EXHIBIT 10.7
EXECUTION COPY
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LOAN AGREEMENT
THIS LOAN AGREEMENT (this "AGREEMENT"), is entered into as of May 6,
1999, between INFORMAX, INC., a Delaware corporation (the "BORROWER"), and PNC
BANK, NATIONAL ASSOCIATION (the "BANK"). The Borrower and the Bank, with the
intent to be legally bound, agree as follows:
1. LOAN. The following loan and credit facilities (collectively referred to as
the "FACILITY"), shall be subject to and governed by this Agreement:
$800,000 Secured Revolving Credit ("REVOLVING CREDIT")
$200,000 Equipment Line of Credit ("EQUIPMENT LINE")
The maximum available amount of the Facility shall be $1,000,000. The proceeds
of the Revolving Credit shall be used for general corporate and working capital
purposes. The proceeds of the Equipment Line shall be used only for the
acquisition of computer and telecommunications equipment.
2. TERMS AND CONDITIONS. Subject to the terms and conditions hereof and
relying upon the representations and warranties herein set forth, the Bank
agrees to make advances under the Facility (each an "ADVANCE") to the
Borrower at any time or from time to time on or after the date hereof in
accordance with the terms of this Agreement.
The Facility shall consist of the components set forth in Section 1 hereof
in accordance with the following terms:
2.1 EXPIRATION DATE.
(a) Revolving Credit: Three hundred sixty four (364) days from the
date of the closing of this Agreement ("CLOSING DATE"), or on such
subsequent anniversary of the Closing Date as the parties hereto may
agree (the "REVOLVING CREDIT EXPIRATION DATE").
(b) Equipment Line: All advances under the Equipment Line must be
requested and made within the three hundred sixty four (364) day
period immediately following the Closing Date (the "EQUIPMENT LINE
EXPIRATION DATE"). Six months from the Closing Date (the "FIRST TERM
LOAN CONVERSION DATE") all Equipment Line advances then outstanding
will convert into a term loan (the "FIRST TERM LOAN"). On the
Equipment Line Expiration Date, all Equipment Line advances made
since the First Term Loan Conversion Date shall be converted into
a second term loan (the "SECOND TERM LOAN"). Each of the First Term
Loan and the Second Term Loan shall provide for repayment of
principal and interest in twenty four (24) equal monthly
installments.
2.2 INTEREST RATES.
(a) Revolving Credit: the Prime Rate (as defined hereinafter) plus
1.50% per annum; the "PRIME RATE" shall be the rate of interest per
annum announced by the Bank from time to time as its "PRIME RATE;"
it is a base rate upon which other rates charged by the Bank are
based, and is not necessarily the best rate offered by the Bank.
(b) Equipment Line: the Prime Rate plus 1.75% per annum
2.3 FACILITY FEE. The Borrower shall pay to the Bank a one-time facility
fee in an amount equal to .75% of the maximum amount of the Facility
($7,500), payable on the Closing Date.
2.4 BORROWING BASE/AVAILABILITY.
(a) Revolving Credit: the Revolving Credit shall be available in
amounts determined in accordance with the Borrowing Base Rider in
the form attached hereto as Exhibit A.
(b) Equipment Line. (i) no Advances shall be available under the
Equipment Line until the earlier of (A) the consummation by the
Borrower of a new round of equity financing which results in net
proceeds to the Borrower of at least One Million Dollars
($1,000,000); and (B) certification by the Borrower that it has
attained a Tangible Net Worth, calculated in accordance with GAAP,
consistently applied, of at least Two Hundred Fifty Thousand Dollars
($250,000);
(ii) Advances under the Equipment Line shall be limited to 80% of
the face amount of equipment invoices (excluding taxes, shipping and
installation) submitted with any Advance Request (as provided below
in Section 2.5), not to exceed $200,000 in the aggregate.
2.5 REQUESTS. Except as otherwise provided herein, the Borrower may from
time to time prior to the Revolving Credit Expiration Date, or the
Equipment Line Expiration Date, as applicable, request the Bank to
make an advance under the Revolving Credit or Equipment Line by
delivering to the Bank, not later than 12:00 Noon, Eastern Standard
time, a request by telephone by the Chief Executive Officer of the
Borrower immediately confirmed in writing by letter, facsimile or
telex from the Chief Executive Officer of the Borrower (an "ADVANCE
REQUEST"), it being understood that the Bank may rely on the
authority of such officer making
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such a telephonic request without the necessity of receipt of such
written confirmation. Each Advance Request shall be irrevocable and
shall specify (a) the proposed borrowing date; and (b) the aggregate
amount of the proposed borrowing hereunder. If the Advance Request
is made under the Revolving Credit, it shall be accompanied by the
most recent Borrowing Base Certificate prepared by the Borrower. If
the Advance Request is made under the Equipment Line, it shall be
accompanied by invoices for equipment acquisitions.
2.6 PROMISSORY NOTES. The obligation of the Borrower to repay the
aggregate unpaid principal amount of the Revolving Credit, together
with interest thereon, shall be evidenced by a promissory note of
the Borrower ("REVOLVING CREDIT NOTE") payable to the order of the
Bank in a face amount equal to the maximum amount of the Revolving
Credit. The obligation of the Borrower to repay the aggregate unpaid
principal amount of the Equipment Line, together with interest
thereon, shall be evidenced by a promissory note of the Borrower
("TERM NOTE") payable to the order of the Bank in a face amount
equal to the maximum amount of the Equipment Line. The Revolving
Credit Note and the Term Note shall be referred to together herein
as the "NOTES."
2.7 LOCKBOX. If an Event of Default (as hereinafter defined) occurs, and
the same is not cured subject to any applicable cure period, the
Bank may require, in its sole discretion, the establishment of a
lockbox at the Bank to which account debtors of the Borrower would
submit all payments in respect of the Borrower's accounts
receivable.
3. SECURITY. The security for repayment of the Facility shall include but not
be limited to the collateral, guaranties and other documents heretofore,
contemporaneously or hereafter executed and delivered to the Bank (the
"SECURITY DOCUMENTS"), which shall secure repayment of the Facility, the
Notes and all other loans, advances, debts, liabilities, obligations,
covenants and duties owing by the Borrower to the Bank of any kind or
nature, present or future, whether or not evidenced by any note, guaranty
or other instrument, whether arising under any agreement, instrument or
document, whether or not for the payment of money, whether arising by
reason of an extension of credit, opening of a letter of credit, loan or
guarantee or in any other manner, whether arising out of overdrafts on
deposit or other accounts or electronic funds transfers (whether through
automatic clearing houses or otherwise) or out of the Bank's non-receipt of
or inability to collect funds or otherwise not being made whole in
connection with depository transfer check or other similar arrangements,
whether direct or indirect (including those acquired by assignment or
participation), absolute or contingent, joint or several, due or to become
due, now existing or hereafter arising, and any amendments, extensions,
renewals or increases and all costs and expenses of the Bank incurred in
the documentation, negotiation, modification, enforcement, collection or
otherwise in connection with any of the foregoing, including but not
limited to reasonable attorneys' fees and expenses (hereinafter referred to
collectively as the "OBLIGATIONS"). Unless expressly provided to
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the contrary in documentation for any other loan or loans, it is the
express intent of the Bank and the Borrower that all Obligations including
those included in the Facility be cross-collateralized and cross-defaulted,
such that collateral securing any of the Obligations shall secure repayment
of all Obligations and a default under any Obligation shall be a default
under all Obligations. This Agreement (including the Addendum), the Notes
and the Security Documents are collectively referred to as the "LOAN
DOCUMENTS".
4. REPRESENTATIONS AND WARRANTIES. The Borrower hereby makes the following
representations and warranties, which shall be true and correct as of the
date of this Agreement and the date of the making of an Advance, and which
shall be true and correct except as otherwise set forth on the Addendum
attached hereto and incorporated herein by reference (the "ADDENDUM").
4.1. EXISTENCE, POWER AND AUTHORITY. The Borrower is duly organized,
validly existing and in good standing under the laws of Delaware and
has the corporate power and authority to own and operate its assets
and to conduct its business as now or currently proposed to be
carried on, and is duly qualified, licensed and in good standing to
do business in all jurisdictions where its ownership of property or
the nature of its business requires such qualification or licensing,
except where the failure to be so qualified or licensed would not
have a material adverse effect on (a) the business, operations,
property, condition (financial or otherwise) or prospects of the
Borrower or (b) the validity or enforceability of this Agreement or
any of the other Loan Documents or the rights or remedies of the
Bank hereunder or thereunder (a "MATERIAL ADVERSE EFFECT"). The
Borrower is duly authorized to execute and deliver the Loan
Documents, its Board of Directors has taken all necessary action to
authorize the execution and delivery of the Loan Documents, and the
Borrower is and will continue to be duly authorized to borrow under
this Agreement and to perform all of the other terms and provisions
of the Loan Documents.
4.2. FINANCIAL STATEMENTS. The Borrower has delivered or caused to be
delivered its most recent balance sheet and income statement for the
fiscal year ended December 31, 1998 (the "HISTORICAL FINANCIAL
STATEMENTS"). The Historical Financial Statements are true, complete
and accurate in all material respects and fairly present the
financial condition, assets and liabilities, whether accrued,
absolute, contingent or otherwise and the result of the Borrower's
operations for the period specified therein. The Historical
Financial Statements have been prepared in accordance with generally
accepted accounting principles ("GAAP") consistently applied from
period to period subject in the case of interim statements to normal
year-end adjustments and to items that would be disclosed in
footnotes to audited statements.
4.3. NO MATERIAL ADVERSE CHANGE. Since the date of the Historical
Financial Statements, the Borrower has not suffered any material
damage to, destruction or loss of, its assets, and no event or
condition has occurred or exists, which has
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resulted or, to Borrower's knowledge, could reasonably be expected
to result in a material adverse change in its business, assets,
operations, financial condition or result of operation.
4.4. BINDING OBLIGATIONS. The Loan Documents, when executed and delivered
by the Borrower, will constitute the legal, valid and binding
obligations of the Borrower enforceable in accordance with their
terms except as enforceability may be limited by applicable
bankruptcy, reorganization, moratorium and other laws, now or
hereafter in effect, affecting the enforcement of creditor's rights
generally and that enforceability may be limited by general
principles of equity.
4.5. NO DEFAULTS OR VIOLATIONS. There does not exist any Event of Default
under this Agreement or any material default or violation by the
Borrower of or under any of the terms, conditions or obligations of:
(i) its certificate of incorporation or bylaws; (ii) any material
indenture, mortgage, deed of trust, franchise, permit, contract,
agreement, or other instrument to which it is a party or by which it
is bound; or (iii) any law, regulation, ruling, order, injunction,
decree, condition or other requirement of a material nature
applicable to or imposed upon it by any law, or the action by any
court or any governmental authority or agency against the Borrower
or its assets. The consummation of the transactions set forth in
this Agreement will not result in any such default or violation.
4.6. TITLE TO ASSETS. The Borrower has valid title to the assets
reflected on the Historical Financial Statements, free and clear of
all liens and encumbrances, except for (i) current taxes and
assessments not yet due and payable, (ii) liens and encumbrances, if
any, reflected or noted in the Historical Financial Statements,
(iii) assets disposed of by the Borrower in the ordinary course of
business since the date of the Historical Financial Statements, (iv)
those liens or encumbrances specified on the Addendum, (v) liens and
encumbrances permitted by Section 6.2 and (vi) liens and
encumbrances under the Loan Documents.
