EXHIBIT 10.12

SECURED PROMISSORY NOTE

 

   $3,145,000   

Providence, Rhode Island

   December 21, 2006   

 

LOAN: FOR VALUE RECEIVED, Faith Realty, LLC, a Rhode Island limited liability
company (the ‘Borrower’), unconditionally promise to pay to Bank of America,
N.A., a national banking association (“Bank”), or order, at its offices at 111
Westminster Street, Providence, Rhode Island, or at such other place as may be
designated in writing by Bank, the principal sum of Three Million One Hundred
Forty-Five Thousand Dollars ($3,145,000), together with interest in arrears from
the date hereof on the unpaid principal balance hereunder, computed daily, at
the RATE per annum indicated below payable in accordance with the particular
PAYMENT SCHEDULE indicated below.

 

DEFINITIONS: “Alternate LIBOR Fixed Rate” shall mean a rate per annum equal to
the Alternate LIBOR Rate plus two and

  one-fourth percent (2.25%).

“Alternate LIBOR Rate” shall mean, as of any LIBOR Effective Date and for any
particular LIBOR Interest Period, a rate (rounded upward, if necessary, to the
nearest one-hundred thousandth of a percentage point) determined on the basis of
the rates for deposits in U.S. Dollars offered by the Reference Banks at
approximately 11:00 a.m., London time, on the date that is two London Banking
Days preceding the applicable LIBOR Effective Date (as hereinafter defined), for
a term equal to the LIBOR Interest Period commencing on that LIBOR Effective
Date and in an amount equal to the LIBOR Portion. The Bank will request the
principal London office of each of the Reference Banks to provide a quotation of
its

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U.S. Dollar deposit offered rate. If at least two such quotations are provided,
the rate as of that LIBOR Effective Date will be the arithmetic mean of the
quotations. If fewer than two quotations are provided as requested, the rate for
that date will be determined on the basis of the rates quoted by major banks in
New York City selected by the Bank at approximately 11:00 am., New York City
time, on the date that is two (2) London Banking days preceding the applicable
LIBOR Effective Date, for loans in U.S. Dollars to leading European banks for a
period equal to the LIBOR Interest Period commencing on that LIBOR Effective
Date and in an amount equal to the LIBOR Portion.

“Authorized Person” shall mean a person designated from time to time in writing
by Borrower.

“Banking Day” shall mean, in respect of any city, any day on which commercial
banks are open for business (including dealings in foreign exchange and foreign
currency deposits) in that city.

“Floating Rate” shall mean an annual rate of interest equal to the Prime Rate.

“Hedging Contracts” means interest rate swap agreements, interest rate cap
agreements and interest rate collar agreements, or any other agreements or
arrangements designed to protect the Borrower against fluctuations in interest
rates or currency exchange rates.

“Hedging Obligations” means, with respect to the Borrower, all liabilities of
the Borrower to the Bank under Hedging Contracts.

 

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“Legal Requirement” shall mean any requirement imposed upon the Bank by any law
of the United States of America or by any regulation, order, interpretation,
ruling or official directive (whether or not having the force of law) of the
Board of Governors of the Federal Reserve System, the Federal Deposit Insurance
Corporation, or any other board or governmental or administrative agency of the
United States of America, or any political subdivision of any thereof.

“LIBOR Fixed Rate” shall mean a rate per annum equal to the LIBOR Rate plus two
and one-fourth percent (2.25%).

“LIBOR Effective Date” means that date specified in a written notice from
Borrower to Bank given not less than two (2) London Banking Days prior to such
date, indicating Borrower’s election to pay interest hereunder based on a LIBOR
Fixed Rate commencing as of such date, subject to the terms and conditions
hereof.

“LIBOR Interest Period” shall mean the period beginning on a LIBOR Effective
Date and ending on (but excluding) the day which numerically corresponds to such
date one month thereafter (or, if such month has no numerically corresponding
day, on the last Business Day of such month), and, if the Borrower enters into a
Hedging Contract in respect of the indebtedness evidenced by this Note, then
during the term of such Hedging Contract, each period commencing on the last day
of the next preceding LIBOR Interest Period and ending one month thereafter,
provided, however, that

 

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(i) If the Borrower has incurred or hereafter incurs a Hedging Obligation in
respect of the indebtedness evidenced by this Note, such LIBOR Interest Period
shall be of the same duration as the relevant periods set under the applicable
Hedging Contracts;

(ii) if such LIBOR Interest Period would otherwise end on a day which is not a
Business Day, such LIBOR Interest Period shall end on the next following
Business Day unless such day falls in the next calendar month, in which case
such LIBOR Interest Period shall end on the first preceding Business Day.

