SpectruMedix Corporation 6% Secured Note Due July 9, 2004 between SpectruMedix Corporation and I. Reich Family Limited Partnership

Summary

SpectruMedix Corporation has issued a $600,000 secured promissory note to the I. Reich Family Limited Partnership, promising to repay the principal plus 6% annual interest by July 9, 2004. Interest is payable quarterly, and the company may prepay the note in increments of at least $25,000. The note is secured by collateral under a separate security agreement. If the company defaults or certain events occur, the holder can demand immediate repayment. The note is governed by New York law and cannot be assigned by the company without the holder's consent.

EX-10.3 5 dex103.txt 6% SECURED NOTE DUE JULY 9, 2004 Exhibit 10.3 This Note and the securities represented hereby have not been registered under the Securities Act of 1933, as amended (the "Act"), or under the securities or blue sky laws of any State, and may not be sold, or otherwise transferred, in absence of such registration or an exemption therefrom under such Act and under any such applicable State laws, or in violation of the provisions of this Note. SPECTRUMEDIX CORPORATION 6% SECURED NOTE Due July 9, 2004 $600,000 Date of Issue: July 9, 2001 SpectruMedix Corporation, a Delaware corporation (the "Company"), for value received, herewith promises to pay to the I. Reich Family Limited Partnership, a Delaware limited partnership, or to its order, (together with any assignee, jointly or severally, the "Holder") on the Due Date (as hereinafter defined), the sum of six hundred thousand dollars ($600,000) or, if less, so much hereof as may be outstanding from time to time, as set forth on the Schedule attached hereto (the "Principal Amount") and to pay interest on the Principal Amount at the rate of six percent (6%) per annum as provided herein. Capitalized terms used but not otherwise defined herein shall have the meanings ascribed thereto in the Securities Purchase Agreement between the Company and the Holder dated as of July 9, 2001 (the "Securities Purchase Agreement"). In furtherance thereof, and in consideration of the premises, covenants, promises, representations and warranties hereinafter set forth the Borrower hereby agrees as follows: 1. Interest. Interest on the Principal Amount outstanding from time to time -------- as set forth on the Schedule hereto shall accrue at the rate of 6.00% per annum, shall be based on a three hundred sixty (360) day year of twelve (12) thirty (30) day months and shall be payable quarterly as accrued in arrears on each July 9, October 9, January 9, and April 9 until this Note shall have been paid in full. All payments of both principal and interest shall be made at the address of the Holder hereof as it appears in the books and records of the Company, or at such other place as may be designated by the Holder hereof. If any payment of principal or interest on this Note shall become due on a day other than any day that is not a Saturday, a Sunday or a day on which banks are required or permitted to be closed in the State of New York (a "Business Day"), such payment shall be made on the next succeeding Business Day and such extension of time shall in such case be included in computing interest in connection with such payment. Payments of principal and interest are to be made in lawful money of the United States. Notwithstanding the foregoing sentence, the Borrower may elect to (i) make scheduled interest payments on this Note in the form of a PIK Note (the "PIK Note"), in form substantially similar to this Note or (ii) defer any interest payment until the Due Date, in which event interest shall accrue on any interest payment so deferred at the rate of six percent (6%) per annum. 2. Maturity. This Note shall mature July 9, 2004, at which time all unpaid -------- principal and interest shall be due and payable in full. 3. Optional Prepayment. The Company may at any time or from time to time ------------------- prepay all or any portion of this Note, provided that each such prepayment shall -------- be in a minimum amount of $25,000 or integral multiples thereof. 4. Security. The obligations of the Borrower under this Note are secured by a -------- valid, perfected, enforceable and first priority lien on and security interest in the Collateral described in the Security Agreement dated as of July 9, 2001 between the Company and Holder, and each other agreement or other instrument now existing or hereafter created providing collateral security for the payment or performance of the Company's obligations hereunder and under the Securities Purchase Agreement. 