Document:

EX 10.4 Termination agreement

Exhibit 10.4

AGREEMENT

AGREEMENT dated September 18, 2013, between Richard Walker (“Walker”) and IHS Inc., a Delaware corporation (the “Company”).

WHEREAS, Walker and the Company are parties to an employment Letter Agreement dated October 31, 2007, as amended (“the Employment Agreement”).

WHEREAS, Walker has notified the Company pursuant to Section 1 of the Employment Agreement that he does not wish to extend the term of the Employment Agreement by an additional year following the expiration of the current term on October 31, 2013 and the parties agree that Walker’s last date of employment with the Company and its affiliates shall be February 1, 2014 (such date, or such earlier date of termination of employment, as Walker and the Company may mutually agree, the “Effective Termination Date”).  

WHEREAS, the parties wish to enter into this Agreement in connection with Walker’s notice to the Company to ensure an orderly transition for the business.

NOW, THEREFORE, the parties agree as follows:

1.    From the date hereof through the Effective Termination Date, Walker shall continue in his current position as Executive Vice President, Global Finance, and, except as otherwise provided in this Agreement or modified for other executives of the Company, at compensation and benefit plans currently in effect.  The parties agree that it is anticipated that Walker will, from the date hereof through the Effective Termination Date, provide services at a level that is 50% or more of the average level of service performed by Walker during the immediately preceding 36-month period.  As of the Effective Termination Date, Walker shall have resigned and cease to be an employee, officer or director of the Company or any affiliate of the Company.  As used in this Agreement, the term “affiliate” shall mean any company that directly, or indirectly through one or more intermediaries, controls, is controlled by, or is under control with the Company.

2.    Within ten days following the Effective Termination Date, subject to fulfillment of the conditions in paragraph 6 below, the Company shall pay Walker the sum of One Hundred and Fifty Thousand Dollars ($150,000), less any withholding or other deductions required to be made from such sum as provided in paragraph 14 below.  

3.    Walker will be credited with two additional years for purpose of each of the age and  service requirements of any non-qualified retirement related employee benefits plans, programs and arrangements maintained by the Company and/or its affiliates in which Walker participates at the Effective Termination Date.

4.    Walker and his eligible dependents will be eligible to continue to participate in the Company’s medical, dental and vision plans on the same terms as his participation that exists immediately prior the Effective Termination Date (or, if he is ineligible to continue to participate under the terms thereof, in substitute arrangements providing substantially comparable benefits) for a period of 18 months following the Effective Termination Date. 

5.    Walker has received grants of restricted stock units (“RSUs”), where each RSU represents one share of Class A common stock of IHS Inc. (“Shares”).  Pursuant to an award with a grant date of February 1, 2011 and an award with a grant date of August 15, 2011, RSUs will vest based upon the Company’s satisfaction of the performance objectives as of November 30, 2013 as provided in the applicable award documents pursuant to which such grants dated February 1, 2011 and August 15, 2011 were made.  Walker shall vest in the number of RSUs pursuant to the February 1, 2011 grant and the August 15, 2011 grant as determined by the HR Committee’s certification of satisfaction of the applicable performance objectives for the Company.  Walker’s vesting with respect to the February 1, 2011 grant and the August 15, 2011 grant shall be on the same date and the same basis as vesting for IHS executives generally with respect to such grants.  Walker shall vest in any time-based RSUs with a vesting date on or before February 1, 2014 on the Effective Termination Date or the date the RSUs would vest under the applicable award agreement, whichever is earlier.  In addition, in recognition of Walker’s contribution to the Company, Walker will vest in 27,900 unvested RSUs on the tenth day following the Effective Termination Date, and Walker shall be issued the shares underlying such RSUs on the tenth day following the Effective Termination Date, subject to fulfillment of the conditions in paragraph 6 below. The Company shall withhold from the Shares that otherwise would be released to Walker when the RSUs vest as provided herein the number of Shares required to satisfy any withholding taxes that may be due as a result of the vesting of such RSUs.  

6.    Walker’s receipt of the payment and other benefits under paragraphs 2, 3, 4 and vesting of the 27,900 RSUs referred to in paragraph 5 above are contingent upon his execution and delivery to the Company on the Effective Termination Date of a release in the form attached hereto as Exhibit A (“Release”) and expiration of the revocation period described in such Release.  In the event Walker fails to execute and deliver the Release on the Effective Termination Date or revokes the Release within the seven day revocation period described in the Release, Walker acknowledges that he will not be entitled to the consideration provided in 

paragraphs 2, 3, 4 and the vesting of the 27,900 RSUs referenced in paragraph 5 above and that 27,900 RSUs that would otherwise vest as provided herein shall be forfeited.  Notwithstanding the foregoing, in the event of Walker’s death, the Release shall not be required as a condition of payment or provision of benefits under this Agreement.

