LOAN AGREEMENT
Exhibit 10.20
THIS LOAN AGREEMENT, made and entered into this 8th day of June, 2012, by and between MT. V PROPERTY HOLDINGS, LLC (the “Borrower”) and METRO CITY BANK (“Lender”).
WHEREAS, in order to loan funds to Borrower, Lender enters into this Loan Agreement with Borrower for the purposes herein contained; and
ARTICLE I
ARTICLE II
(a) The Note;
(b) Mortgage and Security Agreement;
(c) UCC-1 Financing Statements;
(d) Evidence satisfactory to Lender of ownership of the Collateral by Borrower free and clear of encumbrances of any kind;
(e) Guaranties from Mountain View Nursing, LLC and AdCare Health Systems, Inc. (collectively, the “Guarantor” or “Guarantors”);
(f) Such other documents as reasonably may be required by the Lender or Lender’s counsel.
The Loan documents as provided above (collectively, the “Loan Documents”), when prepared, shall set forth the matters contained in the Loan Agreement and contain such other provisions as are deemed necessary or desirable by Lender. The form and substance of all such documents must be satisfactory to Lender prior to disbursement by Lender of any of the proceeds of the Loan.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF BORROWER
The Borrower represents and warrants to, and agrees with the Lender as follows:
(a) The Borrower and/or Guarantor have authorized the execution and delivery of the Note and all other documents contemplated by this Loan Agreement, and such execution and delivery will not violate any law, or any other agreement to which Borrower and/or Guarantor are a party.
(b) This Loan Agreement constitutes, and upon execution and delivery thereof, the Note, the Mortgage and Security Agreement and the ancillary documents will constitute, legal, valid and binding obligations of the Borrower and/or Guarantor enforceable against the Borrower and/or Guarantor.
Except as disclosed in the aforesaid reports and financial statements, Borrower:
(a) Has not incurred any debts, liabilities or other obligations nor committed to incur any debts, liabilities or obligations;
(b) Has no liabilities, direct or contingent;
(c) Has made no investments in, advances to, or guaranties or obligations of any other company, person, firm, corporation, or other entity;
(d) Is not subject to any judgment, nor are there any liens, encumbrances or security interests outstanding against Borrower or any of its properties.
ARTICLE IV
Until all the obligations of Borrower under this Agreement have been performed and paid in full, Borrower covenants and agrees as follows:
(a) Liens or security interests required or expressly contemplated or permitted by this Agreement;
(b) Liens for taxes, assessments and other governmental charges not yet due and liens of carriers, warehousemen, mechanics and materialmen incurred in the ordinary course of business for sums not yet due; and
(c) Tax liens which are being contested in good faith.
ARTICLE V
The occurrence of any one or more of the following shall constitute an “Event of Default”:
(a) Nonpayment, when due, of any principal, accrued interest, premium, fee or other charge due under the Note.
(b) Default by Borrower in the due observance or performance of any term, covenant, condition or agreement on its part to be performed under this Loan Agreement, the Note, or under any other document contemplated by this Loan Agreement.
(c) If Borrower shall:
(1) Make a general assignment for the benefit of its creditors;
(2) File a voluntary petition in bankruptcy;
(3) Be adjudicated as bankrupt or insolvent;
(4) File any petition or answer seeking, consenting to, or acquiescing in, reorganization, arrangement, composition, liquidation, dissolution or similar relief, under any present or future statute, law or regulation;
(5) File an answer admitting or failing to deny the material allegations of the petition against it for any such relief;
(6) Admit in writing its inability to pay its debts as they mature;
(7) Discontinue business; or
(8) Be unable to pay debts as they become due.
(d) Borrower fails to have vacated or set aside within thirty (30) days of its entry any court order appointing a receiver or trustee for all or a substantial portion of the Borrower’s property.
(e) Any warranty, representation or statements made or furnished to Lender by Borrower in connection with the Loan or in connection with this Agreement (including any warranty, representation or statement in the application of Borrower for the Loan or in any accompanying financial statements) or to induce Lender to make the Loan, proves to be untrue, misleading or false in any material respect.
