ex10-1.htm


    
      

    

     

    Exhibit
      10.1


    Loan
      Number: L0735100

    


    PROMISSORY
      NOTE

    


    $21,500,000.00 

    December
      14, 2007

    


    FOR
      VALUE RECEIVED, LANTANA OFFICE PROPERTIES I, L.P., a
      Texas limited partnership (the "Maker"), whose Federal Tax
      Identification Number is 74-2997008 hereby promises to pay to the order of
      THE
      LINCOLN NATIONAL LIFE INSURANCE COMPANY, an Indiana corporation and any
      subsequent successors or assigns as holders of this Note (the
      "Holder" or "Holders") in the manner
      hereinafter provided, the principal sum of Twenty-One Million Five Hundred
      Thousand and 00/100 DOLLARS ($21,500,000.00) together with interest on the
      outstanding principal balance from the date of the initial disbursement (for
      purposes of this Note, "disbursement" means the date funds are wire transferred
      from Holder's account) of all or a part of the principal of this Note (the
      "Disbursement Date") until paid in full at the rate of five and
      ninety-nine hundredths percent (5.99%) per annum (the "Contract
      Rate") in accordance with the provisions hereinafter set
      forth.

    


    1.           Payment
      of Principal and Interest.  Principal and interest hereunder shall
      be payable as follows (each of the payments described in this section, except
      for the Interim Interest Payment defined below, are each referred to as a
“Monthly Payment”):

    


    (a)  On
      the
      Disbursement Date, interim interest accrued in advance (calculated on the basis
      of a 360-day year containing twelve 30-day months) for the actual number of
      days
      which will elapse beginning with the Disbursement Date through the last day
      of
      the calendar month in which the Disbursement Date occurs (the
“Interim Interest Payment”); and

    


    (b)           Commencing
      on the first day of February, 2008 (the "First Payment Date")
      and on the first day of each month (each a “Payment Date”)
      thereafter until this Note matures, principal and interest in consecutive equal
      installments of One Hundred Twenty Eight Thousand Seven Hundred Sixty-Five
      and
      00/100 DOLLARS ($128,765.00); and

    


    (c)           On
      January 1, 2018 (the "Maturity Date"), the entire unpaid
      principal amount, together with accrued and unpaid interest thereon, and all
      other sums due under this Note or under any other documents evidencing or
      securing this Note (collectively, the "Loan Documents"), shall
      be due and payable in full.

    


    Except
      as
      set forth in 1(a) above, interest shall be payable in arrears and calculated
      on
      the basis of a 360-day year containing twelve 30-day months.  In the
      event a Payment Date or the Maturity Date is not a Business Day (as herein
      defined) then such Payment Date or Maturity Date as the case may be, shall
      be
      deemed to be the next following Business Day.  As used herein,
“Business Day” means any day in which the Holder is open for
      the conduct of substantially all of its investment related
      business.


    
      
         

      

      
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    2.           Payment
      Information.  Until directed otherwise in writing by the Holder,
      all payments under this Note shall be made by Electronic Fund Transfer debit
      entries to the Maker's account at an Automated Clearing House ("ACH") member
      bank.  Each payment shall be initiated by the Holder (or, at Holder's
      option, by its loan servicing agent) through the ACH Network for settlement
      on
      the respective due dates.  Prior to each payment due date, the Maker
      shall deposit and/or maintain sufficient funds in its account to cover each
      debit entry.  Notwithstanding the foregoing, the failure, for whatever
      reason, of the Electronic Funds Transfer debit entry transaction to be timely
      completed shall not relieve the Maker from its obligations to promptly and
      timely make all payments called for under this Note when due and to comply
      with
      Maker's other obligations hereunder.

    


    3.           Security
      for Note.  The payment of this Note and all other sums due Holder
      is secured by the Indenture (as hereinafter defined) and the other Loan
      Documents.  Except as otherwise defined herein, all of the terms and
      provisions contained in the Indenture and the other Loan Documents are hereby
      incorporated herein by express reference.

