Exhibit 10.14
SENIOR LOAN AND SECURITY AGREEMENT
THIS SENIOR LOAN AND SECURITY AGREEMENT is made and dated as of March 31,
2005 (the "Closing Date") and is entered into by and between OMRIX
BIOPHARMACEUTICALS, INC., a Delaware corporation ("Borrower"), with its address
for purposes of this Agreement at Chauss'ee de Waterloo, 200 B-1640 Rhode St.
Genese Belgium., HERCULES TECHNOLOGY GROWTH CAPITAL, INC., a Maryland
corporation ("Lender"), with its principal place of business located at 000
Xxxxxxxxxx Xxxxxx, Xxxxx 000, Xxxx Xxxx, XX 00000. In consideration of the
mutual agreements contained herein, the parties hereto agree as follows:
RECITALS
WHEREAS, Borrower has requested Lender to make available to Borrower a loan
in an aggregate principal amount of up to Five Million U.S. DOLLARS
($5,000,000.00) (the "Loan"); and
WHEREAS, Lender is willing to make the Loan on the terms and conditions set
forth in this Agreement.
AGREEMENT
NOW, THEREFORE, in consideration of the premises and the mutual agreements
contained herein, Borrower and Lender hereby agree as follows:
SECTION 1. DEFINITIONS AND RULES OF CONSTRUCTION
1.1 Unless otherwise defined herein, the following capitalized terms shall
have the following meanings (such meanings being equally applicable to both the
singular and plural form of the terms defined):
"Account" means any "account," as such term is defined in the UCC, now
owned or hereafter acquired by Borrower or in which Borrower now holds or
hereafter acquires any interest and, in any event, shall include all accounts
receivable, book debts, rights to payment, and other forms of obligations now
owned or hereafter received or acquired by or belonging or owing to Borrower
(including under any trade name, style or division thereof), whether or not
arising out of goods or software sold or services rendered by Borrower or from
any other transaction (including any such obligation that may be characterized
as an account or contract right under the UCC), and all of Borrower's rights in,
to and under all purchase orders or receipts now owned or hereafter acquired by
it for goods or services, and all of Borrower's rights to any goods represented
by any of the foregoing (including unpaid seller's rights of rescission,
replevin, reclamation and stoppage in transit and rights to returned, reclaimed
or repossessed goods), and all monies due or to become due to Borrower under all
purchase orders and contracts for the sale of goods or the performance of
services or both by Borrower or in connection with any other transaction
(whether or not yet earned by performance on the part of Borrower), now in
existence or hereafter occurring, including the right to receive the proceeds of
said purchase orders and contracts, and all collateral security and guarantees
of any kind given by any Person with respect to any of the foregoing.
"Account Control Agreement(s)" means any agreement entered into by an
among the Lender, Borrower and a third party Bank or other institution
(including a Securities Intermediary) in which Borrower maintains a Deposit
Account, Investment Property and which is intended to perfect Lender's security
interest in any of the Collateral.
"Advance" means any funds advanced or loaned by Lender to or for the
benefit of Borrower, including the initial Loan and each subsequent Loan made by
Lender to or for the benefit of Borrower pursuant hereto.
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"Advance Date" means the funding date of any Advance.
"Advance Request" means a request for an Advance submitted by Borrower
to Lender in substantially the form of Exhibit A.
"Agreement" means this Senior Loan and Security Agreement, as the same
may from time to time be amended, modified, supplemented or restated from time
to time in accordance with the terms hereof.
"Borrower" has the meaning given to it in the preamble to this
Agreement.
"Borrower Products" means all products owned, marketed, distributed,
or sold by Borrower, on, before or after the Closing Date, including without
limitation products currently approved by the U.S. Food and Drug Administration
or other federal, state, or international authorities, products not approved but
in clinical trials, and products for which no such approval is necessary.
"Cash" means all cash, money, currency, and liquid funds, wherever
held, in which Borrower now or hereafter acquires any right, title, or interest.
"Chattel Paper" means any "chattel paper," as such term is defined in
the UCC, now owned or hereafter acquired by Borrower or in which Borrower now
holds or hereafter acquires any interest.
"Closing Date" has the meaning given to it in the preamble to this
Agreement.
"Collateral" has the meaning given to it in Section 3.
"Commitment Termination Date" means the first to occur of (i) October
1, 2005 or (ii) the occurrence of an Event of Default.
