Document:

EX-10.9

FHLMC Loan No. 504133209

Kedron Village Apartments

MULTIFAMILY NOTE

MULTISTATE – ADJUSTABLE RATE

(REVISION DATE 2-15-2008)

	 	 	 
	US $20,000,000.00

	 	Effective Date: As of June 27, 2008

FOR VALUE RECEIVED, the undersigned (together with such party’s or parties’ successors and
assigns, “Borrower”), jointly and severally (if more than one) promises to pay to the order of
CAPMARK BANK, a Utah industrial bank the principal sum of Twenty Million and 00/100 Dollars
(US $20,000,000.00), with interest on the unpaid principal balance as hereinafter provided.

1. Defined Terms.

(a) As used in this Note:

"Adjustable Interest Rate” means the variable annual interest rate calculated for
each Interest Adjustment Period so as to equal the Index Rate for such Interest
Adjustment Period (truncated at the fifth (5th) decimal place if
necessary) plus the Margin. However, in no event will the Adjustable Interest Rate
exceed the Capped Interest Rate.

"Amortization Period” means a period of -0- full consecutive calendar months.

"Base Recourse” means a portion of the Indebtedness equal to zero percent (-0-%) of
the original principal balance of this Note.

"Business Day” means any day other than a Saturday, a Sunday or any other day on
which Lender or the national banking associations are not open for business.

"Capped Interest Rate” means six and five tenths percent (6.5%) per annum.

"Default Rate” means a variable annual interest rate equal to four (4) percentage
points above the Adjustable Interest Rate in effect from time to time. However, at
no time will the Default Rate exceed the Maximum Interest Rate.

"Index Rate” means, for any Interest Adjustment Period, the Reference Bill Index
Rate for such Interest Adjustment Period.

"Installment Due Date” means, for any monthly installment of interest only or
principal and interest, the date on which such monthly installment is due and
payable pursuant to Section 3 of this Note. The “First Installment Due Date” under
this Note is August 1, 2008.

"Interest Adjustment Period” means each successive one (1) calendar month period
until the entire Indebtedness is paid in full, except that the first Interest
Adjustment Period is the period from the date of this Note through June 30, 2008.
Therefore, the second Interest Adjustment Period shall be the period from July 1,
2008 through July 31, 2008, and so on until the entire Indebtedness is paid in full.

"Lender” means the holder from time to time of this Note.

"LIBOR Index” means the British Bankers Association’s (BBA) one (1) month LIBOR Rate
for United States Dollar deposits, as displayed on the LIBOR Index Page used to
establish the LIBOR Index Rate.

"LIBOR Index Rate” means, for any Interest Adjustment Period after the first
Interest Adjustment Period, the BBA’s LIBOR Rate for the LIBOR Index released by the
BBA most recently preceding the first day of such Interest Adjustment Period, as
such LIBOR Rate is displayed on the LIBOR Index Page. The LIBOR Index Rate for the
first Interest Adjustment Period means the British Bankers Association’s (BBA) LIBOR
Rate for the LIBOR Index released by the BBA most recently preceding the first day
of the month in which the first Interest Adjustment Period begins, as such LIBOR
Rate is displayed on the LIBOR Index Page. “LIBOR Index Page” is the Bloomberg
L.P., page “BBAM”, or such other page for the LIBOR Index as may replace page BBAM
on that service, or at the option of Lender (i) the applicable page for the LIBOR
Index on another service which electronically transmits or displays BBA LIBOR Rates,
or (ii) any publication of LIBOR rates available from the BBA. In the event the BBA
ceases to set or publish a LIBOR rate/interest settlement rate for the LIBOR Index,
Lender will designate an alternative index, and such alternative index shall
constitute the LIBOR Index Page.

"Loan” means the loan evidenced by this Note.

"Lockout Period” is not applicable, there is no Lockout Period under this Note.

"Margin” means two hundred thirty-eight (238) percentage points (238 basis points).

"Maturity Date” means the earlier of (i) July 1, 2015 (the “Scheduled Maturity
Date”), and (ii) the date on which the unpaid principal balance of this Note becomes
due and payable by acceleration or otherwise pursuant to the Loan Documents or the
exercise by Lender of any right or remedy under any Loan Document.

"Maximum Interest Rate” means the rate of interest that results in the maximum
amount of interest allowed by applicable law.

"Prepayment Premium Period” means the period during which, if a prepayment of
principal occurs, a prepayment premium will be payable by Borrower to Lender. The
Prepayment Premium Period is the period from and including the date of this Note
until but not including the first day of the Window Period.

"Reference Billsâ” means the unsecured general obligations of the Federal Home
Loan Mortgage Corporation (“Freddie Mac”) designated by Freddie Mac as “Reference
Billsâ Securities” and having original durations to maturity most comparable
to the term of the Reference Bill Index, and issued by Freddie Mac at regularly
scheduled auctions. In the event Freddie Mac shall at any time cease to designate
any unsecured general obligations of Freddie Mac as “Reference Bills Securities”,
then at the option of Lender (i) Lender may select from time to time another
unsecured general obligation of Freddie Mac having original durations to maturity
most comparable to the term of the Reference Bill Index and issued by Freddie Mac at
regularly scheduled auctions, and the term “Reference Bills” as used in this Note
shall mean such other unsecured general obligations as selected by Lender; or (ii)
for any one or more Interest Adjustment Periods, Lender may use the applicable LIBOR
Index Rate as the Index Rate for such Interest Adjustment Period(s).

"Reference Bill Index” means the one month Reference Bills. One-month reference
bills have original durations to maturity of approximately 30 days.

"Reference Bill Index Rate” means, for any Interest Adjustment Period after the
first Interest Adjustment Period, the Money Market Yield for the Reference Bills as
established by the Reference Bill auction conducted by Freddie Mac most recently
preceding the first day of such Interest Adjustment Period, as displayed on the
Reference Bill Index Page. The Reference Bill Index Rate for the first Interest
Adjustment Period means the Money Market Yield for the Reference Bills as
established by the Reference Bill auction conducted by Freddie Mac most recently
preceding the first day of the month in which the first Interest Adjustment Period
begins, as displayed on the Reference Bill Index Page. The “Reference Bill Index
Page” is the Freddie Mac Debt Securities Web Page (accessed via the Freddie Mac
internet site at www.freddiemac.com), or at the option of Lender, any publication of
Reference Bills auction results available from Freddie Mac. However, if Freddie Mac
has not conducted a Reference Bill auction within the 60-calendar day period prior
to the first day of an Interest Adjustment Period, the Reference Bill Index Rate for
such Interest Adjustment Period will be the LIBOR Index Rate for such Interest
Adjustment Period.

"Remaining Amortization Period” means, at any point in time, the number of
consecutive calendar months equal to the number of months in the Amortization Period
minus the number of scheduled monthly installments of principal and interest
that have elapsed since the date of this Note.

"Security Instrument” means the multifamily mortgage, deed to secure debt or deed of
trust effective as of the effective date of this Note, from Borrower to or for the
benefit of Lender and securing this Note.

"Window Period” means the three (3) consecutive calendar month period prior to the
Scheduled Maturity Date.

"Yield Maintenance Period” is not applicable, there is no Yield Maintenance Period
under this Note.

(b) Other capitalized terms used but not defined in this Note shall have the meanings given to
such terms in the Security Instrument.

2. Address for Payment. All payments due under this Note shall be payable at c/o Capmark
Finance Inc., 116 Welsh Road, Horsham, Pennsylvania 19044, Attn: Servicing — Account Manager, or
such other place as may be designated by Notice to Borrower from or on behalf of Lender.

3. Payments.

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

(b) Interest under this Note shall be computed, payable and allocated on the basis of an
actual/360 interest calculation schedule (interest is payable for the actual number of days in each
month, and each month’s interest is calculated by multiplying the unpaid principal amount of this
Note as of the first day of the month for which interest is being calculated by the applicable
Adjustable Interest Rate, dividing the product by 360, and multiplying the quotient by the number
of days in the month for which interest is being calculated). For convenience in determining the
amount of a monthly installment of principal and interest under this Note, Lender will use a 30/360
interest calculation payment schedule (each year is treated as consisting of twelve 30-day months).
However, as provided above, the portion of the monthly installment actually payable as and
allocated to interest will be based upon an actual/360 interest calculation schedule, and the
amount of each installment attributable to principal and the amount attributable to interest will
vary based upon the number of days in the month for which such installment is paid. Each monthly
payment of principal and interest will first be applied to pay in full interest due, and the
balance of the monthly payment paid by Borrower will be credited to principal.

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

(d) Beginning on the First Installment Due Date, and continuing until and including the
monthly installment due on the Maturity Date, accrued interest only shall be payable by Borrower in
consecutive monthly installments due and payable on the first day of each calendar month. The
amount of the monthly installment of interest only payable pursuant to this Section 3(d) on an
Installment Due Date shall equal the product of (i) annual interest on the unpaid principal balance
of this Note as of the first day of the Interest Adjustment Period immediately preceding the
Installment Due Date at the Adjustable Interest Rate in effect for such Interest Adjustment Period,
divided by 360, multiplied by (ii) the number of days in such Interest Adjustment Period.

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

(f) Lender shall provide Borrower with Notice, given in the manner specified in the Security
Instrument, of the amount of each monthly installment due under this Note. However, if Lender has
not provided Borrower with prior notice of the monthly payment due on any Installment Due Date,
then Borrower shall pay on that Installment Due Date an amount equal to the monthly installment
payment for which Borrower last received notice. If Lender at any time determines that Borrower
has paid one or more monthly installments in an incorrect amount because of the operation of the
preceding sentence, or because Lender has miscalculated the Adjustable Interest Rate or has
otherwise miscalculated the amount of any monthly installment, then Lender shall give notice to
Borrower of such determination. If such determination discloses that Borrower has paid less than
the full amount due for the period for which the determination was made, Borrower, within 30
calendar days after receipt of the notice from Lender, shall pay to Lender the full amount of the
deficiency. If such determination discloses that Borrower has paid more than the full amount due
for the period for which the determination was made, then the amount of the overpayment shall be
credited to the next installment(s) of interest only or principal and interest, as applicable, due
under this Note (or, if an Event of Default has occurred and is continuing, such overpayment shall
be credited against any amount owing by Borrower to Lender).

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

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

(i) Any accrued interest remaining past due for 30 days or more, at Lender’s discretion, may
be added to and become part of the unpaid principal balance of this Note and any reference to
“accrued interest” shall refer to accrued interest which has not become part of the unpaid
principal balance. Any amount added to principal pursuant to the Loan Documents shall bear
interest at the applicable rate or rates specified in this Note and shall be payable with such
interest upon demand by Lender and absent such demand, as provided in this Note for the payment of
principal and interest.

(j) In accordance with Section 14, interest charged under this Note cannot exceed the Maximum
Interest Rate. If the Adjustable Interest Rate at any time exceeds the Maximum Interest Rate,
resulting in the charging of interest hereunder to be limited to the Maximum Interest Rate, then
any subsequent reduction in the Adjustable Interest Rate shall not reduce the rate at which
interest under this Note accrues below the Maximum Interest Rate until the total amount of interest
accrued hereunder equals the amount of interest which would have accrued had the Adjustable
Interest Rate at all times been in effect.

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

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

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

7. Late Charge.

(a) If any monthly installment of interest or principal and interest or other amount payable
under this Note or under the Security Instrument or any other Loan Document is not received in full
by Lender within five (5) days after the installment or other amount is due, counting from and
including the date such installment or other amount is due (unless applicable law requires a longer
period of time before a late charge may be imposed, in which event such longer period shall be
substituted), Borrower shall pay to Lender, immediately and without demand by Lender, a late charge
equal to five percent (5%) of such installment or other amount due (unless applicable law requires
a lesser amount be charged, in which event such lesser amount shall be substituted).

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

8. Default Rate.

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

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

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

9. Limits on Personal Liability.

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

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

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

	 	(i)	 	Borrower fails to pay to Lender upon demand after an Event of
Default all Rents to which Lender is entitled under Section 3(a) of the
Security Instrument and the amount of all security deposits collected by
Borrower from tenants then in residence. However, Borrower will not be
personally liable for any failure described in this subsection (i) if Borrower
is unable to pay to Lender all Rents and security deposits as required by the
Security Instrument because of a valid order issued in a bankruptcy,
receivership, or similar judicial proceeding.

	 	(ii)	 	Borrower fails to apply all insurance proceeds and condemnation
proceeds as required by the Security Instrument. However, Borrower will not be
personally liable for any failure described in this subsection (ii) if Borrower
is unable to apply insurance or condemnation proceeds as required by the
Security Instrument because of a valid order issued in a bankruptcy,
receivership, or similar judicial proceeding.

	 	(iii)	 	Borrower fails to comply with Section 14(g) or (h) of the
Security Instrument relating to the delivery of books and records, statements,
schedules and reports.

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

	 	 	 
	[ Collect ]

	 	Hazard Insurance premiums or other insurance premiums,
	 

	 	

	[ Collect ]

	 	Taxes,
	 

	 	

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

[   N/A    ] ground rents,

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

(d) In addition to the Base Recourse, Borrower shall be personally liable to Lender for:

	 	(i)	 	the performance of all of Borrower’s obligations under
Section 18 of the Security Instrument (relating to environmental matters);

	 	(ii)	 	the costs of any audit under Section 14(g) of the Security
Instrument; and

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

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

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

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

	 	(ii)	 	a Transfer (including, but not limited to, a lien or
encumbrance) that is an Event of Default under Section 21 of the Security
Instrument, other than a Transfer consisting solely of the involuntary removal
or involuntary withdrawal of a general partner in a limited partnership or a
manager in a limited liability company; or

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

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

10. Voluntary and Involuntary Prepayments.

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

(b) Borrower may not voluntarily prepay any portion of the principal balance of this Note
during the Lockout Period, if a Lockout Period is applicable to this Note. However, if any portion
of the principal balance of this Note is prepaid during the Lockout Period by reason of the
application by Lender of any proceeds of collateral or other security to any portion of the unpaid
principal balance of this Note or following a determination that the prohibition on voluntary
prepayments during the Lockout Period is in contravention of applicable law, then Borrower must
also pay to Lender upon demand by Lender, a prepayment premium equal to five percent (5.0%) of the
amount of principal being prepaid.

(c) Following the end of the Lockout Period, Borrower may voluntarily prepay all of the unpaid
principal balance of this Note on an Installment Due Date so long as Borrower designates the date
for such prepayment in a Notice from Borrower to Lender given at least 30 days prior to the date of
such prepayment. If an Installment Due Date (as defined in Section 1(a)) falls on a day which is
not a Business Day, then with respect to payments made under this Section 10 only, the term
“Installment Due Date” shall mean the Business Day immediately preceding the scheduled Installment
Due Date.

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

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

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

	 	(i)	 	5.0% of the amount of principal being prepaid if the prepayment
occurs prior to the twelfth (12th) Installment Due Date under this Note; or

	 	(ii)	 	4.0% of the amount of principal being prepaid if the prepayment
occurs on or after the twelfth (12th) Installment Due Date under this Note and
prior to the twenty-fourth (24th) Installment Due Date under this Note; or

	 	(iii)	 	3.0% of the amount of principal being prepaid if the
prepayment occurs on or after the twenty-fourth (24th) Installment Due Date
under this Note and prior to the thirty-sixth (36th) Installment Due Date under
this Note; or

	 	(iv)	 	2.0% of the amount of principal being prepaid if the prepayment
occurs on or after the thirty-sixth (36th) Installment Due Date under this Note
and prior to the forty-eighth (48th) Installment Due Date under this Note; or

	 	(v)	 	1.0% of the amount of principal being prepaid if the prepayment
occurs on or after the forty-eighth (48th) Installment Due Date under this
Note.