    


    4.           Late
      Charges.  Should any Monthly Payment required under this Note not
      be paid in full within ten (10) days from the date such payment is due, Maker
      acknowledges that the Holder will incur extra expenses for the handling of
      the
      delinquent payment and servicing the indebtedness evidenced hereby, and that
      the
      exact amount of these extra expenses is extremely difficult and impractical
      to
      ascertain, but that a charge of four percent (4%) of the amount of the
      delinquent payment (the "Late Charge") would be a fair
      approximation of the expense so incurred by Holder.  If applicable law
      requires a lesser charge, however, then the maximum charge permitted by such
      law
      may be charged by Holder for said purpose.  If applicable law requires
      that more than a ten (10) day period elapse from the date a payment is due
      until
      the Late Charge can be imposed, Holder will impose the Late Charge at the
      earliest date permitted by such law.  Therefore, Maker shall, in such
      event, without further notice, and without prejudice to the right of Holder
      to
      collect any other amounts provided to be paid hereunder or under the Indenture
      or the other Loan Documents, or to declare an Event of Default (as defined
      below) pay to Holder the Late Charge to compensate Holder for expenses incurred
      in handling delinquent payments.

    


    5.           Interest
      Payable Upon Default.  If there occurs an Event of Default, under
      this Note or the Indenture or under any of the other Loan Documents, then the
      unpaid principal amount of this Note, and, to the extent permitted by applicable
      law, all accrued and unpaid interest thereon, shall bear interest at the lesser
      of (i) the Contract Rate plus four percent (4%) per annum compounded
      monthly, or (ii) the maximum rate permitted by applicable
      law (the "Default Rate") from the date of expiration of any
      applicable cure or grace period until such time, if any, as the Event of Default
      is cured and the Indenture and this Note are reinstated as permitted by
      applicable law, or otherwise until such time as the unpaid principal amount
      of
      this Note and all other indebtedness evidenced by this Note or the other Loan
      Documents are fully repaid, whichever is earlier.

    


    6.           Events
      of Default.  An "Event of Default" shall exist
      under this Note (a) in the event Maker shall fail to make any payment due under
      this Note, other than the final payment or the Prepayment Premium (as defined
      herein), within ten (10) days from the date when such payment is due; or (b)
      in
      the event Maker shall fail to make the final payment or the Prepayment Premium
      when


    
      
         

      

      
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    such
      payment is due; or (c) if there shall exist an Event of Default as that term
      is
      defined in the Indenture or in any of the other Loan Documents.

    


    7.           Additional
      Payments.  The additional payments called for under paragraphs 4
      and 5 shall be in addition to, and shall in no way limit, any other rights
      and
      remedies provided for in this Note, the Indenture or in any of the other Loan
      Documents, as well as all other remedies provided by law.

    


    8.           Payment
      of Taxes and Expenses.

    


    (a)           Maker
      further promises to pay to Holder, immediately upon written notice from Holder,
      (i) all recordation, transfer, stamp, documentary or other fees or taxes levied
      on Holder (exclusive of Holder's income taxes) by reason of the making or
      recording of this Note, the Indenture or any of the other Loan Documents, and
      (ii) all intangible property taxes levied upon any Holder of this Note or
      mortgagee, beneficiary, or lender under the Indenture or secured party under
      the
      other Loan Documents.

    


    (b)           Maker
      further promises to pay to Holder, immediately upon written notice from Holder,
      all out-of-pocket costs, expenses, disbursements, escrow fees, title charges
      and
      reasonable legal fees and expenses actually incurred by Holder, its counsel
      and
      loan servicer as a result of Holder's entering into the loan transaction
      evidenced by this Note, including without limitation, those incurred in (i)
      connection with all requests by Borrower for consent or approval or waivers
      under this Note or the other Loan Documents; and (ii) the collection or
      attempted collection following an Event of Default, or negotiation and
      documentation of any settlement or workout of the principal amount of this
      Note,
      the interest thereon or any installment or other payment due hereunder; and
      (iii) any suit or proceeding whatsoever in regard to this Note or to protect
      or
      sustain any other Loan Document, including, without limitation, in any
      bankruptcy proceeding or judicial or nonjudicial foreclosure
      proceeding.

    


    9.           Application
      of Payments.  All payments from Maker shall be applied as
      follows:  (i) to unpaid Late Charges and costs of collection and to
      any other costs and expenses due and payable to Holder under the Loan Documents;
      (ii) to the Prepayment Premium due, if any; (iii) to interest accrued and unpaid
      on the unpaid balance hereof; and (iv) the balance to unpaid
      principal.  Notwithstanding the foregoing, during the existence of an
      Event of Default, Holder may apply payments received on any amounts due under
      the Note, the Indenture, or any of the other Loan Documents as Holder may
      determine in its sole discretion.

    


    10.           Prepayment.  Maker
      may not prepay this Note in whole or in part except as specifically provided
      herein.

