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EXHIBIT 10.4
SILICON VALLEY BANK
LOAN AND SECURITY AGREEMENT
BORROWER: IMMUSOL, INC.
ADDRESS: 3050 SCIENCE PARK DRIVE
SAN DIEGO, CALIFORNIA 92121
DATE: APRIL 3, 1996
THIS LOAN AND SECURITY AGREEMENT is entered into on the above date between
SILICON VALLEY BANK ("Silicon"), whose address is 3003 Tasman Drive, Santa
Clara, California 95054 and the borrower named above (the "Borrower"), whose
chief executive office is located at the above address ("Borrower's Address").
1. LOANS.
1.1 LOANS. Silicon, in its reasonable discretion, will make loans
to the Borrower (the "Loans") in amounts determined by Silicon in its reasonable
discretion up to the amount (the "Credit Limit") shown on the Schedule to this
Agreement (the "Schedule"), provided no Event of Default and no event which,
with notice or passage of time or both, would constitute an Event of Default has
occurred. The Borrower is responsible for monitoring the total amount of Loans
and other Obligations outstanding from time to time, and Borrower shall not
permit the same, at any time, to exceed the Credit Limit. If at any time the
total of all outstanding Loans and all other Obligations exceeds the Credit
Limit, the Borrower shall immediately pay the amount of the excess to Silicon,
without notice or demand.
1.2 INTEREST. All Loans and all other monetary Obligations * shall
bear interest at the rate shown on the Schedule hereto. Interest shall be
payable monthly, on the due date shown on the monthly billing from Silicon to
the Borrower. Silicon may, in its discretion, charge interest to Borrower's
deposit accounts maintained with Silicon.
* (OTHER THAN ACCRUED BUT UNPAID INTEREST)
1.3 FEES. The Borrower shall pay to Silicon a loan origination fee
in the amount shown on the Schedule hereto concurrently herewith. This fee is in
addition to all interest and other sums payable to Silicon and is not
refundable.
1.4 LETTERS OF CREDIT. [Not Applicable]
2. GRANT OF SECURITY INTEREST.
2.1 OBLIGATIONS. The term "Obligations" as used in this Agreement
means the following: the obligation to pay all Loans and all interest thereon
when due, and to pay and perform when due all other present and future
indebtedness, liabilities, obligations, guarantees, covenants, agreements,
warranties and representations of the Borrower to Silicon, whether joint or
several, monetary or non-monetary, and whether created pursuant to this
Agreement or any other present or future agreement or otherwise. Silicon may,
in its discretion, require that Borrower pay monetary Obligations in cash to
Silicon, or charge them to Borrower's Loan account, in which event they will
bear interest at the same rate applicable to the Loans. Silicon may also, in
its discretion, charge any monetary Obligations to Borrower's deposit accounts
maintained with Silicon. Silicon will notify the Borrower of any such charges
to Borrower's deposit accounts. Such charges shall not be deemed to be a setoff
for any purpose.
2.2 COLLATERAL. As security for all Obligations, the Borrower
hereby grants Silicon a continuing security interest in all of the Borrower's
interest in the types of property described below, whether now owned or
hereafter acquired, and wherever located (collectively, the "Collateral"): (a)
All accounts, contract rights, chattel paper, letters of credit, documents,
securities, money, and instruments, and all other obligations now or in the
future owing to the Borrower; (b) All inventory, goods, merchandise, materials,
raw materials, work in process, finished goods, farm products, advertising,
packaging and shipping materials, supplies, and all other tangible personal
property which is held for sale or lease or furnished under contracts of service
or consumed in the Borrower's business, and all warehouse receipts and other
documents; and (c) All equipment, including without limitation all machinery,
fixtures, trade fixtures, vehicles, furnishings, furniture, materials, tools,
machine tools, office equipment, computers and peripheral devices, appliances,
apparatus, parts, dies, and jigs; (d) All general intangibles * including, but
not limited to, deposit accounts, goodwill, names, trade names, trademarks and
the goodwill of the business symbolized thereby, trade secrets, drawings,
blueprints, customer lists, copyrights, security deposits, loan commitment fees,
federal, state and local tax refunds and claims, all rights in all litigation
presently or hereafter pending for any cause or claim (whether in contract, tort
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or otherwise), and all judgments now or hereafter arising therefrom, all claims
of Borrower against Silicon, all rights to purchase or sell real or personal
property, all rights as a licensor or licensee of any kind, all royalties,
licenses, processes, telephone numbers, proprietary information, purchase
orders, and all insurance policies and claims (including without limitation
credit, liability, property and other insurance), and all other rights,
privileges and franchises of every kind; (e) All books and records, whether
stored on computers or otherwise maintained; and (f) All substitutions,
additions and accessions to any of the foregoing, and all products, proceeds and
insurance proceeds of the foregoing, and all guaranties of and security for the
foregoing; and all books and records relating to any of the foregoing. Silicon's
security interest in any present or future technology * (including trade
secrets, and other technology *) shall be subject to any licenses or rights now
or in the future granted by the Borrower to any third parties in the ordinary
course of Borrower's business; provided that if the Borrower proposes to sell,
license or grant any other rights with respect to any technology * in a
transaction that, in substance, conveys a major part of the economic value of
that technology, Silicon shall first be requested to release its security
interest in the same, and Silicon may withhold such release in its discretion.
* (EXCLUDING ALL PATENTS AND PATENT APPLICATIONS)
3. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE BORROWER.
The Borrower represents and warrants to Silicon as follows, and the Borrower
covenants that the following representations will continue to be true, and that
the Borrower will comply with all of the following covenants:
3.1 CORPORATE EXISTENCE AND AUTHORITY. The Borrower, if a
corporation, is and will continue to be, duly authorized, validly existing and
in good standing under the laws of the jurisdiction of its incorporation. The
Borrower is and will continue to be qualified and licensed to do business in
all jurisdictions in which any failure to do so would have a material adverse
effect on the Borrower. The execution, delivery and performance by the
Borrower of this Agreement, and all other documents contemplated hereby have
been duly and validly authorized, are enforceable against the Borrower in
accordance with their terms, and do not violate any law or any provision of,
and are not grounds for acceleration under, any agreement or instrument which
is binding upon the Borrower. Borrower has no subsidiaries except as set forth
on the Schedule.
3.2 NAME; TRADE NAMES AND STYLES. The name of the Borrower set
forth in the heading to this Agreement is its correct name. Listed on the
Schedule hereto are all prior names of the Borrower and all of Borrower's
present and prior trade names. The Borrower shall give Silicon 15 days' prior
written notice before changing its name or doing business under any other name.
The Borrower has complied, and will in the future comply, with all laws
relating to the conduct of business under a fictitious business name.
3.3 PLACE OF BUSINESS; LOCATION OF COLLATERAL. The address set
forth in the heading to this Agreement is the Borrower's chief executive
office. In addition, the Borrower has places of business and Collateral is
located only at the locations set forth on the Schedule to this Agreement. The
Borrower will give Silicon at least 15 days prior written notice before
changing its chief executive office or locating the Collateral at any other
location.
3.4 TITLE TO COLLATERAL; PERMITTED LIENS. The Borrower is now, and
will at all times in the future be, the sole owner of all the Collateral, except
for items of equipment which are leased by the Borrower. The Collateral * will
remain free and clear of any and all liens, charges, security interests,
encumbrances and adverse claims, except for the following ("Permitted Liens"):
(i) purchase money security interests in specific items of equipment; (ii)
leases of specific items of equipment; (iii) liens for taxes not yet payable**;
(iv) additional security interests and liens consented to in writing by Silicon
in its reasonable discretion, which consent shall not be unreasonably withheld;
(v) security interests being terminated substantially concurrently with this
Agreement ***. Silicon will have the right to require, as a condition to its
consent under subparagraph (iv) above, that the holder of the additional
security interest or lien sign an intercreditor agreement on Silicon's then
standard form, acknowledge that the security interest is subordinate to the
security interest in favor of Silicon, and agree not to take any action to
enforce its subordinate security interest so long as any Obligations remain
outstanding, and that the Borrower agree that any uncured default in any
obligation secured by the subordinate security interest shall also constitute an
Event of Default under this Agreement. Silicon now has, and will continue to
have, a perfected and enforceable security interest in all of the Collateral,
subject only to the Permitted Liens, and the Borrower will at all times defend
Silicon and the Collateral against all claims of others. None of the Collateral
now is or will be affixed to any real property in such a manner, or with such
intent, as to become a fixture.