4.7. LITIGATION. There are no actions, suits, proceedings or governmental
investigations pending or, to the best of the Borrower's knowledge,
threatened against the Borrower, which could reasonably be expected
to result in a material adverse change in its business, assets,
operations, financial condition or results of operations and there
is no basis known to the Borrower for any action, suit, proceedings
or governmental investigation which could reasonably be expected to
result in such a material adverse change. All pending or threatened
litigation against the Borrower of which Borrower has knowledge is
listed on the Addendum.
4.8. TAX RETURNS. The Borrower has filed all returns and reports that are
required to be filed by it in connection with any federal, state or
local tax, duty or charge levied, assessed or imposed upon it or its
property or withheld by it, including
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unemployment, social security and similar taxes, and all of such
taxes have been either paid or adequate reserve or other provision
has been made.
4.9. EMPLOYEE BENEFIT PLANS. Each employee benefit plan as to which the
Borrower may have any liability complies in all material respects
with all applicable provisions of the Employee Retirement Income
Security Act of 1974 ("ERISA"), including minimum funding
requirements, and (i) no Prohibited Transaction (as defined under
ERISA) has occurred with respect to any such plan, (ii) no
Reportable Event (as defined under Section 4043 of ERISA) has
occurred with respect to any such plan which would cause the Pension
Benefit Guaranty Corporation to institute proceedings under Section
4042 of ERISA, (iii) the Borrower has not withdrawn from any such
plan or initiated steps to do so, and (iv) no steps have been taken
to terminate any such plan.
4.10. ENVIRONMENTAL MATTERS. The Borrower is in compliance, in all
material respects, with all Environmental Laws, including, without
limitation, all Environmental Laws in jurisdictions in which the
Borrower owns or operates, or has owned or operated, a facility or
site, stores Collateral, arranges or has arranged for disposal or
treatment of hazardous substances, solid waste or other waste,
accepts or has accepted for transport any hazardous substances,
solid waste or other wastes or holds or has held any interest in
real property or otherwise. Except as otherwise disclosed on the
Addendum, no litigation or proceeding arising under, relating to or
in connection with any Environmental Law is pending or, to the
Borrower's knowledge, threatened against the Borrower, any real
property which the Borrower holds or has held an interest or any
past or present operation of the Borrower. To the Borrower's
knowledge, no release, threatened release or disposal of hazardous
waste, solid waste or other wastes is occurring, or has occurred,
on, under or to any real property in which the Borrower holds any
interest or performs any of its operations, in material violation of
any Environmental Law. As used in this Section, "LITIGATION OR
PROCEEDING" means any demand, claim notice, suit, suit in equity,
action, administrative action, investigation or inquiry whether
brought by a governmental authority or other person, and
"ENVIRONMENTAL LAWS" means all provisions of laws, statutes,
ordinances, rules, regulations, permits, licenses, judgments, writs,
injunctions, decrees, orders, awards and standards promulgated by
any governmental authority concerning health, safety and protection
of, or regulation of the discharge of substances into, the
environment.
4.11. INTELLECTUAL PROPERTY. The Borrower owns or has the right to use all
patents, patent rights, and to the information, knowledge and belief
of the Borrower, Borrower owns or has the right to use all
trademarks, trade names, service marks, copyrights, intellectual
property, technology, know-how and processes necessary for the
conduct of its business as currently conducted that are material to
the condition (financial or otherwise), business or operations of
the Borrower.
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4.12. YEAR 2000. The Borrower has reviewed the areas within its business
and operations which could be adversely affected by, and has
developed or is developing a program to address on a timely basis
the risk that certain computer applications used by the Borrower may
be unable to recognize and perform properly date-sensitive functions
involving dates prior to and after December 31, 1999 (the "YEAR 2000
PROBLEM"). The Year 2000 Problem will not have, and is not
reasonably expected to have, a Material Adverse Effect.
4.13. REGULATORY MATTERS. No part of the proceeds of the Loan will be used
for "PURCHASING" or "CARRYING" any "MARGIN STOCK" within the
respective meanings of each of the quoted terms under Regulation U
of the Board of Governors of the Federal Reserve System as now and
from time to time in effect or for any purpose which violates the
provisions of the Regulations of such Board of Governors.
4.14. SOLVENCY. As of the date hereof and after giving effect to the
transactions contemplated by the Loan Documents, the Borrower will
have sufficient cash flow to enable it to pay its debts as they
mature.
4.15. DISCLOSURE. None of the Loan Documents contains any untrue statement
of material fact or omits to state a material fact necessary in
order to make the statements contained in this Agreement or the Loan
Documents not misleading. There is no fact known to the Borrower
which materially adversely affects or, might materially adversely
affect, the business, assets, operations, financial condition or
results of operation of the Borrower and which has not otherwise
been fully set forth in this Agreement or in the Loan Documents.
5. AFFIRMATIVE COVENANTS. The Borrower agrees that from the date of execution
of this Agreement until all Obligations have been fully paid and any
commitments of the Bank to the Borrower have been terminated, the Borrower
will:
5.1. BOOKS AND RECORDS. Maintain books and records in accordance with
GAAP and give representatives of the Bank access thereto at all
reasonable times following reasonable notice from the Bank,
including permission to examine, copy (at the Bank's expense) and
make abstracts from any of such books and records and such other
information as the Bank may from time to time reasonably request,
and the Borrower will make available to the Bank for examination
copies of any reports, statements or returns which the Borrower may
make to or file with any governmental department, bureau or agency,
federal or state. The Bank shall treat as confidential all
non-public information contained in such books and records;
provided, however, that if Bank is required to disclose confidential
information pursuant to a court order, subpoena or similar process,
prior to disclosure Bank shall: (i) promptly provide Borrower with a
copy of the court order or subpoena; (ii) cooperate with Borrower at
Borrower's expense in obtaining a protective or similar order; and
(iii) in any event, disclose only such confidential information as
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Bank, with the advice of its counsel, shall deem necessary to comply
with such court order or subpoena.
5.2. INTERIM FINANCIAL STATEMENTS; CERTIFICATE OF NO DEFAULT; ACCOUNTS
RECEIVABLE.
(a) Monthly Reporting. Furnish the Bank within twenty (20) days
after the end of each month:
(i) a detailed report on its sales and accounts receivable in
such reasonable detail consistent with the form currently used by
the Borrower's management;
(ii) an income statement and balance sheet for such period,
each in reasonable detail, certified by an authorized officer of the
Borrower and prepared in accordance with GAAP applied from period to
period;
(iii) a certificate as to its compliance with applicable
financial covenants for the period then ended and whether any Event
of Default exists, and, if so, the nature thereof and the corrective
measures the Borrower proposes to take; and
(iv) a completed Borrowing Base Certificate in the form
attached to the Borrowing Base Rider.
(b) Quarterly Reporting. Furnish the Borrower's Financial Statements
to the Bank within twenty (20) days of the end of each calendar
quarter. "FINANCIAL STATEMENTS" means the Borrower's consolidated
and, if required by the Bank in its sole discretion, consolidating
balance sheets, income statements and statements of cash flows for
the year or quarter together with year-to-date figures and
comparative figures for the corresponding periods of the prior year.
5.3. ANNUAL FINANCIAL STATEMENTS. Furnish the Borrower's Financial
Statements to the Bank within ninety (90) days after the end of each
fiscal year. Those Financial Statements will be prepared in
accordance with GAAP and audited by an independent certified public
accountant selected by the Borrower and reasonably satisfactory to
the Bank. Audited Financial Statements shall contain the unqualified
opinion of an independent certified public accountant and its
examination shall have been made in accordance with GAAP
consistently applied from period to period. The Borrower will also
provide filings made with any regulatory authority and such other
information reasonably requested by the Bank from time to time.
5.4. PAYMENT OF TAXES AND OTHER CHARGES. Pay and discharge when due all
indebtedness and all taxes, assessments, charges, levies and other
liabilities imposed upon the Borrower, its income, profits, property
or business, except those
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which currently are being contested in good faith by appropriate
proceedings and for which the Borrower shall have set aside adequate
reserves in accordance with GAAP or made other adequate provision
with respect thereto acceptable to the Bank in its reasonable
discretion.
5.5. MAINTENANCE OF EXISTENCE, OPERATION AND ASSETS. Do all things
necessary to maintain, renew and keep in full force and effect its
organizational existence and all rights, permits and franchises
necessary to enable it to continue its business; continue in
operation in substantially the same manner as at present; keep its
properties in good operating condition and repair, ordinary wear and
tear and obsolescence excepted; and make all necessary and proper
repairs, renewals, replacements, additions and improvements thereto.
5.6. INSURANCE. Maintain with financially sound and reputable insurers,
insurance with respect to its property and business against such
casualties and contingencies, of such types and in such amounts as
is customary for established companies engaged in the same or
similar business and similarly situated. In the event of a conflict
between the provisions of this Section and the terms of any Security
Documents relating to insurance, the provisions in the Security
Documents will control.
5.7. COMPLIANCE WITH LAWS. Comply in all material respects with all laws
applicable to the Borrower and to the operation of its business
(including any statute, rule or regulation relating to employment
practices and pension benefits or to environmental, occupational and
health standards and controls).
5.8. BANK ACCOUNTS. Establish and maintain at the Bank all of the
Borrower's primary depository accounts.
5.9. FINANCIAL COVENANTS. Comply with all of the financial and other
covenants, if any, set forth on the Addendum, subject to all
applicable cure periods set forth herein.
5.10. ADDITIONAL REPORTS. Provide prompt written notice to the Bank of the
occurrence of any of the following of which the Borrower obtains
knowledge (together with a description of the action which the
Borrower proposes to take with respect thereto): (i) any Event of
Default, (ii) any material litigation filed by or against the
Borrower, (iii) any Reportable Event or Prohibited Transaction with
respect to any Employee Benefit Plan(s) (as defined in ERISA) or
(iv) any event which might reasonably be expected to result in a
material adverse change in the business, assets, operations,
financial condition or results of operation of the Borrower.
6. NEGATIVE COVENANTS. The Borrower covenants and agrees that from the date of
execution of this Agreement until all Obligations have been fully paid and
any
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commitments of the Bank to the Borrower have been terminated, the Borrower
will not, except as set forth in the Addendum, without the Bank's prior
written consent:
6.1. INDEBTEDNESS. Incur, assume or permit to exist any indebtedness for
borrowed money other than: (i) indebtedness under the Facility and
any subsequent indebtedness to the Bank; (ii) existing indebtedness
disclosed on the Borrower's Historical Financial Statements referred
to in Section 4.2; (iii) capital lease obligations not to exceed
$100,000 in the aggregate over the term of the Loan; (iv) trade
payables incurred in the ordinary course of business; (v) guaranty
obligations permitted pursuant to Section 6.3 below; or (vi)
indebtedness specifically disclosed by the Borrower on the Addendum
and any renewal or refinance of thereof which does not increase the
principal thereof.
