AMENDED UNSECURED CREDIT NOTE
Date: April 30, 1997 Maturity Date: November 20, 1998
Amount: $2,870,853.00
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 00000-0000
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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 $2,870,853.00 (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 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. Repayment of the Principal on this Note shall begin six (6)
months following the date hereof, in equal monthly installments together with
interest thereon, until paid in full on the Maturity Date. Interest due
hereunder shall also 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.
4. Waivers, Consents and Covenants. Borrower, any endorser or guarantor hereof,
or any other party hereto (individually an "Obligor" and collectively
"Obligors") 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 including, without limitation, the Revolving Credit Note, dated as of the
date hereof, issued by Borrower to the Lender in an aggregate principal amount
not to exceed $5,000,000 (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 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 Xxxxxx'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 proceeds, or other proceeding in such
amount as may be determined reasonable by any arbitrator or court, whichever is
applicable.
5. Indemnification. 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.
6. 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 fifteeen days late.
7. 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, 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 of 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 any Obligor in any Loan Documents or otherwise is
or was, when it was made, untrue or materially misleading; (f) the failure of
any Obligor to 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 which Lender deems
to be a material nature, in Lender'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 such 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.
8. 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 become immediately due and payable 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.
9. 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 any 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 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.
10. Applicable Law, Venue and Jurisdiction. This Note and the rights and
obligations of Borrower and Lender shall be governed by and interpreted in
accordance with the law of the State of Florida.
11. 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 or validity of such provision as it may apply to other persons or
circumstances.
12. 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.
13. Controlling Document. To the extent that this Note conflicts with or is in
any way incomparable with any other document related specifically to the loan
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. This Note
replaces, amends and supersedes the Unsecured Credit Note, dated November 20,
1996, issued by Borrower to Lender in the original principal amount of
$3,445,024.00.
14. 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 this loan
are to be used for business purposes only and is therefore a commercial loan.
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: ______________________________