* AND THE PATENTS AND PATENT APPLICATIONS OF BORROWER NOW ARE
** OR BEING CONTESTED IN GOOD FAITH
*** (VI) LIENS WITH RESPECT TO THE INTELLECTUAL PROPERTY ASSETS OF THE BORROWER
OTHER THAN WITH RESPECT TO LIENS IN FAVOR OF LENDERS; (VII) LIENS OF
MATERIALMEN,
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MECHANICS, WAREHOUSEMEN, CARRIERS, OR OTHER SIMILAR LIENS ARISING IN THE
ORDINARY COURSE OF BUSINESS AND SECURING OBLIGATIONS WHICH ARE NOT MORE THAN 30
DAYS DELINQUENT; (VIII) LIENS IN FAVOR OF CUSTOMS AND REVENUE AUTHORITIES WHICH
SECURE PAYMENT OF CUSTOMS DUTIES IN CONNECTION WITH THE IMPORTATION OF GOODS;
(IX) ANY JUDGMENT, ATTACHMENT OR SIMILAR LIEN, UNLESS THE JUDGMENT IT SECURES
IS NOT FULLY COVERED BY INSURANCE AND HAS NOT BEEN DISCHARGED OR EXECUTION
THEREOF EFFECTIVELY STAYED AND BONDED AGAINST PENDING APPEAL WITHIN 30 DAYS OF
THE ENTRY THEREOF, PROVIDED THAT, IF THE JUDGMENT IS NOT FULLY COVERED BY
INSURANCE OR EXECUTION THEREOF HAS NOT BEEN SO STAYED AND BONDED, SILICON SHALL
NOT BE REQUIRED TO MAKE ANY LOANS OR OTHERWISE EXTEND CREDIT TO OR FOR THE
BENEFIT OF BORROWER; (X) EASEMENTS, RIGHTS OF WAY, SERVITUDES OR ZONING OR
BUILDING RESTRICTIONS AND OTHER MINOR ENCUMBRANCES ON REAL PROPERTY AND
IRREGULARITIES IN THE TITLE TO SUCH PROPERTY WHICH DO NOT IN THE AGGREGATE
MATERIALLY IMPAIR THE USE OR VALUE OF SUCH PROPERTY OR RISK THE LOSS OR
FORFEITURE OF TITLE THERETO; (XI) LIENS WHICH CONSTITUTE BANKER'S LIENS, RIGHTS
OF SET-OFF OR SIMILAR RIGHTS AND REMEDIES AS TO DEPOSIT ACCOUNTS OR OTHER FUNDS
MAINTAINED WITH ANY BANK OR OTHER FINANCIAL INSTITUTION, WHETHER ARISING BY
OPERATION OF LAW OR PURSUANT TO CONTRACT; PROVIDED THAT SUCH DEPOSIT ACCOUNT
(A) IS NOT A DEDICATED CASH COLLATERAL ACCOUNT, OR (B) IS NOT INTENDED BY THE
BORROWER TO PROVIDE COLLATERAL TO THE DEPOSITORY INSTITUTION; AND (XII) LIENS
INCURRED IN CONNECTION WITH THE EXTENSION, RENEWAL OR REFINANCING OF THE
INDEBTEDNESS SECURED BY LIENS OF THE TYPE DESCRIBED IN CLAUSES (I) THROUGH (XI)
ABOVE.
3.5 MAINTENANCE OF COLLATERAL. The Borrower will maintain the
Collateral in good working condition, and the Borrower will not use the
Collateral for any unlawful purpose. The Borrower will immediately advise
Silicon in writing of any material loss or damage to the Collateral.
3.6 BOOKS AND RECORDS. The Borrower has maintained and will
maintain at the Borrower's Address complete and accurate books and records,
comprising an accounting system in accordance with generally accepted
accounting principles.
3.7 FINANCIAL CONDITION AND STATEMENTS. All financial statements
now or in the future delivered to Silicon have been, and will be, prepared in
conformity with generally accepted accounting principles and now and in the
future will completely and accurately reflect the financial condition of the
Borrower, at the times and for the periods therein stated. Since the last date
covered by any such statement, there has been no material adverse change in the
financial condition or business of the Borrower. The Borrower is now and will
continue to be solvent. The Borrower will provide Silicon: (i) within 30 days
after the end of each month, a monthly financial statement prepared by the
Borrower, and a Compliance Certificate in such form as Silicon shall reasonably
specify, signed by the Chief Financial Officer of the Borrower, certifying that
as of the end of such month the Borrower was in full compliance with all of the
terms and conditions of this Agreement, and setting forth calculations showing
compliance with the financial covenants set forth on the Schedule and such
other information as Silicon shall reasonably request; and (ii) within 120 days
following the end of the Borrower's fiscal year, complete annual financial
statements, certified by independent certified public accountants acceptable to
Silicon and accompanied by the unqualified report thereon by said independent
certified public accountants.
3.8 TAX RETURNS AND PAYMENTS; PENSION CONTRIBUTIONS. The Borrower
has timely filed, and will timely file, all tax returns and reports required by
foreign, federal, state and local law, and the Borrower has timely paid, and
will timely pay, all foreign, federal, state and local taxes, assessments,
deposits and contributions now or in the future owed by the Borrower. The
Borrower may, however, defer payment of any contested taxes, provided that the
Borrower (i) in good faith contests the Borrower's obligation to pay the taxes
by appropriate proceedings promptly and diligently instituted and conducted,
(ii) notifies Silicon in writing of the commencement of, and any material
development in, the proceedings, and (iii) posts bonds or takes any other steps
required to keep the contested taxes from becoming a lien upon any of the
Collateral. The Borrower is unaware of any claims or adjustments proposed for
any of the Borrower's prior tax years which could result in additional taxes
becoming due and payable by the Borrower. The Borrower has paid, and shall
continue to pay all amounts necessary to fund all present and future pension,
profit sharing and deferred compensation plans in accordance with their terms,
and the Borrower has not and will not withdraw from participation in, permit
partial or complete termination of, or permit the occurrence of any other event
with respect to, any such plan which could result in any liability of the
Borrower, including, without limitation, any liability to the Pension Benefit
Guaranty Corporation or its successors or any other governmental agency.
3.9 COMPLIANCE WITH LAW. The Borrower has complied, and will
comply, in all material respects, with all provisions of all foreign, federal,
state and local laws and regulations relating to the Borrower, including, but
not limited to, those relating to the Borrower's ownership of real or personal
property, conduct and licensing of the Borrower's business, and environmental
matters.
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3.10 LITIGATION. Except as disclosed in the Schedule, there is no
claim, suit, litigation, proceeding or investigation pending or (to best of the
Borrower's knowledge) threatened by or against or affecting the Borrower in any
court or before any governmental agency (or any basis therefor known to the
Borrower) which may result, either separately or in the aggregate, in any
material adverse change in the financial condition or business of the Borrower,
or in any material impairment in the ability of the Borrower to carry on its
business in substantially the same manner as it is now being conducted. The
Borrower will promptly inform Silicon in writing of any claim, proceeding,
litigation or investigation in the future threatened or instituted by or
against the Borrower involving amounts in excess of $100,000.
3.11 USE OF PROCEEDS. All proceeds of all Loans shall be used
solely for lawful business purposes.
4. ADDITIONAL DUTIES OF THE BORROWER.
4.1 FINANCIAL AND OTHER COVENANTS. The Borrower shall at all
times comply with the financial and other covenants set forth in the Schedule
to this Agreement.
