Commercial Promissory Note - Union Bank of California NA and Sequenom Inc.
UNION BANK OF CALIFORNIA
COMMERCIAL PROMISSORY NOTE
S. GALINDO/N/24410
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Borrower Name: SEQUENOM, INC.
Borrower Address: 11555 SORRENTO VALLEY ROAD
SAN DIEGO, CA 92121
Office: 40067
Loan Number: 8276091941
Maturity Date: SEPTEMBER 2, 2002
Amount: $25,000,000.00
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Date: March 3, 2000 $25,000,000.00
FOR VALUE RECEIVED, the undersigned ("Debtor") promises to pay to the order of
UNION BANK OF CALIFORNIA, N.A. ("Bank"), as indicated below, the principal sum
of TWENTY-FIVE MILLION AND NO/100 Dollars ($25,000,000.00), or so much thereof
as is disbursed together with interest on the balance of such principal sum from
time to time outstanding, at a per annum rate equal to the Reference Rate minus
500/1000 percent (0.500%); rate to change as and when the Reference Rate shall
change.
As used herein the term "Reference Rate" shall mean the rate announced by Bank
from time to time at its corporate headquarters as its "Reference Rate." The
Reference Rate is an index rate determined by Bank from time to time as a means
of pricing certain extensions of credit and is neither directly tied to any
external rate of interest or index nor necessarily the lowest rate of interest
charged by Bank at any given time. All computations of interest under this note
shall be made on the basis of a year of 360 days, for actual days elapsed.
1. PAYMENTS. INTEREST PAYMENTS. Debtor shall pay interest on the 2ND day of
each MONTH commencing APRIL 2, 2000.
PRINCIPAL PAYMENTS. Debtor shall pay principal in installments of $1,041,666.66
each on the 2ND day of each MONTH commencing OCTOBER 2, 2000. On SEPTEMBER 2,
2002, all principal and interest then unpaid shall be due and payable.
Debtor shall pay all amounts under this note in lawful money of the United
States at Bank's GOLDEN TRIANGLE COMMERCIAL BANKING Office, or such other office
as may be designated by Bank, from time to time.
2. LATE PAYMENTS. If any installment payment required by the terms of this
note shall remain unpaid ten days after due, at the option of Bank, Debtor shall
pay a fee of $100 to Bank.
3. INTEREST RATE FOLLOWING DEFAULT. In the event of default, at the option of
Bank, and, to the extent permitted by law, interest shall be payable on the
outstanding principal under this note at a per annum rate equal to five percent
(5%) in excess of the interest rate specified in the initial paragraph of this
note, calculated from the date of default until all amounts payable under this
note are paid in full.
4. DEFAULT AND ACCELERATION OF TIME FOR PAYMENT. Default shall include, but
not be limited to, any of the following: (a) the failure of Debtor to make any
payment required under this note when due; (b) any breach, misrepresentation or
other default by Debtor, any guarantor, co-maker, endorser, or any person or
entity other than Debtor providing security for this note (hereinafter
individually and collectively referred to as the "Obligor") under any security
agreement, guaranty or other agreement between Bank and any Obligor; (c) the
insolvency of any Obligor or the failure of any Obligor generally to pay such
Obligor's debts as such debts become due; (d) the commencement as to any Obligor
of any voluntary or involuntary proceeding under any laws relating to
bankruptcy, insolvency, reorganization, arrangement, debt adjustment or debtor
relief; (e) the assignment by any Obligor for the benefit of such Obligor's
creditors; (f) the appointment, or commencement of any proceedings for the
appointment, of a receiver, trustee, custodian or similar official for all or
substantially all of any Obligor's property; (g) the commencement of any
proceeding for the dissolution or liquidation of any Obligor; (h) the
termination of existence or death of any Obligor; (i) the revocation of any
guaranty or subordination agreement given in connection with this note; (j) the
failure of any Obligor to comply with any order, judgment, injunction, decree,
writ or demand of any court or other public authority; (k) the filing or
recording against any Obligor, or the property of any Obligor, of any notice of
levy, notice to withhold, or other legal process for taxes other than property
taxes; (l) the default by any Obligor personally liable for amounts owed
hereunder on any obligation concerning the borrowing of money; (m) the issuance
against any Obligor, or the property of any Obligor, of any writ of attachment,
execution, or other judicial lien; or (n) the deterioration of the financial
condition of any Obligor which results in Bank deeming itself, in good faith,
insecure.
