Loan Agreement between Fund for Industrial Growth and Receptor Technologies A/S for Copenhagen Lead Discovery Project
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This agreement is between the Fund for Industrial Growth and Receptor Technologies A/S to finance the Copenhagen Lead Discovery Project. The Fund will provide a loan of DKK 44,573,063, subject to conditions such as capital requirements, management appointments, and financial documentation. The loan is repayable in quarterly installments, with interest, and is secured by project rights. The agreement includes requirements for ongoing project appraisals, minimum staffing, and capital injections from investors. Failure to meet these conditions may result in full loan repayment. The project runs from January 1, 1997, to December 31, 1999.
EX-10.13 21 a2033472zex-10_13.txt EX-10.13 1 Vaekstfonden Tagensvej 137 DK-2200 Kobenhaven Telephone 35868635 Facsimile 35868636 Receptor Technologies A/S December 4, 1996 Ref: MN/SG Proj. NR. 1529 Re: Project Copenhagen Lead Discovery Project The Fund for Industrial Growth is prepared to finance your development project subject to the following conditions being met: - - Receptor Technologies A/S shall be incorporated with a paid up share capital of DKK 500,000 and shall have appointed a full time Manager; - - A revised balance sheet for Receptor Technologies Inc. per 30th September 1996 or later which does not deviate appreciably from the internal statements provided in the application submitted; - - Letter of Support from the parent company, Receptor Technologies Inc.; - - Receptor Technologies Inc. shall have received a total capital injection of USD 3.0m of which a minimum of USD 2.0m shall derive from Dansk Kapitalanlaeg A/S and/or other Danish investors. Said capital injection shall be documented with an auditor's endorsement showing that the capital has been paid in cash to the company; - - At the date of payment of the first tranche of the loan, the Fund for Industrial Growth shall have accepted the structure of the ownership and Board of Receptor Technologies Inc. as well as Receptor Technologies A/S; - - Signed mortgage document pledging the rights in the project. Before payment of the second tranche of the loan, said mortgage shall have been registered without endorsement; And the following special terms shall be applicable to the loan: - - The borrower may as part of project development conclude a licence agreement with Receptor Technologies Inc. or other parties for the rights to use Patent or other intellectual property rights. The Licence shall contain a statement that said rights may be assigned to the Fund for Industrial Growth on unaltered terms if the Fund for Industrial Growth takes over the project by agreement or in accordance with its mortgage rights. Such licence agreement shall be approved by the Fund for Industrial Growth; - - The loan shall be liable to full redemption if the number of employees engaged in Research and Development in Receptor Technologies A/S in the period from 1st January 1998 until the loan has been redeemed does not comprise at least eight persons; - - Before the portion of the loan paid out exceeds DKK 15m, and DKK 30m respectively, the Fund for Industrial Growth shall undertake an appraisal of the project and ensure that Receptor Technologies Inc.'s financial situation continues to assure the project's completion. Appraisal shall include an assessment of to what extent it is still probable that the project will lead to increasing activity in Denmark so that there is still a basis for a viable Danish enterprise. Until appraisal has been conducted with what the Fund for Industrial Growth deems a positive result, no more of the loan shall be payable; - - The loan shall be liable to full redemption should Receptor Technologies Inc. not have gained by 1st July 1997 a total capital injection of at least USD 6.0m, including a minimum of USD 2.0m from Dansk Kapitalanlaeg A/S and/or other Danish investors. Said capital shall be documented with an auditor's endorsement showing that it has been paid in cash to the company. We enclose: 2 - - Loan agreement in duplicate, - - Fund for Industrial Growth's standard terms for loans, - - Budget schedule - - Repayment schedule - - Mortgage document - - Information sheet on stamp duty, - - Pledge Declaration, - - Letter of Support, - - Documentation for quarterly reports - - Auditor's endorsement. If the loan agreement is acceptable to you, before 1st January 1997, please sign and return: - - One copy of the loan agreement, - - Mortgage document, - - Pledge Declaration - - A certificate less than one year old of officers empowered to sign for the company - - Letter of Support - - Documentation of compliance with the terms of payment, And state: - - Bank, sort code and account numbers to which it is wished payment shall be transferred. We look forward to continuing to work together. Yours faithfully, Fund for Industrial Growth Bent Kiemer Maja Nielsen Manager Industrial Growth Consultant 1 LOAN AGREEMENT Borrower: Receptor Technologies A/S Company Registration No. VAT No. Hereby acknowledges its debt to Lender: Fund for Industrial Growth, Tagensvej 137 DK-2200 Copenhagen N Project No. and Title K--1529 Copenhagen Lead Discovery Project