4.2 OVERADVANCE; PROCEEDS OF ACCOUNTS. If for any reason the
total of all outstanding Loans and all other Obligations exceeds the Credit
Limit, without limiting Silicon's other remedies, and whether or not Silicon
declares an Event of Default, Borrower shall remit to Silicon all checks and
other proceeds of Borrower's accounts and general intangibles, in the same form
as received by Borrower, within one day after Borrower's receipt of the same,
to be applied to the Obligations in such order as Silicon shall determine in
its discretion.
4.3 INSURANCE. The Borrower shall, at all times insure all of the
tangible personal property Collateral and carry such other business insurance,
with insurers reasonably acceptable to Silicon, in such form and amounts as
Silicon may reasonably require. All such insurance policies shall name Silicon
as an additional loss payee, and shall contain a lenders loss payee endorsement
in form reasonably acceptable to Silicon. Upon receipt of the proceeds of any
such insurance, Silicon shall apply such proceeds in reduction of the
Obligations as Silicon shall determine in its sole and absolute discretion,
except that, provided no Event of Default has occurred, Silicon shall release
to the Borrower insurance proceeds with respect to equipment totaling less than
$100,000, which shall be utilized by the Borrower for the replacement of the
equipment with respect to which the insurance proceeds were paid. Silicon may
require reasonable assurance that the insurance proceeds so released will be so
used. If the Borrower fails to provide or pay for any insurance, Silicon may,
but is not obligated to, obtain the same at the Borrower's expense. The
Borrower shall promptly deliver to Silicon copies of all reports made to
insurance companies.
4.4 REPORTS. The Borrower shall provide Silicon with such written
reports with respect to the Borrower (including without limitation budgets,
sales projections, operating plans and other financial documentation), as
Silicon shall from time to time reasonably specify.
4.5 ACCESS TO COLLATERAL, BOOKS AND RECORDS. At all reasonable
times, and upon one business day notice, Silicon, or its agents, shall have the
right to inspect the Collateral, and the right to audit and copy the Borrower's
accounting books and records and Borrower's books and records relating to the
Collateral. Silicon shall take reasonable steps to keep confidential all
information obtained in any such inspection or audit, but Silicon shall have
the right to disclose any such information to its auditors, regulatory
agencies, and attorneys, and pursuant to any subpoena or other legal process.
The foregoing audits shall be at Silicon's expense, except that the Borrower
shall reimburse Silicon for its reasonable out of pocket costs for semi-annual
accounts receivable audits by third parties retained by Silicon, and Silicon
may debit Borrower's deposit accounts with Silicon for the cost of such
semi-annual accounts receivable audits (in which event Silicon shall send
notification thereof to the Borrower). Notwithstanding the foregoing, after
the occurrence of an Event of Default all audits shall be at the Borrower's
expense.
4.6 NEGATIVE COVENANTS. Except as may be permitted in the Schedule
hereto, the Borrower shall not, without Silicon's prior written consent, do any
of the following: (i) merge or consolidate with another corporation, except
that the Borrower may merge or consolidate with another corporation if the
Borrower is the surviving corporation in the merger; (ii) acquire any assets
outside the ordinary course of business for an aggregate purchase price
exceeding 25% of Borrower's Tangible Net Worth (as defined in the Schedule) as
of the end of the month prior to the effective date of the acquisition; (iv)
sell or transfer any Collateral, except for the sale of finished inventory in
the ordinary course of the Borrower's business, except for the sale of obsolete
or unneeded equipment in the ordinary course of business*; (v) make any loans of
any money or any
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other assets; (vi) incur any debts, outside the ordinary course of business,
which would have a material, adverse effect on the Borrower or on the prospect
of repayment of the Obligations; (vii) guarantee or otherwise become liable
with respect to the obligations of another party or entity; (viii) pay or
declare any dividends on the Borrower's stock (except for dividends payable
solely in stock of the Borrower); (ix) redeem, retire, purchase or otherwise
acquire, directly or indirectly, any of the Borrower's stock; (x) make any
change in the Borrower's capital structure which has a material adverse effect
on the Borrower or on the prospect of repayment of the Obligations; or (xi)
dissolve or elect to dissolve. Transactions permitted by the foregoing
provisions of this Section are only permitted if no Event of Default and no
event which (with notice or passage of time or both) would constitute an Event
of Default would occur as a result of such transaction.
* AND EXCEPT FOR THE SALE OF COLLATERAL FOR FAIR VALUE WHERE THE
PURCHASE PRICE DOES NOT EXCEED 25% OF CONSOLIDATED TANGIBLE NET WORTH PROVIDED
THAT THE BORROWER PROVIDES SILICON WITH PRIOR WRITTEN NOTICE THEREOF AND
BORROWER APPLIES ALL PROCEEDS OF ANY SUCH SALE TO REDUCE THE OBLIGATIONS
4.7 LITIGATION COOPERATION. Should any third-party suit or
proceeding be instituted by or against Silicon with respect to any Collateral
or in any manner relating to the Borrower, the Borrower shall, without expense
to Silicon, make available the Borrower and its officers, employees and agents
and the Borrower's books and records to the extent that Silicon may deem them
reasonably necessary in order to prosecute or defend any such suit or
proceeding.
4.8 VERIFICATION. Silicon may, from time to time, following prior
notification to Borrower, verify directly with the respective account debtors
the validity, amount and other matters relating to the Borrower's accounts, by
means of mail, telephone or otherwise, either in the name of the Borrower or
Silicon or such other name as Silicon may reasonably choose, provided that no
prior notification to Borrower shall be required following an Event of Default.
4.9 EXECUTE ADDITIONAL DOCUMENTATION. The Borrower agrees, at its
expense, on request by Silicon, to execute all documents in form satisfactory
to Silicon, as Silicon, may deem reasonably necessary or useful in order to
perfect and maintain Silicon's perfected security interest in the Collateral,
and in order to fully consummate all of the transactions contemplated by this
Agreement.
5. TERM.
5.1 MATURITY DATE. This Agreement shall continue in effect until
the maturity date set forth on the Schedule hereto (the "Maturity Date").
5.2 EARLY TERMINATION. This Agreement may be terminated, prior to
the Maturity Date as follows: (i) by the Borrower, effective three business
days after written notice of termination is given to Silicon; or (ii) by Silicon
at any time after the occurrence * of an Event of Default, without notice,
effective immediately. **
* AND DURING THE CONTINUANCE
** AT ANY TIME THAT THIS AGREEMENT IS TERMINATED PRIOR TO THE MATURITY DATE,
BORROWER SHALL PAY TO SILICON THE TERMINATION FEE (AS DEFINED IN THE SCHEDULE
HERETO).
5.3 PAYMENT OF OBLIGATIONS. On the Maturity Date or on any
earlier effective date of termination, the Borrower shall pay and perform in
full all Obligations, whether evidenced by installment notes or otherwise, and
whether or not all or any part of such Obligations are otherwise then due and
payable. Without limiting the generality of the foregoing, if on the Maturity
Date, or on any earlier effective date of termination, there are any
outstanding letters of credit issued by Silicon or issued by another
institution based upon an application, guarantee, indemnity or similar
agreement on the part of Silicon, then on such date Borrower shall provide to
Silicon cash collateral in an amount equal to the face amount of all such
letters of credit plus all interest, fees and cost due or to become due in
connection therewith, to secure all of the Obligations relating to said letters
of credit, pursuant to Silicon's then standard form cash pledge agreement.
Notwithstanding any termination of this Agreement, all of Silicon's security
interests in all of the Collateral and all of the terms and provisions of this
Agreement shall continue in full force and effect until all Obligations have
been paid and performed in full; provided that, without limiting the fact that
Loans are subject to the reasonable discretion of Silicon, Silicon may, in its
sole discretion, refuse to make any further Loans after termination. No
termination shall in any way affect or impair any right or remedy of Silicon,
nor shall any such termination relieve the Borrower of any Obligation to
Silicon, until all of the Obligations have been paid and performed in full.
Upon payment and performance in full of all the Obligations, Silicon shall
promptly deliver to the Borrower termination statements, requests for
reconveyances and such other documents as may be required to fully terminate
any of Silicon's security interests.
