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EXHIBIT 10.20
WELLS FARGO
REVOLVING LINE OF CREDIT NOTE
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$9,000,000.00
BELLEVUE, WASHINGTON
DECEMBER 19, 2003
FOR VALUE RECEIVED, the undersigned NASTECH
PHARMACEUTICAL COMPANY INC.
("Borrower") promises to pay to the order
of WELLS FARGO BANK, NATIONAL
ASSOCIATION ("Bank") at its office at
BELLEVUE RCBO, 205 108TH AVENUE, NE, SUITE
600 , BELLEVUE, WA 98004, or at such other
place as the holder hereof may
designate, in lawful money of the United
States of America and in immediately
available funds, the principal sum of
$9,000,000.00, or so much thereof as may
be advanced and be outstanding, with
interest thereon, to be computed on each
advance from the date of its disbursement
as set forth herein.
1.
DEFINITIONS:
As used herein, the following terms shall have the meanings set
forth
after each, and any other term defined in
this Note shall have the meaning set
forth at the place defined:
1.1 "Business
Day" means any day except a Saturday, Sunday or any other day
on which commercial banks in Washington are
authorized or required by law to
close.
1.2 "Fixed
Rate Term" means a period commencing on a Business Day and
continuing for 1, 2 OR 3 MONTHS, as
designated by Borrower, during which all or
a portion of the outstanding principal
balance of this Note bears interest
determined in relation to LIBOR; provided
however, that no Fixed Rate Term may
be selected for a principal amount less
than $500,000.00; and provided further,
that no Fixed Rate Term shall extend beyond
the scheduled maturity date hereof.
If any Fixed Rate Term would end on a day
which is not a Business Day, then such
Fixed Rate Term shall be extended to the
next succeeding Business Day.
1.3 "LIBOR"
means the rate per annum (rounded upward, if necessary, to the
nearest whole 1/8 of 1%) determined by
dividing Base LIBOR by a percentage equal
to 100% less any LIBOR Reserve
Percentage.
(a) "Base
LIBOR" means the rate per annum for United States dollar
deposits quoted
by Bank as the Inter-Bank Market Offered Rate, with the
understanding that such rate is quoted by Bank for the purpose
of
calculating effective rates of interest for loans making
reference
thereto, on the first day of a Fixed Rate Term for delivery of
funds on
said date for a period of time approximately equal to the number
of
days in such Fixed Rate Term and in an amount approximately equal
to
the principal amount to which such Fixed Rate Term applies.
Borrower
understands and agrees that Bank may base its quotation of the
Inter-Bank Market Offered Rate upon such offers or other market
indicators of the Inter-Bank Market as Bank in its discretion
deems
appropriate
including, but not limited to, the rate offered for U.S.
dollar deposits on the London Inter-Bank Market.
(b) "LIBOR
Reserve Percentage" means the reserve percentage
prescribed by the Board of Governors of the Federal Reserve System
(or
any successor) for "Eurocurrency Liabilities" (as defined in
Regulation
D of the Federal Reserve Board, as amended), adjusted by Bank
for
expected changes in such reserve percentage during the applicable
Fixed
Rate Term.
1.4 "Prime
Rate" means at any time the rate of interest most recently
announced within Bank at its principal
office as its Prime Rate, with the
understanding that the Prime Rate is one of
Bank's base rates and serves as the
basis upon which effective rates of
interest are calculated for those loans
making reference thereto, and is evidenced
by the recording thereof after its
announcement in such internal publication
or publications as Bank may designate.
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2.
INTEREST:
2.1 Interest.
The outstanding principal balance of this Note shall bear
interest (computed on the basis of a
360-day year, actual days elapsed) either
(a) at a fluctuating rate per annum
1.50000% below the Prime Rate in effect from
time to time, or (b) at a fixed rate per
annum determined by Bank to be .75000%
above LIBOR in effect on the first day of
the applicable Fixed Rate Term. When
interest is determined in relation to the
Prime Rate, each change in the rate of
interest hereunder shall become effective
on the date each Prime Rate change is
announced within Bank. With respect to each
LIBOR selection option selected
hereunder, Bank is hereby authorized to
note the date, principal amount,
interest rate and Fixed Rate Term
applicable thereto and any payments made
thereon on Bank's books and records (either
manually or by electronic entry)
and/or on any schedule attached to this
Note, which notations shall be prima
facie evidence of the accuracy of the
information noted.
