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EXHIBIT 10.15
Customer No. 1261
MASTER LOAN AND SECURITY AGREEMENT
THIS AGREEMENT dated as of May 27, 1999, is made by ACLARA
Biosciences, Inc. (the "Borrower"), a Delaware corporation having its principal
place of business and chief executive office at 0000 Xxxxx Xxx, Xxxxxxx,
Xxxxxxxxxx, 00000 in favor of Transamerica Business Credit Corporation, a
Delaware corporation (the "Lender"), having its principal office at Riverway II,
West Office Tower, 0000 Xxxx Xxxxxxx Xxxx, Xxxxxxxx, Xxxxxxxx 00000.
WHEREAS, the Borrower has requested that the Lender make Loans to it from
time to time; and
WHEREAS, the Lender has agreed to make such Loans on the terms and
conditions of this Agreement.
NOW, THEREFORE, in consideration of the premises and to induce the Lender
to extend credit, the Borrower hereby agrees with the Lender as follows:
SECTION 1. DEFINITIONS.
As used herein, the following terms shall have the following meanings, and
shall be equally applicable to both the singular and plural forms of the terms
defined:
Agreement shall mean this Master Loan and Security Agreement together with all
schedules and exhibits hereto, as amended, supplemented, or otherwise modified
from time to time.
Applicable Law shall mean the laws of the State of Illinois (or any other
jurisdiction whose laws are mandatorily applicable notwithstanding the parties'
choice of Illinois law) or the laws of the United States of America, whichever
laws allow the greater interest, as such laws now exist or may be changed or
amended or come into effect in the future.
Business Day shall mean any day other than a Saturday, Sunday, or public holiday
or other day that banks in New York City, New York or Chicago, Illinois are
authorized by law to be closed.
Code shall have the meaning specified in Section 8(d).
Collateral shall have the meaning specified in Section 2.
Collateral Access Agreement shall mean any landlord waiver, mortgagee waiver,
bailee letter, or similar acknowledgement of any warehouseman or processor in
possession of any Equipment.
Effective Date shall mean the date on which all of the conditions specified in
Section 3.3 shall have been satisfied.
Equipment shall have the meaning specified in Section 2.
Equipment Loans shall mean all Loans the proceeds of which are used to finance
the costs of Equipment.
Event of Default shall mean any event specified in Section 7.
Financial Statements shall have the meaning specified in Section 6.1.
GAAP shall mean generally accepted accounting principles in the United States
of America, as in effect from time to time.
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Intellectual Property shall mean all patents, patent applications, patent
rights, trademarks, trademark applications, trademark rights, trade names, trade
name rights, service marks and copyrights (whether registered or not) now or in
the future owned or possessed by the Borrower.
Loans shall mean the loans and financial accommodations made by the Lender to
the Borrower in accordance with the terms of this Agreement and the Notes.
Loan Documents shall mean, collectively, this Agreement, the Notes, and all
other present and future documents, agreements, certificates, and instruments
delivered by the Borrower under, in connection with or relating to this
Agreement, or any other present or future instrument or agreement between Lender
and Borrower, as each of the same may be amended, modified, extended, restated
or supplemented from time to time.
Material Adverse Change shall mean, with respect to any Person, a material
adverse change in the business, prospects, operations, results of operations,
assets, liabilities, or condition (financial or otherwise) of such Person taken
as a whole.
Material Adverse Effect shall mean, with respect to any Person, a material
adverse effect on the business, operations, results of operations, assets,
liabilities, or condition (financial or otherwise) of such Person taken as a
whole.
Note shall mean each Equipment Loan Promissory Note in the form of Exhibit B
attached hereto or Tenant Improvement Promissory Note in the form of Exhibit C
attached hereto made by the Borrower in favor of the Lender, as amended,
supplemented, or otherwise modified from time to time.
Obligations shall mean and include all loans (including the Loans), advances,
debts, liabilities, obligations, covenants and duties owing by Borrower to
Lender of any kind or nature, present or future, whether or not evidenced by the
Notes or any note, guaranty or other instrument, whether or not arising under or
in connection with, this Agreement, any other Loan Document or any other present
or future instrument or agreement, whether or not for the payment of money,
whether arising by reason of an extension of credit, opening, guaranteeing or
confirming of a letter of credit, loan, guaranty, indemnification or in any
other manner, whether direct or indirect (including those acquired by
assignment, purchase, discount or otherwise), whether absolute or contingent,
due or to become due, now due or hereafter arising and however acquired
(including without limitation all loans previously made by Lender to Borrower).
The term includes, without limitation, all interest (including interest accruing
on or after a bankruptcy, whether or not an allowed claim), charges, expenses,
commitment, facility, closing and collateral management fees, letter of credit
fees, reasonable attorneys' fees, taxes and any other sum properly chargeable to
Borrower under this Agreement, the other Loan Documents or any other present or
future agreement between Lender and Borrower.
Permitted Encumbrances shall mean any recorded or unrecorded matter affecting
the real property known as 0000 Xxxx Xxxxxx, Xxxxxxxx Xxxx, Xxxxxxxxxx ("Real
Property") or the Lease between Borrower and The Pear Avenue Group dated March
1, 1999 ("Lease") existing on the date hereof, and any subsequent encumbrance on
the Real Property which does not materially affect the use of the Real Property
for the purposes contemplated by the Lease except, in each case, any lien or
encumbrance on Borrower's leasehold interest under the Lease, or other lien or
encumbrances arising as a result of the Borrower's actions or inactions.
Permitted Indebtedness shall mean all (a) indebtedness under the Loan Documents,
(b) trade or other similar indebtedness incurred in the ordinary course of
business (but not for borrowed money) and (i) not more than 75 days past due, or
(ii) being contested good faith by appropriate proceedings, (c) indebtedness to
The Pear Avenue Group not to exceed the amount permitted pursuant to the
original Lease.
Permitted Liens shall mean such of the following as to which no enforcement,
collection, execution, levy, or foreclosure proceeding shall have been
commenced: (a) liens for taxes, assessments, and other governmental
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charges or levies or the claims or demands of landlords, carriers,
warehousemen, mechanics, laborers, materialmen, and other like Persons arising
by operation of law in the ordinary course of business for sums which are not
yet due and payable, or liens which are being contested in good faith by
appropriate proceedings diligently conducted and with respect to which adequate
reserves are maintained to the extent required by GAAP; (b) deposits or pledges
to secure the payment of worker's compensation, unemployment insurance, or
other social security benefits or obligations, public or statutory obligations,
surety or appeal bonds, bid or performance bonds, or other obligations of a
like nature incurred in the ordinary course of business; (c) licenses,
restrictions, or covenants for or on the use of the Equipment which do not
materially impair either the use of the Equipment in the operation of the
business of the Borrower or the value of the Equipment; and (d) attachment or
judgment liens that do not otherwise constitute an Event of Default, so long as
an appeal or proceeding for review is being diligently prosecuted in good faith
and reserves, bonds or other security acceptable to Lender have been
established or provided to Lender or are fully covered by insurance; (e) a lien
on any item of equipment created substantially simultaneously with the
acquisition of such equipment for the purpose of financing such acquisition
provided that such lien will only attach to the equipment acquired; and (f)
Permitted Encumbrances.
