EXHIBIT 10.58
PROMISSORY NOTE
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DATE: June 1, 2000
PRINCIPAL AMOUNT: $4,268,417
PLACE: Burbank, California
1. Promise to Pay. Anaheim Healthcare Center, LLC and Sun Mar
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Management Services (hereinafter collectively referred, to as "Borrower")
promise to pay to Fountain View, Inc., Summit Care Corporation, and Skilled Care
Pharmacy (hereinafter collectively "Lender"), or order, in lawful money of the
United States of America, the principal amount of Four Million Two Hundred and
Sixty-Eight Thousand Four Hundred and Seventeen Dollars ($4,268,417.00),
together with interest on the unpaid principal balance from the date hereof,
until paid in full.
2. Payment. Borrower will pay this loan as follows:
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commencing on July 1, 2000, and the first day of each month thereafter through
and including June 1, 2005, Borrower shall make monthly payments of interest and
principal in an amount sufficient to pay off the entire loan balance in monthly
payments, amortized over a ten (10) year period, at the variable interest rate
provided for below which is in effect as of the next preceding Payment Change
Date as hereinafter defined. The initial payment amount will be $55,232.00. The
interest rate on this Note and the amount of the payment shall change on each
Payment Change Date, which Payment Change Dates shall be July 1, 2001, and each
July 1, thereafter until this loan is paid in full. On June 1, 2005, Xxxxxxxx
will make a final payment in the amount of all sums then due hereunder from
Borrower to Xxxxxx, including all unpaid principal, accrued interest and any
other charges. Borrower understands that notwithstanding the calculation of the
payment based upon a ten (10) year amortization, that this loan is all due and
payable in five (5) years, and that the final payment will be a substantial
balloon payment representing the majority of the principal balance of this loan.
Interest on this Note is computed on a 365/365 simple interest basis; that is,
by applying the ratio of the annual interest rate in effect over 365 days in a
year, times the outstanding
principal balance, times the actual number of days the principal balance is
outstanding. Borrower will pay Lender at 2600W. Magnolia Blvd., Burbank, CA
91505, or at such other place as Lender may designate in writing. Unless
otherwise agreed or required by applicable law, payments will be applied first
to any unpaid collection costs and late charges, then to unpaid interest, and
any remaining amount to principal, as set forth in paragraph 4, below.
3. Variable Interest Rate. The interest rate on this Note shall be a
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variable rate which is subject to change as set forth herein based on changes in
an independent index which is the prime rate as published in the Wall Street
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Journal which is hereinafter referred to as the "Index". If the Index becomes
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unavailable during the term of this loan, Lender may designate a similar
substitute index after notice to Borrower. Lender will tell Borrower the current
index rate upon Xxxxxxxx's request. The Index is currently 9.5 percent per
annum. On July 1, 2001, and on July 1, of each year thereafter, the variable
interest rate will be changed as set forth herein. The interest rate to be
applied to the unpaid principal balance of this Note shall be equal to the Index
in effect, as of each Payment Change Date. This rate will be in effect until the
next Payment Change Date. Under no circumstances will the interest rate on this
Note be more than the maximum rate allowed by applicable law.
4. Allocation of Principal and Payments. The principal balance
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represented by this Note consists of the following:
a. New advance to be paid to Borrower upon delivery of this Note to Lender:
One Hundred and Six Thousand Three Hundred and Ninety-Two Dollars
($106,392.00).
b. Remaining balance Note from DMN Enterprises to Summit Care Corporation,
dated December, 3, 1993: Twenty-Five Thousand, Nine Hundred and Fifty-
Three Dollars ($25,953.00).
c. Remaining balance, Note payable from Garden Park Care, Center, Inc. to
Summit Care Corporation, dated January, 1995: One Hundred and Sixty-Four
Thousand Nine Hundred and Forty Dollars ($l64,940.00).
d. Remaining balance, Note payable from Courtyard Health Care Center to
Summit Care Corporation, dated May 31, 1995: One Hundred and Sixty
Thousand Seven Hundred and Fourteen Dollars ($160,714.00).
e. Remaining balance, Note payable from Anaheim Healthcare Center, LLC to
Summit Care Corporation, dated May 30, 1996: One Million Four Hundred
and Sixty Thousand Six Hundred and Forty Seven Dollars ($1,460,647.00).
f. Remaining balance on Note from Anaheim Healthcare Center, LLC to Summit
Care Corporation, dated August 1, 1997: One Million Three Hundred
Ninety-Seven Thousand and Forty-Five Dollars ($1,397,045.00).
