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EXHIBIT *(10.35)
NOTE AND EQUITY PURCHASE AGREEMENT
by and between
IGI, INC., IGEN, INC., IMMUNOGENETICS, INC.
AND BLOOD CELLS, INC.
AND
AMERICAN CAPITAL STRATEGIES, LTD.
OCTOBER 29, 1999
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TABLE OF CONTENTS
ARTICLE 1 DEFINITIONS................................................ 2
1.1 CERTAIN DEFINITIONS............................................ 2
1.2 ACCOUNTING PRINCIPLES.......................................... 12
1.3 OTHER DEFINITIONAL PROVISIONS; CONSTRUCTION.................... 13
ARTICLE 2 ISSUE AND SALE OF SECURITIES............................... 13
2.1 AUTHORIZATION AND ISSUANCE OF THE NOTES........................ 13
2.2 AUTHORIZATION AND ISSUANCE OF THE WARRANTS..................... 14
2.3 SALE AND PURCHASE.............................................. 14
2.4 THE CLOSING.................................................... 14
ARTICLE 3 REPAYMENT OF THE NOTES..................................... 14
3.1 INTEREST RATES AND INTEREST PAYMENTS........................... 14
3.2 REPAYMENT OF THE NOTES......................................... 15
3.3 OPTIONAL PREPAYMENT OF NOTES................................... 15
3.4 NOTICE OF OPTIONAL PREPAYMENT.................................. 15
3.5 MANDATORY PREPAYMENT........................................... 16
3.6 HOME OFFICE PAYMENT............................................ 16
3.7 TAXES.......................................................... 16
3.8 MAXIMUM LAWFUL RATE............................................ 17
3.9 CAPITAL ADEQUACY............................................... 18
ARTICLE 4 CONDITIONS................................................. 18
4.1 CONDITIONS TO PURCHASE OF SECURITIES........................... 18
ARTICLE 5 REPRESENTATIONS AND WARRANTIES OF THE LOAN PARTIES......... 22
5.1 REPRESENTATIONS AND WARRANTIES OF THE LOAN PARTIES............. 22
5.2 ABSOLUTE RELIANCE ON THE REPRESENTATIONS AND WARRANTIES........ 29
ARTICLE 6 TRANSFER OF NOTES.......................................... 29
6.1 RESTRICTED SECURITIES.......................................... 29
6.2 LEGENDS; PURCHASER'S REPRESENTATIONS........................... 30
6.3 TRANSFER OF NOTES.............................................. 30
6.4 REPLACEMENT OF LOST SECURITIES................................. 30
6.5 NO OTHER REPRESENTATIONS AFFECTED.............................. 30
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ARTICLE 7 COVENANTS.................................................. 31
7.1 AFFIRMATIVE COVENANTS.......................................... 31
7.2 NEGATIVE COVENANTS............................................. 36
7.3 FINANCIAL COVENANTS............................................ 41
ARTICLE 8 EVENTS OF DEFAULT.......................................... 42
8.1 EVENTS OF DEFAULT.............................................. 42
8.2 CONSEQUENCES OF EVENT OF DEFAULT............................... 43
8.3 SECURITY....................................................... 44
ARTICLE 9 PUT OPTION................................................. 45
9.1 GRANT OF OPTION................................................ 45
9.2 PUT PRICE...................................................... 45
9.3 EXERCISE OF PUT OPTION......................................... 45
9.4 CERTAIN REMEDIES............................................... 46
9.5 PUT OPTION CLOSING............................................. 46
ARTICLE 10 PREEMPTIVE RIGHTS......................................... 46
10.1 LIMITED PREEMPTIVE RIGHTS...................................... 47
10.2 EXCEPTIONS..................................................... 47
ARTICLE 11 REGISTRATION RIGHTS....................................... 48
11.1 PIGGYBACK REGISTRATIONS........................................ 48
11.2 DEMAND REGISTRATION RIGHTS..................................... 49
11.3 S-3 DEMAND REGISTRATION RIGHTS................................. 50
11.4 HOLDBACK AGREEMENTS............................................ 50
11.5 REGISTRATION PROCEDURES........................................ 51
11.6 REGISTRATION EXPENSES.......................................... 53
11.7 INDEMNIFICATION................................................ 53
11.8 PARTICIPATION IN UNDERWRITTEN REGISTRATIONS.................... 55
ARTICLE 12 MISCELLANEOUS............................................. 55
12.1 SUCCESSORS AND ASSIGNS......................................... 55
12.2 MODIFICATIONS, AMENDMENTS OR WAIVERS........................... 55
12.3 NO IMPLIED WAIVERS; CUMULATIVE REMEDIES; WRITING REQUIRED...... 55
12.4 REIMBURSEMENT OF EXPENSES; TAXES............................... 56
12.5 HOLIDAYS....................................................... 56
12.6 NOTICES........................................................ 56
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12.7 SURVIVAL....................................................... 57
12.8 GOVERNING LAW.................................................. 58
12.9 JURISDICTION, CONSENT TO SERVICE OF PROCESS.................... 58
12.10 JURY TRIAL WAIVER.............................................. 59
12.11 SEVERABILITY................................................... 59
12.12 HEADINGS....................................................... 59
12.13 INDEMNITY...................................................... 60
12.14 ENVIRONMENTAL INDEMNITY........................................ 60
12.15 COUNTERPARTS................................................... 61
12.16 INTEGRATION.................................................... 61
12.17 SUBORDINATION.................................................. 62
ANNEX 1
SCHEDULES 8
EXHIBITS 7
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NOTE AND EQUITY PURCHASE AGREEMENT
$6,650,000 AGGREGATE PRINCIPAL AMOUNT OF
SERIES A SENIOR SUBORDINATED NOTES DUE SEPTEMBER 30, 2006
OF THE LOAN PARTIES
$350,000 AGGREGATE PRINCIPAL AMOUNT OF
SERIES B SUBORDINATED NOTES (THE "GEORGIA NOTES") DUE
SEPTEMBER 30, 2006 OF THE LOAN PARTIES
WARRANTS TO PURCHASE 1,907,543 SHARES
OF IGI COMMON STOCK
THIS NOTE AND EQUITY PURCHASE AGREEMENT (this "Agreement"), dated as of
October 29, 1999, is by and between IGI, INC., a Delaware corporation ("IGI"),
IGEN, INC., a Delaware corporation ("Igen"), IMMUNOGENETICS, INC., a Delaware
corporation ("ImmunoGenetics") and Blood Cells, Inc., a Delaware corporation
("Blood Cells") (IGI, Igen, ImmunoGenetics and Blood Cells are collectively
referred to herein as the "Loan Parties"), and AMERICAN CAPITAL STRATEGIES,
LTD., a Delaware corporation ("ACAS" or "Purchaser"). Capitalized terms used and
not defined elsewhere in this Agreement are defined in Article 1 hereof.
RECITALS
A. The Loan Parties have proposed selling subordinated Notes to provide the
Loan Parties financing in the amount of $7,000,000.
B. Purchaser has agreed to purchase the Notes to provide to the Loan
Parties financing so that the Loan Parties may refinance existing debt in
conjunction with obtaining new senior financing.
C. In order to induce Purchaser to purchase the Notes to be issued pursuant
to this Agreement, IGI has agreed to issue and sell to Purchaser, in connection
with the purchase of such Notes, warrants exercisable for 1,907,543 shares of
Common Stock, subject to the terms and conditions set forth in this Agreement.
NOW, THEREFORE, the parties hereto, in consideration of the premises and
their mutual covenants and agreements herein set forth and intending to be
legally bound hereby, covenant and agree as follows:
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ARTICLE 1
DEFINITIONS
1.1 Certain Definitions. In addition to other words and terms defined
elsewhere in this Agreement, the following words and terms shall have the
meanings set forth below (and such meanings shall be equally applicable to both
the singular and plural form of the terms defined, as the context may require):
"ACAS" shall have the meaning assigned to such term in the preamble hereto.
"ACS CIC" shall mean ACS Capital Investments Corporation, a Delaware
corporation and unconsolidated operating subsidiary of ACAS.
"Affiliate" shall mean with respect to any Person, any other Person which
is directly or indirectly controlling, controlled by or under common control
with such Person or entity or any of its Subsidiaries, and the term "control"
(including the terms "controlled by" and "under common control with") means
having, directly or indirectly, the power to direct or cause the direction of
the management and policies of a Person, whether through ownership of voting
securities or by contract or otherwise. Without limiting the foregoing, the
ownership of ten percent (10%) or more of the voting securities of a Person
shall be deemed to constitute control and notwithstanding anything to the
contrary herein, neither Purchaser nor any of its Affiliates shall be deemed to
be Affiliates of the Loan Parties by virtue of the transactions contemplated in
this Agreement.
"Agreement" shall mean this Note and Equity Purchase Agreement, as the same
may be amended, restated, supplemented or otherwise modified from time to time.
"Appraised Value" shall mean the value of the equity of IGI on a control
premium basis without discount for limitations on voting rights, minority
interests, illiquidity or restrictions on transfer, as determined by an
appraisal performed at IGI's expense by any of (x) Houlihan, Lokey, Xxxxxx &
Xxxxx, (y) Xxxx & Xxxxxx or (z) Willamette Management Associates, or any
successor to such firms, as IGI shall elect; provided that such appraiser shall
be directed to determine fair market value of such securities or property as
soon as practicable, but in no event later than thirty (30) days from the date
of its selection and for such purposes all rights, options and warrants to
subscribe for or purchase, and other securities convertible into or exchangeable
for Common Stock shall be deemed to be exercised, exchanged or converted, and
the underlying shares of Common Stock shall be deemed outstanding.
"Blood Cells" shall have the meaning assigned to such term in the preamble
hereto.
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"Business" shall mean the principal business of the Loan Parties as set
forth in Section 5.1(b) herein and as such shall continue to be conducted
following the purchase and sale of the Notes and Warrants.
"Business Day" shall mean any day other than a Saturday, Sunday or other
day on which banking institutions in Maryland are authorized or required by law
to close.
"Capital Expenditures" shall mean for any period of determination the sum
of capital expenditures and payments under Capitalized Leases of the Loan
Parties for such period determined and consolidated in accordance with GAAP.
"Capitalized Interest" shall have that meaning given such term in Section
3.1 hereof.
"Capitalized Leases" shall mean, with respect to any Person, leases of (or
other agreements conveying the right to use) any property (whether real,
personal or mixed) by such Person as lessee that, in accordance with GAAP (as
defined in Section 1.2 hereof), either would be required to be classified and
accounted for as capital leases on a balance sheet of such Person or otherwise
be disclosed as such in a note to such balance sheet.
"CERCLA" shall mean the Comprehensive Environmental Response, Compensation
and Liability Act (42 U.S.C. Section 9604, et seq.), as amended, and rules,
regulations, standards guidelines and publications issued thereunder.
"Change of Control" shall mean the occurrence of any of the following:
(a) any transaction or series of related transactions resulting in the
sale or issuance of securities or any rights to securities of IGI by IGI
representing in the aggregate more than 50% of the issued and outstanding
Common Stock, or any transaction or series of related transactions
resulting in the sale, transfer, assignment or other conveyance or
disposition of any securities or any rights to securities of IGI by any
holder or holders thereof representing in the aggregate more than 50% of
the issued and outstanding Common Stock and the receipt of any
consideration in connection therewith;
(b) a merger, consolidation, reorganization, recapitalization or share
exchange in which the stockholders of IGI immediately prior to such
transaction receive, in exchange for securities of IGI owned by them, cash,
property or securities of the resulting or surviving entity and as a result
thereof Persons who were holders of Common Stock and Underlying Common
Stock hold less than 50% of the capital stock, calculated on a Fully
Diluted Basis, of the resulting corporation entitled to vote in the
election of directors;
(c) a sale, transfer or other disposition of 30% or more of the assets
of any of the Loan Parties;
(d) any sale or issuance or series of sales or issuances of the Common
Stock or any other voting security (or security convertible into,
exchangeable for,
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or exercisable for any other voting security) of IGI within a 12-month
period which results in a transfer of more than 50% of the issued and
outstanding shares of capital stock of IGI or a transfer of more than 50%
of the voting power of IGI;
(e) a secondary public offer of securities by IGI other than an
offering of securities for an employee benefit plan on SEC Form S-8 or a
successor form;
(f) the Loan Parties' management shall cease to be reasonably
satisfactory to the Purchaser; and
(g) IGI shall cease to own 100% of the capital stock of either Igen or
ImmunoGenetics or 90% of the capital stock of Blood Cells.
"Charter Documents" shall mean the Articles of Incorporation, Certificate
of Incorporation or Charter of the Loan Parties, as applicable, including all
amendments and supplements thereto.
"Closing" shall mean the closing of the purchase and sale of the Securities
pursuant to this Agreement.
"Closing Date" shall mean the date and time for delivery and payment of the
Notes as finally determined pursuant to Section 2.4 hereof.
"Closing Processing Fee" shall mean a fee in an amount equal to $70,000
payable by the Loan Parties to ACS-CIC in consideration of the structuring of
the financing contemplated hereby.
"Code" shall mean the Internal Revenue Code of 1986, as amended.
"Collateral Assignment" shall have the meaning assigned to such term in
Section 4.1(e) hereof.
"Common Stock" shall mean IGI's Common Stock, $0.01 par value.
"Condition" shall mean any condition that results in or otherwise relates
to any Environmental Liabilities.
"Controlled Group" shall mean the "controlled group of corporations" as
that term is defined in Section 1563 of the Internal Revenue Code of 1986, as
amended, of which the Loan Parties are a part from time to time.
"Default" shall mean any event or condition that, but for the giving of
notice or the lapse of time, or both, would constitute an Event of Default.
"EBITDA" shall mean earnings before interest, taxes, depreciation and
amortization.
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"Environmental Laws" shall mean any Laws which address, are related to or
are otherwise concerned with environmental, health or safety issues, including
any Laws relating to any emissions, releases or discharges of Pollutants into
ambient air, surface water, ground water or land, or otherwise relating to the
manufacture, processing, distribution, use, treatment, storage, disposal,
transport, handling, clean-up or control of Pollutants or any exposure or impact
on worker health and safety.
"Environmental Liabilities" shall mean any obligations or liabilities
(including any claims, suits or other assertions of obligations or liabilities)
that are:
(a) related to environmental, health or safety issues (including
on-site or off-site contamination by Pollutants of surface or subsurface
soil or water, and occupational safety and health); and
(b) based upon or related to (i) any provision of past, present or
future United States or foreign Environmental Law (including CERCLA and
RCRA) or common law, or (ii) any judgment, order, writ, decree, permit or
injunction imposed by any court, administrative agency, tribunal or
otherwise.
The term "Environmental Liabilities" includes: (i) fines, penalties, judgments,
awards, settlements, losses, damages (including foreseeable and unforeseeable
consequential damages), costs, fees (including attorneys' and consultants'
fees), expenses and disbursements; (ii) defense and other responses to any
administrative or judicial action (including claims, notice letters, complaints,
and other assertions of liability); and (iii) financial responsibility for (1)
cleanup costs and injunctive relief, including any Removal, Remedial or other
Response actions, and natural resource damages, and (2) any other compliance or
remedial measures.
"EPA" shall mean the United States Environmental Protection Agency and any
governmental body or agency succeeding to the functions thereof.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
the same may from time to time be amended, and the rules and regulations of any
governmental agency or authority, as from time to time in effect, promulgated
thereunder.
"Event of Default" shall mean any of the events of default described in
Section 8.1 hereof.
"Fair Market Value" shall mean the greatest of (i) the Market Price and
(ii) the amount paid for each share of Common Stock as of the date of the sale
of IGI, provided, however, that if the Common Stock does not qualify as a
"margin security" or "margin stock" under Regulations T or U, respectively, of
the Board of Governors of the Federal Reserve System, the Fair Market Value
shall be the Appraised Value.
"Financing Statements" shall have the meaning assigned to such term in
Section 4.1(e) hereof.
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"Fiscal Year" or "fiscal year" shall mean each twelve-month period ending
on December 31 of each year.
"Fixed Charges Coverage Ratio" shall mean the ratio of (i) EBITDA less the
unfinanced portion of Capital Expenditures to (ii) the sum of principal and
interest payments made during the Measurement Period in respect of the
Indebtedness (other than any non-cash charges relating to the issuance of the
Warrants pursuant to this Agreement).
"Fully Diluted Basis" shall mean, at any given time, the number of shares
of Common Stock actually outstanding at such time, plus the number of Stock
Equivalents then outstanding (including Warrants), regardless of their exercise
price or its equivalent.
"GAAP" shall have the meaning assigned to such term in Section 1.2 hereof.
"Georgia Collateral" shall mean the leasehold interest of the Loan Parties
in the premises located at 0000 Xxxxxxx Xxxxxxx, Xxxxxxxxxxx, Xxxxxxx, and the
improvements located thereon.
"Georgia Note" shall have the meaning assigned to such term in Section
2.1(a).
"Governmental Authorities" shall mean any federal, state or municipal court
or other governmental department, commission, board, bureau, agency or
instrumentality, governmental or quasi-governmental, domestic or foreign.
"Guaranty" shall mean any guaranty of the payment or performance of any
Indebtedness or other obligation and any other arrangement whereby credit is
extended to one obligor on the basis of any promise of another Person, whether
that promise is expressed in terms of an obligation to pay the Indebtedness of
such obligor, or to purchase an obligation owed by such obligor, or to purchase
goods and services from such obligor pursuant to a take-or-pay contract, or to
maintain the capital, working capital, solvency or general financial condition
of such obligor, whether or not any such arrangement is reflected on the balance
sheet of such other Person, firm or corporation, or referred to in a footnote
thereto, but shall not include endorsements of items for collection in the
ordinary course of business. For the purpose of all computations made under this
Agreement, the amount of a Guaranty in respect of any obligation shall be deemed
to be equal to the maximum aggregate amount of such obligation or, if the
Guaranty is limited to less than the full amount of such obligation, the maximum
aggregate potential liability under the terms of the Guaranty.
"Holder" shall have the meaning assigned to such term in Section 9.1
hereof.
"IGI" shall have the meaning assigned to such term in the preamble hereto.
"Igen" shall have the meaning assigned to such term in the preamble hereto.
"ImmunoGenetics" shall have the meaning assigned to such term in the
preamble hereto.
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"Indebtedness" shall mean, for any Person at the time of any determination,
without duplication, all obligations, contingent or otherwise, of such Person
which, in accordance with GAAP, should be classified upon the balance sheet of
such Person as indebtedness, but in any event including: (i) all obligations for
borrowed money, (ii) all obligations arising from installment purchases of
property or representing the deferred purchase price of property or services in
respect of which such Person is liable, contingently or otherwise, as obligor or
otherwise (other than trade payables and other current liabilities incurred in
the ordinary course of business on terms customary in the trade), (iii) all
obligations evidenced by notes, bonds, debentures, acceptances or instruments,
or arising out of letters of credit or bankers' acceptances issued for such
Person's account, (iv) all obligations, whether or not assumed, secured by any
Lien or payable out of the proceeds or production from any property or assets
now or hereafter owned or acquired by such Person, (v) all obligations for which
such Person is obligated pursuant to a Guaranty, (vi) the capitalized portion of
lease obligations under Capitalized Leases, (vii) all obligations for which such
Person is obligated pursuant to any Interest Rate Protection Agreements or
derivative agreements or arrangements, and (viii) all obligations of such Person
upon which interest charges are customarily paid or accrued.
"Interest Payment Date" shall have the meaning assigned to such term in
Section 3.1 hereof.
"Interest Rate Protection Agreement" shall mean any interest rate swap,
interest rate cap, interest rate collar or other interest rate hedging agreement
or arrangement.
"Investment" as applied to any Person shall mean the amount paid or agreed
to be paid or loaned, advanced or contributed to other Persons, and in any event
shall include (i) any direct or indirect purchase or other acquisition of any
notes, obligations, instruments, stock, securities or ownership interest
(including partnership interests and joint venture interests) and (ii) any
capital contribution to any other Person.
"IRS" shall mean the Internal Revenue Service and any governmental body or
agency succeeding to the functions thereof.
"Laws" shall mean all U.S. and foreign federal, state or local statutes,
laws, rules, regulations, ordinances, codes, policies, rules of common law, and
the like, now or hereafter in effect, including any judicial or administrative
interpretations thereof, and any judicial or administrative orders, consents,
decrees or judgments.
"Lien" shall mean any security interest, pledge, bailment, mortgage,
hypothecation, deed of trust, conditional sales and title retention agreement
(including any lease in the nature thereof), charge, encumbrance or other
similar arrangement or interest in real or personal property, now owned or
hereafter acquired, whether such interest is based on common law, statute or
contract.
"Life Insurance" shall have the meaning assigned to such term in Section
4.1(j) hereof.
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"Loan Points" shall mean the aggregate loan points equal to $113,750 to be
paid by the Loan Parties to ACAS or its designee in connection with the issuance
of the Notes hereunder.
