Document:

EX-10.3

SALE AGREEMENT ASSIGNMENT

This Sale Agreement Assignment (“Assignment”) is made as of August 1, 2007 by and between Triple
Net Properties, L.L.C. a Virginia limited liability company (“Assignor”), Apartment REIT Bay Point
Resort, LLC, a Texas limited liability company (“Assignee”), and is made with respect to the Sale
Agreement by and between Assignor and Bay Point Resort Corpus Christi, L.P., a Texas limited
partnership (“Seller”) dated June 8, 2007, as amended June 14, 2007 (“PSA”). For good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereby
agree as follows:

Assignor hereby assigns to Assignee all of Assignor’s right, title and interest in and to the PSA,
the escrow created pursuant to the PSA, any Deposits (as defined in the PSA) in such escrow or held
by Seller, and all other rights and assets appurtenant to any of the foregoing (“Assets”).

Assignee hereby accepts the Assets and assumes all of Assignor’s obligations under the PSA, whether
arising before or after the date of this Assignment. Assignor acknowledges that it is not released
from any PSA obligations, whether arising before or after the date of this Assignment, as a result
of such assignment.

Upon deliver hereto to Seller, Buyer’s address per PSA Section 12 is hereby unchanged.

In witness whereof, the undersigned have executed this Assignment as of the above date.

	 	 	 
	Assignor:

	 	Triple Net Properties, L.L.C. a Virginia limited

liability company

By: /s/ Richard Hutton
	
 
	 	 
	
 
	 	Richard Hutton

Title: Executive Vice President
	
 
	 	 
	Assignee:

	 	Apartment REIT Bay Point Resort, LLC, a Texas

limited liability company

By: NNN Apartment REIT Holdings, L.P., a Virginia

limited partnership, its sole member and manager

By: NNN Apartment REIT, Inc., a Maryland

corporation, its general partner

By: /s/ Shannon K S Johnson
	
 
	 	 
	
 
	 	Name: Shannon K S Johnson
	
 
	 	 
	
 
	 	Title: Chief Financial Officer
	
 
	 	 

\4671219.3EX-10.4

FIXED+1 MULTIFAMILY NOTE

	 	 	 
	US $21,612,000.00

	 	August 1, 2007

FOR VALUE RECEIVED, the undersigned (“Borrower”) jointly and severally (if more than one)
promises to pay to the order of PNC ARCS LLC, a Delaware limited liability company, the principal
sum of of Twenty One Million Six Hundred Twelve Thousand and No/100 Dollars (US $21,612,000.00),
with interest accruing at the Interest Rate on the unpaid principal balance from the Disbursement
Date until fully paid.

1. Defined Terms. In addition to defined terms found elsewhere in this Note, as used in this
Note, the following definitions shall apply:

Adjustable Rate. From and after each Rate Change Date until the next Rate Change
Date, the Adjustable Rate shall be the sum of (i) the Current Index, and (ii) the
Margin, which sum is then rounded to three decimal places, subject to the
limitations that the Adjustable Rate shall not be less than the Margin.

Adjustable Rate Period: The period commencing on the First Rate Change Date and
ending on the Maturity Date.

	 	 	 	Amortization Period: Zero (0) months.

Business Day: Any day other than a Saturday, Sunday or any other day on which
Lender is not open for business.

Current Index: The published Index that is effective on the 15th day before the
applicable Rate Change Date.

Debt Service Amounts: Amounts payable under this Note, the Security Instrument or
any other Loan Document.

Default Rate: A rate equal to the lesser of 4 percentage points above the Interest
Rate or the maximum interest rate which may be collected from Borrower under
applicable law.

Disbursement Date: The date of disbursement of Loan proceeds hereunder.

First Payment Change Date: The first day of September, 2016.

First Payment Date or First Interest Only Payment Date: The first day of September,
2007.

First Principal and Interest Payment Date: N/A

First Rate Change Date: The first day of August, 2016.