6.2. LIENS AND ENCUMBRANCES. Except as provided in Section 4.6, create,
assume or permit to exist any mortgage, pledge, encumbrance or other
security interest or lien upon any assets now owned or hereafter
acquired or enter into any lease or any arrangement for the
acquisition of property subject to any conditional sales agreement,
other than (i) leasehold interests related to operating leases
entered into by the Borrower in the ordinary course of business,
(ii) liens for taxes, assessments or charges due and payable and
subject to interest or penalty, provided that the Borrower maintains
such reserves or other appropriate provisions as shall be required
by GAAP and pays all such taxes, assessments or charges forthwith
upon the commencement of proceedings to foreclose any such lien,
(iii) liens of mechanics, materialmen, warehousemen, repairmen,
carriers, or other statutory nonconsensual liens, provided, that
such liens do not materially affect the Collateral or, in the
aggregate, materially impair the ability of the Borrower to perform
its Obligations hereunder or under the other Loan Documents, (iv)
liens consisting of zoning restrictions, easements or other
restrictions on the use of real property, none of which materially
impairs the use of such property or the value thereof, and none of
which is violated in any material respect by existing or proposed
structures or land use, and (v) pledges or deposits made in the
ordinary course of business to secure payment of workmen's
compensation, or to participate in any fund in connection with
workmen's compensation, unemployment insurance, old-age pensions or
other social security programs.
6.3. GUARANTEES. Guarantee, endorse or voluntarily become contingently
liable for the obligations of any person, firm or corporation,
except in connection with the endorsement and deposit of checks in
the ordinary course of business for collection.
6.4. LOANS OR ADVANCES; INVESTMENTS. Purchase or hold beneficially any
stock, other securities or evidences of indebtedness of any loans or
advances to, or make any investment or acquire any interest
whatsoever in, any other person, firm or corporation in excess of
$10,000 in the aggregate during the term of the Facility, except (i)
investments disclosed on the Borrower's Historical Financial
Statements
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or acceptable to the Bank in its reasonable discretion, and (ii)
advances to employees to meet expenses incurred by such employees in
the ordinary course of business.
6.5. MERGER OR TRANSFER OF ASSETS. Merge or consolidate with or into any
person, firm or corporation or lease, sell, transfer or otherwise
dispose of property or assets (excluding the sale of inventory in
the ordinary course of business) having an aggregate book value in
excess of One Hundred Thousand Dollars ($100,000) whether now owned
or hereafter acquired other than such merger, consolidation or
disposition approved by the Bank.
6.6. CHANGE IN BUSINESS, MANAGEMENT OR OWNERSHIP. Make or permit any
material change in the nature of its business as carried on as of
the date hereof, in the composition of its current executive
management, or in its equity ownership other than (i) transfers to
heirs and beneficiaries of a stockholder upon the death of a
stockholder, (ii) in connection with an initial public offering of
the capital stock of the Borrower, (iii) private offerings of the
equity securities of the Borrower approved by the Borrower's Board
of Directors, (iv) issuances of shares pursuant to the Borrower's
employee stock option plan in effect as of the date hereof or (v) in
connection with the repurchase of shares acquired through retirement
plans or employee stock option plans or pursuant to the exercise of
contractual rights of first refusal to purchase such shares;
provided that the Bank shall not unreasonably withhold or delay its
consent to a change in the Borrower's executive management which has
been approved by the Borrower's Board of Directors.
6.7. DIVIDENDS. Declare or pay any dividends on or make any distribution
with respect to any class of its equity or ownership interest, or
purchase, redeem, retire or otherwise acquire any of its equity
other than (a) recessions and/or reissuance of the equity securities
of the Borrower to address Blue Sky matters and (b) purchase,
redemption, retirement or other acquisitions of equity securities of
the Borrower (not covered by clause (a) above) not to exceed $25,000
in the aggregate during of the term of the Facility.
7. EVENTS OF DEFAULT. The occurrence of any of the following will be deemed to
be an "EVENT OF DEFAULT":
7.1. PAYMENT DEFAULT. The Borrower shall fail to pay any payment of
principal when due or any payment of interest within five (5)
business days following the date when due, in respect of the
Obligations.
7.2. MATERIAL ADVERSE CHANGE. There shall be a material adverse change in
the business, operations, assets, financial condition or results of
operations of Borrower.
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7.3. COVENANT DEFAULT. The Borrower shall default in the performance of,
or violate any of, the covenants or agreements contained in this
Agreement (other than with respect to payment as set forth in
Section 7.1), which default shall not have been cured within fifteen
(15) business days after the occurrence thereof.
7.4. BREACH OF WARRANTY. Any Financial Statement, representation,
warranty or certificate made or furnished by the Borrower to the
Bank in connection with this Agreement shall be false, incorrect or
incomplete in any material respect when made.
7.5. BANKRUPTCY OR INSOLVENCY. A proceeding shall have been instituted in
a court having jurisdiction over the Borrower seeking a decree or
order for relief in respect of Borrower in an involuntary case under
any applicable bankruptcy, insolvency reorganization or other
similar law and such involuntary case shall remain undismissed or
unstayed and in effect for a period of sixty (60) consecutive days,
or Borrower shall commence a voluntary case under any such law or
consent to the appointment of a receiver, liquidator, assignee,
custodian, trustee, sequestrator, conservator (or other similar
official).
7.6. OTHER DEFAULT. The occurrence of an Event of Default as defined in
the Notes or any of the Security Documents.
Upon the occurrence of an Event of Default, the Bank will have all rights and
remedies specified in the Notes and the Security Documents and all rights and
remedies (which are cumulative and not exclusive) available under applicable law
or in equity.
8. CONDITIONS. The Bank's obligation to make any Advance under the Facility is
subject to the conditions that as of the date of the Advance:
8.1. FUNDING OF INITIAL ADVANCE UNDER THE REVOLVING CREDIT. On the
Closing Date:
(a) No Event of Default. No Event of Default or event which with the
passage of time, provision of notice or both would constitute an
Event of Default shall have occurred and be continuing.
(b) Authorization Documents. The Borrower shall have furnished to
the Bank certified copies of resolutions of the board of directors
authorizing the execution of this Agreement, the Notes or any of the
Security Documents, or other proof of authorization reasonably
satisfactory to the Bank.
(c) Receipt of Loan Documents. The Borrower shall have executed and
delivered to the Bank the Loan Documents and such other instruments
and documents which the Bank may reasonably request in connection
with the transactions provided for in this Agreement.
12
(d) Representations and Warranties. The representations and
warranties of the Borrower to the Bank shall be true and correct in
all respects.
(e) Opening Balance Sheet. The Borrower shall furnish the Bank with
its Opening Balance Sheet. "OPENING BALANCE SHEET" means the balance
sheet of the Borrower dated March 31, 1999.
(f) Opinion of Counsel. Counsel for the Borrower shall have
delivered to the Bank, a written opinion, dated the Closing Date and
in form and substance reasonably satisfactory to the Bank and its
counsel.
8.2. ADDITIONAL ADVANCES. At the time of making any additional Advances
under the Revolving Credit or the Equipment Line and after giving
effect to any such proposed extensions of credit: the
representations and warranties of the Borrower contained in the Loan
Documents shall be true on and as of the date of such funding or
Advance with the same effect as though such representations and
warranties had been made on and as of such date (except
representations and warranties which expressly relate solely to an
earlier date or time, which representations and warranties shall be
true and correct on and as of the specific dates or times referred
to therein) and the Borrower shall have performed and complied with
all covenants and conditions hereof; no Event of Default or any
event specified in Section 7, which, with the giving of notice,
lapse of time or both, would become an Event of Default, shall have
occurred and be continuing or shall exist; the advancement of funds
under the Facility shall not materially contravene any law
applicable to the Borrower or the Bank, as applicable; and the
Borrower shall have delivered to the Bank a duly executed and
completed Advance Request.
9. EXPENSES. The Borrower agrees to pay the Bank, upon the closing of this
Agreement, and otherwise on demand, all reasonable costs and expenses
incurred by the Bank in connection with the (i) preparation, negotiation
and delivery of this Agreement and the other Loan Documents, and any
modifications thereto, including reasonable fees and expenses of counsel,
expenses for auditors, lien searches, recording and filing fees and taxes,
and (ii) collection of the Loan or instituting, maintaining, preserving,
enforcing and foreclosing the security interest in any of the collateral
securing the Facility, whether through judicial proceedings or otherwise,
or in defending or prosecuting any actions or proceedings arising out of or
relating to this Agreement.
10. INCREASED COSTS. Within thirty (30) days following written demand, together
with the written evidence of the justification therefor, the Borrower
agrees to pay the Bank, all direct costs incurred and any losses suffered
or payments made by the Bank as a consequence of making any Advance under
the Facility by reason of any change in law or regulation or its
interpretation imposing any reserve, deposit, allocation of capital or
similar requirement (including without limitation, Regulation D of the
Board of Governors of the Federal Reserve System) on the Bank, its holding
company or any of their respective assets.
13
11. MISCELLANEOUS.
11.1. NOTICES. All notices, demands, requests, consents, approvals and
other communications required or permitted hereunder must be in
writing and will be effective upon receipt if delivered personally
to such party, or if sent by facsimile transmission with
confirmation of delivery, or by nationally recognized overnight
courier service, to the address set forth below or to such other
address as any party may give to the other in writing for such
purpose:
To the Bank: To the Borrower:
PNC Bank, National Association InforMax, Inc.
0000 Xxx Xxxxxx, X.X. 0000 Xxxxxxxxx Xxxxxxxxx
Xxxxx 000 X. Xxxxxxxx, XX 00000
Xxxxxxxxxx, XX 00000 Attention: Xxxxxx Xxxxxx
Attention: Xxxxxxxxx X. Xxxxxxx Facsimile No.: 000-000-0000
Facsimile No.: 000-000-0000
11.2. PRESERVATION OF RIGHTS. No delay or omission on the part of the Bank
to exercise any right or power arising hereunder will impair any
such right or power or be considered a waiver of any such right or
power or any acquiescence therein, nor will the action or inaction
of the Bank impair any right or power arising hereunder. The Bank's
rights and remedies hereunder are cumulative and not exclusive of
any other rights or remedies which the Bank may have under other
agreements, at law or in equity.
11.3. ILLEGALITY. In case any one or more of the provisions contained in
this Agreement should be invalid, illegal or unenforceable in any
respect, the validity, legality and enforceability of the remaining
provisions contained herein shall not in any way be affected or
impaired thereby.
11.4. CHANGES IN WRITING. No modification, amendment or waiver of any
provision of this Agreement nor consent to any departure by the
Borrower therefrom, will in any event be effective unless the same
is in writing and signed by the Bank, and then such waiver or
consent shall be effective only in the specific instance and for the
purpose for which given. No notice to or demand on the Borrower in
any case will entitle the Borrower to any other or further notice or
demand in the same, similar or other circumstance.
11.5. ENTIRE AGREEMENT. This Agreement (including the documents and
instruments referred to herein) constitutes the entire agreement and
supersedes all other prior
14
agreements and understandings, both written and oral, between the
parties with respect to the subject matter hereof.
11.6. COUNTERPARTS. This Agreement may be signed in any number of
counterpart copies and by the parties hereto on separate
counterparts, but all such copies shall constitute one and the same
instrument.
