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EXHIBIT 10.37
SECOND AMENDED AND RESTATED CONVERTIBLE
DEBT AGREEMENT
THIS SECOND AMENDED AND RESTATED CONVERTIBLE DEBT AGREEMENT dated as of
December 28, 1998 (this "AGREEMENT") is between Genzyme Transgenics Corporation,
a Massachusetts corporation ("GTC"), and Genzyme Corporation, a Massachusetts
corporation ("GENZYME").
RECITALS:
A. Genzyme and GTC entered into an Amended and Restated
Convertible Debt Agreement dated as of September 4, 1997 (as amended, the "PRIOR
AGREEMENT") whereby Genzyme provided (i) a revolving line of credit to GTC in
exchange for securities of GTC.
B. Genzyme and GTC desire to amend certain terms and conditions
relating to the revolving credit facility provided by Genzyme to GTC in
connection with the establishment of a new credit facility for GTC with Fleet
National Bank (the "BANK").
C. The Prior Agreement shall be superseded and replaced in its
entirety by the terms of this Agreement.
NOW, THEREFORE, in consideration of the mutual covenants set forth
herein and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, GTC and Genzyme agree as follows:
ARTICLE 1. REVOLVING CREDIT
1.1. LINE OF CREDIT. Subject to the terms and conditions set forth
herein, Genzyme shall make loans to GTC (the "REVOLVING CREDIT LOANS") from time
to time during the Revolving Credit Availability Period (but not more often than
twice in any month) in U.S. Dollars in immediately available funds in the
aggregate principal amount not exceeding the Revolving Credit Commitment. Within
the foregoing limits and subject to the terms and conditions set forth herein,
GTC may borrow, prepay and reborrow the Revolving Credit Loans.
1.2. THE NOTE.
(a) The Revolving Credit Loans shall be evidenced by an amended
and restated promissory note (the "REVOLVING CREDIT NOTE") made by GTC and
payable to the order of Genzyme, substantially in the form of EXHIBIT A annexed
hereto, in the principal amount equal to the initial Revolving Credit Commitment
with a final maturity of the Revolving Credit Maturity Date. The Revolving
Credit Note shall be dated on or before the date of the first Revolving Credit
Loan and shall have the blanks therein appropriately completed.
(b) Genzyme shall maintain records in which it shall record (i)
the amount of each Loan made hereunder, (ii) the amount of any principal or
interest due and payable or to become
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due and payable from GTC hereunder and (iii) the amount of any sum received by
Genzyme hereunder.
(c) The entries made in the records maintained pursuant to
paragraph (b) of this Section 1.2 shall be prima facie evidence of the existence
and amounts of the obligations recorded therein; provided that the failure of
Genzyme to maintain such account or any error therein shall not in any manner
affect the obligation of GTC to repay the Loans in accordance with the terms of
this Agreement.
1.3. USE OF PROCEEDS. GTC shall use all proceeds of the Revolving
Credit Loans to fund its current operations.
1.4. REQUESTS FOR REVOLVING CREDIT LOANS.
(a) To request a Revolving Credit Loan, GTC shall notify Genzyme
of such request by a written loan request signed by GTC and received by Genzyme
not later than 11:00 a.m., Boston, Massachusetts time, two (2) Business Days
before the date of the proposed Borrowing.
(b) Each such written loan request shall specify the following
information:
(i) the aggregate amount requested, which shall not be
less than $100,000;
(ii) the requested date of such Revolving Credit Loan,
which shall be a Business Day; and
(iii) the location and number of GTC's account to which
funds are to be disbursed.
Each loan request shall constitute a certification that the representations and
warranties contained herein were true and correct when made and are true and
correct as of the date of such Revolving Credit Loan and that no Default or
Event of Default has occurred and is continuing.
1.5. TERMINATION AND REDUCTION OF COMMITMENT.
(a) Unless previously terminated, the Revolving Credit Commitment
shall terminate at the close of business on the Revolving Credit Maturity Date.
(b) GTC may, at its option, at any time terminate, or from time to
time reduce, the Revolving Credit Commitment.
(c) Any conversion of the outstanding principal amount of any
Revolving Credit Loans pursuant to Section 1.7 shall reduce the Revolving Credit
Commitment to the extent of such converted principal amount.
(d) GTC shall notify Genzyme of any election to terminate or
reduce the Revolving Credit Commitment under paragraph (b) of this Section 1.5
at least three (3) Business Days prior to the effective date of such termination
or reduction, specifying such election and the effective date thereof. Each
notice delivered by GTC pursuant to this Section 1.5 shall be irrevocable;
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provided that a notice of termination of Revolving Credit Commitment delivered
by GTC may state that such notice is conditioned upon the effectiveness of other
credit facilities, in which case such notice may be revoked by GTC (by notice to
Genzyme on or prior to the specified effective date) if such condition is not
satisfied. Any termination or reduction of Revolving Credit Commitment shall be
permanent.
1.6. REPAYMENT OF LOANS.
(a) GTC hereby unconditionally promises to pay to Genzyme the then
unpaid principal amount of the Revolving Credit Loans on the Revolving Credit
Maturity Date. In addition, if following any reduction in the Revolving Credit
Commitment the aggregate principal amount of the Revolving Credit Loans shall
exceed the aggregate Revolving Credit Commitment, GTC shall immediately pay the
Revolving Credit Loans in an aggregate amount equal to such excess; provided
that any prepayments on account of reductions in the Revolving Credit Commitment
pursuant to Section 1.11 shall be made in accordance with Section 1.11(b)(iv).
(b) Conversions pursuant to Section 1.7 of outstanding principal
amounts shall be deemed to be repayments as of the date of such conversion.
1.7. CONVERSION TO GTC COMMON STOCK.
(a) GENZYME'S OPTION. All or part of any outstanding Loans and
accrued interest thereon, or any portion thereof, may, at Genzyme's option, be
converted at any time into shares of GTC's common stock, par value $.01 per
share (the "GTC COMMON STOCK"), at a conversion price equal to the average
closing price of GTC Common Stock over the 20 Trading Day period ending two (2)
Trading Days prior to the date of conversion (the "CONVERSION PRICE").
(b) GTC'S OPTION. Outstanding Loans and accrued interest thereon,
or any portion thereof, may, at the option of GTC, be converted at the
Conversion Price once each fiscal quarter into GTC Common Stock; provided,
however, such GTC conversion right may be exercised only to the extent
necessary, in the reasonable judgment of GTC, to maintain GTC's tangible net
worth as determined at the end of such fiscal quarter at the minimum amount
required for continued listing on the NASDAQ National Market.
(c) REGISTRATION RIGHTS. The shares of GTC Common Stock issuable
upon conversion shall be entitled to same registration rights as are applicable
to the other shares of Common Stock held by Genzyme, which rights are set forth
in Section 8 of the Series A Convertible Preferred Stock Purchase Agreement
dated May 1, 1993 between GTC and Genzyme.
