LOAN AND MASTER SECURITY AGREEMENT
Exhibit 10.1
Dated as of December 27, 2005 (“Agreement”)
THIS AGREEMENT is between General Electric Capital Corporation (together with its
successors and assigns, if any, “Lender”) and Cyberkinetics Neurotechnology Systems, Inc.
(“Debtor”). Lender has an office at 00 Xxxxxxx Xxxxxxx Xxxx, Xxxxxxx, XX 00000. Debtor is a
corporation organized and existing under the laws of the state of Delaware (“the State”). Debtor’s
mailing address and chief place of business is 000 Xxxxxxxxxx Xxxx., Xxxxx 000, Xxxxxxxxxx, XX
00000. The parties agree as follows:
1. LOANS, NOTES AND WARRANTS.
(a) Subject to the terms and conditions set forth herein, Lender will make an advance or
advances of up to $4,000,000 (“Tranche 1”) available to Debtor upon execution of this Agreement and
an additional $2,000,000 (“Tranche 2”) available to Debtor upon satisfaction of each of the
additional funding milestones. For purposes of this Agreement, satisfaction of the additional
funding milestones shall mean that: (i) Debtor has entered into a material research, development
and/or commercialization collaboration or alliance or asset acquisition, merger or other business
combination where Debtor is the surviving entity on terms reasonably satisfactory to Lender, (ii)
Debtor has listed its shares on either the NASDAQ National Market or American Stock Exchange, and
(iii) Debtor’s revenue related to Neuroport is reasonably expected to exceed $1,250,000 for the
fiscal year ended December 31, 2006; provided that, on and as of the date of funding under Tranche
2, the representations and warranties set forth in Section 3 of this Agreement shall be true and
correct in all material respects and no default under Section 8 shall have occurred and be
continuing.
(b) To draw down on the available funds, Debtor will deliver notification together with a
promissory note or promissory notes to Lender in the form attached hereto as Exhibit A (each a
“Note” and, collectively, “Notes”) (i) by or before June 30, 2006 with respect to the funds in
Tranche 1 and (ii) by or before September 29, 2006 with respect to the funds in Tranche 2. Each
Note will bear interest at a per annum rate equal to 10.6% (the “Interest Rate”) over a period of
thirty-six consecutive months. Debtor will make payments for six months at interest only followed
by thirty months at 3.809099% (“Payment Factor”). The Interest Rate and Payment Factor will be
adjusted at the time of funding to reflect any increase in Lender’s cost of funds, which shall be
tied to the Federal Reserve’s Three (3) year Treasury Constant Maturities Rate (the “Index”). The
Interest Rate, and therefore the Payment Factor, assumes an Index of 4.20%.
(c) Debtor shall grant Lender warrants substantially in the form attached hereto as Exhibit B
(a “Warrant”), pursuant to the following schedule:
(i) upon execution of this Agreement, Debtor shall grant Lender a Warrant to purchase
71,301 shares of common stock of Debtor;
(ii) as soon as practicable after Debtor borrows an aggregate principal amount of $4,000,000
under Xxxxxxx 0, Xxxxxx shall grant Lender a Warrant to purchase the number of shares of common
stock of Debtor equal to $100,000 (which is 2.5% of the principal amount of Tranche 1) divided by
110% of the 10-day trailing average of Debtor’s stock price at issuance of the Warrant;
(iii) as soon as practicable after (A) Debtor provides notice to Lender that Debtor has
satisfied the additional funding milestones set forth in Section 1(a) and (B) Lender acknowledges
that Debtor has achieved the additional funding milestones and makes the funds in Tranche 2
available for withdrawal by Debtor, Debtor shall grant Lender a Warrant to purchase the number of
shares of common stock of Debtor equal to $50,000 (which is 2.5% of the principal amount of Tranche
2) divided by 110% of the 10-day trailing average of Debtor’s stock price at issuance of the
Warrant; and
(iv) as soon as practicable after Debtor borrows an aggregate principal amount of $2,000,000
under Xxxxxxx 0, Xxxxxx shall grant Lender a Warrant to purchase the number of shares of common
stock of Debtor equal to $50,000 (which is 2.5% of the principal amount of Tranche 2) divided by
110% of the 10-day trailing average of Debtor’s stock price at issuance of the Warrant.
