exv10w2






Exhibit 10.2




MASTER CROSS-COLLATERALIZATION AGREEMENT 




(Revision Date 02/09/2009)




     THIS MASTER CROSS-COLLATERALIZATION AGREEMENT (this “Agreement”) is made as of the 24th day of
April, 2009 by DEUTSCHE BANK BERKSHIRE MORTGAGE, INC., a Delaware corporation (“Lender”), those
parties identified on Exhibit A — Schedule 1 attached hereto (each referred to
individually as a “Grantor” and all referred to collectively as the “Grantors”) and Shady Grove
Road Financing, LLC, a Delaware limited liability company (the “Traville Borrower”).



RECITALS





	A.	 	Lender has agreed to make a loan to each of those parties identified on Exhibit A —
Schedule 2 attached hereto (each referred to individually as a “Borrower” and all referred
to collectively as the “Borrowers”) (each a “Loan” and collectively, the “Loans”) in the
original principal amounts set forth on Exhibit A — Schedule 2 attached hereto.
	 
	B.	 	Included among the Loans is a Loan to the Traville Borrower, as more fully set forth on
Exhibit A — Schedule 2 (the “Traville Loan”).
	 
	C.	 	Each Loan (other than the Traville Loan) is secured by a Multifamily Mortgage/Deed of
Trust/Deed to Secure Debt, Assignment of Rents and Security Agreement (the “Security
Instruments”), and the Traville Loan is guaranteed by AvalonBay Traville, LLC, a Maryland
limited liability company (the “IDOT Grantor”) pursuant to a Guaranty (the “IDOT Guaranty”),
which IDOT Guaranty is secured by a Multifamily Indemnity Deed of Trust, Assignment of Rents
and Security Agreement (the “IDOT”) (the Security Instruments and the IDOT are each a
“Mortgage” and collectively, the “Mortgages”). The Mortgages encumber the real property
identified in Exhibit B attached hereto and other property included within the
definition of “Mortgaged Property” in the applicable Mortgage.
	 
	D.	 	Each Grantor is an affiliate of the other Grantors and will receive a direct and material
benefit from the Loans to the Borrowers. Lender is willing to make a Loan to each Borrower
only if each Grantor agrees to pay all of the Indebtedness of the Borrowers with respect to
the Borrowers’ Loans as set forth in this Agreement.
	 
	E.	 	Each Grantor is executing this Agreement to evidence its agreement (a) to pay as and when due
all of the Indebtedness of the Borrowers under the Borrowers’ Loan Documents and (b) to bear
joint and several liability for the Indebtedness of all Borrowers as set forth in this
Agreement.
	 
	F.	 	Each Grantor (except Gardens Financing, LLC) executing a Mortgage further agrees that its
obligations under this Agreement shall be secured by such Mortgage under the terms hereof.
The obligations of Gardens Financing, LLC hereunder shall not be secured by the Mortgage
securing the Loan to Gardens Financing, LLC (the “Avalon Gardens Mortgage”)





CREDIT FACILITY DOCUMENTS Collateralization Agreement




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1. Definitions. For purposes of this Agreement, the following terms shall have the meanings
indicated:



“Event of Default” shall have the meaning set forth in Section 4.



“Foreclosure” means, with respect to any Mortgage, a judicial or non-judicial foreclosure of or
trustee’s sale under the Mortgage, a deed in lieu of such foreclosure or sale, a sale of the
Property pursuant to lawful order of a court of competent jurisdiction in a bankruptcy case filed
under Title 11 of the United States Code, or any other similar disposition of any of the Property
encumbered by the Mortgage.



“Fraudulent Transfer Laws” means Section 548 of Title 11 of the United States Code or any
applicable provisions of comparable state law, including any provisions of the Uniform Fraudulent
Conveyance Act or Uniform Fraudulent Transfer Act, as adopted under state law.



“Indebtedness” means, with respect to each Grantor, the “Indebtedness” as defined in such Grantor’s
Mortgage without regard to additional obligations of such Grantor that are created by this
Agreement.



“Loans” means the loans identified in Exhibit A — Schedule 2.



“Mortgage” means that as set forth in the Recitals to this Agreement.



“Note” with respect to each Borrower means the Multifamily Note evidencing that Borrower’s
obligation to repay its Loan.



“Property” means, with respect to each Grantor, the “Mortgaged Property” as defined in the Mortgage
executed by such Grantor.



“Release Date” means the date that the applicable Property will be released pursuant to Section 14
hereof.



“Total Indebtedness” means, with respect to each Grantor, that Grantor’s obligation both (a) to pay
its Indebtedness and (b) to pay all other amounts payable under this Agreement and under the
Borrowers’ Loan Documents, whether such obligations arise directly or under a guaranty of such
obligations.



“Total Property” means the aggregate of all the Properties, now or hereafter made subject to this
Agreement, except that, for purposes of Sections 2 and 18 of this Agreement only, the Property
described in the Mortgage securing the Loan to Gardens Financing, LLC shall not be part of the
“Total Property”.



Capitalized terms not otherwise defined in this Agreement shall have the meanings set forth in the
Mortgages.




2. Joint and Several Liability; Integration of Obligations.




     (a) Notwithstanding anything to the contrary in this Agreement or any Borrower’s or the IDOT
Grantor’s, as the case may be, Loan Documents, subject to the terms and conditions of this
Agreement, each Grantor (other than the IDOT Grantor) hereby agrees to pay the Indebtedness of each
Borrower, as and when due and the IDOT Grantor hereby guaranties and becomes a surety for the
prompt payment of the Indebtedness of each other Grantor, as and when



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due. Accordingly, the
Indebtedness of each Borrower listed in Exhibit A — Schedule 2 shall be
the joint and several obligation of each Grantor, subject to and in accordance with the terms
of this Agreement.




     (b) While each Loan represents a separate and independent obligation of each Grantor, whether
direct or indirect, the Grantors acknowledge that, in requesting Lender to make the Loans, they
intend, subject to and upon the terms and conditions of this Agreement:




	 	i.	 	that the Loans be treated as if they were a single, integrated
indebtedness of the Grantors, and
	 
	 	ii.	 	that the Total Property secure to Lender the payment and
performance of all of the Grantors’ Total Indebtedness.




Accordingly, if any Grantor or the Traville Borrower fails to pay fully, when due, subject to
applicable notice and cure periods, any amount payable to Lender under this Agreement or any Loan
Document, then Lender may elect, in its discretion, to treat that amount as being due and owing by
the Grantors listed in Exhibit A — Schedule 1, on a joint and several basis; may enforce
its rights and remedies against and collect such amounts from the Grantors listed in Exhibit A
— Schedule 1 on a joint and several basis; and may recover such amounts from the value of each
of the Properties, on a pro rata basis or otherwise, as determined by Lender in its discretion.
Subject to and upon the terms and conditions of this Agreement, the Total Property secures all
Grantors’ Total Indebtedness, without apportionment or allocation of any Property or any portion of
any Property (except that the Total Indebtedness may be apportioned among the Properties for the
sole and limited purpose of determining the amount of transfer or recordation taxes or documentary
stamps required in connection with this Agreement and the Mortgages).



3. IDOT and IDOT Guaranty. Notwithstanding anything to the contrary set forth in this Agreement,
the parties hereto agree that (i) the IDOT, together with the IDOT Guaranty, evidences a contingent
liability of the IDOT Grantor as set forth in those documents; (ii) the IDOT Grantor shall not be
primarily liable for any Indebtedness described in this Agreement; and (iii) the IDOT Grantor shall
guarantee and become a surety for the prompt payment of the Indebtedness of each Borrower and each
other Grantor, as and when due, as set forth in this Agreement.



4. Events of Default. Each of the following events shall constitute an “Event of Default” under
this Agreement:




     (a) a default or breach by any Grantor of any provision of this Agreement; and



     (b) any event or condition constituting an “Event of Default” under any Loan Document.


