EXHIBIT 10.32.1
LOAN MODIFICATION AGREEMENT
This Loan Modification Agreement is entered into as of September 18, 2003, by
and between Epoch Biosciences, Inc. (the "Borrower") and Silicon Valley Bank
("Bank").
1. DESCRIPTION OF EXISTING OBLIGATIONS: Among other Obligations which may be
owing by Borrower to Bank, Borrower is indebted to Bank pursuant to, among other
documents, a Loan and Security Agreement, dated September 18, 2002, as may be
amended from time to time (the "Loan Agreement"). The Loan Agreement provides
for, among other things, a Committed Equipment Line in the original principal
amount of Two Million Five Hundred Thousand Dollars ($2,500,000) and a Committed
Revolving Line in the original principal amount of Seven Hundred Fifty Thousand
Dollars ($750,000). The Loan Agreement has been modified pursuant to, among
other documents, a Loan Modification Agreement dated June 25, 2003, pursuant to
which, among other things, a Term Loan was incorporated in the original
principal amount of One Hundred Ninety Thousand Dollars ($190,000). Defined
terms used but not otherwise defined herein shall have the same meanings as set
forth in the Loan Agreement.
Hereinafter, all indebtedness owing by Borrower to Bank shall be referred to as
the "Obligations."
2. DESCRIPTION OF COLLATERAL. Repayment of the Obligations is secured by the
Collateral as described in the Loan Agreement.
Hereinafter, the above-described security documents and guaranties, together
with all other documents securing repayment of the Obligations shall be referred
to as the "Security Documents". Hereinafter, the Security Documents, together
with all other documents evidencing or securing the Obligations shall be
referred to as the "Existing Loan Documents".
3. DESCRIPTION OF CHANGE IN TERMS.
A. Modification(s) to Loan Agreement.
1. Section 2.1.7 entitled "Equipment II Advances" is hereby
incorporated to read as follows:
(a) Through June 30, 2004 (the "Equipment II Availability End
Date"), Bank will make advances ("Equipment II Advance" and,
collectively, "Equipment II Advances") not exceeding the
Committed Equipment II Line. The Equipment II Advances may only
be used to finance or refinance Equipment purchased on or after
90 days before the date of each Equipment II Advance and may not
exceed 100% of the equipment invoice excluding taxes, shipping,
warranty charges, freight discounts and installation expense;
provided, however, the initial Equipment II Advance may be used
to finance Equipment purchased on or after July 1, 2003. Soft
Costs may constitute up to 35% of the aggregate Equipment II
Advances. Each Equipment II Advance must be for a minimum of
$150,000 and the initial Equipment II Advance must be drawn no
later than December 31, 2003.
(b) Interest accrues from the date of each Equipment II Advance
at the rate in Section 2.3.4 (a). Each Equipment II Advance shall
immediately amortize and is payable in 36 equal monthly
installments of principal, plus accrued interest, beginning on
the 1st of each month following the respective Equipment II
Advance and ending 36 months thereafter (each, the "Equipment II
Maturity Date"). Equipment II Advances when repaid may not be
reborrowed.
(c) To obtain an Equipment II Advance, Borrower must notify Bank
(the notice is irrevocable) by facsimile no later than 12:00 p.m.
Pacific time 1 Business Day before the day on which the Equipment
II Advance is to be made. The notice in the form of Exhibit B
(Payment/Advance Form) must be signed by a Responsible Officer or
designee and include a copy of the invoice for the Equipment
being financed.
2. Section 2.3.4 entitled "Equipment II Advances" is hereby
incorporated to read as follows:
(a) Interest Rate. Equipment II Advances accrue interest at a per
annum rate equal to (A) the greater of (i) 0.5 of 1 percentage
point above the Prime Rate or (ii) 4.50%, but (B) not more than
8%. After an Event of Default, Obligations accrue interest at 5
percent above the rate effective immediately before the Event of
Default. The interest rate increases or decreases when the Prime
Rate changes. Interest is computed on a 360 day year for the
actual number of days elapsed.
(b) Payments. Bank may debit any of Borrower's deposit accounts
including Account Number 3300375606 for principal and interest
payments owing or any amounts Borrower owes Bank. Bank will
promptly notify Borrower when it debits Borrower's accounts.
These debits are not a set-off. Payments received after 12:00
noon Pacific time are considered received at the opening of
business on the next Business Day. When a payment is due on a day
that is not a Business Day, the payment is due the next Business
Day and additional fees or interest accrue. Borrower may prepay
the whole or any part of any Equipment II Advance without
prepayment charges. All prepayments shall be applied first to
accrued interest on the Equipment II Advances and then to the
outstanding principal balance of the Equipment II Advances in the
inverse order of maturity.
3. The following defined terms under Section 13.1 entitled
"Definitions" are hereby amended and/or incorporated to read as
follows:
"Credit Extension" is each Advance, Equipment Advance, Equipment
II Advance, Term Loan, Letter of Credit, Exchange Contract, or
any other extension of credit by Bank for Borrower's benefit.
"Committed Equipment II Line" is a Credit Extension of up to
$1,000,000.
"Equipment II Advance" is defined in Section 2.1.7.
"Equipment II Availability End Date" is defined in Section 2.1.7.
"Equipment II Maturity Date" is defined in Section 2.1.7.
"Hard Assets" may include computer equipment, office equipment,
lab and test equipment and furnishings.
"Soft Costs" is leasehold improvements, intangible property such
as computer software and software licenses, and soft costs
including without limitation taxes, shipping, warranty charges,
freight discounts and installation expense.
4. CONSISTENT CHANGES. The Existing Loan Documents are hereby amended wherever
necessary to reflect the changes described above.
5. NO DEFENSES OF BORROWER. Borrower agrees that, as of the date hereof, it
has no defenses against paying any of the Obligations.
6. PAYMENT OF LOAN FEE. Borrower shall pay Bank a fee in the amount of Two
Thousand Dollars ($2,000) ("Loan Fee") plus all out-of-pocket expenses.
7. CONTINUING VALIDITY. Borrower understands and agrees that in modifying the
existing Indebtedness, Bank is relying upon Borrower's representations,
warranties, and agreements, as set forth in the Existing Loan Documents,
including, but not limited to, Section 5 of the Loan Agreement and any
exceptions stated on the Schedule to this Loan Modification Agreement. Except as
expressly modified pursuant to this Loan Modification Agreement, the terms of
the Existing Loan Documents remain unchanged and in full force and effect.
Bank's
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agreement to modifications to the existing Obligations pursuant to this Loan
Modification Agreement in no way shall obligate Bank to make any future
modifications to the Obligations. Nothing in this Loan Modification Agreement
shall constitute a satisfaction of the Obligations. It is the intention of Bank
and Borrower to retain as liable parties all makers and endorsers of Existing
Loan Documents, unless the party is expressly released by Bank in writing.
Unless expressly released herein, no maker, endorser, or guarantor will be
released by virtue of this Loan Modification Agreement. The terms of this
paragraph apply not only to this Loan Modification Agreement, but also to all
subsequent loan modification agreements.
8. CONDITIONS. The effectiveness of this Loan Modification Agreement is
conditioned upon payment of the Loan Fee.
This Loan Modification Agreement is executed as of the date first written
above.
BORROWER: BANK:
EPOCH BIOSCIENCES, INC SILICON VALLEY BANK
By:/s/ Xxxx X. Xxxxx By:/s/ Xxxx X. Xxxxxxxx
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Name: Xxxx X. Xxxxx Name: Xxxx X. Xxxxxxxx
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