SECURED PROMISSORY NOTE AND SECURITY AGREEMENT
Exhibit 10.1
| April 30, 2009 | $ |
FOR VALUE RECEIVED, Isolagen, Inc. (“ILE”), a Delaware Corporation having its principal office
at 000 Xxxxxxxxx Xxxxxxxxx, Xxxxx, Xxxxxxxxxxxx 00000 (collectively, “Payor”), promises to pay to
, having its principal office at (“Noteholder” or “holder”), (1) the
principal sum of and no cents ($ .00) (the “Principal Sum”) on the
earlier of (x) June 20, 2009 or (y) the date that the Company files for voluntary or involuntary
bankruptcy (the “Maturity Date”) plus (2) interest on the unpaid balance of the Principal Sum from
the date hereof until paid, at the rate of twenty percent (20%) per annum, computed on the basis of
a 360-day year for the actual number of days elapsed, such interest to be payable at the time of
any prepayment pursuant to Section 4 hereof and on the Maturity Date. This promissory note (this
“Note”) shall mature, and the outstanding principal amount and all accrued and unpaid interest
thereon shall be paid, on the Maturity Date. This Note shall be one in a series of Notes issued by
ILE in the aggregate of $500,417 principal amount. The closing of the Notes shall occur on April
30, 2009, on which date Payor shall issue Notes in aggregate amount of $500,417 in consideration
for the payment by wire transfer of such like amount (less certain fees and expenses).
The following is a statement of the rights of the holder of this Note and the conditions to
which this Note is subject, and to which the holder hereof, by the acceptance of this Note, agrees:
1. Application of Payments. All payments made on account of this Note, including
prepayments, shall be applied, first, to the payment of any costs of collection or enforcement then
due hereunder, second, to the payment of accrued and unpaid interest then due hereunder and the
remainder shall be applied to the payment of the Principal Sum. If any payment hereunder becomes
due and payable on a Saturday, Sunday or legal holiday under the laws of the United States of
America, the due date thereof shall be extended to the next business day. All payments on account
of this Note shall be paid in lawful money of the United States of America by check or wire
transfer.
2. Representations and Warranties. Payors hereby represent and warrant to Noteholder
as follows:
(a) Organization and Standing. Payor ILE is a corporation duly organized and
validly existing under, and by virtue of, the laws of the State of Delaware and is in good
standing under such laws. Payor has all requisite power and authority to own and operate
their properties and assets, and to carry on their business as presently conducted, subject
to the disclosures with respect to the current operations of Payor set forth in Payor’s Form
10-K filed April 15, 2009 with Securities and Exchange Commission.
(b) Authority. Payor has all requisite legal and corporate power and authority
to execute and deliver this Note and to carry out and perform its obligations under the
terms of this Note.
(c) Authorization; Validity. All corporate action on the part of Payor
necessary for the issuance of the Note and the performance of Payors’ obligations under this
Note have
been taken. This Note is a valid, binding and enforceable obligation of Payor, except
as limited by applicable bankruptcy, insolvency, reorganization, moratorium or other laws of
general application affecting enforcement of creditors’ rights. The execution and delivery
of this Note and the performance by Payors of its terms do not violate, conflict with or
result in a breach of (i) Payor’s respective charter, certificate of incorporation or
bylaws; (ii) any judgment, order or decree of any court or arbitrator to which Payor is a
party; or (iii) any contract, undertaking, indenture or other agreement or instrument by
which Payor is now bound or to which it is now a party. Excluding certain trade and vendor
payables for which Payor is delinquent, Payor is not in violation or default of any
provision of any contract, indenture or other agreement to which it is a party or by which
it is bound, which violation or default would materially and adversely affect the business
of Payor taken as a whole.
(d) No Liens on Collateral. Except for the liens granted hereunder, Payor has
good and marketable title to the Collateral (as defined in Section 5 below), free and clear
of any liens, security interests and encumbrances, and has the right and power to pledge,
sell, assign and transfer absolute title thereto to Noteholder and no financing statement
covering the Collateral has been filed with respect to any Collateral.
