1
EXHIBIT 10.2
AMENDED AND RESTATED
REVOLVING CREDIT NOTE
$14,000,000 October 16, 1997
FOR VALUE RECEIVED, the undersigned, Horizon Health Corporation,
formerly known as Horizon Mental Health Management, Inc. ("Parent"), a Delaware
corporation, Horizon Mental Health Management, Inc. ("Management"), a Texas
corporation, and Mental Health Outcomes, Inc. ("Outcomes"), a Delaware
corporation (Parent, Management and Outcomes are hereinafter individually and
collectively referred to as the "Maker"), hereby unconditionally promise to pay
to the order of TEXAS COMMERCE BANK NATIONAL ASSOCIATION ("Payee"), at its
office at 0000 Xxxx Xxxxxx, Xxxxxx, Xxxxx 00000, the principal sum of FOURTEEN
MILLION AND NO/100 DOLLARS ($14,000,000.00), or so much thereof as may be
advanced and outstanding hereunder, in lawful money of the United States of
America, together with interest from the date hereof until maturity at the
rates per annum provided below.
1. Definitions. For purposes of this Note, unless the context
otherwise requires, the following terms shall have the definitions assigned to
such terms as follows:
"Amortized Payment Amount" is defined in PARAGRAPH 2 hereto.
"Applicable LIBOR Margin" means the following per annum percentages,
applicable in the following situations:
Applicable
LIBOR Margin
------------
(a) Debt Coverage Ratio is less than 1.0 to 1.0 0.75%
(b) Debt Coverage Ratio is greater than or equal to 1.0
to 1.0 and less than or equal to 1.50 to 1.0 1.00%
(c) Debt Coverage Ratio is greater than 1.50 to 1.0
1.25%
"Business Day" means any day other than a Saturday, Sunday or other
day on which Payee is authorized to be closed under the laws of the United
States and the State of Texas.
"Consequential Loss" means, with respect to Maker's payment, or
conversion to a different Interest Option, of all or any portion of the
then-outstanding principal amount of any LIBOR Balance on a day other than the
last day of the Interest Period related thereto, any loss, cost or expense
incurred by Payee in redepositing such principal amount, including the sum of
(i) the interest which, but for such payment, Payee would have earned in
respect of such principal amount so paid, for the remainder of the Interest
Period applicable to such sum, reduced, if Payee is able to redeposit such
principal amount so paid for the balance of such Interest Period, by the
REVOLVING CREDIT NOTE - Page 1
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interest earned by Xxxxx as a result of so redepositing such principal amount
plus (ii) any expense or penalty incurred by Payee on redepositing such
principal amount.
"Consolidated Entities" is defined in the Loan Agreement.
"Contract Rate" means a rate of interest based upon the LIBOR Rate or
the Floating Base Rate in effect at any time pursuant to an Interest Notice.
"Debt Coverage Ratio" is as defined in the Loan Agreement.
"Dollars" and the sign "US$" mean lawful currency of the United States
of America.
"Eligible Accounts" is defined in the Loan Agreement.
"Event of Default" is defined in the Loan Agreement.
"Excess Interest Amount" means, on any date, the amount by which (i)
the amount of all interest which would have accrued prior to such date on the
principal of this Note (had the applicable Contract Rate at all times been in
effect without limitation by the Maximum Rate) exceeds (ii) the aggregate
amount of interest actually received by Payee on this Note on or prior to such
date.
"Extended Maturity Date" means December 15, 2000.
"Federal Funds Effective Rate" means, for any day, the weighted
average of the rates on overnight federal funds transactions with members of
the Federal Reserve System arranged by federal funds brokers, as published on
the next succeeding Business Day by the Federal Reserve Bank of New York, and
if such rate is not so published for any Business Day, the average of the
quotations for the day of such transactions received by Payee from three (3)
federal funds brokers of recognized standing selected by Xxxxx.
"Floating Base Rate" means the greater of (i) the rate of interest
publicly announced by Xxxxx from time to time as its prime rate of interest or
(ii) the Federal Funds Effective Rate plus one-half of one percent (.5%). Such
rate of interest is a fluctuating rate and may or may not at any time be the
best or lowest rate charged by Payee on any loan.
