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EXHIBIT 10.17
MASTER LOAN AND SECURITY AGREEMENT
No.7404 Dated: December 21, 1998
LENDER: CUSTOMER:
OXFORD VENTURE FINANCE, LLC AUTOCYTE, INC.
a Virginia limited liability corporation a Delaware corporation
Address: Address:
000 Xxxxx Xxxxxxx Xxxxxx 000 Xxxxxxxxxx Xxxxx
Xxxxxxxxxx, Xxxxxxxx 00000 Xxxxxxxxxx, XX 00000
In consideration of each Loan Agreement, Customer hereby
agrees with Lender that, whenever Customer shall be at any time or times
directly or contingently indebted, liable or obligated to Lender in any manner
whatsoever, Lender shall have the following rights:
1. DEFINITIONS. To the extent not otherwise specifically
defined in this Agreement, unless the context otherwise requires, all other
terms contained in this Agreement shall have the meanings assigned or referred
to them in the UCC. The following terms shall have the following meanings:
"Acceptance Date" with respect to each item of Equipment shall
have the meaning assigned to such term in Section 3 of this Agreement.
"Affiliate" shall mean, with respect to any person, firm or
entity, any other person, firm or entity controlling, controlled by, or under
common control with such person, firm or entity; for the purposes hereof
"control" shall mean the possession, directly or indirectly, of the power to
direct or cause the direction of the management and policies of any such person,
firm or entity, whether through the legal or beneficial ownership of voting
securities, by contract or otherwise.
"Agreement" shall mean this Master Loan and Security
Agreement, as amended or modified from time to time.
"Attorneys' Fees and Expenses" shall mean all reasonable
attorneys' fees (based upon standard hourly rates) and legal costs and expenses
(including, without limitation, those fees, costs and expenses incurred in
connection with bankruptcy proceedings, including Relief from Stay Motions, Cash
Collateral Motions and disputes concerning any proposed disclosure statement
and/or bankruptcy plan).
"Collateral" shall mean all Equipment and all products,
proceeds, rents and profits therefrom or thereof including proceeds in the form
of goods, accounts, chattel paper, documents, instruments and insurance
proceeds.
"Default" shall have the meaning ascribed to such term in
Section 8 of this Agreement.
"Equipment" shall mean one or more items or units of personal
property now owned or hereafter acquired by Customer, as described in each
Equipment Schedule, wherever the same may be located, including all present and
future additions, attachments, accessions and accessories thereto and all
replacements, substitutions and a right to use license for any software related
to any of the foregoing and proceeds thereof, including all proceeds of
insurance thereon.
"Equipment Schedule" shall mean each Equipment Schedule, which
incorporates by reference the terms and conditions of this Agreement and
describes one or more items of Equipment and specific terms and conditions with
respect thereto.
"Event of Default" shall have the meaning ascribed to such
term in Section 8 of this Agreement.
"Loan Agreement" shall mean the applicable Equipment Schedule
incorporating the terms and conditions of this Agreement, including all
exhibits, addenda, schedules, certificates, riders and all other documents and
instruments
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executed and delivered in connection with the applicable Equipment Schedule or
this Master Loan and Security Agreement.
"Note" shall mean a promissory note of Customer in favor of
Lender evidencing Customer's obligations to Lender with respect to a Loan
Agreement.
"Obligations" shall mean all liabilities, absolute or
contingent, joint, several or independent, of Customer or any Affiliate of
Customer pursuant to this Agreement, any Loan Agreement or any related document,
whether now or hereafter existing, due or to become due to, or held or to be
held by, Lender for its own account or as agent for another or others, whether
created directly or acquired by assignment or otherwise and howsoever evidenced,
including, without limitation, the Loan Agreement, and all interest, taxes,
fees, charges, expenses and Attorneys' Fees and Expenses chargeable to Customer
or incurred by Lender under the Loan Agreement, or any other document or
instrument delivered in connection herewith.
"Person" shall mean any individual, partnership, joint
venture, firm, corporation, association, trust, or other enterprise or any
government or political subdivision or any agency, department or instrumentality
thereof.
"UCC" shall mean the Uniform Commercial Code as enacted in the
State of Connecticut.
2. INDEPENDENT LOAN; CROSS-COLLATERALIZATION; SECURITY
INTEREST. Each Equipment Schedule shall constitute a separate, distinct and
independent Loan Agreement and contractual obligation of Customer. As security
for the due and punctual payment of any and all of the present and future
Obligations of Customer to Lender, Customer hereby grants to Lender with respect
to each Loan Agreement and for the full amount of all Obligations, a security
interest in all of the Collateral and all collateral securing any other lease or
security agreement between Customer and Lender, whether now in existence or
hereafter entered into. The extent to which Lender's security interest in any
item of Collateral shall be entitled to purchase money priority shall be
determined by reference to the unpaid principal balance of any Note evidencing
the financing of the purchase price of such item of Equipment.
3. ACCEPTANCE OF EQUIPMENT. The Equipment is to be delivered
and installed (or located, as applicable) at the location specified or referred
to in the applicable Equipment Schedule. The Equipment shall be deemed to have
been accepted by Customer for all purposes under this Agreement upon Customer's
execution of an Equipment Schedule (the "Acceptance Date"). Lender shall not be
liable or responsible for any failure or delay in the delivery of the Equipment
to Customer for whatever reason.
4. TERM; PRINCIPAL AND INTEREST; NO PREPAYMENT; LATE CHARGES.
The term for any Loan Agreement shall be as specified in the applicable
Equipment Schedule. No Loan Agreement is prepayable by Customer, in whole or in
part, without the express written consent of Lender in its sole discretion.
Principal and interest payments shall be in the amounts and shall be due and
payable as set forth in the applicable Equipment Schedule. If any payment of
principal or interest or other amount payable hereunder shall not be paid within
5 days of the date when due, Customer shall pay as an administrative and late
charge an amount equal to 5% of the amount of any such overdue payment. In
addition, Customer shall pay overdue interest on any delinquent payment or other
amounts due under any Loan Agreement (by reason of acceleration or otherwise)
from the due date until paid at the rate of one and one-half percent (1.5%) per
month or the maximum amount permitted by applicable law, whichever is lower. All
payments to be made to Lender shall be made to Lender in immediately available
funds at the address shown above, or at such other place as Lender shall specify
in writing.
