EXHIBIT 10.06
MASTER
LOAN AND SECURITY AGREEMENT
MASTER LOAN AND SECURITY AGREEMENT dated as of November 3, 1997 (the
"Master Agreement") between CENTAUR PHARMACEUTICALS, INC. a Delaware
corporation with its executive office and principal place of business at 000
Xxxxxxx Xxxxxxx Xxxxxxxxx, Xxxxxxxxxx 00000 (the "Borrower"), and FINOVA
TECHNOLOGY FINANCE, INC., a Delaware corporation with its executive office and
principal place of business at 00 Xxxxxxxxx Xxxxx, Xxxxxxxxxx, Xxxxxxxxxxx
00000-0000 ("Lender").
1. Loans by Lender to Borrower. Lender shall from time to time make loans
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to the Borrower (each a "Loan") in an aggregate total amount not to exceed Ten
Million Dollars ($10,000,000). Each Loan to be evidenced by a Promissory Note
(each a "Note") and to be on the terms set forth herein and in that certain
Commitment Letter to Borrower from Lender dated October 7, 1997 which was
revised on December 23, 1997 and amended on April 20, 1998 (the "Commitment
Letter"), and subject to the conditions in the Note and the related Loan and
Security Agreement between Borrower and Lender (each a "Loan and Security
Agreement"), and secured by a security interest in the equipment and other
assets of Borrower described as "Collateral" in this Agreement or any of the
Loan and Security Agreements. The terms of each such Loan and Security
Agreement shall incorporate the terms and provisions of this Master Agreement
with such modifications, if any, as therein set forth. Only the signed copy of
each Loan and Security Agreement and not this Master Agreement shall constitute
chattel paper the possession of which can perfect a security interest. In the
event of a conflict between the provisions of this Master Agreement and the
provisions of any Loan and Security Agreement, the Loan and Security Agreement
shall prevail.
2. Release of Collateral. When payment in full has been made on any Note,
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the Collateral described in the related Loan and Security Agreement shall be
released from the security interest created by the Loan and Security Agreements
provided that no Event of Default shall have occurred under this Master
Agreement and not be cured and provided, further, that if any event that with
either or both the passage of time or giving of notice would be an Event of
Default shall exist, such release shall be made if and when such event has been
cured and no Event of Default has occurred and not been cured. Borrower shall
not have the right to prepay any Note except as described in the Promissory
Note.
3. Disclaimer of Warranties. BORROWER ACKNOWLEDGES THAT IT HAS SELECTED
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ALL GOODS, CONTRACT RIGHTS AND GENERAL INTANGIBLES (SUCH AS LICENSES) INCLUDED
IN THE COLLATERAL (THE "EQUIPMENT") AND EVERY MANUFACTURER AND OTHER VENDOR OF
THE EQUIPMENT, AND THAT BORROWER HAS NOT RELIED UPON LENDER FOR SUCH SELECTION.
LENDER HAS NOT MADE AND SHALL NOT BE DEEMED TO HAVE MADE ANY REPRESENTATION OR
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WARRANTY, EXPRESS OR IMPLIED, AS TO THE MERCHANTABILITY, FITNESS FOR USE,
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FITNESS FOR A PARTICULAR PURPOSE OR TITLE OF THE EQUIPMENT (OR ANY PART THEREOF)
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OR AS TO COMPLIANCE WITH SPECIFICATIONS, COMPLIANCE WITH GOVERNMENTAL
REGULATIONS, QUALITY, SELECTION, INSTALLATION, SUITABILITY, PERFORMANCE,
CONDITION, DESIGN, ABSENCE OF DEFECTS, OPERATION, OR NON-INFRINGEMENT OF PATENT,
COPYRIGHT, TRADEMARK OR OTHER INTELLECTUAL PROPERTY RIGHTS OF THE EQUIPMENT (OR
ANY PART THEREOF). BORROWER HEREBY DISCLAIMS ANY AND ALL SUCH WARRANTIES OR
REPRESENTATIONS, EXPRESS
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OR IMPLIED. BORROWER AND LENDER AGREE THAT ALL RISKS INCIDENT TO THE MATTERS
REFERRED TO IN THIS SECTION ARE TO BE BORNE BY BORROWER. Lender has and shall
have no responsibility for the installation, adjustment or servicing of the
Equipment. The provisions of this Section have been negotiated and are intended
to be a complete exclusion and negation of any representations or warranties by
Lender, express or implied, with respect to the Equipment that may arise
pursuant to any law now or hereafter in effect, or otherwise. In no event shall
defect in, or unfitness of, any or all of the Equipment, or any breach of
warranty or representation by any or every Manufacturer or other Vendor relieve
Borrower of the obligation to pay any Loan or to make any other payments
required hereunder or to perform any other obligation hereunder. Without
limiting the generality of the foregoing, Lender shall not be responsible or
liable for any (i) defect, either latent or patent, in any of the Equipment or
for any direct or consequential damages therefrom, (ii) loss of use of any of
the Equipment or for any loss of profits or any interruption in Borrower's
business occasioned by Borrower's inability to use any or all of the Equipment
for any reason whatsoever, or (iii) in the event that any Vendor delays or fails
to make delivery of any or all of the Equipment or fails to fulfill or comply
with any purchase contract or order.
4. Borrower's Representations and Warranties. Borrower represents and
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warrants (and if requested by Lender, promptly will provide supporting documents
to the effect and an initial, one time only opinion of counsel substantially in
the form requested by Lender) that as of the date that Borrower signs this
Master Agreement and as of the date of each subsequent Loan and Security
Agreement and the date of each advance of funds by Lender for a Loan: (i) all
items of the Equipment either are new and unused or have been used only by
Borrower for not more than six months, except as otherwise specified in a Loan
and Security Agreement; (ii) Borrower is duly organized, validly existing and in
good standing under the laws of the jurisdiction of its organization, and is
qualified and in good standing to do business wherever necessary to carry on its
present business and operations, including the jurisdictions where the Equipment
is located; (iii) Borrower has the power to enter into this Agreement and the
other instruments and documents executed by Borrower in connection herewith
(together with this Agreement, the "Transactional Documents") and to pay and
perform its obligations under this Agreement and the other Transactional
Documents; (iv) this Agreement and the other Transactional Documents have been
duly authorized, executed and delivered by Borrower, and constitute the valid,
legal and binding obligations of Borrower enforceable in accordance with their
terms; (v) no vote or consent of, or notice to, the holders of any class of
stock of Borrower is required, or if required, such vote or consent has been
obtained or given, to authorize the execution, delivery and performance of this
Agreement and the other Transactional Documents by Borrower; (vi) neither the
execution and delivery by Borrower of this Agreement or the other Transactional
Documents, nor the consummation by Borrower of the transactions contemplated
hereby or thereby, nor compliance by Borrower with the provisions hereof or
thereof, conflicts with or results in a breach of any of the provisions of any
Certificate of Incorporation or By-laws or partnership or trust agreement or
certificate of Borrower, or of any applicable law, judgment, order, writ,
injunction, decree, award, rule or regulation of any court, administrative
agency or other governmental authority, or of any indenture, mortgage, deed of
trust, other agreement or instrument of any nature to which Borrower is a party
or by which it or its property is bound or affected or pursuant to which it is
constituted, or constitutes a default under any thereof or will result in the
creation of any lien, charge, security interest or other encumbrance upon any of
the Collateral, other than the interests therein of Lender or any Assignee (as
hereinafter defined), or upon any other right or property of Borrower or will in
any manner adversely affect Lender's or any Assignee's security interest in any
of the Equipment; (vii) no consent, approval, withholding of objection or other
authorization of or by any court, administrative agency, other
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governmental authority or any other Person is required, except such consents,
approvals or other authorizations which have been duly obtained and are in full
force and effect and copies of which have been furnished Lender, in connection
with the execution, delivery or performance by Borrower, or the consummation by
Borrower, of the transactions contemplated by this Agreement and the other
Transactional Documents; (viii) there are no actions, suits or proceedings
pending, or, to the knowledge of Borrower, threatened, in any court or before
any administrative agency or other governmental authority against or affecting
Borrower, which, if adversely decided would or could, individually or in the
aggregate, materially and adversely affect the financial or other condition,
business, operations, properties, assets or prospects of Borrower or the ability
of Borrower to perform any of its obligations under this Agreement or under the
other Transactional Documents, except for any such actions, suits or proceedings
that Borrower has described in writing to Lender; (ix) no Event of Default or
event or condition which upon the passage of time, the giving of notice, or
both, would constitute an Event of Default, exists or is continuing; (x) there
has been no material adverse change or threatened change in Borrower's,
financial or other condition, business, operations, properties, assets or
prospects since the date of Borrower's, most recent financial statements
reported on by an independent public accounting firm prior to the date of this
Agreement, since the dates of each such Person's interim and annual financial
statements, if any, subsequent to such prior statements, or from the written
information that has been supplied to Lender by Borrower, (xi) Borrower
possesses any and all authorizations, certifications and licenses which are or
may be required to use and operate the Equipment; (xii) the actual Acquisition
Cost paid by Borrower for each item of the Equipment is set forth on a Schedule
A attached to a Loan and Security Agreement and does not exceed the fair and
usual price for like quantity purchases of such item and reflects all discounts,
rebates and allowances for the Equipment given to Borrower, or any affiliate of
Borrower or by any vendor or other Person including, without limitation,
discounts for advertising, prompt payment, testing or other services; (xiii) all
information supplied to Lender by Borrower is correct and does not omit any
statement necessary to make the information supplied not misleading; (xiv) the
financial statements of Borrower have been prepared in accordance with
generally accepted accounting principles consistently applied and accurately and
completely present the financial condition and the results of operations of
Borrower at the dates of and for the periods covered by such statements; (xv)
Borrower has delivered to Lender a copy of each invoice and xxxx of sale to
Borrower for its purchase of the Equipment, and a copy of each canceled check
pursuant to which Borrower paid for the Equipment; (xvi) Borrower has paid the
purchase price for all of the Equipment except as otherwise specified by
Borrower in Exhibit A to the applicable Loan and Security Agreement; (xvii) no
security interest or lien exists on any of the Collateral (other than of Lender)
except for statutory liens that do not materially affect the value of the
collateral and the Borrower's use thereof; (xviii) no security interest or lien
on any of the Collateral has been previously granted by Borrower or has been
effective against the Equipment when owned by Borrower that has been, or will
be, released prior to the making of any Loan pursuant to the applicable Loan and
Security Agreement, except as described in Exhibit A to such Loan and Security
Agreement; and (xix) except for the security interest granted to Lender,
Borrower is the owner of, and has clear title to, the Collateral.
5. Identification Marks. To the extent requested by Lender or if
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required by applicable law, Borrower shall affix to the Equipment at Borrower's
expense signs, labels, or other forms of notice to disclose Lender's and any
Assignee's security interest in the Equipment. Borrower shall keep and maintain
such signs, labels or other forms of notice affixed to the Equipment. Lender
may furnish such signs, labels or other forms of notice to Borrower. Except as
otherwise directed by Lender, Borrower shall not allow the name of any person
other than Lender or manufacturer to be placed on any part of the
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Equipment as a designation that might reasonably be interpreted as a claim of
rights therein.
6. Fees and Taxes. Borrower agrees to pay promptly when due, and to
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indemnify and hold Lender harmless from, all license, title, registration and
recording fees whatsoever, all taxes including, without limitation, sales, use,
franchise, personal property, excise, import, export and stamp taxes and customs
duties, and all charges together with any penalties, fines or interest thereon
which are assessed, levied or imposed by any governmental or taxing authority
with respect to any or all of the Collateral or the purchase, acquisition,
ownership, construction, installation, shipment, delivery, possession, use,
maintenance, condition, operation, control, return or other disposition thereof.
If it shall be determined that any Federal, state or local tax is payable in
respect of the issuance of any Note or the making of any Loan, or in connection
with the filing or recording of any financing statements or other documents
(whether measured by the amount of Loans secured or otherwise) contemplated by
this Master Agreement, then the Borrower will pay any such tax and all interest
and penalties, if any, and will indemnify the Lender against and save it
harmless from any loss or damage resulting from or arising out of the nonpayment
or delay in payment of any such tax other than taxes related to Lenders income.
Notwithstanding any other provision contained in this Agreement, the covenants
and agreements of the Borrower in this Section shall survive payment of the
Obligations and the termination of this Master Agreement.
7. General Indemnity. (a) Borrower shall indemnify Lender and any
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Assignee, and their respective agents and servants, against, and agrees to
defend, protect, save and keep them harmless from, any and all liabilities,
obligations, losses, damages, penalties, claims, actions, suits, costs, expenses
and disbursements, including attorneys' fees and expenses and costs for customs,
completion, performance and appeal bonds, of whatsoever kind and nature
(including, without limitation, for negligence, tort liability, damages by
reason of strict or absolute liability, punitive damages, and third party
indirect and consequential damages, but excluding any such amounts imposed or
incurred as a result of Lender's gross negligence or willful misconduct),
imposed on or incurred by or assessed against Lender and/or any Assignee, in any
way relating to or arising out of (i) the failure of Borrower to provide or
obtain any certificates, documents, consents, authorizations, clearances,
licenses, permits or instruments required hereunder or under any of the other
Transactional Documents, or (ii) the ordering, construction, installation,
ownership, delivery, testing, possession, use, maintenance, operation, control,
movement, import, export, shipment or condition of the Equipment (including but
not limited to latent and other defects, whether or not discoverable by Lender
or Borrower, and any claim for patent, trademark, copyright, software or other
intellectual property infringement). The obligations of Borrower under this
Section shall survive the payment of the Obligations and the termination of this
Master Agreement.
8. Use of Equipment; Location; Liens. (a) Borrower warrants and agrees
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that the Equipment shall be used and operated and otherwise be in compliance
with any established operating procedures therefor of any Manufacturer and all
statutes, regulations and orders of any governmental body having power to
regulate the Equipment or its use. Borrower shall bear and pay all costs of
such compliance. Borrower shall not permit the Equipment to be used or
maintained in any manner or condition that would violate, or could result in the
termination of, the insurance policies carried by Borrower pursuant to the
provisions of this Master Agreement on insurance, or in any manner or condition
or for any purpose for which, in the opinion of any Manufacturer, the Equipment
is not designed or suited.
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(b) Borrower agrees that without Lender's prior written consent, it will
not remove any of the Equipment from the location specified in Schedule A to the
applicable Loan and Security Agreement for such Equipment or permit any of the
Equipment to be used by anyone other than Borrower, Borrower's employees or a
responsible independent contractor engaged by Borrower.
(c) Borrower shall not directly or indirectly create, incur, assume or
suffer to exist any mortgage, security interest, lien or encumbrance on any of
the Collateral or Lender's or any Assignee's security interest therein, except
in the name of Lender and its successor(s) and any Assignee except for statutory
liens that do not materially affect the value of the collateral and the
Borrowers use thereof. At its own expense, Borrower shall promptly take such
action as may be necessary to keep the Collateral free and clear of, and to duly
discharge, any such mortgage, security interest, lien or encumbrance not
excepted above except for statutory liens that do not materially affect the
value of the collateral and the Borrowers use thereof.
(d) Borrower agrees to procure and maintain in effect all licenses,
certificates, permits and other approvals and consents required by federal,
state and local laws and regulations in connection with Borrower's possession,
use, operation and maintenance of the Equipment.
(e) Borrower shall cooperate fully with Lender or any Assignee to perfect
and record their respective security interests in connection with the
Transactional Documents, and will pay Lender its reasonable costs related
thereto. Borrower authorizes Lender to file financing statements on the
Collateral that are signed only by Lender or that are signed for Borrower by
Lender in any jurisdiction when permitted by law or local authority upon 10 days
advance written notice to Borrower. Borrower hereby grants to Lender power-of-
attorney to act as Borrower's attorney-in-fact to sign Borrower's name on
financing statements as "Debtor" on the collateral upon 10 days advance written
notice to Borrower.
9. Maintenance and Repairs; Additions to Equipment. (a) Borrower shall
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maintain all of the Equipment in good, safe and efficient operating repair,
appearance and condition, will keep all components of the Equipment properly
calibrated and aligned, will make all required adjustments, replacements and
repairs (collectively, "maintenance and repairs"). Such maintenance and repairs
shall include, but not be limited to, all recommended or advised by a
Manufacturer, all required or advised by cognizant governmental agencies or
regulatory bodies and all commonly performed by prudent business and/or
professional practice. All maintenance and repairs to any item of the Equipment
shall be made by the Manufacturer or, those of substantially equal skill or
knowledge in maintaining and repairing the Equipment.
(b) Borrower shall not make any modification that would diminish value of
the Equipment without the prior written consent of Lender. Any replacements,
substitutions, additions, attachments, accessions, parts, fittings, accessories,
modifications, enhancements, maintenance and repairs and other upgrades to the
Equipment whenever made shall be considered accessions to the Equipment and
shall automatically become subject to the security interest of Lender.
(c) All instruction manuals, published statements of capabilities and
technical specifications, service, maintenance and repair records, installation,
qualification, certification and calibration reports, usage logs, and printed
material relating to the Equipment shall be deemed part of the Equipment.
