Exhibit 4.1
THIS WARRANT AND THE SHARES ISSUABLE HEREUNDER HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “
ACT
”), OR THE SECURITIES LAWS OF ANY STATE AND, EXCEPT AS SET FORTH IN SECTIONS 5.3 AND 5.4 BELOW, MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED UNLESS AND UNTIL REGISTERED UNDER SAID ACT AND LAWS OR, IN THE OPINION OF LEGAL COUNSEL IN FORM AND SUBSTANCE SATISFACTORY TO THE COMPANY, SUCH OFFER, SALE, PLEDGE OR OTHER TRANSFER IS EXEMPT FROM SUCH REGISTRATION.
WARRANT TO PURCHASE STOCK
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Company:
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TROVAGENE, INC., a Delaware corporation
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Number of Shares:
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15,496
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Type/Series of Stock:
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Common Stock
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Warrant Price:
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$4.84 per share
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Issue Date:
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July 20, 2016
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Expiration Date:
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July 20, 2026 See also Section 5.1(b).
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Credit Facility:
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This Warrant to Purchase Stock (“
Warrant
”) is issued in connection with that certain Loan and Security Agreement dated as of June 30, 2014, among Oxford Finance LLC, as Lender and Collateral Agent, the Lenders from time to time party thereto, including Silicon Valley Bank and the Company (as modified, amended and/or restated from time to time, the “
Loan Agreement
”).
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THIS WARRANT CERTIFIES THAT, for good and valuable consideration, (“
” and, together with any successor or permitted assignee or transferee of this Warrant or of any shares issued upon exercise hereof, “
Holder
”) is entitled to purchase the number of fully paid and non-assessable shares (the “
Shares
”) of the above-stated Type/Series of Stock (the “
Class
”) of the above-named company (the “
Company
”) at the above-stated Warrant Price, all as set forth above and as adjusted pursuant to Section 2 of this Warrant, subject to the provisions and upon the terms and conditions set forth in this Warrant.
SECTION 1.
EXERCISE.
1.1
Method of Exercise
. Holder may at any time and from time to time exercise this Warrant, in whole or in part, by delivering to the Company the original of this Warrant together with a duly executed Notice of Exercise in substantially the form attached hereto as Appendix 1 and, unless Holder is exercising this Warrant pursuant to a cashless exercise set forth in Section 1.2, a check, wire transfer of same-day funds (to an account designated by the Company), or other form of payment acceptable to the Company for the aggregate Warrant Price for the Shares being purchased.
1.2
Cashless Exercise
. On any exercise of this Warrant, in lieu of payment of the aggregate Warrant Price in the manner as specified in Section 1.1 above, but otherwise in accordance with the requirements of Section 1.1, Holder may elect to receive Shares equal to the value of this Warrant, or portion hereof as to which this Warrant is being exercised. Thereupon, the Company shall issue to the Holder such number of fully paid and non-assessable Shares as are computed using the following formula:
X = Y(A-B)/A
where:
X =
the number of Shares to be issued to the Holder;
Y =
the number of Shares with respect to which this Warrant is being exercised (inclusive of the Shares surrendered to the Company in payment of the aggregate Warrant Price);
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A =
the Fair Market Value (as determined pursuant to Section 1.3 below) of one Share; and
B =
the Warrant Price.
1.3
Fair Market Value
. If the Company’s common stock is then traded or quoted on a nationally recognized securities exchange, inter-dealer quotation system or over-the-counter market (a “
Trading Market
”) and the Class is common stock, the fair market value of a Share shall be the closing price or last sale price of a share of common stock reported for the Business Day immediately before the date on which Holder delivers this Warrant together with its Notice of Exercise to the Company. If the Company’s common stock is not traded in a Trading Market, the Board of Directors of the Company shall determine the fair market value of a Share in its reasonable good faith judgment.
1.4
Delivery of Certificate and New Warrant
. Within a reasonable time after Holder exercises this Warrant in the manner set forth in Section 1.1 or 1.2 above, the Company shall deliver to Holder a certificate representing the Shares issued to Holder upon such exercise and, if this Warrant has not been fully exercised and has not expired, a new warrant of like tenor representing the Shares not so acquired.
1.5
Replacement of Warrant
. On receipt of evidence reasonably satisfactory to the Company of the loss, theft, destruction or mutilation of this Warrant and, in the case of loss, theft or destruction, on delivery of an indemnity agreement reasonably satisfactory in form, substance and amount to the Company or, in the case of mutilation, on surrender of this Warrant to the Company for cancellation, the Company shall, within a reasonable time, execute and deliver to Holder, in lieu of this Warrant, a new warrant of like tenor and amount.
1.6
Treatment of Warrant Upon Acquisition of Company
.
(a)
Acquisition
. For the purpose of this Warrant, “
Acquisition
” means any transaction or series of related transactions involving: (i) the sale, lease, exclusive license, or other disposition of all or substantially all of the assets of the Company (ii) any merger or consolidation of the Company into or with another person or entity (other than a merger or consolidation effected exclusively to change the Company’s domicile), or any other corporate reorganization, in which the stockholders of the Company in their capacity as such immediately prior to such merger, consolidation or reorganization, own less than a majority of the Company’s (or the surviving or successor entity’s) outstanding voting power immediately after such merger, consolidation or reorganization (or, if such Company stockholders beneficially own a majority of the outstanding voting power of the surviving or successor entity as of immediately after such merger, consolidation or reorganization, such surviving or successor entity is not the Company); or (iii) any sale or other transfer by the stockholders of the Company of shares representing at least a majority of the Company’s then-total outstanding combined voting power.
(b)
Treatment of Warrant at Acquisition
. In the event of an Acquisition in which the consideration to be received by the Company’s stockholders consists solely of cash, solely of Marketable Securities or a combination of cash and Marketable Securities (a “
Cash/Public Acquisition
”), either (i) Holder shall exercise this Warrant pursuant to Section 1.1 and/or 1.2 and such exercise will be deemed effective immediately prior to and contingent upon the consummation of such Acquisition or (ii) if Holder elects not to exercise the Warrant, this Warrant will expire immediately prior to the consummation of such Acquisition.
