EXHIBIT 10.2
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED,
AND MAY NOT BE SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION
OR AN EXEMPTION THEREFROM UNDER SUCH ACT. FURTHERMORE, THIS NOTE MAY BE SOLD OR
OTHERWISE TRANSFERRED ONLY IN COMPLIANCE WITH THE CONDITIONS SPECIFIED HEREIN.
THIS INSTRUMENT AND THE RIGHTS AND OBLIGATIONS EVIDENCED HEREBY ARE SUBORDINATE
AND JUNIOR, IN THE MANNER AND TO THE EXTENT SET FORTH IN THE SUBORDINATION
AGREEMENT REFERRED TO HEREIN, TO ALL SENIOR INDEBTEDNESS REFERRED TO THEREIN,
AND EACH HOLDER OF THIS INSTRUMENT, BY ITS ACCEPTANCE HEREOF, SHALL BE BOUND BY
THE PROVISIONS OF THE SUBORDINATION AGREEMENT.
ORION HEALTHCORP, INC.
Subordinated Note Due December 15, 2007
$ April 19, 2006
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FOR VALUE RECEIVED, the undersigned, Orion HealthCorp, Inc., a Delaware
corporation formerly known as SurgiCare, Inc. (the "Company"), hereby promises
to pay' to the order of (" Seller") or registered permitted assigns
(such original payee or any such assignee from time to time, the "Noteholder"),
at the address set forth in Section 9.02 of the Agreement and Plan of Merger
referred to in Section 1 hereof, or at such other place as the Noteholder shall
from time to time have designated to the Company in writing, on December 15,
2007 (the "Maturity Date"). ($ ) and to pay interest thereon as
provided in Section 2 hereof.
1. THE NOTE. This Note (the "Note") is issued pursuant to Section 2.07(c) of
the Amended and Restated Agreement and Plan of Merger dated as of July 16,2004,
as amended by First Amendment to Agreement and Plan of Merger, dated as of
September 9, 2004, and Second Amendment to Agreement and Plan of Merger dated as
of December 15,2004, among the Company, DCPS/MBS Acquisition, Inc., Xxxxxx Xxxx
Physician Solutions, Ltd., Medical Billing Services, Inc. and the sellers party
thereto (as amended to date, the "Agreement and Plan of Merger"). This Note,
together with any notes issued in exchange for it, are collectively referred to
herein as the "Notes". Certain terms are used in this Note as specifically
defined herein.
2. INTEREST PROVISIONS. This Note shall bear interest (computed on the basis
of a 360-day year of twelve 30-day months) from the date hereof, on the
principal amount hereof from time to time unpaid, to and including the maturity
hereof and repayment of all sums due hereunder, at a rate per annum equal to 8%.
Interest shall be payable monthly on the last day of each month (each an
"Interest Payment Date"), commencing on April 30, 2006. Payments of principal
and interest hereunder shall be made by mailing a check in the amount thereof to
the Noteholder at its address appearing in the register maintained by the
Company pursuant to Section 5 hereof.
Notwithstanding any provisions of this Note, in no event shall the amount
of interest paid or agreed to be paid by the Company exceed an amount computed
at the highest rate of interest permissible under applicable law.
3. PAYMENT PROVISIONS. The Company covenants that so long as any of the Notes
are outstanding:
3.1 Payment at Maturity of the Note. Subject at all times to the
subordination Agreement, on the Maturity Date, or on any accelerated maturity of
the Notes permitted hereby and thereby, the Company will pay the entire
principal amount of this Note then outstanding, together with all accrued and
unpaid interest thereon.
3.2 Voluntary Prepayments. Subject at all times to the Subordination
Agreement, the Company may at any time and from time to time prepay all or part
of the principal I amount of the Note then outstanding without penalty or
premium.
3.3 Notice of Prepayments. Notice of each voluntary prepayment of the
Note pursuant to Section 3.2 hereof shall be given in accordance with Section
9.02 of the Agreement and Plan of Merger not fewer than three days before the
prepayment date, in each case by mailing to the Noteholder a notice of intention
to prepay specifying the date of prepayment, the aggregate amount of the Note to
be prepaid on such date, the principal amount of the Note to be prepaid on such
date held by the Noteholder, and the accrued interest applicable to such
prepayment.
3.4 Payment and Interest Cut-Of. Upon each prepayment of the Note, in
whole or in part, the Company will pay to the Noteholder the amount of the Note
to be prepaid, as set forth in the notice delivered pursuant to Section 3.3
hereof, together with unpaid interest in respect thereof accrued to and
including the prepayment date.
4. DEFAULTS.
4.1 If any one or more of the following events (each such event being an
"Event of Default") shall happen, that is to say:
4.1.1 The Company shall fail to make any payment in respect of
principal of or interest on the Note (other than interest not so paid as a
result of the applicability of restrictions contained in the Subordination
Agreement) as the same shall become due whether at maturity acceleration or
otherwise, and such failure shall continue uncured and unremedied for 15
business days after the Noteholder has provided notice thereof to the Company;
or
4.1.2 The Company shall:
(a) commence a voluntary case concerning itself under Title
11 of the United States Code entitled 'Bankruptcy" as now or hereafter in
effect, or any successor thereto (the 'Bankruptcy Code"V.
