Master Loan and Security Agreement

EXHIBIT 10.24


MASTER LOAN AND SECURITY AGREEMENT NO. 7110
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PHOENIXCOR, INC.
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MASTER LOAN AND SECURITY AGREEMENT
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This Master Loan and Security Agreement is entered into as of the 18th day of June, 1998 by and between Phoenixcor, Inc., a Delaware corporation, having its principal place of business at 65 Water Street, South Norwalk, Connecticut 06854 (the "Lender") and 3-Dimensional Pharmaceuticals, Inc. a Delaware corporation having its principal place of business at Eagleview Corporate Center, 665 Stockton Drive, suite 104, Exton, PA 19341 (the "Borrower". The Lender and Borrower agree as follows:


1. THE LOANS. Subject to the terms and conditions of this Agreement, the
--------- Lender will make one or more loans to the Borrower upon the terms and conditions set forth in this Agreement and each schedule which may be executed from time to time by the parties hereto and identified as a schedule to this Agreement (individually, a "Schedule" and collectively, the "Schedules") and all amendments, riders and supplements hereto and thereto. This Agreement and each Schedule which may be executed pursuant hereto shall constitute a separate and distinct Loan (each a "Loan" and collectively, the "Loans") repayable as provided in this Agreement and the applicable Schedule.


2. REPAYMENT OF LOANS. Borrower agrees to repay each Loan in the number
------------------ and the amount of successive monthly or quarterly installments (which shall be inclusive of interest, unless otherwise indicated) reflected in the applicable Schedule The advance payment with respect to a Schedule, if any, shall be due and payable upon execution of the Schedule. The first periodic installment (after excluding the advance payment, if any) with respect to a Schedule shall be due on the first (1st) day of the month following the advance of the Loan proceeds by Lender (the "Commencement Date"). The remaining periodic installment payments shall be due and payable on the same day of each successive month (or quarter, if quarterly payments are provided for in the Schedule). However, the parties may select another Commencement Date by noting the same in the Special Provisions section of the Schedule or by a separate writing signed by Lender and Borrower in which case the first periodic installment payment shall be due on such date. The Borrower authorizes the Lender to insert the Commencement Date in each Schedule, determined in accordance with the foregoing provisions. Unless otherwise specifically provided for in this Agreement or a Schedule, no Loan may be prepaid.


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3. SECURITY INTEREST. To secure payment when due of the Loan described in
----------------- the applicable Schedule, any interim fundings against such Loan, the performance of all other obligations of the Borrower under this Agreement and the applicable Schedule and the payment and performance of any and all other Schedules, debts, obligations and liabilities of Borrower to Lender whether direct, contingent or joint and several, now existing or hereafter arising, and any renewals, extensions and modifications of such debts, obligations and liabilities, Borrower hereby conveys, assigns and grants to Lender a continuing security interest in and to (i) the equipment described in the applicable Schedule and all amendments, riders and supplements thereto including all present and future additions, attachments, replacements, accessions and accessories thereto (the "Equipment"), and all substitutions and proceeds thereof including all proceeds of insurance thereon, and (ii) all other equipment, inventory, accounts, receivables, goods and assets of any and every kind including, but not limited to, all items of intangible property, wherever located now or hereafter belonging -to Borrower or in which Borrower has any interest, and all proceeds of the foregoing including insurance proceeds all of the above, collectively, the "Collateral".


BORROWER GRANTS LENDER THE AUTHORITY TO FILE THIS AGREEMENT AND EACH SCHEDULE OR A CARBON, PHOTOGRAPHIC OR OTHER REPRODUCTION THEREOF AS A FINANCING STATEMENT UNDER THE UNIFORM COMMERCIAL CODE WITH RESPECT TO ALL SECURITY INTERESTS CREATED HEREBY OR THEREBY.


