**Exhibit 10.20**

** **

**Freddie Mac Loan Number 002669129**

 

**MULTIFAMILY NOTEMULTISTATE - FIXED TO FLOAT(REVISION DATE 3-25-2004)**

 
| US $52,000,000 |   | Effective Date: April 01,  2004 |
|----------------|--------|--------------------------------------|

 

FOR VALUE RECEIVED, the undersigned (together with such party’s orparties’ successors and assigns, **“Borrower”),**jointly and severally (if more than one) promises to pay to theorder of Berkshire Mortgage Finance Limited Partnership, the principalsum of fifty-two million dollars (US $52,000,000), with intereston the unpaid principal balance, as hereinafter provided.

 

**1.        DefinedTerms.**

 

(a)       As used in this Note:

 

**“Adjustable Interest Rate”**means thevariable annual interest rate calculated for each Interest Adjustment Period soas to equal the Index Rate for such Interest Adjustment Period (truncated atthe fifth (5th) decimalplace if necessary) plus the Margin.

 

**“Amortization Period”**means a period of 360full consecutive calendar months.

 

**“Base Recourse”**means a portion of theIndebtedness equal to zero percent (0%) of the original principalbalance of this Note.

 

**“Business Day”**means any day other than aSaturday, a Sunday or any other day on which Lender is not open for business.

 

**“Default Rate”**means (i) during theFixed Rate Period, an annual interest rate equal to four (4) percentagepoints above the Fixed Interest Rate; and (ii) during the ExtensionPeriod, a variable annual interest rate equal to four (4) percentagepoints above the Adjustable Interest Rate in effect from time to time. However,at no time will the Default Rate exceed the Maximum Interest Rate.

 

**“Extended Maturity Date”**means, if theExtension Period becomes effective pursuant to this Note, the earlier of (i) May 01,2014, and (ii) the date on which the unpaid principal balance of thisNote becomes due and payable by acceleration or

 

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otherwisepursuant to the Loan Documents or the exercise by Lender of any right or remedythereunder.

 

**“Extension Period”**means the twelve (12)consecutive calendar months period commencing on the Scheduled Initial MaturityDate.

 

**“Fixed Interest Rate”**means the annualinterest rate of four and sixty-seven percent (4.67%).

 

**“Fixed Rate Period”**means the periodbeginning on the date of this Note and continuing through May 01, 2013.

 

**“Index Rate”**means, for any InterestAdjustment Period, the Reference Bill® Index Rate for such Interest AdjustmentPeriod.

 

**“Initial Maturity Date”**means the earlierof (i) May 01, 2013 (the **“ScheduledInitial Maturity Date”),**and (ii) the date on which the unpaidprincipal balance of this Note becomes due and payable by acceleration orotherwise pursuant to the Loan Documents or the exercise by Lender of any rightor remedy thereunder.

 

**“Installment Due Date”**means, for anymonthly installment of interest only or principal and interest, the date onwhich such monthly installment is due and payable pursuant to Section 3 ofthis Note. The **“First Installment Due Date”**underthis Note is June 01, 2004.

 

**“Interest Adjustment Period”**means eachsuccessive one calendar month period during the Extension Period and until theentire Indebtedness is paid in full.

 

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

 

**“LIBOR Index”**means the British BankersAssociation’s (BBA) one (1) month LIBOR Rate for United States Dollardeposits, as displayed on the LIBOR Index Page used to establish the LIBORIndex Rate.

 

**“LIBOR Index Rate”**means, for any InterestAdjustment Period after the first Interest Adjustment Period, the BBA’s LIBORRate for the LIBOR Index released by the BBA most recently preceding the firstday of such Interest Adjustment Period, as such LIBOR Rate is displayed on theLIBOR Index Page. The LIBOR Index Rate for the first Interest Adjustment Periodmeans the British Bankers Association’s (BBA) LIBOR Rate for the LIBOR Indexreleased by the BBA most recently preceding the first day of the month in whichthe first Interest Adjustment Period begins, as such LIBOR Rate is displayed onthe LIBOR Index Page.

 

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**“LIBOR Index Page”** is the Bloomberg L.P., page “BBAM”,or such other page for the LIBOR Index as may replace page BBAM onthat service, or at the option of Lender (i) the applicable page forthe LIBOR Index on another service which electronically transmits or displaysBBA LIBOR Rates, or (ii) any publication of LIBOR rates available from theBBA. In the event the BBA ceases to set or publish a LIBOR rate/interestsettlement rate for the LIBOR Index, Lender will designate an alternativeindex, and such alternative index shall constitute the LIBOR Index Rate.