(b) have commenced against it an involuntary case under said
Bankruptcy Code and the petition is dismissed within 60 days of the
commencement of the case; or
(c) have appointed for it a custodian (as defined in the
Bankruptcy Code) to take charge of all or substantially all of its
property; or
(d) have filed against it any proceeding under any
reorganization, arrangement, adjustment of debt, relief of debtors,
dissolution, insolvency or liquidation or similar law of any jurisdiction
whether now or hereafter in effect, which such proceeding remains
undismissed for a period of 60 days or shall suffer the appointment of any
receiver or custodian or the like for it or all or substantially all of its
property which continues undischarged or unstayed for a period of 60 days;
or
(e) make a general assignment for the benefit of its
creditors; or then and in each and every such case, subject to the
provisions of the Subordination Agreement, the Noteholder may proceed to
protect and enforce its rights by suit in equity, action at law and/or
other appropriate proceeding, and may by notice to the Company declare
(each, an "Acceleration") all or any part of the unpaid principal amount of
the Note then outstanding to be forthwith due and payable, and thereupon
such unpaid principal amount or part thereof, together with interest
accrued thereon and all other sums, if any, payable under the Note, shall
become so due and payable without presentation, presentment, protest or
further demand or notice of any kind, all of which are hereby expressly
waived, and such holder or holders may proceed to enforce payment of such
amount or part thereof in such manner as it or they may elect; provided,
however, notwithstanding the foregoing, in the case of an Event of Default
under Section 4.1.2, Acceleration shall be deemed automatic without notice
to the Company.
4.2 Annulment of Defaults. An Event of Default shall not be deemed to be
in existence for any purpose of this Agreement if the Noteholder shall have
waived such event in writing or stated in writing that the same has been cured
to its reasonable satisfaction. No waiver or statement of satisfactory cure
pursuant to this Section 4.2 shell extend to or affect any subsequent or other
Event of Default not specifically identified in: such waiver or statement of
satisfactory cure or impair any of the rights of any holder of the Notes upon
the occurrence thereof.
5. RESTRICTIONS ON TRANSFER OF NOTE; REGISTER. The Noteholder may not transfer
or assign this Note in full or in part, without obtaining the Company's prior
written consent. The Company shall keep at its principal office a register in
which shall be entered the names and addresses of the registered holders of the
Notes and particulars of the respective Notes held by them and of all transfers
of the Notes.
6. SUBORDINATION OF NOTE. This Note and the rights and obligations evidenced
hereby are subordinate and junior, in the manner and to the extent set forth in
the Subordination Agreement, dated as of December 15,2004, among the original
Noteholder, the Company, Healthcare Business Credit Corporation, and other
parties named therein (as from time to time in effect, the "Specified
Subordination Agreement"), and any other subordination agreement in favor of any
senior lender of the Company, the terms of which subordination agreement are not
more restrictive with respect to payment of amounts due under this Note than the
terms set forth in the Specified Subordination Agreement, (collectively with the
Specified Subordination Agreement, the "Subordination Agreement"), in each case
to all Senior Debt as defined therein.
7. MISCELLANEOUS.
7.1 Notices. Any notice or other communication to the Company or the
Noteholder in connection with this Note shall be deemed to be delivered and
received by such addressee if delivered or made in the manner stipulated in the
notice provisions of Section 9.02 of the Agreement and Plan of Merger (a) in the
case of the Company, to the addresses specified therein or to such other address
as the Company shall have specified to the Noteholder in writing, and (b) in the
case of the Noteholder to the address of the Noteholder contained in the
register referred to in Section 5 hereof.
7.2 Waiver of Jury Trial. TO THE EXTENT NOT PROHIBITED BY APPLICABLE LAW
WHICH CANNOT BE WAIVED, EACH OF THE COMPANY (BY ITS EXECUTION HEREOF) AND THE
NOTEHOLDER (BY ITS ACCEPTANCE OF THIS NOTE) WAIVES AND COVENANTS THAT IT WILL
NOT ASSERT (WHETHER AS PLAINTIFF, DEFENDANT OR OTHERWISE) ANY RIGHT TO TRIAL BY
JURY 11 9 ANY FORUM IN RESPECT OF ANY ISSUE OR ACTION ARISING OUT OF OR BASED
UPON OR RELATING TO THIS NOTE OR IN ANY WAY CONNECTED WITH OR RELATED OR
INCIDENTAL TO THE TRANSACTIONS CONTEMPLATED HEREBY, IN EACH CASE WHETHER NOW
EXISTING OR HEREAFTER ARISING.
7.3 Governing Law. This Note shall be governed by and construed in
accordance with the domestic substantive laws of the State of New York without
giving effect to any choice or conflict of law provision or rule that would
cause the application of the domestic substantive laws of any other
jurisdiction.
IN WITNESS WHEREOF, the undersigned has caused this Note to be executed by a
duly authorized officer as of the date first written above.
Signed: /s/ Xxxxxxxx X. Xxxxx
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Name: Xxxxxxxx X. Xxxxx
Chief Executive Officer
Orion HealthCorp, Inc.
