AMENDMENT TO LOAN AND SECURITY AGREEMENT
Exhibit 10.36
AMENDMENT TO
This Amendment to Loan and Security Agreement (this “Amendment”) is made as of April 6, 2016, by and among PhaseRx, Inc., a Delaware corporation (the “Company”), and certain lenders under that certain Loan and Security Agreement, dated as of December 21, 2015 (the “Loan Agreement”), among the Company and the financial institutions and individuals listed on Annex A thereto, who execute this Amendment (the “Lenders”).
WITNESSETH:
WHEREAS, the Company and the Lenders are parties to the Loan Agreement; and
WHEREAS, pursuant to Section 10.01 of the Loan Agreement, the Loan Agreement may be amended by written agreement of the Company and the Required Lenders (as defined in the Loan Agreement); and
WHEREAS, the Lenders constitute the Required Lenders; and
WHEREAS, the Company and the Lenders desire to amend the Loan Agreement to modify the definition of the term “Qualified Offering” for purposes of the Loan Agreement;
NOW, THEREFORE, in consideration of the mutual promises and covenants set forth herein, the parties hereto, intending legally to be bound, hereby agree as follows:
1. The definition of “Qualified Offering” in Section 1.01 of the Loan Agreement is hereby amended and restated by replacing the amount of “$36,000,000” in such definition with the amount of “$24,000,000”.
2. Section 4.01(i) of the Disclosure Schedule made and given pursuant to Section 4 of the Loan Agreement is hereby deleted in its entirety and replaced with Schedule 4.01(i) attached hereto.
3. This Amendment shall be effective upon its execution by the Company and the Lenders constituting the Required Lenders.
4. This Amendment may be executed in any number of counterparts, all of which taken together shall constitute one and the same agreement, and any of the parties hereto may execute this Amendment by signing any such counterpart. Delivery of an executed counterpart of a signature page to this Amendment by telecopier or by electronic mail (in portable document format (“PDF”)) shall be effective as delivery of a manually executed counterpart of this Amendment.
5. This Amendment shall be governed by and construed according to the laws of the State of Delaware, without regard to the conflict of laws provisions thereof.
[Signature page follows]
The parties have caused this Amendment to be duly executed and delivered by their proper and duly authorized officers as of the date and year first written above.
| COMPANY: | ||
| PHASERX, INC. | ||
| a Delaware corporation | ||
| By: | /s/ Xxxxxx X. Xxxxxxx | |
| Name: Xxxxxx X. Xxxxxxx | ||
| Title: President and Chief Executive Officer | ||
[Signature pages of Lenders follow]
[SIGNATURE PAGE OF LENDERS TO AMENDMENT
TO LOAN AND SECURITY AGREEMENT]
| Name of Lender: | 2004 Xxxx Xxxxx Irrevocable | |
| Signature of Authorized Signatory of Lender: | /s/ Willy Bear | |
| Name of Authorized Signatory: | Willy Bear | |
| Title of Authorized Signatory: | Trustee | |
| Principal Amount: | $50,000 |
[SIGNATURE PAGE OF LENDERS TO AMENDMENT
TO LOAN AND SECURITY AGREEMENT]
| Name of Lender: | Alpha Capital Anstalt | |
| Signature of Authorized Signatory of Lender: | /s/ Xxxxxxx Xxxxxxxxx | |
| Name of Authorized Signatory: | Xxxxxxx Xxxxxxxxx | |
| Title of Authorized Signatory: | Director | |
| Principal Amount: | $500,000 |
[SIGNATURE PAGE OF LENDERS TO AMENDMENT
TO LOAN AND SECURITY AGREEMENT]
| Name of Lender: | Chessed Found Ltd. | |
| Signature of Authorized Signatory of Lender: | /s/ Xxxxxxxx Xxxxxxxxxx | |
| Name of Authorized Signatory: | Xxxxxxxx Xxxxxxxxxx | |
| Title of Authorized Signatory: | Manager | |
| Principal Amount: | $400,000 |
[SIGNATURE PAGE OF LENDERS TO AMENDMENT
TO LOAN AND SECURITY AGREEMENT]
| Name of Lender: | Xxxxxx Xxxx | |
