Exhibit 10.6
PROMISSORY NOTE

      $3,662,000.00   Effective November 6, 2008

FOR VALUE RECEIVED, RHA STROUD, LLC, an Oklahoma limited liability company,
d/b/a Stroud Regional Medical Center (hereinafter referred to as the
“Borrower”), unconditionally promises to pay to the order of VALLIANCE BANK
(“Lender”), at 1601 N.W. Expressway, Oklahoma City, OK 73118, or at such other
place as may be designated in writing by the holder of this promissory note, the
principal sum not to exceed THREE MILLION SIX HUNDRED SIXTY-TWO THOUSAND AND
00/100 Dollars ($3,662,000.00), together with interest thereon at the rate
hereinafter specified:
INTEREST RATE. Interest shall accrue on the outstanding principal balance of
this loan at the rate of Wall Street Journal Prime Rate plus two percent
(2.00%), adjusted at the end of each calendar quarter. Interest on this Note
shall be computed on the basis of a 360 day year. In no event shall the interest
rate be less than seven percent (7.0%) per annum. The Wall Street Journal Prime
Rate (WSJP) means that annual rate of interest published in the Wall Street
Journal and is defined herein as the base rate on corporate loans posted by at
least 75% of the nations thirty (30) largest banks or a similar substitute rate
determined by the Lender in its sole discretion as most nearly approximating
that rate in the case this prime rate is no longer published. Each change in the
WSJP shall become effective without notice (which notice is hereby waived) on
the date of change.
PAYMENT TERMS. Beginning on November 30, 2008, and on the last day of each month
thereafter, Borrower shall pay Lender monthly installment payments of principal
and interest based upon a sixteen (16) year amortization. On the Maturity Date
of November 6, 2024, all accrued interest and unpaid principal shall be due and
payable in full. Lender may adjust the monthly payments as needed to provide for
payment in full within the stated amortization period.
LATE CHARGES: Notwithstanding the grace period, Lender may assess a late charge
if a payment is more than 10 days late. The charge will be $100.00 for each late
payment. This charge will be paid promptly but only once for each late payment.
In no event shall these charges, either before or after maturity, be greater
than permitted by law.
DEFAULT INTEREST: Any sum not paid when due shall bear interest at a rate of six
percent (6%) per annum greater than the per annum interest rate prevailing on
this Note at the time the unpaid amount came due, but in no event at a rate less
than ten percent (10%) per annum.
Of even date herewith the Borrower and Lender have entered into that certain
Loan Agreement (“Agreement”). This Promissory Note is defined in the Agreement
as the Promissory Note. Unless otherwise defined herein, all words and phrases
with their initial letter capitalized shall be afforded the meaning given in the
Agreement.

 

 

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The Lender’s records of advances and repayments will be prima facie evidence of
the amount owed by the Borrower to the Lender with respect to this Note, in the
absence of manifest error.
All payments made upon this Note shall be applied first to the outstanding
accrued interest, if any, through the date of payment and the balance, if any,
to the principal balance due and owing under this Note.
PREPAYMENT: On any installment payment date additional payments may be made to
be credited to principal. Borrower agrees to a prepayment premium of five
percent (5.0%) of any additional principal amount paid in year one; four percent
(4%) in year two three percent (3.0%) in year three; two percent (2.0%) in year
four, and one percent (1.0%) in year five. After the fifth year Borrower shall
have the right to make any prepayment of principal without a premium cost.
Prepayments shall be credited to installments of principal in the inverse order
of their maturity. Monthly payments shall not be reduced as a result of any
prepayments. To the extent permitted by law, the foregoing prepayment premium
shall be payable regardless of whether the loan is prepaid voluntarily or
involuntarily. Any prepaid amounts specified in a notice of prepayment, as
aforesaid, shall become due and payable at the time provided in said notice.
Borrower agrees that if, and as often as, this Note is placed in the hands of an
attorney for collection or to defend or enforce any of the Lender’s rights
hereunder or under any instrument securing payment of this Note, Borrower shall
pay the Lender its reasonable attorneys’ fees and all court costs and other
expenses incurred in connection therewith.
It is expressly understood that time is of the essence of this Note, and if the
Borrower shall fail to pay, within ten (10) days of when due, any amount payable
under the provisions of this Note or fail to perform any other obligation to the
Lender, or upon the occurrence of an Event of Default under the Agreement such
event shall constitute a default hereunder (any of the foregoing being
hereinafter referred to as “Default”). Upon Default (i) this Note and all other
liabilities together with all accrued but unpaid interest hereon and thereon, at
the option of the Lender, and without notice, demand or presentment, or notice
of intent to accelerate to the Borrower or any other person or party, unless
specifically provided in the Agreement, may be declared, and thereupon
immediately shall become, due and payable; and (ii) the Lender may exercise,
from time to time, any and all other rights, remedies and recourses now or
hereafter existing in equity, at law, herein or under the Agreement, any other
Loan Documents between Borrower and Lender, by virtue of statute or otherwise,
including but not limited to, all rights and remedies available to it under the
Uniform Commercial Code as in effect from time to time in the State of Oklahoma
as the Lender may elect, and the right to foreclose any and all liens and
security interests securing this Note. Notwithstanding anything herein or in the
Agreement to the contrary, this Note and all other liabilities of Borrower to
Lender, at the option of Lender, may be accelerated, without notice or demand of
any kind in the event Borrower fails to make when due any payments to Lender as
required herein or in the Agreement.

