Exhibit 10.3

 

 

 

 

 

 

SECOND AMENDMENT TO LOAN AGREEMENT

 

 

This Second Amendment to Loan Agreement (the “Second Amendment”) is made as of
the 4th day of March, 2014, by and between NAVIDEA BIOPHARMACEUTICALS, INC., a
Delaware corporation (the “Borrower”), and PLATINUM-MONTAUR LIFE SCIENCES, LLC,
a Delaware limited liability company (the “Lender”).

 

WHEREAS, pursuant to a Loan Agreement, dated as of July 25, 2012, by and between
the Borrower and the Lender (the “Loan Agreement”), the Lender extended a Term
Loan to the Borrower; and

 

WHEREAS, the Loan Agreement was amended as of June 25, 2013, in connection with
a loan to the Borrower by General Electric Capital Corporation (the “First
Amendment”), and a Subordination Agreement of even date among the Borrower, the
Lender and General Electric Capital Corporation (the “GE Subordination
Agreement”); and

 

WHEREAS, the Borrower has entered into a Loan and Security Agreement dated as of
March __, 2014 with Oxford Finance LLC (the “Oxford Loan Agreement”), a portion
of the proceeds of which will be applied to discharge Borrower’s Indebtedness to
General Electric Capital Corporation; and

 

WHEREAS, the Borrower and the Lender desire to amend certain terms of the Loan
Agreement to, among other things, reflect the discharge of Borrower’s
Indebtedness to General Electric Capital Corporation, the Borrower incurring new
Indebtedness pursuant to the Oxford Loan Agreement, the termination of the GE
Subordination Agreement, and the entry into a Subordination Agreement among the
Borrower, the Lender, and Oxford Finance LLC (the “Oxford Subordination
Agreement”), on the terms and conditions set forth herein;

 

NOW, THEREFORE, in consideration of the foregoing and the covenants contained
herein, and for other good and valuable consideration, the receipt and adequacy
of which are hereby acknowledged, the parties agree as follows:

 

Article One
DEFINITIONS; REPRESENTATIONS; CONSENT

 

Section 1.1 Terms Defined.

 

Unless otherwise defined herein, capitalized terms used herein shall have the
same meanings given in the Loan Agreement, as amended by the First Amendment.

 

Section 1.2Representations and Warranties of the Borrower.

 

1.2.1 The representations and warranties of the Borrower made in the Loan
Documents remain true and accurate and the covenants of the Borrower under the
Loan Documents are hereby reaffirmed as of the date hereof.

 

1.2.2 The Borrower has performed, in all material respects, all obligations to
be performed by it to date under the Loan Documents and no Event of Default
exists thereunder or an event which, with the passage of time or giving of
notice or both, would constitute an Event of Default.

 

 

 

 

 

1.2.3 The execution, delivery and performance of this Second Amendment and any
and all documents and instruments relating hereto of even or approximate date as
this Amendment (collectively, and including the Second Amended Note (as defined
below), the “Second Amendment Documents”), are within the power and authority of
the Borrower and are not in contravention of the Borrower’s Certificate of
Incorporation or Bylaws, or the terms of any other documents, instruments,
agreements or undertakings to which the Borrower is a party or by which the
Borrower is bound. To the best of the Borrower’s knowledge, no approval of any
person, corporation, governmental body or other entity not provided herewith is
a prerequisite to the execution, delivery and performance by the Borrower of the
Second Amendment Documents or any of the documents submitted to the Lender in
connection with the Second Amendment Documents, to ensure the validity or
enforceability thereof.

 

1.2.4 When executed on behalf of the Borrower, the Second Amendment Documents
will constitute the legally binding obligations of the Borrower, enforceable in
accordance with their terms, subject to the effect of applicable bankruptcy,
insolvency, reorganization, moratorium and other similar laws now existing or
hereafter enacted relating to or affecting the enforcement of creditors’ rights
generally, and the enforceability may be subject to limitations based on general
principles of equity (regardless of whether such enforceability is considered in
a proceeding in equity or at law).

