Document:

Exhibit 10.3

Exhibit 10.3

THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE
SECURITIES ACT, AND MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR
QUALIFICATION OR AN EXEMPTION THEREFROM UNDER THE SECURITIES ACT OR ANY SUCH STATE SECURITIES LAWS
THAT MAY BE APPLICABLE. THE SALE OR TRANSFER OF THIS NOTE IS SUBJECT TO CERTAIN RESTRICTIONS SET
FORTH IN THE NOTE.

SELLER NOTE

			
	 	 	 
	$6,750,000
	 	April 1, 2011

FOR VALUE RECEIVED, RHA Stroud, LLC, an Oklahoma limited liability company (the
“Maker”), promises to pay to Rural Hospital Acquisition LLC, an Oklahoma limited liability
company (“Payee”) in lawful money of the United States of America, the principal sum of Six
Million Seven Hundred Fifty Thousand Dollars ($6,750,000) (the “Principal Amount”),
together with interest on the unpaid principal balance, in each case in the amount and manner
provided below.

This Note has been executed and delivered pursuant to that certain Stock Purchase Agreement
dated as of April 1, 2011 (the “Purchase Agreement”), by and among One Cura Wellness Trust,
Inc., a California not-for-profit corporation (“Buyer”); Maker, RHA Anadarko, LLC and
Payee, and is subject to the terms and conditions of the Purchase Agreement. Capitalized terms
used in this Agreement that are not otherwise defined have the meanings ascribed to them in the
Purchase Agreement.

1. Payments.

1.1 Principal. Subject to Section 5 below, the Principal Amount shall be due and
payable in full on March 31, 2021 (the “Due Date”).

1.2 Interest. Interest shall accrue on the unpaid Principal Amount from and including
the date hereof through and including the date on which any unpaid Principal Amount hereof is paid,
at a rate of ten percent (10%) per annum, compounding on an annual basis. Interest shall be
calculated on the basis of a 360-day year consisting of twelve 30-day months. However, if, and
for so long as, any Event of Default (as hereinafter defined) shall have occurred and be
continuing, the outstanding Principal Amount of this Note and, to the extent permitted by law,
overdue interest in respect of this Note, shall bear interest at a rate equal to fifteen percent
(15%) per annum, subject to any limitations on such interest of any applicable usury laws
(“Default Interest”).

 

 

 

1.3 Manner of Payment. Maker shall pay interest-only payments to Payee in an amount
to be calculated periodically by Payee on the 1st day of each calendar quarter during the term of
this Note (the first such payment being due on July 1, 2011), with a balloon payment of the entire
principal amount and any unpaid and accrued interest being due on the Due Date.
All payments of principal and interest on this Note shall be made by check or wire to the
Payee at 9663 Santa Monica Boulevard #959, Beverly Hills, California 90210 or at such other place
in the United States of America as Payee shall designate to the Maker in writing. Alternatively,
First Physicians Business Solutions, LLC, Payee’s Subsidiary, may withdraw funds from the Bank
Accounts of Maker pursuant to the Management Services Agreement between Maker and First Physicians
Business Solutions, LLC, dated as of even date herewith. If any payment of principal or interest
on this Note is due on a day which is not a business day, such payment shall be due on the next
succeeding business day, and such extension of time shall be taken into account in calculating the
amount of interest payable under this Note.

1.4 Prepayment. The Maker may, without premium or penalty, at any time and from time
to time, prepay all or any portion of the outstanding Principal Amount due under this Note,
provided that each such prepayment is accompanied by accrued interest on the amount of principal
prepaid calculated to the date of such prepayment.