"Floating Base Rate Balance" means that portion of the principal
balance of this Note bearing interest at a rate based upon the Floating Base
Rate.
"Interbank Offered Rate" means, with respect to each LIBOR Interest
Period, the rate of interest per annum determined by Payee (in accordance with
its customary general practice) to be the per annum rate at which deposits in
immediately available funds in Dollars are offered (at approximately 9:00 A.M.
Dallas, Texas time) two (2) LIBOR Business Days prior to the first day of such
LIBOR Interest Period) by Payee to first class banks in the interbank LIBOR
market for delivery on the first day of such LIBOR Interest Period, such
deposits being for a period of time
REVOLVING CREDIT NOTE - Page 2
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equal or comparable to such LIBOR Interest Period and in an amount equal to or
comparable to the principal amount of the LIBOR Balance to which such LIBOR
Interest Period relates.
"Interest Notice" means the written notice given by Maker to Payee of
the Interest Options selected hereunder, the form of which is attached as
EXHIBIT G to the Loan Agreement. Each Interest Notice shall specify the
Interest Option selected, the amount of the unpaid principal balance of this
Note to bear interest at the rate selected and, if the LIBOR Rate is specified,
the length of the LIBOR Interest Period.
"Interest Option" is defined in PARAGRAPH 6 hereof.
"Interest Payment Date" means, (i) in the case of any Floating Base
Rate Balance, (a) (I) on or before the Revolving Commitment Termination Date,
the last day of each calendar month of Maker during the term hereof, commencing
October 30, 1997 and (II) after the Revolving Commitment Termination Date, the
last day of each calendar quarter of Maker during the term hereof, commencing
December 31, 1998, and (b) at the Maturity Date, unless sooner matured or
terminated pursuant to the terms hereof, and (ii) in the case of any LIBOR
Balance, (a) (I) on or before the Revolving Commitment Termination Date, the
last day of each calendar month of Maker during the term hereof, commencing
October 30, 1997, and (II) after the Revolving Commitment Termination Date, the
last day of each calendar quarter of Maker during the term hereof, commencing
December 31, 1998, (b) the last day of the corresponding LIBOR Interest Period
with respect to such LIBOR Balance and (c) at the Maturity Date, unless sooner
matured or terminated pursuant to the terms hereof.
"LIBOR Balance" means any principal balance of this Note which,
pursuant to an Interest Notice, bears interest at a rate based upon the LIBOR
Rate for the LIBOR Interest Period specified in such Interest Notice.
"LIBOR Business Day" means a day on which dealings in Dollars are
carried out in the LIBOR interbank market.
"LIBOR Interest Period" means, with respect to any LIBOR Balance, a
period commencing: (i) on any date upon which, pursuant to an Interest Notice,
the principal amount of such LIBOR Balance begins to accrue interest at the
LIBOR Rate, or (ii) on the last day of the immediately preceding LIBOR Interest
Period in the case of a rollover to a successive LIBOR Interest Period and
ending 30, 60, 90 or 180 days thereafter as Maker shall elect in accordance
with the provisions hereof; provided, that: (A) any LIBOR Interest Period which
would otherwise end on a day which is not a LIBOR Business Day shall be
extended to the next succeeding LIBOR Business Day unless such LIBOR Business
Day falls in another calendar month, in which case such LIBOR Interest Period
shall end on the next preceding LIBOR Business Day; and (B) any LIBOR Interest
Period which begins on the last LIBOR Business Day of a calendar month (or on a
day for which there is no numerically corresponding day in the calendar month
at the end of such LIBOR Interest Period) shall, subject to clauses (C) below
and (A) above, end on the last LIBOR Business Day of a calendar month; (C) any
LIBOR Interest Period which would otherwise end after the Maturity Date, shall
end on the Maturity Date and
REVOLVING CREDIT NOTE - Page 3
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(D) no LIBOR Interest Period may extend beyond a date on which Borrower is
required to make a scheduled payment of principal of this Note unless the
aggregate Floating Base Rate Balance equals or exceeds the principal amount
required to be paid on this Note on such date.
"LIBOR Rate" means, with respect to each LIBOR Interest Period, on any
day thereof the quotient of (i) the Interbank Offered Rate with respect to such
LIBOR Interest Period, divided by (ii) the remainder of 1.0 minus the LIBOR
Reserve Requirement in effect on such day.
