Document:

EX-10.1

This Separation Agreement, dated as of September 15, 2005 (the “Separation Agreement”),
is made by and between Golden Telecom Group, Inc., a Delaware corporation (the “Company”), and
Michal Cupa, a citizen of the Czech Republic (the “Employee”).

W I T N E S S E T H :

WHEREAS, the Employee has been employed by the Company pursuant to an employment agreement,
dated as of March 1, 2004, made by and between the Company and the Employee (the “Employment
Agreement”);

WHEREAS, the Employee has tendered his notice of resignation from his position as Senior Vice
President and Chief Operating Officer;

WHEREAS, the Company and the Employee wish to define their continuing obligations to the other
under the Employment Agreement;

WHEREAS, the Company wishes to provide additional consideration to the Employee in exchange
for the covenants of the Employee hereunder; and

WHEREAS, the Employee and the Company desire to reach an amicable resolution concerning the
Employee’s employment relationship with the Company and the termination thereof,

NOW, THEREFORE, in consideration of the premises, and of the mutual covenants and agreements
hereinafter contained, the parties hereto agree as follows:

1. Termination of Employment. The employee has tendered his notice of resignation
from his position as Senior Vice President and Chief Operating Officer as of September 15, 2005.
The employee has agreed to serve as Special Advisor to the Chief Executive Officer of the Company
for the period from September 15, 2005 to December 31, 2005 (the “Separation Date”) and will
consult during that period with the Chief Executive Officer and other officers of the Company and
affiliated companies, as the Chief Executive Officer may determine. The Company, in its sole and
absolute discretion may, at any time prior to the Separation Date, elect to either continue to
employ the Employee, in whole or in part, through the Separation Date, or continue to provide the
Employee with salary and benefits through the Separation Date in lieu of continued active
employment. Additionally, the Company reserves the right, in its sole and absolute discretion, to
require that the Employee remain off the Company’s premises or any related Company’s premises.

2. Employment Agreement Obligations.

Pursuant to the Section 10(e), Payments Upon Termination; Voluntary Resignation, of the
Employment Agreement, the Company will continue to provide the Employee with the following:

(i) Base salary payments in a gross amount totaling US$92,750 (ninety-two thousand
seven hundred and fifty United States dollars) through the Separation Date in accordance
with the Company’s usual and customary practices and procedures;

(ii) Employee benefits through the Separation Date, provided that the Company reserves
the right to amend, suspend, or terminate such employee benefits to the extent such
amendment, suspension, or termination is applicable to similarly situated participants, and
further provided that such employee benefits will cease upon the Employee’s receipt of
comparable benefits or coverage from a subsequent employer prior to the Separation Date;

(iii) Incentive Bonus for the 2005 fiscal year in the amount of US$105,000 (one
hundred and five thousand US dollars);

(iv) Reimbursement for any appropriate and reasonable business expenses in accordance
with the Company’s usual and customary practices and procedures, provided that the Employee
provides proper documentation of such expenses and submits the reimbursement request prior
to the Separation Date.

3. Additional Consideration to the Employee. In addition to the payments and benefits
set forth above, and in further consideration of the Employee’s covenants and obligations contained
in this Separation Agreement, and subject to the Employee’s execution of, and the effectiveness of,
a customary general release (attached hereto as Exhibit A), the Company will provide the Employee
with the following (subject to Section 7 below):

(i) A separation payment in a gross amount totaling US$423,000 (four hundred and
twenty-three thousand US dollars) in lieu of salary and bonus that the Employee may have
earned from the Company during 2006; and

(ii) An additional payment of US$100,000 (one hundred thousand US dollars) in lieu of
 shares of restricted stock in Golden Telecom, Inc. that may have vested during 2006; and

(iii) An additional payment of US$24,461.52 (twenty-four thousand four hundred and
sixty-one US dollars and fifty-two cents) which amount is equal to the value of the
Employee’s unused vacation during the course of his employment; and

(iv) Reimbursement for the cost of continuing the Company’s medical, dental, and health
insurance coverage for the twelve-month period following the Separation Date and for an
additional six-month period following the twelve-month period at the Employee’s expense, or
ceasing upon such earlier date upon which the Employee receives comparable benefits or
coverage from a subsequent employer (such continued coverage to run concurrently with any
continued coverage requirements under the law known as “COBRA” or similar national, local,
or state laws); and

(v) A single lump sum payment of US$10,000 (ten thousand United States dollars) which
amount represents the estimated cost of moving the Employee, his wife and children and
household goods from Moscow to the Czech Republic; and

(vi) The use of a company car until January 31, 2006; and

(vii) Reasonable use of DSL phone services and a mobile phone until December 31, 2006; and

(viii) Reasonable expenses until December 31, 2006 for a global outplacement firm to work
with the Employee until such time as the Employee has found suitable new employment; and

(ix) Continuing insurance benefits offered by the Company to the Employee during his
employment until December 31, 2006; and

(x) Continuing visa support for the Employee and his family through June 30, 2006.

To the extent practicable, and in accordance with the Company’s usual and customary practices
and procedures, any payments, with the exception of salary, to be made under Section 2 and Section
3 of this Separation Agreement, shall be made by the Company to the Employee by September 30, 2005.

4. Company Car. The Employee will deliver to the Company, and the Company will take
possession of, the company car currently in the Employee’s possession (including all car keys), as
soon as practically possible, but in any event, no later than January 31, 2006.

5. Tax Equalization and Assistance In Preparation of Tax Declarations. In accordance
with the Company’s tax protection policies and procedures, once Ernst & Young (Moscow Office) has
determined the correct amount of tax equalization liability owed for the time period during which
the Employee was employed by the Company, then the Company or the Employee, as the case may be,
will, within thirty days of receiving written notification of such liability, provide full tax
equalization reimbursement to the other party. The Company will continue to provide, consistent
with its internal policies applied throughout the Company, professional accounting assistance in
the preparation of the Employee’s tax declarations in Russia for the 2005 fiscal year.

6. Withholdings; Offset. All payments made under this Separation Agreement will be
subject to any required tax withholdings. Further, all payments made under this Separation
Agreement will be subject to offset, to the extent legally permitted, against any amounts owed by
the Employee to the Company, if any.

7. General Releases. As a condition to the receipt of the benefits set forth in
Section 3 above, the Employee must execute the general release attached hereto as Exhibit A and
such general release must become irrevocably effective.

8. Non-Disparagement. The Employee will not disparage, portray in a negative light,
or take any action which would be harmful to, or lead to unfavorable publicity for, the Company, or
any of its current or former officers, directors, employees, agents, consultants, contractors,
owners, divisions, parents, subsidiaries, or successors, whether public or private, including
without limitation, in any and all interviews, oral statements, written materials, electronically
displayed materials, and materials or information displayed on Internet-related sites; provided
that this provision will not apply to the extent the Employee is seeking to enforce his rights
under this Separation Agreement. The Company will not disparage, portray in a negative light, or
take any action which would be harmful to, or lead to unfavorable publicity for, the Employee,
whether public or private, including without limitation, in any and all interviews, oral
statements, written materials, electronically displayed materials, and materials or information
displayed on Internet-related sites; provided that this provision will not apply to the extent the
Company is seeking to enforce its rights under this Separation Agreement.

9. Non-Disclosure of Information. The Employee affirms that he has not, and will not,
without the specific prior written consent of the Company, directly or indirectly, at any time
after the date of this Separation Agreement, whether before or after the Separation Date, use on
behalf of or divulge to any person or entity, any confidential or proprietary information of the
Company or any related company (or any of their clients, suppliers, and vendors) concerning the
business, affairs, or clients of the Company or any related company, including without limitation,
client lists, customer records, names and addresses, financial documents and statistics, prices,
contractual terms and arrangements, surveys and reports, market data, trade secrets, technical
data, business or research plans and proposals, or any other information which may have commercial
value to the Company, insofar as the same have come to the Employee’s knowledge during or as a
result of his employment with the Company, all of which information is confidential and proprietary
to the Company and will remain the sole and exclusive property of the Company. However, the
Employee will have the right to use the generic knowledge and expertise he acquired during his
employment with the Company so as to enable him to be otherwise gainfully employed within the
Company’s industry. The Company also expressly acknowledges that the Employee may disclose such
information as may be required by law or to comply with legal process, or any such information
which is known to the general public or ascertainable from the public or from published information
(other than as a result of the Employee’s unauthorized disclosure of such information).

10. Non-Solicitation and Return of Company Property. The Employee will not, for a
period of twelve months commencing upon the Separation Date, either alone or with or for others, in
whatever capacity, directly or indirectly, without first obtaining the Company’s written approval,
(a) solicit, or attempt to solicit, business or services from any customers or clients of the
Company or any related company (including without limitation, Golden TeleServices, Inc. and the
Company’s affiliated operating companies in Russia, Ukraine, and Kazakhstan), whom the Employee
personally served, whose accounts the Employee directly or indirectly supervised, or about whom the
Employee was privy to privileged and confidential information, while employed by the Company, or
(b) solicit, or attempt to solicit, for employment or any other consulting relationship, any
employee holding a management position equal to or above a departmental “Manager” with, or any
officer or director of, the Company or any related company (including without limitation, Golden
TeleServices, Inc. and the Company’s affiliated operating companies in Russia, Ukraine, and
Kazakhstan), who was employed by or provided services to the Company or any related company during
the twelve-month period immediately prior to the Separation Date, and without regard to whether
such employee, officer, or director continues to be employed by or provide services to the Company
or any related company during the twelve-month non-solicitation period.

It is acknowledged and understood that by executing this Separation Agreement, the parties
hereto regard the restrictions of this Section 10 to be reasonable and compatible with their
respective rights.

To the extent not dealt with elsewhere in this Separation Agreement, the Employee will deliver
promptly, but no later than the Separation Date, to the Company (and not keep in his possession or
deliver to any other person or entity) any and all property belonging to the Company or any related
company, including without limitation, computer hardware and software, palm pilots, pagers, other
electronic equipment, credit cards, keys, records, data, notes, reports, correspondence, client
files and information, confidential and/or proprietary information, and other documents or
information (including any and all copies of such property).

11. Non-Competition. For a period equal to six (6) months after the Separation Date,
the Employee shall not, without the prior written consent of the Company, directly or indirectly
through any other person or entity, own or acquire in any manner any ownership interest in (except
purely passive investments amounting to no more than five percent (5%) of the voting equity), or
serve as a director, officer, employee, counsel or consultant of or to any person, firm,
partnership, corporation, consortium, association or other entity that competes with the Company or
any of its direct or indirect affiliates, parents, or subsidiaries, in any geographic market in
which the Company or any related company either: (A) offers or provides telecommunications
services to customers; (B) operates or manages a provider of telecommunications services; (C) has
investments in a provider of telecommunications services; or (D) to the Employee’s knowledge, has
plans to either operate a telecommunications carrier, offer a telecommunications service, or invest
in a telecommunications carrier within such six-month period.

12. Confidentiality. The Employee and the Company will keep the terms and conditions
of this Separation Agreement strictly confidential; provided that the Employee may disclose such
information to his immediate family, and his legal and tax advisors, after securing their similar
commitment of confidentiality; and provided that the Company may disclose such information to its
legal and tax advisors, and senior management (on a need-to-know basis); and provided that either
party may disclose such information to the extent legally required to be disclosed.

13. Duty to Cooperate. Prior to the Separation Date, the Employee will provide full
cooperation to the Company, any related company, and their counsels with respect to any matter,
including without limitation, litigation, investigation, audit, or governmental proceeding, which
relates to any matter with which the Employee was directly or indirectly involved while employed by
the Company.

