Exhibit 10.4

 

SECURED PROMISSORY NOTE

 

June 18, 2003

 

FOR VALUE RECEIVED, PHOTOGEN TECHNOLOGIES, INC., a Nevada corporation (“Payor”),
hereby unconditionally promises to pay to the order of Xmark Fund, Ltd.
(“Holder”), the principal sum of $1,753,750.00 (the “Note Amount”) in lawful
money of the United States, together with interest on the unpaid principal
balance of the Note Amount payable in shares of common stock of the Payor, in
accordance with the terms set forth herein.  This Secured Promissory Note (this
“Note”) is being issued pursuant to that certain Going Forward Agreement, dated
as of May 2, 2003 (the “Going Forward Agreement”), by and among Payor, Holder
and Xmark Fund, L.P. in order to evidence the unconditional payment obligations
of Payor to the Holder pursuant to Section 2(b)(i) and (ii) of the Going Forward
Agreement.

 

Section 1.                                          Maturity Date.  The Note
Amount shall be due and payable as follows: (A) fifty percent (50%) of the Note
Amount shall be paid by Payor no later than the earlier to occur of (w) the 90th
day after the Closing Date (as defined in the Going Forward Agreement) and (x)
August 5, 2003, and (B) the remainder of the Note Amount shall be paid by Payor
no later than the earlier to occur of (y) the 180th day after the Closing Date
and (z) November 3, 2003; provided, however, that Payor shall pay such
installments immediately in the event it completes after the Closing Date and
prior to either August 5, 2003 or November 3, 2003, as the case may be, one or
more institutional financings resulting in aggregate gross proceeds to Payor of
at least Eighteen Million Dollars ($18,000,000) or this Note is accelerated in
accordance with Section 6.

 

Section 2.                                          Interest Rate; Adjustments. 
Interest shall accrue on the unpaid principal balance of the Note Amount at the
rate per annum equal to the Prime Rate (as defined below) plus three percent
(3%).  For purposes of this Note, the “Prime Rate” shall mean the prime rate
published in the Wall Street Journal, Eastern Edition, under the heading “Money
Rates” on the date hereof.  Interest shall be calculated on the basis of a
360-day year and the actual number of days elapsed.

 

Section 3.                                          Interest Payments.  Accrued
interest on the unpaid principal balance of the Note Amount shall be due and
payable in shares of Payor’s common stock having a per share value of $1.00
(subject to adjustment in the event of any stock split, stock dividend, reverse
stock split, recapitalization or reclassification of Payor’s common stock) on
the first business day of each month commencing on July 1, 2003 until such time
as the Note Amount has been paid in full.

 

Section 4.                                          Place and Manner of Payment.
 Payments of the Note Amount are to be made in United States currency to Holder
at 152 West 57th Street, 21st Floor, New York, New York 10019 or at such other
location designated in writing by Holder from time to time.

 

Section 5.                                          Security for Note.  This
Note is one of the Notes referred to in the Security Agreement, dated as of even
date hereof (the “Security Agreement”), by and among Payor, Holder and Xmark
Fund, L.P. and is secured by the collateral described therein (collectively, the
“Collateral”).  The Security Agreement grants the Holder certain rights with
respect to the Collateral upon an Event of Default.

 

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Section 6.                                          Events of Default; Remedies.
 Upon the occurrence of any Event of Default (as defined in the Security
Agreement), the outstanding Note Amount, together with all accrued but unpaid
interest, shall immediately become due and payable at the option of the Holder
upon written notice to the Payor.

 

Section 7.                                          No Waiver; Remedies
Cumulative.  No failure or delay in exercising any right or remedy hereunder
operates as a waiver thereof.  No single or partial exercise of any right or
remedy hereunder precludes any other or further exercise of any right or remedy
hereunder or thereunder.  Except as expressly provided herein, the exercise of
any right or remedy hereunder does not preclude the simultaneous or later
exercise of any other rights or remedies available at law or in equity.  No
amendment or waiver of any provision of this Note, nor consent to any departure
by Payor herefrom, shall in any event be effective unless the same shall be in
writing and signed by Holder, and then such waiver or consent shall be effective
only in the specific instance and for the specific purpose for which given.

 

Section 8.                                          Governing Law.  This Note,
and all matters arising directly or indirectly herefrom, shall be governed by
and construed in accordance with the laws of the State of New York,
notwithstanding the choice of law or conflicts of law principles thereof.  Payor
and, by accepting this Note, the Holder hereby (a) irrevocably consent and
submit to the sole exclusive jurisdiction of the state and federal courts
located in the State of New York in connection with any suit, action or other
proceeding directly or indirectly arising out of or relating to this Note, and
(b) irrevocably waive, to the fullest extent permitted by law, any objection
that it may now or hereafter have to the laying of the venue of any such suit,
action or proceeding in any such court or that any such suit, action or
proceeding which is brought in any such court has been brought in an
inconvenient forum.

 

Section 9.                                          Headings.  All headings in
this Agreement are for convenience of reference only and do not affect the
meaning of any provision.

 

Section 10.                                   Partial Invalidity.  If any term
or provision of this Note is at any time held to be invalid by any court of
competent jurisdiction, such invalidity shall not effect the remaining terms and
provisions of this Note, which shall continue to be in full force and effect.

 

Section 11.                                   Waivers.  Payor hereby waives
presentment, demand for payment, protect, notice of protest and notice of
dishonor of this Note.

 

Section 12.                                   Successors and Assigns.  This Note
shall be binding on Payor and its successors and assigns and shall inure to the
benefit of Holder and his heirs, administrators, successors and assigns.  The
term “Holder” in this Note shall refer to the person originally holding this
Note or to any other future holder of this Note.

 

Section 13.                                   No Jury Trial.  THE PAYOR HEREBY
KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES ANY RIGHTS IT MAY NOW HAVE OR
HEREAFTER HAVE TO A TRIAL BY JURY IN RESPECT TO ANY SUIT, ACTION OR PROCEEDING
ARISING OUT OF OR RELATING TO THIS NOTE.

 

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IN WITNESS WHEREOF, Payor has caused this Note to be duly executed as of the
date first written above.

 

 

 

PHOTOGEN TECHNOLOGIES, INC.

 

 

 

 

 

 

 

 

By:

 

 

 

 

Name:

 

 

Title:

 

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