Exhibit 10.4
CUSTOMER NO. 1208
SECOND AMENDMENT TO
LOAN AND SECURITY AGREEMENT
THIS SECOND AMENDMENT to LOAN AND SECURITY AGREEMENT (the
"Amendment"), dated as of May 12, 2000, by and between Trega Biosciences,
Inc. (the "Borrower"), a Delaware corporation, having its principal place of
business and chief executive office at 0000 Xxxxxx Xxxxx Xxxxx, Xxx Xxxxx,
Xxxxxxxxxx, 00000, and TRANSAMERICA BUSINESS CREDIT CORPORATION (the
"Lender"), a Delaware corporation, having its principal office at Riverway
II, West Office Tower, 0000 Xxxx Xxxxxxx Xxxx, Xxxxxxxx, Xxxxxxxx, 00000.
W I T N E S S E T H :
WHEREAS, the Borrower and the Lender are parties to a Loan and
Security Agreement, dated as of December 23, 1998 and amended as of March 31,
2000 (as amended, the "Loan Agreement"; capitalized terms used herein shall
have the meanings assigned to such terms in the Loan Agreement unless
otherwise defined herein); and
WHEREAS, the parties hereto desire to amend the Loan Agreement in the
manner set forth herein.
NOW, THEREFORE, in consideration of the foregoing and for other good
and valuable consideration, the Borrower and Lender hereby agree as follows:
1. AMENDMENT TO LOAN AGREEMENT. Effective as of the date this
Amendment is fully executed by the Lender and Borrower hereof, and subject to
the satisfaction of the Borrower of conditions as determined by Lender, the
Loan Agreement is hereby amended as follows:
(a) Section 3.1, Borrowings, of the Agreement is hereby deleted in
its entirety and the following is inserted in lieu thereof:
SECTION 3.1. BORROWINGS. Each Loan shall be in an amount not less
than $100,000, and in no event shall the sum of the aggregate Loans made
exceed the amount of the Lender's written commitment to the Borrower in
effect from time to time. Notwithstanding anything herein to the contrary,
the Lender shall be obligated to make the initial Loan and each other Loan
only after the Lender, in its sole discretion, determines that the applicable
conditions for borrowing contained in Sections 3.3 and 3.4 are satisfied.
The timing and financial scope of Lender's obligation to make Loans hereunder
are limited as set forth in a commitment letter executed by Lender and
Borrower, dated as of November 25, 1998, as amended on March 31, 2000 and
April 11, 2000 and attached hereto respectively as EXHIBIT A, EXHIBIT B and
EXHIBIT C (collectively the "Commitment Letter").
2. REPRESENTATIONS AND WARRANTIES OF THE BORROWER. The Borrower
represents and warrants as follows:
(a) Since March 31, 2000, there has occurred no development,
event or change that has had or could reasonably be expected to have a
Material Adverse Effect.
(b) No Default or Event of Default has occurred and is
continuing.
(c) The representations and warranties of such Borrower
contained in Section 4 of the Loan Agreement are true and correct in all
material respects on the date hereof as though made on and as of the date
hereof, except to the extent that such representation and warranties
expressly relate solely to an earlier date (in which case such
representations and warranties were true and correct on and as of such
earlier date).
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(d) This Amendment constitutes the legal, valid and binding
obligation of such Borrower, enforceable against the Borrower in accordance
with its terms, except as enforceability may be limited by bankruptcy,
insolvency and other laws affecting creditors' rights generally and by
general principles of equity.
3. EXPENSES. The Borrower shall pay for all of the reasonable
costs and expenses incurred by the Lender in connection with the transactions
contemplated by the Amendment, including, without limitation, the reasonable
fees and expenses of counsel to the Lender.
4. MISCELLANEOUS.
(a) Except as expressly amended herein, all of the terms and
provisions of the Loan Agreement and the other Loan Documents are ratified
and confirmed in all respects and shall remain in full force and effect.