1.8. TERM LOAN.
(a) MAKING THE TERM LOAN. Subject to Section 1.8(c), Genzyme
agrees that, subject to the terms and conditions of this Agreement, and in
reliance upon the representations, warranties and covenants contained herein and
provided no Default or Event of Default has occurred, at GTC's option, Genzyme
shall make a term loan (the "TERM LOAN" and with the Revolving Credit Loans,
collectively the "LOANS") to GTC for the purpose of repaying all outstanding
principal of the Revolving Credit Loans, on the Revolving Credit Maturity Date
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which Term Loan shall be in a principal amount equal to the outstanding balance
of the Revolving Credit Loans on the Revolving Credit Maturity Date, or in such
lesser amount as is specified in writing by GTC to Genzyme at least two (2)
Business Days prior to the Revolving Credit Maturity Date. Any portion of the
Revolving Credit Loans not repaid by the making of the Term Loan shall be due
and payable in full, along with all accrued interest thereon, on the Revolving
Credit Maturity Date. Genzyme shall make the Term Loan hereunder on the
Revolving Credit Maturity Date by crediting the amount thereof to the payment of
the Revolving Credit Note.
(b) TERM NOTE: REPAYMENT TERMS. The Term Loan shall be evidenced
by a note (the "TERM NOTE"), substantially in the form of EXHIBIT B annexed
hereto, payable to the order of Genzyme, duly executed on behalf of GTC, dated
the Revolving Credit Maturity Date. The Term Loan shall be payable in 12
installments consisting of 11 equal consecutive installments of principal, each
installment in an amount sufficient to fully amortize the original principal
amount of the Term Loan assuming quarterly principal payments over a seven-year
period, payable on each Payment Date together with interest payable in
accordance with Section 1.9(c) PLUS one final installment on the Term Loan
Maturity Date which shall include all unpaid principal, accrued interest and any
and all other amounts due and payable under the Term Note or hereunder.
(c) CONDITIONS INCLUDE ADDITIONAL COVENANTS. The commitment of
Genzyme to provide the Term Loan is subject to the agreement of GTC to certain
additional covenants in form and substance satisfactory to both Genzyme and GTC,
regarding the financial performance of GTC which covenants shall include
covenants establishing the minimum liquidity of GTC and its Subsidiaries.
1.9. INTEREST RATE.
(a) Unless and until converted to GTC Common Stock pursuant to
Section 1.7, each Loan shall bear interest at a rate per annum equal to the
Interest Rate.
(b) Notwithstanding the foregoing, (i) in the event that an Event
of Default shall have occurred under Section 4.1(a), all amounts which are not
paid when due shall bear interest beginning on the date such amounts were
originally due until paid in full at the Post-Default Rate and (ii) during the
period when any other Event of Default shall have occurred the principal of all
Loans hereunder shall bear interest, after as well as before judgment, at the
Post-Default Rate beginning on the date such Event of Default occurred until
such Event of Default is cured, in each case to the extent permitted by law.
(c) Accrued interest on each Loan shall be payable in arrears on
each Payment Date; provided that (i) interest accrued at the Post-Default Rate
shall be payable on demand, (ii) in the event of any repayment or prepayment in
full of any Term Loan, accrued interest on the principal amount repaid or
prepaid shall be payable on the date of such repayment or prepayment and (iii)
all accrued interest on Revolving Credit Loans shall be payable upon the
Revolving Credit Maturity Date or the earlier termination of the Revolving
Credit Commitment.
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(d) All interest hereunder shall be computed on the basis of a year of
360 days, and in each case shall be payable for the actual number of days
elapsed (including the first day but excluding the last day).
1.10. PAYMENTS GENERALLY.
(a) GTC shall make each payment required to be made by it
hereunder (whether of principal, interest or fees, or otherwise) prior to 12:00
noon, Boston, Massachusetts time, on the date when due, in immediately available
funds, without set-off or counterclaim. Any amounts received after such time on
any date may, in Genzyme's discretion be deemed to have been received on the
next succeeding Business Day for purposes of calculating interest thereon. All
such payments shall be made to Genzyme at its principal offices or at such of
its other offices in Cambridge, Massachusetts as shall be notified to the
relevant parties from time to time. If any payment hereunder shall be due on a
day that is not a Business Day, the date for payment shall be extended to the
next succeeding Business Day, and, in the case of any payment accruing interest,
interest thereon shall be payable for the period of such extension. All payments
hereunder shall be made in U.S. dollars.
(b) If at any time insufficient funds are received by and
available to Genzyme to pay fully all amounts of principal, interest and fees
then due hereunder, such funds shall be applied (i) first, to pay interest and
fees then due hereunder and (ii) second, to pay principal and then due
hereunder.
1.11. PREPAYMENT OF LOANS.
(a) OPTIONAL PREPAYMENTS. GTC shall have the right at any time and
from time to time to prepay the Loans in whole or in part. Each prepayment of
the Term Loan shall be applied in inverse order of maturity.
(b) MANDATORY PREPAYMENTS. GTC shall make prepayments of the Loans
hereunder (and reduce the Revolving Credit Commitment hereunder) as follows:
(i) EQUITY ISSUANCE. GTC agrees, on or prior to the
closing of any Equity Issuance by GTC or any of its Subsidiaries, to
deliver to Genzyme a statement certified by the chief financial officer
of GTC, in form and detail reasonably satisfactory to Genzyme, of the
estimated amount of the Net Cash Payments of such sale of securities
that will (on the date of such sale of securities) be received by GTC
or any of its Subsidiaries in cash.
(ii) SALE OF ASSETS. GTC agrees, on or prior to the
occurrence of any Disposition by GTC or any of its Subsidiaries, to
deliver to Genzyme a statement certified by the chief financial officer
of GTC, in form and detail reasonably satisfactory to Genzyme, of the
estimated amount of the Net Cash Payments of such Disposition that will
be received by GTC or any of its Subsidiaries in cash on the date of
such Disposition plus the amount, if any expected to be received
thereafter.