* Costs for work conducted before the starting date of the project not co-financed. ** Interest charged quarterly in arrears. *** Repayments listed on the attached repayment schedule **** See section on repayment on page 2 2 PRECONDITIONS The loan is made on condition that: - - The project is undertaken as specified in the Application on the basis of which the Fund for Industrial Growth has granted the loan. - - The project's budget is complied with, cf Budget Schedule from the Fund for Industrial Growth - - The borrower shall be obliged to put up as surety Patent Applications based on the project. SPECIAL TERMS: The provisions noted below shall be applicable irrespective of their conflicting with the standard conditions of the loan: - - The borrower may as part of project development conclude a licence agreement with Receptor Technologies Inc. or other parties for the rights to exploit Patent or other intellectual property rights. The Licence shall contain a statement that said rights may be assigned to the Fund for Industrial Growth on unaltered terms if the Fund for Industrial Growth takes over the project by agreement or in accordance with its mortgage rights. Such licence agreement shall be approved by the Fund for Industrial Growth; - - The loan shall be liable to full redemption if the number of employees engaged in Research and Development in Receptor Technologies A/S in the period from 1st January 1998 until the loan has been redeemed does not comprise at least eight persons; - - Before the portion of the loan paid out exceeds DKK 15m and DKK 30m respectively, the Fund for Industrial Growth shall undertake an appraisal of the project and ensure that Receptor Technologies Inc.'s financial situation continues to assure the project's completion. Appraisal shall include assessment of to what extent it is still probable that the project will lead to increasing activity in Denmark so that there is still a basis for a viable Danish enterprise. Until appraisal has been conducted with what the Fund for Industrial Growth deems a positive result, no more of the loan shall be payable; - - The loan shall be liable to full redemption should Receptor Technologies Inc. not have gained by 1st July 1997 a total capital injection of at least USD 6.0m, including a minimum of USD 2.0m from Dansk Kapitalanlaeg A/S and/or other Danish investors. Capital injection shall be documented with an auditor's endorsement showing that the capital injection has been paid in cash to the company. TERMS FOR PAYMENT OF THE FIRST TRANCHE: The first tranche shall be payable when the Fund for Industrial Growth has received this agreement duly executed together with the other details and documentation stated in the accompanying letter, and when the following terms have been complied with: - - Receptor Technologies A/S shall be incorporated with a paid up share capital of DKK 500,000 and shall have appointed a full time Manager; - - A revised balance sheet for Receptor Technologies Inc. per 30th September 1996 or later which does not deviate appreciably from the internal statements provided in the application submitted; - - Letter of Support from the parent company, Receptor Technologies Inc.; - - Receptor Technologies Inc. shall have received a total capital injection of USD 3.0m of which a minimum of USD 2.0m shall derive from Dansk Kapitalanlaeg A/S and/or other Danish investors. Said capital injection shall be documented with an auditor's endorsement showing that the capital injection has been paid in cash to the company; 3 - - At the date of payment of the first tranche of the loan, the Fund for Industrial Growth shall have accepted the structure of the ownership and Board of Receptor Technologies Inc. as well as Receptor Technologies A/S; - - Signed mortgage document pledging the rights in the project. Before payment of the second tranche of the loan, said mortgage shall have been registered without endorsement; SECURITY Mortgage for DKK 44,573,063 with surety in the rights in the project. REPAYMENT The loan shall be repaid as stated in the loan agreement and the repayment schedule. Due amounts shall be payable via the Banks Payment System (PBS). Repayment has been determined on the basis of royalty due on the project's forecast turnover. The rate of royalty is stated on page 1 of this loan agreement. If on the last due date for repayment there is an outstanding amount, repayments of the loan shall continue with the same due dates as stated in the loan agreement and at the same rate as that falling due on the last repayment date, cf. repayment schedule. If the results of the project are wholly or partially used in other products, markets, services or projects, Receptor Technologies Inc.'s and Receptor Technologies A/S' turnover therefrom shall be fully included in the turnover on which royalty is calculated. Should proprietorship of patents, rights or know-how in the project or parts thereof be sold or assigned, a royalty shall be payable to the Fund for Industrial Growth of 25% of the gross revenue. DEBT REDEMPTION The borrower may at any time request its outstanding debt be redeemed against assignment of all rights the project, including all sales rights in accordance with the section on repayment. Receptor