$10,000,000.00
LOAN AND SECURITY AGREEMENT
by and among
NEWCARE HEALTH CORPORATION
NEWCARE, INC.
OAK MANOR NURSING HOME, LTD.
HEALTHCARE FACILITIES LIMITED PARTNERSHIP I
SUNCOAST NURSING HOME, LTD.
XXXXXXXX XXXXXX NURSING HOME, LTD.
CENTRAL TAMPA NURSING HOME, LTD.
MEMORIAL NURSING CENTER, INC.
CIMERRON HEALTH CARE, INC.
XXXXXXXXXX HEALTHCARE, INC.
XXXXXXXXXX NURSING CENTER, INC.
FORT VALLEY NURSING CENTER, INC.
WINDWARD NURSING CENTER, INC.
KMH ENTERPRISES, INC.
WHIGHAM HEALTH & REHABILITATION, INC.
(individually, "Borrower" and collectively, "Borrowers" )
and
HCFP FUNDING, INC.
("Lender")
June 30, 1997
LOAN AND SECURITY AGREEMENT
THIS LOAN AND SECURITY AGREEMENT (the "Agreement") is made as of this
30th
day of June, 1997, by and among NEWCARE HEALTH CORPORATION, a Nevada
corporation, NEWCARE, INC., a Florida corporation, OAK MANOR NURSING HOME,
LTD., a Florida limited partnership, HEALTHCARE FACILITIES LIMITED
PARTNERSHIP I, a Louisiana limited partnership, SUNCOAST NURSING HOME, LTD.,
a Florida limited partnership, XXXXXXXX XXXXXX NURSING HOME, LTD., a Florida
limited partnership, CENTRAL TAMPA NURSING HOME, LTD., a Florida limited
partnership, MEMORIAL NURSING CENTER, INC., a Georgia corporation, CIMERRON
HEALTH CARE, INC., a Georgia corporation, XXXXXXXXXX HEALTHCARE, INC., a
Georgia corporation, XXXXXXXXXX NURSING CENTER,
INC., a Georgia corporation, FORT VALLEY NURSING CENTER, INC., a Georgia
corporation, WINDWARD NURSING CENTER, INC., a Georgia corporation, KMH
ENTERPRISES, INC., a Georgia corporation and WHIGHAM HEALTH & REHABILITATION,
INC., a Georgia corporation (collectively, "Borrowers" and individually, a
"Borrower" ), and HCFP FUNDING, INC., a Delaware corporation ("Lender").
RECITALS
A. Borrowers desire to establish certain financing arrangements with and
borrow funds from Lender, and Lender is willing to establish such arrangements
for and make loans and extensions of credit to Borrowers, on the terms and
conditions set forth below.
B. The parties desire to define the terms and conditions of their
relationship and to reduce their agreements to writing.
NOW, THEREFORE, in consideration of the promises and covenants contained
in this Agreement, and for other consideration, the receipt and sufficiency of
which are acknowledged, the parties agree as follows:
ARTICLE I
DEFINITIONS
As used in this Agreement, the following terms shall have the following
meanings:
Section 1.1. Account. "Account" means any right to payment for goods sold
or leased or services rendered, whether or not evidenced by an instrument or
chattel paper, and whether or not earned by performance.
Section 1.2. Account Debtor. "Account Debtor" means any Person obligated
on any Account of a Borrower, including without limitation, any Insurer and
any
Medicaid/Medicare Account Debtor.
Section 1.3. Affiliate. "Affiliate" means, with respect to a specified
Person, any Person directly or indirectly controlling, controlled by, or under
common control with the specified Person, including without limitation their
stockholders and any Affiliates thereof. A Person shall be deemed to control a
corporation or other entity if the Person possesses, directly or indirectly,
the
power to direct or cause the direction of the management and business of the
corporation or other entity, whether through the ownership of voting
securities,
by contract, or otherwise.
Section 1.4. Agreement. "Agreement" means this Loan and Security
Agreement,
as it may be amended or supplemented from time to time.
Section 1.5. Base Rate. "Base Rate" means a rate of interest equal to two
percent (2.0%) above the "Prime Rate of Interest".
Section 1.6. Borrowed Money. "Borrowed Money" means any obligation to
repay
money, any indebtedness evidenced by notes, bonds, debentures or similar
obligations, any obligation under a conditional sale or other title retention
agreement and the net aggregate rentals under any lease which under GAAP would
be capitalized on the books of a Borrower or which is the substantial
equivalent
of the financing of the property so leased.
Section 1.7. Borrower. "Borrower" and "Borrowers" have the meaning set
forth in the Preamble.
Section 1.8. Borrowing Base. "Borrowing Base" has the meaning set forth
in
Section 2.1(d).
Section 1.9. Business Day. "Business Day" means any day on which
financial
institutions are open for business in the States of Maryland and Georgia,
excluding Saturdays and Sundays.
Section 1.10. Closing: Closing Date. "Closing" and "Closing Date" have
the
meanings set forth in Section 5.3.
Section 1.11. Collateral. "Collateral" has the meaning set forth in
Section
3.1.
Section 1.12. Commitment Fee. "Commitment Fee" has the meaning set forth
in Section 2.4(a).
Section 1.13. Concentration Account. "Concentration Account" has the
meaning set forth in Section 2.3(a).
Section 1.14. Controlled Group. "Controlled Group" means a "controlled
group" within the meaning of Section 4001 (b) of ERISA.
Section 1.15. Intentionally Deleted.
Section 1.16. Default Rate. "Default Rate" means a rate per annum equal
to
three percent (3%) above the then applicable Base Rate.
Section 1.17. ERISA. "ERISA" has the meaning set forth in Section 4.12.
Section 1.18. Event of Default. "Event of Default" and "Events of
Default"
have the meanings set forth in Section 8.1 (a), subject to the additional
provisions of Section 8.1 (b) regarding "Limited Events of Default."
Section 1.19. GAAP. "GAAP" means generally accepted accounting principles
applied in a matter consistent with the financial statements referred to in
Section 4.7.
Section 1.20. Governmental Authority. "Governmental Authority" means and
includes any federal, state, District of Columbia, county, municipal, or other
government and any department, commission, board, bureau, agency or
instrumentality thereof, whether domestic or foreign.
Section 1.21. Hazardous Material. "Hazardous Material" means any
substances
defined or designated as hazardous or toxic waste, hazardous or toxic
material,
hazardous or toxic substance, or similar term, by any environmental statute,
rule or regulation or any Governmental Authority.
Section 1.22. Highest Lawful Rate. "Highest Lawful Rate" means the
maximum
lawful rate of interest referred to in Section 2.7 that may accrue pursuant to
this Agreement.
Section 1.23. Insurer. "Insurer" means a Person that insures a Patient
against certain of the costs incurred in the receipt by such Patient of
Medical
Services, or that has an agreement with a Borrower to compensate such Borrower
for providing services to a Patient.
Section 1.23. A. Leases and Rents. "Leases and Rents" shall mean all
rents,
revenues, issues and profits payable to a Borrower with respect to its
ownership
of real property, all lease, occupancy or similar agreements relating to real
property owned by a Borrower and any contract for the sale, exchange or other
disposition of any such real property, and all books and records of a Borrower
relating to any of the foregoing.
Section 1.24. Lender. "Lender" has the meaning set forth in the Preamble.
Section 1.24 A. Limited Event of Default. "Limited Event of Default" has
the meaning set forth in Section 8.1 (b).
Section 1.25. Loan. "Loan" has the meaning set forth in Section 2.1 (a).
Section 1.26. Loan Documents. "Loan Documents" means and includes this
Agreement, the Note, and each and every other document now or hereafter
delivered in connection therewith, as any of them may be amended, modified,
or supplemented from time to time.
Section 1.27. Loan Management Fee. "Loan Management Fee" has the meaning
set forth in Section 2.4(c).
Section 1.28. Lockbox. "Lockbox" has the meaning set forth in Section
2.3.
Section 1.29. Lockbox Bank. "Lockbox Bank" has the meaning set forth in
Section 2.3.
Section 1.30. Maximum Loan Amount. "Maximum Loan Amount" has the meaning
set forth in Section 2.1 (a).
Section 1.31. Medicaid/Medicare Account Debtor. "Medicaid/ Medicare
Account
Debtor" means any Account Debtor which is (i) the United States of America
acting under the Medicaid/Medicare program established pursuant to the Social
Security Act, (ii) any state or the District of Columbia acting pursuant to a
health plan adopted pursuant to Title XIX of the Social Security Act or (iii)
any agent, carrier, administrator or intermediary for any of the foregoing.
Section 1.32. Medical Services. Medical and health care services provided
to a Patient, including, but not limited to, medical and health care services
provided to a Patient and performed by a Borrower which are covered by a
policy
of insurance issued by an Insurer, and includes physician services, nurse and
therapist services, dental services, hospital services, skilled nursing
facility
services, comprehensive outpatient rehabilitation services, home health care
services, residential and out-patient behavioral healthcare services, and
medicine or health care equipment provided by a Borrower to a Patient for a
necessary or specifically requested valid and proper medical or health
purpose.
Section 1.33. Note. "Note" has the meaning set forth in Section 2.1 (c).
Section 1.34. Obligations. "Obligations" has the meaning set forth in
Section 3.1.
Section 1.35. Patient. "Patient" means any Person receiving Medical
Services from a Borrower and all Persons legally liable to pay such Borrower
for
such Medical Services other than Insurers.
Section 1.36. Permitted Liens. "Permitted Liens" means: (a) any and all
liens, claims and encumbrances whatsoever, so long as the same do not attach
to
any portion of the Collateral, (b)statutory and contractual liens of
depository
institutions against depository accounts included within the Collateral for
unpaid fees, charges and expenses, so long as a Borrower does not have an
outstanding loan or credit facility with such depository institution and (c)
liens listed on Schedule l lA hereto,
Section 1.37. Person. "Person" means an individual, partnership,
corporation, trust, joint venture, joint stock company, limited liability
company, association, unincorporated organization, Governmental Authority, or
any other entity.
Section 1.38. Plan. "Plan" has the meaning set forth in Section 4.12.
Section 1.39. Premises. "Premises" has the meaning set forth in Section
4.14.
Section 1.40. Prime Rate of Interest. "Prime Rate of Interest" means that
rate of interest designated as such by Fleet National Bank of Connecticut,
N.A.,
or any successor thereto, as the same may from time to time fluctuate.
Section 1.41. Prohibited Transaction. "Prohibited Transaction" means a
"prohibited transaction" within the meaning of Section 406 of ERISA or Section
4975(c)(1) of the Internal Revenue Code.
Section 1.42. Qualified Account. "Qualified Account" means an Account of
a Borrower generated in the ordinary course of such Borrower's business from
the
sale of goods or rendition of medical services; provided, however, that no
Account shall be a Qualified Account if: (a) the Account or any portion
thereof
is payable by an individual beneficiary, recipient or subscriber individually
and not directly to a Borrower by a Medicaid/Medicare Account Debtor or
commercial medical insurance carrier acceptable to Lender in its sole
discretion; (b) the Account remains unpaid more than sixty (60) days past the
claim or invoice date, or one hundred twenty (120) days past the claim or
invoice date in the case only of Georgia Medicaid Account Debtors (provided,
however, that with respect to Georgia Medicaid Qualified Accounts no more
than fifteen percent (15%) of such Georgia Medicaid Qualified Accounts at
any time shall be between sixty-one (61) and ninety (90) days past the claim
or invoice date, and no more than ten percent (10%) of such Georgia Medicaid
Qualified Accounts at any time shall be between ninety-one (91) and one
hundred twenty (120) days past the claim or invoice date; (c) the Account is
subject to any defense, set-off, counterclaim, deduction, discount, credit,
chargeback, freight claim, allowance, or adjustment of any kind; (d) any part
of any goods the sale of which has given rise to the Account has been
returned, rejected, lost, or damaged; (e) if the Account arises from the
sale of goods by a Borrower, such sale was not an absolute sale or on
consignment or on approval or on a sale-or-return basis or subject to any
other repurchase or return agreement, or such goods have not been shipped to
the Account Debtor or its designee; (f) if the Account arises from the
performance of services, such services have not been actually been performed
or were undertaken in violation of any law (it may be acknowledged and agreed
that accounts payable by Florida Medicaid and all Medicare Account Debtors
shall be deemed Qualified Accounts prior to billing once the applicable
Medicare Services have been performed and/or goods have been delivered); (g)
the Account is subject to a lien other than a Permitted Lien; (h) a Borrower
knows or should reasonably have known of the bankruptcy, receivership,
reorganization, or insolvency of the Account Debtor; (i) the Account is
evidenced by chattel paper or an instrument of any kind, or has been reduced
to judgment; G) the Account is an Account of an Account Debtor having its
principal place of business or executive office outside the United States;
(k) the Account Debtor is an Affiliate or Subsidiary of a Borrower; (l) more
than ten percent (10%) of the aggregate balance of all Accounts owing from
the Account Debtor, except for a Medicare/Medicaid Account Debtor, obligated
on
the Account (excluding any Medicaid/Medicare Account Debtor) are outstanding
more than one hundred fifty (150) days past their invoice date; (m) fifty
percent (50%) or more of the aggregate unpaid Accounts from any individual
Account Debtor except for a Medicare/Medicaid Account Debtor, are not deemed
Qualified Accounts hereunder; (n) the total unpaid Accounts of the Account
Debtor, except for a Medicaid/Medicare Account Debtor, exceed twenty percent
(20%) of the net amount of all Qualified Accounts (including Medicaid/
Medicare Account Debtors); (o) any covenant, representation or warranty
contained in the Loan Documents with respect to such Account has been
breached; (p) the Account fails to meet such other reasonable specifications
and requirements which may from time to time be established by Lender upon
not less than ninety (90) days prior written notice to Borrowers, or (q) the
Account ceases to be a Qualified Account pursuant to Section 8.2 (a) hereof.
Section 1.43. Reportable Event. "Reportable Event" means a "reportable
event" as defined in Section 4043(b) of ERISA.
Section 1.44. Revolving Credit Loan. "Revolving Credit Loan" has the
meaning set forth in Section 2.1 (b).
Section 1.45. Term. "Term" has the meaning set forth in Section 2.8.
ARTICLE II
LOAN
Section 2.1. Terms.
(a) The maximum aggregate principal amount of credit extended by Lender
to
Borrowers hereunder (the ''Loan") that will be outstanding at any time is Ten
Million and No/100 Dollars ($10,000 000.00) (the "Maximum Loan Amount").
(b) The Loan shall be in the nature of a revolving line of credit, and
shall include sums advanced and other credit extended by Lender to or for the
benefit of Borrowers from time to time under this Article II (each a
"Revolving
Credit Loan") up to the Maximum Loan Amount depending upon the availability in
the Borrowing Base, the requests of Borrower pursuant to the terms and
conditions of Section 2.2 below, and on such other basis as Lender may
reasonably determine. The outstanding principal balance of the Loan may
fluctuate from time to time, to be reduced by repayments made by Borrowers
(which may be made without penalty or premium), and to be increased by future
Revolving Credit Loans, advances and other extensions of credit to or for the
benefit of Borrowers, and shall be due and payable in full upon the
expiration of the Term. For purposes of this Agreement, any determination as
to whether there is ability within the Borrowing Base for advances or
extensions of credit shall be made by Lender in its sole discretion and is
final and binding upon Borrowers.
(c) At Closing, Borrowers shall execute and deliver to Lender a
promissory
note evidencing Borrowers' unconditional obligation to repay Lender for
Revolving Credit Loans, advances, and other extensions of credit made under
the Loan, in the form of Exhibit A to this Agreement (the "Note"), dated the
date hereof, payable to the order of Lender in accordance with the terms
thereof. The Note shall bear interest from the date thereof until repaid,
with interest payable monthly in arrears on the first Business Day of each
month, at a rate per annum (on the basis of the actual number of days
elapsed over a year of 360 days) equal to the Base Rate, provided that after
the occurrence and during the continuance of an Event of Default (but not a
Limited Event of Default) such rate shall be equal to the Default Rate. Each
Revolving Credit Loan, advance and other extension of credit shall be deemed
evidenced by the Note, which is deemed incorporated by reference herein and
made a part hereof.
(d) Subject to the terms and conditions of this Agreement, advances under
the Loan shall be made against a borrowing base equal to eighty percent (80%)
of
Qualified Accounts due and owing from any Medicaid/Medicare Account Debtor,
Insurer or other Account Debtor (the "Borrowing Base").
Section 2.2. Loan Administration. Borrowings under the Loan shall be as
follows:
(a) A request for a Revolving Credit Loan shall be made, or shall be
deemed
to be made, in the following manner: (i) Borrowers may give Lender notice of
their intention to borrow, in which notice Borrowers shall specify the amount
of
the proposed borrowing and the proposed borrowing date, not later than 5:00
p.m.
Eastern time one (1) Business Day prior to the proposed borrowing date;
provided, however, that no such request may be made at a time when there
exists an Event of Default (other than a Limited Event of Default); and (ii)
the becoming due of any amount required to be paid under this Agreement,
whether as interest or for any other Obligation, shall be deemed irrevocably
to be a request for a Revolving Credit Loan on the due date in the amount
required to pay such interest or other Obligation. With respect to any
request for a Revolving Credit Loan which is made not later than 10:30 a.m.
Eastern time, Lender shall use its best efforts to advance proceeds of such
Revolving Credit Loan by 4:00 p.m. on the same Business Day.
(b) Borrowers hereby irrevocably authorize Lender to disburse the
proceeds
of each Revolving Credit Loan requested, or deemed to be requested, as
follows:
(i) the proceeds of each Revolving Credit Loan requested under subsection
2.2(a)(i) shall be disbursed by Lender by wire transfer to such bank account
as
may be agreed upon by Borrowers or Lender from time to time or elsewhere if
pursuant to written direction from Borrowers; and (ii) the proceeds of each
Revolving Credit Loan requested under subsection 2.2(a)(ii) shall be disbursed
by Lender by way of direct payment of the relevant interest or other
Obligation.
