Document:

Exhibit
10.41

 

 

LOAN
AND SECURITY AGREEMENT

                THIS
LOAN AND SECURITY AGREEMENT made this 15th day of November, 2002 (this
“Agreement”) by and between CERUS CORPORATION, a Delaware corporation with an
address and principal place of business at 2411 Stanwell Dr., Concord, CA 94520
(hereinafter called the “Borrower”) and BAXTER CAPITAL CORPORATION, a Delaware
corporation with a principal place of business at One Baxter Parkway,
Deerfield, Illinois 60015 (the “Lender”).

 

W
I T N E S S E T H:

                WHEREAS, the Borrower has requested that the Lender
extend a credit facility to the Borrower in the aggregate principal amount of
$50 Million;

                WHEREAS, the Lender has agreed to make such credit
facility available to the Borrower subject to the terms and conditions set
forth herein;

                NOW THEREFORE, in consideration of the mutual
promises set forth herein, the following constitutes the agreement of the
parties:

SECTION 1

AMOUNT AND TERMS OF CREDIT AND INTEREST

1.1           Loan
Commitment.  Beginning on January 3,
2003 (the “Availability Date”) and subject to the terms and conditions of this
Agreement and in reliance upon the covenants and the representations and
warranties of the Borrower set forth herein, the Lender agrees to make certain
loans available to the Borrower as the Borrower may from time to time request
(such loans referred to hereinafter as the “Revolving Loans”) until, but not
including January 2, 2008 (“Maturity Date”), provided, however, that the
aggregate principal balance of all Revolving Loans outstanding at any time
shall not exceed $50 Million (the “Loan Commitment”).  Loans made hereunder and repaid may be reborrowed.  The Revolving Loans shall be used by the
Borrower for the purpose of working capital and other general corporate
purposes.

1.2           Interest.  Interest shall accrue on the outstanding
principal amount of the Revolving Loans at 12% per annum (the “Interest
Rate”).  Except as set forth in Section
1.4 below, all outstanding principal together with all accrued and unpaid
interest shall be due and payable on the Maturity Date.  Interest shall be computed for the actual
number of days elapsed on the basis of a 360 day year.

1.3           Conversion
to Term Loan.  Upon the occurrence
of an event reasonably determined by the Lender to cause a material adverse
change upon the business, operations, financial condition or properties of the
Borrower (such change referred to hereinafter as a “Material Adverse Change”,
for the purposes of this definition the following shall not be considered to be
a Material Adverse Change (i) any change in the Borrower’s cash position in the
ordinary course of business; or (ii) any change in the price of the Borrower’s
common stock 

 

 

as such common stock is traded on various stock
exchanges from time to time) all outstanding amounts at such time shall,
together with any amounts subsequently advanced hereunder, become principal
under a term loan (the “Term Loan”, together with the Revolving Loan the
“Loans”).  Interest shall accrue on such
outstanding principal amount at the Interest Rate and shall be payable in
arrears with such principal as set forth on a payment schedule to be provided
by the Lender.  Such payment schedule
shall reflect payments due on the first business day of each quarter and
principal amortized, on a quarterly basis, such that all outstanding amounts
are paid in full no later than the Maturity Date.  Interest shall be computed for the actual number of days elapsed
on the basis of a 360 day year.  During
the period of the Term Loan, Borrower shall continue to be able to draw loans
up to the amount of the Loan Commitment. 
Any loan repayments in excess of the amortization schedule provide for
in this section may be reborrowed.

1.4           Manner
of Borrowing.  Each Loan shall be
made available to the Borrower upon its request, such request being from an
authorized officer whose authority to so act has not been revoked by the
Borrower in writing previously received by the Lender.  A request by the Borrower for a Loan must be
received by the Lender no later than 11:00 a.m. Chicago, Illinois time, on the
day that is not less than 5 business days prior to the day it is to be
funded.  All Loans hereunder shall be in
an amount not less than $5,000,000 and integral of $5,000,000 in excess
thereof.  The proceeds of each Loan
shall be made available at the office of the Lender by means requested by the
Borrower and acceptable to the Lender. 
The Lender is authorized to rely on any written, verbal, electronic,
telephonic or telecopy loan request which the Lender believes in its good faith
judgment to emanate from a properly authorized representative of the Borrower,
whether or not that is in fact the case. 
The Borrower hereby irrevocably confirms, ratifies and approves all such
advances by the Lender and hereby indemnifies the Lender against losses and
expenses (including court costs and reasonable attorneys’ fees) and shall hold
the Lender harmless with respect thereto.

1.5           Non-Use
Fee.  Beginning on the Availability
Date, the Borrower agrees to pay to the Lender, until the Maturity Date, or
such earlier date as Borrower provides written notice to Lender that it elects
to terminate the Loan Commitment as to the then unused amount, a non-use fee at
rate of 1.5% per annum of the unused amount of the Loan Commitment.  For the purposes of calculating usage under
this Section, the Loan Commitment shall be deemed used at any time to the
extent of the Loan Commitment drawn and outstanding (whether that amount drawn
and outstanding is deemed a Revolving Loan or a Term Loan) at such time.  Such non-use fee shall be payable for each
quarter in arrears on the first business day of the immediately following
quarter and on the Maturity Date for any period then ending for which such
non-use fee shall not have previously been paid.  The non-use fee shall be computed for the actual number of days
elapsed on the basis of a 360 day year.