5. Avalon Gardens Mortgage. Any event or condition constituting an “Event of Default” under this
Agreement or any Loan Document shall also constitute an “Event of Default” under the Avalon Gardens
Mortgage. Notwithstanding anything in this Agreement to the contrary, the parties hereto agree
that the Avalon Gardens Mortgage secures only the Indebtedness described in the Avalon Gardens
Mortgage and does not secure any additional obligations of Gardens Financing, LLC under this
Agreement.



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6. Remedies. Upon the occurrence of a continuing Event of Default, Lender, in its sole and
absolute discretion, may exercise any or some or all of the following remedies, in such order and
at such times as Lender shall elect:




     (a) declare immediately due and payable the Indebtedness of any or all Grantors and/or the
Traville Borrower whether or not Lender exercises its right to declare immediately due and payable
the Indebtedness related to a particular Mortgage under which the Event of Default may have
occurred; and



     (b) exercise any or all of its rights and remedies under this Agreement, any Loan Document or
applicable law.



     Lender may exercise such remedies in one or more proceedings, whether contemporaneous or
consecutive or a combination of both, to be determined by Lender in its sole discretion. Lender
may enforce its rights against any one or more Properties or portions of Properties, in such order
and manner as it may elect in its sole discretion. The enforcement of any one Mortgage shall not
constitute an election of remedies, and shall not limit or preclude the enforcement of any other
Mortgage or Loan Document, through one or more additional proceedings. Lender may bring any action
or proceeding, including but not limited to judicial or non-judicial foreclosure proceedings,
without regard to the fact that one or more other proceedings may have been commenced elsewhere
with respect to the same Property or Properties or any portion of them. Each Grantor hereby
unconditionally and irrevocably waives any rights it may have, now or in the future, whether at law
or in equity, to require Lender to enforce or exercise any of its rights or remedies under this
Agreement, under any Mortgage, or under any other Loan Document in any particular manner or order
or in any particular state or county, or to apply the proceeds of any foreclosure sale or sales in
any particular manner or order. The foregoing waiver includes, without limitation, any and all
benefits arising under or referred to in California Civil Code Sections 2845, 2849 and 2850.



     No judgment obtained by Lender in any one or more enforcement proceedings shall merge the
related Indebtedness into that judgment, and all Indebtedness which remains unpaid shall remain a
continuing obligation of the Grantors. Notwithstanding any foreclosure of any Mortgage, the
Grantors shall remain bound under this Agreement.


7. Application of Proceeds. Proceeds of the enforcement or foreclosure of any Mortgage shall be
applied to the payment of the Total Indebtedness (including prepayment premiums) in such order as
Lender may determine in Lender’s sole discretion, subject to the requirements of applicable law.



8. Adjustment of Obligations. If the Total Indebtedness of any Grantor, or any portion thereof,
are subject to avoidance under any Fraudulent Transfer Law, then the Total Indebtedness of that
Grantor automatically shall be limited to the largest amount that would not be subject to avoidance
as a fraudulent transfer or conveyance under such Fraudulent Transfer Law.



At any time at Lender’s sole option, Lender may record among the applicable land records a complete
or partial termination of this Agreement evidencing Lender’s election to treat this Agreement as
null and void with respect to one or more or all of the Properties (each a “Terminated Property”
and collectively, the “Terminated Properties”). Each Grantor, as applicable, at Lender’s request,
must join in any such termination or partial termination, and each Grantor hereby irrevocably
appoints Lender as such Grantor’s agent and attorney-in-fact to execute, deliver and record such
termination or partial termination in such Grantor’s name following written notice to Grantor and
Grantor’s failure to execute the same within ten (10)



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business days following such notice.
Following any such termination or partial termination of this Agreement, Lender may enforce the
Mortgages and other Loan Documents in accordance with their respective terms as if this Agreement
had never been executed and delivered as to any Terminated Properties.




9. Grantors’ Rights of Subrogation, Etc.




     (a) Until the Total Indebtedness have been paid and performed in full, and the maximum period
thereafter during which any payment to Lender with respect to the Total Indebtedness could be
deemed a preference under the United States Bankruptcy Code has expired, each Grantor hereby waives
any right of subrogation, contribution, reimbursement or indemnity (whether contractual, statutory,
equitable, under common law or otherwise) and any other rights to enforce any claims or remedies
which it has now or may have in the future against any other Grantor, the Traville Borrower or any
of the Properties or against any guarantor or security for the Total Indebtedness.



     (b) If a Grantor’s agreement under Subsection (a) is found by a court of competent
jurisdiction to be void or voidable for any reason, any such rights a Grantor may have against
another Grantor, the Traville Borrower, any Properties or any guarantor or security for the Total
Indebtedness shall be subordinate to any rights Lender may have against the other Grantors, the
Traville Borrower, such Properties, such guarantor or such security.



     (c) Each Grantor understands that the exercise by Lender of certain rights and remedies
contained in any Mortgage may affect or eliminate any Grantor’s right of subrogation against any or
all of the other Grantors and that such Grantor may therefore incur a partially or totally
non-reimbursable liability under this Agreement. Nevertheless, each Grantor authorizes and
empowers Lender, in Lender’s sole and absolute discretion, to exercise any right or remedy, or any
combination thereof, which may then be available.


10. Subordination of Obligations Between Grantors. Any indebtedness or other obligation of a
Grantor (a “Debtor Grantor”) held by another Grantor (a “Creditor Grantor”) shall be subordinate to
the rights of Lender against that Debtor Grantor. If Lender so requests at a time when an Event of
Default has occurred and is continuing, any Creditor Grantor shall enforce and collect any such
indebtedness or other obligation as trustee for Lender and shall pay over to Lender any amount
collected, on account of the Total Indebtedness of the Debtor Grantor.



11. Lender’s Rights. Each Grantor agrees that Lender may, without demand and at any time and from
time to time and without the consent of, or notice to, the Grantor, without incurring
responsibility to the Grantor, and without impairing or releasing the Total Indebtedness of any
Grantor, upon or without any terms or conditions and in whole or in part:




     (a) change the manner, place or terms of payment, or change or extend the time of payment of,
or renew, increase, accelerate or alter, any of the Indebtedness or Total Indebtedness of any of
the Grantors, any security for such Indebtedness or Total Indebtedness, or any liability incurred
directly or indirectly with respect to such Indebtedness or Total Indebtedness;



     (b) take and hold security for the payment of the Indebtedness or Total Indebtedness of any of
the other Grantors and sell, exchange, release, surrender, realize upon or otherwise deal with in
any manner and in any order any property pledged or mortgaged to secure such Indebtedness or Total
Indebtedness;



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     (c) exercise or refrain from exercising any rights against any Grantor, the Traville Borrower,
any guarantor or any Properties;



     (d) release or substitute any one or more endorsers, guarantors, or other obligors with
respect to the Indebtedness or Total Indebtedness of any of the other Grantors;



     (e) settle or compromise any of the Indebtedness or Total Indebtedness of any of the other
Grantors (including but not limited to obligations under this Agreement), any security for such
Indebtedness or Total Indebtedness or any liability incurred directly or indirectly with respect to
such Indebtedness or Total Indebtedness, or subordinate the payment of all or any part of such
Indebtedness or Total Indebtedness to the payment of any liability (whether due or not) of any
other Grantor to its creditors other than Lender;



     (f) apply any sums realized to any liability or liabilities of any other Grantor, the Traville
Borrower or guarantor to Lender regardless of what liability or liabilities of the Grantors, the
Traville Borrower or guarantor to Lender remain unpaid; and



     (g) consent to or waive any breach by any other Grantor, the Traville Borrower or guarantor
of, or any act, omission or default by any other Grantor, the Traville Borrower or guarantor under,
this Agreement or any of the Loan Documents.


