MASTER SECURITY AGREEMENT Dated as of February ___, 2002 (“Agreement”)
EXHIBIT 10.8
Dated as of February ___, 2002 (“Agreement”)
THIS AGREEMENT is between General Electric Capital Corporation (together with its successors
and assigns, if any, “Secured Party”) and Engeneos, Inc. (“Debtor”). Secured Party has an office
at 000 Xxxxxxx 0 Xxxxx 00, Xxxxxxx, XX 00000. Debtor is a corporation organized and existing under
the laws of the State of Delaware. Debtor’s mailing address and chief place of business is 00 Xxxx
Xxxx Xxxx, Xxxxxxx, XX 00000.
1. CREATION OF SECURITY INTEREST.
Debtor grants to Secured Party, to successors and assigns, a security interest in and against
all property listed on any collateral schedules now or in the future annexed to or made a part of
this Agreement (“Collateral Schedule”), and in and therefor, and all insurance and/or other
proceeds thereof (all such property is individually and collectively called the “Collateral”).
This security interest is given to secure the payment and performance of all debts, obligations and
liabilities of any kind whatsoever of Debtor to Secured Party now existing or arising in the
future, including but not limited to the payment and performance of certain Promissory Note from
time to time identified on any Collateral Schedule (collectively “Notes” and each a “Note”), and
any renewals, extensions and modifications of such debts, obligations and liabilities (such Notes,
debts, obligations and liabilities are called the “Indebtedness”). Unless otherwise provided by
applicable law, notwithstanding anything to the contrary contained in this Agreement, to the extent
that Secured Party asserts a purchase money security interest in any items of Collateral (“PMSI
Collateral”); (i) the PMSI Collateral shall secure only that portion of the Indebtedness which has
been advanced by Secured Party to enable Debtor to purchase, or acquire rights in or the use of
such PMSI Collateral (the “PMSI Indebtedness”) and (ii) no other Collateral shall secure the PMSI
Indebtedness.
2. REPRESENTATIONS, WARRANTIES AND COVENANTS OF DEBTOR.
Debtor represents, warrants and covenants as of the date of this Agreement and use of the date
of each Collateral Schedule that:
(a) Debtor’s exact legal name is as set forth in the preamble of this Agreement and Debtor is
and will remain duly organized existing and in good standing under the laws of the State set forth
in the preamble of this Agreement, has its chief executive offices at the location specified in the
preamble and is, and will remain, duly qualified and licensed in every jurisdiction whenever
necessary to carry on its business and operation;
(b) Debtor has adequate power and capacity to enter into, and to perform its obligations under
this Agreement, each Note and any other documents evidencing, or given in connection with, any of
the Indebtedness (all of the foregoing are called the “Debt Document”);
(c) This Agreement and the other Debt Documents have been duly authorized, executed and
delivered by Debtor and constitute legal, valid and binding agreements enforceable in accordance
with their terms, except in the extent that the enforcement of remedies may be limited under
applicable bankruptcy and insolvency laws;
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(d) No approval, consent or withholding of objections is required from any governmental
authority or instrumentality with respect to the entry into, or performance by Debtor of any of the
Debt Documents, except any already obtained;
(e) The entry into, and performance by, Debtor of the Debt Documents will not (i) violate any
of the organizational documents of Debtor or any judgment, order, law or regulation applicable to
Debtor, or (ii) result in any breach of or constitute a default under any contract to which Debtor
is a party, or result in the creation of any lien, claim or encumbrance on any of Debtor’s property
(except for liens in favor of Secured Party) pursuant to any indenture, mortgage, deed of trust,
bank loan, credit agreement, or other agreement or instrument to which Debtor is a party;
(f) There are no suits or proceedings pending in court or before any commission, board or
other administrative agency against or affecting Debtor which could, in the aggregate, have a
material adverse effect on Debtor, its business or operations, or its ability to perform its
obligations under the Debt Documents, nor does Debtor have reason to believe that any such suits or
proceedings are threatened;
(g) All financial statements delivered to Secured Party in connection with the indebtedness
have been prepared in accordance with generally accepted accounting principles, and since the date
of the most recent financial statement, there has been no material adverse change in Debtors
financial conditions;
(h) The Collateral is not, and will not be, used by Debtor for personal, family or household
purposes;
(i) The Collateral is, and will remain, in good condition and repair and Debtor will not be
negligent in its care and use;
(j) Debtor is, and will remain, the sole and lawful owner, and in possession of the
Collateral, and has the sole right and lawful authority to grant the security interest described in
this Agreement; and
(k) The Collateral is, and will remain, free and clear of all liens, claims and encumbrances
of any kind whatsoever, except for (i) liens in favor of Secured Party, (ii) liens for taxes not
yet due or for taxes being contested in good faith and which do not involve, in the judgment of
Secured Party, any risk of the sale, forfeiture or loss of any of the Collateral, and (iii)
inchoate materialmen’s, mechanic’s, repairmen’s and similar liens arising by operation of law in
the normal course of business for amounts which are not delinquent (all of such liens are called
“Permitted Liens”).
3. COLLATERAL.
(a) Until the declaration of any default, Debtor shall remain in possession of the Collateral;
except that Secured Party shall have the right to possess (i) any chattel paper or instrument that
constitutes a part of the Collateral, and (ii) any other Collateral in which Secured Party’s
security interest may be perfected only by possession. Secured Party may inspect any of the
collateral during normal business hours after giving Debtor reasonable prior notice. If Secured
Party asks, Debtor will promptly notify Secured party in writing of the location of any Collateral.
(b) Debtor shall (i) use the Collateral only to its trade or business, (ii) maintain all of
the Collateral in good operating order and repair, normal wear and tear excepted, (iii) use and
maintain the Collateral only in compliance with manufacturers recommendations and all applicable
laws, and (iv) keep all of the Collateral free and clear of all liens, claims and encumbrances
(except for Permitted Liens).
(c) Secured Party does not authorize and Debtor agrees it shall not (i) part with possession
of any of the Collateral (except to Secured Party or for maintenance and repair), (ii) remove any
of the Collateral from the
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continental United States, or (iii) sell, rent, lease, mortgage, license, grant a security
interest in or otherwise transfer or encumber (except for Permitted Liens) any of the Collateral.
(d) Debtor shall pay promptly when due all taxes, license fees, assessments and public and
private charges levied or assessed on any of the Collateral, on its use, or on this Agreement or
any of the other Debt Documents. At its option, Secured Party may discharge taxes, liens, security
interests or other encumbrances at any time levied or placed on the Collateral and may
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pay for the maintenance, insurance and preservation of the Collateral and effect compliance with
the terms of this Agreement or any of the other Debt Documents. Debtor agrees to reimburse Secured
Party, on demand, all costs and expenses incurred by Secured Party in connection with such payment
or performance and agrees that such reimbursement obligation shall constitute indebtedness.
(e) Debtor shall, at all times, keep accurate and complete records of the Collateral, and
Secured Party shall have the right to inspect and make copies of all of Debtor’s books and records
relating to the Collateral during normal business hours, after giving Debtor reasonable prior
notice.
(f) Debtor agrees and acknowledges that any third person who may at any time possess all or
any portion of the Collateral shall be deemed to hold, and shall hold, the Collateral as the agent
of, and as pledge holder for, Secured party. Secured Party may at any time give notice to any
third person described in the preceding sentence that such third person is holding the Collateral
as the agent of, and as pledge holder for, the Secured Party.
4. INSURANCE.
(a) Debtor shall at all times bear the entire risk of any loss, theft, damages to, or
destruction of, any of the Collateral from any cause whatsoever.
(b) Debtor agrees to keep the Collateral insured against loss or damage by fire and extended
coverage perils, theft, burglary, and for any or all Collateral which are vehicles, for risk of
loss by collision, and if requested by Secured Party, against such other risks as Secured Party may
reasonably require. The insurance coverage shall be in an amount no less than the full replacement
value of the Collateral, and deductible amounts, insurers and policies shall be acceptable to
Secured Party. Debtor shall deliver to Secured Party policies or certificates of insurance
evidencing such coverage. Each policy shall name Secured Party as a loss payee, shall provide for
coverage to Secured Party regardless of the breach by Debtor of any warranty or representation made
therein, shall not be subject to co-insurance, and shall provide that coverage may not be canceled
or altered by the insurer except upon thirty (30) days prior written notice to Secured Party.
Debtor appoints Secured Party as its attorney-in-fact to make proof of loss, claim for insurance
and adjustments with insurers, and to receive payment of and execute or endorse all documents,
checks or drafts in connection with insurance payments. Secured Party shall not act as Debtor’s
attorney-in-fact unless Debtor is in default. Proceeds of insurance shall be applied, at the
option of Secured Party, to repair or replace the Collateral or to reduce any of the indebtedness.
5. REPORTS.
(a) Debtor shall promptly notify Secured Party of (i) any change in the name of Debtor, (ii)
any change in the state of its incorporation or registration, (iii) any relocation of its chief
executive offices, (iv) any relocation of any of the Collateral, (v) any of the Collateral being
lost, stolen, missing, destroyed, materially damages or worn out, or (vi) any lien, claim or
encumbrance other than Permitted Liens attaching in or being made against any of the Collateral.
(b) Debtor will deliver to Secured Party Debtor’s complete and financial statements, certified
by a recognized firm of certified public accountants, within ninety (90) days of the close of each
fiscal year of Debtor. If Secured Party requests, Debtor will deliver to Secured Party copies of
Debtor’s quarterly financial reports certified by Debtor’s chief financial officer, within ninety
(90) days after the close of each of Debtor’s fiscal quarter. Debtor will deliver to Secured Party
copies of all Forms 10-K and 10-Q, if any, within 30 days after the dates on which they are filed
with the Securities and Exchange Commission.
6. FURTHER ASSURANCES.
(a) Debtor shall, upon request of Secured Party, furnish to Secured Party such further
information, execute and deliver to Secured Party such documents and instruments (including,
without limitations, Uniform
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Commercial Code financing statements) and shall do such other acts and things as Secured Party
may at any time request relating to the perfection or protection of the security interest created
by this Agreement or for the purpose of carrying out the intent of this Agreement.
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Without limiting the foregoing, Debtor shall cooperate and do all acts deemed necessary or
advisable by Secured Party to continue in Secured Party a perfected first security interest in the
collateral, and shall obtain and furnish to Secured Party any subordinations, releases, landlord
waivers, lessor waivers, mortgagee waivers, or control agreement, and similar documents as may be
from time to time requested by, and in form and substance satisfactory to, Secured Party.