Technologies Inc. and Receptor Technologies A/S shall remain liable for an amount corresponding to the royalty on all turnover the project has engendered. The royalty rate is stated on page 1. The royalty amount shall be regulated in the amount of repayments; regulation shall however not include repayments due more than one year before the Fund for Industrial Growth received the application for debt redemption. RIGHTS The borrower has stated that the rights in the development project belong solely to the borrower. DECLARATION The borrower hereby declares that it has not applied for nor received other public funds for this or associated projects without having informed the Fund or Industrial Growth in writing OTHER TERMS The borrower has received: - Repayment schedule dated 17 October 1996, - Budget schedule from the Fund for Industrial Growth and - The Fund for Industrial Growth's standard terms of loans, August 1995, which shall be applicable to the loan without further signature. CHOICE OF INTEREST Interest on the loan is to be: / /Fixed rate / /Variable rate Selection shall apply to the whole term of the loan. The loan agreement shall be executed in duplicate. 4 Date Date 4th December 1996 Receptor Technologies A/S Fund for Industrial Growth - --------------------------------- ------------------------------------- (Names to be also typed) Bent Kiemer Maja Nielsen In Witness of the Borrower: (Please type and sign): Name Name Occupation Occupation Address Address Town/Post code Town/Post code Signature Signature 1 REPAYMENT SCHEDULE Company name Receptor Technologies A/S Loan for Research and Development Project No. 1529 Project title Copenhagen Lead Discovery Project Principal DKK 44,573,063 interest calculated for the term of the project: 14,750,705 total repayments 59,323,768 This repayment schedule is based on fixed interest and forecasts for turnover created by the project:
Repayments shall accordingly be:
2 [SUPERCEDES PREVIOUS REPAYMENT SCHEDULE] REPAYMENT SCHEDULE November 10, 1999
The repayment schedule has been made on the basis of a fixed interest and on the Basis of the projected return made from the project
The repayments are hereafter:
3 ATTACHMENT NO 1 FOR LOAN AGREEMENT OF FEBRUARY 19, 1997 Debtor ACADIA Pharmaceuticals A/S Project No. 1529-1 Lead Discovery Project Loan in DKK 44,573,063 Project Period The project period ends on December 31, 2000 Roaylty The roaylty is a fixed percentage of 4.91 Repayment The repayment schedule for the loan is changed with effect from January 1, 1999 At the same time, repayment schedule of October 17, 1996 is annulled. Repayments of the loan are specified in the attached repayment schedule dated November 10, 1999, which is thus valid. All other conditions of the loan agreement are still in force. ACADIA Pharmaceuticals have received: Repayment schedule dated November 12, 1999 Date November 12, 1999 ACADIA Pharmaceuticals Vaekstfonden (Growth Fund) /S/ ULI HACKSELL /S/ CLAUS VESTERLIND /S/ NIELS K. LAUERSEN - --------------------------- --------------------- ---------------------- Uli Hacksell Claus Vesterlind Niels K. Lauersen As witnesses for ACADIA Pharmaceuticals
/S/ LOTTE S0NDERBJERG /S/ KATE MORTENSEN --------------------- ------------------- Signature Signature 4 - -------------------------------------------------------------------------------------------------------------------------------
Periodisation - ---------------------------------------------------------------------------------------------------------------------------------- Period P1 P2 P3 P4 B1 B2 B3 B4 B5 B6 B7
Project budget - ------------------------------------------------------------------------------------------------------------------------------------
Development Project - effects - ------------------------------------------------------------------------------------------------------------------------------------
1 Stamp duty DKK 150 Registration fee DKK 700 Total DKK 350 MORTGAGE DEED (PERSONAL) MORTGAGOR'S NAME/ADDRESS Receptor Technologies A/S Home Address COMPANY REGISTRATION NO. MORTGAGEE The same, or any party to whom this mortgage may be assigned, by way of surety or in any other way, without personal liability. PRINCIPLE DKK 44,573,063 (Forty four million, five hundred and seventy three thousand and sixty three) INTEREST AND TERMS OF PAYMENT 16% shall be payable on the mortgage from drawdown. Interest shall be payable every 11th June and 11th December, semi-annually in arrears, the first time on the first due date after drawdown. PROPERTY MORTGAGED All the intellectual property rights attaching to the mortgagor's development of active agents for treatment of disease if genes with coded receptors are detected, created within Project No. 1529, including all documentation, software descriptions, source codes and all results of any kind which may belong to or are part of the project, including all descriptions, diagrams, prototypes and the developed product and other possible products which are the result of the above work on development. Rights in the mortgage also include the fund of technical knowhow covered by the project. Further, the mortgage covers all income from the pledged property, including leases, rental and insurance sums. PRIOR CHARGES None. POWER OF ATTORNEY The Fund for Industrial Growth is authorised on my behalf to sign endorsements or any kind to this mortgage deed, including endorsements of receipt, transfer, moderation or relaxation. ADDRESS FOR ANY LEGAL PROCEEDINGS, ETC. Fund for Industrial Growth, Tagensvej 137, DK-2200 Copenhagen N OTHER CREDIT INFORMATION Is the mortgage covered by the Credit Agreements Act |_| Yes |_| No TERMINATION The mortgage may be terminated at any time by the mortgagor or mortgagee without notice. NB Change of address shall be reported to the Mortgagee. If payment of interest and redemption payments is delayed, the mortgagee can require repayment of capital, cf next page, Item 7a. The Ministry of Justice's Mortgage Schedule "Losore" (last page) shall be also applicable. 