Exhibit
10.3


 


FHLMC #534382894


 


MULTIFAMILY
NOTE-CME


MULTISTATE — FIXED RATE


(REVISION DATE 8-14-2009)


 


	
  US $89,914,000.00

  	
   

  	
  Effective Date:
  As of October 28, 2009

  



 


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 WACHOVIA MULTIFAMILY
CAPITAL, INC., a Delaware corporation, the principal sum of EIGHTY-NINE MILLION NINE HUNDRED FOURTEEN THOUSAND AND 00/100 DOLLARS
($89,914,000.00), with interest on the
unpaid principal balance, as hereinafter provided.


 


1.             Defined Terms.


 


(a)           As used in this Note:


 


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


 


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


 


“Cut-off Date” means the twelfth (12th) Installment Due Date.


 


“Default Rate” means an annual interest rate
equal to four (4) percentage points above the Fixed Interest Rate.  However, at no time will the Default Rate
exceed the Maximum Interest Rate.


 


“Defeasance Period” is the period beginning
the day after the Defeasance Date until but not including the first day of the
Window Period.  The Defeasance Period
only applies if this Note is assigned to a REMIC trust prior to the Cut-off
Date.


 


“Fixed Interest Rate” means the annual
interest rate of Five and 57/100 percent (5.57%).


 


“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 December 1, 2009.


 


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


 


“Loan” means the loan evidenced by this
Note.


 


“Lockout Period” means the period beginning
on the day that this Note is assigned to a REMIC trust until and including the
Defeasance Date.  The Lockout Period only
applies if this Note is assigned to a REMIC trust prior to the Cut-off Date.


 


“Maturity Date” means  the earlier of  (i) November 1,
2019 (the “Scheduled Maturity Date”),  and (ii) the
date on which the unpaid principal balance of this Note becomes due and payable
by acceleration or otherwise pursuant to the Loan Documents or the exercise by
Lender of any right or remedy under any Loan Document.


 


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


 


“Prepayment Premium Period” means the period
during which, if a prepayment of principal occurs, a prepayment premium will be
payable by Borrower to Lender.  The
Prepayment Premium Period is the period from and including the date of this
Note until but not including the earlier to occur of the following (i) the
day that this Note is assigned to a REMIC trust if this Note is assigned to a
REMIC trust prior to the Cut-off Date or (ii) the first day of the Window
Period.  The Prepayment Premium Period
only applies if this Note is not assigned to a REMIC trust or if this Note is
assigned to a REMIC trust on or after the Cut-off Date.


 


“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 the 3.625% U.S.
Treasury Security due August 15, 2019.


 


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


 


“Yield
Maintenance Period” means
the period from and including the date of this Note until but not including the
earlier to occur of the following (i) the first day that the Note is
assigned to a REMIC trust or (ii) May 1, 2019
(the “Yield Maintenance Expiration Date”).  The Yield Maintenance Period only applies
if this Note is not assigned to a REMIC trust or if this Note is assigned to a
REMIC trust on or after the Cut-off Date.


 


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(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 375 Park Avenue, 9th Floor, New
York, New York 10152, or such other place as may be designated by Notice to
Borrower from or on behalf of Lender.


 


3.             Payments.


 


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


 


(b)           Interest under this Note
shall be computed, payable and allocated on the basis of an actual/360 interest
calculation schedule (interest is payable for the actual number of days in each
month, and each month’s interest is calculated by multiplying the unpaid
principal amount of this Note as of the first day of the month for which
interest is being calculated by the Fixed Interest Rate, dividing the product
by 360, and multiplying the quotient by the number of days in the month for
which interest is being calculated).  The
portion of the monthly installment of principal and interest under this Note
attributable to principal and the portion 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 installment 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),
Section 10 and in Section 11, accrued interest will be payable in
arrears.


 


(d)           (i)            Beginning
on the First Installment Due Date, and continuing until and including the
monthly installment due on November 1, 2011, accrued interest only shall
be payable by Borrower in consecutive monthly installments due and payable on
the first day of each calendar month. The amount of each monthly installment of
interest only payable pursuant to this Subsection 3(d)(i) on an
Installment Due Date shall vary, and shall equal $13,911.69400
multiplied by the number of days in the month prior to the Installment Due
Date.


 


(ii)           Beginning on December 1, 2011, and continuing
until and including the monthly installment due on the Maturity Date, principal
and accrued interest shall be 


 


3

















 


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 Subsection 3(d)(ii) on an Installment Due Date shall be Five Hundred Fourteen Thousand Four Hundred Seventy-Seven And 72/100
Dollars ($514,477.72).


