SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act
of 1934
Date of Report (Date of earliest event reported) January 27, 2000
DIALYSIS CORPORATION OF AMERICA
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(Exact name of registrant as specified in its charter)
Florida 0-8527 59-1757642
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(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
27 Miller Avenue, Lemoyne, Pennsylvania 17043
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (717) 730-6164
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Item 5. Other Events.
The Company has loaned its parent, Medicore, Inc., $1,500,000 at an
interest rate of 10% per annum for one year through January 26, 2001. The
loan may be increased up to an additional $500,000. The financing was
provided for its parent's establishment of a new division which invests in
Linux software system companies. The parent's initial investment is a 6%
interest in The Linux Fund, a private holding company which has established
and is using the parent's funding to acquire equity positions in Linux
software system companies.
The Linux Fund has a 50%-owned subsidiary, The Linux Fund IPO.com, which
will provide a website facility for the Linux software companies in which it
has invested to effect direct public offerings at such time as they decide to
effect a public offering of their securities under a Dutch Auction system,
which allows potential investors the ability to bid for securities of initial
public offerings at prices for which they would like to purchase the
securities. The remaining 50% ownership of The Linux Fund IPO.com is held
by MainStreet IPO.com, Inc., a private company with which the Company has a
proposed merger. MainStreet has established a website for companies to
effect direct public offerings under a Dutch Auction process, and is
currently in discussions with the Securities and Exchange Commission as to
whether its proposed operations require broker-dealer registration or might
otherwise require restructuring.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
(a) Financial Statements of Businesses Acquired
Not Applicable
(b) Pro Forma Financial Information
Not Applicable
(c) Exhibits
(10) Material Contracts
10.1 Promissory Note from Medicore, Inc. to the Company for
$1,500,000 dated January 27, 2000.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
DIALYSIS CORPORATION OF AMERICA
/s/ Thomas K. Langbein
By:---------------------------------
THOMAS K. LANGBEIN, Chairman
of the Board and Chief Executive
Officer
Dated: February 10, 2000
PROMISSORY NOTE
$1,500,000 January 27, 2000
WHEREAS, Medicore, Inc., a Florida corporation, is in need of capital for
a financing transaction; and
WHEREAS, Dialysis Corporation of America, a Florida corporation and a
68% owned subsidiary of Medicore, Inc., seeks to provide the needed financing
to its parent pursuant to the provisions and terms of this Note;
NOW, THEREFORE, FOR VALUE RECEIVED, Borrower, promises to pay to the
order of the Lender (to its successors and assigns), or the Holder of this
Note, the Principal Sum of One Million Five Hundred Thousand ($1,500,000)
Dollars, or Two Million ($2,000,000) Dollars should Borrower increase this
Note in accordance with its terms by the Additional Sum, with interest on
the Principal Sum of this Note outstanding from time to time, as provided by
the rates and terms below.
Definitions
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a. "Additional Sum" shall mean an additional Five Hundred Thousand
($500,000) Dollars which Borrower has the option of borrowing from
Lender within ninety (90) days of and under the same terms and
conditions of this Note.
b. "Borrower" shall mean MEDICORE, INC.
c. "Event of Default" shall mean any event described in Section 3.
d. "Financing" shall mean this initial loan of One Million Five Hundred
Thousand ($1,500,000) Dollars made to the Borrower by the Lender
under this Note, as may be increased by the Additional Sum.
e. "Holder" shall mean the Lender or any successor or assignee of the
Lender.
f. "Lender" shall mean DIALYSIS CORPORATION OF AMERICA.
g. "Linux" shall mean THE LINUX FUND, INC., a Delaware corporation,
which entered into a Loan Agreement with Borrower as of the date of
this Note.
<PAGE>
h. "Loan Agreement" shall mean the Investment and Loan Agreement between
the Borrower and Linux dated January 27, 2000.
i. "Note" shall mean this Promissory Note which evidences the Financing.
j. "Person" shall mean a corporation, an association, a partnership, a
joint venture, a joint stock company, a trust, an organization, a
business, an individual or any government agency or entity.
k. "Principal Sum" shall mean the entire outstanding principal balance
of the Financing under this Note as of the date which such calcula-
tion or determination shall be made exclusive of accrued interest.
l. "Purpose" shall mean the financing by Borrower to Linux in accordance
with the Loan Agreement.
Section 1. Terms of the Note and Payment
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1.1 Advances and Aggregate Principal. This Note evidences the
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Financing provided by the Lender to or on behalf of the Borrower. The aggre-
gate Principal Sum outstanding under this Note shall not exceed Two Million
($2,000,000) Dollars.
