**Exhibit 10.29**

 

**MULTIFAMILYNOTE**

 
| US  $51,300,000.00 | October 28,  2009 |
|--------------------|------------------------|

 

**FOR VALUE RECEIVED**, the undersigned (“**Borrower**”)jointly and severally (if more than one) promises to pay to the order of REDMORTGAGE CAPITAL, INC., an Ohio corporation, the principal sum of Fifty-OneMillion Three Hundred Thousand and 00/100 Dollars (US $51,300,000.00),with interest accruing at the Interest Rate on the unpaid principal balancefrom the Disbursement Date until fully paid.

 

**1.****                                     ****Defined Terms.** In addition to defined terms found elsewhere in this Note, as used inthis Note, the following definitions shall apply:

 

**Amortization Period**: Zero (0) months.

 

**Business Day**:**** Any day other than a Saturday, Sunday or anyother day on which Lender is not open for business.

 

**Debt Service****Amounts**: Amounts payable under this Note, the Security Instrument or any otherLoan Document.

 

**Default Rate**: A rate equal to the lesser of 4 percentage points above the InterestRate or the maximum interest rate which may be collected from Borrower underapplicable law.

 

**Disbursement Date:**  The date ofdisbursement of Loan proceeds hereunder.

 

**First Payment Date**:**** The first day of December, 2009.

 

**Indebtedness**:** **The principal of, interest on, orany other amounts due at any time under, this Note, the Security Instrument orany other Loan Document, including prepayment premiums, late charges, defaultinterest, and advances to protect the security of the Security Instrument underSection 12 of the Security Instrument.

 

**Interest Rate**: The annual rate of four and 720/1000ths percent (4.720%).

 

**Lender**:** **The holder of this Note.

 

**Loan**:** **The loan evidenced by this Note.

 

**Loan Term**: 84 months.

 

**Maturity Date**:**** The first day of November, 2016, or anyearlier date on which the unpaid principal balance of this Note becomes due andpayable by acceleration or otherwise.

 

**Property Jurisdiction**: The jurisdiction in which the Land is located.

 

**Security Instrument**:  A Multifamily Deed of Trust, Assignment of Rents,Security Agreement and Fixture Filing (California) dated as of the date of thisNote.

 

1

----

 

**Yield Maintenance Period Term**: 78 months.

 

**Yield Maintenance Period End Date**: The last day of April, 2016.

 

Event of Default,Key Principal, and other capitalized terms used but not defined in this Noteshall 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 Two Miranova Place,12th Floor, Columbus, Ohio 43215, or such otherplace as may be designated by written notice to Borrower from or on behalf ofLender.

 

**3.****                                     ****Payment of Principal andInterest.**  Principal and interest shall be paid asfollows:

 

(a)                                  **Short Month Interest.** If disbursement of principal is made by Lender to Borrower on any dayother than the first day of the month, interest for the period beginning on theDisbursement Date and ending on and including the last day of the month inwhich such disbursement is made shall be payable simultaneously with theexecution of this Note.

 

(b)                                 **Interest Computation.** Interest under this Note shall be computed on the basis of (check oneonly):

 

o                                    **30/360.**  A360-day year consisting of twelve 30-day months.

 

x                                  **Actual/360.**  A360-day year.  The amount of each monthlypayment made by Borrower pursuant to Paragraph 3(c) below will be based onthe actual number of calendar days during such month and shall be calculated bymultiplying the unpaid principal balance of this Note by the per annum interestrate, dividing the product by 360 and multiplying the quotient by the actualnumber of days elapsed during the month. Borrower understands that the amount of interest for each month willvary depending on the actual number of calendar days during such month.

 

(c)                                  **Monthly Installments**(check one only):

 

o                                    **30/360**. If interest accrues based on a 30/360 interest computation, thenconsecutive monthly installments of interest only, each in the amount of                                                                                                       Dollars (US $                                    ),shall be payable on the First Payment Date and on the first day of every monththereafter, until the entire unpaid principal balance evidenced by this Note isfully paid.  The entire principal balanceand accrued but unpaid interest shall be due and payable on the Maturity Date.  The unpaid principal balance shall continueto bear interest after the Maturity Date at the Default Rate set forth in thisNote until and including the date on which it is paid in full.