14. Injunctive Relief. The Employee acknowledges and understands that the remedy at
law for his breach of Sections 8, 9, 10, 11, 12 or 13 above will be inadequate, and that the
damages flowing from such breach will not be readily susceptible to being measured in monetary
terms. Accordingly, upon a violation of any part of Sections 8, 9, 10, 11, 12 or 13 above, the
Company will be entitled to immediate injunctive relief and may obtain a temporary order
restraining any further violation. Nothing in this Section 14 will be deemed to limit the
Company’s remedies at law or in equity for any breach by the Employee of any of the parts of
Sections 8, 9, 10, 11, 12 or 13 above which may be pursued or availed of by the Company.

15. Judicial Modification. The Employee acknowledges that it is the intent of the
parties hereto that the restrictions of Sections 8, 9, 10, 11, 12 and 13 above be enforced to the
fullest extent permissible under the laws of each jurisdiction in which enforcement is sought. If
any of the restrictions in Sections 8, 9, 10, 11, 12 and 13 is for any reason held by an arbitrator
or court to be excessively broad as to duration, activity, geographical scope, or subject, then
such restriction will be construed or judicially modified so as to thereafter be limited or reduced
to the extent required to be enforceable in accordance with applicable law.

16. Joint Communication. The Company or its affiliated companies shall make a public
announcement on September 26, 2005 regarding the Employee’s resignation. The Company and Employee
shall agree upon a letter setting forth the basis for the Employee’s resignation.

17. Arbitration. Any dispute or controversy between the Company and the Employee
arising under this Separation Agreement will be settled by arbitration administered by the American
Arbitration Association (“AAA”) in Arlington, Virginia pursuant to the AAA’s National Rules for the
Resolution of Employment Disputes (or their equivalent), which arbitration will be confidential,
final, and binding to the fullest extent permitted by law. BOTH PARTIES HERETO WAIVE THEIR RIGHTS
TO SEEK A REMEDY IN COURT, INCLUDING THE RIGHT TO A JURY TRIAL. Notwithstanding the foregoing, to
the extent there is no adequate remedy at law and injunctive relief only is sought, the parties
hereto select state court in Arlington County, Virginia as the exclusive forum to resolve their
disputes, and both parties submit to personal jurisdiction. Either party may be represented by an
attorney or other selected representative, provided that each party will be responsible to pay its
own attorneys’ or representation fees. The costs of the arbitration and filing fees will be paid
by the Company.

18. Entire Agreement. This Separation Agreement contains the entire agreement between
the Employee and the Company with respect to its subject matter, and supersedes all prior
agreements and understandings, including without limitation, the Employment Agreement, whether oral
or written, between the Employee and the Company with respect to the subject matter of this
Separation Agreement. Notwithstanding the foregoing, the Restricted Stock Agreement executed by
Golden Telecom, Inc. and the Employee and dated July 21, 2005 shall remain in full force and
effect. This Separation Agreement may be amended only by an agreement in writing signed by both
the Employee and the Company.

19. Equity Plan and Restricted Shares. For the avoidance of doubt, the Employee and
the Company acknowledge and agree that:

(i) provided that the Employee remains in the employ of the Company through the Separation
Date, the Employee shall possess the right and title to 2,441 (two thousand four hundred
and forty-one) fully vested restricted shares of Golden Telecom, Inc. common stock; and

(ii) the Employee acknowledges and agrees that all restricted stock granted to the Employee
which are unvested as of December 31, 2005 shall immediately expire, be forfeited, and no longer be
of any force or effect. The Employee and the Company acknowledge and agree that any sale, transfer
or other disposition, and the validity, termination, and sale, of the vested restricted stock of
Golden Telecom held by the Employee will be implemented in strict compliance with the 1999 GTI
Equity Participation Plan, as amended on June 26, 2001, the Restricted Stock Agreement executed by
the Company and the Employee as of July 21, 2005, and all applicable rules and regulations of the
US Securities and Exchange Commission and other federal and state regulatory organs.

20. No Other Benefits. The Employee acknowledges and understands that the benefits
provided for in this Separation Agreement are the only benefits to which the Employee is entitled,
and are the only benefits the Employee will receive, as a result of the separation of his
employment with the Company. The Employee further acknowledges and understands that the benefits
provided for in this Separation Agreement are inclusive of, and exceed, any benefits to which the
Employee is entitled from the Company pursuant to common law, statutory law, contract, or
otherwise.

21. Severability. In the event that any of the provisions of this Separation
Agreement, or the application of any such provisions to the Employee or the Company with respect to
obligations hereunder, is held to be unlawful or unenforceable by any court or arbitrator, the
remaining portions of this Separation Agreement will remain in full force and effect and will not
be invalidated or impaired in any manner.

22. Waiver. No waiver by any party hereto of the breach of any term or covenant
contained in this Separation Agreement, whether by conduct or otherwise, in any one or more
instances, will be deemed to be, or construed as, a further or continuing waiver of any such
breach, or a waiver of any other term or covenant contained in this Separation Agreement.

23. Governing Law. This Separation Agreement will be governed by, and construed in
accordance with, the laws of the Commonwealth of Virginia without giving effect to its conflict of
laws principles.

24. Counterparts. This Separation Agreement may be executed in any number of
counterparts, each of which so executed will be deemed to be an original, and such counterparts
will together constitute but one agreement.

HAVING READ AND UNDERSTOOD THIS SEPARATION AGREEMENT, AND HAVING CONSULTED COUNSEL OR
VOLUNTARILY ELECTING NOT TO CONSULT SUCH COUNSEL, AND HAVING HAD SUFFICIENT TIME TO CONSIDER
WHETHER TO EXECUTE THIS SEPARATION AGREEMENT, IN WITNESS WHEREOF, the parties hereto have signed
this Separation Agreement as of the date first written above.

	 	 	 
	Golden Telecom Group, Inc.	 	Michal Cupa
	By:      

Name: Jean-Pierre Vandromme

	 	     

Title: Chief Executive Officer

1

EXHIBIT A — GENERAL RELEASE

FOR AND IN CONSIDERATION OF the terms and conditions of the Separation Agreement, dated as of
September 15, 2005 (the “Separation Agreement”), by and between Michal Cupa (the “Employee”) and
Golden Telecom Group, Inc. (the “Company”), the Employee agrees, on behalf of himself, his heirs,
executors, administrators, successors, and assigns, to release and discharge the Company, and its
respective current and former officers, directors, employees, agents, owners, subsidiaries,
divisions, affiliates, parents, successors, and assigns (the “Released Parties”) from any and all
manner of actions and causes of action, suits, debts, dues, accounts, bonds, covenants, contracts,
agreements, judgments, charges, claims, and demands whatsoever (“Losses”) which the Employee, his
heirs, executors, administrators, successors, and assigns have, or may hereafter have, against the
Released Parties or any of them arising out of or by reason of any cause, matter, or thing
whatsoever from the beginning of the world to the date hereof, including without limitation:

(a) Any and all matters relating to the Employee’s employment by the Company and the cessation
thereof, including claims of wrongful termination, defamation, infliction of emotional distress,
and interference with contractual relationship;

(b) Any and all matters relating to the Employee’s employment agreement, or any other contract
of employment between the Company and the Employee, whether oral or written, or actual or implied;

(c) Any and all matters relating to the Employee’s compensation or benefits, including wages,
overtime, vacation, severance, bonuses, commissions, pensions, deferred compensation, or retirement
benefits (except to the extent such individual items are already vested);

(d) Any and all matters relating to claims of discrimination, harassment, or retaliation based
upon any trait protected by law, including age, national origin, citizenship, race, ethnicity,
religion, gender, sexual orientation, physical or mental disability, marital status, or veteran
status; and

(e) Any and all matters arising under any national, federal, state, provincial, municipal, or
local statute, rule, or regulation, or principle of contract law or common law, including without
limitation, the Fair Labor Standards Act of 1938, as amended, 29 U.S.C. §§ 201
et seq., the Family and Medical Leave Act of 1993, as amended, 29
U.S.C. §§ 2601 et seq., Title VII of the Civil Rights Act of 1964, as
amended, 42 U.S.C. §§ 2000e et seq., the Age Discrimination in Employment
Act of 1967, as amended, 29 U.S.C. §§ 621 et seq. (the “ADEA”), the
Americans with Disabilities Act of 1990, as amended, 42 U.S.C. §§ 12101 et
seq., the Worker Adjustment and Retraining Notification Act of 1988, as
amended, 29 U.S.C. §§ 2101 et seq., the Virginia Human Rights Act,
as amended, Va. Code Ann. §§ 2.1-714 et seq., the Virginia Persons
with Disabilities Act, as amended, Va. Code Ann. §§ 51.5-1 et seq.,
and any other equivalent or similar national, federal, state, provincial, municipal, or local
statute.

Provided, however, that the Employee does not release or discharge the Released Parties from any
claims or causes of action which arise out of or in connection with the Separation Agreement or
from any Losses arising under the ADEA which arise after the date on which the Employee executes
this general release. This General Release will not release or discharge the Released Parties from
any claims or causes of action which arise out of any rights which the Employee may not legally
waive. This General Release includes claims which arise under the laws of the United States and
its political subdivisions, and the laws of any other country or jurisdiction and its political
subdivisions.

It is understood that nothing in this General Release is to be construed as an admission on
behalf of the Released Parties of any wrongdoing with respect to the Employee, any such wrongdoing
being expressly denied.

The Employee represents and affirms that he has not filed, and agrees not to initiate or cause
to be initiated on his behalf, any complaint, charge, claim, or proceeding against the Released
Parties before any national, federal, state, provincial, municipal, local, or other similar agency,
court, or other body relating to his employment and the cessation thereof, and agrees not to
voluntarily participate in such a proceeding. However, nothing in this general release shall
preclude or prevent the Employee from filing a claim which challenges the validity of this general
release solely with respect to the Employee’s waiver of any Losses arising under the ADEA.

The Employee agrees not to make any public statements in any form whatsoever to the media or
any other public forum about the Released Parties or the Employee’s present or past employment
relationship with the Company, including his role as Chief Operating Officer of Golden Telecom,
Inc., without the express advance written consent of the Company.

The Employee represents and warrants that he fully understands the terms of this General
Release, that he has had the benefit of advice of counsel or has voluntarily not sought such
advice, and that he knowingly and voluntarily, of his own free will without any duress, being fully
informed and after due deliberation, accepts its terms and signs the same as his own free act. The
Employee understands that as a result of executing this General Release, he will not have the right
to assert that the Company unlawfully terminated his employment or violated any of his rights in
connection with his employment.

The Employee may take up to twenty-one (21) days to consider whether to execute this general
release. Alternatively, having had the advice of counsel or having been encouraged to seek such
counsel, which the Employee hereby acknowledges, the Employee knowingly waives the remainder of
such twenty-one-day period. Upon the Employee’s execution of this general release, the Employee
will have seven (7) days after such execution in which he may revoke such execution. In the event
of revocation, the Employee must present written notice of such revocation to the Company’s General
Counsel. If seven (7) days pass without receipt of such notice of revocation by the Company, this
general release shall become binding and effective on the eighth (8th) day.

2

This General Release shall be governed by the laws of the Commonwealth of Virginia without
giving effect to its conflict of laws principles.

	 	 	 
	Michal Cupa	 	 
	     

	 	     

Date:
	 
	 	 
	Golden Telecom Group, Inc

	 	

	 
	 	 
	By:      

Name: Jean-Pierre Vandromme

	 	     

Date

Title: Chief Executive Officer

3EX-10.1

LOAN AND SECURITY AGREEMENT

This Loan and Security Agreement (the “Agreement”) is made and entered into effective as of
September 15, 2005 (the “Effective Date”), by and between AMERICA FIRST COMMUNITIES OFFUTT
DEVELOPER, LLC, a Nebraska limited liability company (the “Borrower”), and AMERICA FIRST
APARTMENT INVESTORS, INC., a Maryland corporation (“Lender”).