5. REPRESENTATIONS, WARRANTIES AND COVENANTS. Customer hereby
represents and warrants to and covenants with Lender (provided that if Customer
is an individual or sole proprietorship, the representations, warranties and
covenants relating to corporate status shall not apply) that, as of the date
hereof and for so long as any Obligations shall remain outstanding:
(a) Customer is duly organized and is existing in good
standing under the laws of its jurisdiction of organization and is duly
qualified and in good standing in those jurisdictions where the conduct of its
business or the ownership of its properties requires qualification;
(b) Customer has the power and authority to own the
Collateral, to enter into and perform this Agreement and any other document or
instrument delivered in connection herewith and to incur the Obligations;
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(c) Customer's chief executive office is located at the
address set forth above;
(d) Customer does not utilize, and has not in the last five
years utilized, any trade names in the conduct of its business except as set
forth on Schedule 1 hereto;
(e) Customer has not changed its name, been the surviving
entity in a merger, acquired any business or changed the location of its chief
executive office within the previous five years, except as set forth on Schedule
2 hereto;
(f) Neither the execution, delivery or performance by Customer
of the Loan Agreement nor compliance by it with the terms and provisions hereof,
nor the consummation of the transactions contemplated herein, (i) will
contravene any applicable provision of any law, statute, rule or regulation, or
any order, writ, injunction or decree of any court or governmental
instrumentality, (ii) will conflict or be inconsistent with or result in any
breach of any of the terms, covenants, conditions or provisions of, or
constitute a default under, or result in any lien upon any property, pursuant to
the terms of any indenture, mortgage, deed of trust, loan agreement or any other
material agreement or instrument to which Customer is a party or by which it or
any of its property or assets are bound or to which it may be subject or (iii)
will violate any provision of its Certificate of Incorporation or By-Laws, or
other governance documents;
(g) The Loan Agreement, the Note and any document or
instrument delivered in connection herewith and the transactions contemplated
hereby or thereby are duly authorized, executed and delivered, and the Loan
Agreement, the Note and such other documents and instruments constitute valid
and legally binding obligations of Customer and are enforceable against Customer
in accordance with their respective terms;
(h) No order, consent, approval, license, authorization, or
validation of, or filing, recording or registration with, or exemption by any
governmental or public body or authority, or any subdivision thereof, is
required to authorize or required in connection with (i) the grant by Customer
of the security interest in connection with the Loan Agreement, (ii) the
execution, delivery and performance of the Loan Agreement, (iii) the legality,
validity, binding effect or enforceability of the Loan Agreement or (iv) the
perfection or maintenance of the aforementioned lien and security interest;
(i) Customer has filed all federal, state and local tax
returns and other reports it is required to file, has paid or made adequate
provision for payment of all such taxes, assessments and other governmental
charges, and shall pay or deposit promptly when due all sales, use, excise,
personal property, income, withholding, corporate, franchise and other taxes,
assessments and governmental charges upon or relating to the manufacture,
purchase, ownership, maintenance, modification, delivery, installation,
possession, condition, use, acceptance, rejection, operation or return of the
Equipment and, upon request by Lender, Customer will submit to Lender proof
satisfactory to Lender that such payments and/or deposits have been made;
(j) Other than approvals of Customer's products by the United
States Food and Drug Administration, there are no pending or threatened actions
or proceedings before any court or administrative agency, an unfavorable
resolution of which could have a material adverse effect on Customer's financial
condition or operations;
(k) No representation, warranty or statement by Customer
contained in the Loan Agreement or in any certificate or other document
furnished or to be furnished by Customer pursuant to the Loan Agreement contains
or at the time of delivery shall contain any untrue statement of material fact,
or omits, or shall omit at the time of delivery, to state a material fact
necessary to make it not misleading;
(l) All financial statements delivered and to be delivered by
Customer to Lender in connection with the execution and delivery of the Loan
Agreement are true and correct in all material respects and have been prepared
in accordance with generally accepted accounting principles, and at all times
since the date of the most recent financial statements, there has been no
material adverse change in Customer's financial affairs or business operations.
Customer shall furnish Lender: (i) within 90 days after the last day of each
fiscal year of Customer, annual financial statements including a balance sheet,
income statement, statement of retained earnings and statement of cash flows,
each prepared in accordance with generally accepted accounting principles
consistently applied with a report signed by nationally recognized independent
certified public accountants or by an independent certified public accountant
otherwise satisfactory to Lender; (ii) upon the request of Lender, within 45
days after the close of each quarter of each fiscal year of Customer, quarterly
financial statements similar to those described in the immediately preceding
clause, prepared by Customer and certified by the chief financial officer of
Customer; (iii) promptly upon the request of Lender, such tax returns or
financial statements regarding any guarantor
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of the as Lender may reasonably request from time to time; (iv) promptly upon
request of Lender, in form satisfactory to Lender, such other and additional
information as Lender may reasonably request from time to time, and; (v)
promptly inform Lender of any Defaults (defined below) or any events or changes
in the financial condition of Customer occurring since the date of the last
financial statements of Customer delivered to Lender which, individually or
cumulatively, when viewed in light of prior financial statements, may result in
a material adverse change in the financial condition of Customer;
(m) Customer shall permit Lender, through its authorized
attorneys, accountants and representatives, to inspect and examine the Equipment
and the books, accounts, records, ledgers and assets of every kind and
description of Customer with respect thereto at all reasonable times upon
reasonable notice; provided, however, that the failure of Lender to inspect the
Equipment or to inform Customer of any noncompliance shall not relieve Customer
of any of its Obligations hereunder;
(n) Customer is the owner of the Equipment free and clear of
all rights, title, security interests, encumbrances or liens of any other party,
will defend the Equipment against all claims and demands of all persons at any
time claiming any interest therein and shall deliver to Lender any and all
evidence of ownership of, and certificates of title to, any and all of the
Equipment;
(o) The Equipment is personal property and not a fixture under
the law of the jurisdiction in which the Equipment is located even though the
Equipment may hereafter become attached or affixed to real property;
(p) Each site where Equipment is located, if not owned by
Customer, is leased by Customer pursuant to a valid lease or rental agreement
which permits the possession, use and operation of the Equipment at such
location;
(q) Customer shall provide Lender with disclaimers and waivers
from landlords, mortgagees and other persons holding any interest or claim in
and to any premises where Equipment is located, acceptable in all respects to
Lender, which may be necessary or advisable in the sole discretion of Lender to
confirm that the first priority security interest and rights of Lender in the
Equipment are and will remain valid and superior against all other parties;
(r) The Equipment is in the possession of Customer at the
location(s) specified in the applicable Equipment Schedule, and shall not be
removed from such location without the prior written consent of Lender, which
consent shall in any event be conditioned upon Customer having completed all
notifications, filings, recordings, and other actions in such new location as
Lender may require to protect and perfect Lender's interests in the Collateral;
(s) Customer shall not sell, offer to sell, lease, rent, hire
or in any other manner dispose, transfer or surrender use and possession of any
Equipment;
(t) Customer will not, directly or indirectly, create, incur
or permit to exist any lien, encumbrance, mortgage, pledge, attachment or
security interest on or with respect to the Equipment other than in connection
with the execution and delivery of the Loan Agreement;
(u) Customer shall permit each item of Equipment to be used
only within the continental United States by qualified personnel solely for
business purposes and the purpose for which it was designed and, at its sole
expense, shall service, repair, overhaul and maintain each item of Equipment in
the same condition as when received, ordinary wear and tear excepted, in good
operating order, consistent with prudent industry practice (but, in no event
less than the same extent to which Customer maintains other similar equipment in
the prudent management of its assets and properties) and in compliance with all
applicable laws, ordinances, regulations, and conditions of all insurance
policies required to be maintained by Customer under the Loan Agreement and all
manuals, orders, instructions and other written requirements as to the repair
and maintenance of such item of Equipment issued at any time by the vendor
and/or manufacturer thereof;
(v) If any item of Equipment does not comply with the
requirements of the Loan Agreement, Customer shall bring such Equipment into
compliance with the provisions hereof; and Customer shall not use any Equipment,
nor allow the same to be used, for any unlawful purpose;
(w) Customer acknowledges that Lender has not selected,
manufactured or supplied the Equipment to Customer and has acquired any
Equipment subject hereto solely in connection with this Loan Agreement and
Customer has
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received and approved the terms of any purchase order or agreement with respect
to the Equipment; and
(x) Customer has all permits, licenses and other
authorizations which are required with respect to its business under
Environmental Laws (as defined below) and is in material compliance with all
terms and conditions of such permits, licenses and other authorizations,
including all limitations, restrictions, standards, prohibitions, requirements,
obligations, schedules and timetables. The Customer is not presently in material
violation of any Environmental Laws. "Environmental Laws" shall mean any
Federal, state or local law relating to releases or threatened releases of
Hazardous Substances; the manufacture, handling, transport, use, treatment,
storage or disposal of Hazardous Substances or materials containing Hazardous
Substances; or otherwise relating to pollution of the environment or the
protection of human health. "Hazardous Substances" shall mean substances or
materials which contain substances defined in or regulated as toxic or hazardous
materials, chemicals, substances, waste or pollutants under any present or
future Federal statutes and their state counterparts, as well as any
implementing regulations as amended from time to time and as interpreted by
administering agencies.
