Promissory Note - Chindex Inc. and First National Bank of Maryland
[LOGO] FIRST NATIONAL BANK OF MARYLAND
FIRST INVESTMENT LOAN MANAGER
DEMAND PROMISSORY NOTE
* ONE MILLION SEVEN HUNDRED-FIFTY THOUSAND AND XX/100 DOLLARS
** $1,750,000.00
BALTIMORE, MARYLAND
JULY 10, 1997
FOR VALUE RECEIVED, the undersigned Chindex, Inc., a New York Corporation
(hereafter, the 'BORROWER'), promises to pay to the order of THE FIRST NATIONAL
BANK OF MARYLAND, and national banking association (hereafter, the 'BANK'), ON
DEMAND, at the BANK'S offices at 25 South Charles Street, Baltimore, Maryland
21201 or at such other place as the holder of this Promissory Note may from time
to time designate, the principal sum of * Dollars ($**),
or such other amount as may from time to time be advanced and
outstanding hereunder, together with interest at the rate hereafter specified.
The following terms shall apply to this Promissory Note:
Exhibit A attached hereto contains provisions essential to this Promissory
Note and such Exhibit A, and all terms, conditions and provisions thereof, are
incorporated herein and made a part hereof as if fully set forth. All terms used
in Exhibit A shall have the same meaning when used herein as given when used in
said Exhibit A. Periodic changes may be requested to the terms of Exhibit A by
either party. If changes to the terms of Exhibit A are agreed to by both parties
then a new Exhibit A will be executed by the BORROWER and the BANK and attached
to this Promissory Note by the BANK at which time such new Exhibit A will
replace the existing Exhibit A and be made a part of this Promissory Note.
1. Demand Nature. ALL SUMS DUE UNDER THIS PROMISSORY NOTE ARE IMMEDIATELY
DUE IN FULL UPON THE DEMAND OF THE HOLDER OF THIS PROMISSORY NOTE AT ANY TIME
AND FOR ANY REASON, IN THE SOLE AND ABSOLUTE DISCRETION OF THE HOLDER OF THIS
PROMISSORY NOTE.
2. Advances. This Promissory Note shall be used to evidence all advances
and payments of principal made hereunder and all interest due hereunder until it
is surrendered to the BORROWER, and it shall continue to be so used even though
there may be periods prior to such surrender when no amount of principal or
interest is owing hereunder. Until all sums due under this Promissory Note are
repaid in full and the credit accommodation evidenced by this Promissory Note is
terminated the BORROWER irrevocably authorizes the BANK to make advances and
receive payments under this Promissory Note in the following manner:
a. Form Of Advances. All advances made hereunder shall be made in the form
of a transfer of funds into the commercial checking account established by the
BORROWER at the BANK with the account number set forth on Exhibit A (hereafter
the "ACCOUNT"). The ACCOUNT is subject to restrictions of withdrawals imposed by
the BANK, from time to time, in its sole discretion.
b. Amount Of Advances. On each banking day after posting all credits
(subject to funds availability) to the ACCOUNT and repaying any principal sums
outstanding under this Promissory Note pursuant to subparagraph (c) below
(hereafter, the collected balance in the ACCOUNT after taking such actions shall
be referred to as the "INITIAL BALANCE"), the BANK shall calculate the aggregate
amount of properly payable debits to the ACCOUNT which have been presented for
payment (hereafter, "PRESENTED ITEMS"). In the event the INITIAL BALANCE is
greater than the aggregate amount of the PRESENTED ITEMS by an amount at least
equal to the Target Balance, the BANK shall post and pay all of the PRESENTED
ITEMS. In the event the INITIAL BALANCE is greater than the aggregate amount of
the PRESENTED ITEMS by an amount which is less than the Target Balance or in the
event the INITIAL BALANCE is less than the aggregate amount of the PRESENTED
ITEMS, the BANK shall make an advance under this Promissory Note by transferring
funds into the ACCOUNT in an amount equal to the greater of (i) the Minimum Loan
Sweep Amount or (ii) the amount which when aggregated with the INITIAL BALANCE
would be greater than the aggregate amount of the PRESENTED ITEMS by the amount
of the Target Balance. The contrary notwithstanding, the aggregate amount of
advances outstanding hereunder shall never exceed the Maximum Loan Amount.