2. Collateral. The entire Principal Amount, accrued interest and any other
obligations owing under this Note shall be secured by all of the tangible and intangible assets of
the Maker relating to its operation of that certain acute care hospital facility located at 2308
Highway 66 West, Stroud, Oklahoma 74079 (the “Hospital”) as described in the Purchase
Agreement, including the license for such Hospital, pursuant to that certain Security Agreement
(the “Security Agreement”) in favor of Payee of even date herewith. In addition, upon an
Event of Default by Maker, Payee may elect to take ownership of all of the issued and outstanding
equity interests of the Maker pursuant to the pledge of such equity interests to Payee by Maker
pursuant to the Security Agreement.

3. Defaults.

3.1 Events of Default. The occurrence of any one or more of the following events
shall constitute an event of default hereunder (“Event of Default”):

(a) if the Maker shall fail to pay when due any payment of principal or interest on this Note;

(b) the occurrence of a default by Maker or its Affiliates, and the failure to cure such
default within the applicable cure period, if any, under any of the transaction documents described
in the Purchase Agreement, including, without limitation, the Management Services Agreement and the
Staff Leasing Agreement;

(c) if, pursuant to or within the meaning of the United States Bankruptcy Code or any other
federal or state law relating to insolvency or relief of debtors (a “Bankruptcy Law”),
Maker shall (i) commence a voluntary case or proceeding; (ii) consent to the entry of an order for
relief against it in an involuntary case; (iii) consent to the appointment of a trustee, receiver,
assignee, liquidator or similar official; (iv) make an assignment for the benefit of its creditors;
or (v) admit in writing its inability to pay its debts as they become due;

(d) if a court of competent jurisdiction enters an order or decree under any Bankruptcy Law
that (i) is for relief against Maker in an involuntary case, (ii) appoints a trustee, receiver,
assignee, liquidator or similar official for Maker or substantially all of Maker’s
properties, or (iii) orders the dissolution of Maker, and in each case the order or decree is
not dismissed within 120 days;

 

-2-

 

(e) the revocation of any license which would have a material adverse effect on the operation
of the Hospital, or the certification of any portion of the Hospital for provider status under
Medicare or Medicaid, if applicable; (B) the closure of any portion of the Hospital except in
connection with a casualty or condemnation; or (C) if the Hospital or the Maker fails to maintain
its status as a properly licensed healthcare service provider and/or facility; provided, that if
the Maker intends to convert the status of the Hospital to a federally qualified health center, it
must obtain the prior written consent of the Payee to any such change of status;

(f) if the Maker is barred or excluded as a provider in Medicare or Medicaid or any other
government programs;

(g) if the Maker, or any of their officers, directors or key employees (i) are convicted of a
felony or other crime involving misappropriation, dishonesty, unethical business conduct or
disloyalty, or (ii) engage in fraud, breach of fiduciary duty, gross negligence or willful
misconduct.

3.2 Remedies. Upon the occurrence of an Event of Default, the unpaid Principal Amount
of this Note shall (i) become due and payable forthwith, without presentment, demand, notice,
protest or other requirement of any kind, all of which are expressly waived by Maker and (ii)
accrue Default Interest in the manner provided in Section 1.2. Upon the occurrence and during the
continuance of any Event of Default, Payee may exercise any and all rights and remedies available
to it at law or in equity, including, without limitation, the right to collect from Maker all sums
due under this Note or to exercise all of the rights, powers and remedies granted to Payee in the
Security Agreement.

4. No Additional Indebtedness. From and after the date hereof, until all amounts due
under this Note have been paid in full, Maker shall not incur any indebtedness other than customary
trade payables paid within ninety (90) days after they are incurred, unless approved by the Payee
in writing in advance.

5. Change in Control. Simultaneous with the occurrence of a “Change in Control,” the
Payee may, at its option, declare the entire unpaid Principal Amount, together with all accrued
interest thereon, immediately due and payable. For purposes of this Note, “Change in Control”
means the occurrence of any of the following events: (a) a merger or consolidation of the Maker
with or into another entity; (B) the sale, license or transfer of all or substantially all of the
properties and assets of the Maker or its subsidiaries; (C) any acquisition by any person of
beneficial ownership of a majority of the equity of the Maker (whether or not newly-issued shares
or equity interests) in a single transaction or a series of related transactions; (D) the
redemption or repurchase of equity interests representing a majority of the voting power of the
outstanding shares of equity of the Maker; or (E) any other change of control of more than fifty
percent (50%) of the outstanding voting power of the Maker.

