Exhibit

10.27




 









 




EXPORT-IMPORT BANK LOAN AND SECURITY AGREEMENT




PHARSIGHT CORPORATION




 








 









 





























 




TABLE OF CONTENTS




 




 




	

  1


  	

  ACCOUNTING AND OTHER TERMS


  
	

   


  	

   


  	

   


  
	

  2


  	

  LOAN AND TERMS OF PAYMENT


  
	

   


  	

   


  	

   


  
	

   


  	

  2.1


  	

  Advances


  
	

   


  	

  2.2


  	

  Overadvances


  
	

   


  	

  2.3


  	

  Interest Rate, Payments


  
	

   


  	

  2.4


  	

  Fees


  
	

   


  	

  2.5


  	

  Use of Proceeds


  
	

   


  	

   


  	

   


  
	

  3


  	

  CONDITIONS OF LOANS


  
	

   


  	

  3.1


  	

  Conditions

  Precedent to Initial Advance


  
	

   


  	

  3.2


  	

  Conditions

  Precedent to all Advances


  
	

   


  	

   


  	

   


  
	

  4


  	

  CREATION OF SECURITY

  INTEREST


  
	

   


  	

  4.1


  	

  Grant of Security Interest


  
	

   


  	

   


  	

   


  
	

  5


  	

  REPRESENTATIONS AND

  WARRANTIES


  
	

   


  	

  5.1


  	

  Domestic Loan Documents


  
	

   


  	

   


  	

   


  
	

  6


  	

  AFFIRMATIVE COVENANTS


  
	

   


  	

  6.1


  	

  Domestic Loan Documents


  
	

   


  	

  6.2


  	

  EXIM Insurance


  
	

   


  	

  6.3


  	

  Borrower Agreement


  
	

   


  	

  6.4


  	

  Terms of Sale


  
	

   


  	

  6.5


  	

  Reporting Requirements


  
	

   


  	

  6.6


  	

  Further Assurances


  
	

   


  	

   


  	

   


  
	

  7


  	

  NEGATIVE COVENANTS


  
	

   


  	

  7.1


  	

  Domestic Loan Documents


  
	

   


  	

  Violate

  or fail to comply with the Domestic Loan Documents


  
	

   


  	

  7.2


  	

  Borrower Agreement


  
	

   


  	

  7.3


  	

  Exim Agreement


  
	

   


  	

   


  	

   


  
	

  8


  	

  EVENTS OF DEFAULT


  
	

   


  	

  8.1


  	

  Payment Default


  
	

   


  	

  8.2


  	

  Covenant Default


  
	

   


  	

  8.3


  	

  Exim Guarantee


  
	

   


  	

   


  	

   


  
	

  9


  	

  BANK’S RIGHTS AND REMEDIES


  
	

   


  	

  9.1


  	

  Rights and Remedies


  
	

   


  	

  9.2


  	

  Power of Attorney


  
	

   


  	

  9.3


  	

  Accounts Collection


  
	

   


  	

  9.4


  	

  Bank Expenses


  
	

   


  	

  9.5


  	

  Bank’s Liability for

  Collateral


  
	

   


  	

  9.6


  	

  Remedies Cumulative


  
	

   


  	

  9.7


  	

  Demand Waiver


  
	

   


  	

  9.8


  	

  Exim Direction


  
	

   


  	

  9.9


  	

  Exim Notification


  
	

   


  	

   


  	

   


  
	

  10


  	

  NOTICES


  
	

   


  	

   


  	

   


  
	

  11


  	

  CHOICE OF

  LAW . VENUE AND JURY TRIAL WAIVER


  
	

   


  	

   


  	

   


  
	

  12


  	

  GENERAL PROVISIONS


  
	

   


  	

  12.1


  	

  Successors and Assigns


  
	

   


  	

  12.2


  	

  Indemnification


  
	

   


  	

  12.3


  	

  Time of Essence


  
	

   


  	

  12.4


  	

  Severability of Provision


  
	

   


  	

  12.5


  	

  Amendments in

  Writing, Integration


  
	

   


  	

  12.6


  	

  Counterparts


  
	

   


  	

  12.7


  	

  Survival


  
	

   


  	

  12.8


  	

  Confidentiality


  
	

   


  	

   


  	

   


  
	

  13


  	

  DEFINITIONS


  
	

   


  	

  13.1


  	

  Definitions


  





 




 




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This EXPORT-IMPORT BANK LOAN AND SECURITY AGREEMENT dated June 13, 2001, between SILICON

VALLEY BANK (“Bank”), whose address is 3003 Tasman Drive, Santa Clara,

California 95054 and PHARSIGHT CORPORATION (“Borrower”), whose address is 800

West El Camino Real, Suite 200, Mountain View, CA 94040 provides the terms on

which Bank will lend to Borrower and Borrower will repay Bank. The parties

agree as follows:




 




1              ACCOUNTING AND OTHER TERMS




 




Accounting terms not defined in this Exim Agreement

will be construed following GAAP Calculations and determinations must be made

following GAAP. The term “financial statements” includes the notes and

schedules. The terms “including” and “includes” always mean “including (or

includes) without limitation” in this or any Loan Document. This Exim Agreement

shall be construed to impart upon Bank a duty to act reasonably at all times.




 




2              LOAN AND TERMS OF PAYMENT




 




2.1          Advances.




 




Borrower will pay Bank the unpaid principal amount of

all Advances and interest on the unpaid principal amount of the Advances.




 




2.1.1       Revolving Advances.




 




(a)           Bank

will make Advances not exceeding (i) the Exim Committed Line or (ii) the

Borrowing Base, whichever is less. 

