[LOGO] SILICON VALLEY BANK
AMENDMENT TO LOAN AND SECURITY
AGREEMENT
BORROWER: MAXIM PHARMACEUTICALS, INC.
DATE: MARCH 16, 1998
THIS AMENDMENT TO LOAN AGREEMENT is entered into between SILICON VALLEY
BANK ("Bank") and the borrower named above (the "BORROWER"). The Parties
agree to amend the Loan and Security Agreement between them, dated March 15,
1997, as amended from time to time (the "Loan Agreement"), as follows,
effective as of the date hereof. (Capitalized terms used but not defined in
this Amendment, shall have the meanings set forth in the Loan Agreement.)
1. NEW DEFINITIONS. Section 1.1 of the Loan Agreement is hereby
amended by adding the following new defined terms thereto:
"'Committed Second Term Line' means a credit extension of up to
Seven-Hundred Thousand Dollars ($700,000) made pursuant to Section 2.1.3
hereof, and as further limited pursuant to the terms and conditions of
Section 2.1.3 hereof.
'Second Term Loan' and 'Second Term Loans' shall have the meanings set
forth in Section 2.1.3 hereof.
'Second Term Loan Evidence' has the meaning set forth in Section 2.1.3.
'Second Term Loan Amendment Date' means the date of the making of the
initial Second Term Loan."
2. REVISED DEFINITION. Section 1.1 of the Loan Agreement is hereby
amended by replacing the definition of "Maturity Date" with the following:
"'Maturity Date' means December 31, 2001 with regard to the Term Loan
and related Obligations and means December 31, 2002 with regard to the
Second Term Loan and related Obligations."
3. NEW SECTION 2.1.3. Section 2.1.3 of the Loan Agreement, as set
forth below, is hereby added to the Loan Agreement to follow immediately
after Section 2.1.2.
"2.1.3 SECOND TERM LOANS; ETC.
(a) Subject to and upon the terms and conditions of this Agreement, at
any time from the date hereof through December 31, 1998 (the "Second Term
Availability End Date"), Bank agrees to make advances (each a "Second
Term Loan" and collectively the "Second Term Loans") to Borrower in an
aggregate, initial outstanding amount
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thereof not to exceed the Committed Second Term Line, PROVIDED in no
event shall the amount of each Second Term Loan exceed 100% of the net
purchase price of new equipment being purchased by Borrower or equipment
purchased by the Borrower on and after 90 days prior to the Second Term
Loan Amendment Date, comprised of general purpose, scientific,
laboratory, manufacturing and test equipment, associated software,
computer equipment, office equipment, furnishing and leasehold
improvements and which is otherwise acceptable to Bank in its sole
discretion (the "Second Equipment Borrowing Base"), PROVIDED that the
aggregate, original principal amount of Second Term Loans relating to
leasehold improvements shall not exceed $125,000. The "net purchase
price" of equipment means the purchase price thereof, as shown on the
applicable invoice, net of all charges for taxes, freight, delivery,
insurance, set-up, training, manuals, fees, service charges and other
similar items, provided that only up to 15% of the total purchase price
of equipment included in the Second Equipment Borrowing Base may consist
of software. To evidence each Second Term Loan, Borrower shall deliver
to Bank, at the time of each Second Term Loan request, evidence, in form
and substance satisfactory to Bank (the "Second Term Loan Evidence"), of
the equipment purchases that are the subject of the Second Equipment
Borrowing Base.
(b) Interest shall accrue from the date of each Second Term Loan at the
per annum rate equal to one-quarter of one percent (0.25%) above the
Prime Rate (the "Second Term Loan Prime Option Rate") and shall be
payable monthly for each month through the Second Term Availability End
Date. On and after the Second Term Availability End Date, interest shall
accrue at either the Second Term Loan Prime Option Rate or the Second
Term Loan Fixed Option Rate (as defined below), at the Borrower's
election made by the Borrower on the Second Term Availability End Date
by notifying Bank in writing of the Borrower's election; if Borrower
fails to notify the Bank on or before the Second Term Availability End
Date of such interest rate election, then the interest rate shall be
deemed to be the Second Term Loan Prime Option Rate. Such interest shall
be payable monthly for each month while the Second Term Loans are
outstanding. As used herein the term "Second Term Loan Fixed Option
Rate" shall mean the Treasury Xxxx Rate in effect as of the Second Term
Availability End Date on a per annum basis plus three and one quarter
percent (3.25%).
