NOTE
$1,902,776.97 June 30, 1998
FOR VALUE RECEIVED, AH North Carolina Owner Limited
Partnership, an Ohio limited partnership (the "Purchaser"), hereby promises to
pay, on September 30, 1998, to the order of Brookdale Living Communities of
North Carolina, Inc., a Delaware Corporation (the "Seller"), the principal
amount of ONE MILLION NINE HUNDRED TWO THOUSAND SEVEN HUNDRED SEVENTY-SIX
DOLLARS AND NINTY-SEVEN CENTS ($1,902,776.97), together with interest as
provided in Section 2 below on the unpaid principal amount hereof.
1. Purchase and Sale Agreement. This Note is being delivered
by the Purchaser to the Seller pursuant to Section 2 of the Purchase and Sale
Agreement dated as of the date hereof (the "Purchase Agreement") between the
Purchaser and the Seller and evidences a portion of the Purchase Price for the
Property (as each such term is defined in the Purchase Agreement).
2. Interest. The unpaid principal amount outstanding under
this Note shall bear interest at the rate of 9% per annum. Interest shall be
calculated on the basis of a year of 365 days and actual days elapsed. Accrued
interest shall be paid at the maturity date of this Note or upon earlier
prepayment hereof.
3. Prepayments. The Purchaser shall prepay the unpaid
principal amount of this Note in whole, without premium, together with all
accrued and unpaid interest hereon, immediately upon the making of the loan by
Banc One Capital Partners IV, Ltd. (the "Subordinated Lender") pursuant to the
Loan Agreement to be entered into between AH North Carolina Subordinated, LLC,
an Ohio limited liability company (the "Subordinated Borrower"), and the
Subordinated Lender and the contribution of the proceeds thereof by the
Subordinated Borrower to the Purchaser as a capital contribution.
4. Place of Payment. All payments under the Note shall be made
and delivered, without setoff or counterclaim, in immediately available funds to
the Seller on the date due by wire transfer to an account designated in writing
by the Seller to the Purchaser.
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5. Security for Payment. Payment of this Note shall be
guaranteed by (a) the Subordinated Borrower, which owns a ninety-nine percent
(99%) limited partnership interest in the Purchaser and all of the issued and
outstanding stock of AH North Carolina CGP, Inc. ("AH CGP" and together with the
Subordinated Borrower, the "Obligors"), an Ohio corporation and the owner of a
one percent (1%) general partnership interest in the Purchaser, and (b) AH CGP,
in each case by a non-recourse Guaranty (the "Guaranty"), with all of the
obligations of the Obligors under the Guaranty being secured by a collateral
assignment of all of the partnership interests in the Purchaser held by the
Obligors pursuant to a collateral assignment of partnership interests (the
"Collateral Assignment") being entered into contemporaneously herewith by the
Obligors with the Seller. Notwithstanding any provision in this Note to the
contrary, (i) recourse to the Obligors for the obligations of the Purchaser
under this Note shall be limited to the obligations of the Obligors under the
Guaranty and the security therefor and (ii) in no event shall any officer,
director, incorporator, manager or agent of the Purchaser or the Obligors be
personally liable to the Seller for the payment of the obligations of the
Purchaser under this Note.
6. Events of Default. (a) Each of the following constitutes an
event of default under this Note (an "Event of Default"):
i. (A) Either the Guaranty or the Collateral Assignment shall
cease to be a legal, valid and binding obligation of either of the
Obligors, (B) either Obligor shall default in or fail to perform any of
such Obligor's agreements set forth in the Collateral Assignment, (C)
either of the Obligors shall challenge the validity of the Guaranty or
the Collateral Assignment, or (D) the Collateral Assignment shall cease
to create in favor of the Seller a perfected security interest in the
collateral covered thereby.
ii. An "Event of Default", as defined in the Development
Agreement dated as of the date hereof between the Seller and the
Purchaser, by the Purchaser shall occur.
iii. The Purchaser or either of the Obligors shall: (i) file a
voluntary petition in bankruptcy, insolvency, debtor relief or for
arrangement, reorganization or other relief under the Federal
Bankruptcy Code or any similar state or federal law; (ii) apply for,
consent to, or suffer the appointment of or taking possession by a
receiver, liquidator, or trustee (or similar official) for the
Purchaser or either of the Obligors or for any part of the Property or
any substantial part of its other property; (iii) make any assignment
for the benefit of creditors; (iv) become insolvent or fail generally
to pay debts as they become due. Any bankruptcy, reorganization, debt
arrangement or other proceeding under bankruptcy or insolvency law, or
any dissolution or liquidation proceeding is instituted against the
Purchaser or either of the Obligors.
(b) At any time after the occurrence of an Event of Default, the Seller
may, at its option, declare the entire principal balance under this Note,
together with interest accrued thereon to be immediately due and payable without
necessity of notice to the Purchaser, and the Seller may exercise all remedies
available to it.
