EXHIBIT 4.8
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1993 OR THE
SECURITIES LAWS OF ANY STATE, AND MAY NOT BE TRANSFERRED OR SOLD UNLESS
REGISTERED THEREUNDER OR EXEMPTIONS FROM SUCH REGISTRATION ARE AVAILABLE.
CONVERTIBLE NOTE
$269,833.34 September 29, 1994
FOR VALUE RECEIVED, the undersigned, PHP HEALTHCARE CORPORATION, a Delaware
corporation ("Maker"), hereby unconditionally promises to pay XXXXXXX X. XXXXXX
("Payee"), on or before September 29, 1999 ("Maturity Date") the principal sum
of TWO HUNDRED SIXTY NINE THOUSAND EIGHT HUNDRED THIRTY THREE DOLLARS AND THIRTY
FOUR CENTS ($269,833.34), or such other amount as at the time may be outstanding
hereunder TOGETHER WITH all accrued but unpaid interest thereon computed at the
rate per annum set forth below and all unpaid expenses and fees connected
herewith.
Prior to the Maturity Date, the outstanding principal amount hereunder will
bear interest, computed daily until paid, at a fixed rate per annum of 7.0%.
Interest will be calculated, accrued and imposed on the basis of a 365-day year
for the actual number of days elapsed.
Prior to the Maturity Date, accrued interest hereunder (but not principal)
will be due and payable annually in arrears on the 30th day of April, commencing
on April 30, 1995. Payee is authorized to note or endorse the date and amount of
each payment and prepayment of principal and/or interest hereunder on a schedule
annexed to and constituting a part hereof. Such notations or endorsements, if
made, will constitute PRIMA FACIE evidence of the information endorsed on such
schedule, but the failure of Payee to make any such notation or endorsement will
not limit or otherwise affect the obligations of Maker hereunder.
Payee shall have the option at any time subsequent to one (1) year after
the date hereof or to the occurrence of a Change in Control of Maker as
defined in Section 14.4(b) of the Amended And Restated PHP Healthcare
Corporation 1986 Stock Option Plan, whichever shall first occur, and prior to
the Maturity Date to convert the principal amount outstanding hereunder into
fully paid and nonassessable shares of Maker's common stock, $.01 par value
("Common Stock"), at a conversion rate (the "Conversion Rate") of $9.00 of
principal for one share of Common Stock, subject to adjustment as set forth
below. Payee shall give written notice that it elects to convert to Maker at
its principal office (or such other office as Maker may designate by notice in
writing) at any time during Maker's usual business hours. All shares of Common
Stock to be delivered by Maker upon receipt of such notice shall be shares
held by Maker as treasury stock and not newly issued shares. No fractional
shares shall be issued upon conversion, and no payment or adjustment shall be
made on account of any cash dividends on the Common Stock on or prior to the
date of conversion. If any fractional share of Common Stock would otherwise be
delivered upon conversion, Maker shall pay to Payee an amount in cash equal to
the current market price of such fractional share.
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If Maker shall, on or after the date hereof, issue any shares of Common
Stock by way of stock dividend, stock split or other reclassification, the
Conversion Rate shall be adjusted by multiplying the conversion rate in effect
immediately prior to each such issuance by the quotient obtained by dividing
the total number of shares of Common Stock outstanding immediately after the
issuance of such Common Stock by the total number of shares of Common Stock
outstanding immediately prior to such issuance. In the event of a reverse
split or recombination, the Conversion Rate will be similarly adjusted to
preserve equitably the intended conversion relationship.
If there shall occur any reclassification or change of the outstanding
Common Stock or any reorganization of Maker (or any other entity the stock or
securities of which are at the time receivable upon conversion) on or after the
date hereof, or if Maker (or any such other entity) shall merge with or into
another entity or convey all or substantially all of its assets to another
entity, then and in each such event, Payee, upon conversion at any time after
the consummation of such reclassification, change, reorganization, merger or
conveyance, shall be entitled to receive, in lieu of the stock or other
securities and property receivable upon conversion prior to such consummation,
the stock or other securities or property to which Payee would have been
entitled upon such consummation if Xxxxx had converted immediately prior
thereto, all subject to further adjustment after such consummation as provided
herein.
Payments will be applied by Xxxxx in the following order: (a) first to the
payment of any fees and charges due hereunder, (b) then to any obligation of
Maker for the payment of expenses due hereunder, (c) then to the payment of
interest due and owing hereunder, (d) then to the principal indebtedness due
hereunder, and (e) then to any other indebtedness of Maker to Payee.
All payments of principal, interest (including any default interest),
fees and any other amounts due hereunder must be made by Maker or Payee in
immediately available funds on or before twelve o'clock (12:00) noon on the
due date therefor at the principal office of Payee at 0000 Xxxxxxx Xxxx Xxxx,
Xxxxx 0000, Xxx Xxxxxxx, Xxxxxxxxxx 00000, or at such other place as Payee may
at any time or from time to time designate in writing to Maker.
Whenever any payment to be made hereunder is due on a day that is not a
business day (I.E., any day other than a Saturday, Sunday or legal public
holiday), such payment may be made on the next succeeding business day, and
such extension of time will be included in the computation of interest
hereunder. Any funds received by Payee after 12:00 noon on any day will be
deemed to be received on the next succeeding day.
Upon the occurrence and during the existence of a default hereunder
(including, without limitation, failure or refusal by Maker to deliver payment
of the outstanding balance plus interest on the Maturity Date), Maker hereby
agrees (to the maximum extent not prohibited by applicable law) to pay to Payee
interest on any indebtedness outstanding hereunder at the rate of three percent
(3.0%) per annum in excess of the rate then otherwise applicable to such
indebtedness.