Computer programs, programming codes, operating systems, data processing
instructions, series of instructions or statements
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which are machine readable, and any like symbols or signals usable by an
electronic data processing system (collectively "Software") that has been or
shall be installed or entered in the Equipment shall become a part of the
Equipment except for any Software that is proprietary Software of Borrower, that
contains trade secrets or confidential information of Borrower, or that is not
transferable, and is not a modification, change, enhancement or improvement to
any Software which is financed hereunder and identified or listed in the
description of specific items of the Equipment in or attached to Schedule A of a
Loan and Security Agreements provided, however that all operating system
Software necessary to operate the Equipment shall notwithstanding the aforesaid
be considered to be part of the Equipment. Whenever Borrower acquires Software
licenses related to the equipment from other parties that is financed hereunder
and listed on Exhibit A, with respect to the Software such licenses shall
automatically and without further action by Borrower be assigned to Lender and
become through assignment a part of the Equipment transferable to any future
user of the Equipment for use with the Equipment.
10. Loss, Damage or Destruction of Equipment. (a) No damage to, taking of
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or theft, loss or destruction of any Equipment shall impair any obligation of
Borrower to Lender, including, without limitation, the obligation to pay the
Loans.
(b) In the event that any item of Equipment shall become lost, stolen,
destroyed or damaged from any cause whatsoever, Borrower agrees to promptly
notify Lender in writing of such fact, fully informing Lender of the details
thereof. If any item of Equipment is damaged (unless the same is irreparably
damaged, in which case the provisions of this Master Agreement with respect to a
Casualty Occurrence shall apply), Borrower shall, at its sole cost and expense,
place the same in good repair, condition and working order or replace the same
with "like property" having the same value and operating capabilities and useful
life at least equal to the damaged Equipment prior to the date of such damage,
which property shall thereupon become subject to the security interest of
Lender. In the event that an item of Equipment has been damaged, but not
irreparably, if no Event of Default has occurred and is continuing hereunder,
upon receipt by Lender of evidence, reasonably satisfactory to Lender, that such
repair, restoration or replacement has been completed, and an invoice therefor,
Lender shall release to Borrower or its supplier the proceeds of any insurance
received by Lender as a result of such damage for the purpose of reimbursing
Borrower for the costs of repairing, restoring or replacing such item.
(c) In the event that any item of Equipment shall become lost, stolen,
destroyed or irreparably damaged from any cause whatsoever, or if any item of
Equipment or Borrower's title thereto shall be requisitioned or seized by any
governmental authority (each such occurrence being herein called a "Casualty
Occurrence"), Borrower shall promptly notify Lender in writing of such fact,
fully informing Lender of all details of the Casualty Occurrence in question,
and shall pay Lender in cash the outstanding principal balance and accrued
interest calculated as of the date of the Casualty Occurrence. In addition, a
Prepayment Premium shall be paid, which shall be calculated as if prepayment had
been made on the date of the Casualty Occurrence. If the Casualty Occurrence
affects less than all of the Equipment, Borrower shall only be required to pay
the Pro Rata Percentage of the outstanding principal balance, accrued interest
and Prepayment Premium. The "Pro Rata Percentage" is to be calculated by
dividing the original equipment cost of the affected Equipment by the original
equipment cost of all tangible Equipment financed hereunder (excluding all soft
costs), as set forth in the various Schedules. This payment shall be made
within 30 days following the Casualty Occurrence and shall be applied to the
Loan and Note made together with such Loan and Security Agreement.
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11. Reports; Inspections. Borrower will cause to be furnished to Lender,
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if requested, from time-to-time a statement showing the condition and such other
information regarding the Collateral as Lender may reasonably request. Lender
and any Assignee shall have the right, upon reasonable notice to Borrower, to
inspect the Equipment including Borrower's records with respect to the
Collateral, to copy such records, and to inspect and copy Borrower's records
with respect to the financial statements Borrower is required to furnish Lender
or has warranted to Lender pursuant to this Master Agreement. Any inspection by
Lender or any Assignee shall not be deemed to be approval or acknowledgment by
Lender or such Assignee of the safety, freedom from defects, performance or
compliance with specifications or governmental requirements of the Collateral or
of the conformity of the Collateral or such financial statements to the
requirements or warranties of this Master Agreement, and the disclaimers set
forth in the provisions of this Master Agreement on disclaimer of warranties
shall apply to any such inspection. Borrower shall pay or reimburse Lender for
Lender's costs and travel expenses for an inspection upon a material breach of
the requirements of this Master Agreement or the warranties of Borrower pursuant
to this Master Agreement.
12. Insurance. Borrower shall procure and maintain at its expense with
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insurers acceptable to Lender (i) insurance on all of the Equipment in an amount
not less than the greater of the Equipment's replacement cost insuring against
all risks of loss or damage to the Equipment and against such other risks as
Borrower would, in the prudent management of its properties, maintain with
respect to similar equipment owned by it, and (ii) comprehensive public
liability and property damage insurance, in such amounts as shall be
satisfactory to Lender but for not less than the greater of $1,000,000 or the
amounts customarily maintained by parties similar to Borrower for similar
equipment with similar contemplated use, insuring Lender and any Assignees, as
their interests may appear. On the policies referred to in clause (i), such
insurance shall name Lender (and any Assignees) as Lender's loss payable so that
(and Lender and Borrower hereby agree that) the insurance proceeds payable under
such policies will be payable and paid jointly to Lender (and to any Assignees)
and Borrower. On the policies referred to in clause (ii), such insurance will
name Lender (and any Assignees) as an additional insured as its interests may
appear. All such policies shall provide that they may not be invalidated
against Lender (or any Assignees) because of any violation of a condition or a
breach of warranty of the policies or application therefor by Borrower, that
they may not be altered or canceled except after 30 days' prior written notice
to Lender, and that Lender and any Assignee have the right but not the
obligation to pay the premiums with respect to coverage required by this Master
Agreement in order to continue such insurance in effect or to obtain like
coverage. Under the policies of insurance required to be maintained by Borrower
pursuant to this Master Agreement, Borrower agrees to waive any right of
subrogation and to cause the insurance carrier to waive any right of subrogation
in each instance as such right may exist against Lender or any Assignee and for
any and all loss or damage to the Equipment. Borrower shall deliver to Lender,
prior to the grant of a security interest to Lender in any item of the Equipment
and at such other time or times as Lender may request, a certificate or other
evidence satisfactory to Lender of the maintenance of such insurance. Lender
shall be under no duty to examine such policies, certificates or other evidence
of insurance or to advise Borrower in the event that its insurance is not in
compliance with this Master Agreement. Should Borrower fail to provide such
insurance coverage, Lender may obtain coverage protecting interests of Lender
and Borrower, or the interest of Lender only, for so long as all of the
Obligations have not been satisfied or discharged or such longer period as is
required by this Master Agreement or by the insurance company issuing such
coverage. The proceeds of such insurance shall be applied, at the option of
Borrower if no Event of Default shall exist, and otherwise at Lender's option,
toward (i) replacement, restoration or repair of the Equipment or (ii) payment
of the liabilities of Borrower pursuant to the Obligations.
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13. Equipment To Be and Remain Personal Property. All of the Equipment
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shall be and remain personal property notwithstanding the manner in which the
Equipment may be attached or affixed to realty. In the exercise of its rights,
Lender shall not be liable for any damage to the realty or any such building or
other real or personal property occasioned by any removal of the Equipment by
Lender or the agents of Lender. Borrower further covenants and agrees that
Borrower will, at the request of Lender, obtain and deliver to Lender a waiver,
in recordable form, from the owner and any landlord, tenant or holder of any
lien or encumbrance on the realty or building(s) on or in which any of the
Equipment described in such Loan and Security Agreement shall be located, under
which such owner, landlord, tenant and holder (i) agree and consent that such
Equipment is and shall be personal property removable by Lender upon an Event of
Default under this Master Agreement, and (ii) waive any rights of distraint or
similar rights with respect to such Equipment.
b) Notwithstanding the foregoing provisions of this Section, without
Lender's prior written consent, Borrower shall not permit any of the Equipment
to be attached or affixed to, imbedded in or incorporated into any building,
structure, real estate or other personal or real property.
14. Other Covenants. (a) Borrower agrees to furnish, upon Lender's
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request, such financial, business and operational information concerning
Borrower , including copies of its tax returns, as Lender or its assigns may
reasonably request. Additionally, Borrower shall furnish to Lender and its
assigns without notice or demand therefor two complete copies of its (i)
quarterly interim financial statements within 45 days of the close of each of
the first three fiscal quarters of every year, certified by the chief financial
officer of Borrower and (ii) annual financial statements within 90 days of the
close of each fiscal year reported on by independent accountants without
material adverse qualification or comment. All such financial statements shall
be prepared in accordance with generally accepted accounting principles
consistently applied, and shall accurately and completely present Borrower's
financial condition and results of operations at the dates of and for the
periods covered by such statements.
(b) Borrower shall promptly furnish to Lender copies of (i) filings that
Borrower makes with the SEC or other government agencies under the securities
laws including but not limited to definitive proxy statements, registration
statements, prospectuses and tender offer filings, and reports on holdings or
acquisitions of securities, relating to proxy solicitations, and on Form 10-K,
10-Q, 8-K or similar forms, and any amendments to such filings, (ii) press
releases of Borrower , and (iii) new product (or service) announcements of
Borrower.
(c) Borrower shall give Lender notice of all meetings of the stockholders
or directors of Borrower copies of all materials that are furnished to the
stockholders or directors excluding highly confidential and or client privileged
matters for the meetings at the same time that the notice or materials are sent
to the stockholders or directors.
(d) There shall be no actual or threatened conflict with, or violation of,
any statute, regulation, standard or rule relating to Borrower, its present or
future operations, or the Equipment.
(e) All information supplied to Lender or its assigns by Borrower shall
be correct and shall not omit any statement necessary to make the information
supplied not be misleading. There shall be no material breach of the
representations and warranties made by Borrower in connection with this Master
Agreement.
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(f) Borrower shall give Lender notice of any change in the address of the
executive office or principal place of business of Borrower not less than 15
days prior to the change.
(g) No change in control of Borrower shall occur, without the written
consent of the Lender, which consent shall not be unreasonably withheld or
delayed. For the purpose of this Agreement a "change in control" shall mean a
transaction or series of related transactions (together, a "Transaction") as a
result of which (i) the Borrower's shareholders prior to the Transaction own
less than a majority of the voting securities of Borrower (or of its successor
in the case of a merger of consolidation) after the transaction or (ii) the
Borrower has transfered or otherwise disposed of all or a substantial portion of
its assets.
(h) Borrower shall not make any payment or distribution of money, checks,
securities or property to any Person in contravention of the provisions of any
Guaranty or subordination that such Person has made in favor of Lender or its
assigns of which Borrower shall have notice or knowledge.
15. Events of Default. If one or more of the following events
-----------------
(hereinafter called "Events of Default" or an "Event of Default") shall occur:
(i) default shall be made in any payment when due on any of the
obligations of principal, interest or other sums of any Loan or any Note or
other of the Obligations when due to Lender, and any such default shall continue
for more than ten (10) days after the due date thereof;
(ii) any representation or warranty by Borrower made in any of the
Obligations or in any other Transactional Document or certificate furnished to
Lender in connection with any Loan or any of the Transactional Documents or any
of the Obligations shall at the time made prove to be incorrect in any material
respect;
(iii) Borrower shall make or permit any unauthorized sublease or transfer
of any Equipment or the possession of any Equipment;
(iv) Borrower shall default in the observance and/or performance of any
other covenant, condition or agreement on the part of Borrower to be observed
and/or performed under any of the Transactional Documents or any of the
Obligations, which default is not governed by paragraphs (i), (ii) or (iii)
above, and such default shall continue for 30 days after written notice from
Lender to Borrower specifying the default and demanding the same to be remedied;
(v) Borrower shall make an assignment for the benefit of creditors, or
cease being in substantially the same line or lines of business in which it is
presently engaged, or generally fail to pay its debts as they become due, or
become insolvent or commence a voluntary case under the federal Bankruptcy Code
as now or hereafter constituted or any other applicable federal or state
bankruptcy, insolvency or similar law, or admit in writing its inability to pay
its debts as they mature, 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 Borrower's property without such party's' consent and such
appointment shall be not dismissed for a period of 60 days; there shall have
been entered a decree or order for relief by a court having jurisdiction in
respect of Borrower, or approving as properly filed a petition seeking a
reorganization, arrangement, adjustment or composition of or in respect of
Borrower in an involuntary proceeding or case under any applicable federal or
state bankruptcy, insolvency or other similar law, or appointing a receiver,
liquidator,
9
assignee, custodian, trustee or similar official of Borrower or of any
substantial part of its property, or ordering the winding-up or liquidation of
its affairs, and the continuance of any such decree or order unstayed and in
effect for a period of 60 days, or there shall have been filed a petition by or
against Borrower under any bankruptcy law or other insolvency law and, if
petition is filed against Borrower , the petition is not withdrawn or dismissed
within 60 days after the date of filing; or Borrower shall cease doing business
as a going concern or shall liquidate or be dissolved;
(vi) there shall occur under any lease, contract or agreement between
Borrower and Lender, a material, continuing Event of Default, as defined in
such agreement, contract or agreement;
(vii) any of the Collateral shall be attached, levied upon, encumbered,
pledged, seized or taken under any judicial process (except for any attachment,
levy, encumbrance or pledge caused to be placed on the Equipment by Lender) and
such proceedings shall not be vacated, or fully stayed, within 30 days thereof;
(viii) at any time there shall occur under (A) any lease between Borrower
and a party other than Lender as lessor or (B) under any lease wholly or
partially guaranteed by Borrower, the exercise by the lessor of its possessory
remedies or commencement of legal proceedings by the lessor for default under
the lease; provided that the aggregate future payments remaining to be made or
guaranteed by Borrower exceed $10,000, and that under a lease described in (B)
above within ten days of notice to Borrower of such exercise of remedies and
demand for payment by Borrower any such amount guaranteed by Borrower remains
unpaid; or
(ix) any obligation of Borrower for the payment of borrowed money or the
acquisition of assets by purchase, conditional sale or other arrangement is not
paid or refinanced at maturity, whether by acceleration or otherwise, or is
declared due and payable prior to the stated maturity thereof by reason of
default or other violation of the terms of any promissory note or agreement
evidencing or governing such obligation, and Lender has given Borrower an
opportunity to either cure the purported Event of Default or supply information
satisfactory to Lender that it does not, in fact, exist;
all the Loans and all of the Notes and other Obligations shall be declared in
default, immediately and without notice upon the occurrence of an Event of
Default specified in clause (v) above, and in the case of any other Event of
Default, upon Lender at any time at its option subsequent to such Event of
Default and so long as the Event of Default is continuing giving notice to
Borrower that the Obligations are declared in default. At any time after the
Obligations have been declared in default, Lender may exercise one or more of
the following remedies, to the extent not then prohibited by law, as Lender in
its sole discretion may elect:
(I) to proceed by appropriate court action or actions at law or in equity
or in bankruptcy to enforce performance by Borrower of the covenants and terms
of the Obligations and to recover damages for the breach thereof;
(II) to accelerate payment of the Notes for their full amounts;
(III) with ten (10) days written notice to Borrower, to take possession of
the Collateral and/or to render inoperable the Collateral wherever found, with
or without legal process, and for this purpose Lender and/or its agents may
enter upon any premises of or under the control or jurisdiction of Borrower or
any agent of Borrower without liability for suit, action or other proceeding by
Borrower and remove the Collateral
10
therefrom; Borrower hereby expressly waives any claims for damages occasioned by
such taking of possession by Lender; BORROWER HEREBY EXPRESSLY WAIVES ANY AND
ALL RIGHTS, INCLUDING RIGHTS TO NOTICE OR A JUDICIAL HEARING, WITH RESPECT TO
LENDER'S TAKING POSSESSION OF THE COLLATERAL AFTER AN EVENT OF DEFAULT;
(IV) Upon ten days written notice to Borrower of intention to sell or
lease the Collateral, to sell any Collateral at a private or public, cash or
credit sale, and to lease or license any Collateral including to lease any
Equipment, in all the foregoing events free and clear of any rights of Borrower
in the Collateral including the Equipment;
(V) whether or not Lender shall have exercised, or shall hereafter at any
time exercise, any of its other rights with respect to the Collateral, upon
written notice to Borrower, to demand that Borrower pay to Lender, and Borrower
shall pay to Lender on the date specified in such notice, as liquidated damages
an amount equal to the prepayment premium which would have been payable if the
Loan had been prepaid on the date the default was declared.
(VI) Borrower authorizes and empowers Lender, with the aid and assistance
of any person or persons, with or without legal process, to enter any premises
of Borrower, or any other place or places where any of the Collateral is or may
be placed, and to take possession thereof, and to sell the same either in bulk
or in parcels at public or private sale upon any of such premises or at such
other place or places as Lender may designate, or to remove the Collateral and
to sell, lease and otherwise dispose of the same at public or private sale
either in bulk or in parcels, and at the same time to sell, lease and dispose of
all the right, title, and interest of Borrower in and to the Collateral, and out
of the moneys arising therefrom to pay Lender any and all sums then owing to
Lender that are secured by the Obligations, and all reasonable costs, fees,
charges, and expenses in connection therewith, including counsel fees, and
disbursements, premiums on bonds, custodian's fees, fees of public officers, and
an auctioneer's fee of 15 percent on gross sale proceeds, any disbursements for
advertising and labor, use and occupancy of premises, and any and all other
disbursements made by Lender in connection with the taking, maintaining,
storage, repair, refurbishment and disposition of the Collateral, and all
reasonable expenses (including reasonable counsel fees) incident to the
enforcement of payment of any obligations of Borrower to Lender by any suit or
action or by participation in, or in connection with, a case or proceeding under
the Bankruptcy Code, or any successor statute thereto, rendering the excess (if
any) to Borrower or its successors or assigns. Borrower shall be bound by the
result of any sales made in accordance herewith. If for any reason the
Collateral shall fail to satisfy all of the foregoing items, and amounts due
Lender including the Loans, Borrower shall pay Lender the deficiency;
and
(VII) to exercise the remedies provided by the Uniform Commercial Code or
other applicable law.
