Exhibit
10.1


 


LOAN MODIFICATION AGREEMENT


 


This Loan Modification
Agreement (this “Loan Modification Agreement’) is entered into as of
January 25, 2004, by and between SILICON VALLEY BANK, a California-chartered
bank, with its principal place of business at 3003 Tasman Drive, Santa Clara,
California  95054 and with a loan
production office located at One Newton Executive Park, Suite 200,
2221 Washington Street, Newton, Massachusetts  02462, doing business under the name “Silicon Valley East”
(“Bank”) and GTC BIOTHERAPEUTICS, INC., a Massachusetts corporation with
its chief executive office located at 175 Crossing Boulevard, Suite 410,
Framingham, Massachusetts 01702 
(“Borrower”).


 


1.                                       DESCRIPTION
OF EXISTING INDEBTEDNESS AND OBLIGATIONS. 
Among other indebtedness and obligations which may be owing by Borrower
to Bank, Borrower is indebted to Bank pursuant to a loan arrangement dated as
of March 27, 2002, evidenced by, among other documents, a certain Loan and
Security Agreement dated as of March 27, 2002, between Borrower and Bank,
as amended by a Loan Modification Agreement dated June 11, 2003, and by a
Loan Modification Agreement dated August 13, 2003 (as amended, the “Loan
Agreement”).  Capitalized terms used but
not otherwise defined herein shall have the same meaning as in the Loan
Agreement.


 


2.                                       DESCRIPTION
OF COLLATERAL.  Repayment of the
Obligations is secured by the Collateral as described in the Loan Agreement
(together with any other collateral security granted to Bank, the “Security
Documents”).


 


Hereinafter, the Security
Documents, together with all other documents evidencing or securing the
Obligations shall be referred to as the “Existing Loan Documents”.


 


3.                                       DESCRIPTION
OF CHANGE IN TERMS.


 


A.                                   Modifications
to Loan Agreement.


 


1.                                       The
Loan Agreement shall be amended by deleting the following provision appearing
in the first sentence of Section 2.1.6(a) thereof:


 


“2.1.6.           2003
Equipment Advances.


 


(a)  Availability.  Through
December 31, 2003 (the “2003 Equipment Availability End Date”), Bank shall
make Equipment Advances under the 2003 Committed Equipment not exceeding the
2003 Committed Equipment Line.”


 


and inserting in lieu
thereof the following:


 

















 


“2.1.6.           2003
Equipment Advances.


 


(a)  Availability.  Through
June 30, 2004 (the “2003 Equipment Availability End Date”), Bank shall
make Equipment Advances under the 2003 Committed Equipment not exceeding the
2003 Committed Equipment Line.”


 


2.                                       The
Loan Agreement shall be amended by deleting the following, appearing as
Section 6.7(a) thereof, in its entirety:


 


“(a)  Liquidity. 
Borrower and its Subsidiaries shall maintain unrestricted cash and
marketable securities less outstanding Obligations under the Committed
Revolving Line, of not less than Twenty-Five Million Dollars ($25,000,000.00).  If, at any time, the Borrower shall fail to
satisfy the terms of this Section 6.7(a), then the Borrower shall
immediately deposit with the Bank an amount of unrestricted cash equal to the
outstanding Obligations hereunder, and shall thereafter maintain unrestricted
cash with the Bank equal to the outstanding Obligations, as such amount may
increase or decrease.”


 


and inserting in lieu
thereof the following:


 


“(a)  Liquidity. 
Borrower and its Subsidiaries shall maintain unrestricted cash and
marketable securities less outstanding Obligations under the Committed
Revolving Line, of not less than Eighteen Million Dollars
($18,000,000.00).  If, at any time, the
Borrower shall fail to satisfy the terms of this Section 6.7(a), then the
Borrower shall immediately deposit with the Bank an amount of unrestricted cash
equal to the outstanding Obligations hereunder, and shall thereafter maintain
unrestricted cash with the Bank equal to the outstanding Obligations, as such
amount may increase or decrease.”