Debtor will grant each Warrant at a warrant price per share equal to 110% of the 10-day trailing
average of Debtor’s stock price at issuance of the applicable Warrant.
2. CREATION OF SECURITY INTEREST; NEGATIVE PLEDGE.
(a) Subject to the terms and conditions set forth herein, Debtor grants to Lender, its
successors and assigns, a security interest in and against all property listed on the collateral
schedule attached hereto as Exhibit C or in the future annexed to
or made a part of this Agreement (“Collateral Schedule”), and in and against all additions, attachments, accessories and accessions
to such property, all substitutions, replacements or exchanges 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 Lender, now existing or arising in
the future, including but not limited to the payment and performance of the Notes, and any
renewals, extensions and modifications of such debts, obligations and liabilities (such Notes,
debts, obligations and liabilities are called the “Indebtedness”). Lender’s security interest in
the Collateral shall continue until the payment in full and the satisfaction of all Indebtedness,
whereupon such security interest shall terminate. Lender shall, at Debtor’s sole cost and expense,
execute such further documents and take such further actions as may be necessary to effect the
release contemplated above, including duly executing and delivering termination statements for
filing in all relevant jurisdictions under the Uniform Commercial Code. THE PARTIES EXPLICITLY
ACKNOWLEDGE AND AGREE THAT COLLATERAL, AS USED HEREIN, SHALL NOT INCLUDE ANY INTELLECTUAL PROPERTY
OF DEBTOR.
For purposes of this Agreement, “Intellectual Property” means:
(i) any and all Copyrights;
(ii) any and all trade secrets, and any and all intellectual property rights in computer software
and computer software products now or hereafter existing, created, acquired or held;
(iii) any and all design rights that may be available to Debtor now or hereafter existing, created,
acquired or held;
(iv) all Mask Works or similar rights available for the protection of semiconductor chips;
(v) all Patents;
(vi) any Trademarks;
(viii) all licenses or other rights to use any of the Copyrights, Patents, Trademarks, or Mask
Works and all license fees and royalties arising from such use to the extent permitted by such
license or rights; and
(ix) all amendments, extensions, renewals and extensions of any of the Copyrights, Patents,
Trademarks or Mask Works.
“Copyrights” means any and all copyright rights, copyright applications, copyright registrations
and like protections in each work of authorship and derivative work thereof, whether published or
unpublished and whether or not the same also constitutes a trade secret, now or hereafter existing,
created, acquired or held.
“Mask Works” means all mask work or similar rights available for the protection of semiconductor
chips, now owned or hereafter acquired.
“Patents” means all patents, patent applications and like protections including without limitation
improvements, divisions, continuations, renewals, reissues, extensions and continuations-in-part of
the same.
“Trademarks” means any trademark and service xxxx rights, whether registered or not, applications
to register and registrations of the same and like protections, and the entire goodwill of the
business of Debtor connected with and symbolized by such trademarks.
(b) Subject to the terms and conditions set forth herein, and until the payment in full and
the satisfaction of all Indebtedness, Debtor shall not (a) sell, transfer, assign, mortgage,
pledge, lease, grant a security interest in, or encumber any of its Intellectual Property, or (b)
enter into any agreement with any third party that would prohibit the pledge or grant to Lender of
a security interest in Debtor’s Intellectual Property (parts (a) and (b) collectively, the
“Negative Pledge”); provided that the Negative Pledge shall not include (i) Permitted Liens (as
defined below), (ii) the transfer of inventory, worn out equipment and other transactions and
business decisions in the ordinary course of business (including, without limitation, the decision
to abandon the prosecution or maintenance of any patent or patent application), (iii) licenses to
Debtor’s Intellectual Property (including, without limitation, any license granted by Debtor as
part of a research and development project, strategic alliance or similar arrangement) for fair
consideration as approved by Debtor’s Board of Directors, and (iv) any other transaction or
business relationship that is in Debtor’s ordinary course of business and not material to the
financial condition or results of operations of the Company.
