Attached files

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EX-10.2 - EXHIBIT 10.2 - Summit Healthcare REIT, Inctv503801_ex10-2.htm
EX-10.1 - EXHIBIT 10.1 - Summit Healthcare REIT, Inctv503801_ex10-1.htm

  

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

 

FORM 8-K

 

 

 

CURRENT REPORT

 

Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934

Date of Report (date of earliest event reported):

 

September 27, 2018

 

SUMMIT HEALTHCARE REIT, INC.

(Exact name of registrant as specified in its charter)

 

 

 

Maryland 000-52566 73-1721791
(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation) File Number) Identification No.)

 

2 South Pointe Drive, Suite 100, Lake Forest, California 92630

(Address of principal executive offices)

 

(800) 978-8136

(Registrant's telephone number, including area code)

 

Not Applicable

(Former name or former address, if changed since last report)

 

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

¨Written communications pursuant to Rule 425 under the Securities Act.
¨Soliciting material pursuant to Rule 14a-12 under the Exchange Act.
¨Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act.
¨Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act.

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2).

 

Emerging Growth Company ¨

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

 

 

 

   

 

 

Item 1.01.             Entry into a Material Definitive Agreement.

 

The information set forth below in Item 2.03 is incorporated herein by reference.

 

Item 2.03             Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.

 

On September 27, 2018, Summit Chandler, LLC (“Summit Chandler”), which is a consolidated subsidiary of Summit Healthcare REIT, Inc. (the “Company”), entered into a Healthcare Facility Note and related documentation with Capital One Multifamily Finance, LLC (the “Note”), and a Healthcare Regulatory Agreement and related documentation with the U.S. Department of Housing and Urban Development (“HUD”). The Note is secured by the real and personal property of the Pennington Gardens facility owned by Summit Chandler. The Note is insured by HUD. The Note has a principal balance of approximately $10.6 million and an “all in” interest rate of 4.88% inclusive of the mortgage insurance premium, and amortization term of 35 years. The Note contains a prepayment penalty of 10% in year 1, which reduces each year by 100 basis points, until there is no longer a prepayment penalty beginning in year 11. The Note is subject to customary representations, warranties and ongoing covenants and agreements with respect to the operation of the Pennington Gardens facility, including the provision for certain maintenance and other reserve accounts with respect to such facility, all as described in the Healthcare Regulatory Agreement. The net loan proceeds of $10.6 million have been used to pay off the outstanding principal debt on the Summit Chandler’s existing Capital One loan maturing in January 2019 and to establish certain reserve accounts required by HUD.

 

A form of the Note and Healthcare Regulatory Agreement entered into by Summit Chandler with respect to the HUD insured loan is attached as Exhibits 10.1 and 10.2, respectively. The descriptions of the Note and Healthcare Regulatory Agreement set forth above are qualified in their entirety by reference to the full text of such documents.

 

Item 9.01             Financial Statements and Exhibits

 

Exhibit No.   Description
     
10.1   Healthcare Facility Note with respect to HUD – insured loans between Summit Chandler, LLC and Capital One Multifamily Finance, LLC, dated September 27, 2018.
     
10.2   Healthcare Regulatory Agreement – Borrower between Summit Chandler, LLC and HUD, dated September 27, 2018.

  

 

 

  

SIGNATURE

 

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Company has duly caused this report to be signed on its behalf by the undersigned, hereunto duly authorized.

 

  SUMMIT HEALTHCARE REIT, INC.  
       
  By:   /s/ Elizabeth A. Pagliarini  
  Name:   Elizabeth A. Pagliarini  
  Title:   Chief Financial Officer  

  

Dated: October 1, 2018