"Contingent Obligation" means, as applied to any Person, any direct or
indirect liability, contingent or otherwise, of that Person with respect to (i)
any indebtedness, lease, dividend, letter of credit or other obligation of
another, including, without limitation, any such obligation directly or
indirectly guaranteed, endorsed, co-made or discounted or sold with recourse by
that Person, or in respect of which that Person is otherwise directly or
indirectly liable; (ii) any obligations with respect to undrawn letters of
credit, corporate credit cards or merchant services issued for the account of
that Person; and (iii) all obligations arising under any interest rate, currency
or commodity swap agreement, interest rate cap agreement, interest rate collar
agreement, or other agreement or arrangement designated to protect a Person
against fluctuation in interest rates, currency exchange rates or commodity
prices; provided, however, that the term "Contingent Obligation" shall not
include endorsements for collection or deposit in the ordinary course of
business. The amount of any Contingent Obligation shall be deemed to be an
amount equal to the stated or determined amount of the primary obligation in
respect of which such Contingent Obligation is made or, if not stated or
determinable, the maximum reasonably anticipated liability in respect thereof as
determined by such Person in good faith; provided, however, that such amount
shall not in any event exceed the maximum amount of the obligations under the
guarantee or other support arrangement.
"Copyrights" means all of the following property, now owned or
hereafter acquired by Borrower or in which Borrower now holds or hereafter
acquires any interest: (i) all copyrights, whether registered or unregistered,
held pursuant to the laws of the United States, any State thereof, or of any
other country or jurisdiction; (ii) all registrations, applications and
recordings in the United States Copyright Office or in any similar office or
agency of the United States, of any State thereof, or of any other country or
jurisdiction; (iii) all continuations, renewals or extensions thereof; and (iv)
all registrations to be issued under any pending applications.
"Copyright License" means any written agreement granting any right to
use any Copyright or Copyright registration, now owned or hereafter acquired by
Borrower or in which Borrower now holds or hereafter acquires any interest.
"Default Rate" has the meaning given to it in Section 2.5(c).
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"Deposit Accounts" means any "deposit accounts," as such term is
defined in the UCC, and includes any checking account, savings account, or
certificate of deposit now owned or hereafter acquired by Borrower or in which
Borrower now holds or hereafter acquires any interest.
"Disclosure Schedule" means the disclosure schedule attached hereto as
Exhibit C.
"Documents" means any "documents," as such term is defined in the UCC,
now owned or hereafter acquired by Borrower or in which Borrower now holds or
hereafter acquires any interest.
"Equipment" means any "equipment," as such term is defined in the UCC,
and any and all additions, upgrades, substitutions, and replacements of the
foregoing, together with all attachments, components, parts, accessions, and
accessories installed thereon or affixed thereto, now owned or hereafter
acquired by Borrower or in which Borrower now holds or hereafter acquires any
interest.
"Equity Event" means the sale or issuance of Borrower's equity
securities after the Closing Date in one or more transactions or series,
excluding the Initial Public Offering, except issuance to any of the current
shareholders of Borrower in an offering that generates proceeds of no more than
Five Million Dollars US$5,000,000).
"Event of Default" has the meaning given to it in Section 10.
"Excluded Agreements" means (i) the Warrant Agreement; (ii) any
guaranty of the Secured Obligations executed by any Person other than Borrower;
and (iv) any other warrant agreement by and between Lender and Borrower.
"Facility Fee" means one and one quarter percent (1.25%) of the
Maximum Loan Amount, which fee is due to Lender on the Closing Date.
"Financial Statements" has the meaning given to it in Section 7.1.
"Fixtures" means any "fixtures," as such term is defined in the UCC,
together with all right, title and interest of Borrower in and to all
extensions, improvements, betterments, accessions, renewals, substitutes, and
replacements of, and all additions and appurtenances to any of the foregoing
property, and all conversions of the security constituted thereby, immediately
upon any acquisition or release thereof or any such conversion, as the case may
be, now owned or hereafter acquired by Borrower or in which Borrower now holds
or hereafter acquires any interest.
"GAAP" means generally accepted accounting principles in the United
States of America, as in effect from time to time.
"General Intangibles" means any "general intangibles," as such term is
defined in the UCC, and, in any event, shall include all right, title and
interest which Borrower may now or hereafter have in or under any rights to
payment; payment intangibles; software; proprietary or confidential information;
business records and materials; customer lists; interests in partnerships, joint
ventures, business associations, corporations, and limited liability companies;
permits; claims in or under insurance policies (including unearned premiums and
retrospective premium adjustments); and rights to receive tax refunds and other
payments and rights of indemnification now owned or hereafter acquired by
Borrower or in which Borrower now holds or hereafter acquires any interest.