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If, after a default hereunder, counsel is employed to collect the
indebtedness evidenced hereby or to protect the security hereof, Maker agrees to
pay Payee (to the maximum extent not prohibited by applicable law) reasonable
attorneys' fees and all other costs and expenses incurred in connection with
such collection.
Maker hereby waives diligence, presentment, protest, demand for payment,
notice of protest and non-payment, notice of dishonor, and any and all other
notices or demands in connection with the delivery, acceptance, performance,
default, acceleration or enforcement of this Note. No delay on the part of
Payee in exercising any power or right hereunder will operate as a waiver
thereof nor will any single or partial exercise of any power or right
hereunder preclude other or further exercise thereof or the exercise of any
other power or right. This Note is binding on Maker and its successors and
assigns. If any term or provision of this Note is held invalid, illegal or
unenforceable, the validity of all other terms and provisions hereof will in
no way be affected thereby.
Nothing contained in this Note will require Maker to pay interest at a
rate prohibited by applicable law. If interest payable to Payee on any date
would be in a prohibited amount, such interest will be automatically reduced
to an amount that is not prohibited and interest for subsequent periods, to
the extent not prohibited, will be increased by the amount of such reduction
until payment of the full amount of each such reduction. Any prohibited amount
previously paid will be credited towards reduction of the outstanding
principal balance.
MAKER AND PAYEE EACH HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES
ANY RIGHTS IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED
HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS NOTE OR ANY COURSE
OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR
ACTIONS OF MAKER OR PAYEE. MAKER AND PAYEE EACH ACKNOWLEDGE AND AGREE THAT IT
HAS RECEIVED FULL AND SUFFICIENT CONSIDERATION FOR THIS PROVISION, THAT IT HAS
BEEN ADVISED BY LEGAL COUNSEL IN CONNECTION HEREWITH, AND THAT THIS PROVISION IS
A MATERIAL INDUCEMENT FOR IT ENTERING INTO THE PLAN AND AGREEMENT OF MERGER (THE
"MERGER AGREEMENT"), DATED AS OF SEPTEMBER 29, 1994, BY AND AMONG PARAGON
AMBULATORY SURGERY, INC., MAKER, XXXXXXX X. XXXXXX, XXXXXXX X. XXXXXXXXX AND
XXXXXXXX X. XXXXX.
ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION
WITH, THIS NOTE, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS
(WHETHER VERBAL OR WRITTEN) OR ACTIONS OF MAKER OR PAYEE WILL BE BROUGHT AND
MAINTAINED EXCLUSIVELY IN THE COURTS OF THE STATE OF VIRGINIA OR IN THE UNITED
STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF VIRGINIA. MAKER AND PAYEE EACH
HEREBY EXPRESSLY AND IRREVOCABLY SUBMITS TO THE JURISDICTION OF THE COURTS OF
THE STATE OF VIRGINIA AND OF THE UNITED STATES DISTRICT COURT FOR THE EASTERN
DISTRICT OF VIRGINIA FOR THE PURPOSE OF ANY SUCH LITIGATION AS SET FORTH ABOVE
AND IRREVOCABLY AGREES TO BE BOUND BY ANY JUDGMENT RENDERED THEREBY IN
CONNECTION WITH SUCH LITIGATION. MAKER AND PAYEE EACH FURTHER IRREVOCABLY
CONSENT TO THE SERVICE OF PROCESS BY REGISTERED MAIL, POSTAGE PREPAID, OR BY
PERSONAL SERVICE WITHIN OR WITHOUT THE STATE OF VIRGINIA.
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MAKER AND PAYEE EACH HEREBY EXPRESSLY AND IRREVOCABLY WAIVES, TO THE FULLEST
EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY HAVE OR HEREAFTER MAY HAVE
TO THE LAYING OF VENUE OF ANY SUCH LITIGATION BROUGHT IN ANY SUCH COURT REFERRED
TO ABOVE AND ANY CLAIM THAT ANY SUCH LITIGATION HAS BEEN BROUGHT IN AN
INCONVENIENT FORUM. TO THE EXTENT THAT MAKER OR PAYEE HAS OR HEREAFTER MAY
ACQUIRE ANY IMMUNITY FROM JURISDICTION OF ANY COURT OR FROM ANY LEGAL PROCESS
(WHETHER THROUGH SERVICE OR NOTICE, ATTACHMENT PRIOR TO JUDGMENT, ATTACHMENT IN
AID OF EXECUTION OR OTHERWISE) WITH RESPECT TO ITSELF OR ITS PROPERTY, EACH
HEREBY IRREVOCABLY WAIVES SUCH IMMUNITY IN RESPECT OF ITS SECURED OBLIGATIONS
UNDER THIS NOTE.
This Note is the "Convertible PHP Note" referred to in, and arises out of,
the Merger Agreement. Upon and at anytime after the occurrence of any breach or
default hereunder, at the election of Xxxxx, Xxxxx may declare the entire unpaid
balance of all indebtedness hereunder (including, principal, interest and fees)
to be immediately due and payable.
Payee may not assign at any time all or a part of its rights hereunder
without the consent of Maker except to other parties to the Merger Agreement.
This Note shall be governed by and construed under the laws of the State of
Virginia, without giving effect to conflicts of laws principles.
IN WITNESS WHEREOF, Maker has caused this Note to be executed in
its name and as of the day and year first written above.
WITNESS/ATTEST: PHP HEALTHCARE CORPORATION,
Maker
/s/ Xxx Xxxxxxxxx, III By: /s/ Xxxx X. Xxxxx
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Xxx Xxxxxxxxx, XXX, Secretary Name: Xxxx X. Xxxxx
Title: Sr. Exec. V. Pres.
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