 

-3-

 

6. Miscellaneous.

6.1 Amendments and Waiver. Neither this Note nor any provisions hereof may be
amended, except pursuant to a written instrument executed by the Maker and Payee. No waiver by
Payee or Maker of any right or remedy under this Note shall be effective unless in a writing signed
by Payee or Maker, as the case may be. Neither the failure nor any delay in exercising any right,
power or privilege under this Note will operate as a waiver of such right, power or privilege and
no single or partial exercise of any such right, power or privilege by Payee or Maker will preclude
any other or further exercise of such right, power or privilege or the exercise of any other right,
power or privilege.

6.2 Notices. Any notice required or permitted to be given hereunder shall be given in
accordance with Section 7.7 of the Purchase Agreement.

6.3 Severability. This Note and the Purchase Agreement constitute the entire
agreement among the parties related to the subject matter hereof and supersede any prior
understandings or agreements, by or among the parties to the extent they relate to the subject
matter hereof. If any provision of this Note is held invalid or unenforceable by any court of
competent jurisdiction, the other provisions of this Note will remain in full force and effect.
Any provision of this Note held invalid or unenforceable only in part or degree will remain in full
force and effect to the extent not held invalid or unenforceable.

6.4 Governing Law. Section 7.8 of the Purchase Agreement shall apply to the
Note.

6.5 Parties and Interest. This Note shall bind the Maker and Payee and their
permitted successors and assigns. Neither this Note, nor any of the rights or obligations
hereunder, may be assigned or transferred by Payee or the Maker without the express prior written
consent of the other.

6.6 No Third-Party Beneficiaries. This Note shall not confer any rights or remedies
upon any Person other than the Maker, Payee, and their respective successors and permitted assigns.

6.7 Construction. The Maker and Payee have participated jointly in the negotiation
and drafting of this Note. In the event an ambiguity or question of intent or interpretation
arises, this Note shall be construed as if drafted jointly by the parties and no presumption or
burden of proof shall arise favoring or disfavoring any party by virtue of the authorship of any of
the provisions of this Agreement. The word “including” shall mean including without limitation.

 

-4-

 

IN WITNESS WHEREOF, the Maker has executed and delivered this Note as of the date first stated
above.

	 	 	 	 	 
	 	MAKER:

RHA STROUD, LLC

 	 
	 	By:  	 	 
	 	Its:	 	     

	 	 	 	 	 
	Accepted:

PAYEE:

RURAL HOSPITAL ACQUISITION LLC

 	 	 
	By:  	 	 	 
	Its:	 	 	 

 

-5-Exhibit 10.4

Exhibit 10.4

SECURITY AGREEMENT

THIS SECURITY AGREEMENT (hereinafter called “Agreement”) is entered into by and between RHA
ANADARKO, LLC, an Oklahoma limited liability company (hereinafter called “Debtor”) and
RURAL HOSPITAL ACQUISITION LLC, an Oklahoma limited liability company (hereinafter called
“Secured Party”).

