PROMISSORY NOTE
BORROWER: ROSETTA BLOSYSTEMS, INC.
KIRKLAND 405 CORPORATE CENTER
12040 000 XXXXXX XX #000
XXXXXXXX, XX 00000
LENDER: SILICON VALLEY BANK, A CALIFORNIA CHARTERED BANK
PACIFIC NORTHWEST LOAN PRODUCTION XXXXXX
000 000XX XXXXXX, X.X., XXXX 000
XXXXXXXX, XX 00000
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INITIAL RATE: 10.250%
PRINCIPAL AMOUNT: $750,000.00 DATE OF NOTE: FEBRUARY 13, 1997
PROMISE TO PAY. Rosetta Biosystems, Inc. ("Borrower") promises to pay to Silicon
Valley Bank, a California chartered bank ("Lender"), or order, in lawful money
of the United States of America, the principal amount of Seven Hundred Fifty
Thousand & 00/100 Dollars ($750,000.00) or so much as may be outstanding,
together with interest on the unpaid outstanding principal balance of each
advance. Interest shall be calculated from the date of each advance until
repayment of each advance.
PAYMENT. Borrower will pay this loan in accordance with the following payment
schedule:
Through the term of the Note, Borrower will pay regular monthly
payments of all accrued unpaid interest due as of each payment date,
beginning March 13, 1997 and all subsequent interest payments will be
due on the same day of each month thereafter. The Equipment Draw Period
shall begin as of this date and shall end on August 13, 1997 (the
"Equipment Draw Period"). The aggregate advances made during the
Equipment Draw Period, advanced for the purpose of purchasing equipment
reasonably acceptable to Lender, supported by invoices submitted by
Borrower to Lender, will be payable in thirty (30) even monthly
payments of principal plus interest due as of each payment date,
beginning September 13, 1997 and all subsequent payments of principal
and interest will be due on the same day of each month thereafter (the
"Equipment Term Schedule"). The final payment under the Equipment Tern,
Schedule, due on February 13, 2000, will be for all outstanding
principal plus all accrued interest not yet paid. Notwithstanding the
Equipment Term Schedule, all outstanding principal under loan, plus all
accrued interest not yet paid shall be due on August 13, 1996.
Interest on this Note is computed on a 365/360 simple interest basis: that is,
by applying the ratio of the annual interest rate over a year of 360 days
multiplied by the outstanding principal balance, multiplied by the actual number
of days the principal balance is outstanding. Borrower will pay Lender at
Lender's address shown above or at such other place as Lender may designate in
writing. Unless otherwise agreed or required by applicable law, payments will be
applied first to accrued unpaid interest, then to principal, and any remaining
amount to any unpaid collection costs and late charges.
VARIABLE INTEREST RATE. The interest rate on this Note is subject to change from
time to time based on changes in an index which is Lender's Prime Rate (the
"Index"). This is the rate Lender charges, or would charge, on 90-day unsecured
loans to the most creditworthy corporate customers. This
rate may or may not be the lowest rate available from Lender at any given time.
Lender will tell Borrower the current Index rate upon Borrower's request.
Borrower understands that Lender may make loans based on other rates as well.
The interest rate change will not occur more often than each time the prime rate
is adjusted by Silicon Valley Bank. The Index currently Is 8.250% per annum. The
Interest rate to be applied to the unpaid principal balance of this Note will be
at a rate of 2.000 percentage points over the Index, resulting In an Initial
rate of 10.250% per annum. NOTICE: Under no circumstances will the interest rate
on this Note be more than the maximum rate allowed by applicable law.
PREPAYMENT. Borrower agrees that all loan fees and other prepaid finance charges
are earned fully as of the date of the loan and will not be subject to refund
upon early payment (whether voluntary or as a result of default), except as
otherwise required by law. Except for the foregoing, Borrower may pay without
penalty all or a portion of the amount owed earlier than it is due. Early
payments will not, unless agreed to by Lender in writing, relieve Borrower of
Borrower's obligation to continue to make payments of accrued unpaid interest.
Rather, they will reduce the principal balance due.
DEFAULT. Borrower will be in default if any of the following happens: (a)
Borrower fails to make any payment when due. (b) Borrower breaks any promise
Borrower has made to Lender, or Borrower falls to comply with or to perform when
due any other term, obligation, covenant, or condition contained in this Note or
any agreement related to this Note, or in any other agreement or loan Borrower
has with Lender, provided that as to any default under such term, obligation,
covenant or condition that can be cured, has failed to cure within ten (10) days
after Borrower becomes aware of such default. (c) Borrower defaults under any
loan, extension of credit, security agreement, purchase or sales agreement, or
any other agreement, in favor of any other creditor or person that may
materially affect any of Borrower's property or Borrowers ability to repay this
Note or perform Borrower's obligations under this Note or any of the Related
Documents. (d) Any representation or statement made or furnished to Lender by
Borrower or on Borrowers behalf is false or misleading in any material respect
either now or at the time made or furnished. (e) Borrower becomes insolvent, a
receiver is appointed for any part of Borrower's property, Borrower makes an
assignment for the benefit of creditors, or any proceeding is commenced either
by Borrower or against Borrower under any bankruptcy or insolvency laws. (f) Any
creditor tries to take any of Borrower's property on or in which Lender has a
lien or security interest. This includes a garnishment of any of Borrower's
accounts with Lender. (g) Any guarantor dies or any of the other events
described In this default section occurs with respect to any guarantor of this
Note. (h) A material adverse change occurs in Borrowers financial condition, or
Lender believes the prospect of payment or performance of the Indebtedness is
impaired.