6. DISCLAIMER OF WARRANTIES; LIMITATION OF REMEDY; LIMITATION
OF LIABILITY. Customer has selected both the Equipment and the supplier
(identified in the Equipment Schedule, herein ("Supplier")), from whom Customer
agrees to purchase the Equipment. CUSTOMER ACKNOWLEDGES THAT LENDER HAS NO
SPECIAL FAMILIARITY OR EXPERTISE WITH RESPECT TO THE EQUIPMENT. CUSTOMER AGREES
THAT THE EQUIPMENT IS "AS IS" AND IS OF A SIZE, DESIGN AND CAPACITY SELECTED BY
CUSTOMER AND THAT CUSTOMER IS SATISFIED THAT THE SAME IS SUITABLE FOR CUSTOMER'S
PURPOSES, AND THAT EXCEPT AS MAY OTHERWISE BE SPECIFICALLY PROVIDED HEREIN OR IN
THE EQUIPMENT SCHEDULE, LENDER HAS MADE NO REPRESENTATION OR WARRANTY AS TO ANY
MATTER WHATSOEVER. LENDER DISCLAIMS, AND CUSTOMER HEREBY EXPRESSLY WAIVES AS TO
LENDER, ALL WARRANTIES WITH RESPECT TO THE EQUIPMENT INCLUDING BUT NOT LIMITED
TO ALL EXPRESS OR IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A
PARTICULAR PURPOSE, QUALITY, CAPACITY, OR WORKMANSHIP, ALL EXPRESS OR IMPLIED
WARRANTIES AGAINST PATENT INFRINGEMENTS OR DEFECTS, WHETHER HIDDEN OR APPARENT,
AND ALL EXPRESS OR IMPLIED WARRANTIES WITH RESPECT TO COMPLIANCE OF THE
EQUIPMENT WITH THE REQUIREMENTS OF ANY LAW, REGULATION, SPECIFICATION OR
CONTRACT RELATIVE THERETO. IN NO EVENT SHALL LENDER BE LIABLE (INCLUDING WITHOUT
LIMITATION, UNDER ANY THEORY IN TORTS) FOR ANY LOSS OF USE, REVENUE, ANTICIPATED
PROFITS OR SPECIAL, INDIRECT, INCIDENTAL OR CONSEQUENTIAL DAMAGES ARISING OUT OF
OR IN CONNECTION WITH THE LOAN OR THE USE, PERFORMANCE OR MAINTENANCE OF THE
EQUIPMENT. If the Equipment is not properly installed, does not operate as
represented or warranted by the Supplier, manufacturer and/or service company or
is unsatisfactory for any reason, Customer shall make any claim on account
thereof solely against the Supplier, manufacturer and/or service company and
shall, nevertheless, pay Lender all amounts payable under the Loan Agreement and
any such claims shall not act as a defense, counterclaim, deduction, setoff or
otherwise limit Customer's Obligations under the Loan Agreement.
7. RISK OF LOSS AND DAMAGE; INSURANCE. Customer assumes all
risk of loss, damage or destruction to the Equipment from whatever cause and for
whatever reason. If all or a portion of an item of Equipment shall become lost,
stolen, destroyed, damaged beyond repair or rendered permanently unfit for use
for any reason, or in the event of any condemnation, confiscation, theft or
seizure or requisition of title to or use of such item of Equipment, Customer
shall immediately pay to Lender an amount equal to the outstanding principal
balance of and accrued and unpaid interest on any Note with respect to such
Equipment, less the net amount of the recovery, if any, received by Lender from
insurance on the Equipment. For so long as any Obligations shall remain
outstanding, Customer shall procure and maintain insurance in such amounts and
with such coverages, and upon such terms and with such companies, as Lender may
in good faith approve, at Customer's expense; provided, however, that in no
event shall such insurance be less than the following coverages and amounts: (a)
Worker's Compensation and Employer's Liability Insurance, in the full statutory
amounts provided by law; (b) Comprehensive General Liability Insurance including
product/completed operations and contractual liability coverage, with minimum
limits on a per occurrence basis, as reasonably required by Lender, and Combined
Single Limit Bodily Injury and Property Damage on an aggregate basis, as
reasonably required by Lender or, in either case, as otherwise specified in any
Equipment Schedule hereto; and (c) All Risk Physical Damage Insurance, including
earthquake and flood, on each item of Equipment, in an amount not less than its
full replacement value. Customer shall cause Lender to be included as an
additional insured on each such Comprehensive General Liability Insurance
policy. On each such All Risk Physical Damage Insurance policy Lender shall be
named as loss payee. Such policies shall be endorsed to provide that the
coverage afforded to Lender shall not be rescinded, impaired or invalidated by
any act or neglect of Customer. Customer agrees to waive Customer's rights
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and its insurance carrier's rights of subrogation against Lender for any and all
loss or damage. In addition to the foregoing minimum insurance coverage,
Customer shall procure and maintain such other insurance coverage as Lender may
in good faith require. All policies shall be endorsed or contain a clause
requiring the insurer to furnish Lender with at least 30 days prior written
notice of any material change, cancellation or non-renewal of coverage. Upon
execution of this Agreement, and thereafter, 30 days prior to the expiration of
each insurance policy required hereunder, Customer shall furnish Lender with a
certificate of insurance or other evidence satisfactory to Lender that the
insurance coverages required under such policy are and will continue in effect,
provided, however, that Lender shall be under no duty either to ascertain the
existence of or to examine such insurance coverage or to advise Customer in the
event such insurance coverage should not comply with the requirements hereof. If
Customer shall at any time or times hereafter fail to obtain and/or maintain any
of the policies of insurance required herein, or fail to pay any premium in
whole or in part relating to any such policies, Lender may, but shall not be
obligated to, obtain and/or cause to be maintained insurance coverage with
respect to the Collateral, including, at Lender's option, the coverage provided
by all or any of the policies of Customer and pay all or any part of the premium
therefor, without waiving any Event of Default by Customer, and any sums so
disbursed by Lender shall be additional Obligations of Customer to Lender
payable on demand. From and after any Event of Default, Lender shall have the
right to settle and compromise any and all claims under any of the All Risk
Physical Damage policies required to be maintained by Customer hereunder and
Customer hereby appoints Lender as its attorney-in-fact, with power to demand,
receive and receipt for all monies payable thereunder, to execute in the name of
Customer or Lender or both any proof of loss, notice, draft or other instruments
in connection with such policies or any loss thereunder and generally to do and
perform any and all acts as Customer, but for this appointment, might or could
perform.
