Document:

EX-10.1

FIRST AMENDED AND RESTATED ADVISORY AGREEMENT

THIS FIRST AMENDED AND RESTATED ADVISORY AGREEMENT dated as of July 18, 2008 is between Grubb
& Ellis Apartment REIT, Inc., a Maryland corporation (the “Company”), and Grubb & Ellis Apartment
REIT Advisor, LLC, a Virginia limited liability company (the “Advisor”).

WITNESSETH:

WHEREAS, the Company qualifies as a real estate investment trust (a “REIT”) as defined in
Sections 856 through 860 of the Internal Revenue Code of 1986, as amended (the “Code”), and intends
to make investments of the type permitted to qualified REITs under the Code and not inconsistent
with the Charter of the Company (the “Charter”), and the Bylaws of the Company; and

WHEREAS, the Company desires to avail itself of the experience, sources of information, advice
and assistance of the Advisor and to have the Advisor undertake the duties and responsibilities
hereinafter set forth, on behalf of and subject to the supervision of the Board of Directors of the
Company (the “Board of Directors”), as provided herein; and

WHEREAS, the Advisor is willing to undertake to render such services, subject to the
supervision of the Board of Directors, on the terms and conditions herein set forth;

NOW, THEREFORE, in consideration of the mutual covenants herein set forth, the parties hereto
agree as follows:

	1.	 	DEFINITIONS.

As used herein, the following terms shall have the meanings set forth below:

(a) “Acquisition Expenses” shall mean any and all expenses related to the Company’s selection,
evaluation and acquisition of, and investment in properties, whether or not acquired or made,
including, but not limited to, legal fees and expenses, travel and communications expenses, cost of
appraisals and surveys, nonrefundable option payments on property not acquired, accounting fees and
expenses, computer use related expenses, architectural, engineering and other property reports,
environmental and asbestos audits, title insurance and escrow fees, loan fees or points or any fee
of a similar nature paid to a third party, however designated, transfer taxes, and personnel and
miscellaneous expenses related to the selection, evaluation and acquisition of properties.

(b) “Acquisition Fee” shall mean any and all fees and commissions, exclusive of Acquisition
Expenses, paid by any Person to any other Person (including any fees or commissions paid by or to
any Affiliate of the Company or the Advisor) in connection with purchase, development or
construction of any Property. Included in the computation of such fees or commissions shall be any
real estate commissions, acquisition fees, finder’s fees, selection fees, development fees,
construction fees, nonrecurring management fees, loan fees, points, or any other fees or
commissions of a similar nature. Excluded shall be development fees and construction fees paid to
Persons not Affiliated with the Advisor in connection with the actual development and construction
of a Property.

(c) “Advisor” shall mean Grubb & Ellis Apartment REIT Advisor, LLC, a Virginia limited
liability company, any successor advisor to the Company, the Partnership or any person or entity to
which Grubb & Ellis Apartment REIT Advisor, LLC or any successor advisor subcontracts substantially
all of its functions.

(d) “Affiliate” shall mean: (i) any Person directly or indirectly owning, controlling or
holding, with the power to vote 10% or more of the outstanding voting securities of such other
Person; (ii) any Person 10% or more of whose outstanding voting securities are directly or
indirectly owned, controlled or held, with the power to vote, by such other Person; (iii) any
Person directly or indirectly controlling, controlled by or under common control with such other
Person; (iv) any executive officer, director, trustee or general partner of such other Person; and
(v) any legal entity for which such Person acts as an executive officer, director, trustee or
general partner.

(e) “Asset Management Fee” shall mean an annual amount equal to the percentage of the
Company’s Average Invested Assets set forth in Section 9(b).

(f) “Average Invested Assets” shall mean, for any period, the average of the aggregate Book
Value of the assets of the Company invested, directly or indirectly, in real estate assets or
equity interests in and loans secured by real estate, before deducting depreciation, bad debts or
other similar non-cash reserves, computed by taking the average of such values at the end of each
month during such period.

(g) “Book Value” of an asset shall mean the value of such asset on the books of the Company,
before allowance for depreciation or amortization.

(h) “Common Stock” shall mean the common stock, par value $.01 per share, of the Company.

(i) “Company” shall have the meaning set forth in the preamble of this Agreement.

(j) “Competitive Real Estate Commission” shall mean the real estate or brokerage commission
paid for the purchase or sale of a property which is reasonable, customary and competitive in light
of the size, type and location of such property.

(k) “Contract Purchase Price” shall mean the amount actually paid or allocated to the purchase
or improvement of Real Estate Assets, exclusive of Acquisition Fees and Acquisition Expenses.

(l) “Contract Sales Price” shall mean the amount actually paid or allocated to the Sale of a
Property or Properties, exclusive of Disposition Fees.

(m) “Cumulative Return” shall mean a cumulative, non-compounded return equal to 8% per annum
on Invested Capital commencing upon acceptance by the Company of an investor’s subscription.

(n) “Director” shall mean a member of the Board of Directors of the Company.

(o) “Fiscal Year” shall mean any period for which any income tax return is submitted by the
Company to the Internal Revenue Service and which is treated by the Internal Revenue Service as a
reporting period.

(p) “GAAP” means accounting principles generally accepted in the United States of America.

(q) “Gross Offering Proceeds” shall mean the total proceeds from the sale of Shares before
deductions for Organizational and Offering Expenses. For purposes of calculating Gross Offering
Proceeds, the purchase price for all Shares issued in the Company’s initial public offering,
including those for which volume discounts apply, shall be deemed to be $10.00 per Share.

(r) “Gross Income From Properties” shall mean all cash receipts derived from the operation of
the Company’s Property, excluding (i) tenant security deposits unless and until such deposits are
forfeited upon a tenant default, and (ii) proceeds from insurance claims, condemnation proceedings,
sales or refinancings.

(s) “Incentive Distribution Upon Listing” shall mean an amount equal to 15.0% of the amount,
if any, by which (1) the market value of the outstanding Shares at Listing, measured by taking the
average closing price or the average of the bid and asked price, as the case may be, over a period
of 30 days during which the Shares are traded, with such period beginning 180 days after Listing
(the “Market Value”), plus the total distributions paid to Stockholders prior to Listing exceeds
(2) the sum of the Invested Capital plus the Cumulative Return.

(t) “Incentive Distribution Upon Sales” shall mean an amount equal to 15% of the net proceeds
from the sale of a Property after the Company has received and paid to Stockholders the sum of (i)
Invested Capital, and (ii) any remaining shortfall in the Cumulative Return as described in Section
9(e).

(u) “Independent Directors” shall mean a Director who is not, and within the last two (2)
years has not been, directly or indirectly associated with a Sponsor or the Advisor by virtue of
(i) ownership of an interest in a Sponsor, the Advisor or their Affiliates, (ii) employment by a
Sponsor, the Advisor or their Affiliates, (iii) service as an officer or director of a Sponsor, the
Advisor or their Affiliates, (iv) performance of services, other than as a Director, for the
Company, (v) service as a director or trustee of more than three (3) real estate investment trusts
organized by a Sponsor or advised by the Advisor, or (vi) maintenance of a material business or
professional relationship with a Sponsor, the Advisor or any of their Affiliates. An indirect
relationship shall include circumstances in which a Director’s spouse, parents, children, siblings,
mothers- or fathers-in-law, sons- or daughters-in-law or brothers- or sisters-in-law is or has been
associated with a Sponsor, the Advisor, any of their Affiliates or the Company. A business or
professional relationship is considered material if the gross revenue derived by the Director from
a Sponsor, the Advisor and Affiliates exceeds five percent (5%) of either the Director’s annual
gross revenue during either of the last two (2) years or the Director’s net worth on a fair market
value basis.

(v) “Invested Capital” shall mean the total proceeds from the sale of Shares. When a Property
is sold, Invested Capital shall be reduced by the lesser of (i) the net sale proceeds available for
distribution from such sale or (ii) the sum of (A) the portion of Invested Capital that initially
was allocated to that Property and (B) any remaining shortfall in the recovery of Invested Capital
with respect to prior sales of Properties.

(w) “Joint Venture” shall mean any partnership, limited liability company, business trust or
other unincorporated organization through or by means of which the Company acts jointly with any
Person or Affiliate to make an investment in Real Estate Assets.

(x) “Listing” shall mean the listing of the Shares on i) the New York Stock Exchange, the
American Stock Exchange, or the National Market System of the Nasdaq Stock Market (or any successor
to such entities), or ii) a national securities exchange (or tier or segment thereof) that has
listing standards that the U.S. Securities and Exchange Commission has determined by rule are
substantially similar to the listing standards applicable to securities described in Section
18(b)(1)(A) of the Securities Act of 1933, as amended. Upon such Listing, the Shares shall be
deemed Listed.

(y) “Net Income” shall mean, for any period, total revenues applicable to such period, less
the operating expenses applicable to such period other than additions to or allowances for reserves
for depreciation, amortization or bad debts or other similar noncash reserves; provided, however,
that Net Income shall not include any gain from the sale of the Company’s assets.

(z) “Organizational and Offering Expenses” shall mean those expenses incurred by and to be
paid from the assets of the Company in connection with and in preparing the Company for
registration and subsequently offering and distributing Shares to the public, including, but not
limited to, total underwriting and brokerage discounts and commissions (including fees of the
underwriters’ attorneys), expenses for printing, engraving and mailing, salaries of employees while
engaged in sales activities, charges of transfer agents, registrars, trustees, escrow holders,
depositaries and experts, expenses of qualification of the sale of the securities under federal and
state laws, including taxes and fees, and accountants’, consultants’ and attorneys’ fees and
expenses.

(aa) “Partnership” shall mean Grubb & Ellis Apartment REIT Holdings, L.P., a Virginia limited
partnership.

