PROMISSORY NOTE
Amount: $1,948,066.00 December 5, 1995
FOR VALUE RECEIVED, the undersigned (hereinafter together referred to as
"Maker") jointly and severally promise to pay to the order of Beverly Health and
Rehabilitation Services, Inc., a California corporation (hereinafter referred to
as "Holder"), or its registered assigns, at 5111 Rogers Avenue, Suite 40-A in
Fort Smith, Arkansas 72919-0155, or at such place or to such other party or
parties as the Holder of this Note may from time to time designate, the
principal sum of One Million, Nine Hundred Forty-Eight Thousand Sixty-Six and
00/100 Dollars ($1,948,066.00) with interest at the rate of 12% per annum
accruing from October 1, 1995, on all sums at any time remaining unpaid.
Principal payments in the amount of $250,000.00 each shall be due and payable on
the tenth (10th) of each month hereafter comencing January 10, 1996, together
with accrued interest until July 10, 1996 when the entire unpaid balance of
principal together with accrued interest shall be due and payable.
The occurrence of any of the following events shall constitute a default
hereunder: (1) failure to pay (a) any installment or payment due hereunder
within five (5) days after the same is due, (b) any insurance premiums or tax
installment Maker is required to pay under, and within the time provided in, any
mortgage securing the premises known as Bentley Gardens, Pond Point, Fairfield
Manor and Country Manor located in Milford, West Haven, Norwalk and Prospect,
Connecticut respectively, (c) any installment of principal or interest due on
any obligation secured by said mortgages
If default is made in the payment of the whole or any part of this Note
when due, after fifteen (15) days written notice of such detault, then or at any
time thereafter during the continuance of any such default, the entire principle
of this Note remaining at the time unpaid, together with the accrued interest
thereon, at the rate of 18% per annum, shall, at the election of the Holder
hereof, without further notice to the Maker of such election and without further
demand or presentment, become immediately due and payable at the place of
payment aforesaid, and all costs and expenses of collection, including a
reasonable attorney's fee, shall be added to and become part of the total
indebtedness.
In the event of any default, the failure of the Holder hereof to exercise
promptly any of its rights hereunder shall not constitute a waiver of such
rights while such default continues, nor a waiver of such rights in connection
with any future default on the part of the Maker.
The Maker, any endorsers or guarantors hereof, and all other parties who
may become liable for all or any part of this Note, severally waive presentment
for payment, protest and demand, and notice of protest, demand, dishonor and
nonpayment, and hereby expressly consent to any such extension of time for
payment or other indulgence and to any substitution, exchange or release of
collateral granted by the Holdcr hereof, and to any number of renewals or
extensions of the time of payment of this Note.
Notwithstanding any provision hereof, it is not intended by this Note to
impose upon the Maker any obligation to pay interest in excess of the maximum
rate of interest permitted by law, and any interest which so exceeds such
maximum rate of interest shall automatically abate to the extent of such
excess.
This Note may be prepaid at any time without premium or penalty.
This Note and liablity of all parties hereunder shall be governed by the
laws of the State of Connecticut.
This Note is given in connection with that certain Termination-Transition
Agreement dated June 1, 1995 regarding the Fairfield Manor Healthcare Center,
Bentley Gardens Healthcare Center, Pond Point Healthcare Center and Country
Manor Healthcare Center.
"MAKER"
Jack Friedler
an individual
/s/ Jack Friedler
------------------------------
Attest: Lexington Health Care Group,
a Connecticut limited
liability corporation
/s/ Lassman By: /s/ Jack Friedler
- ------------------------- --------------------------
SEAL
Title: Manager
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[LETTERHEAD OF BEVERLY ENTERPRISES]
November 28, 1995
Jack Friedler
Lexington Health Care Group, L.L.C.
35 Park Place
New Britain, Conn. 06052
Re: Promissory Note for Beverly's receivables collected by Lexington at
Fairfield, Bentley Gardens, Pond Point and Country Manor
Dear Jack:
Enclosed you will find a revised Promissory Note which has been drafted in
order to formalize our agreement that you are remit to Beverly all monies
collected as of October 1, 1995, for Beverly's accounts receivable for the
above-referenced facilities. Per your letter dated November 21, 1995, I have
revised the original amount owed as of October 1, 1995, by subtracting from that
original amount the $500,000.00 payment of October 25th, the $229,467.92 payment
of November 21st and the utility adjustment of $10,196.66 from the original
balance of $2,687,730.58. The new balance is $1,948,066.00. We reject your
request for further adjustments for accrued vacation for employees at the
facilities as we have already paid directly to the employees all vacation
benefits due employees as of the effective date as set out in the
Termination-Transition Agreement.
We acknowledge receipt of your recent payments and are considering your
request for payout. In the event that we agree to a payout we will modify this
Note accordingly. However, it must be understood that we will only consider your
request for payout so long as you execute this Note without further revision and
return it to us no later that Wednesday, December 6, 1995. Be assured that this
letter will be the last notice that you receive from us in this matter. In the
event that you fail to act accordingly we shall no other choice but to instruct
local counsel to file suit in order to recover our money.
Sincerely,
/s/ David J. McDonough
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David J. McDonough
Attorney Transactions
cc: James R. Pietrzak
Brad McKown
Edwin A. Lassman/860-278-2179