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EXHIBIT 10.23
LOAN AND SECURITY AGREEMENT
Agreement No. Dated as of March 26, 1999
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by and between
SILICON VALLEY BANK
as lender
and
ARRAY BIOPHARMA INC.
a Delaware corporation
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇. ▇▇-▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
as borrower
TOTAL CREDIT AMOUNT: $500,000
Repayment Period: 42 months Treasury Note Maturity: 42 months
Final Payment Percentage: 8% Loan Margin: 300 basis points
Minimum Funding Amount: $50,000 Maximum Number of Loans: Six (6)
Warrants: See Warrant for Terms
Commitment Termination Date: March 26, 2000
The terms and information set forth on this cover page are a part of the
attached Loan and Security Agreement, dated as of the date first written above
(this "Agreement"), entered into by and among Silicon Valley Bank ("Lender")
and the borrower ("Borrower") set forth above. The terms and conditions of the
Agreement agreed to between Lender and Borrower are as follows:
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TABLE OF CONTENTS
Page
1. Definitions and Construction...........................................................................1
1.1. Definitions...................................................................................1
1.2. Other Interpretive Provisions.................................................................5
2. Loan and Terms of Payment..............................................................................5
2.1. Commitment; The Credit Amount.................................................................5
2.2. Use of Proceeds; The Loans....................................................................6
2.3. Procedure for Making Loans....................................................................6
2.4. Amortization of Principal and Interest; Interim Payment; Final Payment; Loan Fee..............7
2.5. Prepayments...................................................................................8
2.6. Other Payment Terms...........................................................................8
2.7. Minimum Funding Amount; Maximum Number of Fundings............................................8
2.8. Crediting Payments............................................................................8
2.9. Additional Costs..............................................................................9
2.10. Term..........................................................................................9
3. Conditions of Loans....................................................................................9
3.1. Conditions Precedent to Initial Loan..........................................................9
3.2. Conditions Precedent to all Loans............................................................10
3.3. Covenant to Deliver..........................................................................10
4. Creation of Security Interest.........................................................................10
4.1. Grant of Security Interest...................................................................10
4.2. After Acquired Property......................................................................10
4.3. Duration of Security Interest................................................................11
4.4. Possession of Collateral.....................................................................11
4.5. Markings on the Collateral...................................................................11
4.6. Delivery of Additional Documentation Required................................................11
4.7. Right to Inspect.............................................................................11
5. Representations and Warranties........................................................................11
5.1. Due Organization and Qualification...........................................................11
5.2. Authority....................................................................................11
5.3. Subsidiaries.................................................................................12
5.4. Conflict with Other Instruments, etc.........................................................12
5.5. Authorization; Enforceability................................................................12
5.6. No Prior Encumbrances........................................................................12
5.7. Name; Location of Chief Executive Office, Principal Place of Business and Collateral.........12
5.8. Litigation...................................................................................12
5.9. Financial Statements.........................................................................12
5.10. Solvency.....................................................................................12
5.11. Environmental Quality........................................................................12
5.12. Taxes........................................................................................13
5.13. Consents and Approvals.......................................................................13
5.14. Trademarks, Patents, Copyrights, Franchises and Licenses.....................................13
5.15. Material Contracts...........................................................................13
5.16. Full Disclosure..............................................................................13
6. Affirmative Covenants.................................................................................13
6.1. Good Standing................................................................................13
6.2. Government Compliance........................................................................13
6.3. Financial Statements, Reports, Certificates..................................................13
6.4. Notice of Event of Loss......................................................................14
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6.5. Notice of Defaults...........................................................................14
6.6. Taxes........................................................................................14
6.7. Use; Maintenance.............................................................................14
6.8. Insurance....................................................................................14
6.9. Loss; Damage; Destruction and Seizure........................................................15
6.10. Principal Depository.........................................................................15
6.11. Environmental Laws...........................................................................15
6.12. Further Assurances...........................................................................15
7. Negative Covenants....................................................................................15
7.1. Chief Executive Office; Location of Collateral...............................................16
7.2. Extraordinary Transactions and Disposal of Assets............................................16
7.3. Restructure..................................................................................16
7.4. Liens........................................................................................16
8. Events of Default.....................................................................................16
8.1. Payment Default..............................................................................16
8.2. Covenant Default.............................................................................16
8.3. Material Adverse Change......................................................................16
8.4. Attachment...................................................................................16
8.5. Other Agreements.............................................................................16
8.6. Judgments....................................................................................16
8.7. Redemption or Repurchase.....................................................................17
8.8. Misrepresentations...........................................................................17
8.9. Breach of Warrant............................................................................17
8.10. Involuntary Bankruptcy or Insolvency.........................................................17
8.11. Voluntary Bankruptcy or Insolvency...........................................................17
9. Lender's Rights and Remedies..........................................................................17
9.1. Rights and Remedies..........................................................................17
9.2. Effect of Sale...............................................................................18
9.3. Power of Attorney in Respect of the Collateral...............................................18
9.4. Lender's Expenses............................................................................18
9.5. Remedies Cumulative..........................................................................18
9.6. Application of Collateral Proceeds...........................................................19
9.7. Reinstatement of Rights......................................................................19
10. Waivers; Indemnification..............................................................................19
10.1. Demand; Protest..............................................................................19
10.2. Lender's Liability for Collateral............................................................19
10.3. Indemnification..............................................................................19
11. Notices...............................................................................................20
12. General Provisions....................................................................................21
12.1. Successors and Assigns.......................................................................21
12.2. Time of Essence..............................................................................21
12.3. Severability of Provisions...................................................................21
12.4. Entire Agreement; Construction; Amendments and Waivers.......................................21
12.5. Reliance by Lender...........................................................................21
12.6. No Set-Offs by Borrower......................................................................21
12.7. Counterparts.................................................................................21
12.8. Survival.....................................................................................22
13. Relationship of Parties...............................................................................22
14. Choice of Law and Venue; Jury Trial Waiver............................................................22
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This LOAN AND SECURITY AGREEMENT is entered into as of March 26, 1999,
by and among SILICON VALLEY BANK, a California-chartered bank ("Bank") and
ARRAY BIOPHARMA INC., a Delaware corporation ("Borrower").
RECITALS
Borrower wishes to borrow money from time to time from Lender, and
Lender desires to lend money to Borrower. This Agreement sets forth the terms
on which Lender will lend to Borrower, and Borrower will repay the loans to
Lender.
AGREEMENT
The parties agree as follows:
1. Definitions and Construction.
1.1. Definitions. As used in this Agreement, the
following terms shall have the following definitions:
"Affiliate" means any Person that owns or controls
directly or indirectly ten percent or more of the stock of another entity, any
Person that controls or is controlled by or is under common control with such
Persons or any Affiliate of such Persons or each of such Person's officers,
directors, joint venturers or partners.
"Basic Rate" means, as of the relevant Funding Date,
the per annum rate of interest (based on a year of 360 days) equal to the sum
of (a) the U.S. Treasury note yield to maturity for a term equal to the
Treasury Note Maturity as quoted in the Western edition of The Wall Street
Journal on the day the applicable Loan Terms Schedule is prepared, plus (b) the
applicable Loan Margin for the type of Eligible Equipment being financed.
"Borrower's Books" means all of Borrower's books and
records including: ledgers; records concerning Borrower's assets or
liabilities, the Collateral, business operations or financial condition; and
all computer programs, or tape files, and the equipment, containing such
information.
"Business Day" means any day that is not a Saturday,
Sunday, or other day on which banks in the State of California are authorized
or required to close.
"Code" means the Uniform Commercial Code as adopted
and in effect in the State of California, as amended from time to time.
"Collateral" means the Property described on Exhibit
A attached hereto, including, without limitation, all Financed Equipment listed
in any Loan Agreement Supplement executed from time to time pursuant to Section
4.2.
"Commitment Termination Date" means the date
following such term on the cover page of this Agreement.
"Contingent Obligation" means, as applied to any
Person, any direct or indirect liability, contingent or otherwise, of that
Person with respect to any indebtedness, lease, dividend, letter of credit or
other obligation of another, including any such obligation directly or
indirectly guaranteed, endorsed (otherwise than for collection or deposit in
the ordinary course of business), co-made or discounted or sold with recourse
by that Person, or in respect of which that Person is otherwise directly or
indirectly liable. The amount of any Contingent Obligation shall be equal to
the amount of the obligation so guaranteed or otherwise supported.
"Credit Amount" means the amount set forth following
such term on the cover page of this Agreement.
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"Default" means any event which with the passing of
time or the giving of notice or both would become an Event of Default
hereunder.
"Default Rate" means the per annum rate of interest
equal to the Basic Rate plus five percent (5%), but such rate shall in no event
be more than the highest rate permitted by applicable law to be charged on
commercial loans.
"Eligible Equipment" means computer and related
equipment, office equipment, test and laboratory equipment, and other equipment
related to Borrower's business as conducted or proposed, furnishings, and,
subject to the limitations set forth below, Other Equipment that complies with
all of Borrower's representations and warranties to Lender and which is and at
all times shall continue to be acceptable to Lender in all respects. Unless
otherwise agreed to by Lender, not more than twenty percent (20%) of the
Financed Equipment financed with the proceeds of each Loan shall consist of
Other Equipment.
"Environmental Claims" means all claims, however
asserted, by any Governmental Authority or other Person alleging potential
liability or responsibility for violation of any Environmental Law or for
release or injury to the environment or threat to public health, personal
injury (including sickness, disease or death), property damage, natural
resources damage, or otherwise alleging liability or responsibility for damages
(punitive or otherwise), cleanup, removal, remedial or response costs,
restitution, civil or criminal penalties, injunctive relief, or other type of
relief, resulting from or based upon (a) the presence, placement, discharge,
emission or release (including intentional and unintentional, negligent and
non-negligent, sudden or non-sudden, accidental or non-accidental placement,
spills, leaks, discharges, emissions or releases) of any Hazardous Material at,
in, or from Property, whether or not owned by Borrower, or (b) any other
circumstances forming the basis of any violation, or alleged violation, of any
Environmental Law.
