NOTE
$3,100,000.00 August 28, 2003
Seattle, Washington
FOR VALUE RECEIVED, EMERITUS CORPORATION, a corporation organized
under the laws of the State of Washington ("Borrower"), shall pay to the order
of HEALTH CARE REIT, INC., a corporation organized under the laws of the State
of Delaware ("Lender"), the principal sum of Three Million One Hundred Thousand
Dollars ($3,100,000.00), or so much thereof as shall have been advanced to
Borrower, with interest on so much thereof as shall from time to time be
outstanding at the rate of interest set forth below, until fully paid.
1. Definitions.
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"Business Day" means any day which is not a Saturday or Sunday or
a public holiday under the laws of the United States of America or the State of
Ohio.
"Closing Date" means the date of the first disbursement of
proceeds under this Note.
"Collateral Document" means the Mortgage and any other document
providing security for or guarantee of repayment of this Note.
"Commencement Date" means [i] the Closing Date if the Closing
Date occurs on the first day of a month or [ii] the first day of the month after
the Closing Date if the Closing Date occurs on any day other than the first day
of the month.
"Default Rate" means the greater of [i] 2.50% plus the then
applicable interest rate or [ii] 18.50%.
"Event of Default" has the meaning set forth in 8.
"Fixed Rate Increaser Amount" means 50 basis points per year.
"Maturity Date" means the third anniversary of the Commencement
Date.
"Mortgage" means, collectively, each Leasehold Mortgage of even
date given by Borrower for the benefit of Lender.
"State" means the State of Ohio.
2. Interest Rate.
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(a) Initial Rate. Interest shall accrue on the principal amount outstanding
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hereunder from time to time from and after the Closing Date until the first
anniversary of the Commencement Date at the rate of 12% per annum. Thereafter,
on each anniversary of the Commencement Date, the interest rate then in effect
will be increased on an annual basis by the Fixed Rate Increaser Amount.
(b) Default Rate. After the occurrence and during the continuance of an
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Event of Default, Borrower shall pay interest on this Note, and on any judgment
on this Note, at the Default Rate.
(c) Computation Method. All interest rates shall be calculated based on the
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actual number of days elapsed over a 360-day year (365/360 method).
3. Payments.
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(a) On the Closing Date, Borrower shall make a payment of interest on the
outstanding principal balance of the Loan for the period commencing on the
Closing Date and ending on the day before the Commencement Date;
(b) Commencing on the first day of the first month after the Commencement
Date and on the first day of each month thereafter until the first day of the
month before the Maturity Date, Borrower shall make monthly payments of interest
only sufficient to pay all interest accrued pursuant to 2 hereof;
(c) On the Maturity Date, Borrower shall make a balloon payment equal to the
outstanding balance of this Note including the outstanding principal
balance, all accrued and unpaid interest and all charges, expenses and other
amounts payable by Borrower to Lender.
4. Method and Place of Payment. Borrower shall make all payments on this
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Note at One SeaGate, Suite 1500, P.O. Box 1475, Toledo, Ohio 43603-1475, or at
such other place as the holder hereof may designate. Borrower shall make all
payments in lawful money of the United States of America by wire transfer of
immediately available funds.
5. Prepayment. Borrower shall have the privilege of prepaying this Note in
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whole or in part at any time without penalty.
6. Late Charge. Borrower acknowledges that any default in any payment due
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under this Note will result in loss and additional expense to Lender in handling
such delinquent payments and meeting Xxxxxx's other financial obligations.
Because such loss and additional expense is extremely difficult and impractical
to ascertain, Xxxxxxxx agrees that if any payment hereunder (other than the
final payment on maturity) is not paid within 10 days after the due date,
Borrower shall pay, as a reasonable estimate of such loss and expense, a late
charge equal to the lesser of [i] 5% of the amount of the overdue payment, or
[ii] the maximum amount permitted by applicable law.