"Manage" and "Management" shall mean generation, production, handling,
distribution, processing, use, storage, treatment, operation, transportation,
recycling, reuse and/or disposal, as those terms are defined in CERCLA, RCRA and
other Environmental Laws (including as those terms are further defined,
construed, or otherwise used in rules, regulations, standards, guidelines and
publications issued pursuant to, or otherwise in implementation of, such
Environmental Laws).
"Market Price" of any security shall mean the average of the closing prices
of such security's sales on all securities exchanges on which such security may
at the time be listed, or, if there has been no sales on any such exchange on
any day, the average of the highest bid and lowest asked prices on all such
exchanges at the end of each day, or, if on any day such security is not so
listed, the average of the representative bid and asked prices quoted in the
NASDAQ System as of 4:00 P.M., New York time, or, if on any day such security is
not quoted in the NASDAQ System, the average of the highest bid and lowest asked
prices on such day in the domestic over-the-counter market as reported by the
National Quotation Bureau, Incorporated, or any similar successor organization,
in each such case averaged over a period of five (5) days consisting of the day
as of which "Market Price" is being determined and the four (4) consecutive
business days prior to such day. If at any time such security is not listed on
any securities exchange or quoted in the NASDAQ System or the over-the-counter
market, the "Market Price" shall be the fair value thereof determined jointly by
IGI and the Holders of Warrants representing a majority of the shares of Common
Stock obtainable upon exercise of the Warrants. If such parties are unable to
reach agreement within a reasonable period of time, such fair value shall be the
Appraised Value divided by the number of shares of Common Stock outstanding on a
Fully Diluted Basis. For such purposes, a share of Common Stock acquirable upon
exercise or conversion of options or rights to acquire any shares of Common
Stock shall be deemed outstanding only if the applicable conversion price,
exercise price or other acquisition price is equal or less than the Market Price
so determined.
"Material Adverse Effect" shall mean a material adverse effect on
the business, properties, assets, liabilities or condition (financial or
otherwise) of the Loan Parties.
"Maximum Debt to Equity Ratio" shall mean the ratio of total liabilities
(other than any liabilities relating to the issuance of the Warrant pursuant to
this Agreement) to stockholders equity.
"Maximum Leverage Ratio" shall mean the ratio of (x) the sum of Senior Debt
to (y) EBITDA.
"Measurement Date" shall mean the date which marks the end of each calendar
quarter.
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"Measurement Period" shall mean the twelve (12) month period ending on each
Measurement Date.
"Mortgage" shall have the meaning assigned to such term in Section 4.1(f)
hereof.
"Multiemployer Plan" shall mean a multiemployer plan (within the meaning of
Section 3(37) of ERISA) that is maintained for the benefit of the employees of
the Loan Parties or any member of the Controlled Group.
"Notes" shall have the meaning set forth in Section 2.1 hereof.
"PBGC" shall mean the Pension Benefit Guaranty Corporation established
pursuant to Subtitle A of Title IV of ERISA, or any other governmental agency,
department or instrumentality succeeding to the functions thereof.
"Permitted Liens" shall have the meanings assigned to such term Section
7.2(b) hereof.
"Person" shall mean any individual, partnership, limited partnership,
corporation, limited liability company, association, joint stock company, trust,
joint venture, unincorporated organization or governmental entity or department,
agency or political subdivision thereof.
"Plan" shall mean any employee benefit plan (within the meaning of Section
3(3) of ERISA), other than a Multiemployer Plan, established or maintained by
the Loan Parties or any member of the Controlled Group.
"Pledge Agreement" shall mean that certain Pledge and Security Agreement
dated of even date herewith executed by IGI in favor of Purchaser.
"Pollutant" shall include any "hazardous substance" and any "pollutant or
contaminant" as those terms are defined in CERCLA; any "hazardous waste" as that
term is defined in RCRA; and any "hazardous material" as that term is defined in
the Hazardous Materials Transportation Act (49 U.S.C. Section 1801 et seq.), as
amended (including as those terms are further defined, construed, or otherwise
used in rules, regulations, standards, guidelines and publications issued
pursuant to, or otherwise in implementation of, said Environmental Laws); and
including without limitation any petroleum product or byproduct, solvent,
flammable or explosive material, radioactive material, asbestos, polychlorinated
biphenyls (PCBs), dioxins, dibenzofurans, heavy metals, and radon gas; and
including any other substance or material that is reasonably determined to
present a threat, hazard or risk to human health or the environment.
"Prime Rate" shall mean the rate of interest that under current practice is
listed as such under the heading "Money Rates" in the Eastern Edition of the
Wall Street Journal, and if a range of rates is listed, the highest such rate,
and should such practice change, such other indication of the prevailing prime
rate of interest as may reasonably be chosen by Purchaser.
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"Properties and Facilities" shall have the meaning assigned to such term in
Section 5.1(q).
"Proprietary Rights" shall mean all patents, patent applications,
trademarks, trade names, service marks, copyrights, inventions, production
methods, licenses, formulas, know-how and trade secrets.
"Purchase Documents" shall mean this Agreement, the Notes, the Warrants and
the Security Documents and all other agreements, instruments and documents
delivered in connection therewith as any or all of the foregoing may be
supplemented or amended from time to time.
"Purchaser" shall have the meaning assigned to such term in the preamble
hereto and in Section 6.2 hereof.
"Put Option" shall have the meaning assigned to such term in Section 9.1
hereof.
"Put Option Closing" shall have the meaning assigned to such term in
Section 9.5 hereof.
"Put Price" shall have the meaning assigned to such term in Section 9.2
hereof.
"Put Shares" shall have the meaning assigned to such term in Section 9.2
hereof.
"RCRA" shall mean the Resource Conservation and Recovery Act (42 U.S.C.
Section 6901 et seq.), as amended, and all rules, regulations, standards,
guidelines, and publications issued thereunder.
"Registrable Securities" shall mean any shares of Common Stock purchased
upon the exercise of any Warrant, any shares of Common Stock issued in payment
of Capitalized Interest pursuant to Section 3.1 hereof, and any shares of Common
Stock purchased pursuant to Article 10 hereof.
"Removal," "Remedial" and "Response" actions shall include the types of
activities covered by CERCLA, RCRA, and other comparable Environmental Laws, and
whether the activities are those which might be taken by a government entity or
those which a government entity or any other person might seek to require of
waste generators, handlers, distributors, processors, users, storers, treaters,
owners, operators, transporters, recyclers, reusers, disposers, or other persons
under "removal," "remedial," or other "response" actions.
"Reportable Event" shall mean any of the events which are reportable under
Section 4043 of ERISA and the regulations promulgated thereunder, other than an
occurrence for which the thirty (30) day notice contained in 29 C.F.R. Section
2615.3(a) is waived.
"Revolving Financing" shall mean a secured revolving line of credit
facility of the Loan Parties with the Senior Lenders in an aggregate amount not
to exceed $12,000,000.
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"SEC" shall mean the Securities and Exchange Commission and any
governmental body or agency succeeding to the functions thereof.
"Securities" shall have the meaning assigned to such term in Section 2.3
hereof.
"Securities Act" shall mean the Securities Act of 1933, as amended.
"Securities Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended.
"Security Agreement" shall have the meaning assigned to such term in
Section 4.1(e) hereof.
"Security Documents" shall mean the Security Agreement, the Mortgage, the
Collateral Assignment, the Pledge Agreement, the Financing Statements, and all
other documents, instruments and other materials necessary to create or perfect
the security interests created pursuant to the Security Agreement.
"Senior Credit Agreement" shall mean that certain Loan and Security
Agreement by and between the Loan Parties and Fleet Capital Corporation, dated
as of October 29, 1999.
"Senior Debt" shall mean, as of any date of determination, the indebtedness
of the Loan Parties classified as "Long Term Debt" in accordance with GAAP,
including the current portion thereof and including the outstanding balance of
the Revolving Financing. The Subordinated Debt shall not be included in the
Senior Debt.
"Senior Financing" shall mean, collectively, the Revolving Financing and
the Term Financing.
"Senior Lenders" shall mean the banks party to the Senior Credit Agreement.
"Stock Equivalents" shall mean any option, warrant, right or similar
security or claim exercisable into, exchangeable for, or convertible to shares
of Common Stock or the economic equivalent value of shares of Common Stock
(including, by way of illustration, stock appreciation rights).
"Subject Securities" shall mean the Warrants, any shares of Common Stock
purchased upon the exercise of any Warrant, any shares of Common Stock issued in
payment of Capitalized Interest pursuant to Section 3.1 hereof, and any Common
Stock purchased pursuant to Article 10 hereof.
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"Subordinated Debt" shall mean any unsecured Indebtedness of the Loan
Parties (a) no part of the principal of which is stated to be payable or is
required to be paid (whether by way of mandatory sinking fund, mandatory
redemption, mandatory prepayment or otherwise) prior to September 30, 2006, and
the payment of the principal of and interest on which and other obligations of
the Loan Parties in respect thereof are subordinated to the prior payment in
full of the principal of and interest (including post-petition interest) related
to the Senior Financing and all other obligations and liabilities of the Loan
Parties to the Senior Lenders on terms and conditions first approved in writing
by the Senior Lenders and (b) otherwise containing terms, covenants and
conditions satisfactory in form and substance to the Senior Lenders, as
evidenced by their prior written approval thereof.
"Subsidiary" of any corporation shall mean any other corporation or limited
liability company of which the outstanding capital stock possessing a majority
of voting power in the election of directors (otherwise than as the result of a
default) is owned or controlled by such corporation directly or indirectly
through Subsidiaries.
"Term Financing" shall mean a secured term credit facility with the Senior
Lenders with an aggregate principal amount not to exceed $10,000,000, including
Capitalized Leases, on the Closing Date, on terms reasonably acceptable to
Purchaser.
"Transaction Documents" shall have the meaning assigned to such term in
Section 5.1(f) hereof.
"Transactions" shall mean the incurrence of debt and the issuance of equity
in connection therewith, as contemplated by this Agreement, the Notes and all
other agreements contemplated hereby and thereby.
"Underlying Common Stock" shall mean (i) the Common Stock issued or
issuable upon exercise of the Warrants and (ii) any equity securities issued or
issuable with respect to the securities referred to in clause (i) above by way
of stock dividend or stock split or in connection with a combination of shares,
recapitalization, merger, consolidation or other reorganization.
"UST" shall mean an underground storage tank, including as that term is
defined, construed and otherwise used in RCRA and in rules, regulations,
standards, guidelines and publications issued pursuant to RCRA and comparable
state and local laws.
"Warrants" shall have the meaning assigned to such term in Section 2.2
hereof.
"Working Capital" shall mean as of any date the current assets of the Loan
Parties minus the current liabilities of the Loan Parties, but not Indebtedness,
as of such date, all determined in accordance with GAAP.
1.2 Accounting Principles. The character or amount of any asset, liability,
capital account or reserve and of any item of income or expense to be
determined, and any consolidation or other accounting computation to be made,
and the construction of any definition containing a financial term, pursuant to
this Agreement shall be determined or
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made in accordance with generally accepted accounting principles in the
United States of America consistently applied ("GAAP"), unless such principles
are inconsistent with the express requirements of this Agreement.
1.3 Other Definitional Provisions; Construction. Whenever the context so
requires, neuter gender includes the masculine and feminine, the singular number
includes the plural and vice versa. The words "hereof" "herein" and "hereunder"
and words of similar import when used in this Agreement shall refer to this
Agreement as a whole and not in any particular provision of this agreement, and
references to section, article, annex, schedule, exhibit and like references are
references to this Agreement unless otherwise specified. A Default or Event of
Default shall "continue" or be "continuing" until such Default or Event of
Default has been cured or waived by Purchaser. References in this Agreement to
any Persons shall include such Persons, successors and permitted assigns. Other
terms contained in this Agreement (which are not otherwise specifically defined
herein) shall have meanings provided in Article 9 of the Maryland Uniform
Commercial Code on the date hereof to the extent the same are used or defined
therein.
ARTICLE 2
ISSUE AND SALE OF SECURITIES
2.1 Authorization and Issuance of the Notes. The Loan Parties have duly
authorized the issuance and sale to Purchaser of (i) $6,650,000 in aggregate
principal amount of the Loan Parties' Series A Senior Subordinated Notes Due
September 30, 2006 (including any Series A Notes issued in substitution therefor
pursuant to Sections 6.3 and 6.4 hereof, any Series A Notes issued in payment of
any Capitalized Interest pursuant to Section 3.1, and any Series A Notes issued
in exchange for Put Shares pursuant to Section 9.4 or Section 9.5, the "Series A
Notes"), to be substantially in the form of the Series A Note attached hereto as
Exhibit A and (ii) $350,000 in aggregate principal amount of the Loan Parties'
Series B Subordinated Notes Due September 30, 2006 (including any Series B Notes
issued in substitution therefor pursuant to Sections 6.3 and 6.4 hereof, any
Series B Notes issued in payment of any Capitalized Interest pursuant to Section
3.1, and any Series B Notes issued in exchange for Put Shares pursuant to
Section 9.4 or Section 9.5, the "Georgia Notes"), to be substantially in the
form of the Georgia Note attached hereto as Exhibit A-1 ") (the Series A Notes
and the Georgia Notes are referred to herein at the "Notes").
2.2 Authorization and Issuance of the Warrants. IGI has duly authorized the
issuance and sale to Purchaser of stock purchase warrants substantially in the
form of the warrant attached hereto as Exhibit B (collectively, the "Warrants")
evidencing Purchaser's right to acquire 1,907,543 shares of Common Stock.
2.3 Sale and Purchase. Subject to the terms and conditions and in reliance
upon the representations, warranties and agreements set forth herein, the Loan
Parties shall sell to Purchaser, and Purchaser shall purchase from the Loan
Parties, the Notes in the
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aggregate principal amount set forth in Section 2.1 hereof for $7,000,000 in the
aggregate, and IGI shall sell to Purchaser, and Purchaser shall purchase from
IGI the Warrants for $100 in the aggregate. (The Warrants and the Notes are
sometimes referred to herein collectively as the "Securities.")
2.4 The Closing. Delivery of and payment for the Securities (the "Closing")
shall be made at the offices of Xxxxxx & Xxxxxx, 555 Twelfth Street, N.W.,
Washington, D.C., commencing at 10:00 a.m., local time, on October 29, 1999 or
at such place or on such other date on or before October 31, 1999 as may be
mutually agreeable to the Loan Parties and Purchaser. The date and time of the
Closing as finally determined pursuant to this Section 2.4 are referred to
herein as the "Closing Date." Delivery of the Securities shall be made to
Purchaser against payment of the purchase price therefor, less any unpaid Loan
Points, the Closing Processing Fee and any other amounts payable pursuant to
Section 4.1(l) hereof, in federal funds by check or draft payable to or upon the
order of the Loan Parties, or by wire transfer of immediately available funds in
the manner agreed to by the Loan Parties and Purchaser. The Notes shall be
issued in such name or names and in such permitted denomination or denominations
as set forth in Annex A or as Purchaser may request in writing not less than two
(2) Business Days before the Closing Date.
ARTICLE 3
REPAYMENT OF THE NOTES
3.1 Interest Rates and Interest Payments. The Notes will bear interest on
the outstanding principal amount thereof at a fixed rate of fourteen and
one-half percent (14.5%) per annum, 12.5% of which shall be payable in cash by
the Loan Parties on the first Business Day of each month (each such date
referred to as an "Interest Payment Date") and 2.0% of which shall be
capitalized on such Interest Payment Date and added to the principal of the
Notes (such capitalized interest being hereinafter referred to as "Capitalized
Interest"). On the Interest Payment Date occurring in October of each year, the
Loan Parties shall issue to each holder of a Note a note substantially in the
form attached hereto as Exhibit A in the amount of the Capitalized Interest
accrued in respect of such Note; provided that the Loan Parties may, on such
Interest Payment Date, at their election, in lieu of issuing such note, pay such
Capitalized Interest in cash or deliver shares of Common Stock having an
aggregate Market Price equal to such Capitalized Interest; and provided further
that all unpaid Capitalized Interest payable upon the maturity of the Notes,
together with all interest accrued thereon, shall be paid in cash by the Loan
Parties. Interest on the Notes will be computed on the basis of a year of 360
days, composed of twelve 30-day months, and the actual number of days elapsed.
3.2 Repayment of the Notes. The Loan Parties jointly and severally covenant
and agree to repay the unpaid principal balance of the Notes in full, together
with all accrued and unpaid interest (including, without limitation, Capitalized
Interest and interest accrued thereon), fees and other amounts due thereunder,
on September 30, 2006.
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3.3 Optional Prepayment of Notes. Subject to the terms of this Section 3.3,
the Loan Parties may prepay the outstanding principal amount of the Notes in
whole or in part in multiples of $100,000 at any time at a price equal to (1)
the accrued interest, if any, to the date set for prepayment, plus (2) a
prepayment fee representing the amortization of certain of Purchaser's costs
incurred in connection with the purchase of the Notes equal to the principal
amount prepaid multiplied by the following percentage:
If Prepaid During
the 12-Month Period
Ending on September 30
of the Following Years: Percentage
2000 5%
2001 4%
2002 3%
2003 2%
2004 1%
provided, however, that no prepayment fee shall be applied to any prepayment of
the outstanding principal amount of the Notes in connection with any prepayment
attributable to Life Insurance proceeds. Any prepayment must be at least equal
in the aggregate to $100,000 (or such lesser principal amount then outstanding
under all of the Notes). All such prepayments shall be applied to the
outstanding principal in the inverse order of maturity after application of such
prepayment to any accrued interest and prepayment premium payable in connection
therewith.
3.4 Notice of Optional Prepayment. If the Loan Parties shall elect to
prepay any Notes pursuant to Section 3.3 hereof, the Loan Parties shall give
notice of such prepayment to each holder of the Notes to be prepaid not less
than thirty (30) days or more than ninety (90) days prior to the date fixed for
prepayment, specifying (i) the date on which such prepayment is to be made, (ii)
the principal amount of such Notes to be prepaid on such date, and (iii) the
premium, if any, and accrued interest applicable to the prepayment. Such notice
shall be accompanied by a certificate of the Chairman of the Board of Directors,
the President or the Vice President and of the Treasurer of the Loan Parties
that such prepayment is being made in compliance with Section 3.3. Notice of
prepayment having been so given, the aggregate principal amount of the Notes
specified in such notice, together with accrued interest thereon and the
premium, if any, shall become due and payable on the prepayment date set forth
in such notice.
3.5 Mandatory Prepayment.
(a) The Notes shall be prepaid in full, together with all interest, fees
and expenses plus a prepayment premium computed in accordance with Section 3.3,
as if such prepayment were a voluntary prepayment, in the event of a Change of
Control; provided, however, that no prepayment premium shall be payable in
connection with any prepayment of the outstanding principal amount of the Notes
made by reason of clause (e) of the definition of "Change in Control."
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(b) Not later than the third Business Day following the exercise by any
holder of any warrant, option or other security exercisable for or convertible
into Common Stock of such holder's rights thereunder, IGI shall apply 100% of
the cash proceeds received with respect thereto to prepay the Notes. Such
prepayment shall be made without any prepayment premium and shall be applied to
the outstanding principal in inverse order of maturity after application of such
prepayment to any accrued interest and other amounts payable under the Notes.
3.6 Home Office Payment. So long as Purchaser or its successors and assigns
shall be the holder of any Note, and notwithstanding anything contained in this
Agreement or such Note to the contrary, the Loan Parties will pay all sums
becoming due on such Note for principal, premium, if any, and interest by the
method and at the address specified for such purpose below the holder's name in
Annex A, or by such other method or at such other address as the holder shall
have from time to time specified to the Loan Parties in writing for such
purpose, without the presentation or surrender of such Note or the making of any
notation thereon, except that upon written request of the Loan Parties made
concurrently with or reasonably promptly after payment or prepayment in full of
any Note, the holder shall surrender such Note for cancellation, reasonably
promptly after such request, to the Loan Parties at their principal executive
office.