"Environmental Laws" means all foreign, federal,
state or local laws, statutes, common law duties, rules, regulations,
ordinances and codes, together with all administrative orders, directed duties,
requests, licenses, authorizations and permits of, and agreements with, any
Governmental Authorities, in each case relating to environmental, health,
safety and land use matters, including the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, the Clean Air Act, the
Federal Water Pollution Control Act of 1972, the Solid Waste Disposal Act, the
Federal Resource Conservation and Recovery Act, the Toxic Substances Control
Act and the Emergency Planning and Community Right-to-Know Act.
"Environmental Permit" has the meaning set forth in
Section 5.11.
"Event of Default" has the meaning given to such
term in Section 8.
"Event of Loss" has the meaning given to that term
in Section 6.9.
"Final Payment" means, with respect to each Loan, a
payment (in addition to and not in substitution for the regular monthly
payments of principal and accrued interest) due on the Maturity Date for such
Loan equal to the Loan Amount for such Loan at such time multiplied by the
Final Payment Percentage.
"Final Payment Percentage" means the percentage set
forth following such term on the cover page of this Agreement.
"Financed Equipment" has the meaning given to that
term in Exhibit A, as amended or supplemented from time to time.
"Funding Date" means any date on which a Loan is
made to or on account of Borrower under this Agreement.
"Governmental Authority" means (a) any federal,
state, county, municipal or foreign government, or political subdivision
thereof, (b) any governmental or quasi-governmental agency, authority, board,
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bureau, commission, department, instrumentality or public body, (c) any court
or administrative tribunal or (d) with respect to any Person, any arbitration
tribunal or other non-governmental authority to whose jurisdiction that Person
has consented.
"Hazardous Materials" means all those substances
which are regulated by, or which may form the basis of liability under, any
Environmental Law, including all substances identified under any Environmental
Law as a pollutant, contaminant, hazardous waste, hazardous constituent,
special waste, hazardous substance, hazardous material, or toxic substance, or
petroleum or petroleum derived substance or waste.
"Indebtedness" means (a) all indebtedness for
borrowed money or the deferred purchase price of Property or services,
including reimbursement and other obligations with respect to surety bonds and
letters of credit, (b) all obligations evidenced by notes, bonds, debentures or
similar instruments, (c) all capital lease obligations, and (d) all Contingent
Obligations.
"Lender's Expenses" means all reasonable costs or
expenses (including reasonable attorneys' fees and expenses) incurred in
connection with the preparation, negotiation, administration, and enforcement
of the Loan Documents; and Lender's reasonable attorneys' fees and expenses
incurred in amending, modifying, enforcing or defending the Loan Documents,
including the exercise of any rights or remedies afforded hereunder or under
applicable law, whether or not suit is brought.
"Lien" means any pledge, bailment, lease, mortgage,
hypothecation, conditional sales and title retention agreement, charge, claim,
encumbrance or other lien in favor of any Person.
"Loan" means each advance of credit by Lender to
Borrower under this Agreement.
"Loan Agreement Supplement" means a supplement to
this Agreement in substantially the form of Exhibit D.
"Loan Amount" means, with respect to each Loan, as
of any date, the original principal amount of such Loan less the aggregate of
all Stated Costs of Equipment with respect to which prepayments of such Loan
have been made.
"Loan Documents" means, collectively, this
Agreement, the Warrants, the Landlord Consent(s) and all other documents,
instruments and agreements entered into between Borrower and Lender in
connection with this Agreement, all as amended or extended from time to time.
"Loan Factor" means, with respect to each Loan, the
amount set forth as a percentage in the Loan Terms Schedule with respect to
such Loan, calculated using the Basic Rate applicable to such Loan.
"Loan Margin" means the number of basis points set
forth following such term on the cover page of this Agreement.
"Loan Terms Schedule" means, with respect to each
Loan, the "Loan Terms Schedule" attached to the Loan Agreement Supplement
prepared by Lender in connection with such Loan.
"Maturity Date" means, with respect to each Loan,
the last day of the Repayment Period for such Loan, or if earlier, the date of
acceleration of such Loan by Lender following an Event of Default.
"Minimum Funding Amount" means the amount set forth
following such term on the cover page of this Agreement.
"New Equipment" means Financed Equipment delivered
to Borrower by the manufacturer or vendor not more than two hundred (200) days
prior to the Funding Date of the initial Loan with respect to Financed
Equipment, including but not limited to an x-ray generator manufactured by
Molecular
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Structure Corporation, model number __________, that is acceptable to
and has been approved by Bank, and not more than ninety (90) days prior to the
Funding Date of any other Loan relating to such Financed Equipment.
"Obligations" means all debt, principal, interest,
fees, charges, expenses and attorneys' fees and costs and other amounts
(including all amounts charged to any operating or deposit account maintained
by Borrower at Bank, pursuant to any agreement authorizing Bank to charge such
accounts), obligations, covenants, and duties owing by Borrower to Lender of
any kind and description (whether pursuant to or evidenced by the Loan
Documents, or by any other agreement between Lender and Borrower, and whether
or not for the payment of money), whether direct or indirect, absolute or
contingent, due or to become due, now existing or hereafter arising, including
the principal, interest and Final Payment due with respect to the Loans, and
including any debt, liability, or obligation owing from Borrower to others that
Lender may have obtained by assignment or otherwise, and further including all
interest not paid when due and all Lender's Expenses that Borrower is required
to pay or reimburse by the Loan Documents, by law, or otherwise.
"Obsolete" means that any item of Financed Equipment
is no longer needed by Borrower in its operations and that it is not reasonably
expected to be needed in the future operations of Borrower.
"Other Equipment" means leasehold improvements, and
other soft costs, including sales tax, freight and installation expenses,
intangible Property such as computer software and software licenses, equipment
specifically designed or manufactured for Borrower, other intangible Property,
limited use Property and other similar Property.
"Payment Date" has the meaning given to that term in
Section 2.4(a).
"Permitted Liens" means the following:
(a) The Lien created by this Agreement;
(b) Any Liens existing as of the date hereof
and disclosed in Schedule 1;
(c) Liens for taxes, fees, assessments or other
governmental charges or levies that have no superior priority over Lender's
Lien in the Collateral;
(d) Liens (i) upon or in any equipment acquired
or held by the Borrower or any of its subsidiaries, other than Financed
Equipment, or (ii) existing on such equipment at the time of its acquisition,
provided that (A) the equipment is not Financed Equipment and (B) the Lien is
confined solely to the Property so acquired and improvements thereon, and the
proceeds of such equipment; and
(e) Liens to secure payment of worker's
compensation, employment insurance, old age pensions or other social security
obligations of Borrower in the ordinary course of business of Borrower.
"Person" means and includes any individual, any
partnership, any corporation, any business trust, any joint stock company, any
limited liability company, any unincorporated association or any other entity
and any domestic or foreign national, state or local government, any political
subdivision thereof, and any department, agency, authority or bureau of any of
the foregoing.
"Property" means any interest in any kind of
property or asset, whether real, personal or mixed, whether tangible or
intangible.
"Repayment Period" means the period beginning on the
first Payment Date and continuing for the number of calendar months set forth
following such term on the cover page of this Agreement.
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"Responsible Officer" means any of the President,
Chief Operating Officer , or the Chief Financial Officer of Borrower.
"Scheduled Payments" has the meaning given to such
term in Section 2.4(a).
"Stated Cost" means (i) with respect to New
Equipment, the original cost to Borrower of the item of New Equipment net of
any and all freight, installation, tax and other soft costs or (ii) with
respect to Used Equipment, the original cost to Borrower paid in an arm's
length transaction, subject in any case to limitations on Other Costs.
"Stipulated Loss Value" means, with respect to each
Loan, the percentage set forth with respect to such Loan in the Loan Terms
Schedule for such Loan, determined as of the Payment Date on which payment of
such amount is to be made, or if such date is not a Payment Date, on the
Payment Date immediately succeeding such date multiplied by the Loan Amount.
"Subsidiary" means any corporation of which a
majority of the outstanding capital stock entitled to vote for the election of
directors (otherwise than as the result of a default) is owned by Borrower
directly or indirectly through Subsidiaries.
"Term" means the period from and after the date
hereof until the payment in full of all amounts and liabilities payable under
this Agreement and the other Loan Documents, including principal and interest
on the Loans and the Final Payment with respect to each Loan.
"Treasury Note Maturity" means the period of months
set forth following such term on the cover page of this Agreement.
"Used Equipment" means all Financed Equipment which
is not New Equipment.
"Warrant" means the warrant in favor of Lender to
purchase securities of Borrower substantially in the form of Exhibit B.
1.2. Other Interpretive Provisions. References in this
Agreement to "Articles," "Sections," "Exhibits," "Schedules" and "Annexes" are
to recitals, articles, sections, exhibits, schedules and annexes herein and
hereto unless otherwise indicated. References in this Agreement and each of the
other Loan Documents to any document, instrument or agreement shall include (a)
all exhibits, schedules, annexes and other attachments thereto, (b) all
documents, instruments or agreements issued or executed in replacement thereof,
and (c) such document, instrument or agreement, or replacement or predecessor
thereto, as amended, modified and supplemented from time to time and in effect
at any given time. The words "hereof," "herein" and "hereunder" and words of
similar import when used in this Agreement or any other Loan Document shall
refer to this Agreement or such other Loan Document, as the case may be, as a
whole and not to any particular provision of this Agreement or such other Loan
Document, as the case may be. The words "include" and "including" and words or
similar import when used in this Agreement or any other Loan Document shall not
be construed to be limiting or exclusive. Unless otherwise indicated in this
Agreement or any other Loan Document, all accounting terms used in this
Agreement or any other Loan Document shall be construed, and all accounting and
financial computations hereunder or thereunder shall be computed, in accordance
with generally accepted accounting principles as in effect in the United States
of America from time to time.
2. Loan and Terms of Payment.
2.1. Commitment; The Credit Amount. Subject to the terms
and conditions of this Agreement and relying upon the representations and
warranties herein set forth as and when made or deemed to be made, Lender
agrees to lend to Borrower from time to time prior to the Commitment
Termination Date, the Loans; provided that the aggregate principal amount of
the Loans shall not exceed the Credit Amount at such time; provided, further,
that the aggregate principal amount of any Loan shall not exceed the aggregate
Stated Cost of the
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items of Eligible Equipment being financed with such Loan; and provided,
further, that the aggregate principal amount of any Loans or portions thereof,
allocated or relating to the financing of Other Equipment shall not exceed in
the aggregate twenty percent (20%) of the aggregate principal of the Loans. If
prepaid, the principal of the Loans may not be re-borrowed.
