EXHIBIT 10.6
THIS SUBORDINATED DEBENTURE HAS NOT BEEN REGISTERED PURSUANT TO ANY FEDERAL
OR STATE SECURITIES LAWS AND MAY NOT BE SOLD OR TRANSFERRED IN VIOLATION OF ANY
FEDERAL OR STATE SECURITIES LAWS.
THIS INSTRUMENT IS SUBJECT TO THE SUBORDINATION AGREEMENT DATED AS OF
JULY 3, 1995, AMONG THE MAKER, THE PAYEE AND THE FIRST NATIONAL BANK OF BOSTON,
WHICH AMONG OTHER THINGS, SUBORDINATES THE MAKER'S OBLIGATIONS HEREUNDER TO THE
PRIOR PAYMENT OF CERTAIN OBLIGATIONS OF THE MAKER TO THE HOLDERS OF SENIOR
OBLIGATIONS AS DEFINED THEREIN.
12% Subordinated Debenture
Due June 30, 2000
$135,000 Boston, Massachusetts
No. R-2 July 3, 1995
FOR VALUE RECEIVED, Suburban Ostomy Supply Co., Inc., a Massachusetts
corporation (the "Company"), hereby promises to pay to Summit Investors II,
L.P., or its registered assigns, the sum of One Hundred Thirty-Five Thousand
Dollars ($135,000) on June 30, 2000, together with interest, computed on the
basis of the actual number of days elapsed over a 360-day year, on the unpaid
principal balance hereof until paid in full at the rate of twelve percent (12%)
per annum from the date hereof, payable in cash quarterly in arrears on the last
day of each of March, June, September and December of each year during which any
amounts due hereunder remain outstanding, commencing on September 30, 1995, and
until such unpaid balance shall become due and payable (whether at maturity or
at a date fixed for mandatory or optional redemption or prepayment or by
acceleration or otherwise).
In addition, in the event the principal amount of the Debenture is not paid
when due and payable (whether at stated maturity, by acceleration or otherwise),
the interest on such principal amount shall thereafter be increased to fourteen
percent (14%) per annum. Any interest not paid when due and payable shall
thereafter be paid, on demand by the holder of this Debenture together with a
late charge of two percent (2%) of the amount of interest payment due.
All payments of principal (including any prepayments or redemptions) and
interest hereunder shall be made by the Company in lawful money of the United
States of America in immediately available funds not later than 2:00 p.m.,
Boston time, on the date each such payment is due, by crediting an account in
the United States as the holder of this Debenture may designate in writing to
the Company before the scheduled payment date.
This Debenture is one of a duly authorized issue of Debentures of the
Company designated as its "12% Subordinated Debentures due June 30, 2000"
(herein called the "Debentures"), in the aggregate principle amount of
$6,750,000 and issued under a Debenture
Purchase Agreement, dated as of July 3, 1995 (herein called the "Agreement"),
among the Company, Summit Subordinated Debt Fund, L.P. and Summit Investors II,
L.P. and certain stockholders of the Company to which Agreement and all
agreements supplemental thereto reference is hereby made for a statement of the
respective rights and duties thereunder of the Company, and the holders of the
Debentures, and the terms upon which the Debentures are, and are to be,
delivered.
The principal of this Debenture is subject to mandatory and optional
prepayment, together with accrued interest, all as more particularly set forth
in the Agreement. The Company agrees to make such payments of principal on the
dates and in the amounts set forth in the Agreement.
Notwithstanding anything herein contained to the contrary, the Indebtedness
evidenced by the Debenture is, to the extent provided in the Agreement,
subordinate and subject in right of payment to the prior payment in full of all
Senior Debt as defined in the Agreement, and this Debenture is issued subject to
such provisions, and each holder of Debentures, by accepting the same, agrees to
and shall be bound by such provisions and agrees to take such action as may be
necessary or appropriate to effectuate the subordination as provided in the
Agreement.
In case an Event of Default, as defined in the Agreement, shall have
occurred and be continuing, the principal of all of the Debentures may be
declared, and upon such declaration shall become, due and payable, in the
manner, with the effect and subject to the conditions provided in the Agreement.
The Agreement provides that such declaration may in certain events be rescinded
or annulled by the holders of a majority in principal amount of the Debentures
then outstanding.
No reference herein to the Agreement and no provisions of this Debenture or
of the Agreement shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay the principal of and interest on this
Debenture at the times, places, and rates, and in the coin or currency, herein
prescribed.
As is more fully set forth in the Agreement, this Debenture is transferable
by the registered owner hereof, in person or by duly authorized attorney, on the
books of the Company to be kept for that purpose, upon surrender and
cancellation of this Debenture and upon presentation of a duly executed written
instrument of transfer satisfactory to the Company, and thereupon a new
Debenture or Debentures, of the same aggregate principal amount and in
authorized denominations, will be issued to the transferee or transferees in
exchange therefor; and this Debenture, with or without other Debentures may in
like manner be exchanged for one or more new Debentures of other authorized
denominations but of the same aggregate principal amount, all subject to the
terms and conditions set forth in the Agreement. Any such transfer or exchange
shall be without charge by the Company.
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All terms used in this Debenture which are defined in the Agreement shall
have the meanings assigned to them in the Agreement.
This Debenture shall be deemed to be a contract made under the laws of The
Commonwealth of Massachusetts and shall for all purposes be construed in
accordance with the laws of said Commonwealth without giving effect to the
conflict-of-laws provisions thereof.
IN WITNESS WHEREOF, the Company has caused this Debenture to be duly
executed as a sealed instrument.
SUBURBAN OSTOMY SUPPLY CO.,
INC.
By: /s/ Herbert Grey
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