EXHIBIT 10.39
TERM NOTE
$18,800,000 May 7, 2003
FOR VALUE RECEIVED, GUILFORD PHARMACEUTICALS INC., a corporation
organized and existing under the laws of the State of Delaware (the "Borrower")
hereby promises to pay to the order of WACHOVIA BANK, NATIONAL ASSOCIATION, a
national banking association (together with any and all of its successors and
assigns and/or any other holder of this Note, "Lender"), without offset, in
immediately available funds in lawful money of the United States of America, the
principal sum of EIGHTEEN MILLION EIGHT HUNDRED THOUSAND DOLLARS ($18,800,000)
(or the unpaid balance of all principal advanced against this Note, if that
amount is less), together with interest on the unpaid principal balance of this
Note from day to day outstanding as hereinafter provided.
1. Payment Schedule and Maturity Date. The unpaid principal
balance of this Note shall be payable in monthly installments on the dates and
in the amount set forth in Schedule I attached hereto and made a part hereof and
shall be calculated so as to fully amortize the unpaid principal balance of the
Term Loan over a period of two hundred forty (240) months.. Accrued and unpaid
interest on this Note shall be due and payable monthly, commencing on June 1,
2003 and continuing on the first day of each succeeding month thereafter until
all principal and accrued interest owing on this Note shall have been fully paid
and satisfied. On May 1, 2008 (the "Maturity Date"), the final maturity of this
Note, the entire principal balance of this Note then unpaid and all accrued and
unpaid interest then unpaid shall be finally due and payable in full. The
Borrower has elected to authorize the Lender to effect payment of sums due under
this Note by means of debiting the Borrower's account number 2044003395624. This
authorization shall not affect the obligation of the Borrower to pay such sums
when due, without notice, if there are insufficient funds in such account to
make such payment in full on the due date thereof, or if the Lender fails or is
unable to debit the account for any reason.
2. Loan Agreement; Security. This Note is the "Term Note" as
defined in that certain Loan and Security Agreement dated as of the date hereof
by and between the Borrower and the Lender (as amended, restated, supplemented
or otherwise modified, the "Loan Agreement"). All capitalized terms used herein
but not specifically defined herein shall have the meanings given such terms in
the Loan Agreement. The security for this Note includes the collateral as more
particularly described in the Loan Agreement.
3. Interest Rate.
(a) The unpaid principal balance of this Note from day to day
outstanding which is not past due, shall bear interest at a fluctuating rate of
interest equal to the LIBOR-Based Rate. The LIBOR-Based Rate shall adjust and be
reset automatically as of the first day of each calendar month and shall remain
in effect for each such calendar month (each an "Interest Period"). The
LIBOR-Based Rate means the LIBOR Rate, plus fifty (50) basis points per annum.
The "LIBOR Rate" means, with respect to each Interest Period, the rate for U.S.
dollar deposits with a 1-month maturity as reported on Telerate page 3750 as of
11:00 a.m., London
time, on the second London Business Day before such Interest Period (or if not
so reported, then as determined by the Lender) from another recognized source or
interbank quotation. "Telerate Page 3750" means the British Bankers Association
Libor Rates (determined as of 11:00 a.m. London time) that are published by
Bridge Information Systems, Inc. "Business Day" means a day on which commercial
banks are open for international business (including dealings in U.S. Dollar
deposits in London, England). Interest shall be computed for the actual number
of days which have elapsed, on the basis of a 360-day year.
(b) Any principal of, and to the extent permitted by applicable
law, any interest on this Note, and any other sum payable hereunder, which is
not paid when due shall bear interest, from the date due and payable until paid,
payable on demand, at a rate per annum equal to the LIBOR Rate, plus two hundred
fifty (250) basis points.
4. Prepayment. Subject to the provisions of this Section 4,
Borrower may prepay the principal balance of this Note, in full at any time or
in part from time to time, without fee, premium or penalty, provided that: (a)
Lender shall have actually received from Borrower prior written notice of (i)
Xxxxxxxx's intent to prepay, (ii) the amount of principal which will be prepaid
(the "Prepaid Principal"), and (iii) the date on which the prepayment will be
made; (b) each prepayment shall be in the amount of $1,000 or a larger integral
multiple of $1,000 (unless the prepayment retires the outstanding balance of
this Note in full); and (c) each prepayment shall be in the amount of 100% of
the Prepaid Principal, plus accrued unpaid interest thereon to the date of
prepayment, plus any other sums which have become due to Lender under the Loan
Documents on or before the date of prepayment but have not been paid. In
addition, the Borrower agrees to indemnify and reimburse the Lender and to hold
the Lender harmless from any out-of-pocket loss, cost or expense which the
Lender may incur due to (a) a default by the Borrower in payment when due of any
required principal and/or interest payment, (b) the failure of the Borrower to
make any prepayment after the Borrower has given notice of such intention to
make such a prepayment, and/or (c) the making by the Borrower of a prepayment on
a day which is not the last day of an Interest Period, including, without
limitation, any such loss or expense arising from the reemployment of funds
obtained by the Lender to maintain all or any portion of the loan evidenced by
this Note or from fees payable to terminate the deposits from which such funds
were obtained.