RECITALS:

A. Borrower has requested credit from Lender in order to finance Borrower’s activities in
relation to the Offutt Air Force Base Housing Privatization Project (the “Project”) described in
the Lease (defined below) and pursuant to Borrower’s Amended and Restated Operating Agreement dated
effective September 1, 2005 (the “Borrower’s Operating Agreement”).

B. Lender is willing to extend credit to the Borrower under the promissory note (as
hereinafter described and in the form of Exhibit “A” attached hereto) contemporaneously
executed herewith (the “Loan”).

C. The terms of the Agreement shall remain in effect until such time as all Obligations of the
Borrower have been repaid to Lender or the parties enter into a subsequent written agreement
concerning the credit relationship.

D. Without limiting the generality of the foregoing, this Agreement is the basis for Lender to
extend credit to the Borrower under a promissory note in an amount not to exceed Seven Million Four
Hundred Forty-Three Thousand Nine Hundred Forty-Eight Dollars ($7,443,948) (the “Note”).

AGREEMENT:

In consideration of the mutual agreements, provisions and covenants herein contained,
including the foregoing recitals incorporated herein, the parties hereby agree as follows:

	 	1.	 	Definitions.

Whenever the following terms are used herein they shall be defined as follows:

	 	(a)	 	Addendum. “Addendum” shall mean the Addendum described
in Subsection 3(c).

	 	(b)	 	AFREG. “AFREG” means America First Real Estate Group,
LLC, a Nebraska limited liability company.

	 	(c)	 	AFREG Note. “AFREG Note” means that certain promissory
note issued by Borrower in favor of AFREG in the initial principal amount of
three hundred twenty thousand dollars ($320,000).

	 	(d)	 	America First Lockbox Agreement. “America First Lockbox
Agreement” shall mean that Lockbox Agreement entered into by and between
Lender, Borrower and U.S. Bank National Association as lockbox agent effective
September 15, 2005. “America First Lockbox” shall mean that Lockbox created
pursuant to such agreement.

	 	(e)	 	Applicable Laws. “Applicable Laws” shall mean any
applicable law, regulation, ordinance, rule, decision, order, request or
similar directive or pronouncement of a domestic or foreign court or
governmental authority, each an “Applicable Law”.

	 	(f)	 	Bond Documents. “Bond Documents” shall mean each and
every of those documents referenced in the Preliminary Limited Offering
Memorandum relating to the Offutt AFB America First Communities, LLC Taxable
Military Housing Revenue Bonds-First Mortgage Lien Bonds Series 2005 Offutt Air
Force Base Privatized Military Housing Project (Series A and B, in the
aggregate amount of One Hundred Thirty-Eight Million, Three Hundred Fifty
Thousand Dollars ($138,350,000)) and as otherwise necessary to the issuance of
such bonds, as such documents may be executed and/or amended, modified or
restated from time to time.

	 	(g)	 	Bond Trustee. “Bond Trustee” shall mean U.S. Bank
National Association as Trustee under that Trust Indenture by and between Bond
Trustee and Subsidiary.

	 	(h)	 	Borrower LOC. “Borrower LOC” shall mean the Master
Letter of Credit as defined in the Borrower’s Operating Agreement that is to be
delivered in accordance with the terms of the Master Lockbox Agreement.

	 	(i)	 	Borrower’s Operating Agreement. “Borrower’s Operating
Agreement” shall mean Borrower’s Amended and Restated Operating Agreement dated
effective September 1, 2005.

	 	(j)	 	Borrower’s Irrevocable Direction of Payment.
“Borrower’s Irrevocable Direction of Payment” shall mean the Borrower’s
direction of payment described in Subsection 2(c)(16).

	 	(k)	 	Business Day. “Business Day” shall mean any day
except Saturday, Sunday and any day which shall be in New York City a legal
holiday or a day on which banking institutions are authorized or required by
law or other governmental action to close.

	 	(l)	 	Change of Control. “Change of Control” of the Borrower
shall mean (a) each and every issue, sale, transfer or other disposition,
directly or indirectly, of membership units of Borrower that, after giving
effect thereto, results in America First Real Estate Group, LLC, (“AFREG”) and
John L. Hoich – Offutt, LLC owning or controlling in the aggregate less than
One Hundred Percent (100%) (by number of votes) thereof of the Class I
Membership Interests, (b) AFREG is replaced as the controlling (managing)
member of Borrower, (c) liquidation or dissolution of the Borrower or (d) the
conveyance, transfer or leasing of all or substantially all of the assets of
the Borrower.

	 	(m)	 	Class I Member. “Class I Member” shall mean the Class
I Members of Borrower pursuant to the Operating Agreement and as otherwise
described in “Change of Control”, each a “Member”.

	 	(n)	 	Collateral. “Collateral” shall mean the security for
repayment of the Obligations, as described in Section 3 and in the Loan
Documents.

	 	(o)	 	Compliance Certificate. “Compliance Certificate” shall
mean a certificate of Borrower (executed by its President), certifying that (1)
Borrower is in compliance with the provisions of this Agreement, (2) all
representations and warranties of Borrower are true and correct as of the date
of such certificate and (3) no Event of Default has occurred or no event has
occurred that with the giving of notice, passage of time or happening of any
further condition, event or act would constitute an Event of Default.

	 	(p)	 	Construction Management Agreement. “Construction
Management Agreement” shall mean the Construction Management Agreement by and
between the Borrower and Subsidiary dated effective September 1, 2005.

	 	(q)	 	Construction Management Fees. “Construction Management
Fees” shall mean the “Construction Management Fee” as defined in the
Construction Management Agreement.

	 	(r)	 	Critical Path. “Critical Path” shall mean the schedule
for completion of the Project attached hereto as Exhibit “B”.

	 	(s)	 	Development Agreement. “Development Agreement” shall
mean that Development Agreement entered into by and between the Borrower and
Subsidiary dated effective September 1, 2005.

	 	(t)	 	Development Fees. “Development Fees” shall mean the
“Development Fee” as defined in the Development Agreement.

	 	(u)	 	Direct Loan Documents. “Direct Loan Documents” shall
mean the Forward Commitment as well as any other document pertaining to or
evidencing advances on the related government direct loan of Seventy-Two
Million, Six Hundred Five Thousand Dollars ($72,605,000) and, including such
documents described in the Forward Commitment (the form of which are attached
to the Forward Commitment) and such other documents as may be executed,
amended, modified or restated from time to time, any of the foregoing being
individually a “Direct Loan Document.”

	 	(v)	 	Event of Default. “Event of Default” shall have the
meaning described in Section 12.

	 	(w)	 	Financing Fee. “Financing Fee” shall have the meaning described in
Subsection 2(b).

	 	(x)	 	Forward Commitment. “Forward Commitment” shall mean
the Forward Commitment dated effective September 1, 2005 made by the Secretary
of the Air Force to Subsidiary and agreed to by the Trustee and Bondholder
Representative under the Bond Documents.

	 	(y)	 	Generally Accepted Accounting Principles (“GAAP”).
“GAAP”, as used herein, shall be deemed to refer to generally accepted
accounting principles in effect in the United States at the time of application
thereof; unless otherwise specified herein, all accounting terms used herein
shall be interpreted, all determinations with respect to accounting matters
hereunder shall be made, and all unaudited financial statements and
certificates and reports as to financial matters required to be furnished
hereunder shall be prepared, in accordance with generally accepted accounting
principles, applied on a basis consistent with the most recent financial
statements of Borrower and Subsidiary delivered pursuant to Section 9 hereof
or, if no such statements have been so delivered, the most recent audited
financial statements of Borrower and Subsidiaries prepared prior to the date
hereof.

	 	(z)	 	Hoich. “Hoich” means John L. Hoich – Offutt, LLC, a
Nebraska limited liability company.

	 	(aa)	 	Hoich Note. “Hoich Note” means that certain promissory
note issued by the Company in favor of Hoich in the initial principal amount of
fifty five thousand dollars ($55,000).

	 	(bb)	 	Interest Rate. “Interest Rate” shall have the meaning
described in Subsection 2(a)(2).

	 	(cc)	 	Lease. “Lease” shall mean the Lease Of Property
entered into by and between Subsidiary and the Secretary of the Air Force dated
effective September 1, 2005 in regard to the Project and shall include the
Operating Agreement referred to and incorporated therein.

	 	(dd)	 	Legal Proceedings. “Legal Proceedings” shall mean any
court proceeding, as well as any formal or informal administrative action or
proceedings before any Regulatory Authority.

	 	(ee)	 	Loan Documents. “Loan Documents” shall mean this
Agreement, the Note, the Assignment of Construction Management Agreement, the
Assignment of Development Agreement, the America First Lockbox Agreement, the
Irrevocable Direction of Payment and the related documents referred to herein
as executed by Borrower or other parties in favor of Lender in regard to the
Loan including but not limited to the respective forms of Member Pledge and
Security Agreement and the Addendum and any writings, records or documents
evidencing any advances, including such documents as the same may be from time
to time amended, modified or restated, together with such other documents as
Borrower shall enter into to evidence or secure the Obligations, any of the
foregoing being individually a “Loan Document.”

	 	(ff)	 	Manager’s Certificate. “Manager’s Certificate” shall
mean a certificate signed in the name of AFREG by the President or other
designated officer of the same.

	 	(gg)	 	Master Lockbox Agreement. “Master Lockbox Agreement”
shall mean the Lockbox Agreement entered into by and between the Secretary of
the Air Force, Subsidiary and U.S. Bank National Association dated effective
September 1, 2005.

	 	(hh)	 	Maturity Date. “Maturity Date” shall mean September 1,
2009.

	 	(ii)	 	Member LOC’s. “Member LOC’s” shall mean those Letters
of Credit or the posting of collateral in lieu of the Letter of Credit
delivered by the Class I Members pursuant to Section 6.02 of the Operating
Agreement, each a “Member LOC.”

	 	(jj)	 	Member Security and Pledge Agreements. “Member
Security and Pledge Agreements” shall mean the pledges by the Class I Members
of their respective membership interests in the Borrower as security for
repayment of the Obligation, each a “Member Security and Pledge Agreement”.

	 	(kk)	 	Obligated Party. “Obligated Party” shall mean the
Class I Members as counterparties to the Member Security and Pledge Agreements
and America First Apartment Advisory Corporation as counterparty to the
Addendum.

	 	(ll)	 	Obligations. “Obligations” shall mean and include all
loans, advances, debts, liabilities, covenants and duties owing to Lender from
Borrower of any kind or nature, present or future, whether or not evidenced by
any promissory note, guarantee or other instrument, whether arising under this
Agreement or under any other agreement, instrument or document, whether or not
for the payment of money, whether arising by reason of an extension of credit,
opening of a letter of credit, loan, guarantee, overdraft, indemnification or
in any other manner, whether direct or indirect (including those acquired by
assignment), absolute or contingent, due or to become due, now existing or
hereafter arising and however acquired.

	 	(mm)	 	Operating Agreement. “Operating Agreement” shall mean
that Operating Agreement incorporated in the Lease.

	 	(nn)	 	Person. “Person” shall mean and include an individual,
a partnership, a joint venture, a corporation, a trust, an unincorporated
organization and a government or any department or agency thereof.

	 	(oo)	 	Project. “Project” shall mean the real estate project
as referred to the recitals above.

	 	(pp)	 	Project Documents. “Project Documents” shall mean the
Lease, Bond Documents, Direct Loan Documents, Borrower LOC, Development
Agreement, Construction Management Agreement, Operating Agreement, Master
Lockbox Agreement and any other agreement entered into by Borrower or
Subsidiary related to the Project.