(b) Debtor authorizes Secured Party to file a financing statement and amendments thereto
describing the Collateral and containing any other information required by the applicable Uniform
Commercial Code. Debtor irrevocably grants to Secured Party the power to sign Debtor’s name and
generally to act on behalf of Debtor to execute and file applications for title, transfers of
title, financing statements, notices of lien and other documents pertaining to any or all of the
Collateral; this power is coupled with Secured Party’s interest in the Collateral. Debtor shall,
if any, certificate showing the lien of this Agreement with respect to the Collateral. Debtor
ratifies its prior authorization for Secured Party to file financing statements and amendments
thereto describing the Collateral and containing any other information required by the Uniform
Commercial Code if filed prior to the date hereof.
(c) Debtor shall indemnify and defend the Secured Party, its successors and assigns, and their
respective directors, officers and employees, from and against all claims, actions and suits
(including, without limitation, related attorneys’ fees) of any kind whatsoever arising, directly
or indirectly, in connection with any of the Collateral.
7. DEFAULT AND REMEDIES.
(a) Debtor shall be in default under this Agreement and each of the other Debt Documents if:
(i) Debtor breaches its obligations to pay when due any installment or other amount due or
coming due under any of the Debt Documents;
(ii) Debtor, without the prior written consent of Secured Party, attempts to or does sell,
rent, lease, license, mortgage, grant a security interest in, or otherwise transfer or encumber
(except for Permitted Liens) any of the Collateral;
(iii) Debtor breaches any of its insurance obligations under Section 4;
(iv) Debtor breaches any of its other obligations under any of the Debt Documents and fails to
cure that breach within thirty (30) days after written notice from Secured Party;
(v) Any warranty, representation or statement made by Debtor in any of the Debt Documents or
otherwise connection with any of the indebtedness shall be false or misleading in any material
respect;
(vi) Any of the Collateral is subjected to attachment, execution, levy, seizure or
confiscation in any legal proceeding or otherwise, or if any legal or administrative proceeding is
commenced against Debtor or any of the Collateral which in the good faith judgment of Secured Party
subjects any of the Collateral to a material risk of attachment, execution, levy, seizure or
confiscation and no bond is posted or protective order obtained to negate such risk;
(vii) Debtor breaches or is in default under any other agreement between Debtor and Secured
Party;
(viii) Debtor or any guarantor or other obligor for any of the indebtedness (collectively
“Guarantor”) dissolves, terminates its existence, becomes insolvent or ceases to do business as a
going concern;
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(ix) If Debtor or any Guarantor is a natural person, Debtor or any such Guarantor dies or
becomes incompetent;
(x) A receiver is appointed for all or of any part of the property of Debtor or any Guarantor,
or Debtor or any Guarantor makes any assignment for the benefit of creditors;
(xi) Debtor or any Guarantor file a petition under any bankruptcy, insolvency or similar law,
or any such petition is filed against Debtor or any Guarantor and is not dismissed within
forty-five (45) days; or
(xii) Debtor’s improper filing of an amendment or termination statement relating to a filed
financing statement describing the Collateral.
(b) If Debtor is in default, the Secured Party, at its option, may declare any or all of the
indebtedness to be immediately due and payable, without demand or notice to Debtor or any
Guarantor. The accelerated and liabilities shall bear interest (both before and after any
judgment) until paid in full at the lower of eighteen percent (18%) per annum or the maximum rate
not prohibited by applicable law.
(c) After default, Secured Party shall have all of the rights and remedies of a Secured Party
under the Uniform Commercial Code, and under any other applicable law. Without limiting the
foregoing, Secured Party shall have the right to (i) notify any account debtor of Debtor or any
obligor on any instrument which constitutes part of the Collateral or make payment to the Secured
Party, (ii) with or without legal process, enter any premises where the Collateral may be and take
possession of and remove the Collateral from the premises or store it on the premises, (iii) sell
the Collateral at public or private sale, in whole or in part, and have the right to bid and
purchase at said sale, or (iv) lease or otherwise dispose of all or part of the Collateral,
applying proceeds from such disposition to the obligations then in default. If requested by
Secured Party, Debtor shall promptly assemble the Collateral and make it available to Secured Party
at a place to be designed by Secured Party which is reasonably convenient to both parties. Secured
Party may also render any or all of the Collateral unusable at the Debtor’s premises and may
dispose of such Collateral on such premises without liability for rent or costs. Any notice that
Secured Party is required to give to Debtor under the Uniform Commercial Code of the time and place
of any public sale or the time after which any private sale or other intended disposition of the
Collateral is to be made shall be deemed to constitute reasonable notice if such notice is given to
the last known address of Debtor at least five (5) days prior to such action.
(d) Proceeds from any sale or lease or other disposition shall be applied: first, to all costs
of repossession, storage, and disposition including without limitation attorneys’, appraisers’, and
auctioneers’ fees; second, to discharge the obligations then in default; third, to discharge any
other indebtedness of Debtor to Secured party, whether as obligor, endorser, guarantor, surety or
indemnitor; fourth, to expenses incurred in paying or settling lien and claims against the
Collateral; and lastly, to Debtor, if there exists any surplus. Debtor shall remain fully liable
for any deficiency.
(e) Debtor agrees to pay all reasonable attorneys’ fees and other costs incurred by Secured
Party in connection with the enforcement, assertion, defense or preservation of Secured Party’s
rights and remedies under this Agreement, or if prohibited by law, such lesser sum as may be
permitted. Debtor further agrees that such fees and costs shall constitute indebtedness.
(f) Secured Party’s rights and remedies under this Agreement or otherwise arising are
cumulative and may be exercised singularly or concurrently. Neither the failure nor any delay on
the part of the Secured Party to exercise any right, power or privilege under this Agreement shall
operate as a waiver, nor shall any single or partial exercise of any right, power or privilege
preclude any other or further exercise of that or any other right, power or privilege. SECURED
PARTY SHALL NOT BE DEEMED TO HAVE WAIVED ANY OF ITS RIGHTS UNDER THIS AGREEMENT OR UNDER ANY OTHER
AGREEMENT, INSTRUMENT OR PAPER SIGNED BY DEBTOR UNLESS SUCH WAIVER IS EXPRESSED IN WRITING AND
SIGNED BY SECURED PARTY. A
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waiver on any one occasion shall not be construed as a bar to or waiver of any right or remedy
on any future occasion.
(g) DEBTOR AND SECURED PARTY UNCONDITIONALLY WAIVE THEIR RIGHTS TO A JURY TRIAL OF ANY CLAIM
OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT, ANY OF THE OTHER DEBT DOCUMENTS,
ANY OF THE INDEBTEDNESS SECURED HEREBY, ANY DEALINGS BETWEEN DEBTOR AND SECURED PARTY RELATING TO
THE SUBJECT MATTER OF THIS TRANSACTION OR ANY RELATED TRANSACTIONS, AND/OR THE RELATIONSHIP THAT IS
BEING ESTABLISHED BETWEEN DEBTOR AND SECURED PARTY. THE SCOPE OF THIS WAIVER IS INTENDED TO BE ALL
ENCOMPASSING OF ANY AND ALL DISPUTES THAT MAY BE FILED IN ANY COURT. THIS WAIVER IS IRREVOCABLE.
THIS WAIVER MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING. THE WAIVER ALSO SHALL APPLY TO ANY
OTHER DEBT DOCUMENTS, OR TO ANY OTHER DOCUMENTS OR AGREEMENTS RELATING TO THIS TRANSACTION OR ANY
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RELATED TRANSACTION. THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.
8. MISCELLANEOUS.
(a) This Agreement, any Note and/or any of the other Debt Documents may be assigned, in whole
or in part, by Secured Party without notice to Debtor, and Debtor agrees not to assert against any
such assignee, or assignee’s assigns, any defense, set off, recoupment claim or counterclaim which
Debtor has or may at any time have against Secured Party for any reason whatsoever. Debtor agrees
that if Debtor receives written notice of an assignment from Secured Party, Debtor will pay all
amounts payable under any assigned Debt Documents to such assignee or as instructed by Secured
Party. Debtor also agrees to confirm in writing receipt of the notice of assignment as may be
reasonably requested by Secured Party or assignee.
(b) All notices to be given in connection with this Agreement shall be in writing, shall be
addressed to the parties at their respective addresses set forth in this Agreement (unless and
until a different address may be specified in a written notice to the other party) and shall be
deemed given (i) on the date of receipt if delivered in hand or by facsimile transmission, (ii) on
the next business day after being sent by express mail, and (iii) on the fourth business day after
being sent by regular, registered or certified mail. As used herein, the term “business day” shall
mean and include any day other than Saturdays, Sundays, or other days on which commercial banks in
New York, New York are required or authorized to be closed.
(c) Secured party may correct patent errors and fill in all blanks in this Agreement or in any
Collateral Schedule consistent with the agreement of the parties.
(d) Time is of the essence of this Agreement. This Agreement shall be binding, jointly and
severally, upon all parties described as the “Debtor” and their respective heirs, executors,
representatives, successors and assigns, and shall inure to the benefit of Secured Party, its
successors and assigns.
(e) This Agreement and its Collateral Schedules constitute the entire agreement between the
parties with respect to the subject matter of this Agreement and supersede all prior understandings
(whether written, verbal or implied) with respect to such subject matter. THIS AGREEMENT AND ITS
COLLATERAL SCHEDULES SHALL NOT BE CHANGED OR TERMINATED ORALLY OR BY COURSE OF CONDUCT, BUT ONLY BY
A WRITING SIGNED BY BOTH PARTIES. Section headings contained in this Agreement have been included
for convenience only, and shall not affect the construction or interpretation of this Agreement.
(f) This Agreement shall continue in full force and effect until all of the indebtedness has
been indefeasibly paid in full to Secured Party or its assignee. The surrender, upon payment or
otherwise, of any Note or any of the other documents evidencing any of the indebtedness shall not
affect the right of Secured Party to retain the Collateral for such other indebtedness as may then
exist or as it may be reasonably contemplated will exist in the future. This Agreement shall
automatically be reinstated if Secured Party is ever required to return or restore the payment of
all or any portion of the indebtedness (all as though such payment had never been made).
(g) THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL IN ALL
RESPECTS BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF
CONNECTICUT (WITHOUT REGARD TO THE CONFLICT OF LAWS PRINCIPLES OF SUCH STATE), INCLUDING ALL
MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE, REGARDLESS OF THE LOCATION OF THE EQUIPMENT.
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IN WITNESS WHEREOF, Debtor and Secured Party, intending to be legally bound hereby, have duly
executed this Agreement one or more counterparts, each of which shall be deemed to be an original,
as of the day and year first aforesaid.