8. EVENTS OF DEFAULT. An "Event of Default" under this
Agreement shall be deemed to have occurred upon the occurrence or existence of
any one or more of the following events or conditions (each a "Default") and
after the giving of any required notice or the passage of any required period of
time (or both) specified below with respect to such Default: (a) Customer shall
fail to make any payment due under any Note or as required under the Loan
Agreement within 5 days of its due date; or (b) Customer shall fail to obtain or
maintain any of the insurance required under the Loan Agreement; or (c) Customer
shall remove, sell, transfer, encumber, or part with possession of any
Equipment; (d) Customer shall fail to perform or observe any other covenant,
condition or agreement under the Loan Agreement, and such failure shall continue
for 20 days after notice thereof to Customer; or (e) Customer shall default in
the payment or performance of any Obligation owing to Lender, and such default
shall continue for 20 days after notice thereof to Customer; or (f) any
representation or warranty made by Customer herein or in any certificate,
agreement, statement or document heretofore or hereafter furnished Lender,
including without limitation any financial information (other than projections)
disclosed to Lender, shall prove to be false or incorrect in any material
respect; or (g) death or judicial declaration of incompetence of Customer, if an
individual; or (h) the commencement of any bankruptcy, insolvency, arrangement,
reorganization, receivership, liquidation or other similar proceeding by or
against Customer or any of its properties or businesses, or the appointment of a
trustee, receiver, liquidator or custodian for Customer or any of its properties
or businesses, or if Customer suffers the entry of an order for relief under
Title 11 of the United States Code; or (i) the making by Customer of a general
assignment or deed of trust for the benefit of creditors; or (j) Customer shall
default in any payment or other material obligation to any other lender and such
lender has accelerated the debt in accordance with its terms; or (k) Customer
shall merge with or consolidate into any other entity or sell all or
substantially all of its assets or in any manner terminate its existence; or (l)
if Customer is a privately held corporation, more than 50% of Customer's voting
capital stock, or effective control of Customer's voting capital stock, issued
and outstanding from time to time, is not retained by the holders of such stock
on the date the Loan Agreement is executed; or (m) if Customer is a publicly
held corporation, there shall be a change in the ownership of Customer's stock
such that Customer is no longer subject to the reporting requirements of the
Securities Exchange Act of 1934 or no longer has a class of equity securities
registered under Section 12 of the Securities Act of 1933; or (n) Lender shall
determine that there has been a material adverse change in the financial
condition or business operations of Customer since the date of the execution of
the Loan Agreement, or that Customer's ability to perform its Obligations is
materially impaired; or (o) if Customer leases the premises where any Equipment
is located, a breach by Customer of any such lease and the commencement of an
action by the landlord to evict Customer or to repossess the premises; or (p)
any event or condition set forth in subsections (e) through (o) of this Section
8 shall occur with respect to any guarantor or other person liable or
responsible, in whole or in part, for payment or performance of any Obligations;
or (q) any event or condition set forth in subsections (e) through (o) shall
occur with respect to any Affiliate of Customer. Customer shall promptly notify
Lender of the occurrence of any Event of Default or the occurrence or existence
of any event or condition which, upon the giving of notice or lapse of time, or
both, would constitute an Event of Default.
9. RIGHTS AND REMEDIES; ACCELERATION. (a) Upon the occurrence
of an Event of Default,
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Lender shall have all of the rights and remedies enumerated herein (all of which
are cumulative and not exclusive of any other right or remedy available to
Lender) and Lender may, at its sole option and discretion, exercise one or more
of the following remedies with respect to any or all of the Collateral: (i) by
written notice to Customer, terminate any or all Loan Agreements as such notice
shall specify, and, with respect to such terminated Loan Agreements, declare
immediately due and payable and recover from Customer, as liquidated damages for
loss of Lender's bargain and not as a penalty, an amount equal to the aggregate
of all unpaid periodic installment payments and other sums due under Loan
Agreements to the date of default plus the charges set forth in Section 4
hereof, if any, plus an amount equal to the outstanding principal balances of
and accrued and unpaid interest on any of the Notes with respect to the Loan
Agreements, (ii) Lender may declare, at its option, all or any part of the
Obligations immediately due and payable, without demand, notice of intention to
accelerate, notice of acceleration, notice of nonpayment, presentment, protest,
notice of dishonor, or any other notice whatsoever, all of which are hereby
waived by Customer and any endorser, guarantor, surety or other party liable in
any capacity for any of the Obligations; (iii) cause Customer to promptly ship,
with insurance and freight prepaid by Customer, any or all Equipment to such
location as Lender may designate, or Lender, at its option, may enter upon the
premises where the Equipment is located and take immediate possession of and
remove the same by summary proceedings or otherwise, all without liability to
Lender for or by reason of damage to property or such entry or taking possession
except for Lender's gross negligence or willful misconduct; (iv) sell any or all
Collateral at public or private sale or otherwise dispose of, hold, use,
operate, lease to others or keep idle the Equipment, all as Lender in its sole
discretion may determine and all free and clear of any rights of Customer; (v)
remedy such default, including making repairs or modifications to the Equipment,
for the account and expense of Customer, and Customer agrees to reimburse Lender
for all of Lender's costs and expenses; (vi) apply any Security Deposit or other
cash collateral or sale or remarketing proceeds of the Equipment at any time to
reduce any amounts due to Lender, or (vii) exercise any other right or remedy
which may be available to Lender under applicable law, or proceed by appropriate
court action to enforce the terms hereof or to recover damages for the breach
hereof, including Attorneys' Fees and Expenses. Any notice required to be given
by Lender of a sale or other disposition or other intended action which is made
in accordance with the terms of the Loan Agreement at least seven (7) days prior
to such proposed action, shall constitute fair and reasonable notice to Customer
of any such action. Lender shall be liable to Customer only for its gross
negligence or willful misconduct in failing to comply with any applicable law
imposing duties upon Lender; Lender's liability for any such failure shall be
limited to the actual loss suffered by Customer directly resulting from such
failure; and in no event shall Lender have any liability to Customer for
incidental, consequential, punitive or exemplary damages. No remedy referred to
in this Section 9 shall be exclusive, but each shall be cumulative and in
addition to any other remedy referred to above or otherwise available to Lender
at law or in equity.
