SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported) JANUARY 2, 2001
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SHAMAN PHARMACEUTICALS, INC.
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(Exact name of registrant as specified in charter)
DELAWARE 0-21022 94-3095806
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(State or other jurisdiction (Commission File Number) (IRS Employer
of incorporation) Identification No.)
213 EAST GRAND AVE., SOUTH SAN FRANCISCO, CALIFORNIA 94080
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (650) 952-7070
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NOT APPLICABLE
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(Former name or former address, if changed since last report.)
Item 3. Bankruptcy
On January 5, 2001, Shaman Pharmaceuticals, Inc filed a petition for protection
under Federal Bankruptcy law in the U. S. Bankruptcy Court, Northern District of
California. The Company will file a plan of reorganization as soon as
practicable, and will continue operations, including the sales of its products.
A press release is attached hereto and incorporated herewith.
Item 5. Other Events
On January 2, 2001, Shaman executed Secured Bridge Promissory Notes (the
"Bridge Notes") in the aggregate amount of $278,000 (including the extension of
some existing indebtedness) in favor of certain of its officers, directors,
stockholders and outside non-bankruptcy legal counsel. Each Bridge Note bears
interest at the annual rate of 6.35% per annum and is due and payable on or
before March 5, 2001. Each Bridge Note is secured by a lien on certain assets of
the Company. Also on January 2, 2001, Shaman executed Secured Promissory Notes
(the "IP Notes") in the aggregate amount of $561,845 (including the extension of
some existing indebtedness) in favor of certain of its officers, directors, and
stockholders. Each IP Note bears interest at the annual rare of 6.3% per annum
and is due and payable on or before June 20, 2001. Each IP Note is secured by a
lien on certain assets of the Company. The proceeds of both the Bridge Notes and
the IP Notes will be used to finance operations during the commencement of
bankruptcy proceedings and to pay the costs of the bankruptcy. Copies of the
relevant documents are attached hereto and incorporated herein.
Item 7. Exhibits
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(a) Exhibits
99.1 Press Release, dated January 5, 2001.
99.2 Security Agreement dated as of January 2, 2001 between the Company
and LDI Group, Inc., Freehan Partners, L.P., M. David Titus, Nezam
Tooloee, Lisa A. Conte, Bay Venture Counsel, L.L.P., and Steven King.
99.3 Absolute Assignment of Rents dated as of January 2, 2001 between the
Company and LDI Group, Inc., Freehan Partners, L.P., M. David Titus,
Nezam Tooloee, Lisa A. Conte, Bay Venture Counsel, L.L.P., and Steven
King.
99.4 Secured Bridge Promissory Note dated January 2, 2001 between the
Company and Lisa A. Conte.
99.5 Secured Bridge Promissory Note dated January 2, 2001 between the
Company and Bay Venture Counsel, L.L.P.
99.6 Secured Bridge Promissory Note dated January 2, 2001 between the
Company and Freehan Partners, L.P.
99.7 Secured Bridge Promissory Note dated January 2, 2001 between the
Company and LDI Group, Inc.
99.8 Secured Bridge Promissory Note dated January 2, 2001 between the
Company and Steven King.
99.9 Secured Bridge Promissory Note dated January 2, 2001 between the
Company and M. David Titus.
99.10 Secured Bridge Promissory Note dated January 2, 2001 between the
Company and Nezam Tooloee.
99.11 Intercreditor Agreement dated January 2, 2001 by and among the
Company and Alcamin Anstalt, Tradewinds Debt Strategies Fund, L.P.,
Nezam Tooloee, Lisa A. Conte.
99.12 Security Agreement dated January 2, 2001 between the Company and
Lisa A. Conte, Nezam Tooloee, Alcamin Anstalt, and Tradewinds Debt
Strategies Fund, L.P.
99.13 Security Promissory Note dated January 2, 2001 between the Company
and Lisa A. Conte
99.14 Security Promissory Note dated January 2, 2001 between the Company
and Nezam Tooloee
99.15 Security Promissory Note dated January 2, 2001 between the Company
and Alcamin Anstalt
99.16 Security Promissory Note dated January 2, 2001 between the Company
and Tradewinds Debt Strategies Fund, L.P.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
SHAMAN PHARMACEUTICALS, INC.
Date: January 23, 2001 By: /s/ Lisa A. Conte
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Lisa A. Conte
President and Chief Executive Officer
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EXHIBIT 99.1
Contact: Corporate Communications FOR IMMEDIATE RELEASE
(650) 952-7070
SHAMAN VOLUNTARILY FILES FOR CHAPTER 11 BANKRUPTCY PROTECTION
South San Francisco, CA - January 5, 2001 - Shaman Pharmaceuticals, Inc (OTC BB:
SHPH.OB) today announced that it has voluntarily filed a Chapter 11
reorganization petition for protection under Federal Bankruptcy law in the
United States Bankruptcy Court, Northern District of California. The decision to
seek protection was taken because the Company believes that a bankruptcy
reorganization provided the best means of maximizing the value of its real
estate lease and intellectual property for the benefit of its creditors and
shareholders. During the bankruptcy proceeding, Shaman will continue to operate
as a debtor in possession, and anticipates promptly filing a plan of
reorganization to restructure its debts.
Despite the filing, Shaman will continue to sell its products. Normal Stool
Formula (NSF) will be sold in the near term through General Nutrition Centers
(GNC) under a signed contract with GNC to market NSF as an anti-diarrheal
product to health food and specialty store channels. NSF and NSF-IB will also
continue to be sold through the Internet at www.NSFIB.com and at 800-987-9920,
as well as through specific retail operations such as The Medicine Shoppe
Pharmacies and other smaller retail pharmacies.
Timing of the bankruptcy filing was imposed by several factors, including the
need to preserve the value of the Company's below-market lease which may be
assigned in bankruptcy to generate substantial funds for the Company and to
provide clear title to buyers or licensees of certain key intellectual property
assets of the Company. The Company has engaged Roth Capital Partners to assist
with the sale or licensing of certain of its key assets, including discontinued
pharmaceutical products.
#
This press release contains, among other things, certain statements of a
forward-looking nature relating to Shaman's ability to advance its development
and research programs. Such statements involve a number of risk and
uncertainties including the Risk Factors listed in the Shaman Pharmaceuticals,
Inc.'s Annual Report on Form 10K and 10K/A for the year ended December 31, 1999.
These filings are available upon request at 650/952-7070. Also visit Shaman at
http://www.Shaman.com.
EXHIBIT 99.2
SECURITY AGREEMENT
THIS SECURITY AGREEMENT is entered into as of January 2, 2001, between
SHAMAN PHARMACEUTICALS, INC., a Delaware corporation ("DEBTOR"), for the benefit
of LDI Goup, Inc., Freehan Partners, L.P., M. David Titus, Nezam Tooloee, Lisa
A. Conte, and Steven King (each, individually a "SECURED Party").
RECITALS
A. Pursuant to the Secured Bridge Promissory Note of even date entered into
between Secured Party and Debtor (the "PROMISSORY NOTE"), Debtor has agreed to
pledge its assets as security for the payment of the Promissory Note.
B. Debtor is granting to Secured Party a fully perfected security interest
in Debtor's accounts receivable from all subtenants, tenants, and assignees of
Debtor's leased spaced and its present and future accounts (the "Collateral"),
to secure prompt payment and performance of the Obligations and Debtor's
obligations to Secured Party under this Agreement. This security interest will
be prior to any competing security interest, lien or other interest or claim in
such Collateral.
NOW, THEREFORE, in consideration of the foregoing and for other good and
valuable consideration, the receipt and adequacy of which are hereby
acknowledged, Debtor agrees as follows:
1. Grant of Security Interest. Debtor hereby assigns and grants to Secured
Party, to secure the due and timely payment and performance of the Obligations
(as defined below), whether now existing or hereafter arising, a first priority
perfected security interest in all of Debtor's right, title and interest,
whether now existing or hereafter arising, in and to the Collateral (as defined
below).
2. Collateral. The "COLLATERAL" consists of the following personal
property.
(a) All of Debtor's accounts receivable from all subtenants, tenants,
and assignees of Debtor's leased space (collectively, the "ACCOUNTS
RECEIVABLE").
(b) All of Debtor's present and future accounts, including, without
limitation, its bank accounts (collectively, the "ACCOUNTS").
(c) All proceeds (including all insurance proceeds) of the foregoing;
and
(d) All books, correspondence, records and other documents relating to
the above-described property.
As used in this Security Agreement, the term "PROCEEDS" includes whatever
is receivable or received when collateral or the proceeds thereof is paid,
collected or otherwise disposed of whether such disposition is voluntary or
involuntary, and all claims arising out of the damage, destruction, or decrease
in value of the collateral.
3. Obligations Secured. The "OBLIGATIONS" secured by the Collateral consist
of the full and timely payment and performance of all of debt evidenced by the
Promissory Note and the obligations under this Security Agreement. The terms
"indebtedness" and "obligations" are used in the most comprehensive sense and
include all obligations in connection with the Promissory Note to Secured Party.
4. Covenants of Debtor. Debtor agrees:
(a) to do all acts necessary to maintain, preserve and protect the
Collateral;
(b) not to change the location of the tangible Collateral, or to make
any change in Debtor's name or place of business, or, if Debtor has more than
one place of business, its head office, or office in which Debtor's records
relating to the Collateral are kept beyond Debtor's ordinary course of business
conduct;
(c) to procure and deliver from time to time any financing statements
and other writings necessary to perfect, maintain and protect its security
interest hereunder and the priority thereof and the purposes of this Agreement
and to deliver promptly to Secured Party all originals of Collateral or proceeds
consisting of chattel paper or instruments, if any;
(d) to keep separate, accurate and complete records of the Collateral
and to provide Secured Party with such records and other reports and
information relating to the Collateral as Secured Party may request from time to
time;
(e) not to surrender or lose possession of (other than to Secured
Party), sell, encumber, lease, rent, or otherwise dispose of or transfer
any Collateral or right or interest therein, except for routine disposal of
equipment being replaced in the ordinary course of business, and to keep the
Collateral free from all levies and security interests or other charges except
for security interests existing on the date of this Agreement with Lenders and
those other levies, security interests or other charges approved in writing by
Secured Party;
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(f) to pay promptly when due all federal, state, and local taxes or
assessments now or hereafter imposed on or affecting any Collateral and to
deliver to Secured Party, on demand, appropriate certificates attesting to the
payments;
(g) not to cause or suffer any of Debtor's representations and/or
warranties to become untrue;
(h) to appear in and defend any action or proceeding which may affect
its title to or Secured Party's interest in the Collateral;
(i) not to use or permit any Collateral to be used unlawfully or in
violation of this Agreement or any applicable law or regulation or policy of
insurance covering the Collateral; and
(j) to promptly supply Secured Party with such other information
concerning its affairs as Secured Party may request from time to time
hereafter and shall promptly notify Secured Party of any material adverse change
in Debtor's financial condition and any condition or event that constitutes a
breach of or event that constitutes an Event of Default under this Agreement;
and
5. Representations and Warranties. Debtor represents and warrants to
Secured Party that:
(a) Debtor is duly existing and in good standing in its state of
formation and qualified and licensed to do business in, and in good standing in,
any jurisdiction in which the conduct of its business or its ownership of
property requires that it be qualified. The execution, delivery and performance
of the Documents have been duly authorized, and do not conflict with Debtor's
formation documents, nor constitute an event of default under any material
agreement by which Debtor is bound.
(b) Debtor has good title to the Collateral, free of competing liens,
charges and encumbrances.
(c) No representation, warranty or other statement of Debtor in any
certificate or written statement given to Secured Party contains any untrue
statement of a material fact or omits to state a material fact necessary to make
the statements contained in the certificates or statements not misleading as of
the date made.
(d) The exact corporate name of Debtor is Shaman Pharmaceuticals, Inc.,
a Delaware corporation.