7.    Walker acknowledges that the obligations contained in Section 10(a) (Confidentiality) of the Employment Agreement survive the termination of Walker’s employment with the Company without limit and that the obligations contained in Section 10(b) (Non-Competition) and 10(c) (Non-Solicitation of Employees) of the Employment Agreement survive the termination of Walker’s employment with the Company for a period of 12 months after the Effective Termination Date.  The Company acknowledges that the obligations contained in Section 11 (Indemnification) of the Employment Agreement survive the termination of Walker’s employment with the Company without limit and that Walker is also entitled to indemnification and advancement of expenses as set forth in the Company’s Certificate of Incorporation and Bylaws in effect as of the date hereof.

8.    This Agreement and the Release constitute the complete understanding between Walker and the Company in respect of the subject matter of this Agreement and supersede all prior agreements relating to the same subject matter.  Without limiting the generality of the foregoing, Walker and the Company agree that the Employment Agreement is terminated effective as of the date hereof, and neither party shall have any rights or obligations under the Employment Agreement from and after the date hereof; provided, however, that Section 10 and Section 11 of the Employment Agreement shall survive the termination of the Employment Agreement, as indicated above.  Without limiting the generality of the foregoing, Walker and Company acknowledge that the payment, vesting of RSUs and  benefits provided in paragraphs 2, 3, 4 and 5 of this Agreement are in lieu of any payments, benefits or other rights of Walker in connection with termination of employment pursuant to the Employment Agreement or otherwise, including, without limitation, any payment for fiscal year 2013 or fiscal year 2014 under the Company’s annual incentive plan and any cash severance payment (other than as provided in paragraph 2 of this Agreement).  In the event of any inconsistency between the terms of this Agreement and the terms of the Employment Agreement, the terms of this Agreement shall prevail.  Walker has not relied upon any representations, promises or agreements of any kind except those set forth herein in signing this Agreement.

9.    Each amount to be paid or benefit to be provided pursuant to this Agreement shall be construed to be a separately identified payment for purposes of Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”).  Notwithstanding anything to the contrary, if, at the time of Walker’s termination of employment, he is a “specified employee” (as defined in Section 416(i) of the Code and the regulations and other published guidance under Section 409A 

of the Code) and the Company’s stock is publicly traded on an established securities market or otherwise, any portion of the payments or benefits under this Agreement that would otherwise be subject to taxation pursuant to Section 409A of the Code shall be payable not earlier than the earlier of (i) six months after the date of Walker’s termination for any reason other than death, or (ii) the date of Walker’s death.  As soon as practicable following the earlier of (i) or (ii), and in any event within ten business days of such date, Walker shall receive the entire amount that would have been paid earlier but for such six month delay.  Notwithstanding any provision of this Agreement to the contrary, to the extent necessary to avoid the imposition of any taxes under Section 409A of the Code, no payment or distribution under this Agreement that becomes payable by reason of Walker’s termination of employment with the Company will be made to Walker unless Walker’s termination of employment constitutes a “separation from service” (as such term is defined in the Treasury Regulations issued under Section 409A of the Code).  The parties intend that no payments or benefits to Walker under this Agreement or any other compensation plan or arrangement shall be subject to the tax imposed under Section 409A of the Code, and this Agreement is to be interpreted according to such intention.  No payment to be made under this Agreement shall be made at a time earlier than that provided for in this Agreement unless such payment is (i) an acceleration of payment permitted to be made under Treasury Regulation Section 1.409A-3(j)(4) or (ii) a payment that would otherwise not be subject to additional taxes and interest under Section 409A of the Code.  With regard to any provision herein that provides for reimbursement of expenses, except as permitted by Section 409A of the Code, (i) the right to reimbursement shall not be subject to liquidation or exchange for another benefit, (ii) the amount of expenses eligible for reimbursement provided during any taxable year shall not affect the expenses eligible for reimbursement in any other taxable year, and (iii) such payments shall be made in accordance with the Company’s applicable policies, but in no event later than on or before the last day of Walker’s taxable year following the taxable year in which the expense occurred (for the avoidance of doubt, this does not permit the Company to delay payment beyond what would be required under Company’s applicable policies).  The parties further agree to act reasonably and to cooperate to amend or modify this Agreement or any other such compensation arrangement to the extent reasonably necessary to avoid the imposition of tax under Section 409A of the Code.  Pursuant to Treasury Regulations Section 1.409A-1(h)(4), there shall be no “separation from service” upon the date hereof. 