 

**“Loan”**means the loan evidenced by thisNote.

 

**“Margin”**means two and one-half (2.5)percentage points (250 basis points).

 

**“Maturity Date”**means the Extended MaturityDate unless pursuant to Section 3(f) of this Note the ExtensionPeriod does not or cannot become effective, in which case the Maturity Datemeans the Initial Maturity Date.

 

**“Maximum Interest Rate”**means the rate ofinterest that results in the maximum amount of interest allowed by applicablelaw.

 

**“Reference Bills®”**means the unsecuredgeneral obligations of the Federal Home Loan Mortgage Corporation **(“Freddie Mac”)**designated by Freddie Macas “Reference Bills®” and having original durations to maturity most comparableto the term of the Reference Bill Index, and issued by Freddie Mac at regularlyscheduled auctions. In the event Freddie Mac shall at any time cease todesignate any unsecured general obligations of Freddie Mac as “Reference Bills”,then at the option of Lender (i) Lender may select from time to timeanother unsecured general obligation of Freddie Mac having original durationsto maturity most comparable to the term of the Reference Bill Index and issuedby Freddie Mac at regularly scheduled auctions, and the term “Reference Bills”as used in this Note shall mean such other unsecured general obligations asselected by Lender; or (ii) for any one or more Interest AdjustmentPeriods, Lender may use the applicable LIBOR Index Rate as the Index Rate forsuch Interest Adjustment Period(s).

 

**“Reference Bill Index”**means the one-monthReference Bills. One-month reference bills have original durations to maturityof approximately 30 days.

 

**“Reference Bill Index Rate”**means, for anyInterest Adjustment Period after the first Interest Adjustment Period, theMoney Market Yield for the Reference Bills as established by the Reference Billauction conducted by Freddie Mac most recently preceding the first day of suchInterest Adjustment Period, as displayed on the Reference Bill Index Page. TheReference Bill Index Rate for the first

 

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InterestAdjustment Period means the Money Market Yield for the Reference Bills asestablished by the Reference Bill auction conducted by Freddie Mac mostrecently preceding the first day of the month in which the first InterestAdjustment Period begins, as displayed on the Reference Bill Index Page. The **“Reference Bill Index Page”** is the FreddieMac Debt Securities Web Page (accessed via the Freddie Mac internet site atwww.freddiemac.com), or at the option of Lender, any publication of ReferenceBills auction results available from Freddie Mac. However, if Freddie Mac hasnot conducted a Reference Bill auction within the 60-calendar day period priorto the first day of an Interest Adjustment Period, the Reference Bill IndexRate for such Interest Adjustment Period will be the LIBOR Index Rate for suchInterest Adjustment Period.

 

**“Remaining Amortization Period”**means, atany point in time, the number of consecutive calendar months equal to thenumber of months in the Amortization Period minus the number of scheduledmonthly installments of principal and interest that have elapsed sincethe date of this Note.

 

**“Security Instrument”**means the multifamilymortgage, deed to secure debt or deed of trust effective as of the effectivedate of this Note, from Borrower to or for the benefit of Lender and securingthis Note.

 

**“Window Period”**means the Extension Period.

 

**“Yield Maintenance Period”**means the periodfrom and including the date of this Note until but not including the ScheduledInitial Maturity Date.

 

(b)       Other capitalized termsused but not defined in this Note shall have the meanings given to such termsin the Security Instrument.

 

**2.        Addressfor Payment.**All payments due under this Note shall bepayable at Berkshire Mortgage Finance Limited Partnership, One BeaconStreet, 14th Floor, Boston, MA 02108, or such otherplace as may be designated by Notice to Borrower from or on behalf of Lender.

 

**3.        Payments.**

 

(a)       During the Fixed RatePeriod, interest will accrue on the outstanding principal balance of this Noteat the Fixed Interest Rate, subject to the provisions of Section 8 of thisNote.

 

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During theExtension Period, interest will accrue on the outstanding principal balance ofthis Note at the Adjustable Interest Rate, subject to the provisions of Section 8of this Note.

