REVOLVING CREDIT NOTE
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$4,000,000.00 NOVEMBER 28, 2000
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FOR VALUE RECEIVED, the undersigned, NEW YORK HEALTH CARE, INC., a New York
corporation, and NYHC NEWCO PAXXON, INC., a New York corporation (together,
"Borrower"), promises to pay, in lawful money of the United States, to the order
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of XXXXXX HEALTHCARE FINANCE, INC., a Delaware corporation (together with its
successors and assigns, "Lender"), the principal sum of FOUR MILLION AND NO/100
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DOLLARS ($4,000,000.00), or so much of such principal sum as shall be advanced
or readvanced and shall remain unpaid under the Loan established pursuant to
that certain Loan and Security Agreement dated as of even date with this Note by
and between the undersigned and Lender (as amended, modified, restated or
replaced from time to time, the "Loan Agreement"), plus interest on the unpaid
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balance thereof, computed on a 360-day basis, at the rate per annum that is set
forth in the Loan Agreement.
1. All capitalized terms used and not otherwise specifically defined in
this Revolving Credit Note (as amended, modified, restated or replaced from time
to time, the "Note") shall have the meanings given to them in the Loan
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Agreement.
2. This Note shall evidence the undersigned's obligation to repay all
sums advanced by Xxxxxx from time to time under the Loan Agreement and as part
of the Loan. The actual amount due and owing from time to time under this Note
shall be evidenced by Xxxxxx's records of receipts and disbursements with
respect to the Loan, which shall be conclusive evidence of such amount, absent
manifest error.
3. Interest due pursuant to this Note shall be payable monthly, in
arrears, on the first Business Day of each month after the date of this Note
(for the previous month). For purposes of this Note, a "Business Day" shall
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mean any day on which financial institutions are open for business in the State
of Maryland, excluding Saturdays and Sundays.
4. This Note shall become due and payable upon the earlier to occur of
(a) the expiration of the Term, or (b) the occurrence of any Event of Default
under the Loan Agreement, or any other event under any other Loan Documents that
would result in this Note becoming due and payable. At such time, the entire
principal balance of this Note and all other fees, costs and expenses, if any,
shall be due and payable in full. Xxxxxx shall then have the option at any time
and from time to time to exercise all of the rights and remedies set forth in
this Note and in the other Loan Documents, as well as all rights and remedies
otherwise available to Lender at law or in equity, to collect the unpaid
indebtedness under this Note and the other Loan Documents. This Note is secured
by the Collateral, as defined in and described in the Loan Agreement.
5. Whenever any principal and/or interest and/or fee under this Note
shall not be paid when due, whether at the stated maturity or by acceleration,
interest on such unpaid amounts shall thereafter be payable at a rate per annum
equal to five (5) percentage points above the stated rate of interest on this
Note until such amounts shall be paid.
6. The undersigned and Lender intend to conform strictly to the
applicable usury laws in effect from time to time during the term of the Loan.
Accordingly, if any transaction contemplated by the Loan Agreement or this Note
would be usurious under such laws, then notwithstanding any other provision
hereof: (a) the aggregate of all interest that is contracted for, charged, or
received under this Note, the Loan Agreement or under any other Loan Document
shall not exceed the maximum amount of interest allowed by applicable law (the
"Highest Lawful Rate"), and any excess shall be promptly credited to the
undersigned by Lender (or, to the extent that such consideration shall have been
paid, such excess shall be promptly refunded to the undersigned by Xxxxxx); (b)
neither the undersigned nor any other Person now or hereafter liable hereunder
shall be obligated to pay the amount of such interest to the extent that it is
in excess of the Highest Lawful Rate; and (c) the effective rate of interest
shall be reduced to the Highest Lawful Rate. All sums paid, or agreed to be
paid, to Lender for the use, forbearance, and detention of the debt of Borrower
to Lender shall, to the extent permitted by applicable law, be allocated
throughout the full term of this Note until payment is made in full so that the
actual rate of interest does not exceed the Highest Lawful Rate in effect at any
particular time during the full term thereof. If at any time the rate of
interest under this Note exceeds the Highest Lawful Rate, the rate of interest
to accrue pursuant to this Note and the Loan Agreement shall be limited,
notwithstanding anything to the contrary in this Note and the Loan Agreement, to
the Highest Lawful Rate, but any subsequent reductions in the Base Rate shall
not reduce the interest to accrue pursuant to this Note and the Loan Agreement
below the Highest Lawful Rate until the total amount of interest accrued equals
the amount of interest that would have accrued if a varying rate per annum equal
to the interest rate under the Note and the Loan Agreement had at all times been
in effect. If the total amount of interest paid or accrued pursuant to this
Note and the Loan Agreement under the foregoing provisions is less than the
total amount of interest that would have accrued if a varying rate per annum
equal to the interest rate under this Note and the Loan Agreement had been in
effect, then the undersigned agrees to pay to Lender an amount equal to the
difference between (x) the lesser of (A) the amount of interest that would have
accrued if the Highest Lawful Rate had at all times been in effect, or (B) the
amount of interest that would have accrued if a varying rate per annum equal to
the interest rate under this Note and the Agreement had at all times been in
effect, and (y) the amount of interest accrued in accordance with the other
provisions of this Note and the Loan Agreement.
