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"), and ARC3 ESBKYM0001, LLC, a Delaware limited liability company
("MO Borrower"; NH Borrower and MO Borrower, individually and/or collectively,
as the context may require, "Borrower"), each having an address at 405 Park
Avenue, 15th Floor, New York, New York 10022, hereby unconditionally promise to
pay to the order of WELLS FARGO BANK, NATIONAL ASSOCIATION, having an address at
Wells Fargo 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 holder hereof may from time to time designate in
writing, the principal sum of TWENTY FOUR MILLION 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, with interest thereon to be computed from
the date of this Note at the Interest Rate, and to be paid in accordance with
the terms of this Note and that certain Loan Agreement dated the date hereof
between 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 not defined 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 unpaid
principal sum of this Note from time to time outstanding at the rates and at the
times specified in Article 2 of the Loan Agreement and the outstanding balance
of the principal sum of this Note and 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 option
of 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
Security Instrument and the other Loan Documents are hereby made part of this
Note to the same extent and with the same force as if they were fully set forth
herein. In the event of a conflict or inconsistency between the terms of this
Note and the Loan Agreement, the terms and provisions of the Loan Agreement
shall govern.

 

 

 

 

ARTICLE 4: SAVINGS CLAUSE

 

Notwithstanding anything to the contrary, (a) all agreements and communications
between Borrower and Lender are hereby and shall automatically be limited so
that, after taking into 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 interest exceeds 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 of the Maximum Legal Rate, any such excess shall be
deemed to have been applied toward payment of the principal of any and all then
outstanding indebtedness of Borrower to Lender, or if 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 by an 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 to the Loan Documents. No release of
any security for the Debt or extension of time for payment of 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 the payment of all or any part of the Debt
under this Note, the Loan Agreement or the other Loan Documents. No notice to or
demand on Borrower shall be deemed to be a waiver of the obligation of Borrower
or of the right of Lender to take further action without further notice or
demand as provided for in this Note, the Loan Agreement or the other Loan
Documents. If Borrower is a partnership or limited liability company, the
agreements herein contained shall remain in force and be applicable,
notwithstanding any changes in the individuals comprising the partnership or
limited liability company, and the term "Borrower," as used herein, shall
include any alternate or successor partnership or limited liability company, but
any predecessor partnership or limited liability company and their partners or
members shall not thereby be released from any liability. If Borrower is a
corporation, the agreements contained herein shall remain in full force and be
applicable notwithstanding any changes in the shareholders comprising, or the
officers and directors relating to, the corporation, and the term "Borrower," as
used herein, shall include any alternative or successor corporation, but any
predecessor corporation shall not be relieved of liability hereunder. Nothing in
the foregoing sentence shall be construed as a consent to, or a waiver of, any
prohibition or restriction on transfers of interests in such partnership,
limited liability company or corporation, which may be set forth in the Loan
Agreement, 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 such
transfer, Lender may deliver all the collateral mortgaged, granted, pledged or
assigned pursuant to the Loan Documents, or any part thereof, to the transferee
who shall thereupon become vested with all the rights herein or under applicable
law given to Lender with respect thereto, and Lender shall thereafter forever be
relieved and fully discharged from any liability or responsibility in the
matter; but Lender shall retain all rights hereby given to it with respect to
any liabilities and the collateral not so transferred.

 

ARTICLE 8: EXCULPATION

 

The provisions of Article 13 of the Loan Agreement are hereby incorporated by
reference 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 NEW YORK, AND MADE BY BORROWER
AND ACCEPTED BY LENDER IN THE STATE OF NEW YORK, AND THE PROCEEDS OF THIS NOTE
WERE DISBURSED FROM THE STATE OF NEW YORK, WHICH STATE THE PARTIES AGREE HAS A
SUBSTANTIAL RELATIONSHIP TO THE PARTIES AND TO THE UNDERLYING TRANSACTION
EMBODIED HEREBY, AND IN ALL RESPECTS, INCLUDING, WITHOUT LIMITING THE GENERALITY
OF THE FOREGOING, MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE, THIS NOTE
AND THE OBLIGATIONS ARISING HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE
AND PERFORMED IN SUCH STATE (WITHOUT REGARD TO PRINCIPLES OF CONFLICT LAWS) AND
ANY APPLICABLE LAW OF THE UNITED STATES OF AMERICA. TO THE FULLEST EXTENT
PERMITTED BY LAW, BORROWER HEREBY UNCONDITIONALLY AND IRREVOCABLY WAIVES ANY
CLAIM TO ASSERT THAT THE LAW OF ANY OTHER JURISDICTION GOVERNS THIS NOTE AND
THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK PURSUANT TO SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS
LAW.

 

(B)    ANY LEGAL SUIT, ACTION OR PROCEEDING AGAINST LENDER OR BORROWER ARISING
OUT OF OR RELATING TO THIS NOTE MAY AT 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 BORROWER WAIVES ANY
OBJECTIONS WHICH IT MAY NOW OR HEREAFTER HAVE BASED 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, ACTION OR
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 BEHALF SERVICE OF ANY
AND ALL PROCESS WHICH MAY BE SERVED IN ANY SUCH SUIT, ACTION OR PROCEEDING IN
ANY FEDERAL OR STATE COURT IN NEW YORK, NEW YORK, AND AGREES THAT SERVICE OF
PROCESS UPON SAID AGENT AT SAID ADDRESS AND WRITTEN NOTICE OF SAID SERVICE
MAILED OR DELIVERED TO BORROWER IN THE MANNER PROVIDED HEREIN SHALL BE DEEMED IN
EVERY RESPECT EFFECTIVE SERVICE OF PROCESS UPON BORROWER IN ANY SUCH SUIT,
ACTION OR PROCEEDING IN THE STATE OF NEW YORK. BORROWER (I) SHALL GIVE PROMPT
NOTICE TO LENDER OF ANY CHANGED ADDRESS OF ITS AUTHORIZED AGENT HEREUNDER, (II)
MAY AT ANY TIME AND FROM TIME TO TIME DESIGNATE A SUBSTITUTE AUTHORIZED AGENT
WITH AN OFFICE IN NEW YORK, NEW YORK (WHICH SUBSTITUTE AGENT AND OFFICE SHALL BE
DESIGNATED AS THE PERSON AND ADDRESS FOR SERVICE OF PROCESS), AND (III) SHALL
PROMPTLY DESIGNATE SUCH A SUBSTITUTE IF ITS AUTHORIZED AGENT CEASES TO HAVE 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
the terms and conditions of this Article 11 and the terms and conditions of this
Note, the terms and conditions 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.

 

[NO FURTHER TEXT ON THIS PAGE]

 

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IN WITNESS WHEREOF, Borrower has duly executed this Promissory Note as of 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 limited liability company    
    By: /s/ William M. Kahane   Name: William M. Kahane   Title: President

 

Promissory Note — Signature Page