HomeMy WebLinkAbout11-8-01 DRAFT PROMISSORY NOTE III ,( oi
PROMISSORY NOTE
$737,100.00 , 2001
, Minnesota
This Promissory Note (the"Note") is given in connection with that certain
Development Agreement (the "Development Agreement") by and between Orono Senior
Housing, LLC, a limited liability company organized under the laws of the State of
Minnesota(herein the "Borrower") and Dunbar Development Corporation, a corporation
organized under the laws of the State of Minnesota(herein "Dunbar"). All capitalized
terms not defined in this Note shall have the meaning given them in the Development
Agreement.
FOR VALUE RECEIVED, the undersigned Borrower, promises to pay to the
order of [Dunbar] [Union Land, LLC], its successors and assigns ("Holder"), at 5000
Glenwood Avenue South, Minneapolis, Minnesota 55422, or at such other address as
Holder designates to Borrower in writing, the principal sum of Seven Hundred Thirty-
Seven Thousand One Hundred and no/100 Dollars ($737,100.00), together with interest
on the unpaid principal balance from time to time outstanding, from and after the
Stabilized Occupancy Date (defined below), at the rate of 9% per annum.
Interest shall accrue from the date on which the Project achieves 93% occupancy
and the Project experiences Excess Cash Flow (defined below) and shall continue to
accrue until the entire outstanding principal balance, plus accrued interest, is paid in full.
For purposes of this Note, Excess Cash Flow shall be the amount by which monthly cash
flow generated by the Project exceeds Orono's monthly debt service obligations under
the Loan Agreement and the monthly operating costs of the Project.
Principal and interest, as applicable, shall be paid monthly from 100% of the
Excess Cash Flow, except that the first $40,000.00 of Excess Cash Flow each calendar
year shall be paid to the Wedum Foundation. The unpaid principal of, and accrued
interest on, this Note shall be paid in full prior to Borrower's use of Excess Cash Flow for
any other purpose. Borrower may accelerate payment of this Note by applying other
funds at any time without penalty. All payments shall be applied first to accrued interest
and then to principal.
The occurrence of any of the following events shall constitute an Event of Default
under this Note: (i) this Note is not paid in full by , 200_; (ii) any breach or
default in the payment of this Note; (iii) any assignment for the benefit of creditors of
Borrower; (iii) the commencement of any proceeding under any bankruptcy, insolvency,
receivership, dissolution, liquidation or similar law by or against the Borrower; or(iv) the
issuance or levy of any writ, warrant, attachment, garnishment, execution or other process
against any property of Borrower in an amount greater than $10,000.00. Upon an Event
of Default, Borrower shall pay all costs of collection, including reasonable attorneys'
fees.
Upon the commencement of any proceeding under any bankruptcy law by or
against the Borrower, this Note automatically shall become immediately due and payable
for the entire unpaid principal balance of this Note plus accrued interest and other
charges, fees and expenses under this Note without any declaration, presentment,
demand, protest, or other notice of any kind. Upon the occurrence of any other Event of
Default and following five (5) days' written notice, the then holder of this Note may, at
its option, declare this Note to be immediately due and payable and thereupon this Note
shall become due and payable for the entire unpaid principal balance of this Note plus
accrued interest without any presentment, demand, protest or other notice of any kind.
This Note is issued in and shall be governed by the laws of the State of
Minnesota.
The indebtedness represented by this Note shall be, in all respects, subordinate to
the obligations of Orono under the Bond Documents.
No delay or omission on the part of Holder in exercising any right under this Note
shall operate as a waiver of such right or of any other remedy under this Note. A waiver
on any one occasion shall not be construed as a waiver of any such right or remedy on a
future occasion.
Presentment for payment, notice of dishonor, protest and notice of protest are
hereby waived.
Any notice by Borrower or Holder under this Note shall be in writing and shall be
given by mailing such notice by certified mail, return receipt requested, to the other party
at the address stated above for that party, or at such other address as may have been
designated by notice given by that party. A notice shall be deemed given on the date it is
mailed in the required form and manner.
IN WITNESS WHEREOF, Borrower has executed this Note effective as
of , 2001.
BORROWER
Orono Senior Housing, LLC
By
Its
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