4. FINANCING AGREEMENT. THIS AGREEMENT IS SOLELY A FINANCING AGREEMENT.
------------------- BORROWER ACKNOWLEDGES THAT THE EQUIPMENT HAS BEEN OR WILL BE SELECTED AND ACQUIRED SOLELY BY BORROWER AND THAT LENDER HAS NOT AND DOES NOT MAKE ANY WARRANTY WITH RESPECT TO ITS CONDITION, MERCHANTABILITY, SUITABILITY, CAPACITY OR FITNESS FOR ANY PARTICULAR PURPOSE.


5. UNCONDITIONAL OBLIGATION TO PAY, LATE PAYMENTS, ETC. All payments due
--------------------------------------------------- under a Schedule or hereunder shall be paid to Lender or its assigns without notice or demand and without abatement, offset, defense or counterclaim, at Lender's principal office shown above, or such other place as Lender or its assignee may designate in writing to Borrower. Borrower's obligation to pay the installments and other payments due under a Schedule or hereunder shall be absolute and unconditional and shall not be affected by reason of (i) any defect in, lack of fitness for use of, damage to, loss of possession or use of or destruction of, all or any of the Equipment described in such Schedule; (ii) the prohibition or other restriction against Borrower's use of said


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Equipment; or (iii) for any other cause, it being the agreement of the parties that the Loan and any other amount payable by Borrower under a Schedule or hereunder shall continue to be payable in all events in the manner and at the times provided in the Schedule and this Agreement.


All Loans shall become immediately due and payable in their entirety upon the occurrence of any Event of Default (as defined below). If any periodic installment payment or other payment is more than five (5) days late, Lender may, at its election, and subject to prior exercise of its right of acceleration, accept the payment in arrears and Borrower shall pay, as liquidated damages, a late charge equal to two (2%) percent per month (computed on the basis of a thirty (30) day month) on each defaulted payment from the due date thereof. In no event shall any amount payable to Lender as interest, including any sum held by a court of competent jurisdiction to be "interest" under applicable law, exceed, with respect to any period of time, the highest rate of interest permitted by applicable law. Any amount received by Lender determined to be in excess of the highest rate of interest received by Lender shall be refunded to Borrower.


6. REPRESENTA11ONS AND WARRANTIES. Borrower warrants and represents as
------------------------------ follows as of the date hereof and as of the date of execution of each Schedule: (i) unless it is an individual or sole proprietorship, Borrower is duty organized, validly existing and in good standing under applicable law and is duly qualified to do business wherever necessary to carry on its business and operations and to own Its property; (ii) Borrower has full power and authority to execute, deliver and perform its obligations under this Agreement and the Schedules; (iii) the execution and delivery of this Agreement and the Schedules has been authorized by all requisite corporate (or partnership or company) action; (iv) the execution, delivery and performance of this Agreement and, the Schedules do not and will not constitute a breach, default or violation of or under Borrower's articles of incorporation, by laws (partnership or limited liability company agreement) or any other agreement, law, order, lease, judgment or injunction to which it is a party or may be bound; (v) the Equipment is (or, on the applicable date the Loan proceeds are advanced, will be) lawfully owned by Borrower, free and dear of all liens, encumbrances and security interests and Borrower will warrant and defend title thereto against all claims; (vi) no consent or approval of, notice to, or filing with any governmental authority is required for Borrower to sign, deliver and perform under this Agreement and each Schedule; (vii) Borrower has not granted and will not grant to any one other than Lender a security interest in the Equipment and no Financing Statement or other instrument affecting the Equipment nor rights therein, bearing the signature of, or otherwise authorized by, Borrower is on file in any public office; (viii)


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there are no suits or proceedings pending or threatened, in court or before any commission, board or other administrative agency against or affecting Borrower which could, in the aggregate, have a material adverse effect on Borrower, its business or operations, or its ability to perform its obligations under this Agreement or the Schedules; (ix) all financial statements delivered and to be delivered to Lender in connection with the Loans are and will be true and correct in all material respects and have been and will be prepared in accordance with generally accepted accounting principles, and since the date of the most recent financial statements, there has been no material adverse change in Borrower's financial affairs or business operations and (x) Borrower has filed all tax returns required to be filed prior to the date of this Agreement taking into account any extension of time to file granted or permitted by the taxing authority and Borrower has paid or adequately provided for all taxes payable by it.


