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EXHIBIT 10.11
SENIOR LOAN AND SECURITY AGREEMENT NO. 6261
THIS SENIOR LOAN AND SECURITY AGREEMENT NO. 6261 (this "Security
Agreement") is dated as of July 1, 1999 between XCYTE THERAPIES, NC., a Delaware
corporation ("Borrower") and PHOENIX LEASING INCORPORATED, a California
corporation ("Lender").
RECITALS
A. Borrower desires to borrow from Lender in one or more borrowings the
Commitment amount as defined in Section 3(a)(ii) below, and Lender desires to
loan, subject to the terms and conditions herein set forth, such amount to
Borrower (each, a "Loan" and collectively, the "Loans"). Such borrowings shall
be evidenced by one or more Senior Secured Promissory Notes (each, a "Note" and
collectively, the "Notes"), in the form attached hereto.
B. As security for Borrower's obligations to Lender under this Security
Agreement, the Notes and any other agreement between Borrower and Lender,
Borrower will grant to Lender hereunder a first priority security interest in
certain of its equipment, machinery, fixtures, other items and intangibles, and
also certain custom use equipment, installation and delivery costs, purchase
tax, toolings, software and other items generally considered fungible or
expendable ("Soft Costs") whether now owned by Borrower or hereafter acquired,
and all substitutions and replacements of and additions, improvements,
accessions and accumulations to said equipment, machinery and fixtures and other
items, together with all rents, issues, income, profits and proceeds therefrom
which is described on the Note attached hereto or any subsequently-executed Note
entered into by Lender and Borrower and which incorporates this Security
Agreement by reference (collectively, the "Collateral").
NOW, THEREFORE, THE PARTIES AGREE AS FOLLOWS:
SECTION 1. TERM OF AGREEMENT. The term of this Security Agreement begins
on the date set forth above and shall continue thereafter and be in effect so
long as and at any time any Note entered into pursuant to this Security
Agreement is in effect. The Term and monthly payment amount payable with respect
to each item of Collateral shall be as set forth in and as stated in the
respective Note(s). The terms of each Note hereto are subject to all conditions
and provisions of this Security Agreement as it may at any time be amended. Each
Note shall constitute a separate and independent Loan and contractual obligation
of Borrower and shall incorporate the terms and conditions of this Security
Agreement and any additional provisions contained in such Note. In the event of
a conflict between the terms and conditions of this Security Agreement and any
provisions of such Note, the provisions of such Note shall prevail with respect
to such Note only.
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SECTION 2. NON-CANCELABLE LOAN. This Security Agreement and each Note
cannot be canceled or terminated except as expressly provided herein. Borrower
agrees that its obligations to pay all monthly payment amounts and other sums
payable hereunder (and under any Note) and the rights of Lender and any assignee
in and to such monthly payment amounts and other sums, are absolute and
unconditional and are not subject to any abatement, reduction, setoff, defense,
counterclaim or recoupment due or alleged to be due to, or by reason of, any
past, present or future claims which Borrower may have against Lender, any
assignee, the manufacturer or seller of the Collateral, or against any person
for any reason whatsoever.
SECTION 3. LENDER COMMITMENT. (a) General Terms. Subject to the terms
and conditions of this Security Agreement, Lender hereby agrees to make one or
more senior secured Loans to Borrower, subject to the following conditions: (i)
each Loan shall be evidenced by a Note; (ii) the total principal amount of the
Loans shall not exceed $1,000,000 in the aggregate (the "Commitment") provided
that no more than 20% of the amount of the utilized Commitment may be used to
finance Soft Costs; (iii) the amount of each Loan shall be at least $25,000
except for a final Loan which may be less than $25,000; (iv) Lender shall not be
obligated to make any Loan after August 31, 2000; (v) at the time of each Loan,
no Event of Default or event which with the giving of notice or passage of time,
or both, could become an Event of Default shall have occurred, as reasonably
determined by Lender, and certified by Borrower; (vi) at the time of each Loan,
Borrower has reimbursed Lender for all UCC filing and search costs, inspection
and labeling costs, and appraisal fees, if any; (vii) for each Loan, Borrower
shall present to Lender a list of proposed Collateral for approval by Lender in
its sole discretion; (viii) for each Loan, Borrower shall have provided Lender
with each of the closing documents described in Exhibit A hereto (which
documents shall be in form and substance reasonably acceptable to Lender); (ix)
Borrower is performing substantially in accordance with its business plan
referred to as "Xcyte Therapies Cash Position" labeled Budget 99 to 00 Revised
.xls and "Xctye Therapies Cash Flow Statement" labeled Revised for 3.16.99 Board
Meeting" (the "Business Plan") (all quarterly figures will be prorated to
monthly), as may be amended from time to time in form and substance acceptable
to Lender; (x) there shall be no material adverse change in Borrower's
condition, financial or otherwise, that would materially impair the ability of
Borrower to meet its payment and other obligations under this Loan (a "Material
Adverse Effect") as reasonably determined by Lender, and Borrower so certifies,
from (yy) the date of the most recent financial statements delivered by Borrower
to Lender to (zz) the date of the proposed Loan; (xi) prior to payment in full
of all Notes, Borrower shall not offer any loan secured by any equipment,
furniture or fixtures to any other person or entity other than Lender, unless
Lender declines to finance such transaction or Borrower and Lender are unable to
agree on the terms of such financing; (xii) Borrower shall use the proceeds of
all Loans hereunder to purchase or reimburse the purchase of Collateral; (xiii)
all Collateral has been marked and labeled by Lender or Lender's agent; and
(xiv) Lender has received in form and substance acceptable to Lender: (a)
Borrower's interim financial statements signed by a financial officer of
Borrower; and (b) complete copies of the Borrower's audit reports for its most
recent fiscal year when completed, which shall include at least Borrower's
balance sheet as of the close of such year, and Borrower's statement of income
and retained earnings and of changes in financial position for such year,
prepared on a consolidated basis and certified by independent public
accountants. Such certificate shall not be qualified or limited because of
restricted or limited
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examination by such accountant of any material portion of the company's records.