Furthermore, if at any time the BORROWER does not have availability for
additional advances hereunder in an amount which when aggregated with the
INITIAL BALANCE would be in excess of the PRESENTED ITEMS by an amount at least
equal to the Target Balance, the Bank shall determine, in its sole discretion,
which PRESENTED ITEMS can be posted and paid based on the INITIAL BALANCE and
the availability for advances hereunder, and then (i) make an advance hereunder
in an amount which when aggregated with the INITIAL BALANCE is equal to those
PRESENTED ITEMS which the BANK has determined can be posted and paid without
giving effect to the Target Balance, and (ii) to the extent there is
availability for additional advances hereunder, make an advance hereunder in an
amount up to the Target Balance.
c. Repayments Of Advances. On each banking day after posting all credits to
the ACCOUNT but prior to posting any debits to the ACCOUNT, the BANK is hereby
irrevocably authorized to debit the ACCOUNT in an amount equal to the principal
amount outstanding under this Promissory Note.
3. Interest Rate. Until all sums due hereunder have been paid in full,
interest shall accrue on the disbursed and unpaid principal balance hereunder at
the annual rate of interest set forth on Exhibit A attached hereto. In the event
the rate of interest set forth on Exhibit A is based on the BANK's "Prime Rate",
the term "Prime Rate" shall mean that rate of interest equal to the higher of:
(a) the interest rate which the BANK from time to time announces and declares to
be its prime rate of interest (such rate being a guideline for, and a standard
in determining, actual interest rates, and not the lowest rate which the BANK
will make a loan to any particular class of borrowers); or (b) the average rate,
rounded to the nearest one-tenth of one percent (.1%), for ninety (90) day
maturity dealer placed Commercial Paper for the week most recently reported in
the Federal Reserve Statistical Release No. H-15(519), entitled "Selected
interest Rates") (or any succeeding publication). If the applicable interest
rate on this Promissory Note is based on the BANK's Prime Rate then changes in
such applicable interest rate shall be made as of, and immediately upon, the
occurrence of changes in the Prime Rate. Interest shall be calculated on the
basis of a three-hundred sixty (360) days per year factor applied to the actual
days on which there exists an unpaid disbursed principal balance.
<PAGE>
4. Interest Payments. Accrued interest at the above-described rate shall be
paid by the BORROWER to the BANK monthly, on a current basis, as billed by the
holder of this Promissory Note, until all sums due hereunder are paid in full
and the credit accommodation evidenced by this Promissory Note is terminated.
5. Application Of Payments. All payments made hereunder shall be applied
first to late penalties or other sums owing to the holder under this Promissory
Note, next to accrued interest, and then to principal or in such other order of
application as the holder hereof may elect from time to time.
6. Late Payment Penalty. Should any payment due hereunder be received by
the holder of this Promissory Note more than fifteen (15) days after its due
date, the BORROWER shall pay a late payment penalty equal to five percent (5%)
of the amount then due for each month or portion of a month until paid.
7. Confession Of Judgment. Upon a failure to make any payment when and as
due under this Promissory Note, the BORROWER authorizes any attorney admitted to
practice before any court of record in the United States to appear on behalf of
the BORROWER to confess judgment against the BORROWER in the full amount due on
this Promissory Note plus legal fees of fifteen percent (15%) of the amount due.
