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EXHIBIT 10.57A
ANNEX VIII TO
NOTE PURCHASE
AGREEMENT
FIRST AMENDMENT
TO
LOAN AND SECURITY AGREEMENT
This FIRST AMENDMENT, dated as of June 30, 1997 (this "Amendment"), to
the Loan and Security Agreement, dated as of May 7, 1997 (as amended from time
to time, the "Loan Agreement") is entered into by and between MMC/GATX
PARTNERSHIP NO. I (the "Lender") and SHAMAN PHARMACEUTICALS, INC., a Delaware
corporation (the "Borrower").
W I T N E S S E T H:
WHEREAS, the parties desire to amend the Loan Agreement in order to
permit the Borrower to obtain additional financing through the issuance of
Senior Subordinated Convertible Notes due 2000 to several buyers and the
placement agent for such transaction in an aggregate principal amount of up to
$10,400,000 (as amended from time to time in accordance with their respective
terms, the "Noteholder Notes"). The Noteholder Notes will be issued pursuant to
the several Note Purchase Agreements, dated as of June 30, 1997 (as amended from
time to time in accordance with their respective terms, the "Note Purchase
Agreements") by and between the Borrower and the several buyers of the
Noteholder Notes named therein (the "Buyers" and, together with the holders from
time to time of the Noteholder Notes, the "Holders");
WHEREAS, the Noteholder Notes may be initially secured by a pledge and
security interest granted by the Borrower in certain collateral pursuant to the
terms of a Pledge and Security Agreement (the "Security Agreement") to be
entered into by and among the Borrower and First Trust of California, N.A., as
Collateral Agent (the "Noteholder Collateral Agent"); and
WHEREAS, it is a condition precedent to the obligations of the Buyers
under the Note Purchase Agreements to purchase their respective Noteholder Notes
that the Borrower and the Lender shall have executed and delivered this
Amendment;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants contained herein and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
1. AMENDMENT OF LOAN AGREEMENT.
1.1 Section 1.01 of the Loan Agreement shall be and is hereby
amended to add the following definitions in appropriate alphabetical order:
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"Excluded Collateral" means:
(a) all cash in U.S. currency held in the Noteholder
Collateral Account;
(b) all Government Obligations held in the Noteholder
Collateral Account;
(c) all cash, securities, rights and other property
at any time and from time to time received, receivable or otherwise
distributed in respect of the cash or Government Obligations held at
any time in the Noteholder Collateral Account;
(d) the Noteholder Collateral Account and each and
every general intangible (as such term is defined in Section 9-106 of
the Uniform Commercial Code as enacted and in force in the State of
California) relating thereto;
(e) all insurance policies relating to the Noteholder
Collateral Account or any of the cash or Government Obligations held at
any time in the Noteholder Collateral Account;
(f) all liens, guaranties and other rights and
privileges relating to any of the property referred to in the other
clauses of this definition of Excluded Collateral;
(g) all books, ledgers, books of account, records,
writings, data bases, information and other property relating solely to
the property referred to in the other clauses of this definition of
Excluded Collateral; and
(h) all proceeds, products, rents, issues, profits
and returns of and from any of the foregoing to the extent the same are
retained, or required to be retained by the Security Agreement, in the
Noteholder Collateral Account.
"Government Obligations" means direct obligations of, or
obligations the timely payment of principal of and the interest on
which are unconditionally guaranteed by, the full faith and credit of
the United States of America which mature not later than three months
after their date of issuance and which are held in the Federal Reserve
Bank book entry system.
"Holders" shall have meaning set forth in the recitals to the
First Amendment to this Agreement.
"Make-Whole Premium" shall mean an amount equal to the greater
of (i) zero and (ii) the excess of (x) the sum of the present values,
at the date of prepayment of the amount of each remaining scheduled
payment of interest on and principal on the Loan, or portion of such
payment, which will not be required to be made as a result of such
prepayment (each such payment an "Amount Payable") (each such Amount
Payable discounted separately at the Treasury Rate, determined on the
date three (3) Business Days before the date of prepayment, compounded
monthly, from the date such Amount Payable would be
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due), over (y) the principal amount of such Note to be prepaid. The
"Treasury Rate" shall be the yield (as quoted in The Wall Street
Journal on the date which is three (3) Business Days prior to the date
of prepayment) on U.S. Treasury securities adjusted to a constant
maturity equal to the then remaining number of full months to maturity
of the Note plus 100 basis points.
