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EXHIBIT 10.18
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE "ACT"), OR THE SECURITIES LAWS OF ANY STATE, IN RELIANCE UPON EXEMPTIONS
FROM THE REGISTRATION REQUIREMENTS OF THE ACT AND SUCH LAWS. THIS NOTE IS
BEING ACQUIRED BY THE PAYEE HEREOF FOR INVESTMENT ONLY AND FOR SAID PAYEE'S OWN
ACCOUNT, AND NEITHER THIS NOTE NOR ANY INTEREST HEREIN MAY BE OFFERED FOR SALE,
PLEDGED, HYPOTHECATED, SOLD, ASSIGNED OR TRANSFERRED AT ANY TIME EXCEPT IN
COMPLIANCE WITH THE ACT, ANY APPLICABLE STATE SECURITIES LAWS, AND ANY OTHER
LAWS WHICH ARE APPLICABLE TO SUCH TRANSACTION, AND IN COMPLIANCE WITH THE TERMS
AND CONDITIONS OF THIS NOTE.
THIS NOTE IS THE SENIOR SECURED NOTE REFERRED TO IN, AND IS ENTITLED TO THE
BENEFITS OF, THE SECURED LOAN AGREEMENT, THE SECURITY AGREEMENT, THE COLLATERAL
ASSIGNMENT OF LICENSE AGREEMENT AND THE PLEDGE AGREEMENT OF EVEN DATE HEREWITH
BETWEEN MAKER AND HOLDER (TOGETHER WITH THIS NOTE, THE "LOAN DOCUMENTS").
SENIOR SECURED NOTE
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$2,000,000.00 December 6, 0000
Xxxxxxx, Xxxxxxx
FOR VALUE RECEIVED, the undersigned, ZYNAXIS, INC., a Pennsylvania
corporation ("Maker"), hereby promises to pay to the order of CYTRX
CORPORATION, a Delaware corporation (hereafter, together with any holder
hereof, called "Holder"), the principal sum of TWO MILLION DOLLARS
($2,000,000.00), or such lesser amount as may be the aggregate principal amount
of loans outstanding hereunder, together with interest thereon as described
below.
The Holder will provide to the undersigned monthly a statement of loans made,
charges incurred and payments made pursuant to this Note and the outstanding
amount of loans hereunder; provided, however, the failure of the Holder to
provide such statement shall in no way affect its rights or the undersigned's
obligations hereunder.
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1. PAYMENT OF PRINCIPAL, INTEREST AND EXPENSES.
(a) Principal. The aggregate principal balance of all
loans outstanding hereunder shall be due and payable at 5:00 p.m. on the first
to occur of: (i) the day on which the closing of the transactions contemplated
by that certain Agreement and Plan of Merger and Contribution dated the date
hereof by and between Maker and Holder (the "Contribution Agreement") occurs,
(ii) the day on which the Contribution Agreement is terminated; or (iii) such
other time as may be agreed to in writing by Maker and Holder.
(b) Interest.
(i) Interest Rate. Interest shall initially
accrue on the outstanding principal balance hereunder at a rate per annum equal
to the rate announced by NationsBank, N.A. (South) as its "prime rate" of
interest (the "Prime Rate") on the date hereof plus 200 basis points, and shall
continue accruing at such fixed rate until December 1, 1996, whereupon the
interest rate shall be adjusted to equal the Prime Rate in effect on such day
plus 200 basis points. Thereafter, the interest rate shall similarly be
adjusted on the first business day of every month to equal the Prime Rate in
effect as of such day plus 200 basis points. Interest shall be computed on the
basis of a 360-day year for the actual number of days elapsed. Holder shall
notify Maker of the Prime Rate within a reasonable time after the announcement
thereof (A) on the date hereof and (B) on any and all dates on which the
interest rate shall be adjusted in accordance with this paragraph 1(b)(i).
(ii) Calculation of Interest. Interest shall be
simple interest.
(iii) Time of Payments. Accrued interest shall be
due and payable at such time as the principal amount hereof becomes due
pursuant to paragraph 1(a) above.
(iv) Interest on Past Due Amounts. Interest shall
accrue on any amount past due hereunder at a rate equal to two percent (2.0%)
per annum in excess of the interest rate otherwise payable hereunder. All such
interest shall be due and payable on demand.