3. Events of Default. If any of the following events (each an “Event of Default”)
shall occur:
(a) if Payor shall default in the payment of any part of the Principal Sum or any other
amounts payable by Payor to the Noteholder under this Note after the same shall have become
due and payable; or
(b) if Payor shall default in the performance of or compliance with any material term
contained herein or in that certain Collateral Rights Agreement entered into in connection
herewith other than the payment of the Principal Sum or other amounts hereunder and such
default shall not have been remedied within five (5) business days after written notice
thereof shall have been given to Payor by the Noteholder; or
(c) if Payors shall default (as principal or guarantor or other surety) in the payment
of any principal of or premium or interest on any indebtedness for borrowed money, excluding
the interest due May 1, 2009 on Payor’s pre-existing $90 million subordinated notes,
then, and in any such event, Noteholder may at any time at its option, automatically and without
notice to Payors, declare this Note to be due and payable, whereupon the same shall forthwith
mature and become due and payable together with interest accrued thereon, without presentment,
demand, protest or notice, all of which are hereby waived by Payors. The default rate of interest
shall be 25% per annum from the date of any Event of Default.
4. Prepayment. This Note may not be prepaid before the Maturity Date except with the
written consent of the Noteholder.
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5. DIP Exchange Right. In the event that the Company receives debtor-in-possession
financing in bankruptcy, the Payee shall have the right to exchange the face amount of this Note,
plus any accrued but unpaid interest, into such debtor-in-possession financing on the same
terms and conditions as the debtor-in-possession financing on a pari passu basis and on a $1 for $1
basis.
6. Opinion. At the closing, ILE shall deliver an opinion of its legal counsel in form
and substance reasonably acceptable to the Payee.
7. Use of Proceeds. The proceeds of the issuance of this Note shall be for the
payment of fees and expenses incurred in connection herewith, ordinary course administrative
expenses, bankruptcy-related expenses and working capital and other general corporate needs.
8. Mandatory Redemption. Upon the occurrence of one of the following events, ILE
shall immediately repay the Notes with a 25% premium on the then outstanding principal plus accrued
but unpaid interest out of 100% of the first proceeds received by ILE in such transactions:
(a) Receipt of proceeds from the sale of any assets of ILE or any of its subsidiaries,
excluding sales in the ordinary course of business by Agera Laboratories, Inc.;
(b) Receipt of the proceeds from any insurance policy held by ILE or any of its
subsidiaries or pursuant to which ILE or any of its subsidiaries are beneficiaries; and
(c) Receipt of proceeds from the sale of any equity of the Company or it subsidiaries
or issuance of any indebtedness of ILE or any of its subsidiaries.
9. Grant of Security Interest; Perfection; Remedies.
(a) As security for the prompt and complete payment and performance in full of the
Secured Obligations (as defined below), Payor hereby grants, assigns, conveys, mortgages,
pledges, hypothecates and transfers to each of the Noteholders a security interest in and
lien on its 57% equity interest in Agera Laboratories, Inc. (the “Collateral”). For
purposes of this Note, “Secured Obligations” shall mean the indebtedness, together with all
interest, fees and other charges, arising under this Note, and including, without
limitation, all costs incurred by Noteholder in enforcing any of its rights or exercising
any of its remedies under this Note (including but not limited to attorneys’ fees and
expenses). For purposes of this Note, “UCC” shall mean the Uniform Commercial Code as in
effect from time to time in the State of New York or, when the context implies or when
necessary for the granting of a security interest in any other jurisdiction, the Uniform
Commercial Code as in effect from time to time in any other applicable jurisdiction.
(b) Payor agrees that the security interest in the Collateral granted to Noteholder
hereunder (i) constitutes and shall continue to constitute a legal, valid and, upon the
filing of a UCC financing statements in the appropriate filing offices, fully perfected,
security interest in the Collateral and (ii) is and shall remain prior and superior to all
liens, encumbrances, rights or claims of all other persons or entities. Within 3 business
days of the date the closing of the transaction, ILE shall deliver to the Agent of the Payee
certificates representing ILE’s equity interests in Agera Laboratories, Inc., including
executed stock powers in blank with medallion guarantee.
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(c) Payor shall be liable for all expenses incurred by Noteholder in connection with
enforcing the terms of this Note, including, without limitation, the fees and expenses of
any attorneys employed by Noteholder.
10. Miscellaneous.
(a) This Note shall be governed by and construed in accordance with the internal laws
of the State of New York, without giving effect to any principles of conflicts of law
thereunder.
