Document:

ex108502.htm

 

 

 

 

 

MULTIFAMILY NOTE

	
US $7,800,000.00

	
March 31, 2011

FOR VALUE RECEIVED, the undersigned ("Borrower") jointly and severally (if more than one) promises to pay to the order of KEYCORP REAL ESTATE CAPITAL MARKETS, INC., an Ohio corporation, the principal sum of Seven Million Eight Hundred Thousand and No/100 Dollars (US $7,800,000.00), with interest accruing at the Interest Rate on the unpaid principal balance from the Disbursement Date until fully paid.

1.           Defined Terms.  In addition to defined terms found elsewhere in this Note, as used in this Note, the following definitions shall apply:

	
  

	
Amortization Period:  360 months.

Business Day:  Any day other than a Saturday, Sunday or any other day on which Lender is not open for business.

Debt Service Amounts:  Amounts payable under this Note, the Security Instrument or any other Loan Document.

Default Rate:  A rate equal to the lesser of 4 percentage points above the Interest Rate or the maximum interest rate which may be collected from Borrower under applicable law.

Disbursement Date:  The date of disbursement of Loan proceeds hereunder.

First Payment Date:  The first day of May, 2011.

Indebtedness: The principal of, interest on, or any other amounts due at any time under, this Note, the Security Instrument or any other Loan Document, including prepayment premiums, late charges, default interest, and advances to protect the security of the Security Instrument under Section 12 of the Security Instrument.

	
  

	
Interest Rate:  The annual rate of six and forty-three hundredths percent (6.43%).

Lender: The holder of this Note.

Loan: The loan evidenced by this Note.

Loan Term:  120 months.

Maturity Date:  The first day of April, 2021, or any earlier date on which the unpaid principal balance of this Note becomes due and payable by acceleration or otherwise.

Property Jurisdiction:  The jurisdiction in which the Land is located.

  

	
Multifamily Non-Recourse Fixed Rate Note – Louisiana

	
Form 4119

	
Page 1

	
Fannie Mae

	
08-09

	
© 1997-2009 Fannie Mae

  

Security Instrument:  A multifamily mortgage, deed to secure debt or deed of trust dated as of the date of this Note.

Yield Maintenance Period Term or Prepayment Premium Period Term:  114 months.

Yield Maintenance Period End Date or Prepayment Premium Period End Date:  The last day of September, 2020.

Event of Default, Key Principal and other capitalized terms used but not defined in this Note shall have the meanings given to such terms in the Security Instrument.

2.           Address for Payment.  All payments due under this Note shall be payable at P.O. Box 145404, Cincinnati, Ohio 45250, or such other place as may be designated by written notice to Borrower from or on behalf of Lender.

3.           Payment of Principal and Interest.  Principal and interest shall be paid as follows:

(a)          Short Month Interest.  If disbursement of principal is made by Lender to Borrower on any day other than the first day of the month, interest for the period beginning on the Disbursement Date and ending on and including the last day of the month in which such disbursement is made shall be payable simultaneously with the execution of this Note.

	
    (b)

	
Interest Computation.  Interest under this Note shall be computed on the basis of (check one only):

    o     30/360.  A 360-day year consisting of twelve 30-day months.

	
  

	 x	
Actual/360.  A 360-day year.  The amount of each monthly payment made by Borrower pursuant to Paragraph 3(c) below that is allocated to interest will be based on the actual number of calendar days during such month and shall be calculated by multiplying the unpaid principal balance of this Note by the per annum Interest Rate, dividing the product by 360 and multiplying the quotient by the actual number of days elapsed during the month.  Borrower understands that the amount allocated to interest for each month will vary depending on the actual number of calendar days during such month.

(c)          Monthly Installments.  Consecutive monthly installments of principal and interest, each in the amount of Forty-Eight Thousand Nine Hundred Forty-Two and 78/100 Dollars (US $48,942.78), shall be payable on the First Payment Date and on the first day of every month thereafter, until the entire unpaid principal balance evidenced by this Note is fully paid.  Any remaining principal and interest shall be due and payable on the Maturity Date.  The unpaid principal balance shall continue to bear interest after the Maturity Date at the Default Rate set forth in this Note until and including the date on which it is paid in full.

(d)          Payments Before Due Date.  Any regularly scheduled monthly installment of principal and interest that is received by Lender before the date it is due shall be deemed to have been received on the due date solely for the purpose of calculating interest due.

  

	
Multifamily Non-Recourse Fixed Rate Note – Louisiana

	
Form 4119

	
Page 2

	
Fannie Mae

	
08-09

	
© 1997-2009 Fannie Mae

  

(e)           Accrued Interest.  Any accrued interest remaining past due for 30 days or more shall be added to and become part of the unpaid principal balance and shall bear interest at the rate or rates specified in this Note.  Any reference herein to "accrued interest" shall refer to accrued interest which has not become part of the unpaid principal balance.  Any amount added to principal pursuant to the Loan Documents shall bear interest at the applicable rate or rates specified in this Note and shall be payable with such interest upon demand by Lender and absent such demand, as provided in this Note for the payment of principal and interest.

4.           Application of Payments.  If at any time Lender receives, from Borrower or otherwise, any amount applicable to the Indebtedness which is less than all amounts due and payable at such time, Lender may apply that payment to amounts then due and payable in any manner and in any order determined by Lender, in Lender's discretion.  Borrower agrees that neither Lender's acceptance of a payment from Borrower in an amount that is less than all amounts then due and payable nor Lender's application of such payment shall constitute or be deemed to constitute either a waiver of the unpaid amounts or an accord and satisfaction.

5.           Security.  The Indebtedness is secured, among other things, by the Security Instrument, and reference is made to the Security Instrument for other rights of Lender concerning the collateral for the Indebtedness.

6.           Acceleration.  If an Event of Default has occurred and is continuing, the entire unpaid principal balance, any accrued interest, the prepayment premium payable under Paragraph 10, if any, and all other amounts payable under this Note and any other Loan Document shall at once become due and payable, at the option of Lender, without any prior notice to Borrower.  Lender may exercise this option to accelerate regardless of any prior forbearance.

