EXHIBIT 10.1
LOAN AND SECURITY AGREEMENT
This LOAN AND SECURITY AGREEMENT (this "Agreement") dated as of March 31,
2005, between SILICON VALLEY BANK, a California chartered bank, with its
principal place of business at 0000 Xxxxxx Xxxxx, Xxxxx Xxxxx, Xxxxxxxxxx 00000
and with a loan production office located at One Xxxxxx Executive Park, Suite
200, 0000 Xxxxxxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000, ("Bank") and
CYBERKINETICS NEUROTECHNOLOGY SYSTEMS, INC., a Delaware corporation
("Borrower"), provides the terms on which Bank shall extend credit to Borrower
and Borrower shall repay Bank. The parties agree as follows:
1 ACCOUNTING AND OTHER TERMS
Accounting terms not defined in this Agreement shall be construed
following GAAP. Calculations and determinations must be made following GAAP. The
term "financial statements" includes the notes and schedules attached thereto.
The terms "including" and "includes" always mean "including (or includes)
without limitation," in this or any Loan Document. Capitalized terms in this
Agreement shall have the meanings set forth in Article 13. All other terms
contained in this Agreement, unless otherwise indicated, shall have the meaning
provided by the Code, to the extent such terms are defined therein.
2 LOAN AND TERMS OF PAYMENT
2.1 PROMISE TO PAY. Borrower hereby unconditionally promises to pay Bank
the unpaid principal amount of all Credit Extensions and interest on the unpaid
principal amount of the Credit Extensions as and when due in accordance with
this Agreement.
2.1.1 REVOLVING ADVANCES.
(a) Revolving Line Availability. Bank shall make Advances not
exceeding the following ("Revolving Line Availability"): (i) the Revolving
Line minus (ii) the aggregate Advances hereunder. Amounts borrowed under this
Section may be repaid and reborrowed by Borrower at any time during the term
of this Agreement, without penalty or premium.
(b) Borrowing Procedure. To obtain an Advance, Borrower must notify
Bank (which notice shall be irrevocable) by facsimile or telephone by 3:00
p.m. Eastern time on the Business Day the Advance is to be made. If such
notification is by telephone, Borrower must promptly confirm the notification
by delivering to Bank a completed Payment/Advance Form. Bank shall credit
Advances to Borrower's deposit account. Bank may make Advances under this
Agreement based on instructions from a Responsible Officer or his or her
designee or without instructions if the Advances are necessary to meet
Obligations which have become due. Bank may rely on any telephone notice
given by a person whom Bank believes is a Responsible Officer or designee.
Borrower shall indemnify Bank for any loss Bank suffers due to such reliance.
(c) Interest Rate. The principal amounts outstanding under the
Revolving Line shall accrue interest at a per annum rate equal to the
aggregate of the Prime Rate and three percent (3.0%), which interest shall be
payable monthly in arrears.
(d) Termination; Repayment. The Revolving Line terminates on the
Revolving Line Maturity Date, when the principal amount of all Advances, the
unpaid interest thereon, and all other Obligations relating to the Revolving
Line shall be immediately due and payable.
2.2 INTEREST RATE.
(a) Default Rate. After an Event of Default, Obligations shall bear
interest at five percent (5.0%) above the rate effective immediately before
the Event of Default.
(b) Adjustment to Interest Rate. The applicable interest rate
hereunder shall increase or decrease when the Prime Rate changes.
(c) 360-Day Year. Interest is computed on the basis of a three
hundred sixty (360) day year for the actual number of days elapsed.
(d) Debit of Accounts. Bank may debit any of Borrower's deposit or
operating accounts, including Account Number __________, for principal and
interest payments when due, or any other amounts Borrower owes Bank, when
due. Bank shall promptly notify Borrower after it debits Borrower's accounts,
and such debits shall reduce the amount of Borrower's Obligations hereunder.
These debits shall not constitute a set off.
(e) Payments. Interest is payable monthly in arrears on the first
calendar day of each month. Payments received after 12:00 noon Eastern time
are considered received at the opening of business on the next Business Day.
When a payment is due on a day that is not a Business Day, the payment is due
the next Business Day and additional fees or interest, as applicable, shall
continue to accrue.
2.3 FEES. Borrower shall pay to Bank:
(a) Commitment Fee. A fully earned, non-refundable commitment fee of
Fifteen Thousand Dollars ($15,000.00) due and payable on the Closing Date;
and
(b) Bank Expenses. All Bank Expenses (including reasonable
attorneys' fees and expenses) incurred through and after the Closing Date,
when due.
3 CONDITIONS OF LOANS
3.1 CONDITIONS PRECEDENT TO INITIAL CREDIT EXTENSION. Bank's obligation to
make the initial Credit Extension is subject to the condition precedent that
Bank shall have received, in form and substance satisfactory to Bank, such
documents, and completion of such other matters, as Bank may reasonably deem
necessary or appropriate, including, without limitation, the following:
(a) this Agreement;
(b) a certificate of the Secretary of Borrower with respect to
articles, bylaws, incumbency and resolutions authorizing the execution and
delivery of this Agreement, the Loan Documents, and all transactions related
thereto, including the Warrant;
(c) Perfection Certificate(s) by Borrower;
(d) Warrant;
(e) Account Control Agreement/ Investment Account Control Agreement;
(f) insurance certificate;
(g) payment of the commitment fees and Bank Expenses;
(h) Certificate of Foreign Qualification (if applicable);
(i) Certificate of Good Standing/Legal Existence; and
(j) such other documents, and completion of such other matters, as
Bank may reasonably deem necessary or appropriate.
3.2 CONDITIONS PRECEDENT TO ALL CREDIT EXTENSIONS. Bank's obligations to
make each Credit Extension, including the initial Credit Extension, is subject
to the following:
(a) timely receipt of any Payment/Advance Form;
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(b) the representations and warranties in Article 5 shall be true in
all material respects on the date of the Payment/Advance Form and on the
effective date of each Credit Extension and no Event of Default shall have
occurred and be continuing, or result from the Credit Extension. Each Credit
Extension is Borrower's representation and warranty on that date that the
representations and warranties in Article 5 remain true in all material
respects;
(c) no Material Adverse Change has occurred and is continuing at
such time, whether or not arising from transactions in the ordinary course of
business; and
(d) there has been no material adverse deviation by Borrower from
the most recent business plan of Borrower presented to and accepted by Bank
prior to the Closing Date.
4 CREATION OF SECURITY INTEREST
4.1 GRANT OF SECURITY INTEREST. Borrower hereby grants Bank, to secure the
payment and performance in full of all of the Obligations and the performance of
each of Borrower's duties under the Loan Documents, a continuing security
interest in, and pledges and assigns to Bank, the Collateral, wherever located,
whether now owned or hereafter acquired or arising, and all proceeds and
products thereof. Subject to Section 5.2, Borrower warrants and represents that
the security interest granted herein shall be a first priority security interest
in the Collateral.