(bb) “Property” or “Properties” shall mean any, or all, respectively, of the real property and
improvements thereon owned or to be owned by the Company, directly or indirectly.

(cc) “Property Disposition Fee” shall mean a real estate disposition fee, payable (under
certain conditions) to the Advisor and its Affiliates upon the sale of the Company’s Property as
described in Section 9(e).

(dd) “Property Management Fee” shall mean any fee paid to an Affiliate or third party as
compensation for management of the Company’s Properties as described in Section 9(c).

(ee) “Property Manager” shall mean an entity that provides property rental, leasing, operation
and management services to the Properties owned by the Company, directly or indirectly. The
Property Manager may be the Advisor, an Affiliate or a third-party property management firm.

(ff) “Person” shall mean any natural person, partnership, corporation, association, trust,
limited liability company or other legal entity.

(gg) “Prospectus” shall mean the final prospectus of the Company in connection with the
initial registration of Shares filed with the Securities and Exchange Commission on Form S-11, as
supplemented and amended from time to time.

(hh) “Real Estate Assets” shall mean any and all investments in: (i) Property whether directly
or indirectly through owned or controlled subsidiaries and including amounts invested in Joint
Ventures; and (ii) loans, or other evidence of indebtedness secured, directly or indirectly, by
interests in Property.

(ii) “Sale” or “Sales” shall mean any transaction or series of transactions whereby: (A) the
Company or the Partnership directly or indirectly (except as described in other subsections of this
definition) sells, grants, transfers, conveys or relinquishes its ownership of any Property or
portion thereof, including the lease of any Property consisting of a building only, and including
any event with respect to any Property which results in the payment to the Company or the
Partnership, directly or indirectly, of a significant amount of insurance proceeds or condemnation
or similar award related to a Property; (B) the Company or the Partnership directly or indirectly
(except as described in other subsections of this definition) sells, grants, transfers, conveys or
relinquishes its ownership of all or substantially all of the interests of the Company or the
Partnership in any Joint Venture in which it is a co-venturer or partner; (C) any Joint Venture
directly or indirectly (except as described in other subsections of this definition) in which the
Company or the Partnership as a co-venturer or partner sells, grants, transfers, conveys or
relinquishes its ownership of any Property or portion thereof, including any event with respect to
any Property which results in the payment to the Joint Venture, directly or indirectly, of a
significant amount of insurance proceeds or condemnation or similar award related to a Property; or
(D) the Company or the Partnership directly or indirectly (except as described in other subsections
of this definition) sells, grants, conveys or relinquishes its interest in any loan or mortgage or
any portion thereof (including with respect to any mortgage or loan, all payments thereunder or in
satisfaction thereof other than regularly scheduled interest payments) of amounts owed pursuant to
such loan or mortgage and any event which gives rise to the payment of a significant amount of
insurance proceeds or condemnation or similar award; or (E) the Company or the Partnership directly
or indirectly (except as described in other subsections of this definition) sells, grants,
transfers, conveys or relinquishes its ownership of any other Real Estate Asset not previously
described in this definition or any portion thereof.

(jj) “Shares” shall mean the shares of Common Stock of the Company.

(kk) “Sponsor” shall mean any Person directly or indirectly instrumental in organizing, wholly
or in part, the Company or any Person who will control, manage or participate in the management of
the Company, and any Affiliate of such Person. Not included is any Person whose only relationship
with the Company is that of an independent property manager of Company assets, and whose only
compensation is as such. Sponsor does not include wholly independent third parties such as
attorneys, consultants, accountants and underwriters whose only compensation is for professional
services. A Person also may be deemed a Sponsor of the Company by:

(i) taking the initiative, directly or indirectly, in founding or organizing the
business or enterprise of the Company, either alone or in conjunction with one or more other
Persons;

(ii) receiving a material participation in the Company in connection with the founding
or organizing of the business of the Company, in consideration of services or property, or
both services and property;

(iii) having a substantial number of relationships and contacts with the Company;

(iv) possessing significant rights to control Company properties;

(v) receiving fees for providing services to the Company which are paid on a basis that
is not customary in the industry; or

(vi) providing goods or services to the Company on a basis which was not negotiated at
arms length with the Company.

(ll) “Stockholders” shall mean holders of the Shares.

(mm) “Total Development Cost” shall mean, with regard to any Property acquired by the Company
prior to or during the development or acquisition stages, all costs and expenses paid or incurred
by the Company that are in any way related to the development of such Property, including, but not
limited to, land and construction costs.

(nn) “Total Operating Expenses” shall mean the aggregate expenses of every character paid or
incurred by the Company as determined under generally accepted accounting principles, including
fees paid to the Advisor, but excluding:

(i) the expenses of raising capital such as Organizational and Offering Expenses,
legal, audit, accounting, underwriting, brokerage, listing, registration and other fees,
printing and other such expenses, and taxes incurred in connection with the issuance,
distribution, transfer, registration and Listing of the Shares;

(ii) interest payments;

(iii) taxes;

(iv) non-cash expenditures such as depreciation, amortization and bad debt reserves;

(v) the Incentive Distribution upon Sales and the Incentive Distribution upon Listing;
and

(vi) Acquisition Expenses, real estate commissions on resale of property and other
expenses connected with the acquisition, disposition (whether by sale, exchange or
condemnation) and ownership of real estate interests, mortgage loans or other property (such
as the costs of foreclosure, insurance premiums, legal services, maintenance, repair and
improvement of property).

	2.	 	DUTIES OF ADVISOR.

The Advisor shall consult with the Company and shall, at the request of the Board of Directors
or the officers of the Company, furnish advice and recommendations with respect to all aspects of
the business and affairs of the Company. In general, the Advisor shall inform the Board of
Directors of factors that come to its attention which could influence the policies of the Company.
Subject to the supervision of the Board of Directors and consistent with the provisions of the
Charter, the Advisor undertakes to use its reasonable efforts to:

(a) Present to the Company a continuing and suitable investment program and opportunities to
make investments consistent with the investment policies of the Company and the investment program
adopted by the Board of Directors and in effect at the time and furnish the Company with advice
with respect to the making, acquisition, holding and disposition of investments and commitments
therefor. The Advisor is also obligated to provide the Company with the first opportunity to
purchase any Class A income producing multi-family property which satisfies the Company’s
investment objectives placed under contract by the Advisor or its Affiliates. If the Board of
Directors of the Company does not vote to make such purchase within seven (7) days of being offered
such property, the Advisor is free to offer such opportunity to any other Affiliates or
non-Affiliates, as it so chooses. The Advisor shall use commercially reasonable efforts to identify
potential investment opportunities consistent with the Company’s investment objectives and policies
including but not limited to:

(i) locating, analyzing and selecting potential investments in Real Estate Assets;

(ii) structuring and negotiating the terms and conditions of acquisition and
disposition transactions;

(iii) arranging for financing and refinancing and making other changes in the asset or
capital structure of the Company and disposing of and reinvesting the proceeds from the sale
of, or otherwise deal with the investments in, Real Estate Assets; and

(iv) entering into leases and service contracts, on the Company’s behalf, for Real
Estate Assets and, to the extent necessary, performing all functions necessary to maintain
and administer the Company’s assets.

(b) Manage the Company’s day-to-day operations to effect the investment program adopted by the
Board of Directors and perform or supervise the performance of such other administrative functions
necessary in connection with the management of the Company as may be agreed upon by the Advisor and
the Company;

(c) Serve as the Company’s investment advisor in connection with policy decisions to be made
by the Board of Directors and, as requested, furnish reports to the Board of Directors and provide
research, economic and statistical data in connection with the Company’s investments and investment
policies;

(d) On behalf of the Company, investigate, select and conduct relations with lenders,
consultants, accountants, brokers, property managers, attorneys, underwriters, appraisers,
insurers, corporate fiduciaries, banks, builders and developers, sellers and buyers of investments
and persons acting in any other capacity specified by the Company from time to time, and enter into
contracts with, retain and supervise services performed by such parties in connection with
investments which have been or may be acquired or disposed of by the Company;

(e) Act as property manager or cooperate with a third party or affiliated Property Manager in
connection with property management services and other activities relating to the Company’s assets,
subject to the requirement that the Advisor, its Affiliate or the Property Manager, as the case may
be, qualifies as an “independent contractor” as the phrase is used in connection with applicable
laws, rules and regulations affecting REITs that own real property;

(f) Conduct periodic on-site property visits to some or all (as the Advisor deems reasonably
necessary) of the Properties to inspect the physical condition of the Properties and to evaluate
the performance of the Property Manager;

(g) Review, analyze and comment on the operating budgets, capital budgets and leasing plans
prepared and submitted by the Property Manager and aggregate these property budgets into the
Company’s overall budget;

(h) Review and analyze on-going financial information pertaining to each Property and the
overall portfolio of Properties;

(i) Upon request of the Company, act, or obtain the services of others to act, as
attorney-in-fact or agent of the Company in making, acquiring and disposing of investments,
disbursing and collecting the funds, paying the debts and fulfilling the obligations of the Company
and handling, prosecuting and settling any claims of the Company, including foreclosing and
otherwise enforcing mortgage and other liens and security interests securing investments;

(j) Assist in negotiations on behalf of the Company with investment banking firms and other
institutions or investors for public or private sales of securities of the Company or for other
financing on behalf of the Company, but in no event in such a way that the Advisor shall be acting
as a broker, dealer or underwriter of securities of the Company;

(k) On behalf of the Company, maintain, with respect to any Real Estate Assets and to the
extent available, title insurance or other assurance of title and customary fire, casualty and
public liability insurance;

(l) At the direction of the Board of Directors, invest and reinvest any money of the Company;