6. EVENTS OF DEFAULT AND REMEDIES.
6.1 EVENTS OF DEFAULT. The occurrence of any of the following
events shall constitute an "Event of Default" under this Agreement, and the
Borrower shall give Silicon immediate written notice thereof: (a) Any warranty,
representation, statement, report or certificate made or delivered to Silicon
by the Borrower or any of the Borrower's officers, employees or agents, now or
in
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the future, shall be untrue or misleading in any material respect; or (b) the
Borrower shall fail to pay when due any Loan or any interest thereon or any
other monetary Obligation; or (c) the total Loans and other Obligations
outstanding at any time exceed the Credit Limit*; or (d) the Borrower shall fail
to comply with any of the financial covenants set forth in the Schedule or shall
fail to perform any other non-monetary Obligation which by its nature cannot be
cured; or (e) the Borrower shall fail to pay or perform any other non-monetary
Obligation, which failure is not cured within ** business days after the date
due; or (f) Any levy, assessment, attachment, seizure, lien or encumbrance is
made on all or any part of the Collateral *** which is not cured within 10 days
after the occurrence of the same; or (g) Dissolution, termination of existence,
insolvency or business failure of the Borrower; or appointment of a receiver,
trustee or custodian, for all or any part of the property of, assignment for the
benefit of creditors by, or the commencement of any proceeding by the Borrower
under any reorganization, bankruptcy, insolvency, arrangement, readjustment of
debt, dissolution or liquidation law or statute of any jurisdiction, now or in
the future in effect; or (h) the commencement of any proceeding against the
Borrower or any guarantor of any of the Obligations under any reorganization,
bankruptcy, insolvency, arrangement, readjustment of debt, dissolution or
liquidation law or statute of any jurisdiction, now or in the future in effect,
which is not cured by the dismissal thereof within 30 days after the date
commenced; (i) revocation or termination of, or limitation or denial of
liability upon, any guaranty of the Obligations or any attempt to do any of the
foregoing; or commencement of proceedings by any guarantor of any of the
Obligations under any bankruptcy or insolvency law; or (j) revocation or
termination of, or limitation or denial of liability upon, any pledge of any
certificate of deposit, securities or other property or asset of any kind
pledged by any third party to secure any or all of the Obligations, or any
attempt to do any of the foregoing; or commencement of proceedings by or against
any such third party under any bankruptcy or insolvency law; or (k) the Borrower
makes any payment on account of any indebtedness or obligation which has been
subordinated to the Obligations other than as permitted in the applicable
subordination agreement or if any person who has subordinated such indebtedness
or obligations terminates or in any way limits his subordination agreement; or
(l) there shall be a change in the record or beneficial ownership of an
aggregate of more than **** of the outstanding shares of stock of the Borrower,
in one or more transactions, compared to the ownership of outstanding shares of
stock of the Borrower in effect on the date hereof, without the prior written
consent of Silicon; or (m) a material adverse change occurs in the business,
operations, or financial or other condition of the Borrower, or a material
impairment occurs in the prospect of payment of the Obligations, or there is a
material impairment of the value or priority of Silicon's security interest in
the Collateral; or (n) the Borrower shall generally not pay its debts as they
become due; or the Borrower shall conceal, remove or transfer any part of its
property, with intent to hinder, delay or defraud its creditors, or make or
suffer any transfer of any of its property which may be fraudulent under any
bankruptcy, fraudulent conveyance or similar law. Silicon may cease making any
Loans hereunder during any of the above cure periods, and thereafter if an Event
of Default has occurred.
* AND SUCH CONDITION SHALL CONTINUE TO EXIST FOR 3 DAYS
** 10
*** OTHER THAN PERMITTED LIENS
**** 49%
6.2 REMEDIES. Upon the occurrence * of any Event of Default, and
at any time thereafter, Silicon, at its option, and without notice or demand of
any kind (all of which are hereby expressly waived by the Borrower), may do any
one or more of the following: (a) Cease making Loans and cease extending
letters of credit or other credit facilities to or for the benefit of the
Borrower under this Agreement or any other document or agreement; (b)
Accelerate and declare all or any part of the Obligations to be immediately
due, payable, and performable, notwithstanding any deferred or installment
payments allowed by any instrument evidencing or relating to any Obligation;
(c) Take possession of any or all of the Collateral wherever it may be found,
and for that purpose the Borrower hereby authorizes Silicon without judicial
process to enter onto any of the Borrower's premises without interference to
search for, take possession of, keep, store, or remove any of the Collateral,
and remain on the premises or cause a custodian to remain on the premises in
exclusive control thereof without charge for so long as Silicon deems it
reasonably necessary in order to complete the enforcement of its rights under
this Agreement or any other agreement; provided, however, that should Silicon
seek to take possession of any or all of the Collateral by Court process, the
Borrower hereby irrevocably waives: (i) any bond and any surety or security
relating thereto required by any statute, court rule or otherwise as an
incident to such possession; (ii) any demand for possession prior to the
commencement of any suit or action to recover possession thereof; and (iii) any
requirement that Silicon retain possession of and not dispose of any such
Collateral until after trial or final judgment; (d) Require the Borrower to
assemble any or all of the Collateral and make it available to Silicon at
7
places designated by Silicon which are reasonably convenient to Silicon and the
Borrower, and to remove the Collateral to such locations as Silicon may deem
advisable; (e) Require Borrower to deliver to Silicon, in kind, all checks and
other payments received with respect to all accounts and general intangibles,
together with any necessary indorsements, within one day after the date
received by the Borrower; (f) Complete the processing, manufacturing or repair
of any Collateral prior to a disposition thereof and, for such purpose and for
the purpose of removal, Silicon shall have the right to use the Borrower's
premises, vehicles, hoists, lifts, cranes, equipment and all other property
without charge; (g) Sell, lease or otherwise dispose of any of the Collateral
in its condition at the time Silicon obtains possession of it or after further
manufacturing, processing or repair, at any one or more public and/or private
sales, in lots or in bulk, for cash, exchange or other property, or on credit,
and to adjourn any such sale from time to time without notice other than oral
announcement at the time scheduled for sale. Silicon shall have the right to
conduct such disposition on the Borrower's premises without charge, for such
time or times as Silicon deems reasonable, or on Silicon's premises, or
elsewhere and the Collateral need not be located at the place of disposition.
Silicon may directly or through any affiliated company purchase or lease any
Collateral at any such public disposition, and if permissible under applicable
law, at any private disposition. Any sale or other disposition of Collateral
shall not relieve the Borrower of any liability the Borrower may have if any
Collateral is defective as to title or physical condition or otherwise at the
time of sale; (h) Demand payment of, and collect any accounts and general
intangibles comprising Collateral and, in connection therewith, the Borrower
irrevocably authorizes Silicon to endorse or sign the Borrower's name on all
collections, receipts, instruments and other documents, to take possession of
and open mail addressed to the Borrower and remove therefrom payments made with
respect to any item of the Collateral or proceeds thereof, and, in Silicon's
sole discretion, to grant extensions of time to pay, compromise claims and
settle accounts and the like for less than face value; (i) Offset against any
sums in any of Borrower's general, special or other deposit accounts with
Silicon; and (j) Demand and receive possession of any of the Borrower's federal
and state income tax returns and the books and records utilized in the
preparation thereof or referring thereto. All reasonable attorneys' fees,
expenses, costs, liabilities and obligations incurred by Silicon with respect
to the foregoing shall be added to and become part of the Obligations, shall be
due on demand, and shall bear interest at a rate equal to the highest interest
rate applicable to any of the Obligations. Without limiting any of Silicon's
rights and remedies, from and after the occurrence of any Event of Default, the
interest rate applicable to the Obligations shall be increased by an additional
five percent per annum.
