Document:

EXHIBIT

10.24.9

 

THIRD LOAN MODIFICATION

AGREEMENT

 

This Third Loan Modification Agreement (“this

Agreement”) is made as of February 12, 2003 between ArQule, Inc., a

Delaware corporation (the “Borrower”) and Fleet National Bank (the

“Bank”).  The Bank is the successor by

merger to the entity formerly known as “Fleet National Bank” (“Old FNB”).  For good and valuable consideration, receipt

and sufficiency of which are hereby acknowledged, the Borrower and the Bank act

and agree as follows:

 

1.                                       Reference

is made to:  (i) that certain

letter agreement dated March 18, 1999 (the “Original Letter Agreement”)

between the Borrower and Old FNB, the Bank having succeeded to the rights and

obligations of Old FNB thereunder; (ii) that certain Loan Modification

Agreement dated as of March 2, 2001 (the “First Modification”) between the Bank

and the Borrower and that certain Second Loan Modification Agreement dated as

of September 27, 2002 (the “Second Modification”) between the Bank and the

Borrower (the Original Letter Agreement, as amended by the First Modification

and the Second Modification, being hereinafter referred to as the “Letter

Agreement”); (iii) that certain $15,000,000 face principal amount

promissory note dated March 18, 1999, as amended by Allonge to Note dated

as of March 2, 2001 (as so amended, the “Facility One Term Note”) originally

made by the Borrower and payable to the order of Old FNB, the Bank having

succeeded to the interests of Old FNB thereunder; (iv) that certain

$16,000,000 original principal amount promissory note dated as of March 2, 2001

(the “Facility Two Term Note”) made by the Borrower and payable to the order of

the Bank; (v) that certain $2,500,000 face principal amount promissory

note dated September 27, 2002 (the “Facility Three Term Note”) made by the

Borrower and payable to the order of the Bank; (vi) that certain Mortgage

and Security Agreement and Assignment of Leases and Rents dated as of March 2,

2001 given by the Borrower, as mortgagor, to the Bank, as mortgagee, as amended

by Amendment to Mortgage dated as of September 27, 2002 (as so amended, the

“Mortgage”); (vii) that certain Environmental Compliance and Indemnity

Agreement dated as of March 2, 2001 (the “Environmental Agreement”) given by

the Borrower to the Bank; and (viii) that certain Security Agreement (All

Assets Except Intellectual Property) dated as of September 27, 2002 (the

“Security Agreement”) from the Borrower to the Bank.  The Letter Agreement, the Facility One Term Note, the Facility

Two Term Note, the Facility Three Term Note, the Mortgage, the Environmental

Agreement and the Security Agreement are hereinafter collectively referred to

as the “Financing Documents”.

 

2.                                       The

Letter Agreement is hereby amended, effective as of December 31, 2002, by

deleting the penultimate sentence of Section 3.9 of the Letter Agreement (as

most recently amended by the Second Modification) and by substituting in its

stead the following:

 

“As used herein, ‘Cash Burn’ for any period is the sum

of (1) consolidated EBITDA of the Borrower and Subsidiaries for such period

(negative EBITDA being expressed as a positive number for this purpose and

positive EBITDA being expressed as a negative number for this purpose), plus

(2) all taxes actually paid by the Borrower during such period, plus

 

 

(3) all Capital Expenditures (except to the extent

financed with a Term Loan or with other purchase money financing permitted

under §4.1) incurred by the Borrower and/or any of its Subsidiaries during such

period, plus (4) all payments on account of Debt Service paid or accrued

by the Borrower and/or any of its Subsidiaries during such period, but minus

(5) all non-cash charges relating to goodwill and/or intangible asset

impairment which were deducted by the Borrower on its consolidated books for

the purposes of determining consolidated EBITDA for the relevant period.”

 

3.                                       Wherever

in any Financing Document, or in any certificate or opinion to be delivered in

connection therewith, reference is made to a “letter agreement” or to the

“Letter Agreement”, from and after the date hereof same will be deemed to refer

to the Letter Agreement, as hereby amended.

 

4.                                       In

order to induce the Bank to enter into this Agreement, the Borrower agrees to

pay to the Bank, at the date hereof, an amendment fee of $3,500.  Said fee is in addition to, and shall not be

reduced by or applied against, any interest, fees, charges or other amounts

paid or payable with respect to the Letter Agreement and/or with respect to any

note issued thereunder.

 

5.                                       In

order to induce the Bank to enter into this Agreement, the Borrower also agrees

to pay, promptly upon receipt of an invoice therefor, all costs and expenses

(including, without limitation, reasonable attorneys’ fees) incurred by the

Bank with respect to this Agreement and/or the transactions contemplated

hereby.

 

6.                                       In

order to induce the Bank to enter into this Agreement, the Borrower further

represents and warrants as follows:

 

a.                                       The

execution, delivery and performance of this Agreement have been duly authorized

by the Borrower by all necessary corporate and other action, will not require

the consent of any third party and will not conflict with, violate the

provisions of, or cause a default or constitute an event which, with the

passage of time or the giving of notice or both, could cause a default on the

part of the Borrower under its charter documents or by-laws or under any

contract, agreement, law, rule, order, ordinance, franchise, instrument or

other document, or result in the imposition of any lien or encumbrance (except

in favor of the Bank) on any property or assets of the Borrower.

 

b.                                      The

Borrower has duly executed and delivered this Agreement.

 

c.                                       This

Agreement is the legal, valid and binding obligation of the Borrower,

enforceable against the Borrower in accordance with its terms.