(c)
The Company shall provide Holder with written notice of its request relating to the Cash/Public Acquisition (together with such reasonable information as Holder may reasonably require regarding the treatment of this Warrant in connection with such contemplated Cash/Public Acquisition giving rise to such notice), which is to be delivered to Holder not less than seven (7) Business Days prior to the closing of the proposed Cash/Public Acquisition. In the event the Company does not provide such notice, then if, immediately prior to the Cash/Public Acquisition, the fair market value of one Share (or other security issuable upon the exercise hereof) as determined in accordance with Section 1.3 above would be greater than the Warrant Price in effect on such date, then this Warrant shall automatically be deemed on and as of such date to be exercised pursuant to Section 1.2 above as to all Shares (or such other securities) for which it shall not previously have been exercised, and the Company shall promptly notify the Holder of the number of Shares (or such other securities) issued upon such exercise to the
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Holder and Holder shall be deemed to have restated each of the representations and warranties in Section 4 of the Warrant as the date thereof.
(d)
Upon the closing of any Acquisition other than a Cash/Public Acquisition defined above, the acquiring, surviving or successor entity shall assume the obligations of this Warrant, and this Warrant shall thereafter be exercisable for the same securities and/or other property as would have been paid for the Shares issuable upon exercise of the unexercised portion of this Warrant as if such Shares were outstanding on and as of the closing of such Acquisition, subject to further adjustment from time to time in accordance with the provisions of this Warrant.
(e)
As used in this Warrant, “
Marketable Securities
” means securities meeting all of the following requirements: (i) the issuer thereof is then subject to the reporting requirements of Section 13 or Section 15(d) of the Securities Exchange Act of 1934, as amended (the “
Exchange Act
”), and is then current in its filing of all required reports and other information under the Act and the Exchange Act; (ii) the class and series of shares or other security of the issuer that would be received by Holder in connection with the Acquisition were Holder to exercise this Warrant on or prior to the closing thereof is then traded in Trading Market, and (iii) following the closing of such Acquisition, Holder would not be restricted from publicly re-selling all of the issuer’s shares and/or other securities that would be received by Holder in such Acquisition were Holder to exercise or convert this Warrant in full on or prior to the closing of such Acquisition, except to the extent that any such restriction (x) arises solely under federal or state securities laws, rules or regulations, and (y) does not extend beyond six (6) months from the closing of such Acquisition.
SECTION 2.
ADJUSTMENTS TO THE SHARES AND WARRANT PRICE.
2.1
Stock Dividends, Splits, Etc
. If the Company declares or pays a dividend or distribution on the outstanding shares of the Class payable in common stock or other securities or property (other than cash), then upon exercise of this Warrant, for each Share acquired, Holder shall receive, without additional cost to Holder, the total number and kind of securities and property which Holder would have received had Holder owned the Shares of record as of the date the dividend or distribution occurred. If the Company subdivides the outstanding shares of the Class by reclassification or otherwise into a greater number of shares, the number of Shares purchasable hereunder shall be proportionately increased and the Warrant Price shall be proportionately decreased. If the outstanding shares of the Class are combined or consolidated, by reclassification or otherwise, into a lesser number of shares, the Warrant Price shall be proportionately increased and the number of Shares shall be proportionately decreased.
2.2
Reclassification, Exchange, Combinations or Substitution
. Upon any event whereby all of the outstanding shares of the Class are reclassified, exchanged, combined, substituted, or replaced for, into, with or by Company securities of a different class and/or series, then from and after the consummation of such event, this Warrant will be exercisable for the number, class and series of Company securities that Holder would have received had the Shares been outstanding on and as of the consummation of such event, and subject to further adjustment thereafter from time to time in accordance with the provisions of this Warrant. The provisions of this Section 2.2 shall similarly apply to successive reclassifications, exchanges, combinations substitutions, replacements or other similar events.
2.3
No Fractional Share
. No fractional Share shall be issuable upon exercise of this Warrant and the number of Shares to be issued shall be rounded down to the nearest whole Share. If a fractional Share interest arises upon any exercise of the Warrant, the Company shall eliminate such fractional Share interest by paying Holder in cash the amount computed by multiplying the fractional interest by (i) the fair market value (as determined in accordance with Section 1.3 above) of a full Share, less (ii) the then-effective Warrant Price.
2.4
Notice/Certificate as to Adjustments
. Upon each adjustment of the Warrant Price, Class and/or number of Shares, the Company, at the Company’s expense, shall notify Holder in writing within a reasonable time setting forth the adjustments to the Warrant Price, Class and/or number of Shares and facts upon which such adjustment is based. The Company shall, upon written request from Holder, furnish Holder with a certificate of its Chief Financial Officer, including computations of such adjustment and the Warrant Price, Class and number of Shares in effect upon the date of such adjustment.
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SECTION 3.
REPRESENTATIONS AND COVENANTS OF THE COMPANY.
3.1
Representations and Warranties
. The Company represents and warrants to, and agrees with, the Holder as follows:
(a)
The initial Warrant Price referenced on the first page of this Warrant is not greater than the price per share at which shares of the Class were last sold and issued prior to the Issue Date hereof in an arms-length transaction in which at least Five Hundred Thousand Dollars ($500,000.00) of such shares were sold.
(b)
All Shares which may be issued upon the exercise of this Warrant, and all securities, if any, issuable upon conversion of the Shares, shall, upon issuance, be duly authorized, validly issued, fully paid and non-assessable, and free of any liens and encumbrances except for restrictions on transfer provided for herein or under applicable federal and state securities laws. The Company covenants that it shall at all times cause to be reserved and kept available out of its authorized and unissued capital stock such number of shares of the Class, common stock and other securities as will be sufficient to permit the exercise in full of this Warrant and the conversion of the Shares into common stock or such other securities.
