Amended and Restated Promissory Note dated October 27, 2011 in the amount of $112.0 million by KeyBank National Association, Emerihrt Bloomsburg LLC, Emerihrt Roanoke LLC, Emerihrt Creekview LLC, Emerihrt Danville LLC, Emerichip Stockton LLC, Emerichip Walla Walla LLC, Emerihrt Greensboro LLC, Emerihrt Harrisburg LLC, Emerihrt Harrisonburg LLC, Emerichip Phoenix LLC, Emerihrt Ravenna LLC, PHNTUS LO Joliet SCU LLC, Emerihrt Henderson LP, Emerihrt Medical Center LP, Emerihrt Oakwell Farms LP and Emerihrt Stonebridge Ranch LP

AMENDED AND RESTATED PROMISSORY NOTE

 

U.S. $112,000,000.00 As of October 27, 2011

 

FOR VALUE RECEIVED, Emerihrt Bloomsburg LLC, a Delaware limited liability company (“Bloomsburg”), Emerihrt Roanoke LLC, a Delaware limited liability company (“Roanoke”), Emerihrt Creekview LLC, a Delaware limited liability company (“Creekview”), Emerihrt Danville LLC, a Delaware limited liability company (“Danville”), Emerichip Stockton LLC, a Delaware limited liability company (“Stockton”), Emerichip Walla Walla LLC, a Delaware limited liability company (“Walla Walla”), Emerihrt Greensboro LLC, a Delaware limited liability company (“Greensboro”), Emerihrt Harrisburg LLC, a Delaware limited liability company (“Harrisburg”), Emerihrt Harrisonburg LLC, a Delaware limited liability company (“Harrisonburg”), Emerichip Phoenix LLC, a Delaware limited liability company (“Phoenix”), Emerihrt Ravenna LLC, a Delaware limited liability company (“Ravenna”), PHNTUS LO Joliet SCU LLC, a Delaware limited liability company (“Joliet”), Emerihrt Henderson LP, a Delaware limited partnership (“Henderson”), Emerihrt Medical Center LP, a Delaware limited partnership (“Medical Center”), Emerihrt Oakwell Farms LP, a Delaware limited partnership (“Oakwell”), Emerihrt Stonebridge Ranch LP, a Delaware limited partnership (“Stonebridge”) (Stonebridge, Bloomsburg, Roanoke, Creekview, Danville, Stockton, Walla Walla, Greensboro, Harrisburg, Harrisonburg, Phoenix, Ravenna, Joliet, Henderson, Medical Center and Oakwell  referred to herein from time to time individually as a “Maker” and collectively as “Makers”), having an address at c/o Emeritus Corporation, 31.31 Elliott Avenue #500 , Seattle, Washington  98121, hereby promises to pay to the order of KEYBANK NATIONAL ASSOCIATION, a national banking association (“Payee”), having an address at 127 Public Square, 8th Floor, Cleveland, Ohio 44114, the principal sum of One Hundred Twelve Million and No/100 Dollars ($112,000,000.00) or so much thereof as may be advanced from time to time, and interest from the date hereof on the balance of principal from time to time outstanding, in United States currency, at the rates and at the times hereinafter described.

 

This Note is issued by Maker pursuant to that certain Loan Agreement of even date herewith (the “Loan Agreement”) entered into between Payee and Maker.  This Note evidences the Loan (as defined in the Loan Agreement).  Payment of this Note is governed by the Loan Agreement, the terms of which are incorporated herein by express reference as if fully set forth herein.  Capitalized terms used and not otherwise defined herein shall have the meanings given to them in the Loan Agreement.

 

1. Interest.  Subject to Paragraphs 4(a) and 4(c) hereof, the principal amount hereof outstanding from time to time shall bear interest until paid in full at the rate or rates specified in Section 4.1 of the Loan Agreement.

 

2. Monthly Payments.  Interest only shall be payable in arrears on the first (1st) day of each calendar month after the date hereof up to and including the Maturity Date in the amount of all interest accrued during the immediately preceding calendar month.  In addition to, and not in lieu of, each such monthly interest payment, principal shall be due and payable in installments as set forth in Section 3.5 of the Loan Agreement.   All payments on account of the indebtedness

 

evidenced by this Note shall be made to Payee not later than 11:00 a.m. Cleveland, Ohio time on the day when due in lawful money of the United States and shall be first applied to late charges, costs of collection or enforcement and other similar amounts due, if any, under this Note and any of the other Loan Documents, then to interest due and payable hereunder and the remainder to principal due and payable hereunder.

 

3. Maturity Date.  The indebtedness evidenced hereby shall mature on the  Maturity Date.  On the Maturity Date, the entire outstanding principal balance hereof, together with accrued and unpaid interest and all other sums evidenced by this Note, shall, if not sooner paid, become due and payable.