7. INDEMNIFICATION BY BORROWER. Borrower shall exonerate and indemnify
--------------------------- Lender against and hold it harmless from, any and all claims, actions, suits, proceedings, losses, judgments, damages and liabilities, including reasonable attorneys' fees and other costs and expenses in connection therewith or incident thereto, for death of or injury to any person whomsoever and for any loss of or damage to or destruction of any property whatsoever and irrespective of the legal basis of such claim or action including the doctrine of strict liability in tort or any similar doctrine, caused by or arising out of or allegedly caused by or arising out of, or in any way connected with or resulting from or allegedly resulting from any of the Equipment, including, without limiting the generality of the foregoing, the manufacture, selection, delivery, possession, use, operation, storage or maintenance at any time during the term hereof. Borrower shall also exonerate and indemnify Lender against and hold it harmless from any and all claims, actions, suits proceedings, losses, damages and liabilities, including reasonable attorney's fees, which Lender may suffer by reason of any patent infringement or alleged patent infringement in connection with the ownership, use or operation of the Equipment. This covenant of indemnity shall continue in full force and effect notwithstanding termination of this Agreement and all Schedules.


8. INSURANCE. Borrower shall, at its sole cost and expense, procure and
--------- maintain, so long as Borrower is indebted to Lender on any Loan or on any other liability (I) insurance insuring the Equipment against all risks of physical loss, theft, damage and destruction with extended coverage in an amount equal to the greater of (a) the amount of the Loan under the applicable Schedule or (b) the full replacement value of the Equipment with loss payable solely to Lender (and its assigns) and Borrower as their interests may appear and (ii) personal injury liability and property damage insurance with respect to the Equipment and the use thereof in such amounts as may be


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reasonably acceptable to Lender, and naming Lender (and its assigns) as additional insured. All insurers and coverages must be reasonably satisfactory to Lender. Borrower shall deposit said policy or policies or duplicates thereof or certificates of insurance with Lender and said policies shall provide that the policies may not be cancelled or altered without at least thirty (30) days prior notice to Lender and that the coverage shall not be invalidated against Lender because of any violation of any condition or warranty contained in any policy or application therefor by Borrower or by reason of any action or inaction of Borrower.


9. USE, REPAIRS. LOSS AND DAMAGE. Borrower agrees to maintain the
----------------------------- Equipment in good condition and repair and in accordance with the manufacturer's instructions, manuals and warranties (if any) and the requirements of any applicable insurance and any governmental authority having jurisdiction. Borrower shall pay for all fuel, service, inspection, overhaul, replacements, substitutions, material and labor necessary or desirable for the proper use, repair, operation and maintenance of the Equipment. All risks of loss, theft, damage or destruction of the Equipment shall be borne by Borrower and Borrower shall promptly notify Lender in writing of any such loss, theft, damage or destruction. In the event of any damage to the Equipment (unless the same is damaged beyond repair) Borrower shall, at its expense, place the same in good repair, condition and working order. If the Equipment set forth in a schedule or Schedules is determined by Lender to be lost, stolen or damaged beyond repair, or should said Equipment be confiscated, seized or the use and title thereof requisitioned to someone other than Borrower, Borrower shall immediately pay to Lender in addition to unpaid installments, late charges and other sums past due, an amount equal to the then remaining periodic installments due under the Schedule or Schedules covering the said Equipment discounted to present value at the rate of six (6%) percent per annum, less the net amount of the recovery, if any, received by Lender from insurance on the Equipment.


