EXECUTION COPY
Exhibit
10.1
 |
EXECUTION
COPY
|
XXXXXXX
XXXXX CAPITAL, A DIVISION OF
XXXXXXX
XXXXX BUSINESS FINANCIAL SERVICES INC.
THIS
CREDIT AND SECURITY AGREEMENT (the “Agreement”) is made as of the 21st
day of
May, 2007 (the “Closing Date”), by and among XXXXXXX XXXXX CAPITAL, A DIVISION
OF XXXXXXX XXXXX BUSINESS FINANCIAL SERVICES INC., its successors and assigns
(“Lender”), and DISCOVERY
LABORATORIES, INC.,
a
Delaware corporation (“Principal Borrower”), and any additional borrower that
may hereafter be added to this Agreement (together with Principal Borrower,
each
individually as a “Borrower” and collectively as “Borrowers”).
Borrowers
are desirous of obtaining a loan from Lender and Lender is willing to make
the
loan to Borrowers upon the terms and conditions set forth herein.
NOW,
THEREFORE, in consideration of the sum of Ten Dollars ($10.00) in hand paid
and
other good and valuable consideration, the receipt and sufficiency of which
are
hereby acknowledged, the parties do hereby agree as follows:
1. Advance
of Loan.
(a) Availability.
Subject
to the terms and conditions of this Agreement, during the Draw Period, Lender
shall make advances (each, an “Equipment Advance” and, collectively, “Equipment
Advances”) not exceeding the Equipment Line (such Equipment Advances,
individually and collectively, the “Loan”). Equipment Advances may only be used
to finance Eligible Equipment purchased within one hundred twenty (120) days
(determined based upon the applicable invoice date of such Eligible Equipment)
before the date of each Equipment Advance; provided, however, that the initial
advance under the Loan shall be used to pay in full all indebtedness owed by
Borrowers to General Electric Capital Corporation up to Four Million Five
Hundred Thousand Dollars ($4,500,000) (the “GECC Debt”). All Eligible Equipment
must have been new when purchased by Borrower, except for such Eligible
Equipment that is disclosed in writing to Lender by Borrowers, and that Lender
in its sole discretion has agreed to finance, prior to being financed by Lender.
No Equipment Advance may exceed one hundred percent (100%) of the total invoice
for Eligible Equipment (excluding taxes, shipping, warranty charges, freight
discounts and installation expenses relating to such Eligible Equipment, except
to the extent that any of the foregoing are allowed to be financed pursuant
hereto as Other Equipment). The proceeds of the Loan used to finance Hard Costs
shall not exceed an amount equal to (A) the Equipment Line, minus (B) the GECC
Debt paid off from proceeds of the initial Equipment Advance, and minus the
principal amount of all Other Equipment Advances made under this Agreement.
The
proceeds of the Loan used to finance Other Equipment shall not exceed an amount
equal to (i) One Million Five Hundred Thousand Dollars ($1,500,000) plus the
lesser of (X) the prepayment penalty incurred by Borrowers in connection with
the prepayment of the GECC Debt or (Y) Two Hundred Thousand Dollars ($200,000).
In addition, not more than Four Million Five Hundred Thousand Dollars
($4,500,000) of the proceeds of the Loan shall be used to pay off the GECC
Debt.
Each Equipment Advance must be in an amount equal to or greater than the lesser
of One Hundred Thousand Dollars ($100,000) or the amount that has not yet been
drawn under the Loan. After repayment, no Equipment Advance may be reborrowed.
Each Equipment Advance shall be advanced on or before the second Business Day
following Lender’s receipt of Borrower’s written request for such Equipment
Advance (provided that all conditions precedent set forth in Section 4 below
have been satisfied as of the funding date of such Equipment
Advance).
(b) Repayment.
(1) Each
Hard
Cost Equipment Advance shall amortize from and after the Advance Date (as
defined in Section 4(b) below) of the Hard Cost Equipment Advance and be payable
in thirty-six (36) equal monthly payments of principal and interest beginning
on
the first day of the second month following such Equipment Advance and
continuing on the first day of each month thereafter.
1
Exhibit
10.1
| |
EXECUTION
COPY
|
(2) Each
Other Equipment Advance shall amortize from and after the Advance Date of the
Other Equipment Advance and be payable in twenty-four (24) equal monthly
payments of principal and interest beginning on the first day of the second
month following such Equipment Advance and continuing on the first day of each
month thereafter.
(3) The
GECC
Payoff Equipment Advance shall amortize from and after the Advance Date of
the
GECC Payoff Equipment Advance and be payable in twenty-seven (27) equal monthly
payments of principal and interest beginning on the first day of the second
month following such Equipment Advance and continuing on the first day of each
month thereafter.
(4) In
addition to the scheduled payments set forth in Sections 1(b)(1), (2) and (3)
above, on the first day of the month following the Advance Date for each
Equipment Advance, Borrowers shall pay to Lender the accrued interest on such
Equipment Advance, at the rate set forth in Section 1(c)(1) below.
(5) Borrowers
may prepay any Equipment Advance at any time, in whole or in part, for any
reason; provided, however, that no prepayment of a Hard Cost Equipment Advance
shall be permitted at any time that Other Equipment Advances made
in
conjunction with such Hard Cost Equipment Advance are
outstanding unless such Other Equipment Advances are prepaid simultaneously.
In
the event of any prepayment (whether such prepayment is voluntary or mandatory
by reason of the occurrence of a Default (as defined in Section 7 below) or
the
acceleration of the Loan, or otherwise), or if the Loan shall be accelerated
and
become due and payable in full, Borrowers shall pay to Lender, as compensation
for the costs of Lender making funds available to Borrowers under this
Agreement, a prepayment fee (the “Prepayment Fee”) calculated in accordance with
this subsection; provided that no Prepayment Fee shall be owed in the event
that
the prepayment occurs in connection with a refinancing of the Obligations (as
defined in Section 3(a) below) with Lender. If such prepayment occurs prior
to
the first anniversary date of the Closing Date, the Prepayment Fee shall be
equal to the principal amount prepaid (or accelerated) multiplied
by
four
percent (4.0%), if such prepayment occurs on or after the first anniversary
date
of the Closing Date, but prior to the second anniversary date of the Closing
Date, the Prepayment Fee shall be equal to the principal amount prepaid (or
accelerated) multiplied
by
two
percent (2.0%) and if such prepayment occurs on or after the second anniversary
date of the Closing Date, the Prepayment Fee shall be equal to the principal
amount prepaid (or accelerated) multiplied
by
one
percent (1.0%). All fees payable pursuant to this paragraph shall be deemed
fully earned and non-refundable as of the Closing Date.
(6) Payments
of principal and interest shall be made by Automated Clearing House debit of
immediately available funds from the account designated by Borrowers in the
Automated Clearing House debit authorization executed by Borrowers in connection
with the Agreement, or by wire transfer of immediately available funds to
LaSalle Bank, 000 X. XxXxxxx Xx., Xxxxxxx, XX 00000, ABA 000000000, Account
name: MLBFS Healthcare Finance, Account #5800395088, Reference:
Discovery Laboratories,
or such
other address as Lender shall have designated to the Borrowers in writing;
and
shall be effective upon receipt.
(c) Interest.
(1) Subject
to Section 1(c)(2),
the
principal amount outstanding under each Equipment Advance shall accrue interest
(payable monthly in arrears) at a fixed per annum rate equal to the sum of
the
LIBOR Rate plus six hundred twenty five basis points (6.25%), determined on
the
date of each Equipment Advance. For purposes of calculating interest, all funds
received by Lender for application to the Loan shall be subject to a two (2)
Business Day clearance period.
(2) At
the
election of Lender, after the occurrence of a Default and for so long as it
continues, (a) the Equipment Advances and other Obligations (as defined in
Section 3(a) below) shall bear interest at rates that are two percent (2.0%)
per
annum in excess of the rates otherwise payable under this Agreement (the
“Default Rate”); provided that, notwithstanding anything to the contrary
contained in the foregoing or otherwise in this Agreement, the increased rates
of default interest provided for in this section shall be applicable
automatically and immediately upon the occurrence and during the continuance
of
any Default occurring under Section 6(e) below without the necessity of any
further affirmative action by any party.
2
Exhibit
10.1
| |
EXECUTION
COPY
|
(3) All
interest and fees under each Financing
Document
(as defined below) shall be calculated on the basis of a 360-day year for the
actual number of days elapsed. The date of funding of an Equipment Advance
shall
be included in the calculation of interest. The date of payment of an Equipment
Advance shall be excluded from the calculation of interest. If an Equipment
Advance is repaid on the same day that it is made, one (1) day’s interest shall
be charged.
(d) Commitment
Fee.
Contemporaneous with Borrowers’ execution of this Agreement, Borrowers shall pay
Lender a commitment fee in an amount equal to Thirty-One Thousand Two Hundred
Fifty Dollars ($31,250). This fee shall be deemed fully earned and
non-refundable as of the Closing Date.
(e) Promissory
Notes.
The
obligation to repay the Loan hereunder shall be evidenced by one or more
promissory notes payable by Borrowers to the order of Lender in substantially
the form attached hereto as Exhibit 1 (hereinafter collectively referred to
as
the “Promissory Note”). “Financing Documents” as used herein shall mean the
Promissory Note, this Agreement and all other documents executed in connection
with the Loan.
2. [Reserved.]
3. Security.
(a) As
security for the payment as and when due of the indebtedness of Borrowers to
Lender hereunder and under the Promissory Note (and any renewals, extensions
and
modifications thereof), both now in existence and hereafter created (as the
same
may be renewed, extended or modified), and the performance as and when due
of
all other obligations of Borrowers to Lender, both now in existence and
hereafter created (as the same may be renewed, extended or modified) (the
“Obligations”), Borrowers hereby assign and grant to Lender, a Lien on and
security interest in, upon, and to the Collateral. As set forth in the
definition of “Collateral” in Section 12 below, the Collateral shall change on
the Collateral Modification Date (provided that no Default has occurred and
is
continuing at such time). Lender hereby agrees to file, at Borrowers’ cost,
promptly following the Collateral Modification Date (provided that no Default
has occurred and is continuing as of the Collateral Modification Date), an
amendment to its UCC Financing Statement to reflect the change to the Collateral
and to provide such other termination documents and releases as Borrower may
reasonably request to reflect the change to the Collateral.
(b) Borrowers
agree that with respect to the Collateral Lender shall have all of the rights
and remedies of a secured party under the UCC. Borrowers hereby authorize Lender
to file UCC statements describing the Collateral. Without Lender’s prior written
consent, Borrowers agree not to file any corrective or termination statements
or
partial releases with respect to any UCC statements filed by Lender pursuant
to
this Agreement.
(c) Promptly
after any Financed Equipment ceases to be Collateral in accordance with either
Schedule 1-A or Schedule 1-B attached hereto, Lender agrees to file partial
releases and termination statements, as appropriate, with respect to such
Financed Equipment.
4 Conditions.
(a) Conditions
Precedent to Lender’s Obligation.