"Goods" means any "goods," as such term is defined in the UCC, now
owned or hereafter acquired by Borrower or in which Borrower now holds or
hereafter acquires any interest.
"Guarantor" means each of Omrix Biopharmaceuticals SA, a Belgium
corporation, and Omrix Biopharmaceuticals Ltd., an Israeli corporation.
"Guaranty" means an unconditional guaranty (subject to Existing Liens)
in the form attached hereto in Exhibit J, by each Guarantor.
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"Indebtedness" means (a) all indebtedness for borrowed money or the
deferred purchase price of property or services, including without limitation
reimbursement and other obligations with respect to surety bonds and letters of
credit, (b) all obligations evidenced by notes, bonds, debentures or similar
instruments, (c) all capital lease obligations, and (d) all Contingent
Obligations.
"Initial Public Offering" means the initial firm commitment
underwritten public offering of Borrower's common stock pursuant to a
registration statement under the Securities Act of 1933 filed with and declared
effective by the Securities and Exchange Commission.
"Instruments" means any "instruments," as such term is defined in the
UCC, now owned or hereafter acquired by Borrower or in which Borrower now holds
or hereafter acquires any interest.
"Intellectual Property" means all current and future Copyrights;
Trademarks; Patents; Licenses; Patent Licenses; source codes developed or
otherwise owned by Borrower; trade secrets; inventions (whether or not patented
or patentable); technical information, procedures, processes, designs,
knowledge, and know-how; data bases; models; drawings; skill, expertise, and
experience; websites, world wide Web addresses, domain names, URL's, moral
rights, publicity rights, mask works and without derogating from the aforesaid,
any other current and future proprietary, intellectual or industrial proprietary
rights of any kind or nature that do not compromise or are not protected by the
Patents, Trademarks, Copyrights or Licenses; and applications therefor and
reissues, extensions, or renewals thereof; and goodwill associated with any of
the foregoing; together with rights to xxx for past, present and future
infringement of Intellectual Property and the goodwill associated therewith.
"Inventory" means any "inventory," as such term is defined in the UCC,
now owned or hereafter acquired by Borrower or in which Borrower now holds or
hereafter acquires any interest, and, in any event, shall include all Goods and
personal property that are held by or on behalf of Borrower for sale or lease or
are furnished or are to be furnished under a contract of service, or that
constitute raw materials, work in process or materials used or consumed or to be
used or consumed in Borrower's business, or the processing, packaging,
promotion, delivery or shipping of the same, and all finished goods, whether or
not the same is in transit or in the constructive, actual or exclusive
possession of Borrower or is held by others for Borrower's account, including
all property covered by purchase orders and contracts with suppliers and all
Goods billed and held by suppliers and all such property that may be in the
possession or custody of any carriers, forwarding agents, truckers,
warehousemen, vendors, selling agents or other Persons.
"Investment Property" means any "investment property," as such term is
defined in the UCC, and includes any certificated or uncertificated security
(including, but not limited to, stock or other interests of any and all
subsidiaries and related entities and includes all securities as defined in the
United States Securities Laws and Regulations), money market funds, bonds,
mutual funds, and U.S. Treasury bills or notes, now owned or hereafter acquired
by Borrower or in which Borrower now holds or hereafter acquires any interest.
"Lender" has the meaning given to it in the preamble to this
Agreement.
"Letter of Credit Rights" means any "letter of credit rights," as such
term is defined in the UCC, now owned or hereafter acquired by Borrower or in
which Borrower now holds or hereafter acquires any interest, including any right
to payment or performance under any letter of credit.
"License" means any Copyright License, Patent License, Trademark
License or other license of rights or interests now held or hereafter acquired
by Borrower or in which Borrower now holds or hereafter acquires any interest
and any renewals or extensions thereof.
"Lien" means any mortgage, deed of trust, pledge, hypothecation,
assignment for security, security interest, encumbrance, levy, Hen or charge of
any kind, whether voluntarily incurred or arising by operation of law or
otherwise, against any property, any conditional sale or other title retention
agreement, any lease in the nature of a security interest, and the filing of any
financing statement (other than a
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precautionary financing statement with respect to a lease that is not in the
nature of a security interest) under the UCC or comparable law of any
jurisdiction.
"Loan" has the meaning given to it in the recitals to this Agreement.
