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EXHIBIT 10.4
BRIDGE LOAN AGREEMENT
BY AND AMONG
ZYMETX, INC.
AND
ZYMETX PURCHASE PARTNERS
AND
OKLAHOMA MEDICAL RESEARCH FOUNDATION
AND
PRESBYTERIAN HEALTH FOUNDATION
January 26, 1996
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TABLE OF CONTENTS
PAGE
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1. DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . 1
2. BRIDGE LOAN . . . . . . . . . . . . . . . . . . . . . . . . . 2
3. DELIVERIES AND ADVANCES . . . . . . . . . . . . . . . . . . . 3
4. SECURITY AGREEMENT . . . . . . . . . . . . . . . . . . . . . . 3
5. REPRESENTATIONS AND WARRANTIES OF THE COMPANY . . . . . . . . 3
6. REPRESENTATIONS AND WARRANTIES OF LENDERS . . . . . . . . . . 4
7. LENDERS CONDITIONS TO CLOSING . . . . . . . . . . . . . . . . 5
8. COMPANY CONDITIONS TO CLOSING . . . . . . . . . . . . . . . . 5
9. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . 6
Exhibits:
Exhibit A - Specimen of Bridge Note
Exhibit B - Specimen of Warrant
Exhibit C - Security Agreement and Conditional Assignment
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BRIDGE LOAN AGREEMENT
This Bridge Loan Agreement is entered into this 26th day of January,
1996, by and among ZymeTx, Inc., a Delaware corporation (the "Company"), ZymeTx
Purchase Partners, a New York partnership ("ZPP"), Oklahoma Medical Research
Foundation ("OMRF") and Presbyterian Health Foundation ("Presbyterian").
W I T N E S S E T H:
WHEREAS, in order to further the Company's business operations, the
Lenders desire to collectively loan the Company $325,000 in consideration for
the execution and delivery to them of Bridge Notes (as hereinafter defined) and
Warrants (as hereinafter defined) issued to them;
WHEREAS, the parties desire to secure all of the Bridge Notes with the
proceeds to OMRF in the event of certain dispositions of certain intellectual
property of OMRF, as provided herein;
NOW, THEREFORE, in consideration of the premises and in consideration
of the agreements and benefits set forth herein and other good and valuable
consideration, the receipt of which is hereby acknowledged, the Company and the
Lenders agree as follows:
1. DEFINITIONS
For purposes hereof, the following terms shall have the meanings set
forth below:
1.1. "Bridge Note" shall mean a promissory note having
such terms as provided in Section 2.3 and as the specimen set forth in Exhibit
"A" to this Agreement.
1.2. "Closing" shall have the meaning given in Section
2.5.
1.3. "Closing Date" shall be the date of the Closing,
which shall be held at such time as provided in Section 2.5.
1.4. "Common Stock" shall mean the common stock of the
Company, par value $0.001 per share.
1.5. "Company" shall mean ZymeTx, Inc., a Delaware
corporation.
1.6. "Intellectual Property Proceeds" shall mean the
Collateral, as such term is defined in the Security Agreement.
1.7. "Lender" or "Lenders", as the context requires, shall
mean ZPP, OMRF and Presbyterian.
1.8. "Letter Agreement" shall have the meaning given in
Section 3.1(b).
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1.9. "Maturity Date" shall mean the earlier to occur of
the closing of the Private Offering (as defined in the Letter Agreement), or
the expiration of twenty-four (24) months from the date of this Agreement.
1.10. "1933 Act" shall mean the Securities Act of 1933, as
amended.
1.11. "Principal Amount" shall mean the amount of principal
under any Bridge Note.
1.12. "Security Agreement" shall mean the Security
Agreement between OMRF, ZPP and Presbyterian, having such terms as set forth in
Section 4 and in form substantially identical to that attached hereto as
Exhibit "C."
1.13. "Warrant" shall mean a warrant to purchase Common
Stock, to be issued by the Company under the terms of Section 2.4 of this
Agreement.
