EXHIBIT 10.60
LOAN AGREEMENT
CORIXA CORPORATION
AND
BNP PARIBAS
August 3, 2001
LOAN AGREEMENT
THIS LOAN AGREEMENT (this "Agreement") is made as of August 3, 2001 by and
between CORIXA CORPORATION, a Delaware corporation (the "Borrower"), and BNP
PARIBAS, a French banking corporation acting through its San Xxxxxxxxx Xxxxxx
(the "Bank").
The Borrower and the Bank hereby agree as follows:
ARTICLE 1.
DEFINITIONS
SECTION 1.1. DEFINITIONAL PROVISIONS.
(a) Capitalized terms used in this Agreement and defined in Exhibit A
hereto, which Exhibit A is attached to this Agreement and by this reference made
a part hereof, shall have the respective meanings specified in such Exhibit A.
(b) All terms defined in Exhibit A shall have such defined meanings
when used in any Loan Document unless otherwise defined in such other document
or certificate.
(c) All accounting terms not specifically defined in this Agreement or
in Exhibit A hereto shall be construed in accordance with generally accepted
accounting principles as in effect in the United States of America.
ARTICLE 2.
LOAN
SECTION 2.1. COMMITMENT.
The Bank hereby agrees, on the terms and subject to the conditions of this
Agreement, to loan to the Borrower an aggregate principal amount of up to Seven
Million Five Hundred Thousand Dollars ($7,500,000) (the "Loan"). During the
Availability Period, the Bank will make a maximum of four (4) Disbursements to
the Borrower subject to the conditions set forth in Section 2.2, Section 2.10
and Section 4.2. The obligation of the Borrower to repay the Loan and to pay
interest and all other costs and charges payable hereunder will be evidenced by
a promissory note in the form of Exhibit B (the "Note") dated as of the Closing
Date and payable to the order of the Bank.
SECTION 2.2. DISBURSEMENTS.
The Borrower shall submit a written request, in the form attached hereto as
Exhibit C or such other form provided from time to time by the Bank to the
Borrower or a telephonic request to the Bank (provided that such telephonic
request is confirmed in a written notice by the Borrower to the Bank on the same
Business Day), for each Disbursement (the "Initial Notice") not later than 10:00
am (San Francisco time) on the third (3rd) Business Day prior to the desired
funding date in the case of any borrowing consisting of a Eurodollar Rate Loan
Portion, and not later than 10:00 am (San Francisco time) on the desired funding
date in the case of any
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borrowing consisting of a Prime Rate Loan Portion. The minimum amount for any
Loan Portion shall be One Million Dollars ($1,000,000), provided however, that
(i) the last Disbursement may equal the remaining available commitment under the
Loan and (ii) a Loan Portion may be less than $1,000,000 in order to permit the
scheduled repayment by the Borrower of principal on a Principal Payment Date
without incurring Funding Losses (but such Loan Portion may not be less than the
amount of such scheduled principal repayment amount). No Disbursement shall be
made after the expiration of the Availability Period. No Disbursement shall be
made unless and until the Borrower has timely complied with the provisions of
this Section 2.2, Section 2.10 and Section 4.2 hereinbelow.
SECTION 2.3. INTEREST RATE.
(a) The Loan shall bear interest, and the Borrower shall pay interest
on, the outstanding principal balance with respect to any portion of the Loan
which is a Eurodollar Rate Loan Portion, at a rate per annum on such Eurodollar
Rate Loan Portion equal (at all times during each applicable Interest Period) to
the Reserve Adjusted Eurodollar Rate for the applicable Interest Period plus the
Applicable Margin until the end of the applicable Interest Period; and
(b) The Loan shall bear interest, and the Borrower shall pay interest
on, the outstanding principal balance with respect to each portion of such Loan
which is not a Eurodollar Rate Loan Portion, at a rate per annum on each such
Loan Portion equal to the Prime Rate, until the Maturity Date.
(c) Computations of interest on the Eurodollar Rate Loan Portion will
be on the basis of a 360 day year, for actual days elapsed with respect to
interest accruing. Computations of all other interest will be on the basis of a
365 day or 366 day year, as the case may be, for actual days elapsed with
respect to interest accruing.
SECTION 2.4. CONVERSION AND CONTINUATION.
(a) The Borrower may elect by written notice in the form attached
hereto as Exhibit D (the "Election Notice") given to the Bank:
(i) by not later than 10:00 am (San Francisco time) on the third
Business Day prior to the expiration of the Interest Period for any
Eurodollar Rate Loan Portion, to continue such Loan Portion or any
part thereof as a Eurodollar Rate Loan Portion for the next succeeding
Interest Period. In the absence of a timely and effective Election
Notice to continue the applicable Loan Portion as a Eurodollar Rate
Loan Portion, the Borrower shall be deemed to have elected to convert
such Eurodollar Rate Loan Portion to a Prime Rate Loan Portion,
effective as of the last day of the preceding Interest Period;
(ii) by not later than 10:00 am (San Francisco time) on the third
Business Day prior to the proposed date for the conversion of a Prime
Rate Loan Portion or any part thereof to a Eurodollar Rate Loan
Portion, to convert such Prime Rate Loan Portion or any part thereof
to a Eurodollar Rate Loan Portion.
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Notwithstanding anything herein to the contrary, if a Default or an Event of
Default has occurred and is continuing, then the Borrower shall have no right to
give an Election Notice, and the Bank may ignore any attempt by the Borrower to
give an Election Notice.
(b) An Election Notice with respect to any Eurodollar Rate Loan
Portion shall contain the following information:
(i) the dollar amount which is to be continued as, or converted
to, a Eurodollar Rate Loan Portion; and
(ii) the duration of new Interest Period.
Notwithstanding anything herein to the contrary, the outstanding Loan balance
may not at any time be comprised of more than five (5) Eurodollar Rate Loan
Portions at the same time without the Bank's consent, which shall be in the
Bank's sole and absolute discretion. Once received by the Bank, any Initial
Notice or Election Notice will be irrevocable for the applicable Eurodollar Rate
Loan Portion for the applicable Interest Period.
SECTION 2.5. FUNDING LOSSES.
If the Borrower fails to draw down, to continue or to convert to, a
Eurodollar Rate Loan Portion after giving an Initial Notice or Election Notice
with respect thereto, the Borrower agrees to reimburse the Bank for its
expenses, funding losses and loss of anticipated profits due to such failure.
The Borrower and the Bank hereby agree that such expenses, funding losses and
loss of anticipated profits shall equal the sum of:
(a) (i) the principal amount of each such Eurodollar Rate Loan
Portion, (ii) times number of days between the date of failure to draw
down, continue or convert and the last day in the applicable Interest
Period divided by 360, (iii) times the applicable Interest Differential;
plus
(b) all reasonable actual out-of-pocket expenses (other than those
taken into account in the calculation of the Interest Differential)
incurred by the Bank (excluding allocations of any expense internal to the
Bank) and attributable to such failure to continue or convert.
Notwithstanding the foregoing, no reimbursement shall be payable (and no credit
or rebate shall be required) if the sum of the foregoing clauses (a) and (b) is
not a positive number.
SECTION 2.6. USE OF PROCEEDS.
The proceeds of the Loan shall be used by the Borrower for general
corporate purposes, which may include, among other purposes, construction,
expansion or improvements to a vivarium.
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SECTION 2.7. PAYMENTS.
(a) Interest only shall be payable on each Interest Payment Date
during the period commencing on the date of the initial Disbursement and
continuing through and including the Availability Termination Date.
(b) The principal amount of the Loan shall be payable in sixteen (16)
equal consecutive quarterly installments of principal (each installment being in
an amount sufficient to amortize the outstanding principal balance of the Loan
over a period of sixteen (16) quarters); i.e., each installment of principal
shall be equal to 6.25 % of the principal balance of the Loan on the
Availability Termination Date, payable quarterly on dates to be agreed at the
time of each Disbursement (each, a "Principal Payment Date") commencing
approximately three months after each Disbursement and continuing until the
Maturity Date, on which date the Borrower shall make a final payment in an
amount equal to the then unpaid principal of the Loan and all unpaid and accrued
interest thereon. With each installment of principal payable in accordance
herewith, the Borrower shall pay interest which has accrued at the Prime Rate.
Interest which has accrued at the Reserve Adjusted Eurodollar Rate shall be
payable on each Interest Payment Date applicable to each Eurodollar Rate Loan
Portion.
(c) The Borrower shall make all payments hereunder in U.S. Dollars and
in immediately available funds via electronic transfer to the Federal Reserve
Bank of New York, ABA Number 000000000, for account of BNP Paribas SF, account
number 14334000176, Reference: Corixa. Payments not made prior to 12:00 noon
(San Francisco time) on the date of payment will be deemed paid on the next
Business Day. Payments which are due on a day which is not a Business Day will
be payable on the next Business Day, with interest to accrue to such date of
payment, provided that, with respect to any payment of principal or interest
relating to a Eurodollar Rate Loan Portion, if the next succeeding Business Day
is in the next Payment Period, such payment shall be made on the next preceding
Business Day. All payments hereunder and under the Note shall be made without
setoff or counterclaim and in such amounts as may be necessary in order that all
such payments shall not be less than the amounts otherwise specified to be paid
under this Agreement or the Note, as the case may be.
(d) Any installment of interest only or of principal and interest paid
more than five (5) days late or any other amount payable hereunder which is not
paid when due, will bear (and the Borrower shall pay) interest (to the extent
permitted by law) from such due date until such unpaid amount has been paid in
full (whether before or after judgment) at a rate per annum equal to two percent
(2.0%) in excess of the rate then applicable to each Loan Portion until the end
of any Interest Period then applicable to such Loan Portion and thereafter at a
rate per annum equal to two percent (2.0%) in excess of the Prime Rate ("Default
Rate").
SECTION 2.8. FEES.
In partial consideration for the Bank making the Loan to the Borrower,
the Borrower shall pay to Bank during the Availability Period a commitment fee
("Commitment Fee") computed for each day at a rate equal to 0.50% per annum on
the actual daily amount of the undisbursed portion of the Loan, with such
Commitment Fee to be due and payable, in arrears, on the last Business Day of
each calendar month and on the Availability Termination Date.
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SECTION 2.9. PREPAYMENTS.
