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Exhibit 10-M
$4,000,000 October 28, 1999 Phoenix, Arizona
SECURED NOTE
FOR VALUE RECEIVED, PROCARE LABORATORIES, INC., an Arizona
corporation (the "Company"), hereby promises to pay to the order of CYGNUS
IMAGING, INC., an Arizona corporation, ("Holder"), or Holder's registered
assigns, the principal sum of up to Four Million Dollars ($4,000,000) (the
"Principal Amount"). The Company promises to pay to Holder the aggregate unpaid
Principal Amount of this Note on the Maturity Date (as defined herein); together
with any interest that may accrue on the Principal Amount remaining unpaid after
the Maturity Date as a result of an Event of Default (as defined herein) until
payment in full. The obligations of the Company under this Note are secured by
certain assets of the Company as defined in that certain Security Agreement of
even date between the Company and Holder (the "Security Agreement").
1. Payment on Maturity Date. The date upon which this Note
matures and the Principal Amount becomes due shall be November 10, 1999 (the
"Maturity Date"). The entire unpaid principal balance, all accrued and unpaid
interest, and all other amounts payable hereunder shall be due and payable in
full on the Maturity Date.
2. Payments. All payments of principal and interest due in
respect of this Note shall be made without deduction, defense, set off or
counterclaim, in lawful money of the United States of America, and in same day
funds and delivered to the Holder by wire transfer to a bank account of Holder,
as specified by Holder from time to time.
3.1 Event of Default. If the Company defaults in the payment
of the Principal Amount of the Note on the Maturity Date, which default is not
cured within ten (10) days (the "Event of Default"), the entire unpaid principal
balance and accrued interest payable hereunder shall automatically become
immediately due and payable without presentment, demand or notice of any kind,
all of which are hereby expressly waived by the Company.
3.2 Interest. If the Event of Default shall have occurred,
interest will accrue on the unpaid Principal Amount of this Note at the rate of
twelve and one-half percent (12.5%) per annum, calculated on the basis of the
actual number of days elapsed and on the basis of a 360 day year. Such interest
will continue to accrue at the specified rate until the entire unpaid Principal
Amount has been paid in full. Notwithstanding any provisions of this Note, in no
event shall the amount of interest paid or agreed to be paid by the Company
exceed an amount computed at the highest rate of interest permissible under
applicable law. If, from any circumstances whatsoever, fulfillment of any
provision of this Note at any time performance of such provision shall be due,
shall involve exceeding the interest rate limitation validly prescribed by law
which a court of competent jurisdiction may deem applicable hereto, then, ipso
facto, the obligations to be fulfilled shall be reduced to an amount computed at
the highest rate of interest permissible under applicable law, and if for any
reason whatsoever Holder shall ever receive as interest shall be applied
automatically to the payment of principal of this Note outstanding hereunder
(whether or not then due and payable), without prepayment charge, premium or
penalty, and not to the payment of interest, or shall be refunded to the Company
if such principal and all other obligations of the Company to Holder have been
paid in full.
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3.3 Suits for Enforcement. In case the Event of Default shall
have occurred, unless the Event of Default shall have been waived, the holder of
the Note may proceed to protect and enforce its rights by suit in equity or
action at law, whether for the specific performance of any term contained in the
Note or in any other Note Document or for an injunction against any breach of
any such term or in aid of the exercise of any power granted in the Note or
other Note Document, or may proceed to enforce the performance of any term
contained in the Note or other Note Document (including the payment of the Note)
or to enforce any other legal or equitable right of the holder of the Note, or
may take any one or more of such actions. In the event the Holder brings such an
action against the Company, the Holder shall be entitled to recover from the
Company all fees, costs and expenses of enforcing any right of the Holder under
or with respect to the Note or any Note Document, including without limitation
such reasonable fees and expenses of attorneys, advisors, accountants and expert
witnesses, which shall include, without limitation, all fees, costs and expenses
of appeals.
3.4 Remedies Cumulative. No right, power or remedy conferred
upon the holder of the Note shall be exclusive, and each such right, power or
remedy shall be cumulative and in addition to every other right, power or
remedy, whether conferred hereby or by the Note or now or hereafter available at
law or in equity or by statute or otherwise.
3.5 Remedies Not Waived. No course of dealing between the
Company and the holder of the Note, and no delay in exercising any right, power
or remedy conferred hereby or by the Note or now or hereafter existing at law or
in equity or by statute or otherwise, shall operate as a waiver of or otherwise
prejudice any such right, power or remedy.
3.6 Waiver of Statute of Limitations. To the extent permitted
by law, the Company hereby waives and agrees not to assert or take advantage of
any and all applicable statutes of limitations on its obligations under the Note
or any other Note Document.
4. Prepayment. The Company may prepay its obligation pursuant
to this Note, in whole or in part, at any time by tendering to the Holder the
outstanding principal amount of this Note, together with accrued but unpaid
interest hereon.
5. Recourse. This Note is a non-recourse note and is only
secured by the Collateral, as that term is defined in the Security Agreement.
6. Enforcement. If the Event of Default shall have occurred,
the Holder may proceed to protect and enforce the rights of the Holder by suit
in equity or action at law or the employment of any other available right or
remedy, as the Holder shall deem most effective to protect and enforce any such
rights. The Company promises to pay all costs and expenses, including reasonable
attorneys' fees and expenses, incurred in the collection and enforcement of this
Note. The Company and endorsers of this Note hereby consent to renewals and
extensions of time at or after the maturity hereof, without notice, and hereby
waive diligence, presentment, protest, demand and notice of every kind and, to
the full extent permitted by law, the right to plead any statute of limitations
as a defense to any demand hereunder.
7. Waivers and Amendments. This Note may be amended only with
the written consent of the Holder.
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8. Governing Law. This Note shall be governed by, and
construed and enforced in accordance with, the internal laws (but not the law of
choice of laws) of the State of Arizona, without regard to principles of
conflicts of laws.
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IN WITNESS WHEREOF, the Company has caused this Note to be executed and
delivered by its duly authorized officer, as of the day and year first written
above.
PROCARE LABORATORIES, INC.,
an Arizona corporation
By: /s/ Egidio Cianciosi
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Name: Egidio Cianciosi
Title: President
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