SECURITY AGREEMENT
THIS SECURITY AGREEMENT (this "Agreement") is made as of this 27 day of
September, 1996, between CV THERAPEUTICS, INC., a Delaware corporation,
having a mailing address at 0000 Xxxxxx Xxxxx, Xxxx Xxxx, XX 00000
("Debtor"), AND XXXXXXXXX & XXXXX TRANSITION CAPITAL, LLC, a Delaware limited
liability company having a mailing address at Xxx Xxxx Xxxxxx, Xxx Xxxxxxxxx,
XX 00000, ("Secured Party").
WHEREAS,
A.Debtor and Secured Party have entered into a Business Loan Agreement,
dated as of the date hereof (as the same may hereafter be amended,
restated, or otherwise modified from time to time, the "Loan Agreement"),
pursuant to which Secured Party has agreed to provide financing for
Debtor's ongoing business operations by providing Debtor with a loan (the
"FINANCING ACCOMMODATION") . Debtor will derive substantial direct and
indirect benefit from the transactions contemplated by the LOAN AGREEMENT.
X.Xx is a condition precedent to Secured Party's obligation to take any
action pursuant to the terms of the LOAN AGREEMENT that this AGREEMENT be
executed and delivered by Debtor.
NOW THEREFORE, in consideration of the premises set forth herein and in order
to induce Secured Party to enter into the LOAN AGREEMENT and to provide the
FINANCING ACCOMMODATION to Debtor as provided therein, Debtor hereby agrees
with Secured Party for the benefit of Secured Party as follows:
SECTION 1. DEFINED TERMS.
(a) TERMS DEFINED IN THE LOAN AGREEMENT. All terms not otherwise
defined herein that are capitalized and used herein shall have the
meanings assigned to such terms in the LOAN AGREEMENT.
(b) OTHER DEFINED TERMS. As used in this AGREEMENT, the following
terms shall have the meanings indicated:
"COLLATERAL" means any and all right, title and interest of Debtor in and
to the following:
(i) all equipment, whether now owned or hereafter acquired or arising,
including, without limitation, all scientific instrumentation,
laboratory and test equipment, computers and computer peripherals
(including, without limitation, desk-top and network equipment, and
printers), vehicles (including motor vehicles and trailers), and
furniture and furnishings (including, without limitation, cubicles
and movable partitions) and all other goods of every kind;
(ii) all inventory comprised of finished goods held for sale, bulk
manufactured material prior to its processing into finished goods,
materials used or consumed in Debtor's business (and commonly
referred to as supplies), whether or not the same is in Debtor's
custody or possession or in transit, and including any and all such
inventory returned to or reclaimed by Debtor upon any accounts or
other proceeds, including insurance proceeds, resulting from the sale
or disposition of any of the foregoing and any documents of title
representing any of the above, and any books and records relating to
any of the foregoing.
(iii) all contract rights and general intangibles now or hereinafter
acquired, including, without limitation, any and all franchise
agreements, grants, purchase orders, warranties, customer lists,
computer software and programs, all governmental approvals, permits
and licenses, any and all rights to insurance proceeds or
condemnation awards or compensation; and any and all books and
records relating to any of the foregoing;
(iv) any and all copyrights, patents and trademarks (and related
goodwill), whether registered or unregistered, foreign or domestic,
and all applications and recordings in the United States Copyright
Office, the United States Patent and Trademark Office or
Security Agreement, Page 1
any similar office or agency of the United States, any state
thereof or any other country, and all continuations, renewals or
extensions of the same, and all trade secrets, inventions (whether
or not patentable), scientific processes, technologies,
procedures, models and designs (in whatever form maintained or
recorded, including, without limitation, computer software and
programs) (any of the foregoing property, and any and all books
and records relating to the foregoing, being hereinafter referred
to as "INTELLECTUAL PROPERTY"), and any and all contracts,
including rights to payment thereunder which are included as
COLLATERAL under clause (v) below, including, without limitation,
license agreements, joint venture agreements and other
collaborative agreements, in each case providing for the use or
license of any INTELLECTUAL PROPERTY (the Collateral referred to
in this clause (iv) is hereinafter called the "IP Collateral");
(v) all accounts (including accounts receivable and deposit accounts),
reserves, refunds, deposits, and all royalties, distributions, fees,
payments and other monetary obligations owing to Debtor and arising
out of the sale, transfer or licensing of goods and/or services,
including, without limitation, INTELLECTUAL PROPERTY, whether or not
earned by performance, and whether now existing or hereinafter
arising, and any and all claims for damages by way of any past,
present or future infringement of any INTELLECTUAL PROPERTY, and any
and all books and records relating to any of the foregoing;
(vi) all documents of title, cash, deposit accounts, securities, letters
of credit, certificates of deposit, instruments and chattel paper now
owned or hereafter acquired by Debtor or in which Debtor has an
interest and Debtor's books and records relating to the foregoing;
(vii) any and all claims, rights and interests in any of the above and
all substitutions and replacements for, all additions and accessions
to, any of the above, and all proceeds thereof.