10. BORROWER'S ADDITIONAL COVENANTS. Borrower hereby covenants and agrees
------------------------------- as follows: (i) the Equipment will at all times be used only for business or commercial purposes and will be retained in Borrower's possession at its principal address set forth above (and not moved therefrom without Lender's prior written consent) unless otherwise specifically provided in a Schedule and, if another location is provided in a Schedule, the Equipment will be retained at and not moved from such other location without Lender's prior written consent; (ii) Borrower will keep the Equipment free and dear of liens, rights of distraint, charges and encumbrances or claims of the owner (or lessor) of the real estate in which the same is installed and any purchaser or present or future creditor obtaining a lien on such real estate and will, upon Lender's request, obtain and deliver a waiver of any


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of the foregoing as to the Equipment in recordable form supplied by the Lender (iii) except for the security interest granted hereby, Borrower will keep the Equipment free and clear of any security interest, lien or encumbrance and will not sell, lease, assign (by operation of law or otherwise), exchange or otherwise dispose of any of the Equipment; (iv) at the request of Lender, Borrower will affix conspicuous tags or plates on the Equipment containing a notation with Lender's name and will join Lender in execution of one or more Financing Statements pursuant to the Uniform Commercial Code to establish and maintain its security interest in the Collateral, in form satisfactory to Lender, and will pay any filing fees and/or costs with respect thereto and for lien searches; (v) Borrower authorizes Lender to file one or more Financing Statements covering the Collateral without Borrower's signature thereto for the purposes of continuation and/or termination of existing Financing Statements; (vi) Borrower will immediately notify Lender in writing of any change in its place(s) of business or the adoption or change of any trade name or fictitious business names and will execute any additional Financing Statements as Lender may request to perfect and maintain its security interest, but such notice shall not be deemed an authorization to move the Collateral without the prior written consent of Lender (vii) if any part of the Collateral is subject to a certificate of title law, Borrower will cause Lender's security interest to be noted thereon and promptly deliver such certificate of title to Lender (viii) Borrower will allow Lender and its representatives free access to the Collateral at all times during normal business hours, for purposes of inspection and, following an Event of Default, Lender shall have the right to demonstrate and show the Collateral to others; and (ix) Borrower will furnish to Lender (and will cause any guarantor of Borrower's obligations hereunder to furnish to Lender) (a) its unaudited quarterly Financial Statements within thirty (30) days after the end of its first three quarters in each fiscal year, (b)its certified annual Financial Statements within ninety (90) days after the close of its fiscal year, prepared by an independent certified public accountant in accordance with generally accepted accounting principles and (C) all other financial information and reports that Lender may from time to time reasonably request, including income tax returns of Borrower and any guarantor of Borrower's obligations hereunder.


11. CROSS COLLATERALIZAT1ON. Without in any way limiting the provisions of
----------------------- Section 3, as additional security for the Borrower's obligations under this Agreement and any Schedule, Borrower grants to Lender a further security interest in (I) all of the Equipment and Collateral set forth in every other Schedule and (ii) all machinery, equipment, goods and other collateral covered by any other lease, security agreement or loan and security agreement or other contract (collectively, the "other agreements") between the Borrower and the Lender


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whether such other agreements are now in existence or hereafter come into existence and whether such other agreements were originally documented in the name of Lender or assigned to Lender, and Borrower assigns to the Lender as security for its obligations under this Agreement and each Schedule, all of its rights, title and interest in surplus money to which Borrower may be entitled upon the sale or liquidation of the Equipment and Collateral set forth in every other Schedule and the machinery, equipment, goods and other collateral covered by the other agreements.


Anything above to the contrary notwithstanding, the benefit of the foregoing cross collateral provisions shall apply to the benefit of the Lender and any assignees holding a Schedule to this Agreement only to the extent that the Lender or such assignee is also the holder of one or more Schedules or other agreements and only to the extent that the Lender or such assignee has retained or received an assignment of the property described in such other Schedule(s) or other agreements.