Upon the occurrence of any such default, Bank, in its discretion, may cease to
advance funds hereunder and may declare all obligations under this note
immediately due and payable; however, upon the occurrence of an event of default
under d, e, f, or g, all principal and interest shall automatically become
immediately due and payable.
5. ADDITIONAL AGREEMENTS OF DEBTOR. If any amounts owing under this note are
not paid when due, Debtor promises to pay all costs and expenses, including
reasonable attorneys' fees, incurred by Bank in the collection or enforcement of
this note. Debtor and any endorsers of this note, for the maximum period of time
and the full extent permitted by law, (a) waive diligence, presentment, demand,
notice of nonpayment, protest, notice of protest, and notice of every kind; (b)
waive the right to assert the defense of any statute of limitations to any debt
or obligation hereunder; and (c) consent to renewals and extensions of time for
the payment of any amounts due under this note. If this note is signed by more
than one party, the term "Debtor" includes each of the undersigned and any
successors in interest thereof; all of whose liability shall be joint and
several. Any married person who signs this note agrees that recourse may be had
against the separate property of that person for any obligations hereunder. The
receipt of any check or other item of payment by Bank, at its option, shall not
be considered a payment on account until such check or other item of payment is
honored when presented for payment at the drawee bank. Bank may delay the credit
of such payment based upon Bank's schedule of funds availability, and interest
under this note shall accrue until the funds are deemed collected. In any action
brought under or arising out of this note, Debtor and any endorser of this note,
including their successors and assigns, hereby consents to the jurisdiction of
any competent court within the State of California, as provided in any
alternative dispute resolution agreement executed between Debtor and Bank, and
consents to service of process by any means authorized by California law. The
term "Bank" includes, without limitation, any holder of this note. This note
shall be construed in accordance with and governed by the laws of the State of
California. This note hereby incorporates any alternative dispute resolution
agreement previously, concurrently or hereafter executed between Debtor and
Bank.
SEQUENOM, INC.
By: /s/ STEVE ZANIBONI
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STEVE ZANIBONI, SEC./TREASURER/CFO
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UNION BANK OF CALIFORNIA
SECURITY AGREEMENT (INVESTMENT SECURITIES)
THIS SECURITY AGREEMENT (INVESTMENT SECURITIES) ("Agreement") is entered into as
of MARCH 3, 2000, between SEQUENOM, INC. ______________________________________
_______________________________________________________________________________
_____________________________________________________________________("Debtor")
and UNION BANK OF CALIFORNIA, N.A. ("Bank"). In consideration of any financial
accommodations given, to be given or continued, Debtor and Bank agree as
follows:
1. GRANT OF SECURITY INTEREST. As security for the payment and performance of
all of Debtor's obligations to Bank, irrespective of the manner in which or the
time at which such obligations arose or shall arise, and whether direct or
indirect, alone or with others, or absolute or contingent, but excluding
indebtedness which is now or hereafter defined as "consumer credit" in the
Federal Truth in Lending Act and the regulations thereunder ("Act") unless the
security interest granted to Bank under this Agreement is disclosed as required
by the Act (collectively, "Obligations"), Debtor hereby grants to Bank a
continuing security interest in and to all of the below described personal
property in which Debtor now has or hereafter acquires an interest, wherever
located: account no. 510001164-00 maintained with UNION BANK OF CALIFORNIA
INVESTMENT SERVICES ("Securities Intermediary"), all security entitlements,
investment property and other financial assets now or hereafter credited to said
securities account, and all of Debtor's rights in respect of said securities
account, security entitlements, investment property and other financial assets;
and deposit account no. 510001164-00 maintained by Debtor with Bank; together
with all products, proceeds and revenues of and from the personal property
described above, and all substitutions and additions including stock rights,
rights to subscribe, dividends of any kind, interest, new securities and other
property to which Debtor is or may hereafter become entitled to receive on
account of such personal property (collectively, "Collateral"). In the event an
Accommodation Encumbrance Rider is executed in connection herewith, the
obligations of Accommodator hereunder shall be limited as described in said
rider. In such event, the word "Debtor" as used herein shall mean "Accommodator"
in all cases where the context so requires.