At any time and from time to time, upon the request of Debtor, Secured Party
shall, promptly and duly execute and deliver any and all such further
instruments and documents and take such further actions, including without
limitation, the filing of an amendment or partial release of COLLATERAL, as
Debtor may reasonably deem necessary to evidence and confirm the scope of the
security interest granted by Debtor to Secured Party under this AGREEMENT.
"CONTRACTS AND AGREEMENTS" means any and all manufacturer's warranties or
guaranties, service manuals, service and maintenance logs, user manuals and
similar materials, books and AGREEMENTs with respect to the acquisition, use,
operation, or maintenance of any piece or unit of COLLATERAL.
"DEBTOR LOCATIONS" means 0000 Xxxxxx Xxxxx, Xxxx Xxxx, Xxxxxxxxxx 00000.
"EQUIPMENT" means the types of COLLATERAL described in clause (i) of the
defined term COLLATERAL.
"FINANCING STATEMENTS" shall have the meaning given to the term in Section
4(b) of this AGREEMENT.
"PERSON" means any natural person, corporation, partnership, joint venture,
firm, association, trust, unincorporated organization, government or
governmental agency or political subdivision or any other entity, whether
acting in an individual, fiduciary or other capacity.
"RELATED DOCUMENTS" means and includes without limitation the LOAN
AGREEMENT, the PROMISSORY NOTE, all other promissory notes, credit
agreements, loan agreements, guaranties, security agreements, mortgages,
deeds of trust, and all other instruments and documents, whether now or
hereafter existing, executed in connection with the LOAN AGREEMENT.
"SECURED OBLIGATIONS" shall have the meaning given the term in Section 2 of
this AGREEMENT.
"SENIOR LENDER" shall mean Xxxxxxxxx & Xxxxx Guaranty Finance, LLC
(c) TERMS DEFINED IN UNIFORM COMMERCIAL CODE. All other terms used in
this AGREEMENT that are not specifically defined herein or the definitions
of which are not incorporated herein by reference shall have the meaning
assigned to such terms in the Uniform Commercial Code in
Security Agreement, Page 2
effect in the State of California as of the date first above written to
the extent such other terms are defined therein.
(d) SINGULAR/PLURAL. Unless the context of this AGREEMENT otherwise
clearly requires, references to the plural include the singular, the
plural, and "or" has the inclusive meaning represented by the phrase
"and/or". The words "hereof", "herein", "hereunder", and similar terms in
this AGREEMENT refer to this AGREEMENT as a whole and not to any
particular provision of this AGREEMENT. References to Sections are
references to Sections in this SECURITY AGREEMENT unless otherwise
provided.
SECTION 2. GRANT OF SECURITY INTEREST.
Debtor hereby assigns and pledges to Secured Party, and hereby grants to
Secured Party a security interest in and to the COLLATERAL to secure the
payment and performance of all obligations of Debtor to Secured Party, however
and when arising, including under the LOAN AGREEMENT and the RELATED DOCUMENTS
(the "Secured Obligations"). The Debtor agrees that the security interest
herein granted has attached and shall continue until all SECURED OBLIGATIONS
have been satisfied.
