EXHIBIT 10.6
PROMISSORY NOTE
$ 300,000.00 Date: October 11, 1996
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FOR THE VALUE RECEIVED, the undersigned, NICHE PHARMACEUTICALS,
INC. a Delaware Corporation ("Borrower") hereby unconditionally
promise to pay, to the order of Mercantile Bank, a Kansas state
bank, ("Bank")
ON OCTOBER 11, 1997, THE PRINCIPAL AMOUNT OF THREE HUNDRED THOUSAND AND 00/100
DOLLARS. XXXXXXXX FURTHER PROMISES TO PAY TO THE ORDER OF BANK INTEREST ON THE
PRINCIPAL AMOUNT FROM TIME TO TIME OUTSTANDING HEREUNDER AT THE RATE OF 1.0%
OVER THE "PRIME RATE", ADJUSTABLE DAILY. INTEREST SHALL BE PAYABLE IN
CONSECUTIVE QUARTERLY INSTALLMENTS COMMENCING ON JANUARY 11, 1997 AND DUE ON THE
11TH DAY OF EACH QUARTER THEREAFTER.
After maturity, interest shall be payable on demand on the outstanding
principal balance at a rate equal to 2.0% per annum in excess of the otherwise
payable rate. In addition, if Borrower fails to make any payment of any
principal or interest on this Note when due, Borrower promises to pay to the
order of Bank on demand a late fee in an amount not to exceed the greater of $
25.00 or 5.0 % of each late payment. All payments received by Bank shall be
applied first to the payment of billed and unpaid late fees and the costs and
expenses hereinafter described, next to billed and unpaid interest hereon, and
the remainder to principal. For purposes of this Note the term "PRIME rate"
shall be the interest rate announced from time to time by Bank as its "PRIME
rate" on commercial loans (which rate shall fluctuate as and when said PRIME
rate shall change). Interest shall be computed on the basis of a year consisting
of 360 days and paid for actual days elapsed.
All required payments shall be made in immediately available funds in
lawful money of the United States of America at the Office of Bank situated at
0000 X. 00xx Xxxxx, Xxxxxxx Xxxx, Xxxxxx 00000 or at such other place as the
holder may designate in writing. The acceptance by the holder hereof of any
principal or interest due after the date it is due as described above shall not
be held to establish a custom or waive any rights of the holder to enforce
prompt payment of any other principal or interest payments or otherwise.
Bank may record the date and amount of all loans and all payments
hereunder in the records it maintains. Bank's books and records showing the
account between Bank and Borrower shall be conclusive evidence of the amounts
outstanding under this Note.
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Borrower has the right to prepay this Note in whole or in part at any
time without penalty or premium, provided: (1) all billed and unpaid interest
shall accompany such prepayment; (2) there is not a default under any of the
terms of this Note at the time of prepayment; and (3) all prepayments shall be
credited and applied to the installments of principal in inverse order of their
stated maturity.
Borrower agrees to pay to Bank, upon demand by Bank, all reasonable
costs, charges and expenses (including, but not limited to, the reasonable fees
and expenses of any attorney [including, but not limited to, any attorney
employed by Bank or any affiliate of Bank] retained by Bank, to the extent
permitted by applicable law) incurred by Bank in connection with (a) the
collection or enforcement of Borrower's liabilities and obligations under this
Note, (b) the collection and enforcement of Bank's right in and to any
"Collateral" (hereinafter defined), and/or (c) any litigation, contest, dispute
or other proceeding (whether instituted by Bank, Borrower or any other person or
entity) in any way relating to Xxxxxxxx's liabilities and obligations hereunder
and/or to the Collateral. Borrower's obligations, as aforesaid, shall survive
payment of this Note. For purpose of this Note, the term "affiliate of Bank"
shall mean Mercantile Bancorporation Inc. ("MBI") and any banking or non-banking
subsidiary of MBI, whether owned or controlled by controlling or under common
control with MBI directly or indirectly through any subsidiary.
Presentment, demand for payment, protest and notice of dishonor and of
protest are hereby severally waived by all parties hereto, whether as make,
endorser or guarantor to Bank.