Subject to this Section 2.9, the Borrower may, upon three (3) Business
Days' prior notice to the Bank, prepay the outstanding amount of the Loan in
whole or in part. In the event that the Borrower prepays or is required to
prepay any Eurodollar Rate Loan Portion, the Borrower agrees to reimburse the
Bank for its expenses, funding losses and loss of anticipated profits due to
such prepayment or failure to draw. The Borrower and the Bank hereby agree that
such expenses, funding losses and loss of anticipated profits shall equal the
sum of:
(a) (i) The principal amount of each such Eurodollar Rate Loan
Portion, (ii) times number of days between the date of prepayment and the
last day in the applicable Interest Period divided by 360, (iii) times the
applicable Interest Differential; plus
(b) All reasonable actual out-of-pocket expenses (other than those
taken into account in the calculation of the Interest Differential)
incurred by the Bank (excluding allocations of any expense internal to the
Bank) and reasonably attributable to such payment or prepayment
(collectively, the "Funding Losses").
Notwithstanding the foregoing, no prepayment fee shall be payable (and no credit
or rebate shall be required) if the Funding Losses is not a positive number.
The Loan is not in a nature of a revolving loan; therefore, amounts prepaid or
repaid under the Note may not be reborrowed.
SECTION 2.10. CERTIFICATES OF DEPOSIT.
(a) SECURITY INTEREST. The Borrower shall maintain at all times as security
for the Borrower Obligations one or more Certificate(s) of Deposit issued by the
Bank to the Borrower, which Certificate(s) of Deposit shall at all times be in
an aggregate face amount at least equal to the principal amount of all
outstanding Loans. The Borrower hereby irrevocably grants to the Bank a
continuing security interest in each Certificate of Deposit to secure the
Borrower Obligations. Upon the occurrence and during the continuation of an
Event of Default, the Bank may, in its discretion, without notice, demand or
presentment to the Borrower, all of which is expressly waived by the Borrower,
liquidate or otherwise terminate any Certificate(s) of Deposit and apply the
proceeds thereof to the payment of any amount then due in respect of any
Borrower Obligation (including any amount due by virtue of acceleration of any
obligation); provided that the Bank shall promptly notify the Borrower following
any such liquidation or termination. Each Certificate of Deposit shall be
non-transferable (except for the security interest held by the Bank), shall
indicate on its face that the Bank holds a security interest therein, and shall
be physically retained by the Bank. The Borrower shall take such actions as may
be deemed necessary or appropriate in the judgment of the Bank to maintain and
to perfect (and to continue the perfection of) the Bank's security interest in
the Certificate(s) of Deposit, including the filing of financing statements. The
Borrower shall not create or permit to exist any lien, security interest or
claim of any type with respect to the Certificate(s) of Deposit other than the
Bank's security interest, and the Borrower shall take any action requested by
the Bank to protect and
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defend the Bank's first priority, perfected security interest in the
Certificate(s) of Deposit against the claims of any other person.
(b) DISBURSEMENTS. Prior to each Disbursement during the Availability
Period, the Borrower shall obtain one or more Certificate(s) of Deposit in an
aggregate principal amount equal to the amount of such Disbursement. If a
Disbursement consists of a single Prime Rate Loan Portion, the Borrower will
obtain a single Certificate of Deposit having a term of one, three, six or
twelve months, as elected by the Borrower. If the Disbursement consists of one
or more Eurodollar Rate Loan Portions, the Borrower will obtain a single
Certificate of Deposit for each Loan Portion having a term at least as long as
the Interest Period of each such Eurodollar Rate Loan Portion. If the
Disbursement consists of a Prime Rate Loan Portion and one or more Eurodollar
Rate Loan Portions, the Borrower will obtain a Certificate of Deposit having a
term of one, three, six or twelve months, as elected by the Borrower, with
respect to the Prime Rate Loan Portion, and a Certificate of Deposit for each
Loan Portion having a term equal to the Interest Period of each such Eurodollar
Rate Loan Portion, with respect to each Eurodollar Rate Loan Portion.
(c) ROLL-OVERS. In connection with each conversion or continuation of a
Loan Portion as provided in Section 2.4, the Bank shall, without further notice,
request or direction of any kind by the Borrower, convert or continue the
Certificate(s) of Deposit applicable to such Loan Portion as follows:
(i) If the Loan Portion resulting from the conversion or continuation
is a Prime Rate Loan Portion, the applicable Certificate of Deposit shall
have a term of one, three, six or twelve months, as designated by the
Borrower in the applicable Election Notice, provided that the applicable
Certificate of Deposit may have a maturity date which matches a Principal
Payment Date, and provided further that if the Borrower shall not designate
a Certificate of Deposit term in an Election Notice, the term of the
applicable Certificate of Deposit shall be one year.
(ii) If the Loan Portion resulting from the conversion or continuation
is a Eurodollar Rate Loan Portion, the applicable Certificate of Deposit
shall have a term equal to the Interest Period of such Eurodollar Rate Loan
Portion.
Upon the maturity date of any Certificate of Deposit applicable to a Prime Rate
Loan Portion, such Certificate of Deposit shall be automatically extended for
any additional period of twelve months, unless the Borrower shall designate a
term of one, three or six months by written notice delivered to the Bank not
less than three Business Days prior to such maturity. Notwithstanding any other
provision of this Agreement, no Certificate of Deposit shall have a maturity
date later than the Maturity Date for the Loan.
(d) INTEREST. Each Certificate of Deposit shall bear a rate of interest to
be determined by the Bank which is no less favorable than other time
certificates of deposit of like amount and tenor issued by the Bank to similarly
situated depositors. The Bank shall promptly notify the Borrower of each such
rate of interest. Interest shall be payable upon the maturity (or upon the
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liquidation or termination) of each Certificate of Deposit, provided that
interest shall be payable not less frequently than quarterly, and provided
further that, at the election of the Bank, interest may not be paid (but shall
accrue) following the occurrence and during the continuation of any Event of
Default. Upon any prepayment, liquidation or other termination of any
Certificate of Deposit prior to its stated maturity (including, without
limitation, prepayment, liquidation or other termination resulting from
acceleration of all or part of the Loans), the Borrower shall pay to the Bank
such prepayment penalties or charges as are provided in the applicable
Certificate of Deposit, or, if no such penalties or charges are specified, then
an amount (but only if such amount is positive) equal to (i) the amount of the
prepayment, (ii) times the number of days from the prepayment to the maturity
date of the Certificate of Deposit, (iii) divided by 360, (iv) times the
difference between the interest rate applicable to such Certificate of Deposit
and the interest rate which the Bank would offer as of the date of prepayment
for a certificate of deposit of like term and amount.
(e) CROSS-COLLATERALIZATION. The Bank's security interest in the
Certificate(s) of Deposit shall secure all Bank Obligations, whether incurred
under this Agreement or in connection with any other loan or credit facility
made or provided by the Bank to the Borrower and whether now existing or
hereafter created or incurred.
SECTION 2.11. INDEMNIFICATION: INCREASED COSTS.
If after the date of this Agreement the Bank reasonably determines that any
Regulatory Change, or compliance by the Bank with any request or directive
(whether or not having the force of law) of any governmental authority, central
bank or comparable agency charged with the interpretation or administration of
any applicable law, rule or regulation which is effective or issued after the
date hereof:
(a) Subjects the Bank to any tax, duty or other charge with respect to
the Loan or the Note, or changes the basis of taxation of payments to the Bank
of the principal of or interest on the Loan or any other amounts due under this
Agreement in respect of the Loan except for changes in the rate of tax on the
overall net income of the Bank imposed by any jurisdiction or any franchise tax
applicable to its lending office imposed by the State of California or the
jurisdictions in which the Bank's principal executive office or applicable
lending office is located) (such non-excluded amounts, "Taxes"); or
(b) Imposes, modifies or deems applicable any reserve (including,
without limitation, any reserve imposed by the Board of Governors of the Federal
Reserve System), special deposit, liquidity, capital maintenance, capital
adequacy, capital ratio (including, but without limitation thereto, any request
by or requirement of any regulatory body or official which affects the manner in
which the Bank allocates capital resources to its obligations hereunder); for
the account of, or credit extended by, the Bank or imposes on the Bank any other
condition affecting the Loan, or the Note; and the result of any of the
foregoing is to (A) impose a cost on or increase the cost to the Bank of making
or maintaining the Loan, or (B) cause an increase in any capital requirement
arising out of the making or maintenance of the Loan or any obligation to the
Borrower hereunder or, (C) reduce the amount of any sum received or receivable
by the Bank under this Agreement or under the Note, by an amount deemed by the
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Bank to be material, then, within fifteen (15) days after demand by the Bank,
the Borrower shall pay for the account of the Bank such additional amount or
amounts as will compensate the Bank for such increased cost or reduction as such
cost or reduction is incurred by the Bank. If the Bank makes any claim for
compensation under this Section 2.11, the Borrower may immediately elect by
written notice (or telephonic notice confirmed as soon as practicable in
writing) to the Bank to prepay the Loan (but subject to payment of any other
amounts due under Section 2.9 and this Section 2.11, including any increased
cost or reduction incurred through the date of such prepayment or conversion).
The Bank shall promptly notify the Borrower in writing and in reasonable detail
of any event of which it has knowledge, occurring after the date hereof, which
will entitle the Bank to compensation pursuant to this Section 2.11. The Bank
shall provide to the Borrower a certificate claiming compensation under this
Section 2.11, setting forth the additional amount or amounts to be paid to it
hereunder and showing in reasonable detail the Bank's calculation thereof which
shall be presumed to be correct. In determining such amount, the Bank may use
any reasonable averaging and attribution methods. The Bank shall exercise
reasonable efforts to promptly provide the Borrower with notice of the
imposition, or overtly threatened exercise of, any Regulatory Change set forth
in this Section 2.11 of which the Bank has actual knowledge, provided, however,
that the failure by the Bank to so provide such notice will not relieve the
Borrower of any of its obligations hereunder.
The Bank agrees that it will use reasonable efforts to reduce or eliminate any
claim for compensation pursuant to this Section 2.11, including designating a
different lending office for the Loans, if such designation will avoid the need
for or reduce the amount of any such compensation, provided that the Bank will
not be obligated to take any actions that would, in the sole opinion of the
Bank, be disadvantageous to the Bank in any material respect (it being
understood that the incurrence of any unreimbursed cost or expense by the Bank
that would not have been incurred but for such action is material).
SECTION 2.12. CHANGE IN LEGALITY.