Borrowing Base means an amount equal to the sum of (i) ninety percent

(90%) of Exim Eligible Foreign Accounts and (ii) ninety percent (90%) of

Eligible Foreign Accounts  backed by

commercial letter(s) of credit advised and negotiated by a bank that Bank

approves in writing. Amounts borrowed under this Section may be repaid and

reborrowed during the term of this Exim Agreement.




 




(b)           To

obtain an Advance, Borrower must notify Bank by facsimile or telephone by 3:00

p.m. Pacific time on the Business Day the Advance is to be made.   Borrower must promptly confirm the

notification by delivering to Bank the Payment/Advance Form attached as Exhibit

B and submit purchase orders an Export Orders in connection with such Advance.

Bank will credit Advances to Borrower’s deposit account.   Bank may make Credit Extensions under this

Exim Agreement based on instructions from a Responsible Officer or his or her

designee or without instructions if the Credit Extensions are necessary to meet

Obligations which have become due. Bank may rely on any telephone notice given

by a person whom Bank believes is a Responsible Officer or designee. Borrower

will indemnify Bank for any loss suffered by Bank from that reliance.




 




(c)           The

Exim Committed Line terminates on the Exim Maturity Date, when all Advances and

other amounts due under this Exim Agreement are immediately payable.




 




2.2          Overadvances.




 




If Borrower’s Obligations under Section 2.1.1 exceed

the lesser of either (i) the Exim Committed Line or (ii) the Borrowing Base,

Borrower must immediately pay Bank the excess.




 




2.3          Interest Rate, Payments.




 




(a)           Interest

Rate.   Advances accrue interest on the

outstanding principal balance at a per annum rate of 1 percentage point above

the Prime Rate. After an Event of Default, Obligations accrue interest at 5

percent above the rate effective immediately before the Event of Default. The

interest rate increases or decreases when the Prime Rate changes. Interest is

computed on a 360 day year for the actual number of days elapsed.




 




(b)           Payments.   Interest due on the Exim Committed Line is

payable on the 5th of each month. Bank may debit any of Borrower’s deposit

accounts including Account Number 3300027682 for principal and interest

payments or any amounts Borrower owes Bank. Bank will notify Borrower when it

debits Borrower’s accounts. These debits are not a set-off. Payments received

after 12:00 noon Pacific time are considered received at the opening of

business on the next Business Day. When a payment is due on a day that is not a

Business Day, the payment is due the next Business Day and additional fees or

interest accrue.




 




 




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2.4          Fees.




 




Borrower will pay:




(a)           Bank

Expenses. All Bank Expenses incurred through and after the date of this Exim

Agreement, (including reasonable attorneys’ fees and expenses) payable when

due.




 




(b)           Exim

Fee. A facility fee equal to $22,500 will be due on the Closing Date.




 




(c)           Exim

Bank Expenses.  On the Closing Date,

Exim Bank Expenses incurred through the date hereof.




 




2.5          Use of Proceeds.




 




Borrower will use the proceeds of the Advances only

for the purposes specified in the Borrower Agreement. Borrower will not use the

proceeds of the Advances for any purpose prohibited by the Borrower Agreement.




 




3              CONDITIONS OF LOANS




 




3.1          Conditions

Precedent to Initial Advance.




 




Bank’s obligation to make the initial Advance is

subject to the condition precedent that it receive the agreements, documents

and fees it requires.




 




3.2          Conditions

Precedent to all Advances.




 




Bank’s obligations to make each Advance, including the

initial Advance, is subject to the following:




 




(a)           timely

receipt of any export purchase order and a Borrowing Base Certificate relating

to the




request;




 




(b)           receipt

of a Payment/Advance Form;




 




(c)           the

representations and warranties in Section 5 must be materially true on the date

of the Payment/Advance Form and on the effective date of each Advance and no

Event of Default may have occurred and be continuing, or result from the

Advance. Each Advance is Borrower’s representation and warranty on that date

that the representations and warranties of Section 5 remain true; and




 




(d)           the

Exim Guarantee is in full force and effect.




 




4              CREATION OF SECURITY INTEREST




 




4.1          Grant of Security Interest.




 




Borrower grants Bank a continuing security interest in

all presently existing and later acquired Collateral to secure all Obligations

and performance of each of Borrower’s duties under the Loan Documents. Except

for Permitted Liens, any security interest will be a first priority security

interest in the Collateral. Bank may place a “hold” on any deposit account

pledged as Collateral.




 




 




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5              REPRESENTATIONS AND WARRANTIES




 




Borrower represents and warrants as follows: 




 




5.1          Domestic Loan Documents.




 




The representations and warranties contained in the

Domestic Loan Documents, which are incorporated into this Agreement, are true

and correct.




 




6              AFFIRMATIVE COVENANTS




 




Borrower will do all of the following:




 




6.1          Domestic Loan Documents.




 




Borrower will comply with all the provisions of the

Domestic Loan Documents.




 




6.2          EXIM Insurance.




 




If required by Bank, Borrower will obtain, and pay

when due all premiums with respect to, and maintain uninterrupted foreign

credit insurance. In addition, Borrower will execute in favor of Bank an

assignment of proceeds of any insurance policy obtained by Borrower and issued

by Exim Bank insuring against comprehensive commercial and political risk (the

“EXIM Bank Policy”). The insurance proceeds from the EXIM Bank Policy assigned

or paid to Bank will be applied to the balance outstanding under this Exim

Agreement. Borrower will immediately notify Bank and Exim Bank in writing upon

submission of any claim under the Exim Bank Policy. Then Bank will not be

obligated to make any further Credit Extensions to Borrower without prior

approval from Exim Bank.




 




6.3          Borrower Agreement.




 




Borrower will comply with all terms of the Borrower

Agreement. If any provision of the Borrower Agreement conflicts with any

provision contained in this Exim Agreement, the more strict provision, with

respect to the Borrower, will control.