1.6           Liabilities.  All of the Borrower’s obligations to the
Lender, of every kind and description arising under this Agreement, direct or
indirect, absolute or contingent, due or to become due, now existing or
hereafter arising, including obligations to perform acts and refrain from
taking action, as well as obligations to repay the Loans, shall constitute the
Borrower’s “Liabilities” to the Lender, as the same may be modified, amended, replaced
or extended from time to time, in accordance with the terms hereof.

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1.7           Notes
Evidencing Loans.  The Revolving
Loans shall be evidenced by a single Revolving Note in the form of Exhibit A
attached hereto (the “Revolving Note”) and the Term Loan, if any, shall be
evidenced by a Term Note in the form of Exhibit B attached hereto (the
“Term Note” together with the Revolving Note referred to herein individually as
a “Note” and collectively as the “Notes”). 
Each Note is incorporated herein to the same extent as if it was set
forth in full in this Agreement.

SECTION 2

WARRANTIES AND REPRESENTATIONS

2.1           To
induce the Lender to enter into this Loan Agreement and to make the Loans, the
Borrower warrants and represents, as of this date and as of the date of each
Loan, unless such representation and warranty expressly indicates that it is
made as of a specific date, in which case, solely as of such date that:

(a)                                  The Borrower is a validly organized and
existing corporation under the laws of the State of Delaware and is in good
standing under the laws of said State. 
The Borrower’s state issued organizational number is 3332373.

(b)                                 The Borrower is duly qualified to do
business and in good standing as a foreign corporation in each state or other
jurisdiction where the nature of the business conducted by it or the property
owned by it requires such qualification except where failure to qualify would
not be reasonably likely to cause a Material Adverse Change.

(c)                                  The Borrower is the sole owner of the
Collateral free and clear of all liens, pledges, charges, security interests
and encumbrances, other than those being granted to the Lender.

(d)                                 The Borrower owns and holds or licenses
or leases all real and personal property necessary or incidental to the present
conduct of its business, including, without limitation, patents, trademarks,
service marks, trade names, copyrights and licenses and other rights with
respect to the foregoing except where failure to so own, license or lease would
not cause a Material Adverse Change.

(e)                                  Except as set forth on Schedule 1,
as of the date hereof, there are no actions, suits, investigations or
proceedings pending, or to the knowledge of the Borrower threatened, against
the Borrower or any of its properties in any court, before any governmental
authority, arbitration board, or any other tribunal which, singly or in the
aggregate, would reasonably be expected to cause a Material Adverse
Change.  The Borrower is not, as of the
date hereof, nor by execution and delivery of this Agreement and the
performance of its obligations hereunder (with or without the passage of time)
will the Borrower be in default with respect to any order of any court,
governmental authority, arbitration board or other tribunal.

(f)                                    The Borrower has filed all federal and
state income tax returns, excise tax returns, and all other tax returns of
every kind and nature which are required to be filed by 

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the Borrower as of the date hereof and has paid all
taxes due as of the date hereof, except where the failure to comply would not
reasonably be expected to cause a Material Adverse Change.  The foregoing shall not preclude the
Borrower from contesting, in good faith, any such taxes.

(g)                                 The Borrower keeps all records concerning
its accounts (as such term is defined in the Illinois Uniform Commercial Code)
and has its chief executive office and principal place of business at the
address set forth at the beginning of the Agreement.

(h)                                 The execution and delivery of this
Agreement, the borrowing by the Borrower as herein provided, the execution and
delivery by the Borrower of all instruments, agreements and documents of every
kind and nature pursuant hereto and the performance by the Borrower of all of
its obligations to the Lender hereunder have been duly authorized by the Board
of Directors of the Borrower and, to the extent required by law or otherwise,
by the Borrower’s stockholders, and this Agreement and all instruments,
agreements and documents executed pursuant hereto are valid and binding
obligations of the Borrower enforceable in accordance with their terms except
to the extent such enforceability may be limited by laws of general application
affecting the rights of creditors.

(i)                                     The execution and delivery by the
Borrower of this Agreement and the performance of Borrower’s obligations
hereunder are not in contravention of any law or laws.  As of the date hereof, Borrower is in
compliance with all laws, orders, regulations and ordinances of all federal,
foreign, state and local governmental authorities relating to their business,
operations and assets, except where the failure to comply would not reasonably
be expected to cause a Material Adverse Change.

(j)                                     There is no provision in the certificate
of incorporation or the by-laws of the Borrower, or any indenture, contract or
agreement to which it is a party or by which it is bound, which prohibits the
execution and delivery of this Agreement or the performance by the Borrower of
its obligations hereunder.

