SECURED TERM NOTE
$3,250,000.00 June 30, 1997
FOR VALUE RECEIVED, and intending to be legally bound, the undersigned,
BONE, MUSCLE & JOINT, INC., a Delaware corporation ("Borrower"), hereby promises
to pay to the order of HCFP FUNDING, INC., a Delaware corporation, its
affiliates, successors and assigns ("Lender"), the principal sum of THREE
MILLION TWO HUNDRED FIFTY THOUSAND AND 00/100 DOLLARS ($3,250,000.00) (the
"Principal Sum"), together with interest and other fees as further set forth
herein, to be paid in accordance with the terms set forth below. Capitalized
terms used but not defined herein shall have the meanings given them in that
certain Loan and Security Agreement by and between Lender and Xxxxxxxx dated as
of March 28, 1997 (SCOI practice).
1. Principal and Interest. Xxxxxxxx promises to pay to Lender interest on
the Principal Sum at a fluctuating rate per annum (on the basis of the actual
number of days elapsed over a year of 360 days) equal to the Prime Rate plus
three and one-half percent (Prime plus 3.5%) (the "Base Rate"), provided that
after an Event of Default such rate shall be equal to the Base Rate plus three
percent (3%). For purposes of the foregoing, the term "Prime Rate" means that
rate of interest designated as such by Fleet National Bank of Connecticut, N.A.,
or any successor thereto, as the same may from time to time fluctuate. Interest
only shall be payable monthly in arrears on the last Business Day (defined
herein) of each month for the first six (6) months that this Secured Term Note
remains outstanding, beginning on July 31, 1997 (which first interest
installment shall be for interest accrued on $3,000,000.00 of the Principal Sum
from the date hereof through July 31, 1997, and from the date of the advance of
the additional $250,000.00 through July 31, 1997) and continuing on the last
Business Day of each month thereafter through and including December 31, 1997.
On January 31, 1998, and on the last Business Day of each month thereafter
through and including December 31, 2000 (the "Maturity Date"), Borrower will pay
thirty-six (36) equal monthly installments of principal equal to Ninety Thousand
Two Hundred Seventy Seven and 98/100 Dollars ($90,277.78) per installment,
together with accrued interest on each such installment calculated at the Base
Rate. On the Maturity Date all remaining unpaid principal, together with all
accrued and unpaid interest, shall be due and payable. After the Maturity Date
and until the entire Principal Sum shall be paid in full, the amount of the
Principal Sum then outstanding shall bear interest, payable on demand, at the
Base Rate plus three percent (3%), but in no event to exceed the maximum lawful
rate.
2. Commitment Fee. In consideration for the extension of credit by Xxxxxx
as evidenced by this Secured Term Note, Borrower shall pay to Lender a
Commitment Fee in the amount of one percent (1%) of the Principal Sum, or Thirty
Two Thousand Five Hundred and No/100 Dollars ($32,500.00), with such Commitment
Fee to be paid to Lender through a
deduction from the amount to be advanced at the time of the loan evidenced by
this Secured Term Note.
3. Additional Payments. Xxxxxxxx further promises to pay to Xxxxxx,
immediately upon demand any and all other sums and charges that may at the time
become due and payable hereunder, and all reasonable costs, disbursements and a
reasonable documentation preparation fee in connection with the preparation of
this Secured Term Note and the related documents described in Section 4 below,
and in the collection of any payments due hereunder and in any action, suit or
proceeding to protect, sustain or enforce the rights and remedies of Lender
hereunder.
4. Conditions to Borrowing; Prepayment.
a. Subject to the terms and conditions hereof, Lender shall make available
to Borrower the Principal Sum in immediately available funds not later than
12:00 Noon (Washington, D.C. time) on the Business Day on which the following
conditions precedent are satisfied: (i) Event of Default shall have occurred and
be continuing under this Secured Term Note or any of the Loan and Security
Agreements by and between Lender and Borrower, as the same may be amended,
modified and restated from time to time hereafter, including those Loan and
Security Agreements listed on Schedule 4 attached hereto and made a part hereof
(collectively, the "Loan Agreements"), (such Loan Agreements, together with all
documents, certificates and agreements executed or delivered in connection
therewith, being referred to collectively herein as the "Loan Documents"); (ii)
all representations and warranties contained in this Secured Term Note, the Loan
Documents or otherwise made in writing in connection herewith by or on behalf of
Borrower or any party to any Loan Document shall be true and correct in all
material respects; (iii) the Lender shall have received Uniform Commercial Code
("UCC"), judgement and tax lien searches with the Secretary of State and local
filing offices of each jurisdiction where Xxxxxxxx maintains a place of
business, which yield results consistent with the representations and warranties
contained herein, (iv) Lender shall have received Warrants substantially in the
form of Exhibits A-1 and A-2 attached hereto (the "Warrants"), in form and
substance satisfactory to Lender, and (v) Xxxxxx Xxxxxx, Delphi Ventures III,
L.P., Delphi BioInvestments III, L.P., Oak Investment Partners VI, L.P., and Oak
VI Affiliates Fund, L.P. shall have executed in favor of Lender that certain
Unconditional Guaranty of Payment and Performance substantially in the form of
Exhibit B attached hereto (the "Guaranty");
b. Xxxxxx shall enter the Principal Sum as a debit to a loan account in the
name of Xxxxxxxx and shall also record as credits in said loan account all
payments made by Xxxxxxxx and all proceeds of Collateral which are indefeasibly
paid to Lender, and may record therein, in accordance with customary accounting
practice, other debits and credits.
c. Xxxxxx will account to Borrower monthly with a statement of advances,
charges and payments made pursuant to this Secured Term Note, and such account
rendered by Lender shall be deemed final, binding and conclusive upon Borrower
absent manifest error, or
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unless Xxxxxx is notified by Xxxxxxxx in writing to the contrary within 30 days
after the date each accounting is mailed to Borrower. Such notice shall be
deemed an objection to those items specifically objected to therein.
d. Borrower may prepay all or any part of the Principal Sum outstanding
(inclusive of the $32,500.00 Commitment Fee if the Principal Sum is repaid in
full) without penalty, together with all interest accrued thereon and all other
sums that are payable pursuant to this Secured Term Note.
e. Notwithstanding anything herein to the contrary, the entire Principal
Sum (together with all accrued interest and all other fees, costs and expenses
arising hereunder) shall be due and payable simultaneously with the occurrence
of a Triggering Event (as defined below).
