Document:

ex107125multifamilynotedoaks.htm

EX-10.71.25

 

MULTIFAMILY NOTE

	
US $4,475,000.00

	
November 1, 2010

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 Four Million Four Hundred Seventy-Five Thousand and No/100 Dollars (US $4,475,000.00), 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 December, 2010.

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 five and thirty-eight hundredths percent (5.38%).

Lender: The holder of this Note.

Loan: The loan evidenced by this Note.

Loan Term:  120 months.

Maturity Date:  The first day of November, 2020, 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 – Texas

	
Form 4144

	
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Fannie Mae

	
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© 1997-2009 Fannie Mae

  

  

  

Security Instrument:  A Multifamily Deed of Trust, Assignment of Rents, Security Agreement and Fixture Filing 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 April, 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 54250, 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 Twenty-Five Thousand Seventy-Two and 66/100 Dollars (US $25,072.66), 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.

	
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(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.

(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

	
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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 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

	
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such sums because of a bankruptcy, receivership or similar judicial proceeding, or (ii) with 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").

	
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(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.

	
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(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 and Lender intend at all times to comply with the law of the State of Texas governing the maximum rate or amount of interest payable on or in connection with this Note and the Indebtedness (or applicable United States federal law to the extent that it permits Lender to contract for, charge, take, reserve or receive a greater amount of interest than under Texas law).  If the applicable law is ever judicially interpreted so as to render usurious any amount payable under this Note or under any other Loan Document, or contracted for, charged, taken, reserved or received with respect to the Indebtedness, or of acceleration of the maturity of this Note, or if any prepayment by Borrower

	
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results in Borrower having paid any interest in excess of that permitted by any applicable law, then Borrower and Lender expressly intend that all excess amounts collected by Lender shall be applied to reduce the unpaid principal balance of this Note (or, if this Note has been or would thereby be paid in full, shall be refunded to Borrower), and the provisions of this Note, the Security Instrument and any other Loan Documents immediately shall be deemed reformed and the amounts thereafter collectible under this Note or any other Loan Document reduced, without the necessity of the execution of any new documents, so at to comply with any applicable law, but so as to permit the recovery of the fullest amount otherwise payable under this Note or any other Loan Document.  The right to accelerate the maturity of this Note does not include the right to accelerate any interest which has not otherwise accrued on the date of such acceleration, and Lender does not intend to collect any unearned interest in the event of acceleration.  All sums paid or agreed to be paid to Lender for the use, forbearance or detention of the Indebtedness shall, to the extent permitted by any applicable law, be amortized, prorated, allocated and spread throughout the full term of the Indebtedness until payment in full so that the rate or amount of interest on account of the Indebtedness does not exceed the applicable usury ceiling.  Notwithstanding any provision contained in this Note, the Security Instrument or any other Loan Document that permits the compounding of interest, including any provision by which any accrued interest is added to the principal amount of this Note, the total amount of interest that Borrower is obligated to pay and Lender is entitled to receive with respect to the Indebtedness shall not exceed the amount calculated on a simple (i.e. noncompounded) interest basis at the maximum rate on principal amounts actually advanced to or for the account of Borrower, including all current and prior advances and any advances made pursuant to the Security Instrument or other Loan Documents (such as for the payment of taxes, insurance premiums and similar expenses or costs).

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.

	
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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.

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

	 

	
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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

	  	  
	  	
EMERITOL DOWLEN OAKS LLC, a Delaware limited liability company

	  	  
	  	
By:  Batus, LLC, a Delaware limited liability company

	  	  
	  	
Its:  Sole Member

	  	  
	  	
By:   Summerville Senior Living, Inc., a Delaware corporation

	  	  
	  	
Its:     Administrative Member

	  	  
	  	  
	  	  
	  	
By:        /s/ Eric Mendelsohn

	  	
Name:   Eric Mendelsohn

	  	
Title:    Senior Vice President Corporate Development

	  	  

Fannie Mae Commitment NO. 862838

	
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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:     November 1, 2010

	
Multifamily Non-Recourse Fixed Rate Note – Texas

	
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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.

