Exhibit 10.4
SUBSTITUTED AND AMENDED
TERM NOTE
$11,000,000.00 January 8, 1998
Chicago, Illinois
Substituted and Amended
March 29, 1999
FOR VALUE RECEIVED, each of the undersigned (individually, a "Borrower"
and collectively, the "Borrowers"), jointly and severally, hereby promises to
pay to the order of FLEET CAPITAL CORPORATION, a Rhode Island corporation, in
its capacity as agent (in such capacity, "Agent") for itself, as a "Lender" and
each of the other "Lenders" (as such terms are defined in the Loan Agreement
hereinafter referred to), for the ratable benefit of all Lenders, in such coin
or currency of the United States which shall be legal tender in payment of all
debts and dues, public and private, at the time of payment, the principal sum of
ELEVEN MILLION AND NO/100 DOLLARS ($11,000,000.00), together with interest from
and after the date hereof on the unpaid principal balance outstanding at a
variable rate per annum equal to the Base Rate plus one and one-half percent
(1.5%). If Borrowers exercise the LIBOR Option as provided in Section 2.3 of the
Loan Agreement, interest shall accrue at a variable rate equal to the LIBOR Rate
plus three percent (3%).
This Term Note (this "Note") is referred to in, and is issued pursuant
to, that certain Loan and Security Agreement of even date herewith by and among
the undersigned, Agent and Lenders (the "Loan Agreement") and is entitled to all
of the benefits and security of the Loan Agreement. All of the terms, covenants
and conditions of the Loan Agreement and all other instruments evidencing or
securing the indebtedness hereunder (including, without limitation, the
"Security Documents") are hereby made a part of this Note and are deemed
incorporated herein in full. All capitalized terms used herein, unless otherwise
specifically defined in this Note, shall have the meanings ascribed to them in
the Loan Agreement.
It is expressly understood and agreed by Borrowers that (a) the
principal balance of this Note includes certain Obligations hitherto evidenced
by that certain Term Note dated January 8, 1998, in the original principal
amount of $15,000,000 (the "Existing Note"), executed by the Borrowers (as
defined in the Original Loan Agreement) and payable to the Agent and (b) to the
extent any of such Obligations are included in the principal balance of this
Note, this Note, (i) merely re-evidences the obligations hitherto evidenced by
the Existing Note, (ii) is given in substitution for and not in repayment of the
Existing Note and (iii) is in no way intended to constitute a novation of the
Existing Note.
Each Borrower acknowledges and understands that the Base Rate merely
serves as a basis upon which effective rates of interest are calculated for
loans making reference to the per annum
rate of interest publicly announced by Bank from time to time as its prime rate
for commercial loans whether or not such rate is the lowest rate charged by Bank
to its most preferred borrowers (and if such prime rate for commercial loans is
discontinued by Bank as a standard, a comparable reference rate designed by Bank
as a substitute therefor shall be the Base Rate) and that such rate may not be
the lowest or best rate at which Bank calculates interest or extends credit.
After the date hereof, the rate of interest in effect hereunder shall be
increased or decreased, as the case may be, by an amount equal to any increase
or decrease in the Base Rate, with such adjustments to be effective as of the
opening of business on the date that any such change in the Base Rate becomes
effective. The Base Rate in effect on the date hereof shall be the Base Rate
effective as of the opening of business on the date hereof, but if this Note is
executed on a day that is not a Business Day, the Base Rate in effect on the
date hereof shall be the Base Rate effective as of the opening of business on
the last Business Day immediately preceding the date hereof. Upon and after the
occurrence of an Event of Default, and during the continuation thereof, at the
option of Agent or Majority Lenders, the outstanding principal balance of this
Note shall bear interest at a variable rate per annum equal to the Default Rate.
All interest hereunder shall be computed in the manner provided in
Section 2 of the Loan Agreement and shall be due and payable on the dates
provided in subsection 3.2(b).
In no contingency or event whatsoever, whether by reason of advancement
of the proceeds hereof or otherwise, shall the amount paid or agreed to be paid
to Agent for the use, forbearance or detention of money advanced hereunder
exceed the highest lawful rate permissible under any law which a court of
competent jurisdiction may deem applicable hereto. In the event that such a
court determines that Agent has charged or received interest hereunder in excess
of the highest applicable rate, such rate automatically shall be reduced to the
maximum rate permitted by law and Agent promptly shall refund to Borrowers any
interest received by it in excess of the maximum lawful rate. It is the intent
hereof that no Borrower pay or contract to pay, and that Agent not receive or
contract to receive, directly or indirectly in any manner whatsoever, interest
in excess of that which may be paid by Borrowers under applicable law.