(c) All Revolving Credit Loans, advances and other extensions of credit
to
or for the benefit of Borrowers shall constitute one general Obligation of
Borrowers, and shall be secured by Lender's lien upon all of the Collateral.
(d) Lender shall enter all Revolving Credit Loans as debits to a loan
account in the name of Borrowers and shall also record in said loan account
all
payments made by Borrowers on any Obligations and all proceeds of Collateral
which are indefeasibly paid to Lender, and may record therein, in accordance
with customary accounting practice, other debits and credits, including
interest and
all charges and expenses properly chargeable to Borrowers.
(e) Lender will account to Borrowers monthly with a statement of
Revolving
Credit Loans, charges and payments made pursuant to this Agreement, and such
account rendered by Lender shall be deemed final, binding and conclusive upon
Borrowers absent manifest error.
Section 2.3. Collections. Disbursements, Borrowing Availability, and
Lockbox Account. Borrowers shall maintain a lockbox account (the "Lockbox")
with
Fidelity National Bank, Atlanta, Georgia (the "Lockbox Bank"), subject to the
provisions of this Agreement, and shall execute with the Lockbox Bank a
Lockbox
Agreement in the form attached as Exhibit B, and such other agreements related
thereto as Lender may require. Each Borrower shall ensure that all collections
of Accounts are paid directly from Account Debtors into the Lockbox, and that
all funds paid into the Lockbox are immediately transferred into a depository
account maintained by Lender at Bank One Arizona, N.A. or First Bank, N.A.,
as determined by Lender in its sole discretion and communicated to Borrower
(the "Concentration Account"). Lender shall apply, on a daily basis, all
funds transferred into the Concentration Account pursuant to this Section
2.3 to reduce the outstanding indebtedness under the Loan with future
Revolving Credit Loans, advances and other extensions of credit to be made
by Lender under the conditions set forth in this Article II. To the extent
that any collections of Accounts or proceeds of other Collateral are not
sent directly to the Lockbox but are received by a Borrower, such collections
shall be held in trust for the benefit of Lender and immediately remitted, in
the form received, to the Lockbox Bank for transfer to
the Concentration Account immediately upon receipt by such Borrower. Each
Borrower acknowledges and agrees that its compliance with the terms of this
Section 2.3 is essential, and that upon its failure to comply with any such
terms Lender shall be entitled to assess a non-compliance fee which shall
operate to increase the Base Rate by two percent (2%) per annum during any
period of non-compliance. Lender shall be entitled to assess such fee whether
or not an Event of Default is declared or otherwise occurs. All funds
transferred from the Concentration Account for application to Borrowers'
indebtedness to Lender shall be applied to reduce the Loan balance but for
purposes of calculating interest shall be subject to a three (3) Business
Day clearance period. If as the result of collections of Accounts pursuant
to the terms and conditions of this Section 2.3 a credit balance exists with
respect to the Concentration Account, such credit balance shall not accrue
interest in favor of Borrowers, but shall be available to Borrowers at any
time or times for so long as no Event of Default (other than a Limited Event
of Default) exists.
Section 2.4. Fees.
(a) Borrowers shall pay to Lender a commitment fee (the "Commitment Fee")
equal to one percent (1.0%) of the Maximum Loan Amount, which commitment fee
shall be payable in installments as set forth below if, as and when aggregate
outstanding Revolving Credit Loans first exceed the following thresholds:
Outstanding Revolving Credit Loans Portion of Commitment Fee Due
$0 to $3,000,000 $30,000 (payable at Closing)
$3,000,001 to $5,000,000 Additional $20,000
$5,000,001 to $7,000,000 Additional $20,000
$7,000,001 to $10,000,000 Additional $30,000
(b) For so long as the Loan is available to Borrowers, Borrowers
unconditionally shall pay to Lender a monthly usage fee (the "Usage Fee")
equal
to one twelfth (1/12th) of one percent (1.0%) of the average amount by which
one
third (1/3) of the then applicable Borrowing Base exceeds the average amount
of
the outstanding principal balance of the Revolving Credit Loans during the
preceding month. The Usage Fee shall be payable monthly in arrears on the
first
Business Day of each successive calendar month.
(c) For so long as the Loan is available to Borrowers, Borrowers
unconditionally shall pay to Lender a monthly loan management fee (the "Loan
Management Fee") equal to two tenths of one percent (0.20%) of the average
amount of the outstanding principal balance of the Revolving Credit Loans
during the preceding month. The Loan Management Fee shall be payable monthly
in arrears on the first day of each successive calendar month.
(d) Within 30 days after demand by Lender, Borrowers shall pay to Lender
all audit and appraisal fees in connection with audits and appraisals of any
Borrower's books and records and such other matters as Lender shall deem
appropriate; provided, however, that absent the occurrence of an Event of
Default (other than a Limited Event of Default) such fees shall not exceed
Ten Thousand and No/100 Dollars ($10,000.00) in any twelve month period until
the number of nursing homes or other facilities being financed under this
Agreement exceeds twenty (20), at which time the parties shall in good faith
agree upon a revised, increased annual cap.
(e) Borrowers shall pay to Lender, on demand, any and all fees, costs or
expenses which Lender or any participant pays to a bank or other similar
institution (including, without limitation, any fees paid by Lender to any
participant) arising out of or in connection with (i) the forwarding to
Borrowers or any other Person on behalf of Borrowers, by Lender, of proceeds
of Revolving Credit Loans made by Lender to Borrowers pursuant to this
Agreement, and (ii) the depositing for collection, by Lender or any
participant, of any check or item of payment received or delivered to Lender
or any participant on account of Obligations.
Section 2.5. Payments. Principal payable on account of Revolving Credit
Loans shall be payable by Borrowers to Lender immediately upon the earliest of
(i) the receipt by any Borrower of any proceeds of any of the Collateral, to
the
extent of such proceeds, (ii) the occurrence of an Event of Default in
consequence of which the Loan and the maturity of the payment of the
Obligations
are accelerated, or (iii) the termination of this Agreement pursuant to
Section
2.8 hereof; provided, however, that if any advance made by Lender in excess of
the Borrowing Base shall exist at any time, Borrowers shall, immediately upon
demand, repay such over advance. Interest accrued on the Revolving Credit
Loans
shall be due on the earliest of (i) the first Business Day of each month
(for the immediately preceding month), computed on the last calendar day of
the preceding month, (ii) the occurrence of an Event of Default in
consequence of which the Loan and the maturity of the payment of the
Obligations are accelerated, or (iii) the termination of this Agreement
pursuant to Section 2.8 hereof. Except to the extent otherwise set forth in
this Agreement, all payments of principal and of interest on the Loan, all
other charges and any other obligations of Borrowers hereunder, shall be made
to Lender to the Concentration Account, in immediately available funds.
Section 2.6. Use of Proceeds. The proceeds of Lender's advances under the
Loan shall be used solely for working capital and for other costs of Borrowers
arising in the ordinary course of Borrower's business.
Section 2.7. Interest Rate Limitation. The parties intend to conform
strictly to the applicable usury laws in effect from time to time during the
term of the Loan. Accordingly, if any transaction contemplated hereby would be
usurious under such laws, then notwithstanding any other provision hereof: (i)
the aggregate of all interest that is contracted for, charged, or received
under
this Agreement or under any other Loan Document shall not exceed the maximum
amount of interest allowed by applicable law (the "Highest Lawful Rate"), and
any excess shall be promptly credited to Borrowers by Lender (or, to the
extent that such consideration shall have been paid, such excess shall be
promptly refunded to Borrowers by Lender); (ii) neither Borrowers nor any
other Person now or hereafter liable hereunder shall be obligated to pay the
amount of such interest to the extent that it is in excess of the Highest
Lawful Rate; and (iii) the effective rate of interest shall be reduced to the
Highest Lawful Rate. All sums paid, or agreed to be paid, to Lender for the
use, forbearance, and detention of the debt of Borrowers to Lender shall, to
the extent permitted by applicable law, be allocated throughout the full term
of the Note until payment is made in full so that the actual rate of interest
does not exceed the Highest Lawful Rate in effect at any particular time
during the full term thereof. If at any time the rate of interest under the
Note exceeds the Highest Lawful Rate, the rate of interest to accrue pursuant
to this Agreement shall be limited, notwithstanding
anything to the contrary herein, to the Highest Lawful Rate, but any
subsequent
reductions in the Base Rate shall not reduce the interest to accrue pursuant
to
this Agreement below the Highest Lawful Rate until the total amount of
interest
accrued equals the amount of interest that would have accrued if a varying
rate
per annum equal to the interest rate under the Note had at all times been in
effect. If the total amount of interest paid or accrued pursuant to this
Agreement under the foregoing provisions is less than the total amount of
interest that would have accrued if a varying rate per annum equal to the
interest rate under the Note had been in effect, then Borrowers agree to pay
to
Lender an amount equal to the difference between (i) the lesser of (x) the
amount of interest that would have accrued if the Highest Lawful Rate had at
all times been in effect, or (y) the amount of interest that would have
accrued if a varying rate per annum equal to the interest rate under the Note
had at all times been in effect, and (ii) the amount of interest accrued in
accordance with the other provisions of this Agreement.
Section 2.8. Term.
(a) Subject to Lender's right to cease making Revolving Credit Loans to
Borrowers upon or after the occurrence and during the continuance of any Event
of Default (subject to Section 8.1 (b)), this Agreement shall be in effect for
a period of three (3) years from the Closing Date, unless terminated as
provided
in this Section 2.8 (the "Term"), and this Agreement shall be renewed for
one-year periods thereafter upon the mutual written agreement of the parties.
(b) Notwithstanding anything herein to the contrary, Lender may (subject
to Section 8.1 (b)) terminate this Agreement without notice upon or after the
occurrence and during the continuance of the occurrence of an Event of
Default.
(c) Upon at least thirty (30) days prior written notice to Lender,
Borrower
may terminate this Agreement prior to the third annual anniversary of the
Closing Date, provided that, at the effective date of such termination,
Borrowers shall pay to Lender (in addition to the then outstanding principal,
accrued interest and other Obligations owing under the terms of this
Agreement and any other Loan Documents) as liquidated damages for the loss of
bargain and not as a penalty, an amount equal to (i) three percent (3%) of
the Borrowing Base as in effect on the effective date of termination if the
effective date of such termination by Borrowers is on or prior to the first
annual anniversary of the Closing Date, and (ii) two percent (2%) of the
Borrowing Base as in effect on the on the effective date of termination if
the effective date of such termination by Borrowers is after the first
annual anniversary of the Closing Date and prior to the second annual
anniversary of the Closing Date, and (iii) one percent ( 1 %) of the
Borrowing Base as in effect if the effective date of such termination by
Borrowers is after the second annual anniversary and prior to the third annual
anniversary of the Closing Date.
(d) All of the Obligations shall be immediately due and payable upon the
termination date stated in any notice of termination of this Agreement. All
undertakings, agreements, covenants, warranties, and representations of
Borrowers contained in the Loan Documents shall survive any such termination
and Lender shall retain its liens in the Collateral and all of its rights and
remedies under the Loan Documents notwithstanding such termination until
Borrowers have paid the Obligations to Lender, in full, in immediately
available funds.
Section 2.9. Joint and Several Liability; Binding Obligations. Each
Borrower shall be jointly and severally liable for all of the Obligations. In
addition, each Borrower hereby acknowledges and agrees that all of the
representations, warranties, covenants, obligations, conditions, agreements
and
other terms contained in this Agreement shall be applicable to and shall be
binding upon each Borrower, and shall be binding upon all such entities when
taken together; provided, however, that such representations, warranties and
covenants shall be deemed to be made by each Borrower as to itself, but not as
to any other Borrower despite its binding nature with respect to the other
entities.
ARTICLE III
COLLATERAL
Section 3.1. Generally. As security for the payment of all liabilities of
Borrowers to Lender, including without limitation: (i) indebtedness evidenced
under the Note, repayment of Revolving Credit Loans, advances and other
extensions of credit, all fees and charges owing by Borrowers, and all other
liabilities and obligations of every kind or nature whatsoever of Borrowers to
Lender, whether now existing or hereafter incurred, joint or several, matured
or
unmatured, direct or indirect, primary or secondary, related or unrelated, due
or to become due, including but not limited to any extensions, modifications,
substitutions, increases and renewals thereof, (ii) the payment of all amounts
advanced by Lender to preserve, protect, defend, and enforce its rights
hereunder and in the following property in accordance with the terms of this
Agreement, and (iii) the payment of all expenses incurred by Lender in
connection therewith (collectively, the "Obligations"), each Borrower hereby
assigns and grants to Lender a continuing first priority lien on and security
interest in, upon, and to the following property (the "Collateral"):
(a) All of such Borrower's now-owned and hereafter acquired or arising
Accounts, accounts receivable and rights to payment of every kind and
description, and any contract rights, chattel paper, documents and instruments
with respect thereto but specifically excluding Leases and Rents;
(b) All of such Borrower's now owned and hereafter acquired or arising
general intangibles of every kind and description pertaining to its Accounts,
accounts receivable and other rights to payment, including, but not limited
to,
all existing and future customer lists, causes in action, claims, books,
records, contracts, licenses, formulae, tax and other types of refunds,
returned and unearned insurance premiums, rights and claims under insurance
policies, and computer information, software, records, and data but
specifically excluding Leases and Rents;
(c) All of such Borrower's monies and other property of every kind and
nature now or at any time or times hereafter in the possession of or under the
control of Lender or a bailee or Affiliate of Lender; and
(d) The proceeds (including, without limitation, insurance proceeds) of
all
of the foregoing.
Section 3.2. Lien Documents. At Closing and thereafter as Lender deems
necessary in its reasonable discretion, each Borrower shall execute and
deliver
to Lender, or have executed and delivered (all in form and substance
satisfactory to Lender in its sole discretion):
(a) WCC-1 Financing statements pursuant to the Uniform Commercial Code in
effect in the jurisdiction(s) in which such Borrower operates, which Lender
may
file in any jurisdiction where any Collateral is or may be located and in any
other jurisdiction that Lender deems appropriate; provided that a carbon,
photographic, or other reproduction or other copy of this Agreement or of a
financing statement is sufficient as and may be filed in lieu of a financing
statement; and
(b) Any other agreements, documents, instruments, and writings reasonably
deemed necessary by Lender or as Lender may otherwise request from time to
time
in its sole discretion to evidence, perfect, or protect Lender's lien and
security interest in the Collateral required hereunder.
Section 3.3. Collateral Administration.
(a) All Collateral (except deposit accounts) will at all times be kept by
each Borrower at its principal office(s) as set forth on Exhibit C hereto and
shall not, without the prior written approval of Lender, be moved therefrom.
(b) Each Borrower shall keep accurate and complete records of its
Accounts
and all payments and collections thereon and shall submit to Lender sales and
collections reports with respect thereto as required by Section 6.1 hereof. In
addition, if Borrower becomes aware that Accounts in an aggregate face amount
in
excess of $100,000.00 have become ineligible since the date of Borrowers' last
Borrowing Base Certificate because they fall within one of the specified
categories of ineligibility set forth in the definition of Qualified Accounts
or
otherwise, Borrower shall notify Lender of such occurrence on the first
Business
Day following Borrowers' knowledge of such occurrence and the Borrowing Base
shall thereupon be adjusted to reflect such occurrence.
(c) Whether or not an Event of Default has occurred, any of Lender's
officers, employees or agents shall have the right, at any time or times
hereafter, in the name of Lender, any designee of Lender or Borrowers, to
verify
the validity, amount or any other matter relating to any Accounts by mail,
telephone, telegraph or otherwise. Borrowers shall cooperate fully with Lender
in an effort to facilitate and promptly conclude such verification process.
(d) To expedite collection, each Borrower shall endeavor in the first
instance to make collection of its Accounts for Lender. Lender retains the
right
at all times after the occurrence of an Event of Default (other than a Limited
Event of Default), subject to applicable law regarding Medicaid/Medicare
Account
Debtors, to notify Account Debtors that Accounts have been assigned to Lender
and to collect Accounts directly in its own name and to charge the
collection costs and expenses, including attorneys' fees, to Borrowers.
Section 3.4. Other Actions. In addition to the foregoing, Borrowers (i)
shall provide prompt written notice to each private indemnity, managed care or
other Insurer who either is currently an Account Debtor or becomes an Account
Debtor at any time following the date hereof that Lender has been granted a
first priority lien and security interest in, upon and to all Accounts
applicable to such Insurer, and hereby authorizes Lender to send any and all
similar notices to such Insurers by Lender, and (ii) shall do anything
further that may be lawfully required by Lender to secure Lender and
effectuate the intentions and objects of this Agreement, including but not
limited to the execution and delivery of lockbox agreements, continuation
statements, amendments to financing statements, and any other documents
required hereunder. At Lender's request, Borrowers shall also immediately
deliver to Lender all items for which Lender must receive possession to
obtain a perfected security interest. Borrowers shall, on Lender's demand,
deliver to Lender all notes, certificates, and documents of title, chattel
paper, warehouse receipts, instruments, and any other similar
instruments constituting Collateral.
Section 3.5. Searches. Prior to Closing, and thereafter if an Event of
Default (other than a Limited Event of Default) or event which with the
passing
of time, the giving of notice or both could constitute an Event of Default
(other than a Limited Event of Default) has occurred and is continuing,
Borrowers shall obtain and deliver to Lender the following searches against
Borrowers (the results of which are to be consistent with Borrowers'
representations and warranties under this Agreement), all at its own expense:
(a) Uniform Commercial Code searches with the Secretary of State and
local
filing offices of each jurisdiction where Borrower maintains its executive
offices, a place of business, or assets;
(b) Judgment, federal tax lien and corporate and partnership tax lien
searches, in each jurisdiction searched under clause (a) above; and
(c) Good standing certificates showing Borrower to be in good standing in
its state of formation and in each other state in which it is doing and
presently intends to do business for which qualification is required.
