UNION EXHIBIT 10.18
BANK OF
CALIFORNIA
SECURITY AGREEMENT (INVESTMENT SECURITIES)
THIS SECURITY AGREEMENT (INVESTMENT SECURITIES) ("Agreement") is entered into as
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of April 29, 1999, between Sequenom, Inc.,
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("Debtor") and UNION BANK OF CALIFORNIA, N.A. ("Bank"). In consideration of
any financial accommodations given, to be given or continued, Debtor and Bank
agree as follows:
1. Grant of Security Interest. As security for the payment and performance of
all of Debtor's obligations to Bank, irrespective of the manner in which or the
time at which such obligations arose or shall arise, and whether direct or
indirect, alone or with others, or absolute or contingent, but excluding
indebtedness which is now or hereafter defined as "consumer credit" in the
Federal Truth in Lending Act and the regulations thereunder ("Act") unless the
security interest granted to Bank under this Agreement is disclosed as required
by the Act (collectively, "Obligations"), Debtor hereby grants to Bank a
continuing security interest in and to all of the below described personal
property in which Debtor now has or hereafter acquires an interest, wherever
located:
account no. 5100016400 maintained with UNION BANK OF CALIFORNIA
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INVESTMENT SERVICES ("Securities Intermediary"), all security entitlements,
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investment property and other financial assets now or hereafter credited to said
securities account, and all of Debtor's rights in respect of said securities
account, security entitlements, investment property and other financial assets;
and deposit account no. 5100016400 maintained by Debtor with Bank;
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together with all products, proceeds and revenues of and from the personal
property described above, and all substitutions and additions including stock
rights, rights to subscribe, dividends of any kind, interest, new securities and
other property to which Debtor is or may hereafter become entitled to receive on
account of such personal property (collectively, "Collateral"). In the event an
Accommodation Encumbrance Rider is executed in connection herewith, the
obligations of Accommodator hereunder shall be limited as described in said
rider. In such event, the word "Debtor" as used herein shall mean
"Accommodator" in all cases where the context so requires.
2. Perfection of Security Interest. It is the intent of Debtor and Bank that
the security interest herein granted be perfected by "control" (as defined in
Section 8-106 of the Uniform Commercial Code or the equivalent section of
Division/Article 8 of the Commercial Code, as amended from time to time, of the
state whose law governs this Agreement). Debtor agrees that it will from time
to time as required by Bank execute and deliver all notices and other documents
Bank deems necessary or desirable for Bank to obtain and maintain a first
priority perfected security interest in, and control over, the Collateral, will
perform such other acts, and execute and deliver to Bank such additional
assignments, agreements and instruments, as Bank may require in connection with
the administration and enforcement of this Agreement and Bank's rights, powers
and remedies hereunder, and will join with Bank in taking any other action
required by Bank to obtain and maintain such security interest and protect the
rights and priorities of Bank with respect to the Collateral. In particular,
Debtor will at Bank's request (a) deliver to Bank each and every certificated
security and instrument which constitutes part of the Collateral, accompanied by
appropriate assignments and/or stock or bond powers duly endorsed in blank, and
(b) originate such entitlement orders, and join with Bank in executing such
other instructions to or agreements with securities intermediaries, as may be
necessary or desirable for Bank to obtain control of each securities account,
each security entitlement and each other financial asset which constitutes part
of the Collateral. Debtor agrees that if any Collateral is now or hereafter
held by Bank in its capacity as a securities intermediary or pursuant to a
safekeeping or similar agreement, Bank shall be deemed to possess such
Collateral as a secured party for purposes of perfecting its security interest,
and if there is any conflict between the terms of the agreement under which Bank
is holding such Collateral and this Agreement, the terms of this Agreement shall
prevail.
3. Maintenance of Collateral Coverage. Debtor shall maintain the Collateral,
or shall cause the Collateral to be maintained, in an amount such that the
Obligations secured hereby shall not at any time exceed the sum of (a) EIGHTY-
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THREE AND 300/1000 percent (83.30 %) of the Current Value (as hereinafter
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defined) of Collateral consisting of (i) United States government securities,
(ii) state or municipal government or agency securities rated BBB- or better by
Standard & Poor's, or Baa3 or better by Moody's, (iii) corporate debt or equity
securities (exclusive, however, of corporate debt or equity securities issued by
Bank or Bank's corporate parent, UnionBanCal Corporation) which are regularly
traded on the New York Stock Exchange, the American Stock Exchange or NASDAQ
and, in the case of corporate debt, are rated BBB- or better by Standard &
Poor's, or Baa3 or better by Moody's, and (iv) money market securities
acceptable to Bank in its sole discretion, and (b) one hundred percent (1 00%)
of the amount of cash denominated in United States Dollars which is held by Bank
as Collateral pursuant to this Agreement. The "Current Value" of any given item
of Collateral is the fair market value of such item of Collateral as marked to
market monthly or at such other intervals as Bank deems desirable. If at any
time Bank's Collateral valuation indicates a deficiency with respect to the
required Collateral coverage, Bank shall give telephonic or other notice of such
deficiency to Debtor, and Debtor shall, within five (5) business days following
Debtor's receipt of such notice, either (x) deliver to Bank additional
Collateral, or (y) repay the outstanding principal balance of the Obligations,
in either case in an amount sufficient to restore compliance with the required
Collateral coverage.
