Document:

Multifamily Note

 Exhibit 10.7 
 Freddie Mac Loan Number: 968733875 
 Property Name: Pines of York Apartments

 MULTIFAMILY NOTE 
 (CME) 
 MULTISTATE – FIXED RATE 

DEFEASANCE 
  

			
	US $15,771,000.00	  	Effective Date: As of November 15, 2011

 FOR VALUE RECEIVED, FP-1, LLC, a Virginia limited liability company (together with such party’s or
parties’ successors and assigns, “Borrower”) jointly and severally (if more than one) promises to pay to the order of PRUDENTIAL AFFORDABLE MORTGAGE COMPANY, a Delaware corporation, the principal sum of $15,771,000.00,
with interest on the unpaid principal balance, as hereinafter provided. 
  

	1.	Defined Terms. 

  

	 	(a)	As used in this Note: 

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

 “Business Day” means any day other than a Saturday, a Sunday or any other day on which Lender or the national
banking associations are not open for business. 
 “Cut-off Date” means the 12th Installment Due Date. 

“Defeasance Date” means the 2nd anniversary of the “startup date” of the last REMIC within the meaning of Section 860G(a)(9) of the Tax
Code which holds all or any portion of the Loan. 
 “Default Rate” means an annual interest rate equal to 4
percentage points above the Fixed Interest Rate. However, at no time will the Default Rate exceed the Maximum Interest Rate. 

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

“Fixed Interest Rate” means the annual interest rate of 4.460%. 

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

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

  

			
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 “Lockout Period” means the period beginning on the day that this Note is
assigned to a REMIC trust until and including the Defeasance Date. The Lockout Period only applies if this Note is assigned to a REMIC trust prior to the Cut-off Date. 
 “Maturity Date” means the earlier of (i) December 1, 2021 (“Scheduled Maturity Date”), or (ii) the date on which the unpaid principal balance of this Note
becomes due and payable by acceleration or otherwise pursuant to the Loan Documents or the exercise by Lender of any right or remedy under any Loan Document; provided, however, that if the unpaid principal balance of this Note becomes due and
payable by acceleration but such acceleration is rendered null and void and of no further force and effect by operation of law or agreement by Lender, such acceleration will have no effect on the Maturity Date. 

“Maximum Interest Rate” means the rate of interest which results in the maximum amount of interest allowed by applicable
law. 
 “Prepayment Premium Period” means the period during which, if a prepayment of principal occurs, a
prepayment premium will be payable by Borrower to Lender. The Prepayment Premium Period is the period from and including the date of this Note until but not including (i) the day that this Note is assigned to a REMIC trust, if this Note is
assigned to a REMIC trust prior to the Cut-off Date, or (ii) the first day of the Window Period, if this Note is not assigned to a REMIC trust or if this Note is assigned to a REMIC trust on or after the Cut-off Date. 

“Security Instrument” means the multifamily mortgage, deed to secure debt or deed of trust effective as of the effective
date of this Note, from Borrower to or for the benefit of Lender and securing this Note, as amended, modified or supplemented from time to time. 
 “Window Period” means the 3 consecutive calendar month period prior to the Scheduled Maturity Date. 
 “Yield Maintenance Expiration Date” means June 1, 2021. 

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

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

 

	2.	Address for Payment. All payments due under this Note will be payable at c/o Prudential Asset Resources, Inc., 2100 Ross Avenue, Suite 2500, Dallas, Texas 75201,
Attention: Asset Management Department, Reference Loan No.             , or such other place as may be designated by Notice to Borrower from or on behalf of Lender.

  

	3.	Payments. 

  

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

  

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

  

	 	(c)	Unless disbursement of principal is made by Lender to Borrower on the first day of a calendar month, interest for the period beginning on the date of disbursement and
ending on and including the last day of such calendar month will be payable by Borrower simultaneously with the execution of this Note. If disbursement of principal is made by Lender to Borrower on the first day of a calendar month, then no payment
will be due from Borrower at the time of the execution of this Note. The Installment Due Date for the first monthly installment payment under Section 3(d) of interest-only or principal and interest, as applicable, will be the First Installment
Due Date set forth in Section 1(a) of this Note. Except as provided in this Section 3(c), Section 10 and in Section 11, accrued interest will be payable in arrears. 

 

	 	(d)    (i)	Beginning on the First Installment Due Date, and continuing until and including the monthly installment due on December 1, 2013, accrued interest-only will be
payable by Borrower in consecutive monthly installments due and payable on the first day of each calendar month. The amount of each monthly installment of interest-only payable pursuant to this Section 3(d)(i) on an Installment Due Date will
vary, and will equal $1,953.85167 multiplied by the number of days in the month prior to the Installment Due Date. 

  

	 	(ii)	Beginning on January 1, 2014, and continuing until and including the monthly installment due on the Maturity Date, principal and accrued interest will be payable
by Borrower in consecutive monthly installments due and payable on the first day of each calendar month. The amount of the monthly installment of principal and interest payable pursuant to this Section 3(d)(ii) on an Installment Due Date will
be $79,534.95. 

  

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

 

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

 

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

  

	 	(h)	Any accrued interest remaining past due for 30 days or more, at Lender’s discretion, may be added to and become part of the unpaid principal balance of this Note
and any reference to “accrued interest” will refer to accrued interest which has not become part of the unpaid principal balance. Any amount added to 

  

			
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principal pursuant to the Loan Documents will bear interest at the applicable rate or rates specified in this Note and will be payable with such interest upon demand by Lender and absent such
demand, as provided in this Note for the payment of principal and interest. 
  

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

  

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

  

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

  

	7.	Late Charge. 

  

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

  

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

 

	8.	Default Rate. 

  

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

  

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

  

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

  

	9.	Limits on Personal Liability. 

  

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

  

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

  

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

  

	 	(i)	 Borrower fails to pay to Lender upon demand after an Event of Default all Rents to which Lender is entitled under Section 3 of the Security
Instrument and the amount of all security deposits collected by Borrower from tenants then in residence. However, Borrower will not be personally 

  

			
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liable for any failure described in this Section 9(c)(i) if Borrower is unable to pay to Lender all Rents and security deposits as required by the Security Instrument because of a valid
order issued in a bankruptcy, receivership, or similar judicial proceeding. 

  

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

  

	 	(iii)	Either of the following occurs: 

  

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

  

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

  

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

  

	 	[Collect]	Hazard Insurance premiums or other Insurance premiums 

	 	[Collect]	Taxes or payments in lieu of taxes (PILOT) 

	 	[Deferred]	water and sewer charges (that could become a lien on the Mortgaged Property) 

	 	[N/A]	Ground Rents 

	 	[Deferred]	assessments or other charges (that could become a lien on the Mortgaged Property) 

 

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

 

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

 

	 	(vii)	Any of the following Transfers occurs: 

  

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

  

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

  

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

 

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

 

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

 

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

  

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

 

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

 

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

  

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

  

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

  

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

  

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

  

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

  

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

 

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

  

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

 

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

  

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

  

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

 

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

  

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

  

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

 

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

  

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

 

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

  

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

  

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

 

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

  

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

  

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

 

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

  

	 	(c)	During the Prepayment Premium Period, Borrower may voluntarily prepay all of the unpaid principal balance of this Note on an Installment Due Date so long as Borrower
designates the date for such prepayment in a Notice from Borrower to Lender given at least 30 days prior to the date of such prepayment. Unless Lender has previously notified Borrower of the expiration of the Prepayment Premium Period, upon receipt
of such Notice from Borrower, Lender will notify Borrower if the Note has been assigned to a REMIC trust prior to the Cut-off Date and the Prepayment Premium Period has expired. If an Installment Due Date (as defined in Section 1(a)) falls on a
day which is not a Business Day, then with respect to payments made under this Section 10 only, the term “Installment Due Date” will mean the Business Day immediately preceding the scheduled Installment Due Date.

