Exhibit 10.16.4
LOAN MODIFICATION AGREEMENT
This Loan Modification Agreement (this "Loan Modification Agreement") is
entered into as of January 25, 2004, by and between SILICON VALLEY BANK, a
California-chartered bank, with its principal place of business at 0000 Xxxxxx
Xxxxx, Xxxxx Xxxxx, Xxxxxxxxxx 00000 and with a loan production office located
at One Newton Executive Park, Suite 200, 0000 Xxxxxxxxxx Xxxxxx, Xxxxxx,
Xxxxxxxxxxxxx 00000, doing business under the name "Silicon Valley East"
("Bank") and GTC BIOTHERAPEUTICS, INC., a Massachusetts corporation with its
chief executive office located at 000 Xxxxxxxx Xxxxxxxxx, Xxxxx 000, Xxxxxxxxxx,
Xxxxxxxxxxxxx 00000 ("Borrower").
1. DESCRIPTION OF EXISTING INDEBTEDNESS AND OBLIGATIONS. Among other
indebtedness and obligations which may be owing by Borrower to Bank, Borrower is
indebted to Bank pursuant to a loan arrangement dated as of March 27, 2002,
evidenced by, among other documents, a certain Loan and Security Agreement dated
as of March 27, 2002, between Borrower and Bank, as amended by a Loan
Modification Agreement dated June 11, 2003, and by a Loan Modification Agreement
dated August 13, 2003 (as amended, the "Loan Agreement"). Capitalized terms used
but not otherwise defined herein shall have the same meaning as in the Loan
Agreement.
2. DESCRIPTION OF COLLATERAL. Repayment of the Obligations is secured by the
Collateral as described in the Loan Agreement (together with any other
collateral security granted to Bank, the "Security Documents").
Hereinafter, the Security Documents, together with all other documents
evidencing or securing the Obligations shall be referred to as the "Existing
Loan Documents".
3. DESCRIPTION OF CHANGE IN TERMS.
A. MODIFICATIONS TO LOAN AGREEMENT.
1. The Loan Agreement shall be amended by deleting the following
provision appearing in the first sentence of Section 2.1.6(a) thereof:
""2.1.6. 2003 EQUIPMENT ADVANCES.
(a) Availability. Through December 31, 2003
(the "2003 Equipment Availability End Date"), Bank
shall make Equipment Advances under the 2003 Committed
Equipment not exceeding the 2003 Committed Equipment
Line."
and inserting in lieu thereof the following:
""2.1.6. 2003 EQUIPMENT ADVANCES.
(a) Availability. Through June 30, 2004 (the
"2003 Equipment Availability End Date"), Bank shall
make Equipment Advances under the 2003 Committed
Equipment not exceeding the 2003 Committed Equipment
Line."
2. The Loan Agreement shall be amended by deleting the following,
appearing as Section 6.7(a) thereof, in its entirety:
"(a) LIQUIDITY. Borrower and its Subsidiaries
shall maintain unrestricted cash and marketable
securities less outstanding Obligations under the
Committed Revolving Line, of not less than Twenty-Five
Million Dollars ($25,000,000.00). If, at any time, the
Borrower shall fail to satisfy the terms of this
Section 6.7(a), then the Borrower shall immediately
deposit with the Bank an amount of unrestricted cash
equal to the outstanding Obligations hereunder, and
shall thereafter maintain unrestricted cash with the
Bank equal to the outstanding Obligations, as such
amount may increase or decrease."
and inserting in lieu thereof the following:
"(a) LIQUIDITY. Borrower and its Subsidiaries
shall maintain unrestricted cash and marketable
securities less outstanding Obligations under the
Committed Revolving Line, of not less than Eighteen
Million Dollars ($18,000,000.00). If, at any time, the
Borrower shall fail to satisfy the terms of this
Section 6.7(a), then the Borrower shall immediately
deposit with the Bank an amount of unrestricted cash
equal to the outstanding Obligations hereunder, and
shall thereafter maintain unrestricted cash with the
Bank equal to the outstanding Obligations, as such
amount may increase or decrease."
3. The Loan Agreement shall be amended by inserting the following
provision to appear as Section 6.9 thereof:
"6.9 MARKET APPROVAL. On or before February 28,
2004, the Borrower shall provide the Bank with a
evidence, acceptable to the Bank, in it reasonable
discretion, that the Borrower has submitted to the
European Medicines Evaluation Agency a market approval
application for its drug, rhATIII".
4. The Compliance Certificate appearing as EXHIBIT D to the Loan
Agreement is hereby replaced with the Compliance Certificate attached as EXHIBIT
A hereto.
4. FEES. The Borrower shall pay to Bank a modification fee equal to Twenty
Thousand Dollars ($20,000.00), which modification fee shall be due and payable
on the date hereof and shall be deemed fully earned as of the date hereof. The
Borrower shall also reimburse Bank for
- 2 -
all legal fees and expenses incurred in connection with this amendment to the
Existing Loan Documents.
5. RATIFICATION OF PLEDGE AGREEMENT. Borrower hereby ratifies, confirms and
reaffirms, all and singular, the terms and conditions of a certain Pledge
Agreement dated as of March 27, 2002, between Borrower and Bank, and
acknowledges, confirms and agrees that said Pledge Agreement shall remain in
full force and effect and the Collateral defined therein shall continue to
secure the Obligations under the Loan Agreement, as amended hereby.