(b) Upon the effectiveness of this Amendment, all references
in the Loan Documents to the Loan Agreement shall mean the Loan Agreement as
amended by this Amendment and all references in the Loan Agreement to the
"this Agreement", "hereof", "herein", or similar terms, shall mean and refer
to the Loan Agreement as amended by this Amendment.
(c) The execution, delivery and effectiveness of this
Amendment shall not, except as expressly provided herein, operate as an
amendment to or waiver of any right, power or remedy of the Lender under any
of the Loan Documents, or constitute an amendment or waiver of any provision
of any of the Loan Documents.
(d) This Amendment may be executed by the parties hereto
individually or in combination, in one or more counterparts, each of which
shall be an original and all of which shall constitute one and the same
agreement. This Amendment may be executed and delivered by telecopier with
the same force and effect as if the same were a fully executed and delivered
original manual counterpart.
(e) This Amendment shall constitute a Loan Document.
5. GOVERNING LAW. THE VALIDITY, INTERPRETATION AND ENFORCEMENT OF
THIS AMENDMENT SHALL BE GOVERNED BY THE LAWS OF THE STATE OF ILLINOIS WITHOUT
GIVING EFFECT TO THE CONFLICTS OF LAW PRINCIPLES THEREOF.
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
be duly executed and delivered by their respective duly authorized officers
as of the date first above written.
BORROWER
TREGA BIOSCIENCES, INC.
By: _____________________________
Name:
Title:
Hereunto Duly Authorized
LENDER
TRANSAMERICA BUSINESS CREDIT
CORPORATION
By: _____________________________
Name:
Title:
Hereunto Duly Authorized
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Exhibit A
November 25, 1998
Xx. Xxxxxx Xxxxxxx
Acting Chief Financial Officer
Trega Biosciences, Inc.
0000 Xxxxxx Xxxxx Xxxxx
Xxx Xxxxx, Xxxxxxxxxx 00000
Dear Xxxxxx:
Transamerica Business Credit Corporation - Technology Finance Division
("Lender") is pleased to offer financing for the Equipment described in this
letter to Trega Biosciences, Inc. ("Borrower"). This Commitment supersedes all
prior correspondence, proposals, and oral or other communications relating to
financing arrangements between Borrower and Lender.
The outline of this offer is as follows:
LENDER: Transamerica Business Credit Corporation -
Technology Finance Division and/or its
affiliates, successors or assigns.
BORROWER: Trega Biosciences, Inc.
AMOUNT OF LOANS: Not to exceed $2,200,000 in the aggregate,
of which up to $700,000 may be used to
finance tenant improvements and $75,000 may
be for software.
EQUIPMENT: Laboratory and office equipment, computers
and tenant improvements, software and
related soft costs. All Equipment subject to
Lender approval prior to funding.
COLLATERAL: Lender will require a perfected first
priority security interest in all Equipment
financed with the Loans, including but not
limited to all additions, accessions,
improvements, replacements and attachments
thereto and proceeds (including insurance
proceeds) thereof (the "Collateral").
LOCATION OF COLLATERAL: San Diego, California
EXPECTED DRAW-DOWN SCHEDULE: A minimum of $1,000,000 will be drawn on or
before December 31, 1998 and the remaining
availability will be drawn on or before
December 31, 1999.
LOAN TERM: Each Loan Term will commence upon delivery
of the equipment or upon each delivery of
items of equipment having an aggregate cost
of not less than $100,000, and will continue
through 48 months from the first day of the
month next following or coincident with
commencement of that Loan Term.
PAYMENT TERMS: Monthly Payments equal to 2.395% of original
principal amount of each Loan will be
payable monthly in advance. The first
Monthly Payment will be due and payable on
or before commencement of each Loan Term.
ADJUSTMENT TO Lender reserves the right to increase the
PAYMENT TERMS: rate set forth above as of the date each
Loan Term commences proportionally to the
change in the weekly average of the interest
rates of four-year U.S. Treasury Securities
(as published in the WALL STREET JOURNAL)
from the week ending October 23, 1998 to the
week preceding the commencement of that Loan
Term. As of the date each Loan Term
commences, the Monthly Payment will be fixed
for that entire Loan Term. A schedule of the
actual Monthly Payments will be provided by
the Lender following commencement of each
Loan Term.