7.           Late Charge.  If any monthly installment due hereunder is not received by Lender on or before the 10th day of each month or if any other amount payable under this Note or under the Security Instrument or any other Loan Document is not received by Lender within 10 days after the date such amount is due, counting from and including the date such amount is due, Borrower shall pay to Lender, immediately and without demand by Lender, a late charge equal to 5 percent of such monthly installment or other amount due.  Borrower acknowledges that its failure to make timely payments will cause Lender to incur additional expenses in servicing and processing the Loan and that it is extremely difficult and impractical to determine those additional expenses.  Borrower agrees that the late charge payable pursuant to this Paragraph represents a fair and reasonable estimate, taking into account all circumstances existing on the date of this Note, of the additional expenses Lender will incur by reason of such late payment.  The late charge is payable in addition to, and not in lieu of, any interest payable at the Default Rate pursuant to Paragraph 8.

8.           Default Rate.  So long as any monthly installment or any other payment due under this Note remains past due for 30 days or more, interest under this Note shall accrue on the unpaid principal balance from the earlier of the due date of the first unpaid monthly installment or other payment due, as applicable, at the Default Rate.  If the unpaid principal balance and all accrued interest are not paid in full on the Maturity Date, the unpaid principal balance and all accrued interest shall bear interest from the Maturity Date at the Default Rate.  Borrower also acknowledges that its failure to make timely payments will cause Lender to incur additional expenses in servicing and processing the Loan, that, during the time that any monthly installment or payment under this Note is delinquent for more than 30 

 

  

	
Multifamily Non-Recourse Fixed Rate Note – Louisiana

	
Form 4119

	
Page 3

	
Fannie Mae

	
08-09

	
© 1997-2009 Fannie Mae

  

 

days, Lender will incur additional costs and expenses arising from its loss of the use of the money due and from the adverse impact on Lender's ability to meet its other obligations and to take advantage of other investment opportunities, and that it is extremely difficult and impractical to determine those additional costs and expenses.  Borrower also acknowledges that, during the time that any monthly installment or other payment due under this Note is delinquent for more than 30 days, Lender's risk of nonpayment of this Note will be materially increased and Lender is entitled to be compensated for such increased risk.  Borrower agrees that the increase in the rate of interest payable under this Note to the Default Rate represents a fair and reasonable estimate, taking into account all circumstances existing on the date of this Note, of the additional costs and expenses Lender will incur by reason of the Borrower's delinquent payment and the additional compensation Lender is entitled to receive for the increased risks of nonpayment associated with a delinquent loan.

9.           Limits on Personal Liability.

(a)           Except as otherwise provided in this Paragraph 9, Borrower shall have no personal liability under this Note, the Security Instrument or any other Loan Document for the repayment of the Indebtedness or for the performance of any other obligations of Borrower under the Loan Documents, and Lender's only recourse for the satisfaction of the Indebtedness and the performance of such obligations shall be Lender's exercise of its rights and remedies with respect to the Mortgaged Property (as such term is defined in the Security Instrument) and any other collateral held by Lender as security for the Indebtedness. This limitation on Borrower's liability shall not limit or impair Lender's enforcement of its rights against any guarantor of the Indebtedness or any guarantor of any obligations of Borrower.

(b)           Borrower shall be personally liable to Lender for the repayment of a portion of the Indebtedness equal to any loss or damage suffered by Lender as a result of:

(1)           failure of Borrower to pay to Lender upon demand after an Event of Default, all Rents to which Lender is entitled under Section 3(a) of the Security Instrument and the amount of all security deposits collected by Borrower from tenants then in residence;

(2)           failure of Borrower to apply all insurance proceeds and condemnation proceeds as required by the Security Instrument;

(3)           failure of Borrower to comply with Section 14(d) or (e) of the Security Instrument relating to the delivery of books and records, statements, schedules and reports;

(4)           fraud or written material misrepresentation by Borrower, Key Principal or any officer, director, partner, member or employee of Borrower in connection with the application for or creation of the Indebtedness or any request for any action or consent by Lender;

(5)           failure to apply Rents, first, to the payment of reasonable operating expenses (other than Property management fees that are not currently payable pursuant to the terms of an Assignment of Management Agreement or any other agreement with Lender executed in connection with the Loan) and then to Debt Service Amounts, except that Borrower will not be personally liable (i) to the extent that Borrower lacks the legal right to direct the disbursement of such sums because of a bankruptcy, receivership or similar judicial proceeding, or (ii) with 

 

  

	
Multifamily Non-Recourse Fixed Rate Note – Louisiana

	
Form 4119

	
Page 4

	
Fannie Mae

	
08-09

	
© 1997-2009 Fannie Mae

  

respect to Rents that are distributed in any calendar year if Borrower has paid all operating expenses and Debt Service Amounts for that calendar year; or

(6)           failure by Borrower to comply with the provisions of Section 17(a) of the Security Instrument.

(c)           Borrower shall become personally liable to Lender for the repayment of all of the Indebtedness upon the occurrence of any of the following Events of Default:

(1)            Borrower’s acquisition of any property or operation of any business not permitted by Section 33 of the Security Instrument;

(2)            a Transfer that is an Event of Default under Section 21 of the Security Instrument; or

(3)           the occurrence of a Bankruptcy Event (but only if the Bankruptcy Event occurs with the consent, encouragement or active participation of Borrower, Key Principal or any Borrower Affiliate).

(d)           To the extent that Borrower has personal liability under this Paragraph 9, Lender may exercise its rights against Borrower personally without regard to whether Lender has exercised any rights against the Mortgaged Property or any other security, or pursued any rights against any guarantor, or pursued any other rights available to Lender under this Note, the Security Instrument, any other Loan Document or applicable law. For purposes of this Paragraph 9, the term "Mortgaged Property" shall not include any funds that (1) have been applied by Borrower as required or permitted by the Security Instrument prior to the occurrence of an Event of Default, or (2) Borrower was unable to apply as required or permitted by the Security Instrument because of a bankruptcy, receivership, or similar judicial proceeding.