3.7 Taxes. Any and all payments by the Loan Parties hereunder or under the
Notes or other Purchase Documents which are made to or for the benefit of
Purchaser shall be made free and clear of and without deduction for any and all
present or future taxes, levies, imposts, deductions, charges or withholdings
and penalties, interests and all other liabilities with respect thereto
(collectively, "Taxes"), excluding, taxes imposed on Purchaser's net income or
capital and franchise taxes imposed on it by the jurisdiction under the laws of
which it is organized or any political subdivision thereof (all such nonexcluded
Taxes being hereinafter referred to as "Covered Taxes"). If any Loan Party shall
be required by law to deduct any Covered Taxes from or in respect of any sum
payable hereunder or under any Notes or other Purchase Document to or for the
benefit of Purchaser, the sum payable shall be increased as may be necessary so
that after making all required deductions of Covered Taxes (including deductions
of Covered Taxes applicable to additional sums payable under this paragraph),
Purchaser receives an amount equal to the sum it would have received had no such
deductions been made. The Loan Parties shall make such deductions and the Loan
Parties shall pay the full amount so deducted to the relevant taxation authority
or other authority in accordance with applicable law. In addition, the Loan
Parties agrees to pay any present or future stamp, documentary, excise,
privilege, intangible or similar levies that arise at any time or from time to
time from any payment made under any and all Purchase Documents or from the
execution or delivery by the Loan Parties or from the filing or recording or
maintenance of, or otherwise with respect to the exercise by Purchaser of its
rights under any and all Purchase Documents (collectively, "Other Taxes"). The
Loan Parties will indemnify Purchaser for the full amount of Covered Taxes
imposed on or with respect to amounts payable hereunder and Other Taxes, and any
liability (including penalties, interest and expenses) arising therefrom or with
respect thereto. Payment of this indemnification shall be made within thirty
(30) days from the date Purchaser provides the Loan Parties with a certificate
certifying and setting forth in reasonable detail the calculation thereof as
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to the amount and type of such Taxes. Any such certificates submitted by
Purchaser in good faith to the Loan Parties shall, absent manifest error, be
final, conclusive and binding on all parties. The obligation of the Loan Parties
under this Section 3.7 shall survive the payment of the Notes and the
termination of this Agreement. Within thirty (30) days after the Loan Parties
having received a receipt for payment of Covered Taxes and/or Other Taxes, the
Loan Parties shall furnish to Purchaser, the original or certified copy of a
receipt evidencing payment thereof.
3.8 Maximum Lawful Rate. This Agreement, the Notes and the other Purchase
Documents are hereby limited by this Section 3.8. In no event, whether by reason
of acceleration of the maturity of the amounts due hereunder or otherwise, shall
interest and fees contracted for, charged, received, paid or agreed to be paid
to Purchaser exceed the maximum amount permissible under such applicable law.
If, from any circumstance whatsoever, interest and fees would otherwise be
payable to Purchaser in excess of the maximum amount permissible under
applicable law, the interest and fees shall be reduced to the maximum amount
permitted under applicable law. If from any circumstance, Purchaser shall have
received anything of value deemed interest by applicable law in excess of the
maximum lawful amount, an amount equal to any excess of interest shall be
applied to the reduction of the principal amount of the Notes, in such manner as
may be determined by Purchaser, and not to the payment of fees or interest, or
if such excessive interest exceeds the unpaid balance of the principal amount of
the Notes, such excess shall be refunded to the Loan Parties.
3.9 Capital Adequacy. If, after the date hereof, either the introduction of
or any change of the interpretation of any law or the compliance by Purchaser
with any guideline or request from any governmental authority (whether or not
having the force of law) has or would have the effect of reducing the rate of
return on the capital or assets of Purchaser as a consequence of, as determined
by Purchaser in its sole discretion, the existence of Purchaser's obligations
under this Agreement or any other Purchase Documents, then, upon demand by
Purchaser, the Loan Parties immediately shall pay to Purchaser, from the time as
specified by Purchaser, additional amounts sufficient to compensate Purchaser in
light of such circumstances. The obligations of the Loan Parties under this
Section 3.9 shall survive the payments of the Notes and the termination of this
Agreement.
ARTICLE 4
CONDITIONS
4.1 Conditions to Purchase of Securities. The obligation of Purchaser to
purchase and pay for the Securities is subject to the satisfaction, prior to or
at the Closing, of the following conditions:
(a) Representations and Warranties True. The representations and
warranties contained in Article 5 hereof shall be true and correct in all
material respects at and as of the Closing Date as though then made, except
to the extent of
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changes caused by the transactions expressly contemplated herein and except
to the extent that representations and warranties expressly relate to an
earlier date, in which case such representations and warranties shall be as
of such earlier date.
(b) Material Adverse Change. There will have been no material adverse
change in the business or financial condition of the Loan Parties or the
capital markets since August 3, 1999.
(c) Employment Agreements. IGI shall have entered into employment
agreements with Xxxx Xxxxxxx and Xxxxxx XxXxxxxx on terms reasonably
satisfactory to Purchaser, and such employment agreements shall be in full
force and effect as of the Closing Date and shall not have been amended or
modified. The Loan Parties shall have provided Purchaser with copies of all
employment contracts and all other agreements providing compensation in any
form whatsoever, including but not limited to, any benefit plans, between
the Loan Parties and any and all directors, officers or employees of the
Loan Parties.
(d) Working Capital. IGI shall have no less than $10,000,000 of
Working Capital as of the Closing.
(e) Security Agreement; Collateral Assignment. The Loan Parties and
Purchaser shall have entered into (i) a security agreement, with Purchaser
subordinated in lien priority only to the Liens in favor of the Senior
Lender as contemplated therein, in form and substance as set forth in
Exhibit C attached hereto (as the same may be amended, modified or
supplemented from time to time in accordance with the terms thereof, the
"Security Agreement") and (ii) a trademark security agreement and a patent
security agreement, each in form and substance as set forth in Exhibit D
(collectively, as the same may be amended, modified or supplemented from
time to time in accordance with the terms thereof, the "Collateral
Assignment"). The Loan Parties shall have executed and delivered to
Purchaser such financing statements ("Financing Statements") as Purchaser
shall require in order to perfect and maintain the continued perfection of
the security interest created by the Security Agreement. Purchaser shall
have received reports of filings with appropriate government agencies
showing that there are no Liens on the assets of the Loan Parties other
than Permitted Liens.
(f) Mortgage and Title Insurance. The Loan Parties, as applicable,
shall have executed and delivered mortgages and assignments of rents and
leases (as the same may be amended, modified or supplemented and in effect
from time to time in accordance with the terms thereof, the "Mortgages")in
form and substance as set forth in Exhibit E attached hereto encumbering
(i) each of the parcels of real property owned by the Loan Parties and
located in New Jersey and (ii) the Georgia Collateral. Notwithstanding
anything contained herein to the contrary, the Georgia Collateral shall
only secure the payment of the Georgia Notes and the performance of the
obligations of the Loan Parties in connection therewith. The Loan Parties
shall also have delivered to the Purchaser (i) a survey of each parcel of
real estate owned or leased by any of the Loan Parties, together
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with appropriate certifications as may be requested by Purchaser and (ii) a
fully paid title insurance policy issued by a nationally-recognized title
insurance company with such endorsements as Purchaser may request, insuring
the Lien of the Mortgage and showing only those items shown on the
"Permitted Encumbrances Schedule" contemplated by Section 7.2(b)(iv) as
exceptions to title.
(g) Shareholders' Equity. As of the Closing, IGI shall have not less
than $5,300,000 of shareholders' equity as determined in accordance with
GAAP.
(h) Environmental Reports. Purchaser shall have received reports
covering the Loan Parties' properties in form and substance satisfactory to
Purchaser regarding the Loan Parties' compliance with Environmental Laws.
(i) Senior Financing. The Loan Parties and the Senior Lenders shall
have consummated the Senior Financing, including an inter-creditor
agreement between the Senior Lenders and Purchaser, on terms reasonably
satisfactory to Purchaser.
(j) Life Insurance. The Loan Parties shall have delivered to Purchaser
a paid life insurance policy insuring the lives of each of Xxxx Xxxxxxx and
Xxxxxx XxXxxxxx in the amount of $1,000,000, and in each case naming
Purchaser as the beneficiary and issued by a carrier reasonably acceptable
to Purchaser (the "Life Insurance").
(k) Closing Documents. The Loan Parties will have delivered or caused
to be delivered to Purchaser all of the following documents in form and
substance satisfactory to Purchaser:
(i) one or more Notes (as designated by Purchaser pursuant to
Section 2.3 hereof) in aggregate original principal amounts as set
forth herein, duly completed and executed by the Loan Parties;
(ii) one or more Warrants (as designated by Purchaser pursuant to
Section 2.3 hereof) evidencing the right to acquire the number of
shares of IGI Common Stock set forth in Section 2.2 hereof, subject to
adjustment from time to time in accordance with the terms thereof;
(iii) certificates of good standing dated not more than 10 days
prior to the Closing Date for each of the Loan Parties issued by the
State of Delaware and the States of Arkansas, California, Georgia,
Maryland, Mississippi, New Hampshire, New Jersey, Pennsylvania and
Texas;
(iv) a copy of the Charter Documents of each of the Loan Parties,
certified by the appropriate governmental official of the jurisdiction
of its incorporation as of a date not more than 10 days prior to the
Closing Date;
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(v) a copy of the Bylaws of each of the Loan Parties, certified
as of the Closing Date by the secretary or assistant secretary of the
respective Loan Parties;
(vi) a certificate of the secretary or the assistant secretary of
each of the Loan Parties, certifying as to the names and true
signatures of the officers of the respective Loan Party authorized to
sign this Agreement and the other documents to be delivered by the
respective Loan Party hereunder;
(vii) copies of the resolutions duly adopted by the each of the
Loan Parties' board of directors authorizing the execution, delivery
and performance by the respective Loan Party of this Agreement and
each of the other agreements, instruments and documents contemplated
hereby to which the respective Loan Party is a party, and the
consummation of all of the other Transactions, certified as of the
Closing Date by the secretary or assistant secretary of the respective
Loan Party;
(viii) a certificate dated as of the Closing Date from an officer
of each of the Loan Parties stating that the conditions specified in
this Section 4.1 have been fully satisfied or waived by Purchaser;
(ix) certificates of insurance evidencing the existence of all
insurance required to be maintained by the Loan Parties pursuant to
Section 7.1(c), and Purchaser shall be satisfied with the type and
extent of such coverage;
(x) an opinion of Xxxx and Xxxx LLP, counsel to the Loan Parties,
in form and substance satisfactory to Purchaser;
(xi) copies of all material leases to which the Loan Parties are
a party; and
(xii) such other documents relating to the Transactions
contemplated by this Agreement as Purchaser or its special counsel may
reasonably request.
(l) Purchaser's Fees and Expenses.
(i) Loan Points. On the Closing Date, the Loan Parties shall pay
the balance of the Loan Points to Purchaser or it designee (and the
Loan Parties hereby authorize Purchaser to deduct from the aggregate
proceeds from the sale of the Notes by the Loan Parties, the unpaid
amount of such Loan Points);
(ii) Closing Processing Fee: On the Closing Date, the Loan
Parties shall pay the Closing Processing Fee to ACS-CIC (and the Loan
Parties hereby authorize Purchaser to deduct from the aggregate
proceeds
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from the sales of the Notes in the Loan Parties, the unpaid amount of
such Closing Processing Fee); and
(iii) Other Fees and Expenses. On the Closing Date, the Loan
Parties shall have paid the fees and expenses of Purchaser, payable by
the Loan Parties pursuant to Section 12.4 hereof (and the Loan Parties
hereby authorize Purchaser to deduct from the aggregate proceeds of
the sale of the Notes by the Loan Parties, all such amounts).
(m) Legal Investment. On the Closing Date, Purchaser's purchase of the
Securities shall not be prohibited by any applicable law, rule or
regulation of any Governmental Authority (including, without limitation,
Regulations T, U or X of the Board of Governors of the Federal Reserve
System) as a result of the promulgation or enactment thereof or any changes
therein, or change in the interpretation thereof by any Governmental
Authority, subsequent to the date of this Agreement.
(n) Proceedings. All proceedings taken or required to be taken in
connection with the transactions contemplated hereby to be consummated at
or prior to the Closing and all documents incident thereto will be
satisfactory in form and substance to Purchaser and its special counsel.
(o) Waiver. Any condition specified in this Section 4.1 may be waived
by Purchaser; provided that no such waiver will be effective against
Purchaser unless it is set forth in a writing executed by Purchaser.
(p) Due Diligence. Purchaser shall have completed its business, legal
and accounting due diligence review of the Loan Parties and related
matters.
(q) Credit Approval. Purchaser shall have completed its credit
approval process for the transactions contemplated herein.
(r) Background Investigations. Purchaser shall be satisfied with the
results of background investigations of Xxxxxx X. Xxxxx, Xxxx Xxxxxxx and
Xxxx Xxxxxxxxx.
(s) Payoff Letters. The Loan Parties shall have delivered to Purchaser
payoff letters and lien releases from the Loan Parties' existing
institutional lenders.
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF THE LOAN PARTIES
5.1 Representations and Warranties of the Loan Parties. As a material
inducement to Purchaser to enter into this Agreement and purchase the Notes and
the
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Warrants, the Loan Parties jointly and severally hereby represent and warrant to
Purchaser as follows:
(a) Organization and Power. Each of the Loan Parties (i) is a
corporation duly organized, validly existing and in good standing under the
laws of the State of Delaware, (ii) has all requisite corporate power and
authority and all material licenses, permits, approvals and authorizations
necessary to own and operate its properties, to carry on its business as
now conducted and presently proposed to be conducted and to carry out the
Transactions, (iii) has its principal place of business at Wheat Road and
Lincoln Avenue, Buena (Atlantic County), New Jersey 08310, and (iv) is
qualified to do business in the States of Arkansas, California, Georgia,
Maryland, Mississippi, New Hampshire, New Jersey, Pennsylvania and Texas,
which include every jurisdiction where the failure to so qualify might
reasonably be expected to have a Material Adverse Effect. The copies of the
organizational documents of each of the Loan Parties which have been
furnished to Purchaser reflect all amendments made thereto at any time
prior to the date of this Agreement and are correct and complete.
(b) Principal Business. The Loan Parties are diversified companies
primarily engaged in the business of (i) producing and marketing poultry
vaccines and related products, (ii) producing and marketing companion pet
products such as pharmaceuticals, nutritional supplements and grooming
aids, (iii) producing and marketing cosmetics and skin care products, and
(iv) developing commercial applications for micro-encapsulation and
compatible or related technologies.
(c) Financial Statements and Financial Projections.
(i) Financial Statements. Historical Statements. IGI has
delivered to the Purchaser copies of its audited consolidated
year-end financial statements for and as of the end of the two
fiscal years ended December 31, 1998 (the "Annual Statements")
and copies of its financial statements for the seven (7) month
period ending on July 31, 1999 (the "Interim Statements"). The
Annual Statements and the Interim Statements were prepared from
the books and records maintained by IGI's management, are correct
and complete and fairly represent the consolidated financial
condition of IGI as of their dates and the results of operations
for the fiscal periods then ended and have been prepared in
accordance with GAAP consistently applied.
(ii) Financial Projections. IGI has delivered to the
Purchaser financial projections of IGI for the period September
30, 1999, through September 30, 2004, derived from various
assumptions of IGI's management (the "Financial Projections").
The Financial Projections represent a reasonable range of
possible results in light of the history of the business, present
and foreseeable conditions and the intentions of IGI's
management. The Financial Projections accurately reflect the
liabilities of
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IGI upon consummation of the transactions contemplated hereby as
of the Closing Date.
(iii) Accuracy of Financial Statements. IGI does not have
any material liabilities, contingent or otherwise, or forward or
long-term commitments that are not disclosed in the Annual
Statements or in the notes thereto, and except as disclosed
therein there are no unrealized or anticipated losses from any
commitments of IGI which may cause a Material Adverse Effect.
Since August 3, 1999, no Material Adverse Effect has occurred.
(d) Capital Stock and Related Matters. As of the Closing Date and
immediately thereafter, the authorized capital stock of IGI will consist of
(i) 50,000,000 shares of Common Stock of which 9,585,645 shares of Common
Stock are issued and outstanding and of which 1,907,543 shares of Common
Stock have been reserved for issuance upon exercise of the Warrants, and
(ii) 1,000,000 shares of preferred stock of IGI, $0.01 par value, of which
no shares are issued and outstanding. As of the Closing Date, IGI will not
have outstanding any stock or securities convertible or exchangeable for
any shares of its capital stock other than the Warrants and it will not
have outstanding any rights or options to subscribe for or to purchase its
capital stock or any stock or securities convertible into or exchangeable
for its capital stock, other than the Warrants and the warrants, options
and other securities identified on the "Outstanding Options and Warrants
Schedule" attached hereto. As of the Closing Date, IGI will not be subject
to any obligation (contingent or otherwise) to repurchase or otherwise
acquire or retire any shares of its capital stock, except as set forth
herein and the Charter Documents as in effect on the date hereof. As of the
Closing, all of the outstanding shares of IGI's capital stock will be
validly issued, fully paid and nonassessable.
There are no statutory or contractual stockholders' preemptive rights
with respect to the issuance of the Warrants hereunder. IGI has not
violated any applicable federal or state securities laws in connection with
the offer, sale or issuance of any of its capital stock, and the offer,
sale and issuance of the Securities hereunder do not require registration
under the Securities Act or any applicable state securities laws. There are
no agreements among IGI's stockholders with respect to the voting or
transfer of IGI's capital stock other than as contemplated herein.
(e) Subsidiaries. The Loan Parties do not own, or hold any rights to
acquire, any shares of stock or any other security or interest in any other
Person, and the Loan Parties have no Subsidiaries, except in each case as
set forth in the "Subsidiaries Schedule."
(f) Authorization; No Breach. The execution, delivery and performance
by the Loan Parties of this Agreement, the other Purchase Documents and all
other agreements contemplated hereby and thereby to which
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the Loan Parties are a party (collectively, the "Transaction Documents"),
and the consummation by the Loan Parties of the Transactions have been duly
authorized by each of the Loan Parties. The Transaction Documents have been
duly and validly executed and delivered by each of the Loan Parties and
constitute legal, valid and binding obligations of each of the Loan
Parties, enforceable in accordance with their respective terms, except as
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement of
rights of creditors and other parties to contracts generally and by the
effect of general principles of equity, regardless of whether enforcement
is considered in a proceeding in equity or at law.. The execution and
delivery by each of the Loan Parties of the Transaction Documents and the
consummation by each of the Loan Parties of the Transactions do not and
will not (i) conflict with or result in a breach of the terms, conditions
or provisions of, (ii) constitute a default under, (iii) except as created
pursuant to the Security Documents, result in the creation of any Lien upon
any of the Loan Parties' capital stock or assets pursuant to, (iv) give any
third party the right to accelerate any obligation under, (v) result in a
violation of, or (vi) require any authorization, consent, approval,
exemption or other action by or notice to any Governmental Authority
pursuant to, the Charter Documents of any of the Loan Parties, or any law,
statute, rule or regulation to which any of the Loan Parties are subject,
or any agreement, instrument, order, judgment or decree to which any of the
Loan Parties are a party or to which they or their assets are subject.
(g) Governmental Approvals. Except as specifically provided by the
Transaction Documents, no registration with or consent or approval of, or
other action by, any Governmental Authority is or will be required in
connection with the consummation of the Transactions by the Loan Parties.
(h) No Material Adverse Change. Since August 3, 1999, there has been
no event or occurrence that is likely to have a Material Adverse Effect.
(i) Litigation. Except as described in the "Litigation Schedule,"
there are no actions, suits or proceedings at law or in equity or by or
before any arbitrator or any Governmental Authority now pending or, to the
best knowledge of the Loan Parties' management after due inquiry,
threatened against or filed by or affecting any of the Loan Parties or any
of their directors or officers or the businesses, assets or rights of the
Loan Parties. The Loan Parties and their directors or officers shall
promptly provide Purchaser with a copy of all pleadings of all lawsuits
filed against others and, in the case of other actions, a letter stating
the nature of such suits and a copy of all pleadings.
(j) Compliance with Laws. The Loan Parties are not in violation in any
material respect of any applicable Law which is material to the business of
any of the Loan Parties. The Loan Parties are not in default with respect
to any judgment, order, writ, injunction, or decree of any Governmental
Authority specifically naming any of the Loan Parties. The consummation of
the Transactions will not cause any default concerning any judgment, order,
writ,
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injunction or decree of any Governmental Authority specifically naming any
of the Loan Parties, and there is no investigation, enforcement action or
regulatory action pending or, to the best knowledge of the Loan Parties,
threatened against or affecting the Loan Parties by any Governmental
Authority, except as set forth on the "Pending or Threatened Actions
Schedule." Except as set forth in the "Pending or Threatened Actions
Schedule," there is no remedial or other corrective action that the Loan
Parties are required to take to remain in compliance with any judgment,
order, writ, injunction or decree of any Governmental Authority
specifically naming any of the Loan Parties or to maintain any material
permits, approvals or licenses granted by any Governmental Authority in
full force and effect. Except as disclosed on the Management Information
Schedule, during the past ten (10) years, none of the officers, directors
or management of any of the Loan Parties has been arrested or convicted of
any material crime nor has any of them been bankrupt or an officer or
director of a bankrupt company.
(k) Year 2000 Compliance. The Loan Parties have (i) initiated a review
and assessment of all areas within their businesses and operations that
could be materially adversely affected by the risk that computer
applications used by the Loan Parties may be unable properly to recognize
and perform date-sensitive functions involving certain dates prior to and
any date after December 31, 1999 (the "Year 2000 Problem"), (ii) developed
a plan and timetable for addressing the Year 2000 Problem on a timely
basis, and (iii) to date, implemented that plan in accordance with such
timetable. Based on the foregoing, the Loan Parties believe that all
computer applications that are material to their business and operations
are reasonably expected on a timely basis to be able properly to perform
date-sensitive functions for all dates before and after January 1, 2000,
except to the extent that a failure to do so could not reasonably be
expected to have a Material Adverse Effect.