(a) In the event that at any time the Bank shall have reasonably
determined (which determination shall be presumed to be correct until the
contrary shall have been established) that by reason of a change in any law or
regulation or in the interpretation thereof by any governmental authority
charged with the interpretation thereof affecting the Bank or the Eurodollar
market and applicable to any Eurodollar Rate Loan Portion, the making or
continuation of a loan at the applicable Reserve Adjusted Eurodollar Rate plus
the Applicable Margin has become unlawful, the Bank shall forthwith give written
notice (or telephonic notice, confirmed as soon as practicable in writing) to
the Borrower and the obligation of the Bank to make or maintain such Eurodollar
Rate Portion at the applicable Reserve Adjusted Eurodollar Rate plus the
Applicable Margin shall terminate and the Borrower shall forthwith upon receipt
of notice of such determination prepay such Eurodollar Rate Loan Portion without
premium or penalty (subject to Section 2.9), together with all interest accrued
on the amount prepaid to the date of prepayment. A certificate, setting forth
(x) each event which the Bank shall have determined makes the continuation of
such Eurodollar Rate Loan Portion unlawful and (y) any additional amounts
payable by the Borrower under Sections 2.9 (and the basis therefor and the
Bank's computation thereof) upon prepayment of such Eurodollar Rate Loan
Portion, shall be furnished to the Borrower by the Bank and shall be presumed
correct absent manifest error.
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(b) In the event that the Borrower is obligated to prepay a Eurodollar
Rate Loan Portion pursuant to clause (a) of this Section 2.12, the Borrower
shall have the right, upon written notice (or telephonic notice confirmed as
soon as practicable in writing) to the Bank, in lieu of such prepayment, to
elect to convert such Eurodollar Rate Portion to a Prime Rate Loan Portion,
effective on the date on which such prepayment would otherwise be required to
have been made, provided that on the effective date of conversion the Borrower
also shall pay all interest accrued on the amount converted to the date of
conversion and such additional amounts, if any, payable by the Borrower under
Section 2.9, as specified in the certificate furnished by the Borrower pursuant
to said clause (a).
(c) In the event that on the date for determining the Reserve Adjusted
Eurodollar Rate to be paid by the Borrower in respect of any Interest Period,
the Bank reasonably determines in good faith (which determination will be
conclusive and binding on the Borrower) that by reason of circumstances
affecting the London interbank Eurodollar market, either Eurodollar rates are
not offered in the London interbank Eurodollar market or adequate and fair means
do not exist for ascertaining the Reserve Adjusted Eurodollar Rate for such
Interest Period, the Bank shall promptly give to the Borrower telephonic notice
(confirmed as soon as practicable in writing) of such determination. During the
existence of such circumstances, any existing Eurodollar Rate Loan Portion in
respect of which such circumstances exist will convert to a Prime Rate Loan
Portion at the end of the applicable Interest Period.
ARTICLE 3.
REPRESENTATIONS AND WARRANTIES
The Borrower hereby represents and warrants to the Bank that:
SECTION 3.1. ORGANIZATION.
Borrower is a corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware; Borrower has the power to own
its assets, to transact the business in which it is presently engaged and is
duly qualified and in good standing in each jurisdiction in which the failure to
qualify to do business would materially adversely affect its financial condition
and business operations.
SECTION 3.2. POWER, AUTHORITY, CONSENTS.
(a) Borrower has the requisite corporate power to execute, deliver and
to perform its obligations under the Loan Documents.
(b) Borrower has the requisite corporate power to borrow hereunder and
has taken all necessary corporate action to authorize the borrowing hereunder on
the terms and conditions of this Agreement.
(c) Borrower has taken all necessary corporate action to authorize the
execution, delivery and performance of the Loan Documents.
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(d) No consent or approval of any Person, no waiver of any Lien or
right of distraint or other similar right and no consent, license, approval,
authorization or declaration of any governmental authority, bureau or agency is
or will be required in connection with the execution and delivery of the Loan
Documents by Borrower, or the performance by Borrower of its obligations
thereunder or the validity, enforcement or priority of the Loan Documents, or
any Lien created and granted thereunder, except such consents as have been
obtained and copies of which have been delivered to the Bank.
SECTION 3.3. NO VIOLATION OF LAW OR AGREEMENTS.
The execution and delivery of the Loan Documents and the performance by
Borrower of its obligations thereunder, will not violate any provision of law
and will not conflict with or result in a breach of any order, writ, injunction,
ordinance, resolution, decree, or other similar document or instrument of any
court or governmental authority, bureau or agency, domestic or foreign,
Borrower's charter or bylaws or create (with or without the giving of notice or
lapse of time, or both) a default under or breach of any agreement, bond, note
or indenture to which Borrower is a party, or by which it is bound or any of its
properties or assets is affected, or result in the imposition of any Lien of any
nature whatsoever upon any of the properties or assets owned by or used in
connection with the business of Borrower.
SECTION 3.4. DUE EXECUTION, VALIDITY, ENFORCEABILITY.
This Agreement and each of the other Loan Documents has been, or upon the
execution and delivery thereof, will be, duly executed and delivered by
Borrower, and each constitutes, or, upon the execution and delivery thereof,
will constitute, the valid and legally binding obligation of Borrower,
enforceable in accordance with its terms, except to the extent that the
enforcement thereof may be limited by applicable bankruptcy, moratorium,
insolvency, reorganization, or other similar laws or equitable principles
relating to the enforcement of creditors' rights generally.
SECTION 3.5. JUDGMENTS, ACTIONS, PROCEEDINGS.
There are no outstanding judgments, actions (including, without
limitation, derivative actions), suits or proceedings pending before any court
or governmental authority, bureau or agency, or, to the best of the Borrower's
knowledge, threatened against or affecting Borrower, having a claim or amount in
controversy that exceeds $1,000,000 in the aggregate at any one time.
SECTION 3.6. NO DEFAULTS, COMPLIANCE WITH LAWS.
Borrower is not in material default under any agreement, ordinance,
resolution, decree, bond, note, indenture, order or judgment to which it is a
party or by which it is bound, or its charter documents or bylaws, or any other
agreement or other instrument by which any of the properties or assets owned by
it or used in the conduct of its business is affected or evidencing,
guaranteeing or relating to any outstanding indebtedness, liability or
obligation for borrowed money or lease obligations, which default could have a
material adverse effect on the business, operations, financial condition or
properties of Borrower, or on Borrower's ability to perform its
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obligations under the Loan Documents. Borrower has complied and is in compliance
in all material respects with all applicable laws, ordinances and regulations,
the non-compliance with which could have a material adverse effect on the
business, operations, financial condition or properties of Borrower, or on the
ability of Borrower to perform its obligations under the Loan Documents.
SECTION 3.7. NO MATERIALLY ADVERSE CONTRACTS, ETC.
Borrower is not subject to any charter, corporate or other legal
restriction, or any judgment, decree, order, rule or regulation that has, or is
expected in the judgment of the Borrower to have, a materially adverse effect on
the business, assets or financial condition of the Borrower. Borrower is not a
party to any contract or agreement that has or is expected, in the judgment of
the Borrower, to have any materially adverse effect on the business of the
Borrower.
SECTION 3.8. FINANCIAL STATEMENTS.
(a) Borrower has furnished to the Bank its most recent audited
Financial Statements and all subsequent unaudited Financial Statements which are
available to the public. Each of the Financial Statements is correct and
complete in all material respects and presents fairly the financial condition of
the Borrower, at its date or for the respective period, and has been prepared in
accordance with generally accepted accounting principles.
(b) As of the date of such Financial Statements, the Borrower had no
material obligation, liability or commitment, direct or contingent, which was
not reflected in the Financial Statements or in any notes thereto in accordance
with generally accepted accounting principles.
(c) There has been no material adverse change in the financial
position or operations of the Borrower since the date of the Financial Statement
for the fiscal year ending December 31, 2000.
(d) The Borrower's fiscal year is the twelve (12) month period ending
on December 31 in each year.
SECTION 3.9. TITLE TO PROPERTIES; LEASES.
Except as disclosed in the footnotes to the Financial Statements, Borrower
owns all of the assets reflected in the most recent balance sheet or acquired
since that date (except property and assets leased, sold or otherwise disposed
of in the ordinary course of business since that date), subject to no rights of
others, including any mortgages, ordinary or capital leases, conditional sales
agreements, title retention agreements, liens or other encumbrances other than
Permitted Liens.
SECTION 3.10. LIENS.
The Liens which have been or will be created and granted by the Loan
Documents upon the execution and delivery thereof constitute, or will constitute
upon such execution and
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delivery, valid first priority Liens on the properties and assets covered by the
Loan Documents, subject to no other liens.
SECTION 3.11. PATENTS, COPYRIGHTS, LICENSES, ETC.
To the best of its knowledge, the Borrower owns or has a valid right to use
all patents, copyrights, trademarks, trade names, licenses, franchises, and
rights in respect of the foregoing (collectively the "Intellectual Property
Rights") adequate for the conduct of its business substantially as now conducted
without conflict with any rights of others, and there are no suits or claims for
infringement with respect to the Intellectual Property Rights.
SECTION 3.12. TAX RETURNS.
(a) The Borrower has filed all federal and state income tax returns
and all other tax returns, reports, and declarations required by law to be filed
by it and has not failed to pay any taxes, or interest and penalties relating
thereto, on or before the due dates thereof except for returns, taxes, interest
or penalties with respect to which it has duly filed extensions or is contesting
the validity thereof by appropriate legal proceedings diligently conducted in
good faith. Borrower has not received any notice of any audits of the federal
income tax returns of the Borrower and has no knowledge of any pending audits.
(b) Except to the extent that reserves therefor are reflected in the
Financial Statements, (i) there are no material federal, state or local tax
liabilities of the Borrower due or to become due for any tax year ended on or
prior to the date of the most recent balance sheet included in the Financial
Statements, whether incurred in respect of or measured by the income of such
entity, which are not properly reflected in such balance sheet, and (ii) there
are no material claims pending or, to the knowledge of the Borrower proposed or
threatened against the Borrower for past federal, state or local taxes.
SECTION 3.13. REGULATION U; MARGIN STOCK.
No part of the proceeds received by the Borrower from the Loan will be used
directly or indirectly for the purpose of purchasing or carrying, or for payment
in full or in part of indebtedness which was incurred for the purposes of
purchasing or carrying, any margin stock as such term is defined in Regulation U
of the Board of Governors of the Federal Reserve System, 12 C.F.R., Chapter H,
Part 221. The Borrower does not own margin stock which would, in the aggregate,
constitute a substantial part of the assets of the Borrower.
