Document:

Exhibit 10.1

 

Bank of Atlanta

 

	
$5,000,000.00
    	
July 27, 2011
    	
 
    

 

TERM NOTE

 

FOR VALUE RECEIVED, the undersigned, jointly and severally if more than one, promises to pay to the order Bank of Atlanta or its successors or assigns at 1970 Satellite Blvd., Duluth, Georgia 30097, or such other place as the holder hereof may from time to time designate in writing, the principal sum of Five Million and No/100 Dollars ($5,000,000.00), plus interest on the unpaid principal balance at the rate specified below. Interest shall be calculated on the basis of the actual number of days elapsed over a year of 360 days.

 

For the period commencing on the date hereof and continuing through and until the Maturity Date (hereinafter defined) interest on the principal balance hereof, or portions thereof, outstanding from time to time shall accrue at the rate per annum equal to one and 50/100ths percent (1.50%) plus the prime interest rate (hereinafter referred to as the “Prime”) quoted or published from time to time in the Money Rates section of the Wall Street Journal, or if no such rate is published in the Wall Street Journal, then the nearest comparable published rate, as determined by the holder of this Note. The interest rate shall be adjusted every calendar quarter hereafter upon any change in the Prime to the appropriate percentage above the Prime in effect on such date. At no time shall the interest rate be less than six and 00/100ths percent (6.00%). Accordingly, the rate of interest in effect as of the date hereof, and remaining in effect until and unless a calendar quarter change occurs to the Prime and Prime is at least four and one-half percent (4.50%), is and shall be six and 00/100ths (6.00%) percent per annum.

 

The repayment of this note shall be as follows:

 

	
(i)
    	
 
    	
Equal monthly installments of principal and interest based on a   twenty-five (25) year amortization schedule will be due and payable each in   the amount of 32,512.68 on September 1, 2011 and continuing on the same   day of each and every month thereafter through and including July 27,   2036.
    
	
 
    	
 
    	
 
    
	
(ii)
    	
 
    	
On July 27, 2036 (the “Maturity Date”), the entire outstanding   principal balance of the indebtedness hereby evidenced, together with all   accrued but unpaid interest thereon, and all other sums due to holder hereunder   shall be due and payable in full.
    

 

Payments, when made, shall be applied in a manner and order according to the sole discretion of the holder of this Note. The Note shall be re-amortized on an annual basis.

 

If any payment required to be paid by this Note is not paid in full within ten (10) days after its scheduled due date, the holder hereof may assess a late charge in the amount of five percent (5%) of the unpaid amount of the payment, or the maximum permitted by applicable law, whichever is less.

 

 

The undersigned shall pay the holder of this Note an annual renewal fee of .25/100ths percent (.25%) of the USDA guaranteed portion of the outstanding principal balance of this Note on December 31st of each year.

 

The undersigned and all guarantors and endorsers of this Note waive presentment, demand, protest and notice of non-payment and each of the undersigned is bound as a principal and not as a surety. The undersigned and all guarantors and endorsers hereof agree to any extensions of time of payment and partial payment, before, at or after maturity, without notice. This Note shall bear interest at the rate of five points (5.00%) per annum above the interest rate otherwise payable under the terms of this Note after maturity or in the event of default until paid in full.

 

This Note and any extensions or renewals hereof is secured by (i) that certain Deed to Secure and Security Agreement and Fixture Filing dated of even date herewith and recorded in the Office of the Laurens County Clerk of Superior Court, Georgia, and any and all amendments and replacements thereto, executed by the undersigned in favor of Bank of Atlanta and (ii) other security.

 

Failure to make any payment when due, or any default under any encumbrance or agreement securing this Note, or any default in any document executed simultaneously herewith in connection with the loan, shall cause the entire remaining unpaid balance of principal and interest to be declared immediately due and payable at the option of the holder of this Note.

 

In the event holder shall employ counsel to collect this obligation or to administer, protect or foreclose the security given in connection herewith, the undersigned, jointly and severally if more than one, agrees to pay reasonable attorney’s fees for services of such counsel, whether or not suit is brought, plus costs incurred in connection therewith.

