FORM OF SECURED NOTE
$ ---------- -----------------------
__________________, 1998
FOR VALUE RECEIVED, _______________________________, a
___________________________, with offices at
___________________________________________________ ("Maker"), hereby promises
to pay to the order of ELDERTRUST OPERATING LIMITED PARTNERSHIP, a Delaware
limited partnership, with offices at 000 XxXxxxxx Xxxx, Xxxxx 000, Xxxxxxx
Xxxxxx, XX 00000 (herein with all subsequent holders of this Note referred to,
collectively, as "Holder"), at the offices of Holder or at such other place as
Holder shall designate in writing, the principal amount of ________________
_____________________________________ ($_____________), or so much thereof as
may be disbursed pursuant to the Loan Agreement (as defined below) (the "Loan"),
in lawful money of the United States of America, and in immediately available
funds, with interest thereon from the date hereof at the Interest Rate stated
below ("Interest"), all such principal and Interest to be paid as set forth
below, without offset.
1. Interest Rate. The interest rate hereon (the "Interest
Rate") (computed on the basis of actual days elapsed and a year of 360 days)
shall be ______ percent (____%) per annum; provided, however, that in the event
that the Maturity Date (as defined below) is extended pursuant to Section 8.15
of the Loan Agreement (as defined below), the Interest Rate for such extension
periods shall be revised to equal the Three Year Treasury Rate on the date
immediately preceding the applicable extension period, plus ___________________
percent (____%). As used herein, the term "Three Year Treasury Rate" shall mean
the yield on the United States Treasury note or bond, as identified by Xxxxxx,
having the closest maturity (month and year) to the date which is three (3)
years from the first day of the applicable extension period.
2. Security. This Note evidences a loan advanced in connection
with that certain Construction Loan Agreement (the "Loan Agreement"), dated as
of the date hereof between Maker and Holder, and is secured by (a) a Mortgage
and Security Agreement, dated as of the date hereof, to be executed by Maker in
favor of Holder (the "Mortgage"), which Mortgage was or shall be recorded
following its execution, and is intended to and does encumber, among other
things, that certain parcel of land, together with the buildings, structures and
other improvements now or hereafter erected thereon and owned by Maker located
in ____________ Township, Pennsylvania, as more fully described in the Mortgage
(and referred to in the Mortgage and herein as the "Mortgaged Premises"); (b) an
Assignment of
Rents and Leases by Maker in favor of Holder (the "Assignment of Leases"); (c)
an Assignment of Agreements affecting Real Estate by Maker in favor of Holder
(the "Assignment of Agreements"); (d) a Guaranty and Suretyship Agreement by
______________________________, an affiliate of Maker, in favor of Xxxxxx (the
"Guaranty"); and (e) other documents given or to be given as security for the
Loan. This Note, together with the Mortgage, Assignment of Leases, Assignment of
Agreements, Guaranty and all other documents executed in connection therewith,
as the same may be modified, amended, supplemented or assigned from time to
time, are sometimes referred to herein collectively as the "Loan Documents" or
individually as a "Loan Document."
3.Repayment; Maturity.
3.1. Interest on the outstanding principal balance hereof
shall accrue from the date hereof and shall be due and payable in arrears on the
first business day of each month, commencing on the first such day of the month
next commencing after the date hereof.
3.2. The entire unpaid principal amount hereof, together with
all accrued but unpaid Interest thereon and all other amounts payable hereunder
or under any of the Loan Documents shall be due and payable on the earlier to
occur of the following: (a) the date on which the Mortgaged Premises is sold or
transferred by Maker to any third party and (b) _________________
________________, (the "Maturity Date"), or such earlier date resulting from
acceleration by Holder of the indebtedness evidenced by this Note in connection
with any Event of Default (as defined below) or otherwise. The Maturity Date may
be extended by up to ____ additional twelve (12) month periods pursuant to
Section 8.15 of the Loan Agreement.
3.3 Any payment on this Note coming due on a Saturday, Sunday
or a day which is a legal holiday in the place at which a payment is to be made
hereunder shall be made on the next succeeding day which is a business day in
such place, and any such extension of the time of payment shall be included in
the computation of interest hereunder.
