EXHIBIT 10.3

THE PROPER FLORIDA DOCUMENTARY STAMP AND INTANGIBLE TAXES HAVE BEEN PAID ON THIS
NOTE AND EVIDENCE OF SUCH PAYMENT APPEARS ON THE MORTGAGE, ASSIGNMENT OF RENTS,
SECURITY AGREEMENT AND FIXTURE FILING EXECUTED OF EVEN DATE HEREWITH AND
CURRENTLY BEING RECORDED IN THE PUBLIC RECORDS OF HILLSBOROUGH COUNTY, FLORIDA.

PROMISSORY NOTE

U.S. $5,000,000.00

August 31, 2018

 

FOR VALUE RECEIVED, CHP II RIVERVIEW FL OWNER, LLC, a Delaware limited liability
company and CHP II RIVERVIEW FL TENANT, LLC, a Delaware limited liability
company (jointly and severally, individually, each and/or together, “Borrower”),
both having an address at 450 South Orange Avenue, Orlando, Florida 32801,
hereby promises to pay to the order of FLORIDA COMMUNITY BANK, N.A., a national
banking association (“Lender”), having an address at 369 N. New York Avenue,
Winter Park, Florida 32789, the principal sum of $5,000,000.00 or so much
thereof as may be advanced from time to time, and interest from the date hereof
on the balance of principal from time to time outstanding, in United States
currency, at the rates and at the times hereinafter described.

This Note is issued by Borrower pursuant to a Loan Agreement executed of even
date herewith between Lender and Borrower (the “Loan Agreement”).  This Note
evidences the Loan (as defined in the Loan Agreement).  Capitalized terms used
and not otherwise defined herein shall have the meanings given to them in the
Loan Agreement.

1.Interest.  Interest shall be charged on the outstanding principal balance of
this Note at a rate equal to 1-month LIBOR plus the Libor Margin (as hereinafter
defined) (the “LIBOR-Based Rate”), as determined by Lender prior to the
commencement of each Interest Period (as hereinafter defined) and adjusted
monthly on each Payment Date (as hereinafter defined).  Interest shall be
calculated daily on the basis of the actual number of days elapsed over a 360
day year.

“Interest Period” means, initially, the period commencing on (and including) the
date hereof and ending on (but excluding) the first Payment Date, and
thereafter, each period commencing on (and including) the last day of the
immediately preceding Interest Period and ending on (but excluding) the next
Payment Date, provided, (i) any Interest Period that would otherwise end on (but
exclude) a day which is not a New York business day shall be extended to the
next succeeding New York business day, unless such extension would carry such
Interest Period into the next month, in which event such Interest Period shall
end on (but exclude) the preceding New York business day; (ii) any Interest
Period that ends in a month for which there is no day which numerically
corresponds to the Payment Date shall end on (but exclude) the last New York
business day of such month; and (iii) any Interest Period that would otherwise
extend past the Maturity Date (as hereinafter defined) shall end on (but
exclude) the Maturity Date.

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“LIBOR” means, with respect to each day during each Interest Period, the rate
for U.S. dollar deposits of that many months maturity as reported on Reuters
Screen LIBOR01 Page (or the successor thereto), as of 11:00 a.m., London time,
on the second London business day before the relevant Interest Period begins (or
if not so reported, then as reasonably determined by the Lender from another
recognized source or interbank quotation).

“Libor Margin” shall mean 2.25%.

Throughout the term of this Note, Borrower will have the option to hedge the
floating LIBOR-Based Rate interest expense by entering into an interest rate
swap agreement (“Interest Rate Hedge”) with Lender or another counterparty
acceptable to Lender.  The Lender is willing to provide this Interest Rate Hedge
to Borrower upon mutually agreeable terms.  The actual fixed rate applicable to
such Interest Rate Hedge is subject to market conditions at the time of the
Interest Rate Hedge is consummated.  Any Interest Rate Hedge with the Lender
will be governed by an ISDA Master Agreement and will be secured by the Mortgage
and guaranteed by the Guarantor.

In the event LIBOR ceases to exist or becomes unavailable during the term of
this Loan, Lender may designate a substitute index and modify the LIBOR Margin
above or below the newly designated index to equate to the interest rate in
effect pursuant to this Note, immediately prior to such newly designated
interest rate taking effect, and such LIBOR Margin shall remain in effect over
and above the newly designated index throughout the life of the loan.  Lender
shall notify Borrower of any change in the index and the applicable LIBOR Margin
prior to the modification.