BALLOON PAYMENT: At the end of each Loan Term, the Borrower
will be obligated to make one final Balloon
Payment equal to 10% of the original
principal amount of each Loan, plus any
other amounts then due and owing to Lender.
INTERIM PAYMENT: An Interim Payment will accrue from the date
each Loan Term commences until the next
following first day of a month (unless the
Loan Term commences on the first day of a
month). The Interim Payment will be
calculated at the daily equivalent of the
currently adjusted Monthly Payment.
INSURANCE: Prior to any delivery of equipment, the
Borrower will furnish confirmation of
insurance acceptable to the Lender covering
the Collateral including primary, all risk,
physical damage, property damage and bodily
injury with appropriate loss payee and
additional insured endorsements in favor of
the Lender.
CONDITIONS PRECEDENT Each Loan will be subject to the following:
TO LENDING: 1. No material adverse change in the
financial condition, operations or
prospects of the Borrower prior to
funding. The Lender reserves the right
to rescind any unused portion of its
commitment in the event of a
material adverse change in financial
condition, operation or prospects of the
Borrower.
2. Completion of the documentation and
final terms of the proposed financing
satisfactory to Lender and Lender's
counsel.
3. Results of all due diligence, including
lien, judgment and tax search and other
matters Lender may request shall be
satisfactory to Lender and Lender's
counsel.
4. Receipt by Lender of duly executed loan
documentation in form and substance
satisfactory to Lender and its counsel.
5. Lender shall receive a valid and
perfected first priority lien and
security interest in the Equipment and
Lender shall have received satisfactory
evidence that there are no liens on the
Equipment except as expressly permitted
herein.
6. Satisfactory review by Lender's
Scientific Advisory Board.
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ADDITIONAL There will be no actual or threatened
COVENANTS: conflict with, or violation of, any
regulatory statute, standard or rule
relating to the Borrower, its present or
future operations, or the Equipment.
Borrower will be required to provide
quarterly financial information. All
information supplied by the Borrower will be
correct and will not omit any statement
necessary to make the information supplied
not be misleading. There will be no material
breach of the representations and warranties
of the Borrower in the Loan.
EXPENSES: All costs and expenses incurred by the Lender
in connection with the underwriting and
closing of the Loans will be paid by the
Borrower whether or not any Loans are
consummated and funds are advanced by the
Lender. Such expenses shall not exceed $3,000
without the consent of the Borrower.
LAW: This letter and the proposed Loan are
intended to be governed by and construed in
accordance with Illinois law without regard
to its conflict of law provisions.
INDEMNITY: Borrower agrees to indemnify and to hold
harmless Lender, and its officers, directors
and employees against all claims, damages,
liabilities and expenses which may be
incurred by or asserted against any such
person in connection with or arising out of
this letter and the transactions contemplated
hereby, other than claims, damages,
liability, and expense resulting from such
person's gross negligence or willful
misconduct.
CONFIDENTIALITY: This letter is delivered to you with the
understanding that neither it nor its
substance shall be disclosed publicly or
privately to any third person except those
who are in a confidential relationship to you
(such as your legal counsel and accountants),
or where the same is required by law and then
only on the basis that it not be further
disclosed, which conditions Borrower and its
agents agree to be bound by upon acceptance
of this letter.
Without limiting the generality of the
foregoing, none of such persons shall use or
refer to Lender or to any affiliate name in
any disclosures made in connection with any
of the transactions without Lender's prior
written consent.
Upon completion of the initial takedown by
Borrower, the Borrower will no longer be
required to obtain Lender's prior written
consent to disclose the transaction
contemplated hereby. In addition, the
Borrower agrees to provide camera ready
artwork of typestyles and logos of the
Borrower for use in promotional material by
the Lender.