4.Additional Payments, Default Rate.
4.1. In addition to the payments provided for in Paragraph 3
above, Maker promises to pay on demand any future advances or additional monies
required to be paid or advanced by Maker, or paid or advanced on behalf of Maker
by Xxxxxx, pursuant to the terms of the Loan Agreement, the Mortgage and the
other Loan Documents. Maker promises to pay all costs and expenses (including
without limitation reasonable attorneys' fees and disbursements) incurred by
Holder in connection with the collection hereof or in the protection or
realization of any collateral now or hereafter given as security for the
repayment hereof. This Note shall evidence, and the Mortgage and other Loan
Documents shall secure the payment of, all such
-2-
sums so advanced or paid, and such advances or payments shall bear interest at
the same rate as the principal indebtedness hereunder.
4.2. From and after the Maturity Date (as extended, if
appropriate) and from and after the occurrence of any Event of Default
irrespective of any acceleration or otherwise, all amounts remaining unpaid or
thereafter accruing hereunder, as well as any amounts owing pursuant to the
foregoing Paragraph 4.1, shall bear interest at a default rate (the "Default
Rate") of two (2) percent (2%) per annum above the Interest Rate.
5. Application of Interest. In the event the interest
provisions hereof or any exactions provided for herein or in any of the Loan
Documents shall result in an effective rate of interest which, for any period of
time, exceeds the limit of any usury or other law applicable to the loan
evidenced hereby, all sums in excess of those lawfully collectible as interest
for the period in question shall, without further agreement or notice between or
by any party hereto, be applied toward repayment of outstanding principal
immediately upon receipt of such moneys by Holder with the same force and effect
as if Maker had specifically designated such extra sums to be so applied to
principal and Holder had agreed to accept such extra payment(s) in repayment of
the principal balance hereof. Notwithstanding the foregoing, however, Holder may
at any time and from time to time elect, by notice in writing to Maker, to
reduce or limit the collection of any interest to such sums which shall not
result in any payment of interest in excess of that lawfully collectable. Maker
agrees that in determining whether or not any interest payable under this Note
exceeds the highest rate permitted by law, any non-principal payment shall be
deemed to the extent permitted by law to be an expense, fee, premium or penalty,
rather than interest.
6. Events of Default. The occurrence of any one or more of the
following shall constitute an "Event of Default" hereunder:
(a) Failure to pay, when due, the principal, any interest or
any other sum payable hereunder (whether upon the Maturity Date or upon
acceleration or otherwise);
(b) The occurrence of any Event of Default, as defined in the
Loan Agreement; or
(c) The occurrence of any Event of Default, as defined in the
Mortgage.
7.Remedies. If an Event of Default exists, Holder may exercise
any right, power or remedy permitted by law or as set forth herein or in the
Mortgage, the Loan Agreement or in any other Loan Document and, without limiting
the generality of the foregoing, Holder shall thereupon have the right to
declare the entire unpaid principal amount hereof and all interest accrued
hereon, and all other sums secured by the Mortgage, the Loan Agreement or by any
other Loan Document to be, and such
-3-
principal, interest and other sums shall thereupon become, forthwith due and
payable. Holder shall have the right of set-off against all property of the
undersigned now or at any time in Xxxxxx's possession.
8.Rights Cumulative. The rights and remedies of Holder as
provided herein and in any other Loan Document, and all warrants of attorney
contained herein and therein shall be cumulative and concurrent, and may be
pursued singly, successively or together against Maker or the Mortgaged Premises
or any other collateral security for payment of amounts due hereunder, at the
sole discretion of Holder; and the failure to exercise any such right or remedy
shall in no event be construed as a waiver or release of the same. No single or
partial exercise by the Holder of any right hereunder or under any Loan Document
shall preclude any other or further exercise of any other rights. Holder shall
not by any act of omission or commission be deemed to waive any of its rights or
remedies under this Note unless such waiver is in writing and signed by Xxxxxx,
and then only to the extent specifically set forth therein; and a waiver of one
event shall not be construed as continuing or as a bar to or waiver of such
right or remedy on a subsequent event.
