Exhibit 10.84

 
Promissory Note
 

$26,250,000.00
December 12, 2005

 
 
FOR VALUE RECEIVED, American Retirement Corporation, a Tennessee corporation
(“Borrower”), hereby promises to pay to the order of Bank of America, N.A., a
national banking association (together with any and all of its successors and
assigns and/or any other holder of this Note, “Lender”), without offset, in
immediately available funds in lawful money of the United States of America, at
414 Union Street, Nashville, Tennessee, the principal sum of Twenty-Six Million
Two Hundred Fifty Thousand and No/100 Dollars ($26,250,000.00) (or the unpaid
balance of all principal advanced against this Note, if that amount is less),
together with interest on the unpaid principal balance of this Note from day to
day outstanding as hereinafter provided.
 
Section 1     Payment Schedule and Maturity Date. Prior to maturity, accrued and
unpaid interest shall be due and payable in arrears on the first (1st) day of
each month commencing on January 1, 2006. The entire principal balance of this
Note then unpaid, together with all accrued and unpaid interest and all other
amounts payable hereunder and under the other Loan Documents (as hereinafter
defined), shall be due and payable in full on December 12, 2010 (the “Maturity
Date”), the final maturity of this Note.
 
Section 2     Security; Loan Documents. The security for this Note includes a
Collateral Assignment of Note, Deed of Trust and Other Loan Documents (as the
same may from time to time be amended, restated, modified or supplemented, the
“Assignment”) of even date herewith from Borrower to Lender, conveying and
encumbering certain personal property more particularly described therein (the
“Collateral”). This Note, the Assignment, the Construction Loan Agreement
between Borrower and Lender of even date herewith (as the same may from time to
time be amended, restated, modified or supplemented, the “Loan Agreement”) and
all other documents now or hereafter securing, guaranteeing or executed in
connection with the loan evidenced by this Note (the “Loan”), as the same may
from time to time be amended, restated, modified or supplemented, are herein
sometimes called individually a “Loan Document” and together the “Loan
Documents.”
 
Section 3     Interest Rate.
 
(a)     BBA LIBOR Daily Floating Rate. The unpaid principal balance of this Note
from day to day outstanding which is not past due, shall bear interest at a
fluctuating rate of interest per annum equal to the BBA LIBOR Daily Floating
Rate plus two hundred twenty-five (225) basis points per annum. The “BBA LIBOR
Daily Floating Rate” shall mean a fluctuating rate of interest per annum equal
to the British Bankers Association LIBOR Rate (“BBA LIBOR”), as published by
Reuters (or other commercially available source providing quotations of BBA
LIBOR as selected by Lender from time to time) as determined for each Business
Day at approximately 11:00 a.m. London time two (2) London Banking Days prior to
the date in question, for U.S. Dollar deposits (for delivery on the first day of
such interest period) with a one month term, as adjusted from time to time in
Lender’s sole discretion for reserve requirements, deposit insurance assessment
rates and other regulatory costs. If such rate is not available at such time for
any reason, then the rate will be determined by such alternate method as
reasonably selected by Lender. A “London Banking Day” is a day on which banks in
London are open for business and dealing in offshore dollars. Interest shall be
computed for the actual number of days which have elapsed, on the basis of a
360-day year.
 
(b)     Alternative Rates. If Lender determines that no adequate basis exists
for determining the BBA LIBOR Daily Floating Rate or that the BBA LIBOR Daily
Floating Rate will not adequately and fairly reflect the cost to Lender of
funding the Loan, or that any applicable Law or regulation or compliance
therewith by Lender prohibits or restricts or makes impossible the charging of
interest based on the BBA LIBOR Daily Floating Rate and Lender so notifies
Borrower, then until Lender notifies Borrower that the circumstances giving rise
to such suspension no longer exist, interest shall accrue and be payable on the
unpaid principal balance of this Note from the date Lender so notifies Borrower
until the Maturity Date of this Note (whether by acceleration, declaration,
extension or otherwise) at a fluctuating rate of interest equal to the Prime
Rate of Lender. The term “Prime Rate” means, on any day, the rate of interest
per annum then most recently established by Lender as its “prime rate.” Any such
rate is a general reference rate of interest, may not be related to any other
rate, and may not be the lowest or best rate  actually
 
