Secured Promissory Note and Agreement - Axys Pharmaceuticals Inc. PE Corp. (NY)
AMENDED AND RESTATED
SECURED PROMISSORY NOTE AND AGREEMENT
("Note and Agreement")
$13,000,000.00 New York, New York
Originally issued October 8, 2001
Amended and restated October 24, 2001
FOR VALUE RECEIVED, Axys Pharmaceuticals, Inc., a Delaware corporation
("Borrower"), hereby promises to pay to the order of PE Corporation (NY), a New
York corporation ("Lender"), the principal sum of THIRTEEN MILLION DOLLARS
($13,000,000) or such lesser amount as shall equal the outstanding principal
amount of all sums advanced to Borrower hereunder and to pay interest on the
outstanding balance of said sum at a rate equal to the Prime Rate (as defined
below) plus one percent (1%) per annum. All then outstanding principal and
accrued interest hereunder shall be due and payable in full upon the earliest of
(a) a sale of all or substantially all of the assets of the Borrower (determined
on a consolidated basis) to any person or entity (other than Lender or an
affiliate of Lender); (b) a Change in Control (as defined below); (c) the
closing of any public or private offering of capital stock or debt securities of
Borrower or any other equity or debt financing that yields net proceeds to
Borrower in excess of $13,000,000; (d) any fee becoming payable to Applera
Corporation pursuant to Section 8.02 of the Agreement and Plan of Merger dated
June 12, 2001 among Applera Corporation, Angel Acquisition Sub, Inc. and the
Borrower (the "Merger Agreement"); (e) the hundred and twentieth (120th) day
following any other termination of the Merger Agreement pursuant to the terms
thereof; and (f) June 15, 2002 (the "Maturity Date"). The events described in
items (a) through (f) above are collectively referred to herein as "Note
Termination Events". As used herein, "Change of Control" means any person or
entity becomes the beneficial owner (within the meaning of Rule 13d-3 of the
rules and regulations of the Securities and Exchange Commission promulgated
under the Securities Exchange Act of 1934, as amended) of fifteen percent (15%)
or more of the outstanding common stock of Borrower other than as contemplated
by the Merger Agreement.
1. Payments. Borrower shall make all payments hereunder for the account of
Lender at Citibank, N.A., New York, New York, ABA# 021000089, Credit PE
Corporation, Account #_____________, or to such other address as Lender
shall notify Borrower, in lawful money of the United States and in same
day or immediately available funds not later than 12:00 noon (New York
City time) on the date due, or as otherwise agreed to by Lender.
2. Prepayments. Notwithstanding anything to the contrary herein, Borrower
shall have the right at any time and from time to time to prepay any
amounts due hereunder in whole or in part in minimum multiples of
$500,000 without penalty upon two (2) business days prior written notice
to Lender.
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3. Interest. All computations of interest under this Note and Agreement
shall be based on a year of 365 or 366 days, as applicable, for actual
days elapsed. In the event that, contrary to the intent of Lender and
Borrower, Borrower pays interest under this Note and Agreement and it is
determined that such interest rate was in excess of the then legal
maximum rate, then that portion of the interest payment representing an
amount in excess of the then legal maximum rate shall be deemed a
payment of principal and applied against the principal then due under
this Note and Agreement. For purposes of this Note, the "Prime Rate"
shall be defined as the rate of interest per annum publicly announced
from time to time by Citibank, N.A. as its prime rate in effect at its
principal office in New York, and each change in the Prime Rate shall be
effective from and including the date such change is publicly announced
as being effective.
4. Pledge Agreement. This Note and Agreement is secured by certain
collateral more specifically described in the Schedules hereto and in
the Pledge Agreement dated October 8, 2001 between Borrower and Lender
(as may be amended from time to time, the "Pledge Agreement").
5. Conditions to Advances, Use of Proceeds, Covenants. Amounts shall be
advanced to Borrower under this Note and Agreement solely in accordance
with the terms and conditions set forth in this Note and Agreement,
including the Schedules attached hereto and incorporated herein by
reference. Borrower shall use the proceeds of any amount advanced under
this Note and Agreement solely for the purposes set forth in the
Schedules hereto or the applicable Borrowing Request. Until the
termination of this Note and Agreement and payment in full by Borrower
or forgiveness by Lender of all amounts outstanding under this Note and
Agreement, Borrower agrees that it shall (i) comply with and duly
perform all of its covenants, obligations and agreements set forth in
the Merger Agreement, so long as such agreement remains in full force
and effect, and the Pledge Agreement, which are hereby incorporated
mutatis mutandis herein by reference as if fully set forth herein; (ii)
comply with all of its covenants, obligations and agreements set forth
in Sections 4.01(a), (d), (e), (f), (g) and (i) of the Merger Agreement,
regardless of whether the Merger Agreement remains in full force and
effect; and (iii) not incur any Indebtedness (as defined in the Merger
Agreement) for borrowed money or guarantee any such Indebtedness of
another person or entity or enter into any arrangement having the
economic effect of the foregoing except as expressly set forth in
Section 4.01(f) of the Company Disclosure Schedule (as defined in the
Merger Agreement).
