Exhibit 10.46
LOAN & SECURITY AGREEMENT
THIS LOAN AND SECURITY AGREEMENT entered into as of the 26th day of February,
1999, by and between General Electric Capital Business Asset Funding
Corporation, a Delaware corporation, whose address is 00000 XX 0xx Xxxxxx, Xxxxx
000, Xxxxxxxx, XX 00000 ("Lender") and Aurora Biosciences Corporation, a
Delaware corporation, whose address is 00000 Xxxxxxxxx Xxxx, Xxx Xxxxx, XX 00000
("Borrower").
WHEREAS, Lender has agreed to make a commercial loan or loans to
Borrower; and
WHEREAS, as a condition to making the loans, and in order to secure the
repayment thereof, Lender has required Borrower to execute and deliver to Lender
this Loan and Security Agreement.
NOW THEREFORE, for good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, Borrower and Lender agree as follows:
1. CREATION OF SECURITY INTEREST. As security for the due and punctual
payment of any and all of the present and future obligations of the borrower to
Lender hereunder, whether direct or contingent or joint or several, Borrower
hereby conveys, assigns and grants to Lender a continuing security interest in
all of Borrower's rights, title and interests in and to the equipment described
in the Supplemental Security Agreement(s) entered into pursuant to this Loan and
Security Agreement from time to time ("Equipment") including all present and
future additions, attachments and accessories thereto, all substitutions
therefor and replacements thereof and all proceeds thereof, including all
proceeds of insurance (such Equipment and property hereinafter called
"Collateral"); provided, however, that there shall be excluded from Collateral
all general intangibles (including, without limitation, contract rights) which
by their terms, or as a matter of law, are nonassignable without the consent of
the licensor or other third person where and to the extent that the assignment
effected by the foregoing creation of a security interest (and the perfection
thereof) would result in a default under such general intangible for which the
available remedies include the right to terminate such general intangible.
2. THE LOANS.
(a) Subject to the terms and conditions of this Loan and Security
Agreement, lender agrees to make a loan or loans to Borrower. The maximum
principal amount of any loan or loans to be made by Lender to Borrower shall be
within Lender's discretion, subject to the exercise of Lender's reasonable
business judgment, and shall be as stated in the loan commitment letter issued
by lender to Borrower, or in the event a commitment letter is not issued by
Lender, in Lender's internal credit approval (each such loan or loans shall be
referred to as "the Loan Amount").
(b) The Loan Amounts shall be repaid by Borrower as a term loan or term
loans ("Term Loan"). The Term Loan shall be evidenced by a promissory note or
notes in the form attached hereto as Exhibit "A" ("Term Note"). The payment
provisions of each Term Note shall be stated therein.
(c) If requested by Borrower, and in accordance with the terms and
conditions of Section 3 hereof, Lender shall make interim fundings to Borrower
of a Term Loan as partial advances of the Loan Amount ("Interim Loans"). The
Interim Loans shall either be for the payment of the acquisition cost of any
items of Equipment delivered and accepted by Borrower prior to the expiration
date of Lender's loan commitment to Borrower ("Commitment Expiration date") or
to fund progress payments to the vendor or manufacturer of the Equipment, if the
making of progress payments was agreed to by Lender in its commitment or
approval to make the loan or loans to Borrower. The Interim Loans shall be
evidenced by promissory notes in the form attached hereto as Exhibit "B"
("Interim Note"). Interest on all Interim Loans shall be payable as provided
therein. The principal amount due under the Interim Loans shall be due as
provided in the Interim Notes, at which time, provided no Event of Default
hereunder has occurred and is continuing. Lender shall consolidate all Interim
Loans and convert them to a Term Loan evidenced by a Term Note or Notes. Whether
or not a Term Loan is evidenced by one or more Term Notes shall be agreed
between Lender and Borrower, or in the absence of such an agreement, as decided
by Lender, in the exercise of its reasonable business judgment.