12. Indemnification. The Grantors, jointly and severally, for themselves, their personal
representatives, successors and assigns, hereby indemnify and hold harmless Lender and each of the
trustees named in the Mortgages, as applicable, and their successors in the trust and Lender and
its successors in interest in each of the Mortgages and their respective controlling persons,
directors, officers, agents, employees, contractors, subcontractors, and the personal
representatives, successors and assigns of each of them (all hereinafter collectively referred to
as the “Indemnitees”) of and from any and all claims, debts, demands, rights, liabilities, actions
and causes of action of whatsoever kind and nature, either direct or consequential, and all costs
and expenses arising out of or relating thereto (including attorneys’ fees) which any person or
entity has or may have against the Indemnitees, or any of them, on account of, or because of, the
failure to pay in full all transfer, mortgage, recordation, documentary, or similar taxes, if any,
or any portion thereof that may be due because of the making of the Loans, execution, delivery or
recordation of any of the Mortgages and this Agreement or execution or delivery of any guaranty or
otherwise arising out of the loan transactions and all interest, penalties and fines that may be or
may become due. The Indemnitees may, at the cost of the Grantors, defend all claims made that are
or may be covered by this Agreement unless the Grantors retain counsel acceptable to the
Indemnitees. This indemnification shall survive payment of each of the Loans and release of any or
all of the Mortgages and this Agreement.




13. Waivers of Presentment, Marshalling, Certain Suretyship Defenses, etc.




     (a) With respect to its obligations under this Agreement, each Grantor waives 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 such obligations (not including, however, notices and grace periods expressly
provided for in the Loan Documents).



     (b) Notwithstanding the existence of any other security interests in any Property held by
Lender or by any other party, Lender shall have the right to determine in its discretion the order
in which any or all of the Properties or portions of any of the Properties shall be subjected to
the remedies provided in this Agreement and the Loan Documents or applicable law. Lender



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shall
have the right to determine in its discretion the order in which any or all portions of the Total
Indebtedness are satisfied from the proceeds realized upon the exercise of such remedies. Each
Grantor hereby unconditionally and irrevocably waives any and all right to require the marshalling
of assets or to require that any of the Properties or portions of any of the Properties be sold in
the inverse order of alienation or in parcels or as an entirety in connection with the exercise of
any such remedies.




     (c) To the extent that, notwithstanding Section 2 of this Agreement or any provisions of this
Agreement to the contrary, any Grantor may be deemed to be a surety or guarantor with respect to
any of the Loans, then in such capacity the following provisions will apply:



          (i) The following provisions apply only to any Property located in the State of California:




               (A) Each Grantor hereby waives any and all benefits and defenses under California Civil Code
Section 2810 and agrees that by doing so such Grantor shall be liable for the Loans even if one or
more of the Grantors ceases to be liable therefor. Each Grantor hereby waives any and all benefits
and defenses under California Civil Code Section 2809 and agrees that by doing so such Grantor’s
liability may be larger in amount and more burdensome than that of any other Grantor.



               (B) Each Grantor understands that the exercise by Lender of certain rights and remedies
contained in any of the Mortgages (such as a non-judicial foreclosure sale) may affect or eliminate
such Grantor’s right of subrogation against another Grantor, and that such Grantor may therefore
incur a partially or totally un-reimbursable liability under this Agreement. Nevertheless, each
Grantor hereby authorizes and empowers Lender to exercise, in its sole and absolute discretion, any
right or remedy, or any combination thereof, which may then be available, since it is the intent
and purpose of such Grantor that the obligations under this Agreement shall be absolute,
independent and unconditional under any and all circumstances. Each Grantor expressly waives any
defense (which defense, if such Grantor had not given this waiver, such Grantor might otherwise
have) to a personal judgment against such Grantor by reason of a non-judicial foreclosure of any of
the Total Property. Without limiting the generality of the foregoing, such Grantor hereby
expressly waives any and all benefits under (1) California Code of Civil Procedure Section 580a
(which Section, if this waiver had not been given, might otherwise limit such Grantor’s liability
after a nonjudicial foreclosure sale to the difference between the obligations of such Grantor
under this Agreement and the fair market value of the property or interests sold at such
nonjudicial foreclosure sale), (2) California Code of Civil Procedure Sections 580b and 580d (which
Sections, if this waiver had not been given, might otherwise limit Lender’s right to recover a
deficiency judgment with respect to purchase money obligations and after a nonjudicial foreclosure
sale, respectively), and (3) California Code of Civil Procedure Section 726 (which Section, if this
waiver had not been given, among other things, might otherwise require Lender to exhaust all of its
security before a personal judgment could be obtained for a deficiency). Notwithstanding any
foreclosure of the lien of any Mortgage, whether by the exercise of the power of sale contained in
that any Mortgage, by an action for judicial foreclosure or by Lender’s acceptance of a deed in
lieu of foreclosure, each Grantor shall remain bound under this Agreement.



               (C) In accordance with Section 2856 of the California Civil Code, each Grantor also waives any
right or defense based upon an election of remedies by Lender, even though such election (e.g.,
nonjudicial foreclosure with respect to any collateral held by Lender to secure repayment of the
Total Indebtedness)
destroys or otherwise impairs the subrogation rights of such Grantor or any
right of such Grantor (after payment of the Total



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Indebtedness) to proceed against any other
Grantor for reimbursement, or both, by operation of Section 580d of the California Code of Civil
Procedure or otherwise.




               (D) In accordance with Section 2856 of the California Civil Code, each Grantor waives any and
all other rights and defenses available to such Grantor by reason of Sections 2787 through 2855,
inclusive, of the California Civil Code, including, without limitation, any and all rights or
defenses such Grantor may have by reason of protection afforded to such Grantor with respect to any
of the obligations of such Grantor under this Agreement
pursuant to the antideficiency or other laws of the State of California limiting or
discharging any or part of the Total Indebtedness or Lender’s right of recovery of such Total
Indebtedness, including, without limitation, Sections 580a, 580b, 580d, and 726 of the California
Code of Civil Procedure.



               (E) In accordance with Section 2856 of the California Civil Code, each Grantor agrees to
withhold the exercise of any and all subrogation and reimbursement rights against any other
Grantors, against any other person, and against any collateral or security for the Total
Indebtedness, including, without limitation, any such rights pursuant to Sections 2847 and 2848 of
the California Civil Code, until the Total Indebtedness have been indefeasibly paid and satisfied
in full, all obligations owed to Lender under the Total Indebtedness have been fully performed, and
Lender has released, transferred or disposed of all of its right, title and interest in such
collateral or security.



          (ii) The following provision applies only to any Property located in the State of Connecticut:




               (A) EACH GRANTOR ACKNOWLEDGES THAT THE TRANSACTION CONTEMPLATED BY THE LOAN DOCUMENTS IS A
“COMMERCIAL TRANSACTION” AS SUCH IS DEFINED IN §52-278a OF THE CONNECTICUT GENERAL STATUTES, AS
AMENDED (“G.S.A.”). EACH GRANTOR FURTHER ACKNOWLEDGES THAT, PURSUANT TO G.S.A.
§52-278a THROUGH 52-278n, THE GRANTORS HAVE A RIGHT TO A NOTICE AND HEARING PRIOR TO THE ISSUANCE
OF ANY “PREJUDGMENT REMEDY.” NOTWITHSTANDING THE FOREGOING, EACH GRANTOR HEREBY WAIVES ALL RIGHTS
TO SUCH NOTICE, JUDICIAL HEARING OR PRIOR COURT ORDER IN CONNECTION WITH THE ISSUANCE OF ANY SUCH
PREJUDGMENT HEARING IN CONNECTION WITH A SUIT BROUGHT IN A COURT OF COMPETENT JURISDICTION IN THE
STATE OF CONNECTICUT TO ENFORCE THE GRANTORS OBLIGATIONS AS GUARANTORS UNDER THIS AGREEMENT.



