Exhibit 10.2

PROMISSORY NOTE

by

TALON FIRST TRUST, LLC

(Borrower)

in favor of

RCC REAL ESTATE, INC.

(Lender)

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TABLE OF CONTENTS

 

Page

 

 

ARTICLE 1.  DEFINED TERMS

1

ARTICLE 2.  PAYMENT TERMS

7

ARTICLE 3.  ADDITIONAL PAYMENT PROVISIONS

8

ARTICLE 4.  DEFAULT AND ACCELERATION

10

ARTICLE 5.  DEFAULT INTEREST

10

ARTICLE 6.  PREPAYMENT

10

ARTICLE 7.  SECURITY

11

ARTICLE 8.  SAVINGS CLAUSE

11

ARTICLE 9.  LATE CHARGE

12

ARTICLE 10.  NO ORAL CHANGE

12

ARTICLE 11.  JOINT AND SEVERAL LIABILITY

12

ARTICLE 12.  WAIVERS

12

ARTICLE 13.  TRANSFER

13

ARTICLE 14.  WAIVER OF TRIAL BY JURY

13

ARTICLE 15.  EXCULPATION

13

ARTICLE 16.  AUTHORITY

16

ARTICLE 17.  APPLICABLE LAW

16

ARTICLE 18.  SERVICE OF PROCESS

16

ARTICLE 19.  COUNSEL FEES

17

ARTICLE 20.  NOTICES

17

ARTICLE 21.  MISCELLANEOUS

17

ARTICLE 22.  INTEREST RATE CAP AGREEMENT

17

ARTICLE 23.  EXTENSION OF MATURITY DATE

19

ARTICLE 24.  ADVANCES GENERALLY

19

 

 

EXHIBITS

 

 

 

EXHIBIT A - FORM OF REQUEST

 

 

 

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PROMISSORY NOTE

$33,000,000.00

New York, New York

 

July 2, 2014

FOR VALUE RECEIVED, TALON FIRST TRUST, LLC, a Delaware limited liability
company, as maker, having its principal place of business at c/o Talon Real
Estate Holding Corp., 5500 Wayzata Blvd, Suite 1070, Minneapolis, Minnesota
55416  (“Borrower”), hereby unconditionally promises to pay to the order of RCC
REAL ESTATE, INC., a Delaware corporation, as payee, having an address at 712
Fifth Avenue, New York, New York 10019, and its successors and assigns
(collectively, “Lender”), or at such other place as the holder of this
Promissory Note (as the same may be amended, restated, supplemented, or
otherwise modified from time to time, this “Note”) may from time to time
designate in writing, the principal sum of THIRTY-THREE MILLION AND 00/100
DOLLARS ($33,000,000.00) or such lesser amount as is advanced pursuant to the
provisions of this Note, in lawful money of the United States of America with
interest thereon to be computed from the date of this Note at the Applicable
Interest Rate (as defined below), and to be paid in accordance with the terms of
this Note.

ARTICLE 1.  DEFINED TERMS

For all purposes of this Note, except as otherwise expressly provided herein or
unless the context clearly indicates a contrary intent:

“Acceptable Counterparty” shall mean a counterparty to the Interest Rate Cap
Agreement that (a) has and shall maintain, until the expiration of the
applicable Interest Rate Cap Agreement, a long-term unsecured debt rating of not
less than “A-” by S&P and “A3” from Moody’s, which rating shall not include a
“t” or otherwise reflect a termination risk, or (b) is otherwise acceptable to
all Rating Agencies rating any Secondary Market Transaction as evidenced by
written confirmation from all such Rating Agencies that such counterparty shall
not cause a downgrade, withdrawal or qualification of the ratings assigned, or
to be assigned, to the Securities or any class thereof in any Securitization.

“Adjusted LIBOR Rate” shall mean, with respect to any Interest Period, an
interest rate per annum equal to the one-month LIBOR plus the Spread; provided,
however, in no event shall LIBOR be deemed to be less than one quarter of one
percent (0.25%).

“Adjusted Prime Rate” shall mean the Prime Rate as such Prime Rate may change
from time to time plus the Prime Rate Spread.

“Advances” shall mean, collectively, the Initial Advance and the TI/LC Advances.

“Applicable Interest Rate” shall mean (a) from and including the date of this
Note through the day immediately preceding the first Determination Date an
interest rate per annum equal to 5.75%; and (b) from and including the first
Determination Date and for each successive Interest Period through and including
the Maturity Date, an interest rate per annum equal to (i) the Adjusted LIBOR
Rate or (ii) the Adjusted Prime Rate, if the Loan begins bearing interest at the
Adjusted Prime Rate in accordance with the provisions of Paragraph (b) of
Article 3.

“Approved Leasing Expenses” shall mean actual out-of-pocket expenses incurred by
Borrower in leasing or re-leasing of the space at the Property pursuant to
Leases entered into in accordance with the Security Instrument, including
brokerage commissions and legal expenses, but excluding the costs of Approved
Tenant Work, which expenses are substantiated by executed Lease documents,
brokerage agreements and related agreements and do not exceed the amounts set
forth in Section 6(b)(iv)(B) of the Reserve Agreement (unless Borrower deposits
with Lender the amount by which such amounts exceed the amount set forth in such
Section for disbursement in accordance with the Reserve Agreement).

“Approved Tenant Work” shall mean any tenant improvement work that Borrower is
required to perform or pay for pursuant to any Lease entered into in accordance
with the Security Instrument.

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“Approved Tenant Work Expenses” shall mean the costs and expenses incurred in
connection with Approved Tenant Work, provided such costs and expenses do not
exceed the amounts set forth in Section 6(b)(iv)(C) of the Reserve Agreement
(unless Borrower deposits with Lender the amount by which such amounts exceed
the amount set forth in such Section for disbursement in accordance with the
Reserve Agreement).

“Breakage Costs” shall mean any loss or expense which Lender sustains or incurs
as a consequence of (a) any default by Borrower in payment of the principal of
or interest on the Loan while bearing interest at the Adjusted LIBOR Rate,
including, without limitation, any such loss or expense arising from interest or
fees payable by Lender to lenders of funds obtained by it in order to maintain
the Adjusted LIBOR Rate, (b) any prepayment (whether voluntary or mandatory) of
the Loan on a day that (i) is not a Payment Date, or (ii) is a Payment Date if
Borrower did not give the prior written notice of such prepayment required
pursuant to the terms of this Note, including, without limitation, such loss or
expense arising from interest or fees payable by Lender to lenders of funds
obtained by it in order to maintain the Adjusted LIBOR Rate hereunder and (c)
the conversion (for any reason whatsoever, whether voluntary or involuntary) of
the Applicable Interest Rate from the Adjusted LIBOR Rate to the Adjusted Prime
Rate on a date other than the Determination Date immediately following the last
day of an Interest Period, including, without limitation, such loss or expenses
arising from interest or fees payable or which would be payable by Lender to
lenders of funds obtained by it in order to maintain the Adjusted LIBOR Rate
hereunder.

“Business Day” shall mean a day on which commercial banks are not authorized or
required by law to close in the State of New York.

“Cash Management Agreement” shall mean that certain Cash Management Agreement,
dated as of the date hereof, by and among, Borrower, Lender, Wells Fargo Bank,
National Association and Manager, as the same may be amended, restated,
supplemented, or otherwise modified from time to time.

“Closing Date” shall mean the date hereof.

“Debt” shall have the meaning set forth in Article 4 hereof.

“Debt Service” shall mean, with respect to any particular period of time,
scheduled interest payments due under this Note.

 “Debt Service Coverage Ratio” shall mean, as of the date of measurement, a
ratio in which:  (a) the numerator is the Net Operating Income; and (b) the
denominator is the Debt Service on the most recent Payment Date, annualized.

“Default” means any event or occurrence that, with the passage of time or the
giving of notice, or both, would constitute an Event of Default.

 “Default Rate” shall have the meaning set forth in Article 5 hereof.

“Determination Date” shall mean the first day of the Interest Period for which
the Applicable Interest Rate is being determined.

“Event of Default” shall have the meaning given to such term in Section 10.01 of
the Security Instrument.

 “Exit Fee” shall mean an amount equal to one half of one percent (0.50%) of the
outstanding principal amount of this Note (or, in the case of a partial
prepayment of this Note pursuant to Section 6(b) or otherwise, the principal
amount so prepaid), determined as of the date such amount is due and payable
under this Note.

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“Extended Maturity Date” shall mean the First Extended Maturity Date if the
First Extension Option is effectuated in accordance with Article 23 hereof, or
the Second Extended Maturity Date if the Second Extension Option is effectuated
in accordance with Article 23 hereof.

“Extension Fee” shall mean an amount equal to one quarter of one percent (0.25%)
of the outstanding principal amount of this Note, determined as of the Initial
Maturity Date or as of the First Extended Maturity Date, as applicable.

“Extension Option” shall have the meaning set forth in Article 23 hereof.

“Extension Term” shall mean the period from the Initial Maturity Date to and
including the First Extended Maturity Date if the First Extension Option is
effectuated in accordance with Article 23 hereof, and the period from the First
Extended Maturity Date to and including the Second Extended Maturity Date if the
Second Extension Option is effectuated in accordance with Article 23 hereof.

“First Extended Maturity Date” shall have the meaning set forth in Article 23
hereof.

“First Extension Option” shall have the meaning set forth in Article 23 hereof.

“Fitch” shall mean Fitch, Inc.

“Foreign Taxes” shall mean, collectively, income, stamp or other taxes, levies,
imposts, duties, charges, fees, deductions, reserves or withholdings imposed,
levied, collected, withheld or assessed by any Governmental Authority, which are
imposed, enacted or become effective after the date hereof.