For purposes of this Secured Term Note, the term "Triggering Event" shall
mean:
(A) the closing date of any of the following transactions:
(i) The issuance by Borrower of common stock or other securities
in a public offering, private placement, convertible debt offering or
recapitalization, other than issuances made in connection with
management services agreements between Borrower and physicians;
(ii) The sale or transfer of thirty percent (30%) or more of the
outstanding ownership interests in Borrower in one or more
transactions occurring in any twelve-month period, other than
transactions pursuant to which Xxxxxxxx enters into management
agreements with physicians in the ordinary course of business;
(iii) The sale, lease or other transfer by Borrower of all or
substantially all of its assets in one or more transactions;
(iv) The consolidation or merger by Borrower with an unrelated
company; or
(v) The issuance by Borrower of capital stock to one or more
persons or entities following the date of this Secured Term Note in a
transaction not covered by clauses (i) through (iv) above, which
transaction results in the stockholders of Borrower as of the date of
this Secured Term Note owning less than seventy percent (70%) of the
outstanding ownership interests in Borrower; provided that
(B) The total cash consideration payable in such transaction or series
of transactions equals or exceeds Ten Million and No/100 Dollars
($10,000,000.00).
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5. Payment Office. Both the Principal Sum and the interest hereon and any
other amounts payable hereunder are payable to Borrower in lawful money of the
United States of America at the office of Lender, at 0 Xxxxxxxxx Xxxxxx, Xxxxx
000, Xxxxx Xxxxx, Xxxxxxxx 00000, Attention: Xxxxx X. Xxxxx, President, or at
such other place as Lender may specify in writing to Borrower. Any payment by
other than immediately available funds shall be subject to collection. Interest
shall continue to accrue until the funds by which payment is made are available
to Lender for its use. Any payment hereunder which is stated to be due on a day
on which banks in Washington, D.C. are required or permitted to be closed for
business shall be due and payable on the next business day (each such day a
"Business Day") and such extension of time shall be included in the computation
of interest in connection with such payment.
6. No Presentment; Acceleration. On the Maturity Date or upon the
occurrence of an Event of Default (as defined in Section 12 hereof), the
outstanding Principal Sum, accrued and unpaid interest thereon and all other
sums owed by Borrower to Lender in connection herewith shall immediately become
due and payable. Borrower hereby expressly waives any presentment for payment,
demand for payment, notice of nonpayment or dishonor, protest and notice of
protest of any kind.
7. Security Agreement.
a. This Secured Term Note shall constitute a security agreement as that
term is used in the UCC and Borrower hereby grants to Lender, in order to secure
Borrower's obligations under this Secured Term Note, a security interest in the
following (collectively, the "Collateral"): (i) all of Borrower's now owned and
hereafter acquired accounts, contract rights, general intangibles, chattel
paper, documents and instruments, as such terms are defined in the UCC,
including, without limitation, all obligations for the payment of money arising
out of Borrower's sale of goods or rendition of services ("Accounts"), (ii) all
moneys, securities and other property and the proceeds thereof, now or hereafter
held or received by, or in transit to, Lender from or for Borrower, whether for
safekeeping, pledge, custody, transmission, collection or otherwise, and all of
Borrower's deposits (general or special), balances, sums and credits with Lender
at any time existing, (iii) all of Borrower's right, title and interest, and all
of Xxxxxxxx's rights, remedies, security and liens, in, to and in respect of the
Accounts, including, without limitation, rights of stoppage in transit,
replevin, repossession and reclamation and other rights and remedies of an
unpaid vendor, lienor or secured party, guaranties or other contracts of
suretyship with respect to the Accounts, deposits or other security for the
obligation of any Account debtor, and credit and other insurance, (iv) all of
Borrower's right, title and interest in, to and in respect of all goods relating
to, or which by sale have resulted in, Accounts, including, without limitation,
all goods described in invoices or other documents or instruments with respect
to, or otherwise representing or evidencing, any Account, and all returned,
reclaimed or repossessed goods, (v) in all deposit accounts, as such term is
defined in the UCC, (vi) all books, records, ledger cards, computer programs and
other property at any time evidencing or relating to the Accounts ("Records"),
(vii) all of Borrower's now owned or hereafter acquired inventory of every
description which is held by Borrower for sale or lease or is furnished by
Borrower under
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any contract of service or is held by Borrower as raw materials, work in process
or materials used or consumed in a business, wherever located, and as the same
may now and hereafter from time to time be constituted, together with all cash
and non-cash proceeds and products thereof, (viii) all of Borrower's now owned
or hereafter acquired machinery, equipment, tools, tooling, furniture, fixtures,
goods, supplies, materials, work in process, whether now owned or hereafter
acquired, together with all additions, parts, fittings, accessories, special
tools, attachments, and accessions now and hereafter affixed thereto and/or used
in connection therewith, all replacements thereof and substitutions therefor,
and all cash and non-cash proceeds and products thereof, (ix) all of Borrower's
general intangibles (including, without limitation, any proceeds from insurance
policies after payment of prior interests), patents, unpatented inventions,
trade secrets, copyrights, all contracts and contract rights (including but not
limited to all rights under all management contracts), goodwill, literary
rights, rights to performance, rights under licenses, choses-in-action, claims,
information contained in computer media (such as data bases, source and object
codes, and information therein), things in action, trademarks and trademarks
applied for (together with the goodwill associated therewith) and derivatives
thereof, trade names, including the right to make, use, and vend goods utilizing
any of the foregoing, and permits, licenses, certifications, authorizations and
approvals, and the rights of Borrower thereunder, issued by any governmental,
regulatory, or private authority, agency, or entity whether now owned or
hereafter acquired, together with all cash and non-cash proceeds and products
thereof, and (x) all proceeds of the foregoing, in any form, including, without
limitation, any claims against third parties for loss or damage to or
destruction of any or all of the foregoing. Borrower shall, at Xxxxxxxx's
expense, perform all acts and execute all documents requested by Xxxxxx at any
time to evidence, perfect, maintain and enforce Xxxxxx's security interest and
the priority thereof in the Collateral. Upon Xxxxxx's request, at any time and
from time to time, Borrower shall, at Borrower's sole cost and expense, execute
and deliver to Lender one or more financing statements (in form and substance
satisfactory to Lender) pursuant to the UCC and, where permitted by law,
Borrower hereby authorizes Lender to execute and file one or more financing
statements signed only by Xxxxxx. Notwithstanding anything to the contrary
contained in this Secured Term Note, Borrower and Lender agree that Lender is,
and shall be deemed to be, the "secured party" as that term is defined in the
UCC and elsewhere with respect to personal property.