4. Certain Transactions Involving Collateral. So long as there is no
deficiency with respect to required Collateral and no Event of Default (as
hereinafter defined) has occurred and is then continuing, Debtor may (a)
withdraw such portions of the Collateral as consist solely of cash dividends
paid in the ordinary course of business and/or interest income, and (b) sell,
trade, transfer or exchange (but not, except as provided in clause (a), above,
withdraw) assets out of, into or within any securities account which constitutes
all or any portion of the Collateral so long as any such sale, trade, transfer
or exchange is for fair market value and is either (i) in compliance with the
terms of the investment plan most recently agreed upon between Debtor and
Debtor's investment manager and acknowledged by Bank, or (ii) results in the
acquisition of a like-kind asset of equal or higher quality than the asset sold,
traded, transferred or exchanged. If there is a deficiency with respect to
required Collateral, or if an Event of Default has occurred and is then
continuing, Debtor agrees, on behalf of itself and its agents (if any), that
Bank may immediately take any and all actions which Bank deems necessary or
desirable to preclude Debtor or any agent of Debtor from making any withdrawals,
or effecting any sales, trades, transfers or exchanges, of Collateral.
5. Debtor's Representations, Warranties and Covenants. Debtor represents,
warrants and covenants that (a) Debtor has good and marketable title to the
Collateral, free and clear of all liens, encumbrances, claims and restrictions
of any kind or nature other than the security interest of Bank and any
restrictive legend appearing on any security certificate or instrument which
constitutes part of the Collateral, (b) Debtor has all requisite right, power
and authority to grant to Bank the security interest in the Collateral which is
herein granted, (c) Debtor will at all times keep the Collateral free and clear
of all liens, encumbrances and claims of any kind or nature other than the
security interest of Bank, (d) Debtor will not sell, transfer or otherwise
dispose of any of the Collateral or any interest therein to any individual or
entity, except as permitted by this Agreement or with the prior written consent
of Bank, (e) except for any restrictive legend appearing on any security
certificate or instrument which constitutes part of the Collateral, and except
as Debtor may have otherwise advised Bank in writing prior to the date of this
Agreement, no portion of the Collateral-(i) is subject to any condition which
relates to or would impair or restrict its transferability, or (ii) consists of
"restricted securities" or securities issued by an "affiliate" of Debtor, as
each of such terms is defined in Rule 144 of the Securities and Exchange
Commission, (f) Debtor will pay, prior to delinquency, all taxes, levies,
assessments or other claims which are or may become liens against the
Collateral, (g) Debtor will deliver to Bank promptly or ensure that Bank
promptly receives (i) all Collateral, (ii) except as otherwise provided herein,
all proceeds of, and all securities and other assets distributed in respect of,
any of the Collateral, (iii) such specific acknowledgments, Regulation U
Statement of Purpose forms or other agreements or writings as Bank may require
relating to the Collateral, and (iv) copies of records and other reports
relating to the Collateral in such form and detail and at such times as Bank may
from time to time require, and (h) Debtor will not exercise or refrain from
exercising any voting or consensual rights or powers relating to any Collateral
if, in the judgment of Bank, such action would have a material adverse effect on
the value of the Collateral.