Person shall mean any individual, sole proprietorship, partnership, limited
liability partnership, joint venture, trust, unincorporated organization,
association, corporation, limited liability company, institution, entity,
party, or government (including any division, agency, or department thereof),
and the successors, heirs, and assigns of each.
Schedule shall mean each Schedule in the form of Schedule A hereto delivered by
the Borrower to the Lender from time to time.
Solvent means, with respect to any Person, that as of the date as to which such
Person's solvency is measured:
(a) the fair saleable value of its assets is in excess of the total
amount of its liabilities (including contingent liabilities as valued in
accordance with GAAP) as they become absolute and matured;
(b) it has sufficient capital to conduct its business; and
(c) it is able generally to meet its debts as they mature.
Taxes shall have the meaning specified in Section 5.5.
Tenant Improvements shall mean any additions, accessions, improvements,
replacements and attachments financed with the Loans and made to the Real
Property.
Tenant Improvement Loans shall mean all Loans the proceeds of which are used to
finance the costs of Tenant Improvements.
SECTION 2. CREATION OF SECURITY INTEREST; COLLATERAL. The Borrower hereby
assigns and grants to the Lender a continuing general, first priority lien on,
and security interest in, all the Borrower's right, title, and interest in and
to the collateral described in the next sentence (the "Collateral") to secure
the payment and performance of all the Obligations. The Collateral consists of
(i) all equipment set forth on all the Schedules delivered from time to time
under the terms of this Agreement (the "Equipment"), together with all present
and future additions, parts, accessories, attachments, substitutions, repairs,
improvements, and replacements thereof or thereto, and any and all proceeds
thereof, including, without limitation, proceeds of insurance and all manuals,
blueprints, know-how, warranties, and records in connection therewith, all
rights against suppliers, warrantors, manufacturers, sellers, or others in
connection therewith, and together with all substitutes for any of the
foregoing and (ii) all leasehold rights and interests of the Borrower in the
Real Property as described in the Lease. Notwithstanding the foregoing, Lender
shall not file fixture financing statements with respect to the Collateral
constituting Tenant Improvements.
SECTION 3. THE CREDIT FACILITY.
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SECTION 3.1. BORROWINGS. At the Borrower's request, Lender,
subject to the terms of this Agreement, agrees to make Loans to the Borrower of
$5,000,000 in the aggregate. Such Loans shall also be limited to $2,700,000 for
Tenant Improvement Loans and $2,300,000 for Equipment Loans. Each Loan shall be
in an amount not less than $100,000, and in no event shall the sum of the
aggregate Loans made exceed the amount of the Lender's written commitment to
the Borrower in effect from time to time. Notwithstanding anything herein to
the contrary, the Lender shall be obligated to make the initial Loan and each
other Loan only after the Lender, in its sole discretion, determines that the
applicable conditions for borrowing contained in Sections 3.3 and 3.4 are
satisfied. The timing and financial scope of Lender's obligation to make Loans
hereunder are limited as set forth in a commitment letter executed by Lender
and Borrower, dated as of March 4, 1999 and attached hereto as Exhibit A (the
"Commitment Letter"). In the event of any inconsistency between the terms and
conditions of this Agreement and the Commitment Letter, this Agreement shall
control.
SECTION 3.2. APPLICATION OF PROCEEDS. The Borrower shall not
directly or indirectly use any proceeds of the Loans, or cause, assist, suffer,
or permit the use of any proceeds of the Loans, for any purpose other than for
the purchase, acquisition, installation or upgrading of Equipment and Tenant
Improvements or the reimbursement of the Borrower for its purchase,
acquisition, installation or upgrading of Equipment and Tenant Improvements.
SECTION 3.3. CONDITIONS TO INITIAL LOAN.
(a) The obligation of the Lender to make the initial Loan is
subject to the Lender's receipt of the following, each dated the date of the
initial Loan or as of an earlier date acceptable to the Lender, in form and
substance satisfactory to the Lender and its counsel:
(i) completed requests for information (Form UCC-11)
listing all effective Uniform Commercial Code financing statements
naming the Borrower as debtor and all tax lien, judgment, and
litigation searches for the Borrower as the Lender shall deem
necessary or desirable;
(ii) Uniform Commercial Code financing statement (Form UCC-1)
duly executed by the Borrower (naming the Lender as secured party
and the Borrower as debtor and in form acceptable for filing in all
jurisdictions that the Lender deems necessary or desirable to
perfect the security interests granted to it hereunder) and, if
applicable, termination statements or other releases duly filed in
all jurisdictions that the Lender deems necessary or desirable to
perfect and protect the priority of the security interests granted
to it hereunder in the Equipment related to such initial Loan;
(iii) a Note duly executed by the Borrower evidencing the
amount of such Loan;
(iv) a leasehold mortgage or an assignment of leases and
rentals in connection with a lease dated March 1, 1999 between
Borrower and The Pear Avenue Group, as lessor in such form as
Lender shall deem necessary or desirable in its sole discretion and
a Collateral Access Agreement duly executed by the lessor or
mortgagee, as the case may be, of each premises where the Equipment
is located;
(v) certificates of insurance required under Section 5.4 of
this Agreement together with loss payee endorsements for all such
Policies naming the Lender as lender loss payee and as an additional
insured;
(vi) a certificate of the Secretary or an Assistant Secretary
of the Borrower ("Secretary's Certificate") certifying (A) that
attached to the Secretary's Certificate is a true, complete, and
accurate copy of the resolutions of the Board of Directors of the
Borrower (or a unanimous consent of directors in lieu thereof)
authorizing the execution, delivery, and performance of this
Agreement, the other Loan Documents, and the transactions
contemplated hereby and thereby, and that such resolutions have not
been amended or modified since the date
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of such certification and are in full force and effect; (B) the incumbency,
names, and true signatures of the officers of the Borrower authorized to
sign the Loan Documents to which it is a party; (C) that attached to the
Secretary's Certificate is a true and correct copy of the Articles or
Certificate of Incorporation of the Company, as amended, which Articles or
Certificate of Incorporation have not been further modified, repealed or
rescinded and are in full force and effect; (D) that attached to the
Secretary's Certificate of the Borrower is a true and correct copy of
the Bylaws, as amended, which Bylaws of the Company have not been further
modified, repealed or rescinded and are in full force and effect; and (E)
that attached to the Secretary's Certificate of the Borrower is a valid
Certificate of Good Standing issued by the Secretary of the State of the
Borrower's state of incorporation;
(vii) the opinion of counsel for the Borrower covering such
matters incident to the transactions contemplated by this Agreement as
the Lender may reasonably require; and
(viii) such other agreements and instruments as the Lender deems
necessary in its sole and absolute discretion in connection with the
transactions contemplated hereby.
