Exhibit 10.8





 


Freddie Mac Loan
Number: 708060749


Property Name: Village
Green of Ann Arbor


 


MULTIFAMILY
NOTE


(CME)


 


MULTISTATE
- FIXED RATE


DEFEASANCE


 


(Revised
2-2-2012)


 


	US $43,200,000.00	Effective Date: as of September 12,
    2012 


 


FOR VALUE RECEIVED,
VILLAGE GREEN OF ANN ARBOR ASSOCIATES, LLC, a Michigan limited liability Company (together with such party’s or parties’
successors and assigns, “Borrower” jointly and severally (if more than
one) promises to pay to the order of KEYCORP REAL ESTATE CAPITAL MARKETS, INC., an Ohio corporation, the principal sum
of $43,200,000.00, with interest on the unpaid principal balance, as hereinafter provided.


 


1.            Defined
Terms.


 


(a)           As
used in this Note:


 


"Base
Recourse" means a portion of the Indebtedness equal to 0% of the original principal
balance of this Note.


 


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


 


"Cut-off
Date" means the 12th Installment Due
Date.


 


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


 


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


 


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


 


"Fixed
Interest Rate"
means the annual interest rate of 3.92%.


 




    	 



    	 



    

 


"Installment
Due Date" means, for any monthly installment of interest-only or principal and interest,
the date on which such monthly installment is due and payable pursuant to Section 3 of this
Note. The "First Installment Due Date" under this Note is November 1,
2012.


 


"Lender"
means the holder from time to time of this Note.


 


"Loan"
means the loan evidenced by this Note.


 


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


 


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


 


"Maturity
Date" means the earlier of (i) October 1, 2022 ("Scheduled
Maturity Date"), or (ii) the date on which the unpaid principal balance of
this Note becomes due and payable by acceleration or otherwise pursuant to the Loan Documents or the exercise by Lender of any
right or remedy under any Loan Document; provided, however, that if the unpaid principal balance of this Note becomes due and
payable by acceleration but such acceleration is rendered null and void and of no further force and effect by operation of law
or agreement by Lender, such acceleration will have no effect on the Maturity Date.


 


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


 


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


 


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


 


"Window
Period" means the 3 consecutive calendar month
period prior to the Scheduled Maturity Date.


 




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"Yield
Maintenance Expiration Date" means April 1, 2022.


 


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


 


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


 


2.            Address
for Payment. All payments due under this Note will be payable at KeyBank Real Estate Capital,
P.O. Box 145404, Cincinnati, Ohio, 45250, or such other
place as may be designated by Notice to Borrower from or on behalf of Lender.


 


3.            Payments.


 


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


 


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


 


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


 




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(d)           (i)          Beginning
on the First Installment Due Date, and continuing until and including the monthly installment due on October 1, 2014, accrued
interest-only will be payable by Borrower in consecutive monthly installments due and payable on the first day of each calendar
month. The amount of each monthly installment of interest-only payable pursuant to this Section 3(d)(i) on an Installment Due
Date will vary, and will equal $4,704.00000 multiplied by the number of days in the month prior to the Installment Due Date.


 


(ii)          Beginning
on November I , 2014, and continuing until and including the monthly installment due on the Maturity Date, principal and accrued
interest will be payable by Borrower in consecutive monthly installments due and payable on the first day of each calendar month.
The amount of the monthly installment of principal and interest payable pursuant to this Section 3(d)(ii) on an Installment Due
Date will be $204,255,96.


 


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


 


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


 


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


 


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


 


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


 




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


 





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


 


7.           Late
Charge.


 


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


 


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


 


8            Default
Rate.


 


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


 




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


 


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


 


9.            Limits
on Personal Liability.


 


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


 


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


 


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


 




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


or
similar judicial proceeding.


 


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


 


(iii)         Either
of the following occurs:


 


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


 


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


 


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


 


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


 





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


 


(vi)         Borrower
fails to comply with any provision of Section 6. l 3(a)(iii) through (xxvi) of the Loan Agreement or any SPE Equity Owner fails
to comply with any provision of Section 6.13(b)(iii) through (v) of the Loan Agreement (subject to possible full recourse liability
as set forth in Section 9(f)(ii)).