“Governmental Authority” shall mean any court, board, agency, commission, office
or authority of any nature whatsoever for any governmental unit (federal, state,
county, district, municipal, city or otherwise) whether now or hereafter in
existence.

“Guarantor” shall mean, jointly and severally, (i) Talon Real Estate Holding
Corp., a Utah corporation and (ii) Talon OP, L.P., a Minnesota limited
partnership; and any replacement guarantor approved by Lender.

“Gross Income” shall mean, for any period, all income from base rental payments
under Leases in effect with tenants that are in occupancy, open for business and
paying full contractual, unabated base rent (calculated based upon a maximum
occupancy rate equal to the lesser of 95% or the actual occupancy rate) without
right of offset or credit for utility charges, escalations or forfeited security
deposits, (including any portion of a security deposit Borrower is entitled to
due to a breach by a tenant), but excluding (i) Rents from month-to-month
tenants, tenants which are in default under their Leases, from tenants not in
occupancy of their demised premises or which are during a free rent period or
from tenants that are the subject of a pending bankruptcy or insolvency action
or whose guarantor under such Lease are the subject of a pending bankruptcy or
insolvency action, (ii) sales, use and occupancy or other taxes on receipts
required to be accounted for by Borrower to any Governmental Authority, (iii)
refunds and uncollectible accounts, (iv) proceeds from the sale of furniture,
fixtures and equipment, (v) Net Proceeds and Condemnation Proceeds (other than
business interruption or other loss of income insurance), and (vi) any
disbursements to Borrower from any of the Reserves (as defined in the Reserve
Agreement).

“Initial Advance” shall mean the advance of the Loan made on the Closing Date,
in the amount of THIRTY-TWO MILLION and 00/100 Dollars ($32,000,000.00).

“Initial Maturity Date” shall mean the Payment Date occurring in July, 2017.

“Interest Period” shall mean, in connection with the calculation of interest
accrued with respect to any specified Payment Date, one month periods commencing
on the Payment Date occurring in the immediately preceding calendar month and
ending on the day immediately preceding the subject Payment Date; provided,

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however, the Interest Period for the payment to be made in accordance with
Section 2(a)(i) hereof shall be the period commencing on the Closing Date, and
ending on the calendar day preceding the first Payment Date.

“Interest Rate Cap Agreement” shall mean, collectively, one or more interest
rate protection agreements (together with the confirmation and schedules
relating thereto) acceptable to Lender, between an Acceptable Counterparty and
Borrower obtained by Borrower as and when required pursuant to Article 22
hereof, as the same may be amended, restated, supplemented, or otherwise
modified from time to time.  After delivery of a Replacement Interest Rate Cap
Agreement to Lender, the term “Interest Rate Cap Agreement” shall be deemed to
mean such Replacement Interest Rate Cap Agreement and such Replacement Interest
Rate Cap Agreement shall be subject to all requirements applicable to the
Interest Rate Cap Agreement.

“Last Advance Date” shall mean the Payment Date occurring in January, 2016.

“LIBOR” shall mean, with respect to each Interest Period, the rate determined by
Lender to be (i) the per annum rate for deposits in U.S. Dollars in the London
interbank market for a period equal to the applicable Interest Period, as
displayed on Reuters screen page LIBOR01 (or any successor thereto) as of 11:00
a.m., London time, on the day that is two (2) London Business Days prior to that
respective Interest Period’s Determination Date (rounded upwards, if necessary,
to the nearest 1/100 of 1%); (ii) if such rate does not appear on said on
Reuters screen page LIBOR01, the arithmetic mean (rounded as aforesaid) of the
offered quotations of rates obtained by Lender from the Reference Banks for
deposits in U.S. dollars for a period equal to the applicable Interest Period to
prime banks in the London interbank market as of approximately 11:00 a.m.,
London time, on the day that is two (2) London Business Days prior to that
Determination Date and in an amount that is representative for a single
transaction in the relevant market at the relevant time; or (iii) if fewer than
two (2) Reference Banks provide Lender with such quotations, the rate per annum
which Lender determines to be the arithmetic mean (rounded as aforesaid) of the
offered quotations of rates which major banks in New York, New York selected by
Lender are quoting at approximately 11:00 a.m., New York City time, on the
Determination Date for loans in U.S. dollars to leading European banks for a
period equal to the applicable Interest Period in amounts of not less than U.S.
$1,000,000.00.  Lender’s determination of LIBOR shall be binding and conclusive
on Borrower absent manifest error.  LIBOR may or may not be the lowest rate
based upon the market for U.S. Dollar deposits in the London Interbank
Eurodollar Market at which Lender prices loans on the date which LIBOR is
determined by Lender as set forth above.

“Lien” shall mean, any mortgage, deed of trust, lien, pledge, hypothecation,
assignment, security interest, or any other encumbrance, charge or transfer of,
the Property or any portion thereof, or any interest therein, including, without
limitation, any conditional sale or other title retention agreement, any
financing lease having substantially the same economic effect as any of the
foregoing, and mechanics’, materialmens’ and other similar liens and
encumbrances.

“Loan” shall mean the loan made by Lender to Borrower in the original principal
amount set forth in, and evidenced by, this Note.

“Loan Documents” shall have the meaning set forth in Article 7 hereof.

“Loan to Value Ratio” shall mean, as of any date of determination, the ratio of
the then outstanding principal balance of the Loan to the appraised value of the
Property determined by an M.A.I. appraisal (dated, at Lender’s option, no
earlier than thirty (30) days prior to the date of determination of the Loan to
Value Ratio) acceptable to Lender in its good faith discretion, prepared by a
professional appraiser who is a member in good standing of the Appraisal
Institute, which appraisal shall value the Property on an “as-is” basis as of
the date of such appraisal.

“London Business Day” shall mean any day other than a Saturday, Sunday or any
other day on which commercial banks in London, England are not open for
business.

“Manager” shall mean Talon Management Services, LLC, a Minnesota limited
liability company, or such other property manager with respect to the Property
approved by Lender.

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“Maturity Date” shall mean the Initial Maturity Date, the First Extended
Maturity Date if the First Extension Option is effectuated in accordance with
the terms of Article 23 hereof, the Second Extended Maturity Date if the Second
Extension Option is effectuated in accordance with the terms of Article 23
hereof, or such other date on which the outstanding principal balance of this
Note, accrued interest and all other sums payable under this Note and the other
Loan Documents becomes due and payable, as herein or therein provided, whether
at such stated maturity date, by acceleration or otherwise.

“Moody’s” shall mean Moody’s Investors Service, Inc.

“Net Operating Income” means, as of the date of determination, the amount
obtained by subtracting Operating Expenses during the twelve (12) month period
ending the last day of the most recent calendar month for which monthly
reporting has been provided by Borrower in accordance with the Loan Documents,
from Gross Income for the month in which Net Operating Income is measured,
annualized.  For the purpose of determining the Net Operating Income, all
calculations of Operating Expenses and Gross Income shall be determined
utilizing the most recent monthly results as reported pursuant to and in
accordance with the Loan Documents, provided, if Borrower fails to provide the
monthly reporting as required pursuant to the Loan Documents, then in such case,
and without limiting any other rights that Lender has due to such failure, (x)
Borrower shall not be entitled to any benefits under this Note which is
conditioned on a calculation that requires the delivery of such monthly
reporting, including, without limitation, terminating a Cash Management Period
(as defined in the Cash Management Agreement) and (y) in making any calculation
with respect to the Debt Service Coverage Ratio, Lender shall be entitled, in
Lender’s sole and absolute discretion, to utilize the most recent information on
monthly reporting received from Borrower.

“Officer’s Certificate” shall mean a certificate delivered to Lender by Borrower
which is signed by an authorized officer of the general partner or managing
member of Borrower.

“Operating Expenses” shall mean the aggregate of the following items:  (a) real
estate taxes, general and special assessments or similar charges, other than
Taxes; (b) sales, use and personal property taxes; (c) (1) management fees equal
to the greater of four percent (4%) of gross revenues, and actual management
fees, and (2) disbursements for management services whether such services are
performed at the Property or off-site; (d) wages, salaries, pension costs and
all fringe and other employee-related benefits and expenses, of all employees up
to and including (but not above) the level of the on-site manager, engaged in
the repair, operation and maintenance of the Property and service to tenants and
on-site personnel engaged in audit and accounting functions performed by
Borrower; (e) insurance premiums including, but not limited to, casualty,
liability, rent and fidelity insurance premiums, other than Insurance Premiums;
(f) cost of all electricity, oil, gas, water, steam, HVAC and any other energy,
utility or similar item and overtime services, the cost of building and cleaning
supplies, and all other administrative, management, ownership, operating,
advertising, marketing and maintenance expenses incurred by Borrower (and not
paid directly by any tenant) in connection with the operation of the Property;
(g) costs of necessary cleaning, repair, replacement, maintenance, decoration or
painting of existing improvements on the Property (including, without
limitation, parking lots and roadways), of like kind or quality or such kind or
quality which is necessary to maintain the Property to the same standards as
competitive properties of similar size and location of the Property; (h) the
cost of such other maintenance materials, HVAC repairs, parts and supplies, and
all equipment to be used in the ordinary course of business, which is not
capitalized in accordance with an approved accounting method; (i) legal,
accounting and other professional expenses incurred in connection with the
Property; (j) casualty losses to the extent not reimbursed by a third party; and
(k) reserve payments required under the Replacement Reserve Subaccount (as
defined in the Cash Management Agreement).  Operating Expenses shall be based on
the above-described items actually incurred or payable on an accrual basis in
accordance with the approved accounting method utilized by Borrower during the
twelve (12) month period ending one month prior to the date on which the Net
Operating Income is to be calculated, with customary adjustments for items such
as taxes and insurance which accrue but are paid periodically, as reasonably
adjusted by Lender to reflect projected adjustments for only those items which
are definitively ascertainable and of a fixed amount (for example, real estate
taxes) for the subsequent twelve (12) month period beginning on the date on
which the Net Operating Income is to be calculated. Notwithstanding the
foregoing, the term “Operating Expenses” shall not include (i) depreciation or
amortization or any other non-cash item of expense unless approved by Lender in
its reasonable discretion, (ii)

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interest, principal, fees, costs and expense reimbursements of Lender in
administering the Loan or exercising remedies under this Note or the other Loan
Documents; or (iii) any expenditure properly treated as a capital item under an
approved accounting method.

