PROMISSORY NOTE
Exhibit
99.3
$__________________
Date:
September
21, 2005
Maturity
Date: September
21, 2007
FOR
VALUE
RECEIVED, AHPC Holdings Inc., a Maryland corporation ("Borrower") hereby
promises to pay to the order of ________________________ ("Lender"), at Lender's
principal office or residence at ___________________________________or at such
other place or places as Lender may from time to time designate in writing,
the
principal sum of _________________ Dollars ($__________) or so much thereof
as
may from time to time be advanced hereunder, with interest on the principal
balance outstanding from time to time, all as hereinafter set
forth.
1. DISBURSEMENTS;
INTEREST RATE; QUARTERLY PAYMENTS
(a) Disbursements.
Funds
have been disbursed to Borrower in the amount listed above. At the time of
disbursement, Borrower warrants that it is not in breach or default of any
obligations or responsibilities delineated in the Offering Document describing
the offering of this Note.
(b) Interest
Rate.
From
the date of disbursement of funds, the principal balance from time to time
unpaid shall bear interest at the fixed rate equal to seven percent (7%) per
annum.
(c) Default
Rate.
After
the earlier of (i) the Maturity Date (as hereafter defined), whether by
acceleration or otherwise, or (ii) the occurrence of any other Event of Default
(as hereafter defined), the total unpaid indebtedness hereunder shall bear
interest at the rate of twelve percent (12%) per annum (the "Default
Rate").
(d) Computation
of Interest.
Interest shall be computed on the basis of a 360 day year and charged for the
actual number of days elapsed.
(e) Principal
and Interest Payments.
Borrower shall make successive quarterly installment payments of interest only
commencing on December 21, 2005, the date three months from the date of issuance
of this promissory note (the “Note”) and thereafter on the same date every three
months through and including the Maturity Date, but only to the extent that
such
payments are not prohibited by the subordination agreement (the “Subordination
Agreement”) between Borrower, Lender and Greenfield Commercial Credit, LLC
(“Greenfield”). The principal and all accrued interest on each disbursement
shall be due on the Maturity Date. Nothwithstanding the foregoing, in the event
of the sale of any of the Borrower’s property which is subject to the
Subordinated Security Agreement (as defined below), Borrower agrees to pay
Lender the proceeds from the sale of such property as payment of any outstanding
accrued principal and interest hereunder, but only to the extent that such
distribution of proceeds is not prohibited by the Subordination
Agreement.
2. MATURITY
DATE; PAYMENT.
The
entire principal balance of this Note then outstanding, plus any accrued and
unpaid interest thereon shall be due and payable on September 21, 2007, or
such
earlier date on which said amount shall become due and payable on account of
acceleration by Xxxxxx (the "Maturity Date"). Xxxxxxxx promises to pay to Lender
interest in the amounts and at the times provided in Section 1 above, but only
to the extent that such payments are not prohibited by the Subordination
Agreement. On the Maturity Date, Borrower shall pay to Lender the entire
principal balance of this Note then outstanding, together with all accrued
and
unpaid interest, all penalties and late payment fees hereunder, provided that
such payment shall not contravene the Subordination Agreement.
3. PAYMENT
PRIOR TO MATURITY DATE.
This
Note may be prepaid, without premium or penalty, in whole or in part at any
time. In the event that Borrower closes on any equity financing in excess of
$6,000,000 net proceeds to the Borrower (a “Qualifying Financing”) prior to the
Maturity Date, this Note shall be paid in full by Borrower (along with all
interest due through the date on which the principal is paid to Lender) within
ten (10) business days of such Qualifying Financing.
4. MAKING
OF PAYMENTS.
Each
payment (including prepayments) of principal, interest, or any other amounts
of
any kind with respect to this Note shall be made in immediately available funds
by Borrower to Lender at Lender's office or residence at
_________________________________ (or at any other place which Lender may
hereafter designate for such purpose in a notice duly given to Borrower
hereunder), no later than 1:30 p.m., Chicago time, on the date due therefor.
Funds received after that hour shall be deemed to have been received by Xxxxxx
on the next following business day. Whenever any payment to be made under this
Note shall be stated to be due on a date which is not a business day, the due
date therefor shall be extended to the next succeeding business day. ALL
PAYMENTS DUE HEREUNDER SHALL BE MADE WITHOUT DEMAND, OFFSET OR
DIMINUTION.
5. DEFAULT;
REMEDIES.
(a) Events
of Default.