(m) Provide the Company with all necessary cash management services;

(n) Supervise the preparation and filing and distribution of returns and reports to
governmental agencies and to investors and act on behalf of the Company in connection with investor
relations;

(o) Provide office space, equipment and personnel as required for the performance of the
foregoing services as advisor;

(p) Advise the Company of the operating results of the Company’s properties, prepare on a
timely basis, and review, for such properties, operating budgets, maintenance and improvement
schedules, projections of operating results and such other reports as may be requested by the Board
of Directors;

(q) As requested by the Company, make reports to the Company of its performance of the
foregoing services and furnish advice and recommendations with respect to other aspects of the
business of the Company;

(r) Prepare on behalf of the Company, or engage independent professionals to prepare, all
reports and returns required by the Securities and Exchange Commission, Internal Revenue Service
and other state or federal governmental agencies, provided that the Company shall be responsible
for the fees of such independent professionals;

(s) Undertake and perform all services or other activities necessary and proper to carry out
the investment objectives of the Company;

(t) Undertake communications with Stockholders in accordance with applicable law and the
Charter; and

(u) Enter into ancillary agreements with the Sponsor and its Affiliates to arrange for the
services to be provided by the Advisor hereunder in accordance with this Agreement;

provided, however, that Affiliates of the Advisor have no obligations to the Company other than as
expressly stated herein, and the Advisor and its Affiliates have no obligations to present to the
Company any specific investment opportunity except as described herein and in the Prospectus.
Notwithstanding the foregoing, the Advisor hereby represents and acknowledges that it will have
fiduciary duties to the Stockholders and that the Company is making a statement to that effect in
its registration statement filed with the Securities and Exchange Commission.

3. NO PARTNERSHIP OR JOINT VENTURE.

The Company and the Advisor are not, and shall not be deemed to be, partners or joint
venturers with each other.

4. RECORDS.

The Advisor shall maintain appropriate books of account and records relating to services
performed hereunder, which shall be accessible for inspection by the Company at any time during
ordinary business hours.

5. ACTIONS RELATING TO REIT QUALIFICATION.

Notwithstanding any other provision of this Agreement to the contrary, the Advisor shall
refrain from any action which, in its reasonable judgment or in any judgment of the Board of
Directors of which the Advisor has written notice, would adversely affect the qualification of the
Company as a REIT under the Code or which would violate any law, rule or regulation of any
governmental body or agency having jurisdiction over the Company or its securities, or which would
otherwise not be permitted by the Charter. If any such action is ordered by the Board of Directors,
the Advisor shall promptly notify the Board of Directors of the Advisor’s judgment that such action
would adversely affect such status or violate any such law, rule or regulation or the Charter, and
shall thereafter refrain from taking such action pending further clarification or instruction from
the Board of Directors.

6. BANK ACCOUNTS.

At the direction of the Board of Directors, the Advisor may establish and maintain bank
accounts in the name of the Company, and may collect and deposit into and disburse from such
accounts any money on behalf of the Company, under such terms and conditions as the Board of
Directors may approve, provided that no funds in any such account shall be commingled with funds of
the Advisor. The Advisor shall from time to time, as the Company may require, render appropriate
accountings of such collections, deposits and disbursements to the Board of Directors and to the
auditors of the Company.

7. FIDELITY BOND.

The Advisor shall not be required to obtain or maintain a fidelity bond in connection with the
performance of its services hereunder.

8. INFORMATION FURNISHED TO THE ADVISOR.

The Board of Directors will keep the Advisor informed in writing concerning the investment and
financing policies of the Company. The Board of Directors shall notify the Advisor promptly in
writing of its intention to make any investments or to sell or dispose of any existing investments.
The Company shall furnish the Advisor with a certified copy of all financial statements, a signed
copy of each report prepared by independent certified public accountants, and such other
information with regard to its affairs as the Advisor may reasonably request.

9. COMPENSATION.

The Advisor and its Affiliates shall be paid for services rendered by the Advisor under this
Agreement as follows:

(a) The Advisor or its Affiliates shall receive as compensation for services rendered in
connection with the investigation, selection and acquisition of Real Estate Assets (by purchase,
investment or exchange) an Acquisition Fee payable by the Company. The total Acquisition Fees paid
to the Advisor or its Affiliates shall not exceed (i) 3.0% of the Contract Purchase Price of Real
Estate Assets acquired directly or indirectly by the Company, and (ii) 4.0% of the Total
Development Cost of Properties developed by or on behalf of the Company for services provided by
the Advisor, its Affiliates or sub-contractors thereof. At the Advisor’s discretion, a portion of
the Acquisition Fee may be paid to third-party developers for services rendered. Acquisition Fees
shall be payable on the acquisition of a specific Property, on the acquisition of a portfolio of
Properties through a purchase of assets, controlling securities or by Joint Venture, by a merger or
similar business combination or other comparable transaction, or on the completion of development
of a Property or Properties for the Company. However, the total of all Acquisition Fees and
Acquisition Expenses payable with respect to any Real Estate Assets shall not exceed 6.0% of the
Contract Purchase Price or the Total Development Cost (as applicable) of such Real Estate Assets
unless fees in excess of such amount are approved by a majority of the Directors not interested in
such transaction and by a majority of the Independent Directors not interested in such transaction
and which transaction is determined to be commercially competitive, fair and reasonable to the
Company.

(b) The Advisor shall receive as compensation for services rendered in connection with the
management of the Company’s assets the Asset Management Fee. The Asset Management Fee shall be
payable monthly in arrears by the Company in cash or in shares at the option of the Advisor, and
may be deferred, in whole or in part, from time to time, by the Advisor (without interest). The
Asset Management Fee shall be equal to 1.0% of Average Invested Assets; provided, however, that the
Company’s obligation to pay the Asset Management Fee shall be subject to the stockholders receiving
annualized distributions in an amount equal to 5.0% per annum of Invested Capital. The Asset
Management Fee shall be calculated monthly not to exceed one-twelfth of 1.0% of the Average
Invested Assets of the Company as of the last day of the immediately preceding quarter.

(c) The Advisor, an Affiliate or an unaffiliated third party shall receive a monthly Property
Management Fee of up to 4.0% of the monthly Gross Income from Properties.

(d) If the Advisor or an Affiliate provides a substantial amount of the services in connection
with the Sale of one or more Properties the Advisor or an Affiliate shall receive a Disposition Fee
equal to the lesser of (i) one-half of a Competitive Real Estate Commission or (ii) 1.75% of the
Contract Sales Price of such Property or Properties. The Disposition Fee may be paid in addition to
real estate commissions paid to non-Affiliates; provided, however, that the total real estate
commissions paid to all Persons by the Company with respect to the Sale of such Property or
Properties shall not exceed an amount equal to the lesser of (i) 6.0% of the Contract Sales Price
of the Property or Properties or (ii) the Competitive Real Estate Commission.

(e) Upon the Sale of a Property by the Company, the Partnership will pay the Advisor an
Incentive Distribution upon Sale equal to 15% of the net proceeds from the Sale after the Company
has received and paid to the Stockholders the sum of (i) the Invested Capital, and (ii) any
remaining shortfall in the Cumulative Return. If the Company, and in turn the Stockholders, have
not received a return of Invested Capital or if there is a shortfall in the Cumulative Return after
the Sale of the last Property and the Advisor previously has received Incentive Distributions,
other than Incentive Distributions that have been repaid previously, the Advisor will repay to the
Partnership a portion of those distributions sufficient to cause the Company, and in turn the
Stockholders, to receive a full return of Invested Capital and the full Cumulative Return. In no
event will the aggregate amount repaid by the Advisor to the Partnership exceed the aggregate
amount of Incentive Distributions upon Sales that the Advisor previously received.

10. EXPENSES.

(a) In addition to the compensation paid to the Advisor or an affiliate pursuant to Section 9
hereof, the Company or the Partnership shall pay directly or reimburse the Advisor for all of the
expenses paid or incurred by the Advisor or an affiliate in connection with the services it
provides to the Company and the Partnership pursuant to this Agreement, including, but not limited
to:

(i) the Company’s Organizational and Offering Expenses; provided, however, that within
60 days after the end of the month in which the Offering terminates, the Advisor shall
reimburse the Company for any Organizational and Offering Expenses reimbursement received by
the Advisor pursuant to this Section 10, to the extent that such reimbursement exceeds the
maximum amount permitted or, at the option of the Company, such excess shall be subtracted
from the next reimbursement of expenses to be made by the Company pursuant to this Section
10. The Advisor shall be responsible for the payment of all the Company’s Organizational and
Offering Expenses in excess of the maximum amount permitted;

(ii) Acquisition Expenses incurred in connection with the selection, evaluation and
acquisition of Properties;

(iii) the actual cost of goods and services used by the Company and obtained from
entities not affiliated with the Advisor, other than Acquisition Expenses;

(iv) interest and other costs for borrowed money, including discounts, points and other
similar fees;

(v) taxes and assessments on income of the Company or its Real Estate Assets;

(vi) costs associated with insurance required in connection with the business of the
Company or by the Directors;

(vii) expenses of managing and operating Properties owned by the Company, payable to
the Property Manager, whether the Property Manager is an Affiliate of the Company or a
non-affiliated Person.

