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EXHIBIT 10.21
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ARRAY BIOPHARMA INC.
LOAN AND SECURITY AGREEMENT
WITH
SILICON VALLEY BANK
October 9, 1998
- CLOSING BINDER -
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ARRAY BIOPHARMA INC.
Loan and Security Agreement with Silicon Valley Bank
A. THE TRANSACTION
On October 9, 1998, Array BioPharma Inc. (the "Borrower") entered into a Loan
and Security Agreement (the "Loan") with Silicon Valley Bank ("SVB") for the
purchase of new equipment to be secured by such equipment. In connection with
the Loan, the Borrower issued to SVB 40,000 warrants for the purchase of Series
A preferred stock and the Investors' Rights Agreement of Borrower was amended to
grant SVB certain registration rights with respect to such stock.
B. LIST OF CLOSING DOCUMENTS
(Unless otherwise indicated, all documents are dated October 9, 1998)
1. Loan and Security Agreement with Exhibits and Schedules
2. Warrant to Purchase 40,000 Shares of Series A Preferred Stock
3. Amendment to Investors' Rights Agreement
4. Waiver of Right of First Refusal
5. Landlord Consent dated October 13, 1998
6. Certificate of Secretary
Exhibit A: Board Resolutions of Borrower
Exhibit B: Certificate of Incorporation of Borrower, as amended
Exhibit C: Bylaws of Borrower
7. Good Standing Certificates dated October 1, 1998
8. Borrower's Opinion of Counsel
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LOAN AND SECURITY AGREEMENT
Agreement No. Dated as of October 9, 1998
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by and between
SILICON VALLEY BANK
as lender
and
ARRAY BIOPHARMA INC.
a Delaware corporation
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇. ▇▇-▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
as borrower
TOTAL CREDIT AMOUNT: $1,500,000
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:
Number of shares: 40,000
Class of stock: Series A Preferred
Initial exercise price: $1.00 per share
Commitment Termination Date: October 9, 1999
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
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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....................................11
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......................................12
5.1. Due Organization and Qualification.........................12
5.2. Authority..................................................12
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...................................................13
5.11. Environmental Quality......................................13
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
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TABLE OF CONTENTS
(Continued)
Page
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6. Affirmative Covenants...............................................13
6.1. Good Standing..............................................13
6.2. Government Compliance......................................14
6.3. Financial Statements, Reports, Certificates................14
6.4. Notice of Event of Loss....................................14
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.......................................16
6.11. Environmental Laws.........................................16
6.12. Further Assurances.........................................16
7. Negative Covenants..................................................16
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...........................................17
8.6. Judgments..................................................17
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........................................19
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............................................20
11. Notices.............................................................20
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TABLE OF CONTENTS
(Continued)
Page
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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.........................................22
12.6. No Set-Offs by Borrower....................................22
12.7. Counterparts...............................................22
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 October 9, 1998,
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.
"Landlord Consent" means a consent in the form of Exhibit C or
such other form as Lender may agree to accept.
"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 Fee" means the non-refundable fee equal to $5,000
previously paid by Borrower to Bank, in consideration of Bank's written proposal
to Borrower dated July 9, 1998, specifying certain terms of the credit facility
described in this Agreement, which fee is to be applied as set forth in Section
2.4(d).
"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.
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"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 after, upon or not more than one hundred fifty
(150) days with respect to Financed Equipment financed with the initial Loan,
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.
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"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.
"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
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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 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
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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.
(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. Unless a Loan is prepaid in full, 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 Landlord Consent from the owner of each building in which
Collateral is anticipated to be located as set forth in Schedule 3.
(e) 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.
(f) 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
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authorities stating that Borrower is in compliance with the franchise tax laws
of each such state, each dated as of a recent date.
(g) Evidence of the insurance coverage required by Section 6.8
of this Agreement.
(h) A favorable opinion of Borrower's counsel, dated as of the
closing date, in the form attached hereto as Exhibit E.
(i) 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.
(j) Payment of the Loan Fee specified in Section 2.4 hereof and
any other unreimbursed Lender's Expenses.
(k) 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
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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; 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.
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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.
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.
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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 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.
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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
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
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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. 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 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.
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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:
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
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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.
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);
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(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;
(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
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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.
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.
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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 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:
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If to Borrower: Array Biopharma Inc.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇. ▇▇-▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇▇▇, COO
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
If to Bank: Silicon Valley Bank
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
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.
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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.
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.
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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/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
---------------------------------
▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Chief Operating Officer
SILICON VALLEY BANK
By: /s/
---------------------------------
Title:
Vice President
-------------------------------
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LIST OF EXHIBITS AND SCHEDULES
Exhibit A - Collateral
Exhibit B - Form of Warrant
Exhibit C - Form of Landlord Consent
Exhibit D - Form of Loan Agreement Supplement
Exhibit E - Form of Borrower's Opinion
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 October 9, 1998 (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.
32
ANNEX A
to
Exhibit A
The following represent further specific descriptions of the Financed
Equipment:
FINANCED EQUIPMENT
33
EXHIBIT B
WARRANT
34
Exhibit C
FORM OF LANDLORD'S CONSENT
RECORDING REQUESTED BY
AND WHEN RECORDED RETURN TO:
SILICON VALLEY BANK
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: Loan Services
CONSENT TO REMOVAL OF PERSONAL PROPERTY
KNOW ALL PERSONS BY THESE PRESENTS:
(a) The undersigned has an interest as owner and landlord in the
following described real property (the "Real Property"):
That certain real property in the County of ______________, State of
Colorado, described as:
SEE ATTACHMENT 1 ATTACHED HERETO FOR FULL LEGAL DESCRIPTION, commonly
known as
(b) Array Biopharma Inc., a Delaware corporation ("Borrower"), has
entered into or will enter into a Loan and Security Agreement with Silicon
Valley Bank ("Lender"), dated as of October 9, 1998 (as amended and supplemented
from time to time, the "Loan Agreement").