11.7. SUCCESSORS AND ASSIGNS. This Agreement will be binding upon and
inure to the benefit of the Borrower and the Bank and their
respective, successors and assigns; provided, however, that the
Borrower may not assign this Agreement in whole or in part without
the prior written consent of the Bank and the Bank at any time may
assign this Agreement in whole or in part, upon prior written notice
to Borrower.
11.8. INTERPRETATION. In this Agreement, unless the Bank and the Borrower
otherwise agree in writing, the singular includes the plural and the
plural the singular; words importing any gender include the other
genders; references to statutes are to be construed as including all
statutory provisions consolidating, amending or replacing the
statute referred to; the word "or" shall be deemed to include
"and/or", the words "including", "includes" and "include" shall be
deemed to be followed by the words "without limitation"; references
to articles, sections (or subdivisions of sections) or exhibits are
to those of this Agreement unless otherwise indicated; and
references to agreements and other contractual instruments shall be
deemed to include all subsequent amendments and other modifications
to such instruments, but only to the extent such amendments and
other modifications are not prohibited by the terms of this
Agreement. Section headings in this Agreement are included for
convenience of reference only and shall not constitute a part of
this Agreement for any other purpose. Unless otherwise specified in
this Agreement, all accounting terms shall be interpreted and all
accounting determinations shall be made in accordance with GAAP.
11.9. INDEMNITY. The Borrower agrees to indemnify each of the Bank, its
directors, officers and employees and each legal entity, if any,
which controls the Bank (the "INDEMNIFIED PARTIES") and to hold each
Indemnified Party harmless from and against any and all claims,
damages, losses, liabilities and expenses (including, without
limitation, reasonable fees of counsel with whom any Indemnified
Party may consult and all reasonable expenses of litigation or
preparation therefor) which any Indemnified Party may incur or which
may be asserted against any Indemnified Party in connection with or
arising out of the matters referred to in this Agreement or in the
other Loan Documents by any third person, entity or governmental
authority (including any person or entity claiming derivatively on
behalf of the Borrower), whether (a) arising from or incurred in
connection with any breach of a representation, warranty or covenant
by the Borrower, or (b) arising out of or resulting from any suit,
action, claim, proceeding or governmental investigation, pending or
threatened, whether based on statute, regulation or order, or tort,
or contract or otherwise, before any court or
15
governmental authority, which arises out of or relates to this
Agreement, any other Loan Document, or the use of the proceeds of
the Facility. The indemnity agreement contained in this Section
shall survive the termination of this Agreement, payment of any
Advance and assignment of any rights hereunder. The Borrower may
participate at its expense in the defense of any such action or
claim.
11.10. ASSIGNMENTS AND PARTICIPATION. At any time, upon prior written
notice to the Borrower, the Bank may sell, assign, transfer,
negotiate, grant participation in, or otherwise dispose of all or
any part of the Bank's interest in the Loan. Upon prior written
notice to the Borrower, the Bank may provide any information
concerning the Borrower, including information pertaining to the
Borrower's financial condition, business operations or general
creditworthiness, to any person or entity which may succeed to or
participate in all or any part of the Bank's interest in the
Facility, provided that such person or entity agrees to maintain the
confidentiality of such information.
11.11. GOVERNING LAW AND JURISDICTION. This Agreement has been delivered to
and accepted by the Bank and will be deemed to be made in the
Commonwealth of Pennsylvania. THIS AGREEMENT WILL BE INTERPRETED AND
THE RIGHTS AND LIABILITIES OF THE PARTIES HERETO DETERMINED IN
ACCORDANCE WITH THE LAWS OF THE COMMONWEALTH OF PENNSYLVANIA,
EXCLUDING ITS CONFLICT OF LAWS RULES. The Borrower hereby
irrevocably consents to the exclusive jurisdiction of any state or
federal court seated in Allegheny County, Pennsylvania, and consents
that all service of process be sent by nationally recognized
overnight courier service directed to the Borrower at the Borrower's
address set forth herein and service so made will be deemed to be
completed on the business day after deposit with such courier;
provided that nothing contained in this Agreement will prevent the
Bank from bringing any action, enforcing any award or judgment or
exercising any rights against the Borrower individually, against any
security or against any property of the Borrower within any other
county, state or other foreign or domestic jurisdiction. The Bank
and the Borrower agree that the venue provided above is the most
convenient forum for both the Bank and the Borrower. The Borrower
waives any objection to venue and any objection based on a more
convenient forum in any action instituted under this Agreement.
11.12. WAIVER OF JURY TRIAL. EACH OF THE BORROWER AND THE BANK IRREVOCABLY
WAIVES ANY AND ALL RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY
ACTION, PROCEEDING OR CLAIM OF ANY NATURE RELATING TO THIS
AGREEMENT, ANY DOCUMENTS EXECUTED IN CONNECTION WITH THIS AGREEMENT
OR ANY TRANSACTION CONTEMPLATED IN ANY OF SUCH DOCUMENTS. THE
BORROWER AND THE BANK ACKNOWLEDGE THAT THE FOREGOING WAIVER IS
KNOWING AND VOLUNTARY.
16
The Borrower acknowledges that it has read and understood all the provisions of
this Agreement, including the waiver of jury trial, and has been advised by
counsel as necessary or appropriate.
WITNESS the due execution of this Loan Agreement as a document under
seal, as of the date first written above.
ATTEST: INFORMAX, INC.
By: /s/ Xxxxxx X. Xxxxxx By: /s/ Xxxx Xxxxxxxxx (SEAL)
------------------------------ -----------------------------
Print Name: Xxxxxx X. Xxxxxx Print Name: Xxxx Xxxxxxxxx
------------------- ---------------------
Title: CFO Title: Chief Executive Officer
------------------------
PNC BANK, NATIONAL
ASSOCIATION
By: /s/ Xxxxxxxxx Xxxxxxx (SEAL)
-----------------------------
Print Name: Xxxxxxxxx Xxxxxxx
---------------------
Title: Vice President
--------------------------
17
ADDENDUM to that certain Loan Agreement dated May ___, 1999 between InforMax,
Inc., as the Borrower, and PNC BANK, NATIONAL ASSOCIATION , as the Bank.
Capitalized terms used in this Addendum and not otherwise defined shall have the
meanings given them in such Loan Agreement.
I. FINANCIAL COVENANTS
1. The Borrower will not permit its Modified Tangible Net Worth to be less
than the following amounts by the end of the fiscal quarters specified
below:
Quarter Ending Tangible Net Worth
-------------- ------------------
June 30, 1999 $ 424,000
September 30, 1999 $ 503,000
December 31, 1999 $ 622,000
March 31, 2000 $ 889,000
June 30, 2000 $ 957,000
September 30, 2000 $1,338,000
December 31, 2000 $2,144,000
March 31, 2001 $2,845,000
June 30, 2001 $3,602,000
September 30, 2001 $4,798,000
December 31, 2001 $5,999,000
2. The Borrower shall have a minimum ratio of Current Assets to Current
Liabilities as follows (measured each month at month end).
Ratio of Current Assets
Period to Current Liabilities
------ ----------------------
Closing through November 30, 1999 1.10 to 1.00
December 1, 1999 through April 30, 2000 1.15 to 1.00
3. The Borrower shall maintain a minimum Cash Balance during each of the
periods specified below (measured each month at month end).
Quarter Ending Cash Balance
-------------- ------------
June 30, 1999 $ 108,000
September 30, 1999 $ 129,000
December 31, 1999 $ 139,000
March 31, 2000 $ 172,000
June 30, 2000 $ 155,000
September 30, 2000 $ 211,000
December 31, 2000 $ 614,000
March 31, 2001 $1,052,000
June 30, 2001 $1,513,000
September 30, 2001 $2,219,000
December 31, 2001 $2,997,000
A-1
DEFINITIONS:
------------
"CASH BALANCE" means the sum of cash and marketable securities.
"CURRENT ASSETS" means the sum of cash, accounts receivable and marketable
securities.
"CURRENT LIABILITIES" means the sum of (a) all current liabilities other
than deferred revenue plus (b) amounts outstanding under the Revolving
Credit not classified as current liabilities.
"MODIFIED TANGIBLE NET WORTH" means Tangible Net Worth plus 75% of deferred
revenues (calculated in accordance with GAAP).
"TANGIBLE NET WORTH" means shareholders' equity less intangible assets
(calculated in accordance with generally accepted accounting principles),
plus all equity or subordinated and/or convertible debt investments created
after the date of this Agreement.
A-2
II. DISCLOSURES
---------------
4.6 TITLE TO ASSETS.
----------------
See Attached Disclosure
4.7 AND 4.10 LITIGATION AND PROCEEDINGS.
---------------------------
See Attached Disclosure
6.1 INDEBTEDNESS
------------
None
A-3
EXECUTION COPY
AMENDMENT NO. 1
TO
LOAN AGREEMENT
THIS AMENDMENT NO. 1 TO LOAN AGREEMENT (this "AMENDMENT"), is entered into
as of August 6, 1999, between INFORMAX, INC., a Delaware corporation (the
"BORROWER"), and PNC BANK, NATIONAL ASSOCIATION (the "BANK").
WITNESSETH:
WHEREAS, the Borrower and the Bank entered into a Loan Agreement dated as
of May 6, 1999 (the "LOAN AGREEMENT") wherein the Bank agreed to extend certain
credit facilities to the Borrower, including a $200,000 Equipment Line of Credit
(the "EQUIPMENT LINE"), subject to the terms and conditions of the Agreement;
and
WHEREAS, the Borrower has requested that the Bank amend the Loan Agreement
to increase the maximum availability under the Equipment Line to $600,000 and to
extend the amortization period for each of the First Term Loan and Second Term
Loan (as each is defined in the Agreement) from twenty four to thirty months.
NOW, THEREFORE, in consideration of the premises herein and other good and
valuable consideration, the Borrower and the Bank, with the intent to be legally
bound hereby, agree as follows:
1. DEFINED TERMS. Capitalized terms used in this Amendment shall have the
meanings provided in the Loan Agreement unless a different definition is
provided herein.
2. EQUIPMENT LINE AVAILABILITY. The maximum availability under the
Equipment Line is hereby increased to $600,000. All Advances under the Equipment
Line shall continue to be limited to 80% of the face amount of equipment
invoices (excluding taxes, shipping and installation) submitted with any Advance
Request.
3. EXTENSION OF EQUIPMENT LINE TERM. Each of the First Term Loan and the
Second Term Loan shall provide for repayment of principal and interest in thirty
(30) equal monthly installments.
4. AMENDED AND RESTATED LINE OF CREDIT NOTE. Simultaneously with the
execution and delivery of this Amendment, the Borrower shall execute and deliver
to the Bank an Amended and Restated Line of Credit Note (the "AMENDED NOTE").
Upon receipt of the
Amended Note, the Bank shall return to the Borrower the Line of Credit Note
dated May 6, 1999.
5. SECURITY/COLLATERAL. All obligations of the Borrowers, or any one of
them, to the Bank under the Equipment Line, as amended, and the Amended Note
shall constitute Obligations as defined in the Loan Agreement and in the
Security Agreement dated as of May 6, 1999 by and between Borrower and the Bank,
and shall be entitled to the benefits of and be secured by the Security
Documents.
6. FACILITY FEE. The Borrower shall pay to the Bank a facility fee of
$3,000 (.75% of the increased amount of the Equipment Line), payable upon
execution of this Amendment.