(viii) all compensation and expenses payable to the Independent Directors and all
expenses payable to the non-Independent Directors in connection with their services to the
Company and the Stockholders and their attendance at meetings of the Directors and
Stockholders;

(ix) expenses associated with a Listing, if applicable, or with the issuance and
distribution of Shares, such as selling commissions and fees, marketing and advertising
expenses, taxes, legal and accounting fees, Listing and registration fees, and other
Organizational and Offering Expenses;

(x) expenses connected with payments of distributions in cash or otherwise made or
caused to be made by the Company to the Stockholders;

(xi) expenses of amending, converting, liquidating or terminating the Company or the
Charter;

(xii) expenses of maintaining communications with Stockholders, including the cost of
preparation, printing and mailing annual and other Stockholder reports, proxy statements and
other reports required by governmental entities;

(xiii) administrative services expenses (including personnel costs; provided, however,
that no reimbursement shall be made for costs of personnel to the extent that such personnel
perform services for which the Advisor receives a separate fee);

(xiv) transfer agent and registrar’s fees and charges paid to third parties; and

(xv) audit, accounting, legal and other professional fees.

(b) Expenses incurred by the Advisor on behalf of the Company and the Partnership and payable
pursuant to this Section 10 shall be reimbursed no less than monthly to the Advisor. The Advisor
shall prepare a statement documenting the expenses of the Company and the Partnership and the
calculation of the Asset Management Fee during each quarter, and shall deliver such statement to
the Company and the Partnership within 45 days after the end of each quarter.

11. COMPENSATION FOR ADDITIONAL SERVICES, CERTAIN LIMITATIONS.

(a) If the Company shall request the Advisor or its Affiliates to render services for the
Company other than those required to be rendered by the Advisor hereunder, such additional
services, if the Advisor elects to perform them, will be compensated separately on terms to be
agreed upon between such party and the Company from time to time in accordance with this Section.
The rate of compensation for such services shall be approved by a majority of the Board of
Directors, including a majority of the Independent Directors, and shall not exceed an amount that
would be paid to nonaffiliated third parties for similar services.

(b) In extraordinary circumstances, the Advisor and its Affiliates may provide other goods and
services to the Company if all of the following criteria are met: (i) the goods or services must be
necessary to the prudent operation of the Company; or (ii) the compensation, price or fee must be
equal to the lesser of 90% of the compensation, price or fee the Company would be required to pay
to independent parties who are rendering comparable services or selling or leasing comparable goods
on competitive terms in the same geographic location, or 90% of the compensation, price or fee
charged by the Advisor or its Affiliates for rendering comparable services or selling or leasing
comparable goods on competitive terms. In addition, any such payment will be subject to the further
limitation described in paragraph (c) below. Extraordinary circumstances shall be presumed only
when there is an emergency situation requiring immediate action by the Advisor or its Affiliates
and the goods or services are not immediately available from unaffiliated parties. Services which
may be performed in such extraordinary circumstances include emergency maintenance of Company
Properties, janitorial and other related services due to strikes or lock-outs, emergency tenant
evictions and repair services which require immediate action, as well as operating and re-leasing
properties with respect to which the leases are in default or have been terminated.

(c) No reimbursement will be permitted to the Advisor or its Affiliates under Section 10(a)
above for the salaries, fringe benefits, travel expenses and other administrative items of any
controlling persons of the Advisor, its Affiliates or any other supervisory personnel except in
those instances in which the Company believes it to be in the best interest of the Company that the
Advisor or its Affiliates operate or otherwise deal with, for an interim period, a property with
respect to which the lease is in default or terminated. Permitted reimbursements, except as set
forth above, include salaries and related salary expenses for non-supervisory services which could
be performed directly for the Company by independent parties such as legal, accounting, transfer
agent, data processing and duplication. Controlling persons, for purposes of this Section, include,
but are not limited to, those entities or individuals holding 5% or more of the ownership interests
of the Advisor or a person having the power to direct or cause the direction of the Advisor,
whether through ownership of voting securities, by contract or otherwise, and any person,
irrespective of his or her title, who performs functions for the Advisor similar to those of: (a)
chairman or member of the board of directors; or (b) president or executive vice president.

Notwithstanding the foregoing, and subject to the approval of the Board of Directors, the
Company may reimburse the Advisor for expenses related to the activities of controlling persons
undertaken in capacities other than those which cause them to be controlling persons. The Advisor
believes that the employees of the Advisor, its Affiliates and controlling persons who perform
services for the Company for which reimbursement is allowed pursuant to Section 11(b) have the
experience and educational background, in their respective fields of expertise, appropriate for the
performance of such services.

The Advisor and its Affiliates may not be reimbursed by the Company for their overhead, nor
can overhead costs or expenses of the Advisor or its Affiliates be allocated to or paid by the
Company. The foregoing reimbursements of expenses, as limited by this Agreement, will be made
regardless of whether any cash distributions are made to the Stockholders.

12. STATEMENTS.

The Advisor shall furnish to the Company not later than the 30th day following the end of each
Fiscal Year, a statement showing a computation of the fees or other compensation payable to the
Advisor or an Affiliate of the Advisor with respect to such Fiscal Year under Sections 9 and 11
hereof. The final settlement of compensation payable under Sections 9 and 11 hereof for each Fiscal
Year shall be subject to adjustments in accordance with, and upon completion of, the annual audit
of the Company’s financial statements.

13. INTERNALIZATION OF THE ADVISOR.

The Company shall consider becoming a self-administered REIT once the Company’s assets and
income are, in the view of the Board of Directors, including a majority of the Independent
Directors, of sufficient size such that internalizing the management functions by the Advisor and
the Property Manager is in the best interests of the Stockholders. The compensation payable to the
Advisor upon such internalization shall be agreed upon by a special committee comprised of all of
the Independent Directors (the “Special Committee”) and the Advisor. In determining such
compensation, the Special Committee will be authorized to engage its own independent financial
advisor and legal counsel and will consider factors including, but not limited to, the Advisor’s
performance compared to the performance of other advisors for similar entities that the special
committee believes are relevant in making the determination, any available valuations for such
advisors and independent legal and financial advice.

14. LISTING OF THE SHARES.

If this Agreement is terminated in connection with a Listing, the Advisor will receive, in
exchange for terminating this Agreement and the giving up or waiving of its fees then earned but
not paid and all future fees, the Incentive Distribution Upon Listing equal to 15.0% of the amount,
if any, by which (1) the market value of the outstanding Shares at Listing measured by taking the
average closing price or the average of the bid and asked price, as the case may be, over a period
of 30 days during which the Shares are traded, with such period beginning 180 days after Listing
(the “Market Value”), plus the total distributions paid to Stockholders prior to Listing exceeds
(2) the sum of the Invested Capital plus the Cumulative Return. Upon payment of the Incentive
Distribution upon Listing the Advisor’s “Incentive Limited Partnership Interests” (as defined in
the Partnership’s Agreement of Limited Partnership) will be redeemed and the Advisor will not be
entitled to any further Incentive Distributions upon Sales. In the event of such a termination of
this Agreement, the Company shall thereafter be relieved of its obligation to pay the fees
contemplated by this Agreement.

15. REIMBURSEMENT BY ADVISOR.

The parties acknowledge that pursuant to the “Statement of Policy Regarding Real Estate
Investment Trusts,” as revised and adopted by the North American Securities Administrators
Association on May 7, 2007, Total Operating Expenses of the Company shall be deemed to be excessive
if in any Fiscal Year they exceed the greater of (a) 2% of the Company’s Average Invested Assets
for such Fiscal Year; or (b) 25% of the Net Income for such Fiscal Year. The Independent Directors
shall have the fiduciary responsibility of limiting such expenses to amounts that do not exceed
such limitations. Within 60 days after the end of any fiscal quarter of the Company for which Total
Operating Expenses (for the 12 months then ended) exceed 2% of Average Invested Assets or 25% of
Net Income, whichever is greater, the Company shall send to the Stockholders written notice of such
fact together with the determination of the Independent Directors as to whether such higher
operating expenses were justified and if so justified, an explanation of the facts the Independent
Director considered in arriving at that conclusion also shall be included. If the Independent
Directors determine that such excess expenses are not justified, then the Advisor shall reimburse
the Company the amount by which the aggregate expenses incurred by the Company exceed the
limitations described above at the end of the Fiscal Year; provided, however, that the Company may
instead permit such reimbursements to be effected by a reduction in the amount of the next payments
of compensation under Section 9.

16. NAME.

Grubb & Ellis Company has a proprietary interest in the name “Grubb & Ellis.” Accordingly, and
in recognition of this right, if, at any time the Company or the Partnership ceases to retain Grubb
& Ellis Company or an Affiliate thereof to perform the services of Advisor, the Company or the
Partnership, as the case may be, will, promptly after receipt of written request from Grubb & Ellis
Company, cease to conduct business under or use the name “Grubb & Ellis” or any derivative thereof
and the Company or the Partnership shall use its best efforts to change the name of the Company to
a name that does not contain the name “Grubb & Ellis” or any other word or words that might, in the
sole discretion of the Advisor, be susceptible of indication of some form of relationship between
the Company and the Advisor or any Affiliate thereof. Consistent with the foregoing, it is
specifically recognized that the Advisor or one or more of its Affiliates has in the past and may
in the future organize, sponsor or otherwise permit to exist other investment entities (including
entities for investment in real estate) and financial and service organizations having “Grubb &
Ellis” as a part of their name, all without the need for any consent (and without the right to
object thereto) by the Company or its Board of Directors.

17. OTHER ACTIVITIES OF THE ADVISOR.

Subject to the provisions specifically set forth herein, the Advisor and its Affiliates
currently engage, and may engage in the future, in other businesses or activities including the
rendering of services and investment advice with respect to real estate investment opportunities to
other persons or entities and may manage other investments (including the investments of the
Advisor and its Affiliates), including those in competition with the Company. The Advisor or its
Affiliates may, with respect to any investment in which the Company is a participant, also render
advice and service to each and every other participant therein. The Advisor shall report to the
Board of Directors the existence of any condition or circumstance, existing or anticipated, of
which it has knowledge, which creates or could create a conflict of interest between the Advisor’s
obligations to the Company and its obligations to or its interest in any other Person. The Advisor
or its Affiliates shall promptly disclose to the Board of Directors knowledge of such condition or
circumstance.