5. Defaults. The occurrence of any of the following shall constitute an Event -------- of Default hereunder: (a) default in the payment of all or any part of the principal or interest on the Note as and when the same shall become due and payable, whether at maturity, by declaration or otherwise; (b) failure on the part of the Company duly to observe or perform any of the covenants or agreements contained herein on its part to be performed, and the continuance of such failure for thirty (30) days or the Security Agreement; (c) the Company shall commence a voluntary case or other proceeding seeking liquidation, reorganization or other relief with respect to itself or its debts under any bankruptcy, insolvency or other similar law now or hereinafter in effect or seeking the appointment of a trustee, receiver liquidator, custodian or other similar official of it or any substantial part of its property, or shall consent to any such relief or to the appointment of or taking possession by any such official in an involuntary case or other proceeding commenced against it, or shall make a general assignment for the benefit of creditors, or shall fail generally to pay its debts as they become due, or shall take corporate action to authorize any of the foregoing; (d) an involuntary case or other proceeding shall be commenced against the Company seeking liquidation, reorganization or other relief with respect to it or its debts under any bankruptcy, insolvency or other similar law now or hereafter in effect or seeking the appointment of a trustee, receiver, liquidator, custodian or other similar official of it or any substantial part of its property, and such involuntary case or other proceeding shall remain undismissed and unstayed for a period of sixty (60) days; or an order for relief shall be entered against the Company under the federal bankruptcy laws as now or hereafter in effect; or -2- (e) Ilan Reich (or a successor acceptable to him) shall cease to be the Chairman and Chief Executive Officer of the Company; then, and in each and every such case, unless the principal of the Note shall have already become due an payable, the Holder, by notice in writing to the Company (the "Acceleration Notice"), may declare the entire principal amount of this Note, together with interest accrued thereon, to be due an payable immediately, and upon any such declaration the same shall become immediately due and payable. 6. Voting Rights. In the event that, for any reason, the shares of Series C ------------- Preferred Stock, par value $.00115 per share, shall cease to have thirteen (13) votes for each share of Common Stock issuable upon conversion of a share of Series C Preferred Stock, then the holder of this Note shall have the right to vote, together with the holders of the Company's Common Stock, and shall have one vote for each share of Common Stock issuable upon conversion of this Note 7. Failure to Act and Waiver. No failure or delay by the Holder to require ------------------------- the performance of any term or terms of this Note or to exercise any right, or any remedy shall constitute a waiver of any such term or of any right or of any default, nor shall such delay or failure preclude the Holder from exercising any such right, power or remedy at any later time or times. 8. Consent to Jurisdiction. The Company hereby agrees and consents that any ----------------------- action, suit or proceeding arising out of this Note may be brought in any appropriate court in the State of New York including the United States District Court for the Southern District of New York, or in any other court having jurisdiction over the subject matter, all at the sole election of the Holder hereof, and by the issuance and execution of this Note, the Company irrevocably consents to the jurisdiction of each such court. 9. No Assignment. The Company may not assign its obligations under this Note ------------- without the prior written consent of the Holder. Any purported assignment prohibited hereby shall be void. 10. Notices. All notices and communications under this Note shall be given as ------- set forth in Section 8.2 of the Securities Purchase Agreement. -3- 11. Governing Law. In all respects, including all matters of construction, ------------- validity and performance, this note and the obligations arising hereunder shall be governed by, and construed and enforced in accordance with, the laws of the state of New York applicable to contracts made and performed in such state, without regard to the principles thereof regarding conflict of laws, and any applicable laws of the united states of America. * * * * * IN WITNESS WHEREOF, the Company has caused this Note to be duly executed under its corporate seal on the date of issue above stated. SPECTRUMEDIX CORPORATION By: /s/ Stephen Wertheimer ------------------------------ Name: Stephen Wertheimer Title: Secretary & President -4- 6% Secured Note Schedule --------

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