(v) Compliance with Usury Laws. In no event
shall the amount of interest due or payable under this Note exceed the maximum
rate of interest allowed by applicable law and, in the event any such payment
is inadvertently paid by the undersigned or inadvertently received by Holder,
then such excess sum shall be credited as a payment of principal, unless the
undersigned shall notify Holder in writing that the undersigned elects to have
such excess sum returned to it forthwith. It is the express intent of the
parties hereto that the undersigned not pay and Holder not receive, directly or
indirectly, in any manner whatsoever, interest in excess of that which may be
lawfully paid by the undersigned under applicable law.
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THE UNDERSIGNED, AND HOLDER BY ACCEPTING THIS NOTE, EACH AGREE AND STIPULATE
THAT THE ONLY CHARGE IMPOSED UPON THE UNDERSIGNED FOR THE USE OF MONEY IN
CONNECTION WITH THIS NOTE IS AND SHALL BE THE INTEREST DESCRIBED ABOVE, AND
FURTHER AGREE AND STIPULATE THAT ALL OTHER CHARGES IMPOSED BY HOLDER ON THE
UNDERSIGNED IN CONNECTION WITH THIS NOTE, INCLUDING WITHOUT LIMITATION, ALL
DEFAULT CHARGES, LATE CHARGES, PREPAYMENT FEES AND ATTORNEYS' FEES, ARE CHARGES
MADE TO COMPENSATE HOLDER FOR UNDERWRITING OR ADMINISTRATIVE SERVICES AND COSTS
OR LOSSES PERFORMED OR INCURRED, AND TO BE PERFORMED OR INCURRED, BY HOLDER IN
CONNECTION WITH THIS NOTE AND SHALL UNDER NO CIRCUMSTANCES BE DEEMED TO BE
CHARGES FOR THE USE OF MONEY PURSUANT TO OFFICIAL CODE OF GEORGIA ANNOTATED
SECTION 7-4-2 OR SECTION 7-4-18. ALL CHARGES OTHER THAN CHARGES FOR THE USE OF
MONEY SHALL BE FULLY EARNED AND NONREFUNDABLE WHEN DUE.
(c) Expenses. The undersigned shall pay all expenses
incurred by Holder in the collection of this Note, including, without
limitation, the reasonable fees and disbursements of counsel to Holder, if this
Note is collected by or through an attorney-at-law.
(d) General. All payments of principal, interest and
expenses shall be in lawful money of the United States of America, and made
according to such wire transfer instructions or other delivery method as Holder
may designate to Maker in writing from time to time.
2. RIGHT OF SET-OFF. In addition to any rights now or
hereafter granted under applicable law and not by way of limitation of any such
rights, the undersigned hereby authorizes Holder, at any time or from time to
time, without notice to the undersigned or to any other person or entity, any
such notice being hereby expressly waived, to set-off and to appropriate and to
apply any and all indebtedness at any time held or owing by Holder or any
affiliate of Holder, to or for the credit or the account of the undersigned,
against and on account of all obligations of the undersigned owing hereunder or
otherwise to Holder, irrespective of whether or not Holder shall have declared
any or all of such obligations of the undersigned to be due and payable, and
although such obligations shall be contingent or unmatured.
3. WAIVER. Maker, and its successors and assigns, waive
presentment for payment, demand, protest and notice of demand, dishonor, notice
of dishonor, protest and nonpayment. In any action on this Note, Holder or its
assignee need not produce or file the original of this Note, but need only file
a photocopy of this Note certified by Holder or such assignee to be a true and
correct copy of this Note in all material respects.
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THE UNDERSIGNED, AND HOLDER BY ACCEPTING THIS NOTE, EACH ACKNOWLEDGES
THAT ANY DISPUTE OR CONTROVERSY BETWEEN THE UNDERSIGNED AND HOLDER WOULD BE
BASED ON DIFFICULT AND COMPLEX ISSUES OF LAW AND FACT. ACCORDINGLY, HOLDER AND
THE UNDERSIGNED HEREBY WAIVE TRIAL BY JURY IN ANY ACTION OR PROCEEDING OF ANY
KIND OR NATURE IN ANY COURT OR TRIBUNAL IN WHICH AN ACTION MAY BE COMMENCED BY
OR AGAINST THE UNDERSIGNED ARISING OUT OF THIS NOTE OR BY REASON OF ANY OTHER
CAUSE OR DISPUTE WHATSOEVER BETWEEN THE UNDERSIGNED AND HOLDER OF ANY KIND OR
NATURE.