“LIBOR Portion” shall mean, as of a LIBOR Effective Date, the then outstanding
principal balance of this Note.

“LIBOR Rate” means, in relation to a LIBOR Interest Period, the rate per annum
as determined on the basis of the offered rates for deposits in U.S. Dollars in
an amount equal (as nearly as may be) to the LIBOR Portion as of the LIBOR
Effective Date and for a period equal to such LIBOR Interest Period which the
British Bankers’ Association fixes as its LIBOR rate as of 11:00 a.m. London
time, on the date that is two London Banking Days preceding the LIBOR Effective
Date, as adjusted from time to time pursuant to paragraphs 1 and 2 of the TERMS
AND CONDITIONS below. If the British Bankers’ Association does not fix a LIBOR
rate on any applicable interest determination date, all references herein to the
LIBOR Rate and the LIBOR Fixed Rate shall mean the Alternate LIBOR Rate and the
Alternate LIBOR Fixed Rate, respectively (both as defined above). Each
determination by the Bank of any LIBOR Rate shall, in the absence of manifest
error, be conclusive.

 

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“Loan Agreement” means that certain Construction Loan Agreement between the
Borrower and the Bank dated as of even date.

“Maturity Date” shall mean June 21, 2017.

“Prime Rate” means the variable per annum rate of interest designated from time
to time by Bank as its Prime Rate, with such rate changing on the same day on
which any change in the Prime Rate is effective without notice or demand of any
kind. The Prime Rate is a reference rate and does not necessarily represent the
lowest or best rate being charged to any customer.

“Reference Banks” means four major banks in the London interbank market, as
selected by the Bank.

“Reserves” shall mean any reserve, reserve asset, capital reserve, minimum
capital requirement, special deposit, insurance premium or assessment required
by any Legal Requirement to be maintained or paid by the Bank for or with
respect to (a) any deposits purchased in the London interbank foreign currency
deposits market, (b) any deposit represented by a certificate of deposit issued
by the Bank, (c) loans made with the proceeds of any such deposits, or (d) the
principal amount of or interest on the LIBOR Portion hereunder bearing interest
at the LIBOR Rate, including any reserves imposed under Regulation D and any
amounts payable to the Federal Deposit Insurance Corporation (the “FDIC”) or any
successor thereto for insurance by the FDIC for time deposits made in dollars.

 

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“Tax” shall mean, in relation to the LIBOR Portion and applicable LIBOR Rate,
any tax, levy, impost, duty, deduction, withholding or other charges of whatever
nature required by any Legal Requirement (a) to be paid by the Bank or (b) to be
withheld or deducted from any payment otherwise required hereby to be made by
the Borrower to the Bank, provided that the term “Tax” shall not include any
taxes imposed upon the net income of the Bank by the United States of America,
the United Kingdom, Canada, the Bahamas or any political subdivision thereof.

“U.S. Dollars” means the lawful currency of the United States of America.

 

RATE: From the date hereof until payment in full of this Note, interest on the
unpaid principal balance shall be charged hereunder, and the Borrower promises
to pay such interest, at a rate per annum equal to the Floating Rate; provided,
however, so long as an Event of Default (as hereafter defined) shall not exist
and be continuing hereunder and subject to paragraphs 1, 2, and 3 of the
ADDITIONAL TERMS AND CONDITIONS below, and upon not less than two (2) Business
Days prior written notice, Borrower, at its sole option, may elect to change the
effective rate of interest hereunder to an annual rate calculated with reference
to the LIBOR Fixed Rate, subject to the following conditions:

 

  a. Borrower may request Bank for a quote as to a LIBOR Fixed Rate at any time
and from time to time.

 

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  b. Each such election shall be made by Borrower upon telephonic request from
an Authorized Person to make such election, and a subsequent telephonic
confirmation from an Authorized Person accepting the LIBOR Fixed Rate. The LIBOR
Fixed Rate selected and the commencement date (the LIBOR Effective Date) and the
final date of such LIBOR Interest Period therefor shall be promptly confirmed in
writing by Borrower to Bank.

