exv10w61



 




Exhibit 10.61


GE Commercial Finance

Healthcare Financial Services

Life Science Finance

1901 Main Street,
7th Floor

Irvine, CA 92614

949-477-1518/FAX: 866-288-7998




February 1,
2006




1st revision (changes underlined)




CONFIDENTIAL LOAN PROPOSAL FOR:




 





Cytokinetics, Inc.




 





Submitted
By: Todd Cortell




 









 








Cytokinetics, Inc.




 





Mary Rogers

Director of Financial Planning & Analysis

Cytokinetics, Inc.

280 East Grand Avenue

South San Francisco, CA 94080




Dear Ms. Rogers:




     General Electric Capital Corporation (“GE Capital”) has reviewed the information provided by
you in connection with the requested financing for Cytokinetics, Inc. (referred to as
“Cytokinetics” or the “Company”). Based on the review to date and subject to the timely receipt of
a signed copy of this proposal letter as indicated below, GE Capital is pleased to
consider arranging and providing a $5,000,000 financing (the “Financing”) as outlined in the
attached Term Sheet incorporated herein by reference, subject to the general terms and conditions
in this proposal letter and the Term Sheet.



     GE Capital is one of the largest and most diversified financial services companies in the
world with assets exceeding $300 billion and operations in over 45 countries. We have
been actively providing equipment financing for Life Science companies for over a decade and
it is our privilege to be a financial partner to hundreds of Life Science companies.



     This proposal letter, including the attached Term Sheet (together, the “Proposal”), is being
provided to the Company on a confidential basis and is merely an indication of interest regarding
the Financing transaction on the general terms and conditions outlined below and should not be
construed as a commitment. GE Capital may change the terms of this Proposal or cease future
consideration of the Financing at any time in its sole discretion. The attached Term Sheet
summarizes only the principal terms and conditions under which the proposed Financing will be
considered and does not purport to set forth all of the terms and conditions applicable to such
Financing, which terms and conditions will be fully contained in the final documentation.



     The Company may not use this Proposal to solicit other offers or to modify, renegotiate or
otherwise improve the terms and conditions of any other offer heretofore or hereafter received by
the Company but is not restricted from making any disclosure or dissemination of the United States
federal income tax structure or aspects of the transactions contemplated by this proposal or any
documents executed pursuant to this Proposal. Further, each of GE Capital and the Company
acknowledges that it has no proprietary rights to any United States federal income tax
elements or structure of this Proposal. In addition, the Company shall not, except as required by
law, use the name of, or refer to GE Capital, in any correspondence, discussions,
advertisement, press release or disclosure made in connection with the Financing without the prior
written consent of GE Capital.



     By signing below, the Company acknowledges the terms and conditions of this Proposal. Upon
receipt of the executed Proposal, GE Capital shall commence the investment and credit
approval process. Before funding can take place, all proper documentation of title and UCC releases
from other lenders shall be in place and approved by GE Capital. We thank you for
your consideration and look forward to working with you toward completing this transaction.



					
	 
	CONFIDENTIAL
	 	2
	 	2/1/2006
	GE Commercial Finance	 	 	 	 
	Healthcare Financial Services	 	 	 	 
	Life Science Finance	 	 	 	 
	v.6_10-14-05	 	 	 	 






 









 






Cytokinetics, Inc.




 





     I would appreciate the opportunity to discuss this proposal with you at your
earliest convenience. Please do not hesitate to contact me at 949-477-1518 if you have any
questions or if I may be of further assistance.



Sincerely,









Todd
Cortell

Vice President — Account Manager




PROPOSAL ACCEPTED BY:




Cytokinetics,
Inc.






	 	 	 	 	 
	Name:

	 	/s/ Sharon Surrey-Barbari
	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	Title:

	 	SVP of Finance & CFO
	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	Date:

	 	3/16/06
	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	Federal Tax ID#:

	 	 
	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	Email Address:

	 	 
	 	 
	 

	 	 	 	 





	 	 	 	 	 	 	 
	Contact Name for Inspection:

	 	 
	 	Phone #:
	 	 
	 

	 	 
	 	 	 	 







					
	 
	CONFIDENTIAL

GE Commercial Finance

Healthcare Financial Services

Life Science Finance

v.6_10-14-05
	 	3
	 	2/1/2006






 









 






Cytokinetics, Inc.
 





Term Sheet




	 	 	 
	Transaction:

	 	Loan
	 
	 	 
	Borrower:

	 	Cytokinetics, lnc.
	 
	 	 
	Lender:

	 	General Electric Capital Corporation its affiliates or its assignee (“GE
Capital”)
	 
	 	 
	Loan Amount:

	 	Up to $5,000,000
	 
	 	 
	Equipment (Collateral):

	 	All “collateral” described in the Master Security Aqreement between
the parties dated February 2, 2001, as amended January 1, 2005 (the “MSA”), in accordance with the
concentration requirements set forth in the Equipment Concentration Rider in the attached Addendum
A. All such Equipment must be acceptable to GE Capital and located at Company owned or leased
facilities within the continental United States.
	 
