EXHIBIT 10.14.1
SECOND AMENDMENT TO LOAN AGREEMENT
THIS SECOND AMENDMENT TO LOAN AGREEMENT made this 19th day of March, 2002
is to that certain Loan Agreement dated October 6, 2000 as amended by that
Renewal Agreement dated July 17, 2001, and that First Amendment to Loan
Agreement dated as of December 19, 2001, (as amended, the "Loan Agreement") by
and between LIPOSCIENCE, INC. formerly known as LIPOMED, INC., a Delaware
corporation (the "Borrower") and FIRST UNION NATIONAL BANK, a national banking
association with offices in Raleigh, North Carolina, (the "Bank").
RECITALS:
A. The Bank and the Borrower entered into the Loan Agreement providing for
a loan to the Borrower evidenced by a Promissory Note dated October 6, 2000 in
the principal amount of $2,000,000.00, as renewed by that Renewal Agreement
dated July 17, 2001, as amended by Modification and Estoppel Agreement dated
February 19, 2001 and as further amended and restated by that Amended, Restated
and Substituted Promissory Note in the principal amount of $5,000,000.00 dated
of even date herewith (the "Note") and secured by a Security Agreement dated
October 6, 2000, as amended by First Amendment to Security Agreement dated as of
December 19, 2001 and Second Amendment to Security Agreement dated of even date
herewith (as amended, the "Security Agreement").
B. The Borrower has requested that the Bank increase the amount of the
Loan and decrease the interest rate accruing on the Loan.
C. The Bank has agreed to the Borrower's request upon the condition that
the Loan Agreement be amended as provided herein.
NOW, THEREFORE, the parties agree that the Loan Agreement is amended as
follows:
1. All references in the Loan Agreement to the loan amount are hereby
modified to reflect that the Loan amount is $5,000,000.00 rather than
$2,000,000.00.
2. That Section in the Loan Agreement entitled "Loan" is hereby modified
to provide that Bank shall have no obligation to make a disbursement following
June 30, 2003 unless Bank agrees otherwise in writing in its sole discretion.
3. That Section of the Loan Agreement entitled "Maturity Date" is hereby
revised in its entirety as follows:
MATURITY DATE. The principal balance of the Loan, plus all accrued
interest, shall be due and payable on or before June 30, 2003.
4. That Section of the Loan Agreement entitled "Financial Covenants" is
hereby amended as follows:
a) The covenant requiring Borrower to maintain a specified amount
in liquid assets is hereby deleted.
b) The following covenants are hereby added:
i) CURRENT RATIO. Borrower shall, at all times, maintain a
Current Ratio of not less than 2.00 to 1.00. "Current Ratio" shall
mean the ratio of Current Assets to Current Liabilities. "Current
Assets" and "Current Liabilities" shall mean all assets and
liabilities which are so classified in accordance with generally
accepted accounting principles applied on a consistent basis.
ii) TOTAL LIABILITIES TO TANGIBLE NET WORTH RATIO. Borrower
shall at all times, maintain a ratio of Total Liabilities to Tangible
Net Worth of not more than 1.00 to 1.00. "Total Liabilities" shall
mean all liabilities of Borrower, including debt fully subordinated to
Bank, capitalized leases and all reserves for deferred taxes and other
deferred sums appearing on the liabilities side of a balance sheet, in
accordance with generally accepted accounting principles applied on a
consistent basis. "Tangible Net Worth" shall mean total assets minus
Total Liabilities. For purposes of this computation, the aggregate
amount of any intangible assets of Borrower including, without
limitation, goodwill, franchises, licenses, patents, trademarks, trade
names, copyrights, service marks and brand names, shall be subtracted
from total assets.
5. A new paragraph is hereby added to the Loan Agreement which shall read
in its entirety as follows:
AVAILABILITY FEE. Borrower shall pay to the Bank on the fifteenth day
of each of January, April, July and October an Availability Fee equal
to one-fourth of one percent (.25%) multiplied times the average daily
unused available credit under the Note and the Loan Agreement for the
preceding calendar quarter. In the event that this fee is calculated
over a period which is less than an entire quarter, such fee shall be
prorated over that portion of the quarter for which the fee is
applicable.
6. Schedule A to the Loan Agreement is hereby deleted in its entirety and
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Schedule A to this Second Amendment is hereby substituted in lieu thereof.
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7. The Borrower hereby agrees to pay all pre- and post-closing expenses
incurred by the Bank or the Borrower in connection with this modification,
including legal fees in a reasonable amount incurred by the Bank in connection
with the modification of the Loan and the enforcement of the Bank's rights under
the Loan Documents, in an amount not to exceed $5,000 (including any amounts
payable in respect of Borrower's preexisting obligation to pay Bank's
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legal expenses in connection with previous modifications). Any such amounts paid
initially by the Bank shall be reimbursed to the Bank upon demand.
