EXHIBIT 10.37
FIRST LOAN MODIFICATION AGREEMENT
This First Loan Modification Agreement (this "Loan Modification
Agreement') is entered into as of December 28, 2004, by and between SILICON
VALLEY BANK, a California-chartered bank, with its principal place of business
at ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ and with a loan production
office located at One Newton Executive Park, Suite 200, ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, doing business under the name "Silicon Valley East"
("Bank") and MOMENTA PHARMACEUTICALS, INC., a Delaware corporation with its
chief executive office located at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ("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 December 27, 2002,
evidenced by, among other documents, a certain Loan and Security Agreement dated
as of December 27, 2002, between Borrower and Bank (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 Section 4.1
entitled "Grant of Security Interest" in its entirety, and
substituting therefor Section 4.1, as it appears in the 2004
Loan Arrangement.
2. The Loan Agreement shall be amended by deleting Article 5
entitled "Representations and Warranties" in its entirety, and
substituting therefor Article 5, as it appears in the 2004
Loan Arrangement. The "Perfection Certificate" as defined in
Section 5.1, shall mean the updated Perfection Certificate
delivered on or about the date hereof.
3. The Loan Agreement shall be amended by deleting Article 6
entitled "Affirmative Covenants" in its entirety, and
substituting therefor Article 6, as it appears in the 2004
Loan Arrangement.
4. The Loan Agreement shall be amended by deleting Article 7
entitled "Negative Covenants" in its entirety, and
substituting therefor Article 7, as it appears in the 2004
Loan Arrangement.
5. The Loan Agreement shall be amended by deleting Section 8.4
entitled "Attachments" in its entirety, and substituting
therefor Section 8.4, as it appears in the 2004 Loan
Arrangement.
6. The Loan Agreement shall be amended by deleting Section 8.5
entitled "Insolvency" in its entirety, and substituting
therefor Section 8.5, as it appears in the 2004 Loan
Arrangement.
7. The Loan Agreement shall be amended by deleting Section 8.6
entitled "Other Agreements" in its entirety, and substituting
therefor Section 8.6, as it appears in the 2004 Loan
Agreement.
8. The Loan Agreement shall be amended by deleting Section 8.7
entitled "Judgments" in its entirety, and substituting
therefor Section 8.7, as it appears in the 2004 Loan
Agreement.
9. The Loan Agreement shall be amended by inserting the following
Section 8.9 thereof, entitled "2004 SVB Loan Arrangement":
"8.9 2004 SVB LOAN ARRANGEMENT. The occurrence of an Event of
Default under the 2004 SVB Loan Arrangement."
10. The Loan Agreement shall be amended by deleting subsections
(c), (f) and (h) from Section 9.1 entitled "Rights and
Remedies" in its entirety.
11. The Loan Agreement shall be amended by deleting Section 9.2
entitled "Power of Attorney" in its entirety, and substituting
therefor Section 9.2, as it appears in the 2004 Loan
Arrangement.
12. The Loan Agreement shall be amended by deleting Section 9.3
entitled "Accounts Notification/Collection" in its entirety.
13. The Loan Agreement shall be amended by deleting the following
information of the Borrower, appearing in Section 10 entitled
"Notices" thereof:
If to Borrower: Momenta Pharmaceuticals, Inc.
▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
FAX: (▇▇▇) ▇▇▇-▇▇▇▇
and inserting in lieu thereof the following:
If to Borrower: Momenta Pharmaceuticals, Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: Mr. ▇▇▇▇▇▇▇ ▇▇▇▇, Chief Financial
Officer
FAX: (▇▇▇) ▇▇▇-▇▇▇▇
14. The Loan Agreement shall be amended by deleting Section 12.1
entitled "Successors and Assigns" in its entirety, and
substituting therefor Section 12.1, as it appears in the 2004
Loan Arrangement.
15. The Loan Agreement shall be amended by deleting Section 12.2
entitled "Indemnification" in its entirety, and substituting
therefor Section 12.2, as it appears in the 2004 Loan
Arrangement.
16. The Loan Agreement shall be amended by deleting Section 12.3
entitled "Right of Set-Off" in its entirety, and substituting
therefor Section 12.3, as it appears in the 2004 Loan
Arrangement.
17. The Loan Agreement shall be amended by inserting the following
definition to appear alphabetically in Section 13.1 thereof:
""2004 SVB LOAN ARRANGEMENT" is that certain Loan and Security
Agreement dated as of December 28, 2004, by and between
Borrower and Bank."
18. The Loan Agreement shall be amended by deleting the following
definitions appearing in Section 13.1 thereof:
""COLLATERAL" is any and all properties, rights and assets of
the Borrower granted by the Borrower to Bank, now, or in the
future, in which the Borrower obtains an interest, or the
power to transfer rights, including, without limitation, the
property described and subject to the exclusions described on
EXHIBIT A."
