PROMISSORY NOTE
Exhibit 10.7
| $1,200,000.00 | Effective November 6, 2008 |
FOR VALUE RECEIVED, RHA TISHOMINGO, LLC, an Oklahoma limited liability company, d/b/a Xxxxxxxx
Memorial Hospital (hereinafter referred to as the “Borrower”), unconditionally promises to pay to
the order of CANADIAN STATE BANK (“Lender”), at 0000 X. Xxxxxxxx Xxxxx, Xxxxx, XX 00000, or at such
other place as may be designated in writing by the holder of this promissory note, the principal
sum not to exceed ONE MILLION TWO HUNDRED THOUSAND AND 00/100 Dollars ($1,200,000.00), together
with interest thereon at the rate hereinafter specified:
INTEREST RATE. Interest shall accrue on the outstanding principal balance of this
loan at the rate of Wall Street Journal Prime Rate plus two percent (2.00%), adjusted at the end of
each calendar quarter. Interest on this Note shall be computed on the basis of a 360 day year. In
no event shall the interest rate be less than seven percent (7.0%) per annum. The Wall Street
Journal Prime Rate (WSJP) means that annual rate of interest published in the Wall Street Journal
and is defined herein as the base rate on corporate loans posted by at least 75% of the nations
thirty (30) largest banks or a similar substitute rate determined by the Lender in its sole
discretion as most nearly approximating that rate in the case this prime rate is no longer
published. Each change in the WSJP shall become effective without notice (which notice is hereby
waived) on the date of change.
PAYMENT TERMS. Beginning on November 30, 2008, and on the last day of each month
thereafter, Borrower shall pay Lender monthly installment payments of principal and interest based
upon a twenty (20) year amortization. On the Maturity Date of November 6, 2028, all accrued
interest and unpaid principal shall be due and payable in full. Lender may adjust the monthly
payments as needed to provide for payment in full within the stated amortization period.
LATE CHARGES: Notwithstanding the grace period, Xxxxxx may assess a late charge if a
payment is more than 10 days late. The charge will be $100.00 for each late payment. This charge
will be paid promptly but only once for each late payment. In no event shall these charges, either
before or after maturity, be greater than permitted by law.
DEFAULT INTEREST: Any sum not paid when due shall bear interest at a rate of six
percent (6%) per annum greater than the per annum interest rate prevailing on this Note at the time
the unpaid amount came due, but in no event at a rate less than ten percent (10%) per annum.
Of even date herewith the Borrower and Xxxxxx have entered into that certain Loan Agreement
(“Agreement”). This Promissory Note is defined in the Agreement as the Promissory Note. Unless
otherwise defined herein, all words and phrases with their initial letter capitalized shall be
afforded the meaning given in the Agreement.
The Lender’s records of advances and repayments will be prima facie evidence of the amount
owed by the Borrower to the Lender with respect to this Note, in the absence of manifest error.
All payments made upon this Note shall be applied first to the outstanding accrued interest,
if any, through the date of payment and the balance, if any, to the principal balance due and owing
under this Note.
PREPAYMENT: On any installment payment date additional payments may be made to be
credited to principal. Xxxxxxxx agrees to a prepayment premium of five percent (5.0%) of any
additional principal amount paid in year one; four percent (4%) in year two three percent (3.0%) in
year three; two percent (2.0%) in year four, and one percent (1.0%) in year five. After the fifth
year Borrower shall have the right to make any prepayment of principal without a premium cost.
Prepayments shall be credited to installments of principal in the inverse order of their maturity.
Monthly payments shall not be reduced as a result of any prepayments. To the extent permitted by
law, the foregoing prepayment premium shall be payable regardless of whether the loan is prepaid
voluntarily or involuntarily. Any prepaid amounts specified in a notice of prepayment, as
aforesaid, shall become due and payable at the time provided in said notice.
Xxxxxxxx agrees that if, and as often as, this Note is placed in the hands of an attorney for
collection or to defend or enforce any of the Lender’s rights hereunder or under any instrument
securing payment of this Note, Borrower shall pay the Lender its reasonable attorneys’ fees and all
court costs and other expenses incurred in connection therewith.
