EXHIBIT 10.1
WAIVER AND
AMENDMENT
TO
LOAN AND SECURITY
AGREEMENT
T
HIS
W
AIVER
AND
A
MENDMENT
TO
L
OAN
AND
S
ECURITY
A
GREEMENT (this “
Amendment ”) is entered into as of this
15 th day of September, 2008, by and
among Bioject Medical Technologies, Inc., an Oregon corporation and
Bioject, Inc., each with its principal place of business at 20245
S.W. 95th Ave., Tualatin, OR 97062 USA (individually and
collectively, “Borrower”) and P ARTNERS FOR G ROWTH , L.P. (“PFG”).
Capitalized terms used herein without definition shall have the
same meanings given them in the Loan Agreement (as defined
below).
R ECITALS
A . Borrower and PFG have entered into that
certain Loan and Security Agreement dated as of August 31,
2007 (as may be amended, restated, or otherwise modified, the
“ 2007 Loan Agreement ”) pursuant to
which PFG extended advances of money, all of which were repaid by
Borrower on September 3, 2008.
B . In addition to the 2007 Loan Agreement,
Borrower and PFG are party to a Term Loan and Security Agreement
dated as of March 29, 2006 (the “ Convertible Loan
Agreement ”), under which there is outstanding
$1,250,000 in principal (prior to any payment referred to in
Section 7.5 hereof) and $2,604.17 in accrued and unpaid
interest as of September 15, 2008, a Loan and Security
Agreement dated as of December 11, 2006 (the “
Revolving Loan Agreement ”), repaid by Borrower
on June 11, 2008, and associated cross-corporate guarantees
and security agreements (the “ Loan Documents
” ).
C . Borrower and PFG entered into that certain
Forbearance No. 1, Limited Waiver and Modification to Loan and
Security Agreement dated as of November 19, 2007, as amended
by that certain Amendment to Forbearance No. 1, Limited Waiver
and Modification to Loan and Security Agreement entered into as of
December 19, 2007 (collectively, the “ 2007
Forbearance ”).
D . Borrower and PFG entered into that certain
Forbearance No. 2, Limited Waiver and Modification to Loan and
Security Agreement on May 30, 2008 (the “
Forbearance ”), pursuant to which the parties
entered into certain agreements regarding the conditional
restructure of the Convertible Loan Agreement on or before
September 15, 2008.
E . But for the Forbearance, Borrower would be in
default of the financial covenants set forth in the Loan Documents
(the “ Specified Default ”).
F . The Forbearance Period under the Forbearance
ends September 15, 2008 and Borrower (a) acknowledges the
Specified Default, (b) desires that the Convertible Loan
Agreement be amended as contemplated in the Forbearance, and
(c) desires that PFG waive the Specified Default upon the
terms and conditions set forth herein.
G . Subject to the representations and warranties
of Borrower herein and upon the terms and conditions set forth in
this Amendment, PFG is willing to amend the terms of the
Convertible Loan Agreement and waive the Specified
Default.
A GREEMENT
NOW, THEREFORE,
in consideration of the foregoing
Recitals, incorporated by reference herein, and intending to be
legally bound, the parties hereto agree as follows:
1. E VENT OF D EFAULT . Borrower acknowledges the Specified
Default.
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2. W AIVER OF PFG .
Subject to Borrower’s performance of this Amendment and the
satisfaction of the conditions set forth in Section 7 hereof,
PFG waives Borrower’s non-compliance up to and including the
date hereof with the Loan Documents giving rise to the Specified
Default and agrees to not exercise remedies under the Loan
Documents as a result thereof. In the event of a breach by Borrower
of any of the terms set forth in this Amendment, a failure of any
condition set forth in Section 7, or the occurrence after the
date hereof of any Default under the Convertible Loan Agreement,
associated security agreements and any associated cross-corporate
guaranties, PFG may exercise any remedies available to PFG under
the Convertible Loan Agreement, associated security agreements and
any associated cross-corporate guaranties and under applicable law.
For purposes of this Amendment, the “ Specified
Default ” shall mean the specific historical Default
that PFG is agreeing to waive hereunder as set forth under Recital
E, above.
3 . A MENDMENT OF C ONVERTIBLE L OAN A GREEMENT . The
Convertible Loan Agreement is hereby amended prospectively as
follows:
3.1 Acknowledgment of
Borrower. Borrower
acknowledges its receipt from PFG at the initial Closing of the
Convertible Loan the sum of $1,250,000 and that such principal
amount remains outstanding on the date hereof (before the specified
repayments required to be made under Section 7.5 as conditions
to this Amendment). The relevant provisions of the Convertible Loan
Agreement shall be construed accordingly.