 

(b)       Interest under this Noteshall be computed, payable and allocated on the basis of an actual/360 interestcalculation schedule (interest is payable for the actual number of days in eachmonth, and each month’s interest is calculated by multiplying the unpaidprincipal amount of this Note as of the first day of the month for whichinterest in being calculated by the Fixed Interest Rate (during the Fixed RatePeriod) or the applicable Adjustable Interest Rate (during the ExtensionPeriod), dividing the product by 360, and multiplying the quotient by thenumber of days in the month for which interest is being calculated). Forconvenience in determining the amount of a monthly installment of principal andinterest under this Note, Lender will use a 30/360 interest calculation paymentschedule (each year is treated as consisting of twelve 30-day months). However,as provided above, the portion of the monthly installment actually payable asand allocated to interest will be based upon an actual/360 interest calculationschedule, and the amount of each installment attributable to principal and theamount attributable to interest will vary based upon the number of days in themonth for which such installment is paid. Each monthly payment of principal andinterest will first be applied to pay in full interest due, and the balance ofthe monthly payment paid by Borrower will be credited to principal.

 

(c)       Unless disbursement ofprincipal 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 andincluding the last day of such calendar month shall be payable by Borrowersimultaneously with the execution of this Note. If disbursement of principal ismade by Lender to Borrower on the first day of a calendar month, then nopayment 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) ofinterest only or principal and interest, as applicable, will be the FirstInstallment Due Date set forth in Section l(a) of this Note. Exceptas provided in this Section 3(c) and in Section 10, accruedinterest will be payable in arrears.

 

(d)       Beginning on the FirstInstallment Due Date, and continuing until and including the monthlyinstallment due on the Initial Maturity Date, principal and accrued interestonly shall be payable by Borrower in consecutive monthly installments due andpayable on the first day of each calendar month. The amount of the monthlyinstallment of principal and interest payable pursuant to this Section 3(d) onan Installment Due Date shall be two hundred sixty-eight thousand sevenhundred fifty-four and 82/100 dollars ($268.754.82).

 

(e)       Except as otherwiseprovided in this Section 3(e), all remaining Indebtedness, including allprincipal and interest, shall be due and payable by Borrower on the InitialMaturity Date. However, so long as (i) the Initial Maturity Date has notoccurred prior to the Scheduled Initial Maturity Date, and (ii) no Eventof Default or event or circumstance which, with the giving of notice or passageof time or both, could constitute an Event of Default exists on the ScheduledInitial Maturity Date, then the Extension Period automatically will becomeeffective and the date for full payment of the Indebtedness automatically shallbe extended until the

 

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Extended MaturityDate. If the Extension Period becomes effective, monthly installments ofprincipal and interest or interest only will be payable during the ExtensionPeriod as provided in Section 3(f). Anything in Section 21 of theSecurity Instrument to the contrary notwithstanding, during the ExtensionPeriod, Borrower will not request that Lender consent to, and Lender will notconsent to, a Transfer that, absent such consent, would constitute an Event ofDefault.

 

(f)        If the Extension Periodbecomes effective, beginning on June 01, 2013 and continuing untiland including the monthly installment due on the Extended Maturity Date,principal and accrued interest shall be payable by Borrower in consecutive monthlyinstallments due and payable on the first day of each calendar month. Theamount of the monthly installment of principal and interest payable pursuant tothis Section 3(f) on an Installment Due Date shall be calculated soas to equal the monthly payment amount which would be payable on theInstallment Due Date as if the unpaid principal balance of this Note as of thefirst day of the Interest Adjustment Period immediately preceding theInstallment Due Date was to be fully amortized, together with interest thereonat the Adjustable Interest Rate in effect for such Interest Adjustment Period,in equal consecutive monthly payments paid on the first day of each calendarmonth over the Remaining Amortization Period.

 

(g)       During the ExtensionPeriod, Lender shall provide Borrower with notice, given in the mannerspecified in the Security Instrument, of the amount of each monthly installmentdue under this Note. However, if Lender has not provided Borrower with priornotice of the monthly payment due on any Installment Due Date, then Borrowershall pay on that Installment Due Date an amount equal to the monthlyinstallment payment for which Borrower last received notice. If Lender at anytime determines that Borrower has paid one or more monthly installments in anincorrect amount because of the operation of the preceding sentence, or becauseLender has miscalculated the Adjustable Interest Rate or has otherwisemiscalculated the amount of any monthly installment, then Lender shall givenotice to Borrower of such determination. If such determination discloses thatBorrower has paid less than the full amount due for the period for which thedetermination was made, Borrower, within 30 calendar days after receipt of thenotice from Lender, shall pay to Lender the full amount of the deficiency. Ifsuch determination discloses that Borrower has paid more than the full amountdue for the period for which the determination was made, then the amount of theoverpayment shall be credited to the next installment(s) of interest onlyor principal and interest, as applicable, due under this Note (or, if an Eventof Default has occurred and is continuing, such overpayment shall be creditedagainst any amount owing by Borrower to Lender).

