SECOND AMENDMENT TO LOAN AND SECURITY AGREEMENT
EXHIBIT 10.42
SECOND AMENDMENT TO LOAN AND SECURITY AGREEMENT
This SECOND AMENDMENT TO LOAN AND SECURITY AGREEMENT (this “Amendment”), dated as of March 14, 2016 (the “Second Amendment Date”), is by and among (a) ALIMERA SCIENCES LIMITED, a company registered under the laws of England and Wales under company number 08018355 and having its registered office at Centaur House, Xxxxxxx Xxxx, Xxxxx, Xxxxxxxxx, Xxxxxx Xxxxxxx, XX00 0XX (“Borrower”), (b) Hercules Capital Funding Trust 2014-1, a statutory trust created and existing under the laws of the State of Delaware (“Lender”) and (c) HERCULES CAPITAL, INC., a Maryland corporation (formerly known as Hercules Technology Growth Capital, Inc.), in its capacity as administrative agent for itself and Lender (in such capacity, the “Agent”).
WHEREAS, Borrower, Lender and the Agent are parties to a certain Loan and Security Agreement, dated as of April 24, 2014, as amended by a First Amendment to Loan and Security Agreement dated as of November 2, 2015 (as the same may from time to time be amended, modified or supplemented in accordance with its terms, the “Loan Agreement”); and
WHEREAS, in accordance with Section 11.3 of the Loan Agreement, Borrower and Lender desire to amend the Loan Agreement as provided herein.
NOW THEREFORE, in consideration of the mutual agreements contained in the Loan Agreement and herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows:
1. Defined Terms. Terms not otherwise defined herein which are defined in the Loan Agreement shall have the same respective meanings herein as therein.
2. Amendments to Loan Agreement. Subject to the satisfaction of the conditions set forth in Section 3 of this Amendment, as of the Second Amendment Date, the Loan Agreement is hereby amended as follows:
(a) The Loan Agreement is hereby amended by inserting the following new definition to appear alphabetically in Section 1.1 thereof:
“Second Amendment Date” means March 11, 2016.
(b) The first sentence of Section 2.7 of the Loan Agreement (End of Term Charge) is hereby amended and restated in its entirety and replaced with the following:
“On the earliest to occur of (i) May 1, 2018, (ii) the date that Borrower prepays the outstanding Secured Obligations in full, or (iii) the date that the entirety of Secured Obligations become due and payable in full, Borrower shall pay Lender a charge of One Million Four Hundred Thousand Dollars ($1,400,000).”
(c) Section 7.16 of the Loan Agreement (Financial Covenants) is hereby amended and restated in its entirety and replaced with the following:
“Financial Covenants.
(a) Commencing on October 31, 2015, the Consolidated Group shall achieve revenues from sales of Borrower Products, tested monthly at the end of each month (excluding the months ending on January 31, 2016, February 29, 2016, March, 31, 2016 and April, 30, 2016) (i) for the months ending during the period commencing on October 31, 2015 through April 30, 2016, for the six (6) months then ended, and (ii) commencing on May 31, 2016 and for each month thereafter, for the three (3) months then ended, that are greater than or equal to ninety percent (90%) of the amount projected at such date for such period in the Plan; provided that for the calculations including the months ending October 31, 2015, November 30, 2015 and December 31, 2015, the Consolidated Group shall achieve revenues from sales of Borrower Products, tested
monthly at the end of each month for the six (6) months then ended, that are greater than or equal to the sum of (1) ninety percent (90%) of the amount projected at such date in the Plan for months other than the months ending October 31, 2015, November 30, 2015 and December 31, 2015 plus (2) eighty (80%) of the amount projected at such date in the Plan for each of the months ending October 31, 2015, November 30, 2015 and December 31, 2015 that are included in the applicable six (6) month test. Notwithstanding the foregoing, commencing on the Second Amendment Date, the covenant in this Section 7.16(a) shall not apply in any month in which the Consolidated Group maintains Liquidity of not less than $25,000,000 in cash at all times during such month.
(b) During the period commencing on October 31, 2015 through but not including the Second Amendment Date, the Consolidated Group shall at all times maintain Liquidity of not less than $20,000,000. Commencing on the Second Amendment Effective Date, the Consolidated Group shall at all times maintain Liquidity of not less than $25,000,000 of which at least $17,500,000 shall be in the form of cash.”
