2.4.0.81090 - Disclosure - NOTES PAYABLE AND OTHER DEBTtruefalsefalse1false falsefalseD2012http://www.sec.gov/CIK0001004724duration2012-01-01T00:00:002012-12-31T00:00:001true 1us-gaap_DebtDisclosureAbstractus-gaap_truenadurationfalsefalsefalsefalsefalsefalsefalsefalse1falsefalsefalse00falsefalsefalsexbrli:stringItemTypestringfalse0NOTES PAYABLE AND OTHER DEBT2false 2us-gaap_DebtDisclosureTextBlockus-gaap_truenadurationfalsefalsefalsefalsefalsefalsefalsefalseterseLabel1falsefalsefalse00<div style="font-size:10.0pt;font-family:Times New Roman;FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt;"> NOTE 9. NOTES PAYABLE AND OTHER DEBT         Notes payable and other debt consists of the following: <div style="POSITION: relative; PADDING-BOTTOM: 0pt; PADDING-LEFT: 0pt; WIDTH: 90.03%; PADDING-RIGHT: 0pt; MARGIN-LEFT: 15%; PADDING-TOP: 0pt;">   <div align="center"> <table style="text-align:left;TEXT-ALIGN: left;" border="0" cellspacing="0" cellpadding="0" width="100%"> <tr style="padding:0;PADDING-BOTTOM: 0px; PADDING-LEFT: 0px; PADDING-RIGHT: 0px; PADDING-TOP: 0px;"> <td style="FONT-FAMILY: times;" align="left"></td> <td style="FONT-FAMILY: times;" width="12"></td> <td style="FONT-FAMILY: times;" width="7" align="right"></td> <td style="FONT-FAMILY: times;" width="51"></td> <td style="FONT-FAMILY: times;" width="12"></td> <td style="FONT-FAMILY: times;" width="7" align="right"></td> <td style="FONT-FAMILY: times;" width="51"></td> <td style="FONT-FAMILY: times;" width="12"></td></tr> <tr style="padding:0;PADDING-BOTTOM: 0px; PADDING-LEFT: 0px; PADDING-RIGHT: 0px; PADDING-TOP: 0px;" valign="bottom"> <th style="FONT-FAMILY: times;" align="left">  </th> <th style="FONT-FAMILY: times;"> </th> <th style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times;" colspan="5" align="center">December 31,</th> <th style="FONT-FAMILY: times;"> </th></tr> <tr style="padding:0;PADDING-BOTTOM: 0px; PADDING-LEFT: 0px; PADDING-RIGHT: 0px; PADDING-TOP: 0px;" valign="bottom"> <th style="FONT-FAMILY: times;" nowrap="nowrap" align="left"> <div style="BORDER-BOTTOM: #000000 1pt solid; WIDTH: 68pt; MARGIN-BOTTOM: 0pt;">Amounts in (000's) </div></th> <th style="FONT-FAMILY: times;"> </th> <th style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times;" colspan="2" align="center">2012</th> <th style="FONT-FAMILY: times;"> </th> <th style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times;" colspan="2" align="center">2011</th> <th style="FONT-FAMILY: times;"> </th></tr> <tr style="padding:0;PADDING-BOTTOM: 0px; PADDING-LEFT: 0px; PADDING-RIGHT: 0px; PADDING-TOP: 0px;" valign="bottom" bgcolor="#CCEEFF"> <td style="FONT-FAMILY: times;"> Revolving credit facilities and lines of credit</td> <td style="FONT-FAMILY: times;"> </td> <td style="FONT-FAMILY: times;" align="right">$</td> <td style="FONT-FAMILY: times;" align="right">9,204</td> <td style="FONT-FAMILY: times;"> </td> <td style="FONT-FAMILY: times;" align="right">$</td> <td style="FONT-FAMILY: times;" align="right">8,651</td> <td style="FONT-FAMILY: times;"> </td></tr> <tr style="padding:0;PADDING-BOTTOM: 0px; PADDING-LEFT: 0px; PADDING-RIGHT: 0px; PADDING-TOP: 0px;" valign="bottom" bgcolor="white"> <td style="FONT-FAMILY: times;"> Senior debt—guaranteed by HUD</td> <td style="FONT-FAMILY: times;"> </td> <td style="FONT-FAMILY: times;"> </td> <td style="FONT-FAMILY: times;" align="right">9,699</td> <td style="FONT-FAMILY: times;"> </td> <td style="FONT-FAMILY: times;"> </td> <td style="FONT-FAMILY: times;" align="right">15,738</td> <td style="FONT-FAMILY: times;"> </td></tr> <tr style="padding:0;PADDING-BOTTOM: 0px; PADDING-LEFT: 0px; PADDING-RIGHT: 0px; PADDING-TOP: 0px;" valign="bottom" bgcolor="#CCEEFF"> <td style="FONT-FAMILY: times;"> Senior debt—guaranteed by USDA</td> <td style="FONT-FAMILY: times;"> </td> <td style="FONT-FAMILY: times;"> </td> <td style="FONT-FAMILY: times;" align="right">28,370</td> <td style="FONT-FAMILY: times;"> </td> <td style="FONT-FAMILY: times;"> </td> <td style="FONT-FAMILY: times;" align="right">38,717</td> <td style="FONT-FAMILY: times;"> </td></tr> <tr style="padding:0;PADDING-BOTTOM: 0px; PADDING-LEFT: 0px; PADDING-RIGHT: 0px; PADDING-TOP: 0px;" valign="bottom" bgcolor="white"> <td style="FONT-FAMILY: times;"> Senior debt—guaranteed by SBA</td> <td style="FONT-FAMILY: times;"> </td> <td style="FONT-FAMILY: times;"> </td> <td style="FONT-FAMILY: times;" align="right">6,189</td> <td style="FONT-FAMILY: times;"> </td> <td style="FONT-FAMILY: times;"> </td> <td style="FONT-FAMILY: times;" align="right">5,087</td> <td style="FONT-FAMILY: times;"> </td></tr> <tr style="padding:0;PADDING-BOTTOM: 0px; PADDING-LEFT: 0px; PADDING-RIGHT: 0px; PADDING-TOP: 0px;" valign="bottom" bgcolor="#CCEEFF"> <td style="FONT-FAMILY: times;"> Senior debt—bonds, net of discount</td> <td style="FONT-FAMILY: times;"> </td> <td style="FONT-FAMILY: times;"> </td> <td style="FONT-FAMILY: times;" align="right">16,265</td> <td style="FONT-FAMILY: times;"> </td> <td style="FONT-FAMILY: times;"> </td> <td style="FONT-FAMILY: times;" align="right">6,176</td> <td style="FONT-FAMILY: times;"> </td></tr> <tr style="padding:0;PADDING-BOTTOM: 0px; PADDING-LEFT: 0px; PADDING-RIGHT: 0px; PADDING-TOP: 0px;" valign="bottom" bgcolor="white"> <td style="FONT-FAMILY: times;"> Senior debt—other mortgage indebtedness</td> <td style="FONT-FAMILY: times;"> </td> <td style="FONT-FAMILY: times;"> </td> <td style="FONT-FAMILY: times;" align="right">75,188</td> <td style="FONT-FAMILY: times;"> </td> <td style="FONT-FAMILY: times;"> </td> <td style="FONT-FAMILY: times;" align="right">24,063</td> <td style="FONT-FAMILY: times;"> </td></tr> <tr style="padding:0;PADDING-BOTTOM: 0px; PADDING-LEFT: 0px; PADDING-RIGHT: 0px; PADDING-TOP: 0px;" valign="bottom" bgcolor="#CCEEFF"> <td style="FONT-FAMILY: times;"> Other debt</td> <td style="FONT-FAMILY: times;"> </td> <td style="FONT-FAMILY: times;"> </td> <td style="FONT-FAMILY: times;" align="right">4,004</td> <td style="FONT-FAMILY: times;"> </td> <td style="FONT-FAMILY: times;"> </td> <td style="FONT-FAMILY: times;" align="right">4,196</td> <td style="FONT-FAMILY: times;"> </td></tr> <tr style="padding:0;PADDING-BOTTOM: 0px; PADDING-LEFT: 0px; PADDING-RIGHT: 0px; PADDING-TOP: 0px;" valign="bottom" bgcolor="white"> <td style="FONT-FAMILY: times;"> Convertible debt issued in 2010, net of discount</td> <td style="FONT-FAMILY: times;"> </td> <td style="FONT-FAMILY: times;"> </td> <td style="FONT-FAMILY: times;" align="right">10,948</td> <td style="FONT-FAMILY: times;"> </td> <td style="FONT-FAMILY: times;"> </td> <td style="FONT-FAMILY: times;" align="right">10,105</td> <td style="FONT-FAMILY: times;"> </td></tr> <tr style="padding:0;PADDING-BOTTOM: 0px; PADDING-LEFT: 0px; PADDING-RIGHT: 0px; PADDING-TOP: 0px;" valign="bottom" bgcolor="#CCEEFF"> <td style="FONT-FAMILY: times;"> Convertible debt issued in 2011</td> <td style="FONT-FAMILY: times;"> </td> <td style="FONT-FAMILY: times;"> </td> <td style="FONT-FAMILY: times;" align="right">4,509</td> <td style="FONT-FAMILY: times;"> </td> <td style="FONT-FAMILY: times;"> </td> <td style="FONT-FAMILY: times;" align="right">4,509</td> <td style="FONT-FAMILY: times;"> </td></tr> <tr style="padding:0;PADDING-BOTTOM: 0px; PADDING-LEFT: 0px; PADDING-RIGHT: 0px; PADDING-TOP: 0px;" valign="bottom" bgcolor="white"> <td style="FONT-FAMILY: times;"> Convertible debt issued in 2012</td> <td style="FONT-FAMILY: times;"> </td> <td style="FONT-FAMILY: times;"> </td> <td style="FONT-FAMILY: times;" align="right">7,500</td> <td