2.2. Use of Proceeds; The Loans.
(a) Use of Proceeds. The proceeds of the Loans
shall be used solely to reimburse Borrower for the purchase of Eligible
Equipment, in each case in an amount not to exceed the Stated Cost of such
Eligible Equipment. All such Eligible Equipment which is financed or
re-financed with the proceeds of Loans shall be deemed without further action
to be Financed Equipment.
(b) The Loans. The Loans shall be repayable in
consecutive monthly installments in accordance with the terms of Section 2.4.
Lender may, and is hereby authorized by Borrower to, endorse in its books and
records appropriate notations regarding Lender's interest in the Loans;
provided, however, that the failure to make, or an error in making, any such
notation shall not limit or otherwise affect the Obligations of Borrower
hereunder.
2.3. Procedure for Making Loans.
(a) Notice. Whenever Borrower desires that
Lender makes a Loan, Borrower shall so notify Lender in writing (or by
telephone with prompt confirmation in writing) at least five (5) Business Days
in advance of the desired Funding Date, which notice shall be irrevocable, and
shall provide Lender with the following information:
(i) a list of the proposed Financed
Equipment;
(ii) the principal amount of the
requested Loan; and
(iii) the intended use of proceeds of
the Loan.
Lender's obligation to make the initial Loan shall be expressly subject to the
satisfaction of the conditions set forth in Sections 3.1 and 3.2. Lender's
obligation to make each subsequent Loan shall be expressly subject to the
satisfaction of the conditions set forth in Section 3.2. Lender shall have the
right, exercisable at any time, to request that Borrower furnish Lender with
such additional information with respect to the Loan and the Eligible Equipment
to be financed with the Loan proceeds as Lender shall reasonably request.
(b) Loan Interest Rate. Borrower shall pay
interest on the unpaid principal amount of each Loan from the first Payment
Date after the Funding Date of such Loan until such Loan has been paid in full,
at a per annum rate of interest equal to the Basic Rate determined by Bank as
of the Funding Date for such Loan in accordance with the definition of Basic
Rate. The Basic Rate applicable to each Loan shall not be subject to change in
the absence of a manifest error. All computations of interest on Loans shall be
based on a year of 360 days comprised of twelve (12) months of thirty (30) days
each. Notwithstanding any other provision hereof, the amount of interest
payable hereunder shall not in any event exceed the maximum amount permitted by
the law applicable to interest charged on commercial loans.
(c) Loan Factor and Stipulated Loss Value
Calculation. On each Funding Date, Lenders shall establish the Loan Factor and
Stipulated Loss Values with respect to such Loan. The Loan Factor shall be
calculated in a manner to fully amortize the Loan over the Repayment Period
applicable to such Loan in equal periodic installments of principal and
interest. The Loan Factor and Stipulated Loss Values applicable to each Loan
shall be set forth in the Loan Agreement Supplement to be executed by Borrower
with respect to each Loan and shall be conclusive in the absence of a manifest
error.
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(d) Disbursement. Subject to the satisfaction of the
conditions set forth in Sections 3.1 and 3.2 with respect to the initial Loan
and the satisfaction of the conditions set forth in Section 3.2 with respect to
each subsequent Loan, Bank shall disburse such Loan by internal transfer to
Borrower's deposit account with Bank.
(e) Termination of Commitment to Lend. Notwithstanding
anything in the Loan Documents, Lender's obligation to lend the undisbursed
portion of the Credit Amount to Borrower hereunder shall terminate on the
earlier of (i) at the Lender's sole election, the occurrence and continuance of
any Default or Event of Default hereunder, and (ii) the Commitment Termination
Date. Notwithstanding the foregoing, Lender's obligation to lend the undisbursed
portion of the Credit Amount to Borrower shall terminate if, in Lender's sole
judgment, there has been a material adverse change in the general affairs,
management, results of operations, condition (financial or otherwise) or
prospects of Borrower, whether or not arising from transactions in the ordinary
course of business, or there has been any material adverse deviation by Borrower
from the business plan of Borrower presented to and not disapproved by Lender,
since the date of this Agreement.
2.4. Amortization of Principal and Interest; Interim Payment;
Final Payment; Loan Fee.
(a) Principal and Interest Payments On Payment Dates.
Borrower shall make payments monthly in advance of principal and accrued
interest for each Loan (collectively, "Scheduled Payments"), commencing on the
first Business Day of the first month following the Funding Date with respect to
such Loan and continuing thereafter during the Repayment Period on the first
Business Day of each calendar month (each a "Payment Date"), in an amount equal
to the Loan Factor multiplied by the Loan Amount for such Loan as of such
Payment Date. In any event, all unpaid principal and accrued interest shall be
due and payable in full on the last Payment Date with respect to such Loan.
(b) Interim Payment. In addition to the Scheduled
Payments, on the Funding Date for each Loan (unless the Funding Date is the
first Business Day of the month) Borrower shall pay to Bank an amount (the
"Interim Payment") equal to the initial Loan Amount multiplied by the product
of (i) the quotient derived from dividing the initial Loan Factor with respect
to such Loan by 30, and (ii) the number of days from the Funding Date of such
Loan until the first Payment Date with respect to such Loan.
(c) Final Payment. On the Maturity Date with respect to
such Loan, Borrower shall pay, in addition to the unpaid principal and accrued
interest and all other amounts due on such date with respect to such Loan, an
amount equal to the Final Payment with respect to such Loan.
(d) Loan Fee. The Loan Fee is non-refundable, but shall
be applied first, to the due diligence expenses of Lender and fees and expenses
of Lender's counsel in connection with the preparation and negotiation of this
Agreement and the other Loan Documents and the balance, if any, shall be
applied (using the ratio of each Loan Amount to the total Credit Amount) toward
the first payment due from Borrower to Lender hereunder on each Funding Date.
The foregoing notwithstanding, if the Loan Fee is insufficient to pay the
reasonable due diligence expenses of Lender and reasonable fees and expenses of
Lender's counsel in connection with such preparation and negotiation, Borrower
shall pay such additional amounts so owing for such fees and expenses to
Lender. If Borrower shall not have borrowed under this Agreement, on or prior
to the Commitment Termination Date or the earlier termination of this
Agreement, Loans aggregating in an original principal amount equal to the
Credit Amount, then Lender shall retain any portion of the Loan Fee not applied
as set forth in this Section 2.4(d).
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2.5. Prepayments.
(a) Prepayment Upon an Event of Loss. If any Financed
Equipment is subject to an Event of Loss and Borrower is required to or elects
to prepay the Loan with respect to such Financed Equipment pursuant to Section
6.9, then such Loan shall be prepaid to the extent and in the manner provided
in such section.
(b) Mandatory Prepayment Upon an Acceleration. If the
Loans are accelerated following the occurrence of an Event of Default or
otherwise (other than following an Event of Loss), then Borrower shall
immediately pay to Lender (i) all unpaid Scheduled Payments with respect to
each Loan due prior to the date of prepayment, (ii) the Stipulated Loss Value
with respect to each Loan, and (iii) all other sums, if any, that shall have
become due and payable hereunder with respect to any Loan.
(c) No Other Prepayment. Borrower may not prepay any
Loan except upon the occurrence of an event described in Section 2.5(a) or (b)
above in which event the prepayment shall be made as described in such
sections.
2.6. Other Payment Terms.
(a) Place and Manner. Borrower hereby authorizes Bank,
and irrevocably constitutes and appoints Bank (and any officer or agent
thereof, with full power of substitution) as its true and lawful
attorney-in-fact with full irrevocable power and authority in the place and
stead of Borrower and in the name of Borrower or in its own name (which
appointment is coupled with an interest), to debit directly from any banking
account maintained by Borrower with Lender the full amount (or any portion
thereof) of the Obligations of Borrower to Lender hereunder (including all
principal, accrued interest, commitment and other fees, and other amounts
chargeable to Borrower under this Agreement) when and as the same shall become
due and payable. It shall be Borrower's responsibility to ensure that there are
sufficient funds in a deposit account with Bank on the dates that payments are
due, or to provide for another manner of payment. If amounts in the deposit
account are insufficient, amounts due and payable shall be paid in immediately
available funds in such alternate manner as Borrower may choose.
(b) Date. Whenever any payment due hereunder shall fall
due on a day other than a Business Day, such payment shall be made on the next
succeeding Business Day, and such extension of time shall be included in the
computation of interest or fees, as the case may be.
(c) Default Rate. If either (i) any amounts required to
be paid by Borrower under this Agreement or the other Loan Documents (including
principal, interest, the Final Payment payable with respect to any Loan, and
any fees or other amounts) remain unpaid after such amounts are due, or (ii) an
Event of Default has occurred and is continuing, Borrower shall pay interest on
the aggregate, outstanding balance hereunder from the date due or from the date
of the Event of Default, as applicable, until such past due amounts are paid in
full or until all Events of Default are cured, as applicable, at a per annum
rate equal to the Default Rate. All computations of such interest shall be
based on a year of 360 days.
2.7. Minimum Funding Amount; Maximum Number of Fundings. Except
with the prior consent of Lender, in Lender's sole discretion, (i) the amount
of the requested Loan shall not be less than the Minimum Funding Amount;
provided, that if this Agreement specifies different Loan Margins for New
Equipment and Used Equipment and if Borrower is requesting Loans for both New
Equipment and Used Equipment on the same Funding Date, the aggregate of the two
requested Loans shall be computed in determining whether the Minimum Funding
Amount has been reached; (ii) there shall not be more than one funding of a
Loan in any one calendar month; and (iii) the aggregate number of Loans shall
not exceed six (6) during the term hereof.
2.8. Crediting Payments. The receipt by Bank of any wire transfer
of funds, check, or other item of payment shall be immediately applied
conditionally to reduce Obligations, but shall not be considered a payment on
account unless such wire transfer is of immediately available federal funds and
is made to the appropriate deposit account of Bank or unless and until such
check or other item of payment is honored when
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presented for payment. Notwithstanding anything to the contrary contained
herein, any wire transfer or payment received by Bank after 11:00 a.m.
California time shall be deemed to have been received by Bank as of the opening
of business on the immediately following Business Day.
