EXHIBIT 10.9
Agreement, dated April 9, 1996, between the Registrant, East West
Herbs Limited, Xxxxxx X. Xxxxxx and X.X. Xxxx
DATED April 9, 1996
PARACELSIAN INC
-and-
EAST WEST HERBS LIMITED
-and-
R E XXXXXX and X X XXXX
SECURED LOAN AGREEMENT
Linnells
Xxxxxxxxxx Xxxxx
Xxxxxxxx Xxxxxx
Xxxxxx XX0 0XX
(Ref:XXX.xxxx)
THIS AGREEMENT is made the 9th day of April, 1996
BETWEEN
(1) "The Lender" PARACELSIAN INCORPORATED (a company
incorporated under the laws ofDelaware)whose principal office is at 222
Langmuir Laboratories Cornell Technology Park Ithaca XxxXxxx 00000 XXX
(2) "The Company" EAST WEST HERBS LIMITED(registered number
2241037) whoseregistered office of Xxxxxxxx Xxxxxx Xxxx Xxxxxxx Xxxxxx
XX00XX
(3) "The Guarantor" XXXXXX XXXX XXXXXX and XXXXX XXXXXXXXX XXXX
both of XxxXxxxx Xxxxxxx Xxxxxxxx Xxxxxxxxxxx XX00XX
WHEREAS the Lender has been requested by the Guarantor to provide
financial facilities to theCompany which the Lender has agreed to
upon the terms and conditions hereinafter contained
NOW THIS DEED WITNESSES as follows:-
1. LOAN
The Lender shall lend to the Company and the Company at the
request of the Guarantor shall borrow from the Lender the sum of Three
Hundred and Forty Thousand US DOLLARS(US$340,000) which sumor part
thereof as is for the time being owing by the Company to the Lender
is hereinafter referred to as"the Loan" upon the terms hereinafter
mentioned
2. SECURITY
The Company shall contemporaneously with the advance of the Loan
execute and issue to the lender a fixedand floating debenture in the
form agreed between the parties on or before the date hereof
3. PURPOSE OF LOAN
The Loan shall be applied by the Company solely for the purpose of
providing working capital for the business of the Company
4. DRAW DOWN OF LOAN
The monies to be advanced to the Company shall be paid by one
instalment on the date of this Agreement
5. REPAYMENT OF LOAN
5.1 The Loan shall be repaid by eight equal instalments the
first instalment to be paid six onthsafter the first anniversary of
this Agreement and subsequent instalments at intervals of three
calendarmonths
5.2 Subject to Clause 7.2 the Company may at any time repay the
Loan in full or part thereof inmultiples of US$10,000 by giving to the
Lender at least three days written notice
6. EARLY REPAYMENT ON DEFAULT
6.1 The Loan and interest thereon under Clause 7.2 and other
sums payable by the Companyhereunder thereof shall be forthwith repaid
to the lender following written demand therefor if:-
6.1.1 The Company commits any material breach of the
provisions of this Agreementand in the case of a breach capable of
remedy fails to remedy the same within 30 days after receipt of a
written notice giving full particulars of the breach and requiring it
to be remedied
6.1.2 an encumbrancer takes possession or a Receiver is
appointed over any of the property or assets of the Company
6.1.3 The Company makes any voluntary arrangement withits
creditors
6.2 For the purpose of Clause 6.1.1 a breach shall be
considered capable of remedy if theCompany can comply with the
provision in question in all respects other than as time of
performance(provided that time of performance is not of the essence)
6.3 Any waiver by the Lender of a breach of any provisions of
this Agreement shall not beconsidered as a waiver of any subsequent
breach of the same or any other provision thereof
6.4 The rights to terminate this Agreement given by this Clause
6 shall be without prejudice to anyother right or remedy of the Lender
in respect of the breach concerned (if any) or any other breach
7. INTEREST ON LOAN
7.1 The period during which the Loan is outstanding will be
divided into successive periods ofthree months (each an "Interest
Period"). The first Interest period shall commence on the date hereof
andthe subsequent Interest Periods shall each commence on the expiry
of the preceding Interest Period
7.2 The rate of interest applicable to the Loan during each
Interest period shall be the LIBOR rate applicable to that Interest
Period
7.3 The LIBOR rate means the rate per annum at which domestic
sterling deposits are offered in the London inter-bank market for a
three month period at approximately 11.00 am on the first day of such
Interest Period
7.4 Interest on the Loan shall be payable in arrears on the last
day of each Interest Period or on the date of repayment of the Loan, if
earlier, in which case the interest shall be calculated down to the
date ofrepayment
7.5 The Company will make all payments under or in respect of
this facility for value on the duedate in US dollars to the Lender at:-
Paracelsian Inc
ABA Routing #
Account# #
Xxxxxxxx Ithaca
New York NY
Attention: Trust Department
or such other account as the Lender may from time to time instruct the
Company in writing. If any payment becomes due on a day which is not a
day on which banks are generally open for business in London, the due