SECURED PARTY: | DEBTOR: | |||||||
General Electric Capital Corporation | Engeneos, Inc. | |||||||
By:
|
/s/ | By: | /s/ | |||||
Name:
|
Xxxx Xxxx | Name: | Xxxxx Xxx | |||||
Title:
|
SVP | Title: | CEO & President |
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AMENDMENT
THIS AMENDMENT is made as of the 14th day of February, 2002, between General
Electric Capital Corporation (“Secured Party”) and Engeneos, Inc. (“Debtor”) in connection with
that certain Master Security Agreement, dated as of February 14, 2002 (“Agreement”). The terms of
this Amendment are hereby incorporated into the Agreement as though fully set forth therein.
Section references below refer to the section numbers of the Agreement. The Agreement is hereby
amended as follows:
2. REPRESENTATIONS, WARRANTIES AND COVENANTS OF DEBTOR.
Subsection (a) is hereby amended and replaced with the following:
“Debtor is, and will remain, duly organized, existing and in good
standing under the laws of the State set forth in the preamble of
this Agreement, has its chief executive offices at the location
specified in the preamble, and is, and will remain, duly qualified
and licensed in every jurisdiction wherever necessary to carry on
its business and operations; except when failure would not have a
material adverse effect on Company’s business and operations.”
Subsection (b) is hereby amended and replaced with the following:
“Debtor has adequate power and capacity to enter into, and to
perform its obligations under this Agreement, each Note and any
other documents evidencing, or given in connection with, any of the
Indebtedness (all of the foregoing, excluding the Warrant, are
called the “Debt Documents”);”
Subsection (f) is hereby amended and replaced with the following:
“As of the date of this Agreement, there are no suits or proceedings
pending in court or before any commission, board or other
administrative agency against or affecting Debtor which could, in
the aggregate, have a material adverse effect on Debtor, its
business or operations, or its ability to perform its obligations
under the Debt Documents, nor does Debtor have reason to believe
that any such suits or proceedings are threatened.”
Subsection (g) is hereby amended and replaced with the following:
“All annual financial statements delivered to Secured Party in
connection with the Indebtedness have been prepared in accordance
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with generally accepted accounting principles, and since the date of
the most recent financial statement, there has been no material
adverse change in Debtors financial condition; All quarterly
financial statements delivered to Secured Party in connection with
the Indebtedness have been prepared in accordance with generally
accepted accounting principles, and since the date of the most
recent quarterly financial statement, there has been no material
adverse change in Debtors financial condition except for footnotes
and disclosures or as otherwise noted.”
3 COLLATERAL.
Subsection (d) is hereby amended and replaced with the following:
“Debtor shall pay promptly when due all taxes, license fees,
assessments and public and private charges levied or assessed on any
of the Collateral, on its use, or on this Agreement or any of the
other Debt Documents. At its option, Secured Party may discharge
taxes, liens, security interests or other encumbrances at any time
levied or placed on the Collateral and may pay for the maintenance,
insurance and preservation of the Collateral and effect compliance
with the terms of this Agreement or any of the other Debt Documents.
Debtor agrees to reimburse Secured Party, on demand, all reasonable
costs and expenses incurred by Secured Party in connection with such
payment or performance and agrees that such reimbursement obligation
shall constitute Indebtedness.”
5 REPORTS.
Subsection (b) is hereby amended and replaced with the following:
“Debtor will deliver to Secured Party Debtor’s complete financial
statements, certified by a recognized firm of certified public
accountants, as soon as available but in any event not later than
one hundred twenty (120) days of the close of each fiscal year of
Debtor. If Secured Party requests, Debtor will deliver to Secured
Party copies of Debtor’s quarterly financial reports certified by
Debtor’s chief financial officer, within ninety (90) days after the
close of each of Debtor’s fiscal quarter. If Secured Party
requests, Debtor will deliver to Secured Party copies of all Forms
10-K and 10-Q, if any, within 30 days after the dates on which they
are filed with the Securities and Exchange Commission.”
6 FURTHER ASSURANCES.
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Subsection (B) is hereby amended and replaced with the following:
“Debtor authorizes Secured Party to file a financing statement and
amendments thereto describing the Collateral and containing any
other information required by the applicable Uniform Commercial
Code. Debtor irrevocably grants to Secured Party the power to sign
Debtor’s name and generally to act on behalf of Debtor solely to
execute and file applications for title, transfers of title,
financing statements, notices of lien and other documents pertaining
to any or all of the collateral; this power is coupled with Secured
Party’s interest in the Collateral. Debtor shall, if any
certificate of title be required or permitted by law for any of the
Collateral, obtain and promptly deliver to Secured Party such
certificate showing the lien of this Agreement with respect to the
Collateral. Debtor ratifies its prior authorization for Secured
Party to file financing statements and amendments thereto describing
the Collateral and containing any other information required by the
Uniform Commercial Code if filed prior to the date hereof.”
7 DEFAULT AND REMEDIES.
Subsection (a)(iii) is hereby amended and replaced with the following:
“Debtor breaches any of its insurance obligations under Section 4
and such breach could result in a reduction or termination of
coverage in any material respect;”
Subsection (a)(iv) is hereby amended and replaced with the following:
“Debtor breaches any of its other material obligations under any of
the Debt Documents and fails to cure that breach within thirty (30)
days after written notice from Secured Party;”
Subsection (a)(v) is hereby amended and replaced with the following:
“Any warranty, representation or statement made by Debtor in any of
the Debt Documents or otherwise connection with any of the
Indebtedness shall be false or misleading in any material respect at
the time made;”
Subsection (a)(vii) is hereby deleted in its entirety and the remaining subsections are
correctly renumbered.
Subsection (a)(v) (renumbered) is hereby amended and replaced with the following:
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“Debtor or any Guarantor files a petition under any bankruptcy,
insolvency or similar law, or any such petition is filed against
Debtor or any Guarantor and is not dismissed within sixty (60) days;
or”
Subsection (c) is hereby amended and replaced with the following:
“After default, Secured Party shall have all of the rights and
remedies of a Secured Party under the Uniform Commercial Code, and
under any other applicable law. Without limiting the foregoing,
Secured Party shall have the right to (i) with or without legal
process, peacefully enter any premises where the Collateral may be
and take possession of and remove the Collateral from the premises
or store it on the premises, (ii) sell the Collateral at public or
private sale, in whole or in part, and have the right to bid and
purchase at said sale, or (iii) lease or otherwise dispose of all or
part of the Collateral, applying proceeds from such disposition to
the obligations then in default. If requested by Secured Party,
Debtor shall promptly assemble the Collateral and make it available
to Secured Party at a place to be designated by Secured Party which
is reasonably convenient to both parties. Secured Party may also
render any or all of the Collateral unusable at the Debtor’s
premises and may dispose of such Collateral on such premises without
liability for rent or costs. Any notice that Secured Party is
required to give to Debtor under the Uniform Commercial Code of the
time and place of any public sale or the time after which any
private sale or other intended disposition of the Collateral is to
be made shall be deemed to constitute reasonable notice if such
notice is given to the last known address of Debtor at least ten
(10) days prior to such action.”
TERMS USED, BUT NOT OTHERWISE DEFINED HEREIN SHALL HAVE THE MEANINGS GIVEN TO THEM IN THE
AGREEMENT. EXCEPT AS EXPRESSLY AMENDED HEREBY, THE AGREEMENT SHALL REMAIN IN FULL FORCE AND
EFFECT. IF THERE IS ANY CONFLICT BETWEEN THE PROVISIONS OF THE AGREEMENT AND THIS AMENDMENT, THEN
THIS AMENDMENT SHALL CONTROL.
IN WITNESS WHEREOF, the parties hereto have executed this Amendment simultaneously with the
Agreement by signature of their respective authorized representative set forth below.
General Electric Capital Corporation | Engeneos, Inc. | |||||||
By:
|
/s/ | By: | /s/ | |||||
Name:
|
Xxxx Xxxx | Name: | Xxxxx Xxx | |||||
Title:
|
SVP | Title: | CEO & President |
14
H&D Comments 12/10/03
*LOAN3003*
CERTIFIED COPY OF RESOLUTION OF BOARD OF DIRECTORS
The undersigned hereby certifies: (i) that he/she is the Secretary of Compound Therapeutics, Inc.,
a Delaware corporation; (ii) that the following is a true, accurate and complete transcript of
resolutions duly adopted at a meeting of the Board of Directors of said Corporation duly held on
the 25th day of October, 2003, at which a quorum was present, and that the proceedings
were in accordance with the Articles and by-laws of said Corporation; and (iii) that said
resolutions have not been amended or revoked, and are in full force and effect:
“RESOLVED, that each of the officers of this Corporation, whose name appears below, or the duly
elected or appointed successor in office of any or all of them, be and hereby is authorized and
empowered in the name and on behalf of this Corporation to borrow from General Electric Capital
Corporation or its successors and assigns (hereinafter referred to as “Secured Party”) from time to
time, such sum or sums of money as in the judgment of such officer or officers the Corporation may
require and to execute on behalf of the Corporation and to deliver to Secured Party in the form
required by Secured Party a promissory note or notes of this Corporation evidencing the amount or
amounts borrowed or any renewals and/or extensions thereof, such note or notes to bear such rate of
interest and be payable in such installments and on such terms and conditions as such officer may
agree to by his signature thereon.
FURTHER RESOLVED, that any of the aforesaid officers, or his duly elected or appointed successor in
office, be and hereby is authorized and empowered to do any acts, including, but not limited to,
the mortgage, pledge, or hypothecation from time to time with Secured Party of any or all the
assets of this Corporation to secure such loan or loans and any other indebtedness or obligations,
now existing or hereafter arising, of this Corporation to Secured Party, and to execute in the name
of and on behalf of this Corporation, any chattel mortgages, notes, security agreements, financing
statements, renewal, extension or consolidation agreements, and any other instruments or agreements
deemed necessary or proper by Secured Party in respect of the collateral securing any indebtedness
of this Corporation, and to affix the seal of this Corporation to any mortgage, pledge, or other
such instrument if so required or requested by Secured Party.
FURTHER RESOLVED, that each said officer of this Corporation is hereby authorized to do and perform
all other acts and deeds that may be requisite or necessary to carry fully into effect the
foregoing resolutions.
FURTHER RESOLVED, that the officers referred to in the foregoing resolutions, their names and
signatures are as follows:
NAME | TITLE | SIGNATURE | ||
Xxxxx Xxx
|
President | /s/ |
FURTHER RESOLVED, that Secured Party is authorized to rely upon the aforesaid resolutions until
receipt by it of written notice of any change, which changes of whatever nature shall not be
effective as to Secured Party to the extent that it has theretofore relied upon the aforesaid
resolutions in the above form.”