(e) Debtor's principal place of business and chief executive office is
located at 213 East Grand Avenue, South San Francisco, California 94080-4812.
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Debtor maintains all of its records with respect to the Collateral at that
address. Debtor has not at any time within the past four (4) months maintained
its chief executive office or its records with respect to the Collateral at any
other location. All tangible Collateral is and will be located in the State of
California except.
6. Default. Debtor will be in default hereunder if:
(a) Debtor materially breaches any provision of this Security Agreement
and such breach continues after written notice from Secured Party for a period
of thirty (30) days or such longer period of time reasonably required to remedy
the breach, provided Debtor promptly commences remedial action within thirty
(30) days of such written notice and thereafter diligently pursues the remedial
action.
(b) If a material portion of Debtor's assets are attached, seized or
levied upon or if Debtor begins an insolvency proceeding or an insolvency
proceeding is begun against Debtor (an "INSOLVENCY EVENT").
(c) If any warranty or representation in any Document or in any writing
delivered to Secured Party is untrue or inaccurate in any material respect.
(d) Any material misrepresentation or material misstatement existing now
or hereafter in any warranty or representation in any such guaranty in
connection with such guaranty.
(e) Debtor fails to pay any amounts when due under the Promissory Note
or breaches any other provision of the Promissory Note.
7. Remedies. Upon a default as defined in Section 6 above, Secured Party
may, at Secured Party's option declare all Obligations immediately due and
payable:
(a) Exercise with respect to the Collateral all of the remedies of a
secured party under Article 9 of the California Commercial Code (including any
right to recover any deficiency from Debtor);
(b) Exercise any and all remedies available under law or in equity.
(c) Payment in full of Indebtedness at any time shall cure any and all
defaults, pursuant to which Secured Party shall relinquish, release and return
to Debtor any and all collateral in its possession or under its control.
No delay or omission to exercise any right or remedy of Secured Party upon
a default by Debtor will waive any right or remedy of Secured Party or be
construed as a waiver of any similar default that occurs later. Debtor waives
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any right to require Secured Party to proceed against any other person or to
exhaust any Collateral or to pursue any other remedy in Secured Party's power.
8. Miscellaneous.
(a) The terms of this Security Agreement will inure to the benefit of
and bind the parties hereto and their respective successors, assigns, executors,
heirs and legal representatives.
(b) This Security Agreement contains the entire security agreement
between Secured Party and Debtor and may be modified only by a writing signed by
Secured Party and Debtor. If any of the provisions of this Security Agreement
are held invalid or unenforceable, this Security Agreement will be construed as
if not containing the invalid or unenforceable provisions.
(c) This Security Agreement will be construed in accordance with and
governed by the laws of the State of California.
(d) Should any party hereto institute any action or proceeding to
enforce any provisions hereof, or for damages by reason of any alleged breach of
any provisions of this Agreement, or for a declaration of such party's rights or
obligations hereunder, or for any other judicial remedy, the prevailing party
shall be entitled to be reimbursed by the losing party all costs and expenses
incurred thereby, including but not limited to, reasonable attorney fees.
(e) All communications required or given under this Security Agreement
shall be given in writing to Secured Party or Debtor at the address for such
party set forth below, and shall be deemed given upon the earlier of actual
receipt by the party or three (3) days after posting in the U.S. mail, postage
prepaid, and duly addressed:
Secured Party: LDI Group, Inc.
1075 Hollywood Avenue
Salt Lake City, UT 84105
Freehan Partners, LP
591 Redwood Highway, Suite 2355
Mill Valley, CA 94941
M. David Titus
550 West C Street, Suite 2030
San Diego, CA 92101
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Nezam Tooloee
6600 Seabold Road
Bainbridge Island, WA 98110
Lisa A. Conte
32621 Mount Valentine Drive
Evergreen, CO 80439
Steven King
213 East Grand Avenue
South San Francisco, CA 94080
Bay Venture Counsel
1999 Harrison Street, Suite1300
Oakland, CA 94612
Debtor: Shaman Pharmaceuticals, Inc.
213 East Grand Avenue
South San Francisco, CA 94080-4812
With a copy to: Sharie L. Mendrey, Esq.
Farella Braun + Martel, LLP
Russ Building, 30th Floor
235 Montgomery Street
San Francisco, CA 94104
Either party may change the address to which notices shall be sent to such
party by providing written notice thereof to the other party in accordance with
the terms of this Section.
(f) Time is of the essence in each and every provision of this
Agreement.
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(g) Provided Debtor has performed and repaid the Obligations in full
and no Insolvency Event shall have occurred with respect to Debtor within the 90
day period following such performance and repayment in full, Secured Party shall
deliver to Debtor, within 10 days after the end of such 90-day period, executed
UCC termination statements in customary form and releases of any guaranty of the
Obligations then in effect.
IN WITNESS WHEREOF, the Debtor has executed this Security Agreement as of
the date and year first above written.
DEBTOR: Shaman Pharmaceuticals, Inc.
By: /s/ Steven R. King
---------------------------------
Steven King, its COO
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EXHIBIT 99.3
RECORDING REQUESTED BY AND
WHEN RECORDED MAIL TO
Farella Braun + Martel LLP
235 Montgomery Street
San Francisco, CA 94104
Attn: Sharie Mendrey, Esq.
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APN: 015-041-030 No transfer tax is due.
ABSOLUTE ASSIGNMENT OF RENTS
This Absolute Assignment of Rents ("Assignment") entered into as of January
2, 2001, by and between SHAMAN PHARMACEUTICALS, INC., a Delaware corporation,
having an address at 213 East Grand Avenue, South San Francisco, California
94080 ("Assignor") and its lenders identified on Exhibit A to this Assignment
("Assignees");
W I T N E S S E T H:
ARTICLE 1
DEFINITIONS
1.1 PARTIES. As used in this Assignment, the terms "Assignor" and
"Assignees" mean the parties above-identified by such designation and their
respective heirs, executors, administrators, successors and assigns. The
preceding sentence shall not be interpreted to authorize any transfer which is
otherwise prohibited by any agreement of such parties.
1.2 OTHER DEFINITIONS. As used in this Assignment, the terms hereafter
set forth shall have the respective meanings hereafter indicated.
"Event of Default" shall have the same meaning as the definition of such
phrase appearing in the Security Agreement.
"Indebtedness" means all monetary amounts from time to time owing by
Assignor to Assignee under the Note, under this Assignment and under the
Security Agreement, including, without limitation, all, if any, amendments of
this Assignment and all, if any, renewals, extensions, rearrangements and
modifications of the Note and of the Security Agreement.
"Leases" means all present and future leases, lease assignments, and
subleases with respect to which the leased premises of such Leases consist of
any portion of the Property.
"Note" means that certain Secured Bridge Promissory Note or Secured Bridge
Promissory Notes of even date executed by Assignor, as "Maker," bearing interest
and being payable to the order of one or more of the Assignees, as "Payee," in
installments in accordance with the terms and provisions therein set forth.
"Property" means the premises described on attached Exhibit "B" together
with all improvements, rights, appurtenances, personalty and any other property
which may be secured by the Security Agreement presently or hereafter situated
on such land.
"Rents" means all rent (including, without limitation, fixed rent, minimum
rent and percentage rent, if any) and all other monetary amounts of every type
(including, without limitation, damages for breach or early termination of such
Leases) which are from time to time payable by Tenants under any of the Leases
(at the Property) to Assignor (as landlord, sublandlord or lease assignor) under
the Leases or which are otherwise receivable by Assignor with respect to the
Leases or Property and all of such previously mentioned sums which are from time
to time payable by guarantors of the obligations of Tenants to Assignor (as
landlord) under the Leases and all amounts payable by Tenants (and guarantors
for Tenants) to Assignor (as landlord) under the provisions of the Bankruptcy
Code as amended from time to time.
"Security Agreement" means that Security Agreement or Security Agreements
of even date executed Assignor, as "Debtor," and one or more of the Assignees as
"Secured Party" securing the Indebtedness evidenced by the Notes and creating a
security interest in certain property of Assignor. This Assignment is not a
security agreement, in view of the fact that this Assignment provides for an
absolute assignment of Rents, not a collateral assignment of Rents.
"Tenants" means any tenant, subtenant, or assignee of Assignor's lease in
connection with any portion of the Property, including without limitation any
assignee of Assignee's lease in bankruptcy.
ARTICLE 2
ASSIGNMENT
2.1 ABSOLUTE ASSIGNMENT. For and in consideration of the sum of Ten and
No/100 Dollars ($10.00) and other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged and confessed, Assignor does
hereby absolutely assign, transfer, and set over to Assignee the Rents.
2.2 INCIDENTS OF ASSIGNMENT. This Assignment is absolute, unconditional
and immediately effective. This Assignment does not collaterally transfer the
Rents to Assignee and does not grant Assignee a lien on the Rents; instead,
this Assignment absolutely vests title to the Rents in Assignee and constitutes
Assignee as the owner of the Rents in accordance with the terms and provisions
of this Assignment. It shall never be necessary for Assignee to institute legal
proceedings of any kind to enforce the provisions of this Assignment.
ARTICLE 3
COVENANTS, REPRESENTATIONS AND
WARRANTIES OF ASSIGNOR
3.1 COVENANTS OF ASSIGNOR. Assignor hereby unconditionally covenants and
agrees as follows:
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3.1.1 to use best efforts to observe, perform and discharge,
diligently and punctually, all the obligations imposed upon the landlord under
the Leases and not to do or permit to be done anything to impair the Leases or
the Rents obligations or any of the other obligations of the tenants under the
Leases; and Assignor shall give prompt notice to Assignee of any failure on the
part of the Assignor to observe, perform and discharge, with respect to Leases
involving more than 25% of the Property in Aggregate, any of Assignor's
obligations under this paragraph or under any other portion of this Assignment;
3.1.2 not to grant any period of free rental or abated rental under
any of the Leases except as may be part of a customary marketing plan in the
ordinary course of business;
3.1.3 until payment of the Indebtedness in full, not to execute any
other assignment of Rents (whether absolute or collateral) arising or accruing
from the Leases or from the Property;
3.1.4 to execute and deliver at the request of Assignee all such
reasonable further assurances and written instruments and take all such other
reasonable action with respect to the Property as Assignee shall from time
to time request in writing in order to carry out the purpose and intent of this
Assignment;
3.1.5 to use its best efforts to enforce, in the name of Assignor (as
landlord), and at the cost, expense and risk of Assignor, the performance of
each and every obligation, term, covenant, condition and agreement in the Leases
to be performed by any Tenant; and Assignor (as landlord) shall appear in and
defend any action or proceeding arising under, occurring out of or in any manner
connected with the Leases or the obligations, duties or liabilities of Assignor
(as landlord) and any tenant thereunder, and, upon request by Assignee, Assignor
will do so in the name and on behalf of Assignee;
3.1.6 not to waive, excuse, discount, setoff, compromise or in any
manner release or discharge any tenant under any Lease (or any guarantor for any
such tenant) of and from any monetary or other obligations, covenants,
conditions and agreements to be kept, observed and performed by such tenant (or
guarantor for such tenant), including, without limitation, the obligation to pay
Rents thereunder, in the manner and at the time and place specified therein;
3.1.7 not to intentionally incur any indebtedness to any Tenant (or
guarantor for any Tenant) under any of the Leases unless each such Tenant (or
guarantor) contemporaneously expressly waives in writing any right to offset
against (or recoup) any portion of such indebtedness from Rents; and
3.1.8 if requested by Assignee, to deliver to Assignee executed
copies of all Leases when executed upon all or any part of the Property.
3.2 REPRESENTATIONS AND WARRANTIES OF ASSIGNOR. Assignor unconditionally
represents and warrants to Assignee now and continuing throughout the term of
this Assignment as follows:
3.2.1 Assignor is the tenant of the leasehold Property
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3.2.2 Except for Assignor's landlord, no other person, firm,
corporation or entity has any right, title or interest in the Rents; and
3.2.3 no Rents provided for under any of the Leases have been
previously sold, assigned, transferred, mortgaged or pledged.