Indebtedness: The principal of, interest on, or any other amounts due at any time
under, this Note, the Security Instrument or any other Loan Document, including
prepayment premiums, late charges, default interest, and advances to protect the
security of the Security Instrument under Section 12 of the Security Instrument.

Index: The British Bankers Association fixing of the London Inter-Bank Offered Rate
for 1-month U.S. Dollar-denominated deposits as reported by Telerate through
electronic transmission. If the Index is no longer available, or is no longer
posted through electronic transmission, Lender will choose a new index that is based
upon comparable information and provide notice thereof to Borrower.

	 	 	 	Fixed Rate: The annual rate of Five and Nine Hundred Thirty Five
Thousandths Percent (5.935%).

Last Interest-Only Payment Date: N/A

Lender: The holder of this Note.

Loan: The loan evidenced by this Note.

Loan Term: 120 months.

Margin: The Adjustable Rate Period Mortgage Margin is 2.40%.

Maturity Date: The first day of August, 2017, or any earlier date on which the
unpaid principal balance of this Note becomes due and payable by acceleration or
otherwise.

Payment Change Date: The first day of the month following each Rate Change Date
until this Note is repaid in full.

Property Jurisdiction: The jurisdiction in which the Land is located.

Remaining Amortization Period: For an amortizing Loan, as of each Payment Change
Date, the Amortization Period minus the number of scheduled monthly principal and
interest payments that have elapsed since the date of this Note.

Rate Change Date: The First Rate Change Date and the first day of each month
thereafter until this Note is repaid in full.

Security Instrument: A Multifamily Deed of Trust, Assignment of Rents and Security
Agreement and Fixture Filing dated as of the date of this Note.

Yield Maintenance Period Term or Prepayment Premium Period Term: 108 months.

Yield Maintenance Period End Date or Prepayment Premium Period End Date: The last
day of July, 2016.

Event of Default, Key Principal and other capitalized terms used but not defined in this Note shall
have the meanings given to such terms in the Security Instrument.

2. Address for Payment. All payments due under this Note shall be payable at 26901 Agoura Rd,
Suite 200, Calabasas Hills, CA 91301, or such other place as may be, or such other place as may be
designated by written notice to Borrower from or on behalf of Lender.

3. Payment of Principal and Interest. Principal and interest shall be paid as follows:

(a) Short Month Interest. If disbursement of principal is made by Lender to Borrower on any
day other than the first day of the month, interest for the period beginning on the Disbursement
Date and ending on and including the last day of the month in which such disbursement is made shall
be payable simultaneously with the execution of this Note.

(b) Interest Computation. Interest under this Note shall be computed on the basis of (check
one only):

30/360. A 360-day year consisting of twelve 30-day months.

	 	 	 	[ X ] Actual/360. A 360-day year. The amount of each monthly
payment made by Borrower pursuant to Paragraph 3(d) below that is allocated to
interest will be based on the actual number of calendar days during such month
and shall be calculated by multiplying the unpaid principal balance of this
Note by the per annum Interest Rate, dividing the product by 360 and
multiplying the quotient by the actual number of days elapsed during the month.
Borrower understands that the amount allocated to interest for each month will
vary depending on the actual number of calendar days during such month.

(c) Interest Accrual. Interest shall accrue on the unpaid principal balance of this Note at
the Fixed Rate or the Adjustable Rate, as applicable. Interest shall accrue at the Fixed Rate
until the First Rate Change Date. Thereafter, interest shall accrue at the Adjustable Rate.
During the Adjustable Rate Period, the Adjustable Rate shall change on each Rate Change Date until
the loan is repaid in full. 

(d) Monthly Installments.

(1) Fixed Rate Period. (Check one only.)

Amortizing Loan.

Consecutive monthly installments of principal and interest, each in
the amount of      
Dollars (US $     ), shall be payable on the
First Payment Date and on the first day of every month thereafter,
until and including the First Rate Change Date

	 	 	 	[ X ] Interest Only Loan. (Check one
only)

30/360. If interest accrues based on a 30/360 interest
computation, then consecutive monthly installments of
interest only, each in the amount of
     Dollars (US
$     ), shall be payable on the First
Payment Date and on the first day of every month thereafter,
until and including the First Rate Change Date.

