THIS NOTE AND THE INDEBTEDNESS EVIDENCED HEREBY ARE SUBORDINATE IN THE MANNER
AND TO THE EXTENT SET FORTH IN THAT CERTAIN SUBORDINATION AGREEMENT (THE
"SUBORDINATION AGREEMENT") DATED JANUARY 25, 1999, AMONG FBR ASSET INVESTMENT
CORPORATION, BROOKDALE LIVING COMMUNITIES, INC. (THE "BORROWER"), AND LASALLE
NATIONAL BANK ("BANK"), TO THE INDEBTEDNESS OWED BY THE BORROWER TO THE HOLDERS
OF ALL OF THE NOTES ISSUED PURSUANT TO THAT CERTAIN LOAN AGREEMENT, DATED APRIL
27, 1998 AS AMENDED THROUGH THE DATE HEREOF, BETWEEN THE BORROWER AND BANK, AS
SUCH LOAN AGREEMENT MAY BE AMENDED, SUPPLEMENTED, OR OTHERWISE MODIFIED FROM
TIME TO TIME; AND EACH HOLDER OF THIS NOTE, BY ITS ACCEPTANCE HEREOF, SHALL BE
BOUND BY THE PROVISIONS OF THE SUBORDINATION AGREEMENT.
PROMISSORY NOTE
$5,000,000 January 25, 1999
FOR VALUE RECEIVED, the undersigned, BROOKDALE LIVING COMMUNITIES,
INC., a Delaware corporation, whose address is 00 Xxxx Xxxxxx Xxxxx, Xxxxx 0000,
Xxxxxxx, Xxxxxxxx 00000 (the "Borrower"), promises to pay to the order of FBR
ASSET INVESTMENT CORPORATION, a Virginia corporation, whose address is Potomac
Tower, 0000 Xxxxxxxxxx Xxxxxx Xxxxx, 00xx Xxxxx, Xxxxxxxxx, Xxxxxxxx 00000 (the
"Lender") on or before the Maturity Date, in lawful money of the United States
of America, the principal sum of FIVE MILLION DOLLARS ($5,000,000) plus interest
at the times and in the amounts and manner as provided in the Loan Agreement
(the "Agreement"), dated as of January 25, 1999, between the Borrower and the
Lender.
MAXIMUM RATE OF INTEREST: It is intended that the rate of interest
hereon shall never exceed the maximum rate, if any, which may be legally charged
on the Loan evidenced by this Note ("Maximum Rate"), and if the provisions for
interest contained in this Note would result in a rate higher than the Maximum
Rate, interest shall nevertheless be limited to the Maximum Rate and any amounts
which may be paid toward interest in excess of the Maximum Rate shall be applied
to the reduction of principal, or, at the option of the Lender, returned to the
Borrower.
DUE DATE: All indebtedness evidenced hereby not paid before the
Maturity Date shall be due and payable on the Maturity Date.
PLACE OF PAYMENT: All payments hereon shall be made, and all notices to
the Lender required or authorized hereby shall be given, at the office of the
Lender at the
address designated in the heading of this Note, or to such other place as the
Lender may from time to time direct by written notice to the Borrower.
PAYMENT AND EXPENSES OF COLLECTION: All amounts payable hereunder are
payable by wire transfer in immediately available funds to the account number
specified by the Lender, in lawful money of the United States. Payments remitted
by the Borrower via wire transfer initiated after 3:00 p.m. New York City time
shall be deemed to be received on the next Business Day. The Borrower agrees to
pay all costs of collection when incurred, including, without limiting the
generality of the foregoing, reasonable attorneys' fees through appellate
proceedings and allocated cost of in-house counsel, and to perform and comply
with each of the covenants, conditions, provisions and agreements contained in
every instrument now evidencing or securing said indebtedness. If any suit or
action be instituted to enforce this Note, the Borrower promises to pay, in
addition to the cost and disbursements otherwise allowed by applicable Law, such
sums as the court may adjudge reasonable attorneys' fees in such suit or action.
DEFAULTS: Upon the happening of an Event of Default (as defined in the
Agreement), the Lender shall have all rights and remedies set forth in the
Agreement.
The failure to exercise any of the rights and remedies set forth in the
Agreement shall not constitute a waiver of the right to exercise the same or any
other option at any subsequent time in respect of the same event or any other
event. The acceptance by the Lender of any payment hereunder which is less than
payment in full of all amounts due and payable at the time of such payment shall
not constitute a waiver of the right to exercise any of the foregoing rights and
remedies at that time or at any subsequent time or nullify any prior exercise of
any such rights and remedies without the express consent of Lender, except as
and to the extent otherwise provided by applicable Law.