"Note Purchase Agreements" shall have meaning set forth in the
recitals to the First Amendment to this Agreement.
"Noteholder Notes" shall have meaning set forth in the
recitals to the First Amendment to this Agreement.
"Noteholder Collateral Account" means the separate account
established and maintained by First Trust of California, N.A., as
Collateral Agent, or its successors at First Bank, N.A., which account
holds the cash and Government Obligations which constitute part of the
Excluded Collateral and which account is initially entitled "Shaman
Pharmaceuticals, Inc. Noteholder Collateral Account for First Trust of
California, N.A., as Collateral Agent."
"Noteholder Obligations" means all Indebtedness of the
Borrower for principal, interest and default interest pursuant to the
Noteholder Notes, all obligations of the Borrower to redeem, repurchase
or make payments with respect to all or any portion of the Noteholder
Notes, and all other payment obligations and liabilities of the
Borrower to the Holders under the Noteholder Notes, the Note Purchase
Agreements and the Security Agreement.
"Security Agreement" means the Pledge and Security Agreement,
which may be entered into pursuant to the Note Agreements, between
Borrower and First Trust of California, N.A., as Collateral Agent.
"Subordinated Indebtedness" shall mean Indebtedness
subordinated to the Obligations on terms and conditions acceptable to
Lender in its sole discretion."
1.2 The definition of "Collateral" in Section 1.01 of the Loan
Agreement shall be and is hereby amended in its entirety to read as follows:
"'Collateral' has the meaning given to that term in Section
5.01."
1.3 The definition of "Equity Securities" in Section 1.01 of
the Loan Agreement shall be and is hereby amended in its entirety to read as
follows:
"Equity Securities" of any Person shall mean (a) all common
stock, preferred stock, participations, shares, partnership interests
or other equity interests in and of such Person (regardless of how
designated and whether or not voting or non-voting) and (b) all
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warrants, options and other rights to acquire any of the foregoing; but
excluding the Noteholder Notes.
1.4 The definition of "Permitted Indebtedness" in Section 1.01 of the
Loan Agreement shall be and is hereby amended in its entirety to read as
follows:
"Permitted Indebtedness" shall mean and include:
(a) Indebtedness of Borrower to Lender;
(b) Indebtedness of Borrower secured by Liens
permitted under clause (e) of the definition of Permitted
Liens;
(c) Indebtedness arising from the endorsement of
instruments in the ordinary course of business;
(d) The Noteholder Obligations and other Subordinated
Indebtedness;
(e) Indebtedness existing on the date hereof and set
forth on the Disclosure Schedule; and
(f) Other Indebtedness of Borrower not exceeding Two
Hundred Fifty Thousand Dollars ($250,000) at any time."
1.5. The last sentence of Section 2.01(c) of the Loan Agreement shall
be and is hereby amended to read in its entirety as follows:
"Except as permitted in Section 2.05, payments of principal
and interest on the Loan may not be prepaid."
1.6. Article II of the Loan Agreement shall be and is hereby amended to
add a new Section 2.05 at the end of Article II which shall read in its entirety
as follows:
"2.05 Concerning the Noteholder Notes.
(a) Upon the occurrence of an "Event of Default" or the
receipt by Borrower of a "Holder Notice" or a "Holder Redemption
Notice" (as such terms are defined in the Noteholder Notes), Borrower
shall give Lender written notice thereof on the same Business Day of
such occurrence or receipt and state therein whether Borrower is
requesting a waiver of Sections 7.01(k) or 9.01(g)(ii) or any other
provision of this Agreement.
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(b) Lender shall cooperate in good faith in responding to any
such request for a waiver, it being understood that the granting or
denial of any such requested waiver shall be in Lender's sole and
absolute discretion.