Section 3.6. Power of Attorney. Each of the officers of Lender is hereby
irrevocably made, constituted and appointed the true and lawful attorney for
each Borrower (without requiring any of them to act as such) with full power
of
substitution to, after the occurrence and during the continuance of an Event
of
Default (other than a Limited Event of Default), do the following: (i) endorse
the name of such Borrower upon any and all checks, drafts, money orders, and
other instruments for the payment of money that are payable to such Borrower
and
constitute collections on Borrower's Accounts; (ii) execute in the name of
such
Borrower any financing statements, schedules, assignments, instruments,
documents, and statements that such Borrower is obligated to give Lender
hereunder; and (iii) do such other and further acts and deeds in the name of
Borrower that Lender may deem necessary or desirable to enforce any Account or
other Collateral or perfect Lender's security interest or lien in any
Collateral.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
Each entity comprising the Borrower represents and warrants to Lender
(with
respect to itself only, and not with respect to any other Borrower), and shall
be deemed to represent and warrant on each day on which any Obligations shall
be
outstanding hereunder, that:
Section 4.1. Subsidiaries. Except as set forth in Schedule 4.l, Borrower
has no subsidiaries.
Section 4.2. Organization and Good Standing. Borrower is a limited
partnership or corporation (as the case may be) duly organized, validly
existing, and in good standing under the laws of its state of formation, is
in good standing as a foreign limited partnership or corporation (as the
case may be) in each jurisdiction in which the character of the properties
owned or leased by it therein or the nature of its business makes such
qualification necessary, has the partnership or corporate power and
authority to own its assets and transact the business in which it is
engaged, and has obtained all certificates, licenses and qualifications
required under all laws, regulations, ordinances, or orders of public
authorities necessary for the ownership and operation of all of its
properties and transaction of all of its business.
Section 4.3. Authority. Borrower has full partnership or corporate power
and authority to enter into, execute, and deliver this Agreement and to
perform
its obligations hereunder, to borrow the Loan, to execute and deliver the
Note,
and to incur and perform the obligations provided for in the Loan Documents,
all
of which have been duly authorized by all necessary partnership or corporate
action. No consent or approval of partners or shareholders of, or lenders to,
Borrower and no consent, approval, filing or registration with any
Governmental
Authority is required as a condition to the validity of the Loan Documents
or the performance by Borrower of its obligations thereunder.
Section 4.4. Binding Agreement. This Agreement and all other Loan
Documents
constitute, and the Note, when issued and delivered pursuant hereto for value
received, will constitute, the valid and legally binding obligations of
Borrower, enforceable against Borrower in accordance with their respective
terms.
Section 4.5. Litigation. Except as disclosed in Schedule 4.5, there are
no
actions, suits, proceedings or investigations pending or threatened against
Borrower before any court or arbitrator or before or by any Governmental
Authority which, in any one case or in the aggregate, if determined adversely
to
the interests of Borrower, could have a material adverse effect on the
business,
properties, condition (financial or otherwise) or operations, present or
prospective, of Borrower, or upon its ability to perform its obligations under
the Loan Documents. Borrower is not in default with respect to any order of
any
court, arbitrator, or Governmental Authority applicable to Borrower or its
properties.
Section 4.6. No Conflicts. The execution and delivery by Borrower of this
Agreement and the other Loan Documents do not, and the performance of its
obligations thereunder will not, violate, conflict with, constitute a default
under, or result in the creation of a lien or encumbrance upon the property of
Borrower under: (i) any provision of Borrower's articles of incorporation or
bylaws, or articles of formation, certificate of limited partnership or
operating agreement (as the case may be), (ii) any provision of any law,
rule, or regulation applicable to Borrower, or (iii) any of the following:
(A) any indenture or other agreement or instrument to which Borrower is a
party or by which Borrower or its property is bound; or (B) any judgment,
order or decree of any court, arbitration tribunal, or Governmental Authority
having jurisdiction over Borrower which is applicable to Borrower.
Section 4.7. Financial Condition. The annual financial statements of
Borrower (prepared on a consolidated basis with the other Borrowers, NewCare
Health Corporation and its other controlled entities) as of December 31, 1996
audited by Xxxxx, Xxxxxxx & Xxxxxxxxx and the unaudited financial statements
of
Borrower as of March 31, 1997, certified by the chief financial officer or
general partner of Borrower (as the case may be), which have been delivered to
Lender, fairly present the financial condition of Borrower and the results of
its operations and changes in financial condition as of the dates and for the
periods referred to, and have been prepared in accordance with GAAP. There
are no material unrealized or anticipated liabilities, direct or indirect,
fixed or contingent, of Borrower as of the dates of such financial statements
which are not reflected therein or in the notes thereto. There has been no
material adverse change in the business, properties, condition (financial or
otherwise) or operations (present or prospective) of Borrower since March 31,
1997. Borrower's fiscal year ends on December 31. The federal tax
identification number of each entity comprising the Borrower is as described
on Schedule 4. 15.
Section 4.8. No Default. Borrower is not in default under or with respect
to any obligation in any respect which could be materially adverse to its
business, operations, property or financial condition, or which could
materially
and adversely affect the ability of Borrower to perform its obligations under
the Loan Documents. No Event of Default as to such Borrower or event which,
with the giving of notice or lapse of time, or both, could become an Event of
Default as to such Borrower, has occurred and is continuing.
Section 4.9. Title to Properties. Borrower has good and marketable title
to its properties and assets, including the Collateral and the properties and
assets reflected in the financial statements described in Section 4.7, subject
to no lien, mortgage, pledge, encumbrance or charge of any kind, other than
Permitted Liens. Borrower has not agreed or consented to cause any of its
properties or assets whether owned now or hereafter acquired to be subject in
the future (upon the happening of a contingency or otherwise) to any lien,
mortgage, pledge, encumbrance or charge of any kind other than Permitted
Liens.
Section 4.10. Taxes. Borrower has filed, or has obtained extensions for
the
filing of, all federal, state and other tax returns which are required to be
filed, and has paid all taxes shown as due on those returns and all
assessments,
fees and other amounts due as of the date hereof. All tax liabilities of
Borrower were, as of March 3 l, l 997 and are now, adequately provided for
on Borrower's books. No tax liability has been asserted by the Internal
Revenue Service or other taxing authority against Borrower for taxes in
excess of those already paid.
Section 4.11. Securities and Banking Laws and Regulations.
(a) The use of the proceeds of the Loan and Borrower's issuance of the
Note
will not directly or indirectly violate or result in a violation of the
Securities Act of l 933 or the Securities Exchange Act of 1934, as amended, or
any regulations issued pursuant thereto, including without limitation
Regulations U, T, G, or X of the Board of Governors of the Federal Reserve
System. Borrower is not engaged in the business of extending credit for the
purpose of the purchasing or carrying "margin stock" within the meaning of
those regulations. No part of the proceeds of the Loan hereunder will be used
to purchase or carry any margin stock or to extend credit to others for such
purpose.
(b) Borrower is not an investment company within the meaning of the
Investment Company Act of l 940, as amended, nor is it, directly or
indirectly,
controlled by or acting on behalf of any Person which is an investment company
within the meaning of that Act.
Section 4.12. ERISA. No employee benefit plan (a "Plan") subject to the
Employee Retirement Income Security Act of l 974 ("ERISA") and regulations
issued pursuant thereto that is maintained by Borrower or under which
Borrower could have any liability under ERISA (a) has failed to meet minimum
funding standards established in Section 302 of ERISA, (b) has failed to
comply with all applicable requirements of ERISA and of the Internal Revenue
Code, including all applicable rulings and regulations thereunder, (c) has
engaged in or been involved in a prohibited transaction (as defined in ERISA)
under ERISA or under the Internal Revenue Code, or (d) has been terminated.
Borrower has not assumed, or received notice of a claim asserted against
Borrower for, withdrawal liability (as defined in the Multi-Employer Pension
Plan Amendments Act of 1980, as amended) with respect to any multi-employer
pension plan and is not a member of any Controlled Group (as defined in
ERISA). Borrower has timely made when due all contributions with respect to
any multi-employer pension plan in which it participates and no event has
occurred triggering a claim against Borrower for withdrawal liability with
respect to any multi-employer pension plan in which Borrower participates.
Section 4.13. Compliance with Law. Except as described in Schedule 4.l3,
Borrower is not in violation of any statute, rule or regulation of any
Governmental Authority (including, without limitation, any statute, rule or
regulation relating to employment practices or to environmental, occupational
and health standards and controls). Borrower has obtained all licenses,
permits,
franchises, and other governmental authorizations necessary for the ownership
of
its properties and the conduct of its business. Borrower is current with all
reports and documents required to be filed with any state or federal
securities
commission or similar Governmental Authority and is in full compliance with
all
applicable rules and regulations of such commissions.
Section 4.14. Environmental Matters. To Borrower's knowledge, without
independent inquiry no use, exposure, release, generation, manufacture,
storage,
treatment, transportation or disposal of Hazardous Material has occurred or is
occurring on or from any real property on which the Collateral is located or
which is owned, leased or otherwise occupied by Borrower (the "Premises"), or
off the Premises as a result of any action of Borrower, except as described in
Schedule 4.14 or at levels that comply with applicable law.
Section 4.15. Places of Business. The only places of business of
Borrower,
and the places where it keeps and intends to keep the Collateral and records
concerning the Collateral, are at the addresses set forth in Schedule 4.l5.
Schedule 4.l5 also lists the owner of record of each such property.
Section 4.16. Intellectual Property. Borrower exclusively owns or
possesses
all the patents, patent applications, trademarks, trademark applications,
service marks, trade names, copyrights, franchises, licenses, and rights with
respect to the foregoing necessary for the present and planned future conduct
of its business, without any conflict with the rights of others. A list of
all such intellectual property (indicating the nature of Borrower's
interest), as well as all outstanding franchises and licenses given by or
held by Borrower, is attached as Schedule 4. l 6. Borrower is not in default
of any obligation or undertaking with respect to such intellectual property
or rights.
Section 4.17. Stock Ownership. The identity of the stockholders of record
of all classes of the outstanding stock of Borrower, together with the
respective ownership percentages held by such stockholders, and the
partnership company structures of each entity comprising the Borrower,
together with the partnership interests held by each partner of the limited
partnerships comprising the Borrower are as set forth on Schedule 4.l7
Section 4.18. Material Facts. Neither this Agreement nor any other Loan
Document nor any other agreement, document, certificate, or statement
furnished
to Lender by or on behalf of Borrower in connection with the transactions
contemplated hereby contains any untrue statement of material fact or omits to
state a material fact necessary in order to make the statements contained
herein
or therein not misleading. There is no fact known to Borrower that materially
and adversely affects or in the future may materially and adversely affect the
business, operations. affairs or financial condition of Borrower, or any of
its
properties or assets.
Section 4.19. Investments. Guarantees, and Certain Contracts. Borrower is
not a party to any contract or agreement, or subject to any partnership or
corporate restriction, which materially and adversely affects its business.
Section 4.20. Intentionally Deleted.
Section 4.21. Names. Within five years prior to the date hereof, Borrower
has not conducted business under or used any other name (whether corporate,
partnership or assumed) other than as shown on Schedule 4.2 l . Borrower is
the
sole owner of all names listed on that Schedule and any and all business done
and invoices issued in such names are Borrower's sales, business, and
invoices.
Each trade name of Borrower represents a division or trading style of Borrower
and not a separate Person or independent Affiliate.
Section 4.22 Intentionally Deleted.
Section 4.23 Accounts. Lender may rely, in determining which Accounts are
Qualified Accounts, on all statements and representations made by Borrower
with
respect to any Account or Accounts. Unless otherwise indicated in writing to
Lender, with respect to each Account:
(a) It is genuine and in all respects what it purports to be, and is not
evidenced by a judgment;
(b) It arises out of a completed, bona fide sale and delivery of goods or
rendition of services by Borrower in the ordinary course of its business and
substantially in accordance with the terms and conditions of all purchase
orders, contracts, certification, participation, certificate of need, or
other documents relating thereto and forming a part of the contract between
Borrower and the Account Debtor;
(c) It is for a liquidated amount maturing as stated in a duplicate claim
or invoice covering such sale or rendition of services, a copy of which has
been
furnished or is available to Lender (or in the case of Accounts owed by
Florida
Medicaid and all Medicare Account Debtors, that Medical Services have been
rendered but have not yet been invoiced as a result of applicable Medicaid or
Medicare billing procedures);
(d) Such Account, and Lender's security interest therein, is not, and
will
not (by voluntary act or omission by Borrower), be in the future, subject to
any
lien, claim or encumbrance, and each such Account is absolutely owing to
Borrower and is not contingent in any respect or for any reason;
(e) To Borrower's knowledge without independent inquiry, there are no
facts, events or occurrences which in any way impair the validity or
enforceability of any Accounts;
(f) It has been billed and forwarded to the Account Debtor for payment in
accordance with applicable laws and compliance and conformance with any and
requisite procedures, requirements and regulations governing payment by such
Account Debtor with respect to such Account (or in the case of Accounts owed
by
Florida Medicaid and all Medicare Account Debtors, that Medical Services have
been rendered but have not yet been invoiced as a result of applicable
Medicaid
or Medicare billing procedures), and such Account if due from a Medicaid/
Medicare Account Debtor is properly payable directly to Borrower; and
(g) Borrower has obtained and currently has all certificates of need,
Medicaid and Medicare provider numbers, licenses, permits and authorizations
as
necessary in the generation of such Accounts.
ARTICLE V
CLOSING AND CONDITIONS OF LENDING
Section 5.1. Conditions Precedent to Agreement. The obligation of Lender
to enter Loto and perform this Agreement and to make Revolving Credit Loans is
subject to the following conditions precedent:
(a) Lender shall have received two (2) originals of this Agreement and
all
other Loan Documents required to be executed and delivered at or prior to
Closing (other than the Note, as to which Lender shall receive only one
original), executed by Borrowers and any other required Persons, as
applicable.
(b) Lender shall have received all searches and good standing
certificates
required by Section 3.5.
(c) Borrowers shall have complied and shall then be in compliance with
all
the terms, covenants and conditions of the Loan Documents.
(d) There shall have occurred no Event of Default and no event which,
with
the giving of notice or the lapse of time, or both, could constitute such an
Event of Default.
(e) The representations and warranties contained in Article IV shall be
true and correct in all material respects.
(f) Lender shall have received copies of all board of directors
resolutions
of the General Partner or other corporate action taken by Borrowers to
authorize
the execution, delivery and performance of the Loan Documents and the
borrowing
of the Loan thereunder, as well as the names and signatures of the officers of
Borrowers authorized to execute documents on its behalf in connection
herewith,
all as also certified as of the date hereof by each Borrower's chief financial
officer or Borrower's general partner (as the case may be), and such other
papers as Lender may require.
(g) Lender shall have received copies, certified as true, correct and
complete by a corporate officer or the corporate officer of the general
partner
(as the case may be)of each Borrower, of the articles of incorporation or
formation and bylaws of the general partner, (as the case may be) of each
Borrower, with any amendments to any of the foregoing, and all other documents
necessary for performance of the obligations of Borrower under this Agreement
and the other Loan Documents.
(h) Lender shall have received a written opinion of counsel for Borrower,
dated the date hereof, in the form of Exhibit D.
(i) Lender shall have received such financial statements, reports,
certifications, and other operational information required to be delivered
hereunder, including without limitation an initial borrowing base certificate
calculating the Borrowing Base.
(j) Lender shall have received the first installment of the Commitment
Fee.
(k) The Lockbox and the Concentration Account shall have been
established.
(1) Lender shall have received an estoppel certificate substantially in
the
form of Exhibit E attached hereto from Borrower's landlord or sublandlord, as
the case may be, with respect to each of the facilities identified on Schedule
4.15 which is a leased facility.
(m) Lender shall have received a certificate of Borrower's chief
financial
officer, dated the Closing Date, certifying that all of the conditions
specified
in this Section have been fulfilled.
Section 5.2. Conditions Precedent to Advances. Notwithstanding any other
provision of this Agreement, no Loan proceeds, Revolving Credit Loans,
advances
or other extensions of credit under the Loan shall be disbursed hereunder
unless
the following conditions have been satisfied or waived immediately prior to
such
disbursement:
(a) The representations and warranties on the part of Borrowers
(excluding
any Borrower that is then deemed to be a Defaulted Borrower pursuant to
Section
8.1 (b) hereof) contained in Article IV of this Agreement shall be true and
correct in all material respects at and as of the date of disbursement or
advance, as though made on and as of such date, except as follows (i) to the
extent that such representations and warranties expressly relate solely to an
earlier date, (ii) the references in Section 4.7 to financial statements shall
be deemed to be a reference to the then most recent annual and interim
financial
statements of Borrowers furnished to Lender pursuant to Section 6.1 hereof,
(iii) such representations and warranties shall be deemed to have been
supplemented by any written updates pertaining thereto, as delivered by
Borrowers to Lender from time to time and (iv) Borrower's reaffirmation of
Section 4.17 shall be deemed only a representation that any changes in
Borrower's ownership have been in accordance with Section 7.14 hereof.
(b) No Event of Default (other than a limited Event of Default) or event
which, with the giving of notice of the lapse of time, or both, could become
an
Event of Default (other than a Limited Event of Default) shall have occurred
and
be continuing or would result from the making of the disbursement or advance.
(c) No event or events have occurred which have caused a material adverse
change in the condition (financial or otherwise), properties, business, or
operations of Borrowers, taken as a whole, shall have occurred and be
continuing
with respect to Borrowers, taken as a whole, since the date hereof.
Section 5.3. Closing. Subject to the conditions of this Article V, the
Loan
shall be made available on the date as is mutually agreed by the parties (the
"Closing Date") at such time as may be mutually agreeable to the parties
upon the execution hereof (the "Closing") at such place as may be requested
by Lender.
Section 5.4. Waiver of Rights. By completing the Closing hereunder, or by
making advances under the Loan, Lender does not waive a breach of any
representation or warranty of any Borrower hereunder or under any other Loan
Document, and all of Lender's claims and rights resulting from any breach or
misrepresentation by any Borrower are specifically reserved by Lender.