Such reports shall be prepared in accordance with generally accepted accounting
principles and practices consistently applied.
(b) The Notes. Each Loan shall be evidenced by a Note which may not be
prepaid in whole or in part. Each Note shall bear interest and be payable at the
times and in the manner provided therein. Following payment of the Indebtedness
related to each Note, Lender shall promptly return such Note, marked "canceled,"
to Borrower.
SECTION 4. SECURITY INTERESTS. (a) Borrower hereby grants to Lender a
first security interest in all Collateral; (b) This Security Agreement secures
(i) the payment of the principal of and interest on the Notes and all other sums
due thereunder and under this Security Agreement (the "Indebtedness") and (ii)
the performance by Borrower of all of its other covenants now or hereafter
existing under the Notes, this Security Agreement and any other obligation owed
by Borrower to Lender (the "Obligations").
SECTION 5. BORROWER'S REPRESENTATIONS AND WARRANTIES. Borrower
represents and warrants that (a) it is in good standing under the laws of the
state of its formation, duly qualified to do business and will remain duly
qualified during the term of each Loan in each state where necessary to carry on
its present business and operations, including the jurisdiction(s) where the
Collateral will be located as specified on each Exhibit A to each Note, except
where failure to be so qualified would not have a Material Adverse Effect; (b)
it has full authority to execute and deliver this Security Agreement and the
Notes and perform the terms hereof and thereof, and this Security Agreement and
the Notes have been duly authorized, executed and delivered and constitute valid
and binding obligations of Borrower enforceable in accordance with their terms;
(c) the execution and delivery of this Security Agreement and the Notes will not
contravene any law, regulation or judgment affecting Borrower or result in any
breach of any material agreement or other instrument binding on Borrower; (d) no
consent of Borrower's shareholders or holder of any indebtedness, or filing
with, or approval of, any governmental agency or commission, which has not
already been obtained or performed, as appropriate, is a condition to the
performance of the terms of this Security Agreement or the Notes; (e) there is
no action or proceeding pending or threatened against Borrower before any court
or administrative agency which might have a Material Adverse Effect on the
business, financial condition or operations of Borrower; (f) at the time any
Loan is made hereunder, Borrower owns and will keep all of the Collateral free
and clear of all liens, claims and encumbrances, and, except for this Security
Agreement, there is no deed of trust, mortgage, security agreement or other
third party interest against any of the Collateral other than Permitted Liens
(as defined below); (g) at the time any Loan is made hereunder, Borrower has
good and marketable title to the Collateral; (h) at the time any Loan is made
hereunder, all Collateral has been received, installed and is ready for use and
is satisfactory in all respects for the purposes of this Security Agreement; (i)
the Collateral is, and will remain at all times under applicable law, removable
personal property, which is free and clear of any lien or encumbrance except in
favor of Lender other than Permitted Liens (as defined below), notwithstanding
the manner in which the Collateral may be attached to any real property; (j) all
credit and financial information submitted to Lender herewith or at any other
time is and will at the time given be true and correct
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in all material respects; and (k) the security interest granted to Lender
hereunder is a first priority security interest, and (I) on or before January 1,
2000, Borrower's computer system shall be Year 2000 performance compliant and
will thus be able to accurately process date data from, into and between the
twentieth and twenty-first centuries including leap year calculations.
"Permitted Liens" shall mean and include: (i) liens for taxes or other
governmental charges not at the time delinquent or thereafter payable without
penalty or being contested in good faith; and (ii) liens of carriers,
warehousemen, mechanics, materialmen, vendors, landlords and other liens arising
by operation of law incurred in the ordinary course of business.
SECTION 6. METHOD AND PLACE OF PAYMENT. Borrower shall pay to Lender, at
such address as Lender specifies in writing, all amounts payable to it under
this Security Agreement and the Notes.
SECTION 7. LOCATION; INSPECTION; LABELS. All of the Collateral shall be
located at the address (the "Collateral Location") shown on Exhibit A to each
Note and shall not be moved unless Borrower has provided Lender with written
notice of the change in location and Lender has acknowledged receipt of the
notice. All of the records regarding the Collateral shall be located at 0000
Xxxxxxx Xxx Xxxxx, Xxxxx 000, Xxxxxxx, XX 00000, or such other location of which
Borrower has given notice to Lender in accordance with this Security Agreement.
Lender shall have the right to inspect Collateral, including records relating
thereto, and Borrower's books and records at any time (upon reasonable
notification) during regular business hours, such books and records to be
maintained in accordance with generally accepted accounting principles. Borrower
shall be responsible for all labor, material and freight charges incurred in
connection with any removal or relocation of Collateral which is requested by
Borrower and consented to by Lender, as well as for any charges due to the
installation or moving of the Collateral. Payments under the Notes and under
this Security Agreement shall continue during any period in which the Collateral
is in transit during a relocation. During Borrower's regular business hours and
upon at least two days' notice to Borrower, Lender or its agent shall xxxx and
label Collateral, which labels (to be provided by Lender) shall state that such
Collateral is subject to a security interest of Lender, and Borrower shall keep
such labels on the Collateral as so labeled.
