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EXHIBIT 4.7
LOAN MODIFICATION AGREEMENT
This Loan Modification Agreement ("this Agreement") is made as of October
31, 1997 between GelTex Pharmaceuticals Inc., a Delaware corporation (the
"Borrower") and Fleet National Bank (the "Bank"). For good and valuable
consideration, receipt and sufficiency of which are hereby acknowledged, the
Borrower and the Bank act and agree as follows:
1. Reference is made to: (i) that certain letter agreement dated May 21,
1997 (the "Letter Agreement") between the Borrower and the Bank; (ii) that
certain $5,000,000 face principal amount promissory note dated May 21, 1997 (the
"Facility One Term Note") made by the Borrower and payable to the order of the
Bank; (iii) that certain Security Agreement (Equipment) dated May 21, 1997 (the
"Security Agreement") given by the Borrower to the Bank; and (iv) that certain
$3,000,000 face principal amount promissory note of even date herewith (the
"Facility Two Term Note") made by the Borrower and payable to the order of the
Bank. The Letter Agreement, the Security Agreement, the Facility One Term Note
and the Facility Two Term Note are hereinafter collectively referred to as the
"Financing Documents".
2. The Letter Agreement is hereby amended, effective as of the date
hereof:
a. By deleting from clause (i) of Section 1.1 of the Letter Agreement the
words "Term Note" and by substituting in their stead the following:
"Facility One Term Note"
b. By deleting the period at the end of Section 1.1 of the Letter
Agreement and by substituting in its stead the following:
",and (iii) that certain $3,000,000 face principal amount promissory
note (the `Facility Two Term Note') dated October 31, 1997 issued by
the Borrower pursuant to ss.1.5A below and payable to the order of the
Bank."
c. By deleting in its entirety the caption to Section 1.2 of the Letter
Agreement and by substituting in its stead the following:
"FACILITY ONE TERM LOANS; FACILITY ONE TERM NOTE."
d. By deleting from the first sentence of Section 1.2 of the Letter
Agreement the words "Term Loans" and by substituting in their stead the
following:
"Facility One Term Loans"
e. By providing that, in each of Sections 1.2, 1.3, 1.4 and 1.5 of the
Letter Agreement, (i) all references to a "Term Loan" or to the "Term Loans"
will be deemed to refer to a Facility One Term Loan or to the Facility One Term
Loans, respectively, (ii) all references to
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the "Term Note" will be deemed to refer to the Facility One Term Note and (iii)
all references to a "COF Loan" will be deemed to refer to the Facility One COF
Loan.
f. By inserting into the second sentence of the first paragraph of
Section 1.4 of the Letter Agreement, immediately before the words "Floating Rate
Loan", the following:
"Facility One Term Loan which is a"
g. By inserting into the second sentence of the first paragraph of
Section 1.4 of the Letter Agreement, immediately after the words "and/or that
any", the following:
"Facility One Term Loan which is a"
h. By deleting from each of the third, fourth, sixth and seventh
sentences of the first paragraph of Section 1.4 of the Letter Agreement the
words "Fixed Rate Borrowing Notice" and by substituting in their stead the
following:
"Facility One Fixed Rate Borrowing Notice"
i. By deleting from the sixth sentence of the first paragraph of Section
1.4 of the Letter Agreement the words "any requested LIBOR Loan" and by
substituting in their stead the following:
"any Facility One Term Loan requested as a LIBOR Loan"
j. By deleting from the seventh sentence of the first paragraph of
Section 1.4 of the Letter Agreement the words "applicable to a LIBOR Loan" and
by substituting in their stead the following:
"applicable to a Facility One Term Loan which is a LIBOR Loan"
k. By deleting from the seventh sentence of the first paragraph of
Section 1.4 of the Letter Agreement the words "any LIBOR Loan not repaid" and by
substituting in their stead the following:
"any Facility One Term Loan which is a LIBOR Loan not repaid"
l. By deleting from each of the second, sixth and seventh sentences of
the second paragraph of Section 1.4 of the Letter Agreement the words "Fixed
Rate Period" and by substituting in their stead the following:
"Facility One Fixed Rate Period"
m. By inserting into the third sentence of the second paragraph of
Section 1.4 of the Letter Agreement, immediately after the words "proposed COF
Interest Rate", the following:
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"for the purpose of the Facility One Term Loans"
n. By inserting into the sixth sentence of the second paragraph of
Section 1.4 of the Letter Agreement, immediately after the words "proposed COF
Interest Rate", the following:
"for the purposes of the Facility One Term Loans"
o. By inserting into the proviso contained in the seventh sentence of the