“Payment Date” shall mean August 5, 2014 (which shall be the first Payment Date
hereunder) and the fifth (5th) day of each and every month thereafter until and
including the Maturity Date, or if such day is not a Business Day, the
immediately preceding Business Day.

“Person” shall mean any individual, corporation, partnership, joint venture,
limited liability company, estate, trust, unincorporated association, any
Federal, state, county or municipal government or any bureau, department or
agency thereof and any fiduciary acting in such capacity on behalf of any of the
foregoing.

“Prepayment Consideration” shall have the meaning set forth in Article 6 hereof.

“Prime Rate” shall mean the annual rate of interest publicly announced by
Citibank, N.A. in New York, New York, as its prime rate, as such rate shall
change from time to time.  If Citibank, N.A. ceases to announce a prime rate,
Prime Rate shall mean the rate of interest published in The Wall Street Journal
from time to time as the “Prime Rate”.  If The Wall Street Journal ceases to
publish the “Prime Rate”, Lender shall select an equivalent publication that
publishes such “Prime Rate”, and if such “Prime Rates” are no longer generally
published or are limited, regulated or administered by a Governmental Authority
or quasigovernmental body, then Lender shall select, in its reasonable
discretion, a comparable interest rate index.

“Prime Rate Spread” shall mean the difference (expressed as the number of basis
points) between (a) LIBOR plus the Spread on the date LIBOR was last applicable
to the Loan,  and (b) the Prime Rate on the date LIBOR was last applicable to
the Loan.

“Property” shall have the meaning set forth in Article 7 hereof.

“Rating Agencies” shall mean each of S&P, Moody’s and Fitch, or any other
nationally recognized statistical rating agency which has been approved by
Lender.

“Reference Banks” shall mean four major banks in the London interbank market
selected by Lender.

“Replacement Interest Rate Cap Agreement” shall mean, collectively, one or more
interest rate protection agreements, acceptable to Lender, from an Acceptable
Counterparty, with terms identical to the Interest Rate Cap Agreement except
that the same shall be effective as of the date required in Article 22 hereof
(and Article 23 hereof to the extent any Replacement Interest Rate Cap Agreement
is purchased in order to comply with the requirements of such Article 23);
provided that to the extent any such interest rate protection agreements do not
meet the foregoing requirements, a “Replacement Interest Rate Cap Agreement”
shall be such interest rate protection agreements approved in writing by Lender,
in each case, as the same may be amended, restated, supplemented, or otherwise
modified from time to time.

“Request” shall mean Borrower’s written request for an Advance and/or
disbursement of funds held in a Reserve Account (as defined in the Reserve
Agreement), substantially in the form attached hereto as Exhibit A.

“Reserve Agreement” shall mean that certain Reserve and Security Agreement,
dated as of the date hereof, by and between Borrower and Lender, as the same may
be amended, restated, supplemented, or otherwise modified from time to time.

“S&P” shall mean Standard & Poor’s Financial Services LLLC, a subsidiary of The
McGraw-Hill Companies, and any successor thereto.

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“Second Extended Maturity Date” shall have the meaning set forth in Article 23
hereof.

“Second Extension Option” shall have the meaning set forth in Article 23 hereof.

“Security Instrument” shall have the meaning set forth in Article 7 hereof.

 “Spread” shall mean five and one-half of one percent (5.50%).

“Strike Price” shall mean two and one-half of one percent (2.50%).

“Tenant Budget” shall mean each budget prepared in respect of any applicable
Approved Tenant Work.

“TI/LC Advances” shall mean advances of the Loan for the TI/LC Portion set forth
in Article 25 hereof.

“TI/LC Reserve Account” shall have the meaning set forth in the Reserve
Agreement.

“TI/LC Portion” shall have the meaning set forth in Article 24 hereof.

All capitalized terms not otherwise defined herein shall have the meanings
ascribed to such terms in the Security Instrument.  Whenever used, the singular
number shall include the plural, the plural number shall include the singular,
and the words “Lender” and “Borrower” shall include their respective successors,
assigns, heirs, executors and administrators.

ARTICLE 2.  PAYMENT TERMS

(a)

Borrower agrees to pay sums under this Note in installments as follows:

(i)

A payment on the date hereof of all interest that will accrue on the Initial
Advance from and after the date hereof through and including the fourth (4th)
calendar day of the first full calendar month following the date hereof;

(ii)

A monthly payment of interest only on each Payment Date; and

(iii)

The outstanding principal balance of this Note, all interest accrued thereon,
and all other sums due and payable under this Note and the Loan Documents,
together with the Exit Fee, shall be due and payable on the Maturity Date.

(b)

Except as otherwise specifically provided herein, all payments and prepayments
under this Note shall be made to Lender not later than 11:00 A.M., New York City
time, on the date when due and shall be made in lawful money of the United
States of America in immediately available funds at Lender’s office or as
otherwise directed by Lender, and any funds received by Lender after such time
shall, for all purposes hereof, be deemed to have been paid on the next
succeeding Business Day.  Interest on the principal sum of this Note shall be
calculated at the Applicable Interest Rate on the basis of a three hundred sixty
(360) day year based on the actual number of days elapsed.  In computing the
number of days during which interest accrues, the day on which funds are
initially advanced shall be included regardless of the time of day such advance
is made, and the day on which funds are repaid shall be included unless
repayment is credited prior to close of business.  All payments required to be
made by Borrower hereunder or under the Note or the other Loan Documents shall
be made irrespective of, and without deduction for, any setoff, claim or
counterclaim and shall be made irrespective of any defense thereto.

(c)

For purposes of this Note, if the Payment Date in a given month shall not be a
Business Day, then, for purposes of determining the date on which Borrower is
required to make any payment due hereunder and the

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date on which Lender is required to make any Advance hereunder, but not the
accrual of interest, the Payment Date for such month shall be the immediately
preceding Business Day.

(d)

In the event that at any time any payment received by Lender hereunder shall be
deemed by a court of competent jurisdiction to have been a voidable preference
or fraudulent conveyance under any bankruptcy, insolvency or other debtor relief
law, then the obligation to make such payment shall survive any cancellation or
satisfaction of this Note or return thereof to Borrower and shall not be
discharged or satisfied with any prior payment thereof or cancellation of this
Note, but shall remain a valid and binding obligation enforceable in accordance
with the terms and provisions hereof, and such payment shall be immediately due
and payable upon demand.

(e)

Borrower agrees to pay Lender an origination fee in the amount of $330,000.00,
which is fully earned and due and payable on the date hereof.

ARTICLE 3.    ADDITIONAL PAYMENT PROVISIONS

(a)

Interest shall be charged and payable on the outstanding principal amount of the
Loan at a rate per annum equal to the Applicable Interest Rate, but in no event
shall such rate exceed the maximum rate permitted under applicable law.  Subject
to the terms and conditions of Section 3(b) below, Borrower shall pay interest
on the outstanding principal amount of the Loan at the Applicable Interest Rate
for the applicable Interest Period.  Each determination by Lender of the
Applicable Interest Rate shall be conclusive and binding for all purposes,
absent manifest error.

(b)

In the event that Lender shall have reasonably determined (which determination
shall be conclusive and binding upon Borrower absent manifest error) that by
reason of circumstances affecting the interbank eurodollar market, U.S. dollar
deposits, in an amount approximately equal to the outstanding principal balance
of the Loan, are not generally available at such time in the interbank
eurodollar market or that adequate and reasonable means do not exist for
ascertaining LIBOR, then Lender shall forthwith give notice by telephone of such
determination, confirmed in writing, to Borrower at least one (1) day prior to
the last day of the then current Interest Period.  If such notice is given, the
Loan shall bear interest at the Adjusted Prime Rate beginning on the first day
of the next succeeding Interest Period.

(c)

If, pursuant to the terms of this Note, the Loan is bearing interest at the
Adjusted Prime Rate and Lender shall reasonably determine (which determination
shall be conclusive and binding upon Borrower absent manifest error) that the
event(s) or circumstance(s) which resulted in such conversion shall no longer be
applicable, Lender shall give notice thereof to Borrower by telephone of such
determination, confirmed in writing, to Borrower at least one (1) day prior to
the last day of the then current Interest Period.  If such notice is given, the
Loan shall bear interest at the Adjusted LIBOR Rate beginning on the first day
of the next succeeding Interest Period.  Notwithstanding any provision of this
Note to the contrary, in no event shall Borrower have the right to elect to have
the Loan bear interest at either the Adjusted LIBOR Rate or the Adjusted Prime
Rate.

