Exhibit 10.2

 

FORM OF PROMISSORY NOTE A-[•]

 

 

LOAN TERMS TABLE

 

Lender: KeyBank National Association, a national banking association, its
successors and assigns

Loan No.: 10202952

Lender’s Address: 11501 Outlook, Suite 300, Overland Park, Kansas 66211

Borrower: individually, collectively, jointly and severally, the following, each
of which is a Delaware limited liability company

  ARG CMGLTWY001, LLC,

ARG SSFSRIN001, LLC,

  ARG CDNCNOH001, LLC,

ARC ATSNTTX001, LLC,

  ARG MT2PKSLB001, LLC, ARG EQWBGPA001, LLC,   ARG HRTFTGA001, LLC, ARG
HCCLHGA001, LLC,   ARC FELKCLA001, LLC, ARG EHBIRAL001, LLC,   ARG UPDBNMI001,
LLC and ARC SLSTCCA001, LLC

Borrower’s Address: 405 Park Avenue, New York, New York 10022

Property: as defined in the Loan Agreement

Closing Date: September 12, 2019

Original Principal Amount: $[•]

Maturity Date: October 1, 2029

Interest Rate: Three and six hundred fifty thousandths percent (3.650%) per
annum

Initial Interest Payment Per Diem: $[•]

Monthly Debt Service Payment Amount: as defined in Section 2(b) hereof

Payment Date: November 1, 2019 and on the first day of each successive month
thereafter

Permitted Par Prepayment Date: July 1, 2029

Prepayment Consideration:
Closing Date through

November 1, 2021 No prepayment permitted    

November 2, 2021 through June 30, 2029:

the greater of (i) 1.0% of the OPB at the time of prepayment or (ii) the Yield
Maintenance Amount    

Permitted Par Prepayment Date through the Maturity Date

  (“Open Prepayment Period”): No Prepayment Consideration required

 

1.       Loan Amount and Rate. FOR VALUE RECEIVED, Borrower promises to pay to
the order of Lender, the Original Principal Amount (or so much thereof as is
outstanding from time to time, which is referred to herein as the “Outstanding
Principal Balance” or “OPB”), with interest on the unpaid OPB from the date of
disbursement of the Loan (as hereinafter defined) evidenced by this Promissory
Note A-[•] (“Note”) at the Interest Rate. Interest on the outstanding principal
balance of the Loan shall be calculated by multiplying (a) the actual number of
days elapsed in the relevant Accrual Period (as defined in the Loan Agreement)
by (b) a daily rate based on the Interest Rate and a three hundred sixty (360)
day year by (c) the outstanding principal balance of the Loan. Borrower
acknowledges that the calculation method for interest described herein results
in a higher effective interest rate than the numeric Interest Rate and Borrower
hereby agrees to this calculation method. The loan evidenced by this Note will
sometimes hereinafter be called the “Loan.” The above Loan Terms Table
(hereinafter referred to as the “Table”) is a part of the Note and all terms
used in this Note that are defined in the Table shall have the meanings set
forth therein. Any capitalized term defined in the Loan Agreement and not
otherwise defined herein shall have the same meaning when used in this Note.

 

 

 

 

2.       Principal and Interest Payments. Payments of principal and interest
shall be made as follows:

 

(a)     On the date of disbursement of the Loan proceeds, an interest payment
calculated by multiplying (i) the Initial Interest Payment Per Diem by (ii) the
number of days from (and including) the date of the disbursement of the Loan
proceeds through the last day of the calendar month in which the disbursement
was made;

 

(b)    On each Payment Date until the Maturity Date, an interest only payment
(each, a “Monthly Debt Service Payment Amount”) at the Interest Rate on the
Outstanding Principal Balance shall be payable in arrears, each of such payments
to be applied to the payment of interest computed at the Interest Rate; and

 

(c)     If not sooner paid, the Outstanding Principal Balance, all unpaid
interest thereon, and all other amounts owed to Lender pursuant to this Note or
any other Loan Document or otherwise in connection with the Loan or the security
for the Loan shall be due and payable on the Maturity Date.

 

3.       Security for Note. This Note is secured by one or more deeds of trust,
mortgages, or deeds to secure debt (which are herein individually and
collectively called the “Security Instrument”) encumbering the Property. This
Loan is entered into pursuant to that certain Loan Agreement between Borrower
and Lender of even date herewith (the “Loan Agreement”). All amounts that are
now or in the future become due and payable under this Note, the Security
Instrument, or any other Loan Document, including any Prepayment Consideration
and all applicable expenses, costs, charges, and fees, will be referred to
herein as the “Debt.” The remedies of Lender as provided in this Note, any other
Loan Document, or under applicable law shall be cumulative and concurrent, may
be pursued singularly, successively, or together at the discretion of Lender,
and may be exercised as often as the occurrence of an occasion for which Lender
is entitled to a remedy under the Loan Documents or applicable law. The failure
to exercise any right or remedy shall not be construed as a waiver or release of
the right or remedy respecting the same or any subsequent default.