1.2 Payment. The entire unpaid Principal Sum of this Note, together
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with any accrued interest thereon, shall be due and payable on January 26,
2001.
1.3 Manner of Payment. Payment of the Principal Sum and interest
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accrued on such Principal Sum under this Note shall be made in lawful money
of the United States of America at the offices of the Lender, 27 Miller
Avenue, Lemoyne PA 17043, or at such other place as the Lender (or Holder)
may at any time designate in writing to the Borrower.
1.4 Financing Proceeds. The Borrower shall use the proceeds of the
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Financing under this Note as provided for in the Loan Agreement, and which
is consistent with all applicable laws and statutes.
Section 2. Interest Rate
2.1 Rate. Interest shall accrue upon the Principal Sum of this Note
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at a rate of interest equal to ten percent (10%) per annum, from the date
hereof until the Principal Sum is fully
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paid. All interest accruing upon the Principal Sum of this Note shall be
calculated on the basis of a 360 day year, but interest will accrue and be
paid on the basis of the actual number of days elapsed in each year.
Section 3. Default
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3.1 The occurrence of any one or more of the following events shall con-
stitute an "Event of Default":
a. Borrower fails to pay in full the Principal Sum or interest due
hereunder promptly when it becomes due.
b. Borrower fails or neglects to observe, perform or comply with the
terms, conditions, covenants or warranties contained in this Note or
the Loan Agreement required to be observed, performed or complied
with by Borrower;
c. The occurrence of any material uninsured damage to or loss, theft or
destruction of any of Borrower's property;
d. Borrower is enjoined, restrained or in any way prevented by the order
of any court or any administrative or regulatory agency from
conducting all or any material part of its business;
e. Any strike, lockout, labor dispute, embargo, condemnation, act of
God or public enemy, or other casualty which causes the cessation
or substantial curtailment of the Borrower's revenue producing
activities for 30 days or more;
f. The entry of judgment or the issuance of a warrant of attachment,
execution or similar process against the Borrower or its property
in excess of $250,000, which shall not be dismissed, discharged or
bonded within thirty (30) days;
g. Borrower ceases to hold a majority interest in the Lender;
h. The occurrence of any material adverse change in the financial
condition of the Borrower; or
i. Borrower shall (A) make a general assignment for the benefit of
creditors; (B) commence any case, proceeding or other action
seeking to have an order for relief entered on its behalf as a
debtor or to adjudicate it a bankrupt or insolvent, or seeking
reorganization, arrangement, adjustment, liquidation, dissolution
or composition of it or
<PAGE> 3
its debts or seeking appointment of a receiver, trustee, custodian
or other similar official for it or for all or any substantial part
of its property (collectively a "proceeding for relief"); (C) become
the subject to any proceeding for relief which is not dismissed
within 60 days of its filing or entry; or (D) be dissolved or
otherwise fail to maintain its legal existence.
3.2 Acceleration of the Loan Upon Default. If at any time the Holder
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learns that any warranty, representation, certificate or statement of
Borrower (whether contained in this Note or not) pertaining to or in connec-
tion with this Note or the Loan Agreement is not true, or upon the happening
of any Event of Default as defined herein, the entire amount of the
Principal Sum with accrued interest shall become due and payable forthwith
without notice or demand. In no event and under no circumstances shall
Holder be entitled to unaccrued or unearned interest. In the Event of
Default, the Principal Sum and any accrued and unpaid interest shall bear
interest from the time of such Event of Default at the maximum legal rate
permissible.
Section 4. Representations And Warranties
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In order to induce the Lender to enter into this Note, the Borrower
makes the following continuing representations to the Lender:
4.1 Organization and Power. The Borrower is a duly authorized corpora-
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tion in good standing under the laws of the State of Florida and is qualified
to do business and is in good standing in every other jurisdiction where the
nature of its business requires it to be so qualified.
4.2 Authority. The execution, delivery and performance of this Note by
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Borrower have been duly authorized by all necessary action on the part of
Borrower. Borrower has all requisite power to execute, deliver and perform
under this Note, and the performance by Borrower under this Note is not
prohibited by, and does not violate any provisions of or result in the breach
of (i) any judgment, order or decree applicable to Borrower, (ii) the
certificate of incorporation or by-laws of Borrower, or (iii) any promissory
note, indenture or any evidence of indebtedness or security therefor, lease,
contract, purchase or other commitment or any other agreement to which
Borrower s a party or by which it is bound, and has not resulted and will
not result in the creation or imposition of any lien, security interest or
encumbrance in favor of any third party on any of Borrower's assets. This
Note has been duly executed and delivered by Borrower and, assuming due
execution and delivery by Lender, is a
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valid and legally binding obligation of Borrower enforceable in accordance
with its terms, except as enforcement may be limited by bankruptcy,
insolvency or other similar laws affecting the enforcement of creditors'
rights generally.