 

(h)       All payments under thisNote shall be made in immediately available U.S. funds.

 

(i)        Any regularly scheduledmonthly installment of interest only or principal and interest payable pursuantto this Section 3 that is received by Lender before the date it is dueshall be deemed to have been received on the due date for the purpose ofcalculating interest due.

 

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

 

(k)       In accordance with Section 14,interest charged under this Note cannot exceed the Maximum Interest Rate. Ifthe Adjustable Interest Rate at any time exceeds the Maximum Interest Rate,resulting in the charging of interest hereunder to be limited to the MaximumInterest Rate, then any subsequent reduction in the Adjustable Interest Rateshall not reduce the rate at which interest under this Note accrues below theMaximum Interest Rate until the total amount of interest accrued hereunderequals the amount of interest which would have accrued had the Adjustable InterestRate at all times been in effect.

 

**4.        Applicationof Payments.**If at any time Lender receives, from Borrower orotherwise, any amount applicable to the Indebtedness which is less than allamounts due and payable at such time, Lender may apply the amount received toamounts then due and payable in any manner and in any order determined byLender, in Lender’s discretion. Borrower agrees that neither Lender’sacceptance of a payment from Borrower in an amount that is less than allamounts then due and payable nor Lender’s application of such payment shallconstitute or be deemed to constitute either a waiver of the unpaid amounts oran accord and satisfaction.

 

**5.        Security.**The Indebtedness is secured by, among other things, theSecurity Instrument, and reference is made to the Security Instrument for otherrights of Lender as to collateral for the Indebtedness.

 

**6.        Acceleration.**If an Event of Default has occurred and is continuing, theentire unpaid principal balance, any accrued interest, any prepayment premiumpayable under Section 10, and all other amounts payable under this Noteand any other Loan Document, shall at once become due and payable, at theoption of Lender, without any prior notice to Borrower (except if notice isrequired by applicable law, then after such notice). Lender may exercise thisoption to accelerate regardless of any prior forbearance. For purposes ofexercising such option, Lender shall calculate the prepayment premium as ifprepayment occurred on the date of acceleration. If prepayment occursthereafter, lender shall recalculate the prepayment premium as of the actualprepayment date.

 

**7.        LateCharge.**

 

(a)       If any monthlyinstallment of interest or principal and interest or other amount payable underthis Note or under the Security Instrument or any other Loan Document is not

 

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received in fullby Lender (i) during the Fixed Rate Period, within ten (10) daysafter the installment or other amount is due, or (ii) during the Extension Period,within five (5) days after the installment or other amount is due,counting from and including the date such installment or other amount is due(unless applicable law requires a longer period of time before a late chargemay be imposed, in which event such longer period shall be substituted),Borrower shall pay to Lender, immediately and without demand by Lender, a latecharge equal to five percent (5%) of such installment or other amount due(unless applicable law requires a lesser amount be charged, in which event suchlesser amount shall be substituted).

 

(b)       Borrower acknowledgesthat its failure to make timely payments will cause Lender to incur additionalexpenses in servicing and processing the Loan and that it is extremelydifficult and impractical to determine those additional expenses. Borroweragrees that the late charge payable pursuant to this Section represents afair and reasonable estimate, taking into account all circumstances existing onthe date of this Note, of the additional expenses Lender will incur by reasonof such late payment. The late charge is payable in addition to, and not inlieu of, any interest payable at the Default Rate pursuant to Section 8.

 

**8.        DefaultRate.**

 

(a)       So long as (i) anymonthly installment under this Note remains past due for thirty (30) days ormore 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 theInstallment Due Date of the first such unpaid monthly installment or theoccurrence of such other Event of Default, as applicable, at the Default Rate.

 

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

 

(c)       Borrower acknowledgesthat (i) its failure to make timely payments will cause Lender to incuradditional expenses in servicing and processing the Loan, (ii) during thetime that any monthly installment under this Note is delinquent for thirty (30)days or more, Lender will incur additional costs and expenses arising from itsloss of the use of the money due and from the adverse impact on Lender’sability to meet its other obligations and to take advantage of other investmentopportunities; and (iii) it is extremely difficult and impractical todetermine those additional costs and expenses. Borrower also acknowledges that,during the time that any monthly installment under this Note is delinquent forthirty (30) days or more or any other Event of Default has occurred and iscontinuing, Lender’s risk of nonpayment of this Note will be materiallyincreased and Lender is entitled to be compensated for such increased risk.Borrower agrees that the increase in the rate of interest payable under thisNote to the Default Rate represents a fair and reasonable estimate, taking intoaccount all circumstances existing on the date of this Note, of the additionalcosts and expenses Lender will incur by reason of the

 

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Borrower’sdelinquent payment and the additional compensation Lender is entitled toreceive for the increased risks of nonpayment associated with a delinquentloan.

