Exhibit 10.1
THIRD LOAN MODIFICATION AGREEMENT
This THIRD LOAN MODIFICATION AGREEMENT is entered into as of August 27,
1998, by and between SILICON VALLEY BANK, a California-chartered bank with its
principal place of business at 0000 Xxxxxx Xxxxx, Xxxxx Xxxxx, XX 00000 and with
a loan production office located at Wellesley Office Park, 00 Xxxxxxx Xxxxxx,
Xxxxx 000, Xxxxxxxxx, XX 00000, doing business under the name "Silicon Valley
East ("Bank"), and ENDOGEN, INC., a MASSACHUSETTS corporation with its principal
place of business at 00 XXXXXXXX XXX, XXXXXX, XXXXXXXXXXXXX 00000 ("Borrower").
RECITALS
Borrower has borrowed money from Bank pursuant to certain Existing Loan
Documents, as defined below. In consideration of certain financial
accommodations from Bank, and Borrower's continuing obligations under the
Existing Loan Documents, Borrower and Bank agree as follows:
AGREEMENT
1. DESCRIPTION OF EXISTING INDEBTEDNESS. Among other indebtedness which
may be owing by Borrower to Bank, Borrower is indebted to Bank pursuant to a
Revolving Promissory Note dated August 28, 1996 in the maximum principal amount
of $850,000 (the "Revolving Note") a Term Promissory Note dated August 28, 1996
in the maximum principal amount of $400,000 (the "Term Note") and an Equipment
Line Promissory Note dated October 8, 1997 in the maximum principal amount of
$250,000 (the "Equipment Note"). The Revolving Note, the Term Note and the
Equipment Note are governed by the terms of a Loan and Security Agreement dated
August 28, 1996 between Borrower and Bank, as amended by Loan Modification
Agreements dated as of May 7, 1997 and August 27, 1997 between Borrower and
Bank, and as such Loan and Security Agreement may be further amended from time
to time (the "Loan Agreement").
Hereinafter, all indebtedness owing by Borrower to Bank under the
Revolving Note, the Term Note and the Loan Agreement shall be referred to as the
"Indebtedness."
2. DESCRIPTION OF COLLATERAL. Repayment of the Indebtedness is secured
pursuant to the Loan Agreement. Hereinafter, the Loan Agreement, the Revolving
Note, the Term Note and the Equipment Note, together with all other documents
securing payment of the Indebtedness, shall be referred to as the "Existing Loan
Documents."
3. DESCRIPTION OF CHANGES IN TERMS.
3.1 Modifications to Revolving Note. The Revolving Note is hereby
amended as follows:
The entire principal amount and all accrued interest shall be due
and payable on AUGUST 26, 1999.
3.2 Modifications to Definitions. Section 1.1 of the Loan Agreement is
hereby amended by substituting the following definitions for those set forth
therein for the same terms, and in the case of new definitions, by adding those
new definitions to that Section 1.1:
"Revolving Maturity Date" means August 26, 1999.
"Eligible Foreign Accounts" means Accounts with respect to which the
account debtor does not have its principal place of business in the
United States and that are: (1) covered by credit insurance in form
and amount, and by an insurer satisfactory to Bank less the amount of
any deductible(s) which may be or become owing thereon; or (2)
supported by one or more letters of credit in favor of Bank as
beneficiary, in an amount and of a tenor, and issued by a financial
institution, acceptable to Bank; or (3) derived from sales of products
or services to Nycomed Amhersham International plc or to
Yamanouchi Pharmaceutical Co., Ltd., or (4) that Bank approves on a
case-by-case basis.
3.3 Modifications to Interest Rate Provisions. Section 2.4(a) of the Loan
Agreement is hereby replaced in its entirety with the following:
(a) Interest Rate. Except as set forth in Section 2.4(b), all Advances
shall bear interest on the average Daily Balance at a rate equal to
ONE HALF (0.5) percentage point above the Prime Rate; and the Term
Loan shall bear interest on the average Daily Balance at a rate equal
to ONE AND ONE-QUARTER (1.25) percentage points above the Prime Rate.
3.4 Deletion of Tangible Net Worth Covenant. Section 6.10 of the Loan
Agreement is hereby replaced in its entirety with the following:
6.10 Tangible Net Worth. INTENTIONALLY OMITTED
3.5 Modifications to Exhibits. Exhibit D of the Loan Agreement is hereby
replaced in its entirety with Exhibit D to this Agreement.
4. FACILITY FEE. Borrower shall pay to Bank a Facility Fee equal to FOUR
THOUSAND TWO HUNDRED FIFTY AND NO/100THS Dollars ($4,250), which fee shall be
due upon delivery of this Third Loan Modification Agreement to Bank and shall be
fully earned and non-refundable. as well as any out-of-pocket expenses incurred
by the Bank through the date hereof, including reasonable attorneys' fees and
expenses, and after the date hereof, all Bank Expenses, including reasonable
attorneys' fees and expenses, as and when they become due.
