RECOURSE SECURED PROMISSORY NOTE
--------------------------------
$865,394 April 24, 2000
FOR VALUE RECEIVED, the undersigned, XXXXX X. XXXXXX (the
"Borrower"), hereby promises to pay to the order of BIOSPECIFICS TECHNOLOGIES
CORP., a Delaware corporation (the "Company"), the principal sum of EIGHT
HUNDRED SIXTY FIVE THOUSAND THREE HUNDRED NINETY FOUR Dollars ($865,394) (the
"Principal Amount") in lawful money of the United States of America, payable on
January 31, 2001, and to pay simple interest at the rate of 9% per annum (the
"Interest Rate") (computed on the basis of a 365 or 366 day year, as the case
may be) on the unpaid principal amount from and after the date of each of the
borrowings as set forth on Schedule A. At the time of payment of any principal
amount, the interest accrued on that amount shall be payable at that time (with
such interest being credited prior to the principal).
This Note is intended to be evidence of the borrowing of the
Principal Amount by the Borrower from the Company (the "Loan"). Payment of the
principal of and interest on this Note is secured pursuant to the terms of a
Stock Pledge Agreement, dated as of even date herewith, between the Borrower and
the Company (the "Pledge Agreement"), reference to which is made for a
description of the collateral provided thereby and the rights of the Company and
the holder of this Note in respect of such collateral.
This Note is subject to the following further terms and
conditions:
1. Payment and Prepayment. All payments and prepayments of
principal of and interest on this Note shall be made to the Company or its
order, or to the legal holder of this Note or such holder's order, in lawful
money of the United States of America at the principal offices of the Company
(or at such other place as the holder hereof shall notify the Borrower in
writing). The Borrower may, at his option, prepay this Note in whole or in part
at any time or from time to time without penalty or premium. Any prepayments of
any portion of the principal amount of this Note shall be accompanied by payment
of all interest accrued but unpaid on the principal amount being prepaid. Upon
final payment of principal of and interest on this Note it shall be surrendered
for cancellation.
1
2. Events of Default. Upon the occurrence of any of the
following events ("Events of Default"):
(a) If the Borrower shall default in the payment of
any principal or interest due under this Note or any under the
Pledge Agreement when the same shall become due and payable,
whether at maturity or by acceleration or otherwise; or
(b) If the Borrower shall file a voluntary petition
in bankruptcy, or shall be adjudicated a bankrupt or
insolvent, or shall file any petition or answer seeking any
reorganization, arrangement, composition, readjustment,
liquidation, dissolution or similar relief under the present
or any future federal bankruptcy act or other applicable
federal, state or other statute, law or regulation, or shall
file any answer admitting the material allegation of a
petition filed against the Borrower in such proceeding, or
shall seek or consent to or acquiesce in the appointment of
any trustee, receiver or liquidator of the Borrower of all or
any substantial part of the properties of the Borrower, or the
Borrower shall commence the winding up or the dissolution or
liquidation of the Borrower; or
(c) If the Borrower should breach any of the
covenants, representations, warranties, terms or conditions
contained in this Note or in the Pledge Agreement and, if such
breach is of a type that is curable, such breach is not cured
within fifteen (15) days after the Borrower becomes aware of
such breach;
then, and in any such event, (A) if such event is an Event of Default
specified in paragraph (b) above with respect to the Borrower, automatically the
Note shall immediately terminate and the entire principal amount of this Note
outstanding and any accrued and unpaid interest hereunder shall become due and
payable without presentment, demand, protest, notice of dishonor and all other
demands and notices of any kind, all of which are hereby expressly waived, and
(B) if such event is any Event of Default specified in paragraphs (a) and (c),
the holder of this Note may declare, by notice of default given to the Borrower,
the entire principal amount of this Note to be forthwith due and payable,
whereupon the entire principal amount of this Note outstanding and any accrued
and unpaid interest hereunder shall become due and payable without presentment,
demand, protest, notice of dishonor and all other demands and notices of any
kind, all of which are hereby expressly waived. Upon the occurrence of any Event
of Default, the accrued and unpaid interest hereunder shall thereafter bear the
same rate of interest as on the principal hereunder, but in no event shall such
interest be charged which would violate any applicable usury law.