 




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(vii)         Any
of the following Transfers occurs:


 


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


 


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


 


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


 


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


 


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


 


(i)           Borrower
will be personally liable for the performance of and compliance with all of Borrower's obligations
under Sections 6.12 and 10.02(b) of the Loan Agreement (relating to environmental matters).


 


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


 


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


 


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


 


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


 




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


 


(ii)          Borrower
fails to comply with any provision of Section 6. l 3(a)(iii) through (xxvi) of the Loan Agreement or any SPE Equity Owner fails
to comply with any provision of Section 6.13(b)(iii) through (v) of the Loan Agreement and a court of competent jurisdiction holds
or determines that such failure or combination of failures is the basis, in whole or in part, for the substantive consolidation
of the assets and liabilities of Borrower or any SPE Equity Owner with the assets and liabilities of a debtor pursuant to Title
11 of the Bankruptcy Code.


 


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


 


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


 


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


 


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


 


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


 


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


 




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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 




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


 


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


 


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


 


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


 


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


 




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


 


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


 


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


 


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


 


(B)     
   the product obtained by multiplying:


 


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

by


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

by


(3)          the
Present Value Factor.


 


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


 


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


 


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


 


Assumed
Reinvestment Rate: 1/12 of the yield rate expressed as a decimal to 2 digits, as of the close of the trading session which
is 5 Business Days before the Prepayment Date, found among the Daily Treasury Yield Curve Rates, commonly known as Constant Maturity
Treasury ("CMT") rates, with a maturity equal to the remaining Yield Maintenance Period, as reported on the U.S.
Department of the Treasury website.


 




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If no
published CMT maturity matches the remaining Yield Maintenance Period, Lender will interpolate as a decimal to 2 digits the yield
rate between (a) the CMT with a maturity closest to, but shorter than, the remaining Yield Maintenance Period, and (b) the CMT
with a maturity closest to, but longer than, the remaining Yield Maintenance Period, as follows:


 





 


		A =	yield
                                         rate for the CMT with a maturity shorter than the remaining Yield Maintenance Period
		B=	yield rate for the CMT with a maturity
                                         longer than the remaining Yield Maintenance Period
		C
                              =	number
                                         of months to maturity for the CMT maturity shorter than the remaining Yield Maintenance
                                         Period
		D =	number
                                         of months to maturity for the CMT maturity longer than the remaining Yield Maintenance
                                         Period
		E =	number
                                         of months remaining in the Yield Maintenance Period



 


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


 


The Assumed
Reinvestment Rate may be a positive number, a negative number or zero.


 


If the
Assumed Reinvestment Rate is a positive number or a negative number, Lender will calculate the prepayment premium using such positive
number or negative number, as appropriate, as the Assumed Reinvestment Rate in 10(t)(i)(B)(2) and in the calculation of the Present
Value Factor.


 


If the
Assumed Reinvestment Rate is zero, Lender will calculate the prepayment premium twice as set forth in (I) and (II) below and will
average the results to determine the actual prepayment premium.


 


(I)           Lender
will calculate the prepayment premium using an Assumed Reinvestment Rate of one basis point (+0.01%) in Section 10(t)(i)(B)(2)
and in the calculation of the Present Value Factor.


 


(II)          Lender
will calculate the prepayment premium using an Assumed Reinvestment Rate of negative one basis point (-0.01%) in Section 10(t)(i)(B)(2)
and in the calculation of the Present Value Factor.