 

Section 1.3 Consent to Oxford Loan Documents

 

Upon and as of the Effective Date, the Lender hereby consents to the terms and
conditions of the Oxford Loan Agreement and the “Loan Documents” as defined
therein, each in substantially the forms attached hereto as Exhibit A, and the
incurrence of Indebtedness and granting of Liens contemplated thereby.

 

Article Two
Increase in Term Loan; AMENDMENTS

 

Section 2.1Amendments to Defined Terms.

 

(a) Upon and as of the Effective Date, the following paragraph shall be inserted
at the top of the first page of the Loan Agreement:

 

“This instrument and the indebtedness, rights and obligations evidenced hereby
and any liens or other security interests securing such rights and obligations
are subordinate in the manner and to the extent set forth in that certain
Subordination Agreement (as amended, restated, supplemented or modified from
time to time, the “Subordination Agreement”) dated as of March __, 2014, by and
among the Subordinated Creditor identified therein and Oxford Finance LLC in its
capacity as agent for certain lenders (together with its successors and assigns,
“Senior Creditor Agent”), to certain indebtedness, rights, and obligations of
Navidea Biopharmaceuticals, Inc. to Senior Creditor Agent and Senior Creditor
(as defined therein) and liens and security interests of Senior Creditor Agent
securing the same all as described in the Subordination Agreement; and each
holder and transferee of this instrument, by its acceptance hereof, irrevocably
agrees to be bound by the provisions of the Subordination Agreement.”

 

(b) Upon and as of the Effective Date, the definition of “Applicable Rate” in
the Loan Agreement shall be amended to read in its entirety as follows:

 

 

 

2

 

 

“Applicable Rate” means the greatest of (i) the United States prime rate as
reported in The Wall Street Journal plus 6.75%, (ii) 10.0% and (iii) the highest
rate of interest then payable by the Borrower pursuant to the Oxford Loan
Documents plus 12.5 basis points (0.125%); provided, that, the Applicable Rate
shall be adjusted immediately to correspond with each change in the prime rate
or the highest rate of interest then payable by the Borrower pursuant to the
Oxford Loan Documents.

 

(c) Upon and as of the Effective Date, the definition of “GECC Loan Agreement”
in Section 1.1 of the Loan Agreement shall be deleted in its entirety, and
replaced by the following :

 

“Oxford Loan Agreement” means the Loan and Security Agreement, dated as of March
__, 2014, by and between the Borrower, the other loan parties from time to time
party thereto, Oxford Finance LLC, as administrative and collateral agent, and
the lenders from time to time party thereto, as it may be amended, restated,
supplemented, refinanced or otherwise modified from time to time.

 

(d) Upon and as of the Effective Date, the definition of “GECC Loan Documents”
in Section 1.1 of the Loan Agreement shall be deleted in its entirety, and
replaced by the following:

 

“Oxford Loan Documents” means the Oxford Loan Agreement and the “Loan Documents”
referred to therein, as each may be amended, restated, supplemented, refinanced
or otherwise modified from time to time.

 

(e) Upon and as of the Effective Date, the definition of “Permitted Liens” shall
be amended to read in its entirety as follows:

 

