/Each page of the original bears one stamp and 3 signatures, and is dated in
Barbengo on February 26, 1997/
/emblem/ Union Bank of Switzerland
File No. 0247 /507.944
Re: Pharmaceutical products plant in Barbengo
Libor mortgage loan contract
by and between
the UNION BANK OF SWITZERLAND, Xxx Xxxxxxxx 00, 0000 Xxxxxx (hereinafter
referred to as UBS)
and
BIGMAR PHARMACEUTICALS S.A., 6917 Barbango (hereinafter referred to as the
debtor).
UBS grants the debtor a Libor mortgage loan at a fixed rate for a total of SFr.
2,000,000.
(Two million Swiss francs)
on the basis of the following conditions:
1. DURATION/PAYMENT
The Libor mortgage loan shall be valid from the date of payment until
12/31/2001.
Payment shall be made two banking days after receipt of the Libor mortgage
loan duly signed by the debtor, provided UBS is able to dispose of the
guarantees on that date.
2. INTEREST RATE(S)
The debtor shall pay a base interest rate plus 1.5% p.a.
The base interest rate shall be the 6 months LIBOR rate for the Swiss franc
(London Interbank Offered Rate of the British Bankers Association (BBA)
pursuant to Telerate page 3750) rounded off to two decimal points. The
interest rate for a 6-month period shall be determined and notified to the
debtor two banking days before the beginning of the loan and before each
semi-annual due date for the interest. If payment is not made in the
beginning of a six-month period, UBS shall establish the interest rate for
the period between the date of payment and the beginning of the first full
6-months period on the basis of the letter rate of the UBS monetary market
(Investdata p. 589.40), and inform the debtor of the full interest rate.
Interest shall be calculated according to
1
international usage (exact number of days/360).
The debtor confirms that UBS has informed it of the risks inherent in the
interest rate connected with this Libor mortgage and of the possibilities of
insuring these risks.
3. DUE DATES OF INTEREST.
Interest shall be payable on the last banking day of June and December in
London.
4. AMORTIZATION
No amortization is scheduled for the duration of the contract. The
stipulations of No. 8 are reserved.
5. DEBIT AT MATURITY
Interest and amortizations will be debited, if there are covering funds, to
account No. 0247/507.944.OIN in the name of Bigmar Pharmaceuticals SA,
Barbengo.
6. GUARANTEES
The Libor mortgage loan is guaranteed as follows:
- assignment as guarantee, pursuant to a separate agreements, of:
SFr. 1,000,000 bearer mortgage bond of 11/30/87, dg. 27028, first class
SFr. 700,000 bearer mortgage bond of 1/20/88, dg. 1388 2nd class
SFr. 300,000 bearer mortgage bond of 9/5/88, dg. 23360, 3rd class
encumbering lot 174 of RFD of Barbengo.
- establishment of a pledge in our favor, under a separate instrument, for:
SFr. 2,000,000.00 face value/reg. UBS Libor Cap. Warrant (security
408.453), 1995-12/31/98, strike 5%
7. DELAY INTEREST
If interest is not paid at maturity, the debtor shall have to pay the delay
interest established by UBS to the bank from that date. The delay interest
rate shall exceed the one month LIBOR rate valid on the due date by no more
than 3%, plus the percentage pursuant to No. 2, para 1.
2
8. CANCELLATION
The debtor may cancel the Libor mortgage loan partially or entirely on an
interest due date, with three months notice, against payment of an indemnity
to be calculated pursuant to section 11.
UBS shall be authorized to cancel the Libor mortgage loan at any time with
three months notice,
- if the debtor violates contractual obligations, in particular is more than
30 days in arrears in payment of interest or amortization,
- if according to UBS, the real property encumbered by the pledge for the
Libor mortgage suddenly diminishes in value or can no longer provide
sufficient cover.
- if, due to restrictions imposed by the Swiss National Bank or another
Swiss authority involved in this contract, UBS has tried to renegotiate
the conditions established in this contract with the debtor and these new
negotiations have not, by the end of 2 months, led to a solution
acceptable to both contractual parties.
