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EXHIBIT 10.31
LOAN AGREEMENT
BETWEEN
CORIXA CORPORATION
AND
THE SUMITOMO BANK, LIMITED
DECEMBER 29, 1997
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TABLE OF CONTENTS
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ARTICLE I. DEFINITIONS.............................................................. 1
Section 1.1. Definitional Provisions................................................. 1
ARTICLE II. LOAN..................................................................... 1
Section 2.1. Term Notes........................................................... 1
Section 2.2. Use of Proceeds...................................................... 4
Section 2.3. Payments............................................................. 4
Section 2.4. Prepayments.......................................................... 5
Section 2.5. Indemnification; Increased Costs..................................... 6
Section 2.6. Investment Account and Custodian Account............................. 7
Section 2.7. Change In Legality................................................... 8
ARTICLE III. REPRESENTATIONS AND WARRANTIES........................................... 9
Section 3.1. Organization......................................................... 9
Section 3.2. Power, Authority, Consents........................................... 9
Section 3.3. No Violation of Law or Agreements.................................... 9
Section 3.4. Due Execution, Validity, Enforceability.............................. 10
Section 3.5. Judgments, Actions, Proceedings...................................... 10
Section 3.6. No Defaults, Compliance With Laws.................................... 10
Section 3.7. No Materially Adverse Contracts, Etc................................. 10
Section 3.8. Financial Statements................................................. 10
Section 3.9. Title to Properties; Leases.......................................... 11
Section 3.10. Priority of Liens.................................................... 11
Section 3.11. Patents, Copyrights, Licenses, Etc................................... 11
Section 3.12. Tax Returns.......................................................... 11
Section 3.13. Regulation U; Margin Stock........................................... 12
Section 3.14. Full Disclosure...................................................... 12
Section 3.15. ERISA................................................................ 12
Section 3.16. Environmental Compliance............................................. 13
Section 3.17. Other Regulations.................................................... 14
Section 3.18. Compliance with Securities Laws...................................... 14
Section 3.19. Solvency............................................................. 14
Section 3.20. Subsidiaries or Affiliates........................................... 14
Section 3.21. Pending Litigation................................................... 14
Section 3.22. Compliance with Investment Policy.................................... 14
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(continuation) TABLE OF CONTENTS
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ARTICLE IV. CONDITIONS PRECEDENT..................................................... 15
Section 4.1. Conditions Precedent to the Effectiveness of this Agreement.......... 15
Section 4.2. Conditions Precedent to Additional Disbursement...................... 16
ARTICLE V. AFFIRMATIVE COVENANTS.................................................... 16
Section 5.1. Books and Records.................................................... 17
Section 5.2. Inspections and Audits............................................... 17
Section 5.3. Perform Obligations.................................................. 17
Section 5.4. Fees and Expenses.................................................... 17
Section 5.5. Maintenance of Existence; Conduct of Business........................ 18
Section 5.6. Insurance............................................................ 18
Section 5.7. Certain Taxes........................................................ 18
Section 5.8. Use of Proceeds...................................................... 19
Section 5.9. Further Assurances With Respect To Accounts.......................... 19
Section 5.10. Financial Covenants.................................................. 19
Section 5.11. Deposits Into Custodian Account...................................... 20
Section 5.12. Investment Policy.................................................... 20
ARTICLE VI. DELIVERY OF FINANCIAL REPORTS,
DOCUMENTS AND OTHER INFORMATION.......................................... 20
Section 6.1. Annual Financial Statements.......................................... 20
Section 6.2. Quarterly Financial Statements....................................... 20
Section 6.3. 10Q and 10K Filings.................................................. 20
Section 6.4. Cash and Covenant Reports............................................ 21
Section 6.5. Other Information.................................................... 21
Section 6.6. No Trigger Event/Default Certificate................................. 21
Section 6.7. Notices.............................................................. 21
ARTICLE VII. NEGATIVE COVENANTS....................................................... 22
Section 7.1. Liens................................................................ 22
Section 7.2. Changes in Business; Merger or Consolidation;
Disposition of Assets................................................ 23
Section 7.3. Change of Office Address............................................. 24
Section 7.4. Violation of Agreement............................................... 24
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(continuation) TABLE OF CONTENTS
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ARTICLE VIII. EVENTS OF DEFAULT........................................................ 24
Section 8.1. Events of Default.................................................... 24
ARTICLE IX. MISCELLANEOUS PROVISIONS................................................. 26
Section 9.1. Indemnity; Additional Fees........................................... 26
Section 9.2. Survival of Agreements and Representations........................... 27
Section 9.3. Modifications, Consents and Waivers.................................. 27
Section 9.4. Entire Agreement..................................................... 27
Section 9.5. Remedies Cumulative.................................................. 27
Section 9.6. Further Assurances................................................... 27
Section 9.7. Notices.............................................................. 27
Section 9.8. Construction; Governing Law.......................................... 28
Section 9.9. Waiver of Jury Trial................................................. 29
Section 9.10. Jurisdiction......................................................... 29
Section 9.11. Relationship of the Borrower and the Bank............................ 29
Section 9.12. Severability......................................................... 30
Section 9.13. Binding Effect; Assignment........................................... 30
Section 9.14. Counterparts......................................................... 30
Section 9.15. Re-Establishment of Investment Account............................... 30
APPENDIX A TO LOAN AGREEMENT -- DEFINITIONS................................................ 1
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LOAN AGREEMENT
THIS LOAN AGREEMENT (the "Agreement") is made as of December 29, 1997 by
and between CORIXA CORPORATION, a Delaware corporation (the "Borrower"), and THE
SUMITOMO BANK, LIMITED, a Japanese banking corporation (the "Bank").
The Borrower and the Bank hereby agree as follows:
ARTICLE I.
DEFINITIONS
SECTION 1.1. DEFINITIONAL PROVISIONS.
(a) Capitalized terms used in this Agreement and defined in Appendix
A hereto, which Appendix A is attached to this Agreement and by this
reference made a part hereof, shall have the respective meanings specified
in such Appendix A.