“Permitted Liens” mean (i) any Liens held by Lender or Affiliates of Lender at
any time after the termination of the Subordination Agreement, (ii) Liens for
unpaid taxes that either are not yet delinquent, or do not constitute an Event
of Default hereunder and are the subject of a Permitted Contest, (iii) Liens
securing Indebtedness incurred pursuant to the Oxford Loan Documents, (iv) the
interests of lessors under any lease of real property in the ordinary course of
business, (v) Liens securing purchase money Indebtedness or the interests of
lessors under Capital Leases to the extent that such Liens or interests secure
Permitted Purchase Money Indebtedness, provided that (x) such Liens exist prior
to the acquisition of, or attach substantially simultaneous with, or within 20
days after, the acquisition, repair, improvement or construction of, such
property financed by such Indebtedness and (y) such Liens do not extend to any
Property of a Loan Party other than the Property (and proceeds thereof) acquired
or built, or the improvements or repairs, financed by such Indebtedness,(vi)
Liens arising by operation of law in favor of warehousemen, landlords, carriers,
mechanics, materialmen, or laborers, incurred in the ordinary course of
Borrower’s business and not in connection with the borrowing of money, and which
Liens either (A) are for sums not yet delinquent, or (B) are the subject of
Permitted Contests, (vii) Liens arising from pledges or deposits made in the
ordinary course of business in connection with obtaining worker’s compensation
or other unemployment insurance, (viii) Liens or pledged or deposits to secure
performance of bids, tenders, leases (other than capital leases), sales or other
trade contracts incurred in the ordinary course of Borrower’s business and not
in connection with the borrowing of money, (ix) Liens granted as security for
surety, customs, reclamation or performance bonds, or judgment or appeal bonds,
in each case in connection with obtaining such bonds in the ordinary course of
Borrower’s business, (x) Liens resulting from any judgment or award that is not
an Event of Default hereunder, (xi) Liens related to any Permitted Acquisition,
to the extent such Liens encumber only the assets acquired in such Permitted
Acquisition, (xii) Liens of a collection bank on items in the course of
collection arising under Section 4-208 of the UCC, (xiii) Liens arising by
reason of zoning restrictions, easements, licenses, reservations, restrictions,
covenants, rights-of-way, encroachments, minor defects or irregularities in
title (including leasehold title) and other similar encumbrances on the use of
real property that do not materially (x) impair the value or marketability of
such real property or (y) interfere with the ordinary conduct of the business
conducted and proposed to be conducted at such real property; and (xiv)
non-exclusive licenses of the intellectual property of the Borrower or any
Subsidiary of the Borrower that do not restrict the applicable licensor’s
ability to grant a lien on, assign or otherwise transfer such license or any
intellectual property.

 

 

 

3

 

 

(f) Upon and as of the Effective Date, the definition of “Subordination
Agreement” in Section 1.1 of the Loan Agreement shall be deleted in its
entirety, and replaced by the following:

 

“Subordination Agreement” means the Subordination Agreement, dated as of March
__, 2014, between the Lender and Oxford Finance LLC, and consented to by the
Borrower and the Subsidiaries of the Borrower from time to time party thereto.

 

 

Section 2.2 Amendment to Section 2.2.

 

Upon and as of the Effective Date, Section 2.2(f) of the Loan Agreement shall be
amended to read in its entirety as follows:

 

(f) Notwithstanding anything to the contrary contained herein, the Lender shall
have no obligation to fund any Draw hereunder upon and after the occurrence of
an Event of Default or an “Event of Default” under and as defined in the Oxford
Loan Agreement.

 

Section 2.3 Amendment to Section 5.10.

 

Upon and as of the Effective Date, Section 5.10 of the Loan Agreement shall be
amended to read in its entirety as follows:

 

The Borrower each Guarantor (a) has an indefeasible interest in all personal
property which it has an interest, free and clear of any Liens, except Permitted
Liens, and (b) has not agreed or consented to cause or permit in the future
(upon the happening of a contingency or otherwise) any of its property whether
now owned or hereafter acquired to be subject to a Lien, except Permitted Liens
and agreements contained under the Oxford Loan Documents. Neither Borrower nor
any Guarantor owns any real property.

 

 

4

 

 

Section 2.4 Amendment to Section 7.1.

 

Upon and as of the Effective Date, Section 7.1(viii) of the Loan Agreement shall
be amended to read in its entirety as follows:

 

(viii) The occurrence of any event which allows the acceleration of the maturity
of any Indebtedness in excess of the amount of $1,000,000 of Borrower and/or any
Guarantor on an aggregate basis (other than Indebtedness incurred pursuant to
the Oxford Loan Documents);

 

Section 2.5Amendment to Section 7.1.

 

Upon and as of the Effective Date, Section 7.1(x) of the Loan Agreement shall be
amended to read in its entirety as follows:

 

(x) An event of default shall have occurred under the Oxford Loan Documents, and
as a result thereof the loans made under the Oxford Loan Documents have become
due prior to the stated maturity of such loans; and

 

Section 2.6Amendment and Restatement of Note.