          (iii) The following provisions apply only to any Property located in the State of New Jersey:




               (A) If any Grantor is deemed to be a surety or guarantor with respect to any of the Loans,
such Grantor further waives all defenses based on suretyship or impairment of collateral (such
Grantor and Lender intending this waiver to have the effects described in Section 48 of the
Restatement (Third) of the Law of Suretyship and Guaranty).



               (B) If any Grantor is deemed to be a surety or guarantor with respect to any of the Loans,
such Grantor hereby acknowledges that it has read and understands all of the provisions of this
Agreement, including the waiver of jury trial set forth in Section 32, and has been advised by
legal counsel as such Grantor has deemed to be necessary or appropriate.



14. Release Provisions.




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     (a) Anything in any of the Mortgages to the contrary notwithstanding, Lender will release any
Property from this Agreement and the lien created hereby only upon payment in full of all of the
Total Indebtedness or as set forth below in Section 14(b).



     (b) In the event any Grantor or the Traville Borrower requests a release of a Property from
the lien of a corresponding Mortgage in connection with (y) payment in full of the entire
Indebtedness allocated to its related Property or (z) a Transfer of such Property to an
unaffiliated third party, Lender will release (the “Release”) such Property from the applicable
Mortgage and
this Agreement upon the satisfaction of all of the following conditions; provided, however,
the grantor of such Mortgage will not be released from liability pursuant to Section 18 of the
applicable Mortgage arising out of conditions existing on or before the Release (collectively,
“Preexisting Conditions”), and any existing guarantor of the Indebtedness allocated to the related
Property (“Guarantor”) will not be released from its obligations under the Guaranty executed
concurrently with and in connection with the applicable Mortgage to the extent such Guarantor
guarantees the obligations of the applicable grantor of such Mortgage under Section 18 of the
applicable Mortgage arising out of Preexisting Conditions:



          (i) Lender has received from the applicable Grantor or the Traville Borrower at least thirty
(30) days’ prior written notice of the date proposed for such release (the “Release Date”), which
notice shall include such additional information as Lender may require in accordance with Lender’s
then-standard underwriting procedures, in order to consider approval (which approval shall be
granted in Lender’s sole, but reasonable, discretion based on the Lender’s then-current
underwriting standards) of such Release, and must be accompanied by a non-refundable review fee in
the amount of $10,000.00 per Release. Lender shall promptly identify the specific additional
information required to be delivered pursuant to this paragraph after any request for such
information from the applicable Grantor or the Traville Borrower.




          (ii) No Event of Default has occurred and is continuing and no event or circumstance exists on
the Release Date which with the giving of notice or the passage of time or both could constitute
such an Event of Default.




          (iii) The applicable Grantor (or the Traville Borrower) requesting such Release shall have
paid to Lender in full all of the following:




               (A) The entire Indebtedness allocated to such Property, including but not limited to
principal, accrued and unpaid interest and any prepayment premium;



               (B) All of Lender’s reasonable third party costs and expenses, including without limitation
reasonable fees of outside counsel, in connection with the release of such Property; and



               (C) On or before the Release Date, a Loan Servicer fee in the amount of $10,000.



          (iv) The following requirements shall have been met:




               (A) The Total Property that would remain as security for the outstanding Indebtedness under
each remaining Mortgage must meet the following requirements, as determined by Lender in Lender’s
sole and absolute discretion: (1) a debt service coverage ratio (“DCR”) as of the Release Date of
not less than 1.25:1; and (2) a loan to value ratio (“LTV”) as of the Release Date of not more than
seventy percent (70%). When calculating the DCR, Lender (y) shall assume the Loans are amortizing
on a 30-year basis, and (z) shall use the



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net operating income (“NOI”) calculated on an annual
basis based upon December 31 operating statements of the remaining Total Property, using Lender’s
standard underwriting procedures.




                    Notwithstanding the foregoing, not more than once in any twelve (12) month period in
connection with a proposed Release, a Transfer (as defined in the applicable Mortgage) of a
Property under Section 21(f) of the applicable Mortgage or a Substitution (as defined in the Master
Substitution Agreement dated the date of this Agreement by and among Lender, the Grantors and the
Traville Borrower (the “Substitution Agreement”)) under the Substitution Agreement, a Grantor or
the Traville Borrower may request that Lender
calculate the DCR for purposes of the foregoing requirement using an updated NOI, under
Lender’s standard underwriting procedures, provided that such Grantor (or the Traville Borrower)
(1) notifies Lender of such request and provides Lender with the applicable operating statements
not less than ninety (90) days prior to the Release Date, (2) pays to Lender a fee equal to the
greater of (x) $1,800 per property comprising the Total Property immediately following the Release
or (y) $25,000 and (3) pays to Loan Servicer an aggregate fee equal to $7,500.



               (B) [Intentionally Omitted.]



               (C) The applicable Grantor or the Traville Borrower shall provide Lender such financial
statements and other information as Lender may reasonably require to make the determinations
hereunder, certified by either the chief financial officer or senior financial officer of such
Grantor or the Traville Borrower as being true, correct and complete in all material respects.



     Notwithstanding the foregoing, Lender will not require that the Total Property that would
remain as security for the remaining Total Indebtedness be subject to an evaluation of geographic
diversity.


15. Obligations Absolute. No invalidity, irregularity or unenforceability of all or any part of
the Total Indebtedness of any Grantor shall affect, impair or be a defense to the recovery by
Lender of the Indebtedness or Total Indebtedness of any other Grantor, and the liability of each
Grantor under this Agreement and the Loan Documents with respect to the Indebtedness of each other
Grantor shall be primary, absolute and unconditional notwithstanding the occurrence of any event or
the existence of any other circumstances which might constitute a legal or equitable discharge of a
surety or guarantor for the Indebtedness of any other Grantor except payment and performance in
full of that other Grantor’s Indebtedness.



16. Limited-Recourse Liability. Each Grantor’s (other than the IDOT Grantor’s) personal liability
for the Total Indebtedness shall be limited as and to the same extent as set forth in its Note and
the IDOT Grantor’s personal liability for the Total Indebtedness shall be limited as and to the
same extent as set forth in the IDOT Guaranty.



17. Notices. All notices to each Grantor under this Agreement shall be in writing and shall be
given in the manner provided in that Grantor’s Mortgage for notices to that Grantor. All notices
to Lender by any Grantor under this Agreement shall be in writing and shall be given in the manner
described in the Mortgage executed in connection with the Loan.



18. Governing Law; Jurisdiction and Venue. The parties intend that Lender will assign the Loans,
the Mortgages and this Agreement to the Federal Home Loan Mortgage Corporation, a
congressionally-chartered government-sponsored enterprise having its principal place of business in
McLean, Virginia. This Agreement shall be governed by and construed in accordance with the laws of
the Commonwealth of Virginia. Each of the Grantors hereby



Page 10









 






submits to the in personam jurisdiction
of any federal or state court in (i) any state or jurisdiction in which any Property is located and
(ii) the Commonwealth of Virginia with respect to any proceeding arising out of or relating to this
Agreement. Each of the Grantors irrevocably waives, to the fullest extent permitted under
applicable law, any objections they may now or hereafter have to the venue of any suit, action or
proceeding brought in any such court and any claim that the same has been brought in an
inconvenient forum. Each Grantor acknowledges that it has received material and substantial
consideration for the cross-collateralization of the Total Property (other than the Avalon Gardens
Property) and that the foregoing venue provision is integral to Lender’s realization of its rights
hereunder. Each Grantor further acknowledges that it is not in a disparate bargaining position,
that it is a commercial enterprise, with sophisticated financial, legal and
economic experience, and that the venue selections contained herein are not unreasonable, unjust,
inconvenient or overreaching.