(iii) PAYMENT AND REDUCTION. The Revolving Credit
Commitment hereunder shall be reduced on the date of such receipt of
Net Cash Payments from any Equity
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Issuance or Disposition, or the Term Loan shall be prepaid, in an
aggregate amount equal to:
(1) until the aggregate Net Cash Payments of all
Dispositions and Equity Issuances from and after the date
hereof equal or exceed $20,000,000, no reduction of the
Revolving Credit Commitment or prepayment of the Term Loan is
required from the proceeds of Dispositions and Equity
Issuances;
(2) when the aggregate Net Cash Payments of all
Dispositions and Equity Issuances from and after the date
hereof are cumulatively equal to or greater than $20,000,000
but less than $40,000,000, the Revolving Credit Commitment
shall be reduced by, or the Term Loan shall be prepaid in an
amount equal to, $4,000,000; and
(3) when the aggregate Net Cash Payments of all
Dispositions and Equity Issuances from and after the date
hereof are cumulatively greater than $40,000,000, all Loans
shall be repaid in full and the Revolving Credit Commitment
shall terminate, and
GTC shall make prepayments of Revolving Credit Loans to the extent
required by Section 1.6(a). Prepayments of Loans and reductions of the
Revolving Credit Commitment shall be effected in each case in the
manner and to the extent specified in paragraph (iv) of this Section
1.11(b).
(iv) APPLICATION. Upon the occurrence of any of the events
described in paragraphs (i) or (ii) of this Section 1.11(b), (1) the
Revolving Credit Commitment shall be reduced as provided in paragraph
(iii) above and (2) GTC shall prepay (A) the Revolving Credit Loans to
the extent that the aggregate principal amount of such Revolving Credit
Loans exceeds the Revolving Credit Commitment as adjusted or in full if
required paragraph (ii)(3) above or (B) the Term Loan as provided in
such paragraphs and, in each case, the amount of the required
prepayment shall be applied to the prepayment of the Loans on the
ninetieth day after the date on which such Net Cash Proceeds are
received by GTC satisfying such conditions. Each prepayment of any Term
Loan shall be applied to the installments thereof in the inverse order
of maturity.
(iv) PREPAYMENTS ACCOMPANIED BY INTEREST. Prepayments
shall be accompanied by accrued interest to the extent required by
Section 1.9.
1.12. FEES.
(a) GTC agrees to pay to Genzyme a commitment fee, which shall
accrue at a rate equal to 0.125% on the daily average unused amount of the
respective Revolving Credit Commitment during the period from and including the
date hereof to but excluding the date on which such Revolving Credit Commitment
terminates. Accrued commitment fees shall be payable in arrears on each Payment
Date and, in respect of any Revolving Credit Commitment, on the date such
Revolving Credit Commitment terminate, commencing on the first such date to
occur after the date hereof. All commitment fees shall be computed on the basis
of a year of 360
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days and shall be payable for the actual number of days elapsed (including the
first day but excluding the last day).
(b) The fee payable under Section 1.12(a) may be paid by GTC in
cash or by issuance to Genzyme of warrants with a term of five (5) years for the
purchase of GTC Common Stock. The exercise price of each such warrant shall be
equal to the closing price of GTC Common Stock on the Trading Day immediately
preceding the date on which such warrant is issued as reported by the NASDAQ
National Market or such other principal securities exchange or market on which
GTC Common Stock is then traded. The number of shares of GTC Common Stock
subject to each such warrant shall be determined using the Black-Scholes
valuation method and using the per share exercise price of the warrant as the
value per share of GTC Common Stock for purposes of such calculation, and
Coopers & Xxxxxxx L.L.P. (or such other independent accounting firm mutually
agreeable to Genzyme and GTC) shall perform such calculation.
1.13. SUBORDINATION. Genzyme has executed a Guaranty dated as of the
date (the "GUARANTY") hereof in favor of the Bank. Pursuant to Section 7 of the
Guaranty the obligations of GTC to repay amounts accrued hereunder to Genzyme
are subordinated to GTC's obligations to the Bank.
1.14. SECURITY. The obligations of GTC hereunder are secured by that
certain Amended and Restated Security Agreement dated as of the date hereof (the
"Security Agreement') between Genzyme, GTC and certain subsidiaries of GTC, a
Mortgage and Security Agreement dated as of June 30, 1995 as amended by the
First Amendment to Mortgage and Security Agreement dated as of December 15,
1995, and the Second Amendment to Mortgage and Security Agreement dated as of
the date hereof between Genzyme, as mortgagee, and GTC as mortgagor
(collectively with the Security Agreement, the "COLLATERAL DOCUMENTS"). GTC's
obligations hereunder are guaranteed by certain of its subsidiaries pursuant to
that certain Amended and Restated Reimbursement Agreement dated as of the date
hereof among Genzyme, GTC and certain of GTC's subsidiaries named therein.
ARTICLE 2. REPRESENTATIONS AND WARRANTIES
2.1. REPRESENTATIONS, WARRANTIES AND COVENANTS OF GTC. GTC
represents, warrants and covenants to Genzyme as follows:
(a) GTC is a corporation duly organized, validly existing and in
good standing under the laws of the Commonwealth of Massachusetts with corporate
powers adequate for executing, delivering and performing its obligations under
this Agreement and the Notes.
(b) The execution, delivery and performance of this Agreement, the
Notes and any other documents delivered or to be delivered to Genzyme have been
duly authorized by all necessary corporate action on the part of GTC and this
Agreement, the Notes and all other necessary documents have been duly executed
and delivered and, as executed, constitute the valid and binding obligations of
GTC, enforceable against GTC in accordance with their respective terms.
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(c) The execution, delivery and performance of this Agreement, the
Notes and any other documents delivered or to be delivered to Genzyme do not and
will not conflict with or contravene any provision of the charter documents or
by-laws of GTC or any agreement, document, instrument, indenture or other
obligation of GTC, nor does it or will it result in a violation of or default
under any law, rule, regulation, order, writ, judgment, injunction, decree,
determination, award, indenture, agreement, lease or instrument now in effect
having applicability to GTC, or to any of its properties, nor does it or will it
result in any encumbrance on GTC or any of its properties, nor does it or will
it require any governmental or third party consents. As of the date hereof, GTC
is not in default under any provision under the Prior Agreement.
(d) The financial statements of GTC as at December 31, 1997 and
for the period then ended included in its filings under the Securities Exchange
Act of 1934, as amended (the "EXCHANGE ACT"), fairly present the financial
condition of GTC as of the dates thereof and its results of operations for the
periods then ended and have been prepared in accordance with generally accepted
accounting principles consistently applied.
(e) There is no litigation or proceeding pending before any court
or governmental or administrative agency or, to the knowledge of GTC,
threatened, or any basis therefor, that is required to be disclosed in GTC's
periodic filings under the Exchange Act and that has not been so disclosed.
(f) Since December 31, 1997, there has been no material adverse
change in the business, prospects, financial condition or operations of the GTC.
(g) The issuance and delivery to Genzyme of the shares of GTC
Common Stock issuable upon conversion of any amounts payable to Genzyme
hereunder in accordance with this Agreement have been duly authorized by all
necessary corporate action on the part of GTC. Said shares when so issued and
delivered in accordance with the provisions of this Agreement will be duly and
validly issued, fully paid and non-assessable.