(b) The exercise or pursuit by Lender of any one or
more of such remedies shall not preclude the simultaneous or later exercise or
pursuit by Lender of any or all such other remedies, and all remedies hereunder
shall survive termination of the Loan Agreement. In the event Lender takes
possession and disposes of the Collateral, the proceeds of any such disposition
shall be applied in the following order: (1) to all of Lender's costs, charges
and expenses incurred in taking, removing, holding, repairing and selling or
leasing the Equipment; (2) to pay the Lender the remaining amount of any
Obligations owed to Lender and (3) the balance, if any, to Customer. A
termination shall occur only upon written notice by Lender and only with respect
to such Equipment as Lender shall specify in such notice. Termination under this
Section 9 shall not affect Customer's duty to perform Customer's Obligations
under the Loan Agreement in full. Customer agrees to reimburse Lender on demand
for any and all costs and expenses incurred by Lender in enforcing its rights
and remedies hereunder following the occurrence of an Event of Default,
including, without limitation, Attorneys' Fees and Expenses, and the costs of
repossession, storage, insuring, reletting, selling and disposing of any and all
Equipment.
10. INDEMNITY (a) Customer agrees to indemnify, reimburse and
hold Lender and its successors, Affiliates, assigns, officers, directors,
employees, agents and servants (hereinafter in this Section 10 referred to
individually as "Indemnitee", and collectively as "Indemnitees") harmless from
any and all liabilities, obligations, damages, injuries, penalties, claims,
demands, actions, suits, judgments and any and all costs, expenses or
disbursements, including Attorneys' Fees and Expenses of whatsoever kind and
nature imposed on, asserted against or incurred by any of the Indemnitees in any
way relating to or arising out of the Loan Agreement or any other document
executed in connection herewith or therewith or in any other way connected with
the administration of the transactions contemplated hereby or thereby or the
enforcement of any of the terms of, or the preservation of any rights under any
thereof, or in any way relating to or arising out of the manufacture, ownership,
ordering, purchase, delivery, control, acceptance, lease, financing, possession,
operation, condition, sale, return or other disposition, or use of the Equipment
(including, without limitation, latent or other defects, whether or not
discoverable), the violation of the laws of any country, state or other
governmental body or unit, any tort (including, without limitation, claims
arising or imposed under the doctrine of strict liability, or for or on account
of injury to or the death of any Person (including any Indemnitee), or property
damage), or contract claim, or any claim based on patent, trademark or copyright
Page 7 Initial ______/______
8
infringement or any obligation or liability to the manufacturer or supplier of
the Equipment under any Supply Contracts (referenced in the Equipment Schedule),
including purchase orders issued by Customer or Lender or assigned to Lender;
provided, however, that no Indemnitee shall be indemnified pursuant to this
Section 10 for losses, damages or liabilities to the extent caused SOLELY by the
gross negligence or willful misconduct of such Indemnitee. Customer agrees that
upon written notice by any Indemnitee of the assertion of such a liability,
obligation, damage, injury, penalty, claim, demand, action, suit or judgment,
Customer shall assume full responsibility for the defense thereof. Each
Indemnitee agrees to use its best efforts to promptly notify Customer of any
such assertion of which such Indemnitee has knowledge.
(b) Without limiting the application of Section 10(a)
hereof, Customer agrees to pay, or reimburse Lender for any and all reasonable
fees, costs and expenses (including Attorneys' Fees and Expenses) of whatever
kind or nature incurred in connection with the creation, preservation or
protection of Lender's liens on, and security interest in, the Collateral,
including, without limitation, all fees and taxes in connection with the
recording or filing of instruments and documents in public offices, payment or
discharge of any taxes or liens upon or in respect of the Collateral, premiums
for insurance with respect to the Collateral and all other reasonable fees,
costs and expenses in connection with protecting, maintaining or preserving the
Collateral and Lender's interest therein, whether through judicial proceedings
or otherwise, or in defending or prosecuting any actions, suits or proceedings
arising out of or relating to the Collateral.
(c) Customer shall, at its sole cost and expense,
protect, defend, indemnify, release and hold harmless the Indemnitees from and
against any and all Losses imposed upon or incurred by or asserted against any
Indemnitees, and arising out of or in any way relating to any one or more of the
following, unless caused solely by the gross negligence or willful misconduct of
any Indemnitee: (i) any presence of any Hazardous Substances in, on, above or
under Customer's leased or owned real property (the "Property"); (ii) any past,
present or threatened Release of Hazardous Substances in, on, above, under or
from the Property; or (iii) any past or present violation of any Environmental
Laws. The term "Release" of any Hazardous Substance includes, but is not limited
to, any release, deposit, discharge, emission, leaking, spilling, seeping,
migrating, injecting, pumping, pouring, emptying, escaping, dumping, disposing
or other movement of Hazardous Substances. The term "Losses" includes any and
all claims, suits, liabilities (including, without limitation, strict
liabilities), actions, proceedings, obligations, debts, damages, losses, costs,
expenses, diminutions in value, fines, penalties, charges, fees, expenses,
judgments, awards, amounts paid in settlement, costs of remediating a Hazardous
Substance (whether or not performed voluntarily), engineers' fees, environmental
consultants' fees, and costs of investigation (including, but not limited to
sampling, testing and analysis of soil, water, air, building materials and other
materials and substances whether solid, liquid or gas) or punitive damages, of
whatever kind or nature (including, but not limited to Attorneys' Fees and
Expenses).
(d) Without limiting the application of Section 10(a)
or (b), or (c) hereof, Customer agrees to pay, indemnify and hold each
Indemnitee harmless from and against any loss, costs, damages and expenses
(including Attorneys' Fees and Expenses) which such Indemnitee may suffer,
expend or incur in consequence of or growing out of any misrepresentation or
omission of a material fact by Customer in the Loan Agreement or in any writing
contemplated by or made or delivered pursuant to or in connection with the Loan
Agreement.
(e) If and to the extent that the obligations of
Customer under this Section 10 are unenforceable for any reason, Customer hereby
agrees to make the maximum contribution to the payment and satisfaction of such
obligations which is permissible under applicable law.
11. MAINTENANCE; INSPECTION. During the term of the Loan
Agreement, Customer shall, unless Lender shall otherwise consent in writing: (a)
maintain conspicuously on any Equipment such labels, plates, decals or other
markings as Lender may reasonably require, stating that Lender has a security
interest in such Equipment; (b) furnish to Lender such information concerning
the condition, location, use and operation of the Equipment as Lender may
request; (c) permit any person designated by Lender to visit and inspect any
Equipment and any records maintained in connection therewith, provided, however,
that the failure of Lender to inspect the Equipment or to inform Customer of any
noncompliance shall not relieve Customer of any of its obligations hereunder;
and (d) make no additions, alterations, modifications or improvements
(collectively, "Improvements") to any item of Equipment that are not readily
removable without causing material damage to such item of Equipment or which
will cause the value, utility or useful life of such item of Equipment to
materially decline. If any such Improvement is made and cannot be removed
without causing material damage or decline in value, utility or useful life (a
"Non-Severable Improvement"), then Customer warrants that such Non-Severable
Improvement shall immediately become subject to Lender's security interest upon
being installed and shall be free and clear of all liens and encumbrances and
shall become Equipment subject to all of the terms and conditions of the Loan
Agreement.