Any one
of the following occurrences shall constitute an "Event
of
Default" under this Note:
(i) failure
by Borrower to make any payment of principal, interest or any other charge,
fee
or payment due hereunder within five business days of the date when the same
becomes due and payable;
(ii) failure
by Borrower to perform any obligation under, or the occurrence of any other
default with respect to any provision of this Note (other than as specifically
described in any other provision of this Section 5), provided that notice of
such failure has been communicated to Borrower for at least ten (10) business
days in accordance with Section 9(c) of this Note; or
(iii) the
occurrence of any Event of Default with respect to any provision of any other
Loan Document (defined below) (other than as specifically described in any
other
clause of this Section 5), which is not cured within the time period provided
therefor, if any. With respect to any event or occurrence which constitutes
an
Event of Default hereunder solely by reason of its constituting a default or
an
Event of Default under another document or instrument, to the extent (if any)
that such other document or instrument provides a grace or cure period with
respect to such default, the same grace or cure period, and only such period,
shall apply with respect to such default under this Note.
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(b) Remedies.
During
the continuance of any Event of Default under Section 9.1(a), (b), (c) or (d)
of
the Subordinated Security Agreement (defined below), the entire outstanding
principal balance and any unpaid interest, and all other charges, fees or
payments due hereunder, shall become due and payable in full, without notice,
demand or any other action by Xxxxxx. During the continuance of any other Event
of Default, the entire outstanding principal balance, any unpaid interest and
all other Secured Obligations (as defined in the Subordinated Security
Agreement) at the option of Lender and without demand or notice of any kind
to
Borrower or any other Person (including, but not limited to, any guarantor
now
or hereafter existing), shall immediately become and be due and payable in
full.
In such event, Lender shall have and may exercise any and all rights and
remedies available at law or in equity except to the extent that such rights
and
remedies are prohibited by the Subordination Agreement or in any of the other
Loan Documents.
6. APPLICATION
OF PAYMENTS.
Lender
shall have the sole and exclusive right unilaterally (and without notice to
or
the consent of any person) to allocate any and all payments which may be
received by or tendered to Lender made by Borrower or any other Person
(including, without limitation any guarantor now or hereafter existing) at
any
time or from time to time and which relate in any way to the sums advanced
hereunder or any of the other Loan Documents, in any order of priority as
Lender, in its sole and exclusive discretion, determines to the payment of
the
Secured Obligations, except to the extent that such payments are deemed to
have
been made in violation of the Subordination Agreement.
7. WAIVER.
(a) Waiver.
Borrower, for itself and for its successors, transferees and assigns hereby
irrevocably (i) waives diligence, presentment and demand for payment, protest,
notice, notice of protest and nonpayment, dishonor and notice of dishonor and
all other demands or notices of any and every kind whatsoever; (ii) agrees
that
this Note and any or all payments coming due hereunder or under any of the
other
Loan Documents may be extended from time to time in the sole discretion of
Lender without in any way affecting or diminishing Borrower's liability
hereunder; and (iii) waives any rights, remedies or defenses arising at law
or
in equity relating to guarantees or suretyships.
(b) Extension
of Time.
No
extension of the time for any payment due hereunder or under any of the other
Loan Documents made by agreement with any person now or hereafter liable for
payment of this Note or any other Loan Document shall operate to release,
discharge, modify, change or affect the original liability under this Note
or
any other Loan Document, either in whole or in part.
(c) Delay.
No
delay in the exercise of any right or remedy hereunder by Xxxxxx shall be deemed
to be a waiver of such right or remedy, nor shall the exercise of any right
or
remedy hereunder by Xxxxxx be deemed an election of remedies or a waiver of
any
other right or remedy. Without limiting the generality of the foregoing, the
failure of Lender promptly after the occurrence of any default hereunder to
exercise its right to declare the indebtedness remaining unpaid hereunder to
be
immediately due and payable shall not constitute a waiver of such right while
such default continues nor a waiver of such right in connection with any future
default.
(d) No
Waiver.
No
waiver or limitation of any right or remedy hereunder by Xxxxxx shall be
effective unless (and any such waiver or limitation shall be effective only
to
the extent) expressly set forth in a writing, signed and delivered by Xxxxxx
to
Borrower. No notice to or demand on Borrower in any case shall entitle Borrower
to any other notice or demand in similar or other circumstances, nor shall
such
notice or demand constitute a waiver of any rights or remedy of Lender to any
other or further actions. In its sole discretion, Lender may, at any time and
from time to time, waive any one or more of the rights or remedies contained
herein, but such waiver in any instance or under any particular circumstance
shall not be deemed to be a waiver of such rights or remedies in any other
instance or under any other circumstance.
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8. SECURITY.
(a) This
Note
is secured, inter alia, by a Subordinated Security Agreement bearing even date
herewith (the "Subordinated Security Agreement"), made and granted by Xxxxxxxx,
as debtor, to Lender, as secured party. Reference is hereby made to the
Subordinated Security Agreement, the Subordination Agreement and the other
Loan
Documents (as defined in the Subordinated Security Agreement) for a statement
of
certain circumstances under which amounts due pursuant to this Note may be
accelerated and for a description of the property covered thereby and the nature
and extent of the security granted pursuant thereto.