It is expressly understood that time is of the essence of this Note, and if the Borrower shall
fail to pay, within ten (10) days of when due, any amount payable under the provisions of this Note
or fail to perform any other obligation to the Lender, or upon the occurrence of an Event of
Default under the Agreement such event shall constitute a default hereunder (any of the foregoing
being hereinafter referred to as “Default”). Upon Default (i) this Note and all other liabilities
together with all accrued but unpaid interest hereon and thereon, at the option of the Lender, and
without notice, demand or presentment, or notice of intent to accelerate to the Borrower or any
other person or party, unless specifically provided in the Agreement, may be declared, and
thereupon immediately shall become, due and payable; and (ii) the Lender may exercise, from time to
time, any and all other rights, remedies and recourses now or hereafter existing in equity, at law,
herein or under the Agreement, any other Loan Documents between Borrower and Lender, by virtue of
statute or otherwise, including but not limited to, all rights and remedies available to it under
the Uniform Commercial Code as in effect from time to time in the State of Oklahoma as the Lender
may elect, and the right to foreclose any and all liens and security interests securing this Note.
Notwithstanding anything herein or in the Agreement to the contrary, this Note and all other
liabilities of Borrower to Lender, at the option of Lender, may be accelerated, without notice or
demand of any kind in the event Borrower fails to make when due any payments to Lender as required
herein or in the Agreement.
-2-
The invalidity, or unenforceability in particular circumstances, of any provision of this Note
shall not extend beyond such provision or circumstances, and no other provision of this instrument
shall be affected thereby.
Borrower expressly stipulates and agrees that it is 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 the applicable law (state or federal) is
ever judicially interpreted so as to render usurious any amount called for under the Note or under
any of the other Loan Documents, or contracted for, charged, taken, reserved, or received with
respect to the Note, or if Lender’s exercise of the option to accelerate the maturity of the Note,
or if any prepayment by Borrower results in Borrower having paid any interest in excess of that
permitted by applicable law, then it is Borrower’s and Lender’s express intent that all excess
amounts theretofore collected by Lender shall be credited on the principal balance of the Note (or,
if the Note has been or would thereby be paid in full, refunded to Borrower), and the provisions of
the Note and the other Loan Documents immediately shall 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, forbearance, or detention of the loan proceeds evidenced by the Note shall, to
the extent permitted by applicable law, be amortized, prorated, allocated, and spread throughout
the full stated term of the Note until payment in full so that the rate or amount of interest on
account of the Note does not exceed the maximum rate permitted under applicable law from time to
time in effect and applicable to the Note for so long as the Note is outstanding. Notwithstanding
anything to the contrary contained herein or in any of the other Loan Documents, it is not the
intention of Lender to accelerate the maturity of any interest that has not accrued at the time of
such acceleration or to collect unearned interest at the time of such acceleration.
This Note, to the extent of the full face amount hereof, evidences indebtedness of Borrower to
Lender. This Note is issued by the Borrower as part of a commercial transaction and no part of
this loan is for a personal use.
Borrower hereby consents to the jurisdiction and/or venue of any state, district court or
federal district court within the State of Oklahoma, as Lender may elect with respect to any action
involving this Note.
BORROWER HEREBY VOLUNTARILY, AND KNOWINGLY, IRREVOCABLY, AND UNCONDITIONALLY WAIVES ANY RIGHT
TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE (WHETHER BASED UPON CONTRACT, TORT OR
OTHERWISE) BETWEEN THE BORROWER AND XXXXXX XXXXXXX OUT OF OR IN ANY WAY RELATED TO THIS NOTE OR ANY
OTHER RELATED LOAN DOCUMENT.
-3-
Borrower stipulates and agrees that the Lender may, at its sole discretion, assign this Note
to any such person it may select, upon such terms and conditions as it may deem appropriate, and
that such assignee shall thereafter become the holder of this Note and shall be entitled to enforce
all rights, remedies, and other benefits which shall or may inure to the benefit of the Lender.
Borrower further stipulates, represents and agrees that this instrument evidences the valid,
enforceable, and binding obligation of the Borrower to the Lender in accordance with the terms and
provisions hereof, without any defense (as of the date of this Note) to the enforcement thereof,
whether denominated as affirmative defense, offset, counterclaim, or otherwise, and whether at law
or in equity. Borrower hereby waives all defenses (existing as of the date of this Note and/or
based upon acts or omissions occurring prior to the date of this Note) to the enforcement of this
Note.
IN WITNESS WHEREOF, Xxxxxxxx has executed this instrument
this _____ day of November 2008, and
made effective as of the date first above appearing.
| “BORROWER” RHA TISHOMINGO, LLC, an Oklahoma limited liability company |
|||||
| By: | Rural Hospital Acquisition, LLC as its Manager | ||||
| By: | |||||
| Name: | Xxxxxx X. Xxxxx | ||||
| Title: | Manager | ||||
-4-