(b) All terms defined in Appendix A shall have such defined meanings
when used in any certificate or any other document made or delivered
pursuant to this Agreement unless otherwise defined in such other document
or certificate.
(c) All accounting terms not specifically defined in this Agreement
or in Appendix A hereto shall be construed in accordance with generally
accepted accounting principles as in effect in the United States of
America.
ARTICLE II.
LOAN
SECTION 2.1. TERM NOTES.
(a) 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 Seven Million Dollars ($7,000,000) (the "Loan"). The
Bank will make an initial Disbursement to the Borrower on the Closing Date
in the amount of Two Million Dollars ($2,000,000). During the Availability
Period, the Bank will make subsequent Disbursements to the Borrower
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subject to the conditions set forth in Subsection 2.1(b) 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
promissory notes in the form of Exhibit 2.1 (individually a "Note"and
collectively the "Notes") dated as of the date of each Disbursement and
payable to the order of the Bank in the original principal amount of each
Disbursement.
(b) The Borrower shall submit a written request or a telephonic
request to the Bank (provided that such telephonic request is confirmed in
a written notice by Borrower to the Bank on the same Business Day in the
form attached hereto as Schedule 2.1(b) or such other form provided from
time to time by the Bank to the Borrower) for each Disbursement at least
three (3) Business Days prior to the desired funding date in the case of
any borrowing consisting of a Eurodollar Rate Loan Portion, and not later
than 12:00 noon (Chicago time) on the desired funding date in the case of
any borrowing consisting of a Prime Rate Loan Portion. The minimum amount
for any Disbursement shall be Five Hundred Thousand Dollars ($500,000). No
Disbursement shall be made after the occurrence of a Default or an Event
of Default. 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 Subsection 2.1(b)
and Section 4.2 hereinbelow.
(c) The Loan shall bear interest, and the Borrower shall pay
interest on, the outstanding principal balance of the Loan from the date
of each Disbursement to the Borrower until the Maturity Date at the
following rates per annum:
(i) with respect to any portion of such Loan which is a
Eurodollar Rate Loan Portion, interest 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; and
(ii) with respect to each portion of such Loan which is not a
Eurodollar Rate Loan Portion, interest at a rate per annum on each
such Loan Portion equal to the Prime Rate.
Not later than 12:00 noon (Chicago time) on the third Business
Day prior to the initial funding of the Loan, the Borrower may provide
written notice ("Initial Notice") to the Bank of the dollar amount of the
initial Disbursement which will be a Eurodollar Rate Loan Portion for the
initial Interest Period. In the event that the Borrower fails to provide
the Initial Notice in accordance with the preceding sentence, then the
outstanding principal balance of the Loan shall bear interest at the Prime
Rate until such time as Borrower has given an Election Notice in
accordance with Section 2.1(d) below. 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
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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.
(d) The Borrower may elect by written notice (the "Election Notice")
given to the Bank:
(i) by not later than 12:00 noon (Chicago 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 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 12:00 noon (Chicago 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.
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 each
Lender for its expenses, funding losses and loss of anticipated profits due to
such failure. The Borrower and the Lenders hereby agree that such expenses,
funding losses and loss of anticipated profits shall equal the sum of:
(1) The principal amount of each such Eurodollar
Rate Loan Portion 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), times the
applicable Interest Differential); plus
(2) 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 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 (1) and (2) is
not a positive number.
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.
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(e) 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.
(f) 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 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.
SECTION 2.2. USE OF PROCEEDS. The proceeds of the Loan shall be used by
the Borrower for the purpose of funding, or replenishing working capital
reserves used to fund, capital expenditures for enhancement and development of
research and development facilities, manufacturing facilities, acquisition of
laboratory equipment or other equipment and for general corporate purposes.
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SECTION 2.3. 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 December 31, 1998. Thereafter, the
Borrower will repay the principal amount of the Loan in forty-eight (48)
equal consecutive monthly installments of principal (each installment
being in an amount sufficient to amortize the outstanding principal
balance of the Loan over a period of forty-eight (48) months); i.e., each
installment of principal shall be equal to 2.0833% of the principal
balance of the Loan on December 31, 1998, payable on the last Business Day
of each calendar month commencing with the first such payment due on the
last Business Day of January 1999 and continuing until the Maturity Date,
on which date the Borrower shall make a final payment in an amount equal
to all the then unpaid principal of the Loan and all unpaid 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 the last day of each Interest Payment Date applicable
to each Eurodollar Rate Loan Portion. Notwithstanding the foregoing,
repayment of the Loan and all accrued and unpaid interest thereon may be
accelerated upon the occurrence and during the continuance of an Event of
Default.
(b) The Borrower shall make all payments hereunder in U.S. Dollars
and in immediately available funds at the Bank's office at 000 Xxxxx
Xxxxxx Xxxxx, Xxxxx 0000, Xxxxxxx, Xxxxxxxx 00000 (or at such other office
as the Bank may notify the Borrower in writing) via wire transfer to The
Sumitomo Bank, Limited, Chicago Branch, ABA 000000000, through the Federal
Reserve Bank of Chicago, Reference: Corixa. Payments not made prior to
12:00 noon (Chicago time) on the date of payment will be deemed paid on
the next Business Day. Payments which fall 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 calendar month, such
payment shall be made on the next preceding Business Day. All payments
hereunder and under the Note shall be made without set-off 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.
(c) 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 three and one-half percent (3.5%) in excess of
the rate then applicable to each Loan Portion until the end of any
Interest Period then applicable to such Loan
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Portion and thereafter at a rate per annum equal to three and one-half
percent (3.5%) in excess of the Prime Rate ("Default Rate").
(d) In partial consideration for the Bank making the Loan to the
Borrower, the Borrower shall pay to Bank: (i) a loan initiation fee
("Initiation Fee") in the aggregate amount of Seventy-Eight Thousand Seven
Hundred Fifty Dollars ($78,750) with such Initiation Fee to be due and
payable on the Closing Date; and (ii) during the period that the Bank has
any lending commitment hereunder, a commitment fee ("Commitment Fee")
computed for each day at a rate equal to 0.125% 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 quarter. On the Closing Date, Borrower hereby authorizes Bank to
deduct and pay the Initiation Fee which is due on the Closing Date and all
other reasonable fees and expenses of the Bank identified in Section
4.1(h) below, from the available proceeds of the Loan.