5. Late Charges. If Borrower shall fail to make any payment under
the terms of this Note within ten (10) days after the date the Lender gives
notice to the Borrower that such payment is due, Borrower shall pay to Lender on
demand a late charge equal to five percent (5%) of such payment. Such ten (10)
day period shall not be construed as in any way extending the due date of any
payment. The "late charge" is imposed for the purpose of defraying the expenses
of Lender incident to handling such delinquent payment. This charge shall be in
addition to, and not in lieu of, any other remedy Lender may have and is in
addition to any fees and charges of any agents or attorneys which Xxxxxx may
employ upon the occurrence of a Default (hereinafter defined) hereunder, whether
authorized herein or by law.
6. Certain Provisions Regarding Payments. All payments made on
this Note shall be applied, to the extent thereof, to late charges, to accrued
but unpaid interest, unpaid principal (with application being made first to the
balloon payment due on the Maturity Date and then to the
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annual installments in the inverse order of their maturity), and any other sums
due and unpaid to Lender under the Loan Documents, in such manner and order as
Lender may elect in its sole discretion. Remittances in payment of any part of
the indebtedness other than in the required amount in immediately available U.S.
funds shall not, regardless of any receipt or credit issued therefor, constitute
payment until the required amount is actually received by Lender in immediately
available U.S. funds and shall be made without offset, demand, counterclaim,
deduction, or recoupment (each of which is hereby waived) and accepted subject
to the condition that any check or draft may be handled for collection in
accordance with the practice of the collecting bank or banks. Acceptance by the
holder hereof of any payment in an amount less than the amount then due on any
indebtedness shall be deemed an acceptance on account only, notwithstanding any
notation on or accompanying such partial payment to the contrary, and shall not
in any way excuse the existence of a Default.
7. Defaults.
(a) It shall be a default ("Default") under this Note and
each of the other Loan Documents if (i) any principal, interest or other amount
of money due under this Note is not paid in full within ten (10) days of the
date the Lender gives the Borrower notice that such payment is past due,
regardless of how such amount may have become due or (ii) there shall occur any
Event of Default under the Loan Agreement. Upon the occurrence of a Default,
Lender shall have the rights to declare the unpaid principal balance and accrued
but unpaid interest on this Note, and all other amounts due hereunder and under
the other Loan Documents, at once due and payable (and upon such declaration,
the same shall be at once due and payable), to foreclose any liens and security
interests securing payment hereof and to exercise any of its other rights,
powers and remedies under this Note, under any other Financing Document, or at
law or in equity.
(b) All of the rights, remedies, powers and privileges
(together, "Rights") of Lender provided for in this Note and in any other
Financing Document are cumulative of each other and of any and all other Rights
at law or in equity. The resort to any Right shall not prevent the concurrent or
subsequent employment of any other appropriate Right. No single or partial
exercise of any Right shall exhaust it, or preclude any other or further
exercise thereof, and every Right may be exercised at any time and from time to
time. No failure by Xxxxxx to exercise, nor delay in exercising any Right,
including but not limited to the right to accelerate the maturity of this Note,
shall be construed as a waiver of any Default or as a waiver of any Right.
Without limiting the generality of the foregoing provisions, the acceptance by
Lender from time to time of any payment under this Note which is past due or
which is less than the payment in full of all amounts due and payable at the
time of such payment, shall not (i) constitute a waiver of or impair or
extinguish the right of Lender to accelerate the maturity of this Note or to
exercise any other Right at the time or at any subsequent time, or nullify any
prior exercise of any such Right, or (ii) constitute a waiver of the requirement
of punctual payment and performance or a novation in any respect.