12. TAXES AND OTHER CHARGES. Borrower agrees to pay promptly when due all
----------------------- registration, title, license and other fees and assessments and all sales, use, gross receipts, ad valorum, property and any and all other taxes imposed by any State, Federal, local or foreign government upon this Agreement or upon the ownership, shipment, delivery, use or operation of the Equipment or any Collateral or upon or measured by any payments due hereunder (other than taxes on or measured solely by the net income of Lender) and any fines, penalties and interest thereon.


13. BORROWER'S FAILURE TO PAY TAXES. INSURANCE, ETC. Should Borrower fail
----------------------------------------------- to make any payment or do any act as herein provided (including, but not limited to, payment of taxes or for insurance), Lender shall have the right, but not the obligation, and without releasing Borrower from any obligation hereunder, to make or do the same, and to pay any sum due in connection therewith or to contest or compromise any encumbrance, charge or lien and in exercising any such rights, incur any liability and expend whatever amounts in its absolute discretion it may deem necessary therefor. All sums so incurred or expended by Lender shall be payable by Borrower on demand with interest at the rate of two (2%) percent per month.


14. DEFAULT. The occurrence of any one of the following shall constitute
------- an Event of Default hereunder and under each Schedule: (I) Borrower fails to pay any periodic installment payment, or other amount due hereunder or under any Schedule, when the same becomes due and payable on or before the fifth (5th) day following the receipt of written notice of non-payment; (ii) Borrower removes, sells, transfers, encumbers, or parts with


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possession of the Equipment or any items of Equipment or attempts to do any of the foregoing; (iii) Borrower fails to maintain in force the required insurance on or in connection with any Equipment in compliance herewith or fails to provide loss payable protection to Lender in form satisfactory to Lender (iv) any representation or warranty made by Borrower herein or in any other agreement between the parties or in any statement given to Borrower shall be materially untrue; (v) Borrower fails to observe or perform any of the other obligations required to be observed or permitted by Borrower hereunder or under any Schedule or other obligation or indebtedness of Borrower to Lender otherwise owing or due by Borrower to Lender in any other agreement now or hereafter executed between the parties hereto, and such failure shall continue uncured for twenty (20) days after written notice thereof to Borrower; (vi) Borrower (a) fails to pay any indebtedness for borrowed money of the Borrower or any interest or premium thereon, when due (whether by scheduled maturity, required prepayment, acceleration, demand or otherwise) or (b) fails to perform or observe any term, covenant, or condition on its part to be performed or observed under any agreement or instrument relating to such indebtedness for borrowed money when required to have been performed or observed, if the effect of such failure to perform or observe is to accelerate or permit the acceleration of such indebtedness, or if any such indebtedness shall be declared to be due or payable or required to be prepaid (other than by a regularly scheduled required prepayment) prior to the stated maturity thereof; (vii) if Borrower leases the premises where the Equipment is located, a breach of such lease by Borrower and the commencement of an action by the landlord to evict Lessee or to repossess the premises; (viii) Borrower sells, leases or disposes of any of its assets except in the ordinary course of its business and except for the disposition of any obsolete property not useful to Borrower; (ix) Borrower ceases doing business as a going concern, makes an assignment for the benefit of creditors, admits in writing its inability to pay its debts as they become due, files a voluntary petition in bankruptcy, is adjudicated a bankrupt or an insolvent, files a petition seeking for itself any reorganization, arrangement, composition, readjustment, liquidation, dissolution or similar arrangement under any present or future statute, law or regulation or files an answer admitting the material allegations of a petition filed against it in any such proceeding, consents to or acquiesces in the appointment of a trustee, custodian, receiver or liquidator of it or of all or any substantial part of its assets or properties, or if Borrower takes any action looking to its dissolution or liquidation, or an order for relief is entered under the Bankruptcy Code against Borrower; (x) if within sixty (60) days after the commencement of any proceedings against Borrower seeking reorganization, arrangement, readjustment liquidation, dissolution or similar relief under any present or future statute, law or regulation, such proceedings, shall not have


