This Subordinated Renewal Promissory Note B (this "Note" or this "Promissory
Note") renews, amends and restates in part that certain Promissory Note A dated
February 8, 2002 made by Maker and others to Heller Healthcare Finance, Inc., a
Delaware corporation, in the original principal amount of $19,857,500.00, and
that certain Subordinated Promissory Note B dated February 8, 2002 made by Maker
and others to Heller Healthcare Finance, Inc., a Delaware corporation, in the
original principal amount of $10,692,500.00 (collectively, the "Original
Notes"), which Original Notes are now held by Holder. The Original Notes have
an aggregate current outstanding principal balance of $_______________. The
true, correct and complete originals of the Original Notes are attached hereto
as Exhibit "A". Maker and Holder hereby amend and restate the Original Notes in
part in accordance with the terms hereof. This Note evidences $18,700,000 of
the outstanding principal balance of the Original Notes together with additional
indebtedness in the principal amount of $2,602,000. This Note is not intended
to and shall not constitute a novation. Florida Documentary stamp tax have been
paid on the mortgage instrument securing this Note.
LOAN NO. 07-0004024
SUBORDINATED RENEWAL PROMISSORY NOTE B
$21,302,000.00 December 6, 2002
1. PROMISE TO PAY.
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FOR VALUE RECEIVED, ESC-PORT ST. RICHIE, LLC, a Washington limited
liability company ("MAKER"), whose address is 3131 Elliott Avenue, Suite 500,
Seattle, Washington 98121, promises to pay to the order of GENERAL ELECTRIC
CAPITAL CORPORATION, a Delaware corporation, and its successors and assigns
("HOLDER") the sum of Twenty-One Million Three Hundred Two Thousand and No/100
Dollars ($21,302,000.00), or so much thereof as may be advanced and outstanding
from time to time, together with all other amounts added thereto pursuant to
this Note or otherwise payable to Holder under the Loan Documents (as
hereinafter defined), including, but not limited to, the "EXIT FEE" as defined
and set forth in the Loan Agreement (as hereinafter defined) (or so much thereof
as may from time to time be outstanding), together with interest thereon as
hereinafter set forth, all payable in lawful money of the United States of
America (the "LOAN"). Payments shall be made to Holder at GEMSA, File 59229,
Los Angeles, California 90074-9229 (or such other address as Holder may
hereafter designate in writing to Maker).
Simultaneously with the execution of this Note (this Note is sometimes referred
to herein as "NOTE B", Maker and certain of its Affiliates are executing a
Promissory Note A of even date herewith payable to Holder ("NOTE A") in the
amount of Forty-One Million Six Hundred Ninety-Eight Thousand and No/100 Dollars
($41,698,000.00).
The repayment of the Loan evidenced by this Note and Note A is secured by, among
other things, the Mortgage and the Assignment of Leases. This Note, Note A, the
Mortgage, the Assignment of Leases, the Loan Agreement of even date herewith
between Maker and Holder (the "LOAN AGREEMENT") and any other documents
evidencing or securing the Loan or executed in connection therewith (other than
the "Other Loan Instruments" as defined in the Mortgage), and any modification,
renewal or extension of any of the foregoing are collectively called the "LOAN
DOCUMENTS". Except as otherwise provided herein, capitalized terms used in this
Note shall have the same meanings as are assigned to such terms in the Loan
Agreement.
2. INTEREST.
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So long as no Event of Default (as hereinafter defined) exists, interest
shall accrue on the principal balance hereof from time to time outstanding and
Maker shall pay interest thereon at a floating rate per annum equal to four and
fifteen hundredths percent (4.15%) plus the Base Rate; provided, however, in no
event shall the interest rate be less than six and one-half percent (6.50%) (the
greater rate referred to as the "INTEREST RATE"). "BASE RATE" shall mean the
rate published each business day in the Wall Street Journal for notes maturing
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three (3) months after issuance under the caption "Money Rates, London Interbank
Offered Rates (LIBOR)." The Interest Rate for each calendar month shall be
fixed based upon the Base Rate published prior to and in effect on the first
(1st) business day of such month; provided, however, the Interest Rate from and
including the Closing Date through December 31, 2002 shall be fixed based upon
the Base Rate in effect on the business day immediately preceding the Closing
Date. Interest shall be calculated based on a 360 day year and charged for the
actual number of days elapsed.
