Exhibit 10.2

 

TERM NOTE

 

$5,000,000

Durham, North Carolina

July 10, 2003

 

FOR VALUE RECEIVED, the undersigned, PARADIGM GENETICS, INC., a Delaware
corporation (“Borrower”) promises to pay to the order of SILICON VALLEY BANK, a
California-chartered bank (“Bank”), at such place as the holder hereof may
designate, in lawful money of the United States of America, the principal amount
of Five Million Dollars ($5,000,000) (the “Principal Sum”) in accordance with
the terms and conditions of the Loan and Security Agreement between Borrower and
Bank of even date herewith (as amended from time to time, the “Loan Agreement”).
The unpaid Principal Sum, together with interest thereon at the rate or rates
provided in the Loan Agreement, shall be payable as set forth in the Loan
Agreement.

 

This Note is “Term Note” described in the Loan Agreement, to which reference is
hereby made for a more complete statement of the terms and conditions under
which the Term Loan evidenced hereby is made. This Note is secured as provided
in the Loan Agreement. All capitalized terms used herein and not otherwise
defined shall have the meanings given to such terms in the Loan Agreement.

 

Borrower irrevocably waives the right to direct the application of any and all
payments at any time hereafter received by Bank from or on behalf of Borrower
and Borrower irrevocably agrees that Bank shall have the continuing exclusive
right to apply any and all such payments against the then due and owing
obligations of Borrower as Bank may deem advisable. In the absence of a specific
determination by Bank with respect thereto, all payments shall be applied in the
following order: (a) then due and payable fees and expenses; (b) then due and
payable interest payments and mandatory prepayments; and (c) then due and
payable principal payments and optional prepayments.

 

The occurrence of any one or more of the following events shall constitute an
event of default (individually, an “Event of Default” and collectively, the
“Events of Default”) under the terms of this Note:

 

(a)    The failure of Borrower to pay to Bank within three (3) Business Days of
when due any and all amounts payable by Borrower to Bank under the terms of this
Note; or

 

(b)    The occurrence of an Event of Default (as defined therein) under the
terms and conditions of any of the other Loan Documents.

 

Upon the occurrence of an Event of Default, at the option of Bank, all amounts
payable by Borrower to Bank under the terms of this Note shall immediately
become due and payable by Borrower to Bank without notice to Borrower or any
other person, and Bank shall have all of the

--------------------------------------------------------------------------------

rights, powers, and remedies available under the terms of this Note, any of the
other Loan Documents and all applicable laws. Borrower and all endorsers,
guarantors, and other parties who may now or in the future be primarily or
secondarily liable for the payment of the indebtedness evidenced by this Note
hereby severally waive presentment, protest and demand, notice of protest,
notice of demand and of dishonor and non-payment of this Note and expressly
agree that this Note or any payment hereunder may be extended from time to time
without in any way affecting the liability of Borrower, guarantors and
endorsers.

 

Borrower promises to pay all costs and expense of collection of this Note and to
pay all reasonable attorneys’ fees incurred in such collection, whether or not
there is a suit or action, or in any suit or action to collect this Note or in
any appeal thereof. No delay by Bank in exercising any power or right hereunder
shall operate as a waiver of any power or right. Time is of the essence as to
all obligations hereunder.

 

This Note is issued pursuant to the Loan Agreement, which shall govern the
rights and obligations of Borrower with respect to all obligations hereunder.

 

Borrower acknowledges and agrees that this Note shall be governed by the laws of
the State of North Carolina, excluding conflicts of laws principles, even though
for the convenience and at the request of Borrower, this Note may be executed
elsewhere.

 

BORROWER ACCEPTS FOR ITSELF AND IN CONNECTION WITH ITS PROPERTIES,
UNCONDITIONALLY, THE NON-EXCLUSIVE JURISDICTION OF ANY STATE OR FEDERAL COURT OF
COMPETENT JURISDICTION IN THE STATE OF NORTH CAROLINA IN ANY ACTION, SUIT, OR
PROCEEDING OF ANY KIND, AGAINST IT WHICH ARISES OUT OF OR BY REASON OF THIS
AGREEMENT; PROVIDED, HOWEVER, THAT IF FOR ANY REASON BANK CANNOT AVAIL ITSELF OF
THE COURTS OF NORTH CAROLINA, BORROWER ACCEPTS JURISDICTION OF THE COURTS AND
VENUE IN SANTA CLARA COUNTY, CALIFORNIA. BORROWER AND BANK EACH HEREBY WAIVE
THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED
UPON OR ARISING OUT OF ANY OF THE LOAN DOCUMENTS OR ANY OF THE TRANSACTIONS
CONTEMPLATED THEREIN, INCLUDING CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY
CLAIMS, AND ALL OTHER COMMON LAW OR STATUTORY CLAIMS. EACH PARTY RECOGNIZES AND
AGREES THAT THE FOREGOING WAIVER CONSTITUTES A MATERIAL INDUCEMENT FOR IT TO
ENTER INTO THIS AGREEMENT. EACH PARTY REPRESENTS AND WARRANTS THAT IT HAS
REVIEWED THIS WAIVER WITH ITS LEGAL COUNSEL AND THAT IT KNOWINGLY AND
VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL
COUNSEL.

 

[SIGNATURES ARE ON THE FOLLOWING PAGE]

 

2

--------------------------------------------------------------------------------

IN WITNESS WHEREOF, Borrower has caused this Note to be executed under seal by
its duly authorized officers as of the date first written above.

 

WITNESS/ATTEST:

 

     

PARADIGM GENETICS, INC.

 

--------------------------------------------------------------------------------

      By:  

    /s/    HEINRICH GUGGER            (SEAL)

--------------------------------------------------------------------------------

       

Name:

Title:

 

Heinrich Gugger

President & CEO

 

 

 

 

3