- if the financial and/or income situation of the debtor has considerably
deteriorated, or if a deterioration is foreseeable and renegotiations of
the conditions of this contract have not led to a mutually satisfactory
agreement in two months.
If a valid cancellation is effective before the stipulated period, the debtor
shall have to pay an indemnity to UBS, calculated pursuant to No. 11, which
shall be due at the time of cancellation.
9. STIPULATIONS REGARDING THE DUE DATE OF THE LIBOR MORTGAGE LOAN.
At the end of the agreed period, the full amount of the Libor mortgage loan
shall be due for reimbursement. At that time, UBS shall offer new financing
to the debtor among the possible mortgage variants under conditions then in
force for new financing, provided the cancellation was not due to facts
listed under No. 8.
10. PAYMENT DUE AS A RESULT OF TRANSFER OF OWNERSHIP OR FORCED EXECUTION.
If the assets encumbered by the pledge are sold privately or as part of a
forced execution, the entire Libor mortgage loan, including current interest,
shall be due for reimbursement
3
immediately on the date of the transfer of ownership or the public
instrument. If the due date falls within the duration of the Libor mortgage
loan, the debtor shall pay to UBS an indemnity to be calculated pursuant to
No. 11, which shall be due immediately.
11. INDEMNITY
The amount of the indemnity which the debtor shall have to pay to the UBS
pursuant to Nos. 8 and 10 shall be 0.05% of the capital for each remaining
monthly payment. If the due date falls within a semester period of interest,
the debtor shall pay to UBS, for the remaining period of the current
semester, an indemnity corresponding to the difference between the
contractual interest rate (including the margin) and the rate of
reinvestment (base rate: the UBS rate on the monetary Euromarket, pursuant
to Investdata page 589.40); the indemnity shall be calculated in percent of
the total debt for the remaining current semester.
12. JOINT AND SEVERAL LIABILITY / CUMULATIVE ASSUMPTION OF DEBT
If there are several debtors, they are jointly and severally liable for the
debt. Debtors not mentioned on the mortgage certificates assigned to UBS as
guarantees shall cumulatively and jointly and severally assume the debts for
these mortgage certificates.
13. INSURANCE AGAINST FIRE AND DAMAGE CAUSED BY NATURAL ELEMENTS
The debtor shall insure the building(s), as well as any appurtenances built
on the mortgaged land against fire and damage caused by natural elements,
with a state insurance company or any insurance company domiciled in
Switzerland for a value which is sufficient in the judgment of UBS. Upon
request, the insurance policy and the receipts for premiums shall be
exhibited to UBS.
14. GENERAL CONDITIONS
The remainder of the contract shall be governed by the general conditions of
UBS, a copy of which was given to the debtor. The debtor confirms that it
has read the general conditions and accepted them without reservation.
15. ADDITIONAL CONDITIONS
The following conditions are also valid:
- record with the land registry of the appurtenances to your building on
lot 174 of the RFD of Barbengo:
4
- postponement of the loan of SFr. 2,000,000 granted you by Bigmar
Inc., Delaware (USA);
- presentation, without need of a reminder, of the annual consolidated
statements of Bigmar Inc., Delaware (USA) within 4 months from the close
of the fiscal year.
16. VENUE
The exclusive venue for all controversies arising out of this contract and
the place of implementation and execution shall be Lugano. But UBS shall
have the right to bring suit against the debtor at the competent court of
its head office/domicile or at any other competent court.
The conditions of this contract alone govern this Libor mortgage loan, in
derogation of any contrary stipulations in the mortgage certificates assigned to
UBS as guarantee.
Barbengo, February 26, 1997 Lugano, 11/26/96
The debtor Union Bank of Switzerland
Bigmar Pharmaceuticals XX X. Xxxxxxxx pp. X. Xxxxxxxx
/signature/ /signature/
Xxxx Xxxxxxxxxx Xxxxxxxx Xxxxxxxxx
/signature/ /signature/
/stamp and signature/: Approved and signed
M. Paris
5