2.2. REPRESENTATIONS, WARRANTIES AND COVENANTS OF GENZYME.
Genzyme represents, warrants and covenants to GTC as follows:
(a) Genzyme is a corporation duly organized, validly existing and
in good standing under the laws of the Commonwealth of Massachusetts with
corporate powers adequate for executing, delivering and performing its
obligations under this Agreement.
(b) This Agreement has been executed in the name and on behalf of
Genzyme by a duly elected officer of Genzyme, and the execution, delivery and
performance of this Agreement by Genzyme are subject to the ratification and
confirmation of this Agreement by Genzyme's Board of Directors. Genzyme shall
use its reasonable best efforts to obtain the aforementioned ratification and
confirmation as soon as practicable after the date hereof.
(c) The execution, delivery and performance of this Agreement do
not and will not conflict with or contravene any provision of the charter
documents or by-laws of Genzyme or any agreement, document, instrument or other
obligation of Xxxxxxx.
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(x) Xxxxxxx is acquiring the Notes and the GTC Common Stock
issuable upon conversion thereof (the "CONVERSION SHARES") for its own account
for investment and not with a view to, or for sale in connection with, any
distribution thereof, nor with any present intention of distributing or selling
the same; and Genzyme has no present or contemplated agreement, undertaking,
arrangement, obligation, indebtedness or commitment providing for the
disposition thereof.
(e) As the holder of approximately 41% of the outstanding GTC
Common Stock, Genzyme is familiar with GTC, its business and its personnel. The
officers of GTC have made available to Genzyme any and all information which it
has requested and have answered to Genzyme's satisfaction all inquiries made by
Genzyme. Genzyme has such knowledge and experience as is necessary to properly
evaluate the risks and merits of an investment in GTC.
(f) Genzyme acknowledges that the Notes and the Conversion Shares
shall not be sold or transferred unless either (i) they first shall have been
registered under the Securities Act of 1933, as amended (the "SECURITIES ACT"),
or (ii) GTC first shall have been furnished with an opinion of legal counsel,
reasonably satisfactory to GTC, to the effect that such sale or transfer is
exempt from the registration requirements of the Securities Act, and that the
Revolving Credit Note and the certificates representing the Conversion Shares
shall bear an appropriate legend to that effect.
ARTICLE 3. COVENANTS
3.1. COVENANTS OF GTC. On and after the date hereof and so long as
the Revolving Credit Commitment is outstanding and until all of the Loans and
all other amounts due hereunder from GTC to Genzyme shall have been paid in
full, GTC shall comply with the covenants set forth in Section 3.2 hereof as
well as the affirmative and negative covenants set forth in Articles 5 and 6 of
the Credit Agreement dated as of the date hereof between GTC and the Bank, as
amended (the "CREDIT AGREEMENT"), which covenants are hereby incorporated by
reference as if set forth herein in full, as such covenants may from time to
time be amended by the parties to the Credit Agreement or waived by the Bank;
provided that for purposes of this Section 3.1 and the covenants so
incorporated, "Borrower" shall mean GTC, "Lender" shall mean Genzyme and
"Agreement" shall mean this Agreement; provided further that the "Compliance
Certificate" (as defined in the Credit Agreement) required to be delivered to
Genzyme by GTC pursuant to this Section 3.1 as required by Section 5.1(c) of the
Credit Agreement shall include a computation demonstrating the amount of
Unfunded R&D and compliance with the covenants set forth in Section 3.2. All
other terms incorporated and not otherwise defined in this Section 3.1 shall
have the meanings set forth in the Credit Agreement. Such covenants shall be
deemed to survive with respect to the parties hereto notwithstanding the earlier
termination of the Credit Agreement.
3.2. ADDITIONAL FINANCIAL COVENANTS OF GTC. GTC agrees that, so
long as the Revolving Credit Commitment and until all of the Loans and all other
amounts due hereunder from GTC to Genzyme shall have been paid in full:
(a) for each of (i) the fiscal quarter ending on Xxxxx 00, 0000,
(xx) the two fiscal quarters ending on June 30, 1999, and (iii) the three fiscal
quarters ending on September 30,
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1999, GTC will not permit its Consolidated EBITDA for any such period as at the
last day of such period to exceed a loss of $5,000,000;
(b) for the four fiscal quarters ending on December 31, 1999, GTC
will not permit its Consolidated EBITDA as at the last day of such period to
exceed a loss of $2,000,000; and
(c) commencing with the fiscal quarter ending on March 31, 2000,
GTC will not, as at the last day of each fiscal quarter, permit its Consolidated
EBITDA for the period of four (4) consecutive fiscal quarters ending or most
recently ended prior to such date to be less than zero.
ARTICLE 4. EVENTS OF DEFAULT
4.1. EVENTS OF DEFAULT. Each of the events set forth below shall
constitute an "EVENT OF DEFAULT":
(a) A payment of principal and/or interest on any Loan is not
made within five (5) days after the date due;
(b) A representation or warranty of GTC in this Agreement shall
prove to have been incorrect when made or deemed made in any material respect;
(c) GTC shall be in default under any provision of this Agreement
and shall fail to remedy such default within 20 days of receiving written notice
thereof from Genzyme;
(d) Any bankruptcy, receivership, insolvency or reorganization
proceedings shall be instituted by GTC or any such proceedings shall be
instituted against GTC and not dismissed within 60 days or GTC shall make an
assignment for the benefit of creditors or consent to the appointment of a
receiver; or
(e) GTC shall fail to make any payment in excess of $10,000 in
respect of Indebtedness for money borrowed by GTC when such payment is due
(whether by scheduled maturity, required prepayment, acceleration, demand or
otherwise) or shall fail to perform or observe any provision of any agreement or
instrument relating to such Indebtedness, which failure has resulted in the
acceleration of such Indebtedness by the holder thereof.
4.2. REMEDIES. Following the occurrence and during the continuance
of any Event of Default, Genzyme may (i) decline to make any or all further
Loans (including conversion to the Term Loan in accordance with Section 1.8) and
(ii) by written notice to GTC, declare the entire unpaid principal of the Loans,
accrued interest and other amounts payable hereunder to be due and payable
without further demand, presentment, protest or further notice of any kind, all
of which are hereby waived by GTC; provided, however, that upon the occurrence
of an Event of Default described in Section 4.1(d), the Revolving Credit
Commitment and Genzyme's commitment to make the Term Loan shall immediately
terminate and all Loans, accrued interest and other amounts payable hereunder
shall be immediately due and payable, all without any demand or notices of any
kind. Thereafter, Genzyme may proceed to protect and enforce its rights by suit
in equity, action at law and/or other appropriate proceeding; and Genzyme may
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offset and apply toward the payment of such amounts or part thereof any
Indebtedness of it to GTC.
