MAY 8, 2003 $300,000
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PURCHASE MONEY PROMISSORY NOTE
FOR VALUE RECEIVED, and as evidenced herein by this purchase money note
("Note"), American Hospital Resources, Inc., a Utah corporation (hereinafter
called "Borrower"), hereby promises to pay to Xxxxx Xxxxx and Xxxxxx Xxxx
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(collectively referred to as the "Holder") the sum of THREE HUNDRED THOUSAND
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DOLLARS (US $300,000) (the "Obligation") pursuant to the terms herein on or
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before August 8, 2003 (the "Maturity Date"). This Note is issued to the Holder
in consideration for the sale of their combined stock holdings in Rx Solutions,
Inc. a Mississippi-based pharmacy outsourcing corporation. The following terms
and conditions shall apply to this Note:
ARTICLE I
TERMS OF NOTE AND REPAYMENT
1.1 Repayment Schedule. The Borrower shall repay the Obligation to the
Holder in one installment payment ("Note Payment"). Such Note Payment shall be
made on an interest-free basis if the Note is paid on or before the Maturity
Date. The Borrower shall have the right, but not the obligation, to repay the
existing loan between Rx Solutions, Inc. and Peoples Bank of Franklin County
("Bank") and to apply and/or offset any such principal amounts paid by Borrower
to Bank against the balance owed herein on this Note. As of May 1, 2003 the
balance owed to the Bank was $306,113.16.
1.2 Payment Grace Period. The Borrower shall not have a grace period as to
the Maturity Date. Failure to pay in full on the Maturity Date will trigger the
imposition of the default interest rate of eighteen percent (18%) per annum,
which shall apply to the amounts owed but unpaid as of the Maturity Date.
1.3 Security Agreement. The Borrower and the Holder agree herein that
until the Note is paid in full to the Holder, Holder shall retain a security
interest in all of the business assets and stock of Rx Solutions, Inc., a
Mississippi corporation. Failure of the Borrower to pay the Holder the
principal due on the Maturity Date will give the Holder the sole and absolute
right, but not the obligation, to rescind the transfer of the stock of Rx
Solutions, Inc. and to have any and all stock and assets thereof returned
immediately to the Holder. XXXX further agrees that it will immediately execute
and/or sign for the benefit of Holder any additional security instruments
reasonably requested by Xxxxxx, including filings under the Uniform Commercial
Code ("UCC"). Any such UCC documents will be filed with the office of the
Mississippi Secretary of State to perfect such security interest of Xxxxxx.
ARTICLE II
EVENTS OF DEFAULT
The occurrence of any of the following shall be an event of default ("Event of
Default") and at the option of the Holder hereof, shall make all sums of
principal and any interest then remaining unpaid hereon and all other amounts
payable hereunder immediately due and payable, all without demand, presentment
or notice, or grace period, all of which hereby are expressly waived, except as
set forth below:
2.1 Failure to Pay Note. The Borrower fails to pay the balance of the Note
on the Maturity Date.
2.2 Breach of Covenant. The Borrower breaches any material covenant or
other term or condition of this Note in any material respect.
2.3 Breach of Representations and Warranties. Any material representation
or warranty of the Borrower made herein, or in any agreement, statement or
certificate given in writing pursuant hereto or in connection therewith shall be
false or misleading in any material respect.
2.4 Receiver or Trustee. The Borrower shall make an assignment for the
benefit of creditors, or apply for or consent to the appointment of a receiver
or trustee for it or for a substantial part of its property or business; or such
a receiver or trustee shall otherwise be appointed.
2.5 Bankruptcy. Bankruptcy, insolvency, reorganization or liquidation
proceedings or other proceedings or relief under any bankruptcy law or any law
for the relief of debtors shall be instituted by or against the Borrower and if
instituted against Borrower are not dismissed within sixty (60) days of
initiation.
ARTICLE III
MISCELLANEOUS
3.1 Failure or Indulgence Not Waiver. No failure or delay on the part of
Holder hereof in the exercise of any power, right or privilege hereunder shall
operate as a waiver thereof, nor shall any single or partial exercise of any
such power, right or privilege preclude other or further exercise thereof or of
any other right, power or privilege: All rights and remedies existing hereunder
are cumulative to, and not exclusive of, any rights or remedies otherwise
available.
3.2 Notices. Any notice herein required or permitted to be given shall be
in writing and may be personally served or sent by fax transmission (with copy
sent by regular, certified or registered mail or by overnight courier). For the
purposes hereof, the address and fax number of the Holder is 0000 Xxx Xxxxxxx
00, Xxxxx #0, Xxxxxxxxxxx, Xxxxxxxxxxx 00000, fax number (000) 000-0000. The
address and fax number of the Borrower is 0000 Xxx Xxxxx, Xxxxx Xxx, XX 00000,
fax number: (000) 000-0000. Both Xxxxxx and Borrower may change the address and
fax number for service by service of notice to the other as herein provided.
3.3 Amendment Provision. The term "Note" and all reference thereto, as used
throughout this instrument, shall mean this instrument as originally executed,
or if later amended or supplemented, then as so amended or supplemented.
3.4 Assignability. This Note shall be binding upon the Borrower and its
successors and assigns, and shall inure to the benefit of the Holder and its
successors and assigns, and may be assigned by the Holder subject to approval by
Xxxxxxxx, with such approval to unreasonably be withheld.
3.5 Cost of Collection. If default is made in the payment of this Note,
Borrower shall pay the Holder hereof reasonable costs of collection, including
reasonable attorneys' fees.
3.6 Governing Law. This Note shall be governed by and construed in
accordance with the laws of the State of Mississippi. Any action brought by
either party against the other concerning the transactions contemplated by this
Agreement shall be brought only in the state or federal courts located in the
state of Mississippi. Both parties agree to submit to the jurisdiction of such
courts. The prevailing party shall be entitled to recover from the other party
its reasonable attorney's fees and costs.
3.7 Maximum Payments. Nothing contained herein shall be deemed to establish
or require the payment of a rate of interest or other charges in excess of the
maximum permitted by applicable law. In the event that the rate of interest
required to be paid or other charges hereunder exceed the maximum permitted by
such law, any payments in excess of such maximum shall be credited against
amounts owed by the Borrower to the Holder and thus refunded to the Borrower.
3.8 Prepayment. This Note may be paid prior to the Maturity Date without
penalty or after the occurrence of an Event of Default with the consent of the
Holder, which shall not be unreasonably withheld.
IN WITNESS WHEREOF, Xxxxxxxx has caused this Note to be signed in its name by an
authorized officer this 8th day of May 2003.
American Hospital Resources, Inc.
a Utah corporation
By: /s/Xxxxxxxxxxx X. Xxxxxxx
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Xxxxxxxxxxx X. Xxxxxxx
Chief Executive Officer