2 Insofar as the mortgage deed is only signed by the mortgagor, said mortgagor states that he/she is unmarried or that the mortgaged property is not subject to Section 19, Judicial Aspects of Marriage Act. Date Receptor Technologies A/S Mortgagor's signature _____________________________ Name to be typed/capitals If the mortgagor is married, the undersigned spouse hereby agrees to the mortgage. If the spouse is a co-owner of the property, said spouse should sign as debtor and mortgagor. Spouse _____________________________ As witness that this a true signature, the date is correct and that the undersigned has attained majority. (Please type): Name Name Occupation Occupation Address Address Town/Post code Town/Post code Signature Signature 1 MINISTRY OF JUSTICE - TERMS FOR PLEDGED PROPERTY 1. Payments made in accordance with this mortgage shall be sent post-paid to the mortgagee's address as stated on page 1, or at another place within the borders of the country as stated by the mortgage. 2. All payments shall be deemed to be in due time if paid within seven days after the due date; for settlement date payments, within seven days of the first settlement date. If the due date or the last due settlement day is on a Holy Day, a Saturday or Constitution Day 5th June, the due day shall be the following weekday. The same shall apply to the date of expiry of all deadlines in this mortgage. Payment made within the above limits to a bank in the country, except Greenland, for credit to the place of payment, shall be proper payment. 3. The mortgagor is obliged to inform the mortgagee of a change of address. This may not be done on a payment slip if it is stated on the slip that messages to the payee shall not be made thereon. Communications from the mortgagee, including notice of termination, may be sent or served at the most recent residence of which the mortgagee has been informed, irrespective of change of address, unless the mortgagee is aware of the mortgagor's new address. Should the mortgagee become aware that notice of termination has not reached the mortgagor as a result of change of address, the mortgagee shall immediately serve notice of termination on the mortgagor if the mortgagor's new residence is stated on the Civil Register or other easily accessible source. 4. The mortgagor declares that there is no other party having rights by way of a mortgage deed, contract of sale, leasing contract or otherwise which could prejudice the preferential position of this mortgage. 5. The mortgager undertakes to keep the pledged property properly insured for fire risk. 6. The mortgagee is entitled in accordance with the mortgage deed to payment of principal, interest and other amounts of a comparable nature and to interest surcharge. The mortgagee is further entitled to recover costs properly incurred in serving notice of termination, recovery and in protecting the mortgagee's interests in the event of legal proceedings against the pledged property by a third party. 7. Irrespective of non-terminability or terms of notice, the mortgagee can demand redemption of the capital as a result of the following: (a) If interest or repayments are not paid by the last due date. It is however a condition for requiring redemption of the principle that the mortgagor has not paid interest and redemption within seven days of a written request therefor having been sent or served. The mortgagee's demand shall be made after the last due date for payment and shall explicitly state that a demand will be made for the principle to be repaid if interest and repayment are not paid by the expiry of the deadline, cf. Item 2 thereon; (b) If the pledged property has seriously deteriorated or been significantly mistreated without there having been provided on demand sufficient surety; (c) If the mortgagor refuses to grant access to the mortgagee or its representative to check on the pledged property; 2 (d) If the mortgagor does not show on request that the pledged property is properly insured for fire risk, and (e) If the pledged property or significant parts thereof are assigned to a third party or sold at compulsory auction. 