(k)                                  No event has occurred and no condition
exists, which, upon the execution and delivery of this Agreement would
constitute an Event of Default hereunder. 
No consent, approval, or authorization of or filing, registration, or
qualification with, any governmental authority on the part of the Borrower is
required as a condition of the execution and delivery of this Agreement or any
other instrument, agreement or document contemplated hereby, or the performance
by the Borrower of its obligations hereunder or thereunder.

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SECTION 3

CONDITIONS PRECEDENT TO THE LOANS

3.1           The
obligations of the Lender to make the Loans are subject, at the time of the
making of each such Loan, to the satisfaction of the following conditions:

(a)                                  Borrower shall have delivered two copies
of this Agreement duly executed by an authorized officer of the Borrower;

(b)                                 Borrower shall have delivered the
Revolving Note duly executed by an authorized officer of the Borrower;

SECTION 4

AFFIRMATIVE COVENANTS

4.1           Payment.  The Borrower will duly and punctually pay
all interest and principal becoming due to the Lender and will duly and
punctually perform all things on its part to be done or performed under this
Agreement, or pursuant to any instrument, document or agreement executed
pursuant hereto.

4.2           Additional
Information.  The Borrower will,
from time to time, furnish the Lender with such information and statements
concerning the Loans and the Collateral as the Lender may reasonably request,
which information, if confidential information of the Borrower, will be kept
confidential by the Lender.  For the
purposes of this section, the term Lender shall mean Baxter Capital Corporation
and its affiliates.

4.3           Corporate
Existence.  The Borrower will
maintain its corporate existence in good standing, comply with all laws and
regulations of the United States, of any state or states thereof, of any
political subdivision thereof and of any governmental authority which may be
applicable to the Borrower or to the Borrower’s business except where failure
would not reasonably be expected to cause a Material Adverse Change.

4.4           Compliance
with Laws.  Borrower shall comply
with all laws, orders, regulations and ordinances of any federal, foreign,
state or local governmental authority, except where the failure to comply would
not reasonably be expected to cause a Material Adverse Change.

4.5           Insurance.  The Borrower shall maintain, at its expense,
such public liability and casualty and property damage insurance in such
amounts as is ordinarily carried by other businesses similar to Borrower.

4.6           Expenses.  The Borrower will pay or reimburse the
Lender, on demand, for all reasonable expenses (including, without limitation, reasonable
counsel fees and expenses) incurred or paid by the Lender in connection with
the enforcement by the Lender of its rights hereunder; protection or
realization on any Collateral held by the Lender as security for the
Liabilities of the Borrower and in the defense of any action against the Lender
with respect to its rights or liabilities hereunder.

4.7           Reports
to the SEC and to Shareholders.  The
Borrower will furnish to Lender promptly upon the filing or sending thereof,
copies of all regular, periodic or special reports of Borrower filed with the
SEC; copies of all registration statements of the Borrower filed with the 

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SEC (other than on Form S-8); and copies of all proxy
statements or other communications made to security holders generally.

4.8           Notice
of Default.  Borrower shall provide
written notice to Lender promptly upon becoming aware of any Event of Default
or any event which, if left uncured, with the passing of time or notice or both
would constitute an Event of Default describing the same together with the
steps taken by Borrower with respect thereto.

4.9           Use
of Proceeds.  The Borrower shall use
the proceeds of the Loans for working capital and general corporate purposes.

SECTION 5

NEGATIVE COVENANTS

5.1           Merger.  The Borrower will not sell all or
substantially all its assets to any other person or entity, or be acquired by
merger or consolidation with or into any other entity without the consent of
the Lender, which consent shall not be unreasonably withheld or delayed.

5.2           Liens.  The Borrower will not grant or suffer to
exist any mortgage, pledge, title retention agreement, security interest, lien,
charge or encumbrance with respect to the Collateral for the Loans.

5.3           Business.  The Borrower will not engage in any business
other than the business in which it is currently engaged or a business
reasonably allied thereto without the consent of the Lender, which consent will
not be unreasonably withheld or delayed.

SECTION
6

SECURITY

6.1           Grant
of Security Interest.  As security
for the repayment of each Loan and the payment of all other Liabilities of the
Borrower to the Lender, the Borrower does hereby pledge, assign and transfer to
the Lender and does hereby grant to the Lender a continuing and unconditional
security interest in and to all accounts (as such term is defined in Article 9
of the Illinois Uniform Commercial Code) of the Borrower existing now or
hereafter arising directly or indirectly from product sales under the
Development, Manufacturing and Marketing Agreement dated as of December 10,
1993 between the Borrower and Baxter Healthcare Corporation, as such agreement
may have been or may be amended, extended, restated or modified from time to
time (the “Platelet Agreement”), all of which, along with proceeds therefrom
are individually and collectively referred to herein as the “Collateral”.

6.2           Disposal.  Except as set forth herein, the Borrower
shall not sell, assign (by operation of law or otherwise) or otherwise dispose
of, or grant any rights with respect to any of the Collateral.