 

  c. If Borrower intends to continue to accrue interest on the outstanding
principal balance hereunder based on a LIBOR Rate upon the expiration of a LIBOR
Interest Period which is the subject of an expiring election, Borrower shall
make a new election no later than 3:00 p.m. (Providence time) on the Banking Day
two (2) days prior to the last day of such expiring LIBOR Interest Period. If
Borrower fails to elect a LIBOR Fixed Rate on a timely basis, the interest rate
hereunder will convert on the last day of such LIBOR Interest Period to the
Floating Rate.

 

  d. If Borrower enters a Hedging Contract in respect of the indebtedness
evidenced by this Note, then, notwithstanding any other terms of this Note,
Borrower may not convert the rate of interest payable under this Note to a
Floating Rate during the term of such Hedging Contract, and upon the expiration
of each LIBOR Interest Period during the term of such Hedging Contract a new
LIBOR Interest Period shall commence effective as of the last day of the
expiring LIBOR Interest Period and end one month thereafter.

 

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Interest will be calculated on the basis of the actual number of days elapsed
over a year of 360 days. Whenever an Event of Default is in existence under this
Note, the rate of interest on the unpaid principal and interest shall, at the
option of Bank, be at the Default Rate (hereinafter defined).

All agreements between Borrower and Bank are hereby 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
paid or agreed to be paid to Bank for the use or the forbearance of the
indebtedness evidenced hereby exceed the maximum permissible under applicable
law. As used herein, the term “applicable law” shall mean the law in effect as
of the date hereof, provided, however that in the event there is a change in the
law which results in a higher permissible rate of interest, then this Note shall
be governed by such new law as of its effective date. In this regard, it is
expressly agreed that it is the intent of Borrower and Bank in the execution,
delivery and acceptance of this Note to contract in strict compliance with the
laws of the State of Rhode Island from time to time in effect. If, under or from
any circumstances whatsoever, fulfillment of any provision hereof shall involve
transcending the limit of such validity prescribed by applicable law, then the
obligation to be fulfilled shall automatically be reduced to the limits of such
validity, and if under or from any circumstances whatsoever Bank should ever
receive as interest an amount which would exceed the highest lawful rate, such
amount which would be excessive interest shall be applied to the reduction of
the principal balance evidenced hereby and not to the payment of interest. This
provision shall control every other provision of all agreements between Borrower
and Bank.

 

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PAYMENT

SCHEDULE: In the event that any payment of principal and/or interest shall not
be received by Bank within TEN (10) days of the due date, the Borrower shall, to
the extent permitted by law, pay Bank not later than one (1) month thereafter a
late charge of FIVE (5%) percent of the overdue payment.

All payments shall be applied first to the payment of all fees, expenses and
other amounts due to the Bank (excluding principal and interest), then to
accrued interest, and the balance on account of outstanding principal; provided,
however, that after the occurrence of an Event of Default (as defined below),
payments will be applied to the obligations of Borrower to Bank as Bank
determines in its sole discretion.

The Borrower shall pay interest only to Bank on the unpaid principal balance of
all Advances made by Bank from time to time pursuant to the Loan Agreement, with
interest payable monthly commencing on January 21, 2007 and continuing on the
same day of each successive month thereafter, with a final interest-only payment
due and payable on June 21, 2007. Thereafter, principal and interest shall be
payable in consecutive equal monthly installments in an

 

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amount which, if paid monthly until June 21, 2027 (based on the assumption that
the then current rate would remain in effect throughout the term), would cause
the then principal balance of this Note as of June 21, 2007, together with
interest at the interest rate then in effect, to be paid in full, commencing
July 21, 2007 and continuing on the same day of each successive month thereafter
with a final payment of all unpaid principal and interest due and payable in
full on June 21, 2017. All unpaid principal and accrued interest shall be due
and payable in full on the Maturity Date.

If this Note or any payment hereunder becomes due on a day which is not a
Business Day (as defined below), the due date of this Note or payment shall be
extended to the next succeeding Business Day, and such extension of time shall
be included in computing interest and fees in connection with such payment. As
used in this Note, “Business Day” shall mean any day other than a Saturday,
Sunday or day which shall be in the State of Rhode Island a legal holiday or day
on which banking institutions are authorized or required to close.

