REVOLVING CREDIT AND SECURITY AGREEMENT
THIS
REVOLVING CREDIT AND SECURITY AGREEMENT (this “Agreement”) dated as
of September 14, 2010 (this “Agreement”) is by and
between SYNTHEMED, INC., a Delaware corporation (the “Borrower”), and
PATHFINDER, LLC, a Massachusetts limited liability company (the “Lender”).
WHEREAS,
the Borrower may, from time to time request Revolving Loans from the Lender, and
the parties wish to provide for the terms and conditions upon which such
Revolving Loans shall be made;
NOW
THEREFORE, in consideration of any Revolving Loan hereafter made to the Borrower
by the Lender, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged by the Borrower, the parties hereto
agree as follows:
ARTICLE
1
DEFINITIONS
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1.1
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Defined
Terms. As used in this Agreement, the following terms have
the meanings specified below:
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“Account”, “Account
Debtor”, “Chattel
Paper”, “Commercial
Tort Claims”,
“Deposit
Accounts”, “Documents”, “Electronic
Chattel Paper”,
“Equipment”, “General
Intangibles”,
“Instruments”,
“Inventory”,
“Investment
Property”, “Letter-of-Credit
Rights”, “Proceeds”, “Supporting
Obligations” and “Tangible
Chattel Paper” shall have the respective meanings assigned to such terms
in the UCC.
“Borrower”
has the meaning set forth in the first paragraph of this Agreement.
“Borrowing”
means a Revolving Loan made by the Lender on a single date under this
Agreement.
“Business
Day” means any
day that is not a Saturday, Sunday or other day on which commercial banks in New
York City, New York are authorized or required by law to remain
closed.
“Change of
Control” means
the occurrence of any of the following in one or a series of related
transactions: (i) an acquisition after the date hereof by an individual or legal
entity or “group” (as described in Rule 13d-5(b)(1) under the Exchange Act) of
more than one-half of the voting rights or equity interests in the Borrower;
(ii) a merger or consolidation of the Borrower or any Subsidiary or a sale or
distribution of substantially all of the assets of the Borrower in one or a
series of related transactions, unless following such transaction or series of
transactions, the holders of the Borrower's securities prior to the first such
transaction continue to hold at least two-thirds of the voting rights and equity
interests in the surviving entity or acquirer of such assets; or (iii) a
recapitalization, reorganization or other transaction involving the Borrower or
any Subsidiary that constitutes or results in a transfer of more than one-half
of the voting rights or equity interests in the Borrower, unless following such
transaction or series of transactions, the holders of the Borrower's securities
prior to the first such transaction continue to hold at least two-thirds of the
voting rights and equity interests in the surviving entity.
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“Closing
Date” means the date set forth in Section
6.1.
“Collateral” has the meaning assigned to
such term in Section
3.1.
“Common
Stock” means the common stock of the Borrower, par value $.001 per share,
or any other securities into which such common stock may hereafter be
reclassified.
“Default”
means any event or condition which constitutes an Event of Default or which upon
notice, lapse of time or both would, or could reasonably be expected to, unless
cured or waived, become an Event of Default.
“Event of
Default” has the meaning assigned to such term in Section
8.1.
“Exchange
Act” means the Securities Exchange Act of 1934, as amended.
“GAAP”
means United States Generally Accepted Accounting Principles.
“Lender”
has the meaning set forth in the first paragraph of this Agreement.
“Material
Adverse Effect” means any of (i) a material and adverse effect on the
legality, validity or enforceability of this Agreement or (ii) a material and
adverse effect on the results of operations, assets, properties, prospects,
business or condition (financial or otherwise) of the Borrower and its
Subsidiaries, taken as a whole.
“Obligations”
means any and all obligations and liabilities of the Borrower now or hereafter
arising under this Agreement and all of the other Transaction Documents, whether
for principal, interest, fees, expenses, indemnities or otherwise, and whether
primary, secondary, direct, indirect, contingent, fixed or otherwise (including
obligations of performance).
“Patents
and Trademarks”
has the meaning assigned to such term in Section 4.10.
“Person” shall mean any individual,
sole proprietorship, partnership, joint venture, trust, unincorporated
organization, association, corporation, limited liability company, institution,
entity, party, or foreign or United States government (whether federal, state,
county, city, municipal or otherwise), including, without limitation, any
instrumentality, division, agency, body or department thereof.
“Regulatory
Permits” and “Regulatory
Applications”
have the meanings assigned to such terms in Section
4.9.
“Revolving
Credit Commitment” has the meaning set forth in Section
2.1.
“Revolving
Credit Note(s)” means the promissory notes, substantially in the form
of Exhibit A
annexed hereto, issued by the Borrower in favor of the Lender pursuant to Section
2.1(f).
“Revolving
Credit Period” means the period from and including the Closing Date to
the earlier of (a) December 31, 2010 or (b) such earlier date as the Lender
shall determine, in its sole and absolute discretion, upon at least five
(5) Business Days’
prior written notice to the Borrower.
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“Revolving
Loan” means a loan made by the Lender pursuant to Section
2.1.
“SEC”
means the United States Securities and Exchange Commission.
“Securities
Act” means the Securities Act of 1933, as amended.
“Subsidiary”
means any “subsidiary” of the Borrower as defined in Rule 1-02(x) of Regulation
S-X promulgated by the SEC under the Exchange Act.
“Transaction
Documents” means this Agreement, the Revolving Credit Notes, the
intellectual property security agreement referred to in Section 7.3, and all
other agreements, instruments and documents executed in connection therewith, in
each case as the same may at any time be amended, supplemented, restated or
otherwise modified and in effect.