Except as noted on the Perfection Certificate, Borrower is not a party
to, nor is bound by, any material license (other than over the counter software
that is commercially available to the public) or other material agreement with
respect to which Borrower is the licensee that prohibits or otherwise restricts
Borrower from granting a security interest in Borrower's interest in such
license or agreement or any other property. Borrower shall provide written
notice to Bank within ten (10) days after entering or becoming bound by, any
such license or agreement which is reasonably likely to have a material impact
on Borrower's business or financial condition. Borrower shall take such steps as
Bank reasonably requests to obtain the consent of, authorization by or waiver
by, any person whose consent or waiver is necessary for all such licenses or
contract rights to be deemed "Collateral" and for Bank to have a security
interest in it that might otherwise be restricted or prohibited by law or by the
terms of any such license or agreement, whether now existing or entered into in
the future.
If Borrower shall, at any time, acquire a commercial tort claim,
Borrower shall promptly notify Bank in a writing signed by Borrower of the brief
details thereof and grant to Bank in such writing a security interest therein
and in the proceeds thereof, all upon the terms of this Agreement, with such
writing to be in form and substance satisfactory to Bank.
4.2 TERMINATION BY BORROWER.
Borrower may terminate this Agreement by sending written notice to Bank
and paying in full all Obligations. If this Agreement is terminated, Bank's lien
and security interest in the Collateral shall continue until Borrower fully
satisfies the Obligations, at which time Bank's lien and security interest in
the Collateral shall terminate. At Borrower's request, Bank 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 above, including
duly executing and delivering termination statements for filing all relevant
jurisdictions under the Code.
4.3 AUTHORIZATION TO FILE FINANCING STATEMENTS. Borrower hereby authorizes
Bank to file UCC financing statements, without notice to Borrower, with all
appropriate jurisdictions in order to perfect or protect Bank's interest or
rights hereunder, including a notice that any disposition of the Collateral, by
either Borrower or any other Person, shall be deemed to violate the rights of
Bank under the Code.
5 REPRESENTATIONS AND WARRANTIES
Borrower represents and warrants to Bank as follows:
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5.1 DUE ORGANIZATION AND AUTHORIZATION. Borrower, and each Subsidiary, is
duly existing and in good standing in its state of formation and qualified and
licensed to do business in, and in good standing in, any state in which the
conduct of its business or its ownership of property requires that it be
qualified except where the failure to do so could not reasonably be expected to
cause a Material Adverse Change. In connection with this Agreement, Borrower
delivered to Bank a perfection certificate signed by Borrower (the "Perfection
Certificate"). Borrower represents and warrants to Bank that: (a) Borrower's
exact legal name is that indicated on the Perfection Certificate and on the
signature page hereof; and (b) Borrower is an organization of the type, and is
organized in the jurisdiction, set forth in the Perfection Certificate; and (c)
the Perfection Certificate accurately sets forth Borrower's organizational
identification number or accurately states that Borrower has none; and (d) the
Perfection Certificate accurately sets forth Borrower's place of business, or,
if more than one, its chief executive office as well as Borrower's mailing
address if different, and (e) all other information set forth on the Perfection
Certificate pertaining to Borrower is accurate and complete. If Borrower does
not now have an organizational identification number, but later obtains one,
Borrower shall forthwith notify Bank of such organizational identification
number.
The execution, delivery and performance of the Loan Documents have been
duly authorized, and do not conflict with Borrower's organizational documents,
nor shall they constitute an event of default under any material agreement by
which Borrower is bound. Borrower is not in default under any agreement to which
or by which it is bound in which the default could reasonably be expected to
cause a Material Adverse Change.
5.2 COLLATERAL. Borrower has good title to the Collateral, free of Liens
except Permitted Liens. Borrower has no deposit account, other than the deposit
accounts with Bank and deposit accounts described in the Perfection Certificate.
The Collateral is not in the possession of any third party bailee (such as a
warehouse). Except as hereafter disclosed to Bank in writing by Borrower, none
of the components of the Collateral shall be maintained at locations other than
as provided in the Perfection Certificate. In the event that Borrower, after the
date hereof, intends to store or otherwise deliver any portion of the Collateral
to a bailee, then Borrower will first receive the written consent of Bank and
such bailee must acknowledge in writing that the bailee is holding such
Collateral for the benefit of Bank.
5.3 LITIGATION. Except as shown in the Perfection Certificate, there are
no actions or proceedings pending or, to the knowledge of Borrower's Responsible
Officers, threatened by or against Borrower or any Subsidiary in which an
adverse decision could reasonably be expected to cause a Material Adverse
Change.
5.4 NO MATERIAL DETERIORATION IN FINANCIAL STATEMENTS. All consolidated
financial statements for Borrower and any Subsidiary delivered to Bank fairly
present in all material respects Borrower's consolidated financial condition and
Borrower's consolidated results of operations. There has not been any material
deterioration in Borrower's consolidated financial condition since the date of
the most recent financial statements submitted to Bank.
5.5 SOLVENCY. The fair salable value of Borrower's assets (including
goodwill minus disposition costs) exceeds the fair value of its liabilities;
Borrower is not left with unreasonably small capital after the transactions in
this Agreement; and Borrower is able to pay its debts (including trade debts) as
they mature.
5.6 REGULATORY COMPLIANCE. Borrower is not an "investment company" or a
company "controlled" by an "investment company" under the Investment Company Act
of 1940. Borrower is not engaged as one of its important activities in extending
credit for margin stock (under Regulations X, T and U of the Federal Reserve
Board of Governors). Borrower has complied in all material respects with the
Federal Fair Labor Standards Act. Borrower has not violated any laws, ordinances
or rules, the violation of which could reasonably be expected to cause a
Material Adverse Change. None of Borrower's or any Subsidiary's properties or
assets has been used by Borrower or any Subsidiary or, to the best of Borrower's
knowledge, by previous Persons, in disposing, producing, storing, treating, or
transporting any hazardous substance other than legally. Borrower and each
Subsidiary has timely filed all required tax returns and paid, or made adequate
provision to pay, all material taxes, except those being contested in good faith
with adequate reserves under GAAP. Borrower and each Subsidiary has obtained all
consents, approvals and authorizations of, made all declarations or filings
with, and given all notices to, all government authorities that are necessary to
continue its business as currently conducted except where the failure to obtain
or make such consents, declarations, notices or filings would not reasonably be
expected to cause a Material Adverse Change.
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5.7 SUBSIDIARIES; INVESTMENTS. Borrower does not own any stock,
partnership interest or other equity securities except for Permitted
Investments.