(c) In the event the Prime Rate is changed from time to time hereafter,
the applicable rate of interest hereunder shall be increased or
decreased effective as of 12:01 a.m. on the day the Prime Rate is
changed, by an amount equal to such change in the Prime Rate. All
interest chargeable under the Loan Documents shall be computed on the
basis of a three hundred sixty (360) day year for the actual number of
days elapsed.
(d) Any Second Term Loans that are outstanding on the Second Term
Availability End Date will be payable in forty-eight (48) equal monthly
installments of principal, plus all accrued interest, with the first of
such payments due on February 1, 1999, and continuing on the first day
of each month thereafter for the following forty-six (46) consecutive
months, with all Second Term Loans and all Obligations relating thereto
to be fully due and payable in a final payment no later than December
31, 2002. Second Term Loans, once repaid, may not be reborrowed.
(e) When Borrower desires to obtain a Second Term Loan, Borrower shall
notify Bank (which notice shall be irrevocable) by facsimile
transmission to be received no later than 3:00 p.m. Pacific time one (1)
Business Day before the day on which the Second Term Loan is to be made.
Such notice shall be substantially in the form of Exhibit B. The notice
shall be signed by a Responsible Officer or its designee and include the
Second Term Loan Evidence.
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(f) In the event any principal of the Second Term is prepaid prior to
the dates due under the schedule of principal payments set forth above
and Borrower has elected the Second Term Loan Fixed Option Rate only,
Borrower shall also pay Bank a prepayment fee in an amount equal to the
following percentage of the amount prepaid or required to be prepaid,
based on the date the prepayment occurs or the date prepayment is due as
a result of an Event of Default or termination of this Agreement:
Prior to or during the 1999 calendar
year: 3%
During the 2000 calendar year: 2%
During the 2001 calendar year: 1%"
4. REVISED SECTION 2.3(a). Section 2.3(a) of the Loan Agreement is
hereby amended to read as follows:
"(a) INTEREST RATE. The Term Loans and Second Term Loans shall have
the interest rate as set forth in Sections 2.1.2 and 2.1.3 hereof,
respectively."
5. REVISED SECTION 6.12. Section 6.12 of the Loan Agreement is
hereby amended to read as follows:
"6.12 LIQUIDITY COVENANT; CASH PLEDGE; ETC. Borrower shall maintain, as
of the last calendar day of each month, the greater of at least Twelve
(12) months Remaining Months Liquidity or two multiplied times the
principal amount of the Term Loans and Second Term Loans outstanding.
"Remaining Months Liquidity" is defined as cash on hand (and cash
equivalents and marketable securities), divided by Cash Burn. "Cash
Burn" is defined as cash (prior period) minus cash (current period) plus
increases in short and long term borrowings plus increases in equity (or
subordinated debt). If the Borrower fails to maintain the above
covenant, then Borrower agrees to deposit cash with the Bank in an
amount equal to the amount of the Term Loans and Second Term Loans
outstanding, as collateral security for the repayment of the
Obligations, and to execute and deliver to the Bank the Bank's standard
cash collateral security agreement in connection therewith. Upon the
Borrower's subsequent satisfaction of the covenant set forth in the
first sentence of this section, Bank agrees to terminate such cash
pledge as long as Borrower remains in compliance therewith."
6. REPRESENTATIONS TRUE. Borrower represents and warrants to Bank
that all representations and warranties set forth in the Loan Agreement, as
amended hereby, are true and correct.
7. FEE. Borrower shall pay to Bank a fee of $1,500 in connection
herewith, which shall be in addition to interest and to all other amounts
payable under the Loan Agreement.
8. GENERAL PROVISIONS. This Amendment, the Loan Agreement, any
prior written amendments to the Loan Agreement signed by Bank and the
Borrower, and the other written documents and agreements between Bank and the
Borrower set forth in full all of the representations and agreements of the
parties with respect to the subject matter hereof and supersede all prior
discussions, representations, agreements and understandings between the
parties with respect to the subject hereof. Except as herein expressly
amended, all of the terms and provisions of the Loan Agreement, and all other
documents and agreements between Bank and the Borrower shall continue in full
force and effect and the same are hereby ratified and
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confirmed. This Agreement and Consent may be executed in any number of
counterparts, which when taken together shall constitute one and the same
agreement.
BORROWER: SILICON:
MAXIM PHARMACEUTICALS, INC. SILICON VALLEY BANK
BY /s/ Xxxx X. Xxxxxx BY /s/ Xxxxx X. XxXxxx
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TITLE: CHIEF FINANCIAL OFFICER TITLE SVP
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BY /s/ Xxxxx X. Xxxxxxxxx
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TITLE: CHIEF EXECUTIVE OFFICER
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