Notwithstanding the foregoing, Secured Party agrees to release its
security interest in the IP Collateral when the following condition has been
satisfied: Debtor shall have pledged to Senior Lender as security to ensure
payment and performance of (a) all Secured Obligations (as defined in this
AGREEMENT) and (b) all Secured Obligations (as defined in the Security
Agreement dated as of the date hereof between Debtor and Senior Lender (the
"H&QGF Security Agreement") a cash security deposit equal to the fifty percent
(50%) of the sum of (i) the sum of the unpaid principal balance and unpaid
accrued interest due to Lender under this Security Agreement whether or not due
at the time each security deposit is created and (ii) unless Debtor has repaid
all obligations under the Business Loan Agreement dated as of the date hereof
between Debtor and Senior Lender (the H&QGF BLA") and has not exercised, or no
longer has available, the Lease Option as defined in the Financing Agreement
dated as of the date hereof between Debtor and Senior Lender (the H&QGF
Financing Agreement"), the sum of all rent payments payable or that would be
payable under the Master Lease Agreement and Related Document as defined in the
H&QGF Financing Agreements in the event that the Lease Option were exercised
whether or not due at the time each security deposit is created (the sum
referred to in this clause (ii) is hereinafter called the "GF Potential
Obligation Amount").
The amount of such deposit shall not be adjusted until the sum of (a) the
GF Potential Obligation Amount and (b) all Secured Obligations (as defined in
this AGREEMENT) is less than or equal to the amount of the cash security
deposit, at which time the deposit will be applied to the Secured Obligations
as they become due. Secured Party, Senior Lender and Debtor shall enter into a
security deposit agreement and execute and deliver such other documents, in
form and substance reasonably satisfactory to each such party, to effect the
release of the IP Collateral and the cash security deposit as provided in
clause (a) above.
SECTION 3. DEBTOR REMAINS LIABLE.
Anything herein to the contrary notwithstanding, (a) Debtor shall remain liable
under the Contracts and Agreements included in the COLLATERAL to the extent set
forth therein to perform all of its duties and obligations thereunder to the
same extent as if this AGREEMENT had not been executed, (b) the exercise by
Secured Party of any of the rights hereunder shall not release Debtor from any
of its duties or obligations under the Contracts and Agreements included in the
COLLATERAL, and Secured Party shall have no obligation or liability under the
Contracts and AGREEMENTS included in the COLLATERAL by reason of this
AGREEMENT, nor shall Secured Party be obligated to perform any of the
obligations or duties of Debtor thereunder.
SECTION 4. REPRESENTATIONS AND WARRANTIES.
Debtor represents and warrants as follows:
(a) All of the COLLATERAL of Debtor is located at the Debtor's Locations,
or as described on Exhibit A hereto.
(b) Debtor is the legal and beneficial owner of the COLLATERAL free and
clear of any lien except for (i) the security interests created by this
AGREEMENT and (ii) Security interest created by the H&QGF Security
Agreement and (iii) any lien in favor of equipment lessors which lien is
extinguished simultaneously with the execution of this document, and (iv)
liens permitted
Security Agreement, Page 3
under Section 5.1 of the Business Loan Agreement. No effective
financing statement or other similar document used to perfect and
preserve a security interest under the laws of any jurisdiction (a
"FINANCING STATEMENT") covering all or any part of the COLLATERAL is on
file in any recording office, except such as may have been filed in
favor of Secured Party relating to this AGREEMENT or in favor of (i)
Senior Lender relating to the Master Lease Agreement and (ii) any
existing equipment lessors for whom that security interest is
extinguished simultaneously with the execution of this document, or as
otherwise described on Exhibit A hereto.
(c) Debtor has exclusive possession and control of the COLLATERAL, except
for the Collateral that is in transit or is being repaired, maintained, or
modified by other Persons, or Collateral that has been loaned to others in
the ordinary course of business and Debtor has notified Secured Party in
writing, including a description of the Collateral and the address where
such Collateral is to be temporarily located, or as otherwise described on
Exhibit A hereto.
(d) This AGREEMENT creates a valid security interest in the COLLATERAL in
accordance with the terms of the LOAN AGREEMENT securing the payment and
performance of the Secured Obligations.
(e) A true and correct list of all of the Collateral consisting of U.S.
patents and/or registrations owned by the Debtor, in whole or in part, is
set forth in SCHEDULE I.
(f) A true and correct list of all of the Collateral consisting of U.S.
patent applications and/or registrations owned by the Debtor, in whole or
in part, is set forth in SCHEDULE II.
(g) A true and correct list of all of the Collateral consisting of foreign
patent and patent applications and/or registrations owned by the Debtor,
in whole or in part, is set forth in SCHEDULE III.
(h) A true and correct list of all of the Collateral consisting of U.S.,
State and Federal trademarks, trademark registrations owned by the Debtor,
in whole or in part, is set forth in SCHEDULE IV.