SECTION 8. COLLATERAL MAINTENANCE. (a) General. Upon reasonable notice,
Borrower will permit Lender to inspect each item of Collateral and its
maintenance records during Borrower's regular business hours. Borrower will at
its sole expense comply with all applicable laws, rules, regulations,
requirements and orders with respect to the use, maintenance, repair, condition,
storage and operation of each item of Collateral. Any addition or improvement
that is so required or cannot be so removed will immediately become Collateral
of Lender. (b) Service and Repair. Borrower will at its sole expense maintain
and service and repair any damage to each item of Collateral in a manner
consistent with prudent industry practice and Borrower's own practice so that
such item of Collateral is at all times (i) in the same condition as when
delivered to Borrower, except for ordinary wear and tear, and (ii) in good
operating order for the function intended by its manufacturer's warranties and
recommendations.
SECTION 9. LOSS OR DAMAGE. Borrower assumes the entire risk of loss to
the Collateral through use, operation or otherwise. Borrower hereby indemnifies
and holds harmless
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Lender from and against all claims, loss of Loan payments, costs, damages, and
expenses relating to or resulting from any loss, damage or destruction of the
Collateral, any such occurrence being hereinafter called a "Casualty
Occurrence." Notwithstanding any Casualty Occurrence, the Loan to which such
casualtied item of Collateral is subject shall continue in full force and effect
without any abatement in the monthly payment due. Borrower shall, at its
election, (a) no later than thirty (30) days after such Casualty Occurrence
repair the Collateral returning it to good operating condition, (b) no later
than thirty (30) days after such Casualty Occurrence replace the Collateral with
Collateral acceptable to Lender in its reasonable discretion, in good condition
and repair taking all steps required by Lender to perfect Lender's first
priority security interest therein, which replacement Collateral shall be
subject to the terms of this Security Agreement, or (c) on the next regular
monthly payment date which falls after such thirty (30) days, or if there is no
such payment date, thirty (30) days after such Casualty Occurrence pay to Lender
an amount equal to the Balance Due (as defined below) for each lost or damaged
item of Collateral. The Balance Due for each such item is the sum of: (i) all
amounts for each item which may be then due or accrued to the payment date, plus
(ii) as of such payment date, an amount equal to the product of the fraction
specified below times the sum of all remaining payments under the respective
Note, including the amount of any mandatory or optional payment required or
permitted to be paid by Borrower to Lender at the maturity of the Note
discounting to present value the amounts in (ii) at a rate of 6% per annum
compounded monthly on the basis of a 360 day year ("Discount Rate"). The
numerator of the fraction shall be the collateral value (as set forth on the
applicable Note) of the item and the denominator shall be the aggregate
collateral value of all items under the Note. Upon the making of such payments,
Lender shall release such item of Collateral from its lien hereunder.
SECTION 10. INSURANCE. Borrower at its expense shall keep the Collateral
insured against all risks of physical loss for at least the replacement value of
the Collateral and in no event for less than the amount payable following a
Casualty Occurrence (as provided in Section 9). Such insurance shall provide for
a loss payable endorsement to Lender and/or any assignee of Lender. If there is
no event of default by Borrower, any insurance proceeds received by Lender shall
be released by Lender for application to the costs incurred by Borrower to
repair the Collateral. Borrower shall maintain commercial general liability
insurance, including products liability and completed operations coverage, with
respect to loss or damage for personal injury, death or property damage in an
amount not less than $2,000,000 in the aggregate, naming Lender and/or Lender's
assignee as additional insured. Such insurance shall contain insurer's agreement
to give thirty (30) days' advance written notice to Lender before cancellation
or material change of any policy of insurance. Borrower will provide Lender and
any assignee of Lender with a certificate of insurance from the insurer
evidencing Lender's or such assignee's interest in the policy of insurance. Such
insurance shall cover any Casualty Occurrence to any unit of Collateral.
Notwithstanding anything in Section 9 or this Section 10 to the contrary, this
Security Agreement and Borrower's obligations hereunder shall remain in full
force and effect with respect to any unit of Collateral which is not subject to
a Casualty Occurrence. If Borrower fails to provide or maintain insurance as
required herein, Lender shall have the right, but shall not be obligated, to
obtain such insurance. In that event, Borrower shall pay to Lender the cost
thereof.
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SECTION 11. MISCELLANEOUS AFFIRMATIVE COVENANTS. So long as any portion
of the Indebtedness is unpaid and as long as any of the Obligations are
outstanding Borrower will: (a) duly pay all governmental taxes and assessments
at the time they become due and payable; provided, however, Borrower may contest
the same in good faith so long as no payment default by Borrower has occurred
and is continuing; (b) comply with all applicable material governmental laws,
rules and regulations relating to its business and the Collateral where a
failure to comply would have a Material Adverse Effect; (c) take no action to
adversely affect Lender's security interest in the Collateral as a first and
prior perfected security interest; (d) furnish Lender with its annual audited
financial statements within ninety (90) days following the end of Borrower's
fiscal year, unaudited quarterly financial statements within forty-five (45)
days after the end of each fiscal quarter, and within thirty (30) days of the
end of each month a financial statement for that month prepared by Borrower, and
including an income statement and balance sheet, all of which shall be certified
by an officer of Borrower as true and correct and shall be prepared in
accordance with generally accepted accounting principles consistently applied,
and such other information as Lender may reasonably request; and (e) promptly
(but in no event more than five (5) days after the occurrence of such event)
notify Lender of any change in Borrower's condition during the commitment period
which constitutes a Material Adverse Effect, and of the occurrence of any Event
of Default.
