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CONVERTIBLE LINE OF CREDIT NOTE EXHIBIT 10.14
$2,500,000.00 HOUSTON, TEXAS JULY 1, 2000
FOR VALUE RECEIVED, the undersigned, U.S. PHYSICAL THERAPY, INC., A
NEVADA CORPORATION (herein called "MAKER"), promises to pay to the order of
SOUTHWEST BANK OF TEXAS, N.A. (herein called "PAYEE," which term herein in every
instance shall refer to any owner or holder of this note) the sum of TWO MILLION
FIVE HUNDRED THOUSAND DOLLARS ($2,500,000.00), together with interest on the
principal hereof from time to time outstanding from the date of advancement
until maturity, at the per annum rate hereinafter stated (computed on the basis
of a year of 365 days and paid for the actual number of days elapsed), said
principal and interest being payable in lawful money of the United States of
America at the banking quarters of Southwest Bank of Texas, N.A., 4400 Post Oak
Park, Houston, Harris County, Texas, or at such other place as Payee may
designate hereafter in writing.
This note is issued pursuant to a letter loan agreement of even date
herewith, by and between Maker and Payee (the "LOAN AGREEMENT"), and reference
is made hereby to the Loan Agreement for certain rights as to the prepayment,
the acceleration of the maturity hereof and collateral securing the payment
hereof; and this note is entitled to all the benefits of the Loan Agreement.
Subject to the terms and conditions of the Loan Agreement, until December 31,
2000, the undersigned may borrow under one or more loans hereunder in an
aggregate principal amount not to exceed $2,500,000.00. Principal outstanding
under this note on December 31, 2000, shall be due and payable as provided in
the Loan Agreement.
The principal balance hereof advanced and from time to time remaining
unpaid shall bear interest during each day of the term of the loan evidenced
hereby at a variable per annum rate equal to the lesser of (A) a per annum rate
that is equal to (herein called the "BASIC RATE") one-half of one percent (1/2%)
plus the prime rate of interest (herein called the "PRIME RATE"), being the
variable per annum rate of interest most recently announced by Southwest Bank of
Texas, N.A. (herein sometimes called the "BANK") as its "prime rate," with the
understanding that the Bank's "prime rate" may be one of several base rates and
serves as a basis upon which effective rates of interest are from time to time
calculated for loans making reference thereto and may not be the lowest of the
Bank's base rates, which Basic Rate shall change when and as the
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Prime Rate shall change, effective on the day of such change or (B) the Maximum
Rate (hereinafter defined). Notwithstanding the foregoing, if at any time the
Basic Rate shall exceed the Maximum Rate and thereafter the Basic Rate shall
become less than the Maximum Rate, the rate of interest payable hereunder shall
be the Maximum Rate until the Payee shall have received the amount of interest
it would have received otherwise if the interest payable hereunder had not been
limited by the Maximum Rate during the period of time the Basic Rate exceeded
the Maximum Rate.
All past due principal and interest of this note, whether due as the
result of acceleration of maturity or otherwise, shall bear interest at the
lesser of (1) a rate that is five percentage points above the Prime Rate as it
varies or (2) the maximum lawful rate of interest permitted by the applicable
usury laws, now or hereafter enacted, which interest rate (herein called the
"MAXIMUM RATE") shall change when and as said laws shall change to the extent
permitted by said laws, effective on the day such change in said laws becomes
effective, from the date the payment thereof shall have become due until the
same have been fully discharged by payment.
The principal and interest of this note are due and payable at the
offices of said Payee in Houston, Harris County, Texas, in accordance with, and
as set forth in, the Loan Agreement.
Maker and any and all sureties, guarantors and endorsers of this note
and all other parties now or hereafter liable hereon, severally waive grace,
demand, presentment for payment, protest, notice of any kind (including, but not
limited to, notice of dishonor, notice of protest, notice of intention to
accelerate and notice of acceleration) and diligence in collecting and bringing
suit against any party hereto, and agree (i) to all extensions and partial
payments, with or without notice, before or after maturity, (ii) to any
substitution, exchange or release of any security now or hereafter given for
this note, (iii) to the release of any party primarily or secondarily liable
hereon, and (iv) that it will not be necessary for Payee, in order to enforce
payment of this note, to first institute or exhaust Payee's remedies against
Maker or any other party liable therefor or against any security for this note.
In the event of default hereunder or under any of the instruments
securing payment hereof and this note is placed in the hands of an attorney for
collection (whether or not suit is filed), or if this note is collected by suit
or legal proceedings or through the probate court or bankruptcy proceedings,
Maker agrees
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to pay all reasonable attorneys' fees and all expenses of collection and costs
of court.
It is the intention of the parties hereto to comply with applicable
usury laws; accordingly, Section 10(f) of the Loan Agreement is incorporated
herein by reference and shall have the same force and effect as if set forth
herein.
This note shall be governed by and construed under the laws of the
State of Texas and applicable United States federal law. This note is subject to
the arbitration provisions under Article 10(d) of the Loan Agreement.
Any check, draft, money order or other instrument given in payment of
all or any portion hereof may be accepted by Payee and handled in collection in
the customary manner, but the same shall not constitute payment hereunder or
diminish any rights of Payee except to the extent that actual cash proceeds of
such instrument are unconditionally received by Payee.
MAKER:
U.S. PHYSICAL THERAPY, INC., a
Nevada corporation
By: /s/ J. Michael Mullin
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J. Michael Mullin
Chief Financial Officer
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