"LIBOR Reserve Requirement" means, on any day, that percentage
(expressed as a decimal fraction) which is in effect on such day, as provided
by the Board of Governors of the Federal Reserve System (or any successor
governmental body) for determining the reserve requirements (including without
limitation, basic, supplemental, marginal and emergency reserves) under
Regulation D with respect to "Eurocurrency liabilities" as currently defined in
Regulation D, or under any similar or successor regulation.
"Loan Agreement" means that certain Loan Agreement dated September 29,
1995 between Maker and Payee, as amended by various amendments to the Loan
Agreement, including specifically, but without limitation, that certain Fifth
Amendment to Loan Agreement, dated the date hereof between Maker and Payee as
the same may be further amended, restated or supplemented from time to time.
"Loan Documents" is defined in the Loan Agreement.
"Maturity Date" means the Original Maturity Date and the Extended
Maturity Date, as applicable.
"Maximum Rate", as used herein, means, with respect to the holder
hereof, the maximum nonusurious interest rate, if any, that at any time, or
from time to time, may be contracted for, taken, reserved, charged, or received
on the indebtedness evidenced by this Note under the laws which are presently
in effect of the United States and the State of Texas applicable to such holder
and such indebtedness or, to the extent permitted by law, under such applicable
laws of the United States and the State of Texas which may hereafter be in
effect and which allow a higher maximum nonusurious interest rate than
applicable laws now allow. To the extent that the TEXAS FINANCE CODE, Chapter
303, as amended (the "Act"), is relevant to any holder of this Note for the
purposes of determining the Maximum Rate, each such holder elects to determine
such applicable legal rate under the Act pursuant to the "applicable weekly
ceiling," from time to time in effect, as referred to and defined in Section
303.301 of the Act; subject, however, to the limitations on such applicable
ceiling referred to and defined in Section 303.305 of the Act, and further
subject to any right such holder may have subsequently, under applicable law,
to change the method of determining the Maximum Rate. Chapter 346 of the TEXAS
FINANCE CODE, shall not apply to the loans evidenced hereby.
"Original Maturity Date" means December 15, 1998.
REVOLVING CREDIT NOTE - Page 4
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"Regulation D" means Regulation D of the Board of Governors of the
Federal Reserve System from time to time in effect and shall include any
successor or other regulation relating to reserve requirements applicable to
member banks of the Federal Reserve System.
"Revolving Commitment Termination Date" is defined in the Loan
Agreement.
"Term Balance" means the lesser of (i) the amount of principal
outstanding under this Note as of the Revolving Commitment Termination Date, or
(ii) eighty percent (80%) of the Maker's Eligible Accounts existing on the
Revolving Commitment Termination Date.
2. Payments of Interest, Principal. Interest on the unpaid
principal balance of this Note shall be due and payable on each Interest
Payment Date as it accrues. If on the Revolving Commitment Termination Date,
the Debt Coverage Ratio for the quarter ending on the last day of the calendar
quarter of the Consolidated Entities immediately preceding the Revolving
Commitment Termination Date is greater than or equal to 1.50 to 1.00, the
unpaid principal balance of this Note, together with any outstanding interest,
shall be due and payable on the Original Maturity Date. If on the Revolving
Commitment Termination Date, the Debt Coverage Ratio for the quarter ending on
the last day of the calendar quarter of the Consolidated Entities immediately
preceding the Revolving Commitment Termination Date, is less than 1.50 to 1.00,
(a) the Term Balance shall be divided by eight (8) (the quotient obtained by
such computation is herein referred to as the "Amortized Payment Amount") and
beginning the first December 31 immediately following the Revolving Commitment
Termination Date, Maker shall make equal quarterly installments of principal on
the last day of each calendar quarter in an amount equal to the Amortized
Payment Amount, (b) the amount of principal outstanding in excess of the Term
Balance, together with any outstanding interest thereon, shall be due and
payable on the Revolving Commitment Termination Date, and (c) the remaining
unpaid principal balance of this Note, together with any outstanding interest
shall be due and payable on the Extended Maturity Date.
