1
Exhibit 10.3
Freddie Mac Loan No.: 002680246
MULTIFAMILY NOTE
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(MULTISTATE)
US $8,850,000.00 May 20, 1999
FOR VALUE RECEIVED, the undersigned ("BORROWER") jointly and
severally (if more than one) promises to pay to the order of GMAC Commercial
Mortgage Corporation, a California corporation, the principal sum of Eight
Million Eight Hundred Fifty Thousand and 00/100 Dollars (US $8,850,000.00), with
interest on the unpaid principal balance at the annual rate of seven and one
hundred thirty-five thousandths percent (7.135%).
1. DEFINED TERMS. As used in this Note, (i) the term "LENDER" means
the holder of this Note, and (ii) the term "INDEBTEDNESS" means 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. "Event of
Default" 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 c/o GMAC Commercial Mortgage Corporation, ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇.▇. Box
1015, Horsham, Pennsylvania 19044-8015, 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) Unless disbursement of principal is made by Lender to Borrower
on the first day of the month, interest for the period beginning on the date of
disbursement and ending on and including the last day of the month in which such
disbursement is made shall be payable simultaneously with the execution of this
Note. Interest under this Note shall be computed on the basis of a 360-day year
consisting of twelve 30-day months.
(b) Consecutive monthly installments of principal and interest, each
in the amount of Sixty-Three Thousand Three Hundred Fourteen and 18/100 Dollars
(US $63,314.18), shall be payable on the first day of each month beginning on
July 1, 1999, until the entire unpaid principal balance evidenced by this Note
is fully paid. 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, and any reference below to
"accrued interest" shall refer to accrued interest which has not become part of
the unpaid principal balance. Any remaining principal
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and interest shall be due and payable on June 1, 2009 or on any earlier date on
which the unpaid principal balance of this Note becomes due and payable, by
acceleration or otherwise (the "MATURITY DATE"). 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.
(c) Any regularly scheduled monthly installment of principal and
interest that is received by Lender before the date it is due shall be deemed to
have been received on the due date solely for the purpose of calculating
interest due.
4. 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
▇▇▇▇▇▇, in ▇▇▇▇▇▇'s discretion. ▇▇▇▇▇▇▇▇ agrees that neither ▇▇▇▇▇▇'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 a
multifamily mortgage, deed to secure debt or deed of trust dated as of the date
of this Note (the "SECURITY INSTRUMENT"), and reference is made to the Security
Instrument for other rights of ▇▇▇▇▇▇ as to 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 amount payable under this Note or
under the Security Instrument or any other Loan Document is not received by
Lender within ten (10) days after the amount is due, Borrower shall pay to
Lender, immediately and without demand by ▇▇▇▇▇▇, a late charge equal to five
percent of such amount. Borrower acknowledges that its failure to make timely
payments will cause Lender to incur additional expenses in servicing and
processing the loan evidenced by this Note (the "LOAN"), and that it is
extremely difficult and impractical to determine those additional expenses.
▇▇▇▇▇▇▇▇ 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 (a) any monthly installment under this
Note remains past due for 30 days or more, or (b) any other Event of Default has
occurred and is continuing, interest under this Note shall accrue on the unpaid
principal balance from the earlier of the due date of the
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first unpaid monthly installment or the occurrence of such other Event of
Default, as applicable, at a rate (the "DEFAULT RATE") equal to the lesser of 4
percentage points above the rate stated in the first paragraph of this Note or
the maximum interest rate which may be collected from Borrower under applicable
law. 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 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 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. ▇▇▇▇▇▇▇▇ also acknowledges that, during the time that any
monthly installment under this Note is delinquent for more than 30 days or any
other Event of Default has occurred and is continuing, ▇▇▇▇▇▇'s risk of
nonpayment of this Note will be materially increased and Lender is entitled to
be compensated for such increased risk. ▇▇▇▇▇▇▇▇ 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 ▇▇▇▇▇▇'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 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 zero percent (0%) of the unpaid
principal balance of this Note, plus any other amounts for which Borrower has
personal liability under this Paragraph 9.
(c) In addition to ▇▇▇▇▇▇▇▇'s personal liability under Paragraph
9(b), Borrower shall be personally liable to Lender for the repayment of a
further portion of the Indebtedness equal to any loss or damage suffered by
▇▇▇▇▇▇ 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; or (3) failure of Borrower to comply with Section 14(d) or (e)
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of the Security Instrument relating to the delivery of books and records,
statements, schedules and reports.