second paragraph of Section 1.4 of the Letter Agreement, immediately after the
words "the COF Interest Rate", the following:
"for the purposes of the Facility One Term Loans"
p. By inserting into the ninth sentence of the second paragraph of
Section 1.4 of the Letter Agreement, immediately after the words "proposed COF
Interest Rate", the following:
"for the purposes of the Facility One Term Loans"
q. By inserting into the eleventh sentence of the second paragraph of
Section 1.4 of the Letter Agreement, immediately after the words "proposed COF
Interest Rate", the following:
"for the purposes of the Facility One Term Loans"
r. By inserting into the twelfth sentence of the second paragraph of
Section 1.4 of the Letter Agreement, immediately after the words "proposed COF
Interest Rate", in both places where same appear, the following:
"for the purposes of the Facility One Term Loans"
s. By inserting into the thirteenth sentence of the second paragraph of
Section 1.4 of the Letter Agreement, immediately after the words "proposed COF
Interest Rate", the following:
"for the purposes of the Facility One Term Loans"
t. By inserting into the second sentence of Section 1.5 of the Letter
Agreement, immediately after the words "Interest on", the following:
"any Facility One Term Loans which are"
u. By inserting into the third sentence of Section 1.5 of the Letter
Agreement, immediately after the words "Interest on each", the following"
"Facility One Term Loan which is a"
v. By inserting into the sixth sentence of Section 1.5 of the Letter
Agreement, immediately before the words "LIBOR Loan", the following:
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"Facility One Term Loan which is a"
w. By inserting into Article I of the Letter Agreement, immediately after
Section 1.5 thereof, the following:
"1.5A. FACILITY TWO TERM LOANS; FACILITY TWO TERM NOTE. In addition to
the foregoing, the Bank may make one or more loans (the `Facility Two
Term Loans') to the Borrower, in an aggregate principal amount up to
$3,000,000, in order to finance capital equipment (the `RenaGel
Equipment') to be owned by RenaGel LLC (a limited liability company
which is 50% owned by the Borrower) and used by RenaGel LLC or by the
Borrower or by The Dow Chemical Company, as a contract manufacturer
for RenaGel LLC. A Facility Two Term Loan shall be made, no more than
once per calendar month, in such amount as may be requested by the
Borrower; provided that (i) no Facility Two Term Loan will be made
after March 31, 1998; (ii) the aggregate original principal amounts of
all Facility Two Term Loans will not exceed $3,000,000; (iii) no
Facility Two Term Loan will be in an amount in excess of 50% of the
invoiced actual costs of the tangible property constituting the items
of RenaGel Equipment with respect to which such Facility Two Term Loan
is made (excluding taxes, duties and other `soft' costs, except that
shipping and installation charges for equipment may be included in
such `actual costs' to the extent supported by invoices satisfactory
to the Bank); and (iv) the RenaGel Equipment with respect to which
each Facility Two Term Loan is made will be limited to those items of
RenaGel Equipment acquired by the Borrower within 30 days prior to the
date of the proposed Facility Two Term Loan and which were not
previously financed by any other Facility Two Term Loan. Prior to the
making of each Facility Two Term Loan, and as a precondition thereto,
the Borrower will provide the Bank with: (i) invoices supporting the
costs and purchase dates of the relevant items of RenaGel Equipment;
(ii) such evidence as the Bank may require showing that such items of
RenaGel Equipment have been installed at the premises of The Dow
Chemical Company, the contract manufacturer for RenaGel LLC, in
Midland, MI, have become fully operational, have been paid for and are
owned by the Borrower or RenaGel LLC free of all liens and interests
of any other Person (except the interest of The Dow Chemical Company,
as lessee under the Equipment Lease heretofore entered into between
the Borrower and The Dow Chemical Company); and (iii) evidence
satisfactory to the Bank that the RenaGel Equipment is fully insured
against casualty loss. The Facility Two Term Loans will be evidenced
by the Facility Two Term Note. The Borrower hereby irrevocably
authorizes the Bank to make or cause to be made, on a schedule
attached to the Facility Two Term Note or on the books of the Bank, at
or following the time of making each Facility Two Term Loan and of
receiving any payment of principal, an appropriate notation reflecting
such transaction and the then aggregate
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unpaid principal balance of the Facility Two Term Loans. The amount so
noted shall constitute presumptive evidence as to the amount owed by
the Borrower with respect to principal of the Facility Two Term Loans.