10.           Voluntary and Involuntary Prepayments.

(a)           A prepayment premium shall be payable in connection with any prepayment made under this Note as provided below:

	
(1)

	
     Borrower may voluntarily prepay all (but not less than all) of the unpaid principal balance of this Note only on the last calendar day of a calendar month (the "Last Day of the Month") and only if Borrower has complied with all of the following:

	
(i)  

	
Borrower must give Lender at least 30 days (if given via U.S. Postal Service) or 20 days (if given via facsimile, email or overnight courier), but not more than 60 days, prior written notice of Borrower's intention to make a prepayment (the "Prepayment Notice").  The Prepayment Notice shall be given in writing (via facsimile, email, U.S. Postal Service or overnight courier) and addressed to Lender.  The Prepayment Notice shall include, at a minimum, the Business Day upon which Borrower intends to make the prepayment (the "Intended Prepayment Date").

  

	
Multifamily Non-Recourse Fixed Rate Note – Louisiana

	
Form 4119

	
Page 5

	
Fannie Mae

	
08-09

	
© 1997-2009 Fannie Mae

  

	
(ii)  

	
Borrower acknowledges that the Lender is not required to accept any voluntary prepayment of this Note on any day other than the Last Day of the Month even (A) if Borrower has given a Prepayment Notice with an Intended Prepayment Date other than the Last Day of the Month or (B) if the Last Day of the Month is not a Business Day.  Therefore, even if Lender accepts a voluntary prepayment on any day other than the Last Day of the Month, for all purposes (including the accrual of interest and the calculation of the prepayment premium), any prepayment received by Lender on any day other than the Last Day of the Month shall be deemed to have been received by Lender on the Last Day of the Month and any prepayment calculation will include interest to and including the Last Day of the Month in which such prepayment occurs.  If the Last Day of the Month is not a Business Day, then the Borrower must make the payment on the Business Day immediately preceding the Last Day of the Month.

	
(iii)  

	
Any prepayment shall be made by paying (A) the amount of principal being prepaid, (B) all accrued interest (calculated to the Last Day of the Month), (C) all other sums due Lender at the time of such prepayment, and (D) the prepayment premium calculated pursuant to Schedule A.

	
(iv)  

	
If, for any reason, Borrower fails to prepay this Note (A) within five (5) Business Days after the Intended Prepayment Date or (B) if the prepayment occurs in a month other than the month stated in the original Prepayment Notice, then Lender shall have the right, but not the obligation, to recalculate the prepayment premium based upon the date that Borrower actually prepays this Note and to make such calculation as described in Schedule A attached hereto.  For purposes of such recalculation, such new prepayment date shall be deemed the "Intended Prepayment Date."

(2)           Upon Lender's exercise of any right of acceleration under this Note, Borrower shall pay to Lender, in addition to the entire unpaid principal balance of this Note outstanding at the time of the acceleration, (i) all accrued interest and all other sums due Lender under this Note and the other Loan Documents, and (ii) the prepayment premium calculated pursuant to Schedule A.

(3)           Any application by Lender of any collateral or other security to the repayment of any portion of the unpaid principal balance of this Note prior to the Maturity Date and in the absence of acceleration shall be deemed to be a partial prepayment by Borrower, requiring the payment to Lender by Borrower of a prepayment premium.

(b)           Notwithstanding the provisions of Paragraph 10(a), no prepayment premium shall be payable (1) with respect to any prepayment occurring as a result of the application of any insurance proceeds or condemnation award under the Security Instrument, or (2) as provided in subparagraph (c) of Schedule A.

(c)           Schedule A is hereby incorporated by reference into this Note.

  

	
Multifamily Non-Recourse Fixed Rate Note – Louisiana

	
Form 4119

	
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Fannie Mae

	
08-09

	
© 1997-2009 Fannie Mae

  

(d)           Any required prepayment of less than the entire unpaid principal balance of this Note shall not extend or postpone the due date of any subsequent monthly installments or change the amount of such installments, unless Lender agrees otherwise in writing.

(e)           Borrower recognizes that any prepayment of the unpaid principal balance of this Note, whether voluntary or involuntary or resulting from a default by Borrower, will result in Lender's incurring loss, including reinvestment loss, additional expense and frustration or impairment of Lender's ability to meet its commitments to third parties.  Borrower agrees to pay to Lender upon demand damages for the detriment caused by any prepayment, and agrees that it is extremely difficult and impractical to ascertain the extent of such damages.  Borrower therefore acknowledges and agrees that the formula for calculating prepayment premiums set forth on Schedule A represents a reasonable estimate of the damages Lender will incur because of a prepayment.

(f)           Borrower further acknowledges that the prepayment premium provisions of this Note are a material part of the consideration for the loan evidenced by this Note, and acknowledges that the terms of this Note are in other respects more favorable to Borrower as a result of the Borrower's voluntary agreement to the prepayment premium provisions.

11.           Costs and Expenses.  Borrower shall pay on demand all expenses and costs, including fees and out-of-pocket expenses of attorneys and expert witnesses and costs of investigation, incurred by Lender as a result of any default under this Note or in connection with efforts to collect any amount due under this Note, or to enforce the provisions of any of the other Loan Documents, including those incurred in post-judgment collection efforts and in any bankruptcy proceeding (including any action for relief from the automatic stay of any bankruptcy proceeding) or judicial or non-judicial foreclosure proceeding.

12.           Forbearance.  Any forbearance by Lender in exercising any right or remedy under this Note, the Security Instrument, or any other Loan Document or otherwise afforded by applicable law, shall not be a waiver of or preclude the exercise of that or any other right or remedy.  The acceptance by Lender of any payment after the due date of such payment, or in an amount which is less than the required payment, shall not be a waiver of Lender's right to require prompt payment when due of all other payments or to exercise any right or remedy with respect to any failure to make prompt payment.  Enforcement by Lender of any security for Borrower's obligations under this Note shall not constitute an election by Lender of remedies so as to preclude the exercise of any other right or remedy available to Lender.

13.           Waivers.  Presentment, demand, notice of dishonor, protest, notice of acceleration, notice of intent to demand or accelerate payment or maturity, presentment for payment, notice of nonpayment, grace, and diligence in collecting the Indebtedness are waived by Borrower, Key Principal, and all endorsers and guarantors of this Note and all other third party obligors.