| Signature of Authorized Signatory of Lender: | /s/ Xxxxxx Xxxx | |
| Name of Authorized Signatory: | Xxxxxx Xxxx | |
| Title of Authorized Signatory: | ||
| Principal Amount: | $100,000 |
[SIGNATURE PAGE OF LENDERS TO AMENDMENT
TO LOAN AND SECURITY AGREEMENT]
| Name of Lender: | Point Capital Inc. | |
| Signature of Authorized Signatory of Lender: | /s/ Xxxx Xxxxxxxx | |
| Name of Authorized Signatory: | Xxxx Xxxxxxxx | |
| Title of Authorized Signatory: | President | |
| Principal Amount: | $100,000 |
[SIGNATURE PAGE OF LENDERS TO AMENDMENT
TO LOAN AND SECURITY AGREEMENT]
| Name of Lender: | Xxxxxx X. Xxxxxxx Trust UDT 3/13/85 | |
| Signature of Authorized Signatory of Lender: | /s/ Xxxxxx X. Xxxxxxx | |
| Name of Authorized Signatory: | Xxxxxx X. Xxxxxxx | |
| Title of Authorized Signatory: | Trustee | |
| Principal Amount: | $150,000 |
[SIGNATURE PAGE OF LENDERS TO AMENDMENT
TO LOAN AND SECURITY AGREEMENT]
| Name of Lender: | Titan Multi Strategy Fund LTD | |
| Signature of Authorized Signatory of Lender: | /s/ Xxxxxxxx Xxxxx | |
| Name of Authorized Signatory: | Xxxxxxxx Xxxxx | |
| Title of Authorized Signatory: | Manager | |
| Principal Amount: | $500,000.00 |
[SIGNATURE PAGE OF LENDERS TO AMENDMENT
TO LOAN AND SECURITY AGREEMENT]
| Name of Lender: | Riding The Bull LLC | |
| Signature of Authorized Signatory of Lender: | /s/ Xxxx Xxxxxxxxx | |
| Name of Authorized Signatory: | Xxxx Xxxxxxxxx | |
| Title of Authorized Signatory: | Managing Member | |
| Principal Amount: | $1.050,000 |
Schedule 4.01(i)
Section 4.01(i). Capitalization
Capital Stock as of the Date of the Agreement
| Common Stock | 5,678,408 | |||
| Common Stock Options | ||||
| Outstanding | 4,808,646 | |||
| Available for Grant | 243,042 | |||
| Preferred Stock | 20,216,583 | |||
| Series A-1 Stock | 5,500,000 | |||
| Bridge Notes* | 19,368,623 | |||
| Common Stock Warrants | - | |||
| Preferred Stock Warrants | 3,614,761 | |||
| Total | 59,430,063 |
*Number of shares of common stock issuable upon conversion of all of the convertible promissory notes set forth in Annex 4.01(p) as of the date of the Agreement.
Pro Forma Capitalization (for illustrative purposes only, assuming the issuance of 1,250,000 shares of common stock at a public offering price per share of $6.00 in the Qualified Offering)
| Without | Without | With | ||||||||||||||||||||||||||
| ESOP | ESOP | ESOP | With ESOP | |||||||||||||||||||||||||
| Shares | Amount ($) | Price | Ownership % | Ownership $ | Ownership % | Ownership $ | ||||||||||||||||||||||
| Existing PhaseRx Shareholders | 5,999,983 | 53.32 | % | $ | 35,999,900 | 47.46 | % | $ | 32,039,911 | |||||||||||||||||||
| New PhaseRx Insider Investment | 1,566,667 | $ | 9,400,000 | $ | 6.00 | 13.92 | % | $ | 9,400,000 | 12.39 | % | $ | 8,366,000 | |||||||||||||||
| Shire Investment | - | $ | - | $ | - | 0.00 | % | $ | - | 0.00 | % | $ | - | |||||||||||||||
| Private Sale | 1,406,549 | $ | - | $ | - | 12.50 | % | $ | 8,439,292 | 11.13 | % | $ | 7,510,970 | |||||||||||||||
| Bridge Loan into Private Company | 916,667 | $ | 4,400,000 | $ | 4.80 | 8.15 | % | $ | 5,500,000 | 7.25 | % | $ | 4,895,000 | |||||||||||||||
| Palladium Clients | 1,250,000 | $ | 7,500,000 | $ | 6.00 | 11.11 | % | $ | 7,500,000 | 9.89 | % | $ | 6,675,000 | |||||||||||||||
| Palladium Capital Advisors | 112,524 | 1.00 | % | $ | 675,143 | 0.89 | % | $ | 600,878 | |||||||||||||||||||
| Total | 11,252,389 | $ | 21,300,000 | 100.00 | % | $ | 67,514,336 | 89.00 | % | $ | 60,087,759 | |||||||||||||||||
| ESOP | 1,390,745 | 11.00 | % | $ | 7,426,577 | |||||||||||||||||||||||
| Total | 12,643,134 | 100.00 | % | $ | 67,514,336 | |||||||||||||||||||||||
Existing PhaseRx Shareholders includes preferred, common, noteholders, warrentholders, and optionholders