3. Rates of Interest.
Until maturity of this Note, (a) the unpaid principal of the Floating
Base Rate Balance shall bear interest at a rate per annum which shall from day
to day be equal to the lesser of (i) the Floating Base Rate in effect from day
to day or (ii) the Maximum Rate, and (b) the unpaid principal of each LIBOR
Balance shall bear interest at a rate per annum which shall from day to day be
equal to the lesser of (i) the LIBOR Rate for the LIBOR Interest Period in
effect with respect to such LIBOR Balance, plus the Applicable LIBOR Margin, or
(ii) the Maximum Rate. Each change in the interest rate applicable to a
Floating Base Rate Balance shall become effective without prior notice to Maker
automatically as of the opening of business on the date of such change in the
Floating Base Rate. Each determination by Payee of the LIBOR Rate shall, in
the absence of manifest error, be conclusive and binding. Interest on this Note
with respect to Floating Base Rate Balance shall be calculated on the basis of
the actual days elapsed in a year consisting of 365 days. Interest on this
Note with respect to each LIBOR Balance shall be calculated on the basis of the
actual days elapsed in a year consisting of 360 days, unless such calculation
shall cause the interest on this Note to exceed the Maximum Rate, in which case
the
REVOLVING CREDIT NOTE - Page 5
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interest on this Note shall be calculated on the basis of the actual days
elapsed in a year consisting of 365 days.
4. Interest Recapture. If on each Interest Payment Date or any
other date on which interest payments are required hereunder, Payee does not
receive interest on this Note computed at the Contract Rate because such
Contract Rate exceeds or has exceeded the Maximum Rate, then Maker shall, upon
the written demand of Payee, pay to Payee in addition to the interest otherwise
required to be paid hereunder, on each Interest Payment Date thereafter, the
Excess Interest Amount (calculated as of such later Interest Payment Date),
provided that Maker shall not be required to pay any interest in excess of the
Maximum Rate.
5. Interest on Past Due Amounts. All past due principal and, to
the extent permitted by applicable law, interest upon this Note shall bear
interest at the Maximum Rate, or if no Maximum Rate is established by
applicable law, then at the rate per annum which shall from day-to-day be equal
to four percent (4.0%) in excess of the Floating Base Rate.
6. Interest Option. Subject to the provisions hereof, Maker
shall have the option (an "Interest Option") of having designated portions of
the unpaid principal balance hereof bear interest at a rate based upon the
LIBOR Rate or Floating Base Rate as provided in PARAGRAPH 3 hereof; provided,
however, that in the case of the selection of the LIBOR Rate, (i) the LIBOR
Balance for a particular LIBOR Interest Period shall not be less than $100,000,
and (ii) only three (3) LIBOR Interest Periods shall be in effect at any one
time. The option of Maker to have designated portions of the principal of this
Note bear interest at a rate based upon either the LIBOR Rate or Floating Base
Rate shall be exercised in the manner provided below:
(a) At Time of Borrowing. On the date of any advance
hereunder (or in the case of a designation of a portion of the principal
balance to bear interest at a LIBOR Rate, three (3) Business Days prior to the
date of any advance hereunder), Maker shall give Payee an Interest Notice
indicating the initial Interest Option selected with respect to the principal
balance of this Note.
(b) At Expiration of Interest Periods. At least three
(3) Business Days prior to the termination of any LIBOR Interest Period, Maker
shall give Payee an Interest Notice indicating the Interest Option to be
applicable to the corresponding LIBOR Balance upon the expiration of such LIBOR
Interest Period. If the required Interest Notice shall not have been timely
received by Payee prior to the expiration of the then-relevant LIBOR Interest
Period, Maker shall be deemed to have selected a rate based upon the Floating
Base Rate to be applicable to such LIBOR Balance upon the expiration of such
LIBOR Interest Period and to have given Payee notice of such selection.
(c) Conversion From Floating Base Rate. During any
period in which any portion of the principal balance hereof bears interest at a
rate based upon the Floating Base Rate, Maker shall have the right, on any
Business Day (the "Conversion Date"), to convert all or a portion of such
principal amount from the Floating Base Rate Balance to a LIBOR Balance by
REVOLVING CREDIT NOTE - Page 6
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giving Payee an Interest Notice of such selection at least three (3) Business
Days prior to such Conversion Date.