3.2
Notice of Certain Events
. If the Company proposes at any time to:
(a)
declare any dividend or distribution upon the outstanding shares of the Class or common stock, whether in cash, property, stock, or other securities and whether or not a regular cash dividend;
(b)
offer for subscription or sale pro rata to the holders of the outstanding shares of the Class any additional shares of any class or series of the Company’s stock (other than pursuant to contractual pre-emptive rights);
(c)
effect any reclassification, exchange, combination, substitution, reorganization or recapitalization of the outstanding shares of the Class; or
(d)
effect an Acquisition or to liquidate, dissolve or wind up;
then, in connection with each such event, the Company shall give Holder:
(1)
at least seven (7) Business Days prior written notice of the date on which a record will be taken for such dividend, distribution, or subscription rights (and specifying the date on which the holders of outstanding shares of the Class will be entitled thereto) or for determining rights to vote, if any, in respect of the matters referred to in (a) and (b) above; and
(2)
in the case of the matters referred to in (c) and (d) above at least seven (7) Business Days prior written notice of the date when the same will take place (and specifying the date on which the holders of outstanding shares of the Class will be entitled to exchange their shares for the securities or other property deliverable upon the occurrence of such event).
Reference is made to Section 1.6(c) whereby this Warrant will be deemed to be exercised pursuant to Section 1.2 hereof if the Company does not give written notice to Holder of a Cash/Public Acquisition as required by the terms hereof. Company will also provide information requested by Holder that is reasonably necessary to enable Holder to comply with Holder’s accounting or reporting requirements.
SECTION 4.
REPRESENTATIONS, WARRANTIES OF THE HOLDER.
The Holder represents and warrants to the Company as follows:
4.1
Purchase for Own Account
. This Warrant and the securities to be acquired upon exercise of this Warrant by Holder are being acquired for investment for Holder’s account, not as a nominee or agent, and not
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with a view to the public resale or distribution within the meaning of the Act. Holder also represents that it has not been formed for the specific purpose of acquiring this Warrant or the Shares.
4.2
Disclosure of Information
. Holder is aware of the Company’s business affairs and financial condition and has received or has had full access to all the information it considers necessary or appropriate to make an informed investment decision with respect to the acquisition of this Warrant and its underlying securities. Holder further has had an opportunity to ask questions and receive answers from the Company regarding the terms and conditions of the offering of this Warrant and its underlying securities and to obtain additional information (to the extent the Company possessed such information or could acquire it without unreasonable effort or expense) necessary to verify any information furnished to Holder or to which Holder has access.
4.3
Investment Experience
. Holder understands that the purchase of this Warrant and its underlying securities involves substantial risk. Holder has experience as an investor in securities of companies in the development stage and acknowledges that Holder can bear the economic risk of such Holder’s investment in this Warrant and its underlying securities and has such knowledge and experience in financial or business matters that Holder is capable of evaluating the merits and risks of its investment in this Warrant and its underlying securities and/or has a preexisting personal or business relationship with the Company and certain of its officers, directors or controlling persons of a nature and duration that enables Holder to be aware of the character, business acumen and financial circumstances of such persons.
4.4
Accredited Investor Status
. Holder is an “accredited investor” within the meaning of Regulation D promulgated under the Act.
4.5
The Act
. Holder understands that this Warrant and the Shares issuable upon exercise hereof have not been registered under the Act in reliance upon a specific exemption therefrom, which exemption depends upon, among other things, the bona fide nature of the Holder’s investment intent as expressed herein. Holder understands that this Warrant and the Shares issued upon any exercise hereof must be held indefinitely unless subsequently registered under the Act and qualified under applicable state securities laws, or unless exemption from such registration and qualification are otherwise available. Holder is aware of the provisions of Rule 144 promulgated under the Act.
4.6
No Voting Rights
. Holder, as a Holder of this Warrant, will not have any voting rights until the exercise of this Warrant.
SECTION 5.
MISCELLANEOUS.
5.1
Term; Automatic Cashless Exercise Upon Expiration
.
(a)
Term
. Subject to the provisions of Section 1.6 above, this Warrant is exercisable in whole or in part at any time and from time to time on or before 6:00 PM, Eastern Time, on the Expiration Date and shall be void thereafter.
(b)
Automatic Cashless Exercise upon Expiration
. In the event that, upon the Expiration Date, the fair market value of one Share (or other security issuable upon the exercise hereof) as determined in accordance with Section 1.3 above is greater than the Warrant Price in effect on such date, then this Warrant shall automatically be deemed on and as of such date to be exercised pursuant to Section 1.2 above as to all Shares (or such other securities) for which it shall not previously have been exercised, and the Company shall, within a reasonable time, deliver a certificate representing the Shares (or such other securities) issued upon such exercise to Holder.
5.2
Legends
. Each certificate evidencing Shares (and each certificate evidencing the securities issued upon conversion of any Shares, if any) shall be imprinted with a legend in substantially the following form:
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THE SHARES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “
ACT
”), OR THE SECURITIES LAWS OF ANY STATE AND, EXCEPT AS SET FORTH IN THAT CERTAIN WARRANT TO PURCHASE STOCK ISSUED BY THE ISSUER TO OXFORD FINANCE LLC DATED JULY 20, 2016, MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED UNLESS AND UNTIL REGISTERED UNDER SAID ACT AND LAWS OR, IN THE OPINION OF LEGAL COUNSEL IN FORM AND SUBSTANCE SATISFACTORY TO THE ISSUER, SUCH OFFER, SALE, PLEDGE OR OTHER TRANSFER IS EXEMPT FROM SUCH REGISTRATION.