(c) Lender, as a condition to entering into the Loan Agreement,
requires that the undersigned consent to the removal by Lender of the equipment
and other assets that Borrower has financed with the proceeds of the Loan
Agreement (hereinafter called "Equipment") from the Real Property, no matter how
it is affixed thereto, and to the other matters set forth below.
NOW, THEREFORE, for good and sufficient consideration, receipt of which
is hereby acknowledged, the undersigned consents to the placing of the Equipment
on the Real Property, and agrees with Lender as follows:
1. The undersigned waives and releases each and every right which
undersigned now has, under laws of the State of Colorado or by virtue of the
lease for the Real Property now in effect, to levy or distrain upon for rent, in
arrears, in advance or both, or to claim or assert title to the Equipment that
is already on said Real Property, or may hereafter be delivered or installed
thereon.
2. The Equipment shall be considered to be personal property and
shall not be considered part of the Real Property regardless of whether or by
what means it is or may become attached or affixed to the Real Property.
3. The undersigned will permit Lender, or their agent or
representative, to enter upon the Real Property for the purpose of exercising
any right they may have under the terms of the Loan Agreement or otherwise,
including, without limitation, the right to remove the Equipment; provided,
however, that if Lender, in removing the Equipment damage any improvements of
the undersigned on the Real Property, Lender will, at its expense, cause same to
be repaired.
4. This agreement shall be binding upon the heirs, successors and
assigns of the undersigned and shall inure to the benefit of Lender and its
successors and assigns.
35
IN WITNESS WHEREOF, the undersigned has executed this instrument at
__________________, this ______________ day of __________________,199____.
------------------------------------------
By:
--------------------------------------
Title:
-----------------------------------
The foregoing Consent must be acknowledged before a Notary Public.
[ATTACH NOTARY JURAT]
36
ATTACHMENT 1
LEGAL DESCRIPTION OF PREMISES
[To Be Provided By Borrower]
37
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 October 9, 1998
(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.
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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:
---------------------------------
39
Annex A - Description of Financed Equipment
40
Annex B - Loan Terms Schedule
41
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.
42
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.
43
EXHIBIT E
ITEMS TO BE COVERED BY OPINION OF BORROWER'S COUNSEL
The opinions hereafter expressed are subject to the following
qualifications:
(a) We assume the genuineness of all signatures on original documents,
the authenticity and completeness of all documents submitted to us as originals,
the conformity to original documents of all copies submitted to us and the due
execution and delivery of all documents (except as to due execution and delivery
by the Company) where due execution and delivery are a prerequisite to the
effectiveness thereof;
(b) We express no opinion as to the effect of applicable bankruptcy,
insolvency, reorganization, moratorium or other similar federal or state laws
affecting the rights of creditors;
(c) We express no opinion as to the effect of rules of law governing
specific performance, injunctive relief or other equitable remedies (regardless
of whether any such remedy is considered in a proceeding at law or in equity).
Based on and subject to the foregoing, we are of the opinion that:
1. Borrower is a corporation, duly organized, validly existing and in
good standing under the laws of the State of Delaware and is duly qualified and
authorized to do business in the state of Colorado [[and ___________________]].
2. Borrower has the full corporate power, authority and legal right,
and has obtained all necessary approvals, consents and given all notices to
execute and deliver the Loan Documents and perform the terms thereof.
3. The Loan Documents have been duly authorized, executed and delivered
by Borrower and constitute valid, legal and binding agreements.
4. To our knowledge, there is no action, suit, audit, investigation,
proceeding or patent claim pending or threatened against Borrower in any court
or before any governmental commission, agency, board or authority which might
have a material adverse effect on the business, condition or operations of
Borrower or the ability of Borrower to perform its obligations under the Loan
Documents.
5. The Shares issuable pursuant to exercise or conversion of the
Warrant have been duly authorized and reserved for issuance by Borrower and,
when issued in accordance with the terms thereof, will be validly issued, fully
paid and nonassessable.
6. The shares of Common Stock issuable upon conversion of the Shares
have been duly authorized and reserved and, when issued in accordance with the
terms of Borrower's Certificate of Incorporation, as amended, will be validly
issued, fully paid and nonassessable.
7. The rights, preferences, privileges and restrictions granted to or
imposed upon Borrower's Series [ ] Preferred Stock and the holders thereof are
as set forth in Borrower's Certificate of Incorporation, as amended to the Date
of Grant, a true and complete copy of which has been delivered to Lenders.
8. The execution and delivery of the Warrant are not, and the issuance
of the Shares upon exercise of the Warrant in accordance with the terms thereof
will not be, inconsistent with Borrower's Certificate of Incorporation, as
amended, or Bylaws, do not and will not contravene any law, governmental rule or
regulation, judgment or order applicable to Borrower, and do not and will not
conflict with or contravene any provision of, or constitute a default under, any
indenture, mortgage, contract or other agreement or instrument of which Borrower
is a party or by which it is bound or require the consent or approval of, the
giving of notice to, the registration or filing with or the taking of any action
in respect of or by, any federal, state or local government authority or agency
or
44
other person, except for the filing of notices pursuant to federal and state
securities laws, which filings will be effected by the time required thereby.
45
SCHEDULE 1
EXISTING LIENS
46
SCHEDULE 2
BORROWER'S TRADE NAMES
47
SCHEDULE 3
LOCATION OF CHIEF EXECUTIVE OFFICE; PRINCIPAL
PLACE OF BUSINESS; COLLATERAL
48
SCHEDULE 4
SUBSIDIARIES