(i) A true and correct list of all of the Collateral consisting of U.S.,
State pending trademarks owned by the Debtor, in whole or in part, is set
forth in SCHEDULE V.
(j) A true and correct list of all of the Collateral consisting of
unregistered trademarks owned by the Debtor, in whole or in part, is set
forth in SCHEDULE VI.
SECTION 5. FURTHER ASSURANCES.
(a) Debtor agrees that from time to time, at the expense of Debtor,
Debtor will promptly execute and deliver all further instruments and
documents, and take all further action, that may be necessary or that
Secured Party may reasonably request, in order to perfect and protect the
security interests granted hereby or to enable Secured Party to exercise
and enforce its rights and remedies hereunder with respect to any
COLLATERAL and/or the Contracts and AGREEMENTs. Without limiting the
generality of the foregoing, Debtor will upon Secured Party's request
execute and file such Financing Statements or continuation statements in
respect thereof, or amendments thereto, and such other instruments or
notices, as may be necessary or desirable, or as Secured Party may
request, in order to perfect, preserve, and enhance the security interests
granted or purported to be granted hereby.
(b) Debtor hereby authorizes Secured Party to file one or more FINANCING
STATEMENTS or continuation statements in respect thereof, and amendments
thereto, relating to all or any part of the COLLATERAL without the
signature of Debtor where permitted by law, and names Secured Party as its
attorney in fact and authorized it to execute any and all Financing
Statements on Debtor's behalf where necessary or advisable to perfect,
continue or give notice of the security interest granted to Security Party
hereunder in any of the Collateral. A photocopy or other reproduction of
this AGREEMENT or any FINANCING STATEMENT covering the COLLATERAL or any
part thereof shall be sufficient as a Financing Statement where permitted
by law.
(c) Debtor will furnish to Secured Party from time to time statements and
schedules further identifying and describing the COLLATERAL and such other
reports in connection with the COLLATERAL as Secured Party may reasonably
request, all in reasonable detail and in form and substance reasonably
satisfactory to Secured Party.
(d) Debtor agrees to give Secured Party at least thirty (30) days prior
written notice before changing its name from that set forth on the
signature page hereof, before moving its chief executive office or
principal place of business from the address set forth on the signature
page hereof, or before using any trade names or styles in its business in
California other than the use of those trade names and styles listed in
EXHIBIT A hereto.
Security Agreement, Page 4
SECTION 6. COVENANTS REGARDING USE OF COLLATERAL.
(a) Debtor shall keep the COLLATERAL located and installed at the
DEBTOR'S LOCATIONS, except for the Collateral that has been loaned to
others in the ordinary course of business and about such arrangement
Debtor has notified Secured Party in writing including a description of
the Collateral and the address where such Collateral is to be temporarily
located.
(b) Except as otherwise provided in the LOAN AGREEMENT, Debtor shall
cause the EQUIPMENT to be maintained and preserved in the same condition,
repair and working order as when new, ordinary wear and tear excepted, and
in accordance with any manufacturer's manual, and shall forthwith, or in
the case of any loss or damage to any of such EQUIPMENT as quickly as
practicable after the occurrence thereof, make or cause to be made all
repairs, replacements, and other improvements in connection therewith
which are necessary or desirable to such end. Debtor shall promptly
furnish to Secured Party a statement respecting any material loss or
damage to any of the EQUIPMENT.
SECTION 7. INSURANCE
Debtor shall, at its own cost and expense, maintain insurance with respect to
the COLLATERAL against loss or damage by fire, theft, explosion and all other
hazards and risks ordinarily insured against by other owners or users of such
properties in similar business for the full insurable value of the COLLATERAL,
INCLUDING EARTHQUAKE INSURANCE IF REQUESTED BY SECURED PARTY after October 1,
1997. All such policies of insurance shall be in form and substance
reasonable satisfactory to, and shall be with insurers reasonably acceptable
to, Secured Party, and shall include a loss payable endorsement naming
Secured Party loss payee, all in form and substance reasonably satisfactory
to Secured Party. Debtor shall, if so requested by Secured Party, deliver to
Secured Party original or duplicate policies of such insurance and, as often
as Secured Party may reasonably request, a report of a reputable insurance
broker with respect to such insurance.
SECTION 8. TRANSFERS AND OTHER LIENS.