ARTICLE 5. DEFINITIONS
5.1. CERTAIN DEFINED TERMS. As used herein, the following terms shall
have the following meanings (all terms defined in this Section 5.1 or in other
provisions of this Agreement in the singular to have the same meanings when used
in the plural and visa versa.
"AGREEMENT" has the meaning assigned to such term in the introductory
paragraph of this Agreement.
"BANK" has the meaning assigned to such term in Section 1.13.
"BUSINESS DAY" means any day that is not a Saturday, Sunday or other
day on which commercial banks in Boston, Massachusetts are authorized or
required by law to remain closed.
"COLLATERAL DOCUMENTS" has the meaning assigned to such term in Section
1.14.
"CONSOLIDATED EBITDA" shall mean, for any period, the sum, for GTC, of
the following: (a) Consolidated Operating Income for such period (excluding any
amounts deducted for Unfunded R&D and reported by GTC to Genzyme on the
certificate required to be delivered by Section 3.1) PLUS (b) depreciation and
amortization, but only to the extent deducted in determining Consolidated
Operating Income for such period.
"CONSOLIDATED NET INCOME" shall mean, for any period, net income (or
loss) for GTC and its Subsidiaries (determined in accordance with GAAP);
provided, however, that Consolidated Net Income shall not include amounts
included in computing net income (or loss) in respect of (a) the write-up of
assets (other than marketable investments) after December 31, 1996 and (b)
extraordinary and non-recurring gains or losses.
"CONSOLIDATED OPERATING INCOME" shall mean, for any period, the
Consolidated Net Income of GTC for such period; provided, however, that, to the
extent the following items have been included in determining Consolidated Net
Income, they shall NOT be considered in computing Consolidated Operating Income:
provision for income taxes, interest expense, equity in the operating results of
unconsolidated Subsidiaries and other affiliates and non-operating, non-cash
items including, but not limited to, write-off of acquired technology or
acquired, in-process research and development which, in accordance with GAAP,
must be charged to income.
"CONVERSION PRICE" has the meaning assigned to such term in Section
1.7(a).
"CONVERSION SHARES" has the meaning assigned to such term in Section
2.2(d).
"CREDIT AGREEMENT" has the meaning assigned to such term in Section
3.1.
"DEFAULT" means an event or act which with the giving of notice or the
passage of time, or both, would become an Event of Default.
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"DISPOSITION" means any sale, assignment, transfer or other disposition
of any property (whether now owned or hereafter acquired) by GTC or any of its
Subsidiaries to any other Person excluding (a) the granting of Liens to Genzyme,
(b) any sale, assignment, transfer or other disposition of (i) any property sold
or disposed of in the ordinary course of business and on ordinary business
terms, (ii) any property no longer used or useful in the business of GTC and
(iii) any collateral under and as defined in the Collateral Documents pursuant
to an exercise of remedies of the Guarantor thereunder and (c) any licensing of
intellectual property of the Borrower in the ordinary course of business.
"DISPOSITION INVESTMENT" means, with respect to any Disposition, any
promissory notes or other evidences of indebtedness or investments received by
GTC or any of its Subsidiaries in connection with such Disposition.
"EQUITY ISSUANCE" means any issuance or sale of equity securities by a
Credit Party to any Person other than (i) an Affiliate of such Credit Party or
(ii) the Guarantor; EXCLUDING the issuance or sale of equity securities under an
employee benefit plan approved by the stockholders of such Credit Party.
"EXCHANGE ACT" has the meaning assigned to such term in Section 2.1(e).
"EVENT OF DEFAULT" has the meaning assigned to such term in Section
4.1.
"FORCE MAJEURE" has the meaning assigned to such term in Section 6.11.
"GAAP" means generally accepted accounting principles applied on a
basis consistent with those that, in accordance with the last sentence of
Section 5.2(a), are to be used in making the calculations for purposes of
determining compliance with this Agreement.
"GENZYME" has the meaning assigned to such term in the introductory
paragraph of this Agreement.
"GTC" has the meaning assigned to such term in the introductory
paragraph of this Agreement.
"GTC COMMON STOCK" has the meaning assigned to such term in Section
1.7(a).
"INDEBTEDNESS" means, in respect of any Person, all obligations,
contingent and otherwise, that in accordance with GAAP should be classified as
liabilities, including without limitation (i) all debt obligations, (ii) all
liabilities secured by Liens, (iii) all guarantees and (iv) all liabilities in
respect of bankers' acceptances or letters of credit.
"INTEREST RATE" means, for all Loans outstanding, the lesser (where
applicable) of respective interest rates indicated below for the periods set
forth below:
PERIOD INTEREST RATES
------ --------------
From the date hereof to
and including April 1, 1999 8.0% or Prime Rate
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From April 2, 1999 to
and including April 1, 2000 8.5% or Prime Rate PLUS 0.5%
From April 2, 2000 to
and including April 1, 2001 9.0% or Prime Rate PLUS 1.0%
From April 2, 2001 to
and including April 1, 2002 9.5% or Prime Rate PLUS 1.5%
From April 2, 2002 to and
including the Term Loan Maturity Date 10.0% or Prime Rate PLUS 2.0%,
but, in any event, not in excess of the maximum amount permitted by law.
"LIENS" means any encumbrance, mortgage, pledge, hypothecation, charge
restriction or other security interest of any kind securing any obligation of
any Person.
"LOANS" has the meaning assigned to such term in Section 1.8.
"NET CASH PAYMENTS" means,
(a) with respect to Equity Issuance, the aggregate amount
of all cash proceeds received by GTC or any of its Subsidiaries
therefrom less all legal, accounting, underwriting and similar fees and
expenses incurred in connection therewith.
(b) with respect to any Disposition, the aggregate amount
of all cash payments received by GTC or any of its Subsidiaries
directly or indirectly in connection with such Disposition, whether at
the time of such Disposition or after such Disposition under deferred
payment arrangements or investments entered into or received in
connection with such Disposition (including, without limitation,
Disposition Investments); provided that
(i) Net Cash Payments shall be net of (I) the
amount of any legal, accounting, title, transfer and recording
tax expenses, commissions and other fees and expenses payable
by GTC or any of its Subsidiaries in connection with such
Disposition and (II) any Federal, state and local income or
other taxes estimated to be payable by GTC or any of its
Subsidiaries as a result of such Disposition net of any
available tax credits and carryforwards, but only to the
extent that such estimated taxes are in fact paid to the
relevant Federal, state or local governmental authority within
12 months of the date of receipt of cash payments relating to
such Disposition; and
(ii) Net Cash Payments shall be net of any
repayments by GTC or any its of Subsidiaries of Indebtedness
to the extent that (I) the holder of such Indebtedness
requires repayment of such Indebtedness or (II) the transferee
of (or holder of a Lien on) such property requires that such
Indebtedness be repaid as a condition to the purchase of such
property.