style="FONT-FAMILY: times;"> </td> <td style="FONT-FAMILY: times;"> </td> <td style="FONT-FAMILY: times;" align="right">—</td> <td style="FONT-FAMILY: times;"> </td></tr> <tr style="padding:0;PADDING-BOTTOM: 0px; PADDING-LEFT: 0px; PADDING-RIGHT: 0px; FONT-SIZE: 1.5pt; PADDING-TOP: 0px;" valign="top"> <td style="FONT-FAMILY: times;" valign="bottom"> </td> <td style="FONT-FAMILY: times;" valign="bottom"> </td> <td style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times;" valign="bottom" colspan="2" align="right"> </td> <td style="FONT-FAMILY: times;" valign="bottom"> </td> <td style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times;" valign="bottom" colspan="2" align="right"> </td> <td style="FONT-FAMILY: times;" valign="bottom"> </td></tr> <tr style="padding:0;PADDING-BOTTOM: 0px; PADDING-LEFT: 0px; PADDING-RIGHT: 0px; PADDING-TOP: 0px;" valign="bottom" bgcolor="#CCEEFF"> <td style="FONT-FAMILY: times;"> Total</td> <td style="FONT-FAMILY: times;"> </td> <td style="FONT-FAMILY: times;"> </td> <td style="FONT-FAMILY: times;" align="right">171,876</td> <td style="FONT-FAMILY: times;"> </td> <td style="FONT-FAMILY: times;"> </td> <td style="FONT-FAMILY: times;" align="right">117,242</td> <td style="FONT-FAMILY: times;"> </td></tr> <tr style="padding:0;PADDING-BOTTOM: 0px; PADDING-LEFT: 0px; PADDING-RIGHT: 0px; PADDING-TOP: 0px;" valign="bottom" bgcolor="white"> <td style="FONT-FAMILY: times;"> Less current portion</td> <td style="FONT-FAMILY: times;"> </td> <td style="FONT-FAMILY: times;"> </td> <td style="FONT-FAMILY: times;" align="right">19,387</td> <td style="FONT-FAMILY: times;"> </td> <td style="FONT-FAMILY: times;"> </td> <td style="FONT-FAMILY: times;" align="right">11,909</td> <td style="FONT-FAMILY: times;"> </td></tr> <tr style="padding:0;PADDING-BOTTOM: 0px; PADDING-LEFT: 0px; PADDING-RIGHT: 0px; PADDING-TOP: 0px;" valign="bottom" bgcolor="#CCEEFF"> <td style="FONT-FAMILY: times;"> Less portion included in liabilities of disposal group held for sale</td> <td style="FONT-FAMILY: times;"> </td> <td style="FONT-FAMILY: times;"> </td> <td style="FONT-FAMILY: times;" align="right">3,662</td> <td style="FONT-FAMILY: times;"> </td> <td style="FONT-FAMILY: times;"> </td> <td style="FONT-FAMILY: times;" align="right">240</td> <td style="FONT-FAMILY: times;"> </td></tr> <tr style="padding:0;PADDING-BOTTOM: 0px; PADDING-LEFT: 0px; PADDING-RIGHT: 0px; FONT-SIZE: 1.5pt; PADDING-TOP: 0px;" valign="top"> <td style="FONT-FAMILY: times;" valign="bottom"> </td> <td style="FONT-FAMILY: times;" valign="bottom"> </td> <td style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times;" valign="bottom" colspan="2" align="right"> </td> <td style="FONT-FAMILY: times;" valign="bottom"> </td> <td style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times;" valign="bottom" colspan="2" align="right"> </td> <td style="FONT-FAMILY: times;" valign="bottom"> </td></tr> <tr style="padding:0;PADDING-BOTTOM: 0px; PADDING-LEFT: 0px; PADDING-RIGHT: 0px; PADDING-TOP: 0px;" valign="bottom" bgcolor="white"> <td style="FONT-FAMILY: times;"> Notes payable and other debt, net of current portion</td> <td style="FONT-FAMILY: times;"> </td> <td style="FONT-FAMILY: times;" align="right">$</td> <td style="FONT-FAMILY: times;" align="right">148,827</td> <td style="FONT-FAMILY: times;"> </td> <td style="FONT-FAMILY: times;" align="right">$</td> <td style="FONT-FAMILY: times;" align="right">105,093</td> <td style="FONT-FAMILY: times;"> </td></tr> <tr style="padding:0;PADDING-BOTTOM: 0px; PADDING-LEFT: 0px; PADDING-RIGHT: 0px; FONT-SIZE: 1.5pt; PADDING-TOP: 0px;" valign="top"> <td style="FONT-FAMILY: times;" valign="bottom"> </td> <td style="FONT-FAMILY: times;" valign="bottom"> </td> <td style="BORDER-BOTTOM: #000000 2.25pt double; FONT-FAMILY: times;" valign="bottom" colspan="2" align="right"> </td> <td style="FONT-FAMILY: times;" valign="bottom"> </td> <td style="BORDER-BOTTOM: #000000 2.25pt double; FONT-FAMILY: times;" valign="bottom" colspan="2" align="right"> </td> <td style="FONT-FAMILY: times;" valign="bottom"> </td></tr></table></div> </div> Scheduled Maturities         The schedule below summarizes the scheduled maturities as of December 31, 2012 for each of the next five years and thereafter. The 2013 maturities include $3.7 million related to the Vandalia HUD mortgage note classified as liabilities of disposal group held for sale at December 31, 2012 that was assumed by the buyer of the Hearth & Home of Vandalia assisted living facility that the Company sold in a transaction that closed in May 2013 (see Note 3 and Note 23). <div style="POSITION: relative; PADDING-BOTTOM: 0pt; PADDING-LEFT: 0pt; WIDTH: 78.09%; PADDING-RIGHT: 0pt; MARGIN-LEFT: 15%; PADDING-TOP: 0pt;">   <div align="center"> <table style="text-align:left;TEXT-ALIGN: left;" border="0" cellspacing="0" cellpadding="0" width="100%"> <tr style="padding:0;PADDING-BOTTOM: 0px; PADDING-LEFT: 0px; PADDING-RIGHT: 0px; PADDING-TOP: 0px;"> <td style="FONT-FAMILY: times;" align="left"></td> <td style="FONT-FAMILY: times;" width="12"></td> <td style="FONT-FAMILY: times;" width="7" align="right"></td> <td style="FONT-FAMILY: times;" width="55"></td> <td style="FONT-FAMILY: times;" width="12"></td></tr> <tr style="padding:0;PADDING-BOTTOM: 0px; PADDING-LEFT: 0px; PADDING-RIGHT: 0px; PADDING-TOP: 0px;" valign="bottom"> <th style="FONT-FAMILY: times;" align="left">  </th> <th style="FONT-FAMILY: times;"> </th> <th style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times;" colspan="2" align="center">Amounts in (000's)</th> <th style="FONT-FAMILY: times;"> </th></tr> <tr style="padding:0;PADDING-BOTTOM: 0px; PADDING-LEFT: 0px; PADDING-RIGHT: 0px; PADDING-TOP: 0px;" valign="top" bgcolor="#CCEEFF"> <td style="FONT-FAMILY: times;" valign="bottom"> 2013</td> <td style="FONT-FAMILY: times;" valign="bottom"> </td> <td style="FONT-FAMILY: times;" valign="bottom" align="right">$</td> <td style="FONT-FAMILY: times;" valign="bottom" align="right">23,661</td> <td style="FONT-FAMILY: times;" valign="bottom"> </td></tr> <tr style="padding:0;PADDING-BOTTOM: 0px; PADDING-LEFT: 0px; PADDING-RIGHT: 0px; PADDING-TOP: 0px;" valign="top" bgcolor="white"> <td style="FONT-FAMILY: times;" valign="bottom"> 2014</td> <td style="FONT-FAMILY: times;" valign="bottom"> </td> <td style="FONT-FAMILY: times;" valign="bottom"> </td> <td style="FONT-FAMILY: times;" valign="bottom" align="right">20,561</td> <td style="FONT-FAMILY: times;" valign="bottom"> </td></tr> <tr style="padding:0;PADDING-BOTTOM: 0px; PADDING-LEFT: 0px; PADDING-RIGHT: 0px; PADDING-TOP: 0px;" valign="top" bgcolor="#CCEEFF"> <td style="FONT-FAMILY: times;" valign="bottom"> 2015</td> <td style="FONT-FAMILY: times;" valign="bottom"> </td> <td style="FONT-FAMILY: times;" valign="bottom"> </td> <td style="FONT-FAMILY: times;" valign="bottom" align="right">30,888</td> <td style="FONT-FAMILY: times;" valign="bottom"> </td></tr> <tr style="padding:0;PADDING-BOTTOM: 0px; PADDING-LEFT: 0px; PADDING-RIGHT: 0px; PADDING-TOP: 0px;" valign="top" bgcolor="white"> <td style="FONT-FAMILY: times;" valign="bottom"> 2016</td> <td style="FONT-FAMILY: times;" valign="bottom"> </td> <td style="FONT-FAMILY: times;" valign="bottom"> </td> <td style="FONT-FAMILY: times;" valign="bottom" align="right">41,000</td> <td style="FONT-FAMILY: times;" valign="bottom"> </td></tr> <tr style="padding:0;PADDING-BOTTOM: 0px; PADDING-LEFT: 0px; PADDING-RIGHT: 0px; PADDING-TOP: 0px;" valign="top" bgcolor="#CCEEFF"> <td style="FONT-FAMILY: times;" valign="bottom"> 2017</td> <td