"Loan Documents" means this Agreement, the Notes, Account Control
Agreements, all UCC Financing Statements, and any other documents executed in
connection with the Secured Obligations or the transactions contemplated hereby,
including those documents described on the Schedule of Documents, as the same
may from time to time be amended, modified, supplemented or restated; provided,
that the term "Loan Documents" shall not include any of the Excluded Agreements.
"Material Adverse Effect" means a material adverse effect upon: (i)
the business, operations, properties, assets or condition (financial or
otherwise) of Borrower (taken as a whole) or (ii) the Collateral or Lender's
Liens on the Collateral or the priority of such Liens.
"Maturity Date" means March 31, 2008.
"Maximum Loan Amount" means Five Million U.S. Dollars ($5,000,000.00).
"Maximum Rate" shall have the meaning assigned to such term in Section
2.6(a).
"Merger" means any (i) reorganization, consolidation or merger (or
similar transaction or series of related transactions) of Borrower or any
Subsidiary, (ii) sale or exchange of outstanding shares (or similar transaction
or series of related transactions) of Borrower or any Subsidiary in which the
holders of Borrower or Subsidiary's outstanding shares immediately before
consummation of such transaction or series of related transactions do not,
immediately after consummation of such transaction or series of related
transactions, retain shares representing at least fifty percent (50%) of the
voting power of the surviving entity of such transaction or series of related
transactions (or the parent of such surviving entity if such surviving entity is
wholly owned by such parent), in each case without regard to whether Borrower or
Subsidiary is the surviving entity or (iii) sale, lease, license (except for any
lease or license in the ordinary course of business) or transfer of all or
substantially all of the assets of Borrower (taken as a whole), provided
however, that in all cases a Subsidiary may be merged into Borrower, or any
entity controlled by Borrower without constituting a "Merger", and further
provided that any reorganization or restructuring of the Subsidiaries or assets
thereof within the group of companies controlled by the Borrower shall not
constitute a "Merger".
"Notes" means the Promissory Notes prepared by Lender in substantially
the form of Exhibit B, which are executed and delivered by Borrower to evidence
Advances, as the same may be amended, restated, modified or supplemented from
time to time.
"OFS Business" shall mean the business and all business activities of
Borrower related to the proprietary fibrin sealant, and all developments,
improvement, modifications, and additions thereto.
"Patent License" means any written agreement granting any right with
respect to any invention on which a Patent is in existence or a Patent
application is pending, in which agreement Borrower now holds or hereafter
acquires any interest.
"Patents" means all of the following property, now owned or hereafter
acquired by Borrower or in which Borrower now holds or hereafter acquires any
interest: (a) all letters patent of, or rights corresponding thereto, in the
United States or in any other country or jurisdiction, all registrations and
recordings thereof, and all applications for letters patent of, or rights
corresponding thereto, in the United States or any other country or
jurisdiction, including registrations, recordings and applications in the United
States Patent and Trademark Office or in any similar office or agency of the
United States, any State thereof or any other country or jurisdiction; (b) all
reissues, continuations, continuations-in-part or extensions thereof; (c) all
xxxxx patents, divisionals, and patents of addition; and (d) all patents to be
issued under any such applications.
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"Payment Date" has the meaning given to it in Section 2.2.
"Permitted Liens" means any and all of the following: (i) the liens
existing as of the date hereof as set forth in Exhibit K attached hereto, on the
assets of Borrower or any Subsidiary (the "Existing Liens"), (ii) Liens
subordinated to the Liens granted by Borrower to Lender in the Collateral on
terms acceptable to Lender, acceptance or approval of which not to be
unreasonably withheld, (iii) Liens for taxes, fees, assessments or other
governmental charges or levies, either not delinquent or being contested in good
faith by appropriate proceedings; provided, that except as prescribed by
applicable law, such Liens do not have priority over any of Lender's Liens and
Borrower maintains adequate reserves therefor in accordance with GAAP; (iv)
Liens securing claims or demands of materialmen, artisans, mechanics, carriers,
warehousemen, landlords and other like Persons arising in the ordinary course of
Borrower's business and imposed without action of such parties; provided, that
the payment thereof is not yet required or which are contested in good faith;
(v) Liens arising from judgments, decrees or attachments in circumstances which
do not constitute an Event of Default hereunder; (vi) the following deposits, to
the extent made in the ordinary course of business: deposits under worker's
compensation, unemployment insurance, social security and other similar laws, or
to secure the performance of bids, tenders or contracts (other than for the
repayment of borrowed money) or to secure indemnity, performance or other
similar bonds for the performance of bids, tenders or contracts (other than for
the repayment of borrowed money) or to secure statutory obligations (other than
liens arising under ERISA or environmental liens) or surety or appeal bonds, or
to secure indemnity, performance or other similar bonds; (vii) purchase money
liens on Equipment which has been or will be acquired or held by Borrower and
such Liens are incurred for financing the acquisition of the Equipment, if, the
liens are confined to the Equipment and proceeds of the Equipment; and (viii)
Liens incurred in connection with the extension, renewal or refinancing of the
indebtedness secured by Liens of the type described in clauses (i) through
(viii) above; provided, that any extension, renewal or replacement Lien shall be
limited to the property encumbered by the existing Lien and the principal amount
of the indebtedness being extended, renewed or refinanced (as may have been
reduced by any payment thereon) does not increase.