5.8 FULL DISCLOSURE. No written representation, warranty or other
statement of Borrower in any certificate or written statement given to Bank
taken together with all such written certificates and written statements given
to Bank contains any untrue statement of a material fact or omits to state a
material fact necessary to make the statements contained in the certificates or
statements not misleading (it being recognized by Bank that the projections and
forecasts provided by Borrower in good faith and based upon reasonable
assumptions are not viewed as facts and that actual results during the period or
periods covered by such projections and forecasts may differ from the projected
or forecasted results).
6 AFFIRMATIVE COVENANTS
Borrower shall do all of the following:
6.1 GOVERNMENT COMPLIANCE. Borrower shall maintain its, and all
Subsidiaries', legal existence and good standing in their respective
jurisdictions of formation and maintain qualification in each jurisdiction in
which the failure to so qualify would reasonably be expected to have a material
adverse effect on Borrower's business or operations. Borrower shall comply, and
have each Subsidiary comply, with all laws, ordinances and regulations to which
it is subject, noncompliance with which could have a material adverse effect on
Borrower's business or operations or would reasonably be expected to cause a
Material Adverse Change.
6.2 FINANCIAL STATEMENTS, REPORTS, CERTIFICATES.
(a) Borrower shall deliver to Bank: (i) as soon as available, but no
later than thirty (30) days after the last day of each month, a company
prepared draft consolidated balance sheet and draft income statement covering
Borrower's consolidated operations during the period in a form reasonably
acceptable to Bank; (ii) as soon as available, but no later than forty-five
(45) days after the last day of each quarter, a company prepared consolidated
balance sheet and income statement covering Borrower's consolidated
operations during the period certified by a Responsible Officer and in a form
reasonably acceptable to Bank (iii) as soon as available, but no later than
ninety (90) days after the last day of Borrower's fiscal year, audited
consolidated financial statements of Borrower prepared under GAAP,
consistently applied, together with an unqualified opinion on the financial
statements from an independent certified public accounting firm reasonably
acceptable to Bank; (iv) within five (5) days of filing, Borrower shall
provide Bank copies of or electronic notice of links to all statements,
reports and notices made available to Borrower's security holders or to any
holders of Subordinated Debt and all reports on Form 10-K, 10-Q and 8-K filed
with the Securities and Exchange Commission; (v) a prompt report of any legal
actions pending or threatened against Borrower or any Subsidiary that could
result in damages or costs to Borrower or any Subsidiary of One Hundred
Thousand Dollars ($100,000.00) or more; and (vi) other financial information
reasonably requested by Bank.
6.3 INVENTORY; RETURNS. Borrower shall keep all Inventory in good and
marketable condition, free from material defects. Returns and allowances between
Borrower and its account debtors shall follow Borrower's customary practices as
they exist at the Closing Date. Borrower must promptly notify Bank of all
returns, recoveries, disputes and claims that involve more than Fifty Thousand
Dollars ($50,000.00).
6.4 TAXES. Borrower shall make, and cause each Subsidiary to make, timely
payment of all material federal, state, and local taxes or assessments (other
than taxes and assessments which Borrower is contesting in good faith, with
adequate reserves maintained in accordance with GAAP) and will deliver to Bank,
on demand, appropriate certificates attesting to such payments.
6.5 INSURANCE. Borrower shall keep its business and the Collateral insured
for risks and in amounts, commercially reasonable for comparable companies, and
as Bank may reasonably request. Insurance policies shall be in a form, with
companies, and in amounts that are satisfactory to Bank in its reasonable
discretion. All property policies shall have a lender's loss payable endorsement
showing Bank as an additional loss payee and all liability policies shall show
Bank as an additional insured and all policies shall provide that the insurer
must give Bank at least twenty (20) days notice before canceling its policy. At
Bank's request, Borrower shall deliver certified copies of policies and evidence
of all premium payments. Proceeds payable under any policy shall, at Bank's
option, be
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payable to Bank on account of the Obligations. Notwithstanding the foregoing, so
long as no Event of Default has occurred and is continuing, Borrower shall have
the option of applying the proceeds of any casualty policy up to One Hundred
Thousand Dollars ($100,000.00), in the aggregate, toward the replacement or
repair of destroyed or damaged property; provided that (i) any such replaced or
repaired property (a) shall be of equal or like value as the replaced or
repaired Collateral and (b) shall be deemed Collateral in which Bank has been
granted a first priority security interest and (ii) after the occurrence and
during the continuation of an Event of Default all proceeds payable under such
casualty policy shall, at the option of Bank, be payable to Bank on account of
the Obligations. If Borrower fails to obtain insurance as required under Section
6.5 or to pay any amount or furnish any required proof of payment to third
persons and Bank, Bank may make all or part of such payment or obtain such
insurance policies required in Section 6.5, and take any action under the
policies Bank deems prudent.
6.6 ACCOUNTS.
(a) In order to permit Bank to monitor Borrower's financial
performance and condition, Borrower, and all Borrower's Subsidiaries, shall,
on or before sixty (60) days after the Closing Date, maintain Borrower's, and
such Subsidiaries', depository, operating and securities accounts with Bank,
except for accounts existing as of the Closing Date at other institutions, as
disclosed on the Perfection Certificate or accounts opened by Borrower in
accordance with the provisions of Section 6.6(b).
(b) Borrower shall identify to Bank, in writing, any bank or
securities account opened by Borrower with any institution other than Bank.
In addition, for each such account that Borrower at any time opens or
maintains, Borrower shall, at Bank's request and option, pursuant to an
agreement in form and substance acceptable to Bank, cause the depository bank
or securities intermediary to agree that such account is the collateral of
Bank, and enter into a "control agreement" pursuant to the terms hereunder.
The provisions of the previous sentence shall not apply to deposit accounts
exclusively used for payroll, payroll taxes and other employee wage and
benefit payments to or for the benefit of Borrower's employees.
6.7 FURTHER ASSURANCES. Borrower shall execute any further instruments and
take further action as Bank reasonably requests to perfect or continue Bank's
security interest in the Collateral or to effect the purposes of this Agreement.
7 NEGATIVE COVENANTS
Borrower shall not do any of the following without Bank's prior written
consent, which shall not be unreasonably withheld, conditioned or delayed:
7.1 DISPOSITIONS. Convey, sell, lease, transfer, assign or otherwise
dispose of (collectively a "Transfer"), or permit any of its Subsidiaries to
Transfer, all or any part of its business or property, including the
Intellectual Property, except for Transfers of (a) Inventory in the ordinary
course of business; (b) non-exclusive licenses and similar arrangements for the
use of the property (including Intellectual Property) of Borrower or its
Subsidiaries in the ordinary course of business; (c) exclusive licenses and
similar arrangements for the use of Intellectual Property of Borrower or its
Subsidiaries in the ordinary course of business; or (d) worn-out or obsolete
Equipment. Borrower shall not enter into an agreement with any Person other than
Bank which restricts the subsequent granting of a security interest in the
Intellectual Property.