 

In the event of prepayment, in whole or in part, a prepayment penalty rate shall be assessed as follows.

 

1.               If the prepayment occurs on or before the first anniversary date of the loan, the prepayment penalty will equal ten percent (10%) of the principal amount prepaid.

 

2.               If the prepayment occurs after the first anniversary date, but on or before the second anniversary date, the prepayment penalty will equal nine percent (9%) of the principal amount prepaid.

 

3.               If the prepayment occurs after the second anniversary date, but on or before the third anniversary date, the prepayment penalty will equal eight percent (8%) of the principal amount prepaid.

 

4.               If the prepayment occurs after the third anniversary date, but on or before the fourth anniversary date of this Note, the prepayment penalty will equal seven percent (7%) of the principal amount prepaid.

 

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5.               If the prepayment occurs after the fourth anniversary date, but on or before the fifth anniversary date, the prepayment premium will equal six percent (6%) of the principal amount prepaid.

 

6.               If the prepayment occurs after the fifth anniversary date, but on or before the sixth anniversary date, the prepayment premium will equal five percent (5%) of the principal amount prepaid.

 

7.               If the prepayment occurs after the sixth anniversary date, but on or before the seventh anniversary date, the prepayment premium will equal four percent (4%) of the principal amount prepaid.

 

8.               If the prepayment occurs after the seventh anniversary date, but on or before the eighth anniversary date, the prepayment premium will equal three percent (3%) of the principal amount prepaid.

 

9.               If the prepayment occurs after the eighth anniversary date, but on or before the ninth anniversary date, the prepayment premium will equal two percent (2%) of the principal amount prepaid.

 

10.         If the prepayment occurs after the ninth anniversary date, but on or before the tenth anniversary date, the prepayment premium will equal one percent (1%) of the principal amount prepaid.

 

A prepayment penalty shall not apply if the prepayment occurs after the tenth anniversary date.

 

This Promissory Note will be governed by, construed and enforced in accordance with federal law and the laws of the State of Georgia.

 

If the Note is mutilated, lost, stolen or destroyed, then upon surrender thereof (if mutilated) or receipt of evidence and indemnity (if lost, stolen or destroyed) the undersigned shall execute and deliver a new note of like tenor, which shall show all payments which have been made on account of the principal hereof.

 

IN WITNESS WHEREOF, the undersigned has executed this Note under seal as of the date first above written.

 

 

	
 
    	
ERIN PROPERTY HOLDINGS, LLC
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By: 
    	
/s/ Chris Brogdon
    	
(L.S.)
    
	
 
    	
Chris Brogdon, Manager
    

 

3Exhibit 10.2

 

	

    	
U.S. Small Business Administration

 

NOTE
    

 

	
SBA   Loan #
    	
47671350-10
    
	
 
    	
 
    
	
SBA   Loan Name
    	
Erin   Nursing, LLC
    
	
 
    	
 
    
	
Date
    	
July   27, 2011
    
	
 
    	
 
    
	
Loan   Amount
    	
$800,000.00
    
	
 
    	
 
    
	
Interest   Rate
    	
Wall   Street Journal Prime Rate +2.25% (variable)
    
	
 
    	
 
    
	
Borrower
    	
Erin   Property Holdings, LLC
    
	
 
    	
 
    
	
Operating   Company
    	
Erin   Nursing, LLC
    
	
 
    	
 
    
	
Lender
    	
BANK   OF ATLANTA
    

 

1.     PROMISE TO PAY:

 

In return for the Loan, Borrower promises to pay to the order of Lender the amount of Eight Hundred Thousand and No/100 Dollars ($800,000.00) interest on the unpaid principal balance, and all other amounts required by this Note.

 

2.     DEFINITIONS:

 

“Collateral” means any property taken as security for payment of this Note or any guarantee of this Note.

 

“Guarantor” means each person or entity that signs a guarantee of payment of this Note.

 

“Loan” means the loan evidenced by this Note.

 

“Loan Documents” means the documents related to this loan signed by Borrower, any Guarantor, or anyone who pledges collateral.

 

“SBA” means the Small Business Administration, an Agency of the United States of America.

