Exhibit 99.3
PROMISSORY NOTE
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$3,750,000.00 March 19, 1999
FOR VALUE RECEIVED, PHYSICIANS RESOURCE GROUP, INC., a Delaware corporation
("Borrower"), hereby promises to pay to the order of M.D. SASS CORPORATE
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RESURGENCE PARTNERS, L.P., a Delaware limited partnership ("Lender"), at its
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principal place of business located at ▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇
▇▇▇▇, the principal sum of Three Million Seven Hundred Fifty Thousand and No/100
Dollars ($3,750,000.00), on or before the Maturity Date (as hereinafter
defined), together with interest on the unpaid principal balance of this Note
from day to day outstanding, as hereinafter provided.
This Note is secured by the Pledge Agreement (hereinafter defined).
Section 1. Definitions. Any capitalized term used and not otherwise
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defined herein shall have the meaning given such term in the Pledge Agreement.
As used herein the following terms shall have the respective meanings set forth
below:
"Applicable Rate" means a per annum rate of interest equal to twenty
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percent (20%).
"Business Day" means a day other than a Saturday, Sunday or other day on
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which national banks in New York, New York are closed.
"Loan" means the Loan made by ▇▇▇▇▇▇ to Borrower evidenced by this Note.
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"Loan Documents" means this Note, the Pledge Agreement and all other
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documents evidencing, securing or executed in connection with the Loan, and all
supplements, modifications, amendments and restatements thereof.
"Maturity Date" means September 30, 1999.
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"Pledge Agreement" means that certain Pledge and Security Agreement of even
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date herewith, executed by Borrower and certain of its subsidiaries in favor of
Lender covering various capital stock and other equity ownership interests of
Borrower and certain of Borrower's Subsidiaries, and all supplements,
modifications and amendments thereof.
Section 2. Interest Rate and Payments.
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(a) Commencing on the date of this Note and continuing until the Loan is
paid in full, interest on the outstanding principal balance of the Note shall
accrue at a rate per annum equal to the the Applicable Rate. Interest on this
Note shall be calculated at a daily rate equal to 1/360 of the annual percentage
rate which this Note bears.
(b) Commencing on May 1 , 1999, and continuing on the first (1st) day of
each successive calendar month thereafter until the Loan is paid in full,
Borrower shall pay to Lender all accrued but unpaid interest on this Note.
(c) The entire unpaid principal balance of this Note, together with all
accrued unpaid interest hereon and any other fees or amounts owing hereon, shall
be due and payable in full on the Maturity Date.
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Section 3. Commitment Fee. Borrower shall on the date this Note is
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executed pay to Lender in immediately available funds a commitment fee for the
Loan in the amount of $37,500.00. ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ acknowledge and agree
that such fee is a bona fide commitment fee paid for ▇▇▇▇▇▇'s commitment to
advance the proceeds of the Loan.
Section 4. Representations and Warranties.
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(a) Capacity. The Borrower is a corporation duly organized, validly
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existing and in good standing under the laws of the state of its domicile.
(b) Authorization. The execution, delivery and performance of this
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Note and the other Loan Documents by the Borrower has been duly authorized by
all requisite action.
(c) Binding Obligations. This Note is and the other Loan Documents,
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when executed and delivered to Lender, will be, legal, valid and binding upon
the Borrower, enforceable in accordance with its respective terms, subject only
to principles of equity and laws applicable to creditors generally, including
bankruptcy laws.
(d) No Conflicting Law or Agreement. The execution, delivery and
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performance of this Note and the other Loan Documents by the Borrower does not
constitute a breach of or default under, and will not violate or conflict with,
any provisions of the corporate charter or other constituent documents of the
Borrower.
(e) No Consent Required. The execution, delivery, and performance of
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this Note and the other Loan Documents by the Borrower do not requires the
consent or approval of or the giving of notice to any person except for those
consents which have been duly obtained and arc in full force and effect on the
date hereof.
(f) Further Assurances. The Borrower shall promptly cure any defects
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in the creation, issuance, or delivery of the Loan Documents. The Borrower at
its expense will execute (or cause to be executed) and deliver to Lender upon
request all such other and further documents, agreements, and instruments in
compliance with or accomplishment of the covenants and agreements applicable to
it in the Loan Documents, or to evidence further and to describe more fully any
Collateral intended as security for the obligations or to correct any omissions
in the Loan Documents, or to state more fully the obligations and agreements set
out in any of the Loan Documents, or to perfect, protect, or preserve any
encumbrances created pursuant to any of the Loan Documents, or to make any
recordings, to file any notices, or to obtain any consents, all as may be
reasonably necessary or appropriate in connection therewith.