	 	 
	Additional Consideration:

	 	Borrower shall provide Lender with a security deposit in the
amount of fifty percent (50.0%) of the Loan Amount (required at the time of funding a Schedule).
Lender shall reduce the security deposit to fifty percent (50.0%), and pay annual interest of 3%,
of the outstanding principal balance semi-annually on January 1st and July 1st until the loan
expires.
	 
	 	 
	Loan Term and Payment:

	 	60 months of Principal and Interest at 1.989569% of financed cost (Payment
Factor), paid monthly in arrears for each loan schedule, based on an interest rate of 7.20%.
	 
	 	 
	Anticipated Funding Period:

	 	By December 31, 2006
	 
	 	 
	Line Mechanics:

	 	Minimum fundings will be $50,000.
	 
	 	 
	 

	 	Equipment with invoice dates older than 90 days
will be subject to appropriate discount.
	 
	 	 
	 

	 	Amortization begins on the
start date, which is the first day of the month following the
funding date. Interim interest will be charged for any period
between the funding date and the start date.
	 
	 	 
	Financial Covenants:

	 	None
	 
	 	 
	Funding Frequency:

	 	Equipment that is financed within 90 days of the invoice date is considered new.
Equipment that is older than 90 days will be financed based on the standard LSTF Depreciation
Guidelines per the table below:






	 	 	 	 	 	 	 
	 	 	Days from Invoice Date to Funding Date
	 	 	0-120 days	 	120-150	 	Increment per 30 day period
	Lab & Scientific
	 	0	 	10%	 	2.50%
	Computers, Furniture & Fixtures
	 	0	 	12%	 	3%






					
	 
	CONFIDENTIAL
	 	4
	 	2/1/2006
	GE Commercial Finance	 	 	 	 
	Healthcare Financial Services	 	 	 	 
	Life Science Finance	 	 	 	 
	v.6_10-14-05	 	 	 	 






 









 






Cytokinetics, Inc.




 





GENERAL TERMS AND CONDITIONS



Our proposal contains the following provisions and the Loan Payments we propose are specifically
based upon these provisions and our assumptions.





	1.	 	Maintenance and Insurance: All maintenance and insurance (fire and theft,
extended coverage and liability) are the responsibility of the Company. Company will be
responsible for maintaining in force, all risk damage, and liability insurance in amounts and
coverages satisfactory to GE Capital.
	 
	2.	 	Documentation: Standard GE Capital Master Loan and Schedule Documentation for this
type of Loan (“Loan Documents”). Any changes to the Loan Documents must be approved by GE
Capital legal counsel.
	 
	3.	 	Indexing: The Interest Rate, Payment Factor and corresponding Loan Payments are
based on the Federal Reserve’s 5 year Treasury Constant
Maturities Rate (H.15/ “Treasury
Rate”) as of January 30, 2006, currently 4.46% and will be adjusted effective as
of the date of funding of any Financing to reflect any increases or decreases in the Treasury
Rate.
	 
	4.	 	Transaction Costs: By execution and return of this proposal letter, the Company
will be responsible for (i) all of its closing costs, (ii) all out of pocket fees and expenses
incurred by GE Capital in connection with the Financing under consideration including, without
limitation, actual out-of-pocket expenses associated with engagement of outside counsel, UCC
searches and filings costs, inspection and appraisal fees and similar costs, and (iii) the
Company waives any right to a jury trial in any action or proceeding brought against GE
Capital. The Company will indemnify and hold harmless GE Capital and its affiliates, officers,
directors, employees and agents (each, an “Indemnified Person”) against all claims, costs,
damages, liabilities and expenses (each, a “Claim”) that may be incurred by or asserted
against any of them in connection with this Term Sheet and proposal or the matters
contemplated herein, except to the extent arising from the negligence, gross negligence,
willful misconduct or failure to comply with applicable law by any Indemnified Person. The
foregoing indemnification obligation is subject to the following: GE Capital will promptly
notify the Company in writing of any Claim in respect of which any lndemnified Person intends
to claim such indemnification. GE Capital will permit, and will cause each lndemnified Person
seeking indemnification hereunder to permit, the Company at its discretion to settle any such
Claim, and GE Capital agrees, on its own behalf and on behalf of each lndemnified Person, to
the complete control of such defense or settlement by the Company. Notwithstanding the
foregoing, the Company will not enter into any settlement that would adversely affect such
lndemnified Person’s rights hereunder or impose any obligations on such lndemnified Person in
addition to those set forth herein in order for it to exercise such rights without such lndemnified Person’s prior written consent, which will
not be unreasonably withheld or delayed. No such action, claim or other matter will be
settled without the prior written consent of the Company, which will not be unreasonably
withheld or delayed. Such lndemnified Person will cooperate fully with the Company and its
legal representatives in the





					
	 
	CONFIDENTlAL
	 	5
	 	2/1/2006
	GE Commercial Finance	 	 	 	 
	Healthcare Financial Services	 	 	 	 
	Life Science Finance	 	 	 	 
	v.6_10-14-05	 	 	 	 






 









 






Cytokinetics, Inc.
 






	 	 	investigation and defense of any action, claim or other matter covered
by the indemnification obligations of this Section. The Indemnified Person will have the right,
but not the obligation, to be represented in such defense by counsel of its own selection and at
its own expense. The Company will not be responsible for any attorneys’ fees or other costs
incurred other than as provided herein.