1. Grant of Security Interest. Subject to the terms and conditions of this Agreement,
Debtor, for consideration, and to secure the full and prompt payment, observance and performance
when due of any and all indebtedness owed by Debtor to Secured Party, whether at the stated time,
by acceleration or otherwise, howsoever created, arising or evidenced, whether direct or indirect,
absolute or contingent, whether or not of the same or similar class or of like kind to any
indebtedness incurred contemporaneously with the execution of this Agreement, and whether now or
hereafter existing, or due or to become due, and whether such indebtedness from time to time is
reduced and thereafter increased, or entirely extinguished and thereafter reincurred, including,
without limitation, the following:

(a) Any and all amounts owed by Debtor under, in connection with, and/or pursuant to
the indebtedness evidenced by that certain Seller Note of even date herewith, in the
original principal sum of Five Million Two Hundred Fifty Thousand Dollars ($5,250,000) (the
“Note”), with interest thereon according to the provisions thereof, and all
obligations thereunder, in connection therewith and/or pursuant to any and all agreements
and other documents in connection therewith; and

(b) All sums advanced or expenses or costs paid or incurred (including, without
limitation, reasonable attorneys’ fees and other legal expenses) by Secured Party pursuant
to or in connection with the Note or any other agreements and documents in connection
therewith plus applicable interest on such sums, expenses or costs; and

(c) Any extensions, modifications, changes, substitutions, restatements, renewals or
increases or decreases of any or all of the indebtedness referenced above;

hereby grants to Secured Party a security interest in the collateral described in Schedule
1 to this Agreement and made a part hereof (hereinafter collectively called the
“Collateral”).

 

 

2. Representations, Warranties and Covenants of Debtor. Debtor represents, warrants
and covenants as follows:

(a) Debtor will give Secured Party sixty (60) days prior written notice of any change
in (i) Debtor’s chief executive office (or, if Debtor has no place of business, Debtor’s
residence), the location of the Collateral or the location of the records described above;
(ii) the ownership of Debtor’s business; (iii) the principals responsible for the management
of Debtor’s business; (iv) Debtor’s corporate structure or identity; or (v) Debtor’s name or
trade name, or prior to commencing to use an assumed name not set forth in this Agreement.

(b) Without the prior written consent of Secured Party, Debtor will not move, sell,
lease, permit any encumbrance on or otherwise dispose of the Collateral, other than its
inventory in the ordinary course of its business. Debtor represents and warrants that
Debtor is the sole owner of the Collateral, free and clear of all liens, charges, interests,
and encumbrances, other than in favor of Secured Party, that no other person or other entity
has any interest in the Collateral whatsoever, and that Debtor will defend same against all
adverse claims and demands.

(c) Secured Party shall not be deemed to have waived any of its rights in any
Collateral unless such waiver is in writing and signed by an authorized representative of
Secured Party. No delay or omission by Secured Party in exercising any of Secured Party’s
rights shall operate as a waiver thereof or of any other rights. Secured Party shall have,
in addition to all other rights and remedies provided by this Agreement or applicable law,
the rights and remedies of a secured party under the Uniform Commercial Code.

(d) Debtor will maintain the Collateral in good condition and repair and will pay
promptly all taxes, levies, and encumbrances and all repair, maintenance and preservation
costs pertaining to the Collateral. If Debtor fails to make such payments, Secured Party
shall have the option, but not the obligation, to pay the same and Debtor agrees to repay,
with interest at the highest rate applicable to any indebtedness which this Agreement
secures, all amounts so expended by Secured Party. Debtor will at any time and from time to
time, upon request of Secured Party, give any representative of Secured Party access during
normal business hours to inspect the Collateral or the books and records thereof.

(e) Debtor agrees to pay to Secured Party on demand all expenses, including reasonable
attorney fees and expenses, incurred by Secured Party in protecting or enforcing its rights
in the Collateral or otherwise under this Agreement. After deducting all said expenses, the
remainder of any proceeds of sale or other disposition of the Collateral shall be applied to
the indebtedness due Secured Party in such order of preference as Secured Party shall
determine.

(f) Debtor hereby agrees to faithfully preserve and protect Secured Party’s security
interest in the Collateral at all times, and further agrees to execute and deliver, from
time to time, any and all further, or other, documents, instruments, continuation statements
and perform or refrain from performing such acts, as Secured Party may reasonably request to
effect the purposes of this Agreement and to secure to Secured Party the benefits of all the
rights, authorities and remedies conferred upon Secured Party by the terms of this
Agreement.