SECTION 2.4. PREPAYMENTS. Subject to this Section 2.4, 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) The principal amount of each such Eurodollar Rate Loan Portion
times (([number of days between the date of prepayment and the last day in
the applicable Interest Period] divided by 360), 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.
Notwithstanding the foregoing, no prepayment fee shall be payable (and no credit
or rebate shall be required) if the sum of the foregoing subparagraphs (a) and
(b) 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 2.5. 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:
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(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 or 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 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 2.5, 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 2.4 and this Section 2.5, including any
increased cost or reduction incurred through the date of such prepayment or
conversion). The Bank shall promptly notify the Borrower in writing of any event
of which it has knowledge, occurring after the date hereof, which will entitle
the Bank to compensation pursuant to this Section 2.5. The Bank shall provide to
the Borrower a certificate claiming compensation under this Section 2.5, 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 2.5 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 2.5, including
designating a different lending office for the Loans, if such designation will
avoid the need for or reduce the amount of any such
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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 2.6. INVESTMENT ACCOUNT AND CUSTODIAN ACCOUNT.
(a) Prior to the occurrence of a Trigger Event, the Borrower shall
hold at all times Cash and Cash Equivalents, which are not subject to any
Lien (other than General Tax Liens) or claim of any Person, in an amount
not less than the sum of (i) the then outstanding principal balance of the
Loan plus (ii) the Interest Reserve plus (iii) restricted cash and amounts
which may be restricted in the future pursuant to agreements between the
Borrower and third parties, in an investment account (the "Investment
Account") with an institution approved by the Bank (such institution being
referred to herein as the "Account Holder"). The initial Account Holder
will be Xxxxx Fargo Bank, N.A. The amounts held in the Investment Account
shall be subject to the investment control of the Borrower. The Account
Holder in respect of the Investment Account cannot be changed or a new
Investment Account opened without the Bank's prior written approval, which
approval shall not be unreasonably withheld. The Borrower shall deliver to
the Account Holder the Irrevocable Instructions and Power of Attorney in
the form of Exhibit 2.6.B (the "Irrevocable Instructions and Power of
Attorney).
(b) On or before the Closing Date, the Borrower, for the benefit and
on behalf of the Bank, shall establish and maintain or cause to be
established and maintained in the name of the Borrower an account (the
"Custodian Account") with Sumitomo Bank of New York Trust Company (the
"Bailee") under the Custodian Agreement and the Collateral Bailment
Agreement. Pursuant to the Restricted Account and Security Agreement by
and among the Bailee, the Bank and the Borrower, the Borrower has granted
to the Bank a security interest in all of its right, title and interest in
the Custodian Account, all deposits or investments held therein and all
proceeds thereof to secure payment and performance of the Borrower's
obligations hereunder. On or before the Closing Date, the Borrower shall
cause to be deposited in the Custodian Account the sum of One Thousand
Dollars ($1,000). So long as the Borrower is indebted to the Bank
hereunder and until payment in full of the Note and the Borrower's full
and complete performance of its obligations hereunder, the Custodian
Account shall at all times have a Restricted Account Balance of not less
than One Thousand Dollars ($1,000). The terms and conditions of the
Restricted Account and Security Agreement, the Collateral Bailment
Agreement, and the Custodian Agreement are incorporated herein by
reference.
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SECTION 2.7. 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 2.4), 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 2.4 (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.
(b) In the event that the Borrower is obligated to prepay a
Eurodollar Rate Loan Portion pursuant to clause (a) of this Section 2.7,
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 2.4, as
specified in the certificate furnished the Borrower pursuant to said
clause (a).
ARTICLE III.
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 in which it proposes to be engaged and is duly
qualified and in good standing in each jurisdiction in which the failure to
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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.
(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.
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SECTION 3.5. JUDGMENTS, ACTIONS, PROCEEDINGS. Except as set forth in
Schedule 3.5, there are no outstanding judgments, actions (including, without
limitation, derivative actions), suits or proceedings pending before any court
or governmental authority, bureau or agency, having a claim or amount in
controversy that exceeds $10,000 in any one instance or $50,000 in the aggregate
at any one time with respect to or, to the best of the Borrower's knowledge,
threatened against or affecting Borrower.
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 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) The Borrower has no material obligation, liability or
commitment, direct or contingent, which is 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 quarter ending September 30, 1997.
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(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. PRIORITY OF 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 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. 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 except as set forth in Schedule 3.11. Schedule 3.11 lists all
pending suits or claims for infringement with respect to 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 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
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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 II, 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 untrue statement of a material
fact, 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.
SECTION 3.15. ERISA.