 




    	Multifamily Multistate Fixed Rate Note (CME)
Defeasance	Page 13



    	 



    

 


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


 





 


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


 


ARR =
Assumed Reinvestment Rate


 


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


 


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


 


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


 


(i)           Borrower
recognizes that any prepayment of any of the unpaid principal balance of this Note, whether voluntary or involuntary or resulting
from an Event of Default by Borrower, will result in Lender's incurring loss, including reinvestment loss, additional expense
and frustration or impairment of Lender's ability to meet its commitments to third parties. Borrower agrees to pay to Lender upon
demand damages for the detriment caused by any prepayment, and agrees that it is extremely difficult and impractica1 to ascertain
the extent of such damages. Borrower therefore acknowledges and agrees that the formula for calculating prepayment premiums set
forth in this Note represents a reasonable estimate of the damages Lender will incur because of a prepayment. Borrower further
acknowledges that the prepayment premium provisions of this Note are a material part of the consideration for the Loan, and that
the terms of this Note are in other respects more favorable to Borrower as a result of the Borrower's voluntary agreement to the
prepayment premium provisions.


 




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


 


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


 


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


 


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


 


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


 


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


 






    	Multifamily Multistate Fixed Rate Note (CME)
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(f)           Notwithstanding
Section 11 (e) above, following the end of the Lockout Period and the Defeasance Period, Borrower may voluntarily prepay all of
the unpaid principal balance of this Note on a Business Day other than an Installment Due Date if Borrower provides Lender with
the Notice set forth in Section 1l (e) and meets the other requirements set forth in this Section 11 (f). Borrower acknowledges
that Lender has agreed that Borrower may prepay principal on a Business Day other than an Installment Due Date only because Lender
will deem any prepayment received by Lender on any day other than an Installment Due Date to have been received on the Installment
Due Date immediately following such prepayment and Borrower will be responsible for all interest that would have been due if the
prepayment had actually been made on the Installment Due Date immediately following such prepayment.


 


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


 


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


 


(i)           Borrower
recognizes that any prepayment of any of the unpaid principal balance of this Note, whether voluntary or involuntary or resulting
from an Event of Default by Borrower, will result in Lender's incurring loss, including reinvestment loss, additional expense
and frustration or impairment of Lender's ability to meet its commitments to third parties. Borrower agrees to pay to Lender upon
demand damages for the detriment caused by any prepayment, and agrees that it is extremely difficult and impractical to ascertain
the extent of such damages. Borrower therefore acknowledges and agrees that the formula for calculating prepayment premiums set
forth in Section 1l(c) of this Note represents a reasonable estimate of the damages Lender will incur because of a prepayment.
Borrower further acknowledges that the lockout and prepayment premium provisions of this Note are a material part of the consideration
for the Loan, and that the terms of this Note are in other respects more favorable to Borrower as a result of the Borrower's voluntary
agreement to the prepayment


premium
provisions.


 




    	Multifamily Multistate Fixed Rate Note (CME)
Defeasance	Page 16



    	 



    

 


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


 


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


 


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


 


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


 


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


 


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


 


If Borrower
obtains a release of the Mortgaged Property from the lien of the Security Instrument pursuant to Section 11.12 of the Loan Agreement,
Borrower will have no personal liability under this Note or the Pledge Agreement for the repayment of the Indebtedness or for
the performance of any other obligations of Borrower under this Note or the Pledge Agreement (other than any liability under Section
6. 12 or Section 10.02 of the Loan Agreement for events that occur prior to the Defeasance Closing Date, whether discovered before
or after the Defeasance Closing Date), and Lender's only recourse for the satisfaction of the Indebtedness and the performance
of such obligations will be Lender's exercise of its rights and remedies with respect to the collateral held by Lender under the
Pledge Agreement as security for the Indebtedness.


 


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


 


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


 




    	Multifamily Multistate Fixed Rate Note (CME)
Defeasance	Page 17



    	 



    

 


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


 


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


 


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


 


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


 




    	Multifamily Multistate Fixed Rate Note (CME)
Defeasance	Page 18



    	 



    

 


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


 


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


 


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


 


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


 


21.          Notices;
Written Modifications.


 


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


 


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


 


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


 


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


 




    	Multifamily Multistate Fixed Rate Note (CME)
Defeasance	Page 19



    	 



    

 


24.          State-Specific
Provisions. N/A.


 


25.          Attached
Riders. The following Riders are attached to this Note:


 


		•	Rider to Multifamily Note
                                         (CME) Recycled Borrower and/or Recycled SPE Equity Owner



