EXHIBIT 10.29
PROMISSORY NOTE
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$30,658.23 August 20, 1997
For value received, Xxxxxxx X. Xxxxxx (the "Executive") and Xxxxxxxx X.
Xxxxxx, with an address at 000 Xxxxxxxx Xxx, Xxxxxxxxxxxx, XX (each, a "Maker"
and collectively, the "Makers"), jointly and severally, hereby promise to pay to
the order of ViroPharma Incorporated, a Delaware corporation with an address at
00 Xxxxx Xxxxxx Xxxxxxx, Xxxxxxx XX 00000 (the "Payee"), the principal sum of
Thirty Thousand Six Hundred Fifty Eight Dollars and Twenty Three Cents
($30,658.23) (the "Original Principal Amount"), or such lesser amount as
determined in accordance with Sections 1(c) and 3(a) below, in lawful money of
the United States of America, together with interest thereon, subject to the
terms and conditions as hereinafter provided. The principal sum outstanding
from time to time hereunder shall bear interest at an annual rate of 6.29% per
annum (subject to Sections 3(d) and 6 below). The interest due hereunder shall
be calculated on the basis of a 365-day year by multiplying the interest rate in
effect hereunder by a fraction, the numerator of which is the actual number of
days the principal sum is outstanding and the denominator of which is 365.
1. Purpose; Use of Proceeds; Principal Adjustment.
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(a) This Promissory Note (this "Note") is executed by the Makers in
connection with the Makers' relocation ("Relocation") required by Executive's
employment by Payee, the reasonable costs and expenses that the Makers' have
incurred in connection therewith, and Payee's agreement, subject to the
conditions set forth below, to reimburse Payee for such reasonable costs and
expenses in an amount not to exceed the Original Principal Amount first set
forth above. This Note, by itself, is not intended by Payee to preclude
Executive from participation in future compensation increases that may, in the
sole discretion of Payee, be made available by Payee to its officers and
employees from time to time.
(b) The Makers shall use all of the proceeds of this Note to defray the
reasonable costs and expenses realized or incurred by the Makers in connection
with the Relocation, including but not limited to any loss on the sale of the
Makers' former residence; moving, closing and other costs incident to the
Makers' purchase of a new residence; and a down payment on such new residence
(collectively, the "Relocation Costs"), but for no other purpose.
(c) The Original Principal Amount first set forth above reflects the
Makers' estimate of the Relocation Costs previously provided by them to Payee
(the "Estimated Relocation Costs"). The Makers shall provide Payee, within five
(5) business days after the closing of the purchase of the Makers' new residence
(the "Closing"), with an itemized list of the Relocation Costs actually incurred
by the Makers (the "Actual Relocation Costs"), together with a copy of the
settlement sheet prepared at the Closing and copies of such other invoices and
receipts that are available to document the Actual Relocation Costs. The Actual
Relocation Costs shall be subject to the approval of Payee, such approval not to
be unreasonably withheld by Payee (the Actual Relocation Costs so approved, the
"Approved Relocation Costs"). If the Approved Relocation Costs are less than
the Estimated Relocation Costs, then (i) the Makers shall remit to Payee, within
five (5) business days after Payee's request, the difference between the
Estimated Relocation Costs minus the Approved Relocation Costs (the "Excess"),
and (ii) upon Payee's receipt of the Excess, the principal amount due under this
Note automatically shall be adjusted to reflect the Approved Relocation Costs
(the "Adjusted Principal Amount"). In no event shall Payee have any additional
obligation to the Makers if the Actual Relocation Costs or the Approved
Relocation Costs exceed the Estimated Relocation Costs.
2. Insurance. Within a reasonable time after the date hereof, Payee may
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attempt to acquire an insurance policy on the life of Executive (the "Insurance
Policy") that names Payee as the loss payee. Executive shall cooperate with
Payee in obtaining the Insurance Policy, and Executive warrants that he has no
knowledge of any facts concerning his physical health or otherwise that would
discourage a reputable insurance company from insuring the life of Executive at
reasonable rates and based on generally accepted insurance underwriting
standards.