TO INDUCE BANK TO ACCEPT THIS AGREEMENT AND ALL OTHER AGREEMENTS
RELATED HERETO, BORROWER HEREBY IRREVOCABLY AGREES THAT, SUBJECT TO BANK'S SOLE
AND ABSOLUTE ELECTION, ALL ACTIONS OR PROCEEDINGS IN ANY WAY, MANNER OR RESPECT
ARISING OUT OF OR FROM OR RELATED TO THIS AGREEMENT OR ANY AGREEMENT RELATED
HERETO OR ANY COLLATERAL HELD BY BANK IN CONNECTION HEREWITH OR THEREWITH SHALL
BE LITIGATED ONLY IN COURTS HAVING SUITS WITHIN THE STATE OF KANSAS OR THE STATE
OF MISSOURI. BORROWER HEREBY CONSENTS AND SUBMITS TO THE JURISDICTION OF ANY
LOCAL, STATE OR FEDERAL COURT LOCATED WITHIN EITHER OF SAID JURISDICTIONS.
BORROWER HEREBY WAIVES ANY RIGHT IT MAY HAVE TO TRANSFER OR CHANGE THE VENUE OF
ANY LITIGATION BROUGHT IN ACCORDANCE WITH THIS SECTION. BORROWER AND BANK
IRREVOCABLY WAIVE THE RIGHT TO TRIAL BY JURY WITH RESPECT TO ANY ACTION IN WHICH
BORROWER AND BANK ARE PARTIES.
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The liabilities and obligations or Borrower under this Note shall be
secured by (a) THIS NOTE IS UNSECURED . and (b) any and all balances, credits,
deposits or monies of or in the name of Borrower now or hereafter maintained
with, and any and all other property of or in name of Borrower now or hereafter
in the possession of Bank; and (c) any and all of Bank's security interests,
liens or encumbrances heretofore, now and/or from time to time hereafter granted
by Xxxxxxxx and/or any endorser of guarantor to Bank, including, but not limited
to, the security interests granted pursuant to the N/A (collectively the
"Collateral").
Borrower hereby grants to Bank a security interest in the Collateral
for the payment of all liabilities and obligations of Borrower under this Note,
and all renewals and extensions thereof and for the payment of all other present
and future obligations to Bank regardless of whether currently contemplated or
agreed upon. In addition to and not in limitation of all rights of offset that
Bank or any other holder of this Note may have under applicable law, Bank or
such other holder of this Note shall have the right to appropriate and apply to
the payment of this Note any and all balances, credits, deposits, accounts or
monies of the Borrower then or thereafter with Bank or other holder.
If any of the following events ("Events of Default") shall occur": (a)
the Obligor (which term shall mean the undersigned and each other party
primarily or secondarily liable to Bank on this Note) shall fail to make any
payment on this Note as and when the same shall become due and payable; (b) the
Obligor shall fail to perform or observe any terms, conditions, warranties,
representations, undertakings, covenants and provisions to be performed,
discharged, kept, observed or compiled with under any agreement, instrument,
document, loan agreement, security agreement, mortgage deeds or trust or any
other written matter heretofore, now and/or from time to time hereafter executed
by or on behalf of the Obligor and delivered to Bank; (c) any Obligor shall (i)
apply for or consent to the appointment of a receiver, trustee, custodian or
liquidator of itself for all or a substantial part of its assets, (ii) be
unable, or admit in writing its inability, to pay its debts as they mature,
(iii) make a general assignment for the benefit of creditors, (iv) be
adjudicated a bankrupt or insolvent, (v) file a voluntary petition in
bankruptcy, or seek an arrangement with creditors, or take advantage of any
insolvency law or file an answer admitting the material allegations of a
petition filed against itself in any bankruptcy, reorganization or insolvency
proceedings or (vi) take any action to effectuate any of the foregoing; (d) an
injunction, attachment or
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judgment shall be issued against any of the property or assets of any Obligor;
(e) any Obligor shall become insolvent in either the equity or bankruptcy sense
of the term; (f) any obligor shall have a judgment entered against it by a court
having jurisdiction in the premises, and such judgment shall not be appealed in
good faith or satisfied by such Obligor within thirty (30) days after the entry
of such judgment; (g) any Obligor shall fail (and such failure shall not have
been cured or waived) to perform or observe any term, provision or condition of,
or any other default or event of default shall occur under, any agreement,
document or instrument evidencing or securing any outstanding indebtedness of
such Obligor for borrowed money (other than this Note), if the effect of such
failure or default is to cause or permit such indebtedness to be declared to be
due and payable or otherwise accelerated, or to be required to be prepaid (other
than by a regularly scheduled required prepayment), prior to the stated maturity
thereof; (h) a default or event of default shall occur under or within the