2.9. Additional Costs. In case any law, regulation,
treaty or official directive or the interpretation or application thereof by
any court or any governmental authority charged with the administration thereof
or the compliance with any guideline or request of any central bank or other
governmental authority (whether or not having the force of law):
(a) subjects Lender to any tax with respect to
payments of principal or interest or any other amounts payable hereunder by
Borrower or otherwise with respect to the transactions contemplated hereby
(except for taxes on the overall net income of Lender imposed by the United
States of America or any political subdivision thereof); or
(b) imposes, modifies or deems applicable any
deposit insurance, reserve, special deposit or similar requirement against
assets held by, or deposits in or for the account of, or loans by Lender; or
(c) imposes upon Lender any other condition
with respect to its performance under this Agreement,
and the result of any of the foregoing is to increase the cost to Lender,
reduce the income receivable by Lender or impose any expense upon Lender with
respect to any loans, Lender shall notify Borrower thereof. Borrower agrees to
pay to Lender the amount of such increase in cost, reduction in income or
additional expense as and when such cost, reduction or expense is incurred or
determined, upon presentation by Lender of a statement in the amount and
setting forth Lender's calculation thereof, which statement shall be deemed
true and correct absent manifest error.
2.10. Term. This Agreement shall become effective upon
acceptance by Lender and shall continue in full force and effect for a term
ending on the Maturity Date of the last Loan made hereunder. Notwithstanding
the foregoing, Lender shall have the right to terminate this Agreement
immediately and without notice upon the occurrence of an Event of Default.
3. Conditions of Loans.
3.1. Conditions Precedent to Initial Loan. The obligation
of Lender to make the initial Loan is subject to the condition precedent that
Lender shall have received, in form and substance satisfactory to Lender, all
of the following:
(a) This Agreement duly executed by Borrower.
(b) The Warrant to be issued to Lender, duly
executed by Borrower.
(c) A duly executed amendment to the current
investor/registration rights agreement providing Lender with registration
rights for the shares issuable upon exercise of the Warrant.
(d) A certificate of the secretary or assistant
secretary of Borrower with copies of the following documents attached: (i) the
certificate of incorporation and bylaws of Borrower certified by Borrower as
being in full force and effect on the Funding Date, (ii) incumbency and
representative signatures, and (iii) resolutions authorizing the execution and
delivery of this Agreement and each of the other Loan Documents.
(e) A good standing certificate from Borrower's
state of incorporation and the state in which Borrower's principal place of
business is located, together with certificates of the applicable governmental
authorities stating that Borrower is in compliance with the franchise tax laws
of each such state, each dated as of a recent date.
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(f) Evidence of the insurance coverage required
by Section 6.8 of this Agreement.
(g) All necessary consents of shareholders and
other third parties with respect to the execution, delivery and performance of
this Agreement, the Warrant and the other Loan Documents.
(h) Such other documents, and completion of
such other matters, as Lender may deem necessary or appropriate.
3.2. Conditions Precedent to all Loans. The obligation of
Lender to make each Loan, including the initial Loan, is further subject to the
following conditions:
(a) No Default or Event of Default shall have
occurred and be continuing.
(b) Borrower shall have provided to Lender,
with respect to the Eligible Equipment which is requested to be financed with
the proceeds of the Loan to be made on such Funding Date, such invoices,
purchase orders, bills of sale, receipts, agreements, canceled checks, and
other documents as Lender shall reasonably request to evidence the ownership by
Borrower of, the payment in full of the purchase price of, and the fair market
value of, such Eligible Equipment, each in form and substance reasonably
satisfactory to Lender.
(c) Borrower and Lender shall have executed a
Loan Agreement Supplement, including a Loan Terms Schedule and a list of
Financed Equipment with respect to the proposed Loan.
(d) Lender shall have received such documents,
instruments and agreements, including UCC financing statements or amendments to
UCC financing statements, as Lender shall reasonably request to evidence the
perfection and priority of the security interests granted to Lender pursuant to
Section 4.
(e) Borrower shall have delivered to Lender, a
subordination agreement, release, or estoppel letter, as appropriate, from any
Person having an existing Lien superior to the Lien of Lender on any item of
Eligible Equipment which is requested to be financed.
(f) Borrower shall have provided Lender with a
Landlord Consent from the owner of each new building in which Collateral is
anticipated to be located.
(g) Such other documents, and completion of
such other matters, as Lender may deem necessary or appropriate.
3.3. Covenant to Deliver. Borrower agrees (not as a
condition but as a covenant) to deliver to Lender each item required to be
delivered to Lender as a condition to each Loan, if such Loan is advanced.
Borrower expressly agrees that the extension of such Loan prior to the receipt
by Lender of any such item shall not constitute a waiver by Lender of
Borrower's obligation to deliver such item.
4. Creation of Security Interest.
4.1. Grant of Security Interest. Borrower grants to
Lender a valid, first priority, continuing security interest in all presently
existing and hereafter acquired or arising Collateral in order to secure
prompt, full and complete payment of any and all Obligations and in order to
secure prompt, full and complete performance by Borrower of each of its
covenants and duties under each of the Loan Documents.
4.2. After-Acquired Property. All Financed Equipment
which is financed through Loans and any and all other Property generally
described or referred to as Collateral which is hereafter acquired by Borrower
shall ipso facto, and without any further conveyance, assignment or act on the
part of Borrower or Lender, become and be subject to the security interest
herein granted as fully and completely as though specifically described herein.
The list of Financed Equipment shall be amended and supplemented on each
Funding Date by a Loan Agreement Supplement to incorporate all Financed
Equipment financed with the Loan advanced on such Funding Date;
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provided, however, the failure to so amend and supplement the list of Financed
Equipment shall not affect the grant by Borrower to Lender of the security
interest in such Financed Equipment pursuant to this Section 4. This Agreement
and the other documents in connection herewith may be otherwise supplemented
and amended from time to time, as required by Lender, to reflect additional
Collateral to be subject to the security interest granted pursuant to this
Section 4.
4.3. Duration of Security Interest. Lender's security
interest in the Collateral shall continue until the payment in full and the
satisfaction of all Obligations, whereupon such security interest shall
terminate; provided, however, if any item of Financed Equipment is subject to
an Event of Loss, then following the prepayment of the Loan with respect to
such item pursuant to Section 2.5, Lender shall release its security interest
in such item of Financed Equipment. Lender shall, at Borrower's sole cost and
expense, execute such further documents and take such further actions as may be
necessary to effect the release contemplated by this Section 4.3, including
duly executing and delivering termination statements for filing in all relevant
jurisdictions under the Code.
4.4. Possession of Collateral. So long as no Event of
Default has occurred and is continuing, Borrower shall remain in full
possession, enjoyment and control of the Collateral (except only as may be
otherwise required by Lender for perfection of their security interest therein)
and shall be entitled to manage, operate and use the same and each part thereof
with the rights and franchises appertaining thereto; provided, however, that
the possession, enjoyment, control and use of the Collateral shall at all times
be subject to the observance and performance of the terms of this Agreement.
4.5. Markings on the Collateral. At Lender's reasonable
request at any time during the Term of the Loan (including any extension
thereof), Borrower shall place in a conspicuous location on each item of
Financed Equipment a plaque or other marking to be supplied by Lender which
reads substantially as follows:
Silicon Valley Bank
Lienholder
Such plaque or other marking shall not be removed (or if removed or damaged
such plaque or other marking shall be replaced) until the security interest in
favor of Lender in such item of Collateral is terminated pursuant to this
Agreement.
4.6. Delivery of Additional Documentation Required.
Borrower shall from time to time execute and deliver to Bank at the request of
Lender, all financing statements and other documents Lender may reasonably
request, in form satisfactory to Lender, to perfect and continue Lender's
perfected security interests in the Collateral and in order to consummate fully
all of the transactions contemplated under the Loan Documents.
4.7. Right to Inspect. Lender (through any of its
officers, employees, or agents) shall have the right, upon reasonable prior
notice, and subject to agreeing to be bound by Borrower's confidentiality
agreement, from time to time during Borrower's usual business hours, to inspect
Borrower's Books and to make copies thereof and to check, test, and appraise
the Collateral in order to verify Borrower's financial condition or the amount,
condition of, or any other matter relating to, the Collateral.
5. Representations and Warranties. Borrower represents, warrants
and covenants as follows:
5.1. Due Organization and Qualification. Borrower is a
corporation duly existing and in good standing under the laws of its state of
incorporation and qualified and licensed to do business in, and is in good
standing in, any state in which the conduct of its business or its ownership of
Property requires that it be so qualified or in which the Collateral is
located, except for such states as to which any failure so to qualify would not
have a material adverse effect on Borrower.
5.2. Authority. Borrower has all necessary power and
authority to execute, deliver, and perform in accordance with the terms
thereof, the Loan Documents to which it is a party. Borrower has all requisite
power and authority to own and operate its properties and to carry on its
businesses as now conducted.
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5.3. Subsidiaries. Borrower has no Subsidiaries, except
those listed in Schedule 4 hereto.
5.4. Conflict with Other Instruments, etc. Neither the
execution and delivery of any Loan Document to which Borrower is a party nor
the consummation of the transactions therein contemplated nor compliance with
the terms, conditions and provisions thereof will conflict with or result in a
breach of any of the terms, conditions or provisions of the certificate of
incorporation and the by-laws, or other organizational documents of Borrower or
any law or any regulation, order, writ, injunction or decree of any court or
governmental instrumentality or any material agreement or instrument to which
Borrower is a party or by which it or any of its properties is bound or to
which it or any of its properties is subject, or constitute a default
thereunder or result in the creation or imposition of any Lien, other than
Permitted Liens.
5.5. Authorization; Enforceability. The execution and
delivery of this Agreement, the granting of the security interest in the
Collateral, the incurring of the Loans, the execution and delivery of the other
Loan Documents to which Borrower is a party and the consummation of the
transactions herein and therein contemplated have each been duly authorized by
all necessary action on the part of Borrower. The Loan Documents have been duly
executed and delivered and constitute legal, valid and binding obligations of
Borrower, enforceable in accordance with their respective terms, except as the
enforceability thereof may be limited by bankruptcy, insolvency or other
similar laws of general application relating to or affecting the enforcement of
creditors' rights or by general principles of equity.
5.6. No Prior Encumbrances. Borrower has good and
indefeasible title to the Collateral, free and clear of liens, claims, security
interests, or encumbrances, except for the first priority lien held by the
Lender and except for other Permitted Liens. Except as disclosed in Schedule 1,
Borrower has not acquired any part of the Collateral from an assignor outside
the ordinary course of such assignor's business.
