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SUBORDINATED PROMISSORY NOTE
$1,406,679.59 March 20, 1996
Chicago, Illinois
This Subordinated Promissory Note amends and restates that
Subordinated Promissory Note dated May 3, 1995 between the parties hereto.
FOR VALUE RECEIVED, BIOSTAR, INC., a Delaware corporation, with its
principal place of business located at 6655 Lookout road, Boulder, Colorado
80301 ("Borrower"), hereby promises to pay to the order of COMDISCO, INC., a
Delaware corporation, having its principal place of business at 6111 North
River Road, Rosemont, Illinois 60018 ("Lender"), in lawful money of the United
States of America and in immediately available funds, the principal sum of One
Million Four Hundred Six Thousand Six Hundred Seventy-Nine and 59/100 Dollars
($1,406,679.59) (the "Loan"), together with accrued and unpaid interest thereon
payable on the dates and in the manner set forth below.
This Subordinated Promissory Note is the note referred to in, and is
executed and delivered in connection with, that certain Subordinated Security
Agreement dated as of May 3, 1995 and the Amendment to Subordinated Security
Agreement dated as of March 20, 1996, by and between Borrower and Lender (as
the same may from time to time be amended, modified or supplemented in
accordance with its terms, the "Security Agreement"). All terms defined in the
Security Agreement shall have the same definitions when used herein, unless
otherwise defined herein.
1. LOAN REPAYMENT. The outstanding principal amount of the Loan,
together with interest thereon, shall be due and payable in advance on the
first day of each month in accordance with the payment schedule set forth
below. Payments shall consist of one (1) monthly installment of principal and
interest in the amount of $85,450.00 on April 1, 1996; followed by eight (8)
equal monthly installments of interest only in the amount of $15,673.87 each,
commencing May 1, 1996 and on the first day of each successive month
thereafter, to and including December 1, 1996; followed by sixteen (16) equal
monthly installments of principal and interest in the amount of $62,267.00
each, commencing January 1, 1997 and on the first day of each successive month
thereafter, to and including April 1, 1998; followed by one (1) final
installment of deferred principal and interest thereon in the amount of
$535,236.00 on May 1, 1998.
2. INTEREST RATE. Interest on the outstanding principal hereof
from the date hereof until maturity, whether by acceleration or otherwise, or a
default (as hereinafter defined), shall be payable at the rate of fourteen
percent (14.00%) per annum or the maximum rate permissible by law (which under
the laws of the State of Illinois shall be deemed to be the laws relating to
permissible rates of interest on commercial loans), whichever is less (the
"Applicable Rate"). In the event that the amount of interest contracted for,
charged or received from Borrower or otherwise in connection with the Loan
evidenced hereby exceeds the Applicable Rate, then at Lender's option, such
amount shall either be applied as a credit against any then-unpaid amounts
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hereof or refunded to Borrower and the effective rate of interest will be
automatically reduced to the Applicable Rate. Upon the occurrence of an event
of default, this Note shall thereafter bear interest at the rate of nineteen
percent (19%) per annum or the maximum rate permissible by law (which under the
laws of the State of Illinois shall be deemed to be the laws relating to
permissible rates of interest on commercial loans), whichever is less. In any
event, interest payable hereunder shall be computed on the basis of a 360-day
year and twelve 30-day months.
3. PLACE OF PAYMENT. All amounts payable hereunder shall be
payable at the office of Lender, P.O. Box 91744, Chicago, Illinois 60693,
unless another place of payment shall be specified in writing by Lender.
4. APPLICATION OF PAYMENTS. Payment on this Note shall be applied
first to costs of Lender incurred in collection of this Note, if any, then to
pay accrued interest, and thereafter to the outstanding principal balance
hereof.
5. PREPAYMENT. Borrower may prepay the entire balance of
principal owed under this Note in whole or in part without paying any
prepayment penalty and without paying a premium or interest charge on the
amount of prepaid principal.
6. SECURED NOTE. This Note is secured by the Collateral
identified and described as security therefor in the Security Agreement
executed by and delivered by Borrower. Borrower shall not, directly or
indirectly, suffer or permit to be created or to remain, and shall promptly
discharge, any lien on or in the Collateral, or in any portion thereof, except
as permitted pursuant to the Security Agreement. In addition, Borrower shall
not suffer any other matter whereby an interest of Lender under the Security
Agreement in the Collateral or in any lien pursuant to the Security Agreement
or any part of the foregoing might be impaired, except as permitted pursuant to
such Security Agreement.
7. SUBORDINATED NOTE. THIS NOTE IS EXPRESSLY SUBJECT TO THE TERMS
OF THAT CERTAIN SUBORDINATION AGREEMENT BY AND BETWEEN LENDER AND BORROWER
DATED MAY 3, 1995. IN THE EVENT OF ANY CONTRADICTION OR INCONSISTENCY BETWEEN
THIS NOTE AND THE SUBORDINATION AGREEMENT, THE TERMS OF THE SUBORDINATION
AGREEMENT SHALL CONTROL.
8. DEFAULT. Any of the following event shall constitute a default
under this Note: (a) Borrower's failure to pay timely any of the principal
amount due under this Note or any accrued interest or other amounts due under
this Note on the date the same becomes due and payable, by maturity,
acceleration or otherwise, or within five (5) calendar days thereafter, or (b)
the occurrence of an Event of Default under the Security Agreement or the
Master Lease Agreement or any other written agreement between Lender and
Borrower. Upon the occurrence of a default hereunder, all unpaid principal,
accrued interest and other amounts owing hereunder shall, at the option of
Lender, be immediate collectible by Lender pursuant to applicable law.
9. WAIVER. Borrower waives, to the extent permitted by law, (a)
presentment and demand for payment, notice of dishonor, protest and notice of
protest and any other notice as permitted under the UCC or any applicable law;
(b) the right, if any, to the benefit of, or to direct
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the application of, any of the Collateral until all indebtedness of the
Borrower to Lender, however arising, has been paid; (c) all defenses and rights
to discharge under the UCC and all other suretyship defenses or rights to
discharge; (d) Borrower shall pay to Lender, when incurred, all costs of
collection and enforcement or protection of Lender's security interest in the
Collateral including, without limitation, reasonable attorneys' fees, costs and
other expenses.
The right to plead any and all statutes of limitations as a defense to
any demands hereunder is hereby waived to the full extent permitted by law; and
(e) such other waivers as are set forth in the Security Agreement.
10. GOVERNING LAW. This Note shall be governed by, and construed
and enforced in accordance with, the laws of the State of Illinois, excluding
conflict of laws principles that would cause the application of laws of any
other jurisdiction.
11. SUCCESSORS AND ASSIGNS. The provisions of this Note shall
inure to the benefit of and be binding on Borrower and any of its permitted
assigns, and shall extend to any holder hereof. Lender may assign its rights
hereunder without prior notice to Borrower.
12. AMENDMENT. The terms and conditions of this Note may not be
amended, waived or modified except in a writing signed by an authorized agent
of Lender which writing expressly states that the writing constitutes an
amendment, waiver or modification of this Note.
13. WAIVER OF JURY TRIAL. Borrower and Lender acknowledge that the
right to trial by jury is a constitutional one, but that it may be waived. Each
party, after consulting (or having had the opportunity to consult) with counsel
of their choice, knowingly and voluntarily, and for their mutual benefit,
waives any right to trial by jury in the event of litigation regarding the
performance of enforcement of, or in any way related to, this Note.
BORROWER: BIOSTAR, INC.
By: /s/ Teresa W. Ayers
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Printed Name: Teresa W. Ayers
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Title: President/COO
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