    


               10.1  Prepayment.  Maker
      is prohibited from voluntarily prepaying this Note until February 1, 2010 (the
      “No-Prepayment Period”).  Subsequent to the
      No-Prepayment Period, Maker may voluntarily prepay this Note in whole, but
      not
      in part, on any Payment Date, provided Maker gives Holder not less than thirty
      (30) nor more than sixty (60) days’ written notice specifying the date of
      prepayment (the “Prepayment Date”) and pays a prepayment fee
      (the “Prepayment Premium”) as


    
      
         

      

      
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    hereinafter
      calculated. 

    


    The
      Prepayment Premium shall be the greater of (a) one percent (1%) of the
      outstanding principal balance of this Note on the Prepayment Date, or (b) the
      result of (i) the sum of the present values (determined over the Remaining
      Term
      using periodic monthly intervals and a discount rate equal to the Treasury
      Yield
      plus twenty five (25) basis points divided by twelve (12)) of all the then
      remaining unpaid Payments due from the Prepayment Date through the Maturity
      Date
minus (ii) the outstanding principal balance of this Note as of the
      Prepayment Date.  The “Remaining Term” is the length
      of time from the Prepayment Date through the Maturity Date. The
“Treasury Yield” is the average yield in percent per annum of
      the Treasury Constant Maturities as published in document H.15(519) (presently
      published by the Board of Governors of the Federal Reserve System titled
“Federal Reserve Statistical Release”) for the calendar week
      immediately preceding the calendar week in which the Prepayment Date
      falls.  If the Remaining Term does not equal one of the maturities of
      the Treasury Constant Maturities, then the Treasury Yield will be determined
      by
      interpolating linearly between two Treasury Constant Maturities reported in
      such
      Statistical Release, one having a maturity as close as possible to, but greater
      than, the Remaining Term and one having a maturity as close as possible to,
      but
      less than, the Remaining Term.  If the publishing of the yield of
      Treasury Constant Maturities is ever discontinued, then the Treasury Yield
      shall
      be based upon the index which the Board of Governors of the Federal Reserve
      System publishes in replacement or, if no such replacement index is published,
      the index which, in Holder's determination, most nearly corresponds to the
      yield
      of the Treasury Constant Maturities. However, under no circumstances shall
      the
      Prepayment Premium ever be less than one percent (1%) of the then outstanding
      principal balance due under this Note. As used herein the word
“Payments” shall mean any and all sums due under this Note or
      under any other documents evidencing or securing this Note, including, without
      limitation, Monthly Payments (as defined herein) and the entire unpaid principal
      amount of this Note, together with all accrued and unpaid interest due
      thereon.

    


    Maker
      acknowledges that Holder (a) has advanced the amounts evidenced by this Note
      with the expectation that such amounts would be outstanding for a period at
      least equal to the No-Prepayment Period, and would not have been willing to
      advance such amounts on these terms for a shorter period of time and therefore,
      Holder may refuse in its sole discretion to accept a voluntary prepayment prior
      to the end of the No-Prepayment Period, even which such prepayment is
      accompanied by a prepayment premium,  (b) in making the loan evidenced
      by this Note, is relying on Maker's creditworthiness and its agreement to pay
      in
      strict accordance with the terms set forth in this Note, and (c) would not
      make
      the loan without full and complete assurance by Maker of its agreement not
      to
      prepay all or a part of the principal of this Note except as expressly permitted
      herein and in the Indenture.  Maker has been advised and acknowledges
      that Holder is relying on the receipt of payments under this Note through the
      Maturity Date to, among other things, match and support its obligations under
      contracts entered into by Holder with third parties and that in the event of
      a
      prepayment, Holder could suffer loss and additional expenses which are extremely
      difficult and impractical to ascertain.  The Prepayment Premium is a
      good faith resolution by Maker and Holder of the damages Holder would suffer,
      and it is not intended as a penalty.  Accordingly, should this Note be
      paid for any reason, whether voluntary or involuntary, prior to the end of
      the
      No-Prepayment Period or prior to the Maturity Date then Maker shall pay to
      Holder a Prepayment Premium calculated in accordance with this Section 10.1,
      except as otherwise expressly permitted herein or in


    
      
         

      

      
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    the
      Indenture.