(g) Notwithstanding any other provision of this Section 10, no prepayment premium shall be
payable with respect to (i) any prepayment made during the Window Period, or (ii) any prepayment
occurring as a result of the application of any insurance proceeds or condemnation award under the
Security Instrument, or (iii) any prepayment of the entire principal balance of this Note that
occurs on or after the sixtieth (60th) Installment Due Date under this Note with the proceeds of a
fixed interest rate or fixed-to-float interest rate mortgage loan that is the subject of a binding
commitment for purchase between the Freddie Mac and a Freddie Mac-approved Program Plusâ
Seller/Servicer.

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

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

11. Costs and Expenses. To the fullest extent allowed by applicable law, Borrower shall pay
all expenses and costs, including Attorneys’ Fees and Costs incurred by Lender as a result of any
default under this Note or in connection with efforts to collect any amount due under this Note, or
to enforce the provisions of any of the other Loan Documents, including those incurred in
post-judgment collection efforts and in any bankruptcy proceeding (including any action for relief
from the automatic stay of any bankruptcy proceeding) or judicial or non-judicial foreclosure
proceeding.

12. Forbearance. Any forbearance by Lender in exercising any right or remedy under this Note,
the Security Instrument, or any other Loan Document or otherwise afforded by applicable law, shall
not be a waiver of or preclude the exercise of that or any other right or remedy. The acceptance
by Lender of any payment after the due date of such payment, or in an amount which is less than the
required payment, shall not be a waiver of Lender’s right to require prompt payment when due of all
other payments or to exercise any right or remedy with respect to any failure to make prompt
payment. Enforcement by Lender of any security for Borrower’s obligations under this Note shall
not constitute an election by Lender of remedies so as to preclude the exercise of any other right
or remedy available to Lender.

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

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

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

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

17. Governing Law. This Note shall be governed by the law of the Property Jurisdiction.

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

19. Notices; Written Modifications.

(a) All Notices, demands and other communications required or permitted to be given pursuant
to this Note shall be given in accordance with Section 31 of the Security Instrument.

(b) Any modification or amendment to this Note shall be ineffective unless in writing signed
by the party sought to be charged with such modification or amendment; provided, however, that in
the event of a Transfer under the terms of the Security Instrument that requires Lender’s consent,
any or some or all of the Modifications to Multifamily Note set forth in Exhibit A to this Note may
be modified or rendered void by Lender at Lender’s option, by Notice to Borrower and the
transferee, as a condition of Lender’s consent.

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

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

22. State-Specific Provisions. N/A

ATTACHED EXHIBIT. The Exhibit noted below, if marked with an “X” in the space provided, is
attached to this Note:

	 	 	 
	Exhibit A

	 	Modifications to Multifamily Note

IN WITNESS WHEREOF, and in consideration of the Lender’s agreement to lend Borrower the
principal amount set forth above, Borrower has signed and delivered this Note under seal or has
caused this Note to be signed and delivered under seal by its duly authorized representative.
Borrower intends that this Note shall be deemed to be signed and delivered as a sealed instrument.

1

	 	 	 	G&E
APARTMENT REIT KEDRON VILLAGE, LLC, a Delaware
limited liability company

By: /s/ Gus G. Remppies (SEAL)

	 	 	Name: Gus G. Remppies

Authorized Signatory

26-2823812

Borrower’s Social Security/Employer ID Number

2

PAY TO THE ORDER OF FEDERAL HOME LOAN MORTGAGE
CORPORATION, WITHOUT RECOURSE.

	 	 	CAPMARK BANK, a Utah industrial bank	 

By: /s/ Max W. Foore (SEAL)

	 	 	Max W. Foore

Limited Signer

FHLMC Loan No. 504133209

3EX-10.10

Prepared by, and after recording

return to:

Edwin C. Cox, Esquire

Troutman Sanders LLP

P.O. Box 1122

Richmond, Virginia 23218-1122

MULTIFAMILY DEED TO SECURE DEBT,

ASSIGNMENT OF RENTS 

AND SECURITY AGREEMENT

(GEORGIA – REVISION DATE 05-11-2004)

1

FHLMC Loan No. 504133209

Kedron Village Apartments

MULTIFAMILY DEED TO SECURE DEBT,

ASSIGNMENT OF RENTS

AND SECURITY AGREEMENT

(GEORGIA – REVISION DATE 05-11-2004)

THIS MULTIFAMILY DEED TO SECURE DEBT, ASSIGNMENT OF RENTS AND SECURITY AGREEMENT (the
"Instrument”) is made to be effective as of the 27th day of June, 2008, between G&E APARTMENT REIT
KEDRON VILLAGE, LLC, a limited liability company organized and existing under the laws of Delaware,
whose address is c/o Grubb & Ellis Realty Investors, LLC, 1606 Santa Rosa Road, Suite 109,
Richmond, Virginia 23229, as grantor (“Borrower”), and CAPMARK BANK, an industrial bank organized
and existing under the laws of Utah, whose address is 6955 Union Park Center, Suite 330, Midvale,
Utah 84047, Attn: President, as grantee (“Lender”). Borrower’s organizational identification
number, if applicable, is 4563259.

Borrower is indebted to Lender in the principal amount of Twenty Million and 00/100 Dollars
($20,000,000.00), as evidenced by Borrower’s Multifamily Note payable to Lender, dated as of the
date of this Instrument, and maturing on July 1, 2015 (the “Maturity Date”).

TO SECURE TO LENDER the repayment of the Indebtedness, and all renewals, extensions and
modifications of the Indebtedness, and the performance of the covenants and agreements of Borrower
contained in the Loan Documents, Borrower grants, conveys and assigns to Lender and Lender’s
successors and assigns, with power of sale, the Mortgaged Property, including the Land located in
the County of Fayette, State of Georgia and described in Exhibit A attached to this Instrument. To
have and to hold the Mortgaged Property unto Lender and Lender’s successors and assigns forever.
As used in this Instrument, the term “Mortgaged Property” is synonymous with the term “Secured
Property,” and the term “lien” is synonymous with the term “security interest and title.”

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

UNIFORM COVENANTS

REVISION DATE 02-15-2008

Covenants. In consideration of the mutual promises set forth in this Instrument, Borrower and
Lender covenant and agree as follows:

1. DEFINITIONS. The following terms, when used in this Instrument (including when used in the
above recitals), shall have the following meanings:

(a) "Attorneys’ Fees and Costs” means (i) fees and out-of-pocket costs of Lender’s and Loan
Servicer’s attorneys, as applicable, including costs of Lender’s and Loan Servicer’s in-house
counsel, support staff costs, costs of preparing for litigation, computerized research, telephone
and facsimile transmission expenses, mileage, deposition costs, postage, duplicating, process
service, videotaping and similar costs and expenses; (ii) costs and fees of expert witnesses,
including appraisers; and (iii) investigatory fees. 

(b) "Borrower” means all persons or entities identified as “Borrower” in the first paragraph
of this Instrument, together with their successors and assigns.

(c) "Business Day” means any day other than a Saturday, a Sunday or any other day on which
Lender or the national banking associations are not open for business.

(d) "Collateral Agreement” means any separate agreement between Borrower and Lender for the
purpose of establishing replacement reserves for the Mortgaged Property, establishing a fund to
assure the completion of repairs or improvements specified in that agreement, or assuring reduction
of the outstanding principal balance of the Indebtedness if the occupancy of or income from the
Mortgaged Property does not increase to a level specified in that agreement, or any other agreement
or agreements between Borrower and Lender which provide for the establishment of any other fund,
reserve or account.

(e) "Controlling Entity” means an entity which owns, directly or indirectly through one or
more intermediaries, (i) a general partnership interest or a Controlling Interest of the limited
partnership interests in Borrower (if Borrower is a partnership or joint venture), (ii) a manager’s
interest in Borrower or a Controlling Interest of the ownership or membership interests in Borrower
(if Borrower is a limited liability company), (iii) a Controlling Interest of any class of voting
stock of Borrower (if Borrower is a corporation), (iv) a trustee’s interest or a Controlling
Interest of the beneficial interests in Borrower (if Borrower is a trust), or (v) a managing
partner’s interest or a Controlling Interest of the partnership interests in Borrower (if Borrower
is a limited liability partnership).

(f) "Controlling Interest” means (i) 51 percent or more of the ownership interests in an
entity, or (ii) a percentage ownership interest in an entity of less than 51 percent, if the
owner(s) of that interest actually direct(s) the business and affairs of the entity without the
requirement of consent of any other party. The Controlling Interest shall be deemed to be
51 percent unless otherwise stated in Exhibit B.

(g) "Environmental Permit” means any permit, license, or other authorization issued under any
Hazardous Materials Law with respect to any activities or businesses conducted on or in relation to
the Mortgaged Property.

(h) "Event of Default” means the occurrence of any event listed in Section 22.

(i) "Fixtures” means all property owned by Borrower which is so attached to the Land or the
Improvements as to constitute a fixture under applicable law, including: machinery, equipment,
engines, boilers, incinerators, installed building materials; systems and equipment for the purpose
of supplying or distributing heating, cooling, electricity, gas, water, air, or light; antennas,
cable, wiring and conduits used in connection with radio, television, security, fire prevention, or
fire detection or otherwise used to carry electronic signals; telephone systems and equipment;
elevators and related machinery and equipment; fire detection, prevention and extinguishing systems
and apparatus; security and access control systems and apparatus; plumbing systems; water heaters,
ranges, stoves, microwave ovens, refrigerators, dishwashers, garbage disposers, washers, dryers and
other appliances; light fixtures, awnings, storm windows and storm doors; pictures, screens,
blinds, shades, curtains and curtain rods; mirrors; cabinets, paneling, rugs and floor and wall
coverings; fences, trees and plants; swimming pools; and exercise equipment.

(j) "Governmental Authority” means any board, commission, department or body of any municipal,
county, state or federal governmental unit, or any subdivision of any of them, that has or acquires
jurisdiction over the Mortgaged Property or the use, operation or improvement of the Mortgaged
Property or over the Borrower.

(k) "Hazard Insurance” is defined in Section 19.

(l) "Hazardous Materials” means petroleum and petroleum products and compounds containing
them, including gasoline, diesel fuel and oil; explosives; flammable materials; radioactive
materials; polychlorinated biphenyls (“PCBs”) and compounds containing them; lead and lead-based
paint; asbestos or asbestos-containing materials in any form that is or could become friable;
underground or above-ground storage tanks, whether empty or containing any substance; any substance
the presence of which on the Mortgaged Property is prohibited by any federal, state or local
authority; any substance that requires special handling and any other material or substance now or
in the future that (i)  is defined as a “hazardous substance,” “hazardous material,” “hazardous
waste,” “toxic substance,” “toxic pollutant,” “contaminant,” or “pollutant” by or within the
meaning of any Hazardous Materials Law, or (ii) is regulated in any way by or within the meaning of
any Hazardous Materials Law.

(m) "Hazardous Materials Laws” means all federal, state, and local laws, ordinances and
regulations and standards, rules, policies and other governmental requirements, administrative
rulings and court judgments and decrees in effect now or in the future and including all
amendments, that relate to Hazardous Materials or the protection of human health or the environment
and apply to Borrower or to the Mortgaged Property. Hazardous Materials Laws include, but are not
limited to, the Comprehensive Environmental Response, Compensation and Liability Act, 42 U.S.C.
Section 9601, et seq., the Resource Conservation and Recovery Act of 1976, 42 U.S.C. Section 6901,
et seq., the Toxic Substance Control Act, 15 U.S.C. Section 2601, et seq., the Clean Water Act, 33
U.S.C. Section 1251, et seq., and the Hazardous Materials Transportation Act, 49 U.S.C.
Section 5101 et seq., and their state analogs.

(n) "Impositions” and “Imposition Deposits” are defined in Section 7(a).

(o) "Improvements” means the buildings, structures, improvements, and alterations now
constructed or at any time in the future constructed or placed upon the Land, including any future
replacements and additions.

(p) "Indebtedness” means the principal of, interest at the fixed or variable rate set forth in
the Note on, and all other amounts due at any time under, the Note, this Instrument or any other
Loan Document, including prepayment premiums, late charges, default interest, and advances as
provided in Section 12 to protect the security of this Instrument.

(q) "Initial Owners” means, with respect to Borrower or any other entity, the persons or
entities that (i) on the date of the Note, or (ii) on the date of a Transfer to which Lender has
consented, own in the aggregate 100 percent of the ownership interests in Borrower or that entity.

(r) "Land” means the land described in Exhibit A.

(s) "Leases” means all present and future leases, subleases, licenses, concessions or grants
or other possessory interests now or hereafter in force, whether oral or written, covering or
affecting the Mortgaged Property, or any portion of the Mortgaged Property (including proprietary
leases or occupancy agreements if Borrower is a cooperative housing corporation), and all
modifications, extensions or renewals.

(t) "Lender” means the entity identified as “Lender” in the first paragraph of this
Instrument, or any subsequent holder of the Note.

(u) "Loan Documents” means the Note, this Instrument, all guaranties, all indemnity
agreements, all Collateral Agreements, O&M Programs, the MMP and any other documents now or in the
future executed by Borrower, any guarantor or any other person in connection with the loan
evidenced by the Note, as such documents may be amended from time to time.

(v) "Loan Servicer” means the entity that from time to time is designated by Lender to collect
payments and deposits and receive Notices under the Note, this Instrument and any other Loan
Document, and otherwise to service the loan evidenced by the Note for the benefit of Lender.
Unless Borrower receives Notice to the contrary, the Loan Servicer is the entity identified as
“Lender” in the first paragraph of this Instrument.

(w) "MMP” means a moisture management plan to control water intrusion and prevent the
development of Mold or moisture at the Mortgaged Property throughout the term of this Instrument.
At a minimum, the MMP must contain a provision for (i) staff training, (ii) information to be
provided to tenants, (iii) documentation of the plan, (iv) the appropriate protocol for incident
response and remediation and (v) routine, scheduled inspections of common space and unit interiors.

(x) "Mold” means mold, fungus, microbial contamination or pathogenic organisms.

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

	 	(i)	 	the Land;

	 	 	 
	(ii)

(iii)

(iv)

	 	the Improvements;

the Fixtures;

the Personalty;

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

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

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

	 	(viii)	 	all contracts, options and other agreements for the sale of the Land, the
Improvements, the Fixtures, the Personalty or any other part of the Mortgaged
Property entered into by Borrower now or in the future, including cash or
securities deposited to secure performance by parties of their obligations;

	 	(ix)	 	all proceeds from the conversion, voluntary or involuntary, of
any of the above into cash or liquidated claims, and the right to collect such
proceeds;

	 	(x)	 	all Rents and Leases;

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

	 	(xii)	 	all Imposition Deposits;

	 	(xiii)	 	all refunds or rebates of Impositions by any municipal, state or federal
authority or insurance company (other than refunds applicable to periods before
the real property tax year in which this Instrument is dated);

	 	(xiv)	 	all tenant security deposits which have not been forfeited by
any tenant under any Lease and any bond or other security in lieu of such
deposits; and

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

(z) "Note” means the Multifamily Note described on page 1 of this Instrument, including all
schedules, riders, allonges and addenda, as such Multifamily Note may be amended from time to time.

	 	 	 
	(aa)

(bb)

	 	"O&M Program” is defined in Section 18(d).

"Personalty” means all:

	 	(i)	 	accounts (including deposit accounts) of Borrower related to
the Mortgaged Property;

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

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

	 	(iv)	 	any operating agreements relating to the Land or the
Improvements;

	 	(v)	 	any surveys, plans and specifications and contracts for
architectural, engineering and construction services relating to the Land or
the Improvements;

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

	 	 	 
	(cc)

	 	(vii)any rights of Borrower in or under letters of credit.

"Property Jurisdiction” is defined in Section 30(a).