(l) Environmental Protection. Except as specified in "Environmental
Schedule" and after giving effect to the Transactions: (a) the business of
the Loan Parties, the methods and means employed by the Loan Parties in the
operation thereof (including all operations and conditions at or in the
properties of the Loan Parties), and the assets owned, leased, managed,
used, controlled, held or operated by the Loan Parties, comply in all
material respects with all applicable Environmental Laws; (b) with respect
to the Properties and Facilities, and except as disclosed in the
Environmental Schedule, the Loan Parties have obtained, possess, and are in
full compliance with all permits, licenses, reviews, certifications,
approvals, registrations, consents, and any other authorizations required
under any Environmental Laws; (c) the Loan Parties have not received (i)
any written claim or notice of violation, lien, complaint, suit, order or
other written claim or notice to the effect that the Loan Parties are or
may be liable to any Person as a result of (A) the environmental condition
of any of their properties or any other property, or (B) the release or
threatened release of any Pollutant, or (ii) any letter or written request
for information under Section 104 of the CERCLA, or comparable state laws,
and to the best of the Loan Parties'
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knowledge, none of the operations of the Loan Parties is the subject of any
investigation by a Governmental Authority evaluating whether any remedial
action is needed to respond to a release or threatened release of any
Pollutant at the Properties and Facilities or at any other location,
including any location to which the Loan Parties have transported, or
arranged for the transportation of, any Pollutants with respect to the
Properties and Facilities; (d) except as disclosed in the Environmental
Schedule, neither the Loan Parties nor any prior owner or operator has
incurred in the past, or is now subject to, any Environmental Liabilities;
(e) except as disclosed in the Environmental Schedule, there are no Liens,
covenants, deed restrictions, notice or registration requirements, or other
limitations applicable to the Properties and Facilities, based upon any
Environmental Laws or other legal obligations; (f) there are no USTs
located in, at, on, or under the Properties and Facilities other than the
USTs identified in the Environmental Schedule as USTs; and each of those
USTs is in full compliance with all Environmental Laws and other legal
obligations, except as disclosed on the Environmental Schedule; and (g)
except as disclosed in the Environmental Schedule, there are no PCBs, lead
paint, asbestos (of any type or form), or materials, articles or products
containing PCBs, lead paint or asbestos, located in, at, on, under, a part
of, or otherwise related to the Properties and Facilities (including,
without limitation, any building, structure, or other improvement that is a
part of the Properties and Facilities), and all of the PCBs, lead paint,
asbestos, and materials, articles and products containing PCBs, lead paint
or asbestos identified in the Environmental Schedule are in full compliance
with all Environmental Laws and other legal obligations.
(m) Legal Investments; Use of Proceeds. The Loan Parties will use the
proceeds from the sale of the Notes to refinance existing debt in
conjunction with obtaining new senior financing. The Loan Parties are not
engaged in the business of extending credit for the purpose of purchasing
or carrying any "margin stock" or "margin security" (within the meaning of
Regulations T, U or X issued by the Board of Governors of the Federal
Reserve System), and no proceeds of the sale of the Notes will be used to
purchase or carry any margin stock or margin security or to extend credit
to others for the purpose of purchasing or carrying any margin stock or
margin security.
(n) Taxes. The Loan Parties have filed or caused to be filed all
Federal, state and local tax returns which are required to be filed by it,
and has paid or caused to be paid or established adequate reserves for all
taxes shown to be due and payable on such returns or on any assessments
received by it, including payroll taxes.
(o) Labor and Employment. The Loan Parties are and each of their Plans
are in compliance in all material respects with those provisions of ERISA,
the Code, the Age Discrimination in Employment Act, and the regulations and
published interpretations thereunder which are applicable to the Loan
Parties or any such Plan. As of the date hereof, no Reportable Event has
occurred with respect to any Plan as to which any of the Loan Parties are
or were required to file
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a report with the PBGC. No Plan has any material amount of unfunded benefit
liabilities (within the meaning of Section 4001(a)(18) of ERISA) or any
accumulated funding deficiency (within the meaning of Section 302(a)(2) of
ERISA), whether or not waived, and neither the Loan Parties nor any member
of the Controlled Group have incurred or expects to incur any material
withdrawal liability under Subtitle E of Title IV of ERISA to a
Multiemployer Plan. Except as reflected in the Loan Parties' balance sheets
dated as of December 31, 1998, the Loan Parties are in compliance in all
material respects with all labor and employment laws, rules, regulations
and requirements of all applicable domestic and foreign jurisdictions.
There are no pending or, to the best knowledge of the Loan Parties,
threatened labor disputes, work stoppages or strikes.
(p) Investment Company Act; Public Utility Holding Company Act. None
of the Loan Parties is (a) an "investment company" within the meaning of
the Investment Company Act of 1940, as amended, or (b) a "holding company"
or a "subsidiary company" of a "holding company" or an "affiliate" of a
"holding company" or of a "subsidiary company" of a "holding company,"
within the meaning of the Public Utility Holding Company Act of 1935, as
amended.
(q) Properties; Security Interests. The Loan Parties have good and
marketable title to, or valid leasehold interests in, all of the material
assets and properties used or useful by the Loan Parties in the Business
(collectively, the "Properties and Facilities"), subject to no Liens except
for Permitted Liens. All of the Properties and Facilities are in good
repair, working order and condition, normal wear and tear excepted, and all
such assets and properties are owned by the Loan Parties free and clear of
all Liens except for Permitted Liens. The Properties and Facilities
constitute all of the material assets, properties and rights of any type
used in or necessary for the conduct of the Business. The Security
Agreement creates and grants to Purchaser a valid and perfected first
priority security interest in all the collateral thereunder, subject only
to Permitted Liens. All real estate owned or leased by the Loan Parties is
listed on the "Properties Schedule."
(r) Intellectual Property; Licenses. The Loan Parties own or have the
right to use all Proprietary Rights necessary to conduct the Business as
heretofore conducted or as proposed to be conducted. All Proprietary Rights
registered in the name of the Loan Parties and applications therefor filed
by the Loan Parties are listed on the "Intellectual Property Schedule." No
event has occurred which permits, or after notice or lapse of time or both
would permit, the revocation or termination of any of the foregoing which
taken in isolation or when considered with all other such revocations or
terminations could have a Material Adverse Effect. The Loan Parties do not
have notice or knowledge of any facts or any past, present or threatened
occurrence that could preclude or impair the Loan Parties' ability to
retain or obtain any authorization necessary for the operation of the
Business.
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(s) Solvency. After giving effect to the Transactions, (i) the fair
value of the assets of the Loan Parties, at a fair valuation, will exceed
their debts and liabilities, subordinated, contingent or otherwise, (ii)
the present fair saleable value of the property of the Loan Parties will be
greater than the amount that will be required to pay the probable liability
of their debts and other liabilities, subordinated, contingent or
otherwise, as such debts and other liabilities become absolute and matured,
(iii) the Loan Parties will be able to pay their debts and liabilities,
subordinated, contingent or otherwise, as such debts and liabilities become
absolute and matured, and (iv) the Loan Parties will not have unreasonably
small capital with which to conduct the business in which they are engaged
as such business is now conducted and is proposed to be conducted following
the Closing Date.
(t) Complete Disclosure. All factual information furnished by or on
behalf of the Loan Parties to Purchaser for purposes of or in connection
with this Agreement or the Transactions is, and all other such factual
information hereafter furnished by or on behalf of the Loan Parties will
be, true and accurate in all material respects on the date as of which such
information is furnished and not incomplete by omitting to state any fact
necessary to make such information not misleading at such time in light of
the circumstances under which such information was provided.
(u) Side Agreements. Neither the Loan Parties nor any Affiliate of the
Loan Parties nor any director, officer or employee of the Loan Parties or
any of their Affiliates, respectively, has entered into, as of the date
hereof, any agreement, either oral or written, with any individual or
business, pursuant to which the director, officer, employee, Loan Parties
or Affiliate have agreed to do anything beyond the requirements of the
formal, written contracts executed by the Loan Parties and disclosed to
Purchaser herein.
(v) Broker's or Finder's Commissions. No broker's or finder's or
placement fee or commission will be payable to any broker or agent engaged
by the Loan Parties or any of their officers, directors or agents with
respect to the issue of the Notes, the Warrants or the transactions
contemplated by this Agreement, including without limitation the
Transactions, except for fees payable to (i) Purchaser, and (ii) Berwind
Financial in an amount not to exceed $660,000 (plus reasonable expenses).
The Loan Parties agree to indemnify Purchaser and hold it harmless from
against any claim, demand or liability for broker's or finder's or
placement fees or similar commissions, whether or not payable by the Loan
Parties, alleged to have been incurred in connection with such
transactions, other than any broker's or finder's fees payable to Persons
engaged by Purchaser.
5.2 Absolute Reliance on the Representations and Warranties. All
representations and warranties contained in this Agreement and any instruments,
certificates, schedules
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or other documents delivered in connection herewith, shall survive the execution
and delivery of this Agreement, regardless of any investigation made by
Purchaser or on Purchaser's behalf.
ARTICLE 6
TRANSFER OF NOTES
6.1 Restricted Securities. Purchaser acknowledges that the Securities have
not been registered under the Securities Act and may be resold only if
registered pursuant to the provisions of the Securities Act or if an exemption
from registration is available, and that the Loan Parties are not required to
register the Notes or the Warrants, as the case may be.
6.2 Legends; Purchaser's Representations. Purchaser hereby represents and
warrants to the Loan Parties that it is an "accredited investor" within the
meaning of Rule 501(a) under the Securities Act and is acquiring the Securities
for investment for its own account, with no present intention of dividing its
participation with others (except for a potential transfer or transfers of the
Securities to an affiliate or affiliates of Purchaser) or reselling or otherwise
distributing the same in violation of the Securities Act or any applicable state
securities laws. The Loan Parties may place an appropriate legend on the
Securities owned by Purchaser concerning the restrictions set forth in this
Article 6. Upon the assignment or transfer by Purchaser or any of its successors
or assignees of all or any part of the Securities, the term "Purchaser" as used
herein shall thereafter mean, to the extent thereof, the then holder or holders
of such Securities, or portion thereof.
6.3 Transfer of Notes. Subject to Section 6.2 hereof, a holder of a Note
may transfer such Note to a new holder, or may exchange such Note for Notes of
different denominations (but in no event of denominations of less than $500,000
in original principal amount), by surrendering such Note to the Loan Parties
duly endorsed for transfer or accompanied by a duly executed instrument of
transfer naming the new holder (or the current holder if submitted for exchange
only), together with written instructions for the issuance of one or more new
Notes specifying the respective principal amounts of each new Note and the name
of each new holder and each address therefor. The Loan Parties shall
simultaneously deliver to such holder or its designee such new Notes and shall
xxxx the surrendered Notes as canceled. In lieu of the foregoing procedures, a
holder may assign a Note (in whole but not in part) to a new holder by sending
written notice to the Loan Parties of such assignment specifying the new
holder's name and address; in such case, the Loan Parties shall promptly
acknowledge such assignment in writing to both the old and new holder. The Loan
Parties shall not be required to recognize any subsequent holder of a Note
unless and until the Loan Parties have received reasonable assurance that all
applicable transfer taxes have been paid.
6.4 Replacement of Lost Securities. Upon receipt of evidence reasonably
satisfactory to the Loan Parties of the mutilation, destruction, loss or theft
of any
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Securities and the ownership thereof, the Loan Parties shall, upon the written
request of the holder of such Securities, execute and deliver in replacement
thereof new Securities in the same form, in the same original principal amount
and dated the same date as the Securities so mutilated, destroyed, lost or
stolen; and such Securities so mutilated, destroyed, lost or stolen shall then
be deemed no longer outstanding hereunder. If the Securities being replaced have
been mutilated, they shall be surrendered to the Loan Parties; and if such
replaced Securities have been destroyed, lost or stolen, such holder shall
furnish the Loan Parties with an indemnity in writing to save it harmless in
respect of such replaced Security.
6.5 No Other Representations Affected. Nothing contained in this Article 6
shall limit the full force or effect of any representation, agreement or
warranty made herein or in connection herewith to Purchaser.
ARTICLE 7
COVENANTS
7.1 Affirmative Covenants. The Loan Parties covenant that, so long as all
or any of the principal amount of the Notes or any interest thereon shall remain
outstanding, and, thereafter, so long as the Purchaser owns any Warrants or
Underlying Common Stock, the Loan Parties shall:
(a) Existence. Do or cause to be done all things necessary to
preserve, renew and keep in full force and effect its legal existence.
(b) Businesses and Properties; Compliance with Laws. At all times (i)
do or cause to be done all things necessary to preserve, renew and keep in
full force and effect the rights, licenses, registrations, permits,
certifications, approvals, consents, franchises, patents, copyrights,
trademarks and trade names, and any other trade names which may be material
to the conduct of their businesses, (ii) comply in all material respects
with all material laws and regulations applicable to the operation of such
business, including but not limited to, all Environmental Laws, whether now
in effect or hereafter enacted and with all other applicable laws and
regulations, (iii) take all action which may be required to obtain,
preserve, renew and extend all rights, patents, copyrights, trademarks,
tradenames, franchises, registrations, certifications, approvals, consents,
licenses, permits and any other authorizations which may be material to the
operation of such business, (iv) maintain, preserve and protect all
property material to the conduct of such business, and (v) except for
obsolete or worn out equipment, keep their property in good repair, working
order and condition, normal wear and tear excepted, and from time to time
make, or cause to be made, all needful and proper repairs, renewals,
additions, improvements and replacements thereto necessary in order that
the business carried on in connection therewith may be properly conducted
at all times.
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(c) Insurance. Maintain insurance required by the Purchase Documents,
including but not limited to: (i) the Life Insurance until the Notes have
been repaid in full; (ii) coverage on their insurable properties (including
all inventory, equipment and real property) against the perils of fire,
theft and burglary; (iii) public liability; (iv) workers' compensation; (v)
business interruption; (vi) product liability; and (vii) such other risks
as are customary with companies similarly situated and in the same or
similar business as that of the Loan Parties under policies issued by
financially sound and reputable insurers in such amounts as are customary
with companies similarly situated and in the same or similar business. The
Loan Parties shall pay all insurance premiums payable by it and shall
deliver the policy or policies of such insurance (or certificates of
insurance with copies of such policies) to Purchaser. All insurance
policies of the Loan Parties shall contain endorsements, in form and
substance reasonably satisfactory to Purchaser, providing that the
insurance shall not be cancelable except upon thirty (30) days' prior
written notice to Purchaser. The holders of the Notes shall be shown as a
loss payee and an additional named insured party under all such insurance
policies.
(d) Obligations and Taxes. Pay and discharge promptly when due all
taxes, assessments and governmental charges or levies imposed upon them or
upon their income or profits or in respect of their properties before the
same shall become delinquent or in default, as well as all lawful claims
for labor, materials and supplies or otherwise, which, if unpaid, might
give rise to Liens or charges upon such properties or any part thereof;
provided, however, that the Loan Parties shall not be required to pay and
discharge or to cause to be paid and discharged any such tax, assessment,
charge, levy or claim so long as the validity or amount thereof shall be
contested in good faith by appropriate proceedings and the Loan Parties
shall have set aside on their books adequate reserves with respect thereto.
(e) Financial Statements; Reports. Furnish to Purchaser:
(i) Annual Statements. Within ninety (90) days after the end of
each fiscal year, a balance sheet and statements of operations,
stockholders' equity and cash flows of IGI showing the financial
condition of IGI as of the close of such year and the results of
operations during such year, all the foregoing financial statements to
be audited by a firm of independent certified public accountants of
recognized national standing acceptable to Purchaser and accompanied
by an opinion of such accountants without material exceptions or
qualifications.
(ii) Monthly Statements. Within thirty (30) calendar days after
the end of each calendar month, financial statements (including a
balance sheet and cash flow and income statements) showing the
financial condition and results of operations of IGI as of the end of
each such month and for the then elapsed portion of the current fiscal
year, together with comparisons to the corresponding periods in the
preceding year and the budget for such periods, accompanied by a
certificate of an officer that
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such financial statements have been prepared in accordance with GAAP,
consistently applied (except for normal and recurring year-end
adjustments and the omission of footnotes), and setting forth in
comparative form the respective financial statements for the
corresponding date and period in the previous fiscal year.
(iii) Certificate of Compliance. Each financial statement
furnished to Purchaser pursuant to subsections (i) and (ii) of this
Section 7.1(e) shall be accompanied by a written certificate signed by
IGI's chief financial officer, chief accounting officer or treasurer
(A) to the effect that no Default or Event of Default has occurred
during the period covered by such statements or, if any such Default
or Event of Default has occurred during such period, setting forth a
description of such Default or Event of Default and specifying the
action, if any, taken by IGI to remedy the same, and (B) a compliance
certificate in the form of Exhibit F showing IGI's compliance with the
covenants set forth in Section 7.3.
(iv) Accountant Reports. Promptly after the receipt thereof,
copies of all reports, if any, submitted to IGI by independent
certified public accountants in connection with each annual, interim
or special audit or review of the financial statements of IGI made by
such accountants, including but not limited to, any comment letter
submitted by such accountants to management in connection with any
annual review.
(v) Projections. As soon as available, but in no event later than
December 15 of each year, a projection of IGI's balance sheet, and
income, retained earnings and cash flow statements for the following
three fiscal years; and within ten (10) business days after any
material update or amendment of any such plan or forecast, a copy of
such update or amendment, including a description of and reasons for
such update or amendment. Each such projection, update or amendment
shall be accompanied by a written certificate signed by IGI's chief
financial officer, chief accounting officer or treasurer to the effect
that it has been prepared on the basis of IGI's historical financial
statements and records, together with the assumptions set forth in
such projection and that it reflects expectations, after reasonable
analysis, of IGI's management as to the matters set forth therein.
(vi) Additional Information. Promptly, from time to time, such
other information regarding the compliance by IGI with the terms of
this Agreement and the other Purchase Documents or the affairs,
operations or condition (financial or otherwise) of IGI as Purchaser
may reasonably request and which is capable of being obtained,
produced or generated by IGI or of which IGI has knowledge.
(f) Litigation and Other Notices. Give Purchaser prompt written notice
of the following:
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(i) Orders; Injunctions. The issuance by any court or
governmental agency or authority of any injunction, order, decision or
other restraint specifically naming any of the Loan Parties and
prohibiting, or having the effect of prohibiting, the making of any
loan or the initiation of any litigation or similar proceeding seeking
any such injunction, order or other restraint.
(ii) Litigation. The written notice, filing or commencement of
any action, suit or proceeding against any of the Loan Parties whether
at law or in equity or by or before any court or any Federal, state,
municipal or other governmental agency or authority and which, if
adversely determined against any of the Loan Parties, could resulted
in uninsured liability in excess of $250,000 in the aggregate.
(iii) Environmental Matters. (i) Any release or threatened
release of any Pollutant required to be reported to any Federal, state
or local governmental or regulatory agency under any applicable
Environmental Laws, (ii) any Removal, Remedial or Response action
taken by any of the Loan Parties or any other person in response to
any Pollutant in, at, on or under, a part of or about any of the Loan
Parties' properties or any other property, (iii) any violation by any
of the Loan Parties of any Environmental Law, in each case, which
could result in a Material Adverse Effect, or (iv) any written notice,
claim or other information that any of the Loan Parties might be
subject to an Environmental Liability.
(iv) Default. Any Default or Event of Default, specifying the
nature and extend thereof and the action (if any) which is proposed to
be taken with respect thereto.
(v) Material Adverse Effect. Any development in the business or
affairs of any of the Loan Parties which could have a Material Adverse
Effect.
(vi) Board Meetings. Written notice of (a) each regular meeting
of each of the Loan Parties' Board of Directors at least thirty (30)
days in advance of such meeting and (b) each special meeting of the
Board of Directors no later than the date on which the members of the
Board of Directors are notified of such meeting, but in any case such
notice shall be delivered at least twenty-four (24) hours in advance
of such meeting. In addition, the Loan Parties will send Purchaser
copies of all reports and materials provided to members of the Board
of Directors at meetings or otherwise.
(g) ERISA. Comply in all material respects with the applicable
provisions of ERISA and the provisions of the Code relating thereto and
furnish to Purchaser (i) as soon as possible, and in any event within
thirty (30) days after
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the Loan Parties know or have reason to know thereof, notice of (A) the
establishment by the Loan Parties of any Plan, (B) the commencement by the
Loan Parties of contributions to a Multiemployer Plan, (C) any failure by
the Loan Parties or any of their ERISA Affiliates to make contributions
required by Section 302 of ERISA (whether or not such requirement is waived
pursuant to Section 303 of ERISA), or (D) the occurrence of any Reportable
Event with respect to any Plan or Multiemployer Plan for which the
reporting requirement is not waived, together with a statement of an
officer setting forth details as to such Reportable Event and the action
which the Loan Parties propose to take with respect thereto, together with
a copy of the notice of such Reportable Event given to the PBGC if any such
notice was provided by the Loan Parties, and (ii) promptly after receipt
thereof, a copy of any notice the Loan Parties may receive from the PBGC
relating to the intention of the PBGC to terminate any Plan or
Multiemployer Plan, or to appoint a trustee to administer any Plan or
Multiemployer Plan, and (iii) promptly after receipt thereof, a copy of any
notice of withdrawal liability from any Multiemployer Plan.
