PROMISSORY NOTE
Back
to 10-Q
|
$88,000,000.00
|
March
___, 2007
|
FOR
VALUE
RECEIVED, the undersigned limited liability companies and limited partnerships,
having an address at 0000 Xxxxxxx Xxxxxx, Xxxxx 000, Xxxxxxx, Xxxxxxxxxx 00000
(collectively, the “Borrower”),
hereby
jointly and severally promise to pay to the order of CAPMARK
BANK, a Utah industrial bank,
having
an address at 0000 Xxxxx Xxxx Xxxxxx, Xxxxx 000, Xxxxxxx, Xxxx 00000, together
with its successors and assigns or, if this Note has then been endorsed “to
bearer,” to the bearer of this Note (collectively the “Lender”),
at
Xxxxxx’s said address or at such other place or to such other person as may be
designated in writing to Borrower by Xxxxxx, the principal sum of Eighty-eight
Million and No/100 Dollars ($88,000,000.00) (the “Loan”),
together with interest on the unpaid balance thereof at the rate hereinafter
set
forth. Capitalized terms used herein without definition shall have the meaning
given to such terms in the Loan Agreement (defined herein).
ON
THE
TERMS AND SUBJECT TO THE CONDITIONS which are hereinafter set
forth:
Section
1. Interest
Rate.
1.1 Initial
Note Rate.
Interest shall accrue on the outstanding principal balance of the Loan from
and
after the date hereof (“Closing
Date”)
at the
rate of ______ (___) and _____ percent (________%) per annum (“Note
Rate”).
If
the Loan is funded on a date other than the first (1st)
day of
a calendar month, Borrower shall pay to Lender at the time of funding of the
Loan an interest payment calculated by multiplying (i) the number of days from
and including the Closing Date to (and including) the last day of the current
month by (ii) the Initial Note Rate calculated based on a 360 day year and
paid
for the actual number of days elapsed for any whole or partial month in which
interest is being calculated.
1.2 Calculation
Basis; Interest Accrual Period.
Interest on the outstanding principal balance of the Loan shall be calculated
utilizing a 360 day year and paid for the actual number of days elapsed for
any
whole or partial month in which interest is being calculated. As used herein,
“Interest Accrual Period” shall mean the period beginning on the 1st
day of a
month through the end of such month.
1.3 Default
Interest Rate.
If
Borrower fails to make any payment of principal, interest or fees on the date
on
which such payment becomes due and payable whether at maturity or by
acceleration, or if an Event of Default exists, the Note Rate then payable
on
the Loan shall immediately increase to the Note Rate plus five hundred (500)
basis points (the “Default
Rate”)
and
shall continue to accrue at the Default Rate until full payment of all amounts
then due is received or such Event of Default is cured or waived in writing
by
Lender. Interest at the Default Rate shall also accrue on any judgment obtained
by Xxxxxx in connection with collection of the Loan or enforcement of any
obligations due under the Loan Documents until such judgment is paid in
full.
1
1.4 Adjustments
due to Calculation Errors.
This
Note shall bear interest at the Note Rate; provided, however, that, if Lender
at
any time determines, in the sole but reasonable exercise of its discretion
that
it has miscalculated the amount of the monthly payment of principal and/or
interest (whether because of a miscalculation of the interest or otherwise),
Lender shall give notice to Borrower of the corrected amount of such monthly
payment (and the corrected amount of interest, if applicable) and (a) if the
corrected amount of such monthly payment represents an increase thereof,
Borrower shall, within ten (10) calendar days after the date of such notice,
pay
to Lender any sums that Borrower would have otherwise been obligated under
this
Note to pay to Lender had the amount of such monthly payment not been
miscalculated or (b) if the corrected amount of such monthly payment represents
a decrease thereof, and Borrower is not otherwise in breach or default under
any
of the terms and provisions of the Note, the Loan Agreement of even date
herewith by and between Borrower and Lender (the “Loan Agreement”) or any of the
other Loan Documents, Borrower shall, within ten (10) calendar days thereafter
be paid the sums that Borrower would not have otherwise been obligated to pay
to
Lender had the amount of such monthly payment not been
miscalculated.
1.5 Adjustment
for Impositions on Loan Payments.
All
payments made by Borrower under this Note and the other Loan Documents
(described in Section 8.1.1 below) shall be made free and clear of, and without
deduction or withholding for or on account of, any present or future income,
stamp or other taxes, levies, imposts, duties, charges, fees, deductions or
withholdings, and all liabilities with respect thereto, now or hereafter
imposed, levied, collected, withheld or assessed by any governmental authority
(all such non-excluded taxes, levies, imposts, duties, charges, fees,
deductions, withholdings and liabilities, collectively, “Applicable
Taxes”).
If
Borrower shall be required by law to deduct any Applicable Taxes from or in
respect of any sum payable hereunder to Lender, the following shall apply:
(i)
Borrower shall make all such required deductions and shall pay the full amount
deducted to the relevant taxing authority or other authority in accordance
with
applicable law and (ii) the sum payable to Lender shall be increased in an
amount determined by Lender in its sole discretion, as may be necessary so
that
after making all required deductions (including deductions applicable to
additional sums payable under this Section 1.7), Lender receives an amount
equal
to the sum Lender would have received had no such deductions been made. Payments
made pursuant to this Section 1.5 shall be made within ten (10) Business Days
after Xxxxxx makes written demand therefore.
1.6 Increased
Costs of Maintaining Interest.