10.    In the event that any provision of this Agreement should be held to be invalid or unenforceable, each and all of the other provisions of this Agreement will remain in full force and effect.  If any provision of this Agreement is found to be invalid or unenforceable, such provision will be modified as necessary to permit this Agreement to be upheld and enforced to the maximum extent permitted by law. 

11.    This Agreement is to be governed and enforced under the laws of the State of Colorado (except to the extent that Colorado conflicts of law rules would call for the application of the law of another jurisdiction).

12.    This Agreement inures to the benefit of the Company and Walker, and their respective successors and assigns.

13.    Walker has carefully read this Agreement, fully understands each of its terms and conditions, and intends to abide by this Agreement in every respect.  As such, Walker knowingly and voluntarily signs this Agreement.

14.    All payments to be made hereunder by the Company shall be subject to any applicable payroll, income, withholding and other taxes or other applicable deductions required by law or regulation.  

IN WITNESS WHEREOF, Walker and the Company have executed this Agreement as of the day and year first above written. 

	
	
	/s/ Richard Walker

	Richard Walker

	
		
	IHS INC.

	 
	 

	 
	/s/ Jeffrey Sisson

	By:
	Jeffrey Sisson

	Title:
	Senior Vice President  &         Chief Human Resources Officer

EXHIBIT A

FULL AND COMPLETE RELEASE

1.    Walker Release.

(a)    I, Richard Walker, in consideration for the acceleration of vesting of RSUs, cash payment and other benefits described in the agreement between IHS Inc. (the “Company”) and me dated September 18, 2013 (the “Agreement”), for myself and my heirs, executors, administrators and assigns, do hereby knowingly and voluntarily release and forever discharge the Company and its respective predecessors, successors and affiliates and their respective current and former directors, officers and employees from any and all claims, actions and causes of action, including, but not limited to, those relating to or arising from my employment or separation of employment with the Company, including, but not limited to, under those federal, state and local laws and those applicable laws of any other jurisdiction prohibiting employment discrimination based on age, sex, race, color, national origin, religion, disability, veteran or marital status, sexual orientation or any other protected trait or characteristic, or retaliation for engaging in any protected activity, including without limitation, the Age Discrimination in Employment Act of 1967, 29 U.S.C. § 621 et seq., as amended by the Older Workers Benefit Protection Act, P.L. 101-433, the Equal Pay Act of 1963, 9 U.S.C. § 206, et seq., Title VII of The Civil Rights Act of 1964, as amended, 42 U.S.C. § 2000e et seq., the Civil Rights Act of 1866, 42 U.S.C. § 1981, the Civil Rights Act of 1991, 42 U.S.C. § 1981a, the Americans with Disabilities Act, 42 U.S.C. § 12101, et seq., the Rehabilitation Act of 1973, 29 U.S.C. § 791 et seq., the Family and Medical Leave Act of 1993, 28 U.S.C. §§ 2601 and 2611 et seq., whether KNOWN OR UNKNOWN, fixed or contingent, which I ever had, now have, or may have, or which my heirs, executors, administrators or assigns hereafter can, will or may have from the beginning of time through the date on which I sign this Full and Complete Release (this “Release”) (collectively the “Released Claims”).  PROVIDED, HOWEVER, that notwithstanding the foregoing or anything else contained in this Agreement, the Release set forth in this Section shall not extend to:  (i) any vested rights under any pension, retirement, profit sharing or similar plan; or (ii) my rights to indemnification and/or defense under any Company certificate of incorporation, bylaws and/or policy or procedure, under any insurance contract, or under Section 11 of the Employment Agreement dated October 31, 2007, as amended, in connection with any acts and omissions within the course and scope of my employment with the Company.

(b)    I warrant and represent that I have made no sale, assignment or other transfer, or attempted sale, assignment or other transfer, of any of the Released Claims.

(c)    I fully understand and agree that:

1.    this Release, including the IHS Release set forth below, is in exchange for acceleration of RSUs, cash payment and other benefits to which I would otherwise not be entitled;

2.    no rights or claims are released or waived that may arise after the date this Release is signed by me;

3.    I am hereby advised to consult with an attorney before signing this Release;

4.    I had 21 days from my receipt of this Release within which to consider whether or not to sign it;

5.    I have 7 days following my signature of this Release to revoke the Release; and

6.    this Release will not become effective or enforceable until the revocation period of 7 days has expired.