g. Remaining balance, Settlement of Account Agreement, dated October 13,
1998, Anaheim Healthcare Center, LLC: One Hundred Twenty-Three Thousand
Four Hundred and Ninety-Eight Dollars ($123,498.00).
h. Remaining balance, Settlement of Account Agreement, dated October 13,
1998, Citrus Villa Retirement Center: Five Hundred and Sixty-Two Dollars
($562.00).
i. Remaining balance, Settlement of Account Agreement, dated October 13,
1998, Citrus Nursing Center: Sixty-Nine Thousand Seven Hundred and
Thirteen Dollars ($69,713.00).
j. Remaining balance, Settlement of Account Agreement, dated October 13,
1998, Gibralter Convalescent Hospital, Inc. (dba. Del Mar Convalescent
Hospital): Twenty-Three Thousand Seven Hundred and Ninety-Seven Dollars
($23,797.00).
k. Remaining balance, Settlement of Account Agreement, dated October 13,
1998, F&B Healthcare (dba Extended Care Hospital of Riverside): Fifty-
Nine Thousand Six-Hundred and Seven Dollars ($59,607.00).
l. Remaining balance, Settlement of Account Agreement, dated October 13,
l998, Garden Park Care Center, LLC: Ninety-Four Thousand Two Hundred and
Sixty-Four Dollars ($94,264.00).
m. Remaining balance, Settlement of Account Agreement, dated October 13,
1998, Sun Mar Nursing Centers (dba Laurel Convalescent Hospital): Fifty-
Nine Thousand Seven Hundred and Ninety-Six Dollars ($59,796.00).
n. Remaining balance, Settlement of Account Agreement, dated October 13,
1998, Monterey Park
Convalescent Hospital, Inc.: Forty-Nine Thousand Nine Hundred and
Seventy-Five Dollars ($49,975.00).
o. Remaining balance, Settlement of Account Agreement, dated October 13,
1998, Paramount Convalescent Group, Inc.: Twenty-Eight Thousand One
Hundred and Nine Dollars Cents ($28,109.00).
p. Remaining balance, Settlement of Account Agreement dated October 13,
1998, Sun Mar Healthcare, Inc. (dba Sun Mar Nursing Center): Twenty-Four
Thousand One Hundred and One Dollars ($24,101.00).
q. Remaining balance, Settlement of Account Agreement, dated October 13,
1998, Gibralter Convalescent Hospital, Inc. (dba Sunset Manor
Convalescent): One Hundred Forty-Seven Thousand Three Hundred and
Twenty-Three Dollars ($l47,323.00).
r. Remaining balance, Settlement of Account Agreement, dated October 13,
1998, Villa Rancho Xxxxxxxx Healthcare, LLC: Forty-Seven Thousand Three
Hundred and Thirty-Eight Dollars ($47,338.00).
s. Remaining balance, Settlement of Account Agreement, dated October 13,
1998, Wyngate Nursing Center (dba North Valley Nursing Center): Seventy-
Nine Thousand Four Hundred and Seventy-Nine Dollars ($79,479.00).
t. Remaining balance, Settlement of Account Agreement, dated October 13,
1998, Inland Medical, Inc. (dba Xxxxxx Rehabilitation Hospital): One
Hundred Forty-Four Thousand Four Hundred and Twenty-One Dollars
($144,421.00).
u. Remaining balance, Settlement of Account Agreement, dated October 13,
1998, Xxxxxxxx Care Center: One Thousand Seven Hundred and Seventy-Nine
Dollars ($1,779.00).
v. The total principal amount of this Note also reflects a credit for an
overpayment of $1,237.00 on a Note given by Inland Medical, Inc.
All principal payments received, whether as part of a monthly
installment payment, a prepayment, a balloon
payment, or otherwise, shall be credited pro-rata to each of the obligations
listed above and Borrower shall not have the right to specify any alteration of
the foregoing allocation. The listing of the sums set forth above in paragraphs
b. through u., inclusive, is a restatement, ratification, and assumption of such
obligations, and their restatement, herein, shall not result in full payment or
satisfaction of the obligations referenced nor shall it be construed as creating
a new separate and distinct obligation of the entity whose obligation is
referenced in paragraphs b through u, inclusive, above. Rather, the referenced
obligations shall be deemed paid or satisfied only, to the extent payments are
actually made to Lender, and allocated, as set forth above, and no double
liability shall be imposed on any entity referenced in paragraphs b through u,
above.