 

4. General Provisions.

 

(a) In the event (i) the principal balance hereof is not paid when due whether by acceleration or upon the Maturity Date or (ii) an Event of Default exists, then the principal balance hereof shall bear interest, at the election of Payee from and after the date of the occurrence of (i) or (ii), at the Default Rate.  In addition, for any installment (exclusive of the payment due upon the Maturity Date) which is not paid within ten (10) days of the due date thereof a late charge equal to the greater of (1) twenty-five dollars, and (2) four percent (4%) of the amount of such installment shall be due and payable to the holder of this Note on demand to cover the extra expense involved in handling delinquent payments; subject to paragraph 4(c) of this Note.

 

(b) Maker shall have no right to prepay this Note except as set forth in Section 3.4 of the Loan Agreement.

 

(c) Maker agrees that the obligation evidenced by this Note is an exempt transaction under the Truth-in-Lending Act, 15 U.S.C. § 1601, et seq.

 

(d) The parties hereto intend and believe that each provision in this Note comports with all applicable local, state and federal laws and judicial decisions.  However, if any provision or provisions, or if any portion of any provision or provisions, in this Note is found by a court of law to be in violation of any applicable local, state or federal ordinance, statute, law, administrative or judicial decision, or public policy, and if such court should declare such portion, provision or provisions of this Note to be illegal, invalid, unlawful, void or unenforceable as written, then it is the intent of all parties hereto that such portion, provision or provisions shall be given force to the fullest possible extent that they are legal, valid and enforceable, that the remainder of this Note shall be construed as if such illegal, invalid, unlawful, void or unenforceable portion, provision or provisions were not contained therein, and that the rights, obligations and interest of Maker and the holder or holders hereof under the remainder of this Note shall continue in full force and effect.  All agreements herein are expressly limited so that in no contingency or event whatsoever, whether by reason of advancement of the proceeds hereof, acceleration of maturity of the unpaid principal balance hereof, or otherwise, shall the amount paid or agreed to be paid to the holders hereof for the use, forbearance or detention of the money to be advanced hereunder exceed the highest lawful rate permissible under applicable usury laws.  If, from any circumstances whatsoever, the

 

fulfillment of any provision hereof, at the time performance of such provision shall be due, shall involve transcending the limit of validity prescribed by law which a court of competent jurisdiction may deem applicable hereto, then, ipso facto, the obligation to be fulfilled shall be reduced to the limit of such validity and if from any circumstance the holder hereof shall ever receive as interest an amount which would exceed the highest lawful rate, such amount which would be excessive interest shall be applied to the reduction of the unpaid principal balance due hereunder and not to the payment of interest.

 

(e) This Note and all provisions hereof shall be binding upon Maker and all persons claiming under or through Maker, and shall inure to the benefit of Payee, together with its successors and assigns, including each owner and holder from time to time of this Note.

 

(f) Time is of the essence as to all dates set forth herein.

 

(g) Maker agrees that its liability shall not be in any manner affected by any indulgence, extension of time, renewal, waiver, or modification granted or consented to by Payee; and Maker consents to any indulgences and all extensions of time, renewals, waivers, or modifications that may be granted by Payee with respect to the payment or other provisions of this Note, and to any substitution, exchange or release of the collateral, or any part thereof, with or without substitution, and agrees to the addition or release of any makers, endorsers, guarantors, or sureties, all whether primarily or secondarily liable, without notice to Maker and without affecting its liability hereunder.

 

(h) Maker hereby waives and renounces for itself, its successors and assigns, all rights to the benefits of any moratorium, reinstatement, marshalling, forbearance, valuation, stay, extension, redemption, appraisement, or exemption and homestead laws now provided, or which may hereafter be provided, by the laws of the United States and of any state thereof against the enforcement and collection of the obligations evidenced by this Note.

 

(i) If this Note is placed in the hands of attorneys for collection or is collected through any legal proceedings, Maker promises and agrees to pay, in addition to the principal, interest and other sums due and payable hereon, all costs of collecting or attempting to collect this Note, including all reasonable attorneys’ fees and disbursements.

 

(j) All parties now or hereafter liable with respect to this Note, whether Maker, principal, surety, guarantor, endorsee or otherwise hereby severally waive presentment for payment, demand, notice of nonpayment or dishonor, protest and notice of protest.  No failure to accelerate the indebtedness evidenced hereby, acceptance of a past due installment following the expiration of any cure period provided by this Note, any Loan Document or applicable law, or indulgences granted from time to time shall be construed (i) as a novation of this Note or as a reinstatement of the indebtedness evidenced hereby or as a waiver of such right of acceleration or of the right of Payee thereafter to insist upon strict compliance with the terms of this Note, or (ii) to prevent the exercise of such right of acceleration or any other right granted hereunder or by the

 

laws of the State of Ohio.  Maker hereby expressly waives the benefit of any statute or rule of law or equity now provided, or which may hereafter be provided, which would produce a result contrary to or in conflict with the foregoing.