8. Borrower represents and confirms to Bank that (i) to the best of its
knowledge there are no defenses, set-offs, counterclaims, actions or equities in
favor of Borrower to or against the enforcement of the Note or Loan Agreement or
Security Agreement; (ii) there are no agreements, oral or otherwise, that have
been made by any of Bank's employees, agents, officers or directors to further
extend the Note; (iii) to the best of its knowledge Bank has in no way defaulted
or performed any act or omission which would give rise to any actions, causes of
action, suits, damages, claims, expenses or demands, at law or in equity by
Borrower, against Bank; (iv) except as set forth on Exhibit A there have been no
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changes in the organizational documents of Borrower since the date of the
original loan closing, and Borrower and the president of Borrower, on behalf of
Borrower, are duly authorized to enter into this First Amendment to Loan
Agreement and to the transactions contemplated therein; and (v) Borrower is not
aware of any claim, action, suit, demand, cost, expense or liability of any kind
of or against Bank, relating in any way to the making of the loan or the
administration thereof or the communications and business dealings between Bank
and Borrower through the date hereof.
9. Borrower hereby represents and warrants to the best of its knowledge
that it is in compliance with all covenants and agreements contained in the Loan
Agreement and that, to the best of its knowledge, all representations contained
therein are true and accurate as of the date of this Second Amendment.
10. Borrower further represents and warrants that the Borrower is not in
default under the terms of any Loan Documents executed in connection with the
Loan.
11. Except as hereby modified, the Loan Agreement remains in full force
and effect.
IN WITNESS WHEREOF, the parties have duly executed this Second Amendment to
Loan Agreement under seal as of the day and year first above written.
LIPOSCIENCE, INC., formerly known as
LipoMed, Inc.
By: /s/ F. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
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F. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, President
FIRST UNION NATIONAL BANK
By: /s/ C. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
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Title: C. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, Senior Vice
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President
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SCHEDULE A
TO SECURITY AGREEMENT / LOAN AGREEMENT
Existing Liens, Encumbrances:
1. Certain equipment used in connection with the Debtor's business and located
(or to be located) at the Debtor's facility are subject to a security agreement
and lien in favor of Oxford Venture Finance, LLC ("Oxford") and GE Capital
Corporation pursuant to the terms of a Master Loan and Security Agreement dated
September 27, 2000 between Debtor and Oxford (the "Master Loan Agreement"). The
equipment financed under the Master Loan Agreement will be owned by Debtor and
subject to a first priority lien in favor of Oxford. Debtor has currently
financed $1,268,008 in equipment under this facility and has the right to
finance up to $3,000,000 of equipment under the terms of this agreement. UCC
financings statements have been filed in connection with each equipment loan
advance made to date.
2. Debtor has pledged Certificate of Deposit Accounts maintained at Centura
Bank in the aggregate amount of $135,000 as collateral to secure Debtor's
obligations under Lease Agreements dated April 8, 1998, July 16, 1998 and March
29, 1999, respectively, between Debtor and Centura Bank. Centura Bank has filed
UCC financing statements on the equipment leased under these agreements.
3. Debtor has entered into several equipment lease agreements for office and
related equipment used in its business, pursuant to which the Lessors have filed
UCC financing statements covering the leased equipment.
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EXHIBIT A
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TO SECOND AMENDMENT TO LOAN AGREEMENT
Changes in the Organizational Documents of Borrower since the date of the
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original loan closing:
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o Amendment to Bylaws, effective September 4, 2001 (providing for
the creation of the office of Chairman of the Board)
o Certificate of Designation, filed December 22, 2000 (providing
for the creation of Series D Preferred Stock and setting forth
the powers, preferences and rights of such series of Preferred
Stock)
o Certificate of Increase, filed January 22, 2001 (increasing the
number of shares of Series D Preferred Stock authorized for
issuance)
o Certificate of Amendment, filed August 8, 2001 (amending the
Series D Certificate of Designation to increase the number of
shares that the Corporation may issue to employees, directors or
consultants pursuant to a stock grant, stock option plan, stock
purchase plan or other stock arrangement approved by the Board
and to allow for the issuance of warrants to purchase Common
Stock to the holders of Series D Preferred Stock, in either case
without triggering the price protection rights granted to holders
of Series D Preferred Stock)
o Certificate of Amendment, filed August 22, 2001 (amending the
Certificate of Incorporation to increase the number of shares of
capital stock of the Corporation to accommodate a 1-for-1.5 stock
split of the Corporation's Common Stock)
o Certificate of Amendment, filed January 31, 2002 (changing the
name of the Corporation to LipoScience, Inc.)
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