  

	 	(d)	Notwithstanding Section 10(c), Borrower may voluntarily prepay all of the unpaid principal balance of this Note on a Business Day other than an Installment Due
Date if Borrower provides Lender with the Notice set forth in Section 10(c) above and meets the other requirements set forth in this Section 10(d). Borrower acknowledges that Lender has agreed that Borrower may prepay principal on a
Business Day other than an Installment Due Date only because Lender will deem any prepayment received by Lender on any day other than an Installment Due 

  

			
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Date to have been received on the Installment Due Date immediately following such prepayment and Borrower will be responsible for all interest that would have been due if the prepayment had
actually been made on the Installment Due Date immediately following such prepayment. 

  

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

  

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

  

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

  

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

  

	 	(B)	the product obtained by multiplying: 

  

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

  

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

 

	 	(3)	the Present Value Factor. 

 For
purposes of Section 10(f)(i)(B), the following definitions will apply: 
 Monthly Note Rate: 1/12 of the Fixed
Interest Rate, expressed as a decimal calculated to 5 digits. 
 Prepayment Date: in the case of a voluntary prepayment,
the date on which the prepayment is made; in the case of the application by Lender of collateral or security to a portion of the principal balance, the date of such application. 

Assumed Reinvestment Rate: 1/12 of the yield rate expressed as a decimal to 2 digits, as of the close of the trading session which
is 5 Business Days before the Prepayment Date, found among the Daily Treasury Yield Curve Rates, commonly known as Constant Maturity Treasury (“CMT”) rates, with a maturity equal to the remaining Yield Maintenance Period, as
reported on the U.S. Department of the Treasury website. If no published CMT maturity matches the remaining Yield Maintenance Period, Lender will interpolate as a decimal to 2 digits the yield rate between (a) the CMT with a maturity closest
to, but shorter than, the remaining Yield Maintenance Period, and (b) the CMT with a maturity closest to, but longer than, the remaining Yield Maintenance Period, as follows: 

  

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

 In the event the U.S. Department of the Treasury ceases publication of the CMT rates, the Assumed Reinvestment Rate will
equal the yield rate on the first U.S. Treasury security which is not callable or indexed to inflation and which matures after the expiration of the Yield Maintenance Period. 
 Present Value Factor: the factor that discounts to present value the costs resulting to Lender from the difference in interest rates during the months remaining in the Yield Maintenance Period,
using the Assumed Reinvestment Rate as the discount rate, with monthly compounding, expressed numerically as follows: 
 

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

ARR = Assumed Reinvestment Rate 
  

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

  

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

  

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

  

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

 

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

  

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

  

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

  

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

  

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

  

			
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	 	(e)	After the expiration of the Lockout Period and the Defeasance Period, Borrower may voluntarily prepay all of the unpaid principal balance of this Note on an Installment
Due Date so long as Borrower designates the date for such prepayment in a Notice from Borrower to Lender given at least 30 days prior to the date of such prepayment. If an Installment Due Date (as defined in Section 1(a)) falls on a day which
is not a Business Day, then with respect to payments made under this Section 11 only, the term “Installment Due Date” will mean the Business Day immediately preceding the scheduled Installment Due Date. 

 

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

  

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

  

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

  

	 	(i)	Borrower recognizes that any prepayment of any of the unpaid principal balance of this Note, whether voluntary or involuntary or resulting from an Event of Default by
Borrower, will result in Lender’s incurring loss, including reinvestment loss, additional expense and frustration or impairment of Lender’s ability to meet its commitments to third parties. Borrower agrees to pay to Lender upon demand
damages for the detriment caused by any prepayment, and agrees that it is extremely difficult and impractical to ascertain the extent of such damages. Borrower therefore acknowledges and agrees that the formula for calculating prepayment premiums
set forth in Section 11(c) of this Note represents a reasonable estimate of the damages Lender will incur because of a prepayment. Borrower further acknowledges that the lockout and prepayment premium provisions of this Note are a material part
of the consideration for the Loan, and that the terms of this Note are in other respects more favorable to Borrower as a result of the Borrower’s voluntary agreement to the prepayment premium provisions. 

 

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

  

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

 

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

  

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

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

 

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

If Borrower obtains a release of the Mortgaged Property from the lien of the Security Instrument pursuant to Section 11.12 of the
Loan Agreement, Borrower will have no personal liability under this Note or the Pledge Agreement for the repayment of the Indebtedness or for the performance of any other obligations of Borrower under this Note or the Pledge Agreement (other than
any liability under Section 6.12 or Section 10.02 of the Loan Agreement for events that occur prior to the Defeasance Closing Date, whether discovered before or after the Defeasance Closing Date), and Lender’s only recourse for the
satisfaction of the Indebtedness and the performance of such obligations will be Lender’s exercise of its rights and remedies with respect to the collateral held by Lender under the Pledge Agreement as security for the Indebtedness. 

 

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

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

 

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

  

	14.	 Forbearance. Any forbearance by Lender in exercising any right or remedy under this Note, the Loan Agreement, or any other Loan Document or
otherwise afforded by applicable law, will not be a waiver of or preclude the exercise of that or any other right 

  

			
	 Multifamily Multistate Fixed Rate Note (CME)
 Defeasance
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or remedy. The acceptance by Lender of any payment after the due date of such payment, or in an amount which is less than the required payment, will not be a waiver of Lender’s right to
require prompt payment when due of all other payments or to exercise any right or remedy with respect to any failure to make prompt payment. Enforcement by Lender of any security for Borrower’s obligations under this Note will not constitute an
election by Lender of remedies so as to preclude the exercise of any other right or remedy available to Lender. 

  

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

 

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

  

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

  

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

  

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

 

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

 

	21.	Notices; Written Modifications. 

  

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

  

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

  

			
	 Multifamily Multistate Fixed Rate Note (CME)
 Defeasance
	  	Page 15

	 	
modified or rendered void by Lender at Lender’s option, by Notice to Borrower and the transferee, as a condition of Lender’s consent. 

 

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

  

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

  

	24.	State-Specific Provisions. N/A. 

  

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

 Recourse for Non-Conforming Property 
  

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

 ̈ Exhibit A     Modifications to Multifamily Note 

IN WITNESS WHEREOF, and in consideration of the Lender’s agreement to lend Borrower the principal amount set forth above, Borrower has signed and
delivered this Note under seal or has 

  

			
	 Multifamily Multistate Fixed Rate Note (CME)
 Defeasance
	  	Page 16

 
caused this Note to be signed and delivered under seal by its duly authorized representative. Borrower intends that this Note will be deemed to be signed and delivered as a sealed instrument.

  

									
	FP-1, LLC, a Virginia limited liability company
		
	By:	 	DF Pines of York, LLC, a Virginia limited liability company, its Operating Member
			
		 	By:	 	DF Pines Manager, Inc., a Virginia corporation, its Manager
					
		 		 	By:	 	/s/ J. Guy Buck	 	(SEAL)
		 		 		 	J. Guy Buck
		 		 		 	 Vice President, Secretary and
 Treasurer

  

	
	45-3611686
	Borrower’s Social Security/Employer ID Number

  

			
	 Multifamily Multistate Fixed Rate Note (CME)
 Defeasance
	  	Page 17

			
	PAY TO THE ORDER OF FEDERAL HOME LOAN MORTGAGE CORPORATION, WITHOUT RECOURSE.
	