(b) Lender
shall appoint a Collateral Agent as defined and described by the Subordinated
Security Agreement, who shall be the agent for enforcement of the rights and
remedies of each Lender under the Subordinated Security Agreement, this Note
and
the several other Notes of like kind.
9. MISCELLANEOUS.
(a) Captions.
Any
headings or captions in this Note are inserted for convenience of reference
only. Such headings or captions shall not be deemed to constitute a part hereof,
nor shall they be used to construe or interpret the provisions of this Note.
As
used herein, the term "Lender" refers to ______________________, its successors,
participants, co-lenders, assignees and any person claiming by, through or
under
said entity.
(b) Costs.
Borrower shall reimburse Lender for all Costs in accordance with the
Subordinated Security Agreement.
(c) Notices.
Any and
all notices given in connection with this Note shall be deemed adequately given
only if in writing and addressed to the party for whom such notices are intended
at the address and delivered in accordance with the provisions of the
Subordinated Security Agreement.
(d) Modification.
This
Note and the other Loan Documents may not be modified, altered or amended except
by an agreement in writing signed by Xxxxxxxx and Xxxxxx. Borrower expressly
agrees that for purposes of this Note and each and every other Loan Document:
(a) this Note and each and every other Loan Document shall be a "credit
agreement" under the Illinois Credit Agreements Act, 815 ILCS 160/1 et seq.
(the
"Act"); (b) the Act applies to this transaction including, but not limited
to,
the execution of this Note and each and every other Loan Document; and (c)
any
action on or in any way related to this Note and each and every other Loan
Document shall be governed by the Act.
(e) Time
of the Essence.
Time is
hereby declared to be of the essence of this Note and of every part
hereof.
(f) Severability.
Whenever possible, each provision of this Note shall be interpreted in such
manner as to be effective and valid under all applicable laws and regulations.
If, however, any provision (in whole or in part) of this Note or any other
Loan
Documents or the application thereof to any person or circumstance is held
invalid, unenforceable or prohibited by applicable law, then such provision
shall be deemed modified, restricted, or reformulated to the extent and in
the
manner necessary to render the same valid and enforceable, or shall be deemed
excised from this Note, as the case may require, and this Note shall be
construed and enforced to the maximum extent permitted by law, as if such
provision had been originally incorporated herein as so modified, restricted,
or
reformulated or as if such provision had not been originally incorporated
herein, as the case may be. The parties further agree to seek a lawful
substitute for any provision found to be unlawful. If such modification,
restriction or reformulation is not reasonably possible, the remainder of this
Note and the other Loan Documents and the application of such provision to
other
persons or circumstances will not be affected thereby and the provisions of
this
Note and the other Loan Documents shall be severable in any such
instance.
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10. Usury.
The
provisions of this Section shall govern and control over any irreconcilably
inconsistent provision contained in this Note or in any other document
evidencing or securing the indebtedness evidenced hereby. Lender shall never
be
entitled to receive, collect, or apply as interest hereon (for purposes of
this
Section the word "interest" shall be deemed to include any sums treated as
interest under applicable law governing matters of usury and unlawful interest),
any amount in excess of the Highest Lawful Rate (hereinafter defined) and,
in
the event Lender ever receives, collects, or applies as interest any such
excess, such amount which would be excessive interest shall be deemed a partial
prepayment of principal and shall be treated hereunder as such; and, if the
principal of this Note is paid in full, any remaining excess shall forthwith
be
paid to Borrower. In determining whether or not the interest paid or payable,
under any specific contingency, exceeds the Highest Lawful Rate, Borrower and
Lender shall, to the maximum extent permitted under applicable law, (a)
characterize any non-principal payment as an expense, fee or premium rather
than
as interest; (b) exclude voluntary prepayments and the effects thereof; and
(c)
spread the total amount of interest throughout the entire contemplated term
of
this Note, provided, that if this Note is paid and performed in full prior
to
the end of the full contemplated term hereof, and if the interest received
for
the actual period of existence hereof exceeds the Highest Lawful Rate, Lender
shall refund to Borrower the amount of such excess and, in such event, Lender
shall not be subject to any penalties provided by any laws for contracting
for,
charging or receiving interest in excess of the Highest Lawful Rate. "Highest
Lawful Rate" shall mean the maximum rate of interest which Lender is allowed
to
contract for, charge, take, reserve or receive under applicable law after taking
into account, to the extent required by applicable law, any and all relevant
payments or charges hereunder.
11. Representation
by Counsel.