 

**9.        Limitson Personal Liability.**

 

(a)       Except as otherwiseprovided in this Section 9, Borrower shall have no personal liabilityunder this Note, the Security Instrument or any other Loan Document for therepayment of the Indebtedness or for the performance of any other obligationsof Borrower under the Loan Documents and Lender’s only recourse for thesatisfaction of the Indebtedness and the performance of such obligations shallbe Lender’s exercise of its rights and remedies with respect to the MortgagedProperty and to any other collateral held by Lender as security for theIndebtedness. This limitation on Borrower’s liability shall not limit or impairLender’s enforcement of its rights against any guarantor of the Indebtedness orany guarantor of any other obligations of Borrower.

 

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

 

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

 

(i)                        Borrowerfails to pay to Lender upon demand after an Event of Default all Rents to whichLender is entitled under Section 3(a) of the Security Instrument andthe amount of all security deposits collected by Borrower from tenants then inresidence. However, Borrower will not be personally liable for any failuredescribed in this subsection (i) if Borrower is unable to pay to Lenderall Rents and security deposits as required by the Security Instrument becauseof a valid order issued in a bankruptcy, receivership, or similar judicialproceeding.

 

(ii)                     Borrowerfails to apply all insurance proceeds and condemnation proceeds as required bythe Security Instrument. However, Borrower will not be personally liable forany failure described in this subsection (ii) if Borrower is unable toapply insurance or condemnation proceeds as required by the Security Instrumentbecause of a valid order issued in a bankruptcy, receivership, or similarjudicial proceeding.

 

(iii)                  Borrower failsto comply with Section 14(g) or (h) of the Security Instrumentrelating to the delivery of books and records, statements, schedules andreports.

 

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(iv)                 Borrower fails topay when due in accordance with the terms of the Security Instrument the amountof any item below marked “Deferred”; provided however, that if no item ismarked “Deferred”, this Section 9(c)(iv) shall be of no force oreffect.

 

[Deferred]      Hazard Insurancepremiums or other insurance premiums,

[Deferred]      Taxes,

[Deferred]      waterand sewer charges (that could become a lien on the Mortgaged Property),

[N/A]      groundrents,

[Deferred]      assessmentsor other charges (that could become a lien on the Mortgaged Property)

 

(d)       In addition to the BaseRecourse, Borrower shall be personally liable to Lender for:

 

(i)                        theperformance of all of Borrower’s obligations under Section 18 of theSecurity Instrument (relating to environmental matters);

 

(ii)                     the costs ofany audit under Section 14(g) of the Security Instrument; and

 

(iii)                  any costs andexpenses incurred by Lender in connection with the collection of any amount forwhich Borrower is personally liable under this Section 9, includingAttorneys’ Fees and Costs and the costs of conducting any independent audit ofBorrower’s books and records to determine the amount for which Borrower haspersonal liability.

 

(e)       All payments made byBorrower with respect to the Indebtedness and all amounts received by Lenderfrom the enforcement of its rights under the Security Instrument and the otherLoan Documents shall be applied first to the portion of the Indebtedness forwhich Borrower has no personal liability.

 

(f)        Notwithstanding theBase Recourse, Borrower shall become personally liable to Lender for therepayment of all of the Indebtedness upon the occurrence of any of thefollowing Events of Default:

 

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

 

(ii)                     a Transfer(including, but not limited to, a lien or encumbrance) that is an Event ofDefault under Section 21 of the Security Instrument, other than a Transferconsisting solely of the involuntary removal or involuntary withdrawal of ageneral partner in a limited partnership or a manager in a limited liabilitycompany; or

 

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(iii)                  fraud or writtenmaterial misrepresentation by Borrower or any officer, director, partner,member or employee of Borrower in connection with the application for orcreation of the Indebtedness or any request for any action or consent byLender.

 

(g)       To the extent that Borrower has personalliability under this Section 9, Lender may exercise its rights againstBorrower personally without regard to whether Lender has exercised any rightsagainst the Mortgaged Property or any other security, or pursued any rightsagainst any guarantor, or pursued any other rights available to Lender underthis Note, the Security Instrument, any other Loan Document or applicable law.To the fullest extent permitted by applicable law, in any action to enforceBorrower’s personal liability under this Section 9, Borrower waives anyright to set off the value of the Mortgaged Property against such personalliability.