3. REPRESENTATIONS, WARRANTIES AND COVENANTS OF DEBTOR.
Debtor represents, warrants and covenants as of the date of this Agreement and as 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 in every jurisdiction
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necessary to carry on its business and operations, except where the failure to qualify would not have a material
adverse effect on Debtor’s business;
(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 Documents”);
(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 to the extent that the enforcement of remedies may be limited under
applicable bankruptcy and insolvency laws;
(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 Lender or Permitted Liens) 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 Debtor reasonably expects
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 Lender 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
condition;
(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 operating order and repair, normal wear and
tear excepted, 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;
(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 Lender, (ii) liens for taxes not yet due
or for taxes being contested in good faith and which do not involve, in the reasonable judgment of
Lender, any risk of the sale, forfeiture or loss of any of the Collateral, (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 and (iv) liens, claims and encumbrances
related to the Existing Line of Credit, as defined below (all of such liens are called “Permitted
Liens”); provided that, before delivering notification to draw down on the available funds under
Tranche 1 as described in Xxxxxxx 0, Xxxxxx shall pay all amounts outstanding and otherwise due to
terminate the loan facility described in the existing Loan and Security Agreement between Debtor
and Silicon Valley Bank (the “Existing Line of Credit”) and fully satisfy and discharge any liens,
claims and encumbrances on the Collateral and Intellectual Property arising from the Existing Line
of Credit; Debtor shall provide Lender with evidence of such termination and release prior to the
initial funding under Tranche 1;
(l) 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; and
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(m) Other than the Permitted Liens and agreements that have expired or been terminated prior
to the date of this Agreement, Debtor has not and will not enter into any other agreement or
financing arrangement in which it granted a general negative pledge in Debtor’s Intellectual
Property to any other party.
4. COLLATERAL.
(a) Until the declaration of any default, Debtor shall remain in possession of the Collateral;
except that Lender 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 Lender’s security
interest may be perfected only by possession. Lender may inspect any of the Collateral during
normal business hours after giving Debtor reasonable prior notice. If Lender asks, Debtor will
promptly notify Lender in writing of the location of any Collateral.
(b) Debtor shall (i) use the Collateral only in its trade or business, (ii) maintain all of
the Collateral in good operating order and repair, normal wear and tear excepted and except as
permitted herein, (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) Lender does not authorize and Debtor agrees it shall not, except in the ordinary course of
business (i) part with possession of any of the Collateral (except to Lender or for maintenance
and repair), (ii) remove any of the Collateral from the 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, Lender may discharge taxes, liens, security
interests or other encumbrances at any time levied or placed on the Collateral (except for
Permitted Liens) 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 Lender, on demand, all costs and expenses incurred by Lender 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
Lender 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, subject to the terms of the Confidential Disclosure Agreement between Debtor and Lender, a
copy of which has been attached hereto as Exhibit D (the “Confidential Disclosure Agreement”).
(f) Debtor agrees and acknowledges that, except as otherwise described herein, 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, Lender. Lender 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 Lender.
5. INSURANCE.
(a) Debtor shall at all times bear the entire risk of any loss, theft, damage 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 Lender, against such other risks as Lender 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 reasonably acceptable to
Lender. Debtor shall deliver to Lender policies or certificates of insurance evidencing such
coverage. Each policy shall name Lender as a loss payee, shall provide for coverage to Lender
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 Lender. Debtor appoints Lender
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
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endorse all documents, checks or drafts in connection
with insurance payments. Lender shall not act as Debtor’s attorney-in-fact unless Debtor is in
default. Proceeds of insurance shall be applied, at the option of Lender, to repair or replace the
Collateral or to reduce any of the Indebtedness.
6. REPORTS.
(a) Debtor shall promptly notify Lender of (i) any change in the name of Debtor, (ii) any
change in the state of its incorporation, organization 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 damaged or worn out, or (vi) any
lien, claim or encumbrance other than Permitted Liens attaching to or being made against any of the
Collateral.