 

4.       Intentionally Omitted.

 

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5.       Payments. All amounts payable hereunder shall be payable in lawful
money of the United States of America to Lender at Lender’s Address or such
other place as the holder hereof may designate in writing, which may include at
Lender’s option a requirement that payment be made by (a) wire transfer of
immediately available funds in accordance with written wire transfer
instructions provided by Lender or (b) by pre-authorized debit from Borrower’s
operating account on each Payment Date through an automated clearing house
electronic funds transfer. Each payment made hereunder (other than pursuant to
(b) above) shall be made in immediately available funds and must reference the
Loan Number. If any payment of principal or interest on this Note is due on a
day other than a Business Day (as hereinafter defined), such payment shall be
made on the next succeeding Business Day. Any payment on this Note received
after 2:00 o’clock p.m. local time at the place then designated as the place for
receipt of payments hereunder shall be deemed to have been made on the next
succeeding Business Day. All amounts due under this Note shall be payable
without set off, counterclaim, or any other deduction whatsoever. All payments
from Borrower to Lender during the continuance of an Event of Default shall be
applied in such order and manner as Lender elects in reduction of costs,
expenses, charges, disbursements and fees payable by Borrower hereunder or under
any other Loan Document, in reduction of interest due on the Outstanding
Principal Balance, or in reduction of the Outstanding Principal Balance. Lender
may, without notice to Borrower or any other person, accept one or more partial
payments of any sums due or past due hereunder from time to time while an Event
of Default exists hereunder, after Lender accelerates the indebtedness evidenced
hereby, or after Lender commences enforcement of its remedies under any Loan
Document or applicable law, without thereby waiving any Event of Default,
rescinding any acceleration, or waiving, delaying, or forbearing in the pursuit
of any remedies under the Loan Documents. Lender may endorse and deposit any
check or other instrument tendered in connection with such a partial payment
without thereby giving effect to or being bound by any language purporting to
make acceptance of such instrument an accord and satisfaction of the
indebtedness evidenced hereby. As used herein, the term “Business Day” shall
mean a day upon which commercial banks are not authorized or required by law to
close in the city designated from time to time as the place for receipt of
payments hereunder.

 

6.       Late Charge. If any sum payable under this Note or any other Loan
Document (other than any payment of principal due on the Maturity Date or upon
acceleration of the Loan) is not received by Lender by close of business on the
date on which it was due, Borrower shall pay to Lender an amount (the “Late
Charge”) equal to the lesser of (a) four percent (4%) of the full amount of such
sum or (b) the maximum amount permitted by applicable law in order to help
defray the expenses incurred by Lender in handling and processing such
delinquent payment and to compensate Lender for the loss of the use of such
delinquent payment. Any such Late Charge shall be secured by the Security
Instrument and other Loan Documents. The collection of any Late Charge shall be
in addition to, and shall not constitute a waiver of or limitation of, a default
or Event of Default hereunder or a waiver of or limitation of any other rights
or remedies that Lender may be entitled to under any Loan Document or applicable
law.

 

7.       Default Rate. Upon the occurrence of an Event of Default (including the
failure of Borrower to make full payment on the Maturity Date), Lender shall be
entitled to receive and Borrower shall pay interest on the Outstanding Principal
Balance at the rate of four percent (4%) per annum above the Interest Rate
(“Default Rate”) but in no event greater than the Maximum Legal Rate (as
hereinafter defined). Interest shall accrue and be payable at the Default Rate
from the occurrence of an Event of Default until all Events of Default have been
waived in writing by Lender in its discretion. Such accrued interest shall be
added to the Outstanding Principal Balance, and interest shall accrue thereon at
the Default Rate until fully paid. Such accrued interest shall be secured by the
Security Instrument and other Loan Documents. Borrower agrees that Lender’s
right to collect interest at the Default Rate is given for the purpose of
compensating Lender at reasonable amounts for Lender’s added costs and expenses
that occur as a result of Borrower’s default and that are difficult to predict
in amount, such as increased general overhead, concentration of management
resources on problem loans, and increased cost of funds. Lender and Borrower
agree that Lender’s collection of interest at the Default Rate is not a fine or
penalty, but is intended to be and shall be deemed to be reasonable compensation
to Lender for increased costs and expenses that Lender will incur if there
occurs an Event of Default hereunder. Collection of interest at the Default Rate
shall not be construed as an agreement or privilege to extend the Maturity Date
or to limit or impair any rights and remedies of Lender under any Loan
Documents. If judgment is entered on this Note, interest shall continue to
accrue post-judgment at the greater of (a) the Default Rate or (b) the
applicable statutory judgment rate. As used herein, the term “Maximum Legal
Rate” shall mean the maximum nonusurious interest rate, if any, that at any time
or from time to time may be contracted for, taken, reserved, charged or received
on the indebtedness evidenced by the Note and as provided for herein or the
other Loan Documents, under the laws of such state or states whose laws are held
by any court of competent jurisdiction to govern the interest rate provisions of
the Loan.

 

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8.       Intentionally Omitted.

 

9.       Prepayment.

 

(a)     When Permitted. Except as set forth in this Section 9 and in the other
Loan Documents, Borrower shall not have the right to prepay all or any portion
of the Debt at any time during the term of this Note. Notwithstanding the
foregoing, except during any period of time for which the Table indicates that
prepayment is prohibited, Borrower may prepay the Outstanding Principal Balance
in whole but, other than in connection with a Partial Release or a DSCR Cure –
Partial Prepayment, not in part if: (i) intentionally omitted; (ii) the notice
of prepayment required hereby is timely received by Lender; and (iii) Borrower
tenders with such prepayment (A) any applicable Prepayment Consideration, (B)
interest accrued and unpaid on the amount being prepaid through and including
the Prepayment Date (as hereinafter defined), (C) unless such prepayment is
tendered on a Payment Date, an amount equal to the interest that would have
accrued on the amount being prepaid for the full Accrual Period had the
prepayment not been made, and (D) all other sums then due and payable under any
of the Loan Documents.