2.2 Selection
of Interest Rate Options. At any time any portion of this
Note bears interest determined in relation
to LIBOR, it may be continued by
Borrower at the end of the Fixed Rate Term
applicable thereto so that all or a
portion thereof bears interest determined
in relation to the Prime Rate or to
LIBOR for a new Fixed Rate Term designated
by Borrower. At any time any portion
of this Note bears interest determined in
relation to the Prime Rate, Borrower
may convert all or a portion thereof so
that it bears interest determined in
relation to LIBOR for a Fixed Rate Term
designated by Borrower. At such time as
Borrower requests an advance hereunder or
wishes to select a LIBOR option for
all or a portion of the outstanding
principal balance hereof, and at the end of
each Fixed Rate Term, Borrower shall give
Bank notice specifying: (a) the
interest rate option selected by Borrower;
(b) the principal amount subject
thereto; and (c) for each LIBOR selection,
the length of the applicable Fixed
Rate Term. Any such notice may be given by
telephone (or such other electronic
method as Bank may permit) so long as, with
respect to each LIBOR selection, (i)
if requested by Bank, Borrower provides to
Bank written confirmation thereof not
later than 3 Business Days after such
notice is given, and (ii) such notice is
given to Bank prior to 10:00 a.m. on the
first day of the Fixed Rate Term, or at
a later time during any Business Day if
Bank, at it's sole option but without
obligation to do so, accepts Borrower's
notice and quotes a fixed rate to
Borrower. If Borrower does not immediately
accept a fixed rate when quoted by
Bank, the quoted rate shall expire and any
subsequent LIBOR request from
Borrower shall be subject to a
redetermination by Bank of the applicable fixed
rate. If no specific designation of
interest is made at the time any advance is
requested hereunder or at the end of any
Fixed Rate Term, Borrower shall be
deemed to have made a Prime Rate interest
selection for such advance or the
principal amount to which such Fixed Rate
Term applied.
2.3 Taxes and
Regulatory Costs. Borrower shall pay to Bank immediately upon
demand, in addition to any other amounts
due or to become due hereunder, any and
all (a) withholdings, interest equalization
taxes, stamp taxes or other taxes
(except income and franchise taxes) imposed
by any domestic or foreign
governmental authority and related in any
manner to LIBOR, and (b) future,
supplemental, emergency or other changes in
the LIBOR Reserve Percentage,
assessment rates imposed by the Federal
Deposit Insurance Corporation, or
similar requirements or costs imposed by
any domestic or foreign governmental
authority or resulting from compliance by
Bank with any request or directive
(whether or not having the force of law)
from any central bank or other
governmental authority and related in any
manner to LIBOR to the extent they are
not included in the calculation of LIBOR.
In determining which of the foregoing
are attributable to any LIBOR option
available to Borrower hereunder, any
reasonable allocation made by Bank among
its operations shall be conclusive and
binding upon Borrower.
2.4 Payment of
Interest. Interest accrued on this Note shall be payable on
the 1ST day of each MONTH, commencing
JANUARY 1, 2004.
2.5 Default
Interest. From and after the maturity date of this Note, or
such earlier date as all principal owing
hereunder becomes due and payable by
acceleration or otherwise, the outstanding
principal balance of this Note shall
bear interest until paid in full at an
increased rate per annum (computed on the
basis of a 360-day year, actual days
elapsed) equal to 4% above the rate of
interest from time to time applicable to
this Note.
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2.6 Collection
of Payments. Borrower authorizes Bank to collect all
interest and fees due hereunder by charging
Borrower's deposit account number
4945083079 with Bank, or any other deposit
account maintained by any Borrower
with Bank, for the full amount thereof.
Should there be insufficient funds in
any such deposit account to pay all such
sums when due, the full amount of such
deficiency shall be immediately due and
payable by Borrower.
3.
BORROWING AND REPAYMENT:
3.1 Borrowing
and Repayment. Borrower may from time to time during the term
of this Note borrow, partially or wholly
repay its outstanding borrowings, and
reborrow, subject to all of the
limitations, terms and conditions of this Note
and of any document executed in connection
with or governing this Note; provided
however, that the total outstanding
borrowings under this Note shall not at any
time exceed the principal amount stated
above. The unpaid principal balance of
this obligation at any time shall be the
total amounts advanced hereunder by the
holder hereof less the amount of principal
payments made hereon by or for any
Borrower, which balance may be endorsed
hereon from time to time by the holder.
The outstanding principal balance of this
Note shall be due and payable in full
on DECEMBER 31, 2004.
3.2 Advances.
Advances hereunder, to the total amount of the principal sum
available hereunder, may be made by the
holder at the oral or written request of
(a) GREG WEAVER OR INGRID SIMMS, any one
acting alone, who are authorized to
request advances and direct the disposition
of any advances until written notice
of the revocation of such authority is
received by the holder at the office
designated above, or (b) any person, with
respect to advances deposited to the
credit of any deposit account of any
Borrower, which advances, when so
deposited, shall be con
