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EXHIBIT *(10.58)
AMENDMENT TO LOAN AND SECURITY AGREEMENT
This Amendment to Loan and Security Agreement ("Amendment") is made as
of the 12th day of April, 2000 by and between Fleet Capital Corporation
("Lender") and IGI, Inc., IGEN, Inc., Immunogenetics, Inc. and Blood Cells, Inc.
(each a "Borrower" and collectively the "borrowers").
BACKGROUND
A. Borrowers and Lender are parties to a certain Loan and Security
Agreement dated October 29, 1999 ("Loan Agreement"), pursuant to which Borrowers
established certain financing arrangements with Lender. All capitalized terms
not otherwise defined herein shall have the respective meaning ascribed thereto
in the Loan Agreement.
B. Borrowers have requested Lender, and Lender has agreed, to amend the
Loan Agreement, in accordance with and subject to the terms and conditions
hereof.
NOW, THEREFORE, with the foregoing Background incorporated by reference
and made a part hereof, and intending to be legally bound, the parties agree as
follows:
1. Waiver of Defaults:
(1) Borrowers have informed Lender that covenant violations, each
constituting an Event of Default, have occurred under the Loan Agreement in the
following respects (collectively the "Existing Defaults"): (i) Borrowers have
outstanding accounts payable to trade creditors aged more than sixty (60) days
from their respective due date (in violation of Section 8.2.3); (ii) Borrowers
expended $426,000 for nonfinanced Capital Expenditures during the period from
the Closing Date through December 31, 1999 (in violation of the $150,000 maximum
contained in Section 8.2.7); (iii) Borrowers' Fixed Charge Coverage Ratio as of
December 31, 1999 was .14 to 1 (in violation of the minimum ratio of .80 to 1
contained in Section 8.3.1); and (iv) a cross-default has occurred (under
Section 10.1.6) as a result of defaults or events of default on the Subordinated
Debt.
(2) In consideration of the agreements and understanding set forth
in this Amendment, and expressly conditioned upon the satisfaction of the
Effectiveness Conditions set forth in paragraph 4 below, Lender waives the
Existing Defaults. Such waiver is intended to apply only to the Existing
Defaults and only for the respective periods or dates as to which the underlying
violations have occurred. Such waiver shall not at any time create any duty or
obligation on Lender's part to waive any other Event of Default or waive any
future violation of the covenants whose violation gave rise to the Existing
Defaults.
2. Amendments:
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(1) The definition of "EBITDA" in Appendix A is hereby deleted in
its entirety and replaced by the following:
EBITDA - Adjusted Net Earnings From Operations plus the sum of
depreciation, amortization and interest expenses and taxes during
the period for which Adjusted Net Earnings From Operations was
calculated and plus or minus any change in Borrowers' LIFO reserve
from the immediately preceding period of measurement, determined
for the Borrowers for the applicable measurement period. The
foregoing calculation shall exclude any non-cash charges relating
to the issuance of warrants pursuant to the Subordinated Debt
Amendment (as defined in the Amendment to Loan and Security
Agreement dated as of April 12, 2000) or any requirement that such
warrants be marked to market.
(2) Section 8.2.3(ii) of the Loan Agreement is hereby amended to
provide that for the period from January 1, 2000 through February 29, 2000,
Borrowers shall be entitled (in the business judgment of Borrowers) to have
accounts payable greater than sixty (60) days past due in an aggregate amount
not exceeding $1,500,000, from March 1, 2000 through June 30, 2000 in an amount
not exceeding $1,400,000, and from July 1, 2000 through December 31, 2000 in an
amount not exceeding $500,000. As of January 1, 2001, no accounts payable to
trade creditors aged more than sixty (60) days from due date shall be
outstanding.