1 INFORMATION ON DECLARATIONS OF VALUE FOR MORTGAGES In accordance with Section 57 of the Stamp Duty Act, Stamp Duty of 1.5% of the principle is payable on mortgages. There is an exception to this rule in Section 57 Sec. 4 of the Stamp Duty Act in which it is possible to elect to pay Stamp Duty on the value of the pledged property if it is lower than the principle. Since the Fund for Industrial Growth only has security in development projects, it is thus possible to pay Stamp Duty on the value of the development project at the time it is pledged. If the development project is still only at the concept stage at the time it is pledged, the value can often be set very low. If the development project is based on a bought-in Patent, the value can most often be set at the cost of acquiring the Patent. In applying the value of the pledged property instead of the principal of the mortgage as a basis for calculating Stamp Duty, there can often be considerable savings thereon. It is a precondition therefor that the mortgagor shall make a solemn declaration of the pledged property's lower value. This Declaration of Value should be made at the top of page 1 of the mortgage deed. In order to reduce your costs, the Fund for Industrial Growth will endeavour to use this option for saving on Stamp Duty. It should be noted that the Authorities administering Stamp Duty have not yet taken a position on the option of Declarations of Value for mortgages. Accordingly the Declaration of Value may not be recognised. Fund for Industrial Growth November 1993 1 MORTGAGE DECLARATION MORTGAGOR Receptor Technologies A/S Address MORTGAGEE Fund for Industrial Growth, Tagensvej 137, DK-2200 Copenhagen N MORTGAGE As security for the mortgagor's indebtedness to the mortgagee pursuant to loan agreement 1529, a pledge is granted with a first charge in the amount of DKK 44,573,063 in the project for developing a rapid method for identifying active agents for the treatment of disease, if genes with coded receptors are detected. The pledge shall be as surety for redemption of the loan, interest and costs. Rights in the mortgage shall be extended in addition to the amount stated in the mortgage by up to five years. Said extension shall be calculated on the basis of the original sum at the rate of interest stated in the mortgage. The extended term shall begin when the mortgage is pledged to the Fund for Industrial Growth and shall remain in force until final redemption of the sum, although for a maximum of five years. TERMS Fund for Industrial Growth's standard terms for loans, August 1995. DATE AS MORTGAGOR Receptor Technologies A/S Signature ----------------------------------- Name to be also typed In Witness of the Borrower: (Please type and sign): Name Name Occupation Occupation Address Address Town/Post code Town/Post code Signature Signature 1 QUARTERLY REPORT THE DECLARATION OF THE REVERSE PAGE SHOULD BE SIGNED AND SUBMITTED TOGETHER WITH THE REPORT TO THE FUND FOR INDUSTRIAL GROWTH Company: Project No.: Project title: Report for the period: The report on the project should contain the following and be signed by the CEO: A 1. A report on the progress of the project during the period with a brief review of the costs that have been borne. 2. Details of written reports, reviews and the acquisition of knowledge, identified by report number and date or other identification. 3. Details of deviation from the Project Plan or budget, including changes in technical, financial, commercial or managerial circumstances. 4. Details of the consequences of deviations in respect of time, finance, profitability and residual financing. New plans and budgets should be submitted for significant changes. 5. Details of how far the project has got, expressed in percentage terms (divisible by 10) taken in comparison with the timetable and activity plan. B. Quarterly report
* Total number of hours in the period: Time used should be documented and payroll should be stated in accordance with the Fund for Industrial Growth's rules, cf Application Notes/Checklist. 1 DECLARATION ON RESIDUAL PROJECT FINANCING The company declares that: - - There is no significant change in the company's financial position compared to the accounts and budgets which the Fund for Industrial Growth has received. - - It is my/our view that financing is available for the residual part of the project. - - I/We can show that financing for production and sales after the expiry of the development period will be available. Date: Company name Signature (CEO) PLEASE TYPE NAME: 1 AUDITOR'S ENDORSEMENT Company: Project No.: Project title: Auditor's endorsement relates to development period: Period costs - DKK: cf quarterly accounts* * If an audit occasions corrections, new accounts for the whole period are to be presented with the same entries as for the previously submitted quarterly accounts. DECLARATION As auditor for the company, we/I have audited the accounts for the above-identified project and period. We/I state the following: - - Costs relate to the project and are stated in accordance with the Fund for Industrial Growth's rules (see page 2). - - Hours used have been documented and pay is stated in accordance with the Fund for Industrial Growth's rules (see page 2). - - The accounts comply with the loan/guarantee agreement with the Fund for Industrial Growth and the standard loan/guarantee terms associated therewith. - - The work has been done within the stated development period. - - The costs have been incurred. Costs have been paid for or the company is liable to do so on standard terms. - - The materials involved and services purchased are in accordance with invoices and stock registration. - - Project costs have been stated exclusive VAT. - - The company has not received other public funds (including Danish, Nordic or EU) for this or associated projects. Dated: Signed: (PLEASE TYPE NAME) The auditor's endorsement is to relate to all quarterly accounts associated with that part of the development period which is within the company's most recently completed financial year. 2 The auditor's endorsement should be sent to the Fund for Industrial Growth within five months of closing the financial year. Notes for the presentation of accounts to the Fund for Industrial Growth Accounts are to be splits as follows: - ------------------------------------------------------