Borrower shall pay to Lender all Funding Losses incurred from time to time
by
Lender upon demand. Lender shall deliver to Borrower a statement for any such
sums to which Xxxxxx is entitled to receive pursuant to this Section 1.6, which
statement shall be binding and conclusive absent manifest error. Payment of
Funding Losses hereunder shall be in addition to any obligation to pay any
other
fee in circumstances where such fee(s) would be due and owing under the Loan
Documents. For purposes hereof, “Funding
Losses”
shall
mean the reduction of any amounts received or receivable from Borrower, in
either case, due to the introduction of, or any change in, law or applicable
regulation or treaty (including the administration or interpretation thereof),
whether or not having the force of law, or due to the compliance by Lender
with
any directive, whether or not having the force of law, or request from any
central bank or domestic or foreign governmental authority.
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1.7 Acceleration.
Notwithstanding anything to the contrary contained herein, if Borrower is
prohibited by law from paying any amount due to Lender under Section 1.5 or
Section 1.6 hereof, Lender may elect to declare the unpaid principal balance
of
the Loan, together with all unpaid interest accrued thereon and any other
amounts due hereunder, due and payable within one hundred twenty (120) days
of
Xxxxxx’s written notice to Xxxxxxxx and no Exit Fee (defined in Section 5 below)
shall be due in such event. Xxxxxx’s delay or failure in accelerating the Loan
upon the discovery or occurrence of an event under Section 1.5 or Section 1.6
shall not be deemed a waiver or estoppel against the exercise of such
right.
Section
2. Note
Payments and Prepayment Rights.
2.1 Note
Payments and Payment Dates.
Commencing on the 1st
day of
May, 2007, and continuing on the first (1st) day of each successive month
thereafter, provided that, if the first (1st) day of any month is not a Business
Day, such payment shall be due and payable on the immediately preceding Business
Day (each being a “Payment
Date”),
through and including the Payment Date immediately prior to the Maturity
Date,
Borrower
shall make (i) thirty-six (36) consecutive monthly payments of interest only
at
the Note Rate based upon the principal outstanding during the Interest Accrual
Period in which the applicable Payment Date occurs, and any other amounts due
under the Loan Documents, and (ii) thereafter, consecutive monthly principal
payments in an amount necessary to fully amortize the original principal balance
of the Loan over a twenty five (25) year amortization period based upon the
actual number of days in each month and a three hundred and sixty (360) day
year, together with interest at the Note Rate, and any other amounts due under
the Loan Documents.
2.2 Prepayment.
2.2.1 Open
Date.
Xxxxxxxx acknowledges that Xxxxxx is making the Loan to it at the interest
rate
and upon the other terms herein set forth in reliance upon Xxxxxxxx’s promise to
pay the Loan over the full stated term of this Loan Agreement and that Lender
may suffer loss or other detriment if Borrower were to prepay all or any portion
of the Note prior to its stated Maturity Date. Except as provided in this
Section 2.2,
Xxxxxxxx agrees that Xxxxxxxx has no right to prepay all or any part of the
Loan
prior to the Maturity Date. At any time on and after the twenty-fourth
(24th)
Payment
Date (the “Open Date”), Borrower may prepay the Loan in whole, but not in part,
provided Borrower pays with such prepayment (a) all accrued interest and all
other outstanding amounts (including, without limitation, the Exit Fee) then
due
and unpaid under this Note and under the other Loan Documents, and (b) if the
prepayment is not made on a Payment Date, Borrower pays with such prepayment
the
full interest amount that would have accrued for the period from the date of
prepayment through the day prior to the next Payment Date. Xxxxxx is not
obligated to accept any prepayment unless accompanied by amounts required
hereunder.
2.2.2 Prepayment
Yield Maintenance Premium.
Borrower, at its option, may prepay the Loan in whole, but not in part, by
delivery of the outstanding balance of the Loan together with the Yield
Maintenance Premium (as defined in Section 2.2.3
below)
to Lender on any Payment Date following the Open Date and obtain a release
(a
“Release”) of the Property
3
from
the
lien of the Mortgage; provided that Borrower satisfies all of the conditions
of
this Section 2.2.2.
(i) Conditions
to Release.
Borrower may cause a Release upon the satisfaction of the following conditions
(all as reasonably approved by Xxxxxx):
| (A) |
no
Event or Default shall exist under any of the Loan
Documents.
|
| (B) |
not
less than forty-five (45) (but not more than ninety (90) days prior
written notice shall be given to Lender specifying a date (such date
being
on a Payment Date) on which the Yield Maintenance Premium is to be
delivered (the “Release Date”).
|
| (C) |
all
accrued and unpaid interest and all other sums due under this Note,
the
Loan Agreement and under the other Loan Documents up to the Release
Date
including, without limitation, all fees, costs and expenses incurred
by
Lender and its agents in connection with such Release shall be paid in
full on or prior to the Release
Date.
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| (D) |
Forms
of all documents necessary to release the Property from the liens
created
by the Security Instrument and related UCC financing statements
(collectively, “Release Instruments”), each in appropriate form required
by the state in which the Property is
located.
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| (E) |
Such
other certificates, confirmations, documents or instruments as Lender
reasonably deems necessary in connection with the
Release.
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(ii) Release
Costs and Expenses.
Borrower shall pay all reasonable costs and expenses incurred by Lender in
connection with a Release, which payment is required prior to Lender’s issuance
of the Release and whether or not the Release is completed. Such expenses
include, without limitation, the reasonable fees and disbursements of Xxxxxx’s
legal counsel and a processing fee to cover Xxxxxx’s administrative costs to
process Borrower’s Release request. Lender reserves the right to require that
Borrower post a deposit to cover costs which Lender reasonably anticipates
will
be incurred.