	PRUDENTIAL AFFORDABLE MORTGAGE COMPANY, a Delaware corporation

					
			
	By:	 	/s/ Mia T. Bergen	 	(SEAL)
		 	Mia T. Bergen	 	
		 	Vice President	 	

 Freddie Mac Loan No. 968733875 

  

			
	 Multifamily Multistate Fixed Rate Note (CME)
 Defeasance
	  	Page 18

 RIDER TO MULTIFAMILY NOTE 

(CME AND PORTFOLIO) 
 RECOURSE FOR NON-CONFORMING PROPERTY 
 (Revised 9-1-2011) 

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

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

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

 

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

  

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

  

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

 EXHIBIT A 
 MODIFICATIONS TO MULTIFAMILY NOTE 
 The following modifications are made to the text of the Note
that precedes this Exhibit.Multifamily Deed of Trust

 Exhibit 10.8 
 Prepared by, and after recording 
 return to: 

Tax Map ID/Tax Parcel Number: 
                                  
                      
 Brian J.
Iwashyna, Esquire 
 Troutman Sanders LLP 
 P.O. Box 1122 
 Richmond, VA 23218 

MULTIFAMILY DEED OF TRUST, 
 ASSIGNMENT OF RENTS, 
 SECURITY AGREEMENT AND FIXTURE FILING

 VIRGINIA 
 (CME AND PORTFOLIO) 

 FHLMC Loan No. 968733875 

Pines of York Apartments 
 MULTIFAMILY DEED OF TRUST, 
 ASSIGNMENT OF RENTS, 

SECURITY AGREEMENT AND FIXTURE FILING 
 VIRGINIA 
 (CME AND PORTFOLIO) 

THIS MULTIFAMILY DEED OF TRUST, ASSIGNMENT OF RENTS, SECURITY AGREEMENT AND FIXTURE FILING (“Instrument”) is made to
be effective as of the 15th day of November, 2011, by
FP-1, LLC, a limited liability company organized and existing under the laws of Virginia, whose address is c/o Drucker & Falk, 11824 Fishing Point Drive, Newport News, Virginia 23606, as grantor (“Borrower”), to
MARK S. SHIEMBOB, a resident of the City of Richmond, Virginia and BERNICE H. CILLEY, a resident of the County of Henrico Virginia, whose business address is Troutman Sanders LLP, 1001 Haxall Point, Richmond, Virginia 23219, as trustee
(“Trustee”), index as grantee for the benefit of PRUDENTIAL AFFORDABLE MORTGAGE COMPANY, a corporation organized and existing under the laws of Delaware, whose address is 4350 Fairfax Drive, Suite 700, Arlington, Virginia
22203, as beneficiary (“Lender”) index as a grantee. Borrower’s organizational identification number, if applicable, is S214400-6. 
 RECITAL 
 Borrower, in consideration of the Indebtedness and the trust created by this
Instrument, irrevocably grants, conveys and assigns to Trustee, in trust, with power of sale, the Mortgaged Property, including the Land located in the County of York, Commonwealth of Virginia and described in Exhibit A attached to this
Instrument. 
 AGREEMENT 
 TO SECURE TO LENDER the repayment of the Indebtedness evidenced by Borrower’s Multifamily Note payable to Lender, dated as of the date of this Instrument, and maturing on December 1, 2021
(“Maturity Date”), the principal amount of $15,771,000.00, and all renewals, extensions and modifications of the Indebtedness, and the performance of the covenants and agreements of Borrower contained in the Loan Documents.

 Borrower represents and warrants that Borrower is lawfully seized of the Mortgaged Property, has the right, power and authority to grant,
convey and assign the Mortgaged Property, and that the Mortgaged Property is unencumbered, except as shown on the schedule of exceptions to coverage in the title policy issued to and accepted by Lender contemporaneously with the execution and
recordation of this Instrument and insuring Lender’s interest in the Mortgaged Property (“Schedule of Title Exceptions”). Borrower covenants that Borrower will warrant and defend generally the title to the Mortgaged Property
against all claims and demands, subject to any easements and restrictions listed in the Schedule of Title Exceptions. 

  

			
	 Virginia
 Multifamily Deed of
Trust, Assignment of Rents,
 Security Agreement and Fixture Filing (CME and Portfolio)
	  	

 UNIFORM COVENANTS 

(CME AND PORTFOLIO) 
 (Revised 9-1-2011) 
 Covenants. In consideration of the mutual promises set forth in
this Instrument, Borrower and Lender covenant and agree as follows: 
  

	1.	Definitions. The following terms, when used in this Instrument (including when used in the above recitals), will have the following meanings and any capitalized
term not specifically defined in this Instrument will have the meaning ascribed to that term in the Loan Agreement: 

 “Attorneys’ Fees and Costs” means (a) fees and out-of-pocket costs of Lender’s and Loan Servicer’s attorneys, as applicable, including costs of Lender’s and Loan
Servicer’s in-house counsel, support staff costs, costs of preparing for litigation, computerized research, telephone and facsimile transmission expenses, mileage, deposition costs, postage, duplicating, process service, videotaping and similar
costs and expenses; (b) costs and fees of expert witnesses, including appraisers; (c) investigatory fees; and (d) the costs for any opinion required by Lender pursuant to the terms of the Loan Documents. 

“Borrower” means all Persons identified as “Borrower” in the first paragraph of this Instrument, together with
their successors and assigns. 
 “Business Day” means any day other than a Saturday, a Sunday or any other day
on which Lender or the national banking associations are not open for business. 
 “Event of Default” means the
occurrence of any event described in Section 8. 
 “Fixtures” means all property owned by Borrower which is
attached to the Land or the Improvements so as to constitute a fixture under applicable law, including: machinery, equipment, engines, boilers, incinerators and installed building materials; systems and equipment for the purpose of supplying or
distributing heating, cooling, electricity, gas, water, air or light; antennas, cable, wiring and conduits used in connection with radio, television, security, fire prevention or fire detection or otherwise used to carry electronic signals;
telephone systems and equipment; elevators and related machinery and equipment; fire detection, prevention and extinguishing systems and apparatus; security and access control systems and apparatus; plumbing systems; water heaters, ranges, stoves,
microwave ovens, refrigerators, dishwashers, garbage disposers, washers, dryers and other appliances; light fixtures, awnings, storm windows and storm doors; pictures, screens, blinds, shades, curtains and curtain rods; mirrors; cabinets, paneling,
rugs and floor and wall coverings; fences, trees and plants; swimming pools; and exercise equipment. 
 “Governmental
Authority” means any board, commission, department, agency or body of any municipal, county, state or federal governmental unit, or any subdivision of any of them, that has or acquires jurisdiction over the Mortgaged Property, or the use,
operation or improvement of the Mortgaged Property, or over Borrower. 
 “Ground Lease” means the lease
described in the Loan Agreement pursuant to which Borrower leases the Land, as such lease may from time to time be amended, modified, supplemented, renewed and extended. 

  

			
	 Virginia
 Multifamily Deed of
Trust, Assignment of Rents,
 Security Agreement and Fixture Filing (CME and Portfolio)
	  	Page 2

 “Improvements” means the buildings, structures, improvements now
constructed or at any time in the future constructed or placed upon the Land, including any future alterations, replacements and additions. 
 “Indebtedness” means the principal of, interest at the fixed or variable rate set forth in the Note on, and all other amounts due at any time under, the Note, this Instrument or any other
Loan Document, including prepayment premiums, late charges, default interest, and advances as provided in Section 7 to protect the security of this Instrument. 
 “Land” means the land described in Exhibit A. 

“Leasehold Estate” means Borrower’s interest in the Land and any other real property leased by Borrower pursuant to
the Ground Lease, if applicable, including all of the following: 
  

	 	(a)	All rights of Borrower to renew or extend the term of the Ground Lease. 

  

	 	(b)	All amounts deposited by Borrower with Ground Lessor under the Ground Lease. 

 

	 	(c)	Borrower’s right or privilege to terminate, cancel, surrender, modify or amend the Ground Lease. 

 

	 	(d)	All other options, privileges and rights granted and demised to Borrower under the Ground Lease and all appurtenances with respect to the Ground Lease.

 “Leases” means all present and future leases, subleases, licenses, concessions or grants or
other possessory interests now or hereafter in force, whether oral or written, covering or affecting the Mortgaged Property, or any portion of the Mortgaged Property (including proprietary leases or occupancy agreements if Borrower is a cooperative
housing corporation), and all modifications, extensions or renewals. 
 “Lender” means the entity identified as
“Lender” in the first paragraph of this Instrument, or any subsequent holder of the Note. 
 “Loan
Agreement” means the Multifamily Loan and Security Agreement executed by Borrower in favor of Lender and dated as of the date of this Instrument, as such agreement may be amended from time to time. 