7. REPRESENTATIONS AND WARRANTIES. The Borrower hereby represents and
warrants to the Bank as follows:
(a) all representations, warranties and covenants made by the Borrower
to the Bank that are contained in the Loan Agreement, as modified hereby, the
Amended Note, and each of the other Loan Documents are true and correct on and
as of the date hereof with the same effect as though such representations,
warranties and covenants had been made on and as of the date hereof (except
representations and warranties which expressly relate solely to an earlier date
or time, which representations and warranties shall be true and correct on and
as of the specific dates or times referred to therein);
(b) to the Borrower's knowledge, no event or condition has occurred or
exists which, with the giving of notice or the passage of time, or both, would
constitute an Event of Default under any of the Loan Documents;
(c) the Borrower has delivered copies of its most recently amended
Certificate of Incorporation and Bylaws to the Bank together with this Amendment
No. 1, and such amended Certificate and Bylaws have not been amended, revised,
supplemented, restated or changed in any way since their respective dates of
adoption and are still in full force and effect; and
(d) the execution and delivery of this Amendment No. 1 and the
consummation of the transactions contemplated hereby and by the Note and any
other documents executed by the Borrower required to be delivered to the Bank in
connection with this Amendment No. 1 have been duly and validly authorized by
the Borrower and all such documents together constitute the legal, valid and
binding agreement of the Borrower, enforceable against the Borrower in
accordance with their respective terms.
8. REIMBURSEMENT OF EXPENSES. The Borrower shall reimburse the Bank, upon
the execution of this Amendment, and otherwise on demand, all reasonable and
necessary costs and expenses incurred by the Bank in connection with the
preparation, negotiation and delivery of this Amendment No. 1 and the Amended
Note and any modifications thereto. The obligations of
2
the Borrower to pay expenses hereunder are in addition to, and not in lieu of,
any similar obligations set forth in the Loan Agreement.
9. COUNTERPARTS. This Amendment No. 1 may be executed in one or more
counterparts by any party hereto in separate counterparts, each of which when so
executed and delivered to the other party shall be deemed an original. All such
counterparts together shall constitute one and the same instrument.
10. WAIVERS. This Amendment No. 1 shall not, except as expressly set forth
above, serve to waive, supplement or amend the Loan Agreement, which Loan
Agreement shall remain in full force and effect as amended hereby.
[Signature Page to Follow]
3
WITNESS the due execution of this Amendment No. 1 to Loan Agreement as a
document under seal, as of the date first written above.
ATTEST: INFORMAX, INC.
By: /s/ Xxxxxxxx Xxxxxx By: /s/ Xxxxxx X. Xxxxxx
_________________________ _________________________ (SEAL)
Print Name: Xxxxxxxx Xxxxxx Print Name: Xxxxxx X. Xxxxxx
________________ _________________
Title: Controller Title: Chief Financial Officer
______________________ __________________________
PNC BANK,
NATIONAL ASSOCIATION
By: /s/ Xxxxxxxxx Xxxxxxx
_________________________ (SEAL)
Print Name: Xxxxxxxxx Xxxxxxx
_________________
Title: Vice President
________________________
4
EXECUTION COPY
AMENDMENT NO. 2
TO
LOAN AGREEMENT
THIS AMENDMENT NO. 2 TO LOAN AGREEMENT ("AMENDMENT NO. 2"), is entered into
as of November 30, 1999 (the "AMENDMENT DATE"), between INFORMAX, INC., a
Delaware corporation (the "BORROWER"), and PNC BANK, NATIONAL ASSOCIATION (the
"BANK").
WITNESSETH:
WHEREAS, the Borrower and the Bank entered into a Loan Agreement dated as
of May 6, 1999 (the "ORIGINAL LOAN AGREEMENT") wherein the Bank agreed to extend
certain credit facilities to the Borrower, including an $800,000 Secured
Revolving Credit (the "REVOLVING CREDIT") and a $200,000 Equipment Line of
Credit (the "EQUIPMENT LINE"), subject to the terms and conditions of the
Original Loan Agreement; and
WHEREAS, the Borrower and the Bank entered into an Amendment No. 1 to Loan
Agreement, dated as of August 6, 1999 ("AMENDMENT NO. 1"), pursuant to which the
parties agreed to increase the Equipment Line to $600,000 and extend the
amortization term for each of the First Term Loan and Second Term Loan (the
Original Loan Agreement as amended by Amendment No. 1, is referred to herein as
the "LOAN AGREEMENT"); and
WHEREAS, the Borrower has requested that the Bank further amend the Loan
Agreement to (i) increase the maximum availability under each of the Revolving
Credit and the Equipment Line to $1,000,000, (ii) adjust the interest rates
applicable to each of the Revolving Credit and the Equipment Line and (iii)
modify certain covenants of the Borrower as described in this Second Amendment.
NOW, THEREFORE, in consideration of the premises herein and other good and
valuable consideration, the Borrower and the Bank, with the intent to be legally
bound hereby, agree as follows:
1. DEFINED TERMS. Capitalized terms used in this Amendment No. 2 shall have
the meanings provided in the Loan Agreement unless a different definition is
provided herein.
2. AVAILABILITY.
(a) The maximum availability under the Revolving Credit is hereby
increased to $1,000,000 as of the Amendment Date. All Advances under the
Revolving Credit shall continue to be subject to the limitations of the
Borrowing Base Rider attached to the Loan Agreement as
Exhibit A.
(b) Equipment Line. The maximum availability under the Equipment Line
is hereby increased to $1,000,000 as of the Amendment Date. All Advances under
the Equipment Line shall be limited to 100% of the face amount of equipment
invoices (excluding taxes, shipping and installation) submitted with any Advance
Request.
3. ADJUSTMENT OF INTEREST RATES. Effective as of the Amendment Date,
interest shall accrue at a rate of
(a) Prime plus 1.00% per annum on all amounts outstanding under the
Revolving Credit; and
(b) Prime plus 1.25% per annum on all amounts outstanding under the
Equipment Line.
The foregoing interest rates shall apply to all amounts outstanding under the
Revolving Credit and Equipment Line as of the Amendment Date, respectively,
without regard to whether Advances under such Revolving Credit or Equipment Line
were made before or after the Amendment Date.
4. MODIFICATION OF CERTAIN COVENANTS.
(a) Monthly Reporting Requirements. Section 5.2(a) of the Loan
Agreement is hereby amended to provide that the Borrower shall satisfy each of
the reporting obligations under Section 5.2(a) within thirty (30) days after the
end of each month.
(b) Financial Covenants. Section I of the Addendum to the Loan
Agreement is hereby amended and restated in its entirety as follows:
I. FINANCIAL COVENANTS
1. The Borrower will not permit its Modified Tangible Net Worth to be less
than the following amounts by the end of the fiscal quarters specified
below:
Quarter Ending Tangible Net Worth
-------------- ------------------
June 30, 1999 $ 424,000
September 30, 1999 $ 503,000
December 31, 1999 $2,794,000
March 31, 2000 $3,174,000
June 30, 2000 $3,097,000
September 30, 2000 $2,846,000
Beginning with the quarter ending December 31, 2000, the Borrower shall not
experience two consecutive quarters of Negative Net Operating Income.
2
2. The Borrower shall have a minimum ratio of Current Assets to Current
Liabilities as follows (measured each month at month end).
Ratio of Current Assets
Period to Current Liabilities
------ --------------------------
Closing through November 30, 1999 1.10 to 1.00
December 1, 1999 through April 30, 2000 1.15 to 1.00
3. The Borrower shall maintain a minimum Cash Balance during each of the
periods specified below (measured each month at month end).
Quarter Ending Cash Balance
-------------- ------------
June 30, 1999 $ 108,000
September 30, 1999 $ 129,000
December 31, 1999 $ 750,000
March 31, 2000 $ 750,000
June 30, 2000 $ 750,000
September 30, 2000 $ 750,000
December 31, 2000 $ 750,000
March 31, 2001 $1,052,000
June 30, 2001 $1,513,000
September 30, 2001 $2,219,000
December 31, 2001 $2,997,000
DEFINITIONS:
"CASH BALANCE" means the sum of cash and marketable securities.
"CURRENT ASSETS" means the sum of cash, accounts receivable and marketable
securities.
"CURRENT LIABILITIES" means the sum of (a) all current liabilities other
than deferred revenue plus (b) amounts outstanding under the Revolving
Credit not classified as current liabilities.
"MODIFIED TANGIBLE NET WORTH" means Tangible Net Worth plus 75% of deferred
revenues (calculated in accordance with GAAP).
"NEGATIVE NET OPERATING INCOME" means earnings before interest, taxes,
depreciation and amortization less than zero calculated in accordance with
generally accepted accounting principles.
3
"TANGIBLE NET WORTH" means shareholders' equity less intangible assets
(calculated in accordance with generally accepted accounting principles),
plus all equity or subordinated and/or convertible debt investments created
after the date of this Agreement.
5. AMENDED NOTES. Simultaneously with the execution and delivery of this
Amendment No. 2, the Borrower shall execute and deliver to the Bank an Amended
and Restated Line of Credit Note and a Second Amended and Restated Equipment
Line Note (the "AMENDED NOTES").
6. SECURITY/COLLATERAL. All obligations of the Borrowers, or any one of
them, to the Bank under the Revolving Credit and the Equipment Line, as amended,
and the Amended Notes shall constitute Obligations as defined in the Loan
Agreement and in the Security Agreement dated as of May 6, 1999 by and between
Borrower and the Bank, and shall be entitled to the benefits of and be secured
by the Security Documents.
7. FACILITY FEE. The Borrower shall pay to the Bank (a) a facility fee of
$4,500 (.75% of the increased amount of the Facility), and (b) an amendment fee
of $2,500 (.125% of the aggregate amount of the Facility, each such fee payable
upon execution of this Amendment No. 2.
8. REPRESENTATIONS AND WARRANTIES. The Borrower hereby represents and
warrants to the Bank as follows:
(a) all representations, warranties and covenants made by the Borrower
to the Bank that are contained in the Loan Agreement, as modified hereby, the
Amended Notes, and each of the other Loan Documents are true and correct on and
as of the date hereof with the same effect as though such representations,
warranties and covenants had been made on and as of the date hereof (except
representations and warranties which expressly relate solely to an earlier date
or time, which representations and warranties shall be true and correct on and
as of the specific dates or times referred to therein);
(b) to the Borrower's knowledge, no event or condition has occurred or
exists which, with the giving of notice or the passage of time, or both, would
constitute an Event of Default under any of the Loan Documents;
(c) the Borrower has delivered copies of its most recently amended
Certificate of Incorporation and Bylaws to the Bank together with this Amendment
No. 2, and such amended Certificate and Bylaws have not been amended, revised,
supplemented, restated or changed in any way since their respective dates of
adoption and are still in full force and effect; and
4
(d) the execution and delivery of this Amendment No. 2 and the
consummation of the transactions contemplated hereby and by the Amended Notes
and any other documents executed by the Borrower required to be delivered to the
Bank in connection with this Amendment No. 2 have been duly and validly
authorized by the Borrower and all such documents together constitute the legal,
valid and binding agreement of the Borrower, enforceable against the Borrower in
accordance with their respective terms.