All payments shall be made by Borrower to Bank in lawful currency of the United
States of America in immediately available funds, without counterclaim or setoff
and free and clear of, and without any deduction or withholding for, any taxes
or other payments.

 

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ADDITIONAL TERMS AND CONDITIONS:

 

1. If at any time during the term of this Note, the Bank shall be required by
any Legal Requirement (other than legal requirements imposed specifically on the
Bank and not applicable to national banks or FDIC-insured banks generally) to
maintain any Reserves in respect of any LIBOR Portion, other than Reserves
existing as of the date of the applicable Date of Determination, the LIBOR Rate
shall be adjusted to reflect all additional costs incurred or to be incurred by
the Bank in maintaining such Reserves. Such costs shall be computed by
determining the amount by which such Legal Requirement effectively increases the
cost to the Bank of obtaining deposits of U.S. Dollars in the London foreign
currency deposits market in amounts equal to the LIBOR Portion. The
determination by the Bank of the amount of such costs and the allocation, if
any, of such costs among the Borrower and other customers of the Bank that have
arrangements with the Bank similar to the Borrower’s LIBOR Rate arrangement, if
done in good faith and, with respect to such allocation, on an equitable basis,
shall, in the absence of manifest error, be conclusive.

 

2.

It is the understanding of the Borrower and the Bank that the Bank shall receive
payments of amounts of principal of and interest on this Note with respect to
the LIBOR Portion from time to time bearing interest under the LIBOR Rate free
and clear of, and without deduction for, any Taxes. If (a)(i) the Bank shall be
subject to any such Tax in respect of any such amount, or (ii) the Borrower
shall be required to withhold or deduct any such Tax from any such amount, and
(b) such Tax shall not have existed as of the date of the applicable LIBOR
Effective Date, the LIBOR Rate shall be adjusted to reflect all additional costs
(including,

 

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without limitation, any Taxes due to such adjustment) incurred or to be incurred
by the Bank in connection with the payment by the Bank or the withholding by the
Borrower of such Tax (including, without limitation, any penalties or interest
or expenses), and the Borrower shall provide the Bank with a statement detailing
the amount of any such Tax actually paid by the Borrower. The determination by
the Bank of the amount of such costs shall, in the absence of manifest error, be
conclusive, and at the Borrower’s request, the Bank shall demonstrate the basis
for such determination. If after any such adjustment and payment of the same by
the Borrower, any part of any Tax paid by the Bank is subsequently recovered by
the Bank, the Bank shall reimburse the Borrower to the extent of the amount so
recovered. A certificate of an officer of the Bank setting forth the amount of
such recovery and the basis therefor shall, in the absence of manifest error, be
conclusive.

 

3. Notwithstanding anything herein to the contrary, the following conditions
must be met in order for the Bank to make the LIBOR Rate available to the
Borrower:

(a) There shall have occurred no change in applicable law which might make it
unlawful in the opinion of counsel for the Bank to obtain deposits of U.S.
Dollars in the London interbank foreign deposits market;

(b) As of a LIBOR Effective Date, there shall exist no Event of Default (as
defined below) which is not waived by the Bank.

(c) The Bank shall not have determined in good faith that it is unable to
determine a LIBOR Rate in respect of a LIBOR Interest Period and the Bank shall
not have determined that it is unable to obtain deposits of U.S. dollars in the
London interbank foreign currency deposits market in the applicable amounts and
for such LIBOR Interest Period.

 

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In the event that a LIBOR Rate is not available, then the indebtedness evidenced
by this Note shall bear interest at a per annum rate equal to the Prime Rate.

 

4. Throughout the term of this Note, the determination of a LIBOR Rate on each
Date of Determination shall be irrevocable and binding upon the Borrower.

 

5. Borrower may elect to prepay, upon three (3) days prior written notice, the
principal outstanding hereunder subject to the following conditions:

 

  (i) During any period in which a Floating Rate is being charged, the principal
outstanding hereunder may be prepaid in full or in part without premium or
penalty.