(h) Maintaining Records; Access to Premises and Inspections. Maintain
financial records in accordance with generally accepted practices and, upon
reasonable notice, at all reasonable times and as often as any Purchaser
may reasonably request (and at any time after the occurrence and during the
continuation of a Default or Event of Default), permit any authorized
representative designated by Purchaser to visit and inspect the properties
and financial records of the Loan Parties and to make extracts from such
financial records, all at the Loan Parties' reasonable expense, and permit
any authorized representative designated by Purchaser to discuss the
affairs, finances and conditions of the Loan Parties with the Loan Parties'
chief financial officers and such other officers as the Loan Parties shall
deem appropriate, and the Loan Parties' independent public accountants.
(i) Board of Directors.
(i) The IGI's Board of Directors shall meet at least once per calendar
quarter. Purchaser shall have the right to designate for election such
number of the members of IGI's Board of Directors that bears the same ratio
to the total number of directors as the number of shares of Common Stock
owned by Purchaser and Underlying Common Stock for which any Warrants held
by Purchaser are exercisable bears to the total number of outstanding
shares of Common Stock, on a Fully Diluted Basis and rounded to the nearest
whole number; provided that so long as all or any of the principal amount
of the Notes or interest thereon shall remain outstanding, or for so long
as Purchaser shall hold Common Stock and Underlying Common Stock that, in
the aggregate, constitute at least five percent (5%) of the outstanding
shares of IGI's Common Stock, the Purchaser shall have the right to
designate at least one such director.
(ii) In the event Purchaser shall waive its right to designate a
Director pursuant to this Section 7.1(i), Purchaser may designate an
observer, without
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voting rights, who will be entitled to attend all meetings of IGI's Board
of Directors (including committees) and stockholders. Any observer
designated by Purchaser shall be entitled to notice of all meetings of
IGI's Board of Directors (including committee meetings) and to information
provided to Directors. Such observer shall receive reimbursement for
reasonable out-of-pocket expenses from the Loan Parties incurred in
connection with attendance at Board of Directors, committee and stockholder
meetings.
IGI's Board of Directors shall maintain the following committees:
(i) an executive committee; (ii) an audit committee; and (iii) a
compensation committee. The audit committee and the compensation committee
shall be comprised of directors who are not otherwise employed by the Loan
Parties. Purchaser shall have the right to designate one member of each of
such committees so long as any Note shall remain outstanding, or so long
as Purchaser Common Stock and Underlying Common Stock that, in the
aggregate, constitute at least five percent (5%) of the outstanding shares
of IGI's Common Stock
(j) Future Financings. The Loan Parties shall give to Purchaser an
opportunity to participate in any future financings of the Loan Parties.
7.2 Negative Covenants. The Loan Parties covenant that, so long as all or
any part of the principal amount of the Notes or any interest thereon shall
remain outstanding:
(a) Indebtedness. The Loan Parties shall not create, incur, assume
guarantee or be or remain liable for, contingently or otherwise, or suffer
to exist any Indebtedness, except:
(i) Indebtedness under this Agreement;
(ii) Indebtedness under the Senior Financing;
(iii) Indebtedness incurred in the ordinary course of business
with respect to customer deposits, trade payables and other unsecured
current liabilities not the result of borrowing and not evidenced by
any note or other evidence of indebtedness.; and
(iv) Indebtedness outstanding on the date hereof and set forth on
the "Indebtedness Schedule."
(b) Negative Pledge; Liens. The Loan Parties shall not create, incur,
assume or suffer to exist any Lien of any kind on any of their properties
or assets of any kind, except the following (collectively, "Permitted
Liens"):
(i) Liens created in connection with the Senior Financing, which
Liens Purchaser will subordinate to on terms that are reasonably
acceptable to Purchaser;
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(ii) Liens for or priority claims imposed by law that are
incidental to the conduct of business or the ownership of properties
and assets (including mechanic's, warehousemen's, attorneys' and
statutory landlords' liens) and deposits, pledges or liens to secure
statutory obligations, surety or appeal bonds or other liens of like
general nature incurred in the ordinary course of business and not in
connection with the borrowing of money; provided, however, that in
each case, the obligation secured is not overdue, or, if overdue, is
being contested in good faith and adequate reserves have been set up
by the Loan Parties as the case may be; and provided, further, that
the lien and security interest provided in the Security Documents or
any portion thereof created or intended to be created thereby is not,
in the opinion of Purchaser, unreasonably jeopardized thereby;
(iii) Liens securing the payments of taxes, assessments and
governmental charges or levies incurred in the ordinary course of
business that either (a) are not delinquent, or (b) are being
contested in good faith by appropriate legal or administrative
proceedings and as to which adequate reserves have been set aside on
their books, and so long as during the period of any such contest, the
Loan Parties shall suffer no loss of any privilege of doing business
or any other right, power or privilege necessary or material to the
operation of the Business;
(iv) Liens listed on the Permitted Encumbrances Schedule;
(v) extensions, renewals and replacements of Liens referred to in
clauses (i) through (iv) of this Section 7.2(b); provided, however,
that any such extension, renewal or replacement Lien shall be limited
to the property or assets covered by the Lien extended, renewed or
replaced and that the obligations secured by any such extension,
renewal or replacement Lien shall be in an amount not greater than the
amount of the obligations secured by the Lien extended, renewed or
replaced.
(c) Contingent Liabilities. The Loan Parties shall not become liable
for any Guaranties, except for the endorsement of negotiable instruments
for deposit or collection or similar transactions in the ordinary course of
business.
(d) Leases. At no point shall the sum of the aggregate amount of
annualized payments on operating leases during any current or future twelve
(12) month period exceed $250,000.
(e) Capital Expenditures. The Loan Parties shall not make or commit to
make any payments in any fiscal year on account of the purchase or lease of
any assets that if purchased would constitute fixed assets or that if
leased would constitute a Capitalized Lease that in the aggregate would
cost more than $1,900,000 for the period beginning on the Closing Date and
ending on September 30, 2000, and $750,000 for each twelve (12) month
period thereafter
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ending on September 30; provided, however, that all such capital
expenditures and leases shall be made under usual and customary terms and
in the ordinary course of business. Annual limits after Fiscal Year 1999
may be reconsidered upon receipt of the Loan Parties' annual budget.
(f) Mergers, etc. The Loan Parties shall not merge into or consolidate
or combine with any other Person, or purchase, lease or otherwise acquire
(in one transaction or a series of related transactions) all or any part of
the property or assets of any Person other than purchases or other
acquisitions of inventory, materials, leases, property and equipment in the
ordinary course of business. Except as expressly permitted by the Security
Documents, the Loan Parties shall not sell, transfer or otherwise dispose
of any of their assets, including the collateral under the respective
Security Documents.
(g) Affiliate Transactions. The Loan Parties shall not make any loan
or advance to any director, officer or employee of the Loan Parties or any
Affiliate, or enter into or be a party to any transaction or arrangement
with any Affiliate of the Loan Parties, including, without limitation, the
purchase from, sale to or exchange of property with, any merger or
consolidation with or into, or the rendering of any service by or for, any
Affiliate, except (i) pursuant to the reasonable requirements of the Loan
Parties' business and upon fair and reasonable terms no less favorable to
the Loan Parties than would be obtained in a comparable arm's-length
transaction with a Person other than an Affiliate, and (ii) for the
cashless exercise of stock options by employees, officers or directors of
IGI.
(h) Dividends and Stock Purchases. The Loan Parties shall not directly
or indirectly: declare or pay any dividends or make any distribution of any
kind on their outstanding capital stock or any other payment of any kind to
any of their stockholders or their Affiliates (including any redemption,
purchase or acquisition of, whether in cash or in property, securities or a
combination thereof, any partnership interests or capital accounts or
warrants, options or any of their other securities), or set aside any sum
for any such purpose; provided, however, that this Section 7.2(h) shall not
apply to stock purchases pursuant to Article 9 hereof.
(i) Advances, Investments and Loans. The Loan Parties shall not
purchase, or hold beneficially any stock, other securities or evidences of
Indebtedness of, or make or permit to exist any loan, Guaranty or advance
to, or make any investment or acquire any interest whatsoever in, any other
Person (including, but not limited to, the formation or acquisition of any
Subsidiaries), except:
(i) securities issued or directly and fully guaranteed or insured
by the United States of America or any agency or instrumentality
thereof having maturities of not more than six months from the date of
acquisition;
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(ii) United States dollar-denominated time deposits, certificates
of deposit and bankers acceptances of any bank or any bank whose
short-term debt rating from Standard & Poor's Ratings Group, a
division of The XxXxxx-Xxxx Companies, Inc. ("S&P"), is at least A-1
or the equivalent or from Xxxxx'x Investors Service, Inc. ("Xxxxx'x")
is at least P-1 or the equivalent with maturities of not more than six
months from the date of acquisition;
(iii) commercial paper with a rating of at least A-1 or the
equivalent by S&P or at least P-1 or the equivalent by Moody's
maturing within six months after the date of acquisition;
(iv) marketable direct obligations issued by any state of the
United States of America or any political subdivision of any such
state or any public instrumentality thereof maturing within six months
from the date of acquisition thereof and, at the time of acquisition,
having one of the two highest ratings obtainable from either S&P or
Moody's;
(v) Investments in money market funds substantially all the
assets of which are comprised of securities of the types described in
clauses (i) through (iv) above;
(vi) deposit accounts maintained in accordance with any loan
agreement evidencing the Senior Financing;
(vii) Investments (including debt obligations) received in
connection with the bankruptcy or reorganization of suppliers and
customers and in settlement of delinquent obligations of, and other
disputes with, customers and suppliers arising in the ordinary course
of business;
(viii) receivables owing to the Loan Parties created or acquired
in the ordinary course of business and payable on customary trade
terms of the Loan Parties;
(ix) deposits made in the ordinary course of business consistent
with past practices to secure the performance of leases or in
connection with bidding on government contracts;
(x) advances to employees in the ordinary course of business for
business expenses; provided, however, that the aggregate amount of
such advances at any time outstanding shall not exceed $100,000, and
(xi) other Investments existing as of the date hereof as set
forth on the "Investments Schedule."
In determining the amount of Investments, acquisitions, loans, advances and
Guaranties, permitted pursuant to this Section 7.2(i), Investments and
acquisitions
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shall always be taken at the original cost thereof (regardless of any
subsequent appreciation or depreciation therein), loans and advances shall
be taken at the principal amount thereof then remaining unpaid, and
Guaranties shall be taken at the amount of obligations guaranteed thereby.
(j) Use of Proceeds. The Loan Parties shall not use any proceeds from
the sale of the Notes hereunder, directly or indirectly, for the purposes
of purchasing or carrying any "margin securities" within the meaning of
Regulations T, U or X promulgated by the Board of Governors of the Federal
Reserve Board or for the purpose of arranging for the extension of credit
secured, directly or indirectly, in whole or in part by collateral that
includes any "margin securities."
(k) Stock Issuances. Except as provided in Section 3.1, the Loan
Parties shall not issue any capital stock or other equity interests or any
options or warrants to purchase, or securities convertible into capital or
equity interests or establish any stock appreciation rights or similar
programs based on the value of the Loan Parties' equity interests;
provided, however, that so long as no Default or Event of Default shall
exist or be continuing hereunder or be created as a result thereof, IGI may
issue shares of Common Stock in connection with IGI's employee incentive
awards and option plans provided that the aggregate amount of Common Stock
issuable pursuant to all such awards and Plans shall not exceed fifteen
percent (15%) of IGI's outstanding Common Stock, as of the Closing Date, on
a Fully Diluted Basis.
(l) Amendment of Charter Documents. The Loan Parties shall not amend,
terminate, modify or waive or agree to the amendment, modification or
waiver of any material term or provision of their Charter Documents, or
Bylaws.
(m) Subsidiaries. The Loan Parties shall not establish or acquire any
Subsidiary.
(n) Business. The Loan Parties shall not engage, directly or
indirectly, in any business other than the business of (i) producing
and marketing poultry vaccines and related products, (ii) producing
and marketing companion pet products such as pharmaceuticals,
nutritional supplements and grooming aids, (iii) producing and
marketing cosmetics and skin care products, and other related
activities and (iv) developing commercial applications for
micro-encapsulation and compatible and related technologies.
(o) Fiscal Year; Accounting. The Loan Parties shall not change
their Fiscal Year from ending on December 31 or method of accounting
(other than immaterial changes in methods), except as required by
GAAP.
(p) Establishment of New or Changed Business Locations. The Loan
Parties shall not relocate their principal executive offices or other
facilities, and it shall not establish new business locations or store
any inventory or other assets at
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a location not identified to Purchaser on or before the date hereof,
without providing not less than thirty (30) days advance written notice to
Purchaser.
(q) Changed or Additional Business Names. The Loan Parties shall
not change their corporate name or establish new or additional trade
names without providing not less than thirty (30) days advance written
notice to Purchaser.
(r) Amendment to Stock Option Plan. The Loan Parties shall not
amend their employee stock option plans without the prior written
consent of the Purchaser.
7.3 Financial Covenants. IGI covenants that, so long as all or any part of
the principal amount of the Notes or any interest thereon shall remain
outstanding, it shall maintain at the end of each calendar quarter (i.e., March
31, June 30, September 30 and December 31) (each such date being a "Measurement
Date") beginning with the calendar quarter ending December 31, 1999:
(a) Minimum Fixed Charges Coverage Ratio. A Minimum Fixed Charges
Coverage Ratio, calculated monthly on a rolling twelve-month basis, for the
applicable Measurement Date as follows:
Period Ratio
On 12-31-99 0.8 to 1.0
On 3-31-2000 1.01 to 1.0
On 6-30-2000 1.01 to 1.0
On 9-30-2000 1.01 to 1.0
From 10-1-2000 to 9-30-2001 1.01 to 1.0
From 10-1-2001 to 9-30-2002 1.20 to 1.0
From 10-1-2002 and thereafter 1.50 to 1.0
(b) Maximum Leverage Ratio. A Maximum Leverage Ratio, calculated
monthly using EBITDA on a rolling twelve-month basis, for the applicable
Measurement Date as follows:
Period Ratio
On 12-31-99 6.0 to 1.0
On 3-31-2000 5.5 to 1.0
On 6-30-2000 5.0 to 1.0
On 9-30-2000 4.0 to 1.0
From the Closing Date to 9-30-2000 3.75 to 1.0
From 10-1-2000 and thereafter 3.5 to 1.0
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(c) Maximum Debt to Equity Ratio. A Maximum Debt to Equity Ratio as
follows:
Period Ratio
From the Closing Date to 9-30-2000 4.25 to 1.0
From 10-1-2000 and thereafter 4.0 to 1.0
ARTICLE 8
EVENTS OF DEFAULT
8.1 Events of Default. An Event of Default shall mean the occurrence of one
or more of the following described events:
(a) if any Loan Party shall default in the payment of (i) interest on
the Notes within five (5) days after its due date or (ii) principal of the
Notes when due, whether at maturity, upon notice of prepayment in
accordance with Sections 3.3 or 3.4, upon any scheduled payment date or by
acceleration or otherwise;
(b) if any Loan Party shall default under any agreement under which
any Indebtedness in an aggregate principal amount of $250,000 or more is
created in a manner entitling the holder of such Indebtedness to accelerate
the maturity of such Indebtedness.
(c) if any representation or warranty herein made by any Loan Party,
or any certificate or financial statement furnished pursuant to the
provisions hereof, shall prove to have been false or misleading in any
material respect as of the time made or furnished or deemed made or
furnished;
(d) if any Loan Party shall default in the performance of any
covenant, condition or provision of Section 7.1(h), 7.2 or 7.3;
(e) if a default or event of default shall occur under any of the
other Purchase Documents, beyond any applicable notice or cure periods;
(f) if any Loan Party shall default in the performance of any other
covenant, condition or provision of this Agreement, the Notes or the other
Purchase Documents, and such default shall not be remedied for a period of
thirty (30) days of the earlier of (i) written notice from a Purchaser of
such default or (ii) actual knowledge by any Loan Party of such default;
(g) if a proceeding shall have been instituted in a court having
jurisdiction in the premises seeking a decree or order for relief in
respect of any Loan Party in an involuntary case under any applicable
bankruptcy, insolvency or other similar law now or hereafter in effect, or
for the appointment of a receiver,
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liquidator, assignee, custodian, trustee, sequestrator (or similar
official) of any Loan Party or for any substantial part of their property,
or for the winding-up or liquidation of their affairs, and such proceeding
shall remain undismissed or unstayed and in effect for a period of sixty
(60) days;
(h) if any Loan Party shall commence a voluntary case under any
applicable bankruptcy, insolvency or other similar law now or hereafter in
effect, shall consent to the entry of an order for relief in an involuntary
case under any such law, or shall consent to the appointment of or taking
possession by a receiver,
liquidator, assignee, trustee, custodian, sequestrator (or other similar
official) of any Loan Party or for any substantial part of their property,
or shall make a general assignment for the benefit of creditors, or shall
fail generally to their debts as they become due, or shall take any action
in furtherance of any of the foregoing;
(i) if both the following events shall occur; (i) a Reportable Event,
the occurrence of which would have a Material Adverse Effect which could
cause the imposition of a Lien under Section 4068 of ERISA, shall have
occurred with respect to any Plan or Plans; and (ii) the aggregate amount
of the then "current liability" (as defined in Section 412(l)(7) of the
Internal Revenue Code of 1986, as amended) of all accrued benefits under
such Plan or Plans exceeds the then current value of the assets allocable
to such benefits by more than $100,000 at such time;
(j) if a final judgment which, with other undischarged final judgments
against any Loan Party, exceeds an aggregate of $250,000 (excluding
judgments to the extent the applicable Loan Party is fully insured or the
deductible or retention limit does not exceed $250,000 and with respect to
which the insurer has assumed responsibility in writing), shall have been
entered against any Loan Party if, within thirty (30) days after the entry
thereof, such judgment shall not have been discharged or execution thereof
stayed pending appeal, or if, within thirty (30) days after the expiration
of any such stay, such judgment shall not have been discharged;
(k) if any Security Document shall at any time after the Closing Date
cease for any reason to be in full force and effect or shall cease to
create perfected security interests in favor of Purchaser in the collateral
subject or purported to be subject thereto, subject to no other Liens other
than Permitted Liens, or such collateral shall have been transferred to any
Person without the prior written consent of the holders of a majority in
principal amount of the outstanding Notes; and
(l) a Change of Control shall have occurred.
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8.2 Consequences of Event of Default.
(a) Bankruptcy. If an Event of Default specified in paragraphs (g),
(h) or (l) of Section 8.1 hereof shall occur, the unpaid balance of the
Notes and interest (including, without limitation, Capitalized Interest and
interest accrued thereon) accrued thereon and all other liabilities of the
Loan Parties to the holders thereof hereunder and thereunder shall be
immediately due and payable, without presentment, demand, protest or
(except as expressly required hereby) notice of any kind, all of which are
hereby expressly waived.
(b) Other Defaults. If any other Event of Default shall occur, the
holders of a majority of the outstanding principal balance of the Notes may
at their option, by written notice to the Loan Parties, declare the entire
unpaid balance of the Notes, as the case may be, and interest (including,
without limitation, Capitalized Interest and interest accrued thereon)
accrued thereon and all other liabilities of the Loan Parties hereunder and
thereunder to be forthwith due and payable, and the same shall thereupon
become immediately due and payable, without presentment, demand, protest or
(except as expressly required hereby) notice of any kind, all of which are
hereby expressly waived.
(c) Penalty Interest. Following the occurrence and during the
continuance of any Event of Default, the holders of the Notes shall be
entitled to receive, to the extent permitted by applicable law, interest on
the outstanding principal of, and premium and overdue interest, if any, on,
the Notes at a rate per annum equal to the interest rate thereon
(determined as provided in Section 3.1) plus three hundred (300) basis
points.
(d) Premium. In the event of any acceleration of Notes pursuant to
Section 8.2(b) hereof, the Loan Parties shall also pay to holders of Notes
the prepayment premium that would otherwise be payable upon any voluntary
prepayment of such Notes.
8.3 Security. Payments of principal of, and premium, if any, and interest
on, the Notes and all other obligations of the Loan Parties under this Agreement
or the Notes are secured pursuant to the terms of the Security Documents.