THE UNDERSIGNED, AND HOLDER BY ACCEPTING THIS NOTE, HEREBY AGREE THAT
THE FEDERAL COURT OF THE NORTHERN DISTRICT OF GEORGIA OR, AT THE OPTION OF
HOLDER, ANY STATE COURT LOCATED IN XXXXXX COUNTY, GEORGIA SHALL HAVE
JURISDICTION TO HEAR AND DETERMINE ANY CLAIMS OR DISPUTES BETWEEN THE
UNDERSIGNED AND HOLDER PERTAINING DIRECTLY OR INDIRECTLY TO THIS NOTE OR ANY
OTHER CAUSE OR DISPUTE WHATSOEVER BETWEEN THE UNDERSIGNED AND HOLDER OF ANY
KIND OR NATURE. THE UNDERSIGNED EXPRESSLY SUBMITS AND CONSENTS IN ADVANCE TO
SUCH JURISDICTION IN ANY ACTION OR PROCEEDING COMMENCED IN SUCH COURTS, HEREBY
WAIVING PERSONAL SERVICE OF THE SUMMONS AND COMPLAINT, OR OTHER PROCESS OR
PAPERS ISSUED THEREIN, AND AGREEING THAT SERVICE OF SUCH SUMMONS AND COMPLAINT,
OR OTHER PROCESS OR PAPERS MAY BE MADE BY REGISTERED OR CERTIFIED MAIL, RETURN
RECEIPT REQUESTED ADDRESSED TO THE UNDERSIGNED AT THE ADDRESS OF THE
UNDERSIGNED SET FORTH BELOW ITS SIGNATURE HERETO. SHOULD THE UNDERSIGNED FAIL
TO APPEAR OR ANSWER ANY SUMMONS, COMPLAINT, PROCESS OR PAPERS SO SERVED WITHIN
THIRTY DAYS AFTER THE MAILING THEREOF, IT SHALL BE DEEMED IN DEFAULT AND AN
ORDER AND/OR JUDGMENT MAY BE ENTERED AGAINST IT AS PRAYED FOR IN SUCH SUMMONS,
COMPLAINT, PROCESS OR PAPERS. THE CHOICE OF FORUM SET FORTH IN THIS SECTION
SHALL NOT BE DEEMED TO PRECLUDE THE BRINGING OF ANY ACTION BY HOLDER OR THE
ENFORCEMENT BY HOLDER OF ANY JUDGMENT OBTAINED IN SUCH FORUM IN ANY OTHER
APPROPRIATE JURISDICTION. FURTHER, THE UNDERSIGNED HEREBY WAIVES THE RIGHT TO
ASSERT THE DEFENSE OF FORUM NON CONVENIENS AND THE RIGHT TO CHALLENGE THE VENUE
OF ANY COURT PROCEEDING.
THE UNDERSIGNED AGREES THAT ALL OF ITS PAYMENT OBLIGATIONS HEREUNDER
SHALL BE ABSOLUTE, UNCONDITIONAL AND, FOR THE PURPOSES OF MAKING PAYMENTS
HEREUNDER, THE UNDERSIGNED HEREBY WAIVES ANY RIGHT TO ASSERT ANY SETOFF,
COUNTERCLAIM OR CROSS-CLAIM.
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FURTHER, THE UNDERSIGNED WAIVES (I) ANY NOTICE OR HEARING PRIOR TO THE
TAKING POSSESSION OR CONTROL BY HOLDER OF ANY COLLATERAL GIVEN BY THE
UNDERSIGNED, (II) THE POSTING OF ANY BOND OR SECURITY WHICH MIGHT BE REQUIRED
BY ANY COURT PRIOR TO ALLOWING HOLDER TO EXERCISE ANY OF ITS RIGHTS OR
REMEDIES, INCLUDING THE ISSUANCE OF AN IMMEDIATE WRIT OF POSSESSION AND (III)
THE BENEFIT OF ALL VALUATION, APPRAISEMENT AND EXEMPTION OF LAWS.
THE FOREGOING WAIVERS HAVE BEEN MADE WITH THE ADVICE OF COUNSEL AND
WITH A FULL UNDERSTANDING OF THE LEGAL CONSEQUENCES THEREOF.
4. GOVERNING LAW. This Note shall be construed, interpreted and
enforced in accordance with the laws of the State of Georgia, without regard to
the law of the conflicts of laws of such State.
5. RETURN OF NOTE. This Note shall be returned to Maker upon the
payment in full of all amounts owed under this Note.