Failure of the Bank to make any such notation shall not, however,
affect any obligation of the Borrower or any right of the Bank
hereunder or under the Facility Two Term Note.
1.5B. PRINCIPAL REPAYMENT OF FACILITY TWO TERM LOANS. The Borrower
shall repay principal of the Facility Two Term Loans in 17 equal
consecutive quarterly installments, commencing on June 30, 1998 and
continuing on the last Business Day of each calendar quarter
thereafter through and including June 28, 2002 (each such quarterly
installment to be in an amount equal to 1/28th of the aggregate
principal amount of the Facility Two Term Loans outstanding on April
1, 1998, plus an 18th and final payment due on September 30, 2002 in
an amount equal to the then outstanding principal balance of all
Facility Two Term Loans and all interest then accrued but unpaid
thereon. Except as set forth in ss.1.7 below, the Borrower may prepay,
at any time or from time to time, without premium or penalty, the
whole or any portion of the Facility Two Term Loans; provided that
each such principal prepayment shall be accompanied by payment of all
interest under the Facility Two Term Note accrued but unpaid to the
date of payment. Any partial prepayment of principal of the Facility
Two Term Loans will be applied to installments of principal of the
Facility Two Term Loans thereafter coming due, in inverse order of
normal maturity. Amounts paid or prepaid on the Facility Two Term
Loans will not be available for reborrowing.
1.5C. INTEREST RATE. Except as otherwise provided below in this
ss.1.5C, interest on the Facility Two Term Loans will be payable at
the Floating Rate, with a change in such rate of interest to become
effective on each day when a change in the Prime Rate becomes
effective. Subject to the conditions set forth herein, the Borrower
may elect that all or any portion of any Facility Two Term Loan to be
made under ss.1.5A will be made as a LIBOR Loan, that all or any
portion of any Facility Two Term Loan which is a Floating Rate Loan
(but not all or any portion of the Facility Two COF Loan, if any) will
be converted to a LIBOR Loan and/or that any Facility Two Term Loan
which is a LIBOR Loan will be continued at the expiration of the
Interest Period applicable thereto as a new LIBOR Loan. Such election
shall be made by the Borrower giving to the Bank a written or
telephonic notice received by the Bank within the time period and
containing the information described in the next following sentence (a
`Facility Two Fixed Rate Borrowing Notice'). The Facility Two Fixed
Rate Borrowing Notice must be received by the Bank no later than 10:00
a.m. (Boston time) on that day which is two Business Days prior to the
date of the proposed borrowing, conversion or continuation, as the
case may be, and must specify the amount of the LIBOR Loan requested
(which shall be
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$500,000 or an integral multiple thereof), must identify the
particular Facility Two Term Loan or Loans so to be made, converted or
continued, as the case may be, and must specify the proposed
commencement date of the relevant Interest Period. Notwithstanding
anything provided elsewhere in this letter agreement, the Borrower may
not elect to have any installment of a Facility Two Term Loan included
in a LIBOR Loan if the Interest Period applicable thereto would
continue after the due date of such installment. Any Facility Two
Fixed Rate Borrowing Notice shall, upon receipt by the Bank, become
irrevocable and binding on the Borrower, and the Borrower shall, upon
demand and receipt of a Bank Certificate with respect thereto,
forthwith indemnify the Bank against any loss or expense incurred by
the Bank as a result of any failure by the Borrower to borrow any
Facility Two Term Loan requested as a LIBOR Loan, including, without
limitation, any loss or expense incurred by reason of the liquidation
or redeployment of deposits or other funds acquired by the Bank to
fund or maintain such LIBOR Loan. At the expiration of each Interest
Period applicable to a Facility Two Term Loan which is a LIBOR Loan,
the principal amount of such LIBOR Loan may be continued as a new
LIBOR Loan to the extent and on the terms and conditions contained in
this letter agreement by delivery to the Bank of a new Facility Two
Fixed Rate Borrowing Notice conforming to the requirements set forth
above in this ss.1.5C (and any Facility Two Term Loan which is a LIBOR
Loan not repaid and not so continued as a new LIBOR Loan will be
deemed (subject to the provisions of the next following paragraph) to
have been converted into a Floating Rate Loan). Notwithstanding any
other provision of this letter agreement, the Bank need not make any
such LIBOR Loan or allow any conversion of a Floating Rate Loan to
such a LIBOR Loan at any time when there exists any Default or Event
of Default.