b. In addition to all other rights, options, and remedies granted to Xxxxxx
under this Secured Term Note, upon the occurrence and continuation of an Event
of Default Lender may exercise all other rights granted to it hereunder and all
rights under the Uniform Commercial Code in effect in the applicable
jurisdiction(s) and under any other applicable law, and exercise the following
rights and remedies (which list is given by way of example and is not intended
to be an exhaustive list of all such rights and remedies):
(i) The right to take possession of, send notices regarding, and
collect directly the Collateral, with or without judicial process, and to
exercise all rights and remedies available to Lender with respect to the
Collateral under the Uniform Commercial Code in effect in the
jurisdiction(s) in which such Collateral is located;
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(ii) The right to (by its own means or with judicial assistance) enter
any of Borrower's premises and take possession of the Collateral, or render
it unusable, or dispose of the Collateral on such premises in compliance
with subsection c. below, without any liability for rent, storage,
utilities, or other sums, and Borrower shall not resist or interfere with
such action;
(iii) The right to require Borrower at Borrower's expense to assemble
all or any part of the Collateral and make it available to Lender at any
place designated by Lender; and
(iv) The right to relinquish or abandon any Collateral or any security
interest therein.
c. Xxxxxxxx agrees that a notice received by it at least five (5) days
before the time of any intended public sale, or the time after which any private
sale or other disposition of the Collateral is to be made, shall be deemed to be
reasonable notice of such sale or other disposition. If permitted by applicable
law, any perishable Collateral which threatens to speedily decline in value or
which is sold on a recognized market may be sold immediately by Lender without
prior notice to Borrower. At any sale or disposition of Collateral, Lender may
(to the extent permitted by applicable law) purchase all or any part of the
Collateral, free from any right of redemption by Borrower, which right is hereby
waived and released. Borrower covenants and agrees not to interfere with or
impose any obstacle to Xxxxxx's exercise of its rights and remedies with respect
to the Collateral following an Event of Default.
d. Upon the occurrence and continuation of an Event of Default, Lender
shall have the right to proceed against all or any portion of the Collateral to
satisfy the liabilities and obligations of Borrower to Lender in any order. All
rights and remedies granted Xxxxxx xxxxxxxxx and under any agreement referred to
herein, or otherwise available at law or in equity, shall be deemed concurrent
and cumulative, and not alternative remedies, and Lender may proceed with any
number of remedies at the same time until the Principal Sum, all interest,
costs, expenses and other charges due hereunder, and all other existing and
future liabilities and obligations of Borrower to Lender, are satisfied in full.
The exercise of any one right or remedy shall not be deemed a waiver or release
of any other right or remedy, and Lender, upon the occurrence and continuation
of an Event of Default, may proceed against Borrower, and/or the Collateral, at
any time, under any agreement, with any available remedy and in any order.
8. Use of Funds. Borrower covenants and agrees that the loan of the
Principal Sum or any portion thereof shall be used for working capital or other
commercial purposes of Borrower.
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9. Representations. Borrower hereby warrants and represents to Lender that:
a. This Secured Term Note constitutes a valid and binding obligation
of Borrower, enforceable in accordance with its terms, subject to
applicable bankruptcy, insolvency, reorganization, moratorium and other
similar laws generally affecting credit rights or remedies.
b. The execution, delivery or performance of or under this Secured
Term Note will not violate or conflict with any law, rule, regulation,
order, judgment, indenture, instrument, or agreement by which Borrower or
Borrower's properties or assets are bound or affect, or conflict or be
inconsistent with, or result in any breach of, any of the terms, covenants
or provisions of, or constitute a default under, or result in the creation
or imposition of any lien, security interest, charge or other encumbrance
upon any of the properties or assets of Borrower, pursuant to the terms of
any indenture, mortgage, deed of trust, material agreement or other
material instrument to which Borrower is a party or by which Borrower's
properties or assets may be bound or to which they may be subject other
than a lien, security interest, charge or other encumbrance in favor of
Lender.
c. There are no actions, suits or other proceedings pending,
including, without limitation, any condemnation proceeding, or to the
knowledge of Borrower threatened, against or adversely affecting Borrower's
properties or assets or the validity or enforceability of this Secured Term
Note. Borrower is not in default with respect to any order, writ,
injunction, decree or demand of any court or governmental authority. There
is no litigation or proceeding, including, without limitation, any
condemnation proceeding, pending or, to the knowledge of Borrower,
threatened against or affecting Borrower's properties or assets, or any
circumstances existing which would in any manner materially adversely
affect Borrower's properties or assets, or the validity or ability of
Borrower to perform any obligations under this Secured Term Note.
d. The financial statements of Xxxxxxxx previously delivered to Lender
fairly present in all material respects the financial condition of Borrower
as of the date thereof. No material adverse change in the financial
condition of Borrower has occurred since the date of such financial
statements of Xxxxxxxx delivered to Lender.
e. Borrower is the sole owner of all right, title and interest in and
to all of the Collateral free and clear of any lien, security interest,
charge or encumbrance, other than such liens, security interests, charges
or other encumbrances in favor of Lender under any of the Loan Agreements
that are senior to the lien granted hereby with respect to overlapping
Collateral and any Permitted Liens (as defined in the Loan Agreement) and
Borrower has the full right, power, and authority to convey, transfer, and
grant the security title and security interest in the Collateral granted
herein to the Lender.
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10. Affirmative Covenants.
Borrower covenants and agrees that until this Secured Term Note shall be
repaid in full:
a. Borrower will furnish to Lender (i) an accounts receivable aging
schedule on a form reasonably acceptable to Lender within fifteen (15) days
after the end of each calendar month; (ii) payable aging schedules within
fifteen (15) days after the end of each calendar month; (iii) internally
prepared monthly financial statements for Borrower, certified by the chief
financial officer of Borrower, within forty-five (45) days of the end of
each calendar month, accompanied by management analysis and actual versus
budget variance reports; (iv) if and to the extent prepared by Xxxxxxxx,
annual projected, profit and loss statements, balance sheets, and cash flow
reports (prepared on a monthly basis) for the succeeding fiscal year within
thirty (30) days before the end of each of Borrower's fiscal years; (v)
internally prepared annual financial statements for Borrower within sixty
(60) days after the end of each of Borrower's fiscal years; (vi) annual
audited financial statements for Borrower prepared by Xxxxx & Xxxxx, LLP,
or a firm of independent public accountants reasonably satisfactory to
Lender, within one hundred thirty-five (135) days after the end of each of
Borrower's fiscal years; (vii) promptly upon receipt thereof, copies of any
reports submitted to Borrower by independent accountants in connection with
any interim audit of the books of Borrower and copies of each management
control letter provided to Borrower by independent accountants; (viii) as
soon as available, copies of all financial statements and notices provided
by Borrower to all of its stockholders; and (ix) such additional
information, reports or statements as Xxxxxx may from time to time
reasonably request. Annual financial statements shall set forth in
comparative form figures for the corresponding periods in the prior fiscal
year. All financial statements shall include a balance sheet and statement
of earnings and shall be prepared in accordance with GAAP. All internally
prepared financial statements shall be preliminary, unaudited and subject
to year end adjustments.