IN
WITNESS WHEREOF, I have set my hand and affixed the seal of said Corporation this ___ day of
. ___.
15
H&D Comments 12/10/03
/s/
|
||
(CORPORATE SEAL) |
16
H&D Comments 12/10/03
PROMISSORY NOTE
Oct.
30, 2003
(Date)
(Date)
FOR VALUE RECEIVED, Compound Therapeutics, Inc. a corporation located at the address stated below
(“Maker”) promises, jointly and severally if more than one, to pay to the order of General Electric
Capital Corporation or any subsequent holder hereof (each, a “Payee”) at its office located at 000
Xxxxxxx 0, Xxxxx 00, Xxxxxxx, XX 00000 or at any other place as Payee or the holder hereof may
designate, the principal sum of Five Hundred Eighty-Five Thousand Two Hundred Sixty-Eight—24/100
Dollars ($585,268.24), with interest on the unpaid principal balance, from the date hereof through
and including the dates of payment, at a fixed interest rate of Nine and Forty Hundredths percent
(9.40%) per annum, to be paid in lawful money of the United States, in Forty Eight (48) consecutive
monthly installments of principal and interest as follows:
Periodic | ||||
Installment | Amount | |||
Forty-Seven (47)
|
$ | 14,561.77 |
each (“Periodic Installment”) and a final installment which shall be in the amount of the total
outstanding principal and interest. The first Periodic Installment shall be due and payable on
11/1/03 and the following Periodic Installments and the final installment shall be due and payable
on the same day of each succeeding month (each, a “Payment Date”). Such installments have been
calculated on the basis of a 360 day year of twelve 30-day months. Each payment may, at the option
of the Payee, be calculated and applied on an assumption that such payment would be made on its due
date.
The acceptance by Payee of any payment which is less than payment in full of all amounts due and
owing at such time shall not constitute a waiver of Payee’s right to receive payment in full at
such time or at any prior or subsequent time.
The Maker hereby expressly authorizes the Payee to insert the date value is actually given in the
blank space on the face hereof and on all related documents pertaining hereto.
This Note may be secured by a security agreement, chattel mortgage, pledge agreement or like
instrument (each of which is hereinafter called a “Security Agreement”).
Time is of the essence hereof. If any installment or any other sum due under this Note or any
Security Agreement is not received within ten (10) days after its due date, the Maker agrees to
pay, in addition to the amount of each such installment or other sum, a late payment charge of five
percent (5%) of the amount of said installment or other sum, but not exceeding any lawful maximum.
If (i) Maker fails to make payment of any amount due hereunder within ten (10) days after the same
becomes due and payable; or (ii) Maker is in default under, or fails to perform under any material
term or condition contained in any Security Agreement, then the entire principal sum remaining
unpaid, together with all accrued interest thereon and any other sum payable under this Note or any
Security Agreement, at the election of Payee, shall immediately become due and payable, with
interest thereon at the lesser of eighteen percent (18%) per annum or the highest rate not
prohibited by applicable law from the date of such accelerated maturity until paid (both before and
after any judgment).
17
H&D Comments 12/10/03
In the event Maker (a) sells, leases, exchange or transfers all or substantial all of the property,
assets or business of Maker or, (b) is involved with an initial public offering of its shares or
(c) is a party to any merger or consolidation, then Maker may prepay in full, but not in part, its
entire indebtedness hereunder upon payment of the entire indebtedness plus an additional sum as a
premium equal to the following percentages of the original principal balance for the indicated
period:
Prior to the first annual anniversary date of this Note: Not Applicable.
Thereafter and prior to the second annual anniversary day of this Note: five percent (5%)
Thereafter and prior to the third annual anniversary date of this Note: four percent (4%)
Thereafter and prior to the fourth annual anniversary date of this Note: three percent (3%) and zero percent (0%) thereafter, plus all other sums due hereunder or under any Security Agreement.
Prior to the first annual anniversary date of this Note: Not Applicable.
Thereafter and prior to the second annual anniversary day of this Note: five percent (5%)
Thereafter and prior to the third annual anniversary date of this Note: four percent (4%)
Thereafter and prior to the fourth annual anniversary date of this Note: three percent (3%) and zero percent (0%) thereafter, plus all other sums due hereunder or under any Security Agreement.
It is the intention of the parties hereto to comply with the applicable usury laws; accordingly, it
is agreed that, notwithstanding any provision to the contrary in this Note or any Security
Agreement, in no event shall this Note or any Security Agreement require the payment or permit the
collection of interest in excess of the maximum amount permitted by applicable law. If any such
excess interest is contracted for, charged or received under this Note or any Security Agreement,
or if all of the principal balance shall be prepaid, so that under any of such circumstances the
amount of interest contracted for, charged or received under this Note or any Security Agreement on
the principal balance shall exceed the maximum amount of interest permitted by applicable law, then
in such event (a) the provisions of this paragraph shall govern and control, (b) neither Maker nor
any other person or entity now or hereafter liable for the payment hereof shall be obligated to pay
the amount of such interest to the extent that it is in excess of the maximum amount of interest
permitted by applicable law, (c) any such excess which may have been collected shall be either
applied as a credit against the then unpaid principal balance or refunded to Maker, at the option
of the Payee, and (d) the effective rate of interest shall be automatically reduced to the maximum
lawful contract rate allowed under applicable law as now or hereafter construed by the courts
having jurisdiction thereof. It is further agreed that without limitation of the foregoing, all
calculations of the rate of interest contracted for, charged or received under this Note or any
Security Agreement which are made for the purpose of determining whether such rate exceeds the
maximum lawful contract rate, shall be made, to the extent permitted by applicable law, by
amortizing, prorating, allocating and spreading in equal parts during the period of the full stated
term of the indebtedness evidenced hereby, all interest at any time contracted for, charged or
received from Maker or otherwise by Payee in connection with such indebtedness; provided, however,
that if applicable state law is amended or the law of the United States of America preempts any
applicable state law, so that it becomes lawful for the Payee to receive a greater interest per
annum rate than is presently allowed, the Maker agrees that, on the effective date of such
amendment or preemption, as the case may be, the lawful maximum hereunder shall be increased to the
maximum interest per annum rate allowed by the amended state law or the law of the United States of
America.
The Maker and all sureties, endorsers, guarantors or any others (each such person, other than the
Maker, an “Obligor”) who may at any time become liable for the payment hereof jointly and severally
consent hereby to any and all extensions of time, renewals, waivers or modifications of, and all
substitutions or releases of, security or of any party primarily or secondarily liable on this Note
or any Security Agreement or any term and provision of either, which may be made, granted or
consented to by Payee, and agree that suit may be brought and maintained against any one or more of
them, at the election of Payee without joinder of any other as a party thereto, and that Payee
shall not be required first to foreclose, proceed against, or exhaust any security hereof in order
to enforce payment of this Note. The Maker and each Obligor hereby waives presentment, demand for
payment, notice of nonpayment, protest, notice of protest, notice of dishonor, and all other
notices in connection herewith, as well as filing of suit (if permitted by law) and diligence in
collecting this Note or enforcing any of the security hereof, and agrees to pay (if permitted by
law) all expenses incurred in collection, including Payee’s actual attorneys’ fees.
18
H&D Comments 12/10/03
THE MAKER HEREBY UNCONDITIONALLY WAIVES ITS RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION
BASED UPON OR ARISING OUT OF, DIRECTLY OR INDIRECTLY, THIS NOTE, ANY OF THE RELATED DOCUMENTS, ANY
DEALINGS BETWEEN MAKER AND PAYEE RELATING TO THE SUBJECT MATTER OF THIS TRANSACTION OR ANY RELATED
TRANSACTIONS, AND/OR THE RELATIONSHIP THAT IS BEING ESTABLISHED BETWEEN MAKER AND PAYEE. THE SCOPE
OF THIS WAIVER IS INTENDED TO BE ALL ENCOMPASSING OF ANY AND ALL DISPUTES THAT MAY BE FILED IN ANY
COURT (INCLUDING, WITHOUT LIMITATION, CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL
OTHER COMMON LAW AND STATUTORY CLAIMS.) THIS WAIVER IS IRREVOCABLE MEANING THAT IT MAY NOT BE
MODIFIED EITHER ORALLY OR IN WRITING, AND THE WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS,
RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS NOTE, ANY RELATED DOCUMENTS OR TO ANY OTHER
DOCUMENTS OR AGREEMENTS RELATING TO THIS TRANSACTION OR ANY RELATED TRANSACTION. IN THE EVENT OF
LITIGATION, THIS NOTE MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.
This Note and any Security Agreement constitute the entire agreement of the Maker and Payee with
respect to the subject matter hereof and supercedes all prior understandings, agreements and
representations, express or implied.
No variation or modification of this Note, or any waiver of any of its provisions or conditions,
shall be valid unless in writing and signed by an authorized representative of Maker and Payee.
Any such waiver, consent, modification or change shall be effective only in the specific instance
and for the specific purpose given.
Any provision in this Note or any Security Agreement which is in conflict with any statute, law or
applicable rule shall be deemed omitted, modified or altered to conform thereto.
Compound Therapeutics, Inc. | ||||
/s/
|
By: | /s/ | ||
(Witness) |
||||
Xxxx Alberta
|
Name: | Xxxxx Xxx | ||
(Print name) |
||||
0000 Xxxx Xxxxxx, Xxxxxxx, XX 00000
|
Title: | President & CEO | ||
(Address) |
Federal Tax ID #: 000000000 | ||||||
Address: 0000 Xxxx Xxxxxx, Xxxxxxx, XX 00000 |
19
H&D Comments 12/10/03
*LOAN3009*
COLLATERAL SCHEDULE NO. 001
THIS COLLATERAL SCHEDULE NO. 001 is annexed to and made a part of that certain Master Security
Agreement dated as of February 14, 2002 between General Electric Capital Corporation, together with
its successors and assigns, if any, as Secured Party and Compound Therapeutics, Inc. as Debtor and
describes collateral in which Debtor has granted Secured Party a security interest in connection
with the Indebtedness (as defined in the Security Agreement) including without limitation that
certain Promissory Note dated 10/30/03 in the original principal amount of $585,268.24.
Quantity
|
Manufacturer | Serial Number | Year/Model and Type of Equipment | |||
see exhibit a attached hereto and made a part hereof
and including all additions, attachments, accessories and accessions thereto, and any and all
substitutions, replacements or exchanges therefor, and all insurance and/or other proceeds thereof.