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ARTICLE 9
PUT OPTION
9.1 Grant of Option. IGI hereby grants to each holder of Subject Securities
(a "Holder") an option to sell to IGI, and IGI is obligated to purchase from
each Holder under such option (the "Put Option"), all (or such portion as is
designated by any such Holder pursuant to Section 9.3 below) of the Subject
Securities then owned by such Holder. This Put Option will be effective at any
time and from time to time after the earliest to occur of (i) the fifth
anniversary of the Closing Date, (ii) the date of the payment in full of the
outstanding principal, interest and fees of the Notes, (iii) the date of the
payment in full of the outstanding principal, interest and fees of the Senior
Debt, or (iv) the sale of IGI or of at least 30% of its assets as part of a
single transaction or series of related transactions, and will remain in effect
until the date on which the following three (3) conditions are satisfied: (i)
the average daily trading volume of the Common Stock for the six (6) month
period immediately preceding such date is at least equal to ten percent (10%) of
the aggregate number of shares of Common Stock and Underlying Common Stock owned
by Purchaser; provided, however, that such six (6) month period shall not
include the first thirty (30) day period immediately following a secondary
public offering of the Common Stock; and (ii) the Market Price of the Common
Stock on such date is at least equal to Five Dollars ($5.00) per share; and
(iii) IGI has an effective shelf registration statement on file with the
Securities and Exchange Commission covering the Common Stock and the Underlying
Common Stock owned by the Purchaser.
9.2 Put Price. In the event that any Holder exercises the Put Option, the
price (the "Put Price") to be paid to each such Holder pursuant to this
Agreement will be the sum of the amount determined by multiplying the number of
shares of Subject Securities (or, in the case of any Warrant, the number of
shares of Underlying Common Stock into which such Warrant is convertible) for
which the Put Option is being exercised (collectively, the "Put Shares") by the
Fair Market Value therefor.
9.3 Exercise of Put Option. If any Holder elects to exercise its Put
Option, such Holder shall give written notice to IGI and each other Holder of
such Holder's election to exercise the Put Option, specifying, among other
things, the date on which the Put Option Closing (as hereinafter defined) shall
occur, which date shall not be less than twenty-one (21) days after the date of
such notice. If a Holder receives such notice of another Holder's exercise of
such other Holder's Put Option and the Put Option of the Holder receiving such
notice is effective pursuant to Section 9.1, the Holder receiving such notice
may elect to exercise its Put Option and designate a Put Option Closing
simultaneous with that of such other Holder. IGI will provide each Holder
desiring to exercise its Put Option with the name and address of each other
Holder. Notwithstanding the foregoing, the right of each Holder to exercise its
Put Option shall be an individual and separate right, and the exercise of any
Put Option by any Holder shall not be conditioned upon the exercise by any other
Holder of its Put Option; provided, however,
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that IGI shall not be required to redeem in any Put Option Closing shares of
Common Stock and Underlying Common Stock in excess of fifteen percent (15%) of
the shares of Common Stock that are issued and outstanding as of the date of
such Put Option Closing.
9.4 Certain Remedies. In the event that IGI defaults on its obligation to
purchase all or any portion of the Put Shares upon exercise of the Put Option by
any Holder, the Holder may elect, in addition to any other rights or remedies of
such Holder, either to (i) rescind its exercise of the Put Option, in which case
the Put Option will continue in full force and effect, or (ii) receive a Note in
the form attached hereto as Exhibit A, duly executed by IGI, payable to the
Holder in the principal amount of the Put Price, which Note shall constitute a
"Note" for all purposes hereunder and under the Transaction Documents; provided,
however, that such Note shall bear interest on the outstanding principal thereof
at a rate per annum equal to the Prime Rate, as such may adjust from time to
time, plus three hundred (300) basis points per annum; provided, further, that
IGI shall repay the unpaid principal balance of such Note in full, together with
all accrued and unpaid interest, fees and other amounts due thereunder, in 60
consecutive equal monthly payments commencing on the first Business Day of the
first full month following the execution of such Note and there shall be no
premium charged for prepaying such Note.
9.5 Put Option Closing. Each closing for the purchase and sale of the Put
Shares as to which any Holder has notified IGI of such Holder's intention to
exercise the Put Option (a "Put Option Closing") shall occur on the date
specified in such notice of exercise. At any Put Option Closing, to the extent
applicable, the Holder of the Put Shares will deliver the certificate or
certificates evidencing the Put Shares being purchased, duly endorsed in blank.
In consideration therefor, IGI will deliver to the Holder the Put Price, which
will be payable by cashier's or certified check, by wire transfer of immediately
payable funds to an account designated by such Holder, or, at the option of
Purchaser in its sole discretion, by note, provided such note contains terms
mutually acceptable to IGI and the Holder. In the event multiple Holders have
exercised the Put Option and there is insufficient cash available to pay each
such Holder the full amount of funds they have requested pursuant to the
preceding sentence, any payment of cash will be made on a pro rata basis among
such Holders in proportion to their respective number of Put Shares.
ARTICLE 10
PREEMPTIVE RIGHTS
10.1 Limited Preemptive Rights. If after the date of this Agreement, IGI
authorizes the issuance and sale of any shares of capital stock or any
securities containing options or rights to acquire any shares of capital stock
(other than in connection with an underwritten public offering, the issuance of
such securities in exchange for the securities or assets of another Person as a
part of an acquisition of a business as a going concern, or the grant of options
or rights to acquire no more than fifteen percent (15%) of shares of Common
Stock, on a Fully Diluted Basis, pursuant to an employee stock option plan) at
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any time that Purchaser holds any Common Stock or Warrants, IGI will offer to
sell to Purchaser a portion of such securities equal to the percentage
determined by dividing (i) the number of shares of Common Stock and Underlying
Common Stock (without duplication) then held by Purchaser by (ii) the number of
shares of Common Stock outstanding (determined on a Fully Diluted Basis). For
purposes of clause (ii) above, a share of Common Stock acquirable upon exercise
or conversion of options or rights to acquire any shares of Common Stock shall
be deemed outstanding only if the applicable conversion price, exercise price or
other acquisition price is equal to or less than the then current Market Price
of a share of Common Stock. Purchaser will be entitled to purchase such stock or
securities at the same price and on the same terms as such stock or securities
are to be offered to any other Person. Purchaser must exercise its purchase
rights within thirty (30) days after receipt of written notice from IGI
describing in reasonable detail the stock or securities being so offered, the
purchase price thereof, the payment terms and Purchaser's percentage allotment.
Upon the expiration of such period of thirty (30) days, IGI will be free to sell
such stock or securities which Purchaser has not elected to purchase during the
one hundred twenty (120) days following such expiration on terms and conditions
no more favorable to purchasers thereof than those offered to Purchaser. Any
stock or securities offered or sold by IGI after such one hundred twenty (120)
day period must be reoffered to Purchaser pursuant to the terms of this Section
10.1. Any stock or securities purchased by a Purchaser from IGI pursuant to this
Section 10.1 shall, upon such purchase and thereafter be deemed to be Securities
and Registrable Securities for all purposes of this Agreement.
10.2 Exceptions. The provisions of Section 10.1 shall not apply to
issuances of Common Stock upon exercise of the Warrants. The provisions of
Section 10.1 shall terminate upon the consummation of an underwritten public
offering of the Common Stock registered under the Securities Act with an
investment banking firm of national reputation as managing underwriter.
ARTICLE 11
REGISTRATION RIGHTS
11.1 Piggyback Registrations.
(a) Whenever IGI proposes to register any of its securities under the
Securities Act and the registration form to be used may be used for the
registration of Registrable Securities (a "Piggyback Registration"), IGI
will give prompt written notice (in any event within three Business Days
after its receipt of notice of any exercise of demand registration rights
other than under this Agreement) to all holders of Registrable Securities
with respect of the proposed offering at least thirty (30) days before the
initial filing with the SEC of such registration statement, and offer to
include in such filing such Registrable Securities as any such holder may
request. Each such holder of Registrable Securities desiring to have
Registrable Securities registered under this Section 11.1 shall advise IGI
in writing within fifteen (15) days after the date of receipt of
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such notice from IGI, setting forth the amount of such Registrable
Securities for which registration is requested. IGI shall thereupon include
in such filing the number of Registrable Securities for which registration
is so requested, and shall use its best efforts to effect registration
under the Securities Act of such Registrable Securities.
(b) The registration expenses of the holders of Registrable Securities
will be paid by IGI in all Piggyback Registrations to the extent provided
in Section 11.6.
(c) If a Piggyback Registration is an underwritten primary
registration on behalf of IGI, and the managing underwriters advise IGI in
writing that in their opinion the number of securities requested to be
included in such registration exceeds the number which can be sold in an
orderly manner in such offering within a price range acceptable to IGI, IGI
will include in such registration: (i) first, the securities IGI proposes
to sell, (ii) second, the Registrable Securities requested to be included
in such registration, pro rata among the holders of the securities
requested to be included in such registration, provided that no holders of
such securities will have priority for inclusion in such registration over
the holders of the Registrable Securities.
(d) If a Piggyback Registration is an underwritten secondary
registration on behalf of holders of IGI's securities, and the managing
underwriters advise IGI in writing that in their opinion the number of
securities requested to be included in such registration exceeds the number
that can be sold in an orderly manner in such offering within a price range
acceptable to the holders initially requesting such registration, IGI will
include in such registration, the Registrable Securities requested to be
included in such registration, pro rata among the holders of other
securities requested to be included in such registration, provided that no
holders of such securities will have priority for inclusion in such
registration over the holders of the Registrable Securities.
(e) If any Piggyback Registration is an underwritten offering, the
selection of investment banker(s) and manager(s) for the offering must be
approved by the holders of a majority of the Registrable Securities who
request to be included in such Piggyback Registration. Such approval will
not be unreasonably withheld.
(f) If IGI has previously filed a registration statement with respect
to Registrable Securities pursuant to this Section 11.1, and if such
previous registration has not been withdrawn or abandoned, IGI will not
file or cause to be effected any other registration of any of its equity
securities or securities convertible or exchangeable into or exercisable
for its equity securities under the Securities Act (except on Form S-8 or
any successor form), whether on its own behalf or at the request of any
holder or holders of such securities, until a period of at least 180 days
has elapsed from the effective date of such previous registration.
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11.2 Demand Registration Rights.
(a) If, at any time after IGI has filed any registration statement
under the Securities Act or the Securities Exchange Act, except with
respect to registration statements filed on Form S-8 or any successor form,
IGI receives a written request by the holders of a majority of the
Registrable Securities to effect the registration under the Securities Act
of such shares of Common Stock, IGI shall follow the procedures described
in this Section 11.2. Within five (5) days of its receipt of such request,
IGI shall give written notice of such proposed registration (a "Demand
Registration") to all holders of Registrable Securities, and thereupon, IGI
shall, as expeditiously as possible, use its best reasonable efforts to
effect the registration on a form of general use under the Securities Act
of the shares it has been requested to register in such initial request and
in any response to such notice given to IGI within twenty (20) days after
IGI's giving of such notice; provided, however, that IGI shall not be
required to effect a Demand Registration if the value of the Registrable
Securities and the value of all other securities to be included in such
offering are less than $30,000,000 or if two or more Demand Registrations
have been undertaken.
(b) IGI may not be required to effect a registration pursuant to this
Section 11.2 during the first 180 days after the effective date of any
registration statement filed by IGI under Section 11.1 if the holders of
Registrable Securities requesting registration have been afforded the
opportunity to register in such registration all or a majority of their
Registrable Securities.
(c) IGI may include in any registration under this Section 11.2 any
other shares of Common Stock (including issued and outstanding shares of
stock as to which the holders thereof have contracted with IGI for
"piggyback" registration rights) so long as the inclusion in such
registration of such shares will not, in the opinion of the managing
underwriter of the shares of the stockholder or stockholders first
demanding registration (if the offering is underwritten), interfere with
the successful marketing in accordance with the intended method of sale or
other disposition of all the stock sought to be registered by such
demanding stockholder or stockholders pursuant to this Section 11.2.
11.3 S-3 Demand Registration Rights. In addition to the registration rights
provided in Sections 11.1 and 11.2 above, if at any time IGI is eligible to use
SEC Form S-3 (or any successor form) for registration of secondary sales of
Registrable Securities, any holder of Registrable Securities may request in
writing that IGI register shares of Registrable Securities on such form. Upon
receipt of such request, IGI will promptly notify all holders of Registrable
Securities in writing of the receipt of such request and each such Holder may
elect (by written notice sent to IGI within thirty (30) days of receipt of IGI's
notice) to have its Registrable Securities included in such registration
pursuant to this Section 11.3. Thereupon, IGI will, as soon as practicable, use
its best efforts to effect the registration on Form S-3 of all Registrable
Securities that IGI has so been requested to register by such holder for sale.
IGI will use its best efforts to qualify
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and maintain its qualification for eligibility to use Form S-3 for such
purposes. IGI shall not be required to effect more than three registrations
pursuant to this Section 11.3
11.4 Holdback Agreements.
(a) Each holder of Registrable Securities agrees not to effect any
public sale or distribution (including sales pursuant to Rule 144) of
equity securities of IGI, or any securities convertible into or
exchangeable or exercisable for such securities, during the seven days
prior to and the 90-day period (or such longer period, not to exceed 90
additional days, as the managing underwriter shall require) beginning on
the effective date of any underwritten Piggyback Registration in which
Registrable Securities are included or Demand Registration (except as part
of such underwritten registration), unless the underwriters managing the
registered public offering otherwise agree.
(b) IGI agrees (i) not to effect any public sale or distribution of
its equity securities, or any securities convertible into or exchangeable
or exercisable for such securities, during the seven days prior to and
during the 90-day period beginning on the effective date of or any
underwritten Piggyback Registration or Demand Registration (except as part
of such underwritten registration or pursuant to registrations on Form S-8
or any successor form), unless the underwriters managing the registered
public offering otherwise agree, and (ii) to use commercially reasonable
efforts to cause each holder of at least 10% (on a fully-diluted basis) of
its Common Stock, or any securities convertible into or exchangeable or
exercisable for Common Stock, purchased from IGI at any time after the date
of this Agreement (other than in a registered public offering) to agree not
to effect any public sale or distribution (including sales pursuant to Rule
144) of any such securities during such period (except as part of such
underwritten registration, if otherwise permitted), unless the underwriters
managing the registered public offering otherwise agree.
11.5 Registration Procedures. Whenever the holders of Registrable
Securities have requested that any Registrable Securities be registered pursuant
to this Agreement, IGI will use commercially reasonable efforts to effect the
registration and the sale of such Registrable Securities in accordance with the
intended method of disposition thereof (including the registration of Warrants
held by a holder of Registrable Securities requesting registration as to which
IGI has received reasonable assurances that only Registrable Securities will be
distributed to the public), and pursuant thereto IGI will as expeditiously as
possible:
(a) prepare and file with the SEC a registration statement with
respect to such Registrable Securities and use commercially reasonable
efforts to cause such registration statement to become effective (provided
that before filing a registration statement or prospectus or any amendments
or supplements thereto, IGI will furnish to the counsel selected by the
holders of a majority of the Registrable Securities covered by such
registration statement copies of all such
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documents proposed to be filed, which documents will be subject to the
review of such counsel);
(b) furnish to each seller of Registrable Securities such number of
copies of such registration statement, each amendment and supplement
thereto, the prospectus included in such registration statement (including
each preliminary prospectus) and such other documents as such seller may
reasonably request in order to facilitate the disposition of the
Registrable Securities owned by such seller;
(c) use commercially reasonable efforts to register or qualify such
Registrable Securities under such other securities or blue sky laws of such
jurisdictions as any seller of Registrable Securities reasonably requests
and do any and all other acts and things which may be reasonably necessary
or advisable to enable such seller to consummate the disposition in such
jurisdictions of the Registrable Securities owned by such seller (provided
that IGI will not be required to (i) qualify generally to do business in
any jurisdiction where it would not otherwise be required to qualify but
for this subparagraph, (ii) subject itself to taxation in any such
jurisdictions, (iii) consent to general service of process in each such
jurisdiction or (iv) undertake such actions in any jurisdiction other than
the states of the United States of America and the District of Columbia);
(d) notify each seller of such Registrable Securities, at any time
when a prospectus relating thereto is required to be delivered under the
Securities Act, of the happening of any event as a result of which the
prospectus included in such registration statement contains an untrue
statement of a material fact or omits any fact necessary to make the
statements therein, in light of the circumstances in which they were made,
not misleading, and, at the request of any such seller, IGI will prepare a
supplement or amendment to such prospectus so that, as thereafter delivered
to purchasers of such Registrable Securities, such prospectus will not
contain an untrue statement of a material fact or omit to state any fact
necessary to make the statements therein, in light of the circumstances in
which they were made, not misleading;
(e) use commercially reasonable efforts to cause all such Registrable
Securities to be listed on each securities exchange on which similar
securities issued by IGI are then listed and, if not so listed, to be
listed on the NASD automated quotation system and, if listed on the NASD
automated quotation system, use its best efforts to secure designation of
all such Registrable Securities covered by such registration statements as
a NASDAQ "national market system security" within the meaning of Rule
11Aa2-1 of the Securities and Exchange Commission or, failing that, to
secure NASDAQ authorization for such Registrable Securities and, without
limiting the generality of the foregoing, to arrange for at least two
market makers to register as such with respect to such Registrable
Securities with the NASD;
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(f) provide a transfer agent and registrar for all such Registrable
Securities not later than the effective date of such registration
statement;
(g) enter into such customary agreements (including underwriting
agreements in customary form) and take all such other actions as the
holders of a majority of the Registrable Securities being sold or the
underwriters, if any, reasonably request in order to expedite or facilitate
the disposition of such Registrable Securities (including, without
limitation, effecting a stock split or a combination of shares);
(h) make available for inspection by any seller of Registrable
Securities, any underwriter participating in any disposition pursuant to
such registration statement and any attorney, accountant or other agent
retained by any such seller or underwriter, all financial and other
records, pertinent corporate documents and properties of IGI, and cause
IGI's officers, directors, employees and independent accountants to supply
all information reasonably requested by any such seller, underwriter,
attorney, accountant or agent in connection with such registration
statement;
(i) otherwise use commercially reasonable efforts to comply with all
applicable rules and regulations of the SEC, and make available to its
security holders, as soon as reasonably practicable, an earnings statement
covering the period of at least twelve months beginning with the first day
of IGI's first full calendar quarter after the effective date of the
registration statement, which earnings statement shall satisfy the
provisions of Section 11(a) of the Securities Act and Rule 158 thereunder;
(j) permit any holder of Registrable Securities which holder, in its
sole and exclusive judgment, might be deemed to be an underwriter or a
controlling person of IGI, to participate in the preparation of such
registration or comparable statement and to require the insertion therein
of material, furnished to IGI, in writing, which in the reasonable judgment
of such holder and its counsel should be included; and
(k) in the event of the issuance of any stop order suspending the
effectiveness of a registration statement, or of any order suspending or
preventing the use of any related prospectus or suspending the
qualification of any Common Stock included in such registration statement
for sale in any jurisdiction, IGI will use commercially reasonable efforts
promptly to obtain the withdrawal of such order. If any such registration
or comparable statement refers to any holder by name or otherwise as the
holder of any securities of IGI and if in its sole and exclusive judgment
such holder is or might be deemed to be a controlling person of IGI, such
holder shall have the right to require (i) the insertion therein of
language, in form and substance satisfactory to such holder and presented
to IGI in writing, to the effect that the holding by such holder of such
securities is not to be construed as a recommendation by such holder of the
investment quality of IGI's securities covered thereby and that such
holding does not imply that such
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holder will assist in meeting any future financial requirements of IGI,
(ii) in the event that such reference to such holder by name or otherwise
is not required by the Securities Act or any similar federal statute then
in force, the deletion of the reference to such holder; provided that with
respect to this clause (ii) such holder shall furnish to IGI an opinion of
counsel to such effect, which opinion and counsel shall be reasonably
satisfactory to IGI.
11.6 Registration Expenses. All expenses incident to IGI's performance of
or compliance with this Article 11, including without limitation all
registration and filing fees, fees and expenses of compliance with securities or
blue sky laws, printing expenses, messenger and delivery expenses, and fees and
disbursements of counsel for IGI and all independent certified public
accountants, underwriters (excluding discounts and commissions) and other
Persons retained by IGI (all such expenses, excluding underwriting discounts and
commissions, being herein called "Registration Expenses"), will be borne by IGI.
IGI will bear the cost of one set of counsel for the Holders of Registrable
Securities participating in any Piggyback Registration or Demand Registration.
All brokerage fees and underwriting discounts and commissions will be borne by
the seller of the securities sold pursuant to the registration.
11.7 Indemnification.
(a) IGI agrees to indemnify, to the extent permitted by law, each
holder of Registrable Securities, its officers and directors and each
Person who controls such holder (within the meaning of the Securities Act)
against all losses, claims, damages, liabilities and expenses caused by any
untrue or alleged untrue statement of material fact contained in any
registration statement, prospectus or preliminary prospectus or any
amendment thereof or supplement thereto or any omission or alleged omission
of a material fact required to be stated therein or necessary to make the
statements therein not misleading, except insofar as the same are caused by
or contained in any information furnished in writing to IGI by such holder
expressly for use therein or by such holder's failure to deliver a copy of
the registration statement or prospectus or any amendments or supplements
thereto after IGI has furnished such holder with a sufficient number of
copies of the same. In connection with an underwritten offering, IGI will
indemnify such underwriters, their officers and directors and each Person
who controls such underwriters (within the meaning of the Securities Act)
to the same extent as provided above with respect to the indemnification of
the holders of Registrable Securities.