14.           Loan Charges.  Borrower agrees to pay an effective rate of interest equal to the sum of the Interest Rate provided for in this Note and any additional rate of interest resulting from any other charges of interest or in the nature of interest paid or to be paid in connection with the loan evidenced by this Note and any other fees or amounts to be paid by Borrower pursuant to any of the other Loan Documents.  Neither this Note nor any of the other Loan Documents shall be construed to create a contract for the use, forbearance or detention of money requiring payment of interest at a rate greater 

 

  

	
Multifamily Non-Recourse Fixed Rate Note – Louisiana

	
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Fannie Mae

	
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© 1997-2009 Fannie Mae

  

than the maximum interest rate permitted to be charged under applicable law.  If any applicable law limiting the amount of interest or other charges permitted to be collected from Borrower in connection with the Loan  is interpreted so that any interest or other charge provided for in any Loan Document, whether considered separately or together with other charges provided for in any other Loan Document, violates that law, and Borrower is entitled to the benefit of that law, that interest or charge is hereby reduced to the extent necessary to eliminate that violation.  The amounts, if any, previously paid to Lender in excess of the permitted amounts shall be applied by Lender to reduce the unpaid principal balance of this Note.  For the purpose of determining whether any applicable law limiting the amount of interest or other charges permitted to be collected from Borrower has been violated, all Indebtedness that constitutes interest, as well as all other charges made in connection with the Indebtedness that constitute interest, shall be deemed to be allocated and spread ratably over the stated term of the Note.  Unless otherwise required by applicable law, such allocation and spreading shall be effected in such a manner that the rate of interest so computed is uniform throughout the stated term of the Note.

15.           Commercial Purpose.  Borrower represents that the Indebtedness is being incurred by Borrower solely for the purpose of carrying on a business or commercial enterprise, and not for personal, family or household purposes.

16.           Counting of Days.  Except where otherwise specifically provided, any reference in this Note to a period of "days" means calendar days, not Business Days.

17.           Governing Law.  This Note shall be governed by the law of the jurisdiction in which the Land is located.

18.           Captions.  The captions of the paragraphs of this Note are for convenience only and shall be disregarded in construing this Note.

19.           Notices.  All notices, demands and other communications required or permitted to be given by Lender to Borrower pursuant to this Note shall be given in accordance with Section 31 of the Security Instrument.

20.           Consent to Jurisdiction and Venue.   Borrower and Key Principal each agrees that any controversy arising under or in relation to this Note shall be litigated exclusively in the Property Jurisdiction.  The state and federal courts and authorities with jurisdiction in the Property Jurisdiction shall have exclusive jurisdiction over all controversies which shall arise under or in relation to this Note.  Borrower and Key Principal each irrevocably consents to service, jurisdiction, and venue of such courts for any such litigation and waives any other venue to which it might be entitled by virtue of domicile, habitual residence or otherwise.

21.           WAIVER OF TRIAL BY JURY.  BORROWER, KEY PRINCIPAL AND LENDER EACH (A) AGREES NOT TO ELECT A TRIAL BY JURY WITH RESPECT TO ANY ISSUE ARISING OUT OF THIS NOTE OR THE RELATIONSHIP BETWEEN THE PARTIES AS LENDER, KEY PRINCIPAL AND BORROWER THAT IS TRIABLE OF RIGHT BY A JURY AND (B) WAIVES ANY RIGHT TO TRIAL BY JURY WITH RESPECT TO SUCH ISSUE TO THE EXTENT THAT ANY SUCH RIGHT EXISTS NOW OR IN THE FUTURE.  THIS WAIVER OF RIGHT TO TRIAL BY JURY IS SEPARATELY GIVEN BY EACH PARTY, KNOWINGLY AND VOLUNTARILY WITH THE BENEFIT OF COMPETENT LEGAL COUNSEL.

  

	
Multifamily Non-Recourse Fixed Rate Note – Louisiana

	
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Fannie Mae

	
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© 1997-2009 Fannie Mae

  

ATTACHED SCHEDULES.  The following Schedules are attached to this Note:

	
  

	 |X|	
  Schedule A

	
Prepayment Premium (required)

	
  

	  |X|	
  Schedule B

	
Modifications to Multifamily Note (Seniors Housing)

	
  

	
(Signature Pages Attached)

  

	
Multifamily Non-Recourse Fixed Rate Note – Louisiana

	
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© 1997-2009 Fannie Mae

  

IN WITNESS WHEREOF, Borrower has signed and delivered this Note or has caused this Note to be signed and delivered by its duly authorized representative.

	  	
BORROWER

	  	  
	  	
EMERIMANDEVILLE LLC, a Delaware limited liability company

	  	  
	  	
By:  Emeritus Corporation, a Washington corporation

	  	
Its:   Sole Member

	  	  
	  	  
	  	  
	  	
By:   /s/ Eric Mendelsohn          

	  	
Name:   Eric Mendelsohn

	  	
Title:     Senior Vice President Corporate Development

	  	  

FANNIE MAE COMMITMENT NO. 864445

 

	
Multifamily Non-Recourse Fixed Rate Note – Louisiana

	
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Fannie Mae

	
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© 1997-2009 Fannie Mae

  

  

PAY TO THE ORDER OF FANNIE MAE

WITHOUT RECOURSE.

KEYCORP REAL ESTATE CAPITAL MARKETS, INC., an Ohio corporation

By:           /s/ Crystal L. Williams                                                                

Name:      Crystal L. Williams

Title:        Vice President

Date:           March 31, 2011

  

	
Multifamily Non-Recourse Fixed Rate Note – Louisiana

	
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Fannie Mae

	
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© 1997-2009 Fannie Mae

  

SCHEDULE A

PREPAYMENT PREMIUM

Any prepayment premium payable under Paragraph 10 of this Note shall be computed as follows:

	
  

	
(a)

	
If the prepayment is made at any time after the date of this Note and before the Yield Maintenance Period End Date, the prepayment premium shall be the greater of:

	
  

	
(i)

	
1% of the amount of principal being prepaid; or

	
  

	
(ii)

	
The product obtained by multiplying:

	
  

	
(A)

	
the amount of principal being prepaid,

	
  

	
by

	
      

	
(B)

	
the difference obtained by subtracting from the Interest Rate on this Note the Yield Rate (as defined below), on the twenty-fifth Business Day preceding (x) the Intended Prepayment Date, or (y) the date Lender accelerates the Loan or otherwise accepts a prepayment pursuant to Paragraph 10(a)(3) of this Note,

	
  

	
by

	
  

	
(C)

	
the present value factor calculated using the following formula:

1 - (1 + r)-n/12

r

[r =           Yield Rate

	
  

	
 n =

	
the number of months remaining between (1) either of the following: (x) in the case of a voluntary prepayment, the Last Day of the Month during which the prepayment is made, or (y) in any other case, the date on which Lender accelerates the unpaid principal balance of this Note and (2) the Yield Maintenance Period End Date.