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"NOTES" means the Revolving Credit Note and the Term Note.
"PAYMENT DATE" means the last Business Day of March, June, September
and December in each year, the first of which shall be the first such day after
the date of this Agreement.
"PERSON" means any natural person, corporation, limited liability
company, trust, joint venture, association, company, partnership, governmental
authority or other entity.
"POST-DEFAULT RATE" means, a rate per annum equal to the applicable
Interest Rate PLUS 4%
"PRIME RATE" means for any day the rate from time to time equal to the
highest rate of interest reported in The Wall Street Journal as the prime rate
or in the event that such publication is not available such other or similar
rate selected by Genzyme representing the prime rate charged by major banking
institutions.
"PRIOR AGREEMENT" has the meaning assigned to such term in Recital A of
this Agreement.
"REVOLVING CREDIT AVAILABILITY PERIOD" means the period from and
including the date hereof to the Revolving Credit Maturity Date.
"REVOLVING CREDIT COMMITMENT" means $6,300,000 as such commitment may
be reduced from time to time pursuant to Sections 1.5 and 1.11.
"REVOLVING CREDIT LOANS" has the meaning assigned to such term in
Section 1.1.
"REVOLVING CREDIT MATURITY DATE" means the last Business Day in March
2000.
"REVOLVING CREDIT NOTE" has the meaning assigned to such term in
Section 1.2.
"SUBSIDIARY" means, with respect to any Person (the "PARENT") at any
date, any corporation, limited liability company, partnership, association or
other entity the accounts of which would be consolidated with those of the
parent in the parent's consolidated financial statements if such financial
statements were prepared in accordance with GAAP as of such date, as well as any
other corporation, limited liability company, partnership, association or other
entity (a) of which securities or other ownership interests representing more
than 50% of the ordinary voting power or, in the case of a partnership, more
than 50% of the general partnership interests are, as of such date, owned,
controlled or held, or (b) that is, as of such date, otherwise Controlled, by
the parent or one or more subsidiaries of the parent or by the parent and one or
more subsidiaries of the parent. References herein to "SUBSIDIARIES" shall,
unless the context requires otherwise, be deemed to be references to
Subsidiaries of the Borrower.
"SECURITIES ACT" has the meaning assigned to such term in Section
2.2(f).
"TRADING DAY" means any day on which GTC Common Stock is traded for any
period on the NASDAQ National Market or on the principal securities exchange or
market on which the GTC Common Stock is then traded.
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"TERM LOAN" has the meaning assigned to such term in Section 1.8(a).
"TERM LOAN MATURITY DATE" means the last Business Day in March 2003.
"TERM NOTE" has the meaning assigned to such term in Section 1.8(b).
"UNFUNDED R&D" means, for any period, (a) the amount of expenses for
research and development costs for such period MINUS (b) revenues earned for
such period attributable to contracts for the performance of research and
development.
5.2. ACCOUNTING TERMS AND DETERMINATIONS.
(a) Except as otherwise expressly provided herein, all accounting
terms used herein shall be interpreted, and all financial statements and
certificates and reports as to financial matters required to be delivered to
Genzyme hereunder shall (unless otherwise disclosed to Genzyme in writing at the
time of delivery thereof in the manner described in subsection (b) below) be
prepared, in accordance with GAAP applied on a basis consistent with those used
in the preparation of the latest annual or quarterly financial statements
furnished to the Lender hereunder (which, prior to the delivery of the first
annual or quarterly financial statements under Section 3.1 hereof, shall mean
the audited financial statements as at December 31, 1996).
(b) To enable the ready and consistent determination of compliance
with the covenants set forth in Article 5, GTC will not change its fiscal year.
5.3. SECTION REFERENCES. References to particular sections are
references to sections of this Agreement unless otherwise indicated.
ARTICLE 6. MISCELLANEOUS
6.1. REPLACEMENT OF PRIOR AGREEMENT. Upon the execution and
delivery of this Agreement, Article 1 (except Sections 1.10 and 1.11) of the
Prior Agreement shall be superseded and replaced by the terms of this Agreement
and the remainder of the Prior Agreement shall remain in full force and effect.
6.2. EXPENSES. GTC shall pay all costs and expenses incurred by
Genzyme in connection with the preparation, execution, administration and
enforcement of this Agreement and the Notes, including reasonable attorneys'
fees.
6.3. NOTICES. All notices, requests and other communications to GTC
or Genzyme hereunder shall be in writing (including telecopy or similar
electronic transmissions), shall refer specifically to this Agreement and shall
be personally delivered or sent by telecopy or other electronic facsimile
transmission (with conformation of receipt and a hard copy sent by mail), by the
next business day service of a nationally recognized overnight courier or by
registered mail or certified mail, return receipt requested, postage prepaid, in
each case to the respective address specified below (or to such address as may
be specified in writing to the other party hereto in accordance with this
Section 6.3):
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To GTC:
Genzyme Transgenics Corporation
Xxx Xxxxxxxx Xxxx
Xxxxxxxxxx, XX 00000
Attention: President
Facsimile (000) 000-0000
To Genzyme:
Genzyme Corporation
Xxx Xxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Attention: Chief Legal Officer
Facsimile (000) 000-0000
Any notice or communication given in conformity with this Section 6.3
shall be deemed to be effective when received by the addressee, if delivered by
hand or facsimile, the next Business Day after mailing, if mailed via an
overnight courier, and seven (7) days after mailing, if sent by registered or
certified mail.
6.4. ENTIRE AGREEMENT. This Agreement, together with any agreements
referenced herein, constitutes, on and as of the date hereof, the entire
agreement of GTC and Genzyme with respect to the subject matter hereof, and all
prior or contemporaneous understandings or agreements, whether written or oral,
between GTC and Genzyme with respect to such subject matter are hereby
superseded in their entirety.
6.5. NO IMPLIED WAIVERS; RIGHTS CUMULATIVE. No failure on the part
of GTC or Genzyme to exercise and no delay in exercising any right, power,
remedy or privilege under this Agreement, or provided by statute or at law or in
equity or otherwise, including, without limitation, the right or power to
terminate this Agreement, shall impair, prejudice or constitute a waiver of any
such right, power, remedy or privilege or be construed as a waiver of any breach
of this Agreement or as an acquiescence therein, nor shall any single or partial
exercise of any such right, power, remedy or privilege preclude any other or
further exercise thereof or the exercise of any other right, power, remedy or
privilege.
6.6. AMENDMENTS. No amendment, modification, waiver, termination or
discharge of any provision of this Agreement, nor consent to any departure by
GTC or Genzyme therefrom, shall in any event be effective unless the same shall
be in writing specifically identifying this Agreement and the provision intended
to be amended, modified, waived, terminated or discharged and signed by the
party against whom enforcement of such amendment is sought, and each such
amendment, modification, waiver, termination or discharge shall be effective
only in the specific instance and for the specific purpose for which given. No
provision of this Agreement shall be varied, contradicted or explained by any
oral agreement, course of dealing or performance or any other matter not set
forth in an agreement in writing and signed by the party against whom
enforcement of such variation, contradiction or explanation is sought.