2. BRIDGE LOAN
2.1. Loan by Lenders. Each Lender agrees to loan the
Company the Principal Amount as set forth below and in consideration thereof,
the Company agrees to issue to each Lender (a) a Bridge Note in such Principal
Amount as set forth below, and (b) a Warrant to purchase such number of shares
of Common Stock as set forth below:
PRINCIPAL AMOUNT
BRIDGE LENDER OF BRIDGE NOTE WARRANTS
------------- -------------- --------
ZPP $150,000 150,000
OMRF $87,500 87,500
Presbyterian $87,500 87,500
2.3. Bridge Notes. Each Bridge Note shall bear interest
(computed on the basis of a 360-day year) from the Closing Date until the
Maturity Date at a per annum rate of eight percent (8%), and shall be issued in
substantially the same form as set forth in Exhibit "A" hereto. The Bridge
Notes shall be secured by a perfected first security interest in the
Intellectual Property Proceeds of OMRF, pursuant to the terms of the Security
Agreement.
2.4. Warrants. For each $1.00 of Principal Amount of
Bridge Notes held by a Lender, each Lender shall be issued a Warrant entitling
such holder to purchase one (1) share of Common Stock at an exercise price of
$.80 per share. The Warrants shall be issued in substantially the same form as
set forth in Exhibit "B" hereto.
2.5. Closing. The Closing of the transactions
contemplated by this Agreement shall take place at 10:00 a.m. at the offices of
Phillips, McFall, XxXxxxxxx, XxXxx & Xxxxxx, P.C. 12th Floor, 211 X. Xxxxxxxx,
Oklahoma City, Oklahoma, on January ___, 1996, or at such time or place as the
parties hereto shall by written instrument designate.
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3. DELIVERIES AND ADVANCES
3.1. Deliveries by the Company. At the times hereinafter
provided, the Company will deliver to the Lenders the following:
(a) Bridge Notes. At Closing, the Bridge Notes
in their respective Principal Amounts, as provided in Section 2.1, will be
executed and delivered to the Lenders.
(b) Warrants. The Warrants, to purchase the
number of shares of Common Stock, as provided in Section 2.1, will be executed
and delivered to the Lenders immediately upon the effectiveness of the
recapitalization of the Company's common stock, $.01 par value, into common
stock, $.001 par value (the "Recapitalization"), in accordance with the letter
agreement dated December 13, 1995, by and among the Lenders, OMRF and the
Company, which is attached hereto as Annex "A" (the "Letter Agreement"). The
Company agrees that such recapitalization and any and all other necessary
corporate action shall be taken
3.2. Advances. Each Lender shall advance the funds, by
certified check or bank cashier's check or by wire transfer, in the respective
amounts set forth in Section 2.1., in five (5) equal monthly installments, with
the first installment occurring on January 26, 1996, and the remaining four
(4) monthly installments occurring on the fifteenth day of February, March,
April and May of 1996.
4. SECURITY AGREEMENT
In consideration for the transactions contemplated by the
Letter Agreement, OMRF shall, at Closing, execute and deliver the Security
Agreement in form substantially identical to that attached hereto as Exhibit
"C," pursuant to which OMRF shall grant to ZPP and Presbyterian a security
interest in the Intellectual Property Proceeds.
5. REPRESENTATIONS AND WARRANTIES OF THE COMPANY
As a material inducement to the Lenders to enter into this Agreement
and to effect the transactions contemplated hereto, the Company represents and
warrants that the following statements are true and correct as of the date
hereof and will be true and correct at the Closing Date, except as expressly
qualified or modified herein or on the Schedules attached hereto.
5.1. Organization and Good Standing. The Company is a
corporation duly organized, validly existing, and in good standing under the
laws of the State of Delaware and has full corporate power and authority to
enter into and perform its obligations under this Agreement and to own its
properties and to carry on its business as presently conducted and as proposed
to be conducted. The Company is duly qualified to do business as a foreign
corporation in every jurisdiction in which the failure to so qualify would have
a material adverse effect upon the Company.
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5.2. Validity of Transactions.
(a) Agreement Binding. This Agreement has been
duly authorized, executed and delivered by the Company and, when so executed
and delivered, is the valid and legally binding obligation of the Company,
enforceable in accordance with its terms, except as limited by applicable
bankruptcy, insolvency, reorganization and moratorium laws and other laws
affecting enforcement of creditors' rights generally and by general principles
of equity.
(b) Warrant Shares. The shares of Common Stock
issuable upon exercise of the Warrants will, upon effectiveness of the
Recapitalization, be duly authorized and reserved for issuance and, when issued
to the holders of the Warrants in accordance with the terms of the Warrants,
will be validly issued, fully paid, nonassessable, and free of any preemptive
rights.