(a) Except as set forth in Schedule 3.15, 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. ENVIRONMENTAL COMPLIANCE. Except as set forth in Schedule
3.16, the Borrower has taken all necessary steps to comply in all material
respects with Environmental Laws (as hereinafter defined) and has determined
that:
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(a) To Borrower's knowledge, after diligent inquiry, Borrower is not
in violation, or alleged violation, of any judgment, decree, order, law,
license, rule or regulation pertaining to environmental matters, including
without limitation, those arising under the Resource Conservation and
Recovery Act ("RCRA"), the Comprehensive Environmental Response,
Compensation and Liability Act of 1980 as amended ("CERCLA"), the
Superfund Amendments and Reauthorization Act of 1986 ("XXXX"), the Federal
Clean Water Act, the Federal Clean Air Act, the Toxic Substances Control
Act, each as amended as of the date hereof, or any other federal, state or
local statute, regulation, ordinance, order or decree relating to health,
safety or the environment (hereinafter "Environmental Laws");
(b) The Borrower has not received notice from any third party
including, without limitation, any federal, state or local governmental
authority, (i) that it has been identified by the United States
Environmental Protection Agency ("EPA") as a potentially responsible party
under CERCLA with respect to a site listed on the National Priorities
List, 40 C.F.R. Part 000 Xxxxxxxx X (1986); (ii) that any hazardous waste,
as defined by 42 U.S.C. Section 9601(5), any hazardous substances as
defined by 42 U.S.C. Section 9601(14), any pollutant or contaminant as
defined by 42 U.S.C. Section 9601(33) and any toxic substances, oil or
hazardous materials or other chemicals or substances regulated by any
Environmental Laws ("Hazardous Substances") which it has generated,
transported or disposed of has been found at any site at which a federal,
state or local agency or other third party has conducted or has ordered
that it conduct a remedial investigation, removal or other response action
pursuant to any Environmental Law; or (iii) that it is or shall be a named
party to any claim, action, cause of action, complaint, or legal or
administrative proceeding (in each case, contingent or otherwise) arising
out of any third party's incurrence of costs, expenses, losses or damages
of any kind whatsoever in connection with the release of Hazardous
Substances;
(c) To the Borrower's knowledge: (i) the properties on which the
Borrower conducts its business have not been used by the Borrower for the
handling, processing, storage or Disposal of Hazardous Substances except
in accordance with applicable Environmental Laws; (ii) in the course of
any activities conducted by the Borrower, no Hazardous Substances have
been generated or are being used on property leased by the Borrower on
which the Borrower conducts its business except in accordance with
applicable Environmental Laws; (iii) there has been no Release or
threatened Release of Hazardous Substances by the Borrower on, upon, into
or from the properties on which the Borrower operates its business, which
Release would have a material adverse effect on the Borrower's business;
(iv) there have been no Releases on, upon, from or into any real property
in the vicinity of any of the properties on which the Borrower conducts
its business, through soil or groundwater contamination, which may have
come to be located on, and which would have a material adverse effect on
the Borrower's business; and (v) in addition, any Hazardous Substances
that have been generated by the Borrower on the
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properties on which the Borrower conducts its business have been
transported off-site only by carriers having an identification number
issued by the EPA, treated or Disposed of only by treatment or disposal
facilities maintaining valid permits as required under applicable
Environmental Laws, which transporters and facilities have been and are,
to the best of the Borrower's knowledge, operating in compliance with such
permits and applicable Environmental Laws; and
(d) none of the properties on which the Borrower conducts its
business is or is expected to be in violation of any applicable
environmental clean-up responsibility law or regulation or environmental
restrictive transfer law or regulation, in regard to which failure to
comply would have a material adverse effect on the environment or the
business, assets or financial condition of the Borrower.
SECTION 3.17. OTHER REGULATIONS. 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 3.18. 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 3.19. SOLVENCY. The Borrower is solvent and is not the subject of
bankruptcy or insolvency proceedings.
SECTION 3.20. SUBSIDIARIES OR AFFILIATES. The Borrower does not have any
Subsidiary or Affiliate (other than as set forth in Schedule 3.20).
SECTION 3.21. PENDING LITIGATION. Except as set forth in Schedule 3.21,
there are no lawsuits or claims pending against Borrower which could have a
material adverse affect on the Borrower's financial condition.
SECTION 3.22. COMPLIANCE WITH INVESTMENT POLICY. The Borrower is in
compliance with its Investment Policy for investment of Cash and Cash
Equivalents. A true and correct copy of such Investment Policy is attached as
Schedule 5.12.
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ARTICLE IV.
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 to the Bank a Note
in the amount of the initial Disbursement, the Collateral Bailment
Agreement, the Restricted Account and Security Agreement, the Irrevocable
Instructions and Power of Attorney, the Custodian Agreement, the Financing
Statement and an original counterpart of this Agreement.
(b) The Bailee will have executed and delivered the Collateral
Bailment Agreement, the Custodian Agreement and the Restricted Account and
Security Agreement;
(c) The initial Account Holder will have executed and delivered its
consent to the Irrevocable Instructions and Power of Attorney to the Bank;
(d) The Borrower shall have deposited One Thousand Dollars ($1,000)
into the Custodian Account;
(e) The Borrower will have otherwise fully complied with all of the
terms and conditions of the Loan Documents;
(f) 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 by-laws 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 this Agreement, the Note, the Loan Documents and all
instruments and documents provided for herein or therein, 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;
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(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.
(g) 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 authorization, execution and enforceability of
this Agreement and the other Loan Documents, 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;
(h) The Bank shall have received the Initiation Fee which is due on
the Closing Date and all other fees and expenses (including, without
limitation, Bank's legal fees and expenses incurred in the negotiation and
preparation of the Loan Documents 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
(i) All representations and warranties of the Borrower contained
herein are true and correct 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 ADDITIONAL DISBURSEMENTS. The
obligation of the Bank to make Disbursements after the initial Disbursement
shall be subject to the following conditions precedent:
(a) The Borrower shall have executed and delivered to the Bank a
Note in the amount of the proposed Disbursement;
(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; and
(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 2.1(b).
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ARTICLE V.
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 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. INSPECTIONS AND AUDITS. Permit the Bank to make or cause to
be made reasonable inspections and audits of any books, records and papers of
the Borrower and to make extracts therefrom and copies thereof at all such
reasonable times and upon reasonable written notice, provided, however, that
certain areas of the Borrower's facilities may be restricted for reasons of
health and safety and as necessary for business security for Borrower's
Intellectual Property Rights and the Bank will not be permitted access to such
restricted areas.
SECTION 5.3. 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 Bank is reasonably satisfied that the Accounts are not in danger of
being the subject of a Lien (except to the extent permitted by Section 7.1) or
sold, forfeited or lost as a result thereof and the Borrower has provided such
security or other assurances as Bank reasonably requests.
SECTION 5.4. FEES AND EXPENSES. Pay on 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 (or any
such instrument which is proposed 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
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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 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 5.4.
SECTION 5.5. 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 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 or proposed to be conducted by the Borrower as set
forth in the Borrower's prospectus relating to its initial public offering dated
October 2, 1997 (the "Prospectus").