    


    Maker
      expressly acknowledges that pursuant to the provisions of this Note and except
      as otherwise provided in the Indenture, Maker has no right to prepay this Note
      in whole or in part without prepayment of the Prepayment Premium, and Maker
      shall be liable for the payment of the Prepayment Premium upon any payment
      of
      the outstanding principal of this Note before its scheduled due date, whether
      voluntary or involuntary or after acceleration of the Note whether the
      acceleration of the maturity hereof is due to Maker's default or
      otherwise.  Furthermore, Maker waives any rights it may have under any
      applicable state laws as they relate to any prepayment restrictions contained
      in
      this Section 10.1 or otherwise contained in this Note and expressly acknowledges
      that Holder has made the loan evidenced by this Note in reliance upon such
      agreements and waiver of Maker and that Holder would not have made the loan
      evidenced by this Note without such agreements and waiver of
      Maker.  Maker acknowledges that specific weight has been given to the
      consideration given for such agreements, which consideration is the granting
      of
      the loan evidenced by this Note.

    


    Notwithstanding
      the foregoing, in the event of an application of insurance proceeds upon a
      casualty or the application of a condemnation award, made pursuant to Section
      1.03(A) or Section 1.05(A), respectively, of the Indenture and if such
      application occurs at a time when no outstanding Event of Default or event,
      which with notice or passage of time or both could become an Event of Default,
      then any such application made to the principal balance of the Note shall be
      made without payment of a  Prepayment Premium for the amount of such
      application.

    


    10.2           Calculation
      of Prepayment Premium Following an Event of Default.  Maker
      acknowledges that in the event of an acceleration of the Maturity Date of this
      Note following an Event of Default by Maker, a tender of payment of an amount
      necessary to satisfy the entire indebtedness evidenced hereby, but not including
      the Prepayment Premium as required pursuant to the terms of this Note or the
      Indenture, made at any time prior to, during or after a foreclosure sale or
      a
      sale ordered by a court (including a bankruptcy court) and tendered by Maker,
      its successors or assigns, or by anyone on behalf of Maker, or by a buyer upon
      foreclosure or power of sale or other court ordered sale, shall be presumed
      to
      be and conclusively deemed to constitute a prohibited  prepayment
      hereunder and shall therefore be subject to the Prepayment Premium. In such
      event, the Prepayment Premium will be calculated in accordance with Paragraph
      10.1 of this Note; except that for the purposes of this Paragraph 10.2 only,
      the
      following assumptions will be applied: (a) the “Prepayment Date” will be deemed
      to be the date of occurrence of the foreclosure sale or the date of the tender
      of payment of the amount necessary to pay the entire indebtedness evidenced
      hereby in full, including the Prepayment Premium; and  (b) all
      scheduled Payments due under this Note  from the date of this Note to
      and including the Prepayment Date will be assumed to have been made as
      scheduled. Nothing in this paragraph 10.2 shall operate to prevent Holder from
      charging Late Charges and the Default Rate on Payments not actually made as
      required under this Note.

    


    11.           Maker's
      Covenants.  Maker agrees that (a) the obligation evidenced by this
      Note is an exempted transaction under the Truth-in-Lending Act, 15.U.S.C § 1601,
etseq. (1982); and (b) said obligation constitutes a business loan
      for the purpose of the application of any laws that distinguish


    
      
         

      

      
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    between
      consumer loans and business loans and that have as their purpose the protection
      of consumers in the state in which the Property (as herein defined) is
      located.

    


    12.           Severability.  The
      parties hereto intend and believe that each provision of this Note comports
      with
      all applicable local, state and federal laws and judicial
      decisions.  However, if any provision or any portion of any provision
      contained in this Note is held by a court of law to be invalid, illegal,
      unlawful, void or unenforceable as written in any respect, then it is the intent
      of all parties hereto that such portion or provision shall be given force to
      the
      fullest possible extent that it is legal, valid and enforceable, that the
      remainder of the Note shall be construed as if such illegal, invalid, unlawful,
      void or unenforceable portion or provision was not contained therein, and that
      the rights, obligations and interests of Maker and Holder under the remainder
      of
      this Note shall continue in full force and effect.