 




6.4          Terms of Sale.




 




Borrower will cause all sales of products on which the

Credit Extensions are based to be (i) supported by one or more irrevocable

letters of credit in an amount and of matter, naming a beneficiary and issued

by a financial institution acceptable to Bank or (ii) on open account to

creditworthy buyers that have written preapproval from Bank and Exim Bank.




 




6.5          Reporting Requirements.




 




Borrower shall deliver all reports, certificates and

other documents to Bank as provided in the Borrower Agreement and the Domestic

Loan Documents including, without limitation, Borrowing Base Certificate on a

monthly basis as described on Exhibit C hereof, purchase orders and any other

information that Bank and Exim Bank may reasonably request. In addition,

Borrower shall comply with the reporting requirements set forth in the Domestic

Loan Documents.




 




6.6          Further Assurances.




 




Borrower will execute any further instruments and take

further action as Bank requests to perfect or continue Bank’s security interest

in the Collateral or to effect the purposes of this Exim Agreement.




 




 




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7              NEGATIVE COVENANTS




 




Borrower will not do any of the following:




 




7.1          Domestic Loan Documents.




 




Violate or fail to comply with the Domestic Loan

Documents.




 




7.2          Borrower Agreement.




 




Violate or fail to comply with any provision of the

Borrower Agreement.




 




7.3          Exim Agreement.




 




Take an action, or permit any action to be taken, that

causes, or could be expected to cause, the Exim Guarantee to not be in full

force and effect.




 




8              EVENTS OF DEFAULT




 




Any one of the following is an Event of Default:




 




8.1          Payment Default.




 




If Borrower fails to pay any of the Obligations when

due;




 




8.2          Covenant Default.




 




If Borrower violates any covenant or breaches any

representation or warranty in the Exim Loan Documents or in any of the Domestic

Loan Documents or the Borrower Agreement or an Event of Default occurs under

the Exim Loan Documents or the Domestic Loan Documents.




 




8.3          Exim Guarantee.




 




If the Exim Guarantee ceases for any reason to be in

full force and effect, or if the Exim Bank declares the Exim Guarantee void or

revokes any obligations under the Exim Guarantee.




 




9              BANK’S RIGHTS AND REMEDIES




 




9.1          Rights and Remedies.




 




When an Event of Default occurs and continues Bank

may, without notice or demand, do any or all of the following:




 




(a)           Declare

all Obligations immediately due and payable (but if an Event of Default

described in Section 8.5 of the Domestic Loan Documents occurs all Obligations

are immediately due and payable without any action by Bank);




 




(b)           Stop

advancing money or extending credit for Borrower’s benefit under this Exim

Agreement or under any other agreement between Borrower and Bank;




 




(c)           Settle

or adjust disputes and claims directly with account debtors for amounts, on

terms and in any order that Bank considers advisable;




 




(d)           Make

any payments and do any acts it considers necessary or reasonable to protect

its security interest in the Collateral.  

Borrower will assemble the Collateral if Bank requires and make it

available as Bank designates.   Bank may

enter premises where the Collateral is located, take and maintain possession of

any part of the Collateral, and pay, purchase, contest, or compromise any Lien

which appears to be prior or superior to its security interest and pay all

expenses incurred. Borrower grants Bank a license to enter and occupy any of

its premises, without charge, to exercise any of Bank’s rights or remedies;




 




 




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(e)           Apply

to the Obligations any (i) balances and deposits of Borrower it holds, or (ii)

any amount held by Bank owing to or for the credit or the account of Borrower;




 




(f)            Ship,

reclaim, recover, store, finish, maintain, repair, prepare for sale, advertise

for sale, and sell the Collateral; and




 




(g)           Dispose

of the Collateral according to the Code.




 




9.2          Power of Attorney.




 




Effective only when an Event of Default occurs and

continues, Borrower irrevocably appoints Bank as its lawful attorney to: (i) endorse

Borrower’s name on any checks or other forms of payment or security; (ii) sign

Borrower’s name on any invoice or bill of lading for any Account or drafts

against account debtors, (iii) make, settle, and adjust all claims under

Borrower’s insurance policies; (iv) settle and adjust disputes and claims about

the Accounts directly with account debtors, for amounts and on terms Bank

determines reasonable; and (v) transfer the Collateral into the name of Bank or

a third party as the Code permits. Bank may exercise the power of attorney to

sign Borrower’s name on any documents necessary to perfect or continue the

perfection of any security interest regardless of whether an Event of Default

has occurred. Bank’s appointment as Borrower’s attorney in fact, and all of

Bank’s rights and powers, coupled with an interest, are irrevocable until all

Obligations have been fully repaid and performed and Bank’s obligation to

provide Advances terminates.




 




9.3          Accounts Collection.




 




When an Event of Default occurs and continues, Bank

may notify any Person owing Borrower money of Bank’s security interest in the

funds and verify the amount of the Account. Borrower must collect all payments

in trust for Bank and, if requested by Bank, immediately deliver the payments

to Bank in the form received from the account debtor, with proper endorsements

for deposit.




 




9.4          Bank Expenses.




 




If Borrower fails to pay any amount or furnish any

required proof of payment to third persons Bank may make all or part of the

payment or obtain insurance policies required in Section 6.5, and take any

action under the policies Bank deems prudent. Any amounts paid by Bank are Bank

Expenses and immediately due and payable, bearing interest at the then

applicable rate and secured by the Collateral. No payments by Bank are deemed

an agreement to make similar payments in the future or Bank’s waiver of any

Event of Default.




 




9.5          Bank’s Liability for

Collateral.