* AND DURING THE CONTINUANCE
6.3 STANDARDS FOR DETERMINING COMMERCIAL REASONABLENESS. The
Borrower and Silicon agree that a sale or other disposition (collectively,
"sale") of any Collateral which complies with the following standards will
conclusively be deemed to be commercially reasonable: (i) Notice of the sale is
given to the Borrower at least seven days prior to the sale, and, in the case
of a public sale, notice of the sale is published at least seven days before
the sale in a newspaper of general circulation in the county where the sale is
to be conducted; (ii) Notice of the sale describes the collateral in general,
non-specific terms; (iii) The sale is conducted at a place designated by
Silicon, with or without the Collateral being present; (iv) The sale commences
at any time between 8:00 a.m. and 6:00 p.m; (v) Payment of the purchase price
in cash or by cashier's check or wire transfer is required; (vi) With respect
to any sale of any of the Collateral, Silicon may (but is not obligated to)
direct any prospective purchaser to ascertain directly from the Borrower any
and all information concerning the same. Silicon may employ other methods of
noticing and selling the Collateral, in its discretion, if they are
commercially reasonable.
6.4 POWER OF ATTORNEY. Upon the occurrence * of any Event of
Default, without limiting Silicon's other rights and remedies, the Borrower
grants to Silicon an irrevocable power of attorney coupled with an interest,
authorizing and permitting Silicon (acting through any of its employees,
attorneys or agents) at any time, at its option, but without obligation, with
or without notice to the Borrower, and at the Borrower's expense, to do any or
all of the following, in the Borrower's name or otherwise: (a) Execute on
behalf of the Borrower any documents that Silicon may, in its sole and absolute
discretion, deem advisable in order to perfect and maintain Silicon's security
interest in the Collateral, or in order to exercise a right of the Borrower or
Silicon, or in order to fully consummate all the transactions contemplated
under this Agreement, and all other present and future agreements; (b) Execute
on behalf of the Borrower any document exercising, transferring or assigning
any option to purchase, sell or otherwise dispose of or to lease (as lessor or
lessee) any real or personal property which is part of Silicon's Collateral or
in which Silicon has an interest; (c) Execute on behalf of the Borrower, any
invoices relating to any account, any draft against any account debtor and any
notice to any account debtor, any proof of claim in bankruptcy, any Notice of
Lien, claim of mechanic's, materialman's or
8
other lien, or assignment or satisfaction of mechanic's, materialman's or other
lien; (d) Take control in any manner of any cash or non-cash items of payment
or proceeds of Collateral; endorse the name of the Borrower upon any
instruments, or documents, evidence of payment or Collateral that may come into
Silicon's possession; (e) Endorse all checks and other forms of remittances
received by Silicon; (f) Pay, contest or settle any lien, charge, encumbrance,
security interest and adverse claim in or to any of the Collateral, or any
judgment based thereon, or otherwise take any action to terminate or discharge
the same; (g) Grant extensions of time to pay, compromise claims and settle
accounts and general intangibles for less than face value and execute all
releases and other documents in connection therewith; (h) Pay any sums required
on account of the Borrower's taxes or to secure the release of any liens
therefor, or both; (i) Settle and adjust, and give releases of, any insurance
claim that relates to any of the Collateral and obtain payment therefor; (j)
Instruct any third party having custody or control of any books or records
belonging to, or relating to, the Borrower to give Silicon the same rights of
access and other rights with respect thereto as Silicon has under this
Agreement; and (k) Take any action or pay any sum required of the Borrower
pursuant to this Agreement and any other present or future agreements. Silicon
shall exercise the foregoing powers in a commercially reasonable manner. Any
and all reasonable sums paid and any and all reasonable costs, expenses,
liabilities, obligations and attorneys' fees incurred by Silicon with respect
to the foregoing shall be added to and become part of the Obligations, shall be
payable on demand, and shall bear interest at a rate equal to the highest
interest rate applicable to any of the Obligations. In no event shall
Silicon's rights under the foregoing power of attorney or any of Silicon's
other rights under this Agreement be deemed to indicate that Silicon is in
control of the business, management or properties of the Borrower.
* AND DURING THE CONTINUANCE
6.5 APPLICATION OF PROCEEDS. All proceeds realized as the result
of any sale of the Collateral shall be applied by Silicon first to the costs,
expenses, liabilities, obligations and attorneys' fees incurred by Silicon in
the exercise of its rights under this Agreement, second to the interest due
upon any of the Obligations, and third to the principal of the Obligations, in
such order as Silicon shall determine in its sole discretion. Any surplus
shall be paid to the Borrower or other persons legally entitled thereto; the
Borrower shall remain liable to Silicon for any deficiency. If, Silicon, in
its sole discretion, directly or indirectly enters into a deferred payment or
other credit transaction with any purchaser at any sale or other disposition of
Collateral, Silicon shall have the option, exercisable at any time, in its sole
discretion, of either reducing the Obligations by the principal amount of
purchase price or deferring the reduction of the Obligations until the actual
receipt by Silicon of the cash therefor.
6.6 REMEDIES CUMULATIVE. In addition to the rights and remedies
set forth in this Agreement, Silicon shall have all the other rights and
remedies accorded a secured party under the California Uniform Commercial Code
and under all other applicable laws, and under any other instrument or
agreement now or in the future entered into between Silicon and the Borrower,
and all of such rights and remedies are cumulative and none is exclusive.
Exercise or partial exercise by Silicon of one or more of its rights or
remedies shall not be deemed an election, nor bar Silicon from subsequent
exercise or partial exercise of any other rights or remedies. The failure or
delay of Silicon to exercise any rights or remedies shall not operate as a
waiver thereof, but all rights and remedies shall continue in full force and
effect until all of the Obligations have been fully paid and performed.
7. GENERAL PROVISIONS.
7.1 CREDITING PAYMENTS. Payments shall not be applied to the
Obligations until received by Silicon in immediately available federal funds,
and any wire transfer or other payment so received after 12:00 noon Pacific
time shall be deemed to have been received by Silicon as of the opening of
business on the next business day.
7.2 NOTICES. All notices to be given under this Agreement shall be
in writing and shall be given either personally or by regular first-class mail,
or certified mail return receipt requested, addressed to Silicon or the
Borrower at the addresses shown in the heading to this Agreement, or at any
other address designated in writing by one party to the other party. All
notices shall be deemed to have been given upon delivery in the case of notices
personally delivered to the Borrower or to Silicon, or at the expiration of two
business days following the deposit thereof in the United States mail, with
postage prepaid.
7.3 SEVERABILITY. Should any provision of this Agreement be held
by any court of competent jurisdiction to be void or unenforceable, such defect
shall not affect the remainder of this Agreement, which shall continue in full
force and effect.
7.4 INTEGRATION. This Agreement and such other written
agreements, documents and instruments as may be executed in connection herewith
are the final, entire and complete agreement between the Borrower and Silicon
and supersede all prior and contemporaneous negotiations and oral
representations and agreements, all of which are merged and integrated in this
Agreement. There are no oral understandings, representations or
9
agreements between the parties which are not set forth in this Agreement or in
other written agreements signed by the parties in connection herewith.
7.5 WAIVERS. The failure of Silicon at any time or times to
require the Borrower to strictly comply with any of the provisions of this
Agreement or any other present or future agreement between the Borrower and
Silicon shall not waive or diminish any right of Silicon later to demand and
receive strict compliance therewith. Any waiver of any default shall not waive
or affect any other default, whether prior or subsequent thereto. None of the
provisions of this Agreement or any other agreement now or in the future
executed by the Borrower and delivered to Silicon shall be deemed to have been
waived by any act or knowledge of Silicon or its agents or employees, but only
by a specific written waiver signed by an officer of Silicon and delivered to
the Borrower. The Borrower waives demand, protest, notice of protest and notice
of default or dishonor, notice of payment and nonpayment, release, compromise,
settlement, extension or renewal of any commercial paper, instrument, account,
general intangible, document or guaranty at any time held by Silicon on which
the Borrower is or may in any way be liable, and notice of any action taken by
Silicon, unless expressly required by this Agreement.
7.6 NO LIABILITY FOR ORDINARY NEGLIGENCE. Neither Silicon, nor
any of its directors, officers, employees, agents, attorneys or any other
person affiliated with or representing Silicon shall be liable for any claims,
demands, losses or damages, of any kind whatsoever, made, claimed, incurred or
suffered by the Borrower or any other party through the ordinary negligence of
Silicon, or any of its directors, officers, employees, agents, attorneys or any
other person affiliated with or representing Silicon.