“UCC”
means the Uniform Commercial Code as the same may be in effect on the date
hereof and from time to time in the State of New York; provided, that if by
reason of mandatory provisions of law, the perfection or the effect of
perfection or non-perfection of the security interests in any Collateral or the
availability of any remedy hereunder is governed by the Uniform Commercial Code
as in effect on or after the date hereof in any other jurisdiction, “UCC” means
the Uniform Commercial Code as in effect in such other jurisdiction for the
purposes of the provisions hereof relating to such perfection or effect of
perfection or non-perfection or availability of such remedy.
ARTICLE
2
THE REVOLVING CREDIT
FACILITY
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2.1
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Revolving
Loans.
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(a) Revolving Credit
Commitment. Subject to and upon the terms and conditions set forth
herein, Lender, at the request of the Borrower, agrees to lend to the Borrower,
from time to time during the Revolving Credit Period, such Revolving Loans as
may be requested by the Borrower (i) in an amount equal to wages and payroll
taxes for Borrower’s employees for each pay period or portion thereof during
which Lender’s funding commitment hereunder is in effect and (ii) such
additional amounts as the Lender, in its absolute and sole discretion, shall
approve (the “Revolving Credit
Commitment”). Within the foregoing limits and subject to the terms
and conditions set forth herein, the Borrower may borrow, repay and reborrow the
Revolving Loans.
(b) Funding of Revolving
Loans. The Revolving Loans shall be disbursed, as the Borrower
shall direct, upon the satisfaction of the conditions set forth in Sections 6.1 and 6.2 hereof. The
Borrower shall deliver to the Lender a written request for a Revolving Loan not
later than five Business Days prior to the proposed funding date thereof;
provided, however, that the initial funding hereunder shall occur in the amount
of $55,776 within one Business Day of the date hereof. After the initial
funding, each such written request required under this Section 2.1(b) shall
specify the requested amount of the proposed Borrowing, a description of the use
of proceeds and the proposed borrowing date.
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(c) Interest on Revolving
Loans. Each Revolving Loan shall bear interest at the annual rate
of 6%. Accrued interest on each Revolving Loan shall be payable in arrears on
the date on which the applicable principal amount becomes due and payable as set
forth under Section
2.1(d) below. All interest shall be computed on the basis of a year
of 360 days and shall be payable for the actual number of days elapsed
(including the first day but excluding the last day). Upon and after
the occurrence of an Event of Default, each Revolving Loan shall bear interest
on its principal amount outstanding from time to time at a rate per annum of 10%
(the "Default
Rate"). In no contingency or event whatsoever shall interest
charged hereunder or under any Revolving Credit Note, however such interest may
be characterized or computed, exceed the highest rate permissible under any law
which a court of competent jurisdiction shall, in a final determination, deem
applicable hereto. In the event that such a court determines that the
Lender has received interest hereunder in excess of the highest rate applicable
hereto, the Lender shall promptly refund such excess interest to the
Borrower.
(d) Repayment of Revolving
Loans. The outstanding principal amount of each Revolving Loan
and all accrued and unpaid interest thereon shall become due and payable on
demand on the earlier to occur of (i) the first anniversary of each Revolving
Loan and (ii) the occurrence of a Change of Control, in either case if not
sooner paid in full as provided in this Agreement or in the Revolving Credit
Note applicable thereto. Any and all such payments hereunder and under any
Revolving Credit Note (including, without limitation, any prepayments pursuant
to Section
2.3) shall be made to the Lender at such place as the Lender directs the
Borrower in writing. Any and all payments hereunder and under any
Revolving Credit Note (including, without limitation, any prepayments pursuant
to Section 2.3)
shall be applied first to accrued and unpaid interest and the remainder to
principal unless the Borrower otherwise directs in writing at the time of such
payment.
(e) Loan Accounts.
Lender shall maintain an account evidencing the indebtedness of the
Borrower to Lender resulting from each Revolving Loan made by Lender, including
the amounts of principal and interest payable and paid to Lender from time to
time hereunder. Lender shall maintain accounts in which it shall record
the amount of each Revolving Loan made hereunder, the amount of any principal or
interest due and payable or to become due and payable from the Borrower to
Lender hereunder and the amount of any sum received by the Lender hereunder.
All such accounts maintained by Lender pursuant to this Section 2.1(e) shall
be conclusive absent manifest error of the amount of the Revolving Loans made by
the Lender to the Borrower and the interest and payments thereon. Any
failure to so record or any error in doing so shall not limit or otherwise
affect the obligation of the Borrower hereunder to pay any amount owing with
respect to the Obligations.
(f) Revolving Credit
Note. On the date of each Revolving Loan, the Borrower shall
execute and deliver to Lender a Revolving Credit Note, substantially in the form
attached hereto as Exhibit A, in the
aggregate principal amount of such Revolving Loan.
2.2 Funding of
Borrowings.
Lender
shall make each Revolving Loan to be made by it hereunder on the proposed
funding date thereof by wire transfer of immediately available funds to the
account of Borrower most recently designated by it for such purpose by notice to
the Lender in accordance with Section 2.1(b).
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2.3
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Prepayment of
Revolving Loans.
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The
Borrower shall have the right at any time and from time to time to prepay any
Revolving Loan in whole or in part.
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ARTICLE
3
SECURITY
INTEREST
3.1. Grant of
Security Interest.