b. During each calendar month beginning January 1, 1998 and continuing
while this Secured Term Note remains outstanding, Xxxxxxxx's EBITDA (as
defined immediately below) shall equal or exceed 1.2 times the aggregate of
Borrower's interest and principal obligations under this Secured Term Note
with respect to such month, determined in accordance with GAAP and
calculated based on the financial statements delivered to Lender in
accordance with Section 10(a) above. For purposes of this Secured Term
Note, "EBITDA" shall mean, for any period, the net income or net loss of
Borrower, determined in accordance with GAAP, plus the sum of (i) interest
expense, arising under this Secured Term Note and any subordinated debt of
Borrower that is subordinated in writing to Borrower's obligations under
this Secured Term Note, but specifically excluding interest arising under
the Loan Agreements, which shall be deducted in calculating net income or
net loss, (ii) income tax expense, (iii) depreciation expense, and (iv)
amortization expense of Borrower, determined in each case in accordance
with GAAP.
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c. Borrower will make all payments of principal, interest, fees, and
all other payments required hereunder, under the Loan Agreements, and under
any other Loan Documents, as and when due. In furtherance of the foregoing,
Borrower covenants and agrees that Xxxxxx shall have the right to apply all
collections in Xxxxxx's Concentration Account pursuant to Section 2.3 of
any of the Loan Agreements to satisfy any accrued, unpaid obligations
arising under this Secured Term Note, but only after Borrower's Obligations
that have arisen under the applicable Loan Agreements have been satisfied
in full.
d. Borrower will do or cause to be done all things necessary (i) to
obtain and keep in full force and effect all material corporate existence,
rights, licenses, privileges, and franchises of Borrower necessary to the
ownership of its property or the conduct of its business, and comply in all
material respects with all applicable present and future laws, ordinances,
rules, regulations, orders and decrees of any Governmental Authority having
or claiming jurisdiction over Borrower; and (ii) to maintain and protect
the properties used or useful in the conduct of the operations of Borrower,
in a prudent manner, including without limitation the maintenance at all
times of such insurance upon its insurable property and operations as
required by law.
e. Borrower shall make sure that the making of the loan evidenced by
this Secured Term Note shall not be subject to any penalty or special tax
(other than withholding taxes), shall not be prohibited by any governmental
order or regulation applicable to Borrower, and shall not violate any rule
or regulation of any Governmental Authority, and necessary consents,
approvals and authorizations of any Governmental Authority to or of any
such disbursement or advance shall have been obtained.
f. Within forty-five (45) days following the date of this Secured Term
Note Borrower shall use its reasonable best efforts to obtain from each
Medical Group subject to the Loan Agreements (i) UCC-1 Financing Statements
evidencing the transfer by each such Medical Group to Borrower of all
right, title and interest in the Accounts being financed under the Loan
Agreements (with each being referred to herein as the "Transfer"), and (ii)
to the extent not previously obtained, a signed acknowledgment of such
Transfer for the direct benefit of Lender, that confirms both the Transfer
and Xxxxxx's first priority security interest in the Accounts pursuant to
the applicable Loan Agreement.
g. Borrower shall cause Xxxxxx Xxxxxx, M.D., Delphi Ventures III,
L.P., Delphi BioInvestments III, L.P., Oak Investment Partners VI, L.P.,
and Oak VI Affiliates Fund, L.P. and any other potential investors to
purchase collectively at least $1,300,000 of Borrower's Preferred Stock at
any time during the period commencing on the date hereof and ending on
September 30, 1997, which proceeds will be used by Borrower to fund the
acquisition of medical practices.
h. Borrower will timely file all tax reports and pay and discharge all
taxes, assessments and governmental charges or levies imposed upon
Borrower, or its income or profits or upon its properties or any part
thereof, before the same shall be in default and prior to the date
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on which penalties attach thereto, as well as all lawful claims for labor,
material, supplies or otherwise which, if unpaid, would become a lien or
charge upon the properties or any part thereof of Borrower; provided,
however, that Borrower shall not be required to pay and discharge or cause
to be paid and discharged any such tax, assessment, charge, levy or claim
so long as the validity or amount thereof shall be contested in good faith
and by appropriate proceedings by Xxxxxxxx, and Borrower shall have set
aside on their books adequate reserves therefor; and provided further, that
such deferment of payment is permissible only so long as Borrower's title
to, and its right to use, the Collateral is not materially adversely
affected thereby and Xxxxxx's lien and priority on the Collateral are not
materially adversely affected, altered or impaired thereby.
i. Borrower will carry adequate public liability and professional
liability insurance with responsible companies reasonably satisfactory to
Lender in such amounts and against such risks as is customarily maintained
by similar businesses and by owners of similar property in the same general
area.
j. Subject to Section 9.20 of the Loan Agreements, Borrower will
furnish to Lender such information as Lender may, from time to time,
reasonably request with respect to the business or financial affairs of
Borrower, and permit upon reasonable notice and only during business hours,
any officer, employee or agent of Lender to visit and inspect any of the
properties, to examine the minute books, books of account and other
records, including management letters prepared by Xxxxxxxx's auditors, of
Borrower, and make copies thereof or extracts therefrom, and to discuss its
and their business affairs, finances and accounts with, and be advised as
to the same by, the accountants and officers of Borrower, all at such times
and as often as Lender may reasonably require provided that Lender shall
give Borrower reasonable opportunity to participate in any discussions with
Xxxxxxxx's accountants.
k. Except as permitted by Section 11(c), Borrower will maintain, keep
and preserve all of its properties in good repair, working order and
condition and from time to time make all needful and proper repairs,
renewals, replacements, betterment and improvements thereto, so that the
business carried on in connection therewith may be properly and
advantageously conducted at all times.
l. Borrower promptly will notify Lender upon the occurrence of: (i)
any Event of Default; (ii) any event which, with the giving of notice or
lapse of time, or both, would constitute an Event of Default; (iii) any
event, development or circumstance whereby the financial statements
previously furnished to Lender fail in any material respect to present
fairly, in accordance with GAAP, the financial condition and operational
results of Borrower as of the date of such statements; (iv) any judicial,
administrative or arbitration proceeding pending against Borrower, and any
judicial or administrative proceeding known by Borrower to be threatened
against it which could reasonably be expected to materially adversely
affect its condition (financial or otherwise) or operations or to expose
Borrower to uninsured liability of $250,000.00 or more; (v) any default
claimed by any other creditor for Borrowed Money of
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Borrower other than Lender in respect of Borrowed Money in a principal
amount in excess of $250,000.00; and (vi) any other development in the
business or affairs of Borrower which would be materially adverse; in each
case describing the nature thereof and (in the case of notification under
clauses (i) and (ii)) the action Borrower proposes to take with respect
thereto.