(d)

If the Loan is bearing interest at Adjusted LIBOR Rate, all payments made by
Borrower hereunder shall be made free and clear of, and without reduction for or
on account of, Foreign Taxes, excluding, in the case of Lender, taxes measured
by its net income, and franchise taxes imposed on it, by the jurisdiction under
the laws of which Lender is organized or any political subdivision thereof and,
in the case of Lender, taxes measured by its overall net income, and franchise
taxes imposed on it, by the jurisdiction of Lender’s applicable lending office
or any political subdivision thereof.  If any non-excluded Foreign Taxes are
required to be withheld from any amounts payable to Lender hereunder, the
amounts so payable to Lender shall be increased to the extent necessary to yield
to Lender (after payment of all non-excluded Foreign Taxes) interest or any such
other amounts payable hereunder at the rate or in the amounts specified
hereunder.  Whenever any non-excluded Foreign Tax is payable pursuant to
applicable law by Borrower, as promptly as possible thereafter, Borrower shall
send to Lender an original official receipt, if available, or certified copy
thereof showing payment of such non-excluded Foreign Tax.  Borrower hereby
indemnifies Lender for any incremental taxes, interest or penalties that may
become payable by Lender which may result from any failure by Borrower to pay
any such non-excluded Foreign Tax when due to the appropriate taxing

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authority or any failure by Borrower to remit to Lender the required receipts or
other required documentary evidence.  Lender’s inability to notify Borrower of
any such Foreign Tax in accordance with the immediately preceding sentence shall
in no way relieve Borrower of its obligations under this subsection.

(e)

If any requirement of law or any change therein, or in the interpretation or
application thereof, shall hereafter make it unlawful for Lender in good faith
to make or maintain the Loan bearing interest at the Adjusted LIBOR Rate, the
Loan shall automatically bear interest at the Adjusted Prime Rate on the next
succeeding Interest Period or within such earlier period as required by law.
 Borrower hereby agrees promptly to pay Lender, upon demand, any additional
amounts necessary to compensate Lender for any costs incurred by Lender in
making any conversion in accordance with this Note, including, without
limitation, any interest or fees payable by Lender to lenders of funds obtained
by it in order to make or maintain the Loan hereunder.  Upon written demand from
Borrower, Lender shall demonstrate in reasonable detail the circumstances giving
rise to Lender’s determination and the calculation substantiating the Adjusted
Prime Rate and any additional costs incurred by Lender in making the conversion,
which, upon written notice thereof from Lender, as certified to Borrower, shall
be conclusive absent manifest error.  In the event Lender shall determine in its
good faith (which determination shall be conclusive and binding upon Borrower)
that the aforesaid circumstances no longer exist, the Applicable Interest Rate
shall be converted to the Adjusted LIBOR Rate effective as of the first
Determination Date which occurs at least ten (10) Business Days after such
determination by Lender.

(f)

In the event that any change in any requirement of law or in the interpretation
or application thereof, or compliance in good faith by Lender with any request
or directive (whether or not having the force of law) hereafter issued by any
central bank or other Governmental Authority:

(i)

shall hereafter impose, modify or hold applicable any reserve, special deposit,
compulsory loan or similar requirement against assets held by, or deposits or
other liabilities in or for the account of, advances or loans by, or other
credit extended by, or any other acquisition of funds by, any office of Lender
which is not otherwise included in the determination of LIBOR hereunder;

(ii)

shall hereafter have the effect of reducing the rate of return on Lender’s
capital as a consequence of its obligations hereunder to a level below that
which Lender could have achieved but for such adoption, change or compliance
(taking into consideration Lender’s policies with respect to capital adequacy)
by any amount deemed by Lender to be material; or

(iii)

shall hereafter impose on Lender any other condition and the result of any of
the foregoing is to increase the cost to Lender of making, renewing or
maintaining loans or extensions of credit or to reduce any amount receivable
hereunder;

then, in any such case, Borrower shall promptly pay Lender, upon demand, any
additional amounts necessary to compensate Lender for such additional cost or
reduced amount receivable which Lender deems to be material, as determined by
Lender.  If Lender becomes entitled to claim any additional amounts pursuant to
this Section 3(f), Lender shall provide Borrower with not less than ten (10)
days’ prior written notice specifying in reasonable detail the event or
circumstance by reason of which it has become so entitled and the additional
amount required to fully compensate Lender for such additional cost or reduced
amount.  A certificate as to any additional costs or amounts payable pursuant to
the foregoing sentence submitted by Lender to Borrower shall be conclusive in
the absence of manifest error.  This provision shall survive payment of this
Note and the satisfaction of all other obligations of Borrower under this Note
and the other Loan Documents.

(g)

Borrower agrees to indemnify Lender and to hold Lender harmless from any
Breakage Costs.  This provision shall survive payment of this Note and the
satisfaction of all other obligations of Borrower under the Loan Documents.

(h)

Lender shall not be entitled to claim compensation pursuant to this Article 3
for any Foreign Taxes, increased cost or reduction in amounts received or
receivable hereunder, or any reduced rate of return, which was incurred or which
accrued more than the earlier of (i) one hundred eighty (180) days before the
date Lender

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notified Borrower of the change in law or other circumstance on which such claim
of compensation is based and delivered to Borrower a written statement setting
forth in reasonable detail the basis for calculating the additional amounts owed
to Lender under this Article 3, which statement shall be conclusive and binding
upon all parties hereto absent manifest error, or (ii) any earlier date provided
that Lender notified Borrower of such change in law or circumstance and
delivered the written statement referenced in clause (i) within one hundred
eighty (180) days after Lender received written notice of such change in law or
circumstance.

(i)

Lender will use reasonable efforts (consistent with legal and regulatory
restrictions) to maintain the availability of the Adjusted LIBOR Rate and to
avoid or reduce any increased or additional costs payable by Borrower under this
Article 3, including, if requested by Borrower, a transfer or assignment of the
Loan to a branch or office of Lender in another jurisdiction, or a redesignation
of its lending office with respect to the Loan, in order to maintain the
availability of the Adjusted LIBOR Rate or to avoid or reduce such increased or
additional costs, provided that the transfer or assignment or redesignation (i)
would not result in any additional costs, expenses or risk to Lender that are
not reimbursed by Borrower and (ii) would not be disadvantageous in any other
respect to Lender as determined by Lender in its sole discretion.

ARTICLE 4.  DEFAULT AND ACCELERATION

(a)

The whole of the principal sum of this Note, (b) interest, default interest,
late charges, the Exit Fee, the applicable Prepayment Consideration and other
sums, as provided in this Note or the other Loan Documents, (c) all other monies
agreed or provided to be paid by Borrower in this Note or the other Loan
Documents, (d) all sums advanced pursuant to the Security Instrument to protect
and preserve the Property (defined below) and the lien and the security interest
created thereby, and (e) all sums advanced and costs and expenses incurred by
Lender in connection with the Debt (defined below) or any part thereof, any
renewal, extension, or change of or substitution for the Debt or any part
thereof, or the acquisition or perfection of the security therefor, whether made
or incurred at the request of Borrower or Lender (all the sums referred to in
(a) through (e) above shall collectively be referred to as the “Debt”) shall
without notice become immediately due and payable at the option of Lender upon
the occurrence and during the continuance of an Event of Default.

ARTICLE 5.  DEFAULT INTEREST

Borrower does hereby agree that upon the occurrence of an Event of Default,
Lender shall be entitled to receive and Borrower shall pay interest on the
entire unpaid principal sum at a rate equal to the lesser of (a) five percent
(5%) plus the Applicable Interest Rate and (b) the maximum interest rate which
Borrower may by law pay (the “Default Rate”).  The Default Rate shall be
computed from the occurrence of an Event of Default until the earlier of the
date upon which the Event of Default is cured or the date upon which the Debt is
paid in full.  Interest calculated at the Default Rate shall be added to the
Debt and shall be deemed secured by the Security Instrument.  Nothing in this
Article 5 shall be construed as an agreement or privilege to extend the date of
the payment of the Debt nor as a waiver of any other right or remedy accruing to
Lender by reason of the occurrence of an Event of Default.

ARTICLE 6.  PREPAYMENT

(a)

Borrower may prepay the Loan in whole, but not in part; provided, however, with
respect to any prepayment, (i) no Default or Event of Default exists; (ii)
Borrower gives Lender not less than thirty (30) and not more than sixty (60)
days’ prior written notice specifying the date of prepayment and the amount of
the principal balance of the Loan that Borrower intends to prepay; and (iii)
Borrower pays to Lender, in addition to the outstanding principal amount of the
Loan to be prepaid, (A) if the prepayment is not made on a Payment Date, all
interest which would have accrued on the amount of such prepayment through and
including the Payment Date next occurring following the date of such prepayment;
(B) all other sums then due and payable under this Note and the other Loan
Documents, including, but not limited to, the Breakage Costs and all of Lender’s
costs and expenses (including reasonable attorneys’ fees and disbursements)
incurred by Lender in connection with such prepayment, (C) if the prepayment of
the Loan occurs prior to the eighteenth (18th) Payment Date (i.e. January 5,
2016), an amount equal to all then-scheduled monthly payments through and
including the eighteenth (18th) Payment Date

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(together with the amount described in clause (B) above, the “Prepayment
Consideration”); and (iv) Borrower pays to Lender the Exit Fee.  If a notice of
prepayment is given by Borrower to Lender pursuant to this Article 6, the amount
designated for prepayment and the other sums required under this Article 6 shall
be due and payable on the prepayment date specified in such notice.  No tender
of a prepayment with respect to which the Prepayment Consideration is due shall
be effective unless such prepayment is accompanied by the Prepayment
Consideration.