The
obligation of Lender to make the Loan as set forth in Section 1 hereof is
expressly conditioned upon compliance by Borrowers, to the reasonable
satisfaction of Lender and its counsel, of the conditions precedent that
concurrently with the execution hereof, or on or prior to the date on which
Lender is to advance the Loan hereunder, Borrowers shall cause to be provided
to
Lender the following:
(1) Resolutions
of the Board of Directors or validly authorized Executive Committee of
Borrowers, certified by the Secretary or an Assistant Secretary of each
Borrower, duly authorizing the borrowing of funds hereunder and the execution,
delivery and performance of this Agreement, Financing Documents, and all related
instruments and documents.
3
Exhibit
10.1
| |
EXECUTION
COPY
|
(2) An
opinion of counsel for Borrowers satisfactory as to form and substance to
Lender.
(3) The
payment of all fees, expenses and other amounts that under the Financing
Documents are due and payable on the Closing Date.
(4) A
landlord’s agreement or mortgagee agreement, as applicable, from the lessor of
each leased property or mortgagee of owned property with respect to any business
location where any portion of the Collateral, or the records relating to such
Collateral and/or software and collateral relating to such records or
Collateral, is stored or located, which agreement or letter shall be reasonably
satisfactory in form and substance to Lender.
(5) An
Intercreditor Agreement in a form acceptable to Lender and executed by Borrowers
and PharmaBio Development Inc. d/b/a NovaQuest (“NovaQuest”).
(6) A
payoff
letter, acceptable to Lender, signed by General Electric Capital Corporation
with regard to the payoff of the GECC Debt and the release of all Liens securing
the GECC Debt upon such payoff.
(b) Conditions
Precedent to Advance of Funds.
The
obligation of Lender to make the Loan as set forth in Section 1 hereof is
expressly conditioned upon compliance by Borrowers, to the reasonable
satisfaction of Lender and its counsel, of the conditions precedent that on
each
date (“Advance Date”) on which Lender is to advance funds
hereunder:
(1) Borrowers
shall cause to be provided to Lender no less than one (1) Business Day prior
to
the Advance Date (electronically in .pdf format or by facsimile, with originals
to follow via overnight delivery) the following:
a. A
certificate executed by the Secretary, Assistant Secretary or other officer
of
Borrower, certifying that the representations and warranties of Borrowers
contained herein remain true and correct as of the Advance Date, and that no
Default has then occurred and is continuing and Borrower is not aware of any
event which, with the giving of notice or the lapse of time, or both, would
become a Default under this Agreement.
b. Evidence
satisfactory to Lender as to due compliance with the insurance provisions of
Section 5(d) hereof.
c. A
Promissory Note in the amount of the Loan to be advanced on such date, duly
executed on behalf of Borrowers, pursuant to Section 1 hereof.
d. Photocopies
of the invoice(s) or other evidence reasonably satisfactory to Lender and its
counsel, related to the acquisition cost of the Financed Equipment to which
such
advance of the Loan relates.
e. A
Collateral Schedule describing the Financed Equipment to which such advance
of
the Loan relates (upon Lender’s receipt of a Collateral Schedule such Collateral
Schedule shall be deemed to be annexed to and made a part of this
Agreement).
(2) The
absence, since the date of the financial statements last delivered by Borrowers
to Lender, of any Material Adverse Effect, or any event or condition which
could
reasonably be expected to result in such a Material Adverse Effect.
(3) Borrowers
shall have executed such documents and taken such actions as reasonably may
be
required by Lender and its counsel to perfect a valid, first priority purchase
money security interest granted by Borrowers to Lender with respect to the
Financed Equipment.
4
Exhibit
10.1
| |
EXECUTION
COPY
|
(4) No
Default or event which, with the giving of notice or lapse of time, or both,
would become a Default hereunder, shall have occurred.
5. Representations
and Warranties.
Except
as set forth in the schedules prepared by Borrowers and attached to and made
a
part of this Agreement (the “Borrower Schedules”), each Borrower hereby
represents and warrants that:
(a) Due
Organization.
Each
Borrower’s exact legal name is indicated on the signature page of this Agreement
and Borrower has the form of business organization, and is and will remain
duly
organized and validly existing in good standing under the laws of the
jurisdiction, specified below the signature of each Borrower; and each Borrower
is duly qualified and authorized to transact business and is in good standing
wherever necessary to perform its obligations under the Financing Documents,
including each jurisdiction in which the Collateral is to be
located.
(b) Power
and Authority.
Each
Borrower has the requisite power and authority to own or hold under lease its
properties and to enter into and perform its obligations hereunder; and the
borrowing hereunder by such Borrower from Lender, the execution, delivery and
performance of the Financing Documents, (1) have been duly authorized by all
necessary action consistent with such Borrower’s form of organization; (2) do
not require any approval or consent of any stockholder, member, partner,
trustee, holders of any indebtedness or obligations of such Borrower or any
other party except such as have been duly obtained; and (3) do not and will
not
contravene (A) any law, governmental rule, regulation or order now binding
on
such Borrower, except such law, governmental rule, regulation or order where
contravention thereof could not reasonably be expected to have a Material
Adverse Effect or a material adverse effect on the validity or enforceability
of
the Financing Documents, (B) the organizational documents of such Borrower,
or
(C) the provisions of, or constitute a default under, or result in the creation
of any Lien upon the Collateral under any agreement to which such Borrower
is a
party or by which it or its property is bound.
(c) Consents
and Approvals.
Neither
the execution and delivery by such Borrower of the Financing Documents, nor
the
consummation of any of the transactions by such Borrower contemplated hereby
or
thereby, requires the consent or approval of, the giving of notice to, the
registration with, or the taking of any other action in respect of, any Federal,
state or foreign governmental authority or agency, except as provided
herein.
(d) Legal,
Valid and Binding Obligations.
This
Agreement constitutes, and all other Financing Documents when entered into
will
constitute, the legal, valid and binding obligation of such Borrower enforceable
against such Borrower in accordance with the terms hereof and thereof, except
as
limited by applicable bankruptcy, insolvency, reorganization, moratorium or
similar laws or equitable principles relating to or affecting the enforcement
of
creditors’ rights generally, and by Applicable Laws (including any applicable
common law and equity) and judicial decisions which may affect the remedies
provided herein and therein.
(e)
Actions
and Proceedings.
Except
as set forth in Schedule 5(e) attached hereto, there are no pending or
threatened actions or proceedings to which such Borrower is a party, and there
are no other pending or threatened actions or proceedings of which such Borrower
has knowledge, before any court, arbitrator or administrative agency, which,
either individually or in the aggregate, would have a Material Adverse Effect.
Further, such Borrower is not in default under any material obligation for
the
payment of borrowed money, for the deferred purchase price of property or for
the payment of any rent which, either individually or in the aggregate, would
have a Material Adverse Effect.
(f)
Fixtures.
With
the exception of certain tenant improvements and soft costs included in Other
Equipment, under the laws of the state(s) in which the Collateral is to be
located, the Collateral consists solely of personal property and not
fixtures.
(g) Title
to Financed Equipment; Lien on Financed Equipment.
Upon
payment in full of the acquisition cost of the Financed Equipment, the
applicable Borrower will have good and marketable title to the Financed
Equipment, free and clear of all Liens (excepting only the Lien of Lender).
Upon
the last to occur of: (1) delivery of an item of Financed Equipment, (2) payment
to the vendor of the acquisition cost of such item of the Financed Equipment,
(3) advance by Lender to Borrowers of the Loan relating to such item of the
Financed Equipment, and (4) filing in the appropriate public offices of Uniform
Commercial Code financing statements or statements of amendment naming each
Borrower as debtor and Lender as secured party, and accurately describing such
item of the Financed Equipment, all as provided in the UCC, Lender will have
a
valid, perfected, first priority purchase money security interest in such item
of the Financed Equipment, subject only to Permitted Liens, and, in each case,
to the extent that a security interest in such item of Financed Equipment can
be
perfected by the filing of UCC financing statements.
5
Exhibit
10.1
| |
EXECUTION
COPY
|
(h) Financial
Statements.
The
financial statements of such Borrower (copies of which have been furnished
to
Lender) have been prepared in accordance with generally accepted accounting
principles consistently applied (“GAAP”), and fairly present such Borrower’s
financial condition and the results of such Borrower’s operations as of the date
of and for the period covered by such statements, and since the date of such
statements there has been no material adverse change in such conditions or
operations.
(i)
Taxes.
Such
Borrower has filed or has caused to have been filed all federal, state and
local
tax returns which, to the knowledge of such Borrower, are required to be filed,
and has paid or caused to have been paid all taxes as shown on such returns
or
on any assessment received by it, to the extent that such taxes have become
due,
unless and to the extent only that such taxes, assessments and governmental
charges are currently contested in good faith and by appropriate proceedings
by
such Borrower and adequate reserves therefor have been established as required
under GAAP. To the extent Borrower believes it advisable to do so, such Borrower
has set up reserves which are believed by such Borrower to be adequate for
the
payment of additional taxes for years which have not been audited by the
respective tax authorities.
(j)
Use
of
Proceeds.
None of
the proceeds of the Loan will be used, directly or indirectly, by such Borrower
for the purpose of purchasing or carrying, or for the purpose of reducing or
retiring any indebtedness which was originally incurred to purchase or carry,
any “margin security” within the meaning of Regulation G (12 CFR Part 207), or
“margin stock” within the meaning of Regulation U (12 CFR Part 221), of the
Board of Governors of the Federal Reserve System (herein called “margin
security” and “margin stock”) or for any other purpose which might make the
transactions contemplated herein a “purpose credit” within the meaning of
Regulation G or Regulation U, or cause this Agreement to violate any other
regulation of the Board of Governors of the Federal Reserve System or the
Securities Exchange Act of 1934 or the Small Business Investment Act of 1958,
as
amended, or any rules or regulations promulgated under any of such
statutes.
(k)
Name
Changes.
As of
the Closing Date, the legal name, jurisdiction of organization, Federal Employer
Identification Number and Organizational Number of such Borrower, specified
on
the signature page hereof, are true and correct. Within the previous six (6)
years, such Borrower has not changed its name, done business under any other
name, or merged or been the surviving entity of any merger, except as disclosed
to Lender in writing.
(l)
Compliance
with Laws.
Such
Borrower is in compliance with the requirements of all Applicable Laws
(including Environmental Laws), except for such Laws the noncompliance with
which could not reasonably be expected to have a Material Adverse Effect and
such Borrower has obtained any and all material licenses, permits, franchises
or
other governmental authorizations necessary for the ownership of its properties
and the conduct of its business. Except as set forth in Schedule 5(l) attached
hereto and as otherwise previously disclosed in writing by Borrowers to Lender,
there are no Hazardous Substances generated, treated, handled, stored,
transported, discharged, emitted, released or otherwise disposed of in
connection with Borrowers’ use of the Collateral that could reasonably be
expected to result in any material liability or obligations. Borrowers have
in
full force and effect all material Federal, state and local licenses, permits,
orders and approvals required to operate the Collateral in compliance with
all
Environmental Laws in all material respects. Neither such Borrower nor, to
the
knowledge of any Borrower, its Affiliates or any of its or their respective
agents acting or benefiting in any capacity in connection with the transactions
contemplated by this Agreement is (i) in violation of any Anti-Terrorism
Law, (ii) engages in or conspires to engage in any transaction that evades
or avoids, or has the purpose of evading or avoiding, or attempts to violate,
any of the prohibitions set forth in any Anti-Terrorism Law, or (iii) is a
Blocked Person. Neither such Borrower nor, to the knowledge of such Borrower,
any of its Affiliates or its or their agents acting or benefiting in any
capacity in connection with the transactions contemplated by this Agreement,
(x) conducts any business or engages in making or receiving any
contribution of funds, goods or services to or for the benefit of any Blocked
Person, or (y) deals in, or otherwise engages in any transaction relating
to, any property or interest in property blocked pursuant to Executive Order
No. 13224, any similar executive order or other Anti-Terrorism
Law.