5. Allocations Between Lenders. The three parties referenced as a
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Lender, herein, shall determine among themselves the proper distribution of
payments, owing to each of them. This is a matter of which Borrower need not be
concerned. All checks for payment shall be made payable to "Fountain View, Inc."
6. Pre-Payment. Borrower may pay without penalty all or a -portion of
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the amount owed earlier than it is due. However, any such payment shall be
allocated as set forth in paragraph 4, above. Early payments will not, unless
agreed to by Xxxxxx in writing, relieve Borrower of Xxxxxxxx's obligation to
continue making payments under the payment schedule. Rather, they will reduce
the principal balance due.
7. Late Charge. If a payment is ten (10) days or more late, Borrower
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will be charged- five percent (5%) of the regularly scheduled payment as a late
charge.
8. Lender's Rights. In the event of any default by Borrower
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hereunder, in making any payment hereunder, or performing any other obligation
or condition provided for hereunder, or contained in any other agreement of
Borrower with Xxxxxx, or any default as defined in Paragraph 10, below, Lender
may, at its option, declare the entire unpaid principal balance of this Note and
all accrued unpaid interest immediately due, without notice, and then Borrower
will pay that amount. Upon Xxxxxxxx's failure to pay all amounts declared due
pursuant to this section, including failure to pay upon final maturity, Lender,
at its option, may also, if permitted under applicable law, increase the
interest rate otherwise chargeable pursuant to this Note, by five (5) percentage
points per annum. Lender may hire or pay someone else to help collect this Note
if Borrower does not pay. Borrower also
will pay Lender that amount. This includes, subject to any limits under
applicable law, Xxxxxx's reasonable attorneys' fees and legal expenses, whether
or not there is a lawsuit, including reasonable attorneys' fees and legal
expenses for bankruptcy proceedings (including efforts to modify or vacate any
automatic stay or injunction), appeals, and any anticipated post-judgment
collection services. Xxxxxxxx also will pay any court costs, in addition to all
other sums provided by law. This Note has been delivered to Lender and accepted
by Lender in the State of California, County of Los Angeles. If there is a
lawsuit, Xxxxxxxx agrees upon Xxxxxx's request to summit to the jurisdiction of
the Courts of Los Angeles County, State of California. This Note shall be
governed by and construed in accordance `with the laws of the State of
California.
9. Business Purpose Statement. Borrower represents and warrants that this
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loan is taken out for a business purpose and that all of the proceeds thereof
will be so used.
10. Events of Default. Each of the following shall constitute an event
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of default under this Promissory Note:
a. Borrower fails to make any payment under this Promissory Note when due.
b. Borrower fails to comply with or to perform any other term, obligation,
covenant or condition contained in this Promissory Note or in any other
written agreement with Lender, within the time required, but after the
notice period if any, provided for with respect to such obligation,
covenant or condition.
c. Any warranty, representation or statement made or furnished to Lender by
or on behalf of Borrower is false, misleading, or untrue in any material
respect, either now or at the time, the warranty, representation or
statement was made or furnished.
d. The dissolution or termination of Xxxxxxxx's existence as a going
business, the insolvency of Borrower, or Borrower being unable to, or
admitting in writing that Xxxxxxxx is unable to pay Xxxxxxxx's debts as
they mature.
e. The commencement of any proceeding under any bankruptcy or insolvency
laws by Xxxxxxxx, the making of an assignment for the benefit of
creditors by Xxxxxxxx, Borrower entering into any composition or
arrangement with creditors, or the appointment of a receiver for any
part of
Borrower's property.
f. The commencement of any involuntary proceeding under any bankruptcy or
insolvency laws, or action for dissolution or reorganization commenced
against any Borrower by a party other than Borrower, without the
Borrower's acquiescence or consent thereto, which proceeding is not
dismissed, or otherwise terminated, without the granting of relief
therein, within thirty-five (35) days after the petition or action is
filed.
g. The levy of any Writ of Execution, Writ of Attachment, Writ of
Possession, garnishment, or other process to enforce any public or
private liability of Borrower, or the levy of any Writ of Execution,
Writ of Attachment, Writ of Possession, garnishment, other process, or
imposition of any involuntary lien upon, any property given as security
for the obligation evidenced by this Promissory Note or the obligations
of any guarantor of the obligations evidenced by this Promissory Note,
that is not released within 60 days of levy.