* Total hours should also be stated PAYROLL: Hourly rates should be stated as an average of employees' gross pay divided by 1628 (44 weeks @ 37 hours). For hourly paid workers, pay should be normally stated as gross hourly pay including holiday pay, ATP and AUD. The basis on which payroll costs have been calculated (i.e. a schedule of hours and hourly rates) should be attached. PURCHASES: Purchases cover all direct external costs associated with the project, such as materials and travelling. Services purchased should be stated separately, see below. INVESTMENTS: Investments relate to be acquisition of tangible and intangible assets which are assumed to have residual value after the completion of the project. GENERAL COSTS: The project accounts should only include those costs which are directly attributable/stated in relation to the project. The Fund for Industrial Growth accepts that there should be added to the project accounts 25% of general payroll, purchase and investment costs. No general costs supplement shall be included for services. SERVICES: These may, for example, be patent costs, services or consultancy fees. Costs borne by the company's - - Parent company - - Subsidiary - - Affiliate or - - Owners/shareholders whose holdings exceed 25%, or their close relations (the definition applied in the Insolvency Act Section 2 shall be used), may only be included at cost price without mark-up. Costs of consultants associated with preparing applications and regular reporting may not be included in project accounts unless otherwise agreed in writing with the Fund for Industrial Growth, except for routine accountancy costs. October 1995. 1 STANDARD TERMS FOR LOANS THESE TERMS APPLY TO ALL FUND FOR INDUSTRIAL GROWTH LOANS. CERTAIN SECTIONS MAY, HOWEVER, NOT BE APPLICABLE FOR CERTAIN TYPES OF LOAN, AS STATED IN THE INDIVIDUAL SECTIONS CONCERNED. TYPES OF LOAN: - FU loans for Research and Development - I loans for internationalisation - K loans for skills development - L loans for use of Fund for Industrial Growth's management consultancy panel. DRAW-DOWN: Loans are payable 3 monthly in advance. The first instalment shall be payable on the basis of the project budget in accordance with the Fund for Industrial Growth's budget schedule, when the Fund for Industrial Growth has received the documents stated in the letter accompanying the loan agreement, and when terms for payment of the loan have been complied with. Later installments are payable on the basis of actual costs in the latest quarterly report and the budget for the next quarterly period. Reports shall not give rise to objections. The final 10% of loans shall be payable when project development has been completed and the Fund for Industrial Growth has received: - A full and final project report. - A schedule of the reports and reviews prepared and knowledge acquired identified by report number and date or other identification. - Final accounts for the project for the complete development period, with a duly completed endorsement on the Fund for Industrial Growth's form by the company's auditor. The auditor's endorsement shall show that costs only relate to the project concerned. Irrespective of the amount of the loan agreed, the Fund for Industrial Growth can at most finance development costs at the financing percentage stated in the loan agreement. QUARTERLY REPORT Every third month, the Fund for Industrial Growth shall receive a quarterly report on the basis of which instalments of the loan shall be payable. The report is to include: - An account of progress of the project during the period concerned with a short explanation of the costs incurred. - Details of written reports, reviews and knowledge acquisition identified by report number and date or other identification. - Details of any deviation in comparison with the project plan or budget, including altered technical, economic, financial or managerial circumstances. 