6
Exhibit
10.1
| |
EXECUTION
COPY
|
(m) Bailees.
The
Collateral consisting of Financed Equipment is not in the possession of any
third party bailee (such as a warehouse) except for Collateral which has been
sent out for service, and as otherwise disclosed to Lender in
writing.
6. Covenants
of Borrowers.
Each
Borrower covenants and agrees as follows:
(a) Compliance
with Laws.
Each
Borrower shall maintain its legal existence and good standing in its
jurisdiction of formation and maintain qualification in each jurisdiction in
which the failure to so qualify would reasonably be expected to have a Material
Adverse Effect. Each Borrower shall comply with the requirements of all
Applicable Laws (including Environmental Laws), except for such Applicable
Laws
the noncompliance with which could not reasonably be expected to have a Material
Adverse Effect. Each Borrower shall obtain and maintain any and all material
licenses, permits, franchises or other governmental authorizations necessary
for
the ownership of its properties and the conduct of its business in compliance
with all Applicable Laws (including, without limitation, Environmental Laws)
in
all material respects.
(b) Use
of
Proceeds.
The
proceeds of the Loan will be used exclusively to pay off in full the GECC Debt
and to finance the purchase by Borrowers of Financed Equipment.
(c) Use
and Location of Financed Equipment.
Each
Borrower shall use the Financed Equipment solely in the Continental United
States and in the conduct of its business, in a careful and proper manner in
accordance with Applicable Law; shall not permanently discontinue use of the
Financed Equipment; and shall provide written notice to Lender not more than
thirty (30) days after any change of the location of any item of the Financed
Equipment (or the location of the principal garage of any item of the
Collateral, to the extent that such item is mobile collateral) as specified
on
the applicable Collateral Schedule.
(d) Insurance.
(1) Each
Borrower
agrees to keep the Collateral insured against loss or damage by fire and
extended coverage perils, theft, burglary, and if requested by Lender, against
such other risks as Lender may reasonably require. The insurance coverage shall
be in an amount no less than the full replacement value of the Collateral,
and
deductible amounts, insurers and policies shall be acceptable to Lender. All
such insurance shall be provided by insurers having an A.M. Best policyholders
rating reasonably acceptable to Lender.
(2) On
or
prior to the Closing Date, and at all times thereafter, each Borrower will
cause
Lender to be named as an additional insured, assignee and loss payee (which
shall include, as applicable, identification as mortgagee), as applicable,
on
each insurance policy required to be maintained pursuant to this Section 5(d)
pursuant
to endorsements in form and content reasonably acceptable to Lender.
Borrowers will deliver to Lender (A) on the Closing Date, a certificate
from Borrowers’ insurance broker dated such date showing the amount of coverage
as of such date, and that such policies will include effective waivers (whether
under the terms of any such policy or otherwise) by the insurer of all claims
for insurance premiums against all loss payees and additional insureds and
all
rights of subrogation against all loss payees and additional insureds, and
that
if all or any part of such policy is canceled, terminated or expires, the
insurer will forthwith give notice thereof to each additional insured, assignee
and loss payee and that no cancellation, reduction in amount or material change
in coverage thereof shall be effective until at least thirty (30) days after
receipt by each additional insured, assignee and loss payee of written notice
thereof, (B) upon the request of Lender from time to time full information
as to the insurance carried, (C) within five (5) days of receipt of notice
from any insurer, a copy of any notice of cancellation, nonrenewal or material
change in coverage from that existing on the date of this Agreement, and
(D) forthwith, notice of any cancellation or nonrenewal of coverage by any
Borrower.
7
Exhibit
10.1
| |
EXECUTION
COPY
|
(3) So
long
as Borrowers are not in default under this Agreement, proceeds of insurance
less
than One Hundred Thousand Dollars ($100,000) shall be applied at the Borrowers’
option, to repair or replace the Collateral or to reduce any of the Obligations,
otherwise insurance proceeds shall be applied, at the option of Lender, to
repair or replace the Collateral or to reduce any of the
Obligations.
(e) Notice
of Certain Events.
Each
Borrower shall provide written notice to Lender: (1) not less than thirty (30)
days prior to any contemplated change in the name, the jurisdiction of
organization, or address of the chief executive office, of such Borrower or
of
such Borrower’s organizational structure such that a filed financing statement
would become seriously misleading (within the meaning of the UCC); and (2)
promptly upon the occurrence of any event which constitutes a Default (as
hereinafter defined) hereunder or which, with the giving of notice, lapse of
time or both, would constitute a Default hereunder; (3) promptly of any
litigation or governmental proceedings pending or threatened (in writing)
against such Borrower which, if adversely determined, could result in a Material
Adverse Effect or a material adverse effect upon, any of (i) the rights and
remedies of Lender under any Financing Document, or (ii) the legality,
validity or enforceability of any Financing Document, (iii) the existence,
perfection or priority of any security interest granted in any Financing
Document, or (iv) the value of any material Collateral; and (4) promptly of
the
commencement of proceedings under the Federal bankruptcy laws or other
insolvency laws (as now or hereafter in effect) involving such Borrower as
a
debtor.
(f) Financial
Statements.
Each
Borrower shall furnish Lender (1) within one hundred twenty (120) days after
the
end of each fiscal year of such Borrower, its balance sheet as at the end of
such year, and the related statement of income and statement of changes in
financial position for such fiscal year, prepared in accordance with GAAP,
all
in reasonable detail and certified by independent certified public accountants
of recognized standing selected by such Borrower and reasonably acceptable
to
Lender; and (2) within sixty (60) days after the end of each quarter of such
Borrower’s fiscal year, its balance sheet as at the end of such quarter and the
related statement of income and statement of changes in financial position
for
such quarter, prepared in accordance with GAAP.
(g) Collateral.
Each
Borrower, at its own expense, will pay or cause to be paid all taxes and fees
relating to the ownership and use of the Collateral and will keep and maintain,
or cause to be kept and maintained, the Financed Equipment in accordance with
the manufacturer’s recommended specifications, and in good operating condition,
ordinary wear and tear resulting from proper use thereof excepted, and will
provide all maintenance and service and make all repairs necessary for such
purpose. All accessories, parts and replacements for or which are added to
or
become attached to the Collateral shall immediately be deemed incorporated
in
the Collateral and subject to the security interest granted by such Borrower
herein. Upon at least five (5) Business Days’ advance notice and at all times
subject to and in accordance with and subject to Borrower’s policies and
operating procedures with regard to access to any manufacturing and laboratory
areas, Lender shall have the right to inspect the Collateral and all maintenance
and other records with respect thereto, if any, at any reasonable
time.
(h) Landlord
Waivers.
The
parties intend that the Collateral shall remain personal property,
notwithstanding the manner in which it may be affixed to any real property.
Each
Borrower shall obtain and deliver to Lender (to be recorded at Borrower’s
expense) from each person having a Lien on the property (the “Premises”) where
the Collateral is to be located, waivers of any Lien or other interest which
such person might have or hereafter obtain or claim with respect to the
Collateral.
(i)
Bailee
Agreements.
None of
the components of the Collateral shall be maintained at locations other than
as
provided in writing to Lender or as Borrowers have given Lender notice. In
the
event that any Borrower, after the date hereof, intends to store or otherwise
deliver any portion of the Collateral to a bailee, then such Borrower will
first
receive the written consent of Lender and such bailee must execute and deliver
a
bailee agreement in form and substance satisfactory to Lender in its sole
discretion.
(j)
Dispositions.
No
Borrower will, without
the prior written consent of Lender, which consent is in Lender’s sole and
absolute discretion, convey, sell, lease, transfer or otherwise dispose of
(collectively, “Transfer”) all or any part of the Collateral, except for
Transfers (1)
in
connection with Permitted Liens; and (2) in
the case of Collateral other than Financed Equipment, in connection with the
formation and operation of strategic alliances, partnerships and collaborative
arrangements related to the development, marketing, sales and distribution
of
any Borrower’s product candidates, and of non-exclusive licenses for the use of
the property of Borrower in the ordinary course of business.
8
Exhibit
10.1
| |
EXECUTION
COPY
|
(k)
[Reserved].
(l)
Liens.
Each
Borrower shall maintain the Collateral free from all claims, Liens and legal
processes of creditors of such Borrower other than the security interest granted
to Lender under this Agreement and (1) Liens for fees, taxes, or other
governmental charges of any kind which are not yet delinquent or are being
contested in good faith by appropriate proceedings which suspend the collection
thereof (provided, however, that such proceedings do not involve any substantial
danger of the sale, forfeiture or loss of the Collateral or any interest
therein); (2) inchoate Liens of landlords, mechanics, materialmen, laborers,
employees or suppliers and similar Liens arising by operation of law incurred
by
such Borrower in the ordinary course of business for sums that are not yet
delinquent or are being contested in good faith by negotiations or by
appropriate proceedings which suspend the collection thereof (provided, however,
that such contest does not involve any substantial danger of the sale,
forfeiture or loss of the Collateral or any interest therein); (3) Liens arising
out of any judgments or awards against such Borrower which have been adequately
bonded to protect Lender’s interests or with respect to which a stay of
execution has been obtained pending an appeal or a proceeding for review; and
(4) Liens existing on the date hereof and described in Schedule 6(l). Each
Borrower shall notify Lender immediately upon receipt of notice of any Lien,
attachment or judicial proceeding affecting the Collateral in whole or in
part.
(m) [Reserved].
(n) Anti-Terrorism
Laws.
Lender
hereby notifies each Borrower that pursuant to the requirements of
Anti-Terrorism Laws, and Lender’s policies and practices, Lender is required to
obtain, verify and record certain information and documentation that identifies
such Borrower, and its principals, which information includes the name and
address of such Borrower and its principals and such other information that
will
allow Lender to identify such party in accordance with Anti-Terrorism Laws.