	 	 	 	[ X ] Actual/360. If interest
accrues based on an Actual/360 interest computation, the amount
of One Hundred Ten Thousand Four Hundred Fifty Two and 33/100
Dollars (US $110,452.33) shall be payable on the First Payment
Date and thereafter consecutive monthly installments of interest
only, shall be payable as follows:

	 	(1)	 	Ninety Nine
Thousand Seven Hundred Sixty Three and 39/100 Dollars
(US $99,763.39), shall be payable on the first day of
each month during the term hereof which follows a 28-day
month;

	 	(2)	 	One Hundred Three
Thousand Three Hundred Twenty Six and 37/100 Dollars (US
$103,326.37), shall be payable on the first day of each
month during the term hereof which follows a 29-day
month,

	 	(3)	 	One Hundred Six
Thousand Eight Hundred Eighty Nine and 35/100 Dollars
(US $106,889.35), shall be payable on the first day of
each month during the term hereof which follows a 30-day
month, or

	 	(4)	 	One Hundred Ten
Thousand Four Hundred Fifty Two and 33/100 Dollars (US
$110,452.33), shall be payable on the first day of each
month during the term hereof which follows a 31-day
month,

until and including the First Rate Change Date.

Partial Interest Only Loan.

	 	(1)	 	Interest Only Period. Commencing
on the First Interest Only Payment Date and on the first day of
every month until and including the Last Interest Only Payment
Date, consecutive monthly installments of interest only shall be
payable and in an amount equal to one of the following (check
one only):

30/360. If interest accrues based on a 30/360
interest computation, then consecutive monthly
installments of interest only, each in the amount of
     
     Dollars (US
$     ).

Actual/360. If interest accrues based on an
Actual/360 interest computation, the amount of
     Dollars
(US $     ) shall be payable on the
First Interest Only Payment Date and thereafter
consecutive monthly installments of interest only
shall be payable as follows:

	 	 	 	(i)
     Dollars
(US $     ), shall be payable on
the first day of each month during the term
hereof which follows a 28-day month;

	 	 	 	(ii)
     Dollars
(US $     ), shall be payable on
the first day of each month during the term
hereof which follows a 29-day month,

	 	 	 	(iii)
     Dollars
(US $     ), shall be payable on
the first day of each month during the term
hereof which follows a 30-day month, or

	 	 	 	(iv)
     Dollars
(US $     ), shall be payable on
the first day of each month during the term
hereof which follows a 31-day month,

	 	(2)	 	Amortizing
Period. Commencing on the First Principal and Interest
Payment Date and on the first day of every month
thereafter, until and including the First Rate Change
Date, consecutive monthly installments of principal and
interest shall be due and payable, each in the amount of
     Dollars (US
$     ).

(2) Adjustable Rate Period. (Check one only)

Amortizing Loan. If the Loan is an amortizing Loan, consecutive
monthly installments of principal and interest, each in the amount of
the Required Monthly Payment (defined below), shall be payable on the
first day of each month beginning on the First Payment Change Date
and on each Payment Change Date thereafter until the entire unpaid
principal balance evidenced by this Note is fully paid. The initial
Required Monthly Payment shall be the amount required to pay the
unpaid principal balance of this Note in equal monthly installments,
including accrued interest at the Adjustable Rate over the Remaining
Amortization Period. Thereafter, to the extent that the Adjustable
Rate has changed, the Required Monthly Payment shall change on each
Payment Change Date, and shall be in such amount as shall cause the
unpaid principal balance of the Note to be amortized over the
Remaining Amortization Period. Notwithstanding the interest accrual
method selected in paragraph 3(b) above, the amount of the initial
and all other Required Monthly Payments shall be calculated utilizing
a 30/360 interest calculation payment schedule whether the amount
allocated to interest on the loan is based on a 360-day year
consisting of twelve 30-day months or on a 360-day year consisting of
the actual number of days in each month. Any remaining principal and
interest, if not sooner paid, shall be due and payable on the
Maturity Date.