7. Special Provisions For LIBOR Pricing
(a) Inadequacy of LIBOR Loan Pricing. If Payee
determines that, by reason of circumstances affecting the interbank LIBOR
market generally, deposits in Dollars (in the applicable amounts) are not being
offered to Payee in the interbank LIBOR market for such LIBOR Interest Period,
or that the rate at which such Dollar deposits are being offered will not
adequately and fairly reflect the cost to Payee of making or maintaining a
LIBOR Balance for the applicable LIBOR Interest Period, Payee shall forthwith
give notice thereof to Maker, whereupon until Payee notifies Maker that the
circumstances giving rise to such suspension no longer exist, (i) the right of
Maker to select an Interest Option based upon the LIBOR Rate shall be
suspended, and (ii) Maker shall covert each LIBOR Balance into the Floating
Base Rate Balance in accordance with the provisions hereof on the last day of
the then-current LIBOR Interest Period applicable to such LIBOR Balance.
(b) Illegality. If the adoption of any applicable law,
rule or regulation, or any change therein, or any change in the interpretation
or administration thereof by any governmental authority, central bank or
comparable agency charged with the interpretation or administration thereof, or
compliance by Payee with any request or directive (whether or not having the
force of law) of any such authority, central bank or comparable agency shall
make it unlawful or impossible for Payee to make or maintain a LIBOR Balance,
Payee shall so notify Maker. Upon receipt of such notice, Maker shall convert
such LIBOR Balance into the Floating Base Rate Balance, on either (i) the last
day of the then-current LIBOR Interest Period applicable to such LIBOR Balance
if Payee may lawfully continue to maintain and fund such LIBOR Balance to such
day, or (ii) immediately, if Payee may not lawfully continue to maintain such
LIBOR Balance to such day.
(c) Increased Costs for LIBOR Balances. If
(i) (A) the adoption of any applicable law, rule
or regulation, or any change therein, or any change in the interpretation or
administration thereof by any governmental authority, central bank or
comparable agency charged with the interpretation or administration thereof, or
compliance by Payee with any request or directive (whether or not having the
force of law) of any such authority, central bank or comparable agency shall
subject Payee to any tax (including without limitation any United States
interest equalization or similar tax, however named), duty or other charge with
respect to the LIBOR Balances, this Note or Payee's obligation to compute
interest on the principal balance of this Note at a rate based upon the LIBOR
Rate, or shall change the basis of taxation of payments to Payee of the
principal of or interest on the LIBOR Balances or any other amounts due under
this Note in respect of the LIBOR Balances or Payee's obligation to compute the
interest on the balance of this Note at a rate based upon the LIBOR Rate
(except for changes in the rate of the tax on the overall net income of Payee
imposed by the jurisdiction in which Xxxxx's principal executive office is
located); or
REVOLVING CREDIT NOTE - Page 7
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(B) any governmental authority, central bank or
other comparable authority shall at any time impose, modify or deem applicable
any reserve (including, without limitation, any imposed by the Board of
Governors of the Federal Reserve System but excluding any reserve requirement
included in the LIBOR Reserve Requirement of Payee), special deposit or similar
requirement against assets of, deposits with or for the account of, or credit
extended by, Payee, or shall impose on Payee (or its LIBOR lending office) or
the interbank LIBOR market any other condition affecting a LIBOR Balance, this
Note or Payee's obligation to compute the interest on the balance of this Note
at a rate based upon the LIBOR Rate; and
(ii) the result of any of the foregoing is to
increase the cost to Payee of maintaining a LIBOR Balance, or to reduce the
amount of any sum received or receivable by Payee under this Note by an amount
deemed by Payee to be material, then upon demand by Payee, Maker shall pay to
Payee such additional amount or amounts as will compensate Payee for such
increased cost or reduction. Payee will promptly notify Maker of any event of
which it has knowledge, occurring after the date hereof, which will entitle
Payee to compensation pursuant to this paragraph. A certificate of Payee
claiming compensation under this paragraph and setting forth the additional
amount or amounts to be paid to Payee hereunder shall be conclusive in the
absence of manifest error.