(d)    If I choose to revoke this Release, I must do so by notifying the Company in writing.  This written notice of revocation must be mailed by U.S. first class mail or by U.S. certified mail within the 7 day revocation period and addressed as follows:

IHS Inc.  
15 Inverness Way East 
Englewood, CO 80112 
Attention:    Jeffrey Sisson
2.    IHS Release.
For good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Company on behalf of itself and its respective predecessors, successors and affiliates and current and former directors and officers, does hereby knowingly and voluntarily release and forever discharge Walker and his heirs, executors, administrators and assigns from any and all claims, actions and causes of action related to or arising from his employment or separation from employment with the Company; whether KNOWN OR UNKNOWN, fixed or contingent, provided, however, no rights or claims are released or waived that may arise after the Agreement is signed by the Company or any claims for breach of the Agreement by Walker.  The Company represents and warrants that it has made no sale, assignment or other transfer, or attempted sale, assignment or other transfer of any claim released hereby.
3.    Miscellaneous.
(a)    This Release is the complete understanding between the parties in respect of the subject matter of this Release and supersedes all prior agreements relating to the same subject 

matter.  Neither party has relied upon any representations, promises or agreements of any kind except those set forth herein in signing this Release.
(b)    In the event that any provision of this Release should be held to be invalid or unenforceable, each and all of the other provisions of this Release will remain in full force and effect.  If any provision of this Release is found to be invalid or unenforceable, such provisions will be modified as necessary to permit this Release to be upheld and enforced to the maximum extent permitted by law.
(c)    This Release is to be governed and enforced under the laws of the State of Colorado (except to the extent that Colorado conflicts of law rules would call for the application of the law of another jurisdiction).
(d)    This release inures to the benefit of the Company and Walker and their respective successors and assigns.
(e)    Each party has carefully read this Release, fully understands each of its terms and conditions, and intends to abide by this Release in every respect.
	
	
	  

	Richard Walker

	
		
	IHS INC.

	By:
	 

	Title:2013.09.24 - Exhibit101

Exhibit 10.1

	
			
	Healthcare 
Facility Note
Section 232

	U.S. Department of Housing 
and Urban Development
Office of Residential 
Care Facilities

	OMB Approval No. 2502-0605
(exp. 03/31/2014)

Public reporting burden for this collection of information is estimated to average 1 hours.  This includes the time for collecting, reviewing, and reporting the data.  The information is being collected to obtain the supportive documentation which must be submitted to HUD for approval, and is necessary to ensure that viable projects are developed and maintained.  The Department will use this information to determine if properties meet HUD requirements with respect to development, operation and/or asset management, as well as ensuring the continued marketability of the properties.  This agency may not collect this information, and you are not required to complete this form, unless it displays a currently valid OMB control number. 

Warning: Any person who knowingly presents a false, fictitious, or fraudulent statement or claim in a matter within the jurisdiction of the U.S. Department of Housing and Urban Development is subject to criminal penalties, civil liability, and administrative sanctions.  

HEALTHCARE FACILITY NOTE
(MULTISTATE)

FHA Project No.: _________
FHA Project Name: _________

	
		
	US $__________
	___________, [2013]

FOR VALUE RECEIVED, the undersigned (“Borrower”) jointly and severally (if more than one) promises to pay to the order of BERKADIA COMMERCIAL MORTGAGE LLC, a limited liability company organized and existing under the laws of Delaware, the principal sum of ______________________ (US $_______) (the “Loan”), with interest on the unpaid principal balance at the Interest Rate.

As used herein, “Interest Rate” means the annual rate of ________ per centum (_____%).

1.Defined Terms.  As used in this Note, (a) the term “Lender” means the holder of this Note, (b) the term “Indebtedness” means the principal of, interest on, and all other amounts due at any time under this Note, the Borrower’s Security Instrument or any of the other Loan Documents, including prepayment premiums, late charges, default interest, and advances under Section 13 of the Borrower’s Security Instrument to protect the security of the Borrower’s Security Instrument; (c) the term “Borrower’s Security Instrument” has the meaning set forth in Section 4 of this Note; and (d) the term “Program Obligations” means (1) all applicable statutes and any regulations issued by the U.S. Department of Housing and Urban Development (“HUD”) pursuant thereto that apply to the Project, including all amendments to such statutes and regulations, as they become effective, except that changes subject to notice and comment rulemaking shall become effective only upon completion of the rulemaking process, and (2) all current requirements in HUD handbooks and guides, notices, and mortgagee letters that apply to 