 

**10.      Voluntary and Involuntary Prepayments.**

 

(a)       Any receipt by Lender of principal dueunder this Note prior to the Scheduled Initial Maturity Date, other thanprincipal required to be paid in monthly installments pursuant to Section 3,constitutes a prepayment of principal under this Note. Without limiting theforegoing, any application by Lender, prior to the Scheduled Initial MaturityDate, of any proceeds of collateral or other security to the repayment of anyportion of the unpaid principal balance of this Note constitutes a prepaymentunder this Note.

 

(b)       Borrower may voluntarily prepay all ofthe unpaid principal balance of this Note on a Business Day designated as thedate for such prepayment in a Notice from Borrower to Lender given at least 30days prior to the date of such prepayment. Unless otherwise expressly providedin the Loan Documents, Borrower may not voluntarily prepay less than all of theunpaid principal balance of this Note.

 

(c)       Borrower acknowledges that Lender hasagreed that principal may be prepaid other than on the last calendar day of amonth only because, for the purposes of the accrual of interest, any prepaymentreceived by Lender on any day other than the last calendar day of the monthshall be deemed to have been received on the last calendar day of the month inwhich the prepayment occurs.

 

(d)       In order to voluntarily prepay all or anypart of the principal of this Note, Borrower must also pay to Lender, togetherwith the amount of principal being prepaid, (i) all accrued and unpaidinterest due under this Note, plus (ii) all other sums due to Lender atthe time of such prepayment, plus (ii) any prepayment premium calculatedpursuant to Section 10(e).

 

(e)       Except as provided in Section 10(f),a prepayment premium shall be due and payable by Borrower in connection withany prepayment of principal under this Note during the

 

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Yield Maintenance Period.The prepayment premium shall be whichever is the greater of subsections (A) and(B) below:

 

(A)     1.0% of the amount of principal beingprepaid; or

 

(B)      the product obtained by multiplying:

 

(1)                     the amount ofprincipal being prepaid or accelerated, *by*

 

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

 

(3)                     the PresentValue Factor.

 

For purposes ofsubsection (B), the following definitions shall apply:

 

**MonthlyNote Rate:**one-twelfth (1/12) of the Fixed Interest Rate,expressed as a decimal calculated to five digits.

 

**PrepaymentDate:**in the case of a voluntary prepayment, the date onwhich the prepayment is made; in the case of the application by Lender ofcollateral or security to a portion of the principal balance, the date of suchapplication.

 

**AssumedReinvestment Rate:**one-twelfth (1/12) of the yield rate, asof the date 5 Business Days before the Prepayment Date, on the 3.625%U.S. Treasury Security due May 15, 2013, as reported in *The Wall Street Journal,*expressed as adecimal calculated to five digits. In the event that no yield is published onthe applicable date for the Treasury Security used to determine the AssumedReinvestment Rate, Lender, in its discretion, shall select the non-callableTreasury Security maturing in the same year as the Treasury Security specifiedabove with the lowest yield published in *TheWall Street Journal*as of the applicable date. If the publication ofsuch yield rates in *The Wall Street Journal*isdiscontinued for any reason, Lender shall select a security with a comparablerate and term to the Treasury Security used to determine the AssumedReinvestment Rate. The selection of an alternate security pursuant to this Section shallbe made in Lender’s discretion.

 

**PresentValue Factor:**the factor that discounts to present value thecosts resulting to Lender from the difference in interest rates during themonths remaining in the Yield Maintenance Period, using the Assumed

 

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Reinvestment Rate as thediscount rate, with monthly compounding, expressed numerically as follows:

 
|   |  |
|--------|--|

 

**n**=number of months or partial months remaining in Yield Maintenance Period

 

**ARR**=Assumed Reinvestment Rate

 

(f)        Notwithstanding any other provision ofthis Section 10, no prepayment premium shall be payable with respect to (i) anyprepayment made during the Window Period, or (ii) any prepayment occurringas a result of the application of any insurance proceeds or condemnation awardunder the Security Instrument.

 

(g)       Unless Lender agrees otherwise inwriting, a permitted or required prepayment of less than the unpaid principalbalance of this Note shall not extend or postpone the due date of anysubsequent monthly installments or change the amount of such installments.