As security for the payment of all Revolving Loans now or in the
future made by the Lender hereunder and for the payment or other satisfaction of
all other Obligations, the Borrower hereby assigns to Lender and grants to the
Lender a continued security interest in the following property, whether now
owned, existing, acquired or arising and wherever now or hereafter located
(collectively, the “Collateral”):
(a) all
Accounts and cash;
(b) all
Chattel Paper (including, without limitation, all Electronic Chattel Paper and
all Tangible Chattel Paper), Equipment, Instruments, Documents and General
Intangibles (including, without limitation, all patents, patent applications,
trademarks and trademark applications (including without limitation the Patents
and Trademarks), trade names, trade secrets, goodwill, copyrights, copyright
applications, governmental and regulatory registrations and permits and
approvals, and applications with respect thereto (including without limitation
the Regulatory Permits and the Regulatory Applications), licenses, software,
franchises, customer lists, tax refund claims, claims against carriers and
shippers, guarantee claims, contract rights, payment intangibles, security
interests, security deposits and rights to indemnification);
(c) all
Inventory;
(d) all
Investment Property;
(e) all
Deposit Accounts and all other demand, deposit, time, savings, cash management,
passbook and similar accounts maintained by the Borrower with any Person and all
monies, securities, Instruments and other investments deposited or required to
be deposited in any of the foregoing;
(f) all
Letter-of-Credit Rights (whether or not the respective letter of credit is
evidenced by a writing);
(g) all
Commercial Tort Claims;
(h) all
Supporting Obligations; and
(i) all
additions and accessions to, substitutions for, and replacements, products and
Proceeds of the foregoing property, including, without limitation, proceeds of
all insurance
policies insuring the foregoing property, and all of the Borrower’s books and
records relating to any of the foregoing and to the Borrower’s
business.
Notwithstanding
anything to the contrary contained herein, (i) the term "Collateral" shall
exclude any of the foregoing in which the Borrower is contractually precluded
from granting a security interest and (ii) the Borrower shall be free at any
time prior to an Event of Default to sell any part or all of the Collateral free
and clear of any security interest of the Lender hereunder, provided that the
Lender shall continue to retain a security interest hereunder in the Proceeds
thereof.
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3.2. Preservation
of Collateral and Perfection of Security Interests Therein. The Borrower shall, at
the Lender’s request, at any time and from time to time, authenticate, execute
and deliver to the Lender such financing statements, documents and other
agreements and instruments (and pay the cost of filing or recording the same in
all public offices deemed necessary or advisable by the Lender) and do such
other acts and things or cause third parties to do such other acts and things as
the Lender may deem necessary or desirable in its sole discretion in order to
establish and maintain a valid, attached and perfected security interest in the
Collateral in favor of the Lender to secure payment of the Obligations, and in
order to facilitate the collection of the Collateral. The Borrower
irrevocably hereby makes, constitutes and appoints the Lender (and all persons
designated by the Lender for that purpose) as the Borrower’s true and lawful
attorney and agent-in-fact to execute and file such financing statements,
documents and other agreements and instruments and do such other acts and things
as may be necessary to preserve and perfect the Lender’s security interest in
the Collateral. The Borrower further agrees that a carbon, photographic,
photostatic or other reproduction of this Agreement or of a financing statement
shall be sufficient as a financing statement. The Borrower further
ratifies and confirms the prior filing by the Lender of any and all financing
statements which identify the Borrower as debtor, Lender as secured party and
any or all Collateral as collateral.
ARTICLE
4
REPRESENTATIONS AND
WARRANTIES OF BORROWER
The
Borrower represents and warrants to the Lender that:
4.1 Organization,
Good Standing and Qualification. The Borrower and each
of the Subsidiaries is a corporation duly organized, validly existing and in
good standing under the laws of the State of Delaware and each has all requisite
corporate power and authority to carry on its business as presently conducted or
proposed to be conducted. The Borrower and the Subsidiaries are duly
qualified to transact business and are in good standing in each jurisdiction in
which the failure so to qualify would have a Material Adverse
Effect.
4.2 Authorization.
The Borrower has full power and authority to enter into this Agreement,
all corporate action on the part of the Borrower necessary for the
authorization, execution and delivery of this Agreement and the other
Transaction Documents and the authorization, issuance and delivery of the
Revolving Credit Notes has been taken, and each Transaction Document, when
executed and delivered by the Borrower, and assuming due execution and delivery
by the Lender (as appropriate), shall constitute a valid and legally binding
obligation of the Borrower, enforceable against the Borrower in accordance with
its terms, except as limited by applicable bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyance, or other laws of general
application relating to or affecting the enforcement of creditors’ rights
generally, and as limited by laws relating to the availability of specific
performance, injunctive relief, or other equitable remedies.
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4.3 No
Conflicts. Neither the Borrower nor any Subsidiary is in
default under any agreement to which it is a party, the effect of which will
materially adversely affect performance by the Borrower of its obligations
pursuant to and as contemplated by the terms and provisions of this Agreement or
any of the Transaction Documents. The execution, delivery and performance
of each Transaction Document and any other documents to be executed and
delivered by the Borrower and the consummation by the Borrower of the
transactions contemplated thereby do not and will not (i) conflict with or
violate any provision of the Borrower's or any Subsidiary's certificate or
articles of incorporation, bylaws or other organizational or charter documents,
or (ii) conflict with, or constitute a Default (or an event that with notice or
lapse of time or both would become a Default) under, or give to others any
rights of termination, amendment, acceleration or cancellation (with or without
notice, lapse of time or both) of, any agreement, credit facility, debt or other
instrument (evidencing a Borrower or Subsidiary debt or otherwise) or other
understanding to which the Borrower or any Subsidiary is a party or by which any
property or asset of the Borrower or any Subsidiary is bound or affected, or
(iii) result in a violation of any law, rule, regulation, order, judgment,
injunction, decree or other restriction of any court or governmental authority
to which the Borrower or a Subsidiary is subject (including federal and state
securities laws and regulations), or by which any property or asset of the
Borrower or a Subsidiary is bound or affected; except in the case of each of
clauses (ii) and (iii), such as could not, individually or in the aggregate,
have or reasonably be expected to result in a Material Adverse Effect.