SECTION 5.6. 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.
Schedule 5.6 lists insurance of the Borrower currently in effect. The Borrower
shall furnish to the Bank, from time to time upon the Bank's request,
certificates or other evidence satisfactory to the Bank of compliance with the
foregoing.
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SECTION 5.7. 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 5.7 will
survive for two (2) years following the payment of the Note and the
termination of this Agreement.
SECTION 5.8. USE OF PROCEEDS. Use the proceeds of all Disbursements made
by the Bank hereunder only for the purpose specified in Section 2.2 -- "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.
SECTION 5.9. FURTHER ASSURANCES WITH RESPECT TO ACCOUNTS. Promptly supply
the Bank with such information concerning the Investment Account as the Bank may
reasonably request from time to time hereafter, including, without limitation,
account statements which shall be delivered not less frequently than quarterly
(or more frequently if required pursuant to Section 6.4), which account
statements will summarize the value of deposits and investments in the Accounts.
SECTION 5.10. FINANCIAL COVENANTS. The Borrower on a consolidated basis
shall at all times maintain:
(i) A maximum ratio of Total Debt to Net Worth, as calculated
on a quarterly basis, of 0.5:1;
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(ii) A minimum Current Ratio, as calculated on a quarterly
basis, of 1.5:1.0;
(iii) A minimum Net Cash Level equal to the then outstanding
principal balance due under the Note plus the greater of (x)
Ten Million Dollars ($10,000,000) or (y) an amount equal to
two times the sum of the previous six months of Actual Cash
Burn;
(iv) Cash and Cash Equivalents, which are not subject to any
Lien or claim of any Person (other than General Tax Liens), on
hand in the Investment Account in an amount not less than the
sum of (x) the then outstanding principal balance of the Loan
plus (y) the Interest Reserve plus (z) restricted cash and
amounts which may be restricted in the future pursuant to
agreements between the Borrower and third parties; and
(v) A minimum Net Worth of Twenty Million Dollars
($20,000,000).
The failure of the Borrower to maintain any of the covenants set forth in this
Section 5.10(i)-(v) and/or the occurrence of an Event of Default under Section
8.1 of this Agreement shall be a "Trigger Event."
SECTION 5.11. DEPOSITS INTO CUSTODIAN ACCOUNT. Upon the occurrence of a
Trigger Event, the Borrower will make, or, through the Account Holder pursuant
to the Irrevocable Instructions and Power of Attorney make, payments or deposits
to the Custodian Account such that after giving effect to such payments or
deposits the Restricted Account Balance equals or exceeds the Required
Restricted Account Balance. At the time of each such payment, the Borrower will
submit to the Bank a statement setting forth the market values of marketable
securities and the Restricted Account Balance as of the date of deposit (after
giving effect to any deposits made on or before such day).
SECTION 5.12. INVESTMENT POLICY. The Borrower shall at all times comply
with its investment policy which is attached hereto as Schedule 5.12 (the
"Investment Policy") with respect to the investment of all Cash and Cash
Equivalents.
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ARTICLE VI.
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.
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).
SECTION 6.3. 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 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 6.4. CASH AND COVENANT REPORTS. The following reports, statements
or certificates: (i) 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 report as to the calculations
with respect to, and compliance with, the financial covenants set forth in
Section 5.10(i) through 5.10(v); and (ii) within fifteen (15) days of the end of
each calendar quarter, a statement listing (A) the Borrower's Net Cash Level at
the end of
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such calendar quarter and the domicile of such cash and investments and (B) the
cash balances and Cash Equivalent Balances of the Investment Account as of the
end of such calendar quarter, provided that during any period when the
Borrower's Net Cash Level is less than an amount equal to the sum of Ten Million
Dollars ($10,000,000) plus an amount equal to the then outstanding principal
balance of the Note, the Borrower shall submit to the Bank, within ten (10) days
of the end of each calendar month, a compliance statement indicating the
Borrower's actual Net Cash Level and listing all of the Borrower's cash balances
and Cash Equivalent Balances as of month end wherever domiciled, accompanied by
confirming statements of the custodians of such cash balances and Cash
Equivalent Balances; and (iii) within twenty (20) days of the end of each
calendar month, in order for the Bank to monitor Borrower's compliance with the
financial covenants set forth in Section 5.10(iii), a certificate of the Actual
Cash Burn for the preceding six (6) month period.
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 TRIGGER EVENT/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 Trigger Event or 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) DEFAULTS. As soon as possible and in any event within seven (7)
days after the Borrower has knowledge of the occurrence or existence of a
Trigger Event or any event which with the giving of notice or passage of
time or both, would constitute either an Event of Default or Trigger
Event, the statement of the Borrower setting forth details of such Trigger
Event or 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 $50,000 in any one
instance or $50,000 in the aggregate at any one time, or of one or more
judgment(s) not covered by insurance, final or otherwise, in an aggregate
amount of $50,000 or more.
(c) ENVIRONMENTAL EVENTS. Promptly after obtaining knowledge or
receipt thereof, written notice of any of the following which has the
potential to materially adversely affect the assets, liabilities,
financial condition or operations of the Borrower: (i)
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any violation of any Environmental Laws regarding the Borrower's
operations; (ii) any potential or known Release, or threat of Release, of
any Hazardous Substances at, from or into the Borrower's place of business
which the Borrower reports in writing or is reportable in writing (or for
which any written report supplemental to any oral report is made) to any
federal, state, or local environmental agency; (iii) any notice of
violation of any Environmental Laws or of any release or threatened
release of Hazardous Substances, including a notice or claim of liability
or potential responsibility from any third party (including without
limitation any federal, state or local governmental officials) and
including notice of any formal inquiry, proceeding, demand, investigation
or other action with regard to the Borrower's business operation; or (iv)
any expense or loss that has been identified by such governmental
authority in connection with the assessment, containment, removal or
remediation of any Hazardous Substances with respect to which the Borrower
may be liable.
ARTICLE VII.