3. Principal Reduction and Payment.
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(a) Subject to the terms and conditions set forth below, on each one (1)
year anniversary of this date of this Note, commencing on the first anniversary
of the date of this Note and continuing through and including the fourth
anniversary of the date of this Note (such four year period, the "Forgiveness
Term"), the principal amount of this Note shall be reduced by the product of
twenty-five percent (25%) times the lesser of the Original Principal Amount set
forth in the first paragraph of this Note or the Adjusted Principal Amount
determined in accordance with Section 1(c) above (each, a "Forgiven
Installment"), and on and after each such anniversary date the Makers shall have
no further obligation to pay Payee, and Maker shall be released from all
liability to Payee with respect to, the applicable Forgiven Installment plus all
accrued and unpaid interest with respect thereto.
(b) If Executive's employment by Payee is terminated prior to the
expiration of the Forgiveness Term as a result of the resignation of Executive,
then from and after the date that Executive notifies Payee of Executive's
intention to resign (the "Resignation Date"), Section 3(a) shall be of no
further force or effect, and upon the earlier of the date that Executive
commences employment with any third party or the expiration of the ninety (90)
day period after the Resignation Date, the Makers shall pay to Payee the
principal amount of this Note and all accrued and unpaid interest with respect
thereto that is then outstanding and has not been previously forgiven pursuant
to Section 3(a) (the "Outstanding Balance").
(c) If Executive's employment by Payee is terminated prior to the
expiration of the Forgiveness Term due to an event that is covered by the
Insurance Policy, then the entire Outstanding Balance shall be deemed forgiven
and the proceeds of the Policy shall be Payee's sole recourse in respect of the
Outstanding Balance.
(d) If Executive's employment by Payee is terminated prior to the
expiration of the Forgiveness Term for any reason other than that described in
Sections 3(b) or (c) above, including but not limited to the termination of
Executive's employment by Payee for any reason or no reason, then from and after
the effective date of such termination (the "Termination Date"), Section 3(a)
shall be of no further force or effect, and the Makers shall thereafter be
liable for the prompt payment of the Outstanding Balance; provided that, from
and after the Termination Date, the interest rate of this Note shall be adjusted
to reflect the lowest applicable Federal rate then in effect for promissory
notes having a repayment period equal to the "Payment Term" of this Note, as
defined below. Principal and interest payments in respect of the Outstanding
Balance shall be due and payable in consecutive monthly installments in the
amounts to be set forth in the amortization schedule described in Section
3(d)(ii) below (each, a "Monthly Payment"), on the first day of each month
commencing with the month immediately following the Termination Date and
continuing until the expiration of the Payment Term, at Payee's address set
forth above or at such other address as Payee shall designate in writing to
either Maker. Each Monthly Payment first shall be applied against accrued
interest amounts then outstanding, and the balance of such Monthly Payment shall
then be applied against the principal amount of this Note.
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(i) The "Payment Term" shall be the number of months, commencing
with the Termination Date, listed below opposite the applicable period in which
the Termination Date occurs:
Termination Date Payment Period
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Before the first anniversary of the date of this Note 72 Months
After the first anniversary of the date of this Note, but 54 Months
before the second anniversary of this Note
After the second anniversary of the date of this Note, but 36 Months
before the third anniversary of this Note
After the third anniversary of the date of this Note, but 18 Months
before the fourth anniversary of this Note
(ii) Within a reasonable time after the Termination Date, but in any
event prior to the date that the first Monthly Payment is due and payable
hereunder, Payee shall provide Maker with an amortization schedule for the
Outstanding Balance that reflects the Monthly Payments due for the Payment Term,
and such amortization schedule shall be a supplement to this Note.
4. Prepayment; Set-Off. This Note may be prepaid in full or in part at any
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time without premium or penalty. The amounts due from the Makers hereunder
shall not be subject to set-off by the Makers.
5. Default and Acceleration. The entire principal balance that has not been
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reduced or paid pursuant to Section 3 above, and all accrued interest thereon,
shall become immediately due and payable upon demand by Payee if one or more of
the following events shall have happened at any time after the Termination Date
(each an "Event of Default") and shall be continuing at the time of such demand
(except that no demand shall be necessary in the case of Subsection (b) below):
(a) Default shall have been made in the payment of any principal or
interest when and as due hereunder;
(b) Either Maker shall: (i) file in any court pursuant a petition in
bankruptcy or insolvency or for reorganization or for the appointment of a
receiver or trustee of either of their assets; (ii) propose a written agreement
for the composition or extension of the debts of either of them; (iii) be served
with an involuntary petition against either of them, filed in any insolvency
proceeding, and such petition shall not be dismissed within sixty (60) days
after the filing thereof; or (iv) make an assignment for the benefit of
creditors; or
(c) The entry of a material financial judgment against either Maker, or
the issuing of any attachment or garnishment against any property of either
Maker.