3. PAYMENT.
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3.1. INTEREST. Maker shall make interest payments monthly in arrears on the
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first (1st) day of each month commencing January 1, 2003 computed on the
outstanding principal balance of the Loan at the Interest Rate.
3.2. PRINCIPAL PAYMENTS. Commencing on January 1, 2003 and continuing
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through the Repayment Date, on the first (1st) day of each calendar month, Maker
shall make a principal amortization payment in accordance with the provisions of
Section 1.4.2 of the Loan Agreement.
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This Note shall be due and payable on or before December 5, 2006 or any
earlier date on which this Note shall be required to be paid in full, whether by
acceleration or otherwise ("MATURITY DATE").
4. PREPAYMENT.
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Other than the principal payments required under Sections 1.1.3(g), 1.4.2
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and 2.2 of the Loan Agreement, Maker may not prepay this Note in full or in part
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prior to December 6, 2004. Thereafter, Maker may prepay this Note in full (but
not in part) without premium upon not less than thirty (30) days prior written
notice to Holder and payment in full of Note A and the Exit Fee (as defined in
the Loan Agreement), if any, then due to Holder.
5. EXIT FEE.
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As additional consideration for entering into the Loan Agreement and making
the Loan pursuant thereto, Maker shall pay Holder the Exit Fee, if any, due in
accordance with the Loan Agreement.
6. DEFAULT.
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6.1. EVENTS OF DEFAULT.
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Any of the following shall constitute an "EVENT OF DEFAULT" under this
Note: (a) failure to pay any amounts owed pursuant to this Note or Note A
within ten (10) calendar days after such payment is due; or (b) the occurrence
of any default under any of the other Loan Documents, including, without
limitation, Note A, after giving effect to any applicable grace or cure period.
6.2. REMEDIES.
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So long as an Event of Default remains outstanding: (a) interest shall
accrue at a rate equal to the Interest Rate plus four percent (4%) per annum
(the "DEFAULT RATE); (b) Holder may, at its option without further notice (such
notice being expressly waived) or an opportunity to cure, declare this Note and
Note A immediately due and payable; and (c) Holder may pursue all rights and
remedies available under the Deed of Trust and the Assignment of Leases or any
other Loan Documents. Holder's rights, remedies and powers, as provided in this
Note, Note A and the other Loan Documents, are cumulative and concurrent, and
may be pursued singly, successively or together against Maker, any guarantor of
the Loan, the security described in the Loan Documents, and any other security
given at any time to secure the payment hereof, all at the sole discretion of
Holder. Additionally, Holder 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 Holder's sole discretion. Failure of Holder, for any
period of time or on more than one occasion, to exercise its option to
accelerate the Maturity Date shall not constitute a waiver of the right to
exercise the same at any time during the continued existence of any Event of
Default or any subsequent Event of Default.
If any attorney is engaged: (i) to collect the Loan or any sums due under the
Loan Documents, whether or not legal proceedings are thereafter instituted by
Holder; (ii) to represent Holder in any bankruptcy, reorganization, receivership
or other proceedings affecting creditors' rights and involving a claim under
this Note or Note A; (iii) to protect the liens of the Deed of Trust, the
Assignment of Leases or any of the Loan Documents; (iv) to represent Holder in
any other proceedings whatsoever in connection with the Deed of Trust or any of
the Loan Documents including post judgment proceedings to enforce any judgment
related to the Loan Documents; or (v) in connection with seeking an out-of-court
workout or settlement of any of the foregoing, then Maker shall pay to Holder
all costs, attorneys' fees and expenses in connection therewith, in addition to
all other amounts due hereunder.
7. LATE CHARGE.
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If payments of principal, interest due under this Note, or any other
amounts due under the other Loan Documents are not timely made and remain
overdue for a period of ten (10) days, Maker, without notice or demand by
Holder, promptly shall pay an amount ("LATE CHARGE") equal to four percent (4%)
of each delinquent payment.