6. Rights of Bank as Secured Party; Power Of Attorney. Debtor agrees that Bank
may, at any time whether before or after the occurrence of an Event of Default,
without notice or demand, and either in Bank's name or in the name of Debtor (a)
notify the issuer of any Collateral, or any securities intermediary, to make
payment to Bank of any amounts now or hereafter due or distributable on or in
respect of any Collateral, (b) enforce collection of any Collateral, whether by
legal proceedings or otherwise, and endorse, receive and receipt for all
proceeds, dividends, interest, principal and other sums so collected, (c) make
any compromise or settlement Bank deems desirable or proper with respect to any
Collateral, (d) participate in any recapitalization, reclassification,
reorganization, consolidation, redemption, stock split, merger or liquidation of
any issuer of any Collateral and, in connection therewith, deposit or surrender
control of any Collateral, accept money or other property in exchange for any
Collateral, and take such other actions as Bank deems proper in connection
therewith, (e) apply to the
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Obligations, in such order of application as Bank shall determine, any money or
other property received on or in respect of, or in exchange for, any Collateral,
or hold the same in a non-interest bearing account as additional or substitute
Collateral pursuant to the provisions of this Agreement, (f) cause all or any
portion of the Collateral to be transferred into Bank's name or into the name of
Bank's nominee, and (g) exercise as to the Collateral all rights, powers and
remedies of an owner. Debtor irrevocably appoints Bank, or any officer of Bank,
as Debtor's true and lawful attorney-in-fact coupled with an interest, with full
power of substitution, to sign or endorse any instrument, document or other
writing necessary or desirable to transfer title or other rights to or in any of
the Collateral, and to do all acts necessary or incidental to assert, protect
and enforce Bank's rights in the Collateral and under this Agreement.
7. Events of Default. The term "Event of Default" shall mean the occurrence of
any of the following events: (a) Debtor shall fail to pay when due any
principal, interest or other payment required under the terms of any note or
other agreement (including this Agreement) evidencing or relating to the
Obligations (collectively, 'Loan Documents'), (b) there shall occur any
"default". or "event of default" under and as defined in any of the Loan
Documents, (c) Debtor shall fail to perform any covenant or agreement contained
in this Agreement, or any representation, warranty, certificate or other
statement (financial or otherwise) made or furnished by or on behalf of Debtor
shall be false, incorrect, incomplete or misleading in any material respect when
made or furnished, (d) the Collateral shall decline in value, or otherwise
deteriorate, by an amount or to an extent which Bank in good xxxxx xxxxx
material, or Bank shall in good xxxxx xxxx its rights with respect to the
Collateral to be impaired, or (e) Bank shall in good faith believe that the
prospect for due and punctual payment of all or any of the Obligations is
impaired.
8. Remedies upon Default. Upon the occurrence of an Event of Default, Bank
may, at its option and without notice or demand (a) declare the Obligations to
be immediately due and payable, and the same shall thereupon be and become
immediately due and payable, (b) cease advancing money or extending financial
accommodations to or for the benefit of Debtor under any of the Loan Documents,
(c) exercise all voting and other rights as a holder of the Collateral, (d)
exercise any or all rights available upon n default to a secured party under the
Commercial Code, as amended from time to time, of the state whose law governs
this Agreement, including without limitation the right to (i) take possession of
any Collateral and sell or dispose of all or any part thereof in such
commercially reasonable manner as Bank may elect, whether at public or private
sale, or both, by way of one or more contracts or transactions and for cash or
on terms, or (ii) order the Securities Intermediary to sell any Collateral on
any established market or over the counter or to cause any Collateral to be
redeemed, and (e) exercise or enforce any or all other rights or remedies
available to Bank under this Agreement, any of the other Loan Documents, at law,
in equity or otherwise. Debtor agrees that if notice to Debtor of any intended
disposition of the Collateral or any other intended action is required by law in
a particular instance, notice given at least five (5) calendar days prior to the
date of the intended disposition or other action shall be deemed commercially
reasonable.
9. Bank's Duties. The sole duty of care of Bank and its agents with respect to
Collateral in their respective possession shall be to exercise reasonable care
in the custody and preservation of such Collateral, and Bank and its agents
shall be deemed to have exercised reasonable care in the custody and
preservation of such Collateral if such Collateral is accorded treatment
substantially equivalent to that which each accords its own property. Debtor
agrees that neither Bank nor its agents shall have any responsibility for
ascertaining or initiating any action with respect to, or for informing Debtor
of, calls, conversions, exchanges, maturities, declining value, tenders or other
matters relating to any Collateral, regardless of whether they have or are
deemed to have knowledge of such matters, for taking any steps to preserve any
rights against any person or entity with respect to any Collateral or for
otherwise protecting any Collateral against any claims of others. Neither Bank
nor its agents shall be responsible for any injury or loss to the Collateral, or
any part thereof, arising from any cause beyond their reasonable control. Bank
may at any time deliver or cause to be delivered all or any part of the
Collateral to Debtor, and Debtor's receipt shall be a complete and full
acquittance for the Collateral so delivered, and Bank shall thereafter be
discharged from any liability or responsibility therefor.