On March 31, 1998, the Borrower may convert to a Facility Two COF Loan
all (but not less than all) of the Facility Two Terms Loans then
outstanding. If the Borrower desires such conversion to a Facility Two
COF Loan, it will notify the Bank of same not less than two Business
Days prior to the proposed conversion and will request that the Bank
offer with respect to such Facility Two Term Loans a rate of interest
which shall be fixed (subject to adjustment as provided in this letter
agreement) for the period commencing on the date of such conversion
and ending on the final maturity date applicable to such Facility Two
Term Loans (the `Facility Two Fixed Rate Period'). Following such
request for a fixed rate, the Bank will endeavor to offer a proposed
COF Interest Rate for the purposes of the Facility Two Term Loans at a
rate determined as provided below and under conditions determined by
the Bank in its sole discretion. The Borrower may elect to accept such
offer in the manner and within the time period specified in such
offer. Any such election shall be irrevocable on the part of the
Borrower. Upon such election, the interest rate payable with respect
to the outstanding Facility Two Term Loans shall be fixed (subject to
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adjustment as provided in this letter agreement) for the Facility Two
Fixed Rate Period and at the rate communicated by the Bank as its
proposed COF Interest Rate for the purposes of the Facility Two Term
Loans. Any proposed COF Interest Rate offered under this Section will
be a rate per annum equal to the sum of (i) 1.75% per annum plus (ii)
the COF Rate for the applicable Facility Two Fixed Rate Period
(expressed as a per annum rate); provided, however, that the COF
Interest Rate for the purposes of the Facility Two Term Loans shall in
no event exceed the maximum rate permitted by applicable law. The COF
Rate shall be determined by the Bank in its discretion for the
purposes of any proposed COF Interest Rate offered under this Section.
The Bank may base the COF Rate for the purpose of computing the
proposed COF Interest Rate for the purposes of the Facility Two Term
Loans on any (or any combination of) recognized sources of available
funding for transactions of this type, including, but not limited to,
the interbank market, the domestic and European certificate of deposit
market and sales of commercial paper. The COF Rate for the purposes of
this computation shall in any event include adjustments for the costs
of maintaining reserves, insurance (including, without limitation,
assessments by the FDIC), taxes, hedging and other costs which may be
incurred by the Bank with respect to the applicable source or sources
of funding, all as determined by the Bank in its discretion. The
source or sources of funding utilized for the computation of the
proposed rate shall be selected by the Bank at its sole discretion for
offering to the Borrower, and the Borrower shall not have any claim
against the Bank with respect to computation of any proposed COF
Interest Rate for the purposes of the Facility Two Term Loans. If the
Borrower is dissatisfied with any proposed COF Interest Rate for the
purposes of the Facility Two Term Loans, the Borrower's sole remedy
with respect thereto shall be not to accept such proposed COF Interest
Rate for the purposes of the Facility Two Term Loans within the
applicable time period, and thus to cause interest on the Facility Two
Term Loans to be payable at the Floating Rate (subject to the
Borrower's ability set forth elsewhere herein to obtain LIBOR Loans).
Notwithstanding the foregoing provisions hereof, the Bank need not
offer a proposed COF Interest Rate for the purposes of the Facility
Two Term Loans for any period of time with respect to which the Bank,
in its sole discretion, determines that there are no recognized
sources of funding available to it for such time period or principal
amount or that the cost of funds with respect thereto would be
unreasonably high or if there then exists any Default or Event of
Default. Further, the Borrower may not convert into a Facility Two COF
Loan any LIBOR Loan prior to the end of the Interest Period applicable
to such LIBOR Loan.
Any request for a Fixed Rate Loan with respect to Facility Two Term
Loans and any election to convert all or any portion of the Facility
Two Term Loans to a Fixed Rate Loan may be made on behalf of the
Borrower only by a duly authorized officer; provided, however, that
the Bank may
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conclusively rely upon any written or facsimile communication received
from any individual whom the Bank believes in good faith to be such a
duly authorized officer.