In addition to the foregoing, Lender may also recover from Borrower all
costs and expenses arising out of Borrower's default, including, without
limitation, expenses of Lender's taking possession of the Equipment and the
storage, inspection, repair, reconditioning, sale and re-leasing thereof, and
reasonable attorneys' fees incurred by Lender in exercising any of its rights or
remedies hereunder. No remedy referred to in this Section is intended to be
exclusive, but each shall be cumulative and in addition to any other remedy
referred to above or otherwise available to Lender at law or in equity or
11
in bankruptcy. The exercise by Lender of any one or more remedies shall not be
deemed to preclude the simultaneous or later exercise by Lender of any or all
such previously exercised remedies and any and all other remedies. For the
purposes of this Section only, "fair market rental value" and "fair market sales
value" shall be determined by an appraisal of an independent appraiser mutually
agreed by Borrower and by Lender, and the cost of any such appraisal shall be
borne by Borrower.
16. Authorization of Lender. If Lender shall at any time rightfully
------------------------
obtain possession, either with or without legal process, or be entitled to
possession of any of the Collateral, it shall not be necessary for Lender to
remove such Collateral but Borrower will permit, and take security precautions
reasonably necessary to prevent the use or relocation of the Collateral until
ten (10) days after the sale of such Collateral. Borrower waives any and all
claims of any nature, kind, or description which it has or may claim to have
against Lender or its representative or any Assignee by reason of its or their
taking possession of or selling any or all of the Collateral.
17. Assignment and Transfer by Lender. (a) Lender may at any time and
----------------------------------
from time to time assign to one or more assignees (all herein called the
"Assignee") for the purpose of securing a loan to Lender or for any other
purpose without notice to or consent of Borrower, any or all of the Obligations
and the Transactional Documents, and any sums at any time due and to become due
or at any time owing or payable by Borrower to Lender under the obligations.
The Assignee shall not be obligated to perform any duty, covenant or condition
required to be performed by Lender, if any, in respect of the Obligations or the
Transactional Documents other than confidentiality obligations. Nothing herein
limits lenders obligations.
(b) Borrower further acknowledges and agrees that from and after the
receipt by Borrower of written notice of an assignment from Lender, Borrower
shall comply with the directions or demands given in writing by the Assignee,
and the Assignee shall have the right to exercise (either in its own name or in
the name of Lender) all rights, privileges, and remedies of Lender provided for
herein subject to the terms hereof and of the Confidentiality Agreement dated
June 27, 1997 (the "Confidentiality Agreement"), including those relating to
confidentiality and quiet enjoyment. Borrower agrees that any obligation to the
Assignee as a result of such assignment shall not be reduced or minimized by
reason of any claim, defense, counterclaim, set-off, abatement, reduction or
recoupment or other right that Borrower might otherwise have been able to assert
against Lender or any prior Assignee. After any assignment to the Assignee and
unless and until Borrower is otherwise notified by the Assignee, the Obligations
and Transactional Documents may not be amended or modified, and no consent or
waiver hereunder shall be effective, without the prior written consent of the
Assignee. Borrower agrees to execute, and Lender or any Assignee may record any
instruments and documents relating to such assignment, mortgage or security
interest desired by Lender or any Assignee. Borrower shall promptly provide any
such instruments and documents that are requested by Lender or any Assignee
including certificates indicating any claim, defense, counterclaim, set-off,
abatement, reduction, recoupment or other right that Borrower may have against
Lender or any Assignee, the payments that have been made under each Note and
that the Obligations and Transactional Documents are in effect without default
or amendment, or the extent of such default or amendment, as the case may be.
18. Recording and Filing; Expenses. Borrower will, upon demand of Lender,
-------------------------------
at Borrower's cost and expense, do and perform any reasonable other act and will
execute, acknowledge, deliver, file, register, record and deposit (and will re-
file, re-register, re-record or re-deposit whenever required) any and all
instruments required by law or reasonably requested by Lender (or any Assignee
but not at Borrower's cost for
12
Assignee) including, without limitation, financing statements under the Uniform
Commercial Code, for the purpose of providing proper protection to the
satisfaction of Lender (and/or any Assignee) of Lender's security interest in
the Collateral (and/or of any Assignee's security interest in the Collateral).
Borrower will also pay, or will upon demand reimburse Lender for, all reasonable
costs and expenses incurred by Lender in connection with the origination of
Loan, and the Transactional Documents, enforcement of Lender's rights under the
Obligations and the Transactional Documents, proceedings involving Borrower as a
debtor under any chapter of the Bankruptcy Code, filings, the documentation of
this transaction, and fees and costs of attorneys for Lender in connection
therewith.
19. Quiet Enjoyment. So long as no Event of Default has occurred
----------------
hereunder, Borrower shall be entitled to the possession and the use and
enjoyment of the Collateral free from hindrance by the Lender or any Assignee.
20. Failure or Indulgence Not Waiver; Additional Rights of Lender. (a)
--------------------------------------------------------------
No failure to exercise, and no delay in exercising, any right, power or remedy
under the Obligations or the Transaction Documents on the part of Lender shall
operate as a waiver thereof, nor shall any single or partial exercise of any
right, power or remedy preclude any other or further exercise thereof or the
exercise of any other right, power or remedy. Any waiver in respect of the
Obligations or the Transactional Documents, to be effective, must be in writing.
A waiver of any covenant, term or condition contained in the Obligations or the
Transactional Documents shall not be construed as a waiver of any subsequent
breach of the same covenant, term or condition. Receipt by Lender of any
payment from Borrower or on its behalf with knowledge of the breach of any
provisions of the Obligations or the Transactional Documents shall not
constitute a waiver of such breach.
(b) Lender shall be entitled to seek injunctive relief in case of the
violation or attempted or threatened violation of any of the provisions of the
Obligations or the Transactional Documents, or a decree compelling performance
of any of their provisions other than for the payment of money, and to any other
remedy allowed in law or in equity.
21. Leasing by Borrower. Borrower shall not lease the Equipment, or
--------------------
relinquish possession of the Equipment, in whole or in part, without the prior
written consent of Lender which consent shall not be unreasonably withheld by
Lender. Nevertheless, any such lease and the rents, profits and proceeds
therefrom shall be included in the Collateral and, unless Lender has consented
to such lease, Lender within 30 days after receiving notice thereof in
accordance with the provisions of this Master Agreement on notices shall have
the right to declare the lease void from its purported commencement, to
terminate the lease or to accept the lease.
22. Notices. Any notice or other communication required or permitted to
--------
be given by either party hereto to the other party shall be deemed to have been
given upon its receipt, in writing, by the receiving party at its address set
forth below, or at such other address as the receiving party shall have
furnished to the other party by notice pursuant to this Section.
If to Borrower: Centaur Pharmaceuticals, Inc.
000 Xxxxxxx Xxxxxxx
Xxxxxxxxx, XX 00000
If to Lender: FINOVA Technology Finance, Inc.
13
00 Xxxxxxxxx Xxxxx
Xxxxxxxxxx, XX 00000-0000
23. Entire Agreement; Severability; Amendment or Cancellation of
------------------------------------------------------------
Obligations. The Obligations, confidentiality agreement dated June 27, 1997,
------------
schedules and the Commitment Letter dated October 7, 1997 which was revised on
December 23, 1997 and amended on April 20, 1998 constitute the complete and
exclusive statement of the terms of the agreement between the parties with
respect to the Loans. Any provision of the Obligations which are prohibited or
unenforceable in any jurisdiction shall be, as to such jurisdiction, ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.
24. Waiver of Jury. Lender and Borrower waive any right and all right to
---------------
trial by jury in any action or proceeding relating in any way to the Obligations
and the Transactional Documents.
25. Governing Law; Consent to Jurisdiction and Service. The Obligations
---------------------------------------------------
shall be governed by and construed in accordance with the laws of the State of
New York (other than the conflicts of laws provisions). Borrower agrees that
any legal action or proceeding against Borrower in respect of or relating to the
Obligations or the Equipment may be brought in any state or federal court
sitting in the State of New York. Borrower hereby irrevocably consents and
submits to the nonexclusive personal jurisdiction of said courts and irrevocably
agrees that all claims in any such action or proceeding may be heard and
determined in and enforced by any such court. Borrower irrevocably consents to
the service of summons, notice, or other process relating to any such action or
proceeding by delivery thereof to it by hand or by mail in the manner set forth
in the provisions of this Master Agreement on notices.
26. Lender's Right to Perform for Borrower. If Borrower fails to duly and
---------------------------------------
promptly perform any of its obligations under this Master Agreement or fails to
comply with any of the covenants or agreements contained herein, Lender may
itself perform such obligations or comply with such covenants or agreements, for
the account of Borrower, without thereby waiving any default, and any amount
paid or expense (including, without limitation, attorney's fees) reasonably
incurred by Lender in connection with such performance or compliance shall,
together with interest thereon at the Default Interest Rate borne by the
earliest dated Note then outstanding, be payable by Borrower to Lender on
demand.
27. Binding Effect. This Master Agreement shall inure to the benefit of
---------------
and be binding upon the parties hereto and their respective permitted successors
and assigns.
28. General. The captions in this Master Agreement are for convenience of
--------
reference only. There shall be only one original executed copy of each of the
Obligations. This Master Agreement is and each Loan and Security Agreement
shall be executed in the State of Connecticut by Lender's countersigning the
same in the State of Connecticut, and are to be and shall be performed in the
State of Connecticut by reason of the requirements therein for payment by
Borrower to Lender to be made in the State of Connecticut.
29. Definitions. The following terms, not elsewhere defined, shall have
------------
the following meanings for all purposes hereof:
14
"Acquisition Cost" of any item of the Equipment shall mean the purchase
price of such item of the Equipment paid by Borrower.
"Guarantor" shall mean a guarantor of any or all of the obligations of
Borrower pursuant to this Master Agreement.
"Guaranty" shall mean a writing containing a guaranty of any or all of the
obligations of Borrower pursuant to this Master Agreement under the Notes and in
regard to the Loans.
"Manufacturer" shall mean the Person that manufactures the item of the
Equipment in question.
"Obligations" shall mean this Master Agreement, the Notes and the Loan and
Security Agreements and the Schedules and Exhibits thereto.
"Person" shall mean an individual, a corporation, a partnership, an
association, a joint-stock company, a trust, an estate, any incorporated
organization or similar association, a government or political subdivision, or
any other entity.
Witness the execution hereof by the duly authorized representatives of
Borrower and Lender as of the day and year first above written.
ATTEST: CENTAUR PHARMACEUTICALS, INC.
(SEAL)
/s/ Xxxx X. Day By /s/ Xxxxxx X. Xxxxxx
--------------------- ---------------------
Asst. Secretary CFO and Treasurer
ATTEST: FINOVA TECHNOLOGY FINANCE, INC.
(SEAL)
By /S/ Xxxxx X Xxxxxxxxx
__________________________ ---------------------
Xxxxx X Xxxxxxxxx
Director - Contract Administration
[NOTARY SEAL]
15
A SECURITY INTEREST IN THIS LOAN AND SECURITY AGREEMENT TO BE PERFECTED BY
POSSESSION MAY ONLY BE PERFECTED BY POSSESSION OF THE ONE SIGNED COPY OF THIS
LOAN AND SECURITY AGREEMENT.
LOAN AND SECURITY AGREEMENT NO. 1
LOAN AND SECURITY AGREEMENT dated as of April 22, 1998 (the "Agreement")
between CENTAUR PHARMACEUTICALS, INC., A Delaware corporation with its
executive office and principal place of business at 000 Xxxxxxx Xxxxxxx,
Xxxxxxxxx, XX 00000 (the "Borrower"), and FINOVA TECHNOLOGY FINANCE, INC., a
Delaware corporation with its executive office and principal place of business
at 00 Xxxxxxxxx Xxxxx, Xxxxxxxxxx, Xxxxxxxxxxx 00000-0000 ("Lender").
1. Obligation to pay. The Borrower concurrently with the execution and
------------------
delivery of this Agreement is borrowing Eight Million and 00/100 Dollars
($8,000,000.00) from the Lender, which borrowing is evidenced by the Borrower's
promissory note bearing the same date as this Agreement in the principal amount
of $8,000,000.009,167,110.47 (the "Promissory Note"). of which $6,956,686.95 is
principal and the remainder is interest.
2. Purpose of Loan and Collateral. The Borrower desires to enter into
-------------------------------
this Agreement for the purpose of financing or refinancing its acquisition of,
and creating a lien and security interest in favor of the Lender in, and hereby
grants the Lender a security interest in, the collateral described on Schedule A
attached hereto, and all replacements, substitutions, additions, attachments,
parts, fittings, accessories and accessions thereto and therefore, whether owned
or hereafter acquired, and all proceeds (including insurance proceeds and any
leases and the rentals and profits thereon) (all hereinafter called the
"Collateral"), to secure the obligations of the Borrower now existing and
hereafter arising under this Agreement and under all of the Notes under the
Master Loan and Security Agreement between Borrower and Lender dated November 3,
1997 ("Master Agreement").
3. Obligations of Borrower. The Borrower shall be obligated under this
------------------------
Agreement to make payment of (1) the debt evidenced by the Promissory Note,
including renewals and extensions thereof, and any other present or future
obligations of the Borrower to the Lender including, but not limited to, other
Notes secured by the Collateral. (2) any costs and expenses incurred in
collection of the Promissory Note or enforcement of the covenants and
obligations of the Borrower in this Agreement or under the Master Agreement, (3)
any future advances made by the Lender for taxes, levies, insurance, and repairs
to or maintenance of or on the Collateral , and (4) the costs for performance by
the Lender of any of the covenants and obligations of the Borrower under this
Agreement or the Master Agreement that are not timely performed by the Borrower.
4. Terms of Master Agreement. The terms of the Master Agreement are
-------------------------
hereby incorporated into and made a part of this Agreement with the same effect
as though hereat set forth at length. Any declaration that the Obligations have
been declared in default under the Master Agreement shall be a default under
this Loan and Security Agreement and permit exercise of all remedies either
provided or permitted by the Master Agreement.
1
Witness the execution hereof the day and year first above written.
CENTAUR PHARMACEUTICALS, INC.
By /s/ Xxxxxx X. Xxxxxx
---------------------------
FINOVA TECHNOLOGY FINANCE, INC.
By___________________________
[NOTARY SEAL]
2
Revised as of December 23, 1997
October 7, 1997
Ms. Lucy X.Xxx
Director of Finance
Centaur Pharmaceuticals, Inc.
000 Xxxxxxx Xxxxxxx
Xxxxxxxxx, XX 00000
Dear Ms. Day:
FINOVA Technology Finance, Inc. ("Lender") is pleased to offer to loan $10
million for the financing and/or re-financing of Equipment described below to
Centaur Pharmaceuticals, Inc. ("Borrower").
Borrower: Centaur Pharmaceuticals Inc.
---------
Lender: FINOVA Technology Finance, Inc.
-------
Equipment: Various laboratory and production equipment, and
--------- manufacturing site tenant improvements to be selected
by Borrower. The Lender shall not be responsible for
any failure of suppliers or manufacturers of the
Equipment or their distributors to perform their
obligations to the Lender or the Borrower.
Equipment Cost: $ 6,700,000 Manufacturing site tenant improvement
--------------- $ 1,000,000 1998 equipment purchases
$ 2,300,000 Advance on previously acquired equipment
-----------
$10,000,000 Total Equipment Cost
Equipment Location: Santa Clara, CA
-------------------
Availability: Funding cut off July 31, 1998
------------
Term: 48 months to be repaid in full by July 31, 2002
-----
Monthly Payments: 2.741% of Equipment Cost, monthly in advance for 48
---------------- months, based on a 4-year T-Xxxx interest rate of
6.08% per annum.
Adjustment to
-------------
Monthly Payments: The actual interest rate for a given draw down shall be
---------------- adjusted for any increase in the highest yields on
four-year U.S. Treasury notes from the week ended
August 8, 1997 to the week preceding the Loan Term
Commencement date, as published in The Wall Street
Journal. Effective on each Loan Term Commencement, the
Monthly Payment for such note shall be adjusted to
reflect such change. (For example, if the applicable 4-
year T-Xxxx rate is 7.08%, then the Monthly Payment for
such advance will be 2.790%) of Equipment Cost. As of
such date, the Monthly Payments shall be fixed for the
entire term.
Additional Provisions: Lender will have a first priority perfected security
--------------------- interest in the Equipment.
In addition to a first perfected security interest in
the Equipment, Lender's collateral will include a first
deed of trust on Borrower's interest as Lessee in the
Santa Xxxxx site. This commitment is subject to
Lender's review and approval of the terms of the real
property lease(s) for the Santa Xxxxx site, and the
approval by the site landlord(s) of any amendment(s) to
the lease that may be requested by Lender as a result
of this review.