(d) Effect on Balances. If notice has been given
requiring a LIBOR Balance to be repaid or converted, then unless and until
Payee notifies Maker that the circumstances giving rise to such repayment no
longer apply, the Interest Option shall be a rate based upon the Floating Base
Rate. If Xxxxx notifies Maker that the circumstances giving rise to such
repayment no longer apply, Maker may thereafter select a rate based upon the
LIBOR Rate in accordance with the terms of this Note.
8. Extension, Place and Application of Payments. Subject to the
terms of the definition of LIBOR Interest Period, should the principal of, or
any interest on, this Note become due and payable on any day other than a
Business Day, the maturity thereof shall be extended to the next succeeding
Business Day, and interest shall be payable with respect to such extension,
provided, however, that if the maturity of this Note on the Maturity Date or on
an earlier date due to an acceleration pursuant to PARAGRAPH 13 hereof is on a
day other than a Business Day, all outstanding principal and interest shall be
due and payable on the immediately preceding Business Day. All payments of
principal of, and interest on, this Note shall be made by Maker to Payee at
Payee's principal banking office in Dallas, Texas in federal or other
immediately available funds. Payments made to Payee by Maker hereunder shall
be applied first to accrued interest and then to principal.
9. Prepayments; Consequential Loss. Any prepayment made
hereunder shall be made together with interest accrued through the date of such
prepayment. Prepayments shall be applied first, to the Floating Base Rate
Balance together with interest accrued thereon, and second to LIBOR Balances,
together with the interest accrued thereon and Consequential Loss, if any. If
any portion of the principal hereof is bearing interest at a rate based upon
the LIBOR Rate and Maker makes any payment of principal on this Note in an
amount in excess of the Floating Base
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Rate Balance, Maker shall reimburse Payee on demand for the Consequential Loss
incurred by Payee as a result of the timing of such payment. Reference is made
to the Loan Agreement which, among other things, contains provisions regarding
optional and mandatory prepayments.
10. Notices. All notices required or permitted hereunder shall be
in writing, and given in the manner and addressed to the Maker and Payee at the
addresses set forth in the Loan Agreement, or at such other address as such
party may from time to time designate by written notice to the other.
11. Legal Fees. If this Note is placed in the hands of any
attorney for collection, or if it is collected through any legal proceeding at
law or in equity or in bankruptcy, receivership or other court proceedings,
Maker agrees to pay all costs of collection including, but not limited to,
court costs and attorneys' fees.
12. Waivers. Maker and each surety, endorser, guarantor and other
party ever liable for payment of any sums of money payable on this Note,
jointly and severally waive presentment and demand for payment, protest, notice
of protest, intention to accelerate, acceleration and non-payment, or other
notice of default, and agree that their liability under this Note shall not be
affected by any renewal or extension in the time of payment hereof, or in any
indulgences, or by any release or change in any security for the payment of
this Note, and hereby consent to any and all renewals, extensions, indulgences,
releases or changes, regardless of the number of such renewals, extensions,
indulgences, releases or changes.
No waiver by Payee of any of its rights or remedies hereunder or under
any other document evidencing or securing this Note or otherwise shall be
considered a waiver of any other subsequent right or remedy of Payee; no delay
or omission in the exercise or enforcement by Payee of any rights or remedies
shall ever be construed as a waiver of any right or remedy of Payee; and no
exercise or enforcement of any such rights or remedies shall ever be held to
exhaust any right or remedy of Payee.
13. Acceleration. Upon the occurrence of any Event of Default,
the holder hereof may, at its option, declare the entire unpaid balance of
principal and accrued interest on this Note to be immediately due and payable,
without notice of any kind as provided in PARAGRAPH 12 hereof.