6. Default Rate. Notwithstanding anything to the contrary in this Note, upon
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an Event of Default, or if Executive resigns his employment with Payee and the
Outstanding Balance is not paid within the period required by Section 3(b)
above, interest on the unpaid balance of this Note shall be deemed to have
accrued at a rate equal to the lesser of eighteen percent (18%) per annum or the
highest rate otherwise allowed by law (the "Default Rate").
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7. Presentment, Costs, Etc. The Makers hereby waives presentment, protest,
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notice of protest, and notice of dishonor. Subject to the provisions herein,
each Maker covenants that if an Event of Default occurs, he or she will, to the
extent that he or she it may lawfully promise so to do, pay to Payee such
further amount as shall be sufficient to cover the cost and expense of
collection or any other costs incurred by Payee in the exercise of any of its
rights, remedies or powers under this Note, including reasonable compensation to
the attorneys and accountants of Payee, and any amount thereof not paid promptly
following demand therefor shall be added to the principal sum then due hereunder
and shall bear interest at the Default Rate from the date of such demand until
the date that such amounts are paid in full.
8. Remedies Cumulative. No right or remedy conferred upon or reserved to
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Payee hereunder, or now or hereafter existing at law or in equity or by statute
or other legislative enactment, is intended to be exclusive of any other right
or remedy, and each and every such right or remedy shall be cumulative and
concurrent, and shall be in addition to every other such right or remedy, and
may be pursued singly, concurrently, successively or otherwise, at the sole
discretion of Payee, and shall not be exhausted by any one exercise thereof but
may be exercised as often as occasion therefor shall occur.
9. Waiver. Each Maker agrees that Payee may release, compromise, forbear
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with respect to, waive, suspend, extend or renew any of the terms hereunder (and
each Maker hereby waives any notice of any of the foregoing), and any action
taken by Payee pursuant to the foregoing shall in no way be construed as a
waiver or release of any right or remedy of Payee, or of any Event of Default,
or of any liability or obligation of either Maker, under this Note.
10. Successors and Assigns. This Note may be freely assigned by Payee. The
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obligations of the Makers under this Note may not be assigned without the prior
written consent of Payee. This Note inures to the benefit of Payee and binds
the Makers, and their respective successors, heirs and permitted assigns.
11. Notices. All notices required to be given to any of the parties hereunder
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shall be in writing and shall be deemed to have been sufficiently given for all
purposes when presented personally to such party or sent by certified or
registered mail, or any national overnight delivery service, to such party at
its address first set forth above, or to such other address for which notice is
duly given to the other party. Such notice shall be deemed to be given when
received if delivered personally, the next business day after the date sent if
sent by national overnight delivery service, or two (2) business days after the
date mailed if mailed by certified or registered mail. Whenever the giving of
notice is required, the giving of such notice may be waived in writing by the
party entitled to receive such notice.
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12. Governing Law. This Note shall be governed as to its validity,
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interpretation, and effect by the laws of the Commonwealth of Pennsylvania,
notwithstanding the conflict-of-law doctrines of Pennsylvania or any other
jurisdiction. Any legal proceeding arising out of or relating to this Note
shall be heard in the Xxxxxxx County, Pennsylvania Court or in the United States
District Court for the Eastern District of Pennsylvania, and each Maker hereby
consents to the personal and exclusive jurisdiction of such courts and hereby
waives any objection that such Maker may have to the laying of venue of any such
proceeding and any claim or defense of inconvenient forum.
IN WITNESS WHEREOF, the undersigned has executed this Note on the date
first above written.
/s/ Xxxxxxx X. Xxxxxx
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Xxxxxxx X. Xxxxxx
/s/ Xxxxxxxx X. Xxxxxx
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Xxxxxxxx X. Xxxxxx
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