Exhibit 10.1

 

CERTIFICATION OF RECORDING

 

MORTGAGE DEED

 

MORTGAGOR:

 

HEARTH & HOME OF VANDALIA, INC.

an Ohio Corporation

 

 

 

MORTGAGEE:

 

RED MORTGAGE CAPITAL, LLC

a Delaware limited liability company

 

 

 

PROJECT NAME:

 

HEARTH & HOME OF VANDALIA

Vandalia, Montgomery County, Ohio

 

 

 

PROJECT NO.:

 

046-43057

 

Date of Recording: January 31, 2012

 

Recording information: Official Record 2012-00006113, Recorder’s Office,
Montgomery County, Ohio.

 

/s/ John P. Wilkerson

 

John P. Wilkerson, Jr., Esq.

 

 

[an exact copy of filing attached]

 

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This instrument was prepared by

and upon recording return to:

R. Andrew Lien, Esq.

Krooth & Altman LLP

1850 M Street, NW

Suite 400

Washington, DC 20036

(202) 293-8200

 

MORTGAGE DEED

 

MORTGAGOR:

 

HEARTH & HOME OF VANDALIA, INC.

an Ohio corporation

 

 

 

MORTGAGEE:

 

RED MORTGAGE CAPITAL, LLC

a Delaware limited liability company

 

 

 

PROJECT NAME:

 

HEARTH & HOME OF VANDALIA

Vandalia, Montgomery County, Ohio

 

 

 

PROJECT NO.:

 

046-43057

 

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MORTGAGE DEED

 

KNOW ALL MEN BY THESE PRESENTS, That HEARTH & HOME OF VANDALIA, INC., a
corporation

 

organized                , and existing under the laws of the State of
Ohio                                         (hereinafter with its successors
and assigns referred to as the Mortgagor), for and in consideration of the sum
of Ten Dollars ($10) to it in hand paid by RED MORTGAGE CAPITAL, LLC, a Delaware
limited liability company                                                    ,
organized and existing under the laws of the State of
Delaware                                         . whose correct address is Two
Miranova Place, 12th Floor, Columbus, Ohio
43215                                                                              .

 

the Mortgagee (hereinafter with its successors and assigns referred to as the
Mortgagee), receipt of which is hereby acknowledged. does hereby grant, bargain,
sell, convey, and warrant unto the Mortgagee the following-described premises to
wit:

 

See Exhibit “A” attached hereto and made a part hereof.

 

I HEREBY CERTIFY THAT THE FOREGOING

INSTRUMENT WAS PREPARED BY, AND AFTER

RECORDING PLEASE RETURN TO:

 

R. Andrew Lien, Esq.

Krooth & Altman LLP

1850 M Street, NW, Suite 400

Washington, DC 20036

(202) 293-8200

 

Together with the privileges and appurtenances thereunto belonging, and all the
rents, issues, and profits which may arise or be had therefrom; and all the
estate, title and interest of said Mortgagor either in law or equity in and to
said premises, together with all buildings and improvements of every kind and
description now or hereafter erected or placed thereon and all fixtures and
articles of personal property of the Mortgagor now or hereafter to be attached
to or used in and about the building or buildings now erected or hereafter to be
erected on the lands herein described which are necessary to the complete and
comfortable use and occupancy of such building or buildings for the purposes for
which they were or are to be erected, including, but not limited to all dynamos,
engines, pumps, elevators, all awnings, screens, venetian blinds, shades,
attires, and all plumbing, heating, lighting, cooking, ventilating,
refrigerating, laundry and incinerating equipment; all cabinets fixtures, and
appurtenances thereto and such other goods and chattels and personal property as
are ever used or furnished in operating a building or the activities conducted
therein, similar to the one herein described and referred to, and all renewals
and replacements thereof or articles in substitution therefor, whether or not
the same are, or shall be attached to said building or buildings in any manner.
All of the foregoing shall be deemed to be, remain and form part of the realty
and are covered under this mortgage. If the Mortgagor shall, after the date
hereof, acquire any additional real or personal property which would, if owned
by the Mortgagor, be subject to the terms of this Mortgage, it shall notify the
Mortgagee and the Secretary of Housing and Urban Development, acting by and
through the Federal Housing Commissioner, of such acquisition, stating the
nature, quantity, or amount of such property so acquired and the interest of the
Mortgagor therein. All such property or the interest of the Mortgagor therein
shall, upon acquisition by the Mortgagor, forthwith and without further act.
become subject to this mortgage; and

 

Together with all building materials located on the premises and intended to be
incorporated in the buildings or other improvements.