7.7 AMENDMENT. The terms and provisions of this Agreement may not
be waived or amended, except in a writing executed by the Borrower and a duly
authorized officer of Silicon.
7.8 TIME OF ESSENCE. Time is of the essence in the performance by
the Borrower of each and every obligation under this Agreement.
7.9 ATTORNEYS FEES AND COSTS. The Borrower shall reimburse Silicon
for all reasonable attorneys' fees and all filing, recording, search, title
insurance, appraisal, audit, and other reasonable costs incurred by Silicon,
pursuant to, or in connection with, or relating to this Agreement (whether or
not a lawsuit is filed), including, but not limited to, any reasonable
attorneys' fees and costs Silicon incurs in order to do the following: prepare
and negotiate this Agreement and the documents relating to this Agreement;
obtain legal advice in connection with this Agreement; enforce, or seek to
enforce, any of its rights; prosecute actions against, or defend actions by,
account debtors; commence, intervene in, or defend any action or proceeding;
initiate any complaint to be relieved of the automatic stay in bankruptcy; file
or prosecute any probate claim, bankruptcy claim, third-party claim, or other
claim; examine, audit, copy, and inspect any of the Collateral or any of the
Borrower's books and records; protect, obtain possession of, lease, dispose of,
or otherwise enforce Silicon's security interest in, the Collateral; and
otherwise represent Silicon in any litigation relating to the Borrower. In
satisfying Borrower's obligation hereunder to reimburse Silicon for attorneys
fees, Borrower may, for convenience, issue checks directly to Silicon's
attorneys, Levy, Small & Lallas, but Borrower acknowledges and agrees that
Levy, Small & Lallas is representing only Silicon and not Borrower in
connection with this Agreement. If either Silicon or the Borrower files any
lawsuit against the other predicated on a breach of this Agreement, the
prevailing party in such action shall be entitled to recover its reasonable
costs and attorneys' fees, including (but not limited to) reasonable attorneys'
fees and costs incurred in the enforcement of, execution upon or defense of any
order, decree, award or judgment. All attorneys' fees and costs to which
Silicon may be entitled pursuant to this Paragraph shall immediately become
part of the Borrower's Obligations, shall be due on demand, and shall bear
interest at a rate equal to the highest interest rate applicable to any of the
Obligations.
7.10 BENEFIT OF AGREEMENT. The provisions of this Agreement shall
be binding upon and inure to the benefit of the respective successors, assigns,
heirs, beneficiaries and representatives of the parties hereto; provided,
however, that the Borrower may not assign or transfer any of its rights under
this Agreement without the prior written consent of Silicon, and any prohibited
assignment shall be void. No consent by Silicon to any assignment shall release
the Borrower from its liability for the Obligations.
7.11 JOINT AND SEVERAL LIABILITY. If the Borrower consists of more
than one person, their liability shall be joint and several, and the compromise
of any claim with, or the release of, any Borrower shall not constitute a
compromise with, or a release of, any other Borrower.
7.12 PARAGRAPH HEADINGS; CONSTRUCTION. Paragraph headings are only
used in this Agreement for convenience. The Borrower acknowledges that the
headings may not describe completely the subject matter of the applicable
paragraph, and the headings shall not be used in any manner to construe, limit,
define or interpret any term or provision of this Agreement. This Agreement
has been fully reviewed and negotiated between the parties and no uncertainty
or ambiguity in any term or provision of this Agreement shall be construed
strictly against Silicon or the Borrower under
10
any rule of construction or otherwise.
7.13 GOVERNING LAW; JURISDICTION; VENUE. This Agreement and all
acts and transactions hereunder and all rights and obligations of Silicon and
the Borrower shall be governed by, and in accordance with, the laws of the State
of California. Any undefined term used in this Agreement that is defined in the
California Uniform Commercial Code shall have the meaning assigned to that term
in the California Uniform Commercial Code. As a material part of the
consideration to Silicon to enter into this Agreement, the Borrower (i) agrees
that all actions and proceedings relating directly or indirectly hereto shall,
at Silicon's option, be litigated in courts located within California, and that
the exclusive venue therefor shall be San Diego County; (ii) consents to the
jurisdiction and venue of any such court and consents to service of process in
any such action or proceeding by personal delivery or any other method permitted
by law; and (iii) waives any and all rights the Borrower may have to object to
the jurisdiction of any such court, or to transfer or change the venue of any
such action or proceeding.
7.14 MUTUAL WAIVER OF JURY TRIAL. THE BORROWER AND SILICON EACH
HEREBY WAIVE THE RIGHT TO TRIAL BY JURY IN ANY ACTION OR PROCEEDING BASED UPON,
ARISING OUT OF, OR IN ANY WAY RELATING TO, THIS AGREEMENT OR ANY OTHER PRESENT
OR FUTURE INSTRUMENT OR AGREEMENT BETWEEN SILICON AND THE BORROWER, OR ANY
CONDUCT, ACTS OR OMISSIONS OF SILICON OR THE BORROWER OR ANY OF THEIR
DIRECTORS, OFFICERS, EMPLOYEES, AGENTS, ATTORNEYS OR ANY OTHER PERSONS
AFFILIATED WITH SILICON OR THE BORROWER. THIS WAIVER OF THE RIGHT TO JURY
TRIAL APPLIES TO ALL CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS,
COMMON LAW CLAIMS, STATUTORY CLAIMS AND ALL OTHER CLAIMS AND CAUSES OF ACTION
OF EVERY KIND. EACH PARTY RECOGNIZES AND AGREES THAT THE FOREGOING JURY TRIAL
WAIVER CONSTITUTES A MATERIAL INDUCEMENT TO THE OTHER PARTY TO ENTER INTO THIS
AGREEMENT. EACH PARTY REPRESENTS AND WARRANTS THAT IT HAS REVIEWED THIS JURY
TRIAL WAIVER WITH ITS LEGAL COUNSEL AND THAT IT KNOWINGLY AND VOLUNTARILY
WAIVES ITS JURY TRIAL RIGHTS FOLLOWING ITS CONSULTATION WITH ITS LEGAL COUNSEL.
BORROWER:
IMMUSOL, INC.
BY /s/ S. Goldenberg
-------------------------------
CHAIRMAN AND CEO
BY /s/ (illegible)
-------------------------------
SECRETARY OR ASS'T SECRETARY
SILICON:
SILICON VALLEY BANK
BY /s/ R (illegible)
-------------------------------
TITLE VP
------------------------------
11
SCHEDULE TO LOAN AND SECURITY AGREEMENT -.S.
12
SILICON VALLEY BANK
SCHEDULE TO
LOAN AND SECURITY AGREEMENT
BORROWER: IMMUSOL, INC.
ADDRESS: 3050 SCIENCE PARK DRIVE
SAN DIEGO, CALIFORNIA 92121
DATE: APRIL __, 1996
THIS SCHEDULE is an integral part of the Loan and Security Agreement
between Silicon Valley Bank ("Silicon") and the above-named borrower
("Borrower") of even date.
CREDIT LIMIT
(Section 1.1): An amount up to $500,000 for the purchase by the
Borrower of lab and research and development
equipment, which is to be utilized by the Borrower on
or before December 31, 1996 (the earlier of the date
that the Borrower has utilized the full amount of the
Credit Limit for such purchases or December 31, 1996
is referred to as the "Amortization Date"). Once
amounts hereunder are repaid, such amounts may not
be reborrowed.
Each requested Loan for purchases of equipment shall
be in an amount not less than $50,000 and shall not
exceed either (a) 100% of the invoice amount of new
items of equipment that the Borrower purchases after
the date of this Agreement or (b) 50% of the original
invoice amount of items of equipment that the
Borrower has purchased not more than one year prior
to the date of the requested Loan. In connection
with the foregoing, and prior to the making of any
Loan, Borrower shall supply to Silicon lists of
invoices (including serial numbers) relating to the
equipment subject of the requested Loan and shall
supply such other information relating thereto as
Silicon requests.