"Person" means any individual, sole proprietorship, partnership, joint
venture, trust, unincorporated organization, association, corporation, limited
liability company, institution, public benefit corporation, other entity or
government (whether federal, state, county, city, municipal, local, foreign, or
otherwise, including any instrumentality, division, agency, body or department
thereof).
"Preferred Stock" means at any given time any equity security issued
by Borrower that has any rights, preferences or privileges senior to Borrower's
common stock.
"Proceeds" means "proceeds," as such term is defined in the UCC and,
in any event, shall include (a) any and all Accounts, Chattel Paper,
Instruments, Cash, proceeds of letters of credit, Letter of Credit Rights,
Supporting Obligations, or other proceeds payable to Borrower from time to time
in respect of the Collateral, (b) any and all proceeds of any insurance,
indemnity, warranty or guaranty payable to Borrower from time to time with
respect to any of the Collateral, (c) any and all payments (in any form
whatsoever) made or due and payable to Borrower from time to time in connection
with any requisition, confiscation, condemnation, seizure or forfeiture of all
or any part of the Collateral by any governmental authority (or any Person
acting under color of governmental authority), (d) the proceeds, damages, or
recovery based on any claim of Borrower against third parties (i) for past,
present or future infringement of any Copyright, Copyright License, Patent or
Patent License or (ii) for past, present or future infringement or dilution of
any Trademark or Trademark License or for injury to the goodwill associated with
any Trademark, Trademark registration or Trademark licensed under any Trademark
License, and (e) any and all other amounts from time to time paid or payable
under or in connection with any of the Collateral.
"Receivables" means (i) all of Borrower's Accounts, Instruments,
Documents, Chattel Paper, Supporting Obligations, letters of credit, proceeds of
any letter of credit, and Letter of Credit Rights, and (ii) all customer lists,
software, and business records related thereto.
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"Secured Obligations" means Borrower's obligation to repay to Lender
the Loan and all Advances (whether or not evidenced by any Note), together with
all principal, interest, fees, costs, professional fees and expenses pursuant to
Section 12.5, or other liabilities or obligations for monetary amounts owed by
Borrower to Lender however arising, including the such amounts as may accrue or
be incurred before or after default or workout or the commencement of any
liquidation, dissolution, bankruptcy, receivership or reorganization by or
against Borrower, whether due or to become due, matured or unmatured, liquidated
or unliquidated, contingent or non-contingent, as the same may from time to time
be amended, modified, supplemented or restated, whether or not such obligations
are partially or fully secured by the value of Collateral.
"Securities Intermediary" means any "securities intermediary" as such
term is defined in the UCC.
"Subsidiary" means an entity, whether corporate, partnership, limited
liability company, joint venture or otherwise, which Borrower owns or controls
at least 50% of the outstanding voting securities, including each entity listed
on Schedule 1 hereto.
"Supporting Obligations" means any "supporting obligations," as such
term is defined in the UCC, now owned or hereafter acquired by Borrower or in
which Borrower now holds or hereafter acquires any interest.
"Trademark License" means any written agreement granting any right to
use any Trademark or Trademark registration, now owned or hereafter acquired by
Borrower or in which Borrower now holds or hereafter acquires any interest.
"Trademarks" means all of the following property, now owned or
hereafter acquired by Borrower or in which Borrower now holds or hereafter
acquires any interest: (a) all trademarks (registered, common law or otherwise),
tradenames, corporate names, business names, trade styles, service marks, logos,
other source or business identifiers (and all goodwill associated therewith),
prints and labels on which any of the foregoing have appeared or appear, and
designs of like nature, now existing or hereafter adopted or acquired, all
registrations and recordings thereof, and any applications in connection
therewith, including registrations, recordings and applications in the United
States Patent and Trademark Office or in any similar office or agency of the
United States, any State thereof or any other country or jurisdiction or any
political subdivision thereof, and (b) all reissues, extensions or renewals
thereof.