 

TO HAVE AND TO HOLD the said premises and above-described property to the said
Mortgagee, its successors and assigns forever, for the uses and purposes herein
expressed:

 

Previous edition is obsolete

 

HUD-94165B (10-82)

 

 

HB 4430.1

 

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WHEREAS, the Mortgagor is justly indebted to the Mortgagee in the principal sum
of THREE MILLION SEVEN HUNDRED TWENTY-ONE THOUSAND FIVE HUNDRED AND 00/100THS
DOLLARS                                                                  Dollars
(S $3,721,500.00                ), evidenced by its notes of even date herewith,
bearing interest from date on outstanding balances at

Three & Seventy Four        per centum (   3.74                      %) per
annum, said principal and interest being payable in monthly in stallments as
provided in said note with a final maturity of May 1, 2041                 
.which note is identified as being secured hereby by a certificate thereon. Said
note and all of its terms are incorporated herein by reference and this
conveyance shall secure any and all extensions thereof, however evidenced.

 

AND WHEREAS MORTGAGOR COVENANTS, PROMISES AND AGREES HEREBY:

 

1.     That it will pay the note at the times and in the manner provided
therein;

 

2.     That it will not permit or suffer the use of any of the property for any
purpose other than the use for which the same was intended at the time this
mortgage was executed;

 

3.     That the Regulatory Agreement, if any, executed by the Mortgagor and the
Secretary of Housing and Urban Development, acting by and through the Federal
Housing Commissioner, which is being recorded simultaneously herewith, is
incorporated in and made a part of this mortgage. Upon default under the
Regulatory Agreement and upon the request of the Secretary of Housing and Urban
Development, acting by and through the Federal Housing Commissioner, the
Mortgagee, at its option, may declare the whole of the indebtedness secured
hereby to be due and payable;

 

4.     That all rents, profits and income from the property covered by this
mortgage are hereby assigned to the Mortgagee for the purpose of discharging the
debt hereby secured. Permission is hereby given to Mortgagor so long as no
default exists hereunder, to collect such rents, profits and income for use in
accordance with the provisions of the Regulatory Agreement.

 

5.     That upon default hereunder Mortgagee shall be entitled to the
appointment of a receiver by any court having jurisdiction, without notice, to
rake possession and protect the property described herein and operate same and
collect the rents, profits and income therefrom;

 

6.     That at the option of the Mortgagor the principal balance secured hereby
may be reamortized on terms acceptable to the Secretary of Housing and Urban
Development, acting by and through the Federal Housing Commissioner if a partial
prepayment results from an award in condemnation in accordance with provisions
of paragraph 9 herein, or from an insurance payment made in accordance with
provisions of paragraph 7 herein, where there is a resulting loss of project
income;

 

7.     That the Mortgagor will keep the improvements now existing or hereafter
erected on the mortgaged property insured against loss by fire and such other
hazards, casualties, and contingencies, as may be stipulated by the Secretary of
Housing and Urban Development, acting by and through the Federal Housing
Commissioner upon the insurance of the mortgage and other hazards as may be
required from time to time by the Mortgagee, and all such insurance shall be
evidenced by standard Fire and Extended Coverage Insurance policy or policies,
in amounts not less than necessary to comply with the applicable Coinsurance
Clause percentage, but in no event shall the amounts of coverage be less than
eighty per centum (80%) of the Insurable Values or not less than unpaid balance
of the insured mortgage, whichever is the lesser, and in default thereof the
Mortgagee shall have the right to effect insurance. Such policies shall be
endorsed with standard Mortgagee clause with loss payable to the Mortgagee and
the Secretary of Housing and Urban Development as interest may appear, and
.shall be deposited with the Mortgagee;

 

That if the premises covered hereby, or any part thereof, shall be damaged by
fire or other hazard against which insurance is held as hereinabove provided,
the amounts paid by any insurance company in pursuance of the contract of
insurance to the extent of the indebtedness then remaining unpaid, shall be paid
to the Mortgagee and, at its option, may be applied to the debt or released for
the repairing or rebuilding of the premises; The insurance company providing
such coverage shall be selected by Mortgagor subject to the approval of
Mortgagee, which shall not be unreasonably be withheld.