From and after the Maturity Date or from and during the continuance of an Event
of Default hereunder, irrespective of any declaration of maturity, all amounts
remaining unpaid or thereafter accruing hereunder, shall, at Lender’s option,
bear interest at a default rate of ten percent (10%) per annum above the
interest rate then in effect as set forth herein (the “Default Rate”), or the
highest permissible rate under applicable usury law, whichever is less.  Such
default rate of interest shall be payable upon demand, but in no event later
than when scheduled interest payments are due, and shall also be charged on the
amounts owed by Borrower to Lender pursuant to any judgments entered in favor of
Lender with respect to this Note.

2.Monthly Payments.  Interest only on the outstanding principal balance shall be
due and payable monthly in arrears commencing on September 15, 2018 and
continuing on the fifteenth (15th) day of each month thereafter (each, a
“Payment Date”) through the Payment Date occurring on September 15, 2020 (the
“I/O Expiration Date”).  Commencing on the Payment Date occurring October 15,
2020, and continuing on each Payment Date thereafter, equal monthly installments
of principal plus accrued interest shall be due and payable, whereby the monthly
principal payment shall be calculated by Lender as the average of the first 36
months of principal payments derived from a mortgage style amortization of the
outstanding principal balance of this Note as of the I/O Expiration Date,
amortized over a 360 month period at an assumed interest rate of 5.50% (the
“Monthly Principal Payment”).  Additionally, should Borrower request and receive
the Additional Advance (as set forth under Section 4.1(c) of the Loan Agreement)
after the I/O Expiration Date, then Lender will recalculate the Monthly
Principal Payment as the average of the principal payments for all months
between the date of the disbursement of the Additional Advance and the Maturity
Date (as defined below), derived from a mortgage style amortization of the
outstanding principal balance of this Note as increased by the Additional
Advance, amortized over a 360 month period less the number of full months
between the I/O Expiration Date and the date

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of the disbursement of the Additional Advance, at an assumed interest rate of
5.50%, with the increased Monthly Principal Payment plus accrued interest due
the 15th of the next month following disbursement of the Additional
Advance.  Notwithstanding anything contained herein to the contrary, the entire
principal balance of this Note then unpaid, together with all accrued and unpaid
interest and all other amounts payable hereunder and under the other Loan
Documents (as hereinafter defined), shall be due and payable in full on August
31, 2023 (the “Maturity Date”).

Borrower shall enroll in the Lender’s auto pay program, and all periodic
payments of principal and interest (during the any extension periods as well as
the initial term) shall be made by direct charge to Borrower.

3.Tender and Application of Payments; Dishonored Payment Fee.  All payments on
this Note are payable on or before 2:00 p.m. on the due date thereof, at the
office of Lender specified above and shall be credited on the date the funds
become available lawful money of the United States.  All sums payable to Lender
which are due on a day on which Lender is not open for business shall be paid on
the next succeeding business day and such extended time shall be included in the
computation of interest.  Except as otherwise specified herein, each payment or
prepayment, if any, made under this Note shall be applied to pay late charges,
accrued and unpaid interest, principal, escrows (if any), and any other
outstanding fees, costs and expenses which Borrower is obligated to pay under
this Note, in such order as Lender may elect from time to time in its sole
discretion.

In the event any payment due hereunder is dishonored for any reason, in addition
to the amount of the payment dishonored, Borrower shall pay a fee to Lender in
the amount of $31.00, which fee shall be due and payable within five (5) days
from receipt by the Borrower of notice from the Lender that the payment has been
dishonored.

4.Late Charge.  In the event that any installment of principal or interest
(other than the final payment due on the Maturity Date) required to be made by
Borrower under this Note shall not be received by Lender within ten (10) days
after its due date, Borrower shall pay to Lender, on demand, a late charge of
five percent (5%) of such delinquent payment.  The foregoing right is in
addition to, and not in limitation of, any other rights which Lender may have
upon Borrower’s failure to make timely payment of any amount due hereunder.

5.Prepayment.  The principal amount of this Note may be prepaid in whole or in
part at any time, and from time to time, without premium or penalty.  Any
prepayment shall include accrued and unpaid interest to the date of prepayment
on the principal amount prepaid and all other sums due and payable hereunder.

6.Security for this Note.  This Note is executed and delivered in accordance
with a commercial transaction described herein.  As security for the payment of
the monies owing under this Note, Borrower has delivered or has caused to be
delivered to Lender the following (each a “Loan Document” and collectively with
this Note, the Loan Agreement, and any other guaranty, document, certificate or
instrument executed by Borrower or any other obligated party in connection with
the Loan, together with all amendments, modifications, renewals or extensions
thereof, the “Loan Documents”): (a) a Mortgage, Assignment of Rents, Security
Agreement and Fixture Filing executed of even date herewith by Borrower in favor
of Lender (the “Mortgage”) on certain real property and the improvements
situated thereon in Hillsborough County, Florida,

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as more fully described in the Mortgage (the “Property”); (b) a Collateral
Assignment of Leases and Rents (the “Assignment of Leases”) assigning all of the
assignors’ rights as lessors under all leases affecting the Property; and (c) a
Payment Guaranty executed of even date herewith by CNL HEALTHCARE PROPERTIES II,
INC., a Maryland corporation (the “Guarantor”), in favor of Lender (the
“Guaranty”).

