Exhibit 10.24
LOAN MODIFICATION AGREEMENT
This LOAN MODIFICATION AGREEMENT is entered into as of May 7, 1997, by
and between SILICON VALLEY BANK, a California-chartered bank with its principal
place of business at 0000 Xxxxxx Xxxxx, Xxxxx Xxxxx, XX 00000 and with a loan
production office located at Wellesley Office Park, 00 Xxxxxxx Xxxxxx, Xxxxx
000, Xxxxxxxxx, XX 00000, doing business under the name "Silicon Valley East"
("Bank"), and ENDOGEN, INC., a MASSACHUSETTS corporation with its principal
place of business at 00 XXXXXXXX XXX, XXXXXX, XXXXXXXXXXXXX 00000 ("Borrower").
RECITALS
Borrower has borrowed money from Bank pursuant to certain Existing Loan
Documents, as defined below. In consideration of certain financial
accommodations from Bank, and Borrower's continuing obligations under the
Existing Loan Documents, Borrower and Bank agree as follows:
AGREEMENT
1. DESCRIPTION OF EXISTING INDEBTEDNESS. Among other indebtedness which
may be owing by Borrower to Bank, Borrower is indebted to Bank pursuant to,
among other documents, a Revolving Promissory Note dated August 28, 1996 in the
original principal amount of EIGHT HUNDRED FIFTY THOUSAND AND NO/100THS DOLLARS
($850,000) (the "Revolving Note"), and a Term Promissory Note dated August 28,
1996 in the original principal amount of FOUR HUNDRED THOUSAND AND NO/100THS
DOLLARS ($400,000) (the "Term Note"). The Revolving Note and the Term Note are
governed by the terms of a Loan and Security Agreement dated August 28, 1996
between Borrower and Bank, as such Loan and Security Agreement may be amended
from time to time (the "Loan Agreement").
Hereinafter, all indebtedness owing by Borrower to Bank shall be
referred to as the "Indebtedness."
2. DESCRIPTION OF COLLATERAL. Repayment of the Indebtedness is secured
pursuant to the Loan Agreement. Hereinafter, the Loan Agreement, the Revolving
Note and the Term Note, together with all other documents securing payments of
the Indebtedness, shall be referred to as the "Existing Loan Documents."
3. DESCRIPTION OF CHANGES IN TERMS.
3.1 Modifications to Eligible Accounts Definition. Subsection (g) of
the definition of Eligible Accounts in the Loan Agreement is hereby deleted
in its entirety.
3.2 Modifications to Eligible Foreign Accounts Definition. The
definition of Eligible Foreign Accounts in the Loan Agreement is hereby replaced
in its entirety with the following:
"Eligible Foreign Accounts" means Accounts with respect to
which the account debtor does not have principal place of
business in the United States and that are: (1) covered by
credit insurance in form and amount, and by an insurer
satisfactory to Bank less the amount of any deductible(s)
which may be or become owing thereon; or (2) supported by one
or more letters of credit in favor of Bank as beneficiary, in
an amount and of a tenor, and issued by a financial
institution, acceptable to Bank; or (3) derived from sales of
products or services to Amhersham International plc or to
Yamanouchi Pharmaceutical Co., Ltd., or (4) that Bank approves
on a case-by-case basis.
3.3 Modifications to Quick Ratio Covenant. Section 6.8 of the
Loan Agreement is hereby replaced in its entirety with the following:
6.8 Quick Ratio. Borrower shall maintain, as of the last day
of each calendar month beginning February 28, 1997, a ratio of
Quick Assets to Current Liabilities of at least 1.0 to 1.0.
3.4 Modifications to Compliance Certificate. Exhibit D of the
Loan Agreement is hereby replaced in its entirety with Exhibit D to this
Agreement.
3.5 Deletion of Certain Provisions. Section 2.9 of the Loan
Agreement is hereby deleted in its entirety.
4. WAIVER OF PRIOR DEFAULT. Bank hereby waives Borrower's violation of
the Quick Ration Covenant set forth in section 6.8 of the Loan Agreement for the
periods ending December 31, 1996 and January 31, 1997.
5. CONDITIONS PRECEDENT TO FURTHER ADVANCES. The obligation of Bank to
make further advances to Borrower under this line is subject to the condition
precedent that Bank shall have received, in form and substance satisfactory to
Bank, the following:
(a) this Loan Modification Agreement duly executed by
Borrower;
(b) such other documents, and completion of such other
matters, as Bank may reasonably deem necessary or appropriate.
6. CONSISTENT CHANGES. The Existing Loan Documents are hereby amended
wherever necessary to reflect the changes described in this Loan Modification
Agreement.