5.7. Name; Location of Chief Executive Office, Principal
Place of Business and Collateral. Except as disclosed in Schedule 2, Borrower
has not done business under any name other than that specified on the signature
page hereof. The chief executive office, principal place of business, and the
place where Borrower maintains its records concerning the Collateral are
presently located at the addresses set forth on Schedule 3. The Collateral is
presently located at the addresses set forth on Schedule 3.
5.8. Litigation. There are no actions or proceedings
pending by or against Borrower before any court or administrative agency in
which an adverse decision could have a material adverse effect on Borrower or
the aggregate value of the Collateral. Borrower does not have knowledge of any
such pending or threatened actions or proceedings. Borrower will promptly
notify Lender in writing if any action, proceeding or governmental
investigation involving Borrower is commenced that may result in damages or
costs to Borrower of Two Hundred Fifty Thousand Dollars ($250,000) or more.
5.9. Financial Statements. All financial statements
relating to Borrower or any Affiliate that have been or may hereafter be
delivered by Borrower to Bank present fairly in all material respects
Borrower's financial condition as of the date thereof and Borrower's results of
operations for the period then ended.
5.10. Solvency. The fair salable value of Borrower's
assets (including good will minus disposition costs) exceeds the fair value of
its liabilities; Borrower is not left with unreasonably small capital after the
transactions contemplated by this Agreement; and Borrower is able to pay its
debts (including trade debts) as they mature.
5.11. Environmental Quality.
(a) Except as specifically disclosed in writing
to Lender, the on-going operations of Borrower comply in all material respects
with all Environmental Laws.
(b) Except as specifically disclosed in writing
to Lender, Borrower has obtained all licenses, permits, authorizations and
registrations required under any Environmental Law ("Environmental
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Permits") and necessary for its ordinary course operations, all such
Environmental Permits are in good standing, and Borrower is in compliance with
all material terms and conditions of such Environmental Permits.
(c) Except as specifically disclosed in writing
to Lender, neither Borrower nor any of its present Property or operations is
subject to any outstanding written order from or agreement with any
Governmental Authority nor subject to any judicial or docketed administrative
proceeding, respecting any Environmental Law, Environmental Claim or Hazardous
Material.
5.12. Taxes. Borrower has filed or caused to be filed all
tax returns required to be filed, and has paid, or has made adequate provision
for the payment of, all taxes that are due and payable.
5.13. Consents and Approvals. No approval, authorization
or consent of any trustee or holder of any indebtedness or obligation of
Borrower or of any other Person under any such material agreement, contract,
lease or license or similar document or instrument to which Borrower is a party
or by which Borrower is bound, is required to be obtained by Borrower in order
to make or consummate the transactions contemplated under the Loan Documents.
All consents and approvals of, filings and registrations with, and other
actions in respect of, all Governmental Authorities required to be obtained by
Borrower in order to make or consummate the transactions contemplated under the
Loan Documents have been, or prior to the time when required will have been,
obtained, given, filed or taken and are or will be in full force and effect.
5.14. Trademarks, Patents, Copyrights, Franchises and
Licenses. Borrower possesses and owns all necessary trademarks, trade names,
copyrights, patents, patent rights, franchises and licenses which are material
to the conduct of its business as now operated.
5.15. Material Contracts. There are no material defaults
under any material contract or agreement by Borrower.
5.16. Full Disclosure. No representation, warranty or
other statement made by Borrower in any Loan Document, certificate or written
statement furnished to Lender contains any untrue statement of a material fact
or omits to state a material fact necessary in order to make the statements
contained in such certificates or statements not misleading.
6. Affirmative Covenants. Borrower covenants and agrees that,
until the full and complete payment of the Obligations and the termination of
the Commitments, Borrower shall do all of the following:
6.1. Good Standing. Borrower shall maintain its corporate
existence and its good standing in its jurisdiction of incorporation and
maintain qualification in each jurisdiction in which the failure to so qualify
could have a material adverse effect on the financial condition, operations or
business of Borrower. Borrower shall maintain in force all licenses, approvals
and agreements, the loss of which could have a material adverse effect on its
financial condition, operations or business.
6.2. Government Compliance. Borrower shall comply with
all statutes, laws, ordinances and government rules and regulations to which it
is subject, noncompliance with which could materially adversely affect the
financial condition, operations or business of Borrower.
6.3. Financial Statements, Reports, Certificates.
Borrower shall deliver to Lender: (a) as soon as available, but in any event
within forty-five (45) days after the end of each month, a company prepared
balance sheet, income statement and cash flow statement covering Borrower's
operations during such period, certified by a Responsible Officer; (b) as soon
as available, but in any event within ninety (90) days after the end of
Borrower's fiscal year, audited financial statements of Borrower prepared in
accordance with generally accepted accounting principles, consistently applied,
together with an unqualified opinion on such financial statements of a
nationally recognized or other independent public accounting firm reasonably
acceptable to Lender; (c) promptly upon becoming available, copies of all
statements, reports and notices sent or made available generally by Borrower to
its security holders; (d) immediately upon receipt of notice thereof, a report
of any material legal actions pending
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or threatened against Borrower; and (e) such other financial information as
Lender may reasonably request from time to time.
6.4. Notice of Event of Loss. As soon as possible, and in
any event within ten (10) days thereafter, Borrower shall notify Bank in
writing in reasonable detail of any Event of Loss.
6.5. Notice of Defaults. As soon as possible, and in any
event within five (5) days after the discovery of a Default or an Event of
Default provide Bank with an Officer's Certificate of Borrower setting forth
the facts relating to or giving rise to such Default or Event of Default and
the action which Borrower proposes to take with respect thereto.
6.6. Taxes. Borrower shall make due and timely payment or
deposit of all federal, state, and local taxes, assessments, or contributions
required of it by law or imposed upon any properties belonging to it, and, upon
request, will execute and deliver to Bank, appropriate certificates attesting
to the payment or deposit thereof; and Borrower will make timely payment or
deposit of all tax payments and withholding taxes required of it by applicable
laws, including those laws concerning F.I.C.A., F.U.T.A., state disability, and
local, state, and federal income taxes, and will, upon request, furnish Bank
with proof satisfactory to Lender indicating that Borrower has made such
payments or deposits; provided that Borrower need not make any payment if the
amount or validity of such payment is contested in good faith by appropriate
proceedings and is adequately reserved against by Borrower.
6.7. Use; Maintenance.
(a) Borrower, at its expense, shall make all
necessary site preparations and cause the Collateral to be operated in
accordance with any applicable manufacturer's manuals or instructions. So long
as no Default or Event of Default has occurred and is continuing, Borrower
shall have the right to quietly possess and use the Collateral as provided
herein without interference by Lenders.
(b) Borrower, at its expense, shall maintain
the Collateral in good condition, reasonable wear and tear excepted, and will
comply in all material respects with all laws, rules and regulations to which
the use and operation of the Collateral may be or become subject. Such
obligation shall extend to repair and replacement of any partial loss or damage
to the Collateral, regardless of the cause. If maintenance is mandated by
manufacturer, Borrower shall perform such maintenance, or shall obtain and keep
in effect, at all times during the Term maintenance service contracts with
suppliers. All parts furnished in connection with such maintenance or repair
shall immediately become part of the Collateral. All such maintenance, repair
and replacement services shall be immediately paid for and discharged by
Borrower with the result that no Lien will attach to the Collateral.
6.8. Insurance. Borrower shall obtain and maintain for
the Term, at its own expense, (a) "all risk" insurance against loss or damage
to the Collateral, and (b) comprehensive general liability insurance,
reasonably satisfactory to Lenders and such other insurance against such other
risks of loss and with such terms, as shall in each case be reasonably
satisfactory to or reasonably required by Lender (as to carriers, amounts,
deductibles and otherwise). The amount of the "all risk" insurance shall be the
greater of (i) the replacement value of the Collateral (as new) or (ii) the
Stipulated Loss Value of the Loan Amount applicable to each Loan and all other
then outstanding amounts payable under the Loan Documents. Such amounts shall
be determined to Lender's reasonable satisfaction as of each anniversary date
of this Agreement and the appropriate amount of coverage shall be put in effect
on the next succeeding renewal or inception date of such insurance.
The amount of such comprehensive general liability insurance shall be
at least Two Million Dollars ($2,000,000), One Million Dollars ($1,000,000) per
occurrence. The "all risk" insurance shall: (a) name Lender as sole loss payee
with respect to the Collateral, (b) provide each insurer's waiver of its right
of subrogation against Lender and Borrower, and (c) provide that such insurance
(i) shall not be invalidated by any action of, or breach of warranty by,
Borrower of a provision of any of its insurance policies, and (ii) shall waive
set-off, counterclaim or offset against Lender. Each liability policy shall (A)
name Lender as an additional insureds and (B) provide that such insurance shall
have cross-liability and severability of interest endorsements (which shall not
increase the aggregate policy limits of Borrower's insurance). All insurance
policies (C) shall provide that Borrower's insurance
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shall be primary without a right of contribution of Lender's insurance, if any,
or any obligation on the part of Lender to pay premiums of Borrower, and (D)
shall contain a clause requiring the insurer to give Lender at least thirty
(30) days prior written notice of its cancellation (other than cancellation for
non-payment for which ten (10) days notice shall be sufficient). Borrower
shall, on or prior to the date of and prior to each policy renewal, furnish to
Lender certificates of insurance or other evidence satisfactory to Lender that
such insurance coverage is in effect.
6.9. Loss; Damage; Destruction and Seizure.
(a) Borrower shall bear the risk of the
Financed Equipment being lost, stolen, destroyed, damaged beyond repair,
rendered permanently unfit for use, or seized by a governmental authority for
any reason whatsoever at any time until the expiration or termination of the
Term.
(b) If during the Term any item of Financed
Equipment becomes Obsolete or is lost, stolen, destroyed, damaged beyond
repair, rendered permanently unfit for use, or seized by a governmental
authority for any reason whatsoever for a period equal to at least the
remainder of the Term (an "Event of Loss"), then in each case Lender shall
receive from the proceeds of insurance maintained pursuant to Section 6.8, from
any award paid by the seizing governmental authority or, to the extent not
received from the proceeds of insurance or award or both, from Borrower, on or
before the Payment Date next succeeding such Event of Loss for each such item
of Financed Equipment subject to an Event of Loss, an amount equal to the sum
of: (i) all accrued and unpaid Scheduled Payments with respect to such Loan
attributable to such item of Financed Equipment due prior to the next such
Payment Date with respect to such Loan, (ii) a prepayment in an amount equal to
the Stipulated Loss Value and (iii) all other sums, if any, that shall have
become due and payable hereunder, including interest at the Default Rate with
respect to any past due amounts. On the date of receipt by Lender of the amount
specified above with respect to each such item of Financed Equipment subject to
an Event of Loss, this Agreement shall terminate as to such Financed Equipment.
Except as provided in Section 6.9(c), any proceeds of insurance maintained by
Borrower pursuant to Section 6.8 and received by Borrower shall be paid to Bank
promptly upon their receipt by Borrower up to the amounts due under this
Section. If any proceeds of insurance or awards received from governmental
authorities are in excess of the amount owed under this Section 6.9, Lender
shall promptly remit to Borrower the amount in excess of the amount owed to
Lender.
(c) So long as no Event of Default has occurred
and is continuing, any proceeds of insurance maintained pursuant to Section 6.8
received by Lender or Borrower with respect to an item of Financed Equipment,
the repair of which is practicable, shall, at the election of Borrower, be
applied either to the repair or replacement of such Financed Equipment or, upon
Bank's receipt of evidence of the repair or replacement of the Financed
Equipment reasonably satisfactory to Lender, to the reimbursement of Borrower
for the cost of such repair or replacement. All replacement parts and equipment
acquired by Borrower in replacement of Financed Equipment pursuant to this
Section 6.9(c) shall immediately become part of the Financed Equipment upon
acquisition by Borrower. Borrower shall take such actions and provide such
documentation as may be reasonably requested by Lender to protect and preserve
their first priority security interest and otherwise to avoid any impairment of
Lender's rights under the Loan Documents in connection with such repair or
replacement.
6.10. Principal Depository. Borrower shall maintain its
principal operating accounts with Bank; provided, there shall be no minimum
balance requirements.
6.11. Environmental Laws. Borrower shall conduct its
operations and keep and maintain its Property in material compliance with all
Environmental Laws.
6.12. Further Assurances. At any time and from time to
time Borrower shall execute and deliver such further instruments and take such
further action as may reasonably be requested by Lender to effect the purposes
of this Agreement.
7. Negative Covenants. Borrower covenants and agrees that until
the full and complete payment of the Obligations and termination of the
Commitments, Borrower will not do any of the following:
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7.1. Chief Executive Office; Location of Collateral.
During the continuance of this Agreement, change the chief executive office or
principal place of business or remove or cause to be removed, except in the
ordinary course of Borrower's business, the Collateral or the records
concerning the Collateral from the premises listed in Schedule 3 without thirty
(30) days prior written notice to Lender.
7.2. Extraordinary Transactions and Disposal of Assets.
Enter into any transaction for the sale, lease, license or other disposition
of, moving, relocation, or transfer, whether by sale or otherwise, of
Borrower's assets outside of the ordinary course of Borrower's business.
7.3. Restructure. Change Borrower's name; cause, permit,
or suffer any material change in Borrower's ownership (provided that raising
additional equity in a financing round or the sale of shares by any venture
investor other than Boulder Ventures or an affiliate thereof shall not be
prohibited by this clause); or suspend operation of Borrower's business.
7.4. Liens. Create, incur, assume or suffer to exist any
Lien or any other encumbrance of any kind with respect to any of the Financed
Equipment, whether now owned or hereafter acquired, except the Permitted Liens.
8. Events of Default. Any one or more of the following events
shall constitute an Event of Default by Borrower under this Agreement:
8.1. Payment Default. If Borrower fails to pay when due
and payable or when declared due and payable in accordance with the Loan
Documents, any portion of the Obligations.
8.2. Covenant Default. If Borrower fails to perform any
obligation under Sections 6.8, 6.9 or 6.10, or violates any of the covenants
contained in Section 7 of this Agreement, or fails or neglects to perform,
keep, or observe any other material term, provision, condition, covenant, or
agreement contained in this Agreement, in any of the other Loan Documents, or
in any other present or future agreement between Borrower and Lender and as to
any default under such other term, provision, condition, covenant or agreement
that can be cured, has failed to cure such default within fifteen (15) days
after the occurrence of such default.
8.3. Material Adverse Change. If there is a material
impairment of the prospect of repayment of any portion of the Obligations owing
to Lender or a material impairment of the value or priority of Lender's
security interests in the Collateral.
8.4. Attachment. If any material portion of Borrower's
assets is attached, seized, subjected to a writ or distress warrant, or is
levied upon, or comes into the possession of any trustee, receiver or Person
acting in a similar capacity and such attachment, seizure, writ or distress
warrant or levy has not been removed, discharged or rescinded within ten (10)
days, or if Borrower is enjoined, restrained, or in any way prevented by court
order from continuing to conduct all or any material part of its business
affairs, or if a judgment or other claim becomes a lien or encumbrance upon any
material portion of Borrower's assets, or if a notice of lien, levy, or
assessment is filed of record with respect to any of Borrower's assets by the
United States Government, or any department, agency, or instrumentality
thereof, or by any state, county, municipal, or governmental agency, and the
same is not paid within ten (10) days after Borrower receives notice thereof,
provided that none of the foregoing shall constitute an Event of Default where
such action or event is stayed or an adequate bond has been posted pending a
good faith contesting by Borrower.
8.5. Other Agreements. If there is a default in any
agreement to which Borrower is a party with a third party or parties resulting
in a right by such third party or parties, whether or not exercised, to
accelerate the maturity of any Indebtedness.
8.6. Judgments. If a judgment or judgments for the
payment of money in an amount, individually or in the aggregate, of at least
Fifty Thousand Dollars ($50,000) shall be rendered against Borrower and shall
remain unsatisfied and unstayed for a period of thirty (30) days.
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8.7. Redemption or Repurchase. Borrower shall, after the
date of this Agreement, redeem or repurchase any shares of its equity
securities, other than repurchases of stock from former employees of Borrower.
8.8. Misrepresentations. If any material
misrepresentation or material misstatement exists now or hereafter in any
warranty, representation, statement, or report made to Lender by Borrower or
any officer, employee, agent, or director of Borrower.
8.9. Breach of Warrant. If Borrower shall breach the
terms of the Warrant.
8.10. Involuntary Bankruptcy or Insolvency. If a
proceeding shall have been instituted in a court having jurisdiction in the
premises seeking a decree or order for relief in respect of Borrower in an
involuntary case under any applicable bankruptcy, insolvency or other similar
law now or hereafter in effect, or for the appointment of a receiver,
liquidator, assignee, custodian, trustee (or similar official) of Borrower or
for any substantial part of its property, or for the winding-up or liquidation
of its affairs, and such proceeding shall remain undismissed or unstayed and in
effect for a period of forty-five (45) consecutive days or such court shall
enter a decree or order granting the relief sought in such proceeding.
8.11. Voluntary Bankruptcy or Insolvency. If Borrower
shall commence a voluntary case under any applicable bankruptcy, insolvency or
other similar law now or hereafter in effect, shall consent to the entry of an
order for relief in an involuntary case under any such law, or shall consent to
the appointment of or taking possession by a receiver, liquidator, assignee,
trustee, custodian (or other similar official) of Borrower or for any
substantial part of its property, 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 any corporate action in furtherance of any of the foregoing.
9. Lender's Rights and Remedies.
9.1. Rights and Remedies. Upon the occurrence and
continuance of any Default or Event of Default, Lender shall have no further
obligation to advance money or extend credit to or for the benefit of Borrower.
In addition, upon the occurrence and during the continuance of an Event Of
Default, Lender shall have the rights, options, duties and remedies of a
secured party as permitted by law and, in addition to and without limitation of
the foregoing, Lender may, at its election, without notice of election and
without demand, do any one or more of the following, all of which are
authorized by Borrower:
(a) Declare all Obligations, whether evidenced
by this Agreement, by any of the other Loan Documents, or otherwise, including
the Stipulated Loss Value of the Loan Amount of each Loan, immediately due and
payable (provided that upon the occurrence of an Event of Default described in
Section 8.11 or 8.12 all Obligations shall become immediately due and payable
without any action by Lender);
(b) Without notice to or demand upon Borrower,
make such payments and do such acts as Lender consider necessary or reasonable
to protect their security interest in the Collateral. Borrower agrees to
assemble the Collateral if Lender so requires, and to make the Collateral
available to Lender as Lender may designate. Borrower authorizes Lender to
enter the premises where the Collateral is located, to take and maintain
possession of the Collateral, or any part of it, and to pay, purchase, contest,
or compromise any encumbrance, charge, or lien which in Lender's determination
appears to be prior or superior to their security interest and to pay all
expenses incurred in connection therewith. With respect to any of Borrower's
owned premises, Borrower hereby grants Lender a license to enter into
possession of such premises and to occupy the same, without charge, for up to
one hundred twenty (120) days in order to exercise any of Lender's rights or
remedies provided herein, at law, in equity, or otherwise;
(c) Without notice to Borrower, set off and
apply to the Obligations any and all (i) balances and deposits of Borrower held
by Bank, or (ii) indebtedness at any time owing to or for the credit or the
account of Borrower;
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(d) Ship, reclaim, recover, store, finish,
maintain, repair, prepare for sale, advertise for sale, and sell (in the manner
provided for herein) the Collateral. Lender is hereby granted a license or
other right, solely pursuant to the provisions of this Section 9.1, to use,
without charge, Borrower's labels, patents, copyrights, rights of use of any
name, trade secrets, trade names, trademarks, service marks, and advertising
matter, or any Property of a similar nature, as it pertains to the Collateral,
in completing production of, advertising for sale, and selling any Collateral
and, in connection with Lender's exercise of their rights under this Section
9.1, Borrower's rights under all licenses and all franchise agreements shall
inure to Lender's benefit;
(e) Sell the Collateral at either a public or
private sale, or both, by way of one or more contracts or transactions, for
cash or on terms, in such manner and at such places (including Borrower's
premises) as Lender determines is commercially reasonable;
(f) Lender may credit bid and purchase at any
public sale; and
(g) Any deficiency that exists after
disposition of the Collateral as provided above will be paid immediately by
Borrower.