(3) Section 8.3.1 (contained in Schedule 8.3 of the Loan
Agreement) shall, for all periods after December 31, 1999, be deemed deleted in
its entirety and replaced by the following:
8.3.1 Fixed Charge Covenant. Borrowers shall maintain on a
Consolidated basis a Fixed Charge Coverage Ratio of not less than
the ratio shown below for the respective period corresponding
thereto:
Measurement Date Ratio
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For the 6 month period ending March 31, 2000 .40 to 1
For the 7 month period ending April 30, 2000 .45 to 1
For the 8 month period ending May 31, 2000 .50 to 1
For the 9 month period ending June 30, 2000 .50 to 1
For the 10 month period ending July 31, 2000 .65 to 1
For the 11 month period ending August 31, 2000 .65 to 1
For the 12 month period ending September 30, 2000 .75 to 1
For the 12 month period ending October 31, 2000 (and
thereafter as of the end of each month on a rolling
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12 month basis) 1.01 to 1
(4) Section 8 of the Loan Agreement is further modified to add a
new Section 8.2.14 as follows:
8.2.14 Subordinated Debt. Make, or permit or suffer any
Borrower or Subsidiary to make, any payment of any part or all of
any Subordinated Debt or otherwise repurchase, redeem or retire
any instrument evidencing any such Subordinated Debt (except for
(i) reimbursement of reasonable out-of-pocket expenses pursuant to
Section 7.1(i) of the Note and Equity Purchase Agreement dated as
of October 29, 1999, as amended by the Subordinated Debt
Amendment, and (ii) regularly scheduled payments of principal and
interest when due under the Subordinated Debt Agreements, as
amended by the Subordinated Debt Amendment, or by the delivery of
a note as provided by the Subordinated Debt Amendment, so long as
(with reference to any proposed cash payment) no Event of Default
is then outstanding or would exist after giving effect thereto),
or enter into any agreement amending, modifying, altering or
terminating any one or more instruments or agreements evidencing
or relating to any Subordinated Debt.
3. Representations and Warranties. Each Borrower represents and
warrants to Lender that:
(1) All warranties and representations made to Lender under the
Loan Agreement and each of the other Loan Documents are true and correct as of
the date hereof.
(2) The execution and delivery by each Borrower of this Amendment
and the performance by each Borrower of the transactions herein contemplated (i)
are and will be within such Borrower's corporate powers, (ii) have been
authorized by all necessary corporate action and (iii) are not and will not be
in contravention of any law, any order of any court or other agency of
government, or any other indenture, agreement or undertaking to which such
Borrower is a party or by which any property of such Borrower is bound, or be in
conflict with, result in a breach of, or constitute (with due notice and/or
lapse of time) a default under any such indenture, agreement or undertaking or
result in the imposition of any lien, charge or incumbrance of any nature on any
of the Property of such Borrower.
(3) This Amendment is valid, binding and enforceable against each
Borrower in accordance with its terms.
(4) Except for the covenant violations referenced in paragraph
1(a) above, no material adverse change has occurred with respect to the
financial condition, business, prospects, assets or liabilities of any Borrower
since December 31, 1999.
(5) Other than the Existing Defaults, no Default or Event of
Default
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is outstanding.
4. Effectiveness Conditions. This Amendment shall be effective upon
completion of the following conditions precedent (all documents to be in form
and substance satisfactory to Lender and Lender's counsel):
(1) Execution and delivery by each party of this Amendment;
(2) Execution and delivery, contemporaneously with the execution
and delivery of this Amendment, of an amendment ("Subordinated Debt Amendment")
to the Subordinated Debt Agreements providing, inter alia, that the holder of
the Subordinated Debt waives all defaults and events of default thereunder
(including without limitation any cross-default thereunder resulting from the
occurrence of Events of Default under the Loan Agreement), modifies all
financial covenants therein to be no more restrictive than any similar covenants
contained in the Loan Agreement (as amended hereby), and agrees that its next
interest payment will not be due until July 31, 2000 (covering the period from
April 1 through July 31) and that all succeeding interest payments will be due
on the same basis thereafter quarterly in arrears (i.e., October 31, 2000 (for
the period from August 1 through October 31), January 31, 2001, etc.). Lender
acknowledges and agrees that the execution and delivery by Borrowers and the
holder of the Subordinated Debt of the Subordinated Debt Amendment, in the form
attached hereto, does not violate either the Loan Agreement or the Subordination
Agreement dated October 29, 1999 among Lender, Borrowers and the holder of the
Subordinated Debt (such an agreement by Lender not in any way modifying or
limiting the applicability of the provisions of Section 8.2.6 of the Loan
Agreement relative to any warrants or Securities issued or to be issued to the
holder of the Subordinated Debt).