Lender will make advance(s) against previously acquired
equipment as follows:
Percent of Cost Year Acquired
--------------- --------------
25% 1995
65% 1996
80% Jan-June 1997
100% July-Dec. 1997
Amount advanced will be calculated beginning with the
most recently acquired equipment, however shall not
exceed $2,300,000.
Interim Payments: Interim Payments shall accrue from each Loan Term
---------------- Commencement until the next following first day of a
month (unless the Loan Term Commencement is on the
first day of a month). Interim Payments shall be at
the daily equivalent of the currently adjusted Monthly
Payment.
Loan Provisions
---------------
and Covenants: The Loan Documents shall include the usual provisions
------------- and covenants in the Lender's loan agreements and such
other or different provisions that are agreed to by the
parties. The Borrower shall deliver a note to the
Lender for each advance.
Insurance: Prior to any delivery of Equipment, the Borrower shall
--------- furnish confirmation of insurance acceptable to the
Lender covering the Equipment including primary, all
risk, physical damage, property damage and bodily
injury, and earthquake coverage or equivalent
protection as Lender may agree with appropriate loss
payee endorsement in favor of the Lender.
Conditions to Closing: Conditions precedent to every Loan Term Commencement
---------------------- shall include (i) that no payment is then past due to
the Lender or any assign of the Lender from the
Borrower, (ii) that the Borrower is in compliance with
the provisions of this Commitment and the Loan, (iii)
that information requested by the Lender and all
documentation then required by the Lender's counsel has
been received by the Lender including resolutions of
the Board of Directors of the Borrower authorizing the
transactions contemplated by this Commitment, (iv) an
initial, opinion of counsel for the Borrower
satisfactory to counsel for the Lender, followed by
periodic certification by Borrower's management, (v)
that the Borrower is not in default under any material
contract to which it is a party or by which it or its
property is bound, and (vi) that there has not been any
material adverse change or likely material adverse
change in the financial or other condition, business,
operations, properties, assets or prospects of the
Borrower since June 30, 1996 or from the written
information that has been supplied to the Lender prior
to the date of this Commitment by the Borrower. The
Borrower shall provide quarterly financial statements
and status reports during the commitment period.
2
In addition, prior to any advance under the line:
1) Borrower must provide audited fiscal year end 1997
financial statements with an unqualified opinion from
Ernst & Young;
2) Satisfactory review by FINOVA, in its sole
discretion, of the agreements between Borrower, Astra &
Lundbeck.
Fees and Expenses: The Borrower shall be responsible for the Lender's
----------------- reasonable out of pocket expenses in connection with
the transaction. Lender will advise if such fees will
exceed $3,000 as such costs are discovered during the
diligence and documentation process.
Commitment Fee: The $87,000 Application Fee previously paid by the
-------------- Borrower and $33,000 incremental Application Fee shall
be applied to the Commitment Fee. The Commitment Fee
shall first be applied to the Lenders costs and
expenses in direct connection with this transaction,
and any remainder shall be refunded to the Borrower on
a pro rata basis by being applied against the second
Monthly Payment due on periodic advances.
Commitment Expiration: This Commitment shall expire on December 29, 1997
--------------------- unless prior thereto either expended in writing by the
Lender or accepted as provided below by the Borrower.
Upon the Borrower's accepting this Commitment, the
Lender shall promptly prepare and send to the Borrower
the loan agreement called for by this Commitment. This
Commitment shall terminate 30 days after receipt of the
loan agreement by the Borrower unless by then the loan
agreement and related documentation have been signed by
the Borrower and delivered to the Lender.
Survivability: The terms and conditions of this Commitment shall
------------- survive the closing of the Loan, and to the extent any
such terms and conditions conflict with the Loan
Documents, the terms and conditions of the Loan
Documents shall control.
Should you have any questions, please call me. To accept this Commitment,
please so indicate by signing and returning the enclosed duplicate copy of this
letter to me by December 29, 1997.
Sincerely,
FINOVA TECHNOLOGY FINANCE, INC.
By /s/ Xxxxxx X. Xxxxxxxx
-----------------------------
Xxxxxx X. Xxxxxxxx
Vice President - Credit
Accepted this 29th day of December, 1997
Centaur Pharmaceuticals, Inc.
By:/s/ Xxxxxx X. Xxxxxx
-------------------------------------
Xxxxxx X. Xxxxxx
Title: C F O
3
April 20, 1998
Xx. Xxxx X. Day
Director of Finance
Centaur Pharmaceuticals, Inc.
000 Xxxxxxx Xxxxxxx
Xxxxxxxxx, XX 00000
Re: Amendment to Commitment Letter dated October 7, 1997 which was revised on
December 23, 1997
Dear Ms. Day:
This letter agreement amends the Commitment Letter dated October 7, 1997 which
was revised on December 23, 1997 of FINOVA Technology Finance, Inc. ("Lender")
to Centaur Pharmaceuticals, Inc. ("Borrower").
The initial funding will be in the amount of $8,000,000. It will be evidenced
by a Note and Security Agreement in the amount of $8,000,000 and collateralized
with personal property having an initial purchase price (inclusive of financed
soft costs) of $9,159,474.42.
Upon fulfillment to Lender's satisfaction of one of the following two
conditions, FINOVA will fund the remaining $2,000,000 . This funding will also
be evidenced by one or more Note and Security Agreements, which will be cross-
collateralized with and cross-defaulted to the Note and Security Agreement
evidencing the initial $8,000,000 funding. Conditions are:
(1) Borrower's entering into an additional collaboration agreement with 1998
cash flow of not less than $10,000,000, inclusive of equity contribution,
milestone or research and development payments by Collaborator to Borrower.
Lender reserves the right to review the creditworthiness of Collaborator.
(2) Successful completion and closing of an initial public offering of
Borrower's equity securities ("IPO"). Net proceeds to Borrower of the IPO
shall be no less than $30,000,000.
Please indicate your agreement to this amendment to the Commitment Letter by
signing below and returning to us.
Sincerely yours, Accepted and Agreed:
FINOVA Technology Finance, Inc. Centaur Pharmaceuticals, Inc.
By /s/ Xxxxx X. Xxxxxxxxx By /s/ Xxxxxx X. Xxxxxx
---------------------- ------------------------
Title Director, Contract Administration Title CFO & Treasurer
Date 4/23/98 Date 4/22/98
1
LEASEHOLD DEED OF TRUST
THIS LEASEHOLD DEED OF TRUST (this "Deed of Trust") is dated for
-------------
reference purposes and made as of November 3, 1997, by CENTAUR PHARMACEUTICALS,
INC., a Delaware corporation ("Trustor"), with its executive office and
-------
principal place of business at 000 Xxxxxxx Xxxxxxx, Xxxxxxxxx, Xxxxxxxxxx 00000,
in favor of COMMONWEALTH LAND TITLE COMPANY, a California corporation
("Trustee"), for the benefit of FINOVA TECHNOLOGY FINANCE, INC., a Delaware
-------
corporation ("Beneficiary"), whose address is 00 Xxxxxxxxx Xxxxx, Xxxxxxxxxx,
-----------
Connecticut 06032-3065.
RECITALS
--------
A. The Lease. Trustor is the sole holder of the lessee's rights,
---------
interest and estate (the "Leasehold Estate") arising under and created by that
----------------
certain Standard Industrial/Commercial Multi-Tenant Lease - Gross dated February
12, 1997 (the "Lease"), by and between Memorex Drive LLC, as the "Lessor"
-----
("Lessor"), and Trustor, as the "Lessee," as amended and supplemented by that
------
certain Agreement Concerning Encumbrance of Leasehold Estate of even date
herewith between Lessor and Trustor (the "Agreement Concerning Encumbrance").
--------------------------------
The Lease demises premises (the "Premises") commonly identified as Suite 100 in
--------
the building located at 0000 Xxxxxxx Xxxxx in the City of Santa Xxxxx, County of
Santa Xxxxx, State of California. The real property on which such building is
situated (the "Real Property") is owned by Lessor and is more particularly
-------------
described in Exhibit A attached hereto and incorporated herein by this
---------
reference. Lessor and Trustor have executed a memorandum of the Lease and
caused such memorandum to be recorded on March 26, 1998, as Instrument No.
14112136 in the Official Records of Santa Xxxxx County, California.
B. Loan Agreement; Credit Facility. Pursuant to a Master Loan and
-------------------------------
Security Agreement of even date herewith between Beneficiary and Trustor (such
Master Loan and Security Agreement, as it may be amended from time to time, is
hereinafter referred to the "Loan Agreement"), Beneficiary has agreed to
--------------
establish for Trustor a total credit facility in the aggregate principal amount
of up to $10,000,000.00 (the "Credit Facility"). The Credit Facility includes
---------------
one or more term loans evidenced by the Loan Agreement and the promissory note
or notes issued and to be issued by Trustor to Beneficiary pursuant to the Loan
Agreement (collectively, the "Debt Instruments"). The provisions of the Loan
----------------
Agreement, including those governing adjustments to the interest rates and
payment amounts and the accrual of interest, are incorporated herein by
reference.
GRANTING CLAUSE
---------------
In consideration of the Credit Facility, and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Trustor hereby irrevocably grants, transfers and assigns to
Trustee, in trust for Beneficiary, with power of sale, under and subject to the
terms and conditions hereinafter set forth, for the benefit and security of
Beneficiary, all of Trustor's present and future estate, right, title and
interest in and to the Leasehold Estate, together with all of the following now
owned or hereafter acquired by Trustor (collectively, the "Mortgaged Property"):
------------------
(a) all fixtures and leasehold improvements now or hereafter located
in the Premises (but not including any equipment or installations that are
readily removable from the Premises without material damage to the Premises and
that constitute personal property in which a security interest may be perfected
by the filing of a financing statement in the Office of the California Secretary
of State);
1
(b) any and all plans, drawings and specifications for any leasehold
improvements now located on, or hereafter to be constructed on or in the
Premises, and all studies, data and drawings relating thereto (but not including
any information specifically related to the manufacture of Trustor's products);
Trustor's rights under all payment, performance or other bonds and in all
deposits and other security delivered to, by or for the benefit of Trustor in
connection with the construction of any such improvements; any and all
construction materials, supplies and equipment used or to be used in connection
with the construction of any such improvements, whether or not stored in the
Premises, and all warranties and guaranties relating thereto; any and all
contracts, subcontracts, agreements, and purchase orders with architects,
engineers, consultants, contractors, subcontractors, suppliers and materialmen
incidental to construction of any such improvements; and all reserves, deferred
payment deposits, cost savings and payments of any kind relating to the
construction of such improvements; and
(c) all insurance and insurance policies insuring the Mortgaged
Property or any activity thereon or part thereof or interest therein and all
proceeds of such insurance policies; all claims, awards, damages, causes of
action, judgments, recoveries, compensation and insurance proceeds arising on
account of injury or damage to or taking of all or any part of the Mortgaged
Property or for any loss or diminution in value of the Mortgaged Property; all
advance payments of insurance premiums made by Trustor with respect to the
Mortgaged Property; all deposits or security given by Trustor to third parties
with respect to the Mortgaged Property; all claims or demands with respect to
such deposits or security; and all right to refunds or rebates of any such
insurance premiums deposits or security.
ARTICLE I
OBLIGATIONS SECURED
1.1. Secured Obligations; Loan Documents. This Deed of Trust secures
-----------------------------------
the following indebtedness and obligations (collectively, the "Secured
-------
Obligations"): (a) the payment and performance of all of Trustor's indebtedness
-----------
and obligations, now or hereafter incurred by Trustor, under the Loan Agreement,
this Deed of Trust, and all other Loan Documents (as defined below in this
paragraph), including all principal due and all interest, prepayment charges,
late charges, loan fees and other charges at any time accruing or assessed under
the Loan Documents; (b) the payment of all sums advanced, paid or expended by
Beneficiary under or pursuant to any provision of this Deed of Trust or any
other Loan Document, or to protect the Mortgaged Property or any other security
for the Credit Facility, together with interest on each such advance, payment or
expenditure at the applicable rate of interest in effect under the applicable
Debt Instrument from the date of such advance, payment or expenditure until paid
in full; (c) any and all renewals, extensions, modifications, substitutions,
replacements and consolidations of the indebtedness and obligations described in
clauses (a) and (b) above; and (d) the payment of principal, interest and any
other indebtedness hereafter owing by Trustor under any additional loans made by
Beneficiary to Trustor that are evidenced by a promissory note or other writing
reciting that the same is secured hereby, including all prepayment charges, late
charges, loan fees and other charges accruing or assessed under such promissory
notes or other writings ("Additional Advances"). All of the foregoing amounts
-------------------
shall be secured by this Deed of Trust to the same extent and with the same
priority as the initial advance of proceeds of the Credit Facility made by
Beneficiary. The Loan Agreement and other Debt Instruments, this Deed of Trust,
and all other instruments, agreements, certificates and documents that evidence,
secure or set forth any of Trustor's obligations relating to the Credit Facility
and/or any Additional Advances, all as amended, modified, extended, renewed,
restated, and supplemented from time to time, and whether now in existence or
hereafter made or entered into, and whether or not secured by this Deed of
Trust, are hereinafter collectively referred to as the "Loan Documents."
--------------
2
ARTICLE II
CERTAIN REPRESENTATIONS AND COVENANTS OF TRUSTOR
2.1. Actions Affecting Property; Duty to Protect Beneficiary and
-----------------------------------------------------------
Security. Trustor shall, at its own expense, appear in, prosecute, defend and
--------
contest (with counsel approved by Beneficiary) any action or proceeding that
purports to materially and adversely affect the Mortgaged Property or any
portion thereof or Trustor's title thereto, the validity or priority of the lien
of this Deed of Trust, or the rights, powers, liabilities or obligations of
Beneficiary or Trustee as to the Mortgaged Property.
2.2. Transfer of Property. Upon any assignment, further encumbrance
--------------------
or other transfer of all or any part of or interest in the Mortgaged Property or
upon any subletting of all or any part of the Premises, or upon the dissolution,
liquidation or termination of Trustor, Beneficiary may, at its option, declare
all of the sums secured by this Deed of Trust to be immediately due and payable,
and if such sums are not paid in full within 10 days after written demand by
Beneficiary, Trustor shall be in default under this Deed of Trust and
Beneficiary may invoke all of the remedies available under this Deed of Trust
and the other Loan Documents as well as all additional remedies available at law
or in equity.
2.3. Performance of Lease Obligations. Trustor promptly shall pay
--------------------------------
when due all rents and other sums that Trustor is required to pay under the
terms of the Lease, and shall perform fully and when due each and all of
Trustor's other covenants and obligations under the Lease, and shall do all
other things necessary to preserve and keep unimpaired Trustor's rights under
the Lease.
2.4. Notices to Beneficiary. Trustor promptly shall notify
----------------------
Beneficiary in writing (a) of any default on the part of Lessor under the Lease,
or in the performance or observance of any of the terms, covenants, and
conditions on the part of Lessor to be kept and performed under the Lease, (b)
of the occurrence of any event that, with or without, the lapse of time or the
giving of notice, would constitute a default on the part of Lessor under the
Lease, or (c) the giving to or service upon Trustor by Lessor under the Lease of
any notice of default on the part of Trustor thereunder in the performance or
observance of any of the terms, covenants, and conditions to be kept, performed,
or observed by Trustor under the Lease, and Trustor shall cause a copy of any
notice furnished or delivered to Trustor by Lessor under the Lease to be
delivered forthwith to Beneficiary.
2.5. Surrender, Cancellation or Modification. Trustor shall not
---------------------------------------
surrender the Lease or the Premises or Trustor's Leasehold Estate, nor shall
Trustor terminate or cancel the Lease or, without Beneficiary's prior written
consent (which consent shall not be unreasonably withheld or delayed), amend or
supplement the Lease or consent to any of the foregoing. Any such termination,
cancellation and any such amendment or supplement made or consented to by
Trustor without Beneficiary's prior written consent shall be void and of no
effect.
2.6. Ability to Perform Trustor's Obligations. If at any time
----------------------------------------
Trustor fails to comply fully or in a timely manner with any of Trustor's
obligations under the Lease, and such failure materially threatens the value or
existence of Beneficiary's security under this Deed of Trust, Beneficiary, but
without obligation to do so and without notice to or demand upon Trustor and
without releasing Trustor from any obligation hereunder or removing or waiving
any corresponding default under this Deed of Trust, may perform on behalf of
Trustor any such obligations if Beneficiary acts reasonably in so doing;
provided that the foregoing shall not be construed to require Beneficiary to
incur any expense or take any action with respect to Trustor's failure to comply
with any of Trustor's
3
obligations under the Lease. Upon demand, Trustor shall pay to Beneficiary all
costs and expenses (including, but not limited to, legal fees and disbursements)
paid or incurred by Beneficiary in connection with performing such obligations.
Any such costs or expenses not paid by Trustor within five business days after
demand shall be added to the indebtedness secured by this Deed of Trust, shall
bear interest at the rate that is the sum of 5% percent per annum plus the
highest interest rate then in effect under the Debt Instruments (or the highest
rate of interest permitted by law, if less), and shall be secured by the lien of
this Deed of Trust.