(d) In the event that the amount loan pursuant to the Interim Loans is less
than the Loan Amount, subject to Borrower's compliance with the terms and
conditions of this Loan and Security Agreement (including the satisfaction of
the conditions of borrowing set forth in Section 7 of this Loan and Security
Agreement including but not limited to providing Lender with a description of
the items of Equipment), Lender shall disburse to Borrower the balance of the
Loan Amount on the same date that the Interim Loans are converted into a term
loan.
3. METHOD FOR BORROWING ON INTERIM LOAN. Borrower shall give Lender at
least five (5) business days written notice of a request for the disbursement of
an Interim Loan ("Request"), specifying the date on which the Interim Loan is to
be disbursed. Such Request shall be in the form attached hereto as Exhibit "C".
Such Request shall be accompanied by an original copy of the invoice or invoices
to be paid from the Interim Loan. Such Request shall constitute a representation
and warranty by the Borrower that (i) as of the date of the Request no Event of
Default and (ii) in the event items of Equipment have been delivered to
Borrower, Borrower has unconditionally accepted the Equipment from the vendor
thereof. Subject to the conditions of this Loan and Security Agreement, Lender
shall disburse the Interim Loan to the invoicing party, or if Borrower shall
have paid the amount of such invoice, Lender shall reimburse Borrower, upon
receipt of proof of payment from Borrower.
4. CROSS COLLATERAL/CROSS DEFAULT. All Collateral shall secure the payment
and performance of all of Borrower's liabilities and obligations to Lender
hereunder and under any of the loan documents relating hereto including, but not
limited to all Interim Notes and all Term Notes (the Loan and Security
Agreement, the Interim Notes, the Term Notes, the Supplemental Security
Agreement(s) and all other loan documents may be referred to herein collectively
as the "Loan Documents"). Lender's security interest in the Collateral shall not
be terminated until and unless all of Borrower's obligations to Lender under any
of the Loan Documents are fully paid and performed. The occurrence of an event
of default under any other of the Loan Documents shall be deemed to be an Event
of Default hereunder and an Event of Default hereunder shall be deemed to be an
event of default under any other of the Loan Documents.
5 REPRESENTATIONS AND WARRANTIES. Borrower hereby represents and warrants
as follows:
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(a) Power and Authorization. Borrower has the full power and (corporate)
authority to execute deliver and perform Borrower's obligations under the Loan
Documents. The execution and delivery of the Loan Documents have been authorized
by all requisite corporate action on the part of Borrower. The execution,
delivery and performance of the Loan Documents have not constituted and will not
constitute a breach, default or violation of or under Borrower's articles of
incorporation, by-laws (partnership agreement), or any other agreement,
indenture, contract, lease, law, order, decree, judgment, or injunction to which
Borrower is a party or may be bound and have not resulted and will not result in
the creation of any lien upon the Equipment pursuant to any agreement,
indenture, lease, contract or other instrument to which Borrower is a party,
except the lien created by this Loan and Security Agreement.
(b) Existence. If Borrower is a corporation, Borrower (I) is duly
incorporated, validly existing and in good standing under the laws of its state
of incorporation, (ii) has all corporate powers and all governmental licenses,
authorizations, consents and approvals required to carry out its business as now
conducted, except where the failure to possess the same would not have a
material and adverse effect on the financial condition or operation of Borrower
or its ability to meet its obligations under this Agreement, and (iii) is duly
qualified to transact business as now conducted, and (iii) is duly qualified to
transact business as a foreign corporation in each jurisdiction where the
Equipment will be located and in the jurisdiction where its principal place of
business is located.
(c) Binding Effect. This Loan and Security Agreement constitutes the valid
and binding agreement of the Borrower; the Interim Notes and the Term Note, when
executed and delivered, will constitute the valid and binding obligations of the
Borrower; and the Loan Documents are enforceable in accordance with their terms
except as (i) the enforceability thereof may be limited by the bankruptcy laws,
and (ii) rights of acceleration and the availability of equitable remedies may
be limited by equitable principles of general applicability.