(b) There shall be no pending or, to the knowledge of the Borrower after
due inquiry, threatened litigation, proceeding, inquiry, or other action (i)
seeking an injunction or other restraining order, damages, or other relief with
respect to the transactions contemplated by this Agreement or the other Loan
Documents or thereby or (ii) which affects or could affect the business,
prospects, operations, assets, liabilities, or condition (financial or
otherwise) of the Borrower, except, in the case of clause (ii), where such
litigation, proceeding, inquiry, or other action could not reasonably be
expected to have a Material Adverse Effect in the good faith business judgment
of the Lender.
(c) The Borrower shall have paid all fees and expenses required to be paid
by it to the Lender as of such date.
(d) The security interests in the Equipment related to the initial Loan
granted in favor of the Lender under this Agreement shall have been duly
perfected and shall constitute first priority liens.
SECTION 3.4 CONDITIONS PRECEDENT TO EACH LOAN. The obligation of
the Lender to make each Loan is subject to the satisfaction of the following
conditions precedent:
(a) the Lender shall have received the documents, agreements, and
instruments set forth in Section 3.3(a)(i) through (iii and v) applicable to
such Loan, each in form and substance satisfactory to the Lender and its
counsel and each dated the date of such Loan or as of an earlier date
acceptable to the Lender;
(b) if the Loan is an Equipment Loan, the Lender shall have received a
Schedule of the Equipment related to such Loan, in form and substance
satisfactory to the Lender and its counsel, and the security interests in such
Equipment related to such Loan granted in favor of the Lender under this
Agreement shall have been duly perfected and shall constitute first priority
liens subject only to Permitted Liens;
(c) if the Loan is a Tenant Improvement Loan, the Lender shall have
received a certificate signed by an authorized officer of the Borrower
certifying that the requested Loan will be used to pay the cost of Tenant
Improvements incurred or to be incurred pursuant to Section 3.2.
(d) all representations and warranties contained in this Agreement and
the other Loan Documents shall be true and correct on and as of the date of
such Loan as if then made, other than representations and warranties that
expressly relate solely to an earlier date, in which case they shall have been
true and correct as of such earlier date;
(e) no Event of Default or event which with the giving of notice or the
passage of time, as both, would constitute an Event of Default shall have
occurred and be continuing or would result from the making
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of the requested Loan as of the date of such request; and
(f) the Borrower shall be deemed to have hereby reaffirmed and
ratified all security interests, liens, and other encumbrances heretofore
granted by the Borrower to the Lender.
SECTION 4. THE BORROWER'S REPRESENTATIONS AND WARRANTIES.
SECTION 4.1. Good Standing; Qualified to do Business. The
Borrower (a) is duly organized, validly existing, and in good standing under
the laws of the State of its organization, (b) has the power and authority to
own its properties and assets and to transact the businesses in which it is
presently, or proposes to be, engaged, and (c) is duly qualified and authorized
to do business and is in good standing in every jurisdiction in which the
failure to be so qualified could have a Material Adverse Effect on (i) the
Borrower, (ii) the Borrower's ability to perform its obligations under the Loan
Documents, or (iii) the rights of the Lender hereunder.
SECTION 4.2. Due Execution, etc. The execution, delivery, and
performance by the Borrower of each of the Loan Documents to which it is a party
are within the powers of the Borrower, do not contravene the organizational
documents, if any, of the Borrower, and do not (a) violate any law or
regulation, or any order or decree of any court or governmental authority, (b)
conflict with or result in a material breach of, or constitute a default under,
any material indenture, mortgage, or deed of trust or any material lease,
agreement, or other instrument binding on the Borrower or any of its properties,
or (c) require the consent, authorization by, or approval of or notice to or
filing or registration with any governmental authority or other Person. This
Agreement is, and each of the other Loan Documents to which the Borrower is or
will be a party, when delivered hereunder or thereunder, will be, the legal,
valid, and binding obligation of the Borrower enforceable against the Borrower
in accordance with its terms, except as enforceabilty may be limited by
bankruptcy, insolvency, or similar laws affecting creditors' rights generally
and by general principles of equity.
SECTION 4.3. Solvency; No Liens. The Borrower is Solvent and
will be Solvent upon the completion of all transactions contemplated to occur
hereunder (including, without limitation, the Loan to be made on the Effective
Date); the security interests granted herein constitute and shall at all times
constitute the first and only liens on the Collateral other than Permitted
Liens; and the Borrower is, or will be at the time additional Collateral is
acquired by it, the absolute owner of the Collateral with full right to
pledge, sell, consign, transfer, and create a security interest therein, free
and clear of any and all claims or liens in favor of any other Person other
than Permitted Liens.
SECTION 4.4. No Judgments, Litigation. No judgments are
outstanding against the Borrower nor is there now pending or, to the best of the
Borrower's knowledge after diligent inquiry, threatened any litigation,
contested claim, or governmental proceeding by or against the Borrower except
judgments and pending or threatened litigation, contested claims, and
governmental proceedings which would not, in the aggregate, have a Material
Adverse Effect on the Borrower.
SECTION 4.5. No Defaults. The Borrower is not in default or has
not received a notice of default under any material contract, lease, or
commitment to which it is a party or by which it is bound. The Borrower knows of
no dispute regarding any contract, lease, or commitment which could have a
Material Adverse Effect on the Borrower.
SECTION 4.6. Collateral Locations. On the date hereof, each
item of the Collateral constituting Equipment is located at the place of
business specified in the applicable Schedule.
SECTION 4.7. No Events of Default. No Event of Default has
occurred and is continuing nor has any event occurred which, with the giving of
notice or the passage of time, or both, would constitute an Event of Default.
Section 4.8. No Limitation on Lender's Rights. Except as
permitted herein, none of the Collateral is subject to contractual obligations
that may restrict or inhibit the Lender's rights or abilities.
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to sell or dispose of the collateral or any part thereof after the occurrence of
an Event of Default, except in connection with contractual obligations
constituting Permitted Liens.
SECTION 4.9. PERFECTION AND PRIORITY OF SECURITY INTEREST. This
Agreement creates a valid and, upon completion of all required filings of
financing statements, perfected first priority and exclusive security interest
in the Collateral, constituting Equipment, to the extent a security interest
can be perfected by such filing, securing the payment of all Obligations subject
only to Permitted Liens. This Agreement creates a valid and, upon completion of
the recordation of the Leasehold Deed of Trust, a perfected first priority
security interest in the Collateral constituting the Lease, to the extent a
security interest can be perfected by such recording, securing the payment of
all the Obligations subject only to Permitted Liens.