	5.	 	Electronic Payment System: GE Capital’s standard payment collection method is through an
electronic payment system. An enrollment form will be provided with the Loan Documents.
	 
	6.	 	Confidentiality: This proposal letter is being provided to the Company on a confidential
basis. Except as required by law, this proposal nor its contents, nor any communications or
information shared between the parties, may be disclosed, except to individuals who are the
each party’s respective officers, employees or advisors who have a need to know of such
matters and then only on the condition that such matters remain confidential. In addition,
none of such persons shall, except as required by law, use the name of, or refer to the other
party, in any correspondence, discussions, advertisement, press release or disclosure made in
connection with the transaction contemplated herein without the prior written consent of such
other party.
	 
	7.	 	Expiration: This proposal will expire March 17, 2006, if not accepted prior to
that date.
	 
	8.	 	Other Conditions: This proposal expresses GE Capital’s willingness to seek internal
approval for the transaction contemplated herein. By signing and returning this letter both
parties acknowledge that: The above proposed terms and conditions do not constitute a
commitment by GE Capital, (ii) GE Capital’s senior management may seek changes to the above
terms and conditions, and (iii) GE Capital may decline further consideration of
this transaction at any point in the approval process. GE Capital’s agreement to fund the
proposed transaction remains subject to and would be preceded by completion of a legal and
business due diligence, as well as collateral and credit review and analysis, all with results
satisfactory to GE Capital and the closing of and initial funding under such transaction would
be conditioned upon the prior execution and delivery of final legal documentation and all
conditions precedent acceptable to GE Capital and its counsel and no Material Adverse Change
as defined in Amendment NO.1 to the MSA dated January 1, 2005. For transactions
that contemplate more that one funding, GE Capital’s obligation to make each such subsequent
funding would be subject to confirmation that no Material Adverse Change has occurred.





					
	 
	CONFIDENTIAL
	 	6
	 	2/1/2006
	GE Commercial Finance	 	 	 	 
	Finance Healthcare Financial	 	 	 	 
	Services Life Science Finance	 	 	 	 
	v.6_10-14-05	 	 	 	 






 









 






Cytokinetics, Inc.
 





AUTHORIZATION FOR RELEASE OF INFORMATION



The undersigned hereby authorizes past and present depositing institutions, creditors,
vendors suppliers of the undersigned to provide such information pertaining to any loans, leases,
lines credit, account balances, and payment histories of the undersigned to General Electric
Capital Corporation as it may request.




	 	 	 	 	 
	Cytokinetics, Inc.	 	 
	 
	 	 	 	 
	By:

	 	/s/ Sharon Surrey-Barbari	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	Title:

	 	SVP of Finance & CFO	 	 
	 

	 	 	 	 








					
	 
	CONFIDENTIAL
	 	7
	 	2/1/2006
	GE Commercial Finance	 	 	 	 
	Healthcare Financial Services	 	 	 	 
	Life Science Finance	 	 	 	 
	v.6_10-14-05	 	 	 	 






 









 






Cytokinetics, Inc.
 





Addendum
A — Expected Equipment Composition




By end of term:




	 	 	 	 	 	 	 	 	 
	Equipment Class	 	Amount	 	Concentration Requirement
	 
	 	 	 	 	 	 	 	 
	Laboratory & scientific equipment:

	 	$	3,500,000	 	 	Minimum of 80%

	 
	 	 	 	 	 	 	 	 
	Lab and office furniture, office equipment,
& similar:

	 	$	500,000	 	 	Maximum of 10%

	 
	 	 	 	 	 	 	 	 
	Computers, networking equipment, & similar:

	 	$	500,000	 	 	Maximum of 20%

	 
	 	 	 	 	 	 	 	 
	Soft costs (software, tax, freight & similar):

	 	$	500,000	 	 	Maximum of 10%

	 
	 	 	 	 	 	 	 	 
	 
	 
	 	 	 	 	 	 	 	 
	Total

	 	$	5,000,000	 	 	 	100	%






					
	 
	CONFIDENTIAL
	 	8
	 	2/1/2006
	GE Commercial Finance	 	 	 	 
	Healthcare Financial Services	 	 	 	 
	Life Science Finance	 	 	 	 
	v.6_10-14-05