4.4 Filings,
Consents and Approvals. The Borrower is not required to obtain any
consent, waiver, authorization or order of, give any notice to, or make any
filing or registration with, any court or other federal, state, local or other
governmental authority or other Person in connection with the
execution, delivery and performance by the Borrower of the Transaction
Documents, other than (i) filings required by the Exchange Act and (ii) those
that have been made or obtained prior to the date of this
Agreement.
4.5 SEC
Reports; Financial Statements. The Borrower has filed all reports
and statements required to be filed by it under the Securities Act and the
Exchange Act since the beginning of the Borrower’s most recently completed
fiscal year, including pursuant to Section 13(a) or 15(d) thereof (the foregoing
materials being collectively referred to herein as the "SEC
Reports" and, together with the Schedules to this Agreement (if any), the
"Disclosure
Materials"). As of their respective dates, the SEC Reports filed by
the Borrower with the SEC complied in all material respects with the
requirements of the Securities Act and the Exchange Act and the rules and
regulations of the SEC promulgated thereunder, and none of the SEC
Reports filed by the Borrower with the SEC, when filed, contained
any untrue statement of a material fact or omitted to state a material fact
required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading. The financial statements of the Borrower included in the SEC
Reports comply in all material respects with applicable accounting requirements
and the rules and regulations of the SEC with respect thereto as
in effect at the time of filing. Such financial statements have been
prepared in accordance with GAAP applied on a consistent basis during the
periods involved, except as may be otherwise specified in such financial
statements or the notes thereto, and fairly present in all material respects the
financial position of the Borrower and its consolidated Subsidiaries as of and
for the dates thereof and the results of operations and cash flows for the
periods then ended, subject, in the case of unaudited statements, to normal,
immaterial, year-end audit adjustments.
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4.6 Material
Changes. Since the date of the latest audited financial statements
included within the SEC Reports, except as set forth in the SEC Reports, (i) the
Borrower has not altered its method of accounting or the identity of its
auditors and (ii) the Borrower has not declared or made any dividend or
distribution of cash or other property to its stockholders or purchased,
redeemed or made any agreements to purchase or redeem any shares of its capital
stock.
4.7 Litigation.
There is no action, suit or proceeding pending or threatened against the
Borrower or any of the Subsidiaries which (i) adversely affects or challenges
the legality, validity or enforceability of any Transaction Document or (ii)
could, if there were an unfavorable decision, individually or in the aggregate,
have or reasonably be expected to result in a Material Adverse
Effect. There has not been, and to the knowledge of the Borrower,
there is not pending any investigation by the SEC involving the Borrower or any
current or former director or officer of the Borrower (in his or her capacity as
such).
4.8 Compliance.
Neither the Borrower nor any Subsidiary (i) is in default under or in
violation of (and no event has occurred that has not been waived that, with
notice or lapse of time or both, would result in a default by the Borrower or
any Subsidiary under), nor has the Borrower or any Subsidiary received notice of
a claim that it is in default under or that it is in violation of, any
indenture, loan or credit agreement or any other agreement or instrument to
which it is a party or by which it or any of its properties is bound (whether or
not such default or violation has been waived), (ii) is in violation of any
order of any court, arbitrator or governmental body, or (iii) is or has been in
violation of any statute, rule or regulation of any governmental authority,
including without limitation all foreign, federal, state and local laws relating
to taxes, environmental protection, occupational health and safety, product
quality and safety and employment and labor matters, except in each case as
could not, individually or in the aggregate, have or reasonably be expected to
result in a Material Adverse Effect.
4.9 Regulatory
Permits. The Borrower and the Subsidiaries possess all
certificates, authorizations and permits issued by the appropriate federal,
state, local or foreign regulatory authorities (collectively the “Regulatory
Approvals”) and has filed applications for all such additional certificates,
authorizations and permits (the “Regulatory Applications”) with such authorities
necessary to conduct their respective businesses, except where the failure to
possess such permits could not, individually or in the aggregate, have or
reasonably be expected to result in a Material Adverse Effect, and neither the
Borrower nor any Subsidiary has received any notice of proceedings relating to
the revocation or modification of any such permits. Schedule 4.9 attached hereto
contains a complete and accurate list of the Regulatory Permits and the
Regulatory Approvals.
4.10 Patents
and Trademarks. The Borrower and the Subsidiaries have, or have
rights to use, all patents, patent applications, trademarks, trademark
applications and service marks and service xxxx applications, trade names, and
brand names (collectively the “Patents and Trademarks”) copyrights, licenses and
other similar rights that are necessary or material for use in connection with
their respective businesses as described in the SEC Reports and which the
failure to so have could, individually or in the aggregate, have or reasonably
be expected to result in a Material Adverse Effect (collectively, the "Intellectual
Property Rights"). Neither the Borrower nor any Subsidiary has
received a written notice that the Intellectual Property Rights used by the
Borrower or any Subsidiary violates or infringes upon the rights of any Person.
To the knowledge of the Borrower, all such Intellectual Property Rights
are enforceable and there is no existing infringement by another Person of any
of the Intellectual Property Rights. Neither the Borrower nor any
Subsidiary is in default under or in relation to any license, sublicense,
covenant or agreement with respect to the Intellectual Property
Rights. Schedule 4.10 attached hereto
contains a complete and accurate list of the Patents and
Trademarks.
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4.11 Insurance.