The principal amount of this Note shall be due and payable on the
respective dates set forth below in the respective amounts set forth opposite
such dates:
Payment Date Payment Amount
April 1, 1999 $ 375,000
July 1, 1999 $ 375,000
October 1, 1999 $ 375,000
January 1, 2000 $ 375,000
April 1, 2000 $ 625,000
July 1, 2000 $ 625,000
October 1, 2000 $ 625,000
January 1, 2001 $ 625,000
Payment Date Payment Amount
April 1, 2001 $ 625,000
July 1, 2001 $ 625,000
October 1, 2001 $ 625,000
January 1, 2002 $ 625,000
April 1, 2002 $ 875,000
July 1, 2002 $ 875,000
October 1, 2002 $ 875,000
January 1, 2003 $ 875,000
April 1, 2003 $ 875,000
July 1, 2003 The then outstanding
aggregate principal
balance thereof
Additionally, Borrowers shall make mandatory prepayments on this Note
as set forth in subsections 3.3(a) and (b) of the Loan Agreement. Borrowers may
prepay this Note as specified in subsection 3.3(c) the Loan Agreement.
Notwithstanding the foregoing, the entire unpaid principal balance and
accrued interest on this Note shall be due and payable immediately upon any
termination of the Loan Agreement.
Borrowers may terminate the Loan Agreement and, in connection with such
termination, prepay this Note in the manner provided in Section 4.2 of the Loan
Agreement. If Agent shall terminate the Loan Agreement, then, in connection with
such termination, Borrowers shall prepay the Note in the manner provided in
Section 4.2 of the Loan Agreement.
The occurrence of an Event of Default under the Loan Agreement,
including the failure to pay any installment of interest in full in accordance
with the terms of the Loan Agreement, shall constitute an event of default under
this Note and shall entitle Agent, at the option of the Agent, to declare the
then outstanding principal balance and accrued interest hereof to be, and the
same shall thereupon become, immediately due and payable without notice to or
demand upon any Borrower, all of which each Borrower hereby expressly waives. If
this Note is collected by or through an attorney at law, then Borrowers shall be
obligated to pay, in addition to the unpaid principal balance and accrued
interest hereof, reasonable attorney's fees.
Time is of the essence of this Note. To the fullest extent permitted by
applicable law, each Borrower, for itself and its legal representatives,
successors and assigns, expressly waives presentment, demand, protest, notice of
dishonor, notice of non-payment, notice of maturity, notice of protest,
presentment for the purpose of accelerating maturity, diligence in collection,
and the benefit of any exemption or insolvency laws.
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Wherever possible each provision of this Note shall be interpreted in
such a manner as to be effective and valid under applicable law, but if any
provision of this Note shall be prohibited or invalid under applicable law, such
provision shall be ineffective to the extent of such prohibition or invalidity
without invalidating the remainder of such provision or remaining provisions of
this Note. No delay or failure on the part of Lender or Agent in the exercise of
any right or remedy hereunder shall operate as a waiver thereof, nor as an
acquiescence in any default, nor shall any single or partial exercise by Lender
or Agent of any right or remedy preclude any other right or remedy. Lender or
Agent, at its option, may enforce its rights against any collateral securing
this Note without enforcing its rights against any Borrower, any guarantor of
the indebtedness evidenced hereby or any other property or indebtedness due or
to become due to any Borrower. Each Borrower agrees that, without releasing or
impairing such Borrower's liability hereunder, Lender or Agent may at any time
release, surrender, substitute or exchange any collateral securing this Note and
may at any time release any party primarily or secondarily liable for the
indebtedness evidenced by this Note.
This Note shall be governed by, and construed and enforced in
accordance with, the laws of the State of Illinois without regard to conflicts
of laws principles.
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IN WITNESS WHEREOF, each Borrower has caused this Note to be duly
executed and delivered in Chicago, Illinois, on the date first above written.
INTEGRA NEUROCARE LLC, a
Delaware limited liability company
By: NEUROCARE HOLDING CORPORATION,
its sole Member
By: /s/John B. Henneman, III
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John B. Henneman, III
REDMOND NEUROCARE LLC, a
Delaware limited liability company
By: INTEGRA NEUROCARE LLC, its
sole Member
By: INTEGRA HOLDING CORPORATION, its
sole Member
By: /s/John B. Henneman, III
-------------------------------
John B. Henneman, III
HEYER-SCHULTE NEUROCARE, INC., a
Delaware corporation
By: /s/John B. Henneman, III
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John B. Henneman, III
CAMINO NEUROCARE, INC., a
Delaware corporation
By: /s/John B. Henneman, III
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John B. Henneman, III