 

x                                  **Actual/360**. If interest accrues based on an Actual/360 interest computation, theamount of Two Hundred One Thousand Seven Hundred Eighty and 00/100 Dollars (US$201,780.00) shall be payable on the First Payment Date and thereafter consecutivemonthly installments of interest only, shall be payable as follows:

 

2

----

 

(1)                                  One Hundred Eighty-Eight Thousand ThreeHundred Twenty-Eight and 00/100 Dollars (US $188,328.00), shall be payable onthe first day of each month during the term hereof which follows a 28-daymonth;

 

(2)                                  One Hundred Ninety-Five ThousandFifty-Four and 00/100 Dollars (US $195,054.00), shall be payable on the firstday of each month during the term hereof which follows a 29-day month,

 

(3)                                  Two Hundred One Thousand Seven HundredEighty and 00/100 Dollars (US $201,780.00), shall be payable on the first dayof each month during the term hereof which follows a 30-day month, or

 

(4)                                  Two Hundred Eight Thousand Five HundredSix and 00/100 Dollars (US $208,506.00), shall be payable on the first day ofeach month during the term hereof which follows a 31-day month,

 

until the entire unpaid principal balance evidenced by this Note isfully paid.  The entire principal balanceand accrued but unpaid interest shall be due and payable on the Maturity Date.  The unpaid principal balance shall continueto bear interest after the Maturity Date at the Default Rate set forth in thisNote until and including the date on which it is paid in full.

 

(d)           **Payments Before Due Date.**  Any regularly scheduled monthly installmentof interest that is received by Lender before the date it is due shall bedeemed to have been received on the due date solely for the purpose ofcalculating interest due.

 

(e)           **Accrued Interest.**  Any accrued interest remaining past due for30 days or more shall be added to and become part of the unpaid principalbalance and shall bear interest at the rate or rates specified in this Note.  Any reference herein to “accrued interest”shall refer to accrued interest which has not become part of the unpaidprincipal balance.  Any amount added toprincipal pursuant to the Loan Documents shall bear interest at the applicablerate or rates specified in this Note and shall be payable with such interest upondemand by Lender and absent such demand, as provided in this Note for thepayment of principal and interest.

 

**4.             Applicationof Payments. **If at any time Lenderreceives, from Borrower or otherwise, any amount applicable to the Indebtednesswhich is less than all amounts due and payable at such time, Lender may applythat payment to amounts then due and payable in any manner and in any orderdetermined by Lender, in Lender’s discretion. Borrower agrees that neither Lender’s acceptance of a payment fromBorrower in an amount that is less than all amounts then due and payable norLender’s application of such payment shall constitute or be deemed toconstitute either a waiver of the unpaid amounts or an accord andsatisfaction.  If Lender accepts a guarantyof only a portion of the Indebtedness, Borrower hereby waives its right underCalifornia Civil Code Section 2822(a) to designate the portion of theIndebtedness which shall be satisfied by any guarantor’s partial payment.

 

**5.             Security. **The Indebtedness is secured, among other things, bythe Security Instrument, andreference is made to the Security Instrument for other rights of Lenderconcerning the collateral for the Indebtedness.

 

**6.             Acceleration. **If an Event of Default has occurredand is continuing, the entire unpaid principal balance, any accrued interest,the prepayment premium payable under Paragraph 10, if any, and all otheramounts payable under this Note and any other Loan Document shall at oncebecome due and 

 

3

----

 

payable,at the option of Lender, without any prior notice to Borrower.  Lender may exercise this option to accelerateregardless of any prior forbearance.