10. Debtor's Waivers. Debtor waives any right to require Bank to (a) give
Debtor notice of Bank's acceptance of this Agreement, (b) to the extent not
contrary to public policy, give notice of the terms, time and place of any
public or private sale of the Collateral, (c) proceed against any person or
entity, or exhaust any Collateral or pursue any remedy in Bank's power
whatsoever, and (d) make any presentment, demand or protest, or give any notice
of default, nonperformance, protest or dishonor, in connection with any
instrument, document or agreement evidencing the Obligations. Debtor
acknowledges that Bank may release, substitute or add Collateral, endorsers or
guarantors without affecting the liability of Debtor hereunder and under the
other Loan Documents, and waives the right to
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plead any statute of limitations, or any defense to the personal liability of
Debtor, as a defense to Bank's exercise of any right or remedy hereunder.
11. Reimbursement of Costs And Expenses. Debtor shall, to the extent permitted
by applicable law, reimburse Bank, on demand, for all costs and expenses
incurred by Bank in performing any agreement of Debtor which Debtor shall fail
to perform, or in taking any other action which Bank deems necessary for the
maintenance or preservation of any Collateral or Bank's interest therein. In
addition, Debtor shall reimburse Bank, on demand, for all reasonable attorneys'
fees (including the reasonable estimate of the allocated costs and expenses of
Bank's in-house legal counsel and legal staff), costs and other expenses
incurred or paid by Bank in collecting, modifying or compromising the
Obligations or in enforcing or exercising its rights or remedies created by,
connected with or provided for in any of the Loan Documents, whether or not an
arbitration, judicial action or other proceeding is commenced. If such a
proceeding is commenced, only the prevailing party shall be entitled to
attorneys' fees and court costs.
12. Miscellaneous. All rights, powers and remedies of Bank hereunder shall be
cumulative and not alternative. This Agreement may be amended, modified or
waived only in a writing signed by all parties hereto. All representations and
warranties contained in this Agreement are continuing and shall survive the
execution, delivery and performance of this Agreement. If more than one Debtor
executes this Agreement, their obligations hereunder are joint and several. All
words used herein in the singular shall be deemed to have been used in the
plural when the context and construction so require. Any married person who
signs this Agreement expressly agrees that recourse may be had against his/her
separate property for all of his/her obligations hereunder. This Agreement
shall inure to the benefit of and be binding upon Bank and Debtor and their
respective successors and assigns; provided, however, that Debtor may not assign
its rights or delegate its duties hereunder without the prior written consent of
Bank. Upon any sale, assignment or transfer by Bank of all or any portion of
the Obligations, Bank shall be fully discharged from all liability with respect
to any Collateral transferred therewith. Should any one or more provisions of
this Agreement be determined to be illegal or unenforceable, all other
provisions shall nevertheless be effective. Any notices or other communications
provided for or allowed hereunder shall be effective only when given by one of
the following methods and addressed to the respective party at its address given
with the signatures at the end of this Agreement (or at such other address as
the party changing its address shall notify the other as provided herein) and
shall be considered to have been validly given (a) upon delivery, if delivered
personally, (b) upon receipt, if mailed, first class postage prepaid, with the
United States Postal Service, (c) on the guaranteed delivery date, if sent by
courier service of recognized standing, and (d) upon telephoned confirmation of
receipt, if telecopied. Unless separate notice is requested in writing by any
Debtor, notice given to any Debtor shall constitute notice to all Debtors.
Except for the Loan Documents and any other documents and instruments referenced
herein, this Agreement constitutes the entire agreement between Bank and Debtor
relating to the Collateral and supersedes all prior understandings or agreements
concerning the subject matter hereof. This Agreement shall be governed by the
laws of the State of CALIFORNIA and, unless otherwise defined or provided
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herein, all words used in this Agreement have the meanings given them in the
Commercial Code of such state.
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IN WITNESS WHEREOF, Debtor and Bank have executed this Agreement as of the date
first hereinabove set forth.
"DEBTOR"
SEQUENOM, INC.
By: /s/ Xxxxxxx Xxxxxxxx
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XXXXX XXXXXXXX, SEC./TREASURER/CFO
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Address: 00000 Xxxxxxxx Xxxxxx Xxxx
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Xxx Xxxxx, XX 00000
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"BANK"
UNION BANK OF CALIFORNIA, N.A.
By: /s/ Xxx Xxxxxxx
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XXX XXXXXXX
Title: VICE PRESIDENT
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Address: 0000 XX XXXXX XXXXXXX XX. #000
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XXX XXXXX, XX 00000
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