The Borrower and the Subsidiaries are insured by insurers of recognized
financial responsibility against such losses and risks and in such amounts as
are prudent and customary in the businesses in which the Borrower and the
Subsidiaries are engaged. The Borrower has no reason to believe that,
other than as a result of its financial condition, it will not be able to renew
its and the Subsidiaries’ existing insurance coverage as and when such coverage
expires or to obtain similar coverage from similar insurers as may be necessary
to continue its business on terms consistent with market for the Borrower’s and
such Subsidiaries’ respective lines of business.
4.12 Investment
Company Act. The Borrower is not, and is not an affiliate of, and
immediately following the Closing will not have become, an “investment company”
within the meaning of the Investment Company Act of 1940, as
amended.
4.13 Certain
Fees. No brokerage or finder’s fees or commissions are or will be
payable by the Borrower to any broker, financial advisor or consultant, finder,
placement agent, investment banker, bank or other Person with respect to the
transactions contemplated by this Agreement. The Lender shall have no
obligation with respect to any fees or with respect to any claims (other than
such fees or commissions owed by the Lender pursuant to written agreements
executed by the Lender, which fees or commissions shall be the sole
responsibility of the Lender) made by or on behalf of other Persons for fees of
a type contemplated in this Section that may be due in connection with the
transactions contemplated by this Agreement.
4.14 Taxes.
The Borrower has filed all state and federal income tax returns that are
required to be filed, and has paid all taxes shown to be due on such returns and
such assessments received by the Borrower to the extent that the same had become
due.
4.15 Representations
and Warranties to be Continuing. All of the foregoing
representations and warranties will be true at the date of the initial
disbursement and at the dates of all subsequent disbursements of the Revolving
Loans. All representations, warranties, covenants, and agreements made
herein or in any certificate or other document delivered to the Lender by or on
behalf of the Borrower shall be deemed to have been relied upon by the Lender
notwithstanding any investigation heretofore or hereafter made by the Lender or
on its behalf, and shall survive the making of any or all of the disbursements
contemplated hereby and shall continue in full force and effect as long as there
remains unpaid any obligation to the Lender hereunder or under any of the
Transaction Documents.
ARTICLE
5
REPRESENTATIONS AND
WARRANTIES OF THE LENDER
The
Lender hereby represents and warrants to the Borrower that:
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5.1 Authorization. The Lender has full
power and authority to enter into this Agreement. This Agreement, when
executed and delivered by the Lender, will constitute a valid and legally
binding obligation of the Lender, enforceable in accordance with its terms,
except as limited by applicable bankruptcy, insolvency, reorganization,
moratorium, fraudulent conveyance, and any other laws of general application
affecting enforcement of creditors’ rights generally, and as limited by laws
relating to the availability of a specific performance, injunctive relief, or
other equitable remedies.
5.2 Disclosure
of Information.
The Lender has had an opportunity to discuss the Borrower’s business,
management, financial affairs and the terms and conditions of the offering of
the Revolving Credit Notes with the Borrower’s management and have had an
opportunity to review the Borrower’s facilities and has had all questions
related thereto answered to the full satisfaction of the Lender. The
Lender understands that such discussions and any written information delivered
by the Borrower to the Lender were intended to describe the aspects of the
Borrower’s business which the Lender believe to be material. The Lender
understands that no Person other than the Borrower has been authorized to make
any representation and if made, such representation may not be relied on.
The Borrower has not, however, rendered any investment advice to the
Lender with respect to the suitability of the purchase of any of the Revolving
Credit Notes or an investment in the Borrower.
5.3 Brokers. No finder or broker
was or is engaged by the Lender in connection with this Agreement.
ARTICLE
6
CONDITIONS
6.1 Closing
Date. The Closing Date shall be the date on which each of the
following conditions is satisfied or waived:
(a) Revolving Credit
Note. The Lender shall have received the duly completed and
executed Revolving Credit Note in the amount of the initial
Borrowing.
(b) Authorization
Documents. The Lender shall have received a certificate of the
Borrower’s Secretary certifying and attaching resolutions of its board of
directors (or similar governing body) approving and authorizing the Borrower’s
execution, delivery and performance of the Transaction Documents and the
transactions contemplated thereby.
(c) UCC Financing
Statements. The Lender shall have received each document (including
Uniform Commercial Code financing statements) required hereunder or under law or
deemed necessary by the Lender filed, registered or recorded in order to create
in favor of the Lender, a perfected lien on the Collateral, including without
limitation the Financing Statement attached hereto as Exhibit B for filing with the
Delaware Secretary of State.
(d) Necessary Governmental
Permits, Licenses and Authorizations and Consents; Etc. The
Borrower shall have obtained all permits, licenses, authorizations and consents
necessary or advisable in connection with the transactions contemplated by this
Agreement and each of the foregoing shall be in full force and effect, in each
case other than those the failure to obtain or maintain which, either
individually or in the aggregate, would not reasonably be expected to have a
Material Adverse Effect.
6.2 Each
Borrowing.
The obligation of Lender to make a Revolving Loan on the occasion
of any Borrowing, is subject to the satisfaction of the following
conditions:
10
(a) Representations and
Warranties; Covenants. (i) The representations and warranties of
the Borrower set forth in Article 5 of this
Agreement shall be true and correct in all material respects on and as of the
date of such Borrowing (or, if any such representation or warranty is expressly
stated to have been made as of a specific date, such representation or warranty
shall be or have been true and correct as of such specific date); and (ii) the
Borrower shall be in compliance with each of the covenants set forth in Article 7 of this
Agreement.
(b) No Defaults. At
the time of, and immediately after giving effect to, such Borrowing, no Default
shall have occurred and be continuing.