(d) Litigation. There is no action, suit or proceeding pending against, or
to the knowledge of the Borrower, threatened against or affecting the Borrower,
before any court or arbitrator or any governmental body, agency or official
which has not been previously disclosed to the Lender in writing and in which
there is a reasonable possibility of an adverse decision which could materially
adversely affect the business, financial condition or results of operations of
the Borrower or which would in any manner draw into question the validity of any
of the Loan Documents.
(e) Filing of Tax Returns. The Borrower has filed all tax returns required
to have been filed and has paid all taxes shown to be due and payable on such
returns, including interest and penalties, and all other taxes which are payable
by it, to the extent the same have become due and payable. The Borrower knows of
no proposed tax assessment against it and all tax liabilities of the Borrower
are adequately provided for.
(f) Title. The Borrower has or shall have at the time it executes the Term
Note good and indefeasible title to the Collateral free and clear of all liens
other than the Lender's lien.
(g) Compliance with Law. The business and operations of the Borrower have
been and are being conducted in accordance with all applicable laws, rules and
regulations, other than violations which are not reasonably likely to (either
individually or collectively) have a material adverse effect on the financial
condition or operations of the Borrower.
(h) Full Disclosure. All documents, records, instruments, certificates,
statements (including, but not by way of limitation, financial statements of
Borrower) and information provided to Lender by Borrower in connection with this
Loan and Security Agreement are true and accurate in all material respects and
do not contain any untrue statement, or fail to contain any statement of a
material fact necessary to make the statements contained herein or therein not
materially misleading. There is no fact known to the Borrower that Borrower has
not disclosed in writing which could materially and adversely affect the
financial condition or operations of Borrower.
(i) Security Interest. The security interest granted to Lender hereunder is
a valid, first priority security interest in the Collateral and has been, or
promptly after the execution of the Supplemental Security Agreement describing
the Collateral and, to the extent necessary, the filing of UCC financing
statements in all appropriate jurisdictions, will be, perfected in accordance
with the requirements of all states in which any item of the Collateral is
located.
(j) Personal Property. Under the laws of the state(s) in which the
Collateral is to be located, the Collateral is deemed to consist solely of
personal property.
(k) Pollution and Environmental Control. Borrower has obtained all permits,
licenses and other authorizations which are required under, and is in material
compliance with, all federal, state, and local laws and regulations relating to
pollution, reclamation, or protection of the environment, including laws
relating to emissions, discharges, releases or threatened releases of
pollutants, contaminants, or hazardous or toxic materials or wastes into air,
water, or land, or otherwise relating to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport, or handling of
pollutants, contaminants or hazardous or toxic materials or wastes, except as
set forth on Schedule 5(k) hereto and except with respect to violations which
could not have a material adverse effect on the financial condition or
operations of Borrower. Borrower shall maintain all such permits, licenses, and
authorizations current.
6. COVENANTS. Borrower hereby agrees and covenants as follows:
(a) Payment. Borrower shall pay the indebtedness secured hereby as provided
herein and in the Interim Notes and Term Notes.
(b) Location of Collateral. Borrower will keep the Collateral located at
the location or locations stated on the Supplemental Security Agreements,
provided, however, that Borrower may change the location of the Collateral with
Lender's prior written consent, which consent shall not be unreasonably
withheld.
(c) No Liens. Except for the security interest granted hereby or under any
other agreement under which Lender is the secured party, whether as mortgagee,
beneficiary or otherwise, Borrower shall keep the Collateral free and clear of
any security interest, lien or encumbrance of any kind and Borrower shall not
sell, assign (by operation of law or otherwise) exchange or otherwise dispose of
any of the Collateral.
(d) Insurance. Borrower shall procure and continuously maintain and pay for
(a) all risk physical damage and property insurance covering loss or damage to
the equipment for not less than the full replacement value thereof naming Lender
as loss payee and (b) bodily injury and property damage combined single limit
liability insurance, all in such amounts and against such risks and hazards as
are reasonably
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required by Lender, with insurance companies and pursuant to contracts or
policies and with deductibles satisfactory to Lender. All contracts and policies
shall include provisions for the protection of Lender notwithstanding any act or
neglect of or breach or default by Borrower, shall provide for payment of
insurance proceeds to Lender, shall provide that they may not be modified,
terminated or canceled unless Lender is given at least thirty (30) days' advance
written notice thereof, and shall provide that the coverage is "primary
coverage" for the protection of Borrower or Lender notwithstanding any other
coverage carried by Lender protecting against similar risks. Borrower shall
promptly notify any appropriate insurer and Lender of each and every occurrence,
which may become the basis of a claim or cause of action against the insured and
provide Lender with all data pertinent to such occurrence. Borrower shall
furnish Lender with certificates of such insurance or copies of policies upon
request and shall furnish Lender with renewal certificates not less than thirty
(30) days prior to the renewal date. Proceeds of all insurance are payable first
to Lender to the extent of its interest.
(e) Financing Statements. At the request of Lender, Borrower will join
Lender in executing one or more financing statements pursuant to the Uniform
Commercial Code and other documents deemed commercially reasonably necessary by
Lender under applicable law to record or perfect its security interest in the
Collateral, including continuation statements, in form commercially reasonably
satisfactory to Lender and will pay the cost of filing the same in all public
offices wherever filing is deemed by Lender to be commercially reasonably
necessary or desirable. Borrower hereby authorizes Lender, in such jurisdictions
where such action is authorized by law, to effect any such recordation or filing
of financing statements or other documents without Borrower's signature thereto.
(f) Change of Name or Address. Borrower will promptly notify Lender in
writing of any change in its place of business or the adoption or change of any
tradename or fictitious business name, and will upon the commercially reasonable
request of Lender, execute any additional financing statements or other similar
documents necessary to perfect or maintain its security interest.
(g) Use of Equipment, Maintenance. Borrower will cause the Equipment to be
used in a careful and proper manner, will comply with and conform to all
governmental laws, rules and regulations relating thereto, and will cause the
Equipment to be operated in accordance with the manufacturer's or supplier's
instructions or manuals and only by competent and duly qualified personnel.
Borrower will cause the Equipment to be kept and maintained in good repair,
condition and working order and will furnish all parts, replacements,
mechanisms, devices and servicing required therefor so that the value, condition
and operating efficiency thereof will at all times be maintained and preserved,
normal wear and tear excepted. All such repairs, parts, mechanisms, devices and
replacements shall immediately, without further act, become part of the
Equipment and subject to the security interest created by this Loan and Security
Agreement. Borrower will not make any improvement, change, addition or
alteration to the Equipment if such improvement, change, addition or alteration
will impair the originally intended function or use of the Equipment or impair
the value of the Equipment as it existed immediately prior to such improvement,
change, addition or alteration. Any part added to the Equipment in connection
with any improvement, change, addition or alteration shall immediately, without
further act, become part of the Equipment and subject to the security interest
created by this Loan and Security Agreement.
(h) Inspection. Lender may inspect the Equipment and may, upon reasonable
prior notice and at any reasonable time or times inspect the books and records
of Borrower with respect to the Equipment and this Agreement, but not more often
than once during each quarter.
(i) Taxes. Borrower shall promptly pay, when due, all charges, fees,
assessments and taxes (excluding all taxes measured by Lender's income) which
may now or hereafter be imposed upon the ownership, leasing, possession, sale or
use of the Collateral.
(j) Performance by Lender. If Borrower fails to perform any agreement or
obligation contained herein, and such failure is not cured within the lesser of
twenty (20) days or any cure period specified for such failure, Lender may
itself perform, or cause the performance of such agreement or obligation and
shall give Borrower written notice of such action. Borrower will pay, or
reimburse Lender, on demand, for any and all fees, including attorneys' fees,
costs and expenses of whatever kind or nature incurred by Lender in connection
with (i) the creation, preservation and protection of Lender's security interest
in the Collateral, including, without limitation, all fees and taxes in
connection with the recording or filing of instruments and documents in public
offices, (ii) payments or discharge of any taxes or liens upon or in respect of
the Collateral, (iii) premiums for insurance with respect to the Equipment and
(iv) this Loan and Security Agreement and with protecting, maintaining or
preserving the Collateral and Lender's interests therein, whether through
judicial proceedings or otherwise, or in connection with defending or
prosecuting any actions, suits or proceedings arising out of or related to the
Loan and Security Agreement and the Loan Documents or in connection with any
debt restructuring, loan workout negotiations or bankruptcy or insolvency case
or proceedings. All such amounts shall constitute obligations of Borrower
secured by the Collateral. In the event that Borrower fails to perform any of
its agreements contained herein, Borrower will, on demand, reimburse Lender for
all such expenditures, together with interest thereon from the date of such
expenditure until fully reimbursed at the rate of two percent (2%) per month on
the outstanding balance of such expenditures or the highest rate permitted by
law, whichever is less.
(k) Power of Attorney. Upon the occurrence and during the continuance of an
Event of Default or any event subject to subsection (j) above, Borrower hereby
irrevocably appoints Lender Borrower's attorney-in-fact, with full authority in
the place and stead of Borrower and in the name of Borrower or otherwise, from
time to time in the Lender's discretion, to take any action and to execute any
instrument which Lender may deem commercially reasonably necessary or advisable
to accomplish the purposes of this Loan and Security Agreement, including,
without limitation: (i) to obtain, compromise and adjust insurance required to
be paid to Lender; (ii) to ask, demand, collect, xxx for, recover, receive, and
give acquittance and receipts for moneys due and to become due under or in
respect of any of the Collateral; (iii) to receive, endorse, and collect any
drafts or other instruments, documents, and chattel paper in connection with
clause (i) or (ii) above; and (iv) to file any claims or take any action or
institute any proceedings which Lender may deem necessary or desirable for the
collection of any of the Collateral or otherwise to enforce the rights of Lender
with respect to any of the Collateral.
(l) No Duties. The powers conferred on Lender hereunder are solely to
protect its interest in the Collateral and shall not impose any duty upon it to
exercise any such powers. Except for the safe custody of any Collateral in its
possession and the accounting for moneys actually received by it hereunder,
Lender shall have no duty as to any Collateral or as to the taking of any
necessary steps to preserve rights against prior parties or any other rights
pertaining to any Collateral.
(m) Financial Data. Borrower will furnish to Lender and will cause any
guarantor of Borrower's obligations to furnish to Lender on request (i) annual
balance sheet and profit and loss statements prepared in accordance with
generally accepted accounting principles and practices consistently applied and,
if Lender so requires, accompanied by the annual audit report of an independent
certified public accountant reasonably acceptable to Lender, and (ii) all other
financial information and reports that Lender may from time to time reasonably
request, including, if Lender so requires, income tax returns of Borrower and
any guarantor of Borrower's obligations hereunder.
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7. Conditions of Borrowing. Lender shall not be obligated to make any loan
hereunder unless:
(a) The Interim Notes or Term Notes evidencing such loan shall have been
duly executed and delivered to Lender;
(b) Borrower shall have executed and delivered to Lender the Supplemental
Security Agreement describing the Collateral and stating, except with respect to
progress payment fundings, the location thereof;
(c) Except with respect to progress payment fundings, Lender shall have
received evidence (as described in Section 6d hereof) that insurance has been
obtained in accordance with the provisions of this Loan and Security Agreement;
(d) Lender shall have received any and all third party consents, waivers or
releases deemed necessary or desirable by it in connection with the loan and the
Collateral being financed, including, without limitation, Uniform Commercial
Code lien releases and the consent and waiver, in form and substance
satisfactory to Lender, of each and every realty owner, landlord and mortgagee
holding an interest in or encumbrance on the real property where any of the
Collateral is to be located;
(e) All filings, recordings and other actions deemed necessary or desirable
by Lender in order to establish, protect, preserve and perfect its security
interest in the Collateral being financed by such loan as a valid perfected
first priority security interest shall have been duly effected, including,
without limitation, the filing of financing statements and the recordation of
landlord (owners) and/or mortgagee waivers or disclaimers, all in form and
substance satisfactory to Lender, and all fees, taxes and other charges relating
to such filings and recordings shall have been paid by Borrower;
(f) The representations and warranties contained in this Loan and Security
Agreement shall be true and correct in all respects on and as of the date of the
making of any loan hereunder with the same effect as if made on and as of such
date;
(g) In the sole judgment of Lender, there shall have been no material
adverse change in the financial condition, business or operations of Borrower
from the earliest date of any financial statement, credit report, business
report or similar document submitted to Lender for its review;
(h) All Loan Documents shall be satisfactory to Lender's attorneys; and
(i) Lender shall have received, in form and substance satisfactory to
Lender, such other documents as Lender shall require including, but not limited
to, a Request, proof of payment, vendor invoices and certificates of authority
and incumbency.
8. DEFAULT. The occurrence of any of the following events, following the
giving of any required notice and/or the expiration of any applicable period of
grace, shall constitute an event of default ("Event of Default") hereunder:
(a) Borrower's default in payment of any installment of the principal of or
interest on any Interim Note or Term Note when and after the same shall become
due and payable, whether at the due date thereof or by acceleration or
otherwise, which default shall continue unremedied for ten (10) days; or
(b) The failure by Borrower to make payment of any other amount payable
hereunder or under any Interim Note or Term Note, and the continuance of such
failure for more than ten (10) days after written notice thereof by Lender to
Borrower; or
(c) The failure by Borrower to perform or observe any covenant, condition,
obligation or agreement to be performed or observed by it hereunder, which
failure shall continue unremedied for thirty (30) days after written notice
thereof by Lender to Borrower; or
(d) The occurrence of a default described in Section 4 hereof; or
(e) Any warranty, representation or statement made or furnished with
respect to the Borrower or the Collateral to Lender by or on behalf of Borrower,
in connection with this Loan and Security Agreement, or the indebtedness secured
hereby, shall prove to have been false in any adverse, material respect when
made or furnished; or
(f) Borrower shall become insolvent or bankrupt or make an assignment for
the benefit of creditors or consent to the appointment of a trustee or receiver;
or a trustee or a receiver shall be appointed for Borrower or for a substantial
part of its property without its consent and shall not be dismissed for a period
of ninety (90) days; or bankruptcy, reorganization, liquidation, insolvency or
dissolution proceedings shall be instituted by or against Borrower and, if
instituted against Borrower, shall be consented to or be pending and not
dismissed for a period of ninety (90) days; or any execution or writ of process
shall be issued under any action or proceeding against Borrower in such capacity
whereby any of the Collateral may be taken or restrained; Borrower shall cease
doing business as a going concern; or, without the prior written consent of
Lender, Borrower shall sell, transfer or dispose of all or substantially all of
its assets or property; or
(g) The liquidation, merger, consolidation, reorganization, conversion to
an "S" status or dissolution, if Borrower is a corporation or partnership, of
Borrower, if it is reasonably likely that such act shall materially and
adversely affect Borrower's ability to perform under any of the Loan Documents;
or
(h) Any item of Collateral is seized or levied on under legal or
governmental process or for any reason Lender deems itself insecure. Lender
shall be entitled to deem itself insecure when some event occurs or fails to
occur or some objective condition exists which significantly impairs the
prospects that any of Borrower's obligations to Lender will be paid when due,
which significantly impairs the value of the Collateral to Lender or which
materially and adversely affects the financial or business condition of
Borrower.
The occurrence of an Event of Default shall terminate any commitment or
obligation by Lender to make any of the loans contemplated by this Loan and
Security Agreement.
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9. REMEDIES UPON DEFAULT. Upon the occurrence of an Event of Default
hereunder, Lender may, at its option, do any one or more of the following:
(a) Declare all obligations of Borrower to Lender to be immediately due and
payable, whereupon all unpaid principal of and interest on said indebtedness and
other amounts declared due and payable shall be and become immediately due and
payable;
(b) Take possession of all or any of the Collateral and exclude therefrom
Borrower and all others claiming under Borrower, and thereafter hold, store,
use, operate, manage, maintain and control, make repairs, replacements,
alterations, additions and improvements to and exercise all rights and powers of
Borrower in respect to the Collateral or any part thereof. In the event Lender
demands, or attempts to take possession of the Collateral in the exercise of any
rights under this Loan and Security Agreement, Borrower promises and agrees to
promptly turn over and deliver complete possession thereof to Lender;
(c) Require Borrower to assemble the Collateral, or any portion thereof, at
a place designated by Lender and reasonably convenient to both parties, and
promptly to deliver such Collateral to Lender, or an agent or representative
designated by it;
(d) Sell, lease or otherwise dispose of the Collateral at public or private
sale, without having the Collateral at the place of sale, and upon terms and in
such manner as Lender may determine (and Lender may be a purchaser at any sale);
and
(e) Exercise any remedies of a secured party under the Uniform Commercial
Code as adopted in the state where the Collateral is located or any other
applicable law.
Except as to portions of the Collateral which are perishable or
threaten to decline speedily in value or are of a type customarily sold on a
recognized market, Lender shall give Borrower at least fifteen (15) days' prior
written notice of the time and place of any public or private sale of the
Collateral or other intended disposition thereof to be made. Such notice may be
mailed to Borrower at the address set forth in the first paragraph of this Loan
and Security Agreement. Borrower hereby specifically agrees (to the extent that
applicable law and public policy allows it to effectively do so) that any public
or private sale held in accordance with the terms of this Loan and Security
Agreement shall, for the purpose of the Uniform Commercial Code as adopted in
the state where the Collateral is located and for all other purposes, be deemed
to have been conducted in a commercially reasonable manner and in good faith.
The proceeds of any sale under Section 9(d) shall be applied as
follows:
(i) To the repayment of the costs and expenses of retaking, holding and
preparing for the sale and the selling of the Collateral (including legal
expenses and attorneys' fees) and the discharge of all assessments,
encumbrances, charges or liens, if any, on the Collateral prior to the lien
hereof (except any taxes, assessments, encumbrances, charges or liens subject to
which such sale shall have been made);
(ii) To the payment of the whole amount then due and unpaid of the
indebtedness of Borrower to Lender; and
(iii) The surplus, if any, shall be paid to the Borrower or to
whomsoever may be lawfully entitled to receive the same.
Lender shall have the right to enforce one or more remedies hereunder,
successively or concurrently, and such action shall not operate to stop or
prevent Lender from pursuing any further remedy which it may have, and any
repossession or retaking or sale of the Collateral pursuant to the terms hereof
shall not operate to release Borrower until full payment of any deficiency has
been made in cash.
10. LIMITATION ON INTEREST. It is the intent of the parties to this Loan
and Security Agreement to contract in strict compliance with applicable usury
laws from time to time in effect. In furtherance thereof, the parties stipulate
and agree that none of the terms and provisions contained in the Loan Documents
shall ever be construed to create a contract to pay for the use, forbearance or
detention of money at a rate in excess of the maximum interest rate permitted to
be charged by applicable law from time to time in effect.
11. PERSONAL PROPERTY/TAGS. No item of Equipment will be attached or
affixed to realty or any building without Lender's prior knowledge and written
consent and waiver of the landlord and the mortgagee, if any, of the real
property. If so requested by Lender, Borrower will affix tags supplied by
Lender, reflecting Lender's security interest in the Equipment.
12. LOSS AND DAMAGE. Borrower shall bear the risk of damage, loss, theft,
or destruction, partial or complete of the Equipment, whether or not such loss
or damage is covered by insurance, except that while Borrower is not in default,
Lender agrees to apply toward payment of obligations of Borrower insurance
proceeds payable to Lender by reason of such damage, loss, theft, or
destruction. In the event of any damage, loss, theft, or destruction, partial or
complete, of any item of Equipment, Borrower shall promptly notify Lender in
writing and at the option of Lender (a) repair or restore the Equipment to good
condition and working order, or (b) replace the Equipment with similar equipment
in good repair, condition and working order, or (c) pay Lender, in cash, an
amount equal to the unamortized equipment cost for the item or if the Equipment
was not purchased with the loan proceeds, the pro rata portion of the
outstanding principal balance due under the Interim Note or Term Note, as the
case may be, and all other amounts relating to that item of Equipment then due
and owing hereunder, and upon payment of that amount, Lender's lien shall be
terminated with respect to that item of Equipment only, and Lender will release
its interest in that item of Equipment.