9.Waivers.
9.1. Maker expressly waives presentment for payment, demand,
notice of dishonor, protest, notice of protest, diligence of collection, and
(except as otherwise expressly provided herein or in any other Loan Document to
the contrary) any other notice of any kind, and hereby consents to any number of
renewals and extensions of time of payment hereof, which renewals and extensions
shall not affect the liability of Maker.
9.2. Maker hereby waives and releases all errors, defects and
imperfections in any proceedings instituted by Holder under the terms of this
Note, or under any other Loan Document, as well as all benefit that might accrue
to Maker by virtue of any present or future laws exempting the Mortgaged
Premises, or any other property, real, personal or mixed, or any part of the
proceeds arising from any sale of such property, from attachment, levy or sale
under execution, or providing for any stay of execution, exemption from civil
process, or extension of time for payment. Xxxxx agrees that any real estate
that may be levied upon pursuant to a judgment obtained by virtue hereof, or
upon any writ of execution issued thereon, may be sold upon any such writ in
whole or in part in any order desired by Xxxxxx.
10. Construction of Terms. The word "Maker" whenever used
herein is intended to and shall be construed to mean the entity who has executed
this Note, and its successors and assigns, and the liability of each such person
or entity shall be joint and several. All covenants, promises, agreements,
authorizations, waivers, releases, options, undertakings, rights and benefits
made or given herein by Maker shall bind and affect all persons who are
hereinabove defined as "Maker" as fully as though all such persons were
specifically named herein whenever the term "Maker" is
-4-
used. Whenever used, the singular number shall include the plural, the plural
the singular, and the use of any gender shall be applicable to all genders.
11. JURISDICTION; TRIAL BY JURY. MAKER HEREBY CONSENTS TO THE
EXCLUSIVE JURISDICTION OF THE COURTS OF THE COMMONWEALTH OF PENNSYLVANIA AND/OR
THE COURTS OF THE UNITED STATES LOCATED IN THE COMMONWEALTH OF PENNSYLVANIA IN
ANY AND ALL ACTIONS OR PROCEEDINGS ARISING HEREUNDER OR PURSUANT HERETO, AND
IRREVOCABLY AGREES TO SERVICE OF PROCESS BY CERTIFIED MAIL, RETURN RECEIPT
REQUESTED, TO ITS ADDRESS SET FORTH HEREIN OR SUCH OTHER ADDRESS AS MAKER MAY
DIRECT BY NOTICE TO HOLDER. MAKER IRREVOCABLY AS AN INDEPENDENT COVENANT WAIVES
A JURY TRIAL AND THE RIGHT THERETO IN ANY ACTION OR PROCEEDING BETWEEN MAKER AND
HOLDER, WHETHER HEREUNDER OR OTHERWISE.
12. Modifications. This Note may not be changed orally, but
only by an agreement in writing signed by Maker and Xxxxxx.
13. Governing Law. This Note shall be governed by and
construed according to the law of the Commonwealth of Pennsylvania (but not
including the choice of law provisions thereof).
14. Headings. The headings preceding the text of the
paragraphs hereof are inserted solely for convenience of reference and shall not
constitute a part of this Note nor shall they affect its meaning, construction
or effect.
15. Severability. If any provision of this Note or the
application thereof is held by a court of competent jurisdiction to be invalid
or unenforceable, the remaining provisions hereof shall not be affected thereby,
and each provision of this Note shall be valid and enforceable to the fullest
extent permitted by law.
16. Communications. All communications required or permitted
by this Note shall be in accordance with Section 8.6 of the Loan Agreement.
18. Assignment. This Note and the obligations of Maker
hereunder shall not be assigned in any respect without the prior written consent
of Xxxxxx, which consent may be granted or withheld in Xxxxxx's sole discretion.
Holder shall have the absolute right, without Maker's consent or approval, to
assign in whole or in part this Note and/or the other Loan Documents to any
third party(ies).
IN WITNESS WHEREOF, Maker has caused this Note to be duly
executed as of the day and year first above written.
-5-
MAKER:
-------------------------------------
By:
---------------------------------
Name:
Title:
