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Exhibit 10.32
PROMISSORY NOTE
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$354,973.68 September 22, 2000
For value received, Michel de Rosen (the "Executive") with an address
at 407 Pugh Road, Wayne, PA 19807 (the "Maker"), hereby promises to pay to the
order of ViroPharma Incorporated, a Delaware corporation with an address at 405
Eagleview Boulevard, Exton, PA 19341 (the "Payee"), the principal sum of Three
Hundred Fifty Four Thousand Nine Hundred Seventy Three Dollars and Sixty Eight
Cents ($354,973.68) (the "Original Principal Amount"), or such lesser amount as
determined in accordance with Section 3(a) below, in lawful money of the United
States of America, together with interest thereon, subject to the terms and
conditions as hereinafter provided. The principal sum outstanding from time to
time hereunder shall bear interest at an annual rate of 6.05% per annum (subject
to Sections 3(d) and 6 below). The interest due hereunder shall be calculated on
the basis of a 365-day year by multiplying the interest rate in effect hereunder
by a fraction, the numerator of which is the actual number of days the principal
sum is outstanding and the denominator of which is 365.
1. Purpose; Use of Proceeds. This Promissory Note (this "Note") is executed by
the Maker in connection with Executive's commencement of employment by the Payee
and the grant of Restricted Shares of common stock of the Payee to Executive as
provided in the ViroPharma Incorporated Restricted Stock Agreement of even date
herewith, and Payee's agreement, subject to the conditions set forth below, to
reimburse the Maker for such reasonable costs and expenses in an amount not to
exceed the Original Principal Amount first set forth above. It is mutually
intended by the Payee and the Maker that the Original Principal Amount will be
applied by the Maker to the payment of federal, state and local income and
employment taxes arising in connection with the Maker's filing of an election
pursuant to Section 83(b) of the Internal Revenue Code of 1986, as amended, with
respect to such grant of Restricted Shares.
2. Insurance. Within a reasonable time after the date hereof, Payee may
attempt to acquire an insurance policy on the life of Executive (the "Insurance
Policy") that names Payee as the loss payee. Executive shall cooperate with
Payee in obtaining the Insurance Policy, and Executive warrants that he has no
knowledge of any facts concerning his physical health or otherwise that would
discourage a reputable insurance company from insuring the life of Executive at
reasonable rates and based on generally accepted insurance underwriting
standards.
3. Principal Reduction and Payment.
(a) Subject to the terms and conditions set forth below, on each one (1)
year anniversary of this date of this Note, commencing on the first anniversary
of the date of this Note and continuing through and including the fourth
anniversary of the date of this Note (such four year period, the "Forgiveness
Term"), the principal amount of this Note shall be reduced by the product of
twenty-five percent (25%) times the lesser of the Original Principal Amount
(each, a "Forgiven Installment"), and on and after each such anniversary date
the Maker shall have no further obligation to pay Payee, and the Maker shall be
released from all liability to Payee with respect to, the applicable Forgiven
Installment plus all accrued and unpaid interest with respect thereto.
(b) If Executive's employment by Payee is terminated prior to the
expiration of the Forgiveness Term as a result of the resignation of Executive,
then from and after the date that Executive notifies Payee of Executive's
intention to resign (the "Resignation Date"), Section 3(a) shall be of no
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further force or effect, and upon the earlier of the date that Executive
commences employment with any third party or the expiration of the ninety (90)
day period after the Resignation Date, the Maker shall pay to Payee the
principal amount of this Note and all accrued and unpaid interest with respect
thereto that is then outstanding and has not been previously forgiven pursuant
to Section 3(a) (the "Outstanding Balance").
(c) If Executive's employment by Payee is terminated prior to the
expiration of the Forgiveness Term due to an event that is covered by the
Insurance Policy, then the entire Outstanding Balance shall be deemed forgiven
as of the date of such event and the proceeds of the Policy shall be Payee's
sole recourse in respect of the Outstanding Balance. In the event of a Change
of Control, as such term is defined by the Company's Stock Option Plan in effect
from time to time, in which the Executive is not offered substantially
equivalent employment with the successor corporation or a related employer (both
in terms of duties and compensation), or if the Executive's employment with the
successor corporation or related employer is terminated by the successor
corporation or related employer during the six month period following such
Change of Control, then the entire Outstanding Balance shall be deemed forgiven
as of the date of such Change of Control or later termination.
(d) If Executive's employment by Payee is terminated prior to the
expiration of the Forgiveness Term for any reason other than that described in
Sections 3(b) or (c) above, including but not limited to the termination of
Executive's employment by Payee for any reason or no reason, then from and after
the effective date of such termination (the "Termination Date"), Section 3(a)
shall be of no further force or effect, and the Maker shall thereafter be liable
for the prompt payment of the Outstanding Balance; provided that, from and after
the Termination Date, the interest rate of this Note shall be adjusted to
reflect the lowest applicable Federal rate then in effect for promissory notes
having a repayment period equal to the "Payment Term" of this Note, as defined
below. Principal and interest payments in respect of the Outstanding Balance
shall be due and payable in consecutive monthly installments in the amounts to
be set forth in the amortization schedule described in Section 3(d)(ii) below
(each, a "Monthly Payment"), on the first day of each month commencing with the
month immediately following the Termination Date and continuing until the
expiration of the Payment Term, at Payee's address set forth above or at such
other address as Payee shall designate in writing to Maker. Each Monthly
Payment first shall be applied against accrued interest amounts then
outstanding, and the balance of such Monthly Payment shall then be applied
against the principal amount of this Note.