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the Project, and all future updates, changes and amendments thereto, as they become effective, except that changes subject to notice and comment rulemaking shall become effective only upon completion of the rulemaking process, and provided that such future updates, changes and amendments shall be applicable to the Project only to the extent that they interpret, clarify and implement terms in this Note rather than add or delete provisions from such document. Handbooks, guides, notices, and mortgagee letters are available on HUD’s official website:  http://www.hud.gov/offices/adm/hudclips/index.cfm or a successor location to that site.

The definition of any capitalized term or word used herein can be found in this Note and, if not found in this Note, then found in the Healthcare Regulatory Agreement – Borrower between Borrower and HUD (the “Borrower’s Regulatory Agreement”) and/or the Borrower’s Security Instrument.

2.Address for Payment.  All payments due under this Note shall be payable in immediately available funds at 118 Welsh Road, Horsham, Pennsylvania 19044, 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)Interest only at the Interest Rate on the principal outstanding for the period beginning on the date of disbursement and ending on and including the last day of the month in which such disbursement is made shall be payable on ___________, [2013].  Thereafter, consecutive monthly installments of principal and interest, each in the amount of __________________ (US $_______), shall be payable on the first day of each month beginning on ______________, [2013], until the entire unpaid principal balance evidenced by this Note is fully paid.  Any remaining principal and interest shall be due and payable on ______________ or on any earlier date on which the unpaid principal balance of this Note becomes due and payable, by acceleration or otherwise (the “Maturity Date”).

(b)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.

4.Security.  The Indebtedness is secured by, among other things, that certain Healthcare Deed of Trust, Assignment of Leases, Rents and Revenue and Security Agreement, dated as of the date of this Note (the “Borrower’s Security Instrument”), and reference is made to the Borrower’s Security Instrument for other rights of Lender as to collateral for the Indebtedness.

5.Application of Payments.  If at any time Lender receives, from Borrower or otherwise, any amount applicable to the Indebtedness that is less than all amounts due and payable at such time, Lender shall apply that payment to amounts then due and payable in the manner and in the order set forth in Section 7(a)(3) of the Borrower’s Security Instrument.  Neither Lender’s acceptance of an amount that is less than all amounts then due and payable nor 

Previous versions obsolete                                Page 2 of 10                            form HUD-94001-ORCF (Rev. 03/13)

Lender’s application of such payment in the manner authorized shall constitute or be deemed to constitute either a waiver of the unpaid amounts or an accord and satisfaction.  Notwithstanding the application of any such amount to the Indebtedness, Borrower’s obligations under this Note shall remain unchanged.

6.Acceleration.  If a Monetary Event of Default occurs and is continuing, for a period of thirty (30) days, the entire unpaid principal balance, any accrued interest and all other amounts payable to Lender under this Note and any of the other Loan Documents shall at once become due and payable, at the option of Lender, without any prior notice to Borrower.  If a Covenant Event of Default occurs and the Indebtedness is accelerated as set forth in the Borrower’s Security Instrument, the entire unpaid principal balance, any accrued interest, and all other amounts payable to Lender under this Note and any of the other Loan Documents shall at once become due and payable.  Lender may exercise this option to accelerate regardless of any prior forbearance.  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, all accrued interest and all other sums due Lender under the Loan Documents.

7.Late Charge.  If any monthly amount payable under this Note or under the Borrower’s Security Instrument or any of the other Loan Documents is not received by Lender within fifteen (15) days after the amount is due, Borrower shall pay to Lender, immediately and without demand by Lender, a late charge equal to two percent (2.00%) of such monthly amount.  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 Section 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 monthly payment.

8.Exculpation; Remedies.

(a)Except for personal liability expressly provided for in this Note or in the Borrower’s Security Instrument or in the Borrower’s Regulatory Agreement, the execution of this Note shall impose no personal liability upon Borrower and Skilled Healthcare Group, Inc. for payment of the Indebtedness evidenced thereby and in the Event of Default, the holder of this Note shall look solely to the Mortgaged Property in satisfaction of the Indebtedness and will not seek or obtain any deficiency or personal judgment against Borrower and Skilled Healthcare Group, Inc. except such judgment or decree as may be necessary to foreclose or bar its interest in the Mortgaged Property and all other property mortgaged, pledged, conveyed or assigned to secure payment of the Indebtedness; provided, that nothing in this Section 8 and no action so taken shall operate to impair any obligation of Borrower under the Borrower’s Regulatory Agreement.