Directors, officers, employees and agents of the Advisor or of Affiliates of the Advisor may
serve as directors, officers, employees or agents of the Company.

18. TERM; TERMINATION OF AGREEMENT.

This Agreement will have an initial term of one year from its date, subject to successive one
year renewals with the written mutual consent of the parties including approval of a majority of
the Independent Directors.

Notwithstanding any other provision of this Agreement to the contrary, either the Company or
the Advisor may terminate this Agreement, or any extension hereof, or the parties by mutual consent
or a majority of the Independent Directors may do so, in each case upon 60 days written notice
without cause or penalty. In the event of the termination of this Agreement, the Advisor will
cooperate with the Company and take all reasonable steps requested to assist the Board of Directors
in making an orderly transition of the advisory function.

If this Agreement is terminated pursuant to this Section, such termination shall be without
any further liability or obligation of either parry to the other, except as provided in Section 21.

If this Agreement is terminated for any reason other than the Listing of the Shares as
contemplated in Section 14, all obligations of the Advisor and its Affiliates to offer property to
the Company for purchase, as described in Section 2(a), also shall terminate.

19. ASSIGNMENTS.

The Company may terminate this Agreement immediately in the event of its assignment by the
Advisor except an assignment to a successor organization which acquires substantially all of the
property and carries on the affairs of the Advisor, provided that following such assignment the
persons who controlled the operations of the Advisor immediately prior thereto shall control the
operations of the successor organization, including the performance of its duties under this
Agreement; however, if at any time subsequent to such assignment such persons shall cease to
control the operations of the successor organization, the Company may thereupon immediately
terminate this Agreement. This Agreement shall not be assignable by the Company without the consent
of the Advisor, except in the case of assignment by the Company to a corporation, trust or other
organization which is a successor to the Company. Any assignment of this Agreement shall bind the
assignee hereunder in the same manner as the assignor is bound hereunder.

20. DEFAULT, BANKRUPTCY, ETC.

At the sole option of the Company, this Agreement shall be terminated immediately upon written
notice of termination from the Board of Directors to the Advisor if any of the following events
occur:

(a) The Advisor violates any material provisions of this Agreement and, after receipt of
written notice of violation, such violation is not cured within 30 days; or

(b) A court of competent jurisdiction enters a decree or order for relief in respect of the
Advisor in any involuntary case under the applicable bankruptcy, insolvency or other similar law
now or hereafter in effect, or appoints a receiver, liquidator, assignee, custodian, trustee,
sequestrator (or similar official) of the Advisor or for any substantial part of its property or
orders the winding up or liquidation of the Advisor’s affairs; or

(c) The Advisor commences a voluntary case under any applicable bankruptcy, insolvency or
other similar law now or hereafter in effect, or consents to the entry of an order for relief in an
involuntary case under any such law, or consents to the appointment of or taking possession by a
receiver, liquidator, assignee, custodian, trustee, sequestrator (or similar official) of the
Advisor or for any substantial part of its property, or makes any general assignment for the
benefit of creditors, or fails generally to pay its debts as they become due.

The Advisor agrees that if any of the events specified in subsections (b) and (c) of this
Section 20 occur, it will give written notice thereof to the Company within 7 days after the
occurrence of such event.

21. ACTION UPON TERMINATION.

The Advisor shall not be entitled to compensation after the date of termination of this
Agreement for further services hereunder, but shall be paid all compensation accruing to the date
of termination. Subject to the provisions of Sections 13 and 14, the Advisor shall forthwith upon a
termination:

(a) Pay over to the Company all monies collected and held for the account of the Company
pursuant to this Agreement, after deducting any accrued compensation and reimbursement for its
expenses to which it is then entitled;

(b) Deliver to the Board of Directors a full accounting, including a statement showing all
payments collected by it and a statement of all monies held by it, covering the period following
the date of the last accounting furnished to the Board of Directors;

(c) Deliver to the Board of Directors all property and documents of the Company then in the
custody of the Advisor; and

(d) Cooperate with the Company and take all reasonable steps requested by the Company to
assist the Board of Directors in making an orderly transition of the advisory function.

22. AMENDMENTS.

This Agreement shall not be amended, changed, modified, terminated or discharged in whole or
in part except by an instrument in writing signed by both parties hereto, or their respective
successors or assigns.

23. SUCCESSORS AND ASSIGNS.

This Agreement shall bind any successors or permitted assigns of the parties hereto as herein
provided.

24. GOVERNING LAW.

The provisions of this Agreement shall be governed, construed and interpreted in accordance
with the laws of the Commonwealth of Virginia, without regard to its conflict of laws provisions.

25. LIABILITY AND INDEMNIFICATION.

(a) The Company shall, subject to the limitations imposed by Virginia statutory or decisional
law, as amended or interpreted, indemnify and pay or reimburse reasonable expenses to the Advisor
and its Affiliates, provided, that: (i) the Advisor or other party seeking indemnification has
determined, in good faith, that the course of conduct which cased the loss or liability was in the
best interest of the Company; (ii) the Advisor or other person seeking indemnification was acting
on behalf of or performing services on the part of the Company; (iii) such liability or loss was
not the result of negligence, misconduct or a knowing violation of the criminal law or any federal
or state securities laws on the part of the indemnified party; and (iv) such indemnification or
agreement to be, held harmless is recoverable only out of the net assets of the Company and not
from the Stockholders.

(b) The Company shall not indemnify the Advisor or its Affiliates for losses, liabilities or
expenses arising from or out of an alleged violation of federal or state securities laws by such
party unless one or more of the following conditions are met: (i) there has been a successful
adjudication on the merits of each count involving alleged securities law violations as to the
particular indemnitee; (ii) such claims have been dismissed with prejudice on the merits by a court
of competent jurisdiction as to the particular indemnitee; or (iii) a court of competent
jurisdiction approves a settlement of the claims and finds that indemnification of the settlement
and related costs should be made and the court considering the request has been advised of the
position of the Securities and Exchange Commission and the published opinions of any state
securities regulatory authority in which securities of the Company were offered and sold as to
indemnification for securities law violations.

(c) The Company may advance amounts to persons entitled to indemnification hereunder for legal
and other expenses and costs incurred as a result of any legal action for which indemnification is
being sought only if all of the following conditions are satisfied: (i) the legal action relates to
acts or omissions with respect to the performance of duties or services by the indemnified party
for or on behalf of the Company; (ii) the legal action is initiated by a third party and a court of
competent jurisdiction specifically approves such advancement; and (iii) the indemnified party
receiving such advances undertakes to repay the advanced funds to the Company, together with the
applicable legal rate of interest thereon, in instances in which such party would not be entitled
to indemnification.

26. NOTICES.

Any notice, report or other communication required or permitted to be given hereunder shall be
in writing unless some other method of giving such notice, report or other communication is
accepted by the party to whom it is given and shall be given by being delivered at the following
addresses of the parties hereto:

The Company and/or the Board of Directors:

Grubb & Ellis Apartment REIT, Inc.

Suite 300

1551 N. Tustin Avenue

Santa Ana, CA 92705

The Advisor:

Grubb & Ellis Apartment REIT Advisor, LLC

Suite 300

1551 N. Tustin Avenue

Santa Ana, CA 92705

Either party may at any time give notice in writing to the other party of a change of its address
for the purpose of this Section 24.

27. HEADINGS.

The section headings hereof have been inserted for convenience of reference only and shall not
be construed to affect the meaning, construction or effect of this Agreement.

1

IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the date first above
written.

GRUBB & ELLIS APARTMENT REIT, INC.

By: /s/ Stanley J. Olander, Jr.

Name: Stanley J. Olander, Jr.

Title: Chief Executive Officer and President

GRUBB & ELLIS APARTMENT REIT, ADVISOR, LLC

By: /s/ Stanley J. Olander, Jr.

Name: Stanley J. Olander, Jr.

Title: Chief Executive Officer and President

2Exhibit 10

Exhibit 10.1

Form of Debenture

MEXORO MINERALS LTD.

(a corporation incorporated under the laws of the State of Colorado)

SECURED CONVERTIBLE DEBENTURE

Date of Issue:

______________

Interest Rate:

8.0% per annum

$_______________ (the “Principal Amount”)

Mexoro Minerals Ltd. (the “Corporation”) for value received hereby promises to Paramount Gold and Silver Corp. (the “Holder”) of 346 Waverley Street, Suite 110, Ottawa, Ontario K2P 0W5 the outstanding Principal Amount on the Maturity Date as hereinafter defined. The Holder is entitled, subject to such earlier conversion as may be required hereunder, to convert the Principal Amount into Conversion Units upon surrender of this Convertible Debenture at an office of the Corporation. The Corporation shall pay interest on the Principal Amount outstanding from time to time from the date of this Convertible Debenture or from the last interest payment date to which interest has been paid on the Convertible Debenture, whichever is later, at the rate of eight per cent (8%) per annum. Such interest shall be calculated and payable in accordance with Article 2 hereof and interest on overdue interest shall be calculated, and shall be due and payable, in lawful money of the United States of America, in the same manner and at the same time and place as aforesaid.

Payment and performance of the Principal Amount, together with interest thereon and any other indebtedness, liabilities, covenants and obligations of the Corporation to the Holder arising in respect of this Convertible Debenture and any other indebtedness, liabilities, covenants and obligations of the Corporation to the Holder shall constitute Obligations for the purpose of this Convertible Debenture and the Obligations are secured by the Mexoro Security Agreement and Sunburst Security Agreement (the “Security Agreements”) and the security interest granted by the Corporation and Sunburst to the Holder pursuant to the Security Agreements and all addendums or amendments thereto.

