Back to top

10% SECURED CONVERTIBLE SUBORDINATED PROMISSORY NOTE

Promissory Note

10% SECURED CONVERTIBLE SUBORDINATED PROMISSORY NOTE | Document Parties: COMVEST NATIONSHEALTH HOLDINGS, LLC | DIABETES CARE & EDUCATION, INC | MEDICAL PRODUCTS, LLC | NATIONSHEALTH, INC | UNITED STATES PHARMACEUTICAL GROUP, LLC You are currently viewing:
This Promissory Note involves

COMVEST NATIONSHEALTH HOLDINGS, LLC | DIABETES CARE & EDUCATION, INC | MEDICAL PRODUCTS, LLC | NATIONSHEALTH, INC | UNITED STATES PHARMACEUTICAL GROUP, LLC

. RealDealDocs™ contains millions of easily searchable legal documents and clauses from top law firms. Search for free - click here.
Title: 10% SECURED CONVERTIBLE SUBORDINATED PROMISSORY NOTE
Governing Law: Delaware     Date: 5/5/2009
Industry: Medical Equipment and Supplies     Law Firm: McDermott Will;Foley Lardner     Sector: Healthcare

10% SECURED CONVERTIBLE SUBORDINATED PROMISSORY NOTE, Parties: comvest nationshealth holdings  llc , diabetes care & education  inc , medical products  llc , nationshealth  inc , united states pharmaceutical group  llc
50 of the Top 250 law firms use our Products every day

Exhibit 4.13

THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR UNDER THE SECURITIES LAWS OF ANY STATE. THESE SECURITIES ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER THE ACT AND APPLICABLE STATE SECURITIES LAWS, PURSUANT TO REGISTRATION OR AN EXEMPTION THEREFROM. THE ISSUER OF THESE SECURITIES MAY REQUIRE AN OPINION OF COUNSEL IN FORM AND SUBSTANCE SATISFACTORY TO THE ISSUER TO THE EFFECT THAT ANY PROPOSED TRANSFER OR RESALE IS IN COMPLIANCE WITH THE ACT AND ANY APPLICABLE STATE SECURITIES LAWS.

THIS PROMISSORY NOTE IS SUBORDINATED TO CERTAIN SENIOR INDEBTEDNESS OF BORROWER (AS HEREIN DEFINED) IN THE MANNER SET FORTH IN THE SENIOR SUBORDINATION AGREEMENT (AS HEREIN DEFINED) AND ALL RIGHTS, REMEDIES AND OBLIGATIONS UNDER THIS PROMISSORY NOTE AND THE OTHER BRIDGE LOAN DOCUMENTS (AS HEREIN DEFINED) ARE SUBJECT TO THE TERMS OF THE SENIOR SUBORDINATION AGREEMENT.

10% SECURED CONVERTIBLE SUBORDINATED PROMISSORY NOTE

No. R-1

 

 

 

$3,000,000.00

 

April 30, 2009

     NATIONSHEALTH, INC., a Delaware corporation (the “ Company ”), UNITED STATES PHARMACEUTICAL GROUP, L.L.C. d/b/a NATIONSHEALTH, a Delaware limited liability company (“ USPG ”), NATIONSHEALTH HOLDINGS, L.L.C., a Florida limited liability company (“ Holdings ”), DIABETES CARE & EDUCATION, INC., a South Carolina corporation (“ Diabetes ”), and NATIONAL PHARMACEUTICALS AND MEDICAL PRODUCTS, L.L.C., a Florida limited liability company (“ National ” and together with the Company, USPG, Holdings and Diabetes, “ Borrower ”), for value received, promises to pay to COMVEST NATIONSHEALTH HOLDINGS, LLC, a Delaware limited liability company (“ Holder ”), the principal sum of Three Million Dollars ($3,000,000), together with interest as provided herein, which shall be due and payable upon the terms and conditions contained in this 10% Secured Convertible Subordinated Promissory Note (this “ Note ”). This Note is being issued in connection with (a) the Agreement and Plan of Merger of even date herewith (the “ Merger Agreement ”) by and among the Company, Holder and NationsHealth Acquisition Corp., a Delaware corporation and a wholly owned Subsidiary of Holder (“ Merger Sub ”), which provides for the merger of Merger Sub with and into the Company (the “ Merger ”), and (b) the Bridge Loan and Security Agreement between Holder and Borrower of even date herewith (the “ Bridge Loan Agreement ”). Capitalized terms not otherwise defined in this Note shall have the meaning set forth in the Merger Agreement and the Bridge Loan Agreement, as applicable.

 


 

     1.  Interest Rate .

          (a) Subject to paragraph (b) below, the outstanding principal balance of this Note shall bear interest at a rate equal to ten percent (10%) per annum, simple interest.

