First Loan Modification Agreement between Animas Corporation, Animas Diabetes Care, LLC, and Silicon Valley Bank

Contract Categories: Business Finance › Modification Agreements
Summary

Animas Corporation and Animas Diabetes Care, LLC entered into this agreement with Silicon Valley Bank to modify the terms of their existing loan. The main change is an update to the minimum tangible net worth requirements the borrowers must maintain, with specific amounts set for different periods. The lender also waives certain past defaults related to revenue deferral and requires a $2,500 fee plus expenses. All other terms of the original loan remain in effect, and the lender is not obligated to make further modifications.

View More
EX-10.20 32 w93915exv10w20.txt FIRST LOAN MODIFICATION AGREEMENT Exhibit 10.20 FIRST LOAN MODIFICATION AGREEMENT This First Loan Modification Agreement (this "Agreement") is entered into as of February 19, 2004, by and among ANIMAS CORPORATION, a Delaware corporation ("Company"), whose address is 530 Lancaster Avenue, Frazer, Pennsylvania 19355 and ANIMAS DIABETES CARE, LLC, a Delaware limited liability company, whose address is 530 Lancaster Avenue, Frazer, Pennsylvania 19355 (together with the Company, each a "Borrower" and collectively, the "Borrowers"), and SILICON VALLEY BANK ("Lender") whose address is 3003 Tasman Drive, Santa Clara, California 95054 and with a loan production office located at 5 Radnor Corp. Center, 100 Matsonford Drive, Suite 555, Radnor, Pennsylvania 19087. 1. DESCRIPTION OF EXISTING INDEBTEDNESS: Among other indebtedness which may be owed by Borrowers to Lender, Borrowers are indebted to Lender pursuant to, among other documents, a Loan and Security Agreement dated as of November 7, 2003 between Borrowers and Lender (as may be amended from time to time, the "Loan Agreement"). Hereinafter, all indebtedness owed by Borrowers to Lender pursuant to the Loan Agreement shall be referred to as the "Indebtedness." 2. DESCRIPTION OF COLLATERAL. Repayment of the Indebtedness is secured by the Collateral as described in the Loan Agreement. Hereinafter, the above-described Loan Agreement, together with all other documents securing repayment of the Indebtedness shall be referred to as the "Security Documents". Hereinafter, the Security Documents, together with all other documents evidencing or securing the Indebtedness shall be referred to as the "Existing Loan Documents". 3. DESCRIPTION OF CHANGE IN TERMS. A. Modification to Loan Agreement. The Tangible Net Worth covenant set forth in that certain Schedule to Loan and Security Agreement dated as of November 7, 2003 by and among the parties hereto is hereby deleted in its entirety and replaced with the following: Minimum Tangible Net Worth: Borrower shall maintain a Tangible Net Worth as of the last day of each month of not less than the sum of (a) and (b):
(a) Tangible Net Worth: Applicable Period: ------------------ ----------------- $7,000,000 from November 7, 2003 through December 31, 2003; $5,500,000 January 31, 2004 through May 31, 2004; $6,000,000 June 30, 2004 through August 31, 2004; and $7,500,000 September 30, 2004 and thereafter;
plus (b) fifty percent (50%) of the net proceeds from any issuance by Borrower of equity or subordinated debt after November 7, 2003. DEFINITIONS. For purposes of the foregoing financial covenants, the following term shall have the following meaning: "Tangible Net Worth" shall mean the excess of total assets over total liabilities, determined in accordance with GAAP, with the following adjustments: (A) there shall be excluded from assets: (i) notes, accounts receivable and other obligations owing to Borrower from its officers or other Affiliates, (ii) all assets which would be classified as intangible assets under GAAP, including without limitation goodwill, licenses, patents, trademarks, trade names, copyrights, capitalized software and organizational costs, licenses and franchises, and (iii) all accrued dividends. (B) there shall be excluded from liabilities: (i) all indebtedness which is subordinated to the Obligations under a subordination agreement in form specified by Silicon or by language in the instrument evidencing the indebtedness which Silicon agrees in writing is acceptable to Silicon in its good faith business judgment and (ii) all of Borrower's revenue which is deferred pursuant to Securities and Exchange Commission Release No. SAB 104. 4. WAIVER OF DEFAULT. Borrowers failed to comply with the Tangible Net Worth covenant for the months ending November 30, 2003 and December 31, 2003 due to the deferral of revenue per SAB 104, and Lender hereby waives such Events of Default to the extent that they were caused by the deferral of revenue per SAB 104. 5. PAYMENT OF VARIANCE FEE. In consideration of Lender's entering into this Agreement and that certain Second Loan Modification Agreement dated of even date herewith by and among the parties hereto in connection with other indebtedness owed by Borrower to Lender, Borrowers shall pay to Lender a non refundable variance fee in the aggregate amount of Two Thousand Five Hundred Dollars ($2,500) plus all out-of-pocket expenses (including, but not limited to fees and expenses of Lender's counsel). 6. CONSISTENT CHANGES. The Existing Loan Documents are hereby amended wherever necessary to reflect the changes described above. 7. NO DEFENSES OF BORROWERS. Borrowers hereby waive any and all defenses against the payment of the Indebtedness or performance of any obligations under the Existing Loan Documents, which they have as of the date hereof, whether known or unknown, contingent or non-contingent. This waiver is knowingly given after consultation with counsel of Borrowers' own choosing. 8. CONTINUING VALIDITY. Borrowers understand and agree that in modifying the existing Indebtedness, Lender is relying upon Borrowers' representations, warranties, and agreements, as set forth in the Existing Loan Documents. Except as expressly modified pursuant to this Agreement, the terms of the Existing Loan Documents remain unchanged and in full force and effect. Lender's agreement to modifications to the existing Indebtedness pursuant to this Agreement in no way shall obligate Lender to make any future modifications to the Indebtedness. Nothing in this Agreement shall constitute a satisfaction of the Indebtedness. It is the intention of Lender and Borrowers to retain as liable parties all makers and endorsers of the Existing Loan Documents, unless the party is expressly released by Lender in writing. No maker, endorser, or guarantor will be released by virtue of this Agreement. The terms of this paragraph apply not only to this Agreement, but also to all subsequent loan modification agreements except to the extent expressly changed or terminated by the terms thereof. [Signatures on Following Page] 2 This First Loan Modification Agreement is executed as of the date first written above. BORROWERS: LENDER: ANIMAS CORPORATION SILICON VALLEY BANK By: /s/ Richard A. Baron By: /s/ David Rodriguez --------------------------- --------------------------- Name: Richard A. Baron Name: David Rodriguez ------------------------- ------------------------- Title: CFO Title: VP ------------------------ ------------------------ ANIMAS DIABETES CARE, LLC BY: ANIMAS CORPORATION, ITS SOLE MEMBER By: /s/ Richard A. Baron ------------------------ Name: Richard A. Baron Title: CFO 3