Contract
THIS
INSTRUMENT AND THE RIGHTS AND OBLIGATIONS EVIDENCED HEREBY ARE SUBORDINATE IN
THE MANNER AND TO THE EXTENT SET FORTH IN THAT CERTAIN SUBORDINATION AGREEMENT
(AS THE SAME MAY BE AMENDED OR OTHERWISE MODIFIED FROM TIME TO TIME PURSUANT TO
THE TERMS THEREOF, THE “SUBORDINATION AGREEMENT”) DATED AS OF FEBRUARY 28, 2005,
BY AND AMONG XXX
XXXXXXXX, XXXX XXXXXXXX, XXXXXX XXXXXXXX, XXXXXX XXXXXXXX A/C/F XXX XXXXXXXX,
XXXXXXX XXXXXXX, XXXXXX XXXXXXX AND XXXXXXX XXXX (COLLECTIVELY, “SUBORDINATED
CREDITOR”),
ALLION
HEALTHCARE, INC., MAIL ORDER MEDS OF TEXAS, INC.,
MOMS
PHARMACY, INC. (A NEW YORK CORPORATION),
MOMS
PHARMACY, INC. (A CALIFORNIA CORPORATION),
MOMS
PHARMACY, LLC,
MEDICINE
MADE EASY,
NORTH
AMERICAN HOME HEALTH SUPPLY, INC.,
AND
SPECIALTY PHARMACIES, INC. (COLLECTIVELY, “COMPANY”), AND GE HFS HOLDINGS, INC.
(THE “SENIOR LENDER”),
TO THE INDEBTEDNESS (INCLUDING INTEREST) OWED BY BORROWER TO THE SENIOR LENDER
PURSUANT TO THE SENIOR DEBT DOCUMENTS (AS DEFINED IN THE SUBORDINATION
AGREEMENT), INCLUDING WITHOUT LIMITATION, PURSUANT TO THAT CERTAIN LOAN AND
SECURITY AGREEMENT DATED APRIL 21, 1999, BY AND AMONG
BORROWER AND SENIOR LENDER, AS SUCH LOAN AND SECURITY AGREEMENT MAY BE AMENDED,
RESTATED, SUPPLEMENTED OR OTHERWISE MODIFIED FROM TIME TO TIME, AND TO
INDEBTEDNESS TO SENIOR LENDER REFINANCING THE INDEBTEDNESS UNDER THAT AGREEMENT;
AND EACH HOLDER OF THIS INSTRUMENT, BY ITS ACCEPTANCE HEREOF, IRREVOCABLY AGREES
TO BE BOUND BY THE PROVISIONS OF THE SUBORDINATION
AGREEMENT.
PROMISSORY
NOTE
$_____________February
28, 2005
FOR VALUE
RECEIVED, the undersigned MOMS PHARMACY, INC., a California corporation (the
“Borrower”),
promises to pay to _________________ (the “Holder”), the
principal sum of ____________________________________________ DOLLARS
($____________), plus accrued interest from the date hereof, at a rate equal to
the prime rate of interest charged from time to time by the Borrower’s principal
lender plus two percent (2%) per annum (the “Interest
Rate”), on
the unpaid principal amount outstanding hereunder from time to time. Payments of
principal and interest shall be made in lawful money of the United States of
America, to the address of record of the Holder as set forth herein, or at such
place as the Holder may designate in writing. This Promissory Note (this
“Note”) is
issued in connection with that certain Stock Purchase Agreement (as modified and
amended from time to time, the “Purchase
Agreement”), of
even date herewith, by and among the Borrower, the Holder and others. The
principal amount of this Note is subject to increase or decrease in accordance
with the Purchase Agreement.
Subject
to Section 5(f) hereof, principal and interest on this Note shall be due and
payable as follows:
|
(i) |
The
entire unpaid balance of the principal and accrued interest thereon shall
be due and payable on February 28, 2006 (the “Maturity
Date”);
and |
|
(ii) |
In
the event that prior to the Maturity Date, Allion Healthcare, Inc.