“Loan Documents” means the Note, this Instrument, the Loan Agreement, all guaranties, all indemnity agreements, all
collateral agreements, UCC filings, O&M Programs, the MMP and any other documents now or in the future executed by Borrower, any guarantor or any other Person in connection with the loan evidenced by the Note, as such documents may be amended
from time to time. 
 “Loan Servicer” means the entity that from time to time is designated by Lender or its
designee to collect payments and deposits and receive Notices under the Note, this Instrument and any other Loan Document, and otherwise to service the loan evidenced by the Note for the benefit of Lender. Unless Borrower receives Notice to the
contrary, the Loan Servicer is the entity identified as “Lender” in the first paragraph of this Instrument. 

“Mortgaged Property” means all of Borrower’s present and future right, title and interest in and to all of the
following: 

  

			
	 Virginia
 Multifamily Deed of
Trust, Assignment of Rents,
 Security Agreement and Fixture Filing (CME and Portfolio)
	  	Page 3

	 	(a)	The Land, or, if Borrower’s interest in the Land is pursuant to a Ground Lease, the Ground Lease and the Leasehold Estate. 

 

	 	(b)	The Improvements. 

  

	 	(c)	The Fixtures. 

  

	 	(d)	The Personalty. 

  

	 	(e)	All current and future rights, including air rights, development rights, zoning rights and other similar rights or interests, easements, tenements, rights of way,
strips and gores of land, streets, alleys, roads, sewer rights, waters, watercourses and appurtenances related to or benefiting the Land or the Improvements, or both, and all rights-of-way, streets, alleys and roads which may have been or may in the
future be vacated. 

  

	 	(f)	All proceeds paid or to be paid by any insurer of the Land, the Improvements, the Fixtures, the Personalty or any other part of the Mortgaged Property, whether or not
Borrower obtained the insurance pursuant to Lender’s requirement. 

  

	 	(g)	All awards, payments and other compensation made or to be made by any municipal, state or federal authority with respect to the Land, the Improvements, the Fixtures,
the Personalty or any other part of the Mortgaged Property, including any awards or settlements resulting from condemnation proceedings or the total or partial taking of the Land, the Improvements, the Fixtures, the Personalty or any other part of
the Mortgaged Property under the power of eminent domain or otherwise and including any conveyance in lieu thereof. 

  

	 	(h)	All contracts, options and other agreements for the sale of the Land, or the Leasehold Estate, as applicable, the Improvements, the Fixtures, the Personalty or any
other part of the Mortgaged Property entered into by Borrower now or in the future, including cash or securities deposited to secure performance by parties of their obligations. 

 

	 	(i)	All proceeds from the conversion, voluntary or involuntary, of any of the items described in subsections (a) through (h) inclusive into cash or liquidated
claims, and the right to collect such proceeds. 

  

	 	(j)	All Rents and Leases. 

  

	 	(k)	All earnings, royalties, accounts receivable, issues and profits from the Land, the Improvements or any other part of the Mortgaged Property, and all undisbursed
proceeds of the loan secured by this Instrument. 

  

	 	(l)	All Imposition Reserve Deposits. 

  

	 	(m)	All refunds or rebates of Impositions by Governmental Authority or insurance company (other than refunds applicable to periods before the real property tax year in
which this Instrument is dated). 

  

			
	 Virginia
 Multifamily Deed of
Trust, Assignment of Rents,
 Security Agreement and Fixture Filing (CME and Portfolio)
	  	Page 4

	 	(n)	All tenant security deposits which have not been forfeited by any tenant under any Lease and any bond or other security in lieu of such deposits.

  

	 	(o)	All names under or by which any of the above Mortgaged Property may be operated or known, and all trademarks, trade names, and goodwill relating to any of the Mortgaged
Property. 

 “Note” means the Multifamily Note (including any Amended and Restated Note,
Consolidated, Amended and Restated Note, or Extended and Restated Note) executed by Borrower in favor of Lender and dated as of the date of this Instrument, including all schedules, riders, allonges and addenda, as such Multifamily Note may be
amended, modified and/or restated from time to time. 
 “Notice” or “Notices” means all
notices, demands and other communication required under the Loan Documents, provided in accordance with the requirements of Section 11.03 of the Loan Agreement. 
 “Person” means any natural person, sole proprietorship, corporation, general partnership, limited partnership, limited liability company, limited liability partnership, limited liability
limited partnership, joint venture, association, joint stock company, bank, trust, estate, unincorporated organization, any federal, state, county or municipal government (or any agency or political subdivision thereof), endowment fund or any other
form of entity. 
 “Personalty” means all of the following: 

 

	(a)	Accounts (including deposit accounts) of Borrower related to the Mortgaged Property. 

 

	(b)	Equipment and inventory owned by Borrower, which are used now or in the future in connection with the ownership, management or operation of the Land or Improvements or
are located on the Land or Improvements, including furniture, furnishings, machinery, building materials, goods, supplies, tools, books, records (whether in written or electronic form) and computer equipment (hardware and software).

  

	(c)	Other tangible personal property owned by Borrower which is used now or in the future in connection with the ownership, management or operation of the Land or
Improvements or is located on the Land or in the Improvements, including ranges, stoves, microwave ovens, refrigerators, dishwashers, garbage disposers, washers, dryers and other appliances (other than Fixtures). 

 

	(d)	Any operating agreements relating to the Land or the Improvements. 

  

	(e)	Any surveys, plans and specifications and contracts for architectural, engineering and construction services relating to the Land or the Improvements.

  

	(f)	All other intangible property, general intangibles and rights relating to the operation of, or used in connection with, the Land or the Improvements, including all
governmental permits relating to any activities on the Land and including subsidy or similar payments received from any sources, including a Governmental Authority. 

 

	(g)	Any rights of Borrower in or under letters of credit. 

  

			
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 “Property Jurisdiction” means the jurisdiction in which the Land is
located. 
 “Rents” means all rents (whether from residential or non-residential space), revenues and other
income of the Land or the Improvements, parking fees, laundry and vending machine income and fees and charges for food, health care and other services provided at the Mortgaged Property, whether now due, past due or to become due, and deposits
forfeited by tenants, and, if Borrower is a cooperative housing corporation or association, maintenance fees, charges or assessments payable by shareholders or residents under proprietary leases or occupancy agreements, whether now due, past due, or
to become due. 
 “Taxes” means all taxes, assessments, vault rentals and other charges, if any, whether
general, special or otherwise, including all assessments for schools, public betterments and general or local improvements, which are levied, assessed or imposed by any public authority or quasi-public authority, and which, if not paid, will become
a Lien on the Land or the Improvements. 
  

	2.	Uniform Commercial Code Security Agreement. 

  

	 	(a)	This Instrument is also a security agreement under the Uniform Commercial Code for any of the Mortgaged Property which, under applicable law, may be subjected to a
security interest under the Uniform Commercial Code, for the purpose of securing Borrower’s obligations under this Instrument and to further secure Borrower’s obligations under the Note, this Instrument and other Loan Documents, whether
such Mortgaged Property is owned now or acquired in the future, and all products and cash and non-cash proceeds thereof (collectively, “UCC Collateral”), and by this Instrument, Borrower grants to Lender a security interest in the
UCC Collateral. To the extent necessary under applicable law, Borrower hereby authorizes Lender to prepare and file financing statements, continuation statements and financing statement amendments in such form as Lender may require to perfect or
continue the perfection of this security interest. 

