Exhibit 10.74
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SECURED PROMISSORY NOTE
$1,000,000 As of April 18, 2000
Washington, D.C.
FOR VALUE RECEIVED, SYNBIOTICS CORPORATION, a Delaware corporation
(the "Maker"), promises to pay to the order of KIRKEGAARD & PERRY LABORATORIES,
INC., a Maryland corporation (the "Holder"), at, or at such other place as the
Holder may from time to time designate, the aggregate principal amount of
$1,000,000. Said principal shall be due and payable as follows:
Amount Due Payment Due Date
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$800,000 Upon the earlier of (i) the completion of the
transfer of the manufacturing of the Products
as defined in the Transitional Manufacturing
and Supply Agreement of even date herewith, by
and between Holder and Maker (the
"Manufacturing Agreement") from Holder to
Maker in accordance with the terms of the
Manufacturing Agreement or (ii) April 18, 2001.
$200,000 Upon the earlier of (i) the completion of the
transfer of the manufacturing of the Products
as defined in the Manufacturing Agreement from
Holder to Maker in accordance with the terms
of the Manufacturing Agreement or (ii) July
18, 2001.
All payments hereunder shall be made in lawful money of the United States of
America.
The unpaid principal amount of this Note may be prepaid in whole or in
part at any time or times without premium or penalty. Each prepayment shall be
applied first to the payment of all accrued but unpaid interest and other
amounts accrued hereunder, if any, on the date of any such prepayment, and the
balance of any such prepayment shall be applied to installments of principal
payable hereunder in the order of maturity.
This Note evidences the obligation of the Maker to the Holder pursuant
to Section 1.4 of the Asset Purchase Agreement, dated as of April 18, 2000,
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between Maker and Holder (the "Agreement"), and is secured by a Security
Agreement of even date herewith, between Maker and Holder (the "Security
Agreement"), encumbering certain assets of Maker. The Holder is entitled to the
benefits of the Security Agreement, and reference is made to the Security
Agreement for a description of the collateral and the rights and remedies of the
Holder
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thereunder. Neither the reference to the Agreement nor any provision thereof
shall affect or impair the absolute and unconditional obligation of the Maker to
pay the principal amount hereof when due.
The occurrence of any of the following shall constitute an event of
default ("Event of Default") hereunder: (i) failure to pay, when due, the
principal or any other sum payable hereunder, and continuance of such failure
for five (5) business days after the date on which such principal, or other sum
is due (whether upon maturity hereof, upon any installment payment day, upon
acceleration, or otherwise); (ii) an event of default by Maker under the
Security Agreement; (iii) an event of default by Maker under the Manufacturing
Agreement; or (iv) an event of default by Maker under the Royalty Agreement.
Upon the occurrence of any Event of Default hereunder, the entire principal
amount hereof, and all accrued and unpaid interest thereon, shall be
accelerated, and shall be immediately due and payable, at the option of the
Holder, without demand or notice with respect to an Event of Default specified
in clause (i) of this Agreement, and in addition thereto, and not in
substitution therefor, the Holder shall be entitled to exercise any one or more
of the rights and remedies provided by applicable law. Failure to exercise said
option or to pursue such other remedies shall not constitute a waiver of such
option or such other remedies or of the right to exercise any of the same in the
event of any subsequent Event of Default hereunder.
In the event that the principal amount hereof, or any other sum due
hereunder, is not paid when due and payable, the whole of the unpaid principal
amount evidenced hereby and all unpaid sums due hereunder shall, from the date
when such payment was due and payable until the date of payment in full thereof,
bear interest at the interest rate announced by The Wall Street Journal as the
"prime" lending rate charged by major financial institutions (the "Prime Rate")
plus two percent (2%), which rate shall commence, without notice, immediately
upon the date when said payment was due and payable. Should The Wall Street
Journal cease publishing the Prime Rate, an alternate index of similar nature
will be selected by the Maker and the Holder.
The Maker promises to pay all reasonable costs and expenses (including
without limitation reasonable attorneys' fees and disbursements) incurred in
connection with the collection hereof, and to perform each and every obligation
to be performed by the Maker under this Note.
Any payment on this Note coming due on a Saturday, a Sunday, or a day
which is a legal holiday in the place at which a payment is to be made hereunder
shall be made on the next succeeding day which is a business day in such place,
and any such extension of the time of payment shall be included in the
computation of interest hereunder.
Each Obligor (which term shall include the Maker and all makers,
sureties, guarantors, endorsers, and other persons assuming obligations pursuant
to this Note) under this Note hereby waives presentment, protest, demand, notice
of dishonor, and all other notices, and all defenses and pleas on the grounds of
any extension or extensions of the time of payments or the due dates of this
Note, in whole or in part, before or after maturity, with or without notice. No
renewal or extension of this Note, no release or surrender of any collateral
given as security for this Note, no release of any Obligor, and no delay in
enforcement of this Note or in
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exercising any right or power hereunder, shall affect the liability of any
Obligor. The pleading of any statute of limitations as a defense to any demand
against Obligor is expressly waived.
No single or partial exercise by the Holder of any right hereunder
shall preclude any other or further exercise thereof or the exercise of any
other rights. No delay or omission on the part of the Holder in exercising any
right hereunder shall operate as a waiver of such right or of any other right
under this Note.
This Note and all agreements between the Maker and the Holder relating
hereto are hereby expressly limited so that in no contingency or event
whatsoever, whether by reason of acceleration or otherwise, shall the amount
paid or agreed to be paid to the Holder for the use, forbearance or detention of
money hereunder exceed the maximum amount permissible under applicable law. If
from any circumstance whatsoever fulfillment of any provision hereof, at the
time performance of such provision shall be due, shall involve transcending the
limit of validity prescribed by law, then, ipso facto, the obligation to be
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fulfilled shall be reduced to the limit of such validity, and if from any such
circumstance the Holder shall ever receive interest, or anything which might be
deemed interest under applicable law, which would exceed the highest lawful
rate, such amount which would be excessive interest shall be applied to the
reduction of the principal amount owing on account of this Note and not to the
payment of interest, or if such excessive interest exceeds the unpaid balance of
principal of this Note, such excess shall be refunded to the Maker. All sums
paid or agreed to be paid to the Holder for the use, forbearance or detention of
the indebtedness of the Maker to the Holder shall, to the extent permitted by
applicable law, be deemed to be amortized, prorated, allocated and spread
throughout the full term of such indebtedness until payment in full so that the
actual rate of interest on account of such indebtedness is uniform throughout
the term thereof. The terms and provisions of this paragraph shall control and
supersede every other provision of this Note and all other agreements between
the Maker and the Holder.
Whenever used herein, the words "Maker" and "Holder" and "Obligor"
shall be deemed to include their respective successors and assigns.
This Note shall be governed by and construed under and in accordance
with the laws of the State of Maryland (but not including the choice of law
rules thereof).
IN WITNESS WHEREOF, the undersigned has caused this Note to be duly
executed and delivered in its name and on its behalf on its behalf as of the day
and year first hereinabove set forth.
SYNBIOTICS CORPORATION
ATTEST:
/s/ Paul Rosinack By: /s/ Kenneth M. Cohen
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Name: Kenneth M. Cohen
Title: President and CEO
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