2.2.3 Prohibited
Prepayment Prior to Open Date.
Except
as otherwise set forth in Section 2.2.2
or
Section 2.2.4,
if
payment of all or any part of the principal balance of the Loan is tendered
by
Borrower, a purchaser at foreclosure, a Guarantor, or any other Person prior
to
the Open Date, whether by reason of acceleration of the Loan or otherwise (a
“Prohibited Prepayment”), such tender shall be deemed an attempt to circumvent
the prohibition against prepayment set forth in Section 2.2.1
and, at
Lender’s option, shall be an Event of Default. If a Prohibited Prepayment occurs
and is accepted voluntarily or otherwise by Lender, then, in addition to all
other rights and remedies available to Lender upon an Event of Default, a
Prohibited Prepayment Fee (as defined below) shall be due to compensate Lender
for damages suffered as a result of the Prohibited Prepayment, such amount
shall
be due in addition to the
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outstanding
principal balance, all accrued and unpaid interest and other outstanding amounts
due under the Loan Documents. The “Prohibited Prepayment Fee” shall be a
prepayment premium equal to:
| (i) |
three
percent (3%) of the outstanding principal balance of Note,
plus
|
| (ii) |
the
Yield Maintenance Premium (as defined
below).
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The
“Yield Maintenance Premium” shall be equal to the greater
of (i)
one percent (1%) of the outstanding principal balance of the Note or (ii) the
excess, if any, of (A) the present value (“PV”) of all scheduled interest and
principal payments due on each Payment Date in respect of the Loan for the
period from the date of such accepted prepayment to the Maturity Date, including
the principal amount of the Loan scheduled to be due on the Maturity Date,
discounted at an interest rate per annum equal to the Index (defined below),
based on a 360-day year of twelve 30-day months, over (B) the principal amount
of the Loan outstanding immediately before such accepted prepayment [i.e.,
(PV
of all future payments) - (principal balance at time of acceleration)]. The
foregoing amount shall be calculated by Lender and shall be conclusive and
binding on Borrower (absent manifest error).
For
purposes hereof, “Index” means the average yield for “treasury constant
maturities” published by the Federal Reserve Board in Federal Reserve
Statistical Release H.15 (519) (“FRB Release”), for the second full week
preceding the date of acceleration of the Maturity Date for instruments having
a
maturity coterminous with the remaining term of the Loan. If the FRB Release
is
no longer published, Lender shall select a comparable publication to determine
the Index. If there is no Index for instruments having a maturity coterminous
with the remaining term of the Loan, then the weighted average yield to maturity
of the Indices with maturities next longer and shorter than such remaining
average life to maturity shall be used, calculated by averaging (and rounding
upward to the nearest whole multiple of 1/100 of 1% per annum, if the average
is
not such a multiple) the yields of the relevant Indices (rounded, if necessary,
to the nearest 1/100 of 1% with any figure of 1/200 of 1% or above rounded
upward).
2.2.4 Prepayment
as a Result of a Casualty or Condemnation or Charges on Lender.
Prepayments arising from Xxxxxx’s application of insurance proceeds upon the
occurrence of a Casualty or the application of a condemnation award upon the
occurrence of a Condemnation may be made prior to the Open Date without being
deemed a Prohibited Prepayment and, whenever made, without payment of a
Prohibited Prepayment Fee.
2.2.5 Notice
Irrevocable.
Notwithstanding any provision of this Note to the contrary, Xxxxxxxx’s notice of
prepayment in accordance with Section 2.2.2
above
shall be irrevocable, and the principal balance to be prepaid shall be
absolutely and unconditionally due and payable on the date specified in such
notice.
2.3 Payment
Debit Account.
During
the term of the Loan, Xxxxxxxx shall establish and maintain a deposit account
(the “Payment Debit Account”) with a bank or financial institution acceptable to
Lender and authorize such bank or financial institution to permit Lender to
debit the Payment Debit Account from time to time without limitation and without
further
5
notice,
consent or instructions from Borrower. In the absence of an Event of Default
(as
defined below), Lender shall make transfers from the Payment Debit Account
only
for payment of principal, interest and deposits to reserves and escrows due
from
Borrower on a Payment Date under the Note, the Loan Agreement or any of the
other Loan Documents. Borrower solely will be responsible for maintaining funds
in the Payment Debit Account which are sufficient to pay the aggregate amounts
due under the Loan Documents on each Payment Date. If sufficient funds are
not
available in the Payment Debit Account to make the full payment when due, Lender
shall not be required to notify Borrower or demand that Borrower pay the
deficiency prior to declaring an Event of Default. Debits made by Lender from
the Payment Debit Account for less than the full monthly payment amount will
not
release Borrower from Borrower's obligations to pay the full amount due nor
be
deemed a waiver of Xxxxxx's right to collect the full payment amount or to
declare an Event of Default. Debits made by Lender from the Payment Debit
Account following the occurrence of any Event of Default under the Loan
Documents will not be deemed a waiver of that default by Lender or otherwise
prejudice, in any manner, Xxxxxx's rights or remedies with respect thereto.
Lender will have the right, upon reasonable prior notice to Borrower, to
discontinue debiting payments from the Payment Debit Account for the purposes
set forth herein and, if at any time such debiting has been discontinued, to
reinstate the requirement that Borrower maintain a Payment Debit Account in
accordance with the terms of this Note. Borrower will not be permitted to close,
or permit the Payment Debit Account to be closed, without Xxxxxx's prior written
consent unless the Loan has been satisfied in full. To the extent there are
any
inconsistencies between this Section 2.3 and any lockbox, deposit account or
other cash management agreement executed by Borrower in connection with the
Loan, the terms of such lockbox, deposit account or other cash management
agreement, as applicable, shall govern and control.