SECTION 12. INDEMNITIES. Borrower will protect, indemnify and save
harmless Lender and any assignees from and against all liabilities, obligations,
claims, damages, penalties, causes of action, costs and expenses (including
reasonable attorneys' fees and expenses), imposed upon or incurred by or
asserted against Lender or any assignee of Lender by Borrower or any third party
by reason of the occurrence or existence (or alleged occurrence or existence) of
any act or event relating to or caused by any portion of the Collateral, or its
purchase, acceptance, possession, use, maintenance or transportation, including
without limitation, consequential or special damages of any kind, any failure on
the part of Borrower to perform or comply with any of the terms of this Security
Agreement or any Note, claims for latent or other defects, claims for patent,
trademark or copyright infringement and claims for personal injury, death or
property damage, including those based on Lender's negligence or strict
liability in tort and excluding only those based on Lender's gross negligence or
willful misconduct. In the event that any action, suit or proceeding is brought
against Lender by reason of any such occurrence, Borrower, upon Lender's
request, will, at Borrower's expense, resist and defend such action, suit or
proceeding or cause the same to be resisted and defended by counsel designated
and approved by Lender. Borrower's obligations under this Section 12 shall
survive the payment in full of all the Indebtedness and the performance of all
Obligations with respect to acts or events occurring or alleged to have occurred
prior to the payment in full of all the Indebtedness and the performance of all
Obligations.
SECTION 13. TAXES. Borrower does not indemnify Lender for any loss of
Lender's anticipated tax benefits unless the loss arises from an act or omission
by the Borrower or from any misrepresentation under the Security Agreement by
the Borrower. Borrower agrees to reimburse Lender (or pay directly if instructed
by Lender) and any assignee of Lender for, and to indemnify and hold Lender and
any assignee harmless from, all fees (including, but not limited to, license,
documentation, recording and registration fees), and all sales, use, gross
receipts,
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personal property, occupational, value added or other taxes, levies, imposts,
duties, assessments, charges, or withholdings of any nature whatsoever, together
with any penalties, fines, additions to tax, or interest thereon (the foregoing
collectively "Impositions"), except same as may be attributable to Lender's
income, arising at any time prior to or during the term of any Notes or of this
Security Agreement, or upon termination or early termination of this Security
Agreement and levied or imposed upon Lender directly or otherwise by any
Federal, state or local government in the United States or by any foreign
country or foreign or international taxing authority upon or with respect to (a)
the Collateral, (b) the exportation, importation, registration, purchase,
ownership, delivery, leasing, financing, possession, use, operation, storage,
maintenance, repair, return, sale, transfer of title, or other disposition
thereof, (c) the rentals, receipts, or earnings arising from the Collateral, or
any disposition of the rights to such rentals, receipts, or earnings, (d) any
payment pursuant to this Security Agreement or the Notes, or (e) this Security
Agreement, the Notes or any transaction or any part hereof or thereof.
SECTION 14. RELEASE OF LIENS. Upon payment of all of the Indebtedness
and performance of all of the Obligations, Lender shall execute UCC termination
statements and such other documents as Borrower shall reasonably request to
evidence the release of Lender's lien relating to the Collateral.
SECTION 15. ASSIGNMENT. WITHOUT LENDER'S PRIOR WRITTEN CONSENT WHICH
CONSENT WILL NOT BE UNREASONABLY WITHHELD OR DELAYED, BORROWER SHALL NOT (a)
ASSIGN, TRANSFER, PLEDGE, HYPOTHECATE OR OTHERWISE DISPOSE OF THIS SECURITY
AGREEMENT, ANY NOTE, ANY COLLATERAL, OR ANY INTEREST THEREIN, (I,) LEASE OR LEND
COLLATERAL OR PERMIT IT TO BE USED BY ANYONE OTHER THAN BORROWER OR BORROWER'S
EMPLOYEES, CONTRACTORS AND AGENTS OR (c) MERGE INTO, CONSOLIDATE WITH OR CONVEY
OR TRANSFER ITS PROPERTIES SUBSTANTIALLY AS AN ENTIRETY TO ANY OTHER PERSON OR
ENTITY. LENDER MAY ASSIGN ANY OF THE NOTES, THIS SECURITY AGREEMENT OR ITS
SECURITY INTEREST IN ANY OR ALL COLLATERAL, OR ANY OR ALL OF THE ABOVE, IN WHOLE
OR IN PART TO ONE OR MORE ASSIGNEES OR SECURED PARTIES WITHOUT NOTICE TO
BORROWER. If Borrower is given notice of such assignment it agrees to
acknowledge receipt thereof in writing and Borrower shall execute such
additional documentation as Lender's assignee and/or secured party shall
reasonably require at Lender's expense. Each such assignee and/or secured party
shall have all of the rights, but (except as provided in this Section 15) none
of the obligations, of Lender under this Security Agreement, unless such
assignee or secured party expressly agrees to assume such obligations in
writing. Borrower shall not assert against any assignee and/or secured party any
defense, counterclaim or offset that Borrower may have against Lender.