Section 5. General Provisions.
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Whenever any payment shall be due under this Note on a day which is not a
Business Day, the date on which such payment is due shall be extended to the
next succeeding Business Day.
All principal, interest and other sums payable under this Note shall be
paid, not later than 2:00 p.m. (Eastern Standard Time) on the day when due, in
New York, New York, in immediately available funds in lawful money of the United
States of America via wire transfer to the account set forth on the annexed wire
instructions. Any payment under this Note or under any other Loan Document
other than in the required amount in good, unrestricted U.S. funds immediately
available to the holder hereof shall not, regardless of any receipt or credit
issued therefor, constitute payment until the required amount is actually
received by the holder hereof in such funds and shall be made and accepted
subject to the condition that any check or draft may be handled for collection
in accordance with the practice of the collecting bank or banks.
Borrower shall be entitled to prepay this Note in whole or in part at any
time without premium or penalty. All payments made as scheduled on this Note,
and any prepayments on this Note (except as provided in Section 12 of the
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Pledge Agreement), shall be applied, to the extent thereof, first to accrued but
unpaid interest and the balance to unpaid principal.
The occurrence of any one of the following shall be an "Event of Default":
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(a) Any principal, interest or other amount of money due under this Note is
not paid in full when due, regardless of how such amount may have become due; or
(b) The making of any representation or warranty by Borrower or any of the
Subsidiary Pledgors (under and as defined in the Pledge Agreement) in the Loan
Documents that was false or incorrect in any material respect when made, which
results in a material adverse effect on Borrower and its Subsidiaries taken as a
whole; or
(c) Borrower or any Subsidiary Pledgor shall default in the due performance
or observance by it of any term, covenant or agreement in this Note or the
Pledge Agreement, and such default shall continue unremedied for a period of ten
(10) days after written notice from Lender thereof to Borrower and the failure
to perform will result in a material adverse effect on the Borrower and its
Subsidiaries taken as a whole.
Any Event of Default under this Note shall constitute an Event of Default under
the Pledge Agreement and any other Loan Document. Upon the occurrence of an
Event of Default, the holder hereof shall have the right, at its option, to
declare the unpaid principal balance and all accrued unpaid interest on this
Note at once due and payable (and upon such declaration, the same shall be at
once due and payable), to foreclose any liens and security interests securing
payment hereof and to exercise any of its other rights, powers and remedies
under this Note, under any other Loan Document, or at law or in equity.
Neither the failure by the holder hereof to exercise, nor delay by the
holder hereof in exercising, the right to accelerate the maturity of this Note
or any other right, power or remedy upon any default shall be construed as a
waiver of such default or as a waiver of the right to exercise any such right,
power or remedy at any time. No single or partial exercise by the holder hereof
of any right, power or remedy shall exhaust the same or shall preclude any other
or further exercise thereof, and every such right, power or remedy may be
exercised at any time and from time to time. All rights and remedies provided
for in this Note and in any other Loan Document are cumulative of each other and
of any and all other rights and remedies existing at law or in equity, and the
holder hereof shall, in addition to the rights and remedies provided herein or
in any other Loan Document, be entitled to avail itself of all such other rights
and remedies as may now or hereafter exist at law or in equity for the
collection of the indebtedness owing hereunder, and the resort to any right or
remedy provided for hereunder or under any such other Loan Document or provided
for by law or in equity shall not prevent the concurrent or subsequent
employment of any other appropriate rights or remedies. Without limiting the
generality of the foregoing provisions, the acceptance by the holder hereof from
time to time of any payment under this Note which is past due or which is less
than the payment in full of all amounts due and payable at the time of such
payment, shall not (i) constitute a waiver of or impair or extinguish the rights
of the holder hereof to accelerate the maturity of this Note or to exercise any
other right, power or remedy at the time or at any subsequent time, or nullify
any prior exercise of any such right, power or remedy, or (ii) constitute a
waiver of the requirement of punctual payment and performance, or a novation in
any respect.
If the holder of this Note retains an attorney in connection with any
default or at maturity or to collect, enforce or defend this Note or any other
Loan Document in any lawsuit or in any probate, reorganization, bankruptcy or
other proceeding, or if Borrower sues the holder in connection with this Note or
any other Loan Document and does not prevail, then Borrower agrees to pay to
holder, in addition to principal and interest, all reasonable costs and expenses
incurred by such holder in trying to collect this Note or in any such suit or
proceeding, including reasonable attorneys' fees.
