Exhibit 10.134
RENEWAL REIMBURSEMENT PROMISSORY NOTE
$2,619,251.53 December 15, 2002
Nashville, Tennessee
FOR VALUE RECEIVED, the undersigned, ADVOCAT INC., a Delaware
corporation, having its principal place of business in the State of Tennessee
(the "Borrower"), promises to pay to the order of AMSOUTH BANK (the "Bank"), in
lawful currency of the United States of America, at AmSouth Center, 315
Deaderick Street, Nashville, Tennessee 37237, or at such other place as the
holder from time to time may designate in writing, the principal sum of TWO
MILLION SIX HUNDRED NINETEEN THOUSAND TWO HUNDRED FIFTY ONE AND 53/100
($2,619,251.53) DOLLARS, with interest computed thereon at the interest rate of
seven and one-half percent (7.5%) per annum with principal and interest payable
as follows:
(a) Monthly payments of principal in the amount of $63,333.33
on the date this Note is executed by Borrower and $83,333.33 on the fifteenth
(15th) day of each month thereafter beginning on January 15, 2003 with a final
balloon payment of principal and interest due and payable on the 11th day of
July, 2003 (the "Maturity Date").
Prepayment may be made at any time without premium and the
following shall be mandatory prepayments:
(a) Upon the sale of the Carteret Care nursing facility of
Diversicare Assisted Living Services, NC, LLC, or an affiliate entity thereof,
located in North Carolina, all net proceeds after payment of normal, customary
and good faith expenses of sale, shall be paid upon the indebtedness evidenced
by this Reimbursement Promissory Note, pursuant to the existing Deed of Trust
and Security Agreement executed by Diversicare Assisted Living Services, NC,
LLC, dated November 15, 1999;
(b) Upon the sale or sales of any or all of the six (6)
nursing homes located in the counties of Dewitt, Refugio, Goliad, Caldwell and
Lampassas, Texas and secured by Deeds of Trust and Security Agreements executed
by Diversicare Leasing Corp. to David R. Brewer, Trustee, and AmSouth Bank (the
"Texas Deeds of Trust"), all net proceeds after payment of normal, customary and
good faith expenses of sale, shall be paid upon the indebtedness evidenced by
this Renewal Reimbursement Promissory Note, pursuant to the Texas Deeds of
Trust; and
(c) All Surplus Cash Flow available to Advocat Inc. or any of
the other "Debtors" as defined in the Master Amendment to Loan Documents and
Agreement dated effective October 1, 2000, executed between Bank, Borrower and
other subsidiaries or affiliates of Borrower, and all of which including
Borrower, are defined as "Debtors" therein (the Master Amendment to Loan
Documents and Agreement, as amended by that First Amendment to Master Amendment
to Loan Documents and Agreement executed by the parties on November 28, 2000 and
dated as of October 1, 2000, and as further amended, being herein called the
"Master Amendment") after making the required payments on the Amendment to
Renewal Revolving Promissory Note dated October 1, 2000 in the principal amount
of $4,500,000.00, as amended, the Renewal Promissory Note in the principal
amount of $9,412,383.87 dated October 1, 2000, and the Renewal Promissory
1
Note (Overline Facility) in the principal amount of $3,500,000.00 dated October
1, 2000 shall be paid upon the indebtedness evidenced by this Renewal
Reimbursement Promissory Note until it shall have been paid in full. "Surplus
Cash Flow" for purposes of this Section shall be defined as set forth in the
Master Amendment.
This Renewal Reimbursement Promissory Note is a renewal and replacement
of the Reimbursement Promissory Note dated October 1, 2000, in the original
amount of $3,000,000.00, as amended, and is executed pursuant to the terms of
the Second Amendment to the Master Amendment dated as of December 15, 2002 and
executed by the Bank, Borrower and other subsidiaries or affiliates of Borrower,
(the "Second Amendment"). This Renewal Reimbursement Promissory Note (and any
and all extensions, modifications, renewals or amendments thereof) is (1)
secured by the collateral described or referred to in the Loan Documents, as
defined in the Master Amendment, and (2) the breach or occurrence of a default
under the Loan Documents, at the option of the Bank, will constitute a default
hereunder.
For so long as any indebtedness evidenced by this Renewal Reimbursement
Note shall remain outstanding and unpaid, no cash or funds of the Debtors, as
defined in the Master Amendment, or any of them, shall be used to pay dividends
on the Preferred Stock, as defined in the Master Amendment or to pay interest on
the Subordinated Note, as defined in the Master Amendment.