Notwithstanding any such assignment, and providing no Event of Default has
occurred and is continuing, Lender, or its assignees, secured parties, or their
agents or assigns, shall not interfere with Borrower's right to quietly enjoy
use of Collateral subject to the terms and conditions of this Security
Agreement. Subject to the foregoing, the Notes and this Security Agreement shall
inure to the benefit of, and are binding upon, the successors and assignees of
the parties hereto. Borrower acknowledges that any such
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assignment by Lender will not change Borrower's duties or obligations under this
Security Agreement and the Notes or increase any burden or risk on Borrower.
SECTION 16. DEFAULT. (a) Events of Default. Any of the following events
or conditions shall constitute an "Event of Default" hereunder: (i) Borrower's
failure to pay any monies due to Lender hereunder or under any Note beyond the
tenth (10th) day after the same is due; (ii) Borrower's failure to comply with
its obligations under Section 10 or Section 15; (iii) any representation or
warranty of Borrower made in this Security Agreement or the Notes or in any
other agreement, statement or certificate furnished to Lender in connection with
this Security Agreement or the Notes shall prove to have been incorrect in any
material respect when made or given; (iv) Borrower's failure to comply with or
perform any material term, covenant or condition of this Security Agreement or
any Note or under any lease or mortgage of real property covering the location
of the Collateral if such failure to comply or perform is not cured by Borrower
within thirty (30) days after Borrower knows of the noncompliance or
nonperformance or notice from Lender or such longer period that Borrower is
diligently attempting to effect such cure; (v) seizure of any of the Collateral
under legal process; (vi) the filing by or against Borrower or any guarantor
under any guaranty executed in connection with this Security Agreement
("Guarantor") of a petition for reorganization or liquidation under the
Bankruptcy Code or any amendment thereto or under any other insolvency law
providing for the relief of debtors; (vii) the voluntary or involuntary making
of an assignment of a substantial portion of its assets by Borrower or by any
Guarantor for the benefit of its creditors, the appointment of a receiver or
trustee for Borrower or any Guarantor or for any of Borrower's or Guarantor's
assets, the institution by or against Borrower or any Guarantor of any formal or
informal proceeding for dissolution, liquidation, settlement of claims against
or winding up of the affairs of Borrower or any Guarantor provided that in the
case of all such involuntary proceedings, same are not dismissed within sixty
(60) days after commencement; (viii) the making by Borrower or by any Guarantor
of a transfer of all or a material portion of Borrower's or Guarantor's assets
or inventory not in the ordinary course of business; or (ix) any default or
breach by any Guarantor of any of the terms of its guaranty to Lender in
connection with this Security Agreement.
(b) Remedies. If any Event of Default has occurred, Lender may in its
sole discretion exercise one or more of the following remedies with respect to
any or all of the Collateral: (i) declare due any or all of the aggregate sum of
all remaining payments under the Notes, including the amount of any mandatory or
optional payment required or permitted to be paid by Borrower to Lender at the
maturity of the Notes ("Remaining Payments"); (ii) proceed by appropriate court
action or actions either at law or in equity to enforce Borrower's performance
of the applicable covenants of the Notes and this Security Agreement or to
recover all reasonable damages and expenses incurred by Lender by reason of an
Event of Default; (iii) except as provided by law, without court order or prior
demand, enter upon the premises where the Collateral is located and take
immediate possession of and remove it without liability of Lender to Borrower or
any other person or entity; (iv) terminate this Security Agreement and sell the
Collateral at public or private sale, or otherwise dispose of, hold, use or
lease any or all of the Collateral in a commercially reasonable manner; or (v)
exercise any other right or remedy available to it under applicable law. If
Lender has declared due any or all of the Remaining Payments, Borrower will pay
immediately to Lender, without duplication, (A) the Remaining Payments
discounted to
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present value at the Discount Rate, (B) all amounts which may be then due or
accrued, and (C) all other amounts due under this Security Agreement and under
the Notes (Lender's Return, as referred to below, means the amounts described in
clauses (A), (B) and (C) above). The net proceeds of any sale or lease of such
Collateral will be credited against Lender's Return. The net proceeds of a sale
of the Collateral pursuant to this Section 16(b) is defined as the sales price
of the Collateral less selling expenses, including, without limitation, costs of
remarketing the Collateral and all refurbishing costs and commissions paid with
respect to such remarketing. The net proceeds of a lease of the Collateral
pursuant to this Section 16(b) is defined as the amount equal to the monthly
payments due under such lease (discounted to present value at the Discount Rate)
plus the residual value of the Collateral at the end of the basic term of such
lease, as reasonably determined by Lender, and discounted at the Discount Rate.
At Lender's request, Borrower shall assemble the Collateral and make it
available to Lender at such time and location as Lender may reasonably
designate. Borrower waives any right it may have to redeem the Collateral.
Declaration that any or all amounts under this Security Agreement and/or
the Notes are immediately due and payable and Lender's taking possession of any
or all Equipment shall not terminate this Security Agreement or any of the Notes
unless Lender so notifies Borrower in writing. None of the above remedies is
intended to be exclusive but each is cumulative and may be enforced separately
or concurrently.