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Borrower and any other party hereafter liable for the payment of this Note
in whole or in part, hereby severally (i) waive demand, presentment for payment,
notice of dishonor and of nonpayment, protest, notice of protest, notice of
intent to accelerate, notice of acceleration and all other notice (except only
for any notices which are specifically required by this Note or any other Loan
Document), filing of suit and diligence in collecting this Note or enforcing any
of the security herefor; (ii) agree to any substitution, subordination, exchange
or release of any such security or the release of any party primarily or
secondarily liable hereon; (iii) agree that the holder hereof shall not be
required first to institute suit or exhaust its remedies hereon against Borrower
or others liable or to become liable hereon or to enforce its rights against
them or any security herefor; and (iv) consent to any extension or postponement
of time of payment of this Note for any period or periods of time and to any
partial payments, before or after maturity, and to any other indulgences with
respect hereto, without notice thereof to any of them.
This Note may not be changed, amended or modified except in a writing
expressly intended for such purpose and executed by the party against whom
enforcement of the change, amendment or modification is sought.
Any notice required or which any party desires to give under this Note
shall be given and be effective as provided in Section 13 of the Pledge
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Agreement.
The proceeds of this Note will be used solely for the purpose set forth in
Section 3 of the debenture restructuring agreement between Borrower and Lender,
dated March 16, 1999.
Time shall be of the essence in this Note with respect to ▇▇▇▇▇▇▇▇'s
obligations hereunder.
AS A MATERIAL INDUCEMENT FOR LENDER TO ENTER INTO THE COMMERCIAL LOAN
TRANSACTION CONTEMPLATED BY THE LOAN DOCUMENTS AND EVIDENCED HEREBY, BORROWER
AND ▇▇▇▇▇▇ ▇▇▇▇▇▇ WAIVE ANY RIGHT TO A TRIAL BY JURY OF ANY OR ALL ISSUES
ARISING IN ANY ACTION, PROCEEDING OR COUNTERCLAIM BETWEEN BORROWER AND ▇▇▇▇▇▇ OR
THEIR RESPECTIVE SUCCESSORS OR ASSIGNS IN RESPECT OF ANY MATTER ARISING OUT OF,
UNDER OR CONNECTED IN ANY MANNER WHATSOEVER WITH THIS NOTE OR THE OTHER LOAN
DOCUMENTS.
THIS NOTE, AND ITS VALIDITY, ENFORCEMENT AND INTERPRETATION, SHALL BE
GOVERNED BY NEW YORK LAW (WITHOUT REGARD TO ANY CONFLICT OF LAWS PRINCIPLES) AND
APPLICABLE UNITED STATES FEDERAL LAW. THE PARTIES AGREE THAT THE LAWS OF THE
STATE OF NEW YORK SHALL GOVERN ANY ISSUE RELATING TO THIS NOTE, ANY OF THE OTHER
RELATED DOCUMENTS AND THE TRANSACTIONS TO WHICH THIS NOTE RELATES, INCLUDING THE
VALIDITY OR ENFORCEABILITY OF THIS NOTE AND ANY OTHER AGREEMENT RELATING TO THE
TRANSACTION OR A PROVISION OF THIS NOTE OR ANY OTHER RELATED AGREEMENT. THE
PARTIES ACKNOWLEDGE AND AGREE THAT THE TRANSACTIONS TO WHICH THIS NOTE RELATES
BEAR A REASONABLE RELATION TO THE STATE OF NEW YORK, AND THAT THE LAWS, OTHER
THAN CONFLICT OF LAWS RULES, OF NEW YORK SHALL GOVERN ANY ISSUE REGARDLESS OF
WHETHER THE APPLICATION OF THAT LAW IS CONTRARY TO A FUNDAMENTAL OR PUBLIC
POLICY OF THE STATE OF TEXAS OR OF ANY OTHER JURISDICTION.
THIS NOTE AND THE OTHER WRITTEN LOAN DOCUMENTS REPRESENT THE FINAL
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AGREEMENT BETWEEN THE PARTIES WITH RESPECT TO THE LOAN AND MAY NOT BE
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CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS
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OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES
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WITH RESPECT TO THE LOAN.
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IN WITNESS WHEREOF, ▇▇▇▇▇▇▇▇ has duly executed this Note as of the date
first above written.
PHYSICIANS RESOURCE GROUP, INC.,
a Delaware corporation
By:
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Name(print):
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Title:
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