(b)Notwithstanding Section 8(a) above, Borrower shall be liable to Lender for any loss or damage suffered by Lender as a result of (1) failure of Borrower to apply all insurance 

Previous versions obsolete                                Page 3 of 10                            form HUD-94001-ORCF (Rev. 03/13)

proceeds and condemnation proceeds as required by Sections 19 and 20 of the Borrower’s Security Instrument; (2) failure of Borrower to comply with Section 15 of the Borrower’s Security Instrument relating to the delivery of books and records, statements, schedules and reports; (3) Borrower’s acquisition of any property or operation of any business not permitted by Section 33 of the Borrower’s Security Instrument; (4) a transfer or the granting of a lien or encumbrance that is an Event of Default under Sections 17 and 21 of the Borrower’s Security Instrument, other than a transfer consisting solely of the involuntary removal or involuntary withdrawal of a general partner in a limited partnership or a manager in a limited liability company; or (5) fraud or written material misrepresentation by Borrower or any officer, director, general partner, member, manager or employee of Borrower in connection with the Loan Application for or creation of the Indebtedness or any request for any action or consent by Lender.  These damages shall be paid only from the available proceeds of an appropriate insurance policy or from Surplus Cash or other escrow accounts.

(c)Notwithstanding Section 8(a) above, Borrower shall provide complete redress as set forth in Section 45(c) of the Borrower’s Security Instrument and shall indemnify and hold harmless the Indemnitees as set forth in Section 48 of the Borrower’s Security Instrument.

9.Voluntary and Involuntary Prepayments.

(a)This Note contains a prepayment restriction and prepayment premium charge acceptable to HUD as to term, amount, and conditions, which are set forth in the attached Rider 1, including that in the event of a default, pursuant to Program Obligations, HUD may override any lockout or any prepayment premium, or combination thereof, in Rider 1 on the last day of any calendar month during any year in which the prepayment premium is greater than one percent (1.00%) in order to facilitate a partial or full refinancing of the Mortgaged Property and avoid a mortgage insurance claim.

(b)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 in the amount provided for in Section 9(a) or in Rider 1, as applicable.

(c)Notwithstanding the provisions of subsections (a) and (b) above, no prepayment premium shall be payable with respect to (1) any prepayment made, other than as a result of acceleration, no more than thirty (30) days before the Maturity Date, (2) any prepayment occurring as a result of the application of any insurance proceeds or condemnation award under the Borrower’s Security Instrument, or (3) any reduction in the original principal amount of the Loan, or any prepayment, resulting from any cost certification or other report required by HUD pursuant to Program Obligations.

(d)Any permitted or required prepayment of less than the 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.

Previous versions obsolete                                Page 4 of 10                            form HUD-94001-ORCF (Rev. 03/13)

(e)Borrower acknowledges that the provisions of this Note relating to prepayment restrictions and prepayment premiums are a material part of the consideration for the Loan, and acknowledges that the terms of this Note are in other respects more favorable to Borrower as a result of Borrower’s voluntary agreement to such provisions.

(f)If the Indebtedness is paid in full while insured under the provisions of the National Housing Act, as amended, Borrower shall pay to Lender such adjusted mortgage insurance premium as may be required by Program Obligations.

(g)All payments to reduce the principal balance hereunder, other than regularly scheduled payments of principal, shall be made to Lender in immediately available funds.  Payments received after 3:00pm Eastern Time will be deemed to have been received on the next Business Day.

10.Costs and Expenses.  Borrower shall pay all expenses and costs, including reasonable fees and out‐of‐pocket expenses of attorneys and expert witnesses and costs of investigation and litigation (including appellate litigation), 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.

11.Forbearance.  Any forbearance by Lender in exercising any right or remedy under this Note, the Borrower’s Security Instrument, or any of the other Loan Documents, or otherwise afforded by applicable law, shall not be a waiver of or preclude the exercise of any other right or remedy.  The acceptance by Lender of payment of all or any part of the Indebtedness after the due date of such payment, or in an amount that 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 on account of the Indebtedness or to exercise any right or remedy for any failure to make prompt payment.  Enforcement by Lender of any security for the Indebtedness shall not constitute an election by Lender of remedies so as to preclude the exercise of any other right or remedy available to Lender.

12.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.