(c) Additional Agreements. Each document
executed and delivered in connection with this transaction, including but not
limited to, the Bridge Notes, the Warrants and the Security Agreement, the
forms of which are attached hereto as Exhibits "X," "X" and "C," respectively,
have been or will have been prior to Closing duly authorized, executed and
delivered by the Company and when so executed and delivered, are the valid and
legally binding obligations of the Company enforceable in accordance with their
terms, except as limited by bankruptcy, insolvency, reorganization and
moratorium laws and other laws affecting enforcement of creditors' rights
generally and by general principles of equity.
6. REPRESENTATIONS AND WARRANTIES OF LENDERS
Each Lender represents and warrants on its own behalf and not for any
other Lender, that the following statements are true and correct as of the date
hereof:
6.1. Requisite Authority. Any and all corporate and/or
partnership action on the part of the Lender necessary for the consummation of
the transactions contemplated by this Agreement has been taken or will be taken
prior to the Closing, and this Agreement will be a valid and binding obligation
of the Lender enforceable in accordance with its terms, subject to applicable
bankruptcy, insolvency, reorganization and moratorium laws and other laws of
general application affecting enforcement of creditors rights generally.
Execution of this Agreement by the Lender shall not be in contravention or
result in a default of any bylaw, charter, contract, mortgage, indenture,
agreement, judgment, decree, order, rule or regulation to which the Lender is a
party or by which it is bound.
6.2. Limited Transferability. The Lenders acknowledge
that neither the Bridge Notes, the Warrants nor the Common Stock issuable under
the Warrants (collectively, the "Securities") have been registered under the
1933 Act, the Oklahoma Securities Act, as amended, or the securities laws of
any other state and is being offered, and will be sold, pursuant to applicable
exemptions from such registration and will be issued as "restricted securities"
as defined by Rule 144 promulgated pursuant to the 1933 Act. The Lender is an
accredited investor as defined in Rule 501 of the Regulation D promulgated by
the Securities and Exchange Commission under the 1933 Act. The Securities may
not be resold in the absence of an effective registration thereof under the
1933 Act and applicable state securities laws or unless, in the opinion of the
Company's counsel, an applicable exemption from registration is available.
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6.3. Acquisition for Investment. The Lender is acquiring
the Bridge Note and Warrant for its own account, for investment purposes only
and not with a view to, or for sale in connection with, a distribution, as that
term is used in Section 2(11) of the 1933 Act thereof in a manner which would
require registration under the 1933 Act or any state securities laws.
6.4. Restrictive Legend. The certificates evidencing the
Securities issued pursuant to this Agreement shall bear a restrictive legend to
the effect described in Section 6.2.
7. LENDERS CONDITIONS TO CLOSING
The obligations of the Lenders to consummate the Closing hereunder and
to satisfy the obligations under this Agreement shall be subject to the
satisfaction of the following conditions precedent at or before the Closing;
7.1. Security Agreement. OMRF, ZPP and Presbyterian shall
have each executed and delivered the Security Agreement as set forth in Exhibit
C.
7.2. Documents and Proceedings. All documents and
instruments to be delivered by the Company at Closing in accordance with
Section 3.2 and all corporate and other proceedings of the Company in
connection with this transaction, shall have been so delivered and performed
and shall be reasonably satisfactory to the Lenders and their legal counsel.
7.3. Performance of Agreement. The Company shall have
performed all of its covenants and obligations under this Agreement.
7.4. Representations and Warranties Correct. The
representations and warranties of the Company contained in Section 5 of this
Agreement shall be true and correct in all material respects when made and
shall be deemed repeated at and as of the Closing and shall be correct in all
material respects at and as of such time, except as directly affected by the
consummation of the transaction hereby or expressly consented to in writing by
the Lender.
8. COMPANY CONDITIONS TO CLOSING
The obligations of the Company to consummate the Closing hereunder and
to satisfy its obligations under this Agreement shall be subject to the
satisfaction of the following conditions precedent at or before the Closing.
8.1. Documents and Proceedings. All documents and
instruments to be delivered by the Lenders at Closing and all corporate and
other proceedings of the Lenders in connection with this transaction, shall
have been so delivered and performed and shall be reasonably satisfactory to
the Company and its legal counsel.
8.2. Performance of Agreement. Each Lender shall have
performed all of its covenants and obligations under this Agreement.
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8.3. Representations and Warranties Correct. The
representations and warranties of the Lenders contained in Section 6 of this
Agreement shall be true and correct in all material respects when made and
shall be deemed repeated at and as of the Closing Date and shall be correct in
all material respects at and as of such time, except as directly affected by
the consummation of the transaction hereby or expressly consented to in writing
by the Company.
