Exhibit 10.77
AMENDMENT NO. 5
TO THE
NOTE AND EQUITY PURCHASE AGREEMENT
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Among
IGI, INC., IGEN, INC., IMMUNOGENETICS, INC.
AND BLOOD CELLS, INC.
and
AMERICAN CAPITAL STRATEGIES, LTD.
Amendment No. 5 Dated: May 30, 2002
Date of Amendment No. 4: February 28, 2001
Date of Amendment No. 3: September 30, 2000
Date of Amendment No. 2: June 26, 2000
Date of Amendment No. 1: March 30, 2000
Original Date: October 29, 1999
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AMENDMENT NO. 5
TO THE
NOTE AND EQUITY PURCHASE AGREEMENT
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THIS AMENDMENT NO. 5 TO NOTE AND EQUITY PURCHASE AGREEMENT (this
"Amendment"), entered into as of May 30, 2002, is by and among 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") and ACAS BUSINESS LOAN TRUST 2002-1, a Delaware
business trust ("ABT" and collectively with ACAS, the "Purchaser").
RECITALS
A. The Loan Parties and ACAS entered into a Note and Equity Purchase
Agreement, dated as of October 29, 1999, as amended by a certain Amendment
No. 1 to Note and Equity Purchase Agreement dated as of March 30, 2000, a
certain Amendment No. 2 to Note and Equity Purchase Agreement dated as of
June 26, 2000, and a certain Amendment No. 3 to Note and Equity Purchase
Agreement dated as of September 30, 2000, and an Amendment No. 4 to the
Note and Equity Purchase Agreement dated as of February 28, 2001 (as
amended, the "Agreement"), pursuant to which ACAS purchased (i) from the
Loan Parties certain Series A and Series B Senior Subordinated Notes Due
September 30, 2006 and (ii) a warrant for the purchase of 1,907,543 shares
(as adjusted from time to time in accordance with the terms thereof) of the
Common Stock of IGI.
B. As of even date herewith, the Loan Parties are paying off in full the
Notes and the Loan Parties and Purchaser desire to make certain amendments
to the Agreement in connection with certain ongoing rights and obligations
of the Loan Parties.
C. Capitalized terms used herein and not otherwise defined shall have
the meaning assigned to such term as set forth in the 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:
ARTICLE 1
THE AMENDMENT AND CONSENT
Effective upon the satisfaction of the conditions set forth in
Section 2.1 herein, the Agreement shall be deemed to be amended and
Purchaser shall be deemed to have agreed as set forth in this Article 1.
1.1 Amendment to Section 1.1, Definitions. Section 1.1 of the
Agreement is hereby amended as follows:
(a) The definitions of the following terms are amended and restated
in their entirety as follows:
"Business" shall mean the businesses primarily engaged in
by the Loan Parties of (i) producing and marketing cosmetics and
skin care products, and (ii) developing commercial applications
for micro-encapsulation and compatible or related technologies.
"Financing Statements" shall have the meaning assigned to
such term in Section 4.1(e) hereof, as such may be amended,
modified and/or in effect from time to time.
"Mortgage" shall have the meaning assigned to such term in
Section 4.1(f) hereof, as such may be amended, modified and/or in
effect from time to time.
"Purchase Documents" mean this Agreement, the Warrant, the
Security Agreement, the Mortgage and the Financing Statements, as
such may be amended, modified and/or in effect for time to time.
"Security Agreement" shall have the meaning assigned to
such term in Section 4.1(e) hereof, as such may be amended,
modified and/or in effect from time to time.
"Security Documents" shall mean the Security Agreement, the
Financing Statements, the Mortgage and all other documents,
instruments and other materials necessary to create or perfect
the security interests created thereby.
"Shares" shall mean all shares of Common Stock of IGI
received by ACAS upon the exercise of the Warrant or issued
pursuant to Section 9.1 hereof.
"Shelf Registration Statement" shall mean the shelf
registration statement or registration statements filed by IGI
with the SEC with respect to resales of the Shares.
(b) The definition of the following term shall be inserted into
Section 1.1 of the Agreement in appropriate alphabetical order:
"Specified Assets" shall mean all accounts, equipment,
inventory, fixtures, and the proceeds thereof (as each such term
is defined in the UCC) and all real estate and improvements
thereon of the Loan Parties other than the real estate and
improvements and fixtures and equipment located at ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇, provided however, that on or
after May 31, 2005, the accounts and inventory of the Loan
Parties shall not be considered to be Specified Assets and on or
after May 31, 2009, there shall be no Specified Assets.
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(c) The definitions of the following terms are hereby deleted from
Section 1.1 of the Agreement: "Collateral Assignment," "Life Insurance,"
and "Pledge Agreement."