Both principal and interest due on this Reimbursement Promissory Note
are payable in Nashville, Tennessee, at par in lawful money of the United States
of America.
Time is of the essence of this Renewal Reimbursement Note. It is
expressly agreed that, at the option of Bank in the event of default hereunder
or under any of the Loan Documents, the entire unpaid principal sum evidenced by
this Renewal Reimbursement Note, together with interest accruing after the
Maturity Date on the unpaid sum at the lesser of fifteen percent (15%) per
annum, or the maximum rate then allowed by applicable law shall at the option of
any holder, without further notice, become due and payable forthwith. All such
interest shall be paid at the time of and as a condition precedent to the curing
of any default. Failure of the holder to exercise this right of accelerating the
maturity of the debt, or indulgence granted from time to time, shall in no event
be considered as a waiver of said right of acceleration or stop the holder from
exercising said right. Interest shall be computed for the actual number of days
elapsed on the basis of a year consisting of three hundred and sixty (360) days.
If default is made in the payment of any payment due hereunder,
including but not limited to mandatory prepayments as set forth herein, when the
same shall become due or mature, or if default is made in the payment of the
indebtedness hereunder at maturity, or in the event of default in or breach of
any of the terms, provisions or conditions of any of the Loan Documents or any
instrument(s) given to evidence or secure this Renewal Reimbursement Promissory
Note, then at the election of the legal holder hereof, at any time thereafter
made and without demand or notice, the owner and holder of this Renewal
Reimbursement Promissory Note shall have the right to declare all sums unpaid
hereon at once due and payable. In the event of such default, and the same is
placed in the hands of an attorney for collection, or a suit is filed hereon, or
if the proceedings are held in bankruptcy, receivership, or the reorganization
of Borrower, or any person or entity constituting Borrower if Borrower is, or is
composed of, more
2
than one person or entity, or any guarantor or surety of this Renewal
Reimbursement Promissory Note, or other legal or judicial proceedings for the
collection hereof, the undersigned shall pay in addition to the owner and holder
of this Renewal Reimbursement Promissory Note, all court costs and costs of
collection, enforcement or protection of the rights or collateral of Bank
hereunder, including reasonable attorney's fees.
Borrower and all endorsers and signers hereof, and each of them,
expressly waive demand, presentment for payment, notice of dishonor, protest,
notice of protest, and diligence in collection and all other notices or demands
whatsoever with respect to this Renewal Reimbursement Promissory Note or the
enforcement hereof and consent that the time of said payments or any part
thereof may be extended by the holder hereof and as sent to any substitution,
exchange, or release of collateral permitted by the holder hereof, all without
and anywise modifying, altering, releasing, affecting or limiting their
respective liability. This Renewal Reimbursement Promissory Note may not be
changed orally, but only by an agreement in writing signed by the party against
whom enforcement of any waiver, change, modification or discharge is sought.
The term obligor, as used in this Renewal Reimbursement Promissory
Note, shall mean all parties, and each of them, directly or indirectly obligated
for the indebtedness that this Renewal Reimbursement Promissory Note evidences,
whether as principal, maker, endorser, surety, guaranty, or otherwise.
In no event (including but not limited to prepayment, default, demand
for payment, or acceleration of maturity) shall the interest taken, reserved,
contracted for, charged or received in connection herewith, under the Loan
Documents or otherwise, exceed the maximum amount permitted by applicable law
(the "Maximum Amount"). If, from any possible construction of any document,
interest would otherwise be payable in excess of the Maximum Amount, then ipso
facto, such document shall be reformed and the interest payable reduced to the
Maximum Amount, without necessity of execution of any amendment or new document.
If Bank ever receives interest in an amount which apart from this provision
would exceed the maximum amount, the excess shall, without penalty, be applied
to the unpaid principal balance of the loan obligations in inverse order of
maturity of installments and not to the payment of interest, or be refunded to
the Borrower, at the election of the Bank in its full discretion or as required
by applicable law.
This instrument shall be governed by the laws of the State of
Tennessee, except as such may be preempted by applicable laws of the United
States of America governing the charging or receiving of interest.
The provisions hereof shall be binding upon the parties, their
successors and assigns. The provisions hereof are severable such that the
invalidity or unenforceability of any provision hereof shall not affect the
validity or enforceability of the remaining provisions.
3
IN WITNESS WHEREOF, this instrument has been executed on the day and
year first above written.
BORROWER:
ADVOCAT INC., a Delaware corporation
By: /s/ William R. Council, III
-------------------------------------
William R. Council, III
Title: CEO & President
--------------------------------
4