7. Application of Payments. Unless Lender elects otherwise, in its sole
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discretion, all payments and other amounts received by Xxxxxx shall be credited
as follows: [i] first to any charges, costs, expenses and fees payable by
Borrower under this Note or incurred by Lender for the protection of any
collateral securing the payment of this Note, if not paid by Borrower by the due
date; [ii] second to interest on the foregoing amounts at the Default Rate
from the due date or date of payment by Xxxxxx, as the case may be; [iii] third
to accrued but unpaid interest on this Note; [iv] fourth, to the principal
amount outstanding; and [v] the balance, if any, to Borrower.
8. Default. The occurrence of an Event of Default under the Mortgage shall
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be an Event of Default hereunder. Without waiving any prior or subsequent Event
of Default, Lender may waive any Event of Default or, with or without
waiving any Event of Default, remedy any default.
9. Acceleration and Other Remedies. Upon the occurrence of any Event of
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Default, in addition to all other remedies under the Mortgage, any other
security for or guarantee of this Note, and at law or in equity, at the option
of Lender [i] the outstanding principal balance of this Note and all accrued and
unpaid interest thereon and all other amounts payable by Borrower to Lender
shall be immediately due and payable, and [ii] all such amounts shall bear
interest at the Default Rate from the date of the Event of Default until paid.
Lender may exercise either or both options without notice or demand of any kind.
Additionally, Lender may take whatever action at law or in equity as may appear
necessary or desirable to collect any monies then due and/or thereafter to
become due.
10. Governing Law. This Note shall be governed by and construed in
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accordance with the internal laws of the State, without giving effect to the
conflict of laws rules thereof.
11. Time is of the Essence. Time is of the essence in the payment of this
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Note. All grace periods in any Collateral Document that apply to a default
shall run concurrently.
12. Holidays. If any installment of this Note becomes due on a day which is
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not a Business Day, Borrower may pay the installment on the next succeeding
day on which banking institutions are open.
13. Waivers. None of the following shall be a course of dealing, estoppel,
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waiver or the like on which any party to this Note or any Collateral Document
may rely: [i] Lender's acceptance of one or more late or partial payments; [ii]
Lender's forbearance from exercising any right or remedy under this Note or
any Collateral Document; or [iii] Lender's forbearance from exercising any right
or remedy under this Note or any Collateral Document on any one or more
occasions. Xxxxxx's exercise of any rights or remedies or a part of a right or
remedy on one or more occasions shall not preclude Lender from exercising the
right or remedy at any other time. Xxxxxx's rights and remedies under this
Note, the Collateral Documents, and the law and equity are cumulative to, but
independent of, each other.
14. Representations. Borrower [i] acknowledges that Lender would not have
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extended the credit evidenced by this Note and will not continue to extend the
credit but for the obligations of Borrower; [ii] warrants that Borrower has
executed this Note or Collateral Documents to induce Lender to extend and to
continue to extend the credit; [iii] warrants that Borrower has received good
and valuable consideration for executing this Note or any Collateral Document;
and [iv] warrants that Borrower has not executed this Note or any Collateral
Document in reliance upon the existence of the security for or guaranty or
promise of the payment of this Note.
15. Indulgences. Without notice, Lender may do or refrain from doing
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anything affecting this Note or any Collateral Document, as many times as Lender
desires, including the following: [i] granting or not granting any
indulgences to anyone liable for payment of this Note or to anyone liable under
any Collateral Document; [ii] releasing any security or anyone or any property
from liability on this Note or any Collateral Document; [iii] amending this Note
or any Collateral Document, including extending the time for payment of this
Note, in accordance the terms of such Collateral Documents.
16. No Release of Liability. No obligations of Borrower shall be affected
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by [i] any default in this Note or any Collateral Document when accepted by
Lender or arising any time thereafter; [ii] the unenforceability of or defect in
this Note or in any Collateral Document or any interest conveyed by any
Collateral Document; [iii] any decline in the value of any interest in any
property conveyed by any Collateral Document; or, [iv] the insolvency,
dissolution, liquidation or winding up of affairs of Borrower or the start of
insolvency proceedings by or against any such party. EACH PARTY TO THIS NOTE
WAIVES ALL SURETYSHIP AND OTHER SIMILAR DEFENSES. Borrower may not enforce any
right of subrogation or contribution unless and until this Note is paid in full
and waives all rights of subrogation against any party that is subject to
insolvency proceedings unless and until this Note is paid in full.