 

**7.             LateCharge. **If any monthly installment duehereunder is not received by Lender on or before the 10th day of each month orif any other amount payable under this Note or under the Security Instrument orany other Loan Document is not received by Lender within 10 days after the datesuch amount is due, counting from and including the date such amount is due,Borrower shall pay to Lender, immediately and without demand by Lender, a latecharge equal to 5 percent of such monthly installment or other amount due.  Borrower acknowledges that its failure tomake timely payments will cause Lender to incur additional expenses inservicing and processing the Loan and that it is extremely difficult andimpractical to determine those additional expenses.  Borrower agrees that the late charge payablepursuant to this Paragraph represents a fair and reasonable estimate, takinginto account all circumstances existing on the date of this Note, of theadditional 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 toParagraph 8.

 

**8.             DefaultRate. **So long as any monthly installment orany other payment due under this Note remains past due for 30 days or more,interest under this Note shall accrue on the unpaid principal balance from theearlier of the due date of the first unpaid monthly installment or otherpayment due, as applicable, at the Default Rate.  If the unpaid principal balance and allaccrued interest are not paid in full on the Maturity Date, the unpaidprincipal balance and all accrued interest shall bear interest from theMaturity Date at the Default Rate. Borrower also acknowledges that its failure to make timely payments willcause Lender to incur additional expenses in servicing and processing the Loan,that, during the time that any monthly installment or payment under this Noteis delinquent for more than 30 days, Lender will incur additional costs andexpenses arising from its loss of the use of the money due and from the adverseimpact on Lender’s ability to meet its other obligations and to take advantageof other investment opportunities, and that it is extremely difficult andimpractical to determine those additional costs and expenses.  Borrower also acknowledges that, during thetime that any monthly installment or other payment due under this Note isdelinquent for more than 30 days, Lender’s risk of nonpayment of this Note willbe materially increased and Lender is entitled to be compensated for suchincreased risk.  Borrower agrees that theincrease in the rate of interest payable under this Note to the Default Raterepresents a fair and reasonable estimate, taking into account allcircumstances existing on the date of this Note, of the additional costs andexpenses Lender will incur by reason of the Borrower’s delinquent payment andthe additional compensation Lender is entitled to receive for the increasedrisks of nonpayment associated with a delinquent loan.

 

**9.             Limitson Personal Liability.**

 

(a)           Except as otherwiseprovided in this Paragraph 9, Borrower shall have no personal liability underthis Note, the Security Instrument or any other Loan Document for the repaymentof the Indebtedness or for the performance of any other obligations of Borrowerunder the Loan Documents, and Lender’s only recourse for the satisfaction ofthe Indebtedness and the performance of such obligations shall be Lender’sexercise of its rights and remedies with respect to the Mortgaged Property (assuch term is defined in the Security Instrument) and any other collateral heldby Lender as security for the Indebtedness. This limitation on Borrower’s liability shall not limit or impair Lender’senforcement of its rights against any guarantor of the Indebtedness or anyguarantor of any obligations of Borrower.

 

(b)           Borrower shall bepersonally liable to Lender for the repayment of a portion of the Indebtednessequal to any loss or damage suffered by Lender as a result of:

 

4

----

 

(1)           failureof Borrower to pay to Lender upon demand after an Event of Default, all Rentsto which Lender is entitled under Section 3(a) of the SecurityInstrument and the amount of all security deposits collected by Borrower fromtenants then in residence;

 

(2)           failureof Borrower to apply all insurance proceeds and condemnation proceeds asrequired by the Security Instrument;

 

(3)           failureof Borrower to comply with Section 14(d) or (e) of the SecurityInstrument relating to the delivery of books and records, statements, schedulesand reports;

 

(4)           fraudor written material misrepresentation by Borrower, Key Principal or anyofficer, director, partner, member or employee of Borrower in connection withthe application for or creation of the Indebtedness or any request for anyaction or consent by Lender;

 

(5)           failureto apply Rents, first, to the payment of reasonable operating expenses (otherthan Property management fees that are not currently payable pursuant to theterms of an Assignment of Management Agreement or any other agreement withLender executed in connection with the Loan) and then to Debt Service Amounts, except thatBorrower will not be personally liable (i) to the extent that Borrowerlacks the legal right to direct the disbursement of such sums because of abankruptcy, receivership or similar judicial proceeding, or (ii) withrespect to Rents that are distributed in any calendar year if Borrower has paidall operating expenses and Debt Service Amounts for that calendar year; or

 

(6)           failureby Borrower to comply with the provisions of Section 17(a) of theSecurity Instrument.