7.2 CHANGES IN BUSINESS, OWNERSHIP, MANAGEMENT OR BUSINESS LOCATIONS.
Engage in or permit any of its Subsidiaries to engage in any business other than
the businesses currently engaged in by Borrower or reasonably related thereto,
or have a material change in its ownership (other than by the sale of Borrower's
equity securities in a public offering or to venture capital investors so long
as Borrower identifies to Bank the venture capital investors prior to the
closing of the investment), or any one (1) of the Senior Management Team is no
longer actively involved in the management of the Borrower and a replacement,
reasonably acceptable to the Bank is not made within ninety (90) days thereof.
Borrower shall not, without at least thirty (30) days prior written notice to
Bank: (a) relocate its chief executive office, or add any new offices or
business locations, including warehouses (unless such new offices or business
locations contain less than Fifty Thousand Dollars ($50,000.00) in Borrower's
assets or property), or (b) change its jurisdiction of organization, or (c)
change its organizational structure or type, or (d) change its legal name, or
(e) change any organizational number (if any) assigned by its jurisdiction of
organization.
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7.3 MERGERS OR ACQUISITIONS. Merge or consolidate, or permit any of its
Subsidiaries to merge or consolidate, with any other Person, or acquire, or
permit any of its Subsidiaries to acquire, all or substantially all of the
capital stock or property of another Person. A Subsidiary may merge or
consolidate into another Subsidiary or into Borrower.
7.4 INDEBTEDNESS. Create, incur, assume, or be liable for any
Indebtedness, or permit any Subsidiary to do so, other than Permitted
Indebtedness.
7.5 ENCUMBRANCE. Create, incur, or allow any Lien on any of its property,
including the Intellectual Property, or assign or convey any right to receive
income, including the sale of any Accounts, or permit any of its Subsidiaries to
do so, except for Permitted Liens, or permit any Collateral not to be subject to
the first priority security interest granted herein. The Collateral may also be
subject to Permitted Liens.
7.6 DISTRIBUTIONS; INVESTMENTS. (a) Directly or indirectly acquire or own
any Person, or make any Investment in any Person, other than Permitted
Investments, or permit any of its Subsidiaries to do so; or (b) pay any
dividends or make any distribution or payment or redeem, retire or purchase any
capital stock.
7.7 TRANSACTIONS WITH AFFILIATES. Directly or indirectly enter into or
permit to exist any material transaction with any Affiliate of Borrower, except
for transactions that are in the ordinary course of Borrower's business, upon
fair and reasonable terms that are no less favorable to Borrower than would be
obtained in an arm's length transaction with a non-affiliated Person.
7.8 SUBORDINATED DEBT. Make or permit any payment on any Subordinated
Debt, except under the terms of the Subordinated Debt, or amend any provision in
any document relating to the Subordinated Debt
7.9 COMPLIANCE. (a) Become an "investment company" or a company controlled
by an "investment company", under the Investment Company Act of 1940 or
undertake as one of its important activities extending credit to purchase or
carry margin stock, or use the proceeds of any Credit Extension for that
purpose; (b) fail to meet the minimum funding requirements of ERISA, or permit a
Reportable Event or Prohibited Transaction, as defined in ERISA, to occur; or
(c) fail to comply with the Federal Fair Labor Standards Act or violate any
other law or regulation, if the violation could reasonably be expected to have a
material adverse effect on Borrower's business or operations or would reasonably
be expected to cause a Material Adverse Change, or permit any of its
Subsidiaries to do so.
8 EVENTS OF DEFAULT
Any one of the following shall constitute an event of default hereunder
(an "Event of Default"):
8.1 PAYMENT DEFAULT. Borrower fails to pay any of the Obligations within
three (3) Business Days after their due date (provided that such delay is not
due to the failure of Bank to properly execute an automatic debit pursuant to
Section 2.2(d), provided funds for such debit were available on the due date).
During such three (3) Business Day period the failure to cure the default shall
not constitute an Event of Default (but no Credit Extension shall be made during
such cure period).
8.2 COVENANT DEFAULT. (a) Borrower fails or neglects to perform any
obligation in Section 6.2 or 6.6 or violates any covenant in Article 7; or (b)
Borrower fails or neglects to perform, keep, or observe any other material term,
provision, condition, covenant or agreement contained in this Agreement, any of
the Loan Documents, or in any present or future agreement between Borrower and
Bank and as to any default under such other material term, provision, condition,
covenant or agreement that can be cured, has failed to cure the default within
ten (10) days after the occurrence thereof; provided, however, that if the
default cannot by its nature be cured within the ten (10) day period or cannot
after diligent attempts by Borrower be cured within such ten (10) day period,
and such default is likely to be cured within a reasonable time, then Borrower
shall have an additional period (which shall not in any case exceed thirty (30)
days) to attempt to cure such default, and within such reasonable time period
the failure to have cured such default shall not be deemed an Event of Default
(provided that no Credit Extensions shall be made during such cure period).
Grace periods provided under this Section shall not apply, among other things,
to financial covenants or any other covenants that are required to be satisfied,
completed or tested by a date certain.
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8.3 MATERIAL ADVERSE CHANGE. A Material Adverse Change occurs.
8.4 ATTACHMENT. (a) Any material portion of Borrower's assets is attached,
seized, levied on, or comes into possession of a trustee or receiver and the
attachment, seizure or levy is not removed in ten (10) days; (b) the service of
process upon Borrower seeking to attach, by trustee or similar process, any
funds of Borrower on deposit with Bank, or any entity under control of Bank
(including a subsidiary); (c) Borrower is enjoined, restrained, or prevented by
court order from conducting a material part of its business; (d) a judgment or
other claim becomes a Lien on a material portion of Borrower's assets; or (e) a
notice of lien, levy, or assessment is filed against any of Borrower's assets by
any government agency and not paid within ten (10) days after Borrower receives
notice. These are not Events of Default if stayed or if a bond is posted pending
contest by Borrower (but no Credit Extensions shall be made during the cure
period).
8.5 INSOLVENCY. (a) Borrower is unable to pay its debts (including trade
debts) as they become due or otherwise becomes insolvent; (b) Borrower begins an
Insolvency Proceeding; or (c) an Insolvency Proceeding is begun against Borrower
and not dismissed or stayed within thirty (30) days (but no Credit Extensions
shall be made before any Insolvency Proceeding is dismissed).
8.6 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 in an amount in excess of One Hundred Thousand Dollars
($100,000.00) or that could result in a Material Adverse Change.
8.7 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
($50,000.00) shall be rendered against Borrower and shall remain unsatisfied and
unstayed for a period of ten (10) days (provided that no Credit Extensions will
be made prior to the satisfaction or stay of such judgment).
