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The entire outstanding principal amount of this Promissory Note and all accrued, unpaid interest is due and payable in full on the earlier of June 1, 2015 or a "Sale of the Development Property," as defined in the Development Agreement. Borrower may prepay this Promissory Note, in whole or in part, at any time and, if in part, from time to time, during the entire term of this Promissory Note. All payments shall be applied first to the payment of accrued, unpaid late charges then to and accrued, unpaid interest, if any, with the balance, if any, applied to the reduction of principal. If Borrower prepays $2,000,000.00 or more on or before the date 12 months after the date of the first advance under this Promissory Note, Lender shall forgive $250,000.00 of the principal amount of this Promissory Note, such forgiveness to be effective as of the date Lender has prepaid at least $2,000,000.00. This Promissory Note is the note referred to as "Note No. 2" in the Development Agreement and in the Loan Agreement and is subject to the additional terms and conditions set forth in the Development Agreement, the Loan Agreement and each of the "Loan Documents," as defined in the Loan Agreement. If a payment due hereunder is not made within five days after the date when due, Borrower shall pay to Lender a late payment charge of 5% of the amount of the overdue payment to compensate Lender for a portion of the cost related to handling the overdue payment. Failure to exercise any option provided herein shall not constitute a waiver of the right to exercise the same in the event of any subsequent default. Borrower agrees that if, and as often as, this Note is given to an attorney for collection or to defend or enforce any of Lender's rights hereunder, Borrower will pay to the Lender Lender's reasonable attorneys' fees together with all court costs and other expenses paid by Lender. Borrower waives presentment, protest and demand, notice of protest, demand and of dishonor and nonpayment of this Promissory Note and any lack of diligence or delays in collection or enforcement of this Note. Borrower agrees that this Promissory Note, or any payment hereunder, may be extended from time to time, and Borrower consents to the release of any party liable for the obligation evidenced by this Promissory Note, the release of any of the security for this Note, the acceptance of any other security therefore, or any other indulgence or forbearance whatsoever, all without notice to any party and without affecting the liability of Borrower. Borrower represents and warrants to Lender that Borrower will use the proceeds of the loan evidenced by this Promissory Note solely for business purposes. If Borrower defaults on the performance of one or more of Borrower's obligations under this Promissory Note or upon the occurrence of any other "Event of Default" (as defined in the Development Agreement or the Loan Agreement), the entire outstanding principal balance hereof and all accrued interest and other amounts due hereon shall, at the option of the Lender and subject to the Notice and cure provisions set forth in Section 13.1 (c) of the Development Agreement and in the Loan Agreement become immediately due and payable; provided, however that if an Event of Default described in Section 13.1(i) or (j) of the Loan Agreement D-2-2 2695614v12