(b) Debtor will deliver to Lender financial statements as follows. If Debtor is a privately
held company, then Debtor agrees to provide monthly financial statements, certified by Debtor’s
president or chief financial officer including a balance sheet, statement of operations and cash
flow statement within 30 days of each month end and its complete audited annual financial
statements, certified by a recognized firm of certified public accountants, within 120 days of
fiscal year end or at such time as Debtor’s Board of Directors receives the audit. If Debtor is a
publicly held company, then Debtor agrees to provide quarterly unaudited statements and annual
audited statements, certified by a recognized firm of certified public accountants, within 10 days
after the statements are provided to the Securities and Exchange Commission (“SEC”). All such
statements are to be prepared using generally accepted accounting principles (“GAAP”) and, if
Debtor is a publicly held company, are to be in compliance with SEC requirements.
7. FURTHER ASSURANCES.
(a) Debtor shall, upon request of Lender, furnish to Lender such further information, execute
and deliver to Lender such documents and instruments (including, without limitation, Uniform
Commercial Code financing statements) and shall do such other acts and things as Lender may at any
time reasonably 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. Without
limiting the foregoing, Debtor shall cooperate and do all acts deemed necessary or advisable by
Lender to continue in Lender a perfected first security interest in the Collateral, and shall
obtain and furnish to Lender any subordinations, releases, landlord waivers, lessor waivers,
mortgagee waivers, or control agreements, and similar documents as may be from time to time
requested by, and in form and substance satisfactory to, Lender.
(b) Debtor authorizes Lender 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 Lender 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 Lender’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
Lender such certificate showing the lien of this Agreement with respect to the Collateral. Debtor
ratifies its prior authorization for Lender 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 Lender, 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.
8. DEFAULT AND REMEDIES.
(a) Debtor shall be in default under this Agreement and each of the other Debt Documents
(other than the Warrant and the Confidential Disclosure Agreement) if:
(i) Debtor breaches its obligation to pay when due any installment or other amount due or
coming due under any of the Debt Documents and fails to cure the breach within ten (10) days;
(provided that such delay is not caused by Lender’s
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failure to automatically debit such payment from immediately available funds of Debtor pursuant to the authorization provided by Debtor to
Lender);
(ii) Debtor, without the prior written consent of Lender, attempts to or does sell, rent,
lease, license, mortgage, grant a security interest in, or otherwise transfer or encumber (except
for Permitted Liens and transfers of inventory in the ordinary course of business) any of the
Collateral;
(iii) Debtor breaches any of its insurance obligations under Section 5;
(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 Lender;
(v) Any warranty, representation or statement made by Debtor in any of the Debt Documents or
otherwise in 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 Lender
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 Lender;
(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;
(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 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
forty-five (45) days;
(xii) Debtor’s improper filing of an amendment or termination statement relating to a filed
financing statement describing the Collateral;
(xiii) There is a material adverse change in Debtor’s financial condition as determined solely
by Lender acting in good faith;
(xiv) Any Guarantor revokes or attempts to revoke its guaranty of any of the Indebtedness or
fails to observe or perform any covenant, condition or agreement to be performed under any guaranty
or other related document to which it is a party;
(xv) Debtor defaults under any other material obligation for (A) borrowed money, (B) the
deferred purchase price of property or (C) payments due under any lease agreement;
(xvi) At any time during the term of this Agreement, without Lender’s prior written consent,
(A) Debtor sells all or substantially all of its assets or (B) a change in the composition of
Debtor’s stockholders as of the date of this Agreement occurs resulting in a stockholder or
investor group acquiring more than 50% of any class of Debtor’s equity securities; or
(xvii) Except for Permitted Liens or as otherwise permitted herein, Debtor sells, transfers,
assigns, mortgages, pledges, leases, grants a security interest in or encumbers all of Debtor’s
Intellectual Property now existing or hereafter acquired in violation of the Negative Pledge. For
purposes of this paragraph xvii, licenses or sublicenses by Debtor of its Intellectual Property as
part of a research and development or similar arrangement shall be excluded. Debtor shall provide
Lender with a listing of licenses and sublicenses granted to third parties within ten (10)
days of receipt of reasonable written request for such information.