Debtor is and will remain in full compliance with all laws and regulations applicable to it
including, without limitation, (i) ensuring that no person who owns a controlling interest in or
otherwise controls Debtor is or shall be (Y) listed on the Specially Designated Nationals and
Blocked Person List maintained by the Office of Foreign Assets Control (“OFAC”), Department of the
Treasury, and/or any other similar lists maintained by OFAC pursuant to any authorizing statute,
Executive Order or regulation or (Z) a person designated under Section 1(b), (c) or (d) of
Executive Order No. 13224 (September 23, 2001), any related enabling legislation or any other
similar Executive Orders, and (ii) compliance with all applicable Bank Secrecy Act (“BSA”) laws,
regulations and government guidance on BSA compliance and on the prevention and detection of money
laundering violations.
SECURED PARTY: | DEBTOR: | |||||||
General Electric Capital Corporation | Compound Therapeutics, Inc. | |||||||
By:
|
/s/ | By: | /s/ | |||||
Name:
|
Xxxxx Xxxxxxxxx | Name: | Xxxxx Xxx | |||||
Title:
|
Senior Vice President | Title: | President & CEO | |||||
Date:
|
Date: | October 30, 2003 |
20
H&D Comments 12/10/03
*LOAN3007*
Date: October 30, 2003
General Electric Capital Corporation
000 Xxxxxxx 0 Xxxxx 00
Xxxxxxx, XX 00000-0000
000 Xxxxxxx 0 Xxxxx 00
Xxxxxxx, XX 00000-0000
Gentlemen:
You are hereby irrevocably authorized and directed to deliver and apply the proceeds of your
loan to the undersigned evidenced by that Note dated 10/30/03 and secured by that Security
Agreement or Chattel Mortgage dated February 14, 2002, as follows:
Compound Therapeutics, Inc.
|
$ | 575,553.65 | ||||
GE Capital Corporation
|
$ | 152.82 | (Interim Interest) | |||
GE Capital Corporation
|
$ | 9,561.77 | (The balance of the Advance Payment, $5,000.00, will be taken from your Good Faith Deposit) |
This authorization and direction is given pursuant to the same authority authorizing the
above-mentioned borrowing.
Very truly yours, | ||||||
Compound Therapeutics, Inc. | ||||||
By: | /s/
|
|||||
Name: | Xxxxx Xxx | |||||
Title: | President & CEO |
21
H&D Comments 12/10/03
*LOAN3006*
CERTIFICATE OF DELIVERY/INSTALLATION
To: General Electric Capital Corporation (together with its successors and assigns, if any,
“Secured Party”)
Pursuant to the provisions of the above Collateral Schedule to the above Master Security
Agreement and the related Promissory Note (collectively, the “Loan”), the undersigned (“Debtor”)
hereby certifies and warrants that (a) all Equipment listed below has been delivered and installed
(if applicable); (b) the Debtor has inspected the Equipment, and all such testing as it deems
necessary has been performed by Debtor, Supplier or the manufacturer; (c) Debtor has found all such
Equipment to be satisfactory and meets all applicable specifications and is fully operational for
its intended use; and (d) the Equipment was first delivered to Debtor on 10/30/03 and copies of the
Xxxx(s) of Lading or other documentation acceptable to Secured Party which show the date of
delivery are attached hereto.
Number of Units
|
Manufacturer | Serial Number | Year/Model and Type of Equipment | |||
see exhibit a attached hereto and made a part hereof
Compound Therapeutics, Inc. | ||||||
By: | /s/
|
|||||
Name: | Xxxxx Xxx | |||||
Title: | President & CEO | |||||
Date: | October 30, 2003 |
22
H&D Comments 12/10/03
AMENDMENT NO. 3
THIS AMENDMENT No. 3 is made as of the 16th day of December 2003, between General
Electric Corporation (“Secured Party”) and Compound Therapeutics, Inc. (“Debtor”) in connection
with that certain Master Security Agreement, dated as of February 14, 2002, as amended by Amendment
dated as of February 14, 2002, and Amendment No. 2 dated as of September 25, 2003 (“Agreement”)).
The terms of this Amendment No. 3 are hereby incorporated into the Agreement as though fully set
forth therein. Section references below refer to the section numbers of the Agreement. The
Agreement is hereby amended as follows:
2. REPRESENTATIONS, WARRANTIES AND COVENANTS OF DEBTOR.
Subsection (l) is hereby added to and made a part of the Agreement and reads as follows:
“(l) In the event the Collateral described in Collateral Schedule
No. 001 to the Agreement known as account number 0000000-001, is
foreclosed upon and if the successful bidder is the Debtor, then
Debtor hereby and herewith agrees (i) that Debtor shall be deemed to
have granted a security interest in the Collateral to Secured Party
as of the date hereof and the same shall be deemed part of the
collateral as defined in the Agreement, and (ii) to execute any
documentation reasonably required by Secured Party to properly
perfect and document Secured Party’s security interest in the
Collateral. Notwithstanding anything to the contrary in the Master
Security Agreement, in the event that the Debtor sells any portion
of the Collateral under such Collateral Schedule No. 001 in a
commercially reasonable manner, then Secured Party will be deemed to
have released its lien therein if the proceeds of such sale (net of
reasonable expenses of sale) are delivered to the Secured Party for
payment on the Note dated December ___, 2003”
TERMS USED, BUT NOT OTHERWISE DEFINED HEREIN SHALL HAVE THE MEANINGS GIVEN TO THEM IN THE
AGREEMENT. EXCEPT AS EXPRESSLY AMENDED HEREBY, THE AGREEMENT SHALL REMAIN IN FULL FORCE AND
EFFECT. IF THERE IS ANY CONFLICT BETWEEN THE PROVISIONS OF THE AGREEMENT AND THIS AMENDMENT NO. 3,
THEN THIS AMENDMENET NO. 3 SHALL CONTROL.
IN WITNESS WHEREOF, the parties hereto have executed this Amendment No. 3 simultaneously with
the Agreement by signature of their respective authorized representative set forth below.
General Electric Capital Corporation | Compound Therapeutics, Inc. | |||||||
By:
|
/s/ | By: | /s/ | |||||
Name:
|
Xxxx Xxxx | Name: | Xxxxx Xxx | |||||
Title:
|
SVP | Title: | President & CEO |
23
H&D Comments 12/10/03
PROMISSORY NOTE
Dec.
16, 2003
(Date)
(Date)
FOR VALUE RECEIVED, Compound Therapeutics, Inc. a corporation located at the address stated below
(“Maker”) promises, jointly and severally if more than one, to pay to the order of General Electric
Capital Corporation or any subsequent holder hereof (each, a “Payee”) at its office located at 000
Xxxxxxx 0, Xxxxx 00, Xxxxxxx, XX 00000 or at such other place as Payee or the holder hereof may
designate, the principal sum of Five Hundred Thousand—00/100 Dollars ($500,000.00), with interest
on the unpaid principal balance, from the date hereof through and including the dates of payment,
at a fixed interest rate of Nine and Sixteen Hundredths percent (9.16%) per annum, to be paid in
lawful money of the United States, in Sixty (60) consecutive monthly installments of principal and
interest as follows:
Periodic | ||||
Installment | Amount | |||
One (1)
|
$ | 1,908.33 | ||
Eleven (11)
|
$ | 3,816.67 | ||
Forty-Seven (47)
|
$ | 12,480.54 |
each (“Periodic Installment”) and a final installment which shall be in the amount of the total
outstanding principal and interest. The first Periodic Installment shall be due and payable on
1/1/04 and the following Periodic Installments and the final installment shall be due on the same
day of each succeeding month (each, a “Payment Date”). Such installments have been calculated on
the basis of a 360 day year of twelve 30-day months. Each payment may, at the option of the Payee,
be calculated and applied on an assumption that such payment would be made on its due date.
The acceptance by Payee of any payment which is less than payment in full of all amounts due and
owing at such time shall not constitute a waiver of Payee’s right to receive payment in full at
such time or at any prior or subsequent time.
The Maker hereby expressly authorizes the Payee to insert the date value is actually given in the
blank space on the face hereof and on all related documents pertaining hereto.
This Note may be secured by a security agreement, chattel mortgage, pledge agreement or like
instrument (each of which is hereinafter called a “Security Agreement”).
Time is of the essence hereof. If any installment or any other sum due under this Note or any
Security Agreement is not received within ten (10) business days after its due date, the Maker
agrees to pay, in addition to the amount of each such installment or other sum, a late payment
charge of five percent (5%) of the amount of said installment or other sum, but not exceeding any
lawful maximum. If (i) Maker fails to make payment of any amount due hereunder within ten (10)
business days after the same becomes due and payable; or (ii) there is a material default under the
Security Agreement which continues uncured after twenty (20) business days’ notice, then the entire
principal sum remaining unpaid, together with all accrued interest thereon and any other sum
payable under this Note or any Security Agreement, at the election of Payee, shall immediately
become due and payable, with interest thereon at the lesser of eighteen percent (18%) per annum or
the highest rate not prohibited by
24
H&D Comments 12/10/03
applicable law from the date of such accelerated maturity until paid (both before and after any
judgment).
Maker may prepay in full, or in part, its entire indebtedness hereunder upon payment of the entire
indebtedness.
It is the intention of the parties hereto to comply with the applicable usury laws; accordingly, it
is agreed that, notwithstanding any provision to the contrary in this Note or any Security
Agreement, in no event shall this Note or any Security Agreement require the payment or permit the
collection of interest in excess of the maximum amount permitted by applicable law. If any such
excess interest is contracted for, charged or received under this Note or any Security Agreement,
or if all of the principal balance shall be prepaid, so that under any of such circumstances the
amount of interest contracted for, charged or received under this Note or any Security Agreement on
the principal balance shall exceed the maximum amount of interest permitted by applicable law, then
in such event (a) the provisions of this paragraph shall govern and control, (b) neither Maker nor
any other person or entity now or hereafter liable for the payment hereof shall be obligated to pay
the amount of such interest to the extent that it is in excess of the maximum amount of interest
permitted by applicable law, (c) any such excess which may have been collected shall be either
applied as a credit against the then unpaid principal balance or refunded to Maker, at the option
of the Payee, and (d) the effective rate of interest shall be automatically reduced to the maximum
lawful contract rate allowed under applicable law as now or hereafter construed by the courts
having jurisdiction thereof. It is further agreed that without limitation of the foregoing, all
calculations of the rate of interest contracted for, charged or received under this Note or any
Security Agreement which are made for the purpose of determining whether such rate exceeds the
maximum lawful contract rate, shall be made, to the extent permitted by applicable law, by
amortizing, prorating, allocating and spreading in equal parts during the period of the full stated
term of the indebtedness evidenced hereby, all interest at any time contracted for, charged or
received from Maker or otherwise by Payee in connection with such indebtedness; provided, however,
that if applicable state law is amended or the law of the United States of America preempts any
applicable state law, so that it becomes lawful for the Payee to receive a greater interest per
annum rate than is presently allowed, the Maker agrees that, on the effective date of such
amendment or preemption, as the case may be, the lawful maximum hereunder shall be increased to the
maximum interest per annum rate allowed by the amended state law or the law of the United States of
America.