 




If Bank complies with reasonable banking practices it

is not liable for: (a) the safekeeping of the Collateral; (b) any loss or

damage to the Collateral; (c) any diminution in the value of the Collateral; or

(d) any act or default of any carrier, warehouseman, bailee, or other person.

Borrower bears all risk of loss, damage or destruction of the Collateral.




 




9.6          Remedies Cumulative.




 




Bank’s rights and remedies under this Exim Agreement,

the Loan Documents, and all other agreements are cumulative. Bank has all

rights and remedies provided under the Code, by law, or in equity. Bank’s

exercise of one right or remedy is not an election, and Bank’s waiver of any

Event of Default is not a continuing waiver. Bank’s delay is not a waiver,

election, or acquiescence. No waiver is effective unless signed by Bank and

then is only effective for the specific instance and purpose for which it was

given.




 




 




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9.7          Demand Waiver.




 




Borrower waives demand, notice of default or dishonor,

notice of payment and nonpayment, notice of any default, nonpayment at

maturity, release, compromise, settlement, extension, or renewal of accounts,

documents, instruments, chattel paper, and guarantees held by Bank on which

Borrower is liable.




 




9.8          Exim Direction.




 




Upon the occurrence of an Event of Default, Exim Bank

shall have right to (i) direct Bank to exercise the remedies specified in

Section 9.1 and (ii) request that Bank accelerate the maturity of any other

loans to Borrower.




 




9.9          Exim Notification.




 




Bank has the right to immediately notify Exim Bank in

writing if it has knowledge of any of the following events: (1) any failure to

pay any amount due under this Exim Agreement; (2) the Borrowing Base is less

than the sum of the outstanding Credit Extensions; (3) any failure to pay when

due any amount payable to Bank under any Loan owing by Borrower to Bank; (4)

the filing of an action for debtor’s relief by, against or on behalf of

Borrower; (5) any threatened or pending material litigation against Borrower,

or any dispute involving Borrower.




 




If Bank sends a notice to Exim Bank, Bank has the right

to send Exim Bank a written report on the status of events covered by the

notice every 30 days after the date of the original notification, until Bank

files a claim with Exim Bank or the defaults have been cured (but no Advances

may be required during the cure period unless Exim Bank gives its written

approval). If directed by Exim Bank, Bank will have the right to exercise any

rights it may have against the Borrower to demand the immediate repayment of

all amount outstandings under the Exim Loan Documents.




 




10           NOTICES




 




All notices or demands by any party about this Exim

Agreement or any other related agreement must be in writing and be personally

delivered or sent by an overnight delivery service, by certified mail, postage

prepaid, return receipt requested, or by telefacsimile to the addresses first

written above. A Party may change its notice address by giving the other Party

written notice.




 




11           CHOICE OF

LAW. VENUE AND JURY TRIAL WAIVER




 




California law governs the Loan Documents without

regard to principles of conflicts of law. Borrower and Bank each submit to the

exclusive jurisdiction of the State and Federal courts in Santa Clara County,

California.




 




BORROWER AND BANK EACH WAIVE THEIR RIGHT TO A JURY

TRIAL OF ANY CLAIM OR CAUSE OF ACTION ARISING OUT OF ANY OF THE LOAN DOCUMENTS

OR ANY CONTEMPLATED TRANSACTION, INCLUDING CONTRACT, TORT, BREACH OF DUTY AND

ALL OTHER CLAIMS. THIS WAIVER IS A MATERIAL INDUCEMENT FOR BOTH PARTIES TO

ENTER INTO THIS AGREEMENT. EACH PARTY HAS REVIEWED THIS WAIVER WITH ITS

COUNSEL.




 




12           GENERAL PROVISIONS




 




12.1        Successors and Assigns.




 




This Exim Agreement binds and is for the benefit of

the successors and permitted assigns of each party. Borrower may not assign

this Exim Agreement or any rights under it without Bank’s prior written consent

which may be granted or withheld in Bank’s discretion. Bank has the right,

without the consent of or notice to Borrower, to sell, transfer, negotiate, or

grant participation in all or any part of, or any interest in, Bank’s

obligations, rights and benefits under this Exim Agreement.




 




 




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12.2        Indemnification.




 




Borrower will indemnify, defend and hold harmless Bank

and its officers, employees, and agents against: (a) all obligations, demands,

claims, and liabilities asserted by any other party in connection with the

transactions contemplated by the Loan Documents; and (b) all losses or Bank

Expenses incurred, or paid by Bank from, following, or consequential to

transactions between Bank and Borrower (including reasonable attorneys fees and

expenses), except for losses caused by Bank’s gross negligence or willful

misconduct.




 




12.3        Time of Essence.




 




Time is of the essence for the performance of all

obligations in this Exim Agreement.




 




12.4        Severability of Provision.




 




Each provision of this Exim Agreement is severable

from every other provision in determining the enforceability of any provision.




 




12.5        Amendments in Writing,

Integration.




 




All amendments to this Exim Agreement must be in

writing. This Exim Agreement represents the entire agreement about this subject

matter, and supersedes prior negotiations or agreements. All prior agreements,

understandings, representations, warranties, and negotiations between the

parties about the subject matter of this Exim Agreement merge into this Exim

Agreement and the Loan Documents.




 




12.6        Counterparts.




 




This Exim Agreement may be executed in any number of

counterparts and by different parties on separate counterparts, each of which,

when executed and delivered, are an original, and all taken together,

constitute one Agreement.




 




12.7        Survival.




 




All covenants, representations and warranties made in

this Exim Agreement continue in full force while any Obligations remain

outstanding. The obligations of Borrower in Section 12.2 to indemnify Bank will

survive until all statutes of limitations for actions that may be brought

against Bank have run.