(dd) "Rents” means all rents (whether from residential or non-residential space), revenues and
other income of the Land or the Improvements, parking fees, laundry and vending machine income and
fees and charges for food, health care and other services provided at the Mortgaged Property,
whether now due, past due, or to become due, and deposits forfeited by tenants, and, if Borrower is
a cooperative housing corporation or association, maintenance fees, charges or assessments payable
by shareholders or residents under proprietary leases or occupancy agreements, whether now due,
past due, or to become due.

(ee) "Taxes” means all taxes, assessments, vault rentals and other charges, if any, whether
general, special or otherwise, including all assessments for schools, public betterments and
general or local improvements, which are levied, assessed or imposed by any public authority or
quasi-public authority, and which, if not paid, will become a lien on the Land or the Improvements.

(ff) "Transfer” is defined in Section 21.

2. UNIFORM COMMERCIAL CODE SECURITY AGREEMENT.

(a) This Instrument is also a security agreement under the Uniform Commercial Code for any of
the Mortgaged Property which, under applicable law, may be subjected to a security interest under
the Uniform Commercial Code, whether such Mortgaged Property is owned now or acquired in the
future, and all products and cash and non-cash proceeds thereof (collectively, “UCC Collateral”),
and Borrower hereby grants to Lender a security interest in the UCC Collateral. Borrower hereby
authorizes Lender to prepare and file financing statements, continuation statements and financing
statement amendments in such form as Lender may require to perfect or continue the perfection of
this security interest and Borrower agrees, if Lender so requests, to execute and deliver to Lender
such financing statements, continuation statements and amendments. Borrower shall pay all filing
costs and all costs and expenses of any record searches for financing statements and/or amendments
that Lender may require. Without the prior written consent of Lender, Borrower shall not create or
permit to exist any other lien or security interest in any of the UCC Collateral.

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

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

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

3. ASSIGNMENT OF RENTS; APPOINTMENT OF RECEIVER; LENDER IN POSSESSION.

(a) As part of the consideration for the Indebtedness, Borrower absolutely and unconditionally
assigns and transfers to Lender all Rents. It is the intention of Borrower to establish a present,
absolute and irrevocable transfer and assignment to Lender of all Rents and to authorize and
empower Lender to collect and receive all Rents without the necessity of further action on the part
of Borrower. Promptly upon request by Lender, Borrower agrees to execute and deliver such further
assignments as Lender may from time to time require. Borrower and Lender intend this assignment of
Rents to be immediately effective and to constitute an absolute present assignment and not an
assignment for additional security only. For purposes of giving effect to this absolute assignment
of Rents, and for no other purpose, Rents shall not be deemed to be a part of the Mortgaged
Property. However, if this present, absolute and unconditional assignment of Rents is not
enforceable by its terms under the laws of the Property Jurisdiction, then the Rents shall be
included as a part of the Mortgaged Property and it is the intention of the Borrower that in this
circumstance this Instrument create and perfect a lien on Rents in favor of Lender, which lien
shall be effective as of the date of this Instrument.

(b) After the occurrence of an Event of Default, Borrower authorizes Lender to collect, sue
for and compromise Rents and directs each tenant of the Mortgaged Property to pay all Rents to, or
as directed by, Lender. However, until the occurrence of an Event of Default, Lender hereby grants
to Borrower a revocable license to collect and receive all Rents, to hold all Rents in trust for
the benefit of Lender and to apply all Rents to pay the installments of interest and principal then
due and payable under the Note and the other amounts then due and payable under the other Loan
Documents, including Imposition Deposits, and to pay the current costs and expenses of managing,
operating and maintaining the Mortgaged Property, including utilities, Taxes and insurance premiums
(to the extent not included in Imposition Deposits), tenant improvements and other capital
expenditures. So long as no Event of Default has occurred and is continuing, the Rents remaining
after application pursuant to the preceding sentence may be retained by Borrower free and clear of,
and released from, Lender’s rights with respect to Rents under this Instrument. From and after the
occurrence of an Event of Default, and without the necessity of Lender entering upon and taking and
maintaining control of the Mortgaged Property directly, or by a receiver, Borrower’s license to
collect Rents shall automatically terminate and Lender shall without Notice be entitled to all
Rents as they become due and payable, including Rents then due and unpaid. Borrower shall pay to
Lender upon demand all Rents to which Lender is entitled. At any time on or after the date of
Lender’s demand for Rents, (i) Lender may give, and Borrower hereby irrevocably authorizes Lender
to give, notice to all tenants of the Mortgaged Property instructing them to pay all Rents to
Lender, (ii) no tenant shall be obligated to inquire further as to the occurrence or continuance of
an Event of Default, and (iii) no tenant shall be obligated to pay to Borrower any amounts which
are actually paid to Lender in response to such a notice. Any such notice by Lender shall be
delivered to each tenant personally, by mail or by delivering such demand to each rental unit.
Borrower shall not interfere with and shall cooperate with Lender’s collection of such Rents.

(c) Borrower represents and warrants to Lender that Borrower has not executed any prior
assignment of Rents (other than an assignment of Rents securing any prior indebtedness that is
being assigned to Lender, or paid off and discharged with the proceeds of the loan evidenced by the
Note), that Borrower has not performed, and Borrower covenants and agrees that it will not perform,
any acts and has not executed, and shall not execute, any instrument which would prevent Lender
from exercising its rights under this Section 3, and that at the time of execution of this
Instrument there has been no anticipation or prepayment of any Rents for more than two months prior
to the due dates of such Rents. Borrower shall not collect or accept payment of any Rents more
than two months prior to the due dates of such Rents.

(d) If an Event of Default has occurred and is continuing, Lender may, regardless of the
adequacy of Lender’s security or the solvency of Borrower and even in the absence of waste, enter
upon and take and maintain full control of the Mortgaged Property in order to perform all acts that
Lender in its discretion determines to be necessary or desirable for the operation and maintenance
of the Mortgaged Property, including the execution, cancellation or modification of Leases, the
collection of all Rents, the making of repairs to the Mortgaged Property and the execution or
termination of contracts providing for the management, operation or maintenance of the Mortgaged
Property, for the purposes of enforcing the assignment of Rents pursuant to Section 3(a),
protecting the Mortgaged Property or the security of this Instrument, or for such other purposes as
Lender in its discretion may deem necessary or desirable. Alternatively, if an Event of Default
has occurred and is continuing, regardless of the adequacy of Lender’s security, without regard to
Borrower’s solvency and without the necessity of giving prior notice (oral or written) to Borrower,
Lender may apply to any court having jurisdiction for the appointment of a receiver for the
Mortgaged Property to take any or all of the actions set forth in the preceding sentence. If
Lender elects to seek the appointment of a receiver for the Mortgaged Property at any time after an
Event of Default has occurred and is continuing, Borrower, by its execution of this Instrument,
expressly consents to the appointment of such receiver, including the appointment of a receiver ex
parte if permitted by applicable law. If Borrower is a housing cooperative corporation or
association, Borrower hereby agrees that if a receiver is appointed, the order appointing the
receiver may contain a provision requiring the receiver to pay the installments of interest and
principal then due and payable under the Note and the other amounts then due and payable under the
other Loan Documents, including Imposition Deposits, it being acknowledged and agreed that the
Indebtedness is an obligation of the Borrower and must be paid out of maintenance charges payable
by the Borrower’s tenant shareholders under their proprietary leases or occupancy agreements.
Lender or the receiver, as the case may be, shall be entitled to receive a reasonable fee for
managing the Mortgaged Property. Immediately upon appointment of a receiver or immediately upon
the Lender’s entering upon and taking possession and control of the Mortgaged Property, Borrower
shall surrender possession of the Mortgaged Property to Lender or the receiver, as the case may be,
and shall deliver to Lender or the receiver, as the case may be, all documents, records (including
records on electronic or magnetic media), accounts, surveys, plans, and specifications relating to
the Mortgaged Property and all security deposits and prepaid Rents. In the event Lender takes
possession and control of the Mortgaged Property, Lender may exclude Borrower and its
representatives from the Mortgaged Property. Borrower acknowledges and agrees that the exercise by
Lender of any of the rights conferred under this Section 3 shall not be construed to make Lender a
mortgagee-in-possession of the Mortgaged Property so long as Lender has not itself entered into
actual possession of the Land and Improvements.

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

(f) If the Rents are not sufficient to meet the costs of taking control of and managing the
Mortgaged Property and collecting the Rents, any funds expended by Lender for such purposes shall
become an additional part of the Indebtedness as provided in Section 12.

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

4. ASSIGNMENT OF LEASES; LEASES AFFECTING THE MORTGAGED PROPERTY.

(a) As part of the consideration for the Indebtedness, Borrower absolutely and unconditionally
assigns and transfers to Lender all of Borrower’s right, title and interest in, to and under the
Leases, including Borrower’s right, power and authority to modify the terms of any such Lease, or
extend or terminate any such Lease. It is the intention of Borrower to establish a present,
absolute and irrevocable transfer and assignment to Lender of all of Borrower’s right, title and
interest in, to and under the Leases. Borrower and Lender intend this assignment of the Leases to
be immediately effective and to constitute an absolute present assignment and not an assignment for
additional security only. For purposes of giving effect to this absolute assignment of the Leases,
and for no other purpose, the Leases shall not be deemed to be a part of the Mortgaged Property.
However, if this present, absolute and unconditional assignment of the Leases is not enforceable by
its terms under the laws of the Property Jurisdiction, then the Leases shall be included as a part
of the Mortgaged Property and it is the intention of the Borrower that in this circumstance this
Instrument create and perfect a lien on the Leases in favor of Lender, which lien shall be
effective as of the date of this Instrument.

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

(c) Borrower acknowledges and agrees that the exercise by Lender, either directly or by a
receiver, of any of the rights conferred under this Section 4 shall not be construed to make Lender
a mortgagee-in-possession of the Mortgaged Property so long as Lender has not itself entered into
actual possession of the Land and the Improvements. The acceptance by Lender of the assignment of
the Leases pursuant to Section 4(a) shall not at any time or in any event obligate Lender to take
any action under this Instrument or to expend any money or to incur any expenses. Except to the
extent of Lender’s gross negligence or willful misconduct, Lender shall not be liable in any way
for any injury or damage to person or property sustained by any person or persons, firm or
corporation in or about the Mortgaged Property. Prior to Lender’s actual entry into and taking
possession of the Mortgaged Property, Lender shall not (i) be obligated to perform any of the
terms, covenants and conditions contained in any Lease (or otherwise have any obligation with
respect to any Lease); (ii) be obligated to appear in or defend any action or proceeding relating
to the Lease or the Mortgaged Property; or (iii) be responsible for the operation, control, care,
management or repair of the Mortgaged Property or any portion of the Mortgaged Property. The
execution of this Instrument by Borrower shall constitute conclusive evidence that all
responsibility for the operation, control, care, management and repair of the Mortgaged Property is
and shall be that of Borrower, prior to such actual entry and taking of possession.

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

(e) Borrower shall, promptly upon Lender’s request, deliver to Lender an executed copy of each
residential Lease then in effect. All Leases for residential dwelling units shall be on forms
approved by Lender, shall be for initial terms of at least six months and not more than two years,
and shall not include options to purchase.

(f) Borrower shall not lease any portion of the Mortgaged Property for non-residential use
except with the prior written consent of Lender and Lender’s prior written approval of the Lease
agreement. Borrower shall not modify the terms of, or extend or terminate, any Lease for
non-residential use (including any Lease in existence on the date of this Instrument) without the
prior written consent of Lender. However, Lender’s consent shall not be required for the
modification or extension of a non-residential Lease if such modification or extension is on terms
at least as favorable to Borrower as those customary at that time in the applicable market and the
income from the extended or modified Lease will not be less than the income received from the Lease
as of the date of this Instrument. Borrower shall, without request by Lender, deliver an executed
copy of each non-residential Lease to Lender promptly after such Lease is signed. All
non-residential Leases, including renewals or extensions of existing Leases, shall specifically
provide that (i) such Leases are subordinate to the lien of this Instrument; (ii) the tenant shall
attorn to Lender and any purchaser at a foreclosure sale, such attornment to be self-executing and
effective upon acquisition of title to the Mortgaged Property by any purchaser at a foreclosure
sale or by Lender in any manner; (iii) the tenant agrees to execute such further evidences of
attornment as Lender or any purchaser at a foreclosure sale may from time to time request; (iv) the
Lease shall not be terminated by foreclosure or any other transfer of the Mortgaged Property;
(v) after a foreclosure sale of the Mortgaged Property, Lender or any other purchaser at such
foreclosure sale may, at Lender’s or such purchaser’s option, accept or terminate such Lease; and
(vi) the tenant shall, upon receipt after the occurrence of an Event of Default of a written
request from Lender, pay all Rents payable under the Lease to Lender.

(g) Borrower shall not receive or accept Rent under any Lease (whether residential or
non-residential) for more than two months in advance.

(h) If Borrower is a cooperative housing corporation or association, notwithstanding anything
to the contrary contained in this subsection or in Section 21, so long as Borrower remains a
cooperative housing corporation or association and is not in breach of any covenant of this
Instrument, Lender hereby consents to:

	 	(i)	 	the execution of leases of apartments for a term in excess of
two years from Borrower to a tenant shareholder of Borrower, so long as such
leases, including proprietary leases, are and will remain subordinate to the
lien of this Instrument; and

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

5. PAYMENT OF INDEBTEDNESS; PERFORMANCE UNDER LOAN DOCUMENTS; PREPAYMENT PREMIUM. Borrower
shall pay the Indebtedness when due in accordance with the terms of the Note and the other Loan
Documents and shall perform, observe and comply with all other provisions of the Note and the other
Loan Documents. Borrower shall pay a prepayment premium in connection with certain prepayments of
the Indebtedness, including a payment made after Lender’s exercise of any right of acceleration of
the Indebtedness, as provided in the Note.

6. EXCULPATION. Borrower’s personal liability for payment of the Indebtedness and for
performance of the other obligations to be performed by it under this Instrument is limited in the
manner, and to the extent, provided in the Note.

7. DEPOSITS FOR TAXES, INSURANCE AND OTHER CHARGES.

(a) Unless this requirement is waived in writing by Lender, which waiver may be contained in
this Section 7(a), Borrower shall deposit with Lender on the day monthly installments of principal
or interest, or both, are due under the Note (or on another day designated in writing by Lender),
until the Indebtedness is paid in full, an additional amount sufficient to accumulate with Lender
the entire sum required to pay, when due, the items marked “Collect” below. Lender will not
require the Borrower to make Imposition Deposits with respect to the items marked “Deferred” below.

	 	 	 	[ Collect ] Hazard Insurance premiums or other insurance premiums required
by Lender under Section 19,	 

[ Collect ] Taxes,

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

[  N/A  ] ground rents,

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

The amounts deposited under the preceding sentence are collectively referred to in this Instrument
as the “Imposition Deposits.” The obligations of Borrower for which the Imposition Deposits are
required are collectively referred to in this Instrument as “Impositions.” The amount of the
Imposition Deposits shall be sufficient to enable Lender to pay each Imposition before the last
date upon which such payment may be made without any penalty or interest charge being added.
Lender shall maintain records indicating how much of the monthly Imposition Deposits and how much
of the aggregate Imposition Deposits held by Lender are held for the purpose of paying Taxes,
insurance premiums and each other Imposition.

(b) Imposition Deposits shall be held in an institution (which may be Lender, if Lender is
such an institution) whose deposits or accounts are insured or guaranteed by a federal agency.
Lender shall not be obligated to open additional accounts or deposit Imposition Deposits in
additional institutions when the amount of the Imposition Deposits exceeds the maximum amount of
the federal deposit insurance or guaranty. Lender shall apply the Imposition Deposits to pay
Impositions so long as no Event of Default has occurred and is continuing. Unless applicable law
requires, Lender shall not be required to pay Borrower any interest, earnings or profits on the
Imposition Deposits. As additional security for all of Borrower’s obligations under this
Instrument and the other Loan Documents, Borrower hereby pledges and grants to Lender a security
interest in the Imposition Deposits and all proceeds of, and all interest and dividends on, the
Imposition Deposits. Any amounts deposited with Lender under this Section 7 shall not be trust
funds, nor shall they operate to reduce the Indebtedness, unless applied by Lender for that purpose
under Section 7(e).