7. This Note is the "Note" referred to in the Loan Agreement, and is
issued pursuant to the Loan Agreement. Reference is made to the Loan Agreement
for a statement of the additional rights and obligations of the undersigned and
Lender. In the event of any conflict between the terms of this Note and the
terms of the Loan Agreement, the terms of the Loan Agreement shall prevail. All
of the terms, covenants, provisions, conditions, stipulations, promises and
agreements contained in the Loan Documents to be kept, observed and/or performed
by the undersigned are made a part of this Note and are incorporated into this
Note by this reference to the same extent and with the same force and effect as
if they were fully set forth in this Note; the undersigned promises and agrees
to keep, observe and perform them or cause them to be kept, observed and
performed, strictly in accordance with the terms and provisions thereof.
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8. Each party liable on this Note in any capacity, whether as maker,
endorser, surety, guarantor or otherwise, (a) waives presentment for payment,
demand, protest and notice of presentment, notice of protest, notice of
non-payment and notice of dishonor of this debt and each and every other notice
of any kind respecting this Note and all lack of diligence or delays in
collection or enforcement hereof; (b) agrees that Lender at any time or times,
without notice to the undersigned or its consent, may grant extensions of time,
without limit as to the number of the aggregate period of such extensions, for
the payment of any principal, interest or other sums due hereunder; (c) to the
extent permitted by law, waives all exemptions under the laws of the State of
Maryland and/or any state or territory of the United States; (d) to the extent
permitted by law, waives the benefit of any law or rule of law intended for its
advantage or protection as an obligor under this Note or providing for its
release or discharge from liability on this Note, in whole or in part, on
account of any facts or circumstances other than full and complete payment of
all amounts due under this Note; and (e) agrees to pay, in addition to all other
sums of money due, all cost of collection and attorney's fees, whether suit be
brought or not, if this Note is not paid in full when due, whether at the stated
maturity or by acceleration.
9. No waiver by Lender of any one or more defaults by the undersigned
in the performance of any of its obligations under this Note shall operate or be
construed as a waiver of any future default or defaults, whether of a like or
different nature. No failure or delay on the part of Lender in exercising any
right, power or remedy under this Note (including, without limitation, the right
to declare this Note due and payable) shall operate as a waiver of such right,
power or remedy nor shall any single or partial exercise of any such right,
power or remedy preclude any other or further exercise of such right, power or
remedy or the exercise of any other right, power or remedy.
10. If any term, provision, covenant or condition of this Note or the
application of any term, provision, covenant or condition of this Note to any
party or circumstance shall be found by a court of competent jurisdiction to be,
to any extent, invalid or unenforceable, then the remainder of this Note and the
application of such term, provision, covenant, or condition to parties or
circumstances other than those as to which it is held invalid or unenforceable,
shall not be affected thereby, and each term, provision, covenant or condition
shall be valid and enforced to the fullest extent permitted by law. Upon
determination that any such term, provision, covenant or condition is invalid,
illegal or unenforceable, Lender may, but is not obligated to, advance funds to
Borrower under this Note until Borrower and Lender amend this Note so as to
effect the original intent of the parties as closely as possible in a valid and
enforceable manner.
11. No amendment, supplement or modification of this Note nor any
waiver of any provision of this Note shall be made except in writing executed by
both parties.