 




12.8        Confidentiality.




 




In handling any confidential information, Bank will

exercise the same degree of care that it exercises for its own proprietary

information, but disclosure of information may be made (i) to Bank’s

subsidiaries or affiliates in connection with their business with Borrower,

(ii) to prospective transferees or purchasers of any interest in the Loans,

(iii) as required by law, regulation, subpoena, or other order, (iv) as

required in connection with Bank’s examination or audit and (v) as Bank

considers appropriate exercising remedies under this Exim Agreement.

Confidential information does not include information that either: (a) is in

the public domain or in Bank’s possession when disclosed to Bank, or becomes

part of the public domain after disclosure to Bank; or (b) is disclosed to Bank

by a third party, if Bank does not know that the third party is prohibited from

disclosing the information.




 




 




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13           DEFINITIONS




 




13.1        Definitions.




 




Except as otherwise defined, terms that are

capitalized in this Exim Agreement will have the same meaning assigned in the

Domestic Loan Documents. In this Exim Agreement:




 




“Advance”

or “Advances” is a loan advance (or advances) under

the Exim Committed Line.




 




“Borrower Agreement” is the Export-Import Bank of the United States

Working Capital Guarantee Program Borrower Agreement between Borrower and Bank.




 




“Borrowing Base” is defined in Section 2.1. 




 




“Closing Date”

is the date of this Exim Agreement. 




 




“Collateral”

is the property described on Exhibit A.




 




“Domestic Loan Documents” means that certain Loan and Security Agreement dated

June 13, 2001 (the “Loan Agreement”), as amended, any note or notes executed by

Borrower or any other agreement entered into in connection with the Loan

Agreement, between Borrower and Bank.




 




“Exim Bank”

is the Export-Import Bank of the United States.




 




“Exim Bank Expenses”

are all audit fees and expenses; reasonable costs or expenses (including

reasonable attorneys’ fees and expenses) for preparing, negotiating,

administering, defending and enforcing the Exim Loan Documents (including

appeals or Insolvency Proceedings) and the fees that the Bank pays to the Exim

Bank in consideration of the issuance of the Exim Guarantee.




 




“Exim Committed Line” is an Advance of up to $1,500,000.00.




 




“Exim Eligible Foreign Accounts” are accounts payable in United States Dollars that

arise in the ordinary course of Borrower’s business from Borrower’s sale of

eligible foreign inventory (i) that the account debtor does not have its

principal place of business in the United States, (ii) that have been assigned

and comply with all of Borrower’s representations and warranties in, and (iii)

supported by commercial letter(s) of credit advised and negotiated by a bank

that Bank approves in writing; but Bank may change eligibility standards by

giving Borrower notice. Unless Bank agrees otherwise in writing, Exim Eligible

Foreign Accounts will not include:




 




(a)           Accounts

that the account debtor has not paid within 90 days of invoice date;




 




(b)           Accounts

which are more than sixty (60) calendar days past the original due date, unless

it is insured through Exim Bank export credit insurance for comprehensive

commercial and political risk, or through Exim Bank approved private insurers

for a comparable coverage, in which case ninety (90) calendar days shall apply;




 




(c)           Credit

balances over 60 days from invoice date;




 




(d)           Accounts

evidenced by a letter of credit until the date of shipment of the items covered

by the subject letter of credit;




 




(e)           Accounts

for which the account debtor is a federal, state or local government entity or

any department, agency, or instrumentality;




 




(f)            Accounts

for which Borrower owes the account debtor, but only up to the amount owed

(sometimes called “contra” accounts, accounts payable, customer deposits or

credit accounts);




 




 




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(g)           Accounts

for demonstration or promotional equipment, or in which goods are consigned,

sales guaranteed, sale or return, sale on approval, bill and hold, or other

terms if account debtor’s payment may be conditional;




 




(h)           Accounts

for which the account debtor is Borrower’s Affiliate, officer, employee, or

agent;




 




(i)            Accounts

in which the account debtor disputes liability or makes any claim and Bank

believes there may be a basis for dispute (but only up to the disputed or

claimed amount), or if the Account Debtor is subject to an Insolvency

Proceeding, or becomes insolvent, or goes out of business;




 




(j)            Accounts

generated by the sale of products purchased for military purposes;




 




(k)           Accounts

generated by the sales of inventory which constitute defense articles or

defense services;




 




(I)            Accounts

excluded from the Borrowing Base under the Borrower Agreement;




 




(m)          Accounts

that arise from the sales of items not in the ordinary course of Borrower’s

business;




 




(n)           Accounts

not owned by Borrower or that are subject to any right, claim or interest of

another person other than the lien in favor of Bank;




 




(o)           Accounts

with respect to which an invoice has not been sent;




 




(p)           Accounts

billed or payable outside the United Stated unless approved in writing by Exlm

Bank;




 




(q)           Accounts

from account debtors with balance of 50% over 60 days past the invoice due

date;




 




(r)            Accounts

with open account term with balance more than 10% concentration of total

foreign Accounts, unless pre-approved by Bank;




 




(s)           Accounts

billed in currencies other than U.S. Dollars, unless approved in writing by

Exim Bank;




 




(t)            Accounts

from foreign buyers in countries where Exim Bank is legally prohibited from

doing business or in which Exim Bank coverage is not available (as designated

in the Country Limitation Schedule);




 




(u)           Foreign

Accounts backed by letters of credit unacceptable to Bank;




 




(v)           Accounts

for which Bank or Exim Bank determines collection to be doubtful;




 




(w)          Any

intra-company accounts receivable or any accounts receivable from a subsidiary

of Borrower, from a person or entity with a controlling interest in Borrower or

from an entity that shares common controlling ownership with the Borrower; and




 




(x)            Any

Export-Related Account Receivable (as defined in the Borrower Agreement) not

deemed to be an Eligible Export Related Account Receivable under the Borrower

Agreement.