  

	
Multifamily Non-Recourse Fixed Rate Note – Louisiana

	
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Fannie Mae

	
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© 1997-2009 Fannie Mae

  

For purposes of this clause (ii), the “Yield Rate” means the yield calculated by interpolating the yields for the immediately shorter and longer term U.S. “Treasury constant maturities” (as reported in the Federal Reserve Statistical Release H.15 Selected Interest Rates (the "Fed Release") under the heading "U.S. government securities") closest to the remaining term of the Yield Maintenance Period Term, as follows (rounded to three decimal places):

[(a-b) /(x-y) x (z-y)] + b

 

	
  

	
a =

	
the yield for the longer U.S. Treasury constant maturity

	
  

	
b =

	
the yield for the shorter U.S. Treasury constant maturity

	
  

	
x =

	
the term of the longer U.S. Treasury constant maturity

	
  

	
y =

	
the term of the shorter U.S. Treasury constant maturity

	
  

	
z =

	
“n” (as defined in the present value factor calculation above) divided by 12.

Notwithstanding any provision to the contrary, if “z” equals a term reported under the U.S. “Treasury constant maturities” subheading in the Fed Release, the yield for such term shall be used, and interpolation shall not be necessary.  If publication of the Fed Release is discontinued by the Federal Reserve Board, Lender shall determine the Yield Rate from another source selected by Lender.  Any determination of the Yield Rate by Lender will be binding absent manifest error.]

	
  

	
(b)

	
If the prepayment is made on or after the Yield Maintenance Period End Date but before the last calendar day of the 4th month prior to the month in which the Maturity Date occurs, the prepayment premium shall be 1% of the amount of principal being prepaid.

	
  

	
(c)

	
Notwithstanding the provisions of Paragraph 10(a) of this Note, no prepayment premium shall be payable with respect to any prepayment made on or after the last calendar day of the 4th month prior to the month in which the Maturity Date occurs.

 

	
___EM__________________

	
Borrower Initials

  

	
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© 1997-2009 Fannie Mae

  

SCHEDULE B

 

MODIFICATIONS TO NOTE

(Seniors Housing)

The following modifications are made to the text of the Note that precedes this Schedule:

	
1.  

	
Section 9(b)(3) of the Note is hereby amended to read as follows:

"Failure of Borrower to comply with Sections 14(d) or 14(e) of the Security Instrument relating to the delivery of books and records, statements, schedules, and reports."

	
2.  

	
Section 9(b) of the Note is hereby amended to delete the word "or" immediately preceding paragraph (6) thereof and to insert a semi-colon in lieu of the period and the word "or", and add the following paragraph (7) at the end thereof:

"or (7) Borrower's failure to cause the renewal, continuation, extension or maintenance of all Licenses required to legally operate the Mortgaged Property as a Seniors Housing Facility, as defined in the Security Instrument."

	
  

	
        3.

	
All capitalized terms used in this Schedule not specifically defined herein shall have the meanings set forth in the text of the Note that precedes this Schedule.

BORROWER'S INITIALS: ____EM_________

 

	
 

	
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© 1997-2009 Fannie Maesillengers8ex41080511.htm

EXHIBIT 4.1

 

SILLENGER EXPLORATION CORP.

 

2011 STOCK AND OPTION PLAN 

1.           GENERAL PROVISIONS.

1.1  Purpose.

The Sillenger Exploration Corp. 2011 Stock and Option Plan (“Plan”) is intended to allow designated directors, officers, employees, and certain non-employees, including consultants and advisors (all of whom are sometimes collectively referred to herein as “Optionees”) of Sillenger Exploration Corp., a Nevada corporation (the “Company”) and its Subsidiaries (as that term is defined below) which it may have from time to time, to receive certain options (“Stock Options”) to purchase the Company’s common stock, one tenth of one cent ($0.001) par value (“Common Stock”), and to receive grants of Common Stock  subject to certain restrictions (“Grants”).  As used in this Plan, the term “Subsidiary” shall mean each corporation which is a “subsidiary corporation” of the Company within the meaning of Section 424(f) of the Internal Revenue Code of 1986, as amended (“Code”).  The purpose of the Plan is to promote the interests of the Company and its shareholders by attracting and retaining Optionees capable of furthering the future success of the Company and by aligning their economic interests more closely with those of the Company’s shareholders.  The services that shall be compensated for with such Stock Option and Grants shall be bona fide services to be performed for the Company, which such services shall neither be in connection with a capital raising function for the Company nor in connection with making a market in the Common Stock.

1.2              Administration.

1.2.1           The Plan shall be administered by the Company’s Board of Directors (“Directors”).  A majority of its members shall constitute a quorum.  The Directors shall be governed by the provisions of the Company’s Bylaws and by Nevada law applicable to the Directors, except as otherwise provided herein or determined by the Directors.

1.2.2           The Directors shall have full and complete autho­rity to construe and interpret the Plan, to establish, amend and rescind rules and regulations relating to the Plan, and to take all such actions and make all such determinations in connection with the Plan as it may deem necessary or desirable.  The Directors shall, in their discretion, but subject to the express provi­sions of the Plan: approve the Optionees nominated by the management of the Company to be granted Grants or Stock Options; to deter­mine the number of Grants or Stock Options to be granted to an Optionee; to deter­mine the time or times at which Grants or Stock Options shall be granted; to establish the terms and conditions upon which Grants or Stock Options may be exercised; to remove or adjust any restric­tions and condi­tions upon Grants or Stock Options; to specify, at the time of grant, provisions relating to exercisability of Stock Options and to accelerate or otherwise modify the exer­cis­ability of any Stock Options; and to adopt such rules and regu­lations and to make all other determinations deemed neces­sary or desirable for the admin­istration of the Plan.  All interpretations and con­struc­tions of the Plan by the Directors, and all of its actions hereunder, shall be binding and conclu­sive on all persons for all purposes.