6. RATIFICATION OF NEGATIVE PLEDGE. Borrower hereby ratifies, confirms and
reaffirms, all and singular, the terms and conditions of a certain Negative
Pledge Agreement dated as of March 27, 2002, between Borrower and Bank, and
acknowledges, confirms and agrees that said Negative Pledge Agreement shall
remain in full force and effect.
7. RATIFICATION OF PERFECTION CERTIFICATE. Borrower hereby ratifies, confirms
and reaffirms, all and singular, the terms and disclosures contained in a
certain Perfection Certificate dated as of March 27, 2002, between Borrower and
Bank, and acknowledges, confirms and agrees the disclosures and information
above Borrower provided to Bank in the Perfection Certificate has not changed,
as of the date hereof.
8. CONSISTENT CHANGES. The Existing Loan Documents are hereby amended wherever
necessary to reflect the changes described above.
9. RATIFICATION OF LOAN DOCUMENTS. Borrower hereby ratifies, confirms, and
reaffirms all terms and conditions of all security or other collateral granted
to the Bank, and confirms that the indebtedness secured thereby includes,
without limitation, the Obligations.
10. NO DEFENSES OF BORROWER. Borrower hereby acknowledges and agrees that
Borrower has no offsets, defenses, claims, or counterclaims against Bank with
respect to the Obligations, or otherwise, and that if Borrower now has, or ever
did have, any offsets, defenses, claims, or counterclaims against Bank, whether
known or unknown, at law or in equity, all of them are hereby expressly WAIVED
and Borrower hereby RELEASES Bank from any liability thereunder.
11. CONTINUING VALIDITY. Borrower understands and agrees that in modifying the
existing Obligations, Bank is relying upon Borrower's representations,
warranties, and agreements, as set forth in the Existing Loan Documents. Except
as expressly modified pursuant to this Loan Modification Agreement, the terms of
the Existing Loan Documents remain unchanged and in full force and effect.
Bank's agreement to modifications to the existing Obligations pursuant to this
Loan Modification Agreement in no way shall obligate Bank to make any future
modifications to the Obligations. Nothing in this Loan Modification Agreement
shall constitute a satisfaction of the Obligations. It is the intention of Bank
and Borrower to retain as liable parties all makers of Existing Loan Documents,
unless the party is expressly released by Bank in writing. No maker will be
released by virtue of this Loan Modification Agreement.
12. COUNTERSIGNATURE. This Loan Modification Agreement shall become effective
only when it shall have been executed by Borrower and Bank (provided, however,
in no event
- 3 -
shall this Loan Modification Agreement become effective until signed by an
officer of Bank in California).
This Loan Modification Agreement is executed as a sealed instrument under
the laws of the Commonwealth of Massachusetts as of the date first written
above.
BORROWER: BANK:
GTC BIOTHERAPEUTICS, INC., SILICON VALLEY BANK,
formerly known as Genzyme Transgenics Corporation doing business as
SILICON VALLEY EAST
By: /s/ Xxxx X. Xxxxx By: /s/ Xxxxxx Xxxxxxxxx
------------------------------------- --------------------------------------
Name: Xxxx X. Xxxxx Name: Xxxxxx Xxxxxxxxx
------------------------------------ --------------------------------------
Title: Senior Vice President Title: SCO
----------------------------------- -------------------------------------
SILICON VALLEY BANK
By: /s/ Xxxxx X. Xxxxxx
----------------------------------------
Name: Xxxxx X. Xxxxxx
--------------------------------------
Title: Division Manager
-------------------------------------
(signed in Santa Xxxxx County, California)
- 4 -
EXHIBIT A
COMPLIANCE CERTIFICATE
TO: SILICON VALLEY BANK
FROM: GTC BIOTHERAPEUTICS, INC.
The undersigned authorized officer of GTC Biotherapeutics, Inc. certifies
that under the terms and conditions of the Loan and Security Agreement between
Borrower and Bank (the "Agreement"), (i) Borrower is in complete compliance for
the period ending ____________ with all required covenants except as noted below
and (ii) all representations and warranties in the Agreement are true and
correct in all material respects on this date. Attached are the required
documents supporting the certification. The Officer certifies that these are
prepared in accordance with Generally Accepted Accounting Principles (GAAP)
consistently applied from one period to the next except as explained in an
accompanying letter or footnotes. The Officer acknowledges that no borrowings
may be requested at any time or date of determination that Borrower is not in
compliance with any of the terms of the Agreement, and that compliance is
determined not just at the date this certificate is delivered.
PLEASE INDICATE COMPLIANCE STATUS BY CIRCLING YES/NO UNDER "COMPLIES"
COLUMN.
REPORTING COVENANT REQUIRED COMPLIES
------------------ ------------------------------------------------
Quarterly financial statements with CC Within 5 days after filing with SEC Yes No
Annual (CPA Audited) With 5 days after filing with SEC Yes No
Projects approved by Board of Directors Annually, and as updated Yes No
FINANCIAL COVENANT REQUIRED ACTUAL COMPLIES
------------------ -------- ------ --------
MAINTAIN ON A QUARTERLY BASIS:
Minimum Liquidity $ 18,000,000.00 $ _______ Yes No
COMMENTS REGARDING EXCEPTIONS: See Attached. BANK USE ONLY
Sincerely,
Received by:
-----------------------
AUTHORIZED SIGNER
-----------------------
SIGNATURE
Date:
-----------------------
-----------------------
TITLE Verified:
--------------------
AUTHORIZED SIGNER
-----------------------
DATE Date:
-----------------------------
- 5 -