Debtor shall not:
(a) sell, assign (by operation of law or otherwise), convey, or otherwise
dispose of, or grant any option with respect to, any of the COLLATERAL
other than (i) to replace, in the ordinary course of business, any
EQUIPMENT that have broken or become unuseable or obsolete, or (ii) the
sale of inventory in the ordinary course of business, or (iii) transfers
of non-exclusive licenses (and exclusive licenses within certain
geographic regions) and other similar arrangements for the use of Debtor's
property, or (iv) licenses and sub-licenses granted as part of joint
ventures, strategic alliances and other similar arrangements customary in
Borrower's industry for businesses similar to Borrower; or
(b) create or permit to exist any lien upon or with respect to any of the
COLLATERAL, except for (i) the security interests created by this
AGREEMENT and (ii) any lien in favor Senior Lender and (iii) any lien
permitted under Section 5.1 of the Loan Agreement.
SECTION 9. SECURED PARTY APPOINTED ATTORNEY-IN-FACT.
Debtor hereby irrevocably appoints Secured Party as Debtor's attorney-in-fact,
with full authority in the place and stead of Debtor and in the name of Debtor
or otherwise, from time to time in Secured Party's good-faith discretion, at
any time that Debtor is in default under this AGREEMENT or under any of the
Related Documents, to take any action and to execute any instrument that
Secured Party may reasonably deem necessary or advisable to accomplish the
purposes of this AGREEMENT, in a manner consistent with the terms hereof,
including, without limitation:
(a) to obtain and adjust insurance required to be paid to Secured Party
pursuant to Section 7 hereof;
(b) to ask, demand, collect, xxx for, recover, compromise, receive, and
give acquittance and receipts for moneys due and to become due under or in
connection with the COLLATERAL; and
(c) to file any claims or take any action or institute any proceedings
that Secured Party may deem necessary or desirable for the collection or
perfection of any of the COLLATERAL or otherwise to enforce the rights of
Secured Party with respect to any of the COLLATERAL;
(d) to execute any and all applications, documents, papers and
instruments for Secured Party to use any of the Collateral, to grant or
issue any exclusive or nonexclusive license with respect
Security Agreement, Page 5
to any of the Collateral, and to assign, convey or otherwise transfer
title to or dispose of any of the Collateral.
The foregoing power of attorney is coupled with an interest and is irrevocable
so long as this Agreement shall not have terminated pursuant to Section 20
hereof.
SECTION 10. SECURED PARTY MAY PERFORM.
If Debtor fails to perform any agreement contained herein, Secured Party may
itself perform, or cause the performance of, such agreement, and the reasonable
expenses of Secured Party incurred in connection therewith shall be payable by
Debtor under Section 13 hereof. Upon the occurrence of an Event of Default and
during the continuance thereof, Secured Party and any representatives of
Secured Party shall have, in addition to all its other rights under this
AGREEMENT, the right to obtain access to Debtor's data processing equipment,
computer hardware and software relating to the COLLATERAL and to use all of the
foregoing and the information contained therein in any manner Secured Party
deems necessary for the purpose of effectuating its rights under this
AGREEMENT, the LOAN AGREEMENT and any other of the RELATED DOCUMENTS. Debtor
agrees that Secured Party has no obligation to preserve rights to the
COLLATERAL against any other parties provided Secured Party complies with the
obligations of a Secured Party under Section 9207 of the CUCC.
SECTION 11. SECURED PARTY'S DUTIES.
The powers conferred on Secured Party hereunder are solely to protect its
interest in the COLLATERAL and shall not impose any duty upon Secured Party to
exercise any such powers. Except for the safe custody of any COLLATERAL in the
possession of Secured Party, and the accounting for moneys and for other
properties actually received by Secured Party hereunder, Secured Party shall
have no duty as to any COLLATERAL or as to the taking of any necessary steps to
preserve rights against prior parties or any other rights pertaining thereto
provided Secured Party complies with the obligations of a Secured Party under
Section 9207 of the CUCC.
SECTION 12. REMEDIES; APPLICATION OF PROCEEDS OF COLLATERAL.