3. Conditions to Effectiveness. Lender and Borrower agree that this Amendment shall become effective upon the satisfaction of the following conditions precedent, each in form and substance satisfactory to Lender:
(a)Lender shall have received a fully-executed counterpart of this Amendment signed by Borrower and Amendment No. 2 to Warrant Agreement dated the Second Amendment Date (the “Warrant Amendment”) signed by Alimera Sciences, Inc., a Delaware corporation (“Alimera US”);
(b)The Agent shall have received certified resolutions of Borrower’s and Alimera US’s board of directors evidencing approval of this Amendment and Alimera US’s board of directors evidencing approval of the Warrant Amendment;
(c)Borrower shall have paid to Lender, for the account of Lender, an amendment fee of Three Hundred Fifty Thousand Dollars ($350,000), which shall be deemed earned on the Second Amendment Date; and
(d)The Agent and Lender shall have received payment for all reasonable and documented out-of-pocket fees and expenses incurred by the Agent and Lender in connection with this Amendment, including, but not limited to, all legal fees and expenses, payable pursuant to Section 11.11 of the Loan Agreement.
4. Representations and Warranties. Borrower hereby represents and warrants to Lender as follows:
(e)Representations and Warranties in the Agreement. The representations and warranties of Borrower set forth in Section 5 of the Loan Agreement are true and correct in all material respects on and as of the Second Amendment Date with the same effect as though made on and as of such date, except to the extent such representations and warranties expressly relate to an earlier date.
(f)Authority, Etc. The execution and delivery by Borrower of this Amendment and the Warrant Amendment and the performance by Borrower of all of its agreements and obligations under the Loan Agreement, the Warrant and the other Loan Documents, as amended hereby, are within the corporate or limited liability company authority, as applicable, of Borrower and have been duly authorized by all necessary corporate action on the part of Borrower. With respect to Borrower, the execution and delivery by Borrower of this Amendment and the Warrant Amendment does not and will not require any registration with, consent or approval of, or notice to any Person (including any governmental authority).
(g)Enforceability of Obligations. This Amendment, the Warrant Amendment, the Loan Agreement, the Warrant and the other Loan Documents, as amended hereby, constitute the legal, valid and binding obligations of Borrower enforceable against Borrower in accordance with their terms, except as enforceability is limited by bankruptcy, insolvency, reorganization, moratorium, general equitable principles or other laws relating to or affecting generally the enforcement of, creditors’ rights and except to the extent that availability of the remedy of specific performance or injunctive relief is subject to the discretion of the court before which any proceeding therefor may be brought.
(h)No Default. Immediately after giving effect to this Amendment (i) no fact or condition exists that would (or would, with the passage of time, the giving of notice, or both) constitute an Event of Default, and (ii) no event that has had or could reasonably be expected to have a Material Adverse Effect has occurred and is continuing.
5. Reaffirmations. Except as expressly provided in this Amendment, all of the terms and conditions of the Loan Agreement and the other Loan Documents remain in full force and effect. Nothing contained in this Amendment or the Warrant Amendment shall in any way prejudice, impair or effect any rights or remedies of Lender under the Loan Agreement, the Warrant and the other Loan Documents. Except as specifically amended hereby, Borrower hereby ratifies, confirms, and reaffirms all covenants contained in the Loan Agreement, the Warrant and the other Loan Documents. The Loan Agreement, together with this Amendment, shall be read and construed as a single agreement. All references in the Loan Documents to the Loan Agreement or any other Loan Document shall hereafter refer to the Loan Agreement or such other Loan Document as amended hereby.
6. Execution in Counterparts. This Amendment may be executed in any number of counterparts, each of which shall be deemed an original, but which together shall constitute one instrument.
7. Miscellaneous.
(a) THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, EXCLUDING CONFLICT OF LAWS PRINCIPLES THAT WOULD CAUSE THE APPLICATION OF LAWS OF ANY OTHER JURISDICTION.
(b) The captions in this Amendment are for convenience of reference only and shall not define or limit the provisions hereof.
(c) This Amendment expresses the entire understanding of the parties with respect to the transactions contemplated hereby. No prior negotiations or discussions shall limit, modify, or otherwise affect the provisions hereof.
(d) Any determination that any provision of this Amendment or any application hereof is invalid, illegal or unenforceable in any respect and in any instance shall not affect the validity, legality, or enforceability of such provision in any other instance, or the validity, legality or enforceability of any other provisions of this Amendment.
[Signature Page Follows]
IN WITNESS WHEREOF, Borrower, Lender and the Agent have duly executed and delivered this Amendment as of the day and year first above written.
BORROWER:
ALIMERA SCIENCES LIMITED
Signature: /s/ Xxxxxxx X. Xxxxxxxx, Xx.
By: Xxxxxxx X. Xxxxxxxx, Xx.
Title: Director
Accepted in Palo Alto, California:
LENDER:
Hercules Capital Funding Trust 2014-1, a statutory trust created and existing under the laws of the State of Delaware
By: Hercules Capital Inc.
By: its Servicer
Signature: /s/ Xxxxxxxx Xxxx
Print Name: Xxxxxxxx Xxxx
Title: Assistant General Counsel
AGENT:
HERCULES CAPITAL, INC.
f/k/a HERCULES TECHNOLOGY GROWTH CAPITAL, INC.
Signature: /s/ Xxxxxxxx Xxxx
Print Name: Xxxxxxxx Xxxx