(c) If any holder of this Note retains an attorney in
connection with any Default or at maturity or to collect, enforce or defend this
Note or any other Financing Document in any lawsuit or in any probate,
reorganization, bankruptcy, arbitration or other proceeding, then Borrower
agrees to pay to each such holder, in addition to principal, interest and any
other sums
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owing to Lender hereunder and under the other Loan Documents, all costs and
expenses incurred by such holder in trying to collect this Note or in any such
suit or proceeding, including, without limitation, reasonable attorneys' fees
and expenses, investigation costs and all court costs, whether or not suit is
filed hereon, whether before or after the Maturity Date, or whether in
connection with bankruptcy, insolvency or appeal, or whether collection is made
against Borrower or any guarantor or endorser or any other person primarily or
secondarily liable hereunder.
8. WAIVER OF JURY TRIAL. BORROWER AND XXXXXX EACH WAIVES TRIAL BY
JURY IN ANY ACTION OR PROCEEDING TO WHICH BORROWER AND XXXXXX MAY BE PARTIES,
ARISING OUT OF, IN CONNECTION WITH OR IN ANY WAY PERTAINING TO, THIS NOTE, THE
LOAN AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS. IT IS AGREED AND UNDERSTOOD
THAT THIS WAIVER CONSTITUTES A WAIVER OF TRIAL BY JURY OF ALL CLAIMS AGAINST ALL
PARTIES TO SUCH ACTION OR PROCEEDINGS, INCLUDING CLAIMS AGAINST PARTIES WHO ARE
NOT PARTIES TO THIS NOTE. THIS WAIVER IS KNOWINGLY, WILLINGLY AND VOLUNTARILY
MADE BY XXXXXXXX, AND BORROWER HEREBY REPRESENTS THAT NO REPRESENTATIONS OF FACT
OR OPINION HAVE BEEN MADE BY ANY INDIVIDUAL TO INDUCE THIS WAIVER OF TRIAL BY
JURY OR TO IN ANY WAY MODIFY OR NULLIFY ITS EFFECT. XXXXXXXX FURTHER REPRESENTS
AND WARRANTS THAT IT HAS BEEN REPRESENTED IN THE SIGNING OF THIS NOTE AND IN THE
MAKING OF THIS WAIVER BY INDEPENDENT LEGAL COUNSEL, OR HAS HAD THE OPPORTUNITY
TO BE REPRESENTED BY INDEPENDENT LEGAL COUNSEL SELECTED OF ITS OWN FREE WILL,
AND THAT IT HAS HAD THE OPPORTUNITY TO DISCUSS THIS WAIVER WITH COUNSEL.
9. Confession of Judgment. Upon the occurrence of a Default,
Borrower hereby submits and waives all rights to object to nonexclusive personal
jurisdiction in the State of Maryland and authorizes any attorney designated by
Xxxxxx or any clerk of any court of record in Maryland or elsewhere to appear
for Borrower in any court of record and confess judgment against Borrower
without prior hearing in favor of Lender for, and in the amount of, the
outstanding principal balance, accrued and unpaid interest, outstanding fees and
late charges and all other costs of collection under this Note, all accrued and
unpaid interest thereon, all other amounts payable by Borrower to Lender under
the terms of this Note, and costs of suit and attorneys' fees of One Hundred
Thousand Dollars ($100,000). Notwithstanding any other provisions of this
Section, Xxxxxx acknowledges that attorneys' fees are stated to be One Hundred
Thousand Dollars ($100,000) solely for purposes of fixing a sum certain for
which judgment can be entered by confession; and Xxxxxx agrees that in enforcing
any judgment by confession, Xxxxxx shall not demand, solely with respect to
attorneys' fees incurred by Xxxxxx in connection with such indebtedness after
such judgment is rendered, any amounts in excess of the actual amount of
reasonable attorneys' fees charged or billed to Lender. Borrower hereby
releases, to the extent permitted by applicable law, all errors and all rights
of exemption, appeal, stay of execution, inquisition and other rights to which
Borrower may otherwise be entitled under the laws of the United States of
America or of any state or possession of the United States of America now in
force and which may hereafter be enacted. Borrower hereby consents to the
immediate execution
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of such judgment. The authority and power to appear for and enter judgment
against Borrower shall not be exhausted by one or more exercises thereof or by
any imperfect exercise thereof and shall not be extinguished by any judgment
entered pursuant thereto. Such authority may be exercised on one or more
occasions or from time to time in the same or different jurisdictions as often
as Lender shall deem necessary and desirable, for all of which this Note shall
be sufficient warrant.