19. Captions, Cross References and Exhibits. The captions assigned to provisions of this Agreement
are for convenience only and shall be disregarded in construing this Agreement. Any reference in
this Agreement to a “Section”, a “Subsection” or an “Exhibit” shall, unless otherwise explicitly
provided, be construed as referring to a section of this Agreement, to a subsection of the section
of this Agreement in which the reference appears or to an Exhibit attached to this Agreement. All
Exhibits referred to in this Agreement are hereby incorporated by reference.



20. Number and Gender. Use of the singular in this Agreement includes the plural, use of the
plural includes the singular, and use of one gender includes all other genders, as the context may
require.



21. Statutes and Regulations. Any reference in this Agreement to a statute or regulation shall
include all amendments to and successors to such statute or regulation, whether adopted before or
after the date of this Agreement.



22. No Partnership. This Agreement is not intended to, and shall not, create a partnership or
joint venture among the parties, and no party to this Agreement shall have the power or authority
to bind any other party except as explicitly provided in this Agreement.



23. Successors and Assigns. This Agreement shall be binding upon and shall inure to the benefit of
the parties and their respective heirs, successors, and assigns.



24. Severability. The invalidity or unenforceability of any provision of this Agreement shall not
affect the validity of any other provision, and all other provisions shall remain in full force and
effect.



25. Entire Agreement. This Agreement, together with the Note, Mortgage and Loan Documents relating
to each Loan, contains the entire agreement among the parties as to the rights granted and the
obligations assumed in this Agreement. To the extent that this Agreement conflicts with the terms
of the other Loan Documents, this Agreement shall govern and control.



26. Waiver; No Remedy Exclusive. Any forbearance by a party to this Agreement in exercising any
right or remedy given under this Agreement or existing at law or in equity shall not constitute a
waiver of or preclude the exercise of that or any other right or remedy. Unless otherwise
explicitly provided, no remedy under this Agreement is intended to be exclusive of any other
available remedy, but each remedy shall be cumulative and shall be in addition to other remedies
given under this Agreement or existing at law or in equity.




Page 11









 







27. Third Party Beneficiaries. Neither any creditor of any party to this Agreement, nor any other
person, is intended to be a third party beneficiary of this Agreement.



28. Course of Dealing. No course of dealing among the parties to this Agreement shall operate as a
waiver of any rights of any party under this Agreement.



29. Further Assurances and Corrective Instruments. To the extent permitted by law, the parties
shall, from time to time, execute, acknowledge and deliver, or cause to be executed, acknowledged
and delivered, such supplements to this Agreement and such further instruments as Lender may
reasonably require for carrying out the intention of or facilitating the performance of this
Agreement.



30. No Party Deemed Drafter. No party shall be deemed the drafter of this Agreement, and this
Agreement shall not be construed against either party as the drafter of the Agreement.



31. Additional Rights Upon Default. Notwithstanding anything to the contrary contained herein or
in the other Loan Documents, if an Event of Default shall occur and continue pursuant to Sections
22 (d) or (f) through (j) of the Mortgage for a particular Property (a “Default Property”), then
upon the applicable Grantor or the Traville Borrower causing a substitution of collateral with
respect to, or release of, the Default Property, all in compliance with the applicable provisions
of the Loan Documents, (1) such Event of Default shall be deemed cured, (2) any related
acceleration of the Loans shall be rescinded, and (3) any other remedy relating to such Event of
Default shall cease to apply. Such substitution or release must occur, if it is to occur at all
pursuant to this Section 31, within 60 days after any acceleration of one or more of the Loans.
Each Grantor agrees that during such 60 day period (unless the release or substitution of
collateral is accomplished prior to the end of such 60 day period), Lender may commence any remedy
allowable under the Loan Documents, but may not cause the sale of any Property and the transfer of
title thereto to occur until after the end of such 60 day period.



32. WAIVER OF TRIAL BY JURY. EACH GRANTOR AND LENDER (A) COVENANTS AND AGREES NOT TO ELECT
A TRIAL BY JURY WITH RESPECT TO ANY ISSUE ARISING OUT OF THIS AGREEMENT 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.



33. Counterparts. This Agreement may be executed in multiple counterparts, each of which shall
constitute an original document and all of which together shall constitute one agreement.




     IN WITNESS WHEREOF, the undersigned have executed this Agreement effective as of the day and
year first written above.



Page 12









 





	 	 	 	 	 
	 	BORROWER/GRANTOR:



ALAMEDA FINANCING, L.P., a Delaware 

   limited
partnership

 	 
	 	By:  	California Multiple Financing, Inc., a
 	 
	 	 	 Maryland  corporation, its general partner 	 
	 
	 	 	 
	 	By:  	                                                    /s/ Joanne M. Lockridge
 	 
	 	 	Joanne M. Lockridge 	 
	 	 	Senior Vice President-Finance 	 
	 



CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT
 





State of Connecticut




County of Fairfield



On 22nd day of April, 2009 before me, Beth Deitz , Notary
Public, personally appeared Joanne M. Lockridge, who proved to me on the basis of satisfactory
evidence to be the person whose name is subscribed to the within instrument and acknowledged to me
that she executed the same in her authorized capacity, and that by her signature on the instrument
the person, or the entity upon behalf of which the person acted, executed the instrument.



I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing
paragraph is true and correct.



WITNESS my hand and official seal.




	 	 	 	 	 
	 	 	 
	 	                                                  /s/ Beth Meryl Deitz
 	 
	 	Beth Meryl Deitz 	 
	 	Notary Public 	 



 









 






 




	 	 	 	 	 
	 	BORROWER/GRANTOR:



MISSION BAY NORTH FINANCING, L.P., a

   Delaware limited partnership

 	 
	 	By:  	California Multiple Financing, Inc., a  Maryland 
 	 
	 	 	corporation, its general partner 	 
	 
	 	 	 
	 	By:  	                                                    /s/ Joanne M. Lockridge
 	 
	 	 	Joanne M. Lockridge 	 
	 	 	Senior Vice President-Finance 	 
	 



CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT
 





State of Connecticut




County of Fairfield



On 22nd day of April, 2009 before me Beth Meryl Deitz, Notary
Public, personally appeared Joanne M. Lockridge, who proved to me on the basis of satisfactory
evidence to be the person whose name is subscribed to the within instrument and acknowledged to me
that she executed the same in her authorized capacity, and that by her signature on the instrument
the person, or the entity upon behalf of which the person acted, executed the instrument.



I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing
paragraph is true and correct.



WITNESS my hand and official seal.




	 	 	 	 	 
	 	 	 
	 	                                                   /s/ Beth Meryl Deitz
 	 
	 	Beth Meryl Deitz 	 
	 	Notary Public 	 
	 




 











 





	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	BORROWER/GRANTOR:	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	WITNESS:	 	 	 	GATES FINANCING, LLC, a Delaware limited
    liability company	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	/s/ Debra G. Cruzan	 	 	 	By:	 	AvalonBay Communities, Inc., a Maryland	 	 
	 	 	 	 	 	 	 	 	 	 	 
	Print Name: Debra G. Cruzan	 	 	 	 	 	corporation, its sole member	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	/s/ Robert Rosevear

	 	 	 	By:	 	/s/ Joanne M. Lockridge	 	 
	 	 	 	 	 	 	 	 	 
	Print Name: Robert Rosevear

	 	 	 	 	 	Joanne M. Lockridge	 	 
	 

	 	 	 	 	 	Senior Vice President—Finance	 	 






	 	 	 
	 
	 	 
	STATE OF CONNECTICUT                     
	 	)
	 
	 	)  ss:
	COUNTY OF FAIRFIELD                     
	 	)






     On this 22nd day of April, 2009, before me Beth Meryl Dietz the
undersigned officer, personally appeared Joanne M. Lockridge, who acknowledged herself to be the
Senior Vice President-Finance of AvalonBay Communities, Inc., a Maryland corporation, sole member
of Gates Financing, LLC, a Delaware limited liability company, and that she as such Senior Vice
President-Finance authorized to do so, executed the foregoing instrument for the purposes therein
contained, by signing the name of the limited liability company by herself as Senior Vice
President-Finance, as her free act and deed and the free act and deed of such limited liability
company.



