW: Historical uses of the Property and surrounding
     properties shall be researched and will include, at a minimum, each of the
     items listed below. The historical use section of the report will begin
     with a synopsis of the history of the site and surrounding area, which will
     be supported by subsequent sections.

     A.   The consultant will conduct an investigation to determine the
          historical USE of the Property. The past use of the Property shall be
          identified back to 1940, or back to when the site was undeveloped. The
          consultant will discuss the methods used to obtain information from
          each of the sources below specifically addressing whether the
          particular source or item does or does not address the Property.

          1.   AERIAL PHOTOGRAPHS
               Historical aerial photographs must be reviewed to the dates
               stipulated above. The consultant will conduct a thorough
               examination of the aerial photographs with the intent to identify
               the present and past uses of the Property. Historical aerials of
               a scale greater than 1"=2,000' are unacceptable as the detail is
               not sufficient to determine usage of a property. If the proper
               scale is not obtainable, they should still be evaluated. However,
               other sources will be required to substantiate historical use of
               the Property. As stated above, the consultant should discuss the
               methods used and the agencies contacted even if they resulted in
               an inability to obtain this source. The consultant will include
               all original photographs deemed necessary or important to support
               the investigations and conclusions. At a minimum the most recent
               aerial, irrespective of scale, should be included in each copy of
               the report submitted. Original photographs should be included in
               the report, however, if they are unavailable, reproductions must
               be of color laser quality.


                                       53
<Page>

          2.   FIRE INSURANCE MAPS
               Sanborn or other fire insurance maps are required historical
               research for any Property where such mapping has occurred.
               Historical mapping will be researched back to the dates specified
               in Section III. A. The consultant will make every attempt to
               obtain such maps and, as stated above, will include a written
               description of the methods used to find these documents. Review
               of a single source for this item will not be acceptable, unless
               it can be definitively determined that the Property has not been
               mapped.

          3.   USGS TOPOGRAPHIC MAPS
               As stipulated elsewhere, a color USGS topographic map is a
               necessary component of this investigation. Current and historical
               USGS maps should also be reviewed to determine historical uses of
               the Property, and must be included in the report.

          4.   Review of other sources will be dependent upon the locale, and/or
               the availability of specified sources listed above. These sources
               will include, but are not limited to: historical city
               directories, historical registries, zoning departments, etc., as
               deemed necessary by the consultant. Again, a discussion of the
               attempts and successes of all research will be discussed in the
               report. The area surrounding the property will be investigated in
               a manner consistent with all aspects of this scope of work.

     B.   The report should include an investigation into the previous OWNERSHIP
          of the Property for at least the last fifty (50) years (or as required
          by state law) and any ownership which may have resulted in
          contamination of the Property investigated. This does not necessarily
          mean that a chain of title search must be conducted. However, it is
          recognized that this may be the only source available to assess
          historical ownership for some properties.

IV.  REGULATORY RECORDS REVIEW

     A.   DATABASE REVIEW
         The consultant will obtain a database report from a professional
         database mapping service. The net result will provide a map identifying
         the Property, and all of the properties identified as being listed on
         any of the databases listed below, that are within a one-mile distance
         of the outer boundaries of the Property.

          1.   Applicable Federal databases will include, but are not limited
               to: the NPL list, CERCLIS and CERC-NFRAP lists, RCRA TSD list,
               RCRA LQG and SQG lists, CORRACTS, RAATS, HMIRS, ERNS, TRIS, TSCA,
               FINDS, and any other database that the consultant believes should
               be included.

          2.   Applicable State databases will include the state equivalent NPL
               and CERCLIS lists; hazardous waste sites and hazardous waste
               generators list, landfill lists, registered underground and
               leaking underground storage tank


                                       54
<Page>

               lists, and any other State specific database that the consultant
               believes should be included.

          3.   Local databases will include those maintained by fire
               departments, building departments, local environmental agencies,
               local health departments, and any other local agencies that the
               consultant determines should be included.