6. Representations and Warranties. Borrower represents and warrants to
Lender that as of the date hereof and as of any Advance Date (as defined
in Schedule A hereto):
a) Borrower is a corporation duly organized, validly existing and
in good standing under the laws of the jurisdiction of its
incorporation and has all requisite corporate power and
authority to execute, deliver and perform its obligations under
this Note and Agreement and the Pledge Agreement.
b) The execution, delivery and performance by Borrower of this Note
and Agreement and the Pledge Agreement have been duly authorized
by all necessary
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corporate action of Borrower, and each of this Note and
Agreement and the Pledge Agreement constitutes the legal, valid
and binding obligation of Borrower, enforceable against Borrower
in accordance with its terms.
c) No authorization, consent, approval, license, exemption of, or
filing or registration with, any governmental authority or
agency, or approval or consent of any other person or entity, is
required for the due execution, delivery or performance by
Borrower of this Note and Agreement or the Pledge Agreement
except for the Required Consent in the case of the Pledge
Agreement and Other Advances under the Note and Agreement.
d) The representations and warranties made by the Borrower (i) in
the Pledge Agreement are true and correct as of such date and
(ii) in Article II of the Merger Agreement (x) that are
qualified as to "Company Material Adverse Effect" (as such term
is defined in the Merger Agreement) are true and correct as of
such date and (y) that are not so qualified are true and correct
in all material respect as of such date, except for those
representations and warranties in Article II of the Merger
Agreement which address matters only as of a particular date
(which shall have been true and correct as of such date).
7. Events of Default. The occurrence of any one or more of the following
events shall constitute an "Event of Default" hereunder:
a) Borrower shall fail to pay any then outstanding principal when
due or any interest or other amount payable under this Note and
Agreement within five (5) business days of when due; or
b) Borrower shall fail in any material respect to perform any of
its other covenants, obligations or agreements contained in this
Note and Agreement, the Pledge Agreement or the Merger
Agreement, so long as such agreement remains in full force and
effect, and such failure shall continue for ten (10) business
days after written notice thereof by Lender; or
c) Any representation, warranty, certificate, or other statement
(financial or otherwise) made, deemed made or furnished by or on
behalf of Borrower in writing to Lender in connection with this
Note and Agreement, the Pledge Agreement or the Merger
Agreement, so long as such agreement remains in full force and
effect, or as an inducement to Lender to advance the sums under
this Note and Agreement, shall have been false or incorrect in
any material respect when made or deemed made; or
d) Borrower (i) shall fail to make any payment when due under the
terms of any bond, debenture, note or other evidence of
indebtedness, if any, individually in excess of $100,000 to be
paid by Borrower, and such failure shall continue beyond any
period of grace provided with respect thereto or (ii) shall
default in the observance or performance of any other agreement,
term or condition
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contained in any such bond, debenture, note or other evidence of
indebtedness providing for principal payments in excess of
$100,000; or
e) The holder or holders of any bond, debenture, note or other
evidence of indebtedness of Borrower providing for principal
payments in excess of $100,000 shall accelerate such
indebtedness to become due prior to its stated date of maturity;
or
f) Borrower shall (i) apply for or consent to the appointment of a
receiver, trustee, liquidator or custodian of itself or of all
or any part of its property; (ii) admit in writing its inability
to pay its debts generally as they mature; (iii) make a general
assignment for the benefit of its or any of its creditors; (iv)
be dissolved or liquidated in full or in part; (v) become
insolvent (as such term may be defined or interpreted under any
applicable statute); (vi) commence a voluntary case or other
proceeding seeking liquidation, reorganization or other relief
with respect to itself or its debts under any bankruptcy,
insolvency or other similar law now or hereafter in effect or
consent to any such relief or to the appointment of or taking
possession of its property by any official in an involuntary
case or other proceeding commenced against it; or (vii) take any
action for the purpose of effecting any of the foregoing; or
g) Proceedings for the appointment of a receiver, trustee,
liquidator or custodian of Borrower or of all or any material
part of its property, or an involuntary case or other
proceedings seeking liquidation, reorganization or other relief
with respect to Borrower or the debts thereof under any
bankruptcy, insolvency or other similar law now or hereafter in
effect, shall be commenced and an order for relief entered or
such proceeding shall not be dismissed or discharged within
sixty (60) days of commencement; or
h) A final judgment or final judgments for the payment of money,
which individually or in the aggregate, exceed $250,000 in
excess of the amount covered by insurance, shall be rendered
against Borrower and the same shall remain undischarged for a
period of thirty (30) days during which execution shall not be
effectively stayed; or any judgment, writ, assessment, warrant
of attachment, execution, levy or similar process shall be
issued or levied against any material part of the property of
Borrower and such judgment, writ, assessment, warrant of
attachment, execution, levy or similar process shall not be
released, stayed, vacated or otherwise dismissed within ten (10)
days after issue or levy; or
i) This Note and Agreement or the Pledge Agreement shall cease to
be, or be asserted by Borrower not to be, a legal, valid and
binding obligation of Borrower, enforceable in accordance with
its terms.