  

	 	(b)	Unless Borrower gives Notice to Lender within 30 days after the occurrence of any of the following, and executes and delivers to Lender modifications or supplements of
this Instrument (and any financing statement which may be filed in connection with this Instrument) as Lender may require, Borrower will not (i) change its name, identity, structure or jurisdiction of organization; (ii) change the location
of its place of business (or chief executive office if more than one place of business); or (iii) add to or change any location at which any of the Mortgaged Property is stored, held or located. 

 

	 	(c)	If an Event of Default has occurred and is continuing, Lender will have the remedies of a secured party under the Uniform Commercial Code, in addition to all remedies
provided by this Instrument or existing under applicable law. In exercising any remedies, Lender may exercise its remedies against the UCC Collateral separately or together, and in any order, without in any way affecting the availability of
Lender’s other remedies. 

  

	 	(d)	This Instrument also constitutes a financing statement with respect to any part of the Mortgaged Property that is or may become a Fixture, if permitted by applicable
law. 

  

	3.	Assignment of Rents; Appointment of Receiver; Lender in Possession. 

  

			
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	 	(a)	As part of the consideration for the Indebtedness, Borrower absolutely and unconditionally assigns and transfers to Lender all Rents. 

 

	 	(i)	It is the intention of Borrower to establish a present, absolute and irrevocable transfer and assignment to Lender of all Rents and to authorize and empower Lender to
collect and receive all Rents without the necessity of further action on the part of Borrower. 

  

	 	(ii)	Promptly upon request by Lender, Borrower agrees to execute and deliver such further assignments as Lender may from time to time require. Borrower and Lender intend
this assignment of Rents to be immediately effective and to constitute an absolute present assignment and not an assignment for additional security only. 

  

	 	(iii)	For purposes of giving effect to this absolute assignment of Rents, and for no other purpose, Rents will not be deemed to be a part of the Mortgaged Property. However,
if this present, absolute and unconditional assignment of Rents is not enforceable by its terms under the laws of the Property Jurisdiction, then the Rents will be included as a part of the Mortgaged Property and it is the intention of Borrower that
in this circumstance this Instrument create and perfect a Lien on Rents in favor of Lender, which Lien will be effective as of the date of this Instrument. 

 

	 	(b)    (i)	Until the occurrence of an Event of Default, Lender hereby grants to Borrower a revocable license to collect and receive all Rents, to hold all Rents in trust for the
benefit of Lender and to apply all Rents to pay the installments of interest and principal then due and payable under the Note and the other amounts then due and payable under the other Loan Documents, including Imposition Reserve Deposits, and to
pay the current costs and expenses of managing, operating and maintaining the Mortgaged Property, including utilities, Taxes and insurance premiums (to the extent not included in Imposition Reserve Deposits), tenant improvements and other capital
expenditures. 

  

	 	(ii)	So long as no Event of Default has occurred and is continuing, the Rents remaining after application pursuant to the preceding sentence may be retained by Borrower free
and clear of, and released from, Lender’s rights with respect to Rents under this Instrument. 

  

	 	(iii)	After the occurrence of an Event of Default, and during the continuance of such Event of Default, Borrower authorizes Lender to collect, sue for and compromise Rents
and directs each tenant of the Mortgaged Property to pay all Rents to, or as directed by, Lender. From and after the occurrence of an Event of Default, and during the continuance of such Event of Default, and without the necessity of Lender entering
upon and taking and maintaining control of the Mortgaged Property directly, or by a receiver, Borrower’s license to collect Rents will automatically terminate and Lender will without Notice be entitled to all Rents as they become due and
payable, including Rents then due and unpaid. Borrower will pay to Lender upon demand all Rents to which Lender is entitled. 

  

	 	(iv)	 At any time on or after the date of Lender’s demand for Rents, Lender may give, and Borrower hereby irrevocably authorizes Lender to give,

  

			
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notice to all tenants of the Mortgaged Property instructing them to pay all Rents to Lender. No tenant will be obligated to inquire further as to the occurrence or continuance of an Event of
Default. No tenant will be obligated to pay to Borrower any amounts which are actually paid to Lender in response to such a notice. Any such notice by Lender will be delivered to each tenant personally, by mail or by delivering such demand to each
rental unit. Borrower will not interfere with and will cooperate with Lender’s collection of such Rents. 

  

	 	(c)	Borrower represents and warrants to Lender that it has not executed any prior assignment of Rents (other than an assignment of Rents securing any prior indebtedness
that is being assigned to Lender, or paid off and discharged with the proceeds of the Loan evidenced by the Note or, if this Instrument is entered into in connection with a Supplemental Loan, other than an assignment of Rents securing any Senior
Indebtedness), that Borrower has not performed any acts and has not executed, and will not execute, any instrument which would prevent Lender from exercising its rights under any Loan Document, and that at the time of execution of this Instrument
there has been no prepayment of any Rents for more than 2 months prior to the due dates of such Rents. 

  

	 	(d)	If an Event of Default has occurred and is continuing, then Lender will have each of the following rights and may take any of the following actions:

  

	 	(i)	Lender may, regardless of the adequacy of Lender’s security or the solvency of Borrower and even in the absence of waste, enter upon and take and maintain full
control of the Mortgaged Property in order to perform all acts that Lender in its discretion determines to be necessary or desirable for the operation and maintenance of the Mortgaged Property, including the execution, cancellation or modification
of Leases, the collection of all Rents, the making of Repairs to the Mortgaged Property and the execution or termination of contracts providing for the management, operation or maintenance of the Mortgaged Property, for the purposes of enforcing the
assignment of Rents pursuant to Section 3(a), protecting the Mortgaged Property or the security of this Instrument, or for such other purposes as Lender in its discretion may deem necessary or desirable. 

 

	 	(ii)	Alternatively, if an Event of Default has occurred and is continuing, regardless of the adequacy of Lender’s security, without regard to Borrower’s solvency
and without the necessity of giving prior notice (oral or written) to Borrower, Lender may apply to any court having jurisdiction for the appointment of a receiver for the Mortgaged Property to take any or all of the actions set forth in the
preceding sentence. If Lender elects to seek the appointment of a receiver for the Mortgaged Property at any time after an Event of Default has occurred and is continuing, Borrower, by its execution of this Instrument, expressly consents to the
appointment of such receiver, including the appointment of a receiver ex parte if permitted by applicable law. 

  

	 	(iii)	 If Borrower is a housing cooperative corporation or association, Borrower hereby agrees that if a receiver is appointed, the order appointing the
receiver may contain a provision requiring the receiver to pay the installments of interest and principal then due and payable under the Note and the other amounts then due and payable under the other Loan

  

			
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Documents, including Imposition Reserve Deposits, it being acknowledged and agreed that the Indebtedness is an obligation of Borrower and must be paid out of maintenance charges payable by
Borrower’s tenant shareholders under their proprietary leases or occupancy agreements. 

  

	 	(iv)	Lender or the receiver, as the case may be, will be entitled to receive a reasonable fee for managing the Mortgaged Property. 

 

	 	(v)	Immediately upon appointment of a receiver or immediately upon Lender’s entering upon and taking possession and control of the Mortgaged Property, Borrower will
surrender possession of the Mortgaged Property to Lender or the receiver, as the case may be, and will deliver to Lender or the receiver, as the case may be, all documents, records (including records on electronic or magnetic media), accounts,
surveys, plans, and specifications relating to the Mortgaged Property and all security deposits and prepaid Rents. 

  

	 	(vi)	If Lender takes possession and control of the Mortgaged Property, then Lender may exclude Borrower and its representatives from the Mortgaged Property.

 Borrower acknowledges and agrees that the exercise by Lender of any of the rights conferred under this
Section 3 will not be construed to make Lender a mortgagee-in-possession of the Mortgaged Property so long as Lender has not itself entered into actual possession of the Land and Improvements. 

 

	 	(e)	If Lender enters the Mortgaged Property, Lender will be liable to account only to Borrower and only for those Rents actually received. Except to the extent of
Lender’s gross negligence or willful misconduct, Lender will not be liable to Borrower, anyone claiming under or through Borrower or anyone having an interest in the Mortgaged Property, by reason of any act or omission of Lender under
Section 3(d), and Borrower hereby releases and discharges Lender from any such liability to the fullest extent permitted by law. 

