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  STACK METHOD — DRAFT TEMPLATE — NOT LEGAL ADVICE — ATTORNEY REVIEW REQUIRED
  Provided "as is," for education only. No liability accepted. [BRACKETS] = fill in.
  Use for the SENIOR (debt-fund) loan, and/or for a seller SUBORDINATE note if you
  chose Option B in Doc 04. Mark clearly which position the note is in.
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                          PROMISSORY NOTE

Principal: $[AMOUNT]            Date: [DATE]            [CITY, STATE]
Position: [ ] First (Senior)   [ ] Subordinate (Second)

1.  PROMISE TO PAY. For value received, [PROPERTY LLC NAME], LLC ("Borrower")
    promises to pay to [DEBT FUND/LENDER or SELLER] ("Holder") the principal sum of
    $[AMOUNT] with interest as below.

2.  INTEREST. [__]% per annum [fixed / step-up per Schedule A], on the unpaid
    principal, computed [30/360].

3.  PAYMENTS. [ ] Interest-only monthly of $[__], beginning [DATE].
                [ ] No periodic payments; all due at Maturity.
    Step-up option: rate increases from [1]% to [6]% per Schedule A.

4.  MATURITY (BALLOON). All unpaid principal and accrued interest are due on
    [MATURITY DATE] ([60-84] months), expected to be paid via refinance.
    Extension: subject to the Balloon-Extension Addendum (Doc 12), if applicable.

5.  SECURITY. Secured by a [Deed of Trust / Mortgage] of even date on the Property
    (Doc 08), in [first / second] position.

6.  PREPAYMENT. May be prepaid in whole or part without penalty.

7.  DEFAULT. If any payment is not made within [10] days of due date, or on other
    defaults in the security instrument, Holder may, after any required notice and
    the applicable cure period, declare the entire balance due and pursue remedies
    in the security instrument and at law.

8.  LATE CHARGE / DEFAULT RATE. Late charge of [__]%; default interest of [__]%.

9.  RECOURSE. [ ] Non-recourse except for standard carve-outs.
               [ ] Limited recourse / guaranty by [GUARANTOR] (see credit sponsor).

10. GOVERNING LAW. [STATE]. Borrower waives presentment and notice of dishonor to
    the extent permitted by law.

Borrower: [PROPERTY LLC NAME], LLC
By: ____________________  Title: ______  Date: ______

Schedule A — Step-Up Rate (if any)