Loan No. 33-0914051
PROMISSORY NOTE
| $24,406,000.00 | New York, New York |
| January 31, 2012 |
FOR VALUE RECEIVED,ARC3 FEBMTNH001, LLC,a Delaware limited liability company("NH Borrower"),andARC3 ESBKYM0001, LLC,a Delaware limited liability company("MO Borrower";NH Borrower and MO Borrower, individually and/orcollectively, as the context may require,"Borrower"),each having an address at 405 ParkAvenue, 15th Floor, New York, New York 10022, hereby unconditionally promise to pay to theorder ofWELLS FARGO BANK, NATIONAL ASSOCIATION,having an address at WellsFargo Center, 1901 Harrison Street, 2nd Floor, MAC A0227-020, Oakland, California 94612(together with its successors and/or assigns,"Lender"),or at such other place as the holderhereof may from time to time designate in writing, the principal sum of TWENTY FOURMILLION FOUR HUNDRED SIX THOUSAND AND NO/100 DOLLARS ($24,406,000.00),or so much thereof as is advanced, in lawful money of the United States of America, withinterest thereon to be computed from the date of this Note at the Interest Rate, and to be paid inaccordance with the terms of this Note and that certain Loan Agreement dated the date hereofbetween Borrower and Lender (as the same may be amended, restated, replaced, supplemented or otherwise modified from time to time, the"Loan Agreement").All capitalized terms notdefined herein shall have the respective meanings set forth in the Loan Agreement.
ARTICLE 1: PAYMENT TERMS
Borrower agrees to pay the principal sum of this Note and interest on the unpaidprincipal sum of this Note from time to time outstanding at the rates and at the times specified inArticle 2 of the Loan Agreement and the outstanding balance of the principal sum of this Noteand all accrued and unpaid interest thereon shall be due and payable on the Maturity Date.
ARTICLE 2: DEFAULT AND ACCELERATION
The Debt shall without notice become immediately due and payable at the optionof Lender upon the occurrence and during the continuance of any Event of Default.
ARTICLE 3: LOAN DOCUMENTS
This Note is secured by the Security Instrument and the other Loan Documents.All of the terms, covenants and conditions contained in the Loan Agreement, the SecurityInstrument and the other Loan Documents are hereby made part of this Note to the same extentand with the same force as if they were fully set forth herein. In the event of a conflict orinconsistency between the terms of this Note and the Loan Agreement, the terms and provisionsof the Loan Agreement shall govern.
ARTICLE 4: SAVINGS CLAUSE
Notwithstanding anything to the contrary, (a) all agreements and communicationsbetween Borrower and Lender are hereby and shall automatically be limited so that, after takinginto account all amounts deemed interest, the interest contracted for, charged or received by Lender shall never exceed the Maximum Legal Rate, (b) in calculating whether any interestexceeds the Maximum Legal Rate, all such interest shall be amortized, prorated, allocated and spread over the full amount and term of all principal indebtedness of Borrower to Lender, and (c)if through any contingency or event, Lender receives or is deemed to receive interest in excess ofthe Maximum Legal Rate, any such excess shall be deemed to have been applied towardpayment of the principal of any and all then outstanding indebtedness of Borrower to Lender, orif there is no such indebtedness, shall immediately be returned to Borrower.
ARTICLE 5: NO ORAL CHANGE
This Note may not be modified, amended, waived, extended, changed, discharged or terminated orally or by any act or failure to act on the part of Borrower or Lender, but only byan agreement in writing signed by the party against whom enforcement of any modification,amendment, waiver, extension, change, discharge or termination is sought.
