Promissory Note



 EXHIBIT 10.20 
 MULTIFAMILY NOTE 
 MULTISTATE – FIXED TO FLOAT 
 (REVISION DATE 10-01-2004) 
  

			
	US $4,900,000.00	 	Effective Date: as of December 6, 2005

 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 NorthMarq Capital, Inc., a Minnesota corporation, the principal sum of Four Million Nine Hundred Thousand and No/100 Dollars
(US $4,900,000.00), 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. 
 “Amortization Period” means a period of 360 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 is not open for business. 
 “Default Rate” means (i) during the Fixed Rate Period, an annual interest rate equal to four (4) percentage points above the Fixed Interest Rate; and (ii) during the Extension Period, 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. 
 “Extended Maturity Date” means, if the Extension Period becomes effective pursuant to this Note, the earlier of (i) January 1,
2017 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 thereunder. 
  


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 “Extension Period” means the twelve (12) consecutive calendar months period
commencing on the Scheduled Initial Maturity Date. 
 “Fixed Interest Rate” means the annual interest rate of five and
fifty-eight hundredths percent (5.58%). 
 “Fixed Rate Period” means the period beginning on the date of this Note and
continuing through December 31, 2015. 
 “Index Rate” means, for any Interest Adjustment Period, the Reference Bill®
Index Rate for such Interest Adjustment Period. 
 “Initial Maturity Date” means the earlier of (i) January 1, 2016
(the “Scheduled Initial 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 thereunder. 
 “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 February 1, 2006. 
 “Interest Adjustment Period” means each successive one calendar month period during the Extension Period and 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 

  


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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 Rate. 
 “Loan” means
the loan evidenced by this Note. 
 “Margin” means two and one-half (2.5) percentage points (250 basis points).

 “Maturity Date” means the Extended Maturity Date unless pursuant to Section 3(f) of this Note the Extension Period
does not or cannot become effective, in which case the Maturity Date means the Initial Maturity Date. 
 “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. For this Note, the Prepayment Premium Period equals the Yield Maintenance Period. 
 “Reference Bills®” means the unsecured general obligations of the Federal Home Loan Mortgage Corporation (“Freddie Mac”) designated by Freddie Mac as “Reference Bills®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 

  


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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. 
 “Treasury Security” means the9.25% U.S. Treasury Security due February 15, 2016. 
 “Window Period” means the Extension Period. 
 “Yield Maintenance Period” means the period from and
including the date of this Note until but not including the Scheduled Initial Maturity Date. 
 (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 3500 American Boulevard West, Suite 500, Bloomington, Minnesota 55431, or such other place as may be designated by Notice to Borrower from or on behalf of Lender. 
 3. Payments. 
 (a) During the Fixed
Rate Period, interest will accrue on the outstanding principal balance of this Note at the Fixed Interest Rate, subject to the provisions of Section 8 of this Note. During the Extension Period, 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. 
  


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 (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
in being calculated by the Fixed Interest Rate (during the Fixed Rate Period) or the applicable Adjustable Interest Rate (during the Extension Period), 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 Initial Maturity Date, principal and accrued interest 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 principal
and interest payable pursuant to this Section 3(d) on an Installment Due Date shall be Twenty-Eight Thousand Sixty- Eight and 10/100 Dollars ($28,068.10). 
 (e) Except as otherwise provided in this Section 3(e), all remaining Indebtedness, including all principal and interest, shall be due and payable by Borrower on the Initial Maturity Date. However, so long as
(i) the Initial Maturity Date has not occurred prior to the Scheduled Initial Maturity Date, and (ii) no Event of Default or event or circumstance which, with the giving of notice or passage of time or both, could constitute an Event of
Default exists on the Scheduled Initial Maturity Date, then the Extension Period automatically will become effective and the date for full payment of the Indebtedness automatically shall be extended until the Extended Maturity Date. If the Extension
Period becomes effective, monthly installments of principal and interest or interest only will 

  


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be payable during the Extension Period as provided in Section 3(f). Anything in Section 21 of the Security Instrument to the contrary
notwithstanding, during the Extension Period, Borrower will not request that Lender consent to, and Lender will not consent to, a Transfer that, absent such consent, would constitute an Event of Default. 
 (f) If the Extension Period becomes effective, beginning on February 1, 2016, and continuing until and including the monthly installment due on the
Extended Maturity Date, principal and accrued interest 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 principal and interest payable
pursuant to this Section 3(f) on an Installment Due Date shall be calculated so as to equal the monthly payment amount which would be payable on the Installment Due Date as if the unpaid principal balance of this Note as of the first day of the
Interest Adjustment Period immediately preceding the Installment Due Date was to be fully amortized, together with interest thereon at the Adjustable Interest Rate in effect for such Interest Adjustment Period, in equal consecutive monthly payments
paid on the first day of each calendar month over the Remaining Amortization Period. 
 (g) During the Extension Period, 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). 
 (h) All payments under this Note shall be made in immediately available U.S. funds. 
 (i) 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. 
 (j)
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 

  


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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. 
 (k) 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
(i) during the Fixed Rate Period, within ten (10) days after the installment or other amount is due, or (ii) during the Extension Period, 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, 

  


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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. 
  