(f) Borrower suffers or permits any lien, encumbrance or security interest to attach to any of its property, except as herein otherwise expressly permitted, or if any judgment shall be entered against Borrower or any attachment shall be made against any property of Borrower, which judgment or attachment shall remain undischarged, unbonded, or undismissed for a period of ten (10) days.
(g) Borrower defaults in the payment of any principal or interest on any obligation to Lender or to any other creditor.
(h) Borrower shall sell, lease, or otherwise transfer or convey any of the Collateral, or any interest therein without Lender’s prior written approval, except as herein otherwise expressly permitted.
(i) Borrower defaults under or causes to be revoked any state or county permit or license.
ARTICLE VI
(a) Move to protect its rights and remedies as a secured party under the Mortgage and Security Agreement and Security Agreement, by extrajudicial authority as set forth in those instruments, by action at law or equity, or by any other lawful remedy to enforce payment.
(b) Apply the proceeds from any disposition of the Collateral to the satisfaction of the following items in the order in which they are listed:
(1) The expenses of taking, preserving, insuring, repairing, holding and selling the Collateral, including any legal costs and attorney’s fees. If any of the Note shall be referred to an attorney for collection, Borrower and all others liable on the Note, jointly and severally agree to pay reasonable attorney’s fees and all costs of collection.
(2) The unpaid amount of any interest due on the Note, and all other expenses of Lender.
(3) The unpaid principal amounts of the Note.
(4) Any other indebtedness of Borrower to Lender.
(5) The remainder, if any, to Borrower, it being understood and agreed that if the proceeds realized from the disposition of the Collateral shall fail to satisfy items (1) through (4) above, Borrower shall forthwith pay any such deficiency to Lender upon demand.
(c) Exercise any and all rights of setoff which Lender may have against any account, fund or property of any kind, tangible or intangible, belonging to Borrower and which shall be in Lender’s possession or under Lender’s control.
ARTICLE VII
Borrower’s obligation for payment of the Note shall be collateralized by the following (the “Collateral”):
ARTICLE VIII
8.2 AMENDMENTS. No amendment of any provisions of this Loan Agreement, nor consent to any departure of Borrower therefrom, shall in any event be effective unless the same
shall be in writing and signed by Lender and then such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given.
If to Borrower:
0000 Xxxxxxxxx Xxxx, XX, Xxxxx 000
Two Xxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxx 00000
If to Lender:
METRO CITY BANK
0000 Xxxxxx Xxxxxxx, Xxxxx 000
Xxxxxxx, XX 00000
8.4 GOVERNING LAW AND PARTIES BOUND. This Agreement and Note and the rights and obligations of the parties thereunder shall in all respects be governed by, construed and enforced in accordance with federal law and the laws of the State of Georgia, except and only to the extent of procedural matters related to the perfection and enforcement of Lender’s rights and remedies against the Property, which matters shall be governed by the laws of the state of Arkansas. However, in the event that the enforceability or validity of any provision of this Agreement is challenged or questioned, such provision shall be governed by which whichever applicable state or federal law would uphold or would enforce such challenged or questioned provision. The loan transaction which is evidenced by this Agreement and the Note has been applied for, considered, approved and made, and all necessary loan documents have been accepted by Lender in the State of Georgia.
8.7 NO WAIVER: REMEDIES. No failure on the part of the Lender, and no delay in exercising any right under this Loan Agreement, shall operate as a waiver thereof; nor shall any single or partial exercise of any right under this Loan Agreement preclude any other or further exercise thereof or the exercise of any other right.
8.9 TIME. Time is of the essence of this Agreement.
8.10 INTEREST. Interest shall be calculated on the basis of an actual 360 day year.
8.11 PERMANENT REFINANCING CONDITIONS. In regards to permanent financing, Borrower acknowledges the following:
a. Should the Borrower opt to not have Lender provide permanent take out financing of this Loan within the SBA 504 program, Borrower shall be charged a one percent (1%) separation fee; and
b. If, for any reason, the Borrower is unable to obtain SBA approval of an SBA 504 Loan, Lender shall have the right to pay down the Loan using i) the certificate of deposit collaterally assigned to Lender; ii) the estimated 504 lender costs held in escrow as more particularly shown on the disbursement memorandum executed of even date herewith; and iii) all funds held in the capital improvements account held by Lender in the amount of $300,000.00.