6. DEFAULT. Each of the following events shall constitute an
"Event of Default" under this Note: (i) Maker shall fail to pay any principal,
interest or other amount due hereunder when due, or Maker shall in any way fail
to comply with the other terms, covenants or conditions contained in this Note
or the other Loan Documents; (ii) any written representation or warranty made
at any time by Maker to the Holder shall prove to have been incorrect or
misleading in any material respect when made; (iii) a default, event of
default, or event which with the giving of notice or the passage of time or
both would constitute a default or event of default, shall have occurred under
any other document, instrument, contract or agreement now or hereafter entered
into by Maker and Holder or executed by Maker in favor of the Holder, or Maker
shall in any material way fail to comply with the terms, covenants or
conditions contained in any such document, instrument, contract or agreement;
(iv) a default, event of default, or event which with the giving of notice or
the passage of time or both would constitute a default or event of default,
shall have occurred under any document, instrument, contract or agreement (a)
evidencing or securing indebtedness of Maker for borrowed money or (b) material
to the financial condition of Maker; (v) a final judgment or order for the
payment of money, or any final order granting equitable relief, shall be
entered against Maker and such judgment or order has or will have a materially
adverse effect on the financial condition of Maker; (vi) a warrant, writ of
attachment, levy or other similar process shall be issued against any property
of Maker; (vii) Maker shall (a) commence a voluntary case under the Bankruptcy
Code of 1978, as amended or other federal bankruptcy law (as now or hereafter
in effect); (b) file a petition seeking to take advantage of any other laws,
domestic or foreign, relating to bankruptcy, insolvency, reorganization,
winding up or composition for adjustment of debts; (c) consent to or fail to
contest in a timely and
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appropriate manner any petition filed against it in an involuntary case under
such bankruptcy laws or other laws; (d) apply for or consent to, or fail to
contest in a timely and appropriate manner, the appointment of, or the taking
of possession by, a receiver, custodian, trustee, or liquidator of itself or of
a substantial part of its property, domestic or foreign; (e) be unable to, or
admit in writing its inability to, pay its debts as they become due; (f) make a
general assignment for the benefit of creditors; or (g) make a conveyance
fraudulent as to creditors under any state or federal law; or (viii) a case or
other proceeding shall be commenced against Maker in any court of competent
jurisdiction seeking (a) relief under the Bankruptcy Code of 1978, as amended
or other federal bankruptcy law (as now or hereafter in effect) or under any
other laws, domestic or foreign, relating to bankruptcy, insolvency,
reorganization, winding up or adjustment of debts or (b) the appointment of a
trustee, receiver, custodian, liquidator or the like for Maker or all or any
substantial part of the assets, domestic or foreign, of Maker.
Upon the occurrence of an Event of Default (other than an Event of
Default described in clause (vii) or (viii) of the definition thereof), any and
all of the loans and the undersigned's other obligations hereunder, at the
option of the Holder, and without demand or notice of any kind, may be
immediately declared, and thereupon shall immediately become in default and due
and payable and the Holder may exercise any and all rights and remedies
available to it under the Loan Documents, at law, in equity or otherwise. Upon
the occurrence of an Event of Default described in clause (vii) or (viii) of
the definition thereof, any and all of the loans and the undersigned's other
obligations hereunder, without demand or notice of any kind, shall immediately
become in default and due and payable and the Holder may exercise any and all
rights and remedies available to it under the Loan Documents, at law, in equity
or otherwise.
7. REPRESENTATIONS AND WARRANTIES; COVENANTS AND AGREEMENTS. The
representations and warranties made in Article 5 of the Contribution Agreement
by Maker and the agreements of Maker made in Articles 7 and 8 of the
Contribution Agreement are incorporated herein by this reference; provided,
however, that the affirmative and negative covenants shall survive termination
of the Contribution Agreement until such time as the principal of this note and
all interest accrued thereon have been paid in full by Maker.
8. MISCELLANEOUS.
(a) To the extent that it becomes necessary for Holder to
engage legal counsel to enforce the obligations of Maker to Holder hereunder,
Maker shall pay all reasonable, necessary, and actually incurred expenses of
such legal counsel.
(b) Time is of the essence of this Note.
(c) All amendments to this Note, and any waiver or
consent of Holder, must be in writing and signed by Holder and Maker.
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(d) This Note shall be binding upon the successors and
assigns of Maker.
IN WITNESS WHEREOF, the undersigned has caused this Note to be duly
executed and delivered under seal as of the day and year first above written.
ZYNAXIS, INC.
By: /s/ XXXXXX X. XXXXXXXXX
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Name: Xxxxxx X. Xxxxxxxxx
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Title: Chairman, President and Chief Executive Officer
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ATTEST:
By: /s/ XXXXXXX X. XXXXXXXX
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Name: Xxxxxxx X. Xxxxxxxx
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Title: Secretary
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Address: 000 Xxxxxxxxxxxx Xxxx
Xxxxxxx, Xxxxxxxxxxxx 00000
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