 

8.     That it is the owner in fee simple of said premises; that it is in
peaceable possession of same and has full power to convey the same and the title
so conveyed is free, clear and unencumbered except taxes not due and payable;

 

9.     That all awards of compensation in connection with condemnation for
public use of or a taking of any of that property, shall be paid to the
Mortgagee to be applied to the amount due under the note secured hereby in
(1) amounts equal to the next maturing installment or installments of principal
and (2) with any balance to be credited to the next payment due under the note.
That all awards of damages in connection with any condemnation for public use of
or injury to any residue of that property, shall be paid to the Mortgagee to be
applied to a fund held for and on behalf of the Mortgagor which fund shall, at
the option of the Mortgagee, and with the prior approval of the Secretary of
Housing and Urban Development, either be applied to the amount due under the
note as specified in the preceding sentence, or be disbursed for the restoration
or repair of the damage to the residue. No amount applied to the reduction of
the principal amount due in accordance with (1) shall be considered an optional
prepayment as the term is used in this Mortgage Deed and the note secured
hereby, nor relieve the Mortgagor from making regular monthly payments
commencing on the first day of the first month following the date of receipt of
the award. The Mortgagee is hereby authorized in the name of the Mortgagor to
execute and deliver valid acquittances for such awards and to appeal from such
awards.

 

10.  To commit or suffer no waste of said property, to maintain and keep the
buildings, fences and other improvements to be erected on said premises in good
condition and repair and promptly to effect such repairs thereof as Mortgagee
may require;

 

11.  That, in order more fully to protect the security of this mortgage, the
Mortgagor, together with and in addition to, the monthly payments under the
terms of the note secured hereby, covenants and agrees to pay to the Mortgagee
beginning the first day of the first month after date hereof and continuing
until the said note is fully paid, concurrently with payment of interest or
principal and interest the following sums:

 

(a)         An amount sufficient to provide the mortgagee with funds to pay the
next mortgage insurance premium if this instrument and the note secured hereby
are insured, or a monthly service charge, if they are held by the Secretary of
Housing and Urban Development, as follows:

 

(I)

 

If and so long as said note of even date and this instrument are insured or are
reinsured under the provisions of the National Housing Act. an amount sufficient
to accumulate in the hands of the Mortgagee one (1) month prior to its due date
annual mortgage insurance premium, in order to provide such Mortgagee with funds
to pay such premium to the Secretary of Housing and Urban Development pursuant
to the National Housing Act, as amended, and applicable Regulations thereunder,
or

(II)

 

Beginning with the first day the month following an assignment of this
instrument and the note secured hereby to the Secretary of Housing and Urban
Development, a monthly service charge which shall be an amount equal to
one-twelfth of one-half percent (1/12 of 1/2%) of the average outstanding
principal balance due on the note computed for each successive year beginning
with the first of the month following such assignment, without taking into
account delinquencies or prepayments.

 

(b)         A sum equal to the ground rents, if any, next due, plus the premiums
that will next become due and payable on policies of fire and other property
insurance covering the premises covered hereby, plus water rates, taxes and
assessments nest due on the premises covered hereby (all as estimated by the
Mortgagee) less all sums already paid therefor divided by the number of months
to elapse before one (1) month prior to the date when such ground rents,
premiums, water rates, taxes and assessments will become delinquent, such sums
to be held by Mortgagee to pay said ground rents, premiums, water rates, taxes,
and special assessments.

 

(c)          All payments mentioned in the two preceding subsections of this
paragraph and all payments to be made under the note secured hereby shall be
added together and the aggregate amount thereof shall be paid each month in a
single payment to be applied by Mortgagee to the following items in the order
set forth:

 

(I)

 

premium charges under the Contract of Insurance with the Secretary of Housing
and Urban Development, acting by and through the Federal Housing Commissioner or
service charge;

(II)

 

ground rents, taxes, special assessments, water rates, fire and other property
insurance premiums;

(III)

 

interest on the note secured hereby;

(IV)

 

amortization of the principal of said note.