(b)

Full or partial prepayments of this Note shall be permitted in order to apply
insurance or condemnation proceeds in accordance with the terms of the Security
Instrument, in which event no prepayment fee or premium shall be due, provided
that payment of the Exit Fee applicable to such prepayment shall be required.
 Any such prepayment of principal shall be applied on the next succeeding
Payment Date following Lender’s receipt of such insurance or condemnation
proceeds and determination to apply such sums against the outstanding principal
balance of this Note in accordance with the terms of the Security Instrument.
 No notice of prepayment shall be required under the circumstances specified in
this Section 6(b).

(c)

Following an Event of Default and acceleration of this Note, if Borrower or
anyone on Borrower’s behalf makes a tender of payment of the amount necessary to
satisfy the indebtedness evidenced by this Note and secured by the Security
Instrument at any time prior to foreclosure sale (including, but not limited to,
sale under power of sale under the Security Instrument), or during any
redemption period after foreclosure, the tender of payment shall constitute an
evasion of Borrower’s obligation to pay any Prepayment Consideration due under
this Note and such payment shall, therefore, to the maximum extent permitted by
law, include a premium equal to the Prepayment Consideration that would have
been payable on the date of such tender had this Note not been so accelerated.

(d)

The Exit Fee shall be due and payable on the earlier of (i) the date when the
outstanding principal balance of this Note is paid in full, (ii) the Maturity
Date, and (iii) the date on which the Debt shall have become immediately due and
payable at the option of Lender pursuant to the terms and provisions of the Loan
Documents after the occurrence of an Event of Default.  The Exit Fee is deemed
earned in full on the date hereof notwithstanding the timing of its required
payment as herein provided above.  No tender of a prepayment of this Note with
respect to which an Exit Fee is due shall be effective unless such prepayment is
accompanied by the Exit Fee.  If the Debt shall have been declared due and
payable by Lender pursuant to Article 4 hereof, then any tender of payment of
the Debt must include the Exit Fee.  

ARTICLE 7.  SECURITY

This Note is secured by the Security Instrument and the other Loan Documents.
 The term “Security Instrument” means the Mortgage, Assignment of Leases and
Rents, Security Agreement and Fixture Filing, dated as of the date hereof (as
the same may be amended, restated, supplemented, or otherwise modified from time
to time) in the maximum principal sum of THIRTY THREE MILLION AND NO/100 DOLLARS
($33,000,000.00) given by Borrower to (or for the benefit of) Lender, as
security for the Debt and other obligations covering the fee simple estate of
Borrower in the Property (as defined in the Security Instrument) and intended to
be duly recorded in Ramsey County, Minnesota.  The term “Loan Documents” as used
in this Note shall mean all and any of the documents including this Note or the
Security Instrument now or hereafter executed and/or delivered by Borrower
and/or others and by or in favor of Lender, in connection with the Loan, as the
same may be amended, restated, supplemented, or otherwise modified from time to
time.  All of the terms, covenants and conditions contained in the Security
Instrument and the other Loan Documents are hereby made part of this Note to the
same extent and with the same force as if they were fully set forth herein.

ARTICLE 8.  SAVINGS CLAUSE

This Note is subject to the express condition that at no time shall Borrower be
obligated or required to pay interest on the principal balance due hereunder at
a rate which could subject Lender to either civil or criminal liability as a
result of being in excess of the maximum interest rate which Borrower is
permitted by applicable law to contract or agree to pay.  If by the terms of
this Note, Borrower is at any time required or obligated to pay interest on the
principal balance due hereunder at a rate in excess of such maximum rate, the
Applicable Interest Rate or the

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Default Rate, as the case may be, shall be deemed to be immediately reduced to
such maximum rate and all previous payments in excess of the maximum rate shall
be deemed to have been payments in reduction of principal and not on account of
the interest due hereunder. All sums paid or agreed to be paid to Lender for the
use, forbearance, or detention of the Debt, shall, to the extent permitted by
applicable law, be amortized, prorated, allocated, and spread throughout the
full stated term of this Note until payment in full so that the rate or amount
of interest on account of the Debt does not exceed the maximum lawful rate of
interest from time to time in effect and applicable to the Debt for so long as
the Debt is outstanding.

ARTICLE 9.  LATE CHARGE

If any sum payable under this Note (other than the payment of principal due on
the Maturity Date) is not paid prior to the fifth (5th) day after the date on
which it is due, upon written notice from Lender of such failure of Borrower to
pay such sums when due, Borrower shall pay to Lender an amount equal to the
lesser of five percent (5%) of the unpaid sum or the maximum amount permitted by
applicable law to defray the expenses incurred by Lender in handling and
processing the delinquent payment and to compensate Lender for the loss of the
use of the delinquent payment and the amount shall be secured by the Security
Instrument and the other Loan Documents.

ARTICLE 10.  NO ORAL CHANGE

This Note may not be modified, amended, waived, extended, changed, discharged or
terminated orally or by any act or failure to act on the part of Borrower or
Lender, but only by an agreement in writing signed by the party against whom
enforcement of any modification, amendment, waiver, extension, change, discharge
or termination is sought.

ARTICLE 11.  JOINT AND SEVERAL LIABILITY

If Borrower consists of more than one person or party, the obligations and
liabilities of each person or party shall be joint and several.

ARTICLE 12.  WAIVERS

Borrower and all others who may become liable for the payment of all or any part
of the Debt do hereby severally waive presentment and demand for payment, notice
of dishonor, protest and notice of protest and nonpayment and all other notices
of any kind (except as otherwise provided in the Loan Documents).  No release of
any security for the Debt or extension of time for payment of this Note or any
installment hereof, and no alteration, amendment or waiver of any provision of
the Loan Documents made by agreement between Lender or any other person or party
shall release, modify, amend, waive, extend, change, discharge, terminate or
affect the liability of Borrower, and any other person or entity who may become
liable for the payment of all or any part of the Debt, under this Note or the
other Loan Documents.  No notice to or demand on Borrower shall be deemed to be
a waiver of the obligation of Borrower or of the right of Lender to take further
action without further notice or demand as provided for in the Loan Documents.
 If Borrower is a partnership, the agreements herein contained shall remain in
force and applicable, notwithstanding any changes in the individuals comprising
the partnership.  If Borrower is a corporation, the agreements contained herein
shall remain in full force and applicable notwithstanding any changes in the
shareholders comprising, or the officers and directors relating to, the
corporation.  If Borrower is a limited liability company, the agreements
contained herein shall remain in full force and applicable notwithstanding any
changes in the members comprising, or the managers, officers or agents relating
to, the limited liability company.  The term “Borrower”, as used herein, shall
include any alternate or successor partnership, corporation, limited liability
company or other entity or person to the Borrower named herein, but any
predecessor partnership (and their partners), corporation, limited liability
company, other entity or person shall not thereby be released from any
liability.  Nothing in this Article 12 shall be construed as a consent to, or a
waiver of, any prohibition or restriction on transfers of interests in such
partnership, corporation or limited liability company which may be set forth in
the Security Instrument or any other Loan Document.

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ARTICLE 13.  TRANSFER

Lender may, at any time, sell, transfer, pledge or assign this Note, the
Security Instrument and the other Loan Documents, and any or all servicing
rights with respect thereto, or grant participations therein or issue mortgage
pass-through certificates or other securities evidencing a beneficial interest
in a rated or unrated public offering or private placement (the “Securities”).
 Lender may forward to each purchaser, transferee, assignee, servicer,
participant, investor, pledgee in such Securities or any Rating Agency rating
such Securities (collectively, the “Investor”) and each prospective Investor,
all documents and information which Lender now has or may hereafter acquire
relating to the Debt and to Borrower, any guarantor and the Property, whether
furnished by Borrower, any guarantor or otherwise, as Lender determines
necessary or desirable.  Borrower and any guarantor agree to cooperate with
Lender in connection with any transfer made or any Securities created pursuant
to the Security Instrument, including, without limitation, the delivery of an
estoppel certificate in accordance therewith, and such other documents as may be
reasonably requested by Lender.  Borrower shall also furnish, and Borrower and
any guarantor consent to Lender furnishing, to such Investors or such
prospective Investors any and all information concerning the Property, the
Leases, the financial condition of Borrower and any guarantor as may be
requested by Lender, any Investor or any prospective Investor in connection with
any sale, pledge, transfer or participation interest.  Lender may retain or
assign responsibility for servicing the Loan, including the Loan Documents, or
may delegate some or all of such responsibility and/or obligations to a servicer
including, but not limited to, any subservicer or master servicer.  Lender may
make such assignment or delegation on behalf of the Investors if this Note is
sold or the Security Instrument or the other Loan Documents are assigned.  All
references to Lender herein shall refer to and include any such servicer to the
extent applicable.

ARTICLE 14.  WAIVER OF TRIAL BY JURY

BORROWER HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, THE RIGHT TO
TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM, WHETHER IN CONTRACT,
TORT OR OTHERWISE, RELATING DIRECTLY OR INDIRECTLY TO THE LOAN EVIDENCED BY THIS
NOTE, THE APPLICATION FOR THE LOAN EVIDENCED BY THE LOAN DOCUMENTS OR ANY ACTS
OR OMISSIONS OF LENDER, ITS OFFICERS, EMPLOYEES, DIRECTORS OR AGENTS IN
CONNECTION THEREWITH.

