Exhibit 10.11
LOAN AGREEMENT
THIS LOAN AGREEMENT (this "Agreement") dated as of June 14, 1999 is
made by Scott Chappel (the "BORROWER"), residing at 125 Canton Avenue, Milton,
Massachusetts 02186, in favor of Dyax Corp. ("DYAX"), a Delaware corporation
with its principal place of business at One Kendall Square, Building 600,
Cambridge, Massachusetts 02139.
RECITALS
A. The Borrower desires to borrow $100,000 from Dyax in order to
refinance an existing loan from Borrower's former employer and for the
Borrower's other purposes.
B. Dyax is willing to make the Loan (as defined below) upon the
condition, among others, that the Borrower enter into this Agreement and, if
requested by Dyax, grant the security interest described in the Security
Agreement (as defined below) to secure the Liabilities (as defined in Section
10 hereof).
NOW, THEREFORE, for and in consideration of the premises and the Loan
made by Dyax and other good and valuable consideration, the receipt of which is
hereby acknowledged, and intending to be legally bound hereby, the parties
hereby agree as follows:
1. LOAN. Subject to the terms hereof, Dyax will make, on or after the
date hereof, a loan (the "LOAN") to the Borrower in the aggregate principal
amount of $100,000 (the "LOAN AMOUNT"). The Loan shall be payable in accordance
with the terms of the Note (as defined below).
2. NOTE. The Loan shall be evidenced by a promissory note of the
Borrower in the original principal amount of the Loan Amount (the "Note"),
payable to Dyax in accordance with its terms, such Note to be substantially
in the form of EXHIBIT A attached hereto. The Note shall be dated the date of
the Loan and shall have the blanks therein appropriately completed.
3. INTEREST RATE. The Loan shall bear interest on the outstanding
principal amount thereof at a percentage rate per annum equal to the Prime Rate,
plus one percent (1%); PROVIDED, HOWEVER, that in no event shall the amount
contracted for and agreed to be paid by the Borrower as interest on this Note
(i) exceed the highest lawful rate permissible under any law applicable hereto,
or (ii) fall below the applicable federal rate necessary to avoid imputation of
interest under sections 1274 or 7872 of the Internal Revenue Code of 1986 (or
corresponding provisions of subsequent laws), as amended. For purposes of this
Note, "Prime Rate" refers to the rate of interest as published from time to time
in The Wall Street Journal (Eastern United States edition), or the highest such
rate if more than one is published, or in the event that such rate is not so
published, the prime rate (or equivalent) as announced from time to time by
Fleet Bank, N.A.
or its successors.
4. FORGIVENESS OF PRINCIPAL AND INTEREST. Upon each anniversary of the
Borrower's first date of employment with Dyax, and so long as such employment
continues, $20,000 of the principal of the Loan, plus all accrued interest
thereon up to the anniversary date, shall be
1
forgiven; and upon Borrower's death or permanent disability the remaining
principal of the Loan plus all accrued interest thereon shall be forgiven in
full. Borrower understands and agrees that such forgiven amounts shall be deemed
to be taxable income to Borrower, for which additional tax withholding by Dyax
may be required.
5. CONDITIONS PRECEDENT TO LOAN. The obligation of Dyax to make the
Loan is subject to the condition precedent that Dyax shall have received, in
form and substance satisfactory to Dyax and its counsel, the following:
(a) this Agreement and the Note, duly executed by the Borrower; and
(b) such other documents, and completion of such other matters, as
Dyax may deem necessary or appropriate.
6. SECURITY INTEREST. To secure the prompt, punctual, and faithful
performance of all and each of the present and future Liabilities of the
Borrower to Dyax, Dyax may, at any time, in its discretion, require the
Borrower to execute an Investment Property Security Agreement in the form
previously provided to the Borrower or such form as Dyax may require (the
"Security Agreement"). Pursuant to such Security Agreement, the Borrower
shall grant to Dyax a security interest in and to one or more accounts of
Borrower containing marketable securities and other financial assets as more
particularly described in the Security Agreement having an aggregate market
value of at least 125% of the outstanding balance of the Loan ("COLLATERAL").
In addition, in the event that Dyax shall require the Borrower to execute such
Security Agreement, to provide for control of the Collateral and to perfect
the security interest of Dyax in the Collateral, Borrower shall execute one
or more Account Control Agreements in such form as Dyax may require (the
"Account Control Agreements").
7. BORROWER'S REPRESENTATIONS. The Borrower hereby represents, warrants
and covenants as follows:
(a) The Borrower has the full power, authority and legal right
to enter into this Agreement to be bound hereby and to perform and observe the
terms and conditions hereof, and is in compliance with all applicable material
laws, rules and regulations.
(b) This Agreement has been duly executed and delivered by the
Borrower and constitutes the legal, valid and binding obligation of the Borrower
enforceable against him in accordance with its terms, subject, as to the
enforcement of remedies, to applicable bankruptcy, reorganization, insolvency
and similar laws affecting creditors' rights generally and to moratorium laws
from time to time in effect and to general principles of equity.
(c) The execution, delivery and performance by the Borrower of
this Agreement does not and will not (i) violate or constitute a default under
any provision of any agreement, note or instrument which is binding upon the
Borrower or by which his properties are bound or materially affected, or any
law, rule or regulation, order writ, injunction or decree of any court or
governmental instrumentality or any contractual restriction binding on the
Borrower, or (ii) require any filing with or consent or other act by or in
respect of any governmental authority or other person or entity (other than the
filing of the appropriate number of UCC-1 financing statements covering the
Pledged Securities, if necessary, and any consent
2
obtained by the Borrower prior to the date hereof) or (iii) constitute a default
thereunder or result in the imposition or require the creation of any lien or
charge (other than those created, continued or otherwise contemplated hereby)
upon the assets of the Borrower.
8. DEFAULT. Upon the occurrence of a Default, any and all
Liabilities of the Borrower to Dyax shall become immediately due and payable
at the option of Dyax and without further notice or demand, in addition to
which Dyax may exercise Dyax's rights and remedies upon Default, as set forth
in the Note and, if applicable, the Security Agreement. For purposes of this
Agreement, a "Default" under this Agreement shall mean any of the following
events: (i) an Event of Default under the Note or, if applicable, the
Security Agreement, (ii) any representation or warranty made by the Borrower
in this Agreement being untrue in any material respect when made, or (iii)
failure of the Borrower to observe or perform any other covenant, agreement
or other term of this Agreement and the continuation of such failure without
it having been duly cured for a period of thirty (30) days after written
notice thereof given by Dyax to the Borrower.
9. CUMULATIVE REMEDIES. The rights, remedies, powers, privileges, and
discretions of Dyax hereunder (hereinafter, "DYAX'S RIGHTS AND REMEDIES") shall
be cumulative and not exclusive of any rights or remedies which it otherwise may
have. No delay or omission by Dyax in exercising or enforcing any of Dyax's
Rights and Remedies shall operate as, or constitute, a waiver thereof. No waiver
by Dyax of any Default or of any default under any other agreement shall operate
as a waiver of any other default hereunder or under any other agreement. No
exercise of any of Dyax's Rights and Remedies and no other agreement or
transaction of whatever nature entered into between Dyax and the Borrower at any
time shall preclude any other exercise of Dyax's Rights and Remedies. No waiver
by Dyax of any of Dyax's Rights and Remedies on any one occasion shall be deemed
a waiver on any subsequent occasion, nor shall it be deemed a continuing waiver.
All of Dyax's Rights and Remedies and all of Dyax's rights, remedies, powers,
privileges, and discretions under any other agreement or transaction are
cumulative and not alternative or exclusive and may be exercised by Dyax at such
time or times and in such order of preference as Dyax in its sole discretion may
determine.