 

	
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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

	
(z-y)

	
+b

	
(x-y)

	  	  	  

	
  

	
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.

	
/s/ EM

	
Borrower Initials

 

	
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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: /s/ EM

	
OPPENHEIMER: 2824328 v05 10/29/2010

	
Seniors Housing Modifications to Note

	
Form 4186

	
Page B-1

	  	
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© 2000-2004 Fannie Maeex107503amendloanagrmntnhp.htm

EX-10.75.03

 

FOURTH AMENDMENT TO LOAN AGREEMENT

 

THIS FOURTH AMENDMENT TO LOAN AGREEMENT (this “Agreement”) is made as of November 1, 2010 (the “Effective Date”) by and between EMERITUS CORPORATION, a Washington corporation (“Borrower”), and NATIONWIDE HEALTH PROPERTIES, INC., a Maryland corporation (“Lender”), with respect to the following:

 

RECITALS:

 

A. Borrower and Lender (as successor to Healthcare Realty Trust Incorporated, a Maryland corporation (“HRT”)) are parties to that certain Second Amended and Restated Loan Agreement dated as of March 3, 2005, as amended by that certain Amendment to Loan Agreement dated as of August 6, 2007, that certain Second Amendment to Loan Agreement dated as of March 3, 2008 and that certain Third Amendment to Loan Agreement dated as of October 22, 2008 (the “Third Amendment”) (as amended, the “Loan Agreement”), pursuant to the terms and conditions of which a loan in the principal amount of Twenty-One Million Four Hundred Twenty-Six Thousand Dollars ($21,426,000) is due from Borrower to Lender (the “Loan”).  Unless otherwise defined herein, all initially-capitalized terms herein shall have the same meanings given to such terms in the Loan Agreement.

 

B. The Loan is evidenced by that certain Second Amended and Restated Note dated March 3, 2005, in the original principal amount of the Loan, executed by Borrower in favor of HRT (the “Note”), which Note has been assigned from HRT to Lender pursuant to that certain Allonge dated as of April 26, 2007.

 

C. Borrower has requested that Lender extend the Maturity Date of the Note and modify certain other terms of the Loan.  Lender is willing to grant Borrower’s request upon the terms and subject to the conditions set forth in this Agreement.

 

NOW, THEREFORE, in consideration of the foregoing Recitals, the mutual covenants and agreements contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Lender and Borrower hereto agree as follows:

 

1. Modification to Loan Documents.  Subject to Section 2 below, the Loan Documents shall be deemed amended as follows effective as of the Effective Date:

 

(a) The term “Maturity Date” as defined in Section 1 of the Note shall mean March 31, 2017.

 

(b) Section 2(a) of the Note shall be deleted in its entirety and the following substituted therefor:

 

“Interest shall accrue on the principal amount outstanding hereunder at the following rates of interest:  (i) commencing on November 1, 2010 and continuing through the expiration of the first (1st) Loan Year (as defined below), a per annum rate equal to eight and one-half percent (8.50%), and (ii) commencing with the second Loan Year and

 

  

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continuing on the commencement of each subsequent Loan Year thereafter, the interest rate shall be increased to equal the applicable per annum rate for the corresponding Loan Year as set forth in the following table:

 

	
Loan Year

	
Basic Interest Rate

	
2

	
8.65%

	
3

	
8.80%

	
4

	
8.95%

	
5

	
9.10%

	
6

	
9.25%

	
7

	
9.40%

As used herein, “Loan Year” shall mean the twelve (12) month period commencing on November 1st of each year.”

 

(c) Section 5 of the Note, including, but not limited to, the last paragraph of Section 5 of the Note that was added pursuant to Section 1(c) of the Third Amendment, shall be deleted in its entirety and the following substituted therefor:

 

“Provided that Borrower has provided Lender with not less than one hundred eighty (180) nor more than two hundred forty (240) days’ prior written notice of its election to prepay principal amounts outstanding under this Note, Borrower shall have the right prepay the Loan, in whole or in part, together with all accrued but unpaid interest and other sums owed to Lender hereunder, at any time prior to the Maturity Date.”

