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EXHIBIT 10.3
LINE OF CREDIT NOTE
(Overline Facility)
$3,500,000.00 Nashville, Tennessee
As of October 1, 1999
FOR VALUE RECEIVED, the undersigned, Diversicare Management Services Co.,
a Tennessee corporation (the "Borrower") promises to pay to the order of First
American National Bank (the "Bank"), the sum of Three Million Five Hundred
Thousand and 00/100 Dollars ($3,500,000.00), or so much thereof as may be
advanced hereunder in accordance with the terms of a Master Credit and Security
Agreement dated as of December 27, 1996, as amended from time to time (the "Loan
Agreement"), between Bank, GMAC-CM Commercial Mortgage Corporation, 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 fixed rate of fourteen percent 14% per annum.
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 2.5 of the Loan Agreement. The outstanding principal balance, together
with all accrued and unpaid interest, shall be due and payable in full on
December 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 represents a temporary increase in the Working Capital Line and,
as such (i) shall be advanced in accordance with the provisions of the Loan
Agreement for advances under the Working Capital Line, and (ii) is secured by
the Collateral described or referred to in the Loan Agreement and the other Loan
Documents, 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 the 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
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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.
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 (the "Maximum Amount"). 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 Obligations so that the amount of interest
paid does not exceed the Maximum Amount.
The obligation is made and intended as a Tennessee contract and is to be
so construed.
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IN WITNESS WHEREOF, this Note has been duly executed by the undersigned
the day and year first above written.
DIVERSICARE MANAGEMENT SERVICES
CO., a Tennessee corporation
BY: /s/ Xxxxxxx X. Xxxxx, Xx.
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TITLE: Executive Vice President
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RECEIVED AND ACKNOWLEDGED:
FIRST AMERICAN NATIONAL BANK
BY: /s/ Xxxxxxx X. Xxxxxxxx
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TITLE: Senior Vice President
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