PROMISSORY NOTE
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$1,650,000.00 September 18, 2002
FOR VALUE RECEIVED, the undersigned, WORLDWIDE MEDICAL CORPORATION, a
Delaware corporation (the "MAKER"), promises to pay to the order of ZIEGLER
HEALTHCARE FUND I, L.P., a Delaware limited partnership (hereinafter, together
with any subsequent holder of this Note, the "HOLDER") at its main office in the
City of Shrewsbury, New Jersey, or at such other address as the Holder may, from
time to time, designate in writing, the principal sum of One Million Six Hundred
Fifty Thousand and No/100 Dollars ($1,650,000.00) (the "LOAN"), and together
with interest thereon, such principal and interest to be payable as follows:
A. On October 20, 2002, and on the same day of each successive calendar
month thereafter for a period of twelve (12) successive months, Maker shall pay
to Holder an installment of interest in the amount of $19,250.00 each, or such
greater amount as may be required pursuant to the terms of this Note (such
payment under this paragraph A being hereinafter referred to as the "INTEREST
ONLY PAYMENT").
B. On October 20, 2003 and on the same day of each successive calendar
month thereafter, Maker shall pay to Holder an installment of principal and
interest in the amount of $45,088.69 each (such payment under this paragraph B
being hereinafter referred to as the "COUPON INTEREST").
C. On September 20, 2007 (the "MATURITY DATE"), if not sooner prepaid,
Maker shall pay to Holder, without demand, the outstanding principal balance,
together with all accrued and unpaid interest.
The monthly payments under paragraph B above are based upon a 4-year
amortization and an interest rate equal to the Coupon Rate. The monthly Coupon
Payment includes interest at the "Coupon Rate" of fourteen percent (14%) per
annum.
Reference to the Loan Agreement between Maker and Holder of even date
herewith, as the same may hereafter be amended (as so amended, the "LOAN
AGREEMENT") is hereby made for a statement of the rights of Holder and the
obligations of Maker, which Loan Agreement is incorporated herein by this
reference, but neither this reference to the Loan Agreement nor any provision
thereof shall affect or impair the absolute and unconditional obligation of
Maker to pay the principal and interest of this Note when due. Capitalized
terms used herein without definition shall have the meanings ascribed to such
terms in the Loan Agreement.
Interest on the outstanding principal balance shall be calculated on the
basis of a 360-day year by multiplying the outstanding principal amount by the
applicable per annum rate, multiplying the product thereof by the actual number
of days elapsed, and dividing the product so obtained by 360.
The principal and interest shall be payable in lawful money of the United
States which shall be legal tender for public and private debts at the time of
payment. Maker may prepay the outstanding principal balance of this Note, or any
part thereof, only in accordance with the terms and conditions of the Loan
Agreement.
This Note is secured by the Loan Documents, including, but not limited to,
the Security Agreement and the Collateral.
The principal sum evidenced by this Note, together with accrued interest,
shall become immediately due and payable at the option of the Holder upon the
occurrence of any Event of Default under the terms of the Loan Agreement, which
such "Events of Default" are incorporated herein by reference as if set forth in
full herein.
If any payment is not made on or before the tenth (10th) day after such
payment became due, Maker will also pay to Holder a late charge equal to five
percent (5%) of the payment which is in default, but not more than the maximum
amount permitted by applicable law.
Upon the first Event of Default the Coupon Rate shall be increased by two
hundred fifty (250) basis points, computed from the date of the notice from
Holder of the Event of Default as described in the Loan Agreement, subject to
Maker's cure of such Event of Default within thirty (30) days following notice
from Holder of such Event of Default. If such Event of Default is not cured
within such thirty (30) day period, or upon any subsequent Event of Default, the
Coupon Rate shall be increased by five hundred (500) basis points above the
Coupon Rate computed from the date of the notice from Holder of such Event of
Default. In the event (i) Borrower cures such Event of Default to the
satisfaction of Lender in its sole discretion and (ii) Lender elects not to
exercise any of its other remedies upon such Event of Default, interest on the
Loan shall return to the Coupon Rate, all as more particularly described in the
Loan Agreement.
With respect to the amounts due pursuant to this Note, the Maker waives the
following:
(1) All rights of exemption of property from levy or sale under execution
or other process for the collection of debts under the Constitution or laws of
the United States or any state thereof;
(2) Demand, presentment, protest, notice of dishonor, notice of nonpayment,
suit against any party, diligence in collection of this Note, and all other
requirements necessary to enforce this Note except for notices expressly
required by the Loan Documents; and
(3) Any further receipt by or acknowledgment of any collateral now or
hereafter deposited as security for the Loan.
In no event shall the amount of interest due or payable hereunder exceed
the maximum rate of interest designated by applicable law, and in the event such
payment is inadvertently paid by Maker or inadvertently received by Holder, then
such excess sum shall be credited as a payment of principal. It is the express
intent hereof that Maker not pay and Holder not receive, directly or indirectly,
interest in excess of that which may be legally paid by Maker under applicable
law.