 

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12.  Any excess funds accumulated under (b) of paragraph 11 remaining after
payment of the items therein mentioned, shall be credited to subsequent monthly
payments of the same nature required thereunder, but if any such items shall
exceed the estimate therefor, the Mortgagor shall without demand forthwith make
good the deficiency. Failure to do so before the due date of such item shall be
a default hereunder. In case of termination of the Contract of Mortgage
Insurance by prepayment of the mortgage in full, or otherwise (except as
hereinafter provided), accumulations under (a) of’ paragraph 11 hereof not
required to meet payments due under the Contract of Mortgage Insurance, shall be
credited to the Mortgagor. If the property is sold under foreclosure or is
otherwise acquired by the Mortgagee after default, any remaining balance of the
accumulations under (b) of paragraph 11 shall be credited to the principal of
the mortgage as of the date of commencement of foreclosure proceedings or as of
the date the property is otherwise acquired; and accumulations under (a) of
paragraph 11 shall be similarly applied unless required to pay sums due the
Secretary of Housing and Urban Development, acting by and through the Federal
Housing Commissioner under the Contract of Mortgage Insurance,

 

13.  That it will pay all taxes, assessments, water rates, and other
governmental or municipal charges, fines or impositions, for which provision has
not been made theretofore by deposits with Mortgagee, and in default thereof the
Mortgagee may pay the same; and that it will promptly deliver the official
receipts therefor to the Mortgagee;

 

14.  That the Mortgagor will give immediate notice by mail to the Mortgagee and
the Secretary of Housing and Urban Development, acting by and through the
Federal Housing Commissioner of any fire damage or other casualty to the
premises;

 

15.  That no waiver of any covenant herein or of the note secured hereby shall
at any time thereafter be held to be a waiver of the terms hereof or of the note
secured hereby;

 

16.  That all payments made by the Mortgagee to remedy a default by the
Mortgagor as aforesaid and the total of any payment or payments due from the
Mortgagor to the Mortgagee and default shall be added to the debt secured by
this mortgage and shall be re- paid to the Mortgagee upon demand. Any such sum
and interest thereon at the rate specified in the note shall be a lien on the
premises, prior to any other lien attaching or accruing subsequent to the lien
of this mortgage;

 

17.  That it will not voluntarily create or permit to be created against the
property subject to this mortgage any lien or liens inferior or superior to the
lien of this mortgage, and further it will keep and maintain the same free from
the claim of all persons supplying labor or materials which will enter into the
construction of any and all buildings now being erected or to be erected on said
premises;

 

18.  In the event the Mortgagor shall at any time fail to comply with such
rules, regulations, and ordinances which are now or may hereafter become
applicable to the premises above described, after due notice and demand by the
Mortgagee, thereupon the principal sum and all arrears of interest and other
charges provided for herein, shall at the option of the Mortgagee become due and
payable;

 

20.  The Mortgagor hereby represents and warrants that no work has been
commenced or materials furnished to or in connection with any improvements on
the mortgaged premises at the date hereof and will not be commenced or furnished
until after the date of the recording of this mortgage;

 

And the parties hereto further agree that the addresses of the Mortgagor and the
Mortgagee are correctly stated in this mortgage;

 

21.  The Mortgagee hereby covenants that upon compliance with all covenants and
agreements by the Mortgagor, it will disburse the entire principal amount of the
mortgage debt to, or for the account of, the Mortgagor;

 

22.  That in the event of default in making any monthly payment provided for
herein or in the note secured hereby, and if such default is not made good prior
to the due date of the next such installment, or in the event of a breach of any
other stipulations, agreements, conditions and covenants of this mortgage; then
in either or any such event, the said aggregate sum mentioned in said note then
remaining unpaid, with interest accrued to that time, and all moneys secured
hereby, shall become due and payable forthwith, or thereafter, at the option of
said Mortgagee, as fully and completely as if all of the said sums of money were
originally stipulated to be paid on such day, anything in said note or in this
mortgage to the contrary notwithstanding; and thereupon or thereafter, at the
option of said Mortgagee, without notice or demand, suit at law or in equity,
may be prosecuted as if all moneys secured hereby had matured prior to its
institution. The Mortgagee may foreclose this mortgage, as to the amounts so
declared due and payable, and the said premises shall be sold to satisfy and pay
the same together with costs, expenses, and allowances;