6.3           Further
Assurances.  The Borrower shall, at
the Lender’s request, at any time and from time to time execute and deliver
such financing statements, amendments and other 

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documents and do such acts as the Lender deems
necessary in order to establish and maintain a valid, attached and perfected
first priority security interests in the Collateral in favor of the Lender,
free and clear of all liens and claims and rights of third parties
whatsoever.  The Borrower hereby
irrevocably authorizes the Lender at any time, and from time to time, to file
in any jurisdiction any initial financing statement, amendments thereto or
other documents in the form and substance that the Lender deems necessary to
protect its interest in the Collateral.

SECTION 7

DEFAULT

7.1           Events
of Default.  The occurrence of any
of the following events shall be an Event of Default hereunder:

(a)                                  The Borrower shall fail to pay any
installment of principal or interest on account of any Loan or any other
Liabilities of the Borrower to the Lender (i) within two (2) days of the date
when such payment is due, or (ii) on demand, if such payment is due on demand.

(b)                                 The Borrower shall fail to observe or
perform any covenant or agreement contained in this Agreement or in any
instrument, document or agreement executed in connection therewith and the
expiration of thirty (30) days from written notice of such failure.

(c)                                  Any warranty, representation or statement
made or furnished to the Lender by or on behalf of the Borrower proves to have
been false in any material respect when made or furnished or deemed made.

(d)                                 Any event which results in the
acceleration of the maturity of the indebtedness of the Borrower to others for
borrowed money in excess of $100,000.00 under any indenture, agreement,
undertaking or otherwise, or which would permit the holders of such
indebtedness to accelerate the maturity thereof.

(e)                                  The acquisition by any person or entity of
15% or more of any voting equity security of the Borrower or its affiliates.

(f)                                    Dissolution, termination of existence,
insolvency, or business failure of the Borrower.

(g)                                 The Borrower shall: (i) cease, be unable,
or admit in writing its inability, to pay its debts as they mature, or make a
general assignment for the benefit of, or enter into any composition, trust
mortgage or other arrangement with creditors; (ii) apply for, or consent (by
admission of material allegations of a petition or otherwise) to the
appointment of a receiver, trustee or liquidator of the Borrower or of a
substantial part of its assets, or authorize such application or consent, or
proceedings seeking such appointment shall be commenced against the Borrower
and continue undismissed for sixty (60) days; or (iii) apply for, or consent
(by admission of material allegations of a petition or otherwise) to the
application of 

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any bankruptcy, reorganization, readjustment of debt,
insolvency, dissolution, liquidation or other similar law of any jurisdiction,
or authorize such application or consent, or proceedings to such end shall be
instituted against the Borrower and remain unstayed and undismissed for sixty
(60) days, be approved as properly instituted or result in adjudication of
bankruptcy or insolvency.

(h)                                 The occurrence of an Event of Default or
default under any other agreement between the Borrower and the Lender or any
affiliate of the Lender, or instrument or paper given to the Lender by the
Borrower in each case evidencing or effectuating this Agreement as amended from
time to time.

(i)                                     The occurrence of an impairment of the
Collateral which causes the Lender to reasonably believe that it is insecure.

7.2           Acceleration
and Default Rate.  Upon the
occurrence of any Event of Default, all commitments of the Lender to the
Borrower shall immediately terminate and all Liabilities of the Borrower to the
Lender shall, at the Lender’s option and without demand, and notwithstanding
any terms of payment in any note or other instrument evidencing such
Liabilities, become immediately due and payable.  Upon the occurrence of an Event of Default and without notice
therefore all amounts owed hereunder shall accrue interest at the Interest Rate
plus 2% per annum (the “Default Rate”).

7.3           Collateral.  The Lender shall have, to the extent
permitted by applicable state and federal laws, rules and regulations, the
right and power to: (i) directly notify the account debtor (as such term is
defined in Article 9 of the Illinois Uniform Commercial Code) under the
Platelet Agreement of the security interest of the Lender, and/or of the
assignment to the Lender of the Collateral and direct such account debtor to
make payments to the Lender if any amounts due or to become due with respect
thereto, and thereafter, collect any such amounts due on the Collateral
directly from such account debtor.

7.4           Other
Remedies.  The Lender may exercise,
from time to time, any and all remedies available to it under the Illinois
Uniform Commercial Code or under any other applicable law in addition to, and
not in lieu of, any rights and remedies expressly granted in this Agreement.

7.5           Application
of Proceeds.  The Lender shall upon
receipt of cash or solvent credits from collection of items of payment or
proceeds of Collateral, apply the whole or any part against the Liabilities
secured hereby.  The Lender shall
further have the exclusive right to determine how, when and what applications of
such payments and such credit shall be made on the Liabilities and such
determination shall be conclusive upon the Borrower, absent manifest
error.  Any proceeds of any disposition
by the Lender of all or any part of the Collateral by the Lender may, at the
Lender’s option, be first applied to the payment of expenses incurred by the
Lender in connection with the Collateral, including attorneys’ fees and other
legal expenses as otherwise provided herein.

