TO THE AGGREGATE
OF SUCH FUTURE INTEREST AND/OR DIVIDEND PAYMENTS REQUIRED TO BE MADE BY BORROWER
DURING THE PERIOD ENDING JANUARY 1, 2007 WITH LENDER IN AN ACCOUNT AT LENDER AND
ADMINISTERED IN ACCORDANCE WITH LENDER'S STANDARD CASH MANAGEMENT PROCEDURES,
WHICH WOULD ALLOW ONLY FOR THE OUTBOUND TRANSFERS OF SUCH AMOUNTS TO THE
BENEFICIARY OF THE PIPE TRANSACTION, EXCEPT THAT ANY INTEREST OR OTHER EARNINGS
THEREON SHALL BE TRANSFERRED TO BORROWER AT ITS DISCRETION.
(h)
Section 15.7 (Change in Control) of the Loan Agreement is hereby amended
by adding the following proviso to the end thereof:
"PROVIDED, HOWEVER, THAT IN CONNECTION WITH THE CLOSING OF THE SALE OF THE
MORTGAGED PROPERTY AND AFTER PAYMENT IN FULL OF THE TERM LOAN AND THE
OVERADVANCE AMOUNT, TRIPOS REALTY MAY MERGE INTO TRIPOS PROVIDED THAT TRIPOS,
AFTER GIVING EFFECT TO SUCH MERGER, SHALL REMAIN THE SURVIVING ENTITY."
(i)
Section 15.19 (Disposal of Property) of the Loan Agreement is hereby
amended by adding the following sentence to the end thereof:
"IN ADDITION, IN THE ABSENCE OF AN EXISTING DEFAULT, TRIPOS REALTY MAY SELL THE
MORTGAGED PROPERTY PROVIDED THAT THE PROCEEDS FROM SUCH SALE ARE APPLIED
DIRECTLY TO PAY OFF IN FULL THE TERM LOAN AND ANY AMOUNTS OUTSTANDING UNDER THE
OVERADVANCE AMOUNT, WITH ANY EXCESS AMOUNTS BEING RETAINED BY TRIPOS REALTY
AND/OR BORROWER."
(j)
Section 16.1 (Special Definitions) of the Loan Agreement is hereby
amended by adding in appropriate alphabetical order the following definition:
"'NET WORTH' MEANS, AS OF ANY TIME, THE NET WORTH OF BORROWER AS DETERMINED IN
ACCORDANCE WITH GAAP.'"
(k)
Effective March 30, 2006, Sections 16.5 (Minimum Debt Service Coverage),
16.6 (Maximum Non-TRR Capital Expenditures, and 16.7 (Minimum Shareholder's
Equity) are each deleted and the following new Sections 16.2 and 16.3 are hereby
substituted in lieu thereof:
3
"SECTION 16.2.
MINIMUM NET WORTH.
BORROWER COVENANTS AND AGREES THAT THE
BORROWER'S NET WORTH, CALCULATED AS OF THE LAST DAY OF EACH FISCAL QUARTER
(A) COMMENCING WITH THE FISCAL QUARTER ENDING JUNE 30, 2006 SHALL NOT BE LESS
THAN EIGHTY-FIVE PERCENT (85%) OF BORROWER'S NET WORTH AS OF MARCH 31, 2006,
PLUS (B) FOR THE FISCAL QUARTER ENDING SEPTEMBER 30, 2006 AND FOR EACH FISCAL
QUARTER THEREAFTER AN AMOUNT EQUAL TO THE SUM OF THE MINIMUM AMOUNT REQUIRED TO
BE MAINTAINED FOR THE IMMEDIATELY PRECEDING FISCAL QUARTER PLUS EIGHTY-FIVE
PERCENT (85%) OF THE BORROWER'S NET INCOME (BUT NOT LESS THAN ZERO) FOR SUCH
CURRENT FISCAL QUARTER PLUS (C) IN EACH CASE AN AMOUNT EQUAL TO 100% OF THE
AMOUNTS RECEIVED (NET AFTER FEES, COSTS AND EXPENSES OF ISSUANCE) FOR THE
ISSUANCE OF STOCK OF BORROWER, IF ANY, EXCLUSIVE OF ANY SUCH AMOUNTS REALIZED IN
CONNECTION WITH A PIPE TRANSACTION.
THE DESCRIBED CALCULATION OF BORROWER'S NET
WORTH MAY BE PERFORMED, IN LENDER'S REASONABLE DISCRETION, EXCLUSIVE OF (I) ALL
GAINS AND LOSSES CAUSED BY FOREIGN CURRENCY TRANSLATIONS ADJUSTMENTS, (II) THE
PIPE TRANSACTION, (III) CHANGES IN THE BOOK VALUE OF BORROWER'S EQUITY HOLDINGS,
AND (IV) ANY GAIN OR LOSS REALIZED IN CONNECTION WITH TRIPOS REALTY'S