The Maker and all sureties, endorsers, guarantors or any others (each such person, other than the
Maker, an “Obligor”) who may at any time become liable for the payment hereof jointly and severally
consent hereby to any and all extensions of time, renewals, waivers or modifications of, and all
substitutions or releases of, security or of any party primarily or secondarily liable on this Note
or any Security Agreement or any term and provision of either, which may be made, granted or
consented to by Payee, and agree that suit may be brought and maintained against any one or more of
them, at the election of Payee without joinder of any other as a party thereto, and that Payee
shall not be required first to foreclose, proceed against, or exhaust any security hereof in order
to enforce payment of this Note. The Maker and each Obligor hereby waives presentment, demand for
payment, notice of nonpayment, protest, notice of protest, notice of dishonor, and all other
notices in connection herewith, as well as filing of suit (if permitted by law) and diligence in
collecting this Note or enforcing any of the security hereof, and agrees to pay (if permitted by
law) all expenses incurred in collection, including Payee’s actual attorneys’ fees.
THE MAKER HEREBY UNCONDITIONALLY WAIVES ITS RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION
BASED UPON OR ARISING OUT OF, DIRECTLY OR INDIRECTLY, THIS NOTE, ANY OF THE RELATED DOCUMENTS, ANY
DEALINGS BETWEEN MAKER AND PAYEE RELATING TO THE SUBJECT MATTER OF THIS TRANSACTION OR ANY RELATED
TRANSACTIONS, AND/OR THE RELATIONSHIP THAT IS BEING ESTABLISHED BETWEEN MAKER AND PAYEE. THE
SCOPE OF THIS WAIVER IS INTENDED TO BE ALL ENCOMPASSING OF ANY AND ALL DISPUTES THAT MAY BE FILED
IN ANY COURT (INCLUDING, WITHOUT LIMITATION, CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS,
AND ALL OTHER COMMON LAW AND STATUTORY CLAIMS.) THIS WAIVER IS IRREVOCABLE MEANING THAT IT MAY NOT
BE MODIFIED EITHER ORALLY OR IN WRITING, AND THE WAIVER SHALL APPLY TO ANY
25
H&D Comments 12/10/03
SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS NOTE, ANY RELATED DOCUMENTS
OR TO ANY OTHER DOCUMENTS OR AGREEMENTS RELATING TO THIS TRANSACTION OR ANY RELATED TRANSACTION.
IN THE EVENT OF LITIGATION, THIS NOTE MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.
This Note and any Security Agreement constitute the entire agreement of the Maker and Payee with
respect to the subject matter hereof and supercedes all prior understandings, agreements and
representations, express or implied.
No variation or modification of this Note, or any waiver of any of its provisions or conditions,
shall be valid unless in writing and signed by an authorized representative of Maker and Payee.
Any such waiver, consent, modification or change shall be effective only in the specific instance
and for the specific purpose given.
Any provision in this Note or any Security Agreement which is in conflict with any statute, law or
applicable rule shall be deemed omitted, modified or altered to conform thereto.
Compound Therapeutics, Inc. | ||||||
By: | /s/ | |||||
(Witness) |
||||||
Name: | Xxxxx Xxx | |||||
(Print name) |
||||||
Title: | President & CEO | |||||
(Address) |
Federal Tax ID #: 000000000 | ||||||
Address: 0000 Xxxx Xxxxxx, Xxxxxxx, XX 00000 |
26
H&D Comments 12/10/03
COLLATERAL SCHEDULE NO. 001
THIS COLLATERAL SCHEDULE NO. 001 is annexed to and made a part of that certain Master Security
Agreement dated as of February 14, 2002 between General Electric Capital Corporation, together with
its successors and assigns, if any, as Secured Party and Engeneos, Inc. as Debtor and describes
collateral in which Debtor has granted Secured Party a security interest in connection with the
Indebtedness (as defined in the Security Agreement) including without limitation that certain
Promissory Note dated in the original principal amount of $164,378.80.
Quantity
|
Manufacturer | Serial Number | Year/Model and Type of Equipment | |||
see exhibit a attached hereto and made a part hereof.
SECURED PARTY: | DEBTOR: | |||||||
General Electric Capital Corporation | Compound Therapeutics, Inc. | |||||||
By:
|
/s/ | By: | /s/ | |||||
Name:
|
Xxxx Xxxx | Name: | Xxxxx Xxx | |||||
Title:
|
SVP | Title: | President & CEO | |||||
Date:
|
Date: | |||||||
27
H&D Comments 12/10/03
*LOAN3007*
Date: December 16, 2003
General Electric Capital Corporation
000 Xxxxxxx 0 Xxxxx 00
Xxxxxxx, XX 00000-0000
000 Xxxxxxx 0 Xxxxx 00
Xxxxxxx, XX 00000-0000
Gentlemen:
You are hereby irrevocably authorized and directed to deliver and apply the proceeds of your
loan to the undersigned evidenced by that Note dated and secured by that Security
Agreement or Chattel Mortgage dated February 14, 2002, as follows:
Compound Therapeutics, Inc. |
$ | 498,091.67 | ** | |||
GE Capital Corp. |
$ | 1,908.33 | First Interest Only Payment |
This authorization and direction is given pursuant to the same authority authorizing the
above-mentioned borrowing.
Very truly yours, | ||||||
Compound Therapeutics, Inc. | ||||||
By: | /s/
|
|||||
Name: | Xxxxx Xxx | |||||
Title: | CEO |
** | Amounts to be disbursed to Compound Therapeutics should be wired per the wire instructions attached hereto. |
28
H&D Comments 12/10/03
ASSIGNMENT
AGREEMENT made as of this ___ day of December, 2003 (the “Assignment
Agreement”) between General Electric Capital Corporation (“GE Capital”), with offices at 000
Xxxxxxx 0, Xxxxxxx, XX 00000 and Compound Therapeutics Inc. (“Compound”) with offices at 0000 Xxxx
Xxxxxx, Xxxxxxx, XX 00000.
W I T N E S S E T H :
WHEREAS, on April 30, 2003 (the “Filing Date”), Phylos, Inc. (the “Debtor”) filed its Chapter
11 Petition with the U.S. Bankruptcy Court, District of Delaware (the “Court”), Docket No. 03-11303
(the “Bankruptcy Case”);
WHEREAS, pursuant to two (2) Orders of the Court, each dated December 4, 2003 (the “Sale
Orders”), the Debtor was authorized to enter into an agreement with Compound, whereby Compound
would acquire the Debtor’s intellectual property assets and certain equipment assets (collectively
the “Acquired Assets”) for $4,000,000.00;
WHEREAS, GE Capital has agreed to finance part of the purchase price for the Acquired Assets
and sell GE Capital’s Assigned Interest (defined below) as follows: (a) GE Capital will loan
Compound $500,000.00 and Compound shall execute a term note in the amount of $500,000.00 in favor
of GE Capital (“Term Loan”), to be secured by certain collateral which shall be defined and
documented in separate transaction documents; and (b) GE Capital shall, through this Assignment
Agreement, transfer to Compound its Assigned Interest, including its Proof of Claim (defined
below), as well as any and all claims it has against the Debtor in
29
H&D Comments 12/10/03
exchange for certain Series A preferred stock in Compound to be issued to GE Capital in connection
herewith;
30
H&D Comments 12/10/03
WHEREAS, GE Capital and the Debtor entered into a certain Master Loan and Security Agreement,
dated November 28, 2001 (the “Master Loan Agreement”), and, pursuant thereto and in connection
therewith, the Debtor executed and delivered to GE Capital three (3) promissory notes (the
“Notes”) in the original principal amounts of $1,491,168.81, $276,229.63 and $241,261.04
respectively on December 4, 2001, June 20, 2002 and October 29, 2002, together with three (3)
collateral schedules (nos. 4127175-001, 002 and 003)(the “Collateral Schedules”) describing the
assets in which GE Capital maintains a security interest (the Master Loan Agreement, Notes and
Collateral Schedules, as amended an in effect, collectively referred to as the “Loan Documents”).
WHEREAS, GE Capital filed with the Secretary of State of the State of Delaware UCC-1 financing
statements (the “Financing Statements”) naming the Debtor as debtor and GE Capital as secured
party, perfecting GE Capital’s security interest in the assets detailed on the Collateral Schedules
(the “GE Equipment”);
WHEREAS, on November 18, 2003, GE Capital caused to be filed the Amended Proof of Claim in the
Bankruptcy Proceeding, whereby it asserted a claim against the Debtor in the amount of
$1,463,202.80 for outstanding principal and interest due as of the Filing Date (the “Proof of
Claim”);
WHEREAS, GE Capital and Compound have received oral confirmation that an Order of the Court
has been approved (the “Stay Relief Order”), pursuant to which the automatic stay with respect to
the Debtor’s Bankruptcy Proceeding was modified to allow GE Capital to recover, take possession
and/or dispose of the GE Equipment;
WHEREAS, GE Capital is desirous of selling and Compound is desirous of purchasing GE’s
Assigned Interest in the Bankruptcy Proceeding, together with any and all of GE Capital’s other
rights under the Loan Documents against the Debtor;
H&D Comments 12/10/03
NOW THEREFORE, it is hereby AGREED by and between GE Capital and Compound as follows:
1. Recitals. The foregoing recitals are incorporated herein by reference and made a
part hereof;
2. Assignment. GE Capital hereby assigns to Compound all of GE Capital’s right, title
and interest in and to all claims of GE Capital against the Debtor, including such claims and
obligations evidenced by the Proof of Claim or otherwise arising under the Loan Documents, together
with all right, title and interest of GE Capital under and in connection with the Loan Documents
and in and to any collateral securing the payment and performance of such claims, obligations and
Loan Documents (collectively, the “Assigned Interest”). The foregoing assignment of the Assigned
Interest shall be effective upon the receipt by GE Capital of the Shares (defined below), certified
copies of director and, to the extent required, shareholder resolutions of Compound authorizing
this transaction; certified copy of the filed Amendment to the Restated Certificate of
Incorporation of Compound, and executed copies of the following documents (the “Ancillary
Documents”):
(i) Second Amendment to the Investors Rights Agreement
(ii) First Amendment to the Stockholders’ Voting Agreement
(iii) First Amendment to the Right of First Refusal Agreement
(iv) Waiver of Rights Pursuant to Section 3.1 of the Investor Rights Agreement
3. Purchase Price. As consideration for the assignment of the Assigned Interest and
for any and all other consideration provided by GE Capital in connection with Compound’s
acquisition of the Acquired Assets, and subject to the effectiveness of the assignment described in
Section 2 above, Compound shall cause to be delivered to GE Capital,
H&D Comments 12/10/03
1,600,000 shares of Series “A” Convertible Preferred Stock of Compound (the “Shares”). Upon
the effectiveness hereof, Compound shall issue and deliver to GE Capital, stock certificates
evidencing GE Capital’s ownership of the Shares.