9.2. Effect of Sale. Any sale, whether under any power of
sale hereby given or by virtue of judicial proceedings, shall operate to divest
all right, title, interest, claim and demand whatsoever, either at law or in
equity, of Borrower in and to the Property sold, and shall be a perpetual bar,
both at law and in equity, against Borrower, its successors and assigns, and
against any and all Persons claiming the Property sold or any part thereof
under, by or through Borrower, its successors or assigns.
9.3. Power of Attorney in Respect of the Collateral.
Borrower does hereby irrevocably appoint Lender (which appointment is coupled
with an interest) on the occurrence and continuance of a Default or an Event of
Default, the true and lawful attorney in fact of Borrower with full power of
substitution, for it and in its name: (a) to ask, demand, collect, receive,
receipt for, ▇▇▇ for, compound and give acquittance for any and all rents,
issues, profits, avails, distributions, income, payment draws and other sums in
which a security interest is granted under Section 4 with full power to settle,
adjust or compromise any claim thereunder as fully as if Lender was a Borrower
itself, (b) to receive payment of and to endorse the name of Borrower to any
items of Collateral (including checks, drafts and other orders for the payment
of money) that come into Lender's possession or under Lender's control, (c) to
make all demands, consents and waivers, or take any other action with respect
to, the Collateral, (d) in Lender's discretion to file any claim or take any
other action or proceedings, either in their own names or in the name of
Borrower or otherwise, which Lender may reasonably deem necessary or
appropriate to protect and preserve the right, title and interest of Lender in
and to the Collateral, or (e) to otherwise act with respect thereto as though
Lender were the outright owner of the Collateral.
9.4. Lender's Expenses. If Borrower fails to pay any
amounts or furnish any required proof of payment due to third persons or
entities, as required under the terms of this Agreement, then Lender may do any
or all of the following: (a) make payment of the same or any part thereof; (b)
set up such reserves in Borrower's loan account as Lender deems necessary to
protect Lender from the exposure created by such failure; or (c) obtain and
maintain insurance policies of the type discussed in Section 6.8 of this
Agreement, and take any action with respect to such policies as Lender deems
prudent. Any amounts paid or deposited by Lender shall constitute Lender's
Expenses, shall be immediately due and payable, and shall bear interest at the
then applicable rate hereinabove provided, and shall be secured by the
Collateral. Any payments made by Lender shall not constitute an agreement by
Lender to make similar payments in the future or a waiver by Lender of any
Event of Default under this Agreement.
9.5. Remedies Cumulative. Lender's rights and remedies
under this Agreement, the Loan Documents, and all other agreements shall be
cumulative. Lender shall have all other rights and remedies not inconsistent
herewith as provided under the Code, by law, or in equity. No exercise by
Lender of one right or remedy shall be deemed an election, and no waiver by
Lender of any Event of Default on Borrower's part shall be deemed a continuing
waiver. No delay by Lender shall constitute a waiver, election, or acquiescence
by it.
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9.6. Application of Collateral Proceeds. The proceeds
and/or avails of the Collateral, or any part thereof, and the proceeds and the
avails of any remedy hereunder (as well as any other amounts of any kind held
by Lender at the time of or received by Lender after, the occurrence of an
Event of Default hereunder) shall be paid to and applied as follows:
(a) First, to the payment of out-of-pocket
costs and expenses, including all amounts expended to preserve the value of the
Collateral, of foreclosure or suit, if any, and of such sale and the exercise
of any other rights or remedies, and of all proper fees, expenses, liability
and advances, including reasonable legal expenses and attorneys' fees, incurred
or made hereunder by Lender;
(b) Second, to the payment to Lender of the
amount then owing or unpaid on the Loans for Scheduled Payments, the Stipulated
Loss Value of the Loan Amount, and all other Obligations with respect to all
Loans, and in case such proceeds shall be insufficient to pay in full the whole
amount so due, owing or unpaid upon the Loans, then to the unpaid interest
thereon, then to unpaid principal thereof, then to the Stipulated Loss Value of
the Loan Amount with respect to all Loans, and then to the payment of other
amounts then payable to Lender under any of the Loan Documents; and
(c) Third, to the payment of the surplus, if
any, to Borrower, its successors and assigns, or to whomsoever may be lawfully
entitled to receive the same.
9.7. Reinstatement of Rights. If Lender shall have
proceeded to enforce any right under this Agreement or any other Loan Document
by foreclosure, sale, entry or otherwise, and such proceedings shall have been
discontinued or abandoned for any reason or shall have been determined
adversely, then and in every such case (unless otherwise ordered by a court of
competent jurisdiction), Lender shall be restored to its former position and
rights hereunder with respect to the Property subject to the security interest
created under this Agreement.
10. Waivers; Indemnification.
10.1. Demand; Protest. Borrower waives demand, protest,
notice of protest, notice of default or dishonor, notice of payment and
nonpayment. notice of any default, nonpayment at maturity, release, compromise,
settlement, extension, or renewal of accounts, documents, instruments, chattel
paper, and guarantees at any time held by Lender on which Borrower may in any
way be liable.
10.2. Lender's Liability for Collateral. So long as Lender
complies with its obligations, if any, under Section 9207 of the Code, Lender
shall not in any way or manner be liable or responsible for: (a) the
safekeeping of the Collateral; (b) any loss or damage thereto occurring or
arising in any manner or fashion from any cause; (c) any diminution in the
value thereof; or (d) any act or default of any carrier, warehouseman, bailee,
forwarding agency, or other Person whomsoever. All risk of loss, damage or
destruction of the Collateral shall be borne by Borrower.
10.3. Indemnification. Whether or not the transactions
contemplated hereby shall be consummated:
(a) General Indemnity. Borrower shall pay,
indemnify, and hold Lender and its officers, directors, employees, counsel,
partners, agents and attorneys-in-fact (each, an "Indemnified Person") harmless
from and against any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, charges, expenses or disbursements
(including Lender's Expenses and reasonable attorney's fees and the allocated
cost of in-house counsel) of any kind or nature whatsoever with respect to the
execution, delivery, enforcement, performance and administration of this
Agreement and any other Loan Documents, or the transactions contemplated hereby
and thereby, and with respect to any investigation, litigation or proceeding
(including any case, action or proceeding before any court or other
Governmental Authority relating to bankruptcy, reorganization, insolvency,
liquidation, dissolution or relief of debtors or any appellate proceeding)
related to this Agreement or the Loans or the use of the proceeds thereof,
whether or not any Indemnified Person is a party thereto (all the foregoing,
collectively, the "Indemnified Liabilities"); provided, that Borrower shall
have no obligation hereunder to any
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Indemnified Person with respect to Indemnified Liabilities arising from the
gross negligence or willful misconduct of such Indemnified Person.
(b) Environmental Indemnity.
(i) Borrower hereby agrees to
indemnify, defend and hold harmless each Indemnified Person, from and against
any and all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, charges, expenses or disbursements (including
reasonable attorneys' fees and the allocated cost of in-house counsel and
internal environmental audit or review services), which may be incurred by or
asserted against such Indemnified Person in connection with or arising out of
any pending or threatened investigation, litigation or proceeding, or any
action taken by any Person, with respect to any Environmental Claim arising out
of or related to any Property owned, leased or operated by Borrower. No action
taken by legal counsel chosen by Lender in defending against any such
investigation, litigation or proceeding or requested remedial, removal or
response action (except for actions which constitute fraud, willful misconduct,
gross negligence or material violations of law) shall vitiate or in any way
impair Borrower's obligation and duty hereunder to indemnify and hold Lender
harmless. Lender agrees to use reasonable efforts to cooperate with Borrower
respecting the defense of any matter indemnified hereunder, except insofar as
and to the extent that their respective interests may be adverse to Borrower's,
in Lender's sole discretion.
(ii) In no event shall any site visit,
observation, or testing by Lender be deemed a representation or warranty that
Hazardous Materials are or are not present in, on, or under the site, or that
there has been or shall be compliance with any Environmental Law. Neither
Borrower nor any other Person is entitled to rely on any site visit,
observation, or testing by any Lender. Except as otherwise provided by law,
Lender owes no duty of care to protect Borrower or any other Person against, or
to inform Borrower or any other party of, any Hazardous Materials or any other
adverse condition affecting any site or Property. Lender shall not be obligated
to disclose to Borrower or any other Person any report or findings made as a
result of, or in connection with, any site visit, observation, or testing by
Lender.
(c) Survival; Defense. The obligations in this
Section 10.3 shall survive payment of all other Obligations. At the election of
any Indemnified Person, Borrower shall defend such Indemnified Person using
legal counsel satisfactory to such Indemnified Person in such Person's sole
discretion, at the sole cost and expense of Borrower. All amounts owing under
this Section 10.3 shall be paid within thirty (30) days after written demand.
11. Notices. Unless otherwise provided in this Agreement, all
notices or demands by any party relating to this Agreement or any other
agreement entered into in connection herewith shall be in writing and (except
for financial statements and other informational documents which may be sent by
first-class mail, postage prepaid) shall be personally delivered or sent by
certified mail, postage prepaid, return receipt requested, or by prepaid
facsimile to Borrower or to Lender, as the case may be, at their respective
addresses set forth below:
If to Borrower: Array Biopharma Inc.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇. ▇▇-▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, CFO
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
If to Bank: Silicon Valley Bank
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
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with a copy to:
Silicon Valley Bank
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: Loan Services
FAX: (▇▇▇) ▇▇▇-▇▇▇▇
The parties hereto may change the address at which they are to receive
notices hereunder, by notice in writing in the foregoing manner given to the
other.
12. General Provisions.
12.1. Successors and Assigns. This Agreement shall bind
and inure to the benefit of the respective successors and permitted assigns of
each of the parties; provided, however, that neither this Agreement nor any
rights hereunder may be assigned by Borrower without Lender's prior written
consent, which consent may be granted or withheld in Lender's sole discretion.
Lender shall have the right without the consent of or notice to Borrower to
sell, transfer, negotiate, or grant participations in all or any part of, or
any interest in Lender's rights and benefits hereunder.
12.2. Time of Essence. Time is of the essence for the
performance of all obligations set forth in this Agreement.
12.3. Severability of Provisions. Each provision of this
Agreement shall be severable from every other provision of this Agreement for
the purpose of determining the legal enforceability of any specific provision.