 

(c)                                  Borrower shall become personally liableto Lender for the repayment of all of the Indebtedness upon the occurrence ofany of the following Events of Default:

 

(1)           Borrower’sacquisition of any property or operation of any business not permitted by Section 33of the Security Instrument;

 

(2)           aTransfer that is an Event of Default under Section 21 of the SecurityInstrument; or

 

(3)           theoccurrence of a Bankruptcy Event (but only if the Bankruptcy Event occurs withthe consent, encouragement or active participation of Borrower, Key Principalor any Borrower Affiliate).

 

(d)                                 To the extent thatBorrower has personal liability under this Paragraph 9, Lender may exercise itsrights against Borrower personally without regard to whether Lender hasexercised any rights against the Mortgaged Property or any other security, orpursued any rights against any guarantor, or pursued any other rights availableto Lender under this Note, the Security Instrument, any other Loan Document orapplicable law. If Borrower is a married person, then Borrower agrees thatLender may look to all of Borrower’s community property and separate propertyto satisfy Borrower’s recourse obligations under this Paragraph 9.  For purposes of this Paragraph 9, the term “MortgagedProperty” shall not include any funds that (1) have been applied byBorrower as required or permitted by the Security Instrument prior to theoccurrence of an Event of Default, or (2) Borrower was unable to apply asrequired or permitted by the Security Instrument because of a bankruptcy,receivership, or similar judicial proceeding.

 

5

----

 

**10.****                              ****Voluntary and InvoluntaryPrepayments.**

 

(a)                                  A prepayment premium shall be payable inconnection with any prepayment made under this Note as provided below:

 

(1)                                  Borrower may voluntarily prepay all (butnot less than all) of the unpaid principal balance of this Note only on thelast calendar day of a calendar month (the “Last Day of the Month”) and only ifBorrower has complied with all of the following:

 

(i)                                     Borrower must give Lender at least 30days (if given via U.S. Postal Service) or 20 days (if given via facsimile,email or overnight courier), but not more than 60 days, prior written notice ofBorrower’s intention to make a prepayment (the “Prepayment Notice”).  The Prepayment Notice shall be given inwriting (via facsimile, email, U.S. Postal Service or overnight courier) andaddressed to Lender.  The PrepaymentNotice shall include, at a minimum, the Business Day upon which Borrowerintends to make the prepayment (the “Intended Prepayment Date”).

 

(ii)                                  Borrower acknowledges that the Lender isnot required to accept any voluntary prepayment of this Note on any day otherthan the Last Day of the Month even if Borrower has given a Prepayment Noticewith an Intended Prepayment Date other than the Last Day of the Month or if theLast Day of the Month is not a Business Day. Therefore, even if Lender accepts a voluntary prepayment on any dayother than the Last Day of the Month, for all purposes (including the accrualof interest and the calculation of the prepayment premium), any prepaymentreceived by Lender on any day other than the Last Day of the Month shall bedeemed to have been received by Lender on the Last Day of the Month and anyprepayment calculation will include interest to and including the Last Day ofthe Month in which such prepayment occurs. If the Last Day of the Month is not a Business Day, then the Borrowermust make the payment on the Business Day immediately preceding the Last Day ofthe Month.

 

(iii)                               Any prepayment shall be made by paying (A) theamount of principal being prepaid, (B) all accrued interest (calculated tothe Last Day of the Month), (C) all other sums due Lender at the time of suchprepayment, and (D) the prepayment premium calculated pursuant toSchedule A.

 

(iv)                              If, for any reason, Borrower fails toprepay this Note (A) within five (5) Business Days after the IntendedPrepayment Date or (B) if the prepayment occurs in a month other than themonth stated in the original Prepayment Notice, then Lender shall have theright, but not the obligation, to recalculate the prepayment premium based uponthe date that Borrower actually prepays this Note and to make such calculationas described in Schedule A attached hereto. For purposes of such recalculation, such new prepayment date shall bedeemed the “Intended Prepayment Date.”