1.5D. INTEREST PAYMENTS. The Borrower will pay interest on the
principal amount of the Facility Two Term Loans outstanding from time
to time, from the date hereof until payment of the Facility Two Term
Loans and the Facility Two Term Note in full and the termination of
this letter agreement. Interest on any Facility Two Term Loans which
are Floating Rate Loans and the Facility Two COF Loan (if any) will be
payable monthly in arrears on the first day of each month. Interest on
each Facility Two Term Loan which is a LIBOR Loan will be payable in
arrears on the applicable Interest Payment Date. In any event,
interest shall also be payable on the date of payment of the Facility
Two Term Loans in full. Interest on Floating Rate Loans shall be
payable at the Floating Rate. The rate of interest payable on any
Facility Two Term Loan which is a LIBOR Loan will be the Eurodollar
Interest Rate applicable thereto. Interest on the Facility Two COF
Loan will be payable at the applicable COF Interest Rate. In any
event, overdue principal of any Facility Two Term Loan and, to the
extent permitted by law, overdue interest on any Facility Two Term
Loan shall bear interest at a rate per annum which at all times shall
be equal to the sum of (i) four (4%) percent per annum PLUS (ii) the
rate otherwise applicable to such overdue principal (or to the
principal amount as to which such interest is overdue) pursuant to the
Facility Two Term Note and this letter agreement, payable on demand.
All interest payable hereunder and/or under the Facility Two Term Note
will be calculated on the basis of a 360-day year for the actual
number of days elapsed."
x. By deleting from Section 1.7 of the Letter Agreement the words "the
Term Note" and by substituting in their stead the following:
"any Term Note"
y. By deleting from Section 1.7 of the Letter Agreement the words "the
COF Loan" and by substituting in their stead the following:
"any COF Loan"
z. By deleting from Section 1.8 of the Letter Agreement, in each place
where same appear, the words "the Term Note" and by substituting in their stead
the following:
"any Term Note"
aa. By deleting from clause (ii) of Section 1.8 of the Letter Agreement
the words "the facility for Term Loans" and by substituting in their stead the
following:
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"both facilities for Term Loans"
bb. By deleting from the second sentence of Section 1.10 of the Letter
Agreement the words "each Term Loan" and by substituting in their stead the
following:
"each Facility One Term Loan"
cc. By adding to the first paragraph of Section 1.10 of the Letter
Agreement, at the end of such paragraph, the following:
"The proceeds of each Facility Two Term Loan will be used by the
Borrower solely to fund costs of acquisition of RenaGel Equipment (as
defined above)."
dd. By deleting from the first sentence of the second paragraph of Section
1.10 of the Letter Agreement the words "the Term Note" and by substituting in
their stead the following:
"any Term Note"
ee. By deleting from the second sentence of the second paragraph of
Section 1.10 of the Letter Agreement the words "the Term Note" and by
substituting in their stead the following:
"any Term Note"
ff. By deleting from the third paragraph of Section 1.10 of the Letter
Agreement the words "the Term Note", in each place where same appear, and by
substituting in their stead, in each such place, the following:
"any Term Note"
gg. By deleting from Section 3.9 of the Letter Agreement the amount
"$20,000,000" and by substituting in its stead the following:
"$23,000,000"
hh. By deleting from clause (i) of Section 4.1 of the Letter Agreement the
words "the Term Note" and by substituting in their stead the following:
"the Term Notes"
ii. By deleting from clause (a) of Section 5.1 of the Letter Agreement the
words "the Term Note" and by substituting in their stead the following:
"any Term Note"
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jj. By deleting from clause (a) of Section 5.2 of the Letter Agreement the
words "the Term Note" and by substituting in their stead the following:
"each Term Note"
kk. By deleting from clause (c) of Section 5.2 of the Letter Agreement the
words "the Term Note" and by substituting in their stead the following:
"each Term Note"
ll. By deleting from the first sentence of Section 6.1 of the Letter
Agreement, in both places where same appear, the words "the Term Note" and by
substituting in their stead, in both such places, the following:
"the Term Notes"
mm. By deleting from the second sentence of Section 6.1 of the Letter
Agreement the words "the Term Note" and by substituting in their stead the
following:
"the Term Notes"
nn. By deleting from the last sentence of Section 6.1 of the Letter
Agreement the words "the Term Note" and by substituting in their stead the
following:
"any Term Note"
oo. By deleting in its entirety Section 6.3 of the Letter Agreement and by
substituting in its stead the following:
"6.3. FACILITY FEES. With respect to the facility for Facility One
Term Loans established herein, the Borrower has paid to the Bank a
non-refundable commitment fee of $25,000. In addition, on or about
October 31, 1997 the Borrower is paying to the Bank, in respect of the
within facility for Facility Two Term Loans, a further non-refundable
commitment fee of $7,500. Fees described in this Section are in
addition to any balances and fees required by the Bank or any of its
affiliates in connection with any other services now or hereafter made
available to the Borrower."