 

(b)     Notice. Borrower shall give written notice to Lender specifying the date
on which prepayment shall be made (the “Prepayment Date”). Lender must receive
this notice not more than sixty (60) days and not less than (30) days prior to
the Prepayment Date. If any such notice of prepayment is given, the entire Debt,
including any applicable Prepayment Consideration, shall be due and payable on
the Prepayment Date, unless an event shall occur outside of Borrower’s control
that prevents repayment of the entire Debt or Borrower withdraws any notice of
prepayment given pursuant to this Section 9(b) in writing at least one (1)
Business Day prior to the Prepayment Date and Borrower pays all reasonable
out-of-pocket costs incurred by Lender in connection with such anticipated
prepayment. If such an event outside of Borrower’s control that prevents
repayment shall occur as reasonably determined by Lender or Borrower withdraws
any notice of prepayment as provided above, the Note, Loan Agreement, Security
Instrument and other Loan Documents shall continue in full force and effect as
if the notice of prepayment had not been given.

 

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(c)     Prepayment Consideration. Subject to the other provisions of the Loan
Documents, including, without limitation, Section 5.3 of the Security
Instrument, Lender shall not be obligated to accept any prepayment of the
principal balance that is otherwise allowed under this Note unless it is
accompanied by Prepayment Consideration as set forth in and computed in
accordance with the Table and Section 9(d) hereof. In addition to Prepayment
Consideration, Borrower shall pay all out-of-pocket hedging and breakage costs
of any kind and in any amount incurred by Lender due to any prepayment
(including a Default Prepayment). Borrower acknowledges and recognizes that: (i)
Lender has made the Loan to Borrower in reliance on, and the Loan has been
originated for the purpose of selling the Loan in the secondary market to
investors who will purchase the Loan or a direct or indirect interest therein in
reliance on, the actual receipt over time of the stream of payments of principal
and interest agreed to by Borrower herein; and (ii) Lender or any subsequent
investor in the Loan may incur additional costs and expenses in the event of a
prepayment of the Loan; and (iii) the Prepayment Consideration is a bargained
for consideration and not a penalty and the terms of the Loan are in various
respects more favorable to Borrower than they would have been absent Borrower’s
agreement to pay Prepayment Consideration as provided herein. Borrower agrees
that Lender shall not, as a condition to receiving the Prepayment Consideration,
be obligated to actually reinvest the amount prepaid in any treasury obligation
or in any other manner whatsoever. If Prepayment Consideration is due hereunder,
Lender shall deliver to Borrower a statement setting forth the amount and
determination of the Prepayment Consideration, and, provided that Lender shall
have in good faith applied the formula described below, Borrower shall not have
the right to challenge the calculation or the method of calculation set forth in
any such statement in the absence of manifest error, which calculation may be
made by Lender on any day during the thirty (30) day period preceding the date
of such prepayment.

 

(d)     Yield Maintenance Amount. The “Yield Maintenance Amount” (as the term is
used in the Table and elsewhere in this Note) shall mean the present value, as
of the Prepayment Date, of the remaining scheduled payments of principal and
interest from the Prepayment Date through the Permitted Par Prepayment Date
(including any balloon payment) determined by discounting such payments at the
Discount Rate (hereinafter defined), less the amount of principal being prepaid.
The term “Discount Rate” shall mean the rate that, when compounded monthly, is
equivalent to the Treasury Rate (hereinafter defined) when compounded
semi-annually. The term “Treasury Rate” shall mean the yield calculated by the
linear interpolation of the yields, as reported in Federal Reserve Statistical
Release H.15-Selected Interest Rates under the heading U.S. Government
Securities/Treasury Constant Maturities for the week ending prior to the
Prepayment Date, of U.S. Treasury constant maturities with maturity dates (one
longer and one shorter) most nearly approximating the Permitted Par Prepayment
Date. (If Release H.15 is no longer published, Lender shall select a comparable
publication to determine the Treasury Rate.)

 

(e)     Mandatory Prepayments. On the next occurring Payment Date following the
date on which Lender actually receives any Net Proceeds (as defined in the Loan
Agreement), if Lender is not obligated to make such Net Proceeds available to
Borrower for the Restoration (as defined in the Loan Agreement) of the Property
or any part thereof or otherwise remit such Net Proceeds to Borrower pursuant to
Section 6.4 of the Loan Agreement, Borrower authorizes Lender, at Lender’s
option, to apply Net Proceeds as a prepayment of all or a portion of the
outstanding principal balance of the Loan together with accrued interest on the
portion of the principal balance of the Loan prepaid and any other sums due
hereunder in an amount equal to one hundred percent (100%) of such Net Proceeds;
provided, however, if an Event of Default has occurred and is continuing, Lender
may apply such Net Proceeds to the Debt (until paid in full) in any order or
priority in its discretion. Other than during the continuance of an Event of
Default, no Prepayment Consideration or other premium shall be due in connection
with any prepayment made pursuant to this Section 9(e).

 

