Exhibit 10.2
FOURTH AMENDMENT
TO AND ASSUMPTION
OF
LOAN AND SECURITY
AGREEMENT
THIS FOURTH AMENDMENT TO AND
ASSUMPTION of Loan and
Security Agreement (this “Amendment”) is entered into
this 10th day of April, 2009, by and between Silicon Valley
Bank (“Bank”) and ARCA biopharma Colorado,
Inc. (“ARCA Colorado”), a Delaware corporation and
ARCA biopharma, Inc. , a Delaware corporation
(“ARCA” and together with ARCA Colorado, individually
and collectively, the “Borrower”) whose address is 8001
Arista Place, Suite 200, Broomfield, CO 80021.
RECITALS
A. Bank and ARCA Colorado have previously entered
into that certain Loan and Security Agreement dated as of
July 17, 2007, as amended by a First Amendment, dated
January 23, 2009, as amended by a Second Amendment, dated
March 23, 2009, as amended by a Third Amendment, dated
April 6, 2009 (as the same may from time to time be further
amended, modified, supplemented or restated, the “Loan
Agreement”).
B. Bank has extended credit to ARCA Colorado for
the purposes permitted in the Loan Agreement.
C. ARCA owns 100% of the issued outstanding stock
of ARCA Colorado, and, in consideration of Bank making certain
revisions to the Loan Agreement, ARCA has agreed to become a
“Borrower” under the Loan Agreement and assume joint
and several liability with ARCA Colorado for all Obligations
thereunder.
D. In addition, Borrower has requested that Bank
amend the Loan Agreement to (i) revise the maturity date of
the outstanding GC Line B Advances and (ii) make certain other
revisions thereto, as set forth herein.
E. Bank has agreed to so amend certain provisions
of the Loan Agreement, but only to the extent, in accordance with
the terms, subject to the conditions and in reliance upon the
representations and warranties set forth below.
A GREEMENT
N OW ,
T HEREFORE , in consideration of the foregoing recitals and
other good and valuable consideration, the receipt and adequacy of
which is hereby acknowledged, and intending to be legally bound,
the parties hereto agree as follows:
1. Definitions.
Capitalized terms used but not
defined in this Amendment shall have the meanings given to them in
the Loan Agreement.
2. Assumption.
ARCA hereby assumes and agrees to
pay and perform when due all present and future Obligations,
jointly and severally with ARCA Colorado under, based upon, or
arising out of the Loan Documents and instruments and agreements
relating thereto. ARCA agrees to honor, perform and comply with, in
all respects, all terms and provisions of all of the Loan
Documents, to the same extent as though ARCA were named therein
jointly and severally with ARCA Colorado. All references in the
Loan Documents to “Borrower” shall be deemed to refer
to ARCA and ARCA Colorado, jointly and severally. ARCA acknowledges
that the Obligations are due and owing to Bank from ARCA Colorado,
and upon the execution of this Amendment are due and owing from
ARCA and ARCA Colorado, jointly and severally, without any defense,
offset or counterclaim of any kind or nature whatsoever.
3. Amendments to Loan
Agreement.
3.1 Section 2.2(a) of the Loan Agreement is
hereby deleted in its entirety and replaced with the following,
effective as of the date hereof:
“(a) Subject to
Section 2.3(b), the principal amount outstanding under Growth
Capital Line B shall accrue interest at a per annum rate equal to
the Prime Rate plus 0.25%, which shall be fixed as of
April 10, 2009, which interest shall be payable monthly in
accordance with Section 2.3(f) below; provided ,
however , that if Borrower fails to maintain the lesser of
(i) $10,000,000 or (ii) 100% of all of its invested cash
balances in the Designated Deposit Account and/or a sweep
investment account at Bank, the interest rate will be permanently
increased to the Prime Rate plus two percent (2.0%), fixed as of
the date such accounts fall below the thresholds set forth
above.”
3.2 A new Section 2.4 is hereby inserted into
the Loan Agreement in its proper numeric order as
follows:
“ 2.4 Interest on Pledged
CD; Payment of Interest on Pledged CD.
(a) Each Pledged CD shall bear
interest at the Pledged CD Rate. Borrower shall specify the initial
CD Interest Period applicable to the Pledged CD(s) in connection
with the notice of delivery of the Pledged CD in the form of
Schedule A attached hereto. Thereafter, Borrower shall notify Bank
not less than five (5) Business Days (or such lesser period of
time as may be stated in Bank’s Deposit Agreement and
Disclosure Statement) prior to the end of each CD Interest Period
of the duration of the subsequent CD Interest Period with respect
to such Pledged CD. Unless Bank has otherwise agreed that a Pledged
CD shall not be renewed upon the expiration of its CD Interest
Period, if Borrower shall have failed to timely select a new CD
Interest Period upon the expiration of any CD Interest Period,
Borrower shall be deemed to have selected a like period for such
new CD Interest Period.