SECTION 4.10. MODEL AND SERIAL NUMBERS. The Schedules set
forth the true and correct model number and serial number of each item of
Equipment that constitutes Collateral.
SECTION 4.11. ACCURACY AND COMPLETENESS OF INFORMATION. All
data, reports, and information heretofore, contemporaneously, or hereafter
furnished by or on behalf of the Borrower in writing to the Lender or for
purposes of or in connection with this Agreement or any other Loan Document, or
any transaction contemplated hereby or thereby, (a) are or will be true and
accurate in all material respects on the date as of which such data, reports,
and information are dated or certified and (b) do not and will not omit to
state any material fact necessary to make such data, reports, and information
not misleading as of the date so dated or certified. There are no facts now
known to the Borrower which individually or in the aggregate would reasonably be
expected to have a Material Adverse Effect and which have not been specified
herein, in the Financial Statements, or in any certificate, opinion, or other
written data, report or information previously furnished by the borrower to the
Lender.
SECTION 4.12. PRICE OF EQUIPMENT. The price of each item of
Equipment paid by Borrower does not exceed the fair and usual price for such
type of equipment purchased in like quantity and, to the Borrower's knowledge
after inquiry, reflects all discounts, rebates and allowances for the Equipment
(including, without limitation, discounts for advertising, prompt payment,
testing, or other services) given to the Borrower by the manufacturer, supplier,
or any other person.
SECTION 4.13. YEAR 2000 COMPLIANCE. The Borrower reasonably
believes that all computer applications (including those of its suppliers and
vendors) that are material to its business and operations will on a timely basis
be able to perform properly date-sensitive functions for all dates before and
after January 1, 2000 (that is, be "Year 2000 compliant"), except to the extent
that a failure to do so could not reasonably be expected to have Material
Adverse Effect.
SECTION 5. COVENANTS OF THE BORROWER.
SECTION 5.1. EXISTENCE, ETC. The Borrower shall: (a) retain its
existence and its current yearly accounting cycle, (b) maintain in full force
and effect all licenses, bonds, franchises, losses, trademarks, patents,
contracts, and other rights necessary or desirable to the profitable conduct of
its business unless the failure to do so could not reasonably be expected to
have a Material Adverse Effect on the Borrower, (c) continue in, and limit its
operations to, the same general lines of business as those presently conducted
by it, and (d) comply with all applicable laws and regulations of any federal,
state, or local governmental authority, except for such laws and regulations the
violations of which would not, in the aggregate, have a Material Adverse Effect
on the Borrower.
SECTION 5.2. NOTICE TO THE LENDER. As soon as possible, and in
any event within five Business Days after the Borrower learns of the following,
the Borrower will give written notice to the Lender of (a) any proceeding
instituted or threatened to be instituted by or against the Borrower in any
federal, state, local, or foreign court or before any commission or other
regulatory body (federal, state, local, or foreign) involving a sum, together
with the sum involved in all other similar proceedings, in excess of $150,000 in
the aggregate, (b) any contract that is terminated or amended and which has had
or could reasonably be expected to have a Material
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Adverse Effect on the Borrower, (c) the occurrence of any Material Adverse
Change with respect to the Borrower, (d) the occurrence of any Event of Default
or event or condition which, with notice or lapse of time or both, would
constitute an Event of Default, together with a statement of the action which
the Borrower has taken or proposes to take with respect thereto, (e) of any
discovery or determination by Borrower that any computer application (including
those of its suppliers and vendors) that is material to its business and
operations will not be Year 2000 compliant on a timely basis, except to the
extent that such failure could not reasonably be expected to have a Material
Adverse Effect; and (f) of any material damage to, the destruction of or any
other material loss to any Collateral owned or used by Borrower other than any
such Collateral with a net book value (individually or in the aggregate) less
than $50,000 or any condemnation, confiscation or other taking, in whole or in
part, or any event that otherwise diminishes so as to render impracticable or
unreasonable the use of such Collateral owned or used by Borrower together with
the amount of a good faith estimate of the damage, destruction, loss or
diminution in value.
SECTION 5.3. MAINTENANCE OF BOOKS AND RECORDS. The Borrower will
maintain books and records pertaining to the Collateral in such detail, form,
and scope as the Lender shall reasonably require in its commercially reasonable
judgment. The Borrower agrees that the Lender or its agents may enter upon the
Borrower's premises at any time and from time to time during normal business
hours with reasonable prior notice, and at any time upon the occurrence and
continuance of an Event of Default, for the purpose of inspecting the
Collateral and any and all records pertaining thereto.
SECTION 5.4. INSURANCE. The Borrower will maintain insurance on the
Collateral under such policies of insurance, with such insurance companies, in
such amounts, and covering such risks as are at all times reasonably
satisfactory to the Lender (such policies of Insurance covering the Collateral,
the "Policies"). All such Policies shall be made payable to the Lender, in case
of loss, under a standard non-contributory "lender" or "secured party" clause
and are to contain such other provisions as the Lender may reasonably require
to protect the Lender's interests in the Collateral and to any payments to be
made under such Policies. Certificates of Policies are to be delivered to the
Lender, premium prepaid, with the loss payable endorsement in the Lender's
favor, and shall provide for not less than thirty days' prior written notice to
the Lender, of any alteration or cancellation of coverage. If the Borrower
fails to maintain such Policies, the Lender may, upon two Business Days'
notice, arrange for (at the Borrower's expense and without any responsibility
on the Lender's part for) obtaining the insurance. Unless the Lender shall
otherwise agree with the Borrower in writing, the Lender shall have the sole
right, in the name of the Lender or the Borrower, to file claims under the
Policies, to receive and give acquittance for any payments that may be payable
thereunder, and to execute any endorsements, receipts, releases, assignments,
reassignments, or other documents that may be necessary to effect the
collection, compromise, or settlement of any claims under any such Policies.
SECTION 5.5. TAXES. The Borrower will pay, when due, all taxes,
assessments, claims, and other charges ("Taxes") lawfully levied or assessed
against the Borrower or the Collateral other than taxes that are being
diligently contested in good faith by the Borrower by appropriate proceedings
promptly instituted and for which an adequate reserve is being maintained by
the Borrower in accordance with GAAP. If any Taxes remain unpaid after the date
fixed for the payment thereof other than taxes that are being diligently
contested in good faith by the Borrower by appropriate proceedings promptly
instituted and for which an adequate reserve is being maintained by the
Borrower in accordance with GAAP, or if any lien shall be claimed therefor
(other than Permitted Liens ), then, without notice to the Borrower, but on the
Borrower's behalf, the Lender may pay such Taxes, and the amount thereof shall
be included in the Obligations.