(d) For purposes of determining Borrower's personal liability under
Paragraph 9(b) and Paragraph 9(c), all payments made by Borrower or any
guarantor of this Note with respect to the Indebtedness and all amounts received
by Lender from the enforcement of its rights under the Security Instrument shall
be applied first to the portion of the Indebtedness for which Borrower has no
personal liability.
(e) 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 (including, but not limited to, a lien or encumbrance) that is an Event
of Default under Section 21 of the Security Instrument, other than a Transfer
consisting solely of the involuntary removal or involuntary withdrawal of a
general partner in a limited partnership or a manager in a limited liability
company; or (3) fraud or written material misrepresentation by Borrower 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 ▇▇▇▇▇▇.
(f) In addition to any personal liability for the Indebtedness,
Borrower shall be personally liable to Lender for (1) the performance of all of
Borrower's obligations under Section 18 of the Security Instrument (relating to
environmental matters); (2) the costs of any audit under Section 14(d) of the
Security Instrument; and (3) any costs and expenses incurred by Lender in
connection with the collection of any amount for which Borrower is personally
liable under this Paragraph 9, including fees and out of pocket expenses of
attorneys and expert witnesses and the costs of conducting any independent audit
of ▇▇▇▇▇▇▇▇'s books and records to determine the amount for which ▇▇▇▇▇▇▇▇ has
personal liability.
(g) To the extent that Borrower has personal liability under this
Paragraph 9, Lender may exercise its rights against ▇▇▇▇▇▇▇▇ personally without
regard to whether ▇▇▇▇▇▇ 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:
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(1) Borrower may voluntarily prepay all of the unpaid principal
balance of this Note on the last Business Day of a calendar month if Borrower
has given Lender at least 30 days prior notice of its intention to make such
prepayment. Such prepayment shall be made by paying (A) the amount of principal
being prepaid, (B) all accrued interest, (C) all other sums due Lender at the
time of such prepayment, and (D) the prepayment premium calculated pursuant to
Schedule A. For all purposes including the accrual of interest, any prepayment
received by Lender on any day other than the last calendar day of the month
shall be deemed to have been received on the last calendar day of such month.
For purposes of this Note, a "BUSINESS DAY" means any day other than a Saturday,
Sunday or any other day on which Lender is not open for business. Borrower shall
not have the option to voluntarily prepay less than all of the unpaid principal
balance.
(2) Upon ▇▇▇▇▇▇'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, (A)
all accrued interest and all other sums due Lender, and (B) 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. The amount of any such partial prepayment
shall be computed so as to provide to Lender a prepayment premium computed
pursuant to Schedule A without Borrower having to pay out-of-pocket any
additional amounts.
(b) Notwithstanding the provisions of Paragraph 10(a), no prepayment
premium shall be payable with respect to (A) any prepayment made no more than
180 days before the Maturity Date, or (B) any prepayment occurring as a result
of the application of any insurance proceeds or condemnation award under the
Security Instrument.
(c) Schedule A is hereby incorporated by reference into this Note.
(d) Any permitted or required prepayment of less than the unpaid
principal balance of this Note shall not extend or postpone the due date of any
subsequent monthly installments or change the amount of such installments,
unless ▇▇▇▇▇▇ 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 ▇▇▇▇▇▇'s incurring loss, including
reinvestment loss, additional expense and frustration or impairment of ▇▇▇▇▇▇'s
ability to meet its commitments to third parties. ▇▇▇▇▇▇▇▇ agrees to pay to
▇▇▇▇▇▇ 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. ▇▇▇▇▇▇▇▇ 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.
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(f) Borrower further acknowledges that the prepayment premium
provisions of this Note are a material part of the consideration for the Loan,
and acknowledges that the terms of this Note are in other respects more
favorable to Borrower as a result of the Borrower's voluntary agreement to the
prepayment premium provisions.
11. COSTS AND EXPENSES. Borrower shall pay all expenses and costs,
including fees and out-of-pocket expenses of attorneys and expert witnesses and
costs of investigation, incurred by ▇▇▇▇▇▇ 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 ▇▇▇▇▇▇ 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 ▇▇▇▇▇▇ 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 and all endorsers and
guarantors of this Note and all other third party obligors.
14. LOAN CHARGES. If any applicable law limiting the amount of
interest or other charges permitted to be collected from Borrower in connection
with the Loan is interpreted so that any interest or other charge provided for
in any Loan Document, whether considered separately or together with other
charges provided for in any other Loan Document, violates that law, and ▇▇▇▇▇▇▇▇
is entitled to the benefit of that law, that interest or charge is hereby
reduced to the extent necessary to eliminate that violation. The amounts, if
any, previously paid to Lender in excess of the permitted amounts shall be
applied by Lender to reduce the unpaid principal balance of this Note. For the
purpose of determining whether any applicable law limiting the amount of
interest or other charges permitted to be collected from Borrower has been
violated, all Indebtedness that constitutes interest, as well as all other
charges made in connection with the Indebtedness that constitute interest, shall
be deemed to be allocated and spread ratably over the stated term of the Note.