2.7. Bankruptcy of Trustor or Lessor. Trustor hereby unconditionally
-------------------------------
assigns, transfers, and sets over to Beneficiary, as additional security for the
Secured Obligations, all of Trustor's claims and rights to any damages arising
from any rejection of the Lease by Lessor pursuant to the United States
Bankruptcy Code (11 U.S.C. (S) 101 et seq. (the "Bankruptcy Code")). Any
-- --- ---------------
amounts received by Beneficiary as damages from Lessor's rejection of the Lease
shall be applied first to the payment of all reasonable costs and expenses
(including, but not limited to, reasonable legal fees and disbursements) paid or
incurred by Beneficiary in obtaining such damages and then to the payment of the
indebtedness and obligations secured by this Deed of Trust, in any order that
Beneficiary chooses. Upon demand, Trustor shall pay to Beneficiary all of the
foregoing reasonable costs and expenses not satisfied by the amounts received by
Beneficiary as damages. Any such costs or expenses not paid by Trustor upon
demand shall be added to the indebtedness secured by this Deed of Trust, shall
bear interest at the rate that is the sum of 5% percent per annum plus the
highest interest rate then in effect under the Debt Instruments (or the highest
rate of interest permitted by law, if less), and shall be secured by the lien of
this Deed of Trust.
(a) The lien of this Deed of Trust shall attach to all of Trustor's
rights and remedies at any time arising under or pursuant to Section 365(h) of
the Bankruptcy Code (11 U.S.C. (S) 365(h)) or other applicable law, including,
but not limited to, all of Trustor's rights to remain in possession of the
Premises.
(b) Trustor shall not elect to treat the Lease as terminated under
Section 365(h)(1) of the Bankruptcy Code (11 U.S.C. (S) 365(h)(1)) or other
applicable law without Beneficiary's prior written consent. Any such election
without Beneficiary's prior written consent shall be void and of no force or
effect.
(d) If, pursuant to Section 365(h)(2) of the Bankruptcy Code (11
U.S.C. (S) 365(h)(2)) or other applicable law, Trustor seeks to offset against
the rent reserved in the Lease the amount of any damages caused by the non-
performance by Lessor of any of Lessor's obligations under the Lease after the
rejection by Lessor of the Lease pursuant to the Bankruptcy Code, Trustor, prior
to making such offset, shall notify Beneficiary of Trustor's intent to do so,
setting forth the amounts proposed to be offset and the basis for such offset.
Beneficiary shall have the right to object to all or any part of such offset,
and, in the event of such objection, Trustor shall not offset any of the amounts
objected to by Beneficiary. If Beneficiary has failed to object to Trustor's
proposed offset within ten days after notice from Trustor in accordance with the
first sentence of this paragraph, Trustor may proceed to offset all or any part
of the amounts set forth in Trustor's notice. Neither Beneficiary's failure to
object to Trustor's proposed offset, nor any objection or other communication
between Beneficiary and Trustor relating to such offset shall constitute an
approval of any such offset by Trustor. Trustor shall defend and hereby
indemnifies and holds Beneficiary harmless from and against any and all claims,
demands, actions, suits, proceedings, damages, losses, costs, and expenses of
every nature whatsoever (including, but not limited to, legal fees and
disbursements) arising from or relating to any offset by Trustor against the
rent reserved in the Lease.
4
(e) Trustor shall not commence any action, suit, proceeding, or case,
or file any application or make any motion, with respect to the Lease in any
such case under the Bankruptcy Code or
other applicable law without Beneficiary's prior written consent, which shall
not be unreasonably withheld or delayed.
(f) Trustor promptly shall notify Beneficiary of any information
Trustor receives about any filing by or against Lessor of a petition under the
Bankruptcy Code or other applicable law. Trustor shall provide all information
available to Trustor as of the date of such filing, including, but not limited
to, the court in which such petition was filed and the relief sought therein.
Trustor promptly shall deliver to Beneficiary copies of any and all notices,
summons, pleadings, applications, and other documents received by Trustor in
connection with any such petition and any proceedings relating to such petition.
(g) In the event there is filed by or against Trustor a petition
under the Bankruptcy Code or other applicable law, and Trustor, as lessee under
the Lease, shall determine to reject the Lease pursuant to Section 365(a) of the
Bankruptcy Code (11 U.S.C. (S) 365(a)) or other applicable law, Trustor shall
give Beneficiary not less than ten days' prior notice of the date on which
Trustor shall apply to the bankruptcy court for authority to reject the Lease.
Beneficiary shall have the right, but not the obligation, to serve upon Trustor
within such ten-day period a notice stating that (i) Beneficiary demands that
Trustor assume and assign the Lease to Beneficiary pursuant to Section 365 of
the Bankruptcy Code or other applicable law, and (ii) Beneficiary covenants to
cure or provide adequate assurances of future performance under the Lease. If
Beneficiary serves upon Trustor the notice described in the preceding sentence
of this paragraph, Trustor shall not seek authorization to reject the Lease and
shall comply with the demand provided for in clause (i) of the preceding
sentence within 30 days after the notice shall have been served upon Trustor,
subject to the performance by Beneficiary of the covenant provided for in clause
(ii) of the preceding sentence. Effective upon the entry of an order for relief
with respect to Trustor under the Bankruptcy Code, Trustor hereby assigns and
transfers to Beneficiary a non-exclusive right to apply to the bankruptcy court
for an order extending the period during which the Lease may be rejected or
assumed.
2.8. Representations and Warranties. Trustor represents and warrants
------------------------------
to Beneficiary that: (a) the copy of the Lease (including all attachments,
exhibits and amendments thereto) that Trustor has furnished to Beneficiary is a
complete and correct copy of the original; (b) the Lease has not been amended or
supplemented in any respect except as expressly stated in the recitals to this
Deed of Trust, and remains in full force and effect; (c) no uncured event of
default by either Trustor or Lessor exists under the Lease; (d) the Mortgaged
Property encumbered hereby includes the entire right, title and interest of the
"Lessee" under the Lease, and no person or entity other than Trustor (and, by
virtue of this Deed of Trust, Beneficiary) holds any such right, title or
interest. Trustor owns or leases the Mortgaged Property free and clear of all
security interests, liens, claims, charges and equities of any nature other than
the lien hereof and the rights of Beneficiary under this Deed of Trust; (e)
Trustor is not bound by, and shall not enter into, any agreement or commitment
that in any manner or to any extent will or could prevent Trustor from
performing any of its obligations hereunder; and (f) all information with
respect to the Mortgaged Property that has been given to Beneficiary by Trustor
or by any third party at the direction of Trustor is accurate and contains no
material misrepresentation or omission. Should any representation or warranty
made by Trustor in any Loan Document prove to be untrue as of the date of this
Deed of Trust, then Beneficiary may declare that an "Event of Default" (as
----------------
defined in Section 4.1) exists. Trustor agrees to indemnify and hold
-----------
Beneficiary free and harmless from all liabilities, obligations, damages, causes
of action, judgments,
5
costs and expenses (including without limitation attorneys' fees) that
Beneficiary may incur or suffer in connection with any breach by Trustor of any
of Trustor's representations or warranties.
ARTICLE III
ASSIGNMENT OF SUBLEASES
3.1. Assignment of Subleases. Trustor hereby assigns and transfers
-----------------------
to Beneficiary, as additional security for the Secured Obligations, all of
Trustor's rights and interests in, to and under any and all existing and future
subleases of all or any portion of the Premises ("Subleases"), whether written
---------
or oral, and any guarantees thereof, together with any and all extensions,
modifications, amendments, assignments and renewals thereof, and all cash or
other security deposited to secure performance by the sublessees of their
obligations thereunder, and all rents and other sums due and to become due
thereunder.
3.2. No Subleases. Trustor represents and warrants to Beneficiary
------------
that no Subleases are now in effect. Trustor shall not enter into any Sublease
without first obtaining Beneficiary's written consent.
ARTICLE IV
REMEDIES UPON DEFAULT
4.1. Events of Default. Any of the following shall constitute an
-----------------
"Event of Default": (a) Trustor's failure to make any payment of money in
-----------------
accordance with the terms of this Deed of Trust; or (b) Trustor's failure to
perform fully and when due any other material covenant or obligation of Trustor
under this Deed of Trust when such obligation is required hereunder to be
performed and such failure is not fully cured within 10 days after Beneficiary
shall have given Trustor notice thereof; or (c) any of Trustor's representations
or warranties made in this Deed of Trust shall be untrue or misleading in any
material respect; or (d) the lien or security interest of this Deed of Trust
shall lose validity or priority; or (e) the occurrence of an event of default
under, or the institution of judicial or nonjudicial foreclosure or other
proceedings to enforce, any deed of trust or other lien or encumbrance of any
kind upon the Mortgaged Property or any portion thereof, whether senior or
junior in priority to the lien of this Deed of Trust; or (f) the occurrence of
an "Event of Default" as defined in the Loan Agreement.
4.2. Rights and Remedies. At any time after the occurrence of an
-------------------
Event of Default, Beneficiary or Trustee may do any one or more of the
following, in any order:
(a) With or without notice to Trustor, declare all Secured
Obligations to be immediately due and payable;
(b) With or without notice, and without releasing Trustor from its
obligations relative to such Event of Default, cure such Event of Default, and
the costs and expenses incurred by Beneficiary or Trustee in so doing shall
become a part of the Secured Obligations;
(c) Exercise any remedy afforded by this Deed of Trust;
(d) Commence and maintain an action or actions to foreclose this Deed
of Trust, to specifically enforce any rights of Beneficiary hereunder (including
rights with respect to possession and sale of any additional security for the
Secured Obligations), to enjoin any conduct that impairs or
6
threatens to impair the security of this Deed of Trust, or to obtain such other
equitable remedies as may be appropriate;
(e) Execute a written declaration of default and demand for sale, and
a written notice of default and election to cause the Mortgaged Property or any
part thereof to be sold by exercise of Trustee's power of sale under this Deed
of Trust, which notice shall be filed for record in the Official Records of the
county in which the Mortgaged Property is located;
(f) Resort to and realize upon the security for the Secured
Obligations and any other security now or hereafter held by Beneficiary in such
order as Trustee and Beneficiary or either of them may, in their sole
discretion, determine, concurrently or successively or in one or several
consolidated or independent judicial actions or nonjudicial proceedings; and
(g) Exercise any and all other remedies at law, including any action
for damages suffered by Beneficiary as a result of any Event of Default, or in
equity as may be available now or hereafter, as Beneficiary may elect.
4.3. Exercise of Trustee's Power of Sale.
-----------------------------------
(a) Should Beneficiary elect to have Trustee exercise the power of
sale herein contained, Beneficiary shall deliver to Trustee a written
declaration of default and demand for sale.
(b) Upon receipt of such items from Beneficiary, Trustee shall cause
to be recorded, published and/or delivered to Trustor such notice of default and
election to sell as may then be required by law and by this Deed of Trust.
After giving notice of default and notice of sale, and the lapse of such time
period as may be required by applicable law, Trustee may, without demand on
Trustor, at the time and place of sale fixed in the notice of sale, either as a
whole or in separate parcels or items or through two or more successive sales,
sell the Mortgaged Property or any part thereof at public auction to the highest
bidder for cash in lawful money of the United States payable at the time of
sale. Trustor shall have no right to direct the order in which the Mortgaged
Property is sold. Beneficiary may, in its sole discretion, designate the order
in which the Mortgaged Property shall be offered for sale or sold and determine
if the Mortgaged Property shall be sold in a single sale or in two or more
successive sales or in any other manner Beneficiary deems to be in its best
interests. If Beneficiary determines that the Mortgaged Property shall be sold
in two or more sales, Beneficiary may, at its option, cause such sales to be
conducted simultaneously or successively on the same day or on different days
and times and in such order as Beneficiary shall determine, and no such sale
shall extinguish or otherwise affect the lien of this Deed of Trust or any part
of the Mortgaged Property not then sold until all Secured Obligations have been
fully paid and discharged. Trustor shall pay the costs and expenses of each
such sale and any judicial proceeding in which any such sale may be made.
Trustee shall deliver to such purchaser its deed conveying the portion of the
Mortgaged Property so sold, but without any covenant or warranty, express or
implied. The recitals in such deed of any matters or facts shall be conclusive
proof of the truthfulness thereof. Any person, including Beneficiary, may
purchase at such sale.
(c) After deducting all costs, fees and expenses of Trustee and of
the sale, including costs of evidence of title in connection with the sale,
Trustee shall apply the proceeds of sale to payment of all sums expended under
the terms hereof, not then repaid, with accrued interest at the highest rate of
interest then in effect under any Debt Instrument, all other sums then secured
hereby, and the remainder, if any, to the person or persons legally entitled
thereto.
7
(d) Trustee may postpone the sale of all or any portion of the
Mortgaged Property by public announcement at the time and place first fixed for
sale, and from time to time thereafter may postpone such sale by public
announcement at the time and place fixed by the preceding postponement, and
without further notice make such sale at the time fixed by the last
postponement, or may, in its discretion, give a new notice of sale.
(e) Upon any sale pursuant to this Section, Trustor shall be
completely and irrevocably divested, to the maximum extent permitted by law, of
all its right, title, interest, claims and demands at law or in equity in and to
the Mortgaged Property sold or any part thereof, and such sale shall be a
perpetual bar both at law and in equity against Trustor and any and all other
persons claiming any such right, title, interest, claims or demands by, through
or under Trustor.
4.4. Rescission of Notice of Default. Beneficiary from time to time
-------------------------------
before Trustee's sale, may rescind any notice of default and of election to
cause the Mortgaged Property to be sold by executing and delivering to Trustee a
written notice of such rescission, which notice, when recorded, shall also
constitute a cancellation of any prior declaration of default and demand for
sale. The exercise by Beneficiary of such right of rescission shall not
constitute a waiver of any breach or default then existing or subsequently
occurring or impair the right of Beneficiary to execute and deliver to Trustee,
as provided above, other declarations of default and demand for sale, notices of
default and of election to cause the Mortgaged Property to be sold to satisfy
the obligations hereof, or otherwise affect any provision, agreement, covenant
or condition contained in this Deed of Trust or any other Loan Document or any
of the rights, obligations or remedies of Trustor or Beneficiary under this Deed
of Trust.
ARTICLE V
MISCELLANEOUS
5.1. Fixture Filing. This Deed of Trust constitutes and is filed as
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a fixture filing under Section 9402 of the Uniform Commercial Code. Certain of
the Mortgaged Property consists of goods that are or are to become fixtures upon
the Real Property, and this Deed of Trust is to be recorded in the Official
Records of the County in which the Real Property is located. This Deed of Trust
shall remain in effect as a fixture filing until released or satisfied of record
or its effectiveness otherwise terminates as to the Real Property. Memorex
Drive LLC is the record owner of the Real Property.
5.2. Waiver of Offsets and Other Matters. All sums payable by
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Trustor hereunder shall be paid without notice, demand, or defense and without
right of counterclaim, setoff, deduction, abatement, suspension, deferment,
diminution or reduction, all of which rights now or hereafter conferred by law
are hereby waived by Trustor. Without limiting the generality of the foregoing,
Trustor also waives, to the fullest extent permitted by law: (a) any right to
require Beneficiary or Trustee, prior to or as a condition to the enforcement of
this Deed of Trust, to proceed against or exhaust any other security for the
obligations secured hereby or pursue any other remedy whatsoever; and (b) any
defense arising by reason of: (i) any disability or other defense of Trustor
with respect to the obligations secured hereby; (ii) the unenforceability or
invalidity of any security for the Secured Obligations; or the lack of
perfection or failure of priority of any security for the Secured Obligations;
(iii) the cessation from any cause whatsoever of the personal liability of
Trustor (other than by reason of the full payment and discharge of all Secured
Obligations); or (iv) any act or omission of Trustee, Beneficiary or others that
directly or indirectly results in or aids in the discharge or release of Trustor
or the Secured Obligations or any other security therefor by operation of law or
otherwise.
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5.3. Governing Law. This Deed of Trust shall be governed by and
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construed and enforced under the laws of the state or other jurisdiction, the
laws of which are specified in the Loan Agreement as governing the construction
and/or enforcement of the Loan Agreement; PROVIDED, HOWEVER, that the laws of
the state in which the Real Property is located shall govern procedural issues
pertaining to any foreclosure under this Deed of Trust.
5.4. Time of the Essence. Time is of the essence in the performance
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of each provision of this Deed of Trust.
5.5. Additional Powers of Beneficiary. Without affecting the
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liability of any other person liable for the payment of or performance of any of
the Secured Obligations, and without affecting the lien or charge of this Deed
of Trust upon any portion of the Mortgaged Property not then or theretofore
released as security for the full amount of all unpaid Secured Obligations,
Beneficiary may, at any time, and from time to time, without notice to or
consent of Trustor: (a) release the obligations of any person primarily or
secondarily liable for payment or performance of any Secured Obligations; (b)
extend the maturity date of any Secured Obligations or accept partial payments
thereon; (c) grant forbearances; (d) accept new or additional instruments,
documents or agreements in exchange for or relative to any of the Loan Documents
or the Secured Obligations; (e) release or reconvey, or cause to be released or
reconveyed, any or all of the Mortgaged Property; (f) take or release any other
or additional security for any Secured Obligations; or (g) consent to the
transfer of any security.
