LOAN AGREEMENT
THIS LOAN AGREEMENT (this "AGREEMENT") is entered into as of
December 23, 1998 by and between AURORA BIOSCIENCES CORPORATION, a Delaware
corporation (the "COMPANY"), and XXXXXX X. XXXXXXX, an individual (the
"EMPLOYEE").
WHEREAS, the Employee has agreed to serve as Senior Vice President,
Strategic Operations, of the Company;
WHEREAS, the Employee has requested that the Company make a loan to
the Employee of up to Sixty Thousand Dollars ($60,000); and
WHEREAS, the Company has agreed to provide the Employee with the
loan as a portion of the consideration for the Employee's services as an
employee of the Company.
NOW, THEREFORE, the parties hereto agree as follows:
1. LOAN. The Company shall lend to the Employee an aggregate of
Sixty Thousand Dollars ($60,000) upon the terms and conditions, and in
reliance upon the representations and warranties, contained herein (the
"LOAN").
2. METHOD OF FUNDING. The Loan proceeds shall be advanced to the
Employee by a check payable to the Employee.
3. PROMISSORY NOTE. The Loan shall be made pursuant to that
certain Promissory Note Secured By Deed of Trust dated the date hereof, in
the stated principal amount of $60,000, in the form attached as EXHIBIT A
(the "NOTE"). The Employee shall execute the Note concurrently with the
execution of this Agreement. All repayments of principal with respect to the
Loan shall be evidenced by notations made by the Company on the Note;
PROVIDED, HOWEVER, that the failure by the Company to make such notations
shall not limit or otherwise diminish the obligations of the Employee with
respect to the Note, including, without limitation, the repayment of
principal or payments of interest or other amounts, if any, on the Loan.
4. INTEREST FREE LOAN. The Company and the Employee agree that,
so long as Employee is not in default under the Note, the Loan shall not bear
interest.
5. DEED OF TRUST. The Employee hereby agrees to secure the Loan
by executing a deed of trust granting a second lien on Employee's principal
residence located at 000 Xxxxxxx Xxxx, Xxxxxxxxx, in the County of San Diego,
California (the "PROPERTY"), in the form attached hereto as EXHIBIT B (the
"DEED OF TRUST"), which Deed of Trust shall be executed concurrently herewith
by Employee and Employee's spouse and shall be duly recorded in the official
records of the County of San Diego, California. Upon such recordation of the
Deed of Trust, the Employee
hereby represents and warrants that, at such time, the Deed of Trust shall
remain a second lien on the Property, junior only to a Deed of Trust securing
a note in the stated principal amount $618,300.00 which has been recorded in
the official records of San Diego County, California. The Employee covenants
and agrees to promptly execute and deliver all such instruments, agreements
or other documents as the Company shall reasonably require to obtain the full
benefits of this Agreement.
6. REPAYMENT OF PRINCIPAL; ANNUAL REDUCTION OF PRINCIPAL. The
outstanding principal amount of the Loan shall become due and payable in a
single payment immediately upon the earliest to occur of (the "Maturity
Date"): (i) January 1, 2003; (ii) the sale or other transfer of any interest
in the Property; or (iii) the business day prior to the six-month anniversary
of any termination, for any reason, of Employee's employment with the
Company. Notwithstanding the foregoing, the Company agrees that, on each of
December 31, 1999, December 31, 2000, December 31, 2001 and December 31,
2002, the principal amount of the Loan shall be reduced (but not below $0.00)
by an amount equal to $15,000, PROVIDED that Employee's employment with the
Company has not been terminated prior to each such date. Employee agrees
that, as consideration for such reductions in principal, any
performance-based bonus that Employee might otherwise be eligible to receive
under the Company's Performance Bonus Plan with respect to each of the
calendar years 1999, 2000, 2001 and 2002 shall be reduced by fifty percent
(50%), up to a maximum reduction of $10,000 for each such calendar year.
7. PREPAYMENT. The Employee may prepay the unpaid principal in
whole or in part, without penalty, at any time.
8. ITEMIZATION OF DEDUCTIONS. The Employee represents and
warrants to the Company that he reasonably expects to be entitled to, and
will, if so entitled, itemize deductions for each year the Loan is
outstanding.
9. NON-TRANSFERABLE. Neither this Agreement nor the rights
hereunder may be assigned by the Employee without the Company's prior written
consent.
10. GENERAL PROVISIONS.
(a) This Agreement shall be governed by the laws of the
State of California applicable to contracts made and performed in such state,
without regard to principles of conflicts of laws.
(b) This Agreement and its Exhibits constitute the entire
agreement between the Employee and the Company, and is the complete, final,
and exclusive embodiment of their agreement with regard to this subject
matter. The Employee and the Company each acknowledge
and represent that this Agreement is entered into without reliance on any
promise or representation other than those expressly contained herein and
that this Agreement cannot be modified except in a writing signed by both
parties.