2. PERFECTION OF SECURITY INTEREST. It is the intent of Debtor and Bank that
the security interest herein granted be perfected by "control" (as defined in
Section 8-106 of the Uniform Commercial Code or the equivalent section of
Division/Article 8 of the Commercial Code, as amended from time to time, of the
state whose law governs this Agreement). Debtor agrees that it will from time to
time as required by Bank execute and deliver all notices and other documents
Bank deems necessary or desirable for Bank to obtain and maintain a first
priority perfected security interest in, and control over, the Collateral, will
perform such other acts, and execute and deliver to Bank such additional
assignments, agreements and instruments, as Bank may require in connection with
the administration and enforcement of this Agreement and Bank's rights, powers
and remedies hereunder, and will join with Bank in taking any other action
required by Bank to obtain and maintain such security interest and protect the
rights and priorities of Bank with respect to the Collateral. In particular,
Debtor will at Bank's request (a) deliver to Bank each and every certificated
security and instrument which constitutes part of the Collateral, accompanied by
appropriate assignments and/or stock or bond powers duly endorsed in blank, and
(b) originate such entitlement orders, and join with Bank in executing such
other instructions to or agreements with securities intermediaries, as may be
necessary or desirable for Bank to obtain control of each securities account,
each security entitlement and each other financial asset which constitutes part
of the Collateral. Debtor agrees that if any Collateral is now or hereafter held
by Bank in its capacity as a securities intermediary or pursuant to a
safekeeping or similar agreement, Bank shall be deemed to possess such
Collateral as a secured party for purposes of perfecting its security interest,
and if there is any conflict between the terms of the agreement under which Bank
is holding such Collateral and this Agreement, the terms of this Agreement shall
prevail.
3. MAINTENANCE OF COLLATERAL COVERAGE. Debtor shall maintain the Collateral,
or shall cause the Collateral to be maintained, in an amount such that the
Obligations secured hereby shall not at any time exceed the sum of
(a) EIGHTY-FIVE AND NO/1000 percent (85.00%) of the Current Value (as
hereinafter defined) of Collateral consisting of (i) United States government
securities, (ii) state or municipal government or agency securities rated BBB-
or better by Standard & Poor's, or Baa3 or better by Moody's, (iii) corporate
debt or equity securities (exclusive, however, of corporate debt or equity
securities issued by Bank or Bank's corporate parent, UnionBanCal Corporation)
which are regularly traded on the New York Stock Exchange, the American Stock
Exchange or NASDAQ and, in the case of corporate debt, are rated BBB- or better
by Standard & Poor's, or Baa3 or better by Moody's, and (iv) money market
securities acceptable to Bank in its sole discretion, and (b) one hundred
percent (100%) of the amount of cash denominated in United States Dollars which
is held by Bank as Collateral pursuant to this Agreement. The "Current Value" of
any given item of Collateral is the fair market value of such item of Collateral
as marked to market monthly or at such other intervals as Bank deems desirable.
If at any time Bank's Collateral valuation indicates a deficiency with respect
to the required Collateral coverage, Bank shall give telephonic or other notice
of such deficiency to Debtor, and Debtor shall, within five (5) business days
following Debtor's receipt of such notice, either (x) deliver to Bank additional
Collateral, or (y) repay the outstanding principal balance of the Obligations,
in either case in an amount sufficient to restore compliance with the required
Collateral coverage.