     IN WITNESS WHEREOF, I hereby set my hand.



	 	 	 	 	 
	 	 	 
	       /s/ Beth Meryl Deitz
 	 	 
	Beth Meryl Deitz 	 	 
	Notary Public 	 	 
	 


[AFFIX SEAL]



My Commission expires: April 30, 2009





 









 








	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	BORROWER/GRANTOR:	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	WITNESS:	 	 	 	HARBOR FINANCING, LLC, a Delaware
    limited liability company	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	/s/ Debra G. Cruzan	 	 	 	By:	 	AvalonBay Communities, Inc., a Maryland	 	 
	 	 	 	 	 	 	 	 	 	 	 
	Print Name: Debra G. Cruzan	 	 	 	 	 	Corporation, its sole member	 	 
	 
	/s/ Robert Rosevear

	 	 	 	 	 	By:
	 	/s/ Joanne M. Lockridge	 	 
	 	 	 	 	 	 	 	 	 	 	 
	Print Name: Robert Rosevear

	 	 	 	 	 	 	 	Joanne M. Lockridge	 
	 

	 	 	 	 	 	 	 	Senior Vice President-Finance	 






	 	 	 
	 
	 	 
	STATE OF CONNECTICUT                     
	 	)
	 
	 	)  ss:
	COUNTY OF FAIRFIELD                     
	 	)






     On this 22nd day of April, 2009, before me Beth Meryl Dietz the
undersigned officer, personally appeared Joanne M. Lockridge, who acknowledged herself to be the
Senior Vice President-Finance of AvalonBay Communities, Inc., a Maryland corporation, sole member
of Harbor Financing, LLC, a Delaware limited liability company, and that she as such Senior Vice
President-Finance authorized to do so, executed the foregoing instrument for the purposes therein
contained, by signing the name of the limited liability company by herself as Senior Vice
President-Finance, as her free act and deed and the free act and deed of such limited liability
company.



     IN WITNESS WHEREOF, I hereby set my hand.



	 	 	 	 	 
	 	 	 
	      /s/ Beth Meryl Deitz
 	 	 
	Beth Meryl Deitz 	 	 
	Notary Public 	 	 
	 


[AFFIX SEAL]



My Commission expires: April 30, 2009





 









 









	 	 	 	 	 
	 	BORROWER/GRANTOR:




4100 MASSACHUSETTS AVENUE ASSOCIATES, 

L.P., a District of Columbia limited partnership

 	 
	 	By:  	AvalonBay Communities, Inc., a Maryland
 	 
	 	 	corporation, its general partner 	 
	 
	 	 	 
	 	By:  	                                                               /s/ Joanne M. Lockridge
 	 
	 	 	Joanne M. Lockridge 	 
	 	 	Senior Vice President—Finance 	 
	 



	 	 	 
	 
	 	 
	STATE OF CONNECTICUT 
	 	)
	 
	 	)  ss:
	COUNTY OF FAIRFIELD 
	 	)






     I,
Beth Meryl Deitz, a Notary Public, in and for the jurisdiction
aforesaid, do hereby certify that Joanne M. Lockridge, who is named
as Senior Vice President for AvalonBay Communities, Inc., a Maryland
Corporation, general partner of 4100 Massachusetts Avenue Associates,
L.P., a District of Columbia limited partnership, personally appeared
before me in said jurisdiction, and as said Senior Vice
President-Finance and by virtue of the authority vested in her by
said Instrument, acknowledged said Instrument to be the act and deed
of said limited partnership, and that she delivered the same as such.



     WITNESS
my hand and official seal this
22nd
day of April, 2009.



	 	 	 	 	 
	 	 	 
	/s/ Beth Meryl Deitz
 	 	 
	Beth Meryl Deitz 	 	 
	Notary Public 	 	 
	 




     My Commission Expires: April 30, 2009



 









 





	 	 	 	 	 	 	 
	 	 	BORROWER/GRANTOR:	 	 
	 
	 	 	 	 	 	 
	 	 	AVALONBAY COMMUNITIES, INC., a	 	 
	 	 	Maryland corporation	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Joanne M. Lockridge
	 	(SEAL)
	 	 	 	 	 	 	 
	 

	 	 	 	Joanne M. Lockridge	 	 
	 

	 	 	 	Senior Vice President-Finance	 	 






	 	 	 
	 
	 	 
	STATE OF CONNECTICUT 
	 	)
	 
	 	)  ss:
	COUNTY OF FAIRFIELD 
	 	)






     I,
Beth Meryl Deitz, a Notary Public, in and for the jurisdiction
aforesaid, do hereby certify that Joanne M. Lockridge, who is named
as Senior Vice President for AvalonBay Communities, Inc., a Maryland
Corporation, personally appeared before me in said jurisdiction, and
as said Senior Vice President-Finance and by virtue of the authority
vested in her by said Instrument, acknowledged said Instrument to be
the act and deed of said corporation, and that she delivered the
same as such.



     WITNESS my hand and official seal this 22nd day of April, 2009.



	 	 	 	 	 
	 	 	 
	/s/ Beth Meryl Deitz
 	 	 
	Beth Meryl Deitz 	 	 
	Notary Public 	 	 
	 




     My Commission Expires: April 30, 2009



 









 





	 	 	 	 	 
	 	IDOT GRANTOR:



AVALONBAY TRAVILLE, LLC,

a Maryland limited liability company

 	 
	 	By:  	AvalonBay Communities, Inc., a Maryland
 	 
	 	 	corporation, its sole member 	 
	 
	 	 	 
	 	By:  	                   /s/ Joanne M. Lockridge
 	 (SEAL)
	 	 	Joanne M. Lockridge 	 
	 	 	Senior Vice President — Finance 	 
	 



	 	 	 
	 
	 	 
	STATE OF CONNECTICUT 
	 	)
	 
	 	)  ss:
	COUNTY OF FAIRFIELD 
	 	)






     I HEREBY CERTIFY,
that on
April 22nd
, 2009, before me, the undersigned, a
Notary Public of the State aforesaid, duly qualified and commissioned as such, personally appeared
Joanne M. Lockridge, Senior Vice President — Finance of Avalon Bay Communities, Inc., in its
capacity as the sole member of AVALONBAY TRAVILLE, LLC, a Maryland limited liability company, known
to me (or satisfactorily proven) to be the person whose name is subscribed to the within instrument
and acknowledged that he executed the foregoing instrument for the purposes therein contained.



     WITNESS my hand and Notarial Seal.



	 	 	 	 	 
	 	 	 
	 	/s/ Beth Meryl Deitz
 	 
	 	Beth Meryl Deitz 	 
	 	Notary Public

My Commission Expires: April 30, 2009 	 



 









 






	 	 	 	 	 
	 	TRAVILLE BORROWER:



SHADY GROVE ROAD FINANCING, LLC, a 

   Delaware limited liability company

 	 
	 	By:  	AvalonBay Traville, LLC, a Maryland
 	 
	 	 	limited liability company, its sole member 	 
	 
	 	 	 
	 	By:  	                                                    AvalonBay Communities, Inc., a
 	 
	 	 	Maryland corporation, its sole member 	 
	 
	 	 	 
	 	By:  	 /s/ Joanne M. Lockridge
 	(SEAL) 
	 	 	Joanne M. Lockridge 	 
	 	 	Senior Vice President —
Finance 	 
	 



	 	 	 
	 
	 	 
	STATE OF CONNECTICUT 
	 	)
	 
	 	)  ss:
	COUNTY OF FAIRFIELD 
	 	)






     I HEREBY CERTIFY, that on April 22nd, 2009, before me, the undersigned, a Notary
Public of the State aforesaid, duly qualified and commissioned as such, personally appeared Joanne
M. Lockridge, Senior Vice President — Finance of Avalon Bay Communities, Inc., in its capacity as
the sole member of AvalonBay Traville, LLC, a Maryland limited liability company, in its respective
capacity as the sole member of SHADY GROVE ROAD FINANCING, LLC, a Delaware limited liability
company, known to me (or satisfactorily proven) to be the person whose name is subscribed to the
within instrument and acknowledged that he executed the foregoing instrument for the purposes
therein contained.