12.4. Entire Agreement; Construction; Amendments and
Waivers.
(a) This Agreement and each of the other Loan
Documents dated as of the date hereof, taken together, constitute and contain
the entire agreement among Borrower and Lender and supersede any and all prior
agreements, negotiations, correspondence, understandings and communications
between the parties, whether written or oral, respecting the subject matter
hereof.
(b) Any and all amendments, modifications,
discharges or waivers of, or consents to any departures from any provision of
this Agreement or of any of the other Loan Documents shall not be effective
without the written agreement of the party against whom such enforcement is
sought and shall not be effective without the written consent of Lender. Any
waiver or consent with respect to any provision of the Loan Documents shall be
effective only in the specific instance and for the specific purpose for which
it was given. No notice to or demand on Borrower in any case shall entitle
Borrower to any other or further notice or demand in similar or other
circumstances. Any amendment, modification, waiver or consent effected in
accordance with this Section 12.4 shall be binding upon Lender and on Borrower.
12.5. Reliance by Lender. All covenants, agreements,
representations and warranties made herein by Borrower shall, notwithstanding
any investigation by Lenders, be deemed to be material to and to have been
relied upon by Lender.
12.6. No Set-Offs by Borrower. All sums payable by
Borrower pursuant to this Agreement or any of the other Loan Documents shall be
payable without notice or demand and shall be payable in United States Dollars
without set-off or reduction of any manner whatsoever.
12.7. Counterparts. This Agreement may be executed in any
number of counterparts and by different parties on separate counterparts, each
of which, when executed and delivered, shall be deemed to be an original, and
all of which, when taken together, shall constitute but one and the same
Agreement.
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12.8. Survival. All covenants, representations and
warranties made in this Agreement shall continue in full force and effect so
long as any Obligations remain outstanding. The obligations of Borrower to
indemnify Lender with respect to the expenses, damages, losses, costs and
liabilities described in Section 10.3 shall survive until all applicable
statute of limitations periods with respect to actions that may be brought
against Lender have run.
13. Relationship of Parties. Borrower and Lender acknowledge,
understand and agree that the relationship between the Borrower, on the one
hand, and Lender, on the other, is, and at all time shall remain solely that of
a borrower and lender. Lender shall not under any circumstances be construed to
be partners or joint venturers of Borrower or any of its Affiliates; nor shall
Lender under any circumstances be deemed to be in a relationship of confidence
or trust or a fiduciary relationship with Borrower or any of its Affiliates, or
to owe any fiduciary duty to Borrower or any of its Affiliates. Lender does not
undertake or assume any responsibility or duty to Borrower or any of its
Affiliates to select, review, inspect, supervise, pass judgment upon or
otherwise inform the Borrower or any of its Affiliates of any matter in
connection with its or their Property, any Collateral held by Lender or the
operations of Borrower or any of its Affiliates. Borrower and each of its
Affiliates shall rely entirely on their own judgment with respect to such
matters, and any review, inspection, supervision, exercise of judgment or
supply of information undertaken or assumed by Lender in connection with such
matters is solely for the protection of Lender and neither Borrower nor any
Affiliate is entitled to rely thereon.
14. Choice of Law and Venue; Jury Trial Waiver. THIS AGREEMENT
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 THE COUNTY OF SANTA ▇▇▇▇▇, STATE OF
CALIFORNIA. BORROWER AND LENDER HEREBY WAIVE THEIR RESPECTIVE RIGHTS TO A JURY
TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF ANY OF THE
LOAN DOCUMENTS OR ANY OF THE TRANSACTIONS CONTEMPLATED THEREIN, INCLUDING
CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW
OR STATUTORY CLAIMS.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed as of the date first above written.
ARRAY BIOPHARMA INC.
By: /s/ ▇▇▇▇ CARRIERS
-------------------------------------
Title: CFO
----------------------------------
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
-------------------------------------
Title: COD
----------------------------------
SILICON VALLEY BANK
By: /s/
-------------------------------------
Title: VP
----------------------------------
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LIST OF EXHIBITS AND SCHEDULES
Exhibit A - Collateral
Exhibit B - Form of Warrant
Exhibit C - [Intentionally Omitted]
Exhibit D - Form of Loan Agreement Supplement
Schedule 1 - Existing Liens
Schedule 2 - Borrower's Trade Names
Schedule 3 - Location of Collateral
Schedule 4 - Subsidiaries
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EXHIBIT A
DEBTOR/BORROWER: ARRAY BIOPHARMA INC.
SECURED PARTY/LENDER: SILICON VALLEY BANK
COLLATERAL
The Collateral shall consist of all right, title and interest of
Debtor in and to all the following:
Financed Equipment. All right, title, interest, claims and demands of
Debtor in and to each and every item of equipment, fixtures or personal
property which is financed with a "Loan" pursuant to that certain Loan and
Security Agreement, dated as of March 26, 1999 (the "Loan Agreement"), by and
among Debtor and Secured Party, including, without limitation, the equipment,
fixtures and personal property described in Annex A hereto (which such
equipment, fixtures and personal property shall remain subject to the lien of
the Loan Agreement until specifically released pursuant to Section 4.3 of the
Loan Agreement), whether now owned or hereafter acquired, together with all
substitutions, renewals or replacements of and additions, improvements, and
accessions to any and all of such equipment, fixtures or personal property (all
such equipment, fixtures, personal property, accessories, parts, appurtenances,
substitutions, renewals, replacements, additions, improvements, and accessions
are herein called, collectively, the "Financed Equipment"), together with all
the rents, issues, income, profits and avails therefrom and the proceeds
thereof, including, without limitation, insurance, condemnation, requisition or
similar payments, and all proceeds from sales, renewals, releases or other
dispositions thereof.
28
ANNEX A
to
Exhibit A
The following represent further specific descriptions of the Financed
Equipment:
FINANCED EQUIPMENT
29
EXHIBIT B
WARRANT
30
Exhibit C
[INTENTIONALLY OMITTED]
31
EXHIBIT D
FORM OF LOAN AGREEMENT SUPPLEMENT
LOAN AGREEMENT SUPPLEMENT No. [ ]
LOAN AGREEMENT SUPPLEMENT No. [ ], dated ______________, 199____
("Supplement"), to the Loan and Security Agreement dated as of March 26, 1999
(the "Loan Agreement) by and among Array Biopharma Inc., a ______________
corporation ("Borrower"), and Silicon Valley Bank ("Lender").
Capitalized terms used herein but not otherwise defined herein are
used with the respective meanings given to such terms in the Loan Agreement.
1. To secure the prompt payment by Borrower of the principal of and
interest on, and all other amounts from time to time outstanding under the Loan
Agreement, and the performance and observance by Borrower of all the
agreements, covenants and provisions contained in the Loan Agreement, Borrower
does hereby grant unto Lender, its successors and assigns, a first priority
security interest in all of Borrower's right, title and interest in each item
of equipment and other property described in Annex A hereto, which equipment
and other property shall be deemed to be additional "Financed Equipment." The
list of Financed Equipment in Annex A hereto shall be construed as a supplement
to ANNEX A TO EXHIBIT A to the Loan Agreement and shall form a part thereof,
and the Loan Agreement is hereby incorporated by reference herein and is hereby
ratified, approved and confirmed.
2. Attached as Annex B hereto is the Loan Terms Schedule with respect
to the Loan the proceeds of which will be used to finance the Financed
Equipment listed in Annex A hereto.
3. The proceeds of the Loan should be transferred to Borrower's
account with Bank set forth below:
Bank Name: Silicon Valley Bank
Bank Address:
----------------------------
Account No.:
----------------------------
4. Borrower hereby certifies that (a) the foregoing information is
true and correct and authorizes Lender to endorse in its books and records, the
Basic Rate applicable to the Funding Date of the Loan contemplated in this Loan
Agreement Supplement and the principal amount set forth in the Loan Terms
Schedule; (b) the representations and warranties made by Borrower in Section 5
of the Loan Agreement and in the other Loan Documents are true and correct on
the date hereof and will be true and correct on such Funding Date; (c) Borrower
has met or will by such Funding Date meet all conditions set forth in Section 3
of the Loan Agreement; (d) Borrower is now, and on such Funding Date will be,
in compliance with the covenants and the requirements contained in Sections 6
and 7 of the Loan Agreement; and (e) no Default or Event of Default has
occurred and is continuing under the Loan Agreement.
5. This Supplement is being delivered in the State of California.
6. This Supplement may be executed by Borrower and Lender in separate
counterparts, each of which when so executed and delivered shall be an
original, but all such counterparts shall together constitute but one and the
same instrument.
32
IN WITNESS WHEREOF, Borrower and Lender have caused this Supplement to
be duly executed and delivered as of this day and year first above written.
ARRAY BIOPHARMA INC.
By:
-----------------------------
Name:
---------------------------
Title:
--------------------------
SILICON VALLEY BANK
By:
-----------------------------
Name:
---------------------------
Title:
--------------------------
33
Annex A - Description of Financed Equipment
34
Annex B - Loan Terms Schedule
35
ANNEX A
to
EXHIBIT D
The Financed Equipment being financed with the Loan for which this
Loan Agreement Supplement is being executed is listed below. Upon the funding
of such Loan, this schedule automatically shall be deemed to be a part of Annex
A to Exhibit A to the Loan Agreement.
FINANCED EQUIPMENT
See Attached Pages.
36
ANNEX B
LOAN TERMS SCHEDULE
Loan Funding Date: ______________, 199__
Original Loan Amount: $______________
Loan Factor: ______________%
Original Scheduled Payment Amount: $______________
Final Payment: An additional amount equal to the Final Payment
Percentage multiplied by the original Loan Amount then in effect, shall be paid
on the Maturity Date with respect to such Loan.
Stipulated Loss Value:
Payment No. Payment Date Stipulated Loss Value *
1
2
3
4
. . .
35
[[36/42]]
. . .
*/ Each Stipulated Loss Value amount assumes payment of all Scheduled
Payments due on or before the indicated Payment Date.
37
SCHEDULE 1
EXISTING LIENS
38
SCHEDULE 2
BORROWER'S TRADE NAMES
39
SCHEDULE 3
LOCATION OF CHIEF EXECUTIVE OFFICE; PRINCIPAL
PLACE OF BUSINESS; COLLATERAL
40
SCHEDULE 4
SUBSIDIARIES