SECTION 3.14. FULL DISCLOSURE.
Neither the Financial Statements nor any certificate, opinion, or any other
statement made or furnished in writing to Bank by or on behalf of the Borrower
in connection with this Agreement or the transactions contemplated herein,
contains any statement of a material fact that, in light of the circumstances
under which it was made, is untrue, or omits to state a material fact necessary
to make the statements contained therein or herein, in light of the
circumstances under which they were made, not misleading.
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SECTION 3.15. ERISA.
(a) None of the Borrower or any of its Affiliates has pension or other
employee benefit plans which are subject to the provisions of Title IV of ERISA
(any such plans which have been or may hereafter be adopted or assumed by the
Borrower are hereinafter referred to individually as a "Plan" and, collectively,
as the "Plans"). In connection with the Plans, Borrower does not have, or know
of any likely event which will give rise to, any direct or contingent material
liabilities of the Borrower to the Pension Benefit Guaranty Corporation
("PBGC"), the Department of Labor or the Internal Revenue Service ("IRS").
(b) None of the Borrower or any of its Affiliates is a participating
employer in any Plan under which more than one employer makes contributions as
described in Sections 4063 and 4064 of ERISA.
(c) None of the Borrower or any of its Affiliates is a participating
employer in a multiemployer plan as defined in Section 4001 (a) of ERISA, which
participation could give rise to material withdrawal liability on the part of
the Borrower, as the case may be under Subtitle E of Title IV of ERISA.
For purposes of this Agreement, all references to "ERISA" shall be deemed
to refer to the Employee Retirement Income Security Act of 1974 (including any
sections of the Code) as heretofore amended and as it may hereafter be amended
or modified, and all regulations promulgated thereunder, and all references to
the Borrower in this Section 3.15, or in any other Section of this Agreement
relating to ERISA, shall be deemed to refer to the Borrower and all other
entities which are part of a Controlled Group with respect to the Borrower.
SECTION 3.16. OTHER REGULATION.
The Borrower is not subject to regulation under the Investment Company Act
of 1940, the Public Utility Holding Company Act of 1935, the Federal Power Act,
the Interstate Commerce Act, any state public utilities code or any federal or
state statute or regulations limiting its ability to incur Indebtedness.
SECTION 3.17. COMPLIANCE WITH SECURITIES LAWS.
All offers and sales of securities of the Borrower have been made in
material compliance with all applicable federal and state securities laws,
including without limitation the Securities Act of 1933 and the Securities
Exchange Act of 1934, both as amended.
SECTION 3.18. SOLVENCY.
The Borrower is solvent and is not the subject of bankruptcy insolvency
proceedings.
SECTION 3.19. SUBSIDIARIES OR AFFILIATES.
The Borrower does not have any Subsidiary or Affiliate other than as set
forth in Schedule 3.19.
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ARTICLE 4.
CONDITIONS PRECEDENT
SECTION 4.1. CONDITIONS PRECEDENT TO THE EFFECTIVENESS OF THIS AGREEMENT.
The effectiveness of this Agreement and the obligations of the Bank
hereunder shall be subject to the following conditions precedent:
(a) the Borrower will have executed and delivered this Agreement and
the Note;
(b) the Borrower will have executed and delivered to the Bank the
First Amendment to the Year 2000 Agreement and the Second Amendment to the
1997 Agreement;
(c) the Borrower will have otherwise fully complied with all of the
terms and conditions of the Loan Documents;
(d) the Borrower will have delivered to the Bank the following, in
form and substance acceptable to the Bank:
(i) a copy of the certificate of incorporation of Borrower
certified by the Secretary of State of Delaware;
(ii) a copy of the bylaws of the Borrower certified by its
Secretary;
(iii) a copy of resolutions of the Board of Directors of the
Borrower authorizing the execution, delivery and performance by the
Borrower of (i) this Agreement, any Note, the Loan Documents and all
instruments and documents provided for herein or therein, (ii) the
First Amendment to Year 2000 Agreement, and (iii) the Second Amendment
to the Year 1997 Agreement, certified by the Secretary of the
Borrower;
(iv) a good standing certificate for the Borrower, dated as of a
date not more than ten (10) days prior to the Closing Date from the
Secretary of State of the State of Delaware;
(v) an incumbency certificate with respect to the officers of the
Borrower, Certified by its Secretary; and
(vi) evidence that Borrower is qualified to do business in the
State of Washington and is in good standing as a foreign corporation
in such state.
(e) the legal counsel of the Borrower will have delivered to the Bank
such legal counsel's favorable legal opinion as to the due organization,
existence, qualification to do business, and good standing of the Borrower,
the due
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authorization, execution and enforceability of this Agreement, the other
Loan Documents, the First Amendment to Year 2000 Agreement and the Second
Amendment to Year 1997 Agreement, the absence of pending and threatened
litigation, the non-contravention of other documents, instruments, laws,
and regulations, and such other matters as the Bank may reasonably require,
in form and substance reasonably satisfactory to the Bank;
(f) the Bank shall have received all fees and expenses (including,
without limitation, Bank's reasonable legal fees and expenses incurred in
the negotiation and preparation of the Loan Documents, the First Amendment
to Year 2000 Agreement and the Second Amendment to Year 1997 Agreement, and
any other fees and expenses of the Bank for UCC searches or filing fees)
required to be paid to Bank on or before the Closing Date; and
(g) all representations and warranties of the Borrower contained
herein are true and correct in all material respects as of the Closing Date
and Borrower will have executed and delivered to Bank such certificates
with respect thereto as Bank may reasonably require.
SECTION 4.2. CONDITIONS PRECEDENT TO DISBURSEMENTS.
The obligation of the Bank to make Disbursements shall be subject to the
following conditions precedent:
(a) the Borrower shall have obtained Certificates of Deposit with the
Bank under the terms and conditions of Section 2.10;
(b) all representations and warranties of the Borrower contained
herein shall be true and correct in all material respects as of the
proposed date of Disbursement and the Borrower shall have executed and
delivered to the Bank such certificates with respect thereto as the Bank
may reasonably require;
(c) the Borrower shall have complied with each and every condition and
covenant set forth in this Agreement, including, without limitation, those
set forth in Section 2.2 and Section 2.10; and
(d) no Event of Default has occurred or is continuing, and no event
has occurred or is existing, which with the giving of notice or passage of
time or both, would constitute an Event of Default.
ARTICLE 5.
AFFIRMATIVE COVENANTS
So long as the Borrower is indebted to the Bank hereunder, and until
payment in full of the Note and full and complete performance of all of its
other obligations arising hereunder (except for the Borrower's obligations under
Section 5.7 or Section 9.1 to indemnify the Bank
-15-
under certain circumstances following the payment of the Note), the Borrower
shall in all material respects:
SECTION 5.1. BOOKS AND RECORDS.
Keep proper books of record and account in a manner reasonably satisfactory
to the Bank in which entries (which shall be true and correct in all material
respects) shall be made of all dealings or transactions in relation to its
business and activities.
SECTION 5.2. PERFORM OBLIGATIONS.
Pay and discharge all of its obligations and liabilities including, without
limitation, all taxes, assessments and governmental charges upon its income and
properties, when due, unless and to the extent only that such obligations,
liabilities, taxes, assessments and governmental charges are contested in good
faith and by appropriate proceedings and that, to the extent required by GAAP
then in effect, proper and adequate book reserves relating thereto are
established by the Borrower, and provided that the Borrower has provided such
security or other assurances as the Bank reasonably requests.
SECTION 5.3. FEES AND EXPENSES.
Pay within a reasonable period of demand: (i) all costs and expenses
(including, without limitation, reasonable legal fees, filing fees and UCC
search fees) of the Bank in connection with the preparation, execution and
delivery of this Agreement, and the other Loan Documents; (ii) all reasonable
costs and expenses of the Bank in enforcing the Borrower's performance of and
compliance with all agreements and conditions contained in the Loan Documents on
its part to be performed or complied with or in connection with the negotiation,
preparation and execution and delivery of any amendment, modification or
supplement of or to, or any consent or waiver under, any such document in each
case which is executed by the Borrower (or any such instrument which is proposed
by the Borrower but not executed and delivered) or relating to any claim or
action threatened, made or brought against the Bank arising out of or relating
to any extent to the Loan Documents, or the transactions contemplated hereby or
thereby; (iii) all reasonable costs and expenses (including, without limitation,
reasonable fees and disbursements of counsel) suffered or incurred by the Bank
in connection with the enforcement or the payment of the Note or any other sum
due to it under any of the other Loan Documents or any of its other rights
hereunder or thereunder; and (iv) any and all reasonable costs and expenses
incurred by Bank in conducting lien searches, UCC searches or other due
diligence investigations which the Bank reasonably determines are necessary to
monitor the Borrower's performance hereunder and which are incurred after the
Closing Date; notwithstanding the foregoing, Borrower shall not be liable for
lost profits or consequential damages solely by virtue of the provisions of this
Section 5.3.
SECTION 5.4. MAINTENANCE OF EXISTENCE; CONDUCT OF BUSINESS.
Preserve and maintain its corporate existence and all of its rights,
privileges and franchises necessary or desirable in the normal conduct of its
business except for transfers (including, without limitation, transfers in the
form of paid-up licenses) for reasonably equivalent
-16-
value in the normal course of its business. The Borrower shall comply in all
material respects with all applicable laws, rules, regulations, orders, writs,
decrees and judgments and its charter and bylaws, and with the material terms of
all mortgages, indentures, leases, contracts and other agreements and
instruments binding upon the Borrower. The Borrower will continue to engage in
business of the same general type as now conducted by the Borrower.
SECTION 5.5. INSURANCE.
Maintain with financially sound and reputable insurers insurance with
respect to its properties and business against such liabilities, casualties and
contingencies and of such types and in such amounts as shall be customary for
businesses engaged in similar activities in similar geographic areas. Without
limiting the foregoing, the Borrower will (i) keep all of its physical property
insured against fire and extended coverage risks in amounts and with deductibles
equal to those generally maintained by businesses engaged in similar activities
in similar geographic areas, (ii) maintain all such workers' compensation or
similar insurance as may be required by law, and (iii) maintain, in amounts and
with deductibles equal to those generally maintained by businesses engaged in
similar activities in similar geographic areas, general public liability
insurance against claims for bodily injury, death or property damage occurring
on, in or about the properties of the Borrower, business interruption insurance
and product liability insurance.