Borrower shall repay to Silicon the outstanding
aggregate principal amount of the Loans in 48 equal
consecutive monthly installments commencing on the
fifth (5th) day of the month following the
Amortization Date (the "Payment Start Date") and
continuing on the fifth (5th) day of each month
thereafter, provided that in any event, all Loans,
all accrued and unpaid interest thereon and all other
Obligations relating thereto shall be paid in full no
later than December 31, 2000.
Borrower hereby further promises to pay interest to
Silicon on the unpaid principal balance of the Loans
at the applicable interest rate (as referred to
below). Such interest shall be paid each month in
accordance with the terms of the Loan Agreement.
INTEREST RATE
(Section 1.2): Prior to the Amortization Date: An interest rate
equal to the "Prime Rate" in effect from time to
time, plus 1.50% per annum. Interest shall be
calculated on the basis of a 360-day year for the
actual number of days elapsed. "Prime Rate" means
the rate announced from time to time by Silicon as
its "prime rate;" it is a base rate upon which other
rates charged by Silicon are based, and it is not
13
necessarily the best rate available at Silicon. The
interest rate applicable to the Obligations shall
change on each date there is a change in the Prime
Rate.
On and after the Amortization Date: A fixed interest
rate equal to the rate offered on a five-year U.S.
Treasury Note in effect as of the Amortization Date
plus four and one-quarter percent (4.25%) per annum.
The rate offered on a five-year U.S. Treasury Note
shall be defined as the rate shown under the column
heading "Ask Yld." For "Govt. Bonds & Notes" in the
"Treasury Bonds, Notes & Bills" Section of The Wall
Street Journal -- Western Edition published on the
Amortiztion Date, (or if the Amortization Date falls
on a day when The Wall Street Journal is not
published, then on the most recent date prior
thereto) for the government bond or note with a
maturity date in the same month and year as the
Maturity Date, or, if there are more than one
government bonds or notes with a maturity date in the
same month and year as the Maturity Date, the average
(rounded to the next highest basis point) of the
rates shown in the "Ask Yld." column for such bonds
or notes, or, if there is no government bond or note
with a maturity date in the same month and year as
the Maturity Date, the average (rounded to the next
highest basis point) of the rates shown in the "Ask
Yld." column for the bonds or notes in the months
preceding and following the month in which the
Maturity Date falls.
LOAN ORIGINATION FEE
(Section 1.3): $5,000. (Any Commitment Fee previously paid by the
Borrower in connection with this loan shall be
credited against this Fee.)
MATURITY DATE
(Section 5.1): The earlier of DECEMBER 31, 2000 or the date that is
48 months from and including the Payment Start Date.
SUBSIDIARIES OF BORROWER
(Section 3.1): NONE
PRIOR NAMES OF BORROWER
(Section 3.2): NONE
PRESENT TRADE NAMES OF BORROWER
(Section 3.2): NONE
PRIOR TRADE NAMES OF BORROWER
(Section 3.2): NONE
OTHER LOCATIONS AND ADDRESSES
(Section 3.3): NONE
MATERIAL ADVERSE LITIGATION
(Section 3.10): NONE
NEGATIVE COVENANTS-EXCEPTIONS
(Section 4.6): Without Silicon's prior written consent, Borrower may
do the following, provided that, after giving effect
thereto, no Event of Default has occurred and no
event has occurred which, with notice or passage of
time or both, would constitute an Event of Default,
and provided that the following are done in
compliance with all applicable laws, rules and
regulations: (i) repurchase shares of Borrower's
stock pursuant to any employee stock purchase or
benefit plan, provided that the total amount paid by
Borrower for such stock does not exceed $250,000 in
any fiscal year; and (ii) incur recruiting expenses
in an amount not to exceed $250,000 in any fiscal
year.
FINANCIAL COVENANT
(Section 4.1): Borrower shall at the end of each month maintain the
greater of the Six Months Burn Amount (as defined
below) OR cash and marketable securities (valued at
14
market value) in an aggregate amount of not less than
$2,500,000.
The end of each month is referred to herein as the
"Computation Date". As used herein, "Six Months Burn
Amount" means all cash expenditures and payments made
by Borrower, of every kind whatsoever, determined on
a cash basis (but excluding expenditures for the
purchase of capital assets if, and only if, such
assets are financed), during the three-month period
ending on the Computation Date, multiplied by two
(2).
Within 30 days after each Computation Date, in
addition to the monthly financial statements as of
the Computation Date which the Borrower is required
to provide to Silicon, Borrower shall provide Silicon
with a computation showing compliance with the above
financial covenant (the "Covenant"), and showing in
reasonable detail the manner in which it was
computed.
If any such monthly financial statement of Borrower
shows that the Borrower has failed to comply with the
Covenant, then Borrower shall immediately deposit
with and pledge to Silicon cash in the amount of
Credit Limit to secure the Obligations, and in
connection therewith, Borrower shall execute and
deliver to Silicon a cash pledge agreement on
Silicon's standard form, provided, however, if
Borrower subsequently demonstrates compliance with
the Covenant, then Silicon agrees to terminate such
pledge agreement and return the pledged cash to the
Borrower as long as Borrower remains in compliance
therewith.
OTHER COVENANTS
(Section 4.1): Borrower shall at all times comply with all of the
following additional covenants:
1. BANKING RELATIONSHIP.
Borrower shall at all times maintain its primary
banking relationship with Silicon.
2. INDEBTEDNESS. Without limiting any of the
foregoing terms or provisions of this Agreement,
Borrower shall not in the future incur indebtedness
for borrowed money, except for (i) indebtedness to
Silicon, and (ii) indebtedness incurred in the future
for the purchase price of or lease of equipment in an
aggregate amount not exceeding $250,000 at any time
outstanding.
3. TERMINATION FEE. Upon any early termination
by Borrower or any termination of this Agreement by
Silicon upon the occurrence of an Event of Default,
then, and in any such event, Borrower shall pay to
Silicon upon the effective date of such termination a
fee (the "Termination Fee") in an amount equal to the
following percentage of the average daily outstanding
balance of the Obligations for the 180-day period (or
lesser period if applicable) preceding the date of
termination:
(i) Two percent (2%), if such early termination
occurs on or prior to the first anniversary of the
date of this Agreement; and
(ii) One percent (1%), if such early termination
occurs after the first anniversary of the date of
this Agreement and on or prior to the second
anniversary of the date of this Agreement.
BORROWER:
IMMUSOL, INC.
BY_______________________________
15
President or Vice President
BY_______________________________
SECRETARY OR ASS'T SECRETARY
SILICON:
SILICON VALLEY BANK
BY_______________________________
TITLE______________________________
16
Silicon Valley Bank
Loan and Security Agreement
CERTIFIED RESOLUTION -.R
17
SILICON VALLEY BANK
CERTIFIED RESOLUTION
LOGO
SILICON VALLEY BANK
CERTIFIED RESOLUTION
BORROWER: IMMUSOL, INC., A CORPORATION ORGANIZED UNDER
THE LAWS OF THE STATE OF CALIFORNIA
ADDRESS: 3050 SCIENCE PARK DRIVE
SAN DIEGO, CALIFORNIA 92121
DATE: APRIL __, 1996
I, the undersigned, Secretary or Assistant Secretary of the
above-named borrower, a corporation organized under the laws of the state set
forth above, do hereby certify that the following is a full, true and correct
copy of resolutions duly and regularly adopted by the Board of Directors of
said corporation as required by law, and by the by-laws of said corporation,
and that said resolutions are still in full force and effect and have not been
in any way modified, repealed, rescinded, amended or revoked.
RESOLVED, that this corporation borrow from Silicon Valley Bank
("Silicon"), from time to time, such sum or sums of money as, in the
judgment of the officer or officers hereinafter authorized hereby,
this corporation may require.
RESOLVED FURTHER, that any officer of this corporation be, and he or
she is hereby authorized, directed and empowered, in the name of this
corporation, to execute and deliver to Silicon, and Silicon is
requested to accept, the loan agreements, security agreements, notes,
financing statements, and other documents and instruments providing
for such loans and evidencing and/or securing such loans, with
interest thereon, and said authorized officers are authorized from
time to time to execute renewals, extensions and/or amendments of said
loan agreements, security agreements, and other documents and
instruments.