          (b) In the event that the Merger Agreement is terminated other than pursuant to Section 7.1(c)(i) or Section 7.1(d)(i) of the Merger Agreement, on the last day of each ninety (90) day period from the date of such termination, the interest rate set forth in Section 1(a) shall be increased by two percent (2%), per annum, but in no event shall the interest rate exceed eighteen percent (18%) per annum, simple interest.

          (c) The interest on the Bridge Loan shall be calculated on the basis of the actual number of days elapsed and a year of 365 days.

     2.  Payment Terms . Subject to Sections 4, 5 and 6 , the Note shall be paid as follows:

          (a) Commencing on the first day of the first calendar month following the Closing Date (as defined in the Bridge Loan Agreement) and continuing until such time as the principal amount hereunder, together with all accrued interest, premiums and penalties, if any, have been paid to Holder, interest on the outstanding principal balance of the Bridge Loan shall be paid monthly in arrears on the first day of each calendar month. Whenever any payment hereunder shall be stated to be due or shall become due and payable on a day other than a Business Day, the due date thereof shall be extended to, and such payment shall be made on, the next succeeding Business Day, and such extension of time in such case shall be included in the computation of payment of any interest (at the interest rate then in effect during such extension) and/or fees, as the case may be.

          (b) Subject to paragraphs (c) and (d) below, the outstanding principal balance of this Note, together with the balance of any unpaid and accrued interest, shall be due and payable on the earlier to occur of (i) the date that is six (6) months from the date hereof (the “ Maturity Date ”) or (ii) in the event that the Merger Agreement is terminated pursuant to Section 7.1(d)(iii) thereof, the date of such termination.

2


 

          (c) In the event that the Merger Agreement is terminated pursuant to Section 7.1(a), Section 7.1(b)(i), Section 7.1(b)(ii), Section 7.1(b)(iv), Section 7.1(c)(i) (and such breach triggering such termination shall not have been willful), Section 7.1(c)(iii) (and such breach triggering such termination shall not have been willful), Section 7.1(c)(iv), Section 7.1(d)(i) (and such breach triggering such termination shall not have been willful) or Section 7.1(d)(ii) thereof (and such breach triggering such termination shall not have been willful), the outstanding obligations under this Note shall be paid on or before the Maturity Date in accordance with the terms hereof. During the thirty (30) day period after the Maturity Date and in the event all of the outstanding obligations owed by Borrower to Holder under this Note and any of the other Bridge Loan Documents have not been paid in full (the “ Thirty Day Post-Maturity Period ”), Borrower and/or any of MHR Capital Partners Master Account, LP, MHR Capital Partners (100) LP, OTQ, LLC, and Mark H. Rachesky M.D., or their respective affiliates, successors and transferees (collectively, “ MHR ”) (pursuant to an agreement between Borrower and MHR) shall have the right to pay or purchase all, but not less than all, of such obligations in accordance with the terms and conditions of this Note and the other Bridge Loan Documents. In the event that all of the outstanding obligations owed by Borrower to Holder under this Note and the other Bridge Loan Documents have not been paid or purchased in full before the expiration of the Thirty Day Post-Maturity Period, then, for the one hundred eighty (180) day period thereafter (the “ Holder’s Post-Maturity Election Period ”), Holder shall have the option, in its sole and absolute discretion, to either (i) consummate the Senior Indebtedness Purchase (as defined in the Merger Agreement) or (ii) convert the outstanding obligations under this Note (the “ Voluntary Conversion Amount ”) into shares of the Company’s Series A-1 Convertible Preferred Stock, par value $.01 per share, with the rights, preferences and privileges set forth in the Certificate of Designation attached as Exhibit C of the Bridge Loan Agreement (the “ Series A-1 Preferred Stock ”) at a conversion price equal to $0.05 per share (the “ Voluntary Conversion Price ”), which conversion price shall be subject to the full anti-dilution rights of the Series A-1 Preferred Stock set forth in Section 4(h) of the Certificate of Designation attached as Exhibit C to the Bridge Loan Agreement, such that the conversion ratio of such Series A-1 Preferred Stock will adjust so that the shares of common stock, par value $0.0001 per share, of the Company (the “ Common Stock ”) issued upon conversion of such Series A-1 Preferred Stock will be equal to 60.2% of the Fully Diluted Common Stock on the Date of Conversion (the “ Voluntary Bridge Loan Conversion ”); provided , however , that in the event the Merger Agreement is terminated pursuant to Section 7.1(c)(iv), or Section 7.1(d)(i) (and such breach triggering such termination shall not have been willful), or Section 7.1(d)(ii) thereof (and such breach triggering such termination shall not have been willful), Holder’s option and ability to exercise the Voluntary Bridge Loan Conversion shall be immediately terminated pursuant to the Preferred Stock Investment Documents. The term “ Fully Diluted Common Stock on the Date of Conversion ” shall mean the number of issued and outstanding shares of Common Stock on the date of the Voluntary Bridge Loan Conversion, plus the number of shares of Common Stock issuable upon conversion of all shares of preferred stock of the Company that are outstanding on the date of the Voluntary Bridge Loan Conversion, plus the number of shares of Common Stock that can be purchased upon exercise of stock options that are outstanding on the date of the Voluntary Bridge Loan Conversion, plus the number of shares of Common Stock that can be purchased upon exercise of all warrants that are outstanding on the date of the Voluntary Bridge Loan Conversion (including the MHR Warrants, as defined in the Merger Agreement), but excluding all shares of Common Stock that may be issued upon conversion of any debt or promissory notes of the Company that is or are outstanding on the date of the Voluntary Bridge Loan Conversion. For clarification purposes only, Holder shall have the right to elect only one of the Senior Indebtedness Purchase or the Voluntary Bridge Loan Conversion, but in no event both the Senior Indebtedness Purchase and the Voluntary Bridge Loan Conversion. In the event that Holder does not consummate the Senior Indebtedness Purchase or exercise the Voluntary Bridge Loan Conversion during the Holder’s Post-Maturity Election Period, all of Holder’s rights with respect to the Senior Indebtedness Purchase and the Voluntary Bridge Loan Conversion shall immediately terminate and Holder shall have the right to exercise any and all of its rights and remedies under this Note and the other Bridge Loan Documents (subject to terms and conditions set forth in the Merger Agreement and/or any agreement, document or instrument between the Senior Lender, Holder, and/or MHR, as the case may be). In the event Holder (i) breaches Section 5.16(a) or Section 5.16(b) of the Merger Agreement, or (ii) consummates a Bridge Loan Indebtedness Transfer (as defined below) (other than to MHR) following the Thirty Day Post-Maturity Period, the right to exercise the Voluntary Bridge Loan Conversion shall be immediately terminated pursuant to the Preferred Stock Investment Documents. Holder shall have the right to enforce, if applicable, any agreements, documents or instruments between the Company and the Senior Lender that were acquired in connection with the Senior Lender Indebtedness Purchase at any time (subject to terms and conditions set forth in the Merger Agreement and/or any agreements, documents or instrument between the Senior Lender, Holder, and/or MHR, as the case may be).