2
3. Representations of Borrower. The Borrower hereby represents
and warrants to the Borrower as follows: (a) the Borrower has the power and
authority to make, deliver and perform this Note; (b) this Note has been duly
executed and delivered by the Borrower and constitutes a legal, valid and
binding obligation of the Borrower, enforceable against the Borrower in
accordance with its terms; and (c) the execution, delivery and performance by
the Borrower of this Note (i) will not violate any law or regulation, or any
order or decree of any court or government instrumentality, (ii) will not
conflict with or result in the breach of, or constitute a default under, any
indenture, mortgage, deed of trust, lease, agreement, or any other instrument to
which the Borrower is a party or any of its assets or properties is bound, and
(iii) does not require the consent or approval of any governmental body, agency,
authority or any other Person which consent has not been obtained.
4. Costs and Expenses. The Borrower agrees to pay all
reasonable out-of-pocket costs and expenses incurred by the Borrower in
connection with the enforcement of any of the Borrower's rights and remedies
under this Note.
5. Remedies. No failure or delay on the part of the holder of
this Note in exercising any of its rights, powers or privileges hereunder shall
operate as a waiver thereof, nor shall a single or partial exercise thereof
preclude any other or further exercise of any right, power or privilege. The
remedies provided herein are cumulative and are not exclusive of any remedies
provided by law.
6. Waiver. The Borrower hereby waives presentment, demand for
payment, notice of default, dishonor or nonpayment, protest and notice of
protest and all other demands and notices in connection with the delivery,
acceptance, performance or enforcement of this Note.
7. Assignment. This Note shall be binding upon and inure to
the benefit of the parties hereto and their respective successors.
8. Governing Law. THIS NOTE SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
IN WITNESS WHEREOF, this Note has been duly executed and
delivered by the Borrower on the date first above written.
/s/ Xxxxx X. Xxxxxx
---------------------------
Xxxxx X. Xxxxxx
3
SCHEDULE A
---------------------------- -------------------------------
Date of borrowing Amount
---------------------------- -------------------------------
2/17/99 $5,451
---------------------------- -------------------------------
3/1/99 3,298
---------------------------- -------------------------------
3/9/99 30,000
---------------------------- -------------------------------
3/10/99 12,918
---------------------------- -------------------------------
3/30/99 75,000
---------------------------- -------------------------------
4/1/99 70,000
---------------------------- -------------------------------
5/1/99 4,196
---------------------------- -------------------------------
5/4/99 30,000
---------------------------- -------------------------------
5/27/99 10,273
---------------------------- -------------------------------
6/11/99 12,044
---------------------------- -------------------------------
6/15/99 50,771
---------------------------- -------------------------------
6/30/99 20,000
---------------------------- -------------------------------
7/14/99 50,000
---------------------------- -------------------------------
7/23/99 2,802
---------------------------- -------------------------------
8/26/99 45,000
---------------------------- -------------------------------
8/31/99 30,000
---------------------------- -------------------------------
9/10/99 13,782
---------------------------- -------------------------------
9/24/99 45,000
---------------------------- -------------------------------
9/14/99 45,000
---------------------------- -------------------------------
10/1/99 5,974
---------------------------- -------------------------------
10/12/99 15,000
---------------------------- -------------------------------
10/21/99 3,839
---------------------------- -------------------------------
10/29/99 25,000
---------------------------- -------------------------------
12/2/99 35,000
---------------------------- -------------------------------
12/14/99 45,000
---------------------------- -------------------------------
1/16/00 8,646
---------------------------- -------------------------------
2/16/00 50,000
---------------------------- -------------------------------
3/17/00 56,400
---------------------------- -------------------------------
3/28/00 15,000
---------------------------- -------------------------------
4/10/00 50,000
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Totals $865,394
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