Exhibit 10.2

 

FHA FORM NO. 4165-D

 

 

(CORPORATE)

 

 

Rev. November 1974

 

 

 

 

MORTGAGE NOTE

 

$3,721,500.00

Vandalia, Ohio
as of January 1, 2012

 

FOR VALUE RECEIVED, the undersigned; HEARTH & HOME OF VANDALIA, INC. an Ohio
corporation, promises to pay to RED MORTGAGE CAPITAL, LLC, a Delaware limited
liability company, or order, at its principal place of business at Two Miranova
Place, 12th Floor, Columbus, Ohio 43215 or at such other place as may be
designated in writing by the Holder of this Mortgage Note, the principal sum of
THREE MILLION SEVEN HUNDRED TWENTY-ONE THOUSAND FIVE HUNDRED AND 00/100THS
DOLLARS ($3,721,500.00), with interest thereon from the date hereof at the rate
of Three and Seventy Four Hundredths per centum (3.74%) per annum on the unpaid
balance until paid. The principal and interest shall be payable in monthly
installments as follows:

 

Interest alone shall be due and payable on the first day of February, 2012.
Thereafter, commencing on the first day of March, 2012, installments of
principal and interest shall be due and payable in the sum of Seventeen Thousand
Four Hundred Fifty Three and 72/100ths Dollars ($17,453.72) each, such payments
to continue monthly thereafter on the first day of each succeeding month until
the entire indebtedness has been paid in full. In any event, the balance of
principal (if any) remaining unpaid, plus accrued interest, shall be due and
payable on May 1, 2041. The installments of principal and interest shall be
applied first to interest at the rate aforesaid upon the principal sum or so
much thereof as shall from time to time remain unpaid, and the balance thereof
shall be applied on account of principal.

 

This Mortgage Note is secured by a Mortgage Deed upon real estate in Vandalia,
Montgomery County, Ohio, and is to be construed according to the laws of the
State of Ohio.

 

If default be made in the payment of any installment under this Mortgage Note,
and if such default is not made good prior to the due date of the next such
installment, the entire principal sum and accrued interest shall at once become
due and payable without notice, at the option of the Holder of this Mortgage
Note. Failure to exercise this option shall not constitute a waiver of the right
to exercise the same in the event of any subsequent default. In the event of
default in the payment of this Mortgage Note, and if the same is collected by an
attorney at law, the undersigned hereby agree(s) to pay all costs of collection,
including a reasonable attorney’s fee.

 

In the event any installment or part of any installment due hereunder becomes
delinquent for more than fifteen (15) days, there shall be due, at the option of
the Holder, in addition to other sums due hereunder, a sum equal to two percent
(2%) of the amount of such delinquent installment (including principal and
interest). Late charges must be separately charged to and collected from the
Maker and cannot be deducted from any regular monthly installment, or collected
from any reserve, escrow, residual receipts funds, or from any interest accruals
thereto. Whenever under the law of the jurisdiction where the property is
located, the amount of any such late charge is considered to be additional
interest, this provision shall not be effective if the rate of interest
specified in this Note, together with the amount of the late charge, would
aggregate an amount in excess of the maximum rate of interest permitted and
would constitute usury.

 

Prepayment of this Mortgage Note is subject to the terms and provisions set
forth in the Allonge #1 attached hereto and incorporated herein by this
reference.

 

All parties to this Mortgage Note, whether principal, surety, guarantor, or
endorser hereby waive presentment for payment, demand, protest, notice of
protest, and notice of dishonor.

 

Notwithstanding any other provision contained in this Note, it is agreed that
the execution of this Note shall impose no personal liability on the Maker
hereof for payment of the indebtedness evidenced hereby and in the event of a
default, the Holder of this Note shall look

 

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solely to the “Collateral” (defined below) in satisfaction of the indebtedness
evidenced hereby and will not seek or obtain any deficiency or personal judgment
against the Maker hereof except such judgment or decree as may be necessary to
foreclose and/or bar its interest in the Collateral except as set out in the
Mortgage Deed of even date given to secure this Note. As used herein,
“Collateral” shall mean and include (i) the property subject to the 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 Maker, any lessee or operator of the property that is subject to
the Mortgage Deed 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 Holder of this Note
and/or the Secretary of Housing and Urban Development in connection with the
property subject to the 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 this Note and the rents, issues, profits, proceeds and products
thereof.

 

Signed and sealed as of the day and year first above written.

 

 

HEARTH & HOME OF VANDALIA, INC.

 

an Ohio corporation

 

 

 

 

By:

 /s/ David A. Tenwick

 

 

David A. Tenwick

 

 

Secretary

 

 

ACKNOWLEDGMENT

 

THIS IS TO CERTIFY that this is the Mortgage Note described in and secured by a
Mortgage Deed of even date herewith and in the same principal amount as herein
stated and secured by real estate situated in Vandalia, Montgomery County, Ohio.

 

Dated as of this 26 day of January, 2012.

 

[SEAL]

 

/s/ John P. Wilkerson

 

 

Notary Public

My Commission Expires:

 

 

 

 

[NOTE PANEL ON THE FOLLOWING PAGE]

 

 

[g88401kgi001.jpg]

 

JOHN P. WILKERSON, Attorney At Law

 NOTARY PUBLIC, STATE OF OHIO

 My commission has no expiration date.