	 	(qq)	 	Property Management Agreement. “Property Management
Agreement” shall mean that agreement dated September 1, 2005 by and between the
Property Manager and Subsidiary.

	 	(rr)	 	Property Management Fees. “Property Management Fees”
shall mean all fees due to Property Manager under the Property Management
Agreement.

	 	(ss)	 	Property Manager. “Property Manager” shall mean
America First Properties Management Company, L.L.C., a Delaware limited
liability company.

	 	(tt)	 	Property Manager’s Irrevocable Direction of Payment.
“Property Manager’s Irrevocable Direction of Payment” shall mean the Property
Manager’s direction of payment described in Subsection 2(c)(17).

	 	(uu)	 	Regulatory Authorities. “Regulatory Authorities” shall
mean all domestic and foreign governmental authorities, including, but not
limited to, any agency, commission or department thereof, each a “Regulatory
Authority.”

	 	(vv)	 	Subsidiary. “Subsidiary” shall mean Offutt AFB America
First Communities LLC, a Nebraska limited liability company, the owner of the
Project and a wholly owned subsidiary of Borrower.

	 	2.	 	The Loan.

	 	(a)	 	Note.

	 	(1)	 	Advance. Subject to the provisions
hereof, Lender shall extend to Borrower credit under the Note in a
single advance not to exceed Seven Million Four Hundred Forty-Three
Thousand Nine Hundred Forty-Eight Dollars $7,443,948, for the purpose
of financing Borrower’s activities in relation to the Project and as
otherwise described in the Operating Agreement.

	 	(2)	 	Interest Rate. The unpaid principal
balance of the Note shall accrue interest in accordance with this
Subsection 2(a)(2) (the “Interest Rate”):

	 	(i)	 	Variable Rate. The
unpaid principal balance of the Note shall accrue interest at a
variable interest rate, which is a rate per year, equal to the
LIBOR Daily Floating Rate plus nine (9) percentage points. The
“LIBOR Daily Floating Rate” is a fluctuating rate of interest
equal to the average per annum interest rate (rounded upwards to
the nearest 1/100 of one percent) at which U.S. dollar deposits
would be offered for one month by major banks in the London
inter-bank market, as shown on Telerate Page 3750 (or any
successor page) as determined for each Business Day at
approximately 11:00 a.m. London time two (2) London Banking Days
prior to the date in question. If such rate does not appear on
Telerate Page 3750 (or any successor page), the rate will be
determined by such alternate method as reasonably selected by
Lender. A “London Banking Day” is a day on which the major
banks in the London inter-bank market are open for business and
dealing in offshore dollars. Interest will accrue on any day
which is not a London Banking Day at the rate in effect on the
immediately preceding London Banking Day.

	 	(ii)	 	Accrual; Calculation.
Interest shall accrue on the unpaid principal balance of the
Note from and including the day of the initial advance of the
Note (and from the date of any protective advance) to but
excluding the day the Note is paid in full. All interest and
fees will be computed on the basis of a 360-day year and the
actual number of days elapsed.

	 	(3)	 	Default Interest. The Default Interest
rate shall be the lesser of (a) the Interest Rate plus four (4)
percentage points or (b) the highest rate allowed by Applicable Law.
Lender may, at its option and upon any Event of Default, assess and
accrue interest at the Default Rate on the Note without declaring the
Note in default.

	 	(4)	 	Principal and Interest.

Unless otherwise accelerated pursuant to the provisions hereof, the
principal amount of the Note, together with accrued interest on the
outstanding balance, shall be due and payable in accordance with the
following payment schedule which payments, if not otherwise made by
Borrower, may be withdrawn by Lender from the America First Lockbox:

Payment Date Principal amount Due and Payable

(together with accrued interest to
date of payment)

	 	 	 
	December 1, 2005

March 1, 2006

June 1, 2006

September 1, 2006

December 1, 2006

March 1, 2007

June 1, 2007

September 1, 2007

December 1, 2007

March 1, 2008

June 1, 2008

September 1, 2008

December 1, 2008

March 1, 2009

June 1, 2009

September 1, 2009

	 	$350,000

$350,000

$350,000

$350,000

$350,000

$350,000

$350,000

$350,000

$750,000

$750,000

$750,000

$750,000

$400,000

$400,000

$400,000

All remaining principal balance.

	 	(5)	 	Prepayment. If any prepayment of
principal on the Note occurs on or prior to the second anniversary of
the date of this Note, there shall then be immediately due and payable
a prepayment fee of 1.25% of such prepayment amount.. If any
prepayment occurs after the second anniversary of the date of the Note
there shall then be immediately due and payable a prepayment fee of
        .75% of such prepayment amount. Borrower acknowledges that the
prepayment fee represents a reasonable estimate of the loss that may be
sustained by Lender due to the payment of any of the indebtedness
evidenced hereby prior to the due date. The prepayment fee shall be
paid without prejudice to the right of Lender to collect any other
amounts provided to be paid hereunder or under the Note. Borrower
hereby expressly: (i) waives any statutory and common law rights it may
have to prepay the Note, in whole or in part, without penalty, upon
acceleration of the maturity date; and, (ii) agrees that if, for any
reason, a prepayment of any or all of the Note is made, whether
voluntary or upon or following any acceleration of the maturity date by
Lender on account of any default by Borrower under the terms of the
Note, then Borrower shall be obligated to pay the applicable prepayment
fee concurrently therewith. No tender of a prepayment of the Note with
respect to which a prepayment fee is due shall be effective unless such
prepayment is accompanied by the applicable prepayment fee.

	 	(b)	 	Financing Fee. Borrower agrees to pay Lender a
financing fee of one percent (1%) of the amount of the Note (the “Financing
Fee”) upon execution of this Agreement. Borrower agrees and acknowledges that
payment of such financing fee is a condition precedent to the disbursement of
the Loan to Borrower.

	 	(c)	 	Conditions to Advance. The Loan is made solely for the
purposes designated in Subsection 2(a)(1) and the advance of the Loan is
further conditioned on and restricted by the following:

	 	(1)	 	No material adverse change in the financial
condition of Borrower or Subsidiary prior to the advance;

	 	(2)	 	Borrower is not currently in default under this
Agreement (including any event, which would constitute an Event of
Default with the giving of notice, passage of time or happening of any
further condition, event or act);

	 	(3)	 	Receipt by Lender of a duly executed Compliance
Certificate, in form and content acceptable to Lender;

	 	(4)	 	Absence of intervening or conflicting liens on
or claims to Collateral;

	 	(5)	 	Execution and delivery of the Operating
Agreement;

	 	(6)	 	Execution and delivery of the Lease;

	 	(7)	 	Execution and delivery of the Forward
Commitment;

	 	(8)	 	Execution and delivery of the Bond Documents;

	 	(9)	 	Execution and delivery of the Construction
Management Agreement;

	 	(10)	 	Execution and delivery of the Development
Agreement;

	 	(11)	 	Execution and delivery of the Master Lockbox
Agreement;

	 	(12)	 	Execution and delivery of the American First
Lockbox Agreement;

	 	(13)	 	Execution and delivery of the Assignment of the
Borrower’s rights under the Construction Management Agreement in form
and content acceptable to Lender;

	 	(14)	 	Execution and delivery of the Assignment of the
Borrower’s rights under the Development Agreement in form and content
acceptable to Lender;

	 	(15)	 	Execution and delivery of the Assignment of the
Property Manager’s rights under the Property Management Agreement;

	 	(16)	 	Receipt by Lender of the acknowledgement by
U.S. Bank National Association, lockbox agent under the Master Lockbox
Agreement of Borrower’s irrevocable direction (the “Borrower’s
Irrevocable Direction of Payment”) to pay all Development Fees and
Construction Management Fees payable to or for the benefit of Borrower
under the Master Lockbox Agreement to U.S. Bank National Association,
as lockbox agent under the America First Lockbox Agreement, each of
such acknowledgement and direction to be in form and content acceptable
to Lender;

	 	(17)	 	Receipt by Lender of an executed letter to U.S.
Bank National Association, lockbox agent under the Master Lockbox
Agreement of Property Manager’s irrevocable direction (the “Property
Manager’s Irrevocable Direction of Payment”) to pay all amounts payable
to or for the benefit of Borrower under the Master Lockbox Agreement to
U.S. Bank National Association, as lockbox agent under the America
First Lockbox Agreement, in form and content acceptable to Lender to be
delivered at Lender’s discretion after an Event of Default;

	 	(18)	 	Receipt by Lender of a legal opinion from Kutak
Rock LLP, in form and content reasonably acceptable to Lender, opining
as to the (i) existence and organizational authority of Borrower and
Subsidiary; and (ii) the due authorization, delivery and enforceability
of the Operating Agreement, the Project Documents, and the Loan
Documents.

	 	(19)	 	Receipt by Borrower of the Member LOC’s in form
and content acceptable to Lender;

	 	(20)	 	Delivery by Borrower of the Borrower LOC in
full compliance with the provisions of the Forward Commitment, Bond
Documents and Lease;

	 	(21)	 	Receipt by Lender of the Financing Fee;

	 	(22)	 	Receipt by Lender of any and all documents or
other items reasonably required by Lender.

	 	(d)	 	Protective Advances. Lender may make additional or
protective advances, at its option, whether the Note is in good standing or in
default. All such advances will become part of the principal indebtedness, be
immediately due and payable, and be charged interest at the Default Rate from
the date of advance until payment is received from Borrower. Such additional
or protective advances may be made to (1) protect the Collateral, as well as
payments to protect the Collateral from claims of other creditors, diminution
in value, waste, destruction, or abandonment; (2) pay costs and expenses
(including but not limited to attorney fees and court costs) incurred by Lender
in connection with enforcement of any rights granted herein, in any documents
granting rights in Collateral, or under any agreement, document or instrument
executed in connection with any Note or any litigation to collect any
Obligation, protect its rights and ability to collect any Obligation, or
protect any Collateral (whether the litigation is instituted by Borrower,
Lender, or a third party); and (3) pay for optional financial services or for
other services or items required as a condition to advancing the Loan.

	 	(e)	 	Changes in Law Rendering Certain LIBOR Rate Loans
Unlawful. In the event that any change in any Applicable Law (including
the adoption of any new Applicable Law) or any change in the interpretation of
any Applicable Law by any judicial, governmental or other regulatory body
charged with the interpretation, implementation or administration thereof,
should make it (or in the good-faith judgment of the Lender or its source of
funding should raise a substantial question as to whether it is) unlawful for
the Lender or its source of funding to make, maintain or fund LIBOR rate
loans, then (1) the Lender shall promptly notify the Borrower, (2) the
obligation of the Lender to offer the Loan at a LIBOR rate shall, upon the
effectiveness of such event, be suspended for the duration of such
unlawfulness, and (3) the interest rate on the Loan shall convert to a
substantially similar interest rate as determined by Lender.

	 	(f)	 	Payment Dates. Payments due and unpaid on a date which
is not a Business Day shall be payable on the next Business Day and the amount
of such payment shall accrue interest at the Interest Rate until received by
Lender.

	 	(g)	 	Application of Payment. Except as otherwise provided
herein, payments, collections, proceeds of Collateral or other amounts received
by Lender under or in regard to the Note will, unless Lender may otherwise
determine in its sole discretion, be applied first to protective advances and
fees, then to accrued interest on the Note and then to principal on the Note,
all to the extent of any such amount. In the Event of Default (including any
event, which would constitute an Event of Default with the giving of notice,
passage of time or happening of any further condition, event or act), amounts
to be applied to interest and/or principal shall be applied to the Note.