ARTICLE 15.  EXCULPATION

(a)

Except as otherwise provided herein, in the Security Instrument or in the other
Loan Documents, Lender shall not enforce the liability and obligation of
Borrower, to perform and observe the obligations contained in the Loan Documents
by any action or proceeding wherein a money judgment shall be sought against
Borrower or any partner or member of Borrower, except that Lender may bring a
foreclosure action, an action for specific performance or any other appropriate
action or proceeding to enable Lender to enforce and realize upon the Loan
Documents, and the interests in the Property; and any other collateral given to
Lender pursuant to the Security Instrument and other Loan Documents; provided,
however, that, except as specifically provided herein, any judgment in any such
action or proceeding shall be enforceable against Borrower or any partner or
member of Borrower only to the extent of Borrower’s interest in the Property and
in any other collateral given to Lender, and Lender, by accepting this Note, the
Security Instrument and the other Loan Documents, agrees that it shall not sue
for, seek or demand any deficiency judgment against Borrower or any partner or
member of Borrower, in any such action or proceeding, under or by reason of or
in connection with the Loan Documents.  The provisions of this paragraph shall
not, however, (A) constitute a waiver, release or impairment of any obligation
evidenced or secured by the Loan Documents; (B) impair the right of Lender to
name Borrower as a party defendant in any action or suit for foreclosure and
sale under the Security Instrument; (C) affect the validity or enforceability of
any guaranty made in connection with the Loan Documents; (D) impair the right of
Lender to obtain the appointment of a receiver; (E) impair the enforcement of
any assignment; or (F) constitute a waiver of the right of Lender to enforce the
liability and obligation of Borrower, by money judgment or otherwise, to the
extent of any loss, damage, cost, expense, liability, claim or other obligation
incurred by Lender (including attorneys’ fees and costs reasonably incurred)
arising out of or in connection with the following:

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(i)

fraud or intentional misrepresentation by any or on behalf of any Borrower
Related Party (as defined below) in connection with the Loan;

(ii)

the gross negligence or willful misconduct of any Borrower Related Party in
connection with the Loan or the Property;

(iii)

the removal or disposal of any portion of the Property (other than normal
replacement of Personal Property) or any other collateral given to secure the
Loan after the occurrence of an Event of Default;

(iv)

the misapplication or conversion by any Borrower Related Party of (A) any
insurance proceeds paid by reason of any loss, damage or destruction to the
Property, (B) any awards or other amounts received in connection with the
condemnation of all or a portion of the Property, (C) any Advances or monies
disbursed to Borrower or Manager under the Cash Management Agreement, (D) any
Rents following a Default or an Event of Default, or (E) any Rents paid more
than one month in advance;

(v)

failure to pay Taxes, assessments, charges for labor or materials or other
charges that can create liens on any portion of the Property, except to the
extent that Gross Operating Income from the Property is insufficient to pay such
amounts (after giving effect to the priority of payment set forth in Section 3.4
of the Cash Management Agreement);

(vi)

failure to deliver any security deposits, advance deposits or any other deposits
collected with respect to the Property to Lender prior to or upon a foreclosure
of the Property or action in lieu thereof, except to the extent any such
security deposits were applied in accordance with the terms and conditions of
any of the Leases prior to the occurrence of the Event of Default that gave rise
to such foreclosure or action in lieu thereof;

(vii)

any intentional physical waste of the Property or other collateral securing the
Loan resulting from the action or inaction of any Borrower Related Party;

(viii)

failure of any Borrower Related Party or Manager (acting at the direction of any
Borrower Related Party) to direct the payment of, or pay any Rents to, the
Clearing Account (as defined in the Cash Management Agreement) as required by
the Loan Documents;

(ix)

the failure of any Borrower Related Party or Manager (acting at the direction of
any Borrower Related Party) to apply monies disbursed to it as loan proceeds or
from the Cash Management Account (as defined in the Cash Management Agreement)
(or any sub-account thereof) for the purpose which such disbursement is made;

(x)

except as set forth in Section 15(b)(i) below, a breach of the covenants set
forth in Section 4.3 of the Security Instrument;

(xi)

failure to pay any amounts payable by Borrower under the Interest Rate Cap
Agreement or any Replacement Interest Rate Cap Agreement (including, without
limitation, amounts required to be paid by Borrower to satisfy Borrower’s
obligations under Section 22(f) hereof) and any misapplication of any amounts
paid to Borrower under the Interest Rate Cap Agreement;

(xii)

the forfeiture by Borrower of the Property as a result of any criminal acts of
any Borrower Related Party; or

(xiii)

the failure of Borrower to appoint a new Manager upon the request of Lender as
permitted under and in accordance with the terms of the Loan Documents.

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(b)

Notwithstanding anything to the contrary in the Loan Documents (A) the Debt
shall be fully recourse to Borrower; and (B) Lender shall not be deemed to have
waived any right which Lender may have under Section 506(a), 506(b), 1111(b) or
any other provisions of the U.S. Bankruptcy Code to file a claim for the full
amount of the Debt or to require that all collateral shall continue to secure
all of the Debt owing to Lender in accordance with the Loan Documents, in the
event that:

(i)

Borrower files a voluntary petition under the Bankruptcy Code or any other
Federal or state bankruptcy or insolvency law;

(ii)

any Borrower Related Party arranges, induces, finances, solicits, colludes with
others for, or solicits or causes to be solicited petitioning creditors for the
filing by any Person(s) of any involuntary petition against Borrower under the
Bankruptcy Code or any other Federal or state bankruptcy or insolvency law;

(iii)

Borrower files an answer consenting to or otherwise acquiescing in or joining in
any involuntary petition filed against it, by any other Person under the
Bankruptcy Code or any other Federal or state bankruptcy or insolvency law;

(iv)

any Borrower Related Party consents to or acquiesces in or joins in an
application for the appointment of a custodian, receiver, trustee, or examiner
for Borrower or any portion of the Property or colludes with or otherwise
assists any Person in filing such application;

(v)

Borrower makes an assignment for the benefit of creditors, or admits, in writing
or in any legal proceeding, its insolvency or inability to pay its debts as they
become due;

(vi)

a breach of the covenants set forth in Section 4.3 of the Security Instrument,
provided, however, with respect to a breach of any of the covenants by Borrower
described in Sections 4.3(d), (f), (g), (i), (j), (l), (m), (n), (o), (p), (q),
(r) or (s), the foregoing recourse shall only be triggered if in connection with
a pending bankruptcy or insolvency proceeding and as a result of such breach, a
court of competent jurisdiction has ordered the substantive consolidation of the
assets and liabilities of Borrower with any other Person;

(vii)

Borrower fails to obtain Lender’s prior written consent to any indebtedness or
voluntary lien encumbering the portion of the Property described in clauses (a)
through (d) of Section 1.1. of the Security Instrument;

(viii)

Borrower fails to obtain Lender’s prior written consent to any Transfer, as
required by (and in accordance with) the Security Instrument; or

(ix)

Any Borrower Related Party in connection with any enforcement action or exercise
or assertion of any right or remedy in accordance with applicable law (each, an
“Action”) by or on behalf of Lender under or in connection with the Note or any
other Loan Document, acts in a manner so as to impede or delay Lender’s rights
in connection with any Action, or seeks to raise or raises an affirmative
defense or other defense, non-compulsory counterclaim, offset, judicial
intervention or injunctive or other equitable relief of any kind, or asserts in
a pleading filed in connection with a judicial proceeding any defense against
Lender or any right in connection with any security for the Loan (each an
“Interference Event”); provided, however, that notwithstanding the foregoing,
the filing by Borrower or Guarantor of a legal action or defense to Lender’s
exercise of its remedies shall not be deemed to be an Interference Event if it
is filed in good faith to assert a material defense to such exercise which has a
reasonable basis in fact and in law (including, without limitation, defenses
arising from good faith disputes as to the existence or non-existence of any
Event of Default), and if it does not seek to challenge the validity of the
liens of any of the Loan Documents or the enforceability under applicable law of
the Loan Documents taken as a whole.

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For purposes of this Article 15, “Borrower Related Party” shall mean Borrower,
Guarantor, any Affiliate of Borrower or Guarantor, or any of their agents or
representatives acting at the direction of Borrower, Guarantor, or any Affiliate
of Borrower or Guarantor, and “Affiliate” shall mean, with respect to a Person,
another Person, directly or indirectly, through one or more intermediaries,
controlling, controlled by, or under common control with the Person in question.
 The term “control” as used in the preceding sentence means the possession,
directly or indirectly, of the power to direct or cause the direction of the
management or policies of the controlled Person, whether through the ownership
of voting securities, by contract or otherwise.

ARTICLE 16.  AUTHORITY

Borrower (and the undersigned representative of Borrower, if any) represents
that Borrower has full power, authority and legal right to execute and deliver
the Loan Documents and that the Loan Documents constitute valid and binding
obligations of Borrower.