If any EVENT OF DEFAULT as defined in the LOAN AGREEMENT shall have occurred
and be continuing Secured Party may exercise in respect of the COLLATERAL, in
addition to other rights and remedies provided for herein or otherwise
available, all the rights and remedies of a secured party on default under the
Uniform Commercial Code of the State of California (the "CODE") in effect at
that time (whether or not the Code then applies to the affected COLLATERAL),
and also may (i) require Debtor to, and Debtor hereby agrees that it will at
its expense and upon request of Secured Party forthwith, assemble all or part
of the COLLATERAL of Debtor as directed by Secured Party and make it available
to Secured Party at a place to be designated by Secured Party that is
reasonably convenient to both Secured Party and Debtor; (ii) without notice
except as specified below, sell the COLLATERAL of Debtor or any part thereof in
one or more parcels at public or private sale, at any of Secured Party's
offices or elsewhere, for cash, on credit, or for future delivery, and upon
such other terms as Secured Party may reasonably believe are commercially
reasonable; (iii) occupy any premises owned or leased by Debtor where the
COLLATERAL or part thereof is assembled for a reasonable period in order to
effectuate Secured Party's rights and remedies hereunder or under applicable
law, without obligation to Debtor in respect of such occupation; and (iv)
exercise any and all rights and remedies of Debtor under or in connection with
the COLLATERAL of Debtor. Debtor agrees that, to the extent notice of sale
shall be required by law, at least ten (10) days prior written notice to Debtor
(which Debtor agrees is reasonable notification within the meaning of Section
9504(3) of the Code) of the time and place of any public sale or the time after
which any private sale is to be made shall constitute reasonable notification.
Secured Party shall not be obligated to make any sale of COLLATERAL regardless
of notice of sale having been given. Secured Party may adjourn any public or
private sale from time to time by announcement at the time and place fixed
therefor, and such sale may, without further notice, be made at the time and
place to which it was so adjourned.
SECTION 13. EXPENSES.
Debtor will upon demand pay to Secured Party the amount of any and all
reasonable expenses, including the reasonable fees and expenses of its counsel
and of any experts and agents, that Secured
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Party may incur in respect of Debtor in connection with (i) the custody,
preservation, use, or operation of, or the sale of, collection from, or other
realization upon, any of the COLLATERAL, (ii) the exercise or enforcement of
any of the rights of Secured Party hereunder, or (iii) the failure by Debtor
to perform or observe any of the provisions hereof.
SECTION 14. SECURITY INTEREST ABSOLUTE.
The obligations of Debtor under this AGREEMENT are independent of the Secured
Obligations, and a separate action or actions may be brought and prosecuted
against Debtor to enforce this AGREEMENT. Debtor waives any right to require
Secured Party (a) to proceed against any third party other than Debtor, (b) to
proceed against or exhaust any security or collateral granted by any other
third party grantor of a security interest rather than Debtor, or to pursue any
other remedy in Secured Party's power whatsoever. All rights of Secured Party
and security interests granted hereunder, and all obligations of Debtor
hereunder, shall be absolute and unconditional, irrespective of:
(i) any lack of validity or enforceability of the LOAN AGREEMENT or any of
the other RELATED DOCUMENTS;
(ii) any change in the time, manner or place of payment of, or in any other
term of, all or any of the Secured Obligations, or any other amendment
or waiver of or any consent to any departure from the LOAN AGREEMENT
or any other of the RELATED DOCUMENTS, including, without limitation,
any increase in the Secured Obligations resulting from the extension
of additional credit to Debtor, or any of its AFFILIATES, or
otherwise;
(iii) any taking, exchange, release, or non-perfection of any other
collateral, or any taking, release, or amendment or waiver of or
consent to departure from any guaranty, for all or any of the Secured
Obligations;
(iv) any manner of application of COLLATERAL, or proceeds thereof, to all
or any of the SECURED OBLIGATIONS, or any manner of sale or other
disposition of any COLLATERAL for all or any of the SECURED
OBLIGATIONS or any other assets of Debtor or any of its AFFILIATES;
(v) any change, restructuring or termination of the corporate structure or
existence of Debtor or any of its AFFILIATES;
(vi) any equitable or legal defense of a surety or guarantor, other than
the defense of payment in full of the SECURED OBLIGATIONS; or
(vii) any other circumstance that might otherwise constitute a defense
available to, or a discharge of, Debtor or any third party grantor of
a security interest.
SECTION 15. INDEMNIFICATION.