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charged by Lender to any customer or a favored rate and may not correspond with
future increases or decreases in interest rates charged by other lenders or
market rates in general, and that Lender may make various business or other
loans at rates of interest having no relationship to such rate. Each time the
Prime Rate changes, the per annum rate of interest on this Note shall change
immediately and contemporaneously with such change in the Prime Rate. If Lender
(including any subsequent holder of this Note) ceases to exist or to establish
or publish a prime rate from which the Prime Rate is then determined, the
applicable variable rate from which the Prime Rate is determined thereafter
shall be instead the prime rate reported in The Wall Street Journal (or the
average prime rate if a high and a low prime rate are therein reported), and the
Prime Rate shall change without notice with each change in such prime rate as of
the date such change is reported.
 
(c)     Past Due Rate. If any amount payable by Borrower under any Loan Document
is not paid when due (without regard to any applicable grace periods), such
amount shall thereafter bear interest at the Past Due Rate (as defined below) to
the fullest extent permitted by applicable Law. Accrued and unpaid interest on
past due amounts (including interest on past due interest) shall be due and
payable on demand, at a fluctuating rate per annum (the “Past Due Rate”) equal
to the Prime Rate plus two hundred (200) basis points.
 
Section 4     Prepayment. Borrower may prepay the principal balance of this
Note, in full at any time or in part from time to time, without fee, premium or
penalty, provided that: (a) no prepayment may be made which in Lender’s judgment
would contravene or prejudice funding under any applicable permanent loan
commitment or tri-party agreement or the like; (b) Lender shall have actually
received from Borrower prior written notice of (i) Borrower’s intent to prepay,
(ii) the amount of principal which will be prepaid (the “Prepaid Principal”),
and (iii) the date on which the prepayment will be made; (c) each prepayment
shall be in the amount of $1,000 or a larger integral multiple of $1,000 (unless
the prepayment retires the outstanding balance of this Note in full); and
(d) each prepayment shall be in the amount of 100% of the Prepaid Principal,
plus accrued unpaid interest thereon to the date of prepayment, plus any other
sums which have become due to Lender under the Loan Documents on or before the
date of prepayment but have not been paid. If this Note is prepaid in full, any
commitment of Lender for further advances shall automatically terminate.
 
Section 5     Late Charges. If Borrower shall fail to make any payment under the
terms of this Note (other than the payment due at maturity) within fifteen (15)
days after the date such payment is due, Borrower shall pay to Lender on demand
a late charge equal to four percent (4%) of the amount of such payment. Such
fifteen (15) day period shall not be construed as in any way extending the due
date of any payment. The late charge is imposed for the purpose of defraying the
expenses of Lender incident to handling such delinquent payment. This charge
shall be in addition to, and not in lieu of, any other amount that Lender may be
entitled to receive or action that Lender may be authorized to take as a result
of such late payment.
 
Section 6     Certain Provisions Regarding Payments. All payments made under
this Note shall be applied, to the extent thereof, to late charges, to accrued
but unpaid interest, to unpaid principal, and to any other sums due and unpaid
to Lender under the Loan Documents, in such manner and order as Lender may elect
in its sole discretion, any instructions from Borrower or anyone else to the
contrary notwithstanding. Remittances shall be made without offset, demand,
counterclaim, deduction, or recoupment (each of which is hereby waived) and
shall be accepted subject to the condition that any check or draft may be
handled for collection in accordance with the practice of the collecting bank or
banks. Acceptance by Lender of any payment in an amount less than the amount
then due on any indebtedness shall be deemed an acceptance on account only,
notwithstanding any notation on or accompanying such partial payment to the
contrary, and shall not in any way (a) waive or excuse the existence of an Event
of Default (as hereinafter defined), (b) waive, impair or extinguish any right
or remedy available to Lender hereunder or under the other Loan Documents, or
(c) waive the requirement of punctual payment and performance or constitute a
novation in any respect. Payments received after 2:00 p.m. shall be deemed to be
received on, and shall be posted as of, the following Business Day. Whenever any
payment under this Note or any other Loan Document falls due on a day which is
not a Business Day, such payment may be made on the next succeeding Business
Day. Borrower has elected to authorize Lender to effect payment of sums due
under this Note by means of debiting Borrower's Account Number 3253194544. This
authorization shall not affect the obligation of Borrower to pay such sums when
due, without notice, if there are insufficient funds in such account to make
such payment in full on the due date thereof, or if Lender fails to debit the
account.
 