3.2 Repayment.
The first two paragraphs of
Section 1 of the Schedule consisting of approximately four
lines of text (under the general heading “LOAN (Section
1.1)”) shall be replaced with the following:
1. LOAN (Section 1.1):
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The Loan shall
consist of a term loan in the original principal amount of
$1,250,000, funded in its
entirety on or about March 29, 2006.
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Repayment:
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The principal
amount of the Loan shall be repaid as follows:
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(1) $137,500 on
September 15, 2008;
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(2) $137,500 on
October 1, 2008;
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(3) in monthly
installments of $55,000 commencing October 1, 2008 (and, for the
avoidance of doubt, the $55,000 payment due on October 1, 2008 is
in addition to the payment required under clause (2), above);
and
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(4) a final
principal payment equal to the principal amount outstanding at the
Maturity Date, together with accrued interest thereon, and any and
all other monetary Obligations due under this Loan, on the Maturity
Date.
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Notwithstanding
the requirement to tender payments under clause (3), above, within
three (3) Business Days of the end of any month in which a payment
is due under clause (3), above, PFG may notify Borrower that it is
not requiring a regularly-scheduled principal payment to be made
for such month. If Borrower makes such regularly-scheduled
principal payment notwithstanding PFG’s notice that no such
payment for the month will be required, or Borrower makes any
non-scheduled payment of principal (collectively
“Non-Required Principal Payments”), such Non-Required
Principal Payments shall be treated as Prepayments under the
applicable clause of this Schedule 1, below.
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Any reduction
in the principal amount of the Loan due to the scheduled principal
payments specified above made by Borrower shall reduce the amount
of the Loan eligible for PFG conversion into Borrower’s
equity
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securities
under Section 1 of this Schedule in the provisions identified as
“PFG Conversion” and “BMTI-Initiated
Conversion”.”
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3.3 Prepayment.
The clause entitled
“Prepayment” in Section 1 of the Schedule is
amended in its entirety as follows:
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“Prepayment:
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Borrower may
make a Non-Required Principal Payment, plus all accrued and unpaid
interest thereon in whole or in part at any time, without penalty,
subject to compliance with the following provisions. At the time
any Non-Required Principal Payment is made, BMTI shall issue PFG a
warrant to purchase that number of shares of BMTI’s common
stock as would be issued at such time if BMTI or PFG had converted
that portion of the Loan that is equal to the prepayment (each a
“Warrant” and all such Warrants collectively,
“Warrants”). The exercise price of the Warrant(s) shall
be equal to the Conversion Price. The expiration date of each
Warrant issued under this clause shall be the Maturity Date
(ignoring any early termination of the Loan due to prepayment or
otherwise). The form of Warrant shall be in substantially the form
of the warrant issued to PFG in connection with the Existing PFG
Loans (as defined in Section 8 of this Schedule).”
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3.4 Interest Rate
. The first paragraph of
Section 2 of the Schedule to the Convertible Loan Agreement is
amended to read in its entirety as follows:
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“A rate
equal to the Prime Rate plus three percent (3%) per annum,
floating, and applied to the average daily aggregate amount
outstanding under this Agreement each month. Interest shall be
calculated on the basis of a 360-day year and a year of twelve
months of 30 days each for the actual number of days elapsed.
Accrued interest for each month shall be payable monthly, on the
first day of each month for interest accrued during the prior
month.”
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3.5 Financial
Covenants . To
Section 5 of the Convertible Loan Agreement are added the
following new provisions:
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“Minimum Liquidity:
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Borrower shall
maintain at all times, to be tested as of the last day of each
month, unless otherwise noted:
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Liquidity
Ratio . A minimum
Liquidity Ratio of 1.50 : 1.00. “Liquidity Ratio
” means a ratio of (a) Borrower’s unrestricted Cash
maintained at or through financial institutions, plus
Borrower’s Eligible Accounts, to (b) outstanding
monetary Obligations owed to PFG.
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“
Cash ” means (i) funds deposited with depositary
institutions, (ii) marketable direct obligations issued or
unconditionally guaranteed by the United States or any agency or
any State thereof having maturities of not more than one (1) year
from the date of acquisition; (iii) commercial paper maturing
no more than one (1) year after its creation and having the highest
rating from either Standard & Poor’s Ratings Group or
Moody’s Investors Service, Inc., (iv) bank certificates of
deposit issued maturing no more than one (1) year after issue; and
(v) money market funds at least ninety-five percent (95%) of the
assets of which constitute cash equivalents of the kinds described
in clauses (ii) through (iv) of this definition.”
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3.6 Definitions.