WAIVERS: To the extent permitted by applicable Law, the Borrower waives
diligence, presentment, protest and demand and also notice of protest, demand,
dishonor and nonpayment of this Note, and expressly agrees that this Note, or
any payment hereunder, may be extended from time to time, and consents to the
acceptance of collateral, the release of any collateral for this Note, the
release of any party primarily or secondarily liable hereon, and that it will
not be necessary for the Lender, in order to enforce payment of this Note, to
first institute or exhaust Lender's remedies against the Borrower or any other
party liable hereon or against any collateral for this Note. None of the
foregoing shall affect the liability of the Borrower and any endorsers or
guarantors hereof. No extension of time for the payment of this Note, or any
installment hereof, made by agreement by the Lender with any person now or
hereafter liable for the payment of this Note, shall affect the liability under
this Note of the Borrower, even if the Borrower is not a party to such
agreement; provided, however, the Lender and the Borrower, by written agreement
between them, may affect the liability of the Borrower.
TERMINOLOGY: Any reference herein to the Lender shall be deemed to
include and apply to every subsequent holder of this Note. Capitalized terms
used but not defined
herein shall have the meanings assigned to such terms in the Agreement. Words of
masculine or neuter import shall be read as if written in the neuter or
masculine or feminine when appropriate.
AGREEMENT: Reference is made to the Agreement for provisions as to
payments, collateral and acceleration.
THIS NOTE IS GOVERNED BY THE PROVISIONS OF THE AGREEMENT WHICH IS INCORPORATED
HEREIN BY REFERENCE, AND IN THE EVENT ANY TERMS OF THIS NOTE ARE INCONSISTENT
WITH THE TERMS OF THE AGREEMENT, THE TERMS OF THE AGREEMENT SHALL GOVERN THIS
NOTE. NOTWITHSTANDING THE FOREGOING SENTENCE, NO REFERENCE HEREIN TO THE
AGREEMENT AND NO PROVISION OF THIS NOTE OR OF THE AGREEMENT SHALL ALTER OR
IMPAIR THE OBLIGATION OF THE BORROWER, WHICH IS ABSOLUTE AND UNCONDITIONAL, TO
PAY THE PRINCIPAL OF AND INTEREST ON THIS NOTE AT THE RESPECTIVE TIMES AND AT
THE RATES HEREIN PRESCRIBED.
GOVERNING LAW; CONSENT TO FORUM; IMMUNITIES: This Note and the
Agreement shall be governed by and construed in accordance with the Laws of the
Commonwealth of Virginia, without giving effect to the conflict of laws rules
therein. The parties hereto hereby consent and agree that the Circuit Court of
Arlington County, Virginia, or, at the Lender's option, the United States
District Court for the Eastern District of Virginia, shall have exclusive
jurisdiction to hear and determine any claims or disputes between the parties
hereto pertaining to the Note or the Agreement or to any matter arising out of
or related to the Note or the Agreement. The parties hereto expressly submit and
consent in advance to such jurisdiction in any action or suit commenced in any
such court, and hereby waive any objection which it may have based upon lack of
personal jurisdiction, improper venue or forum non conveniens and hereby consent
to the granting of such legal or equitable relief as is deemed appropriate by
such court. Each party hereto irrevocably consents to the service of process by
registered or certified mail, postage prepaid, to it at its address given
pursuant to Section 10.01 of the Agreement. Nothing in the Agreement or the Note
shall be deemed or operate to affect the right of the Lender to serve legal
process in any other manner permitted by applicable Law, or to preclude the
enforcement by the Lender of any judgment or order obtained in such forum or the
taking of any action under the Agreement or the Note to enforce same in any
other appropriate forum or jurisdiction.
To the extent that the Borrower has or may hereafter acquire any
immunity from the jurisdiction of any court or from any legal process (whether
through service or notice, attachment prior to judgment, attachment in aid of
execution, execution or otherwise) with respect to the Borrower or the
Borrower's property, the Borrower hereby irrevocably waives such immunity in
respect of its obligations under the Agreement.
To the extent permitted by applicable Law, each party hereto
irrevocably waives any right such party may have to consequential or punitive
damages from any other party and hereby agrees not to assert any claim for such
damages.
BROOKDALE LIVING COMMUNITIES, INC.
By: /s/ Xxxxxx X. Xxxxxxxx, Xx.
----------------------------------
Name: Xxxxxx X. Xxxxxxxx, Xx.
Title: Executive Vice President and
Chief Financial Officer