pp. By changing the Borrower's notice address, pursuant to Section 6.4 of
the Letter Agreement, to the following:
"GelTex Pharmaceuticals, Inc.
Nine Xxxxxx Xxxxxx
Xxxxxxx, XX 00000
Attention: Xxxx Xxxxxxx, Chief Financial Officer"
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qq. By deleting from the third sentence of Section 6.5 of the Letter
Agreement the words "the Term Note" and by substituting in their stead the
following:
"any Term Note"
rr. By deleting from the first sentence of Section 6.6 of the Letter
Agreement the words "the Term Note" and by substituting in their stead the
following:
"any of the Term Notes"
ss. By deleting from Section 6.8 of the Letter Agreement the words "the
Term Note" and by substituting in their stead the following:
"the Term Notes"
tt. By deleting from the definition of "Bank Certificate" appearing in
Section 7.1 of the Letter Agreement the words "ss.1.4, ss.1.7, ss.1.8 or ss.6.1
of this letter agreement" and by substituting in their stead the following:
"ss.1.4, ss.1.5C, ss.1.7, ss.1.8 or ss.6.1 of this letter agreement"
uu. By deleting in its entirety the definition of "COF Interest Rate"
appearing in Section 7.1 of the Letter Agreement and by substituting in its
stead the following:
"`COF Interest Rate' - A rate of interest per annum which is (i)
offered by the Bank to the Borrower with respect to its outstanding
Facility One Term Loans pursuant to the second paragraph of ss.1.4 and
accepted by the Borrower as described therein or (iii) offered by the
Bank to the Borrower with respect to its outstanding Facility Two Term
Loans pursuant to the second paragraph of ss.1.5C and accepted by the
Borrower as described therein."
vv. By deleting in its entirety the definition of "COF Loan" appearing in
Section 7.1 of the Letter Agreement and by substituting in its stead the
following:
"`COF Loan' - Any Term Loan which bears interest at a COF Interest
Rate. A COF Loan may be either a Facility One COF Loan or a Facility
Two COF Loan."
ww. By deleting the period at the end of the definition of "COF Rate"
appearing in Section 7.1 of the Letter Agreement and by substituting in its
stead the following:
"or as described in the second paragraph of ss.1.5C."
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xx. By inserting into Section 7.1 of the Letter Agreement, immediately
after the definition of "Existing Premises", the following:
"`Facility One COF Loan' - Any COF Loan which has become effective
with respect to the Facility One Term Loans pursuant to the second
paragraph of ss.1.4.
`Facility Two COF Loan' - Any COF Loan which has become effective with
respect to the Facility Two Term Loans pursuant to the second
paragraph of ss.1.5C.
`Facility One Term Loan' - Any loan made pursuant to ss.1.2.
`Facility Two Term Loan' - Any loan made pursuant to ss.1.5A.
`Facility One Term Note' - As defined in ss.1.1.
`Facility Two Term Note' - As defined in ss.1.1."
yy. By deleting from the definition of "Fixed Interest Rate" appearing in
Section 7.1 of the Letter Agreement the words "the COF Loan" and by substituting
in their stead the following:
"any COF Loan"
zz. By deleting from the definition of "Loan Documents" appearing in
Section 7.1 of the Letter Agreement, the words "the Term Note" and by
substituting in their stead the following:
"the Facility One Term Note, the Facility Two Term Note,"
aaa. By inserting into Section 7.1 of the Letter Agreement, immediately
after the definition of "Tangible Net Worth", the following:
"`Term Loans' - Collectively, the Facility One Term Loans and the
Facility Two Term Loans.
"`Term Notes' - Collectively, the Facility One Term Note and the
Facility Two Term Note."