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12. This Note shall be binding upon the undersigned and its successors
and assigns. Notwithstanding the foregoing, the undersigned may not assign any
of its rights or delegate any of its obligations under this Note without the
prior written consent of Lender, which may be withheld in its sole discretion.
13. THIS NOTE, INCLUDING THE INTERPRETATION AND PERFORMANCE THEREOF,
SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
MARYLAND WITHOUT REGARD TO ANY OTHERWISE APPLICABLE CONFLICTS OF LAWS
PRINCIPLES. THE PARTIES EXPRESSLY CONSENT AND AGREE TO THE NON-EXCLUSIVE
JURISDICTION OF THE COURTS OF THE STATE OF MARYLAND AND THE UNITED STATES
DISTRICT COURT FOR THE DISTRICT OF MARYLAND AND TO THE LAYING OF VENUE IN THE
STATE OF MARYLAND, WAIVING ALL CLAIMS OR DEFENSES BASED ON LACK OF PERSONAL
JURISDICTION, IMPROPER VENUE, INCONVENIENT FORUM OR THE LIKE. BORROWER HEREBY
CONSENTS TO SERVICE OF PROCESS BY THE MAILING A COPY OF THE SUMMONS TO BORROWER,
BY CERTIFIED OR REGISTERED MAIL, POSTAGE PREPAID, TO XXXXXXXX'S ADDRESS SET
FORTH IN SECTION 9.4 OF THE LOAN AGREEMENT. BORROWER FURTHER WAIVES ANY CLAIM
FOR CONSEQUENTIAL DAMAGES IN RESPECT OF ANY ACTION TAKEN OR OMITTED TO BE TAKEN
BY LENDER IN GOOD FAITH.
14. IN ANY LITIGATION, TRIAL, ARBITRATION OR OTHER DISPUTE RESOLUTION
PROCEEDING RELATING TO THIS NOTE, ALL DIRECTORS, OFFICERS, EMPLOYEES AND AGENTS
OF BORROWER OR OF ITS AFFILIATES SHALL BE DEEMED TO BE EMPLOYEES OR MANAGING
AGENTS OF BORROWER FOR PURPOSES OF ALL APPLICABLE LAW OR COURT RULES REGARDING
THE PRODUCTION OF WITNESSES BY NOTICE FOR TESTIMONY (WHETHER IN A DEPOSITION, AT
TRIAL OR OTHERWISE). XXXXXXXX AGREES THAT XXXXXX'S COUNSEL IN ANY SUCH DISPUTE
RESOLUTION PROCEEDING MAY EXAMINE ANY OF THESE INDIVIDUALS AS IF UNDER
CROSS-EXAMINATION AND THAT ANY DISCOVERY DEPOSITION OF ANY OF THEM MAY BE USED
IN THAT PROCEEDING AS IF IT WERE AN EVIDENCE DEPOSITION. BORROWER IN ANY EVENT
SHALL USE ALL COMMERCIALLY REASONABLE EFFORTS TO PRODUCE IN ANY SUCH DISPUTE
RESOLUTION PROCEEDING, AT THE TIME AND IN THE MANNER REQUESTED BY XXXXXX, ALL
PERSONS, DOCUMENTS (WHETHER IN TANGIBLE, ELECTRONIC OR OTHER FORM) OR OTHER
THINGS UNDER ITS CONTROL AND RELATING TO THE DISPUTE IN ANY JURISDICTION THAT
RECOGNIZES THAT (OR ANY SIMILAR) DISTINCTION.