    


    13.           Usury
      Laws.

    


    (a)           It
      is the intention of Maker and Holder to conform strictly to the usury laws
      now
      or hereafter in force in the state or commonwealth in which the Property is
      located, and any interest payable under this Note, the Indenture, or any other
      Loan Documents shall be subject to reduction to an amount not to exceed the
      maximum non-usurious amount for commercial loans allowed under the usury laws
      of
      the state or commonwealth in which the Property is located as now or hereafter
      construed by the courts having jurisdiction over such matters.  In the
      event such interest (whether designated as interest, service charges, points,
      or
      otherwise) does exceed the maximum legal rate, it shall be (i) cancelled
      automatically to the extent that such interest exceeds the maximum legal rate;
      (ii) if already paid, at the option of the Holder, either be rebated to Maker
      or
      credited on the principal amount of the Note; or (iii) if the Note has been
      prepaid in full, then such excess shall be rebated to Maker.

    


    (b)           It
      is further agreed, without limitation of the foregoing, that all calculations
      of
      the rate of interest (whether designed as interest, service charges, points,
      or
      otherwise) contracted for, charged, or received under this Note, or under any
      instrument evidencing or securing the loan evidenced hereby, that are made
      for
      the purpose of determining whether such rate exceeds the maximum legal rate,
      shall be made, to the extent permitted by applicable law, by amortizing,
      prorating, allocating, and spreading throughout the full stated term (ten [10]
      years) of this Note (and any extensions of the term hereof that may be hereafter
      granted) all such interest at any time contracted for, charged, or received
      from
      the Maker or otherwise by the Holder so that the rate of interest on account
      of
      the indebtedness evidenced by this Note, as so calculated, is uniform throughout
      the term hereof.  If the Maker is exempt or hereafter becomes exempt
      from applicable usury statutes or for any other reason the rate of interest
      to
      be charged on this Note is not limited by law, none of the provisions of this
      paragraph shall be construed so as to limit or reduce the interest or other
      consideration payable under this Note or under the Indenture or other Loan
      Documents.  The terms and provisions of this paragraph shall control
      and supersede every other provision of all agreements between the parties
      hereto.

    


    14.           Acceleration.  Upon
      an Event of Default, Holder shall have the right, without demand or notice,
      to
      declare the entire principal amount of this Note then outstanding, and all
      accrued and


    
      
         

      

      
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    unpaid
      interest thereon, and all other sums, including without limitation, the
      Prepayment Premium required under this Note or the Indenture, to be immediately
      due and payable, and notwithstanding the stated maturity in this Note, all
      such
      sums declared due and payable shall thereupon become immediately due and
      payable.

    


    15.           Waivers
      by Maker.  As to this Note, the Indenture, the Loan Documents and
      any other instruments securing the indebtedness, Maker and all guarantors,
      sureties, endorsers and other parties hereafter assuming or otherwise becoming
      liable under this Note (the foregoing are collectively referred to as the
“Maker Parties”), severally waive all applicable exemption
      rights, whether under any state constitution, homestead laws or otherwise,
      and
      also severally waive diligence, valuation and appraisement, presentment for
      payment, protest and demand, notice of protest, demand and dishonor and
      diligence in collection and nonpayment of this Note and all other notices in
      connection with the delivery, acceptance, performance, default, or enforcement
      of the payment of this Note (except notice of default specifically provided
      for
      in the Indenture and the other Loan Documents).  The Maker and Maker
      Parties agree that the liability of each of them shall be unconditional without
      regard to the liability of any other party and shall not be affected by an
      indulgence, extension of time, renewal, waiver, or modification granted to
      or
      consented to by the Holder.  Maker and Maker Parties consent to any
      and all extensions of time, renewals, waivers, or modifications that may be
      granted by Holder with respect to the payment or other provisions of this Note,
      and to the substitution, exchange or release of the Collateral, or any part
      thereof, and consent to the release of any party primarily or secondarily liable
      hereon or the addition of makers, guarantors, sureties and endorsers as parties
      hereto without notice to them or affecting their liability
      hereunder.  To the extent permitted by law, Maker and Maker Parties
      further waive all benefit that might accrue to Maker or Maker Parties by virtue
      of any present or future laws exempting the Property, or any other property,
      real or personal, or the proceeds arising from any sale of any such property,
      from attachment, levy, or sale under execution, or providing for any stay of
      execution to be issued on any judgment recovered on this Note or in any action
      to foreclose the Indenture, injunction against sale pursuant to power of sale,
      exemption from civil process or extension of time for payment.  Maker
      and Maker Parties agree that any real estate that may be levied upon pursuant
      to
      a judgment obtained by virtue of this Note, or any writ of execution issued
      thereon, may be sold upon any such writ in whole or in part in any order desired
      by Holder.

