REVOLVING CREDIT NOTE
Date: April 30, 1997 Maturity Date: April 30, 1998
Amount: $5,000,000
Lender: Integrated Health Services, Inc.
00000 Xxx Xxx Xxxxxxxxx
Xxxxxx Xxxxx, XX 00000
Borrower: Integrated Living Communities, Inc.
00000 Xxx 00 Xxxx, Xxxxx 00
Xxxxxx Xxxxxxx, XX 00000-7022
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FOR VALUE RECEIVED, the undersigned Borrower hereby unconditionally promises to
pay in immediately available funds to the order of Lender, its successors, and
assigns, at its offices indicated at the beginning of this Note, or at such
other place as may be designated by Xxxxxx from time to time, the principal
amount of $5,000,000.00 or so much thereof as may be outstanding from time to
time (the "Principal"), together with interest computed daily on the outstanding
Principal balance hereunder, at the annual interest rate, and in accordance with
the payment schedule indicated below.
1. Rate. This Note shall bear interest from its date until maturity on the
Principal outstanding from to time to time hereunder at a rate per annum equal
to twelve (12%) percent (the "Interest Rate").
Notwithstanding any provision of this Note, Xxxxxx does not intend to charge and
Borrower shall not be required to pay, any amount of interest or other charges
in excess of the maximum permitted by the applicable law of the State of
Florida. Any payment in excess of such maximum shall be refunded to Borrower or
credited against principal, at the Lender's option.
2. Accrual Method. Unless otherwise indicated, the Interest Rate set forth above
will be calculated by the actual/360-day method (a daily amount of interest is
computed for a hypothetical year of 360 days; that amount is multiplied by the
actual number of days for which any Principal is outstanding hereunder).
3. Payment Schedule. All Principal and other amounts outstanding under this Note
shall be due and payable on the first anniversary of the date of this Note. Six
(6) months following the date hereof, the maximum aggregate amount of Principal
permitted to be outstanding at any time shall be reduced to $4,500,000; and nine
months following the date hereof, the maximum
aggregate amount of Principal permitted to be outstanding at any time shall be
further reduced to $4,000,000. Borrower shall make such payments of Principal as
shall be necessary to comply with the foregoing limits on the amount of
Principal outstanding. Interest due hereunder shall be payable on each date that
a payment of Principal is made hereunder, and monthly in arrears on the first
business day of each calendar month during the term of this Note. Any payment to
the Lender hereunder shall be applied first to the payment of all accrued
interest and the balance shall be applied to Principal. Borrower may prepay all
or any part of the remaining principal balance of this Note, including all
interest accrued thereon through the date of such prepayment, at any time prior
to the maturity date without penalty or premium. The Lender is authorized but
not required to record the date and amount of each loan made, the date and
amount of any payment, and the balance hereof on the Grid attached hereto and
made a part hereof, and any such recordation shall, in the absence of manifest
error, constitute prima facie evidence of the accuracy of the information so
recorded; provided however, that the Lender' failure to so record shall not
limit the obligations of the Borrower hereunder to pay the amount of all loans
hereunder.
4. Revolving Feature. Until the day preceding the first anniversary of the date
hereof, Xxxxxxxx may borrow and reborrow hereunder at any time, up to a maximum
aggregate amount outstanding not to exceed at any time the amounts as set forth
in Paragraph 3, above, provided, that all of the conditions set forth below
shall have been satisfied as of the date of borrowing.
(i) Borrower shall have given Lender at least five (5) days prior written
notice (the "Notice") of Xxxxxxxx's intent to borrow under this Note;
(ii) the Notice shall include the stated purpose for the proceeds borrowed
under this Note and shall include a certification that no Event of Default shall
have occurred and be continuing;
(iii) Borrower shall only be permitted to use the proceeds under this Note
(a) to assist Borrower in its working capital needs, or (b) to provide bridge
financing for acquisitions by Borrower approved by Lender, or (c) to make
payments due under the Unsecured Credit Note issued by Borrower to Lender, dated
as of November 20, 1996, in the original principal amount of $3,445,024.00, as
amended as of the date hereof (the "Initial Note");
(iv) no Event of Default shall have occurred and be continuing; and
(v) the minimum amount that may be borrowed at any one time under this Note
shall be $250,000 (the "Minimum Draw"). The Minimum Draw may be increased in
$50,000 increments only.
Lender shall incur no liability for its refusal to advance funds based upon
its determination that any conditions of such further advances have not been
met.