The BORROWER agrees that venue shall in such an action be proper in the Circuit
Court of any County of the State of Maryland or in the Circuit Court of
Baltimore City or in the United States District Court For The District Of
Maryland. The BORROWER waives the benefit of any and every statute, ordinance,
or rule of court which may be lawfully waived conferring upon the BORROWER any
right or privilege of exemption, stay of execution, or supplementary
proceedings, or other relief from the enforcement or immediate enforcement of a
judgment or related proceedings on a judgment. The authority and power to
appear for and enter judgment against the BORROWER shall not be exhausted by one
or more exercises thereof, or by any imperfect exercise thereof, and shall not
be extinguished by any judgment entered pursuant thereto; such authority and
power may be exercised on one or more occasions from time to time, in the same
or different jurisdictions, as often as the holder shall deem necessary or
advisable.
8. Default Interest Rate. Upon a failure to make any payment when and as
due under this Promissory Note, the holder may, without notice or demand, raise
the rate of interest accruing on the unpaid principal balance by two (2)
percentage points above the rate of interest otherwise applicable,
independent of whether the holder of this Promissory Note elects to demand the
unpaid principal balance of this Promissory Note as a result of such default.
ADDITIONAL IMPORTANT TERMS OF THIS AGREEMENT ARE ON THE REVERSE SIDE.
<PAGE>
CONTINUED FROM FRONT SIDE
9. Interest Rate After Judgment. If judgment is entered against the
BORROWER on this Promissory Note, the amount of the judgment entered (which may
include principal, interest, default interest late charges, fees, and costs)
shall bear interest at the highest rate authorized under this Promissory Note as
of the date of the judgment.
10. Expenses Of Collection. If this Promissory Note is referred to an
attorney for collection, whether or not judgment has been confessed or suit has
been filed, the BORROWER shall pay all of the holder's reasonable costs, fees
(including, but not limited to, reasonable legal fees) and expenses resulting
from such referral.
11. Subsequent Holders. In the event that any holder of this Promissory
Note transfers this Promissory Note for value, the BORROWER agrees that no
subsequent holder of this Promissory Note shall be subject to any claims or
defenses which the BORROWER may have against a prior holder, all of which are
waived as to the subsequent holder, and that all subsequent holders shall have
all of the rights of a holder in due course with respect to the BORROWER even
though the subsequent holder may not qualify, under applicable law, absent this
paragraph, as a holder in due course.
12. Waiver Of Protest. The BORROWER, and all parties to this Promissory
Note, whether maker, indorser, or guarantor, waive presentment notice of
dishonor and protest.
13. Extensions Of Maturity. All parties to this Promissory Note, whether
maker, indorser, or guarantor, agree that the maturity of this Promissory Note,
or any payment due hereunder, may be extended at any time or from time to time
without releasing, discharging, or affecting the liability of such party.
14. Commercial Loan. The BORROWER warrants that this Promissory Note is the
result of a commercial loan transaction within the meaning of Sections 12-101(c)
and 12-103(e), Commercial Law Article, Annotated Code of Maryland.
15. Binding Nature. This Promissory Note shall inure to the benefit of and
be enforceable by the BANK and the BANK'S successors and assigns and any other
person to whom the BANK may grant an interest in the BORROWER'S obligations to
the BANK, and shall be binding and enforceable against the BORROWER and the
BORROWER'S personal representative, successors and assigns.
16. Invalidity Of Any Part. If any provision or part of any provision of
this Promissory Note shall for any reason be held invalid, illegal or
unenforceable in any respect, such invalidity, illegality or unenforceability
shall not affect any other provisions of this Promissory Note and this
Promissory Note shall be construed as if such invalid, illegal or unenforceable
provision or part thereof had never been contained herein, but only to the
extent of its invalidity, illegality or unenforceability.
17. Choice of Law. This Promissory Note shall be governed, construed,
interpreted, enforced and its validity and enforceability determined in
accordance with the laws of the State of Maryland. The BORROWER consents to the
jurisdiction and venue of the courts of the State of Maryland and, if diversity
of citizenship exists between the BORROWER and the holder and a sufficient
amount is in controversy or if some other basis exists for the jurisdiction of
the federal courts, to the jurisdiction and venue of the United States District
Court for the District of Maryland.