 




“Exim Guarantee” is that certain Master Guarantee Agreement or other agreement, as

amended from time to time, the terms of which are incorporated into this Exim

Agreement.




 




“Exim Loan Documents” means that certain Export-Import Bank Loan and

Security Agreement (“Exim Loan Agreement”), any note or notes executed by

Borrower or any other agreement entered into in connection with this Exim Loan

Agreement, pursuant to which Exim Bank guarantees Borrower’s obligations under

this Exim Agreement.




 




 




11





























 




“Exim Maturity Date” is June 13, 2002.




 




“Export Order”

is a written export order or contract for the purchase by the buyer from the

Borrower of any finished goods or services which are intended for export.




 




“Loan Documents” are, collectively, this Exim Agreement, the Exim Loan Documents, the

Domestic Loan Documents, any note, or notes or guaranties executed by Borrower

or Guarantor in connection with the Exim Loan Documents or the Domestic Loan

Documents, and any other present or future agreement between Borrower and/or

for the benefit of Bank in connection with this Exim Agreement, the Exim Loan

Documents or the Domestic Loan Documents, all as amended, extended or restated.




 




“Obligations”

are debts, principal, interest, Bank Expenses and other amounts Borrower owes

Bank now or later, including letters of credit and exchange contracts and

including interest accruing after Insolvency Proceedings begin and debts,

liabilities, or obligations of Borrower assigned to Bank and the Obligations of

Borrower under the Domestic Loan Documents.




 




“Schedule”

is any attached schedule of exceptions.




 




 




	

  BORROWER:


  
	

   


  	

   


  
	

  PHARSIGHT CORPORATION


  
	

   


  
	

   


  	

   


  
	

  By:.


  	

  /s/ Robin A. Kehoe


  
	

   


  	

   


  
	

  Title:


  	

  CFO


  
	

   


  	

   


  
	

  BANK:


  	

   


  
	

   


  	

   


  
	

  SILICON VALLEY BANK


  
	

   


  
	

   


  	

   


  
	

  By:


  	

  /s/ Sam Thompson


  
	

   


  	

   


  
	

  Title:


  	

  Vice President


  





 




 




12





























 




EXHIBIT A




 




The Collateral consists of all of Borrower’s right,

title and interest in and to the following:




 




All goods and equipment now owned or hereafter

acquired, including, without limitation, all machinery, fixtures, vehicles

(including motor vehicles and trailers), and any interest in any of the

foregoing, and all attachments, accessories, accessions, replacements,

substitutions, additions, and improvements to any of the foregoing, wherever

located;




 




All inventory, now owned or hereafter acquired,

including, without limitation, all merchandise, raw materials, parts, supplies,

packing and shipping materials, work in process and finished products including

such inventory as is temporarily out of Borrower’s custody or possession or in

transit and including any returns upon any accounts or other proceeds,

including insurance proceeds, resulting from the sale or disposition of any of

the foregoing and any documents of title representing any of the above;




 




All contract rights and general intangibles now owned

or hereafter acquired, including, without limitation, goodwill, trademarks, servicemarks,

trade styles, trade names, patents, patent applications, leases, license

agreements, franchise agreements, blueprints, drawings, purchase orders,

customer lists, route lists, infringements, claims, computer programs, computer

discs, computer tapes, literature, reports, catalogs, design rights, income tax

refunds, payments of insurance and rights to payment of any kind;




 




All now existing and hereafter arising accounts,

contract rights, royalties, license rights and all other forms of obligations

owing to Borrower arising out of the sale or lease of goods, the licensing of

technology or the rendering of services by Borrower, whether or not earned by

performance, and any and all credit insurance, guaranties, and other security

therefor, as well as all merchandise returned to or reclaimed by Borrower;




 




All documents, cash, deposit accounts, securities,

securities entitlements, securities accounts, investment property, financial

assets, letters of credit, certificates of deposit, instruments and chattel

paper now owned or hereafter acquired and Borrower’s Books relating to the

foregoing;




 




All copyright rights, copyright applications,

copyright registrations and like protections in each work of authorship and

derivative work thereof, whether published or unpublished, now owned or

hereafter acquired; all trade secret rights, including all rights to unpatented

inventions, know-how, operating manuals, license rights and agreements and

confidential information, now owned or hereafter acquired; all mask work or

similar rights available for the protection of semiconductor chips, now owned

or hereafter acquired; all claims for damages by way of any past, present and

future infringement of any of the foregoing




 




All Borrower’s Books relating to the foregoing and any

and all claims, rights and interests in any of the above and all substitutions

for, additions and accessions to and proceeds thereof.




 




Notwithstanding the foregoing, the Collateral shall

not be deemed to include any copyrights, copyright applications, copyright

registration and like protection in each work of authorship and derivative work

thereof, whether published or unpublished, now owned or hereafter acquired; any

patents, patent applications and like protections including without limitation

improvements, divisions, continuations, renewals, reissues, extensions and

continuations-in-part of the same, trademarks, servicemarks and applications

therefor, whether registered or not, and the goodwill of the business of

Borrower connected with and symbolized by such trademarks, any trade secret

rights, including any rights to unpatented inventions, know-how, operating

manuals, license rights and agreements and confidential information, now owned

or hereafter acquired; or any claims for damage by way of any past, present and

future infringement of any of the foregoing (collectively, the “Intellectual

Property”), except that the Collateral shall include the proceeds of all the

Intellectual Property that are accounts, (i.e. accounts receivable) of

Borrower, or general intangibles consisting of rights to payment, if a judicial

authority (including a U.S. Bankruptcy Court) holds that a security interest in

the underlying Intellectual Property is necessary to have a security interest

in such accounts and general intangibles of Borrower that are proceeds of the

Intellectual Property, then the Collateral shall automatically, and effective

as of the Closing Date, include the Intellectual Property to the extent

necessary to permit perfection of Bank’s security interest in such accounts and

general intangibles of Borrower that are proceeds of the Intellectual Property.