9. MISCELLANEOUS
9.1. Survival of Representations. All representations and
warranties contained herein or made in writing by the Company and the Lenders
in connection with the transactions contemplated hereby except any
representation or warranty as to which compliance may have been appropriately
waived, shall survive the execution and delivery of this Agreement for a period
of one year from the Closing Date.
9.2. Waiver of Conditions. At any time or times during
the term hereof, the Company may waive fulfillment of any one or more of the
conditions to its obligations in whole or in part, and the Lenders may waive
fulfillment of any one or more of the foregoing conditions to their obligation,
in whole or in part, by delivering to the other party a written waiver or
waivers of fulfillment thereof to the extent specified in such written waiver
or waivers.
9.3. Partial Invalidity. If any term, covenant or
condition of this Agreement or the application thereof to any person or
circumstance shall, to any extent, be invalid or unenforceable, the remainder
of this Agreement, or the application of such term, covenant or condition to
persons or circumstances other than those as to which it is held invalid or
unenforceable, shall not be affected thereby and each term, covenant or
condition of this Agreement shall be valid and be enforced to the fullest
extent permitted by law.
9.4. Notices. Any notice relating to this Agreement shall
be deemed sufficiently given and served for all purposes if given by a telegram
filed, charges prepaid, or a writing deposited in the United States mail,
postage prepaid and registered or certified within the Continental United
States, addressed as follows:
IF TO THE COMPANY:
ZymeTx, Inc.
00 X.X. 0xx Xxxxxx
Xxxxxxxx Xxxx, Xxxxxxxx 00000
Attn: Xxxxx X. Xxxxxxxxxx, President
IF TO LENDERS:
ZymeTx Purchase Partners, Limited Partnership
0000 X. Xxxxxx Xxxxx, Xxxxx 0000
Xxxxx, Xxxxxxxx 00000
Attn: Xxx X. Xxxxxxx
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Oklahoma Medical Research Foundation
000 X.X. 00xx Xxxxxx
Xxxxxxxx Xxxx, Xxxxxxxx 00000
Presbyterian health Foundation
000 Xxxxxxxx X. Xxxxx Xxxx.
Xxxxxxxx Xxxx, Xxxxxxxx 00000
Any notice so duly send by mail shall be deemed given two (2) days
after deposit in a proper governmental mailing facility and any notice given by
telegram shall be deemed given on the day such notice is delivered to the
telegram company, charges paid.
9.5. Successors and Assigns. This Agreement shall inure
to the benefit of and be binding upon the successors and assigns of the parties
hereto and no right or liability or obligation arising hereunder may be
assigned by any parties hereto.
9.6. Law Governing. This Agreement shall be construed and
interpreted in accordance with and governed and enforced in all respects by the
laws of the State of Oklahoma.
9.7. Headings. The section, subsection and paragraph
headings throughout this Agreement are for convenience and reference only, and
the words contained therein shall not be held to expand, modify, amplify or aid
in the interpretation, construction or meaning of this Agreement.
9.8. Counterparts. This Agreement may be executed in any
number of counterparts, each signed by different persons and all of said
counterparts together shall constitute one and the same instrument, and such
instrument shall be deemed to have been made, executed and delivered on the
date first hereinabove written, irrespective of the time or times when the same
or any counterparts thereof actually may have been executed and delivered a
counterpart thereof to the Company and the Lenders.
9.9. Entire Agreement. This Agreement and the exhibits
contain the entire agreement of the parties hereto and may not be modified,
altered or changed in any manner whatsoever, except by a written agreement
signed by the parties hereto.
ZYMETX, INC.
a Delaware corporation
By: /s/ XXXXX X. XXXXXXXXXX
------------------------------------
Xxxxx X. Xxxxxxxxxx, President
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ZYMETX PURCHASE PARTNERS,
LIMITED PARTNERSHIP
a New York limited partnership
By: /s/ XXX X. XXXXXXX
------------------------------------
Xxx X. Xxxxxxx, President of
Xxxxxxxx Private Capital, Inc.,
General Partner
OKLAHOMA MEDICAL RESEARCH
FOUNDATION
an Oklahoma corporation
By: /s/ XXXXXXX X. XXXXXXX
------------------------------------
Xxxxxxx X. Xxxxxxx, President
PRESBYTERIAN HEALTH FOUNDATION
an Oklahoma corporation
By: /s/ XXXXXX XXXXXXX
------------------------------------
Xxxxxx XxXxxxx, Vice President
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