Debtor hereby indemnifies and saves and holds Secured Party (or any persons,
employees, officers or agents designated by Secured Party) harmless from and
against any and all claims, damages, loss, liability or judgments which may be
incurred or sustained by Secured Party and such designees or asserted against
Secured Party and such designees, directly or indirectly, in connection with
the existence of or the exercise of any of the rights of Secured Party under
this SECURITY AGREEMENT or any of the of the RELATED DOCUMENTS except to the
extent the same arises by reason of the gross negligence or willful misconduct
of the PERSON seeking indemnification.
SECTION 16. LIMITATIONS ON RESPONSIBILITY OF SECURED PARTY.
Secured Party makes no representation as to the value or condition of the
COLLATERAL or any part thereof, as to the title of Debtor to the COLLATERAL,
and Secured Party shall incur no liability or responsibility in respect of any
such matters. Secured Party shall not be responsible for insuring the
COLLATERAL, for the payment of taxes, charges, assessments or liens upon the
COLLATERAL or otherwise as to the maintenance of the COLLATERAL, except as
provided in the immediately following sentence when Secured Party has
possession of the COLLATERAL. Secured Party shall have no duty to Debtor as to
any COLLATERAL in its possession or control or in the possession or control of
any agent or nominee of Secured Party or any collections thereon or proceeds
thereof or as to the preservation of rights against prior parties or any other
rights pertaining thereto, except the duty to accord such of the COLLATERAL as
may be in its possession substantially the same care as it accords its own
assets and the duty to account for moneys received by it and, notwithstanding
the foregoing, the duty not to engage in willful misconduct or gross negligence
with respect to COLLATERAL. Secured Party shall not be required to ascertain
or inquire as to the performance by Debtor of any of the covenants or
agreements contained herein or in any of the RELATED DOCUMENTS. Neither
Secured Party nor any officer, agent or representative thereof shall be
personally liable for any action taken or omitted to be
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taken by any such person in connection with this AGREEMENT or any of the
RELATED DOCUMENTS except for such person's own gross negligence or willful
misconduct. Secured Party may execute any of the powers granted under this
AGREEMENT or any RELATED DOCUMENTS and perform any duty hereunder or
thereunder either directly or by or through agents or attorneys-in-fact, and
shall not be responsible for the negligence or misconduct of any agents or
attorneys-in-fact selected by it without gross negligence or willful
misconduct.
SECTION 17. MARSHALING; REINSTATEMENT OF THIS AGREEMENT IF PAYMENTS SET ASIDE.
Secured Party shall be under no obligation to marshal any assets in favor of
Debtor or any other PERSON or against or in payment of any or all of the
SECURED OBLIGATIONS. This AGREEMENT shall continue to be effective or be
reinstated, as the case may be, if at any time any payment of any of the
SECURED OBLIGATIONS is rescinded or must otherwise be returned by Secured Party
or any other Person upon the insolvency, bankruptcy, or reorganization of
Debtor, or otherwise, all as though such payment had not been made.
SECTION 18. AMENDMENTS; ETC.
No amendment or waiver of any provision of this AGREEMENT, and no consent to
any departure by Debtor herefrom, shall in any event be effective unless the
same shall be in writing and signed by Secured Party.
SECTION 19. NOTICES.
All notices and other communications provided for hereunder shall be given
pursuant to Section 10.6 of the LOAN AGREEMENT.
SECTION 20. CONTINUING SECURITY INTEREST.
This AGREEMENT shall create a continuing security interest in the COLLATERAL
and shall other than as set forth in Section 2 hereof (i) remain in full force
and effect until payment in full of the SECURED OBLIGATIONS and for so long as
any of the covenants or agreements of Debtor under the RELATED DOCUMENTS remain
unfulfilled, (ii) be binding upon Debtor, its successors and assigns, and (iii)
inure to the benefit of, and be enforceable by, Secured Party, its successors
and assigns. Upon payment in full of the SECURED OBLIGATIONS and performance
by Debtor of all of its covenants and agreements contained in the RELATED
DOCUMENTS the security interest granted hereby shall terminate and all rights
to the COLLATERAL shall revert to Debtor, SUBJECT, HOWEVER to the provisions of
the second sentence of Section 17 hereof. Upon any such termination, Secured
Party will execute and deliver to Debtor such documents as Debtor shall
reasonably request to evidence such termination.
SECTION 21. SEVERABILITY.