ARTICLE 4
TERMINABLE LICENSE OF ASSIGNOR
TO COLLECT RENTS
4.1 TERMINABLE LICENSE OF ASSIGNOR. So long as there exists no Event of
Default, Assignor shall have and is hereby granted the license (the "License")
to receive and collect all of the Rents. At the request of Assignee, Assignor
shall, at all times, keep Assignee advised in writing of the names and locations
of each depository at which such accounts containing the Rents are maintained as
well as the account number of each such account and, within seven (7) days
following notice from Assignee to Assignor, Assignor shall advise Assignee of
the balance in each such account to the extent that such information may be
requested by Assignee. Assignor acknowledges and agrees that the License does
not negate or otherwise affect the status of this Assignment as being an
absolute assignment fully transferring to Assignee title to the Rents.
4.2 AUTOMATIC TERMINATION OF ASSIGNOR'S LICENSE. Upon the occurrence of
any Event of Default, the aforesaid License of Assignor under Section 4.1
of this Agreement shall, ipso facto, automatically terminate without the
necessity that Assignee give Assignor any nature of notice or institute against
Assignor any nature of legal proceedings or take any other action. Upon the
occurrence of any such Event of Default and the resulting automatic termination
of such License, unless Assignee gives Assignor notice to the contrary (a matter
within the sole discretion of Assignee), all Rents thereafter received by
Assignor shall, in their entirety, be promptly paid over by Assignor to Assignee
and Assignee may exercise any and all legal and equitable remedies including,
without limitation, the remedies provided for under Article 5 of this
Assignment. Under no circumstances, however, does Assignee's legal ownership of
the rents depend upon the occurrence of any such Event of Default or the
resulting automatic termination of Assignor's License or the giving of notice by
Assignee or the filing of any lawsuit or the taking of any other action
whatsoever by Assignee, it being the agreement and intention of Assignor and
Assignee that this Assignment is absolute (not collateral) and immediately vests
ownership of the Rents in Assignee.
4.3 IMPACT ON TENANTS OF TERMINATION OF ASSIGNOR'S LICENSE.
Notwithstanding any of the other terms or provisions of this Assignment,
until receipt from Assignee of notice of the occurrence of an Event of Default,
each Tenant may pay rentals directly to Assignor. Upon receipt by any Tenant
under the Leases, however, of notice from Assignee that an Event of Default has
occurred, irrespective of whether Assignor contests the occurrence or existence
of such Event of Default or contests Assignee's entitlement to receive the
Rents, each such Tenant under the Leases is hereby authorized and directed and
required to pay directly to Assignee all Rents accruing after the date of the
Event of Default stated in such notice from Assignee (irrespective of any
contrary provision of the lease to such tenant or any other circumstances
whatsoever); and the receipt by Assignee of Rents shall constitute a release of
each Tenant paying such Rents to the extent of the amounts so paid to Assignee
by such tenant. The notice from Assignee to tenants referred to in this Section
4.3 is intended solely for the benefit of each Tenant and shall never inure to
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the benefit of Assignor or any party claiming through or under Assignor. The
receipt by a Tenant of any such notice from Assignee constitutes full
authorization and mandate for such tenant to make all future payment of Rents
directly to Assignee and each Tenant paying such future Rents to Assignee after
such notice from Assignee shall be permitted to rely on such notice and shall
have no liability to Assignor after such notice for any Rents so paid to
Assignee by such Tenant. In the event that any Tenant receiving any such notice
from Assignee does not timely pay such future Rents to Assignee, whether on
account of continued payment of such Rents by such Tenant to Assignor or
withholding of such Rents by such Tenant or such Tenant's paying such rents into
the registry of the court in connection with an interpleader or other action or
any other non-payment of such Rents to Assignee by any Tenant, such Tenant will
be liable to Assignee for the Rents not so paid to Assignee plus costs of court
plus attorneys' fees of Assignee. Whenever requested by Assignee, Assignor shall
promptly deliver to each Tenant a notice of this Assignment and that Assignee
has, subject to the terms and provisions of this Assignment, granted Assignor a
revocable (by Assignee) license to collect the Rents so long as there is no
Event of Default and containing the other terms and provisions hereinabove set
forth in this Section 4.3.
Assignor agrees that, upon the request by Assignee, the provisions of this
Section 4.3 shall be contained in each Lease thereafter executed by Assignor (as
landlord) and a Tenant.
ARTICLE 5
ARTICLE REMEDIES
5.1 REMEDIES. Assignor expressly acknowledges and agrees that upon or at
any time after the occurrence of an Event of Default, Assignee's right, title
and interest in and to the Leases and Rents shall be and remain absolute and
inviolate in accordance with the provisions of this Assignment. Moreover,
without limiting, altering, affecting or impairing in any manner or to any
extent the absolute right, title and interest of Assignee as provided herein,
upon the occurrence of such an Event of Default, Assignee shall have the
complete right, power and authority hereunder, then or thereafter, to exercise
and enforce any or all of the following rights and remedies:
5.1.1 To terminate the License and then and thereafter, without
taking possession of the Property, in Assignor's own name, to demand, collect,
receive, sue for, attach and levy on the Rents and give properreceipts, releases
and acquittances therefor, and after deducting all necessary and proper costs
and expenses of operation of the Property and collection, as determined by
Assignee, including attorneys' fees, and apply the net proceeds thereof,
together with any funds of Assignor deposited with Assignee, in reduction or
repayment of the Indebtedness and fulfillment of Assignor's other covenants,
duties and obligations under this Agreement and under the Security Agreement in
such order of priority as Assignee may, in its sole discretion, determine; and
5.1.2 To declare the unpaid principal balance on the Note, the unpaid
accrued interest and any other accrued but unpaid portion of the Indebtedness
immediately due and payable without any (or any further) notice of default,
notice of intent to accelerate, notice of acceleration, presentment, protest,
demand or action of any nature whatsoever (each of which hereby is expressly
waived by Assignor) whereupon the same shall become immediately due and payable
and, at Assignee's option, exercise all of the rights and remedies contained in
the Security Agreement.
5
5.2 EXCULPATION OF ASSIGNEE. The acceptance by Assignee of this
Assignment, and the exercise by Assignee of any of the rights, powers,
privileges and authority provided under this Agreement, shall not, prior to
action (if any) by Assignee in entering upon and taking possession of the
Property, be deemed or construed to constitute Assignee a "mortgagee in
possession," nor thereafter or at any time or in any event obligate Assignee to
appear in or defend any action or proceeding relating to the Leases, the Rents
or the Property or to take any action hereunder or to expend any money or incur
any expenses or perform or discharge any obligation, duty or liability of
Assignor (as landlord) under any Lease or to assume any obligation or
responsibility for any security deposits or other deposits delivered to Assignor
by any tenant which were not actually delivered by Assignor to Assignee, nor
shall Assignee be liable in any way for any injury or damage to persons or
property sustained by any person, firm or corporation in or about the Property.
Assignee shall, however, be liable for its acts or omissions with respect to the
Property after having taken possession thereof.
5.3 NO WAIVER OR ELECTION OF REMEDIES.
5.3.1 No Waiver: Neither the collection of the Rents by Assignee nor
application of the Rents by Assignee as provided for in this Assignment shall be
deemed to cure or to waive any Event of Default (except to the extent that
application cures an Event of Default which is non-payment) or to waive, modify
or affect any notice of default under the Security Agreement. If Assignee shall
thereafter elect to discontinue the exercise of any such right or remedy, the
same or any other right or remedy under this Agreement may be reasserted at any
time and from time to time following any subsequent Event of Default.
5.3.2 Election of Remedies: The failure of Assignee to assert any of
the terms, covenants and conditions of this Assignment for any period of
time or at any time or times shall not be construed or deemed to be a waiver of
any such right, and nothing contained in this Agreement nor anything done or
omitted to be done by Assignee pursuant to this Assignment shall be deemed to be
an election of remedies or a waiver by Assignee of any of its rights and
remedies under any of the Security Agreement or under the law. The right of
Assignee to collect and enforce the payment of the Indebtedness may be exercised
by the Assignee either prior to or simultaneously with or subsequent to any
action taken under this Assignment.
5.4 INDEMNIFICATION BY ASSIGNOR. ASSIGNOR HEREBY AGREES TO INDEMNIFY AND
HOLD ASSIGNEE FREE AND HARMLESS FROM AND AGAINST ANY AND ALL LIABILITY, LOSS,
COST, DAMAGE OR EXPENSE WHICH ASSIGNEE MAY INCUR UNDER OR BY REASON OF THIS
ASSIGNMENT, OR BY REASON OF ANY ACTION (EXCEPT FOR ASSIGNEE'S GROSS NEGLIGENCE
OR WILLFUL MISCONDUCT) TAKEN BY ASSIGNEE HEREUNDER, OR BY REASON OF OR IN
DEFENSE OF ANY AND ALL CLAIMS AND DEMANDS WHATSOEVER WHICH MAY BE ASSERTED
AGAINST ASSIGNEE ARISING OUT OF THE LEASES, INCLUDING SPECIFICALLY, BUT WITHOUT
LIMITATION, ANY CLAIM BY ANY TENANT OF CREDIT FOR RENTS PAID TO AND RECEIVED BY
ASSIGNOR, BUT NOT DELIVERED TO ASSIGNEE, FOR ANY PERIOD UNDER ANY LEASE EARLIER
THAN THE CALENDAR MONTH NEXT PRECEDING THE CALENDAR MONTH WITH RESPECT TO WHICH
SUCH RENTS PAYMENT IS DUE. IN THE EVENT ASSIGNEE INCURS ANY SUCH LIABILITY,
LOSS, COST, DAMAGE OR EXPENSE, THE AMOUNT THEREOF, INCLUDING ATTORNEYS' FEES,
6
WITH INTEREST THEREON AT THE DEFAULT RATE SPECIFIED IN THE NOTE, SHALL BE
PAYABLE BY ASSIGNOR TO ASSIGNEE IMMEDIATELY, WITHOUT DEMAND, AND SHALL BE
SECURED BY ALL THE SECURITY FOR THE PAYMENT AND PERFORMANCE OF THE INDEBTEDNESS.
ARTICLE 6
ARTICLE MISCELLANEOUS
6.1 POSSIBLE INCONSISTENCY BETWEEN ASSIGNMENT AND OTHER DOCUMENTS.
Notwithstanding that the Note or Security Agreement may indicate the transfer of
Rents by Assignor to Assignee to be a pledge or a collateral assignment or
assignment which is made as security or as further security for the payment or
performance of some monetary or other obligation of Assignor, such provisions
are not controlling and are intended to be and are hereby superseded by the
provisions of this Assignment indicating that the assignment of Rents is an
absolute assignment of Rents passing ownership of the Rents to Assignee subject
to the terms and provisions of this Assignment.
6.2 TERMINATION OF ASSIGNMENT. Upon payment in full of the Indebtedness,
performance of all of the covenants, duties and obligations of Assignor under
the Security Agreement and performance of all of the covenants, duties and
obligations of Assignor under this Assignment, this Assignment shall be and
become void and of no effect and, upon request of Assignor, Assignee shall
promptly execute and deliver to Assignor an instrument under which Assignee
releases its rights under this Assignment and sets forth the consent of Assignee
to each tenant's future payment of Rents to Assignor.
6.3 NON-LIABILITY OF ASSIGNEE FOR PERFORMANCE OF DUTIES OF ASSIGNOR UNDER
LEASES. Notwithstanding any of the other terms or provisions of this Assignment
or the Note or the Security Agreement, Assignee has not assumed or agreed to
perform and shall not be obligated to perform any of the covenants, duties or
obligations of Assignor (as landlord) under any of the Leases.
