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EXHIBIT 10.2 PROMISSORY NOTE
$15,000,000 April 28, 1997
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 AND HAS
BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE ASSIGNED, SOLD, TRANSFERRED,
PLEDGED OR HYPOTHETICATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT
FOR THIS NOTE UNDER THE SECURITIES ACT OF 1933 OR AN OPINION OF COUNSEL
SATISFACTORY TO THE MAKER THAT REGISTRATION IS NOT REQUIRED UNDER SUCH ACT.
FOR VALUE RECEIVED, the undersigned, Alternative Living Services, Inc., a
Delaware corporation ("Borrower"), promises to pay to the order of RDV Capital
Management L.P., a Delaware limited partnership ("Lender") and, together with
any holder hereof ("Holder"), at 500 Grand Bank Building, 126 Ottawa Avenue,
N.W., Grand Rapids, Michigan 49503, (or at such other place as the Holder may
designate in writing to Borrower), the principal amount of Fifteen Million
($15,000,000) Dollars, plus interest as hereinafter provided.
All capitalized terms used herein shall have the meanings ascribed to such
terms in that certain Loan Agreement dated as of April 28, 1997 by and between
Borrower and Lender (the "Loan Agreement"), except to the extent that such
capitalized terms are otherwise defined or limited herein.
The principal amount of the Note, together with all accrued and unpaid
interest thereon, shall be paid in full on the first to occur of (i) the first
anniversary of the date hereof (such date, the "Maturity Date") or (ii) upon
the occurrence of an Event of Default.
Borrower may repay all or any portion of the principal amount of this Note
in full or in part at any time prior to the Maturity Date, without premium or
penalty, in the manner set forth in the Loan Agreement.
Borrower shall pay interest, at the rate set forth below (the "Applicable
Rate"), monthly in arrears (through and including the date immediately
preceding the payment date) on the 15th day of each calendar month, commencing
with May 15, 1997, with a final interest payment due when the principal amount
is paid in full. The principal amount shall bear interest during the period
from and including the date hereof to (but not including) the date the
principal amount is paid in full, at the per annum rate set forth below:
(i) from the Closing Date to the day
immediately before May 1, 1997, nine and
one-half percent (9.5%); and
(ii) from the first day of each calendar month
thereafter to the last day of such calendar
month,
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until all amounts hereunder are paid in
full, an interest rate equal to the
"prime rate," as quoted in the Money
Rates Section of the Wall Street
Journal, as of the Business Day
immediately preceding said first day
of such calendar month, plus one
percent (1%).
Interest shall be calculated on the basis of the 360/365 method, which
computes a daily amount of interest for a hypothetical year of 360 days, then
multiplies such amount by the actual number of days elapsed in an interest
calculation period. All past due amounts of principal of, and to the extent
permitted by applicable law, unpaid interest on, this Note from time to time
outstanding, shall bear interest at a rate equal to the greater of (i) the
Applicable Rate plus five percent (5%) or (ii) fifteen percent (15%) per annum.
In no event shall the amount of interest due or payable hereunder exceed
the maximum rate of interest allowed by applicable law, and in the event any
such payment is inadvertently paid by the undersigned or inadvertently received
by Holder, then such excess sum shall be credited as a payment of principal,
unless the undersigned shall notify Holder, in writing that the undersigned
elects to have such excess sum returned to it forthwith. It is the express
intent hereof that the undersigned not pay and that Holder not receive,
directly or indirectly, in any manner whatsoever, interest in excess of that
which may be lawfully paid by the undersigned under applicable law.
This Note is entitled to the benefits of the Loan Agreement which contains
provisions with respect to the acceleration of the maturity of this Note upon
the happening of certain stated events, and provisions for prepayment.
Should an Event of Default occur under the Loan Agreement, then, at any
time thereafter, Holder shall have the right and option, in its sole
discretion, to exercise any and all of the remedies provided and available to
it under the Loan Agreement.
All parties now or hereafter liable with respect to this Note, whether the
Borrower, any guarantor, endorser or any other Person, hereby expressly waive
presentation, demand of payment, protest, notice for demand of payment, protest
and notice of non-payment, or any other notice of any kind with respect
thereto.
No delay or failure on the part of Holder in the exercise of any right or
remedy hereunder, under the Loan Agreement, or at law or in equity, shall
operate as a waiver thereof, and no single or partial exercise by the Holder of
any right or remedy hereunder, under the Loan Agreement, or at law or in
equity, shall preclude or estop another or further exercise thereof or the
exercise of any other right or remedy.
Principal and interest on this Note shall be payable and paid in lawful
money of the United States of America.
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Time is of the essence of this contract and, in case this Note is
collected by law or through an attorney at law or under advice therefrom,
Borrower agrees to pay all costs of collection, including reasonable attorneys'
fees.
Holder shall be under no duty to exercise any or all of the rights and
remedies given by this Note or the Loan Agreement and no party to this
instrument shall be discharged from the obligations or undertakings hereunder
(a) should the Holder release or agree not to sue any Person against whom the
party has, to the knowledge of the Holder, a right to recourse, or (b) should
the Holder agree to suspend the right to enforce this Note or the Holder's
interest in any collateral pledged or any guaranty given to secure this Note
against such Person or other discharge such Person.
The provisions of this Note shall be construed and interpreted, and all
rights and obligations of the parties hereunder determined, in accordance with
the laws of the State of Michigan.
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IN WITNESS WHEREOF, Borrower has caused this Note to be executed, and
delivered in its corporate name, by and through its duly authorized officer, as
of the day and year first above written.
ALTERNATIVE LIVING SERVICES,
INC., a Delaware corporation
By: /S/ THOMAS E. KOMULA
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Thomas E. Komula
Title: Vice President
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