8.12 GRACE AND NOTICE OF CURE RIGHTS. Notwithstanding any other provision to the contrary contained in this Agreement or in any of the other Loan Documents, upon the occurrence of a monetary default or a monetary Event of Default under any of the Loan Documents, Lender shall not be required to send written notice to Borrower and/or Guarantors. All loan payments are due on the first (1st) day of each month, however; payments will not be considered late until ten (10) days thereafter. In the event the default does not involve the payment of money by Borrower to Lender, Borrower and Guarantors shall have thirty (30) days following receipt of such notice to fully cure such default. In the event the default is cured within such period, it shall be as if no default had occurred.
(a) all Accounts; (b) all Payment Intangibles; (c) all Instruments, Chattel Paper (including Electronic Chattel Paper), Documents, Letter-of-Credit Rights, Supporting Obligations and Commercial Tort Claims, in each case to the extent arising out of, relating to or given in exchange for or settlement of or to evidence the obligation to pay any Account or Payment Intangible; (d) all General Intangibles (including contract rights and trademarks, copyrights, patents and other intellectual property) that arise out of or relate to any Account or Payment Intangible or from which any Account or Payment Intangible arises;
(e) all remedies, guarantees and collateral evidencing, securing or otherwise relating to or associated with any Account or Payment Intangible, including all rights of enforcement and collection; (f) all Commercial Lockboxes, Governmental Lockboxes, Collection Accounts and other Deposit Accounts into which Collections or other proceeds of Collateral or Advances are deposited, and all checks or Instruments from time to time representing or evidencing the same; (g) all cash, currency and other monies at any time in the possession or under the control of MOUNTAIN VIEW NURSING, LLC’s working capital or operating lender [the “Operations Lender”] or a bailee of such Operations Lender; (h) all books and records evidencing or relating to or associated with any of the foregoing; (i) all information and data compiled or derived with respect to any of the foregoing (other than any such information and data subject to legal restrictions of patient confidentiality); and (j) all Collections, Accessions, receipts and Proceeds derived from any of the foregoing, all words with capitalized letters being defined in the Uniform Commercial Code or the loan agreement between MOUNTAIN VIEW NURSING, LLC and Operations Lender.
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BORROWER: | |||||
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Signed, sealed and delivered in the presence of: |
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MT. V PROPERTY HOLDINGS, LLC | |||||
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/s/ [ILLEGIBLE] |
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By: |
/s/ Xxxxxxxxxxx X. Xxxxxxx |
(L.S.) | |||
Witness |
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Xxxxxxxxxxx X. Xxxxxxx, Manager | |||||
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Jan. 30, 2016 |
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Notary Public |
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Signed, sealed and delivered in the presence of: |
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METRO CITY BANK | |||||
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/s/ [ILLEGIBLE] |
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By: |
/s/ [ILLEGIBLE] | ||||
Witness |
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Name: |
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Title: |
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Notary Public |
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(Bank Seal) | ||||
The undersigned hereby expressly agree and consent to all of the terms and conditions contained herein and further agree to be bound by all of the terms and conditions contained herein. This 8th day of June, 2012.
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GUARANTOR: | |||
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MOUNTAIN VIEW NURSING, LLC | |||
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By: |
/s/ Xxxxxxxxxxx X. Xxxxxxx |
(L.S.) | |
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Xxxxxxxxxxx X. Xxxxxxx, Manager | |||
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AdCare Health Systems, Inc. | |||
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By: |
/s/ Xxxxxxxxxxx X. Xxxxxxx | ||
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Xxxxxxxxxxx X. Xxxxxxx, Vice Chairman and Chief Acquisition Officer | |||
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[Corporate Seal] | |||