(c) Except as otherwise specified herein, any notice, demand
or request required or permitted to be given by either the Company or the
Employee pursuant to the terms of this Agreement shall be in writing and
shall be deemed given when delivered personally, three days after being
deposited in the U.S. Mail, registered mail, return receipt requested,
postage prepaid, or one business day after delivery to an overnight carrier
service and addressed to the Company at its then current principal office and
to the Employee at the address listed for him on the Company's payroll.
(d) Either party's failure to enforce any provision or
provisions of this Agreement shall not in any way be construed as a waiver of
any such provision or provisions, nor prevent that party thereafter from
enforcing each and every other provision of this Agreement. The rights
granted both parties herein are cumulative and shall not constitute a waiver
of either party's right to assert all other legal remedies available to it
under the circumstances.
(e) the Employee agrees upon request to execute any further
documents or instruments necessary or desirable to carry out the purpose or
intent of this Agreement.
(f) In the event of any litigation concerning this
Agreement, the prevailing party shall be entitled to a reasonable sum for
attorneys' fees, costs, and litigation expenses, whether or not such action
is prosecuted to judgment. "Prevailing Party" includes, without limitation, a
party who agrees to dismiss an action upon payment by the other party of sums
allegedly due or performance of the covenants allegedly breached, or who
obtains substantially the relief sought by that party. In the event that the
Company is the Prevailing Party, the Company shall also be entitled to
reasonable costs associated with the collection of the Loan.
(g) This Agreement may be executed in counterparts, each of
which shall be an original, but all of which together shall constitute one
instrument.
IN WITNESS WHEREOF, the parties have duly executed this Agreement as of
the day and year first set forth above.
AURORA BIOSCIENCES CORPORATION
By: /s/ XXXXXXX X. XXXX
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Xxxxxxx X. Xxxx, M.D., Sc.D.
Chairman, Chief Executive Officer & President
/s/XXXXXX X. XXXXXXX
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XXXXXX X. XXXXXXX
EXHIBIT A
PROMISSORY NOTE
DO NOT DESTROY THIS NOTE: WHEN PAID, THIS NOTE AND THE DEED OF
TRUST SECURING IT MUST BE SURRENDERED TO TRUSTEE FOR
CANCELLATION BEFORE RECONVEYANCE WILL BE MADE.
PROMISSORY NOTE SECURED
BY SECOND DEED OF TRUST
December 23, 1998
FOR VALUE RECEIVED, XXXXXX X. XXXXXXX, an individual ("Maker"),
promises to pay AURORA BIOSCIENCES CORPORATION, A DELAWARE CORPORATION
("Holder") at 00000 Xxxxxxxxx Xxxx, Xxx Xxxxx, Xxxxxxxxxx, 00000, or such
other place as Holder may from time to time designate, in lawful money of the
United States, the principal sum SIXTY THOUSAND DOLLARS AND NO CENTS
($60,000.00), together with any interest or other amounts due thereon (the
"Loan"), payable in the manner set forth below and in accordance with the
terms and conditions of that certain Loan Agreement of even date herewith
between Holder and Maker (as such may from time to time be amended, modified,
restated or supplemented, the "Loan Agreement"):
11. PRINCIPAL REPAYMENT/MATURITY DATE. Principal shall be due and
payable in full on the Maturity Date, which date shall be determined pursuant
to the Loan Agreement. Other repayments of principal shall be due and payable
in accordance with the Loan Agreement.
12. PREPAYMENT. This Note may be prepaid in whole or in part, at
any time, without penalty or premium, on any date prior to the Maturity Date.
13. PAYMENTS/ADMINISTRATION. Any amounts payable hereunder shall
be due and payable without set-off, deduction, or counterclaim, except as
otherwise provided herein. The Loan, and all repayments and reductions of
principal and interest, if any, shall be evidenced by notations made by
Holder in its books and records regarding the date and amount of each payment
or reduction of principal and interest made by Maker with respect thereto;
PROVIDED, HOWEVER, that the failure by Holder to make such notations shall
not limit or otherwise diminish the obligations of Maker with respect to the
repayments or reductions of principal or payments of interest, if any, on the
Loan. The aggregate unpaid amount of the Loan set forth on the books and
records of Holder shall be presumptive evidence of the principal amount owing
an unpaid hereunder.
14. SECURITY. This Note is secured by a second deed of trust of
even date herewith from Maker and Xxxxxxxx Xxxxxxx ("Spouse"), as trustor,
naming Holder as beneficiary (the "Deed of Trust"), granting a security
interest in certain real property located in the City of Encinitas, County of
San Diego, California, as more particularly described therein (the
"Property"). Maker hereby represents and warrants that, after giving effect
to Maker's purchase of the Property, Maker and Spouse will be the sole and
lawful fee owner of the Property.