SECTION 5.6. CERTAIN TAXES.
(a) If, under any law in effect on the date hereof, or under any law
subsequently enacted which law is applicable during the term of this Agreement,
it is determined that any U.S. federal, state or local tax is payable in respect
of the issuance of the Note, or in connection with the filing or recording of
any assignments, mortgages, financing statements, or other documents (whether
measured by the amount of indebtedness secured or otherwise) as contemplated by
this Agreement, then the Borrower shall pay any such tax and all interest and
penalties thereon, if any, and shall indemnify the Bank against and save it
harmless from any loss or damage resulting from or arising out of the nonpayment
or delay in payment of any such tax.
(b) If any such tax or taxes shall be assessed or levied against the
Bank or any other holder of the Note, the Bank, or such other holder, as the
case may be, may notify the Borrower and make immediate payment thereof,
together with interest or penalties in connection therewith, and will thereupon
be entitled to and shall receive immediate reimbursement therefor from the
Borrower.
(c) Notwithstanding any other provision contained in this Agreement,
the covenants and agreements of the Borrower in this Section 5.6 will survive
for two (2) years following the payment of the Note and the termination of this
Agreement.
SECTION 5.7. USE OF PROCEEDS.
The Borrower will not use any of the proceeds of such Loans, directly or
indirectly, for the purpose of purchasing or carrying any margin stock or for
the purpose of purchasing or carrying or trading in any securities under such
circumstances as to involve the Borrower or the Bank in a violation of
Regulation G, T, U or X issued by the Federal Reserve Board.
-17-
ARTICLE 6.
DELIVERY OF FINANCIAL REPORTS,
DOCUMENTS AND OTHER INFORMATION
So long as the Borrower is indebted to the Bank hereunder and until payment
in full of the Note and full and complete performance of all of its other
obligations arising hereunder, the Borrower shall deliver to the Bank:
SECTION 6.1. ANNUAL FINANCIAL STATEMENTS.
Annually, as soon as available, but in any event within one hundred (100)
days after the last day of the fiscal year, the balance sheet of the Borrower as
of such last day of the fiscal year and statements of operations, stockholders'
equity and cash flows, for such fiscal year, on a consolidated basis, prepared
in accordance with generally accepted accounting principles consistently
applied, in reasonable detail, audited and opined on by independent public
accountants reasonably satisfactory to the Bank (which audit opinion shall
contain no qualification unsatisfactory to the Bank), to present fairly the
financial position and the results of operations of the Borrower as of the end
of such fiscal year and to have been prepared in accordance with generally
accepted accounting principles; provided, that delivery by the Borrower of a
copy of its Form 10-K shall be deemed compliance with this Section 6.1.
SECTION 6.2. QUARTERLY FINANCIAL STATEMENTS.
As soon as available, but in any event within fifty (50) days after the end
of each fiscal quarter ended on the last day of each March, June and September,
balance sheets for the Borrower as of the last day of each such quarter and
statements of operations, and cash flows, for such quarter, all in reasonable
detail and on a consolidated basis. Each such statement shall be certified on
behalf of the Borrower by the Borrower's controller, director of finance or
chief financial officer as fairly presenting the financial position and the
results of operations of the Borrower as of the end of such fiscal quarter and
as having been prepared in accordance with generally accepted accounting
principles consistently applied (subject to normal adjustments); provided, that
delivery by the Borrower of copy of its Form 10-Q shall be deemed compliance
with this Section 6.2.
SECTION 6.3. MONTHLY ACTUAL CASH BURN CERTIFICATES.
Not later than the 20th day of each calendar month, a certificate,
certified on behalf of the Borrower by the Borrower's controller, director of
finance or chief financial officer, showing the Actual Cash Burn for the
previous calendar month, containing such detail respecting use of Cash and Cash
Equivalents and respecting Cash and Cash Equivalents on hand as the Bank may
reasonably request.
SECTION 6.4. 10Q AND 10K FILINGS.
Promptly after its Form 10-Q is released to the public (which in all events
shall be within forty-five (45) days after the end of the fiscal quarters ended
March, June and September or, if later, the date of the filing of the Form 10-Q
with the Securities and Exchange Commission), a
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copy of each Form 10-Q; and, each year promptly after its Form 10K is released
to the public (which in all events shall be within one hundred twenty (120) days
after the end of the Borrower's fiscal year), a copy of its Annual Report to
Stockholders along with its Form 10K.
SECTION 6.5. OTHER INFORMATION.
Promptly after a written request therefor, such other financial data or
information evidencing compliance with the requirements of this Agreement and
the other Loan Documents as the Bank may reasonably request from time to time.
SECTION 6.6. NO EVENT OF DEFAULT CERTIFICATE.
At the same time as it delivers the Financial Statements required under the
provisions of Sections 6.1 -- "Annual Financial Statements" and 6.2 --
"Quarterly Financial Statements," a certificate of the Borrower signed on its
behalf by an Authorized Signatory or its director of finance, to the effect
that, to the best of the Borrower's knowledge, no Event of Default hereunder has
occurred or, if such cannot be so certified, specifying in reasonable detail the
exceptions, if any, to such statement.
SECTION 6.7. NOTICES.
(a) DEFAULT. As soon as possible and in any event within seven (7)
days after the Borrower has knowledge of the occurrence or existence of any
event which with the giving of notice or passage of time or both, would
constitute an Event of Default, the statement of the Borrower setting forth
details of such event and the action which the Borrower proposes to take with
respect thereto.
(b) LITIGATION AND JUDGMENTS. Promptly after obtaining knowledge
thereof, written notification of any litigation or legal proceedings instituted
against the Borrower, regardless of the subject matter thereof, having claims or
amounts in controversy of more than $1,000,000 in the aggregate at any one time.
ARTICLE 7.
NEGATIVE COVENANTS
So long as the Borrower is indebted to the Bank hereunder, and until
payment in full of the Note and full and complete performance of all of its
other obligations arising hereunder (except for the Borrower's obligations under
Sections 5.6 or Section 9.1 to indemnify the Bank under certain circumstances
following the payment of the Note), the Borrower shall not do, or permit to be
done, any of the following:
SECTION 7.1. LIENS.
Without the Bank's consent, create or assume or permit to exist, any Lien
upon or with respect to any of its assets, or assign or otherwise convey any
right to receive income except the following Liens ("Permitted Liens"):
(a) Liens in favor of the Bank;
-19-
(b) Liens for taxes, assessments or governmental charges or levies on
property of the Borrower if the same shall not at the time be delinquent or
thereafter can be paid without interest or penalty or are being contested
in good faith and by appropriate proceedings which serve as a matter of law
to stay the enforcement thereof and as to which adequate reserves have been
made ("General Tax Liens");
(c) Liens imposed by law, such as carrier's, warehousemen's and
mechanic's liens and other similar Liens arising in the ordinary course of
business for sums not yet due or which are being contested in good faith
and by appropriate proceedings which serve as a matter of law to stay the
enforcement thereof and as to which adequate reserves have been made;
(d) Liens incurred in the ordinary course of business in connection
with workmen's compensation, unemployment insurance or other forms of
governmental insurance or benefits, or to secure performance of tenders,
statutory obligations, leases and contracts (other than for borrowed money)
entered into in the ordinary course of business or to secure obligations on
surety or appeal bonds;
(e) judgment Liens in existence less than 30 days after the entry
thereof or with respect to which execution has been stayed or the payment
of which is covered in full (subject to a customary deductible) by
insurance maintained with responsible insurance companies;
(f) Permitted Purchase Money Liens (including, without limitation,
Liens arising in connection with equipment leases);
(g) rights of other parties under technology licenses from the
Borrower granted in connection with the development, manufacture or
marketing of pharmaceutical or other products, or otherwise in the ordinary
course of business;
(h) rights of the United States government in certain technology, the
development of which is or was funded in whole or in part by the United
States government; and
(i) security deposits under leases of the Borrower's premises, any
interest or title of a lessor secured by a lessor's interest under any such
lease, or any leases or subleases granted to others not interfering in any
material respect with the business of the Borrower and its Subsidiaries to
which the property subject to such lease or sublease relates; and
(j) other Liens securing indebtedness of not more than $500,000.
SECTION 7.2. CHANGES IN BUSINESS; MERGER OR CONSOLIDATION; DISPOSITION OF
ASSETS.
Without the Bank's consent which shall not be unreasonably withheld and
which shall be granted or denied within a commercially reasonable period:
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(a) Consolidate with, merge into or convey or transfer its properties
substantially as an entirety to, any Person, except that the Borrower may
participate in any merger in which the Borrower is the surviving entity so long
as after giving effect to such merger the Borrower remains in compliance with
all covenants and conditions of this Agreement.
(b) Make any material change in the nature of its business as
presently conducted, or in the nature of its operations as presently conducted,
or liquidate or dissolve itself (or suffer any liquidation or dissolution).
(c) Effect any disposition of all or substantially all of its assets
(whether in one or more transactions) except that (i) the Borrower may dispose
of obsolete or worn out equipment, (ii) the Borrower may replace equipment with
upgraded equipment and may thereafter dispose of the equipment so upgraded and
replaced, (iii) the Borrower may engage in research and development transactions
(each, an "R&D Transaction") involving the licensing of the Borrower's rights in
certain technology to other persons, provided that Borrower receives fair market
consideration for such licensing and, provided that after giving effect to each
such R&D Transaction, the Borrower remains in compliance with all covenants and
conditions of this Agreement; and (iv) dispose of other assets in the ordinary
course of Borrower's business provided that Borrower receives equivalent value
on such disposition of assets.
SECTION 7.3. VIOLATION OF AGREEMENT.
Take any action the effect of which would constitute a material breach or
violation of any provision of this Agreement.
ARTICLE 8.
EVENTS OF DEFAULT
SECTION 8.1. EVENTS OF DEFAULT.