7.Events of Default.  Each of the following shall constitute an event of default
hereunder (an “Event of Default”):  (a) the failure of Borrower to pay the final
payment of principal and interest due on the Maturity Date; or (b) the failure
of Borrower to pay any amount of principal or interest hereunder (other than the
final payment due on the Maturity Date) within ten (10) days after the date when
due and payable; or (c) the occurrence of any other default in any term,
covenant or condition hereunder which is not cured within any applicable notice
and cure period, or any Event of Default under the Mortgage or any other Loan
Document.  If an Event of Default exists and remains uncured, Lender may
exercise any right, power or remedy permitted by law or as set forth herein or
in the Mortgage or any other Loan Document including, without limitation, the
right to declare the entire unpaid principal amount hereof and all interest
accrued hereon, and all other sums secured by the Mortgage or any other Loan
Document, to be, and such principal, interest and other sums shall thereupon
become, immediately due and payable.

8.General Provisions.

(a)Borrower agrees that the obligation evidenced by this Note is an exempt
transaction under the Truth‑in‑Lending Act, 15 U.S.C. § 1601, et seq.

(b)The parties hereto intend and believe that each provision in this Note
comports with all applicable local, state and federal laws and judicial
decisions.  However, if any provision or provisions, or if any portion of any
provision or provisions, in this Note is found by a court of law to be in
violation of any applicable local, state or federal ordinance, statute, law,
administrative or judicial decision, or public policy, and if such court should
declare such portion, provision or provisions of this Note to be illegal,
invalid, unlawful, void or unenforceable as written, then it is the intent of
all parties hereto that such portion, provision or provisions shall be given
force to the fullest possible extent that they are legal, valid and enforceable,
that the remainder of this Note shall be construed as if such illegal, invalid,
unlawful, void or unenforceable portion, provision or provisions were not
contained therein, and that the rights, obligations and interest of Borrower and
the holder or holders hereof under the remainder of this Note shall continue in
full force and effect.  All agreements herein are expressly limited so that in
no contingency or event whatsoever, whether by reason of advancement of the
proceeds hereof, acceleration of maturity of the unpaid principal balance
hereof, or otherwise, shall the amount paid or agreed to be paid to the holders
hereof for the use, forbearance or detention of the money to be advanced
hereunder exceed the highest lawful rate permissible under applicable usury
laws.  If, from any circumstances whatsoever, the fulfillment of any provision
hereof, at the time performance of such provision shall be due, shall involve
transcending the limit of validity prescribed by law which a court of competent
jurisdiction may deem applicable hereto, then, ipso facto, the obligation to be
fulfilled shall be reduced to the limit of such validity and if from any
circumstance the holder hereof shall 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 unpaid principal balance due
hereunder and not to the payment of interest.

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(c)This Note and all provisions hereof shall be binding upon Borrower and all
persons claiming under or through Borrower, and shall inure to the benefit of
Lender, together with its successors and assigns, including each owner and
holder from time to time of this Note.

(d)Time is of the essence as to all dates set forth herein.

(e)Borrower agrees that its liability shall not be in any manner affected by any
indulgence, extension of time, renewal, waiver, or modification granted or
consented to by Lender; and Borrower consents to any indulgences and all
extensions of time, renewals, waivers, or modifications that may be granted by
Lender with respect to the payment or other provisions of this Note, and to any
substitution, exchange or release of the collateral, or any part thereof, with
or without substitution, and agrees to the addition or release of any makers,
endorsers, guarantors, or sureties, all whether primarily or secondarily liable,
without notice to Borrower and without affecting its liability hereunder.

(f)Borrower hereby waives and renounces for itself, its successors and assigns,
all rights to the benefits of any statute of limitations and any moratorium,
reinstatement, marshalling, forbearance, valuation, stay, extension, redemption,
appraisement, or exemption and homestead laws now provided, or which may
hereafter be provided, by the laws of the United States and of any state thereof
against the enforcement and collection of the obligations evidenced by this
Note.

(g)If this Note is placed in the hands of attorneys for collection or is
collected through any legal proceedings, Borrower promises and agrees to pay, in
addition to the principal, interest and other sums due and payable hereon, all
reasonable costs of collecting or attempting to collect this Note, including
attorneys’ fees and disbursements.