5.6. Reconveyance by Trustee. Upon written request of Beneficiary
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and upon payment by Trustor of Trustee's fees for all services involved in the
preparation, execution and recordation of the reconveyance, Trustee shall
reconvey the Mortgaged Property or portions thereof then held hereunder, in
whole or in part, as designated by Beneficiary and in such portions as
designated by Beneficiary to Trustor, to the person or persons legally entitled
thereto, which reconveyance shall be without recourse or warranty. The recitals
in such reconveyance of any matters or facts shall be conclusive proof of the
truthfulness thereof. The grantee in any reconveyance may be described as "the
person or persons legally entitled thereto." Neither Beneficiary nor Trustee
shall have any duty to determine the rights of persons claiming to be rightful
grantees of any release.
5.7. Costs and Expenses; Actions by Trustee and/or Beneficiary to
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Preserve Property. Every provision of this Deed of Trust that imposes upon
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Trustor an obligation to perform an act, or embodying an agreement by Trustor to
perform an act, shall be construed as obligating Trustor to pay all costs and
expenses relating thereto. Should Trustor fail to make any payment or to do any
act as herein provided, Beneficiary and/or Trustee, may, but shall not be
obligated to, make or do the same in such manner and to such extent as either
may deem necessary to protect the security hereof, all without notice to or
demand upon Trustor, without releasing Trustor from any obligation hereof or
secured hereby, and within such times and in such manner as Beneficiary or
Trustee may deem reasonable. All sums advanced in taking such action, together
with all other costs, fees and expenses incurred by Beneficiary or Trustee
hereunder (including costs of evidence of title, court costs, appraisals,
surveys and attorneys' fees), shall bear interest at the highest rate of
interest then in effect under any Debt Instrument from the date advanced until
paid in full, be payable in full, together with interest thereon, upon demand by
Beneficiary, and be added to the Secured Obligations. Neither the reservation
nor any exercise of the foregoing rights shall be construed to excuse Trustor's
failure to perform fully and when due all of Trustor's obligations under this
Deed of Trust or to prevent any such failure from constituting an Event of
Default.
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5.8. Partial or Late Payment. The acceptance by Beneficiary of any
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sum after the same is due shall not constitute a waiver of the right either to
require prompt payment, when due, of all other sums then and thereafter secured
hereby. The acceptance by Beneficiary of any sum or sums in an amount less than
the sums then due shall be deemed an acceptance on account only and upon the
condition that it shall not constitute a waiver of the Event of Default existing
by virtue of Trustor's failure to pay the entire sum then due, or of
Beneficiary's right to declare or maintain an acceleration by virtue of such
Event of Default. Trustor's failure to pay the entire sum then due shall be and
continue to be an Event of Default notwithstanding such acceptance of such
amount on account, and Beneficiary and Trustee shall be at all times thereafter
until the entire sum then due shall have been paid, and notwithstanding the
acceptance by Beneficiary thereafter of further sums on account, or otherwise,
entitled to exercise all rights in this Deed of Trust conferred upon them or
either of them upon the occurrence of an Event of Default.
5.9. Substitution of Trustee. Beneficiary may, from time to time, by
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a written instrument executed and acknowledged by Beneficiary and recorded in
the County in which the Mortgaged Property is located, and by otherwise
complying with the provisions of California Civil Code Section 2934a or any
successor statute, substitute a successor or successors to the Trustee named
herein or acting hereunder. Without conveyance of the Mortgaged Property, a
successor Trustee shall succeed to all the title, powers and duties conferred
upon the Trustee herein and by applicable law.
5.10. Successors and Assigns. This Deed of Trust applies to, inures
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to the benefit of, and binds all parties hereto, their heirs, legatees,
devisees, administrators, executors, successors and assigns. The term
"Beneficiary" shall mean the owner and holder (including a pledgee) of the Debt
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Instruments, whether or not named as Beneficiary herein. The term "Trustor"
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shall mean all parties executing this Deed of Trust as Trustor, their respective
heirs, legatees, devisees, administrators, executors, successors in interest and
assigns to the extent permitted by this Deed of Trust, provided that neither
Beneficiary nor Trustee shall be obligated to give notice of default or notice
of sale hereunder to any person, firm or entity other than the Trustor shown on
the face page hereof.
5.11. Nonliability of Beneficiary.
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(a) Beneficiary neither undertakes nor assumes any responsibility or
duty to Trustor or any third party to select, review, inspect, examine,
supervise, pass judgment upon or inform Trustor or any third party of the
quality, adequacy or suitability of any plans, specifications, construction
contracts, architects, contractors or other matters or items that Beneficiary
has the right to review, inspect, examine or approve under this Deed of Trust.
Any such selection, review, inspection, examination and the like is solely for
the purpose of (i) determining whether or not Trustor's obligations under this
Deed of Trust are being properly discharged and (ii) protecting Beneficiary's
security and preserving Beneficiary's rights under this Deed of Trust, and such
selection, review, inspection, examination and the like shall not render
Beneficiary liable to Trustor or any third party for the sufficiency, accuracy,
completeness, or legality thereof and shall not operate to waive any rights of
Beneficiary hereunder. Beneficiary owes no duty of care to protect or inform
Trustor or any third party against negligent, faulty, inadequate or defective
building or construction, or the existence of any environmentally hazardous
condition in any manner arising out of or related to the presence of any
hazardous materials on the Mortgaged Property, and Beneficiary shall not be
responsible or liable to Trustor or any other party therefor. Trustor shall make
or cause to be made such independent inspections as Trustor may desire for its
own protection. By accepting or approving anything required to be observed,
performed or fulfilled, or to be given to Beneficiary pursuant hereto,
Beneficiary shall not be deemed to have warranted or represented the
sufficiency, legality, effectiveness or legal effect of
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the same, or of any term, provision or condition thereof, and such acceptance or
approval thereof shall not be or constitute any warranty or representation to
anyone with respect thereto by Beneficiary.
(b) Prior to Beneficiary's actual entry upon and taking possession
of the Mortgaged Property, nothing in this Deed of Trust shall operate to impose
upon Beneficiary any responsibility for the operation, control, care, management
or repair of the Mortgaged Property, and the execution of this Deed of Trust by
Trustor shall constitute conclusive evidence that all responsibility for the
operation, control, care, management and repair of the Mortgaged Property is and
shall be that of Trustor prior to Beneficiary's actual entry and taking
possession.
(c) Beneficiary is hereby authorized to disclose (i) information
relating to hazardous materials to federal, state, or local authorities when
Beneficiary reasonably believes such disclosure to be required under applicable
law; and (ii) information concerning Trustor, the Mortgaged Property or the
Secured Obligations to any insurance agency or company, to any person or entity
proposing to acquire an interest in the Secured Obligations.
(d) Beneficiary shall not be liable, and is hereby released from
liability, for any act or omission of Trustee, except for such actions as may be
taken by Trustee at the express request of and in accordance with instructions
given by Beneficiary.
5.12. Cumulative Rights and Remedies; No Waiver. The rights, powers
-----------------------------------------
and remedies given to Beneficiary pursuant to this Deed of Trust shall be in
addition to, and shall not supersede or preempt, any rights, powers and remedies
given to Beneficiary by virtue of any applicable law. Every power or remedy
given by this Deed of Trust to Trustee or Beneficiary or to which either of them
may be otherwise entitled, may be exercised concurrently, independently, or
successively, in any order whatsoever, from time to time and as often as may be
deemed expedient by Trustee or Beneficiary and either of them may pursue
inconsistent remedies. No forbearance, failure or delay by Beneficiary in
exercising any right, power or remedy granted to Beneficiary hereunder shall be
deemed a waiver of such right, power or remedy, nor shall any such forbearance,
failure or delay preclude the further exercise of such right, power or remedy,
or any other right, power or remedy; and every such right, power and remedy of
Beneficiary shall continue in full force and effect until such right, power or
remedy is explicitly waived by Beneficiary in writing. The consent or approval
by Beneficiary to or of any act by Trustor requiring further consent or approval
shall not be deemed to waive or render unnecessary the consent or approval to or
of any subsequent similar act.
IN WITNESS WHEREOF, Trustor has executed this Deed of Trust as of the
date first above written.
CENTAUR PHARMACEUTICALS, INC.,
a Delaware corporation
By: /s/ Xxxxxx X. Xxxxxx
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Name: Xxxxxx X. Xxxxxx
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Title: CFO & Treasurer
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[NOTARY SEAL]
12
EXHIBIT A
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DESCRIPTION OF THE REAL PROPERTY
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All that certain real property situate in the City of Santa Xxxxx, County of
Santa Xxxxx, State of California, described as follows:
PARCEL ONE:
Parcel 2, as shown on that Parcel Map filed for record in the office of the
Recorder of the County of Santa Xxxxx, State of California on September 25,
1997, in Book 694 of Maps, pages 28 and 29.
PARCEL TWO:
An easement for private ingress and egress over Parcel 1, as shown and
designated and delineated as "Private Ingress, Egress Easement" on the Map filed
September 25, 1997, in Book 694 of Maps, pages 28 and 29.
PARCEL THREE:
An easement for the purpose of ingress and egress, installation, maintenance,
repair and replacement of electrical systems, including conduits, cables,
vaults, splice boxes, transformers and switches, as conveyed by deed recorded
January 25, 1989 in Book K 829, page 91, Official Records. Said easement being
more particularly described as follows:
Commencing at the most Southerly corner of Parcel D, as said Parcel is shown on
the certain Parcel Map recorded in Book 320 of Maps, at page 56, Santa Xxxxx
County Records; thence along the Easterly boundary of said Parcel D, N. 00
degrees 12 minutes 36 seconds E. 40.00 feet to the true point of beginning.
Said course is also the Easterly boundary of an electric easement granted by
Memorex Corporation to the City of Santa Xxxxx by deed recorded January 12, 1983
in Book H 266 of Santa Xxxxx County Records, page 738; thence from the true
point of beginning along the Northerly boundary of said electric easement N. 89
degrees 47 minutes 24 seconds W. 30.00 feet; thence N. 00 degrees 12 minutes 36
seconds E. 2.10 feet; N. 61 degrees 21 minutes 19 seconds W. 34.18 feet; N. 00
degrees 12 minutes 36 seconds E. 16.82 feet; and S. 89 degrees 47 minutes 24
seconds E. 60.05 feet to the Easterly boundary of Parcel D hereinabove
described; thence along said Easterly boundary S. 00 degrees 12 minutes 36
seconds W. 35.20 feet to the true point of beginning.
ARB No. 000-0-000
APN 000-00-000 (portion)
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LEASEHOLD DEED OF TRUST
THIS LEASEHOLD DEED OF TRUST (this "Deed of Trust") is dated for
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reference purposes and made as of November 3, 1997, by CENTAUR PHARMACEUTICALS,
INC., a Delaware corporation ("Trustor"), with its executive office and
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principal place of business at 000 Xxxxxxx Xxxxxxx, Xxxxxxxxx, Xxxxxxxxxx 00000,
in favor of COMMONWEALTH LAND TITLE COMPANY, a California corporation
("Trustee"), for the benefit of FINOVA TECHNOLOGY FINANCE, INC., a Delaware
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corporation ("Beneficiary"), whose address is 00 Xxxxxxxxx Xxxxx, Xxxxxxxxxx,
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Connecticut 06032-3065.
RECITALS
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A. The Lease. Trustor is the sole holder of the lessee's rights,
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interest and estate (the "Leasehold Estate") arising under and created by that
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certain Standard Industrial/Commercial Multi-Tenant Lease - Gross dated May 30,
1997 (the "Lease"), by and between Memorex Drive LLC, as the "Lessor"
-----
("Lessor"), and Trustor, as the "Lessee," as amended and supplemented by that
------
certain Agreement Concerning Encumbrance of Leasehold Estate of even date
herewith between Lessor and Trustor (the "Agreement Concerning Encumbrance").
--------------------------------
The Lease demises premises (the "Premises") commonly identified as Suites 200
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and 300 in the building located at 0000 Xxxxxxx Xxxxx in the City of Santa
Xxxxx, County of Santa Xxxxx, State of California. The real property on which
such building is situated (the "Real Property") is owned by Lessor and is more
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particularly described in Exhibit A attached hereto and incorporated herein by
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this reference. Lessor and Trustor have executed a memorandum of the Lease and
caused such memorandum to be recorded on March 26, 1998, as Instrument No.
___________ in the Official Records of Santa Xxxxx County, California.
B. Loan Agreement; Credit Facility. Pursuant to a Master Loan and
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Security Agreement of even date herewith between Beneficiary and Trustor (such
Master Loan and Security Agreement, as it may be amended from time to time, is
hereinafter referred to the "Loan Agreement"), Beneficiary has agreed to
--------------
establish for Trustor a total credit facility in the aggregate principal amount
of up to $10,000,000.00 (the "Credit Facility"). The Credit Facility includes
---------------
one or more term loans evidenced by the Loan Agreement and the promissory note
or notes issued and to be issued by Trustor to Beneficiary pursuant to the Loan
Agreement (collectively, the "Debt Instruments"). The provisions of the Loan
----------------
Agreement, including those governing adjustments to the interest rates and
payment amounts and the accrual of interest, are incorporated herein by
reference.
GRANTING CLAUSE
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In consideration of the Credit Facility, and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Trustor hereby irrevocably grants, transfers and assigns to
Trustee, in trust for Beneficiary, with power of sale, under and subject to the
terms and conditions hereinafter set forth, for the benefit and security of
Beneficiary, all of Trustor's present and future estate, right, title and
interest in and to the Leasehold Estate, together with all of the following now
owned or hereafter acquired by Trustor (collectively, the "Mortgaged Property"):
------------------
(a) all fixtures and leasehold improvements now or hereafter located
in the Premises (but not including any equipment or installations that are
readily removable from the Premises without material damage to the Premises and
that constitute personal property in which a security interest may be
perfected by the filing of a financing statement in the Office of the California
Secretary of State);
1
(b) any and all plans, drawings and specifications for any leasehold
improvements now located on, or hereafter to be constructed on or in the
Premises, and all studies, data and drawings relating thereto (but not including
any information specifically related to the manufacture of Trustor's products);
Trustor's rights under all payment, performance or other bonds and in all
deposits and other security delivered to, by or for the benefit of Trustor in
connection with the construction of any such improvements; any and all
construction materials, supplies and equipment used or to be used in connection
with the construction of any such improvements, whether or not stored in the
Premises, and all warranties and guaranties relating thereto; any and all
contracts, subcontracts, agreements, and purchase orders with architects,
engineers, consultants, contractors, subcontractors, suppliers and materialmen
incidental to construction of any such improvements; and all reserves, deferred
payment deposits, cost savings and payments of any kind relating to the
construction of such improvements; and
(c) all insurance and insurance policies insuring the Mortgaged
Property or any activity thereon or part thereof or interest therein and all
proceeds of such insurance policies; all claims, awards, damages, causes of
action, judgments, recoveries, compensation and insurance proceeds arising on
account of injury or damage to or taking of all or any part of the Mortgaged
Property or for any loss or diminution in value of the Mortgaged Property; all
advance payments of insurance premiums made by Trustor with respect to the
Mortgaged Property; all deposits or security given by Trustor to third parties
with respect to the Mortgaged Property; all claims or demands with respect to
such deposits or security; and all right to refunds or rebates of any such
insurance premiums deposits or security.
ARTICLE I
OBLIGATIONS SECURED
1.1. Secured Obligations; Loan Documents. This Deed of Trust secures
-----------------------------------
the following indebtedness and obligations (collectively, the "Secured
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Obligations"): (a) the payment and performance of all of Trustor's indebtedness
-----------
and obligations, now or hereafter incurred by Trustor, under the Loan Agreement,
this Deed of Trust, and all other Loan Documents (as defined below in this
paragraph), including all principal due and all interest, prepayment charges,
late charges, loan fees and other charges at any time accruing or assessed under
the Loan Documents; (b) the payment of all sums advanced, paid or expended by
Beneficiary under or pursuant to any provision of this Deed of Trust or any
other Loan Document, or to protect the Mortgaged Property or any other security
for the Credit Facility, together with interest on each such advance, payment or
expenditure at the applicable rate of interest in effect under the applicable
Debt Instrument from the date of such advance, payment or expenditure until paid
in full; (c) any and all renewals, extensions, modifications, substitutions,
replacements and consolidations of the indebtedness and obligations described in
clauses (a) and (b) above; and (d) the payment of principal, interest and any
other indebtedness hereafter owing by Trustor under any additional loans made by
Beneficiary to Trustor that are evidenced by a promissory note or other writing
reciting that the same is secured hereby, including all prepayment charges, late
charges, loan fees and other charges accruing or assessed under such promissory
notes or other writings ("Additional Advances"). All of the foregoing amounts
-------------------
shall be secured by this Deed of Trust to the same extent and with the same
priority as the initial advance of proceeds of the Credit Facility made by
Beneficiary. The Loan Agreement and other Debt Instruments, this Deed of Trust,
and all other instruments, agreements, certificates and documents that evidence,
secure or set forth any of Trustor's obligations relating to the Credit Facility
and/or any Additional Advances, all as amended, modified, extended, renewed,
restated, and supplemented from time to time, and whether now in existence or
2
hereafter made or entered into, and whether or not secured by this Deed of
Trust, are hereinafter collectively referred to as the "Loan Documents."
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ARTICLE II
CERTAIN REPRESENTATIONS AND COVENANTS OF TRUSTOR
2.1. Actions Affecting Property; Duty to Protect Beneficiary and
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Security. Trustor shall, at its own expense, appear in, prosecute, defend and
--------
contest (with counsel approved by Beneficiary) any action or proceeding that
purports to materially and adversely affect the Mortgaged Property or any
portion thereof or Trustor's title thereto, the validity or priority of the lien
of this Deed of Trust, or the rights, powers, liabilities or obligations of
Beneficiary or Trustee as to the Mortgaged Property.