No
Borrower will, or will permit any of its subsidiaries to, directly or
indirectly, knowingly enter into any operative documents or material contracts
with any Blocked Person or any Person listed on the OFAC Lists. Each Borrower
shall immediately notify Lender if such Borrower has knowledge that such
Borrower becomes a Blocked Person or becomes listed on the OFAC Lists or
(a) is convicted on, (b) pleads nolo
contendere
to,
(c) is indicted on, or (d) is arraigned and held over on charges
involving money laundering or predicate crimes to money laundering. No Borrower
will, or will permit any subsidiaries to, directly or indirectly,
(i) conduct any business or engage in any transaction or dealing with any
Blocked Person, including, without limitation, the making or receiving of any
contribution of funds, goods or services to or for the benefit of any Blocked
Person, (ii) deal in, or otherwise engage in any transaction relating to,
any property or interests in property blocked pursuant to Executive Order
No. 13224, any similar executive order or other Anti-Terrorism Law, or
(iii) engage in or conspire to engage in any transaction that evades or
avoids, or has the purpose of evading or avoiding, or attempts to violate,
any
of the prohibitions set forth in Executive Order No. 13224 or other
Anti-Terrorism Law.
(o) Further
Assurances.
Each
Borrower shall promptly and duly execute and deliver to Lender such further
documents, instruments and assurances and take such further action as Lender
may
from time to time reasonably request in order to carry out the intent and
purpose of this Agreement and to establish and protect the rights and remedies
created or intended to be created in favor of Lender hereunder; including,
without limitation, the execution and delivery of any document reasonably
required, and payment of all necessary costs to record such documents (including
payment of any documentary or stamp tax), to perfect and maintain perfected
the
security interest granted under this Agreement.
7. Default.
A
default
shall be deemed to have occurred hereunder (“Default”) upon the occurrence of
any of the following:
(a) Payment
Default.
(1)
Non-payment of an
installment of principal and/or interest due under the Promissory Note on the
applicable payment date; or (2) non-payment of any other Obligation within
five (5) days after it is due; provided that any non-payment caused by a failure
of Lender to process an ACH payment under an ACH Agreement shall not constitute
a Payment Default until five (5) days after Borrower shall receive from Lender
a
request in writing to initiate such payment;
9
Exhibit
10.1
| |
EXECUTION
COPY
|
(b) Covenant
Default.
(1)
Breach by any Borrower of any covenant, condition or agreement set forth in
Section 5 above; or (2) breach by any Borrower of any other covenant, condition
or agreement under this Agreement or any of the other Financing Documents that
continues for thirty (30) days after Lender’s written notice to such Borrower
(but such notice and cure period will not be applicable unless such breach
is
curable by practical means within such notice period);
(c) Other
Agreements.
A
payment or other default by any Borrower under any loan, lease, guaranty or
other financial obligation to Lender or its Affiliates which default entitles
Lender or its Affiliates to exercise remedies; or a payment or other default
by
any Borrower under the Pharmabio Indebtedness or any other material loan, lease,
guaranty or other financial obligation to any third party if
the
effect of the default is to give such third party a right, whether or not
exercised, to accelerate the maturity of any Indebtedness in an amount in excess
of Five Hundred Thousand Dollars ($500,000) or that could have a Material
Adverse Effect;
(d) Misrepresentations.
An
inaccuracy in any representation or breach of warranty by any Borrower
(including any false or misleading representation or warranty) in any financial
statement or Financing Document, including any omission
of any material contingent or unliquidated liability or claim against such
Borrower;
(e) Insolvency.
The
failure by any Borrower generally to pay its debts as they become due or its
admission in writing of its inability to pay the same, or the commencement
of
any bankruptcy, insolvency, receivership or similar proceeding by or against
such Borrower or any of its properties or business (unless, if involuntary,
the
proceeding is dismissed within forty-five (45) days of the filing thereof)
or
the rejection of this Agreement or any other Financing Document in any such
proceeding;
(f) Attachment.
(1) Any
Collateral is attached seized, levied on, or comes into possession of a trustee
or receiver; (2) any Borrower is enjoined, restrained, or prevented by court
order from conducting any substantial part of its business; or (3) a notice
of
Lien, levy, or assessment is filed against any Collateral by any government
agency;
(g) Judgments.
One or
more judgments or orders for the payment of money (not paid or in amounts
exceeding insurance coverage maintained in accordance with the requirements
of
this Agreement and as to which the relevant insurance company has acknowledged
coverage) aggregating in excess of $300,000 shall be rendered against any
Borrower and either (1) enforcement proceedings shall have been commenced
by any creditor upon any such judgments or orders, or (2) there shall be
any period of thirty (30) consecutive days during which a stay of enforcement
of
any such judgments or orders, by reason of a pending appeal, bond or otherwise,
shall not be in effect;
(h) Dissolution.
Any
Borrower shall cease to do business as a going concern, liquidate, or dissolve;
or sell, transfer, or otherwise dispose of all or substantially all of its
assets or property;
(i) Material
Adverse Change.
Any
fact,
event or circumstance that has or that could reasonably be expected to result
in
a Material Adverse Effect occurs;
(j)
Guaranty.
Any
guaranty of any Obligations terminates or ceases for any reason to be in full
force and effect; any guarantor of the Obligations (“Guarantor”) does not
perform any obligation or covenant under any guaranty of the Obligations; there
occurs a default or anticipatory repudiation under any guaranty executed in
connection with this Agreement; any circumstance described in Sections 6(c)
through (i) occurs with respect to any Guarantor; or the death, liquidation,
winding up, or termination of existence of any Guarantor;
(k) PharmaBio
Indebtedness.
Principal Borrower pays any portion of the Pharmbio Indebtedness prior to the
due date thereof, without Lender’s prior written consent, unless Principal
Borrower has cash (immediately following such repayment) sufficient to cover
Principal Borrower’s publicly disclosed cash burn rate for the immediately
following twelve (12) months; or
10
Exhibit
10.1
| |
EXECUTION
COPY
|
(l)
Surfaxin
License.
The
License Agreement shall have been terminated or expired, or cease to be in
full
force and effect for the benefit of Principal Borrower.
8. Remedies.
(a) Upon
the
occurrence of a Default hereunder, Lender may, at its option, declare this
Agreement to be in default with respect to any or all of the Promissory Notes,
and at any time thereafter may do any one or more of the following, all of
which
are hereby authorized by Borrowers:
(1) increase
the Interest Rate under the Note to the Default Rate, declare all Obligations
due under the Promissory Note and Financing Documents to be immediately due
and
payable including all accrued but unpaid interest, prepayment fees, and any
other amounts due under the Financing Documents, exercise any and all rights
and
remedies of a secured party under the UCC in effect in the State of New York
at
the date of this Agreement and in addition to those rights, at its sole
discretion, may require Borrowers (at Borrowers’ sole expense) to forward
promptly any or all of the Collateral to Lender at such location as shall
reasonably be required by Lender, or enter upon the premises where any such
Collateral is located (without obligation for rent) and take immediate
possession of and remove the Collateral by summary proceedings or otherwise,
all
without liability from Lender to Borrowers for or by reason of such entry or
taking of possession, whether for the restoration of damage to property caused
by such taking or otherwise;
(2) subject
to any right of Borrowers to redeem the Collateral, sell, lease or otherwise
dispose of any or all of the Collateral in a commercially reasonable manner
at
public or private sale with notice to Borrowers (the parties agreeing that
ten
(10) days’ prior written notice shall constitute adequate notice of such sale)
at such price as it may deem best, for cash, credit, or otherwise, with the
right of Lender to purchase and apply the proceeds:
First,
to the
payment of all expenses and charges, including the expenses of any sale, lease
or other disposition, the expenses of any taking, reasonable attorneys’ fees,
court costs and any other expenses incurred or advances made by Lender in the
protection of its rights or the pursuance of its remedies, and to provide
adequate indemnity to Lender against all taxes and Liens which by law have,
or
may have, priority over the rights of Lender to the monies so received by Lender
(provided that amounts held by Lender as indemnity against taxes are applied
to
the payment of such taxes);
Second,
to the
payment of all fees, costs, indemnities, liabilities, obligations and expenses
incurred by or owing to Lender with respect to this Agreement, the other
Financing Documents or the Collateral;
Third,
to the
payment of the Obligations; and
Fourth,
to the
payment of any surplus thereafter remaining to Borrower or to whosoever may
be
entitled thereto;
and
in
the event that the proceeds are insufficient to pay the amounts specified in
clauses “First”, “Second”, and “Third” above, Lender may collect such deficiency
from Borrowers; and
(3) Lender
may exercise any other right or remedy available to it under this Agreement,
the
Promissory Note, any guaranty hereof or Applicable Law, or proceed by
appropriate court action to enforce the terms hereof or to recover damages
for
the breach hereof or to rescind this Agreement in whole or in part.
(b) Borrowers
shall be liable for any and all unpaid additional sums due hereunder or under
the Promissory Note, before, after or during the exercise of any of the
foregoing remedies; for all reasonable legal fees and other reasonable costs
and
expenses incurred in connection with the enforcement, assertion, default or
preservation of Lender’s rights and remedies under this Agreement or the other
Financing Documents. No remedy referred to in this Section is intended to be
exclusive, but each shall be cumulative, and shall be in addition to any other
remedy referred to above or otherwise available at law or in equity, and may
be
exercised concurrently or separately from time to time. Borrowers hereby waive
any and all existing or future claims to any offset against the sums due
hereunder or under the Promissory Note and agree to make the payments regardless
of any offset or claim which may be asserted by Borrowers or on their behalf
in
connection with this Agreement. The failure of Lender to
exercise, or delay in the exercise of, the rights granted hereunder upon any
Default by Borrowers shall not constitute a waiver of any such right upon the
continuation or recurrence of any such Default. Lender may take or release
other
security; may release any party primarily or secondarily liable for the
Obligations; may grant extensions, renewals or indulgences with respect to
the
Obligations and may apply any other security therefor held by it to the
satisfaction of the Obligations without prejudice to any of its rights
hereunder.
11
Exhibit
10.1
| |
EXECUTION
COPY
|
(c) The
occurrence of a Default with respect to any Promissory Note shall, at the sole
discretion of Lender (as set forth in a written declaration to Borrowers),
constitute a Default with respect to any or all of the other Promissory Notes.
Notwithstanding anything to the contrary set forth herein, Lender or its
assignee(s) (as applicable) may exercise all rights and remedies hereunder
or
under a Promissory Note independently with respect to each Promissory Note
and/or with respect to the Collateral collateralizing such Promissory
Note.
(d) Lender
is
hereby granted an irrevocable, non-exclusive, royalty-free license or other
right to use, without charge, Borrowers’ labels, mask works, rights of use of
any name, any other Intellectual Property and advertising matter, and any
similar property as it pertains to the Collateral, in completing production
of,
advertising for sale, and selling any Collateral and, in connection with
Lender’s exercise of its rights under this Agreement, Borrowers’ rights under
all licenses and all franchise agreements inure to Lender’s
benefit.
9. Lender’s
Right to Perform for Borrowers.