(b) PAYOR HEREBY IRREVOCABLY SUBMITS TO THE EXCLUSIVE JURISDICTION OF ANY FEDERAL OR
STATE COURT IN NEW YORK COUNTY, STATE OF NEW WORK, IN ANY ACTION, SUIT OR PROCEEDING BROUGHT
AGAINST IT AND RELATED TO OR IN CONNECTION WITH THIS NOTE. TO THE EXTENT PERMITTED BY
APPLICABLE LAW, PAYORS HEREBY WAIVE AND AGREE NOT TO ASSERT BY WAY OF MOTION, AS A DEFENSE
OR OTHERWISE, IN ANY SUCH SUIT, ACTION OR PROCEEDING ANY CLAIM THAT THE SUIT, ACTION OR
PROCEEDING IS BROUGHT IN AN INCONVENIENT FORUM, THAT THE VENUE OF THE SUIT, ACTION OR
PROCEEDING IS IMPROPER, OR THAT MATTERS RELATED TO THIS NOTE MAY NOT BE LITIGATED IN OR BY
SUCH COURTS.
(c) PAYOR HEREBY IRREVOCABLY WAIVES, AND AGREES TO CAUSE THEIR AFFILIATES TO WAIVE, ALL
RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR
RELATING TO THIS NOTE.
(d) Any term of this Note may be amended and the observance of any term of this Note
may be waived (either generally or in a particular instance and either retroactively or
prospectively), only with the written consent of Payor and Noteholder.
(e) This Note and all rights hereunder are transferable in whole or in part by the
Noteholder to any person or entity. Payor may not assign its obligations hereunder without
the prior written consent of the Noteholder. Subject to the foregoing, all of the terms and
provisions of this Note shall be binding upon and inure to the benefit of, and be
enforceable by, the holder of this Note and Payor and their respective heirs, legal
representatives, successors and permitted assigns.
(f) In case any provision contained herein (or part thereof) shall for any reason be
held to be invalid, illegal, or unenforceable in any respect, such invalidity, illegality,
or unenforceability shall not affect any other provision (or the remaining part of the
affected provision) hereof, but this Note shall be construed as if such invalid, illegal, or
unenforceable provision (or part thereof) had never been contained herein, but only to the
extent that such provision is invalid, illegal, or unenforceable.
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(g) In case of a default in the payment of the Principal Sum or any interest on, or the
breach of, this Note, Payor will pay to the holder thereof such further amount as shall be
sufficient to cover the costs and expenses of collection, including (without
limitation) reasonable attorneys’ fees, expenses and disbursements. No course of dealing
and no delay on the part of the holder of this Note in exercising any right, power or remedy
shall operate as a waiver thereof or otherwise prejudice such holder’s rights, powers and
remedies. No right, power or remedy conferred hereby upon any holder hereof shall be
exclusive of any other right, power or remedy referred to herein or now or hereafter
available at law, in equity, by statute or otherwise.
(h) Payor hereby expressly waives presentment, demand, notice, protest and all other
demands and notices in connection with the delivery, acceptance, performance, default or
enforcement of this Note.
(i) This Note is subject to the express condition that at no time shall Payor be
obligated or required to pay interest hereunder at a rate which could subject the holder
hereof to either civil or criminal liability as a result of being in excess of the maximum
rate which Payor is permitted by law to contract or agree to pay. If, by the terms of this
Note, Payor is at any time required or obligated to pay interest at a rate in excess of such
maximum rate, the rate of interest hereunder shall be deemed to be immediately reduced to
such maximum rate and interest payable hereunder shall be computed at such maximum rate and
the portion of all prior interest payments in excess of such maximum rate shall be applied
and shall be deemed to have been payments in reduction of the Principal Sum of this Note.
(j) All notices, demands and other communications which are required or which may be
given under the provisions of this Note shall be in writing and shall be deemed effectively
given when delivered personally or one (1) business day after being sent by nationally
recognized courier or three (3) business days after being sent by certified mail, postage
prepaid, return receipt requested or when sent by receipted telecopy transmission (provided
a copy of any such telecopy notice is sent simultaneously by any other means permitted
herein) to Noteholder at , or to such other address or telecopy number as
the holder of this Note or Payor may hereinafter designate in writing as its address or
telecopy number for this purpose, in the manner herein provided for giving notice.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, Payor has caused this Note to be signed in its name as of the date first
above written.
| ISOLAGEN, INC. |
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| By: | ||||
| Name: | ||||
| Title: | ||||
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