7. NO DEFENSES OF BORROWER. Borrower agrees that as of this date, it
has no defenses against any of the obligations to pay any amounts under the
Indebtedness.
8. CONTINUING VALIDITY. Borrower understands and agrees that (i) in
modifying the Existing Loan Documents, Bank is relying upon Borrower's
representations,
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warranties and agreements, as set forth in the Existing Loan Documents, (ii)
except as expressly modified pursuant to this Loan Modification Agreement
(including the effects of Section 6 hereof), the Existing Loan Documents remain
unchanged and in full force and effect, (iii) Bank's agreements to modify the
Existing Loan Documents pursuant to this Loan Modification Agreement shall in no
way obligate Bank to make any future modifications to the Existing Loan
Documents, (iv) it is the intention of Bank and Borrower to retain as liable
parties all makers and endorsers of the Existing Loan Documents, unless a party
is expressly released by Bank in writing, (v) no maker, endorser or guarantor
will be released by virtue of this Loan Modification Agreement, and (vi) the
terms of this Section 8 apply not only to this Loan Modification Agreement but
also to all subsequent loan modification agreements, if any.
9. EFFECTIVENESS. This Agreement shall become effective only when it
shall have been executed by Borrower and Bank (provided, however, in no event
shall this Agreement become effective until signed by an officer of Bank in
California).
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as a sealed instrument as of the date first set forth above.
"Borrower": ENDOGEN, INC. "Bank": SILICON VALLEY BANK, doing
business as SILICON VALLEY EAST
By: /s/ Xxxx X. Xxxxxxx By: /s/ Xxxxxxx X. Xxxxx
----------------------------- -------------------------------------
Xxxx X. Xxxxxxx, President Xxxxxxx X. Xxxxx, VP
ATTEST: SILICON VALLEY BANK
--------------------------
By: /s/ Xxx Xxxxx
-------------------------------------
Title: Xxx Xxxxx, AVP
------------------------------------
(Signed in Santa Xxxxx County, California)
EXHIBIT D FOLLOWS
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EXHIBIT D
COMPLIANCE CERTIFICATE
Borrower: Endogen, Inc. Lender: Silicon Valley Bank
00 Xxxxxxxx Xxx 0000 Xxxxxx Xxxxx
Xxxxxx, XX 00000 Xxxxx Xxxxx, XX 00000
The undersigned authorized office of ENDOGEN, INC. hereby certifies
that in accordance with the terms and conditions of the Loan and Security
Agreement dated AUGUST 28, 1996 between Borrower and Bank, as amended (the "Loan
Agreement"), (i) Borrower is in complete compliance for the period ending
_____________ of all required conditions and terms except as noted below and
(ii) all representations and warranties of Borrower stated in the Agreement are
true, accurate and complete in all material respects as of the date hereof.
Attached herewith are the required documents supporting the above certification.
The Officer further certifies that these are prepared in accordance with
Generally Accepted Accounting Principals (GAAP) and are consistent from one
period to the next except as explained in an accompanying letter or footnotes.
Please indicate compliance status by circling Yes/No under
"Complies" column
Reporting Covenant Required Complies
------------------ -------- --------
Monthly financial statements Monthly within 25 days Yes No
Annual (CPA Audited) FYE within 90 days Yes No
A/R & A/P Aging Monthly within 25 days Yes No
A/R Audit Initial and Annual Yes No
Financial Covenants Required Actual Complies
------------------- -------- ------ --------
Maintain on a Monthly Basis:
----------------------------
Minimum Quick Ratio commencing 2/28/97 1.0:1.0 _______:1.0 Yes No
Minimum TNW $4,000,000 $_________ Yes No
Maximum Debt/TNW 0.75:1.0 _______:1.0 Yes No
Minimum Debt Service+ 1.5:1.0 _______:1.0 Yes No
Maintain on a Quarterly Basis:
------------------------------
Minimum Debt Service ++ 1.5:1.0 _______:1.0 Yes No
Minimum Profitability for FQE 8/31/96 and thereafter
($75,000) $_________ Yes No
+ To be met only after Borrower has met Minimum Debt Service for two fiscal
quarters
++ Not a financial covenant, but a condition to increase the revolving line
availability as per ss.2.1 of the Loan Agreement
Comments Regarding Exceptions:
On behalf of Borrower, the Officer further acknowledges that at any such time as
Borrower is out of compliance with any of the terms set forth in the Agreement,
including, without limitation, any of the financial covenants, Borrower cannot
receive any advances.
-----------------------------------
Sincerely, BANK USE ONLY
------------------------------------ Received by: ______________________
Signature Date: _____________________________
------------------------------------ Verified: _________________________
TITLE Date: _____________________________
------------------------------------ Compliance Status: Yes No
DATE -----------------------------------
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