EXHIBIT 10.60
THIS NOTE AND THE SECURITIES REPRESENTED HEREBY HAVE BEEN ISSUED WITHOUT
REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR UNDER ANY STATE
SECURITIES LAWS, AND MAY NOT BE SOLD, TRANSFERRED OR PLEDGED IN THE ABSENCE OF
AN EFFECTIVE REGISTRATION STATEMENT UNDER APPLICABLE FEDERAL AND STATE
SECURITIES LAWS OR AN OPINION OF COUNSEL SATISFACTORY TO THE BORROWER THAT THE
TRANSFER IS EXEMPT FROM REGISTRATION UNDER APPLICABLE FEDERAL AND STATE
SECURITIES LAWS.
THIS NOTE AND THE OBLIGATIONS OF THE BORROWER (AS DEFINED BELOW) ARISING
HEREUNDER ARE SUBORDINATED IN THE MANNER AND TO THE EXTENT SET FORTH IN THAT
CERTAIN DEBT SUBORDINATION AGREEMENT, DATED THE DATE HEREOF, AMONG BORROWER,
HOLDER (AS DEFINED BELOW) AND STANDARD FEDERAL BANK NATIONAL ASSOCIATION, AND
EACH SUBSEQUENT HOLDER OF THIS NOTE, BY ITS ACCEPTANCE HEREOF, SHALL BE BOUND BY
THE PROVISIONS OF SAID DEBT SUBORDINATION AGREEMENT.
PROMISSORY NOTE
COMVEST VENTURE PARTNERS, L.P.
$2,000,000 New York, New York
March 15, 2002
1. General. FOR VALUE RECEIVED, COMVEST VENTURE PARTNERS,
L.P., a Delaware limited partnership (the "BORROWER"), promises on the date
hereof (the "ISSUANCE DATE") to pay to the order of BANC OF AMERICA COMMERCIAL
FINANCE CORPORATION, the holder hereof, or its order (the "HOLDER"), on March
15, 2007 (the "MATURITY DATE"), the aggregate principal amount of Two Million
Dollars ($2,000,000) or such lesser amount as shall then equal the outstanding
amount hereof. The Borrower also promises to pay interest on the unpaid
principal amount hereof (the "OUTSTANDING PRINCIPAL AMOUNT"), as provided in
this Note. This Note is entered into pursuant to the terms of a Contract for the
Assignment of Note and Other Loan Documents, dated as of February 22, 2002,
between the Borrower and the Holder of this Note (the "CONTRACT FOR
ASSIGNMENT").
2. Payments. All payments of principal and interest in respect
of this Note shall be made in lawful money of the United States of America in
same day funds at the principal office of the Holder to which notices are to be
given in accordance with Section 13. Whenever any payment on this Note shall be
stated to be due on a day which is not a Business Day, such payment shall be
made on the next succeeding Business Day and such extension of time shall be
included in the computation of the payment of interest on this Note.
3. Interest. Borrower shall pay interest at a rate of six
percent (6%) per annum (the "INTEREST Rate"). Interest shall be computed on the
basis of a 360-day year of twelve 30-day months for the actual number of days
elapsed and shall accrue, beginning upon the date hereof, on the unpaid
principal balance of this Note and will continue to accrue until the Note is
paid in full. Interest only payments shall be due and payable beginning on April
15, 2002 and shall be payable on the first day of each subsequent month until
and including March 15, 2003. Beginning on April 15, 2003, interest payments
together with a principal payment of Twenty-Two thousand Five Hundred Dollars
($22,500) shall be due and payable monthly on the first day of each month (each
such date a "PAYMENT DATE") until and including the Payment Date immediately
preceding the Maturity Date. On the Maturity Date, a balloon payment of the
Outstanding Principal Amount shall be due and payable.
4. Prepayment. This Note may be prepaid in whole or in part at
any time without premium or penalty.
5. Late Fees. Any payment made more than ten (10) days after
becoming due and payable shall be subject to a two percent (2%) late fee.
6. Obligations Absolute. No provision of this Note shall alter
or impair the obligation of the Borrower, which is absolute and unconditional,
to pay the Outstanding Principal Amount of, and interest on, this Note at the
time, place and rate, and in the manner, herein prescribed.
