Exhibit 10.3

 

PROMISSORY NOTE A-2

 

 

LOAN TERMS TABLE

 

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

Loan No.: 10183025

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

 

  ARHC HDLANCA01, LLC, ARHC NHCANGA01, LLC,   ARHC FMMUNIN03, LLC, ARHC
BMLKWCO01, LLC,   ARHC ECMCYNC01, LLC, ARHC ECCPTNC01, LLC,   ARHC LPELKCA01,
LLC, ARHC MMTCTTX01, LLC,   ARHC MRMRWGA01, LLC, ARHC OLOLNIL01, LLC,   ARHC
PPHRNTN01, LLC, ARHC SMERIPA01, LLC,   ARHC AMGLNAZ02, LLC, ARHC PHNLXIL01, LLC,
  ARHC AMGLNAZ01, LLC, ARHC SFSTOGA01, LLC,   ARHC VCSTOGA01, LLC, ARHC
WLWBYMN01, LLC,   ARHC AHPLYWI01, LLC, and ARHC PRPEOAZ03, LLC

 

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

Property:     as defined in the Loan Agreement

Closing Date: April 10, 2018

Original Principal Amount: $41,545,000.00

Maturity Date: May 1, 2028

Interest Rate: four and five hundred forty-one thousandths percent (4.541%)

Initial Interest Payment Per Diem: $5,240.44

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

Payment Date: June 1, 2018 and on the first day of each successive month
thereafter

Permitted Par Prepayment Date: February 2, 2028

Prepayment Consideration:

Closing Date through
June 1, 2020 No prepayment permitted     June 2, 2020 through
February 1, 2028: 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

 

 

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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-2 (“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 (as hereinafter defined) 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.

 

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4.          Intentionally Omitted.

 

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.

 

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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 (a) 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.

 

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. 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 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, 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.)

 

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(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). Any such partial
prepayments shall reduce the Outstanding Principal Balance, but shall not reduce
the Monthly Debt Service Payment Amount.

 

(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, 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.

 

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(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 (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
Administration and Enforcement Expenses and other sums 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.

 

(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 (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 Administration and Enforcement Expenses and other sums 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.

 

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.

 

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.

 

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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.

 

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.         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.

 

24.1         California Law Provisions. The following provisions shall apply to
this Note to the extent that California law is deemed to govern this Note:

 

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.

 

 10 

 

 

  /s/ MA   Borrower’s Initials

 

24.2         Indiana Law Provisions. The following provisions shall apply to
this Note to the extent that Indiana law is deemed to govern this Note:

 

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

 

24.3         Tennessee Law Provisions. The following provisions shall apply to
this Note to the extent that Tennessee law is deemed to govern this Note:

 

No Usury. At no time is Borrower required to pay interest on the Loan or on any
other payment due hereunder or under any of the other Loan Documents (or to make
any other payment deemed by law or by a court of competent jurisdiction to be
interest) at a rate which would subject Lender either to civil or criminal
liability as a result of being in excess of the maximum interest rate which
Borrower is permitted by applicable law to pay. If interest (or such other
amount deemed to be interest) paid or payable by Borrower is deemed to exceed
such maximum rate, then the amount to be paid immediately shall be reduced to
such maximum rate and thereafter computed at such maximum rate. All previous
payments in excess of such maximum rate shall be deemed to have been payments of
principal (in inverse order of maturity) and not on account of interest due
hereunder. For purposes of determining whether any applicable usury law has been
violated, all payments deemed by law or a court of competent jurisdiction to be
interest shall, to the extent permitted by applicable law, be deemed to be
amortized, prorated, allocated and spread over the full term of the Loan in such
manner so that interest is computed at a rate throughout the full term of the
Loan which does not exceed the maximum lawful rate of interest.

 

24.4         Texas Law Provisions. The following provisions shall apply to this
Note to the extent that Texas law is deemed to govern this Note:

 

 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.

 

[NO FURTHER TEXT ON THIS PAGE]

 

 12 

 

 

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

 

  BORROWER:       ARHC HDLANCA01, LLC,   ARHC NHCANGA01, LLC,   ARHC FMMUNIN03,
LLC,   ARHC BMLKWCO01, LLC,   ARHC ECMCYNC01, LLC,   ARHC ECCPTNC01, LLC,   ARHC
LPELKCA01, LLC,   ARHC MMTCTTX01, LLC,   ARHC MRMRWGA01, LLC,   ARHC OLOLNIL01,
LLC,   ARHC PPHRNTN01, LLC,   ARHC SMERIPA01, LLC,   ARHC AMGLNAZ02, LLC,   ARHC
PHNLXIL01, LLC,   ARHC AMGLNAZ01, LLC,   ARHC SFSTOGA01, LLC,   ARHC VCSTOGA01,
LLC,   ARHC WLWBYMN01, LLC,   ARHC AHPLYWI01, LLC and   ARHC PRPEOAZ03, LLC,  
each a Delaware limited liability company

 

  By: /s/ Michael Anderson   Name: Michael Anderson     Authorized Signatory for
each such Limited Liability Company        

Signature Page to Promissory Note A-2