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SECTION 8

NOTICE

8.1           Notices.  All notices and other communications
hereunder shall be in writing and made or delivered by telecopy, e-mail or
overnight air courier, and shall be deemed to be received by the party to whom
it was sent one (1) business day after sending.  All such notices and other communications to a party hereto shall
be addressed to such party at the address set forth at the beginning of this
Agreement or to such other address as such party may designate for itself in a
notice to the other party given in accordance with this section.

8.2           Addresses.  The addresses to which such communications
shall be sent are as follows:

(a)                                  If intended for the Borrower, to:  Cerus Corporation, 2411 Stanwell Dr.,
Concord, CA 94520 Attn:  Chief Executive
Officer.

(b)                                 If intended for the Lender, to:  Baxter Capital Corporation, One Baxter
Parkway DF4-3E, Deerfield, Illinois 60015-4633 Attn: President with copies
to:  Baxter Capital Corporation, One
Baxter Parkway DF2-2W, Deerfield, IL 60015-4633 Attn: Legal Counsel.

8.3           Change
of Address.  The addresses set forth
herein may be changed by notice hereunder.

SECTION 9

MISCELLANEOUS

9.1           Further
Assurances.  The Borrower will from
time to time execute and deliver to the Lender all such other and further
instruments and documents and take or cause to be taken all such other and
further action as the Lender may reasonably request in order to effect and
confirm or vest more securely in the Lender all rights contemplated in this
Agreement.

9.2           Waiver.  The Borrower may take any action herein
prohibited or omit to perform any act required to be performed by the Borrower
if the Borrower shall obtain the Lender’s prior written consent to each such
action, or omission to act.  No waiver
on the Lender’s part on any one occasion shall be deemed a waiver on any other
occasion.  The Lender shall not be
deemed to have waived any of its rights hereunder unless such waiver shall be
in writing and duly signed by an authorized officer of the Lender.

9.3           Amendment.  This Agreement may be amended only by an
instrument in writing and duly signed by the Borrower and the Lender.

9.4           Assignment.  The Borrower’s rights and obligations under
this Agreement shall not be assigned, transferred or delegated by operation of
law or otherwise.   The Lender may,
without the consent of the Borrower, assign or transfer its rights or delegate
or transfer its obligations set forth in this Loan Agreement by operation of
law or otherwise

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9.5           Binding
Effect.  All covenants, agreements,
representations and warranties contained in this Agreement shall bind the
Borrower, its respective successors and permitted assigns, and shall inure to
the Lender’s benefit and the benefit of the Lender’s successors and permitted
assigns, whether expressed or not.

9.6           Rights.  All rights of the Lender hereunder shall be
cumulative.  The Lender shall not be
required to have recourse to any Collateral before enforcing its rights or
remedies against the Borrower.  The
Borrower hereby waives presentment, demand and protest of any instrument and
any notice thereof.

9.7           Severability.  If any provisions of this Agreement shall be
held to be illegal or unenforceable, such illegality or unenforceability shall
relate solely to such provision and shall not affect the remainder of this
Agreement.

9.8           Governing
Law.  This Agreement shall be
construed and enforced in accordance with the internal laws (as opposed to the
conflicts of law provisions) of the State of Illinois.

9.9           WAIVER
OF JURY TRIAL.  THE BORROWER AND THE
LENDER EACH HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES ANY RIGHT IT
MAY HAVE OR HEREAFTER HAVE TO A TRIAL BY JURY IN RESPECT OF ANY SUIT, ACTION OR
PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT.  THE BORROWER HEREBY CERTIFIES THAT NEITHER
THE LENDER NOR ANY OF ITS REPRESENTATIVES, AGENTS OR COUNSEL HAS REPRESENTED,
EXPRESSLY OR OTHERWISE, THAT THE LENDER WOULD NOT, IN THE EVENT OF ANY SUCH
SUIT, ACTION OR PROCEEDING, SEEK TO ENFORCE THIS WAIVER OF RIGHT TO TRIAL BY
JURY.  THE BORROWER ACKNOWLEDGES THAT
THE LENDER HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER
THINGS, THIS WAIVER.  THE BORROWER
ACKNOWLEDGES THAT IT HAS READ THE PROVISIONS OF THIS AGREEMENT AND IN
PARTICULAR, THIS SECTION; HAS CONSULTED LEGAL COUNSEL; UNDERSTANDS THE RIGHT IT
IS GRANTING IN THIS AGREEMENT AND IS WAIVING IN THIS SECTION IN PARTICULAR, AND
MAKES THE ABOVE WAIVER KNOWINGLY, VOLUNTARILY AND INTENTIONALLY.