5. CONDITIONS PRECEDENT TO FURTHER ADVANCES. The obligation of Bank to
make further advances to Borrower under this line is subject to the condition
precedent that Bank shall have received, in form and substance satisfactory to
Bank, the following:
(a) this Third Loan Modification Agreement duly executed by Borrower;
(b) a Certificate of Clerk of Borrower with respect to charter
amendments, incumbency and resolutions authorizing the execution and delivery of
this Agreement;
(c) such other documents, and completion of such other matters, as
Bank may reasonably deem necessary or appropriate.
6. CONSISTENT CHANGES. The Existing Loan Documents are hereby amended
wherever necessary to reflect the changes described in this Third Loan
Modification Agreement.
7. NO DEFENSES OF BORROWER. Borrower agrees that as of this date, it has
no defenses against any of the obligations to pay any amounts under the
Indebtedness.
8. CONTINUING VALIDITY. Borrower understands and agrees that (i) in
modifying the Existing Loan Documents, Bank is relying upon Borrower's
representations, warranties and agreements, as set forth in the Existing Loan
Documents, (ii) except as expressly modified pursuant to this Third Loan
Modification Agreement (including the effects of Section 6 hereof), the Existing
Loan Documents remain unchanged and in full force and effect, (iii) Bank's
agreement to modify the Existing Loan Documents pursuant to this Third Loan
Modification Agreement shall in no way obligate Bank to make any future
modifications to the Existing Loan Documents, (iv) it is the intention of Bank
and Borrower to retain as liable parties all makers and endorsers of the
Existing Loan Documents, unless a party is expressly released by Bank in
writing, (v) no maker, endorser or guarantor will be released by virtue of this
Third Loan Modification Agreement, and (vi) the terms of this Section 8 apply
not only to this Third Loan Modification Agreement but also to all subsequent
loan modification agreements, if any.
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9. EFFECTIVENESS. This Agreement shall become effective only when it
shall have been executed by Borrower and Bank (provided, however, in no event
shall this Agreement become effective until signed by an officer of Bank in
California).
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as a sealed instrument as of the date first set forth above.
"Borrower": ENDOGEN, INC. "Bank": SILICON VALLEY BANK, doing
business as SILICON VALLEY EAST
By: /s/ Xxxx X. Xxxxxxx By: /s/ Xxxxxxx X. Xxxxx
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Xxxx X. Xxxxxxx, President Xxxxxxx X. Xxxxx, VP
SILICON VALLEY BANK
By: /s/ Xxxx Xxxxx
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Title: Vice President
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(Signed in Santa Xxxxx County, California)
EXHIBIT D FOLLOWS
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EXHIBIT D
COMPLIANCE CERTIFICATE
Borrower: Endogen, Inc. Lender: Silicon Valley Bank
00 Xxxxxxxx Xxx 0000 Xxxxxx Xxxxx
Xxxxxx, XX 00000 Xxxxx Xxxxx, XX 00000
The undersigned authorized officer of ENDOGEN, INC. hereby certifies that
in accordance with the terms and conditions of the Loan and Security Agreement
dated AUGUST 28, 1996 between Borrower and Bank, as amended (the "Loan
Agreement"), (i) Borrower is in complete compliance for the period ending
___________ of all required conditions and terms except as noted below and (ii)
all representations and warranties of Borrower stated in the Agreement are true,
accurate and complete in all material respects as of the date hereof. Attached
herewith are the required documents supporting the above certification. The
Officer further certifies that these are prepared in accordance with Generally
Accepted Accounting Principals (GAAP) and are consistent from one period to the
next except as explained in an accompanying letter or footnotes.
Please indicate compliance status by circling Yes/No under "Complies"
column
Reporting Covenant Required Complies
------------------ -------- --------
SEC Form 10Q Within 5 days of SEC filing Yes No
SEC Form 10K Within 5 days of SEC filing Yes No
A/R & A/P Agings Monthly within 25 days Yes No
A/R Audit Annual Yes No
Financial Covenants Required Actual Complies
------------------- -------- ------ --------
Maintain on a Quarterly Basis:
Minimum Quick Ratio commencing 1.10:1.0 __________:1.0 Yes No
8/31/97
Maximum Debt/TNW 0.75:1.0 __________:1.0 Yes No
Minimum Profitability* $1 $____________ Yes No
Minimum Debt Service 1.5:1.0 __________:1.0 Yes No
* Maximum loss of $75,000 allowed in any one quarter during the fiscal year
commencing 6/1/98.
Comments Regarding Exceptions:
On behalf of Borrower, the Officer further acknowledges that at any such time as
Borrower is out of compliance with any of the terms set forth in the Agreement,
including, without limitation, any of the financial covenants, Borrower cannot
receive any advances.
Sincerely,
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Signature BANK USE ONLY
---------------------------------- Received by:
TITLE
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---------------------------------- Date:
DATE
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Verified:
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Date:
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Compliance Status: Yes No
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