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 5.7 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;
(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;
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(d) Liens arising out of pledgor deposits under workers'
compensation laws, unemployment insurance, social security, retirement
benefits or similar legislation;
(e) Permitted Purchase Money Liens (including, without limitation,
Liens arising in connection with equipment leases);
(f) 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;
(g) 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
(h) Security deposits under leases of the Borrower's premises set
forth on Schedule 7.1 hereto.
SECTION 7.2. CHANGES IN BUSINESS; MERGER OR CONSOLIDATION; DISPOSITION OF
ASSETS. Without the Bank's consent which shall be granted or denied within a
commercially reasonable period:
(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 as proposed to be conducted as set forth in the
Prospectus), or in the nature of its operations (as presently conducted or
as proposed to be conducted as set forth in the Prospectus), or liquidate
or dissolve itself (or suffer any liquidation or dissolution).
(c) Effect any disposition of all or a material portion 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.
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SECTION 7.3. CHANGE OF OFFICE ADDRESS. Except upon five (5) days' prior
written notice to the Bank, change the address of its principal office or place
of business or the place where it maintains its records with respect to the
Accounts.
SECTION 7.4. VIOLATION OF AGREEMENT. Take any action the effect of which
would constitute a breach or violation of any provision of this Agreement.
ARTICLE VIII.
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 will (i) in the case of any Event of Default of the types
referred to in subparagraph (e) hereinbelow, 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 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. Each of the following shall constitute an Event of Default:
(a) Failure by the Borrower to make any payment when due of any
amount payable under the Loan Documents, which failure is not cured within
five (5) days of the occurrence thereof.
(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 $50,000.
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(c) Failure by the Borrower to perform or observe any material term,
condition or covenant of this Agreement or of any of the Loan Documents
(other than the covenants set forth in Section 5.10(i) through 5.10(v)
which shall constitute a Trigger Event instead) 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), (b) and (c) hereinabove) 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, 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 $50,000 or more or a combination of
unsecured judgments aggregating $50,000 or more against the Borrower not
covered by 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) After the occurrence of a Trigger Event under Section 5.10, the
failure of the Borrower and/or the Account Holder to make the requisite
transfer to the Custodian Account as provided in Section 5.11 such that,
not later than 5:00 P.M. in New York, New York on the first Business Day
following the occurrence of the Trigger Event, the Restricted Account
Balance equals or exceeds the Required Restricted Account Balance.
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(i) Upon the occurrence of a Trigger Event under Section 5.10, the
failure of the Borrower to execute and deliver, or cause to be executed
and delivered, any additional documents reasonably requested by the Bank
in connection with the transfer by the Borrower and/or Account Holder to
the Custodian Account as provided in Section 5.11 (including without
limitation any additional documents requested by the Bank in order to
further implement or perfect the pledge of assets held in the Custodian
Account and any additional opinion of the Borrower's counsel on such
matters the Bank may require, in a form and substance satisfactory to
Bank).
(j) Failure by the Borrower to comply with the Investment Policy for
investment of all Cash and Cash Equivalents, or the Borrower's making a
material change to such Investment Policy without the Bank's prior written
approval, which approval shall not be unreasonably withheld.
(k) After the occurrence of a Trigger Event and the initial transfer
to the Custodian Account as provided in Section 5.11, the failure of the
Borrower and/or the Account Holder to make, within one Business Day
following the request of the Bank, such additional transfers to the
Custodian Account as may be necessary, from time to time, to increase the
Restricted Account Balance so that it equals the Required Restricted
Account Balance.
(l) The failure by the Borrower, at any time, to maintain a Net Cash
Level equal to the sum of the then outstanding principal balance under the
Note plus the greater of (i) Six Million Dollars ($6,000,000) or (ii) an
amount equal to two times the sum of the previous four months of Actual
Cash Burn.
(m) After the Closing Date, a material adverse change in the
business or financial condition of the Borrower occurs.
(n) Failure by the Borrower to perform or observe any term,
condition or covenant set forth in Section 2.6.
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ARTICLE IX.
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, resulting from
or in any manner connected with, the Loan Documents, or any transaction related
hereto or thereto, 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 REPRESENTATIONS. All agreements,
representations and warranties made herein will survive the delivery of the Loan
Documents and shall be in full force and effect during the term of this
Agreement.
SECTION 9.3. MODIFICATIONS, CONSENTS AND WAIVERS. 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 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
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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: Venture Law Group
0000 Xxxxxxxx Xxxxx
Xxxxxxxx, Xxxxxxxxxx 00000
Attn: Xxxxxxx Xxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
If to Bank: The Sumitomo Bank, Limited
Pine Street Representative Xxxxxx
000 Xxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxxxx, XX 00000-0000
Attn: Xxxxxx X. Xxxxx, Vice President
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
If to Bank's Counsel: Freed & Heinemann LLP
One Xxxxxxx Place
000 Xxxxxxx Xxxxxx, Xxxxx 000
Xxx Xxxxxxxxx, XX 00000
Attn: Xxxxx X. Xxxxxxxxx, Esq.
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
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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. All 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. 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.
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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 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.
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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 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) Bank, without the consent of the Borrower, 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.
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.
