Exhibit 99.2
FOURTH AMENDMENT TO LOAN AND SECURITY AGREEMENT
BETWEEN
HYBRIDON, INC.
AND
SILICON VALLEY BANK
This Fourth Amendment is made, effective as of the 29th day of
September, 1998, to that certain Loan and Security Agreement between Hybridon,
Inc., a Delaware corporation with a principal place of business at 155 Fortune
Boulevard, Milford, Massachusetts (the "Borrower") and Silicon Valley Bank (the
"Bank") dated as of December 31, 1996, as amended by consent letter agreement
(the "Consent Letter") dated January 15, 1998 and by First Amendment to Loan and
Security Agreement dated March 30, 1998 (the "First Amendment"), Second
Amendment to Loan and Security Agreement dated April 16, 1998 (the "Second
Amendment") and Third Amendment to Loan and Security Agreement dated September
18, 1998 (the "Third Amendment"). The Loan and Security Agreement as so amended
is hereinafter referred to as the "Loan Agreement". Capitalized terms used, but
not defined in this Fourth Amendment shall have the meanings ascribed to them in
the Loan Agreement and ancillary documents, instruments and agreements, or if
not so defined, shall have the meanings ascribed to them in the Uniform
Commercial Code, or in the case of financial and accounting terms, in accordance
with generally accepted accounting principles.
RECITALS
Pursuant to the Third Amendment, the Borrower and the Bank agreed to
temporarily waive compliance by the Borrower with the Tangible Net Worth and
Minimum Liquidity covenants (as amended) through September 29, 1998 to
accommodate the sale by the Borrower of the CRLP Interest. The closing of the
sale of the CRLP Interest has not occurred and the Borrower has requested that
the Bank agree to extend the waiver of covenant compliance until October 31,
1998.
The Bank is willing to consent to extend the temporary waiver of the
Minimum Liquidity and Tangible Net Worth covenants, but only upon the terms and
conditions set forth in this Fourth Amendment.
AGREEMENT
In consideration of the foregoing, and of the undertakings and
obligations of the Borrower and the Bank set forth herein and for other good and
valuable consideration, receipt and sufficiency of which are hereby
acknowledged, the Borrower and Bank agree as follows:
1. The Borrower confirms that the outstanding balance of principal and
interest on the Loan as of October 15, 1998 is as set forth in
Schedule 1 hereto, and that the Borrower has no defense, claim or
offset which would preclude full payment of such amount.
2. The Borrower ratifies and confirms: (i) its Obligations to the Bank
under the Loan Agreement, as amended hereby, (ii) all of the
representations and warranties made by it in the Loan Agreement,
except as expressly disclosed to the Bank, and (iii) that it is in
compliance with
the covenants and agreements contained in the Loan Agreement except
for its failure to maintain compliance with the covenants waived in
the First Amendment, its failure to comply with Section 6.10(c) of the
Loan Agreement, to the extent that such failure is nevertheless in
compliance with the Intellectual Property Security Agreement (the "IP
Security Agreement") delivered by the Borrower in connection with the
Consent Letter (it being agreed that the provisions of Section 6.10(c)
shall be deemed superseded by the analogous provisions of the IP
Security Agreement), and except for Borrower's failure to comply with
the Minimum Liquidity and Tangible Net Worth covenants as of June 30,
1998 and thereafter.
3. The Bank hereby waives any existing defaults in the Minimum Liquidity
and Tangible Net Worth covenants and also waives compliance by the
Borrower with the Minimum Liquidity and Tangible Net Worth covenants
through October 31, 1998; provided however, that if the CRLP Put Date
is earlier than October 31, 1998, testing of such covenants shall
begin on the following business day after the CRLP Put Date rather
than on October 31, 1998. Within two (2) business days after the CRLP
Put Date, the Borrower will pay to the Bank in good and collected
funds, in addition to any regularly scheduled payments on the
Obligations, the sum of $750,000 as an additional payment against the
principal of the Obligations.
4. In consideration of the Bank's agreement to extend its waiver of
compliance with the Tangible Net Worth and Liquidity covenants through
October 31, 1998, the Borrower shall pay to the Bank a forbearance fee
in the amount of $25,000 in addition to any other amounts due with
respect to the Obligations. If the CRLP Put Date is after October 15,
1998, the forbearance fee shall increase by $1,000 per day commencing
October 16, 1998, but in no event more than an additional $16,000. The
$25,000 installment of the forbearance fee is due and payable on the
date of this Fourth Amendment, and any and all incremental increases
thereto shall be due and payable no later than October 31, 1998.
