EXHIBIT 10.13
[Letterhead of SCO Capital Partners LLC]
November 7, 2005
Somanta Incorporated
00000 Xxx Xxxxxx Xxxxxx, Xxxxx 000
Xxxxxx, XX 00000
Attn: Xxxxxxxx Xxxxxxxxx, Executive Chairman
Re: Secured Loan
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Gentlemen:
Reference is made to that certain letter agreement dated August 22,
2005, between SCO Capital Partners LLC ("SCO") and Somanta Incorporated
(formerly Bridge Oncology Products, Inc.), a Delaware corporation (the
"Company"), pursuant to which SCO made a loan to the Company in the principal
amount of One Million Dollars ($1,000,000) (the "Prior Letter Agreement").
Because the Company and SCO now desire to amend the Prior Letter Agreement in
order to permit the Company to draw additional amounts thereunder, SCO and the
Company hereby amend and restate the Prior Letter Agreement in its entirety as
set forth herein.
SCO is pleased to make available to the Company a secured line of credit
facility (the "Loan"), pursuant to which SCO shall provide the Company one or
more loans (each, a "Tranche") in the aggregate principal amount of up to One
Million, Two Hundred and Fifty Dollars ($1,250,000) (the "Maximum Funded
Amount"), subject to the terms and conditions as hereinafter provided in this
letter agreement (this "Letter Agreement").
The initial tranche (the "Initial Tranche") will be in the amount of
One Million Dollars ($1,000,000) and will be provided and funded to the Company
upon satisfaction (or waiver by SCO) of the following conditions: (A) receipt of
the following documents from the Company: (i) a secured convertible promissory
note, including all schedules referenced therein (the "Note"), executed by an
authorized officer of the Company evidencing the principal amount of the funds
available under the Loan and the draw down of the Initial Tranche (in the form
attached hereto as Exhibit A), (ii) a security agreement (the "Security
Agreement") and other collateral documents pursuant to which certain assets and
subsequently acquired assets of the Company shall be pledged to secure the
repayment of the indebtedness evidenced by the Note (the "Security Documents"),
executed by an authorized officer of the Company (in the form attached hereto as
Exhibit B), (iii) an engagement letter (the "Engagement Letter") pursuant to
which, among other things, the Company shall retain and appoint SCO Securities
LLC as its financial advisor and consultant, executed by an authorized officer
of the Company (in the form attached hereto as Exhibit C), (iv) a copy of that
certain Patent and Know-how Exclusive Sublicense Agreement dated as of August
22, 2005, by and between Immunodex, Inc. and Somanta Limited, a corporation
organized under the laws of England ("Somanta") duly executed by the parties
thereto in form and substance satisfactory to SCO, (v) evidence satisfactory to
SCO that the (pound)300,000 Promissory Note issued by Somanta Limited in favor
of Xxxxxxxx Xxxxxxxxx has been cancelled and (vi) such other documents, each in
form and substance satisfactory to SCO, as SCO shall reasonably request; and (B)
consummation of the transactions contemplated by the Share Exchange Agreement
dated as of August 22, 2005, by and among the Company, Somanta, the shareholders
of Somanta and the optionholders of Somanta (the "Share Exchange Agreement").
The Company understands and acknowledges that SCO is an affiliate of SCO
Securities LLC.
The Company and SCO hereby acknowledge and agree that the Initial
Tranche was fully funded and delivered to the Company on August 23, 2005 and
that notwithstanding the amendment and restatement of the Prior Letter Agreement
as set forth herein, the Initial Tranche shall be deemed to have been
outstanding from August 23, 2005 for all purposes hereunder and under the Note.
The execution of this Letter Agreement by SCO shall constitute SCO's consent to
the Company's incurrence of additional indebtedness and issuance of equity
securities as required by Sections 6B(vi) and (xvi) of the Note, but with
respect to Section 6B(vi) of the Note, such consent is given only with respect
to, and to the extent of, the Maximum Funded Amount.
Subject to the conditions specified herein, additional Tranches (each,
an "Additional Tranche") will be made available to the Company on or after the
date hereof in such amounts as may be requested by the Company pursuant to a
Request Letter (as defined below), provided that (i) no such Tranche shall be in
a principal amount less than $50,000, (ii) the aggregate amount of all Tranches,
including the Initial Tranche, hereunder shall not exceed the Maximum Funded
Amount and (iii) the Company shall have delivered to SCO a duly authorized and
executed warrant to purchase common stock, par value $0.01 per share, of the
Company in the form attached hereto as Exhibit D (the "Warrant") together with
its initial Request Letter. Each Additional Tranche will be funded within two
(2) business days following the date on which SCO receives a request for the
funding of such Additional Tranche in accordance with this Letter Agreement
(each, a "Request Letter") specifying the requested amount of such Additional
Tranche and a certification (in form and substance satisfactory to SCO) signed
by an authorized officer of the Company that all applicable conditions to
funding set forth herein have been satisfied and that (i) the Company is not in
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breach of any covenant provided in the Note, this Letter Agreement, the Security
Documents, the Engagement Letter, the Warrant or any other agreement between the
Company and either SCO or SCO Securities LLC in connection with the foregoing
agreements and (ii) any and all representations and warranties made by the
Company in the Note shall be true and correct as of the time of funding of each
such Additional Tranche.