5.3
Compliance with Securities Laws on Transfer
. This Warrant and the Shares issued upon exercise of this Warrant (and the securities issuable, directly or indirectly, upon conversion of the Shares, if any) may not be transferred or assigned in whole or in part except in compliance with applicable federal and state securities laws by the transferor and the transferee (including, without limitation, the delivery of investment representation letters and legal opinions reasonably satisfactory to the Company, as reasonably requested by the Company). The Company shall not require Holder to provide an opinion of counsel if the transfer is to an affiliate of Holder, provided that any such transferee is an “accredited investor” as defined in Regulation D promulgated under the Act. Additionally, the Company shall also not require an opinion of counsel if there is no material question as to the availability of Rule 144 promulgated under the Act.
5.4
Transfer Procedure
. After receipt by Oxford of the executed Warrant, Oxford may transfer all or part of this Warrant to one or more of Oxford’s affiliates (each, an “
Oxford Affiliate
”), by execution of an Assignment substantially in the form of Appendix 2. Subject to the provisions of Article 5.3 and upon providing the Company with written notice, Oxford, any such Oxford Affiliate and any subsequent Holder, may transfer all or part of this Warrant or the Shares issuable upon exercise of this Warrant (or the Shares issuable directly or indirectly, upon conversion of the Shares, if any) to any other transferee, provided, however, in connection with any such transfer, the Oxford Affiliate(s) or any subsequent Holder will give the Company notice of the portion of the Warrant being transferred with the name, address and taxpayer identification number of the transferee and Holder will surrender this Warrant to the Company for reissuance to the transferee(s) (and Holder if applicable).
5.5
Notices
. All notices and other communications hereunder from the Company to the Holder, or vice versa, shall be deemed delivered and effective (i) when given personally, (ii) on the third (3rd) Business Day after being mailed by first-class registered or certified mail, postage prepaid, (iii) upon actual receipt if given by facsimile or electronic mail and such receipt is confirmed in writing by the recipient, or (iv) on the first Business Day following delivery to a reliable overnight courier service, courier fee prepaid, in any case at such address as may have been furnished to the Company or Holder, as the case may be, in writing by the Company or such Holder from time to time in accordance with the provisions of this Section 5.5. All notices to Holder shall be addressed as follows until the Company receives notice of a change of address in connection with a transfer or otherwise:
Oxford Finance LLC
133 N. Fairfax Street
Alexandria, VA 22314
Attn: Legal Department
Telephone: (703) 519-4900
Facsimile: (703) 519-5225
Email: LegalDepartment@oxfordfinance.com
Notice to the Company shall be addressed as follows until Holder receives notice of a change in address:
Trovagene, Inc.
11055 Flintkote Avenue, Suite B
San Diego, CA 92121
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Attn: Stephen Zaniboni, Chief Financial Officer
Telephone: (858) 967-8014
Facsimile: (858) 952-7570
Email: szaniboni@trovagene.com
With a copy (which shall not constitute notice) to:
Sichenzia Ross Friedman Ference LLP
61 Broadway, 32nd Floor
New York, NY 10006
Attn: Jeffrey Fessler
Telephone: (212) 930-9700
Facsimile: (212) 930-9725
Email: jfessler@srff.com
5.6
Waiver
. This Warrant and any term hereof may be changed, waived, discharged or terminated (either generally or in a particular instance and either retroactively or prospectively) only by an instrument in writing signed by the party against which enforcement of such change, waiver, discharge or termination is sought.
5.7
Attorneys’ Fees
. In the event of any dispute between the parties concerning the terms and provisions of this Warrant, the party prevailing in such dispute shall be entitled to collect from the other party all costs incurred in such dispute, including reasonable attorneys’ fees.
5.8
Counterparts; Facsimile/Electronic Signatures
. This Warrant may be executed in counterparts, all of which together shall constitute one and the same agreement. Any signature page delivered electronically or by facsimile shall be binding to the same extent as an original signature page with regards to any agreement subject to the terms hereof or any amendment thereto.
5.9
Governing Law
. This Warrant shall be governed by and construed in accordance with the laws of the State of California, without giving effect to its principles regarding conflicts of law.
5.10
Headings
. The headings in this Warrant are for purposes of reference only and shall not limit or otherwise affect the meaning of any provision of this Warrant.
5.11
Business Days
. “
Business Day
” is any day that is not a Saturday, Sunday or a day on which banks in California are closed.
[Remainder of page left blank intentionally]
[Signature page follows]
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IN WITNESS WHEREOF, the parties have caused this Warrant to Purchase Stock to be executed by their duly authorized representatives effective as of the Issue Date written above.
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“COMPANY”
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TROVAGENE, INC.
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Name:
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(Print)
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Title:
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“HOLDER”
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OXFORD FINANCE LLC
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By:
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[
Signature Page to Warrant to Purchase Stock
]
APPENDIX 1
NOTICE OF EXERCISE
1.
The undersigned Holder hereby exercises its right purchase shares of the Common Stock of Trovagene, Inc. (the “
Company
”) in accordance with the attached Warrant To Purchase Stock, and tenders payment of the aggregate Warrant Price for such shares as follows:
o
check in the amount of $ payable to order of the Company enclosed herewith
o
Wire transfer of immediately available funds to the Company’s account
o
Cashless Exercise pursuant to Section 1.2 of the Warrant
o
Other [Describe]
2.
Please issue a certificate or certificates representing the Shares in the name specified below:
3.
By its execution below and for the benefit of the Company, Holder hereby restates each of the representations and warranties in Section 4 of the Warrant to Purchase Stock as of the date hereof.
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HOLDER:
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APPENDIX 2
ASSIGNMENT
For value received, hereby sells, assigns and transfers unto
Name:
Address:
Tax ID:
that certain Warrant to Purchase Stock issued by Trovagene, Inc. (the “
Company
”), on July 20, 2016 (the “
Warrant
”) together with all rights, title and interest therein.
By its execution below, and for the benefit of the Company, makes each of the representations and warranties set forth in Article 4 of the Warrant and agrees to all other provisions of the Warrant as of the date hereof.