 

 

Upon and as of the Effective Date, the Promissory Note shall be amended and
restated, in the form attached hereto as Exhibit B (the “Second Amended Note”),
and all references in the Loan Documents to the Note or Notes shall be deemed to
mean and refer to the Second Amended Note.

 

 

Article Three
CLOSING CONDITIONS

 

Section 3.1Closing Conditions.

 

The obligation of the Lender to execute and deliver this Amendment is subject to
fulfillment of the following conditions precedent:

 

(i) the Borrower shall have executed and delivered to the Lender this Amendment
and all other Amendment Documents applicable to it, including the Second Amended
Note;

 

(ii) all representations and warranties of the Borrower shall be true and
correct and no material adverse change shall have occurred in the business,
condition (financial or otherwise) or prospects of the Borrower, from the date
of the most recent financial statements of the Borrower delivered to the Lender;

 

 

 

5

 

 

(iii) the Lender shall have received evidence of the repayment in full, and
release of all liens securing, the Indebtedness of the Borrower and the
Subsidiaries of the Borrower to General Electric Credit Corporation;

 

(iv) the Lender shall have received evidence of the execution and delivery of
the Oxford Loan Agreement and the “Loan Documents” referred to therein, and
Oxford shall have committed to fund Indebtedness thereunder in a gross amount of
not less than $30,000,000 contemporaneously with this Amendment becoming
effective; and

 

(v) The Borrower shall have agreed to provide notice of certain financing
activities to the Lender in form and substance reasonably satisfactory to the
Lender (the “Notice Letter”).

 

Section 3.2 Effective Date.

 

This Amendment shall become effective as of the date first above written upon
evidence satisfactory to the Lender that all of the foregoing closing conditions
have been satisfied (the “Effective Date”).

 

Article Four
MISCELLANEOUS

 

Section 4.1 Loan Documents

 

The Borrower shall deliver this Second Amendment, all other Second Amendment
Documents and the Notice Letter, to the Lender and those documents shall be
included in the term the “Loan Documents” in the Loan Agreement. The provisions
of the Loan Documents, as modified herein, shall remain in full force and effect
in accordance with their terms and are hereby ratified and confirmed.

 

Section 4.2 Survival of Representations and Warranties.

 

All agreements, representations and warranties contained in the Loan Documents
shall survive the execution and delivery of this Amendment, and any
investigation at any time made by or on behalf of the Lender.

 

Section 4.3 Expenses.

 

The Borrower agrees, regardless of whether or not the transactions contemplated
hereby shall be consummated, to pay all reasonable expenses incurred by the
Lender incident to such transactions in the preparation of documentation
relating thereto, including without limitation fees and disbursements of the
Lender’s counsel incurred in connection with this Amendment and the Oxford
Subordination Agreement.

 

Section 4.4 General.

 

The Borrower shall execute and deliver such additional documents and instruments
and shall do such other acts as the Lender may reasonably require in order to
implement this Amendment fully. This Amendment may be executed in counterparts
by the Borrower and the Lender, each of which shall be deemed an original but
all of which together shall constitute one and the same agreement.

 

 

[Signature Page Follows]

 

 

 

6

 

 

 

IN WITNESS WHEREOF, the undersigned have caused this Second Amendment to be
executed by their duly authorized agents as of the date first above written.

 

Borrower:

 

NAVIDEA BIOPHARMACEUTICALS, INC.

 

 

By: /s/ Brent L. Larson

Name: Brent L. Larson

Title: EVP, CFO, Treasurer and Secretary

 

 

 

 

 

Lender:

 

PLATINUM-MONTAUR LIFE SCIENCES, LLC

 

 

By:/s/ Joseph SanFilippo

Name: Joseph SanFilippo

Title: CFO

 

 

 

7

 

 

 

 

Exhibit A

 

[Oxford Loan Documents]

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Exhibit B

 

[Second Amended Note]