(c) If Lender receives a bill or invoice for an Imposition, Lender shall pay the Imposition
from the Imposition Deposits held by Lender. Lender shall have no obligation to pay any Imposition
to the extent it exceeds Imposition Deposits then held by Lender. Lender may pay an Imposition
according to any bill, statement or estimate from the appropriate public office or insurance
company without inquiring into the accuracy of the bill, statement or estimate or into the validity
of the Imposition.

(d) If at any time the amount of the Imposition Deposits held by Lender for payment of a
specific Imposition exceeds the amount reasonably deemed necessary by Lender, the excess shall be
credited against future installments of Imposition Deposits. If at any time the amount of the
Imposition Deposits held by Lender for payment of a specific Imposition is less than the amount
reasonably estimated by Lender to be necessary, Borrower shall pay to Lender the amount of the
deficiency within 15 days after Notice from Lender.

(e) If an Event of Default has occurred and is continuing, Lender may apply any Imposition
Deposits, in any amounts and in any order as Lender determines, in Lender’s discretion, to pay any
Impositions or as a credit against the Indebtedness. Upon payment in full of the Indebtedness,
Lender shall refund to Borrower any Imposition Deposits held by Lender.

(f) If Lender does not collect an Imposition Deposit with respect to an Imposition either
marked “Deferred” in Section 7(a) or pursuant to a separate written waiver by Lender, then on or
before the date each such Imposition is due, or on the date this Instrument requires each such
Imposition to be paid, Borrower must provide Lender with proof of payment of each such Imposition
for which Lender does not require collection of Imposition Deposits. Lender may revoke its
deferral or waiver and require Borrower to deposit with Lender any or all of the Imposition
Deposits listed in Section 7(a), regardless of whether any such item is marked “Deferred” in such
section, upon Notice to Borrower, (i) if Borrower does not timely pay any of the Impositions,
(ii) if Borrower fails to provide timely proof to Lender of such payment, or (iii) at any time
during the existence of an Event of Default.

(g) In the event of a Transfer prohibited by or requiring Lender’s approval under Section 21,
Lender’s waiver of the collection of any Imposition Deposit in this Section 7 may be modified or
rendered void by Lender at Lender’s option by Notice to Borrower and the transferee(s) as a
condition of Lender’s approval of such Transfer.

8. COLLATERAL AGREEMENTS. Borrower shall deposit with Lender such amounts as may be required
by any Collateral Agreement and shall perform all other obligations of Borrower under each
Collateral Agreement.

9. APPLICATION OF PAYMENTS. If at any time Lender receives, from Borrower or otherwise, any
amount applicable to the Indebtedness which is less than all amounts due and payable at such time,
then Lender may apply that payment to amounts then due and payable in any manner and in any order
determined by Lender, in Lender’s discretion. Neither Lender’s acceptance of an amount that is
less than all amounts then due and payable nor Lender’s application of such payment in the manner
authorized shall constitute or be deemed to constitute either a waiver of the unpaid amounts or an
accord and satisfaction. Notwithstanding the application of any such amount to the Indebtedness,
Borrower’s obligations under this Instrument and the Note shall remain unchanged.

10. COMPLIANCE WITH LAWS AND ORGANIZATIONAL DOCUMENTS.

(a) Borrower shall comply with all laws, ordinances, regulations and requirements of any
Governmental Authority and all recorded lawful covenants and agreements relating to or affecting
the Mortgaged Property, including all laws, ordinances, regulations, requirements and covenants
pertaining to health and safety, construction of improvements on the Mortgaged Property, fair
housing, disability accommodation, zoning and land use, and Leases. Borrower also shall comply
with all applicable laws that pertain to the maintenance and disposition of tenant security
deposits.

(b) Borrower shall at all times maintain records sufficient to demonstrate compliance with the
provisions of this Section 10.

(c) Borrower shall take appropriate measures to prevent, and shall not engage in or knowingly
permit, any illegal activities at the Mortgaged Property that could endanger tenants or visitors,
result in damage to the Mortgaged Property, result in forfeiture of the Mortgaged Property, or
otherwise materially impair the lien created by this Instrument or Lender’s interest in the
Mortgaged Property. Borrower represents and warrants to Lender that no portion of the Mortgaged
Property has been or will be purchased with the proceeds of any illegal activity.

(d) Borrower shall at all times comply with all laws, regulations and requirements of any
Governmental Authority relating to Borrower’s formation, continued existence and good standing in
the Property Jurisdiction. Borrower shall at all times comply with its organizational documents,
including but not limited to its partnership agreement (if Borrower is a partnership), its by-laws
(if Borrower is a corporation or housing cooperative corporation or association) or its operating
agreement (if Borrower is an limited liability company, joint venture or tenancy-in-common ). If
Borrower is a housing cooperative corporation or association, Borrower shall at all times maintain
its status as a “cooperative housing corporation” as such term is defined in Section 216(b) of the
Internal revenue Code of 1986, as amended, or any successor statute thereto.

11. USE OF PROPERTY. Unless required by applicable law, Borrower shall not (a) allow changes
in the use for which all or any part of the Mortgaged Property is being used at the time this
Instrument was executed, except for any change in use approved by Lender, (b) convert any
individual dwelling units or common areas to commercial use, (c) initiate a change in the zoning
classification of the Mortgaged Property or acquiesce without Notice to and consent of Lender in a
change in the zoning classification of the Mortgaged Property, (d) establish any condominium or
cooperative regime with respect to the Mortgaged Property, (e) combine all or any part of the
Mortgaged Property with all or any part of a tax parcel which is not part of the Mortgaged
Property, or (f) subdivide or otherwise split any tax parcel constituting all or any part of the
Mortgaged Property without the prior consent of Lender. Notwithstanding anything contained in this
Section to the contrary, if Borrower is a housing cooperative corporation or association, Lender
acknowledges and consents to Borrower’s use of the Mortgaged Property as a housing cooperative.

12. PROTECTION OF LENDER’S SECURITY; INSTRUMENT SECURES FUTURE ADVANCES.

(a) If Borrower fails to perform any of its obligations under this Instrument or any other
Loan Document, or if any action or proceeding is commenced which purports to affect the Mortgaged
Property, Lender’s security or Lender’s rights under this Instrument, including eminent domain,
insolvency, code enforcement, civil or criminal forfeiture, enforcement of Hazardous Materials
Laws, fraudulent conveyance or reorganizations or proceedings involving a bankrupt or decedent,
then Lender at Lender’s option may make such appearances, file such documents, disburse such sums
and take such actions as Lender reasonably deems necessary to perform such obligations of Borrower
and to protect Lender’s interest, including (i) payment of Attorneys’ Fees and Costs, (ii) payment
of fees and out-of-pocket expenses of accountants, inspectors and consultants, (iii) entry upon the
Mortgaged Property to make repairs or secure the Mortgaged Property, (iv) procurement of the
insurance required by Section 19, (v) payment of amounts which Borrower has failed to pay under
Sections 15 and 17, and (vi) advances made by Lender to pay, satisfy or discharge any obligation of
Borrower for the payment of money that is secured by a pre-existing mortgage, deed of trust or
other lien encumbering the Mortgaged Property (a “Prior Lien”).

(b) Any amounts disbursed by Lender under this Section 12, or under any other provision of
this Instrument that treats such disbursement as being made under this Section 12, shall be secured
by this Instrument, shall be added to, and become part of, the principal component of the
Indebtedness, shall be immediately due and payable and shall bear interest from the date of
disbursement until paid at the “Default Rate,” as defined in the Note.

(c) Nothing in this Section 12 shall require Lender to incur any expense or take any action.

13. INSPECTION.

(a) Lender, its agents, representatives, and designees may make or cause to be made entries
upon and inspections of the Mortgaged Property (including environmental inspections and
tests) during normal business hours, or at any other reasonable time, upon reasonable notice to
Borrower if the inspection is to include occupied residential units (which notice need not be in
writing). Notice to Borrower shall not be required in the case of an emergency, as determined in
Lender’s discretion, or when an Event of Default has occurred and is continuing.

(b) If Lender determines that Mold has developed as a result of a water intrusion event or
leak, Lender, at Lender’s discretion, may require that a professional inspector inspect the
Mortgaged Property as frequently as Lender determines is necessary until any issue with Mold and
its cause(s) are resolved to Lender’s satisfaction. Such inspection shall be limited to a visual
and olfactory inspection of the area that has experienced the Mold, water intrusion event or leak.
Borrower shall be responsible for the cost of such professional inspection and any remediation
deemed to be necessary as a result of the professional inspection. After any issue with Mold,
water intrusion or leaks is remedied to Lender’s satisfaction, Lender shall not require a
professional inspection any more frequently than once every three years unless Lender is otherwise
aware of Mold as a result of a subsequent water intrusion event or leak.

(c) If Lender or Loan Servicer determines not to conduct an annual inspection of the Mortgaged
Property, and in lieu thereof Lender requests a certification, Borrower shall be prepared to
provide and must actually provide to Lender a factually correct certification each year that the
annual inspection is waived to the following effect:

Borrower has not received any written complaint, notice, letter or
other written communication from tenants, management agent or
governmental authorities regarding mold, fungus, microbial
contamination or pathogenic organisms (“Mold”) or any activity,
condition, event or omission that causes or facilitates the growth
of Mold on or in any part of the Mortgaged Property or if Borrower
has received any such written complaint, notice, letter or other
written communication that Borrower has investigated and determined
that no Mold activity, condition or event exists or alternatively
has fully and properly remediated such activity, condition, event
or omission in compliance with the Moisture Management Plan for the
Mortgaged Property.

If Borrower is unwilling or unable to provide such certification, Lender may require a
professional inspection of the Mortgaged Property at Borrower’s expense.

14. BOOKS AND RECORDS; FINANCIAL REPORTING.

(a) Borrower shall keep and maintain at all times at the Mortgaged Property or the management
agent’s office, and upon Lender’s request shall make available at the Mortgaged Property (or, at
Borrower’s option, at the management agent’s office), complete and accurate books of account and
records (including copies of supporting bills and invoices) adequate to reflect correctly the
operation of the Mortgaged Property, and copies of all written contracts, Leases, and other
instruments which affect the Mortgaged Property. The books, records, contracts, Leases and other
instruments shall be subject to examination and inspection by Lender at any reasonable time.

(b) Within 120 days after the end of each fiscal year of Borrower, Borrower shall furnish to
Lender a statement of income and expenses for Borrower’s operation of the Mortgaged Property for
that fiscal year, a statement of changes in financial position of Borrower relating to the
Mortgaged Property for that fiscal year and, when requested by Lender, a balance sheet showing all
assets and liabilities of Borrower relating to the Mortgaged Property as of the end of that fiscal
year. If Borrower’s fiscal year is other than the calendar year, Borrower must also submit to
Lender a year-end statement of income and expenses within 120 days after the end of the calendar
year.

(c) Within 120 days after the end of each calendar year, and at any other time, upon Lender’s
request, Borrower shall furnish to Lender each of the following. However, Lender shall not require
any of the following more frequently than quarterly except when there has been an Event of Default
and such Event of Default is continuing, in which case Lender may, upon written request to
Borrower, require Borrower to furnish any of the following more frequently:

	 	(i)	 	a rent schedule for the Mortgaged Property showing the name of
each tenant, and for each tenant, the space occupied, the lease expiration
date, the rent payable for the current month, the date through which rent has
been paid, and any related information requested by Lender;

	 	(ii)	 	an accounting of all security deposits held pursuant to all
Leases, including the name of the institution (if any) and the names and
identification numbers of the accounts (if any) in which such security deposits
are held and the name of the person to contact at such financial institution,
along with any authority or release necessary for Lender to access information
regarding such accounts; and

	 	(iii)	 	a statement that identifies all owners of any interest in
Borrower and any Controlling Entity and the interest held by each (unless
Borrower or any Controlling Entity is a publicly-traded entity in which case
such statement of ownership shall not be required), if Borrower or a
Controlling Entity is a corporation, all officers and directors of Borrower and
the Controlling Entity, and if Borrower or a Controlling Entity is a limited
liability company, all managers who are not members.

(d) At any time upon Lender’s request, Borrower shall furnish to Lender each of the following.
However, Lender shall not require any of the following more frequently than quarterly except when
there has been an Event of Default and such Event of Default is continuing, in which case Lender
may require Borrower to furnish any of the following more frequently:

	 	(i)	 	a balance sheet, a statement of income and expenses for
Borrower and a statement of changes in financial position of Borrower for
Borrower’s most recent fiscal year;

	 	(ii)	 	a quarterly or year-to-date income and expense statement for
the Mortgaged Property; and

	 	(iii)	 	a monthly property management report for the Mortgaged
Property, showing the number of inquiries made and rental applications received
from tenants or prospective tenants and deposits received from tenants and any
other information requested by Lender.

(e) Upon Lender’s request at any time when an Event of Default has occurred and is continuing,
Borrower shall furnish to Lender monthly income and expense statements and rent schedules for the
Mortgaged Property.

(f) An individual having authority to bind Borrower shall certify each of the statements,
schedules and reports required by Sections 14(b) through 14(e) to be complete and accurate. Each
of the statements, schedules and reports required by Sections 14(b) through 14(e) shall be in such
form and contain such detail as Lender may reasonably require. Lender also may require that any of
the statements, schedules or reports listed in Section 14(b) and 14(c)(i) and (ii) be audited at
Borrower’s expense by independent certified public accountants acceptable to Lender, at any time
when an Event of Default has occurred and is continuing or at any time that Lender, in its
reasonable judgment, determines that audited financial statements are required for an accurate
assessment of the financial condition of Borrower or of the Mortgaged Property.

(g) If Borrower fails to provide in a timely manner the statements, schedules and reports
required by Sections 14(b) through (e), Lender shall give Borrower Notice specifying the
statements, schedules and reports required by Section 14(b) through (e) that Borrower has failed to
provide. If Borrower has not provided the required statements, schedules and reports within 10
Business Days following such Notice, then Lender shall have the right to have Borrower’s books and
records audited, at Borrower’s expense, by independent certified public accountants selected by
Lender in order to obtain such statements, schedules and reports, and all related costs and
expenses of Lender shall become immediately due and payable and shall become an additional part of
the Indebtedness as provided in Section 12. Notice to Borrower shall not be required in the case
of an emergency, as determined in Lender’s discretion, or when an Event of Default has occurred and
is continuing.

(h) If an Event of Default has occurred and is continuing, Borrower shall deliver to Lender
upon written demand all books and records relating to the Mortgaged Property or its operation.

(i) Borrower authorizes Lender to obtain a credit report on Borrower at any time.

15. TAXES; OPERATING EXPENSES.

(a) Subject to the provisions of Section 15(c) and Section 15(d), Borrower shall pay, or cause
to be paid, all Taxes when due and before the addition of any interest, fine, penalty or cost for
nonpayment.

(b) Subject to the provisions of Section 15(c), Borrower shall (i) pay the expenses of
operating, managing, maintaining and repairing the Mortgaged Property (including utilities, repairs
and replacements) before the last date upon which each such payment may be made without any penalty
or interest charge being added, and (ii) pay insurance premiums at least 30 days prior to the
expiration date of each policy of insurance, unless applicable law specifies some lesser period.

(c) If Lender is collecting Imposition Deposits, to the extent that Lender holds sufficient
Imposition Deposits for the purpose of paying a specific Imposition, then Borrower shall not be
obligated to pay such Imposition, so long as no Event of Default exists and Borrower has timely
delivered to Lender any bills or premium notices that it has received. If an Event of Default
exists, Lender may exercise any rights Lender may have with respect to Imposition Deposits without
regard to whether Impositions are then due and payable. Lender shall have no liability to Borrower
for failing to pay any Impositions to the extent that (i) any Event of Default has occurred and is
continuing, (ii) insufficient Imposition Deposits are held by Lender at the time an Imposition
becomes due and payable or (iii) Borrower has failed to provide Lender with bills and premium
notices as provided above.