17. Notices. All notices, demands, requests and consents (hereinafter
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"notices") given pursuant to this Note shall be in writing, and shall be served
by [i] personal delivery, [ii] United States Mail, postage prepaid; or [iii]
nationally recognized overnight courier to the following addresses:
To Borrower: Emeritus Corporation
0000 Xxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxxxxx 00000
To Lender: Health Care REIT, Inc.
One SeaGate, Suite 1500
P.O. Box 1475
Toledo, Ohio 43603
All notices shall be deemed to be given upon the earlier of actual receipt or
three days after deposit in the United States mail or one business day after
deposit with the overnight courier. Xxxxxx and Xxxxxxxx may change their notice
address at any time by giving the other party written notice of such change.
18. Representation and Warranty Regarding Business Purpose. Borrower
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represents and warrants that the loan evidenced by this Note is for business
purposes only and not for personal, family, household, or agricultural purposes.
19. Security. This Note is secured by the Mortgage and all other collateral
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for the Loan.
20. Protest. Except as otherwise expressly provided in the Mortgage, each
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party to this Note waives protest, notice of protest, demand, dishonor or
default, presentment for payment, notice of intent to declare this Note
immediately due and payable, notice of declaration that this Note is immediately
due and payable in full, all other notices, and all demands.
21. Savings Clause. The intention of Xxxxxx and Borrower is to comply with
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the laws of the State concerning the rate of interest on this Note.
Notwithstanding any other provision in this Note or in any other document given
in connection with this Note, Borrower shall not be required to pay interest in
excess of the maximum lawful rate. To the extent the amount of interest
provided in this Note ever exceeds the maximum lawful rate (the "Excess
Interest"), [i] the provisions of this paragraph shall govern and control; [ii]
Borrower shall not be obligated to pay any Excess Interest; [iii] any Excess
Interest that Lender may have received shall be credited against the then
outstanding balance due under this Note and, if the Excess Interest exceeds the
outstanding balance, the excess amount shall be refunded to Borrower; [iv] the
rate of interest under this Note or the Default Rate, as applicable, shall be
automatically reduced to the maximum lawful rate and this Note and any other
documents given in connection therewith shall be deemed reformed and modified to
reflect such reduction; and [v] subject to the foregoing provisions of this
paragraph, Borrower shall have no action or remedy against Lender for any
damages whatsoever or any defense to enforcement of the note or any other
documents given in connection therewith arising out of the payment or collection
of any Excess Interest. In determining whether interest paid or payable on this
Note exceeds the maximum lawful rate, Xxxxxxxx agrees to exclude voluntary
prepayment fees from the calculation of interest and to spread the total amount
of interest throughout the entire contemplated term of this Note.
22. Attorney's Fees and Expenses. Borrower shall pay to Lender all
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reasonable costs and expenses incurred by Lender in administering the Loan and
the security for the Loan, enforcing or preserving Lender's rights under this
Note or any Collateral Document, and in all matters of collection, whether or
not an Event of Default has actually occurred or has been declared and
thereafter cured, including but not limited to, [i] attorney's and paralegal's
fees and disbursements; [ii] the fees and expenses of any litigation,
administrative, bankruptcy, insolvency, receivership and any other similar
proceeding; [iii] court costs; [iv] the expenses of Lender, its employees,
agents, attorneys and witnesses in preparing for litigation, administrative,
bankruptcy, insolvency and other proceedings and for lodging, travel, and
attendance at meetings, hearings, depositions, and trials; and [v] consulting
and witness fees incurred by Xxxxxx in connection with any litigation or other
proceeding.