Borrower hereby represents and warrants that it has consulted and conferred
with
competent legal counsel of its choice before executing this Note and all other
Loan Documents. Borrower further represents and warrants that it has read and
understood the terms of this Note and intends to be bound hereby. Borrower
and
its counsel have been afforded an opportunity to review, negotiate and modify
the terms of this Note. In accordance with the foregoing, the general rule
of
construction to the effect that any ambiguities in a contract are to be resolved
against the party drafting the contract shall not be employed in the
construction and interpretation of this Note.
12. Governing
Law.
This
Note has been delivered for acceptance by Lender in Illinois and, except as
provided herein and as required by mandatory provision of law, this Note, the
Subordinated Security Agreement and the other Loan Documents (other than the
Subordination Agreement) shall be governed by and construed in accordance with
the internal laws (as opposed to the conflicts of law provisions) of the state
of Illinois; provided that the creation, validity, perfection and enforcement
of
security interests granted pursuant to the Subordinated Security Agreement
and
the other Loan Documents shall be governed by the choice of law rules set forth
in the Uniform Commercial Code, as enacted in Illinois and, provided further,
Lender shall retain all rights arising under the Federal law.
13. Jurisdiction.
(a) Jurisdiction;
Venue.
To the
extent permitted by applicable law, Borrower hereby (i) irrevocably submits
to
the jurisdiction of any state or federal court located in Chicago, Illinois,
over any action or proceeding to enforce or defend any matter arising from
or
related to this note or the other Loan Documents; (ii) irrevocably waives the
defense of an inconvenient forum to the maintenance of any such action or
proceeding in any such court; (iii) agrees that a final judgment in any such
action or proceeding in any such court shall be conclusive and may be enforced
in any other jurisdiction by suit on the judgment or in any other manner
provided by law; and (iv) agrees not to institute any legal action or proceeding
against Lender or any of Xxxxxx's directors, officers, employees, agents or
property, concerning any matter arising out of or relating to this Note, the
Subordinated Security Agreement or the other Loan Documents in any court other
than one located in Chicago, Illinois. Borrower waives any objection that it
may
have to the location of the court in which Xxxxxx has commenced a proceeding
with respect to this Note, the Subordinated Security Agreement or any other
Loan
Document.
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(b) Service
of Process.
Nothing
in this section shall affect or impair Xxxxxx's right to serve legal process
in
any manner permitted by law or Xxxxxx's right to bring any action or proceeding
against Borrower or Borrower's property in the courts of any other
jurisdiction.
(c) Xxxxxx's
Right To Proceed.
Xxxxxxxx agrees that Xxxxxx shall have the right, at Xxxxxx's option, to proceed
against Borrower or its property in a court in any location, including any
action to enable Lender to realize on such property, or to enforce a judgment
or
other court order entered in favor of Xxxxxx.
(d) Permissive
Counterclaims.
Xxxxxxxx agrees that it shall not assert any permissive counterclaims in any
proceeding brought in accordance with this provision by Xxxxxx to realize on
such property, or to enforce a judgment or other court order in favor of Xxxxxx,
all such permissive counterclaims to be brought in a separate action by Borrower
against Lender.
14. Waiver
of Jury Trial.
XXXXXXXX AND XXXXXX (BY ACCEPTANCE HEREOF) HEREBY KNOWINGLY, VOLUNTARILY AND
INTENTIONALLY WAIVE THE RIGHT TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION
BASED HEREON, ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS NOTE OR ANY
OTHER
LOAN DOCUMENT OR ANY COURSE OF CONDUCT, COURSE OF DEALINGS, STATEMENTS (WHETHER
VERBAL OR WRITTEN) OR ACTIONS OF EITHER PARTY. BORROWER HEREBY EXPRESSLY
ACKNOWLEDGES THIS WAIVER IS A MATERIAL INDUCEMENT FOR LENDER TO ACCEPT THIS
NOTE
AND TO MAKE THE LOAN EVIDENCED HEREBY AND BY THE OTHER LOAN
DOCUMENTS.
15. Endorsement.
The
indebtedness hereby evidenced has been subordinated in favor of Greenfield
Commercial Credit, L.L.C. (“Lender”) by Subordination Agreement dated September
__, 2005, to which reference is hereby made, to secure all indebtedness now
or
hereafter owing by AHPC Holdings, Inc. and American Health Products Corporation,
to the Lender.
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IN
WITNESS WHEREOF, Xxxxxxxx has executed and delivered this Note pursuant to
proper authority duly granted, dated for reference purposes only as of September
21, 2005.
BORROWER:
_____________________________________
By:
Xxxx
Xxxxxx
Its:
Chief
Executive
Officer
LENDERS:
______________________________________
______________________________________
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