13. ASSIGNMENT. Borrower may not assign or transfer any rights under this
Loan and Security Agreement or to the Collateral without Lender's prior written
consent, which consent shall not be unreasonably withheld.
14. INDEMNIFICATION. Borrower shall indemnify and hold harmless Lender from
and against any and all claims, losses, liabilities, causes of action, costs and
expenses (including the fees of Lender's attorneys) ("Claims") in any way
relating to or arising out of this Loan and Security Agreement, the other Loan
Documents or the Collateral, except for any Claims resulting solely and directly
from Lender's gross negligence or willful misconduct.
15. NOTICES. Whenever Borrower or Lender shall desire to give or serve any
notice, demand, request or other communication with respect to this Loan and
Security Agreement, each such notice, demand, request or communication shall be
in writing and shall be effective
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only if the same is physically delivered or is by certified mail, postage
prepaid, return receipt requested, or by overnight courier, postage prepaid,
mailed to the parties at the addresses set forth in the first paragraph of this
Loan and Security Agreement, with a copy to Lender's Vice President of Credit.
Any party hereto may change its address for such notices by delivering or
mailing to the other parties hereto, as aforesaid, a notice of such change.
16. NO WAIVER BY LENDER. By exercising or failing to exercise any of its
rights, options or elections hereunder, Lender shall not be deemed to have
waived any breach or default on the part of Borrower or to have released
Borrower from any of the obligations secured hereby, unless such waiver or
release is in writing and is signed by Lender. In addition, the waiver by Lender
of any breach hereof for default in payment of an indebtedness secured hereby
shall not be deemed to constitute a waiver of any succeeding breach or default.
17. FURTHER AGREEMENTS. From time to time, Borrower will execute such
further instruments as Lender may reasonably require, in order to protect,
preserve, and maintain the security interest granted hereby.
18. BINDING UPON SUCCESSORS. All agreements, covenants, conditions and
provisions of this Loan and Security Agreement shall apply to and bind the
successors and assigns of all parties hereto.
19. GOVERNING LAWS. This Loan and Security Agreement shall be governed by
the laws of the State of California.
20. AMENDMENT. This Loan and Security Agreement can be modified or
rescinded only by a writing expressly referring to this Loan and Security
Agreement, signed by both of the parties hereto.
21. INVALIDITY OF PROVISIONS. Every provision of this Loan and Security
Agreement is intended to be severable. In the event that any term or provision
hereof is declared by a court to be illegal or invalid for any reason
whatsoever, such illegality or invalidity shall not affect the balance of the
terms and provisions hereof, which terms and provisions shall remain binding and
enforceable, then to the extent possible all of the other provisions shall
nonetheless remain in full force and effect.
IN WITNESS WHEREOF, Borrower and Lender have duly executed this Loan and
Security Agreement the day and year first above written.
Lender: General Electric Capital Business Asset
Funding Corporation
-----------------------------------------
By: /s/ Xxxxxxxx X. Xxxxxxx
-----------------------------------------
(Print Name): Xxxxxxxx X. Xxxxxxx
-----------------------------------------
Title: Vice President
-----------------------------------------
Borrower:
Aurora Biosciences Corporation
----------------------------------------
By: /s/ Xxxx Xxxxxxxxxx
----------------------------------------
(Print Name): Xxxx Xxxxxxxxxx
----------------------------------------
Title: Director of Finance and Treasurer
----------------------------------------
Social Security
Number:
(if Borrower is ----------------------------------------
an individual)
FEIN: 00-0000000
----------------------------------------
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