2.2. Transfer of Property. Upon any assignment, further encumbrance
--------------------
or other transfer of all or any part of or interest in the Mortgaged Property or
upon any subletting of all or any part of the Premises, or upon the dissolution,
liquidation or termination of Trustor, Beneficiary may, at its option, declare
all of the sums secured by this Deed of Trust to be immediately due and payable,
and if such sums are not paid in full within 10 days after written demand by
Beneficiary, Trustor shall be in default under this Deed of Trust and
Beneficiary may invoke all of the remedies available under this Deed of Trust
and the other Loan Documents as well as all additional remedies available at law
or in equity.
2.3. Performance of Lease Obligations. Trustor promptly shall pay
--------------------------------
when due all rents and other sums that Trustor is required to pay under the
terms of the Lease, and shall perform fully and when due each and all of
Trustor's other covenants and obligations under the Lease, and shall do all
other things necessary to preserve and keep unimpaired Trustor's rights under
the Lease.
2.4. Notices to Beneficiary. Trustor promptly shall notify
----------------------
Beneficiary in writing (a) of any default on the part of Lessor under the Lease,
or in the performance or observance of any of the terms, covenants, and
conditions on the part of Lessor to be kept and performed under the Lease, (b)
of the occurrence of any event that, with or without, the lapse of time or the
giving of notice, would constitute a default on the part of Lessor under the
Lease, or (c) the giving to or service upon Trustor by Lessor under the Lease of
any notice of default on the part of Trustor thereunder in the performance or
observance of any of the terms, covenants, and conditions to be kept, performed,
or observed by Trustor under the Lease, and Trustor shall cause a copy of any
notice furnished or delivered to Trustor by Lessor under the Lease to be
delivered forthwith to Beneficiary.
2.5. Surrender, Cancellation or Modification. Trustor shall not
---------------------------------------
surrender the Lease or the Premises or Trustor's Leasehold Estate, nor shall
Trustor terminate or cancel the Lease or, without Beneficiary's prior written
consent (which consent shall not be unreasonably withheld or delayed), amend or
supplement the Lease or consent to any of the foregoing. Any such termination,
cancellation and any such amendment or supplement made or consented to by
Trustor without Beneficiary's prior written consent shall be void and of no
effect.
2.6. Ability to Perform Trustor's Obligations. If at any time
----------------------------------------
Trustor fails to comply fully or in a timely manner with any of Trustor's
obligations under the Lease, and such failure materially threatens the value or
existence of Beneficiary's security under this Deed of Trust,
3
Beneficiary, but without obligation to do so and without notice to or demand
upon Trustor and without releasing Trustor from any obligation hereunder or
removing or waiving any corresponding default under this Deed of Trust, may
perform on behalf of Trustor any such obligations if Beneficiary acts reasonably
in so doing; provided that the foregoing shall not be construed to require
Beneficiary to incur any expense or take any action with respect to Trustor's
failure to comply with any of Trustor's obligations under the Lease. Upon
demand, Trustor shall pay to Beneficiary all costs and expenses (including, but
not limited to, legal fees and disbursements) paid or incurred by Beneficiary in
connection with performing such obligations. Any such costs or expenses not paid
by Trustor within five business days after demand shall be added to the
indebtedness secured by this Deed of Trust, shall bear interest at the rate that
is the sum of 5% percent per annum plus the highest interest rate then in effect
under the Debt Instruments (or the highest rate of interest permitted by law, if
less), and shall be secured by the lien of this Deed of Trust.
2.7. Bankruptcy of Trustor or Lessor. Trustor hereby unconditionally
-------------------------------
assigns, transfers, and sets over to Beneficiary, as additional security for the
Secured Obligations, all of Trustor's claims and rights to any damages arising
from any rejection of the Lease by Lessor pursuant to the United States
Bankruptcy Code (11 U.S.C. (S) 101 et seq. (the "Bankruptcy Code")). Any
-- --- ---------------
amounts received by Beneficiary as damages from Lessor's rejection of the Lease
shall be applied first to the payment of all reasonable costs and expenses
(including, but not limited to, reasonable legal fees and disbursements) paid or
incurred by Beneficiary in obtaining such damages and then to the payment of the
indebtedness and obligations secured by this Deed of Trust, in any order that
Beneficiary chooses. Upon demand, Trustor shall pay to Beneficiary all of the
foregoing reasonable costs and expenses not satisfied by the amounts received by
Beneficiary as damages. Any such costs or expenses not paid by Trustor upon
demand shall be added to the indebtedness secured by this Deed of Trust, shall
bear interest at the rate that is the sum of 5% percent per annum plus the
highest interest rate then in effect under the Debt Instruments (or the highest
rate of interest permitted by law, if less), and shall be secured by the lien of
this Deed of Trust.
(a) The lien of this Deed of Trust shall attach to all of Trustor's
rights and remedies at any time arising under or pursuant to Section 365(h) of
the Bankruptcy Code (11 U.S.C. (S) 365(h)) or other applicable law, including,
but not limited to, all of Trustor's rights to remain in possession of the
Premises.
(b) Trustor shall not elect to treat the Lease as terminated under
Section 365(h)(1) of the Bankruptcy Code (11 U.S.C. (S) 365(h)(1)) or other
applicable law without Beneficiary's prior written consent. Any such election
without Beneficiary's prior written consent shall be void and of no force or
effect.
(d) If, pursuant to Section 365(h)(2) of the Bankruptcy Code (11
U.S.C. (S) 365(h)(2)) or other applicable law, Trustor seeks to offset against
the rent reserved in the Lease the amount of any damages caused by the non-
performance by Lessor of any of Lessor's obligations under the Lease after the
rejection by Lessor of the Lease pursuant to the Bankruptcy Code, Trustor, prior
to making such offset, shall notify Beneficiary of Trustor's intent to do so,
setting forth the amounts proposed to be offset and the basis for such offset.
Beneficiary shall have the right to object to all or any part of such offset,
and, in the event of such objection, Trustor shall not offset any of the amounts
objected to by Beneficiary. If Beneficiary has failed to object to Trustor's
proposed offset within ten days after notice from Trustor in accordance with the
first sentence of this paragraph, Trustor may
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proceed to offset all or any part of the amounts set forth in Trustor's notice.
Neither Beneficiary's failure to object to Trustor's proposed offset, nor any
objection or other communication between Beneficiary and Trustor relating to
such offset shall constitute an approval of any such offset by Trustor. Trustor
shall defend and hereby indemnifies and holds Beneficiary harmless from and
against any and all claims, demands, actions, suits, proceedings, damages,
losses, costs, and expenses of every nature whatsoever (including, but not
limited to, legal fees and disbursements) arising from or relating to any offset
by Trustor against the rent reserved in the Lease.
(e) Trustor shall not commence any action, suit, proceeding, or case,
or file any application or make any motion, with respect to the Lease in any
such case under the Bankruptcy Code or other applicable law without
Beneficiary's prior written consent, which shall not be unreasonably withheld or
delayed.
(f) Trustor promptly shall notify Beneficiary of any information
Trustor receives about any filing by or against Lessor of a petition under the
Bankruptcy Code or other applicable law. Trustor shall provide all information
available to Trustor as of the date of such filing, including, but not limited
to, the court in which such petition was filed and the relief sought therein.
Trustor promptly shall deliver to Beneficiary copies of any and all notices,
summons, pleadings, applications, and other documents received by Trustor in
connection with any such petition and any proceedings relating to such petition.
(g) In the event there is filed by or against Trustor a petition
under the Bankruptcy Code or other applicable law, and Trustor, as lessee under
the Lease, shall determine to reject the Lease pursuant to Section 365(a) of the
Bankruptcy Code (11 U.S.C. (S) 365(a)) or other applicable law, Trustor shall
give Beneficiary not less than ten days' prior notice of the date on which
Trustor shall apply to the bankruptcy court for authority to reject the Lease.
Beneficiary shall have the right, but not the obligation, to serve upon Trustor
within such ten-day period a notice stating that (i) Beneficiary demands that
Trustor assume and assign the Lease to Beneficiary pursuant to Section 365 of
the Bankruptcy Code or other applicable law, and (ii) Beneficiary covenants to
cure or provide adequate assurances of future performance under the Lease. If
Beneficiary serves upon Trustor the notice described in the preceding sentence
of this paragraph, Trustor shall not seek authorization to reject the Lease and
shall comply with the demand provided for in clause (i) of the preceding
sentence within 30 days after the notice shall have been served upon Trustor,
subject to the performance by Beneficiary of the covenant provided for in clause
(ii) of the preceding sentence. Effective upon the entry of an order for relief
with respect to Trustor under the Bankruptcy Code, Trustor hereby assigns and
transfers to Beneficiary a non-exclusive right to apply to the bankruptcy court
for an order extending the period during which the Lease may be rejected or
assumed.
2.8. Representations and Warranties. Trustor represents and warrants
------------------------------
to Beneficiary that: (a) the copy of the Lease (including all attachments,
exhibits and amendments thereto) that Trustor has furnished to Beneficiary is a
complete and correct copy of the original; (b) the Lease has not been amended or
supplemented in any respect except as expressly stated in the recitals to this
Deed of Trust, and remains in full force and effect; (c) no uncured event of
default by either Trustor or Lessor exists under the Lease; (d) the Mortgaged
Property encumbered hereby includes the entire right, title and interest of the
"Lessee" under the Lease, and no person or entity other than Trustor (and, by
virtue of this Deed of Trust, Beneficiary) holds any such right, title or
interest.
5
Trustor owns or leases the Mortgaged Property free and clear of all security
interests, liens, claims, charges and equities of any nature other than the lien
hereof and the rights of Beneficiary under this Deed of Trust; (e) Trustor is
not bound by, and shall not enter into, any agreement or commitment that in any
manner or to any extent will or could prevent Trustor from performing any of its
obligations hereunder; and (f) all information with respect to the Mortgaged
Property that has been given to Beneficiary by Trustor or by any third party at
the direction of Trustor is accurate and contains no material misrepresentation
or omission. Should any representation or warranty made by Trustor in any Loan
Document prove to be untrue as of the date of this Deed of Trust, then
Beneficiary may declare that an "Event of Default" (as defined in Section 4.1)
---------------- -----------
exists. Trustor agrees to indemnify and hold Beneficiary free and harmless from
all liabilities, obligations, damages, causes of action, judgments, costs and
expenses (including without limitation attorneys' fees) that Beneficiary may
incur or suffer in connection with any breach by Trustor of any of Trustor's
representations or warranties.
ARTICLE III
ASSIGNMENT OF SUBLEASES
3.1. Assignment of Subleases. Trustor hereby assigns and transfers
-----------------------
to Beneficiary, as additional security for the Secured Obligations, all of
Trustor's rights and interests in, to and under any and all existing and future
subleases of all or any portion of the Premises ("Subleases"), whether written
---------
or oral, and any guarantees thereof, together with any and all extensions,
modifications, amendments, assignments and renewals thereof, and all cash or
other security deposited to secure performance by the sublessees of their
obligations thereunder, and all rents and other sums due and to become due
thereunder.
3.2. No Subleases. Trustor represents and warrants to Beneficiary
------------
that no Subleases are now in effect. Trustor shall not enter into any Sublease
without first obtaining Beneficiary's written consent.
ARTICLE IV
REMEDIES UPON DEFAULT
4.1. Events of Default. Any of the following shall constitute an
-----------------
"Event of Default": (a) Trustor's failure to make any payment of money in
----------------
accordance with the terms of this Deed of Trust; or (b) Trustor's failure to
perform fully and when due any other material covenant or obligation of Trustor
under this Deed of Trust when such obligation is required hereunder to be
performed and such failure is not fully cured within 10 days after Beneficiary
shall have given Trustor notice thereof; or (c) any of Trustor's representations
or warranties made in this Deed of Trust shall be untrue or misleading in any
material respect; or (d) the lien or security interest of this Deed of Trust
shall lose validity or priority; or (e) the occurrence of an event of default
under, or the institution of judicial or nonjudicial foreclosure or other
proceedings to enforce, any deed of trust or other lien or encumbrance of any
kind upon the Mortgaged Property or any portion thereof, whether senior or
junior in priority to the lien of this Deed of Trust; or (f) the occurrence of
an "Event of Default" as defined in the Loan Agreement.
4.2. Rights and Remedies. At any time after the occurrence of an
-------------------
Event of Default, Beneficiary or Trustee may do any one or more of the
following, in any order:
6
(a) With or without notice to Trustor, declare all Secured
Obligations to be immediately due and payable;
(b) With or without notice, and without releasing Trustor from its
obligations relative to such Event of Default, cure such Event of Default, and
the costs and expenses incurred by Beneficiary or Trustee in so doing shall
become a part of the Secured Obligations;
(c) Exercise any remedy afforded by this Deed of Trust;
(d) Commence and maintain an action or actions to foreclose this Deed
of Trust, to specifically enforce any rights of Beneficiary hereunder (including
rights with respect to possession and sale of any additional security for the
Secured Obligations), to enjoin any conduct that impairs or threatens to impair
the security of this Deed of Trust, or to obtain such other equitable remedies
as may be appropriate;
(e) Execute a written declaration of default and demand for sale, and
a written notice of default and election to cause the Mortgaged Property or any
part thereof to be sold by exercise of Trustee's power of sale under this Deed
of Trust, which notice shall be filed for record in the Official Records of the
county in which the Mortgaged Property is located;
(f) Resort to and realize upon the security for the Secured
Obligations and any other security now or hereafter held by Beneficiary in such
order as Trustee and Beneficiary or either of them may, in their sole
discretion, determine, concurrently or successively or in one or several
consolidated or independent judicial actions or nonjudicial proceedings; and
(g) Exercise any and all other remedies at law, including any action
for damages suffered by Beneficiary as a result of any Event of Default, or in
equity as may be available now or hereafter, as Beneficiary may elect.
4.3. Exercise of Trustee's Power of Sale.
-----------------------------------
(a) Should Beneficiary elect to have Trustee exercise the power of
sale herein contained, Beneficiary shall deliver to Trustee a written
declaration of default and demand for sale.
(b) Upon receipt of such items from Beneficiary, Trustee shall cause
to be recorded, published and/or delivered to Trustor such notice of default and
election to sell as may then be required by law and by this Deed of Trust.
After giving notice of default and notice of sale, and the lapse of such time
period as may be required by applicable law, Trustee may, without demand on
Trustor, at the time and place of sale fixed in the notice of sale, either as a
whole or in separate parcels or items or through two or more successive sales,
sell the Mortgaged Property or any part thereof at public auction to the highest
bidder for cash in lawful money of the United States payable at the time of
sale. Trustor shall have no right to direct the order in which the Mortgaged
Property is sold. Beneficiary may, in its sole discretion, designate the order
in which the Mortgaged Property shall be offered for sale or sold and determine
if the Mortgaged Property shall be sold in a single sale or in two or more
successive sales or in any other manner Beneficiary deems to be in its best
interests. If Beneficiary determines that the Mortgaged Property shall be sold
in two or more sales, Beneficiary may, at its option, cause such sales to be
conducted simultaneously or successively on the same day or
7
on different days and times and in such order as Beneficiary shall determine,
and no such sale shall extinguish or otherwise affect the lien of this Deed of
Trust or any part of the Mortgaged Property not then sold until all Secured
Obligations have been fully paid and discharged. Trustor shall pay the costs and
expenses of each such sale and any judicial proceeding in which any such sale
may be made. Trustee shall deliver to such purchaser its deed conveying the
portion of the Mortgaged Property so sold, but without any covenant or warranty,
express or implied. The recitals in such deed of any matters or facts shall be
conclusive proof of the truthfulness thereof. Any person, including Beneficiary,
may purchase at such sale.
(c) After deducting all costs, fees and expenses of Trustee and of
the sale, including costs of evidence of title in connection with the sale,
Trustee shall apply the proceeds of sale to payment of all sums expended under
the terms hereof, not then repaid, with accrued interest at the highest rate of
interest then in effect under any Debt Instrument, all other sums then secured
hereby, and the remainder, if any, to the person or persons legally entitled
thereto.
(d) Trustee may postpone the sale of all or any portion of the
Mortgaged Property by public announcement at the time and place first fixed for
sale, and from time to time thereafter may postpone such sale by public
announcement at the time and place fixed by the preceding postponement, and
without further notice make such sale at the time fixed by the last
postponement, or may, in its discretion, give a new notice of sale.
(e) Upon any sale pursuant to this Section, Trustor shall be
completely and irrevocably divested, to the maximum extent permitted by law, of
all its right, title, interest, claims and demands at law or in equity in and to
the Mortgaged Property sold or any part thereof, and such sale shall be a
perpetual bar both at law and in equity against Trustor and any and all other
persons claiming any such right, title, interest, claims or demands by, through
or under Trustor.
4.4. Rescission of Notice of Default. Beneficiary from time to time
-------------------------------
before Trustee's sale, may rescind any notice of default and of election to
cause the Mortgaged Property to be sold by executing and delivering to Trustee a
written notice of such rescission, which notice, when recorded, shall also
constitute a cancellation of any prior declaration of default and demand for
sale. The exercise by Beneficiary of such right of rescission shall not
constitute a waiver of any breach or default then existing or subsequently
occurring or impair the right of Beneficiary to execute and deliver to Trustee,
as provided above, other declarations of default and demand for sale, notices of
default and of election to cause the Mortgaged Property to be sold to satisfy
the obligations hereof, or otherwise affect any provision, agreement, covenant
or condition contained in this Deed of Trust or any other Loan Document or any
of the rights, obligations or remedies of Trustor or Beneficiary under this Deed
of Trust.