4. Representations and Warranties of GE Capital. GE Capital represents and warrants
to Compound as follows:
A. The Seller is the legal and beneficial owner of 100 % of the Assigned Interest, free and
clear of any adverse claim or encumbrance (collectively “Liens”) and, except as provided for in
this Assignment Agreement, the Assigned Interest is not subject to any prior sale, transfer,
assignment or participation by such Lender or any agreement to assign, convey, transfer or
participate, in whole or in part, and upon the effectiveness of the transactions contemplated
hereby, and the filing of appropriate notice of transfer documents with the Bankruptcy Court in
accordance with Bankruptcy Rule of Procedure 3001(e), Compound will own and have good legal and
beneficial title to the Proof of Claim, free and clear of all Liens;
B. (i) The Proof of Claim reflects the principal and interest outstanding under the Notes,
exclusive of late charges, costs, attorneys’ fees and any and all other fees and penalties provided
for in the Loan Documents, as of the Filing Date, (ii) no less than the principal balance of the
amount set forth in the Proof of Claim was justly due and owing from the Debtor to GE Capital as of
the Filing Date, (iii) such amount remains unpaid and outstanding as of the date hereof, (iv) the
Proof of Claim has not been revoked, withdrawn, amended or modified and no right thereunder has
been waived, all statements in such Proof of Claim are true and correct as of the date hereof, and
no objections have been filed or threatened in writing with respect to the Assigned Interest, and
(v) the Proof of Claim was filed prior to any bar date which may have been established by the
Bankruptcy Court for filing such proofs of claim;
H&D Comments 12/10/03
C. GE Capital has not received any notice that (i) any payment or other transfer made to or
for the account of GE Capital from or on account of any Assigned Interest is or may be void or
voidable as an actual or constructive fraudulent transfer or as a preferential transfer or (ii) the
Assigned Interest, or any portion thereof, is void, voidable, unenforceable or subject to any
claim, counterclaim, setoff, defense, encumbrance, action, litigation or defect;
D. True, correct and complete copies of the Master Loan Agreement, the Notes, the Collateral
Schedules, the Proof of Claim and the Financing Statements, as amended and in effect on the date
hereof, are attached hereto as Exhibits A, B, C, D and E, respectively;
E. The amounts due and owing by the Debtor to GE Capital under the Assigned Interest is
secured by a valid and duly perfected security interest in GE Equipment;
F. It has full power and authority and has taken all action necessary to execute and deliver
all the documents contemplated by this Assignment Agreement, the Term Loan and to fulfill its
obligations under, and to consummate the transactions contemplated by, the Assignment Agreement
and, to its knowledge, no governmental authorizations or other authorizations are required in
connection with the GE Capital’s performance hereunder, and the Assignment Agreement constitutes a
legal, valid and binding obligation of GE Capital; and
G. That it (i) is a sophisticated party with respect to this transaction, has adequate
information concerning the business and financial condition of Compound and the Debtor and all
other credit parties to make an informed decision regarding the sale of the Assigned Interest; (ii)
has independently and without reliance upon anyone and based on such information it deems
appropriate made its own analysis and decision to enter into this Assignment Agreement;
H&D Comments 12/10/03
H. Investment Representations. GE Capital further represents and warrants to Compound
as follows:
(i). That it is acquiring the Shares, and the shares of Common Stock into which the Shares may
be converted, for its own account for investment and not with a view to, or for sale in connection
with, any distribution thereof, nor with any present intention of distributing or selling the same;
and, except as contemplated by this Assignment Agreement, GE Capital has no present or contemplated
agreement, undertaking, arrangement, obligation, indebtedness or commitment providing for the
disposition thereof. GE Capital is an “accredited investor” as defined in Rule 501(a) under the
Securities Act of 1933, as amended (the “Securities Act”).
(ii). GE Capital has full power and authority to enter into and to perform this Assignment
Agreement and the transactions contemplated hereby, including, without limitation, the acquisition
of the Shares. GE Capital has not been organized, reorganized or recapitalized specifically for
the purpose of investing in Compound.
(iii). GE Capital has carefully reviewed the representations concerning Compound contained in
this Assignment Agreement, and has made detailed inquiry concerning Compound, its business and its
personnel; the officers of Compound have made available to GE Capital any and all written
information which it has requested and have answered to GE Capital’s satisfaction all inquiries
made by GE Capital; and GE Capital has sufficient knowledge and experience in finance and business
that it is capable of evaluating the risks and merits of its investment in Compound and GE Capital
is able financially to bear the risks thereof.
I. The maximum liability of GE Capital to Compound in respect of breaches of any
representation or warranty shall not exceed, in the aggregate, an amount equal to (i) the Shortfall
(as defined below in Section 8) reduced by (ii) any amount paid on account of the disallowance of
any claim under Section 8.
H&D Comments 12/10/03
5. Transfer of Shares.
A. Restricted Shares. “Restricted Shares” means (i) the Shares, (ii) the shares of
Common Stock issued or issuable upon conversion of the Shares, (iii) any shares of capital stock of
Compound acquired by GE Capital pursuant to the Investor Rights Agreement dated as of March 31,
2003, as amended by First Amendment dated as of September 25, 2003 and Second Amendment dated as of
December ___, 2003, by and among Compound, GE Capital and the other individuals and entities listed
on the signature pages thereto, or the Right of First Refusal and Co-Sale Agreement dated as of
March 31, 2003, as amended by First Amendment dated as of December ___, 2003, by and among Compound,
GE Capital and the other persons and entities listed on the signature pages thereto, and (iv) any
other shares of capital stock of Compound issued in respect of such shares (as a result of stock
splits, stock dividends, reclassifications, recapitalizations, or similar events);
provided, however, that shares of Common Stock which are Restricted Shares shall
cease to be Restricted Shares (x) upon any sale pursuant to a registration statement under the
Securities Act, Section 4(1) of the Securities Act or Rule 144 under the Securities Act or (y) at
such time as they become eligible for sale under Rule 144(k) under the Securities Act.
B. Requirements for Transfer.
(i). Restricted Shares shall not be sold or transferred unless either (i) they first shall
have been registered under the Securities Act, or (ii) Compound first shall have been furnished
with an opinion of legal counsel, reasonably satisfactory to Compound, to the effect that such sale
or transfer is exempt from the registration requirements of the Securities Act.
(ii). Notwithstanding the foregoing, no registration or opinion of counsel shall be required
for (i) a transfer by GE Capital to an Affiliated Party (as such term is defined below) of GE
Capital, (ii) a transfer by GE Capital to any shareholder or parent entity or any, direct or
H&D Comments 12/10/03
indirect, wholly-owned subsidiary of GE Capital; provided that the transferee in each case agrees
in writing to be subject to the terms of this Section 5 to the same extent as if it were GE
Capital, or (iii) a transfer made in accordance with Rule 144 under the Securities Act.
“Affiliated Party” shall mean any person or entity which, directly or indirectly, controls, is
controlled by or is under common control with GE Capital.
(iii). Each certificate representing Restricted Shares shall bear a legend substantially in
the following form:
“The shares represented by this certificate have not been
registered under the Securities Act of 1933, as amended, and may not
be offered, sold or otherwise transferred, pledged or hypothecated
unless and until such shares are registered under such Act or an
opinion of counsel satisfactory to the Company is obtained to the
effect that such registration is not required.”
The foregoing legend shall be removed from the certificates representing any Restricted
Shares, at the request of the holder thereof, at such time as they become eligible for resale
pursuant to Rule 144(k) under the Securities Act.
(iv). Compound shall, at all times during which it is neither subject to the reporting
requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended (the
“Exchange Act”), nor exempt from reporting pursuant to Rule 12g3-2(b) under the Exchange Act, upon
the written request of GE Capital, provide in writing to GE Capital and to any prospective
transferee of any Restricted Shares of GE Capital the information concerning Compound described in
Rule 144A(d)(4) under the Securities Act (“Rule 144A Information”). Compound also shall, upon the
written request of GE Capital, cooperate with and assist GE Capital or any member of the National
Association of Securities Dealers, Inc. PORTAL system in applying to designate and thereafter
maintain the eligibility of the Restricted Shares for trading through PORTAL. Compound’s
obligations under this Section 5B.(iv) shall at all times be contingent upon receipt from the
prospective transferee of Restricted Shares of a written agreement to take all reasonable
precautions to safeguard the Rule 144A Information from
H&D Comments 12/10/03
disclosure to anyone other than persons who will assist such transferee in evaluating the purchase
of any Restricted Shares.
6. Representations and Warranties of Compound. Compound represents and warrants to GE
Capital as follows:
A. It has complied with all conditions, and obtained all necessary consents, to the issuance
of the Shares;
B. It has determined to bid for the Acquired Assets on its own without any representation,
warranty or promise from GE Capital, except as set forth herein;
C. It has full power and authority and has taken all action necessary to execute and deliver
all the documents contemplated by this Assignment Agreement, the Term Loan and to fulfill its
obligations under, and to consummate the transactions contemplated by, the Assignment Agreement and
no governmental authorizations or other authorizations are required in connection therewith, and
the Assignment Agreement constitutes a legal, valid and binding obligation of Compound;
D. It is (i) a sophisticated party with respect to the purchase of the Assigned Interest, has
adequate information concerning the business and financial condition of the Debtor to make an
informed decision regarding the purchase of such Assigned Interest and to acquire the Acquired
Assets, (ii) has independently and without reliance upon anyone and based upon such information as
it deems appropriate, made its own analysis and decision to enter into this Assignment Agreement;
and
E. Compound (i) acknowledges that GE Capital may be relying in part on certain representations
and warranties by Compound set forth in Section 3 of that certain Series
H&D Comments 12/10/03
A Convertible Preferred Stock Purchase Agreement, dated as of March 31, 2003 (the “Purchase
Agreement”); (ii) represents and warrants that the representations and warranties set forth in
Sections 3.2, 3.3(b)-(e) and 3.7 through 3.21 of the Purchase Agreement were true as of March 31,
2003 (except to the extent that such representations and warranties were made as of a specific
date, and as to such representations and warranties, the same were true as of such specified date);
and (iii) to the knowledge of Compound, there has not been since March 31, 2003 any change in the
representations and warranties which would reasonably be expected to have a material adverse effect
on the business, assets or condition (financial or otherwise) (a “Material Adverse Effect”) of
Compound.