9. REIMBURSEMENT OF EXPENSES. The Borrower shall reimburse the Bank, upon
the execution of this Amendment, and otherwise on demand, all reasonable and
necessary costs and expenses incurred by the Bank in connection with the
preparation, negotiation and delivery of this Amendment No. 2 and the Amended
Notes and any modifications thereto. The obligations of the Borrower to pay
expenses hereunder are in addition to, and not in lieu of, any similar
obligations set forth in the Loan Agreement.
10. NOTICES. The addresses for notices provided in Section 11.1 of the Loan
Agreement are hereby amended and restated as follows:
To the Bank: To the Borrower:
PNC Bank, National Association InforMax, Inc.
Venture Bank @ PNC 0000 Xxxxxxxxx Xxxxxxxxx
00000 Xxxxxxx Xxxxxx Xxxxx X. Xxxxxxxx, XX 00000
Xxxxxx, XX 00000 Attention: Xxxxxx Xxxxxx
Attention: Xxxxxxxxx X. Xxxxxxx Facsimile No.: 000-000-0000
Facsimile No.: 000-000-0000
11. COUNTERPARTS. This Amendment No. 2 may be executed in one or more
counterparts by any party hereto in separate counterparts, each of which when so
executed and delivered to the other party shall be deemed an original. All such
counterparts together shall constitute one and the same instrument.
12. WAIVERS. This Amendment No. 2 shall not, except as expressly set forth
above, serve to waive, supplement or amend the Loan Agreement, which Loan
Agreement shall remain in full force and effect as amended hereby.
[Signature Page to Follow]
5
WITNESS the due execution of this Amendment No. 2 to Loan Agreement as a
document under seal, as of the date first written above.
ATTEST: INFORMAX, INC.
By: /s/ Xxxxxx X. Xxxxxx By: /s/ Xxxx Xxxxxxxxx
________________________ _________________________ (SEAL)
Print Name: Xxxxxx X. Xxxxxx Print Name: Xxxx Xxxxxxxxx
________________ _________________
Title: Chief Financial Officer Title: President/CEO
________________________ ______________
PNC BANK,
NATIONAL ASSOCIATION
By: /s/ Xxxxxxxxx Xxxxxxx
_________________________ (SEAL)
Print Name: Xxxxxxxxx Xxxxxxx
_________________
Title: Vice President
__________________________
6
EXECUTION COPY
AMENDMENT NO. 3
TO
LOAN AGREEMENT
THIS AMENDMENT NO. 3 TO LOAN AGREEMENT ("AMENDMENT NO. 3"), is entered into
as of February 7 2000 (the "AMENDMENT DATE"), between INFORMAX, INC., a Delaware
corporation (the "BORROWER"), and PNC BANK, NATIONAL ASSOCIATION (the "BANK").
WITNESSETH:
WHEREAS, the Borrower and the Bank entered into a Loan Agreement dated
as of May 6, 1999 (the "ORIGINAL LOAN AGREEMENT") wherein the Bank agreed to
extend certain credit facilities to the Borrower, including an $800,000 Secured
Revolving Credit (the "REVOLVING CREDIT") and a $200,000 Equipment Line of
Credit (the "EQUIPMENT LINE"), subject to the terms and conditions of the
Original Loan Agreement; and
WHEREAS, the Borrower and the Bank entered into an Amendment No. 1 to Loan
Agreement, dated as of August 6, 1999 ("AMENDMENT NO. 1"), pursuant to which the
parties agreed to increase the Equipment Line to $600,000 and extend the
amortization term for each of the First Term Loan and Second Term Loan; and
WHEREAS, the Borrower and the Bank entered into an Amendment No. 2 to Loan
Agreement, dated as of November 30, 1999 ("AMENDMENT NO. 2"), pursuant to which
the parties agreed to (i) increase the maximum availability under each of the
Revolving Credit and the Equipment Line to $1,000,000, (ii) adjust the interest
rates applicable to each of the Revolving Credit and the Equipment Line and
(iii) modify certain covenants of the Borrower as described in Amendment No. 2
(the Original Loan Agreement as amended by Amendment No. 1 and Amendment No. 2,
is referred to herein as the "LOAN AGREEMENT"); and
WHEREAS, the Borrower has requested that the Bank further amend the Loan
Agreement to (i) increase the maximum availability under each of the Revolving
Credit and the Equipment Line to $3,000,000, (ii) extend the expiration date for
the Revolving Credit, and (iii) modify certain covenants of the Borrower as
described in this Amendment No. 3.
NOW, THEREFORE, in consideration of the premises herein and other good and
valuable consideration, the Borrower and the Bank, with the intent to be legally
bound hereby, agree as follows:
1. DEFINED TERMS. Capitalized terms used in this Amendment No. 3 shall have
the meanings provided in the Loan Agreement unless a different definition is
provided herein.
2. EXPIRATION DATE. The "REVOLVING CREDIT EXPIRATION DATE" shall be the
date three hundred sixty four (364) days after the Amendment Date.
3. AVAILABILITY.
(a) Revolving Credit. The maximum availability under the Revolving
Credit is hereby increased to $3,000,000 as of the Amendment Date. All Advances
under the Revolving Credit shall continue to be subject to the limitations of
the Borrowing Base Rider attached to the Loan Agreement as Exhibit A.
(b) Equipment Line. The maximum availability under the Equipment Line
is hereby increased to $3,000,000 as of the Amendment Date. All Advances under
the Equipment Line shall be limited to 100% of the face amount of equipment
invoices (excluding taxes, shipping and installation) submitted with any Advance
Request.
4. ADJUSTMENT OF INTEREST RATES. Effective as of the Amendment Date,
interest shall accrue at a rate of
(a) Prime plus 1.00% per annum on all amounts outstanding under the
Revolving Credit; and
(b) Prime plus 1.25% per annum on all amounts outstanding under the
Equipment Line.
The foregoing interest rates shall apply to all amounts outstanding under the
Revolving Credit and Equipment Line as of the Amendment Date, respectively,
without regard to whether Advances under such Revolving Credit or Equipment Line
were made before or after the Amendment Date.
5. MODIFICATION OF CERTAIN COVENANTS. Section I of the Addendum to the Loan
Agreement is hereby amended and restated in its entirety as follows:
I. FINANCIAL COVENANTS
1. The Borrower will not permit its Modified Tangible Net Worth to be less
than the following amounts by the end of the fiscal quarters specified
below:
Quarter Ending Tangible Net Worth
-------------- ------------------
March 31, 2000 $2,900,000
June 30, 2000 $2,900,000
September 30, 2000 $2,300,000
December 31, 2000 $3,100,000
Beginning with the quarter ending December 31, 2000, the Borrower shall not
experience two consecutive quarters of Negative Net Operating Income.
2. The Borrower shall at all times during the term of this Agreement have a
minimum ratio of Current Assets to Current Liabilities of 1.50 to 1.00
(measured each month at month end).
3. The Borrower shall at all times during the term of this Agreement maintain
a minimum Cash Balance of $750,000 (measured each month at month end).
4. The Borrower shall at all times during the term of this Agreement maintain
a maximum ratio of Modified Total Liabilities to Modified Tangible Net
Worth of 1.50 to 1.00 (measured each month at month end).
DEFINITIONS:
"CASH BALANCE" means the sum of cash and marketable securities.
"CURRENT ASSETS" means the sum of cash, accounts receivable and marketable
securities.
"CURRENT LIABILITIES" means the sum of (a) all current liabilities other
than deferred revenue plus (b) amounts outstanding under the Revolving
Credit not classified as current liabilities.
"MODIFIED TOTAL LIABILITIES" means all current and long term liabilities,
less deferred revenues.
"MODIFIED TANGIBLE NET WORTH" means Tangible Net Worth plus 75% of deferred
revenues (calculated in accordance with GAAP).
"NEGATIVE NET OPERATING INCOME" means earnings before interest, taxes,
depreciation and amortization less than zero calculated in accordance with
generally accepted accounting principles.
"TANGIBLE NET WORTH" means shareholders' equity less intangible assets
(calculated in accordance with generally accepted accounting principles),
plus all equity or subordinated and/or convertible debt investments created
after the date of this Agreement.
6. AMENDED NOTES. Simultaneously with the execution and delivery of this
Amendment No. 3, the Borrower shall execute and deliver to the Bank a Second
Amended and Restated Line of Credit Note and a Third Amended and Restated
Equipment Line of Credit Note (the "AMENDED NOTES").
7. SECURITY/COLLATERAL. All obligations of the Borrowers, or any one of
them, to the Bank under the Revolving Credit and the Equipment Line, as amended,
and the Amended Notes shall constitute Obligations as defined in the Loan
Agreement and in the Security Agreement dated as of May 6, 1999 by and between
Borrower and the Bank, and shall be entitled to the benefits of and be secured
by the Security Documents.
8. FACILITY FEE. The Borrower shall pay to the Bank (a) a facility fee of
$20,000 (.50% of the increased amount of the Facility), and (b) an amendment fee
of $7,500 (.125% of the aggregate amount of the Facility), each such fee payable
upon execution of this Amendment No. 3.
9. REPRESENTATIONS AND WARRANTIES. The Borrower hereby represents and
warrants to the Bank as follows:
(a) all representations, warranties and covenants made by the Borrower
to the Bank that are contained in the Loan Agreement, as modified hereby, the
Amended Notes, and each of the other Loan Documents are true and correct on and
as of the date hereof with the same effect as though such representations,
warranties and covenants had been made on and as of the date hereof (except
representations and warranties which expressly relate solely to an earlier date
or time, which representations and warranties shall be true and correct on and
as of the specific dates or times referred to therein);
(b) to the Borrower's knowledge, no event or condition has occurred or
exists which, with the giving of notice or the passage of time, or both, would
constitute an Event of Default under any of the Loan Documents;
(c) the Borrower has delivered copies of its most recently amended
Certificate of Incorporation and Bylaws to the Bank together with this Amendment
No. 3, and such amended Certificate and Bylaws have not been amended, revised,
supplemented, restated or changed in any way since their respective dates of
adoption and are still in full force and effect; and
(d) the execution and delivery of this Amendment No. 3 and the
consummation of the transactions contemplated hereby and by the Amended Notes
and any other documents executed by the Borrower required to be delivered to the
Bank in connection with this Amendment No. 3 have been duly and validly
authorized by the Borrower and all such documents together constitute the legal,
valid and binding agreement of the Borrower, enforceable against the Borrower in
accordance with their respective terms.
10. REIMBURSEMENT OF EXPENSES. The Borrower shall reimburse the Bank, upon
the execution of this Amendment, and otherwise on demand, all reasonable and
necessary costs and expenses incurred by the Bank in connection with the
preparation, negotiation and delivery of this Amendment No. 3 and the Amended
Notes and any modifications thereto. The obligations
of the Borrower to pay expenses hereunder are in addition to, and not in lieu
of, any similar obligations set forth in the Loan Agreement.
11. NOTICES. The addresses for notices provided in Section 11.1 of the Loan
Agreement are hereby amended and restated as follows:
To the Bank: To the Borrower:
PNC Bank, National Association InforMax, Inc.