(b) So long as (i) the
aggregate value of the Pledged CDs in which Bank has a perfected
security interest is equal to, at a minimum, the Required Amount
and (ii) no Event of Default has occurred and is continuing,
Bank shall remit to Borrower the accrued interest on any Pledged CD
in accordance with the terms of the Bank’s Deposit Agreement
and Disclosure Statement.”
3.3 The following new paragraphs are hereby inserted
following the existing first paragraph of Section 4.1 of the
Loan Agreement, as follows:
“In addition to the foregoing,
Borrower hereby assigns, pledges, delivers and transfers to Bank,
and hereby grants to Bank, a continuing first priority security
interest in and against all right, title and interest of the
following, whether now or hereafter existing or acquired by
Borrower: any Pledged CD issued from time to time and general
intangibles arising therefrom or relating
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thereto; and all documents,
instruments and agreements evidencing the same; and all extensions,
renewals, modifications and replacements of the foregoing; and any
interest or other amounts payable in connection therewith, all
proceeds of the foregoing (including whatever is receivable or
received when any Pledged CD or proceeds is invested, sold,
collected, exchanged, returned, substituted or otherwise disposed
of, whether such disposition is voluntary or involuntary, including
rights to payment and return premiums and insurance proceeds under
insurance with respect to any Pledged CD, and all rights payment
with respect to any cause of action affecting or relating to any
Pledged CD).
The parties to this Agreement do not
intend that Borrower’s delivery of any Pledged CD to Bank as
herein provided will constitute an advance payment of any
Obligations or liquidated damages, nor do the parties intend that
any Pledged CD increase the dollar amount of the
Obligations.”
3.4 A new Section 6.10 is hereby inserted into
the Loan Agreement in its proper numeric order, as
follows:
“ 6.10 Value of Pledged
CD . Until the Obligations have been indefeasibly paid in
full, in cash, maintain the Value of any Pledged CD(s) at Bank in
an amount equal to or greater than the Required
Amount.”
3.5 A new Section 12.10 is hereby added to the
Loan Agreement, in its proper numerical order, as
follows:
“12.10 Co-Borrower
Provisions.
(a) Subrogation and Similar
Rights . Notwithstanding any other provision of this Agreement
or any other Loan Document, until payment to Bank in full and
performance of all Obligations, each Borrower irrevocably waives
all rights that it may have at law or in equity (including, without
limitation, any law subrogating the Borrower to the rights of Bank
under the Loan Documents) to seek contribution, indemnification, or
any other form of reimbursement from any other Borrower, or any
other Person now or hereafter primarily or secondarily liable for
any of the Obligations, for any payment made by the Borrower with
respect to the Obligations in connection with the Loan Documents or
otherwise and all rights that it might have to benefit from, or to
participate in, any security for the Obligations as a result of any
payment made by the Borrower with respect to the Obligations in
connection with the Loan Documents or otherwise. Any agreement
providing for indemnification, reimbursement or any other
arrangement prohibited under this Section 12.10 shall be null
and void. If any payment is made to a Borrower in contravention of
this Section 12.10, such Borrower shall hold such payment in
trust for Bank and such payment shall be promptly delivered to Bank
for application to the Obligations, whether matured or
unmatured.
(b) Waivers of Notice . Each
Borrower waives notice of acceptance hereof; notice of the
existence, creation or acquisition of any of the Obligations;
notice of an Event of Default; notice of the amount of the
Obligations
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outstanding at any time; notice of
intent to accelerate; notice of acceleration; notice of any adverse
change in the financial condition of any other Borrower or of any
other fact that might increase the Borrower’s risk;
presentment for payment; demand; protest and notice thereof as to
any instrument; default; and all other notices and demands to which
the Borrower would otherwise be entitled. Each Borrower waives any
defense arising from any defense of any other Borrower, or by
reason of the cessation from any cause whatsoever of the liability
of any other Borrower. Bank’s failure at any time to require
strict performance by any Borrower of any provision of the Loan
Documents shall not waive, alter or diminish any right of Bank
thereafter to demand strict compliance and performance therewith.
Nothing contained herein shall prevent Bank from foreclosing on the
Lien of any deed of trust, mortgage or other security instrument,
or exercising any rights available thereunder, and the exercise of
any such rights shall not constitute a legal or equitable discharge
of any Borrower. Each Borrower also waives any defense arising from
any act or omission of Bank that changes the scope of the
Borrower’s risks hereunder. Each Borrower hereby waives any
righ