	 	 	 	[ X ] Interest-Only Loan. If the Loan is an
interest-only Loan, consecutive monthly installments of interest only,
each in the amount of the Required Monthly Payment (defined below),
shall be payable on the First Payment Change Date and on each Payment
Change Date thereafter until the entire unpaid principal balance
evidenced by this Note is fully paid. The initial Required Monthly
Payment shall be calculated based on the outstanding principal balance
and the then-applicable Adjustable Rate. Thereafter, to the extent
that the Adjustable Rate has changed, the Required Monthly Payment
shall change on each Payment Change Date based on the then-applicable
Adjustable Rate. The amount of the initial and any changed Required
Monthly Payment shall be calculated utilizing the interest accrual
method selected in paragraph 3(b) above. The entire unpaid principal
balance and accrued but unpaid interest, if not sooner paid, shall be
due and payable on the Maturity Date.

(i) Adjustable Rate. The Adjustable Rate shall be in effect beginning
on the First Rate Change Date. From and after each Rate Change Date until
the next Rate Change Date, the Adjustable Rate shall be the sum of (a) the
Current Index, and (b) the Margin, which sum is then rounded to three
decimal places, subject to the limitations that the Adjustable Rate shall
not be less than the Margin. Accrued interest on this Note shall be paid in
arrears.

(ii) Notice of Interest Rate Change. Before each Payment Change Date,
Lender shall re-calculate the Adjustable Rate and shall notify Borrower (in
the manner specified in the Security Instrument for giving notices) of any
change in the Adjustable Rate and the Required Monthly Payment.

(iii) Correction to Required Monthly Payment. If Lender at any time
determines, in its sole but reasonable discretion, that it has miscalculated
the amount of the Required Monthly Payment (whether because of a
miscalculation of the Adjustable Rate or otherwise), then Lender shall give
notice to Borrower of the corrected amount of the Required Monthly Payment
(and the corrected Adjustable Rate, if applicable) and (a) if the corrected
amount of the Required Monthly Payment represents an increase, then Borrower
shall, within 30 calendar days thereafter, pay to Lender any sums that
Borrower would have otherwise been obligated under this Note to pay to
Lender had the amount of the Required Monthly Payment not been
miscalculated, or (b) if the corrected amount of the Required Monthly
Payment represents a decrease thereof and Borrower is not otherwise in
breach or default under any of the terms and provisions of the Note, the
Security Instrument or any other loan document evidencing or securing the
Note, then Borrower shall thereafter be paid the sums that Borrower would
not have otherwise been obligated to pay to Lender had the amount of the
Required Monthly Payment not been miscalculated.

(e) Payments Before Due Date. Any regularly scheduled monthly installment of principal and
interest that is received by Lender before the date it is due shall be deemed to have been received
on the due date solely for the purpose of calculating interest due.

(f) Accrued Interest. Any accrued interest remaining past due for 30 days or more shall be
added to and become part of the unpaid principal balance and shall bear interest at the rate or
rates specified in this Note. Any reference herein to “accrued interest” shall refer to accrued
interest which has not become part of the unpaid principal balance. Any amount added to principal
pursuant to the Loan Documents shall bear interest at the applicable rate or rates specified in
this Note and shall 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 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 that payment 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 shall constitute or be deemed to constitute either a waiver of
the unpaid amounts or an accord and satisfaction.

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

6. Acceleration. If an Event of Default has occurred and is continuing, the entire unpaid
principal balance, any accrued interest, the prepayment premium payable under Paragraph 10, if any,
and all other amounts payable under this Note and any other Loan Document shall at once become due
and payable, at the option of Lender, without any prior notice to Borrower. Lender may exercise
this option to accelerate regardless of any prior forbearance.