 

  (ii) During any period in which a LIBOR Rate is being charged, the principal
outstanding hereunder may be prepaid only on the last day of a LIBOR Interest
Period. Borrower shall pay to Bank, upon request of Bank, such amount or amounts
as shall be sufficient (in the reasonable opinion of Bank) to compensate it for
any loss, cost or expense incurred as a result of (i) any such payment on a date
other than the last day of a LIBOR Interest Period or (ii) any failure by
Borrower to borrow based on a LIBOR Rate on the date specified in Borrower’s
notice to Bank. Without limiting the foregoing, Borrower shall pay to Bank a
“yield maintenance fee” in an amount computed as follows: The current rate for
United States Treasury securities (bills on a discounted basis shall be
converted to a bond equivalent) with a maturity date closest to the last day of
the then LIBOR Interest Period shall be subtracted from the LIBOR Rate in effect
at the time of prepayment. If the result is zero or a negative number, there
shall be no prepayment premium. If the result is a positive

 

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number, then the resulting percentage shall be multiplied by the amount of the
principal balance being prepaid. The resulting amount shall be divided by 360
and multiplied by the number of days remaining in the then LIBOR Interest
Period. Said amount shall be reduced to present value calculated by using the
number of days remaining in the then LIBOR Interest Period and using the above
referenced United States Treasury securities rate. The resulting amount shall be
the yield maintenance fee due to Bank upon the prepayment of a LIBOR loan. Said
yield maintenance fee shall be due and payable, as aforesaid, if the payment of
principal due and owing hereunder is accelerated on account of an Event of
Default (hereinafter described) hereunder

 

6.

Borrower: (i) waives presentment, demand, notice of demand, protest, notice of
protest and notice of nonpayment and any other notice required to be given under
the law to Borrower, in connection with the delivery, acceptance, performance,
default or enforcement of this Note, of any indorsement or guaranty of this Note
or of any document or instrument evidencing any security for payment of this
Note; (ii) consents to any and all delays, extensions, renewals or other
modifications of this Note or waivers of any term hereof or release or discharge
by Bank of any guarantor or release, substitution or exchange of any security
for the payment hereof or the failure to act on the part of Bank or any
indulgence shown by Bank, from time to time and in one or more instances
(without notice to or further assent from Borrower), and agrees that no such
action, failure to act or failure to exercise any right or remedy, on the part
of Bank shall in any way affect or impair the obligations of Borrower or be
construed as a waiver by Bank of, or otherwise affect, any of Bank’s rights
under this Note, under any indorsement or guaranty of this Note or under any
document or instrument evidencing any security for payment of this Note; and
(iii) agrees to pay, on demand, all costs

 

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and expenses of collection of this Note or of any indorsement or any guaranty
hereof and/or the enforcement of Bank’s rights with respect to, or the
administration, supervision, preservation, protection of, or realization upon,
any property securing payment hereof, including reasonable attorneys’ fees.

 

7. This Note is delivered in and shall be construed under the internal laws (and
not the law of conflicts or choice of law) of the State of Rhode Island, and in
any litigation in connection with, or enforcement of, this Note or of any
indorsement or guaranty of this Note or any security given for payment hereof,
Borrower CONSENTS TO AND CONFERS PERSONAL JURISDICTION ON COURTS OF THE STATE OF
RHODE ISLAND OR OF THE FEDERAL GOVERNMENT SITTING THEREIN, AND EXPRESSLY WAIVES
ANY OBJECTIONS AS TO VENUE IN ANY OF SUCH COURTS. The term “Bank” as used in
this Note shall include Bank’s successors, indorsees and assigns.

 

8. The occurrence of any one or more of the following events shall constitute an
Event of Default under this Note:

(a) default in the payment of any installment of the principal of, or fees or
interest on, this Note after the date when the same shall become due and
payable, whether at the due date thereof or at a date fixed for prepayment or by
acceleration or otherwise, and the continuance of such default for a period of
ten (10) days after such due date;

(b) default, after the expiration of any applicable grace periods, in the due
observance or performance of any covenant, promise or provision contained in any
other agreement of the Borrower in favor of Bank, including, without limitation,
any other promissory note, loan agreement, mortgage deed, or security document;

 

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(c) any Event of Default shall occur and be continuing as defined under any of
the Security Documents, or as defined under the Loan Agreement.