(c) No Material Adverse
Effect. At the time of, and immediately after giving effect to,
such Borrowing, there shall be no facts, events or circumstances then existing
and nothing shall have occurred which shall have come to the attention of the
Lender which constitutes a Material Adverse Effect.
(d) Security
Requirements. Other than with respect to the initial Borrowing
hereunder, the Borrower shall have satisfied (or the Lender, in its sole
discretion, has waived), each of the requirements set forth in Section 7.3
hereto.
(e) Revolving Credit
Note. The Lender shall have received a duly completed and executed
Revolving Credit Note with respect to the requested Revolving Loan in the amount
of the requested Borrowing, in form and substance satisfactory to the
Lender.
(f) Other Documents.
The Lender shall have received such other documents as the Lender may
reasonably request.
(g) Officer's
Certificate. The Lender shall have received, duly executed by an
authorized officer of the Company, a certificate certifying that all covenants,
agreements and obligations required by Section 6.2 of this
Agreement to be performed or complied with by the Company prior to or at a
Borrowing, have been performed or complied with.
ARTICLE
7
COVENANTS
The
Borrower covenants and agrees with the Lender that so long as the Revolving
Credit Note shall be outstanding:
7.1 Books and
Records, Inspection Rights. The Borrower shall
keep proper books of records and accounts in which entries are made of all
dealings and transactions in relation to its business and activities which
fairly record such transactions and activities. The Borrower shall permit
any representatives designated by the Lender to visit and inspect its
properties, to examine and make extracts from its books and records, and to
discuss its affairs, finances and condition with its officers and independent
accountants as frequently as the Lender deems appropriate; provided that all
such visits shall be on reasonable prior notice, at reasonable times during
regular business hours of the Borrower.
7.2 Use of
Proceeds.
The proceeds of the Revolving Loans will be used only for working
capital and other general corporate purposes. Borrower shall not use the
proceeds of the Revolving Loans to pay any individual expenditure in excess of
$500 other than employee wages and payroll taxes without the prior written
authorization of Lender (which authorization may be in the form of electronic
transmission).
11
7.3 Intellectual
Property Security Matters. The Borrower shall provide to the
Lender, in form and substance satisfactory to the Lender, a duly executed
original of a security agreement relating to Borrower’s rights in and
to all Patents and Trademarks, together with all instruments,
documents and agreements executed pursuant thereto, and the Lender shall have
received any and all documents required hereunder or under law or deemed
necessary by the Lender to be filed, registered or recorded in order to create
in favor of the Lender, a perfected lien on the Patents and
Trademarks.
ARTICLE
8
EVENTS OF
DEFAULT
8.1. Events of
Default.
The occurrence of any of the following events shall be deemed to
constitute an “Event of Default” hereunder:
(a) the
Borrower shall fail to pay to the Lender, on the date on which such payment is
due, any principal of or interest on any Revolving Loan or any Revolving Credit
Note, or the Borrower shall fail to pay, within ten (10) days after the date on
which payment thereof is due, any other sum due and payable under this Agreement
or any Transaction Document;
(b) the
Borrower shall fail to keep or perform any agreement, undertaking, obligation,
covenant or condition set forth in any Transaction Document, which failure, if
curable, is not cured within ten (10) days of written notice from the Lender to
the Borrower;
(c) (i)
any representation, warranty or certification made by or on behalf of the
Borrower in connection with or pursuant to this Agreement shall prove to have
been incorrect in any material respect when made or given; or (ii) any
representation, warranty or certification made by or on behalf of the Borrower
in connection with or pursuant to this Agreement, although true in all respects
when such representation, warranty or certification was made or given, proves to
be untrue in any material respect at any subsequent time when such
representation, warranty or certification is operative or applicable and such
representation, warranty or certification continues to be untrue ten (10) days
after written notice from the Lender to the Borrower;
(d) an
involuntary proceeding shall be commenced or an involuntary petition shall be
filed seeking (i) liquidation, reorganization or other relief in respect of the
Borrower or its debts, or of a substantial part of its assets, under any
Federal, state or foreign bankruptcy, insolvency, receivership or similar law
now or hereafter in effect or (ii) the appointment of a receiver, trustee,
custodian, sequestrator, conservator or similar official for the Borrower or for
a substantial part of its assets, and, in any such case, such proceeding or
petition shall continue undismissed for 60 days or an order or decree approving
or ordering any of the foregoing shall be entered; or
12
(e) the
Borrower shall (i) voluntarily commence any proceeding or file any petition
seeking liquidation, reorganization or other relief under any Federal, state or
foreign bankruptcy, insolvency, receivership or similar law now or hereafter in
effect, (ii) consent to the institution of, or fail to contest in a timely and
appropriate manner, any proceeding or petition described in clause (d) of this
Section 8.1,
(iii) apply for or consent to the appointment of a receiver, trustee, custodian,
sequestrator, conservator or similar official for the Borrower or for a
substantial part of its assets, (iv) file an answer admitting the material
allegations of a petition filed against it in any such proceeding, or (v) make a
general assignment for the benefit of creditors.