4.3 Consents and Approvals. Neither the execution and delivery of this
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Note by Borrower, the consummation by Borrower of the transactions contem-
plated hereby nor compliance by Borrower with any of the provisions hereof
will (i) require any consent, waiver, approval, authorization or permit of,
or filing with or notification to, any governmental or regulatory authority,
(ii) result in a default (or give rise to any right or termination, can-
cellation or acceleration) under any of the terms, conditions or provisions
of any indenture, mortgage, note, lien, license, government registration,
contract, lease, agreement or other instrument or obligation to which
Borrower is a party or by which Borrower or any of its assets may be bound;
or (iii) violate any order, writ, judgment, injunction, decree, statute,
ordinance, rule or regulation applicable to Borrower or any of its assets.
4.4 Litigation and Government Regulation. There are no actions, suits or
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proceedings pending or, to the knowledge of the Borrower, threatened against
or effecting the Borrower at law or in equity before any court or adminis-
trative officer or agency which might result in a material adverse change in
the business or financial condition of the Borrower.
4.5 Taxes. The Borrower is not delinquent in the payment of any taxes
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which have been levied or assessed by any governmental authority against it
or its assets. The Borrower has timely filed all tax returns which are
required to be filed by law.
Section 5. Prepayment
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The Principal Sum may be paid, in whole or in part, in advance of the
stated maturity date as per Section 1.2 (any such payment referred to as
"Prepayment") at any time without penalty provided that all accrued but
unpaid interest including the interest on the date of Prepayment is paid in
full. All payments shall be applied when received first to the payment of
interest on the Principal Sum and then to reduce the Principal Sum.
Section 6. Governing Law
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This Note shall be governed and construed according to the laws of the
State of Florida.
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Section 7. Severability
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The parties hereto intend and believe that each provision in this Note
comports with all applicable local, state and federal laws and judicial
decisions. However, if any provision or provisions, or if any portion of any
provision or provisions, in this Note shall be found by a court of law to be
in violation of any applicable local, state or federal law or judicial
decision, the rights and obligations under the remainder of this Note shall
continue in full force and effect.
Section 8. Jury Waiver.
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Lender and Borrower do hereby knowingly, voluntarily, unconditionally
and intentionally waive the right to trial by jury in respect of any litiga-
tion based hereon, or arising out of or in connection with this Note.
Section 9. No Usury.
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It is hereby expressly agreed that if under any circumstances whatsoever
fulfillment of any provision of this Note, at the time performance of such
provision shall be due, shall involve transcending the limit validly
prescribed by applicable usury statutes or any other laws with regard to
obligations of like character and amount, then ipso facto the obligations to
be fulfilled shall be reduced to the limit of such statutes or laws, so that
in no event shall any exaction be possible under this Note that is in excess
of the limit, but such obligation shall be fulfilled to the maximum limit.
All agreements herein are expressly limited so that in no contingency or
event whatsoever, whether by reason of advancement of the proceeds hereof,
acceleration of maturity of the unpaid Principal Sum hereof, or otherwise
shall the amount paid or agreed to be paid to Holder for the use, forbearance
or detention of the Financing exceed the highest lawful rate. In the event
the maximum rate is eliminated, the maximum rate of interest hereunder shall
be adjusted simultaneously with the effective date of the amendment
eliminating the maximum usury rate which, however, shall never exceed any
criminal usury rate then in effect. In the event the total liability for
payments of interest and payments in the nature of interest including,
without limitation, all charges, fees, exactions or other sums which may at
any time be deemed to be interest shall, for any reason whatsoever, result in
an effective rate of interest, which for any month or other interest payment
period exceeds the limit
<PAGE> 6
imposed by any applicable usury laws, all sums in excess of those lawfully
collectible as interest for the period in question shall, without further
agreement or notice by, between or to any party hereto, be applied to reduce
the accrued interest hereunder, if any, and then to a reduction of the
Principal Sum immediately upon receipt of such sums by the Holder, or shall
be refunded to Borrower, with the same force and effect as though the
undersigned had specifically designated such excess sums to be so applied;
provided, however, that the Holder of this Note may, at any time and from
time to time, elect, by notice in writing to the undersigned, to waive,
reduce or limit the collection of any sums in excess of those lawfully
collectible as interest rather than accept such sums and apply them as set
forth above. It is the intention of the parties that the Borrower does not
intend or expect to pay nor does the Holder intend or expect to charge,
accept or collect any interest under this Note or the Financing greater than
the highest rate of interest which may be charged under applicable law.