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(f)     Default Prepayment. If a Default Prepayment (as hereinafter defined)
occurs, such Default Prepayment shall be deemed to be a voluntary prepayment
under this Note and in such case the applicable Prepayment Consideration shall
be due and payable to Lender in connection with such Default Prepayment (unless
Lender voluntarily and expressly waives in writing the right to collect such
Prepayment Consideration), provided, further, that if no applicable Prepayment
Consideration is specified in the Table, other than during the Open Prepayment
Period, the Yield Maintenance Amount shall be due and payable to Lender in
connection with such Default Prepayment. The term “Default Prepayment” shall
mean a prepayment of any portion of the principal amount of this Note made after
occurrence of an Event of Default under any circumstances including a prepayment
in connection with (i) reinstatement of the Security Instrument provided by
statute under foreclosure proceedings or exercise of power of sale, (ii) any
statutory right of redemption exercised by Borrower or any other party having a
statutory right to redeem or prevent foreclosure or power of sale, (iii) any
sale in foreclosure or under exercise of a power of sale or otherwise (including
pursuant to a credit bid made by Lender in connection with such sale), (iv) any
other collection action by Lender, or (v) exercise by any governmental authority
of any civil or criminal forfeiture action with respect to any of the collateral
for the Loan. Prepayment Consideration shall be due and payable upon
acceleration of the Loan in accordance with the terms of this Note, and the
Prepayment Date, for the purpose of computing the applicable Prepayment
Consideration for a Default Prepayment, shall be the date of acceleration
(automatic or otherwise) of the Debt in accordance with the terms of this Note.
Exchange of this Note for a different instrument or modification of the terms of
this Note, including classification and treatment of Lender’s claim (other than
non-impairment under Section 1124 of the Bankruptcy Code or any successor
provision) pursuant to a plan of reorganization in bankruptcy shall also be
deemed to be a Default Prepayment hereunder. The Prepayment Consideration shall
be secured by all security and collateral for the Loan and shall, after it
becomes due and payable, be treated as if it were added to the Outstanding
Principal Balance for all purposes including accrual of interest, judgment on
the Note, and foreclosure (whether through power of sale, judicial proceeding or
otherwise) (“Foreclosure Sale”), redemption, and bankruptcy (including pursuant
to Section 506 of the United States Bankruptcy Code or any successor provision);
without limiting the generality of the foregoing, it is understood and agreed
that the Prepayment Consideration may be added to Lender’s bid at any
Foreclosure Sale.

 

(g)     DSCR Cure – Partial Prepayment. Notwithstanding the prohibition on
partial prepayments set forth herein, it is agreed that except during any period
of time for which the Table indicates that prepayment is prohibited, Borrower
may prepay a portion and not the whole of the Outstanding Principal Balance in
connection with Borrower’s completion of a DSCR Cure – Partial Prepayment
provided that Borrower otherwise satisfies all of the conditions set forth in
this Section 9 with respect to a full prepayment, including, without limitation
(i) no Event of Default then existing; (ii) the notice of prepayment required
above being timely received by Lender; and (iii) Borrower tendering with such
prepayment (A) any applicable Prepayment Consideration, including, to the extent
applicable, a Yield Maintenance Amount calculated based upon the portion of the
principal of the Loan being prepaid, (B) interest accrued and unpaid on the
amount being prepaid through and including the Prepayment Date, (C) unless such
prepayment is tendered on a Payment Date, an amount equal to the interest that
would have accrued on the amount being prepaid for the full Accrual Period had
the prepayment not been made, and (D) all other sums then due and payable under
any of the Loan Documents. Borrower agrees that any amounts received by Lender
in connection with such a partial prepayment shall be applied pro rata to reduce
the respective Outstanding Principal Balances of all Notes evidencing the Loan.

 

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(h)     Partial Prepayment in Connection with a Partial Release. Notwithstanding
the prohibition on partial prepayments set forth herein, it is agreed that
except during any period of time for which the Table indicates that prepayment
is prohibited, Borrower may prepay a portion and not the whole of the
Outstanding Principal Balance in connection with Borrower’s completion of a
Partial Release in accordance with Section 2.6.2 of the Loan Agreement provided
that Borrower otherwise satisfies the requirements of such Section 2.6.2 of the
Loan Agreement and also satisfies all of the conditions set forth in this
Section 9 with respect to a full prepayment, including, without limitation (i)
no Event of Default then existing other than an Event of Default relating to the
Individual Property which is subject of the Partial Release; (ii) the notice of
prepayment required above being timely received by Lender; and (iii) Borrower
tendering with such prepayment (A) any applicable Prepayment Consideration,
including, to the extent applicable, a Yield Maintenance Amount calculated based
upon the portion of the principal of the Loan being prepaid, (B) interest
accrued and unpaid on the amount being prepaid through and including the
Prepayment Date, (C) unless such prepayment is tendered on a Payment Date, an
amount equal to the interest that would have accrued on the amount being prepaid
for the full Accrual Period had the prepayment not been made, and (D) all other
sums then due and payable under any of the Loan Documents. Except to the extent
specifically provided in the Loan Agreement, Borrower agrees that any amounts
received by Lender in connection with such a partial prepayment shall be applied
pro rata to reduce the respective Outstanding Principal Balances of all Notes
evidencing the Loan.

 

Nothing contained herein shall be deemed to be a waiver by Lender of any right
it may have to require specific performance of any obligation of Borrower
hereunder including to make payments hereunder strictly according to the terms
hereof and the Loan Agreement.

 

10.     Maximum Rate Permitted by Law. All agreements in this Note and all other
Loan Documents are expressly limited so that in no contingency or event
whatsoever, whether by reason of acceleration of maturity of the indebtedness
evidenced hereby or otherwise, shall the amount agreed to be paid hereunder for
the use, forbearance, or detention of money exceed the Maximum Legal Rate. If,
from any circumstance whatsoever, fulfillment of any provision of this Note or
any other Loan Document at the time performance of such provision shall be due
shall involve exceeding the Maximum Legal Rate, then, ipso facto, the
obligations to be fulfilled shall be reduced to allow compliance with the
Maximum Legal Rate, and if, from any circumstance whatsoever, Lender shall ever
receive as interest an amount that would exceed the Maximum Legal Rate, the
receipt of such excess shall be deemed a mistake and shall be canceled
automatically or, if theretofore paid, such excess shall be credited against the
principal amount of the indebtedness evidenced hereby to which the same may
lawfully be credited, and any portion of such excess not capable of being so
credited shall be refunded immediately to Borrower.