If
Borrowers fail to perform or comply with any of its agreements contained herein,
Borrowers and Lender agree that Lender shall have the right, but shall not
be
obligated, to effect such performance or compliance, and the amount of any
out-of-pocket expenses and other reasonable expenses of Lender thereby incurred,
together with interest thereon (calculated from the date Lender makes demand
for
payment thereof from Borrower) at the Default Rate, shall be due and payable
by
Borrowers upon demand. Borrowers hereby irrevocably, authorize Lender to file
UCC statements in connection with the Collateral, and further appoint Lender
as
Borrowers’ attorney-in-fact (which power shall be deemed coupled with an
interest) to execute, endorse and deliver any deed, conveyance, assignment
or
other instrument in writing as may be required to vest in Lender any right,
title or power which by the terms hereof are expressed to be conveyed to or
conferred upon Lender, including, documents and checks or drafts relating to
or
received in payment for any loss or damage under the policies of insurance
required by the provisions of Section 5(d) hereof, but only to the extent that
the same relates to the Collateral. If Borrowers fail to perform any obligation
hereunder or under any other Financing Document, Lender itself may, but shall
not be obligated to, cause such obligation to be performed at Borrowers’
expense. Lender is further authorized by Borrowers to make expenditures from
time to time which Lender, in its reasonable business judgment, deems necessary
or desirable to (a) preserve or protect the Collateral, or any portion
thereof, and/or (b) enhance the likelihood of, or maximize the amount of,
repayment of the Loan and other Obligations. Borrowers hereby agree to reimburse
Lender on demand for any and all costs, liabilities and obligations incurred
by
Lender pursuant to this Section 9. Lender hereby agrees to indemnify Lender
upon
demand for any and all costs, liabilities and obligations incurred by Lender
pursuant to this Section 9.
10.
Miscellaneous.
(a) Entire
Agreement; Captions.
This
Agreement and the other Financing Documents constitute the entire agreement
between the parties with respect to the subject matter hereof and shall not
be
amended or altered in any manner except pursuant to Section 10(n) below. All
representations, warranties, and covenants of Borrowers contained herein or
made
pursuant hereto shall survive closing and continue throughout the term hereof
and until the Obligations are satisfied in full. The provisions of Sections
7,
9, and 10 shall survive the payment of the Obligations and any termination
of
this Agreement and
any
judgment with respect to any Obligations, including any final foreclosure
judgment with respect to any Security Document, and no unpaid or unperformed,
current or future, Obligations will merge into any such judgment. Any provision
of this Agreement or of any instrument or document executed pursuant hereto
which is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof or
thereof, and any such prohibition or unenforceability in any jurisdiction shall
not invalidate or render unenforceable such provision in any other jurisdiction.
To the extent permitted by applicable law, Borrowers hereby waive any provision
of law which renders any provision hereof or thereof prohibited or unenforceable
in any respect. The captions in this Agreement are for convenience of reference
only and shall not define or limit any of the terms or provisions hereof.
The
Usury
Savings Provisions set forth in the Note are incorporated herein and in all
Financing Documents for all purposes.
12
Exhibit
10.1
| |
EXECUTION
COPY
|
(b) Counterparts;
Facsimile Signatures; Other Electronic Transmissions.
This
Agreement and all other Financing Documents may be executed in multiple
counterparts which together shall constitute one agreement, and any notices
to
be given pursuant to this Agreement, may be executed and delivered by facsimile
or other electronic transmission (i.e. PDF format) all with the same force
and
effect as if the same was a fully executed and delivered original counterpart.
The original counterparts of this Agreement and all Financing Documents shall
be
delivered by Borrowers, promptly after execution and failure to so deliver,
at
Lender’s option, shall be a Default, but failure to deliver shall in no way
limit or negate enforceability of any Financing Document.
(c) Notices.
All
notices (excluding xxxxxxxx and communications in the ordinary course of
business) hereunder shall be in writing, personally delivered, sent by overnight
courier service, sent by facsimile telecopier, or sent by certified mail, return
receipt requested, addressed to the other party at its respective address stated
below the signature of such parties or at such other addresses as such parties
shall from time to time designate in writing to the other parties; and shall
be
effective from the date of receipt.
(d) Assignments;
Participations; Replacement of Lender.
This
Agreement shall inure to the benefit of Lender, its successors and assigns,
and
shall be binding upon the successors of Borrowers. The rights and obligations
of
Borrowers under this Agreement may not be assigned or delegated. Lender reserves
the right to sell, assign, transfer, negotiate or grant participations (the
foregoing, collectively “Assign”) in all or any part of, or any interest in,
Lender’s rights and obligations hereunder, in the Promissory Notes, in the
Collateral and/or the Obligations held by it to others at any time and from
time
to time; and Lender may, subject to Section 10(j) below, disclose to any such
purchaser, assignee, transferee or participant (the “Participant”), or potential
Participant, this Agreement and all information, reports, financial statements
and documents executed or obtained in connection with this Agreement which
Lender now or hereafter may have relating to the Loan, Borrowers, or the
business of Borrowers. Notwithstanding anything to the contrary in this Section
9(d), so long as no Default shall have occurred and be continuing, (i)
Borrowers’ obligations under this Agreement shall be solely with respect to
Lender and Borrowers shall not be required to make payment or deliver notices,
reports or financial statements to, communicate with or otherwise perform its
obligations hereunder with reference to, any Participants of Lender, (ii) Lender
shall be solely responsible for the administration of Participants’ records and
any and all payments and communications to which Participants may be entitled
as
a result of any Assignment by Lender, and (iii) if Lender shall Assign all
of
its rights and interest under this Agreement, Lender shall designate a
successor, which shall assume Lender’s obligations to any Participants and, so
long as no Default shall have occurred and be continuing, Borrowers shall be
obligated solely with respect to such successor, which shall act as agent for
and on behalf of any other Participants
(e) NEW
YORK LAW GOVERNS; WAIVER OF JURY TRIAL.
THIS
AGREEMENT AND ALL OTHER RELATED INSTRUMENTS AND DOCUMENTS AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES HEREUNDER AND THEREUNDER SHALL, IN ALL RESPECTS,
BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE
OF
NEW YORK (WITHOUT REGARD TO THE CONFLICT OF LAWS PRINCIPLES OF SUCH STATE),
INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE, REGARDLESS
OF
THE LOCATION OF THE COLLATERAL.
The
parties agree that any action or proceeding arising out of or relating to this
Agreement may be commenced in any state or Federal court of competent
jurisdiction in the Borough of Manhattan, New York County, New York and each
party submits to the jurisdiction of such court and agrees that a summons and
complaint commencing an action or proceeding in any such court shall be properly
served and shall confer personal jurisdiction if served personally or by
certified mail to it at its address designated pursuant hereto, or as otherwise
provided under the laws of the State of New York.
13
Exhibit
10.1
| |
EXECUTION
COPY
|
BORROWERS
HEREBY WAIVE TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO WHICH ANY BORROWER
OR
LENDER MAY BE PARTIES, ARISING OUT OF OR IN ANY WAY PERTAINING TO THIS AGREEMENT
OR THE PROMISSORY NOTE. BORROWERS AUTHORIZE LENDER TO FILE THIS PROVISION WITH
THE CLERK OR JUDGE OF ANY COURT HEARING SUCH CLAIM. THIS WAIVER IS KNOWINGLY,
WILLINGLY AND VOLUNTARILY MADE BY BORROWER AND BORROWERS HEREBY ACKNOWLEDGE
THAT
NO REPRESENTATIONS OF FACT OR OPINION HAVE BEEN MADE BY ANY INDIVIDUAL TO INDUCE
THIS WAIVER OF TRIAL BY JURY OR IN ANY WAY TO MODIFY OR NULLIFY ITS EFFECT.
BORROWERS FURTHER ACKNOWLEDGE THAT THEY HAVE BEEN REPRESENTED IN THE SIGNING
OF
THIS AGREEMENT AND THE PROMISSORY NOTE AND IN THE MAKING OF THIS WAIVER BY
LEGAL
COUNSEL, SELECTED OF THEIR OWN FREE WILL, AND THAT IT HAS HAD THE OPPORTUNITY
TO
DISCUSS THIS WAIVER WITH COUNSEL.
(f)
Lender
Expenses.
Borrower agrees to reimburse Lender for all reasonable legal, audit and
appraisal fees and all other reasonable out-of-pocket charges and expenses
incurred by Lender (including the fees and expenses of Lender’s counsel,
advisors and consultants) in connection with the negotiation, preparation,
legal
review and execution of each of the Financing Documents, provided that the
aggregate amount of such reimbursements for fees and expenses through the
Closing Date shall not exceed, in the aggregate, Fifty Thousand Dollars
($50,000). In addition, Borrowers shall pay all such fees and expenses
associated with any amendments, modifications and terminations to the Financing
Documents following closing.
(g) Indemnification.
Borrowers hereby indemnify and agree to defend (with counsel reasonably
acceptable to Lender) and hold harmless Lender and its shareholders, directors,
partners, officers, agents and employees (collectively in the singular,
“Indemnitee”) from and against any liability, loss, cost, expense (including
reasonable attorneys’ fees and expenses of counsel), claim, damage, suit, action
or proceeding ever suffered or incurred by any Indemnitee or in which an
Indemnitee may ever be or become involved (whether as a party, witness or
otherwise) (1) arising from any Borrower’s failure to observe, perform or
discharge any of its covenants, obligations, agreements or duties under the
Financing Documents, (2) arising from the breach of any of the
representations or warranties contained in any Financing Document,
(3) arising by reason of this Agreement, the other Financing Documents or
the transactions (other than between or among Lender and any Participant)
contemplated hereby or thereby, or (4) relating to claims of any Person (other
than Lender and any Participants) with respect to the Collateral; provided,
however, Borrower shall not be liable under this Section 10(g) to the extent
such loss is solely related to an Indemnitee’s gross negligence or willful
misconduct. Notwithstanding any contrary provision in this Agreement, the
obligations of Borrowers under this Section 10(g) shall survive the payment
in full of the Obligations and the termination of this Agreement.
(h) Waiver
of Consequential and Other Damages.
To the
fullest extent permitted by applicable law, Borrower shall not assert, and
Borrower hereby waives, any claim against any Indemnitee on any theory of
liability, for special, indirect, consequential or punitive damages (as opposed
to direct or actual damages) arising out of, in connection with, or as a result
of this Agreement, any other Financing Document or any agreement or instrument
contemplated hereby or thereby, the transactions contemplated hereby or thereby,
the Loan or the use of the proceeds thereof.
(i)
Joint
and Several Liability.
Borrowers are defined collectively to include all Persons named as one of the
Borrowers herein; provided, however, that any references herein to “any
Borrower”, “each Borrower” or similar references, shall be construed as a
reference to each individual Person named as one of the Borrowers herein. Each
Person so named shall be jointly and severally liable for all of the obligations
of Borrowers under this Agreement. Each Borrower, individually, expressly
understands, agrees and acknowledges, that the credit facilities would not
be
made available on the terms herein in the absence of the collective credit
of
all of the Persons named as the Borrowers herein, the joint and several
liability of all such Persons, and the cross-collateralization of the collateral
of all such Persons. Accordingly, each Borrower, individually acknowledges
that
the benefit to each of the Persons named as one of the Borrowers as a whole
constitutes reasonably equivalent value, regardless of the amount of the credit
facilities actually borrowed by, advanced to, or the amount of collateral
provided by, any individual Borrower. In addition, each entity named as one
of
the Borrowers herein hereby acknowledges and agrees that all of the
representations, warranties, covenants, obligations, conditions, agreements
and
other terms contained in this Agreement shall be applicable to and shall be
binding upon and measured and enforceable individually against each Person
named
as one of the Borrowers herein as well as all such Persons when taken
together.