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(b) If Debtor is in default, the Lender, at its option, may declare any or all of the
Indebtedness to be immediately due and payable, by notice to Debtor. The accelerated obligations
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 the occurrence of a default, described in this Section 8, Lender shall have all of
the rights and remedies of a Lender under the Uniform Commercial Code, and under any other
applicable law. Without limiting the foregoing, after default Lender shall have the right to (i)
notify any account debtor of Debtor or any obligor on any instrument which constitutes part of the
Collateral to make payment to the Lender, (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 Lender, Debtor shall promptly assemble the Collateral and make it
available to Lender at a place to be designated by Lender which is reasonably convenient to both
parties. Lender may also render any or all of the Collateral unusable at Debtor’s premises and may
dispose of such Collateral on such premises without liability for rent or costs. Any notice that
Lender 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 Lender, whether as obligor, endorser, guarantor, surety or
indemnitor; fourth, to expenses incurred in paying or settling liens 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 Lender in
connection with the enforcement, assertion, defense or preservation of Lender’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) Lender’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
Lender 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
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
SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT, ANY OTHER DEBT
DOCUMENTS, OR TO ANY OTHER DOCUMENTS OR AGREEMENTS RELATING TO THIS TRANSACTION OR ANY RELATED
TRANSACTION. THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.
9. MISCELLANEOUS.
(a) This Agreement, any Note and/or any of the other Debt Documents may be assigned, in whole
or in part, by Lender without notice to Debtor, and Debtor agrees not to assert against any such
assignee, or assignee’s assigns, any defense, set-
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off, recoupment claim or counterclaim which Debtor has or may at any time have against Lender for any reason whatsoever. Debtor agrees that if
Debtor receives written notice of an assignment from Lender, Debtor will pay all amounts payable
under any assigned Debt Documents to such assignee or as instructed by Lender. Debtor also agrees
to confirm in writing receipt of the notice of assignment as may be reasonably requested by Lender
or assignee. Notwithstanding any assignment by Lender of its rights under this Agreement, no
assignee of such rights shall have any right to request or receive any confidential information of
Debtor unless such assignee first executes and delivers to Debtor a confidential disclosure
agreement substantially in the form of the Confidential Disclosure Agreement between Debtor and
Lender. Notwithstanding any contrary provision in any of the Debt Documents, Lender and any
assignee shall not have any right to assign or otherwise transfer any Debt Document to: (A) any
person or entity organized or domiciled outside the United States; (B) any person or entity with a
primary business activity involving the life sciences or the research, development or sale of
pharmaceutical or medical device products; or (C) any person or entity whose primary business
purpose is the buy-out or acquisition of operating companies.
(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 Boston, Massachusetts are required or authorized to be closed.
(c) Lender may fill in all blanks associated with dates 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 Lender, its successors
and assigns.
(e) This Agreement, its Collateral Schedules and the other Debt Documents 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 Lender 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 Lender 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 Lender 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) Debtor authorizes Lender to use its name, logo and/or trademark without notice to or
consent by Debtor, in connection with certain promotional materials that Lender may disseminate to
the public. The promotional materials may include, but are not limited to, brochures, video tape,
internet website, press releases, advertising in newspaper and/or other periodicals, lucites, and
any other materials relating the fact that Lender has a financing relationship with Debtor and such
materials may be developed, disseminated and used without Debtor’s review. Nothing herein
obligates Lender to use Debtor’s name, logo and/or trademark, in any promotional materials of
Lender.
(h) THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED
BY AND CONSTRUED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF DELAWARE (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
COLLATERAL.
8
IN WITNESS WHEREOF, Debtor and Lender, intending to be legally bound
hereby, have duly executed this Agreement in 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 | Cyberkinetics Neurotechnology Systems, Inc. | |||||
By:
|
/s/ Xxxxx Xxxxx | By: | /s/ Xxxxxxx X. Xxxxxxxx | |||
Name:
|
Xxxxx Xxxxx | Name: | Xxxxxxx X. Xxxxxxxx | |||
Title:
|
Senior Vice President | Title: | President and Chief Executive Officer | |||
| (Duly Authorized Officer) | ||||||
LIST OF EXHIBITS:
Exhibit A — Form of Note
Exhibit B — Form of Warrant
Exhibit C — Collateral Schedule
Exhibit D — Confidential Disclosure Agreement
Exhibit B — Form of Warrant
Exhibit C — Collateral Schedule
Exhibit D — Confidential Disclosure Agreement