10. Service of Process. Borrower hereby consents to process being
served in any suit, action, or proceeding instituted in connection with this
Note by the mailing of a copy thereof by certified mail, postage prepaid, return
receipt requested, to Borrower. Borrower irrevocably agrees that such service
shall be deemed to be service of process upon Borrower in any such suit, action,
or proceeding. Nothing in this Note shall affect the right of Lender to serve
process in any manner otherwise permitted by law and nothing in this Note will
limit the right of Lender otherwise to bring proceedings against Borrower in the
courts of any jurisdiction or jurisdictions.
11. Successors and Assigns. The terms of this Note and of the
other Loan Documents shall bind and inure to the benefit of the successors and
assigns of the parties. Lender may, at any time, sell, transfer, or assign this
Note and the other Loan Documents, and any or all servicing rights with respect
thereto, or grant participations therein or issue mortgage pass-through
certificates or other securities evidencing a beneficial interest in a rated or
unrated public offering or private placement. Xxxxxx agrees to give Xxxxxxxx
prompt written notice of any sale, transfer or assignment of this Note and/or
the other Loan Documents by the Lender.
12. General Provisions. Time is of the essence with respect to
Xxxxxxxx's obligations under this Note. Borrower and all sureties, endorsers,
guarantors and any other party now or hereafter liable for the payment of this
Note in whole or in part, hereby severally (a) waive demand, presentment for
payment, notice of dishonor and of nonpayment, protest, notice of protest,
notice of intent to accelerate, notice of acceleration and all other notices
(except any notices which are specifically required by this Note or any other
Financing Document), filing of suit and diligence in collecting this Note or
enforcing any of the security herefor; (b) agree to any substitution,
subordination, exchange or release of any such security or the release of any
party primarily or secondarily liable hereon; (c) agree that Lender shall not be
required first to institute suit or exhaust its remedies hereon against Borrower
or others liable or to become liable hereon or to perfect or enforce its rights
against them or any security herefor; (d) consent to any extensions or
postponements of time of payment of this Note for any period or periods of time
and to any partial payments, before or after maturity, and to any other
indulgences with respect hereto, without notice thereof to any of them; and (e)
submit (and waive all rights to object) to non-exclusive personal jurisdiction
of any state or federal court sitting in the State of Maryland, and venue in the
city or county in which payment is to be made as specified in Section 1 of this
Note, for the enforcement of any and all obligations under this Note and the
Loan Documents; (f) waive the benefit of all homestead and similar exemptions as
to this Note; (g) agree that their liability under this Note shall not be
affected or impaired by any determination that any security interest or lien
taken by Lender to secure this Note is invalid or unperfected; and (h) hereby
subordinate any and all rights against Borrower and any of the security for the
payment of this Note, whether by subrogation, agreement or otherwise, until this
Note is paid in full. A determination that any provision of this Note is
unenforceable or invalid shall not affect the enforceability or validity of any
other provision and
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the determination that the application of any provision of this Note to any
person or circumstance is illegal or unenforceable shall not affect the
enforceability or validity of such provision as it may apply to other persons or
circumstances. This Note may not be amended except in a writing specifically
intended for such purpose and executed by the party against whom enforcement of
the amendment is sought. Lender is hereby authorized to disseminate any
information it now has or hereafter obtains pertaining to the Term Loan,
including, without limitation, any security for this Note and credit or other
information on Borrower, any of its principals and any guarantor of this Note,
to any actual or prospective assignee or participant with respect to the Term
Loan, to any of Lender's affiliates, and to any other parties as necessary or
appropriate in Lender's reasonable judgment, as further provided in the Loan
Agreement. Captions and headings in this Note are for convenience only and shall
be disregarded in construing it. THIS NOTE, AND ITS VALIDITY, ENFORCEMENT AND
INTERPRETATION, SHALL BE GOVERNED BY MARYLAND LAW (WITHOUT REGARD TO ANY
CONFLICT OF LAWS PRINCIPLES) AND APPLICABLE UNITED STATES FEDERAL LAW.
13. Notices. Any notice, request, or demand to or upon Borrower or
Lender shall be deemed to have been properly given or made when delivered in
accordance with the Loan Agreement.
THE LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES
AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT
ORAL AGREEMENTS OF THE PARTIES.
IN WITNESS WHEREOF, Xxxxxxxx has duly executed this Note under seal as
of the date first above written.
WITNESS: GUILFORD PHARMACEUTICALS INC.