style="FONT-FAMILY: times;" valign="bottom"> </td> <td style="FONT-FAMILY: times;" valign="bottom"> </td> <td style="FONT-FAMILY: times;" valign="bottom" align="right">3,750</td> <td style="FONT-FAMILY: times;" valign="bottom"> </td></tr> <tr style="padding:0;PADDING-BOTTOM: 0px; PADDING-LEFT: 0px; PADDING-RIGHT: 0px; PADDING-TOP: 0px;" valign="top" bgcolor="white"> <td style="FONT-FAMILY: times;" valign="bottom"> Thereafter</td> <td style="FONT-FAMILY: times;" valign="bottom"> </td> <td style="FONT-FAMILY: times;" valign="bottom"> </td> <td style="FONT-FAMILY: times;" valign="bottom" align="right">52,789</td> <td style="FONT-FAMILY: times;" valign="bottom"> </td></tr> <tr style="padding:0;PADDING-BOTTOM: 0px; PADDING-LEFT: 0px; PADDING-RIGHT: 0px; FONT-SIZE: 1.5pt; PADDING-TOP: 0px;" valign="top"> <td style="FONT-FAMILY: times;" valign="bottom"> </td> <td style="FONT-FAMILY: times;" valign="bottom"> </td> <td style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times;" valign="bottom" colspan="2" align="right"> </td> <td style="FONT-FAMILY: times;" valign="bottom"> </td></tr> <tr style="padding:0;PADDING-BOTTOM: 0px; PADDING-LEFT: 0px; PADDING-RIGHT: 0px; PADDING-TOP: 0px;" valign="top" bgcolor="#CCEEFF"> <td style="FONT-FAMILY: times;" valign="bottom"> Subtotal</td> <td style="FONT-FAMILY: times;" valign="bottom"> </td> <td style="FONT-FAMILY: times;" valign="bottom"> </td> <td style="FONT-FAMILY: times;" valign="bottom" align="right">172,649</td> <td style="FONT-FAMILY: times;" valign="bottom"> </td></tr> <tr style="padding:0;PADDING-BOTTOM: 0px; PADDING-LEFT: 0px; PADDING-RIGHT: 0px; PADDING-TOP: 0px;" valign="top" bgcolor="white"> <td style="FONT-FAMILY: times;" valign="bottom"> Less: unamortized discounts ($702 classified as current)</td> <td style="FONT-FAMILY: times;" valign="bottom"> </td> <td style="FONT-FAMILY: times;" valign="bottom"> </td> <td style="FONT-FAMILY: times;" valign="bottom" align="right">(1,131</td> <td style="FONT-FAMILY: times;" valign="bottom">)</td></tr> <tr style="padding:0;PADDING-BOTTOM: 0px; PADDING-LEFT: 0px; PADDING-RIGHT: 0px; PADDING-TOP: 0px;" valign="top" bgcolor="#CCEEFF"> <td style="FONT-FAMILY: times;" valign="bottom"> Plus: unamortized premiums ($90 classified as current)</td> <td style="FONT-FAMILY: times;" valign="bottom"> </td> <td style="FONT-FAMILY: times;" valign="bottom"> </td> <td style="FONT-FAMILY: times;" valign="bottom" align="right">358</td> <td style="FONT-FAMILY: times;" valign="bottom"> </td></tr> <tr style="padding:0;PADDING-BOTTOM: 0px; PADDING-LEFT: 0px; PADDING-RIGHT: 0px; FONT-SIZE: 1.5pt; PADDING-TOP: 0px;" valign="top"> <td style="FONT-FAMILY: times;" valign="bottom"> </td> <td style="FONT-FAMILY: times;" valign="bottom"> </td> <td style="BORDER-BOTTOM: #000000 1pt solid; FONT-FAMILY: times;" valign="bottom" colspan="2" align="right"> </td> <td style="FONT-FAMILY: times;" valign="bottom"> </td></tr> <tr style="padding:0;PADDING-BOTTOM: 0px; PADDING-LEFT: 0px; PADDING-RIGHT: 0px; PADDING-TOP: 0px;" valign="top" bgcolor="white"> <td style="FONT-FAMILY: times;" valign="bottom"> Total notes and other debt</td> <td style="FONT-FAMILY: times;" valign="bottom"> </td> <td style="FONT-FAMILY: times;" valign="bottom" align="right">$</td> <td style="FONT-FAMILY: times;" valign="bottom" align="right">171,876</td> <td style="FONT-FAMILY: times;" valign="bottom"> </td></tr> <tr style="padding:0;PADDING-BOTTOM: 0px; PADDING-LEFT: 0px; PADDING-RIGHT: 0px; FONT-SIZE: 1.5pt; PADDING-TOP: 0px;" valign="top"> <td style="FONT-FAMILY: times;" valign="bottom"> </td> <td style="FONT-FAMILY: times;" valign="bottom"> </td> <td style="BORDER-BOTTOM: #000000 2.25pt double; FONT-FAMILY: times;" valign="bottom" colspan="2" align="right"> </td> <td style="FONT-FAMILY: times;" valign="bottom"> </td></tr></table></div> </div> Debt Covenant Compliance         As of December 31, 2012, the Company (including its consolidated variable interest entity) has over twenty different credit facilities (credit facilities, mortgage notes, bonds and other credit obligations) outstanding that include various financial and administrative covenant requirements. Covenant requirements include, but are not limited to, fixed charge coverage ratios, debt service coverage ratios, minimum EBITDA or EBITDAR, current ratios and tangible net worth requirements. Certain financial covenant requirements are based on consolidated financial measurements whereas others are based on subsidiary level (i.e.; facility, multiple facilities or a combination of subsidiaries comprising less than the Company's consolidated financial measurements). Some covenants are based on annual financial metric measurements whereas others are based on monthly or quarterly financial metric measurements. The Company routinely tracks and monitors its compliance with its covenant requirements. In recent periods, including as of December 31, 2012, the Company has not been in compliance with certain financial and administrative covenants. For each instance of such non-compliance, the Company has obtained waivers or amendments to such requirements including as necessary modifications to future covenant requirements or the elimination of certain requirements in future periods. Revolving Credit Facilities and Lines of Credit Gemino Credit Facility         On September 20, 2012, AdCare terminated and paid off all amounts outstanding under that certain Credit Agreement, dated October 29, 2010, between Gemino Healthcare Finance, LLC ("Gemino") and AdCare (the "Gemino Credit Facility"). The Gemino Credit Facility was a secured credit facility for borrowings up to $7.5 million, which was to mature on October 29, 2013. As of September 20, 2012, the amount outstanding in principal balance was approximately $4.2 million which was paid from funds made available to AdCare from a new credit facility entered into with The PrivateBank and Trust Company ("PrivateBank"). Interest accrued on the principal balance outstanding of the Gemino Credit Facility at an annual rate equal to LIBOR rate plus the applicable margin of 4.75% to 5.00%, depending on the principal amount outstanding. The Gemino Credit Facility contained various financial covenants and other restrictions, including a fixed charge cover ratio and maximum loan turn days, as well as borrowing base restrictions. No material early termination penalties were incurred by AdCare as a result of the termination.         At December 31, 2011, the outstanding balance of approximately $7.3 million for the Gemino Credit Facility was classified as current as a result of the required lockbox arrangement and subjective acceleration clauses. Gemino-Bonterra Amendment         On September 20, 2012, ADK Bonterra/Parkview, LLC, a wholly owned subsidiary of AdCare ("Bonterra") entered into a Second Amendment to the Credit Agreement with Gemino ("Gemino-Bonterra Credit Facility"), which amended the original Credit Agreement dated April 27, 2011 between Bonterra and Gemino. The Gemino-Bonterra Credit Facility is a secured credit facility for borrowings up to $2.0 million. The amendment extends the term of the Gemino-Bonterra Credit Facility from October 29, 2013 to January 31, 2014 and amends certain financial covenants regarding Bonterra's fixed charge coverage ratio, maximum loan turn days and applicable margin. Interest accrues on the principal balance outstanding at an annual rate equal to the LIBOR rate plus the applicable margin of 4.75% to 5.00%, which fluctuates depending upon the principal amount outstanding. As of December 31, 2012, $1.3 million was outstanding under the Gemino-Bonterra Credit Facility.         