 

2

 

3. Defaults. The occurrence of any of the following events shall constitute a default
hereunder:

(a) The occurrence of any “Event of Default” under the provisions of the Note;

(b) The failure by Debtor to observe or perform any covenant, condition or agreement of
this Agreement and the failure to cure such default; or

(c) The breach of any representation, warranty or certification by Debtor contained in
this Agreement, or if any representation, warranty or certification made or agreed to be
made herein or therein shall prove to be false or materially misleading at the time made or
reaffirmed.

4. Remedies.

(a) Upon the occurrence of any default under this Agreement, Secured Party is
authorized in its discretion to declare any or all of the indebtedness to be immediately due
and payable without demand or notice to Debtor, and may exercise any one or more of the
rights and remedies granted pursuant to this Agreement or given to a secured party under
applicable law, including, without limitation, the Uniform Commercial Code, such rights and
remedies to include, without limitation, the right to take possession and sell, lease or
otherwise dispose of the Collateral. If reasonable notice of any disposition of Collateral
or other enforcement is required, such requirement will be met if such notice is mailed,
postage pre-paid, to the address of Debtor shown below Debtor’s signature on this Agreement
at least fifteen (15) days prior to the time of disposition or other enforcement. Debtor
agrees that upon demand by Secured Party after default, Debtor will promptly assemble the
Collateral and make the Collateral available to Secured Party at a place convenient to
Secured Party.

(b) Upon the occurrence of any default under this Agreement, Debtor hereby irrevocably
constitute and appoints Secured Party (and any employee or agent of Secured Party) as
Debtor’s true and lawful attorney-in-fact with full power of substitution, in Secured
Party’s name or Debtor’s name or otherwise, for Secured Party’s sole use and benefit, at
Debtor’s cost and expense, to exercise the following powers with respect to the Collateral:

(1) To demand, sue for collection and receive, any and all monies due or owing
with respect to the Collateral.

(2) To receive, take, endorse Debtor’s name on, assign and deliver any checks,
notes, drafts, documents or other instruments taken or received by Secured Party in
connection with the Collateral.

(3) To settle, compromise, prosecute, or defend any action or proceeding with
respect to the Collateral.

(4) To sell, transfer, assign or otherwise deal in or with the Collateral or
the proceeds thereof, as fully as if Secured Party were the absolute owner thereof.

(5) To sign Debtor’s name to and file financing statements or such other
documents and instruments as Secured Party may deem appropriate.

 

3

 

(6) To take any and all action that Secured Party deems necessary or proper to
preserve its interest in the Collateral, including, without limitation, the payment
of debts of Debtor that might impair the Collateral or Secured Party’s security
interest therein, the purchase of insurance on the Collateral, the repair or
safeguard of the Collateral, or the payment of taxes thereon.

(7) To notify account debtors of Secured Party’s security interest in Debtor’s
accounts and to instruct them to make payment directly to Secured Party.

(8) Exercise all of the Debtor’s rights and remedies with respect to the
collection of receivables.

(9) Take any and all other actions necessary to effectuate the collection of
receivables or carry out the transactions contemplated hereby.

(c) Debtor agrees that the powers of attorney granted herein are coupled with an
interest and shall be irrevocable until full, final and irrevocable payment and performance
of the indebtedness secured hereby; and that neither Secured Party nor any officer,
director, employee or agent of Secured Party shall be liable for any act or omission, or for
any mistake or error of judgment, in connection with any such powers.

(d) Notwithstanding the foregoing, Secured Party shall be under no duty to exercise any
such powers, or to collect any amount due on the Collateral, to realize on the Collateral,
to keep the Collateral, to make any presentment, demand or notice of protest in connection
with the Collateral, or to perform any other act relating to the enforcement, collection or
protection of the Collateral.