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4. CERTAIN TRANSACTIONS INVOLVING COLLATERAL. So long as there is no
deficiency with respect to required Collateral and no Event of Default (as
hereinafter defined) has occurred and is then continuing, Debtor may (a)
withdraw such portions of the Collateral as consist solely of cash dividends
paid in the ordinary course of business and/or interest income, and (b) sell,
trade, transfer or exchange (but not, except as provided in clause (a), above,
withdraw) assets out of, into or within any securities account which constitutes
all or any portion of the Collateral so long as any such sale, trade, transfer
or exchange is for fair market value and is either (i) in compliance with the
terms of the investment plan most recently agreed upon between Debtor and
Debtor's investment manager and acknowledged by Bank, or (ii) results in the
acquisition of a like-kind asset of equal or higher quality than the asset sold,
traded, transferred or exchanged. If there is a deficiency with respect to
required Collateral, or if an Event of Default has occurred and is then
continuing, Debtor agrees, on behalf of itself and its agents (if any), that
Bank may immediately take any and all actions which Bank deems necessary or
desirable to preclude Debtor or any agent of Debtor from making any withdrawals,
or effecting any sales, trades, transfers or exchanges, of Collateral.
5. DEBTOR'S REPRESENTATIONS, WARRANTIES AND COVENANTS. Debtor represents,
warrants and covenants that (a) Debtor has good and marketable title to the
Collateral, free and clear of all liens, encumbrances, claims and restrictions
of any kind or nature other than the security interest of Bank and any
restrictive legend appearing on any security certificate or instrument which
constitutes part of the Collateral, (b) Debtor has all requisite right, power
and authority to grant to Bank the security interest in the Collateral which is
herein granted, (c) Debtor will at all times keep the Collateral free and clear
of all liens, encumbrances and claims of any kind or nature other than the
security interest of Bank, (d) Debtor will not sell, transfer or otherwise
dispose of any of the Collateral or any interest therein to any individual or
entity, except as permitted by this Agreement or with the prior written consent
of Bank, (e) except for any restrictive legend appearing on any security
certificate or instrument which constitutes part of the Collateral, and except
as Debtor may have otherwise advised Bank in writing prior to the date of this
Agreement, no portion of the Collateral (i) is subject to any condition which
relates to or would impair or restrict its transferability, or (ii) consists of
"restricted securities" or securities issued by an "affiliate" of Debtor, as
each of such terms is defined in Rule 144 of the Securities and Exchange
Commission, (f) Debtor will pay, prior to delinquency, all taxes, levies,
assessments or other claims which are or may become liens against the
Collateral, (g) Debtor will deliver to Bank promptly or ensure that Bank
promptly receives (i) all Collateral, (ii) except as otherwise provided herein,
all proceeds of, and all securities and other assets distributed in respect of,
any of the Collateral, (iii) such specific acknowledgments, Regulation U
Statement of Purpose forms or other agreements or writings as Bank may require
relating to the Collateral, and (iv) copies of records and other reports
relating to the Collateral in such form and detail and at such times as Bank may
from time to time require, and (h) Debtor will not exercise or refrain from
exercising any voting or consensual rights or powers relating to any Collateral
if, in the judgment of Bank, such action would have a material adverse effect on
the value of the Collateral.
6. RIGHTS OF BANK AS SECURED PARTY; POWER OF ATTORNEY. Debtor agrees that
Bank may, at any time whether before or after the occurrence of an Event of
Default, without notice or demand, and either in Bank's name or in the name of
Debtor (a) notify the issuer of any Collateral, or any securities intermediary,
to make payment to Bank of any amounts now or hereafter due or distributable on
or in respect of any Collateral, (b) enforce collection of any Collateral,
whether by legal proceedings or otherwise, and endorse, receive and receipt for
all proceeds, dividends, interest, principal and other sums so collected, (c)
make any compromise or settlement Bank deems desirable or proper with respect to
any Collateral, (d) participate in any recapitalization, reclassification,
reorganization, consolidation, redemption, stock split, merger or liquidation of
any issuer of any Collateral and, in connection therewith, deposit or surrender
control of any Collateral, accept money or other property in exchange for any
Collateral, and take such other actions as Bank deems proper in connection
therewith, (e) apply to the Obligations, in such order of application as Bank
shall determine, any money or other property received on or in respect of, or in
exchange for, any Collateral, or hold the same in a non-interest bearing account
as additional or substitute Collateral pursuant to the provisions of this
Agreement, (f) cause all Or any portion of the Collateral to be transferred into
Bank's name or into the name of Bank's nominee, and (g) exercise as to the
Collateral all rights, powers and remedies of an owner. Debtor irrevocably
appoints Bank, or any officer of Bank, as Debtor's true and lawful attorney-in-
fact coupled with an interest, with full power of substitution, to sign or
endorse any instrument, document or other writing necessary or desirable to
transfer title or other rights to or in any of the Collateral, and to do all
acts necessary or incidental to assert, protect and enforce Bank's rights in the
Collateral and under this Agreement.