If any one or more of the following events ("Event of Default") shall occur
and be continuing, the entire unpaid balance of the principal of and interest on
the Note and all other obligations and Indebtedness of the Borrower to the Bank
arising hereunder and under the other Loan Documents, including without
limitation any required payments under Section 2.5 and Funding Losses, will (i)
in the case of any Event of Default of the types referred to in subparagraph (e)
below, immediately become due and payable without notice and (ii) in the case of
any other Event of Default, immediately become due and payable upon written
notice to that effect given to the Borrower by the Bank, without presentment or
demand for payment, notice of non-payment, protest or further notice or demand
of any kind, all of which are expressly waived by the Borrower. Upon an Event of
Default, the Bank shall have the rights and remedies provided for herein,
including without limitation such rights and remedies with respect to the
Certificates of Deposit as provided in Section 2.10, and in the other Loan
Documents and under applicable law and in equity, and the rights and remedies
provided for herein shall be cumulative and in addition to the rights and
remedies provided for therein. Notwithstanding anything herein to the contrary,
any obligation of the Bank to fund the Loan during the Availability Period shall
terminate upon the occurrence of an Event of Default. Each of the following
shall constitute an Event of Default:
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(a) Failure by the Borrower to make any payment when due of any amount
of principal or interest payable under the Loan Documents or any other credit or
loan facility between the Borrower and the Bank, which failure is not cured
within five (5) days of the occurrence thereof, or failure by the Borrower to
make any payment of any other amount payable under the Loan Documents within
five (5) days of written notice of such amount being due and payable.
(b) Failure by the Borrower to make any mandatory payments under any
borrowing agreement (other than the Loan Documents) to which the Borrower is a
party within any applicable grace period provided in such agreement or any other
default by the Borrower under any such borrowing agreement and the failure of
the Borrower to cure such default within any applicable grace period, provided
that no Event of Default will be deemed to have occurred under this paragraph
(b) with respect to any indebtedness under any borrowing agreement if payment of
such indebtedness, after notice thereof having been given to the Bank, is being
contested by the Borrower in good faith and by appropriate proceedings and such
contest operates to prevent the other party to such agreement from exercising
its remedies against the Borrower or any of its properties and the amount in
dispute is in the aggregate less than $250,000.
(c) Failure by the Borrower to perform or observe any material term,
condition or covenant of this Agreement, any of the Loan Documents, or any other
loan or credit agreement between the Borrower and the Bank, which failure (other
than a failure which by its nature is not capable of cure and other than a
failure to perform or observe any term, condition or covenant referred to or set
forth in Subparagraphs (a) and (b) above) is not cured within thirty (30) days
of the occurrence thereof.
(d) Any representation or warranty made in writing to the Bank in any
of the Loan Documents or in connection with the making of the Loan or a
certificate, statement or report made or delivered pursuant to this Agreement,
or in any other loan or credit agreement or facility made by the Bank to the
Borrower, will have been false or misleading in any material respect when made
or delivered.
(e) The Borrower makes an assignment for the benefit of creditors,
files a petition for bankruptcy, petitions or applies to any tribunal for the
appointment of a receiver, custodian, or any trustee for it or a substantial
part of its assets, or commences any proceeding under any bankruptcy,
reorganization, arrangement, readjustment of debt, dissolution or liquidation
law or statute of any jurisdiction, whether now or hereafter in effect; or there
will have been filed any such petition or application, or any such proceeding
has been commenced against it, which remains undismissed for a period of sixty
(60) days or more; or any order for relief is entered in any such proceeding; or
the Borrower by any act or omission indicates its consent to, approval of or
acquiescence in any such petition, application or proceeding or the appointment
of a custodian, receiver or any trustee for it or any substantial part of any of
its properties; or the Borrower suffers any custodianship, receivership or
trusteeship to continue undischarged for a period of sixty (60) days or more.
(f) Any single judgment of $1,000,000 or more or a combination of
unsecured judgments aggregating $1,000,000 or more against the Borrower not
covered by
-22-
insurance or any attachment or levy of execution against any substantial part of
the Borrower's properties for any amount (not covered by insurance) remains
unpaid, unstayed on appeal, undischarged, unbonded or undismissed for a period
of thirty (30) days or more.
(g) Any Loan Document ceases to be in full force and effect in all
material respects for any reason (other than due to the payment in full of all
amounts secured or evidenced thereby or due to discharge in writing by the
Bank).
(h) Failure of the Borrower to maintain Certificates of Deposit with
the Bank as required by Section 2.10.
(i) Failure by the Borrower, at any time, to maintain a Net Cash Level
at least equal to: (A) during each of the fiscal years ending on December 31,
2001 and December 31, 2002, the greater of [1] $37,500,000 or [2] the sum of [a]
the then outstanding principal balance of the Aggregate Bank Debt, plus [b] the
immediately preceding four months' Actual Cash Burn, plus [c] an amount equal to
the Interest Reserve, plus [d] Restricted Cash, less [e] an amount equal to the
Bank Secured Funds and (B) during each of the fiscal years ending on December
31, 2003, December 31, 2004 and December 31, 2005, the greater of [1]
$22,500,000 or [2] the sum of [a] the then outstanding principal balance of the
Aggregate Bank Debt, plus [b] the immediately preceding four months' Actual Cash
Burn, plus [c] an amount equal to the Interest Reserve, plus [d] Restricted
Cash, less [e] an amount equal to the Bank Secured Funds.
(j) After the Closing Date, there is a material adverse change in the
business or financial condition of the Borrower.
ARTICLE 9.
MISCELLANEOUS PROVISIONS
SECTION 9.1. INDEMNITY; ADDITIONAL FEES
The Borrower shall indemnify Bank against, and hold it harmless from, any
loss, liabilities, damages, claims, and reasonable costs and expenses (including
reasonable attorneys' fees and disbursements) suffered or incurred by the Bank
arising out of or resulting from the Loan Documents, or any transaction
contemplated thereby, except an indemnified party shall not be entitled to
indemnification for any such loss arising solely from the indemnified party's
own gross negligence or willful misconduct. The provisions of this Section 9.1
will survive for a period of three (3) years following the repayment of the Note
and the termination of this Agreement.
SECTION 9.2. SURVIVAL OF AGREEMENTS AND REPRESENTATION.
All agreements, representations and warranties made herein will survive
the delivery of the Loan Documents.
SECTION 9.3. MODIFICATIONS, CONSENTS AND WAIVERS.
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No modification, amendment or waiver of or with respect to any provision of
the Loan Documents, nor consent to any departure by a party from any of the
terms or conditions thereof shall in any event be effective unless it is in
writing and signed by the party against whom such modification, amendment,
waiver or consent is sought to be enforced. Any such waiver or consent will be
effective only in the specific instance and for the purpose for which given. No
consent to or demand on the Borrower in any case will, of itself, entitle it to
any other or further notice or demand in similar or other circumstances.
SECTION 9.4. ENTIRE AGREEMENT.
This Agreement and the other Loan Documents embody the entire agreement and
understanding between the Bank and the Borrower and supersede all prior
agreements and understandings relating to the subject matter hereof.
SECTION 9.5. REMEDIES CUMULATIVE.
Each and every right granted to the Bank hereunder or under any other
document delivered hereunder or in connection herewith, or allowed it by law or
equity, is cumulative and may be exercised from time to time. No failure on the
part of the Bank or the holder of the Note to exercise, and no delay in
exercising, any right shall operate as a waiver thereof, nor will any single or
partial exercise of any right preclude any other or future exercise thereof or
the exercise of any other right.
SECTION 9.6. FURTHER ASSURANCES.
At any time and from time to time, upon the reasonable request of the Bank,
the Borrower shall execute, deliver and acknowledge or cause to be executed,
delivered and acknowledged such further documents and instruments and do such
other acts and things as the Bank may reasonably request to fully effect the
purposes of the Loan Documents and any other agreements, instruments and
documents delivered pursuant to the Loan Documents or in connection with the
Loan.
SECTION 9.7. NOTICES.
All notices, requests, reports and other communications pursuant to this
Agreement must be in writing, either by letter (delivered by hand or commercial
delivery service or sent by certified mail, return receipt requested, except for
routine reports which may be by ordinary first class mail) or facsimile or
telecopier, addressed as follows:
If to Borrower: Corixa Corporation
0000 Xxxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxx, XX 00000
Attn: Xx. Xxxxxxxx Xxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
if to Borrower's counsel: Xxxxxx Xxxxxxxxxx & Sutcliffe LLP
000 0xx Xxxxxx, Xxxxx 0000
-00-
Xxxxxxx, Xxxxxxxxxx 00000
Attn: Xxxxx Xxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
If to Bank: BNP Paribas
San Xxxxxxxxx Xxxxxx
000 Xxxxxxxxxx Xxxxxx, Xxxxx Xxxxx
Xxx Xxxxxxxxx, XX 00000
Attn: Xxxxxxxxx Xxxxx, Vice President
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
If to Bank's Counsel: Xxxxx Xxxxxxx LLP
Xxx Xxxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxxxx, XX 00000-0000
Attn: Xxxxx Xxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Any notice, request or communication hereunder will be deemed to have been given
(i) on the day on which it is delivered by hand to such party at its address
specified above, (ii) if sent by mail, on the third (3rd) Business Day following
the day it was deposited in the mail, postage prepaid, or (iii) if sent by
telecopy, when transmitted addressed as aforesaid on a Business Day during
normal business hours and receipt is confirmed, on such Business Day. Any party
may change the person or address to whom or which notices are to be given
hereunder, by notice duly given hereunder, provided, however, that any such
notice will be deemed to have been given hereunder only when actually received
by the party to which it is addressed.
SECTION 9.8. CONSTRUCTION; GOVERNING LAW.
(a) The headings used in this Agreement and the table of contents are
for convenience only and will not be deemed to constitute a part hereof. Any
uses herein of the masculine gender or of singular or plural terms will be
deemed to include uses of the feminine or neuter gender or plural or singular
terms, as the context may require. All references herein (including the
definitions set out in Appendix A hereto) to any agreements shall be to such
agreement as amended or modified to the date of reference. All references to a
particular entity shall include a reference to such entity's successors and
permitted assigns. The words "herein," "hereof" and "hereunder" refer to this
Agreement as a whole and not to any particular section or subsection of this
Agreement. "Including" means "including, without limitation".
(b) THIS AGREEMENT WILL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED
IN ACCORDANCE WITH, THE LAWS OF THE STATE OF CALIFORNIA WITHOUT REFERENCE TO ITS
CONFLICT OF LAWS RULES.
SECTION 9.9. WAIVER OF JURY TRIAL.