(b) In connection with any registration statement in which a holder of
Registrable Securities is participating, each such holder will furnish to
IGI in writing such information and affidavits as IGI reasonably requests
for use in connection with any such registration statement or prospectus
and, to the extent permitted by law, will indemnify IGI, its directors and
officers and each Person who controls IGI (within the meaning of the
Securities Act) against any losses, claims, damages, liabilities and
expenses resulting from any untrue or alleged untrue statement of material
fact contained in the registration statement,
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prospectus or preliminary prospectus or any amendment thereof or supplement
thereto or any omission or alleged omission of a material fact required to
be stated therein or necessary to make the statements therein not
misleading but only to the extent that such untrue statement or omission is
contained in any information or affidavit so furnished in writing by such
holder;
(c) Any Person entitled to indemnification hereunder will (i) give
prompt written notice to the indemnifying party of any claim with respect
to which it seeks indemnification and (ii) unless in such indemnified
party's reasonable judgment a conflict of interest between such indemnified
and indemnifying parties may exist with respect to such claim, permit such
indemnifying party to assume the defense of such claim with counsel
reasonably satisfactory to the indemnified party. If such defense is
assumed, the indemnifying party will not be subject to any liability for
any settlement made by the indemnified party without its consent (but such
consent will not be unreasonably withheld). An indemnifying party who is
not entitled to, or elects not to, assume the defense of a claim will not
be obligated to pay the fees and expenses of more than one counsel for all
parties indemnified by such indemnifying party with respect to such claim,
unless in the reasonable judgment of any indemnified party a conflict of
interest may exist between such indemnified party and any other of such
indemnified parties with respect to such claim.
(d) The indemnification provided for under this Agreement will remain
in full force and effect regardless of any investigation made by or on
behalf of the indemnified party or any officer, director or controlling
Person of such indemnified party and will survive the transfer of
securities. IGI also agrees to make such provisions, as are reasonably
requested by any indemnified party, for contribution to such party in the
event IGI's indemnification is unavailable for any reason.
11.8 Participation in Underwritten Registrations. No Person may participate
in any registration hereunder which is underwritten unless such Person (a)
agrees to sell such Person's securities on the basis provided in any
underwriting arrangements approved by the Person or Persons entitled hereunder
to approve such arrangements and (b) completes and executes all questionnaires,
powers of attorney, indemnities, underwriting agreements and other documents
required under the terms of such underwriting arrangements; provided that no
holder of Registrable Securities included in any underwritten registration shall
be required to make any representations or warranties to IGI or the underwriters
other than representations and warranties regarding such holder and such
holder's intended method of distribution.
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ARTICLE 12
MISCELLANEOUS
12.1 Successors and Assigns. This Agreement shall be binding upon and inure
to the benefit of the parties hereto and their respective successors and
assigns, except that (i) the Loan Parties may not assign or transfer their
rights hereunder or any interest herein or delegate its duties hereunder without
the prior written consent of Purchaser and (ii) Purchaser shall have the right
to assign its rights hereunder and under the Securities.
12.2 Modifications, Amendments or Waivers. The provisions of this Agreement
may be modified, amended or waived, but only by a written instrument signed by
each of the Loan Parties and Purchaser and to the extent such modification,
amendment or waiver relates to the Notes, the Warrants or the Underlying Shares,
by prior written consent of holders of a majority in aggregate principal amount
of the outstanding Notes or holders of a majority of the Warrants or the
Underlying Shares, as applicable; provided that no such action will change (i)
the rate at which, or the manner in which, interest accrues on the Notes or the
times at which such interest becomes payable, (ii) any provision relating to the
scheduled payments or prepayments of principal on the Notes, or (iii) this
Section 12.2 without the written consent of all holders of Notes.
12.3 No Implied Waivers; Cumulative Remedies; Writing Required. No delay or
failure in exercising any right, power or remedy hereunder shall affect or
operate as a waiver thereof; nor shall any single or partial exercise thereof or
any abandonment or discontinuance of steps to enforce such a right, power or
remedy preclude any further exercise thereof or of any other right, power or
remedy. The rights and remedies hereunder are cumulative and not exclusive of
any rights or remedies which Purchaser or any holder of Notes would otherwise
have. Any waiver, permit, consent or approval of any kind or character of any
breach or default under this Agreement or any such waiver of any provision or
condition of this Agreement must be in writing and shall be effective only to
the extent in such writing specifically set forth.
12.4 Reimbursement of Expenses; Taxes. The Loan Parties upon demand shall
pay or reimburse Purchaser for all fees and expenses incurred or payable by
Purchaser (including, without limitation, reasonable fees and expenses of
special counsel for Purchaser), from time to time (i) arising in connection with
the negotiation, preparation and execution of this Agreement, the Notes, the
other Purchase Documents and all other instruments and documents to be delivered
hereunder or thereunder or arising in connection with the transactions
contemplated hereunder or thereunder, (ii) relating to any amendments, waivers
or consents pursuant to the provisions hereof or thereof, and (iii) arising in
connection with the enforcement of this Agreement or collection of the Notes.
The Loan Parties agree to pay and save Purchaser harmless from all liability for
any stamp, transfer or other similar taxes which may be payable in connection
with this Agreement or the performance of any transactions contemplated hereby
other than in connection with the transfer of any Notes.
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12.5 Holidays. Whenever any payment or action to be made or taken hereunder
or under the Notes shall be stated to be due on a day which is not a Business
Day, such payment or action shall be made or taken on the next following
Business Day, and such extension of time shall be included in computing interest
or fees, if any, in connection with such payment or action.
12.6 Notices. All notices and other communications given to or made upon
any party hereto in connection with this Agreement shall, except as otherwise
expressly herein provided, be in writing (including telecopy, but in such case,
a confirming copy will be sent by another permitted means) and mailed via
certified mail, telecopied or delivered by guaranteed overnight parcel express
service or courier to the respective parties, as follows:
to the Loan Parties:
c/o IGI, Inc.
Xxxxx Xxxx xxx Xxxxxxx Xxxxxx
Xxxxx, XX 00000
Attn: Chairman
Telecopier: (000) 000-0000
with a copy to:
Xxxx and Xxxx LLP
00 Xxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attn: X. Xxxx Xxxxx, Esq.
Xxxx X. Xxxxxxxx, Esq.
Telecopier: (000) 000-0000
to Purchaser:
American Capital Strategies, Ltd.
0 Xxxxxxxx Xxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxxx, Xxxxxxxx 00000
Attn: Chairman
Telecopier: (000) 000-0000
with a copy to:
Xxxxxx & Xxxxxx
000 00xx Xxxxxx, X.X.
Xxxxxxxxxx, X.X. 00000
Attn: Xxxxxx X. Xxxx, Esq.
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Telecopier: (000) 000-0000
or in accordance with any subsequent written direction from the recipient party
to the sending party. All such notices and other communications shall, except as
otherwise expressly herein provided, be effective upon delivery if delivered by
courier or overnight parcel express service; in the case of certified mail,
three (3) Business Days after the date sent; or in the case of telecopy, when
received.
12.7 Survival. All representations, warranties, covenants and agreements of
the Loan Parties contained herein or made in writing in connection herewith
shall survive the execution and delivery of this Agreement and the purchase of
the Notes and the Warrants and shall continue in full force and effect so long
as any Note or Warrant is outstanding and until payment in full of all of the
Loan Parties' obligations hereunder or thereunder.
12.8 Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF MARYLAND, WITHOUT REGARD TO CONFLICT
OF LAWS PRINCIPLES.
12.9 Jurisdiction, Consent to Service of Process.
(a) THE LOAN PARTIES HEREBY IRREVOCABLY AND UNCONDITIONALLY SUBMITS,
FOR THEMSELVES AND THEIR PROPERTY, TO THE NONEXCLUSIVE JURISDICTION OF ANY
MARYLAND STATE COURT OR FEDERAL COURT OF THE UNITED STATES OF AMERICA
SITTING IN THE STATE OF MARYLAND, AND ANY APPELLATE COURT FROM ANY THEREOF,
IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT,
THE NOTES OR ANY OTHER PURCHASE DOCUMENT, OR FOR RECOGNITION OR ENFORCEMENT
OF ANY JUDGMENT, AND EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY AND
UNCONDITIONALLY AGREES THAT, TO THE EXTENT PERMITTED BY APPLICABLE LAW, ALL
CLAIMS IN RESPECT OF ANY SUCH ACTION OR PROCEEDING MAY BE HEARD AND
DETERMINED IN SUCH MARYLAND OR, TO THE EXTENT PERMITTED BY LAW, IN SUCH
FEDERAL COURT. EACH OF THE PARTIES HERETO AGREES THAT A FINAL JUDGMENT IN
ANY SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN
OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED
BY LAW. NOTHING IN THIS AGREEMENT SHALL AFFECT ANY RIGHT THAT PURCHASER MAY
OTHERWISE HAVE TO BRING ANY ACTION OR PROCEEDING RELATING TO THIS
AGREEMENT, THE NOTES OR ANY OTHER PURCHASE DOCUMENT AGAINST THE LOAN
PARTIES OR THEIR PROPERTIES IN THE COURTS OF ANY JURISDICTION.
(b) THE LOAN PARTIES HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE, TO
THE FULLEST EXTENT THEY MAY
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LEGALLY AND EFFECTIVELY DO SO, ANY OBJECTION THAT THEY MAY NOW OR HEREAFTER
HAVE TO THE LAYING OF VENUE OF ANY SUIT, ACTION OR PROCEEDING ARISING OUT
OF OR RELATING TO THIS AGREEMENT, THE NOTES OR ANY OTHER PURCHASE DOCUMENT
IN ANY MARYLAND OR FEDERAL COURT. EACH OF THE PARTIES HERETO HEREBY
IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, THE DEFENSE OF
AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH ACTION OR PROCEEDING IN
ANY SUCH COURT.
(c) EACH PARTY TO THIS AGREEMENT IRREVOCABLY CONSENTS TO SERVICE OF
PROCESS IN THE MANNER PROVIDED FOR NOTICES IN SECTION 12.6 HEREOF. NOTHING
IN THIS AGREEMENT WILL AFFECT THE RIGHT OF ANY PARTY TO THIS AGREEMENT TO
SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW.
12.10 Jury Trial Waiver. THE LOAN PARTIES HEREBY IRREVOCABLY WAIVE ANY
RIGHT TO TRIAL BY JURY IN ANY ACTION OR PROCEEDING (I) TO ENFORCE OR DEFEND ANY
RIGHTS UNDER OR IN CONNECTION WITH THIS AGREEMENT, OR (II) ARISING FROM ANY
DISPUTE OR CONTROVERSY IN CONNECTION WITH OR RELATED TO THIS AGREEMENT AND
AGREES THAT ANY SUCH ACTION OR COUNTERCLAIM SHALL BE TRIED BEFORE A COURT AND
NOT BEFORE A JURY.
12.11 Severability. Whenever possible, each provision of this Agreement
shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held to be prohibited
by or invalid under applicable law in any jurisdiction, such provision shall be
ineffective only to the extent of such prohibition or invalidity, without
invalidating any other provision of this Agreement.
12.12 Headings.
Article, section and subsection headings in this Agreement are included for
convenience of reference only and shall not constitute a part of this Agreement
for any other purpose.
12.13 Confidentiality.
Purchaser agrees that it will keep confidential and will not disclose or
divulge, and will cause its agents and representatives to keep confidential and
not disclose or divulge, any confidential, proprietary or secret information
that the Purchaser or its agents or representatives has obtained from the Loan
Parties pursuant to this Agreement, or pursuant to board, visitation or
inspection rights granted hereunder, and that the Loan Parties have identified
in writing to the Purchaser as confidential, proprietary or secret information;
provided, however, that Purchaser may disclose such information (i) to its
directors, employees and agents and to its auditors, counsel and other
professional advisors in connection with the performance of Purchaser's
obligations hereunder; (ii) at
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the demand or request of any bank regulatory authority, court or other
Governmental Authority having or asserting jurisdiction over Purchaser, as may
be required pursuant to subpoena or other legal process, or otherwise in order
to comply with any applicable requirement of Law; (iii) in connection with any
proceeding to enforce its rights hereunder or under any other Purchase Document
or any other litigation or proceeding related hereto or to which it is a party;
(iv) to the extent the same has become publicly available other than as a result
of a breach of this Agreement; and (v) to any prospective purchaser of any
Securities from Purchaser as long as such prospective purchaser agrees in
writing to be bound by the provisions of this Section 12.13.
12.14 Indemnity. The Loan Parties hereby agree to indemnify, defend and
hold harmless Purchaser and its officers, directors, employees, agents and
representatives, and its respective successors and assigns in connection with
any losses, claims, damages, liabilities and expenses, including reasonable
attorneys' fees, to which Purchaser may become subject (other than as a result
of the gross negligence or willful misconduct of any such Person), insofar as
such losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or by reason of any investigation, litigation or other proceedings
related to or resulting from any act of, or omission by, the Loan Parties or
their Affiliates or any officer, director, employee, agent or representative of
the Loan Parties or their Affiliates with respect to the Transactions, the
Notes, Charter Documents, the Bylaws or any agreements entered into in
connection with any such agreements, instruments or documents and to reimburse
Purchaser and each such Person and Affiliate, upon demand, for any legal or
other expenses incurred in connection with investigating or defending any such
loss, claim, damage, liability, expense or action. To the extent that the
foregoing undertakings may be unenforceable for any reason, the Loan Parties
agree to make the maximum contribution to the payment and satisfaction of
indemnified liabilities set forth in this Section 12.13 which is permissible
under applicable law.
12.15 Environmental Indemnity.
The Loan Parties, and their successors and assigns, hereby release and
discharge, and agree to defend, indemnify and hold harmless, Purchaser and its
Affiliates (including their partners, subsidiaries, customers, guests, and
invitees, and the successors and assigns of all of the foregoing, and their
respective officers, employees and agents) from and against any and all
Environmental Liabilities, whenever and by whomever asserted, to the extent that
such Environmental Liabilities are based upon, or otherwise relate to: (i) any
Condition at any time in, at, on, under, a part of, involving or otherwise
related to the Properties and Facilities (including any of the properties,
materials, articles, products, or other things included in or otherwise a part
of the Properties and Facilities); (ii) any action or failure to act of any
Person, including any prior owner or operator of the Properties and Facilities
(including any of the properties, materials, articles, products, or other things
included in or otherwise a part of the Properties and Facilities), involving or
otherwise related to the Properties and Facilities or operations of the Loan
Parties; (iii) the Management of any Pollutant, material, article or product
(including Management of any material, article or product containing a
Pollutant) in any physical state and at any time, involving or otherwise related
to the Properties and Facilities or any property covered by clause (iv)
(including Management either from the Properties and Facilities or
-58-
63
from any property covered by clause (iv), and Management to, at, involving or
otherwise related to the Properties and Facilities or any property covered by
clause (iv)); (iv) Conditions, and actions or failures to act, in, at, on,
under, a part of, involving or otherwise related to any property other than the
Properties and Facilities, which property was, at or prior to the Closing Date,
(I) acquired, held, sold, owned, operated, leased, managed, or divested by, or
otherwise associated with, (A) the Loan Parties, (B) any of the Loan Parties'
Affiliates, or (C) any predecessor or successor organization of those identified
in (A) or (B); or (II) engaged in any tolling, contract manufacturing or
processing, or other similar activities for, with, or on behalf of the Loan
Parties; (v) any violation of or noncompliance with or the assertion of any Lien
under the Environmental Laws, (vi) the presence of any toxic or hazardous
substances, wastes or contaminants on, at or from the past and present
properties and facilities, including, without limitation, human exposure
thereto; (vii) any spill, release, discharge or emission affecting the past and
present properties and facilities, whether or not the same originates or
emanates from such properties and facilities or any contiguous real estate,
including, without limitation, any loss of value of such properties and
facilities as a result thereof; or (viii) a misrepresentation in any
representation or warranty or breach of or failure to perform any covenant made
by the Loan Parties in this Agreement. This indemnity and agreement to defend
and hold harmless shall survive any termination or satisfaction of the Notes or
the sale, assignment or foreclosure thereof or the sale, transfer or conveyance
of all or part of the past and present properties and facilities or any other
circumstances which might otherwise constitute a legal or equitable release or
discharge, in whole or in part, of the Loan Parties under the Notes.
12.16 Counterparts. This Agreement may be executed in any number of
counterparts and by either party hereto on separate counterparts, each of which,
when so executed and delivered, shall be an original, but all such counterparts
shall together constitute one and the same instrument.
12.17 Integration. This Agreement and the other Purchase Documents set
forth the entire understanding of the parties hereto with respect to all matters
contemplated hereby and supersede all previous agreements and understandings
among them concerning such matters, including without limitation, the Financing
Term Sheet dated August 3, 1999. No statements or agreements, oral or written,
made prior to or at the signing hereof, shall vary, waive or modify the written
terms hereof.
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64
12.18 Subordination. THE OBLIGATIONS EVIDENCED HEREBY ARE SUBORDINATE IN
THE MANNER AND TO THE EXTENT SET FORTH IN THAT CERTAIN SUBORDINATION AGREEMENT
(THE "SUBORDINATION AGREEMENT") DATED AS OF OCTOBER 29, 1999, AMONG FLEET
CAPITAL CORPORATION, PURCHASER, AND THE LOAN PARTIES, TO THE INDEBTEDNESS AND
OTHER LIABILITIES OWED BY THE LOAN PARTIES UNDER AND PURSUANT TO THE SENIOR
CREDIT AGREEMENT AND EACH RELATED "LOAN DOCUMENT" (AS DEFINED THEREIN), AND EACH
HOLDER HEREOF, BY ITS ACCEPTANCE HEREOF, ACKNOWLEDGES AND AGREES TO BE BOUND BY
THE PROVISIONS OF THE SUBORDINATION AGREEMENT.
* * *
-60-
65
SIGNATURE PAGE TO
NOTE AND EQUITY PURCHASE AGREEMENT
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
IGI, INC.
By: /s/ XXXXXX X. XXXXX
Name: XXXXXX X. XXXXX
Title:
IGEN, INC.
By: /s/ XXXXXX X. XXXXX
Name: XXXXXX X. XXXXX
Title:
IMMUNOGENETICS, INC.
By: /s/ XXXXXX X. XXXXX
Name: XXXXXX X. XXXXX
Title:
BLOOD CELLS, INC.
By: /s/ XXXXXX X. XXXXX
Name: XXXXXX X. XXXXX
Title:
-61-
66
SIGNATURE PAGE TO
NOTE AND EQUITY PURCHASE AGREEMENT
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
AMERICAN CAPITAL STRATEGIES,
LTD.
By: /s/ XXXX XXXXXXXX
_____________________________
Name: XXXX XXXXXXXX
Title: CFO
-62-
67
ANNEX
Annex A Purchaser Information
SCHEDULES
"Outstanding Options and Warrants Schedule (Section 5.1(d))
"Subsidiaries Schedule" (Section 5.1(e))
"Litigation Schedule" (Section 5.1(i))
"Pending or Threatened Actions Schedule" (Section 5.1(j)(Part I))
"Management Information Schedule" (Section 5.1(j)(Part II)
"Environmental Schedule" (Section 5.1(l))
"Properties Schedule" (Section 5.1(q))
"Intellectual Properties Schedule" (Section 5.1(r))
"Permitted Encumbrances Schedule" (Section 7.2(b)(iv))
"Investments Schedule" (Section 7.2(i)(xi))
EXHIBITS
EXHIBIT A Form of Series A Senior Note
EXHIBIT A-1 Form of Series B Senior Note (the Georgia Note)
EXHIBIT B Form of Warrant
EXHIBIT C Form of Security Agreement
EXHIBIT D Form of Collateral Assignment
EXHIBIT E Form of Mortgage
EXHIBIT F Form of Compliance Certificate
-63-
68
ANNEX A
INFORMATION RELATING TO PURCHASER
Principal Amount of
Name and Address of Purchaser Notes to be Purchased
AMERICAN CAPITAL STRATEGIES, LTD. Notes $7,000,000
0 Xxxxxxxx Xxxxx Xxxxxx
00xx Xxxxx
Xxxxxxxx, XX 00000
(1) All payments:
If by wire:
Account Name: American Capital Strategies, Ltd.
Account No.: 00000000
Bank: Xxxxx Bank, N.A.,
Washington, DC
ABA #: 000000000
If by mail: Commercial Loan Processing RN-308
Xxxxx Bank, N.A.
0000 Xxxxxxxxx Xxxxx
Xxxxxxxxx, XX 00000
Attn: Xxxxx Drum
with sufficient information to identify the source and
application of such funds.
(2) All notices of payments and written confirmations of such wire
transfers:
American Capital Strategies, Ltd.
0 Xxxxxxxx Xxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxxx, Xxxxxxxx 00000
Attn: Chairman
Telecopier: (000) 000-0000
(3) All other communications:
American Capital Strategies, Ltd.