The following new definitions shall
be added to Section 7 (“Definitions”) of the
Convertible Loan Agreement:
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“ Eligible Accounts
” means Accounts and General Intangibles arising in the
ordinary course of Borrower’s business from the sale of goods
or the rendition of services, or the non-exclusive licensing of
Intellectual Property, which PFG, in its good faith business
judgment, shall deem eligible for borrowing. Without limiting the
fact that the determination of which Accounts are eligible for
borrowing is a matter of PFG’s good faith business judgment,
the following (the “ Minimum Eligibility Requirements
”) are the minimum requirements for a Account to be an
Eligible Account:
(i) the Account must not be
outstanding for more than 90 days from its invoice date (the
“ Eligibility Period ”),
(ii) the Account must not represent
progress billings, credit balances, accounting entries made to
nullify a prior entry (contras), or be due under a fulfillment or
requirements contract with the Account Debtor,
(iii) the Account must not be
subject to any contingencies (including Accounts arising from sales
on consignment, guaranteed sale or other terms pursuant to which
payment by the Account Debtor may be conditional),
(iv) the Account must not be owing
from an Account Debtor with whom Borrower has any material dispute
(whether or not relating to the particular Account),
(v) the Account must not be owing
from an Affiliate of Borrower,
(vi) the Account must not be owing
from an Account Debtor which is subject to any insolvency or
bankruptcy proceeding, or whose financial condition is not
acceptable to PFG in its good faith business judgment, or which
fails or goes out of a material portion of its business,
(vii) the Account must not be owing
from the United States or any department, agency or instrumentality
thereof (“Government Accounts”), to the extent the
aggregate of such Government Accounts exceeds 25% of Eligible
Accounts at any time (unless there has been compliance, to
PFG’s satisfaction, with the United States Assignment of
Claims Act) and, for the avoidance of doubt, any Government
Accounts in excess of such threshold shall not be treated as
Eligible Account unless PFG, in its sole discretion, otherwise
expressly permits,
(viii) the Account must not be owing
from an Account Debtor located outside the United States or Canada
(unless an Excepted Concentration Account, pre-approved by PFG in
its discretion in writing, or backed by a letter of credit
satisfactory to PFG, or FCIA insured satisfactory to
PFG),
(xi) the Account must not be owing
from an Account debtor whose accounts receivable aged over 90 days
from invoice date exceed 50% of all accounts receivable from such
account debtor, and in such case, no account receivable of such
account debtor would be eligible for financing hereunder;
and
(x) the Account must not be owing
from an Account Debtor to whom Borrower is or may be liable for
goods purchased from such Account Debtor or otherwise (but, in such
case, the Account will be deemed not eligible only to the extent of
any amounts owed by Borrower to such Account Debtor).
Accounts owing from one Account
Debtor will not be deemed Eligible Accounts to the extent they
exceed 25% of the total Accounts outstanding; provided that the
foregoing shall not include Excepted Concentration Accounts. In
addition, if more than 50% of the Accounts owing from an Account
Debtor are outstanding for a period longer than their Eligibility
Period (without regard to unapplied credits) or are otherwise not
eligible Accounts, then all Accounts owing from that Account Debtor
will be deemed ineligible for borrowing. PFG may, from time to
time, in its good faith business judgment, revise the Minimum
Eligibility Requirements, upon written notice to
Borrower.
“ Excepted Concentration
Accounts ” means Accounts Receivable from Merial, Amgen,
Inc. (AMGN: NASDAQ), Ferring and Serono, Inc. (SRA:
NYSE).
“ Minimum Eligibility
Requirements ” is defined in the definition of
“Eligible Accounts” above.
3.7 Provisions Dealing with
Accounts. To
Section 4 of the Convertible Loan Agreement are added the
following new provisions:
“4.10 Representations
Relating to Accounts. Borrower represents and warrants to PFG as
follows: Each Account used by Borrower to determine its compliance
with the financial covenant set forth in Section 5 of the
Schedule shall, (i) represent an undisputed bona fide existing
unconditional obligation of the Account Debtor created by the sale,
delivery, and acceptance of goods or the rendition of services, or
the licensing of Intellectual
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Property, in the ordinary course of
Borrower’s business, and (ii) meet the Minimum
Eligibility Requirements set forth in Section 8
below.
4.11 Representations Relating
to Documents and Legal Compliance. Borrower represents and warrants to PFG as
follows: All statements made and all unpaid balances appearing in
all invoices, instruments and other documents evidencing the
Accounts are and shall be true and correct in all material respects
and all such invoices, instruments and other documents and all of
Borrower’s books and records are and shall be genuine and in
all respects what they purport to be. All sales and other
transactions underlying or giving rise to each Account shall comply
in all material respects with all applicable laws and governmental
rules and regulations. To the best of Borrower’s knowledge,
all signatures and endorsements on all documents, instruments, and
agreements relating to all Accounts are and shall be genuine, and
all such documents, instruments and agreements are and shall be
legally enforceable in accordance with their terms.
4.12 Documents Relating to
Accounts. If
requested by PFG, Borrower shall furnish PFG with copies (or, at
PFG’s request, originals) of all contracts, orders, invoices,
and other similar documents, and all shipping instructions,
delivery receipts, bills of lading, and other evidence of
delivery,