""CREDIT EXTENSIONS" is each Equipment Advance or any other
extension of credit by Bank for Borrower's benefit."
""MATERIAL ADVERSE CHANGE " is: (i) A material impairment in
the perfection or priority of Bank's security interest in the
Collateral or in the value of such Collateral; (ii) a material
adverse change in the business, operations, or condition
(financial or otherwise) of the Borrower; or (iii) a material
impairment of the prospect of repayment of any portion of the
Obligations. "
""OBLIGATIONS" are debts, principal, interest, Bank Expenses
and other amounts Borrower owes Bank now or later, under the
Loan Documents, and including interest accruing after
Insolvency Proceedings begin."
"PERMITTED INDEBTEDNESS" is:
(a) Borrower's indebtedness to Bank under this Agreement or
the Loan Documents;
(b) Indebtedness existing on the Closing Date and shown on
the Disclosure Schedule attached hereto;
(c) Subordinated Debt;
(d) Indebtedness to trade creditors incurred in the
ordinary course of business; and
(e) Indebtedness secured by Permitted Liens; and
(f) Extensions, refinancings, modifications, amendments and
restatements of any items of Permitted Indebtedness (a)
through (e) above, provided that the principal amount
thereof is not increased and the terms thereof are not
modified to impose more burdensome terms upon Borrower
or its Subsidiary, as the case may be.
(g) Capital leases in an amount not to exceed One Hundred
Thousand Dollars, in the aggregate, during any fiscal
year; and
(h) Loans to employees in an amount not to exceed Two
Hundred Fifty Thousand Dollars ($250,000.00), in the
aggregate, at any time."
""PERMITTED LIENS" are:
(a) Liens existing on the Closing Date and shown on the
Perfection Certificate or arising under this Agreement
or other Loan Documents;
(b) Liens for taxes, fees, assessments or other government
charges or levies, either not delinquent or being
contested in good faith and for which Borrower
maintains adequate reserves on its Books, if they have
no priority over any of Bank's security interests;
(c) Purchase money Liens in amount not to exceed One
Hundred Thousand Dollars ($100,000.00), in the
aggregate during any fiscal year: (i) on Equipment
acquired or held by Borrower incurred for financing the
acquisition of the Equipment, or (ii) existing on
equipment when acquired, if the Lien is confined to the
property and improvements and the proceeds of the
equipment.
(d) Leases or subleases and licenses or sublicenses granted
in the ordinary course of Borrower's business or
granted in connection with the consummation of
collaborations, joint ventures, or financing
arrangements with the Borrower's business partners in
the ordinary course of business, if the leases,
subleases, licenses and sublicenses permit granting
Bank a security interest; and
(e) Liens incurred in the extension, renewal or refinancing
of the indebtedness secured by Liens described in (a)
through (d), but any extension, renewal or replacement
Lien must be limited to the property encumbered by the
existing Lien and the principal amount of the
indebtedness may not increase unless such increase is
itself Permitted Indebtedness."
""RESPONSIBLE OFFICER" is each of the Chief Executive Officer
and Vice President for Licensing and Business Development of
Borrower."
and inserting in lieu thereof the following:
""COLLATERAL" is any and all properties, rights and assets of
the Borrower as described on EXHIBIT A."
""CREDIT EXTENSIONS" is each Equipment Advance or any other
extension of credit by Bank for Borrower's benefit, pursuant
to this Agreement."
""MATERIAL ADVERSE CHANGE " is: (i) A material impairment in
the perfection or priority of Bank's security interest in the
Collateral or in the value of such Collateral; or (ii) a
material adverse change in the business, operations, or
condition (financial or otherwise) of the Borrower."
""OBLIGATIONS" are debts, principal, interest, Bank Expenses
and other amounts Borrower owes Bank now or later under this
Agreement, or the 2004 SVB Loan Arrangement, including letters
of credit, cash management services, and foreign exchange
contracts, if any, and including interest accruing after
Insolvency Proceedings begin and debts, liabilities, or
obligations of Borrower assigned to Bank."
""PERMITTED INDEBTEDNESS" is:
(a) Borrower's indebtedness to Bank under this Agreement,
the 2004 SVB Loan Arrangement, or the Loan Documents;
(b) Indebtedness existing on the Closing Date and shown on
the Perfection Certificate;
(c) Subordinated Debt;
(d) Indebtedness to trade creditors incurred in the
ordinary course of business;
(e) Indebtedness secured by Permitted Liens;
(f) Extensions, refinancings, modifications, amendments and
restatements of any items of Permitted Indebtedness (a)
through (e) above, provided that the principal amount
thereof is not increased or the terms thereof are not
modified to impose more burdensome terms upon Borrower
or its Subsidiary, as the case may be;
(g) Other Indebtedness not otherwise permitted by Section
7.4 not exceeding One Million Dollars ($1,000,000.00),
in the aggregate, outstanding at any time; and
(h) Capital leases.
