Exhibit 10.16
[_________]
SECURED PROMISSORY NOTE
This SECURED PROMISSORY NOTE (this "NOTE") is made ________, 2004, by
COMBINATORX, INCORPORATED ("BORROWER") in favor of LIGHTHOUSE CAPITAL PARTNERS
V, L.P. (collectively with its assigns, "LENDER"), and its assigns
(collectively, "HOLDER") with reference to the following:
FOR VALUE RECEIVED, Borrower promises to pay in lawful money of the United
States, to the order of Lender, at ▇▇▇ ▇▇▇▇▇'▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, or such other place as Lender may from time to time designate
("LENDER'S OFFICE"), the sum of $____________ plus all other monies advanced
under or owing on account of the Advance evidenced hereby under that certain
Loan and Security Agreement No. 4201 between Borrower and Lender dated September
7, 2004 (the "LOAN AGREEMENT"), including interest on the unpaid balance of the
Advance at the Basic Rate accruing from the Funding Date, and all other amounts
due or to become due hereunder according to the terms hereof. Capitalized terms
used and not otherwise defined herein are defined in the Loan Agreement.
"BASIC RATE" means a PER ANNUM rate of interest equal to the Prime Rate as
quoted in The Wall Street Journal plus 1.5%. From each Funding Date through
September 30, 2005, the Basic Rate will be adjusted upward or downward to
maintain an interest rate equal to the Prime Rate plus 1.50%. On the date five
(5) days prior to the Loan Commencement Date, the Basic Rate will be fixed for
the Repayment Period and there will be no further adjustments to the Basic Rate.
"FINAL PAYMENT" means 14% of the original principal amount of the Note.
"LOAN COMMENCEMENT DATE" means October 1, 2005
"MATURITY DATE" means September 30, 2009, or if earlier, the date of prepayment
under the Note.
"PAYMENT FACTOR" for this Note means 2.3150%, subject to adjustments to Basic
Rate.
"PREPAYMENT FEE" means an amount equal to (i) 3% of the outstanding principal of
this Note, with respect to prepayment made between the first and second
anniversary of the Note, (ii) 2% of the outstanding principal of this Note, with
respect to prepayment made between the second and third anniversary of the Note.
"REPAYMENT PERIOD" means the period beginning on the Loan Commencement Date and
continuing for 48 calendar months.
1. REPAYMENT. Borrower shall repay the principal and interest thereupon will
be paid as follows:
a. SCHEDULED PAYMENTS. From and after the Loan Commencement Date,
Borrower shall make amortizing payments of principal and interest in advance
(collectively, "SCHEDULED PAYMENTS") on the first day of each month during the
Repayment Period (each a "PAYMENT DATE"), in an amount equal to the Payment
Factor MULTIPLIED by the original principal amount of the Advance. In addition,
all unpaid principal and accrued interest, together with all Lenders Expenses
associated with the Advance and this Note shall be due and payable in full on
the Maturity Date.
b. INTERIM PAYMENTS. In addition to the Scheduled Payments, Borrower
shall pay to Lender, monthly in advance, an amount (the "INTERIM PAYMENT") equal
to accrued interest on the aggregate principal amount of this Note calculated at
the Basic Rate from the Funding Date (and thereafter recalculated on the first
business day of each calendar month during which an Interim Payment is due),
until the Loan Commencement Date with respect to this Note.
c. FINAL PAYMENT. On the Maturity Date, Borrower shall pay, in addition
to all unpaid principal and interest due hereunder, the Final Payment.
2. INTEREST. Interest not paid when due will, to the maximum extent permitted
under applicable law, become part of principal, at Lender's option, and
thereafter bear like interest as principal. All Obligations due not paid when
due shall bear interest at the Default Rate unless waived in writing by Lender.
All amounts paid hereunder including principal, interest or fees and expenses
will be applied in Lender's discretion and as provided in the Loan Agreement.
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3. VOLUNTARY PREPAYMENT. Subsequent to the first anniversary of the
Note, Borrower may voluntarily prepay any or all of the Note, PROVIDED that each
of the following conditions is satisfied: Borrower pays to Lender (i) all unpaid
Scheduled Payments due before the date of prepayment with respect to such
prepaid amount, (ii) the outstanding principal amount of this Note and any
unpaid accrued interest with respect to such prepaid amount (iii) the Prepayment
Fee with respect to such prepaid amount, (iv) the Final Payment (or with respect
to a partial prepayment, the pro rata portion of the Final Payment, such amount
to be based on the percentage of the aggregate principal amount being prepaid)
and (v) all other sums, if any, that shall have become due and payable
hereunder.
4. COLLATERAL. This Note is secured by the Collateral.
5. WAIVERS. Borrower, and all guarantors and endorsers of this Note,
regardless of the time, order or place of signing, hereby waive notice, demand,
presentment, protest, and notices of every kind, presentment for the purpose of
accelerating maturity, diligence in collection, and, to the fullest extent
permitted by law, all rights to plead any statute of limitations as a defense to
any action on this Note.
6. CHOICE OF LAW; VENUE. THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF CALIFORNIA, WITHOUT REGARD TO
PRINCIPLES OF CONFLICTS OF LAW. EACH OF BORROWER AND LENDER HEREBY SUBMITS TO
THE EXCLUSIVE JURISDICTION OF THE STATE AND FEDERAL COURTS LOCATED IN ▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ OF CALIFORNIA. BORROWER AND LENDER EACH
HEREBY WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF
ACTION BASED UPON OR ARISING OUT OF THIS NOTE. EACH PARTY FURTHER WAIVES ANY
RIGHT TO CONSOLIDATE ANY ACTION IN WHICH A JURY TRIAL HAS BEEN WAIVED WITH ANY
OTHER ACTION IN WHICH A JURY TRIAL CANNOT BE OR HAS NOT BEEN WAIVED.
7. MISCELLANEOUS. THIS NOTE MAY BE MODIFIED ONLY BY A WRITING SIGNED BY
BORROWER AND LENDER. Each provision hereof is severable from every other
provision hereof and of the Loan Agreement when determining its legal
enforceability. Sections and subsections are titled for convenience, and not for
construction. "Hereof," "herein," "hereunder," and similar words refer to this
Note in its entirety. "Or" is not necessarily exclusive. "Including" is not
limiting. The terms and conditions hereof inure to the benefit of and are
binding upon the parties' respective permitted successors and assigns. This Note
is subject to all the terms and conditions of the Loan Agreement.
IN WITNESS WHEREOF, Borrower has caused this Note to be executed by a duly
authorized officer as of the day and year first above written.
COMBINATORX, INCORPORATED
By:
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Name:
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Title:
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