 

1.2.3           The Company hereby agrees to indemnify and hold harmless each member of the Directors and each Optionee of the Company, and the estate and heirs of such member of the Directors or Optionee, against all claims, liabilities, expenses, penalties, damages or other pecuniary losses, including legal fees, which such member of the Directors or Optionee, his or her estate or heirs may suffer as a result of his or her responsibilities, obligations or duties in connection with the Plan, to the extent that insurance, if any, does not cover the payment of such items.  No member of the Directors or Optionee shall be liable for any action or determination made in good faith with respect to the Plan or any Grant or Stock Option granted pursuant to the Plan.

1.3              Eligibility and Participation.

 

 

  

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Optionees eligible under the Plan shall be approved by the Directors from those Optionees who, in the opinion of the management of the Company, are in positions that enable them to make significant and extraordinary contri­butions to the long-term performance and growth of the Company.  In selecting Optionees to whom Stock Options or Grants may be granted, consideration shall be given to factors such as employment position, duties and respon­sibil­ities, ability, productivity, length of service, morale, inter­est in the Company and recommendations of super­visors.

 

1.4              Shares Subject to the Plan.

    

The maximum number of shares of Common Stock that may be issued pursuant to the Plan shall be Eight Million (8,000,000) subject to adjustment pursuant to the provisions of paragraph 4.1.  If shares of Common Stock granted or issued under the Plan are reacquired by the Company due to a forfeiture or for any other reason, such shares shall be cancelled and thereafter shall again be available for purposes of the Plan.  If a Stock Option expires, terminates or is cancelled for any reason without having been exercised in full, the shares of Common Stock not purchased thereunder shall again be available for purposes of the Plan.

2.           GRANTS OF STOCK OPTIONS.

2.1              Grants of Stock Options.

The Directors may grant Stock Options in such amounts, at such times, and to such Optionees nominated by the management of the Company as the Directors, in their discretion, may deter­mine.   Stock Options granted under the Plan shall con­stitute “Incentive Stock Options” within the meaning of Section 422 of the Code, if so designated by the Directors on the date of grant.  The Directors shall also have the discretion to grant Stock Options which do not constitute incen­tive stock options, and any such Stock Options shall be desig­nated non-statutory stock options by the Directors on the date of grant.  The aggre­gate fair market value (deter­mined as of the time an incen­tive stock option is granted) of the Common Stock with respect to which incentive stock options are exer­cis­able for the first time by any Employee during any one calendar year (under all plans of the Company and any parent or subsidiary of the Company) may not exceed the maximum amount permitted under Section 422 of the Code (currently one hundred thousand dollars ($100,000.00)).  Non-statu­tory stock options shall not be subject to the limita­tions relating to Incen­tive Stock Options con­tained in the pre­ced­ing sentence.  Each Stock Option shall be evidenced by a written agreement (“Option Agreement”) in a form approved by the Directors, which shall be executed on behalf of the Company and by the Optionee to whom the Stock Option is granted, and which shall be subject to the terms and conditions of this Plan.  In the discretion of the Directors, Stock Options may include provisions (which need not be uniform), authorized by the Directors in their discretion, that accelerate an Optionee’s rights to exercise Stock Options following a “Change in Control,” as such term is defined in paragraph 3.1 hereof.  The holder of a Stock Option shall not be entitled to the privileges of stock ownership as to any shares of Common Stock not actually issued to such holder.

 

2.2              Purchase Price.

The purchase price (“Exercise Price”) of shares of Common Stock subject to each non-statutory Stock Option (“Option Shares”) shall be equal to whatever price is established by the Directors, in its sole discretion, on the date of the grant.  The Exercise Price of Incentive Stock Options shall be the fair market value of the options on the date of the grant thereof.  For an Optionee holding stock possessing more than ten percent (10%) percent of the total combined voting power of all classes of stock of the Company, the Exercise Price of an incentive Stock Option shall be at least one hundred ten percent (110%) of the fair market value of the Common Stock and such option.

2.3              Option Period.

 

The Stock Option period (“Term”) shall commence on the date of grant of the incentive Stock Option and shall be ten (10) years or such shorter period as is determined by the Directors; the Term for an incentive Stock Option granted to an Optionee holding stock possessing more than ten percent (10%) of the total combined voting power of all classes of stock of the Company shall be five (5) years from the date such option is granted.  The Term for Non-statutory Stock Options shall be whatever period, if any, is set by the Directors.  Each Stock Option shall provide that it is exercisable over its term in such periodic installments as the Directors in its sole discretion may determine.  Such provisions need not be uniform. Notwithstanding the foregoing, but subject to the provisions of paragraphs 1.2.2 and 2.1, Stock Options granted to Optionees who are subject to the reporting require­ments of Section 16(a) of the Exchange Act (“Section 16 Reporting Persons”) shall not be exercisable until at least six (6) months and one day from the date the Stock Option is granted.

 

 

  

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2.4              Exercise of Options.

2.4.1           Each Stock Option may be exercised in whole or in part (but not as to fractional shares) by delivering it for sur­render or endor­se­ment to the Company, attention of the Corporate Secretary, at the principal office of the Company, together with payment of the Exercise Price and an executed Notice and Agreement of Exercise in the form prescribed by paragraph 2.4.2.  Payment may be made  (i) in cash, (ii) by cashier’s or certified check, (iii) by surrender of previously owned shares of the Company’s Common Stock valued pursuant to para­graph 2.2 (if the Directors authorize payment in stock in their discretion), (iv) by withholding from the Option Shares which would otherwise be issuable upon the exercise of the Stock Option that number of Option Shares equal to the exercise price of the Stock Option, if such withholding is authorized by the Directors in their discretion, (v) in the discretion of the Directors, by the delivery to the Company of the Optionee’s promissory note secured by the Option Shares, bearing interest at a rate sufficient to prevent the imputation of interest under Sections 483 or 1274 of the Code, and having such other terms and conditions as may be satisfactory to the Directors, or (vi) cashless exercise program as established by the Company.