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15. THE UNDERSIGNED HEREBY (A) COVENANTS AND AGREES NOT TO ELECT A
TRIAL BY JURY OF ANY ISSUE TRIABLE OF RIGHT BY A JURY, AND (B) WAIVES ANY RIGHT
TO TRIAL BY JURY FULLY TO THE EXTENT THAT ANY SUCH RIGHT SHALL NOW OR HEREAFTER
EXIST. THIS WAIVER OF RIGHT TO TRIAL BY JURY IS GIVEN KNOWINGLY AND VOLUNTARILY
BY THE UNDERSIGNED, AND THIS WAIVER IS INTENDED TO ENCOMPASS INDIVIDUALLY EACH
INSTANCE AND EACH ISSUE AS TO WHICH THE RIGHT TO A JURY TRIAL WOULD OTHERWISE
ACCRUE. XXXXXX IS HEREBY AUTHORIZED AND REQUESTED TO SUBMIT THIS NOTE TO ANY
COURT HAVING JURISDICTION OVER THE SUBJECT MATTER AND THE PARTIES HERETO, SO AS
TO SERVE AS CONCLUSIVE EVIDENCE OF THE UNDERSIGNED'S WAIVER OF THE RIGHT TO JURY
TRIAL. FURTHER, THE UNDERSIGNED HEREBY CERTIFIES THAT NO REPRESENTATIVE OR
AGENT OF LENDER (INCLUDING XXXXXX'S COUNSEL) HAS REPRESENTED, EXPRESSLY OR
OTHERWISE, TO ANY BORROWER THAT LENDER WILL NOT SEEK TO ENFORCE THIS WAIVER OF
RIGHT TO JURY TRIAL PROVISION.
16. UPON THE OCCURRENCE AND DURING THE CONTINUANCE OF ANY EVENT OF
DEFAULT UNDER THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS, THE UNDERSIGNED
HEREBY AUTHORIZES ANY ATTORNEY ADMITTED TO PRACTICE BEFORE ANY COURT OF RECORD
IN THE UNITED STATES OR THE CLERK OF SUCH COURT TO APPEAR ON BEHALF OF THE
UNDERSIGNED IN ANY COURT IN ONE OR MORE PROCEEDINGS, OR BEFORE ANY CLERK THEREOF
OF PROTHONOTARY OR OTHER COURT OFFICIAL, AND TO CONFESS JUDGMENT AGAINST THE
UNDERSIGNED IN FAVOR OF LENDER IN THE FULL AMOUNT DUE ON THIS NOTE (INCLUDING
PRINCIPAL, ACCRUED INTEREST AND ANY AND ALL CHARGES, FEES AND COSTS) PLUS
ATTORNEYS' FEES EQUAL TO FIFTEEN PERCENT (15%) OF THE AMOUNT DUE, PLUS COURT
COSTS, ALL WITHOUT PRIOR NOTICE OR OPPORTUNITY OF BORROWER FOR PRIOR HEARING.
THE UNDERSIGNED AGREES AND CONSENTS THAT VENUE AND JURISDICTION SHALL BE PROPER
IN THE CIRCUIT COURT OF ANY COUNTY OF THE STATE OF MARYLAND OR OF BALTIMORE
CITY, MARYLAND, OR IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF
MARYLAND. THE UNDERSIGNED WAIVES THE BENEFIT OF ANY AND EVERY STATUTE,
ORDINANCE, OR RULE OF COURT THAT MAY BE LAWFULLY WAIVED CONFERRING UPON BORROWER
ANY RIGHT OR PRIVILEGE OF EXEMPTION, HOMESTEAD RIGHTS, STAY OF EXECUTION, OR
SUPPLEMENTARY PROCEEDINGS, OR OTHER RELIEF FROM THE ENFORCEMENT OR IMMEDIATE
ENFORCEMENT OF A JUDGMENT OR RELATED PROCEEDINGS ON A JUDGMENT. THE AUTHORITY
AND POWER TO APPEAR FOR AND ENTER JUDGMENT AGAINST THE UNDERSIGNED SHALL NOT BE
EXHAUSTED BY ONE OR MORE EXERCISES THEREOF, OR BY ANY IMPERFECT EXERCISE
THEREOF, AND SHALL NOT BE EXTINGUISHED BY ANY JUDGMENT ENTERED PURSUANT THERETO;
SUCH AUTHORITY AND POWER MAY BE EXERCISED ON ONE OR MORE OCCASIONS FROM TIME TO
TIME, IN THE SAME OR DIFFERENT JURISDICTIONS, AS OFTEN AS LENDER SHALL DEEM
NECESSARY, CONVENIENT, OR PROPER.
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[SIGNATURES FOLLOW]
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IN WITNESS WHEREOF, the undersigned has executed this Note as of the date
first above written.
BORROWER:
NEW YORK HEALTH CARE, INC.,
a New York corporation
By: /s/
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Name:
Title:
NYHC NEWCO PAXXON, INC.,
a New York corporation
By: /s/
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Name:
Title:
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