1.2 Amendment to Section 7.1. Section 7.1 of the Agreement is
hereby amended as follows:
(a) Sections 7.1(e)(iii), (g) and (j) are hereby deleted in their
entirety.
(b) Section 7.1(f) is hereby amended such that the preamble thereof
is replaced with the following: "Give Purchaser prompt written notice of
any of the following, but only to the extent that such directly relates to
any of the Specified Assets:"
1.3 Amendment to Section 7.2. Section 7.2 of the Agreement is
hereby deleted in its entirety and replaced with the following:
7.2 Negative Covenants. The Loan Parties covenant that, so
long as the Loan Parties shall have any obligations under this Agreement
including, without limitation, Article 9 herein:
(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 Indebtedness that is not secured by any of the Specified
Assets.
(b) Negative Pledge; Liens. The Loan Parties shall not
create, incur, assume or suffer to exist any Lien of any kind
on any of the Specified Assets, except the following
(collectively, "Permitted Liens"):
(i) Liens in favor of the Purchaser;
(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;
and
(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)
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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.
(c) Limitation on Proprietary Rights. None of the Loan
Parties shall sell, assign, convey, transfer or otherwise
dispose of any of their respective Proprietary Rights;
provided, that granting, amending or modifying licenses for
Proprietary Rights in the ordinary course of the Loan Parties'
businesses shall not be a violation of this provision.
(d) No Prohibition on Sale of Obsolete Equipment.
Notwithstanding anything contained in this Agreement, and/or
the Security Agreement to the contrary, the Loan Parties shall
not be prohibited from selling, conveying, transferring and/or
otherwise exchanging any or all equipment that is a Specified
Asset, if the proceeds therefrom are used solely for the
purpose of acquiring new equipment to replace and/or upgrade
such prior existing equipment due to obsolescence and/or to
increase efficiency, productivity and/or profitability of the
Loan Parties, and Purchaser hereby consents to any such sale,
conveyance, transfer and/or other exchange provided for
hereunder.
1.4 Amendment to Section 8.1. Section 8.1 of the Agreement is
hereby amended by deleting paragraphs 8.1(i) and (l) thereof.
1.5 Amendment to Section 9.2. Section 9.2 of the Agreement is
hereby deleted in its entirety and replaced with the following:
9.2 Covenant to Maintain Shelf Registration Statement. At
all times, IGI shall takes such steps as are necessary (a) so
that the number of shares of Common Stock registered under the
Shelf Registration Statement is not less than the total number of
Shares and (b) so that the Shelf Registration Statement is
continuously effective under the Securities Act until the earlier
of (i) the date on which the Shares may be sold pursuant to
paragraph (k) of Rule 144 (or any successor provision)
promulgated by the SEC under the Securities Act and (ii) the date
as of which the Shares have been sold pursuant to the Shelf
Registration Statement.
1.6 Addition to Section 11.9. The following Section 11.9 is added
to the Agreement immediately following Section 11.8:
11.9. Limitation on Rights. Notwithstanding anything to the
contrary in this Article 11, all rights of the Purchaser under this
Article 11 shall be effective if and only to the extent that a Shelf
Registration
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Statement as provided for by the terms of this
Agreement is not then in effect with regard to all Shares.
1.7 Amendment to Section 12.4. Section 12.4 of the Agreement is
hereby amended to insert the following sentence immediately subsequent to
the text thereof as it appears in the Agreement:
Notwithstanding the foregoing, it is expressly acknowledged
and agreed by Purchaser that as long as there is no Default or Event
of Default hereunder, the Loan Parties shall not under this Section
12.4 and/or otherwise be responsible for any costs and/or expenses
incurred by the Purchaser in exercising any rights it may have under
the Warrant and/or Section 9.1 of this Agreement, and/or otherwise
relating to any transaction by the Purchaser with respect to the
acquisition, purchase, sale, transfer and/or other conveyance of the
Shares, including without limitation, attorneys fees, SEC filing
fees, private placement fees, accounting fees and/or other financial
services fees; provided, that this sentence shall not apply with
regard to the Loan Parties' responsibilities, if any, under
Section 11.6.
1.8 Amendment to Section 12.17. Section 12.17 of the Agreement is
hereby amended and restated in its entirety as follows:
12.17. Integration. This Agreement and the other Purchase
Documents, as amended and in effect from time to time, 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 the or the
signing hereof, shall vary, waive or modify the written terms hereof.