5. The Borrower further acknowledges that all reasonable out-of-pocket
costs and expenses of he Bank in connection with negotiation,
documentation and administration of this Fourth Amendment, including
reasonable fees of attorneys engaged to represent the Bank, shall be
borne by the Borrower.
6. The Borrower acknowledges and confirms that to the extent that the
Borrower may have any claims, offsets, counterclaims, or defenses,
asserted or unasserted, the Borrower, for itself, and on behalf of its
successors, assigns, parents, subsidiaries, agents, affiliates,
predecessors, employees, officers, directors, executors and heirs, as
applicable (collectively, the "Borrower Affiliates") releases and
forever discharges the Bank, its subsidiaries, affiliates, employees,
officers, directors, agents, successors and assigns, both present and
former (collectively, the "Bank Affiliates") of and from any and all
manner of claims, offsets, counterclaims, defenses, action and
actions, cause and causes of action, suits, debts, controversies,
damages, judgments, executions, and demands whatsoever, asserted or
unasserted, in law or in equity, which against the Bank and/or the
Bank Affiliates, they or the Borrower Affiliates ever had to and
including the date hereof, upon or by reason of any matter, cause,
causes or thing whatsoever, in connection with the Loan and/or any of
the transactions and matters related thereto, except for the
obligations of the Bank in such documents, instruments and agreements
to be performed after the date of this Fourth Amendment. The Borrower
shall indemnify, defend
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and hold the Bank harmless of and from any claim brought or threatened
against the Bank by the Borrower or any other person (as well as from
attorneys' fees and expenses in connection therewith) on account of
the Loan Agreement, the Note, the Consent Letter, the Intellectual
Property Security Agreement, Pledge Agreement, Intercreditor
Agreement, the First Amendment, the Second Amendment, the Third
Amendment, this Fourth Amendment and any other document, instrument or
agreement given in connection with the Loan and any of the
transactions and matters related thereto (each of which may be
defended, compromised, settled or pursued by the Bank with counsel of
the Bank's election reasonably acceptable to the Borrower, but at the
expense of the Borrower), except in the case of the Bank's failure to
comply with its obligations hereunder or thereunder, its gross
negligence or willful misconduct.
7. The Borrower acknowledges and agrees that the Bank's agreement herein
to temporarily waive compliance with the Minimum Liquidity and
Tangible Net Worth covenants shall not create a course of dealing or
conduct and that the Bank has not agreed to waive any other covenant
or agreement with the Borrower or to waive compliance with the Minimum
Liquidity and Tangible Net Worth covenants other than for the limited
time period set forth in this Fourth Amendment.
8. To the extent possible, this Fourth Amendment shall be construed to be
consistent with the provisions of the Loan Agreement; however, to the
extent that the provisions of this Fourth Amendment expressly conflict
with or contradict the provisions of the Loan Agreement, the
provisions of this Fourth Amendment shall be deemed to control.
9. This Fourth Amendment represents the entire agreement between the
parties with respect to the modifications contained herein, and shall
be construed in accordance with the laws of the Commonwealth of
Massachusetts as an agreement under seal. The Borrower has voluntarily
entered into this Fourth Amendment without coercion or duress of any
kind and has been or has had the opportunity to have been represented
by legal counsel of its choosing.
WITNESS OUR hands and seals on this 30th day of October, 1998,
effective as of September 29, 1998.
WITNESS: SILICON VALLEY BANK
/s/ C. Wade By: /s/ Sean Lynden
- - ----------------------------- ------------------------
HYBRIDON, INC.
/s/ Cheryl M. Northrup By: /s/ E. Andrews Grinstead
- - ----------------------------- ------------------------
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SCHEDULE 1 TO
FOURTH AMENDMENT TO LOAN AND SECURITY AGREEMENT
BETWEEN
SILICON VALLEY BANK
AND HYBRIDON, INC.
Principal Balance as of October 15, 1998 $2,832,289.22
Interest outstanding at October 15, 1998 14,613.83
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