EXHIBIT 10.20(a)
REVOLVING PROMISSORY NOTE
$5,000,000 Atlanta, Georgia
March 6, 2002
FOR VALUE RECEIVED, the undersigned, ATHEROGENICS, INC., a
Georgia corporation ("Borrower") promises to pay to the order of
Silicon Valley Bank, a California-chartered bank ("Bank"), at
such place as the holder hereof may designate, in lawful money of
the United States of America, the aggregate unpaid principal
amount of all advances ("Advances") made by Bank to Borrower in
accordance with the terms and conditions of the Loan and Security
Agreement between Borrower and Bank of even date herewith, as
amended from time to time (the "Loan Agreement"), up to a maximum
principal amount of Five Million Dollars ($5,000,000) ("Principal
Sum"), or so much thereof as may be advanced or readvanced and
remains unpaid. Borrower shall also pay interest on the
aggregate unpaid principal amount of such Advances, as follows:
Commencing as of the date hereof and continuing until
repayment in full of all sums due hereunder, the unpaid Principal
Sum shall bear interest at the variable rate of interest, per
annum, most recently announced by Bank as its "prime rate,"
whether or not such announced rate is the lowest rate available
from Bank (the "Prime Rate"), plus one and one half of one
percent (1.5%) per annum; provided that at all times during which
Borrower's Liquidity is less than two and one half (2.5) times
the outstanding amount of all Credit Extensions or Borrower
maintains less than six (6) months Remaining Months Liquidity, as
determined pursuant to the financial statements to be delivered
to Bank pursuant to Section 6.2(a) of the Loan Agreement, then
the unpaid Principal Sum at all such times shall automatically
and without notice to Borrower bear interest at the Prime Rate,
plus two percent (2%) per annum. The rate of interest charged
under this Note shall change immediately and contemporaneously
with any change in the Prime Rate. All interest payable under
the terms of this Note shall be calculated on the basis of a 360-
day year and the actual number of days elapsed.
The unpaid Principal Sum, together with interest thereon at
the rate or rates provided above, shall be payable as follows:
(a) Interest only on the unpaid principal amount shall
be due and payable monthly in arrears, commencing April 1, 2002,
and continuing on the first (1st) day of each calendar month
thereafter to maturity; and
(b) Unless sooner paid, the unpaid Principal Sum,
together with interest accrued and unpaid thereon, shall be due
and payable in full on September 5, 2004.
The fact that the balance hereunder may be reduced to zero
from time to time pursuant to the Loan Agreement will not affect
the continuing validity of this Note or the Loan Agreement, and
the balance may be increased to the Principal Sum after any such
reduction to zero.
Borrower further agrees that, if any payment made by
Borrower or any other person is applied to this Note and is at
any time annulled, set aside, rescinded, invalidated, declared to
be fraudulent or preferential or otherwise required to be
refunded or repaid, or the proceeds of any property hereafter
securing this Note is required to be returned by Bank to
Borrower, its estate, trustee, receiver or any other party,
including, without limitation, such Borrower, under any
bankruptcy law, state or federal law, common law or equitable
cause, then, to the extent of such payment or repayment,
Borrower's liability hereunder (and any lien, security interest
or other collateral securing such liability) shall be and remain
in full force and effect, as fully as if such payment had never
been made, or, if prior thereto any such lien, security interest
or other collateral hereafter securing Borrower's liability
hereunder shall have been released or terminated by virtue of
such cancellation or surrender, this Note (and such lien,
security interest or other collateral) shall be reinstated in
full force and effect, and such prior cancellation or surrender
shall not diminish, release, discharge, impair or otherwise
affect the obligations of Borrower in respect of the amount of
such payment (or any lien, security interest or other collateral
securing such obligation).
This Note is the "Revolving Promissory Note" described in
the Loan Agreement, to which reference is hereby made for a more
complete statement of the terms and conditions under which the
loans and advances evidenced hereby are made. This Note is
secured as provided in the Loan Agreement. All capitalized terms
used herein and not otherwise defined herein shall have the
meanings given to such terms in the Loan Agreement.
Borrower irrevocably waives the right to direct the
application of any and all payments at any time hereafter
received by Bank from or on behalf of Borrower and Borrower
irrevocably agrees that Bank shall have the continuing exclusive
right to apply any and all such payments against the then due and
owing obligations of Borrower as Bank may deem advisable. In the
absence of a specific determination by Bank with respect thereto,
all payments shall be applied in the following order: (a) then
due and payable fees and expenses; (b) then due and payable
interest payments and mandatory prepayments; and (c) then due and
payable principal payments and optional prepayments.