8. APPLICABLE LAW; SEVERABILITY.
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THIS NOTE SHALL BE GOVERNED BY AND SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF ILLINOIS, WITHOUT REGARD TO
CONFLICTS OF LAW PRINCIPLES. THE INVALIDITY, ILLEGALITY OR UNENFORCEABILITY OF
ANY PROVISION OF THIS NOTE SHALL NOT AFFECT OR IMPAIR THE VALIDITY, LEGALITY OR
ENFORCEABILITY OF THE REMAINDER OF THIS NOTE, AND TO THIS END, THE PROVISIONS OF
THIS NOTE ARE DECLARED TO BE SEVERABLE.
9. WAIVER.
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Maker, for itself and all endorsers, guarantors and sureties of this Note,
and their respective successors and assigns, hereby waives presentment for
payment, demand, notice of nonpayment, notice of dishonor, protest of any
dishonor, notice of protest and protest of this Note, and all other notices in
connection with the delivery, acceptance, performance, default or enforcement of
the payment of this Note, and agrees that their respective liability shall be
unconditional and without regard to the liability of any other party and shall
not be in any manner affected by any indulgence, extension of time, renewal,
waiver or modification granted or consented to by Holder. Maker, for itself and
all endorsers, guarantors and sureties of this Note and their respective heirs,
legal representatives, successors and assigns, hereby consents to every
extension of time, renewal, waiver or modification that may be granted by Holder
with respect to the payment or other provisions of this Note, and to the release
of any makers, endorsers, guarantors or sureties, and their successors and
assigns, and of any collateral given to secure the payment hereof, or any part
hereof, with or without substitution, and agrees that additional makers,
endorsers, guarantors or sureties and their heirs, legal representatives,
successors and assigns, may become parties hereto without notice to Maker or to
any endorser, guarantor or surety and without affecting the liability of any of
them.
10. SECURITY, APPLICATION OF PAYMENTS.
------------------------------------
This Note is secured by the liens, encumbrances and obligations created
hereby and by the other Loan Documents and the terms and provisions of the other
Loan Documents are hereby incorporated herein. Payments will be applied, at
Holder's option, first to any fees, expenses or other costs Maker is obligated
to pay under this Note, Note A or the other Loan Documents, second to current
interest due on Note A, third to any past due interest under Note A, if any,
fourth to current interest due on this Note, fifth to any past due interest
payable under this Note, sixth to the outstanding principal balance of Note A,
seventh to the outstanding principal balance of this Note and eighth to the Exit
Fee.
11. MISCELLANEOUS.
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11.1. AMENDMENTS.
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This Note may not be amended orally, but only by an amendment in writing
signed by Holder.
11.2. LAWFUL RATE OF INTEREST.
--------------------------
In no event whatsoever shall the amount of interest paid or agreed to be
paid to Holder pursuant to this Note or any of the Loan Documents exceed the
highest lawful rate of interest permissible under applicable law. If, from any
circumstances whatsoever, fulfillment of any provision of this Note and the
other Loan Documents shall involve exceeding the lawful rate of interest which a
court of competent jurisdiction may deem applicable hereto ("EXCESS INTEREST"),
then ipso facto, the obligation to be fulfilled shall be reduced to the highest
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lawful rate of interest permissible under such law and if, for any reason
whatsoever, Holder shall receive, as interest, an amount which would be deemed
unlawful under such applicable law, such interest shall be applied to the Loan
(whether or not due and payable), and not to the payment of interest, or
refunded to Maker if such Loan have been paid in full. Neither Maker nor any
guarantor, endorser or surety nor their successors or assigns shall have any
action against Holder for any damages whatsoever arising out of the payment or
collection of any such Excess Interest.
11.3. CAPTIONS.
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The captions of the Paragraphs of this Note are for convenience of
reference only and shall not be deemed to modify, explain, enlarge or restrict
any of the provisions hereof.
11.4. NOTICES.
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Notices shall be given under this Note in conformity with the terms and
conditions of the Loan Agreement.
11.5. JOINT AND SEVERAL.
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The obligations of Maker under this Note shall be joint and several
obligations of Maker and of each Maker, if more than one, and of each Maker's
successors and assigns.