SECTION 9.15. RE-ESTABLISHMENT OF INVESTMENT ACCOUNT. If, after the
occurrence of a Trigger Event and after the deposits to the Custodian Account
required under Section 5.11 have been made, the Borrower's Net Cash Level is
restored to a level which equals or exceeds the sum of the then outstanding
principal balance due under the Note plus the greater of (i) Ten Million Dollars
($10,000,000) or (ii) an amount equal to two times the sum of the previous six
months of Actual Cash Burn, then Borrower may request that the Investment
Account be re-established by delivering a written notice to Bank (the
"Investment Account Re-Establishment Notice"). After Borrower's delivery to Bank
of the Investment Account Re-Establishment Notice, the Bank may, in the Bank's
sole and absolute discretion, allow for the Investment Account to be
re-established and all amounts held in the Custodian Account less the Required
Restricted Account Balance of One Thousand Dollars ($1,000) to be transferred to
the Investment Account on the date that all of the following conditions have
been satisfied ("Transfer Date"):
(a) the Borrower has delivered to the Bank a written statement,
accompanied by confirming statements of the custodians of such cash
balances and Cash Equivalent Balances, which is certified as to accuracy
by the Chief Financial Officer or director of finance of Borrower, which
evidences that the Borrower's Net Cash Level has been restored to a level
which equals or exceeds the sum of the then outstanding principal balance
due under the Note plus the greater of (i) Ten Million Dollars
($10,000,000) or (ii) an amount equal to two times the sum of the previous
six months of Actual Cash Burn;
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(b) a Trigger Event shall not be continuing as of either the date of
the Investment Account Re-Establishment Notice or the Transfer Date;
(c) the Borrower shall have otherwise fully complied with, performed
or observed all material terms, conditions and covenants in the Loan
Documents as of the date of the Investment Account Re-Establishment Notice
and the Transfer Date;
(d) the Borrower, the Bank and the Account Holder shall have
executed and delivered such additional documents, reasonably required by
the Bank, necessary to re-establish the Investment Account in accordance
with the provisions of this Agreement and with Cash and Cash Equivalents,
which are not subject to any Lien or claim of any person (other than
General Tax Liens), on hand in the Investment Account (upon
re-establishment thereof) in an amount not less than the sum of (i) the
then outstanding principal balance of the Loan plus (ii) the Interest
Reserve plus (iii) plus restricted cash and amounts which may be
restricted in the future pursuant to agreements between the Borrower and
third parties, including without limitation, a re-affirmation of the
Irrevocable Instructions and Power of Attorney, or execution of new
irrevocable instructions providing substantially the same terms and
conditions as the Irrevocable Instructions and Power of Attorney;
(e) the Borrower, the Bank and the Bailee (where necessary) shall
have executed and delivered such additional documents necessary to release
funds from the Custodian Account and transfer such funds to the Investment
Account and such additional documents, reasonably required by the Bank,
necessary to re-affirm and continue in full force and effect the Custodian
Agreement, the Collateral Bailment Agreement, the Restricted Account and
Security Agreement and the other Loan Documents;
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(f) the Borrower shall have delivered to Bank an additional opinion
of Borrower's counsel on such matters as the Bank may reasonably require
with respect to the re-establishment of the Investment Account and
re-affirmation of the Loan Documents, in a form and substance satisfactory
to Bank; and
(g) such other conditions as the Bank, in its sole and absolute
discretion, may require as a condition to the re-establishment of the
Investment Account.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the date first above written.
CORIXA CORPORATION
By: /s/ Xxxxxxxx Xxxxxx
Name: Xxxxxxxx Xxxxxx
Title: VP, Finance and Administration
THE SUMITOMO BANK, LIMITED
By: /s/ Xxxxxx X. Xxxxx
Name: Xxxxxx X. Xxxxx
Title: Vice President and Manager
By: /s/ J. Xxxxxxx Xxxxxx
Name: J. Xxxxxxx Xxxxxx
Title: Vice President
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APPENDIX A TO LOAN AGREEMENT -- DEFINITIONS
The following words shall have the meanings specified below in the Section
of the Agreement referred to below.
"ACCOUNT HOLDER" -- is defined in Subsection 2.6(a).
"ACCOUNTS" -- the Investment Account and the Custodian Account.
"ACTUAL CASH BURN" -- the amount of the actual change in Borrower's Cash
and Cash Equivalents (including short-term and long-term investments) as
calculated on the last day of each calendar month for the preceding one month
period and as set forth in a written certificate prepared by Borrower and
delivered to Bank not later than the 20th day of each month for the preceding
month.
"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.
"AGREEMENT" -- is defined in the Preamble.
"APPLICABLE MARGIN" -- means one and one-half percent (1.5%).
"AUTHORIZED SIGNATORY" -- with respect to a corporation, any officer of
such corporation.
"AVAILABILITY PERIOD" -- the period commencing on the Closing Date and
ending on December 31, 1998.
"BAILEE" -- is defined in Subsection 2.6(b).
"BANK" -- is defined in the Preamble.
"BORROWER" -- is defined in the Preamble.
"BUSINESS DAY" -- a day when commercial banks in both San Francisco,
California and Chicago, Illinois and, in the case of setting the Reserve
Adjusted Eurodollar Rate, London,
A-1
41
England, are open for business with respect to transactions of the kind
contemplated in this Agreement.
"CERCLA" -- is defined in Subsection 3.16(a).
"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, noncurrent,
long-term or restricted.
"CASH EQUIVALENT BALANCES" -- the aggregate amount of Cash and Cash
Equivalents, as reported in the Financial Statements, which Financial Statements
shall be prepared in accordance with GAAP.
"CLOSING DATE" -- December 29, 1997.
"CODE" -- the Internal Revenue Code of 1986, as amended.
"COLLATERAL BAILMENT AGREEMENT" -- the Collateral Bailment Agreement of
even date herewith by and among the Borrower, the Bailee and the Bank.
"COMMITMENT FEE" -- is defined in Subsection 2.3(d)
"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.
"CURRENT RATIO" -- the ratio of total current assets to total current
liabilities.
"CUSTODIAN ACCOUNT" -- is defined in Subsection 2.6(b).
"CUSTODIAN AGREEMENT" -- Custodian Agreement of even date herewith by and
between the Borrower and Sumitomo Bank of New York Trust Company.
"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 2.3(c).
"DISBURSEMENT" -- a disbursement of available proceeds of the Loan.
A-2
42
"DISPOSAL," "DISPOSE(D)" -- as specified in RCRA and in the regulations
promulgated thereunder.
"ELECTION NOTICE" -- is defined in Subsection 2.1(d).
"EPA" -- is defined in Subsection 3.16(a).
"ENVIRONMENTAL LAWS" -- is defined in Subsection 3.16(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 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 1/16 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.
A-3
43
"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.