10. DEFINITION OF LIABILITIES. "LIABILITIES" shall mean (i) all
indebtedness, obligations and liabilities of the Borrower, whether of principal,
interest, fees, expenses or otherwise, now existing or hereafter contracted or
incurred under or in connection with the Loan and any and all extensions,
renewals, refinancings and refunding of any such indebtedness in whole or in
part, (ii) all costs and expenses incurred by Dyax in the collection of any of
such Borrower indebtedness, including without limitation reasonable attorneys'
fees and legal expenses, and (iii) all future advances made by Dyax for the
protection or preservation of the Collateral or any portion thereof.
11. WAIVERS BY BORROWER. The Borrower
(a) waives presentment, demand, notice, and protest
with respect to the Liabilities and the Collateral; and
(b) waives any delay on the part of Dyax; and
3
(c) assents to any indulgence or waiver which Dyax may grant
or give to the Borrower or any other person liable or obliged to Dyax for or on
the Liabilities; and
(d) agrees that no release of any property securing the
Liabilities shall affect the rights of Dyax with respect to the Collateral
hereunder; and
(e) if entitled thereto, waives the right to notice and/or
hearing prior to Dyax's exercising of Dyax's rights and remedies hereunder upon
default.
12. BINDING AGREEMENT. This Agreement shall be binding upon the
Borrower and upon the Borrower's representatives, successors, and assigns, and
shall enure to the benefit of Dyax and its successors and assigns.
13. COMPLETE AGREEMENT. This Agreement and all other instruments
executed in connection herewith incorporate all discussions and negotiations
among Dyax and the Borrower concerning the matters included herein and in such
other instruments. No such discussions or negotiations shall limit, modify, or
otherwise affect the provisions hereof. No modification, amendment, or waiver of
any provision of this Agreement shall be effective unless executed in writing by
the party to be charged with such modification, amendment and waiver, and if
such party be Dyax, then by a duly authorized officer thereof other than the
Borrower.
14. USE OF ORIGINALS. This Agreement and all other documents in
Dyax's possession which relate to the Liabilities may be reproduced by Dyax
by any photographic, photostatic, microfilm, micro-card, miniature
photographic, xerographic, or similar process, and, with the exception of
instruments constituting the Collateral, if any, Dyax may destroy the
original from which any document was so reproduced. Any such reproduction
shall be admissible in evidence as the original itself in any judicial or
administrative proceeding (whether or not the original is an existence and
whether or not such reproduction was made in the regular course of business)
and any enlargement, facsimile, or further reproduction shall likewise be
admissible in evidence.
15. NOTICES. All notices, requests, demands and other communications to
be given pursuant to this Agreement shall be in writing and shall be deemed to
have been duly given if delivered by hand or overnight courier or mailed by
registered or certified mail, return receipt requested, postage prepaid,
addressed to the party to receive notice at its or his respective address set
forth in the first paragraph of this Agreement or such other address as such
party shall have designated by notice in writing to the other party in
accordance with this section.
16. GOVERNING LAW. This Agreement, and all rights and obligations
hereunder, including matters of construction, validity, and performance, shall
be governed by the laws of the Commonwealth of Massachusetts. The Borrower
submits to the jurisdiction of the courts of said Commonwealth for all purposes
with respect to this Agreement and the Borrower's relationships with Dyax.
17. SEALED INSTRUMENT. It is intended that this Agreement take effect
as a sealed instrument.
4
IN WITNESS WHEREOF, the undersigned has executed the foregoing Loan
Agreement as of the date first above written.