7. Waivers of Demand, Etc. The Borrower hereby expressly
waives demand and presentment for payment, notice of nonpayment, protest, notice
of protest, notice of dishonor, notice of acceleration or intent to accelerate,
bringing of suit and diligence in taking any action to collect amounts called
for hereunder and will be directly and primarily liable for the payment of all
sums owing and to be owing hereon, regardless of and without any notice,
diligence, act or omission as or with respect to the collection of any amount
called for hereunder.
8. Defaults. Upon the occurrence of any of the following
events (herein individually referred to as an "EVENT OF DEFAULT"), (a) the
entire balance outstanding hereunder shall, at the option of Holder, become
immediately due and payable and/or (b) to the extent permitted by law, the rate
of interest on the unpaid principal shall be increased at Holder's discretion up
to 10% per annum (the "DEFAULT RATE"). The provisions herein for a Default Rate
shall not be deemed to extend the time for any payment hereunder or to
constitute a "grace period" giving Borrower a right to cure any default. At
Holder's option, any accrued and unpaid interest, fees or charges may, for
purposes of computing and accruing interest on a daily basis after the due date
of this Note, be deemed to be a part of the principal balance, and interest
shall accrue on a daily compounded basis after such date at the Default Rate
provided in this Note until the entire outstanding balance of principal and
interest is paid in full. Additionally, Holder shall have all rights and
remedies available under the Contract for Assignment, as well as all rights and
remedies available at law or in equity:
(a) Default in the payment of the principal and unpaid accrued
interest of this Note within five (5) days of becoming due and payable, whether
at maturity or by acceleration or otherwise; or
(b) Any other default by the Borrower of the performance of
any of its obligations hereunder, upon ten (10) days notice from Holder to
Borrower; or
(c) The Borrower shall make an assignment for the benefit of
creditors, file a petition in bankruptcy, consent to entry of an order for
relief against it in an involuntary case, be adjudicated insolvent or bankrupt,
petition or apply to any tribunal for the appointment of any receiver, trustee
or similar official for it or a substantial part of its assets, or commence any
proceedings under any bankruptcy, reorganization, arrangement, readjustment of
debt, dissolution or liquidation law or statute of any jurisdiction, whether now
or hereafter in effect; there shall occur the appointment of a receiver,
trustee, assignee, liquidator, custodian or similar official of it or a
substantial part of its assets; or there shall have been filed any such petition
or application or any such proceeding shall have been commenced against it,
which remains undismissed for a period of sixty (60) days or more; the Borrower
by any act or omission shall indicate its consent to, approval of or
acquiescence in any such petition, application or proceeding or the appointment
of any trustee for it or any substantial part of any of its properties; or
(d) A court of competent jurisdiction shall enter an order or
decree under any bankruptcy law that is for relief against the Borrower in an
involuntary case, appoints a receiver, trustee, assignee, liquidator or similar
official of the Borrower or for any substantial part of its property, or orders
the liquidation of the Borrower; and the order or decree remains unstayed and in
effect for 30 days.
(e) Any default by the Borrower (or, if applicable, the
Company) of the performance of any of its obligations under Sections 9 and 10
hereof, upon five (5) days notice from Holder to Borrower.
9. Assignment. The rights and obligations of the Borrower and
the Holder of this Note shall be binding upon and benefit the successors,
assigns, heirs, administrators and transferees of the parties. Notwithstanding
the foregoing, this Note and Borrower's obligations hereunder may be assigned at
any time by Borrower to Horizon Medical Products, Inc., a Georgia corporation
(the "COMPANY"), in which event Borrower shall be released from, and the Company
will assume, any and all obligations under or with respect to this Note;
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provided, that in no event may the indebtedness under this Note be subordinated
to more than $22,000,000 of Senior Indebtedness (as defined below).
10. Subordination. This note and the obligations of the
Borrower hereunder are subordinated in the manner and to the extent set forth in
that certain Debt Subordination Agreement, dated the date hereof, among the
Borrower, the Holder and Standard Federal Bank National Association.
11. Change of Control. In the event the obligations of the
Borrower hereunder are assigned to the Company pursuant to Section 9 hereunder
and the Company effectuates a sale, lease, or other disposition of all or
substantially all of the Company's assets or the Company merges into or
consolidates with any other corporation or other entity, or effectuates any
other corporate reorganization, in which the holders of the Company's
outstanding voting stock immediately prior to such transaction own, immediately
after such transaction, securities representing less than fifty percent (50%) of
the voting power of the corporation or other entity surviving such transaction,
then this Note shall become immediately due and payable in full; provided that
this Section 11 shall not apply to a merger effected exclusively for the purpose
of changing the domicile of the Company.