 

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The invalidity, or unenforceability in particular circumstances, of any
provision of this Note shall not extend beyond such provision or circumstances,
and no other provision of this instrument shall be affected thereby.
Borrower expressly stipulates and agrees that it is the intent of Borrower and
Lender at all times to comply with applicable state law or applicable United
States federal law (to the extent that it permits Lender to contract for,
charge, take, reserve, or receive a greater amount of interest than under state
law) and that this section shall control every other covenant and agreement in
this Note and the other Loan Documents. If the applicable law (state or federal)
is ever judicially interpreted so as to render usurious any amount called for
under the Note or under any of the other Loan Documents, or contracted for,
charged, taken, reserved, or received with respect to the Note, or if Lender’s
exercise of the option to accelerate the maturity of the Note, or if any
prepayment by Borrower results in Borrower having paid any interest in excess of
that permitted by applicable law, then it is Borrower’s and Lender’s express
intent that all excess amounts theretofore collected by Lender shall be credited
on the principal balance of the Note (or, if the Note has been or would thereby
be paid in full, refunded to Borrower), and the provisions of the Note and the
other Loan Documents immediately shall be deemed reformed and the amounts
thereafter collectible hereunder and thereunder reduced, without the necessity
of the execution of any new documents, so as to comply with the applicable law,
but so as to permit the recovery of the fullest amount otherwise called for
hereunder or thereunder. All sums paid or agreed to be paid to Lender for the
use, forbearance, or detention of the loan proceeds evidenced by the Note shall,
to the extent permitted by applicable law, be amortized, prorated, allocated,
and spread throughout the full stated term of the Note until payment in full so
that the rate or amount of interest on account of the Note does not exceed the
maximum rate permitted under applicable law from time to time in effect and
applicable to the Note for so long as the Note is outstanding. Notwithstanding
anything to the contrary contained herein or in any of the other Loan Documents,
it is not the intention of Lender to accelerate the maturity of any interest
that has not accrued at the time of such acceleration or to collect unearned
interest at the time of such acceleration.
This Note, to the extent of the full face amount hereof, evidences indebtedness
of Borrower to Lender. This Note is issued by the Borrower as part of a
commercial transaction and no part of this loan is for a personal use.
Borrower hereby consents to the jurisdiction and/or venue of any state, district
court or federal district court within the State of Oklahoma, as Lender may
elect with respect to any action involving this Note.
BORROWER HEREBY VOLUNTARILY, AND KNOWINGLY, IRREVOCABLY, AND UNCONDITIONALLY
WAIVES ANY RIGHT TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE (WHETHER
BASED UPON CONTRACT, TORT OR OTHERWISE) BETWEEN THE BORROWER AND LENDER ARISING
OUT OF OR IN ANY WAY RELATED TO THIS NOTE OR ANY OTHER RELATED LOAN DOCUMENT.

 

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Borrower stipulates and agrees that the Lender may, at its sole discretion,
assign this Note to any such person it may select, upon such terms and
conditions as it may deem appropriate, and that such assignee shall thereafter
become the holder of this Note and shall be entitled to enforce all rights,
remedies, and other benefits which shall or may inure to the benefit of the
Lender.
Borrower further stipulates, represents and agrees that this instrument
evidences the valid, enforceable, and binding obligation of the Borrower to the
Lender in accordance with the terms and provisions hereof, without any defense
(as of the date of this Note) to the enforcement thereof, whether denominated as
affirmative defense, offset, counterclaim, or otherwise, and whether at law or
in equity. Borrower hereby waives all defenses (existing as of the date of this
Note and/or based upon acts or omissions occurring prior to the date of this
Note) to the enforcement of this Note.
IN WITNESS WHEREOF, Borrower has executed this instrument this _____ day of
November 2008, and made effective as of the date first above appearing.

              “BORROWER”

RHA STROUD, LLC, an Oklahoma limited liability
company
      By:   Rural Hospital Acquisition, LLC as its Manager                By:  
          Name:   Dennis M. Smith          Title:   Manager   

 

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