On December 20, 2012, Bonterra entered into a Third Amendment to the Credit Agreement with Gemino, which amended the original Credit Agreement, dated April 27, 2011, between Bonterra and Gemino. The Third Amendment altered the financial covenant in the original credit agreement to exclude the Oklahoma Owners under another credit agreement with Gemino from the covenant calculation of maximum loan turn days and acknowledges that Bonterra shall not be obligated, directly or indirectly, for any indebtedness or obligations of the Oklahoma Owners to Gemino. PrivateBank Credit Facility         On September 20, 2012, in connection with the payoff of the Gemino Credit Agreement noted above, AdCare entered into a Loan and Security Agreement with PrivateBank ("PrivateBank Credit Facility"). Under the terms of the PrivateBank Credit Facility, PrivateBank provides $10.6 million principal amount for a three-year period on senior secured revolving credit facility limited to borrowing base restrictions and offset by a $0.7 million standby letter of credit at December 31, 2012, increasing to $2.5 million at July 31, 2013.         The PrivateBank Credit Facility matures on December 31, 2016. Interest is accrued on the principal balance at an annual rate of the greater of (i) 1% plus the prime interest rate per annum, or (ii) 5% per annum. Payments for the interest are due monthly and commenced on October 1, 2012. In addition, there is a non-utilization fee of 0.5% on the unused portion of the available credit. The PrivateBank Credit Facility may be prepaid at any time without premium or penalty, provided that such prepayment is accompanied by a simultaneous payment of all accrued and unpaid interest, through the date of prepayment. The PrivateBank Credit Facility is secured by a first priority security interest in the real property and improvements constituting nursing facilities owned and operated by AdCare. AdCare has unconditionally guaranteed all amounts owed to PrivateBank under the PrivateBank Credit Facility.         Proceeds from the PrivateBank Credit Facility were used to pay off all amounts outstanding under a separate $2.0 million credit facility with PrivateBank under which certain subsidiaries of AdCare were borrowers, and the Gemino Credit Facility.         On October 26, 2012, the Company and certain of its wholly owned subsidiaries, on the one hand, and PrivateBank entered into a Modification Agreement which amends the PrivateBank Credit Facility, dated as of September 20, 2012, between certain of the Company's wholly owned subsidiaries and PrivateBank. The Modification Agreement amends the loan agreement to: (i) allow PrivateBank to issue additional letters of credit for the account of the borrowers under the loan agreement; and (ii) change the total amount that may be issued under any letters of credit to $2.5 million. The modification agreement did not change the maximum amount that may be borrowed under the loan agreement by the borrowers, which remains at $10.6 million. As of December 31, 2012, $7.7 million was outstanding under the PrivateBank Credit Facility. Contemporary Healthcare Senior         On August 17, 2012 in conjunction with the acquisition of Companions Specialized Care Center in Tulsa, OK, two wholly owned subsidiaries of the Company entered into a Loan Agreement with Contemporary Healthcare Senior ("Contemporary") and issued a promissory note in favor of Contemporary for a principal amount of $600,000 ("Contemporary $600,000 Loan"). The Contemporary $600,000 Loan matures on August 20, 2015 and interest accrues on the principal balance at an annual rate of 9.0%. Payments for the interest and a portion of the principal in excess of the borrowing base are payable monthly, commencing on September 20, 2012. As of December 31, 2012, $0.2 million was outstanding under the Contemporary $600,000 Loan. Senior Debt—Guaranteed by HUD Hearth and Home of Vandalia         In connection with the Company's January 2012 refinancing of the assisted living facility known as Hearth and Home of Vandalia, owned by a wholly owned subsidiary of AdCare, the Company obtained a term loan, insured by U.S. Department of Housing and Urban Development ("HUD"), with a financial institution for a total amount of $3.7 million that matures in 2041. The HUD term loan requires monthly principal and interest payments with a fixed interest rate of 3.74%. Deferred financing costs incurred on the term loan amounted to $0.2 million and are being amortized to interest expense over the life of the loan. The HUD term loan has a prepayment penalty of 8% starting in 2014 declining by 1% each year through 2022. This mortgage note was assumed by the buyer in the closing of the sale of this facility that occurred in May 2013 pursuant to the terms of the sale agreement related to the sale of six of the Company's assisted living facilities located in Ohio (see Note 3 to our Consolidated Financial Statements included in this Annual Report). Other Senior Debt—Guaranteed by HUD         For three facilities, the Company has term loans insured by HUD a financial institution that totaled approximately $6.0 million at December 31, 2012. The combined HUD mortgage notes require monthly principal and interest payments of approximately $45,000 with fixed interest rates ranging from 5.95% to 7.25%. The notes mature at various dates starting in 2027 through 2038. Deferred financing costs incurred on these loans amounted to approximately $0.3 million and are being amortized to interest expense over the life of the notes. The loans have prepayment penalties of 3.5% to 6% through 2013 declining by 1% each year through 2022. The loans have certain restrictive covenants and HUD regulatory compliance requirements including maintenance of certain restricted escrow deposits and reserves for replacement. Sale of Ohio ALFs         On December 28, 2012, AdCare sold four of its assisted living facilities located in Ohio and used a portion of the funds to pay off the principal balance of their HUD loans in the amount of $6.4 million. On February 28, 2013, AdCare completed the sale of one additional assisted living facility and used the proceeds to repay the principal balance of the HUD loan with respect to the facility in the amount of $1.9 million (see Note 23 to our Consolidated Financial Statements included in this Annual Report). Senior Debt—Guaranteed by USDA         For five facilities, the Company has term loans insured 70% to 80% by the USDA with financial institutions that totaled approximately $28.4 million at December 31, 2012. The combined USDA mortgage notes require monthly principal and interest payments of approximately $0.2 million adjusted quarterly with a variable interest rate of prime plus 1.0% to 1.75% with a floor of 5.50% to 6.00%. The notes mature at various dates starting in 2035 through 2036. Deferred financing costs incurred on these loans amounted to approximately $0.8 million and are being amortized to interest expense over the life of the notes. In addition, the loans have an annual renewal fee for the USDA guarantee of 0.25% of the guaranteed portion. The loans have prepayment penalties of 8% to 9% through 2013 declining by 1% each year capped at 1% for the remainder of the term. Senior Debt—Guaranteed by SBA Stone County         In June 2012, Mt. V Property Holdings, LLC. ("Stone County"), a wholly owned subsidiary of AdCare, entered into a loan agreement with the Economic Development Corporation of Fulton County (the "CDC"), an economic development corporation working with the SBA, in the amount of $1.3 million. The funding from the CDC loan of $1.3 million was used to satisfy a $1.3 million Metro City Bank loan that was used to acquire the assets of a skilled nursing facility located in Arkansas known as the Stone County Nursing and Rehabilitation facility.         