ARTICLE 1

INTERPRETATION

1.1

Definitions

In this Convertible Debenture, unless there is something in the subject matter or context inconsistent therewith:

 “business day” means a day which is not a Saturday, Sunday or civic or statutory holiday in Ottawa, Ontario;

“Capital Reorganization” has the meaning attributed thereto in Section 3.3;

“Common Shares” means shares of common stock in the capital of the Corporation as such shares exist at the close of business on the date of execution and delivery of this Convertible Debenture;

“Conversion Date” has the meaning attributed thereto in subsection 3.2(3);

- 2 -

“Conversion Price” means the price per Conversion Unit at which the Convertible Debenture is convertible, being $0.50 per Conversion Unit;

“Conversion Privilege” means the right to convert the Convertible Debenture into a Conversion Unit as provided in Article 3;

“Conversion Share” means Common Shares to be issued as part of the Conversion Units in connection with the conversion of all or part of the Convertible Debenture;

“Conversion Unit” means one Conversion Share and one half of a Conversion Warrant, to be issued at the Conversion Price in connection with the conversion of all or part of this Convertible Debenture;

“Conversion Warrant” means share purchase warrants of the Corporation to be issued as part of the Conversion Units in connection with the conversion of this Convertible Debenture, and exercisable to purchase a Warrant Share at $0.75 per Warrant Share expiring four years after the date this Convertible Debenture is converted into Conversion Units;

“Convertible Debenture” means this 8% secured convertible debenture of the Corporation and any debenture issued in replacement, substitution or exchange, in whole or in part, of this 8% secured convertible debenture;

“Dividend Paid in the Ordinary Course” means any dividend paid by the Corporation on the Common Shares (whether in cash, securities, property or other assets), provided that the directors of the Corporation do not by resolution determine that such dividend is extraordinary or otherwise out of the ordinary course having regard to the Corporation’s dividend policy at such time, the value of such dividend, the financial position of the Corporation, economic conditions, business practices and such other factors as the directors of the Corporation may in their discretion consider relevant;

“Event of Default” has the meaning attributed thereto in Section 5.3;

“Holder” means the original Holder or other permitted Holder of this Convertible Debenture;

“Interest Rate” means 8% per annum;

“Issue Date” means the date of issue of the Convertible Debenture;

 “Maturity Date” means one (1) year from the Issue Date or such earlier date on which the conversion of the Convertible Debenture shall become due and payable pursuant to the terms provided herein in accordance with the terms of this Convertible Debenture;

“Mexoro Security Agreement” means the security agreement dated May 9, 2008, as amended, of the Corporation granting the Holder a security interest in all the present and after acquired property of Mexoro;

- 3 -

“Obligations” means, without duplication, the aggregate of (i) the Principal Amount, (ii) all accrued and unpaid interest, fees, charges, indemnities and expenses in respect of this Convertible Debenture and the Security Agreements, and (iii) all other indebtedness, liabilities and obligations of Corporation and/or Sunburst to the Holder, direct or indirect, contingent or otherwise, and all accrued and unpaid interest, fees, charges, indemnities and expenses in respect thereof required to be paid by the Corporation and/or Sunburst to the Holder;

“Person” means any individual, corporation or company, partnership, joint venture, syndicate, sole proprietorship, trust, trustee, executor, administrator or other legal representative or an unincorporated organization, government or governmental authority or entity and pronouns have a similarly extended meaning;

“Sunburst” means Sunburst de Mexico S.A. de C.V., the wholly-owned subsidiary of the Corporation;

“Sunburst Security Agreement” means the security agreement dated June 18, 2008 of Sunburst granting the Holder a security interest in all the present and after acquired property of Sunburst;

“Warrant Certificate” means the form of certificate representing the Conversion Warrants in the form attached as Schedule B hereto; and

“Warrant Share” means a Common Share issued upon the exercise of a Conversion Warrant.

Words importing the singular number include the plural and vice versa and words importing gender include the neuter, feminine and masculine genders.

1.2

Headings

The division of this Convertible Debenture into Articles, Sections, subsections and clauses, and the insertion of headings are for convenience of reference only and shall not affect the construction or interpretation hereof.

1.3

Applicable Law

This Convertible Debenture shall be governed by and construed in accordance with the laws of the Province of Ontario and the laws of the Canada applicable therein. The parties hereto submit to the exclusive jurisdiction of the courts in the Province of Ontario. The parties agree that any litigation between the parties which arises pursuant to or in connection with this Convertible Debenture, or any of its provisions, shall be referred to the courts in the Province of Ontario and shall not be referred to the courts in any other jurisdiction.

1.4

Business Day

In the event that any day on or before which any action is required to be taken hereunder is not a business day, then such action shall be required to be taken on or before the requisite time on the next succeeding day that is a business day.

1.5

Monetary Reference

Any reference in this Convertible Debenture to “Dollars”, “dollars” or “$” shall be deemed to be a reference to lawful money of the United States of America.

- 4 -

1.6

Invalidity of Provisions

Each of the provisions contained in this Convertible Debenture is distinct and severable and a declaration of invalidity or unenforceability of any such provision by a court of competent jurisdiction shall not affect the validity or enforceability of any other provision hereof or thereof.

1.7

Schedules

The following schedules are attached to and form part of this Convertible Debenture:

Schedule

Schedule A

-

Notice of Election to Convert

Schedule B

-

Form of Conversion Warrant

ARTICLE 2

INTEREST

2.1

Interest

Interest shall accrue from the date hereof or from the last interest payment date to which interest on the Convertible Debenture shall have been paid, on the outstanding Principal Amount of this Convertible Debenture at the Interest Rate payable monthly in arrears on the tenth (10th) day of each month, both before and after demand, default, maturity and judgment and interest on overdue interest at the rate and in the manner aforesaid. Interest shall continue to accrue and become payable on the Principal Amount unless the Principal Amount is fully converted prior to the Maturity Date in accordance with Articles 3 or 4 herein.

Notwithstanding anything else contained herein to the contrary,  interest shall continue to accrue and the first payment of interest on the Principal Amount due under this Convertible Debenture shall be calculated as of August 31, 2008 and payable by September 10, 2008.

2.2

Payment of Interest

As interest becomes due on this Convertible Debenture, the Corporation shall pay in certified funds for such interest payable, less any applicable withholding tax, to the then registered Holder of this Convertible Debenture and addressed to such Holder at his last address appearing on the register. The forwarding of such payment shall satisfy and discharge the liability for interest on this Convertible Debenture to the extent of the sum represented thereby unless such cheque be not paid at par on presentation at any of the places of payment above mentioned.

2.3

Cancellation of Matured Convertible Debenture

Upon conversion of the outstanding Principal Amount of, and payment of any accrued but unpaid interest on the Convertible Debenture, this Convertible Debenture shall be cancelled and destroyed by the Corporation and no Convertible Debenture shall be issued in substitution therefor.

- 5 -

ARTICLE 3

CONVERSION

3.1

Conversion Privilege and Conversion Price

Subject to and upon compliance with the provisions of this Article 3, the Holder shall have the right, at such Holder’s option, at any time up to the Maturity Date or until anytime thereafter that the Principal Amount or a portion thereof remains outstanding, to the extent applicable, to convert the whole or from time to time part of the Principal Amount outstanding under this Convertible Debenture into Conversion Units at the Conversion Price. The number of Conversion Units shall be determined by dividing the Principal Amount of the Convertible Debenture by the Conversion Price.

3.2

Manner of Exercise of Right to Convert

(1)

In order to exercise the Conversion Privilege, the Holder shall at any anytime, surrender such Convertible Debenture to the Corporation at an office of the Corporation accompanied by a notice in the form substantially similar to the “Notice of Election to Convert” attached to this Convertible Debenture, duly signed by the Holder or the Holder’s executors, administrators or other legal representatives or the Holder’s attorney duly appointed by an instrument in writing in form and execution satisfactory to the Corporation stating:

(a)

that the Holder elects to convert the then outstanding Principal Amount under the Convertible Debenture or a specified portion thereof;

(b)

the names (with addresses) in which the Conversion Shares and Conversion Warrants issuable upon such conversion are to be registered; and

(c)

the address or addresses to which the certificates representing the Conversion Shares and Conversion Warrants issuable upon conversion and the cheque for any amount payable under Section 3.6 are to be delivered.

(2)

Upon surrender of the “Notice of Election to Convert” in accordance with Section 3.2(1) above, the Holder or his permitted nominee shall be entitled to be entered in the books of the Corporation as at the Conversion Date, as defined below (or such later date as is specified in subsection 3.2(3)) as the Holder of the number of Conversion Shares and Conversion Warrants into which this Convertible Debenture is convertible, in accordance with the provisions of this Article 3 upon receipt of such notice, the Corporation shall deliver to the Holder electing to convert or, subject as aforesaid, its nominee or assignee a certificate or certificates representing the number of Conversion Shares and Conversion Warrants into which all or any portion of the Principal Amount hereof has been converted and, if applicable, a cheque for any amount payable under Section 3.6 to the address indicated in the “Notice of Election to Convert”, and if applicable, a new Convertible Debenture representing such Principal Amount that has not been converted.

(3)

For the purposes of this Article 3, this Convertible Debenture shall be deemed to be surrendered for conversion on the date (the “Conversion Date”) on which it is so surrendered in accordance with the provisions of this Article 3 and, if surrendered by mail or other means of delivery, on the date on which it is received by the Corporation, provided that if this Convertible Debenture is surrendered for conversion on a day on which the register of Common Shares is closed, the Person entitled to receive Conversion Shares shall become the Holder of record of such Conversion Shares as at the date on which such register is next reopened 

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and provided that if a Convertible Debenture is surrendered for conversion on any interest payment date such Convertible Debenture shall be deemed to be surrendered for conversion on such interest payment date.