meaning of any agreement, document or instrument evidencing, securing,
guaranteeing the payment of or otherwise relating to this note or any such
agreement, document or instrument shall cease to be in full force and effect;
(i) any guaranty of this Note shall be declared null and void by a court of
competent jurisdiction, or if the validity or enforceability thereof shall be
contested or denied by any party thereto, or if any party thereto shall deny
that it has any further liability or obligation thereunder or if any party
thereto shall fail to comply with or observe any of the terms, provisions or
conditions contained in said guaranty; (j) any material change in the ownership
or management of any Obligor, occasioned by death, termination, or resignation;
(k) any Obligor, without the prior written consent of Bank, becomes a party to
any reorganization, merger or consolidation; (l) death of any Obligor who is a
natural person or of any partner of any Obligor which is a partnership; (m)
dissolution, termination of existence of operations, merger, consolidation, or
transfer of a substantial part of the property of any Obligor which is a
corporation or partnership; (n) sale, transfer, assignment or other conveyance
of any real property which is collateral for this Note without the prior written
consent of Bank; (o) any Obligor shall be declared by Bank to be in default on,
or pursuant to the terms of, (i) any other present or future obligation to Bank,
including, but not limited to, any loan, line of credit, revolving credit,
guaranty or letter of credit reimbursement obligation, or (ii) any other present
or future agreement purporting to convey to Bank a lien or encumbrance upon, or
a security interest in, any of the property or assets of such Obligor, or (p)
Bank shall determine that the prospects for repayment of this Note have been
adversely affected or Bank otherwise in good faith believes the ability of the
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undersigned to repay this Note is in doubt; then, and in each such event, the
holder of this Note may, at its option, declare the entire outstanding principal
amount of and all billed/due and unpaid interest on this Note and all other
amounts payable by the Borrower hereunder to be immediately due and payable,
whereupon all of the unpaid principal amount, billed/due interest and all such
other amounts shall become and be immediately due and payable without
presentment, demand, protest or further notice of any kind, all of which are
hereby expressly waived by the Borrower, and the holder of this Note may
exercise any and all other rights and remedies which it may have under any other
agreement, document or instrument evidencing, securing or guaranteeing the
payment of this Note or under applicable law.
Notwithstanding anything contained herein to the contrary, in no event
shall interest accrue under this Note at a rate in excess of the highest rate
permitted by applicable law, and if interest (including, but not limited to, any
charge or fee held to be interest by a court of competent jurisdiction) in
excess thereof shall be paid, then the excess shall constitute a payment of, and
be applied to, the principal balance hereof then outstanding, or at Bank's
election, shall be repaid to the undersigned.
To the extent that Bank receives any payment on account of Borrower's
liabilities and any such payment(s) or any part thereof is subsequently
invalidated, declared to be fraudulent or preferential, set aside, subordinated
and/or required to be repaid to a trustee, receiver or any other party under any
bankruptcy act, state or Federal law, common law or equitable cause, then, to
the extent of such payment(s) received, Borrower's liabilities or part thereof
intended to be satisfied and any and all liens, security interests, mortgages
and/or other encumbrances upon or pertaining to any Collateral of Borrower and
theretofore created and/or existing in favor of Bank as security for the payment
of such Borrower's liabilities shall be revived and continue in full force and
effect, as if such payment(s) had not been received by Bank and applied on
account of Borrower's liabilities.
The undersigned warrant(s) and represent(s) that all loan proceeds of the
indebtedness evidenced hereby are to be used exclusively for business purposes
and not for personal, family, or household purposes of any of the undersigned.
All obligations of the BORROWER (if more that one) hereunder are joint and
several. This Note shall be governed by and construed in accordance with the
laws of the State of Kansas.
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BORROWER
NICHE PHARMACEUTICALS, INC.
BY: Xxxxxxx X. Xxxxxxx
TITLE: President / CEO
/s/ Xxxxxxx X. Xxxxxxx
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MAILING ADDRESS
P.O. Box 449, 200 N. Oak
ROANOKE, TX 76262
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