 

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11.     Events of Default; Acceleration of Amount Due. Lender may in its
discretion, without notice to Borrower, declare the entire Debt, including the
Outstanding Principal Balance, all accrued interest, all costs, expenses,
charges and fees payable under any Loan Document, and any Prepayment
Consideration immediately due and payable, and Lender shall have all remedies
available to it at law or equity for collection of the amounts due, if any Event
of Default occurs.

 

12.     Time of Essence. Time is of the essence with regard to each provision
contained in this Note.

 

13.     Transfer and Assignment. This Note may be freely transferred and
assigned by Lender. Borrower’s right to transfer its rights and obligations with
respect to the Debt, and to be released from liability under this Note, shall be
governed by the Loan Agreement.

 

14.     Authority of Persons Executing Note. Borrower warrants and represents
that the persons or officers who are executing this Note and the other Loan
Documents on behalf of Borrower have full right, power and authority to do so,
and that this Note and the other Loan Documents constitute valid and binding
documents, enforceable against Borrower in accordance with their terms, and that
no other person, entity, or party is required to sign, approve, or consent to,
this Note.

 

15.     Severability. The terms of this Note are severable, and should any
provision be declared by a court of competent jurisdiction to be invalid or
unenforceable, the remaining provisions shall, at the option of Lender, remain
in full force and effect and shall in no way be impaired.

 

16.     Borrower’s Waivers. Borrower and all others liable hereon hereby waive
presentation for payment, demand, notice of dishonor, protest, and notice of
protest, notice of intent to accelerate, and notice of acceleration, stay of
execution and all other suretyship defenses to payment generally. No release of
any security held for the payment of this Note, or extension of any time periods
for any payments due hereunder, or release of collateral that may be granted by
Lender from time to time, and no alteration, amendment or waiver of any
provision of this Note or of any of the other Loan Documents, shall modify,
waive, extend, change, discharge, terminate or affect the liability of Borrower
and any others that may at any time be liable for the payment of this Note or
the performance of any covenants contained in any of the Loan Documents.

 

17.     Governing Law. The governing law and related provisions set forth in
Section 10.3 of the Loan Agreement are hereby incorporated by reference as if
fully set forth herein and shall be deemed fully applicable to Borrower
hereunder.

 

18.     Intentionally Omitted.

 

19.     Notices. All notices or other communications required or permitted to be
given pursuant hereto shall be given in the manner specified in the Loan
Agreement directed to the parties at their respective addresses as provided
therein.

 

20.     Avoidance of Debt Payments. To the extent that any payment to Lender or
any payment or proceeds of any collateral received by Lender in reduction of the
Debt is subsequently invalidated, declared to be fraudulent or preferential, set
aside or required to be repaid to a trustee, to Borrower (or Borrower’s
successor) as a debtor in possession, or to a receiver, creditor, or any other
party under any bankruptcy law, state or federal law, common law or equitable
cause, then the portion of the Debt intended to have been satisfied by such
payment or proceeds shall remain due and payable hereunder, be evidenced by this
Note, and shall continue in full force and effect as if such payment or proceeds
had never been received by Lender whether or not this Note has been marked
“paid” or otherwise cancelled or satisfied or has been delivered to Borrower,
and in such event Borrower shall be immediately obligated to return the original
Note to Lender and any marking of “paid” or other similar marking shall be of no
force and effect.

 

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21.     Exculpation. It is expressly agreed that recourse against Borrower for
failure to perform and observe its obligations contained in this Note shall be
limited as and to the extent provided in Section 9.3 of the Loan Agreement.

 

22.     Miscellaneous. Neither this Note nor any of the terms hereof, including
the provisions of this Section, may be terminated, amended, supplemented, waived
or modified orally, but only by an instrument in writing executed by the party
against which enforcement of the termination, amendment, supplement, waiver or
modification is sought, and the parties hereby: (a) expressly agree that it
shall not be reasonable for any of them to rely on any alleged, non-written
amendment to this Note; (b) irrevocably waive any and all right to enforce any
alleged, non-written amendment to this Note; and (c) expressly agree that it
shall be beyond the scope of authority (apparent or otherwise) for any of their
respective agents to agree to any non-written modification of this Note. This
Note may be executed in several counterparts, each of which counterpart shall be
deemed an original instrument and all of which together shall constitute a
single Note. The failure of any party hereto to execute this Note, or any
counterpart hereof, shall not relieve the other signatories from their
obligations hereunder. If Borrower consists of more than one person or entity,
then the obligations and liabilities of each person or entity shall be joint and
several and in such case, the term “Borrower” shall mean individually and
collectively, jointly and severally, each Borrower. As used in this Note, (i) 
the words “Lender” and “Borrower” shall include their respective successors
(including, in the case of Borrower, any subsequent owner or owners of the
Property or any part thereof or any interest therein and Borrower in its
capacity as debtor-in-possession after the commencement of any bankruptcy
proceeding), assigns, heirs, personal representatives, executors and
administrators, and (ii) in the computation of periods of time from a specified
date to a later date, the word “from and including” and the words “to” and
“until” each means “to but excluding.” In the event of a conflict between or
among the terms, covenants, conditions or provisions of the Loan Documents, the
term(s), covenant(s), condition(s) or provision(s) that Lender may elect to
enforce from time to time so as to enlarge the interest of Lender in its
security, afford Lender the maximum financial benefits or security for the Debt,
or provide Lender the maximum assurance of payment of the Debt in full shall
control. In the event of an inconsistency between the terms of this Note and the
terms of the Loan Agreement, the terms of the Loan Agreement shall control.
BORROWER ACKNOWLEDGES AND AGREES THAT IT HAS BEEN PROVIDED WITH SUFFICIENT AND
NECESSARY TIME AND OPPORTUNITY TO REVIEW THE TERMS OF THIS NOTE, THE SECURITY
INSTRUMENT, AND EACH OF THE LOAN DOCUMENTS, WITH ANY AND ALL COUNSEL IT DEEMS
APPROPRIATE, AND THAT NO INFERENCE IN FAVOR OF, OR AGAINST, LENDER OR BORROWER
SHALL BE DRAWN FROM THE FACT THAT EITHER SUCH PARTY HAS DRAFTED ANY PORTION
HEREOF, OR THE SECURITY INSTRUMENT, OR ANY OF THE LOAN DOCUMENTS. Section 1.2 of
the Loan Agreement is specifically incorporated herein as if fully restated
herein.