SECTION 5.6. BORROWER TO DEFEND COLLATERAL AGAINST CLAIMS; FEES ON
COLLATERAL. The Borrower will defend the Collateral against all claims and
demands of all Persons at any time claiming the same or any interest therein
adverse to the Borrower or the Lender. The Borrower will not permit any notice
creating or otherwise relating to liens on the Collateral or any portion thereof
to exist or be on file in any public office other than Permitted Liens. The
Borrower shall promptly pay, when payable, all transportation, storage, and
warehousing charges and license fees, registration fees, assessments, charges,
permit fees, and taxes (municipal, state, and federal) which may now or
hereafter be imposed upon the ownership, leasing, renting, possession, sale, or
use of the Collateral, other than taxes on or measured by the Lender's income
and fees, assessments, charges, and taxes which are being contested in good
faith by appropriate proceedings diligently
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conducted and with respect to which adequate reserves are maintained to the
extent required by GAAP.
SECTION 5.7. NO CHANGE OF LOCATION, STRUCTURE, OR IDENTITY. The
Borrower will not (a) change the location of its chief executive office or
establish any place of business other than those specified herein or (b) move
or permit the movement of any item of Collateral from the location specified in
the applicable Schedule, except that the Borrower may change its chief
executive office and keep Collateral at other locations within the United
States provided that the Borrower has delivered to the Lender (i) prior written
notice thereof and (ii) duly executed financing statements and other agreements
and instruments (all in form and substance reasonably satisfactory to the
Lender) reasonably necessary or, in the reasonable opinion of the Lender,
desirable to perfect and maintain in favor of the Lender a first priority
security interest in the Collateral. Notwithstanding anything to the contrary
in the immediately preceding sentence, the Borrower may keep any Collateral
consisting of motor vehicles or rolling stock at any location in the United
States provided that the Lender's security interest in any such Collateral is
conspicuously marked on the certificate of title thereof and the Borrower has
complied with the provisions of Section 5.9.
SECTION 5.8. USE OF COLLATERAL; LICENSES; REPAIR. The Collateral
constituting Equipment shall be operated by competent, qualified personnel in
connection with the Borrower's business purposes, for the purpose for which the
Equipment was designed and in accordance with applicable operating instructions,
laws, and government regulations, and the Borrower shall use every reasonable
precaution to prevent loss or damage to the Collateral from fire and other
hazards. The Equipment shall not be used or operated for personal, family, or
household purposes. The Borrower shall procure and maintain in effect all
orders, licenses, certificates, permits, approvals, and consents required by
federal, state, or local laws or by any governmental body, agency, or authority
in connection with the delivery, installation, use, and operation of such
Equipment. The Borrower shall keep all of the Equipment in a satisfactory state
of repair and satisfactory operating condition in accordance with industry
standards, and will make all repairs and replacements when and where necessary
and practical. The Borrower will not waste or destroy the Equipment or any part
thereof, and will not be negligent in the care or use thereof. The Equipment
shall not be annexed or affixed to or become part of any realty without the
Lender's prior written consent.
SECTION 5.9. FURTHER ASSURANCES. The Borrower will, promptly upon
request by the Lender, execute and deliver or use its best efforts to obtain
any document reasonably required by the Lender (including, without limitation,
warehouseman or processor disclaimers, mortgagee waivers, landlord disclaimers,
or subordination agreements with respect to the Obligations and the
Collateral), give any notices, execute and file any financing statements,
mortgages, or other documents (all in form and substance reasonably
satisfactory to the Lender), xxxx any chattel paper, deliver any chattel paper
or instruments to the Lender, and take any other actions that are reasonably
necessary or, in the opinion of the Lender, desirable to perfect or continue
the perfection and the first priority of the Lender's security interest in the
Collateral subject to Permitted Liens, to protect the Collateral against the
rights, claims, or interests of any Persons, or to effect the purposes of this
Agreement subject to Permitted Liens. The Borrower hereby authorizes the Lender
to file one or more financing or continuation statements, and amendments
thereto, relating to all or any part of the Collateral without the signature of
the Borrower where permitted by law. A carbon, photographic, or other
reproduction of this Agreement or any financing statement covering the
Collateral or any part thereof shall be sufficient as a financing statement
where permitted by law. To the extent required under this Agreement, the
Borrower will pay all costs incurred in connection with any of the foregoing.
SECTION 5.10. NO DISPOSITION OF COLLATERAL. The Borrower will not in
any way hypothecate or create or permit to exist any lien, security interest,
charge, or encumbrance on or other interest in any of the Collateral, except
for the lien and security interest granted hereby and Permitted Liens, and the
Borrower will not sell, transfer, assign, pledge, collaterally assign,
exchange, or otherwise dispose of any of the Collateral. In the event the
Collateral, or any part thereof, is sold, transferred, assigned, exchanged, or
otherwise disposed of in violation of these provisions, the security interest of
the Lender shall continue in such Collateral or part thereof notwithstanding
such sale, transfer, assignment, exchange, or other disposition, and the
Borrower will hold the proceeds thereof in a separate account for the benefit
of the Lender. Following such a sale, the Borrower will transfer such proceeds
to the Lender in kind.
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SECTION 5.11. NO LIMITATIONS ON LENDER'S RIGHTS. The Borrower will not
enter into any contractual obligations which may restrict or inhibit the
Lender's rights or ability to sell or otherwise dispose of the Collateral or any
material part thereof.
SECTION 5.12. PROTECTION OF COLLATERAL. Upon notice to Borrower
(provided that if an Event of Default has occurred and is continuing the Lender
need not give any notice), the Lender shall have the right at any time to make
any payments and do any other acts the Lender may deem reasonably necessary to
protect its security interests in the Collateral, including, without limitation,
the rights to satisfy, purchase, contest, or compromise any encumbrance, charge,
or lien which, in the reasonable judgment of the Lender, appears to be prior to
or superior to the security interest hereunder, and appear in and defend any
action or proceeding purporting to affect its security interests in, or the
value of, any of the Collateral. The Borrower hereby agrees to reimburse the
Lender for all payments made and expenses incurred under this Agreement
including reasonable fees, expenses, and disbursements of attorneys and
paralegals (including the allocated costs of in-house counsel) acting for the
Lender, including any of the foregoing payments under, or acts taken to protect
its security interests in, any of the Collateral, which amounts shall be secured
under this Agreement, and agrees it shall be bound by any payment made or act
taken by the Lender hereunder absent the Lender's gross negligence or willful
misconduct. The Lender shall have no obligation to make any of the foregoing
payments or perform any of the foregoing acts.