Exhibit 10.1
FIFTH AMENDMENT TO
LOAN AND SECURITY AGREEMENT
THIS
FIFTH AMENDMENT
to Loan and Security Agreement (this “
Amendment
”) is entered into as of July 20, 2016, by and among OXFORD FINANCE LLC, a Delaware limited liability company with an office located at 133 North Fairfax Street, Alexandria, Virginia 22314 (“
Oxford
”), as collateral agent (in such capacity, “
Collateral Agent
”), the Lenders listed on
Schedule 1.1
of the Loan Agreement (as defined below) or otherwise party thereto from time to time including Oxford in its capacity as a Lender
and SILICON VALLEY BANK, a California corporation with an office located at 3003 Tasman Drive, Santa Clara, CA 95054 (“
Bank
” or “
SVB
”) (each a “
Lender
” and collectively, the “
Lenders
”), and TROVAGENE, INC., a Delaware corporation, with offices located at 11055 Flintkote Ave, Suite B, San Diego, CA 92121 (“
Borrower
”).
RECITALS
A.
Collateral Agent, Lenders and Borrower have entered into that certain Loan and Security Agreement dated as of June 30, 2014 (as amended from time to time, including but without limitation by that certain First Amendment to Loan and Security Agreement dated as of December 18, 2014, that certain Second Amendment to Loan and Security Agreement dated as of May 6, 2015, that certain Consent and Third Amendment to Loan and Security Agreement dated as of November 17, 2015, and that certain Consent and Fourth Amendment to Loan and Security Agreement dated as of June 6, 2016, the “
Loan Agreement
”).
B.
Lenders have extended credit to Borrower for the purposes permitted in the Loan Agreement.
C.
Borrower has requested that Collateral Agent and Lenders amend certain provisions of the Loan Agreement as more fully set forth herein.
D.
Collateral Agent and Lenders have agreed to amend certain provisions of the Loan Agreement, but only to the extent, in accordance with the terms, subject to the conditions and in reliance upon the representations and warranties set forth below.
AGREEMENT
NOW, THEREFORE
, in consideration of the foregoing recitals and other good and valuable consideration, the receipt and adequacy of which is hereby acknowledged, and intending to be legally bound, the parties hereto agree as follows:
1.
Definitions
. Capitalized terms used but not defined in this Amendment shall have the meanings given to them in the Loan Agreement.
2.
Amendments to Loan Agreement
.
2.1
Section 2.2 (Term Loans)
. Sections 2.2(a)-(b) of the Loan Agreement are amended and restated as follows:
“(a)
Availability
.
(i)
Subject to the terms and conditions of this Agreement, Lenders, severally and not jointly, loaned to Borrower term loans on the Effective Date according to each Lender’s Term Loan Commitment as set forth in
Schedule 1.1
hereto as in effect immediately prior to the Fifth Amendment Effective Date (such term loans are hereinafter referred to collectively as the “
Original Term Loans
”).
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(ii)
Subject to the terms and conditions of this Agreement, Lenders agree, severally and not jointly, to make term loans to Borrower on the Fifth Amendment Effective Date as follows:
(1)
SVB shall make a term loan to Borrower in an amount of Seven Million Five Hundred Thousand Dollars ($7,500,000.00) (the “
SVB New Loan
”), the proceeds of which will be deemed to repay Obligations owing from Borrower to SVB in respect of the Original Term Loans.
(2)
Oxford shall make a term loan to Borrower in an amount equal to One Million Three Hundred Ninety-Six Thousand One Hundred Sixty-Six and 96/100 Dollars ($1,396,166.96) (the “
Oxford New Loan
”, and together with (X) the Obligations owning from Borrower to Oxford in respect of the Original Term Loans, including those certain Secured Promissory Notes dated June 30, 2014, with the current principal balances of Three Million Six Hundred Sixty-Two Thousand Two Hundred Ninety-Nine and 81/100 Dollars ($3,662,299.81) and Two Million Four Hundred Forty-One Thousand Five Hundred Thirty-Three and 23/100 Dollars ($2,441,533.23) and (Y) the SVB New Loan, each a “
Term Loan
” and collectively, the “
Term Loans
”). Lenders agree to waive the Prepayment Fee otherwise due and payable to Lenders on the Fifth Amendment Effective Date with respect to the repayment of the Original Term Loans on the Fifth Amendment Effective Date. After repayment, no Term Loan may be re-borrowed.
(b)
Repayment
. Borrower shall make monthly payments of interest only commencing on the first (1
st
) Payment Date following the Funding Date of the Term Loans, and continuing on the Payment Date of each successive month thereafter through and including the Payment Date immediately preceding the Amortization Date. Borrower agrees to pay, on the Funding Date of the Term Loans, any initial partial monthly interest payment otherwise due for the period between the Funding Date of the Term Loans and the first Payment Date thereof. Commencing on the Amortization Date, and continuing on the Payment Date of each month thereafter, Borrower shall make consecutive equal monthly payments of principal, together with applicable interest, in arrears, to each Lender, as calculated by Collateral Agent (which calculations shall be deemed correct absent manifest error) based upon: (1) the amount of such Lender’s Term Loan, (2) the effective rate of interest, as determined in Section 2.3(a), and (3) a repayment schedule equal to (x) if the Amortization Date is March 1, 2017, thirty six (36) months; and (y) if the Amortization Date is September 1, 2017, thirty (30) months. All unpaid principal and accrued and unpaid interest with respect to the Term Loans is due and payable in full on the Maturity Date. The Term Loans may only be prepaid in accordance with Sections 2.2(c) and 2.2(d).”
2.2
Section 2.3 (Payment of Interest on the Credit Extensions)
. Sections 2.3(a)-(c) of the Loan Agreement are amended and restated as follows:
“(a)
Interest Rate.