m. Borrower will (i) comply with the funding requirements of ERISA
with respect to the Plans for its employees, or will promptly satisfy any
accumulated funding deficiency that arises under Section 302 of ERISA; (ii)
furnish Lender, promptly after filing the same, with copies of all reports
or other statements filed with the United States Department of Labor, the
Pension Benefit Guaranty Corporation, or the Internal Revenue Service with
respect to all Plans, or which Borrower, or any member of a Controlled
Group, may receive from such Governmental Authority with respect to any
such Plans, and (iii) promptly advise Lender of the occurrence of any
Reportable Event or Prohibited Transaction with respect to any such Plan
and the action which Borrower proposes to take with respect thereto.
Borrower will make all contributions when due with respect to any
multi-employer pension plan in which it participates and will promptly
advise Lender: (a) upon its receipt of notice of the assertion against
Borrower of a claim for withdrawal liability; (b) upon the occurrence of
any event which would trigger the assertion of a claim for withdrawal
liability against Borrower; and (c) upon the occurrence of any event that
would place Borrower in a Controlled Group as a result of which any member
(including Borrower) thereof may be subject to a claim for withdrawal
liability, whether liquidated or contingent.
n. Borrower shall provide to Lender evidence satisfactory to Lender as
to the due recording of termination statements, releases of collateral, and
Forms UCC-3, and shall cause to be recorded financing statements on Form
UCC-1, duly executed by Borrower and Lender, in all places necessary to
release all existing security interests and other liens in the Collateral
(other than as permitted hereby) and to perfect and protect Xxxxxx's lien
and security interest in the Collateral, as Lender may request.
o. Borrower shall keep current and accurate books of records and
accounts in which full and correct entries will be made of its business
transactions, and will reflect in its financial statements adequate
accruals and appropriations to reserves, all in accordance with GAAP.
p. Borrower shall continue to collect its Accounts in the ordinary
course of business.
q. Borrower shall give ten (10) days' prior written notice to Lender
of any change in the location of any of its places of business, of the
places where its records concerning its Accounts are kept, of the places
where the Collateral is kept, or of the establishment of any new, or the
discontinuance of any existing, places of business.
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r. Borrower shall continue in the business currently conducted by it.
Borrower shall not engage, directly or indirectly, in any line of business
substantially different from the business conducted by it immediately prior
to the date hereof, or engage in business or lines of business which are
not reasonably related thereto.
s. Borrower shall give prompt notice to Lender of any litigation,
arbitration, or other proceeding before any Governmental Authority against
or affecting Borrower if the amount claimed is more than $250,000.00.
t. Borrower will, on reasonable demand of Lender, but subject to
limitations under applicable law (including, without limitation, Federal
and state law regarding confidentiality of patient records and other
information) and contractual or other confidentiality obligations, make
available to Lender copies of shipping and delivery receipts evidencing the
shipment of goods that gave rise to an Account, medical records, insurance
verification forms, assignment of benefits, in-take forms or other proof of
the satisfactory performance of services that gave rise to an Account, a
copy of the claim or invoice for each Account and copies of any written
contract or order from which the Account arose. Borrower shall promptly
notify Lender if an Account becomes evidenced or secured by an instrument
or chattel paper and upon request of Lender, will promptly deliver any such
instrument or chattel paper to Lender.
u. Borrower shall cause each Medical Group under the applicable Loan
Agreements to maintain all provider numbers and licenses necessary to
ensure the validity of Qualified Accounts, and take any steps required to
comply with any such new or additional requirements that may be imposed on
providers of medical products and services. If required, all
Medicaid/Medicare cost reports will be properly filed by the applicable
Medical Group.
v. Together with the financial statements delivered pursuant to
Section 10(a) Borrower shall deliver to Lender a certificate of its chief
financial officer, in form and substance reasonably satisfactory to Lender
setting forth:
(i) The information required in order to establish whether
Borrower is in compliance with the requirements of Section 10(b) as of
the end of the period covered by the financial statements then being
furnished; and
(ii) That the signer has reviewed the relevant terms of this
Secured Term Note, and has made (or caused to be made under his
supervision) a review of the transactions and conditions of Borrower
from the beginning of the accounting period covered by the statements
being delivered and that such review has not disclosed the existence
during such period of any condition or event which constitutes an
Event of Default or which is then, or with the passage of time or
giving of notice or both, could become an Event of Default, and if any
such condition or event existed during such period or now exists,
specifying the nature and period of existence thereof and what action
Borrower has taken or proposes to take with respect thereto.
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w. Absent death or disability, Xxxxxx Xxxxxx, M.D. and Xxxxx Xxxxx
shall serve without interruption as President and Chief Executive Officer,
and Chief Financial Officer, respectively, of Borrower.
11. Negative Covenants.
Borrower covenants and agrees that until this Secured Term Note shall be
repaid in full:
a. Borrower will not create, incur, assume or suffer to exist any
liability for Borrowed Money without Xxxxxx's prior written consent, which
consent shall not be unreasonably withheld. Notwithstanding the foregoing,
Borrower shall be permitted to incur the following: (i) indebtedness to
Lender; (ii) indebtedness of Borrower secured by mortgages, encumbrances or
liens expressly permitted or not prohibited by Section 7.3 of any Loan
Agreement; (iii) accounts payable to trade creditors and current operating
expenses which are not aged more than one hundred twenty (120) days from
the billing date or more than sixty (60) days from the due date, in each
case incurred in the ordinary course of business and paid within such time
period, unless the same are being contested in good faith and by
appropriate and lawful proceedings, and Borrower shall have set aside such
reserves, if any, with respect thereto as are required by GAAP and deemed
adequate by Borrower and its independent accountants; (iv) borrowing
incurred in the ordinary course of its business and not exceeding
$100,000.00 in the aggregate outstanding at any one time; (v) borrowed
money not to exceed $250,000.00 in the aggregate outstanding at any one
time incurred by Borrower or any subsidiary after the date hereof;
provided, that (x) such Indebtedness for Borrowed Money is incurred on
account of purchase money or finance lease arrangements of assets acquired
by Borrower or a Subsidiary after the Closing Date, (y) each such purchase
money or finance lease arrangement does not exceed the cost of the assets
acquired or leased; and (z) any Lien securing such purchase money or
finance lease arrangement does not extend to the Collateral or any assets
or property other than that purchased or leased; (vi) capital leases of
equipment not to exceed $100,000.00 of aggregate lease obligations in any
calendar year; (vii) indebtedness for Borrowed Money as set forth on
Schedule 7.1 of any Loan Agreement. If an Event of Default shall have
occurred and be continuing. Borrower will not make voluntary prepayments on
any existing or future indebtedness for Borrowed Money to any Person (other
than Lender, to the extent permitted by this Agreement or any subsequent
agreement between Borrower and Lender).