SECTION 5.13. DELIVERY OF ITEMS. The Borrower will (a) promptly (but
in no event later than two Business days) after its receipt thereof, deliver to
the Lender any documents or certificates of title issued with respect to any
property included in the Collateral, and any promissory notes, letters of credit
or instruments related to or otherwise in connection with any property included
in the Collateral, which in any such case come into the possession of the
Borrower, or shall cause the issuer thereof to deliver any of the same directly
to the Lender, in each case with any necessary endorsements in favor of the
Lender and (b) deliver to the Lender as soon as available copies of any and all
press releases and other similar communications issued by the Borrower.
SECTION 5.14. SOLVENCY. The Borrower shall be and remain Solvent at
all times.
SECTION 5.15. FUNDAMENTAL CHANGES. The Borrower shall not (a) amend
or modify its name, unless the Borrower delivers to the Lender thirty days prior
to any such proposed amendment or modification written notice of such amendment
or modification and within ten days before such amendment or modification
delivers executed Uniform Commercial Code financing statements (in form and
substance satisfactory to the Lender) or (b) merge or consolidate with any other
entity or make any material change in its capital structure, in each case
without the Lender's prior written consent which shall not be unreasonably
withheld.
SECTION 5.16. INTELLECTUAL PROPERTY. The Borrower shall do and cause
to be done all things necessary to preserve, maintain and keep in full force and
effect all of its registrations of trademarks, service marks and other marks,
trade names and other trade rights, patents, copyrights and other intellectual
property in accordance with prudent business practices, except to the extent
that the failure to preserve or maintain any of the foregoing would not
reasonably be expected to have a Material Adverse Effect.
SECTION 5.17. LIMITATION ON ADDITIONAL INDEBTEDNESS. Borrower shall
not incur additional indebtedness without the prior consent of the Lender, which
will not be unreasonably withheld. Notwithstanding the foregoing, Borrower may
incur additional indebtedness, to the extent that such indebtedness (a) is
secured by specific items of newly acquired equipment and any lien for such
equipment shall attach only to the equipment acquired or (b) to the extent that
it is Permitted Indebtedness.
SECTION 5.18. NEGATIVE COVENANTS. The Borrower will not in any way
hypothecate or create or permit to exist any lien, security interest, charge, or
encumbrance on or other interest in any of its Intellectual Property in
connection with any indebtedness of the Borrower. Notwithstanding the foregoing,
Borrower shall not be prohibited from (i) pledging or otherwise committing its
Intellectual Property in order to engage in a joint venture or in connection
with a merger or acquisition which has been consented to by the Lender or (ii)
granting licenses to use its Intellectual Property to third parties in the
ordinary course of business.
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SECTION 5.19. ADDITIONAL REQUIREMENTS. The Borrower shall take all
such further actions and execute all such further documents and instruments as
the Lender may reasonably request to effect the transactions contemplated by
this Agreement.
SECTION 6. FINANCIAL STATEMENTS. Until the payment and satisfaction in full
of all Obligations, the Borrower shall deliver to the Lender the following
financial information:
SECTION 6.1. ANNUAL FINANCIAL STATEMENTS. As soon as available, but
not later than 120 days after the end of each fiscal year of the Borrower and
its consolidated subsidiaries, the consolidated balance sheet, income statement,
and statements of cash flows and shareholders equity for the Borrower and its
consolidated subsidiaries (the "Financial Statements") for such year, audited by
an independent certified public accountant without an adverse qualification; and
SECTION 6.2. QUARTERLY FINANCIAL STATEMENTS. As soon as available, but
not later than 60 days after the end of each of the first three fiscal quarters
in any fiscal year of the Borrower and its consolidated subsidiaries, the
Financial Statements for such fiscal quarter, together with a certification duly
executed by a responsible officer of the Borrower that such Financial Statements
have been prepared in accordance with GAAP and are fairly stated in all material
respects (subject to normal year-end audit adjustments).
SECTION 7. EVENTS OF DEFAULT. The occurrence of any of the following events
shall constitute an Event of Default hereunder:
(a) the Borrower shall fail to pay within five days of when due any
amount required to be paid by the Borrower under or in connection with any Note
and this Agreement;
(b) any representation or warranty made or deemed made by the Borrower
under or in connection with any Loan Document or any Financial Statement shall
prove to have been false or incorrect in any material respect when made;
(c) the Borrower shall fail to perform or observe (i) any of the
terms, covenants or agreements contained in Sections 5.4, 5.7, 5.10, 5.14, or
5.15 hereof or (ii) any other material term, covenant, or agreement contained in
any Loan Document (other than the other Events of Default specified in this
Section 7) and such failure remains unremedied for the earlier of fifteen days
from (A) the date on which the Lender has given the Borrower written notice of
such failure and (B) the date on which the Borrower knew or should have known of
such failure;
(d) dissolution, liquidation, winding up, or cessation of the
Borrower's business, failure of the Borrower generally to pay its debts as they
mature, admission in writing by the Borrower of its inability generally to pay
its debts as they mature, or calling of a meeting of the Borrower's creditors
for purposes of compromising any of the Borrower's debts;
(e) the commencement by or against the Borrower of any bankruptcy,
insolvency, arrangement, reorganization, receivership, or similar proceedings
under any federal or state law and, in the case of any such involuntary
proceeding, such proceeding remains undismissed or unstayed for forty-five days
following the commencement thereof, or any action by the Borrower is taken
authorizing any such proceedings;
(f) an assignment for the benefit of creditors is made by the
Borrower, whether voluntary or involuntary, the appointment of a trustee,
custodian, receiver, or similar official for the Borrower or for any substantial
property of the Borrower, or any action by the Borrower authorizing any such
proceeding;
(g) the Borrower shall default in (i) the payment of principal or
interest on any
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indebtedness in excess of $50,000 (other than the Obligations) beyond the period
of grace, if any, provided in the instrument or agreement under which such
indebtedness was created; or (ii) the observance or performance of any other
agreement or condition relating to any such indebtedness or contained in any
instrument or agreement relating thereto, or any other event shall occur or
condition exist, the effect of which default or other event or condition is
to cause, or to permit the holder or holders of such indebtedness to cause,
with the giving of notice if required, such indebtedness to become due prior to
its stated maturity; or (iii) any loan or other agreement under which the
Borrower has received financing from Transamerica Corporation or any of its
affiliates;
(h) the Borrower suffers or sustains Material Adverse
Change;
(i) any tax lien, other than a Permitted Lien, is filed of
record against the Borrower and is not bonded or discharged within five
Business Days;
(j) any judgment which has had or could reasonably be
expected to have a Material Adverse Effect on the Borrower and such judgment
shall not be stayed, vacated, bonded, or discharged within sixty days;
(k) any material covenant, agreement, or obligation, as
determined in the good faith business judgment of the Lender, made by the
Borrower and contained in or evidenced by any of the Loan Documents shall cease
to be enforceable, or shall be determined to be unenforceable, in accordance
with its terms; the Borrower shall deny or disaffirm the Obligations in writing
under any of the Loan Documents or any liens granted in connection therewith;
or any liens granted on any of the Collateral in favor of the Lender shall be
determined to be void, voidable, or invalid, or shall not be given the priority
contemplated by this Agreement and not remedied to Lender's satisfaction
within three (3) business days after notice; or
(l) there is a change, which change results from a single
transaction or series of related transactions, but not from the sale of newly
issued securities to investors, in more than 35% of the ownership of any equity
interests of the Borrower on the date hereof or more than 35% of such interests
become subject to any contractual, judicial, or statutory lien, charge,
security interest, or encumbrance.
