PROMISSORY NOTE
$18,000,000.00
February
28, 2007 Seattle,
Washington
FOR
VALUE
RECEIVED, the undersigned,
EMERITUS
CORPORATION,
a
Washington corporation (“Borrower”),
hereby promises to pay to the order of CP
’02
POOL LLC, a Washington limited liability company (“Lender”)
at
000
Xxxxxxxxxx Xx., Xxxxx 0000, Xxxxxxx, Xxxxxxxxxx 00000,
or to
such other person or at such other place as the holder of this Promissory Note
(this “Note”)
may
from time to time designate in writing, the principal sum of Eighteen Million
and No/100 Dollars
($18,000,000.00),
together with interest on the unpaid balance from time to time and costs, fees
and expenses payable under this Note (collectively, the “Loan”)
as set
forth below.
Definitions
and Interpretation.
All
capitalized terms not otherwise defined herein shall have the meaning ascribed
to them in the Loan Agreement and such definitions are incorporated herein
by
reference.
Repayment.
Borrower
may
prepay all or any portion of this Note at any time without penalty in accordance
with Section 4 below, but shall in any event repay this Note as
follows:
2.1
Beginning
on the first day of the month following the date hereof and continuing on the
first day of each month thereafter, Borrower shall make monthly accrued interest
payments.
2.2
In
addition, all principal, interest and all other amounts due under this Note,
or
that certain Loan Agreement (herein so called) dated of even date herewith
(collectively, the “Loan
Documents”)
shall
be due and payable on such day as Emeritus closes any public offering or
equivalent capital raising event.
2.3
Notwithstanding anything to the contrary contained in the Loan Documents, all
principal, interest and all other amounts due under the Loan Documents shall
be
due and payable on February 28, 2009 (the “Maturity
Date”).
All
payments hereunder shall be first applied to late payment fees, attorneys’ fees
and costs of collection, then to accrued interest, and then to reduction of
principal.
Interest
Rate.
All
principal outstanding on the Loan shall bear interest at nine percent (9%)
per
annum. If an Event of Default (as defined below) shall have occurred and be
continuing, interest shall thereupon accrue daily on the aggregate outstanding
principal balance until such amount is paid in full at twelve percent (12%)
per
annum (the “Default Rate”). Notwithstanding
any other provision of the Loan Agreement or this Note, interest, fees, and
expenses payable by reason of the indebtedness evidenced hereby shall not exceed
the maximum amount, if any, permitted by applicable law.
4. Prepayment.
Prepayment of the Loan, in whole or in part, shall be permitted at any time,
without penalty or prepayment fees with thirty (30) days’ prior written notice
to Lender. Prepayments shall be applied first toward interest and other
non-principal fees and expenses and second toward reduction of
principal.
5. Late
Payment Fee.
If
Xxxxxxxx fails to pay any sum due under this Note in full when due and such
failure continues for a period of five (5) days, a late charge of (i) five
cents
for each dollar so overdue or (ii) Five Hundred Dollars ($500.00), whichever
is
greater.
6. Default.
The
occurrence of any of the following shall be an “Event
of Default”
under
this Note: (a) if Borrower fails
to
pay any sum due under this Note in full when due; (b)
if
Borrower fails to perform any non-monetary obligation set forth in this Note
and
such failure continues for thirty (30) days after written notice thereof from
Lender; or (c) if any default occurs under the Loan Agreement. Upon
the
occurrence of any Event of Default, Lender will have the option to declare
the
entire amount of principal and interest due under this Note immediately due
and
payable without notice or demand, and Lender may exercise any other remedies
which may arise at law, in equity, or as described in this Note or the other
Loan Documents. All reasonable fees, costs and expenses incurred by Xxxxxx
in
exercising any remedies, in the
preservation of Xxxxxx’s rights and interests in property, in investigating
Events of Default, and determining relative rights and obligations arising
under
the Loan Documents upon the occurrence of an Event of Default, shall become
a
part of the indebtedness evidenced by this Note and shall bear interest at
the
applicable rate hereunder from time to time.
This
Note
shall be governed by, and construed in accordance with the laws of the State
of
Washington without reference to choice of law rules.
Lender’s
failure to exercise its option to accelerate this Note upon a default or to
exercise any other rights to which Lender may be entitled in the event of a
default, will not constitute a waiver of the right to exercise such option
or
any other rights in the event of any subsequent default, whether of the same
or
a different nature.
Borrower
and all endorsers, guarantors and all persons liable or becoming liable on
this
Note waive presentment, protest and demand, notice of protest, demand and
dishonor and nonpayment of this Note, and consent to any and all renewals and
extensions in the time of payment hereof, and further agree that, at any time
and from time to time and without notice, the terms of payment hereof may be
modified by written agreement of Borrower and Lender without in any way
affecting the liability of any guarantor or endorser to this Note or any other
person liable or to become liable with respect to this Note.
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ORAL
AGREEMENTS OR ORAL COMMITMENTS TO LOAN MONEY, EXTEND CREDIT, OR TO FORBEAR
FROM
ENFORCING REPAYMENT OF A DEBT ARE NOT ENFORCEABLE UNDER WASHINGTON
LAW.
EMERITUS
CORPORATION,
a
Washington corporation
_/s/
Xxxxxxx X. Xxxxxxxxxx ___________
Xxxxxxx
X. Xxxxxxxxxx, Vice President, Finance
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