	 	(h)	 	Fees and Lockbox Payments. Except as otherwise
provided in Subsection 2(j), the Construction Management Fees or Development
Fees under the Master Lockbox Agreement shall be forthwith delivered to or at
the direction of Lender for application to the Obligations. Further, upon, or
anytime after, an Event of Default (including any event that would constitute
an Event of Default with the giving of notice, passage of time or happening of
any further condition, event or act), Lender may at its sole discretion deliver
the Property Manager’s Irrevocable Direction of Payment executed by the
Property Manager simultaneous with the Assignment of Property Management
Agreement and attached thereto as Exhibit “C”. Upon Lender’s delivery
of the Property Manager’s Irrevocable Direction of Payment, the Property
Management Fees shall be forthwith delivered to or at the direction of Lender
for application to the Obligations.

	 	(i)	 	Equity Payments. All dividends, interest,
distributions or other amounts and all property received in respect of the
equity interest of Borrower in Subsidiary shall be forthwith delivered to
Lender for application to the Obligations.

	 	(j)	 	America First Lockbox. In furtherance of the
provisions or Subsections 2(a)(4), 2(h) and 2(i) above, Lender, Borrower and
U.S. Bank National Association have executed the America First Lockbox
Agreement for purposes of the collection, deposit and application of all such
amounts to the Obligations; provided, however, in the absence of an Event of
Default (including any event which would constitute an Event of Default with
the giving of notice, passage of time or happening of any further condition,
event or act), Lender agrees to allow the release of certain amounts from the
America First Lockbox Agreement to (1) reimburse to Borrower or otherwise fund
Borrower’s payment of such operating expenses reasonably and necessarily
incurred by Borrower and approved by Lender, all in an amount not to exceed
$150,000 per calendar year (or prorata portion thereof), any such release to be
conditioned upon Lender’s receipt of an itemized request from Borrower and such
supporting documentation as Lender may request and Lender written instruction
to the lockbox agent to release such amount to Borrower. as Lender may in its
discretion approve and (2) reimburse (once the Property Management Fees are
being deposited to the America First Lockbox) to Property Manager or otherwise
fund Property Manager’s payment (from the Property Manager’s Fees so deposited)
of such operating expenses reasonably and necessarily incurred by Property
Manager in the performance of its obligations under the Property Management
Agreement and approved by Lender, all in an amount not to exceed 25% of the
Property Management Fees deposited in the America First Lockbox Account, any
such release to be conditioned upon Lender’s receipt of an itemized request
from the Property Manager and such supporting documentation as Lender may
request and Lender written instruction to the lockbox agent to release such
amount to the Property Manager as Lender may in its discretion approve.

	 	(k)	 	Borrower authorizes Lender to fund the Loan by wire transfer
of the initial advance to the lockbox agent under the Master Lockbox Agreement
pursuant to the following wire instructions:

[Redacted- to be furnished supplementaly at the Commission’s request]

	 	3.	 	Security.

	 	(a)	 	As security for the payment and/or performance of all
Obligations, Borrower hereby grants to Lender, a security interest in and lien
on all right, title and interest of the Borrower in the following described
property wherever located and whether now or hereinafter existing or now owned
or hereafter created, acquired or arising (the “Collateral”):

	 	(1)	 	All assets of the Borrower , including but not
limited to:

	 	(i)	 	all goods, machinery, equipment,
furniture, furnishings, fixtures, inventory, and other tangible
personal property and all accessories and parts relating
thereto;

	 	(ii)	 	all accounts, accounts
receivable, payment intangibles, lease payments, rental
payments, lease rights, contract rights and other rights to the
payment of money, including all rights and all fees or other
amounts received by or payable to the Borrower pursuant to the
Construction Management Agreement, the Development Agreement,
the Master Lockbox Agreement or the America First Lockbox
Agreement;

	 	(iii)	 	all general intangibles of any
kind or nature whatsoever, including, without limitation, all
payment intangibles, all patents, trademarks, copyrights and
other intellectual property, and all applications for,
registrations of and licenses of the foregoing and all computer
software, product specifications, trade secrets, licenses, trade
names, service marks, goodwill, tax refunds, rights to tax
refunds, franchises, rights related to prepaid expenses, rights
under executory contracts, causes of action and rights under
partnership, joint venture, co-ownership, management and/or
similar agreements and/or arrangements;

	 	(iv)	 	all investment property and
financial assets of any kind or type, whether certificated or
uncertificated, including, without limitation, all securities,
securities accounts, securities entitlements, stocks, bonds,
options, warrants, commodity contracts, futures contracts,
commodity accounts, commodity options, commercial paper, money
market funds and/or accounts, Treasury bills, notes and bonds,
instruments, certificates of deposit, mutual fund shares, cash
and money, together with all rights, income, revenues, proceeds
and profits therefrom, including, without limitation, all
dividends, distributions (cash or stock, extraordinary as well
as ordinary), interest and other payments, all additions
thereto, substitutions or replacements thereof, any goods or
other property to be delivered thereunder, and any exchanges for
or changes in any of the foregoing;

	 	(v)	 	all monies, reserves, deposits,
cash, cash equivalents and other property now or at any time or
times hereafter in the possession or under the control of U.S.
Bank National Association pursuant to either the Master Lockbox
Agreement or the America First Lockbox Agreement, as well as any
interest of Borrower in or under such lockbox agreements;

	 	(vi)	 	all deposit accounts and
certificates of deposit and all interest or dividends thereon;

	 	(vii)	 	all commercial tort claims;

	 	(viii)	 	all supporting obligations;

	 	(ix)	 	all letter of credit rights,
including the rights of Borrower under the Borrower LOC and the
Member LOC’s;

	 	(x)	 	all books, records, computer
records, computer disks, ledger cards, programs and other
computer materials, invoices, orders and other property and
general intangibles at any time evidencing or relating to any of
the Collateral;

	 	(xi)	 	all accessions to any of the
property described above and all substitutions, renewals,
improvements and replacements of and additions thereto; and

	 	(xii)	 	all proceeds, including, without
limitation, proceeds which constitute property of the types
described above and any rents and profits of any of the
foregoing items, whether cash or noncash, immediate or remote,
including, without limitation, all income, accounts, contract
rights, general intangibles, payment intangibles, chattel paper,
notes, drafts, acceptances, instruments and other rights to the
payment of money arising out of the sale, rental, lease,
exchange or other disposition of any of the foregoing items
(provided, however, that nothing contained herein or in any
financing statement shall be deemed to permit or assent to any
such disposition) any indemnities, warranties and guaranties
payable by reason of loss or damage to or otherwise with respect
to any of the foregoing items.

	 	(2)	 	In furtherance of the foregoing, Borrower has
additionally executed in favor of Lender, the Assignment of
Construction Management Agreement and Development Agreement, and
Borrower’s Irrevocable Direction of Payment.

	 	(b)	 	The Obligations are further secured by: (1) the membership
interests of the Class I Members in the Borrower pursuant to the Security and
Pledge Agreement; and (2) the Assignment of the Property Management Agreement
and payments under the Property Management Agreement, together with Property
Manager’s Irrevocable Direction of Payment of those payments (upon the
conditions described in Subsection 2(h)) from the Master Lockbox into the
America First Lockbox.

	 	(c)	 	In addition to all other security interests and rights granted
to Lender to secure the Obligations, Lender shall have the right, pursuant to
that Addendum dated effective September 1, 2005 to the Second Amended and
Restated Advisory Agreement between Lender and America First Apartment Advisory
Corporation dated as of June 3, 2004, to offset upon an Event of Default all
fees or other amounts then or thereafter payable by Lender under such agreement
and to credit the same against the Obligations until such time as the
Obligations are satisfied.

	 	(d)	 	Without limiting any other rights of Lender under this
Agreement, any Applicable Law or otherwise, Borrower hereby grants Lender a
security interest and right of offset against the Obligations in and in respect
to any and all property of Borrower, whether now owned or acquired in the
future, which is in or comes into the possession of Lender or the lockbox agent
for the America First Lockbox (including, but not limited to, property given by
Borrower to Lender for safekeeping, collection, or exchange, deposits, advance
conditional payments, accounts and certificates, as well as all dividends and
distributions from the Collateral and all amounts paid under the Construction
Management Agreement, Development Agreement and Master Lockbox).

	 	(e)	 	The security interests as granted herein are in addition to any
security interest granted to Lender under the terms of any other document or
agreement.

	 	4.	 	Perfection and Protection of Security Interest; Taxes.

Until all Obligations have been fully satisfied, the security interest of the Lender
in the Collateral, and all proceeds and products thereof, will continue in full
force and effect. During the term of this Agreement, Borrower will not permit any
lien, claim or encumbrance (other than those approved in writing by Lender) to
remain against any of the Collateral and Borrower will perform any and all steps
requested by Lender to perfect, maintain and protect any security interest in the
Collateral in which a security interest is granted under this Agreement or any other
agreement, including, without limitation, executing and filing financing and
continuation statements in form and substance satisfactory to Lender. Lender may
file one or more financing statements disclosing the Security Agreement under this
Agreement. Borrower hereby expressly agrees that a carbon, photographic,
photostatic, or other reproduction of this Agreement or of a financing statement is
sufficient as a financing statement. In order to protect any security interest which
Lender is granted hereunder, Lender may, in its sole discretion, discharge any lien
or encumbrance or bond the same, pay any insurance, pay any service bureau or obtain
any record and charge the same to Borrower as part of the Obligations, payable on
demand and secured by the Collateral.

	 	5.	 	Warranties and Representations.

Borrower warrants and represents that:

	 	(a)	 	Borrower is qualified to do business under the laws of the
State of Nebraska, duly organized, validly existing, and in good standing; and
has all requisite power and authority, corporate or otherwise, to conduct its
business, to own its property and execute, deliver and perform all of its
obligations under this Agreement;

	 	(b)	 	The Loan Documents given by Borrower to Lender in regard to the
Loan are enforceable in accordance with their terms;

	 	(c)	 	The execution, delivery and/or performance by Borrower of the
Loan Documents, shall not, by lapse of time, the giving of notice, or otherwise
constitute a violation of any Applicable Law or a breach of any provision
contained in Borrower’s Operating Agreement or contained in any agreement,
instrument or document to which Borrower is now a party or by which Borrower is
bound;

	 	(d)	 	Borrower’s use of any money advanced by Lender to Borrower
pursuant to this Agreement are, and will continue to be (1) legal and proper
(corporate or otherwise) uses duly authorized, (2) solely for the purposes
described herein, and (3) such uses are and will be consistent with all
Applicable Laws and statutes as in effect as of the date hereof;

	 	(e)	 	Borrower has sole, entire, good, indefeasible, and merchantable
title to and ownership of the Collateral, free and clear of all liens, claims,
security interests and encumbrances;

	 	(f)	 	Other than the Project Documents, neither Borrower nor
Subsidiary is a party to any contract or agreement, or subject to any charge,
corporate restriction, judgment, decree or order materially and adversely
affecting its business, property, assets, operations or condition, financial or
otherwise;

	 	(g)	 	Neither Borrower nor Subsidiary is in violation of any
Applicable Law in any respect materially and adversely affecting its business,
assets, operations or condition, financial or otherwise or the Collateral;

	 	(h)	 	Neither Borrower nor Subsidiary is in default with respect to
any of the Project Documents, any note, indenture, loan agreement, mortgage,
lease, deed or other similar agreement relating to the borrowing of monies to
which it is a party or by which it is bound;

	 	(i)	 	Financial statements and all other financial information
submitted to Lender by Borrower, AFREG, Hoich, the members of Hoich, Parent and
Subsidiary shall fairly and accurately present the Borrower’s assets,
liabilities, financial condition and results of operations and those of the
Subsidiary and such other Persons described therein as of the date thereof;
there will be no omissions from the financial statements and financial
information or other facts or circumstances not reflected in the financial
statements which may be material and there will be no material and adverse
change in the assets, liabilities or financial condition between the date of
the financial statements and their submission to Lender, and Borrower’s records
shall be kept at its address as it appears in this Agreement unless written
notice is provided to Lender at least thirty (30) days prior to such change;

