Exhibit 10.4
SECOND AMENDMENT
TO
LOAN AND SECURITY AGREEMENT
     This Second Amendment to Loan and Security Agreement is entered into as of
May 6, 2005 (the “Amendment”), by and between COMERICA BANK (“Bank”) and
LAUREATE PHARMA, INC. (“Borrower”).
RECITALS
     Borrower and Bank are parties to that certain Loan and Security Agreement
dated as of December 1, 2004, as amended, including without limitation by that
certain First Amendment to Loan and Security Agreement dated as of January 31,
2005 (collectively, the “Agreement”). The parties desire to amend the Agreement
in accordance with the terms of this Amendment.
     NOW, THEREFORE, the parties agree as follows:
     1. The following defined terms are hereby added to or amended in
Section 1.1 of the Agreement to read as follows:
     “Revolving Line” means a credit extension of up to Five Million Dollars
($5,000,000).
     “Tangible Net Worth” means at any date as of which the amount thereof shall
be determined, the sum of the capital stock and additional paid-in capital plus
retained earnings (or minus accumulated deficit) of Borrower and its
Subsidiaries minus goodwill and other intangibles, plus Subordinated Debt, on a
consolidated basis determined in accordance with GAAP.
     2. All references to “Equipment Line” are hereby deleted from the
Agreement.
     3. The first sentence of Section 2.1(a)(i) of the Agreement is hereby
amended to read as follows: “Subject to and upon the terms and conditions of
this Agreement, Borrower may request Advances in an aggregate outstanding amount
not to exceed the Revolving Line.”
     4. Section 2.1(c) of the Agreement is hereby amended in its entirety to
read as follows:
     (c) [INTENTIONALLY OMITTED.]
     5. Section 2.2 of the Agreement is hereby amended in its entirety to read
as follows:
           2.2 Overadvances. If the aggregate amount of the outstanding Advances
exceeds the Revolving Line at any time, Borrower shall immediately pay to Bank,
in cash, the amount of such excess.
     6. Section 4 of the Agreement is hereby amended to read as follows:
     4. [INTENTIONALLY OMITTED.]
     7. The second paragraph of Section 6.3 of the Agreement is hereby amended
to read as follows:
     Within twenty (20) days after the last day of each month, Borrower shall
deliver to Bank aged listings of accounts receivable and accounts payable.
     8. The last paragraph of Section 6.3 of the Agreement is hereby deleted in
its entirety.

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     9. Section 6.8 of the Agreement is hereby amended in its entirety to read
as follows:
     6.8 Tangible Net Worth. Borrower shall maintain a Tangible Net Worth of not
less than (i) Thirteen Million Dollars ($13,000,000) at all times from April 1,
2005 through December 31, 2005 and (ii) Eleven Million Dollars ($11,000,000) at
all times thereafter.
     10. Exhibit A to the Agreement is hereby deleted in its entirety.
     11. Exhibit D to the Agreement is hereby amended and replaced in its
entirety by Exhibit D attached hereto.
     12. Upon the effectiveness of this Amendment, Bank’s lien on the Collateral
shall automatically be released, and Bank shall terminate its UCC financing
statement against Borrower.
     13. Unless otherwise defined, all initially capitalized terms in this
Amendment shall be as defined in the Agreement. The Agreement, as amended
hereby, shall be and remain in full force and effect in accordance with its
respective terms and hereby is ratified and confirmed in all respects. Except as
expressly set forth herein, the execution, delivery, and performance of this
Amendment shall not operate as a waiver of, or as an amendment of, any right,
power, or remedy of Bank under the Agreement, as in effect prior to the date
hereof. Borrower ratifies and reaffirms the continuing effectiveness of all
promissory notes, guaranties, security agreements, mortgages, deeds of trust,
environmental agreements, and all other instruments, documents and agreements
entered into in connection with the Agreement.
     14. Borrower represents and warrants that the representations and
warranties contained in the Agreement are true and correct as of the date of
this Amendment, and that no Event of Default has occurred and is continuing.
     15. This Amendment may be executed in two or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one instrument.
     16. As a condition to the effectiveness of this Amendment, Bank shall have
received, in form and substance satisfactory to Bank, the following:
     (a) repayment in full of all outstanding Equipment Advances;
     (b) this Amendment, duly executed by Borrower;
     (c) Corporate Resolutions to Borrow;
     (d) Disbursement Instructions, Agreement to Provide Insurance, and
Automatic Debit Authorization;
     (e) an amount equal to all Bank Expenses incurred through the date of this
Amendment; and
     (f) such other documents, and completion of such other matters, as Bank may
reasonably deem necessary or appropriate.