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been dismissed or if within sixty (60) days after the appointment, without Borrower's acquiescence, of any trustee, custodian, receiver or liquidator of it or of all or any substantial part of Its assets and properties, such appointment shall not be vacated;(xi) Borrower sells all or substantially all of its assets or consolidates with or merges into any other entity or Borrower's stockholders, partners or members sell all or substantially all of their stock or partnership or membership interests without Lender's prior written consent, which consent shall not be unreasonably withheld if, in Lender's reasonable business judgment, the surviving or acquiring entity in the event of such merger or consolidation has a financial and credit standing equal to or greater than that of Borrower; or (xii) a guarantor of Borrower's obligations hereunder dies or is dissolved, or a petition in bankruptcy is filed by or against such guarantor of Borrower's obligations hereunder or such guarantor defaults in observing or performing any obligation owing under any guaranty or other agreement with Lender now or hereafter executed and such default continues uncured for twenty (20) days after written notice to Borrower and such guarantor.


15. REMEDIES. Upon the occurrence of an Event of Default, or at any time
-------- thereafter, Lender shall have the right to recover from Borrower, as liquidated damages for loss of a bargain and not as a penalty, a sum equal to the aggregate of the following: (a) all unpaid periodic installment payments and other sums due under this Agreement and the applicable Schedule to the date of default plus late charges, if any, (b) the present value (using a six (6%) percent per annum discount rate) of all remaining installments due under this Agreement and each Schedule; and (C) interest on the aggregate of the amounts specified in (a) and (b) from the date of default at the rate of two (2%) percent per month. In addition, Lender shall have the right to recover from Borrower any expenses paid or incurred by Lender in connection with the enforcement of Its rights under this Agreement and each Schedule and the repossession, transport, insuring, holding, repair, preparing for sale and subsequent sale, lease or other disposition of the Collateral including attorney fees and legal expenses as provided below (collectively, "Repossession Expenses"). BORROWER AND LENDER WAIVE ANY AND ALL RIGHTS TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING BASED UPON THIS AGREEMENT OR RELATING TO THE COLLATERAL. The Lender shall have all of the rights and remedies of a Secured Party under the Uniform Commercial Code and Lender is hereby authorized and empowered, with the aid and assistance of any person or persons, to enter any premises where the Collateral or any part thereof is, or may be, placed, and to assemble and/or remove same and/or to render it unusable and sell and dispose of such Collateral at one or more public or private sales upon at least seven (7) days written notice to Borrower for such sale. The Lender toward the payment of the


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Repossession Expenses shall apply the proceeds of each such sale; the liquidated damages specified above and other indebtedness secured hereby. Should the proceeds of any such sale be insufficient to fully pay all the items above mentioned Borrower hereby covenants and agrees to pay any deficiency to the Lender but nothing herein contained shall be construed to require Lender to sell any Collateral before seeking damages from Borrower. If Lender employs counsel for the purpose of effecting collection of any monies due hereunder (whether or not Lender has retaken the Collateral or any part hereof) or for the purpose of recovering the Collateral, or for the purpose of protecting Lender's interest because of any default of Borrower or because Lender is named as a party to a legal proceeding commenced against Borrower, whether or not Borrower is in default, Borrower agrees to pay Lender's reasonable attorney's fees and legal costs and expenses inclusive of those incurred in connection with bankruptcy proceedings, including relief from stay motions, cash collateral motions and disputes concerning any proposed disclosure statement and/or bankruptcy plan. The Lender may require Borrower to assemble the Collateral and make it available to Lender at a place to be designated by Lender which is reasonably convenient to both parties. All rights and remedies hereunder are cumulative and not ...