ARTICLE 17.  APPLICABLE LAW

THIS NOTE WAS NEGOTIATED IN THE STATE OF NEW YORK, AND MADE BY BORROWER AND
ACCEPTED BY LENDER IN THE STATE OF NEW YORK, AND THE PROCEEDS OF THIS NOTE WERE
DISBURSED FROM THE STATE OF NEW YORK, WHICH STATE THE PARTIES AGREE HAS A
SUBSTANTIAL RELATIONSHIP TO THE PARTIES AND TO THE UNDERLYING TRANSACTION
EMBODIED HEREBY, AND IN ALL RESPECTS, INCLUDING, WITHOUT LIMITING THE GENERALITY
OF THE FOREGOING, MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE, THIS NOTE
AND THE OBLIGATIONS ARISING HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE
AND PERFORMED IN SUCH STATE (WITHOUT REGARD TO PRINCIPLES OF CONFLICT LAWS) AND
ANY APPLICABLE LAW OF THE UNITED STATES OF AMERICA, EXCEPT THAT AT ALL TIMES THE
PROVISIONS FOR THE CREATION, PERFECTION, AND ENFORCEMENT OF THE LIENS AND
SECURITY INTERESTS CREATED PURSUANT TO THE LOAN DOCUMENTS WITH RESPECT TO THE
PROPERTY AND THE DETERMINATION OF DEFICIENCY JUDGMENTS SHALL BE GOVERNED BY AND
CONSTRUED ACCORDING TO THE LAW OF THE STATE IN WHICH THE PROPERTY IS LOCATED, IT
BEING UNDERSTOOD THAT, TO THE FULLEST EXTENT PERMITTED BY THE LAW OF SUCH STATE,
THE LAW OF THE STATE OF NEW YORK SHALL GOVERN THE CONSTRUCTION, VALIDITY AND
ENFORCEABILITY OF ALL LOAN DOCUMENTS AND ALL OF THE OBLIGATIONS ARISING
HEREUNDER OR THEREUNDER.  TO THE FULLEST EXTENT PERMITTED BY LAW, BORROWER
HEREBY UNCONDITIONALLY AND IRREVOCABLY WAIVES ANY CLAIM TO ASSERT THAT THE LAW
OF ANY OTHER JURISDICTION GOVERNS THIS NOTE, AND THIS NOTE SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK PURSUANT TO
SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW.

ARTICLE 18.  SERVICE OF PROCESS

ANY LEGAL SUIT, ACTION OR PROCEEDING AGAINST LENDER OR BORROWER ARISING OUT OF
OR RELATING TO THIS NOTE MAY AT LENDER’S OPTION BE INSTITUTED IN ANY FEDERAL OR
STATE COURT IN THE CITY OF NEW YORK, COUNTY OF NEW YORK, PURSUANT TO SECTION
5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW AND BORROWER WAIVES ANY
OBJECTIONS WHICH IT MAY NOW OR HEREAFTER HAVE BASED ON VENUE AND/OR FORUM NON
CONVENIENS OF ANY SUCH SUIT, ACTION OR PROCEEDING, AND BORROWER HEREBY
IRREVOCABLY SUBMITS TO THE JURISDICTION OF ANY SUCH COURT IN ANY SUIT, ACTION OR
PROCEEDING.  BORROWER DOES HEREBY DESIGNATE AND APPOINT:

CT Corporation System

111 Eighth Avenue

New York, New York 10011

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AS ITS AUTHORIZED AGENT TO ACCEPT AND ACKNOWLEDGE ON ITS BEHALF SERVICE OF ANY
AND ALL PROCESS WHICH MAY BE SERVED IN ANY SUCH SUIT, ACTION OR PROCEEDING IN
ANY FEDERAL OR STATE COURT IN NEW YORK, NEW YORK, AND AGREES THAT SERVICE OF
PROCESS UPON SAID AGENT AT SAID ADDRESS AND WRITTEN NOTICE OF SAID SERVICE
MAILED OR DELIVERED TO BORROWER IN THE MANNER PROVIDED HEREIN SHALL BE DEEMED IN
EVERY RESPECT EFFECTIVE SERVICE OF PROCESS UPON BORROWER IN ANY SUCH SUIT,
ACTION OR PROCEEDING IN THE STATE OF NEW YORK.  BORROWER (I) SHALL GIVE PROMPT
NOTICE TO LENDER OF ANY CHANGED ADDRESS OF ITS AUTHORIZED AGENT HEREUNDER, (II)
MAY AT ANY TIME AND FROM TIME TO TIME DESIGNATE A SUBSTITUTE AUTHORIZED AGENT
WITH AN OFFICE IN NEW YORK, NEW YORK (WHICH SUBSTITUTE AGENT AND OFFICE SHALL BE
DESIGNATED AS THE PERSON AND ADDRESS FOR SERVICE OF PROCESS), AND (III) SHALL
PROMPTLY DESIGNATE SUCH A SUBSTITUTE IF ITS AUTHORIZED AGENT CEASES TO HAVE AN
OFFICE IN NEW YORK, NEW YORK OR IS DISSOLVED WITHOUT LEAVING A SUCCESSOR.

ARTICLE 19.  COUNSEL FEES

In the event that it should become necessary to employ counsel to collect the
Debt or to protect or foreclose the security therefor, Borrower also agrees to
pay all reasonable fees and expenses of Lender, including, without limitation,
reasonable attorney’s fees for the services of such counsel whether or not suit
be brought.

ARTICLE 20.  NOTICES

Any notice, demand or other communication which any party may desire or may be
required to give to any other party shall be given as provided in the Security
Instrument.

ARTICLE 21.  MISCELLANEOUS

(a)

Wherever pursuant to this Note (i) Lender exercises any right given to it to
approve or disapprove, (ii) any arrangement or term is to be satisfactory to
Lender, or (iii) any other decision or determination is to be made by Lender,
the decision of Lender to approve or disapprove, all decisions that arrangements
or terms are satisfactory or not satisfactory and all other decisions and
determinations made by Lender, shall be in the sole and absolute discretion of
Lender and shall be final and conclusive, except as may be otherwise expressly
and specifically provided herein.

(b)

Wherever pursuant to this Note it is provided that Borrower pay any costs and
expenses, such costs and expenses shall include, but not be limited to, legal
fees and disbursements of Lender, whether retained firms, the reimbursement for
the expenses of in-house staff, or otherwise.

ARTICLE 22.  INTEREST RATE CAP AGREEMENT

(a)

Prior to or contemporaneously with Borrower’s execution and delivery of this
Note, Borrower shall enter into an Interest Rate Cap Agreement with a LIBOR
strike price equal to the Strike Price.  The Interest Rate Cap Agreement (i)
shall at all times be in a form and substance reasonably acceptable to Lender,
(ii) shall at all times be with an Acceptable Counterparty, (iii) shall direct
such Acceptable Counterparty to deposit directly to Lender pursuant to its
instructions any amounts due Borrower under such Interest Rate Cap Agreement so
long as any portion of the Debt exists, provided that the Debt shall be deemed
to exist if the Property is transferred by judicial or non-judicial foreclosure
or deed-in-lieu thereof, (iv) shall be for a period commencing no later than the
date hereof through July 5, 2016 and (v) shall at all times have a notional
amount equal to or greater than the principal balance of the Loan and shall at
all times provide for the applicable Strike Price.  Borrower shall collaterally
assign to Lender, pursuant to the Collateral Assignment of Interest Rate Cap
Agreement (as the same may be amended, restated, supplemented, or otherwise
modified from time to time, the “Assignment of Interest Rate Cap Agreement”),
all of its right, title and interest to receive any and all payments under the
Interest Rate Cap Agreement, and shall deliver to Lender an executed counterpart
of such Interest Rate Cap Agreement (which shall,

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by its terms, authorize the assignment to Lender and require that payments be
deposited directly to Lender pursuant to its instructions and shall notify the
Acceptable Counterparty of such assignment).

(b)

Borrower shall comply with all of its obligations under the terms and provisions
of the Interest Rate Cap Agreement.  All amounts paid by the Acceptable
Counterparty under the Interest Rate Cap Agreement to Borrower or Lender shall
be deposited immediately into such account as specified by Lender.  Borrower
shall take all actions reasonably requested by Lender to enforce Lender’s rights
under the Interest Rate Cap Agreement in the event of a default by the
Acceptable Counterparty and shall not waive, amend or otherwise modify any of
its rights thereunder.

(c)

In the event of any downgrade or withdrawal of the rating of the Acceptable
Counterparty by any Rating Agency, Borrower shall cause the Acceptable
Counterparty to either (i) replace the Interest Rate Cap Agreement with a
Replacement Interest Rate Cap Agreement, (ii) provide a guaranty of
Counterparty’s obligations under the Interest Rate Cap Agreement from an entity
 that meets the requirements of an Acceptable Counterparty, or (iii) post
sufficient collateral to secure its obligations under the Interest Rate Cap
Agreement, in each case not later than thirty (30) Business Days following
receipt of notice from Lender of such downgrade or withdrawal.

(d)

In the event that Borrower fails to purchase and deliver to Lender the Interest
Rate Cap Agreement or fails to maintain the Interest Rate Cap Agreement in
accordance with the terms and provisions of this Note, Lender may purchase the
Interest Rate Cap Agreement and the cost incurred by Lender in purchasing such
Interest Rate Cap Agreement shall be paid by Borrower to Lender with interest
thereon at the Default Rate from the date such cost was incurred by Lender until
such cost is reimbursed by Borrower to Lender.