 

9

 

 

23.     Waiver of Counterclaim and Jury Trial. BORROWER HEREBY KNOWINGLY WAIVES
THE RIGHT TO ASSERT ANY COUNTERCLAIM, OTHER THAN A COMPULSORY COUNTERCLAIM, IN
ANY ACTION OR PROCEEDING BROUGHT AGAINST BORROWER BY LENDER OR ITS AGENTS.
ADDITIONALLY, TO THE FULLEST EXTENT NOW OR HEREAFTER PERMITTED BY APPLICABLE
LAW, BORROWER AND LENDER HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE
ANY RIGHT THEY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED ON
THE LOAN OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH THE LOAN, THIS NOTE,
THE SECURITY INSTRUMENT, OR ANY OTHER LOAN DOCUMENT, OR ANY COURSE OF CONDUCT,
COURSE OF DEALING, STATEMENT (WHETHER VERBAL OR WRITTEN), OR ACTION OF BORROWER
OR LENDER. THIS PROVISION IS A MATERIAL INDUCEMENT FOR LENDER’S MAKING OF THE
LOAN.

 

24.     Joint and Several.

 

(a)     The parties executing this Note as “Borrower” acknowledge and agree that
such parties shall be referred to in this Note individually, collectively, and
interchangeably as “Borrower”. Unless specifically stated to the contrary, the
term “Borrower” as used in this Note, including, without limitation, with
respect to all representations, warranties and covenants, shall include all
parties comprising Borrower.

 

(b)     Each party comprising Borrower agrees that it is jointly and severally
liable for the prompt payment and performance of, all obligations under this
Note and all agreements under the Loan Documents (collectively, the
“Obligations”). Each party comprising Borrower waives all rights and defenses
arising out of an election of remedies by Lender, even though that election of
remedies, such as a nonjudicial foreclosure with respect to security for an
obligation, has destroyed such party’s rights of subrogation and reimbursement
against any other Borrower by operation of Section 580d of the California Code
of Civil Procedure or otherwise. To the extent permitted by applicable law, each
party comprising Borrower further waives any right to a fair value hearing under
California Code of Civil Procedure Section 580a, or any other similar law, to
determine the size of any deficiency owing (for which such party comprising
Borrower would be liable hereunder) following a non-judicial foreclosure sale.
Without limiting the foregoing or anything else contained in this Agreement,
each party comprising Borrower waives all rights and defenses that such party
may have because the Loan is secured by real property. This means, among other
things:

 

(1)     that Lender may collect from such party without first foreclosing on any
real or personal property collateral pledged by any other Borrower; and

 

(2)     if Lender forecloses on any real property collateral pledged by any
other Borrower: (x) the amount of the Loan may be reduced only by the price for
which that collateral is sold at the foreclosure sale, even if the collateral is
worth more than the sale price; and  (y) Lender may collect from such party even
if Lender, by foreclosing on the real property collateral, has destroyed any
right such party may have to collect from any other Borrower.

 

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This paragraph is an unconditional and irrevocable waiver of any rights and
defenses that each party comprising Borrower may have because the Loan is
secured by real property. These rights and defenses include, but are not limited
to, any rights or defenses based upon Sections 580a, 580b, 580d, or 726 of the
California Code of Civil Procedure.

 

(c)     Each party comprising Borrower hereby agrees that it will not enforce
any of its rights of contribution or subrogation against any other party
comprising Borrower with respect to any liability incurred by it hereunder or
under any of the other Loan Documents, any payments made by it to Lender with
respect to any of the Obligations or any collateral security until such time as
all of the Obligations have been paid in full. Any claim which any party
comprising Borrower may have against any other party comprising Borrower with
respect to any payments to Lender are hereby expressly made subordinate and
junior in right of payment, including, without limitation as to any increases in
the Obligations arising under this Note, to the prior payment in full in cash of
the Obligations and, in the event of any insolvency, bankruptcy, receivership,
liquidation, reorganization or other similar proceeding under the laws of any
jurisdiction relating to any party comprising Borrower, its debts or its assets,
whether voluntary or involuntary, all such Obligations shall be paid in full in
cash before any payment or distribution of any character, whether in cash,
securities or other property, shall be made to any other Borrower.

 

(d)     Nothing contained in this Section shall limit the liability of any party
comprising Borrower to pay extensions of credit made directly or indirectly to
such party, Obligations relating to Letters of Credit issued to support such
party’s business, and all accrued interest, fees, expenses and other related
Obligations with respect thereto, for which such party shall be primarily liable
for all purposes hereunder.

 

25.     Local Law Provisions. In the event of any inconsistencies between the
terms and conditions of this Section and any other terms and conditions of this
Note, the terms and conditions of this Section shall be binding.

 

25.1   Pennsylvania Law Provisions. The following provisions shall apply to this
Note to the extent that Pennsylvania law is deemed to govern this Note,
otherwise, the following shall be null and void.

 

(a) NONE.