Holder shall not by any act, delay, omission, or otherwise be deemed to
have waived any of its rights or remedies, and no waiver of any kind shall be
valid unless in writing and signed by Holder. All rights and remedies of Holder
under the terms of this Note and applicable statutes or rules of law shall be
cumulative, and may be exercised successively or concurrently. Maker agrees that
there are no defenses, equities or setoffs with respect to the obligations set
forth herein, and to the extent any such defenses, equities, or setoffs may
exist, the same are hereby expressly released, forgiven, waived and forever
discharged. The obligations of Maker hereunder shall be binding upon and
enforceable against Maker and its successors and assigns.
Any provisions of this Note which may be unenforceable or invalid under any
law shall be ineffective to the extent of such unenforceability or invalidity
without affecting the enforceability or validity of any other provision hereof.
Holder may, at its option, release any Collateral given to secure the
indebtedness evidenced hereby and no such release shall impair the obligations
of Maker to Holder.
IN ANY SUIT UPON THIS NOTE THE VALIDITY, INTERPRETATION, ENFORCEMENT, AND
EFFECT OF THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
LAWS OF THE STATE OF NEW JERSEY. THE HOLDER'S PRINCIPAL PLACE OF BUSINESS IS
LOCATED IN THE STATE OF NEW JERSEY, AND THE MAKER AGREES THAT THIS NOTE SHALL BE
HELD BY HOLDER AT SUCH PRINCIPAL PLACE OF BUSINESS, AND THE HOLDING OF THIS NOTE
BY HOLDER THEREAT SHALL CONSTITUTE SUFFICIENT MINIMUM CONTACTS OF MAKER WITH THE
STATE OF NEW JERSEY FOR THE PURPOSE OF CONFERRING JURISDICTION UPON THE FEDERAL
AND STATE COURTS PRESIDING IN SUCH STATE AND THE COUNTY OF HOLDER'S PRINCIPAL
PLACE OF BUSINESS. MAKER CONSENTS THAT ANY LEGAL ACTION OR PROCEEDING ARISING
HEREUNDER MAY BE BROUGHT IN THE FEDERAL AND STATE COURTS PRESIDING IN SUCH
COUNTY AND STATE AND ASSENTS AND SUBMITS TO THE PERSONAL JURISDICTION OF ANY
SUCH COURT IN ANY ACTION OR PROCEEDING INVOLVING THIS NOTE. NOTHING HEREIN
SHALL LIMIT THE JURISDICTION OF ANY OTHER COURT.
TO THE EXTENT PERMITTED BY APPLICABLE LAW, MAKER HEREBY WAIVES ANY RIGHT TO
TRIAL BY JURY ON ANY CLAIM, COUNTERCLAIM, SETOFF, DEMAND, ACTION, OR CAUSE OF
ACTION (A) ARISING OUT OF OR IN ANY WAY PERTAINING OR RELATING TO THIS NOTE OR
ANY OF THE LOAN DOCUMENTS, OR (B) IN ANY WAY CONNECTED WITH OR PERTAINING OR
RELATED TO OR INCIDENTAL TO ANY DEALINGS OF THE PARTIES HERETO WITH RESPECT TO
THIS NOTE OR THE LOAN DOCUMENTS, OR IN CONNECTION WITH THE TRANSACTIONS RELATED
THERETO OR CONTEMPLATED THEREBY OR THE EXERCISE OF EITHER PARTY'S RIGHTS AND
REMEDIES THEREUNDER, IN ALL OF THE FOREGOING CASES WHETHER NOW EXISTING OR
HEREAFTER ARISING, AND WHETHER SOUNDING IN CONTRACT, TORT, OR OTHERWISE. MAKER
AGREES THAT HOLDER MAY FILE A COPY OF THIS WAIVER WITH ANY COURT AS WRITTEN
EVIDENCE OF THE KNOWING, VOLUNTARY, AND BARGAINED-FOR AGREEMENT OF MAKER
IRREVOCABLY TO WAIVE ITS RIGHT TO TRIAL BY JURY, AND THAT, TO THE EXTENT
PERMITTED BY APPLICABLE LAW, ANY DISPUTE OR CONTROVERSY WHATSOEVER BETWEEN MAKER
AND HOLDER SHALL INSTEAD BE TRIED IN A COURT OF COMPETENT JURISDICTION BY A
JUDGE SITTING WITHOUT A JURY.
* * *
IN WITNESS WHEREOF, Maker has caused this instrument to be properly
executed and delivered as of the day and year first above written.
WORLDWIDE MEDICAL CORPORATION,
a Delaware corporation
By: /s/ Daniel G. McGuire
_______________________
Name: Daniel G. McGuire
Title: President