/s/ Scott Chappel
--------------------------------------
Scott Chappel, individually
5
EXHIBIT A
SECURED PROMISSORY NOTE
$100,000 Cambridge, Massachusetts
June 14, 1999
For value received, the undersigned Scott Chappel of Milton,
Massachusetts 02186 (the "Borrower"), promises to pay to Dyax Corp. ("Dyax"),
the principal sum of one hundred thousand dollars ($100,000), with interest
on the unpaid principal balance at the Prime Rate, plus one percent (1%);
PROVIDED, HOWEVER, that in no event shall the amount contracted for and
agreed to be paid by the Borrower as interest on this Note (i) exceed the
highest lawful rate permissible under any law applicable hereto, or (ii) fall
below the applicable federal rate necessary to avoid imputation of interest
under sections 1274 or 7872 of the Internal Revenue Code of 1986 (or
corresponding provisions of subsequent laws), as amended. For purposes of
this Note, "PRIME RATE" refers to the rate of interest as published from time
to time in The Wall Street Journal (Eastern United States edition), or the
highest such rate if more than one is published, or in the event that such
rate is not so published, the prime rate (or equivalent) as announced from
time to time by Fleet Bank, N.A. or its successors. Interest shall accrue
from the date hereof on the unpaid principal balance. The principal amount of
this note plus all accrued and unpaid interest thereon shall be due and
payable in full on June 13, 2004. Except as otherwise agreed to by the
Borrower and the holder, payments of principal and interest shall be made in
lawful money of the United States of America at the principal office of Dyax
in Massachusetts, or by check mailed to such other place as the holder hereof
shall designate.
This note shall become due and payable (i) immediately upon termination
of Borrower's employment with Dyax for cause and (ii) within 30 days after
termination of Borrower's employment with Dyax for any other reason. For
purposes of this note, "cause" shall mean the gross neglect in the performance
of Borrower's duties or the commission of an act of dishonesty or moral
turpitude in connection with Borrower's employment, as determined by the Board
of Directors of Dyax.
If there occurs a default in the performance of any of the terms,
agreements, covenants or conditions contained in this note, the Security
Agreement (as defined below) or the Loan Agreement of even date herewith or any
other documents now or hereafter executed as security for this note
(collectively, the "Loan Documents") continuing beyond, in each case, any
applicable grace period as may be provided therein for the payment of such
amount or the performance of such term, agreement, covenant or condition, then
at the option of the holder of this note the entire indebtedness evidenced
hereby, with interest accrued thereon, if any, shall become due and payable, and
no omission on the part of the holder hereof to exercise such option when
entitled to do so shall be construed as a waiver of such right so long as such
default shall remain uncured.
The unpaid balance hereof may be paid in part or in full at any time
without penalty. All prepayments shall be applied first to the payment of
interest.
6
This note is secured by a certain Investment Property Security
Agreement (the "Security Agreement") granted by the Borrower in favor of Dyax.
Dyax by its acceptance hereof, shall be entitled to the benefits, and subject to
the terms, of the Security Agreement.
If the Borrower conveys, transfers, assigns, encumbers, pledges or
otherwise disposes of any legal or beneficial interest in the securities pledged
as collateral for this note pursuant to the Security Agreement or any part
thereof without Dyax's prior written consent, Dyax may, at its option, require
immediate payment of the entire indebtedness evidenced hereby, with accrued
interest thereon, if any, as provided herein.
The undersigned agrees to pay, upon maturity (by acceleration or
otherwise), costs of collection, including reasonable attorneys' fees.
No delay or omission on the part of the holder in exercising any right
hereunder shall operate as a waiver of such right or of any other right of such
holder; nor shall any delay, omission or waiver on any occasion be deemed a bar
to or waiver of the same or any other right on any future occasion. The
undersigned and every indorser or guarantor of this note regardless of the time,
order or place of signing waives presentment, demand, protest and notices of
every kind and assents to any one or more extensions or postponements of the
time of payment or any other indulgences, to any substitutions, exchanges or
releases of collateral if at any time there be available to the holder
collateral for this note, and to the additions or releases of any other parties
or persons primarily or secondarily liable.
All rights and obligations hereunder shall be governed by and construed
in accordance with the law of the Commonwealth of Massachusetts and this note
shall be deemed to be under seal.
----------------------------
Scott Chappel, individually
7