     B.   DIRECT INQUIRY
          The consultant will also conduct all appropriate inquiry to all
          Federal, State, and Local regulatory agencies. Direct inquiry shall be
          made to request a search and evaluation of existing files regarding
          the Property and surrounding properties. This is to be done in
          conjunction with the database review discussed in Section IV. A.
          above. Direct inquiry will not be limited to a single FOIA request
          letter or phone call to the agency. At a minimum, the consultant will
          make inquiry to each agency by phone to determine the availability of
          information and the timing related to a review of the file. A direct
          review of available files, whether in person at the agency or via
          review of information the agency provides verbally or by mail is also
          required in accordance with Section IV. C. below. In all cases, each
          contact shall be documented so that all appropriate inquiry can be
          demonstrated.

     C.   REVIEW OF AVAILABLE REGULATORY FILES
          The consultant will also evaluate any files identified on any of the
          databases, or as a result to the direct inquiry, that presents a
          potential environmental impact or concern to the Property. Consultant
          should understand that a regulatory file review is a necessary
          component of this investigation in almost every case. Therefore, it is
          inappropriate to assume that a change order would be granted to
          conduct this visit and review. If it is not possible to conduct the
          file review, due to obstructions presented by an agency, the
          consultant will contact the appropriate Northwestern Mutual Life
          Environmental Analyst as soon as possible to explain why this review
          will not be possible. A determination will then be made regarding the
          need for such a review. It will be the consultant's responsibility to
          understand the location of the appropriate agencies and their policies
          regarding inquiries at the time the proposal is written.

     D.   Consultant will determine the existence or proposal of an
          "environmental" property disclosure statute for the state in which the
          Property is located (e.g. RPTA in Illinois and ISRA in New Jersey) and
          provide the citation for that statute. Consultant will not be
          responsible for providing a legal interpretation of the statute.

V.   REPORT REQUIREMENTS

     A.   The report will contain the following provisions and statements within
          the body of the report. They may be included in a cover letter, but
          must also be included within the text of the report. They shall not be
          qualified with other language, unless approved in advance by
          Northwestern Mutual Life.


                                       55
<Page>

          1.   The work and the report are in accordance with industry-accepted
               standards and applicable law.

          2.   The consultant will address the report to Northwestern Mutual
               Life.

          3.   The consultant will specifically state that it is reasonable for
               Northwestern Mutual Life to rely upon the extent, character, and
               conclusions of the report. Reliance will also be provided to the
               borrower (in the event of a loan) or joint venture partner using
               the following statement:

               This Environmental Site Assessment is based on the information
               collected by [CONSULTANT] during this investigation. [CONSULTANT]
               cannot guarantee the accuracy or completeness of governmental
               records. This report is prepared for the sole use and benefit of
               The Northwestern Mutual Life Insurance Company and [BORROWER OR
               JOINT VENTURE PARTNER] and it is reasonable for Northwestern and
               [BORROWER OR JOINT VENTURE PARTNER] to rely upon the extent,
               character, and conclusions of this report. Additionally,
               [BORROWER OR JOINT VENTURE PARTNER] shall also be entitled to
               rely upon this report on the condition that the [BORROWER OR
               JOINT VENTURE PARTNER] agrees that [CONSULTANT]'s liability to
               the [BORROWER OR JOINT VENTURE PARTNER] shall be limited to the
               greater of $50,000 or the cost of the report. The scope of work
               was conducted as outlined in our proposal dated MONTH, DAY, YEAR,
               and in accordance with the requirements set forth in The
               Northwestern Mutual Life Insurance Company Environmental Site
               Assessment Scope of Work dated [SEE BOTTOM OF SOW] and in general
               accordance with ASTM Standard Practice E 1527. The services
               conducted by [CONSULTANT] have been rendered in a manner
               consistent with the level of skill and care ordinarily exercised
               by members of the profession currently practicing under similar
               conditions.

          4.   The consultant will not title the report preliminary, limited,
               Phase I, or use any other description within the report that
               implies or expresses that the degree of investigation was limited
               by any party other than the consultant.