(c) Application of Proceeds. The proceeds of any sale of all or any part
of the Collateral and the proceeds of any remedy afforded to Lender by this
Security Agreement shall be paid to and applied as follows:
First, to the payment of reasonable costs and expenses of suit or
foreclosure, if any, and of the sale, if any, including, without limitation,
refurbishing costs, costs of remarketing and commissions related to remarketing,
all Remedy Expenses, all expenses, liabilities and advances incurred or made
pursuant to this Security Agreement or any Note by Lender in connection with
foreclosure, suit, sale or enforcement of this Security Agreement or the Notes,
and taxes, assessments or liens superior to Lender's security interest granted
by this Security Agreement;
Second, to the payment of all other amounts not described in item Third
below due under this Security Agreement and all Notes;
Third, to pay Lender an amount equal to Lender's Return, to the extent
not previously paid by Borrower; and
Fourth, to the payment of any surplus to Borrower or to whomever may
lawfully be entitled to receive it.
(d) Effect of Delay: Waiver: Foreclosure on Collateral. No delay or
omission of Lender, in exercising any right or power arising from any Event of
Default shall prevent Lender from exercising that right or power if the Event of
Default continues. No waiver of an Event of Default, whether full or partial, by
Lender or such holder shall be taken to extend to any
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subsequent Event of Default, or to impair the rights of Lender in respect of any
damages suffered as a result of the Event of Default. The giving, taking or
enforcement of any other or additional security, collateral or guaranty for the
payment or discharge of the Indebtedness and performance of the Obligations
shall in no way operate to prejudice, waive or affect the security interest
created by this Security Agreement or any rights, powers or remedies exercised
hereunder or thereunder. Lender shall not be required first to foreclose on the
Collateral prior to bringing an action against Borrower for sums owed to Lender
under this Security Agreement or under any Note.
SECTION 17. LATE PAYMENTS. Borrower shall pay Lender a late charge of
10% of any payment owed Lender by Borrower which is not paid when due (taking
into account applicable grace periods), for every month such payment is not paid
when due. If such amounts have not been received by Lender at Lender's place of
business or by Lender's designated agent by the date such amounts are due under
this Security Agreement or the Notes, Lender shall xxxx Borrower for such
charges. Borrower acknowledges that invoices for amounts due hereunder or under
the Notes are sent by Lender for Borrower's convenience only. Borrower's
non-receipt of an invoice will not relieve Borrower of its obligation to make
payments hereunder or under the Notes.
SECTION 18. PAYMENTS BY LENDER. If Borrower shall fail to make any
payment or perform any act required hereunder (including, but not limited to,
maintenance of any insurance required by Section 10), then Lender may, but shall
not be required to, after such notice to Borrower as is reasonable under the
circumstances, make such payment or perform such act with the same effect as if
made or performed by Borrower. Borrower will upon demand reimburse Lender for
all sums paid and all reasonable costs and expenses incurred in connection with
the performance of any such act.
SECTION 19. FINANCING STATEMENTS. Borrower hereby appoints Lender (and
each of Lender's officers, employees or agents designated by Lender) with full
power of substitution by Lender, as Borrower's attorney, with power to execute
and deliver on Borrower's behalf, financing statements and other documents
necessary to perfect and/or give notice of Lender's security interest in any of
the Collateral. Notwithstanding the above, Borrower will, upon Lender's request,
execute all financing statements pursuant to the Uniform Commercial Code and all
such other documents reasonably requested by Lender to perfect Lender's security
interests hereunder. Borrower authorizes Lender to file financing statements
signed only by Lender (where such authorization is permitted by law) at all
places where Lender deems necessary.
SECTION 20. NATURE OF TRANSACTION. Lender makes no representation
whatsoever, express or implied, concerning the legal character of the
transaction evidenced hereby, for tax or any other purpose.
SECTION 21. SUSPENSION OF LENDER'S OBLIGATIONS. The obligations of
Lender hereunder will be suspended to the extent that Lender is hindered or
prevented from complying therewith because of labor disturbances, including but
not limited to strikes and
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lockouts, acts of God, fires, floods, storms, accidents, industrial unrest, acts
of war, insurrection, riot or civil disorder, any order, decree, law or
governmental regulations or interference, failure of the manufacturer to deliver
any item of Collateral or any cause whatsoever not within the sole and exclusive
control of Lender.
SECTION 22. LENDER'S EXPENSE. Borrower shall pay Lender all reasonable
costs and expenses including reasonable attorney's fees, litigation expenses and
the fees of collection agencies, incurred by Lender (a) in enforcing any of the
terms, conditions or provisions hereof and related to the exercise of its
remedies ("Remedy Expenses"), and (b) in connection with any bankruptcy or
post-judgment proceeding, whether or not suit is filed and, in each and every
action, suit or proceeding, including any and all appeals and petitions
therefrom.
SECTION 23. ALTERATIONS; ATTACHMENTS. No alterations or attachments
shall be made to the Collateral without Lender's prior written consent, which
shall not be given for changes that will adversely affect the reliability and
utility of the Collateral or which cannot be removed without damage to the
Collateral, or which in any way decrease the value of the Collateral for
purposes of resale or lease. All attachments and improvements to the Collateral
shall be deemed to be "Collateral" for purposes of the Security Agreement, and a
first priority security interest therein shall immediately vest in Lender.
SECTION 24. CHATTEL PAPER. (a) One executed copy of the Security
Agreement will be marked "Original" and all other counterparts will be
duplicates. To the extent, if any, that this Security Agreement constitutes
chattel paper (as such term is defined in the Uniform Commercial Code as in
effect in any applicable jurisdiction) no security interest in the Security
Agreement may be created in any documents other than the "Original." (b)There
shall be only one original of each Note and it shall be marked "Original," and
all other counterparts will be duplicates. To the extent, if any, that any Notes
to this Security Agreement constitutes chattel paper (or as such term is defined
in the Uniform Commercial Code as in effect in any applicable jurisdiction) no
security interest in any Note(s) may be created in any documents other than the
"Original."