 

9. Whenever an Event of Default is in existence under this Note, the entire
balance outstanding hereunder and all other liabilities, indebtedness and
obligations of Borrower to Bank (however acquired or evidenced) shall, at the
option of Bank, become forthwith due and payable, without presentment, notice,
protest or demand of any kind (all of which are expressly waived by Borrower)
for the payment of the whole or any part hereof. Whenever an Event of Default is
in existence under this Note (whether or not Bank has accelerated payment of
this Note), or after maturity or after judgment has been rendered on this Note,
to the extent permitted by law, the rate of interest on the unpaid principal
shall, at the option of Bank, be increased to four percent (4%) over the rate
which would otherwise be applicable (the “Default Rate”). Failure at any time to
exercise either of the aforesaid options or any other rights of Bank hereunder
shall not constitute a waiver thereof, nor shall it be a bar to exercise of
either of the aforesaid options or rights at a later date.

 

10. In the event any one or more of the provisions of this Note shall for any
reason be held to be invalid, illegal or unenforceable, in whole or in part or
in any respect or in the event that any one or more of the provisions of this
Note operate or would prospectively operate to invalidate this Note, then and in
either of those events, such provision or provisions only shall be deemed null
and void and shall not affect any other provision of this Note and the remaining
provisions of this Note shall remain operative and in full force and effect and
shall in no way be affected, prejudiced or disturbed thereby.

 

11. BORROWER AND BANK (BY ACCEPTANCE OF THIS NOTE) MUTUALLY HEREBY KNOWINGLY,
VOLUNTARILY AND INTENTIONALLY WAIVE THE RIGHT TO A TRIAL BY JURY IN RESPECT OF
ANY CLAIM BASED HEREON,

 

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ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS NOTE OR ANY OTHER LOAN
DOCUMENTS CONTEMPLATED TO BE EXECUTED IN CONNECTION HEREWITH OR ANY COURSE OF
CONDUCT, COURSE OF DEALINGS, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS
OF ANY PARTY, INCLUDING, WITHOUT LIMITATION, ANY COURSE OF CONDUCT, COURSE OF
DEALINGS, STATEMENTS OR ACTIONS OF BANK RELATING TO THE ADMINISTRATION OF THE
LOAN OR ENFORCEMENT OF THE LOAN DOCUMENTS, AND AGREE THAT NEITHER PARTY WILL
SEEK TO CONSOLIDATE ANY SUCH ACTION WITH ANY OTHER ACTION IN WHICH A JURY TRIAL
CANNOT BE OR HAS NOT BEEN WAIVED. BORROWER CERTIFIES THAT NO REPRESENTATIVE,
AGENT OR ATTORNEY OF BANK HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT BANK
WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER.
THIS WAIVER CONSTITUTES A MATERIAL INDUCEMENT FOR BANK TO ACCEPT THIS NOTE AND
MAKE THE LOAN.

 

12. Bank may at any time pledge or assign all or any portion of its rights under
this Note to any of the twelve (12) Federal Reserve Banks organized under
Section 4 of the Federal Reserve Act, 12 U.S.C. Section 341. No such pledge or
assignment or enforcement thereof shall release Bank from its obligations under
any of the loan documents evidencing or securing this Note.

 

13.

Bank shall have the unrestricted right at any time and from time to time, and
without the consent of or notice to Borrower, to grant to one or more banks or
other financial institutions (each a “Participant”) participating interests in
the obligations evidenced hereby. In the event of any such grant by Bank of a
participating interest to a Participant, whether or not upon notice

 

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to Borrower, Bank shall remain responsible for the performance of its
obligations hereunder and Borrower shall continue to deal solely and directly
with Bank in connection with Bank’s rights and obligations hereunder. Bank may
furnish any information concerning Borrower in its possession from time to time
to prospective Participants, provided that Bank shall require any such
prospective Participant to agree in writing to maintain the confidentiality of
such information.

 

14. Borrower shall pay on demand all expenses of Bank in connection with the
preparation, administration, default, collection, waiver or amendment of loan
terms, or in connection with Bank’s exercise, preservation or enforcement of any
of its rights, remedies or options hereunder, including, without limitation,
fees of outside legal counsel or the allocated costs of in-house legal counsel,
accounting, consulting, brokerage or other similar professional fees or
expenses, and any fees or expenses associated with travel or other costs
relating to any appraisals or examinations conducted in connection with the loan
or any collateral therefor, and the amount of all such expenses shall, until
paid, bear interest at the rate applicable to principal hereunder (including any
default rate) and be an obligation secured by any collateral.

 

15. Upon receipt of an affidavit of an officer of Bank as to the loss, theft,
destruction or mutilation of the Note or any other security document which is
not of public record, and, in the case of any such loss, theft, destruction or
mutilation, upon cancellation of such Note or other security document, Borrower
will issue, in lieu thereof, a replacement Note or other security document in
the same principal amount thereof and otherwise of like tenor.