  

	 	(f)	If the Rents are not sufficient to meet the costs of taking control of and managing the Mortgaged Property and collecting the Rents, any funds expended by Lender for
such purposes will become an additional part of the Indebtedness as provided in Section 7. 

  

	 	(g)	Any entering upon and taking of control of the Mortgaged Property by Lender or the receiver, as the case may be, and any application of Rents as provided in this
Instrument will not cure or waive any Event of Default or invalidate any other right or remedy of Lender under applicable law or provided for in this Instrument. 

 

	4.	Assignment of Leases; Leases Affecting the Mortgaged Property. 

  

	 	(a)	As part of the consideration for the Indebtedness, Borrower absolutely and unconditionally assigns and transfers to Lender all of Borrower’s right, title and
interest in, to and under the Leases, including Borrower’s right, power and authority to modify the terms of any such Lease, or extend or terminate any such Lease. 

  

			
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	 	(i)	It is the intention of Borrower to establish a present, absolute and irrevocable transfer and assignment to Lender of all of Borrower’s right, title and interest
in, to and under the Leases. Borrower and Lender intend this assignment of the Leases to be immediately effective and to constitute an absolute present assignment and not an assignment for additional security only. 

 

	 	(ii)	For purposes of giving effect to this absolute assignment of the Leases, and for no other purpose, the Leases will not be deemed to be a part of the Mortgaged Property.

  

	 	(iii)	However, if this present, absolute and unconditional assignment of the Leases is not enforceable by its terms under the laws of the Property Jurisdiction, then the
Leases will be included as a part of the Mortgaged Property and it is the intention of Borrower that in this circumstance this Instrument create and perfect a Lien on the Leases in favor of Lender, which Lien will be effective as of the date of this
Instrument. 

  

	 	(b)	Until Lender gives Notice to Borrower of Lender’s exercise of its rights under this Section 4, Borrower will have all rights, power and authority granted to
Borrower under any Lease (except as otherwise limited by this Section or any other provision of this Instrument), including the right, power and authority to modify the terms of any Lease or extend or terminate any Lease. Upon the occurrence of an
Event of Default, and during the continuance of such Event of Default, the permission given to Borrower pursuant to the preceding sentence to exercise all rights, power and authority under Leases will automatically terminate. Borrower will comply
with and observe Borrower’s obligations under all Leases, including Borrower’s obligations pertaining to the maintenance and disposition of tenant security deposits. 

 

	 	(c)    (i)	Borrower acknowledges and agrees that the exercise by Lender, either directly or by a receiver, of any of the rights conferred under this Section 4 will not be
construed to make Lender a mortgagee-in-possession of the Mortgaged Property so long as Lender has not itself entered into actual possession of the Land and the Improvements. 

 

	 	(ii)	The acceptance by Lender of the assignment of the Leases pursuant to Section 4(a) will not at any time or in any event obligate Lender to take any action under
this Instrument or to expend any money or to incur any expenses. 

  

	 	(iii)	Except to the extent of Lender’s gross negligence or willful misconduct, Lender will not be liable in any way for any injury or damage to person or property
sustained by any Person or Persons in or about the Mortgaged Property. 

  

	 	(iv)	Prior to Lender’s actual entry into and taking possession of the Mortgaged Property, Lender will not be obligated for any of the following:

  

	 	(A)	Lender will not be obligated to perform any of the terms, covenants and conditions contained in any Lease (or otherwise have any obligation with respect to any Lease).

  

			
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	 	(B)	Lender will not be obligated to appear in or defend any action or proceeding relating to the Lease or the Mortgaged Property. 

 

	 	(C)	Lender will not be responsible for the operation, control, care, management or repair of the Mortgaged Property or any portion of the Mortgaged Property. The execution
of this Instrument by Borrower will constitute conclusive evidence that all responsibility for the operation, control, care, management and repair of the Mortgaged Property is and will be that of Borrower, prior to such actual entry and taking of
possession. 

  

	 	(d)	Upon delivery of Notice by Lender to Borrower of Lender’s exercise of Lender’s rights under this Section 4 at any time after the occurrence of an Event
of Default, and during the continuance of such Event of Default, and without the necessity of Lender entering upon and taking and maintaining control of the Mortgaged Property directly, by a receiver, or by any other manner or proceeding permitted
by the laws of the Property Jurisdiction, Lender immediately will have all rights, powers and authority granted to Borrower under any Lease, including the right, power and authority to modify the terms of any such Lease, or extend or terminate any
such Lease. 

  

	 	(e)	Borrower will, promptly upon Lender’s request, deliver to Lender an executed copy of each residential Lease then in effect. 

 

	 	(f)	If Borrower is a cooperative housing corporation or association, notwithstanding anything to the contrary contained in this Instrument, so long as Borrower remains a
cooperative housing corporation or association and is not in breach of any covenant of this Instrument, Lender consents to the following: 

  

	 	(i)	Borrower may execute leases of apartments for a term in excess of 2 years to a tenant shareholder of Borrower, so long as such leases, including proprietary leases, are
and will remain subordinate to the Lien of this Instrument. 

  

	 	(ii)	Borrower may surrender or terminate such leases of apartments where the surrendered or terminated lease is immediately replaced or where Borrower makes its best efforts
to secure such immediate replacement by a newly-executed lease of the same apartment to a tenant shareholder of Borrower. However, no consent is given by Lender to any execution, surrender, termination or assignment of a lease under terms that would
waive or reduce the obligation of the resulting tenant shareholder under such lease to pay cooperative assessments in full when due or the obligation of the former tenant shareholder to pay any unpaid portion of such assessments.

  

	5.	Prepayment Premium. Borrower will be required to pay a prepayment premium in connection with certain prepayments of the Indebtedness, including a payment made
after Lender’s exercise of any right of acceleration of the Indebtedness, as provided in the Note. 

  

	6.	 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, then 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. Neither

  

			
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Lender’s acceptance of an amount that is less than all amounts then due and payable nor Lender’s application of such payment in the manner authorized will constitute or be deemed to
constitute either a waiver of the unpaid amounts or an accord and satisfaction. Notwithstanding the application of any such amount to the Indebtedness, Borrower’s obligations under this Instrument, the Note and all other Loan Documents will
remain unchanged. 

  

	7.	Protection of Lender’s Security; Instrument Secures Future Advances. 

 

	 	(a)	If Borrower fails to perform any of its obligations under this Instrument or any other Loan Document, or if any action or proceeding is commenced which purports to
affect the Mortgaged Property, Lender’s security or Lender’s rights under this Instrument, including eminent domain, insolvency, code enforcement, civil or criminal forfeiture, enforcement of Hazardous Materials Laws, fraudulent conveyance
or reorganizations or proceedings involving a bankrupt or decedent, then Lender at Lender’s option may make such appearances, file such documents, disburse such sums and take such actions as Lender reasonably deems necessary to perform such
obligations of Borrower and to protect Lender’s interest, including all of the following: 

  

	 	(i)	Lender may pay Attorneys’ Fees and Costs. 

  

	 	(ii)	Lender may pay fees and out-of-pocket expenses of accountants, inspectors and consultants. 

 

	 	(iii)	Lender may enter upon the Mortgaged Property to make Repairs or secure the Mortgaged Property. 

 

	 	(iv)	Lender may procure the Insurance required by the Loan Agreement. 

  

	 	(v)	Lender may pay any amounts which Borrower has failed to pay under the Loan Agreement. 

 

	 	(vi)	Lender may perform any of Borrower’s obligations under the Loan Agreement. 

 

	 	(vii)	Lender may make advances to pay, satisfy or discharge any obligation of Borrower for the payment of money that is secured by a Prior Lien. 