SECTION 8. REMEDIES. If any Event of Default shall have occurred
and be continuing:
(a) The Lender may, without prejudice to any of its other
rights under any Loan Document or Applicable Law, declare all Obligations to be
immediately due and payable (except with respect to any Event of Default set
forth in Section 7(f) hereof, in which case all Obligations shall automatically
become immediately due and payable without necessity of any declaration) without
presentment, representation, demand of payment, or protest, which are hereby
expressly waived.
(b) The Lender may take possession of the Collateral and,
for that purpose may enter, with the aid and assistance of any person or
persons, any premises where the Collateral or any part hereof is, or may be
placed, and remove the same.
(c) The obligation of the Lender, if any, to make
additional Loans or financial accommodations of any kind to the Borrower shall
immediately terminate.
(d) The Lender may exercise in respect of the Collateral,
in addition to other rights and remedies provided for herein (or in any Loan
Document) or otherwise available to it, all the rights and remedies of a
secured party under the applicable Uniform Commercial Code (the "Code") whether
or not the Code applies to the affected Collateral and also may (i) require the
Borrower to, and the Borrower hereby agrees that it will at its expense and
upon request of the Lender forthwith, assemble all or part of the Collateral as
directed by the Lender and make it available to the Lender at a place to be
designated by the Lender that is reasonably convenient to both parties and (ii)
without notice except as specified below, sell the Collateral or any part
thereof in one or more parcels at public or private sale, at any of the
Lender's offices or elsewhere, for cash, on credit, or for future delivery,
and upon such other terms as the Lender may deem commercially reasonable. The
Borrower agrees that,
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transferees, and assigns.
SECTION 9.7. REINSTATEMENT. To the extent permitted by law, this
Agreement and the rights and powers granted to the Lender hereunder and under
the Loan Documents shall continue to be effective or be reinstated if at any
time any amount received by the Lender in respect of the Obligations is
rescinded or must otherwise be restored or returned by the Lender upon the
insolvency, bankruptcy, dissolution, liquidation, or reorganization of the
Borrower or upon the appointment of any receiver, intervenor, conservator,
trustee, or similar official for the Borrower or any substantial part of its
assets, or otherwise, all as though such payments had not been made.
SECTION 9.8. SURVIVAL OF PROVISIONS. All representations,
warranties, and covenants of the Borrower contained herein shall survive the
execution and delivery of this Agreement, and shall terminate only upon the
full and final payment and performance by the Borrower of the Obligations
secured hereby.
SECTION 9.9. INDEMNIFICATION. The Borrower agrees to indemnify and
hold harmless the Lender and its directors, officers, agents, employees, and
counsel from and against any and all costs, expenses, claims, or liability
incurred by the Lender or such Person hereunder and under any other Loan
Document or in connection herewith or therewith, unless any claim or liability
shall be due to willful misconduct or gross negligence on the part of the
Lender or such Person.
SECTION 9.10. COUNTERPARTS; TELECOPIED SIGNATURES. This Agreement
may be executed in counterparts, each of which when so executed and delivered
shall be an original, but both of which shall together constitute one and the
same instrument. This Agreement and each of the other Loan Documents and any
notices given in connection herewith or therewith may be executed and delivered
by telecopier or other facsimile transmission all with the same force and
effect as if the same was a fully executed and delivered original manual
counterpart.
SECTION 9.11. SEVERABILITY. In case any provision in or obligation
under this Agreement or any Note or any other Loan Document shall be invalid,
illegal, or unenforceable in any jurisdiction, the validity, legality, and
enforceability of the remaining provisions or obligations, or of such provision
or obligation in any other jurisdiction, shall not in any way be affected or
impaired thereby.
SECTION 9.12. DELAYS; PARTIAL EXERCISE OF REMEDIES. No delay or
omission of the Lender to exercise any right or remedy hereunder, whether
before or after the happening of any Event of Default, shall impair any such
right or shall operate as a waiver thereof or as a waiver of any such Event of
Default. No single or partial exercise by the Lender of any right or remedy
shall preclude any other or further exercise thereof, or preclude any other
right or remedy.
SECTION 9.13. ENTIRE AGREEMENT. The Borrower and the Lender agree
that this Agreement, the Schedule hereto, and the Commitment Letter are the
complete and exclusive statement and agreement between the parties with respect
to the subject matter hereof, superseding all proposals and prior agreements,
oral or written, and all other communications between the parties with respect
to the subject matter hereof. Should there exist any inconsistency between the
terms of the Commitment Letter and this Agreement, the terms of this Agreement
shall prevail.
SECTION 9.14. SETOFF. In addition to and not in limitation of all
rights of offset that the Lender may have under Applicable Law, and whether or
not the Lender has made any demand or the Obligations of the Borrower have
matured, the Lender shall have the right to appropriate and apply to the
payment of the Obligations of the Borrower all deposits and other obligations
then or thereafter owing by the Lender to or for the credit or the account of
the Borrower.
SECTION 9.15. WAIVER OF JURY TRIAL. THE BORROWER AND THE LENDER
IRREVOCABLY WAIVE ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING, OR
COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT, ANY OTHER LOAN
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DOCUMENT, OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.
SECTION 9.16. GOVERNING LAW. THE VALIDITY, INTERPRETATION, AND
ENFORCEMENT OF THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF ILLINOIS WITHOUT GIVING EFFECT TO THE CONFLICT OF
LAW PRINCIPLES THEREOF.