The CDC loan matures in July 2032 and accrues interest at a rate of 2.42% per annum. The CDC loan is payable in equal monthly installments of principal and interest based on a twenty (20) year amortization schedule. The CDC loan may be prepaid, subject to prepayment premiums, during the first 10 years. There are also annual fees associated with the CDC loan, including an SBA guarantee fee. The CDC loan is secured by a second in priority security deed on the Stone County Nursing and Rehabilitation facility and guarantees from AdCare, the SBA and a wholly owned subsidiary of AdCare. As of December 31, 2012, $1.3 million was outstanding under the CDC loan. Other Senior Debt—Guaranteed by SBA         For three facilities, the Company has term loans insured 75% by the SBA with a financial institution that totaled approximately $4.9 million at December 31, 2012. The combined SBA mortgage notes require monthly principal and interest payments of approximately $28,000 with an interest rate of 2.42% to 5.5%. The notes mature at various dates starting in 2031 through 2036. Deferred financing costs incurred on these loans amounted to approximately $0.2 million and are being amortized to interest expense over the life of the note. In addition, the loans have an annual renewal fee for the SBA guarantee of 0.13% to 0.25% of the guaranteed portion. The loans have prepayment penalties ranging from 2.48% to 3.0% declining each year until year 10. Senior Debt—Bonds, net of Discount Eaglewood Village Bonds         In April 2012, a wholly owned subsidiary of AdCare entered into a loan agreement with the City of Springfield in the State of Ohio pursuant to which City of Springfield lent to such subsidiary the proceeds from the sale of City of Springfield's Series 2012 Bonds. The Series 2012 Bonds consist of $6.6 million in Series 2012A First Mortgage Revenue Bonds and $0.6 million in Taxable Series 2012B First Mortgage Revenue Bonds. The Series 2012 Bonds were issued pursuant to an April 2012 Indenture of Trust between the City of Springfield and the Bank of Oklahoma. The Series 2012A Bonds mature in May 2042 and accrue interest at a fixed rate of 7.65% per annum. The Series 2012B Bonds mature in May 2021 and accrue interest at a fixed rate of 8.5% per annum. Deferred financing costs incurred on the loan amounted to $0.6 million and are being amortized to interest expense over the life of the loan. The loan is secured by the Company's assisted living facility located in Springfield, Ohio known as Eaglewood Village and guaranteed by AdCare. There is an original issue discount of $0.3 million and restricted assets of $0.3 million related to this loan. As of December 31, 2012, $6.6 million was outstanding under the Series 2012A First Mortgage Revenue Bonds and $0.6 million was outstanding under the Taxable Series 2012B First Mortgage Revenue Bonds. The unamortized discount on the bonds was $0.2 million at December 31 2012. Quail Creek         In July 2012, a wholly owned subsidiary of AdCare financed the purchase of a skilled nursing facility located in Oklahoma City, Oklahoma known as Quail Creek Nursing by the assumption of existing indebtedness under that certain Loan Agreement and Indenture of First Mortgage with The Bank of New York Mellon Global Corporate Trust, as assignee of The Liberty National Bank and Trust of that certain Bond Indenture, dated September 1, 1986, as amended as of September 1, 2001. The indebtedness under the Loan Agreement and Indenture consists of a principal amount of $2.8 million. In July of 2012, the purchase price allocation of fair value totaling $3.2 million was assigned to this indebtedness resulting in a $0.4 million premium that is being amortized to maturity. The loan matures in August 2016 and accrues interest at a fixed rate of 10.25% per annum. The loan is secured by the Quail Creek facility.         As of December 31, 2012, $2.8 million was outstanding under the Loan Agreement. The unamortized premium on the bonds was $0.4 million at December 31 2012. Riverchase         The Company's consolidated variable interest entity, Riverchase Village ADK, LLC ("Riverchase"), has revenue bonds, in two series, issued by the Medical Clinical Board of the City of Hoover in the state of Alabama which the Company has guaranteed the obligation under the bonds.         The Series 2010A portion of $5.8 million matures on June 1, 2039. The Series 2010B portion of $0.5 million matures serially beginning on June 1, 2012 through June 1, 2017, with annual redemption amounts ranging from $75,000 to $100,000. The Series 2010A and 2010B bonds may be redeemed early beginning on June 1, 2012 through May 31, 2015 at a redemption price ranging from 101% to 103% of the principal amount plus accrued interest. Any early redemption after May 31, 2015 is at a redemption price of 100% of the principal amount plus accrued interest. The bonds require monthly payments of fixed interest of $38,000 at a weighted average effective interest rate of 7.9%.         As of December 31, 2012, $5.8 million was outstanding under the Series 2010A portion and $0.5 million was outstanding under the Series 2010 B portion of the bonds. The bonds contain an original issue discount that is being amortized over the term of the notes. The unamortized discount on the bonds was $0.2 million at December 31 2012. Senior Debt—Other Mortgage Indebtedness Woodland Manor         In connection with the Company's January 2012 acquisition of the skilled nursing facility known as Woodland Manor, the Company entered into a loan agreement for $4.8 million with PrivateBank. The loan matures in December 2016 with a required final payment of $4.3 million and accrues interest at the LIBOR rate plus 4% with a minimum rate of 6% per annum. The loan requires monthly payments of principal and interest. Deferred financing costs incurred on the loan amounted to $0.1 million and are being amortized to interest expense over the life of the loan. The loan has a prepayment penalty of 5% through 2012 declining by 1% each year through 2015. The loan is secured by the Woodland Manor facility and guaranteed by AdCare. As of December 31, 2012, $4.7 million was outstanding under loan agreement. Little Rock, Northridge and Woodland Hills         In connection with the Company's April 2012 acquisition of three skilled nursing facilities located in Arkansas known as Little Rock, Northridge and Woodland Hills, the Company entered into a loan agreement for $21.8 million with PrivateBank. The loan originally matured in March 2017 with a required final payment of $19.7 million and has since been amended. The loan accrues interest at the LIBOR rate plus 4% with a minimum rate of 6% per annum and requires monthly principal payments plus interest for total current monthly payments of $0.2 million. Deferred financing costs incurred on the loan amounted to $0.4 million and are being amortized to interest expense over the life of the loan. The loan has a prepayment penalty of 5% through 2012 declining by 1% each year through 2015. The loan is secured by the three facilities and guaranteed by AdCare. The Company has $1.8 million of restricted assets related to this loan.         