Bank is hereby authorized by Borrower to endorse on Bank's
books and records each Advance made by Bank under this Note and
the amount of each payment or prepayment of principal of each
such Advance received by Bank; it being understood, however, that
failure to make any such endorsement (or any error in notation)
shall not affect the obligations of Borrower with respect to
Advances made hereunder, and payments of principal by Borrower
shall be credited to Borrower notwithstanding the failure to make
a notation (or any errors in notation) thereof on such books and
records.
The occurrence of any one or more of the following events
shall constitute an event of default (individually, an "Event of
Default" and collectively, the "Events of Default") under the
terms of this Note:
(a) The failure of Borrower to pay to Bank within
three (3) Business Days of when due any and all amounts payable
by Borrower to Bank under the terms of this Note; or
(b) The occurrence of an Event of Default (as defined
therein) under the terms and conditions of any of the other Loan
Documents.
Upon the occurrence and during the continuance of an Event
of Default, at the option of Bank, all amounts payable by
Borrower to Bank under the terms of this Note shall immediately
become due and payable by Borrower to Bank without notice to
Borrower or any other person, and Bank shall have all of the
rights, powers, and remedies available under the terms of this
Note, any of the other Loan Documents and all applicable laws.
Borrower and all endorsers, guarantors, and other parties who may
now or in the future be primarily or secondarily liable for the
payment of the indebtedness evidenced by this Note hereby
severally waive presentment, protest and demand, notice of
protest, notice of demand and of dishonor and non-payment of this
Note and expressly agree that this Note or any payment hereunder
may be extended from time to time without in any way affecting
the liability of Borrower, guarantors and endorsers.
Borrower promises to pay all costs and expense of collection
of this Note and to pay all reasonable attorneys' fees incurred
in such collection, whether or not there is a suit or action, or
in any suit or action to collect this Note or in any appeal
thereof. Borrower waives presentment, demand, protest, notice of
protest, notice of dishonor, notice of nonpayment, and any and
all other notices and demands in connection with the delivery,
acceptance, performance default or enforcement of this Note, as
well as any applicable statutes of limitations. No delay by Bank
in exercising any power or right hereunder shall operate as a
waiver of any power or right. Time is of the essence as to all
obligations hereunder.
This Note is issued pursuant to the Loan Agreement, which
shall govern the rights and obligations of Borrower with respect
to all obligations hereunder.
Borrower acknowledges and agrees that this Note shall be
governed by the laws of the State of Georgia, excluding conflicts
of laws principles, even though for the convenience and at the
request of Borrower, this Note may be executed elsewhere.
BORROWER ACCEPTS FOR ITSELF AND IN CONNECTION WITH ITS
PROPERTIES, UNCONDITIONALLY, THE NON-EXCLUSIVE JURISDICTION OF
ANY STATE OR FEDERAL COURT OF COMPETENT JURISDICTION IN THE STATE
OF GEORGIA IN ANY ACTION, SUIT, OR PROCEEDING OF ANY KIND,
AGAINST IT WHICH ARISES OUT OF OR BY REASON OF THIS AGREEMENT;
PROVIDED, HOWEVER, THAT IF FOR ANY REASON BANK CANNOT AVAIL
ITSELF OF THE COURTS OF GEORGIA, BORROWER ACCEPTS JURISDICTION OF
THE COURTS AND VENUE IN SANTA CLARA COUNTY, CALIFORNIA. BORROWER
AND BANK EACH HEREBY WAIVE THEIR RESPECTIVE RIGHTS TO A JURY
TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT
OF ANY OF THE LOAN DOCUMENTS OR ANY OF THE TRANSACTIONS
CONTEMPLATED THEREIN, INCLUDING CONTRACT CLAIMS, TORT CLAIMS,
BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW OR STATUTORY
CLAIMS. EACH PARTY RECOGNIZES AND AGREES THAT THE FOREGOING
WAIVER CONSTITUTES A MATERIAL INDUCEMENT FOR IT TO ENTER INTO
THIS AGREEMENT. EACH PARTY REPRESENTS AND WARRANTS THAT IT HAS
REVIEWED THIS WAIVER WITH ITS LEGAL COUNSEL AND THAT IT KNOWINGLY
AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING
CONSULTATION WITH LEGAL COUNSEL.
[SIGNATURES APPEAR ON THE FOLLOWING PAGE]
IN WITNESS WHEREOF, Borrower has caused this Note to be
executed under seal by its duly authorized officer as of the date
first written above.
WITNESS/ATTEST: ATHEROGENICS, INC.
/s/CHARLES A. DEIGNAN By: /s/MARK P. COLONNESE (SEAL)
Name: Mark P. Colonnese
Title: Chief Financial Officer
and Secretary