15. DEFAULT AND REMEDIES.
(a) DEFAULT. Maker will be in default under this Note upon
the occurrence of any one or more of the following events: (i) the failure of
Maker to make any payment required hereunder when due, (ii) the breach by
Maker of any other covenant or agreement under this Note, (iii) the default
by Maker of its obligations under the Deed of Trust, the Loan Agreement, or
any other instrument evidencing or securing this Note, (iv) the default by
Maker of its obligations under any mortgage, deed of trust, encumbrance or
lien respecting the Property, which encumbrance is senior to the Deed of
Trust, (v) the appointment of a receiver for any part of the property of, or
an assignment for the benefit of creditors by, or the commencement of any
proceedings under any bankruptcy or insolvency laws by or against any maker,
endorser or guarantor, or (vi) the transfer, directly or indirectly, of all
or any part of any interest in the Property, whether by sale, lease,
assignment, mortgage or otherwise, voluntarily or involuntarily.
(b) REMEDIES. Upon Maker's default, Holder may, with notice
to Maker, declare the entire principal sum and any amounts due thereon
immediately due and payable and exercise any and all of the remedies provided
under the Deed of Trust or at law or in equity.
(c) DEFAULT INTEREST. If any amount payable hereunder shall
not be paid within forty-five (45) days after the Maturity Date, at the
option of Holder, the unpaid principal balance shall immediately begin to
accrue interest at a rate of 8.0%, and Holder shall have all remedies
available to it by law as a creditor hereunder.
16. WAIVERS. Maker, and any endorsers or guarantors hereof,
severally waive diligence, presentment, protest and demand and also notice of
protest, demand, dishonor, acceleration, intent to accelerate, and nonpayment
of this Note, and expressly agree that this Note, or any payment hereunder,
may be extended from time to time without notice, and consent to the
acceptance of further security or the release of any security for this Note,
all without in any way affecting the liability of Maker or any endorsers or
guarantors hereof. No extension of time for the payment of this Note, or any
installment hereof, agreed to by Holder with any person now or hereafter
liable for the payment of this Note, shall affect the original liability of
Maker under this Note, even if Maker is not a party to such agreement.
17. MAXIMUM LEGAL RATE OF INTEREST. All agreements between Maker
and Holder, whether now existing or hereafter arising, are hereby limited so
that in no event shall the interest charged hereunder or agreed to be paid to
Holder exceed the maximum amount permissible under applicable law. Holder
shall be entitled to amortize, prorate and spread throughout the full term of
this Note all interest paid or payable so that the interest paid does not
exceed the maximum amount permitted by law. If Holder ever receives interest
or anything deemed interest in excess of the maximum lawful amount, an amount
equal to the excessive interest shall be applied to the reduction of the
principal, and if it exceeds the unpaid balance of principal hereof, such
excess shall be refunded to Maker. If interest otherwise payable to Holder
would exceed the maximum lawful amount, the interest payable shall be reduced
to the maximum amount permitted under applicable law. This paragraph shall
control all agreements between Maker and Holder in connection with the
indebtedness evidenced hereby.
18. NOTICE. All notices or other communications required or given
hereunder shall be in writing and shall be deemed given when delivered
personally, three days after being deposited in the U.S. Mail, registered
mail, return receipt requested, postage prepaid, or one business day after
delivery to an overnight carrier service and addressed to Holder at its then
current principal office and to Maker at the address listed for him in the
Company's payroll records.
19. MISCELLANEOUS.
(a) Maker shall pay all costs, including, without
limitation, reasonable attorneys' fees incurred by Holder in collecting the
sums due hereunder or in connection with the release of any security for this
Note.
(b) This Note may be modified only by a written agreement
executed by Maker and Holder.
(c) This Note shall be governed by California law without
regard to principals of conflicts of laws.
(d) Time is of the essence with respect to all matters set
forth in this Note.
(e) The terms of this Note shall inure to the benefit of and
bind Maker and Holder and their respective heirs, legal representatives and
successors and assigns.
(f) If this Note is destroyed, lost or stolen, Maker will
deliver a new note to Holder on the same terms and conditions as this Note
with a notation of the unpaid principal in substitution of the prior Note.
Holder shall furnish to Maker reasonable evidence that the Note was
destroyed, lost or stolen and any security or indemnity that may be
reasonably required by Maker in connection with the replacement of this Note.
(g) If any provision of this Note shall be held to be
invalid or unenforceable, such determination shall not affect the remaining
provisions of this Note.
(h) If this Note is now, or hereinafter shall be, signed by
more than one party or person, it shall be the joint and several obligation
of such parties or persons and shall be binding upon such parties and upon
their respective successors and assigns.
(i) In the event an action is commenced to interpret or
enforce this Note or to collect any sums due hereunder, the prevailing party
shall be entitled to receive from the other party, attorneys' fees and costs
as determined by the court in which such action is pending.
IN WITNESS WHEREOF, Maker has executed this Note as of the date and
year first above written.
MAKER:
/s/ XXXXXX X. XXXXXXX
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XXXXXX X. XXXXXXX