Venture Bank @ PNC 0000 Xxxxxxxxx Xxxxxxxxx
00000 Xxxxxxx Xxxxxx Xxxxx X. Xxxxxxxx, XX 00000
Xxxxxx, XX 00000 Attention: Xxxxxx Xxxxxx
Attention: Xxxxxxxxx X. Xxxxxxx Facsimile No.: 000-000-0000
Facsimile No.: 000-000-0000
12. COUNTERPARTS. This Amendment No. 3 may be executed in one or more
counterparts by any party hereto in separate counterparts, each of which when so
executed and delivered to the other party shall be deemed an original. All such
counterparts together shall constitute one and the same instrument.
13. WAIVERS. This Amendment No. 3 shall not, except as expressly set forth
above, serve to waive, supplement or amend the Loan Agreement, which Loan
Agreement shall remain in full force and effect as amended hereby.
[Signature Page to Follow]
WITNESS the due execution of this Amendment No. 3 to Loan Agreement as a
document under seal, as of the date first written above.
ATTEST: INFORMAX, INC.
By: /s/ Xxxxxx X. Xxxxxx By: /s/ Xxxx Xxxxxxxxx
________________________ _________________________ (SEAL)
Print Name: Xxxxxx X. Xxxxxx Print Name: Xxxx Xxxxxxxxx
________________ _________________
Title: CEO Title: CEO
________________________ ______________
PNC BANK,
NATIONAL ASSOCIATION
By: /s/ Xxxxxxxxx Xxxxxxx
_________________________ (SEAL)
Print Name: Xxxxxxxxx Xxxxxxx
_________________
Title: Vice President
__________________________
K&L DRAFT: 4/13/00
AMENDMENT NO. 4
TO
LOAN AGREEMENT
THIS AMENDMENT NO. 4 TO LOAN AGREEMENT ("AMENDMENT NO. 4"), effective as of
February 29, 2000 (the "AMENDMENT DATE"), between INFORMAX, INC., a Delaware
corporation (the "BORROWER"), and PNC BANK, NATIONAL ASSOCIATION (the "BANK").
WITNESSETH:
WHEREAS, the Borrower and the Bank entered into a Loan Agreement dated as
of May 6, 1999 (the "ORIGINAL LOAN AGREEMENT") wherein the Bank agreed to extend
certain credit facilities to the Borrower, including an $800,000 Secured
Revolving Credit (the "REVOLVING CREDIT") and a $200,000 Equipment Line of
Credit (the "EQUIPMENT LINE"), subject to the terms and conditions of the
Original Loan Agreement; and
WHEREAS, the Borrower and the Bank entered into an Amendment No. 1 to Loan
Agreement, dated as of August 6, 1999 ("AMENDMENT NO. 1"), pursuant to which the
parties agreed to increase the Equipment Line to $600,000 and extend the
amortization term for each of the First Term Loan and Second Term Loan; and
WHEREAS, the Borrower and the Bank entered into an Amendment No. 2 to Loan
Agreement, dated as of November 30, 1999 ("AMENDMENT NO. 2"), pursuant to which
the parties agreed to (i) increase the maximum availability under each of the
Revolving Credit and the Equipment Line to $1,000,000, (ii) adjust the interest
rates applicable to each of the Revolving Credit and the Equipment Line and
(iii) modify certain covenants of the Borrower as described in Amendment No. 2;
and
WHEREAS, the Borrower and the Bank entered into an Amendment No. 3 to Loan
Agreement, dated as of February __, 2000 ("AMENDMENT NO. 3") pursuant to which
the parties agreed to (i) increase the maximum availability under each of the
Revolving Credit and the Equipment Line to $3,000,000, (ii) extend the
expiration date for the Revolving Credit, and (iii) modify certain financial
covenants of the Borrower (the Original Loan Agreement, as amended by Amendment
Xx. 0, Xxxxxxxxx Xx. 0 and Amendment No. 3, is referred to herein as the ("LOAN
AGREEMENT"); and
WHEREAS, the Borrower has requested that the Bank further amend the Loan
Agreement to modify the definition of "Cash Balance" as such term is used in one
or more of the Borrower's financial covenants, set forth in the Addendum to the
Loan Agreement.
NOW, THEREFORE, in consideration of the premises herein and other good
and valuable consideration, the Borrower and the Bank, with the intent to be
legally bound hereby, agree as follows:
1. DEFINED TERMS. Capitalized terms used in this Amendment No. 4 shall have
the meanings provided in the Loan Agreement unless a different definition is
provided herein.
2. MODIFICATION OF CERTAIN COVENANTS. The definition of "Cash Balance" set
forth in the Addendum to the Loan Agreement is hereby amended and restated in
its entirety as follows:
"CASH BALANCE" means the sum of cash and marketable securities plus an
amount equal to the Borrower's excess availability under the Revolving
Credit.
3. REPRESENTATIONS AND WARRANTIES. The Borrower hereby represents and
warrants to the Bank as follows:
(a) all representations, warranties and covenants made by the Borrower
to the Bank that are contained in the Loan Agreement, as modified hereby, and
each of the other Loan Documents are true and correct on and as of the date
hereof with the same effect as though such representations, warranties and
covenants had been made on and as of the date hereof (except representations and
warranties which expressly relate solely to an earlier date or time, which
representations and warranties shall be true and correct on and as of the
specific dates or times referred to therein);
(b) to the Borrower's knowledge, no event or condition has occurred or
exists which, with the giving of notice or the passage of time, or both, would
constitute an Event of Default under any of the Loan Documents;
(c) the copies of the Borrower's Certificate of Incorporation and
Bylaws most recently delivered to the Bank have not been amended, revised,
supplemented, restated or changed in any way since their respective dates of
adoption and are still in full force and effect; and
(d) the execution and delivery of this Amendment No. 4 and the
consummation of the transactions contemplated hereby and by the Amended Notes
and any other documents executed by the Borrower required to be delivered to the
Bank in connection with this Amendment No. 4 have been duly and validly
authorized by the Borrower and all such documents together constitute the legal,
valid and binding agreement of the Borrower, enforceable against the Borrower in
accordance with their respective terms.
4. REIMBURSEMENT OF EXPENSES. The Borrower shall reimburse the Bank, upon
the execution of this Amendment No. 4, and otherwise on demand, all reasonable
and necessary costs and expenses incurred by the Bank in connection with the
preparation, negotiation and delivery of this Amendment No. 4 and any
modifications hereto. The obligations of the
Borrower to pay expenses hereunder are in addition to, and not in lieu of, any
similar obligations set forth in the Loan Agreement.
5. COUNTERPARTS. This Amendment No. 4 may be executed in one or more
counterparts by any party hereto in separate counterparts, each of which when so
executed and delivered to the other party shall be deemed an original. All such
counterparts together shall constitute one and the same instrument.
6. LIMITATION OF WAIVERS. This Amendment No. 4 shall not, except as
expressly set forth above, serve to waive, supplement or amend the Loan
Agreement, which Loan Agreement shall remain in full force and effect as amended
hereby.
[Signature Page to Follow]
WITNESS the due execution of this Amendment No. 4 to Loan Agreement as a
document under seal, as of the date first written above.
ATTEST: INFORMAX, INC.
ATTEST: INFORMAX, INC.
By: /s/ Xxxxxx X. Xxxxx By: /s/ Xxxx Xxxxxxxxx
________________________ _________________________ (SEAL)
Print Name: Xxxxxx X. Xxxxx Print Name: Xxxx Xxxxxxxxx
________________ _________________
Title: Benefits Administrator Title: President/CEO
________________________ ______________
Original documents PNC BANK,
appeared and signed before NATIONAL ASSOCIATION
me this 17th day of
April, 2000 By: /s/ Xxxxxxxxx Xxxxxxx
_________________________ (SEAL)
Print Name: Xxxxxxxxx Xxxxxxx
_________________
Notary Public
State of Maryland
Commission expires:
February 3, 2004 Title: Managing Director
__________________________
AMENDMENT NO. 5
TO
LOAN AGREEMENT
THIS AMENDMENT NO. 5 TO LOAN AGREEMENT (" AMENDMENT NO. 5"), dated as of
June 19, 2000 (the "AMENDMENT DATE"), between INFORMAX, INC., a Delaware
corporation (the "BORROWER"), and PNC BANK, NATIONAL ASSOCIATION (the "BANK").
WITNESSETH:
WHEREAS, the Borrower and the Bank entered into a Loan Agreement dated as
of May 6, 1999 (the "ORIGINAL LOAN AGREEMENT") wherein the Bank agreed to extend
certain credit facilities to the Borrower, including an $800,000 Secured
Revolving Credit (the "REVOLVING CREDIT") and a $200,000 Equipment Line of
Credit (the "EQUIPMENT LINE"), subject to the terms and conditions of the
Original Loan Agreement; and
WHEREAS, the Borrower and the Bank entered into an Amendment No. 1 to Loan
Agreement, dated as of August 6, 1999 ("AMENDMENT NO. 1"), pursuant to which the
parties agreed to increase the Equipment Line to $600,000 and extend the
amortization term for each of the First Term Loan and Second Term Loan; and
WHEREAS, the Borrower and the Bank entered into an Amendment No. 2 to Loan
Agreement, dated as of November 30, 1999 ("AMENDMENT NO. 2"), pursuant to which
the parties agreed to (i) increase the maximum availability under each of the
Revolving Credit and the Equipment Line to $1,000,000, (ii) adjust the interest
rates applicable to each of the Revolving Credit and the Equipment Line and
(iii) modify certain covenants of the Borrower as described in Amendment No. 2;
and
WHEREAS, the Borrower and the Bank entered into an Amendment No. 3 to Loan
Agreement, dated as of February 7, 2000 ("AMENDMENT NO. 3") pursuant to which
the parties agreed to (i) increase the maximum availability under each of the
Revolving Credit and the Equipment Line to $3,000,000, (ii) extend the
expiration date for the Revolving Credit, and (iii) modify certain financial
covenants of the Borrower; and
WHEREAS, the Borrower and the Bank entered into an Amendment No. 4 to Loan
Agreement, effective as of February 29, 2000 ("AMENDMENT NO. 4") pursuant to
which the parties agreed to modify the definition of "Cash Balance" set forth in
the Addendum to the Original Loan Agreement (the Original Loan Agreement, as
amended by Amendment Xx. 0, Xxxxxxxxx Xx. 0, Xxxxxxxxx Xx. 0 and Amendment No. 4
is referred to herein as the "LOAN AGREEMENT"); and
WHEREAS, the Borrower has requested that the Bank further amend the Loan
Agreement to (i) provide a %3,000,000 bridge loan to fund the Borrower's
operating expenses; (ii) modify certain financial covenants of the Borrower.
NOW, THEREFORE, in consideration of the premises herein and other good and
valuable consideration, the Borrower and the Bank, with the intent to be legally
bound hereby, agree as follows:
1. DEFINED TERMS. Capitalized terms used in this Amendment No. 5 shall have
the meanings provided in the Loan Agreement unless a different definition is
provided herein.
2. FACILITY. The term "Facility" is hereby amended to include a $3,000,000
Bridge Loan ("BRIDGE LOAN"). The proceeds of the Bridge Loan shall be used only
for funding operating expenses.