 

(h)       Borrower recognizes that any prepaymentof any of the unpaid principal balance of this Note, whether voluntary orinvoluntary or resulting from an Event of Default by Borrower, will result inLender’s incurring loss, including reinvestment loss, additional expense andfrustration or impairment of Lender’s ability to meet its commitments to thirdparties. Borrower agrees to pay to Lender upon demand damages for the detrimentcaused by any prepayment, and agrees that it is extremely difficult andimpractical to ascertain the extent of such damages. Borrower thereforeacknowledges and agrees that the formula for calculating prepayment premiumsset forth in this Note represents a reasonable estimate of the damages Lenderwill incur because of a prepayment. Borrower further acknowledges that anylockout and the prepayment premium provisions of this Note are a material partof the consideration for the Loan, and that the terms of this Note are in otherrespects more favorable to Borrower as a result of the Borrower’s voluntaryagreement to the lockout and prepayment premium provisions.

 

**11.      Costs and Expenses**. Tothe fullest extent allowed by applicable law, Borrower shall pay all expensesand costs, including Attorneys’ Fees and Costs incurred by Lender as a resultof any default under this Note or in connection with efforts to collect anyamount due under this Note, or to enforce the provisions of any of the otherLoan Documents, including those incurred in post-judgment collection effortsand in any bankruptcy proceeding (including any action for relief from theautomatic stay of any bankruptcy proceeding) or judicial or non-judicialforeclosure proceeding.

 

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**12.**      **Forbearance.**Any forbearance by Lender in exercising any right or remedy underthis Note, the Security Instrument, or any other Loan Document or otherwiseafforded by applicable law, shall not be a waiver of or preclude the exerciseof that or any other right or remedy. The acceptance by Lender of any paymentafter the due date of such payment, or in an amount which is less than therequired payment, shall not be a waiver of Lender’s right to require promptpayment when due of all other payments or to exercise any right or remedy withrespect to any failure to make prompt payment. Enforcement by Lender of anysecurity for Borrower’s obligations under this Note shall not constitute anelection by Lender of remedies so as to preclude the exercise of any otherright or remedy available to Lender.

 

**13.      Waivers.** Borrower andall endorsers and guarantors of this Note and all other third party obligorswaive presentment, demand, notice of dishonor, protest, notice of acceleration,notice of intent to demand or accelerate payment or maturity, presentment forpayment, notice of nonpayment, grace, and diligence in collecting theIndebtedness.

 

**14.**      **LoanCharges.** Neither this Note nor any of the other Loan Documents shallbe construed to create a contract for the use, forbearance or detention ofmoney requiring payment of interest at a rate greater than the Maximum InterestRate. If any applicable law limiting the amount of interest or other chargespermitted to be collected from Borrower in connection with the Loan isinterpreted so that any interest or other charge provided for in any LoanDocument, whether considered separately or together with other charges providedfor in any other Loan Document, violates that law, and Borrower is entitled tothe benefit of that law, that interest or charge is hereby reduced to theextent necessary to eliminate that violation. The amounts, if any, previouslypaid to Lender, in excess of the permitted amounts shall be applied by Lenderto reduce the unpaid principal balance of this Note. For the purpose ofdetermining whether any applicable law limiting the amount of interest or othercharges permitted to be collected from Borrower has been violated, allIndebtedness that constitutes interest, as well as all other charges made inconnection with the Indebtedness that constitute interest, shall be deemed tobe allocated and spread ratably over the stated term of this Note. Unlessotherwise required by applicable law, such allocation and spreading shall beeffected in such a manner that the rate of interest so computed is uniformthroughout the stated term of this Note.

 

**15.      Commercial Purpose.**Borrowerrepresents that Borrower is incurring the Indebtedness solely for the purposeof carrying on a business or commercial enterprise, and not for personal,family, household, or agricultural purposes.

 

**16.      Counting of Days.**Exceptwhere otherwise specifically provided, any reference in this Note to a periodof “days” means calendar days, not Business Days.

 

**17.**      **GoverningLaw.** This Note shall be governed by the law of the PropertyJurisdiction.

 

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**18.      Captions.**The captionsof the Sections of this Note are for convenience only and shall be disregardedin construing this Note.

 

**19.      Notices; Written Modifications.**

 

(a)       All Notices, demands and othercommunications required or permitted to be given pursuant to this Note shall begiven in accordance with Section 31 of the Security Instrument.

 

(b)       Any modification or amendment to thisNote shall be ineffective unless in writing signed by the party sought to becharged with such modification or amendment; provided, however, that in theevent of a Transfer under the terms of the Security Instrument that requiresLender’s consent, any or some or all of the Modifications to Multifamily. Noteset forth in Exhibit A to this Note may be modified or rendered void byLender at Lender’s option, by Notice to Borrower and the transferee, as acondition of Lender’s consent.