8.2. Remedies.
After the occurrence of any Event of Default, the Lender shall have the
right in addition to all of the remedies conferred upon the Lender by law or
equity or the terms of any the Transaction Documents, to do any or all of the
following, concurrently or successively
(a) declare
the Revolving Credit Notes to be, and the Revolving Credit Notes shall thereupon
become, immediately due and payable, provided that if an Event of Default
described in Section
8.1(d) or 8.1(e) shall occur or
exist, the Revolving Credit Notes shall automatically become immediately due and
payable, without presentment, demand, protest or notice of any kind, all of
which are hereby expressly waived, anything contained herein or in the
Transaction Documents to the contrary notwithstanding;
(b) terminate
the Lender’s obligations under this Agreement to extend credit of any kind or to
make any disbursement, whereupon the commitment and obligations of the Lender to
extend credit or to make disbursements hereunder shall terminate;
and
(c) exercise
all rights and remedies of a secured party under the UCC and otherwise,
including, without limitation, the right to foreclose the security interest
granted herein by any available judicial or other procedure and/or to take
possession of any or all of the Collateral and the books and records relating
thereto with or without judicial process, for which purpose the Lender may enter
on any or all of the premises where any of the Collateral or books or records
may be situated and take possession and remove the same therefrom; proceed to
protect and enforce its rights or remedies either by suit in equity or by action
at law, or both; require the Borrower to assemble any or all of the Collateral
and any or all certificates of title and other documents relating to the
Collateral at a place designated by the Lender; and exercise in the Borrower's
name all rights with respect to the Collateral, including the right to collect
any and all money due or to become due, endorse checks, notes, drafts,
instruments, or other evidences of payment, receive and open mail addressed to
the Borrower, and settle, adjust, or compromise any dispute with respect to any
item of Collateral.
ARTICLE
9
MISCELLANEOUS
9.1
Indemnification
of Lender.
The Borrower will indemnify and hold the Lender and its members,
managers, officers, employees and agents (each, a “Lender Party”)
harmless from any and all losses, liabilities, obligations, claims,
contingencies, damages, costs and expenses, including all judgments, amounts
paid in settlements, court costs and reasonable attorneys’ fees and costs of
investigation (collectively, “Losses”) that any
such Lender Party may suffer or incur as a result of or relating to any
misrepresentation, breach or inaccuracy of any representation, warranty,
covenant or agreement made by the Borrower in this Agreement. In addition
to the indemnity contained herein, the Borrower will reimburse each Lender Party
for its reasonable legal and other expenses (including the cost of any
investigation, preparation and travel in connection therewith) incurred in
connection therewith, as such expenses are incurred. Borrower’s
obligations under this Section shall survive repayment of the Revolving Loans,
cancellation of the Revolving Credit Notes, and termination of this
Agreement.
13
9.2 Further
Assurances. The Borrower agrees that, at any time or from time to
time, upon the written request of the Lender, it will execute and deliver all
such further documents and do all such other acts and things as the Lender may
reasonably request to give effect to this Agreement and the Transaction
Documents. The Borrower agrees that it will, at its own expense make,
execute, endorse, acknowledge, file and/or deliver to the Lender from time to
time such lists, descriptions and designations of its Collateral, warehouse
receipts, receipts in the nature of warehouse receipts, bills of lading,
documents of title, vouchers, invoices, schedules, confirmatory assignments,
conveyances, financing statements, transfer endorsements, powers of attorney,
certificates, reports and other assurances of instruments and take such further
steps relating to the Collateral and other property or rights covered by the
security interest hereby granted, as the Lender requests to perfect, preserve or
protect its security interest in the Collateral.
9.3 Limitation
of Liability.
Notwithstanding anything herein to the contrary, the Borrower
acknowledges and agrees that the liability of Lender arising directly or
indirectly, under this Agreement of any and every nature whatsoever shall be
satisfied solely out of the assets of Lender, and that no affiliate of Lender or
any member or manager thereof shall be personally liable for any liabilities of
Lender.
9.4
Successors
and Assigns.
The terms and conditions of this Agreement shall inure to the benefit of
and be binding upon the respective successors and assigns of the parties.
Nothing in this Agreement, express or implied, is intended to confer upon
any party other than the parties hereto or their respective successors and
assigns any rights, remedies, obligations, or liabilities under or by reason of
this Agreement, except as expressly provided in this Agreement. Borrower may not
assign any rights or obligations under this Agreement without the prior written
consent of the Lender.
9.5 Governing
Law. This
Agreement and the Revolving Credit Notes and all acts and transactions pursuant
hereto and the rights and obligations of the parties hereto shall be governed,
construed and interpreted in accordance with the laws of the State of New York,
without giving effect to principles of conflicts of law. The Borrower consents
to the nonexclusive jurisdiction and venue of the state or federal courts
located in the City of New York. Each party hereto irrevocably waives, to
the fullest extent permitted by applicable law, (a) any objection that it may
now or hereafter have to the laying of venue of any such legal proceeding in the
state or federal courts located in the City of New York and (b) any right it may
have to a trial by jury in any suit, action, proceeding, claim or counterclaim
brought by or on behalf of any party related to or arising out of this Agreement
or any Transaction Document, the transactions contemplated hereby, or the
performance of services hereunder.
9.6 Counterparts. This Agreement may be
executed in any number of counterparts, each of which shall be deemed an
original and all of which together shall constitute one instrument.
9.7 Titles
and Subtitles.
The titles and subtitles used in this Agreement are used for convenience
only and are not to be considered in construing or interpreting this
Agreement.
14
9.8 Notices. All notices and other
communications under this Agreement shall be in writing and shall be deemed
given (i) when delivered personally by hand (with written confirmation of
receipt), (ii) when sent by facsimile (with written confirmation of
transmission) or (iii) one Business Day following the day sent by overnight
courier (with written confirmation of receipt), in each case at the following
addresses and facsimile numbers (or such other address or facsimile number as a
party may have specified by notice given to other party pursuant to this
provision):
If to
Borrower:
000
Xxxxxxxxx Xxxxxxxx, Xxxxx 000
Xxxxxx,
Xxx Xxxxxx 00000
Facsimile:(000)
000-0000
Attention:
Xxxxxx Xxxxxx, CEO
With a
copy to:
Xxxxxxxxx
& Xxxxxx, LLP
00 Xxxx
00xx
Xxxxxx, 00xx
Xxxxx
Xxx Xxxx,
Xxx Xxxx 00000
Facsimile:
(000) 000-0000
Attention:
Xxxxx Xxxxxxxxx, Esq.