13.Loan Charges.  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 of the Loan Documents, whether considered separately or together with other charges provided for in any of the Loan Documents, violates that law, and Borrower is entitled to the benefit of that law, then such interest or charge is hereby 

Previous versions obsolete                                Page 5 of 10                            form HUD-94001-ORCF (Rev. 03/13)

reduced to the extent necessary to eliminate such violation.  The amounts, if any, previously paid to Lender in excess of the permitted amounts shall be applied by Lender to reduce the Indebtedness.  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 of the 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 this 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 this Note.

14.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.

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

16.Governing Law; Consent to Jurisdiction and Venue.

(a)This Note and the Borrower’s Security Instrument, if it does not itself expressly identify the law that is to apply to it, shall be governed by the laws of the jurisdiction in which the Land is located (the “Property Jurisdiction”), except so long as the Loan is insured or held by HUD, federal law will apply to HUD’s rights and remedies where state or local laws are preempted by federal law.

(b)Borrower agrees that any controversy arising under or in relation to this Note or the Borrower’s Security Instrument shall be litigated exclusively in the Property Jurisdiction except as, so long as the Loan is insured or held by HUD and solely as to rights and remedies of HUD, federal jurisdiction may be appropriate pursuant to any federal requirements.  The state courts, and with respect to HUD’s rights and remedies, federal courts and Governmental Authorities in the Property Jurisdiction, shall have exclusive jurisdiction over all controversies which shall arise under or in relation to this Note, any security for the Indebtedness, or the Borrower’s Security Instrument.  Borrower 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.

17.Rules of Construction.  The captions and headings of the Sections of this Note are for convenience only and shall be disregarded in construing this Note.  Any reference in this Note to a “Section” shall, unless otherwise explicitly provided, be construed as referring, respectively, to a Section of this Note.  Use of the singular in this Note includes the plural and use of the plural includes the singular.  As used in this Note, the term “including” means “including, but not limited to.”

Previous versions obsolete                                Page 6 of 10                            form HUD-94001-ORCF (Rev. 03/13)

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

19.Federal Remedies.  In addition to any rights and remedies set forth in the Borrower’s Regulatory Agreement, HUD has rights and remedies under federal law so long as HUD is the insurer or holder of the Loan, including but not limited to the right to foreclose pursuant to the Multifamily Mortgage Foreclosure Act of 1981, as amended, 12 U.S.C. § 3701, et seq., as amended, when HUD is the holder of this Note.

20.Termination of HUD Rights and Remedies.  At such time as HUD no longer insures or holds this Note, (a) all rights and responsibilities of HUD shall conclude, all mortgage insurance and references to mortgage insurance premiums, all references to HUD, Ginnie Mae and Program Obligations and related terms and provisions shall cease, and all rights and obligations of HUD shall terminate; (b) all obligations and responsibilities of Borrower to HUD shall likewise terminate; and (c) all obligations and responsibilities of Lender to HUD shall likewise terminate; provided, however, nothing contained in this Section 20 shall in any fashion discharge Borrower from any obligations to HUD under the Borrower’s Regulatory Agreement or Program Obligations or Lender from any obligations to HUD under Program Obligations, which occurred prior to termination of the Contract of Insurance.  The provisions of this Section 20 shall be given effect automatically upon the termination of the Contract of Insurance or the transfer of this Note or the Borrower’s Security Instrument by HUD to another party, provided that upon the request of Borrower, Lender or the party to whom this Note or the Borrower’s Security Instrument has been transferred, at no cost to HUD, HUD shall execute such documents as may be reasonably requested to confirm the provisions of this Section 20.

21.WAIVER OF TRIAL BY JURY.  BORROWER 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 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.

22.    ATTACHED RIDERS.  The following Riders are attached to this Healthcare Facility Note:

Rider A    Allonge to Healthcare Facility Note

        

Previous versions obsolete                                Page 7 of 10                            form HUD-94001-ORCF (Rev. 03/13)

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 as of the date first above written. 
                        