 

**20.      Consent to Jurisdiction and Venue.**Borroweragrees that any controversy arising under or in relation to this Note may belitigated in the Property Jurisdiction. The state and federal courts andauthorities with jurisdiction in the Property Jurisdiction shall have jurisdictionover all controversies that shall arise under or in relation to this Note.Borrower irrevocably consents to service, jurisdiction, and venue of suchcourts for any such litigation and waives any other venue to which it might beentitled by virtue of domicile, habitual residence or otherwise. However,nothing in this Note is intended to limit any right that Lender may have tobring any suit, action or proceeding relating to matters arising under thisNote in any court of any other jurisdiction.

 

**21.      WAIVER OF TRIAL BY JURY. BORROWER ANDLENDER EACH (A) AGREES NOT TO ELECT A TRIAL BY JURY WITH RESPECT TO ANYISSUE ARISING OUT OF THIS NOTE OR THE RELATIONSHIP BETWEEN THE PARTIES ASLENDER AND BORROWER THAT IS TRIABLE OF RIGHT BY A JURY AND (B) WAIVES ANYRIGHT TO TRIAL BY JURY WITH RESPECT TO SUCH ISSUE TO THE EXTENT THAT ANY SUCHRIGHT 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.**

 

**22.      State-Specific Provisions.**

 

**A.****                     **If aguarantor is liable for only a portion of the Indebtedness, Borrower herebywaives its rights under California Civil Code Section 2822(a) todesignate the portion of the Indebtedness that shall be satisfied by Borrower’spartial payment.

 

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**ATTACHEDEXHIBIT. The Exhibit noted below, if marked with an “X” in the spaceprovided, is attached to this Note:**

 

**x         Exhibit A   Modificationsto Multifamily Note**

 

**INWITNESS WHEREOF,**and in consideration of the Lender’sagreement to lend Borrower the principal amount set forth above, Borrower hassigned and delivered this Note under seal or has caused this Note to be signedand delivered under seal by its duly authorized representative.

 

95-4869325

Borrower’s SocialSecurity/Employer ID Number

 

 
| Waterford Place  Apartments, LLC,   a California limited liability company |                                                                                |                      |
|----------------------------------------------------------------------------|-------------------------------------------------------------------------------------|---------------------------|
|                                                                       |                                                                                |                      |
| By:                                                                        | Shea Properties  Management Company, Inc.  a Delaware corporation   Its Manage |                      |   |
|                                                                       |                                                                                |                      |   |
|                                                                       | By:                                                                                 | /s/ Authorized  Signatory |   |   |
|                                                                       | Its:                                                                                | Treasurer                 |   |   |
|                                                                       |                                                                                |                      |   | **PAY TO  THE ORDER OF** |
|                                                                       |                                                                                |                      | **                                                                                          WITHOUT****RECOURSE THIS                                    OF                           20         INTEREST ON THIS WITHIN NOTE TO ACCRUE FROM** |
|                                                                       | By:                                                                                 | /s/ Authorized  Signatory |   |
|                                                                       | Its:                                                                                | Vice President            |   |
|                                                                       |                                                                                |                      | **                                                                                     ,  20           ** |
|                                                                       |                                                                                | ** **                | **BERKSHIRE  MORTGAGE FINANCE LIMITED PARTNERSHIP  BY: BRF CORPORATION, ITS GENERAL PARTNER** |
|                                                                       |                                                                                | ** **                | **BY:** | /s/ Authorized  Signatory |
|                                                                       |                                                                                | ** **                |   | **SUE  NELSON, SENIOR VICE PRESIDENT-IRVINE** |

 

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**EXHIBIT A**

 

MODIFICATIONS TO MULTIFAMILY NOTE

 

The followingmodifications are made to the text of the Multifamily Note that precedes thisExhibit:

 

1.                         After theword “prepayment” in the last sentence of Paragraph 10(e), insert thefollowing: “, and such prepayment premium shall be the only amount payable byBorrower with respect to any damages Lender may incur because of a prepayment.”

 

2.                         After thesecond reference to “Lender” in the third sentence of Paragraph 14, insert thefollowing: “.without prepayment premium or penalty,”.

 

3.                         TheModifications set forth in this Exhibit A shall become ineffective upon aTransfer under the Security Instrument that requires Lender’s consent or uponany Transfer that constitutes an Event of Default under Section 21(a) ofthe Security Instrument. .

 

 
|   |   | INITIAL: | /s/ Authorized  Signatory |
|--------|--------|----------|---------------------------|

 

A-1

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