Subject to Section 2.3(b), the principal amount outstanding under the Term Loans shall accrue interest at a floating per annum rate equal to the Basic Rate, determined by Collateral Agent, which interest shall be payable monthly in arrears in accordance with Sections 2.2(b) and 2.3(e). Interest shall accrue on each Term Loan commencing on, and including, the Funding Date of such Term Loan, and shall accrue on the principal amount outstanding under such Term Loan through and including the day on which such Term Loan is paid in full.
(b)
Default Rate
. Immediately upon the occurrence and during the continuance of an Event of Default, Obligations shall accrue interest at a floating per annum rate equal to the rate that is otherwise applicable thereto plus five percentage points (5.00%) (the “
Default Rate
”). Payment or acceptance of the increased interest rate provided in this Section 2.3(b) is not a permitted alternative to timely payment and shall not constitute a waiver of any Event of Default or otherwise prejudice or limit any rights or remedies of Collateral Agent.
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(c)
360-Day Year
. Interest shall be computed on the basis of a three hundred sixty (360) day year, and the actual number of days elapsed.”
2.3
Section 2.5 (Fees)
. A new Section 2.5(d) is added to the Loan Agreement as follows:
“(d)
Fifth Amendment Final Payment
. A final payment as of the Fifth Amendment Effective Date in an amount equal to Five Hundred Twenty Five Thousand Dollars ($525,000.00) to Oxford, in its capacity as a Lender, and Five Hundred Twenty Five Thousand Dollars ($525,000.00) to SVB on the Fifth Amendment Effective Date (as determined under the Loan Agreement as in effect immediately prior to the Fifth Amendment Effective Date), and provided that such fee shall not reduce the fee otherwise due under Section 2.5(a).”
2.4
Section 10 (Notices)
. Section 10 of the Loan Agreement is amended by deleting the notice information for “Cooley LLP” and substituting in lieu thereof the following:
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with a copy (which shall not constitute notice) to:
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VLP Law Group LLP
2947 Eskridge Road
Fairfax, VA 22031
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Attn: Denise Zack
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Fax: (703) 260-6551
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Email: DZack@vlplawgroup.com
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2.5
Section 13.1 (Definitions)
. The following definitions are added to or amended and restated in Section 13.1 of the Loan Agreement as follows:
“
Amortization Date
” is, (x) if the Interest Only Extension Event has not occurred, March 1, 2017, and (y) if the Interest Only Extension Event has occurred, September 1, 2017
.
“
Basic Rate
” is, with respect to the Term Loans, the per annum rate of interest (based on a year of three hundred sixty (360) days) equal to the greater of (i) seven and a quarter percent (7.25%) and (ii) the sum of (a) the Prime Rate on the last Business Day of the month that immediately precedes the month in which the interest will accrued (which shall not, in any case, be less than three and a half percent (3.50%)), plus (b) three and three quarters percent (3.75%). Notwithstanding the foregoing, the Basic Rate for the Term Loans for the period from the Fifth Amendment Effective Date through and including July 31, 2016, shall be seven and a quarter percent (7.25%).”
“
Final Payment Percentage
” is seven and one half percent (7.50%).
“
Fifth Amendment Effective Date
” means July 20, 2016.
“
Interest Only Extension Event
” means Collateral Agent’s and Lenders’ receipt of evidence in form and substance reasonably satisfactory to Collateral Agent and Lenders that (a) Borrower has successfully secured agreements with insurance providers/networks resulting in one hundred sixty-eight million (168,000,000) aggregate U.S. covered lives and (b) Borrower’s Trovera EGFR, KRAS and BRAF products have been placed on a list of diagnostics tests at a major U.S. cancer center reasonably satisfactory to Lenders
.
“
Maturity Date
” is February 1, 2020.
“
Original Term Loans
” is defined in Section 2.2(a)(i) hereof.
“
Oxford New Loan
” is defined in Section 2.2(a)(ii)(2) hereof.
“
Prepayment Fee
” is, with respect to any Term Loan subject to prepayment prior to the Maturity
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Date, whether by mandatory or voluntary prepayment, acceleration or otherwise, an additional fee payable to the Lenders in amount equal to:
(i)
for a prepayment made on or after the Fifth Amendment Effective Date through and including the first anniversary of the Fifth Amendment Effective Date, three percent (3.00%) of the principal amount of such Term Loan prepaid;
(ii)
for a prepayment made after the first anniversary of the Fifth Amendment Effective Date through and including the second anniversary of the Fifth Amendment Effective Date, two percent (2.00%) of the principal amount of the Term Loans prepaid; and
(iii)
for a prepayment made after the second anniversary of the Fifth Amendment Effective Date and prior to the Maturity Date, one percent (1.00%) of the principal amount of the Term Loans prepaid.
“
Prime Rate
” is the rate of interest per annum from time to time published in the money rates section of
The Wall Street Journal
or any successor publication thereto as the “prime rate” then in effect; provided that if such rate of interest, as set forth from time to time in the money rates section of
The Wall Street Journal
, becomes unavailable for any reason as determined by Lenders, the “Prime Rate” shall mean the rate of interest per annum announced by Bank as their prime rate in effect (such Bank announced Prime Rate not being intended to be the lowest rate of interest charged by Bank in connection with extensions of credit to debtors)
.
“
SVB New Loan
” is defined in Section 2.2(a)(ii)(1) hereof.
2.6
Section 13 (Definitions)
. The following term and its definition set forth in Section 13.1 are deleted in their entirety:
“
Treasury Note Maturity
”
2.7
Schedule 1.1
to the Loan Agreement is replaced with
Schedule 1.1
attached hereto.
2.8
The original Secured Promissory Note dated June 30, 2014 issued by Borrower in favor of SVB hereby is cancelled, null and void and of no further force and effect. The original Secured Promissory Notes dated June 30, 2014 issued by Borrower in favor of Oxford hereby are amended and restated to reflect the outstanding principal balances and date as of the Fifth Amendment Effective Date.
3.