 


3.                                       The
Loan Agreement shall be amended by inserting the following provision to appear
as Section 6.9 thereof:


 


“6.9                        Market
Approval.  On or before
February 28, 2004, the Borrower shall provide the Bank with a evidence,
acceptable to the Bank, in it reasonable discretion, that the Borrower has
submitted to the European Medicines Evaluation Agency a market approval
application for its drug, rhATIII”.


 


4.                                       The
Compliance Certificate appearing as Exhibit D to the Loan Agreement is
hereby replaced with the Compliance Certificate attached as Exhibit A
hereto.


 


4.                                       FEES.  The Borrower shall pay to Bank a
modification fee equal to Twenty Thousand Dollars ($20,000.00), which
modification fee shall be due and payable on the date hereof and


 


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shall be deemed fully earned as of the date hereof. The Borrower shall
also reimburse Bank for all legal fees and expenses incurred in connection with
this amendment to the Existing Loan Documents.


 


5.                                       RATIFICATION
OF PLEDGE AGREEMENT.  Borrower
hereby ratifies, confirms and reaffirms, all and singular, the terms and
conditions of a certain Pledge Agreement dated as of March 27, 2002,
between Borrower and Bank, and acknowledges, confirms and agrees that said
Pledge Agreement shall remain in full force and effect and the Collateral
defined therein shall continue to secure the Obligations under the Loan
Agreement, as amended hereby.


 


6.                                       RATIFICATION
OF NEGATIVE PLEDGE.  Borrower hereby
ratifies, confirms and reaffirms, all and singular, the terms and conditions of
a certain Negative Pledge Agreement dated as of March 27, 2002, between
Borrower and Bank, and acknowledges, confirms and agrees that said Negative
Pledge Agreement shall remain in full force and effect.


 


7.                                       RATIFICATION
OF PERFECTION CERTIFICATE.  Borrower
hereby ratifies, confirms and reaffirms, all and singular, the terms and
disclosures contained in a certain Perfection Certificate dated as of
March 27, 2002, between Borrower and Bank, and acknowledges, confirms and
agrees the disclosures and information above Borrower provided to Bank in the
Perfection Certificate has not changed, as of the date hereof.


 


8.                                       CONSISTENT
CHANGES.  The Existing Loan
Documents are hereby amended wherever necessary to reflect the changes
described above.


 


9.                                       RATIFICATION
OF LOAN DOCUMENTS.  Borrower hereby
ratifies, confirms, and reaffirms all terms and conditions of all security or
other collateral granted to the Bank, and confirms that the indebtedness
secured thereby includes, without limitation, the Obligations.


 


10.                                 NO
DEFENSES OF BORROWER.  Borrower
hereby acknowledges and agrees that Borrower has no offsets, defenses, claims,
or counterclaims against Bank with respect to the Obligations, or otherwise,
and that if Borrower now has, or ever did have, any offsets, defenses, claims,
or counterclaims against Bank, whether known or unknown, at law or in equity,
all of them are hereby expressly WAIVED and Borrower hereby RELEASES Bank from
any liability thereunder.


 


11.                                 CONTINUING
VALIDITY.  Borrower understands and
agrees that in modifying the existing Obligations, Bank is relying upon
Borrower’s representations, warranties, and agreements, as set forth in the
Existing Loan Documents.  Except as
expressly modified pursuant to this Loan Modification Agreement, the terms of
the Existing Loan Documents remain unchanged and in full force and effect.  Bank’s agreement to modifications to the
existing Obligations pursuant to this Loan Modification Agreement in no way
shall obligate Bank to make any future modifications to the Obligations.  Nothing in this Loan Modification Agreement
shall constitute a satisfaction of the Obligations.  It is the intention of Bank and Borrower to retain as liable parties
all makers of Existing Loan Documents, unless the party is expressly released
by Bank in writing.  No maker will be
released by virtue of this Loan Modification Agreement.