"FINANCING STATEMENT" -- a financing statement or statements on form
UCC-1, signed by the Borrower and describing the property in which the Bank has
a security interest under the Restricted Account and Security Agreement, all in
form and substance suitable for filing as a financing statement under Article 9
of the Uniform Commercial Code as enacted in California and/or New York.
"GAAP" -- generally accepted accounting principles.
"GENERAL TAX LIENS" -- is defined in Subsection 7.1(b).
"HAZARDOUS SUBSTANCES" -- is defined in Subsection 3.16(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 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
A-4
44
(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.
"INITIATION FEE" -- is defined in Subsection 2.3(d).
"INITIAL NOTICE" -- is defined in Subsection 2.1(c).
"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) 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
A-5
45
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, and (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.
"INTEREST RESERVE" -- on any date of determination means an amount equal
to the interest that would accrue over the next three months on an amount equal
to the principal balance of the Loan outstanding on such date of determination.
"INVESTMENT ACCOUNT" -- is defined in Subsection 2.6(a).
"INVESTMENT ACCOUNT RE-ESTABLISHMENT NOTICE" -- is defined in Section
9.15.
"INVESTMENT POLICY" -- is defined in Section 5.12.
"IRREVOCABLE INSTRUCTIONS AND POWER OF ATTORNEY" -- is defined in
Subsection 2.6(a).
"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, the Restricted Account and
Security Agreement, the Collateral Bailment Agreement, the Irrevocable
Instructions and Power of Attorney, the Custodian Agreement, 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.
"MATURITY DATE" -- December 30, 2002.
"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
Custodian Account which are restricted or pledged for the benefit of the Bank),
(ii) amounts which may be restricted
A-6
46
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.
"NET WORTH" -- an amount equal to the Total Assets minus Total
Liabilities.
"NOTE" -- is defined in Section 2.1.
"PBGC" -- is defined in Subsection 3.15(a).
"PERMITTED LIENS" -- is defined in Section 7.1.
"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.
"PROSPECTUS" -- is defined in Section 5.5.
"RCRA" -- is defined in Subsection 3.16(a).
"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
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47
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 law) by any court or
governmental or monetary authority charged with the interpretation or
administration thereof.
"RELEASE" -- as specified in CERCLA.
"REPORTING PERIOD" -- a fiscal quarter of the Borrower.
"REQUIRED RESTRICTED ACCOUNT BALANCE" -- (a) on and after a Trigger Event
has occurred, the sum of the Borrower's then outstanding principal balance of
the Loan plus the Interest Reserve and (b) prior to the occurrence of a Trigger
Event, the sum of One Thousand Dollars ($1,000).
"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 ACCOUNT AND SECURITY AGREEMENT" -- the Restricted Account and
Security Agreement of even date herewith by and among the Bank, the Bailee and
the Borrower.
"RESTRICTED ACCOUNT BALANCE" -- the sum of all Cash and Cash Equivalents
and any other investments on deposit in the Custodian Account, the amount of
such Cash Equivalents or investments to be calculated at the lower of cost or
market value.
"XXXX" -- is defined in Subsection 3.16(a).
"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 2.5(a).
"TOTAL ASSETS" -- total assets as determined in accordance with generally
accepted accounting principles, consistently applied; provided, however, that
Total Assets shall be reduced by the amount (if any) of intangible assets.
A-8
48
"TOTAL DEBT" -- the aggregate amount of the Borrower's Indebtedness.
"TOTAL LIABILITIES" -- the sum of (a) Borrower's Indebtedness and (b) all
operating lease obligations and trade accounts payable and accrued obligations
incurred in the ordinary course of business.
"TRANSFER DATE" -- is defined in Section 9.15.
"TRIGGER EVENT" -- is defined in Section 5.10.
"UCC" -- the Uniform Commercial Code in effect from time to time in the
relevant jurisdiction.
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49
SCHEDULE 3.5
None.
50
SCHEDULE 3.11
None.
-2-
51
SCHEDULE 3.15
Corixa Corporation 401(k) Savings & Retirement Plan
-3-
52
SCHEDULE 3.16
None.
-4-
53
SCHEDULE 3.20
None.
-5-
54
SCHEDULE 3.21
None.
-6-
55
SCHEDULE 5.6
INSURANCE
COVERAGE PERIOD INSURANCE CO. POLICY NO. NOTES
Products Liability 7/15/97-7/15/98 Lexington Ins. Co. 5632477
Umbrella 10/28/97-10/28/98 Federal Ins. Co. (Chubb) 7966-44-38
General Liability 10/28/97-10/27/98 Federal Ins. Co. (Chubb) 3532-45-78
Property 10/28/97-10/28/98 Federal Ins. Co. (Chubb) 3532-45-78
Foreign Package 10/28/97-10/28/98 Great Northern Ins. Co. (Chubb) 7323-64-12
Commercial Auto 10/28/97-10/28/98 Federal Ins. Co. (Chubb) 7321-39-60
Crime 10/28/97-10/28/98 Federal Ins. Co. (Chubb) 3532-45-78
Boiler & Machinery 10/28/97-10/28/98 Federal Ins. Co. (Chubb) 3532-45-78
Directors & Officers 10/2/97-10/2/00 Genesis Ins. Co. YXB001526 Open Market Securities
10/2/97-10/2/00 Genesis Ins. Co. YXB1525 Prospectus
-7-
56
SCHEDULE 5.12
INVESTMENT POLICY
See attached.
-8-
57
SCHEDULE 7.1
SECURITY DEPOSITS UNDER REAL PROPERTY LEASES
Lease dated May 31, 1996 by and between Health Science Properties, Inc. and the
Company. No security deposit.
Columbia Building Lease dated October 28, 1994 by and between Xxxx Xxxxxxxxxx
Cancer Research Center and the Company. Security deposit paid the amount of
$28/square foot (14,000 square feet rented) plus pro rata portion of operating
expenses. The Columbia Building Lease was amended on December 29, 1995 and, as
additional security to FHCRC for the Company's obligations under the lease in
the event the building is sold, an unconditional, irrevocable standby letter of
credit in the amount of $750,000.
-9-