CONDITIONS OF ACCEPTANCE: This Commitment Letter is intended to be a
summary of the most important elements of
the agreement to enter into a loan
transaction with Borrower, and it is subject
to all requirements and conditions contained
in Loan documentation proposed by Lender or
its counsel in the course of closing
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the Loans described herein. Not every
provision that imposes duties, obligations,
burdens, or limitations on Borrower is
contained herein, but shall be contained in
the final Loan documentation satisfactory to
Lender and its counsel.
EACH OF THE PARTIES HERETO IRREVOCABLY AND
UNCONDITIONALLY WAIVES ALL RIGHT TO TRIAL BY
JURY IN ANY SUIT, ACTION, PROCEEDING OR
COUNTERCLAIM ARISING OUT OF OR RELATED TO
THIS LETTER OR THE TRANSACTION DESCRIBED IN
THIS LETTER.
APPLICATION FEE: The $11,000 Application Fee previously
paid will be first applied to the reasonable
costs and expenses of the Lender in
connection with the transaction, and any
remainder shall be applied pro rata to the
second month's payment due under each Loan.
COMMITMENT EXPIRATION: This commitment shall expire on December 4,
1998 unless prior thereto either extended in
writing by the Lender or accepted as
provided below by the Borrower.
Should you have any questions, please call me. If you wish to accept this
Commitment, please so indicate by signing and returning the enclosed duplicate
copy of this letter to me by December 4, 1998.
Yours truly,
TRANSAMERICA BUSINESS CREDIT CORP -
TECHNOLOGY FINANCE DIVISION
By
----------------------------------
Xxxxxx X. Xxxxxxx, Xx.
Executive Vice President
Accepted this _____day of December, 1998
TREGA BIOSCIENCES, INC.
By
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Exhibit B
March 31, 2000
Xx. Xxxxxx Xxxxx
Chief Financial Officer
Trega Biosciences, Inc.
0000 Xxxxxx Xxxxx Xxxxx
Xxx Xxxxx, Xxxxxxxxxx 00000
Dear Xxxxxx:
Transamerica Business Credit Corporation - Technology Finance Division
("Lender") is pleased to offer to amend that certain Commitment Letter dated
November 25, 1998 as (the "Commitment") from Lender to Trega Biosciences, Inc.
("Borrower") as provided below.
1. The paragraph entitled "Amount of Loans" is hereby deleted in its entirety
and the following is inserted in lieu thereof:
AMOUNT OF LOANS: Not to exceed $2,800,000 in the aggregate.
2. The paragraph entitled "Expected Draw-Down Schedule" is hereby deleted in its
entirety and the following is inserted in lieu thereof:
EXPECTED DRAW-DOWN SCHEDULE: A minimum of $1,000,000 will be drawn on or
before December 31, 1998, and the remaining
availability will be drawn on or before
March 31, 2000.
Except as modified hereby, the Commitment and all documents in connection with
the Commitment and between Lender and Borrower, are hereby ratified and
confirmed in all respects and shall continue in full force and effect.
Should you have any questions, please call me. If you wish to accept this
Commitment, please so indicate by signing and returning the enclosed duplicate
copy of this letter to me by April 6, 2000.
Yours truly,
TRANSAMERICA BUSINESS CREDIT
CORPORATION-TECHNOLOGY FINANCE
DIVISION
By
---------------------------------
Xxxxxx X. Xxxxxxx
Senior Vice President - Marketing
Accepted this __ day of April, 2000.
TREGA BIOSCIENCES, INC.
By
------------------------------
Exhibit C
April 11, 2000
Xx. Xxxxxx Xxxxx
Chief Financial Officer
Trega Biosciences, Inc.
0000 Xxxxxx Xxxxx Xxxxx
Xxx Xxxxx, Xxxxxxxxxx 00000
Dear Xxxxxx:
Transamerica Business Credit Corporation - Technology Finance Division
("Lender") is pleased to offer financing for the Equipment described in this
letter (this "Commitment") to Trega Biosciences, Inc. ("Borrower"). Except with
respect to the transaction described in a commitment letter dated November 25,
1998 as amended on March 31, 2000 (the "Prior Commitment"), this Commitment
supersedes all prior correspondence, proposals, and oral or other communications
relating to financing arrangements between Borrower and Lender.