On June 15, 2012, the Company entered into a modification agreement with PrivateBank to modify the terms of the loan agreement. The loan modification agreement, among other things, amended the loan agreement to reflect a maturity date of March 30, 2013.         A portion of the PrivateBank loan with respect to the Northridge facility and Woodland Hills facility was paid off and refinanced with a portion of the proceeds from a new credit facility with KeyBank National Association ("KeyBank") on December 28, 2012, as discussed below. On December 28, 2012, certain subsidiaries of the Company entered into a Second Modification Agreement with PrivateBank which modified the loan agreement. The modification, among other things, extends the term of the PrivateBank loan from March 30, 2013 to December 31, 2016; releases certain subsidiaries of the Company related to the Northridge facility and Woodland Hills facility from liability under two of the promissory notes and other related documents under the credit facility; and reduces the total outstanding amount owed under the credit facility from $21.8 million to $13.7 million. As of December 31, 2012, $13.7 million was outstanding under loan agreement. Abington Place Metro City Bank         In connection with the Company's June 2012 acquisition of the skilled nursing facility located in Little Rock, Arkansas known as Abington Place, a wholly owned subsidiary of AdCare, entered into a short-term loan agreement for $3.4 million with Metro City Bank. In August 2012, the maturity date was extended from September 2012 to January 2014. The note accrues interest at the prime rate plus 2.25% with a minimum rate of 6.25% per annum. Deferred financing costs incurred on the loan amounted to $0.1 million and are amortized to interest expense over the life of the loan. The loan was secured by the Abington Place facility and guaranteed by AdCare.         The Abington Metro City Bank loan was paid off and refinanced with Key Bank on December 28, 2012 as discussed below. Stone County         In June 2012, Mt. V Property Holdings, LLC ("Stone County"), a wholly owned subsidiary of AdCare, entered into two loan agreements with Metro City Bank in the amounts of $1.3 million and $1.8 million. The purpose of these agreements was to refinance existing debt in the original principal amount of $3.1 million used to acquire the assets of a skilled nursing facility located in Arkansas known as the Stone County Nursing and Rehabilitation facility.         The $1.3 million loan from Metro City Bank was repaid with the funding from the CDC loan of $1.3 million. The $1.8 million Metro City Bank loan matures in June 2022 and accrues interest at the prime rate plus 2.25% with a minimum rate of 6.25% per annum. Deferred financing costs incurred on this loan amounted to $0.1 million and are being amortized to interest expense over the life of the loan. The Metro City Bank loan has a prepayment penalty of 10% for any prepayment through June 2013. The penalty is reduced by 1% each year until the loan maturity date. The Metro City Bank loan is secured by the Stone County Nursing and Rehabilitation facility and is guaranteed by AdCare. As of December 31, 2012, $1.8 million was outstanding under the Metro City Bank loan. Glenvue         In July 2012, Glenvue Health & Rehabilitation, a wholly owned subsidiary of AdCare, financed the acquisition of a skilled nursing facility located in Glennville, Georgia, by entering into a loan agreement for $6.6 million with PrivateBank. The loan matures in July 2014 with a required final payment of $6.4 million and accrues interest at an annual rate of the greater of (i) 6.0% per annum; or (ii) the LIBOR rate plus 4.0% per annum. The loan requires monthly payments of principal and interest. Deferred financing costs incurred on the loan amounted to $0.1 million and are being amortized to interest expense over the life of the loan. The loan is secured by the Glenvue facility and guaranteed by AdCare. As of December 31, 2012, $6.5 million was outstanding under the loan. Companions Specialized Care         In August 2012, a wholly owned subsidiary of AdCare, financed the acquisition of a skilled nursing facility located in Tulsa, Oklahoma, known as Companions Specialized Care Center, by entering into a loan agreement for $5.0 million with Contemporary Healthcare Capital. The loan matures in August 2015 with a required final payment of $5.0 million and accrues interest at a fixed rate of 8.5% per annum. Deferred financing costs incurred on the loan amounted to $0.2 million and are being amortized to interest expense over the life of the loan. The loan has a prepayment penalty of 5% during the first year of the term and 1% during the second year of the term. The loan is secured by the Companions Specialized Care facility and guaranteed by AdCare. As of December 31, 2012, $5.0 million was outstanding under the loan. Northridge, Woodland Hills and Abington         On December 28, 2012, the Company's wholly owned subsidiaries which own the Northridge, Woodland Hills and Abington facilities entered into a Secured Loan Agreement with the KeyBank National Association (the "KeyBank Credit Facility"). The KeyBank Credit Facility provides for a $16.5 million principal amount senior secured credit facility and matures on February 27, 2015; provided, however, that the KeyBank Borrowers may extend the maturity date by an additional six months if certain conditions are met. Interest on the KeyBank Credit Facility accrues on the principal balance thereof at an annual rate of 4.25% plus the current LIBOR rate. The KeyBank Credit Facility may be prepaid at any time without premium or penalty, provided that the KeyBank Borrowers pay any costs of KeyBank in re-employing such prepaid funds. AdCare Health Systems, Inc., AdCare Property Holdings, LLC, and AdCare Operations, LLC. have unconditionally guaranteed all amounts owing under the KeyBank Credit Facility.         Proceeds from the KeyBank Credit Facility were used to pay off all amounts outstanding under an unsecured promissory note, dated April 1, 2012, issued by the Company in favor of Strome Alpha Offshore Ltd. in the amount of $5.0 million; payoff of an existing credit facility with Metro City Bank with respect to the Abington facility in the amount of $3.4 million; and payoff of the portion of the PrivateBank Credit Facility which relates to the Northridge and Woodland Hills in the amount of $8.1 million. As of December 31, 2012, $16.5 million was outstanding under the KeyBank Credit Facility. Sumter Valley and Georgetown         In connection with the closing of the Sumter and Georgetown facilities acquisition, two wholly owned subsidiaries of AdCare Sumter Valley Property Holdings, LLC and Georgetown HC&R Property Holdings, LLC entered into a Loan Agreement with Metro City Bank, dated December 31, 2012 in which Metro City Bank issued a promissory note for an aggregate principal amount of $7.0 million (the "Metro City Bank Loan"). The Metro City Bank Loan matures on February 1, 2014. Interest on the loan accrues on the principal balance thereof at an annual rate of 1.5% per annum plus the prime interest rate, to be adjusted quarterly (but in no event shall the total interest be less than 5.50% per annum), and payments for the interest are payable monthly, commencing on February 1, 2013. The entire outstanding principal balance of the loan, together