 


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12.                                 COUNTERSIGNATURE.  This Loan Modification Agreement shall
become effective only when it shall have been executed by Borrower and Bank
(provided, however, in no event shall this Loan Modification Agreement become
effective until signed by an officer of Bank in California).


 


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intentionally left blank]


 


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This Loan Modification
Agreement is executed as a sealed instrument under the laws of the Commonwealth
of Massachusetts as of the date first written above.


 


 


	
  BORROWER:

  	
  BANK:

  
	
   

  	
   

  
	
  GTC BIOTHERAPEUTICS, INC.,

  	
  SILICON VALLEY BANK,

  
	
  formerly known as

  	
  doing business as

  
	
  Genzyme Transgenics
  Corporation

  	
  SILICON VALLEY EAST

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
  /s/ John B. Green

  	
   

  	
  By:

  	
   

  	
  /s/ Pamela Aldsworth

  	
   

  
	
  Name:

  	
  John B. Green

  	
  Name:

  	
  Pamela Aldsworth

  
	
  Title:

  	
  Senior Vice President

  	
  Title:

  	
  SCO

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  SILICON VALLEY BANK

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
  /s/ Karen J. Beraud

  	
   

  
	
   

  	
  Name:

  	
  Karen J. Beraud

  
	
   

  	
  Title:

  	
  Division Manager

  
	
   

  	
  (signed in Santa Clara
  County, California)

  
								



 


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EXHIBIT A

COMPLIANCE CERTIFICATE


 


	
  TO:

  	
   

  	
  SILICON VALLEY BANK

  
	
   

  	
   

  	
   

  
	
  FROM:

  	
   

  	
  GTC BIOTHERAPEUTICS,
  INC.

  



 


The undersigned
authorized officer of GTC Biotherapeutics, Inc. certifies that under 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 in the Agreement are true and correct in all material respects
on this date.  Attached are the required
documents supporting the certification. 
The Officer certifies that these are prepared in accordance with
Generally Accepted Accounting Principles (GAAP) consistently applied from one
period to the next except as explained in an accompanying letter or
footnotes.  The Officer acknowledges
that no borrowings may be requested at any time or date of determination that
Borrower is not in compliance with any of the terms of the Agreement, and that
compliance is determined not just at the date this certificate is delivered.


 


Please indicate compliance status by
circling Yes/No under “Complies” column.


 


	
  Reporting Covenant

  	
   

  	
  Required

  	
   

  	
  Complies

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Quarterly financial
  statements with CC

  	
   

  	
  Within 5 days after
  filing with SEC

  	
   

  	
  Yes  No

  
	
  Annual (CPA Audited)

  	
   

  	
  With 5 days after
  filing with SEC

  	
   

  	
  Yes  No

  
	
  Projects approved by
  Board of Directors

  	
   

  	
  Annually, and as
  updated

  	
   

  	
  Yes  No

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Financial Covenant

  	
   

  	
  Required

  	
   

  	
  Actual

  	
   

  	
  Complies

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Maintain on a Quarterly
  Basis:

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Minimum
  Liquidity

  	
   

  	
  $

  	
  18,000,000.00

  	
   

  	
  $

  	
   

  	
  Yes  No

  
								



 


Comments Regarding Exceptions:  See Attached.


 


	
  Sincerely,

  	
  BANK USE ONLY

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
  Received by:

  	
   

  	
   

  
	
  SIGNATURE

  	
   

  	
  AUTHORIZED
  SIGNER

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
  Date:

  	
   

  	
   

  
	
  TITLE

  	
   

  
	
   

  	
  Verified:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  AUTHORIZED
  SIGNER

  	
   

  
	
  DATE

  	
  Date:

  	
   

  	
   

  
								



 


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