5. Confirmation of Indebtedness. Borrowers hereby acknowledge and
confirm that as of the close of business on April 7, 2000, they are indebted to
Lender, without defense, setoff, claim, counterclaim or defense of any nature
under the Loan Agreement, in the aggregate principal amount of $7,494,188.39
with respect to Revolving Credit Loans, $6,650,000 with respect to Term Loan A,
$350,000 with respect to Term Loan B, and $257,266 with respect to Capital
Expenditure Loans, plus all fees, costs and expenses (including attorneys' fees)
incurred to date in connection with the Loan Agreement and the other Loan
Documents. Borrowers confirm that they shall pay, on demand, to Lender all
expenses, including without limitation, attorneys' fees, incurred by Lender in
connection with the negotiation, preparation and execution of this Amendment and
any related documents.
6. Ratification of Existing Loan Documents. Except as expressly set
forth herein, all of the terms and conditions of the Loan Agreement and the
other Loan Documents are hereby ratified and confirmed and continue unchanged
and in full force and effect. All references to the Loan Agreement shall mean
the Loan Agreement as modified by this Amendment.
7. Collateral. Borrowers hereby confirm and agree that all security
interests
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and Liens granted to Lender continue in full force and effect and shall continue
to secure the Obligations. All Collateral remains free and clear of any Liens
other than Permitted Liens or Liens in favor of Lender. Nothing herein contained
is intended to impair or limit in any manner the validity, priority and extent
of Lender's existing security interests in and Liens upon the Collateral.
8. Miscellaneous.
(1) This Amendment shall be governed by, construed and enforced in
accordance with the laws of the Commonwealth of Pennsylvania without giving
effect to principles of conflicts of law.
(2) This Amendment may be executed in any number of counterparts,
each of which when so executed shall be deemed to be an original, and such
counterparts together shall constitute one and the same respective agreement.
(3) No modification hereof shall be binding or enforceable upon
Lender unless approved in writing by Lender. No rights are intended to be
created hereunder for the benefit of any party other than Borrowers and Lender.
9. Waiver of Jury Trial. EACH BORROWER AND LENDER EACH WAIVES THE
RIGHT TO TRIAL BY JURY IN ANY ACTION, SUIT, PROCEEDING OR COUNTERCLAIM OF ANY
KIND ARISING OUT OF OR RELATED TO THIS AMENDMENT OR THE TRANSACTIONS DESCRIBED
HEREIN.
IN WITNESS WHEREOF, the parties have executed this Amendment to Loan
and Security Agreement the day and year first above written.
[SIGNATURES APPEAR ON THE FOLLOWING PAGE]
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IGI, INC.
By: /s/ Xxxxxxx Xxxxxxxxx
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Name: Xxxxxxx Xxxxxxxxx
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Title: CFO
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IGEN, INC.
By: /s/ Xxxxxxx Xxxxxxxxx
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Name: Xxxxxxx Xxxxxxxxx
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Title: CFO
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IMMUNOGENETICS, INC.
By: /s/ Xxxxxxx Xxxxxxxxx
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Name: Xxxxxxx Xxxxxxxxx
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Title: CFO
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BLOOD CELLS, INC.
By: /s/ Xxxxxxx Xxxxxxxxx
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Name: Xxxxxxx Xxxxxxxxx
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Title: CFO
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FLEET CAPITAL CORPORATION
By: /s/ Xxxxxx Xxxxxxx
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Name: Xxxxxx Xxxxxxx
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Title: Senior Vice President
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