    


    16.  Maker
      Not Released.  No delay or omission of Holder to exercise any of
      its rights and remedies under this Note, the Indenture or any Loan Documents
      at
      any time following the happening of an Event of Default shall constitute a
      waiver of the right of Holder to exercise such rights and remedies at a later
      time by reason of such Event of Default or by reason of any subsequently
      occurring Event of Default.  This Note, or any payment hereunder, may
      be extended from time to time by agreement in writing between Maker and Holder
      without in any other way affecting the liability and obligations of Maker and
      Maker Parties, if any.

    


    17.           Joint
      and Several Obligation; Successors and Assigns.  This Note shall
      be the joint and several obligation of all Makers and Maker Parties, if any,
      as
      may exist now or hereafter in addition to Maker, and shall be binding upon
      them
      and their respective heirs, administrators, executors, legal representatives,
      successors and assigns and shall inure to the benefit of Holder and its
      successors, successors in title, and assigns.


    
      
         

      

      
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    18.           Remedies
      Cumulative.  The remedies of Holder as provided in this Note, or
      in the Indenture or the Loan Documents, and the warranties contained herein
      or
      therein shall be cumulative and concurrent, may be pursued singly, successively
      or together at the sole discretion of Holder, may be exercised as often as
      occasion for their exercise shall occur and in no event shall the failure to
      exercise any such right or remedy be construed as a waiver or release of such
      right or remedy.  No remedy under this Note, conferred upon or
      reserved to Holder is intended to be exclusive of any other remedy provided
      in
      this Note, the Indenture or any of the Loan Documents or provided by law, but
      each shall be cumulative and shall be in addition to every other remedy given
      under the Indenture or any of the Loan Documents or hereunder or now or
      hereafter existing at law or in equity or by statute.

    


    19.           Notices.  All
      notices or other communications under this Note shall be given as provided
      in
      the Indenture.

    


    20.           Governing
      Law.  THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
      WITH THE LAWS OF THE STATE OR COMMONWEALTH IN WHICH THE PROPERTY IS LOCATED
      WITHOUT GIVING EFFECT TO THE CONFLICT OF LAWS PRINCIPLES THEREOF.  IN
      ANY LITIGATION IN CONNECTION WITH OR TO ENFORCE THIS NOTE, THE MAKER HEREBY
      IRREVOCABLY CONSENTS AND CONFERS PERSONAL JURISDICTION ON THE STATE COURTS
      OF
      THE COUNTY IN WHICH THE PROPERTY IS LOCATED, OR ON THE UNITED STATES DISTRICT
      COURT OR THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT IN WHICH THE
      PROPERTY IS LOCATED.  MAKER EXPRESSLY WAIVES ANY OBJECTIONS AS TO
      VENUE IN ANY SUCH COURTS AND AGREES THAT SERVICE OF PROCESS MAY BE MADE ON
      THE
      MAKER BY MAILING A COPY OF THE SUMMONS AND COMPLAINT BY REGISTERED OR CERTIFIED
      MAIL, RETURN RECEIPT REQUESTED, TO THE MAKER'S ADDRESS.  NOTHING
      CONTAINED HEREIN SHALL, HOWEVER, PREVENT THE HOLDER FROM BRINGING ANY ACTION
      OR
      EXERCISING ANY RIGHTS WITHIN ANY OTHER STATE OR JURISDICTION OR FROM OBTAINING
      PERSONAL JURISDICTION BY ANY OTHER MEANS AVAILABLE BY APPLICABLE
      LAW.

    


    21.           Waiver
      of Jury Trial. TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, THE
      MAKER HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ALL RIGHT TO TRIAL BY JURY
      IN ANY ACTION, SUIT OR PROCEEDING THAT RELATES TO OR ARISES OUT OF THIS NOTE
      OR
      THE ACTS OR FAILURE TO ACT OF OR BY HOLDER IN THE ENFORCEMENT OF ANY OF THE
      TERMS OR PROVISIONS OF THIS NOTE.

    


    22.           Material
      Inducements.  ALL WAIVERS SET FORTH IN THIS NOTE ARE MATERIAL
      INDUCEMENTS FOR THE HOLDER TO EXTEND THE LOAN EVIDENCED BY THIS NOTE TO THE
      MAKER.


    
      
         

      

      
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    23.           No
      Oral Modification.  This Note may not be modified or discharged
      orally, but only by an agreement in writing signed by the party against whom
      enforcement or any waiver, modification or discharge is sought.