9.10         Venue.  The Borrower and the Lender agree that any
action or proceeding to enforce or arising out of this Agreement shall be
commenced in any court of the State of Illinois sitting in Chicago, or in the
District Court of the United States for the Northern District of Illinois, and
the Borrower waives personal service of process and agrees that a summons and
complaint commencing an action or proceeding in any such court shall be
properly served and confer personal jurisdiction if served by registered or
certified mail to the Borrower or as otherwise provided by the laws of the
State of Illinois or the United States of America.

9.11         Indemnification.  The Borrower agrees to defend (with counsel
satisfactory to the Lender), protect, indemnify and hold harmless each
Indemnified Party (for the purposes herein “Indemnified Party” and “Indemnified
Parties” shall mean each of the Lender and any parent corporation, affiliated
corporation or subsidiaries of the Lender, and each of their respective
officers, directors, employees, attorney and agents and all of such parties and
entities) from and against any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, 

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claims, costs, expenses and distributions of any kind
or nature (including, without limitation, the disbursements and the reasonable
fees of counsel for the Lender, which shall not include, attorneys’ fees and
time charges of attorneys who may be employees of the Lender, any parent
corporation or affiliated corporation of the Lender), which may be imposed on,
incurred by, or asserted against the Lender (whether direct, indirect or
consequential and whether based on any federal, state or local laws or
regulations, including, without limitation, securities, environmental laws and
commercial laws and regulations, under common law or in equity, or based on
contract or otherwise) in any manner relating to or arising out of this
Agreement or any related agreement, or any act, event or transaction related or
attendant thereto, unless as to any Indemnified Party it shall be determined in
a final, nonappealable judgment by a court of competent jurisdiction that such
losses, claims, damages, liabilities , or expenses resulted primarily from the
gross negligence or willful misconduct of such Indemnified Party.  Any liability, obligation, loss, damage,
penalty, cost or expense covered by this indemnity shall be paid to the Lender
on demand, and, failing prompt payment, shall, together with interest thereon
at the Default Rate from the date incurred by the Lender until paid by the
Borrower, be added to the Liabilities of the Borrower and be secured by the
Collateral.  The provisions of this Section
9.11 shall survive the satisfaction and payment of the other Liabilities
and the termination of this Agreement. 
The above obligation to indemnify and hold harmless applies only in
connection with Lender’s capacity as a lender under the Loans, and does not
create an obligation of Borrower to indemnify or hold harmless in connection
with rights or obligations arising under any other agreement or matter involving
Borrower and Lender or affiliates of Lender.

9.12         The
headings herein contained are inserted as a matter of convenience only and such
captions do not form a part of this Agreement and shall not be utilized in the
construction hereof.

 

 

 

*  *  *  *  *  *

 

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IN
WITNESS WHEREOF, the Borrower and the Lender have executed this Loan and
Security Agreement as of the date first above written.

 

	
   

  	
  CERUS CORPORATION, as the Borrower

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/  STEPHEN
  T. ISAACS

  
	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
  Stephen T. Isaacs

  
	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
  President & CEO

  

 

 

 

	
   

  	
  BAXTER CAPITAL CORPORATION, as the Lender

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/  STEVEN
  J. MEYER

  
	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
  Steven J. Meyer

  
	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
  President

  

 

 

12

 

Schedule
1

 

 

 

 

EXHIBIT
A

 

 

REVOLVING
NOTE

 

	
  $50,000,000.00

  	
  Chicago, Illinois

  
	
   

  	
   

  	
   

  	
  , 2002

  

 

 

FOR VALUE RECEIVED, the undersigned, CERUS CORPORATION, a Delaware Corporation
(the “Borrower”), HEREBY PROMISES TO PAY to the order of BAXTER CAPITAL CORPORATION, a Delaware
corporation  (“Lender”) the sum of
FIFTY MILLION AND 00/100 DOLLARS ($50,000,000.00) or so much thereof as shall
be borrowed hereunder and all remaining amounts due hereunder in the amounts,
on the dates and in the manner as set forth in the Loan and Security Agreement
by and among the Borrower and the Lender dated as of even date herewith (“Loan
Agreement”).  Interest shall accrue on
the unpaid principal amount hereunder at the Interest Rate until such time as
the amounts hereunder are paid in full, such interest payable at the times set
forth in the Loan Agreement with all outstanding amounts due and payable no
later than the Maturity Date.  All
interest shall be calculated on the basis of a 360-day year for the actual
number of days elapsed.  The Borrower
may prepay in whole or in part any time without any premium or penalty,
notwithstanding any refinancing, renewal, extension or modification of this
note.

 

Both principal and interest are payable exclusively lawful money of the
United States of America so that the funds are available to the Lender not
later than 11:00 a.m. (Chicago time) on the due dates and in the amounts
specified in the Loan Agreement.  All
amounts shall be paid to the Lender’s account at Bank One, N.A., Indianapolis,
Indiana.  All advances made by the
Lender to the Borrower, and the respective maturities thereof, and all payments
made on account of principal thereof, shall be recorded in the books and
records of the Lender and shall be deemed to be conclusively correct absent
manifest error.  Failure by the Lender
to record such advances or payments shall not relieve the Borrower of any
obligation with respect to such loan or payment.