6.4 NOTICES. Any notice provided to be given or desired to be given by
either party to the other pursuant to this Assignment is required to be in
writing and transmitted either by U.S. Mail, Registered or Certified, adequate
postage prepaid, or by hand delivery (with receipt for delivery signed in behalf
of the recipient) or by delivery via Federal Express or other recognized
overnight courier service (with receipt for delivery signed in behalf of the
recipient), any such notice to be transmitted by the sender to the intended
recipient at the addresses hereinafter set forth (or hereafter designated as
provided in this Section ):
Address of Assignor: Shaman Pharmaceuticals, Inc.
213 East Grand Ave.
South San Francisco, CA 94080
With a copy to: Farella Braun + Martel LLP
235 Montgomery Street, 30th Floor
San Francisco, CA 94104
Attn: Sharie Mendrey, Esq.
7
Address of Assignee: [SEE EXHIBIT A]
Assignor and Assignee may change their respective addresses for purposes of
receipt of notices by giving notice to the other party in accordance with the
preceding provisions.
6.5 CAPTIONS. Titles and headings appearing in this Assignment are
intended solely for means of reference and are not intended to modify any of the
provisions of this Assignment.
6.6 SEVERABILITY. If any of the provisions of this Assignment and the
application thereof in any circumstances shall, to any extent, be invalid or
unenforceable, the remainder of this Assignment shall remain in full force and
effect and shall be valid and enforceable to the fullest extent permitted by
applicable law.
6.7 ENTIRE AGREEMENT. This Assignment constitutes the entire agreement
between Assignor and Assignee with respect to the subject matter of this
Assignment and may not be modified or amended in any manner except by a writing
executed by Assignor and Assignee and delivered.
6.8 TIME OF ESSENCE. Time is of the essence with respect to all of the
terms and provisions of this Assignment.
6.9 GOVERNING LAW. This Assignment sets forth the entire understanding of
Assignor and Assignee with respect to the subject matter hereof and shall be
governed by and construed and enforced in accordance with the internal laws of
the State of California (without giving effect to the conflict of law principles
thereof).
No delay on the part of Assignee in exercising any of its options, powers
or rights, or partial or single exercise thereof, whether arising hereunder,
under the Security Agreement or otherwise, shall constitute a waiver or affect
any right hereunder or thereunder. No waiver of any of such rights and no
modification, amendment or discharge of this Assignment shall be deemed to be
made unless the same shall be in writing, duly signed by Assignee and Assignor.
Each such waiver (if any) shall apply only with respect to the specific instance
involved and shall in no way impair the rights of Assignee or the obligations of
Assignor hereunder in any other respect at any other time.
THIS DOCUMENT CONTAINS CERTAIN INDEMNITY PROVISIONS INCLUDING WITHOUT
LIMITATION ARTICLE V SECTION 4.
8
IN WITNESS WHEREOF, Assignor has caused this Agreement to be executed as of
the day and year first above written.
ASSIGNOR:
SHAMAN PHARMACEUTICALS, INC.
By: /s/ Steven R. King
__________________________
Its: Chief Operating Officer
__________________________
9
EXHIBIT A
LIST OF LENDERS WITH ADDRESSES
LDI GROUP, INC.
1075 Hollywood Avenue
Salt Lake City, UT 84105
FREEHAN PARTNERS, LP
591 Redwood Highway, Suite 2355
Mill Valley, CA 94941
M. DAVID TITUS
550 West C Street, Suite 2030
San Diego, CA 92101
NEZAM TOOLOEE
6600 Seabold Road
Bainbridge Island, WA 98110
LISA A. CONTE
32621 Mount Valentine Drive
Evergreen, CO 80439
STEVEN KING
213 East Grand Avenue
South San Francisco, CA 94080
BAY VENTURE COUNSEL
1999 Harrison Street, Suite1300
Oakland, CA 94612
EXHIBIT B
LEGAL DESCRIPTION OF THE PREMISES
Property in the City of South San Francisco, County of San Mateo, State of
California, described as follows:
Parcel A as shown on Parcel Map 93-301 filed November 18, 1993, Book 67 of
parcel maps pages 5 and 6, San Mateo County Records.
CERTIFICATE OF ACKNOWLEDGMENT
State of ___________________________)
County of __________________________)
On ____________________________ before me, _____________________________,
personally appeared ____________________________________________________,
______ personally known to me, OR _____ proved to me on the basis of
satisfactory evidence to be the
person(s) whose name(s) is/are
subscribed to the within instrument
and acknowledged to me that he/she/
they executed the same in his/her/
their authorized capacity(ies), and
that by his/her/their signature(s)
on the instrument the person(s), or
the entity upon behalf of which the
person(s) acted, executed the
instrument.
WITNESS my hand and official seal
Signature _______________________
EXHIBIT 99.4
SECURED BRIDGE PROMISSORY NOTE
$20,000 January 2, 2001
------
San Francisco, California
FOR VALUE RECEIVED, Shaman Pharmaceuticals, Inc., a Delaware corporation,
("Payor") hereby unconditionally promises to pay to Lisa A. Conte, an
individual, or order ("Holder") in lawful money of the United States, at San
Francisco, California, the sum of twenty thousand dollars ($20,000), with
interest from the date hereof on the unpaid principal balance at the annual rate
of 6.35 percent per annum. The principal balance together with all accrued
interest thereon, is due and payable on or before March 5, 2001. There shall be
no penalty for prepayment of all or part of the principal balance.
This Note is the Note referred to in and is executed and delivered in
connection with that certain Security Agreement dated as of even date herewith
and executed and delivered by Payor in favor of Holder (as the same may from
time to time be amended, modified, or supplemented or restated, the "Security
Agreement"). Additional rights of Payor are set forth in the Security Agreement.
The full amount of this Note is secured by the collateral identified and
described as security therefor in the Security Agreement. Payor shall not,
directly or indirectly, create, permit, or suffer to exist, and shall defend the
collateral against and take such other action as is necessary to remove, any
lien on or in the collateral, or in any portion thereof, except as permitted
pursuant to the Security Agreement.
Unpaid interest shall be compounded monthly and shall thereafter bear like
interest as the principal, but such unpaid interest so compounded shall not
exceed an amount equal to simple interest on the unpaid principal at the maximum
rate permitted by law.
Each of the following events shall be an "Event of Default" hereunder:
(a) Payor fails to timely pay any of the amounts due under this
Note on the date the same becomes due and payable; or
(b) Payor defaults on an obligation contained in this Note or
Payor defaults under the Security Agreement;
Upon the occurrence of an Event of Default hereunder, all unpaid
principal, accrued interest and other amounts owing hereunder shall, at the
option of Holder be immediately due, payable and collectible by Company pursuant
to applicable law. Holder shall have all rights and may exercise any remedies
available to it under law, successively or concurrently.
Payor waives presentment and demand for payment, notice of dishonor,
protest and notice of protest of this Note, and shall pay all costs of
collection when incurred, including, without limitation, reasonable attorneys'
fees, costs and other expenses.
The right to plead any and all statutes of limitations as a defense to any
demands hereunder is hereby waived to the full extent permitted by law.
This Note shall be governed by, and construed and enforced in accordance
with, the laws of the State of California, excluding conflict of laws principles
that would cause the application of laws of any other jurisdiction. Time is of
the essence.
The provisions of this Note shall inure to the benefit of and be binding on
any successor to Payor and shall extend to any holder hereof. Payor shall not,
without the prior written consent of holder, assign any of its rights or
obligations hereunder.
If this Note is destroyed, lost or stolen, Payor will deliver a new note to
Holder on the same terms and conditions as this Note with a notation of the
unpaid principal balance and accrued and unpaid interest in substitution of the
prior Note. Holder shall furnish Payor with reasonable evidence that the Note
was destroyed, lost or stolen, and any security and indemnity that may be
reasonably required by Payor in connection with the replacement of this Note
PAYOR: Shaman Pharmaceuticals, Inc.
By: /s/ Steven R. King
--------------------------
Chief Operating Officer
2
EXHIBIT 99.5
SECURED BRIDGE PROMISSORY NOTE
$65,000 January 2, 2001
-------
San Francisco, California
FOR VALUE RECEIVED, Shaman Pharmaceuticals, Inc., a Delaware corporation,
("Payor") hereby unconditionally promises to pay to Bay Venture Counsel, L.L.P.,
Inc., a California limited liability partnership, or order ("Holder") in lawful
money of the United States, at San Francisco, California, the sum of sixty-five
thousand ($65,000), with interest from the date hereof on the unpaid principal
balance at the annual rate of 6.35 percent per annum. This Note evidences the
debt represented by the contemporaneous advance of $52,000 in new funds from
Holder to Payor (the "New Advance"), and evidences $13,000 of prior indebtedness
of Payor to Holder for prior advances to Payor (collectively, the "Prior
Advances"). The principal balance together with all accrued interest thereon, is
due and payable on or before March 5, 2001. There shall be no penalty for
prepayment of all or part of the principal balance.
This Note is the Note referred to in and is executed and delivered in
connection with that certain Security Agreement dated as of even date herewith
and executed and delivered by Payor in favor of Holder (as the same may from
time to time be amended, modified, or supplemented or restated, the "Security
Agreement"). Additional rights of Payor are set forth in the Security Agreement.
The full amount of this Note is secured by the collateral identified and
described as security therefor in the Security Agreement. Payor shall not,
directly or indirectly, create, permit, or suffer to exist, and shall defend the
collateral against and take such other action as is necessary to remove, any
lien on or in the collateral, or in any portion thereof, except as permitted
pursuant to the Security Agreement.
Unpaid interest shall be compounded monthly and shall thereafter bear like
interest as the principal, but such unpaid interest so compounded shall not
exceed an amount equal to simple interest on the unpaid principal at the maximum
rate permitted by law.
Each of the following events shall be an "Event of Default" hereunder:
(a) Payor fails to timely pay any of the amounts due under this
Note on the date the same becomes due and payable; or
(b) Payor defaults on an obligation contained in this Note or
Payor defaults under the Security Agreement;
Upon the occurrence of an Event of Default hereunder, all unpaid
principal, accrued interest and other amounts owing hereunder shall, at the
option of Holder be immediately due, payable and collectible by Company pursuant
to applicable law. Holder shall have all rights and may exercise any remedies
available to it under law, successively or concurrently.
Payor waives presentment and demand for payment, notice of dishonor,
protest and notice of protest of this Note, and shall pay all costs of
collection when incurred, including, without limitation, reasonable attorneys'
fees, costs and other expenses.
The right to plead any and all statutes of limitations as a defense to any
demands hereunder is hereby waived to the full extent permitted by law.
This Note shall be governed by, and construed and enforced in accordance
with, the laws of the State of California, excluding conflict of laws principles
that would cause the application of laws of any other jurisdiction. Time is of
the essence.
The provisions of this Note shall inure to the benefit of and be binding on
any successor to Payor and shall extend to any holder hereof. Payor shall not,
without the prior written consent of holder, assign any of its rights or
obligations hereunder.
If this Note is destroyed, lost or stolen, Payor will deliver a new note to
Holder on the same terms and conditions as this Note with a notation of the
unpaid principal balance and accrued and unpaid interest in substitution of the
prior Note. Holder shall furnish Payor with reasonable evidence that the Note
was destroyed, lost or stolen, and any security and indemnity that may be
reasonably required by Payor in connection with the replacement of this Note
PAYOR: Shaman Pharmaceuticals, Inc.
By: /s/ Steven R. King
--------------------------
Chief Operating Officer
2
EXHIBIT 99.6
SECURED BRIDGE PROMISSORY NOTE
$50,000 January 2, 2001
------
San Francisco, California
FOR VALUE RECEIVED, Shaman Pharmaceuticals, Inc., a Delaware corporation,
("Payor") hereby unconditionally promises to pay to Freehan Partners, L.P., a
California Limited Partnership, or order ("Holder") in lawful money of the
United States, at San Francisco, California, the sum of fifty thousand dollars
($50,000), with interest from the date hereof on the unpaid principal balance at
the annual rate of 6.35 percent per annum. The principal balance together with
all accrued interest thereon, is due and payable on or before March 5, 2001.