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 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. 

  

			
	[Deferred]	  	Hazard Insurance premiums or other insurance premiums,
	[Collect]	  	Taxes,

  


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	[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. 

  


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 (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 voluntarily prepay all of the
unpaid principal balance of this Note on a Business Day designated as the date for such prepayment in a Notice from Borrower to Lender given at least 30 days prior to the date of such prepayment. Unless otherwise expressly provided in the Loan
Documents, Borrower may not voluntarily prepay less than all of the unpaid principal balance of this Note. 
 (c) Borrower acknowledges that
Lender has agreed that principal may be prepaid other than on the last calendar day of a month only because, for the purposes of the accrual of interest, any prepayment received by Lender on any day other than the last calendar day of the month
shall be deemed to have been received on the last calendar day of the month in which the prepayment occurs. 
 (d) 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(e). 
 (e) Except as
provided in Section 10(f), 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 whichever is the greater
of subsections (A) and (B) below: 
  

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

  

	 	(B)	the product obtained by multiplying: 

  


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

 by 
  

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

 by 
  

	 	(3)	the Present Value Factor. 

 For purposes of
subsection (B), the following definitions shall apply: 
 Monthly Note Rate: one-twelfth (1/12) of the Fixed Interest Rate,
expressed as a decimal calculated to five digits. 
 Prepayment Date: in the case of a voluntary prepayment, the date on which the
prepayment is made; in the case of the application by Lender of collateral or security to a portion of the principal balance, the date of such application. 
 Assumed Reinvestment Rate: one-twelfth (1/12) of the yield rate, as of the date 5 Business Days before the Prepayment Date, on the Treasury Security, as reported in The Wall Street Journal,
expressed as a decimal calculated to five digits. In the event that no yield is published on the applicable date for the Treasury Security, Lender, in its discretion, shall select the non-callable Treasury Security maturing in the same year as the
Treasury Security with the lowest yield published in The Wall Street Journal as of the applicable date. If the publication of such yield rates in The Wall Street Journal is discontinued for any reason, Lender shall select a security
with a comparable rate and term to the Treasury Security. The selection of an alternate security pursuant to this Section shall be made in Lender’s discretion. 
 Present Value Factor: the factor that discounts to present value the costs resulting to Lender from the difference in interest rates during the months remaining in the Yield Maintenance Period, using the
Assumed Reinvestment Rate as the discount rate, with monthly compounding, expressed numerically as follows: 
 

 
 n = number of months or partial months remaining in Yield Maintenance Period 
 ARR = Assumed Reinvestment Rate 
  


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 (f) 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. 
 (g) 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. 
 (h) 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 the prepayment premium provisions of this Note are a material part of the consideration for the Loan, and that the terms of this Note are in other respects more favorable to Borrower as
a result of the Borrower’s voluntary agreement to the 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. 
  


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 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. 
  


 PAGE 14 








 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: 
 [X]    Exhibit A    Modifications to Multifamily
Note 
 [The remainder of this page is intentionally left blank, signature page follows.] 
  


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 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. 
  

			
	 Pinehurst Associates, LLC,
 a Florida limited
liability company

		
	By:	 	 /s/ Robert E. Spielman

		 	Robert E. Spielman, Manager
	
	 Borrower’s Social Security/Employer ID Number:
 20-3824528






			
	Signature Page – Pinehurst Apartments – Note	 	PAGE S-1










					
	PAY TO THE ORDER OF	 	  
	 	,
	WITHOUT RECOURSE, AS OF THE 6TH DAY OF DECEMBER, 2005.	 	

  

			
	 NorthMarq Capital, Inc.,
 a Minnesota
corporation

		
	By:	 	 /s/ Paul W. Cairns

		 	Paul W. Cairns
		 	Vice President





			
	Signature Page – Pinehurst Apartments – Note	 	PAGE S-2









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

 None. 
  


 PAGE A-1