SECTION 25. STOCK WARRANT. Borrower agrees that it will issue to Lender
upon execution of this Security Agreement a Warrant in the form of the Warrant
Agreement attached hereto as Exhibit B. Borrower and Lender agree that the value
of the Warrant hereunder is ten dollars ($10.00).
SECTION 26. COMMITMENT FEE. Borrower has paid to Lender a commitment fee
("Fee") of $10,000. The Fee shall be applied by Lender first to reimburse Lender
for all out-of-pocket UCC and other search costs, inspections and labeling costs
and appraisal fees, if any, incurred by Lender, and then proportionally to the
first monthly payment for each Note hereunder in the proportion that the
Collateral value for such Note bears to Lender's entire commitment. However, the
portion of the Fee which is not applied to such monthly payments shall be
non-refundable except if Lender defaults in its obligation to fund Loans
pursuant to Section 3.
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SECTION 27. NOTICES. All notices hereunder shall be in writing, by
registered mail, or reliable messenger or delivery service (including overnight
service) and shall be directed, as the case may be, to Lender at 0000 Xxxxxx
Xxxxxxxxx, Xxx Xxxxxx, Xxxxxxxxxx 00000, Attention: Asset Management and to
Borrower at 0000 Xxxxxxx Xxx Xxxxx, Xxxxx 000, Xxxxxxx, XX 00000, Attention:
Xxxxx Xxxxxxx, Director Finance, or at such other address as the parties may
notify one another of in writing from time to time.
SECTION 28. MISCELLANEOUS. (a) Borrower shall provide Lender with such
corporate resolutions, financial statements and other documents as Lender shall
reasonably request from time to time. (b) Borrower represents that the
Collateral hereunder is used solely for business purposes. (c) Time is of the
essence with respect to this Security Agreement. (d) Borrower acknowledges that
Borrower has read this Security Agreement and the Notes, understands them and
agrees to be bound by their terms and further agrees that this Security
Agreement and the Notes constitute the entire agreement between Lender and
Borrower with respect to the subject matter hereof and supersede all previous
agreements, promises, or representations. (e) This Security Agreement and the
Notes may not be changed, altered or modified except by an instrument signed by
an officer or authorized representative of Lender and Borrower. (f) Any failure
of Lender to require strict performance by Borrower or any waiver by Lender of
any provision herein or in a Note shall not be construed as a consent or waiver
of any other breach of the same or any other provision. (g) If any provision of
this Security Agreement or any Note is held invalid, such invalidity shall not
affect any other provisions hereof or thereof. (h) The obligations of Borrower
to pay the Indebtedness and perform the Obligations shall survive the expiration
or earlier termination of this Security Agreement and each Note until all
Obligations of Borrower to Lender have been met and all liabilities of Borrower
to Lender and any assignee have been paid in full. (i) Borrower will notify
Lender at least 30 days before changing its name, principal place of business or
chief executive office. (j) Borrower will, at its expense, promptly execute and
deliver to Lender such documents and assurances (including financing statements)
and take such further action as Lender may reasonably request in order to carry
out the intent of this Security Agreement and Lender's rights and remedies.
SECTION 29. JURISDICTION AND WAIVER OF JURY TRIAL. This Security
Agreement and each Note shall be deemed to have been made under and shall be
governed by the laws of the State of California in all respects, including
matters of construction, validity and performance. At Lender's sole discretion,
option and election, jurisdiction and venue for any legal action between the
parties arising out of or relating to this Security Agreement or any Note shall
be in the Superior Court of Xxxx County, California, or, in cases where federal
diversity jurisdiction is available, in the United States District Court for the
Northern District of California located in San Francisco, California. BORROWER,
TO THE EXTENT IT MAY LAWFULLY DO SO, HEREBY WAIVES ITS RIGHT TO TRIAL BY JURY IN
ANY ACTION BROUGHT ON OR WITH RESPECT TO THIS SECURITY AGREEMENT, ANY NOTE, ANY
SECURITY DOCUMENTS, OR ANY OTHER AGREEMENTS EXECUTED IN CONNECTION HEREWITH.
SECTION 30. END OF LOAN POSITION. (a) General. Borrower shall be
required to choose a final payment or Note extension election ("End of Loan
Position") at the expiration
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of the first Note's term. Borrower shall provide written notice of its election
to Lender at least 90 days prior to the end of the term of the first Note. That
choice shall be an election of Borrower's End of Loan Position election for all,
but not less than all, of the Collateral under all Notes under the Security
Agreement.
In the event Borrower does not provide 90 days' prior written notice of
its election, Borrower shall be deemed to have elected Election No. 2.
(b) End of Loan Position Elections. As its End of Loan Position,
Borrower shall be required to:
Election No. 1: Make a final payment equal to 12% of the Note's original
principal amount.
Election No. 2: Extend the Note's term for an additional 12 months
("Extended Term") for a monthly rate of 1.44% of the Note's original principal
amount.
IN WITNESS WHEREOF, Borrower and Lender have caused this Security
Agreement to be executed as of the date and year first above written.
PHOENIX LEASING INCORPORATED XCYTE THERAPIES, INC.