"UCC" means the Uniform Commercial Code as the same is, from time to
time, in effect in the State of California; provided, that in the event that, by
reason of mandatory provisions of law, any or all of the attachment, perfection
or priority of, or remedies with respect to, Lender's Lien on any Collateral is
governed by the Uniform Commercial Code as the same is, from time to time, in
effect in a jurisdiction other than the State of California, then the term "UCC"
shall mean the Uniform Commercial Code as in effect, from time to time, in such
other jurisdiction solely for purposes of the provisions thereof relating to
such attachment, perfection, priority or remedies and for purposes of
definitions related to such provisions. Unless otherwise defined herein or in
the other Loan Documents, terms that are defined in the UCC and used herein or
in the other Loan Documents, as a defined term (i.e. with initial letter
capitalized), shall, unless the context indicates otherwise, have the meanings
given to them in the UCC.
"Warrant Agreement" means the warrant agreement entered into in
connection with the Loan, pursuant to which Borrower grants Lender the right to
purchase that number of shares of Common Stock of Borrower as more particularly
set forth therein.
1.2 Unless otherwise specified, all references in this Agreement or any
Annex or Schedule hereto to a "Section," "subsection," "Exhibit," "Annex," or
"Schedule" shall refer to the corresponding Section, subsection, Exhibit, Annex,
or Schedule in or to this Agreement. The terms "herein," "hereof and "hereunder"
and other words of similar import refer to this Agreement as a whole, including
all Exhibits, Annexes and Schedules, and not to any particular Section,
subsection or other subdivision.
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1.3 Wherever from the context it appears appropriate, each term stated in
either the singular or plural shall include the singular and the plural, and
pronouns stated in the masculine, feminine or neuter gender shall include the
masculine, feminine and neuter genders. The words "including," "includes" and
"include" shall be deemed to be followed by the words "without limitation," the
word "or" is not exclusive; references to Persons include their respective
successors and assigns (to the extent and only to the extent permitted by this
Agreement and the Loan Documents) or, in the case of governmental Persons,
Persons succeeding to the relevant functions of such Persons; and all references
to statutes and related regulations shall include any amendments of the same and
any successor statutes and regulations. Unless otherwise specifically provided
herein, any accounting term used in this Agreement or the other Loan Documents
shall have the meaning customarily given such term in accordance with GAAP, and
all financial computations hereunder shall be computed in accordance with GAAP,
consistently applied.
SECTION 2. THE LOAN
2.1 From the Closing Date through the Commitment Termination Date, Lender
agrees to make Advances to Borrower in an aggregate amount not to exceed the
Maximum Loan Amount, for the purposes and upon the terms and subject to the
conditions contained in this Agreement, the Notes, and the other Loan Documents.
Notwithstanding anything to the contrary in this Agreement or the Loan
Documents, Lender's obligation to fund the Loan and make advances shall
automatically expire on the Commitment Termination Date.
2.2 The Loan shall be available in minimum Advances of One Million U.S.
Dollars ($1,000,000.00) and shall be drawn only one time per month, and may be
drawn down only until October 1, 2005. Borrower shall draw not less than Three
Million U.S. Dollars ($3,000,000) by March 31, 2005. Borrower promises to
execute and deliver to Lender a Note in the original principal amount of each
Advance. The principal balance of each Advance shall bear interest thereon from
the Advance Date, precomputed at the rate of eleven and 45/100 percent (11.45%)
per annum based upon a year consisting of 365 days, with interest computed
daily. Each Advance shall be due and payable in monthly installments of accrued
interest only on the first day of each month from the date of such Advance
through October 1, 2005 (the "Interest Only Payment Dates"), followed by thirty
(30) equal monthly installments of principal plus accrued interest, beginning
October 1, 2005 and continuing through April 1, 2008, on which the final payment
(the "Maturity Date Payment") consisting of the entire outstanding principal
balance and all accrued interest shall be due and payable. Each such monthly
installment, including the Maturity Date Payment, shall be due and payable on
the first day of each calendar month (each, a "Payment Date"). If any payment
for an Advance shall be payable on a day other than a business day, then such
payment shall be due and payable on the next succeeding business day. Each
Advance shall be repaid in full, together with all interest accrued thereon, on
April 1, 2008 for said Advance, whether or not the Advance is evidenced by a
Note. Amounts repaid on any Loan shall not be reborrowed. All of the Advances,
Loan, and other Secured Obligations arising under this Agreement, the other Loan
Documents or otherwise shall constitute one general obligation of Borrower
secured by all of the Collateral.