    


    24.           Time.  Time
      is of the essence with regard to the performance of the obligations of Maker
      in
      this Note and each and every term, covenant and condition herein by or
      applicable to Maker.

    


    25.           Captions.  The
      captions and headings of the paragraphs of this Note are for convenience only
      and are not to be used to interpret, define or limit the provisions
      hereof.

    


    26.           Terminology.  As
      used in this Note the word "Indenture" means a Deed of Trust
      Security Agreement and Fixture Filing of even date herewith from Maker to,
      or
      for the benefit of, Holder, which secures Maker's obligations hereunder and
      which covers the property described therein (the
      "Property").

    


    27.           Replacement
      Note.  Upon receipt of evidence reasonably satisfactory to Maker
      of the loss, theft, destruction or mutilation of this Note, and in the case
      of
      any such loss, theft or destruction, upon delivery of an indemnity agreement
      reasonably satisfactory to Maker or, in the case of any such mutilation, upon
      surrender and cancellation of the mutilated Note, Maker will execute and deliver
      to Holder in lieu thereof, a replacement note dated as of the date of this
      Note,
      identical in form and substance to this Note and upon such execution and
      delivery all references in the Indenture to this Note shall be deemed to refer
      to such replacement note.

    


    28.           Limitation
      on Recourse.

    


    (a)           Except
      as specifically set forth in paragraphs (b) and (c) of this Article 28, in
      Section 1.13 of the Indenture and any separate agreement for indemnification
      of
      Holder or guaranty agreement of this Note, Holder’s recourse to the Maker for
      the Maker’s liability under this Note, the Indenture and the other Loan
      Documents shall be limited to Maker’s interest in the Property and any other
      security furnished under the Loan Documents.  In any action to
      foreclose the Indenture or to otherwise realize upon any security furnished
      under the Loan Documents or to collect any amount payable hereunder or under
      the
      other Loan Documents, no judgment for the repayment of this Note or interest
      thereon or any other sum due under any of the Loan Documents or for damages
      for
      failure to perform any obligation of Maker hereunder or under any of the Loan
      Documents will be enforced against Maker personally or against any property
      of
      Maker other than the Property and other security furnished under the Loan
      Documents.  Notwithstanding the foregoing, nothing contained in this
      paragraph shall be construed as prohibiting Holder from exercising any and
      all
      remedies which the Loan Documents permit, including the right to bring actions
      or proceedings against Maker and to enter a judgment against Maker; provided,
      however, that any judgment so entered must specify that it is limited to the
      security furnished under the Loan Documents and that it may not be levied
      against any other property of Maker other than the security furnished under
      the
      Loan Documents.

    


    (b)           Notwithstanding
      the foregoing provisions of paragraph (a) of this Article 28 or any other
      agreement, Maker shall be fully liable for,  Holder shall have full
      recourse against Maker


    
      
         

      

      
        -9-

        
          

        

      

      
         

      

    