(d) Borrower, at its own expense, may contest by appropriate legal proceedings, conducted
diligently and in good faith, the amount or validity of any Imposition other than insurance
premiums, if (i) Borrower notifies Lender of the commencement or expected commencement of such
proceedings, (ii) the Mortgaged Property is not in danger of being sold or forfeited, (iii) if
Borrower has not already paid the Imposition, Borrower deposits with Lender reserves sufficient to
pay the contested Imposition, if requested by Lender, and (iv) Borrower furnishes whatever
additional security is required in the proceedings or is reasonably requested by Lender.

(e) Borrower shall promptly deliver to Lender a copy of all notices of, and invoices for,
Impositions, and if Borrower pays any Imposition directly, Borrower shall furnish to Lender on or
before the date this Instrument requires such Impositions to be paid, receipts evidencing that such
payments were made.

16. LIENS; ENCUMBRANCES. Borrower acknowledges that, to the extent provided in Section 21,
the grant, creation or existence of any mortgage, deed of trust, deed to secure debt, security
interest or other lien or encumbrance (a “Lien”) on the Mortgaged Property (other than the lien of
this Instrument) or on certain ownership interests in Borrower, whether voluntary, involuntary or
by operation of law, and whether or not such Lien has priority over the lien of this Instrument, is
a “Transfer” which constitutes an Event of Default and subjects Borrower to personal liability
under the Note.

17. PRESERVATION, MANAGEMENT AND MAINTENANCE OF MORTGAGED PROPERTY.

(a) Borrower shall not commit waste or permit impairment or deterioration of the Mortgaged
Property.

(b) Borrower shall not abandon the Mortgaged Property.

(c) Borrower shall restore or repair promptly, in a good and workmanlike manner, any damaged
part of the Mortgaged Property to the equivalent of its original condition, or such other condition
as Lender may approve in writing, whether or not insurance proceeds or condemnation awards are
available to cover any costs of such restoration or repair; however, Borrower shall not be
obligated to perform such restoration or repair if (i) no Event of Default has occurred and is
continuing, and (ii) Lender has elected to apply any available insurance proceeds and/or
condemnation awards to the payment of Indebtedness pursuant to Section 19(h)(ii), (iii), (iv) or
(v), or pursuant to Section 20.

(d) Borrower shall keep the Mortgaged Property in good repair, including the replacement of
Personalty and Fixtures with items of equal or better function and quality.

(e) Borrower shall provide for professional management of the Mortgaged Property by a
residential rental property manager satisfactory to Lender at all times under a contract approved
by Lender in writing, which contract must be terminable upon not more than 30 days notice without
the necessity of establishing cause and without payment of a penalty or termination fee by Borrower
or its successors.

(f) Borrower shall give Notice to Lender of and, unless otherwise directed in writing by
Lender, shall appear in and defend any action or proceeding purporting to affect the Mortgaged
Property, Lender’s security or Lender’s rights under this Instrument. Borrower shall not (and
shall not permit any tenant or other person to) remove, demolish or alter the Mortgaged Property or
any part of the Mortgaged Property, including any removal, demolition or alteration occurring in
connection with a rehabilitation of all or part of the Mortgaged Property, except (i) in connection
with the replacement of tangible Personalty, (ii) if Borrower is a cooperative housing corporation
or association, to the extent permitted with respect to individual dwelling units under the form of
proprietary lease or occupancy agreement and (iii) repairs and replacements in connection with
making an individual unit ready for a new occupant.

(g) Unless otherwise waived by Lender in writing, Borrower must have or must establish and
must adhere to the MMP. If the Borrower is required to have an MMP, the Borrower must keep all MMP
documentation at the Mortgaged Property or at the management agent’s office and available for the
Lender or the Loan Servicer to review during any annual assessment or other inspection of the
Mortgaged Property that is required by Lender.

(h) If Borrower is a housing cooperative corporation or association, until the Indebtedness is
paid in full Borrower shall not reduce the maintenance fees, charges or assessments payable by
shareholders or residents under proprietary leases or occupancy agreements below a level which is
sufficient to pay all expenses of the Borrower, including, without limitation, all operating and
other expenses for the Mortgaged Property and all payments due pursuant to the terms of the Note
and any Loan Documents.

18. ENVIRONMENTAL HAZARDS.

(a) Except for matters described in Section 18(b), Borrower shall not cause or permit any of
the following:

	 	(i)	 	the presence, use, generation, release, treatment, processing,
storage (including storage in above ground and underground storage tanks),
handling, or disposal of any Hazardous Materials on or under the Mortgaged
Property or any other property of Borrower that is adjacent to the Mortgaged
Property;

	 	(ii)	 	the transportation of any Hazardous Materials to, from, or
across the Mortgaged Property;

	 	(iii)	 	any occurrence or condition on the Mortgaged Property or any
other property of Borrower that is adjacent to the Mortgaged Property, which
occurrence or condition is or may be in violation of Hazardous Materials Laws;

	 	(iv)	 	any violation of or noncompliance with the terms of any
Environmental Permit with respect to the Mortgaged Property or any property of
Borrower that is adjacent to the Mortgaged Property; or

	 	(v)	 	any violation or noncompliance with the terms of any O&M
Program as defined in subsection (d).

The matters described in clauses (i) through (v) above, except as otherwise provided in
Section 18(b), are referred to collectively in this Section 18 as “Prohibited Activities or
Conditions.”

(b) Prohibited Activities or Conditions shall not include lawful conditions permitted by an
O&M Program or the safe and lawful use and storage of quantities of (i) pre-packaged supplies,
cleaning materials and petroleum products customarily used in the operation and maintenance of
comparable multifamily properties, (ii) cleaning materials, personal grooming items and other items
sold in pre-packaged containers for consumer use and used by tenants and occupants of residential
dwelling units in the Mortgaged Property; and (iii) petroleum products used in the operation and
maintenance of motor vehicles from time to time located on the Mortgaged Property’s parking areas,
so long as all of the foregoing are used, stored, handled, transported and disposed of in
compliance with Hazardous Materials Laws.

(c) Borrower shall take all commercially reasonable actions (including the inclusion of
appropriate provisions in any Leases executed after the date of this Instrument) to prevent its
employees, agents, and contractors, and all tenants and other occupants from causing or permitting
any Prohibited Activities or Conditions. Borrower shall not lease or allow the sublease or use of
all or any portion of the Mortgaged Property to any tenant or subtenant for nonresidential use by
any user that, in the ordinary course of its business, would cause or permit any Prohibited
Activity or Condition.

(d) As required by Lender, Borrower shall also have established a written operations and
maintenance program with respect to certain Hazardous Materials. Each such operations and
maintenance program and any additional or revised operations and maintenance programs established
for the Mortgaged Property pursuant to this Section 18 must be approved by Lender and shall be
referred to herein as an “O&M Program.” Borrower shall comply in a timely manner with, and cause
all employees, agents, and contractors of Borrower and any other persons present on the Mortgaged
Property to comply with each O&M Program. Borrower shall pay all costs of performance of
Borrower’s obligations under any O&M Program, and Lender’s out-of-pocket costs incurred in
connection with the monitoring and review of each O&M Program and Borrower’s performance shall be
paid by Borrower upon demand by Lender. Any such out-of-pocket costs of Lender that Borrower fails
to pay promptly shall become an additional part of the Indebtedness as provided in Section 12.

(e) Borrower represents and warrants to Lender that, except as previously disclosed by
Borrower to Lender in writing (which written disclosure may be in certain environmental assessments
and other written reports accepted by Lender in connection with the funding of the Indebtedness and
dated prior to the date of this Instrument):

	 	(i)	 	Borrower has not at any time engaged in, caused or permitted
any Prohibited Activities or Conditions on the Mortgaged Property;

	 	(ii)	 	to the best of Borrower’s knowledge after reasonable and
diligent inquiry, no Prohibited Activities or Conditions exist or have existed
on the Mortgaged Property;

	 	(iii)	 	the Mortgaged Property does not now contain any underground
storage tanks, and, to the best of Borrower’s knowledge after reasonable and
diligent inquiry, the Mortgaged Property has not contained any underground
storage tanks in the past. If there is an underground storage tank located on
the Mortgaged Property that has been previously disclosed by Borrower to Lender
in writing, that tank complies with all requirements of Hazardous Materials
Laws;

	 	(iv)	 	to the best of Borrower’s knowledge after reasonable and
diligent inquiry, Borrower has complied with all Hazardous Materials Laws,
including all requirements for notification regarding releases of Hazardous
Materials. Without limiting the generality of the foregoing, Borrower has
obtained all Environmental Permits required for the operation of the Mortgaged
Property in accordance with Hazardous Materials Laws now in effect and all such
Environmental Permits are in full force and effect;

	 	(v)	 	to the best of Borrower’s knowledge after reasonable and
diligent inquiry, no event has occurred with respect to the Mortgaged Property
that constitutes, or with the passing of time or the giving of notice would
constitute, noncompliance with the terms of any Environmental Permit;

	 	(vi)	 	there are no actions, suits, claims or proceedings pending or,
to the best of Borrower’s knowledge after reasonable and diligent inquiry,
threatened that involve the Mortgaged Property and allege, arise out of, or
relate to any Prohibited Activity or Condition; and

	 	(vii)	 	Borrower has not received any written complaint, order, notice
of violation or other communication from any Governmental Authority with regard
to air emissions, water discharges, noise emissions or Hazardous Materials, or
any other environmental, health or safety matters affecting the Mortgaged
Property or any other property of Borrower that is adjacent to the Mortgaged
Property.

(f) Borrower shall promptly notify Lender in writing upon the occurrence of any of the
following events:

	 	(i)	 	Borrower’s discovery of any Prohibited Activity or Condition;

	 	(ii)	 	Borrower’s receipt of or knowledge of any written complaint,
order, notice of violation or other communication from any tenant, management
agent, Governmental Authority or other person with regard to present or future
alleged Prohibited Activities or Conditions, or any other environmental, health
or safety matters affecting the Mortgaged Property or any other property of
Borrower that is adjacent to the Mortgaged Property; or

	 	(iii)	 	Borrower’s breach of any of its obligations under this
Section 18.

Any such notice given by Borrower shall not relieve Borrower of, or result in a waiver of, any
obligation under this Instrument, the Note, or any other Loan Document.

(g) Borrower shall pay promptly the costs of any environmental inspections, tests or audits, a
purpose of which is to identify the extent or cause of or potential for a Prohibited Activity or
Condition (“Environmental Inspections”), required by Lender in connection with any foreclosure or
deed in lieu of foreclosure, or as a condition of Lender’s consent to any Transfer under
Section 21, or required by Lender following a reasonable determination by Lender that Prohibited
Activities or Conditions may exist. Any such costs incurred by Lender (including Attorneys’ Fees
and Costs and the costs of technical consultants whether incurred in connection with any judicial
or administrative process or otherwise) that Borrower fails to pay promptly shall become an
additional part of the Indebtedness as provided in Section 12. As long as (i) no Event of Default
has occurred and is continuing, (ii) Borrower has actually paid for or reimbursed Lender for all
costs of any such Environmental Inspections performed or required by Lender, and (iii) Lender is
not prohibited by law, contract or otherwise from doing so, Lender shall make available to
Borrower, without representation of any kind, copies of Environmental Inspections prepared by third
parties and delivered to Lender. Lender hereby reserves the right, and Borrower hereby expressly
authorizes Lender, to make available to any party, including any prospective bidder at a
foreclosure sale of the Mortgaged Property, the results of any Environmental Inspections made by or
for Lender with respect to the Mortgaged Property. Borrower consents to Lender notifying any party
(either as part of a notice of sale or otherwise) of the results of any Environmental Inspections
made by or for Lender. Borrower acknowledges that Lender cannot control or otherwise assure the
truthfulness or accuracy of the results of any Environmental Inspections and that the release of
such results to prospective bidders at a foreclosure sale of the Mortgaged Property may have a
material and adverse effect upon the amount that a party may bid at such sale. Borrower agrees
that Lender shall have no liability whatsoever as a result of delivering the results to any third
party of any Environmental Inspections made by or for Lender, and Borrower hereby releases and
forever discharges Lender from any and all claims, damages, or causes of action, arising out of,
connected with or incidental to the results of, the delivery of any of Environmental Inspections
made by or for Lender.

(h) If any investigation, site monitoring, containment, clean-up, restoration or other
remedial work (“Remedial Work”) is necessary to comply with any Hazardous Materials Law or order of
any Governmental Authority that has or acquires jurisdiction over the Mortgaged Property or the
use, operation or improvement of the Mortgaged Property, or is otherwise required by Lender as a
consequence of any Prohibited Activity or Condition or to prevent the occurrence of a Prohibited
Activity or Condition, Borrower shall, by the earlier of (i) the applicable deadline required by
Hazardous Materials Law or (ii) 30 days after Notice from Lender demanding such action, begin
performing the Remedial Work, and thereafter diligently prosecute it to completion, and shall in
any event complete the work by the time required by applicable Hazardous Materials Law. If
Borrower fails to begin on a timely basis or diligently prosecute any required Remedial Work,
Lender may, at its option, cause the Remedial Work to be completed, in which case Borrower shall
reimburse Lender on demand for the cost of doing so. Any reimbursement due from Borrower to Lender
shall become part of the Indebtedness as provided in Section 12.

(i) Borrower shall comply with all Hazardous Materials Laws applicable to the Mortgaged
Property. Without limiting the generality of the previous sentence, Borrower shall (i) obtain and
maintain all Environmental Permits required by Hazardous Materials Laws and comply with all
conditions of such Environmental Permits; (ii) cooperate with any inquiry by any Governmental
Authority; and (iii) comply with any governmental or judicial order that arises from any alleged
Prohibited Activity or Condition.

(j) Borrower shall indemnify, hold harmless and defend (i) Lender, (ii) any prior owner or
holder of the Note, (iii) the Loan Servicer, (iv) any prior Loan Servicer, (v) the officers,
directors, shareholders, partners, employees and trustees of any of the foregoing, and (vi) the
heirs, legal representatives, successors and assigns of each of the foregoing (collectively, the
"Indemnitees”) from and against all proceedings, claims, damages, penalties and costs (whether
initiated or sought by Governmental Authorities or private parties), including Attorneys’ Fees and
Costs and remediation costs, whether incurred in connection with any judicial or administrative
process or otherwise, arising directly or indirectly from any of the following:

	 	(i)	 	any breach of any representation or warranty of Borrower in
this Section 18;

	 	(ii)	 	any failure by Borrower to perform any of its obligations under
this Section 18;

	 	(iii)	 	the existence or alleged existence of any Prohibited Activity
or Condition;

	 	(iv)	 	the presence or alleged presence of Hazardous Materials on or
under the Mortgaged Property or in any of the Improvements or on or under any
property of Borrower that is adjacent to the Mortgaged Property; and

	 	(v)	 	the actual or alleged violation of any Hazardous Materials Law.

(k) Counsel selected by Borrower to defend Indemnitees shall be subject to the approval of
those Indemnitees. In any circumstances in which the indemnity under this Section 18 applies,
Lender may employ its own legal counsel and consultants to prosecute, defend or negotiate any claim
or legal or administrative proceeding and Lender, with the prior written consent of Borrower (which
shall not be unreasonably withheld, delayed or conditioned) may settle or compromise any action or
legal or administrative proceeding. However, unless an Event of Default has occurred and is
continuing, or the interests of Borrower and Lender are in conflict, as determined by Lender in its
discretion, Lender shall permit Borrower to undertake the actions referenced in this Section 18 in
accordance with this Section 18(k) and Section 18(l) so long as Lender approves such action, which
approval shall not be unreasonably withheld or delayed. Borrower shall reimburse Lender upon
demand for all costs and expenses incurred by Lender, including all costs of settlements entered
into in good faith, consultants’ fees and Attorneys’ Fees and Costs.

