EXHIBIT 10.7
NOTE
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$4,016,340.53 March 31, 1998
FOR VALUE RECEIVED, AH Texas Owner Limited Partnership, an Ohio
limited partnership (the "Purchaser"), hereby promises to pay, on June 30, 1998,
to the order of BLC of Texas - II, L.P., a Delaware limited partnership (the
"Seller"), the principal amount of FOUR MILLION SIXTEEN THOUSAND THREE HUNDRED
FORTY DOLLARS AND FIFTY THREE CENTS ($4,016,340.53), 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 Texas 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.
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 Texas 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
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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 of 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
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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 Texas Owner
Limited Partnership
00 Xxxxx Xxxx Xxxxxx
Xxxxx 0000
Xxxxxxxx, Xxxx 00000
Attn: Xxxxx X. Xxxxxxx
Fax: (000) 000-0000
If to the Seller: BLC Of Texas - II, L.P.
C/O 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
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Suite 4800
Chicago, Illinois 60601
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
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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.
In Witness Whereof, the Purchaser has caused this Note to be executed
as of the date first stated above.
AH TEXAS OWNER LIMITED PARTNERSHIP,
an Ohio limited partnership
By: AH Texas CGP, Inc.,
its general partner
By: _______________________________
Name:______________________________
Its:_______________________________
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