 

6

----

 

(2)           UponLender’s exercise of any right of acceleration under this Note, Borrower shallpay to Lender, in addition to the entire unpaid principal balance of this Noteoutstanding at the time of the acceleration, (i) all accrued interest andall other sums due Lender under this Note and the other Loan Documents, and (ii) theprepayment premium calculated pursuant to Schedule A.

 

(3)           Anyapplication by Lender of any collateral or other security to the repayment ofany portion of the unpaid principal balance of this Note prior to the MaturityDate and in the absence of acceleration shall be deemed to be a partialprepayment by Borrower, requiring the payment to Lender by Borrower of aprepayment premium.

 

(b)                                 Notwithstanding the provisions ofParagraph 10(a), no prepayment premium shall be payable (1) with respectto any prepayment occurring as a result of the application of any insuranceproceeds or condemnation award under the Security Instrument, or (2) asprovided in subparagraph (c) of Schedule A.

 

(c)                                  Schedule A is hereby incorporated byreference into this Note.

 

(d)                                 Any required prepayment of less than theentire unpaid principal balance of this Note shall not extend or postpone thedue date of any subsequent monthly installments or change the amount of suchinstallments, unless Lender agrees otherwise in writing.

 

(e)                                  Borrower recognizes that any prepaymentof the unpaid principal balance of this Note, whether voluntary or involuntaryor resulting from a default by Borrower, will result in Lender’s incurringloss, including reinvestment loss, additional expense and frustration orimpairment of Lender’s ability to meet its commitments to third parties.  Borrower agrees to pay to Lender upon demanddamages for the detriment caused by any prepayment, and agrees that it isextremely difficult and impractical to ascertain the extent of suchdamages.  Borrower therefore acknowledgesand agrees that the formula for calculating prepayment premiums set forth onSchedule A represents a reasonable estimate of the damages Lender will incurbecause of a prepayment.

 

(f)                                    Borrower further acknowledges that theprepayment premium provisions of this Note are a material part of theconsideration for the loan evidenced by this Note, and acknowledges that theterms of this Note are in other respects more favorable to Borrower as a resultof the Borrower’s voluntary agreement to the prepayment premium provisions.

 

**11.****                              ****Costs and Expenses. **Borrower shall pay on demand allexpenses and costs, including fees and out-of-pocket expenses of attorneys andexpert witnesses and costs of investigation, incurred by Lender as a result ofany default under this Note or in connection with efforts to collect any amountdue under this Note, or to enforce the provisions of any of the other LoanDocuments, including those incurred in post-judgment collection efforts and inany bankruptcy proceeding (including any action for relief from the automaticstay of any bankruptcy proceeding) or judicial or non-judicial foreclosureproceeding.

 

**12.****                              ****Forbearance.** Any forbearance by Lender in exercising any right or remedy under thisNote, the Security Instrument, or any other Loan Document or otherwise affordedby applicable law, shall not be a waiver of or preclude the exercise of that orany other right or remedy.  The acceptanceby Lender of any payment after the due date of such payment, or in an amountwhich is less than the required payment, shall not be a waiver of Lender’sright to require prompt payment when due of all other payments or to exerciseany right or remedy with respect to any failure to make prompt payment.  Enforcement by Lender of any security forBorrower’s obligations under this Note shall not constitute an 

 

7

----

 

election by Lenderof remedies so as to preclude the exercise of any other right or remedyavailable to Lender.

 

**13.          Waivers. **Presentment, demand, notice of dishonor, protest,notice of acceleration, notice of intent to demand or accelerate payment ormaturity, presentment for payment, notice of nonpayment, grace, and diligencein collecting the Indebtedness are waived by Borrower, Key Principal, and allendorsers and guarantors of this Note and all other third party obligors.