Unless otherwise required by applicable law, such allocation and spreading shall
be effected in such a manner that the rate of interest so computed is uniform
throughout the stated term of the Note.
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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 ▇▇▇▇▇▇ to Borrower pursuant to this Note shall be
given in accordance with Section 31 of the Security Instrument.
20. CONSENT TO JURISDICTION AND VENUE. ▇▇▇▇▇▇▇▇ agrees that any
controversy arising under or in relation to this Note shall be litigated
exclusively in the jurisdiction in which the Land is located (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
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.
21. WAIVER OF TRIAL BY JURY. ▇▇▇▇▇▇▇▇ AND ▇▇▇▇▇▇ 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 ▇▇▇▇▇▇ 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
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IN WITNESS WHEREOF, ▇▇▇▇▇▇▇▇ has signed and delivered this Note or
has caused this Note to be signed and delivered by its duly authorized
representative.
BORROWER:
WITNESS:
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ASSISTED LIVING,
L.L.C., a Pennsylvania limited liability company
By: SUNRISE ASSISTED LIVING
INVESTMENTS, INC., a Virginia
corporation, Managing Member
By:___/s/ ▇▇▇▇▇ ▇. ▇▇▇▇___________(SEAL)
▇▇▇▇▇ ▇. ▇▇▇▇
Vice President
Print Name
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
PAY TO THE ORDER OF FEDERAL HOME LOAN MORTGAGE CORPORATION, WITHOUT RECOURSE
This 20th day of May, 1999.
GMAC COMMERCIAL MORTGAGE CORPORATION,
a California corporation
By: ____/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇_____(SEAL)
▇▇▇▇▇▇ ▇▇▇▇▇▇
Vice President
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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 between the date of this Note and the
date that is 114 months after the first day of the first calendar month
following the date of this Note (the "YIELD MAINTENANCE PERIOD"), the prepayment
premium shall be the greater of:
(i) 1.0% of the unpaid principal balance of this Note; or
(ii) the product obtained by multiplying:
(A) the amount of principal being prepaid,
by
(B) the excess (if any) of the Monthly Note Rate
over the Assumed Reinvestment Rate,
by
(C) the Present Value Factor.
For purposes of subparagraph (ii), the following
definitions shall apply:
MONTHLY NOTE RATE: one-twelfth (1/12) of the annual
interest rate of the Note, expressed as a decimal
calculated to five digits.
PREPAYMENT DATE: in the case of a voluntary prepayment,
the date on which the prepayment is made; in any other
case, the date on which Lender accelerates the unpaid
principal balance of the Note.
ASSUMED REINVESTMENT RATE: one-twelfth (1/12) of the
yield rate as of the date 5 Business Days before the
Prepayment Date, on the 4.750 % U.S. Treasury Security
due 11/01/2008, as reported in The Wall Street Journal,
expressed as a decimal calculated to five digits. In the
event that no yield is published on the applicable date
for the Treasury Security used to determine the Assumed
Reinvestment Rate, Lender, in its discretion, shall
select the non-callable Treasury Security maturing in
the same year as the Treasury Security specified above
with the lowest yield published in The Wall Street
Journal as of the applicable date. If the publication of
such yield rates in The Wall Street Journal is
discontinued for any reason, Lender shall select a
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security with a comparable rate and term to the Treasury
Security used to determine the Assumed Reinvestment
Rate. The selection of an alternate security pursuant to
this Paragraph shall be made in ▇▇▇▇▇▇'s discretion.
PRESENT VALUE FACTOR: the factor that discounts to
present value the costs resulting to Lender from the
difference in interest rates during the months remaining
in the Yield Maintenance Period, using the Assumed
Reinvestment Rate as the discount rate, with monthly
compounding, expressed numerically as follows:
Install Equation Editor and double-
click here to view equation
n = number of months remaining in Yield Maintenance
Period
ARR = Assumed Reinvestment Rate
(b) If the prepayment is made after the expiration of the
Yield Maintenance Period, the prepayment premium shall be zero percent (0%) of
the unpaid balance.
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SCHEDULE B
MODIFICATIONS TO MULTIFAMILY NOTE
1. Section 9(c) of the Multifamily Note is amended to add the
following Subsection (4):
(4) Failure by Borrower to pay the amount of any hazard or other
insurance premiums in accordance with the terms of the
Security Instrument.
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