2.3 In order to obtain an Advance, Borrower shall complete, sign and
deliver an Advance Request to Lender. Each Advance Request shall identify an
Advance Date that is at least five (5) business days after the date such Advance
Request is received by Lender. Upon receipt of an Advance Request, Lender shall
have the right to review whether, each of the conditions precedent to such
Advance (set forth in Section 4 herein) has been satisfied as of the requested
Advance Date, and if such conditions precedent have been or will be satisfied
then Lender shall be obligated to fund such Advance, Lender shall deliver to
Borrower for signature a Note dated as of the Advance Date to evidence such
Advance. Upon receipt by Lender of such Note duly executed and delivered by
Borrower, Lender shall fund the Advance in the manner requested by the Advance
Request provided that each of the conditions precedent
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to such Advance is satisfied as of the requested Advance Date. All the terms,
conditions, and covenants of this Agreement shall apply to all Advances whether
or not each Advance is evidenced by a Note. Borrower agrees that Lender may rely
on any notice or Advance Request given by any Person it reasonably believes to
be an authorized representative of Borrower without the necessity of independent
investigation.
2.4 Borrower shall have the option at any time, upon at least seven (7)
business days prior written notice, to prepay all or any part of the Loan, Notes
or Advances, by paying the relevant principal amount together with all interest
accrued and unpaid as of the date of such prepayment plus any expenses due in
accordance with Section 12.15 herein; provided that Borrower shall pay a premium
equal to 2.5% of the amount of principal only of any prepayment made before the
first anniversary of the Closing Date, 1.25% of the amount of principal only of
any prepayment made after the first but before the second anniversary of the
Closing Date, and 0.5% of amount of principal only of any prepayment made after
the second anniversary of the Closing Date.
2.5
(a) Notwithstanding any provision in this Agreement, the Notes, or any
other Loan Document, it is the parties' intent not to contract for, charge or
receive interest at a rate that is greater than the maximum rate permissible by
law that a court of competent jurisdiction shall deem applicable hereto (which
under the laws of the State of California shall be deemed to be the laws
relating to permissible rates of interest on commercial loans) (the "Maximum
Rate"). If a court of competent jurisdiction shall finally determine that
Borrower has actually paid to Lender an amount of interest in excess of the
amount that would have been payable if all of the Secured Obligations had at all
times borne interest at the Maximum Rate, then such excess interest actually
paid by Borrower shall be applied as follows: first, to the payment of principal
outstanding on the Notes; second, after all principal is repaid, to the payment
of Lender's accrued interest, costs, expenses, professional fees and any other
Secured Obligations; and third, after all Secured Obligations are repaid, the
excess (if any) shall be refunded to Borrower.
(b) In the event any payment (including any interest payment) is not
paid on the scheduled Payment Date, and the Borrower fails to pay such amount,
an amount equal to two percent (2%) of the past due amount, which was not paid
on time, shall be payable on demand. In addition, upon the occurrence and during
the continuation of an Event of Default hereunder, all Secured Obligations (only
with respects to amounts still due and unpaid as of such date), including
principal, interest, compounded interest, and professional fees, shall bear
interest at a rate per annum equal to the rate set forth in Section 2.2 plus
five percent (5%) per annum ("Default Rate").
SECTION 3. SECURITY INTEREST
3.1 As security for the prompt, complete and indefeasible payment when due
(whether on the Payment Dates or otherwise) of all the Secured Obligations and
in order to induce Lender to make the Loan upon the terms and subject to the
conditions of this Agreement, the Notes, and the other Loan Documents, Borrower
hereby grants to Lender a security interest in and Lien upon (i) all of
Borrower's right, title and interest in, to and under each of the following,
whether now owned or hereafter acquired and wherever located (collectively, the
"Collateral"), all subject only to Permitted Liens:
(a) All Receivables;
(b) All Equipment;
(c) All Fixtures;
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(d) All General Intangibles (excluding Intellectual Property);
(e) All Inventory;
(f) All Investment Property (subject to Section 3.2, below);
(g) All Deposit Accounts;
(h) All Cash;
(i) All Goods and other tangible and intangible personal property of
Borrower (excluding Intellectual Property) whether now or hereafter owned or
existing, leased, consigned by or to, or acquired by, Borrower and wherever
located; and
(j) To the extent not otherwise included, all Proceeds of each of the
foregoing and all accessions to, substitutions and replacements for, and rents,
profits and products of each of the foregoing.