14. Spreading. Any provision herein, or in any document securing
this Note, or any other document executed or delivered in connection herewith,
or in any other agreement or commitment, whether written or oral, expressed or
implied, to the contrary notwithstanding, neither Payee nor any holder hereof
shall in any event be entitled to receive or collect, nor shall or may amounts
received hereunder be credited, so that Payee or any holder hereof shall be
paid, as interest, a sum greater than the maximum amount permitted by
applicable law to be charged to the person, partnership, firm or corporation
primarily obligated to pay this Note at the time in question. If any
construction of this Note or any document securing this Note, or any and all
other papers, agreements or commitments, indicate a different right given to
Payee or any holder hereof to ask for, demand or receive any larger sum as
interest, such is a mistake in calculation or
REVOLVING CREDIT NOTE - Page 9
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wording which this clause shall override and control, it being the intention of
the parties that this Note, and all other instruments securing the payment of
this Note or executed or delivered in connection herewith shall in all things
comply with applicable law and proper adjustments shall automatically be made
accordingly. In the event that Payee or any holder hereof ever receives,
collects or applies as interest, any sum in excess of the Maximum Rate, if any,
such excess amount shall be applied to the reduction of the unpaid principal
balance of this Note, and if this Note is paid in full, any remaining excess
shall be paid to Maker. In determining whether or not the interest paid or
payable, under any specific contingency, exceeds the Maximum Rate, if any,
Maker and Payee or any holder hereof shall, to the maximum extent permitted
under applicable law: (i) characterize any nonprincipal payment as an expense
or fee rather than as interest, (ii) exclude voluntary prepayments and the
effects thereof, (iii) "spread" the total amount of interest throughout the
entire term of this Note; provided that if this Note is paid and performed in
full prior to the end of the full contemplated term hereof, and if the interest
received for the actual period of existence thereof exceeds the Maximum Rate,
if any, Payee or any holder hereof shall refund to Maker the amount of such
excess, or credit the amount of such excess against the aggregate unpaid
principal balance of all advances made by the Payee or any holder hereof under
this Note at the time in question.
15. CHOICE OF LAW. THIS NOTE IS BEING EXECUTED AND DELIVERED, AND
IS INTENDED TO BE PERFORMED IN THE STATE OF TEXAS. EXCEPT TO THE EXTENT THAT
THE LAWS OF THE UNITED STATES MAY APPLY TO THE TERMS HEREOF, THE SUBSTANTIVE
LAWS OF THE STATE OF TEXAS SHALL GOVERN THE VALIDITY, CONSTRUCTION, ENFORCEMENT
AND INTERPRETATION OF THIS NOTE, WITHOUT REGARDS TO THE PRINCIPLES OF CONFLICTS
OF LAW. IN THE EVENT OF A DISPUTE INVOLVING THIS NOTE OR ANY OTHER INSTRUMENTS
EXECUTED IN CONNECTION HEREWITH, THE UNDERSIGNED IRREVOCABLY AGREES THAT VENUE
FOR SUCH DISPUTE SHALL LIE IN ANY COURT OF COMPETENT JURISDICTION IN DALLAS
COUNTY, TEXAS.
16. Loan Agreement. This Note is executed in connection with the
Loan Agreement, and the holder hereof is entitled to all the benefits provided
therein and in the other Loan Documents.
17. Amendment and Restatement. This Note is a modification,
amendment and restatement, and not a novation or extinguishment, of that
certain Revolving Credit Note (the "Prior Note") dated September 29, 1995,
executed by Maker and payable to the order of Payee, in the original principal
amount of $11,000,000. All rights, titles, liens and security interests
securing the Prior Note are preserved, maintained and carried forward to secure
this Note.
18. NOTICE OF FINAL AGREEMENT. THIS WRITTEN REVOLVING CREDIT NOTE
AND ANY OTHER DOCUMENTS EXECUTED IN CONNECTION XXXXXXXX REPRESENT THE FINAL
AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
REVOLVING CREDIT NOTE - Page 10
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CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO
UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
HORIZON HEALTH CORPORATION,
formerly known as
HORIZON MENTAL HEALTH
MANAGEMENT, INC., a Delaware
corporation
By: /s/ XXXXX X. XXXXXX
-----------------------------------
Xxxxx X. XxXxxx
Executive Vice President and Secretary
HORIZON MENTAL HEALTH
MANAGEMENT, INC., a Texas
corporation
By: /s/ XXXXX X. XXXXXX
-----------------------------------
Xxxxx X. XxXxxx
Senior Vice President and Secretary
MENTAL HEALTH OUTCOMES, INC., a
Delaware corporation
By: /s/ XXXXX X. XXXXXX
-----------------------------------
Xxxxx X. XxXxxx
Executive Vice President, Secretary
and Treasurer
REVOLVING CREDIT NOTE - Page 11