 

	 	(b)	Any amounts disbursed by Lender under this Section 7, or under any other provision of this Instrument that treats such disbursement as being made under this
Section 7, will be secured by this Instrument, will be added to, and become part of, the principal component of the Indebtedness, will be immediately due and payable and will bear interest from the date of disbursement until paid at the Default
Rate. 

  

	 	(c)	Nothing in this Section 7 will require Lender to incur any expense or take any action. 

 

	8.	Events of Default. An Event of Default under the Loan Agreement will constitute an Event of Default under this Instrument. 

 

	9.	 Remedies Cumulative. Each right and remedy provided in this Instrument is distinct from all other rights or remedies under this Instrument, the
Loan Agreement or any other 

  

			
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Loan Document or afforded by applicable law or equity, and each will be cumulative and may be exercised concurrently, independently or successively, in any order. Lender’s exercise of any
particular right or remedy will not in any way prevent Lender from exercising any other right or remedy available to Lender. Lender may exercise any such remedies from time to time and as often as Lender chooses. 

 

	10.	Waiver of Statute of Limitations, Offsets, and Counterclaims. Borrower waives the right to assert any statute of limitations as a bar to the enforcement of the
Lien of this Instrument or to any action brought to enforce any Loan Document. Borrower hereby waives the right to assert a counterclaim, other than a compulsory counterclaim, in any action or proceeding brought against it by Lender or otherwise to
offset any obligations to make the payments required by the Loan Documents. No failure by Lender to perform any of its obligations under this Instrument will be a valid defense to, or result in any offset against, any payments that Borrower is
obligated to make under any of the Loan Documents. 

  

	11.	Waiver of Marshalling. 

  

	 	(a)	Notwithstanding the existence of any other security interests in the Mortgaged Property held by Lender or by any other party, Lender will have the right to determine
the order in which any or all of the Mortgaged Property will be subjected to the remedies provided in this Instrument, the Note, the Loan Agreement or any other Loan Document or applicable law. Lender will have the right to determine the order in
which any or all portions of the Indebtedness are satisfied from the proceeds realized upon the exercise of such remedies. 

  

	 	(b)	Borrower and any party who now or in the future acquires a security interest in the Mortgaged Property and who has actual or constructive notice of this Instrument
waives any and all right to require the marshalling of assets or to require that any of the Mortgaged Property be sold in the inverse order of alienation or that any of the Mortgaged Property be sold in parcels or as an entirety in connection with
the exercise of any of the remedies permitted by applicable law or provided in this Instrument. 

  

	12.	Further Assurances; Lender’s Expenses. 

  

	 	(a)	Borrower will deliver, at its sole cost and expense, all further acts, deeds, conveyances, assignments, estoppel certificates, financing statements or amendments,
transfers and assurances as Lender may require from time to time in order to better assure, grant and convey to Lender the rights intended to be granted, now or in the future, to Lender under this Instrument and the Loan Documents or in connection
with Lender’s consent rights under Article VII of the Loan Agreement. 

  

	 	(b)	Borrower acknowledges and agrees that, in connection with each request by Borrower under this Instrument or any Loan Document, Borrower will pay all reasonable
Attorneys’ Fees and Costs and expenses incurred by Lender, including any fees payable in accordance with any request for further assurances or an estoppel certificate pursuant to the Loan Agreement, regardless of whether the matter is approved,
denied or withdrawn. Any amounts payable by Borrower under this Instrument or under any other Loan Document will be deemed a part of the Indebtedness, will be secured by this Instrument and will bear interest at the Default Rate if not fully paid
within 10 days of written demand for payment. 

  

			
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	13.	Governing Law; Consent to Jurisdiction and Venue. This Instrument, and any Loan Document which does not itself expressly identify the law that is to apply to it,
will be governed by the laws of the Property Jurisdiction. Borrower agrees that any controversy arising under or in relation to the Note, this Instrument or any other Loan Document may be litigated in the Property Jurisdiction. The state and federal
courts and authorities with jurisdiction in the Property Jurisdiction will have jurisdiction over all controversies that may arise under or in relation to the Note, any security for the Indebtedness or any other Loan Document. Borrower irrevocably
consents to service, jurisdiction and venue of such courts for any such litigation and waives any other venue to which it might be entitled by virtue of domicile, habitual residence or otherwise. However, nothing in this Section 13 is intended
to limit Lender’s right to bring any suit, action or proceeding relating to matters under this Instrument in any court of any other jurisdiction. 

  

	14.	Notice. All Notices, demands and other communications under or concerning this Instrument will be governed by the terms set forth in the Loan Agreement.

  

	15.	Successors and Assigns Bound. This Instrument will bind the respective successors and assigns of Borrower and Lender, and the rights granted by this Instrument
will inure to Lender’s successors and assigns. 

  

	16.	Joint and Several Liability. If more than one Person signs this Instrument as Borrower, the obligations of such Persons will be joint and several.

  

	17.	Relationship of Parties; No Third Party Beneficiary. 

  

	 	(a)	The relationship between Lender and Borrower will be solely that of creditor and debtor, respectively, and nothing contained in this Instrument will create any other
relationship between Lender and Borrower. Nothing contained in this Instrument will constitute Lender as a joint venturer, partner or agent of Borrower, or render Lender liable for any debts, obligations, acts, omissions, representations or
contracts of Borrower. 

  

	 	(b)	No creditor of any party to this Instrument and no other Person will be a third party beneficiary of this Instrument or any other Loan Document. Without limiting the
generality of the preceding sentence, (i) any arrangement (“Servicing Arrangement”) between Lender and any Loan Servicer for loss sharing or interim advancement of funds will constitute a contractual obligation of such Loan
Servicer that is independent of the obligation of Borrower for the payment of the Indebtedness, (ii) Borrower will not be a third party beneficiary of any Servicing Arrangement, and (iii) no payment by the Loan Servicer under any Servicing
Arrangement will reduce the amount of the Indebtedness. 

  

	18.	Severability; Amendments. 

  

	 	(a)	The invalidity or unenforceability of any provision of this Instrument will not affect the validity or enforceability of any other provision, and all other provisions
will remain in full force and effect. This Instrument contains the entire agreement among the parties as to the rights granted and the obligations assumed in this Instrument. 

 

	 	(b)	 This Instrument may not be amended or modified except by a writing signed by the party against whom enforcement is sought; provided, however, that in
the event of a Transfer prohibited by or requiring Lender’s approval under Article VII of the Loan Agreement, some or all of the modifications to the Loan Documents 

  

			
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(if any) may be modified or rendered void by Lender at Lender’s option by Notice to Borrower and the transferee(s). 

 

	19.	Construction. 

  

	 	(a)	The captions and headings of the Sections of this Instrument are for convenience only and will be disregarded in construing this Instrument. Any reference in this
Instrument to a “Section” will, unless otherwise explicitly provided, be construed as referring to a Section of this Instrument. 

  

	 	(b)	Any reference in this Instrument to a statute or regulation will be construed as referring to that statute or regulation as amended from time to time.

  

	 	(c)	Use of the singular in this Instrument includes the plural and use of the plural includes the singular. 

 

	 	(d)	As used in this Instrument, the term “including” means “including, but not limited to” and the term “includes” means “includes
without limitation.” 

  

	 	(e)	The use of one gender includes the other gender, as the context may require. 

 

	 	(f)	Unless the context requires otherwise any definition of or reference to any agreement, instrument or other document in this Instrument will be construed as referring to
such agreement, instrument or other document as from time to time amended, supplemented or otherwise modified (subject to any restrictions on such amendments, supplements or modifications set forth in this Instrument). 

 

	 	(g)	Any reference in this Instrument to any person will be construed to include such person’s successors and assigns. 

 

	20.	Subrogation. If, and to the extent that, the proceeds of the loan evidenced by the Note, or subsequent advances under Section 7, are used to pay, satisfy or
discharge a Prior Lien, such loan proceeds or advances will be deemed to have been advanced by Lender at Borrower’s request, and Lender will automatically, and without further action on its part, be subrogated to the rights, including Lien
priority, of the owner or holder of the obligation secured by the Prior Lien, whether or not the Prior Lien is released. 