with all accrued but unpaid interest thereon, is payable on February 1, 2014. AdCare and certain of its subsidiaries have unconditionally guaranteed all amounts owing under the Metro City Bank Loan. As of December 31, 2012, $7.0 million was outstanding under the Metro City Bank Loan. Northwest         In connection with the acquisition of the Northwest Nursing Center facility, a wholly owned subsidiary of AdCare, issued a note pursuant to a Loan Agreement with First Commercial Bank, dated December 31, 2012, for a principal amount of $1.5 million. The note matures on December 31, 2017. Interest on the note accrues on the principal balance thereof at an annual rate equal to the prime interest rate (but in no event shall the interest rate be less than 5.00% per annum), and payments for the interest are payable monthly, commencing on January 31, 2013. The entire outstanding principal balance of the note, together with all accrued but unpaid interest thereon, is payable on December 31, 2017. AdCare and certain subsidiaries of the Company have unconditionally guaranteed all amounts owing under the note. As of December 31, 2012, $1.5 million was outstanding under the loan. Hembree Road Building         In November 2012, in connection with the acquisition of AdCare's corporate offices at Hembree Road, Roswell, Georgia, a wholly owned subsidiary of AdCare issued a promissory note in favor of Fidelity Bank for a principal amount of $1.1 million. The note matures in December 2017. Interest on the note accrues on the principal balance thereof at a fixed rate of 5.5% per annum and payments for the interest and principal are due monthly, commencing in December 2012. The entire outstanding principal balance of the note, together with all accrued but unpaid interest thereon, is payable on December 31, 2017. As of December 31, 2012, $1.0 million was outstanding under the loan. Senior Debt—Other Mortgage Indebtedness         For five facilities the Company has obtained various term loans that totaled approximately $17.3 million at December 31, 2012. The combined mortgage notes require monthly principal and interest payments of approximately $0.1 million with interest rates of 6.00% to 6.25%. The notes mature at various dates starting in 2016 through 2031. Deferred financing costs incurred on these loans amounted to approximately $0.5 million and are being amortized to interest expense over the life of the notes.         The remaining mortgage note balance is related to the financing on the Company's former corporate headquarters in Springfield, Ohio with a balance of approximately $0.2 million at December 31, 2012. The mortgage requires fixed monthly payments of approximately $3,000 plus interest at LIBOR plus 3.00% maturing in 2017. The building was sold in June 2013 and the mortgage was paid. Other Debt Eaglewood Village Promissory Note         In January 2012, two wholly owned subsidiaries of AdCare issued a promissory note to the seller in the amount of $0.5 million in connection with the January 2012 acquisition of the assisted living facility located in Springfield, Ohio. The note matures in January 2014 and requires a final payment of $0.5 million. The note bears interest at 6.5% per annum payable monthly beginning in February 2012. The note requires monthly principal and interest payment. The note may be prepaid without penalty at any time. Cantone Promissory Notes         In March 2012, AdCare issued an unsecured promissory note to Cantone Asset Management LLC in the amount of $3.5 million. In April 2012, AdCare issued another promissory note to Cantone Asset Management LLC in the amount of $1.5 million. In July 2012, these two promissory notes were refinanced through the issuance to Cantone Asset Management LLC of an 8% subordinated convertible note in the principal amount of $5.0 million.         The $5.0 million of promissory notes issued to Cantone Asset Management LLC was refinanced as part of the $7.5 million in subordinated convertible promissory notes issued in July 2012 that is discussed below. Strome Note         In April 2012, AdCare issued an unsecured promissory note in the amount of $5.0 million to Strome Alpha Offshore Ltd. The promissory note matured in November 2012, and the Company paid off the promissory note on December 28, 2012, using the proceeds from the KeyBank Credit Facility discussed in Note 9 to our Consolidated Financial Statements included in this Annual Report. Interest accrued on the promissory note at a fixed rate of 10% per annum. Sumter Valley Promissory Note         In connection with the acquisition of the facility known as Sumter Valley Nursing and Rehab in December 2012, a subsidiary of AdCare issued a promissory note to the seller of the facility in the amount of $0.3 million. Interest on the note accrues at a rate of 6% per annum. Principal and interest payments on the note shall be due and payable monthly, beginning on February 1, 2013, with a final payment due on the earlier of December 31, 2014, or the date upon which the Company refinances its loan relating to the Sumter facility. AdCare has unconditionally guaranteed all amounts owed under the note. At December 31, 2012, $0.2 million remained outstanding on this promissory note. Georgetown Promissory Note         In connection with the acquisition of the facility known as Georgetown Healthcare and Rehab in December 2012, a subsidiary of AdCare issued a secured subordinated promissory note to the seller of the Georgetown facility in the amount of $1.9 million. Interest on the note accrues at a rate of 7% per annum. Interest payments on the note shall be due and payable monthly, beginning on February 1, 2013, with a final payment due on the earlier of December 31, 2013; or the date upon which the Company refinances its loan with Metro City Bank relating to the Georgetown Healthcare and Rehab Facility. AdCare has unconditionally guaranteed all amounts owing under the note. Pinnacle Healthcare Promissory Notes         The Company previously issued promissory notes in the aggregate principal amount of $2.4 million. The notes mature March 1, 2014, and bear interest at 7% payable quarterly in arrears the first day of each December, March, June and September beginning December 1, 2011. The notes are subject to mandatory prepayment in the aggregate principal amount of $250,000 on each of March 1, 2013, June 1, 2013, September 1, 2013 and December 1, 2013 and a final payment of $150,000 on March 1, 2014. The notes may also be prepaid without penalty at any time. At December 31, 2012, $1.2 million remained outstanding. Mountain Trace Promissory Notes         Mountain Trace ADK, LLC, a wholly owned subsidiary of AdCare, previously issued promissory notes in the aggregate principal amount of $1,000,000. The notes mature April 1, 2013, and bear interest at 11% payable quarterly in arrears the first day of each January, April, July and October beginning July 1, 2011. The notes may also be prepaid without penalty by providing fifteen days prior notice. The Company received proceeds of $0.9 million net of legal and other financing costs. At December 31, 2012, $0.2 million remained outstanding. Convertible Debt Subordinated Convertible Notes Issued in 2010         On October 26, 2010, the Company entered into a Securities Purchase Agreement with certain accredited investors to sell and issue to the Purchasers an aggregate of $11.1 million in principal amount of the Company's Subordinated Convertible Notes, bearing 10% interest per annum payable quarterly in cash in arrears beginning December 31, 2010.         