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6.7. SUCCESSORS AND ASSIGNS. The terms and provisions of this
Agreement shall inure to the benefit of, and be binding upon, GTC, Genzyme and
their respective successors and assigns. Neither GTC nor Genzyme may assign or
transfer any of the respective rights or interests, nor delegate any of their
respective obligations, hereunder, without prior written consent from the other
party, except that either party may fully assign its rights and interests and
delegate its obligations hereunder (a) to an affiliate if such affiliate assumes
all of the obligations of such party hereunder in writing and this Agreement
remains binding upon the assigning party or (b) to any entity which acquires all
or substantially all of the assets of the assigning party or which is the
surviving entity in a merger or consolidation with such party, if such entity
assumes all of the obligations of such party hereunder in writing.
6.8. SURVIVAL. All covenants, agreements, representations and
warranties made by GTC herein, and in any certificates or other instruments
delivered in connection with or pursuant to this Agreement, shall be considered
to have been relied upon by Genzyme and shall survive the execution and delivery
of this Agreement and the making of any Loans, regardless of any investigation
made by any such other party or on its behalf and notwithstanding that Genzyme
may have had notice or knowledge of any Default or incorrect representation or
warranty at the time any credit is extended hereunder, and shall continue in
full force and effect so long as the principal of or any accrued interest on any
Loan or any fee or any other amount payable under this Agreement is outstanding
and so long as the Revolving Credit Commitment has not expired or terminated.
6.9. GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the Commonwealth of Massachusetts.
6.10. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY
JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING
TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY (WHETHER BASED ON
CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO
REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY
OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK
TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER
PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER
THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 6.10.
6.11. FORCE MAJEURE. GTC and Genzyme shall each be excused for any
failure or delay in performing any of its respective obligations under this
Agreement, if such failure or delay is caused by Force Majeure. For purposes of
this Agreement, "FORCE MAJEURE" shall mean any act of God, accident, explosion,
fire, storm, earthquake, flood, drought, peril of the sea, riot, embargo, war or
foreign, federal, state or municipal order of general application, seizure,
requisition or allocation, any failure or delay of transportation, shortage of
or inability to obtain supplies, equipment, fuel or labor or any other
circumstances or events beyond the reasonable control of the party relying upon
such circumstances or events.
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6.12. FURTHER ASSURANCES. Each of GTC and Genzyme agrees to duly
execute and deliver, or cause to be duly executed and delivered, such further
instruments and do and cause to be done such further acts and things, including,
without limitation, the execution of such additional assignments, agreements,
documents and instruments, that may be necessary or as the other party hereto
may at any time and from time to time reasonably request in connection with this
Agreement or to carry out more effectually the provisions and purposes of, or to
better assure and confirm unto such other party its rights and remedies under,
this Agreement.
6.13. SEVERABILITY. If any provision hereof should be held invalid,
illegal or unenforceable in any respect in any jurisdiction, then, to the
fullest extent permitted by law, (a) all other provisions hereof shall remain in
full force and effect in such jurisdiction and shall be liberally construed in
order to carry out the intentions of the parties hereto as nearly as may be
possible and (b) such invalidity, illegality or unenforceability shall not
affect the validity, legality or enforceability of such provision in any other
jurisdiction. To the extent permitted by applicable law, GTC and Genzyme hereby
waive any provision of law that would render any provision hereof prohibited or
unenforceable in any respect.
6.14. HEADINGS. Headings used herein are for convenience only and
shall not in any way affect the construction of, or be taken into consideration
in interpreting, this Agreement.
6.15. EXECUTION IN COUNTERPARTS. This Agreement may be executed in
any number of counterparts, each of which counterparts, when so executed and
delivered, shall be deemed to be an original, and all of which counterparts,
taken together, shall constitute one and the same instrument.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as an instrument under seal in their respective corporate names by
their respective authorized representatives as of the date first set forth
above.
GENZYME TRANSGENICS CORPORATION
By: /s/ Xxxx X. Xxxxx
Xxxx X. Xxxxx
Vice President and Chief Financial Officer
GENZYME CORPORATION
By: /s/ Xxxx Xxxxxx
Xxxx Xxxxxx
Treasurer
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EXHIBIT A
---------
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT"), OR APPLICABLE STATE SECURITIES LAWS AND MAY NOT BE
TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS IT HAS BEEN REGISTERED UNDER THE ACT
AND SUCH LAWS OR (1) REGISTRATION UNDER APPLICABLE STATE SECURITIES LAWS IS NOT
REQUIRED AND (2) AN OPINION OF COUNSEL SATISFACTORY TO THE BORROWER IS FURNISHED
TO THE BORROWER TO THE EFFECT THAT REGISTRATION UNDER THE ACT IS NOT REQUIRED.
AMENDED AND RESTATED CONVERTIBLE REVOLVING CREDIT NOTE
$6,300,000 December 28, 0000
Xxxxxxxxx, Xxxxxxxxxxxxx
FOR VALUE RECEIVED, Genzyme Transgenics Corporation, a Massachusetts
corporation (the "BORROWER"), hereby unconditionally promises to pay to the
order of Genzyme Corporation (the "LENDER"), at the place and times provided in
that certain Second Amended and Restated Convertible Debt Agreement dated of
even date herewith (as amended from time to time, the "AGREEMENT") between the
Borrower and the Lender, the principal sum of
SIX MILLION THREE HUNDRED THOUSAND DOLLARS
($6,300,000)
or such lesser amount as may be then outstanding hereunder, in lawful money of
the United States of America, as provided in the Agreement, and in immediately
available funds, and to pay interest on the unpaid principal balance hereof from
time to time outstanding, in like money, for the period commencing on the date
hereof until paid in full, at the Interest Rate on the dates provided in the
Agreement. Each change in the Interest Rate based upon the Prime Rate shall take
effect simultaneously with the corresponding change in such Prime Rate. All
amounts outstanding which are not paid when due and during the period when any
Event of Default shall have occurred and be continuing for a period of 30 or
more days, the principal of all Loans hereunder shall bear interest, after as
well as before judgment, at the Post-Default Rate.
This Amended and Restated Convertible Revolving Credit Note is
subordinated to certain indebtedness of the Borrower to Fleet National Bank (the
"BANK") as set forth in a Guaranty dated as of the date hereof made by the
Lender in favor of the Bank.