7. Late Charge. If any monthly installment due hereunder is not received by Lender on or
before the 10th day of each month or if any other amount payable under this Note or under the
Security Instrument or any other Loan Document is not received by Lender within 10 days after the
date such amount is due, counting from and including the date such amount is due, Borrower shall
pay to Lender, immediately and without demand by Lender, a late charge equal to 5 percent of such
monthly installment or other amount due. 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 Paragraph 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 Paragraph
8.

8. Default Rate. So long as any monthly installment or any other payment due under this Note
remains past due for 30 days or more, interest under this Note shall accrue on the unpaid principal
balance from the earlier of the due date of the first unpaid monthly installment or other payment
due, as applicable, at the Default Rate. If the unpaid principal balance and all accrued interest
are not paid in full on the Maturity Date, the unpaid principal balance and all accrued interest
shall bear interest from the Maturity Date at the Default Rate. Borrower also acknowledges that
its failure to make timely payments will cause Lender to incur additional expenses in servicing and
processing the Loan, that, during the time that any monthly installment or payment under this Note
is delinquent for more than 30 days, 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 that it is extremely
difficult and impractical to determine those additional costs and expenses. Borrower also
acknowledges that, during the time that any monthly installment or other payment due under this
Note is delinquent for more than 30 days, 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 Paragraph 9, Borrower shall have no personal
liability under this Note, the Security Instrument or any other Loan Document for the repayment of
the Indebtedness or for the performance of 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 shall be Lender’s exercise of its rights and remedies with respect to the
Mortgaged Property (as such term is defined in the Security Instrument) and any other collateral
held by Lender as security for the Indebtedness. This limitation on Borrower’s liability shall not
limit or impair Lender’s enforcement of its rights against any guarantor of the Indebtedness or any
guarantor of any obligations of Borrower.

(b) Borrower shall be personally liable to Lender for the repayment of a portion of the
Indebtedness equal to any loss or damage suffered by Lender as a result of:

(1) failure of Borrower to pay to Lender upon demand after an Event of Default, all
Rents to which Lender is entitled under Section 3(a) of the Security Instrument and the
amount of all security deposits collected by Borrower from tenants then in residence;

(2) failure of Borrower to apply all insurance proceeds and condemnation proceeds as
required by the Security Instrument;

(3) failure of Borrower to comply with Section 14(d) or (e) of the Security Instrument
relating to the delivery of books and records, statements, schedules and reports;

(4) fraud or written material misrepresentation by Borrower, Key Principal or any
officer, director, partner, member or employee of Borrower in connection with the
application for or creation of the Indebtedness or any request for any action or consent by
Lender; or

(5) failure to apply Rents, first, to the payment of reasonable operating expenses
(other than Property management fees that are not currently payable pursuant to the terms of
an Assignment of Management Agreement or any other agreement with Lender executed in
connection with the Loan) and then to Debt Service Amounts, except that Borrower will not be
personally liable (i) to the extent that Borrower lacks the legal right to direct the
disbursement of such sums because of a bankruptcy, receivership or similar judicial
proceeding, or (ii) with respect to Rents that are distributed in any calendar year if
Borrower has paid all operating expenses and Debt Service Amounts for that calendar year.

(c) Borrower shall become personally liable to Lender for the repayment of all of the
Indebtedness upon the occurrence of any of the following Events of Default:

(1) Borrower’s acquisition of any property or operation of any business not permitted
by Section 33 of the Security Instrument; or

(2) a Transfer that is an Event of Default under Section 21 of the Security Instrument.

(d) To the extent that Borrower has personal liability under this Paragraph 9, Lender may
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 Security
Instrument, any other Loan Document or applicable law. For purposes of this Paragraph 9, the term
“Mortgaged Property” shall not include any funds that (1) have been applied by Borrower as required
or permitted by the Security Instrument prior to the occurrence of an Event of Default, or (2)
Borrower was unable to apply as required or permitted by the Security Instrument because of a
bankruptcy, receivership, or similar judicial proceeding.

