1
Exhibit 10.4
PROMISSORY NOTE
$211,232.00 Cambridge, Massachusetts
November 12, 1997
FOR VALUE RECEIVED, the undersigned RAYMOND C. KUBACKI, JR. hereby
promises to pay to the order of PSYCHEMEDICS CORPORATION, a Delaware corporation
(the "Company"), in accordance with and subject to the terms and conditions set
forth herein, on or before November 12, 1998, the principal sum of TWO HUNDRED
ELEVEN THOUSAND TWO HUNDRED THIRTY-TWO DOLLARS AND 00/100 ($211,232.00), or so
much thereof as may from time to time be outstanding, and to pay interest on the
unpaid portion of such principal amount at the rate of 5.94 % PER ANNUM until
such principal amount and all accrued unpaid interest thereon shall have been
paid.
Interest accrued on the unpaid balance of principal from time to time
outstanding shall be payable together with payment of principal. Each payment
made under this Note shall be applied first to interest then due and then to
principal.
This Note is secured by a pledge of certain shares of Common Stock of
the Company owned by the undersigned more particularly described in the Pledge
Agreement dated as of the date hereof (the "Pledge Agreement") by and between
the undersigned and the Company. The Pledge Agreement is intended to provide
additional security to the Company for the obligations of the undersigned under
this Note and is not intended to limit in any way the obligations of the
undersigned under this Note which is a full recourse obligation of the
undersigned.
Page 24 of 28
2
The undersigned, and each endorser and guarantor of this Note, hereby
waives demand, presentment for payment, notice of dishonor and protest, and all
other formalities provided by law. The undersigned hereby agrees that no delay
or omission on the part of the holder hereof in exercising any right or remedy
hereunder shall constitute a waiver of such right or remedy or of any other
right or remedy hereunder.
The occurrence of any of the following events shall constitute an Event
of Default under this Note:
1. Failure of the undersigned to pay when due any payment of
principal or interest herein required, which failure continues
unremedied for thirty (30) days;
2. An Event of Default under the Pledge Agreement;
3. the death, dissolution, liquidation, or termination of
existence of the undersigned or of any endorser or guarantor
hereof; or
4. the making of an assignment for the benefit of creditors by,
the insolvency of, the appointment of a receiver of any part
of the property of, or the filing of a petition in bankruptcy
or the commencement of any proceeding under any bankruptcy or
insolvency law or any law relating to the relief of debtors,
readjustment of indebtedness, reorganization, composition or
extension by or against, the undersigned or any endorser or
guarantor hereof.
Upon the occurrence of an Event of Default under this Note, the
outstanding principal balance hereof, together with any accrued unpaid interest
thereon, and together with all reasonable costs of collection, including
reasonable attorneys' fees, shall become immediately due and payable at the
option of the holder hereof. Failure on the part of the holder hereof to
exercise said option shall not constitute a waiver of the right of the holder
hereof to exercise said option in the event of any subsequent Event of Default.
Payments of principal and interest hereunder shall be made at 1280
Massachusetts Avenue, Suite 200, Cambridge, Massachusetts 02138, or such other
address as the holder hereof may designate from time to time. The undersigned
shall have the right to prepay all or any part of the principal sum secured
hereby at any time or from time to time without premium or penalty.
This Note shall take effect as an instrument under seal and shall be
governed by and construed in accordance with the laws of the Commonwealth of
Massachusetts.
Page 25 of 28
3
EXECUTED as of the date set forth above.
/s/ Raymond C. Kubacki, Jr.
----------------------------------
Raymond C. Kubacki, Jr.
Signed in the presence of:
- ------------------------------
Page 26 of 28