F. Compound further represents and warrants as follows: (i) Compound is a corporation duly
organized, validly existing and in good standing under the laws of the State of Delaware and has
full corporate power and authority to conduct its business as presently conducted and as proposed
to be conducted by it and to enter into and perform this Assignment Agreement and to carry out the
transactions contemplated by this Assignment Agreement. Compound is duly qualified to do business
as a foreign corporation and is in good standing in the Commonwealth of Massachusetts and in every
other jurisdiction in which the failure so to qualify would have a Material Adverse Effect on
Compound. Compound has furnished to GE Capital a complete and accurate copy of its Restated
Certificate of Incorporation, as amended and presently in effect; (ii) the authorized capital stock
of Compound (immediately prior to the closing of the transactions contemplated by this Assignment
Agreement) consists of (a) 30,000,000 shares of Common Stock, $.001 par value per share, of which
5,300,000 shares are issued and outstanding, and (b) 17,733,336 shares of Series A Convertible
Preferred Stock, of which 8,666,672 shares are issued or outstanding; (iii) the issuance of the
Shares in accordance with this Assignment Agreement, and the issuance of the shares of Common Stock
issuable upon
H&D Comments 12/10/03
conversion of the Shares, have been, or will be on or prior to the closing of the transactions
contemplated by this Assignment Agreement, duly authorized by all necessary corporate action on the
part of Compound, and all such shares have been duly reserved for issuance; the Shares when so
issued in accordance with the provisions of this Assignment Agreement, and the shares of Common
Stock issuable upon conversion of the Shares, when issued upon such conversion, will be duly and
validly issued, fully paid and nonassessable, free of any preemptive rights under applicable law or
its Restated Certificate of Incorporation, as amended, or similar rights pursuant to any agreement
to which Compound is a party, and free of any restriction on transfer, except pursuant to the
Investors Rights Agreement, as amended, Stockholders’ Voting Agreement, as amended, and the Right
of First Refusal Agreement, as amended, and applicable federal and state securities laws. The
rights, privileges and preferences of the Series A Convertible Preferred Stock will be as stated in
the Restated Certificate of Incorporation, as amended; (iv) the execution, delivery and performance
by Compound of this Assignment Agreement, and the consummation by Compound of the transactions
contemplated hereby, have been duly authorized by all necessary corporate action; this Assignment
Agreement has been duly executed and delivered by Compound and constitutes a valid and binding
obligation of Compound enforceable in accordance with its terms, subject as to enforcement of
remedies to applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting
generally the enforcement of creditors’ rights and subject to a court’s discretionary authority
with respect to the granting of a decree ordering specific performance or other equitable remedies;
the execution and delivery of this Assignment Agreement, the consummation of the transactions
contemplated hereby and the compliance with its provisions by Compound will not (a) conflict with
or violate any provision of the Restated Certificate of Incorporation of Compound, (b) require on
the part of Compound any filing with, or any permit, order, authorization, consent or approval of,
any
H&D Comments 12/10/03
court, arbitrational tribunal, administrative agency or commission or other governmental or
regulatory authority or agency (each, a “Governmental Entity”), (c) conflict with, result in a
breach of, constitute (with or without due notice or lapse of time or both) a default under, result
in the acceleration of obligations under, create in any party the right to accelerate, terminate,
modify or cancel, or require any notice, consent or waiver under, any contract, lease, sublease,
license, sublicense, franchise, permit, indenture, agreement or mortgage for borrowed money,
instrument of indebtedness, any mortgage, pledge, security interest, encumbrance, charge, or other
lien (whether arising by contract or by operation of law) (a “Security Interest”) or other
arrangement to which Compound is a party or by which Compound is bound or to which its assets are
subject, other than any of the foregoing events listed in this clause (c) which do not and will
not, individually or in the aggregate, have a Material Adverse Effect, (d) result in the imposition
of any Security Interest upon any assets of Compound or (e) violate any order, writ, injunction,
decree, statute, rule or regulation applicable to Compound or any of its properties or assets; (v)
no consent, approval, order or authorization of, or registration, qualification, designation,
declaration or filing with, any Governmental Entity is required on the part of Compound in
connection with the issuance of the Shares, the issuance of the shares of Common Stock issuable
upon conversion of the Shares or in connection with the closing of the transactions contemplated
hereby, except such filings as shall have been made prior to and shall be effective on and as of
the closing of the transactions contemplated hereby and such filings required to be made after such
closing under applicable federal and state securities laws, and will be made by Compound in
accordance with such laws; and (vi) based on the representations made by GE Capital in this
Assignment Agreement, the issuance of the Shares will be in compliance with applicable federal and
state securities laws.
H&D Comments 12/10/03
G. The maximum liability of Compound to GE Capital in respect of breaches of any such
representations or warranties, shall not exceed in the aggregate, $1,000,000.
7. Further Documents. GE Capital and Compound agree to execute the Notice of
Assignment of Claim annexed hereto as Exhibit “F” and each agree to further execute any of the
documents, and take such further actions, as the other may reasonably require to effectuate the
terms of this Assignment Agreement and to cooperate and assist in enforcing the Assigned Interest.
GE Capital hereby waives any notice requirement imposed by Rule 3001 of the Federal Rules of
Bankruptcy Procedure and any applicable local bankruptcy rules, and consents to the substitution of
Compound for GE Capital for all purposes in the Bankruptcy Case, including, without limitation, for
purposes of voting and receipt of distributions with respect to the Assigned Interest. The Notice
of Assignment of Claim attached to this Assignment Agreement and incorporated herein by reference
may be filed by Compound with the Bankruptcy Court as evidence of the transfer. GE Capital hereby
waives any objection to the transfer of the Assigned Interest, and stipulates and agrees that an
order may be entered recognizing this Assignment Agreement as an unconditional assignment and
Compound herein as the valid owner of the Assigned Interest. GE Capital grants unto Compound full
authority to do all things reasonably necessary to enforce the Assigned Interest and GE Capital’s
rights thereunder pursuant to this Assignment Agreement, including the exercise of voting or
similar rights with respect to the Assigned Interest.
8. Challenge To Assigned Interest. In the event that the Assigned Interest is
disallowed in whole or in part by consent or by order of the Court, Compound agrees that GE Capital
shall have no liability as long as the amount allowed is no less than $1,300,000. To the extent
that the Assigned Interest is reduced to an amount less than such amount, then GE Capital shall be
liable to Compound for damages in an amount equal to the difference between (a) what
H&D Comments 12/10/03
Compound would have received as a distribution in the Bankruptcy Proceeding had the Assigned
Interest been allowed in the amount of $1,300,000; and (b) the amount Compound actually received as
a distribution in the Bankruptcy Proceeding on its allowed claim (this difference, the
“Shortfall”). Compound shall have no authority to consent to the reduction below $1,300,000 of the
Assigned Interest without GE Capital’s specific written consent (which shall not be unreasonably
withheld) unless with respect to such proposed reduced amount, Compound will not seek any damages
from GE Capital. If any action, motion or other proceeding is undertaken by the Debtor, a trustee
or any other party in interest to reduce, expunge, avoid, challenge or modify (a “Claim Reduction”)
GE Capital’s Assigned Interest, then GE Capital shall be entitled to control all decisions with
respect to a Claim Reduction (including the defense of any motion or adversary proceeding), in each
case at GE Capital’s sole cost and expense, unless Compound agrees in writing not to seek any
damages from GE Capital as a result of a Claim Reduction.
9. Miscellaneous. This Agreement shall be binding upon and inure to the benefit of
GE Capital and Compound and their respective successors and assigns. This Agreement shall be
governed by and construed in accordance with the laws of the State of Connecticut, constitutes the
full and complete agreement of the parties and may not be modified, except in a writing signed by
all parties hereto. This Agreement may be executed by facsimile signature and in counterparts with
the same force and effect as if executed in a single, integrated original document. GE Capital
agrees that in the event GE Capital shall receive any payments or distributions or notices with
respect to or relating to the Assigned Interest after the date hereof, GE Capital shall accept the
same as Compound’s agent and shall hold the same in trust on behalf of and for the sole benefit of
Compound, and shall promptly deliver the same forthwith to Compound in the same form received (free
of any withholding, set-off, claim or deduction of any kind), within two (2) business days in the
case of cash and within five (5) business days in the
H&D Comments 12/10/03
case of other property, which are in good deliverable form with the endorsement of GE Capital when
necessary or appropriate. All representations and warranties contained herein shall survive the
execution and delivery of this Assignment Agreement and the purchase and sale of the Assigned
Interest and shall inure to the benefit of and be binding upon the parties hereto and their
respective successors and assigns.
10. Indemnity. Compound hereby and herewith indemnifies GE Capital and holds it
harmless (including reasonable legal fees) with respect to any action taken by Compound under the
Loan Documents or with respect to the Assigned Interest from and after the date hereof. GE
Capital hereby indemnifies and holds Compound harmless (including reasonable legal fees), from and
against any claims or damages Compound may sustain as a result of any actions of GE Capital with
respect to the Loan Documents or the Assigned Interest taken prior to the date hereof.
11. Effectiveness. The effectiveness of this Assignment Agreement shall occur upon
the execution and delivery by the parties of all documents with respect to the contemplated Term
Loan and the issuance of the Shares including those specified in Section 2 hereof. If for any
reason the Term Loan, this Assignment Agreement, the issuance of shares and the delivery of
documents contemplated hereby do not occur on or before December 31, 2003, then, on written notice
to the other, all the contemplated transactions may be declared null and void.
H&D Comments 12/10/03
IN WITNESS WHEREOF, this Assignment Agreement has been executed and delivered as of the date
first written above.
GENERAL ELECTRIC CAPITAL CORPORATION | ||||||
By: | ||||||
Its: | ||||||
COMPOUND THERAPEUTICS INC. | ||||||
By: | ||||||
Its: | ||||||