Section
3. Application
of Payments.
Payments made by Borrower on account hereof shall be applied, first, toward
any
Late Fees (defined in Section 8.3 below) or other fees and charges due
hereunder, second, toward payment of any interest due at the Default Rate,
third, toward payment of any interest due at the Note Rate, and fourth, toward
payment of principal. Notwithstanding the foregoing, if any advances made by
Xxxxxx under the terms of any instruments securing this Note have not been
repaid, any payments made may, at the option of Lender, be applied, first,
to
repay such advances and interest thereon, with the balance, if any, applied
as
set forth in the preceding sentence.
Section
4. Maturity
Date.
Anything in this Note to the contrary notwithstanding, the entire unpaid balance
of the principal amount hereof and all interest accrued thereon through the
end
of the current Interest Accrual Period and including interest accruing at the
Default Rate, to and including the Maturity Date (as defined below) together
with all fees, costs and amounts due and payable under the Loan Documents shall,
unless sooner paid, and except to the extent that payment thereof is sooner
accelerated, be and become due and payable on April 1, 2012 (the “Maturity
Date”);
provided that if the first (1st) day of that month is not a Business Day, such
payment shall be due and payable on the immediately preceding Business Day.
Section
5. Exit
Fee.
As
consideration of Xxxxxx’s making of the Loan to Xxxxxxxx, Xxxxxxxx agrees to pay
a deferred financing fee (“Exit
Fee”)
to
Lender in an amount equal to one percent (1.0%) of the original principal amount
of the Loan. Although the Exit Fee is earned
6
in
full
on the date hereof, Xxxxxx hereby agrees to defer payment of the Exit Fee until
the earlier of (a) the date when full repayment of the Loan occurs, (b) the
Maturity Date, or (c) the date on which the Loan has been accelerated following
an Event of Default. Notwithstanding the sale or transfer of the Loan by Capmark
Bank, in whole or in part, to a successor lender, unless Capmark Bank has
transferred its interest in the Exit Fee to its successors or assigns as Lender,
the Exit Fee shall be payable to Capmark Bank. Notwithstanding the foregoing,
if
Borrower refinances the Loan with the proceeds of a loan funded by, or arranged
for Borrower by, Capmark Finance Inc., or Capmark Bank, and Capmark Finance
Inc., or Capmark Bank receives a contractually agreed upon sum in connection
with the financing or arrangement thereof, then no Exit Fee shall be due.
Borrower acknowledges that neither Capmark Finance Inc., nor Capmark Bank,
has
any obligation to make such loan.
Section
6. Delivery
of Payments.
All
payments due to Lender under the Loan Documents are to be paid in lawful tender
of the United States of America, in immediately available funds, directly to
Lender at Lender’s office located at 000 Xxxxx Xxxx, X.X. Box 809, Horsham,
Pennsylvania 19044, Attn: Servicing - Accounting Manager, or at such other
place
as Lender may designate to Borrower in writing from time to time. All amounts
due under the Loan Documents shall be paid without setoff, counterclaim or
any
other deduction whatsoever. No payment due under this Note or any of the other
Loan Documents shall be deemed paid to Lender until received by Lender at its
designated office on a Business Day prior to 2:00 p.m. Eastern Standard Time.
Any payment received after the time established by the preceding sentence shall
be deemed to have been paid on the immediately following Business Day. Each
payment that is paid to Lender within ten (10) days prior to the date on which
such payment is due, and prior to its scheduled Payment Date, shall not be
deemed a prepayment and shall be deemed to have been received on the Payment
Date solely for the purpose of calculating interest due. If any payment received
by Lender is deemed by a court of competent jurisdiction to be a voidable
preference or fraudulent conveyance under any bankruptcy, insolvency or other
debtor relief law, and is required to be returned by Xxxxxx, then the obligation
to make such payment shall be reinstated, notwithstanding that the Note may
have
been marked satisfied and returned to Borrower or otherwise canceled, and such
payment shall be immediately due and payable upon demand.
Section
7. Security.
The
debt
evidenced by this Note is to be secured by, among other things, (a) twelve
(12) separate mortgages and deeds of trusts (collectively, the “Mortgage”)
by each
Borrower, for the benefit of Lender, and (b) a
Payment and Performance Guaranty Agreement of
even
date herewith (the“Guaranty
Agreement”),
given
by Emeritus Corporation (the “Guarantor”),
for
the benefit of Lender.
Section
8. Default.
8.1 Events
of Default.
Anything in this Note to the contrary notwithstanding, on the occurrence of
any
of the following events (each of which is referred to herein, together with
each
of the Events of Default defined and described in the Loan Agreement and the
Mortgage as an “Event
of Default”),
Lender
may, in the exercise of its sole and absolute discretion, accelerate
7
the
debt
evidenced by this Note, in which event the entire outstanding principal balance
and all interest and fees accrued thereon shall immediately be and become due
and payable without further notice:
8.1.1 Failure
to Pay or Perform.
If (a)
any payment of principal and interest is not paid in full on or before the
Payment Date on which such payment is due or if the Exit Fee is not paid in
full
when required, (b) if unpaid principal, accrued but unpaid interest and all
other amounts outstanding under the Loan Documents are not paid in full on
or
before the Maturity Date or (c) there exists an uncured default under any of
the
Loan Documents which has been executed by Borrower and/or Guarantor and/or
Manager, and such default is not cured within the grace or cure period, if
any,
provided in any of such Loan Documents.