18. Actions Against Bank. Any action brought by the BORROWER against the
BANK which is based, directly or indirectly or in whole or in part on this
Promissory Note or any matter in or related to this Promissory Note, including
but not limited to the making of the loan or the administration or collection
thereof shall be brought only in the courts of the State of Maryland. The
BORROWER may not file a counterclaim against the BANK in a suit brought by the
BANK against the BORROWER in a state other than the State of Maryland unless
under the rules of procedure of the court in which the BANK brought the action
the counterclaim is mandatory and will be considered waived unless filed as a
counterclaim in the action instituted by the BANK.
19. Waiver Of Jury Trial. The BORROWER agrees that any suit, action, or
proceeding, whether claim or counterclaim, brought or instituted by the
BORROWER or any successor or assign of the BORROWER on or with respect to this
Promissory Note or which in any way relates, directly or indirectly, to the
obligations of the BORROWER to the BANK under this Promissory Note or any other
LOAN DOCUMENT, or the dealings of the parties with respect thereto, shall be
tried only by a court and not by a jury. The BORROWER hereby expressly waives
any right to a trial by jury in any such suit, action, or proceeding.
The BORROWER acknowledges and agrees that this provision is a specific and
material aspect of the agreement between the parties and that the BANK would
not enter into the transaction with the BORROWER if this provision were
not part of their agreement.
IN WITNESS WHEREOF, the BORROWER has executed this Promissory Note
specifically intending this Promissory Note to constitute an instrument under
seal.
Dated as of July 10, 1997
WITNESS/ATTEST: BORROWER (If a corporation or partnership):
Chindex, Inc.
/s/ By: /s/ ROBERT C. GOODWIN, JR. (SEAL)
--------------------------- --------------------------------------
Name: Robert C. Goodwin, Jr.
Title: Exec. Vice President &
Asst. Sec.
/s/ By: /s/ RONALD ZILKOWSKI (SEAL)
--------------------------- ----------------------------------
Name: Ronald Zilkowski,
Title: VP Finance & Controller
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[logo] First National Bank of Maryland Exhibit 'A' to Film Promissory Note
Commercial Checking Account Number
------------------------------------
Target Balance $ .0
(The minimum collected balance that must be kept in the ------------------------------------
checking account).
Minimum Loan Sweep Amount $ .01
(The minimum amount that may be advanced at any one time ------------------------------------
under the Promissory Note).
Maximum Loan Amount $1,750,000.00
(The maximum aggregate amount which may be advanced and ------------------------------------
remain outstanding at any one time under the Promissory
Note).
Interest Rate See Schedule A
------------------------------------
WITNESS: BORROWER (If a corporation or partnership):
Chindex, Inc. ,
/s/ BY: /s/ ROBERT C. GOODWIN, JR.
- -------------------------- ------------------------------ (SEAL)
Name: Robert C. Goodwin, Jr.
Title: Exec. Vice President & Asst. Sec.
/s/ BY: /s/ RONALD ZILKOWSKI
- -------------------------- ------------------------------ (SEAL)
Name: Ronald Zilkowski,
VP Finance & Controller
Date: 7/10, 1997
The BANK is executing this Exhibit A solely to evidence its consent to the terms of this Exhibit A.
THE FIRST NATIONAL BANK OF MARYLAND,
A National Banking Association
BY:
------------------------------- (SEAL)
------------------------- Name: William N. Chalfant, Jr.
Title: Vice President
<PAGE>
SCHEDULE A
1. Other(continued):
At a rate of interest adjusted on the last day of each calendar month which is
equal to the current month's average (based on actual days of the month) of the
daily average of the immediately preceding three (3) months' daily quotations
by the Bank for the three (3) month London Interbank Offered Rate ("LIBOR") plus
one hundred (100) basis points.
By: /s/ Ronald Zilkowski (SEAL)
Name/Title: Ronald Zilkowski,
Controller
By: /s/ Robert C. Goodwin, Jr. (SEAL)
Name/Title: Robert c. Goodwin, Jr.,
Executive V.P. & Asst.
Secretary