On October 29, 2010, the Company entered into an amendment and joinder agreement to effectuate the sale of an additional $0.8 million in principal amount of Notes. The initial sale of $11.1 million in principal amount of Notes occurred on October 26, 2010, and the subsequent sale of $0.8 million in principal amount of Notes occurred on October 29, 2010. The notes mature in October 2013.         The Notes are convertible at the option of the holder into shares of common stock of the Company at a current conversion price of $3.73 (adjusted for a 5% stock dividends paid on October 14, 2011 and October 22, 2012, as further discussed in Note 10 to our Consolidated Financial Statements included in this Annual Report, and subject to adjustment for stock dividends, stock splits, combination of shares, recapitalization and other similar events) that is subject to future reductions if the Company issues equity instruments at a lower price. Since there is no minimum conversion price resulting in an indeterminate number of shares to be issued in the future, the Company determined an embedded derivative existed that was required to be bifurcated from the Notes and accounted for separately as a derivative liability recorded at fair value (see Note 15). At the time of initial measurement, the derivative had an estimated fair value of $2.6 million resulting in a discount on the Notes. The discount is being amortized over the term of the Notes. At December 31, 2012, the unamortized discount on the Notes was $0.7 million.         There was a conversion of a $0.2 million note that was part of the October 26, 2010 offering. It was recorded in two $0.1 million allotments. The first one converted in July 2011 at a price of $4.13 per share and resulted in the issuance of 18,160 shares. The second converted in November 2011 at a price of $3.92 and resulted in the issuance of 19,132 shares. As of December 31, 2012, $11.7 million was outstanding under the Notes. Subordinated Convertible Notes Issued in 2011         On March 31, 2011, the Company entered into a Securities Purchase Agreement with certain accredited investors to sell and issue to the Purchasers an aggregate of $2.1 million in principal amount of the Company's Subordinated Convertible Notes. On April 29, 2011, the Company issued an additional $1.8 million in principal amount of the convertible debt issuance. On May 6, 2011, the Company issued an additional $0.6 in principal amount of the Notes. As of December 31, 2012, the total outstanding principal amount of the Notes is $4.5 million. Approximately $1.4 million of the proceeds obtained were used to repay the short-term promissory note that was issued March 31, 2011 and related accrued interest.         The Notes bear a 10% interest per annum and are payable quarterly in cash in arrears beginning June 30, 2011. The Notes mature on March 31, 2014. Debt issuance costs of $0.6 million are being amortized over the life of the Notes.         The Notes are convertible at the option of the holder into shares of common stock of the Company at a conversion price of $4.80 (adjusted for a 5% stock dividends paid on October 14, 2011 and October 22, 2012, as further discussed in Note 10 to our Consolidated Financial Statements included in this Annual Report, and subject to adjustment for stock dividends, stock splits, combination of shares, recapitalization and other similar events). The initial conversion price is subject to adjustment for any stock dividend, stock split, combination of shares, reorganization, recapitalization, reclassification or other similar events. The Notes are unsecured and subordinated in right of payment to existing and future senior indebtedness. Subordinated Convertible Notes Issued in 2012         AdCare entered into a Securities Purchase Agreement, dated as of June 28, 2012, with certain accredited investors pursuant to which the Company issued and sold such investors on July 2, 2012 an aggregate of $7.5 million in principal amount of the Company's 8.0% subordinated convertible promissory notes. The notes bear interest at 8% per annum and such interest is payable quarterly in cash in arrears beginning on September 30, 2012. The notes mature on July 31, 2015. The notes are unsecured and subordinated in right of payment to existing and future senior indebtedness of the Company. The $7.5 million principal amount of the notes includes a refinancing of existing indebtedness of $5.0 million of promissory notes issued to Cantone Asset Management LLC.         At any time on or after the six-month anniversary of the date of issuance of the notes, the notes are convertible at the option of the holder into shares of the Company's common stock at a conversion price equal to $3.97 per share (adjusted for a 5% stock dividend paid on October 22, 2012, as further discussed in Note 10 to our Consolidated Financial Statements included in this Annual Report, and subject to adjustment for stock dividends, stock splits, combination of shares, recapitalization and other similar events).         If at any time on or after the six-month anniversary date, the weighted average price of the common stock for any 20 trading days within a period of 30 consecutive trading days equals or exceeds 200% of the conversion price and the average daily trading volume of the common stock during such 20 days exceeds 50,000 shares, then the Company may, subject to the satisfaction of certain other conditions, redeem the notes in cash at a redemption price equal to the sum of 100% of the principal amount being redeemed plus any accrued and unpaid interest on such principal.         In addition, the holders of a majority of the aggregate principal amount of notes then outstanding may require the Company to redeem all or any portion of the notes upon a change of control transaction, at a redemption price in cash equal to 110% of the redemption amount.         Approximately $23.7 million of the scheduled maturities in 2013, 2014 and 2015, relate to the subordinated convertible notes issued in 2010, 2011 and 2012. While management cannot predict with certainty, we anticipate that some holders of the subordinated convertible notes will elect to convert their subordinated convertible notes into shares of common stock provided the common stock continues to trade above the applicable conversion price for such notes. The conversion prices are $3.73, $4.80 and $3.97 for the subordinated convertible notes issued in 2010, 2011 and 2012, respectively. If all of the subordinated convertible notes had been converted to common stock at December 31, 2012, then the Company would have been required to issue approximately 6.4 million shares of common stock.</div>falsefalsefalsenonnum:textBlockItemTypenaThe entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants.Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6928386&loc=d3e21475-112644 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Regulation S-X (SX) -Number 210 -Section 02 -Paragraph 19, 20, 22 -Article 5 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 129 -Paragraph 2, 4 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 210 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.5-02.19,20,22) -URI http://asc.fasb.org/extlink&oid=6877327&loc=d3e13212-122682 false0NOTES PAYABLE AND OTHER DEBTfalseNOTES PAYABLE AND OTHER DEBTUnKnownUnKnownUnKnownUnKnowntruefalsefalseNoteshttp://www.adcarehealth.com/role/DisclosureNotesPayableAndOtherDebt12