 

23.  The covenants herein contained shall bind, and the benefits and advantages
shall inure to, the respective successors and assigns of the parties hereto.
Whenever used, the singular number shall include the plural;

 

24.  That so long as the Mortgage Deed and the said note secured hereby are
insured or held by the Secretary of Housing and Urban development under the
provisions of the National Housing Act, it will not execute or file for record
any instrument which imposes a restriction upon the sale or occupancy of the
mortgaged property on the basis of race, color, creed or nation origin.

 

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25.  Notwithstanding any other provision contained herein or in the Note, it is
agreed that the execution of the Note shall impose no personal liability upon
the Mortgagor for payment of the indebtedness evidenced thereby and in the event
of a default, the holder of the Note shall look solely to the “Collateral”
(defined below) in satisfaction of the indebtedness evidenced by the Note and
will not seek or obtain any deficiency or personal judgment against the
Mortgagor except such judgment or decree as may be necessary to foreclose and/or
bar its interest in the Collateral, provided, that nothing in this condition and
no action so taken shall operate to impair any obligation of the Mortgagor under
the Regulatory Agreement herein referred to and made a part hereof. As used
herein, “Collateral” shall mean and include (i) the property subject to this
Mortgage Deed and to the rents, issues and profits thereof; (ii) the tangible
and intangible property described in any and all security agreements (whether
executed by the Mortgagor, any lessee or operator of the property or any portion
thereof, or any other party) which now or hereafter secure this Note and the
proceeds and products thereof; (iii) any and all escrows and reserves now or
hereafter required by the Mortgagee and/or the Secretary of Housing and Urban
Development in connection with the property subject to this Mortgage Deed
(including, to the extent applicable, replacement reserves accounts, residual
receipts accounts, escrows for insurance premiums, mortgage insurance premiums,
ground rents, taxes, assessments, utility charges and other impositions, and
escrows for working capital, operating deficits, repairs, latent defects, and
offsite improvements); and (iv) any and all property now or hereafter mortgaged,
pledged, conveyed or assigned to secure payment of the Note and the rents,
issues, profits, proceeds and products thereof.

 

This Mortgage Deed shall be construed according to the laws of the State of
Ohio.

 

IN WITNESS WHEREOF, the said Mortgagor has caused these presents to be signed in
its name by its Secretary, as of the 1st day of January, 2012.

 

 

 

 

HEARTH & HOME OF VANDALIA, INC.

 

 

an Ohio corporation

 

 

 

 

 

 

By:

/s/ David A. Tenwick

 

 

 

David A. Tenwick

 

 

 

Secretary

 

 

 

 

 

 

 

 

ACKNOWLEDGEMENT

 

 

 

 

 

 

 

 

STATE OF OHIO

)

 

 

 

) SS:

 

 

COUNTY OF Franklin

)

 

 

 

The foregoing instrument was acknowledged before me this 26 day of January, 2012
by David A Tenwick, Secretary of HEARTH & HOME OF VANDALIA, INC., an Ohio
corporation, on behalf of said company.

 

[SEAL]

 

 

[g88401kei001.jpg]

 

John P. Wilkerson

 

 

JOHN P. WILKERSON, Attorney At Law

 

 

 

NOTARY PUBLIC, STATE OF OHIO

Notary Public

 

 

My commission has no expiration date.

 

 

 

Section 147.03 R.C.

My Commission Expires:

 

 

 

 

STATE OF OHIO

 

LOAN NO. 046-43057

 

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Mortgage Deed

 

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HEARTH & HOME OF VANDALIA, INC.

 

TO

 

RED MORTGAGE CAPITAL, LLC

 

Received for record this                 day of                               ,
2012 at          o’clock            m., and recorded                           ,
2012, in vol.          of Mortgages, at pages                   of the records
of Montgomery                    County, Ohio.

 

Recorder of Montgomery County, Ohio

 

HUD-94165B (10-82)

 

4

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