 




Borrower and Bank are parties to that certain

Negative Pledge Agreement, whereby Borrower, in connection with Bank’s loan or

loans to Borrower, has agreed, among other things, not to sell, transfer,

assign, mortgage, pledge, lease grant a security interest in, or encumber any

of its Intellectual Property, without Bank’s prior written consent.




 




 




13





























 




EXHIBIT B




 




LOAN PAYMENT/ADVANCE

TELEPHONE REQUEST FORM




 




DEADLINE FOR SAME DAY

PROCESSING IS 3:00 P.M., P.S.T.




 




	

  TO: CENTRAL CLIENT SERVICE DIVISION


  	

  DATE:


  	

   


  
	

   


  	

   


  	

   


  
	

  FAX#: (408)496-2426


  	

  TIME:


  	

   


  





 




	

  FROM:


  	

  Pharsight Corporation


  
	

   


  	

  CLIENT NAME (BORROWER)


  
	

   


  	

   


  
	

  REQUESTED BY:


  	

   


  
	

   


  	

  AUTHORIZED SIGNER’S

  NAME


  
	

   


  	

   


  
	

  AUTHORIZED SIGNATURE:


  	

   


  
	

   


  	

   


  	

   


  
	

  PHONE NUMBER:


  	

   


  
	

   


  	

   


  	

   


  
	

  FROM ACCOUNT#


  	

   


  	

  TO ACCOUNT #


  	

   


  
	

   


  	

   


  	

   


  	

   


  
	

  REQUESTED TRANSACTION TYPE


  	

   


  	

   


  	

  REQUESTED DOLLAR AMOUNT


  	

   


  
	

   


  	

   


  	

   


  
	

  PRINCIPAL INCREASE (ADVANCE)


  	

  $


  	

   


  
	

  PRINCIPAL PAYMENT (ONLY)


  	

  $


  	

   


  
	

  INTEREST PAYMENT (ONLY)


  	

  $


  	

   


  
	

  PRINCIPAL AND INTEREST (PAYMENT)


  	

  $


  	

   


  
	

   


  	

   


  	

   


  
	

  OTHER INSTRUCTIONS:


  	

   


  
												









 









 




All Borrower’s representations and warranties in the Export-Import Bank

Loan and Security Agreement are true, correct and complete in all material

respects on the date of the telephone request for and Advance confirmed by this

Borrowing Certificate; but those representations and warranties expressly

referring to another date shall be true, correct and complete in all material

respects as of that date.




 




 




BANK USE ONLY




 




TELEPHONE REQUEST:




 




The following person is authorized to request the loan payment

transfer/loan advance on the advance designated account and is known to me.




 




	

   


  	

   


  	

   


  
	

  Authorized Requester


  	

   


  	

  Phone #


  
	

   


  	

   


  	

   


  
	

   


  	

   


  	

   


  
	

  Received By (Bank)


  	

   


  	

  Phone #


  
	

   


  	

   


  	

   


  
	

   


  	

  Authorized Signature

  (Bank)


  	

   


  





 




 




14





























 




BORROWING BASE CERTIFICATE




COLLATERAL SCHEDULE








(FOREIGN A/R LINE

OF CREDIT)













	

  Borrower: Pharsight Corporation


  	

   


  	

  Bank:

  Silicon Valley Bank


  










 




	

  FOREIGN

  ACCOUNTS RECEIVABLE FROM EXPORT ACTIVITIES


  	

   


  	

   


  	

   


  	

   


  
	

  1.  Foreign Accounts Receivable Book Value as

  of


  	

   


  	

   


  	

   


  	

   


  	

  $


  	

   


  	

   


  
	

  2.  Additions (please explain on reverse)


  	

   


  	

   


  	

   


  	

   


  	

  $


  	

   


  	

   


  
	

  3.  TOTAL FOREIGN ACCOUNTS RECEIVABLE


  	

   


  	

   


  	

   


  	

   


  	

  $


  	

   


  	

   


  
	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  
	

  ACCOUNTS

  RECEIVABLE DEDUCTIONS


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  
	

  4.  Accounts over 90 days past invoice


  	

   


  	

  $


  	

   


  	

   


  	

   


  	

   


  	

   


  
	

  5.  Credit Balances over 90 days past invoice


  	

   


  	

  $


  	

   


  	

   


  	

   


  	

   


  	

   


  
	

  6.  Accounts in the form of L/Cs, if subject

  items have not yet been shipped by Borrower


  	

   


  	

  $


  	

   


  	

   


  	

   


  	

   


  	

   


  
	

  7.  Governmental and Military Accounts


  	

   


  	

  $


  	

   


  	

   


  	

   


  	

   


  	

   


  
	

  8.  Contra Accounts


  	

   


  	

  $


  	

   


  	

   


  	

   


  	

   


  	

   


  
	

  9.  Promotion, Demo or Consignment Accounts


  	

   


  	

  $


  	

   


  	

   


  	

   


  	

   


  	

   


  
	

  10.  Intercompany/Employee and affiliate Accts


  	

   


  	

  $


  	

   


  	

   


  	

   


  	

   


  	

   


  
	

  11.  Disputed Accounts


  	

   


  	

  $


  	

   


  	

   


  	

   


  	

   


  	

   


  
	

  12.  Accounts arising from the sale of defense

  articles or items


  	

   


  	

  $


  	

   


  	

   


  	

   


  	

   


  	

   


  
	

  13.  Accounts excluded under the Borrower Agrt


  	