h. Any of the preceding events occurs with respect to any guarantor of the
indebtedness evidenced by this Promissory Note. In the event any
guarantor dies or becomes incompetent, Lender, at its option, may, but
shall not be required to, permit the guarantor's or partner's estate or
heirs to assume, unconditionally, the obligations of said guarantor, in
a manner satisfactory to Lender, and in doing so, cure such an event of
default.
i. Transfer, assignment or sale of a substantial portion of the assets of
any Borrower other than in the ordinary course of business, or any
transfer, assignment or sale of the shares, membership interests,
partnership interests, or other ownership interest in any Borrower to
any person or entity other than those holding such shares or interests
as of the date hereof.
j. Anaheim Healthcare Center, LLC, Xxxxxxxx Care Center, LLC, Citrus
Nursing Center, F&B Healthcare, Garden Park Center, LLC, Gibralter
Convalescent Hospital, Inc., Heritage Manor Healthcare, LLC, Inland
Medical, Inc., Monterey Park Convalescent Hospital, Inc., Paramount
Convalescent Group, Inc., Sun Mar, Healthcare, Inc., Sun Mar Nursing
Centers, Wyngate Nursing Center, Citrus Villa Retirement Center, or Park
Regency Retirement Center, fails to comply with or to perform any term,
obligation, covenant or condition contained in any written
agreement with Fountain View, Inc., Summit Care Corporation, Skilled
Care Pharmacy, or Locomotion Therapy, Inc., within the time required but
after the notice period, if any, provided for, with respect to such
obligation, covenant or condition.
11. Security. This Note is secured by a Commercial Security Agreement of
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even date herewith, granting a security interest in the assets of Anaheim
Healthcare Center, LLC. Individual portions of the obligation are also secured
by additional security agreements.
12. Financial Statements and Information. Borrower agrees to provide to
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Lender, on an annual basis, the following:
a. Each Borrower's annual financial statements.
b. Each Borrower's annual tax returns shall be provided within 10 days
after they' are due for filing.
13. Assignment. Lender may negotiate, assign or transfer this Promissory
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Note and all of its rights thereunder and with respect to all related loan
documents, including but not limited to deeds of trust, guaranties, loan
agreements, indemnity agreements, and security agreements, `at any time,' in its
sole discretion and, without restriction and any such assignee, holder or
transferee shall enjoy all of Lenders rights. However, under no circumstances
may Xxxxxx negotiate, assign or transfer this Promissory Note without
simultaneously and together negotiating, assigning or transferring each of the
obligations referenced in subparagraphs b through u of paragraph 4, above, and
all documents relating thereto.
14. General Provisions. Lender may delay or forego enforcing any of its
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rights or remedies under this Note without losing them. Borrower and any other
person who signs, guarantees or endorses this Note, to the extent allowed by
law, waive any applicable statute of limitations, presentment, demand for
payment, protest and notice of dishonor. Each person signing this Note is
jointly and severally liable thereon as a principal obligor. Upon any change in
the terms of this Note, and unless otherwise expressly stated in writing, no
party who signs this Note, whether as maker, guarantor, or accommodation maker,
shall be released from liability. All such parties agree that Lender may renew,
extend (repeatedly and for any length of time) or modify this loan, or release
any party or guarantor or collateral; or impair, fail to realize upon or perfect
Xxxxxx's security interest in the collateral; and take
any other action deemed necessary by Xxxxxx without the consent of or notice to
anyone.
15. Written Agreement. This Note, together with the Commercial Security
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Agreement, and any written instruments relating to the obligations referenced in
paragraph 4, above, and other written agreements executed concurrently herewith,
supersede and replace all prior negotiations, proposed agreements, or
agreements, written or oral. Each party acknowledges that no other party or any
agent or attorney of any other party has made any promise, representation or
warranty whatsoever, express or implied, not contained in the above-referenced
superseding written agreements concerning the subject matter hereof to induce it
to execute this agreement, and each party acknowledges that it has not executed
this agreement in reliance on any promise or representation not contained in the
above referenced written agreements.
PRIOR TO SIGNING THIS NOTE, XXXXXXXX READ AND UNDERSTOOD ALL OF THE
PROVISIONS OF THIS NOTE, INCLUDING THE VARIABLE INTEREST RATE PROVISIONS.
XXXXXXXX AGREES TO THE TERMS OF THE NOTE AND ACKNOWLEDGES RECEIPT OF A COMPLETED
COPY OF THE NOTE.
"BORROWER"
Anaheim Healthcare Center, LLC
By: __________________________________
Printed Name _________________________
Title:________________________________
Sun Mar Management Services
By: __________________________________
Printed Name _________________________
Title:________________________________