0 Xxxxxxxx Xxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxxx, Xxxxxxxx 00000
Attn: Chairman
Telecopier: (000) 000-0000
69
SCHEDULE 5.1(d)
OUTSTANDING WARRANTS
Fleet Bank Warrants
Mellon Bank Warrants
70
SCHEDULE 5.1(e)
SUBSIDIARIES SCHEDULE
IGEN, INC.
Xxxxx Xxxx xxx Xxxxxxx Xxxxxx
Xxxxx, Xxx Xxxxxx 00000
IMMUNOGENETICS, INC.
Xxxxx Xxxx xxx Xxxxxxx Xxxxxx
Xxxxx, Xxx Xxxxxx 00000
MARKETING ASPECTS, INC.
Xxxxx Xxxx xxx Xxxxxxx Xxxxxx
Xxxxx, Xxx Xxxxxx 00000
BLOOD CELLS, INC.
Xxxxx Xxxx xxx Xxxxxxx Xxxxxx
Xxxxx, Xxx Xxxxxx 00000
FLAVORSOME, LTD.
Xxxxx Xxxx xxx Xxxxxxx Xxxxxx
Xxxxx, Xxx Xxxxxx 00000
VISTA INTERNATIONAL
000 Xxxxxxxx Xxxxxxxx
Xxxxxxxx Xxxxx
Xxxxxxxxx Amalie, St. Xxxxxx, US Virgin Islands
MICROBURST ENERGY, INC.
Xxxxx Xxxx xxx Xxxxxxx Xxxxxx
Xxxxx, Xxx Xxxxxx 00000
IGI DO BRASIL
A Brazil corporation
Rua Xxxxx xx Xxxxxxx 636
05404-0000 Sao Paulo
SP Brazil
71
SCHEDULE 5.1(i)
LITIGATION SCHEDULE
72
SECTION 5.1(j)(Part I)
PENDING OR THREATENED ACTIONS SCHEDULE
[STATUS OF INFORMAL SEC INVESTIGATION]
SECTION 5.1(j)(part II)
MANAGEMENT INFORMATION SCHEDULE
73
SCHEDULE 5.1 (l)
ENVIRONMENTAL SCHEDULE
74
SCHEDULE 5.1 (q)
PROPERTIES SCHEDULE
OWNED PROPERTIES:
IGI, Inc. Xxxxx Xxxx & Xxxxxxx Xxx. Xxxxx, XX 00000
Vineland Laboratories 0000 Xxxx Xxxxxx Xxxxxx Xxxxxxxx, XX 00000
Evsco Pharmaceuticals 000 Xxxxxxx Xxxxxxx Xxxxx, XX 00000
Gainesville Warehouse 0000 Xxxxxxx Xxxxxxx Xxxxxxxxxxx, XX 00000
Grant Avenue Property 000 Xxxx Xxxxx Xxxxxx Xxxxxxxx, XX 00000
LEASED PROPERTIES:
Arkansas Warehouse 0000 Xxxxxx Xxxx Xxxxxxxxxx, XX 00000
Fresno Warehouse 0000 Xxxx Xxxxxx Xxx Xxxxxx, XX 00000
Mississippi Warehouse Box 000 Xxx 00 Xxxxx Xxxxxx, XX 00000
Delmarva Warehouse Xx. 0, Xxxxxxx Xxxx Xxxxxx, XX 00000
Xxxx Xxxxxx Warehouse Xx. 00, Xxx 0000 Xxxxxxxxxxx, XX 00000
Xxxxxxxx Transfer 00 XxXxxx Xxxxxx Xxxxxxxx, XX 00000
75
SCHEDULE 5.1.(r)
INTELLECTUAL PROPERTIES SCHEDULE
XXX.XX./TITLE CTY STATUS XXX.XX./APP.DT. XXX.XX./XXX.XX
------------- ------ --------------- --------------
XXX-0000XX Xxxxxx G 93/478240 28JL99 93478240 28JLI993
Novasome
XXX-0000 XXX G 73/451453 07NO1983 1305699 20NO1984
Biocaine
XXX-0000 XXX G 366721 27MY1982 1357555 03SE1985
Protecta-Pad
IMH-0068 USA G 73/366720 27MY1982 1357555 11JE1985
Nik Stop
XXX-0000 XXX G 366725 27MY1982 1315317 22JA1985
Metox
IMH-0070 USA G 73/366724 27MY1982 1312930 08JA1985
Xxxxx Gleem
XXX-0000 XXXXX G 1681660 15FE1989 1407461 300C1992
Chick Sino Vac
IMH-0075DE GERW G E22059/31WZ 02MR1981 1030553 02MR1991
Felovite
IMH-0076DE GERW G E22060/31WZ 02MR1981 1042612 02MR1981
Nutri-Cal
IMH-008LJP JAPAN G 02-140371 19DE1990 2510817 26FE1993
Vineland
IMH_0092JP JAPAN G 03-019923 01MR1991 252897 28AP1993
Vineland
XXX-0000XX XXXXXX G N/A 28FE1990 234192 28FE1990
Laxatone
XXX-0000XX XXXXXX G 281928 22AP1991 1657245 22AP1991
Nutrical
XXX-0000 XXXX G 73650 19JA1988
Vi Bursa L
IMH-0115 USA G 369673 02SE1970 922226 190C1971
Liquichlor
XXX-0000 XXX G 369672 02SE1970 921031 28SE1971
Xxxxx
00
XXX.XX./XXXXX XXX STATUS XXX.XX./XXX.XX. XXX.XX./REG.DT
------------- ------ --------------- --------------
EM-0 I 19DE GERW G E22947/5WZ 14MY1982 1068608 14MY1982
Evsco
XXX-0000 XXXX G 73614 28FE1988
Vineland
IMH-0141 USA G 401950 03SE1971 945096 170C1972
Chlorasone
IMH-0161 USA G 72/414312 02FE1972 955587 20MR1973
Felovite
IMH-0164 USA G 72/414317 02FE1972 955590 29NIR1973
Methigel
IMH-0166 USA G 72/414323 02FE1972 955593 20MR1973
Optisone
IMH-0169 USA G 614736 14AU1986 1461618 20OC1987
Puppyvite
XXX-0000XX XXXXX G 1681653 15FE1989 1385048 31DE1991
Chick Uni Hol
IMH-0177 USA G 72/414314 02FE1972 953409 20FE1973
Sect-A-Spray
IMH-0179 USA G 72/404408 06OC1972 962127 26JE1973
Medicollar
IMH-0180 USA G 72/414326 02FE1972 96108 26JE1973
Nutri-Cal
IMH-181TR TRIN G 11366 05JE1979 11366 05JE1979
Vineland
XXX-0000 XXXX G 112756 15FE1993 112756 00XX0000
Xxxxxxxxxx
XXX-0000 XXXX X 112755 15FE1993 112755 15FE1993
Liquichlor
XXX-0000 XXXX G 112758 15FE1993 112758 15FE1993
Cardoxin
XXX-0000 XXXX G 112744 12FE1993 112744 12FE1993
Chloricol
XXX-0000 XXXX G 112743 12FE1993 112743 12FE1 993
Cerumite
XXX-0000 XXXX G 112750 12FE1993 112750 12FE1993
Allerspray
77
XXX.XX./TITLE CTY STATUS XXX.XX./APP.DT. XXX.XX./XXX.XX
------------- ------ --------------- --------------
XXX-0000 XXXX G 112757 15FE1993 112757 15FE1993
Micro Pearls
IMH-0200 HONG G 08091/93 03AU1993 08609/95 03AU1993
Tomlyn Products
IMH-0202 SING G S/3772/86 26AU1986 S/3772/86 26AU1986
Vineland
XXX-0000 XXX G 414330 02FE1972 970167 090C1973
Fecalyzer
IMH-0217 CANA G 271801 050C1962 133688 00XX0000
Xxxxxxxx
XXX-0000 XXXXX G 05-078050 27JI1993 3173074 28JE1996
Evsco
IMH-0220 JAPAN G M05-078052 27JLI993 3173075 28JE1996
Laxatone
IMH-0231 HONG G 08092/93 03AU1993 07756/1995 03AU1993
Evsco
IMH-0234 BENE G 800217 12JL1993 536808 12JL1993
Evsco
IMH-0235 BENE G 800219 12JL1993 536810 12JL1993
Nutri-Cal
IMH-0236 BENE G 800218 12JL1993 536809 12JL1993
Laxatone
XXX-0000 XXXXXX G 93/482072 01SE1993 93482072 01SE1993
Evsco
XXX-0000 XXX G 72/414321 02FE1972 980694 19MR1974
Groom-Aid
IMH-0252 COST G No serial no. 290C1993 89.853 09JA1995
Evsco
IMH-0253 COST G No serial no. 290C1993 86.663 19AP1994
Nutri-Cal
XXX-0000 XXX G 450536 05MR1973 981854 09AP1974
Vi Uni Bronc
IMH-0255 USA G 450538 05MR1973 982200 16AP1974
Vi Banco
XXX-0000 XXX G 450537 05MR1973 982458 23AP1974
Vi So Bronc
78
XXX.XX./TITLE CTY STATUS XXX.XX./XXX.XX. XXX.XX./REG.DT
------------- ------ --------------- --------------
IMH-0257 BENE G 803985 29SE1993 540728 29SE1993
Micro Pearls
IMH-0258 BENE G 803986 29SE1993 544156 29SE1993
Novasome
IMH-0272 HONG G 1086/79 24MY1979 B1360/1982 24MY1979
Vineland
MM-0283 CANA G 232769 20AP1979
Laxatone
IMH-0284 ATRA G AM1222/94 15MR1994 152849 31MY1994
Evsco
IMH-0285 VIET G N-1659/94 19MY1994 15183 19MY1994
Vineland
IMH-0307 IREL G 94/6643 03NO1994 165407 03NO1994
Evsco
IMH-0376 COLO G 140974 04JE1993
Vi Xxxx FD
IMH-0377 COLO G 167911 28SE1994
Vi Clemcol C
IMH-0378 COLO G 297534 26JAI989 200.013 30MR1994
Vi Bursa K
IMH-0381 COLO G N/A 167185 26AU1994
Chick Syno Vac
IMH-0382 COST G 73049 02OC1990
Vineland
IMH-0361 USA G 08n72354 23DE1996 5776536 07JLI998
Reduced Fat Chocolate
and Method of Manufacture
IMH-0374 USA G 08/838633 11AP1997 5756014 26MY1998
Heat Resistant Lipid
Vesicles
XXX-0000XX XXX X XXX/XX00/00000 IOAP1998
Heat Resistant Lipid
Vesicles
IMH-0386 USA F 09/165436 02OC1998
Glucoside Paucilamellar
Vesicles
IMH-0390 USA F 09/252546 19FE1999
Lipid Vesicle-Based Fuel
Additives and Liquid Energy
Sources Containing Same
79
SCHEDULE 7.2 (b) (iv)
PERMITTED ENCUMBRANCES SCHEDULE
[GLAXO LIEN ON WELLSKIN TRADEMARK, ACCOUNTS, INVENTORY, ETC.]
80
SCHEDULE 7.2(i)(xi)
INVESTMENTS SCHEDULE
81
EXHIBIT A
THE OBLIGATIONS EVIDENCED HEREBY ARE SUBORDINATE IN THE MANNER AND TO THE EXTENT
SET FORTH IN THAT CERTAIN SUBORDINATION AGREEMENT (THE "SUBORDINATION
AGREEMENT") DATED AS OF OCTOBER 29, 1999, AMONG FLEET CAPITAL CORPORATION,
AMERICAN CAPITAL STRATEGIES, LTD., IGI, INC., IGEN, INC., IMMUNOGENETICS, INC.,
AND BLOOD CELLS, INC., TO THE INDEBTEDNESS AND OTHER LIABILITIES OWED BY IGI,
INC., IGEN, INC., IMMUNOGENETICS, INC., AND BLOOD CELLS, INC. UNDER AND PURSUANT
TO THE LOAN AND SECURITY AGREEMENT DATED AS OF OCTOBER 29, 1999, AND EACH
RELATED "LOAN DOCUMENT" (AS DEFINED THEREIN), AND EACH HOLDER HEREOF, BY ITS
ACCEPTANCE HEREOF, ACKNOWLEDGES AND AGREES TO BE BOUND BY THE PROVISIONS OF THE
SUBORDINATION AGREEMENT.
IGI, INC., IGEN, INC., IMMUNOGENETICS, INC., AND BLOOD CELLS, INC.
SERIES A SENIOR SUBORDINATED NOTE DUE SEPTEMBER 30, 2006
No. SSN - 1 October 29, 1999
$6,650,000
FOR VALUE RECEIVED, the undersigned IGI, INC., a Delaware corporation,
("IGI"), IGEN, INC., a Delaware corporation ("Igen"), IMMUNOGENETICS, INC., a
Delaware corporation, ("ImmunoGenetics"), and BLOOD CELLS, INC., a Delaware
corporation ("Blood Cells") (IGI, Igen, ImmunoGenetics and Blood Cells are
referred to herein as the "Loan Parties"), hereby promise to pay to AMERICAN
CAPITAL STRATEGIES, LTD., or registered assigns (the "Holder"), the principal
sum of SIX MILLION SIX HUNDRED FIFTY THOUSAND DOLLARS ($6,650,000), with
interest thereon, on the terms and conditions set forth in the Purchase
Agreement (as defined herein).
Payments of principal of, interest on and any premium with respect to
this Note are to be made in lawful money of the United States of America by
check mailed and addressed to the registered Holder hereof at the address shown
in the register maintained by the Loan Parties for such purpose, or, at the
option of the Holder, in such manner and at such other place in the United
States of America as the Holder hereof shall have designated to the Loan Parties
in writing.
Notwithstanding any provision to the contrary in this Note, the
Purchase Agreement or any other agreement, the Loan Parties shall not be
required to pay, and the Holder shall not be permitted to contract for, take,
reserve, charge or receive, any compensation which constitutes interest under
applicable law in excess of the maximum amount of interest permitted by law.
This Note is one of a series of Series A Senior Subordinated Notes Due
September 30, 2006 (herein called the "Notes") issued pursuant to the Note and
Equity Purchase Agreement, dated as of October 29, 1999 (as from time to time
amended, the
82
"Purchase Agreement"), between the Loan Parties and American Capital Strategies,
Ltd., a corporation organized and existing under the laws of the State of
Delaware, and is entitled to the benefits thereof. All terms used herein shall
have the meanings ascribed to them in the Purchase Agreement. Each Holder of
this Note will be deemed, by its acceptance hereof, to have agreed to the
provisions and to have made the representations and warranties set forth in
Article 6 of the Purchase Agreement.
The Notes are issuable as registered notes. This Note is transferable
only by surrender hereof at the principal office of the Loan Parties at Wheat
Road and Lincoln Avenue, Buena (Atlantic County), New Jersey, duly endorsed or
accompanied by a written instrument of transfer duly executed by the registered
Holder of this Note.
This Note is also subject to optional prepayment, in whole or in part
at the times and on the terms specified in the Purchase Agreement, but not
otherwise.
If an Event of Default as defined in the Purchase Agreement occurs and
is continuing, the unpaid principal of this Note may be declared or otherwise
become due and payable in the manner, at the price (including any applicable
premium) and with the effect provided in the Purchase Agreement.
Payments of principal, interest on and any premium with respect to this
Note are secured pursuant to the terms of the Security Documents.
This Note and the rights and obligations of the parties hereto shall be
deemed to be contracts under the laws of the State of Maryland and for all
purposes shall be governed by and construed and enforced in accordance with the
laws of said State, except for its rules relating to the conflict of laws.
IGI, INC.
By: /s/ XXXXXXX XXXXXXXXX
____________________________________
Name: XXXXXXX XXXXXXXXX
Title: CFO
IGEN, INC.
By: /s/ XXXXXXX XXXXXXXXX
____________________________________
Name: XXXXXXX XXXXXXXXX
Title: CFO
- 2 -
83
IMMUNOGENETICS, INC.
By:
------------------------------------
Name:
Title:
BLOOD CELLS, INC.
By:
------------------------------------
Name:
Title:
- 3 -
84
EXHIBIT A-1
THE OBLIGATIONS EVIDENCED HEREBY ARE SUBORDINATE IN THE MANNER AND TO THE EXTENT
SET FORTH IN THAT CERTAIN SUBORDINATION AGREEMENT (THE "SUBORDINATION
AGREEMENT") DATED AS OF OCTOBER 29, 1999, AMONG FLEET CAPITAL CORPORATION,
AMERICAN CAPITAL STRATEGIES, LTD., IGI, INC., IGEN, INC., IMMUNOGENETICS, INC.,
AND BLOOD CELLS, INC., TO THE INDEBTEDNESS AND OTHER LIABILITIES OWED BY IGI,
INC., IGEN, INC., IMMUNOGENETICS, INC., AND BLOOD CELLS, INC. UNDER AND
PURSUANT TO THE LOAN AND SECURITY AGREEMENT DATED AS OF OCTOBER 29, 1999, AND
EACH RELATED "LOAN DOCUMENT" (AS DEFINED THEREIN), AND EACH HOLDER HEREOF, BY
ITS ACCEPTANCE HEREOF, ACKNOWLEDGES AND AGREES TO BE BOUND BY THE PROVISIONS OF
THE SUBORDINATION AGREEMENT.
IGI, INC., igen, inc., immunogenetics, inc., and blood cells, inc.
SERIES B SENIOR SUBORDINATED NOTE DUE SEPTEMBER 30, 2006
No. SSN - 1 October 29, 1999
$350,000
FOR VALUE RECEIVED, the undersigned IGI, INC., a Delaware corporation,
("IGI"), IGEN, INC., a Delaware corporation ("Igen"), IMMUNOGENETICS, INC., a
Delaware corporation, ("ImmunoGenetics"), and BLOOD CELLS, INC., a Delaware
corporation ("Blood Cells") (IGI, Igen, ImmunoGenetics and Blood Cells are
referred to herein as the "Loan Parties"), hereby promise to pay to AMERICAN
CAPITAL STRATEGIES, LTD., or registered assigns (the "Holder"), the principal
sum of THREE HUNDRED FIFTY THOUSAND DOLLARS ($350,000), with interest thereon,
on the terms and conditions set forth in the Purchase Agreement (as defined
herein).
Payments of principal of, interest on and any premium with respect to
this Georgia Note are to be made in lawful money of the United States of America
by check mailed and addressed to the registered Holder hereof at the address
shown in the register maintained by the Loan Parties for such purpose, or, at
the option of the Holder, in such manner and at such other place in the United
States of America as the Holder hereof shall have designated to the Loan Parties
in writing.
Notwithstanding any provision to the contrary in this Georgia Note, the
Purchase Agreement or any other agreement, the Loan Parties shall not be
required to pay, and the Holder shall not be permitted to contract for, take,
reserve, charge or receive, any compensation which constitutes interest under
applicable law in excess of the maximum amount of interest permitted by law.
This Georgia Note is one of a series of Series B Senior Subordinated
Notes Due September 30, 2006 (herein called the "Georgia Notes") issued pursuant
to the Note and
- 4 -
85
Equity Purchase Agreement, dated as of October 29, 1999 (as from time to time
amended, the "Purchase Agreement"), between the Loan Parties and American
Capital Strategies, Ltd., a corporation organized and existing under the laws of
the State of Delaware, and is entitled to the benefits thereof. All terms used
herein shall have the meanings ascribed to them in the Purchase Agreement. Each
Holder of this Georgia Note will be deemed, by its acceptance hereof, to have
agreed to the provisions and to have made the representations and warranties set
forth in Article 6 of the Purchase Agreement.
The Georgia Notes are issuable as registered notes. This Georgia Note
is transferable only by surrender hereof at the principal office of the Loan
Parties at Wheat Road and Lincoln Avenue, Buena (Atlantic County), New Jersey,
duly endorsed or accompanied by a written instrument of transfer duly executed
by the registered Holder of this Georgia Note.
This Georgia Note is also subject to optional prepayment, in whole or
in part at the times and on the terms specified in the Purchase Agreement, but
not otherwise.
If an Event of Default as defined in the Purchase Agreement occurs and
is continuing, the unpaid principal of this Georgia Note may be declared or
otherwise become due and payable in the manner, at the price (including any
applicable premium) and with the effect provided in the Purchase Agreement.
Payments of principal, interest on and any premium with respect to this
Georgia Note are secured pursuant to the terms of the Security Documents.
This Note and the rights and obligations of the parties hereto shall be
deemed to be contracts under the laws of the State of Maryland and for all
purposes shall be governed by and construed and enforced in accordance with the
laws of said State, except for its rules relating to the conflict of laws.
IGI, INC.
By:
------------------------------------
Name:
Title:
IGEN, INC.
By:
------------------------------------
Name:
Title:
- 5 -
86
IMMUNOGENETICS, INC.
By:
____________________________________
Name:
Title:
BLOOD CELLS, INC.
By:
____________________________________
Name:
Title:
- 6 -