     WITNESS my hand and Notarial Seal.



	 	 	 	 	 
	 	 	 
	 	    /s/ Beth Meryl Deitz
 	 
	 	Beth Meryl Deitz 	 
	 	Notary Public

My Commission Expires: April 30, 2009	 



  









 






	 	 	 	 	 
	 	BORROWER/GRANTOR:



EDGEWATER FINANCING, LLC, a Delaware 

   limited liability company

 	 
	 	By:  	AvalonBay Communities, Inc., a Maryland
 	 
	 	 	corporation, its sole member 	 
	 
	 	 	 
	 	By:  	                                                    /s/ Joanne M. Lockridge
 	 
	 	 	Joanne M. Lockridge 	 
	 	 	Senior Vice President—Finance 	 
	 



	 	 	 
	 
	 	 
	STATE OF CONNECTICUT                     
	 	)
	 
	 	)  ss:
	COUNTY OF FAIRFIELD                     
	 	)






          On
this
22nd day of April, 2009, before me, the undersigned
officer, personally appeared Joanne M. Lockridge, Senior Vice President-Finance of AvalonBay
Communities, Inc., a Maryland corporation, sole member of Edgewater Financing, LLC, a Delaware
limited liability company, and who, I am satisfied, is the person who signed the within instrument,
and acknowledged that she, as such officer, signed and delivered the same as the voluntary act and
deed of said limited liability company, for the purposes therein contained.




     IN WITNESS WHEREOF, I hereunto set my hand and official seal.



	 	 	 	 	 
	 	 	 
	 	      /s/ Beth Meryl Deitz
 	 
	 	Beth Meryl Deitz 	 
	 	Notary Public

My Commission Expires: April 30, 2009	 



  









 







	 	 	 	 	 
	 	BORROWER/GRANTOR:



FREEHOLD FINANCING, LLC, a Delaware 

   limited liability company

 	 
	 	By:  	AvalonBay Communities, Inc., a Maryland
 	 
	 	 	corporation, its sole member 	 
	 	 	 	 
	 	 	 
	 	By:  	                                                    /s/ Joanne M. Lockridge
 	 
	 	 	Joanne M. Lockridge 	 
	 	 	Senior Vice President—Finance 	 
	 



	 	 	 
	 
	 	 
	STATE OF CONNECTICUT                     
	 	)
	 
	 	)  ss:
	COUNTY OF FAIRFIELD                     
	 	)






          On this 22nd day of April, 2009, before me, the undersigned officer,
personally appeared Joanne M. Lockridge, Senior Vice President-Finance of AvalonBay Communities,
Inc., a Maryland corporation, sole member of Freehold Financing, LLC, a Delaware limited liability
company, and who, I am satisfied, is the person who signed the within instrument, and acknowledged
that she, as such officer, signed and delivered the same as the voluntary act and deed of said
limited liability company, for the purposes therein contained.




          IN WITNESS WHEREOF, I hereunto set my hand and official seal.




	 	 	 	 	 
	 	 	 
	 	      /s/ Beth Meryl Deitz
 	 
	 	Beth Meryl Deitz 	 
	 	Notary Public

My Commission Expires: April 30, 2009	 



  









 







	 	 	 	 	 
	 	BORROWER/GRANTOR:



RUN EAST II FINANCING, LLC, a Delaware 

   limited liability company

 	 
	 	By:  	AvalonBay Communities, Inc., a Maryland
 	 
	 	 	corporation, its sole member 	 
	 
	 	 	 
	 	By:  	                                                    /s/ Joanne M. Lockridge
 	 
	 	 	Joanne M. Lockridge 	 
	 	 	Senior Vice President—Finance 	 
	 



	 	 	 
	 
	 	 
	STATE OF CONNECTICUT                     
	 	)
	 
	 	)  ss:
	COUNTY OF FAIRFIELD 
	 	)






          On
this
22nd day of April, 2009, before me, the undersigned
officer, personally appeared Joanne M. Lockridge, Senior Vice President-Finance of AvalonBay
Communities, Inc., a Maryland corporation, sole member of Run East II Financing, LLC, a Delaware
limited liability company, and who, I am satisfied, is the person who signed the within instrument,
and acknowledged that she, as such officer, signed and delivered the same as the voluntary act and
deed of said limited liability company, for the purposes therein contained.




          IN WITNESS WHEREOF, I hereunto set my hand and official seal.




	 	 	 	 	 
	 	 	 
	 	    /s/ Beth Meryl Deitz
 	 
	 	Beth Meryl Deitz 	 
	 	Notary Public 	 
	 
	 	My Commission Expires: April 30, 2009	 






  









 








	 	 	 	 	 
	 	BORROWER/GRANTOR:



BELLEVUE FINANCING, LLC, a Delaware 

   limited liability company

 	 
	 	By:  	AvalonBay Communities, Inc., a Maryland
 	 
	 	 	corporation, its sole member 	 
	 
	 	 	 
	 	By:  	                                                    /s/ Joanne M. Lockridge
 	 
	 	 	Joanne M. Lockridge 	 
	 	 	Senior Vice President—Finance 	 
	 


STATE OF CONNECTICUT, Fairfield County ss:





     On this 22nd day of April, 2009, before me, the undersigned, a Notary Public
in and for the State of Connecticut, duly commissioned and sworn, personally appeared Joanne M.
Lockridge, to me known to be Senior Vice President-Finance of AvalonBay Communities, Inc., a
Maryland corporation, sole member of Bellevue Financing, LLC, a Delaware limited liability company,
the limited liability company that executed the foregoing instrument, and acknowledged the said
instrument to be the free and voluntary act and deed of said limited liability company, for the
uses and purposes therein mentioned, and on oath stated that she was authorized to execute said
instrument.



	 	 	 	 	 
	 	 	 
	 	     /s/ Beth Meryl Deitz
 	 
	 	Beth Meryl Deitz 	 
	 	Notary Public


My Commission Expires: April 30, 2009	 



  









 






	 	 	 	 	 
	 	BORROWER/GRANTOR:



AVALONBAY SHREWSBURY, INC., a
 Maryland corporation

 	 
	 	By:  	/s/ Joanne M. Lockridge
 	 
	 	 	Joanne M. Lockridge 	 
	 	 	Senior Vice President—Finance 	 
	 




STATE OF CONNECTICUT, Fairfield County ss:



     On this 22nd_day of April, 2009, before me, the undersigned notary public,
personally appeared Joanne M. Lockridge, proved to me through satisfactory evidence of
identification or personally known to me to be the Senior Vice President-Finance of AvalonBay
Shrewsbury, Inc., a Maryland corporation, and acknowledged to me that she signed it voluntarily for
its stated purpose.