 

**14.          LoanCharges.**  Borroweragrees to pay an effective rate of interest equal to the sum of the InterestRate provided for in this Note and any additional rate of interest resultingfrom any other charges of interest or in the nature of interest paid or to bepaid in connection with the loan evidenced by this Note and any other fees oramounts to be paid by Borrower pursuant to any of the other LoanDocuments.  Neither this Note nor any ofthe other Loan Documents shall be construed to create a contract for the use,forbearance or detention of money requiring payment of interest at a rategreater than the maximum interest rate permitted to be charged under applicablelaw.  If any applicable law limiting theamount of interest or other charges permitted to be collected from Borrower inconnection with the Loan is interpreted so that any interest or other chargeprovided for in any Loan Document, whether considered separately or togetherwith 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 ishereby reduced to the extent necessary to eliminate that violation.  The amounts, if any, previously paid toLender in excess of the permitted amounts shall be applied by Lender to reducethe unpaid principal balance of this Note. For the purpose of determining whether any applicable law limiting theamount of interest or other charges permitted to be collected from Borrower hasbeen violated, all Indebtedness that constitutes interest, as well as all othercharges made in connection with the Indebtedness that constitute interest, shallbe deemed to be allocated and spread ratably over the stated term of theNote.  Unless otherwise required byapplicable law, such allocation and spreading shall be effected in such amanner that the rate of interest so computed is uniform throughout the statedterm of the Note.

 

**15.          CommercialPurpose. **Borrower represents that theIndebtedness is being incurred by Borrower solely for the purpose of carryingon a business or commercial enterprise, and not for personal, family orhousehold purposes.

 

**16.          Countingof Days. **Except where otherwise specifically provided, anyreference in this Note to a period of “days” means calendar days, not BusinessDays.

 

**17.          GoverningLaw. **This Note shall be governed by the law of thejurisdiction in which the Land is located.

 

**18.**          **Captions. **Thecaptions of the paragraphs of this Note are for convenience only and shall bedisregarded in construing this Note.

 

**19.          Notices**. All notices, demands and other communications required or permitted tobe given by Lender to Borrower pursuant to this Note shall be given inaccordance with Section 31 of the Security Instrument.

 

**20.          Consentto Jurisdiction and Venue.  **Borrower and Key Principal each agreesthat any controversy arising under or in relation to this Note shall be litigatedexclusively in the PropertyJurisdiction.  The state andfederal courts and authorities with jurisdiction in the Property Jurisdictionshall have exclusive jurisdiction over all controversies which shall ariseunder or in relation to this Note.  Borrowerand Key Principal each irrevocably consents to service, jurisdiction, and venueof such courts 

 

8

----

 

for any suchlitigation and waives any other venue to which it might be entitled by virtueof domicile, habitual residence or otherwise.

 

**21.          WAIVEROF TRIAL BY JURY.  BORROWER, KEYPRINCIPAL AND LENDER EACH (A) AGREES NOT TO ELECT A TRIAL BY JURY WITHRESPECT TO ANY ISSUE ARISING OUT OF THIS NOTE OR THE RELATIONSHIP BETWEEN THEPARTIES AS LENDER, KEY PRINCIPAL AND BORROWER THAT IS TRIABLE OF RIGHT BY AJURY AND (B) WAIVES ANY RIGHT TO TRIAL BY JURY WITH RESPECT TO SUCH ISSUETO THE EXTENT THAT ANY SUCH RIGHT EXISTS NOW OR IN THE FUTURE.  THIS WAIVER OF RIGHT TO TRIAL BY JURY ISSEPARATELY GIVEN BY EACH PARTY, KNOWINGLY AND VOLUNTARILY WITH THE BENEFIT OFCOMPETENT LEGAL COUNSEL.**

 

**ATTACHED SCHEDULES.  The following Schedules are attached to thisNote:**

 
| ** ** | **x** | **Schedule A** | **Prepayment Premium (required)** |
|------------|-------|----------------|-----------------------------------|

 

9

----

 

**INWITNESS WHEREOF**, Borrower has signed and delivered this Note or hascaused this Note to be signed and delivered by its duly authorizedrepresentative.