LENDER'S RIGHTS. Upon default, Lender may declare the entire unpaid principal
balance on this Note and all accrued unpaid Interest immediately due, without
notice, and then Borrower will pay that amount. Upon default, including failure
to pay upon final maturity. Lender, at its option, may also, if permitted under
applicable law, increase the variable interest rate on this Note to 5.000
percentage points over the otherwise effective interest rate. The interest rate
will not exceed the maximum rate permitted by applicable law. Lender may hire or
pay someone else to help collect this Note if Borrower does not pay. Borrower
also will pay Lender that amount. This includes, subject to any limits under
applicable law, Lender's attorneys' fees and Lender's legal expenses whether or
not there is a lawsuit, including attorneys' fees and legal expenses for
bankruptcy proceedings (including efforts to modify or vacate any automatic stay
or injunction), appeals, and any anticipated post-judgment collection services.
If not prohibited by applicable law, Borrower also will pay any court costs, in
addition to aft other sums provided bylaw. This Note has been delivered to
Lender and accepted by Lender in the State of Washington. If there is a lawsuit,
Borrower agrees upon Lender's request to submit to the jurisdiction of the
courts of King County, the State of Washington. Lender and Borrower hereby waive
the right to any
Jury trial in any action, proceeding, or counterclaim brought by either Lender
or Borrower against the Other. This Note shall be governed by and construed In
accordance with the laws of the State of Washington.
LINE OF CREDIT. Subject to the paragraph entitled `Payment", this Note evidences
a revolving line of credit advances under this Note, as well as directions for
payment from Borrower's accounts, may be requested orally or in writing by
Borrower or by an authorized person. Lender may, but need not, require that all
oral requests be confirmed in writing. Borrower agrees to be liable for all sums
either (a) advanced in accordance with the instructions of an authorized person
or (b) credited to any of Borrower's accounts with Lender. The unpaid principal
balance owing on this Note at any time may be evidenced by endorsements on this
Note or by Lender's internal records, including daily computer print-outs.
Lender will have no obligation to advance funds under this Note if: (a) Borrower
or any guarantor is in default under the terms of this Note or any agreement
that Borrower or any guarantor has with Lender, including any agreement made in
connection with the signing of this Note; (b) Borrower or any guarantor ceases
doing business or is insolvent; (c) any guarantor seeks, claims or otherwise
attempts to limit, modify or revoke such guarantor's guarantee of this Note or
any other loan with Lender, unless Lender consents to such limitation or
revocation; or (d) Borrower has applied funds provided pursuant to this Note for
purposes other than those authorized by Lender.
REQUEST TO DEBIT ACCOUNTS. Borrower will regularly deposit funds received in
accounts maintained by Borrower at Silicon Valley Bank. Borrower hereby requests
and authorizes Lender to debit any accounts Borrower has with Lender, including,
without limitation, Account Number ______________________ for payments of
principal and interest owing on the loan and any other obligations owing from
Borrower to Lender. Lender will notify Borrower of all debits which Lender makes
against Borrower's accounts. Any such debits against Borrowers accounts in no
way shall be deemed a set-off.
BUSINESS LOAN AGREEMENT. This Note is subject to and shall be governed by all
the terms and conditions of the Business Loan Agreement of even date herewith,
between Borrower and Lender, as such agreement may be amended from time to time,
which Business Loan Agreement is incorporated herein by this reference.
PAYMENT OF LOAN FEE. Borrower shall pay to Lender a fee in the amount of Four
Thousand Eight Hundred and 00/100 Dollars ($4,800.00) plus all out-of-pocket
expenses.
GENERAL PROVISIONS. Lender may delay or forgo enforcing any of its rights or
remedies under this Note without losing them. Borrower and any other person who
signs, guarantees or endorses this Note, to the extent allowed by law, waive
presentment, demand for payment, protest and notice of dishonor. Upon any change
in the terms of this Note, and unless otherwise expressly stated in writing, no
party who signs this Note, whether as maker, guarantor, accommodation maker or
endorser, shall be released from liability. All such parties agree that Lender
may renew or extend (repeatedly and for any length of time) this loan, or
release any party or guarantor or collateral; or impair, fail to realize upon or
perfect Lender's security interest in the collateral; and take any other action
deemed necessary by Lender without the consent of or notice to anyone. All such
parties also agree that Lender may modify this loan without the consent of or
notice to anyone other than the party with whom the modification is made.
PRIOR TO SIGNING THIS NOTE, BORROWER HAS READ AND UNDERSTOOD ALL. THE PROVISIONS
OF THIS NOTE, INCLUDING THE VARIABLE INTEREST RATE PROVISIONS. BORROWER AGREES
TO THE TERMS OF THE NOTE AND ACKNOWLEDGES RECEIPT OF A
COMPLETED COPY OF THE NOTE.
ROSETTA BIOSYSTEMS, INC.
By: /s/ Xxxxx Xxxxxxxxx
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Name: Xxxxx Xxxxxxxxx
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Title: VP
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