(l) Borrower shall not, without the prior written consent of those Indemnitees who are named
as parties to a claim or legal or administrative proceeding (a “Claim”), settle or compromise the
Claim if the settlement (i) results in the entry of any judgment that does not include as an
unconditional term the delivery by the claimant or plaintiff to Lender of a written release of
those Indemnitees, satisfactory in form and substance to Lender; or (ii) may materially and
adversely affect Lender, as determined by Lender in its discretion.

(m) Borrower’s obligation to indemnify the Indemnitees shall not be limited or impaired by any
of the following, or by any failure of Borrower or any guarantor to receive notice of or
consideration for any of the following:

	 	(i)	 	any amendment or modification of any Loan Document;

	 	(ii)	 	any extensions of time for performance required by any Loan
Document;

	 	(iii)	 	any provision in any of the Loan Documents limiting Lender’s
recourse to property securing the Indebtedness, or limiting the personal
liability of Borrower or any other party for payment of all or any part of the
Indebtedness;

	 	(iv)	 	the accuracy or inaccuracy of any representations and
warranties made by Borrower under this Instrument or any other Loan Document;

	 	(v)	 	the release of Borrower or any other person, by Lender or by
operation of law, from performance of any obligation under any Loan Document;

	 	(vi)	 	the release or substitution in whole or in part of any security
for the Indebtedness; and

	 	(vii)	 	Lender’s failure to properly perfect any lien or security
interest given as security for the Indebtedness.

(n) Borrower shall, at its own cost and expense, do all of the following:

	 	(i)	 	pay or satisfy any judgment or decree that may be entered
against any Indemnitee or Indemnitees in any legal or administrative proceeding
incident to any matters against which Indemnitees are entitled to be
indemnified under this Section 18;

	 	(ii)	 	reimburse Indemnitees for any expenses paid or incurred in
connection with any matters against which Indemnitees are entitled to be
indemnified under this Section 18; and

	 	(iii)	 	reimburse Indemnitees for any and all expenses, including
Attorneys’ Fees and Costs, paid or incurred in connection with the enforcement
by Indemnitees of their rights under this Section 18, or in monitoring and
participating in any legal or administrative proceeding.

(o) The provisions of this Section 18 shall be in addition to any and all other obligations
and liabilities that Borrower may have under applicable law or under other Loan Documents, and each
Indemnitee shall be entitled to indemnification under this Section 18 without regard to whether
Lender or that Indemnitee has exercised any rights against the Mortgaged Property or any other
security, pursued any rights against any guarantor, or pursued any other rights available under the
Loan Documents or applicable law. If Borrower consists of more than one person or entity, the
obligation of those persons or entities to indemnify the Indemnitees under this Section 18 shall be
joint and several. The obligation of Borrower to indemnify the Indemnitees under this Section 18
shall survive any repayment or discharge of the Indebtedness, any foreclosure proceeding, any
foreclosure sale, any delivery of any deed in lieu of foreclosure, and any release of record of the
lien of this Instrument. Notwithstanding the foregoing, if Lender has never been a
mortgagee-in-possession of, or held title to, the Mortgaged Property, Borrower shall have no
obligation to indemnify the Indemnitees under this Section 18 after the date of the release of
record of the lien of this Instrument by payment in full at the Maturity Date or by voluntary
prepayment in full.

19. PROPERTY AND LIABILITY INSURANCE.

(a) Borrower shall keep the Improvements insured at all times against such hazards as Lender
may from time to time require, which insurance shall include but not be limited to coverage against
loss by fire, windstorm and allied perils, general boiler and machinery coverage, and business
interruption including loss of rental value insurance for the Mortgaged Property with extra expense
insurance. If Lender so requires, such insurance shall also include sinkhole insurance, mine
subsidence insurance, earthquake insurance, and, if the Mortgaged Property does not conform to
applicable zoning or land use laws, building ordinance or law coverage. In the event any updated
reports or other documentation are reasonably required by Lender in order to determine whether such
additional insurance is necessary or prudent, Borrower shall pay for all such documentation at its
sole cost and expense. Borrower acknowledges and agrees that Lender’s insurance requirements may
change from time to time throughout the term of the Indebtedness. If any of the Improvements is
located in an area identified by the Federal Emergency Management Agency (or any successor to that
agency) as an area having special flood hazards, Borrower shall insure such Improvements against
loss by flood. All insurance required pursuant to this Section 19(a) shall be referred to as
"Hazard Insurance.” All policies of Hazard Insurance must include a non-contributing,
non-reporting mortgagee clause in favor of, and in a form approved by, Lender.

(b) All premiums on insurance policies required under this Section 19 shall be paid in the
manner provided in Section 7, unless Lender has designated in writing another method of payment.
All such policies shall also be in a form approved by Lender. Borrower shall deliver to Lender a
legible copy of each insurance policy (or duplicate original) and Borrower shall promptly deliver
to Lender a copy of all renewal and other notices received by Borrower with respect to the policies
and all receipts for paid premiums. At least 5 days prior to the expiration date of any insurance
policy, Borrower shall deliver to Lender evidence acceptable to Lender that the policy has been
renewed. If Borrower has not delivered a legible copy of each renewal policy (or a duplicate
original) prior to the expiration date of any insurance policy, Borrower shall deliver a legible
copy of each renewal policy (or a duplicate original) in a form satisfactory to Lender within 120
days after the expiration date of the original policy.

(c) Borrower shall maintain at all times commercial general liability insurance, workers’
compensation insurance and such other liability, errors and omissions and fidelity insurance
coverages as Lender may from time to time require. All policies for general liability insurance
must contain a standard additional insured provision, in favor of, and in a form approved by,
Lender.

(d) All insurance policies and renewals of insurance policies required by this Section 19
shall be in such amounts and for such periods as Lender may from time to time require, and shall be
issued by insurance companies satisfactory to Lender.

(e) Borrower shall comply with all insurance requirements and shall not permit any condition
to exist on the Mortgaged Property that would invalidate any part of any insurance coverage that
this Instrument requires Borrower to maintain.

(f) In the event of loss, Borrower shall give immediate written notice to the insurance
carrier and to Lender. Borrower hereby authorizes and appoints Lender as attorney-in-fact for
Borrower to make proof of loss, to adjust and compromise any claims under policies of Hazard
Insurance, to appear in and prosecute any action arising from such Hazard Insurance policies, to
collect and receive the proceeds of Hazard Insurance, and to deduct from such proceeds Lender’s
expenses incurred in the collection of such proceeds. This power of attorney is coupled with an
interest and therefore is irrevocable. However, nothing contained in this Section 19 shall require
Lender to incur any expense or take any action. Lender may, at Lender’s option, (i) require a
“repair or replacement” settlement, in which case the proceeds will be used to reimburse Borrower
for the cost of restoring and repairing the Mortgaged Property to the equivalent of its original
condition or to a condition approved by Lender (the “Restoration”), or (ii) require an “actual cash
value” settlement in which case the proceeds may be applied to the payment of the Indebtedness,
whether or not then due. To the extent Lender determines to require a repair or replacement
settlement and apply insurance proceeds to Restoration, Lender shall apply the proceeds in
accordance with Lender’s then-current policies relating to the restoration of casualty damage on
similar multifamily properties.

(g) Notwithstanding any provision to the contrary in this Section 19, as long as no Event of
Default, or any event which, with the giving of Notice or the passage of time, or both, would
constitute an Event of Default, has occurred and is continuing,

	 	(i)	 	in the event of a casualty resulting in damage to the Mortgaged
Property which will cost $10,000 or less to repair, the Borrower shall have the
sole right to make proof of loss, adjust and compromise the claim and collect
and receive any proceeds directly without the approval or prior consent of the
Lender so long as the insurance proceeds are used solely for the Restoration of
the Mortgaged Property; and

	 	(ii)	 	in the event of a casualty resulting in damage to the Mortgaged
Property which will cost more than $10,000 but less than $50,000 to repair, the
Borrower is authorized to make proof of loss and adjust and compromise the
claim without the prior consent of Lender, and Lender shall hold the applicable
insurance proceeds to be used to reimburse Borrower for the cost of Restoration
of the Mortgaged Property and shall not apply such proceeds to the payment of
sums due under this Instrument.

(h) Lender will have the right to exercise its option to apply insurance proceeds to the
payment of the Indebtedness only if Lender determines that at least one of the following conditions
is met:

	 	(i)	 	an Event of Default (or any event, which, with the giving of
Notice or the passage of time, or both, would constitute an Event of
Default) has occurred and is continuing;

	 	(ii)	 	Lender determines, in its discretion, that there will not be
sufficient funds from insurance proceeds, anticipated contributions of Borrower
of its own funds or other sources acceptable to Lender to complete the
Restoration;

	 	(iii)	 	Lender determines, in its discretion, that the rental income
from the Mortgaged Property after completion of the Restoration will not be
sufficient to meet all operating costs and other expenses, Imposition Deposits,
deposits to reserves and loan repayment obligations relating to the Mortgaged
Property;

	 	(iv)	 	Lender determines, in its discretion, that the Restoration will
not be completed at least one year before the Maturity Date (or six months
before the Maturity Date if Lender determines in its discretion that re-leasing
of the Mortgaged Property will be completed within such six-month period); or

	 	(v)	 	Lender determines that the Restoration will not be completed
within one year after the date of the loss or casualty.

(i) If the Mortgaged Property is sold at a foreclosure sale or Lender acquires title to the
Mortgaged Property, Lender shall automatically succeed to all rights of Borrower in and to any
insurance policies and unearned insurance premiums and in and to the proceeds resulting from any
damage to the Mortgaged Property prior to such sale or acquisition.

(j) Unless Lender otherwise agrees in writing, any application of any insurance proceeds to
the Indebtedness shall not extend or postpone the due date of any monthly installments referred to
in the Note, Section 7 of this Instrument or any Collateral Agreement, or change the amount of such
installments.

(k) Borrower agrees to execute such further evidence of assignment of any insurance proceeds
as Lender may require.

20. CONDEMNATION.

(a) Borrower shall promptly notify Lender in writing of any action or proceeding or notice
relating to any proposed or actual condemnation or other taking, or conveyance in lieu thereof, of
all or any part of the Mortgaged Property, whether direct or indirect (a “Condemnation”). Borrower
shall appear in and prosecute or defend any action or proceeding relating to any Condemnation
unless otherwise directed by Lender in writing. Borrower authorizes and appoints Lender as
attorney-in-fact for Borrower to commence, appear in and prosecute, in Lender’s or Borrower’s name,
any action or proceeding relating to any Condemnation and to settle or compromise any claim in
connection with any Condemnation, after consultation with Borrower and consistent with commercially
reasonable standards of a prudent lender. This power of attorney is coupled with an interest and
therefore is irrevocable. However, nothing contained in this Section 20 shall require Lender to
incur any expense or take any action. Borrower hereby transfers and assigns to Lender all right,
title and interest of Borrower in and to any award or payment with respect to (i) any Condemnation,
or any conveyance in lieu of Condemnation, and (ii) any damage to the Mortgaged Property caused by
governmental action that does not result in a Condemnation.

(b) Lender may apply such awards or proceeds, after the deduction of Lender’s expenses
incurred in the collection of such amounts (including Attorneys’ Fees and Costs) at Lender’s
option, to the restoration or repair of the Mortgaged Property or to the payment of the
Indebtedness, with the balance, if any, to Borrower. Unless Lender otherwise agrees in writing,
any application of any awards or proceeds to the Indebtedness shall not extend or postpone the due
date of any monthly installments referred to in the Note, Section 7 of this Instrument or any
Collateral Agreement, or change the amount of such installments. Borrower agrees to execute such
further evidence of assignment of any awards or proceeds as Lender may require.

21. TRANSFERS OF THE MORTGAGED PROPERTY OR INTERESTS IN BORROWER. [RIGHT TO UNLIMITED
TRANSFERS — WITH LENDER APPROVAL].

(a) "Transfer” means

	 	(i)	 	a sale, assignment, transfer or other disposition (whether
voluntary, involuntary or by operation of law);

	 	(ii)	 	the granting, creating or attachment of a lien, encumbrance or
security interest (whether voluntary, involuntary or by operation of law);

	 	(iii)	 	the issuance or other creation of an ownership interest in a
legal entity, including a partnership interest, interest in a limited liability
company or corporate stock;

	 	(iv)	 	the withdrawal, retirement, removal or involuntary resignation
of a partner in a partnership or a member or manager in a limited liability
company; or

	 	(v)	 	the merger, dissolution, liquidation, or consolidation of a
legal entity or the reconstitution of one type of legal entity into another
type of legal entity.

For purposes of defining the term “Transfer,” the term “partnership” shall mean a general
partnership, a limited partnership, a joint venture and a limited liability partnership, and the
term “partner” shall mean a general partner, a limited partner and a joint venturer.

(b) “Transfer” does not include

	 	(i)	 	a conveyance of the Mortgaged Property at a judicial or
non-judicial foreclosure sale under this Instrument,

	 	(ii)	 	the Mortgaged Property becoming part of a bankruptcy estate by
operation of law under the United States Bankruptcy Code, or

	 	(iii)	 	a lien against the Mortgaged Property for local taxes and/or
assessments not then due and payable.

(c) The occurrence of any of the following Transfers shall not constitute an Event of Default
under this Instrument, notwithstanding any provision of Section 21(e) to the contrary:

	 	(i)	 	a Transfer to which Lender has consented;

	 	(ii)	 	a Transfer that occurs in accordance with Section 21(d);

	 	(iii)	 	the grant of a leasehold interest in an individual dwelling
unit for a term of two years or less not containing an option to purchase;

	 	(iv)	 	a Transfer of obsolete or worn out Personalty or Fixtures that
are contemporaneously replaced by items of equal or better function and
quality, which are free of liens, encumbrances and security interests other
than those created by the Loan Documents or consented to by Lender;

	 	(v)	 	the creation of a mechanic’s, materialman’s, or judgment lien
against the Mortgaged Property, which is released of record or otherwise
remedied to Lender’s satisfaction within 60 days of the date of creation;

	 	(vi)	 	if Borrower is a housing cooperative corporation or
association, the Transfer of more than 49 percent of the shares in the housing
cooperative or the assignment of more than 49 percent of the occupancy
agreements or leases relating thereto by tenant shareholders of the housing
cooperative or association to other tenant shareholders; and

	 	(vii)	 	any Transfer of an interest in Borrower or any interest in a
Controlling Entity (which, if such Controlling Entity were Borrower, would
result in an Event of Default) listed in (A) through (F) below (a “Preapproved
Transfer”), under the terms and conditions listed as items (1) through (7)
below:

	 	(A)	 	a sale or transfer to one or more of the
transferor’s immediate family members; or

	 	(B)	 	a sale or transfer to any trust having as its
sole beneficiaries the transferor and/or one or more of the
transferor’s immediate family members; or

	 	(C)	 	a sale or transfer from a trust to any one or
more of its beneficiaries who are immediate family members of the
transferor ; or

	 	(D)	 	the substitution or replacement of the trustee
of any trust with a trustee who is an immediate family member of the
transferor; or

	 	(E)	 	a sale or transfer to an entity owned and
controlled by the transferor or the transferor’s immediate family
members; or

	 	(F)	 	a sale or transfer to an individual or entity
that has an existing interest in the Borrower or in a Controlling
Entity.

	 	(1)	 	Borrower shall provide Lender
with prior written Notice of the proposed Preapproved Transfer,
which Notice must be accompanied by a non-refundable review fee
in the amount of $3,000.00.

	 	(2)	 	For the purposes of these
Preapproved Transfers, a transferor’s immediate family members
will be deemed to include a spouse, parent, child or grandchild
of such transferor.