(e) This Agreement shall not prejudice the right of Secured Party at its option to
enforce the collection of any indebtedness secured hereby or any other instrument executed
in connection with this transaction, by suit or in any other lawful manner. No right or
remedy is intended to be exclusive of any other right or remedy, but every such right or
remedy shall be cumulative to every other right or remedy herein or conferred in any other
agreement or document for the benefit of Secured Party, or now or hereafter existing at law
or in equity.

5. Miscellaneous. All of the provisions contained in Article 7 of the Purchase
Agreement shall apply equally to this Agreement as if such provision were restated in full in this
Agreement.

 

4

 

IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the date written below.

Dated: April 1, 2011

	 	 	 	 	 	 	 	 	 
	SECURED PARTY:	 	 	 	DEBTOR:
	 
	 	 	 	 	 	 	 	 
	RURAL HOSPITAL ACQUISITION LLC	 	 	 	RHA ANADARKO, LLC
	 
	 	 	 	 	 	 	 	 
	By:

	 	 	 	 	 	By:	 	 
	 

	 	 
	 	 	 	 	 	 
	Its:

	 	 	 	 	 	Its:	 	 
	 

	 	 
	 	 	 	 	 	 

 

5

 

SCHEDULE 1

(Collateral)

Debtor hereby grants to Secured Party a security interest in all of the following:

1. All machinery, apparatus, goods, equipment, materials, fittings, fixtures, chattels and tangible
personal property of every kind and description, and all appurtenances and additions thereto and
renewals, substitutions and replacements thereof, now owned or hereafter acquired by Debtor,
wherever situate, including, without limitation, all such personal property located at 1002 E.
Central, Anadarko, Oklahoma 73005 (the “Premises”).

2. All general intangibles arising from or by virtue of any transaction related to the Premises, or
any of the personal property described in this Schedule 1.

3. All permits, licenses, franchises, certificates and other rights and privileges, including the
license for the operation of the acute care hospital facility located at the Premises (the
“Hospital”) now held or hereafter acquired by Debtor in connection with the Premises or any
of the personal property described in this Schedule 1.

4. All interests, estates or other claims or demands, in law and in equity, which Debtor now has or
may hereafter acquire in the Premises or the personal property described in this Schedule
1.

5. All of the estate, interest, right, title, other claim or demand, both in law and in equity,
including claims or demands with respect to the proceeds of insurance relating thereto, which
Debtor now has or may hereafter acquire in the Premises or any of the personal property described
in this Schedule 1, or any portion thereof or interest therein, and any and all awards made
for the taking by eminent domain, or by any proceeding or purchase in lieu thereof, of the whole or
any part of such property, including, without limitation, any award resulting from a change of any
streets (whether as to grade, access or otherwise) and any award for severance damages.

6. (a) All inventory of the Debtor located or stored for use at the Premises and all goods intended
for sale or lease by the Debtor at or from the Premises, or for display or demonstration; (b) all
work-in-process at the Premises; (c) all materials and supplies of every nature and description
located at the Premises or stored for use at the Premises and of a nature that will, in the
ordinary course of business, be used or consumed in the Debtor’s business at the Premises; and (d)
all documents relating to any of the foregoing.

7. All accounts of Debtor and any and all rights of Debtor to the payment of money or other forms
of consideration of any kind (whether classified under the Uniform Commercial Code as accounts,
chattel paper, general intangibles, or otherwise) for goods sold or leased or for services,
including, but not limited to, accounts receivable, chattel paper, tax refunds, insurance proceeds,
contract rights, notes, drafts, instruments, documents, acceptances, and all other debts,
obligations and liabilities in whatever form from any person in favor of Debtor.

8. All trademarks, trade names, patents, copyrights and any and all other intellectual property of
the Debtor.

And all proceeds and products of the foregoing personal property described in this Schedule
1.

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00189-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00189-of-00352.parquet"}]]