23. Severability. If any clause, provision, section or article of this Note
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is ruled invalid by any court of competent jurisdiction, the invalidity of
such clause, provision, section, or article shall not affect any of the
remaining provisions hereof.
24. Assignment. Borrower shall not assign its rights nor delegate its
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obligations under this Note.
25. Amendment. This Note may not be amended except in writing signed by
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Borrower and Lender. All references to this Note, whether in this Note or in
any other document or instrument, shall be deemed to incorporate all amendments,
modifications, and renewals of this Note and all substitutions made
therefor after the date hereof.
26. CONSENT TO JURISDICTION. BORROWER HEREBY IRREVOCABLY SUBMITS AND
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CONSENTS TO THE NON-EXCLUSIVE JURISDICTION AND VENUE OF ANY STATE OR FEDERAL
COURT HAVING JURISDICTION OVER XXXXX COUNTY, OHIO FOR ANY ACTION OR PROCEEDING
TO ENFORCE OR DEFEND ANY MATTER ARISING FROM OR RELATED TO [I] THE COMMITMENT
LETTER FOR THE LOAN EVIDENCED BY THIS NOTE; [II] THIS NOTE; OR [III] ANY LOAN
DOCUMENT EXECUTED IN CONNECTION WITH THIS NOTE. BORROWER HEREBY IRREVOCABLY
WAIVES, TO THE FULLEST EXTENT BORROWER MAY EFFECTIVELY DO SO, THE DEFENSE OF AN
INCONVENIENT FORUM TO THE MAINTENANCE OF ANY SUCH ACTION OR PROCEEDING.
XXXXXXXX AGREES THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE
CONCLUSIVE AND MAY BE ENFORCED IN ANY OTHER JURISDICTION BY SUIT ON THE JUDGMENT
OR IN ANY OTHER MANNER PROVIDED BY LAW.
XXXXXXXX AGREES NOT TO INSTITUTE ANY LEGAL ACTION OR PROCEEDING
AGAINST LENDER OR ANY DIRECTOR, OFFICER, EMPLOYEE, AGENT OR PROPERTY OF LENDER,
CONCERNING ANY MATTER ARISING OUT OF OR RELATING TO THE COMMITMENT LETTER OR ANY
LOAN DOCUMENT IN ANY COURT OTHER THAN A STATE OR FEDERAL COURT HAVING
JURISDICTION OVER XXXXX COUNTY, OHIO UNLESS SUCH COURTS LACK SUBJECT MATTER OR
IN PERSONAM JURISDICTION IN WHICH CASE SUCH ACTION OR PROCEEDING MAY BE BROUGHT
IN ANY COURT WHICH HAS SUCH JURISDICTION.
BORROWER HEREBY CONSENTS TO SERVICE OF PROCESS BY LENDER IN ANY MANNER
AND IN ANY JURISDICTION PERMITTED BY LAW. NOTHING HEREIN SHALL AFFECT OR IMPAIR
XXXXXX'S RIGHT TO SERVE LEGAL PROCESS IN ANY MANNER PERMITTED BY LAW, OR
XXXXXX'S RIGHT TO BRING ANY ACTION OR PROCEEDING AGAINST BORROWER OR THE
PROPERTY OF BORROWER IN THE COURTS OF ANY OTHER JURISDICTION.
27. WAIVER OF JURY TRIAL. TO THE FULLEST EXTENT PERMITTED BY LAW, XXXXXX,
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BY ITS ACCEPTANCE OF THIS NOTE, AND BORROWER HEREBY KNOWINGLY AND VOLUNTARILY
WAIVE THE RIGHT TO A JURY TRIAL IN ANY ACTION, PROCEEDING OR COUNTERCLAIMS
ARISING OUT OF OR RELATING TO THIS NOTE.
[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, the undersigned has executed this Note effective
as of the date first set forth above.
EMERITUS CORPORATION
By: Xxxxxxx X. Xxxxxxx
Title: Director of Real Estate