12. Attorneys' and Collection Fees. Should the indebtedness
evidenced by this Note or any part hereof be collected at law or in equity or in
bankruptcy, receivership or other court proceedings, the Borrower agrees to pay,
in addition to principal and interest due and payable hereon, all costs of
collection, including reasonable attorneys' fees and expenses, incurred by the
Holder in collecting or enforcing this Note.
13. Miscellaneous. Whenever the sense of this Note requires,
words in the singular shall be deemed to include the plural and words in the
plural shall be deemed to include the singular. If more than one company is
named herein, the liability of each shall be joint and several. Paragraph
headings are for convenience only and shall not affect the meaning of this
document.
14. Amendments. Any provision of this Note may be amended and
the observance of any term may be waived (either generally or in a particular
instance and either retroactively or prospectively) only with the express
written consent of both the Borrower and the Holder. Any amendment or waiver
affected in accordance with this Section 14 shall be binding on each future
Holder and the Borrower.
15. Arbitration. EXCEPT AS SET OUT BELOW, ANY CONTROVERSY OR
CLAIM BETWEEN OR AMONG THE PARTIES HERETO INCLUDING BUT NOT LIMITED TO THOSE
ARISING OUT OF OR RELATING TO THIS NOTE OR ANY RELATED DOCUMENTS, INCLUDING ANY
CLAIM BASED ON OR ARISING FROM AN ALLEGED TORT (COLLECTIVELY, "CLAIM"), SHALL BE
DETERMINED BY BINDING ARBITRATION IN ACCORDANCE WITH THE FEDERAL ARBITRATION ACT
(OR IF NOT APPLICABLE, THE APPLICABLE STATE LAW), THE RULES OF PRACTICE AND
PROCEDURE FOR THE ARBITRATION OF COMMERCIAL DISPUTES OF J.A.M.S./ENDISPUTE OR
ANY SUCCESSOR THEREOF ("J.A.M.S."), AND THE "SPECIAL RULES" SET FORTH BELOW. IN
THE EVENT OF ANY INCONSISTENCY, THE SPECIAL RULES SHALL CONTROL. JUDGMENT UPON
ANY ARBITRATION AWARD MAY BE ENTERED IN ANY COURT HAVING JURISDICTION. ANY PARTY
TO THIS DOCUMENT MAY BRING AN ACTION, INCLUDING A SUMMARY OR EXPEDITED
PROCEEDING, TO COMPEL ARBITRATION OF ANY CLAIM IN ANY COURT HAVING JURISDICTION
OVER SUCH ACTION. THE INSTITUTION AND MAINTENANCE OF AN ACTION FOR ANY JUDICIAL
RELIEF SHALL NOT CONSTITUTE A WAIVER OF THE RIGHT OF ANY PARTY, INCLUDING THE
PLAINTIFF, TO SUBMIT THE CLAIM TO ARBITRATION IF ANY OTHER PARTY CONTESTS SUCH
ACTION FOR JUDICIAL RELIEF.
(a) Special Rules. ANY ARBITRATION SHALL BE CONDUCTED IN THE
COUNTY OF ANY BORROWER'S DOMICILE AT THE TIME OF THE EXECUTION OF THIS DOCUMENT,
OR IF THERE IS REAL OR TANGIBLE PERSONAL PROPERTY COLLATERAL, IN THE COUNTY
WHERE SUCH REAL OR TANGIBLE PERSONAL PROPERTY IS LOCATED, AND ADMINISTERED BY
J.A.M.S. WHO WILL APPOINT AN ARBITRATOR; IF J.A.M.S. IS UNABLE OR LEGALLY
PRECLUDED FROM ADMINISTERING THE ARBITRATION, THEN THE AMERICAN ARBITRATION
ASSOCIATION WILL SERVE. ALL ARBITRATION HEARINGS WILL BE COMMENCED WITHIN 90
DAYS OF THE DEMAND
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FOR ARBITRATION; FURTHER, THE ARBITRATOR SHALL ONLY, UPON A SHOWING OF CAUSE, BE
PERMITTED TO EXTEND THE COMMENCEMENT OF SUCH HEARING FOR UP TO AN ADDITIONAL 60
DAYS. ANY DISPUTE CONCERNING THIS ARBITRATION PROVISION OR WHETHER A CLAIM IS
ARBITRABLE SHALL BE DETERMINED BY THE ARBITRATOR. THE ARBITRATOR SHALL HAVE THE
POWER TO AWARD LEGAL FEES PURSUANT TO THE TERMS OF THIS DOCUMENT.