Limitation of Amendment
.
3.1
The amendments set forth in Section 2 above are effective for the purposes set forth herein and shall be limited precisely as written and shall not be deemed to (a) be a consent to any amendment, waiver or modification of any other term or condition of any Loan Document, or (b) otherwise prejudice any right or remedy which Collateral Agent or any Lender may now have or may have in the future under or in connection with any Loan Document.
3.2
This Amendment shall be construed in connection with and as part of the Loan Documents and all terms, conditions, representations, warranties, covenants and agreements set forth in the Loan Documents, except as herein amended, are hereby ratified and confirmed and shall remain in full force and effect.
4.
Representations and Warranties
. To induce Collateral Agent and Lenders to enter into this Amendment, Borrower hereby represents and warrants to Collateral Agent and Lenders as follows:
4.1
Immediately after giving effect to this Amendment (a) the representations and warranties contained in the Loan Documents are true, accurate and complete in all material respects as of the date hereof
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(except to the extent such representations and warranties relate to an earlier date, in which case they are true and correct as of such date), and (b) no Event of Default has occurred and is continuing;
4.2
Borrower has the power and authority to execute and deliver this Amendment and to perform its obligations under the Loan Agreement, as amended by this Amendment;
4.3
The organizational documents of Borrower delivered to Collateral Agent and Lenders on the Effective Date, or subsequent thereto, remain true, accurate and complete and have not been amended, supplemented or restated and are and continue to be in full force and effect;
4.4
The execution and delivery by Borrower of this Amendment and the performance by Borrower of its obligations under the Loan Agreement, as amended by this Amendment, have been duly authorized;
4.5
The execution and delivery by Borrower of this Amendment and the performance by Borrower of its obligations under the Loan Agreement, as amended by this Amendment, do not and will not contravene (a) any law or regulation binding on or affecting Borrower, (b) any contractual restriction with a Person binding on Borrower, (c) any order, judgment or decree of any court or other governmental or public body or authority, or subdivision thereof, binding on Borrower, or (d) the organizational documents of Borrower;
4.6
The execution and delivery by Borrower of this Amendment and the performance by Borrower of its obligations under the Loan Agreement, as amended by this Amendment, do not require any order, consent, approval, license, authorization or validation of, or filing, recording or registration with, or exemption by any governmental or public body or authority, or subdivision thereof, binding on Borrower, except as already has been obtained or made; and
4.7
This Amendment has been duly executed and delivered by Borrower and is the binding obligation of Borrower, enforceable against Borrower in accordance with its terms, except as such enforceability may be limited by bankruptcy, insolvency, reorganization, liquidation, moratorium or other similar laws of general application and equitable principles relating to or affecting creditors’ rights.
5.
Integration
. This Amendment and the Loan Documents represent the entire agreement about this subject matter and supersede prior negotiations or agreements. All prior agreements, understandings, representations, warranties, and negotiations between the parties about the subject matter of this Amendment and the Loan Documents merge into this Amendment and the Loan Documents.
6.
Counterparts
. This Amendment may be executed in any number of counterparts and all of such counterparts taken together shall be deemed to constitute one and the same instrument.
7.
Effectiveness
. This Amendment shall be deemed effective upon the due execution and delivery to Collateral Agent and Lenders, in form and substance satisfactory to Collateral Agent and each Lender, such documents, and completion of such other matters, as Collateral Agent and each Lender may reasonably deem necessary or appropriate, including, without limitation:
a)
this Amendment by each party hereto;
b)
warrants to purchase stock by Borrower in favor of each Lender;
c)
a Secured Promissory Note in favor of SVB;
d)
a Secured Promissory Note and Amended and Restated Secured Promissory Notes in favor of Oxford;
e)
an updated Corporate Borrowing Certificate by Borrower;
f)
a disbursement letter by each party thereto;
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g)
a Loan Payment/Advance Request from;
h)
Borrower’s payment of the final payment fee in an amount equal to Five Hundred Twenty Five Thousand Dollars ($525,000.00) to Oxford, in its capacity as a Lender, and Five Hundred Twenty Five Thousand Dollars ($525,000.00) to SVB; and
i)
Borrower’s payment of all Lenders’ Expenses incurred through the date of this Amendment.
[
Balance of Page Intentionally Left Blank
]
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IN WITNESS WHEREOF,
the parties hereto have caused this Amendment to be duly executed and delivered as of the date first written above.
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BORROWER:
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TROVAGENE, INC.
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By
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Name:
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Title:
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[
Signature Page to Fifth Amendment to Loan and Security Agreement
]
IN WITNESS WHEREOF,
the parties hereto have caused this Amendment to be duly executed and delivered as of the date first written above.
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COLLATERAL AGENT AND LENDER:
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OXFORD FINANCE LLC
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By
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Name:
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Title:
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LENDER:
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SILICON VALLEY BANK
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By
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Name:
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Title:
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[
Signature Page to Fifth Amendment to Loan and Security Agreement
]
Exhibit 99.1
Diagnostic Performance of Urinary EGFR Testing in Lung Cancer Patients Published in
Journal of Thoracic Oncology
Data
confirms EGFR Activating Mutations and EGFR T790M in metastatic non-small cell lung cancer (NSCLC) diagnosis
in urine and blood with high
sensitivity and specificity
SAN DIEGO, CA — July 26, 2016 — Trovagene, Inc. (NASDAQ: TROV), a developer of circulating tumor DNA (ctDNA) molecular diagnostics, today announced the publication of study results that demonstrate the clinical and analytical validity of the Trovera™ urine- and blood based liquid biopsy tests to assess
EGFR
T790M mutational status
http://www.jto.org/article/S1556-0864(16)30587-1/abstract
The data show that the Trovera™ test, using proprietary mutation allele enrichment technology, successfully identifies
EGFR
mutations in both urine and blood of patients with metastatic non-small cell lung cancer (NSCLC) and has high concordance with tumor tissue.