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     IN WITNESS WHEREOF, the undersigned have executed this Amendment as of the
first date above written.

            LAUREATE PHARMA, INC.
      By:   /s/ Christopher J. Davis       Title: Vice President and Treasurer 
           

            COMERICA BANK
      By:   /s/ Peter Gibson       Title: Vice President             

The undersigned Guarantors acknowledge this Amendment and agree that the
Unconditional Guaranty dated as of December 1, 2004 which they signed on Bank’s
behalf is and shall remain in full force and effect with respect to Borrower’s
Obligations (as defined in the Agreement) as modified by the Amendment and
otherwise. Upon repayment in full by Borrower of all Equipment Advances and the
Term Advance, Bank and the undersigned Guarantors will enter into an Affirmation
and Amendment of Guaranty in substantially the form provided by Bank as of the
date hereof.

            SAFEGUARD DELAWARE, INC.
      By:   /s/ Christopher J. Davis       Title: Vice President and Treasurer 
           

            SAFEGUARD SCIENTIFICS (DELAWARE), INC.
      By:   /s/ Christopher J. Davis       Title: Vice President and Treasurer 
         

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EXHIBIT D
COMPLIANCE CERTIFICATE

TO:   COMERICA BANK

FROM:   LAUREATE PHARMA, INC.

     The undersigned authorized officer of LAUREATE PHARMA, INC. hereby
certifies that in accordance with the terms and conditions of the Loan and
Security Agreement between Borrower and Bank (the “Agreement”), (i) Borrower is
in complete compliance for the period ending
                                         with all required covenants except as
noted below and (ii) all representations and warranties of Borrower stated in
the Agreement are true and correct as of the date hereof. Attached herewith are
the required documents supporting the above certification. The Officer further
certifies that these are prepared in accordance with Generally Accepted
Accounting Principles (GAAP) and are consistently applied from one period to the
next except as explained in an accompanying letter or footnotes.
Please indicate compliance status by circling Yes/No under “Complies” column.

              Reporting Covenant   Required   Complies
Monthly financial statements
  Monthly within 30 days   Yes   No
Annual (CPA Audited)
  FYE within 120 days   Yes   No
10K and 10Q
  (as applicable)   Yes   No
A/R & A/P Agings
  Monthly within 20 days   Yes   No
Total amount of Borrower’s cash and investments
  Amount: $___   Yes   No
Total amount of Borrower’s cash and investments maintained with Bank
  Amount: $___   Yes   No

                                  Financial Covenant   Required   Actual  
Complies
Minimum Tangible Net Worth
    *     $ —     Yes   No

 

*   (i) Thirteen Million Dollars ($13,000,000) at all times through December 31,
2005 and (ii) Eleven Million Dollars ($11,000,000) at all times thereafter

         
 
     
Comments Regarding Exceptions: See Attached.
    BANK USE ONLY  
 
       
 
    Received
by:                                                                                                                       
 
Sincerely,
    AUTHORIZED SIGNER  
 
       
 
    Date:
                                                                                                                                    
 
 
       
                                                                                
   
Verified:                                                                                                                                 
 
SIGNATURE
    AUTHORIZED SIGNER  
 
       
                                                                                
   
Date:                                                                                                                                    
 
TITLE
       
 
    Compliance
Status                                             Yes               No  
 
       
                                                                                
       
DATE
       
 
   

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