 

25.2   Texas Law Provisions. The following provisions shall apply to this Note
to the extent that Texas law is deemed to govern this Note, otherwise, the
following shall be null and void.

 

11

 

 

(a) Maximum Rate Permitted by Law. It is expressly stipulated and agreed to be
the intent of Borrower and Lender at all times to comply strictly with the
applicable Texas law, or federal law (if applicable), governing the maximum rate
or amount of interest payable on the indebtedness evidenced by this Note and the
Loan Documents. All agreements in this Note and all other Loan Documents,
whether now existing or hereafter arising and whether written or oral are
expressly limited so that in no contingency or event whatsoever, whether by
reason of acceleration of maturity of the indebtedness evidenced hereby,
prepayment, or otherwise, shall the amount agreed to be paid hereunder for the
use, forbearance, or detention of money exceed the Maximum Legal Rate. To the
extent Chapter 303 of the Texas Finance Code and its successor statutes and
amendments, as then in effect (collectively, the “Statute”), are applicable, the
“weekly ceiling” specified in the Statute, as selected by Lender, is the
applicable ceiling. Lender may, in accordance with and to the extent permitted
by applicable law, at its option and from time to time revise its election of
the applicable “rate ceiling” as to current and future balances outstanding, and
may use the “quarterly ceiling” or the “monthly ceiling” from time to time in
effect, as such terms are defined in the Statute, or any other legally available
“ceilings” as the Maximum Legal Rate under Texas or other applicable law. If the
Maximum Legal Rate as determined under any applicable federal law shall at any
time exceed the maximum rate of interest as determined under applicable Texas
law, then to the extent permitted by law, the applicable federal rate shall be
deemed controlling for purposes of determining the Maximum Amount during such
period of time. In no event shall the provisions of Chapter 346 of the Texas
Finance Code (which regulate certain revolving credit loan accounts and
revolving triparty accounts) apply to the indebtedness evidenced hereby. This
Section 10 will control all agreements between Borrower and Lender. If, from any
circumstance whatsoever (including the receipt of any late charge or similar
amount), fulfillment of any provision of this Note or any other Loan Document at
the time performance of such provision shall be due shall involve exceeding any
usury limit prescribed by law that a court of competent jurisdiction may deem
applicable hereto, then, ipso facto, the obligations to be fulfilled shall be
reduced to allow compliance with such limit, and if, from any circumstance
whatsoever, Lender shall ever receive anything of value deemed interest in an
amount that would exceed the highest lawful rate, the receipt of such excess
shall be deemed a mistake and shall be canceled automatically or, if theretofore
paid, such excess shall be credited against the principal amount of the
indebtedness evidenced hereby to which the same may lawfully be credited, and
any portion of such excess not capable of being so credited shall be refunded
immediately to Borrower. Borrower hereby agrees that, as a condition precedent
to any claim seeking usury penalties against Lender, Borrower will provide
written notice to Lender, advising Lender in reasonable detail of the nature and
amount of the violation, and Lender shall have sixty (60) days after receipt of
such notice in which to correct such usury violation, if any, by either
refunding such excess interest to Borrower or crediting such excess interest
against this Note and/or the indebtedness evidenced hereby or in the Loan
Documents then owing by Borrower to Lender. All interest contracted for,
charged, taken, reserved, paid or agreed to be paid to Lender shall, to the
extent permitted by applicable law, be amortized, prorated, allocated and spread
throughout the full term of this Note, including any extensions and renewals
hereof until payment in full of the principal balance of this Note so that the
interest thereon for such full term will not exceed at any time the Maximum
Legal Rate.

 

(b) Waiver of Consumer Rights. TO THE EXTENT NOW OR HEREAFTER APPLICABLE,
BORROWER HEREBY WAIVES BORROWER’S RIGHTS UNDER THE DECEPTIVE TRADE PRACTICES -
CONSUMER PROTECTION ACT, SECTION 17.41 ET SEQ., BUSINESS & COMMERCE CODE, A LAW
THAT GIVES CONSUMERS SPECIAL RIGHTS AND PROTECTIONS. AFTER CONSULTATION WITH AN
ATTORNEY OF BORROWER’S OWN SELECTION, BORROWER VOLUNTARILY CONSENTS TO THIS
WAIVER.

 

12

 

 

25.3   Wyoming Law Provisions. The following provisions shall apply to this Note
to the extent that Wyoming law is deemed to govern this Note, otherwise, the
following shall be null and void.

 

(a) NONE.

 

25.4   Indiana Law Provisions. The following provisions shall apply to this Note
to the extent that Indiana law is deemed to govern this Note, otherwise, the
following shall be null and void.

 

(a) All payments shall be made without relief from valuation and appraisement
laws.

 

(b) Borrower and Lender agree that the Default Rate is a reasonable and fair
estimate of the losses that would be suffered by Lender in the Event of a
Default although such losses difficult to predict in amount.

 

25.5   Intentionally Omitted.

 

25.6   Georgia Law Provisions. The following provisions shall apply to this Note
to the extent that Georgia law is deemed to govern this Note, otherwise, the
following shall be null and void.

 

(a) This Note is made under Seal.

 

25.7   Michigan Law Provisions. The following provisions shall apply to this
Note to the extent that Michigan law is deemed to govern this Note, otherwise,
the following shall be null and void.

 

(a) NONE.

 

25.8   Ohio Law Provisions. The following provisions shall apply to this Note to
the extent that Ohio law is deemed to govern this Note, otherwise, the following
shall be null and void.

 

(a) NONE.

 

25.9   Louisiana Law Provisions. The following provisions shall apply to this
Note to the extent that Louisiana law is deemed to govern this Note, otherwise,
the following shall be null and void.