8.8 MISREPRESENTATIONS. If Borrower or any Person acting for Borrower
makes any material misrepresentation or material misstatement now or later in
any warranty or representation in this Agreement or in any writing delivered to
Bank or to induce Bank to enter this Agreement or any Loan Document.
8.9 SUBORDINATED DEBT. A default or breach occurs under any agreement
between Borrower and any creditor of Borrower that signed a subordination
agreement with Bank, or any creditor that has signed a subordination agreement
with Bank breaches any terms of the subordination agreement.
8.10 LEGAL OPINION OF BORROWER'S COUNSEL. Borrower fails to deliver to
Bank, on or before April 15, 2005, a legal opinion of Borrower's counsel (as to
authority and enforceability), in form and substance satisfactory to Bank.
9 BANK'S RIGHTS AND REMEDIES
9.1 RIGHTS AND REMEDIES. When an Event of Default occurs and continues,
Bank may, without notice or demand, do any or all of the following:
(a) Declare all Obligations immediately due and payable (but if an
Event of Default described in Section 8.5 occurs all Obligations are
immediately due and payable without any action by Bank);
(b) Stop advancing money or extending credit for Borrower's benefit
under this Agreement or under any other agreement between Borrower and Bank;
(c) Settle or adjust disputes and claims directly with account
debtors for amounts, on terms and in any order that Bank considers advisable
and notify any Person owing Borrower money of Bank's security interest in
such funds and verify and/or collect the amounts owed by such account
debtors. After the occurrence of an Event of Default, any amounts received by
Borrower shall be held in trust by Borrower for Bank, and, if requested by
Bank, Borrower shall immediately deliver such receipts to Bank in the form
received from the account debtor, with proper endorsements for deposit;
-8-
(d) Make any payments and do any acts it considers necessary or
reasonable to protect its security interest in the Collateral. Borrower shall
assemble the Collateral if Bank requests and make it available as Bank
designates. Bank may enter premises where the Collateral is located, take and
maintain possession of any part of the Collateral, and pay, purchase,
contest, or compromise any Lien which appears to be prior or superior to its
security interest and pay all expenses incurred. Borrower grants Bank a
license to enter and occupy any of its premises, without charge, to exercise
any of Bank's rights or remedies;
(e) Apply to the Obligations any (i) balances and deposits of
Borrower it holds, or (ii) any amount held by Bank owing to or for the credit
or the account of Borrower;
(f) Ship, reclaim, recover, store, finish, maintain, repair, prepare
for sale, advertise for sale, and sell the Collateral. Bank is hereby granted
a non-exclusive, royalty-free license or other right to use, without charge,
Borrower's labels, Patents, Copyrights, Mask Works, rights of use of any
name, trade secrets, trade names, Trademarks, service marks, and advertising
matter, or any similar property as it pertains to the Collateral, in
completing production of, advertising for sale, and selling any Collateral
and, in connection with Bank's exercise of its rights under this Section,
Borrower's rights under all licenses and all franchise agreements inure to
Bank's benefit (subject to applicable law);
(g) Place a "hold" on any account maintained with Bank and/or
deliver a notice of exclusive control, any entitlement order, or other
directions or instructions pursuant to any control agreement or similar
agreements providing control of any Collateral; and
(h) Exercise all rights and remedies and dispose of the Collateral
according to the Code.
9.2 POWER OF ATTORNEY. Borrower hereby irrevocably appoints Bank as its
lawful attorney-in-fact, to be effective upon the occurrence and during the
continuance of an Event of Default, to: (a) endorse Borrower's name on any
checks or other forms of payment or security; (b) sign Borrower's name on any
invoice or xxxx of lading for any Account or drafts against account debtors; (c)
settle and adjust disputes and claims about the Accounts directly with account
debtors, for amounts and on terms Bank determines reasonable; (d) make, settle,
and adjust all claims under Borrower's insurance policies; and (e) transfer the
Collateral into the name of Bank or a third party as the Code permits. Borrower
hereby appoints Bank as its lawful attorney-in-fact to sign Borrower's name on
any documents necessary to perfect or continue the perfection of any security
interest regardless of whether an Event of Default has occurred until all
Obligations have been satisfied in full and Bank is under no further obligation
to make Credit Extensions hereunder. Bank's foregoing appointment as Borrower's
attorney in fact, and all of Bank's rights and powers, coupled with an interest,
are irrevocable until all Obligations have been fully repaid and performed and
Bank's obligation to provide Credit Extensions terminates.
9.3 BANK EXPENSES. Any amounts paid by Bank as provided herein shall
constitute Bank Expenses and are immediately due and payable, and shall bear
interest at the then applicable rate hereunder and be secured by the Collateral.
No payments by Bank shall be deemed an agreement to make similar payments in the
future or Bank's waiver of any Event of Default.
9.4 BANK'S LIABILITY FOR COLLATERAL. So long as Bank complies with
reasonable banking practices regarding the safekeeping of Collateral and Section
9-207 of the Code, Bank shall not be liable or responsible for: (a) the
safekeeping of the Collateral; (b) any loss or damage to the Collateral; (c) any
diminution in the value of the Collateral; or (d) any act or default of any
carrier, warehouseman, bailee, or other Person. Borrower bears all risk of loss,
damage or destruction of the Collateral.
9.5 REMEDIES CUMULATIVE. Bank's rights and remedies under this Agreement,
the Loan Documents, and all other agreements are cumulative. Bank has all rights
and remedies provided under the Code, by law, or in equity. Bank's exercise of
one right or remedy is not an election, and Bank's waiver of any Event of
Default is not a continuing waiver. Bank's delay is not a waiver, election, or
acquiescence. No waiver hereunder shall be effective unless signed by Bank and
then is only effective for the specific instance and purpose for which it was
given.
9.6 DEMAND WAIVER. Borrower waives demand, 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 held by Bank on which Borrower is
liable.
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10 NOTICES
All notices or demands by any party to this Agreement or any related
agreement must be in writing and be personally delivered or sent by an overnight
delivery service, by certified mail, postage prepaid, return receipt requested,
or by facsimile at the addresses listed below. Either Bank or Borrower may
change its notice address by giving the other party written notice.
If to Borrower: Cyberkinetics Neurotechnology Systems, Inc.