If to the
Lender:
Pathfinder,
LLC
00
Xxx Xxxxxx
Xxxxxxxxx,
XX 00000
Attention:
Xxxxxxx X. Xxxxxxxx, Manager
With a
copy to:
Xxxxxx
& Xxxxxxx, LLP
000
Xxxxxxxx Xxxxxx
Xxxxxx,
XX 00000
Facsimile:
(000) 000-0000
Attention:
Xxxxx X. Xxxxxxxx, Esq.
9.9 Costs and
Expenses.
The Borrower agrees to pay all reasonable out-of-pocket costs and
expenses (including legal costs) incurred by the Lender after an Event of
Default in connection with the collection of the Obligations and enforcement of
this Agreement, the other Transaction Documents or any such other documents.
Borrower’s obligations under this Section shall survive repayment of the
Revolving Loans, cancellation of the Revolving Credit Notes, and termination of
this Agreement.
15
9.10 Entire
Agreement.
This Agreement and the Transaction Documents constitute the entire
agreement between the parties hereto pertaining to the subject matter hereof,
any and all other written or oral agreements relating to the subject matter
hereof existing between the parties hereto are expressly canceled, and may not
be modified or amended in any manner other than by supplemental written
agreement executed by the parties hereto.
[SIGNATURE
PAGE FOLLOWS]
16
IN WITNESS WHEREOF, the
parties have executed this Revolving Credit and Security Agreement on and as of
the day first written above.
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THE BORROWER:
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By:
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/s/
Xxxxxx Xxxxxx
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|
Xxxxxx
Xxxxxx, CEO
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THE LENDER:
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PATHFINDER,
LLC
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By:
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/s/
Xxxxxxx X. Xxxxxxxx
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Xxxxxxx
X. Xxxxxxxx, Manager
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[Signature
Page to Revolving Credit and Security Agreement]
17
EXHIBIT
A
FORM
OF REVOLVING CREDIT NOTE
$_________
[Date]
FOR VALUE
RECEIVED, the undersigned, SyntheMed, Inc., a Delaware corporation (the “Borrower”), promises
to pay to the order of Pathfinder, LLC (the “Lender”), at the
place and times provided in that certain Revolving Credit and Security Agreement
dated as of September 14, 2010 (together with all amendments and other
modifications, if any, from time to time hereafter made thereto, the “Agreement”) between
the Borrower and the Lender, together with interest to maturity (whether by
lapse of time, acceleration or otherwise) on the balance of principal remaining
from time to time outstanding at a rate per annum equal to 6%. Interest
shall be calculated on the basis of a 360-day year and actual days. This
Revolving Credit Note is being executed and delivered by the Borrower pursuant
to Section
2.1(f) of the Agreement. Capitalized terms used herein and not
defined herein shall have the meanings ascribed to them in the
Agreement.
The
outstanding principal amount of this Revolving Credit Note and all accrued and
unpaid interest thereon shall become due and payable on demand on the earlier to
occur of (i) the first anniversary of the original issuance date of this
Revolving Credit Note and (ii) the occurrence of a Change of
Control. If an Event of Default (as defined in the Agreement) shall
occur, the outstanding principal of and accrued and unpaid interest on this
Revolving Credit Note shall become immediately due and payable as provided in
and subject to the terms of the Agreement.
All
payments on account of the indebtedness evidenced by this Revolving Credit Note
shall be applied first to accrued and unpaid interest and the remainder to
principal (except as otherwise provided in the Agreement). Payments on
this Revolving Credit Note shall be made in lawful currency of the United States
of America in immediately available funds to the Lender at such place as the
Lender directs the Borrower in writing.
This
Revolving Credit Note is secured by and as provided in the Agreement and other
documents, agreements, and instruments executed by the Borrower. This
Revolving Credit Note is made and delivered pursuant to the Agreement and is
subject to the further terms and conditions thereof, including the right of the
holder to accelerate payment of the principal of and accrued and unpaid interest
on this Revolving Credit Note and other remedies upon the occurrence of an Event
of Default, all of which are hereby incorporated and made a part of this
Revolving Credit Note by reference.
Upon and
after the occurrence of an Event of Default, interest shall accrue at the
Default Rate.
Any
waiver of any payment due hereunder or the acceptance by the Lender of partial
payments hereunder shall not, at any other time, be taken to be a waiver of the
terms of this Revolving Credit Note or the Agreement or any other agreement
between the Borrower and the Lender.
THIS
REVOLVING CREDIT NOTE SHALL BE GOVERNED, CONSTRUED AND ENFORCED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO THE CONFLICTS OR
CHOICE OF LAW PRINCIPLES THEREOF.
The
Lender and the Borrower hereby waive the right to any jury trial in any action,
proceeding or counterclaim brought by either the Lender or the Borrower against
each other.
The
Borrower hereby waives all requirements as to diligence, presentment, demand of
payment, protest and (except as required by the Agreement) notice of any kind
with respect to this Revolving Credit Note.
In the
event the holder of this Revolving Credit Note shall refer this Revolving Credit
Note for collection, the Borrower agrees to pay, in addition to unpaid principal
and interest, all of the costs and expenses incurred in attempting or effecting
collection, including reasonable attorneys’ fees, whether or not suit is
instituted.
IN
WITNESS WHEREOF, the undersigned Borrower has executed this Revolving Credit
Note as of the day and year first above written.
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By:
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Xxxxxx
Xxxxxx, CEO
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2
[Exhibit
B and Schedules have been omitted.]