	 	(3)	 	Either directly or indirectly,
[See Exhibit B] shall retain at all times a managing interest in
the Borrower.

	 	(4)	 	At the time of the proposed
Preapproved Transfer, no Event of Default shall have occurred
and be continuing and no event or condition shall have occurred
and be continuing that, with the giving of Notice or the passage
of time, or both, would become an Event of Default.

	 	(5)	 	Lender shall be entitled to
collect all costs, including the cost of all title searches,
title insurance and recording costs, and all Attorneys’ Fees and
Costs.

	 	(6)	 	Lender shall not be entitled to
collect a transfer fee as a result of these Preapproved
Transfers.

	 	(7)	 	In the event of a Transfer
prohibited by or requiring Lender’s approval under this
Section 21, this Section (c)(vii) may be modified or rendered
void by Lender at Lender’s option by Notice to Borrower and the
transferee(s), as a condition of Lender’s consent.

(d) The occurrence of any of the following Transfers shall not constitute an Event of Default
under this Instrument, provided that Borrower has notified Lender in writing within 30 days
following the occurrence of any of the following, and such Transfer does not constitute an Event of
Default under any other Section of this Instrument:

	 	(i)	 	a change of the Borrower’s name, provided that UCC financing
statements and/or amendments sufficient to continue the perfection of Lender’s
security interest have been properly filed and copies have been delivered to
Lender;

	 	(ii)	 	a change of the form of the Borrower not involving a transfer
of the Borrower’s assets and not resulting in any change in liability of any
Initial Owner, provided that UCC financing statements and/or amendments
sufficient to continue the perfection of Lender’s security interest have been
properly filed and copies have been delivered to Lender;

	 	(iii)	 	the merger of the Borrower with another entity when the
Borrower is the surviving entity;

	 	(iv)	 	a Transfer that occurs by devise, descent, or by operation of
law upon the death of a natural person; and

	 	(v)	 	the grant of an easement, if before the grant Lender determines
that the easement will not materially affect the operation or value of the
Mortgaged Property or Lender’s interest in the Mortgaged Property, and Borrower
pays to Lender, upon demand, all costs and expenses, including Attorneys’ Fees
and Costs, incurred by Lender in connection with reviewing Borrower’s request.

(e) The occurrence of any of the following Transfers shall constitute an Event of Default
under this Instrument:

	 	(i)	 	a Transfer of all or any part of the Mortgaged Property or any
interest in the Mortgaged Property;

	 	(ii)	 	if Borrower is a limited partnership, a Transfer of (A) any
general partnership interest, or (B) limited partnership interests in Borrower
that would cause the Initial Owners of Borrower to own less than a Controlling
Interest of all limited partnership interests in Borrower;

	 	(iii)	 	if Borrower is a general partnership or a joint venture, a
Transfer of any general partnership or joint venture interest in Borrower;

	 	(iv)	 	if Borrower is a limited liability company, (A) a Transfer of
any membership interest in Borrower which would cause the Initial Owners to own
less than a Controlling Interest of all the membership interests in Borrower,
(B) a Transfer of any membership or other interest of a manager in Borrower
that results in a change of manager or (C) a change in a nonmember manager;

	 	(v)	 	if Borrower is a corporation (A) the Transfer of any voting
stock in Borrower which would cause the Initial Owners to own less than a
Controlling Interest of any class of voting stock in Borrower or (B) if the
outstanding voting stock in Borrower is held by 100 or more shareholders, one
or more Transfers by a single transferor within a 12-month period affecting an
aggregate of 5 percent or more of that stock;

	 	(vi)	 	if Borrower is a trust, (A) a Transfer of any beneficial
interest in Borrower which would cause the Initial Owners to own less than a
Controlling Interest of all the beneficial interests in Borrower, (B) the
termination or revocation of the trust, or (C) the removal, appointment or
substitution of a trustee of Borrower;

	 	(vii)	 	if Borrower is a limited liability partnership, (A) a Transfer
of any partnership interest in Borrower which would cause the Initial Owners to
own less than a Controlling Interest of all partnership interests in Borrower,
or (B) a transfer of any partnership or other interest of a managing partner in
Borrower that results in a change of manager; and

	 	(viii)	 	a Transfer of any interest in a Controlling Entity which, if such Controlling
Entity were Borrower, would result in an Event of Default under any of
Sections 21(e)(i) through (vii) above.

Lender shall not be required to demonstrate any actual impairment of its security or any increased
risk of default in order to exercise any of its remedies with respect to an Event of Default under
this Section 21.

(f) Lender shall consent, without any adjustment to the rate at which the Indebtedness secured
by this Instrument bears interest or to any other economic terms of the Indebtedness set forth in
the Note, to a Transfer that would otherwise violate this Section 21 if, prior to the Transfer,
Borrower has satisfied each of the following requirements:

	 	(i)	 	the submission to Lender of all information required by Lender
to make the determination required by this Section 21(f);

	 	(ii)	 	the absence of any Event of Default;

	 	(iii)	 	the transferee meets all of the eligibility, credit,
management and other standards (including but not limited to any standards with
respect to previous relationships between Lender and the transferee)
customarily applied by Lender at the time of the proposed Transfer to the
approval of borrowers in connection with the origination or purchase of similar
mortgages on multifamily properties;

	 	(iv)	 	the transferee’s organization, credit and experience in the
management of similar properties are deemed by the Lender, in its discretion,
to be appropriate to the overall structure and documentation of the existing
financing;

	 	(v)	 	the Mortgaged Property, at the time of the proposed Transfer,
meets all standards as to its physical condition, occupancy, net operating
income and the collection of reserves that are customarily applied by Lender at
the time of the proposed Transfer to the approval of properties in connection
with the origination or purchase of similar mortgages on multifamily
properties;

	 	(vi)	 	in the case of a Transfer of all or any part of the Mortgaged
Property, (A) the execution by the transferee of Lender’s then-standard
assumption agreement that, among other things, requires the transferee to
perform all obligations of Borrower set forth in the Note, this Instrument and
any other Loan Documents, and may require that the transferee comply with any
provisions of this Instrument or any other Loan Document which previously may
have been waived or modified by Lender, (B) if Lender requires, the transferee
causes one or more individuals or entities acceptable to Lender to execute and
deliver to Lender a guaranty in a form acceptable to Lender, and (C) the
transferee executes such additional Collateral Agreements as Lender may
require;

	 	(vii)	 	in the case of a Transfer of any interest in a Controlling
Entity, if a guaranty has been executed and delivered in connection with the
Note, this Instrument or any of the other Loan Documents, the Borrower causes
one or more individuals or entities acceptable to Lender to execute and deliver
to Lender a guaranty in a form acceptable to Lender; and

	 	(viii)	 	Lender’s receipt of all of the following:

	 	(A)	 	a review fee in the amount of $3,000.00;

	 	(B)	 	a transfer fee in an amount equal to
one percent (1%) of the unpaid principal balance of the Indebtedness
immediately before the applicable Transfer; and

	 	(C)	 	the amount of Lender’s out-of-pocket costs
(including reasonable Attorneys’ Fees and Costs) incurred in reviewing
the Transfer request.

22. EVENTS OF DEFAULT. The occurrence of any one or more of the following shall constitute an
Event of Default under this Instrument:

(a) any failure by Borrower to pay or deposit when due any amount required by the Note, this
Instrument or any other Loan Document;

(b) any failure by Borrower to maintain the insurance coverage required by Section 19;

(c) any failure by Borrower to comply with the provisions of Section 33;

(d) fraud or material misrepresentation or material omission by Borrower, any of its officers,
directors, trustees, general partners or managers or any guarantor in connection with (i) the
application for or creation of the Indebtedness, (ii) any financial statement, rent schedule, or
other report or information provided to Lender during the term of the Indebtedness, or (iii) any
request for Lender’s consent to any proposed action, including a request for disbursement of funds
under any Collateral Agreement;

(e) any failure by Borrower to comply with the provisions of Section 20;

(f) any Event of Default under Section 21;

(g) the commencement of a forfeiture action or proceeding, whether civil or criminal, which,
in Lender’s reasonable judgment, could result in a forfeiture of the Mortgaged Property or
otherwise materially impair the lien created by this Instrument or Lender’s interest in the
Mortgaged Property;

(h) any failure by Borrower to perform any of its obligations under this Instrument (other
than those specified in Sections 22(a) through (g)), as and when required, which continues for a
period of 30 days after Notice of such failure by Lender to Borrower. However, if Borrower’s
failure to perform its obligations as described in this Section 22(h) is of the nature that it
cannot be cured within the 30 day grace period but reasonably could be cured within 90 days, then
Borrower shall have additional time as determined by Lender in its discretion, not to exceed an
additional 60 days, in which to cure such default, provided that Borrower has diligently commenced
to cure such default during the 30-day grace period and diligently pursues the cure of such
default. However, no such Notice or grace periods shall apply in the case of any such failure
which could, in Lender’s judgment, absent immediate exercise by Lender of a right or remedy under
this Instrument, result in harm to Lender, impairment of the Note or this Instrument or any other
security given under any other Loan Document;

(i) any failure by Borrower to perform any of its obligations as and when required under any
Loan Document other than this Instrument which continues beyond the applicable cure period, if any,
specified in that Loan Document;

(j) any exercise by the holder of any other debt instrument secured by a mortgage, deed of
trust or deed to secure debt on the Mortgaged Property of a right to declare all amounts due under
that debt instrument immediately due and payable;

(k) any voluntary filing by Borrower for bankruptcy protection under the United States
Bankruptcy Code or any reorganization, receivership, insolvency proceeding or other similar
proceeding pursuant to any other federal or state law affecting debtor and creditor rights to which
Borrower voluntarily becomes subject, or the commencement of any involuntary case against Borrower
by any creditor (other than Lender) of Borrower pursuant to the United States Bankruptcy Code or
other federal or state law affecting debtor and creditor rights which case is not dismissed or
discharged within 90 days after filing; and

(l) any representations and warranties by Borrower in this Instrument which is false or
misleading in any material respect.

23. REMEDIES CUMULATIVE. Each right and remedy provided in this Instrument is distinct from
all other rights or remedies under this Instrument or any other Loan Document or afforded by
applicable law, and each shall be cumulative and may be exercised concurrently, independently, or
successively, in any order.

24. FORBEARANCE.

(a) Lender may (but shall not be obligated to) agree with Borrower, from time to time, and
without giving notice to, or obtaining the consent of, or having any effect upon the obligations
of, any guarantor or other third party obligor, to take any of the following actions: extend the
time for payment of all or any part of the Indebtedness; reduce the payments due under this
Instrument, the Note, or any other Loan Document; release anyone liable for the payment of any
amounts under this Instrument, the Note, or any other Loan Document; accept a renewal of the Note;
modify the terms and time of payment of the Indebtedness; join in any extension or subordination
agreement; release any Mortgaged Property; take or release other or additional security; modify the
rate of interest or period of amortization of the Note or change the amount of the monthly
installments payable under the Note; and otherwise modify this Instrument, the Note, or any other
Loan Document.

(b) Any forbearance by Lender in exercising any right or remedy under the Note, this
Instrument, or any other Loan Document or otherwise afforded by applicable law, shall not be a
waiver of or preclude the exercise of any other right or remedy, or the subsequent exercise of any
right or remedy. The acceptance by Lender of payment of all or any part of the Indebtedness after
the due date of such payment, or in an amount which is less than the required payment, shall not be
a waiver of Lender’s right to require prompt payment when due of all other payments on account of
the Indebtedness or to exercise any remedies for any failure to make prompt payment. Enforcement by
Lender of any security for the Indebtedness shall not constitute an election by Lender of remedies
so as to preclude the exercise of any other right available to Lender. Lender’s receipt of any
awards or proceeds under Sections 19 and 20 shall not operate to cure or waive any Event of
Default.

25. LOAN CHARGES. If any applicable law limiting the amount of interest or other charges
permitted to be collected from Borrower is interpreted so that any charge provided for in any Loan
Document, whether considered separately or together with other charges levied in connection with
any other Loan Document, violates that law, and Borrower is entitled to the benefit of that law,
that charge is hereby reduced to the extent necessary to eliminate that violation. The amounts, if
any, previously paid to Lender in excess of the permitted amounts shall be applied by Lender to
reduce the principal of the Indebtedness. For the purpose of determining whether any applicable
law limiting the amount of interest or other charges permitted to be collected from Borrower has
been violated, all Indebtedness which constitutes interest, as well as all other charges levied in
connection with the Indebtedness which constitute interest, shall be deemed to be allocated and
spread over the stated term of the Note. Unless otherwise required by applicable law, such
allocation and spreading shall be effected in such a manner that the rate of interest so computed
is uniform throughout the stated term of the Note.

26. WAIVER OF STATUTE OF LIMITATIONS. Borrower hereby waives the right to assert any statute
of limitations as a bar to the enforcement of the lien of this Instrument or to any action brought
to enforce any Loan Document.

27. WAIVER OF MARSHALLING. Notwithstanding the existence of any other security interests in
the Mortgaged Property held by Lender or by any other party, Lender shall have the right to
determine the order in which any or all of the Mortgaged Property shall be subjected to the
remedies provided in this Instrument, the Note, any other Loan Document or applicable law. Lender
shall have the right to determine the order in which any or all portions of the Indebtedness are
satisfied from the proceeds realized upon the exercise of such remedies. Borrower and any party
who now or in the future acquires a security interest in the Mortgaged Property and who has actual
or constructive notice of this Instrument waives any and all right to require the marshalling of
assets or to require that any of the Mortgaged Property be sold in the inverse order of alienation
or that any of the Mortgaged Property be sold in parcels or as an entirety in connection with the
exercise of any of the remedies permitted by applicable law or provided in this Instrument.

28. FURTHER ASSURANCES. Borrower shall execute, acknowledge, and deliver, at its sole cost
and expense, all further acts, deeds, conveyances, assignments, estoppel certificates, financing
statements or amendments, transfers and assurances as Lender may require from time to time in order
to better assure, grant, and convey to Lender the rights intended to be granted, now or in the
future, to Lender under this Instrument and the Loan Documents.

29. ESTOPPEL CERTIFICATE. Within 10 days after a request from Lender, Borrower shall deliver
to Lender a written statement, signed and acknowledged by Borrower, certifying to Lender or any
person designated by Lender, as of the date of such statement, (i) that the Loan Documents are
unmodified and in full force and effect (or, if there have been modifications, that the Loan
Documents are in full force and effect as modified and setting forth such modifications); (ii) the
unpaid principal balance of the Note; (iii) the date to which interest under the Note has been
paid; (iv) that Borrower is not in default in paying the Indebtedness or in performing or observing
any of the covenants or agreements contained in this Instrument or any of the other Loan Documents
(or, if the Borrower is in default, describing such default in reasonable detail); (v) whether or
not there are then existing any setoffs or defenses known to Borrower against the enforcement of
any right or remedy of Lender under the Loan Documents; and (vi) any additional facts requested by
Lender.

30. GOVERNING LAW; CONSENT TO JURISDICTION AND VENUE.

(a) This Instrument, and any Loan Document which does not itself expressly identify the law
that is to apply to it, shall be governed by the laws of the jurisdiction in which the Land is
located (the “Property Jurisdiction”).

(b) Borrower agrees that any controversy arising under or in relation to the Note, this
Instrument, or any other Loan Document may be litigated in the Property Jurisdiction. The state
and federal courts and authorities with jurisdiction in the Property Jurisdiction shall have
jurisdiction over all controversies that shall arise under or in relation to the Note, any security
for the Indebtedness, or any other Loan Document. Borrower irrevocably consents to service,
jurisdiction, and venue of such courts for any such litigation and waives any other venue to which
it might be entitled by virtue of domicile, habitual residence or otherwise. However, nothing in
this Section 30 is intended to limit Lender’s right to bring any suit, action or proceeding
relating to matters under this Instrument in any court of any other jurisdiction.