SECTION 9.17. VENUE; SERVICE OF PROCESS. ANY LEGAL ACTION OR PROCEEDING
WITH RESPECT TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT MAY BE BROUGHT IN THE
COURTS OF THE STATE OF ILLINOIS SITUATED IN XXXX COUNTY, OR OF THE UNITED
STATES OF AMERICA FOR THE NORTHERN DISTRICT OF ILLINOIS, AND, BY EXECUTION AND
DELIVERY OF THIS AGREEMENT, THE BORROWER HEREBY ACCEPTS FOR ITSELF AND IN
RESPECT OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, THE JURISDICTION OF THE
AFORESAID COURTS. THE BORROWER HEREBY IRREVOCABLY WAIVES, IN CONNECTION WITH
ANY SUCH ACTION OR PROCEEDING, (a) ANY OBJECTION, INCLUDING, WITHOUT
LIMITATION, ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF
FORUM NON CONVENIENS, THAT IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY
SUCH ACTION OR PROCEEDING IN SUCH RESPECTIVE JURISDICTIONS AND (b) THE RIGHT TO
INTERPOSE ANY NONCOMPULSORY SETOFF, COUNTERCLAIM, OR CROSS-CLAIM. THE BORROWER
IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OF ANY OF THE AFOREMENTIONED
COURTS IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF COPIES THEREOF BY
REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO THE BORROWER AT THE ADDRESS
FOR IT SPECIFIED IN SECTION 9.1 HEREOF. NOTHING HEREIN SHALL AFFECT THE RIGHT
OF THE LENDER TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO
COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST THE BORROWER IN ANY
OTHER JURISDICTION, SUBJECT IN EACH INSTANCE TO THE PROVISIONS HEREOF WITH
RESPECT TO RIGHTS AND REMEDIES.
IN WITNESS WHEREOF, the undersigned have caused this Agreement to be duly
executed and delivered by their proper and duly authorized officers as of the
date first set forth above.
ACLARA BIOSCIENCES, INC.
By: /s/ XXXXX X. XXXXXXXXX
-------------------------------------
Name: Xxxxx X. Xxxxxxxxx
Title: Vice President Finance & CFO
Federal Tax ID:
TRANSAMERICA BUSINESS CREDIT CORPORATION
By:
-------------------------------------
Name:
Title:
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THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR ANY STATE SECURITIES LAWS. THEY MAY NOT BE SOLD OR OFFERED FOR SALE
IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AS TO THE SECURITIES
UNDER SAID ACT AND ANY APPLICABLE STATE SECURITIES LAWS OR THE AVAILABILITY OF
AN EXEMPTION FROM REGISTRATION UNDER SAID ACT AND ANY APPLICABLE STATE
SECURITIES LAWS.
NO. 1
STOCK SUBSCRIPTION WARRANT
TO PURCHASE COMMON STOCK OF
ACLARA BIOSCIENCES, INC. (THE "COMPANY")
DATE OF INITIAL ISSUANCE: MAY 27, 1999
THIS CERTIFIES THAT for value received, TBCC FUNDING TRUST II or its
registered assigns (hereinafter called the "Holder") is entitled to purchase
from the Company, at any time during the Term of this Warrant, Ninety-Two
Thousand Five Hundred Ninety-Three (92,593) shares of common stock, $.001 par
value, of the Company (the "Common Stock"), at the Warrant Price, payable as
provided herein. The exercise of this Warrant shall be subject to the
provisions, limitations and restrictions herein contained, and may be exercised
in whole or in part.
SECTION 1. DEFINITIONS.
For all purposes of this Warrant, the following terms shall have the
meanings indicated:
COMMON STOCK - shall mean and include the Company's authorized Common
Stock, $0.001 par value, as constituted at the date hereof.
EXCHANGE ACT - shall mean the Securities Exchange Act of 1934, as amended
from time to time.
SECURITIES ACT - the Securities Act of 1933, as amended.
TERM OF THIS WARRANT - shall mean the period beginning on the date of
initial issuance hereof and ending on May 27, 1999.
WARRANT PRICE - $2.70 per share, subject to adjustment in accordance with
Section 5 hereof.
WARRANTS - this Warrant and any other Warrant or Warrants issued in
connection with a Commitment Letter dated March 4, 1999 executed by the Company
and Transamerica Business Credit Corporation (the "Commitment Letter") to the
original holder of this Warrant, or any transferees from such original holder
or this Holder.
WARRANT SHARES - shares of Common Stock purchased or purchasable by the
Holder of this Warrant upon the exercise hereof.
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SECTION 2. EXERCISE OF WARRANT.
2.1 PROCEDURE FOR EXERCISE OF WARRANT. To exercise this Warrant in whole
or in part (but not as to any fractional share of Common Stock), the Holder
shall deliver to the Company at its office referred to in Section 12 hereof at
any time and from time to time during the Term of this Warrant: (i) the Notice
of Exercise in the form attached hereto, (ii) cash, certified or official bank
check payable to the order of the Company, wire transfer of funds to the
Company's account, or evidence of any indebtedness of the Company to the Holder
(or any combination of any of the foregoing) in the amount of the Warrant Price
for each share being purchased, and (iii) this Warrant. Notwithstanding any
provisions herein to the contrary, if the Current Market Price (as defined in
Section 5) is greater than the Warrant Price (at the date of calculation, as set
forth below), in lieu of exercising this Warrant as hereinabove permitted, the
Holder may elect to receive shares of Common Stock equal to the value (as
determined below) of this Warrant (or the portion thereof being canceled) by
surrender of this Warrant at the office of the Company referred to in Section 12
hereof, together with the Notice of Exercise, in which event the Company shall
issue to the Holder that number of shares of Common Stock computed using the
following formula:
CS = WCS x (CMP-WP)
--------------
CMP
Where
CS equals the number of shares of Common Stock to be issued to the Holder
WCS equals the number of shares of Common Stock purchasable under the
Warrant or, if only a portion of the Warrant is being exercised, the
portion of the Warrant being exercised (at the date of such
calculation)
CMP equals the Current Market Price (at the date of such calculation)
WP equals the Warrant Price (as adjusted to the date of such calculation)
In the event of any exercise of the rights represented by this Warrant, a
certificate or certificates for the shares of Common Stock so purchased,
registered in the name of the Holder or such other name or names as may be
designated by the Holder, shall be delivered to the Holder hereof within a
reasonable time, not exceeding fifteen (15) days, after the rights represented
by this Warrant shall have been so exercised; and, unless this Warrant has
expired, a new Warrant representing the number of shares (except a remaining
fractional share), if any, with respect to which this Warrant shall not then
have been exercised shall also be issued to the Holder hereof within such time.
The person in whose name any certificate for shares of Common Stock is issued
upon exercise of this Warrant shall for all purposes be deemed to have become
the holder of record of such shares on the date on which the Warrant was
surrendered and payment of the Warrant Price and any applicable taxes was made,
irrespective of the date of delivery of such certificate, except that, if the
date of such surrender and payment is a date when the stock transfer books of
the Company are closed, such person shall be deemed to have become the holder of
such shares at the close of business on the next succeeding date on which the
stock transfer books are open.
2.2 TRANSFER RESTRICTION LEGEND. Each certificate for Warrant Shares shall
bear the following legend (and any additional legend required by (i) any
applicable state securities laws and (ii)
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