Upon the occurrence or existence of any Event of Default, Lender may
(A) at any time terminate any obligation to make loans or advance
sums to Borrower under this Note and Agreement; (B) at any time
declare all unpaid amounts owing or payable
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under this Note and Agreement to be immediately due and payable
without presentment, demand, protest or any other notice of any
kind, all of which are hereby expressly waived by Borrower; and/or
(C) exercise all rights and remedies available to Lender under this
Note and Agreement, the Pledge Agreement or applicable law;
provided, however, that upon the occurrence or existence of any
Event of Default described in clause (f) or (g) above, immediately
and without notice, (1) any obligation to make loans or advance sums
to Borrower under this Note and Agreement shall automatically
terminate and (2) all unpaid amounts owing or payable under this
Note and Agreement shall automatically become immediately due and
payable, without presentment, demand, protest or any other notice of
any kind, all of which are hereby expressly waived by Borrower.
8. General.
a) This Note and Agreement shall become effective as of the date
hereof, provided that no Other Advance (as defined in Schedule A
to this Note and Agreement) shall be made prior to the date (the
"Pledge Effective Date") of receipt by Borrower of the consent
of the holders of Borrower's 8% Senior Secured Convertible
Notes due 2004 (the "Notes") to the extent required under the
First Supplemental Indenture, dated as of September 22, 2000,
between Borrower and U.S. Bank Trust National Association, as
Trustee with respect to the Notes (the "Required Consent").
b) Borrower agrees to pay on demand all reasonable costs and
expenses of Lender, and the reasonable fees and disbursements of
counsel, in connection with the enforcement or attempted
enforcement of, and preservation of any rights or interests
under, this Note and Agreement, including in any out-of-court
workout or other refinancing or restructuring or in any
bankruptcy case. Any amounts payable to Lender pursuant to this
Section 8(a) if not paid upon demand shall bear interest from
the date of such demand until paid in full, at the rate of
interest set forth herein in respect of principal outstanding
hereunder.
c) If at any time any provision of this Note and Agreement is or
becomes illegal, invalid or unenforceable in any respect,
neither the legality, validity nor enforceability of the
remaining provisions shall in any way be affected or impaired
thereby.
d) Any term, covenant, agreement or condition of this Note and
Agreement may be amended or waived if, in the case of an
amendment, such amendment is in writing and is signed by
Borrower and Lender and, in the case of a waiver, such waiver is
in writing and is signed by the party waiving such term,
covenant, agreement or condition. No failure or delay by Lender
in exercising any right or remedy hereunder shall operate as a
waiver thereof or of any other right or remedy nor shall any
single or partial exercise of any such right or remedy preclude
any other further exercise thereof or of any other right or
remedy. The acceptance at any time by Lender of any past due
amount hereunder shall not be deemed to be a waiver of the right
to require prompt payment when due of any other amounts
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then or thereafter due and payable. Unless otherwise specified
in such waiver or consent, a waiver or consent given hereunder
shall be effective only in the specific instance and for the
specific purpose for which given.
e) This Note and Agreement shall be binding upon and inure to the
benefit of Borrower, Lender, and their respective successors and
permitted assigns, except that Borrower may not assign or
transfer any of its rights or obligations under this Note and
Agreement without the prior written consent of Lender. Prior to
the occurrence of any Note Termination Event, Lender may at any
time sell, assign, or otherwise transfer only to any of its
affiliates or subsidiaries all or part of the obligations of
Borrower and Lender under this Note and Agreement. After the
occurrence of any Note Termination Event, Lender may at any time
sell, assign, or otherwise transfer to any other person or
entity all or part of the obligations of Borrower and Lender
under this Note and Agreement.
f) Nothing expressed in or to be implied from this Note and
Agreement is intended to give, or shall be construed to give,
any person or entity, other than the parties hereto and their
permitted successors and assigns hereunder, any benefit or legal
or equitable right, remedy or claim under or by virtue of this
Note and Agreement or under or by virtue of any provision
herein.
g) The words "hereof," "herein," "hereunder" and similar words
refer to this Note and Agreement as a whole (including the
Schedules attached hereto) and not to any particular provision
of this Note and Agreement.
h) Borrower hereby waives presentment, demand, protest, notice of
dishonor and all other notices, except as expressly provided
herein, any release or discharge arising from any extension of
time, discharge of a prior party, or other cause of release or
discharge other than actual payment in full hereof.
i) The section headings used in this Note and Agreement are for
convenience of reference only and are not to affect the
construction hereof or be taken into consideration in the
interpretation hereof.
j) This Note and Agreement shall be construed in accordance with
and governed by the laws of the State of New York.
[Signature Page Follows]
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IN WITNESS WHEREOF, the undersigned duly authorized officer of Borrower has
executed this Note and Agreement as of the date first set forth above.
AXYS PHARMACEUTICALS, INC.
By: /s/ Paul J. Hastings
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Name: Paul J. Hastings
Title: President & Chief Executive
Officer