This Amended and Restated Convertible Revolving Credit Note is the
"Revolving Credit Note" referred to in the Agreement, and is entitled to the
benefits of and its subject to the provisions of the Agreement but neither this
reference to the Agreement nor any provision thereof shall affect or impair the
absolute and unconditional obligation of the undersigned maker of this Amended
and Restated Convertible Revolving Credit Note to pay the principal of and
interest on this Amended and Restated Convertible Revolving Credit Note as
herein provided. All capitalized terms used herein and not specifically defined
shall have the meanings given to them in the Agreement.
21
Each Loan made by the Lender pursuant to the Agreement and all payments
made on account of principal and interest shall be recorded by the Lender in its
records and prior to any transfer hereof, endorsed on the grid schedule attached
hereto. The Borrower acknowledges that, notwithstanding the state of the grid
schedule hereto, the Lender's records with respect to Loans and payments made
hereunder shall constitute, in the absence of manifest error, presumptive
evidence of the Borrower's indebtedness from time to time under the Agreement
and hereunder.
Subject to the terms of the Agreement, the outstanding principal and
interest payable hereunder shall be convertible into shares of Common Stock,
$.01 par value per share, of the Borrower at the Conversion Price set forth in
Section 1.7 thereof.
This Amended and Restated Convertible Revolving Credit Note may be
prepaid at any time without penalty or fee as provided in the Agreement.
Upon the occurrence of an Event of Default specified in Section 4.1 of
the Agreement, the holder hereof may declare the entire outstanding indebtedness
evidenced by this Amended and Restated Convertible Revolving Credit Note, with
interest accrued thereon, to be immediately due and payable as provided in the
Agreement.
PRESENTMENT, DEMAND, PROTEST AND NOTICE OF DISHONOR AND NON-PAYMENT ARE
HEREBY WAIVED BY THE UNDERSIGNED.
This Amended and Restated Convertible Revolving Credit Note shall be
governed by the laws of the Commonwealth of Massachusetts and shall have the
effect of an instrument under seal.
GENZYME TRANSGENICS CORPORATION
By
---------------------------------------
Xxxx X. Xxxxx
Vice President and
Chief Financial Officer
22
GRID SCHEDULE
TO AMENDED AND RESTATED
CONVERTIBLE REVOLVING CREDIT NOTE
Dated: December __, 1998
Date of Amount Amount of Amount of Outstanding Notation
Advance/Payment of Advance Principal Paid Interest Paid Credit Made By
23
EXHIBIT B
---------
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT"), OR APPLICABLE STATE SECURITIES LAWS AND MAY NOT BE
TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS IT HAS BEEN REGISTERED UNDER THE ACT
AND SUCH LAWS OR (1) REGISTRATION UNDER APPLICABLE STATE SECURITIES LAWS IS NOT
REQUIRED AND (2) AN OPINION OF COUNSEL SATISFACTORY TO THE BORROWER IS FURNISHED
TO THE BORROWER TO THE EFFECT THAT REGISTRATION UNDER THE ACT IS NOT REQUIRED.
CONVERTIBLE TERM NOTE
$[__________] March 31, 0000
Xxxxxxxxx, Xxxxxxxxxxxxx
FOR VALUE RECEIVED, Genzyme Transgenics Corporation, a Massachusetts
corporation (the "BORROWER"), hereby unconditionally promises to pay to the
order of Genzyme Corporation (the "LENDER") at the place and times provided in
that certain Second Amended and Restated Convertible Debt Agreement dated as of
December __, 1998 (as amended from time to time, the "AGREEMENT"), between the
Borrower and the Lender, the principal sum of
[________________________________________________] DOLLARS ($__________)
or, if less, the aggregate unpaid principal amount of the Term Loan made by the
Lender to the Borrower pursuant to the Agreement, in lawful money of the United
States of America, as provided in the Agreement, and in immediately available
funds, and to pay interest on the unpaid principal balance hereof from time to
time outstanding, in like money, for the period commencing on the date hereof
until paid in full, at the Interest Rate on the dates provided in the Agreement.
Each change in the Interest Rate based upon the Prime Rate shall take effect
simultaneously with the corresponding change in such Prime Rate. Principal on
this Convertible Term Note shall be payable quarterly in arrears in 12
consecutive quarterly installments consisting of 11 equal consecutive quarterly
installments of principal in an amount sufficient to fully amortize the original
principal amount of the Term Loan in quarterly payments over a seven-year
period, beginning on June 30, 2000, and payable on each Payment Date thereafter,
PLUS one final installment on March 31, 2003 which shall include all unpaid
principal, unpaid and accrued interest and any and all other amounts due and
payable hereunder and under the Agreement, and together with interest thereon
from the date hereof payable at the Interest Rate in arrears on each Payment
Date. All amounts outstanding which are not paid when due and during the period
when any Event of Default shall have occurred and be continuing for a period of
30 or more days, the principal of all Loans hereunder shall bear interest, after
as well as before judgment, at the Post-Default Rate.
This Convertible Term Note is subordinated to certain indebtedness of
the Borrower to Fleet National Bank (the "BANK") as set forth in a Guaranty
dated as of December __, 1998 made by the Lender in favor of the Bank.
24
This Convertible Term Note is the "Term Note" referred to in the
Agreement, and is entitled to the benefits of and its subject to the provisions
of the Agreement but neither this reference to the Agreement nor any provision
thereof shall affect or impair the absolute and unconditional obligation of the
undersigned maker of this Convertible Term Note to pay the principal of and
interest on this Convertible Term Note as herein provided. All capitalized terms
used herein and not specifically defined shall have the meanings given to them
in the Agreement.
All payments made on account of principal and interest shall be
recorded by the Lender in its records. The Borrower acknowledges that the
Lender's records with respect to payments made hereunder shall constitute, in
the absence of manifest error, presumptive evidence of the Borrower's
indebtedness from time to time under the Agreement and hereunder.
Subject to the terms of the Agreement, the outstanding principal and
interest payable hereunder shall be convertible into shares of Common Stock,
$.01 par value per share, of the Borrower at the Conversion Price set forth in
Section 1.7 thereof.
This Convertible Term Note may be prepaid at any time without penalty
or fee as provided in the Agreement.
Upon the occurrence of an Event of Default specified in Section 4.1 of
the Agreement, the holder hereof may declare the entire outstanding indebtedness
evidenced by this Convertible Term Note, with interest accrued thereon, to be
immediately due and payable as provided in the Agreement.
PRESENTMENT, DEMAND, PROTEST AND NOTICE OF DISHONOR AND NON-PAYMENT ARE
HEREBY WAIVED BY THE UNDERSIGNED.
This Convertible Term Note shall be governed by the laws of the
Commonwealth of Massachusetts and shall have the effect of an instrument under
seal.
GENZYME TRANSGENICS CORPORATION
By
------------------------------------------
Xxxx X. Xxxxx
Vice President and Chief Financial Officer