          5.   The report will not include the term "recognized environmental
               condition".

          6.   In the conclusions section of the report, the consultant will
               conclude with the following statement: "[CONSULTANT] has prepared
               this report in accordance with industry standards, applicable
               law, and the Northwestern Mutual Life Scope of Work for
               Environmental Assessments. [CONSULTANT] concludes that it is
               reasonable for Northwestern to conclude that, except as expressly
               set forth below, there are no environmental impacts or concerns
               at the Property as stipulated by the Northwestern Mutual Life
               Scope of Work and industry accepted standards." The items
               identified will then be described and quantified. Because the
               consultant is not aware of all aspects of the financial
               transaction, including financing, it is not appropriate and the
               consultant shall not assign a risk level or potential to the
               identified issue. Recommendations will not be offered within the
               report.


                                       56
<Page>

     B.   The report may be formatted in a manner that suits the consultant with
          the following constraints:

          1.   The final report will include, at a minimum, an introduction
               section, a historical review section with a synopsis of the
               history of the Property, a site inspection section, a regulatory
               review section, and a conclusions section.

          2.   The report will have page numbers and a Table of Contents.

          3.   All appendices will be page numbered. Each appendix will include
               tabbed section dividers separating each appendix that is part of
               the report. Draft reports will also be submitted in this fashion.
               Questionnaires, summary sheets, or any other items the consultant
               deems useful may be included in the report, however, they should
               be included in the appendix. These items, as well as all other
               appendix materials, must be filled out completely and legibly
               with all blank spaces filled in, including N/A where appropriate,
               with legible signatures and dates included.

          4.   Mandatory figures to be included in each report are:

               a.   a COLOR USGS topographic map with the property boundaries
                    identified;
               b.   a Site Vicinity Plan identifying surrounding property uses;
               c.   a site plan providing detail and descriptions of all areas
                    of the Property including buildings, paved areas, property
                    boundaries, transformers, environmental impacts or concerns,
                    etc.
               d.   a color copy of the United States Department of the Interior
                    National Wetland Inventory Map, with the Property clearly
                    denoted.

          5.   The report will include the resume(s) of the environmental
               professional(s) who performed any part of this assessment. Their
               resumes should include documentation of the proper licensing,
               training and registration that was required to perform the
               necessary work (e.g. asbestos, radon, lead paint). The resume
               will include a description of the education (with degree and
               school), and the number of years of experience performing
               environmental site assessments.

          6.   As discussed in Section III, the report will contain
               representative original color photographs (or color copies of
               photographs) of the properties and any areas of concern. The
               assessor will take photographs of the Property annotating any
               areas of environmental impact or concern that is discussed in the
               report.

     C.   As an appendix to the report, the consultant will include satisfactory
          evidence of professional liability insurance, including errors and
          omissions coverage. Evidence of this will be in the term of a
          certificate of insurance listing Northwestern as a CERTIFICATE HOLDER.
          Northwestern DOES NOT need to be named as an "additional insured". The
          certificate must specifically state the project name and location in
          the comments section. If any type of investigation is performed that
          is beyond this scope of work, the appropriate Northwestern Mutual Life
          environmental analyst should be contacted to discuss the need for
          additional insurance requirements.


                                       57
<Page>

     D.   Each report will include a statement that the investigation has made
          reasonable and appropriate inquiry to determine whether other
          environmental reports have been previously produced pertaining to the
          Property, and that all such environmental reports pertaining to the
          Property produced by, for, or in the possession of the Borrower, the
          current owner, or any governmental agency have been reviewed and
          analyzed within the context of this scope of work. Any such report
          reviewed shall be identified in the report by report name, responsible
          consultant, and report date. Types of environmental reports would
          include, but not be limited to: previous environmental site
          assessments, additional subsurface investigations or evaluations,
          interior or exterior building material surveys, indoor air quality
          surveys, drinking water tests, wetlands evaluations, etc.