 

(a) NONE.

 

25.10  Alabama Law Provisions. The following provisions shall apply to this Note
to the extent that Alabama law is deemed to govern this Note, otherwise, the
following shall be null and void.

 

(a) NONE.

 

13

 

 

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14

 

 

25.11  California Law Provisions. The following provisions shall apply to this
Note to the extent that California law is deemed to govern this Note, otherwise,
the following shall be null and void.

 

(a)     Waiver of Counterclaim and Jury Trial BORROWER HEREBY KNOWINGLY WAIVES
THE RIGHT TO ASSERT ANY COUNTERCLAIM, OTHER THAN A COMPULSORY COUNTERCLAIM, IN
ANY ACTION OR PROCEEDING BROUGHT AGAINST BORROWER BY LENDER OR ITS AGENTS. TO
THE EXTENT PERMITTED BY APPLICABLE LAW, BORROWER HEREBY AGREES NOT TO ELECT A
TRIAL BY JURY OF ANY ISSUE TRIABLE OF RIGHT BY JURY, AND WAIVES ANY RIGHT TO
TRIAL BY JURY FULLY TO THE EXTENT THAT ANY SUCH RIGHT SHALL NOW OR HEREAFTER
EXIST WITH REGARD TO THE LOAN DOCUMENTS, OR ANY CLAIM, COUNTERCLAIM OR OTHER
ACTION ARISING IN CONNECTION THEREWITH. THIS WAIVER OF RIGHT TO TRIAL BY JURY IS
GIVEN KNOWINGLY AND VOLUNTARILY BY BORROWER, AND IS INTENDED TO ENCOMPASS
INDIVIDUALLY EACH INSTANCE AND EACH ISSUE AS TO WHICH THE RIGHT TO A TRIAL BY
JURY WOULD OTHERWISE ACCRUE. LENDER IS HEREBY AUTHORIZED TO FILE A COPY OF THIS
PARAGRAPH IN ANY PROCEEDING AS CONCLUSIVE EVIDENCE OF THIS WAIVER BY BORROWER.

 

  Borrower’s Initials

 

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Initial Page to Promissory Note A-[•]

 

 

 

NOTWITHSTANDING THE FOREGOING TO THE CONTRARY, IN THE EVENT THAT THE JURY TRIAL
WAIVER CONTAINED IN THIS NOTE IS HELD OR DEEMED TO BE UNENFORCEABLE, BORROWER
HEREBY EXPRESSLY AGREES TO SUBMIT TO JUDICIAL REFERENCE PURSUANT TO CALIFORNIA
CODE OF CIVIL PROCEDURE SECTIONS 638 THROUGH 645.1 ANY CLAIM, DEMAND, ACTION OR
CAUSE OF ACTION ARISING UNDER THIS NOTE FOR WHICH A JURY TRIAL WOULD OTHERWISE
BE APPLICABLE OR AVAILABLE. PURSUANT TO SUCH JUDICIAL REFERENCE, THE PARTIES TO
THIS NOTE AGREE TO THE APPOINTMENT OF A SINGLE REFEREE AND WILL USE THEIR BEST
EFFORTS TO AGREE ON THE SELECTION OF A REFEREE. IF THE PARTIES TO THIS NOTE ARE
UNABLE TO AGREE ON A SINGLE REFEREE, A REFEREE WILL BE APPOINTED BY THE COURT
UNDER CALIFORNIA CODE OF CIVIL PROCEDURE SECTIONS 638 AND 640 TO HEAR ANY
DISPUTES UNDER THIS NOTE IN LIEU OF ANY SUCH JURY TRIAL. BORROWER ACKNOWLEDGES
AND AGREES THAT THE APPOINTED REFEREE WILL HAVE THE POWER TO DECIDE ALL ISSUES
IN THE APPLICABLE ACTION OR PROCEEDING, WHETHER OF FACT OR LAW, AND WILL REPORT
A STATEMENT OF DECISION THEREON; PROVIDED, HOWEVER, THAT ANY MATTERS WHICH WOULD
NOT OTHERWISE BE THE SUBJECT OF A JURY TRIAL WILL BE UNAFFECTED BY THIS WAIVER.
BORROWER HEREBY AGREES THAT THE PROVISIONS CONTAINED IN THIS NOTE HAVE BEEN
FAIRLY NEGOTIATED ON AN ARMS-LENGTH BASIS, WITH BORROWER AGREEING TO THE SAME
KNOWINGLY AND BEING AFFORDED THE OPPORTUNITY TO HAVE ITS LEGAL COUNSEL CONSENT
TO THE MATTERS CONTAINED IN THIS NOTE.

 

(b)       Without in any way limiting the generality of any provision of this
Note, to the full extent permitted by law, each party comprising Borrower
irrevocably and unconditionally waives any rights and benefits which might
otherwise be available to Borrower under California Civil Code Sections 2787 to
2855, inclusive, 2899 and/or 3433, and/or any successor sections.

 

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Intending to be fully bound, Borrower has executed this Note effective as of the
day and year first above written.

 

  BORROWER:       ARG CMGLTWY001, LLC,   ARG SSFSRIN001, LLC,   ARG EQWBGPA001,
LLC,   ARG HCCLHGA001, LLC,   ARG UPDBNMI001, LLC,   ARG CDNCNOH001, LLC,   ARG
MT2PKSLB001, LLC,   ARG HRTFTGA001, LLC,   ARC FELKCLA001, LLC,   ARG
EHBIRAL001, LLC,   ARC ATSNTTX001, LLC and   ARC SLSTCCA001, LLC,   each a
Delaware limited liability company

 

  By:  

 

Signature Page to Promissory Note A-[•]