The outline of this offer is as follows:
LENDER: Transamerica Business Credit Corporation -
Technology Finance Division and/or its
affiliates, successors or assigns.
BORROWER: Trega Biosciences, Inc.
AMOUNT OF LOANS: Not to exceed $1,400,000 in the aggregate.
USE OF PROCEEDS: Office equipment, computers and software,
tenant improvements and related soft costs
(the "Equipment"). All Equipment subject to
Lender approval prior to funding.
COLLATERAL: Lender will require a perfected first priority
security interest in all Equipment financed
with the Loans, including but not limited to
all additions, accessions, improvements,
replacements and attachments thereto and
proceeds (including insurance proceeds)
thereof (the "Collateral").
LOCATION OF COLLATERAL: San Diego, CA
AVAILABILITY: Prior to any funding under this Commitment,
Borrower must complete an equity financing
with net proceeds to Borrower of not less
than $10,000,000.
EXPECTED DRAW-DOWN SCHEDULE: A minimum of $350,000 will be drawn on or
before April 30, 2000, and the remaining
availability will be drawn on or before
December 31, 2000.
DRAW-DOWN EXPIRATION: No Loans will be funded after December 31,
2000.
LOAN TERM: Each Loan Term will commence upon delivery
of the equipment or upon each delivery of
items of equipment having an aggregate cost
of not less than $100,000 and will continue
through 48 months from the first day of the
month next following or coincident with
commencement of that Loan Term.
PAYMENT TERMS: Monthly Payments equal to 2.517% of original
principal amount of each Loan will be
payable monthly in advance. The first and
last Monthly Payments will be due and
payable on or before commencement of each
Loan Term.
ADJUSTMENT TO Lender reserves the right to increase the
PAYMENT TERMS: rate set forth above as of the date each
Loan Term commences commensurate to the
change in the weekly average of the interest
rates of 4-year U.S. Treasury Securities (as
published in the WALL STREET JOURNAL) from
the week ending January 21, 2000 (6.59%) to
the week preceding the commencement of that
Loan Term. As of the date each Loan Term
commences, the Monthly Payment will be fixed
for that entire Loan Term. A schedule of the
actual Monthly Payments will be provided by
the Lender following commencement of each
Loan Term.
BALLOON PAYMENT: At the end of each Loan Term, the
Borrower will be obligated to make one final
Balloon Payment equal to 10% of the original
principal amount of each Loan, plus any other
amounts then due and owing to Lender.
INTERIM PAYMENT: An Interim Payment will accrue from the date
each Loan Term commences until the next
following first day of a month (unless the
Loan Term commences on the first day of a
month). The Interim Payment will be
calculated at the daily equivalent of the
currently adjusted Monthly Payment.
INSURANCE: Prior to any delivery of Equipment, the
Borrower will furnish confirmation of
insurance acceptable to the Lender covering
the Collateral including primary, all risk,
physical damage, property damage and bodily
injury with appropriate loss payee and
additional insured endorsements in favor of
the Lender.
CONDITIONS PRECEDENT
TO LENDING: Each Loan will be subject to the following:
1. No material adverse change in the
financial condition, operations or
prospects of the Borrower prior to
funding. The Lender reserves the right to
rescind any unused portion of its
commitment in the event of a
material adverse change in the financial
condition, operation or prospects of the
Borrower.
2. Completion of the documentation and final
terms of the proposed financing
satisfactory to Lender and Lender's
counsel.
3. Results of all due diligence, including
lien, judgment and tax search and other
matters Lender may request shall be
satisfactory to Lender and Lender's
counsel.
4. Receipt by Lender of duly executed loan
documentation in form and substance
satisfactory to Lender and its counsel.
2
5. Lender shall receive a valid and
perfected first priority lien and
security interest in the Collateral and
Lender shall have received satisfactory
evidence that there are no liens on the
Collateral except as expressly permitted
herein.