The Company covenants to use the proceeds of each Tranche solely for
the purposes as set forth on the Use of Proceeds Schedule attached hereto as
Schedule 1, unless otherwise agreed to by SCO. In connection with the foregoing
covenant, SCO shall have the right (the "Audit and Demand Right"), subject to
customary confidentiality provisions, at any time during the term of the Note
and for such extended period of time as indebtedness remains outstanding under
any Note to (a) audit and inspect the books and records of the Company for the
purpose of determining the use of proceeds from the Loan at reasonable times and
with reasonable prior notice in accordance with the terms and conditions of the
Note or (b) demand reasonable evidence from the Company that the Company is in
compliance with the foregoing covenant, which evidence the Company shall provide
to SCO promptly upon written request.
Notwithstanding anything to the contrary provided herein or elsewhere,
SCO shall have no obligation to fund a Tranche if, following the delivery of a
Request Letter to SCO but prior to the time the requested funds are delivered,
one or more of the following events shall have occurred:
(i) There shall be any material change in the business,
properties, assets, results of operations, prospects or financial condition of
the Company since the date of this Letter Agreement;
(ii) The Company shall be in breach of or default under any
material contract, license or other agreement or instrument; or
(iii) There shall have occurred (a) any domestic or international
event, act or occurrence which has materially disrupted, or is likely in the
immediate future to materially disrupt, the securities markets; (b) a general
suspension of, or a general limitation on prices for, trading in securities on
any of the New York Stock Exchange, the American Stock Exchange or Nasdaq; (c)
any outbreak of major hostilities or other national or international calamity;
(d) any banking moratorium declared by a state or federal authority; (e) any
moratorium declared in foreign exchange trading by major international banks or
other persons; (f) any material interruption in the mail service or other means
of communication within the United States; (g) any change in the market for
securities in general or in political, financial, or economic conditions; or (h)
the Company or any of its officers, directors and/or controlling shareholders
have become the subject of or a named party in any investigation or action
involving any regulatory or self-regulatory organization including, but not
limited to, the SEC, the NASD or any state and/or federal agency.
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This Agreement shall be governed by and construed in accordance with
the internal laws of the State of New York without regard to the conflicts of
laws principles thereof. The parties hereto hereby agree that any suit or
proceeding arising directly and/or indirectly pursuant to or under this
instrument or the consummation of the transactions contemplated hereby, shall be
brought solely in a federal or state court located in the City, County and State
of New York. By its execution hereof, the parties hereby covenant and
irrevocably submit to the in personam jurisdiction of the federal and state
courts located in the City, County and State of New York and agree that any
process in any such action may be served upon any of them personally, or by
certified mail or registered mail upon them or their agent, return receipt
requested, with the same full force and effect as if personally served upon them
in New York City. The parties hereto waive any claim that any such jurisdiction
is not a convenient forum for any such suit or proceeding and any defense or
lack of in personam jurisdiction with respect thereto. In the event of any such
action or proceeding, the party prevailing therein shall be entitled to payment
from the other party hereto of its reasonable counsel fees and disbursements in
an amount judicially determined.
Any notice, consent, request, or other communication given hereunder
shall be deemed sufficient if in writing and sent by registered or certified
mail, return receipt requested addressed to the Company, at its principal office
as first provided above, Attention: Xxxxxxxx Xxxxxxxxx, Executive Chairman, with
a copy to Xxxxx & Xxxxxxx LLP, 000 X. Xxxxxxxx, Xxxxx 0000, Xxx Xxxxx, XX 00000,
Attention: Xxx Xxxxx, Esq. and to SCO at its address provided above Attention:
Xxxxxx Xxxxxxxxx with a copy to Xxxxxx and Xxxx LLP, 000 Xxxxxxxxx Xxxxxx, Xxxxx
0000, Xxx Xxxx, XX 00000, Attention: Xxxxxxxxxxx X. Xxxxxxxx, Esq. (or to such
other address as either the Company and/or SCO shall provide in writing to the
other party). Notices shall be deemed to have been given on the date of receipt
by the other party.
[signature page follows]
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Very truly yours,
SCO CAPITAL PARTNERS LLC
By: /s/ XXXXXX XXXXXXXXX
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Name: Xxxxxx Xxxxxxxxx
Title: Chairman
Accepted and agreed as of the
date first appearing above
SOMANTA INCORPORATED
By: /s/ XXXXXXXX X. XXXXXXXXX
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Name: Xxxxxxxx X. Xxxxxxxxx
Title: Executive Chairman
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EXHIBIT A
FORM OF NOTE
EXHIBIT B
FORM OF SECURITY AGREEMENT
EXHIBIT C
FORM OF ENGAGEMENT LETTER
EXHIBIT D
FORM OF WARRANT
SCHEDULE 1
USE OF PROCEEDS