    for,
      and
      the restrictions of paragraph (a) of this Article 28 shall not apply to, losses
      or damages to Holder or the Property resulting from the following: (i) the
      misapplication or misappropriation of (a) proceeds of insurance covering any
      portion of the Property, or (b) proceeds of condemnation of any portion of
      the
      Property or proceeds from the sale or conveyance of any portion of the Property,
      in lieu of condemnation, or (c) rentals received by or on behalf of Maker
      subsequent to the date of the revocation of the license granted in the Absolute
      Assignment of Rents and Profits and Collateral Assignment of Leases to the
      extent such rentals are not applied to ordinary and necessary operational costs
      of the Property, or (d) any funds deposited or required to be deposited under
      any escrow agreement to be established pursuant to the Commitment Letter, the
      Indenture or the Loan Documents; (ii) Maker’s failure to return  all
      unearned advance rentals and security deposits paid by tenants of the Property
      and not refunded to or forfeited by such tenants; (iii) Maker's failure to
      comply with any federal, state and local statute, ordinance or regulation
      applicable to the Property relating to hazardous waste and environmental laws,
      such loss to include expenses, clean up, penalties and damages incurred by
      Holder and any diminution in the fair market value of the Property caused by
      Maker, its agents and tenants as a result of non-compliance with such hazardous
      waste and environmental laws from and after the date hereof (specifically
      including any liability of Maker under Section 1.13 of the Indenture or under
      any separate indemnification agreement or guaranty agreement); (iv) a lien
      hereafter imposed upon any of the Property without Holder's prior written
      consent and which has priority over any security for the payment of this Note,
      including, without limitation, all costs incurred by Holder in the bonding,
      payment or release of any lien arising from the use, incorporation, storage
      or
      disposal of toxic, hazardous, chemical or nuclear waste or materials upon or
      in
      any portion of the Property caused by Maker, its agents and tenants as a result
      of non-compliance with Hazardous Material Laws (as defined in the Indenture)
      from and after the period from the date hereof; (v) the commission of waste,
      which shall include, but not be limited to, damage, destruction, disrepair
      or
      impairment in value of the Property caused by Maker’s willful act or grossly
      negligent omission, including, but not be limited to, Maker’s failure to take
      commercially reasonable steps to insure that the Property does not contain
      those
      species of mold, fungi, algae and other microbial matter which pose a serious
      human health risk in concentrations greater than those found in the immediately
      surrounding ambient environment.; (vi) failure of Maker to pay real estate
      taxes, recording taxes, mortgage taxes or documentary stamp taxes or other
      charges required in connection with the Indenture and the other Loan Documents
      (together with any fines, penalties, interest or similar charges resulting
      from
      the non-payment thereof), and property insurance premiums relating to the
      Property; (vii) Maker’s failure to maintain casualty and liability insurance as
      required by the Indenture; (viii) any modification, termination or cancellation
      of any of the leases or other occupancy agreements in effect at or concerning
      the Property and assigned to Holder under the Indenture or other Loan Documents,
      unless expressly permitted in the Indenture or the Absolute Assignment of Rents
      and Profits and Collateral Assignment of Leases or with Holder's prior written
      consent if and to the extent such modification, termination or cancellation
      has
      a material adverse effect on the value of the Property; (ix) Personal Property
      (as defined in the Indenture) taken from the Property by or on behalf of Maker
      and not replaced with Personal Property of the same utility and of the same
      or
      greater value; (x) all costs and expenses, including, without limitation,
      attorneys’ fees and transfer taxes incurred by Holder in connection with the
      enforcement of this Note, the Indenture or the other Loan Documents or a
      deed-in-lieu of foreclosure, and any taxes, costs and expenses described in
      Section 8(a) and 8(b) of this Note; and (xi) any breach of or failure to perform
      any representation, warranty or covenant contained in the Indenture or any
      Loan
      Documents relating to


    
      
         

      

      
        -10-

        
          

        

      

      
         

      

    


    anti-terrorism
      measures, including but not limited to (a) Anti-terrorism Laws (as defined
      in
      the Loan Documents); and (b) other executive orders, laws, rules, regulations,
      legislations, or orders as may be enacted now or in the future relating to
      anti-terrorism measures.

    


    (c)           Notwithstanding
      any provisions of this Section to the contrary, the agreement of Holder not
      to
      pursue recourse liability as set forth above SHALL BECOME NULL AND VOID and
      shall be of no further force and effect and Maker shall become personally liable
      for payment of the indebtedness evidenced by this Note and performance of all
      other obligations of Maker under this Note, the Indenture and the other Loan
      Documents in the event of:

    


    (1)           Fraud
      or material misrepresentation, whether affirmative or by omission, of a material
      fact by Maker or any principals of Maker in connection with this Note, the
      Indenture or the other Loan Documents or any request for any action or consent
      by Maker; or

    


    (2)           a
      default or violation under Section 1.07 of the Indenture; or

    


    (3)           if
      the Property or any part thereof shall become an asset in a voluntary bankruptcy
      or insolvency proceeding.

    


    29.           Exhibits.
      Exhibit(s) A and B attached hereto are incorporated herein by
      reference.

    


    THIS
      NOTE AND THE OTHER WRITTEN LOAN
      DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE
      CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS
      OF THE PARTIES.  THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE
      PARTIES.

    


    IN
      WITNESS WHEREOF, Maker has caused this Promissory Note to be duly
      executed under seal on the date first above written.

    


    MAKER:

    


    LANTANA
      OFFICE PROPERTIES I,
      L.P.,

    a
      Texas limited
      partnership

    


    By:           STRS
      L.L.C.,

    a
      Delaware limited liability
      company

    


    By:           STRATUS
      PROPERTIES INC.,

    A
      Delaware corporation, its sole
      member

    


    


    By:___/s/
      John E.
      Baker___________________

    John
      E. Baker, Senior Vice
      President

    


     


    
      
         

      

      
        -11-