14
Exhibit
10.1
| |
EXECUTION
COPY
|
(j)
Confidentiality.
Lender
shall hold all non-public information regarding the Borrower and its business
identified as such by Borrower and obtained by Lender pursuant to the
requirements hereof (“Confidential Information”) in accordance with Lender’s
customary procedures for handling information of such nature, except that
disclosure of such information may be made (1) to its agents, employees,
subsidiaries, affiliates, attorneys, auditors, professional consultants, rating
agencies, insurance industry associations and portfolio management services,
(2) to prospective transferees or purchasers of any interest in the Loan,
provided,
however,
that
any such Persons shall have entered into a confidentiality and non-disclosure
agreement with Lender, (3) as required by Law, subpoena, judicial order or
similar order and in connection with any litigation, (4) to an examiner,
auditor or investigator as may be required in connection with the examination,
audit or similar investigation of such Person, and (5) to a Person that is
a trustee, investment advisor, collateral manager, servicer, noteholder or
secured party in a Securitization (as hereinafter defined) in connection with
the administration, servicing and reporting on the assets serving as collateral
for such Securitization. For the purposes of this Section, “Securitization”
shall mean a public or private offering by Lender or any Affiliate of Lender
or
their respective successors and assigns, of securities which represent an
interest in, or which are collateralized, in whole or in part, by the Loan.
Confidential information shall include only such information identified as
such
at the time provided Lender shall not include information that either:
(A) is in the public domain, or becomes part of the public domain after
disclosure to such Person through no fault of such Person, or (B) is
disclosed to such Person by a Person other than Borrower, provided,
however,
such
discloser does not have actual knowledge that such Person is prohibited from
disclosing such information. The obligations of Lender under this
Section 10(j) shall supersede and replace the obligations of Lender under
any confidentiality agreement in respect of this financing executed and
delivered by Lender prior to the date hereof.
(k) Customer
Identification- USA Patriot Act Notice; OFAC and Bank Secrecy
Act.
Lender
hereby notifies Borrowers and Guarantor that pursuant to the requirements of
the
USA Patriot Act (Title III of Pub. L. 107-56, signed into law October 26, 2001)
(the “Act”), and Lender’s policies and practices, Lender is required to obtain,
verify and record certain information and documentation that identifies each
Borrower, which information includes the name and address of each Borrower
and
such other information that will allow Lender to identify each Borrower and
Guarantor in accordance with the Act. In addition, each Borrower shall (1)
ensure that no Person who owns a controlling interest in or otherwise controls
any Borrower or any subsidiary of any Borrower is or shall be listed on the
Specially Designated Nationals and Blocked Person List or other similar lists
maintained by the Office of Foreign Assets Control (“OFAC”), the Department of
the Treasury or included in any Executive Orders, (2) not use or permit the
use
of the proceeds of the Loan to violate any of the foreign asset control
regulations of OFAC or any enabling statute or Executive Order relating thereto,
and (3) comply, and cause any of its subsidiaries to comply, with all applicable
Bank Secrecy Act (“BSA”) laws and regulations, as amended.
(l) No
Use
of Xxxxxxx Xxxxx Name.
No
Borrower will directly or indirectly publish, disclose or otherwise use in
any
advertising or promotional material, or press release or interview, the name,
logo or any trademark of Lender, Xxxxxxx Xxxxx & Co., Inc., or any of its or
their affiliates. Notwithstanding the foregoing, Lender understands and
acknowledges that Borrower intends to issue a press release announcing the
execution of this Agreement, in such form as is reasonably acceptable to Lender,
will file a Form 8-K with the Securities and Exchange Commission, to which
will
be attached the press release and copies of the material Financing Documents,
and will take such other actions, including discussing the closing of the Loan
in stockholder conference calls, as Borrower shall deem necessary or appropriate
to comply with Borrower’s disclosure obligations under the federal securities
laws.
(m)
Time. Time
is
of the essence in each Borrower’s performance under this Agreement and all other
Financing Documents.
(n) Amendments
and Waivers.
No
provision of this Agreement or any other Financing Document may be amended,
waived or otherwise modified unless such amendment, waiver or other modification
is in writing and is signed or otherwise approved by Borrowers, and
Lender.
11. Reserved.
15
Exhibit
10.1
| |
EXECUTION
COPY
|
12. Definitions
and Rules of Construction.
The
following terms when used in this Agreement or in the other Financing Documents
have the following meanings:
“Accounts”
means
collectively (a) any right to payment of a monetary obligation, whether or
not earned by performance, (b) without duplication, any “account” (as
defined in the UCC), any accounts receivable (whether in the form of payments
for services rendered or goods sold, rents, license fees or otherwise), any
“health-care-insurance receivables” (as defined in the UCC), any “payment
intangibles” (as defined in the UCC) and all other rights to payment and/or
reimbursement of every kind and description, whether or not earned by
performance, (c) all accounts, “general intangibles” (as defined in the
UCC), Intellectual Property, rights, remedies, guarantees, “supporting
obligations” (as defined in the UCC), “letter-of-credit rights” (as defined in
the UCC) and security interests in respect of the foregoing, all rights of
enforcement and collection relating to the foregoing, all books and records
evidencing or related to the foregoing, and all rights under the Financing
Documents in respect of the foregoing, (d) all information and data
compiled or derived by any Borrower or to which any Borrower is entitled in
respect of or related to the foregoing, and (e) all proceeds of any of the
foregoing.
“Affiliate”
means,
with respect to any Person (a) any Person that directly or indirectly
controls such Person, (b) any Person which is controlled by or is under
common control with such controlling Person, and (c) each of such Person’s
(other than, with respect to Lender, Lender’s) officers or directors (or Persons
functioning in substantially similar roles) and the spouses, parents,
descendants and siblings of such officers, directors or other Persons. As used
in this definition, the term “control” of a Person means the possession,
directly or indirectly, of the power to vote five percent (5%) or more of any
class of voting securities of such Person or to direct or cause the direction
of
the management or policies of a Person, whether through the ownership of voting
securities, by contract or otherwise.
“Applicable
Law”
or
“Law”:
any
law, rule, regulation, ordinance, order, code, common law, interpretation,
judgment, directive, decree, treaty, injunction, writ, determination, award,
permit or similar norm or decision of any Governmental Authority and
“Anti-Terrorism
Laws”
means
any Laws relating to terrorism or money laundering, including Executive Order
No. 13224 (effective September 24, 2001), the USA PATRIOT Act, the
Laws comprising or implementing the Bank Secrecy Act, and the Laws administered
by OFAC.
“Blocked
Person”
means
any Person: (a) listed in the annex to, or is otherwise subject to the
provisions of Change of Control, Executive Order No. 13224, (b) owned
or controlled by, or acting for or on behalf of, any Person that is listed
in
the annex to, or is otherwise subject to the provisions of, Executive Order
No. 13224, (c) with which Lender is prohibited from dealing or
otherwise engaging in any transaction by any Anti-Terrorism Law, (d) that
commits, threatens or conspires to commit or supports “terrorism” as defined in
Executive Order No. 13224, or (v) that is named a “specially
designated national” or “blocked person” on the most current list published by
OFAC or other similar list or is named as a “listed person” or “listed entity”
on other lists made under any Anti-Terrorism Law.
“Business
Day”
shall
mean any day other than a Saturday, a Sunday, and any day on which the New
York
Stock Exchange is authorized by law or other governmental action to
close.
“Collateral”
means
(a)
at all times prior to the Collateral Modification Date, the property listed
on
Schedule 1-A attached hereto (provided, however, that the property listed on
Annex A attached hereto shall not be deemed a part of the Collateral until
Lender funds the initial advance under the Loan), and (b) commencing on the
Collateral Modification Date (provided that no Default has occurred and is
continuing at such time) and at all times thereafter, the property listed on
Schedule 1-B attached hereto.
“Collateral
Modification Date”
means of
the earlier to occur of (a) the receipt by the Principal Borrower of the FDA
Approval or (b) the Principal Borrower has maintained, over a continuous
twelve-month period ending on or after March 31, 2008, measured at the end
of
each calendar quarter, a minimum cash balance equal to the Principal Borrower’s
projected cash requirements for the following twelve-month period.
16
Exhibit
10.1
| |
EXECUTION
COPY
|
“Collateral
Schedule”,
with
respect to each Equipment Advance, means a schedule, in substantially the form
attached to this Agreement as Exhibit 2, describing the Financed Equipment
acquired with the proceeds of the Loan, now or hereafter executed in connection
with such Equipment Advance and the Promissory Note.
“Debt”
of
a
Person means at any date, without duplication, (a) all obligations of such
Person for borrowed money, (b) all obligations of such Person evidenced by
bonds, debentures, notes or other similar instruments, (c) all obligations
of such Person to pay the deferred purchase price of property or services,
except trade accounts payable arising and paid on a timely basis and in the
ordinary course of business, (d) all capital leases of such Person,
(e) all non-contingent obligations of such Person to reimburse any bank or
other Person in respect of amounts paid under a letter of credit, banker’s
acceptance or similar instrument, (f) all equity securities of such Person
subject to repurchase or redemption otherwise than at the sole option of such
Person, (g) all obligations secured by a Lien on any asset of such Person,
whether or not such obligation is otherwise an obligation of such Person,
(h) ”earnouts”, purchase price adjustments, profit sharing arrangements,
deferred purchase money amounts and similar payment obligations or continuing
obligations of any nature of such Person arising out of purchase and sale
contracts, (i) all Debt of others guaranteed by such Person, (j) off-balance
sheet liabilities and/or pension plan liabilities of such Person, (k)
obligations arising under non-compete agreements, and (l) obligations arising
under bonus, deferred compensation, incentive compensation or similar
arrangements, other than those arising in the ordinary course of business.
Without duplication of any of the foregoing, Debt of Borrowers shall include
any
and all Loans.
“Draw
Period”
is
the
period of time from the date hereof through the earlier to occur of (a) May
31, 2008, or (b) a Default; provided, however, that if a Default has not
occurred and is not continuing as of May 31, 2008 and the full amount of the
Loan has not been advanced prior to such date then Lender shall consider, on
a
best efforts basis, extending the Draw Period by an additional six months.
The
Draw Period shall not be deemed to be extended beyond May 31, 2008 unless Lender
provides written notice of such extension to Borrowers.
“Eligible
Equipment”
is
the
following to the extent it complies with all of Borrower’s representations and
warranties to Lender, is acceptable to Lender in all respects, is located at
a
location of Borrower listed in Borrower’s Schedule and identified on the
applicable Collateral Schedule, or such other location of which Lender has
approved in writing, and is subject to a first priority Lien in favor of Lender:
(a) equipment financed in connection with the GECC Debt, (b) new laboratory
and
manufacturing equipment and (c) Other Equipment.
“Eligible
Market”
means
any national securities exchange, the NASDAQ Global Select Market, the NASDAQ
Global Market or the NASDAQ Capital Market.