(c) Upon an Event of Default, the Seller, at its option, may proceed to
exercise its rights and remedies under the Guaranty and the Collateral
Assignment and to exercise any other rights and remedies against the Purchaser
or with respect to this Note which the Seller may have at law, at equity or
otherwise. The Seller's remedies under this Note, the Guaranty and the
Collateral Assignment shall be cumulative and concurrent and may be pursued
singly, successively, or together against any or all of the Purchaser and the
Obligors. The Seller may resort to every other right or remedy available at law
or in equity without first exhausting the rights and remedies contained herein,
all in the Seller's sole discretion. Failure of the Seller, for any period of
time or on more than one occasion, to exercise its option to accelerate the
maturity date of this Note shall not constitute a waiver of that right at any
time during an Event of Default or in the event of any subsequent Event of
Default. The Seller shall not by any other omission or act be deemed to waive
any of its rights or remedies unless such waiver is written and signed by an
officer f the managing general partner of the Seller, and then only to the
extent specifically set forth. A waiver in connection with one event shall not
be construed as continuing or as a bar to or waiver of any right or remedy in
connection with a subsequent event. No single or partial exercise of any power
under this Note or under the Guaranty or the Collateral Assignment shall
preclude other or further exercise thereof. The Seller shall at all times have
the right to proceed against any portion of any security held for this Note in
such order and in such manner as the Seller may deem fit, without waiving any
rights with respect to any other security. No delay or omission on the part of
the Seller in exercising any right under this Note shall operate as a waiver of
such right or of any other right under this Note.
7. Notices. Any notices required or permitted to be sent
hereunder shall be delivered personally or by telecopier (with answer back
acknowledged) or mailed, certified mail, return receipt requested, or delivered
by overnight courier service to the following addresses, or such other addresses
as shall be given by notice delivered hereunder, and shall be deemed to have
been given upon delivery, if delivered personally, upon receipt with answer back
acknowledged, if delivered by telecopier, three (3) business days after mailing,
if mailed, or one business day after delivery to the courier, if delivery by
overnight courier service:
If to the Purchaser: AH North Carolina Owner
Limited Partnership
000 Xxxx xx Xxxxxxx Xxxx, Xxxxx 000
Xxxxxx, XX 00000
Attn: Xxxxx X. Xxxxxxx
Fax: (000) 000-0000
With a copy to: Xxxxxx, Xxxxxxx & Xxxxxx
0000 Xxxxxxxxxx Xxxxxx
00 Xxxxx Xxxx Xxxxxx
Xxxxxxxx, Xxxx 00000
Attn: Xxxxx Xxxx, Esq.
Facsimile: (000) 000-0000
If to the Seller: Brookdale Living Communities of North Carolina, Inc.
Brookdale Living Communities, Inc.
00 X. Xxxxxx Xxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attn: Xxxxxx X. Xxxxxxxx, Xx.
Fax: (000) 000-0000
with a copy to: Brookdale Living Communities, Inc.
00 Xxxx Xxxxxx Xxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attn: Xxxxxx X. Xxxxxx
Fax: (000) 000-0000
and to: Winston & Xxxxxx
00 Xxxx Xxxxxx Xxxxx
Xxxxxxx, XX 00000
Attn: Xxxxx X. Xxxxxx
Fax: (000) 000-0000
8. Governing Law. This Note shall be governed by and construed
in accordance with the laws of the State of Illinois (without giving effect to
principles of conflicts of law).
9. Waivers, Consents, Etc. The Purchaser (a) waives
presentment and demand for payment, notices of nonpayment and of dishonor,
protest of dishonor, and notice of protest; (b) except as specifically required
herein, waives all notices in connection with the performance, default, or
enforcement or collection of this Note; (c) waives any and all lack of diligence
and delays in the enforcement or collection of this Note; (d) agrees that its
liability shall be unconditional and without regard to the liability of any
other person or entity, and shall not in any manner be affected by any
indulgence or forbearance granted or consented to by the Seller; (e) consents to
the release of any security at any time given, with or without substitution, and
to the release of any person or entity liable for the payment thereof; and (f)
consents to the addition of any and all other makers, endorsers, guarantors, and
other obligors, and to the acceptance of any and all other security, and agrees
that the addition of any such obligors or security shall not affect the
liability of the Purchaser.
10. Interest Laws. The Purchaser and the Seller intend to
comply with the laws of the State of Illinois with regard to the rate of
interest charged. Notwithstanding any provision to the contrary in this Note, no
such provision shall require the payment or permit the collection of any amount
("Excess Interest") in excess of the maximum amount of interest or loan charges
permitted by law to be charged. If any Excess Interest is provided for, or is
adjudicated to be provided for, in this Note, then (a) the provisions of this
paragraph shall govern and control; (b) the Purchaser shall not be obligated to
pay any Excess Interest; (c) any Excess Interest that the Seller may have
received shall, at the option of Seller, be (i) applied as a credit against the
then outstanding principal balance of this Note or against the accrued and
unpaid interest thereon not to exceed the maximum amount permitted by law; (ii)
refunded to the payor, or (iii) so applied or refunded in any combination of the
foregoing; (d) the applicable interest rate or loan charges shall be reduced to
the maximum lawful rate, and this Note shall be reformed and modified to reflect
such reduction in the applicable interest rate or loan charges; and (e) the
Purchaser shall not have any action against the Seller for any damages
whatsoever arising from the collection of Excess Interest. If a refund reduces
principal, the reduction shall be treated as a partial prepayment, though not
subject to any minimum limit on permitted prepayments.
This Note may be transmitted via telecopy and shall be deemed an
original for all purposes.
In Witness Whereof, the Purchaser has caused this Note to be executed
as of the date first stated above.
AH NORTH CAROLINA OWNER LIMITED PARTNERSHIP,
an Ohio limited partnership
By: AH North Carolina CGP, Inc.,
its general partner
By: ___________________________
Name: Xxxxx X. Xxxxxxx
Its: President