1.9 Release of Certain Liens. Purchaser shall be deemed to have
released and reassigned to the respective Loan Parties, without
representation, warranty or recourse of any kind, all of Purchaser's rights
under the Collateral Assignment, the Life Insurance, the Pledge Agreement
and any other document or instrument creating a security interest in any
and/or all assets of the Loan Parties other than the Specified Assets. In
furtherance thereof, Purchaser shall execute such additional instruments
and documents and take such other actions as Loan Parties may reasonably
request in order to implement the intents and purposes of this Section 1.9;
provided, however, that the Loan Parties shall reimburse Purchaser for
and/or otherwise pay all costs associated therewith and shall provide such
indemnifications with regard thereto as Purchaser may reasonably request.
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ARTICLE 2
CONDITIONS TO EFFECTIVENESS
2.1 Conditions to the Effectiveness of this Amendment. This
Amendment shall be effective upon satisfaction of the conditions set forth
below:
(a) The Loan Parties shall have paid in full the Notes including
all interest, premium and other amounts due thereunder and all amounts due
Purchaser under Section 12.4 of the Agreement;
(b) The Loan Parties shall have delivered to Purchaser an amended
and restated Security Agreement in form and substance reasonably acceptable
to Purchaser; and
(c) The Loan Parties shall have delivered to Purchaser certified
copies of the resolutions duly adopted by each of the Loan Parties'
respective board of directors authorizing the execution, delivery and
performance by such Loan Party of this Amendment and any other agreement,
instrument and document contemplated hereby and the consummation of
transactions contemplated herein; and
Any condition specified in this Section 2.1 may be waived by the
Purchasers; provided, however, that no such waiver will be effective
against the Purchasers unless it is set forth in a writing executed by the
Purchasers.
ARTICLE 3
REFERENCE TO AND EFFECT ON THE AGREEMENT
3.1 References. On and after the date hereof, (i) each reference
in the Agreement to "this Agreement," "hereunder," "hereof," "herein," or
words of like import shall mean and be a reference to the Agreement as
amended hereby, and (ii) each reference to the Agreement in all other
Purchase Documents shall mean and be a reference to the Agreement, as
amended hereby.
3.2 Effects. Except as specifically or specifically contemplated
to be amended or modified above, the Agreement, and all other documents,
instruments and agreements executed and/or delivered in connection
therewith, shall remain in full force and effect, and are hereby ratified
and confirmed. The amendments and waivers set forth herein are effective
for the purposes set forth herein and shall be limited precisely as
written, and shall not be deemed otherwise to (i) be a consent to any
amendment, waiver or modification of any other term or condition of the
Agreement or of any other Purchase Document or (ii) prejudice any right or
rights that the Purchaser may now have or may have in the future under or
in connection with the Agreement or any other Purchase Document. This
Amendment shall be construed in connection with and as a part of the
Agreement and all terms, conditions, representations, warranties, covenants
and agreements set forth in the Agreement and each other Purchase Document,
except as
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herein or as contemplated herein to be amended or waived, are hereby
ratified and confirmed and shall remain in full force and effect.
3.3 No Waiver. Except as specifically provided above, the
execution, delivery and effectiveness of this Amendment shall not operate
as a waiver of any right, power or remedy of the Purchasers, or constitute
a waiver of, or consent to and departure from, any provision of the
Agreement, or any other documents, instruments and agreements executed
and/or delivered in connection therewith.
ARTICLE 4
MISCELLANEOUS
4.1 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.
4.2 Severability. Whenever possible, each provision of this
Amendment shall be interpreted in such manner as to be effective and valid
under applicable law, but if any provision of this Amendment 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 Amendment.
4.3 Headings. Article, section and subsection headings in this
Amendment are included for convenience of reference only and shall not
constitute a part of this Amendment for any other purpose.
4.4 Counterparts. This Amendment 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.
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SIGNATURE PAGES TO
AMENDMENT NO. 5 TO
NOTE AND EQUITY PURCHASE AGREEMENT
IN WITNESS WHEREOF, the parties hereto have executed this Amendment
as of the day and year first above written.
IGI, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Sr. Vice President & CFO
IGEN, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Sr. Vice President & CFO
IMMUNOGENETICS, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Sr. Vice President & CFO
BLOOD CELLS, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Sr. Vice President & CFO
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SIGNATURE PAGES TO
AMENDMENT NO. 5 TO
NOTE AND EQUITY PURCHASE AGREEMENT
AMERICAN CAPITAL STRATEGIES,
LTD., a Delaware corporation
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇
Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Chief Financial Officer
ACAS BUSINESS LOAN TRUST 2002-1,
a Delaware business trust
By: AMERICAN CAPITAL STRATEGIES,
LTD., its servicer
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇
Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Chief Financial Officer
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