8.1.2 Bankruptcy.
(a) If
Borrower or Guarantor or Manager
(i)
applies for or consents to the appointment of a receiver, trustee or liquidator
of Borrower or Guarantor or Manager, as the case may be, or of all or a
substantial part of its assets, (ii) files a voluntary petition in bankruptcy,
or admits in writing its inability to pay its debts as they come due, (iii)
makes an assignment for the benefit of creditors, (iv) files a petition or
an
answer seeking a reorganization or an arrangement with creditors or seeking
to
take advantage of any insolvency law, (v) performs any other act of bankruptcy,
or (vi) files an answer admitting the material allegations of a petition filed
against Borrower or Guarantor or
Manager in any bankruptcy, reorganization or insolvency proceeding;
or
(b) if
(i) an
order, judgment or decree is entered by any court of competent jurisdiction
adjudicating Borrower or Guarantor or Manager a bankrupt or an insolvent, or
approving a receiver, trustee or liquidator of Borrower or Guarantor or Manager
or of all or a substantial part of its assets, or (ii) there otherwise commences
with respect to Borrower or Guarantor or Manager or any of its assets any
proceeding under any bankruptcy, reorganization, arrangement, insolvency,
readjustment, receivership or like law or statute, and if such order, judgment,
decree or proceeding continues unstayed for any period of sixty (60) consecutive
days after the expiration of any stay thereof.
8.1.3 Judgments.
If any
judgment for the payment of money in excess of $250,000.00 hereafter awarded
against Borrower or Guarantor or Manager by any court of competent jurisdiction
remains unsatisfied or otherwise in force and effect for a period of thirty
(30)
days after the date of such award.
8.2 No
Impairment of Rights.
Nothing
in this Section shall be deemed in any way to alter or impair any right which
Lender has under this Note or the Mortgage, or any other Loan Documents, or
at
law or in equity, to accelerate such debt on the occurrence of any other Event
of Default provided herein or therein, whether or not relating to this
Note.
8.3 Late
Fees.
Without
limiting the generality of the foregoing provisions of this Section, if any
payment due on a Payment Date is not received in full on or before the Payment
Date, Borrower shall pay to Lender, immediately and without demand, a late
payment charge, for each month during which such payment delinquency exists,
equal to five percent (5%) of such
8
amount
(“Late
Fees”)
to
defray the expenses incurred by Xxxxxx in handling and processing such
delinquent payment and to compensate Lender for the loss of use of such
delinquent payment.
Section
9. Costs
of Enforcement.
Borrower shall pay to Lender on demand the amount of any and all expenses
incurred by Xxxxxx (a) in enforcing its rights hereunder or under the Mortgage
and/or the Loan Documents, (b) as the result of the occurrence of an Event
of
Default by Borrower in performing its obligations under this Note, including
but
not limited to the expense of collecting any amount owed hereunder, and of
any
and all attorneys’ fees incurred by Lender in connection with such default,
whether suit be brought or not, and (c) in protecting the security for the
Loan
and Xxxxxxxx’s obligations under the Loan Documents. Such expenses shall be
added to the principal amount hereof, shall be secured by the Mortgage and
shall
accrue interest at the Default Rate.
Section
10. Xxxxxxxx’s
Waiver of Certain Rights.
Borrower and any endorser, guarantor or surety hereby waives the exercise of
any
and all exemption rights which it holds at law or in equity with respect to
the
debt evidenced by this Note, and of any and all rights which it holds at law
or
in equity to require any valuation, appraisal or marshalling, or to have or
receive any presentment, protest, demand and notice of dishonor, protest, demand
and nonpayment as a condition to Lender’s exercise of any of its rights under
this Note or the Loan Documents.
Section
11. Extensions.
The
Maturity Date and/or any other date by which any payment is required to be
made
hereunder may be extended by Xxxxxx, in writing, from time to time in the
exercise of its sole discretion, without in any way altering or impairing
Xxxxxxxx’s or Guarantor’s liability hereunder.
Section
12. General.
12.1 Applicable
Law.
This
Note shall be given effect and construed by application of the laws of the
State
of Washington (without regard to the principles thereof governing conflicts
of
laws), and any action or proceeding arising hereunder, and each of Xxxxxx and
Borrower submits (and waives all rights to object) to non-exclusive personal
jurisdiction in the State of Washington, for the enforcement of any and all
obligations under the Loan Documents except that if any such action or
proceeding arises under the Constitution, laws or treaties of the United States
of America, or if there is a diversity of citizenship between the parties
thereto, so that it is to be brought in a United States District Court, it
shall
be brought in the United States District Court for the Western District of
Washington or any successor federal court having original
jurisdiction.
12.2 Headings.
The
headings of the Sections, subsections, paragraphs and subparagraphs hereof
are
provided herein for and only for convenience of reference, and shall not be
considered in construing their contents.
12.3 Construction.
As used
herein, (a) the term “person”
means a
natural person, a trustee, a corporation, a limited liability company, a
partnership and any other form of legal entity, and (b) all references made
(i)
in the neuter, masculine or feminine gender shall be
9
deemed
to
have been made in all such genders, (ii) in the singular or plural number shall
be deemed to have been made, respectively, in the plural or singular number
as
well, and (iii) to any Section, subsection, paragraph or subparagraph shall,
unless therein expressly indicated to the contrary, be deemed to have been
made
to such Section, subsection, paragraph or subparagraph of this
Note.