	
					
	 
	 
	 
	 
	 

	 
	 
	 
	a Delaware limited liability company

	 
	 
	 
	 
	 

	 
	 
	By:
	 
	 

	 
	 
	 
	 
	 

	 
	 
	 
	 
	 

Previous versions obsolete                                Page 8 of 10                            form HUD-94001-ORCF (Rev. 03/13)

ALLONGE #1
 
TO HEALTHCARE FACILITY NOTE OF 
 
__________________________________________ (“Borrower”)
TO
BERKADIA COMMERCIAL MORTGAGE LLC (“Lender”)

IN THE ORIGINAL PRINCIPAL SUM OF $_______________
DATED AS OF _______________, [2013]

1.    This Allonge #1 to Healthcare Facility Note (this “Allonge”) is attached to and made a part of the Healthcare Facility Note from _________________, a Delaware limited liability company (the “Borrower”), to Berkadia Commercial Mortgage LLC, a Delaware limited liability company (the “Lender”) dated as of _____________, 2013 (the “[Note]”).
2.    Except as provided in Paragraphs 3, and 4 below, the Borrower may not prepay any sums due under this Note prior to [November 1, 2013].  Commencing on [November 1, 2013], Borrower may prepay, upon thirty (30) days advance written notice to the Lender, the indebtedness evidenced by this Note, in whole, on the last day of any month, provided such prepayment is accompanied by the applicable prepayment penalty (expressed as a percentage of the principal amount so prepaid) set forth below:
Prepayment Period                Prepayment Penalty
(1)     from [November 1, 2013 through October 31, 2014]            10%
(2)     from [November 1, 2014 through October 31, 2015]            9%
(3)    from [November 1, 2015 through October 31, 2016]            8%
(4)    from [November 1, 2016 through October 31, 2017]            7%
(5)    from [November 1, 2017 through October 31, 2018]            6%
(6)    from [November 1, 2018 through October 31, 2019]            5%
(7)    from [November 1, 2019 through October 31, 2020]            4%
(8)    from [November 1, 2020 through October 31, 2021]            3%
(9)    from [November 1, 2021 through October 31, 2022]            2%
(10)    from [November 1, 2022 through October 31, 2023]            1%
(11)    from [November 1, 2023] 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 penalty due in connection therewith, shall be in immediately available Federal Funds.

3.    Notwithstanding any prepayment prohibition imposed and/or penalty required by this Allonge with respect to voluntary prepayments made prior to [November 1, 2022], the indebtedness may be prepaid in whole or in part without the consent of the Lender and without prepayment penalty, charges or fees if the U.S. Department of Housing and Urban Development (“HUD”) determines that prepayment will avoid a mortgage insurance claim and is therefore in the best interest of the Federal Government.

Previous versions obsolete                                Page 9 of 10                            form HUD-94001-ORCF (Rev. 03/13)

4.    The provisions of Paragraph 2 of this Allonge shall not apply and no prepayment penalty shall be collected by the Lender with respect to any prepayment which is made by or on behalf of Borrower from insurance proceeds as a result of damage to the property or condemnation awards which may, at the option of the Lender, be applied to reduce the indebtedness evidenced by the Note pursuant to the terms of the Borrower’s Security Instrument given of even date to secure the indebtedness evidenced by the Note to which this Allonge is attached.  In the event of such prepayment, the remaining payments due on the Note may, with the approval of the Lender and the Federal Housing Commissioner, be recast such that the required monthly payments of principal and interest shall be in equal amounts sufficient to amortize the Note over the then remaining term thereof.

5.    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 Lender, in addition to other sums due hereunder, a sum equal to two percent (2%) of the amount of such installment of principal and interest so delinquent.  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 the 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.  Late charges must be separately charged and collected from the Borrower and cannot be deducted from any total monthly mortgage payment, or collected from any reserve escrow residual receipt fund, or from any interest accrued thereto.

6.    Notwithstanding any other provision contained in the Note, it is agreed that the execution of the Note shall impose no personal liability on the Borrower (or any of its officers, directors or shareholders) for payment of the indebtedness evidenced hereby and in the event of a default, the Lender shall look solely to the property described in the Borrower’s Security Instrument and to the rents, issues and profits therefore in satisfaction of the indebtedness evidence hereby and will not seek or obtain any deficiency or personal judgment against the Borrower (or any of its officers, directors or shareholders) except such judgment or decree as may be necessary to foreclose and bar its interest in the property and all other property mortgaged, pledged, conveyed  or assigned to secure payment of the Note except as set out in the Borrower’s Security Instrument of even date given to secure this indebtedness.

                        
	
					
	 
	 
	BORROWER:

	 
	 
	 
	 
	,

	 
	 
	a Delaware limited liability company

	 
	 
	 
	 
	 

	 
	 
	By:
	 
	 

	 
	 
	 
	 
	 

	 
	 
	 
	 
	 

[END OF ALLONGE #1]

Previous versions obsolete                                Page 10 of 10                            form HUD-94001-ORCF (Rev. 03/13)

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