/s/ Xxxxx X. Xxxxx By: /s/ Xxxxxx X. Xxxxxx (Xxxx)
--------------------------- ----------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Executive Vice President, Finance
and Administration, Chief
Financial Officer and Treasurer
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SCHEDULE A TO TERM NOTE
The Note will be paid in the principal amounts plus accrued interest on the
dates as shown below:
REMAINING PRINCIPAL
OUTSTANDING
PRINCIPAL PAYMENT (FOLLOWING SCHEDULED PRINCIPAL
PAYMENT DUE DATE DUE PAYMENT)
---------------- ----------------- ------------------------------
May 07, 2003 0.00 18,800,000.00
Jun 02, 2003 78,333.33 18,721,666.67
Jul 01, 2003 78,333.33 18,643,333.34
Aug 01, 2003 78,333.33 18,565,000.01
Sep 02, 2003 78,333.33 18,486,666.68
Oct 01, 2003 78,333.33 18,408,333.35
Nov 03, 2003 78,333.33 18,330,000.02
Dec 01, 2003 78,333.33 18,251,666.69
Jan 02, 2004 78,333.33 18,173,333.36
Feb 02, 2004 78,333.33 18,095,000.03
Mar 01, 2004 78,333.33 18,016,666.70
Apr 01, 2004 78,333.33 17,938,333.37
May 03, 2004 78,333.33 17,860,000.04
Jun 01, 2004 78,333.33 17,781,666.71
Jul 01, 2004 78,333.33 17,703,333.38
Aug 02, 2004 78,333.33 17,625,000.05
Sep 01, 2004 78,333.33 17,546,666.72
Oct 01, 2004 78,333.33 17,468,333.39
Nov 01, 2004 78,333.33 17,390,000.06
Dec 01, 2004 78,333.33 17,311,666.73
Jan 03, 2005 78,333.33 17,233,333.40
Feb 01, 2005 78,333.33 17,155,000.07
Mar 01, 2005 78,333.33 17,076,666.74
Apr 01, 2005 78,333.33 16,998,333.41
May 02, 2005 78,333.33 16,920,000.08
Jun 01, 2005 78,333.33 16,841,666.75
Jul 01, 2005 78,333.33 16,763,333.42
Aug 01, 2005 78,333.33 16,685,000.09
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REMAINING PRINCIPAL
OUTSTANDING
PRINCIPAL PAYMENT (FOLLOWING SCHEDULED PRINCIPAL
PAYMENT DUE DATE DUE PAYMENT)
---------------- ----------------- ------------------------------
Sep 01, 2005 78,333.33 16,606,666.76
Oct 03, 2005 78,333.33 16,528,333.43
Nov 01, 2005 78,333.33 16,450,000.10
Dec 01, 2005 78,333.33 16,371,666.77
Jan 03, 2006 78,333.33 16,293,333.44
Feb 01, 2006 78,333.33 16,215,000.11
Mar 01, 2006 78,333.33 16,136,666.78
Apr 03, 2006 78,333.33 16,058,333.45
May 01, 2006 78,333.33 15,980,000.12
Jun 01, 2006 78,333.33 15,901,666.79
Jul 03, 2006 78,333.33 15,823,333.46
Aug 01, 2006 78,333.33 15,745,000.13
Sep 01, 2006 78,333.33 15,666,666.80
Oct 02, 2006 78,333.33 15,588,333.47
Nov 01, 2006 78,333.33 15,510,000.14
Dec 01, 2006 78,333.33 15,431,666.81
Jan 02, 2007 78,333.33 15,353,333.48
Feb 01, 2007 78,333.33 15,275,000.15
Mar 01, 2007 78,333.33 15,196,666.82
Apr 02, 2007 78,333.33 15,118,333.49
May 01, 2007 78,333.33 15,040,000.16
Jun 01, 2007 78,333.33 14,961,666.83
Jul 02, 2007 78,333.33 14,883,333.50
Aug 01, 2007 78,333.33 14,805,000.17
Sep 04, 2007 78,333.33 14,726,666.84
Oct 01, 2007 78,333.33 14,648,333.51
Nov 01, 2007 78,333.33 14,570,000.18
Dec 03, 2007 78,333.33 14,491,666.85
Jan 02, 2008 78,333.33 14,413,333.52
Feb 01, 2008 78,333.33 14,335,000.19
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REMAINING PRINCIPAL
OUTSTANDING
PRINCIPAL PAYMENT (FOLLOWING SCHEDULED PRINCIPAL
PAYMENT DUE DATE DUE PAYMENT)
---------------- ----------------- ------------------------------
Mar 03, 2008 78,333.33 14,256,666.86
Apr 01, 2008 78,333.33 14,178,333.53
May 01, 2008 14,178,333.53 0.00
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