 

d.                                      The

statements, representations and warranties of the Borrower made in the Letter

Agreement and/or in the Security Agreement continue to be correct as of the

date hereof; except as amended, updated and/or supplemented by the attached

Supplemental Disclosure Schedule.

 

2

 

e.                                       The

covenants and agreements of the Borrower contained in the Letter Agreement (as

amended hereby) and/or in the Security Agreement have been complied with on and

as of the date hereof.

 

f.                                         Giving

effect to the amendment set forth above, no event which constitutes or which,

with notice or lapse of time, or both, could constitute, an Event of Default

(as defined in the Letter Agreement) has occurred and is continuing.

 

g.                                      No

material adverse change has occurred in the financial condition of the Borrower

from that disclosed in the financial statements of the Borrower heretofore most

recently furnished to the Bank.

 

7.                                       Except

as expressly affected hereby, the Letter Agreement and each of the other

Financing Documents remains in full force and effect as heretofore.  All of the Borrower’s obligations,

indebtedness and liabilities to the Bank as evidenced by or otherwise arising

under the Financing Documents, except as otherwise expressly modified in this

Agreement, are, by the Borrower’s execution of this Agreement, ratified and

confirmed in all respects by the Borrower. 

In addition, by the Borrower’s execution of this Agreement, the Borrower

represents and warrants that no counterclaim, right of set-off or defense of

any kind exists or is outstanding with respect to such obligations,

indebtedness and liabilities.  The

Borrower acknowledges that the security interests and liens created by the

Security Agreement and/or the Mortgage run in favor of the Bank and constitute

valid liens on the Collateral (as defined in the Security Agreement) and the

Mortgaged Premises (as defined in the Mortgage) and the Borrower agrees that

the Borrower shall take no action to impair or invalidate said security

interests and liens.  The Borrower

acknowledges that the obligations secured by such security interests and liens

include, without limitation, the Facility One Term Note, the Facility Two Term

Note, the Facility Three Term Note and the Letter Agreement (as amended by this

Agreement).

 

8.                                       Nothing

contained herein nor in any documents delivered herewith will be deemed to

constitute a waiver or a release of any provision of any of the Financing

Documents.  Nothing contained herein

will in any event be deemed to constitute an agreement to give a waiver or

release or to agree to any amendment or modification of any provision of any of

the Financing Documents on any other or future occasion.

 

3

 

Executed, as an instrument under seal, as of the day

and year first above written.

 

	

   

  	

  ARQULE, INC.

  
	

   

  	

   

  
	

   

  	

   

  
	

   

  	

  By: 

  	

  /s/ David C. Hastings

  
	

   

  	

   

  	

  Name:

  	

  David C. Hastings

  
	

   

  	

   

  	

  Title:

  	

  Chief Financial Officer

  
	

   

  	

   

  
	

  Accepted and agreed:

  	

   

  
	

  FLEET NATIONAL BANK

  	

   

  
	

   

  	

   

  
	

   

  	

   

  
	

  By:

  	

   

  	

   

  	

   

  
	

   

  	

  Name:

  	

   

  
	

   

  	

  Title:

  	

   

  
						

 

4

 

SUPPLEMENTAL DISCLOSURE

SCHEDULE

 

[To be provided by

Borrower, if needed.]

 

5EXHIBIT
10.1

AIG

Private Bank

 

4-D Neuroimaging, Inc.

Attn:  Mr. Scott Buchanan, CEO

9727 Pacific Heights Blvd.

San Diego, CA 92121-3719

USA

 

Zurich, January 16, 2003

 

Loan Agreement Nr
2498380

 

Dear Sirs,

 

Reference is made to the loan agreement dated November 5, 2002, and to
the message of Mr. Martin P. Egli to our Mr. Renato DePretto dated January 6,
2003

 

We are pleased to extend your loan facility of USD 1,000,000 from
November 12, 2003, to May 31, 2004.  All
other terms and conditions of the loan agreement dated November 5, 2002, remain
unchanged.  We kindly request you to
duly sign and return to us the enclosed duplicate of this agreement.

 

We look forward to hearing from you and remain

 

Yours very truly,

 

	
  AG Private Bank Ltd.

  	
   

  
	
   

  	
   

  
	
  /s/ Daniel Sager

  	
   

  	
  /s/ Renato DePretto

  	
   

  
	
  Daniel Sager

  	
   

  	
  Renato DePretto

  	
   

  
	
  Assistant Vice President

  	
  Member of Management

  

 

We fully agree with and accept all of the terms and conditions
contained in the above-mentioned agreement.

 

	
  4-D Neuroimaging, San Diego

  	
   

  
	
   

  	
   

  
	
  Place/Date: San Diego, CA, USA, Jan. 31, 2003

  	
  /s/ D. Scott Buchanan

  	
   

  
	
   

  	
  Scott Buchanan, CEO & President

  

 

We have taken notice of this Agreement and agree with all terms and
conditions therein and relevant to the Guarantor.

 

	
  Dassesta International S.A.

  	
  Consulting Partners Ltd.

  
	
   

  	
   

  
	
  Place/Date: Zurich, Mar. 7, 2003

  	
  /s/ Nina Racciati

  	
   

  
	
   

  	
  Nina Racciati

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  /s/ Christian Rockstroh

  	
   

  
	
   

  	
  Christian Rockstroh

  

 

I, Martin P. Egli, hereby personally guarantee the obligation of this
loan agreement up to the amount of USD 500,000.

 

	
  Martin P. Egli

  	
   

  
	
   

  	
   

  
	
  Place/Date: Zurich, Mar. 10, 2003

  	
  /s/ Martin P. Egli

  	
   

  
	
   

  	
  Martin P. Egli

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