ADDITIONAL There will be no actual or threatened
COVENANTS: conflict with, or violation of, any
regulatory statute, standard or rule
relating to the Borrower, its present or
future operations, or the Collateral.
Borrower will be required to provide quarterly
financial information. All information
supplied by the Borrower will be correct and
will not omit any statement necessary to make
the information supplied not be misleading.
There will be no material breach of the
representations and warranties of the Borrower
in the loan.
EXPENSES: All costs and expenses incurred by the Lender
in connection with the underwriting and
closing of the Loans will be paid by the
Borrower whether or not any Loans are
consummated and funds are advanced by the
Lender. Expenses shall not exceed $2,000
without the prior written consent of the
Borrower. Borrower will be billed separately
for Expenses.
LAW: This letter and the proposed Loan are
intended to be governed by and construed in
accordance with Illinois law without regard
to its conflict of law provisions.
INDEMNITY: Borrower agrees to indemnify and to hold
harmless Lender, and its officers, directors
and employees against all claims, damages,
liabilities and expenses which may be incurred
by or asserted against any such person in
connection with or arising out of this letter
and the transactions contemplated hereby,
other than claims, damages, liability, and
expense resulting from such person's gross
negligence or willful misconduct.
CONFIDENTIALITY: This letter is delivered to you with the
understanding that neither it nor its
substance shall be disclosed publicly or
privately to any third person except those who
are in a confidential relationship to you
(such as your legal counsel and accountants),
or where the same is required by law and then
only on the basis that it not be further
disclosed, which conditions Borrower and its
agents agree to be bound by upon acceptance of
this letter.
Without limiting the generality of the
foregoing, none of such persons shall use or
refer to Lender or to any affiliate name in
any disclosures made in connection with any of
the transactions without Lender's prior
written consent.
Upon completion of the initial takedown by
Borrower, the Borrower will no longer be
required to obtain Lender's prior written
consent to disclose the transaction
contemplated hereby. In addition, the Borrower
agrees to provide camera ready artwork of
typestyles and logos of the Borrower for use
in promotional material by the Lender.
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CONDITIONS OF ACCEPTANCE: This Commitment Letter is intended to be a
summary of the most important elements of
the agreement to enter into a loan
transaction with Borrower, and it is subject
to all requirements and conditions contained
in Loan documentation proposed by Lender or
its counsel in the course of closing the
Loans described herein. Not every provision
that imposes duties, obligations, burdens,
or limitations on Borrower is contained
herein, but shall be contained in the final
Loan documentation satisfactory to Lender
and its counsel.
EACH OF THE PARTIES HERETO IRREVOCABLY AND
UNCONDITIONALLY WAIVES ALL RIGHT TO TRIAL BY
JURY IN ANY SUIT, ACTION, PROCEEDING OR
COUNTERCLAIM ARISING OUT OF OR RELATED TO THIS
LETTER OR THE TRANSACTION DESCRIBED IN THIS
LETTER.
APPLICATION FEE: The $10,000 Application Fee previously
paid by the Borrower will be first applied to
the reasonable costs and expenses of the
Lender in connection with the transaction,
and any remainder shall be applied pro rata
(based on the amount of each funding to the
total amount of this Commitment) to the
second month's payment due under the Loan.
COMMITMENT EXPIRATION: This Commitment shall expire on April 18,
2000 unless prior thereto either extended in
writing by the Lender or accepted as
provided below by the Borrower.
Should you have any questions, please call me. If you wish to accept this
Commitment, please so indicate by signing and returning the enclosed duplicate
copy of this letter to me by April 18, 2000.
Yours truly,
TRANSAMERICA BUSINESS CREDIT
CORP - TECHNOLOGY FINANCE
DIVISION
By
---------------------------------
Xxxxxx X. Xxxxxxx
Senior Vice President - Marketing
Accepted this __ day of April, 2000.
TREGA BIOSCIENCES, INC.
By
------------------------------
Name:
Title:
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