1
EXHIBIT 1
RENEWAL AND MODIFICATION PROMISSORY NOTE
(Nonrevolving)
$17,050,000.00 Nashville, Tennessee
As of March 31, 1998
FOR VALUE RECEIVED, the undersigned, Diversicare Assisted Living
Services NC, LLC, a Tennessee limited liability company (the "Borrower")
promises to pay to the order of AmSouth Bank (the "Bank"), the sum of Seventeen
Million Fifty Thousand and 00/100 Dollars ($17,050,000.00), to be advanced
hereunder in accordance with the terms of a Loan and Negative Pledge Agreement
dated as of October 1, 1997, as amended from time to time (the "Loan
Agreement"), between Bank, First American National Bank, the undersigned, and
the Guarantors (as defined in the Loan Agreement). Capitalized terms not
otherwise defined herein shall have the meanings ascribed to such terms in the
Loan Agreement. Interest shall accrue on the principal balance outstanding from
time to time at a floating rate, as set forth in Section 2.2 of the Loan
Agreement. In no event shall the interest rate charged herein exceed the Maximum
Rate.
Interest shall be computed for the actual number of days elapsed on the
basis of a year consisting of 360 days. Interest shall be due and payable on the
principal balance outstanding hereunder from time to time in accordance with
Section 2.1 of the Loan Agreement. The outstanding principal balance, together
with all accrued and unpaid interest, shall be due and payable in full on April
1, 1999 (the "Maturity Date").
Both principal and interest due on this Note are payable in Nashville,
Tennessee, at par in lawful money of the United States of America, in the Main
Office of Bank, or at such other place as Bank may designate in writing from
time to time. Interest shall continue to accrue when payments are submitted by
instruments representing funds not immediately available and until such funds
are, in fact, collected.
This Note is a further renewal and modification of a Promissory Note
dated as of October 1, 1997, in the principal amount of $17,050,000, executed by
the Borrower in favor of Bank, and, as such, is secured by the Guaranty
Agreements, the Collateral Assignment, and the covenants and conditions in the
Loan Agreement, as the same may be amended from time to time.
Time is of the essence of this Note. It is hereby expressly agreed that
in the event of an Event of Default (which is not cured within the notice and
cure period set forth in the Loan Agreement); then, in such case, the entire
unpaid principal sum evidenced by this Note, together with all accrued interest,
shall, at the option of any holder, without further notice, become due and
payable forthwith, regardless of the stipulated Maturity Date. Upon the
occurrence of any Default, at the option of holder and without further notice to
obligor, all accrued and unpaid interest, if any, shall be added to the
outstanding principal balance hereof, and the entire outstanding principal
balance, as so adjusted, shall bear interest thereafter until paid at an annual
rate equal to Maximum Rate, regardless of whether or not there has been an
acceleration of the payment of principal as set forth herein. All such interest
shall be paid at the time of and as a condition precedent to the curing of any
such Default. Failure of the holder to exercise this right of accelerating the
maturity of the debt, or indulgence granted from time to time, shall in no event
be considered as a waiver of said right of acceleration or stop the holder from
exercising said right.
PAGE 1 OF A 3 PAGE NOTE
2
To the extent permitted by applicable law, in addition to all
other rights and remedies available to Bank, obligor shall pay to Bank a late
charge equal to four percent (4%) of any payment hereunder that is more than
fifteen (15) days past due, in order to cover the additional expenses incident
to the handling and processing of delinquent payments.
All persons or corporations now or at any time liable, whether
primarily or secondarily, for the payment of the indebtedness hereby evidenced,
for themselves, their heirs, legal representatives and assigns, waive demand,
presentment for payment, notice of dishonor, protest, notice of protest, and
diligence in collection and all other notices or demands whatsoever with respect
to this Note or the enforcement hereof, and consent that the time of said
payments or any part thereof may be extended by the holder hereof and assent to
any substitution, exchange, or release of collateral permitted by the holder
hereof, all without in any wise modifying, altering, releasing, affecting or
limiting their respective liability. This Note may not be changed orally, but
only by an agreement in writing signed by the party against whom enforcement of
any waiver, change, modification or discharge is sought.
The term obligor, as used in this Note, shall mean all
parties, and each of them, directly or indirectly obligated for the indebtedness
that this Note evidences, whether as principal, maker, endorser, surety,
guarantor or otherwise.
It is expressly understood and agreed by all parties hereto,
including obligors, that if it is necessary to enforce payment of this Note
through an attorney or by suit, undersigned or any obligors shall pay reasonable
attorney's fees, court costs and all costs of collection.
All parties to the Loan Documents intend to comply with
applicable usury law. All existing and future agreements evidencing or securing
the Credit Facility are hereby limited and controlled by this provision. In no
event (including but not limited to prepayment, default, demand for payment, or
acceleration of maturity) shall the interest taken, reserved, contracted for,
charged or received in connection with the Credit Facility under the Loan
Documents or otherwise, exceed the maximum nonusurious amount permitted by
applicable law. If, from any possible construction of any document, interest
would otherwise be payable in excess of the Maximum Amount, then ipso facto,
such document shall be reformed and the interest payable reduced to the Maximum
Amount, without necessity of execution of any amendment or new document. If Bank
ever receives interest in an amount which apart from this provision would exceed
the Maximum Amount, the excess shall, without penalty, be applied to the unpaid
principal balance of the Loan Obligations in inverse order of maturity of
installments and not to the payment of interest, or be refunded to the Borrower,
at the election of the Bank in its sole discretion or as required by applicable
law. The Bank does not intend to charge or receive unearned interest on
acceleration. All interest paid or agreed to be paid to the Bank in connection
with the Credit Facility, or any portion thereof, shall be spread throughout the
full term (including any renewal or extension) of the Loan so that the amount of
interest paid does not exceed the Maximum Amount.
This obligation is made and intended as a Tennessee contract
and is to be so construed.
(Remainder of page left intentionally blank)
PAGE 2 OF A 3 PAGE NOTE
3
IN WITNESS WHEREOF, this Note has been duly executed by the
undersigned the day and year first above written.
DIVERSICARE ASSISTED LIVING SERVICES
NC, LLC, a Tennessee limited liability company
BY: /s/Xxxx Xxxxxxxx Xxxxxxx
-----------------------------------------
TITLE: Executive Vice President
---------------------------------------
RECEIVED AND ACKNOWLEDGED:
AMSOUTH BANK
BY: /s/Xxxxx Xxxx
-----------------------------
TITLE: Vice President
-------------------------
PAGE 3 OF A 3 PAGE NOTE