b. Borrower will not create, incur, assume or suffer to exist any
mortgage, pledge, lien or other encumbrance of any kind (including the
charge upon property purchased under a conditional sale or other title
retention agreement) upon, or any security interest in, any of its
Collateral, whether now owned or hereafter acquired, except for Permitted
Liens.
c. Borrower will not without Xxxxxx's prior written consent, which
shall not be unreasonably withheld, enter into any merger or consolidation
with or acquire all or substantially all of the assets of any Person, and
will not sell, lease, or otherwise dispose of any
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of the assets except in the ordinary course of its business except for (i)
sales of assets not to exceed $50,000.00 in any calendar year; (ii) asset
purchases in the ordinary course of Xxxxxxxx's business of
acquiring/managing medical practices (including without limitation
purchases of assets from medical practitioners for use in rendering
services under management service agreements with such practitioners); and
(iii) sales or dispositions of used or obsolete equipment no longer useful
in the business.
d. Borrower will not, directly or indirectly, enter into any
arrangement whereby Borrower sells or transfers all or any part of its
assets and thereupon and within one year thereafter rents or leases the
assets so sold or transferred without the prior written notice to, and the
express written consent of, Lender, which consent may be withheld in
Xxxxxx's sole discretion.
e. Borrower will not declare or pay any dividends or other
distributions with respect to, purchase, redeem or otherwise acquire for
value any of its outstanding stock now or hereafter outstanding, or return
any capital of its stockholders, nor shall Borrower pay or become obligated
to pay management fees or fees of a similar nature to any Person; provided,
however, that so long as Lender has not notified Borrower of the existence
of an Event Default hereunder, Borrower may make any such dividends or
other distributions or purchase, redeem or otherwise acquire for value such
outstanding stock, return any such capital, or pay any such management fees
or fees of a similar nature subject any other terms and conditions of this
Agreement.
f. Borrower will not make loans or advances to any Person, other than
(i) trade credit extended in the ordinary course of its business; (ii)
advances for business travel and similar temporary advances in the ordinary
course of business to officers, stockholders, directors, and employees; and
(iii) advances to physician groups under management services agreements.
g. Borrower will not assume, guarantee, endorse, contingently agree to
purchase or otherwise become liable upon the obligation of any Person,
except (i) by the endorsement of negotiable instruments for deposit or
collection or similar transactions in the ordinary course of business; and
(ii) for Borrowed Money permitted to be incurred under Section 7.1 of any
Loan Agreement.
h. Borrower will not, without Xxxxxx's prior written consent, which
shall not be unreasonably withheld, form any subsidiary.
i. Borrower will not permit with respect to any Plan covered by Title
IV of ERISA any Prohibited Transaction or any Reportable Event.
j. Borrower will not enter into any transaction, including without
limitation the purchase, sale, or exchange of property, or the loaning or
giving of funds to any Affiliate or subsidiary, except in the ordinary
course of business and pursuant to the reasonable requirements of
Borrower's business and upon terms no less favorable to Borrower than it
would obtain in a
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comparable arm's length transaction with any Person not an Affiliate or
subsidiary, and so long as the transaction is not otherwise prohibited
hereunder. For purposes of the foregoing, Lender consents to the
transactions described on Schedule 7.12 of any Loan Agreement.
k. Borrower will not become or be a party to any contract or agreement
which would cause Borrower to breach this Secured Term Note.
l. Borrower will not carry or purchase any "margin security" within
the meaning of Regulations U, G, T or X of the Board of Governors of the
Federal Reserve System.
m. Borrower will not furnish to Lender any certificate or other
document that contains any untrue statement of a material fact or that
omits to state a material fact necessary to make it not misleading in light
of the circumstances under which it was furnished.
n. Borrower will not at any time allow its net worth, as computed in
accordance with GAAP, to fall below $5,000,000.00 (excluding the effect of
accelerated writeoffs of intangibles).
12. Events of Default. The following events are each an "Event of Default"
under this Secured Term Note:
a. Borrower fails to make any payment of principal when due or fails
to make any payment of interest, fees or other amounts owed to or for the
account of Lender hereunder and such interest, fees or other amounts remain
unpaid for five (5) days after written notice from Lender that such payment
is due; or
b. Borrower has made any representations or warranties in this Secured
Term Note, the Loan Documents, any financial statement delivered to Lender
or otherwise in connection herewith or therewith which contains any untrue
statement of a material fact or omits a material fact necessary to make the
statements contained herein or therein not misleading, which default shall
have continued unremedied for a period of ten (10) days after written
notice from Lender; or
c. Borrower shall fail to perform or observe, or cause to be performed
or observed, any other term, obligation, covenant, condition or agreement
contained in this Secured Term Note, and any such failure shall have
continued for a period of twenty (20) days after written notice thereof
from Lender; or
d. Borrower shall (i) apply for, or consent in writing to, the
appointment of a receiver, trustee or liquidator; or (ii) file a voluntary
petition seeking relief under the Bankruptcy Code, or be unable, or admit
in writing Borrower's inability, to pay their debts as they become due; or
(iii) make a general assignment for the benefit of creditors; or (iv) file
a petition or an answer seeking reorganization or an arrangement or a
readjustment of debt with creditors, apply
15
for, take advantage, permit or suffer to exist the commencement of any
insolvency, bankruptcy, suspension of payments, reorganization, debt
arrangement, liquidation, dissolution or similar event, under the law of
the United States or of any state in which Borrower is a resident; or (v)
file an answer admitting the material allegations of a petition filed
against Borrower in any such bankruptcy, reorganization or insolvency case
or proceeding or (vi) take any action authorizing, or in furtherance of,
any of the foregoing; or
e. (i) an involuntary case is commenced against Borrower and the
petition is not controverted within ten (10) days or is not dismissed
within sixty (60) days after the commencement of the case or (ii) an order,
judgment or decree shall be entered by any court of competent jurisdiction
on the application of a creditor adjudicating Borrower bankrupt or
insolvent, or appointing a receiver, trustee or liquidation of Borrower or
of all or substantially all of the assets of Borrower and such order,
judgment or decree shall continue unstayed and in effect for a period sixty
(60) days or shall not be discharged within ten (10) days after the
expiration of any stay thereof;
f. Any obligation of Borrower for the payment of Borrowed Money in a
principal amount in excess of $250,000.00 is not paid when due or within
any applicable grace period, or such obligation becomes or is declared to
be due and payable prior to the expressed maturity thereof, or there shall
have occurred an event which, with the giving of notice or lapse of time,
or both, would cause any such obligation to become, or allow any such
obligation to be declared to be, due and payable;
g. One or more final judgments in excess of $250,000.00 against
Borrower or attachments against its property not fully and unconditionally
covered by insurance shall be rendered by a court of record and shall
remain unpaid, unstayed on appeal, undischarged, unbonded and undismissed
for a period of twenty (20) days;
h. An Event of Default occurs under any of the Loan Agreements or any
of the other Loan Documents;
i. Borrower ceases any material portion of its business operations as
presently conducted;
j. There shall occur a material adverse change in the financial
condition or business prospects of Borrower and its subsidiaries taken as a
whole, which default shall have continued unremedied for a period of ten
(10) days after written notice from Lender.