(e)

In connection with the Interest Rate Cap Agreement, Borrower shall obtain and
deliver to Lender an opinion from counsel (which counsel may be in house counsel
for the Acceptable Counterparty) for the Acceptable Counterparty (upon which
Lender and its successors and assigns may rely) which shall provide, in relevant
part, that:

(i)

the Acceptable Counterparty is duly organized, validly existing, and in good
standing under the laws of its jurisdiction of incorporation or formation and
has the organizational power and authority to execute and deliver, and to
perform its obligations under, the Interest Rate Cap Agreement;

(ii)

the execution and delivery of the Interest Rate Cap Agreement by the Acceptable
Counterparty, and any other agreement which the Acceptable Counterparty has
executed and delivered pursuant thereto, and the performance of its obligations
thereunder have been and remain duly authorized by all necessary action and do
not contravene any provision of its certificate of incorporation or by laws (or
equivalent organizational documents) or any law, regulation or contractual
restriction binding on or affecting it or its property;

(iii)

all consents, authorizations and approvals required for the execution and
delivery by the Acceptable Counterparty of the Interest Rate Cap Agreement, and
any other agreement which the Acceptable Counterparty has executed and delivered
pursuant thereto, and the performance of its obligations thereunder have been
obtained and remain in full force and effect, all conditions thereof have been
duly complied with, and no other action by, and no notice to or filing with any
governmental authority or regulatory body is required for such execution,
delivery or performance; and

(iv)

the Interest Rate Cap Agreement, and any other agreement which the Acceptable
Counterparty has executed and delivered pursuant thereto, has been duly executed
and delivered by the Acceptable Counterparty and constitutes the legal, valid
and binding obligation of the Acceptable Counterparty, enforceable against the
Acceptable Counterparty in accordance with its terms, subject to applicable
bankruptcy, insolvency and similar laws affecting creditors’ rights generally,
and subject, as to enforceability, to general principles of equity (regardless
of whether enforcement is sought in a proceeding in equity or at law)

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(f)

Borrower shall have obtained, delivered and assigned to Lender in accordance
with the Loan Documents not later than five (5) Business Days prior to July 5,
2016, a Replacement Interest Rate Cap Agreements from an Acceptable Counterparty
which Replacement Interest Rate Cap Agreement shall be effective commencing no
later than July 5, 2016 and shall have a maturity date not earlier than the
Initial Maturity Date.  Failure to comply with this Section 22(f) shall be an
immediate Event of Default.

ARTICLE 23.  EXTENSION OF MATURITY DATE

(a)

Borrower shall have two (2) options (“First Extension Option” and “Second
Extension Option”, respectively, and each, an “Extension Option”) to extend the
Initial Maturity Date to Payment Date occurring in July, 2018 (the “First
Extended Maturity Date”), and to extend the First Extended Maturity Date to
Payment Date occurring in July, 2019 (the “Second Extended Maturity Date”),
respectively, upon satisfaction of the following terms and conditions:

(i)

no Default or Event of Default shall have occurred and be continuing on the date
that the applicable Extension Option is exercised and on the date that the
applicable Extension Term commences;

(ii)

Borrower shall have provided Lender with written notice of its election to
extend the Maturity Date, as aforesaid, not later than thirty (30) days and not
earlier than one hundred twenty (120) days prior to the date of the then current
Maturity Date.  Once given, such notice shall be irrevocable;

(iii)

if the Interest Rate Cap Agreement is scheduled to mature prior to the First
Extended Maturity Date, with respect to the First Extension Option, or the
Second Extended Maturity Date, with respect to the Second Extension Option,
Borrower shall have obtained and delivered to Lender not later than five (5)
Business Days prior to the first day of applicable Extension Term, one or more
Replacement Interest Rate Cap Agreements from an Acceptable Counterparty which
Replacement Interest Rate Cap Agreement shall be effective commencing on the
first date of such Extension Term and shall have a maturity date not earlier
than the First Extended Maturity Date with respect to the exercise of the First
Extension Option, and the Second Extended Maturity Date with respect to the
exercise of the Second Extension Option;

(iv)

Borrower shall have delivered to Lender, together with its notice pursuant to
Section 23(a)(ii), and at Lender’s reasonable request on the first day of the
applicable Extension Term, an Officer’s Certificate, in form and substance
acceptable to Lender, executed by an authorized officer of Borrower, certifying
that each of the representations and warranties of Borrower contained in this
Note and the other Loan Documents is true and correct in all material respects
as of the date of such Officer’s Certificate to the extent such representations
and warranties are not matters which by their nature can no longer be true and
correct as a result of the passage of time;

(v)

Borrower shall have paid the Extension Fee to Lender in connection with the
exercise of each Extension Option, which Extension Fee shall be deemed earned by
Lender

(vi)

the Net Operating Income for the Property for the twelve (12) full calendar
months ending on the last day of the month preceding the month in which the
applicable Extension Term  commences shall be equal to or greater than
$3,750,000, as determined by Lender in its sole discretion; and

(vii)

the Loan to Value Ratio of the Property shall be equal to or less than
seventy-five percent (75%).

ARTICLE 24.  ADVANCES GENERALLY

(a)

Subject to and upon the terms and conditions set forth herein, the Loan shall be
made in a series of Advances and shall consist of (i) the Initial Advance being
made on the Closing Date and (ii) the TI/LC  Advances in an aggregate amount of
up to One Million and 00/100 Dollars ($1,000,000.00) (the “TI/LC Portion”).
 Lender’s

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obligation to make TI/LC Advances after the date hereof is subject to Borrower’s
request and the applicable terms, conditions and limitations set forth in this
Note.  Lender hereby agrees to make and Borrower hereby agrees to accept the
Loan on the Closing Date.

(b)

Any amount borrowed and repaid hereunder in respect of the Loan may not be
re-borrowed.

ARTICLE 25.  TI/LC ADVANCES

(a)

Subject to the provisions hereof, following the receipt of a Request, which
Request must be delivered to Lender at least fifteen (15) days prior to the
Payment Date on which a proposed TI/LC Advance is requested to be made, Lender
shall make TI/LC Advances from time to time (but not more often than once per
calendar month and only on a Payment Date) sufficient to cover the Approved
Tenant Work Expenses and Approved Leasing Expenses covered by such Request;
provided, however, in no event shall the aggregate amount of TI/LC Advances
exceed the TI/LC Portion.  TI/LC Advances will be used solely to fund Approved
Tenant Work Expenses and Approved Leasing Expenses.  Lender shall deposit all
TI/LC Advances into the TI/LC Reserve Account, which sums shall be held and
disbursed in accordance with the Reserve Agreement.

(b)

Lender’s obligation to make any TI/LC Advance shall be subject to the
satisfaction of each of the following conditions precedent to such TI/LC
Advance:

(i)

Both immediately prior to the making of such TI/LC Advance and also after giving
effect thereto, no Default or Event of Default shall have occurred and be
continuing;

(ii)

The representations and warranties made by Borrower and Guarantor in the Loan
Documents and in any guaranty or indemnity shall be true and correct in all
material respects on and as of the date of the making of such TI/LC Advance with
the same force and effect as if made on and as of such date to the extent such
representations and warranties are not matters which by their nature can no
longer be true and correct as   result of the passage of time;

(iii)

Lender shall have received (i) a notice of title continuation or title
endorsement, as appropriate, showing that since the making of any prior Advance
there has been no change in the state of title to the Property and no survey
exceptions with respect to the Property not theretofore approved by Lender, and
that no mechanic’s Liens or other Liens have been filed and remain filed with
respect to the Property other than Permitted Encumbrances, and (ii) an
endorsement to the title insurance policy issued to Lender, which endorsement
shall have the effect of (A) updating the date of such title insurance policy to
the date of the making of such TI/LC Advance and (B) increasing the coverage of
such title insurance policy by an amount equal to the amount of the TI/LC
Advance then being made;

(iv)

All fees and expenses payable to Lender, to the extent then due and payable,
shall have been (or contemporaneously are being) paid in full and all title
premiums and other title and survey charges shall have been (or
contemporaneously are being) paid in full; and

(v)

Lender shall have received (A) a copy of the Tenant Budget showing (1) the
amount of Approved Tenant Work Expenses incurred through and including the
requested TI/LC Advance and the corresponding line items relating thereto, and
(2) the remaining budgeted Approved Tenant Work Expenses and the corresponding
line items relating thereto, and (B) such other documents relating to such
disbursement as Lender may reasonably request

(vi)

Lender shall have reviewed and approved the Lease, the tenant and use of the
leased premises giving rise to the Approved Tenant Work Expenses and/or Approved
Leasing Expenses to be paid.

(c)

Notwithstanding Lender’s receipt of a Request, in no event shall Lender have any
obligation to make the TI/LC Advance requested therein to the extent such TI/LC
Advance is in an amount less than $200,000.00,

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except with respect to a TI/LC Advance requested to be made on the Last Advance
Date, or more than one (1) TI/LC Advance with respect to each Lease.
 Notwithstanding anything contained herein to the contrary, provided that no
Default or Event of Default has occurred and is continuing, Lender may consent
to a TI/LC Advance to be funded into the TI/LC Reserve Account upon Borrower’s
written request therefor prior to satisfying all of the conditions required in
this Article, to be disbursed pursuant to the provisions of the Reserve
Agreement.

(d)

If the entire TI/LC Portion is not advanced on or before the Last Advance Date,
the un-advanced balance of the TI/LC Portion may be advanced by Lender, at its
election in its sole discretion, and deposited in the TI/LC Reserve Account to
be disbursed in accordance with the terms and conditions of the Reserve
Agreement.

[Remainder of page intentionally left blank; signature page follows]

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[SIGNATURE PAGE TO PROMISSORY NOTE]

IN WITNESS WHEREOF, Borrower has duly executed this Note as of the day and year
first above written.

BORROWER:

 

 

 

TALON FIRST TRUST, LLC,

a Delaware limited liability company

 

 

 

By:

Talon OP, L.P., its sole member

 

 

 

 

By:

Talon Real Estate Holding Corp., its

general partner

 

 

 

 

By:

/s/ Matthew G. Kaminski

 

Name: Matthew G. Kaminski

 

Title: Chief Executive Officer

N-266954

PROMISSORY NOTE

--------------------------------------------------------------------------------

RCC REAL ESTATE, INC.,

a Delaware corporation

 

 

 

By:

/s/ David Bloom

 

Name: David Bloom

 

Title: President

N-266954

PROMISSORY NOTE

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[EXHIBITS OMITTED]

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