 

(d) The term “Affiliate Obligation” as defined in Section 1.2 of the Loan Agreement is hereby deleted in its entirety and the following substituted therefor:

 

“Affiliate Obligation” means all indebtedness and obligations of Borrower and any Affiliate of Borrower to Lender or any Affiliate of Lender now existing or hereafter arising, including, without limitation, obligations arising under the Lease Documents and the Existing HRT Leases, indebtedness evidenced by promissory notes, lease agreements, guaranties or otherwise and obligations under such indebtedness documents and all other documents executed by Borrower or any Affiliate of Borrower in connection therewith, and any extensions, modifications, substitutions or renewals thereof.  Without limiting the generality of the foregoing, as used herein the term “Affiliate Obligation” shall be deemed and construed to include: (a) the obligations of the tenant under that certain Master Lease dated as of October 2, 2006 by and among Lender and its Affiliates, as landlord, and Summerville at Camelot Place LLC, a Delaware limited liability company, Summerville at Hillen Vale LLC, a Delaware limited liability company, Summerville at Lakeview LLC, a Delaware limited liability company, Summerville at Ridgewood Gardens LLC, a Delaware limited liability company, Summerville at North Hills LLC, a Delaware limited liability company, and The Inn at Medina LLC, a Delaware limited liability company, collectively, as tenant; as amended by (i) that certain First Amendment to Master Lease dated as of

 

  

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December 1, 2006, (ii) that certain Second Amendment to Master Lease dated as of January 2, 2007, (iii) that certain Third Amendment to Master Lease dated as of March 3, 2008, and (iv) that certain Fourth Amendment to Master Lease dated as of November 1, 2010 (as amended, the “Summerville Master Lease”); (b) the obligations of Borrower and/or its Affiliate(s) under the terms of that certain Amended and Restated Promissory Note in the original principal amount of Thirty Million Dollars ($30,000,000) dated as of November 1, 2010 executed and delivered by Borrower, as maker, in favor of Lender, as holder.

 

(e) The term “State” as defined in Section 1.2 of the Loan Agreement shall mean the State of California.

 

(f) The paragraph following Section 9.10 of the Loan Agreement under the heading “Consent to Jurisdiction” is hereby amended by replacing Davidson County, Tennessee with Orange County, California.

 

(g) All of the other Loan Documents not specifically described in this Section 1 shall be deemed amended to reflect the amendments described herein.

 

2. Amendment Conditions.  Notwithstanding Lender’s negotiation, preparation or execution of this Agreement or any of the instruments or documents required herein and notwithstanding anything else to the contrary, no modification or amendment to the Loan, the Note or the Loan Documents shall be deemed to have occurred unless and until all of the following conditions (the “Amendment Conditions”) have been satisfied:

 

(a) Borrower shall execute and acknowledge, where applicable, and deliver to Lender each of the following:

 

(i) this Agreement in form and substance satisfactory to Lender;

 

(ii) that certain Amended and Restated Promissory Note in the original principal amount of Thirty Million Dollars ($30,000,000) dated as of the date hereof in form and substance satisfactory to Lender;

 

(iii) that certain Fourth Amendment to Master Lease dated as of the date hereof in form and substance satisfactory to Lender;

 

(iv) amendments to the Mortgages in form and substance satisfactory to Lender (the “Mortgage Amendments”); and

 

(v) any instructions to Fidelity National Title Insurance Company (the “Title Company”) as may be requested by the Title Company as necessary to carry out the terms of this Agreement.

 

(b) The Title Company shall be unconditionally and irrevocably committed to issue to Lender, at Borrower’s sole cost and expense, such endorsements to the existing lender’s title insurance policies covering the facilities known as (i) Anderson Place, in Anderson, South

 

  

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Carolina, and (ii) Creston Village, in Paso Robles, California (collectively, the “Title Policies”), as Lender may reasonable require, including a CLTA 110.5 endorsement or its equivalent.

 

(c) Borrower shall deposit with the Title Company an amount sufficient to pay for the cost of all endorsements to the Title Policies required pursuant to Section 2(b) above and all other fees and expenses, including recording fees, incurred by the Title Company in connection with this transaction.