11.6. TIME OF ESSENCE.
-----------------
Time is of the essence of this Note and the performance of each of the
covenants and agreements contained herein.
12. SALE OF LOAN.
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Holder, at any time and without the consent of Maker, may grant
participations in or sell, transfer, assign and convey all or any portion of its
right, title and interest in and to the Loan, this Note, Note A, the Deed of
Trust and the Assignment of Leases and the other Loan Documents, any guaranties
given in connection with the Loan and any collateral given to secure the Loan.
13. CONSENT TO JURISDICTION.
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MAKER HEREBY CONSENTS TO THE JURISDICTION OF ANY STATE OR FEDERAL COURT
LOCATED WITHIN THE COUNTY OF COOK, STATE OF ILLINOIS AND IRREVOCABLY AGREES
THAT, SUBJECT TO HOLDER'S ELECTION, ALL ACTIONS OR PROCEEDINGS ARISING OUT OF OR
RELATING TO THIS NOTE OR THE OTHER LOAN DOCUMENTS SHALL BE LITIGATED IN SUCH
COURTS. MAKER EXPRESSLY SUBMITS AND CONSENTS TO THE JURISDICTION OF THE
AFORESAID COURTS AND WAIVES ANY DEFENSE OF FORUM NON CONVENIENS. MAKER HEREBY
WAIVES PERSONAL SERVICE OF ANY AND ALL PROCESS AND AGREES THAT ALL SUCH SERVICE
OF PROCESS MAY BE MADE UPON MAKER BY CERTIFIED OR REGISTERED MAIL, RETURN
RECEIPT REQUESTED, ADDRESSED TO MAKER, AT THE ADDRESS SET FORTH IN THIS NOTE AND
SERVICE SO MADE SHALL BE COMPLETE TEN (10) DAYS AFTER THE SAME HAS BEEN POSTED.
14. JURY TRIAL WAIVER.
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TO THE EXTENT PERMITTED BY LAW, MAKER, AND HOLDER BY ITS ACCEPTANCE OF THIS
NOTE, HEREBY WAIVE THEIR RESPECTIVE RIGHTS TO A TRIAL BY JURY IN ANY ACTION OR
PROCEEDING BASED UPON, OR RELATED TO, THE SUBJECT MATTER OF THIS NOTE AND THE
BUSINESS RELATIONSHIP THAT IS BEING ESTABLISHED. THIS WAIVER IS KNOWINGLY,
INTENTIONALLY AND VOLUNTARILY MADE BY MAKER AND BY HOLDER, AND MAKER
ACKNOWLEDGES THAT NEITHER HOLDER NOR ANY PERSON ACTING ON BEHALF OF HOLDER HAS
MADE ANY REPRESENTATIONS OF FACT TO INDUCE THIS WAIVER OF TRIAL BY JURY OR HAS
TAKEN ANY ACTIONS WHICH IN ANY WAY MODIFY OR NULLIFY ITS EFFECT. MAKER AND
HOLDER ACKNOWLEDGE THAT THIS WAIVER IS A MATERIAL INDUCEMENT TO ENTER INTO A
BUSINESS RELATIONSHIP, THAT MAKER AND HOLDER HAVE ALREADY RELIED ON THIS WAIVER
IN ENTERING INTO THIS NOTE AND THAT EACH OF THEM WILL CONTINUE TO RELY ON THIS
WAIVER IN THEIR RELATED FUTURE DEALINGS. MAKER AND HOLDER FURTHER ACKNOWLEDGE
THAT THEY HAVE BEEN REPRESENTED (OR HAVE HAD THE OPPORTUNITY TO BE REPRESENTED)
IN THE SIGNING OF THIS NOTE AND IN THE MAKING OF THIS WAIVER BY INDEPENDENT
LEGAL COUNSEL.
IN WITNESS WHEREOF, Maker has executed this Note or has caused the same to
be executed by its duly authorized representative, under seal, as of the date
first set forth above.
MAKER:
ESC-PORT ST. RICHIE, LLC, a Washington limited liability company
By: Emeritus Realty Corporation, a Nevada corporation, its sole member
By: /s/ Raymond R. Brandstrom
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Its: Raymond R. Brandstrom
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Title: Vice President of Finance
------------------------------