21-30. Reserved. 
  

	31.	Acceleration; Remedies. 

  

	 	(a)	At any time during the existence of an Event of Default, Lender, at Lender’s option, may declare the Indebtedness to be immediately due and payable without further
demand, and may invoke the power of sale and any other remedies permitted by Virginia law or provided in this Instrument or in any other Loan Document. Borrower acknowledges that Lender may exercise the power of sale granted by this Instrument
without prior judicial hearing to the extent allowed by Virginia law. Borrower has the right to bring an action to assert that an Event of Default does not exist or to raise any other defense Borrower may have to acceleration and sale. Lender will
be entitled to collect all costs and expenses incurred in pursuing such remedies, including fees and out-of-pocket costs of attorneys, including Lender’s in-house counsel, and costs of documentary evidence, abstracts and title reports.

  

			
	 Virginia
 Multifamily Deed of
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 Security Agreement and Fixture Filing (CME and Portfolio)
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	 	(b)	If Lender invokes the power of sale, Lender or Trustee will deliver a copy of a notice of sale to Borrower and such other parties as required, and in the manner
prescribed by Virginia law. Trustee will give public notice of the sale in the manner prescribed by Virginia law and will sell the Mortgaged Property in accordance with Virginia law. Trustee, without demand on Borrower, will sell the Mortgaged
Property at public auction to the highest bidder at the time and place and under the terms designated in the notice of sale in one or more parcels and in such order as Trustee may determine. Trustee may postpone the sale of all or any part of the
Mortgaged Property in accordance with Virginia law. Lender or Lender’s designee may purchase the Mortgaged Property at any sale. 

  

	 	(c)	Trustee will deliver to the purchaser at the sale, within a reasonable time after the sale, a deed conveying the Mortgaged Property so sold with special warranty of
title. The recitals in Trustee’s deed will be prima facie evidence of the truth of the statements made in the recitals. Trustee will apply the proceeds of the sale in the following order unless Virginia law recites a different order of
distribution: 

  

	 	(i)	To all costs and expenses of the sale, including Trustee’s fees in an amount prescribed by Virginia law, or if Trustee’s fees are not so prescribed, in an
amount equal to 5 % of the gross sale price, Attorneys’ Fees and Costs. 

  

	 	(ii)	to the discharge of all Taxes, if any, with costs and interest if they have priority on the Lien of this Instrument including the due pro rate thereof for the current
year, as provided by Virginia law. 

  

	 	(iii)	To the Indebtedness in the order of their priority, if any, and any Liens of record inferior to this Instrument with lawful interest. 

 

	 	(iv)	The residue to Borrower or his assigns, provided that Trustee as to such residue will not be bound by any inheritance, devise, conveyance, assignment or Lien of, or
upon, Borrower’s equity without actual notice thereof prior to distribution. 

  

	 	(d)	Trustee will not be required to take possession of the Mortgaged Property before the sale or to deliver possession of the Mortgaged Property to the purchaser at the
sale. 

  

	32.	Release. Upon payment of the Indebtedness, Lender will request Trustee to release this Instrument and will deliver the Note to Trustee. Trustee will release this
Instrument. Borrower will pay Trustee’s reasonable costs incurred in releasing this Instrument. 

  

	33.	Substitute Trustee. Lender may from time to time, in Lender’s discretion, remove Trustee and appoint a successor trustee to any Trustee appointed under this
Instrument. Without conveyance of the Mortgaged Property, the successor trustee will succeed to all the title, power and duties conferred upon the predecessor Trustee and by applicable law. 

 

	34.	Statutory Provisions. The following provisions of Section 55-60, Code of Virginia (1950), as amended, are made applicable to this Instrument:

 Exemptions waived 
 Subject to call upon default 
 Renewal or extension permitted 

Substitution of trustee permitted 

  

			
	 Virginia
 Multifamily Deed of
Trust, Assignment of Rents,
 Security Agreement and Fixture Filing (CME and Portfolio)
	  	Page 16

 Any trustee may act 

Advertisement required: once a day for 5 consecutive days 

 

	35.	FIXTURE FILING. THIS INSTRUMENT WILL BE EFFECTIVE AS A FINANCING STATEMENT FILED AS A FIXTURE FILING WITH RESPECT TO ALL GOODS WHICH ARE OR ARE TO BECOME
FIXTURES RELATED TO THE LAND AND IMPROVEMENTS. FOR PURPOSES OF THE CODE OF VIRGINIA (1950), AS AMENDED, THE FOLLOWING INFORMATION FURNISHED: 

  

	 	(a)	The name and address of debtor are those of the Borrower and are set forth on page one of this Instrument. 

 

	 	(b)	The Borrower is a limited partnership organized solely under the laws of Virginia and is a registered organization, whose organizational identification number is
S214400-6, under the laws of Virginia within the meaning of the code of Virginia (1950), as amended. 

  

	 	(c)	The name and address of the secured party are those of the Lender and are set forth on page 1 of this Instrument. 

 

	 	(d)	This Instrument covers goods that are or are to become Fixtures to the Land described in Exhibit A, attached hereto, and/or the Improvements.

  

	36.	WAIVER OF TRIAL BY JURY. 

  

	 	(a)	BORROWER AND LENDER EACH COVENANTS AND AGREES NOT TO ELECT A TRIAL BY JURY WITH RESPECT TO ANY ISSUE ARISING OUT OF THIS INSTRUMENT OR THE RELATIONSHIP BETWEEN THE
PARTIES AS BORROWER AND LENDER THAT IS TRIABLE OF RIGHT BY A JURY. 

  

	 	(b)	BORROWER AND LENDER EACH 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. 

  

	37.	Attached Riders. The following Riders are attached to this Instrument: 

 NONE 
  

	38.	Attached Exhibits. The following Exhibits, if marked with an “X” in the space provided, are attached to this Instrument: 

 

					
	 x
	  	Exhibit A	  	Description of the Land (required) 
	  ̈
	  	Exhibit B	  	Modifications to Instrument 
	  ̈
	  	Exhibit C	  	Ground Lease Description (if applicable)

  

			
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 Multifamily Deed of
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 Security Agreement and Fixture Filing (CME and Portfolio)
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 IN WITNESS WHEREOF, Borrower has signed and delivered this Instrument or has caused this Instrument to be
signed and delivered by its duly authorized representative. 
  

							
	FP-1, LLC, a Virginia limited liability company
		
	By:	 	 DF Pines of York, LLC, a Virginia limited
 liability company, its Operating Member 

			
		 	By:	 	 DF Pines Manager, Inc., a Virginia
 corporation, its Manager 

				
		 	By:	 	/s/ J. Guy Buck	 	(SEAL)
		 		 	J. Guy Buck
		 		 	 Vice President, Secretary and
 Treasurer

 STATE OF
                                     

CITY/COUNTY OF                     , to-wit:

 The foregoing instrument was acknowledged before me in the above-stated jurisdiction this
         day of                     , 2011 by J. Guy Buck who is Vice President, Secretary and
Treasurer of DF Pines Manager, Inc., a Virginia corporation, the Manager of DF Pines of York, LLC, a Virginia limited liability company, the Operating Member of FP-1, LLC, a Virginia limited liability company. 

 

	
	  
	Notary Public

 Notary registration
number:                     

My commission expires:
                         

  

			
	 Virginia
 Multifamily Deed of
Trust, Assignment of Rents,
 Security Agreement and Fixture Filing (CME and Portfolio)
	  	Page 18

 EXHIBIT A 
 DESCRIPTION OF THE LAND 

  
 Page A-1

 EXHIBIT B 
 MODIFICATIONS TO INSTRUMENT 
 The following modifications are made to the text of the Instrument
that precedes this Exhibit: 

  
 Page A-1

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