 


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


 


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


 


(g)           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.


 


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


 


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 Section 11, 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 


 


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date of acceleration.  If
prepayment occurs thereafter, Lender shall recalculate the prepayment premium
as of the actual prepayment date.


 


7.             Late Charge.


 


(a)           If any monthly installment
of interest or principal and interest or other amount payable under this Note
or under the Security Instrument or any other Loan Document is not received in
full by Lender within ten (10) days after the installment or other amount
is due, counting from and including the date such installment or other amount
is due (unless applicable law requires a longer period of time before a late
charge may be imposed, in which event such longer period shall be substituted),
Borrower shall pay to Lender, immediately and without demand by Lender, a late
charge equal to five percent (5%) of such installment or other amount due
(unless applicable law requires a lesser amount be charged, in which event such
lesser amount shall be substituted).


 


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


 


8.             Default Rate.


 


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


 


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


 


(c)           Borrower acknowledges that (i) its
failure to make timely payments will cause Lender to incur additional expenses
in servicing and processing the Loan, (ii) during the time that any
monthly installment under this Note is delinquent for thirty (30) days or more,
Lender will incur additional costs and expenses arising from its loss of the
use of the money due and from the adverse impact on Lender’s ability to meet
its other obligations and to take advantage of other investment opportunities;
and (iii)  it is extremely difficult and impractical to determine those
additional costs and expenses.  Borrower
also acknowledges that, during the time that any monthly installment under this
Note is delinquent for thirty (30) days or more or any other Event 


 


5

















 


of Default has occurred and is continuing,
Lender’s risk of nonpayment of this Note will be materially increased and
Lender is entitled to be compensated for such increased risk.  Borrower agrees that the increase in the rate
of interest payable under this Note to the Default Rate represents a fair and
reasonable estimate, taking into account all circumstances existing on the date
of this Note, of the additional costs and expenses Lender will incur by reason
of the Borrower’s delinquent payment and the additional compensation Lender is
entitled to receive for the increased risks of nonpayment associated with a
delinquent loan.


 


9.             Limits on Personal Liability.


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


	
  [Collect]

  	
   

  	
  Hazard Insurance
  premiums or other insurance premiums,

  
	
  [Collect]

  	
   

  	
  Taxes,

  
	
  [Deferred]

  	
   

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

  
	
  [N/A]

  	
   

  	
  ground rents,

  
	
  [Deferred]

  	
   

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

  



 


(v)           Borrower engages in any willful act of
material waste of 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 or any SPE Equity Owner fails to
comply with Section 33 of the Security Instrument;


 


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(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;


 


(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;


 


(iv)          Borrower or any SPE Equity Owner
voluntarily files for bankruptcy protection under the United States Bankruptcy
Code;


 


(v)           Borrower or any SPE Equity Owner
voluntarily becomes subject to any reorganization, receivership, insolvency
proceeding, or other similar proceeding pursuant to any other federal or state
law affecting debtor and creditor rights;


 


(vi)          The Mortgaged Property or any part
thereof becomes an asset in a voluntary bankruptcy or becomes subject to any
reorganization, receivership, insolvency proceeding, or other similar
proceeding pursuant to any other federal or state law affecting debtor and
creditor rights;


 


(vii)         an
order of relief is entered against Borrower or any SPE Equity Owner pursuant to
the United States Bankruptcy Code or other federal or state law affecting
debtor and creditor rights in any involuntary bankruptcy proceeding initiated
or joined in by a “Related Party;”
or


 


(viii)        an
involuntary bankruptcy or other involuntary insolvency proceeding is commenced
against Borrower or any SPE Equity Owner (by a party other than Lender) but
only if Borrower or such SPE Equity Owner has failed to use commercially
reasonable efforts to dismiss such proceeding or has consented to such
proceeding.


 


For
purposes of this Section, the term “Related
Party” means:


 


(A)          Borrower, any guarantor or any SPE Equity Owner; and


 


(B)           any Person that holds, directly or indirectly, any
ownership interest in or right to manage Borrower, any guarantor or any SPE
Equity Owner, including without limitation, any shareholder, member or partner
of Borrower, any guarantor or any SPE Equity Owner; and


 


8

















 


(C)           any Person in which any ownership interest (direct or
indirect) or right to manage is held by Borrower, any guarantor, any SPE Equity
Owner or any partner, shareholder or member of, or any other Person holding an
interest in, Borrower, any guarantor or any SPE Equity Owner; and


 


(D)          any other creditor of Borrower that is related by
blood, marriage or adoption to Borrower, any guarantor, any SPE Equity Owner or
any partner, shareholder or member of, or any other Person holding an interest
in, Borrower, any guarantor or any SPE Equity Owner.