12.4 Severability.
No
determination by any court, governmental body or otherwise that any provision
of
this Note or any amendment hereof is invalid or unenforceable in any instance
shall affect the validity or enforceability of (a) any other such provision
or
(b) such provision in any circumstance not controlled by such determination.
Each such provision shall be valid and enforceable to the fullest extent allowed
by, and shall be construed wherever possible as being consistent with,
applicable law.
12.5 No
Waiver.
Xxxxxx
shall not be deemed to have waived the exercise of any right which it holds
hereunder unless such waiver is made expressly and in writing. No delay or
omission by Xxxxxx in exercising any such right (and no allowance by Xxxxxx
to
Borrower of an opportunity to cure a default in performing its obligations
hereunder) shall be deemed a waiver of its future exercise. No such waiver
made
as to any instance involving the exercise of any such right shall be deemed
a
waiver as to any other such instance, or any other such right. Further,
acceptance by Xxxxxx of all or any portion of any sum payable under, or partial
performance of any covenant of, this Note, the Mortgage or any of the other
Loan
Documents, whether before, on, or after the due date of such payment or
performance, shall not be a waiver of Lender’s right either to require prompt
and full payment and performance when due of all other sums payable or
obligations due thereunder or hereunder or to exercise any of Xxxxxx’s rights
and remedies hereunder or thereunder.
12.6 Waiver
of Jury Trial; Service of Process; Court Costs.
BORROWER
HEREBY WAIVES TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO WHICH XXXXXXXX AND
XXXXXX MAY BE PARTIES ARISING OUT OF, IN CONNECTION WITH, OR IN ANY WAY
PERTAINING TO, THIS NOTE AND/OR ANY OF THE OTHER LOAN DOCUMENTS. IT IS AGREED
AND UNDERSTOOD THAT THIS WAIVER CONSTITUTES A WAIVER OF TRIAL BY JURY OF ALL
CLAIMS AGAINST ALL PARTIES TO SUCH ACTIONS OR PROCEEDINGS, INCLUDING CLAIMS
AGAINST PARTIES WHO ARE NOT PARTIES TO THIS NOTE. THIS WAIVER IS KNOWINGLY,
WILLINGLY AND VOLUNTARILY MADE BY BORROWER, UPON CONSULTATION WITH COUNSEL
OF
XXXXXXXX’S CHOICE, AND BORROWER HEREBY REPRESENTS THAT NO REPRESENTATIONS OF
FACT OR OPINION HAVE BEEN MADE BY ANY INDIVIDUAL TO INDUCE THIS WAIVER OF TRIAL
BY JURY OR TO IN ANY WAY MODIFY OR NULLIFY ITS EFFECT. XXXXXXXX FURTHER
REPRESENTS AND WARRANTS THAT IT HAS BEEN REPRESENTED IN THE SIGNING OF THIS
NOTE
AND IN THE MAKING OF THIS WAIVER BY INDEPENDENT LEGAL COUNSEL, OR HAS HAD THE
OPPORTUNITY TO BE REPRESENTED BY INDEPENDENT LEGAL COUNSEL SELECTED OF ITS
OWN
FREE WILL, AND THAT IT HAS HAD THE OPPORTUNITY TO DISCUSS THIS WAIVER WITH
COUNSEL. XXXXXXXX HEREBY IRREVOCABLY DESIGNATES XXXX XXXXXXXXXX, AND HIS/HER
10
SUCCESSORS
IN OFFICE, AS THE TRUE AND LAWFUL ATTORNEY OF BORROWER FOR THE PURPOSE OF
RECEIVING SERVICE OF ALL LEGAL NOTICES AND PROCESS ISSUED BY ANY COURT IN THE
STATE OF WASHINGTON AS WELL AS SERVICE OF ALL PLEADINGS AND OTHER DOCUMENTS
RELATED TO ANY LEGAL PROCEEDING OR ACTION ARISING OUT OF THIS NOTE. XXXXXXXX
AGREES THAT SERVICE UPON SAID XXXX XXXXXXXXXX SHALL BE VALID REGARDLESS OF
XXXXXXXX’S WHEREABOUTS AT THE TIME OF SUCH SERVICE AND REGARDLESS OF WHETHER
XXXXXXXX RECEIVES A COPY OF SUCH SERVICE, PROVIDED THAT LENDER SHALL HAVE MAILED
A COPY TO BORROWER IN ACCORDANCE WITH THE NOTICE PROVISIONS HEREIN. XXXXXXXX
AGREES TO PAY ALL COURT COSTS AND REASONABLE ATTORNEY’S FEES INCURRED BY XXXXXX
IN CONNECTION WITH ENFORCING ANY PROVISION OF THIS NOTE. NOTWITHSTANDING THE
FOREGOING, XXXXXX AGREES TO USE REASONABLE EFFORTS TO PROVIDE BORROWER WITH
NOTICE OF THE FILING OF ANY LAWSUIT BY XXXXXX AGAINST
BORROWER.
12.7 Offset.
Upon
the occurrence of an Event of Default, Lender may set-off against any principal
and interest owing hereunder, any and all credits, money, stocks, bonds or
other
security or property of any nature whatsoever on deposit with, or held by,
or in
the possession of, Lender, to the credit of or for the account of Borrower,
without notice to or consent of Borrower or Guarantor.
12.8 Non-Exclusivity
of Rights and Remedies.
None of
the rights and remedies herein conferred upon or reserved to Lender is intended
to be exclusive of any other right or remedy contained herein or in any of
the
other Loan Documents and each and every such right and remedy shall be
cumulative and concurrent, and may be enforced separately, successively or
together, and may be exercised from time to time as often as may be deemed
necessary or desirable by Lender.