3. The Facility One Term Note is hereby modified: (i) by providing that
all references therein to a "Term Loan" or to the "Term Loans" will be deemed to
apply, respectively, to any Facility One Term Loan or to the Facility One Term
Loans (as described in the Letter Agreement, as amended by this Agreement), and
(ii) by deleting the words "the Term Note" appearing in the eighth paragraph of
the text of the Facility One Term Note and by substituting in their stead the
words "the Facility One Term Note".
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4. Wherever in any Financing Document, or in any certificate or opinion
to be delivered in connection therewith, reference is made to a "letter
agreement" or to the "Letter Agreement", from and after the date hereof same
will be deemed to refer to the Letter Agreement, as hereby amended.
5. Simultaneously with the execution and delivery of this Agreement, the
Borrower is executing and delivering to the Bank the Facility Two Term Note. The
Facility Two Term Note is a $3,000,000 promissory note of the Borrower,
substantially in the form attached hereto as Exhibit 1. Wherever in any of the
Financing Documents or in any certificate or opinion to be delivered in
connection therewith, reference is made to a "Term Note" or the "Term Notes",
from and after the date hereof same will be deemed to include both the Facility
One Term Note and the Facility Two Term Note. Wherever in any of the Financing
Documents or in any certificate or opinion to be delivered in connection
therewith, reference is made to a "Term Loan" or to the "Term Loans", from and
after the date hereof same will be deemed to include both the Facility One Term
Loans and the Facility Two Term Loans.
6. In order to induce the Bank to enter into this Agreement, the Borrower
further represents and warrants as follows:
a. The execution, delivery and performance of this Agreement and the
Facility Two Term Note have been duly authorized by the Borrower by all
necessary corporate and other action, will not require the consent of any third
party and will not conflict with, violate the provisions of, or cause a default
or constitute an event which, with the passage of time or the giving of notice
or both, could cause a default on the part of the Borrower under its charter
documents or by-laws or under any contract, agreement, law, rule, order,
ordinance, franchise, instrument or other document, or result in the imposition
of any lien or encumbrance (except in favor of the Bank) on any property or
assets of the Borrower.
b. The Borrower has duly executed and delivered each of this Agreement
and the Facility Two Term Note.
c. Each of this Agreement and the Facility Two Term Note is the legal,
valid and binding obligation of the Borrower, enforceable against the Borrower
in accordance with its respective terms.
d. The statements, representations and warranties made in the Letter
Agreement and/or in the Security Agreement continue to be correct as of the date
hereof; except as amended, updated and/or supplemented by the attached
Supplemental Disclosure Schedule.
e. The covenants and agreements of the Borrower contained in the Letter
Agreement and/or in the Security Agreement have been complied with on and as of
the date hereof.
f. No event which constitutes or which, with notice or lapse of time, or
both, could constitute, an Event of Default (as defined in the Letter Agreement)
has occurred and is continuing.
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g. No material adverse change has occurred in the financial condition of
the Borrower (other than continuing losses from operations as heretofore
disclosed to the Bank) from that disclosed in the quarterly financial statements
of the Borrower dated June 30, 1997, heretofore furnished to the Bank.
7. Except as expressly affected hereby, the Letter Agreement and each of
the other Financing Documents remains in full force and effect as heretofore.
8. Nothing contained herein will be deemed to constitute a waiver or a
release of any provision of any of the Financing Documents. Nothing contained
herein will in any event be deemed to constitute an agreement to give a waiver
or release or to agree to any amendment or modification of any provision of any
of the Financing Documents on any other or future occasion.
Executed, as an instrument under seal, as of the day and year first above
written.
GELTEX PHARMACEUTICALS, INC.
By: /s/ Xxxx X. Xxxxxxx, Xx.
----------------------------------
Name: Xxxx X. Xxxxxxx, Xx.
Title: Chief Financial Officer
Accepted and agreed:
FLEET NATIONAL BANK
By: /s/ Xxxxxxxx Xxxxxxx
-------------------------------
Name: Xxxxxxxx Xxxxxxx
Title: Vice President
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SUPPLEMENTAL DISCLOSURE SCHEDULE
(Note: This Supplemental Disclosure Schedule is intended to update, but not
replace the disclosure schedule attached to the Letter Agreement dated May
21, 1997. Items not referenced in this supplement remain unchanged from the
original disclosure schedule)
SECTION 2.1(a)
In June 1997, the Borrower formed RenaGel, Inc., a Delaware corporation and
wholly-owned subsidiary of Borrower. In June 1997, the Borrower formed RenaGel
LLC, a Delaware limited liability company which is being used as the vehicle for
a 50-50 joint venture between the Borrower and Genzyme Corporation.