(4)

If this Convertible Debenture is surrendered for conversion in accordance with this Section 3.2, the Holder shall be entitled to receive accrued and unpaid interest in respect of the Principal Amount converted only for the period up to the Conversion Date, such interest to be paid at the time of delivery of the Conversion Shares and Conversion Warrants issuable upon such conversion in accordance with Section 2.2.

(5)

The Coversion Shares and Conversion Warrants shall be issued without any type of restrictive legend except as required by US securities laws.

3.3

Capital Reorganization

If and whenever at any time after the date hereof, and prior to the Conversion Date, there is a subdivision or consolidation of the Common Shares, or an issuance of Common Shares or securities convertible into Common Shares to all or substantially all of the holders of Common Shares by way of a stock dividend or other distribution (other than the issue of securities to the Holder or the issue of Common Shares or other securities to holders of Common Shares as a Dividend Paid in the Ordinary Course), or a reclassification of the Common Shares at any time outstanding or other change of the Common Shares into other shares or into other securities, whether of the Corporation or of another body corporate, or other capital reorganization, or a consolidation, amalgamation or merger of the Corporation with or into any other corporate or other entity (other than a consolidation, amalgamation or merger which does not result in any reclassification of the outstanding Common Shares or a change of the Common Shares into other shares), or a transfer of the undertaking or assets of the Corporation as an entirety or substantially as an entirety to another corporation or other entity in which the Holders of Common Shares are entitled to receive shares, other securities or other property (any of such events being called a “Capital Reorganization”), the Holder who exercises the right to convert this Convertible Debenture pursuant to this Convertible Debenture after the effective date of such Capital Reorganization will be entitled to receive, and will accept for the same aggregate consideration in lieu of the number of Conversion Shares and Conversion Warrants to which the Holder was previously entitled upon such conversion into a Conversion Unit, the aggregate number of Conversion Shares and Conversion Warrants, other securities or other property which the Holder would have been entitled to receive as a result of such Capital Reorganization if, on the effective date thereof, the Holder had been the Holder of the number of Conversion Shares and Conversion Warrants into which such a Conversion Unit were convertible immediately prior to such Capital Reorganization. The Corporation will take all steps necessary to ensure that, on a Capital Reorganization, the Holder will, if it exercises its conversion rights hereto, receive the aggregate number of shares, other securities or other property to which it is entitled as a result of the Capital Reorganization. Appropriate adjustments will be made as a result of any such Capital Reorganization in the application of the provisions set forth in this Article 3 with respect to the rights and interests thereafter of the Holder under this Convertible Debenture to the end that the provisions set forth in this Article 3 will thereafter correspondingly be made applicable as nearly as may reasonably be in relation to any shares, other securities or other property thereafter deliverable upon the conversion of this Convertible Debenture.

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3.4

Notice as to Adjustment

The Corporation shall from time to time, immediately after the occurrence of any event which requires an adjustment or readjustment as provided in Section 3.3, deliver a notice in writing (an “Adjustment Notice”) to the Holder specifying the nature of the event requiring the same and the amount of the adjustment or readjustment necessitated thereby and setting forth in reasonable detail the method of calculation and the facts upon which such calculation is based. Such notice and the amount of the adjustment specified therein shall, subject to the provisions of subsection 3.5, be conclusive and binding on all parties in interest.

3.5

Rules Regarding Calculation of Adjustment of Conversion Terms

If within five days of receipt of an Adjustment Notice a Holder notifies the Corporation in writing that it disputes the content of the Adjustment Notice, or if at any time a dispute is made by a shareholder or other creditor of the Corporation with respect to adjustments provided for in Section 3.3, such dispute will be determined by the accounting firm of HLB Cinnamon Jang Willoughby in Burnaby, BC or, if they are unable or unwilling to act, by such other firm of independent chartered accountants as may be selected by the directors of the Corporation, and any such determination will be binding upon the Corporation, the Holder and shareholders of the Corporation; such auditors or accountants will be given access to all necessary records of the Corporation. If any such determination is made, the Corporation will deliver a certificate of the Corporation to the Holder describing such determination.

3.6

No Requirement to Issue Fractional Conversion Units

The Corporation shall not be required to issue fractional Conversion Units upon the conversion of all or any part of this Convertible Debenture pursuant to this Article 3. The number of whole Conversion Units issuable upon conversion of this Convertible Debenture shall be computed on the basis of the aggregate Principal Amount of the Convertible Debenture so converted. If any fractional interest in a Conversion Unit would, except for the provisions of this Section, be deliverable upon the conversion of any Principal Amount of the Convertible Debenture, the Corporation may, at its sole option, in lieu of delivering any certificate representing such fractional interest, satisfy such fractional interest by paying to the Holder an amount in lawful money of the United States of America equal (to the nearest amount) to the corresponding fraction of the value of a Conversion Unit on the Conversion Date, determined by the directors of the Corporation acting in good faith which determination shall be conclusive, provided that the Corporation shall not be required to make any payment, calculated as aforesaid, that is less than $10.00.

3.7

Corporation to Reserve Shares

The Corporation shall at all times while any Principal Amount of the Convertible Debenture remains outstanding reserve and keep available out of its authorized but unissued Common Shares solely for the purpose of issue upon conversion of this Convertible Debenture, as provided in this Article 3, and issue upon exercise of the Conversion Warrants, and conditionally allot to the Holder who may exercise its conversion rights hereunder and its exercise rights in connection with the Conversion Warrants, such number of Conversion Shares as shall then be issuable upon the conversion of this Convertible Debenture and such number of Warrant Shares as shall be issuable upon exercise of the Conversion Warrants. All Conversion Shares which shall be so issuable shall be duly and validly issued as fully paid and non-assessable Common Shares. All Warrant Shares issued upon the exercise of the Conversion Warrants in accordance with the terms and conditions of the Warrant Certificate, including 

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payment of the exercise price thereof, shall be duly and validly issued as fully paid and non assessable Common Shares.

3.8

Hold Period Legends

The legend set forth below shall be included on (i) all certificates for Conversion Shares issued to U.S. Persons as such term is defined in Rule 902 of Regulation S (“U.S. Persons”) under the United States Securities Act of 1933, as amended, (ii) any Conversion Warrants issued upon conversion of this Convertible Debenture, and (iii) any securities issued upon exercise of Conversion Warrants if held by a U.S. Person at the time of exercise:

THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “U.S. SECURITIES ACT”). THE HOLDER HEREOF, BY PURCHASING THESE SECURITIES, AGREES FOR THE BENEFIT OF THE CORPORATION THAT THESE SECURITIES MAY BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY (A) TO THE CORPORATION, (B) OUTSIDE THE UNITED STATES IN ACCORDANCE WITH RULE 904 OF REGULATION S (“REGULATION S”) UNDER THE U.S. SECURITIES ACT, (C) WITHIN THE UNITED STATES IN ACCORDANCE WITH (1) RULE 144A UNDER THE U.S. SECURITIES ACT OR (2) RULE 144 UNDER THE U.S. SECURITIES ACT, (D) UNDER AN EFFECTIVE REGISTRATION STATEMENT, OR (E) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE U.S. SECURITIES ACT, PROVIDED THAT IN THE CASE OF TRANSFERS PURSUANT TO (C)(2), OR (E) ABOVE, A LEGAL OPINION ISSUED BY THE ATTORNEY FOR THE HOLDER BE PROVIDED TO THE CORPORATION.

ARTICLE 4

DEFAULT AND ENFORCEMENT

4.1

Covenants

Except as otherwise provided in this Convertible Debenture, the Corporation hereby covenants and agrees that so long as any amounts remain unpaid pursuant to this Convertible Debenture it will strictly observe and perform the following covenants:

(a)

The Corporation shall take all necessary action to adjust the Conversion Price as provided under Section 3.3 hereof, if applicable; and

(b)

The Corporation and Sunburst will not dispose of any assets out of the ordinary course of business without the prior written consent of the Holder, such consent not to be unreasonably withheld.

4.2

Acceleration on Event of Default

If an Event of Default shall occur and be continuing, the unpaid balance of the Principal Amount, and all accrued interest and all other amounts payable under, this Convertible Debenture may be declared by the Holder on written notice to the Corporation to be, and upon such notice shall become, immediately due and payable.  Upon the payment in full of the aforesaid amount the Holder shall promptly surrender the Convertible Debenture to or as directed by the Corporation.