There shall be no penalty for prepayment of all or part of the principal
balance.
This Note is the Note referred to in and is executed and delivered in
connection with that certain Security Agreement dated as of even date herewith
and executed and delivered by Payor in favor of Holder (as the same may from
time to time be amended, modified, or supplemented or restated, the "Security
Agreement"). Additional rights of Payor are set forth in the Security Agreement.
The full amount of this Note is secured by the collateral identified and
described as security therefor in the Security Agreement. Payor shall not,
directly or indirectly, create, permit, or suffer to exist, and shall defend the
collateral against and take such other action as is necessary to remove, any
lien on or in the collateral, or in any portion thereof, except as permitted
pursuant to the Security Agreement.
Unpaid interest shall be compounded monthly and shall thereafter bear like
interest as the principal, but such unpaid interest so compounded shall not
exceed an amount equal to simple interest on the unpaid principal at the maximum
rate permitted by law.
Each of the following events shall be an "Event of Default" hereunder:
(a) Payor fails to timely pay any of the amounts due under this
Note on the date the same becomes due and payable; or
(b) Payor defaults on an obligation contained in this Note or
Payor defaults under the Security Agreement;
Upon the occurrence of an Event of Default hereunder, all unpaid
principal, accrued interest and other amounts owing hereunder shall, at the
option of Holder be immediately due, payable and collectible by Company pursuant
to applicable law. Holder shall have all rights and may exercise any remedies
available to it under law, successively or concurrently.
Payor waives presentment and demand for payment, notice of dishonor,
protest and notice of protest of this Note, and shall pay all costs of
collection when incurred, including, without limitation, reasonable attorneys'
fees, costs and other expenses.
The right to plead any and all statutes of limitations as a defense to any
demands hereunder is hereby waived to the full extent permitted by law.
This Note shall be governed by, and construed and enforced in accordance
with, the laws of the State of California, excluding conflict of laws principles
that would cause the application of laws of any other jurisdiction. Time is of
the essence.
The provisions of this Note shall inure to the benefit of and be binding on
any successor to Payor and shall extend to any holder hereof. Payor shall not,
without the prior written consent of holder, assign any of its rights or
obligations hereunder.
If this Note is destroyed, lost or stolen, Payor will deliver a new note to
Holder on the same terms and conditions as this Note with a notation of the
unpaid principal balance and accrued and unpaid interest in substitution of the
prior Note. Holder shall furnish Payor with reasonable evidence that the Note
was destroyed, lost or stolen, and any security and indemnity that may be
reasonably required by Payor in connection with the replacement of this Note
PAYOR: Shaman Pharmaceuticals, Inc.
By: /s/ Steven R. King
--------------------------
Chief Operating Officer
2
EXHIBIT 99.7
SECURED BRIDGE PROMISSORY NOTE
$10,000 January 2, 2001
------
San Francisco, California
FOR VALUE RECEIVED, Shaman Pharmaceuticals, Inc., a Delaware corporation,
("Payor") hereby unconditionally promises to pay to LDI Group, Inc., a Utah
corporation, or order ("Holder") in lawful money of the United States, at San
Francisco, California, the sum of ten thousand ($10,000), with interest from the
date hereof on the unpaid principal balance at the annual rate of 6.35 percent
per annum. The principal balance together with all accrued interest thereon, is
due and payable on or before March 5, 2001. There shall be no penalty for
prepayment of all or part of the principal balance.
This Note is the Note referred to in and is executed and delivered in
connection with that certain Security Agreement dated as of even date herewith
and executed and delivered by Payor in favor of Holder (as the same may from
time to time be amended, modified, or supplemented or restated, the "Security
Agreement"). Additional rights of Payor are set forth in the Security Agreement.
The full amount of this Note is secured by the collateral identified and
described as security therefor in the Security Agreement. Payor shall not,
directly or indirectly, create, permit, or suffer to exist, and shall defend the
collateral against and take such other action as is necessary to remove, any
lien on or in the collateral, or in any portion thereof, except as permitted
pursuant to the Security Agreement.
Unpaid interest shall be compounded monthly and shall thereafter bear like
interest as the principal, but such unpaid interest so compounded shall not
exceed an amount equal to simple interest on the unpaid principal at the maximum
rate permitted by law.
Each of the following events shall be an "Event of Default" hereunder:
(a) Payor fails to timely pay any of the amounts due under this
Note on the date the same becomes due and payable; or
(b) Payor defaults on an obligation contained in this Note or
Payor defaults under the Security Agreement;
Upon the occurrence of an Event of Default hereunder, all unpaid
principal, accrued interest and other amounts owing hereunder shall, at the
option of Holder be immediately due, payable and collectible by Company pursuant
to applicable law. Holder shall have all rights and may exercise any remedies
available to it under law, successively or concurrently.
Payor waives presentment and demand for payment, notice of dishonor,
protest and notice of protest of this Note, and shall pay all costs of
collection when incurred, including, without limitation, reasonable attorneys'
fees, costs and other expenses.
The right to plead any and all statutes of limitations as a defense to any
demands hereunder is hereby waived to the full extent permitted by law.
This Note shall be governed by, and construed and enforced in accordance
with, the laws of the State of California, excluding conflict of laws principles
that would cause the application of laws of any other jurisdiction. Time is of
the essence.
The provisions of this Note shall inure to the benefit of and be binding on
any successor to Payor and shall extend to any holder hereof. Payor shall not,
without the prior written consent of holder, assign any of its rights or
obligations hereunder.
If this Note is destroyed, lost or stolen, Payor will deliver a new note to
Holder on the same terms and conditions as this Note with a notation of the
unpaid principal balance and accrued and unpaid interest in substitution of the
prior Note. Holder shall furnish Payor with reasonable evidence that the Note
was destroyed, lost or stolen, and any security and indemnity that may be
reasonably required by Payor in connection with the replacement of this Note
PAYOR: Shaman Pharmaceuticals, Inc.
By: /s/ Steven R. King
--------------------------
Chief Operating Officer
2
EXHIBIT 99.8
SECURED BRIDGE PROMISSORY NOTE
$8,000 January 2, 2001
-----
San Francisco, California
FOR VALUE RECEIVED, Shaman Pharmaceuticals, Inc., a Delaware corporation,
("Payor") hereby unconditionally promises to pay to Steven King, an individual,
or order ("Holder") in lawful money of the United States, at San Francisco,
California, the sum of eight thousand dollars ($8,000), with interest from the
date hereof on the unpaid principal balance at the annual rate of 6.35 percent
per annum. The principal balance together with all accrued interest thereon, is
due and payable on or before March 5, 2001. There shall be no penalty for
prepayment of all or part of the principal balance.
This Note is the Note referred to in and is executed and delivered in
connection with that certain Security Agreement dated as of even date herewith
and executed and delivered by Payor in favor of Holder (as the same may from
time to time be amended, modified, or supplemented or restated, the "Security
Agreement"). Additional rights of Payor are set forth in the Security Agreement.
The full amount of this Note is secured by the collateral identified and
described as security therefor in the Security Agreement. Payor shall not,
directly or indirectly, create, permit, or suffer to exist, and shall defend the
collateral against and take such other action as is necessary to remove, any
lien on or in the collateral, or in any portion thereof, except as permitted
pursuant to the Security Agreement.
Unpaid interest shall be compounded monthly and shall thereafter bear like
interest as the principal, but such unpaid interest so compounded shall not
exceed an amount equal to simple interest on the unpaid principal at the maximum
rate permitted by law.
Each of the following events shall be an "Event of Default" hereunder:
(a) Payor fails to timely pay any of the amounts due under this
Note on the date the same becomes due and payable; or
(b) Payor defaults on an obligation contained in this Note or
Payor defaults under the Security Agreement;
Upon the occurrence of an Event of Default hereunder, all unpaid
principal, accrued interest and other amounts owing hereunder shall, at the
option of Holder be immediately due, payable and collectible by Company pursuant
to applicable law. Holder shall have all rights and may exercise any remedies
available to it under law, successively or concurrently.
Payor waives presentment and demand for payment, notice of dishonor,
protest and notice of protest of this Note, and shall pay all costs of
collection when incurred, including, without limitation, reasonable attorneys'
fees, costs and other expenses.
The right to plead any and all statutes of limitations as a defense to any
demands hereunder is hereby waived to the full extent permitted by law.
This Note shall be governed by, and construed and enforced in accordance
with, the laws of the State of California, excluding conflict of laws principles
that would cause the application of laws of any other jurisdiction. Time is of
the essence.
The provisions of this Note shall inure to the benefit of and be binding on
any successor to Payor and shall extend to any holder hereof. Payor shall not,
without the prior written consent of holder, assign any of its rights or
obligations hereunder.
If this Note is destroyed, lost or stolen, Payor will deliver a new note to
Holder on the same terms and conditions as this Note with a notation of the
unpaid principal balance and accrued and unpaid interest in substitution of the
prior Note. Holder shall furnish Payor with reasonable evidence that the Note
was destroyed, lost or stolen, and any security and indemnity that may be
reasonably required by Payor in connection with the replacement of this Note
PAYOR: Shaman Pharmaceuticals, Inc.
By: /s/ Steven R. King
--------------------------
Chief Operating Officer
2
EXHIBIT 99.9
SECURED BRIDGE PROMISSORY NOTE
$100,000 January 2, 2001
-------
San Francisco, California
FOR VALUE RECEIVED, Shaman Pharmaceuticals, Inc., a Delaware corporation,
("Payor") hereby unconditionally promises to pay to M. David Titus, an
individual, or order ("Holder") in lawful money of the United States, at San
Francisco, California, the sum of one hundred thousand dollars ($100,000), with
interest from the date hereof on the unpaid principal balance at the annual rate
of 6.35 percent per annum. The principal balance together with all accrued
interest thereon, is due and payable on or before March 5, 2001. There shall be
no penalty for prepayment of all or part of the principal balance.
This Note is the Note referred to in and is executed and delivered in
connection with that certain Security Agreement dated as of even date herewith
and executed and delivered by Payor in favor of Holder (as the same may from
time to time be amended, modified, or supplemented or restated, the "Security
Agreement"). Additional rights of Payor are set forth in the Security Agreement.
The full amount of this Note is secured by the collateral identified and
described as security therefor in the Security Agreement. Payor shall not,
directly or indirectly, create, permit, or suffer to exist, and shall defend the
collateral against and take such other action as is necessary to remove, any
lien on or in the collateral, or in any portion thereof, except as permitted
pursuant to the Security Agreement.
Unpaid interest shall be compounded monthly and shall thereafter bear like
interest as the principal, but such unpaid interest so compounded shall not
exceed an amount equal to simple interest on the unpaid principal at the maximum
rate permitted by law.
Each of the following events shall be an "Event of Default" hereunder:
(a) Payor fails to timely pay any of the amounts due under this
Note on the date the same becomes due and payable; or
(b) Payor defaults on an obligation contained in this Note or
Payor defaults under the Security Agreement;
Upon the occurrence of an Event of Default hereunder, all unpaid
principal, accrued interest and other amounts owing hereunder shall, at the
option of Holder be immediately due, payable and collectible by Company pursuant
to applicable law. Holder shall have all rights and may exercise any remedies
available to it under law, successively or concurrently.
Payor waives presentment and demand for payment, notice of dishonor,
protest and notice of protest of this Note, and shall pay all costs of
collection when incurred, including, without limitation, reasonable attorneys'
fees, costs and other expenses.
The right to plead any and all statutes of limitations as a defense to any
demands hereunder is hereby waived to the full extent permitted by law.
This Note shall be governed by, and construed and enforced in accordance
with, the laws of the State of California, excluding conflict of laws principles
that would cause the application of laws of any other jurisdiction. Time is of
the essence.