12.9 Incorporation
by Reference.
All of
the agreements, conditions, covenants and provisions contained in each of the
Loan Documents are hereby made a part of this Note to the same extent and with
the same force and effect as if they were fully set forth herein. Borrower
covenants and agrees to keep and perform, or cause to be kept and performed,
all
such agreements, conditions, covenants and provisions strictly in accordance
with their terms.
12.10 Joint
and Several Liability.
If
Borrower consists of more than one person and/or entity, each such person and/or
entity agrees that its liability hereunder is joint and several.
12.11 Business
Purpose.
Borrower represents and warrants that the Loan evidenced by this Note is being
obtained solely for the purpose of acquiring or carrying on a business,
professional or commercial activity and is not for personal, agricultural,
family or household purposes.
12.12 Interest
Limitation.
Notwithstanding anything to the contrary contained herein or in the Mortgage
or
in any other of the Loan Documents, the effective rate of interest on the
11
obligation
evidenced by this Note shall not exceed the lawful maximum rate of interest
permitted to be paid. Without limiting the generality of the foregoing, in
the
event that the interest charged hereunder results in an effective rate of
interest higher than that lawfully permitted to be paid, then such charges
shall
be reduced by the sum sufficient to result in an effective rate of interest
permitted and any amount which would exceed the highest lawful rate already
received and held by Lender shall be applied to a reduction of principal and
not
to the payment of interest. Xxxxxxxx agrees that for the purpose of determining
highest rate permitted by law, any non-principal payment (including, without
limitation, Late Fees and other fees) shall be deemed, to the extent permitted
by law, to be an expense, fee or premium rather than interest.
12.13 Modification.
This
Note may be modified, amended, discharged or waived only by an agreement in
writing signed by the party against whom enforcement of such modification,
amendment, discharge or waiver is sought.
12.14 Time
of the Essence.
Time is
strictly of the essence of this Note.
12.15 Negotiable
Instrument.
Xxxxxxxx agrees that this Note shall be deemed a negotiable instrument, even
though this Note may not otherwise qualify, under applicable law, absent this
paragraph, as a negotiable instrument.
12.16 Interest
Rate after Judgment.
If
judgment is entered against Borrower on this Note, the amount of the judgment
entered (which may include principal, interest, fees, Late Fees and costs)
shall
bear interest at the Default Rate, to be determined on the date of the entry
of
the judgment.
12.17 Relationship.
Xxxxxxxx and Xxxxxx intend that the relationship between them shall be solely
that of creditor and debtor. Nothing contained in this Note or in any of the
other Loan Documents shall be deemed or construed to create a partnership,
tenancy-in-common, joint tenancy, joint venture or co-ownership by or between
Borrower and Lender.
12.18 Waiver
of Automatic Stay.
BORROWER HEREBY AGREES THAT, IN CONSIDERATION OF XXXXXX’S AGREEMENT TO MAKE THE
LOAN AND IN RECOGNITION THAT THE FOLLOWING COVENANT IS A MATERIAL INDUCEMENT
FOR
LENDER TO MAKE THE LOAN, IN THE EVENT THAT BORROWER SHALL (A) FILE WITH ANY
BANKRUPTCY COURT OF COMPETENT JURISDICTION OR BE THE SUBJECT OF ANY PETITION
UNDER ANY SECTION OR CHAPTER OF TITLE 11 OF THE UNITED STATES CODE, AS AMENDED
(THE “BANKRUPTCY
CODE”),
OR SIMILAR LAW OR STATUTE; (B) BE THE SUBJECT OF ANY ORDER FOR RELIEF ISSUED
UNDER THE BANKRUPTCY CODE OR SIMILAR LAW OR STATUTE; (C) FILE OR BE THE SUBJECT
OF ANY PETITION SEEKING ANY REORGANIZATION, ARRANGEMENT, COMPOSITION,
READJUSTMENT, LIQUIDATION, DISSOLUTION, OR SIMILAR RELIEF UNDER ANY PRESENT
OR
FUTURE FEDERAL OR STATE ACT OR LAW RELATING TO BANKRUPTCY, INSOLVENCY, OR OTHER
RELIEF FOR DEBTORS; (D) HAVE SOUGHT OR CONSENTED TO OR ACQUIESCED IN THE
APPOINTMENT OF ANY TRUSTEE, RECEIVER, CONSERVATOR, OR LIQUIDATOR; OR (E) BE
THE
12
SUBJECT
OF AN ORDER, JUDGMENT OR DECREE ENTERED BY ANY COURT OF COMPETENT JURISDICTION
APPROVING A PETITION FILED AGAINST ANY BORROWER FOR ANY REORGANIZATION,
ARRANGEMENT, COMPOSITION, READJUSTMENT, LIQUIDATION, DISSOLUTION, OR SIMILAR
RELIEF UNDER ANY PRESENT OR FUTURE FEDERAL OR STATE ACT OR LAW RELATING TO
BANKRUPTCY, INSOLVENCY OR RELIEF FOR DEBTORS, THEN, TO THE EXTENT PERMITTED
BY
APPLICABLE LAW AND SUBJECT TO COURT APPROVAL, XXXXXX SHALL THEREUPON BE
ENTITLED, AND BORROWER HEREBY IRREVOCABLY CONSENTS TO, AND WILL NOT CONTEST,
AND
AGREES TO STIPULATE TO, RELIEF FROM ANY AUTOMATIC STAY OR OTHER INJUNCTION
IMPOSED BY SECTION 362 OF THE BANKRUPTCY CODE OR SIMILAR LAW OR STATUTE
(INCLUDING, WITHOUT LIMITATION, RELIEF FROM ANY EXCLUSIVE PERIOD SET FORTH
IN
SECTION 1121 OF THE BANKRUPTCY CODE) OR OTHERWISE, ON OR AGAINST THE EXERCISE
OF
THE RIGHTS AND REMEDIES OTHERWISE AVAILABLE TO LENDER AS PROVIDED IN THE LOAN
DOCUMENTS, AND AS OTHERWISE PROVIDED BY LAW, AND BORROWER HEREBY IRREVOCABLY
WAIVES ITS RIGHTS TO OBJECT TO SUCH RELIEF.