5. Waivers, Consents and Covenants. Borrower, any endorser or guarantor hereof,
or any other party hereto (individually an "Obligor" and collectively
"Olbigors") and each of them jointly and severally: (a) waive presentment,
demand, protest, notice of demand, notice of intent to accelerate, notice of
acceleration of maturity, notice of protest, notice of nonpayment, notice of
dishonor, and any other notice required to be given under the law to any Obligor
in connection with the delivery, acceptance, performance, default or enforcement
of this Note, any endorsement or guaranty of this Note, or any other documents
executed in connection with this Note or any other note or other loan documents
now or hereafter executed in connection with any obligation to Borrower to
Lender (the "Loan Documents"); (b) consent to all delays, extensions, renewals
or other modifications of this Note or the Loan Documents, or waivers of any
term hereof or of the Loan Documents, or release or discharge by Lender of any
Obligors, or release, substitution or exchange of any security for the payment
hereof, or the failure to act on the part of the Lender, or any indulgence shown
by the Lender (without notice to or further assent from any of the Obligors),
and agree that no such action, failure to act or failure to exercise any right
or remedy by the Lender shall in any way affect or impair the obligations of any
Obligors or be construed as a waiver by the Lender, or otherwise affect, any of
Lender's rights under this Note, under any endorsement, or guaranty of this Note
or under any of the Loan Documents; and (c) agree to pay, on demand, all costs
and expenses of collection or defense of this Note or of any endorsement or
guaranty hereof and/or the enforcement or defense of Lender's rights with
respect to, or the administration, supervision, preservation, or protection of,
or realization upon, any property securing payment hereof, including with
limitation, reasonable attorney's and paralegal's fees and expenses, including
fees related to any suit, mediation or arbitration proceeding, out of court
payment agreement, trial, appeal, bankruptcy proceedings or other proceeding, in
such amount as may be determined reasonable by any arbitrator or court,
whichever is applicable.
6. Idemnifaction. Obligors agree to promptly pay, indemnify and hold Lender
harmless from all State and Federal taxes of any kind and other liabilities with
respect to or resulting from the execution and/or delivery of this Note or any
advances made pursuant to this Note. If this Note has a revolving feature and is
secured by a mortgage, Obligors expressly consent to the deduction of any
applicable taxes from each taxable advance extended by Lender.
7. Delinquency Charge. To the extent permitted by law, a delinquency charge may
be imposed in an amount not to exceed four (4%) percent of any payment that is
more than fifteen days late.
8. Events of Default. Upon the occurrence of any of the following, Xxxxxx may
declare an "Event of Default" to exist: (a) the failure to pay or perform any
obligation, liability or indebtedness of any Obligor to Lender, or to any
affiliate or subsidiary of Integrated Health Services, Inc., whether under this
Note or any Loan Documents or the Initial Note, as and when due (whether upon
demand, at maturity or by acceleration); (b) the failure to pay or perform any
other obligation, liability or indebtedness of any Obligor to any other party
when due (whether upon demand, at maturity or by acceleration); (c) the
commencement of a proceeding against any Obligor for dissolution or liquidation,
the voluntarily or involuntary termination or dissolution of
any Obligor or the merger or consolidation of any Obligor with or into another
entity; (d) the insolvency of, the business failure of, the appointment of a
custodian, trustee, or receiver for or for any of the property of, the
assignment for the benefit of creditors by, or the filing of a petition under
bankruptcy, insolvency or debtor's relief law or the filing of a petition for
any adjustment or indebtedness, composition or extension by or against any
Obligor; (e) the determination by the Lender that any representation or warranty
made to the Lender by an Obligor in any Loan Documents or otherwise is or was,
when it was made, untrue or materially misleading; (f) the failure of any
Obligor timely deliver such financial statements, including tax returns, other
statements of condition or other information, as Lender shall request from time
to time; (g) the entry of a judgment against any Obligor or which Lender deems
to be a material nature, in Xxxxxx's sole discretion; (h) the seizure or
forfeiture of, or the issuance of any writ of possession, garnishment or
attachment, or any turnover order for any property of any Obligor; (i) the
determination by Lender that a material adverse change has occurred in the
financial condition of any Obligor; (j) the failure of Borrower's business to
comply with any law or regulation controlling its operation; or (k) a Change in
Control of the Borrower shall occur. For purposes hereof, a "Change in Control"
of the Borrower shall mean the occurrence of any of the following events; (i)
any party or two or more parties acting in concert shall have acquired
beneficial ownership, directly or indirectly, of, or shall have acquired by
contract or otherwise, or shall have entered into a contract or arrangement
that, upon consummation, will result in its or their acquisition of, control
over, Voting Stock of Borrower (or other securities convertible into such Voting
Stock) representing 25% or more of the combined voting power of all Voting Stock
of Borrower, (ii) Lender shall fail to own and have the right to vote at least
25% of the outstanding Voting Stock of Borrower determined on a fully diluted
basis after giving effect to the conversion and exercise of all outstanding
warrants, options and other securities of Borrower that are convertible into or
exercisable for Voting Stock of Borrower (whether or not such securities are
then currently convertible or exercisable), (iii) during any period of up to 24
consecutive months, commencing after the Closing Date, individuals who at the
beginning of uch 24-month period were directors of Borrower (together with any
new director whose election by Xxxxxxxx's Board of Directors or whose nomination
for election by Xxxxxxxx's shareholders was approved by a vote of at least
two-thirds of the directors then still in office who either were directors at
the beginning of such period or whose election or nomination for election was
previously so approved) cease for any reason to constitute a majority of the
directors of Borrower then in office or (iv) Borrower shall fail to own and have
the right to vote 100% of the outstanding Voting Stock of the Borrower,
determined on a fully diluted basis after giving effect to the conversion and
exercise of all outstanding warrants, options and other securities of the
Borrower that are convertible into or exercisable for Voting Stock of the
Borrower. As used herein, "beneficial ownership" shall have the meaning provided
in Rule 13d-3 of the Securities and Exchange Commission under the Securities
Exchange Act of 1934.