2 - The requisite documentation that residual financing for the project is available. - The consequences of deviation in respect of time, finance and profitability. - An account of revenues achieved and costs incurred in the completed quarterly period. - A budget for forecast costs and revenues for the next quarterly period. If there are deviations between the project's budgeted and actual costs, the Fund for Industrial Growth may require a proposal of how the borrower will ensure that the project can be undertaken profitably. Quarterly reports are to be submitted to the Fund for Industrial Growth within three weeks of the end of quarterly periods. Calculated royalties are set against payments. The sum for which the borrower remains liable shall attract interest at the rate stated in the loan agreement. If the company wishes to retain the rights, purchased equipment and prototypes, etc. no request may be made for the loan to be written down, irrespective of the fact that the project is not creating turnover. It is a condition for write down of a loan that: - All rights in the development project shall have been assigned to the Fund for Industrial Growth, at no cost thereto. - Commercial secrets shall be intact. - An agreement on write down of the loan on the Fund for Industrial Growth's form shall have been signed. Outstanding debt cannot be written down if the debt can be redeemed without entitlement to being written down (see Section B below). TERMINATION A borrower may at any time redeem a loan including accrued interest. A. The Fund for Industrial Growth is entitled without notice to cease payment, to regard the loan as having fallen due and to demand the rights assigned with entitlement to debt right down, if: - The technical, commercial, financial or managerial basis for the project lapses or changes to such an extent that the Fund for Industrial Growth no longer deems that the project will be profitable. 3 - The results achieved according to quarterly reports deviate in the Fund for Industrial Growth's view significantly from the project's budget, timetable and activity plan. - In the view of the Fund for Industrial Growth the project is not following the plan, will not be completed, does not live up to sales forecasts, does not appear to be profitable or is not being exploited in a satisfactory manner. B. The Fund for Industrial Growth shall be entitled without notice to cease payment, to regard the loan as having fallen due without entitlement to debt right down, if: - Repayments on the loan are not made on time. - The loan is not used as assumed in the loan agreement. - The rights in the project are wholly or partially assigned to the ownership of, or as surety to, a third party without written consent from the Fund for Industrial Growth. - The borrower has permitted a third party to become aware of results of the project or partial results in the project without said third party having undertaken in writing to keep results secret, and not to exploit or further disseminate said results. - The borrower becomes insolvent (irrespective of whether this involves calling in receivers or filing for insolvency), goes into liquidation, bankruptcy, debt rescheduling, initiates negotiations on any kind of debt rescheduling, is declared incapable, deceases, is arrested or if distress is levied upon the borrower. - A shareholding/holding with a controlling influence on the borrowing company has changed ownership without the written consent of the Fund for Industrial Growth. - Operations in the borrower's company cease. - The borrower fails to submit quarterly reports, auditor's endorsement or annual accounts in due time. - The borrower fails to inform the Fund for Industrial Growth in writing if public funds (Danish, Nordic or EU) for the project or associated projects have been applied for or granted. - Consultancy costs, including fees associated with the preparation of applications or regular reporting are included in the project accounts, unless otherwise agreed in writing with the Fund for Industrial Growth. - In the view of the Fund for Industrial Growth, other significant preconditions for the loan are no longer satisfied. 4 AUDITOR'S ENDORSEMENT The borrower shall within five months of the end of the financial year send a copy of the company's externally audited annual accounts with associated internal breakdown or similar to the Fund for Industrial Growth AND ANNUAL ACCOUNTS Annual accounts shall be prepared in accordance with the Presentation of Accounts Act and the company's auditor shall be Registered or State Authorized. Within five months of the borrower's financial year having been completed, the borrower shall submit an Auditor's Endorsement on the Fund for Industrial Growth's form. The Auditor's Endorsement shall be signed by the company's auditor and relate to all the quarterly accounts in the financial year concerned. At the end of the development project - regardless of the reason therefor - there shall always be submitted an Auditor's Endorsement from the company's auditor showing that all the costs in the project accounts exclusively relate to the project concerned. ANNUAL PROJECT FOLLOW UP The Fund for Industrial Growth normally once a year reviews with the company management the work done and compares it with the project's timetable and activity plan and budgets. The following year's project plan and budget are also updated. The project is similarly reviewed together with the management if there are significant changes to the project's technical, financial, commercial or managerial basis. SUBMISSION OF PROJECT DATA If the Fund for Industrial Growth wishes to receive data on the project in order to follow progress, the borrower shall provide same. Representatives of the Fund for Industrial Growth shall be granted access to the borrower to study all matters relating to the project. Such visits are