 

 

3.     PAYMENT TERMS:

 

Borrower must make all payments at the place Lender designates. The payment terms for this Note are:

 

1.        Maturity:  This Note will mature in 25 years from date of Note.

 

2.        Repayment Terms:  Lender must insert onto SBA Note, Form 147, to be executed by Borrower, the following terms, without modification.  Lender must complete all blank terms on the Note at time of closing.

 

The interest rate on this Note will fluctuate.  The initial interest rate is 5.50% per year.  This initial rate is the prime rate in effect on the first business day of the month in which SBA received the loan application, plus 2.25%.  The initial interest rate must remain in effect until the first change period begins.

 

Borrower must pay principal and interest payments of $4,921.00 every month, beginning two months from the month this Note is dated; payments must be made on the first calendar day in the months they are due.

 

Lender will apply each installment payment first to pay interest accrued to the day Lender receives the payment, then to bring principal current, then to pay any late fees, and will apply any remaining balance to reduce principal.

 

The interest rate will be adjusted every calendar quarter (the “change period”).

 

The “Prime Rate” is the prime rate in effect on the first business day of the month (as published in the Wall Street Journal) in which SBA received the application, or any interest rate change occurs.  Base Rates will be rounded to two decimal places with .004 being rounded down and .005 being rounded up.

 

The adjusted interest rate will be 2.25% above the Prime Rate.  Lender will adjust the interest rate on the first calendar day of each change period.  The change in interest rate is effective on that day whether or not Lender gives Borrower notice of the change.

 

Lender must adjust the payment amount at least annually as needed to amortize principal over the remaining term of the note.

 

If SBA purchases the guaranteed portion of the unpaid principal balance, the interest rate becomes fixed at the rate in effect at the time of the earliest uncured payment default.  If there is no uncured payment default, the rate becomes fixed at the rate in effect at the time of purchase.

 

Loan Prepayment:

 

Notwithstanding any provision in this Note to the contrary:

 

Borrower may prepay this Note.  Borrower may prepay 20% or less of the unpaid principal balance at any time without notice.  If Borrower prepays more than 20% and the Loan has been sold on the secondary market, Borrower must:

 

a.        Give Lender written notice;

 

b.        Pay all accrued interest; and

 

c.        If the prepayment is received less than 21 days from the date Lender receives the notice, pay an amount equal to 21 days’ interest from the date lender receives the notice, less any interest accrued during the 21 days and paid under subparagraph b., above.

 

If Borrower does not prepay within 30 days from the date Lender receives the notice, Borrower must give Lender a new notice.

 

Subsidy Recoupment Fee.  When in any one of the first three years from the date of initial disbursement Borrower voluntarily prepays more than 25% of the outstanding principal balance of the loan, Borrower must pay to Lender on behalf of SBA a prepayment fee for that year as follows:

 

a.        During the first year after the date on which the loan is first disbursed, 5% of the total prepayment amount;

 

b.        During the second year after the date on which the loan is first disbursed, 3% of the total prepayment amount; and

 

c.        During the third year after the date on which the loan is first disbursed, 1% of the total prepayment amount.

 

All remaining principal and accrued interest is due and payable 25 years from date of Note.

 

Late Charge:  If a payment on this Note is more than 10 days late, Lender may charge Borrower a late fee of up to 5.00% of the unpaid portion of the regularly scheduled payment.

 

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4.     EFAULT:

 

Borrower is in default under this Note if Borrower does not make a payment when due under this Note, or if Borrower or Operating Company:

 

A.    Fails to do anything required by this Note and other Loan Documents;

 

B.    Defaults on any other loan with Lender;

 

C.    Does not preserve, or account to Lender’s satisfaction for, any of the Collateral or its proceeds;

 

D.    Does not disclose, or anyone acting on their behalf does not disclose, any material fact to Lender or SBA;

 

E.     Makes, or anyone acting on their behalf makes, a materially false or misleading representation to Lender or SBA;

 

F.     Defaults on any loan or agreement with another creditor, if Lender believes the default may materially affect Borrower’s ability to pay this Note;

 

G.    Fails to pay any taxes when due;

 

H.    Becomes the subject of a proceeding under any bankruptcy or insolvency law;

 

I.      Has a receiver or liquidator appointed for any part of their business or property;

 

J.     Makes an assignment for the benefit of creditors;

 

K.    Has any adverse change in financial condition or business operation that Lender believes may materially affect Borrower’s ability to pay this Note;

 

L.     Reorganizes, merges, consolidates, or otherwise changes ownership or business structure without Lender’s prior written consent; or

 

M.   Becomes the subject of a civil or criminal action that Lender believes may materially affect Borrower’s ability to pay  this Note.