 

16. No portion of the proceeds of the loan evidenced by this Note shall be used,
in whole or in part, for the purpose of purchasing or carrying any “margin
stock” as such term is defined in Regulation U of the Board of Governors of the
Federal Reserve System.

 

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17. Bank shall have the unrestricted right at any time or from time to time, and
without Borrower’s consent, to assign all or any portion of its rights and
obligations hereunder to one or more banks or other financial institutions
(each, an “Assignee”), and Borrower, upon its or its counsel’s satisfactory
review, agrees that it shall execute, or cause to be executed, such documents,
including, without limitation, amendments to this Note and to any other
documents, instruments and agreements executed in connection herewith as Bank
shall deem necessary to effect the foregoing. Bank agrees to reimburse Borrower
for its reasonable legal expenses incurred in connection with the execution of
any such documentation. In addition, at the request of Bank and any such
Assignee, Borrower shall issue one or more new promissory notes, as applicable,
to any such Assignee and, if Bank has retained any of its rights and obligations
hereunder following such assignment, to Bank, which new promissory notes shall
be issued in replacement of, but not in discharge of, the liability evidenced by
this Note and held by Bank prior to such assignment and shall reflect the amount
of the respective loans held by such Assignee and Bank after giving effect to
such assignment, provided, however, that in no event shall the amount due under
the subsequent notes exceed the amount due under this Note. Upon the execution
and delivery of appropriate assignment documentation, amendments and any other
documentation required by Bank in connection with such assignment, and the
payment by Assignee of the purchase price agreed to by Bank, and such Assignee,
such Assignee shall have all of the rights and obligations of Bank hereunder
(and under any and all other guaranties, documents, instruments and agreements
executed in connection herewith) to the extent that such rights and obligations
have been assigned by Bank pursuant to the assignment documentation between Bank
and such Assignee. Bank may furnish any

  information concerning Borrower in its possession from time to time to
prospective Assignees, provided that Bank shall require any such prospective
Assignee to agree in writing to maintain the confidentiality of such
information.

 

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18. This Note is intended by the parties as the final. complete and exclusive
statement of the transactions evidenced by this Note. All prior or
contemporaneous promises, agreements and understandings, whether oral or
written, are deemed to be superseded by this Note, and no party is relying on
any promise, agreement or understanding not set forth in this Note. This Note
may not be amended or modified except by a written instrument describing such
amendment or modification executed by Borrower and Bank.

 

19. By mutual agreement of Borrower and Bank, Bank may effect payment of any
sums due hereunder by means of debiting any of Borrower’s demand deposit
accounts with Bank.

 

SECURITY: Borrower hereby grants to Bank, a continuing lien, security interest
and right of setoff as security for all liabilities and obligations to Bank,
whether now existing or hereafter arising, upon and against all deposits,
credits, collateral and property, now or hereafter in the possession, custody,
safekeeping or control of Bank or any entity under the control of Bank of
America Corporation and its successors and assigns, or in transit to any of
them. At any time, without demand or notice (any such notice being expressly
waived by Borrower), Bank may set off the same or any part thereof and apply the
same to any liability or obligation of Borrower even though unmatured and
regardless of the adequacy of any other collateral securing this Note. ANY AND
ALL RIGHTS TO REQUIRE BANK TO EXERCISE ITS RIGHTS OR REMEDIES WITH RESPECT TO
ANY OTHER COLLATERAL WHICH SECURES THIS NOTE, PRIOR TO EXERCISING ITS RIGHTS OF
SETOFF WITH RESPECT TO SUCH DEPOSITS, CREDITS OR OTHER PROPERTY OF BORROWER, ARE
HEREBY KNOWINGLY, VOLUNTARILY AND IRREVOCABLY WAIVED.

 

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This Note is also secured by and entitled to the benefits of a Guarantee, an
Open-End Mortgage and Security Agreement, and a Collateral Assignment of Leases
and Rents, all dated as of even date (collectively herein the “Security
Documents”).

 

WITNESS:     BORROWER:     Faith Realty, LLC

/s/ Steven Rosenbaum

    By:  

/s/ Jason P. Macari

    Name:   Jason P. Macari     Title:   Member

 

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