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EACH OF THE BORROWER AND THE BANK HEREBY KNOWINGLY, VOLUNTARILY AND
INTENTIONALLY WAIVES ANY AND ALL RIGHTS IT MAY HAVE TO A TRIAL BY JURY IN
RESPECT OF ANY LITIGATION BASED ON, OR ARISING OUT OF, UNDER, OR IN CONNECTION
WITH, THIS AGREEMENT, ANY LOAN DOCUMENT OR ANY COURSE OF CONDUCT, COURSE OF
DEALING, STATEMENTS (WHETHER ORAL OR WRITTEN), OR ACTIONS OF THE BORROWER OR THE
BANK. THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE BANK PROVIDING THE LOAN
DESCRIBED HEREIN.
SECTION 9.10. JURISDICTION.
(a) Each of the Borrower and the Bank hereby irrevocably and
unconditionally submits, for itself and its property, to service of process
(directly or on an agent) in California to the nonexclusive jurisdiction of any
California state court or Federal court of the United States of America in each
case sitting in San Francisco, and any appellate court handling an appeal from
any thereof, in any action or proceeding arising out of or relating to this
Agreement or any other Loan Agreement, or for recognition or enforcement of any
judgment, and the Borrower and the Bank hereby irrevocably and unconditionally
agree that all claims in respect of any such action or proceeding may be heard
and determined in such California state or, to the extent permitted by law, in
such Federal court. Each of the Borrower and the Bank agrees that a final
judgment in any such action or proceeding shall be conclusive and may be
enforced in other jurisdictions by suit on the judgment or in any other manner
provided by law. Nothing in this Agreement shall affect any right that a party
may otherwise have to bring any action or proceeding relating to this Agreement
or any other Loan Agreement against any other party or its respective properties
in the court of any jurisdiction.
(b) Each of the Borrower and the Bank hereby irrevocably and
unconditionally waives, to the fullest extent it may legally and effectively do
so, any objection which it may now or hereafter have to the laying of venue of
any suit, action or proceeding arising out of or relating to this Agreement in
any such California state or Federal court. Each of the Borrower and the Bank
hereby irrevocably waives, to the fullest extent permitted by law, the defense
of an inconvenient forum to the maintenance of such action or proceeding in any
such court.
SECTION 9.11. RELATIONSHIP OF THE BORROWER AND THE BANK.
The Borrower and the Bank agree that nothing contained in this Agreement
or any other document executed in connection with the Loan is intended or shall
be construed to establish the Borrower and the Bank as joint venturers or
partners; and the Borrower hereby indemnifies and agrees to hold the Bank, its
officers, directors, agents and employees harmless from any and all damages
resulting from such a construction of the relationship of the parties hereto,
except any such damage arising solely from the Bank's own gross negligence or
willful misconduct.
SECTION 9.12. SEVERABILITY.
The provisions of this Agreement are severable, and if any clause or
provision hereof shall be held invalid or unenforceable in whole or in part in
any jurisdiction, then such invalidity
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or unenforceability will affect only such clause or provision, or part thereof,
in such jurisdiction and will not in any manner affect such clause or provision
in any other jurisdiction, or any other clause or provision in this Agreement in
any jurisdiction. Each of the covenants, agreements and conditions contained in
this Agreement is independent and compliance by the Borrower with any of them
will not excuse noncompliance by the Borrower with any other.
SECTION 9.13. BINDING EFFECT: ASSIGNMENT.
(a) This Agreement will be binding upon and inure to the benefit of
the Borrower and its successors and its assigns as permitted herein and to the
benefit of the Bank and its successors and assigns.
(b) The rights and obligations of the Borrower under this Agreement
may not be assigned or delegated without the prior written consent of the Bank,
and any purported assignment or delegation without such consent shall be void.
(c) The Bank, with the consent of the Borrower, which consent shall
not be unreasonably denied may at any time assign or grant participations to any
other Person in all or part of its rights and obligations under the Loan
Documents; provided, however, that no such assignment or participation may be
made or shall be effective unless the Bank shall have delivered prior written
notice thereof to the Borrower of the proposed effective date and amount of such
assignment or participation and the identity of the proposed assignee or
participant. Notwithstanding the foregoing, the Bank may at any time and without
prior written notice to the Borrower, assign all or part of its rights and
obligations under the Loan Documents to a related entity without the consent of
the Borrower. The Bank shall be the agent of any participants for the purpose of
the receipt and delivery of funds and notices under the Loan Documents.
SECTION 9.14. COUNTERPARTS.
This Agreement may be executed in counterparts, each of which will be
deemed an original, but all of which will constitute one and the same document.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed as of the date first above written.
CORIXA CORPORATION
/s/ Xxxx Xxx
--------------------------------------
By: Xxxx Xxx
Title: Treasurer
BNP PARIBAS, acting through its
San Xxxxxxxxx Xxxxxx
/s/ Pierre Xxxxxxxx Xxxxxx
--------------------------------------
By: Pierre Xxxxxxxx Xxxxxx
Title: Managing Director
/s/ Xxxxxx X. Xxxxxxx
--------------------------------------
By: Xxxxxx X. Xxxxxxx
Title: Vice President
-27-
EXHIBIT A TO LOAN AGREEMENT
DEFINITIONS
The following words shall have the meanings specified below in the Section
of the Agreement referred to below.
"Actual Cash Burn" -- for a given calendar month, the amount (if any) by
which the Borrower's total ordinary expenses (including, without limitation,
research and development expenses) exceed its ordinary income (including
realized gains from short-term and long-term investments but excluding funds
received from the sale of assets, other than in the ordinary course of business,
and funds received from the sale or issuance of securities of the Borrower).
"Affiliate" -- as to any Person, any other Person which directly or
indirectly controls, or is under common control with, or is controlled by, such
Person. As used in this definition, "control" (including, with its correlative
meanings, "controlled by" and "under common control with") shall mean possession
directly or indirectly, of power to direct or cause the direction of management
or policies (whether through ownership of securities or partnership or other
ownership interests, by contract or otherwise). The term "Affiliate" shall not
include any Person who controls another Person solely by virtue of such Person's
position as a corporate officer or director of such other Person.
"Aggregate Bank Debt" -- from time to time, the principal amount of all
loans, advances and other credit facilities then outstanding made by the Bank to
the Borrower, including without limitation the Loans outstanding under this
Agreement and advances outstanding under the Year 2000 Agreement and the Year
1997 Agreement.
"Agreement" -- is defined in the Preamble.
"Applicable Margin" -- means one and one-half percent (1.50%).
"Authorized Signatory" -- with respect to a corporation, any officer of
such corporation.
"Availability Period" -- the period commencing on the Closing Date and
ending on the Availability Termination Date.
"Availability Termination Date" -- means the earliest to occur of (a) the
date on which the fourth Disbursement is made, (b) the date on which the maximum
principal amount of the Loan ($7,500,000) in the aggregate is funded, or (c)
January 31, 2002.
"Bank" -- is defined in the Preamble.
"Bank Secured Funds" -- all Borrower cash and deposited funds maintained at
the Bank in which the Bank holds a valid, perfected and first priority security
interest under this Agreement, the Year 2000 Agreement or the Year 1997
Agreement.
"Borrower" -- is defined in the Preamble.
-29-
"Borrower Obligations" -- means all payment and performance obligations of
the Borrower to the Bank arising under this Agreement, the Note, and all other
agreements between the Borrower and the Bank, whether such obligations are now
existing and/or hereafter created or incurred under any presently existing
agreement between the Bank and the Borrower (including this Agreement), and
whether such obligations are due or not due, liquidated or unliquidated,
contingent or current.
"Business Day" -- a day when commercial banks in San Francisco, California
and, in the case of setting the Reserve Adjusted Eurodollar Rate, London,
England, are open for business with respect to transactions of the kind
contemplated in this Agreement.
"Cash and Cash Equivalents" -- liquid investments, consisting of cash and
cash equivalents and other investments in investment grade securities, that are
classified on the Borrower's consolidated balance sheet as current, non-current,
long-term or restricted.
"Certificate of Deposit" -- one or more time certificates of deposit issued
by the Bank to the Borrower in connection with this Agreement, together with the
proceeds and products thereof.
"Closing Date" -- August 3, 2001.
"Code" -- the Internal Revenue Code of 1986, as amended.
"Commitment Fee" is defined in Section 2.8.
"Controlled Group" all members of a controlled group of corporations and
all trades or businesses (whether or not incorporated) under common control
which, together with the Borrower, are treated as a single employer under
Section 414(b), 414(c) or 414(m) of the Code and Section 4001(a)(2) of ERISA.
"Default" -- means an event which with the passage of time or the giving
notice or both would constitute an Event of Default.
"Default Rate" -- is defined in Subsection 2.7(d).
"Disbursement" -- a disbursement of available proceeds of the Loan.
"Election Notice" -- is defined in Subsection 2.4(a).
"ERISA" -- is defined in Section 3.15.
"Eurocurrency Reserve Percentage" -- with respect to each Interest Period,
a percentage (expressed as a decimal) equal to the percentage (if any) in effect
two Business Days prior to the first day of such Interest Period, as prescribed
by the F.R.S. Board, for determining reserve requirements applicable to
"Eurocurrency liabilities" pursuant to Regulation D or any other then applicable
regulation of the F.R.S. Board which prescribes reserve requirements applicable
to "Eurocurrency liabilities," as presently defined in said Regulation D. For
purposes of this
A-2
definition, Eurodollar Rate Loan Portions hereunder shall be deemed to be
"Eurocurrency liabilities" as defined in said Regulation D.
"Eurodollar Rate" -- for any Eurodollar Rate Loan Portion, with respect to
the applicable interest Period relating to such Eurodollar Rate Loan Portion,
the rate per annum (rounded up to the next whole multiple of 1/16 of 1% if the
rate per annum is not a whole multiple of l/16 of 1%) equal to the rate at which
United States dollar deposits are offered to the Bank in the London interbank
Eurodollar market as of approximately 11:00 a.m., London, England time, on the
second Business Day prior to the first day of such Interest Period for delivery
in immediately available funds on the first day of such Interest Period for the
number of days in such Interest Period and in an amount equal to the amount of
the Eurodollar Rate Loan Portion.
"Eurodollar Rate Loan Portion -- any portion of the Loan which bears
interest at the Reserve Adjusted Eurodollar Rate plus the Applicable Margin for
the applicable Interest Period.
"Event of Default" -- is defined in Section 8.1.