 


If Borrower, any
guarantor, any SPE Equity Owner or any Related Party has solicited creditors to
initiate or participate in any proceeding referred to in this Section 9,
regardless of whether any of the creditors solicited actually initiates or
participates in the proceeding, then such proceeding shall be considered as
having been initiated by a Related Party.


 


(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 During the Prepayment Premium Period (Section Applies Prior to
Securitization and if Loan is Assigned to REMIC Trust On or After the Cut-off
Date).


 


(a)           This Section 10 shall
apply (i) prior to the date that this Note is assigned to a REMIC trust
and (ii) if this Note is assigned to a REMIC trust on or after the Cut-off
Date.  This Section 10 shall be of
no effect if this Note is assigned to a REMIC trust prior to the Cut-off Date.


 


(b)           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.


 


(c)           During the Prepayment
Premium Period, the Borrower may voluntarily prepay all of the unpaid principal
balance of this Note on an
Installment Due Date so long as Borrower  designates the
date for such prepayment in a Notice from Borrower to Lender given at least 30
days prior to the date of such prepayment. 
Unless Lender has previously notified Borrower of 


 


9

















 


the expiration of the Prepayment Premium
Period, upon receipt of such Notice from Borrower, Lender will notify Borrower
if the Note has been assigned to a REMIC trust and the Prepayment Premium
Period has expired.  If an
Installment Due Date (as defined in Section 1(a)) falls on a day which is
not a Business Day,  then  with respect to payments made under this Section 10
only, the term “Installment Due Date” shall mean the Business Day immediately
preceding the scheduled Installment Due Date.


 


(d)           Notwithstanding
Section 10(c) above, Borrower may voluntarily prepay all of the
unpaid principal balance of this Note on a Business Day other than an
Installment Due Date if Borrower provides Lender with the Notice set
forth in Section 10(c) above and meets the other requirements set
forth in this subsection.  Borrower
acknowledges that Lender has agreed that Borrower may prepay principal on a
Business Day other than an Installment Due Date only because Lender shall deem
any prepayment received by Lender on any day other than an Installment Due Date
to have been received on the Installment Due Date immediately following such
prepayment and Borrower shall be responsible for all interest that would have
been due if the prepayment had actually been made on the Installment Due Date
immediately following such prepayment.


 


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


 


(f)            Except as provided in Section 10(g) below,
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
in the form of U.S. currency.  The
prepayment premium shall be computed as follows:


 


(i)            For any prepayment made during the Yield
Maintenance Period, the prepayment premium shall be equal to the following:


 


the product obtained by
multiplying:


 


(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 this Section 10(f)(i),
the following definitions shall apply:


 


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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 close of the trading session which is 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 10 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 = the number of months remaining in the
Yield Maintenance Period; provided, however, if a prepayment occurs on an
Installment Due Date, then the number of months remaining in the Yield
Maintenance Period shall be calculated beginning with the month in which such
prepayment occurs and if such prepayment occurs on a Business Day other than an
Installment Due Date, then the number of months remaining in the Yield
Maintenance Period shall be calculated beginning with the month immediately
following the date of such prepayment.


 


ARR = Assumed Reinvestment Rate


 


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(ii)                                  For any prepayment made after the
expiration of the Yield Maintenance Period but during the remainder of the
Prepayment Premium Period, the prepayment premium shall be 1.0% of the amount
of principal being prepaid.


 


(g)                                 Notwithstanding
any other provision of this Section 10, no prepayment premium shall be
payable with respect to (i) any prepayment made during the Window Period,
or (ii) any prepayment occurring as a result of the application of any
insurance proceeds or condemnation award under the Security Instrument.


 


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


 


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


 


11.                               Voluntary and Involuntary
Prepayments During the Lockout Period and During the Defeasance Period (Section Applies if
Loan is Assigned to REMIC Trust Prior to the Cut-off Date).


 


(a)                                  This
Section 11 shall apply in the event this Note is assigned to a REMIC trust
prior to the Cut-off Date.  This
Section 11 shall be of no effect if this Note is assigned to a REMIC trust
on or after the Cut-off Date.


 


(b)                                 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.