   


  	

  $


  	

   


  	

   


  	

   


  	

   


  	

   


  
	

  14.  Accounts from sales not in the ordinary

  course of business


  	

   


  	

  $


  	

   


  	

   


  	

   


  	

   


  	

   


  
	

  15.  Accounts not owned by Borrower


  	

   


  	

  $


  	

   


  	

   


  	

   


  	

   


  	

   


  
	

  16.  Accounts without invoices


  	

   


  	

  $


  	

   


  	

   


  	

   


  	

   


  	

   


  
	

  17.  Accounts outside U.S.


  	

   


  	

  $


  	

   


  	

   


  	

   


  	

   


  	

   


  
	

  18.  Accounts with 50% over 90 days past

  invoice


  	

   


  	

  $


  	

   


  	

   


  	

   


  	

   


  	

   


  
	

  19.  Accounts over 10% concentration


  	

   


  	

  $


  	

   


  	

   


  	

   


  	

   


  	

   


  
	

  20.  Accounts billed in non U.S. currency


  	

   


  	

  $


  	

   


  	

   


  	

   


  	

   


  	

   


  
	

  21.  Accounts in countries prohibited by EXIM


  	

   


  	

  $


  	

   


  	

   


  	

   


  	

   


  	

   


  
	

  22.  Accts supported by LCs not accepted by

  EXIM


  	

   


  	

  $


  	

   


  	

   


  	

   


  	

   


  	

   


  
	

  23.  Accounts determined doubtful


  	

   


  	

  $


  	

   


  	

   


  	

   


  	

   


  	

   


  
	

  24.  Other


  	

   


  	

  $


  	

   


  	

   


  	

   


  	

   


  	

   


  
	

  25.  TOTAL ACCOUNTS RECEIVABLE DEDUCTIONS


  	

   


  	

   


  	

   


  	

   


  	

  $


  	

   


  	

   


  
	

  26.  Eligible Accounts (No. 3 - No. 25)


  	

   


  	

   


  	

   


  	

   


  	

  $


  	

   


  	

   


  
	

  27.  Loan Value of Accounts (90%-Advance)


  	

   


  	

  $


  	

   


  	

   


  	

   


  	

   


  	

   


  
	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  
	

  FOREIGN

  ACCOUNTS RECEIVABLE BACKED BY L/C (subject to the foregoing)


  
	

  28.  TOTAL FOREIGN ACCOUNTS RECEIVABLE BACKED BY L/C 


  	

   


  	

  $


  	

   


  	

   


  
	

  29.  Loan Value of Accounts (90% - Advance)


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  
	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  
	

  BALANCES


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  
	

  30.  Maximum Loan Amount


  	

   


  	

  $


  	

   


  	

   


  	

   


  	

   


  	

   


  
	

  31  Total Available  (No.27 + No. 29)


  	

   


  	

  $


  	

   


  	

   


  	

   


  	

   


  	

   


  
	

  32.  Present balance owing on Line of Credit


  	

   


  	

  $


  	

   


  	

   


  	

   


  	

   


  	

   


  
	

  33.  Outstanding under Sublimits (if any)


  	

   


  	

  $


  	

   


  	

   


  	

   


  	

   


  	

   


  
	

  34. RESERVE POSITION [No.51 -

  (No.32 + No. 33)]


  	

   


  	

   


  	

   


  	

   


  	

  $


  	

   


  	

   


  





 




The undersigned represents and warrants that as of the date hereof the

foregoing is true, complete and correct, that the information reflected in this

Collateral Schedule complies with the representations and warranties set forth

in the Export - Import Bank Loan and Security Agreement, between Borrower and

Bank, and the Borrower Agreement, executed by Borrower and acknowledged by

Lender, each dated June 13, 2001, as may be amended from time to time, as if

all representations and warranties were made as of the date hereof, and that

Borrower is, and shall remain, in full compliance with its agreements, covenants,

and obligations under such agreements. Such representations and warranties

include, without limitation, the following: Borrower is using disbursements

only for the purpose of enabling Borrower to finance the cost of manufacturing,

purchasing or selling items intended for export. Borrower is not using

disbursements for the purpose of: (a) servicing any of Borrower’s unrelated

preexisting or future indebtedness; (b) acquiring fixed assets or capital goods

for the use of Borrower’s business; 




 




 




15





























 




(c) acquiring, equipping, or renting commercial space outside the

United States; or (d) paying salaries of non-U.S. citizens or non-U.S.

permanent residents who are located in the offices of the United States.

Additionally, disbursements are not being used to finance the manufacture,

purchase or sale of all of the following: (a) Items to be sold to a buyer

located in a country in which the Export Import Bank of the United States is

legally prohibited from doing business; (b) that part of the cost of the items

which is not U.S. Content unless such part is not greater than fifty percent

(50%) of the cost of the items and is incorporated into the items in the United

States; (c) defense articles or defense services or items directly or

indirectly destined for use by military organizations designed primarily for

military use (regardless of the nature or actual use of the items); or (d) any

items to be used in the construction, alteration, operation or maintenance of

nuclear power, enrichment, reprocessing, research or heavy water production

facilities.




 




Sincerely,




 




BORROWER:




 




PHARSIGHT CORPORATION




 




	

  By:


  	

   


  
	

   


  	

   


  
	

  Name:


  	

   


  
	

   


  	

   


  
	

  Title: 


  	

   


  
	

   


  	

   


  
	

  Date:


  	

   


  





 








	

  BANK

  USE ONLY


  
	

   


  	

   


  
	

  Received By:


  	

   


  
	

   


  	

   


  
	

  Date:


  	

   


  
	

   


  	

   


  
	

  Verified By:


  	

   


  
	

   


  	

   


  










 




 




16