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EXHIBIT 10.7
ALLONGE TO
DEED OF TRUST NOTE OF
ARV CHANDLER VILLAS, L.P.
TO
RED MORTGAGE CAPITAL, INC.
IN THE ORIGINAL PRINCIPAL SUM OF $5,782,900.00
DATED JANUARY 29, 2001
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1. Except as provided in Paragraphs 2, and 3 below, Maker may not
prepay any sums due under the Mortgage Note (the "Note") prior to March 1, 2006.
Commencing on March 1, 2006, upon thirty (30) days advance written notice to the
Holder, Maker may prepay the indebtedness evidenced by this Note, in whole or in
an amount equal to one or more monthly payments of principal next due, on the
last day of any month, provided such prepayment is accompanied by the prepayment
penalty (expressed as a percentage of the principal amount so prepaid) set forth
below:
PREPAYMENT PERIODS PREPAYMENT PENALTY
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March 1, 2006 through February 28, 2007 5%
March 1, 2007 through February 29, 2008 4%
March 1, 2008 through February 28, 2009 3%
March 1, 2009 through February 28, 2010 2%
March 1, 2010 through February 28, 2011 1%
March 1, 2011 and thereafter None
All such prepayments, including the principal sum and interest thereon
to and including the date of such prepayment, shall be in immediately available
Federal Funds.
2. Notwithstanding any prepayment prohibition imposed and/or penalty
required by this Allonge #1 with respect to voluntary prepayments made prior to
March 1, 2010, the indebtedness may be prepaid in whole or in part on the last
or first day of any calendar month without the consent of the holder and without
prepayment premium if the Commissioner determines that prepayment will avoid a
mortgage insurance claim and is therefore in the best interest of the Federal
Government.
3. The provisions of Paragraph 1 of this Allonge #1 shall not apply and
no prepayment premium shall be collected by the holder with respect to any
prepayment which is made by or on behalf of Maker from insurance proceeds as a
result of damage to the property or condemnation awards which may, at the option
of the holder, be applied to reduce the indebtedness evidenced by the Note
pursuant to the terms of the Mortgage given of even date to secure the
indebtedness evidenced by the Note.
4. A reduction in the principal amount of the Note required by the
Commissioner at the time of Initial/Final Endorsement by the Commissioner as a
result of the Commissioner's cost certification requirements shall not be
construed as a prepayment hereunder. If a reduction is required by the
Commissioner as aforesaid, or if any prepayment from any source (to the extent
permitted herein) is made, the remaining payments due on the Note may, with the
approval of the holder and the Commissioner, be recast such that the required
monthly payments of principal and interest shall be in equal amounts sufficient
to amortize the Note over the then remaining term thereof.
5. In the event that any installment or part of any installment due
hereunder becomes delinquent for more than fifteen (15) days, there shall be
due, at the option of the holder, in addition to other sums dues hereunder, a
sum equal to two percent (2%) of the amount of such installment or principal and
interest so delinquent. Whenever under the law of the jurisdiction where the
property is located, the amount of any such late charge is considered to be
additional interest, this provision shall not be effective if the rate of
interest specified in this Note, together with the amount of the late charge,
would aggregate an amount in excess of the maximum rate of interest permitted
and would constitute usury.
6. Notwithstanding any other provision contained in this Note, it is
agreed that the execution of this Note shall impose no personal liability on the
maker hereof for payment of the indebtedness evidenced hereby and in the event
of a default, the holder of this Note shall look solely to the property
described in the Deed of Trust and to the rents, issues and profits thereof in
satisfaction of the indebtedness evidenced hereby and will not seek or obtain
any deficiency or personal judgment against the maker hereof except such
judgment or decree as may be necessary
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to foreclose and bar its interest in the property and all other property
mortgaged, pledged, conveyed or assigned to secure payment of this Note except
as set out in the Deed of Trust of even date given to secure this indebtedness.
ARV CHANDLER VILLAS, L.P.
a California limited partnership
By: American Retirement Villas Properties III, L.P.
a California limited partnership, General Partner
By: ARV Assisted Living, Inc.
a Delaware corporation, General Partner
By:
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Douglas Armstrong
Vice President
END OF ALLONGE