12.19 “Business
Day”.
Any
reference to the term Business Day in this Note shall mean any day other than
a
Saturday, a Sunday, or days when Federal Banks located in the State of New
York
or Commonwealth of Pennsylvania are closed for a legal holiday or by government
directive.
12.20 Successors
and Assigns Bound.
The
obligations set forth in this Note shall be binding upon Borrower and its
successors and assigns.
IN
WITNESS WHEREOF, each Borrower has duly executed and delivered this Note, or
caused it to be duly executed and delivered on its behalf by its duly authorized
representatives, on the day and year first above written.
[REMAINDER
OF THIS PAGE IS INTENTIONALLY LEFT BLANK]
(SIGNATURE
PAGES ARE ATTACHED)
13
BORROWER:
EMERIHRT
XXXXXXXXX XX,
a
Delaware limited partnership
By: ESC
X.X.
XX, Inc.,
a
Washington corporation
its
General Partner
By:
/s/Xxxx
Xxxxxxxxxx _____
Xxxx
Xxxxxxxxxx,
Authorized
Signatory
14
BORROWER:
EMERIHRT
MEDICAL CENTER LP,
a
Delaware limited partnership
By: ESC
X.X.
XX, Inc.,
a
Washington corporation
its
General Partner
By:
/s/Xxxx
Xxxxxxxxxx _____
Xxxx
Xxxxxxxxxx,
Authorized
Signatory
15
BORROWER:
EMERIHRT
OAKWELL FARMS LP,
a
Delaware limited partnership
By: ESC
X.X.
XX, Inc.,
a
Washington corporation
its
General Partner
By:
/s/Xxxx
Xxxxxxxxxx ________
Xxxx
Xxxxxxxxxx,
Authorized
Signatory
16
BORROWER:
EMERIHRT
STONEBRIDGE RANCH LP,
a
Delaware limited partnership
By: ESC
X.X.
XX, Inc.,
a
Washington corporation
its
General Partner
By:
_/s/Xxxx
Xxxxxxxxxx ________
Xxxx
Xxxxxxxxxx,
Authorized
Signatory
17
BORROWER:
EMERIHRT
BLOOMSBURG LLC,
a
Delaware limited liability company
By: Emeritus
Corporation,
a
Washington corporation
its
Sole
Member
By:
/s/Xxxx
Xxxxxxxxxx Xxxx
Xxxxxxxxxx,
Director
of Real Estate and Legal Affairs
18
BORROWER:
EMERIHRT
CREEKVIEW LLC,
a
Delaware limited liability company
By: Emeritus
Corporation,
a
Washington corporation
its
Sole
Member
By:
_/s/Xxxx
Xxxxxxxxxx _______
Xxxx
Xxxxxxxxxx,
Director
of Real Estate and Legal Affairs
19
BORROWER:
EMERIHRT
DANVILLE LLC,
a
Delaware limited liability company
By: Emeritus
Corporation,
a
Washington corporation
its
Sole
Member
By:
_/s/Xxxx
Xxxxxxxxxx ________
Xxxx
Xxxxxxxxxx,
Director
of Real Estate and Legal Affairs
20
BORROWER:
EMERIHRT
GREENSBORO LLC,
a
Delaware limited liability company
By: Emeritus
Corporation,
a
Washington corporation
its
Sole
Member
By:
_/s/Xxxx
Xxxxxxxxxx _____
Xxxx
Xxxxxxxxxx,
Director
of Real Estate and Legal Affairs
21
BORROWER:
EMERIHRT
HARRISBURG LLC,
a
Delaware limited liability company
By: Emeritus
Corporation,
a
Washington corporation
its
Sole
Member
By:
_/s/Xxxx
Xxxxxxxxxx
Xxxx
Xxxxxxxxxx,
Director
of Real Estate and Legal Affairs
22
BORROWER:
EMERIHRT
HARRISONBURG LLC,
a
Delaware limited liability company
By: Emeritus
Corporation,
a
Washington corporation
its
Sole
Member
By:
/s/Xxxx
Xxxxxxxxxx
Xxxx
Xxxxxxxxxx,
Director
of Real Estate and Legal Affairs
23
BORROWER:
EMERIHRT
RAVENNA LLC,
a
Delaware limited liability company
By: Emeritus
Corporation,
a
Washington corporation
its
Sole
Member
By:
_/s/Xxxx
Xxxxxxxxxx ___
Xxxx
Xxxxxxxxxx,
Director
of Real Estate and Legal Affairs
24
BORROWER:
EMERIHRT
ROANOKE LLC,
a
Delaware limited liability company
By: Emeritus
Corporation,
a
Washington corporation
its
Sole
Member
By:
_/s/Xxxx
Xxxxxxxxxx ____
Xxxx
Xxxxxxxxxx,
Director
of Real Estate and Legal Affairs
25