“This study is the first to demonstrate that
EGFR
mutations can be detected in both the urine and blood of patients with metastatic non-small cell lung cancer,” said Karen Reckamp, M.D., co-director of the Lung Cancer and Thoracic Oncology Program at City of Hope Comprehensive Cancer Center, and primary author of the publication titled,
A Highly Sensitive and Quantitative Test Platform for Detection of NSCLC EGFR Mutations in Urine and Plasma.
“Circulating tumor DNA from non-small cell lung cancer can be detected with high sensitivity by liquid biopsy using either urine or blood, providing a noninvasive diagnostic method to identify the
EGFR
T790M mutation and potentially monitor response to targeted therapy.”
The blinded study was conducted on matched urine and plasma specimens collected from 63 patients with Stage IIIB-IV NSCLC enrolled in the TIGER-X trial of rociletinib, an investigational tyrosine kinase inhibitor (TKI). It found that urine, plasma and tissue tests identified a similar proportion of patients with the
EGFR
T790M mutation.
“This study is important because approximately 60% of NSCLC patients receiving TKI therapy develop resistance through the acquisition of the
EGFR
T790M mutation. The ability to use noninvasive biopsy methods is important to not only identify the resistance mutation, but also to longitudinally monitor the response to therapy,” noted Dr. Mark Erlander, Chief Scientific Officer at Trovagene. “Trovera is the only liquid biopsy test that can detect the mutation from
Trovagene Inc. | 11055 Flintkote Avenue | San Diego | CA 92121 | Tel.: USA [+1] 888-391-7992
both urine and blood samples, offering healthcare providers and patients with noninvasive diagnostic options to obtain information about the cancer and better personalize treatment.”
Additional Publication Highlights:
·
Using the tissue result as reference, the sensitivity of EGFR mutation detection in urine with specimens that met a recommended volume of 90-100 mL was 93% (13/14) for T790M, 71% (5/7) for L858R, and 83% (10/12) for exon 19 deletions. A comparable sensitivity of
EGFR
mutation detection was observed in plasma: 93% (38/41) for T790M, 100% (17/17) for L858R, and 87% (34/39) for exon 19 deletions.
·
The specificity of urine
EGFR
assays in healthy volunteers, or patients without NSCLC, was 96% for T790M, 94% for exon 19 deletions and 100% for L858R mutations
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The combination of urine and plasma testing identified 12 T790M-positive cases that were undetectable by testing of tumor tissue
About The T790M Mutation in Non-Small Cell Lung Cancer
While lung cancer is one of the most aggressive malignancies, progress has been made in the advancement of therapeutic strategies against the disease. In particular, epidermal growth factor receptor tyrosine kinase inhibitors (
EGFR
-TKIs) such as afatinib, erlotinib and gefitinib in non—small cell lung cancer (NSCLC) patients with
EGFR
mutations, have demonstrated clinical response rates as high as 80%. However, after about 6 to 12 months, most tumors develop acquired resistance to these targeted therapies. Research into such resistance has identified the secondary T790M mutation, which occurs in approximately 60% of patients with acquired resistance to
EGFR
-TKIs and is reported to negate the benefits of treatment. In November 2015,
osimertinib was approved by the U.S. Food and Drug Administration for the treatment of NSCLC patients with the T790M mutation, and several additional promising drug candidates are in development for this targeted indication.
About Trovagene’s Trovera™ brand of liquid biopsy tests
Built upon the Trovagene Precision Cancer Monitoring® (PCM) Platform, Trovera™ urine and blood based
EGFR
,
KRAS
and
BRAF
CLIA certified and CAP-accredited tests are available to healthcare providers for the detection and/or monitoring of tumor dynamics before, during and after treatment. Physicians interested in utilizing these tests should contact Client Services at 888-391-7992. For more information, please visit:
http://trovagene.com/hcp-home-page/trovagene-overview
About Trovagene, Inc.
Headquartered in San Diego, California, Trovagene is leveraging its proprietary Precision Cancer Monitoring
®
(PCM) technology for the detection and monitoring of circulating tumor DNA (ctDNA) in urine and blood. The Company’s technology detects and quantitates oncogene mutations in cancer patients for improved disease management. Trovagene’s PCM technology is designed to provide important clinical information beyond the current standard of care, and is protected by significant intellectual property including multiple issued patents and pending patent applications globally.
Certain statements in this press release are forward-looking within the meaning of the Private Securities Litigation Reform Act of 1995. These statements may be identified by the use of words such as “anticipate,” “believe,” “forecast,” “estimated” and “intend,” or other similar terms or expressions that concern Trovagene’s expectations, strategy, plans or intentions. These forward-looking statements are based on Trovagene’s current expectations and actual results could differ materially. There are a number of factors that could cause actual events to differ materially from those indicated by such forward-looking statements. These factors include, but are not limited to, substantial competition; our need for additional financing; uncertainties of patent protection and litigation; clinical trials involve a lengthy and expensive process with an uncertain outcome, and results of earlier studies and trials may not be predictive of future trial results; uncertainties of government or fourth party payer reimbursement; limited sales and marketing efforts and dependence upon fourth parties; and risks related to failure to obtain FDA clearances or approvals and noncompliance with FDA regulations. As with any medical diagnostic tests under development, there are significant risks in the development, regulatory approval and commercialization of new products. There are no guarantees that our
Precision Cancer Monitoring
®
platform will be utilized by oncologists or prove to be commercially successful. Trovagene does not undertake an obligation to update or revise any forward-looking statement. Investors should read the risk factors set forth in Trovagene’s Form 10-K for the year ended December 31, 2015 and its other periodic reports filed with the Securities and Exchange Commission.
Trovagene Contacts
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Beth Anderson
VP, Finance & Administration
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Vicki Kelemen
Sr. Director, Marketing Communications
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858-952-7593
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858-952-7652
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ir@trovagene.com
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vkelemen@trovagene.com
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