7. EVENTS OF DEFAULT. The term "Event of Default" shall mean the occurrence
of any of the following events: (a) Debtor shall fail to pay when due any
principal, interest or other payment required under the terms of any note or
other agreement (including this Agreement) evidencing or relating to the
Obligations (collectively, "Loan Documents"), (b) there shall occur any
"default" or "event of default" under and as defined in any of the Loan
Documents, (c) Debtor shall fail to perform any covenant or agreement contained
in this Agreement, or any representation, warranty, certificate or other
statement (financial or otherwise) made or furnished by or on behalf of Debtor
shall be false, incorrect, incomplete or misleading in any material respect when
made or furnished, (d) the Collateral shall decline in value, or otherwise
deteriorate, by an amount or to an extent which Bank in good faith deems
material, or Bank shall in good faith deem its rights with respect to the
Collateral to be impaired, or (e) Bank shall in good faith believe that the
prospect for due and punctual payment of all or any of the Obligations is
impaired.
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8. REMEDIES UPON DEFAULT. Upon the occurrence of an Event of Default, Bank
may, at its option and without notice or demand (a) declare the Obligations to
be immediately due and payable, and the same shall thereupon be and become
immediately due and payable, (b) cease advancing money or extending financial
accommodations to or for the benefit of Debtor under any of the Loan Documents,
(c) exercise all voting and other rights as a holder of the Collateral, (d)
exercise any or all rights available upon default to a secured party under the
Commercial Code, as amended from time to time, of the state whose law governs
this Agreement, including without limitation the right to (i) take possession of
any Collateral and sell or dispose of all or any part thereof in such
commercially reasonable manner as Bank may elect, whether at public or private
sale, or both, by way of one or more contracts or transactions and for cash or
on terms, or (ii) order the Securities Intermediary to sell any Collateral on
any established market or over the counter or to cause any Collateral to be
redeemed, and (e) exercise or enforce any or all other rights or remedies
available to Bank under this Agreement, any of the other Loan Documents, at law,
in equity or otherwise. Debtor agrees that if notice to Debtor of any intended
disposition of the Collateral or any other intended action is required by law in
a particular instance, notice given at least five (5) calendar days prior to the
date of the intended disposition or other action shall be deemed commercially
reasonable.
9. BANK'S DUTIES. The sole duty of Bank and its agents with respect to
Collateral in their respective possession shall be to exercise reasonable care
in the custody and preservation of such Collateral, and Bank and its agents
shall be deemed to have exercised reasonable care in the custody and
preservation of such Collateral if such Collateral is accorded treatment
substantially equivalent to that which each accords its own property. Debtor
agrees that neither Bank nor its agents shall have any responsibility for
ascertaining or initiating any action with respect to, or for informing Debtor
of, calls, conversions, exchanges, maturities, declining value, tenders or other
matters relating to any Collateral, regardless of whether they have or are
deemed to have knowledge of such matters, for taking any steps to preserve any
rights against any person or entity with respect to any Collateral or for
otherwise protecting any Collateral against any claims of others. Neither Bank
nor its agents shall be responsible for any injury or loss to the Collateral, or
any part thereof, arising from any cause beyond their reasonable control. Bank
may at any time deliver or cause to be delivered all or any part of the
Collateral to Debtor, and Debtor's receipt shall be a complete and full
acquittance for the Collateral so delivered, and Bank shall thereafter be
discharged from any liability or responsibility therefor.