The provisions of this Note shall inure to the benefit of and be binding on
any successor to Payor and shall extend to any holder hereof. Payor shall not,
without the prior written consent of holder, assign any of its rights or
obligations hereunder.
If this Note is destroyed, lost or stolen, Payor will deliver a new note to
Holder on the same terms and conditions as this Note with a notation of the
unpaid principal balance and accrued and unpaid interest in substitution of the
prior Note. Holder shall furnish Payor with reasonable evidence that the Note
was destroyed, lost or stolen, and any security and indemnity that may be
reasonably required by Payor in connection with the replacement of this Note
PAYOR: Shaman Pharmaceuticals, Inc.
By: /s/ Steven R. King
--------------------------
Chief Operating Officer
2
EXHIBIT 99.10
SECURED BRIDGE PROMISSORY NOTE
$25,000 January 2, 2001
------
San Francisco, California
FOR VALUE RECEIVED, Shaman Pharmaceuticals, Inc., a Delaware corporation,
("Payor") hereby unconditionally promises to pay to Nezam Tooloee, an
individual, or order ("Holder") in lawful money of the United States, at San
Francisco, California, the sum of twenty-five thousand dollars ($25,000), with
interest from the date hereof on the unpaid principal balance at the annual rate
of 6.35 percent per annum. The principal balance together with all accrued
interest thereon, is due and payable on or before March 5, 2001. There shall be
no penalty for prepayment of all or part of the principal balance.
This Note is the Note referred to in and is executed and delivered in
connection with that certain Security Agreement dated as of even date herewith
and executed and delivered by Payor in favor of Holder (as the same may from
time to time be amended, modified, or supplemented or restated, the "Security
Agreement"). Additional rights of Payor are set forth in the Security Agreement.
The full amount of this Note is secured by the collateral identified and
described as security therefor in the Security Agreement. Payor shall not,
directly or indirectly, create, permit, or suffer to exist, and shall defend the
collateral against and take such other action as is necessary to remove, any
lien on or in the collateral, or in any portion thereof, except as permitted
pursuant to the Security Agreement.
Unpaid interest shall be compounded monthly and shall thereafter bear like
interest as the principal, but such unpaid interest so compounded shall not
exceed an amount equal to simple interest on the unpaid principal at the maximum
rate permitted by law.
Each of the following events shall be an "Event of Default" hereunder:
(a) Payor fails to timely pay any of the amounts due under this
Note on the date the same becomes due and payable; or
(b) Payor defaults on an obligation contained in this Note or
Payor defaults under the Security Agreement;
Upon the occurrence of an Event of Default hereunder, all unpaid
principal, accrued interest and other amounts owing hereunder shall, at the
option of Holder be immediately due, payable and collectible by Company pursuant
to applicable law. Holder shall have all rights and may exercise any remedies
available to it under law, successively or concurrently.
Payor waives presentment and demand for payment, notice of dishonor,
protest and notice of protest of this Note, and shall pay all costs of
collection when incurred, including, without limitation, reasonable attorneys'
fees, costs and other expenses.
The right to plead any and all statutes of limitations as a defense to any
demands hereunder is hereby waived to the full extent permitted by law.
This Note shall be governed by, and construed and enforced in accordance
with, the laws of the State of California, excluding conflict of laws principles
that would cause the application of laws of any other jurisdiction. Time is of
the essence.
The provisions of this Note shall inure to the benefit of and be binding on
any successor to Payor and shall extend to any holder hereof. Payor shall not,
without the prior written consent of holder, assign any of its rights or
obligations hereunder.
If this Note is destroyed, lost or stolen, Payor will deliver a new note to
Holder on the same terms and conditions as this Note with a notation of the
unpaid principal balance and accrued and unpaid interest in substitution of the
prior Note. Holder shall furnish Payor with reasonable evidence that the Note
was destroyed, lost or stolen, and any security and indemnity that may be
reasonably required by Payor in connection with the replacement of this Note
PAYOR: Shaman Pharmaceuticals, Inc.
By: /s/ Steven R. King
--------------------------
Chief Operating Officer
2
EXHIBIT 99.11
INTERCREDITOR AGREEMENT
This Intercreditor Agreement (this "Intercreditor Agreement") is entered
into as of January 2, 2001, by and among Alcamin Anstalt, Tradewinds Debt
Strategies Fund, L.P, Nezam Tooloee, and Lisa A. Conte (collectively, the
"Lenders") and Shaman Pharmaceuticals, Inc., a Delaware corporation ("Shaman").
RECITALS
Lenders have agreed to advance additional funds to Shaman, and Shaman and
the Lenders have agreed to have separate amended and restated notes evidence
both certain prior indebtedness of Shaman to each of the Lenders as well as the
indebtedness for these new advances (the "Lender Notes"). Shaman has executed
and delivered the Lender Notes, together with a Security Agreement securing all
indebtedness under the Lender Notes (including for prior advances) by its
intellectual property and tangible assets relating to SP-303, SB-300, NSF and
NSF-IB, and to Shaman's products, inventory, and work in process that embody
that intellectual property (the "SP-303 Collateral") and to certain intellectual
property rights relating to its diabetes products (the "Diabetes Collateral")
(collectively, the SP-303 Collateral and Diabetes Collateral is the
"Collateral").
Lenders have agreed that should any of them exercise their rights under
the Security Documents or otherwise foreclose on the collateral, or should any
sale of the Collateral occur, with the proceeds to be distributed to the
creditors with security interests therein, then the parties' rights to the
proceeds will be as set forth in this Intercreditor Agreement.
NOW, THEREFORE, in consideration of the mutual promises contained herein,
and for other good and valuable consideration, the receipt and adequacy of which
is hereby acknowledged, Lenders agree as follows:
AGREEMENT
1. Lenders agree that their respective security interests in the SP-303
Collateral and Diabetes Collateral is and shall be of equal priority.
2. The priorities specified in Section 1 of this Agreement shall be
applicable irrespective of the time, manner or order of attachment or perfection
of security interests or the time or order of filing financing statements.
3. In any foreclosure, sale or liquidation of the Collateral, regardless of
whether conducted by any of the Lenders or all of them, or a third party,
Lenders agree to share the net proceeds of such sale or liquidation (after
reimbursement of their reasonable costs and expenses of such sale or
liquidation) as follows: First, in proportion to the ratio of the dollar amounts
of their respective New Advances identified in their respective Lender Notes
(the "New Advances" which include for purposes of this Intercreditor Agreement
the $250,000 in loans from Lender TradeWinds advanced to Shaman in November,
2000); and second, in proportion to the ratio of the dollar amounts of their
prior advances as reflected in their respective Lender Notes (the "Old
Advances"). In any transaction where the Lenders strictly foreclose on the
Collateral, retaining it satisfaction of their debts or acquire the Collateral
from Shaman in return in whole or part for forgiveness of the indebtedness to
them, the Lenders agree to share ownership in the Collateral so acquired (or in
the newly formed entity such collateral is contributed to) by calculating their
respective ownership shares by proportionate dollar indebtedness owed under the
Lender Notes, adjusted as follows: Their New Advances shall be double-weighted
(2x); and Old Advances shall be given single weight (1x).
4. Each of the Lenders agrees that if Shaman borrows at least $350,000 to
be secured by the Diabetes Collateral, or sells or transfer any interest in the
Diabetes Collateral for at least $350,000, then such Lenders shall release their
security interest in the Diabetes Collateral without any additional
consideration. Each Lender hereby irrevocably appoints Lisa Conte its, his, or
her attorney-in-fact to execute and deliver any documents releasing the Lenders'
lien in the Diabetes Collateral in accordance with this paragraph 4, including,
without limitation, the filing of a UCC-2 evidencing the release of such
Lenders' security interest in the Diabetes Collateral.
5. This Agreement is solely for the benefit of, and shall be binding on,
Lenders, Shaman and their respective successors and assigns. No other person or
entity shall have any right, benefit, priority or interest under this Agreement
or because of the existence of this Agreement.
6. This Agreement shall be governed by and construed in accordance with the
internal laws of the State of California.
7. This Agreement may be executed in counterparts, each of which so
executed shall be deemed an original, and said counterparts shall constitute one
and the same instrument.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
ALCAMIN ANSTALT TRADEWIND DEBT STRATEGIES FUND, LP
By: /s/ Gerardo Giugni By: /s/ Robert W. Scannell
__________________________ ___________________________
Name: Gerardo Giugni Name: Robert W. Scannell
__________________________ ___________________________
Title: Title: General Partner
__________________________ ___________________________
Nezam Tooloee LISA A. CONTE
By: /s/ Nezam Tooloee By: /s/ Lisa A. Conte
__________________________ ___________________________
SHAMAN PHARMACEUTICALS, INC.
By: /s/ Lisa A. Conte
____________________________
Its: President & CEO
____________________________
2
EXHIBIT 99.12
SECURITY AGREEMENT
THIS SECURITY AGREEMENT is entered into as of January 2, 2001, between
SHAMAN PHARMACEUTICALS, INC., a Delaware corporation ("DEBTOR"), for the benefit
of Lisa. A. Conte, Nezam Tooloee, Alcamin Anstalt, and Tradewind Debt Strategies
Fund, L.P. (each individually a "SECURED PARTY").
RECITALS
A. Pursuant to the Promissory Note of even date entered into between
Secured Party and Debtor (the "PROMISSORY NOTE"), Debtor has agreed to pledge
its assets as security for the payment of the Promissory Note.
B. Debtor is granting to Secured Party a fully perfected security interest
in its intellectual property and tangible assets relating to SP-303, SB-300, NSF
and NSF-IB, and to Debtor's patents, products, inventory, latex/raw material,
work in process, and customer lists that embody (without limitation) that
intellectual property AND its intellectual property, technology, royalty rights,
and tangible assets related to its diabetes program (the "Collateral"), to
secure prompt payment and performance of the Obligations and Debtor's
obligations to Secured Party under this Agreement. This security interest will
be prior to any competing security interest, lien or other interest or claim in
such Collateral. Each Secured Party has agreed under a separate Intercreditor
Agreement that their respective security interests in Debtor's assets shall be
of equal priority and have agreed to split any proceeds from potential
disposition of Debtor's assets or share ownership in the Collateral pursuant to
strict foreclosure as agreed in the Intercreditor Agreement attached hereto as
Exhibit A.
NOW, THEREFORE, in consideration of the foregoing and for other good and
valuable consideration, the receipt and adequacy of which are hereby
acknowledged, Debtor agrees as follows:
1. Grant of Security Interest. Debtor hereby assigns and grants to Secured
Party, to secure the due and timely payment and performance of the Obligations
(as defined below), whether now existing or hereafter arising, a first priority
perfected security interest in all of Debtor's right, title and interest,
whether now existing or hereafter arising, in and to the Collateral (as defined
below) other than Debtor's irrevocable licenses.
2. Collateral. The "COLLATERAL" consists of the following personal
property.
(a) All intellectual property rights of Debtor relating to SP-303,
SB-300, NSF and NSF-IB, including, without limitation, protocols and
methodology, Debtor's license agreement with Dr. Tempesta, and U.S. patent #
5,211,944, U.S. patent # 5,494,661, US patent application serial # 09/066,989,
US patent application serial # 09/243,197, US patent application serial #
09/364,248, Shaman docket # SHOBOT-08, and numerous related international and
national patent office actions/prosecutions ongoing in Europe, North America and
Asia (collectively, the "SP-303 INTELLECTUAL PROPERTY").
(b) Any and all goods, supplies, wares, merchandise, and other
tangible personal property, including customer lists, latex/raw material, work
in process, supplies and components, and finished goods that embody the SP-303
Intellectual Property, whether held for sale or lease or to be furnished under
any contract for service or so leased or furnished, and also including products
of and accessions to inventory, packing and shipping materials, and all
documents of title, whether negotiable or nonnegotiable, representing any of the
foregoing (collectively, the "INVENTORY").