13. Lender's Rights.
a. Upon the occurrence of an Event of Default, Lender may, in addition to
the acceleration rights set forth in Section 6 herein, proceed, to the extent
permitted by law, to protect and enforce its rights either by suit in equity or
by action at law, or both, whether for the
16
specific performance of any covenant, condition or agreement contained in this
Secured Term Note or in aid of the exercise of any power granted in this Secured
Term Note, or proceed to enforce the payment of this Secured Term Note or to
enforce any other legal or equitable right of Lender. No right or remedy herein,
the other Loan Documents or in other agreement or instrument to the benefit of
Lender is intended to be exclusive of any other right or remedy, and each and
every such right or remedy shall be cumulative and shall be in addition to every
other right and remedy given hereunder or now or hereafter existing at law or in
equity or by statute or otherwise; provided, however that Lender shall not use
the Collateral hereunder or apply the proceeds thereof to any outstanding
obligation of the Borrower, except Xxxxxxxx's obligation to pay Lender the
outstanding Principal Sum, interest accrued thereon and fees associated
therewith. Without limiting the generality of the foregoing, if the outstanding
Principal Sum, or any of the other obligations of Borrower to Lender shall not
be paid when due, Lender shall not be required to resort to any particular
security, right or remedy or to proceed in any particular order of priority, and
Lender shall have the right at any time and from time to time, in any manner and
in any order, to enforce its security interests with respect to the Collateral,
liens, rights and remedies, or any of them, as it deems appropriate in the
circumstances, and apply the proceeds of any collateral to such obligations of
Borrower as it determines in its sole discretion.
b. In the event that an Event of Default has occurred as provided herein
and Borrower has not paid the total outstanding principal, together with
interest accrued thereon upon demand by Xxxxxx, then Borrower shall pay to
Lender interest on such outstanding amounts at a rate per annum equal to the
Base Rate plus three percent (3%) from the date such outstanding amounts are due
until the date this Secured Term Note is paid in full. Xxxxxxxx promises to pay
all costs of collection, including reasonable attorneys' fees, if this Secured
Term Note is referred to an attorney for collection after the Event of Default.
14. No Defenses. Xxxxxxxx's obligations hereunder shall not be subject to
any set-off, counterclaim or defense to payment which Borrower now has.
15. No Waiver. No failure or delay on the part of Lender in exercising any
right, power or privilege under this Secured Term Note or the other Loan
Documents, nor any course of dealing between Borrower and Lender, shall operate
as a waiver thereof, nor shall a single or partial exercise thereof preclude any
other or further exercise or the exercise of any right, power or privilege.
16. Writing Required. No modification or waiver of any provisions of this
Secured Term Note or any other Loan Document, nor consent to any departure by
Xxxxxxxx, shall in any event be effective, irrespective of any course of
dealing between the parties, unless the same shall be in a writing executed by
Xxxxxx and then such waiver or consent shall be effective only in the specific
instance and for the purpose for which given. No notice to or demand on Borrower
in any case shall thereby entitle Borrower to any other or further notice or
demand in the same, similar or other circumstances.
17
17. Usury Limitation. Notwithstanding anything contained herein to the
contrary, Lender shall never be entitled to receive, collect or apply as
interest any amount in excess of the maximum rate of interest permitted to be
charged by applicable law; and in the event Lender receives, collects or applies
as interest any such excess, such amount which would be excessive interest shall
be applied to the reduction of the Principal Sum; and if the Principal Sum is
paid in full, any remaining excess shall be paid to Borrower. In determining
whether or not the interest paid or payable in any specific case exceeds the
highest lawful rate, Lender and Borrower shall to the maximum extent permitted
under applicable law (i) characterize any non-principal payment as an expense,
fee or premium rather than as interest; and (ii) "spread" the total amount of
interest throughout the entire term of the obligation so that the interest rate
is deemed to have been uniform throughout said entire term.
18. Notices. Any notice or demand given under this Secured Term Note shall
be given by delivering it, sending by telecopier (with a confirming copy by
regular mail), or by mailing it by certified or registered mail, postage
prepaid, return receipt requested, or sent by prepaid overnight courier service
addressed to Borrower at: Bone, Muscle & Joint, Inc., 0000 Xxxxx Xxxxxxx
Xxxxxxx, Xxxxx 000-X, Xxxx Xxxxx, Xxxxxxx 00000, Attention: Xxxxx X. Xxxxx,
Executive Vice President and Chief Financial Officer, Telephone: (000) 000-0000,
Telecopier: (000) 000-0000; with a copy to X'Xxxxxxxx Xxxxx & Karabell, LLP, 00
Xxxxxxxxxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Xxxxxxxx X. Xxxxx,
Esquire, Telephone: (000) 000-0000, Telecopier: (000) 000-0000. Any notice to be
given to Lender under this Secured Term Note shall be given by delivering it,
sending by telecopier (with a confirming copy by regular mail), or mailing it by
certified or registered mail, return receipt requested, or sent by prepaid
overnight courier service, addressed to Lender at: 0 Xxxxxxxxx Xxxxxx, Xxxxx
000, Xxxxx Xxxxx, XX 00000 Attention: Xxxxx X. Xxxxx, President, Telecopier:
(000) 000-0000, or at such other place as Lender may specify in writing to
Borrower. Each party may designate a change of address by notice to the other
given in accordance herewith at least fifteen (15) days before such change of
address is to become effective. A notice given under this Secured Term Note
shall be deemed received five (5) days after it is sent by regular mail, or upon
receipt when it is delivered or sent by telecopier according to the requirements
of this paragraph, or if sent by courier on the next Business Day following
deposit with the courier.