""PERMITTED LIENS" are:
(a) Liens existing on the Closing Date and shown on the
Perfection Certificate or arising under this Agreement
or other Loan Documents;
(b) Liens for taxes, fees, assessments or other government
charges or levies, either not delinquent or being
contested in good faith and for which Borrower
maintains adequate reserves on its Books;
(c) Purchase money Liens (i) on Equipment acquired or held
by Borrower incurred for financing the acquisition of
the Equipment (now or in the future), or (ii) existing
on equipment when acquired, IF the Lien is confined to
the property and improvements and the proceeds of the
equipment;
(d) Leases or subleases and licenses or sublicenses granted
in the ordinary course of Borrower's business or
granted in connection with the consummation of
collaborations, joint ventures, or financing
arrangements with the Borrower's business partners in
the ordinary course of business; and
(e) Liens incurred in the extension, renewal or refinancing
of the indebtedness secured by Liens described in (a)
through (d), BUT any extension, renewal or replacement
Lien must be limited to the property encumbered by the
existing Lien and the principal amount of the
indebtedness may not increase."
""RESPONSIBLE OFFICER" is each of the Chief Executive Officer
and Chief Financial Officer of Borrower."
19. The Loan Agreement shall be amended by deleting the
definitions of "Accounts", "Capitalization Event",
"Intellectual Property", "Inventory", and "Permitted
Investments" from Section 13.1.
20. The Collateral description appearing as EXHIBIT A to the Loan
Agreement is hereby replaced with the Collateral description
attached as EXHIBIT A hereto.
21. The Compliance Certificate appearing as EXHIBIT C to the Loan
Agreement is hereby deleted.
22. Terms that are capitalized in the Loan Agreement, but are not
otherwise defined, shall have the same meanings as set forth
in the 2004 SVB Loan Arrangement.
B. Waivers.
The financial reporting requirement set forth in former Section
6.2(b) hereof for the months ended July 30, 2004, August 31, 2004,
and October 31, 2004 are hereby waived, effective as of July 30,
2004. Bank's waiver of Borrower's compliance of said financial
reporting requirement shall apply only to the foregoing specific
periods
4. FEES. The Borrower shall reimburse Bank for all legal fees and expenses
incurred in connection with this amendment to the Existing Loan Documents.
5. CONSISTENT CHANGES. The Existing Loan Documents are hereby amended
wherever necessary to reflect the changes described above.
6. RATIFICATION OF LOAN DOCUMENTS. Borrower hereby ratifies, confirms, and
reaffirms all terms and conditions of all security or other collateral granted
to the Bank subject to amendment to the definition of Collateral, and confirms
that the indebtedness secured thereby includes, without limitation, the
Obligations.
7. 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.
8. 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.
9. COUNTERSIGNATURE. This Loan Modification Agreement shall become effective
only when it shall have been executed by Borrower and Bank (provided, however,
in no event shall this Loan Modification Agreement become effective until signed
by an officer of Bank in California).
[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]
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:
MOMENTA PHARMACEUTICALS, INC. SILICON VALLEY BANK, doing
business as
SILICON VALLEY EAST
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇ By: /s/ R. ▇▇▇▇▇ ▇▇▇▇▇
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Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇ Name: R. ▇▇▇▇▇ ▇▇▇▇▇
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Title: Vice President and Chief Financial Officer Title: Vice President
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SILICON VALLEY BANK
By: [illegible]
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Name: [illegible]
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Title: Loan Ops Supervisor
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(signed in Santa ▇▇▇▇▇
County, California)
EXHIBIT A
The Collateral consists of all of Borrower's right, title and interest in
and to the following:
1. Each item of equipment, or personal property financed with a
"Equipment Advance" pursuant to that certain Loan and Security Agreement, dated
as of December 27, 2002 (the "Loan Agreement"), by and between Borrower and
Bank, including, without limitation, the property described in ANNEX A hereto,
whether now owned or hereafter acquired, together with all substitutions,
renewals or replacements of and additions, improvements, and accessions to any
and all of the foregoing, and all proceeds from sales, renewals, releases or
other dispositions thereof.
2. All Borrower's books relating to the foregoing and any and all
claims, rights and interest in any of the above and all substitutions for,
additions, attachments, accessories, accessions and improvements to and
replacements, products, proceeds and insurance proceeds of any or all of the
foregoing.
ANNEX A TO EXHIBIT A
The Financed Equipment being financed with the Equipment Advance is listed
below. Upon the funding of such Equipment Advance, this schedule automatically
shall be deemed to be a part of the Collateral.
Description of Equipment Make Model Serial# Invoice#
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