ARTICLE V
MISCELLANEOUS
5.1. Fixture Filing. This Deed of Trust constitutes and is filed as
--------------
a fixture filing under Section 9402 of the Uniform Commercial Code. Certain of
the Mortgaged Property consists of goods that are or are to become fixtures upon
the Real Property, and this Deed of Trust is to be recorded in the Official
Records of the County in which the Real Property is located. This Deed of Trust
shall remain in effect as a fixture filing until released or satisfied of record
or its effectiveness
8
otherwise terminates as to the Real Property. Memorex Drive LLC is the record
owner of the Real Property.
5.2. Waiver of Offsets and Other Matters. All sums payable by
-----------------------------------
Trustor hereunder shall be paid without notice, demand, or defense and without
right of counterclaim, setoff, deduction, abatement, suspension, deferment,
diminution or reduction, all of which rights now or hereafter conferred by law
are hereby waived by Trustor. Without limiting the generality of the foregoing,
Trustor also waives, to the fullest extent permitted by law: (a) any right to
require Beneficiary or Trustee, prior to or as a condition to the enforcement of
this Deed of Trust, to proceed against or exhaust any other security for the
obligations secured hereby or pursue any other remedy whatsoever; and (b) any
defense arising by reason of: (i) any disability or other defense of Trustor
with respect to the obligations secured hereby; (ii) the unenforceability or
invalidity of any security for the Secured Obligations; or the lack of
perfection or failure of priority of any security for the Secured Obligations;
(iii) the cessation from any cause whatsoever of the personal liability of
Trustor (other than by reason of the full payment and discharge of all Secured
Obligations); or (iv) any act or omission of Trustee, Beneficiary or others that
directly or indirectly results in or aids in the discharge or release of Trustor
or the Secured Obligations or any other security therefor by operation of law or
otherwise.
5.3. Governing Law. This Deed of Trust shall be governed by and
-------------
construed and enforced under the laws of the state or other jurisdiction, the
laws of which are specified in the Loan Agreement as governing the construction
and/or enforcement of the Loan Agreement; PROVIDED, HOWEVER, that the laws of
the state in which the Real Property is located shall govern procedural issues
pertaining to any foreclosure under this Deed of Trust.
5.4. Time of the Essence. Time is of the essence in the performance
-------------------
of each provision of this Deed of Trust.
5.5. Additional Powers of Beneficiary. Without affecting the
--------------------------------
liability of any other person liable for the payment of or performance of any of
the Secured Obligations, and without affecting the lien or charge of this Deed
of Trust upon any portion of the Mortgaged Property not then or theretofore
released as security for the full amount of all unpaid Secured Obligations,
Beneficiary may, at any time, and from time to time, without notice to or
consent of Trustor: (a) release the obligations of any person primarily or
secondarily liable for payment or performance of any Secured Obligations; (b)
extend the maturity date of any Secured Obligations or accept partial payments
thereon; (c) grant forbearances; (d) accept new or additional instruments,
documents or agreements in exchange for or relative to any of the Loan Documents
or the Secured Obligations; (e) release or reconvey, or cause to be released or
reconveyed, any or all of the Mortgaged Property; (f) take or release any other
or additional security for any Secured Obligations; or (g) consent to the
transfer of any security.
5.6. Reconveyance by Trustee. Upon written request of Beneficiary
-----------------------
and upon payment by Trustor of Trustee's fees for all services involved in the
preparation, execution and recordation of the reconveyance, Trustee shall
reconvey the Mortgaged Property or portions thereof then held hereunder, in
whole or in part, as designated by Beneficiary and in such portions as
designated by Beneficiary to Trustor, to the person or persons legally entitled
thereto, which reconveyance shall be without recourse or warranty. The recitals
in such reconveyance of any matters or facts shall be conclusive proof of the
truthfulness thereof. The grantee in any reconveyance may be
9
described as "the person or persons legally entitled thereto." Neither
Beneficiary nor Trustee shall have any duty to determine the rights of persons
claiming to be rightful grantees of any release.
5.7. Costs and Expenses; Actions by Trustee and/or Beneficiary to
------------------------------------------------------------
Preserve Property. Every provision of this Deed of Trust that imposes upon
-----------------
Trustor an obligation to perform an act, or embodying an agreement by Trustor to
perform an act, shall be construed as obligating Trustor to pay all costs and
expenses relating thereto. Should Trustor fail to make any payment or to do any
act as herein provided, Beneficiary and/or Trustee, may, but shall not be
obligated to, make or do the same in such manner and to such extent as either
may deem necessary to protect the security hereof, all without notice to or
demand upon Trustor, without releasing Trustor from any obligation hereof or
secured hereby, and within such times and in such manner as Beneficiary or
Trustee may deem reasonable. All sums advanced in taking such action, together
with all other costs, fees and expenses incurred by Beneficiary or Trustee
hereunder (including costs of evidence of title, court costs, appraisals,
surveys and attorneys' fees), shall bear interest at the highest rate of
interest then in effect under any Debt Instrument from the date advanced until
paid in full, be payable in full, together with interest thereon, upon demand by
Beneficiary, and be added to the Secured Obligations. Neither the reservation
nor any exercise of the foregoing rights shall be construed to excuse Trustor's
failure to perform fully and when due all of Trustor's obligations under this
Deed of Trust or to prevent any such failure from constituting an Event of
Default.
5.8. Partial or Late Payment. The acceptance by Beneficiary of any
-----------------------
sum after the same is due shall not constitute a waiver of the right either to
require prompt payment, when due, of all other sums then and thereafter secured
hereby. The acceptance by Beneficiary of any sum or sums in an amount less than
the sums then due shall be deemed an acceptance on account only and upon the
condition that it shall not constitute a waiver of the Event of Default existing
by virtue of Trustor's failure to pay the entire sum then due, or of
Beneficiary's right to declare or maintain an acceleration by virtue of such
Event of Default. Trustor's failure to pay the entire sum then due shall be and
continue to be an Event of Default notwithstanding such acceptance of such
amount on account, and Beneficiary and Trustee shall be at all times thereafter
until the entire sum then due shall have been paid, and notwithstanding the
acceptance by Beneficiary thereafter of further sums on account, or otherwise,
entitled to exercise all rights in this Deed of Trust conferred upon them or
either of them upon the occurrence of an Event of Default.
5.9. Substitution of Trustee. Beneficiary may, from time to time, by
-----------------------
a written instrument executed and acknowledged by Beneficiary and recorded in
the County in which the Mortgaged Property is located, and by otherwise
complying with the provisions of California Civil Code Section 2934a or any
successor statute, substitute a successor or successors to the Trustee named
herein or acting hereunder. Without conveyance of the Mortgaged Property, a
successor Trustee shall succeed to all the title, powers and duties conferred
upon the Trustee herein and by applicable law.
5.10. Successors and Assigns. This Deed of Trust applies to, inures
----------------------
to the benefit of, and binds all parties hereto, their heirs, legatees,
devisees, administrators, executors, successors and assigns. The term
"Beneficiary" shall mean the owner and holder (including a pledgee) of the Debt
-----------
Instruments, whether or not named as Beneficiary herein. The term "Trustor"
-------
shall mean all parties executing this Deed of Trust as Trustor, their respective
heirs, legatees, devisees, administrators, executors, successors in interest and
assigns to the extent permitted by this Deed of Trust, provided that neither
Beneficiary nor Trustee shall be obligated to give notice of default or notice
of sale hereunder to
10
any person, firm or entity other than the Trustor shown on the face page hereof.
5.11. Nonliability of Beneficiary.
---------------------------
(a) Beneficiary neither undertakes nor assumes any responsibility
or duty to Trustor or any third party to select, review, inspect, examine,
supervise, pass judgment upon or inform Trustor or any third party of the
quality, adequacy or suitability of any plans, specifications, construction
contracts, architects, contractors or other matters or items that Beneficiary
has the right to review, inspect, examine or approve under this Deed of Trust.
Any such selection, review, inspection, examination and the like is solely for
the purpose of (i) determining whether or not Trustor's obligations under this
Deed of Trust are being properly discharged and (ii) protecting Beneficiary's
security and preserving Beneficiary's rights under this Deed of Trust, and such
selection, review, inspection, examination and the like shall not render
Beneficiary liable to Trustor or any third party for the sufficiency, accuracy,
completeness, or legality thereof and shall not operate to waive any rights of
Beneficiary hereunder. Beneficiary owes no duty of care to protect or inform
Trustor or any third party against negligent, faulty, inadequate or defective
building or construction, or the existence of any environmentally hazardous
condition in any manner arising out of or related to the presence of any
hazardous materials on the Mortgaged Property, and Beneficiary shall not be
responsible or liable to Trustor or any other party therefor. Trustor shall make
or cause to be made such independent inspections as Trustor may desire for its
own protection. By accepting or approving anything required to be observed,
performed or fulfilled, or to be given to Beneficiary pursuant hereto,
Beneficiary shall not be deemed to have warranted or represented the
sufficiency, legality, effectiveness or legal effect of the same, or of any
term, provision or condition thereof, and such acceptance or approval thereof
shall not be or constitute any warranty or representation to anyone with respect
thereto by Beneficiary.
(b) Prior to Beneficiary's actual entry upon and taking possession
of the Mortgaged Property, nothing in this Deed of Trust shall operate to impose
upon Beneficiary any responsibility for the operation, control, care, management
or repair of the Mortgaged Property, and the execution of this Deed of Trust by
Trustor shall constitute conclusive evidence that all responsibility for the
operation, control, care, management and repair of the Mortgaged Property is and
shall be that of Trustor prior to Beneficiary's actual entry and taking
possession.
(c) Beneficiary is hereby authorized to disclose (i) information
relating to hazardous materials to federal, state, or local authorities when
Beneficiary reasonably believes such disclosure to be required under applicable
law; and (ii) information concerning Trustor, the Mortgaged Property or the
Secured Obligations to any insurance agency or company, to any person or entity
proposing to acquire an interest in the Secured Obligations.
(d) Beneficiary shall not be liable, and is hereby released from
liability, for any act or omission of Trustee, except for such actions as may be
taken by Trustee at the express request of and in accordance with instructions
given by Beneficiary.
5.12. Cumulative Rights and Remedies; No Waiver. The rights, powers
-----------------------------------------
and remedies given to Beneficiary pursuant to this Deed of Trust shall be in
addition to, and shall not supersede or preempt, any rights, powers and remedies
given to Beneficiary by virtue of any applicable law. Every power or remedy
given by this Deed of Trust to Trustee or Beneficiary or to which either of them
may be otherwise entitled, may be exercised concurrently, independently, or
successively, in
11
any order whatsoever, from time to time and as often as may be deemed expedient
by Trustee or Beneficiary and either of them may pursue inconsistent remedies.
No forbearance, failure or delay by Beneficiary in exercising any right, power
or remedy granted to Beneficiary hereunder shall be deemed a waiver of such
right, power or remedy, nor shall any such forbearance, failure or delay
preclude the further exercise of such right, power or remedy, or any other
right, power or remedy; and every such right, power and remedy of Beneficiary
shall continue in full force and effect until such right, power or remedy is
explicitly waived by Beneficiary in writing. The consent or approval by
Beneficiary to or of any act by Trustor requiring further consent or approval
shall not be deemed to waive or render unnecessary the consent or approval to or
of any subsequent similar act.
IN WITNESS WHEREOF, Trustor has executed this Deed of Trust as of the
date first above written.
CENTAUR PHARMACEUTICALS, INC.,
a Delaware corporation
By: /s/ Xxxxxx X. Xxxxxx
--------------------
Name: Xxxxxx X. Xxxxxx
------------------
Title: CFO & Treasurer
-----------------
[NOTARY SEAL]
12
EXHIBIT A
---------
DESCRIPTION OF THE REAL PROPERTY
--------------------------------
All that certain real property situate in the City of Santa Xxxxx, County of
Santa Xxxxx, State of California, described as follows:
PARCEL ONE:
Parcel 2, as shown on that Parcel Map filed for record in the office of the
Recorder of the County of Santa Xxxxx, State of California on September 25,
1997, in Book 694 of Maps, pages 28 and 29.
PARCEL TWO:
An easement for private ingress and egress over Parcel 1, as shown and
designated and delineated as "Private Ingress, Egress Easement" on the Map filed
September 25, 1997, in Book 694 of Maps, pages 28 and 29.
PARCEL THREE:
An easement for the purpose of ingress and egress, installation, maintenance,
repair and replacement of electrical systems, including conduits, cables,
vaults, splice boxes, transformers and switches, as conveyed by deed recorded
January 25, 1989 in Book K 829, page 91, Official Records. Said easement being
more particularly described as follows:
Commencing at the most Southerly corner of Parcel D, as said Parcel is shown on
the certain Parcel Map recorded in Book 320 of Maps, at page 56, Santa Xxxxx
County Records; thence along the Easterly boundary of said Parcel D, N. 00
degrees 12 minutes 36 seconds E. 40.00 feet to the true point of beginning.
Said course is also the Easterly boundary of an electric easement granted by
Memorex Corporation to the City of Santa Xxxxx by deed recorded January 12, 1983
in Book H 266 of Santa Xxxxx County Records, page 738; thence from the true
point of beginning along the Northerly boundary of said electric easement N. 89
degrees 47 minutes 24 seconds W. 30.00 feet; thence N. 00 degrees 12 minutes 36
seconds E. 2.10 feet; N. 61 degrees 21 minutes 19 seconds W. 34.18 feet; N. 00
degrees 12 minutes 36 seconds E. 16.82 feet; and S. 89 degrees 47 minutes 24
seconds E. 60.05 feet to the Easterly boundary of Parcel D hereinabove
described; thence along said Easterly boundary S. 00 degrees 12 minutes 36
seconds W. 35.20 feet to the true point of beginning.
ARB NO. 000-0-000
APN 000-00-000 (portion)
1
PROMISSORY NOTE
---------------
$8,000,000.00 April 22, 1998
FOR VALUE RECEIVED, the undersigned, Centaur Pharmaceuticals, Inc.
(the "Maker"), hereby promises to pay the amount of Eight Million and 00/100
Dollars ($8,000,000.00) to the order of FINOVA Technology Finance, Inc. (the
"Payee") in 48 monthly payments of principal and interest at the rate of 14.838%
per annum, the first payment of $248,955.97 on April 22, 1998, and the next 47
payments each of $219,280.00 on the first day of each succeeding month
commencing on June 1, 1998.
This Note is secured by the Loan and Security Agreement Number 1 dated
April 22, 1998 herewith between the Maker and the Payee and is subject to
acceleration upon a default in payment hereof or default under the Loan and
Security Agreement.
If any payment hereunder is not made when due, including any payment
due by reason of acceleration hereof, delinquency interest thereon shall accrue
until paid at the higher of (a) 1 1/2% per month or (b) 150% of the then current
Prime Lending Rate of Citibank, N.A., but not more than the highest lawful rate
on past due amounts. A late payment charge of Five Hundred Dollars ($500) shall
be paid by the Maker on any payment hereunder more than ten (10) business days
past due. Any payments made shall be first applied to late payment charges,
second to default interest, third to other interest and charges, if any, and
lastly to principal.
During the first year of the term of the Loan you may not prepay the
You shall have the right, on any regularly scheduled payment date occurring
after the first year of the Term of the Loan and upon not less than ninety (90)
days prior written notice to us, to prepay the outstanding principal balance of
the Loan in whole, but not in part, which the prepayment is made, as set forth
below:
Year in Term of Loan
which Prepayment is made: Percentage
------------------------ ----------
2 4%
3 2 1/2%
4 1%
In no event shall interest and late charges under this Note exceed
that permitted under applicable federal or state law. If interest and late
charges would exceed the maximum so permitted, the amount due on this Note shall
instead be computed at the maximum rate and manner permitted by applicable law,
any amount paid in excess of the maximum amount permitted by applicable law
shall be considered a payment of principal, the payments remaining due hereunder
shall be adjusted accordingly, and any remaining excess amount paid after all
such adjustments have been made shall be refunded.
1
All sums payable pursuant to this Note shall be payable in lawful
money of the United States of America to the Payee at 00 Xxxxxxxxx Xxxxx,
Xxxxxxxxxx, Xxxxxxxxxxx 00000-0000, or at such other address as the holder
hereof may designate, in immediately available funds and without deduction or
offset.
The Maker hereby waives diligence, presentment, demand, protest and
notice of protest, nonpayment and dishonor and any and all other notice with
respect to this Note.
The Maker agrees to pay all costs and expenses incurred by the holder
of this Note in connection with the collection and enforcement of this Note
including, without limitation, reasonable attorney's fees and expenses.
This Note shall be deemed a contract made at Farmington, Connecticut
and shall be governed by and construed in accordance with the law of New York,
other than conflicts of law rules.
Centaur Pharmaceuticals, Inc.
ATTEST:
[SEAL] By:/s/ Xxxxxx X. Xxxxxx
-----------------------
/s/ Xxxx X. Day
-------------------
Asst. Secretary
2