Section 10. Miscellaneous
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10.1 All Changes in Writing. Neither this Note or any provisions
----------------------
herein may be changed, amended or terminated orally. All changes to this
Note must be made in writing signed by all parties, or their agents, herein.
10.2 Headings. The section headings of this Note are for reference
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only and are to be given no effect in construction or interpretation of the
Note.
10.3 Borrower Waivers. With respect to the Principal Sum and all
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accrued interest and any and all obligations under this Note, Borrower
waives the following: (1) all rights of exemption of property for levy or
sale under execution or other process for the collection of debts under the
Constitution or laws of the United States or any state thereof; (2) demand,
presentment, protest, notice of dishonor, suit against any party and all
other requirements necessary to charge or hold Borrower liable on the
Principal Sum and all accrued interest; (3) all statutory provisions and
requirements for the benefit of Borrower, now or hereafter in force, to the
extent that same may be waived; (4) the right to interpose any set-off or
counterclaim of any nature or description in any litigation in which the
Holder and Borrower shall be adverse parties. Borrower agrees that the
Principal Sum and all accrued interest may, from time to time, in whole or
in part, be renewed, extended, modified, accelerated, compromised, discharged
or released by the Holder, all without notice to or further reservations of
rights against Borrower and all without
<PAGE> 7
in any way affecting or releasing the liability of Borrower. Borrower agrees
to pay all filing fees and taxes and all costs of collecting or securing or
attempting to collect or secure the Principal Sum, accrued interest and any
other obligations under the Note, including attorneys' fees, whether or not
involving litigation and/or appellate proceedings.
10.4 Use of Certain Terms. The words "herein," "hereof," "hereunder"
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and other words of similar import refer to this Note as a whole and not to
any particular section of this Note unless specifically stated otherwise in
this Note.
10.5 Assignment. Borrower may not sell, assign or transfer its duties
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and obligations under this Note.
10.6 Disbursement of Financing Proceeds. Borrower hereby authorizes
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and directs Lender to disburse, for and on behalf of Borrower, the proceeds
of the Financing made by Lender to Borrower to such Persons as Borrower
shall direct, whether in writing or orally.
10.7 Remedies. The Holder shall not by any act, delay, omission or
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otherwise be deemed to have waived any of its rights or remedies, and no
waiver of any kind shall be valid, unless in writing and signed by the
Holder. All rights and remedies of the Holder under the terms of this Note
and under any statutes or rules of law shall be cumulative and may be
exercised successively or concurrently. Borrower agrees that the Holder
shall be entitled to all the rights of a holder in due course of a negotiable
instrument.
10.8 Notice. Any notice required to be given to any Person shall be
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deemed sufficient if mailed, postage prepaid, to such Person's address as it
appears on this Note, or, if none appears, to any address in the Holder's
files. The Holder shall have the right unilaterally to correct patent errors
in this Note.
10.9 Non-Conditional Liability. Borrower shall be liable for all
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indebtedness represented by this Note and has subscribed its name hereto
without condition that anyone else should sign or become bound hereon and
without any other condition whatever being made. The provisions of this
Note are binding on the administrators, assigns and successors of Borrower,
and shall inure to the benefit of the Holder, its successors and assigns.
This Note is executed under the seal of the Borrower.
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IN WITNESS WHEREOF, the undersigned, intending to be legally bound
hereby, has duly executed this Note as of the day and year first above
written.
MEDICORE, INC.
/s/ Thomas K. Langbein
By:--------------------------------
THOMAS K. LANGBEIN, Chairman of
the Board, CEO and President
<PAGE> 9
ACKNOWLEDGEMENT
STATE OF NEW JERSEY )
: ss.:
COUNTY OF BERGEN )
Before me personally appeared THOMAS K. LANGBEIN, as Chairman of the Board,
CEO and President of MEDICORE, INC., a Florida corporation, to me well known
and known to me to be the person described in and who executed the foregoing
instrument, and acknowledged to and before me that he executed said
instrument of the purposes therein expressed, on behalf of the corporation.
WITNESS my had and official seal, this 27th day of January, 2000.
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Notary Public, State of New Jersey
My commission expires:
[NOTARIAL SEAL]