date of such payment will be extended to the next business day
8. APPOINTMENT OF DIRECTORS
For so long as the Loan or any part thereof and any interest thereon
and any other sum payable by the Company to the Lender hereunder remains
outstanding the Company shall procure that a person nominatedby the
Lender ("the Nominated Director") shall be appointed to and shall not
be removed from the Board of Directors of the Company provided always
that:-
8.1 the Lender shall at any time be entitled by notice in
writing to the Company to remove its nominated director and by like
notice to appoint any other person as a director and
8.2 upon the Loan and all other sums payable by the Company to
the lender hereunder having been repaid or paid, as the case may be, the
Lender will procure the resignation forthwith of the Nominated Director
on terms acceptable to the Guarantor
9. GUARANTEE
9.1 In consideration of the Lender having agreed at the request
of the Guarantor to advance the Loan to the Company the Guarantor
hereby unconditionally and irrevocably guarantees to the Lender dueand
punctual payment and discharge by the Company of all sums due and
payable by the Company to the Lender under this Agreement including
the Loan, interest at the rate set out in Clause 7 together
withreasonable charges, expenses and costs properly incurred by the
Lender in connection with the enforcementor preservation of this
Agreement (hereinafter called "Indebtedness")
9.2 If the Company defaults in the payment of any Indebtedness
when due for more than 14 daysthe Guarantor's liability to the Lender
shall be discharged by the delivery to the Lender forthwith on
demandwithout set-off counterclaim or other deductions a duly executed
transfer together with relative share certificates off or the number of
fully paid ordinary shares of pounds sterling 1.00 each in the capital of the
Company determined by the following formula:-
x = y x 45,00033,200
340,000
where x = the number of shares to be transferred
y = the amount of the Loan in respect of the re-payment of
which the company is in default
9.3 The total liability of the Guarantor under this Agreement
shall not exceed the amount represented by the value from time to time
of 3022.1% of the issued fully paid ordinary shares in the capital of
the Company and as security for the obligations of the Guarantor
hereunder the Guarantor shall on the date of this Agreement deposit with
the Lender share certificates representing [33,200] fully paid ordinary
shares of pound sterling 1.00 each in the capital of the Company (hereinafter
called "the Security Shares")together with six duly executed blank stock
transfers
9.4 The Guarantor shall not be discharged by time indulgence
forbearance or any other concessions given to the Company or to any
third party by the lender or by anything the Lender may do or omit to do
or by any other dealing or thing which but for this provision would or
might discharge the Guarantor
9.5 The Guarantee herein contained shall:-
9.5.1 be in addition to and not in substitution for any
other guarantee or security held by theLender at any time for the
Indebtedness and the Lender may deal with any such other security as it
may think fit without affecting or releasing the obligations of the
Guarantor or either of them hereunder in anyway
9.5.2 be a continuing guarantee and shall not be discharged
by any intermediate settlementof the Indebtedness
9.5.3 remain in full force and effect until:-
(a) such time as the Indebtedness has been satisfied in full and no
further Indebtedness is capable of arising;
or (b) the Lender shall complete the purchase of the whole of the
issued share capital of the Company pursuant to an Option Agreement of
today's date and made between the Guarantor and others (1) the lender
(2) and the Company (3)whichever is the sooner
9.6 Until the Indebtedness shall have been satisfied in full:-
9.6.1 the Guarantor shall not claim or prove against the
Company in competition with theLender in respect of the discharge by
the Guarantor to the Lender of any liability hereunder; and
9.6.2 the Guarantor shall not claim or have the benefit of
any set-off counterclaim or proofagainst the Company or of any dividend
composition or payment by the Company or of any other securityto which
the Lender may be entitled in respect of the Indebtedness or any share
therein
9.7 The Guarantor hereby undertakes with the Lender as a
separate and independent stipulation that if any liability of the
Guarantor to the Lender pursuant to Clause 9.1 above is not
recoverable by the Lender pursuant to that Clause on the footing of a
guarantee by reason of any legal limitation disability orincapacity or
the unenforceability for any reason of his Guarantee and/or the
discharge of any indebtednessor any other fact matter or circumstance
whether known to the Lender or not such liability shall nevertheless be