“Environmental
Law”
shall
mean any present or future federal, foreign, state or local law, ordinance,
order, rule or regulation and all judicial, administrative and regulatory
decrees, judgments and orders, pertaining to health, industrial hygiene, the
use, disposal or transportation of Hazardous Substances, environmental
contamination, or pertaining to the protection of the environment, including,
but not limited to, the Comprehensive Environmental Response, Compensation,
and
Liability Act (“CERCLA”) (42 X.X.X. §0000 et seq.),
the
Hazardous Material Transportation Act (49 X.X.X. §0000 et seq.),
the
Federal Water Pollution Control Act (33 U.S.C. Section 1251 et seq.),
the
Resource Conservation and Recovery Act (42 U.S.C. §6901 et seq.),
the
Clean Air Act (42 X.X.X. §0000 et seq.),
the
Toxic Substances Control Act (15 U.S.C. § 2601 et seq.),
the
Federal Insecticide, Fungicide, and Rodenticide Act (7 X.X.X. §0000 et seq.),
the
Occupational Safety and Health Act (19 U.S.C. §651 et seq.),
the
Hazardous and Solid Waste Amendments (42 U.S.C. §2601 et seq.),
as
these laws have been or may be amended or supplemented, and any successor
thereto, and any analogous foreign, state or local statutes, and the rules,
regulations and orders promulgated pursuant thereto.
“Equipment
Line”
means
the lesser of (a) Twelve Million Five Hundred Thousand Dollars ($12,500,000)
or
(b) an amount equal to (i) Five Million Dollars ($5,000,000), plus (ii) the
proceeds of the Loan used to pay off the GECC Debt , plus (iii) the applicable
New Capital Availability Increase Amount.
17
Exhibit
10.1
| |
EXECUTION
COPY
|
“ERISA”
means
the Employee Retirement Income Security Act of 1974, as the same may be amended,
modified or supplemented from time to time, and any successor statute thereto,
and any and all rules or regulations promulgated from time to time
thereunder.
“Exchange
Act”
means
the Securities Exchange Act of 1934, as amended.
“FDA
Approval”
means
approval from the United States Food and Drug Administration of Principal
Borrower’s New Drug Application to market Surfaxin® for the prevention of
respiratory distress syndrome in premature infants.
“Financing
Documents”
has the
meaning set forth in Section 1(c) of this Agreement.
“Financed
Equipment” means,
with respect to an Equipment Advance, each and every item of Eligible
Equipment
financed
by such Equipment Advance.
“GECC
Payoff Equipment Advance”
means
the Equipment Advance for which the proceeds are used to repay the GECC
Debt.
“Governmental
Authority”
means
any federal, state, county, municipal, regional or other governmental authority,
agency, board, body, instrumentality or court, in each case, whether domestic
or
foreign.
“Hard
Costs” means
the
costs of all Eligible Equipment other than Other Equipment.
“Hard
Cost Equipment Advance”
means an
Equipment Advance the proceeds of which are used to finance the purchase of
Hard
Costs.
“Hazardous
Substances”
shall
mean and include hazardous substances as defined in CERCLA; oil of any kind,
petroleum products and their by-products, including, but not limited to, sludge
or residue; asbestos containing materials; polychlorinated biphenyls; any and
all other hazardous or toxic substances; hazardous waste, as defined in CERCLA;
medical waste; infectious waste; those substances listed in the United States
Department of Transportation Table (49 C.F.R. §172.101); explosives; radioactive
materials; and all other pollutants, contaminants and other substances regulated
or controlled by the Environmental Laws and any other substance that requires
special handling in its collection, storage, treatment or disposal under the
Environmental Laws.
“Intellectual
Property”
means,
with respect to any Person, (a) all patents, patent applications and like
protections, including improvements divisions, continuation, renewals, reissues,
extensions and continuations in part of the same, trademarks, trade names,
trade
styles, trade dress, service marks, logos and other business identifiers and,
to
the extent permitted under applicable law, any applications therefore, whether
registered or not, and the goodwill of the business of such Person connected
with and symbolized thereby, copyright rights, copyright applications, copyright
registrations and like protections in each work of authorship and derivative
works, whether published or unpublished, technology, know-how and processes,
operating manuals, trade secrets, rights to unpatented inventions and all
applications therefore and (b) all licenses therefore of any of the foregoing,
used in or necessary for the conduct of business by such Person and all claims
for damages by way of any past, present or future infringement of any of the
foregoing, including without limitation the license of Surfaxin.
“LIBOR
Rate”
means
a
rate per annum (rounded upwards, if necessary, to the nearest 1/100 of 1%)
equal
to (a) the rate of interest which is identified and normally published by
Bloomberg Professional Service Page BBAM 1 as the offered rate for loans in
United States dollars for the period of one (1) month under the caption British
Bankers Association LIBOR Rates as of 11:00 a.m. (London time) as adjusted
on a daily basis and effective on the second full Business Day after each such
day (unless such date is not a Business Day, in which event the next succeeding
Business Day will be used); divided
by
(b) the sum of one minus
the
daily average during the preceding month of the aggregate maximum reserve
requirement (expressed as a decimal) then imposed under Regulation D of the
Board of Governors of the Federal Reserve System (or any successor thereto)
for
“Eurocurrency Liabilities” (as defined therein). If Bloomberg Professional
Service (or another nationally-recognized rate reporting source acceptable
to
Lender) no longer reports the LIBOR or Lender determines in good faith that
the
rate so reported no longer accurately reflects the rate available to Lender
in
the London Interbank Market or if such index no longer exists or if
Page BBAM 1 no longer exists or accurately reflects the rate available to
Lender in the London Interbank Market, Lender may select a comparable
replacement index or replacement page, as the case may be.
18
Exhibit
10.1
| |
EXECUTION
COPY
|
“License
Agreement” means
the
Sublicense Agreement dated October 28, 1996 among Xxxxxxx & Xxxxxxx and
Ortho Pharmaceuticals Corporation, as licensors, and the Principal Borrower
(as
successor to Acute Therapeutics, Inc.), as licensee.
“Lien”
means,
with
respect to any asset, any mortgage, lien, pledge, charge, security interest
or
encumbrance of any kind, or any other type of preferential arrangement that
has
the practical effect of creating a security interest, in respect of such
asset.
“Material
Adverse Effect” shall
mean (1) a materially adverse effect on the business, condition (financial
or
otherwise), operations, performance or properties of any Borrower, or (2) any
impairment of the ability of any Borrower to perform its obligations under
or to
remain in compliance with the Financing Documents.
“Xxxxxxx
Xxxxx”
means
Xxxxxxx Xxxxx Capital, a division of Xxxxxxx Xxxxx Business Financial Services
Inc., and its successors.
“New
Capital Availability Increase Amount” means
an
amount equal to One Million Dollars ($1,000,000) for each Ten Million Dollars
($10,000,000) of new capital raised by the Principal Borrower from and after
the
date of this Agreement in connection with a stock offering, business development
partnerships or similar financings.
“Other
Equipment”
is
leasehold improvements, intangible property such as computer software and
software licenses, equipment specifically designed or manufactured for
Borrowers, other intangible property, limited use property and other similar
property and soft costs approved by Lender, including taxes, shipping, warranty
charges, freight discounts and installation expenses which are incurred by
a
Borrower in connection with the purchase of Eligible Equipment financed by
a
Hard Cost Equipment Advance.
“Other
Equipment Advance”
means
an Equipment Advance the proceeds of which are used to finance Other
Equipment.
“Participant”
has the
meaning set forth in Section 10(d)(iii).
“Person”
means
any individual, corporation, partnership, joint venture, or other legal entity
or a governmental authority, whether employed, hired, affiliated, owned,
contracted with, or otherwise related or unrelated to Lender
or
Borrowers.
“Pharmabio
Indebtedness” is
all
Indebtedness owed by Borrower to Pharmabio Development, Inc.
“Security
Document”
means
this Agreement and any other agreement, document or instrument executed
concurrently herewith or at any time hereafter pursuant to which one or more
Credit Parties or any other Person either (a) guarantees payment or performance
of all or any portion of the Obligations, and/or (b) provides, as security
for
all or any portion of the Obligations, a Lien on any of its assets in favor
of
Lender, as any or all of the same may be amended, supplemented, restated or
otherwise modified from time to time.
19
Exhibit
10.1
| |
EXECUTION
COPY
|
“Term
of the Equipment Advance”
shall
mean, with respect to each Hard Cost Equipment Advance, thirty-six (36) months;
with respect to each Other Equipment Advance, twenty-four (24) months; and
with
respect to the GECC Payoff Equipment Advance, twenty-seven (27) months.
“UCC”
or
“Uniform
Commercial Code”:
the
Uniform Commercial Code as in effect in the State of New York or in any other
applicable jurisdiction; and any reference to an article or section thereof
shall mean the corresponding article or section (however termed) of any such
applicable version of the Uniform Commercial Code.
The
following terms when used herein or in any of the Financing Documents shall
be
construed as follows: (a) “herein,”
“hereof,”
“hereunder,”
etc.:
in, of, under, etc. this Agreement or such other Financing Document in which
such term appears (and not merely in, of, under, etc. the section or provision
where the reference occurs); (b) “including”:
means
including without limitation unless such term is followed by the words “and
limited to,” or similar words; and (c) “or”:
at
least one, but not necessarily only one, of the alternatives enumerated. Any
defined term used in the singular preceded by “any” indicates any number of the
members of the relevant class. Any Financing Document or other agreement or
instrument referred to herein means such agreement or instrument as supplemented
and amended from time to time. Any reference to Lender,
a
Lender
or
Borrower shall include their successors and permitted assigns. Any reference
to
an Applicable Law shall also mean such Law as amended, superseded or replaced
from time to time.
[REMAINDER
OF THIS PAGE INTENTIONALLY LEFT BLANK]
20
Exhibit
10.1
| |
EXECUTION
COPY
|
IN
WITNESS WHEREOF, the parties hereto have caused this Credit and Security
Agreement to be duly executed as of the day and year first above
written.
|
LENDER:
|
BORROWER:
|
|
XXXXXXX
XXXXX CAPITAL, A DIVISION
OF
XXXXXXX XXXXX BUSINESS
FINANCIAL
SERVICES INC.
|
DISCOVERY
LABORATORIES, INC.
|
|
By:
Name:
Title:
|
By:
Name:
Title:
|
|
Address:
000
Xxxxx XxXxxxx Xxxxxx, 00xx
Xxxxx
Xxxxxxx,
Xxxxxxxx 00000
Attn:
Account Manager for MLC-HCF
Discovery
Laboratories transaction
Facsimile:0-000-000-0000
Email:
XXX_XXX-XXX0@xx.xxx
|
Address:
0000
Xxxxx Xxxx, Xxxxx 000
Xxxxxxxxxx,
Xxxxxxxxxxxx 00000-0000
Facsimile:
______________________________
Form
of Organization: corporation
Jurisdiction
of
Organization:
Delaware
Organizational
No.:2315242
Federal
Employer Identification No.:00-0000000
|
|
With
copies to:
Xxxxxxx
Xxxxx Capital
000
X. XxXxxxx Xxxxxx, 00xx
Xxxxx
Xxxxxxx,
Xxxxxxxx 00000
Attn:
Group Senior Transaction Attorney, Healthcare Finance
Facsimile
Number: (000) 000-0000
Xxxxxxx
Xxxxx Capital
0000
Xxxxxxxxx Xxx., Xxxxx 000
Xxxxxxxx,
Xxxxxxxx 00000
Attn:
Group Senior Transaction Attorney, Healthcare Finance
Facsimile
Number: (000) 000-0000
|
Discovery
Laboratories, Inc.