"Federal Funds Rate" -- means, for any day, the weighted average of the
rates on overnight Federal funds transactions between members of the Federal
Reserve System arranged by Federal funds brokers, as published on the next
succeeding Business Day by the Federal Reserve Bank of New York, or, if such
rate is not so published for any day which is a Business Day, the average of the
quotations for such transactions on such day obtained by the Bank from three
Federal funds brokers of recognized standing selected by it.
"Financial Statements" -- (a) the audited consolidated balance sheet and
consolidated statements of operations, shareholders' equity and cash flows of
Borrower for the fiscal year then ended, together with the unqualified opinion
of the independent public accountants preparing such statements; and (b) the
quarterly unaudited consolidated balance sheet and unaudited consolidated
statements of operations, and cash flows for Borrower for the fiscal quarters
ended March, June, September and December, certified as to accuracy by the Chief
Financial Officer or director of finance of Borrower.
"First Amendment to Year 2000 Agreement" -- that certain First Amendment to
Loan Agreement, dated as of August 3, 2001, between the Borrower and the Bank
with respect to the Year 2000 Agreement.
"Funding Losses" -- is defined in Section 2.9.
"GAAP" -- generally accepted accounting principles.
"General Tax Liens" -- is defined in Subsection 7.1(b).
"Indebtedness" -- with respect to any Person, all:
(a) indebtedness, liabilities or other obligations of such Person for
borrowed money or for the deferred purchase price of property or services
(excluding all operating lease obligations and trade accounts payable and
accrued
A-3
obligations incurred in the ordinary course of business) as determined in
accordance with generally accepted accounting principles consistently
applied and any other contingent liabilities of such Person;
(b) indebtedness, liabilities or obligations evidenced by notes,
bonds, debentures or similar instruments, including obligations so
evidenced incurred in connection with the acquisition of property, assets
or businesses;
(c) reimbursement and other obligations of such Person in respect of
letters of credit and bankers acceptance and all net obligations in respect
of interest rate swaps, caps, floors and collars, currency swaps, and other
similar financial products;
(d) indebtedness created or arising under any conditional sale or
other title retention agreement with respect to property acquired by such
Person;
(e) obligations under leases which shall have been or should be, in
accordance with GAAP, recorded as capital leases; and
(f) indebtedness of another Person of the types referred to in clauses
(a) through (e) guaranteed directly or indirectly in any manner by the
Person for whom Indebtedness is being determined, or in effect guaranteed
directly or indirectly by such Person through an agreement to purchase or
acquire such indebtedness, to advance or supply funds for the payment or
purchase of such indebtedness or otherwise assure a creditor against loss,
or secured by any Lien upon or in property owned by the Person for whom
Indebtedness is being determined, whether or not such Person has assumed or
become liable for the payment of such indebtedness of such other Person.
"Initial Notice" -- is defined in Subsection 2.2.
"Intellectual Property Rights" -- is defined in Section 3.11.
"Interest Differential" -- with respect to (i) any prepayment of a
Eurodollar Rate Loan Portion on a day other than the last day of the applicable
Interest Period or (ii) the failure to draw down, continue or convert to a
Eurodollar Rate Loan Portion on the first day of the applicable Interest Period
identified in an Initial Notice or Election Notice, the difference between: (a)
the per annum interest rate payable with respect to such Eurodollar Rate Loan
Portion as of the date of such prepayment or failure and (b) the Reserve
Adjusted Eurodollar Rate plus the Applicable Margin which the Bank determines
would be payable with respect to such Eurodollar Rate Loan Portion on, or as
near as practicable to, the date of such prepayment or failure. The
determination of the Interest Differential by the Bank shall be conclusive in
the absence of manifest error.
"Interest Payment Date" -- (a) with respect to any Prime Rate Loan Portion,
the last Business Day of each calendar month, (b) with respect to any Eurodollar
Rate Loan Portion, the last day of each applicable Interest Period and, if such
Interest Period is longer than three (3)
A-4
months, also on the last day of each three (3) month period during such Interest
Period (with the first such three month period commencing on the first day of
the applicable Interest Period); and (c) for any Loan Portion, the date that the
Loan Portion is due by either the occurrence of Maturity Date or an Event of
Default having occurred and the maturity of the Loan having been accelerated
pursuant to the terms of the Loan Documents.
"Interest Period" -- as to any Eurodollar Rate Loan Portion, the period
commencing on the date of the initial funding of such Eurodollar Rate Loan
Portion or the last day of the immediately preceding Interest Period for any
Eurodollar Rate Loan Portion that is to be continued as a Eurodollar Rate Loan
Portion and ending, with respect to such Eurodollar Rate Loan Portion, on the
numerically corresponding day (or if there is no numerically corresponding day,
on the last day), in the calendar month that is one, two, three, six or, if
available, twelve months thereafter, in each case as the Borrower may elect in
the Election Notice; provided however, that (a) no Interest Period with respect
to any Eurodollar Rate Loan Portion shall end later than the Maturity Date, (b)
if an Interest Period would end on a day that it is not a Business Day, such
Interest Period shall be extended to the next succeeding Business Day unless
such next succeeding day would fall in the next calendar month, in which case,
such Interest Period shall end on the immediately preceding Business Day, (c)
interest shall accrue from and including the first day of an Interest Period to
but excluding the last Business Day of such Interest Period, and (d) in the
event of continuation of any Eurodollar Rate Loan Portion, the Borrower may
elect a Eurodollar Rate period other than one, two, three, six or twelve months
as may be necessary to match the Eurodollar Rate Loan Portion with any Principal
Payment Date.
"Interest Reserve" -- as of any date of determination, the amount equal to
interest that would accrue, at the applicable interest rates, over the next
twelve (12) months on an amount equal to the principal balance of (a) the Loans
outstanding under the Agreement on such date of determination, (b) the advances
outstanding under the Year 2000 Agreement on the date of such determination, and
(c) the advances outstanding under the Year 1997 Agreement on the date of such
determination.
"IRS" -- is defined in Subsection 3.15(a).
"Lien" -- any mortgage, deed of trust, pledge, security interest,
encumbrance, lien or charge of any kind (including any agreement to give any of
the foregoing, any conditional sale or other title retention agreement and any
lease in the nature of a security interest or lien).
"Loan" -- is defined in Section 2.1.
"Loan Documents" -- this Agreement, the Note, and all other documents
executed and delivered in connection herewith or therewith, including all
amendments, modifications and supplements of or all such documents.
"Loan Portion" -- as the circumstances or context warrants, the portion of
the Loan which is a Eurodollar Rate Loan Portion, or Prime Rate Loan Portion.
A-5
"Maturity Date" -- means that date which is the fourth anniversary of the
Availability Termination Date.
"Net Cash Level" -- the aggregate amount of the market value of Cash and
Cash Equivalents less (i) restricted cash (but not including any amounts in the
Certificates of Deposit which are restricted or pledged for the benefit of the
Bank), (ii) amounts which may be restricted in the future pursuant to existing
or future agreements between the Borrower and third parties and (iii) and
amounts pledged pursuant to agreements between the Borrower and third parties.
"Note" -- is defined in Section 2.1.
"PBGC" -- is defined in Subsection 3.15(a).
"Permitted Liens" -- is defined in Section 7.
"Permitted Purchase Money Liens" -- purchase money security interests in
personal property acquired after the date hereof to secure purchase money
Indebtedness, to the extent that the amount of money borrowed does not exceed
the value of the personal property purchased, and the security interest granted
does not extend beyond the personal property purchased.
"Person" -- an individual, a corporation, a partnership, a joint venture, a
limited liability company, a trust or unincorporated organization, a joint stock
company or other similar organization, a government or any political subdivision
thereof, a court, or any other legal entity, whether acting in an individual,
fiduciary or other capacity.
"Plan(s)" -- is defined in Subsection 3.15(a) hereof.
"Prime Rate" -- means the higher of (i) the sum of the Federal funds Rate
plus .50% and (ii) the prime rate of the Bank as announced by the Bank, from
time to time, such prime rate being the rate of interest used as a reference
point from which the cost of credit to customers may be calculated and which is
subject to change from time to time, with the Bank making loans bearing interest
below, at or above its prime rate. The Prime Rate may change from time to time,
and the interest payable on the Loan when calculated with reference to the Prime
Rate shall fluctuate with changes in the Prime Rate. Any changes in the Prime
Rate shall become effective, without prior notice, on the date on which the
Prime Rate changes.
"Prime Rate Loan Portion" -- any portion of the Loan which bears interest
calculated on the basis of the Prime Rate.
"Principal Payment Date" -- is defined in Section 2.7.
"R&D Transaction" -- is defined in Subsection 7.2(c).
"Regulatory Change" -- any change after the date of this Agreement in
United States federal, state or local laws or regulations or the adoption or
making after such date of any interpretations, directives or requests applying
to a class of banks including the Bank of or under any United States federal,
state, or local laws or regulations (whether or not having the force of
A-6
law) by any court or governmental or monetary authority charged with the
interpretation or administration thereof.
"Reporting Period" -- a fiscal quarter of the Borrower
"Reserve Adjusted Eurodollar Rate" -- with respect to any Eurodollar Rate
Loan Portion for any Interest Period, a rate per annum (rounded upwards, if
necessary, to the nearest 1/100 of 1%) determined pursuant to the following
formula:
Reserve Adjusted Eurodollar Rate
Eurodollar Rate = ------------------------------------
1 - Eurocurrency Reserve Percentage
"Restricted Cash" -- all Cash or Cash Equivalents which is deemed
restricted under GAAP or under procedures consistently applied by the Borrower.
"Second Amendment to Year 1997 Agreement" -- that certain Second Amendment
to Loan Agreement, dated as of August 3, 2001, between the Borrower and the Bank
with respect to the Year 1997 Agreement.
"Subsidiary" -- any person of which the Borrower owns directly or
indirectly: (i) sufficient capital stock to enable it to elect at least a
majority of the board of directors or similar managing body of such person, or
(ii) capital stock with rights under the charter documents of such Person to
elect a director or similar managing official with the power to veto material
business decisions and organizational changes.
"Taxes" -- is defined in Subsection 2.11(a).
"UCC" -- the Uniform Commercial Code in effect from time to time in the
relevant jurisdiction.
"Year 1997 Agreement" -- that certain Loan Agreement, dated as of December
29, 1997, between the Bank (as successor to The Sumitomo Bank, Limited) and the
Borrower, as amended.
"Year 2000 Agreement" -- that certain Loan Agreement, dated as of September
18, 2000, between the Borrower and the Bank, as amended.
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