ARTICLE VI
AFFIRMATIVE COVENANTS
Each Borrower covenants and agrees that for so long as such Borrower may
borrow hereunder and until payment in full of the Note and performance of all
other obligations of Borrowers under the Loan Documents:
Section 6.1. Financial Statements and Collateral Reports. Borrower will
furnish to Lender (a) a sales and collections report and accounts receivable
aging schedule on a form acceptable to Lender within fifteen (15) days after
the
end of each calendar month, which shall include, but not be limited to, a
report
of sales, credits issued, and collections received; (b) payable aging
schedules
within fifteen ( 15) days after the end of each calendar month; (c) quarterly
financial statements for NewCare Health Corporation, prepared on a
consolidated
basis with Borrowers and any of NewCare Health Corporation's other controlled
entities; (d) annual audited financial statements on Form 1OK for NewCare
Health
Corporation, prepared on a consolidated basis with Borrowers and any of
NewCare
Health Corporation's other controlled entities prepared by Xxxxx, Xxxxxxx and
Xxxxxxxxx, or other independent public accountants then engaged by Borrower,
within one hundred thirty-five (135) days after the end of each of Borrower's
fiscal years; (e) promptly upon receipt thereof, copies of any reports
submitted
to Borrower by the independent accountants in connection with any interim
audit
of the books of Borrower and copies of each management control letter provided
to Borrower by independent accountants; (f) as soon as available, copies of
all
financial statements and notices provided by Borrower to all of its
stockholders;
and (g) such additional information, reports or statements as Lender may from
time to time reasonably request. Annual financial statements shall set forth
in
comparative form figures for the corresponding periods in the prior fiscal
year.
All financial statements shall include a balance sheet and statement of
earnings
and shall be prepared in accordance with GAAP.
Section 6.2. Payments Hereunder. Borrower will make all payments of
principal, interest, fees, and all other payments required hereunder, under
the
Loan, and under any other agreements with Lender to which Borrower is a party,
as and when due.
Section 6.3. Existence. Good Standing. and Compliance with Laws. Borrower
will do or cause to be done all things necessary (a) to obtain and keep in
full
force and effect all corporate or partnership (as the case may be) existence,
rights, licenses, privileges, and franchises of Borrower necessary to the
ownership of its property or the conduct of its business, and comply with all
applicable present and future laws, ordinances, rules, regulations, orders and
decrees of any Governmental Authority having or claiming jurisdiction over
Borrower; and (b) to maintain and protect the properties used or useful in the
conduct of the operations of Borrower, in a prudent manner, including without
limitation the maintenance at all times of such insurance upon its insurable
property and operations as required by law or by Section 6.7 hereof.
Section 6.4. Legality. Borrower will obtain any and all consents,
approvals
and authorizations of any Governmental Authority necessary for the making of
each disbursement or advance of the loan
Section 6.5. Intentionally Deleted.
Section 6.6. Taxes and Charges. Borrower will timely file all tax reports
and pay and discharge all taxes, assessments and governmental charges or
levies
imposed upon Borrower, or its income or profits or upon its properties or any
part thereof, before the same shall be in default and prior to the date on
which
penalties attach thereto, as well as all lawful claims for labor, material,
supplies or otherwise which, if unpaid, might become a lien or charge upon the
properties or any part thereof of Borrower; provided, however, that Borrower
shall not be required to pay and discharge or cause to be paid and discharged
any such tax, assessment, charge, levy or claim so long as the validity or
amount thereof shall be contested in good faith and by appropriate
proceedings by
Borrower, and Borrower shall have set aside on their books. adequate reserve
therefor; and provided further, that such deferment of payment is permissible
only so long as Borrower's title to, and its right to use, the Collateral is
not
adversely affected thereby and Lender's lien and priority on the Collateral
are
not adversely affected, altered or impaired thereby.
Section 6.7. Insurance. Borrower will carry adequate public liability and
professional liability insurance with responsible companies satisfactory to
Lender in such amounts and against such risks as is customarily maintained by
similar businesses and by owners of similar property in the same general area.
Section 6.8. General Information. Borrower will furnish to Lender such
information as Lender may, from time to time, reasonably request with respect
to
the business or financial affairs of Borrower, and, upon reasonable prior
notice
and during normal business hours, shall permit any officer, employee or agent
of
Lender to visit and inspect any of the properties, to examine the minute
books,
books of account and other records, including management letters prepared by
Borrower's auditors, of Borrower, and make copies thereof or extracts
therefrom,
and to discuss its and their business affairs, finances and accounts with, and
be advised as to the same by, the accountants and officers of Borrower, all at
such times and as often as Lender may require.
Section 6.9. Maintenance of Property. Borrower will maintain, keep and
preserve all of its properties in good repair, working order and condition and
from time to time make all needful and proper repairs, renewals, replacements,
betterments and improvements thereto, so that the business carried on in
connection therewith may be properly and advantageously conducted at all
times.
Section 6.10. Notification of Events of Default and Adverse Developments.
Borrower promptly will notify Lender upon the occurrence of: (a) any Event of
Default; (b) any event which, with the giving of notice or lapse of time, or
both, could constitute an Event of Default; (c) any event, development or
circumstance whereby the financial statements previously furnished to Lender
fail in any material respect to present fairly, in accordance with GAAP, the
financial condition and operational results of Borrower as of the date of
such statements; (d) any judicial, administrative or arbitration proceeding
pending against
Borrower, and any judicial or administrative proceeding known by Borrower to
be
threatened against it which, if adversely decided, could materially and
adversely
affect the condition (financial or otherwise) or operations (present or
prospective) of the Borrowers, taken as a whole, or which may expose Borrower
to
uninsured liability of $100,000.00 or more; (e) any default claimed by any
other
creditor for Borrowed Money (in excess of $50,000)of Borrower other than
Lender;
and (f) any other development in the business or affairs of Borrower which
could
have a material and adverse effect on the business operations of Borrowers,
taken
as a whole, or on the ability of Borrowers to repay the Loan; in each case
describing the nature thereof and (in the case of notification under clauses
(a)
and (b)) the action Borrower proposes to take with respect thereto.
Section 6.11. Employee Benefit Plans. Borrower will (a) comply with the
funding requirements of ERISA with respect to the Plans for its employees, or
will promptly satisfy any accumulated funding deficiency that arises under
Section 302 of ERISA; (b) furnish Lender, promptly after filing the same, with
copies of all reports or other statements filed with the United States
Department
of Labor, the Pension Benefit Guaranty Corporation, or the Internal Revenue
Service with respect to all Plans, or which Borrower, or any member of a
Controlled Group, may receive from such Governmental Authority with respect to
any such Plans, and (c) promptly advise Lender of the occurrence of any
Reportable Event or Prohibited Transaction with respect to any such Plan and
the
action which Borrower proposes to take with respect thereto. Borrower will
make
all contributions when due with respect to any multi-employer pension plan in
which it participates and will promptly advise Lender: (a) upon its receipt of
notice of the assertion against Borrower of a claim for withdrawal liability;
(b)
upon the occurrence of any event which could trigger the assertion of a claim
for
withdrawal liability against Borrower; and (c) upon the occurrence of any
event
which would place Borrower in a Controlled Group as a result of which any
member
(including Borrower) thereof may be subject to a claim for withdrawal
liability,
whether liquidated or contingent.
Section 6.12. Financing Statements. Borrower shall provide to Lender
evidence satisfactory to Lender as to the due recording of termination
statements, releases of collateral, and Forms WCC-3, and shall cause to be
recorded financing statements on Form WCC-1, duly executed by Borrower and
Lender, in all places necessary to release all existing security interests and
other liens in the Collateral (other than as permitted hereby) and to perfect
and
protect Lender's first priority lien and security interest in the Collateral,
as
Lender may request.
Section 6.13. Financial Records. Borrower shall keep current and accurate
books of records and accounts in which full and correct entries will be made
of
all of its business transactions, and will reflect in its financial statements
adequate accruals and appropriations to reserves, all in accordance with GAAP.
Section 6.14. Collection of Accounts. Borrower shall continue to collect
its Accounts in the ordinary course of business.
Section 6.15. Places of Business. Borrower shall give thirty (30) days'
prior written notice to Lender of any change in the location of any of its
places
of business, of the places where its records concerning its Accounts are kept,
of the places where the Collateral is kept, or of the establishment of any
new,
or the discontinuance of any existing, places of business.
Section 6.16. Business Conducted. Borrower shall continue in the business
presently conducted by it using its best efforts to maintain its customers and
goodwill.
Section 6.17. Litigation and Other Proceedings. Borrower shall give
prompt
notice to Lender of any litigation, arbitration, or other proceeding before
any
Governmental Authority against or affecting Borrower if the uninsured portion
of
the amount claimed is more than $50.000.00.
Section 6.18. Intentionally Deleted.
Section 6.19. Submission of Collateral Documents. After the occurrence
and
during the continuance of an Event of Default (other than a Limited Event of
Default), Borrower will, on demand of Lender, make available to Lender copies
of
shipping and delivery receipts evidencing the shipment of goods that gave rise
to an Account, medical records, insurance verification forms, assignment of
benefits, in-take forms or other proof of the satisfactory performance of
services that gave rise to an Account, a copy of the claim or invoice for each
Account and copies of any written contract or order from which the Account
arose.
Borrower shall promptly notify Lender if an Account becomes evidenced or
secured
by an instrument or chattel paper and upon request of Lender, will promptly
deliver any such instrument or chattel paper to Lender.
Section 6.20. Licensure; Medicaid/Medicare Cost Reports. Borrower will
maintain all certificates of need, provider numbers and licenses necessary to
conduct its business as presently conducted, and take any steps required to
comply with any such new or additional requirements that may be imposed on
providers of medical products and services. If required, all Medicaid/Medicare
cost reports will be properly filed.
Section 6.21. Officer's Certificates. Together with the quarterly
financial
statements delivered pursuant to clause (c) of Section 6. l, and together with
the audited annual financial statements delivered pursuant to clause (f) of
that
Section, Borrower shall deliver to Lender a certificate of its chief financial
officer, in form and substance satisfactory to Lender setting forth:
(a) The information (including detailed calculations) required in order
to
establish whether Borrower is in compliance with the requirements of Articles
VI
and VII as of the end of the period covered by the financial statements then
being furnished; and
(b) That the signer has reviewed the relevant terms of this Agreement,
and
has made (or caused to be made under his supervision) a review of the
transactions and conditions of Borrower from the beginning of the accounting
period covered by the income statements being delivered to the date of the
certificate, and that, other than any then existing Limited Event of Defaults
which have been disclosed to Lender, such review has not disclosed the
existence
during such period of any condition or event which constitutes an Event of
Default or which is then, or with the passage of time or giving of notice or
both, could become an Event of Default, and if any such condition or event
existed during such period or now exists, specifying the nature and period of
existence thereof and what action Borrower has taken or proposes to take with
respect thereto.
Section 6.22. Intentionally Deleted.
Section 6.23. Net Worth. NewCare Health Corporation, the ultimate parent
of Borrower, will not at any time allow its net worth, as computed in
accordance
with GAAP, to fall below $4,000,000.00.
ARTICLE VII
NEGATIVE COVENANTS
Each Borrower covenants and agrees that so long as Borrowers may borrow
hereunder and until payment in full of the Note and performance of all other
obligations of Borrowers under the Loan Documents:
Section 7.1. Borrowing. Borrower (other than NewCare Health Corporation)
shall provide Lender with written notice of any loan made to such Borrower in
excess of $250,000 that is secured by real property or tangible personal
property
acquired by such Borrower with the proceeds of such loan (but Lender's consent
shall not be required for any such loan), and will not incur, assume, or
permit
to exist or become contingently liable for any liability for Borrowed Money in
excess of $250,000.00 where the proceeds of the loan are not used by such
Borrower to acquire real property or tangible personal property without
Lender's
prior written consent, which shall not be unreasonably withheld or delayed.
Section 7.2. Intentionally Deleted.
Section 7.3. Liens and Encumbrances. Borrower will not create, incur,
assume or suffer to exist any mortgage, pledge, lien or other encumbrance of
any
kind upon, or any security interest in, any of its Collateral, whether now
owned
or hereafter acquired, except for Permitted Liens.
Section 7.4. Merger. Acquisition. or Sale of Assets. Borrower will not
enter into any merger or consolidation with or acquire all or substantially
all
of the assets of any Person, unless (a) Borrower or any other Borrower is the
surviving entity of such transaction or (b) NewCare Health Corporation or
Equity
General Partner, Inc. ("EGP") holds a controlling interest in the surviving
entity and (c) the surviving entity executes and delivers to Lender all
documents
deemed reasonably necessary by Lender (as determined solely by Lender in its
reasonable commercial judgement) to protect Lender's rights under this
Agreement
and the other Loan Documents and with respect to the Collateral, all at
Borrowers' cost (including without limitation, all lien search costs).
Borrower
will not sell, lease, or otherwise dispose of substantially all of its assets.
Consistent with the foregoing, until the Obligations are repaid in full, none
of
the Borrowers shall transfer, assign, convey or grant to any other Person
(other
than another Borrower, EGP or NewCare Health Corporation) the right to operate
or control any of the nursing homes listed on Schedule 4. l 5, whether by
lease,
sublease, management agreement, joint venture agreement or otherwise.
Section 7.5. Intentionally Deleted.
Section 7.6. Distributions and Management Fees. Following an Event of
Default with respect to such Borrower will not declare or pay any dividends or
other distributions with respect to, purchase, redeem or otherwise acquire for
value any of its outstanding stock or partnership interests (as the case may
be)
now or hereafter outstanding, or return any capital of its stockholders, nor
shall such Borrower pay management fees or fees of a similar nature to any
Person following an Event of Default.
Section 7.7. Intentionally Deleted.
Section 7.8. Intentionally Deleted.
Section 7.9. Intentionally Deleted.
Section 7.10. Compliance with ERISA. Borrower will not permit with
respect
to any Plan covered by Title IV of ERISA any Prohibited Transaction or any
Reportable Event.
Section 7.11. Certificates of Need. Borrower will not suspend or
terminate
or make provisional in any material way, any required certificate of need or
provider number of any Borrower without the prior written consent of Lender,
which shall not be unreasonably withheld or delayed.
Section 7.12. Transactions with Affiliates. Borrower will not enter into
any transaction, including without limitation the purchase, sale, or exchange
of
property, or the loaning or giving of funds to any Affiliate or subsidiary,
except in the ordinary course of business and pursuant to the reasonable
requirements of Borrower's business and upon terms substantially the same and
no
less favorable to Borrower as it would obtain in a comparable arm's length
transaction with any Person not an Affiliate or subsidiary, and so long as the
transaction is not otherwise prohibited hereunder. For purposes of the
foregoing, Lender consents to the transactions described on Schedule 7.l2.
Section 7.13. Use of Lender's Name. Borrower will not use Lender's name
(or
the name of any of Lender's affiliates) in connection with any of its business
operations. Borrower may disclose to third parties that Borrower has a
borrowing
relationship with Lender. Nothing herein contained is intended to permit or
authorize Borrower to make any contract on behalf of Lender.
Section 7.14. Change in Capital Structure. There shall occur no change in
Borrower's capital structure as set forth in Schedule 4. l 7.which causes a
change in control of Borrower.
Section 7.15. Contracts and Agreements. Borrower will not become or be a
party to any contract or agreement which would breach this Agreement.
shall have continued unremedied for a period of twenty (20) days after written
notice from Lender;
(v) If any obligation of a Borrower (other than its Obligations
hereunder)
for the payment of Borrowed Money (the outstanding amount of which is in
excess
of $100,000.00) is not paid when due or within any applicable grace period, or
such obligation becomes or is declared to be due and payable prior to the
expressed maturity thereof;
(vi) If a Borrower makes an assignment for the benefit of creditors,
offers
a composition or extension to creditors, or makes or sends notice of an
intended
bulk sale of any business or assets now or hereafter conducted by such
Borrower;
(vii) If a Borrower files a petition in bankruptcy, is adjudicated
insolvent or bankrupt, petitions or applies to any tribunal for any receiver
of
or any trustee for itself or any substantial part of its property, commences
any
proceeding relating to itself under any reorganization, arrangement, read-
justment
or debt, dissolution or liquidation law or statute of any jurisdiction,
whether
now or hereafter in effect, or there is commenced against a Borrower any such
proceeding which remains undismissed for a period of sixty (60) days, or any
Borrower by any act indicates its consent to, approval of, or acquiescence in,
any such proceeding or the appointment of any receiver of or any trustee for a
Borrower or any substantial part of its property, or suffers any such
receivership or trusteeship to continue undischarged for a period of sixty
(60)
days;
(viii) If one or more final judgments against any Borrower or attachments
against its property (the uninsured portion of which is in excess of
$100,000.00)
not fully and unconditionally covered by insurance shall be rendered by a
court
of record and shall remain unpaid, unstayed on appeal, undischarged, unbonded
and
undismissed for a period of thirty (30) days;
(ix) A Reportable Event which might constitute grounds for termination of
any Plan covered by Title IV of ERISA or for the appointment by the
appropriate
United States District Court of a trustee to administer any such Plan or for
the
entry of a lien or encumbrance to secure any deficiency, has occurred and is
continuing thirty (30) days after its occurrence, or any such Plan is
terminated,
or a trustee is appointed by an appropriate United States District Court to
administer any such Plan, or the Pension Benefit Guaranty Corporation
institutes
proceedings to terminate any such Plan or to appoint a trustee to administer
any
such Plan, or a lien or encumbrance is entered to secure any deficiency or
claim;
(x) If any outstanding stock or partnership interests of Borrower is sold
or otherwise transferred in violation of Section 7.14;
(xi) Upon the issuance of any execution or distraint process against any
of the Collateral;
(xii) If any indication or evidence is received by Lender that Borrower
may
have directly or indirectly been engaged in any type of activity which, in
Lender's reasonable discretion, is reasonably likely to result in the
forfeiture
of any property material of Borrower to any Governmental Authority, which
default
shall have continued unremedied for a period of ten ( 10) days after written
notice from Lender;
(xiii) Borrower or any Affiliate of Borrower, shall challenge or contest,
in any action, suit or proceeding, the validity or enforceability of this
Agreement, or any of the other Loan Documents, the legality or the enforce-
ability
of any of the Obligations or the perfection or priority of any Lien granted to
Lender;
(xiv) Borrower shall be criminally convicted under any law that could
lead
to a forfeiture of any Collateral.