 

This Note is the Revolving Note referred to in, and is entitled to the
benefits of, the Loan Agreement.  The
Loan Agreement, among other things, contains provisions for acceleration of the
maturity hereof upon the happening of certain stated events, and also for
prepayments on account of principal hereof prior to the maturity hereof upon
the terms and conditions therein specified. 
In addition, upon the occurrence of an Event of Default as therein
defined, this Revolving Note and all amounts owed hereunder shall accrue
interest at two hundred basis points (2.0%) above the interest rate applicable
immediately before such event occurred.

 

Presentment and demand for payment, notice of dishonor, protest and
notice of protest are hereby waived.  In
the event of an Event of Default the Borrower agrees to pay costs of collection
and reasonable attorneys’ fees in connection therewith.

 

Capitalized terms used but not defined herein have the same meanings as
in the Loan Agreement.

 

 

 

This Revolving Note shall be governed by, and construed in accordance
with, the internal laws (as distinguished from the conflicts of laws rules) of
the State of Illinois.

 

 

 

 

 

 

 

	
   

  	
  CERUS
  CORPORATION

  
	
   

  	
   

  
	
   

  	
  By: 

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  

 

 

 

 

 

 

 

EXHIBIT
B

TERM
NOTE

 

	
  $

  	
   

  	
   

  	
  Chicago, Illinois

  
	
   

  	
   

  	
   

  	
  , 200

  	
   

  

 

FOR VALUE RECEIVED, the undersigned, CERUS COPORATION, a Delaware corporation
(the “Borrower”), HEREBY PROMISES TO PAY to the order of BAXTER CAPITAL CORPORATION, a Delaware
corporation  (“Lender”) the sum of
__________________________________________ AND 00/100 DOLLARS ($____________)
or so much thereof as shall be borrowed hereunder and all remaining amounts due
hereunder in the amounts, on the dates and in the manner as set forth in the
Loan and Security Agreement by and among the Borrower and the Lender dated as
of November __, 2002 (“Loan Agreement”). 
The Borrower shall pay interest on the unpaid principal amount hereunder
until such time as the amounts hereunder are paid in full, such interest
payable at the rate(s) and at the times set forth in the Loan Agreement with
all outstanding amounts due and payable no later than the Maturity Date.  All interest shall be calculated on the
basis of a 360-day year for the actual number of days elapsed.  The Borrower may prepay in whole or in part
any time without any premium or penalty, notwithstanding any refinancing,
renewal, extension or modification of this note.

 

Both principal and interest are payable exclusively in lawful money of
the United States of America so that the funds are available to the Lender not
later than 11:00 a.m. (Chicago time) on the due dates and in the amounts
specified in the Loan Agreement.  All
amounts shall be paid to the Lender’s account at Bank One, N.A., Indianapolis,
Indiana.  All loans made by the Lender
to the Borrower, and the respective maturities thereof, and all payments made
on account of principal thereof, shall be recorded in the books and records of
the Lender and shall be deemed to be conclusively correct absent manifest
error.  Failure by the Lender to record
such loans or payments shall not relieve the Borrower of any obligation with
respect to such loan or payment.

 

This Note is the Term Note referred to in, and is entitled to the
benefits of, the Loan Agreement.  The
Loan Agreement, among other things, contains provisions for acceleration of the
maturity hereof upon the happening of certain stated events, and also for
prepayments on account of principal hereof prior to the maturity hereof upon
the terms and conditions therein specified. 
In addition, upon the occurrence of an Event of Default as therein
defined, this Term Note and all amounts owed hereunder shall accrue interest at
two hundred basis points (2.0%) above the interest rate applicable immediately
before such event occurred.

 

Presentment and demand for payment, notice of dishonor, protest and
notice of protest are hereby waived.  In
the event of an Event of Default the Borrower agrees to pay costs of collection
and reasonable attorneys’ fees in connection therewith.

 

This Term Note evidences the same indebtedness as did the Revolving
Note dated November __, 2002 in the original principal amount of $50,000,000.00
from the undersigned to the Lender (the “Revolving Note”) which is amended and
restated hereby.  This note is issued in
substitution for (and not in discharge of the indebtedness evidenced by) the
Revolving Note.

 

Capitalized terms used but not defined herein have the same meanings as
in the Loan Agreement.

 

 

 

 

This Term Note shall be governed by, and construed in
accordance with, the internal laws (as distinguished from the conflicts of laws
rules) of the State of Illinois.

 

 

	
   

  	
  CERUS
  CORPORATION

  
	
   

  	
   

  
	
   

  	
  By: 

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:EXHIBIT 10.42

 

CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS
DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES AND
EXCHANGE ACT OF 1934, AS AMENDED.

 

LETTER
OF UNDERSTANDING

 

 

This will serve as a letter of understanding
between Baxter and Cerus regarding the resolution of six points.

