SECOND AMENDED AND RESTATED
NOTE
$21,426,000.00
March 3, 2005
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 HEALTHCARE
REALTY TRUST INCORPORATED, a corporation organized under the laws
of the State of Maryland (“Lender”), the principal sum
of Twenty One Million Four Hundred Twenty Six Thousand Dollars
($21,426,000.00), 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. This Note is given pursuant to that
certain Second Amended and Restated Loan Agreement of even date
among Borrower and Lender, as amended from time to time (the
“Loan Agreement”) and is subject to the provisions
thereof. The definitions in the Loan Agreement shall be applicable
to any capitalized terms herein that are not otherwise
defined.
This Note is made by Borrower in full
substitution of that certain Amended and Restated Note dated
September 30, 2003, made by Borrower in favor of Health Care REIT,
Inc., a corporation organized under the laws of the State of
Delaware (“HCN”), in the original principal amount of
$25,800,000.00 (the “Amended and Restated Note”) which
Amended and Restated Note constituted a consolidation of certain
earlier indebtedness of Borrower to HCN, and an increase of such
indebtedness (all such indebtedness as amended and restated in the
Amended and Restated Note hereinafter collectively referred to as
the “Original Note”). This Note constitutes a
modification and renewal of the existing indebtedness evidenced by
the Original Note, and an additional advance thereunder, and does
not cancel such existing indebtedness, and is not intended to be a
novation of the Original Note or the indebtedness evidenced
thereby. Substitution of this Note for the Original Note shall not
affect the priority of the lien of the Mortgage (hereinafter
defined).
“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
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%,
subject to the provisions of §21.
“Event of Default” has the meaning
set forth in §8.
“Lease” has the meaning set forth in
the Loan Agreement.
“Maturity Date” means March 3,
2008.
“Mortgage” means the Amended and
Restated Leasehold Mortgage/Deed of Trust, Security Agreement,
Assignment of Leases and Rents, Financing Statement and Fixture
Filing granted by Borrower to secure the indebtedness evidenced by
the Original Note, which indebtedness is hereby further amended and
restated, and which Mortgage was dated September 30,
2003.
“State” means the State of
Ohio.
(a) Initial Rate. Interest shall accrue on the principal amount
outstanding hereunder at the rate of 10% per annum.
(b) Default Rate. After the occurrence and during the continuance
of an 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 actual number of days elapsed over a 365-day year (365/365
method).
(a) On the Closing Date, Borrower shall make a
payment of all accrued interest on the outstanding principal
balance of the Loan;
(b) If the Closing Date is not on the first day of
the month, 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;
(c) Commencing on the first day of the first month
after the Commencement Date and on the first day of each month
thereafter, Borrower shall make monthly payments of interest only
in arrears sufficient to pay all interest accrued pursuant to
§2 hereof;
(d) 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 Note at Healthcare Realty Trust Incorporated, P.O. Box 100894,
Atlanta, GA 30384-0894, or at such other place as the holder hereof
may designate in writing to Borrower in accordance with the
provisions of Section 17. The failure of Lender to provide such
written notice to Borrower will not relieve Borrower of its
obligations under this Note. 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 not have the privilege of
prepaying this Note in whole or in part at any time without the
prior written consent of Lender in Lender’s sole
discretion.
6. Late Charge. Borrower acknowledges that any default in any
payment due under this Note will result in loss and additional
expense to Lender in handling such delinquent payments and meeting
Lender’s other financial obligations. Because such loss and
additional expense is extremely difficult and impractical to
ascertain, Borrower 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
discretion, all payments and other amounts received by Lender shall
be credited as follows: [i] first to any charges, costs, expenses
and fees payable by Borrower under this Note, the Loan Agreement,
the Mortgage, 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 after the expiration of any applicable
grace period; [ii] second to interest on the foregoing amounts at
the Default Rate from the due date or date of payment by Lender, 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
Loan Agreement or Mortgage shall be an Event of Default
hereunder.
9. Acceleration. Upon the occurrence of any Event of Default, in
addition to all other remedies under the Loan Agreement, 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.
10. Governing Law. This Note shall be governed by and construed in
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
Note. All grace periods in the Loan Agreement and any Collateral
Document that apply to a default shall run concurrently.