10. Voluntary and Involuntary Prepayments.

(a) A prepayment premium shall be payable in connection with any prepayment made under this
Note as provided below:

(1) Borrower may voluntarily prepay all (but not less than all) of the unpaid principal
balance of this Note only on the last calendar day of a calendar month (the “Last Day of the
Month”) and only if Borrower has complied with all of the following:

	 	(i)	 	Borrower must give Lender at least 30 days (if
given via U.S. Postal Service) or 20 days (if given via facsimile,
email or overnight courier), but not more than 60 days, prior written
notice of Borrower’s intention to make a prepayment (the “Prepayment
Notice”). The Prepayment Notice shall be given in writing (via
facsimile, email, U.S. Postal Service or overnight courier) and
addressed to Lender. The Prepayment Notice shall include, at a
minimum, the Business Day upon which Borrower intends to make the
prepayment (the “Intended Prepayment Date”).

	 	(ii)	 	Borrower acknowledges that the Lender is not
required to accept any voluntary prepayment of this Note on any day
other than the Last Day of the Month even (A) if Borrower has given a
Prepayment Notice with an Intended Prepayment Date other than the Last
Day of the Month or (B) if the Last Day of the Month is not a Business
Day. Therefore, even if Lender accepts a voluntary prepayment on any
day other than the Last Day of the Month, for all purposes (including
the accrual of interest and the calculation of the prepayment premium),
any prepayment received by Lender on any day other than the Last Day of
the Month shall be deemed to have been received by Lender on the Last
Day of the Month and any prepayment calculation will include interest
to and including the Last Day of the Month in which such prepayment
occurs. If the Last Day of the Month is not a Business Day, then the
Borrower must make the payment on the Business Day immediately
preceding the Last Day of the Month.

	 	(iii)	 	Any prepayment shall be made by paying (A) the
amount of principal being prepaid, (B) all accrued interest (calculated
to the Last Day of the Month), (C) all other sums due Lender at the
time of such prepayment, and (D) the prepayment premium calculated
pursuant to Schedule A.

	 	(iv)	 	If, for any reason, Borrower fails to prepay
this Note (A) within five (5) Business Days after the Intended
Prepayment Date or (B) if the prepayment occurs in a month other than
the month stated in the original Prepayment Notice, then Lender shall
have the right, but not the obligation, to recalculate the prepayment
premium based upon the date that Borrower actually prepays this Note
and to make such calculation as described in Schedule A attached
hereto. For purposes of such recalculation, such new prepayment date
shall be deemed the “Intended Prepayment Date.”

(2) Upon Lender’s exercise of any right of acceleration under this Note, Borrower shall
pay to Lender, in addition to the entire unpaid principal balance of this Note outstanding
at the time of the acceleration, (i) all accrued interest and all other sums due Lender
under this Note and the other Loan Documents, and (ii) the prepayment premium calculated
pursuant to Schedule A.

(3) Any application by Lender of any collateral or other security to the repayment of
any portion of the unpaid principal balance of this Note prior to the Maturity Date and in
the absence of acceleration shall be deemed to be a partial prepayment by Borrower,
requiring the payment to Lender by Borrower of a prepayment premium.

(b) Notwithstanding the provisions of Paragraph 10(a), no prepayment premium shall be payable
(1) with respect to any prepayment occurring as a result of the application of any insurance
proceeds or condemnation award under the Security Instrument, or (2) as provided in subparagraph
(b) of Schedule A.

(c) Schedule A is hereby incorporated by reference into this Note.

(d) Any required prepayment of less than the entire unpaid principal balance of this Note
shall not extend or postpone the due date of any subsequent monthly installments or change the
amount of such installments, unless Lender agrees otherwise in writing.

(e) Borrower recognizes that any prepayment of the unpaid principal balance of this Note,
whether voluntary or involuntary or resulting from a 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 on Schedule A represents
a reasonable estimate of the damages Lender will incur because of a prepayment.

(f) Borrower further acknowledges that the prepayment premium provisions of this Note are a
material part of the consideration for the loan evidenced by this Note, and acknowledges 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.