 

2.4.2           Exercise of each Stock Option is conditioned upon the agreement of the Optionee to the terms and condi­tions of this Plan and of such Stock Option as evidenced by the Optionee’s execution and delivery of a Notice and Agreement of Exercise in a form to be determined by the Directors in their discretion.  Such Notice and Agreement of Exercise shall set forth the agreement of the Optionee that:  (a) no Option Shares will be sold or other­wise distributed in violation of the Securities Act of 1933 (“Securities Act”) or any other applicable federal or state securities laws, (b) each Option Share certificate may be im­printed with legends reflecting any applicable federal and state securities law restrictions and conditions, (c) the Company may comply with said securities law restrictions and issue “stop transfer” instructions to its Trans­fer Agent and Registrar with­out lia­bility, (d) if the Optionee is a Section 16 Reporting Person, the Optionee will furnish to the Company a copy of each Form 4 or Form 5 filed by said Optionee and will timely file all reports required under federal securities laws, and (e) the Optionee will report all sales of Option Shares to the Company in writing on a form prescribed by the Company.

2.4.3           No Stock Option shall be exercisable unless and until any applicable registration or qualification requirements of federal and state securities laws, and all other legal require­ments, have been fully complied with.  The Company will use reasonable efforts to maintain the effec­tive­ness of a Regis­tration Statement under the Securi­ties Act for the issuance of Stock Options and shares acquired thereunder, but there may be times when no such Registration State­ment will be currently effective.  The exercise of Stock Options may be temporarily suspended without liability to the Company during times when no such Registration Statement is currently effective, or during times when, in the reasonable opinion of the Directors, such suspension is neces­sary to pre­clude violation of any require­­ments of applicable law or regu­latory bodies having jurisdiction over the Company.  If any Stock Option would expire for any reason except the end of its term during such a suspen­sion, then if exercise of such Stock Option is duly tendered before its expira­tion, such Stock Option shall be exercisable and exercised (unless the attempted exercise is withdrawn) as of the first day after the end of such suspension.  The Company shall have no obligation to file any Registration Statement covering resales of Option Shares.

2.5              Restrictions on Transfer.

Each Stock Option granted under this Plan shall be transferable only by will or the laws of descent and distribu­tion.  No interest of any Optionee under the Plan shall be subject to attachment, execution, garnishment, sequest­ration, the laws of bankruptcy or any other legal or equitable process.  Each Stock Option granted under this Plan shall be exercisable during an Optionee’s lifetime only by such Optionee or by such Optionee’s legal representa­tive.

 

 

  

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3.           GRANTS OF SHARES.

3.1              Grant of Shares.

Subject to the provisions of the Plan, the Directors shall have full and complete authority, in their discretion, but subject to the express provisions of this Plan, to (i) grant shares pur­suant to the Plan; (ii) determine the number of shares of Common Stock subject to each Grant (“Grant Shares”); (iii) determine the terms and conditions (which need not be identical) of each Grant, including the consideration to be paid by the Optionee for such Common Stock; (iv) establish and modify performance criteria for Grants; and (v) make all of the determinations necessary or advisable with respect to Grants under the Plan.  Each Grant under the Plan shall consist of a grant of shares of Common Stock.

3.2              Incentive Agreements.

Each Grant granted under the Plan shall be evidenced by a written agreement (“Agreement”) in a form approved by management and executed by the Company and the Optionee to whom the Grant is granted.  Each Agreement shall be subject to the terms and conditions of the Plan and other such terms and conditions as management may specify.

3.3              Waiver of Restrictions.

The Directors may modify or amend any Grant under the Plan or waive any restrictions or conditions applicable to such Grants; provided, however, that the Directors may not undertake any such modifications, amendments or waivers if the effect thereof materially increases the benefits to any Optionee, or adversely affects the rights of any Optionee without his or her consent.

3.4              Terms and Conditions of Grants.

3.4.1           Upon receipt of a Grant of shares of Common Stock under the Plan, an Optionee shall be the holder of record of the shares and shall have all the rights of a shareholder with respect to such shares, subject to the terms and conditions of the Plan and the Grant.

4.           MISCELLANEOUS PROVISIONS.

4.1              Adjustments Upon Change in Capitalization.

 

4.1.1           The number and class of shares subject to each out­standing Stock Option, the Exercise Price thereof (but not the total price), the maximum number of Stock Options that may be granted under the Plan, the minimum number of shares as to which a Stock Option may be exercised at any one time, and the number and class of shares subject to each outstanding Grant, shall be proportionately adjusted in the event of any increase or decrease in the number of the issued shares of Common Stock which results from a split-up or consolidation of shares, payment of a stock dividend or dividends exceeding a total of five percent (5%) for which the record dates occur in any one fiscal year, a recapitalization (other than the conver­sion of convertible securi­ties according to their terms), a combination of shares or other like capital adjustment, so that (i) upon exer­cise of the Stock Option, the Optionee shall receive the number and class of shares such Optionee would have received had such Optionee been the holder of the number of shares of Common Stock for which the Stock Option is being exer­cised upon the date of such change or increase or decrease in the number of issued shares of the Company, and (ii) upon the lapse of restrictions of the Grant Shares, the Optionee shall receive the number and class of shares such Optionee would have received if the restrictions on the Grant Shares had lapsed on the date of such change or increase or decrease in the number of issued shares of the Company.

 

 

  

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4.1.2           Upon a reorganization, merger or consolidation of the Company with one or more corporations as a result of which the Company is not the surviving corporation or in which the Company survives as a wholly-owned subsidiary of another corporation, or upon a sale of all or substantially all of the property of the Company to another corporation, or any dividend or distribution to shareholders of more than ten percent (10%) of the Company’s assets, adequate adjustment or other provisions shall be made by the Company or other party to such transaction so that there shall remain and/or be substituted for the Option Shares and Grant Shares provided for herein, the shares, securities or assets which would have been issuable or payable in respect of or in exchange for such Option Shares and Grant Shares then remaining, as if the Optionee had been the owner of such shares as of the applicable date.  Any securities so substituted shall be subject to similar successive adjustments.