9. Remedies Upon Default. Whenever there is Event of Default under this Note (a)
the entire balance outstanding hereunder and all other obligations of any
Obligor to Lender (however acquired or evidenced) shall, at the option of the
Lender immediately due and payable and any obligation of Lender to permit
further borrowing under this Note shall immediately cease and
terminate, and/or (b) to the extent permitted by law, the Interest Rate on the
unpaid Principal shall be increased at Xxxxxx's discretion up to the Interest
Rate plus five (5%) percent per annum, or the maximum rate allowed by law,
whichever is lower (the "Default Rate"). The provisions herein for a Default
Rate shall not be deemed to extend the time of any payment hereunder or to
constitute a "grace period" giving Obligors a right to cure any default. At
Lender's option, any accrued and unpaid interest, fees or charges may, for
purposes of computing and accruing interest on a daily basis after the due date
of the Note or any installment thereof, be deemed to be a part of the Principal
balance, and Interest shall accrue on a daily compounded basis after such date
at the Default Rate provided in this Note until the entire outstanding balance
of Principal and interest is paid in full, and all such interest thereon shall
thereafter be due on demand. Upon an Event of Default under this Note, Lender is
hereby authorized at any time, at its option and without notice of demand, to
set off and charge against any deposit accounts of any Obligor (as well as any
money, instruments, securities, documents, chattel paper, credits, claims,
demands, income and any other property, rights and interests of any Obligor),
which at any time shall come into the possession or custody or under the control
of Lender or any of its agents, affiliates or correspondents, any and all
obligations due hereunder. Additionally, Lender shall have all rights and
remedies available under each of the Loan Documents, as well as all rights and
remedies available law or in equity. Any judgment rendered on this Note shall
bear interest at the highest rate of interest permitted pursuant to Chapter 687
Florida Statutes.
10. Non-Waiver. The failure at any time of the Lender to exercise any of its
options or any other rights hereunder shall not constitute a waiver thereof, nor
shall it be a bar to the exercise of its options or rights at a later date. All
rights and remedies of the Lender shall be cumulative and may be pursued singly,
successively or together at the option of the Lender. The acceptance by Lender
of any partial payment shall not constitute a waiver of any default or of any of
Lender's rights under this Note. No waiver of any of its rights hereunder, and
no modification or amendment of this Note shall be deemed to be made by Lender
unless the same shall be in writing, duly signed on behalf of Lender; each such
waiver shall apply only with respect to the specific instance involved, and
shall in no way impair the rights of the Lender or the obligations of Obligors
to Lender in any respect at any other time.
11. Applicable Law, Venue and Jurisdiction. This Note and the rights and
obligations of Borrower and Lender shall be governed by and interpreted n
accordance with the law of the State of Florida.
12. Partial Invalidity. The enforceability or invalidity of any provision of
this Note shall not affect the enforceability or validity of any other provision
herein and the invalidity or unenforceability of any provision of this Note or
of the Loan Documents to any person or circumstances shall not affect the
enforceability o validity of such provision as it may apply to other persons or
circumstances.
13. Binding Effect. This Note shall be binding upon and inure to the benefit of
Xxxxxxxx, Xxxxxxxx and Xxxxxx and the respective successors, assigns, heirs and
personal representatives, provided, however, that no obligations of Borrower or
Obligors hereunder can be assigned without the prior written consent of Xxxxxx.
14. Controlling Document. To the extent that this Note conflicts with or is in
any way incomparable wit any other document related specifically to the loans
evidenced by this Note, this Note shall control over any other such document,
and if the Note does not address an issue, then each other such document shall
control to the extent that it deals most specifically with an issue.
15. Notwithstanding any provisions to the contrary contained herein, this Note
and all renewals, extensions and modifications hereof, are and shall remain
subject to the terms of that certain Subordination Agreement, dated as of April
9, 1997 (the "Subordination Agreement") among NationsBank, N.A. (South), Lender
and Borrower, as amended. Each transferee of this Note, by acceptance of same,
absolutely agrees to be bound by all of the provisions of the Subordination
Agreement.
Borrower represents and warrants to the Lender that the proceeds of these loans
are to be used for business purposes only and are therefore commercial loans.
Xxxxxxxx acknowledges having read and understood, and agrees to be bound by, all
terms and conditions of this Note and hereby executes this Note as of the date
here above-written.
This written promissory note may not be contradicted by evidence of prior,
contemporaneous, or subsequent oral agreements of the parties. There are no
unwritten oral agreements between the parties with respect to the subject matter
of this Note.
IN WITNESS WHEREOF, the undersigned has executed this Note on the date
first above written.
INTEGRATED LIVING
COMMUNITIES, INC.
By: _____________________________
Title: ____________________________