 


(c)                                  Borrower may
not voluntarily prepay any portion of the principal balance of this Note during
the Lockout Period or during the Defeasance Period; provided, however, any 


 


12

















 


prepayment occurring as a
result of the application of any insurance proceeds or condemnation award under
the Security Instrument shall be permitted during the Lockout Period and during
the Defeasance Period.  If any portion of
the principal balance of this Note is prepaid during the Lockout Period or
during the Defeasance Period by reason of the application by Lender of any
proceeds of collateral or other security to any portion of the unpaid principal
balance of this Note or following a determination that the prohibition on
voluntary prepayments during the Lockout Period or during the Defeasance Period
is in contravention of applicable law, then Borrower must also pay to Lender
upon demand by Lender, a prepayment premium equal to five percent (5.0%) of the
amount of principal being prepaid.


 


(d)                                 Notwithstanding
any other provision of this Section 11, 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.


 


(e)                                  After the
expiration of the Lockout Period and the Defeasance Period, Borrower may
voluntarily prepay all of the unpaid principal balance of this Note on an
Installment Due Date so long as Borrower designates the date for such
prepayment in a Notice from Borrower to Lender given at least 30 days prior to
the date of such prepayment.  If an
Installment Due Date (as defined in Section 1(a)) falls on a day which is
not a Business Day,  then  with respect to payments made under this
Section 11 only, the term “Installment Due Date” shall mean the Business
Day immediately preceding the scheduled Installment Due Date.


 


(f)                                    Notwithstanding
Section 11(e) above, following the end of the Lockout Period and the
Defeasance Period, Borrower may voluntarily prepay all of the unpaid principal
balance of this Note on a Business Day other than an Installment Due Date if
Borrower provides Lender with the Notice set forth in
Section 11(e) and meets the other requirements set forth in this
subsection.  Borrower acknowledges that
Lender has agreed that Borrower may prepay principal on a Business Day other
than an Installment Due Date only because Lender shall deem any prepayment
received by Lender on any day other than an Installment Due Date to have been
received on the Installment Due Date immediately following such prepayment and
Borrower shall be responsible for all interest that would have been due if the
prepayment had actually been made on the Installment Due Date immediately
following such prepayment.


 


(g)                                 Unless otherwise
expressly provided in the Loan Documents, Borrower may not voluntarily prepay
less than all of the unpaid principal balance of this Note.  In order to voluntarily prepay all 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.


 


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


 


13

















 


(i)                                     Borrower
recognizes that any prepayment of any of the unpaid principal balance of this
Note, whether voluntary or involuntary or resulting from an Event of Default by
Borrower, will result in Lender’s incurring loss, including reinvestment loss,
additional expense and frustration or impairment of Lender’s ability to meet
its commitments to third parties. 
Borrower agrees to pay to Lender upon demand damages for the detriment
caused by any prepayment, and agrees that it is extremely difficult and
impractical to ascertain the extent of such damages.  Borrower therefore acknowledges and agrees
that the formula for calculating prepayment premiums set forth in
Section 11(c) of this Note represents a reasonable estimate of the
damages Lender will incur because of a prepayment.  Borrower further acknowledges that the
lockout and prepayment premium provisions of this Note are a material part of
the consideration for the Loan, and that the terms of this Note are in other
respects more favorable to Borrower as a result of the Borrower’s voluntary
agreement to the prepayment premium provisions.


 


(j)                                     If, after the
expiration of the Lockout Period, the Borrower defeases the Loan as described
in Section 44 of the Security Instrument during the Defeasance Period,
Borrower shall not have the right to voluntarily prepay any of the principal of
this Note at any time.


 


12.                               DEFEASANCE
(Section Applies
if Loan is Assigned to REMIC Trust Prior to the Cut-off Date).


 


(a)                                  This
Section 12 shall apply in the event this Note is assigned to a REMIC trust
prior to the Cut-off Date.  This
Section 12 shall be of no effect if this Note is assigned to a REMIC trust
on or after the Cut-off Date.


 


(b)                                 Section 5
of this Note is amended by adding a new paragraph at the end thereof as
follows:


 


If Borrower obtains a release of the Mortgaged
Property from the lien of the Security Instrument pursuant to Section 44
of the Security Instrument, the Indebtedness shall be secured by the Pledge
Agreement and reference shall be made to the Pledge Agreement for other rights
of Lender as to collateral for the Indebtedness.


 


(c)                                  Section 9
of this Note is amended by adding a new paragraph at the end thereof as
follows:


 


If Borrower obtains a release of the Mortgaged
Property from the lien of the Security Instrument pursuant to Section 44
of the Security Instrument, Borrower shall have no personal liability under
this Note or the Pledge Agreement for the repayment of the Indebtedness or for
the performance of any other obligations of Borrower under this Note or the
Pledge Agreement (other than any liability under Section 18 of the
Security Instrument for events that occur prior to the Defeasance Closing Date,
whether discovered before or after the Defeasance Closing Date), 


 


14

















 


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 collateral held by
Lender under the Pledge Agreement as security for the Indebtedness.