	 	(j)	 	The Operating Agreement and all agreements Borrower or the
Subsidiary has respectively entered into (or will enter into) related to the
Project including without limitation, the Project Documents are valid and
enforceable against Borrower and Subsidiary as applicable and, to the knowledge
of Borrower, the other respective parties thereto;

	 	(k)	 	Borrower has, and will provide Lender true and accurate copies
of all the Project Documents upon execution;

	 	(l)	 	Borrower has conducted appropriate due diligence on the Project
and has no knowledge of any facts or circumstances that would prevent or delay
the Project from timely completion in accordance with the Project Documents and
Critical Path;

	 	(m)	 	Except as provided herein, Borrower shall not pledge, sell,
assign, transfer, create or suffer to exist any security interest in or other
lien or encumbrance on any part of the Collateral;

	 	(n)	 	Except as related to the Borrower LOC, the AFREG Note and the
Hoich Note, Borrower will incur no obligations related to the borrowing of
monies prior to satisfaction of the Obligations;

	 	(o)	 	Except for distributions from Subsidary, the Development Fees
and Construction Management Fees are the only source of income anticipated by
Borrower and neither Borrower nor its Class I Members have any knowledge of or
plans for any other future sources of income to Borrower. Borrower is entitled
to receive payment out of the Master Lockbox of Reimbursable Costs as defined
in, and pursuant to the terms of, the Construction Management Agreement.
Borrower agrees that Borrower shall only claim Reimbursable Costs where
Borrower has incurred actual expenses with unaffiliated third party vendors
that are directly related to performing its obligations under that agreement.
Further, Borrower agrees that its Class I Members may not receive any payment
pursuant to Borrower’s collection of Reimbursable Costs regardless if its Class
I Members performed services for Borrower.

	 	6.	 	Negative Covenants.

Without Lender’s prior written consent, Borrower covenants that neither the Borrower
nor Subsidiary will from the Effective Date and until the Maturity Date and, in any
event, until satisfaction of all Obligations:

	 	(a)	 	Merge or consolidate with or acquire any other entity or sell,
transfer or otherwise dispose of all or any substantial amount of its property
or business other than in the ordinary course of its business;

	 	(b)	 	Create, acquire or permit to exist any subsidiary other than
Subsidiary;

	 	(c)	 	Make or allow (1) any change of Managing Member (consent to
which shall not be unreasonably withheld by Lender) or (2) any Change in
Control of Borrower whether arising from any individual or aggregate acts,
occurrences or events;

	 	(d)	 	Directly or indirectly, purchase, acquire or lease any material
property from, or sell, transfer or lease any material property to, or
otherwise deal with, in the ordinary course of business or otherwise, any
affiliated Person, except for good consideration upon fair and
reasonable terms that are no less favorable to the Borrower (or involved
Subsidiary if Borrower not involved) than those which might be obtained in an
arm’s length transaction at the time;

	 	(e)	 	Enter into any transaction (other than Subsidiary entering into
the Project Documents) which materially and adversely affects the Collateral or
Borrower’s ability to repay the Obligations;

	 	(f)	 	Except for Subsidiary as contemplated by the Project Documents,
encumber, pledge, mortgage, grant a security interest in, assign, sell, lease,
trade or otherwise dispose of or transfer, whether by sale, merger,
consolidation, liquidation, dissolution, or otherwise of any material asset;

	 	(g)	 	Make or allow any direct or indirect lien on or pledge of the
equity interests in Borrower or Subsidiary;

	 	(h)	 	Make or allow (either by Borrower or Subsidiary) the
termination, amendment or modification, or the waiver of any rights under the
Operating Agreement or any Project Documents without the prior written consent
of Lender which consent shall not be unreasonably withheld or delayed;

	 	(i)	 	Except as related to the Borrower LOC, the AFREG Note and the
Hoich Note, Borrower will incur no obligations related to the borrowing of
monies prior to satisfaction of the Obligations.

	 	7.	 	Affirmative Covenants.

Borrower covenants that it will, from the Effective Date and until the Maturity Date
and in any event until all Obligations are satisfied:

	 	(a)	 	Maintain and cause the Subsidiary to maintain its
organizational existence, as well as qualification and good standing in all
states in which such qualification and good standing are necessary in order for
such entity to lawfully conduct its business and own its property as conducted
and owned in such states;

	 	(b)	 	File and cause Subsidiary to file all federal, state and local
tax returns and other reports as required by law to be filed, maintain adequate
reserves for the payment of all taxes and similar charges, and pay promptly,
when due, all taxes and similar charges;

	 	(c)	 	Maintain the Collateral, as the same is constituted from time
to time, free and clear of all liens, claims, security interests and
encumbrances, except those held by Lender;

	 	(d)	 	Notify Lender in writing, promptly upon learning thereof, of
any litigation affecting Borrower or any Subsidiary (whether or not the claim
is considered by Borrower to be covered by insurance) and of the institution of
any suit or administrative proceeding which may materially and adversely affect
Lender’s security interest in the Collateral or the business, operations or
financial condition of such entity;

	 	(e)	 	Notify Lender in writing, promptly upon learning thereof, of
any violation of any Applicable Law, by Borrower or Subsidiary, which violation
in any respect may materially and adversely affect the Collateral or such
entity’s business, property, assets, operations or condition, financial or
otherwise;

	 	(f)	 	Notify Lender in writing, within one (1) Business Day after
knowledge of a default by Borrower or Subsidiary under any Project Document or
any other note, indenture, loan agreement, mortgage, lease, deed or other
similar agreement to which a party or by which bound, said notification to
include a Manager’s Certificate specifying the nature and period of existence
thereof and what action the Borrower or the Subsidiary proposes to take with
respect thereto;

	 	(g)	 	Execute and/or deliver all such documents and take such action
as Lender may deem necessary to protect and/or maintain its secured position
and protect and preserve the Collateral;

	 	(h)	 	Comply with and cause Subsidiary to comply with all Applicable
Laws and keep in effect all permits and approvals which relate to the Project
and the lawful operation of the business of the respective entity;

	 	(i)	 	Comply with and cause Subsidiary to comply with the
requirements of all Applicable Laws pertaining to environmental protection,
pollution and hazardous waste, and furthermore take such action from time to
time as may be necessary to protect the Collateral and the business operations
of the Borrower and Subsidiary from acts and events which may give rise to any
adverse environmental, toxic or hazardous substance claims. Borrower
furthermore agrees to indemnify and hold Lender and the Lender harmless from
and against any such adverse environmental, toxic or hazardous substance
claims, including without limitation, all costs of representation,
investigation and remediation. The obligation to indemnify shall survive
foreclosure on the Collateral and repayment of all other Obligations;

	 	(j)	 	Comply with and cause Subsidiary to comply with the
requirements of ERISA. Borrower shall furthermore notify Lender in writing,
within three (3) Business Days of knowledge thereof, of any suspected
violation, said notification to include a Manager’s Certificate specifying the
nature and period of existence thereof and what action the Borrower or
Subsidiary proposes to take with respect thereto;

	 	(k)	 	Comply with Section 7.04 of the Operating Agreement and not
declare or make any cash distributions to its Class I Members prior to
satisfaction of the Obligations; and

	 	(l)	 	Comply with and cause the Subsidiary to timely comply with all
conditions, requirements and obligations under the Project Documents;

	 	(m)	 	Cause the Subsidiary to take such action as necessary to
enforce its rights and obtain timely payment under the Construction Management
Agreement, Development Agreement and Master Lockbox Agreement of all amounts
owing to Borrower and obtain the deposit of such amounts in the America First
Lockbox, to include the fees and other amounts payable under Construction
Management Agreement and Development Agreement in the annual Project Budget
under the Master Lockbox Agreement and, if necessary, a request for funding of
an Operating Shortfall as described in the Master Lockbox Agreement;

	 	(n)	 	Take such action as necessary to require the Member LOC’s to be
maintained in accordance with the provisions of the Operating Agreement;

	 	(o)	 	Maintain the Borrower LOC in accordance with the Forward
Commitment and Bond Documents;

	 	(p)	 	Take such action as necessary to cause the timely cash funding
of the respective Class I Member’s cash funding of its capital contribution in
Borrower and Borrower’s capital contribution in the Subsidiary in accordance
with the provisions of the Operating Agreement and Forward Commitment;

	 	(q)	 	Take such action as necessary to allow Lender the opportunity
to cure any default by Borrower and/or Subsidiary under the Construction
Management Agreement and the Development Agreement and, to the extent
reasonably possible, the Lease or any other Project Document; provided however,
Lender shall have no obligation to cure under any of the same and any amounts
expended by Lender shall be deemed a protective advance hereunder;

	 	(r)	 	Cause Subsidiary to maintain the Forward Commitment in full
force and effect and obtain timely funding as provided therein; and

	 	(s)	 	Take such action and cause the Subsidiary to take such
reasonable action as necessary to avoid the removal of Borrower as Construction
Manager for the Project.

	 	(t)	 	Notify Lender in writing, within fifteen (15) days after the
end of a month in which a deviation from the Critical Path for the Project (as
determined on a monthly basis) occurs that may materially and adversely affect
Borrower’s ability to receive fees pursuant to the Construction Management
Agreement or Development Agreement or to use such fees (once received) to make
payment of the Obligations. Such notice shall include: (i) a Manager’s
Certificate that contains reasonable detail as to the deviation from the
Critical Path and a proposed course of action with respect to how the Borrower
intends to address such deviation, (ii) a certificate from the Construction
Consultant that such deviation is not material, and (iii) a certificate from
the Construction Consultant, that the proposed course of action is reasonable
under the circumstances and will restore the Project to compliance with the
Critical Path and that such deviation will not result in a default under the
Project Documents. Borrower agrees that it shall diligently pursue any such
corrective action to completion.

	 	(u)	 	Notify Lender in writing, within thirty (30) days after the end
of a quarter of any material variation in the overall Project Budget relating
to deposits in the Construction Escrow Account (as those terms are defined in
the Master Lockbox Agreement) that may materially and adversely affect
Borrower’s ability to receive fees pursuant to the Construction Management
Agreement or Development Agreement or to use such fees (once received) to make
payment of the Obligations. Such notice shall contain a Manager’s Certificate
that contains (i) reasonable detail as to the variation in the overall Project
Budget, and (ii) a proposed course of action with respect to how the Borrower
intends to address such variation and that such action will be adequate to
insure the Construction Escrow Account to the extent necessary to fund the
Construction Management Fees and Development Fees. Borrower agrees that it
shall diligently pursue any such corrective action to completion.

	 	8.	 	Financial Covenants.

Borrower covenants that from the Effective Date and until the Maturity Date and, in
any event, until satisfaction of all Obligations, it will cause Subsidiary to comply
with the following:

	 	(a)	 	Debt Service Coverage Ratio equal to or greater than the
Pre-Completion Debt Service Requirement and, after the Completion Date, equal
to or greater than the Post-Completion Date Debt Service Requirement, all as
such terms are defined under the Master Lockbox Agreement;

	 	(b)	 	any and all financial covenants not otherwise described above
which are applicable to Subsidiary under the Project Documents.