(c) All rights of Debtor under its agreements for distribution of the
Inventory, including without limitation, Debtor's rights under an Agreement with
GNC.
(d) All intellectual property rights of Debtor relating to it Diabetes
program, including, without limitation, patents, technology, ethnobotanical
information, databases, and royalty rights, as set forth in Exhibit B
(collectively, the "DIABETES INTELLECTUAL PROPERTY"), subject only to an
irrevocable License to Debtor.
(e) Any and all goods, supplies, wares, and other tangible personal
property that embody the Intellectual Property, including supplies of raw plant
material, extracts, and isolated compounds, and all documents of title, whether
negotiable or nonnegotiable, representing any of the foregoing (collectively,
the "DIABETES INVENTORY").
(f) All replacements, modifications and accessions to any of the
foregoing, wherever located;
(g) All proceeds (including all insurance proceeds) of the foregoing;
and
(h) All books, correspondence, records and other documents relating to
the above-described property.
As used in this Security Agreement, the term "PROCEEDS" includes whatever
is receivable or received when collateral or the proceeds thereof is paid,
collected or otherwise disposed of whether such disposition is voluntary or
involuntary, and all claims arising out of the damage, destruction, or decrease
in value of the collateral.
3. Obligations Secured. The "OBLIGATIONS" secured by the Collateral consist
of the full and timely payment and performance of all of debt evidenced by the
Promissory Note and the obligations under this Security Agreement. The terms
"indebtedness" and "obligations" are used in the most comprehensive sense and
include all obligations in connection with the Promissory Note to Secured Party.
2
4. Covenants of Debtor. Debtor agrees:
(a) to do all acts necessary to maintain, preserve and protect the
Collateral;
(b) not to change the location of the tangible Collateral, except for
inventory in the ordinary course of business, or to make any change in Debtor's
name or place of business, or, if Debtor has more than one place of business,
its head office, or office in which Debtor's records relating to the Collateral
are kept beyond Debtor's ordinary course of business conduct;
(c) to procure and deliver from time to time any financing statements
and other writings necessary to perfect, maintain and protect its security
interest hereunder and the priority thereof and the purposes of this Agreement
and to deliver promptly to Secured Party all originals of Collateral or proceeds
consisting of chattel paper or instruments, if any;
(d) to keep separate, accurate and complete records of the Collateral
and to provide Secured Party with such records and other reports and information
relating to the Collateral as Secured Party may request from time to time;
(e) not to surrender or lose possession of (other than to Secured
Party), sell (except for inventory in the ordinary course of business),
encumber, lease, rent, or otherwise dispose of or transfer any Collateral or
right or interest therein, except for routine disposal of equipment being
replaced in the ordinary course of business, and to keep the Collateral free
from all levies and security interests or other charges except for security
interests existing on the date of this Agreement with Lenders and those other
levies, security interests or other charges approved in writing by Secured
Party;
(f) Debtor will keep all inventories in good and marketable condition,
free from material defects. Returns and allowances between Debtor and its
Account debtors will follow Debtor's customary practices;
(g) To pay promptly when due all federal, state, and local taxes or
assessments now or hereafter imposed on or affecting any Collateral and to
deliver to Secured Party, on demand, appropriate certificates attesting to the
payments;
(h) Not to cause or suffer any of Debtor's representations and/or
warranties to become untrue;
(i) To appear in and defend any action or proceeding which may affect
its title to or Secured Party's interest in the Collateral;
(j) Not to use or permit any Collateral to be used unlawfully or in
violation of this Agreement or any applicable law or regulation or policy of
insurance covering the Collateral; and
3
(k) To promptly supply Secured Party with such other information
concerning its affairs as Secured Party may request from time to time hereafter
and shall promptly notify Secured Party of any material adverse change in
Debtor's financial condition and any condition or event that constitutes a
breach of or event that constitutes an Event of Default under this Agreement;
and
5. Representations and Warranties. Debtor represents and warrants to
Secured Party that:
(a) Debtor is duly existing and in good standing in its state of
formation and qualified and licensed to do business in, and in good standing in,
any jurisdiction in which the conduct of its business or its ownership of
property requires that it be qualified. The execution, delivery and performance
of the Documents have been duly authorized, and do not conflict with Debtor's
formation documents, nor constitute an event of default under any material
agreement by which Debtor is bound.
(b) Debtor has good title to the Collateral, free of competing liens,
charges and encumbrances except for the lien of Lenders, the Tempesta agreement
regarding the SP-303 Intellectual Property, and the Irrevocable License to the
Debtor and prior licenses granted by Debtor with respect to certain intellectual
property rights, including those granted to Lipha, Lyonnaise Industrielle
Pharmaceutique, s.a., all regarding the Diabetes Intellectual Property.
(c) No representation, warranty or other statement of Debtor in any
certificate or written statement given to Secured Party contains any untrue
statement of a material fact or omits to state a material fact necessary to make
the statements contained in the certificates or statements not misleading as of
the date made.
(d) The exact corporate name of Debtor is Shaman Pharmaceuticals,
Inc., a Delaware corporation.
(e) Debtor's principal place of business and chief executive office is
located at 213 East Grand Avenue, South San Francisco, California 94080-4812.
Debtor maintains all of its records with respect to the Collateral at that
address. Debtor has not at any time within the past four (4) months maintained
its chief executive office or its records with respect to the Collateral at any
other location. All tangible Collateral is and will be located in the State of
California except for inventory shipped in the ordinary course of business.
6. Default. Debtor will be in default hereunder if:
(a) Debtor materially breaches any provision of this Security
Agreement and such breach continues after written notice from Secured Party
for a period of thirty (30) days or such longer period of time reasonably
required to remedy the breach, provided Debtor promptly commences remedial
4
action within thirty (30) days of such written notice and thereafter diligently
pursues the remedial action.
(b) If a material portion of Debtor's assets are attached, seized or
levied upon or if Debtor begins an insolvency proceeding or an insolvency
proceeding is begun against Debtor (an "INSOLVENCY EVENT").
(c) If any warranty or representation in any Document or in any
writing delivered to Secured Party is untrue or inaccurate in any material
respect.
(d) Any material misrepresentation or material misstatement existing
now or hereafter in any warranty or representation in any such guaranty in
connection with such guaranty.
(e) Debtor fails to pay any amounts when due under the Promissory Note
or breaches any other provision of the Promissory Note.
7. Remedies. Upon a default as defined in Section 6 above, Secured Party
may, at Secured Party's option declare all Obligations immediately due and
payable:
(a) Exercise with respect to the Collateral all of the remedies of a
secured party under Article 9 of the California Commercial Code (including any
right to recover any deficiency from Debtor);
(b) Exercise any and all remedies available under law or in equity.
(c) Payment in full of Indebtedness at any time shall cure any and all
defaults, pursuant to which Secured Party shall relinquish, release and return
to Debtor any and all collateral in its possession or under its control.
No delay or omission to exercise any right or remedy of Secured Party upon
a default by Debtor will waive any right or remedy of Secured Party or be
construed as a waiver of any similar default that occurs later. Debtor waives
any right to require Secured Party to proceed against any other person or to
exhaust any Collateral or to pursue any other remedy in Secured Party's power.
8. Miscellaneous.
(a) The terms of this Security Agreement will inure to the benefit of
and bind the parties hereto and their respective successors, assigns, executors,
heirs and legal representatives.
(b) This Security Agreement contains the entire security agreement
5
between Secured Party and Debtor and may be modified only by a writing signed by
Secured Party and Debtor. If any of the provisions of this Security Agreement
are held invalid or unenforceable, this Security Agreement will be construed as
if not containing the invalid or unenforceable provisions.
(c) This Security Agreement will be construed in accordance with and
governed by the laws of the State of California.
(d) Should any party hereto institute any action or proceeding to
enforce any provisions hereof, or for damages by reason of any alleged breach
of any provisions of this Agreement, or for a declaration of such party's
rights or obligations hereunder, or for any other judicial remedy, the
prevailing party shall be entitled to be reimbursed by the losing party all
costs and expenses incurred thereby, including but not limited to, reasonable
attorney fees.
(e) All communications required or given under this Security Agreement
shall be given in writing to Secured Party or Debtor at the address for such
party set forth below, and shall be deemed given upon the earlier of actual
receipt by the party or three (3) days after posting in the U.S. mail, postage
prepaid, and duly addressed:
Secured Party: Lisa A. Conte
32621 Mount Valentine Drive
Evergreen, CO 80439
Nezam Tooloee
6600 Seabold Road
Bainbridge Island, WA 98110
Alcamin Anstalt
Via Luciani 42
Roma, Italy 00197
Tradewind Debt Strategies Fund, LP
591 Redwood Highway
Suite 2355
Mill Valley, CA 94941
Debtor: Shaman Pharmaceuticals, Inc.
213 East Grand Avenue
South San Francisco, CA 94080-4812
With a copy to: Sharie L. Mendrey, Esq.
Farella Braun + Martel, LLP
Russ Building, 30th Floor
235 Montgomery Street
San Francisco, CA 94104
6
Either party may change the address to which notices shall be sent to such
party by providing written notice thereof to the other party in accordance with
the terms of this Section.
(f) Time is of the essence in each and every provision of this
Agreement.
(g) Provided Debtor has performed and repaid the Obligations in full
and no Insolvency Event shall have occurred with respect to Debtor within
the 90 day period following such performance and repayment in full, Secured
Party shall deliver to Debtor, within 10 days after the end of such 90-day
period, executed UCC termination statements in customary form and releases of
any guaranty of the Obligations then in effect.
IN WITNESS WHEREOF, the Debtor has executed this Security Agreement as of
the date and year first above written.
DEBTOR: Shaman Pharmaceuticals, Inc.
By: /s/ Steven R. King
---------------------------------
Steven R. King, its COO
7
EXHIBIT A
INTERCREDITOR AGREEMENT
8
EXHIBIT B
DIABETES INTELLECTUAL PROPERTY
9
EXHIBIT 99.13
SECURED PROMISSORY NOTE
$50,000 January 2, 2001
------
San Francisco, California
FOR VALUE RECEIVED, Shaman Pharmaceuticals, Inc., a Delaware corporation,
("Payor") hereby unconditionally promises to pay to Lisa A. Conte, an
individual, or order ("Holder") in lawful money of the United States, at San
Francisco, California, the sum of fifty thousand dollars ($50,000), with
interest from the date hereof on the unpaid principal balance at the annual rate
of 6.35 percent per annum. The principal balance together with all accrued
interest thereon, is due and payable on or before June 20, 2001. There shall be
no penalty for prepayment of all or part of the principal balance.
This Note is the Note referred to in and is executed and delivered in
connection with that certain Security Agreement dated as of even date herewith
and executed and delivered by Payor in favor of Holder (as the same may from
time to time be amended, modified, or supplemented or restated, the "Security
Agreement"). Additional rights of Payor are set forth in the Security Agreement.
The full amount of this Note is secured by the collateral identified and
described as security therefor in the Security Agreement. Payor shall not,
directly or indirectly, create, permit, or suffer to exist, and shall defend the
collateral against and take such other action as is necessary to remove, any
lien on or in the collateral, or in any portion thereof, except as permitted
pursuant to the Security Agreement.
Unpaid interest shall be compounded monthly and shall thereafter bear like
interest as the principal, but such unpaid interest so compounded shall not
exceed an amount equal to simple interest on the unpaid principal at the maximum
rate permitted by law.
Each of the following events shall be an "Event of Default" hereunder:
(a) Payor fails to timely pay any of the amounts due under this
Note on the date the same becomes due and payable; or
(b) Payor defaults on an obligation contained in this Note or
Payor defaults under the Security Agreement;
Upon the occurrence of an Event of Default hereunder, all unpaid
principal, accrued interest and other amounts owing hereunder shall, at the
option of Holder be immediately due, payable and collectible by Company pursuant
to applicable law. Holder shall have all rights and may exercise any remedies
available to it under law, successively or concurrently.