11. Costs and Expenses. Borrower shall pay on demand all expenses and costs, including fees
and out-of-pocket expenses of attorneys and expert witnesses and costs of investigation, 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.

12. Forbearance. Any forbearance by Lender in exercising any right or remedy under this Note,
the Security Instrument, or any other Loan Document or otherwise afforded by applicable law, shall
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, shall 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 shall
not constitute an election by Lender of remedies so as to preclude the exercise of any other right
or remedy available to Lender.

13. Waivers. 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 are waived by Borrower, Key
Principal, and all endorsers and guarantors of this Note and all other third party obligors.

14. Loan Charges. Borrower and Lender intend at all times to comply with the law of the State
of Texas governing the maximum rate or amount of interest payable on or in connection with this
Note and the Indebtedness (or applicable United States federal law to the extent that it permits
Lender to contract for, charge, take, reserve or receive a greater amount of interest than under
Texas law). If the applicable law is ever judicially interpreted so as to render usurious any
amount payable under this Note or under any other Loan Document, or contracted for, charged, taken,
reserved or received with respect to the Indebtedness, or of acceleration of the maturity of this
Note, or if any prepayment by Borrower results in Borrower having paid any interest in excess of
that permitted by any applicable law, then Borrower and Lender expressly intend that all excess
amounts collected by Lender shall be applied to reduce the unpaid principal balance of this Note
(or, if this Note has been or would thereby be paid in full, shall be refunded to Borrower), and
the provisions of this Note, the Security Instrument and any other Loan Documents immediately shall
be deemed reformed and the amounts thereafter collectible under this Note or any other Loan
Document reduced, without the necessity of the execution of any new documents, so at to comply with
any applicable law, but so as to permit the recovery of the fullest amount otherwise payable under
this Note or any other Loan Document. The right to accelerate the maturity of this Note does not
include the right to accelerate any interest which has not otherwise accrued on the date of such
acceleration, and Lender does not intend to collect any unearned interest in the event of
acceleration. All sums paid or agreed to be paid to Lender for the use, forbearance or detention
of the Indebtedness shall, to the extent permitted by any applicable law, be amortized, prorated,
allocated and spread throughout the full term of the Indebtedness until payment in full so that the
rate or amount of interest on account of the Indebtedness does not exceed the applicable usury
ceiling. Notwithstanding any provision contained in this Note, the Security Instrument or any
other Loan Document that permits the compounding of interest, including any provision by which any
accrued interest is added to the principal amount of this Note, the total amount of interest that
Borrower is obligated to pay and Lender is entitled to receive with respect to the Indebtedness
shall not exceed the amount calculated on a simple (i.e. noncompounded) interest basis at the
maximum rate on principal amounts actually advanced to or for the account of Borrower, including
all current and prior advances and any advances made pursuant to the Security Instrument or other
Loan Documents (such as for the payment of taxes, insurance premiums and similar expenses or
costs).

15. Commercial Purpose. Borrower represents that the Indebtedness is being incurred by
Borrower solely for the purpose of carrying on a business or commercial enterprise, and not for
personal, family or household purposes.

16. Counting of Days. Except where otherwise specifically provided, any reference in this
Note to a period of “days” means calendar days, not Business Days.

17. Governing Law. This Note shall be governed by the law of the jurisdiction in which the
Land is located.

18. Captions. The captions of the paragraphs of this Note are for convenience only and shall
be disregarded in construing this Note.

19. Notices. All notices, demands and other communications required or permitted to be given
by Lender to Borrower pursuant to this Note shall be given in accordance with Section 31 of the
Security Instrument.

20. Consent to Jurisdiction and Venue. Borrower and Key Principal each agrees that any
controversy arising under or in relation to this Note shall be litigated exclusively in the
Property Jurisdiction. The state and federal courts and authorities with jurisdiction in the
Property Jurisdiction shall have exclusive jurisdiction over all controversies which shall arise
under or in relation to this Note. Borrower and Key Principal each 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.