If any term or provision of this AGREEMENT is or shall become illegal, invalid,
or unenforceable in any jurisdiction, all other terms and provisions of this
AGREEMENT shall remain legal, valid and enforceable in such jurisdiction and
such illegal, invalid, or unenforceable provision shall be legal, valid, and
enforceable in any other jurisdiction. Whenever possible, each provision of
this AGREEMENT and any other statement, instrument, or transaction contemplated
thereby or relating thereto shall be interpreted in such manner as to be
effective and valid under such applicable law, but if any provision of this
AGREEMENT or any other statement, instrument, or transaction contemplated
thereby or relating thereto shall be held to be prohibited or invalid under
such applicable law, such provision shall be ineffective only to the extent of
such prohibition or invalidity, without invalidating the remainder of such
provision or the remaining provisions of this AGREEMENT or any other statement,
instrument, or transaction contemplated thereby or relating thereto.
SECTION 22. CAPTION HEADINGS.
CAPTION HEADINGS IN THIS AGREEMENT ARE FOR CONVENIENCE PURPOSES ONLY AND ARE
NOT TO BE USED TO INTERPRET OR DEFINE THE PROVISIONS OF THIS AGREEMENT.
SECTION 23. GOVERNING LAW; TERMS.
THE VALIDITY, CONSTRUCTION AND ENFORCEABILITY OF THIS AGREEMENT SHALL BE
GOVERNED BY THE INTERNAL LAWS OF THE STATE OF CALIFORNIA WITHOUT GIVING EFFECT
TO CONFLICT OF LAWS PRINCIPLES THEREOF.
Security Agreement, Page 8
SECTION. 24. WAIVER OF JURY TRIAL.
DEBTOR AND SECURED PARTY EACH HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY
LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH
THIS AGREEMENT. DEBTOR AND SECURED PARTY HEREBY (A) CERTIFY THAT NO
REPRESENTATIVE, AGENT OR ATTORNEY OF THE OTHER PARTY HERETO HAS REPRESENTED,
EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF
LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT
AND THE OTHER PARTY HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY,
AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS CONTAINED IN THIS
SECTION 23.
SECTION 25. WAIVER OF NOTICE AND HEARING
Debtor hereby waives all rights to a judicial hearing of any kind prior to the
exercise by Secured Party of its rights to possession of the COLLATERAL without
judicial process or to replevy, attach, or levy upon the COLLATERAL without
prior notice or hearing. Debtor acknowledges that it has been advised by
counsel of its choice with respect to this provision and this AGREEMENT.
SECTION 26. CONSENT TO JURISDICTION.
DEBTOR HEREBY IRREVOCABLY SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF ANY
CALIFORNIA STATE OR FEDERAL COURT SITTING IN SAN FRANCISCO OVER ANY ACTION OR
PROCEEDING ARISING OUT OF OR RELATING IN ANY WAY TO THIS AGREEMENT AND/OR THE
SECURED OBLIGATIONS, AND HEREBY IRREVOCABLY AGREES THAT ALL CLAIMS IN RESPECT
OF ANY SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN ANY SUCH
CALIFORNIA STATE OR FEDERAL COURT. DEBTOR IRREVOCABLY WAIVES, TO THE FULLEST
EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH DEBTOR MAY NOW OR HEREAFTER HAVE
TO THE LAYING OF THE VENUE OF ANY SUCH ACTION OR PROCEEDING BROUGHT IN SUCH
COURT AND ANY CLAIM THAT SUCH ACTION OR PROCEEDING BROUGHT IN SUCH A COURT HAS
BEEN BROUGHT IN AN INCONVENIENT FORUM. DEBTOR UNDERSTANDS AND 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.
SECTION 27 COUNTERPARTS.
This AGREEMENT may be executed in any number of counterparts, each of which
when so executed and delivered shall be deemed an original, but all such
counterparts together shall constitute but one and the same instrument.
SECTION 28. CONFIDENTIALITY
The confidentiality provisions of Section 10.10 of the Business Loan Agreement
shall apply.
Security Agreement, Page 9
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first written above.:
CV THERAPEUTICS, INC.
By: /s/ Xxxxxxxx X. Xxxxxxxx
----------------------------------------
Name: Xxxxxxxx X. Xxxxxxxx
----------------------------
Title: Chief Financial Officer
----------------------------
XXXXXXXXX & XXXXX TRANSITION CAPITAL, LLC
By:
By: /s/ Xxxxxx X. Xxxxxxxx
------------------------------------------
Its Manager
Hereunto duly authorized
Security Agreement, Page 10
