EXHIBIT 10.1
MODIFICATION AGREEMENT RELATING
TO REIMBURSEMENT AGREEMENTS
Modification Agreement Relating to Reimbursement Agreements (this
"Amendment"), dated effective as of May 1, 2000, between NEOSE TECHNOLOGIES,
INC. (the "Borrower"), a corporation organized and existing under the laws of
the state of Delaware, and XXXXXX UNITED BANK, JEFFERSON BANK DIVISION,
successor to JEFFERSON BANK (the "Bank"), a banking institution organized and
existing under the laws of the Commonwealth of Pennsylvania.
WITNESSETH:
A. The Borrower and the Bank are parties to a certain Reimbursement
Agreement dated as of March 1, 1997 entered into with regard to Xxxxxxxxxx
County Industrial Development Authority's $1,000,000 Variable Rate Demand
Revenue Bonds (Neose Technologies, Inc. Project), Series A of 1997 (the "Series
A Reimbursement Agreement").
B. The Borrower and the Bank are also parties to a certain Reimbursement
Agreement dated as of March 1, 1997 entered into with regard to Xxxxxxxxxx
County Industrial Development Authority's $8,400,000 Federally Taxable Variable
Rate Demand Revenue Bonds (Neose Technologies, Inc. Project), Series B of 1997
(the "Series B Reimbursement Agreement", and together with the Series A
Reimbursement Agreement, the "Reimbursement Agreements").
C. The Borrower has requested that the Reimbursement Agreements be amended
to modify certain financial covenants, and the parties have agreed to modify the
Reimbursement Agreements for those purposes on the terms and conditions
hereinafter provided.
NOW, THEREFORE, in consideration of the foregoing and for other
consideration, the receipt and sufficiency of which is hereby acknowledged, the
parties hereto, intending to be legally bound, hereby agree as follows:
1. Defined Terms. Unless otherwise defined herein, terms defined in the
Reimbursement Agreements are used herein as therein defined.
2. Amendments to Reimbursement Agreements.
(a) The Series A Reimbursement Agreement is hereby amended as
follows:
(i) Section 6.22 is amended and restated as follows:
The Borrower will at all times maintain a "working capital
position", as defined in accordance with GAAP, of an amount equal
to at least two (2) times the amount of the outstanding principal
on the Bonds. Unrestricted Cash, as such phrase is defined in
Section 6.20 of the Series B Reimbursement Agreement, plus
amounts held in the Bank's Pledge Account B, created under the
Series B Reimbursement Agreement, may be included by the Borrower
and its accountants in determining the Borrower's "working
capital position." If the Borrower decides to comply with the
provisions of Section 6.20 (c) of the Series B Reimbursement
Agreement, upon the Borrower's compliance thereof to the
satisfaction of the Bank, this covenant shall no longer be
operative.
(b) The Series B Reimbursement Agreement is hereby amended as
follows:
(i) Section 6.20 (a) is amended and restated as follows:
The Borrower shall maintain all of its investment accounts, up to
a maximum aggregate amount of $50,000,000 with the Custodial
Bank. The Borrower shall maintain in such investment accounts
created with the Custodial Bank a combined total of its
unencumbered cash and liquid short term investments (investments
with a remaining maturity of less than three years)
("Unrestricted Cash") in an amount which shall have a fair market
value equal to at least two (2) times the amount of the
outstanding principal on the Bonds. If the value of the
Unrestricted Cash held by the Custodial Bank, from time to time,
shall fall below a fair market value equal to two (2) times the
amount of the outstanding principal on the Bonds (but not less
than one and one-half (1 1/2) times the amount of the outstanding
principal on the Bonds) the Custodial Bank, shall, in accordance
with the Custodial Bank Agreement, immediately transfer an amount
of the Unrestricted Cash, with a fair market value equal to fifty
percent (50%) of the Letter of Credit Amount at that time, to the
Bank, for deposit into the "Bank's Pledge Account B" which is
hereby created. If the total fair market value of the
Unrestricted Cash, together with the funds held in the Bank's
Pledge Account B shall, from time to time be valued at a fair
market value equal to less than one and one- half (1 1/2 ) times
the amount of the outstanding principal on the Bonds, the
Custodial Bank shall, in accordance with the Custodial Bank
Agreement, immediately transfer an amount of Unrestricted Cash to
the Bank for deposit into the Bank's Pledge Account B, so that
the value of the total amount held in the Bank's Pledge Account B
shall have a fair market value equal to one hundred percent
(100%) of the Letter of Credit Amount at that time.
(ii) Section 6.20(b) is amended and restated as follows:
If, from time to time, after the transfer or transfers of
Unrestricted Cash to the Bank's Pledge Account B described in (a)
above, the Borrower is able to provide additional Unrestricted
Cash to the Custodial Bank in: (i) an amount so that the fair
market value of the Unrestricted Cash held by the Custodial Bank
together with the funds held in the Bank's Pledge Account B shall
have a fair market value equal to at least one and one-half (1
1/2 ) times the amount of the outstanding principal on the Bonds,
but less than two (2) times the amount of the outstanding
principal on the Bonds, the Bank shall transfer an amount of the
funds held in the Bank's Pledge Account B to the Custodial Bank,
in order that the funds remaining in the Bank's Pledge Account B
shall have a fair market value equal to fifty percent (50%) of
the Letter of Credit Amount at that time; or (ii) an amount so
that the fair market value of the Unrestricted Cash held by the
Custodial Bank together with the funds held in the Bank's Pledge
Account B shall have a fair market value equal to at least two
(2) times the amount of the outstanding principal on the Bonds,
the Bank shall transfer the entire amount of funds held in the
Bank's Pledge Account B to the Custodial Bank.
(iii) Section 6.22 is amended and restated as follows:
The Borrower will at all times maintain a "working capital
position", as defined in accordance with GAAP, of an amount at
least equal to two (2) times the amount of the outstanding
principal on the Bonds. Unrestricted Cash plus amounts held in
the Bank's Pledge Account B may be included by the Borrower and
its accountants in determining the Borrower's "working capital
position." If the Borrower decides to comply with the provisions
of Section 6.20(c) hereof, upon the Borrower's compliance thereof
to the satisfaction of the Bank, this covenant shall no longer be
operative.
3. Incorporation of Reimbursement Agreements. The parties acknowledge and
agree that this Amendment is incorporated into and made part of the
Reimbursement Agreements, the terms and provisions of which, unless expressly
modified herein, or unless no longer applicable by their terms, continue
unchanged and remain in full force and effect. To the extent that any term or
provision of this Amendment is or may be deemed expressly inconsistent with any
term or provision in the Reimbursement Agreements, the terms and provisions
hereof shall control.
4. Miscellaneous.
(a) The headings of any paragraphs of this Amendment are for convenience
only and shall not be used to interpret any provision hereof.
(b) No modification hereof or any agreement referred to herein shall be
binding or enforceable unless in writing and signed on behalf of the party
against which enforcement is sought.
(c) In the event that any one or more of the provisions contained in
this Amendment shall be found to 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.
(d) This Amendment shall be binding upon and inure to the benefit of the
Borrower and the Bank and their respective successors and assigns.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed and delivered by their proper and duly authorized officers as of
the day and year first above written.
Borrower:
NEOSE TECHNOLOGIES, INC.
By: /s/ P. Xxxxxxxx Xxxx
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Title: President and COO
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Bank:
XXXXXX UNITED BANK, JEFFERSON BANK DIVISION
By: /s/ Xxxxxxx X. Xxxxxxxx
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Title: Senior Vice President
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