By: By: /s/ Xxxxxx Xxx Xxxxxxxx
--------------------------- ----------------------------------------
Name: Name (Print): Xxxxxx Xxx Xxxxxxxx
------------------------- ------------------------------
Title: Title: President & CEO
------------------------ -------------------------------------
HEADQUARTERS LOCATION:
0000 Xxxxxxx Xxx Xxxxx, Xxxxx 000
Xxxxxxx, XX 00000
County of King
EXHIBITS AND SCHEDULES:
Exhibit A -- Closing Memorandum
Exhibit B -- Stock Warrant
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EXHIBIT A TO
SENIOR LOAN AND SECURITY AGREEMENT NO. 6261
DATED JULY 1, 1999
CLOSING MEMORANDUM
1.* Duly executed Senior Loan and Security Agreement.
2. Duly executed Senior Security Promissory Note with Exhibit A Collateral
description attached.
3. Insurance certificates reflecting coverage required under Section 10 of
the Senior Loan and Security Agreement.
4.* Resolutions of Borrower's board of directors.
5. Real Property Waiver.**
6. UCC-1 Financing Statements with respect to the Collateral.
7. * Stock warrant.
8. UCC search (Lender will obtain).
9. Certificate of Chief Financial Officer stating that (i) there are no
liens, charges, security interests or other encumbrances that may affect
Lender's right, title and interest in the Collateral and there are no
UCC-1 financing statements filed or in the process of being filed
against any of the Collateral, (ii) Borrower is performing according to
Borrower's business plan, (iii) no change which is a Material Adverse
Effect has occurred in the financial condition of Borrower, (iv) no
default has occurred, and (v) the representations and warranties in
Section 5 of the Senior Loan and Security Agreement are true and correct
as if made on the date of the Loan.
10.* Certificate from the Secretary of State of Borrower's state of
incorporation, and from the state in which Borrower's chief executive
office is located, if different, stating the Borrower is in good
standing or is authorized to transact business, as the case may be,
dated not more than thirty days prior to the first Loan (Lender will
obtain).
11.* Borrower's Business Plan.
12. Borrower's most recent financial statements.
13. List of proposed Collateral.
14. Purchase documentation verifying Borrower's ownership of equipment.
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15. See Section 3 of the Senior Loan and Security Agreement for additional
conditions to closing.
16. Intercreditor Agreement, if applicable.
* First Loan only.
** Required if any Equipment is a fixture, i.e., attached to real property,
or located in certain states.
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EXHIBIT B TO
SENIOR LOAN AND SECURITY AGREEMENT NO. 6261
FORM OF STOCK WARRANT
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CORPORATE RESOLUTION TO BORROW
RESOLVED: That this corporation, XCYTE THERAPIES, INC., borrow funds from
PHOENIX LEASING INCORPORATED, a California corporation, ("Lender") and grant as
collateral for such borrowings such items of personal property and fixtures, and
upon such terms and conditions, as the officer or officers hereinafter
authorized, in their discretion, may deem necessary or advisable; and that the
aggregate principal amount of borrowings hereunder shall be the sum of
$1,000,000 which amount may be exceeded in the future.
RESOLVED FURTHER: That:
Xxxxxx Xxx Xxxxxxxx President & CEO Xxxxxx Xxx Xxxxxxxx
----------------------- --------------------------- ----------------------
or
----------------------- --------------------------- ----------------------
(Print or type name) (Title of Corporate Officer (specimen signature)
of this corporation (this officer or officers authorized to act pursuant hereto
being hereinafter designated as "authorized officers"), are individually
authorized, directed and empowered, in the name of this corporation, to execute
and deliver to Lender, and Lender is requested to accept, any notes, security
agreements, and other documents or agreements that may be required by Lender in
connection with such borrowings.
RESOLVED FURTHER: That the authorized officers are individually authorized,
directed and empowered, in the name of this corporation, to do or cause to be
done all such further acts and things as they shall deem necessary, advisable,
convenient, or proper in connection with the execution and delivery of any such
notes, security agreements, and other documents or agreements and in connection
with or incidental to the carrying of the same into effect, including without
limitation, the execution, acknowledgment, and delivery of all instruments and
documents which may reasonably Lender under or in connection with any such
borrowing.
RESOLVED FURTHER: That Lender is authorized to act upon these resolutions until
[PHOTOCOPY CUT OFF] their revocation is delivered to Lender, and that the
authority hereby granted shall apply and effect to the successors in office of
the officers herein named.
I, _______________________, Officer of XCYTE THERAPIES, INC., a corporation in
[PHOTOCOPY CUT OFF] the laws of the State of Delaware, do hereby certify that
the foregoing is a full, true and [PHOTOCOPY CUT OFF] resolutions of the Board
of Directors of the said corporation, duly and regularly passed [PHOTOCOPY CUT
OFF] Board of Directors of said corporation as required by law and by the
by-laws of the said [PHOTOCOPY CUT OFF] the ____ day of _______________, 19___.
I further certify that said resolutions are still in full force and effect and
have not been [PHOTOCOPY CUT OFF] revoked and that the specimen signatures
appearing above are the signatures of the office [PHOTOCOPY CUT OFF] sign for
this corporation by virtue of the said resolutions.
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IN WITNESS WHEREOF, I have hereunto set my hand as such Secretary, and affixed
the corporate seal of the said corporation, this _______ day of
__________________, 19___.
------------------------------------
AFFIX CORPORATE
SEAL HERE OFFICER OF XCYTE THERAPIES, INC.
[PERSON WHO SIGNS HERE MUST BE
DIFFERENT FROM PERSON(S) WHO SIGNED
ABOVE.]
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