3. BRIDGE LOAN EXPIRATION DATE. All outstanding borrowings under the Bridge
Loan, together with all fees and expenses related thereto and interest accrued
thereon, shall become due and payable in their entirety upon the earlier to
occur of (i) December 19, 2000 and (ii) closing date of an initial public
offering of any capital stock of the Borrower or any other equity event whereby
any holder or holders of the Borrower's capital stock infuse(s) additional
assets, whereby cash or non-cash, to Borrower either as a contribution of
capital, loan or otherwise of at least $3,000,000 (the "BRIDGE LOAN EXPIRATION
DATE").
4. MANDATORY PREPAYMENTS. The Borrower shall made Mandatory Prepayments as
follows:
(i) From Effective Date through Expiration Date. From the effective
date of this Amendment No. 5 through the Bridge Loan Expiration
Date, all contributions to the equity of the Borrower, including
but not limited to funds raised through venture capital rounds,
sales of equity to strategic investors, private placements, or
other sales of equity, will give rise to an obligation to make a
prepayment (a "MANDATORY PREPAYMENT") to the Bank on the same
Business Day in the amount of the equity contribution, net of
reasonable expenses, up to the maximum aggregate amount of the
principal amount of the Bridge Loan outstanding at such date and
accrued interest thereon; provided, however, contributions to the
Borrower's equity in an aggregate amount of up to Four Million
Dollars ($4,000,000) from Emerging Tech Ventures, Cogene Biotech
Ventures and Partech International, or their respective
affiliates, will not cause a Mandatory Prepayment.
(ii) Application of Prepayments. Mandatory Prepayments will be applied
first to accrued interest and then to principal. Amounts prepaid
may not be reborrowed.
-2-
5. INTEREST RATE. The interest rate for the Bridge Loan is the Prime Rate
(as defined in the Loan Agreement) plus 2.50% per annum. Interest shall be
calculated on the basis of a year of 360 days and shall be payable monthly in
arrears.
6. FACILITY FEE. The Borrower shall pay the Bank a facility fee of $7,500,
payable upon the execution of this Amendment No. 5.
7. AVAILABILITY. Subject to the other terms and conditions of this
Amendment No. 5 and provided that the Borrower is in compliance with all the
other terms and conditions of the Loan Agreement, the Borrower may draw up to
$1,500,000 within 10 days of the execution of this Amendment No. 5 and up to
$500,000 (in increments of $250,000) each month for the three months thereafter
up to a maximum aggregate amount of $3,000,000.
8. BRIDGE LOAN NOTE. The obligation of the Borrower to repay the aggregate
unpaid principal amount of the Bridge Loan, together with interest thereon,
shall be evidenced by a promissory note of the Borrower attached hereto as
Exhibit A (the "BRIDGE NOTE" and together with the Revolving Credit Note and the
Term Note, as amended, the "NOTES") payable to the order of the Bank.
9. MODIFICATION OF CERTAIN COVENANTS. Section I of the Addendum to the Loan
Agreement is hereby amended and restated in its entirety as follows:
"I. FINANCIAL COVENANTS
1. The Borrower will not permit its Modified Tangible Net Worth to be less than
the following amounts by the end of the fiscal quarters specified below:
------------------------------------------------
Quarter Ending Modified Tangible Net
-------------- ---------------------
Worth
-----
------------------------------------------------
June 30, 2000 $1,078,000
------------------------------------------------
September 30, 2000 357,000
------------------------------------------------
December 31, 2000 3,006,000
------------------------------------------------
Beginning with the quarter ending December 31, 2000, the Borrower shall not
not experience two consecutive quarters of Negative Net Operating Income.
2. The Borrower shall at all times during the term of this Agreement have a
minimum ratio of Current Assets to Current liabilities of 1.50:1.0 (measured
each month at month end); provided, however, that the Borrower shall not be
required to satisfy this financial covenant until the Bridge Loan Expiration
Date.
3. The Borrower shall at all times during the term of this Agreement maintain a
minimum Cash Balance of $750,000 (measured each month at month end).
-3-
4. The Borrower shall at all times during the term of this Agreement maintain a
maximum ratio of Modified Total Liabilities to Modified Tangible Net Worth of
1.50:1.0 (measured each month at month end); provided, however, that the
Borrower shall not be required to satisfy this financial covenant until the
Bridge Loan Expiration Date.
5. While amounts due under the Bridge Loan are outstanding, Borrower will not
permit its Pre-Tax Loss (calculated in accordance with GAAP) determined on a
cumulative basis, to be more than the following amounts at the times specified
below:
------------------------------------------------
Quarter Ending Maximum Pre-Tax Loss
------------------------------------------------
June 30, 2000 ($1,581,000)
------------------------------------------------
September 30, 2000 (3,158,000)
------------------------------------------------
December 31, 2000 (1,861,000)
------------------------------------------------
March 31, 2001 (490,000)
------------------------------------------------
6. While amounts due under the Bridge Loan are outstanding, Borrower will not
permit its Revenue, determined on a cumulative basis from January 1, 2000 until
December 31, 2000 and on a rolling four-quarter basis thereafter, to be less
than the following amounts at the times specified below:
------------------------------------------------
Quarter Ending Minimum Revenue
------------------------------------------------
June 30, 2000 $6,599,000
------------------------------------------------
September 30, 2000 9,626,000
------------------------------------------------
December 31, 2000 14,951,000
------------------------------------------------
March 31, 2001 18,045,000
------------------------------------------------
DEFINITIONS:
"CASH BALANCE" means the sum of cash and marketable securities plus an
amount equal to the Borrower's excess availability under the Revolving Credit.
"CURRENT ASSETS" means the sum of cash, accounts receivable and marketable
securities.
"CURRENT LIABILITIES" means the sum of (a) all current liabilities other
than deferred revenue plus (b) amounts outstanding under the Revolving Credit
not classified as current liabilities.
"MODIFIED TOTAL LIABILITIES" means all current and long term liabilities,
less deferred revenues.
"MODIFIED TANGIBLE NET WORTH" means Tangible Net Worth plus 75% of deferred
revenues (calculated in accordance with GAAP).
-4-
"NEGATIVE NET OPERATING INCOME" means earnings before interest, taxes,
depreciation and amortization less than zero calculated in accordance with GAAP.
"PRE-TAX LOSS" for any period (cumulative or rolling) means earnings before
calculation and payment of taxes as reported on the balance sheet of the
Borrower on the last day of the reporting period.
"REVENUE" means the sum of cumulative and deferred revenues.
"TANGIBLE NET WORTH" means shareholders' equity less intangible assets
(calculated in accordance with GAAP), plus all equity or subordinated and/or
convertible debt investments created after the date of this Agreement."
10. SECURITY/COLLATERAL. All obligations of the Borrower to the Bank under
the Revolving Credit, Equipment Line, Bridge Loan and the Notes, as amended,
constitute Obligations as defined in the Loan Agreement and in the Security
Agreement dated as of May 6, 1999 by and between Borrower and Bank, entitled to
the benefits of and secured by the Security Documents.
11. WARRANTS. In partial consideration for the Bridge Loan and the
financial accommodations extended to the Borrower under and pursuant to the Loan
Agreement provided herein, the Borrower will, upon the execution of this
Amendment No. 5, grant to Bank warrants to purchase the non-voting common
capital stock of Borrower (the "WARRANTS") (i) in the initial amount of 9,000
shares; and (ii) an additional 6,000 shares if amounts due under the Bridge Loan
are unpaid on September 19, 2000, in accordance with and subject to the terms of
the Warrant Purchase Agreement attached hereto as Exhibit B (the "WARRANT
AGREEMENT") and at an exercise price set forth in the Warrant Agreement (the
Loan Agreement, this Amendment No. 5, the Notes, the Security Documents and the
Warrant Agreement are collectively referred to as the "LOAN DOCUMENTS").
12. REPRESENTATIONS AND WARRANTIES. The Borrower hereby represents and
warrants to the Bank as follows:
(a) all representations, warranties and covenants made by the Borrower
to the Bank that are contained in the Loan Agreement, as modified hereby, and
each of the other Loan Documents are true and correct on and as of the date
hereof with the same effect as though such representations, warranties and
covenants had been made on and as of the date hereof (except representations and
warranties which expressly relate solely to an earlier date or time, which
representations and warranties shall be true and correct on and as of the
specific dates or times referred to therein);
(b) to the Borrower's knowledge, no event or condition has occurred or
exists which, with the giving of notice or the passage of time, or both, would
constitute an Event of Default under any of the Loan Documents;
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(c) the copies of the Borrower's Certificate of Incorporation and
Bylaws most recently delivered to the Bank have not been amended, revised,
supplemented, restated or changed in any way since their respective dates of
adoption and are still in full force and effect; and
(d) the execution and delivery of this Amendment No. 5 and the
consummation of the transactions contemplated hereby and by the Bridge Note and
any other documents executed by the Borrower required to be delivered to the
Bank in connection with this Amendment No. 5 have been duly and validly
authorized by the Borrower and all such documents together constitute the legal,
valid and binding agreement of the Borrower, enforceable against the Borrower in
accordance with their respective terms.
13. CONDITIONS. The Bank's obligation to make any Advance under the Bridge
Loan is subject to the conditions set forth in the Loan Agreement and to the
following conditions as of the date of this Amendment:
(a) Authorized Documents. The Borrower shall have furnished to the Bank
certified copies of resolutions of its board of directors authorizing the
execution of this Amendment, the Bridge Note and the Warrant Agreement;
(b) Legal Opinion. The Borrower shall have furnished to the Bank a
legal opinion in form and substance satisfactory to the Bank; and
(c) Effective Date. The Borrower has executed this Amendment, the
Bridge Loan Note, the Warrant Agreement and any other documentation required by
the Bank on or before June 30, 2000.
14. REIMBURSEMENT OF EXPENSES. The Borrower shall reimburse the Bank, upon
the execution of this Amendment No. 5, and otherwise on demand, all reasonable
and necessary costs and expenses incurred by the Bank in connection with the
preparation, negotiation and delivery of this Amendment No. 5 and any
modifications hereto. The obligations of the Borrower to pay expenses hereunder
are in addition to, and not in lieu of, any similar obligations set forth in the
Loan Agreement.
15. COUNTERPARTS. This Amendment No. 5 may be executed in one or more
counterparts by any party hereto in separate counterparts, each of which when so
executed and delivered to the other party shall be deemed an original. All such
counterparts together shall constitute one and the same instrument.
16. LIMITATION OF AMENDMENT. This Amendment No. 5 shall not, except as
expressly set forth above, serve to supplement or amend the Loan Agreement or
the other Loan Documents, which Loan Agreement and the Loan Documents shall
remain in full force and effect as amended hereby.
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WITNESS the due execution of this Amendment No. 5 to Loan Agreement as a
document under seal, as of the date first written above.
ATTEST: INFORMAX, INC.
By: /s/ Xxxxxx X. Xxxxxx By: /s/ Xxxx Xxxxxxxxx (SEAL)
------------------------ --------------------------
Print Name: Xxxxxx X. Xxxxxx Print Name: Xxxx Xxxxxxxxx
----------------- --------------
Title: CFO Title: CEO/Chair
----------------------- --------------------
PNC BANK,
NATIONAL ASSOCIATION
By: /s/ Xxxxxxxxx Xxxxxxx (SEAL)
--------------------------
Print Name: Xxxxxxxxx Xxxxxxx
------------------
Title: Managing Director
------------------------
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Exhibit A
Bridge Note
Exhibit B
Warrant Purchase Agreement