VI.  SAMPLING AND ANALYTICAL ACTIVITIES
     It is understood that soil and groundwater testing will not be conducted as
     part of a general environmental site assessment. If the consultant
     identifies a condition at the property which may warrant a soil or
     groundwater investigation, the consultant will contact the appropriate
     Northwestern Mutual Life Environmental Analyst as soon as possible to
     discuss the condition and evaluate the need to perform additional testing
     beyond the parameters of this scope of work. In the event soil or
     groundwater sampling activities are authorized, Northwestern Mutual Life
     expects the consultant to be familiar with the local geological conditions
     in the area where the property is located and to select the appropriate
     equipment and work crew necessary to perform any needed sampling under the
     prevalent conditions. Northwestern Mutual Life also expects the consultant
     to select sampling and analytical methods according to requirements set
     forth in appropriate governmental regulations, ordinances, guidelines,
     etc., so that the analytical results obtained may be compared directly to
     the appropriate regulatory levels and guidelines. Sampling and analytical
     methods selected by the consultant must yield results with limits of
     detection which are at least one order of magnitude less than the pertinent
     guideline, or less as specified in any governmental regulations or
     guidelines.


                                       58
<Page>

                                   APPENDIX A

                                    ASBESTOS

An asbestos survey shall be performed as part of all environmental site
assessments. The only exception would be if a previous survey has been performed
on the Property by the consultant selected to perform the environmental site
assessment, and meets, at a minimum, the scope of work presented herein and that
consultant allows Northwestern Mutual Life to rely upon the results of the
investigation. Previous asbestos assessments may be considered if a different
consultant performed the assessment, however, the results of said previous
assessment will be verified by additional surveying and sampling in accordance
with the scope of work presented herein. It is acceptable to assume nonfriable
materials are asbestos-containing, however, they must be specifically included
and addressed in an operations and maintenance program. Suspect friable and
nonfriable ACM shall be sampled and reported according to the following scope:

     A.   The date(s) the inspection/sampling was performed.

     B.   A description of construction, mechanical and electrical systems at
          the Property based on the site visit and a review of construction
          documents (as-built drawings, specifications, change orders, etc.), as
          they relate to the presence of asbestos.

     C.   A description of the history of the Property, including the dates of
          construction and the dates and scopes of major remodeling work. D. A
          description of any asbestos abatement that was performed at the
          Property and an evaluation of the work's compliance with governing
          codes, statutes, regulations and ordinances.

     E.   A description of the suspect materials throughout the Property and a
          discussion of the sampling strategy. The description should include
          roofing materials, piles of debris, and interior building materials.

     F.   The condition of any and all asbestos-containing, or assumed
          asbestos-containing, material at the Property will be evaluated and
          presented in the report.

     G.   A description of the process for inspection and representative
          sampling for asbestos-containing materials.

     H.   An estimate of the total quantity of each ACM (friable and nonfriable)
          within the entire facility, including each tenant space, mechanical
          area, office area, maintenance area and common area.

     I.   The signature of the responsible individual. The individual shall
          certify that the sampling and report has been conducted and prepared
          according to the licensing requirements of the State in which the
          Property is located.

     J.   The consultant should select appropriate analytical methods for the
          material being sampled and should provide definitive results. All
          laboratory reports and appropriate chain of custody documentation will
          be included in the report.

<Page>

     K.   The asbestos survey shall be performed by personnel trained in
          accordance with the most recent federal, state and local requirements,
          including but not limited to, AHERA. An AHERA inspection is not
          required unless specifically requested by Northwestern Mutual Life for
          a specific project.

<Page>

                                   APPENDIX B

                                      RADON

A radon survey shall be performed as part of all environmental site assessments.
The only exception would be if a previous survey has been performed on the
Property by the consultant selected to perform the environmental site
assessment, and meets, at a minimum, the scope of work presented herein and that
consultant allows Northwestern Mutual Life to rely upon the data provided.
Previous radon surveys prepared by a different consultant may be considered,
however, the results of said previous assessment will be verified by additional
surveying and sampling in accordance with the scope of work presented herein.

     A.   Charcoal canisters are to be used unless other methodology is approved
          in advance by Northwestern Mutual Life. The sampling time will be
          based on recommendations prescribed by the manufacturer or the
          laboratory.

     B.   Consultant will provide specific consideration to local atmospheric
          conditions and maximum exposure times.

     C.   A licensed individual in the State where the Property is located will
          collect all samples, unless the State does not have a licensing
          requirement.