 

(k) THIS NOTE IS A RENEWAL, EXTENSION AND INCREASE, AS WELL AS AN AMENDMENT AND RESTATEMENT IN ITS ENTIRETY (BUT NOT AN EXTINGUISHMENT), OF THAT CERTAIN PROMISSORY NOTE (THE “PRIOR NOTE”) DATED MARCH 15, 2007, IN THE MAXIMUM PRINCIPAL AMOUNT OF $88,000,000.00 EXECUTED BY BLOOMSBURG, HARRISONBURG, HENDERSON, MEDICAL CENTER, STONEBRIDGE, OAKWELL, CREEKVIEW, DANVILLE, GREENSBORO, HARRISBURG AND ROANOKE AND PAYABLE TO CAPMARK BANK (“PRIOR LENDER”).  PRIOR LENDER ASSIGNED ALL OF ITS RIGHT, TITLE AND INTEREST IN AND TO THE PRIOR NOTE TO PAYEE PURSUANT TO THAT CERTAIN ASSIGNMENT OF DEED OF TRUST AND OTHER LOAN DOCUMENTS DATED OF EVEN DATE HEREWITH.

 

(l) THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF OHIO AND ANY APPLICABLE LAWS OF THE UNITED STATES OF AMERICA.

 

Maker has delivered this Note as of the day and year first set forth above.

 

Emerihrt Bloomsburg LLC, a Delaware limited liability company

By:

Emeritus Corporation, a Washington corporation, its sole member

By:  /s/ Eric Mendelsohn                                                          

Eric Mendelsohn

Senior Vice President-Corporate Development

Emerihrt Roanoke LLC, a Delaware limited liability company

By:

Emeritus Corporation, a Washington corporation, its sole member

By:  /s/ Eric Mendelsohn                                                          

Eric Mendelsohn

Senior Vice President-Corporate Development

Emerihrt Creekview LLC, a Delaware limited liability company

By:

Emeritus Corporation, a Washington corporation, its sole member

By:  /s/ Eric Mendelsohn                                                          

Eric Mendelsohn

Senior Vice President-Corporate Development

Emerihrt Danville LLC, a Delaware limited liability company

By:

Emeritus Corporation, a Washington corporation, its sole member

By:  /s/ Eric Mendelsohn                                                          

Eric Mendelsohn

Senior Vice President-Corporate Development

 

Emerichip Stockton LLC, a Delaware limited liability company

By:

Emeritus Corporation, a Washington corporation, its sole member

By:  /s/ Eric Mendelsohn                                                          

Eric Mendelsohn

Senior Vice President-Corporate Development

Emerichip Walla Walla LLC, a Delaware limited liability company

By:

Emeritus Corporation, a Washington corporation, its sole member

By:  /s/ Eric Mendelsohn                                                          

Eric Mendelsohn

Senior Vice President-Corporate Development

Emerihrt Greensboro LLC, a Delaware limited liability company

By:

Emeritus Corporation, a Washington corporation, its sole member

By:  /s/ Eric Mendelsohn                                                          

Eric Mendelsohn

Senior Vice President-Corporate Development

Emerihrt Harrisburg LLC, a Delaware limited liability company

By:

Emeritus Corporation, a Washington corporation, its sole member

By:  /s/ Eric Mendelsohn                                                          

Eric Mendelsohn

Senior Vice President-Corporate Development

Emerihrt Harrisonburg LLC, a Delaware limited liability company

By:

Emeritus Corporation, a Washington corporation, its sole member

By:  /s/ Eric Mendelsohn                                                          

Eric Mendelsohn

Senior Vice President-Corporate Development

Emerichip Phoenix LLC, a Delaware limited liability company

By:

Emeritus Corporation, a Washington corporation, its sole member

By:  /s/ Eric Mendelsohn                                                          

Eric Mendelsohn

Senior Vice President-Corporate Development

Emerihrt Ravenna LLC, a Delaware limited liability company

By:

Emeritus Corporation, a Washington corporation, its sole member

By:  /s/ Eric Mendelsohn                                                          

Eric Mendelsohn

Senior Vice President-Corporate Development

PHNTUS LO Joliet SCU LLC, a Delaware limited liability company

By:

Emeritus Corporation, a Washington corporation, its sole member

By:  /s/ Eric Mendelsohn                                                          

Eric Mendelsohn

Senior Vice President-Corporate Development

Emerihrt Henderson LP, a Delaware limited partnership

By:

ESC G.P. II, Inc., a Washington corporation, its general partner

By:  /s/ Eric Mendelsohn                                                          

Eric Mendelsohn

Senior Vice President-Corporate Development

Emerihrt Medical Center LP, a Delaware limited partnership

By:

ESC G.P. II, Inc., a Washington corporation, its general partner

By:  /s/ Eric Mendelsohn                                                          

Eric Mendelsohn

Senior Vice President-Corporate Development

Emerihrt Oakwell Farms LP, a Delaware limited partnership

By:

ESC G.P. II, Inc., a Washington corporation, its general partner

By:  /s/ Eric Mendelsohn                                                          

Eric Mendelsohn

Senior Vice President-Corporate Development

Emerihrt Stonebridge Ranch LP, a Delaware limited partnership

By:

ESC G.P. II, Inc., a Washington corporation, its general partner

By:  /s/ Eric Mendelsohn                                                          

Eric Mendelsohn

Senior Vice President-Corporate Development