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Section 7     Events of Default. The occurrence of any one or more of the
following shall constitute an “Event of Default” under this Note:
 
(a)     Borrower fails to pay to Lender any payment within three (3) days after
the date such payment is due or upon acceleration, maturity or otherwise.
 
(b)     Any covenant, agreement or condition in this Note is not fully and
timely performed, observed or kept, subject to any applicable grace or cure
period.
 
(c)     An Event of Default (as therein defined) occurs under any of the Loan
Documents other than this Note (subject to any applicable grace or cure period).
 
Section 8     Remedies. Upon the occurrence of an Event of Default, Lender may
at any time thereafter exercise any one or more of the following rights, powers
and remedies:
 
(a)     Lender may accelerate the Maturity Date and declare the unpaid principal
balance and accrued but unpaid interest on this Note, and all other amounts
payable hereunder and under the other Loan Documents, at once due and payable,
and upon such declaration the same shall at once be due and payable.
 
(b)     Lender may set off the amount due against any and all accounts, credits,
money, securities or other property now or hereafter on deposit with, held by or
in the possession of Lender to the credit or for the account of Borrower,
without notice to or the consent of Borrower.
 
(c)     Lender may exercise any of its other rights, powers and remedies under
the Loan Documents or at law or in equity.
 
Section 9      Remedies Cumulative. All of the rights and remedies of Lender
under this Note and the other Loan Documents are cumulative of each other and of
any and all other rights at law or in equity, and the exercise by Lender of any
one or more of such rights and remedies shall not preclude the simultaneous or
later exercise by Lender of any or all such other rights and remedies. No single
or partial exercise of any right or remedy shall exhaust it or preclude any
other or further exercise thereof, and every right and remedy may be exercised
at any time and from time to time. No failure by Lender to exercise, nor delay
in exercising, any right or remedy shall operate as a waiver of such right or
remedy or as a waiver of any Event of Default.
 
Section 10     Costs and Expenses of Enforcement. Borrower agrees to pay to
Lender on demand all costs and expenses incurred by Lender in seeking to collect
this Note or to enforce any of Lender’s rights and remedies under the Loan
Documents, including court costs and reasonable attorneys’ fees and expenses,
whether or not suit is filed hereon, or whether in connection with bankruptcy,
insolvency or appeal.
 
Section 11     Service of Process. Borrower hereby consents to process being
served in any suit, action, or proceeding instituted in connection with this
Note by the mailing of a copy thereof by certified mail, postage prepaid, return
receipt requested, to Borrower. Borrower irrevocably agrees that such service
shall be deemed to be service of process upon Borrower in any such suit, action,
or proceeding. Nothing in this Note shall affect the right of Lender to serve
process in any manner otherwise permitted by law and nothing in this Note will
limit the right of Lender otherwise to bring proceedings against Borrower in the
courts of any jurisdiction or jurisdictions, subject to any provision or
agreement for arbitration or dispute resolution set forth in the Loan Agreement.
 
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Section 12     Heirs, Successors and Assigns. The terms of this Note and of the
other Loan Documents shall bind and inure to the benefit of the heirs, devisees,
representatives, successors and assigns of the parties. The foregoing sentence
shall not be construed to permit Borrower to assign the Loan except as otherwise
permitted under the Loan Documents.
 