	 	9.	 	Reporting and Inspection.

	 	(a)	 	Borrower and AFREG shall furnish to Lender as soon as
practicable and in any event within forty-five (45) days after the end of each
quarter, internally prepared consolidated statements of income and the
individual statements of Subsidiary for the period from the beginning of the
current fiscal year to the end of such period, and consolidated balance sheets
of Borrower, Hoich and each member of Hoich and the individual balance sheets
of Subsidiary at the end of such period, setting forth in each case in
comparative form figures for the corresponding period in the preceding fiscal
year, prepared in accordance with GAAP and certified by an authorized financial
officer of Borrower, Subsidiary, Hoich or the Hoich member (as appropriate),
subject to changes resulting from year-end adjustments, said financial
statements to be accompanied by a Manager’s Certificate certifying that no
Event of Default is in existence (including any event which would constitute an
Event of Default with the giving of notice, passage of time or happening of any
further condition, event or act) under the Project Documents.

	 	(b)	 	Borrower shall furnish to Lender as soon as practical after the
end of each fiscal year and in any event within ninety (90) days thereafter
consolidated audited financial statements for Subsidiary and for America First
Companies, L.L.C., a Delaware limited liability company (“Parent”), as well as
consolidated balance sheets and consolidated statements of income and
stockholder’s equity of Borrower and the individual financial statements of
Subsidiary, setting forth in each case in comparative form corresponding
figures (consolidated as to Borrower) from the preceding annual audit. Such
Subsidiary and Parent financials shall be prepared and certified, at Borrower’s
expense, by an independent certified public accountant acceptable to the Lender
who is a member of the American Institute of Certified Public Accountants.

	 	(c)	 	Borrower shall furnish to Lender with reasonable promptness,
such other financial data and projections as Lender may reasonably request in
regard to Borrower or Subsidiary.

	 	(d)	 	Each financial statement (or other documentation) delivered
pursuant to this Section shall be prepared and presented in accordance with
GAAP (unless superceded by regulatory requirements) and shall be in reasonable
detail satisfactory to Lender.

	 	(e)	 	Lender and its respective representatives shall have the right
to visit and inspect all properties, corporate books and financial records of
Borrower or Subsidiary (and to make copies or extracts therefrom); to discuss
the affairs, finances and accounts of any of such entities with the managers of
Borrower or Subsidiary and their independent public accountants, all at such
reasonable times and as often as Lender may reasonably request; and to cause
the books of Borrower or Subsidiary to be audited by independent public
accountants selected by Lender as often as may be reasonably requested,
provided, however, that such inspection and audit shall be at the expense of
Lender.

	 	(f)	 	Borrower will require (and cause Subsidiary to require) U.S.
Bank and any other of the financial or other institutions with which it
maintains or has maintained lockbox, depository or operating accounts to
promptly provide such information concerning the Borrower (or such Subsidiary),
its financial condition and any transactions as Lender may from time to time
request.

	 	(g)	 	Borrower shall furnish and cause Subsidiary to furnish to
Lender upon receipt any notices of that pertain to non-performance, default,
any events that with the passage of time or happening of any further condition,
event or act could constitute a default under the Project Documents or any
other agreement entered into by Borrower or the Subsidiary related to the
Project or any other notice that relates to matters that reasonably could
materially impact the Collateral or materially adversely impact Borrower’s
financial condition.

	 	10.	 	Due on Sale.

The Note is “Due on Sale”, with the Lender having the option to accelerate in the
event of (a) direct or indirect sale, transfer or further encumbrance of any item of
Collateral other than inconsequential personal property in the ordinary course of
business or (b) Subsidiary’s direct or indirect sale or transfer of any interest in
the Project or under the Lease.

	 	11.	 	Default.

In the following events (each an “Event of Default”), Lender may in its sole
discretion declare a default, accelerate the time for payment and demand immediate
payment in full of all Obligations and exercise its remedies under this Agreement
and the Loan Documents:

	 	(a)	 	Borrower shall fail to pay, when due (including as the result
of acceleration provided for under this Agreement), any Obligation owing from
Borrower to Lender;

	 	(b)	 	Any representation or warranty made by Borrower or Subsidiary
(or any of their respective officers or affiliates) under or in connection with
this Agreement (including any certificates or requested financial information)
shall prove to have been incorrect or misleading in any material respect and
Borrower has not cured the same within fifteen (15) days of receiving notice
from Lender;

	 	(c)	 	Borrower, Subsidiary or any Obligated Party under a Loan
Document shall commit any other material breach or fail to materially perform
any obligation under this Agreement, as amended or supplemented, or any other
agreement (including any and all Loan Documents) and Borrower has not cured the
same within fifteen (15) days of receiving notice from Lender or if it is
impossible to cure the same within fifteen (15) days then Borrower has taken
such steps acceptable to Lender to cure the same and shall diligently pursues
such cure to completion;

	 	(d)	 	If any prohibited transfer or further encumbrance of the
Collateral or any interest in the Borrower or Subsidiary, shall occur, whether
voluntary or involuntary, without the written approval of Lender;

	 	(e)	 	The suspension, termination or material restriction of the
business operations of the Borrower or Subsidiary or material adverse change in
the business operations and/or condition, financial or otherwise, of Borrower
or Subsidiary except as restricted by the Project Documents;

	 	(f)	 	If Borrower or Subsidiary shall (1) become insolvent, (2)
become generally unable to pay their respective debts as they become due, (3)
make an assignment for the benefit of creditors, or (4) call a meeting of
creditors for the composition of debts;

	 	(g)	 	If there shall be filed by or against Borrower or Subsidiary a
petition in bankruptcy or for a reorganization, or a custodian, receiver or
agent is appointed or authorized to take charge of any of their respective
properties and the respective entity has not taken reasonable steps to obtain
the dismissal of such proceedings within fifteen (15) days and does not achieve
dismissal of such proceeding within sixty (60) days of such filing;

	 	(h)	 	The occurrence of any action, event or condition which results
in a Change of Control of Borrower;

	 	(i)	 	Change in any Applicable Law or any order or other requirement
in any Legal Proceeding that may materially impair (1) the amount or
circumstances under which Subsidiary may make payment of fees to Borrower
pursuant to the Construction Management Agreement and/or Development Agreement
or (2) the ability of Borrower to receive and/or use the fees (once received)
to make payment of the Obligations;

	 	(j)	 	Borrower or Subsidiary shall take or allow any such action,
event or condition to occur which materially impairs (1) the amount or
circumstances under which any Subsidiary may pay fees to Borrower pursuant to
the Construction Management Agreement or Development Agreement or (2) the
ability of Borrower to receive and/or use such fees (once received) to make
payment of the Obligations and Borrower has not cured the same within fifteen
(15) days of receiving notice from Lender;

	 	(k)	 	Except as otherwise provided under Subsection (r) below, the
occurrence of any event of default or any event or condition which with the
giving of notice or passage of time could constitute an event of default by
Borrower or Subsidiary under any of the Project Documents or any other
agreement entered into by Borrower or Subsidiary related to the Project and the
failure of Borrower (i) to provide Lender a Manager’s Certificate within seven
(7) days of such occurrence describing the event or condition and the
corrective action to be taken, and (ii) to proceed with all due diligence to
take or obtain such corrective action;

	 	(l)	 	The termination, amendment or failure to timely close and fund
under the Forward Commitment;

	 	(m)	 	Failure of any Class I Member to maintain any Member LOC or the
Borrower to maintain the Borrower LOC;

	 	(n)	 	Failure of Borrower to cause the timely capital contributions
into the Borrower in accordance with the Operating Agreement and by Borrower
into Subsidiary in accordance with the Forward Commitment;

	 	(o)	 	Amendment of the Master Lockbox Agreement without the written
consent of Lender;

	 	(p)	 	Failure of Borrower to maintain the effectiveness of and
compliance with the Irrevocable Direction of Payment;

	 	(q)	 	Failure of Borrower to take any action necessary to maintain
the effectiveness of the America First Lockbox Agreement;

	 	(r)	 	Failure of Borrower to provide Lender with the notices and
certificates required by subsections (t) and (u) of Section 7 of this Agreement
and to diligently pursue to completion any such corrective action contained
within such notices.

The Note, this Agreement and all related Loan Documents are expressly
cross-defaulted, with default under any one document constituting default under the
remaining documents at the discretion of Lender.

	 	12.	 	Remedies.

Upon the occurrence of an Event of Default, Lender may then take such steps as are
legally available to it for the collection of loans in full, together with accrued
interest and expense (all as secured Obligations), including but not limited to
exercise of the following:

	 	(a)	 	Any right or remedy that it has under the related Loan
Documents or any other agreement with the Borrower, Subsidiary or any Obligated
Party relating to the Obligations.

	 	(b)	 	The rights and remedies of a secured party under the Uniform
Commercial Code, including the right without notice, demand or legal process of
any kind (except as may be required by law), all of which Borrower waives, at
any time or times take physical possession of the Collateral and maintain such
possession and Borrower shall, upon Lender’s demand, at Borrower’s own cost and
expense, assemble the Collateral and make it available to Lender at a place
reasonably convenient to Lender and Lender may sell and deliver any or all
Collateral and any and all other security and collateral held by Borrower for
Lender at public or private sales, for cash, upon credit or otherwise, at such
prices and upon such terms as Lender deems advisable, at Lender’s sole
discretion, and may, if Lender deems it reasonable, postpone or adjourn any
sale of the Collateral from time to time by an announcement at the time and
place of sale or by announcement at the time and place of such postponed or
adjourned sale, without being required to give any new notice of sale.
Borrower agrees that Lender has no obligation to preserve rights to the
Collateral against prior parties. Any requirement of reasonable notice shall
be met if such notice is mailed postage prepaid to Borrower at its address as
set forth herein at least five (5) days before the time of sale or other
disposition. The proceeds of sale shall be applied first to all costs and
expenses of sale, including attorneys’ fees, and second to the payment (in
whatever order Lender elects) of all Obligations. Borrower shall remain liable
under the Note for any deficiency.

	 	(c)	 	All other legal rights and remedies including, without
limitation, rights of recoupment and set-off, without notice.

All of the rights and remedies of Lender under the Loan Documents shall be
considered independent and Lender may exercise the same successively, cumulatively
or in any combination as it may determine in its sole discretion and without initial
resort to the Collateral.

In the event Lender initially resorts to the Collateral and the sums realized from
the sale of such Collateral are not sufficient to pay all such costs, expenses, and
any loan balances under the Note, together with accrued interest thereon, such
deficiency shall be immediately paid by Borrower.

13. Limitation on Interest.

Notwithstanding any provision to the contrary in this Agreement or in any of the
documents representing part or all of the Obligations or otherwise relating hereto,
the aggregate of all interest and any other charges constituting interest under
Applicable Law contracted for, chargeable or receivable under the Obligations or
otherwise in connection herewith, shall under no circumstances exceed the maximum
amount of interest permitted by law. If any excess of interest in such respect is
provided for in this Agreement or in any of the installments representing part or
all of the Obligations or otherwise relating hereto, then in such event (a) the
provisions of this Section shall govern and control, (b) neither Borrower nor any
other party liable for the payment of the Obligations shall be obligated to pay the
amount of such interest to the extent that it is in excess of the maximum permitted
by law, (c) any excess shall be deemed a mistake and cancelled automatically and if
theretofore paid, shall, at the option of the holder of the Obligations be refunded
to Borrower or credited on the principal amount of the Obligations, and (d) the rate
of interest shall be automatically subject to reduction to the maximum lawful
contract rate allowed under such laws as now or hereafter construed by courts of
appropriate jurisdiction.

	 	14.	 	Impairment of Rights.

None of the provisions of this Agreement shall affect or impair any of the rights of
Lender or obligations of the Borrower under the Note or Loan Documents executed and
given by or in behalf of Borrower to Lender as security for the Note either prior
to, at the time of, or during the term of this Agreement or any Obligations subject
hereto.