(c) If, on or before the end of the fifth Business Day (as
such term is defined in the Noteholder Notes) after the Standstill
Notice Date (as such term is defined in the Noteholder Notes), Lender
does not grant a waiver permitting full payment of all Holder Claims
then due and/or if Lender shall have elected to accelerate the Loan
(based upon the occurrence of an Event of Default under Section
9.01(g)(ii), then Borrower must immediately prepay or pay the
outstanding amount of the Loan, at a prepayment price equal to the
outstanding principal amount of the Loan, plus interest accrued thereon
through and including the date of such prepayment together with all
other amounts then due under this Agreement to Lender, plus a premium
equal to the Make-Whole Premium."
1.7. Section 5.01(g) of the Loan Agreement shall be and is hereby
amended in its entirety to read as follows:
"(g) Excluding (i) all Intellectual Property and (ii) the
Excluded Collateral."
1.8. Section 7.01(e) of the Loan Agreement shall be and is hereby
amended in its entirety to read as follows:
"(e) Distributions. (i) Pay any dividends or make any
distributions on its Equity Securities; (ii) purchase, redeem, retire,
defease or otherwise acquire for value any of its Equity Securities in
an aggregate amount exceeding $250,000 (other than repurchases by
cancellation of indebtedness pursuant to the terms of employee stock
purchase plans, employee restricted stock agreements or similar
arrangements); (iii) return any capital to any holder of its Equity
Securities as such; (iv) make any distribution of assets, Equity
Securities, obligations or securities to any holder of its Equity
Securities as such; or (v) set apart any sum for any such purpose;
provided, however, that Borrower may pay dividends payable solely in
Common Stock or warrants or options therefor."
1.9. Section 7.01(j) of the Loan Agreement shall be and is hereby
amended by (a) deleting the word "and" between clauses (i) and (ii) thereof and
(b) adding the following words at the end thereof after the words "such
account":
"and (iii) the Noteholder Collateral Account for so long as
the Excluded Collateral is held therein pursuant to the terms of the
Security Agreement."
1.10. Section 7.01(k) of the Loan Agreement shall be and is hereby
amended in its entirety to read as follows:
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"(k) Indebtedness Payments. (i) Prepay, redeem, purchase,
defease or otherwise satisfy in any manner prior to the scheduled
repayment thereof any Indebtedness for borrowed money (other than
amounts due under this Loan Agreement or the Note) or lease
obligations, (ii) amend, modify or otherwise change the terms of any
Indebtedness for borrowed money (other than the Obligations) or lease
obligations so as to accelerate the scheduled repayment thereof or
(iii) repay any notes to officers, directors or shareholders; provided,
however, that clause (i) above shall not be deemed to prohibit (x) the
redemption, repurchase or repayment of the Noteholder Notes as and to
the extent permitted by Section 8.1 thereof, (y) the payment of
interest in cash or stock on the Noteholder Notes in accordance with
their terms or (z) the conversion of the Noteholder Obligations into
common stock or other securities of Borrower in accordance with the
terms of the Noteholder Notes."
1.11. Section 7.01(m) of the Loan Agreement shall be and is hereby
amended to read in its entirety as follows:
"(m) Indebtedness. Create, incur, assume or permit to exist
any Indebtedness except Permitted Indebtedness."
1.12. Section 9.01(g) of the Loan Agreement shall be and is hereby
amended to read in its entirety as follows:
"(g) (i) An uncured default shall exist under any agreement
with any third party or parties which consists of the failure to pay
any Indebtedness at maturity (or within any grace period thereafter) or
which results in a right by such third party or parties, whether or not
exercised, to accelerate the maturity of any Indebtedness of Borrower
in an amount in excess of $250,000; or (ii) an "Event of Default" (as
such term is defined in the Noteholder Notes) shall occur and be
continuing, or a Holder shall have given to Borrower a "Holder Notice"
or "Holder Redemption Notice" (as such terms are defined in the
Noteholder Notes) and such Holder Notice or Holder Redemption Notice
shall not have been rescinded or withdrawn by 12:00 noon, New York City
time, on the fourth Business Day after such Holder Notice or Holder
Redemption Notice is given by such Holder to Borrower; or"
2. CONSENT. The Lender hereby consents to the execution and delivery by
the Borrower of the Noteholder Notes, the Note Purchase Agreements, the Security
Agreement and the other agreements and documents referred to therein each in
substantially the forms attached hereto as Exhibit A (collectively, and as
amended from time to time, the "Transaction Documents") and the performance by
the Borrower of its obligations contemplated by the Transaction Documents.