(xv) There shall occur a material adverse change in the financial
condition
or business prospects of a Borrower, or if Lender in good xxxxx xxxxx itself
insecure as a result of acts or events bearing upon the financial condition of
a Borrower or the repayment of the Note, which default shall have continued
unremedied for a period of ten ( 10) days after written notice from Lender.
(b) Notwithstanding the foregoing, if an event which constitutes an Event
of Default occurs with respect to three (3) or fewer of the Borrowers ( a
"Limited Event of Default"), then (i) the Accounts of each Borrower with
respect
to which the Event of Default Occurred (each a "Defaulted Borrower") shall
immediately be deemed excluded from Qualified Accounts ("Excluded Accounts)
unless and until the Event of Default with respect to such Defaulted Borrower
has
been cured to Lender's reasonable satisfaction and (ii) Borrowers shall,
within
two (2) Business Days after the occurrence of the Event of Default, repay the
Loan in an amount, if any, necessary to reduce the outstanding amount of the
Loan
to the Borrowing Base (as adjusted to delete the Accounts which have been
Excluded Accounts pursuant to (i) above). Borrowers' failure to make such
payment
shall constitute a payment default pursuant to Section 8.1 (a)(I) hereof,
entitling Lender to immediately exercise any and all remedies set forth in
Section 8.2 and 8.3 of the Agreement. Notwithstanding the foregoing, (x) no
Defaulted Borrower shall be released from its obligations hereunder (nor shall
the Collateral owned by such Defaulted Borrower be released from the lien
created
hereby) by virtue of such Defaulted Borrower's Accounts being deemed to be
Excluded Accounts, and (y) if the aggregate amount of all Excluded Accounts
exceeds $500,000.00, such event shall constitute an Event of Default and shall
entitle Lender to immediately exercise any and all remedies set forth in
Sections 8.2 and 8.3 of this Agreement.
Section 8.2. Acceleration. Subject to the provisions of Section 8.1 (b)
hereof, upon the occurrence of any of the foregoing Events of Default, the
Note
shall become and be immediately due and payable upon declaration to that
effect
delivered by Lender to Borrower; provided that, upon the happening of any
event
specified in Section 8.1 (vi) hereof (subject always to Section 8.1 (b)), the
Note shall be immediately due and payable failure to satisfy (i) and (ii) will
be an overall Event of Default without declaration or other notice to
Borrowers.
Section 8.3. Remedies.
(a) In addition to all other rights, options, and remedies granted to
Lender under this Agreement, upon the occurrence of an Event of Default Lender
(other than a Limited Event of Default) may (i) terminate the Loan, whereupon
all
outstanding Obligations shall be immediately due and payable, (ii) exercise
all
other rights granted to it hereunder and all rights under the Uniform
Commercial
Code in effect in the applicable jurisdiction(s) and under any other
applicable
law, and (iii) exercise all rights and remedies under all Loan Documents now
or
hereafter in effect, including the following rights and remedies (which list
is
given by way of example and is not intended to be an exhaustive list of all
such
rights and remedies):
(i) The right to take possession of, send notices regarding, and collect
directly the Collateral, with or without judicial process, and to exercise all
rights and remedies available to Lender with respect to the Collateral under
the
Uniform Commercial Code in effect in the jurisdiction(s) in which such
Collateral is located;
(ii) The right to (by its own means or with judicial assistance) enter
any
of Borrower's premises and take possession of the Collateral, or render it
unusable, or dispose of the Collateral on such premises in compliance with
subsection (b), without any liability for rent, storage, utilities, or other
sums, and Borrowers shall not resist or interfere with such action;
(iii) The right to require Borrowers at Borrowers' expense to assemble
all
pr any part of the Collateral and make it available to Lender at any place
designated by Lender;
(iv) The right to reduce the Maximum Loan Amount or to use the Collateral
and/or funds in the Concentration Account to repay the then outstanding
Obligations for any reason; and
(v) The right to relinquish or abandon any Collateral or any security
interest therein.
(b) Borrowers agree that a notice received by it at least ten (10) days
before the time of any intended public sale, or the time after which any
private
sale or other disposition of the Collateral is to be made, shall be deemed to
be
reasonable notice of such sale or other disposition. If permitted by
applicable
law, any perishable Collateral which threatens to speedily decline in value or
which is sold on a recognized marked may be sold immediately by Lender without
prior notice to Borrower. At any sale or disposition of Collateral, Lender may
(to the extent permitted by applicable law) purchase all or any part of the
Collateral, free from any right of redemption by Borrower, which right is
hereby
waived and released. Borrower covenants and agrees not to interfere with or
impose any obstacle to Lender's exercise of its rights and remedies with
respect
to the Collateral.
Section 8.4. Nature of Remedies. Lender shall have the right to proceed
against all or any portion of the Collateral to satisfy the liabilities and
Obligations of Borrower to Lender in any order. All rights and remedies
granted
Lender hereunder and under any agreement referred to herein, or otherwise
available at law or in equity, shall be deemed concurrent and cumulative, and
not alternative remedies, and Lender may proceed with any number of remedies
at the same time until the Loans, and all other existing and future
liabilities and obligations of Borrower to Lender, are satisfied in full.
The exercise of any one right or remedy shall not be deemed a waiver or
release of any other right or remedy, and Lender, upon the occurrence of an
Event of Default, may proceed
against Borrower, and/or the Collateral, at any time, under any agreement,
with
any available remedy and in any order.
ARTICLE IX
MISCELLANEOUS
Section 9.1. Expenses and Taxes.
(a) Borrowers agree to pay, whether or not the Closing occurs, a
reasonable
documentation preparation fee not to exceed $8,000.00, together with actual
audit and appraisal fees and all other out-of-pocket charges and expenses
incurred by
Lender in connection with the negotiation, preparation and execution of each
of
the Loan Documents, any amendments to the Loan Documents following Closing,
and
preparation for Closing. Borrowers also agree to pay all out-of-pocket charges
and expenses incurred by Lender (including the fees and expenses of Lender's
counsel) in connection with the enforcement, protection or preservation of any
right or claim of Lender and the collection of any amounts due under the Loan
Documents.
(b) Borrowers shall pay all taxes (other than taxes based upon or
measured
by Lender's income or revenues or any personal property tax), if any, in
connection with the issuance of the Note and the recording of the security
documents therefor. The obligations of Borrower under this clause (b) shall
survive the payment of Borrowers' indebtedness hereunder and the termination
of
this Agreement.
Section 9.2. Entire Agreement: Amendments. This Agreement and the other
Loan Documents constitute the full and entire understanding and agreement
among
the parties with regard to their subject matter and supersede all prior
written
or oral agreements, understandings, representations and warranties made with
respect thereto. No amendment, supplement or modification of this Agreement
nor
any waiver of any provision thereof shall be made except in writing executed
by
the party against whom enforcement is sought.
Section 9.3. No Waiver: Cumulative Rights. No waiver by any party hereto
of any one or more defaults by the other party in the performance of any of
the
provisions of this Agreement shall operate or be construed as a waiver of any
future default or defaults, whether of a like or different nature. No failure
or
delay on the part of any party in exercising any right, power or remedy
hereunder shall operate as a waiver thereof, nor shall any single or partial
exercise of any such right, power or remedy preclude any other or further
exercise thereof or the exercise of any other right, power or remedy. The
remedies provided for herein are cumulative and are not exclusive of any
remedies that may be available to any party hereto at law, in equity or
otherwise.
Section 9.4. Notices. Any notice or other communication required or
permitted hereunder shall be in writing and personally delivered, mailed by
registered or certified mail (return receipt requested and postage prepaid),
sent by telecopier (with a confirming copy sent by regular mail), or sent by
prepaid overnight courier service, and addressed to the relevant party at its
address set forth below, or at such other address as such party may, by
written notice, designate as its address for purposes of notice hereunder:
(a) If to Lender, at:
HCFP Funding, Inc.
0 Xxxxxxxxx Xxxxxx, Xxxxx 000
Xxxxx Xxxxx, Xxxxxxxx 00000
Attention: Xxxxx X. Xxxxx, President
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
(b) If to Borrower, at:
NewCare, Inc.
0000 Xxxx Xxxxxxx Xxxxx
Xxxxx 000
Xxxxxxx, XX 00000
Attention: Xx. Xxxxxxxxxxx X. Xxxxxxx
Xxxxxx X. Xxxx, Esq.
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
(c) With a copy to:
Xxxxxxx X. Xxxxx, Esq.
Vincent, Berg, Xxxxxxx & Xxxxxxxx
The Lenox Building
0000 Xxxxxxxxx Xxxx, Xxxxx 0000,
Xxxxxxx, XX 00000
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
If mailed, notice shall be deemed to be given five (5) days after being sent,
if
sent by personal delivery or telecopier, notice shall be deemed to be given
when
delivered, and if sent by prepaid courier, notice shall be deemed to be given
on
the next Business Day following deposit with the courier.
Section 9.5. Severability. If any term, covenant or condition of this
Agreement, or the application of such term, covenant or condition to any party
or circumstance shall be found by a court of competent jurisdiction to be,
to any extent, invalid or unenforceable, the remainder of this Agreement and
the
application of such term, covenant, or condition to parties or circumstances
other than those as to which it is held invalid or unenforceable, shall not be
affected thereby, and each term, covenant or condition shall be valid and
enforced to the fullest extent permitted by law. Upon determination that any
such
term is invalid, illegal or unenforceable, the parties hereto shall amend this
Agreement so as to effect the original intent of the parties as closely as
possible in an acceptable manner.
Section 9.6. Successors and Assigns. This Agreement, the Note, and the
other Loan Documents shall be binding upon and inure to the benefit of
Borrower
and Lender and their respective successors and assigns. Notwithstanding the
foregoing, Borrower may not assign any of its rights or delegate any of its
obligations hereunder without the prior written consent of Lender, which may
be
withheld in its sole discretion. Lender may sell, assign, transfer, or
participate any or all of its rights or obligations hereunder without notice
to
or consent of Borrower.
Section 9.7. Counterparts. This Agreement may be executed in any number
of
counterparts, each of which shall be deemed an original, but all of which
together shall constitute but one instrument.
Section 9.8. Interpretation. No provision of this Agreement or any other
Loan Document shall be interpreted or construed against any party because that
party or its legal representative drafted that provision. The titles of the
paragraphs of this Agreement are for convenience of reference only and are not
to be considered in construing this Agreement. Any pronoun used in this
Agreement
shall be deemed to include singular and plural and masculine, feminine and
neuter
gender as the case may be. The words "herein," "hereof," and "hereunder" shall
be deemed to refer to this entire Agreement, except as the context otherwise
requires.
Section 9.9. Survival of Terms. All covenants, agreements,
representations
and warranties made in this Agreement, any other Loan Document, and in any
certificates and other instruments delivered in connection therewith shall be
considered to have been relied upon by Lender and shall survive the making by
Lender of the Loans herein contemplated and the execution and delivery to
Lender
of the Note, and shall continue in full force and effect until all liabilities
and obligations of Borrower to Lender are satisfied in full.
Section 9.10. Release of Lender. Borrower releases Lender, its officers,
employees, and agents, of and from any claims for loss or damage resulting
from
acts or conduct of any or all of them, unless caused by Lender's recklessness,
gross negligence, or willful misconduct.
Section 9.11. Time. Whenever Borrower is required to make any payment or
perform any act on a Saturday, Sunday, or a legal holiday under the laws of
the
State of Maryland (or other jurisdiction where Borrower is required to make
the
payment or perform the act), the payment may be made or the act performed on
the
next Business Day. Time is of the essence in Borrower's performance under this
Agreement and all other Loan Documents.
Section 9.12. Commissions. The transaction contemplated by this Agreement
was brought about by Lender and Borrower acting as principals and without any
brokers, agents, or finders being the effective procuring cause. Borrower
represents that it has not committed Lender to the payment of any brokerage
fee,
commission, or charge in connection with this transaction. If any such claim
is
made on Lender by any broker, finder, or agent or other person, Borrower will
indemnify, defend, and hold Lender harmless from and against the claim and
will
defend any action to recover on that claim, at Borrower's cost and expense,
including Lender's counsel fees. Borrower further agrees that until any such
claim or demand is adjudicated in Lender's favor, the amount demanded will be
deemed a liability of Borrower under this Agreement, secured by the
Collateral.
Section 9.13. Third Parties. No rights are intended to be created
hereunder
or under any other Loan Document for the benefit of any third party donee,
creditor, or incidental beneficiary of Borrower. Nothing contained in this
Agreement shall be construed as a delegation to Lender of Borrower's duty of
performance, including without limitation Borrower's duties under any account
or
contract in which Lender has a security interest.
Section 9.14. Discharge of Borrower's Obligations. Lender, in its sole
discretion, shall have the right at any time, and from time to time, without
prior notice to Borrower if Borrower fails to do so, to: (a) obtain insurance
covering any of the Collateral as required hereunder; (b) pay for the
performance of any of Borrower's obligations hereunder; (c) discharge taxes,
liens, security interests, or other encumbrances at any time levied or placed
on any of the Collateral in violation of this Agreement unless Borrower is in
good faith with due diligence by appropriate proceedings contesting those
items; and (d) pay for the maintenance and preservation of any of the
Collateral. Expenses and advances shall be added to the Loan, until reimbursed
to Lender and shall be secured by the Collateral. Such payments and advances
by Lender shall not be construed as a waiver by Lender of an Event of Default.
Section 9.15. Information to Participants. Lender may divulge to any
participant it may obtain in the Loan, or any portion thereof, all
information, and furnish to such participant copies of reports, financial
statements, certificates, and documents obtained under any provision of this
Agreement or any other Loan Document.
Section 9.16. Intentionally Deleted.
Section 9.17. Choice of Law: Consent to Jurisdiction. THIS AGREEMENT AND
THE NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF
THE STATE OF MARYLAND, WITHOUT REGARD TO ANY OTHERWISE APPLICABLE PRINCIPLES
OF CONFLICTS OF LAWS. IF ANY ACTION ARISING OUT OF THIS AGREEMENT OR THE NOTE
IS COMMENCED BY LENDER IN THE STATE OF MARYLAND OR FEDERAL COURT LOCATED IN
THE STATE OF MARYLAND, BORROWER HEREBY CONSENTS TO THE NONEXCLUSIVE
JURISDICTION OF ANY SUCH COURT IN ANY SUCH ACTION AND TO THE LAYING OF VENUE
IN THE STATE OF MARYLAND. ANY PROCESS IN ~NY SUCH ACTION SHALL BE DULY SERVED
IF MAILED BY REGISTERED MAIL, POSTAGE PREPAID, TO BORROWER AT ITS ADDRESS
DESCRIBED IN SECTION 9.4 HEREOF.
Section 9.18. Waiver of Trial by Jury. BORROWER HEREBY (A) COVENANTS AND
AGREES NOT TO ELECT A TRIAL BY JURY OF ANY ISSUE TRIABLE OF RIGHT BY A JURY,
AND (B) WAIVES ANY RIGHT TO TRIAL BY JURY FULLY TO THE EXTENT THAT ANY SUCH
RIGHT SHALL NOW OR HEREAFTER EXIST. THIS WAIVER OF RIGHT TO TRIAL BY JURY IS
SEPARATELY GIVEN, KNOWINGLY AND VOLUNTARILY, BY BORROWER, AND THIS WAIVER IS
INTENDED TO ENCOMPASS INDIVIDUALLY EACH INSTANCE AND EACH ISSUE AS TO WHICH
THE RIGHT TO A JURY TRIAL WOULD OTHERWISE ACCRUE. LENDER IS HEREBY AUTHORIZED
AND REQUESTED TO SUBMIT THIS AGREEMENT TO ANY COURT HAVING JURISDICTION OVER
THE SUBJECT MATTER AND THE PARTIES HERETO, SO AS TO SERVE AS CONCLUSIVE
EVIDENCE OF BORROWER'S WAIVER OF THE RIGHT TO JURY TRIAL. FURTHER, BORROWER
HEREBY CERTIFIES THAT NO REPRESENTATIVE OR AGENT OF LENDER (INCLUDING LENDER'S
COUNSEL) HAS REPRESENTED, EXPRESSLY OR OTHERWISE, TO BORROWER THAT LENDER WILL
NOT SEEK TO ENFORCE THIS WAIVER OF RIGHT TO JURY TRIAL PROVISION.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
as of the date first written above.
LENDER:
ATTEST: HCFP FUNDING, INC.
By: By: /s/ [SEAL]
Name: Name:
Title: Title:
BORROWER:
ATTEST: NEWCARE HEALTH CORPORATION,
A Nevada Corporation
By:/s/ Xxxxxx X. Xxxx By: /s/ Xxxxx X. Xxxxxxx [SEAL]
Name: Name:
Title: Title:
ATTEST: NEWCARE, INC., a Florida
Corporation
By:/s/ Xxxxxx X. Xxxx By: /s/ Xxxxx Xxxxx [SEAL]
Name: Name: Xxxxx Xxxxx
Title: Title: President
ATTEST: OAK MANOR NURSING HOME, LTD.,
A Florida limited partnership
By: Equity General Partner, Inc.
Its: General Partner
By:/s/ Xxxxxx X. Xxxx By: /s/ Xxxxx Xxxxx [SEAL]
Name: Name: Xxxxx Xxxxx
Title: Title: President
ATTEST: HEALTHCARE FACILITIES LIMITED PARTNERSHIP,
A Louisiana limited partnership
By: Equity General Partner, Inc.
Its: General Partner
By:/s/ Xxxxxx X. Xxxx By: /s/ Xxxxx Xxxxx [SEAL]
Name: Name: Xxxxx Xxxxx
Title: Title: President
ATTEST: SUNCOAST NURSING HOME, LTD.,
A Florida limited partnership
By: Equity General Partner, Inc.