 

 
| ** ** | **BORROWER**                         |
|------------|--------------------------------------|
|       |                                 |
|       | BEHRINGER HARVARD NOHO, LLC,         |
|       | a Delaware limited liability company |
|       |                                 |
|       |                                 |
|       | By:                                  | /s/ Gerald J. Reihsen, III |
|       | Name:                                | Gerald J. Reihsen, III |
|       | Title:                               | Executive Vice President |

 

 

Fannie Mae Commitment Number: 860574

 

1

----

 
|       | PAY  TO THE ORDER OF FANNIE MAE, without recourse. |
|------------|----------------------------------------------------|
|       |                                               |
|       | RED  MORTGAGE CAPITAL, INC.,                       |
|       | an  Ohio corporation                               |
|       |                                               |
|       |                                               |
|       | By:                                                | /s/  R. Barth Kallmerten |
|       |                                               | Name:  R. Barth Kallmerten |
| ** ** | ** **                                         | **Title:  Senior  Managing Director** |

 

 

**FannieMae Commitment Number:  860574**

** **

**1**

----

 

**SCHEDULE A**

 

**PREPAYMENT PREMIUM**

 

Any prepayment premium payable under Paragraph 10 of this Note shall becomputed as follows:

 

(a)                                  If theprepayment is made at any time after the date of this Note and before the YieldMaintenance Period End Date, the prepayment premium shall be the greater of:

 

(i)                                     1% of theamount of principal being prepaid; or

 

(ii)                                  The productobtained by multiplying:

 

(A)                              the amount ofprincipal being prepaid,

 

*by*

 

(B)                                the differenceobtained by subtracting from the Interest Rate on this Note the Yield Rate (asdefined below), on the twenty-fifth Business Day preceding (x) theIntended Prepayment Date, or (y) the date Lender accelerates the Loan orotherwise accepts a prepayment pursuant to Paragraph 10(a)(3) of thisNote,

 

*by*

 

(C)                                the presentvalue factor calculated using the following formula:

 
|   | 1 - (1 + r)-n/12 |   |
|--------|------------------|--------|
|   | r                |   |

 

[r =          YieldRate.

 

n =                               the number ofmonths remaining between (1) either of the following: (x) in the caseof a voluntary prepayment, the Last Day of the Month during which theprepayment is made, or (y) in any other case, the date on which Lenderaccelerates the unpaid principal balance of this Note and (2) the YieldMaintenance Period End Date.

 

A-1

----

 

For purposes of this clause (ii), the “**Yield Rate**” means the yield calculated by interpolating theyields for the immediately shorter and longer term U.S. “Treasury constantmaturities” (as reported in the Federal Reserve Statistical Release H.15Selected Interest Rates (the “**Fed Release**”)under the heading “U.S. government securities”) closest to the remaining termof the Yield Maintenance Period Term, as follows (rounded to three decimalplaces):

 

 

*a* =                               the yield forthe longer U.S. Treasury constant maturity

*b* =                               the yield forthe shorter U.S. Treasury constant maturity

*x* =                                the term of thelonger U.S. Treasury constant maturity

*y* =                                the term of theshorter U.S. Treasury constant maturity

*z* =                                 “n” (as definedin the present value factor calculation above) divided by 12.

 

Notwithstanding any provision to thecontrary, if “*z*” equals a term reported underthe U.S. “Treasury constant maturities” subheading in the Fed Release, theyield for such term shall be used, and interpolation shall not benecessary.  If publication of the FedRelease is discontinued by the Federal Reserve Board, Lender shall determinethe Yield Rate from another source selected by Lender.  Any determination of the Yield Rate by Lenderwill be binding absent manifest error.]

 

(b)                                 If theprepayment is made on or after the Yield Maintenance Period End Date but beforethe last calendar day of the 4th month prior to the month in which the MaturityDate occurs, the prepayment premium shall be 1% of the amount of principalbeing prepaid.

 

(c)                                  Notwithstandingthe provisions of Paragraph 10(a) of this Note, no prepayment premiumshall be payable with respect to any prepayment made on or after the lastcalendar day of the 4th month prior to the month in which the Maturity Dateoccurs.

 
|   |                      | GJR |   |
|--------|---------------------------|-----|--------|
|   | Borrower’s  Initials |

 

A-2

----