 


(d)                                 Section 21(a) of
this Note is amended by adding a new paragraph at the end thereof as follows:


 


If Borrower obtains a release of the Mortgaged
Property from the lien of the Security Instrument pursuant to Section 44
of the Security Instrument, all Notices, demands and other communications required or permitted to
be given pursuant to this Note shall be given in accordance with the Pledge
Agreement.


 


13.                               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.  Borrower acknowledges and agrees that, in
connection with each request by Borrower under this Note or any Loan Document,
Borrower shall pay all reasonable Attorneys’ Fees and Costs and expenses
incurred by Lender, including any fees charged by the Rating Agencies,
regardless of whether the matter is approved, denied or withdrawn.


 


14.                               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.


 


15.                               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.


 


16.                               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 


 


15

















 


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.


 


17.                               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.


 


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


 


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


 


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


 


21.                               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, 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.


 


22.                               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 


 


16

















 


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.


 


23.                               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.


 


24.                               State-Specific Provisions.  N/A.


 


[NO FURTHER TEXT ON THIS PAGE]


 


17

















 


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


 


[SIGNATURE CONTINUED ON FOLLOWING PAGE]


 


18

















 


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


 


	
   

  	
  BORROWER:

  
	
   

  	
   

  
	
   

  	
  HAMILTON
  PARK TOWERS, LLC,
  a

  
	
   

  	
  Delaware limited
  liability company

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Harold Brown

  
	
   

  	
   

  	
  Title:

  	
  Manager

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  New
  Real, Inc.,

  
	
   

  	
   

  	
  a Massachusetts
  Corporation,

  
	
   

  	
   

  	
  a Manager

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  	
  Ronald Brown

  
	
   

  	
   

  	
   

  	
  Title:

  	
  President

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  27-1136900

  
	
   

  	
  Borrower’s
  Social Security/Employer ID Number

  



 


19

















 


PAY
TO THE ORDER OF:  FEDERAL HOME LOAN
MORTGAGE CORPORATION WITHOUT RECOURSE AS OF THE 28th DAY OF
OCTOBER, 2009.


 


LENDER:


 


WACHOVIA MULTIFAMILY CORPORATION, a Delaware corporation


 


 


	
  By:

  	
   

  	
   

  
	
  Name:

  	
  Marie Carolo

  	
   

  
	
  Title:

  	
  Director

  	
   

  



 


1

















 


EXHIBIT A


 


MODIFICATIONS TO MULTIFAMILY NOTE


 


The following
modifications are made to the text of the Note that precedes this Exhibit.


 


1.                                       Section 9(c)(iii) of the Note
is hereby deleted in its entirety and replaced as follows:


 


“(iii)               Borrower fails to comply beyond any applicable notice and cure period with
Section 14(g) or (i) of the Security Instrument relating to the
delivery of books and records, statements, schedules and reports.


 


2.                                       Section 9(c)(i) of the Note is
hereby amended by deleting the first sentence thereof and substituting the
following:


 


“(i)                     Borrower fails to pay to Lender upon
demand after an Event of Default (A) all Rents to which Lender is entitled
under Section 3(a) of the Security Instrument, (B) the amount of
all security deposits collected by Borrower from tenants then in residence, and
(C) the amount of any unearned Prepaid Rents that Borrower is permitted to
receive and collect under Section 4(g) of the Security Instrument (by
way of example, in the event that Borrower has collected Prepaid Rents for 12
months from a student tenant under a 12-month lease and there is an Event of
Default in month 7 of the 12-month lease, Borrower shall be liable to Lender
for 5 months of such Prepaid Rent).”


 


3.                                       Section 9(f) of the Note is
hereby amended by adding the following new paragraph:


 


“(ix)                Borrower fails to deliver to Lender
within thirty (30) days following the date hereof (A) a fully executed
(including the signature of the Clearing Bank) original of the (a) Cash
Management Agreement — CME and (b) Clearing Account Agreement- CME with
respect to the Mortgaged Property, on Freddie Mac’s approved form for such
documents containing only such modifications that are acceptable to Lender and
(B) an opinion of counsel in form acceptable to Lender with regard to the
enforceability of the Cash Management Agreement and Clearing Account Agreement
and with regard to the Lender’s perfection of a security interest in the
accounts established therein.”


 


A-1