	 	 	 	 	 
	 	 	 
	 	     /s/ Beth Meryl Deitz
 	 
	 	Beth Meryl Deitz 	 
	 	Notary Public 	 
	 


My Commission Expires: April 30, 2009




  









 








	 	 	 	 	 
	 	BORROWER/GRANTOR:



WOBURN FINANCING, LLC, a Delaware 

   limited liability company

 	 
	 	By:  	AvalonBay Communities, Inc., a Maryland
 	 
	 	 	corporation, its sole member 	 
	 
	 	 	 
	 	By:  	                                                    /s/ Joanne M. Lockridge
 	 
	 	 	Joanne M. Lockridge 	 
	 	 	Senior Vice President—Finance 	 
	 


STATE OF CONNECTICUT, Fairfield County ss:





     On this 22nd day of April, 2009, before me, the undersigned notary public,
personally appeared Joanne M. Lockridge, proved to me through satisfactory evidence of
identification or personally known to me to be the Senior Vice President-Finance of AvalonBay
Communities, Inc., a Maryland corporation, sole member of Woburn Financing, LLC, a Delaware limited
liability company, and acknowledged to me that she signed it voluntarily for its stated purpose.



	 	 	 	 	 
	 	 	 
	 	     /s/ Beth Meryl Deitz
 	 
	 	Beth Meryl Deitz 	 
	 	Notary Public 	 
	 


My Commission Expires: April 30, 2009




  









 








	 	 	 	 	 
	 	BORROWER/GRANTOR:



GARDENS FINANCING, LLC, a Delaware 

   limited liability company

 	 
	 	By:  	AvalonBay Communities, Inc., a Maryland
 	 
	 	 	corporation, its sole member 	 
	 
	 	 	 
	 	By:  	                                                    /s/ Joanne M. Lockridge
 	 
	 	 	Joanne M. Lockridge 	 
	 	 	Senior Vice President—Finance 	 
	 



	 	 	 
	 
	 	 
	STATE OF CONNECTICUT 
	 	)
	COUNTY OF FAIRFIELD                      
	 	)  ss:






     On the 22nd day of April, in the year 2009, before me, the
undersigned, a Notary Public in and for said State, personally appeared Joanne M. Lockridge
personally known to me or proved to me on the basis of satisfactory evidence to be the individual
whose name is subscribed to the within instrument and acknowledged to me that she executed the same
in her capacity, and that by her signature on the instrument, the individual, or the person upon
behalf of which the individual acted, executed the instrument.



	 	 	 	 	 
	 	 	 
	 	     /s/ Beth Meryl Deitz
 	 
	 	Beth Meryl Deitz 	 
	 	Notary Public 	 
	 


My Commission Expires: April 30, 2009















 








	 	 	 	 	 
	 	LENDER:



DEUTSCHE BANK BERKSHIRE 

MORTGAGE, INC., a Delaware corporation

 	 
	 	By:  	/s/ Steven B. Wendel
 	 (SEAL)
	 	 	Name:  	Steven B. Wendel 	 
	 	 	Title:  	Officer 	 
	 
	 	 	 
	 	By:  	                     /s/ Denis G. Leger
 	 (SEAL)
	 	 	Name:  	Denis G. Leger 	 
	 	 	Title:  	Officer 	 
	 


STATE OF MASSACHUSETTS, Suffolk County ss:





     On this 24th_day of April, 2009, before me, the undersigned notary public,
personally appeared Steven B. Wendel and Denis G. Leger, proved to me through satisfactory evidence
of identification or personally known to me to be the Officer and Officer, respectively of Deutsche
Bank Berkshire Mortgage, Inc., a Delaware corporation and acknowledged to me that they signed it
voluntarily for its stated purpose.



	 	 	 	 	 
	 	 	 
	 	     /s/ George Eugene Moore
 	 
	 	George Eugene Moore 	 
	 	Notary Public 	 
	 



My Commission Expires: February 18, 2016




  









 








EXHIBIT A — SCHEDULE 1




GRANTORS




Grantors

Alameda Financing, L.P.

Mission Bay North Financing, L.P.

Gates Financing, LLC

Harbor Financing, LLC

4100 Massachusetts Avenue Associates, L.P.

AvalonBay Communities, Inc.

AvalonBay Shrewsbury, Inc.

Woburn Financing, LLC

AvalonBay Traville, LLC

Edgewater Financing, LLC

Freehold Financing, LLC

Run East II Financing, LLC

Gardens Financing, LLC

Bellevue Financing, LLC




  









 





EXHIBIT A — SCHEDULE 2




BORROWERS, LOAN NUMBERS AND LOAN AMOUNTS




	 	 	 	 	 	 	 	 	 
	Loan Number	 	 	Borrower	 	Loan Amount	 
	 	968714285	 	 	Alameda Financing, L.P.
	 	$	53,980,000.00	 
	 	968714293	 	 	Mission Bay North Financing, L.P.
	 	$	73,269,000.00	 
	 	968714307	 	 	Gates Financing, LLC
	 	$	41,321,000.00	 
	 	968714315	 	 	Harbor Financing, LLC
	 	$	65,695,000.00	 
	 	968714404	 	 	4100 Massachusetts Avenue Associates, L.P.
	 	$	59,010,000.00	 
	 	968714331	 	 	AvalonBay Communities, Inc.
	 	$	45,850,000.00	 
	 	968714331	 	 	AvalonBay Shrewsbury, Inc.
	 	$	21,130,000.00	 
	 	968714323	 	 	Woburn Financing, LLC
	 	$	55,805,000.00	 
	 	968714390	 	 	Shady Grove Road Financing, LLC
	 	$	77,700,000.00	 
	 	968714358	 	 	Edgewater Financing, LLC
	 	$	78,565,000.00	 
	 	968714420	 	 	Freehold Financing, LLC
	 	$	36,630,000.00	 
	 	968714366	 	 	Run East II Financing, LLC
	 	$	39,250,000.00	 
	 	968714374	 	 	Gardens Financing, LLC
	 	$	66,237,000.00	 
	 	968714412	 	 	Bellevue Financing, LLC
	 	$	26,698,000.00	 






Page 3 









 






EXHIBIT B




DESCRIPTION OF MORTGAGES




	 	 	 	 	 
	Borrower	 	Property Name	 	County and State
	Alameda Financing, L.P.

	 	Avalon on the Alameda
	 	San Jose, CA
	 
	 	 	 	 
	Mission Bay North
Financing, L.P.

	 	Avalon at Mission Bay

North
	 	San Francisco, CA
	 
	 	 	 	 
	Gates Financing, LLC

	 	Avalon Gates
	 	Stamford, CT
	 
	 	 	 	 
	Harbor Financing, LLC

	 	Avalon on Stamford Harbor
	 	Trumbull, CT
	 
	 	 	 	 
	4100 Massachusetts Avenue
Associates, L.P.

	 	Avalon at Foxhall
	 	Washington, DC
	 
	 	 	 	 
	AvalonBay Communities,
Inc.

	 	Avalon at Gallery Place
	 	Washington, DC
	 
	 	 	 	 
	AvalonBay Shrewsbury, Inc.

	 	Avalon Shrewsbury
	 	Shrewsbury, MA
	 
	 	 	 	 
	Woburn Financing, LLC

	 	Avalon Woburn
	 	Woburn, MA
	 
	 	 	 	 
	Shady Grove Road 

Financing, LLC

	 	Avalon at Traville
	 	Rockville, MD
	 
	 	 	 	 
	Edgewater Financing, LLC

	 	Avalon at Edgewater
	 	Edgewater, NJ
	 
	 	 	 	 
	Freehold Financing, LLC

	 	Avalon at Freehold
	 	Freehold, NJ
	 
	 	 	 	 
	Run East II Financing, LLC

	 	Avalon Run East II
	 	Lawrenceville, NJ
	 
	 	 	 	 
	Gardens Financing, LLC

	 	Avalon Gardens
	 	Nanuet, NY
	 
	 	 	 	 
	Bellevue Financing, LLC

	 	Avalon Bellevue
	 	Bellevue, WA






See Schedule B-1 to B-14 to Exhibit B for legal descriptions




Page 4