4.2              Withholding Taxes.

The Company shall have the right at the time of exer­cise of any Stock Option or the Grant of shares to make adequate provision for any federal, state, local or foreign taxes which it believes are or may be required by law to be withheld with respect to such exercise (“Tax Liability”), to ensure the payment of any such Tax Liability.  The Company may provide for the payment of any Tax Liability by any of the following means or a combination of such means, as determined by the Directors in its sole and absolute discretion in the particular case:  (i) by requiring the Optionee to tender a cash payment to the Company, (ii) by withholding from the Optionee’s salary, (iii) by withholding from the Option Shares which would otherwise be issuable upon exercise of the Stock Option, or from the Grant Shares on their grant or date of lapse of restrictions, that number of Option Shares or Grant Shares having an aggregate fair market value (determined in the manner prescribed by paragraph 2.2) as of the date the withholding tax obligation arises in an amount which is equal to the Optionee’s Tax Liability or (iv) by any other method deemed appropriate by the Directors.  Satisfaction of the Tax Liability of a Section 16 Reporting Person may be made by the method of payment specified in clause (iii) above only if the following two conditions are satisfied:

(a)           the withholding of Option Shares or Grant Shares and the exercise of the related Stock Option occur at least six (6) months and one day following the date of grant of such Stock Option or Grant; and

(b)           the withholding of Option Shares or Grant Shares is made either (i) pursuant to an irrevocable election (“Withholding Election”) made by such Optionee at least six months in advance of the withholding of Options Shares or Grant Shares, or (ii) on a day within a ten (10) day “window period” beginning on the third business day following the date of release of the Company’s quarterly or annual summary statement of sales and earnings.

Anything herein to the contrary notwithstanding, a Withholding Election may be disapproved by the Directors at any time.

4.3              Relationship to Other Employee Benefit Plans.

Stock Options and Grants granted hereunder shall not be deemed to be salary or other compensation to any Optionee for purposes of any pension, thrift, profit-sharing, stock purchase or any other employee benefit plan now main­tained or hereafter adopted by the Company.

4.4              Amendments and Termination.

The Directors may at any time suspend, amend or terminate this Plan.  For Incentive Stock Options only, no amendment or modification of this Plan may be adopted, except subject to stockholder approval, which would: (a) materially increase the benefits accruing to Optionees under this Plan, (b) materially increase the num­ber of securities which may be issued under this Plan (except for adjustments pursuant to paragraph 4.1 hereof), or (c) mate­rially modify the requirements as to eligibility for participa­tion in the Plan.

 

 

  

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4.5              Successors in Interest.

The provisions of this Plan and the actions of the Directors shall be binding upon all heirs, successors and assigns of the Company and of Optionees.

4.6              Other Documents.

All documents prepared, executed or delivered in con­nec­tion with this Plan (including, without limitation, Option Agreements and Incentive Agreements) shall be, in substance and form, as established and modified by the Directors; provided, however, that all such documents shall be subject in every respect to the provisions of this Plan, and in the event of any conflict between the terms of any such document and this Plan, the provisions of this Plan shall prevail.

4.7              No Obligation to Continue Employment.

This Plan and grants hereunder shall not impose any obligation on the Company to continue to employ any Optionee.  Moreover, no provision of this Plan or any document executed or delivered pursuant to this Plan shall be deemed modified in any way by any employment contract between an Optionee and the Company.

 

4.8              Misconduct of an Optionee.

Notwithstanding any other provision of this Plan, if an Optionee commits fraud or dishonesty toward the Company or wrong­fully uses or discloses any trade secret, confidential data or other information proprie­tary to the Company, or inten­tionally takes any other action materially inimical to the best interests of the Com­pany, as determined by the Directors, in its sole and absolute discretion, such Optionee shall forfeit all rights and bene­fits under this Plan.

4.9              Term of Plan.

This Plan was adopted by the Directors effective August 2, 2011.  No Stock Options or Grants may be granted under this Plan after August 2, 2021.

4.10            Governing Law.

This Plan shall be construed in accordance with, and governed by, the laws of the State of Nevada.

4.11             Shareholder Approval.

No Stock Option shall be exercisable, or Grant granted, unless and until the Directors of the Company have approved this Plan and all other legal requirements have been fully complied with.  In addition, no Incentive Stock Option shall be granted until approved by a majority of the issued and outstanding Common Stock of the Company.

4.12            Assumption Agreements.

The Company will require each successor, (direct or indirect, whether by purchase, merger, consolidation or otherwise), to all or substantially all of the business or assets of the Company, prior to the consummation of each such transaction, to assume and agree to perform the terms and provisions remaining to be performed by the Company under each Incentive Agreement and Stock Option and to preserve the benefits to the Optionees thereunder.  Such assumption and agreement shall be set forth in a written agreement in form and substance satisfactory to the Directors (an “Assumption Agreement”), and shall include such adjustments, if any, in the application of the provisions of the Incentive Agreements and Stock Options and such additional provisions, if any, as the Directors shall require and approve, in order to preserve such benefits to the Optionees.  Without limiting the generality of the foregoing, the Directors may require an Assumption Agreement to include satisfactory undertakings by a successor:

 

 

  

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(a)           to provide liquidity to the Optionees on the exercise of Stock Options;

(b)           if the succession occurs before the expiration of any period specified in the Incentive Agreements for satisfaction of performance criteria applicable to the Common Stock Granted thereunder, to refrain from interfering with the Company’s ability to satisfy such performance criteria or to agree to modify such performance criteria and/or waive any criteria that cannot be satisfied as a result of the succession;

(c)           to require any future successor to enter into an Assumption Agreement; and

(d)           to take or refrain from taking such other actions as the Directors may require and approve, in their discretion.

4.13           Compliance With Rule 16b-3.

Transactions under the Plan are intended to comply with all applicable conditions of Rule 16b-3.  To the extent that any provision of the Plan or action by the Directors fails to so comply, it shall be deemed null and void, to the extent permitted by law and deemed advisable by the Directors.

IN WITNESS WHEREOF, this Plan has been executed as of the 4th day of August 2011.

Sillenger Exploration Corp.

By: /s/ John Gillespie

John Gillespie,

Director, President and Chief Executive Officer

 

 

 

 

 

  

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