SECTION 2.1(b)
Persons known to Borrower to hold more than 5% of the outstanding shares of
Borrower's capital stock:
- The Equitable Companies Incorporated(1)
- West Highland Capital, Inc.(2)
- Abingworth Bioventures SICAV(3)
----------------
(1) Includes shares held by The Equitable Life Assurance Society of the United
States ("ELAS") and Alliance Capital Management L.P. ("ACM"). ELAS and
ACM are subsidiaries of The Equitable Companies Incorporated. This
information is based on a Schedule 13G dated February 6, 1997 filed with
the Securities and Exchange Commission for the aforementioned entities.
(2) Includes shares held by West Highland Capital, Inc. ("WHC"), Estero
Partners, LLC ("EP"), West Highland Partners, L.P.("WHP") and Buttonwood
Partners, L.P. ("BP"). Lang X. Xxxxxxx is the sole director and executive
officer of WHC and the sole manager of EP. WHC, EP and Mr. Xxxxxxx xxx the
general partners of WHP and BP which are investment limited partnerships,
and have voting and dispositive authority over shares held by WHP and BP.
WHC has voting and dispositive authority over shares held by its various
investment advisory clients. This information is based on a Schedule 13D
dated January 9, 1997 filed with the Securities and Exchange Commission for
the aforementioned entities and person.
(3) This information is based on a Schedule 13G dated February 8, 1996 filed
with the Securities and Exchange Commission.
SECTION 2.1(i)
The Borrower references the unaudited financial statements of the Borrower for
the period ended September 30, 1997, heretofore delivered to the Bank, and the
liabilities referenced in such financial statements.
Reference is made to the attached lists of Exhibits filed with the Securities
and Exchange Commission after December 31, 1996, as disclosure of the material
transactions entered into by the Borrower since December 31, 1996.
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SECTION 2.1(j)
As of the date of this Supplemental Disclosure Schedule, the principal place of
business and chief executive offices of the Borrower are located at Nine Xxxxxx
Xxxxxx, Xxxxxxx, Xxxxxxxxxxxxx 00000. No assets of the Borrower are currently
located at any address other than the Existing Premises and the New Premises (as
such terms are defined in the Letter Agreement dated May 21, 1997). The
equipment to be purchased with the funds to be delivered under the Facility Two
Term Loans is expected to be held at facilities of The Dow Chemical Company in
Midland, Michigan.
The record owner of the New Premises is as follows:
Nine Fourth Avenue LLC, a Massachusetts limited liability company with an
address c/o X.X. Xxxxx Properties, Inc., Xxxxx 000, Xxx Xxxxxxx Xxxxxx, Xxxxxx,
Xxxxxxxxxxxxx 00000.
SECTION 3.1
The Borrower intends to dissolve RenaGel, Inc., its wholly-owned subsidiary, on
or before December 31, 1998. The sole asset of RenaGel, Inc. is a one percent
(1%) ownership interest in RenaGel LLC. In connection with the dissolution, this
ownership interest will be assigned to the Borrower.
SECTION 3.2.
Pursuant to the terms of a Sublease Agreement currently being negotiated by the
Borrower, certain equipment located at 000 Xxxx Xxxx Xxxx, Xxxxxxx,
Xxxxxxxxxxxxx will be insured by the Borrower's sublessee. The equipment to be
purchased with the funds to be delivered under the Facility Two Term Loans will
be insured by The Dow Chemical Company, with the cost thereof to be borne by
RenaGel LLC.
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SECTION 4.1
As of June 30, 1997, the Borrower had the following short term obligations,
other than those obligations Borrower has to the Bank:
- Comdisco Equipment Lease $ 1,382.65
- Silicon Valley Bank Equipment Line $213,871.43
and a long term obligation to Silicon Valley Bank in the amount of $179,626.62.
In addition, the Borrower has approximately $755,000 available on a $1 million
line of credit with Silicon Valley Bank.
SECTION 4.2
Silicon Valley Bank has a lien on all equipment purchased with financing
provided by Silicon Valley Bank.
SECTION 4.3
The Borrower has not issued any guaranties as of the date hereof.
SECTION 4.7
See disclosure set forth under Section 2.1(a) regarding the formation of
subsidiaries.
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