	 	15.	 	Miscellaneous.

	 	(a)	 	This Agreement and the related Loan Documents embody the full
understanding of the parties hereto and a complete and exclusive statement of
the terms and conditions of their agreement relating to the subject matter
hereof; and all prior agreements, negotiations, dealings and understandings,
whether oral or written, regarding the subject matter hereof are hereby
superseded and merged into this Agreement. No conditions, usage of trade,
course of dealing, or performance, understanding or agreement purporting to
amend, modify, vary, explain or supplement the terms and conditions of this
Agreement, or any promissory note or security document made in connection
herewith, shall be binding unless hereafter made in writing and signed by
Borrower and Lender. The terms of the Note and Loan Documents shall be
construed with and as an integral part of this Agreement to the same extent as
if the same had been set forth verbatim herein.

	 	(b)	 	Borrower will obtain the execution and delivery of such other
and further documents or such other and further acts as requested by Lender
consistent with the terms of this Agreement and all related Loan Documents
including, but not limited to, any corrective documents or action Lender may
deem appropriate.

	 	(c)	 	Whenever possible, each provision of this Agreement shall be
interpreted in such manner as to be effective and valid under Applicable Laws,
but if any provision of this Agreement shall be prohibited by or invalid under
Applicable Laws, such provision shall be ineffective only to the extent of such
prohibition or invalidity, without invalidating the remainder of any such
provision, or the remaining provisions of this Agreement.

	 	(d)	 	All of Borrower’s representations and warranties contained in
this Agreement, shall be true at the time of execution of this Agreement, and
shall survive the execution, delivery and acceptance thereof.

	 	(e)	 	Borrower covenants, warrants and represents that, upon each
advance of funds under the Note, all of the representations and warranties
contained in this Agreement shall be true at such time.

	 	(f)	 	Borrower shall pay upon demand Lender’s out-of-pocket costs and
expenses incurred in connection with the exercise of any of its rights or
remedies under this Agreement and any related Loan Document, including, but not
limited to, legal fees, consultants’ fees, inspection fees and any other
reasonable fees and costs for services that are not customarily performed by
Lender’s salaried employees. All such costs and expenses constitute
Obligations secured by the Collateral. The provisions of this Section will
survive the termination of this Agreement and the repayment of the Note.

	 	(g)	 	No termination or cancellation (regardless of cause or
procedure) of this Agreement shall in any way affect or impair the powers,
obligations, duties, rights and liabilities of the parties hereto in any way or
respect relating to (1) any transaction or event occurring prior to such
termination or cancellation, (2) the Collateral and/or (3) any of Borrower’s
agreements, covenants, warranties and representations contained in this
Agreement and all such agreements, covenants, warranties and representations
shall survive such termination or cancellation.

	 	(h)	 	The terms of this Agreement will bind and benefit the heirs,
legal representatives, successors, and assigns of the parties; provided,
however, that the Borrower may not assign this Agreement or any loan funds, or
assign or delegate any of its rights or obligations, without the prior written
consent of Lender. Lender shall not assign its rights under this Agreement
without remaining as lead lender and unless the Borrower otherwise consents in
writing, such consent of Borrower to not be unreasonably conditioned, delayed
or withheld. Notwithstanding the foregoing, Lender shall have the right to
sell participations in any loan or interest of Lender under the Loan to any
other persons or entities without the consent of, or notice to, the Borrower,
provided that no such action by such Lender shall relieve Lender of its
obligation to make disbursement of the Loan when required by this Agreement and
Lender is the lead lender in the participation and retains authority with
respect to enforcement and administration of the Loan. Lender may disclose to
any participants or prospective participants any information or other data or
material in such Lender’s possession relating to the Borrower, the Subsidiary,
the Loan, and matters considered pertinent to the Loan, without the consent of,
or notice to, the Borrower or Subsidiary.

	 	(i)	 	This Agreement and the rights and duties of the parties hereto,
shall be construed and determined in accordance with the internal laws of the
State of Nebraska (without giving effect to choice of law); provided, however,
that it is the intent of the parties that this Agreement be enforced as written
and that, in the event that any provision should not be enforceable under the
laws of the State of Nebraska, the parties elect the internal law of such state
having contacts with the transaction as will render such provision enforceable.

	 	(j)	 	Except as otherwise provided herein, any notice required
hereunder shall be in writing and shall be deemed to have been validly served,
given or delivered three (3) days following deposit in the United States mail
with proper postage prepaid and addressed to the party notified as follows (or
to such other address as each party may designate for itself by like notice):

If to Lender:

America First Apartment Investors, Inc.

101 East 52nd Street, 25th Floor

New York, New York 10022

Attn: John H. Cassidy

And a copy to:

America First

1004 Farnam St, Suite 100

Omaha, Nebraska 68102

Attn: Paul Beldin

If to Borrower:

America First Communities Offutt Developer, LLC

1004 Farnam Street, Suite 400

Omaha, NE 68102

Attn: John N. McLean, Jr.

	 	(k)	 	This Agreement may be executed in counterpart and by different
parties in separate counterpart, all of which shall constitute one and the same
agreement. Executed signature pages may be delivered by facsimile machine,
each to have the same effect as the original and deemed to be delivered for
purposes of reliance of the other parties. Any party so delivering a signature
page waives for all purposes, including subsequent legal proceedings, any
objection to the existence, possession and delivery of the original signature
page.

	 	16.	 	Notice.

A credit agreement must be in writing to be enforceable under Nebraska law. To
protect you as Borrower and Lender from any misunderstandings or disappointments,
any contract promise, undertaking, or offer to forebear repayment of money or to
make any other financial accommodation in connection with this loan of money or
grant or extension of credit, or any amendment of, cancellation of, waiver of, or
substitution for any or all of the terms or provisions of any instrument or document
executed in connection with this loan of money or grant or extension of credit, must
be in writing to be effective.

(Signature page follows)

1

SIGNATURE PAGE TO

LOAN AGREEMENT

BY AND BETWEEN

AMERICA FIRST COMMUNITIES DEVELOPER, LLC

AND

AMERICA FIRST APARTMENT INVESTORS, INC.

IN WITNESS WHEREOF, the parties hereto have set their hand effective the day and year set
forth above.

BORROWER:

AMERICA FIRST COMMUNITIES OFFUTT DEVELOPER, LLC, a
Nebraska limited liability company

By: /s/ Michael J. Draper

Name: _Michael J. Draper
     

Title:  Vice- President
      _

LENDER:

AMERICA FIRST APARTMENT INVESTORS, INC., a Maryland

corporation

By: /s/ John H. Cassidy

Name: _John H. Cassidy
     

Title: President and Chief Executive Officer
     

2

EXHIBIT “A”

FORM OF NOTE

PROMISSORY NOTE

$7,443,948.00 September 15, 2005

FOR VALUE RECEIVED, the undersigned, AMERICA FIRST COMMUNITIES OFFUT DEVELOPER, LLC, a
Nebraska limited liability company (the “Borrower”) promises to pay to the order of AMERICA FIRST
APARTMENT INVESTORS, INC., a Maryland corporation (“Lender” ) pursuant to the terms of the Loan and
Security Agreement of like date between the Borrower and Lender (the “Loan Agreement”), the
principal sum of Seven Million Four Hundred Forty Three Thousand Nine Hundred Forty Eight and
no/100 Dollars ($7,443,948.00), together with interest on the principal amount from time to time
outstanding hereunder, at the rates and in the manner and on the dates specified in the Loan
Agreement, unless otherwise accelerated or extended pursuant to the provisions hereof.

Lender shall record on its books or records the principal amount of this Note, all payments of
principal and interest and the principal balances from time to time outstanding. The record
thereof, as shown on such books or records (on such medium as Lender may determine), shall be
prima facie evidence as to all such amounts; provided, however, that the failure of
Lender to record any of the foregoing shall not limit or otherwise affect the obligation of the
Borrower to repay the Note, together with accrued interest thereon.

The principal amount of this Note shall be due and payable in accordance with the following payment
schedule:

	 	 	 	Payment Date Principal amount Due and Payable

(together with accrued interest to date of
payment)

	 	 	 
	December 1, 2005

March 1, 2006

June 1, 2006

September 1, 2006

December 1, 2006

March 1, 2007

June 1, 2007

September 1, 2007

December 1, 2007

March 1, 2008

June 1, 2008

September 1, 2008

December 1, 2008

March 1, 2009

June 1, 2009

September 1, 2009

	 	$350,000

$350,000

$350,000

$350,000

$350,000

$350,000

$350,000

$350,000

$750,000

$750,000

$750,000

$750,000

$400,000

$400,000

$400,000

All remaining principal balance.

This Note is referred to in and issued pursuant to the Loan Agreement and this Note and the holder
hereof are entitled to all of the security for repayment and other benefits as provided for thereby
or referred to therein, to which Loan Agreement reference is hereby made for a statement thereof.
All defined terms used in this Note, except terms otherwise defined herein, shall have the same
meaning as such terms have in said Loan Agreement.

Prepayments with penalties may be made on this Note subject to the terms described in the Loan
Agreement. The indebtedness evidenced hereby may be accelerated and declared due prior to the
expressed maturity hereof, all in the events, on the terms and in the manner as provided for in
said Loan Agreement.

The principal balance of the Note shall be reduced by the application of the proceeds of
Collateral (including any dividends, interest, distributions or other payments with respect
thereto) and interest shall be paid as otherwise provided in the Loan Agreement. The balance of
principal and accrued interest shall be due and payable on the Maturity Date in keeping with the
terms of the Loan Agreement, if not previously accelerated at the sole option of Lender pursuant to
the terms of the Loan Agreement. The failure of the holder to exercise the option to accelerate in
any event shall not be construed as a waiver of such option if said event or the related condition
shall be continuing in nature or upon any subsequent occasion. The option of the holder as
expressed in this paragraph shall continue until all such events or conditions have been cured or
waived in writing by Lender. No delay or omission on the part of the holder in exercising any
remedy, right or option hereunder shall operate as a waiver of such remedy, right or option. In
any event, such a waiver on any one occasion shall not be construed as a waiver on a subsequent
occasion. Time is of the essence in the performance hereof by Borrower.

Each obligated party under this Note, whether as maker, endorser, guarantor, surety, or
assignor, hereby waives presentment for payment, demand, protest, notice of protest, and notice of
dishonor and non-payment of this Note, and all defenses on the grounds of diligence in enforcement,
delay or any extension of time for the payment hereof which may be hereafter given by the holder or
holders hereof to them or any of them or to anyone who has assumed the payment of this Note, and it
is specifically agreed that the obligations of each obligated party to this Note, whether maker,
endorser, guarantor, surety, or assignor shall not thereby be in any way affected or altered to the
prejudice of the holder or any other person, firm or corporation, and each obligated party agrees
to all of the terms hereof, and agrees that this is the joint and several obligation of the parties
hereto. In the event that any part of this Note is collected by or through an attorney-at-law, the
obligated parties agree to pay a reasonable attorney fee, together with all costs and expenses
incident thereto.

In consideration of the advances of credit by the Lender in reliance upon this Note, the
obligated parties under this Note hereby severally waive any and all defenses or right of offset
which they may have or claim to have, individually or collectively, against Lender, and its
successors or assigns, under this Note.

All payments hereunder shall be in such lawful money of the United States of America as shall
be legal tender for public and private debts at the time of payment.

	 	 	 	BORROWER:

	 	 	 	AMERICA FIRST COMMUNITIES OFFUT DEVELOPER, LLC, a Nebraska
limited liability company

By: /s/ Michael J. Draper

Name: _Michael J. Draper
     

	 	 	 	Title:  Vice- President

3

The following exhibits have been omitted:

	 	 	 
	Exhibit B:

Exhibit C:

	 	Critical Path

Form of Property Manager’s Irrevocable Direction of Payment

The Registrant shall furnish supplementally a copy of any omitted exhibit to the Commission upon
request.

4

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