to be agreed in advance. RIGHTS IN THE PROJECT As a condition for grant of the loan, all rights in the development project are pledged to the Fund for Industrial Growth. Until the loan has been redeemed, the rights in the development project shall neither wholly nor partially be assigned to the ownership of a third party, or pledged thereto, without written consent of the Fund for Industrial Growth. Similarly the results of the project shall neither wholly nor partially be exploited by a third party without written consent of the Fund for Industrial Growth. The borrower shall not permit a third party to become acquainted with the project, or parts thereof, without written consent of the Fund for Industrial Growth. In connection with any write down of the Fund for Industrial Growth's loan, cf. below, all rights in the development project shall be unconditionally assigned to the Fund for Industrial Growth. 5 Development project shall be taken to mean the financed project, including all rights in the project, patents, designs, trademarks, know-how and other intellectual property rights, the results of the project, drawings, reports and descriptions. REPAYMENT The loan shall be repaid as stated in the loan agreement. The following section applies only for FU and I loans. If it becomes apparent that the turnover created by the project is significantly less than forecast when the loan agreement was entered into, the Fund for Industrial Growth will be willing to discuss rescheduling repayments. Rescheduling the terms of repayment in the loan agreement predicates, INTER ALIA, that in the Fund for Industrial Growth's view, the project will still be able to achieve turnover which can lead to redemption of the loan within the agreed repayment period. DEBT RESCHEDULING This section applies only for FU and I loans. The borrower can require that the loan be written down if the development project is not completed or not exploited. A request for write down of debt shall be accompanied by a statement of the turnover created by the project. The statement shall be endorsed by a Registered or State Authorized auditor. Irrespective of whether debt write down is granted, the borrower shall however continue to be liable for an amount corresponding to the royalty on all turnover created by the project during or after the end of the development period. The rate of royalty in the loan agreement shall apply. OTHER TERMS The Fund for Industrial Growth will regard the loan agreement as having ceased if: - The signed agreement is not returned to the Fund for Industrial Growth within 30 days of the date of the agreement (date of dispatch). - The first tranche of the loan has not been paid out within five months of the Fund for Industrial Growth's having issued the loan agreement. If the Fund for Industrial Growth so wishes, the borrower shall submit quarterly and half yearly accounts together with further details of company operations. Stamp Duty and costs in general shall be payable by the borrower. Legal proceedings any kind associated with the loan agreement and the parties' collaboration in general shall be heard before the Copenhagen City 6 Court, if the Fund for Industrial Growth so wishes, irrespective of the size and nature of the claim involved. Appendices to the Fund for Industrial Growth standard terms for loans: Auditor's endorsement Accounts and budget sheets for quarterly reports. August 1995 1 LETTER OF SUPPORT LENDER Receptor Technologies Inc. 276 East Allen Winooski 05404 BORROWER Receptor Technologies A/S ADDRESS POST CODE/TOWN LOAN A loan of DKK 44,573,063 relating to Project No. 1529 with associated ordinary terms dated August 1995. Special terms apply to payment and redemption of the loan cf. loan agreement with borrower. OWNERSHIP Receptor Technologies Inc. confirms that we own all the share capital in our subsidiary. DECLARATION So long as a subsidiary is indebted to the Fund for Industrial Growth, we shall not wholly or partially dispose of nor pledge the shares. We shall also closely follow developments in our subsidiary which we shall support financially so that the project can be financially undertaken. We shall further use our influence to ensure that our subsidiary can comply with its obligations to the Fund for Industrial Growth in circumstances in which the loan could be terminated in accordance with the standard terms for loans by the Fund for Industrial Growth; if necessary, by providing our subsidiary with sufficient capital so that the Fund for Industrial Growth shall not suffer any loss, or by direct payment to the Fund for Industrial Growth. This declaration shall not affect the borrower's right to debt rescheduling in accordance with the Fund for Industrial Growth's standard terms for loans, dated August 1995. If the loan is written down, this Letter of Support shall cease simultaneously. DISPUTES AND JURISDICTION Receptor Technologies Inc. shall accept that any disputes about all claims deriving from or relating to this undertaking shall be heard before the Danish courts and subject to Danish law. Receptor Technologies Inc. accepts that final findings by the Danish courts can be executed in respect of the company in USA. Dated Receptor Technologies Inc. -----------------------------------