19. Section Headings. The headings of the several paragraphs of this
Secured Term Note are inserted solely for convenience of reference and are not a
part of and are not intended to govern, limit or aid in the construction of any
term or provision.
20. Severability. Any provision contained in this Secured Term Note which
is prohibited or unenforceable in any respect in any jurisdiction shall, as to
such jurisdiction be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof and any
such prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.
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21. Survival of Terms. All covenants, agreements, representations and
warranties made in this Secured Term Note or in any financial statements
delivered pursuant hereto shall survive Borrower's execution and delivery of
this Secured Term Note to Lender and shall continue in full force and effect so
long as this Secured Term Note or any other obligation hereunder shall be
outstanding and unpaid or any other obligation of Borrower hereunder shall
remain unperformed.
22. Choice of Law; Consent to Jurisdiction. THIS SECURED TERM NOTE SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF
MARYLAND, WITHOUT REGARD TO ANY OTHERWISE APPLICABLE PRINCIPLES OF CONFLICTS OF
LAWS. IF ANY ACTION ARISING OUT OF THIS SECURED TERM NOTE IS COMMENCED BY LENDER
IN THE STATE OF MARYLAND OR FEDERAL COURT LOCATED IN THE STATE OF MARYLAND,
BORROWER AND LENDER HEREBY CONSENT TO THE JURISDICTION OF ANY SUCH COURT IN ANY
SUCH ACTION AND TO THE LAYING OF VENUE IN THE STATE OF MARYLAND. ANY PROCESS IN
ANY SUCH ACTION SHALL BE DULY SERVED IF MAILED BY REGISTERED MAIL, POSTAGE
PREPAID, TO THE BORROWER AT ITS ADDRESS XXXXXXXXX XX XXXXXXX 00 XXXXXX.
23. Waiver of Trial by Jury. EACH OF BORROWER AND XXXXXX XXXXXX (A)
COVENANTS AND AGREES NOT TO ELECT A TRIAL BY JURY OF ANY ISSUES TRIABLE OF RIGHT
BY A JURY, AND (B) WAIVES ANY RIGHT TO TRIAL BY JURY FULLY TO THE EXTENT THAT
ANY SUCH RIGHT SHALL NOW HEREAFTER EXIST. THIS WAIVER OF RIGHT TO TRIAL BY JURY
IS SEPARATELY GIVEN, KNOWINGLY AND VOLUNTARILY, BY EACH OF BORROWER AND LENDER,
AND THIS WAIVER IS INTENDED TO ENCOMPASS INDIVIDUALLY EACH INSTANCE AND EACH
ISSUE AS TO WHICH THE RIGHT TO A JURY TRIAL WOULD OTHERWISE ACCRUE. EACH PARTY
IS HEREBY AUTHORIZED AND REQUESTED TO SUBMIT THIS AGREEMENT TO ANY COURT HAVING
JURISDICTION OVER THE SUBJECT MATTER AND THE PARTIES HERETO, SO AS TO SERVE AS
CONCLUSIVE EVIDENCE OF THE FOREGOING WAIVER OF THE RIGHT TO JURY TRIAL. FURTHER,
EACH OF BORROWER AND XXXXXX XXXXXX CERTIFIES THAT NO REPRESENTATIVE OR AGENT OF
THE OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY
WILL NOT SEEK TO ENFORCE THIS WAIVER OF RIGHT TO JURY TRIAL PROVISION.
24. Confession of Judgment. UPON AN EVENT OF DEFAULT, XXXXXXXX AUTHORIZES
ANY ATTORNEY ADMITTED TO PRACTICE BEFORE ANY COURT OF RECORD IN THE UNITED
STATES OR THE CLERK OF SUCH COURT TO APPEAR ON BEHALF OF BORROWER IN ANY COURT
IN ONE OR
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MORE PROCEEDINGS, OR BEFORE ANY CLERK THEREOF OR PROTHONOTARY OR OTHER COURT
OFFICIAL, AND TO CONFESS JUDGMENT AGAINST BORROWER IN FAVOR OF XXXXXX IN THE
FULL AMOUNT DUE ON THIS SECURED TERM NOTE (INCLUDING PRINCIPAL, ACCRUED INTEREST
AND ANY AND ALL CHARGES, FEES AND COSTS) PLUS ATTORNEYS' FEES PLUS COURT COSTS,
ALL WITHOUT PRIOR NOTICE OR OPPORTUNITY OF BORROWER FOR PRIOR HEARING. XXXXXXXX
AGREES AND CONSENTS THAT VENUE AND JURISDICTION SHALL BE PROPER IN THE CIRCUIT
COURT OF ANY COUNTY OF THE STATE OF MARYLAND OR OF BALTIMORE CITY, MARYLAND, OR
IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF MARYLAND. BORROWER
WAIVES THE BENEFIT OF ANY AND EVERY STATUTE, ORDINANCE, OR RULE OF COURT WHICH
MAY BE LAWFULLY WAIVED CONFERRING UPON BORROWER ANY RIGHT OR PRIVILEGE OF
EXEMPTION, HOMESTEAD RIGHTS, 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 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 LENDER SHALL DEEM NECESSARY, CONVENIENT, OR PROPER.
25. Successors and Assigns. This Secured Term Note and the loan documents
executed in connection herewith shall be binding upon and inure to the benefit
of Xxxxxxxx and Xxxxxx and their respective successors and assigns.
Notwithstanding the foregoing, Borrower may not assign any of its rights or
delegate any of its obligations hereunder without the prior written consent of
Lender, which may be withheld in its sole discretion. Lender may sell, assign,
transfer, or participate any or all of its rights or obligations hereunder
without notice to or consent of Xxxxxxxx.
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IN WITNESS WHEREOF, the undersigned have executed this Secured Term Note as
of the day and year first above written.
ATTEST: BONE, MUSCLE & JOINT, INC.
(Seal) a Delaware corporation
______________________________ By: _______________________________
Name:
Title:
THE FOREGOING IS ACKNOWLEDGED AND AGREED ON THIS 30TH DAY OF JUNE, 1997:
HCFP FUNDING, INC.
By:__________________________
Name:
Title:
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SCHEDULES
Loan Agreement dated March 28, 1997 (SCOI)
Loan Agreement dated May 6, 1997 (STSC)
Loan Agreement dated June 4, 1997 (Tri-City)
Loan Agreement dated June 6, 1997 (LOS)
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