(h)All parties now or hereafter liable with respect to this Note, whether
Borrower, principal, surety, guarantor, endorsee or otherwise hereby severally
waive presentment for payment, demand, notice of nonpayment or dishonor, protest
and notice of protest.  No failure to accelerate the indebtedness evidenced
hereby, acceptance of a past due installment following the expiration of any
cure period provided by this Note, any Loan Document or applicable law, or
indulgences granted from time to time shall be construed (i) as a novation of
this Note or as a reinstatement of the indebtedness evidenced hereby or as a
waiver of such right of acceleration or of the right of Lender thereafter to
insist upon strict compliance with the terms of this Note, or (ii) to prevent
the exercise of such right of acceleration or any other right granted hereunder
or by the laws of the State.  Borrower hereby expressly waives the benefit of
any statute or rule of law or equity now provided, or which may hereafter be
provided, which would produce a result contrary to or in conflict with the
foregoing.

(i)This Note shall be governed by, and construed in accordance with, the laws of
the State of Florida and any applicable laws of the United States of America.

(j)BORROWER AND LENDER AGREE THAT, TO THE EXTENT PERMITTED BY APPLICABLE LAW,
ANY SUIT, ACTION OR PROCEEDING, WHETHER CLAIM OR COUNTERCLAIM, BROUGHT BY LENDER
OR BORROWER, ON OR WITH RESPECT TO THIS NOTE OR THE DEALINGS OF THE PARTIES WITH
RESPECT HERETO, SHALL BE TRIED ONLY BY A COURT AND NOT BY A JURY.  LENDER AND

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BORROWER EACH HEREBY KNOWINGLY, VOLUNTARILY, INTENTIONALLY AND INTELLIGENTLY AND
WITH THE ADVICE OF THEIR RESPECTIVE COUNSEL, WAIVE, TO THE EXTENT PERMITTED BY
APPLICABLE LAW, ANY RIGHT TO A TRIAL BY JURY IN ANY SUCH SUIT, ACTION OR
PROCEEDING.  FURTHER, BORROWER WAIVES ANY RIGHT IT MAY HAVE TO CLAIM OR RECOVER,
IN ANY SUCH SUIT, ACTION OR PROCEEDING, ANY SPECIAL, EXEMPLARY, PUNITIVE,
CONSEQUENTIAL OR OTHER DAMAGES OTHER THAN, OR IN ADDITION TO, ACTUAL
DAMAGES.  BORROWER ACKNOWLEDGES AND AGREES THAT THIS SECTION IS A SPECIFIC AND
MATERIAL ASPECT OF THIS NOTE AND THAT LENDER WOULD NOT EXTEND CREDIT TO BORROWER
IF THE WAIVERS SET FORTH IN THIS SECTION WERE NOT A PART OF THIS NOTE.

(k)If more than one person or entity executes this Promissory Note, such persons
or entities shall be jointly and severally liable hereunder.

[Signature page to follow]

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IN WITNESS WHEREOF, Borrower has executed and delivered this Promissory Note as
of the day and year first set forth above.

 

BORROWER:

 

CHP II RIVERVIEW FL OWNER, LLC,

a Delaware limited liability company

 

 

By: /s/ Brett S. Bryant

Name:  Brett S. Bryant

Its: Vice President

 

 

 

 

 

 

CHP II RIVERVIEW FL TENANT, LLC,

a Delaware limited liability company

 

By: /s/ Brett S. Bryant

Name:  Brett S. Bryant

Its: Vice President

 

 

 

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STATE OF FLORIDA

COUNTY OF ORANGE

The foregoing instrument was acknowledged before me this 27th day of August,
2018, by Brett S. Bryant, as Vice President of CHP II RIVERVIEW FL OWNER, LLC, a
Delaware limited liability company, on behalf of the company.

 

/s/ Cathleen A. Coffey

Signature of Notary Public

 

Cathleen A. Coffey

(Print Notary Name)

AFFIX NOTARY STAMP

My Commission Expires: 9/24/2021

Commission No.: GG 138618

☒ Personally known, or

☐ Produced Identification

Type of Identification Produced:

 

 

 

 

STATE OF FLORIDA

COUNTY OF ORANGE

The foregoing instrument was acknowledged before me this 27th day of August,
2018, by Brett S. Bryant, as Vice President of CHP II RIVERVIEW FL TENANT, LLC,
a Delaware limited liability company, on behalf of the company.

 

/s/ Cathleen A. Coffey

Signature of Notary Public

 

Cathleen A. Coffey

(Print Notary Name)

AFFIX NOTARY STAMP

My Commission Expires: 9/24/2021

Commission No.: GG 138618

☒ Personally known, or

☐ Produced Identification

Type of Identification Produced:

 

 

 

 

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