000 Xxxxxxxxxx Xxxxxxxxx, Xxxxx 000
Xxxxxxxxxx, Xxxxxxxxxxxxx 00000
Attn: Xxxx Xxxxxx, Vice President-Finance
Fax: (000) 000-0000
If to Bank: Silicon Valley Bank
One Xxxxxx Executive Park, Suite 200
0000 Xxxxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attn: Xx. Xxxxxxx Xxxxxxxx
Fax: (000) 000-0000
with a copy to: Xxxxxx & Xxxxxxxxxx LLP
Xxxxx Xxxxxx Xxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attn: Xxxxx X. Xxxxxxx, Esquire
FAX: (000) 000-0000
11 CHOICE OF LAW, VENUE AND JURY TRIAL WAIVER
Massachusetts law governs the Loan Documents without regard to principles
of conflicts of law. Borrower and Bank each submit to the exclusive jurisdiction
of the State and Federal courts in Massachusetts. NOTWITHSTANDING THE FOREGOING,
BANK SHALL HAVE THE RIGHT TO BRING ANY ACTION OR PROCEEDING AGAINST BORROWER OR
ITS PROPERTY IN THE COURTS OF ANY OTHER JURISDICTION WHICH BANK DEEMS NECESSARY
OR APPROPRIATE IN ORDER TO REALIZE ON THE COLLATERAL OR TO OTHERWISE ENFORCE
BANK'S RIGHTS AGAINST BORROWER OR ITS PROPERTY.
BORROWER AND BANK EACH WAIVE THEIR RIGHT TO A JURY TRIAL OF ANY CLAIM OR CAUSE
OF ACTION ARISING OUT OF OR BASED UPON THIS AGREEMENT, THE LOAN DOCUMENTS OR ANY
CONTEMPLATED TRANSACTION, INCLUDING CONTRACT, TORT, BREACH OF DUTY AND ALL OTHER
CLAIMS. THIS WAIVER IS A MATERIAL INDUCEMENT FOR BOTH PARTIES TO ENTER INTO THIS
AGREEMENT. EACH PARTY HAS REVIEWED THIS WAIVER WITH ITS COUNSEL.
12 GENERAL PROVISIONS
12.1 SUCCESSORS AND ASSIGNS. This Agreement binds and is for the benefit
of the successors and permitted assigns of each party. Borrower may not assign
this Agreement or any rights or Obligations under it without Bank's prior
written consent which may be granted or withheld in Bank's discretion. Bank has
the right, without the consent of or notice to Borrower, to sell, transfer,
assign, negotiate, or grant participation in all or any part of, or any interest
in, Bank's obligations, rights and benefits under this Agreement, the Loan
Documents or any related agreement, except the Warrant, transfer of which is
limited pursuant to its terms.
12.2 INDEMNIFICATION. Borrower hereby indemnifies, defends and holds Bank
and its directors, officers, employees and agents harmless against: (a) all
obligations, demands, claims, and liabilities asserted by any other party or
Person in connection with the transactions contemplated by the Loan Documents;
and (b) all losses or Bank Expenses incurred, or paid by Bank from, following,
or consequential to transactions between Bank and
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Borrower (including reasonable attorneys' fees and expenses), except for losses
caused by Bank's gross negligence or willful misconduct.
12.3 RIGHT OF SET OFF. Borrower hereby grants to Bank, a lien, security
interest and right of set off as security for all Obligations to Bank, whether
now existing or hereafter arising upon and against all deposits, credits,
collateral and property, now or hereafter in the possession, custody,
safekeeping or control of Bank or any entity under the control of Bank
(including a Bank subsidiary) or in transit to any of them. At any time after
the occurrence and during the continuance of an Event of Default, without demand
or notice, Bank may set off the same or any part thereof and apply the same to
any liability or obligation of Borrower when due regardless of the adequacy of
any other collateral securing the Obligations. ANY AND ALL RIGHTS TO REQUIRE
BANK TO EXERCISE ITS RIGHTS OR REMEDIES WITH RESPECT TO ANY OTHER COLLATERAL
WHICH SECURES THE OBLIGATIONS, PRIOR TO EXERCISING ITS RIGHT OF SETOFF WITH
RESPECT TO SUCH DEPOSITS, CREDITS OR OTHER PROPERTY OF BORROWER ARE HEREBY
KNOWINGLY, VOLUNTARILY AND IRREVOCABLY WAIVED.
12.4 TIME OF ESSENCE. Time is of the essence for the performance of all
Obligations in this Agreement.
12.5 SEVERABILITY OF PROVISION. Each provision of this Agreement is
severable from every other provision in determining the enforceability of any
provision.
12.6 AMENDMENTS IN WRITING; INTEGRATION. All amendments to this Agreement
must be in writing signed by both Bank and Borrower. This Agreement and the Loan
Documents represent the entire agreement about this subject matter, and
supersede prior negotiations or agreements. All prior agreements,
understandings, representations, warranties, and negotiations between the
parties about the subject matter of this Agreement and the Loan Documents merge
into this Agreement and the Loan Documents.
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, are an original, and all taken together, constitute
one Agreement.
12.8 SURVIVAL. All covenants, representations and warranties made in this
Agreement continue in full force until this Agreement has terminated pursuant to
its terms, and all Obligations have been satisfied.. The obligation of Borrower
in Section 12.2 to indemnify Bank shall survive until the statute of limitations
with respect to such claim or cause of action shall have run.
12.9 CONFIDENTIALITY. In handling any of Borrower's confidential
information, Bank shall exercise the same degree of care that it exercises for
its own proprietary information, but disclosure of information may be made: (a)
to Bank's subsidiaries or affiliates in connection with their business with
Borrower; (b) to prospective transferees or purchasers of any interest in the
Credit Extensions (provided, however, Bank shall use commercially reasonable
efforts in obtaining such prospective transferee's or purchaser's agreement to
the terms of this provision); (c) as required by law, regulation, subpoena, or
other order, (d) as required in connection with Bank's examination or audit; and
(e) as Bank considers appropriate in exercising remedies under this Agreement.
Confidential information does not include information that either: (i) is in the
public domain or in Bank's possession when disclosed to Bank, or becomes part of
the public domain after disclosure to Bank; or (ii) is disclosed to Bank by a
third party, if Bank does not know that the third party is prohibited from
disclosing the information.
13 DEFINITIONS
13.1 DEFINITIONS. In this Agreement:
"ACCOUNTS" are all existing and later arising accounts, contract rights,
and other obligations owed Borrower in connection with its sale or lease of
goods (including licensing software and other technology) or provision of
services, all credit insurance, guaranties, other security and all merchandise
returned or reclaimed by Borrower and Borrower's Books relating to any of the
foregoing, as such definition may be amended from time to time according to the
Code.
-11-
"ADVANCE" or "ADVANCES" is a loan advance (or advances) under the
Revolving Line.
"AFFILIATE" is a Person that owns or controls directly or indirectly the
Person, any Person that controls or is controlled by or is under common control
with the Person, and each of that Person's senior executive officers, directors,
partners and, for any Person that is a limited liability company, that Person's
managers and members.
"BANK EXPENSES" are all audit fees and expenses and reasonable costs or
expenses (including reasonable attorneys' fees and expenses) for preparing,
negotiating, administering, defending and enforcing the Loan Documents
(including appeals or Insolvency Proceedings).