3


 

          (d) In the event that the Merger Agreement is terminated pursuant to (i) Section 7.1(c)(i) or Section 7.1(c)(iii) thereof, and the Company’s breach triggering such termination shall have been willful or (ii) Section 7.1(b)(iii), or Section 7.1(c)(ii) thereof, the outstanding obligations under this Note shall be paid on or before the Maturity Date in accordance with the terms hereof. During the thirty (30) day period after such termination and in the event all of the outstanding obligations owed by Borrower to Holder under this Note and any of the other Bridge Loan Documents have not been paid in full (the “ Thirty Day Post-Termination Period ”), Borrower and/or MHR (pursuant to an agreement between Borrower and MHR) shall have the right to pay or purchase all, but not less than all, of such obligations in accordance with the terms and conditions of this Note and the other Bridge Loan Documents. In the event that all of the outstanding obligations owed by Borrower to Holder under this Note and the other Bridge Loan Documents have not been paid or purchased in full prior to expiration of the Thirty Day Post-Termination Period, then, for the one hundred eighty (180) day period thereafter (the “ Holder’s Post-Termination Election Period ”), Holder shall have the option, in its sole and absolute discretion, to either (i) consummate the Senior Indebtedness Purchase or (ii) exercise the Voluntary Bridge Loan Conversion. For clarification purposes only, Holder shall have the right to elect only one of the Senior Indebtedness Purchase or the Voluntary Bridge Loan Conversion, but in no event both the Senior Indebtedness Purchase and the Voluntary Bridge Loan Conversion. In the event that Holder does not consummate the Senior Indebtedness Purchase or exercise the Voluntary Bridge Loan Conversion during the Holder’s Post-Termination Election Period, all of Holder’s rights with respect to the Senior Indebtedness Purchase and the Voluntary Bridge Loan Conversion shall immediately terminate and Holder shall have the right to exercise any


 
SITE SEARCH

AGREEMENTS / CONTRACTS

Document Title:

Entire Document: (optional)

Governing Law:(optional)


Try our advanced search >>
 

CLAUSES

Search Contract Clauses >>

Browse Contract Clause Library>>

Get Email Updates
Email:
This is only a partial view of this document. We have millions of legal documents and clauses drafted by top law firms. learn more search for free browse for free learn more