0000
Xxxxx Xxxx, Xxxxx 000
Xxxxxxxxxx,
Xxxxxxxxxxxx 00000-0000
Attention:
General Counsel
Facsimile:
(000) 000-0000
|
[Signature
Page to Credit Agreement]
| Exhibit
1 (Form of Promissory Note) |
[see
attached]
| Schedule
1-A (Collateral) |
[see
attached]
1
| Schedule
1-A (Collateral) |
SCHEDULE
1-A
COLLATERAL
The
Collateral consists of all of each Borrower’s right,
title and interest in and to the following, whether now owned or hereafter
created, acquired or arising:
All
property listed on any collateral schedule now or in the future annexed to
or
made a part of this Agreement;
All
property listed on Annex 1 attached hereto;
provided, however, that Lender’s Lien on and security interest in, upon and to
the property
listed on Annex 1 attached hereto shall
not
arise until the funding of the GECC Payoff Equipment Advance;
All
Intellectual Property and all Proceeds, including Cash Proceeds and Noncash
Proceeds, of such Intellectual Property; provided,
however,
for the
purposes hereof, the term “Collateral” shall not include any license, Contract
or agreement to which any Borrower is a party or any of its rights or interests
thereunder to the extent, but only to the extent, that such a grant would,
under
the terms of such license, Contract or agreement or otherwise, result in a
breach of the terms of, or constitute a default under any license, Contract
or
agreement to which any Borrower is a party (other than to the extent that any
such term would be rendered ineffective pursuant to the UCC or any other
applicable law (including the Bankruptcy Code, 11 U.S.C. Sec. 362(a)) or
principles of equity; provided, that immediately upon the ineffectiveness,
lapse
or termination of any such provision, the Collateral shall include, and
Borrowers shall be deemed to have granted a security interest in, all such
rights and interests as if such provision had never been in effect;
and
All
of
each Borrower’s claims, rights and interests in any of the above and all
substitutions and exchanges for, additions, attachments, accessories, accessions
and improvements to and replacements, products and insurance and other Proceeds
of any and all of the foregoing.
Notwithstanding
the foregoing, upon the payment in full of (a) all principal, accrued interest
and other amounts due in connection with any Hard Cost Equipment Advance,
including, without limitation, any applicable prepayment fee, and (b) all
principal, accrued interest and other amounts due in connection with any Other
Equipment Advances made in conjunction with such Hard Cost Equipment Advance,
including, without limitation, any applicable prepayment fee, and provided
that
no Default has occurred and is continuing, all Financed Equipment financed
by
such Hard Cost Equipment Advance shall no longer be included in the
Collateral.
Definitions:
“Cash
Proceeds”; “Noncash Proceeds”; Software”; shall each have the meaning set forth
in the UCC.
“Contracts”
shall mean contracts, agreements, commitments, understandings and arrangements
creating or related to Intellectual Property between any Borrower and one or
more other parties, or under or with respect to which any Borrower has
rights.
“Copyrights”
shall mean, collectively, all copyrights (whether such copyrights are statutory
or common law, whether established or registered in the United States or any
other country or any political subdivision thereof, whether registered or
unregistered and whether published or unpublished) and all copyright
registrations and applications, and in each case, whether now owned or hereafter
created or acquired, together with any and all (i) rights and privileges
arising under applicable law with respect to the use of such copyrights,
(ii) reissues, renewals, continuations and extensions thereof, (iii)
income, fees, royalties, damages, claims and payments now or hereafter due
or
payable with respect thereto, including, without limitation, damages and
payments for past, present or future infringements thereof, (iv) rights
corresponding thereto throughout the world and (v) rights to xxx for past,
present or future infringements thereof.
“Credit
Agreement” means that certain Credit and Security Agreement dated as of May 21,
2007 among Borrowers and Lender.
2
| Schedule
1-A (Collateral) |
“Financed
Equipment” has the meaning set forth in the Credit Agreement.
“Hard
Cost Equipment Advance” has the meaning set forth in the Credit
Agreement.
“Intellectual
Property” means, with respect to any Person, all Patents, Patent applications
and like protections, including improvements divisions, continuation, renewals,
reissues, extensions and continuations in part of the same, Trademarks, to
the
extent permitted under applicable law, any applications therefore, whether
registered or not, and the goodwill of the business of such Person connected
with and symbolized thereby, Copyrights and like protections in each work of
authorship and derivative works, whether published or unpublished, technology,
Know-How and processes, operating manuals, trade secrets, rights to unpatented
inventions and all applications and licenses therefore, used in or necessary
for
the conduct of business by such Person and all claims for damages by way of
any
past, present or future infringement of any of the foregoing.
“Know-How”
shall mean all know-how and other information, including, without limitation,
ideas, discoveries, inventions, data, techniques, specifications, processes,
procedures, manufacturing and technical information, results from experiments
and tests, instructions, methods, formulae, designs, plans, sketches, records,
confidential analyses, interpretations of information, and trade secrets, or
any
similar items, in any media form, whether or not tangible, including, without
limitation, any paper or electronic form.
“Other
Equipment Advance” has the meaning set forth in the Credit
Agreement.
“Patents”
shall mean all of the following whether now owned or hereafter acquired:
(a) all patents of the United States or any other country, all
registrations and recordings thereof, and all applications for patents of the
United States or any other country, including registrations, recordings and
pending applications in the United States Patent and Trademark Office or any
other country, (b) all reissues, continuations, divisions,
continuations-in-part, renewals or extensions thereof, and the inventions
disclosed or claimed therein, including the right to make, use or sell the
inventions disclosed or claimed therein and (c) all income, fees, royalties,
damages, claims and payments now or hereafter due or payable with respect
thereto, including, without limitation, damages and payments for past, present
or future infringements thereof.
“Person”
means any individual, corporation, partnership, joint venture, or other legal
entity or a governmental authority, whether employed, hired, affiliated, owned,
contracted with, or otherwise related or unrelated to Lender or any
Borrower.
“Proceeds”
shall mean, collectively, all “proceeds,” as such term is defined in the UCC,
and in any event shall include, without limitation, any consideration received
from the sale, exchange, license, lease or other disposition of any asset or
property that constitutes Collateral, any value received as a consequence of
the
possession of any Collateral and any payment received from any insurer or other
person or entity as a result of the destruction, loss, theft, damage or other
involuntary conversion of whatever nature of any asset or property that
constitutes Collateral, and shall include (a) any claim against any third
party for (and the right to xxx and recover for and the rights to damages or
profits due or accrued arising out of or in connection with) (i) past,
present or future infringement of any Patent now or hereafter owned,
(ii) past, present or future infringement or dilution of any Trademark now
or hereafter owned or injury to the goodwill associated with or symbolized
by
any Trademark now or hereafter owned, (iii) past, present or future infringement
of any Copyright now or hereafter owned and (b) any and all other amounts
from time to time paid or payable under or in connection with any of the
Collateral.
“Trademarks”
shall mean all of the following whether now owned or hereafter acquired:
(a) all trademarks, service marks, trade names, corporate names, company
names, business names, fictitious business names, trade styles, trade dress,
logos, other source or business identifiers, designs and general intangibles
of
like nature, all registrations and recordings thereof, and all registration
and
recording applications filed in connection therewith, including registrations
and registration applications in the United States Patent and Trademark Office,
any State of the United States or any similar offices in any other country
or
any political subdivision thereof, and all extensions or renewals thereof,
(b)
all income, fees, royalties, damages, claims and payments now or hereafter
due
or payable with respect thereto, including, without limitation, damages and
payments for past, present or future infringements thereof, (c) all
goodwill associated therewith or symbolized thereby, and (d) all other
assets, rights and interests that uniquely reflect or embody such
goodwill.
3
| Schedule
1-A (Collateral) |
“UCC”
means the Uniform Commercial Code as in effect in the State of New York or
in
any other applicable jurisdiction; and any reference to an article or section
thereof shall mean the corresponding article or section (however termed) of
any
such applicable version of the Uniform Commercial Code.
References
to capitalized terms that are not defined herein, but are defined in the UCC,
shall have the meanings given them in the UCC.
4
| Schedule
1-B (Collateral) |
SCHEDULE
1-B
COLLATERAL
The
Collateral consists of all of each Borrower’s right,
title and interest in and to the following, whether now owned or hereafter
created, acquired or arising:
All
property listed on any collateral schedule now or in the future annexed to
or
made a part of this Agreement;
All
property listed on Annex 1 attached hereto; and
All
of
each Borrower’s claims, rights and interests in any of the above and all
substitutions and exchanges for, additions, attachments, accessories, accessions
and improvements to and replacements, products and insurance and other Proceeds
of any and all of the foregoing.
Notwithstanding
the foregoing, upon the payment in full of (a) all principal, accrued interest
and other amounts due in connection with any Hard Cost Equipment Advance,
including, without limitation, any applicable prepayment fee, and (b) all
principal, accrued interest and other amounts due in connection with any Other
Equipment Advances made in conjunction with such Hard Cost Equipment Advance,
including, without limitation, any applicable prepayment fee, and provided
that
no Default has occurred and is continuing, all Financed Equipment financed
by
such Hard Cost Equipment Advance shall no longer be included in the
Collateral.
Definitions:
“Credit
Agreement” means that certain Credit and Security Agreement dated as of May 21,
2007 among Borrowers and Lender.
“Financed
Equipment” has the meaning set forth in the Credit Agreement.
“Hard
Cost Equipment Advance” has the meaning set forth in the Credit
Agreement.
“Other
Equipment Advance” has the meaning set forth in the Credit
Agreement.
“Proceeds”
shall mean, collectively, all “proceeds,” as such term is defined in the UCC,
and in any event shall include, without limitation, any consideration received
from the sale, exchange, license, lease or other disposition of any asset or
property that constitutes Collateral, any value received as a consequence of
the
possession of any Collateral and any payment received from any insurer or other
person or entity as a result of the destruction, loss, theft, damage or other
involuntary conversion of whatever nature of any asset or property that
constitutes Collateral, and shall include any and all other amounts from time
to
time paid or payable under or in connection with any of the
Collateral.
“UCC”
means the Uniform Commercial Code as in effect in the State of New York or
in
any other applicable jurisdiction; and any reference to an article or section
thereof shall mean the corresponding article or section (however termed) of
any
such applicable version of the Uniform Commercial Code.
References
to capitalized terms that are not defined herein, but are defined in the UCC,
shall have the meanings given them in the UCC.
| Annex
1 (Collateral) |
ANNEX
1
[see
attached]