"BORROWER'S BOOKS" are all Borrower's books and records including ledgers,
records regarding Borrower's assets or liabilities, the Collateral, business
operations or financial condition and all computer programs or storage or any
equipment containing the information.
"BUSINESS DAY" is any day that is not a Saturday, Sunday or a day on which
Bank is closed.
"CLOSING DATE" is the date of this Agreement.
"CODE" is the Uniform Commercial Code as adopted in Massachusetts, as
amended and as may be amended and in effect from time to time.
"COLLATERAL" is any and all properties, rights and assets of Borrower
granted by Borrower to Bank or arising under the Code, now, or in the future, in
which Borrower obtains an interest, or the power to transfer rights, in the
property described on EXHIBIT A.
"CONTINGENT OBLIGATION" is, for any Person, any direct or indirect
liability, contingent or not, of that Person for (a) any indebtedness, lease,
dividend, letter of credit or other obligation of another such as an obligation
directly or indirectly guaranteed, endorsed, co-made, discounted or sold with
recourse by that Person, or for which that Person is directly or indirectly
liable; (b) any obligations for undrawn letters of credit for the account of
that Person; and (c) all obligations from any interest rate, currency or
commodity swap agreement, interest rate cap or collar agreement, or other
agreement or arrangement designated to protect a Person against fluctuation in
interest rates, currency exchange rates or commodity prices; but "Contingent
Obligation" does not include endorsements in the ordinary course of business.
The amount of a Contingent Obligation is the stated or determined amount of the
primary obligation for which the Contingent Obligation is made or, if not
determinable, the maximum reasonably anticipated liability for it determined by
the Person in good faith; but the amount may not exceed the maximum of the
obligations under any guarantee or other support arrangement.
"COPYRIGHTS" are all copyright rights, applications or registrations and
like protections in each work or authorship or derivative work, whether
published or not (whether or not it is a trade secret) now or later existing,
created, acquired or held.
"CREDIT EXTENSION" is each Advance or any other extension of credit by
Bank for Borrower's benefit.
"EQUIPMENT" is all present and future machinery, equipment, tenant
improvements, furniture, fixtures, vehicles, tools, parts and attachments in
which Borrower has any interest.
"ERISA" is the Employment Retirement Income Security Act of 1974, and its
regulations.
"EVENT OF DEFAULT" is defined in Article 8.
"GAAP" is generally accepted accounting principles in the United States.
"INDEBTEDNESS" is (a) indebtedness for borrowed money or the deferred
price of property or services, such as reimbursement and other obligations for
surety bonds and letters of credit, (b) obligations evidenced by notes, bonds,
debentures or similar instruments, (c) capital lease obligations and (d)
Contingent Obligations.
-12-
"INSOLVENCY PROCEEDING" is any proceeding by or against any Person under
the United States Bankruptcy Code, or any other bankruptcy or insolvency law,
including assignments for the benefit of creditors, compositions, extensions
generally with its creditors, or proceedings seeking reorganization,
arrangement, or other relief.
"INTELLECTUAL PROPERTY" is any Copyrights, Copyright rights, Copyright
applications, Copyright registrations and like protections in each work of
authorship and derivative work, whether published or unpublished, now owned or
later acquired; any Patents, Trademarks, service marks and applications
therefor; any trade secret rights, including any rights to unpatented
inventions, now owned or hereafter acquired.
"INVENTORY" is present and future inventory in which Borrower has any
interest, including merchandise, raw materials, parts, supplies, packing and
shipping materials, work in process and finished products intended for sale or
lease or to be furnished under a contract of service, of every kind and
description now or later owned by or in the custody or possession, actual or
constructive, of Borrower, including inventory temporarily out of its custody or
possession or in transit and including returns on any accounts or other proceeds
(including insurance proceeds) from the sale or disposition of any of the
foregoing and any documents of title.
"INVESTMENT" is any beneficial ownership of (including stock, partnership
interest or other securities) any Person, or any loan, advance or capital
contribution to any Person.
"LOAN DOCUMENTS" are, collectively, this Agreement, any guaranties
executed by any Guarantor, and any other present or future agreement between
Borrower and/or for the benefit of Bank in connection with this Agreement, all
as amended, extended or restated.
"MATERIAL ADVERSE CHANGE" is: (a) a material impairment in the perfection
or priority of Bank's security interest in the Collateral or in the value of
such Collateral; (b) a material adverse change in the business, operations, or
condition (financial or otherwise) of Borrower; or (c) a material impairment of
the prospect of repayment of any portion of the Obligations.
"OBLIGATIONS" are all liabilities, obligations, covenants, agreements,
debts, principal, interest, Bank Expenses and other amounts Borrower owes Bank
now or later, including letters of credit, cash management services, and foreign
exchange contracts, if any, and including interest accruing after Insolvency
Proceedings begin and debts, liabilities, or obligations of Borrower assigned to
Bank.
"PAYMENT/ADVANCE FORM" is in the form of EXHIBIT B.
"PATENTS" are patents, patent applications and like protections, including
improvements, divisions, continuations, renewals, reissues, extensions and
continuations-in-part of the same.
"PERFECTION CERTIFICATE" is defined in Section 5.1.
"PERMITTED INDEBTEDNESS" is:
(a) Borrower's indebtedness to Bank under this Agreement or
the Loan Documents;
(b) Indebtedness existing on the Closing Date and shown on the
Perfection Certificate;
(c) Subordinated Debt;
(d) Indebtedness secured by Permitted Liens and;
(e) Extensions, refinancings, modifications, amendments and
restatements of any items of Permitted Indebtedness (a) through (d)
above, provided that the principal amount thereof is not increased
or the terms thereof are not modified to impose more burdensome
terms upon Borrower or its Subsidiary, as the case may be.
-13-
"PERMITTED INVESTMENTS" are:
(a) Investments shown on the Perfection Certificate and
existing on the Closing Date; and
(b) (i) marketable direct obligations issued or
unconditionally guaranteed by the United States or its agency or any
state maturing within 1 year from its acquisition, (ii) commercial
paper maturing no more than 1 year after its creation and having the
highest rating from either Standard & Poor's Corporation or Xxxxx'x
Investors Service, Inc., (iii) Bank's certificates of deposit issued
maturing no more than 1 year after issue, (iv) any other investments
administered through Bank.
"PERMITTED LIENS" are:
(a) Liens existing on the Closing Date and shown on the
Perfection Certificate or arising under this Agreement or other Loan
Documents;
(b) Liens for taxes, fees, assessments or other government
charges or levies, either not delinquent or being contested in good
faith and for which Borrower maintains adequate reserves on its
Books, if they have no priority over any of Bank's security
interests;
(c) Purchase money Liens (i) on Equipment acquired or held by
Borrower incurred for financing the acquisition of the Equipment
securing no more than One Hundred Thousand Dollars ($100,000.00) in
the aggregate amount outstanding, or (ii) existing on equipment when
acquired, if the Lien is confined to the property and improvements
and the proceeds of the equipment;
(d) Leases or subleases and non-exclusive licenses or
sublicenses granted in the ordinary course of Borrower's business,
if the leases, subleases, licenses and sublicenses permit granting
Bank a security interest; and
(e) Liens incurred in the extension, renewal or refinancing of
the indebtedness secured by Liens described in (a) through (d), but
any extension, renewal or replacement Lien must be limited to the
property encumbered by the existing Lien and the principal amount of
the indebtedness may not increase.