ARTICLE 6: WAIVERS
Borrower and all others who may become liable for the payment of all or any part of the Debt do hereby severally waive presentment and demand for payment, notice of dishonor,notice of intention to accelerate, notice of acceleration, protest and notice of protest and non-payment and all other notices of any kind, except for any notices expressly required pursuant tothe Loan Documents. No release of any security for the Debt or extension of time for paymentof this Note or any installment hereof, and no alteration, amendment or waiver of any provision of this Note, the Loan Agreement or the other Loan Documents made by agreement between Lender or any other Person shall release, modify, amend, waive, extend, change, discharge,terminate or affect the liability of Borrower or any other Person who may become liable for thepayment of all or any part of the Debt under this Note, the Loan Agreement or the other LoanDocuments. No notice to or demand on Borrower shall be deemed to be a waiver of theobligation of Borrower or of the right of Lender to take further action without further notice ordemand as provided for in this Note, the Loan Agreement or the other Loan Documents. IfBorrower is a partnership or limited liability company, the agreements herein contained shallremain in force and be applicable, notwithstanding any changes in the individuals comprising thepartnership or limited liability company, and the term "Borrower," as used herein, shall includeany alternate or successor partnership or limited liability company, but any predecessorpartnership or limited liability company and their partners or members shall not thereby bereleased from any liability. If Borrower is a corporation, the agreements contained herein shallremain in full force and be applicable notwithstanding any changes in the shareholderscomprising, or the officers and directors relating to, the corporation, and the term "Borrower," asused herein, shall include any alternative or successor corporation, but any predecessorcorporation shall not be relieved of liability hereunder. Nothing in the foregoing sentence shallbe construed as a consent to, or a waiver of, any prohibition or restriction on transfers of interestsin such partnership, limited liability company or corporation, which may be set forth in the LoanAgreement, the Security Instrument or any other Loan Document.
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ARTICLE 7: TRANSFER
Upon the transfer of this Note, Borrower hereby waiving notice of any suchtransfer, Lender may deliver all the collateral mortgaged, granted, pledged or assigned pursuantto the Loan Documents, or any part thereof, to the transferee who shall thereupon become vestedwith all the rights herein or under applicable law given to Lender with respect thereto, andLender shall thereafter forever be relieved and fully discharged from any liability orresponsibility in the matter; but Lender shall retain all rights hereby given to it with respect toany liabilities and the collateral not so transferred.
ARTICLE 8: EXCULPATION
The provisions of Article 13 of the Loan Agreement are hereby incorporated byreference into this Note to the same extent and with the same force as if fully set forth herein.
ARTICLE 9: GOVERNING LAW
(A) THIS NOTE WAS NEGOTIATED IN THE STATE OF NEWYORK, AND MADE BY BORROWER AND ACCEPTED BY LENDER IN THESTATE OF NEW YORK, AND THE PROCEEDS OF THIS NOTE WERE DISBURSEDFROM THE STATE OF NEW YORK, WHICH STATE THE PARTIES AGREE HAS ASUBSTANTIAL RELATIONSHIP TO THE PARTIES AND TO THE UNDERLYINGTRANSACTION EMBODIED HEREBY, AND IN ALL RESPECTS, INCLUDING,WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, MATTERS OFCONSTRUCTION, VALIDITY AND PERFORMANCE, THIS NOTE AND THEOBLIGATIONS ARISING HEREUNDER SHALL BE GOVERNED BY, ANDCONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEWYORK APPLICABLE TO CONTRACTS MADE AND PERFORMED IN SUCHSTATE (WITHOUT REGARD TO PRINCIPLES OF CONFLICT LAWS) AND ANY APPLICABLE LAW OF THE UNITED STATES OF AMERICA. TO THE FULLESTEXTENT PERMITTED BY LAW, BORROWER HEREBY UNCONDITIONALLYAND IRREVOCABLY WAIVES ANY CLAIM TO ASSERT THAT THE LAW OFANY OTHER JURISDICTION GOVERNS THIS NOTE AND THIS NOTE SHALL BEGOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THESTATE OF NEW YORK PURSUANT TO SECTION 5-1401 OF THE NEW YORKGENERAL OBLIGATIONS LAW.
