EXHIBIT 10.2
------------
ABLE LABORATORIES, INC.
12% PROMISSORY NOTE
$____________ Needham, Massachusetts
June 14, 2002
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED.
IT MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF
AN EFFECTIVE REGISTRATION STATEMENT UNDER SAID ACT OR AN OPINION OF COUNSEL OR
OTHER EVIDENCE SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT
REQUIRED.
On June 14, 2004 (the "Maturity Date"), for value received, the
undersigned Able Laboratories, Inc., a Delaware corporation (the "Maker"),
promises to pay to the order of ___________________ (the "Payee"), or the
Payee's registered assigns, the principal sum of ____________________ United
States Dollars ($____________) or such lesser amount as shall then equal the
outstanding principal amount hereof, together with interest from the date of
issuance of this Note on the unpaid principal balance at a rate equal to twelve
percent (12%) per annum and computed on the basis of the actual number of days
elapsed and a year of 365 days. This Note is issued pursuant to that certain
Subscription Agreement, dated as of June 5, 2002 (the "Subscription Agreement"),
by and among the Maker, the Payee and the other investors named therein
("Investors"), and each holder of this Note, by his acceptance hereof, agrees to
be bound by the provisions of the Subscription Agreement. The Note is one of a
series of Notes of like tenor issued pursuant to the Subscription Agreement in
the aggregate principal amount of $2,300,000 (the "Notes").
1. INTEREST; PRINCIPAL AND PAYMENT
1.1 INTEREST. The Maker shall pay interest monthly on the outstanding
principal amount of this Note from the date hereof until such principal amount
is paid in full, at the rate of twelve percent (12%) per annum.
1.2 PRINCIPAL. The entire outstanding principal together with interest
accrued on this Note shall be due and payable on the Maturity Date.
1.3 PREPAYMENT. Any portion or all of the outstanding principal may be
prepaid at any time by the Maker by paying an amount equal to the amount to be
prepaid together with interest accrued thereon through the date of prepayment
plus an additional amount equal to the monthly interest payments which would
have accrued thereon pursuant to paragraph 1.1 above from the date of prepayment
to the Maturity Date, but for the prepayment.
2. DEFAULTS AND REMEDIES.
2.1 EVENTS OF DEFAULT. An "Event of Default" shall occur if:
(a) the Maker fails to make any payment of interest on this Note
when the same becomes due and payable and such failure continues for a
period of 30 days;
(b) the Maker defaults in the payment of principal on this Note
when the same becomes due and payable, at maturity or otherwise;
(c) the Maker fails to comply with any of the other agreements
contained in this Note, and the Default continues for the period and
after the notice specified below; and
(d) the Maker pursuant to or within the meaning of any Bankruptcy
Law (as defined below):
(i) commences a voluntary case;
(ii) consents to the entry of an order against it for relief
in an involuntary case; or
(iii) makes a general assignment for the benefit of its
creditors; or
(e) a court of competent jurisdiction enters an order or decree
under Title 11, U.S. Code or any similar federal or state law that:
(i) is for relief against the Maker in an involuntary case;
(ii) appoints a receiver, trustee, assignee, liquidator, or
similar official for all or substantially all of the assets of the
Company; or
(iii) orders a liquidation of the Company;
provided, that, an event specified in subparagraphs (a), (c), (d) or
(e) above shall not constitute a default or an Event of Default until Investors
holding a majority of the then-outstanding aggregate principal amounts of the
Notes so notify the Maker in writing and, in the case of clause (c), the Maker
does not cure the Default within 60 days of such notice. The notice must specify
the Event of Default, demand that it be remedied, and state that it is a notice
of Event of Default.
-2-
2.2 ACCELERATION. If an Event of Default occurs and is continuing, the
holder of this Note may, by notice to the Maker, declare the principal of and
accrued interest on this Note to be immediately due and payable.
2.3 OTHER REMEDIES. If an Event of Default occurs and is continuing,
the holder of this Note may pursue any available remedy to collect the payment
of interest, principal or premium, if any, on this Note or to enforce any
provision of this Note. A delay or omission by the holder of this Note in
exercising any right or remedy accruing upon an Event of Default shall not
impair the right or remedy or constitute a waiver or acquiesce in the Event of
Default. All remedies are cumulative to the extent permitted by law.
3. USURY
It is the intention of the parties hereto to conform strictly to
applicable usury laws now or hereafter in effect. In the event that any of the
terms or provisions of this Note are in conflict with applicable usury law this
SECTION 3 shall govern as to such terms or provisions, and this Note shall in
all other respects remain in full force and effect. If any transaction
contemplated hereby would be usurious, it is agreed that the aggregate of all
consideration which constitutes interest under applicable law that is contracted
for, charged or received under this Note shall under no circumstances exceed the
maximum interest allowed by applicable law. Accordingly, if interest in excess
of the legal maximum is contracted for, charged or received: (i) this Note shall
be automatically reformed so that the effective rate of interest shall be
reduced to the maximum rate of interest permitted by applicable law, for the
purpose of determining said rate and to the extent permitted by applicable law,
all interest contracted for, charged or received shall be amortized, prorated
and spread throughout the full term of this Note so that the effective rate of
interest is uniform throughout the life of this Note, and (ii) any excess of
interest over the maximum amount allowed under applicable law shall be applied
as a credit against the then unpaid principal amount hereof.
4. MISCELLANEOUS
4.1 WAIVERS. The Maker hereby waives presentment, demand for payment,
notice of dishonor, and any and all other notices or demands in connection with
the delivery, acceptance, performance, default or enforcement of this Note, and
hereby consents to any extensions of time, renewals, releases of any party to
this Note, waivers or modifications that may be granted or consented to by the
Payee in respect to the time of payment or any other provision of this Note.
4.2 GOVERNING LAW. This Note shall be governed by and construed in
accordance with the laws (exclusive of the laws governing conflicts of laws) of
The Commonwealth of Massachusetts.
4.3 ASSIGNMENT. Neither this Note nor any of the rights, interests, or
obligations hereunder may be assigned, by operation of law or otherwise, in
whole or in part, by the Payee, without the prior written consent of the Maker;
PROVIDED, HOWEVER, that this Note may be assigned by Xxxxx to its limited
partners or to another limited partnership or limited liability company managed
or controlled, directly or indirectly, by Xxxxxxx Xxxxxx Xxxxxx Inc.; PROVIDED
FURTHER, HOWEVER that any such assignment is made in accordance with all
applicable state and federal securities laws.
-3-
Subject to the preceding sentence, the rights and obligations of the Maker and
the Payee shall be binding upon and benefit the successors, assigns, heirs,
administrators and transferees of the parties.
4.4 AMENDMENTS. Any provision of this Note may be amended, waived, or
modified upon the written consent of the Maker and the Payee.
4.5 NOTICE. Any notice, request or other communication required or
permitted hereunder shall be in writing and shall be deemed to have been duly
given if personally delivered or sent by recognized overnight courier or if
delivered by facsimile at the respective addresses or fax number of the parties
as set forth in the Subscription Agreement or on the register maintained by
Maker. Any party hereto may by notice so given change its address for future
notice hereunder. Notice shall conclusively be deemed to have been given when
received.
ABLE LABORATORIES, INC.
By:
------------------------
Xxxxxxxxx X. Xxxxxxx
President
-4-