Section 13     General Provisions. Time is of the essence with respect to
Borrower’s obligations under this Note. If more than one person or entity
executes this Note as Borrower, all of said parties shall be jointly and
severally liable for payment of the indebtedness evidenced hereby. Borrower and
each party executing this Note as Borrower hereby severally (a) waive demand,
presentment for payment, notice of dishonor and of nonpayment, protest, notice
of protest, notice of intent to accelerate, notice of acceleration and all other
notices (except any notices which are specifically required by this Note or any
other Loan Document), filing of suit and diligence in collecting this Note or
enforcing any of the security herefor; (b) agree to any substitution,
subordination, exchange or release of any such security or the release of any
party primarily or secondarily liable hereon; (c) agree that Lender shall not be
required first to institute suit or exhaust its remedies hereon against Borrower
or others liable or to become liable hereon or to perfect or enforce its rights
against them or any security herefor; (d) consent to any extensions or
postponements of time of payment of this Note for any period or periods of time
and to any partial payments, before or after maturity, and to any other
indulgences with respect hereto, without notice thereof to any of them; and
(e) submit (and waive all rights to object) to non-exclusive personal
jurisdiction of any state or federal court sitting in the state and county in
which any of the Property (as defined in the Loan Agreement) is located for the
enforcement of any and all obligations under this Note and the other Loan
Documents; (f) waive the benefit of all homestead and similar exemptions as to
this Note; (g) agree that their liability under this Note shall not be affected
or impaired by any determination that any title, security interest or lien taken
by Lender to secure this Note is invalid or unperfected; and (h) hereby
subordinate to the Loan and the Loan Documents any and all rights against
Borrower and any security for the payment of this Note, whether by subrogation,
agreement or otherwise, until this Note is paid in full. A determination that
any provision of this Note is unenforceable or invalid shall not affect the
enforceability or validity of any other provision and the determination that the
application of any provision of this Note to any person or circumstance is
illegal or unenforceable shall not affect the enforceability or validity of such
provision as it may apply to other persons or circumstances. This Note may not
be amended except in a writing specifically intended for such purpose and
executed by the party against whom enforcement of the amendment is sought.
Captions and headings in this Note are for convenience only and shall be
disregarded in construing it. This Note and its validity, enforcement and
interpretation shall be governed by the laws of the state of Tennessee (without
regard to any principles of conflicts of laws) and applicable United States
federal law. Whenever a time of day is referred to herein, unless otherwise
specified such time shall be the local time of the place where payment of this
Note is to be made. The term “Business Day” shall mean a day on which Lender is
open for the conduct of substantially all of its banking business at its office
in the city in which this Note is payable (excluding Saturdays and Sundays).
Capitalized terms used herein without definition shall have the meanings
ascribed to such terms in the Loan Agreement. The words “include” and
“including” shall be interpreted as if followed by the words “without
limitation.”
 
Section 14     Notices. Any notice, request, or demand to or upon Borrower or
Lender shall be deemed to have been properly given or made when delivered in
accordance with the terms of the Loan Agreement regarding notices.
 
Section 15     No Usury. It is expressly stipulated and agreed to be the intent
of Borrower and Lender at all times to comply with applicable state law or
applicable United States federal law (to the extent that it permits Lender to
contract for, charge, take, reserve, or receive a greater amount of interest
than under state law) and that this Section shall control every other covenant
and agreement in this Note and the other Loan Documents. If applicable state or
Federal law should at any time be judicially interpreted so as to render
usurious any amount called for under this Note or under any of the other Loan
Documents, or contracted for, charged, taken, reserved, or received with respect
to the Loan, or if Lender’s exercise of the option to accelerate the Maturity
Date, or if any prepayment by Borrower results in Borrower having paid any
interest in excess of that permitted by applicable law, then it is Lender’s
express intent that all excess amounts theretofore collected by Lender shall be
credited on the principal balance of this Note and all other indebtedness
secured by the Assignment, and the provisions of this Note and the other Loan
Documents shall immediately be deemed reformed and the amounts thereafter
collectible hereunder and thereunder reduced, without the necessity of the
execution of any new documents, so as to comply with the applicable law, but so
as to permit the recovery of the fullest amount otherwise called for hereunder
or thereunder. All sums paid or agreed to be paid to Lender for the use or
forbearance of the Loan shall, to the extent permitted by applicable law, be
amortized, prorated, allocated, and spread throughout the full stated term of
the Loan.
 
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IN WITNESS WHEREOF, Borrower has duly executed this Note as of the date first
above written.
 
 

Borrower:
 
American Retirement Corporation,  a Tennessee corporation
    By:  Title: 

 
 
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