           Section 147.03 R.C.

 

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STATE OF OHIO
LOAN NO. 046-43057

 

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Mortgage Note

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HEARTH & HOME OF VANDALIA, INC.

 

TO

 

RED MORTGAGE CAPITAL, LLC

 

No. 046-43057

 

Insured under §232/223(a)(7) of the National Housing Act and Regulations
thereunder

 

In effect on November 30, 2011.

 

A total sum of $3,721,500.00 has been approved for Insurance hereunder by the
Secretary of Housing and Urban Development acting by and through the Federal
Housing Commissioner

 

By

 

 

 

(Authorized Agent)

 

 

 

 

Date

January       , 2012

 

 

 

 

 

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*For purposes of compliance with Section 223(a)(7)(A)(iv) of the National
Housing Act, the contract of mortgage insurance regarding FHA Project
No. 046-43044 is transferred to FHA Project No. 046-43057, and said contract of
mortgage insurance is hereby amended to reflect the terms, conditions and
provisions of the FHA Firm Commitment for Project No. 046-43057 dated
November 30, 2011, and the National Housing Act as evidenced by the Federal
Housing Commissioner’s endorsement for insurance of this Deed of Trust Note
dated as of January 1, 2012, executed by HEARTH & HOME OF VANDALIA, INC., an
Ohio corporation, (Maker), and payable to RED MORTGAGE CAPITAL, LLC, in the
amount of $3,721,500.00

 

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ALLONGE #1
TO MORTGAGE NOTE OF
HEARTH & HOME OF VANDALIA, INC. (“Maker”)
TO
RED MORTGAGE CAPITAL, LLC (“Holder”)
IN THE ORIGINAL PRINCIPAL SUM OF $3,721,500.00
DATED AS OF January 1, 2012

 

1.             This Allonge #1 to Mortgage Note (this “Allonge”) is attached to
and made a part of the Mortgage Note from HEARTH & HOME OF VANDALIA, INC. (the
“Maker”), to RED MORTGAGE CAPITAL, LLC (the “Holder”) dated as of January 1,
2012 (the “Note”).

 

2.             Except as provided in Paragraphs 3, and 4 below, Maker may not
prepay any sums due under this Mortgage Note (the “Note”) prior to March 1,
2014. Commencing on March 1, 2014, Maker may prepay, upon thirty (30) days
advance written notice to the Holder, the indebtedness evidenced by this Note,
in whole or in an amount equal to one or more monthly installments of the
principal next due, on the last day of any month, provided such prepayment is
accompanied by the applicable prepayment premium (expressed as a percentage of
the principal amount so prepaid) set forth below:

 

Prepayment Period

 

Prepayment Premium

 

 

 

 

 

March 1, 2014 through February 28, 2015

 

8

%

March 1, 2015 through February 29, 2016

 

7

%

March 1, 2016 through February 28, 2017

 

6

%

March 1, 2017 through February 28, 2018

 

5

%

March 1, 2018 through February 28, 2019

 

4

%

March 1, 2019 through February 29, 2020

 

3

%

March 1, 2020 through February 28, 2021

 

2

%

March 1, 2021 through February 28, 2022

 

1

%

March 1, 2022 and thereafter

 

None

 

 

All such prepayments, including the principal sum so prepaid, interest thereon
to and including the date of such prepayment and the prepayment premium due in
connection therewith, shall be in immediately available Federal Funds.

 

3.             Notwithstanding any prepayment prohibition imposed and/or premium
required by Paragraph 2 of this Allonge #1 with respect to voluntary prepayments
made prior to March 1, 2021, the indebtedness may be prepaid in part or in full
on the last or first day of any calendar month without the consent of the Holder
and without prepayment premium if HUD determines that prepayment will avoid a
mortgage insurance claim and is therefore in the best interest of the Federal
Government.

 

4.             The provisions of Paragraph 2 of this Allonge #1 shall not apply
and no prepayment premium shall be collected by the Holder with respect to any
prepayment which is made by or on behalf of Maker from insurance proceeds as a
result of damage to the property or condemnation awards which may, at the option
of the Holder, be applied to reduce the indebtedness evidenced by the Note
pursuant to the terms of the Mortgage given of even date to secure the
indebtedness evidenced by the Note.

 

5.             If any partial prepayment occurs as provided in Paragraph 3
hereof, the remaining payments due on this Note may, at the option of the Holder
and with the consent of the Commissioner, be recast such that required monthly
payments of principal and interest shall be in equal amounts sufficient to
amortize the balance then due under this Note over the remaining term thereof.

 

[SIGNATURE FOLLOWS ON SUCCEEDING PAGE]

 

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SIGNATURE PAGE TO ALLONGE #1 TO MORTGAGE NOTE OF HEARTH & HOME
OF VANDALIA, INC. (“Maker”) TO RED MORTGAGE CAPITAL, LLC (“Holder”)

 

 

 

MAKER:

 

 

 

HEARTH & HOME OF VANDALIA, INC.

 

an Ohio corporation

 

 

 

By:

/s/ David A. Tenwick

 

 

David A. Tenwick

 

 

 

 

 

END OF ALLONGE #1

 

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