(B) ANY LEGAL SUIT, ACTION OR PROCEEDING AGAINST LENDER OR BORROWER ARISING OUT OF OR RELATING TO THIS NOTE MAYAT LENDER'S OPTION BE INSTITUTED IN ANY FEDERAL OR STATE COURT IN THE CITY OF NEW YORK, COUNTY OF NEW YORK, PURSUANT TO SECTION 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW, AND BORROWERWAIVES ANY OBJECTIONS WHICH IT MAY NOW OR HEREAFTER HAVEBASED ON VENUE AND/OR FORUM NON CONVENIENS OF ANY SUCH SUIT,ACTION OR PROCEEDING, AND BORROWER HEREBY IRREVOCABLY SUBMITS TO THE JURISDICTION OF ANY SUCH COURT IN ANY SUIT, ACTIONOR PROCEEDING. BORROWER DOES HEREBY DESIGNATE AND APPOINT:
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TIMOTHY FITZGERALD
C/O BOND, SCHOENECK & KING, PLLC
350 LINDEN OAKS, SUITE 310
ROCHESTER, NEW YORK 14625
AS ITS AUTHORIZED AGENT TO ACCEPT AND ACKNOWLEDGE ON ITS BEHALFSERVICE OF ANY AND ALL PROCESS WHICH MAY BE SERVED IN ANY SUCH SUIT, ACTION OR PROCEEDING IN ANY FEDERAL OR STATE COURT IN NEWYORK, NEW YORK, AND AGREES THAT SERVICE OF PROCESS UPON SAIDAGENT AT SAID ADDRESS AND WRITTEN NOTICE OF SAID SERVICE MAILEDOR DELIVERED TO BORROWER IN THE MANNER PROVIDED HEREIN SHALL BE DEEMED IN EVERY RESPECT EFFECTIVE SERVICE OF PROCESS UPONBORROWER IN ANY SUCH SUIT, ACTION OR PROCEEDING IN THE STATE OFNEW YORK. BORROWER (I) SHALL GIVE PROMPT NOTICE TO LENDER OFANY CHANGED ADDRESS OF ITS AUTHORIZED AGENT HEREUNDER, (II) MAYAT ANY TIME AND FROM TIME TO TIME DESIGNATE A SUBSTITUTE AUTHORIZED AGENT WITH AN OFFICE IN NEW YORK, NEW YORK (WHICHSUBSTITUTE AGENT AND OFFICE SHALL BE DESIGNATED AS THE PERSONAND ADDRESS FOR SERVICE OF PROCESS), AND (III) SHALL PROMPTLYDESIGNATE SUCH A SUBSTITUTE IF ITS AUTHORIZED AGENT CEASES TOHAVE AN OFFICE IN NEW YORK, NEW YORK OR IS DISSOLVED WITHOUT LEAVING A SUCCESSOR.
ARTICLE 10: NOTICES
All notices or other written communications hereunder shall be delivered in accordance with Article 14 of the Loan Agreement.
ARTICLE 11: SPECIAL NEW HAMPSHIRE PROVISIONS
(A) Principles of Construction.In the event of any inconsistencies between theterms and conditions of this Article 11 and the terms and conditions of this Note, the terms andconditions of this Article 11 shall control and be binding.
(B) Instrument Under Seal.This Note shall have the effect of an instrument executed under seal.
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IN WITNESS WHEREOF,Borrower has duly executed this Promissory Note asof the day and year first above written.
| BORROWER: | ||
| ARC3 FEBMTNH001, LLC, a Delaware limited liability company | ||
| By: | /s/ William M. Kahane | |
| Name: William M. Kahane | ||
| Title: President | ||
Promissory Note — Signature Page
| BORROWER: | ||
| ARC3 ESBKYM0001, LLC, a Delaware limitedliability company | ||
| By: | /s/ William M. Kahane | |
| Name: William M. Kahane | ||
| Title: President | ||
Promissory Note — Signature Page