RESOLVED FURTHER, that said authorized officers be and they are hereby
authorized, directed and empowered, as security for any and all
indebtedness of this corporation to Silicon, whether arising pursuant
to this resolution or otherwise, to grant, transfer, pledge, mortgage,
assign, or otherwise hypothecate to Silicon, or deed in trust for its
benefit, any property of any and every kind, belonging to this
corporation, including, but not limited to, any and all real property,
accounts, inventory, equipment, general intangibles, instruments,
documents, chattel paper, notes, money, deposit accounts, furniture,
fixtures, goods, and other property of every kind, and to execute and
deliver to Silicon any and all grants, transfers, trust receipts, loan
or credit agreements, pledge agreements, mortgages, deeds of trust,
financing statements, security agreements and other hypothecation
agreements, which said instruments and the note or notes and other
instruments referred to in the preceding paragraph may contain such
provisions, covenants, recitals and agreements as Silicon may require
and said
18
SILICON VALLEY BANK
CERTIFIED RESOLUTION
authorized officers may approve, and the execution thereof by said
authorized officers shall be conclusive evidence of such approval.
RESOLVED FURTHER, that Silicon may conclusively rely upon a certified
copy of these resolutions and a certificate of the Secretary or Ass't
Secretary of this corporation as to the officers of this corporation
and their offices and signatures, and continue to conclusively rely on
such certified copy of these resolutions and said certificate for all
past, present and future transactions until written notice of any
change hereto or thereto is given to Silicon by this corporation by
certified mail, return receipt requested.
19
SILICON VALLEY BANK
CERTIFIED RESOLUTION
The undersigned further hereby certifies that the following persons are the
duly elected and acting officers of the corporation named above as borrower and
that the following are their actual signatures:
NAMES OFFICE(S) ACTUAL SIGNATURES
- ----- --------- -----------------
______________________________ _________________________________ X___________________________
______________________________ _________________________________ X___________________________
______________________________ _________________________________ X___________________________
______________________________ _________________________________ X___________________________
IN WITNESS WHEREOF, I have hereunto set my hand as such Secretary or Assistant
Secretary on the date set forth above.
___________________________________
Secretary or Assistant Secretary
UCC-1 -.U
20
This FINANCING STATEMENT is presented for filing and will remain effective,
with certain exceptions, for five years from the date of filing, pursuant to
Section 9403 of the California Uniform Commercial Code.
1. DEBTOR (Last Name First - If An Individual) 1A.Soc Sec No or Id No.
IMMUSOL, INC.
1B. MAILING ADDRESS 1C. CITY, STATE 1D. ZIP CODE
3050 Science Park Drive San Diego, California 92121
2. ADDITIONAL DEBTOR (IF ANY) 2A.Soc Sec No or Id No.
(Last Name First - If An Individual)
2B. MAILING ADDRESS 2C. CITY, STATE 2D. ZIP CODE
3. DEBTOR'S TRADE NAMES OR STYLES (IF ANY) 3A. FED TAX NO.
None
4. SECURED PARTY 4A.Soc Sec No or Id No.
Name: SILICON VALLEY BANK
Mailing Address: 3003 Tasman Drive
Mail Sort NC661
Santa Clara, California 95054
5. ASSIGNEE OF SECURED PARTY 5A.Soc Sec No or Id No.
Name:
Mailing Address:
6. This FINANCING STATEMENT covers the following types or items of property
(include description of real property on which located and owner of record when
required by instruction 4).
Debtor hereby grants Secured Party a security interest in all of the
following, whether now owned or hereafter acquired, and wherever located, as
collateral for the payment and performance of all present and future
indebtedness, liabilities, guarantees and obligations of Debtor to Secured
Party: All "accounts," "general intangibles" (as limited on Exhibit A hereto),
"chattel paper," "documents," "letters of credit," "instruments," "deposit
accounts," "inventory," "farm products," "fixtures" and "equipment," as such
terms are defined in Division 9 of the California Uniform Commercial Code in
effect on the date hereof, and all life and other insurance policies and
claims, and all rights in all litigation presently or hereafter pending for any
cause or claim (whether in contract, tort or otherwise), and all judgments now
or hereafter arising therefrom; and all products, proceeds and insurance
proceeds of any or all of the foregoing; including without limitation all types
and items of property described on Exhibit A hereto (but this Financing
Statement and Security Agreement shall be fully effective notwithstanding any
lack of any Exhibit A). Debtor is not authorized to sell, transfer, or further
encumber any of the foregoing collateral, except for the sale of finished
inventory in the ordinary course of business.
7. CHECK IF APPLICABLE: X-PRODUCTS OF COLLATERAL ARE ALSO COVERED.
21
SIGNATURE(S) OF DEBTOR: DATE: April __, 1996
IMMUSOL, INC.
By__________________________________
Title________________________________
SIGNATURE(S) OF SECURED PARTY:
SILICON VALLEY BANK
By__________________________________
Title________________________________
RETURN COPY TO:
SILICON VALLEY BANK
3003 TASMAN DRIVE
MAIL SORT NC661
SANTA CLARA, CALIFORNIA 95054
C
O
D
E
1
2
3
4
5
6
7
8
9
0
THIS SPACE FOR USE OF FILING OFFICER
(DATE, TIME, FILE NUMBER AND FILING OFFICER)
22
EXHIBIT "A"
TO FINANCING STATEMENT AND SECURITY AGREEMENT
This FINANCING STATEMENT and SECURITY AGREEMENT covers the following types or
items of property, and the undersigned, IMMUSOL, INC. ("Debtor") hereby grants
SILICON VALLEY BANK ("Secured Party") a security interest therein as collateral
for the payment and performance of all present and future indebtedness,
liabilities, guarantees and obligations of Debtor to Secured Party. Debtor
agrees that said security interest may be enforced by Secured Party in
accordance with the terms and provisions of all security and other agreements
between Secured Party and Debtor, the California Uniform Commercial Code, or
both (but this document shall be fully effective as a security agreement, even
if there is no other security or other agreement between Secured Party and
Debtor): (a) All accounts, contract rights, chattel paper, letters of credit,
documents, securities, money, and instruments, and all other obligations now or
in the future owing to the Debtor; (b) All inventory, goods, merchandise,
materials, raw materials, work in process, finished goods, farm products,
advertising, packaging and shipping materials, supplies, and all other tangible
personal property which is held for sale or lease or furnished under contracts
of service or consumed in the Debtor's business, and all warehouse receipts and
other documents; and (c) All equipment, including without limitation all
machinery, fixtures, trade fixtures, vehicles, furnishings, furniture,
materials, tools, machine tools, office equipment, computers and peripheral
devices, appliances, apparatus, parts, dies, and jigs; (d) All Specified
General Intangibles (as defined below) including, but not limited to, deposit
accounts, goodwill, names, trade names, trademarks and the goodwill of the
business symbolized thereby, trade secrets, drawings, blueprints, customer
lists, [patents], [patent applications], copyrights, security deposits, loan
commitment fees, federal, state and local tax refunds and claims, all rights in
all litigation presently or hereafter pending for any cause or claim (whether
in contract, tort or otherwise), and all judgments now or hereafter arising
therefrom, all claims of Debtor against Secured Party, all rights to purchase
or sell real or personal property, all rights as a licensor or licensee of any
kind, all royalties, licenses, processes, telephone numbers, proprietary
information, purchase orders, and all insurance policies and claims (including
without limitation credit, liability, property and other insurance), and all
other rights, privileges and franchises of every kind; (e) All books and
records, whether stored on computers or otherwise maintained; and (f) All
substitutions, additions and accessions to any of the foregoing, and all
products, proceeds and insurance proceeds of the foregoing, and all guaranties
of and security for the foregoing; and all books and records relating to any of
the foregoing.
The term "Specified General Intangibles" shall mean "general intangibles" as
defined in the California Uniform Commercial Code, excluding, however, all
patents and patent applications.
IMMUSOL, INC.
By____________________________________
Title_________________________________