Page 8 Initial ______/______
9
12. FURTHER ASSURANCES. Customer shall promptly execute and
deliver to Lender such further documents and take such further action as Lender
may require in order to more effectively carry out the intent and purpose of the
Loan Agreement. Customer shall execute and deliver to Lender upon Lender's
request any and all schedules, forms and other reports and information as Lender
may deem necessary or appropriate to respond to requirements or regulations
imposed by any governmental authorities or to comply with the provisions of the
law of any jurisdiction in which Customer may then be conducting business or in
which any of the Equipment may be located. Customer shall execute and deliver to
Lender upon Lender's request such further and additional documents, instruments
and assurances as Lender deems necessary to acknowledge and confirm, for the
benefit of Lender or any assignee or transferee of any of Lender's rights, title
and interests hereunder in accordance with Section 13 hereof (an "Assignee"),
all of the terms and conditions of all or any part of the Loan Agreement and
Lender's or Assignee's rights with respect thereto, and Customer's compliance
with all of the terms and provisions thereof.
13. ASSIGNMENT. The provisions of the Loan Agreement shall be
binding upon and shall inure to the benefit of the heirs, administrators,
successors and assigns of Lender and Customer, provided, however, Customer may
not assign any of its rights, transfer any interest in the Equipment or delegate
any of its obligations under the Loan Agreement without the prior written
consent of Lender in its sole discretion. Lender may, from time to time,
absolutely or as security, without notice to Customer, sell, assign, transfer,
participate, pledge or otherwise dispose of all or any part of a Loan Agreement,
the Obligations and/or the Collateral therefor, subject to the rights of
Customer under the Loan Agreement for the use and possession of the Equipment.
In such event, each and every immediate and successive Assignee shall have the
right to enforce the Loan Agreement with respect to those Obligations and/or
Collateral transferred to the Assignee, by legal action or otherwise, for its
own benefit as fully as if such Assignee were herein by name specifically given
such rights. Customer agrees that the rights of any such Assignee hereunder or
with respect to the related Obligations, shall not be subject to any defense,
set off or counterclaim that Customer may assert or claim against Lender, and
that any such Assignee shall have all of Lender's rights hereunder but none of
Lender's obligations. Lender shall have an unimpaired right to enforce the Loan
Agreement for its benefit with respect to that portion of any Loan Agreement,
Obligations and/or Collateral that Lender has not sold, assigned, pledged or
otherwise transferred.
14. GOVERNING LAW; MEDIATION OF THE LOAN AGREEMENT. THE LOAN
AGREEMENT AND THE LEGAL RELATIONS OF THE PARTIES HERETO SHALL IN ALL RESPECTS BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
CONNECTICUT, WITHOUT REGARD TO PRINCIPLES REGARDING THE CHOICE OF LAW. CUSTOMER
HEREBY CONSENTS AND SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF THE COURTS OF
THE STATE OF CONNECTICUT AND THE FEDERAL DISTRICT COURT FOR THE DISTRICT OF
CONNECTICUT FOR THE PURPOSES OF ANY SUIT, ACTION OR OTHER PROCEEDING ARISING OUT
OF ITS OBLIGATIONS UNDER THE LOAN AGREEMENT, AND EXPRESSLY WAIVES ANY OBJECTIONS
THAT IT MAY HAVE TO THE VENUE OF SUCH COURTS. CUSTOMER HEREBY EXPRESSLY WAIVES
ANY RIGHT TO TRIAL BY JURY IN ANY ACTION BROUGHT ON OR WITH RESPECT TO THE LOAN
AGREEMENT. Any action by Customer against Lender for any cause of action under
the Loan Agreement shall be brought within one year after any such cause of
action first arises. If requested by Lender, Customer agrees that prior to the
commencement of any litigation regarding the terms and conditions of the Loan
Agreement, the parties hereto shall subject themselves to non-binding mediation
with a qualified mediator mutually satisfactory to both parties.
15. NOTICES. Any demand or notice required or permitted to be
given hereunder shall be deemed effective (a) when deposited in the United
States mail, and sent by certified mail, return receipt requested, postage
prepaid, addressed to Lender or to Customer at the addresses set forth herein,
or to such other address as may be hereafter provided by the party to be
notified by written notice complying with the provisions hereof or (b) when
transmitted to Lender or Customer by facsimile at the respective numbers
provided for such purpose; provided, that such facsimile notice is promptly
followed by notice given in accordance with the immediately preceding subsection
(a).
16. MISCELLANEOUS; GENERAL PROVISIONS. The Loan Agreement will
not be binding on Lender until accepted and executed by Lender at its executive
office in McLean, Virginia. All options, powers and rights granted to Lender
hereunder or under any promissory note, guaranty, letter of credit agreement,
depository agreement, instrument, document or other writing delivered to Lender
shall be cumulative and shall be in addition to any other options, powers or
rights which Lender may now or hereafter have under any applicable law or
otherwise. Time is of the essence in the payment and performance of all of
Customer's obligations under the Loan Agreement. The captions in the Loan
Agreement
Page 9 Initial ______/______
10
are for convenience only and shall not define or limit any of the terms thereof.
Any provisions of the Loan Agreement which are unenforceable
in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent
of such unenforceability without invalidating the remaining provisions hereof,
and any such unenforceability in any jurisdiction shall not render unenforceable
such provisions in any other jurisdiction. To the extent permitted by applicable
law, Customer hereby waives any provisions of law which render any provision of
the Loan Agreement unenforceable in any respect.
CUSTOMER ACKNOWLEDGES THAT THE TRANSACTION OF WHICH THIS LOAN
AGREEMENT IS A PART IS A COMMERCIAL TRANSACTION AND EXCEPT AS OTHERWISE PROVIDED
IN THE LOAN AGREEMENT CUSTOMER HEREBY WAIVES, TO THE EXTENT PERMITTED BY
APPLICABLE LAW, NOTICE AND JUDICIAL HEARING IN CONNECTION WITH LENDER'S TAKING
POSSESSION OR LENDER'S DISPOSITION OF ANY OF THE COLLATERAL, INCLUDING, WITHOUT
LIMITATION, ANY AND ALL PRIOR NOTICE AND HEARING FOR ANY PREJUDGMENT REMEDY OR
REMEDIES AND ANY SUCH RIGHT WHICH CUSTOMER WOULD OTHERWISE HAVE UNDER THE
CONSTITUTION OR ANY STATUTE OF THE UNITED STATES OR OF ANY STATE, INCLUDING,
WITHOUT LIMITATION, ITS RIGHTS TO NOTICE AND HEARING UNDER CHAPTER 903A OF THE
CONNECTICUT GENERAL STATUTES.
THE LOAN AGREEMENT AND ANY OTHER WRITTEN AGREEMENT(S) BETWEEN
THE PARTIES EXECUTED SIMULTANEOUSLY HEREWITH, REPRESENT THE FINAL AGREEMENT
BETWEEN THE PARTIES CONCERNING THE SUBJECT MATTER HEREOF, AND SUPERSEDE AND MAY
NOT BE CONTRADICTED BY ANY PRIOR WRITTEN AGREEMENTS BETWEEN THE PARTIES,
INCLUDING, WITHOUT LIMITATION, PROPOSALS, LETTERS, COMMITMENT LETTERS OR BY ANY
PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS BETWEEN THE PARTIES.