(b) Reservation of Rights. NOTHING IN THIS ARBITRATION
PROVISION SHALL BE DEEMED TO (I) LIMIT THE APPLICABILITY OF ANY OTHERWISE
APPLICABLE STATUTES OF LIMITATION OR REPOSE AND ANY WAIVERS CONTAINED IN THIS
DOCUMENT; OR (II) BE A WAIVER BY HOLDER OF THE PROTECTION AFFORDED TO IT BY 12
U.S.C. SEC. 91 OR ANY SUBSTANTIALLY EQUIVALENT STATE LAW; OR (III) LIMIT THE
RIGHT OF ANY PARTY HERETO (A) TO EXERCISE SELF HELP REMEDIES SUCH AS (BUT NOT
LIMITED TO) SETOFF, OR (B) TO FORECLOSE AGAINST OR SELL ANY REAL OR PERSONAL
PROPERTY COLLATERAL, OR (C) TO OBTAIN FROM A COURT PROVISIONAL OR ANCILLARY
REMEDIES SUCH AS (BUT NOT LIMITED TO) INJUNCTIVE RELIEF, WRIT OF POSSESSION OR
THE APPOINTMENT OF A RECEIVER. ANY PARTY MAY EXERCISE SUCH SELF HELP RIGHTS,
FORECLOSE OR SELL COLLATERAL OR OBTAIN SUCH PROVISIONAL OR ANCILLARY REMEDIES
BEFORE, DURING OR AFTER THE PENDENCY OF ANY ARBITRATION PROCEEDING BROUGHT
PURSUANT TO THIS NOTE. NONE OF THESE ACTIONS SHALL CONSTITUTE A WAIVER OF THE
RIGHT OF ANY PARTY, INCLUDING THE CLAIMANT IN ANY SUCH ACTION, TO ARBITRATE THE
MERITS OF THE CLAIM OCCASIONING RESORT TO SUCH REMEDIES OR PROCEDURES.
16. Governing Law. THIS NOTE SHALL BE GOVERNED BY, AND SHALL
BE CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF GEORGIA (WITHOUT
GIVING EFFECT TO PRINCIPLES OF CONFLICTS OF LAWS OF THE STATE OF GEORGIA OR ANY
OTHER STATE).
17. Notices. All notices hereunder shall be in writing and
shall be conclusively deemed to have been received and shall be effective (a) on
the day on which delivered if delivered personally or transmitted by telex or
telegram or telecopier, or (b) one business day after the date on which the same
is delivered to a nationally recognized overnight courier service, and shall be
addressed:
in the case of the Company, to:
Horizon Medical Products, Inc.
Seven North Parkway Square
0000 Xxxxxxxxx Xxxxxxx
Xxxxxxx, Xxxxxxx 00000
Attention: President
with a copy to:
King & Spalding
000 Xxxxxxxxx Xx.
Xxxxxxx, Xxxxxxx 00000
Attention: Xxx X. Xxxxxx, Xx., Esq.
in the case of the Borrower to:
ComVest Venture Partners, L.P.
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxx X. Xxxxxxxx, Esq.
with a copy to:
Xxxxx Raysman Xxxxxxxxx Xxxxxx & Xxxxxxx LLP
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000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxx Xxxxxxxx, Esq.
in the case of the Holder:
Bank of America
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Attention: Xxx Xxxxxx
with a copy to:
Xxxxxx, Xxxxxxx & Xxxxxx, L.L.P.
1600 Atlanta Financial Center
0000 Xxxxxxxxx Xxxx, X.X.
Attention: Xxxxx X. XxXxxxx, Esq.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the Borrower has caused this instrument to be duly
executed by an officer thereunto duly authorized.
Dated: March 15, 2002
COMVEST VENTURE PARTNERS, L.P.
By: ComVest Management LLC, its General Partner
By: /s/ Xxxxxx X. Xxxxxx
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Name: Xxxxxx X. Xxxxxx
Title: President and Managing Director
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