3. FUTURE SECURITY INTEREST. Upon the release to the Borrower of the
Excluded Collateral in accordance with the terms of the Security Agreement, the
definition of "Excluded Collateral" and all references thereto in the Loan
Agreement as amended by this Amendment shall be
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deemed deleted and of no further force and effect, and the Borrower agrees to
execute and deliver such other documents and agreements and take such other
actions as the Lender may reasonably request to give the Lender a perfected
first priority security interest in the Excluded Collateral on the same terms as
existed prior to the execution and delivery of this Amendment.
4. THIRD PARTY BENEFICIARIES. The Borrower and the Lender acknowledge
and agree that the Holders are third party beneficiaries of this Amendment. So
long as any Noteholder Notes remain outstanding or any Noteholder Obligations
remain unpaid, no amendments, waivers or modifications of the Loan Agreement as
amended by this Amendment shall be made or given which would increase the
principal amount of the Loan or would extend the maturity date of the Loan)
without obtaining the prior written consent of the "Majority Holders" (as such
term is defined in the Noteholder Notes).
5. FINANCING STATEMENTS. Immediately following the issuance of the
Noteholder Notes on the closing date under the Note Purchase Agreements (the
"Closing Date"), the Borrower and the Lender agree to file with the appropriate
officials, amendments on Form UCC-2 or other appropriate form to each of the
Lender's Uniform Commercial Code financing statements previously filed in
connection with the Loan Agreement. Such amendments shall state that the
Excluded Collateral is not subject to any lien or security interest in favor of
the Lender.
6. EFFECTIVENESS. This Amendment is effective upon execution and
delivery by Borrower and Lender of this Amendment.
7. MISCELLANEOUS.
7.1. This Amendment and the consent contained herein shall
operate solely with respect to the matters described herein and shall not impair
any right or power accruing to the Lender upon the occurrence or continuance of
any unrelated Default or Event of Default under the Loan Agreement, nor shall
this Amendment be construed as a waiver of any such Default or Event of Default
or as an acquiescence therein.
7.2. This Amendment shall be construed in connection with and
as part of the Loan Agreement, and except as modified and expressly amended by
this Amendment, all terms, conditions and covenants contained in the Loan
Agreement are hereby ratified and shall be and remain in full force and effect.
7.3. Any and all notices, requests, certificates and other
instruments executed and delivered after the execution and delivery of this
Amendment may refer to the Loan Agreement without making specific reference to
this Amendment but nevertheless all such references shall include this Amendment
unless the context otherwise requires.
7.4. The descriptive headings of the various Sections of this
Amendment are for convenience only and shall not affect the meaning or
construction of any of the provisions hereof.
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7.5. This Amendment shall be governed by and construed in
accordance with the laws of the State of California.
7.6. This Amendment may be executed in any number of
counterparts, each executed counterpart constituting an original, but all
together only one agreement.
7.7. Promptly, upon request, Borrower will provide photostatic
copies of the executed Transaction Documents to Lender.
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IN WITNESS WHEREOF, the Borrower and the Lender have caused this
Amendment to be executed by their duly elected officers as of the date first
above written.
SHAMAN PHARMACEUTICALS, INC.
By: /s/ Xxxx X. Xxxxx
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Name: Xxxx X. Xxxxx
Title: President & CEO
MMC/GATX PARTNERSHIP NO. I
By: Xxxxx Xxxxxxxx & Company,
as General Partner
By: /s/ Xxxxx X. Xxxxxxxx
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Name: Xxxxx X. Xxxxxxxx
Title: Secretary
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EXHIBIT A
TRANSACTION DOCUMENTS