Its: General Partner
By:/s/ Xxxxxx X. Xxxx By: /s/ Xxxxx Xxxxx [SEAL]
Name: Name: Xxxxx Xxxxx
Title: Title: President
ATTEST: CENTRAL TAMPA NURSING HOME, LTD.
A Florida limited partnership
By: Equity General Partner, Inc.
Its: General Partner
By:/s/ Xxxxxx X. Xxxx By: /s/ Xxxxx Xxxxx [SEAL]
Name: Name: Xxxxx Xxxxx
Title: Title: President
ATTEST: XXXXXXXX XXXXXX NURSING HOME, LTD.
A Florida limited partnership
By: Equity General Partner, Inc.
Its: General Partner
By:/s/ Xxxxxx X. Xxxx By: /s/ Xxxxx Xxxxx [SEAL]
Name: Name: Xxxxx Xxxxx
Title: Title: President
ATTEST: MEMORIAL NURSING CENTER, INC.
A Georgia Corporation
By:/s/ Xxxxxx X. Xxxx By: /s/ Xxxxx Xxxxx [SEAL]
Name: Name: Xxxxx Xxxxx
Title: Title: President
ATTEST: CIMMERON HEALTH CARE, INC.
A Georgia Corporation
By:/s/ Xxxxxx X. Xxxx By: /s/ Xxxxx Xxxxx [SEAL]
Name: Name: Xxxxx Xxxxx
Title: Title: President
ATTEST: FITZGERALD HEALTHCARE, INC.
A Georgia Corporation
By:/s/ Xxxxxx X. Xxxx By: /s/ Xxxxx Xxxxx [SEAL]
Name: Name: Xxxxx Xxxxx
Title: Title: President
ATTEST: FITZGERALD NURSING CENTER, INC.
A Georgia Corporation
By:/s/ Xxxxxx X. Xxxx By: /s/ Xxxxx Xxxxx [SEAL]
Name: Name: Xxxxx Xxxxx
Title: Title: President
ATTEST: FORT VALLEY NURSING CENTER, INC.
A Georgia Corporation
By:/s/ Xxxxxx X. Xxxx By: /s/ Xxxxx Xxxxx [SEAL]
Name: Name: Xxxxx Xxxxx
Title: Title: President
ATTEST: XXXXXXX NURSING CENTER, INC.
A Georgia Corporation
By:/s/ Xxxxxx X. Xxxx By: /s/ Xxxxx Xxxxx [SEAL]
Name: Name: Xxxxx Xxxxx
Title: Title: President
ATTEST: KMH ENTERPRISES, INC.
A Georgia Corporation
By:/s/ Xxxxxx X. Xxxx By: /s/ Xxxxx Xxxxx [SEAL]
Name: Name: Xxxxx Xxxxx
Title: Title: President
ATTEST: WHIGHAM HEALTH & REHABILITATION,
INC., a Georgia Corporation
By:/s/ Xxxxxx X. Xxxx By: /s/ Xxxxx Xxxxx [SEAL]
Name: Name: Xxxxx Xxxxx
Title: Title: President
LIST OF EXHIBITS
Exhibit A - Form of Revolving Credit Note
Exhibit B - Form of Lockbox Agreement
Exhibit C - Locations of Collateral
Exhibit D - Form of Legal Opinion
Exhibit E - Form of Estoppel Certificate
LIST OF SCHEDULES
Schedule 1.36 - Permitted Liens
Schedule 4.1 - Subsidiaries
Schedule 4.5 - Litigation
Schedule 4.7 - Tax Identification Numbers
Schedule 4.13 - Non-Compliance with Law
Schedule 4.14 - Environmental Matters
Schedule 4.15 - Places of Business with patient consensus
Schedule 4.16 - Licenses
Schedule 4.17 - Stock Ownership
Schedule 4.19 - Borrowings and Guarantees
Schedule 4.21 - Trade Names
Schedule 4.22 - Joint Ventures
Schedule 7.12 - Transactions with Affiliates
SCHEDULE 1.36
Permitted Liens
DEBTOR DATE JURISDICTION SECURED PARIY COMMENTS
Oak Manor 7/20/93 State of Orix Credit accounts,
Nursing Home Florida Alliance, Inc A/R etc.
930000152589
Central Tampa 5/23/91 State of Nationwide personal
Nursing Home, Florida Health prop in
Ltd Properties, connection
Inc with R/E
970000113108--9 excludes A/r
but does not
mention books
and records
Central Tampa 5/23/97 State of Nationwide personal
Nursing Home, Florida Health prop. in
Ltd Properties, connection
Inc with R/E
970000113111--
Windward 5/27/97 Xxxxxx Nationwide excludes A/R
Nursing County, GA Health but does not
Center, Inc. Properties, mention
Inc. books, records
Central Tampa 5/23/97 Hilsborough Nationwide personal
Nursing Home, County, Health prop. in
Ltd Florida Properties, connection
Inc with R/E
OFF REC 8575
PG 0495
Emory Nursing 9/16/91 Fulcon Writ of Fieri $790.00
Center County, GA Facias
Book 01524
Page 006
Memorial 2/1/96 De Xxxx Retirement accounts,
Nursing County, GA Care a/
Center, Inc. Associates,
Inc.
441996001306
Fitzgerald 4/28/92 Xxxxxx, GA Towers all accounts
Healthcare, expired Financial
Inc Corporation
775130
Fitzgerald 2/28/97 Xxx Xxxx, GA PFC all accounts
Nursing Corporation
Center, Inc.
Fitzgerald 11/30/94 Xxx Xxxx, GA Union Planters all A/r
Health Care, Bank contract
Inc. rights etc
related to
R/E
Victoria 3/25/94 Pinellas First Union All
Xxxxxx Nursing County, National Bank contracts,
Home, Ltd. Florida of Florida, NA licenses etc
in connection
with property
Victoria 3/28/94 St of First Union All
Xxxxxx Nursing Florida National Bank contracts,
Home, Ltd of Florida, NA licenses etc
in connection
with property
Healthcare 5/28/97 Broward Nationwide excludes A/R
Facilities County, FL Health but does not
Limited Properties, mention
Partnership I Inc. books, records
Healthcare 8/23/93 Broward First Union All
Facilities County, FL National Bank contracts,
Limited of Florida, NA licenses etc
Partnership I in connection
with property
Healthcare 5/23/97 St of Nationwide excludes A/R
Facilities Florida Health but does not
Limited Properties, mention books,
Partnership I Inc. records
Healthcare 6/7/93 St of First Union All
Facilities Florida National Bank contracts,
Limited of Florida, NA licenses etc
Partnership I in connection
with property
Windward 4/26/96 Xxxxxx Georgia Dept $3,633.25
Nursing County, GA of Revenue
Center, Inc
Windward 5/23/97 Hall County, Nationwide excludes A/R
Nursing GA Health but does not
Center, Inc. Properties, mention
Inc. books, records
SCHEDULE 4.1
Subsidiaries
1. NewCare, Inc.
Equity General Partner, Inc.
Nursing Home Management, Inc.
Healthcare Facilities, Inc.
2. Oak Manor Nursing Home, Ltd.
None
3. Healthcare Facilities Limited Partnership I
None
4. Suncoast Nursing Home, Ltd.
None
5. Xxxxxxxx Xxxxxx Nursing Home, Ltd.
None
6. Central Tampa Nursing Home, Ltd.
None
7. Memorial Nursing Center, Inc.
None
8. Cimerron Health Care, Inc.
Fitzgerald Healthcare, Inc.
Fitzgerald Nursing Center, Inc.
Fort Valley Nursing Center,
Windward Nursing Center, Inc.
KMH Enterprises, Inc.
9. Fitzgerald Healthcare, Inc.
None
10. Fitzgerald Nursing Center, Inc.
None
11. Fort Valley Nursing Center, Inc.
None
12. Windward Nursing Center, Inc.
Xxxx
00. XXX Enterprises, Inc.
None
14. Whigham Health & Rehabilitation, Inc.
None.
SCHEDULE 4.5
Litigation
1. NewCare, Inc.
None
2. Oak Manor Nursing Home, Ltd.
None
3. Healthcare Facilities Limited Partnership I
None
4. Suncoast Nursing Home, Ltd.
None
5. Xxxxxxxx Xxxxxx Nursing Home, Ltd.
None
6. Central Tampa Nursing Home, Ltd.
None
7. Memorial Nursing Center, Inc.
None
8. Cimerron Health Care, Inc.
None
9. Fitzgerald Healthcare, Inc.
None
10. Fitzgerald Nursing Center, Inc.
None
11. Fort Valley Nursing Center, Inc.
None
12. Windward Nursing Center, Inc.
Xxxx
00. XXX Enterprises, Inc.
None
14. Whigham Health & Rehabilitation, Inc.
None
SCHEDULE 4.7
Federal Taxpayer Identification Numbers
1. NewCare, Inc.
00-0000000
2. Oak Manor Nursing Home, Ltd.
00-0000000
3. Healthcare Facilities Limited Partnership I
00-0000000
4. Suncoast Nursing Home, Ltd.
00-0000000
5. Xxxxxxxx Xxxxxx Nursing Home, Ltd.
00-0000000
6. Central Tampa Nursing Home, Ltd.
00-0000000
7. Memorial Nursing Center, Inc.
00-0000000
8. Cimerron Health Care, Inc.
00-0000000
9. Fitzgerald Healthcare, Inc.
00-0000000
10. Fitzgerald Nursing Center, Inc.
00-0000000
11. Fort Valley Nursing Center, Inc.
00-0000000
12. Windward Nursing Center, Inc.
00-0000000
13. KMH Enterprises, Inc.
00-0000000
14. Whigham Health ~ Rehabilitation, Inc.
00-0000000
SCHEDULE 4.13
Existing Violation of Law
1. NewCare, Inc.
None
2. Oak Manor Nursing Home, Ltd.
None
3. Healthcare Facilities Limited Partnership I
None
4. Suncoast Nursing Home, Ltd.
None
5. Xxxxxxxx Xxxxxx Nursing Home, Ltd.
None
6. Central Tampa Nursing Home, Ltd.
None
7. Memorial Nursing Center, Inc.
None
8. Cimerron Health Care, Inc.
None
9. Fitzgerald Healthcare, Inc.
None
10. Fitzgerald Nursing Center, Inc.
None
11. Fort Valley Nursing Center, Inc.
None
12. Windward Nursing Center, Inc.
Xxxx
00. XXX Enterprises, Inc.
None
14. Whigham Health & Rehabilitation, Inc.
None
SCHEDULE 4.14
Environmental Matters
1. NewCare, Inc.
None
2. Oak Manor Nursing Home, Ltd.
None
3. Healthcare Facilities Limited Partnership I
None
4. Suncoast Nursing Home, Ltd.
None
5. Xxxxxxxx Xxxxxx Nursing Home, Ltd.
None
6. Central Tampa Nursing Home, Ltd.
None
7. Memorial Nursing Center, Inc.
None
8. Cimerron Health Care, Inc.
None
9. Fitzgerald Healthcare, Inc.
None
10. Fitzgerald Nursing Center, Inc.
None
11. Fort Valley Nursing Center, Inc.
None
12. Windward Nursing Center, Inc.
Xxxx
00. XXX Enterprises, Inc.
None
14. Whigham Health & Rehabilitation, Inc.
None
SCHEDULE 4.15
Places of Business
1. NewCare Health Corporation
0000 Xxxx Xxxxxxx Xxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
2. NewCare, Inc.
0000 Xxxx Xxxxxxx Xxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
3. Oak Manor Nursing Home, Ltd.
3500 and 0000 Xxx Xxxxx Xxxx
Xxxxx, Xxxxxxx 00000
4. Healthcare Facilities Limited Partnership I
000 Xxxxxxx Xxxx
Xxxxx, Xxxxxxx 00000
5. Suncoast Nursing Home, Ltd.
0000 00xx Xxxxxx Xxxxx
Xx. Xxxxxxxxxx, Xxxxxxx 00000
6. Xxxxxxxx Xxxxxx Nursing Home, Ltd.
000 00xx Xxxxxx Xxxxx
Xx. Xxxxxxxxxx, Xxxxxxx 00000
7. Central Tampa Nursing Home, Ltd.
0000 00xx Xxxxxx
Xxxxx, Xxxxxxx 00000
8. Memorial Nursing Center, Inc.
0000 Xxxxxx Xxxx
Xxxxxxx, Xxxxxxx 00000
9. Cimerron Health Care, Inc.
0000 Xxxx Xxxxxxx Xxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
10. Fitzgerald Healthcare, Inc.
000 Xxxxxxx Xxxxxx X.X. Xxx 0000
Xxxxxxxxxx, Xxxxxxx 00000
11. Fitzgerald Nursing Center, Inc.
000 Xxxxxxx Xxxxxx
X.X. Xxx 0000
Xxxxxxxxxx, Xxxxxxx 00000
12. Fort Valley Nursing Center, Inc.
000 Xxxxx Xxxxxxxx Xxxx.
X.X. Xxx 0000
Xxxx Xxxxxx, Xxxxxxx 00000
13. Windward Nursing Center, Inc.
0000 Xxxxxxxx Xxxx
X.X. Xxx 000
Xxxxxxx Xxxxxx, Xxxxxxx 00000
14. KMH Enterprises, Inc.
000 Xxxxxxxxxx Xxxxxx
X.X. Xxx 000
Xxxxxx, Xxxxxxx 00000
15. Whigham Health & Rehabilitation, Inc.
X.X. Xxx 00 - Hwy 000 XxXxxxx Xxxx
Xxxxxxx, Xxxxxxx 00000-0000
SCHEDULE 4.16
Licenses
1. NewCare, Inc
None
2. Oak Manor Nursing Home, Ltd.
None
3. Healthcare Facilities Limited Partnership I
None
4. Suncoast Nursing Home, Ltd.
None
5. Xxxxxxxx Xxxxxx Nursing Home, Ltd
None
6. Central Tampa Nursing Home, Ltd.
None
7. Memorial Nursing Center, Inc
None
8. Cimerron Health Care, Inc
None
9. Fitzgerald Healthcare, Inc
None
10. Fitzgerald Nursing Center, Inc.
None
11. Fort Valley Nursing Center, Inc
None
12. Windward Nursing Center, Inc
None
13. KMH Enterprises, Inc.
None
14. Whigham Health & Rehabilitation, Inc.
None
SCHEDULE 4.17
Ownership
1. NewCare, Inc.
Shareholder Name Ownership Percentage
Newcare Health Corp. 100%
2. Oak Manor Nursing Home, Ltd.
Partner Name GP or LP Ownership Percentage
Equity General Partner, Inc. GP 0.24%
Healthcare Facilities, Inc. LP 5.76%
NewCare, Inc. LP 91.12%
Gloworth, Inc. LP 2.88%
3. Healthcare Facilities Limited
Partner Name GP or LP Ownership Percentage
Equity General Partner GP 1%
NewCare, Inc. LP 97%
4. Suncoast Nursing Home, Ltd.
Partner Name GP or LP Ownership Percentage
Equity General Partner GP 3%
NewCare, Inc. LP 97%
5. Xxxxxxxx Xxxxxx Nursing Home, Ltd.
Partner Name GP or LP Ownership Percentage
Equity General Partner GP 3%
NewCare, Inc. LP 97%
6. Central Tampa Nursing Home, Ltd.
Partner Name GP or LP Ownership Percentage
Equity General Partner GP 1%
NewCare, Inc. LP 99%
7. Memorial Nursing Center, Inc.
Shareholder Name Ownership Percentage
Newcare Health Corp. 100%
8. Cimerron Health Care, Inc.
Shareholder Name Ownership Percentage
Newcare Health Corp. 100%
9. Fitzgerald Healthcare, Inc.
Shareholder Name Ownership Percentage
Cimmeron Health Care, Inc. 100%
10. Fitzgerald Nursing Center, Inc.
Shareholder Name Ownership Percentage
Cimmeron Health Care, Inc. 100%
11. Fort Valley Nursing Center, Inc.
Shareholder Name Ownership Percentage
Cimmeron Health Care, Inc. 100%
12. Windward Nursing Center, Inc.
Shareholder Name Ownership Percentage
Cimmeron Health Care, Inc. 100%
13. KMH Enterprises, Inc.
Shareholder Name Ownership Percentage
Cimmeron Health Care, Inc. 100%
14. Whigham Health & Rehabilitation, Inc.
Shareholder Name Ownership Percentage
Newcare Health Corp. 100%
SCHEDULE 4.19
Loans and Guaranties
1. NewCare, Inc.
None
2. Oak Manor Nursing Home, Ltd.
- $13,600,000.00 loan from Nationwide Health Properties, Inc. (May 14, 1997)
3. Healthcare Facilities Limited Partnership I
- $2,500,000.00 loan from Nationwide Health Properties, Inc. (May 14, 1997)
4. Suncoast Nursing Home, Ltd.
- $770,000.00 loan by NCNB National Bank of Florida (July 28, 1988)
- $200,000.00 loan by Florida Suncoast Villas, Inc., Xxxx X. Xxxxx and
Xxxxxxx X. Xxxxx (July 28, 1988)
5. Xxxxxxxx Xxxxxx Nursing Home, Ltd.
- $2,900,000.00 from NCNB National Bank of Florida (August 22,1988)
6. Central Tampa Nursing Home, Ltd.
- $2,900,000.00 by Nationwide Health Properties, Inc. (May 14, 1997)
7. Memorial Nursing Center, Inc.
None
8. Cimerron Health Care, Inc.
None
9. Fitzgerald Healthcare, Inc.
- Loan from General Trust Company and Development Authority of Xxx Xxxx
County
- Loan from Loan from W.E. Xxxxxxx, Sr., Right X. Xxxxxxx, W. Xxx Xxxx and
Xxxxxx X. Dallas
10. Fitzgerald Nursing Center, Inc.
None
11. Fort Valley Nursing Center, Inc.
- $1,000,000.00 loan from Middle Georgia Bank (December 1, 1983)
12. Windward Nursing Center, Inc.
$2,500,000.00 loan from Nationwide Health Properties, Inc. (May 14, 1997)