CUSTOMER ACKNOWLEDGES AND CERTIFIES THAT NO SUCH ORAL AGREEMENTS EXIST. THE LOAN
AGREEMENT MAY NOT BE AMENDED, NOR MAY ANY RIGHTS UNDER THE LOAN AGREEMENT BE
WAIVED, EXCEPT BY AN INSTRUMENT IN WRITING SIGNED BY THE PARTY AGAINST WHOM SUCH
AGREEMENT OR WAIVER IS ASSERTED. The failure of Lender at any time or times
hereafter to require strict performance by Customer of any of the provisions,
warranties, terms and conditions contained in the Loan Agreement or in any other
agreement, guaranty, note, depository agreement, letter of credit, instrument or
document now or at any time or times hereafter executed by Customer or an
Affiliate of Customer and delivered to Lender shall not waive, affect or
diminish any right of Lender at any time or times hereafter to demand strict
performance thereof. The Loan Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all of which
together shall constitute but one and the same instrument. Each reference herein
to "Lender" shall be deemed to include its successors and assigns, and each
reference to "Customer" and any pronouns referring thereto as used herein shall
be construed in the masculine, feminine, neuter, singular or plural, as the
context may require, and shall be deemed to include the legal representatives,
successors and assigns of Customer, all of whom shall be bound by the provisions
hereof. EACH REFERENCE HEREIN TO "CUSTOMER" SHALL MEAN AND INCLUDE ANY AND ALL
CUSTOMERS WHO SIGN BELOW, EACH OF WHOM SHALL BE JOINTLY AND SEVERALLY LIABLE
UNDER THIS LOAN AGREEMENT.
The Loan Agreement and all related documents, including (a)
amendments, addenda, consents, waivers and modifications which may be executed
contemporaneously or subsequently herewith, (b) documents received by Lender
from the Customer, and (c) financial statements, certificates and other
information previously or subsequently furnished to Lender, may be reproduced by
Lender by any photographic, photostatic, microfilm, micro-card, miniature
photographic, compact disk reproduction or other similar process and Lender may
destroy any original document so reproduced. Customer agrees, herein waives all
right to object to the admissibility of such reproduction and stipulates that
any such reproduction shall, to the extent permitted by law, be admissible in
evidence as the original itself in any judicial or administrative proceeding
(whether or not the original itself is in existence and whether or not the
reproduction was made by Lender in the regular course of business) and that any
enlargement, facsimile or further reproduction of the reproduction shall
likewise be admissible in evidence.
17. SURVIVAL. Sections 6, 7, 9, 10, 11, 13, 15, and 16 shall
survive and continue in full force and effect without regard to the payment in
full of all Obligations under the Loan Agreement.
Executed and delivered by duly authorized representatives of
the parties hereto as of the date set forth below.
Page 10 Initial ______/______
11
LENDER: CUSTOMER:
OXFORD VENTURE FINANCE, LLC AUTOCYTE, INC.
By: /s/ X. X. Xxxxxxxxx By: /s/ Xxxxxxx X. Xxxxx
------------------- --------------------
Name: X. X. Xxxxxxxxx Name: Xxxxxxx X. Xxxxx
--------------- ----------------
Title: President Title: VP & CFO
--------- --------
Date: 12-21-98 Date: 12/21/98
-------- --------
Page 11 Initial ______/______
12
SCHEDULE 1
Trade Names
AutoCyte, Inc. ("Customer") was incorporated in October 1996 to acquire the
cytology and pathology automation business of Roche Image Analysis Systems, Inc.
The acquisition was completed in November of 1996. Prior to the acquisition the
business went by the name of Roche Image Analysis Systems, Inc., or its acronym,
RIAS.
Page 12 Initial ______/______
13
SCHEDULE 2
Name Changes; Changes in Chief Executive Office
AutoCyte, Inc. ("Customer") was incorporated in October 1996 to acquire the
cytology and pathology automation business of Roche Image Analysis Systems, Inc.
("RIAS"), a wholly-owned subsidiary of Roche Holding Ltd. ("Roche"). The
business was acquired from RIAS in November 1996 in exchange for 3.7 million
shares of Customer Common Stock. The acquisition was in the form of asset
purchase.
Customer moved its Executive Office from 000 Xxxxxx Xxxxx, Xxxx Xxxxxxx, Xxxxx
Xxxxxxxx 00000 to 000 Xxxxxxxxxx Xxxxx, Xxxxxxxxxx, Xxxxx Xxxxxxxx 00000 in July
1998.
Page 13 Initial ______/______
14
RIDER TO
MASTER LOAN AND SECURITY AGREEMENT #7404
DATED DECEMBER 21, 1998 (the "Lease")
BETWEEN
OXFORD VENTURE FINANCE, LLC (the "Lender")
AND
AUTOCYTE, INC. (the "Customer")
Notwithstanding anything to the contrary contained herein, Customer has the
option, on a semi-annual basis and upon twenty (20) days written notice to
Lender, to designate specific items of Equipment for replacement and
substitution ("Original Equipment") and to replace such Equipment with other
Equipment ("New Equipment"), provided, however, (i) such New Equipment in
Lender's reasonable opinion has a fair market value equal to or greater than the
Original Equipment, and (ii) Lender has given prior written consent thereto such
consent not to be withheld so long as Customer has met the other requirements of
this Rider, and (iii) the effective date of each such replacement of Original
Equipment for New Equipment shall be as of the next succeeding periodic payment
due date following Lenders consent as provided herein. In the event Lender shall
consent as provided herein, Customer represents and warrants that it shall (A)
at its sole expense and responsibility, lawfully dispose of such Original
Equipment; (B) cause all UCC and other fillings reasonably required by Lender to
be timely and properly filed; (C) amend all Equipment Schedules and such other
documents required by Lender; (D) reimburse Lender for and all out of pocket
expenses incurred in connection with the foregoing, including a reasonable
documentation fee; and (E) indemnify and hold Lender harmless from any and all
claims, actions and liability arising out of or relating to the foregoing.
Dated as of: December 21, 1998
-----------------
OXFORD VENTURE FINANCE, LLC AUTOCYTE, INC.
By: /s/ X. X. Xxxxxxxxx By: /s/ Xxxxxxx X. Xxxxx
-------------------- ---------------------
Name: X. X. Xxxxxxxxx Name: Xxxxxxx X. Xxxxx
--------------- ----------------
Title: President Title: VP & CFO
--------- --------
15
Oxford Venture Finance, LLC
000 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxx 00000
December 21, 1998
Xx. Xxxxxxx X. Xxxxx
Chief Financial Officer
AutoCyte, Inc.
000 Xxxxxxxxxx Xxxxx
Xxxxxxxxxx, XX 00000
Dear Xxxx:
Oxford Venture Finance is pleased to provide the following Loan
commitment to AutoCyte, Inc. which supersedes any prior proposal letter or other
written or verbal communication:
Borrower: AutoCyte, Inc.
Lender: Oxford Venture Finance, LLC/Phoenixcor, Inc.
Equipment: Production, office, computer and other
equipment for the internal use of Borrower
as summarized in Attachment A ("Equipment").
All Equipment must be acceptable to Lender.
Total Loan Amount: $5,000,000
Acceptance Dates: July 1998 through December 1999
Term: Each Schedule shall have a fixed term of 48
months.
Periodicity: Monthly, in advance.