 

5.     LENDER’S RIGHTS IF THERE  IS A DEFAULT:

 

Without notice or demand and without giving up any of its rights, Lender may:

 

A.    Require immediate payment of all amounts owing under this Note;

 

B.    Collect all amounts owing from any Borrower or Guarantor;

 

C.    File suit and obtain judgment;

 

D.    Take possession of any Collateral; or

 

E.     Sell, lease, or otherwise dispose of, any Collateral at public or private sale, with or without advertisement.

 

6.     LENDER’S GENERAL POWERS:

 

Without notice and without Borrower’s consent, Lender may:

 

A.    Bid on or buy the Collateral at its sale or the sale of another lienholder, at any price it chooses;

 

B.    Incur expenses to collect amounts due under this Note, enforce the terms of this Note or any other Loan Document, and  preserve or dispose of the Collateral.  Among other things, the expenses may include payments for property taxes, prior liens, insurance, appraisals, environmental remediation costs, and reasonable attorney’s fees and costs.  If Lender incurs such expenses, it may demand immediate repayment from Borrower or add the expenses to the principal balance;

 

C.    Release anyone obligated to pay this Note;

 

D.    Compromise, release, renew, extend or substitute any of the Collateral; and

 

E.     Take any action necessary to protect the Collateral or collect amounts owing on this Note.

 

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7.     WHEN FEDERAL LAW APPLIES:

 

When SBA is the holder, this Note will be interpreted and enforced under federal law, including SBA regulations. Lender or SBA may use state or local procedures for filing papers, recording documents, giving notice, foreclosing liens, and other purposes.  By using such procedures, SBA does not waive any federal immunity from state or local control, penalty, tax, or liability.  As to this Note, Borrower may not claim or assert against SBA any local or state law to deny any obligation,  defeat any claim of SBA, or preempt federal law.

 

8.     SUCCESSORS AND ASSIGNS:

 

Under this Note, Borrower and Operating Company include the successors of each, and Lender includes its successors and assigns.

 

9.     GENERAL PROVISIONS:

 

A.    All individuals and entities signing this Note are jointly and severally liable.

 

B.    Borrower waives all suretyship defenses.

 

C.    Borrower must sign all documents necessary at any time to comply with the Loan Documents and to enable Lender to acquire, perfect, or maintain Lender’s liens on Collateral.

 

D.    Lender may exercise any of its rights separately or together, as many times and in any order it chooses.  Lender may delay or forgo enforcing any of its rights without giving up any of them.

 

E.     Borrower may not use an oral statement of Lender or SBA to contradict or alter the written terms of this Note.

 

F.     If any part of this Note is unenforceable, all other parts remain in effect.

 

G.    To the extent allowed by law, Borrower waives all demands and notices in connection with this Note, including presentment, demand, protest, and notice of dishonor.  Borrower also waives any defenses based upon any claim that Lender did not obtain any guarantee; did not obtain, perfect, or maintain a lien upon Collateral; impaired Collateral; or did not obtain the fair market value of Collateral at a sale.

 

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10.   STATE-SPECIFIC PROVISIONS:

 

Time is of the essence of this Note.

 

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11.   BORROWER’S NAME(S) AND SIGNATURE(S):

 

By signing below, each individual or entity becomes obligated under this Note as Borrower.

 

 

	
Erin   Property Holdings, LLC
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
By:
    	
/s/   Chris Brogdon
    	
(L.S.)
    	
 
    
	
Chris   Brogdon, Manager
    	
 
    
	
(Corporate Seal)
    	
 
    
				

 

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