 

(d) The Mortgage Amendments shall have been properly recorded in the applicable counties and states.

 

3. Reaffirmation of Obligations.

 

(a) Borrower hereby acknowledges and reaffirms its obligations under the Note and the other Loan Documents, as such documents have been amended by this Agreement, and agrees that all references to a particular Loan Document in the Loan Documents shall be deemed to refer to such Loan Document as amended by this Agreement.

 

(b) Borrower hereby acknowledges and agrees that the execution and delivery of this Agreement by Lender shall not be deemed or construed to constitute a waiver by Lender of any default existing under any of the Loan Documents or a commitment by Lender to otherwise modify the Loan Documents.

 

4. Representations and Warranties.  As a material inducement for Lender to enter into this Agreement, Borrower represents and warrants to Lender that the following matters are true and correct as of the execution of this Agreement and also will be true and correct as of the Third Amendment Effective Date:

 

(a) To the best of Borrower’s knowledge and after giving effect to all of the amendments reflected in this Agreement, no Event of Default by Borrower exists under the Loan Agreement, the Note, or any of the other Loan Documents, and no event exists which, with the giving of notice or the passage of time, or both, would give rise to an Event of Default by Borrower hereunder or under any of the Loan Documents; and

 

(b) To the best of Borrower’s knowledge, Lender is not in default and has performed all of its obligations under the Loan Agreement and the other Loan Documents, and Borrower does not have any claim against Lender or defense against the enforcement of the Note, the Loan Agreement or any of the other Loan Documents.

 

5. Effect on Loan Documents.  Except as specifically amended pursuant to the terms of this Agreement, the terms and conditions of the Loan Documents shall remain unmodified and in full force and effect.  In the event of any inconsistencies between the terms of this Agreement and any terms of any of the Loan Documents, the terms of this Agreement shall govern and prevail.

 

6. Governing Law.  This Agreement and the Loan Agreement shall be governed by, and construed and enforced in accordance with, the laws of the State of California without giving effect to the conflicts-of-law rules and principles of such state.

 

  

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7. Counterparts.  This Agreement may be executed and acknowledged in any number of counterparts, all of which executed and acknowledged counterparts shall together constitute a single document.  Signature and acknowledgment pages may be detached from the counterparts and attached to a single copy of this document to physically form one document, which may be recorded.

 

8. Further Assurances.  At any time or from time to time upon the reasonable request of Lender, Borrower shall, at its expense, promptly execute, acknowledge and deliver, or cause to be executed, acknowledged, or delivered, such further instruments and documents and perform such other acts as may be necessary or advisable, in the reasonable discretion of Lender, for carrying out the intention or facilitating the performance of the terms of this Agreement, or for assuring the validity of, perfecting, or preserving the lien of any other Loan Documents, as modified by this Agreement.

 

9. Attorneys’ Fees.  In the event of any dispute or litigation concerning the enforcement, validity or interpretation of this Agreement, or any part thereof, the losing party shall pay all costs, charges, fees and expenses (including reasonable attorneys’ fees) paid or incurred by the prevailing party, regardless of whether any action or proceeding is initiated relative to such dispute and regardless of whether any such litigation is prosecuted to judgment.

 

10. Entire Agreement.  This Agreement contains the entire agreement between the parties relating to the subject matters contained herein.  Any oral representations or statements concerning the subject matters herein shall be of no force or effect.

 

 

[Signatures on next page]

 

  

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IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above written.

 

 

“BORROWER”

 

EMERITUS CORPORATION,

 

a Washington corporation

 

By:           /s/ Robert C. Bateman

 

Name:      Robert C. Bateman

 

Title:        EVP & CFO

 

 

 

 

 

[Signatures continue on next page]

 

 

  

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“LENDER”

 

NATIONWIDE HEALTH PROPERTIES, INC.,

 

a Maryland corporation

 

By:           /s/ Brent Chappell

 

Name:     Brent Chappell

 

Title:       V.P. Portfolio Management

 

  

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