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4.3

Events of Default

Any of the following conditions or events which shall occur shall constitute events of default (“Events of Default”) under this Convertible Debenture:

(a)

if the Corporation shall default in the payment of any of the Principal Amount at the Maturity Date;

(b)

if the Corporation shall default in the payment of any interest on this Convertible Debenture, or other amounts payable hereunder, when the same becomes due and payable, whether at the Maturity Date or otherwise and such default shall continue for a period of two (2) business days after a notice in writing of such default has been given by the Holder to the Corporation;

(c)

if the Corporation or Sunburst shall default in the performance of or compliance with any term or condition or covenant contained in this Convertible Debenture or the General Security Agreements, provided that such default is of a nature that may be cured, and such default shall not have been remedied within a period of ten (10) business days after default;

(d)

if the Corporation or Sunburst commits any of the events of default under their operating and/or senior debt credit facilities or arrangements with any other lender and such defaults shall not have been remedied within a period of ten business days after such default;

(e)

notwithstanding the $476,000 promissory note issued by the Corporation and  due on March 31, 2008 to which the Corporation is currently in default, if the Corporation or Sunburst shall (i) file, or consent by answer or otherwise to the filing against it of, a petition for relief or reorganization or arrangement or any other petition in bankruptcy, for liquidation or otherwise take advantage of any bankruptcy or insolvency law of any jurisdiction, (ii) make an assignment, an arrangement or a compromise for the benefit of its creditors, (iii) consent to the appointment of a custodian, receiver, trustee or other officer with similar powers of itself or of any substantial part of its property, (iv) cease to carry on business, or (v) take corporate action for the purpose of any of the foregoing;

(f)

if any representation, warranty or certification made in connection with the execution and delivery of the Convertible Debenture or the General Security Agreements shall prove to be at any time materially incorrect at the time it was made and such default has not been remedied within a period of 10 business days after Holder has noticed the Corporation of such default; 

(g)

if a court or governmental authority of competent jurisdiction shall enter a final order appointing, with or without the consent of the Corporation or Sunburst, as the case may be, a custodian, receiver, trustee or other officer with similar powers with respect to it or with respect to any substantial part of either of their property, or if a final order for relief shall be entered in any case or proceeding for liquidation or reorganization or otherwise to take advantage of any bankruptcy or insolvency law of any jurisdiction, or ordering the dissolution, winding-up or liquidation of the Corporation or Sunburst, or if any petition for any such relief shall be filed against the Corporation or Sunburst and such petition shall not be dismissed within thirty (30) days; 

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(h)

the Corporation fails to: (i) include the Conversion Shares issuable upon conversion of this Convertible Debenture, Warrant Shares issuable upon exercise of the Conversion Warrants and any other securities due to the Holder pursuant to this Convertible Debenture in the next registration statement to be filed by the Corporation within sixty (60) days following the Issue Date (the “Registration Statement”), or obtain effectiveness with the Securities and Exchange Commission of the Registration Statement; (ii) makes its best efforts within one hundred twenty (120) days following the Issue Date; (iii) maintain the effectiveness of such Registration Statement lapses in effect (or sales cannot otherwise be made thereunder effective, whether by reason of the Corporation’s failure to amend or supplement the prospectus included therein) for more than twenty (20) consecutive days or thirty (30) days in any twelve month period after the Registration Statement becomes effective or after becoming effective the Registration Statement is not kept effective for the term of the Conversion Warrants; and

(i)

the Corporation undertakes to provide customary legal opinions with respect to the issuance of the Convertible Debenture and the execution of the Security Agreements from counsel to the Corporation and Sunburst within fifteen (15) days of the Issue Date in a form acceptable to the Holder, acting reasonably, and the failure to provide such legal opinion(s) in this time period shall constitute an Event of Default. 

4.4

Representations and Warranties

The Corporation hereby represents and warrants to the Holder that:

(a)

no authorization, approval or other action by, and no notice to or filing with, any governmental authority or regulatory body is required for the execution, delivery and performance of this Convertible Debenture or the General Security Agreements by the Corporation and Sunburst or for the grant by the Corporation of the security interests granted pursuant to the General Security Agreements except for authorization, approval or such filings as have been obtained, made and are in full force and effect; and in particular, but without limiting the foregoing, the Corporation has obtained all approvals and authorizations from the OTC Bulletin Board and the shareholders and directors of the Corporation as are necessary to complete all the transactions contemplated in and provided for in this Convertible Debenture;

(b)

the Corporation and Sunburst are in compliance with the requirements of all applicable laws, rules, regulations and orders of every governmental authority, the non-compliance with which would materially adversely affect the value or worth of the Corporation’s and Sunburst’s property as collateral security to this Convertible Debenture and the General Security Agreements and upon completion of all the transactions contemplated in and provided for in this Convertible Debenture the Corporation and Sunburst will remain in compliance with the requirements of all applicable laws, rules, regulations and orders of every governmental authority; and

(c)

this Convertible Debenture and the General Security Agreements have been properly authorized, duly executed and delivered by the Corporation and Sunburst and constitute legal, valid and binding obligations of the Corporation and Sunburst enforceable in accordance with their respective terms, except as may be limited by applicable bankruptcy, insolvency, moratorium, and other laws affecting creditors’ rights generally 

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and except that orders for specific performance, injunctions and other equitable remedies are discretionary remedies which may be granted only in the discretion of the court.

4.5

Indemnity

The Corporation covenants and agrees to indemnify and hold harmless the Holder from and against any and all damages or deficiencies resulting from any misrepresentation, breach of warranty or non-fulfillment of any covenant on the part of the Corporation or Sunburst under this Convertible Debenture or from any misrepresentation in or omission from any certificate or other instrument furnished or to be furnished by the Corporation or Sunburst to the Holder under this Convertible Debenture or the General Security Agreements and any and all actions, suits, proceedings, demands, assessments, judgments, costs and legal and other expenses incident to any of the foregoing.

4.6

Survival of Representations, Warranties, Indemnity and Covenants

Notwithstanding the completion of the transactions herein contemplated, the representations and warranties, covenants and indemnities contained in this Convertible Debenture shall not merge in, be prejudiced by or be superseded in any way by the execution and completion of this Convertible Debenture and shall survive the same for a period of two years from the date of execution of this Convertible Debenture.

4.7

Remedies

In case of a default hereunder by the Corporation or Sunburst, the Holder may enforce the rights of the Holder by any remedy or proceeding authorized or permitted by applicable law (subject in all cases to any mandatory provision of applicable law). No remedy herein contained conferred upon the Holder shall be intended to be exclusive and such Holder shall be entitled to seek other remedies available under applicable laws.

ARTICLE 5

REGISTRATION RIGHTS

5.1

Registration Rights

When the Corporation elects to file a Registration Statement, with respect to its Common Shares pursuant to the Securities Act of 1933 (the “Act”), the Conversion Shares, Warrant Shares and any other securities due to the Holder under this Convertible Debentures shall be included and registered pursuant to any such Registration Statement, at the expense of the Corporation; provided, however, that such Registration Statement must be filed no later than the sixtieth (60th) day following the Issue Date and the Corporation shall make its best efforts to have such Registration Statement be declared effective no later than the one hundred twentieth (120th) day following the Issue Date.  The Corporation must notify the Holder in writing of its intention to file the Registration Statement at least twenty (20) days prior to the filing of the Registration Statement, and provide the Holder with drafts of such Registration Statement for review and comment by the Holder upon Holder’s request. 

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ARTICLE 6

MISCELLANEOUS

6.1

Notice

Any notice or other communication required or permitted to be given hereunder shall be in writing and shall be given by facsimile or other means of electronic communication or by delivery as hereafter provided. Any such notice other communication, if sent by facsimile or other means of electronic communication, shall be deemed to have been received on the business day following the sending, or, if delivered by hand, shall be deemed to have been received at the time it is delivered to the applicable address noted below either to the individual designated below or to an individual at such address having apparent authority to accept deliveries on behalf of the addressee. Notice of change of address shall also be governed by this Section. Notices and other communications shall be addressed as follows:

(a)

if to the Corporation:

Mexoro Minerals Ltd.

C. General Retana, #706

Col. San Felipe

Chihuahua, Mexico

Attention:

Mario Ayub

Facsimile:

(b)

if to the Holder:

To the Holder whose name and address appears on the front page of this Convertible Debenture.

6.2

Replacement of Certificates

(1)

In case this Convertible Debenture shall become mutilated or be lost, destroyed or stolen, the Corporation shall issue, and thereupon deliver, a new Convertible Debenture of like tenor as the one mutilated, lost, destroyed or stolen in exchange for and upon surrender and cancellation of such mutilated Certificate or in lieu of and in substitution for such lost, destroyed or stolen Convertible Debenture.

6.3

Amendment, Waiver

No amendment or waiver of this Convertible Debenture will be binding unless such amendment or waiver is agreed to in writing by the Corporation and the Holder. No waiver of any provision of this Convertible Debenture will constitute a waiver of any other provision nor will any waiver of any provision of this Convertible Debenture constitute a continuing waiver unless otherwise expressly provided.

[SIGNATURE PAGE FOLLOWS]

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IN WITNESS WHEREOF MEXORO MINERALS LTD. has caused this Convertible Debenture to be signed by its authorized signatory as of the 11th day of July, 2008.

		
	 
	MEXORO MINERALS LTD.

	 
	 

	 
	/s/

	 
	Name:

Title:

SCHEDULE A

NOTICE OF ELECTION TO CONVERT

				
	TO:

	MEXORO MINERALS LTD.

	Principal Amount to be converted

	$

	 

	 
	 
	 

The undersigned registered Holder of the within Convertible Debenture hereby irrevocably elects to convert the above noted Principal Amount of such Convertible Debenture into Conversion Units of Mexoro Minerals Ltd. in accordance with the provisions of the within mentioned Convertible Debenture and hereby delivers this Convertible Debenture to the Corporation for such purpose and directs that the certificates for the Conversion Shares and Conversion Warrants be registered and delivered as follows:

				
	Name in Full

	Address

	Address for Delivery

	Number of Conversion Shares and Conversion Warrants

	 
	 
	 
	 

	 
	 
	 
	 

	 
	 
	 
	 

	 
	 
	 
	 

	 
	 
	 
	 

(Please print full name in which share and warrant certificates are to be issued.)

The registered Holder hereof may exercise the Holder’s right to subscribe for Conversion Units of MEXORO MINERALS LTD. by completing this Notice of Election to Convert it to the Corporation at its office.

If applicable, please deliver a new Convertible Debenture in respect of the balance of the principal amount of the attached Convertible Debenture Certificate that has not been converted, redeemed or repaid, to the undersigned.

			
	Dated:

	 
	 

	 
	 
	 

	 
	 
	 

	 
	 
	(Signature of Holder)

	 
	 
	 

	 
	 
	 

	 
	 
	(Print Name of Holder)

14

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