21. WAIVER OF TRIAL BY JURY. BORROWER, KEY PRINCIPAL 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, KEY PRINCIPAL 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.

ATTACHED SCHEDULES. The following Schedules are attached to this Note:

	 	 	 	 	 
	[ X ] Schedule A	Prepayment Premium (required)
	
 
	 	Schedule B
	 	Modifications to Multifamily Note

1

IN WITNESS WHEREOF, Borrower has signed and delivered this Note or has caused this Note to be
signed and delivered by its duly authorized representative.

BORROWER

Apartment REIT Bay Point Resort, LLC,

a Texas limited liability company

	 	 	 	 	 	 	 
	By:	 	NNN Apartment REIT Holdings, L.P.,
	 	 	Virginia limited partnership	 	 
	Its:

	 	Manager
	 	

	 	

	 	 	By:	 	NNN Apartment REIT, Inc.,
	 	 	 	 	a Maryland corporation
	
 
	 	Its:
	 	General Partner
	 	

	
 
	 	 	 	By:
	 	/s/ Stanley J. Olander
	
 
	 	 	 	 	 	 
	
 
	 	 	 	Name:
	 	Stanley J. Olander
	
 
	 	 	 	 	 	 
	
 
	 	 	 	Title:
	 	Chief Executive Officer
	
 
	 	 	 	 	 	 

Borrower’s Social Security/Employer ID Number: 26-0561131

Fannie Mae Commitment Number: 851700

2

PAY TO THE ORDER OF

WITHOUT RECOURSE

LENDER:

PNC ARCS LLC,

a Delaware limited liability company

	 	 	 
	By:

	 	/s/ Larry R. Sneathern
	
 
	 	 
	Its:

	 	Larry R. Sneathern

Senior Vice President

ARCS Loan Number: 310228785

	 	 	Fannie Mae Commitment Number: 851700

3

SCHEDULE A

PREPAYMENT PREMIUM

Any prepayment premium payable under Paragraph 10 of this Note shall be computed as follows:

	 	(a)	 	If the prepayment is made at any time after the date of this Note and before
the Yield Maintenance Period End Date, the prepayment premium shall be the greater of:

	 	(i)	 	1% of the amount of principal being prepaid; or

	 	(ii)	 	The product obtained by multiplying:

	 	(A)	 	the amount of principal being prepaid,

	 	 	 	by

	 	(B)	 	the difference obtained by subtracting from the
Fixed Rate on this Note the yield rate (the “Yield Rate”) on the 4.500%
U.S. Treasury Security due May, 2017 (the “Specified U.S. Treasury
Security”), on the twenty-fifth Business Day preceding (x) the Intended
Prepayment Date, or (y) the date Lender accelerates the Loan or
otherwise accepts a prepayment pursuant to Paragraph 10(a)(3) of this
Note, as the Yield Rate is reported in The Wall Street Journal,

	 	 	 	by

	 	(C)	 	the present value factor calculated using the
following formula:

1 — (1 + r)-n/12

r

[r = Yield Rate

n = the number of months remaining between (1) either of
the following: (x) in the case of a voluntary prepayment, the
Last Day of the Month during which the prepayment is made, or
(y) in any other case, the date on which Lender accelerates
the unpaid principal balance of this Note and (2) the Yield
Maintenance Period End Date]

In the event that no Yield Rate is published for the Specified U.S.
Treasury Security, then the nearest equivalent non-callable U.S.
Treasury Security having a maturity date closest to the Yield
Maintenance Period End Date of this Note shall be selected at
Lender’s discretion. If the publication of such Yield Rates in The
Wall Street Journal is discontinued, Lender shall determine such
Yield Rates from another source selected by Lender.

	 	(b)	 	Notwithstanding the provisions of Paragraph 10(a) of this Note, no prepayment
premium shall be payable with respect to any prepayment made on or after the Yield
Maintenance Period End Date.

	 
	/s/ SJO
	Borrower Initials

4

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