(i) The "Payment Term" shall be the number of months, commencing with
the Termination Date, listed below opposite the applicable period in which the
Termination Date occurs:
Termination Date Payment Period
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Before the first anniversary of the 72 Months
date of this Note
After the first anniversary of the 54 Months
date of this Note, but before the
second anniversary of this Note
After the second anniversary of the 36 Months
date of this Note, but before the
third anniversary of this Note
After the third anniversary of the 18 Months
date of this Note, but before the
fourth anniversary of this Note
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(ii) Within a reasonable time after the Termination Date, but in any
event prior to the date that the first Monthly Payment is due and payable
hereunder, Payee shall provide Maker with an amortization schedule for the
Outstanding Balance that reflects the Monthly Payments due for the Payment Term,
and such amortization schedule shall be a supplement to this Note.
4. Prepayment; Set-Off. This Note may be prepaid in full or in part at any
time without premium or penalty. The amounts due from the Maker hereunder shall
not be subject to set-off by the Maker.
5. Default and Acceleration. The entire principal balance that has not been
reduced or paid pursuant to Section 3 above, and all accrued interest thereon,
shall become immediately due and payable upon demand by Payee if one or more of
the following events shall have happened at any time after the Termination Date
(each an "Event of Default") and shall be continuing at the time of such demand
(except that no demand shall be necessary in the case of Subsection (b) below):
(a) Default shall have been made in the payment of any principal or
interest when and as due hereunder;
(b) Maker shall: (i) file in any court pursuant a petition in
bankruptcy or insolvency or for reorganization or for the appointment of a
receiver or trustee of Maker's assets; (ii) propose a written agreement for the
composition or extension of Maker's debts; (iii) be served with an involuntary
petition filed in any insolvency proceeding, and such petition shall not be
dismissed within sixty (60) days after the filing thereof; or (iv) make an
assignment for the benefit of creditors; or
(c) The entry of a material financial judgment against Maker, or the
issuing of any attachment or garnishment against any property of Maker.
6. Default Rate. Notwithstanding anything to the contrary in this Note, upon
an Event of Default, or if Executive resigns his employment with Payee and the
Outstanding Balance is not paid within the period required by Section 3(b)
above, interest on the unpaid balance of this Note shall be deemed to have
accrued at a rate equal to the lesser of eighteen percent (18%) per annum or the
highest rate otherwise allowed by law (the "Default Rate").
7. Presentment, Costs, Etc. The Maker hereby waives presentment, protest,
notice of protest, and notice of dishonor. Subject to the provisions herein,
Maker covenants that if an Event of Default occurs, he will, to the extent that
he may lawfully promise so to do, pay to Payee such further amount as shall be
sufficient to cover the cost and expense of collection or any other costs
incurred by Payee in the exercise of any of its rights, remedies or powers under
this Note, including reasonable compensation to the attorneys and accountants of
Payee, and any amount thereof not paid promptly following demand therefor shall
be added to the principal sum then due hereunder and shall bear interest at the
Default Rate from the date of such demand until the date that such amounts are
paid in full.
8. Remedies Cumulative. No right or remedy conferred upon or reserved to Payee
hereunder, or now or hereafter existing at law or in equity or by statute or
other legislative enactment, is intended to be exclusive of any other right or
remedy, and each and every such right or remedy shall be cumulative and
concurrent, and shall be in addition to every other such right or remedy, and
may be pursued singly, concurrently, successively or otherwise, at the sole
discretion of Payee, and shall not be exhausted by any one exercise thereof but
may be exercised as often as occasion therefor shall occur.
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9. Waiver. Maker agrees that Payee may release, compromise, forbear with
respect to, waive, suspend, extend or renew any of the terms hereunder (and
Maker hereby waives any notice of any of the foregoing), and any action taken by
Payee pursuant to the foregoing shall in no way be construed as a waiver or
release of any right or remedy of Payee, or of any Event of Default, or of any
liability or obligation of Maker, under this Note.
10. Successors and Assigns. This Note may be freely assigned by Payee. The
obligations of the Maker under this Note may not be assigned without the prior
written consent of Payee. This Note inures to the benefit of Payee and binds
the Maker, and Maker's respective successors, heirs and permitted assigns.
11. Notices. All notices required to be given to any of the parties hereunder
shall be in writing and shall be deemed to have been sufficiently given for all
purposes when presented personally to such party or sent by certified or
registered mail, or any national overnight delivery service, to such party at
its address first set forth above, or to such other address for which notice is
duly given to the other party. Such notice shall be deemed to be given when
received if delivered personally, the next business day after the date sent if
sent by national overnight delivery service, or two (2) business days after the
date mailed if mailed by certified or registered mail. Whenever the giving of
notice is required, the giving of such notice may be waived in writing by the
party entitled to receive such notice.
12. Governing Law. This Note shall be governed as to its validity,
interpretation, and effect by the laws of the Commonwealth of Pennsylvania,
notwithstanding the conflict-of-law doctrines of Pennsylvania or any other
jurisdiction. Any legal proceeding arising out of or relating to this Note
shall be heard in the Chester County, Pennsylvania Court or in the United States
District Court for the Eastern District of Pennsylvania, and Maker hereby
consents to the personal and exclusive jurisdiction of such courts and hereby
waives any objection that Maker may have to the laying of venue of any such
proceeding and any claim or defense of inconvenient forum.
IN WITNESS WHEREOF, the undersigned has executed this Note on the date
first above written.
/s/ Michel de Rosen
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Michel de Rosen
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