(“Allion”) engages in any underwritten public offering of any shares of
Allion’s capital stock resulting in aggregate proceeds to Borrower in
excess of $25 million. |
1. Default. In the
case of the occurrence of one or more of the following events (each, a
“Default”): (i)
the Borrower fails to make when due any payment of principal or interest
hereunder and such default is not cured within five (5) business days; (ii) the
Borrower becomes insolvent or generally is unable to pay, or admits in writing
its inability to pay, any of its debts as they become due; (iii) the Borrower
applies for a trustee, receiver or other custodian for it or substantially all
of its property; (iv) a trustee, receiver or other custodian is appointed for
the Borrower or for substantial all of its property; or (v) any bankruptcy,
reorganization, debt arrangement, or other case or proceeding is commenced in
respect of the Borrower; then, upon the occurrence of any such event, all unpaid
principal, accrued interest and other amounts owing hereunder shall
automatically be immediately due, payable and collectible by Holder pursuant to
applicable law.
2. Default
Interest. Upon
the occurrence and the continuance of a Default, any amount of principal not
paid before the due date shall accrue interest at a rate per annum equal to the
Interest Rate plus four percent (4%) per annum.
3. Waiver.
Borrower hereby waives, to the fullest extent permitted by applicable law,
notice, demands, notice of nonpayment, presentment, protest and notice of
dishonor.
4. Enforcement. Upon
the occurrence of a Default, the Holder may employ an attorney to enforce the
Holder’s rights and remedies and the Borrower hereby agrees to reimburse the
Holder for its reasonable attorneys’ fees, plus all other reasonable expenses
incurred by the Holder in exercising any of the Holder’s rights and remedies
upon default. The rights and remedies of the Holder as provided in this Note
shall be cumulative and may be pursued singly, successively or together. The
failure to exercise any such right or remedy shall not be a waiver or release of
such rights or remedies or the right to exercise any of them at another
time.
5. Miscellaneous. The
following general provisions apply:
(a) This
Note, and the obligations and rights of the parties hereunder, shall be binding
upon and inure to the benefit of the Borrower, the Holder and their respective
heirs, personal representatives, successors and assigns.
(b) Changes
in or amendments or additions to this Note may be made, or compliance with any
term, covenant, agreement, condition or provision set forth herein may be
omitted or waived (either generally or in a particular instance and either
retroactively or prospectively), upon written consent of the Borrower and the
Holder.
(c) The
undersigned and any holder hereof waive trial by jury in any action or
proceeding to which the undersigned and any such holder may be parties arising
out of or in connection with this Note.
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(d) All
notices, requests, consents and demands shall be made in writing and shall be
mailed postage prepaid, or delivered by reliable overnight courier or by hand,
to the Borrower or to the Holder at their respective addresses set forth in the
Purchase Agreement..
(e) This Note
shall be construed and enforced in accordance with, and the rights of the
parties shall be governed by, the laws of the State of California. The Borrower
hereby agrees that any action, proceeding or claim against it arising out of, or
relating in any way to, this Agreement may be brought and enforced in the courts
of the State of California, County of San Diego or of the United States of
America located in the State of California, County of San Diego, and irrevocably
submits to such jurisdiction for such purpose. The Borrower hereby irrevocably
waives any objection to such jurisdiction or inconvenient forum.
(f) Notwithstanding
anything contained herein to the contrary, Borrower has the right to set off
amounts due to the Holder under this Note against any indemnification obligation
that the Holder has to Borrower pursuant to Article 9 of the Purchase
Agreement.
(g) No course
of dealing and no delay on the part of Holder in exercising any right, power or
remedy shall operate as a waiver or otherwise prejudice such person’s rights,
powers or remedies.
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IN
WITNESS WHEREOF, the Borrower has caused this Note to be executed in its
corporate name by a duly authorized officer, by order of its Board of Directors
as of the day and year first above written.
MOMS
PHARMACY, INC.
By:
Name: Xxxxxxx X. Xxxxx
Title:
President and Chief Executive Officer
[signature
page to Promissory Note]
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