     D.   The analytical laboratory will be certified and/or licensed in States
          requiring such certification or licensing.

     E.   Proof of all certifications and licenses shall be included in the
          report.

     F.   Sampling Requirements:

          1.   For residential properties, the evaluation of radon in the
               Property shall be based on testing, at a minimum, ten percent of
               the at or below grade occupied dwelling units with an operational
               HVAC system, or one test per free-standing building where
               residential dwelling units are located, whichever is greater. The
               minimum number of samples will be three. Occupied dwellings do
               not include clubhouses, maintenance spaces or buildings, or
               garages.

          2.   For all other non-residential properties, the evaluation of radon
               will also be based on testing. One sample per building on the
               lowest occupied floor will be collected. If sub-grade garage
               floors are present, they should be evaluated. A minimum of three
               samples will be collected.

          3.   For undeveloped land, the consultant will evaluate the EPA map of
               potential elevated radon concentrations, and county health
               surveys, at a minimum. The consultant will also consider local
               geology and its propensity for creating radon gases, contact
               local health departments, and will comment on the

<Page>

               consultant's experiences in the vicinity and will utilize local
               knowledge of the area.

<Page>

                                   APPENDIX C

                             LEAD IN DRINKING WATER

A lead in drinking water survey shall be performed as part of all environmental
site assessments. The only exception would be if a previous survey has been
performed on the Property by the consultant selected to perform the
environmental site assessment, and meets, at a minimum, the scope of work
presented herein, and that consultant allows Northwestern Mutual Life to rely
upon the data provided. Previous lead in drinking water surveys prepared by a
different consultant may be considered, however, the results of said previous
assessment will be verified by additional surveying and sampling in accordance
with the scope of work presented herein. Samples of solder will not be an
acceptable form of assessing lead in water. The results of all samples will be
compared to the Clean Water Act standard of no more than ten percent of the
samples exceed 0.015 mg/L (ppm) of lead, as established in 40 CFR Part 141.80.

     A.   Drinking water fountains shall be compared to the EPA listing of
          Drinking Water Coolers That Are Not Lead Free (Federal Register dated
          January 18, 1990). Water from refrigerated drinking water fountains
          will not be sampled and analyzed for lead content.

     B.   Drinking water sampling will be conducted on all developed properties
          in the manner prescribed below. Samples will be collected within the
          constraints established by any Federal, State, or Local law, statute,
          regulation, or recommendation, or the guidelines of this scope of
          work, whichever is more stringent.

          1.   Sampling Strategies - The following sampling strategies will be
               incorporated unless a different scope has been approved in
               advance by Northwestern Mutual Life.

               a.   Non-residential properties will have one sample collected
                    per 50,000 square feet, plus the nearest available point at
                    which the water source enters the Property. A maximum of 10
                    and a minimum of 3 samples will be collected.

               b.   Residential properties will be sampled according to the
                    following matrix:

<Table>
<Caption>
                    Number of Dwelling Units     Number of Samples
                    ------------------------     -----------------
<S>                                              <C>
                    less than 50 units           10 minimum or one per building,
                                                 whichever is greater

                    50-200 units                 15 minimum or one per building,
                                                 whichever is greater

                    greater than 200 units       20 minimum or one per building,
                                                 whichever is greater
</Table>

<Page>

               c.   In all instances, water samples shall be taken only from
                    taps that are in frequent use for drinking purposes. Do not
                    collect water samples from sources with low flow (e.g.
                    fountains) or infrequent use (e.g. model or vacant apartment
                    units, clubhouses, etc.). If the Property has been abandoned
                    for an extended period of time, the water distribution
                    system must be completely flushed prior to sampling.