		•	Rider to Multifamily Note
                                         (CME and Portfolio) Recourse for Non- conforming Property



 


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


 


[__]   Exhibit
A      Modifications to Multifamily Note


 


[DOCUMENT
EXECUTION OCCURS ON THE FOLLOWING PAGE]


 




    	Multifamily Multistate Fixed Rate Note (CME)
Defeasance	Page 20



    	 



    

 


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


 


	 	VILLAGE GREEN OF ANN ARBOR ASSOCIATES, LLC,
	 	a Michigan limited liability company
	 	 	 
	 	By:	JH VILLAGE GREEN LLC,
	 	 	a Delaware limited liability company 
	 	 	Co-Manager


 


	 	 	By:	/s/
    Jonathan Holtzman
	 	 	 	Jonathan Holtzman 
	 	 	 	Sole Member 


 


Borrower’s
Employer ID Number: 38-2740759


 




    	Multifamily Multistate Fixed Rate Note (CME)
Defeasance	Page 21



    	 



    

 


RIDER
TO MULTIFAMILY NOTE


(CME)


 


RECYCLED
BORROWER AND/OR RECYCLED SPE EQUITY OWNER


 


(Revised
1-11-2012)


 


The
following changes are made to the Note which precedes this Rider:


 


A.           The
following is added as a new subsection to Section 9(c):


 


Any of
the Underwriting Representations set forth in Section 5.26 (a) of the Loan Agreement or any of the Separateness Representations
set forth in Section 5.26(b) of the Loan Agreement are false or misleading in any material respect.


 




    	Rider to Multifamily Note (CME and Portfolio)
Recourse for Non-Conforming Property	 



    	 



    

 


RIDER
TO MULTIFAMILY NOTE


(CME
AND PORTFOLIO)


 


RECOURSE
FOR NON-CONFORMING PROPERTY


 


(Revised
9-1-2011)


 


The
following changes are made to the Note which precedes this Rider:


 


A.           The
following is added as a new subsection to Section 9(c):


 


A casualty occurs affecting
the Mortgaged Property, which results in loss or damage to Lender because of either of the following:


 


(A)          (1)
the Mortgaged Property is legally non-conforming under the applicable zoning laws, ordinances and/or regulations in the
Property Jurisdiction ("Zoning Code"), (2) the affected Improvements cannot be rebuilt to their pre-casualty
condition under the terms of the Zoning Code, and (3) the Hazard Insurance proceeds available to Lender under the terms of the
Loan Agreement are insufficient to repay the Indebtedness in full.


 


(B)           Borrower
fails to commence and diligently pursue completion of any Restoration within the time frame required by the Zoning Code and any
permits issued pursuant thereto as necessary to allow the Restoration to the pre-casualty condition described in (A)(2) above.


 




    	Rider to Multifamily Note (CME and Portfolio)
Recourse for Non-Conforming Property	 



    	 



    

 


EXHIBIT
A


 


MODIFICATIONS
TO MULTIFAMILY NOTE


 


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


 


NONE


 




    	Multifamily Multistate Fixed Rate Note (CME)
Defeasance	Page A-1



    	 



    

 


FHLMC
Loan No. 708060749


 


ENDORSEMENT


 


TO
MULTIFAMILY NOTE (CME)


 


dated
as of September 12, 2012,


 


given
by


 


VILLAGE
GREEN OF ANN ARBOR ASSOCIATES, LLC,


a
Michigan limited liability company,


 


to


 


KEYCORP
REAL ESTATE CAPITAL MARKETS, INC.,


an
Ohio corporation,


 


in
the original principal amount of $43,200,000.00


 










 



 


Pay
to the order of FEDERAL HOME LOAN MORTGAGE CORPORATION, without recourse.


 


	 	KEYCORP REAL ESTATE CAPITAL MARKETS,
    INC.
	 	an Ohio corporation
	 	 	 	 
	 	 	By:	/s/ Randall
    W. Conley 
	 	 	 	Randall W. Conley
	 	 	 	Vice President


 


Date:
as of September 12 , 2012