 

 

1.               G and A rate
resolution is as follows:

 

•                  Cerus will pay Baxter
$977,500 for FTE rate issues through 2001 by December 2002.

•                  Baxter will stop an
additional $608,000 claim on overcharges.

•                  The current G&A
methodology will remain in effect through December 2003 for both companies.

•                  The G&A rate for both
companies will be $60,000 per FTE starting January, 2004, and will continue
through the development period of all programs.

 

2.               [  *  ] providing they are capable
(as qualified as other competing suppliers) as per the Governance Committee,
will be the primary supplier of [  *  ].  Should there be a more favorable monetary
bid from a competitive supplier, [  *  ]
will be allowed to match the lower bid.

 

3.               Phase IV
studies will be reviewed by the Governance Committee.  Baxter will pay for Phase IV marketing trials.  Trials that provide additional claims or are
required by Regulatory Agencies will be considered R&D expense and shared
between both companies per development expense sharing in the respective
contracts.

 

4.               Net Sales
Definition

 

•                  Cerus agrees not to share in
SDP conversion kit revenues, except as noted below.

•                  Cerus will receive the
appropriate revenue split from the sales of the Intersol portion of products,
including the following:

 

o                 Amicus Kits

o                 RDP Collection
Kits

o                 Buffy Coat
Pooling Sets

o                 SDP Conversion
Kits

o                 Intersol to any
platform manufacturers

 

[ 
* ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT,
MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES AND EXCHANGE
ACT OF 1934, AS AMENDED.

 

 

 

•      Cerus agrees to receive no revenue from [  *  ] or
Leukoreduction Filters, assuming they are sold at pricing similar to
non-INTERCEPT uses.

•      Cerus agrees to share in the development
cost of manual or apheresis (Alyx) collection systems to allow for INTERCEPT
ready usage.  This development would
principally include [  *  ]
of [  *  ] and
[  *  ] with [  *  ].  In this case the revenue sharing will only
be on the incremental premium for the INTERCEPT-ready kit over the standard
Alyx Kit.

 

•                  In determining Net Sales,
the following guidelines will be used:

 

•                  For products that are
currently marketed, Baxter will continue to retain all revenues assuming they
are sold at pricing similar to non-INTERCEPT uses.

 

•                  For new products that are developed to be used solely with Intercept,
Cerus will have the option to participate in the development effort.  If Cerus chooses to participate, the
products will be included in the revenue sharing.  (See examples below)

 

•                  The Governance Committee
will review whether Cerus will have the option to participate in the
development based upon the above guidelines.  
If the Governance Committee is deadlocked on a product sharing decision,
it will be decided by the neutral committee of three individuals.

 

Examples:

 

•                  RBC conversion kit — for
competitive collection systems. This kit most likely would consist of the
addition of [  *  ]
to an already marketed [  *  ].
In this case the revenue sharing will only be on the incremental premium for
the INTERCEPT-ready kit over the standard SD Kit.

 

•      Data Management for the INTERCEPT process.

 

5.               Cerus agrees to
relinquish its claim to any revenues to the Haemonetics upfront and milestone
payments.  From the Haemonetics
payments, $[  *  ]
has been earmarked for product development of the [  *  ]. 
These funds will be used to cover Baxter’s and Cerus’ costs incurred
related to the development and regulatory approvals of the [  *  ].  Any funds remaining at the conclusion of the
development and regulatory approvals of the [  *  ]
will be split 50-50 between Baxter and Cerus but applied to 

 

 

2

 

[ 
* ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT,
MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES AND EXCHANGE
ACT OF 1934, AS AMENDED.

 

 

product development efforts
in other Cerus-Baxter pathogen inactivation programs.

 

Additionally, any upfront
and milestone payments Baxter receives from similar deals will be retained by
Baxter.  Section 6.3 of the Platelet
Contract will apply to these deals and Baxter will keep Cerus apprised of
negotiations of additional deals.  The
provisions of this paragraph relating to Baxter retention of up-front and
milestone payments apply only to the existing Haemonetics transaction and to
future platelet deals for access to Intersol.

 

6.               Baxter agrees
that section 6.3 of the Platelet agreement will remain in place.  In order to resolve deadlocked issues, a
panel of three individuals will be established to affect a resolution.

 

 

	
  CERUS
  CORPORATION

  	
   

  	
  BAXTER
  HEALTHCARE CORPORATION

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
  /s/
  STEPHEN T. ISAACS

  	
   

  	
  By:

  	
  /s/
  GREGORY P. YOUNG

  
	
   

  	
  Stephen
  T. Isaacs

  President & CEO

  	
   

  	
   

  	
  Gregory
  P. Young

  Corporate Vice President & President, Fenwal, Baxter Healthcare
  Corporation

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Date:

  	
  10-30-02

  	
   

  	
  Date:

  	
  11-1-02

  
	
   

  	
   

  	
   

  	
   

  	
   

  

 

 

3

 

 

[ 
* ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT,
MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES AND EXCHANGE
ACT OF 1934, AS AMENDED.

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