recoverable from the Guarantor as sole or principal debtor in respect
thereof and shall be discharged by the Guarantor to the Lender upon
demand made pursuant to Clause 9.2 by way of indemnity against the
Company's failure to perform and satisfy the Indebtedness
9.8 The Guarantee herein contained shall bind the personal
representatives or the successors in titleof the Guarantor and shall
not in any way be affected or released by the death or insolvency of
theGuarantor
9.9 In the event of any alteration in the capital structure of
the Company (whether by way of a bonus issue arising on a capitalisation
of profits or reserves a share issue for cash or for a
consideration other than cash a reduction of capital or otherwise
whatsoever) taking place or in the event of the Company subdividing or
consolidating its ordinary share capital or in the event of the grant
by the Company of any option or other right in relation to shares in
its capital the number of Security Shares shall be adjusted insuch manner
(if any) as the parties hereto may agree in writing or in default of agreement
as the auditors ofthe Company acting as expert and not as arbitrator shall
certify in writing to be fair and reasonable and whose certificate shall
be final and binding upon the parties hereto
10. NOTICES
10.1 Any notice or other document to be given hereunder shall
bedelivered or sent by first class post (or if outside the United
Kingdom Air Mail) or telex or facsimile transmission to the party to be
served at the party's registered office or last known address or such
other address as the party shall notify in accordance herewith
10.2 Any notice or other communication given by or to any party
in accordance with this Agreement may be given by or to that party's
solicitors in accordance with the provisions of the preceding sub-clause
of this Agreement
10.3 Any such notice or document shall be deemed to have been
served if delivered at the time of delivery or if posted at the
expiration of 48 hours (108 hours if sent to or from an address outside
theUnited Kingdom) after the envelope containing the same shall have
been put into the post or if sent by telex or facsimile transmission at
the expiration of 12 hours after receipt of the same has been
automatically acknowledged to the sender thereof and in proving such
service it shall be sufficient to prove that delivery was made or that
the envelope containing such notice or document was properly addressed
and posted as a prepaid first class or air mail letter or that the telex
or facsimile transmission was properly addressed and posted as a prepaid
first class or airmail letter or that the telex or facsimile
transmission was properly addressed and acknowledged as the case may be
provided that a copy of such telex or facsimile transmission is
delivered or sent by post in manner aforesaid within twenty four hours
of such telex or facsimile being automatically acknowledged
11. GOVERNING LAW AND JURISDICTION
This Agreement shall be governed by and construed under English Law and
each of the parties heretohereby submits to the non-exclusive
jurisdiction of the English courts for the purposes of any claim or
matter arising under or in connection with this Agreement
12. COSTS
The costs and expenses incurred by the Lender in connection with the
negotiation and preparation of this Agreement in the sum of US$10,000
shall be paid by the Company tothe Lender on the date hereof
13. INTERPRETATION
13.1 Any reference in this Agreement to "writing" or cognate
expressions includes a reference totelex cable facsimile transmission
or comparable means of communication
13.2 Any reference in this Agreement to any provision of a
statute shall be construed as a referenceto that provision as amended
re-enacted or extended at the relevant time
13.3 In this Agreement words importing the masculine gender shall
be deemed and taken to includethe feminine or neuter gender and the
singular to include the plural and agreements or undertakings madeby
two or more persons shall be deemed to be made by such persons
jointly and severally
13.4 The headings in this Agreement are for convenience only and
shall not affect its interpretation
IN WITNESS whereof the parties to this Deed have executed it as a deed
on or before the date first before written and have given authority
to their respective solicitors to date anddeliver the same and (if
appropriate) a duplicate or counterpart thereof such dating being
conclusive proofof delivery on the date first before written
EXECUTED as a Deed by PARACELSIAN )
)
INCORPORATED )
)
acting by its President and Vice-President)
EXECUTED as a deed by EAST WEST )
)
HERBS LIMITED acting by:- )
Director
Director/Secretary
SIGNED as a Deed and DELIVERED )
)
by the said XXXXXX XXXX XXXXXX )
)
in the presence of:- )
SIGNED as a Deed and DELIVERED )
)
by the said XXXXX XXXXXXXXX XXXX )
)
in the presence of:- )