          2.   Sampling Methodologies

               a.   Samples will be collected as a "first draw" sampling.
                    Consultant will not sample the water unless it can be
                    determined that the water has stood motionless in the pipes
                    for no less than six hours, and no more than eighteen hours.
                    Consultant will coordinate with the property manager, and
                    will tag faucets selected for sampling, to ensure that the
                    proper times have elapsed.

               b.   One liter of water will be collected. Sampling containers
                    will be preserved according to EPA protocol, industry
                    accepted standards, and/or laboratory requirements.

               c.   Samples will be labeled and logged at the time of sampling,
                    and will be delivered to a laboratory no more than 48 hours
                    after sampling. Appropriate chain of custody forms will be
                    used to indicate all exchanges of possession in the samples
                    from the original sampler to the laboratory analyst. These
                    forms will be included as an appendix to the report.

               d.   All samples will be analyzed within the constraints of 40
                    CFR 141.89 and 141.23, as well as any other State or local
                    requirements. Methodologies prescribed in 141.23 include EPA
                    methods 200.8 (ICP-Mass Spec), 200.9 (AA-Platform), or 3117B
                    (AA-furnace). The method detection limit will be 0.001 mg/L
                    (ppm). Calibration results will be included within the final
                    laboratory report.

               e.   The laboratory conducting the analysis will have all
                    appropriate Federal, State, and Local certifications or
                    licenses.

<Page>

                                   APPENDIX D

                                LEAD BASED PAINT

The presence of lead based paint will be determined as part of all environmental
site assessments. It is acceptable to render a determination that residential,
interior paint which was applied after the Consumer Product Safety Commission
ban on lead based paint (1979) does not contain lead.

     A.   Sampling will be limited to paint chip sampling and will include all
          layers of paint at a property. Swab tests will not be acceptable
          testing. Previous lead based paint chip surveys will be relied upon if
          they were performed by the consultant selected to perform the
          environmental site assessment. Additionally, any previous survey
          should, at a minimum, meet the scope of work presented herein, and
          Northwestern Mutual Life must be allowed to rely upon the data
          provided.

     B.   XRF surveys will not be conducted unless previously specified by
          Northwestern Mutual Life. Previous XRF assessments for lead based
          paint may only be relied upon if the consultant conducts sufficient
          sampling to determine that the results of the testing are accurate.

     C.   Paint chip sampling activities must be sufficient to determine an
          estimated amount of lead based paint present in the Property. Sampling
          strategies will be determined by the consultant but will include, at a
          minimum, three samples of each interior and exterior homogeneous
          application. Sampling of chipped and peeling paint is required in any
          building not meeting the 1979 CPSC residential ban. Sampling will be
          in accordance with any Federal, State, or Local requirements. The
          consultant will not collect samples of paint that is applied to
          parking lots, parking blocks, or other limited exterior application.

<Page>

                                    EXHIBIT A

<Table>
<Caption>
                                                    NUMBER                                      ALLOCATED LOAN
PROJECT                    LOCATION                OF UNITS        PARKING     ACRES           AMOUNT/PERCENTAGE
-------                    --------                --------        -------     -----           -----------------

<S>                        <C>                      <C>            <C>        <C>         <C>             <C>
Golf Brook*                Orlando, FL               195             317       16.25      $14,400,000      (20.00%)
[NM Loan 332021]

Sabal Park**               Orlando, FL               162             312       13.50        8,000,000      (11.10%)

Park Place                 Lexington, KY             464             938       40.00       25,500,000      (35.40%)
[NM Loans 332128
and 332129]

Willows (I & II)           Louisville, KY            262             508       16.35       13,000,000      (18.10%)

Park at the Willows        Louisville, KY             48             170         2.8        1,700,000       (2.40%)


Willow Lake                Indianapolis, IN          207             367       22.00        9,400,000      (13.00%)
NM Loan 332064]                                    -----           -----      ------      -----------     ---------

                           TOTALS                  1,338           2,612      110.90      $72,000,000     (100.00%)
                           ----------------------------------------------------------------------------------------
</Table>

* Indicates Northwestern Mutual currently has a mortgage loan [NM Loan 332021]
on the Golf Brook Project, which existing mortgage loan documents will be
amended and restated for the purpose of this Loan. Further, it is understood by
the Borrower and Lender that the Golf Brook Project Allocated Loan Amount (as
listed above) will be reduced by the Already Advanced Golf Brook Loan Amount.

**Indicates Nationwide Life, as an outside third party lender, currently has a
mortgage loan on the Sabal Park Project, which existing mortgage loan documents
will be amended and restated for the purpose of this Loan.