10. DEBTOR'S WAIVERS. Debtor waives any right to require Bank to (a) give
Debtor notice of Bank's acceptance of this Agreement, (b) to the extent not
contrary to public policy, give notice of the terms, time and place of any
public or private sale of the Collateral, (c) proceed against any person or
entity, or exhaust any Collateral or pursue any remedy in Bank's' power
whatsoever, and (d) make any presentment, demand or protest, or give any notice
of default, nonperformance, protest or dishonor, in connection with any
instrument, document or agreement evidencing the Obligations. Debtor
acknowledges that Bank may release, substitute or add Collateral, endorsers or
guarantors without affecting the liability of Debtor hereunder and under the
other Loan Documents, and waives the right to plead any statute of limitations,
or any defense to the personal liability of Debtor, as a defense to Bank's
exercise of any right or remedy hereunder.
11. REIMBURSEMENT OF COSTS AND EXPENSES. Debtor shall, to the extent permitted
by applicable law, reimburse Bank, on demand, for all costs and expenses
incurred by Bank in performing any agreement of Debtor which Debtor shall fail
to perform, or in taking any other action which Bank deems necessary for the
maintenance or preservation of any Collateral or Bank's interest therein. In
addition, Debtor shall reimburse Bank, on demand, for all reasonable attorneys'
fees (including the reasonable estimate of the allocated costs and expenses of
Bank's in-house legal counsel and legal staff), costs and other expenses
incurred or paid by Bank in collecting, modifying or compromising the
Obligations or in enforcing or exercising its rights or remedies created by,
connected with or provided for in any of the Loan Documents, whether or not an
arbitration, judicial action or other proceeding is commenced. If such a
proceeding is commenced, only the prevailing party shall be entitled to
attorneys' fees and court costs.
12. MISCELLANEOUS. All rights, powers and remedies of Bank hereunder shall be
cumulative and not alternative. This Agreement may be amended, modified or
waived only in a writing signed by all parties hereto. All representations and
warranties contained in this Agreement are continuing and shall survive the
execution, delivery and performance of this Agreement. If more than one Debtor
executes this Agreement, their obligations hereunder are joint and several. All
words used herein in the singular shall be deemed to have been used in the
plural when the context and construction so require. Any married person who
signs this Agreement expressly agrees that recourse may be had against his/her
separate property for all of his/her obligations hereunder. This Agreement shall
inure to the benefit of and be binding upon Bank and Debtor and their respective
successors and assigns; provided, however, that Debtor may not assign its rights
or delegate its duties hereunder without the prior written consent of Bank. Upon
any sale, assignment or transfer by Bank of all or any portion of the
Obligations, Bank shall be fully discharged from all liability with respect to
any Collateral transferred therewith. Should any one or more provisions of this
Agreement be determined to be illegal or unenforceable, all other provisions
shall nevertheless be effective. Any notices or other communications provided
for or allowed hereunder shall be effective only when given by one of the
following methods and addressed to the respective party at its address given
with the signatures at the end of this Agreement (or at such other address as
the party changing its address shall notify the other as provided herein) and
shall be considered to have been validly given
<PAGE>
(a) upon delivery, if delivered personally, (b) upon receipt, if mailed, first
class postage prepaid, with the United States Postal Service, (c) on the
guaranteed delivery date, if sent by courier service of recognized standing,
and (d) upon telephoned confirmation of receipt, if telecopied. Unless separate
notice is requested in writing by any Debtor, notice given to any Debtor shall
constitute notice to all Debtors. Except for the Loan Documents and any other
documents and instruments referenced herein, this Agreement constitutes the
entire agreement between Bank and Debtor relating to the Collateral and
supersedes all prior understandings or agreements concerning the subject matter
hereof. This Agreement shall be governed by the laws of the State of CALIFORNIA
and, unless otherwise defined or provided herein, all words used in this
Agreement have the meanings given them in the Commercial Code of such state.
IN WITNESS WHEREOF, Debtor and Bank have executed this Agreement as of the date
first hereinabove set forth.
"DEBTOR"
SEQUENOM, INC.
By:
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STEVE ZANIBONI, SEC./TREASURER/CFO
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Address: 11555 SORRENTO VALLEY ROAD
SAN DIEGO, CA 92121
"BANK"
UNION BANK OF CALIFORNIA, N.A.
By:
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Title: DAN FINSTER
VICE PRESIDENT
ADDRESS: 4660 LA JOLLA VILLAGE DRIVE
SAN DIEGO, CA 92122