"PERSON" is any individual, sole proprietorship, partnership, limited
liability company, joint venture, company, trust, unincorporated organization,
association, corporation, institution, public benefit corporation, firm, joint
stock company, estate, entity or government agency.
"PRIME RATE" is Bank's most recently announced "prime rate," even if it is
not Bank's lowest rate.
"RESPONSIBLE OFFICER" is each of the Chief Executive Officer, President,
Chief Financial Officer, Vice President-Finance, and Controller of Borrower.
"REVOLVING LINE" is an Advance or Advances of up to Three Million Dollars
($3,000,000.00).
"REVOLVING LINE AVAILABILITY" is defined in Section 2.1.1(a).
"REVOLVING LINE MATURITY DATE" is March 30, 2006.
"SENIOR MANAGEMENT TEAM" is Borrower's Chief Executive Officer, Chief
Science Office and Executive Vice President of Technology and Intellectual
Property.
"SUBORDINATED DEBT" is debt incurred by Borrower subordinated to
Borrower's debt to Bank (pursuant to a subordination agreement entered into
between Bank, Borrower and the subordinated creditor), on terms acceptable to
Bank.
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"SUBSIDIARY" is any Person, or any other business entity of which more
than 50% of the voting stock or other equity interests is owned or controlled,
directly or indirectly, by the Person or one or more Affiliates of the Person.
"TRADEMARKS" are trademark and service xxxx rights, registered or not,
applications to register and registrations and like protections, and the entire
goodwill of the business of Borrower connected with the trademarks.
"WARRANT" is the warrant to purchase shares of Borrower's common stock,
issued by Borrower to Bank on the Closing Date.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as a sealed instrument under the laws of the Commonwealth of
Massachusetts as of the date first above written.
BORROWER:
CYBERKINETICS NEUROTECHNOLOGY SYSTEMS, INC.
By: /s/ Xxx Xxxxxxxx
------------------------------------------
Name: Xxx Xxxxxxxx
Title: CEO & President
BANK:
SILICON VALLEY BANK
By: /s/ Xxxxxxxxx Le
------------------------------------------
Name: Xxxxxxxxx Le
Title: Operations Supervisor
S-1
EXHIBIT A
The Collateral consists of all right, title and interest of Borrower in
and to the following:
All goods, equipment, inventory, contract rights or rights to payment of
money, license agreements, franchise agreements, general intangibles (including
payment intangibles), accounts (including health-care receivables), documents,
instruments (including any promissory notes), chattel paper (whether tangible or
electronic), cash, deposit accounts, fixtures, letters of credit rights (whether
or not the letter of credit is evidenced by a writing), commercial tort claims,
securities, and all other investment property supporting obligations, and
financial assets, whether now owned or hereafter acquired, wherever located; and
All Borrower's Books relating to the foregoing and any and all claims,
rights and interests in any of the above and all substitutions for, additions,
attachments, accessories, accessions and improvements to and replacements,
products, proceeds and insurance proceeds of any or all of the foregoing.
The Collateral does not include:
Any copyright rights, copyright applications, copyright registrations mask
works, and like protections in each work of authorship and derivative work,
whether published or unpublished, now owned or later acquired; any patents,
trademarks, service marks and applications therefor; any trade secret rights,
including any rights to unpatented inventions, now owned or hereafter acquired.
Notwithstanding the foregoing, the Collateral shall include all accounts,
license and royalty fees and other revenues, proceeds, or income arising out of
or relating to any of the foregoing. To the extent a court of competent
jurisdiction holds that a security interest in any Intellectual Property is
necessary to have a security interest in any accounts, license and royalty fees
and other revenues, proceeds, or income arising out of or relating to any of the
foregoing Intellectual Property, then the Collateral shall, effective as of the
Closing Date, include the Intellectual Property, to the extent necessary to
permit perfection of Bank's security interest in such accounts, license and
royalty fees and other revenues, proceeds, or income arising out of or relating
to any of the Intellectual Property.
Exhibit A-1
EXHIBIT B
LOAN PAYMENT/ADVANCE REQUEST FORM
DEADLINE FOR SAME DAY PROCESSING IS 3:00 E.S.T.
Fax To: (000) 000-0000 Date: _____________________
LOAN PAYMENT:
Cyberkinetics Neurotechnology Systems, Inc.
From Account #___________________________ To Account #_____________________
(Deposit Account #) (Loan Account #)
Principal $______________________________ and/or Interest $________________
AUTHORIZED SIGNATURE: ___________________ Phone Number: ___________________
LOAN ADVANCE:
Complete Outgoing Wire Request section below if all or a portion of the funds
from this loan advance are for an outgoing wire.
From Account #___________________________ To Account #_____________________
(Loan Account #) (Deposit Account #)
Amount of Advance $______________________
All Borrower's representation and warranties in the Loan and Security Agreement
are true, correct and complete in all material respects on the date of the
telephone transfer request for an advance, but those representations and
warranties expressly referring to another date shall be true, correct and
complete in all material respects as of such date:
AUTHORIZED SIGNATURE: ___________________ Phone Number: ___________________
OUTGOING WIRE REQUEST
COMPLETE ONLY IF ALL OR A PORTION OF FUNDS FROM THE LOAN ADVANCE ABOVE ARE TO BE
WIRED.
Deadline for same day processing is 3:00 pm, E.S.T.
Beneficiary Name: _______________________ Amount of Wire: $________________
Beneficiary Bank: _______________________ Account Number: _________________
City and State: _________________________
Beneficiary Bank Transit (ABA) #: _______ Beneficiary Bank Code (Swift,
Sort, Chip, etc.):______________
(FOR INTERNATIONAL WIRE ONLY)
Intermediary Bank: ______________________ Transit (ABA) #: ________________
For Further Credit to: _________________________________________________________
Special Instruction: ___________________________________________________________
By signing below, I (we) acknowledge and agree that my (our) funds transfer
request shall be processed in accordance with and subject to the terms and
conditions set forth in the agreements(s) covering funds transfer service(s),
which agreements(s) were previously received and executed by me (us).
Authorized Signature: _______________ 2nd Signature (If Required): __________
Print Name/Title: ___________________ Print Name/Title: _____________________
Telephone # _______________________________________ Telephone #
_______________________________________
Exhibit B-1
Exhibit D-1