13. KMH Enterprises, Inc.
None
14. Whigham Health & Rehabilitation, Inc.
None
15. NewCare Health Corporation
Guaranty of $21,500,00.00 loan from Nationwide Health Properties, Inc. (May
14, 1997)
SCHEDULE 4.21
Trade Names
1. NewCare, Inc.
None
2. Oak Manor Nursing Home, Ltd.
None
3. Healthcare Facilities Limited Partnership I
Dania Nursing Home
4. Suncoast Nursing Home, Ltd.
None
5. Xxxxxxxx Xxxxxx Nursing Home, Ltd.
None
6. Central Tampa Nursing Home, Ltd.
None
7. Memorial Nursing Center, Inc.
Emory Nursing Center
8. Cimerron Health Care, Inc.
None
9. Fitzgerald Healthcare, Inc
None
10. Fitzgerald Nursing Center, Inc.
None
11. Fort Valley Nursing Center, Inc
None
12. Windward Nursing Center, Inc.
Xxxx
00. XXX Enterprises, Inc.
Pleasant View Nursing Center
14. Whigham Health & Rehabilitation, Inc.
None
SCHEDULE 4.22
Joint Venture Arrangements
1. NewCare, Inc.
None
2. Oak Manor Nursing Home, Ltd.
None
3. Healthcare Facilities Limited Partnership I
None
4. Suncoast Nursing Home, Ltd.
None
5. Xxxxxxxx Xxxxxx Nursing Home, Ltd.
None
6. Central Tampa Nursing Home, Ltd.
None
7. Memorial Nursing Center, Inc.
None
8. Cimerron Health Care, Inc.
None
9. Fitzgerald Healthcare, Inc.
None
10. Fitzgerald Nursing Center, Inc.
None
11. Fort Valley Nursing Center, Inc.
None
12. Windward Nursing Center, Inc.
Xxxx
00. XXX Enterprises, Inc
None
14. Whigham Health & Rehabilitation, Inc.
None
Schedule 7.12
Contracts with Affiliates
1. NewCare, Inc.
None
2. Oak Manor Nursing Home, Ltd.
None
3. Healthcare Facilities Limited Partnership I
None
4. Suncoast Nursing Home, Ltd
None
5. Xxxxxxxx Xxxxxx Nursing Home, Ltd.
None
6. Central Tampa Nursing Home, Ltd.
None
7. Memorial Nursing Center, Inc.
None
8. Cimerron Health Care, Inc.
None
9. Xxxxxxxxxx Healthcare, Inc.
None
10. Xxxxxxxxxx Nursing Center, Inc.
None
11. Fort Valley Nursing Center, Inc.
None
12. Windward Nursing Center, Inc.
Xxxx
00. XXX Enterprises, Inc.
None
14. Whigham Health & Rehabilitation, Inc.
None
$10,000,000.00
AMENDMENT NO. 3 TO
LOAN AND SECURITY AGREEMENT
by and among
NEWCARE NURSING CORPORATION
NEWCARE HEALTH CORPORATION
NEWCARE, INC.
OAK MANOR NURSING HOME, LTD.
HEALTHCARE FACILITIES LIMITED PARTNERSHIP I
SUNCOAST NURSING HOME, LTD.
XXXXXXXX XXXXXX NURSING HOME, LTD.
CENTRAL TAMPA NURSING HOME, LTD;
MEMORIAL NURSING CENTER, INC.
CIMERRON HEALTH CARE, INC.
XXXXXXXXXX HEALTHCARE, INC.
XXXXXXXXXX NURSING CENTER, INC.
FORT VALLEY NURSING CENTER, INC.
WINDWARD NURSING CENTER, INC.
KMH ENTERPRISES, INC.
WHIGHAM HEALTH CARE REHABILITATION, INC.
NEWCARE HOSPITAL CORPORATION
and
HCFP FUNDING. INC.
January 30, 1998
AMENDMENT NO. 3 TO LOAN AND SECURITY AGREEMENT
THIS AMENDMENT NO. 3 TO LOAN AND SECURITY AGREEMENT ("Amendment") is
made as of this 30th day of January, 1998, by and among NEWCARE HEALTH
CORPORATION, a Nevada corporation, NEWCARE, INC., a Florida corporation,
OAK MANOR NURSING HOME, LTD., a Florida limited partnership, HEALTHCARE
FACILITIES LIMITED PARTNERSHIP I, a Louisiana limited partnership, SUNCOAST
NURSING HOME, LTD., a Florida limited partnership, XXXXXXXX XXXXXX NURSING
HOME, LTD., a Florida limited partnership, CENTRAL TAMPA NURSING HOME,
LTD., a Florida limited partnership, MEMORIAL NURSING CENTER, INC., a
Georgia corporation, CIMERRON HEALTH CARE, INC., a Georgia corporation,
XXXXXXXXXX HEALTHCARE, INC., a Georgia corporation, XXXXXXXXXX NURSING
CENTER, INC., a Georgia corporation, FORT VALLEY NURSING CENTER, INC., a
Georgia corporation, WINDWARD NURSING CENTER, INC., a Georgia corporation,
KMH ENTERPRISES, INC., a Georgia corporation and WHIGHAM HEALTH &
REHABILITATION, INC., a Georgia corporation, NEWCARE HOSPITAL
CORPORATION, a Georgia corporation ("Original Borrowers"), NEWCARE NURSING
CORPORATION, a Georgia corporation ("New Borrower") (Original Borrowers and
New Borrower are collectively called "Borrower") and HCFP FUNDING, INC. a
Delaware corporation ("Lender").
RECITALS
A. Pursuant to that certain Loan and Security Agreement dated June 30,
1997 by and between the Original Borrowers and Lender as it has been
amended from time to time (the "Loan Agreement"), the parties have
established certain financing arrangements that allow Borrower to borrow
funds from Lender in accordance with the terms and conditions set forth in
the Loan Agreement.
B. New Borrower has executed a Secured Bridge Note dated January ~,
1998, in favor of HCFP Funding II, Inc., a Delaware corporation ("Funding
II"), in the amount of Three Million and No/100 Dollars ($3 000 000.00)
(the "Venice Secured Bridge Note").
C. The parties now desire to amend the Loan Agreement simultaneously
with the execution and delivery of the Note, in accordance with the terms
and conditions hereinafter set forth
NOW, THEREFORE, in consideration of the premises set forth above, the
terms and conditions contained herein, and other good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, Lender and Borrower have agreed to the following amendments
to the Loan Agreement. Capitalized terms defined in the Loan Agreement and
used in this Amendment shall have the same meanings set forth in the Loan
Agreement unless otherwise specified in this Amendment.
1. Amendment to Loan Agreement. Effective as of the date of this
Amendment, the Loan Agreement is amended as follows:
1.01 Original Borrowers and Lender agree that the New Borrower shall
from now and hereafter be included within "Borrowers" for all purposes of
the Loan Agreement and other documents.
1.02. For purposes of Article II, Section 2.3 of the Loan Agreement,
Borrowers agree to maintain a separate Lockbox, Lockbox Agreement and
Borrowing Base for the New Borrower, if so requested by Lender.
1.03. Section 3.1 is restated in its entirety to read as follows:
"Section 3.1. Generally. As security for the payment of all
liabilities of Borrowers to Lender, including without limitation: (i)
indebtedness evidenced
under the Note, repayment of Revolving Credit Loans, advances and other
extensions of credit, all fees and charges owing by Borrowers, and all
other
liabilities and obligations of every kind or nature whatsoever of Borrowers
to
Lender, whether now existing or hereafter incurred, joint or several,
matured or
unmatured, direct or indirect, primary or secondary, related or unrelated,
due
or to become due, including but not limited to any extensions,
modifications,
substitutions, increases and renewals thereof, (ii) the payment of all
amounts
advanced by Lender to preserve, protect, defend, and enforce its rights
hereunder
and in the following property in accordance with the terms of this
Agreement,
(iii) the payment of all expenses incurred by Lender in connection
therewith
(collectively, the "Obligations"), and as further security for (y) the
payment
and performance of the obligations of Borrowers under the Secured Bridge
Note in
the amount of $4,500,000.00 dated as of July 31, 1997 as amended, modified
or
replaced, and (z) the payment and performance of the obligations of
Borrowers
under the Venice Secured Bridge Note in the amount of $3,000,000.00 dated
as of
January , 1998 as amended, modified or replaced, each Borrower hereby
assigns and
grants to Lender a continuing first priority lien on and security interest
in,
upon, and to the following property (the "Collateral"):
(a) All of such Borrower's now-owned and hereafter acquired or arising
Accounts, accounts receivable and rights to payment of every kind and
description, and any contract rights, chattel paper, documents and
instruments
with respect thereto but specifically excluding Leases and Rents;
(b) All of such Borrower's now owned and hereafter acquired or arising
general intangibles of every kind and description pertaining to its
Accounts,
accounts receivable and other rights to payment, including, but not limited
to,
all existing and future customer lists, choses in action, claims, books,
records,
contracts, licenses, formulae, tax and other types of refunds, returned and
unearned insurance premiums, rights and claims under insurance policies,
and
computer information, software, records, and data but specifically
excluding
Leases and Rents;
(c) All of such Borrower's monies and other property of every kind and
nature now or at any time or times hereafter in the possession of or under
the
control of Lender or a bailee or Affiliate of Lender; and
(d) The proceeds (including, without limitation, insurance proceeds)
of all
of the foregoing."
1.04. Section 8.1 of the Loan Agreement (Events of Default) is hereby
amended to add the following clause:
"(xvii) An Event of Default shall have occurred under the Venice
Secured
Bridge Note."
1.05. Section 8.4 of the Loan Agreement is deleted in its entirety and
replaced as follows:
"Section 8.4. Nature of Remedies. Lender shall have the rigl1t to
proceed
against all or any portion of the Collateral to satisfy, in any order, (a)
the
liabilities and Obligations of Borrower to Lender under this Agreement, (b)
upon
the occurrence of an Event of Default under the Secured Bridge Note, the
liabilities and Obligations of Borrower to Funding II thereunder, or (c)
upon the
occurrence of an Event of Default under the Venice Secured Bridge Note, the
liabilities and Obligations of Borrower to Funding II thereunder. All
rights and
remedies granted Lender hereunder and under any agreement referred to
herein, or
otherwise available at law or in equity, shall be deemed concurrent and
cumulative, and not alternative remedies, and Lender may proceed with any
number
of remedies at the same time until the Loans, and all other existing and
future
liabilities and obligations of Borrower to Lender, are satisfied in full.
The
exercise of any one right or remedy shall not be deemed a waiver or release
of
any other right or remedy, and Lender, upon the occurrence of an Event of
Default
hereunder or under the Secured Bridge Note or the Venice Secured Bridge
Note, may
proceed against Borrower, and/or the Collateral, at any time, under any
agreement, with any available remedy and in any order."
2. Reference to the Effect on the Loan Agreement.
2.01 Upon the effectiveness of Section 1 of this Amendment, on and
after
the date of this Amendment, each reference in the Loan Agreement to "this
Agreement," "hereunder," "hereof," "herein" or words of similar import
shall mean
and be a reference to the Loan Agreement as amended by tl1is Amendment.
2.02 Except as specifically amended above, the Loan Agreement, and all
other Loan Documents, shall remain in full force and effect, and are hereby
ratified and confirmed.
2.03 The execution, delivery and effectiveness of this Amendment shall
not,
except as expressly provided in this Amendment, operate as a waiver of any
right,
power or remedy of Lender, nor constitute a waiver of any provision of the
Loan
Agreement, or any other documents, instruments and agreements executed or
delivered in connection with tile Loan Agreement.
3. Governing Law. This Amendment shall be governed by and construed in
accordance with the laws of the State of Maryland.
4. Headings. Section headings in this Amendment are included for
convenience of reference only and shall not constitute a part of this
Amendment
for any other purpose.
5. Counterparts. This Amendment may be executed in counterparts, and
each
counterpart taken together shall be deemed to constitute one and the same
instrument.
IN WITNESS WHEREOF, the parries have caused this AMENDMENT NO. 1 TO
LOAN
AND SECURITY AGREEMENT to be executed as of the date first written above.
LENDER:
ATTEST: HCFP FUNDING, INC.
By: By: [SEAL]
Name: Name:
Title: Title:
BORROWER:
ATTEST: NEWCARE HEALTH CORPORATION,
A Nevada Corporation
By:/s/ Xxxxxx X. Xxxx By: /s/ Xxxxx X. Xxxxxxx [SEAL]
Name: Xxxxxx X. Xxxx Name: Xxxxx Xxxxxxx
Title: Secretary Title: President
ATTEST: NEWCARE, INC., a Florida
Corporation
By:/s/ Xxxxxx X. Xxxx By: /s/ Xxxxx Xxxxx [SEAL]
Name: Xxxxxx X. Xxxx Name: Xxxxx Xxxxx
Title: Secretary Title: President
ATTEST: OAK MANOR NURSING HOME, LTD.,
A Florida limited partnership
By: Equity General Partner, Inc.
Its: General Partner
By:/s/ Xxxxxx X. Xxxx By: /s/ Xxxxx Xxxxx [SEAL]
Name: Xxxxxx X. Xxxx Name: Xxxxx Xxxxx
Title: Secretary Title: President
ATTEST: HEALTHCARE FACILITIES LIMITED PARTNERSHIP,
A Louisiana limited partnership
By: Equity General Partner, Inc.
Its: General Partner
By:/s/ Xxxxxx X. Xxxx By: /s/ Xxxxx Xxxxx [SEAL]
Name: Xxxxxx X. Xxxx Name: Xxxxx Xxxxx
Title: Secretary Title: President
ATTEST: SUNCOAST NURSING HOME, LTD.,
A Florida limited partnership
By: Equity General Partner, Inc.
Its: General Partner
By:/s/ Xxxxxx X. Xxxx By: /s/ Xxxxx Xxxxx [SEAL]
Name: Xxxxxx X. Xxxx Name: Xxxxx Xxxxx
Title: Secretary Title: President
ATTEST: CENTRAL TAMPA NURSING HOME, LTD.
A Florida limited partnership
By: Equity General Partner, Inc.
Its: General Partner
By:/s/ Xxxxxx X. Xxxx By: /s/ Xxxxx Xxxxx [SEAL]
Name: Xxxxxx X. Xxxx Name: Xxxxx Xxxxx
Title: Secretary Title: President
ATTEST: XXXXXXXX XXXXXX NURSING HOME, LTD.
A Florida limited partnership
By: Equity General Partner, Inc.
Its: General Partner
By:/s/ Xxxxxx X. Xxxx By: /s/ Xxxxx Xxxxx [SEAL]
Name: Xxxxxx X. Xxxx Name: Xxxxx Xxxxx
Title: Secretary Title: President
ATTEST: MEMORIAL NURSING CENTER, INC.
A Georgia Corporation
By:/s/ Xxxxxx X. Xxxx By: /s/ Xxxxx Xxxxx [SEAL]
Name: Xxxxxx X. Xxxx Name: Xxxxx Xxxxx
Title: Secretary Title: President
ATTEST: CIMMERON HEALTH CARE, INC.
A Georgia Corporation
By:/s/ Xxxxxx X. Xxxx By: /s/ Xxxxx Xxxxx [SEAL]
Name: Xxxxxx X. Xxxx Name: Xxxxx Xxxxx
Title: Secretary Title: President
ATTEST: XXXXXXXXXX HEALTHCARE, INC.
A Georgia Corporation
By:/s/ Xxxxxx X. Xxxx By: /s/ Xxxxx Xxxxx [SEAL]
Name: Xxxxxx X. Xxxx Name: Xxxxx Xxxxx
Title: Secretary Title: President
ATTEST: XXXXXXXXXX NURSING CENTER, INC.
A Georgia Corporation
By:/s/ Xxxxxx X. Xxxx By: /s/ Xxxxx Xxxxx [SEAL]
Name: Xxxxxx X. Xxxx Name: Xxxxx Xxxxx
Title: Secretary Title: President
ATTEST: FORT VALLEY NURSING CENTER, INC.
A Georgia Corporation
By:/s/ Xxxxxx X. Xxxx By: /s/ Xxxxx Xxxxx [SEAL]
Name: Xxxxxx X. Xxxx Name: Xxxxx Xxxxx
Title: Secretary Title: President
ATTEST: XXXXXXX NURSING CENTER, INC.
A Georgia Corporation
By:/s/ Xxxxxx X. Xxxx By: /s/ Xxxxx Xxxxx [SEAL]
Name: Xxxxxx X. Xxxx Name: Xxxxx Xxxxx
Title: Secretary Title: President
ATTEST: KMH ENTERPRISES, INC.