Loan Payment Rate: 2.5902% of the Loan Amount per month, based
on the four-year Treasury Xxxx Weekly
Average rate shown below in Index Basis. The
Loan Payment Rate will be adjusted based on
changes in the Index Basis, as described
under Rate Adjustment.
Index Basis: The four-year Treasury Xxxx Weekly Average
at a rate
16
Xx. Xxxxxxx X. Xxxxx
December 21, 1998
Page 2
of 5.51% as published in Federal Reserve
statistical release H.15 (519) on June 29,
1998.
Payment Commencements: Upon Equipment Schedule acceptances and
funding
Documentation: Loan documentation provided by Oxford
containing terms generally accepted in the
industry and mutually agreeable to both
Oxford and AutoCyte, Inc.
Commitment Fee: Borrower has provided a $20,000 Commitment
Fee to Lender. The Commitment Fee will be
applied to any transaction Costs, if any, as
defined herein, with the remainder applied
to the first payments under the loan
schedules. Should the Borrower decline to
utilize the financing, Lender shall retain
the Commitment Fee as compensation for the
costs of its due diligence.
Rate Adjustment: The effective Loan Rate will remain fixed
for the duration of each Term. Prior to
Schedule funding, Lender will adjust the
Loan Rate in order to maintain its
originally anticipated rate of return if
there is a change in the yield on the U.S.
Treasury Bills, as quoted in the Federal
Reserve statistical release H.15 (519), from
the Index Basis specified in this proposal
letter, by the amount of such change.
Costs: Borrower shall be responsible for all costs
and expenses relating to the transaction,
including, without limitation, attorneys'
fees, appraisal fees, lien search and filing
fees relating to the preparation, execution
and recording of all documents.
Product FDA Approval: Approval by the US Food and Drug
Administration ("FDA") to market and sell
the Borrower's product, AutoCyte PREP, for
primary screening for cervical cancer in the
United States.
Fundings Prior to FDA
Approval: Any fundings under this loan facility prior
to the Product FDA Approval, as defined
above, will contain additional equipment
collateral ("Additional Collateral") with a
fair market value of not less than 50% of
the schedule funding. For items other than
17
Xx. Xxxxxxx X. Xxxxx
December 21, 1998
Page 3
any molds, Borrower may fund 66.6% of
Equipment cost as the Loan Amount in lieu of
the Additional Collateral requirement.
Additional Collateral
Release: After Product FDA Approval, as defined
above, the Additional Collateral relating to
items that are not molds, will be released
and be eligible for funding under the loan
facility. The Additional Collateral relating
to molds on loan schedules, will be released
after the next significant equity funding
event after Product FDA Approval.
Material Changes: If there shall be, in Lender's sole good
faith judgment, (a) a material adverse
change in the financial condition,
properties or operations of Borrower, (b) a
material inaccuracy or omission in the
information provided to Lender regarding the
transaction or a failure to provide
information requested, (c) a material change
in law, regulation or other requirement
which calls into question a basic premise or
assumption underlying Lender's credit
approval or (d) other material change or
disclosure of new information which if
previously known would have resulted in
Lender denying the Loan or issuing a
modified approval, the Lender may terminate
or modify this commitment without any
liability of Lender to Borrower.
Documentation: All documents and legal matters must be
satisfactory in form and substance to Lender
and its counsel. This commitment is not
meant to be an attempt to define all of the
terms and conditions of the transaction.
Additional terms will be contained in
Lender's standard form of documents and
modifications thereto. In addition to
Lender's standard Loan documentation, Lender
may require UCC Financing Statements
(including fixture filings , if applicable),
landlord/mortgagee waivers, certified board
resolutions, consents or other evidence of
authority, intercreditor agreements, legal
opinions and other supplemental documents.
Standard Terms
& Conditions: Lender's standard documents require, among
other
18
Xx. Xxxxxxx X. Xxxxx
December 21, 1998
Page 4
things, as follows: Lender to receive a
first perfected security interest in the
Collateral (where possible); Borrower to
provide all risk physical damage insurance
for the full replacement value of the
collateral, naming Lender as loss payee, and
adding Lender as additional insured to
Borrower's general liability policy;
Borrower to maintain the Collateral;
restrictions on transfer and use of
Collateral; Borrower to provide periodic
financial statements to Lender;
cross-collateral and cross-default to other
Lender accounts with Borrower; Connecticut
governing law and jury waiver.
Expiration: This loan commitment will expire if a signed
copy of this commitment letter is not
received by Oxford by facsimile or mail on
or before December 31, 1998. Following
Borrower's acceptance, Lender's commitment
hereunder and obligation to fund the Loan
shall expire on December 31, 1999.
Oxford Venture Finance welcomes the opportunity to be of service to
AutoCyte, Inc. We look forward to working with you.
Sincerely,
OXFORD VENTURE FINANCE, LLC
/s/ J. Xxxxx Xxxxxxxxx, XX
-------------------------------
J. Xxxxx Xxxxxxxxx, XX
President
ACKNOWLEDGED AND AGREED:
AutoCyte, Inc.
By: /s/ Xxxxxxx X. Xxxxx
---------------------------------
Title: VP & CFO
------------------------------
Date: 12/21/98
-------------------------------
19
Xx. Xxxxxxx X. Xxxxx
December 21, 1998
Page 5
ATTACHMENT A
(details to be supplied by Borrower)
Estimated Categories of Equipment:
Category 1998 Percentage
-------- ---------------
Office Equipment and Furniture 27%
Product Molds 31%
Prototype/Lab Hardware 42%
----
100%
Equipment may include previously acquired assets of up to $1 million.
Equipment assets acquired within the 12 months prior to the date of
this proposal will carry a fair market value equal to the acquisition
price. Equipment assets acquired more than 12 months prior to the date
of this proposal will carry a fair market value to be determined by
Lender.
20
PREPAYMENT INSTRUCTION LETTER
December 21, 1998
AutoCyte, Inc.
000 Xxxxxxxxxx Xxxxx
Xxxxxxxxxx, XX 00000
Gentlemen:
Reference is made to a certain Master Loan and Security Agreement No. 7404,
dated December 21, 1998 ("Contract") and all related Schedules between Oxford
Venture Finance, LLC as Lender (the "Lender") and AutoCyte, Inc., as Borrower
(the "Borrower").
Notwithstanding contrary provisions in the Contract, provided that the Borrower
is not then in default under the Contract, and has timely paid at least the
first twelve (12) monthly payments due under the Schedule Borrower shall have
the right, upon at least thirty (30) days prior written notice to the Lender, to
prepay the Schedule on the periodic installment due date designated in such
notice by paying to the Lender the sum of (i) the then outstanding principal
balance of the Schedule (calculated on a simple interest basis) plus (ii) a
premium of 6.0% during Year 2, a premium of 5.0% during Year 3 and a premium of
4.0% during Year 4. The premium applicable will be calculated on the then
outstanding principal balance. Year 2 will mean the period consisting of the
13th through the 24th installments under the Schedule and subsequent years will
refer to the subsequent twelve monthly payment periods.
Very truly yours,
OXFORD VENTURE FINANCE, LLC
BY: /s/ X. X. Xxxxxxxxx
-----------------------
AGREED TO:
AutoCyte, Inc.
--------------
/s/ Xxxxxxx X. Xxxxx
---------------------