31. NOTICE.

(a) All Notices, demands and other communications (“Notice”) under or concerning this
Instrument shall be in writing. Each Notice shall be addressed to the intended recipient at its
address set forth in this Instrument, and shall be deemed given on the earliest to occur of (i) the
date when the Notice is received by the addressee; (ii) the first Business Day after the Notice is
delivered to a recognized overnight courier service, with arrangements made for payment of charges
for next Business Day delivery; or (iii) the third Business Day after the Notice is deposited in
the United States mail with postage prepaid, certified mail, return receipt requested.

(b) Any party to this Instrument may change the address to which Notices intended for it are
to be directed by means of Notice given to the other party in accordance with this Section 31.
Each party agrees that it will not refuse or reject delivery of any Notice given in accordance with
this Section 31, that it will acknowledge, in writing, the receipt of any Notice upon request by
the other party and that any Notice rejected or refused by it shall be deemed for purposes of this
Section 31 to have been received by the rejecting party on the date so refused or rejected, as
conclusively established by the records of the U.S. Postal Service or the courier service.

(c) Any Notice under the Note and any other Loan Document that does not specify how Notices
are to be given shall be given in accordance with this Section 31.

32. SALE OF NOTE; CHANGE IN SERVICER; LOAN SERVICING. The Note or a partial interest in the
Note (together with this Instrument and the other Loan Documents) may be sold one or more times
without prior Notice to Borrower. A sale may result in a change of the Loan Servicer. There also
may be one or more changes of the Loan Servicer unrelated to a sale of the Note. If there is a
change of the Loan Servicer, Borrower will be given Notice of the change. All actions regarding the
servicing of the loan evidenced by the Note, including the collection of payments, the giving and
receipt of Notice, inspections of the Mortgaged Property, inspections of books and records, and the
granting of consents and approvals, may be taken by the Loan Servicer unless Borrower receives
Notice to the contrary. If Borrower receives conflicting Notices regarding the identity of the
Loan Servicer or any other subject, any such Notice from Lender shall govern.

33. SINGLE ASSET BORROWER. Until the Indebtedness is paid in full, Borrower (a) shall not own
any real or personal property other than the Mortgaged Property and personal property related to
the operation and maintenance of the Mortgaged Property; (b) shall not operate any business other
than the management and operation of the Mortgaged Property; and (c) shall not maintain its assets
in a way difficult to segregate and identify.

34. SUCCESSORS AND ASSIGNS BOUND. This Instrument shall bind, and the rights granted by this
Instrument shall inure to, the respective successors and assigns of Lender and Borrower. However,
a Transfer not permitted by Section 21 shall be an Event of Default.

35. JOINT AND SEVERAL LIABILITY. If more than one person or entity signs this Instrument as
Borrower, the obligations of such persons and entities shall be joint and several.

36. RELATIONSHIP OF PARTIES; NO THIRD PARTY BENEFICIARY.

(a) The relationship between Lender and Borrower shall be solely that of creditor and debtor,
respectively, and nothing contained in this Instrument shall create any other relationship between
Lender and Borrower.

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

37. SEVERABILITY; AMENDMENTS. The invalidity or unenforceability of any provision of this
Instrument shall not affect the validity or enforceability of any other provision, and all other
provisions shall remain in full force and effect. This Instrument contains the entire agreement
among the parties as to the rights granted and the obligations assumed in this Instrument. This
Instrument may not be amended or modified except by a writing signed by the party against whom
enforcement is sought; provided, however, that in the event of a Transfer prohibited by or
requiring Lender’s approval under Section 21, any or some or all of the Modifications to Instrument
set forth in Exhibit B (if any) may be modified or rendered void by Lender at Lender’s option by
Notice to Borrower and the transferee(s).

38. CONSTRUCTION. The captions and headings of the Sections of this Instrument are for
convenience only and shall be disregarded in construing this Instrument. Any reference in this
Instrument to an “Exhibit” or a “Section” shall, unless otherwise explicitly provided, be construed
as referring, respectively, to an Exhibit attached to this Instrument or to a Section of this
Instrument. All Exhibits attached to or referred to in this Instrument are incorporated by
reference into this Instrument. Any reference in this Instrument to a statute or regulation shall
be construed as referring to that statute or regulation as amended from time to time. Use of the
singular in this Agreement includes the plural and use of the plural includes the singular. As
used in this Instrument, the term “including” means “including, but not limited to.”

39. DISCLOSURE OF INFORMATION. Lender may furnish information regarding Borrower or the
Mortgaged Property to third parties with an existing or prospective interest in the servicing,
enforcement, evaluation, performance, purchase or securitization of the Indebtedness, including but
not limited to trustees, master servicers, special servicers, rating agencies, and organizations
maintaining databases on the underwriting and performance of multifamily mortgage loans, as well as
governmental regulatory agencies having regulatory authority over Lender. Borrower irrevocably
waives any and all rights it may have under applicable law to prohibit such disclosure, including
but not limited to any right of privacy.

40. NO CHANGE IN FACTS OR CIRCUMSTANCES. Borrower warrants that (a) all information in the
application for the loan submitted to Lender (the “Loan Application”) and in all financial
statements, rent schedules, reports, certificates and other documents submitted in connection with
the Loan Application are complete and accurate in all material respects; and (b) there has been no
material adverse change in any fact or circumstance that would make any such information incomplete
or inaccurate.

41. SUBROGATION. If, and to the extent that, the proceeds of the loan evidenced by the Note,
or subsequent advances under Section 12, are used to pay, satisfy or discharge a Prior Lien, such
loan proceeds or advances shall be deemed to have been advanced by Lender at Borrower’s request,
and Lender shall automatically, and without further action on its part, be subrogated to the
rights, including lien priority, of the owner or holder of the obligation secured by the Prior
Lien, whether or not the Prior Lien is released.

42. ADJUSTABLE RATE MORTGAGE — THIRD PARTY CAP AGREEMENT “CAP COLLATERAL.”

(a) If the Note provides for interest to accrue at an adjustable or variable interest rate
(other than during the “Extension Period,” as defined in the Note, if applicable), then the
definition of “Mortgaged Property” shall include the “Cap Collateral.” The “Cap Collateral” shall
mean

	 	(i)	 	any interest rate cap agreement, interest rate swap agreement,
or other interest rate-hedging contract or agreement obtained by Borrower as a
requirement of any Loan Document or as a condition of Lender’s making the Loan
(a “Cap Agreement”);

	 	(ii)	 	any and all moneys (collectively, “Cap Payments”) payable
pursuant to any Cap Agreement by the interest rate cap provider or other
counterparty to a Cap Agreement or any guarantor of the obligations of any such
cap provider or counterparty (a “Cap Provider”);

	 	(iii)	 	all rights of Borrower under any Cap Agreement and all rights
of Borrower to all Cap Payments, including contract rights and general
intangibles, whether existing now or arising after the date of this Instrument;

	 	(iv)	 	all rights, liens and security interests or guaranties granted
by a Cap Provider or any other person to secure or guaranty payment of any Cap
Payment whether existing now or granted after the date of this Instrument;

	 	(v)	 	all documents, writings, books, files, records and other
documents arising from or relating to any of the foregoing, whether existing
now or created after the date of this Instrument; and

	 	(vi)	 	all cash and non-cash proceeds and products of (ii) – (v)
above.

(b) As additional security for Borrower’s obligation under the Loan Documents, Borrower hereby
assigns and pledges to Lender all of Borrower’s right, title and interest in and to the Cap
Collateral. Borrower has instructed and will instruct each Cap Provider and any guarantor of a Cap
Provider’s obligations to make Cap Payments directly to Lender or to Loan Servicer on behalf of
Lender.

(c) So long as there is no Event of Default, Lender or Loan Servicer will remit to Borrower
each Cap Payment received by Lender or Loan Servicer with respect to any month for which Borrower
has paid in full the monthly installment of principal and interest or interest only, as applicable,
due under the Note. Alternatively, at Lender’s option so long as there is no Event of Default,
Lender may apply a Cap Payment received by Lender or Loan Servicer with respect to any month to the
applicable monthly payment of accrued interest due under the Note if Borrower has paid in full the
remaining portion of such monthly payment of principal and interest or interest only, as
applicable.

(d) Following an Event of Default, in addition to any other rights and remedies Lender may
have, Lender may retain any Cap Payments and apply them to the Indebtedness in such order and
amounts as Lender determines. Neither the existence of a Cap Agreement nor anything in this
Instrument shall relieve Borrower of its primary obligation to timely pay in full all amounts due
under the Note and otherwise due on account of the Indebtedness.

(e) If the Note does not provide for interest to accrue at an adjustable or variable interest
rate (other than during the Extension Period) then this Section 42 shall be of no force or effect.

43. ACCELERATION; REMEDIES. At any time during the existence of an Event of Default, Lender,
at Lender’s option, may declare the Indebtedness to be immediately due and payable without further
demand, and may invoke the power of sale granted in this Instrument (and Borrower appoints Lender
as Borrower’s agent and attorney-in-fact to exercise such power of sale in the name and on behalf
of Borrower) and any other remedies permitted by Georgia law or provided in this Instrument or in
any other Loan Document. Borrower acknowledges that the power of sale granted in this Instrument
may be exercised by Lender without prior judicial hearing. Lender shall be entitled to collect all
costs and expenses incurred in pursuing such remedies, including reasonable attorneys’ fees, costs
of documentary evidence, abstracts and title reports.

Lender may sell and dispose of the Mortgaged Property at public auction, at the usual place for
conducting sales at the courthouse in the county where all or any part of the Mortgaged Property is
located, to the highest bidder for cash, first advertising the time, terms and place of such sale
by publishing a notice of sale once a week for four consecutive weeks (without regard to the actual
number of days) in a newspaper in which sheriff’s advertisements are published in such county, all
other notice being waived by Borrower; and Lender may thereupon execute and deliver to the
purchaser a sufficient instrument of conveyance of the Mortgaged Property in fee simple, which may
contain recitals as to the happening of the default upon which the execution of the power of sale
granted by this Section depends. The recitals in the instrument of conveyance shall be presumptive
evidence that Lender duly complied with all preliminary acts prerequisite to the sale and
instrument of conveyance. Borrower constitutes and appoints Lender as Borrower’s agent and
attorney-in-fact to make such recitals, sale and conveyance. Borrower ratifies all of Lender’s
acts, as such attorney-in-fact, and Borrower agrees that such recitals shall be binding and
conclusive upon Borrower and that the conveyance to be made by Lender (and in the event of a deed
in lieu of foreclosure, then as to such conveyance) shall be effectual to bar all right, title and
interest, equity of redemption, including all statutory redemption, homestead, dower, curtsey and
all other exemptions of Borrower, or its successors in interest, in and to the Mortgaged Property.

The Mortgaged Property may be sold in one parcel and as an entirety, or in such parcels, manner or
order as Lender, in its discretion, may elect, and one or more exercises of the powers granted in
this Section shall not extinguish or exhaust the power unless the entire Mortgaged Property is sold
or the Indebtedness is paid in full, and Lender shall collect the proceeds of such sale, applying
such proceeds as provided in this Section. In the event of a deficiency, Borrower shall
immediately on demand from Lender pay such deficiency to Lender, subject to the provisions of the
Note limiting Borrower’s personal liability for payment of the Indebtedness. Borrower acknowledges
that Lender may bid for and purchase the Mortgaged Property at any foreclosure sale and shall be
entitled to apply all or any part of the Indebtedness as a credit to the purchase price. Borrower
covenants and agrees that Lender shall apply the proceeds of the sale in the following order: (a)
to all reasonable costs and expenses of the sale, including reasonable attorneys’ fees and costs of
title evidence; (b) to the Indebtedness in such order as Lender, in Lender’s discretion, directs;
and (c) the excess, if any, to the person or persons legally entitled to the excess. The power and
agency granted in this Section 43 are coupled with an interest, are irrevocable by death or
otherwise and are in addition to the remedies for collection of the Indebtedness as provided by
law.

If the Mortgaged Property is sold pursuant to this Section 43, Borrower, or any person holding
possession of the Mortgaged Property through Borrower, shall surrender possession of the Mortgaged
Property to the purchaser at such sale on demand. If possession is not surrendered on demand,
Borrower or such person shall be a tenant holding over and may be dispossessed in accordance with
Georgia law.

44. RELEASE. Upon payment of the Indebtedness, Lender shall cancel this Instrument. Borrower
shall pay Lender’s reasonable costs incurred in canceling this Instrument.

45. BORROWER’S WAIVER OF CERTAIN RIGHTS. To the fullest extent permitted by law, Borrower
agrees that Borrower will not at any time insist upon, plead, claim or take the benefit or
advantage of any present or future law providing for any appraisement, valuation, stay, extension
or redemption, homestead, moratorium, reinstatement, marshalling or forbearance, and Borrower, for
Borrower, Borrower’s heirs, devisees, representatives, successors and assigns, and for any and all
persons ever claiming any interest in the Mortgaged Property, to the fullest extent permitted by
law, waives and releases all rights of redemption, valuation, appraisement, stay of execution,
reinstatement (including all rights under O.C.G.A. Section 44-14-85), notice of intention to mature
or declare due the whole of the Indebtedness, and all rights to a marshaling of assets of Borrower,
including the Mortgaged Property.

46. DEED TO SECURE DEBT. This conveyance is to be construed under the existing laws of the
State of Georgia as a deed passing title, and not as a mortgage, and is intended to secure the
payment of the Indebtedness.

47. ASSUMPTION NOT A NOVATION. Lender’s acceptance of an assumption of the obligations of
this Instrument and the Note, and the release of Borrower pursuant to Section 21, shall not
constitute a novation and shall not affect the priority of the lien created by this Instrument.

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

ATTACHED EXHIBITS. The following Exhibits are attached to this Instrument:

	 	 	 	 	 
	X

	 	Exhibit A
	 	Description of the Land (required).
	 

	 	

	 	

	X

	 	Exhibit B
	 	Modifications to Instrument
	 

	 	

	 	

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

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

2

	 	 	 	G&E
APARTMENT REIT KEDRON VILLAGE, LLC, a Delaware
limited liability company

By: /s/ Gus G. Remppies (SEAL)

	 	 	Name: Gus G. Remppies

Authorized Signatory

Signed, sealed and delivered in

the presence of:

/s/ Scott Weber

Print Name: Scott Weber, Unofficial Witness

/s/ Robin M. Broughton

Notary Public, City of

Richmond, Virginia

Date: 6-25-08

My Commission Expires: 7-31-2010

3

EXHIBIT A

4

[DESCRIPTION OF THE LAND]

MODIFICATIONS TO INSTRUMENT

The following modifications are made to the text of the Instrument that precedes this Exhibit:

1. 21(c)(vii) is hereby deleted in its entirety.

2. A new section 21(g) shall be added to this Instrument as follows:

Notwithstanding anything to the contrary in this Section 21, shares in the Grubb & Ellis
Apartment REIT, Inc., a Maryland corporation (the “REIT”) may be offered or sold to investors in an
offering of such shares which has been registered with the Securities and Exchange Commission, or
is exempt from registration, without regard to the limitations and/or restrictions on transfer set
forth in Section 21 and any such sale or offering shall not constitute a Transfer of a Controlling
Interest; provided however that (A) the REIT shall remain as, or directly or indirectly own 100%
of, the sole general partner of Grubb & Ellis Apartment REIT Holdings, L.P., a Virginia limited
partnership (the “Borrower’s Manager,”) and shall directly or indirectly own (through the
Borrower’s Manager or any wholly-owned subsidiary thereof) not less than 51% of the issued and
outstanding membership interests in the Borrower, and (B) the REIT (as the sole general partner of
the Borrower’s Manager) shall at all relevant times during which the Indebtedness secured hereby is
outstanding, maintain a comparable right and ability to manage and control the Borrower and the
Mortgaged Property as existed as of the date of this Instrument.

5

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