A Georgia Corporation
By:/s/ Xxxxxx X. Xxxx By: /s/ Xxxxx Xxxxx [SEAL]
Name: Xxxxxx X. Xxxx Name: Xxxxx Xxxxx
Title: Secretary Title: President
ATTEST: WHIGHAM HEALTH & REHABILITATION,
INC., a Georgia Corporation
By:/s/ Xxxxxx X. Xxxx By: /s/ Xxxxx Xxxxx [SEAL]
Name: Xxxxxx X. Xxxx Name: Xxxxx Xxxxx
Title: Secretary Title: President
ATTEST: NEWCARE HOSPITAL CORPORATION,
a Georgia Corporation
By:/s/ Xxxxxx X. Xxxx By: /s/ Xxxxxx X. Xxxxxxxxx [SEAL]
Name: Xxxxxx X. Xxxx Name: Xxxxxx X. Xxxxxxxxx
Title: Secretary Title: President
ATTEST: NEWCARE HEALTH CORPORATION,
a Nevada Corporation
By:/s/ Xxxxxx X. Xxxx By: /s/ Xxxxx Xxxxxxx [SEAL]
Name: Xxxxxx X. Xxxx Name: Xxxxx Xxxxxxx
Title: Secretary Title: President
REVOLVING CREDIT NOTE
$10,000,000.00 January 30, 1998
For value received, the undersigned, NEWCARE HEALTH CORPORATION, a
Nevada
corporation, NEWCARE, INC., a Florida corporation, OAK MANOR NURSING HOME,
LTD.,
a Florida limited partnership, HEALTHCARE FACILITIES LIMITED PARTNERSHIP I,
a
Louisiana limited partnership, SUNCOAST NURSING HOME, LTD., a Florida
limited
partnership, XXXXXXXX XXXXXX NURSING HOME, LTD., a Florida limited
partnership,
CENTRAL TAMPA NURSING HOME, LTD., a Florida limited partnership, MEMORIAL
NURSING
CENTER, INC., a Georgia corporation, CIMMERON HEALTH CARE, INC., a Georgia
corporation, XXXXXXXXXX HEALTHCARE, INC., a Georgia corporation, XXXXXXXXXX
NURSING CENTER, INC., a Georgia corporation, FORT VALLEY NURSING CENTER,
INC.,
a Georgia corporation, WINDWARD NURSING CENTER, INC., a Georgia
corporation, KMH
ENTERPRISES, INC., a Georgia corporation, WHIGHAM HEALTH & REHABILITATION,
INC.,
a Georgia corporation and NEWCARE HOSPITAL CORPORATION, a Georgia
corporation,
and NEWCARE NURSING CORPORATION, a Georgia corporation (collectively,
"Borrower"), jointly and severally, promise to pay, in lawful money of the
United
States, to the order of HCFP FUNDING, INC., a Delaware corporation
("Lender"),
the principal sum of Ten Million and No/100 Dollars ($ 10,000,000.00), or
so much
thereof as shall be advanced or readvanced and shall remain unpaid under
the Loan
established pursuant to that certain loan and Security Agreement of even
date
with this Note by and among the undersigned and Lender (the "Loan
Agreement"),
plus interest on the unpaid balance thereof, computed on a 360-day basis,
at the
rate per annum that is set forth in the Loan Agreement. All capitalized
terms
used, and not otherwise specifically defined, in this Note shall have the
meanings ascribed to them in the Loan Agreement.
This Note amends, restates and replaces in its entirety the Revolving
Credit Note dated July 31, 1997.
This Note shall evidence the undersigned's obligation to repay all
sums
advanced by Lender from time to time under and as part of the Loan. The
actual
amount due and owing from time to time under this Note shall be evidenced
by
Lender's records of receipts and disbursements with respect to the Loan,
which
shall be conclusive evidence of that amount, absent manifest error.
Interest hereon shall be payable monthly, in arrears, on the first
Business
Day of each month hereafter (for the previous month). For purposes of this
Note,
a "Business Day" shall mean any day on which banks are open for business in
Maryland, excluding Saturdays and Sundays.
This Note shall become due and payable upon the earlier to occur of
(i) the
expiration of the Term, or (ii) any Event of Default under the Loan
Agreement,
or any other event under any other Loan Documents which would result in
this Note
becoming due and payable. At such time, the entire principal balance of
this Note
and all other fees, costs and expenses, if any, shall be due and payable in
full.
Lender shall then have the option at any time and from time to time to
exercise
all of the rights and remedies set forth in this Note and in the other Loan
Documents, as well as all rights and remedies otherwise available to Lender
at
law or in equity, to collect the unpaid indebtedness under this Note and
the
other Loan Documents. This Note is secured by the Collateral, as defined in
and
described in the Loan Agreement.
Whenever any principal and/or interest and/or fee under this Note
shall not
be paid when due, whether at the stated maturity or by acceleration,
interest on
such unpaid amounts shall thereafter be payable at a rate per annum equal
to
three percentage points above the stated rate of interest on this Note
until such
amounts shall be paid.
The undersigned and Lender intend to conform strictly to the
applicable
usury laws in effect from time to time during the term of the Loan.
Accordingly,
if any transaction contemplated hereby would be usurious under such laws,
then
notwithstanding any other provision hereof: (a) the aggregate of all
interest
that is contracted for, charged, or received under this Note or under any
other
Loan Document shall not exceed the maximum amount of interest allowed by
applicable law, and any excess shall be promptly credited to the
undersigned by
Lender (or, to the extent that such consideration shall have been paid,
such
excess shall be promptly refunded to the undersigned by Lender); (b)
neither the
undersigned nor any other Person (as defined in the Loan Agreement) now or
hereafter liable hereunder shall be obligated to pay the amount of such
interest
to the extent that it is in excess of the maximum interest permitted by
applicable law; and (c) the effective rate of interest shall be reduced to
the
Highest Lawful Rate (as defined in the Loan Agreement). All skims paid, or
agreed
to be paid, to Lender for the use, forbearance, and detention of the debt
of
Borrower to Lender shall, to the extent permitted by applicable law, be
allocated
throughout the full term of this Note until payment is made in full so that
the
actual rate of interest does not exceed the Highest Lawful Rate in effect
at any
particular time during the full term thereof. If at any time the rate of
interest
under the Note exceeds the Highest Lawful Rate, the rate of interest to
accrue
pursuant to this Note shall be limited, notwithstanding anything to the
contrary
herein, to the Highest Lawful Rate, but any subsequent reductions in the
Base
Rate shall not reduce the interest to accrue pursuant to this Note below
the
Highest Lawful Rate until the total amount of interest accrued equals the
amount
of interest that would have accrued if a varying rate per annum equal to
the
interest rate under the Note had at all times been in effect. If the total
amount
of interest paid or accrued pursuant to this Note under the foregoing
provisions
is less than the total amount of interest that would have accrued if a
varying
rate per annum equal to the interest rate under this Note had been in
effect,
then the undersigned agrees to pay to Lender an amount equal to the
difference
between (a) the lesser of (i) the amount of interest that would have
accrued if
the Highest Lawful Rate had at all times been in effect, or (ii) the amount
of
interest that would have accrued if a varying rate per annum equal to the
interest rate under the Note had at all times been in effect, and (b) the
amount
of interest accrued in accordance with the other provisions of this Note
and the
Loan Agreement.
This Note is the "Note" referred to in the Loan Agreement, and is
issued
pursuant thereto. Reference is made to the Loan Agreement for a statement
of the
additional rights and obligations of the undersigned and Lender. In the
event of
any conflict between the terms hereof and the terms of the Loan Agreement,
the
teens of the Loan Agreement shall prevail. All of the terms, covenants,
provisions, conditions, stipulations, promises and agreements contained in
the
Loan Documents to be kept, observed and/or performed by the undersigned are
made
a part of this Note and are incorporated herein by this reference to the
same
extent and with the same force and effect as if they were fully set forth
herein,
and the undersigned promises and agrees to keep, observe and perform them
or
cause them to be kept, observed and performed, strictly in accordance with
the
terms and provisions thereof.
Each party liable hereon in any capacity, whether as maker, endorser,
surety, guarantor or otherwise, (i) waives presentment for payment, demand,
protest and notice of presentment, notice of protest, notice of non-payment
and
notice of dishonor of this debt and each and every other notice of any kind
respecting this Note and all lack of diligence or delays in collection or
enforcement hereof, (ii) agrees that Lender and any subsequent holder of
this
Note, at any time or times, without notice to the undersigned or its
consent, may
grant extensions of time, without limit as to the number of the aggregate
period
of such extensions, for the payment of any principal, interest or other
sums due
hereunder, (iii) to the extent permitted by law, waives all exemptions
under the
laws of the State of Maryland. and/or any state or territory of the United
States, (iv) to the extent permitted by law, waives the benefit of any law
or
rule of law intended for its advantage or protection as an obligor
hereunder or
providing for its release or discharge from liability hereon, in whole or
in
part, on account of any facts or circumstances other than full and complete
payment of all amounts due hereunder, and (v) agrees to pay, in addition to
all
other sums of money due, all cost of collection and attorney's fees,
whether suit
be brought or not, if this Note is not paid in full when due, whether at
the
stated maturity or by acceleration.
No waiver by Lender or any subsequent holder of this Note of any one
or
more defaults by the undersigned in the performance of any of its
obligations
hereunder shall operate or be construed as a waiver of any future default
or
defaults, whether of a like or different nature. No failure or delay on the
part
of Lender in exercising any right, power or remedy under this Note
(including,
without limitation, the right to declare this Note due and payable) shall
operate
as a waiver thereof, nor shall any single or partial exercise of any such
right,
power or remedy preclude any other or further exercise thereof or the
exercise
of any other right, power or remedy.
If any term, covenant or condition of this Note, or the application of
such
term, covenant or condition to any party or circumstance shall be found by
a
court of competent jurisdiction to be, to any extent, invalid or
unenforceable,
the remainder of this Note and the application of such term, covenant, or
condition to parties or circumstances other than those as to which it is
held
invalid or unenforceable, shall not be affected thereby, and each term,
covenant
or condition shall be valid and enforced to the fullest extent permitted by
law.
Upon determination that any such term is invalid, illegal or unenforceable,
the
undersigned shall cooperate with Lender to amend this Note so as to effect
the
original intent of the parties as closely as possible in an acceptable
manner.
No amendment, supplement or modification of this Note nor any waiver
of any
provision hereof shall be made except in writing executed by the party
against
whom enforcement is sought.
This Note shall be binding upon the undersigned and its successors and
assigns. Notwithstanding the foregoing, the undersigned may not assign any
of its
rights or delegate any of its obligations hereunder without the prior
written
consent of Lender, which may be withheld in its sole discretion.
THIS NOTE IS TO BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS
OF THE STATE OF MARYLAND WITHOUT RESPECT TO ANY OTHERWISE APPLICABLE
CONFLICTS-OF-LAWS PRINCIPLES, BOTH AS TO INTERPRETATION AND PERFORMANCE,
AND THE
PARTIES EXPRESSLY CONSENT AND AGREE TO THE NON-EXCLUSIVE JURISDICTION OF
THE
COURTS OF THE STATE OF MARYLAND AND THE UNITED STATES DISTRICT COURT FOR
THE
DISTRICT OF MARYLAND AND TO THE LAYING OF VENUE IN THE STATE OF MARYLAND,
WAIVING
ALL CLAIMS OR DEFENSES BASED ON LACK OF PERSONAL JURISDICTION, IMPROPER
VENUE,
INCONVENIENT FORUM OR THE LIKE. BORROWER HEREBY CONSENTS TO SERVICE OF
PROCESS
BY MAILING A COPY OF THE SUMMONS TO BORROWER, BY CERTIFIED OR REGISTERED
MAIL,
POSTAGE PREPAID, TO BORROWER'S ADDRESS SET FORTH IN SECTION 9.4 OF THE LOAN
AGREEMENT. BORROWER FURTHER WAIVES ANY CLAIM FOR CONSEQUENTIAL DAMAGES IN
RESPECT OF ANY ACTION TAKEN OR OMITTED TO BE TAKEN BY LENDER IN GOOD FAITH.
THE UNDERSIGNED HEREBY (A) COVENANTS AND AGREES NOT TO ELECT A TRIAL
BY
JURY OF ANY ISSUE TRIABLE OF RIGHT BY A JURY, AND (B) WAIVES ANY RIGHT TO
TRIAL
BY JURY FULLY TO THE EXTENT THAT ANY SUCH RIGHT SHALL NOW OR HEREAFTER
EXIST.
THIS WAIVER OF RIGHT TO TRIAL BY JURY IS GIVEN KNOWINGLY AND VOLUNTARILY BY
THE
UNDERSIGNED, AND THIS WAIVER IS INTENDED TO ENCOMPASS INDIVIDUALLY EACH
INSTANCE
AND EACH ISSUE AS TO WHICH THE RIGHT TO A JURY TRIAL WOULD OTHERWISE
ACCRUE.
LENDER IS HEREBY AUTHORIZED AND REQUESTED TO SUBMIT THIS NOTE TO ANY COURT
HAVING
JURISDICTION OVER THE SUBJECT MATTER AND THE PARTIES HERETO, SO AS TO SERVE
AS
CONCLUSIVE EVIDENCE OF THE UNDERSIGNED'S WAIVER OF THE RIGHT TO JURY TRIAL.
FURTHER, THE UNDERSIGNED HEREBY CERTIFIES THAT NO REPRESENTATIVE OR AGENT
OF
LENDER INCLUDING LENDER'S COUNSEL) HAS REPRESENTED, EXPRESSLY OR OTHERWISE,
TO
ANY BORROWER THAT LENDER WILL NOT SEEK TO ENFORCE THIS WAIVER OF JUDGMENT
TO JURY
TRIAL PROVISION.
IN WITNESS WHEREOF, the parries have caused their authorized officers
to
execute this note as of the date first above written.
BORROWER:
ATTEST: NEWCARE HEALTH CORPORATION,
A Nevada Corporation
By:/s/ Xxxxxx X. Xxxx By: /s/ Xxxxx X. Xxxxxxx [SEAL]
Name: Xxxxxx X. Xxxx Name: Xxxxx Xxxxxxx
Title: Secretary Title: Chairman
ATTEST: NEWCARE, INC., a Florida
Corporation
By:/s/ Xxxxxx X. Xxxx By: /s/ Xxxxx Xxxxx [SEAL]
Name: Xxxxxx X. Xxxx Name: Xxxxx Xxxxx
Title: Secretary Title: President
ATTEST: OAK MANOR NURSING HOME, LTD.,
A Florida limited partnership
By: Equity General Partner, Inc.
Its: General Partner
By:/s/ Xxxxxx X. Xxxx By: /s/ Xxxxx Xxxxx [SEAL]
Name: Xxxxxx X. Xxxx Name: Xxxxx Xxxxx
Title: Secretary Title: President
ATTEST: HEALTHCARE FACILITIES LIMITED PARTNERSHIP,
A Louisiana limited partnership
By: Equity General Partner, Inc.
Its: General Partner
By:/s/ Xxxxxx X. Xxxx By: /s/ Xxxxx Xxxxx [SEAL]
Name: Xxxxxx X. Xxxx Name: Xxxxx Xxxxx
Title: Secretary Title: President
ATTEST: SUNCOAST NURSING HOME, LTD.,
A Florida limited partnership
By: Equity General Partner, Inc.
Its: General Partner
By:/s/ Xxxxxx X. Xxxx By: /s/ Xxxxx Xxxxx [SEAL]
Name: Xxxxxx X. Xxxx Name: Xxxxx Xxxxx
Title: Secretary Title: President
ATTEST: CENTRAL TAMPA NURSING HOME, LTD.
A Florida limited partnership
By: Equity General Partner, Inc.
Its: General Partner
By:/s/ Xxxxxx X. Xxxx By: /s/ Xxxxx Xxxxx [SEAL]
Name: Xxxxxx X. Xxxx Name: Xxxxx Xxxxx
Title: Secretary Title: President
ATTEST: XXXXXXXX XXXXXX NURSING HOME, LTD.
A Florida limited partnership
By: Equity General Partner, Inc.
Its: General Partner
By:/s/ Xxxxxx X. Xxxx By: /s/ Xxxxx Xxxxx [SEAL]
Name: Xxxxxx X. Xxxx Name: Xxxxx Xxxxx
Title: Secretary Title: President
ATTEST: MEMORIAL NURSING CENTER, INC.
A Georgia Corporation
By:/s/ Xxxxxx X. Xxxx By: /s/ Xxxxx Xxxxx [SEAL]
Name: Xxxxxx X. Xxxx Name: Xxxxx Xxxxx
Title: Secretary Title: President
ATTEST: CIMMERON HEALTH CARE, INC.
A Georgia Corporation
By:/s/ Xxxxxx X. Xxxx By: /s/ Xxxxx Xxxxx [SEAL]
Name: Xxxxxx X. Xxxx Name: Xxxxx Xxxxx
Title: Secretary Title: President
ATTEST: XXXXXXXXXX HEALTHCARE, INC.
A Georgia Corporation
By:/s/ Xxxxxx X. Xxxx By: /s/ Xxxxx Xxxxx [SEAL]
Name: Xxxxxx X. Xxxx Name: Xxxxx Xxxxx
Title: Secretary Title: President
ATTEST: XXXXXXXXXX NURSING CENTER, INC.
A Georgia Corporation
By:/s/ Xxxxxx X. Xxxx By: /s/ Xxxxx Xxxxx [SEAL]
Name: Xxxxxx X. Xxxx Name: Xxxxx Xxxxx
Title: Secretary Title: President
ATTEST: FORT VALLEY NURSING CENTER, INC.
A Georgia Corporation
By:/s/ Xxxxxx X. Xxxx By: /s/ Xxxxx Xxxxx [SEAL]
Name: Xxxxxx X. Xxxx Name: Xxxxx Xxxxx
Title: Secretary Title: President
ATTEST: XXXXXXX NURSING CENTER, INC.
A Georgia Corporation
By:/s/ Xxxxxx X. Xxxx By: /s/ Xxxxx Xxxxx [SEAL]
Name: Xxxxxx X. Xxxx Name: Xxxxx Xxxxx
Title: Secretary Title: President
ATTEST: KMH ENTERPRISES, INC.
A Georgia Corporation
By:/s/ Xxxxxx X. Xxxx By: /s/ Xxxxx Xxxxx [SEAL]
Name: Xxxxxx X. Xxxx Name: Xxxxx Xxxxx
Title: Secretary Title: President
ATTEST: WHIGHAM HEALTH & REHABILITATION,
INC., a Georgia Corporation
By:/s/ Xxxxxx X. Xxxx By: /s/ Xxxxx Xxxxx [SEAL]
Name: Xxxxxx X. Xxxx Name: Xxxxx Xxxxx
Title: Secretary Title: President
ATTEST: NEWCARE HOSPITAL CORPORATION,
a Georgia Corporation
By:/s/ Xxxxxx X. Xxxx By: /s/ Xxxxxxx X. Xxxxxx [SEAL]
Name: Xxxxxx X. Xxxx Name: Xxxxxx X. Xxxxxxxxx
Title: Secretary Title: President
ATTEST: NEWCARE NURSING CORPORATION,
a Nevada Corporation
By:/s/ Xxxxxx X. Xxxx By: /s/ Xxxxx Xxxxxxx [SEAL]
Name: Xxxxxx X. Xxxx Name: Xxxxx Xxxxxxx
Title: Secretary Title: President