Payor waives presentment and demand for payment, notice of dishonor,
protest and notice of protest of this Note, and shall pay all costs of
collection when incurred, including, without limitation, reasonable attorneys'
fees, costs and other expenses.
The right to plead any and all statutes of limitations as a defense to any
demands hereunder is hereby waived to the full extent permitted by law.
This Note shall be governed by, and construed and enforced in accordance
with, the laws of the State of California, excluding conflict of laws principles
that would cause the application of laws of any other jurisdiction. Time is of
the essence.
The provisions of this Note shall inure to the benefit of and be binding
on any successor to Payor and shall extend to any holder hereof. Payor shall
not, without the prior written consent of holder, assign any of its rights or
obligations hereunder.
If this Note is destroyed, lost or stolen, Payor will deliver a new note to
Holder on the same terms and conditions as this Note with a notation of the
unpaid principal balance and accrued and unpaid interest in substitution of the
prior Note. Holder shall furnish Payor with reasonable evidence that the Note
was destroyed, lost or stolen, and any security and indemnity that may be
reasonably required by Payor in connection with the replacement of this Note
PAYOR: Shaman Pharmaceuticals, Inc.
By: /s/ Steven R. King
--------------------------
Chief Operating Officer
2
EXHIBIT 99.14
SECURED PROMISSORY NOTE
$25,000 January 2, 2001
------
San Francisco, California
FOR VALUE RECEIVED, Shaman Pharmaceuticals, Inc., a Delaware corporation,
("Payor") hereby unconditionally promises to pay to Nezam Tooloee, an
individual, or order ("Holder") in lawful money of the United States, at San
Francisco, California, the sum of twenty-five thousand dollars ($25,000), with
interest from the date hereof on the unpaid principal balance at the annual rate
of 6.35 percent per annum. The principal balance together with all accrued
interest thereon, is due and payable on or before June 20, 2001. There shall be
no penalty for prepayment of all or part of the principal balance.
This Note is the Note referred to in and is executed and delivered in
connection with that certain Security Agreement dated as of even date herewith
and executed and delivered by Payor in favor of Holder (as the same may from
time to time be amended, modified, or supplemented or restated, the "Security
Agreement"). Additional rights of Payor are set forth in the Security Agreement.
The full amount of this Note is secured by the collateral identified and
described as security therefor in the Security Agreement. Payor shall not,
directly or indirectly, create, permit, or suffer to exist, and shall defend the
collateral against and take such other action as is necessary to remove, any
lien on or in the collateral, or in any portion thereof, except as permitted
pursuant to the Security Agreement.
Unpaid interest shall be compounded monthly and shall thereafter bear like
interest as the principal, but such unpaid interest so compounded shall not
exceed an amount equal to simple interest on the unpaid principal at the maximum
rate permitted by law.
Each of the following events shall be an "Event of Default" hereunder:
(a) Payor fails to timely pay any of the amounts due under this
Note on the date the same becomes due and payable; or
(b) Payor defaults on an obligation contained in this Note or
Payor defaults under the Security Agreement;
Upon the occurrence of an Event of Default hereunder, all unpaid
principal, accrued interest and other amounts owing hereunder shall, at the
option of Holder be immediately due, payable and collectible by Company pursuant
to applicable law. Holder shall have all rights and may exercise any remedies
available to it under law, successively or concurrently.
Payor waives presentment and demand for payment, notice of dishonor,
protest and notice of protest of this Note, and shall pay all costs of
collection when incurred, including, without limitation, reasonable attorneys'
fees, costs and other expenses.
The right to plead any and all statutes of limitations as a defense to any
demands hereunder is hereby waived to the full extent permitted by law.
This Note shall be governed by, and construed and enforced in accordance
with, the laws of the State of California, excluding conflict of laws principles
that would cause the application of laws of any other jurisdiction. Time is of
the essence.
The provisions of this Note shall inure to the benefit of and be binding on
any successor to Payor and shall extend to any holder hereof. Payor shall not,
without the prior written consent of holder, assign any of its rights or
obligations hereunder.
If this Note is destroyed, lost or stolen, Payor will deliver a new note to
Holder on the same terms and conditions as this Note with a notation of the
unpaid principal balance and accrued and unpaid interest in substitution of the
prior Note. Holder shall furnish Payor with reasonable evidence that the Note
was destroyed, lost or stolen, and any security and indemnity that may be
reasonably required by Payor in connection with the replacement of this Note
PAYOR: Shaman Pharmaceuticals, Inc.
By: /s/ Steven R. King
--------------------------
Chief Operating Officer
2
EXHIBIT 99.15
AMENDED SECURED PROMISSORY NOTE
$231,844.94 January 2, 2001
----------
San Francisco, California
FOR VALUE RECEIVED, Shaman Pharmaceuticals, Inc., a Delaware corporation,
("Payor") hereby unconditionally promises to pay to Alcamin Anstalt, a
Liechtensteinian corporation, or order ("Holder") in lawful money of the United
States, at San Francisco, California, the sum of two hundred and thirty-one
thousand eight hundred and forty-four dollars and ninety-four cents
($231,844.94), with interest from the date hereof on the unpaid principal
balance at the annual rate of 6.35 percent per annum. This Note evidences the
debt represented by the contemporaneous advance of $10,000 in new funds from
Holder to Payor (the "New Advance"), and evidences $221,844.94 of prior
indebtedness (both principal and accrued interest) of Payor to Holder for prior
advances to Payor, including loans evidenced by a prior note or prior notes held
by Holder (collectively, the "Prior Advances"). This Note replaces any prior
notes issued by Payor to Holder. The principal balance together with all accrued
interest thereon, is due and payable on or before June 20, 2001. There shall be
no penalty for prepayment of all or part of the principal balance.
This Note is the Note referred to in and is executed and delivered in
connection with that certain Security Agreement dated as of even date herewith
and executed and delivered by Payor in favor of Holder (as the same may from
time to time be amended, modified, or supplemented or restated, the "Security
Agreement"). Additional rights of Payor are set forth in the Security Agreement.
The full amount of this Note is secured by the collateral identified and
described as security therefor in the Security Agreement. Payor shall not,
directly or indirectly, create, permit, or suffer to exist, and shall defend the
collateral against and take such other action as is necessary to remove, any
lien on or in the collateral, or in any portion thereof, except as permitted
pursuant to the Security Agreement.
Unpaid interest shall be compounded monthly and shall thereafter bear like
interest as the principal, but such unpaid interest so compounded shall not
exceed an amount equal to simple interest on the unpaid principal at the maximum
rate permitted by law.
Each of the following events shall be an "Event of Default" hereunder:
(a) Payor fails to timely pay any of the amounts due under this
Note on the date the same becomes due and payable; or
(b) Payor defaults on an obligation contained in this Note or
Payor defaults under the Security Agreement;
Upon the occurrence of an Event of Default hereunder, all unpaid
principal, accrued interest and other amounts owing hereunder shall, at the
option of Holder be immediately due, payable and collectible by Company pursuant
to applicable law. Holder shall have all rights and may exercise any remedies
available to it under law, successively or concurrently.
Payor waives presentment and demand for payment, notice of dishonor,
protest and notice of protest of this Note, and shall pay all costs of
collection when incurred, including, without limitation, reasonable attorneys'
fees, costs and other expenses.
The right to plead any and all statutes of limitations as a defense to any
demands hereunder is hereby waived to the full extent permitted by law.
This Note shall be governed by, and construed and enforced in accordance
with, the laws of the State of California, excluding conflict of laws principles
that would cause the application of laws of any other jurisdiction. Time is of
the essence.
The provisions of this Note shall inure to the benefit of and be binding on
any successor to Payor and shall extend to any holder hereof. Payor shall not,
without the prior written consent of holder, assign any of its rights or
obligations hereunder.
If this Note is destroyed, lost or stolen, Payor will deliver a new note
to Holder on the same terms and conditions as this Note with a notation of the
unpaid principal balance and accrued and unpaid interest in substitution of the
prior Note. Holder shall furnish Payor with reasonable evidence that the Note
was destroyed, lost or stolen, and any security and indemnity that may be
reasonably required by Payor in connection with the replacement of this Note
PAYOR: Shaman Pharmaceuticals, Inc.
By: /s/ Steven R. King
--------------------------
Chief Operating Officer
2
EXHIBIT 99.16
AMENDED SECURED PROMISSORY NOTE
$255,000 January 2, 2001
-------
San Francisco, California
FOR VALUE RECEIVED, Shaman Pharmaceuticals, Inc., a Delaware corporation,
("Payor") hereby unconditionally promises to pay to Tradewind Debt Strategies
Fund, L.P., a California limited partnership, or order ("Holder") in lawful
money of the United States, at San Francisco, California, the sum of two hundred
and fifty-five thousand dollars ($255,000), with interest from the date hereof
on the unpaid principal balance at the annual rate of 6.35 percent per annum.
This Note evidences the debt represented by the contemporaneous advance of
$5,000 in new funds from Holder to Payor (the "New Advance"), and evidences
$250,000 of prior indebtedness of Payor to Holder for prior advances to Payor,
including loans evidenced by prior notes held by Holder (collectively, the
"Prior Advances"). This Note replaces the prior notes issued by Payor to Holder.
The principal balance together with all accrued interest thereon, is due and
payable on or before June 20, 2001. There shall be no penalty for prepayment of
all or part of the principal balance.
This Note is the Note referred to in and is executed and delivered in
connection with that certain Security Agreement dated as of even date herewith
and executed and delivered by Payor in favor of Holder (as the same may from
time to time be amended, modified, or supplemented or restated, the "Security
Agreement"). Additional rights of Payor are set forth in the Security Agreement.
The full amount of this Note is secured by the collateral identified and
described as security therefor in the Security Agreement. Payor shall not,
directly or indirectly, create, permit, or suffer to exist, and shall defend the
collateral against and take such other action as is necessary to remove, any
lien on or in the collateral, or in any portion thereof, except as permitted
pursuant to the Security Agreement.
Unpaid interest shall be compounded monthly and shall thereafter bear like
interest as the principal, but such unpaid interest so compounded shall not
exceed an amount equal to simple interest on the unpaid principal at the maximum
rate permitted by law.
Each of the following events shall be an "Event of Default" hereunder:
(a) Payor fails to timely pay any of the amounts due under this
Note on the date the same becomes due and payable; or
(b) Payor defaults on an obligation contained in this Note or
Payor defaults under the Security Agreement;
Upon the occurrence of an Event of Default hereunder, all unpaid
principal, accrued interest and other amounts owing hereunder shall, at the
option of Holder be immediately due, payable and collectible by Company pursuant
to applicable law. Holder shall have all rights and may exercise any remedies
available to it under law, successively or concurrently.
Payor waives presentment and demand for payment, notice of dishonor,
protest and notice of protest of this Note, and shall pay all costs of
collection when incurred, including, without limitation, reasonable attorneys'
fees, costs and other expenses.
The right to plead any and all statutes of limitations as a defense to any
demands hereunder is hereby waived to the full extent permitted by law.
This Note shall be governed by, and construed and enforced in accordance
with, the laws of the State of California, excluding conflict of laws principles
that would cause the application of laws of any other jurisdiction. Time is of
the essence.
The provisions of this Note shall inure to the benefit of and be binding on
any successor to Payor and shall extend to any holder hereof. Payor shall not,
without the prior written consent of holder, assign any of its rights or
obligations hereunder.
If this Note is destroyed, lost or stolen, Payor will deliver a new note to
Holder on the same terms and conditions as this Note with a notation of the
unpaid principal balance and accrued and unpaid interest in substitution of the
prior Note. Holder shall furnish Payor with reasonable evidence that the Note
was destroyed, lost or stolen, and any security and indemnity that may be
reasonably required by Payor in connection with the replacement of this Note
PAYOR: Shaman Pharmaceuticals, Inc.
By: /s/ Steven R. King
--------------------------
Chief Operating Officer
2