3.2 Notwithstanding Section 3.1 and any other term of the Loan Documents to
the contrary, the grant of security interest herein shall not extend to and the
term Collateral shall not include (i) more than 65% of the issued and
outstanding voting capital stock of any Subsidiary that is incorporated or
organized in a jurisdiction other than the United States or any state or
territory thereof or the District of Columbia if to do so would cause Borrower
adverse tax consequences under Internal Revenue Code Section 956 (or any
successor statute) or (ii) the Intellectual Property; provided that Collateral
shall include all proceeds from the sale, licensing or disposition of all or any
part of the forgoing ("IP Proceeds"), and, if a U.S. Bankruptcy Court or other
United States or state court having jurisdiction over Borrower in a case filed
by or against the Borrower, in which Borrower is a debtor or debtor-in-
possession, holds that a security interest in the underlying Intellectual
Property is necessary to have a security interest in the IP Proceeds, then the
Collateral shall automatically, effective as of the Closing Date, include,
subject to Permitted Liens, such Intellectual Property, but only to the extent
necessary to permit perfection of Lender's security interest in the IP Proceeds.
3.3 Notwithstanding Section 3.1 and any other term of the Loan Documents to
the contrary, the grant of security interest herein and any other term of the
Loan Documents shall not limit Borrower's ability and Borrower shall be entitled
notwithstanding the Lien granted to the Lender in the Collateral to sell,
transfer, or otherwise dispose of, license, lease, or use any of the assets
included in the Collateral in the ordinary course of business, and to sell,
transfer, or otherwise dispose of, license, lease, or use assets included in the
Collateral with a value of up to US$100,000 per annum not in the ordinary course
of business, provided Lender retains a security interest in any proceeds
therefrom.
3.4 In addition, and notwithstanding anything contained in the Loan
Documents, for as long as there are any Secured Obligations outstanding, in the
event that Borrower will wish to sell the title and ownership of the
Intellectual Property related to the OFS Business (except to any Subsidiary), it
shall first notify the Lender and the Lender shall then notify the Borrower
within seven (7) days, whether he agrees or objects to such sale. If the Lender
fails to notify Borrower within the aforesaid period, Lender shall be deemed to
have agreed to such sale. In the event that Lender agrees to such sale, Borrower
shall be entitled to sell such Intellectual Property. In the event that Lender
objects to such sale, then Borrower shall be entitled to sell such Intellectual
Property, only and subject to the prepayment of all Notes and Advances, but
shall not be obligated to pay any of the premium prepayment amounts in
accordance with Section 2.4 herein. For the sake of avoidance of doubt, except
as otherwise provided in this Section 3.4, Borrower shall be free to act with
respect to the Intellectual Property related to the OFS, including but not
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limited to, granting of licenses to use such Intellectual Property, provided
that in all cases under this Section 3.4, Lender retains a security interest in
any proceeds arising out of the Intellectual Property.
3.5 Borrower shall provide, within thirty (30) days after the Closing Date,
Account Control Agreement(s), in a form consistent with the terms of this
Agreement executed by Borrower and the financial institution that is party to
such Account Control Agreement(s). Borrower shall make best commercial efforts
to provide, within thirty (30) days after the Closing Date a second priority
floating charge in favor of Lender in the assets of Omrix Biopharmaceuticals
Ltd., which fall under the definition of Collateral, if applied to Omrix
Biopharmaceuticals Ltd. (the "Israeli Assets"), and the terms of Sections 3.1,
3.2, 3.3 and 3.4 will apply mutatis mutandis (e.g., the Intellectual Property of
Omrix Biopharmaceuticals Ltd. will be excluded from the Israeli assets, and the
right to sell assets in the ordinary course of business shall apply to the
assets of Omrix Biopharmaceuticals Ltd. rather than the Borrower' assets),
except that with respect to Section 3.3 the sale of the Israeli Assets not in
the ordinary course of business shall be allowed up to the a value of
US$4,000,000 per annum for fixed assets and up to US$50,000 per annum for all
other assets. The floating charge shall be granted on terms consistent with this
Agreement and subject to and in accordance with the terms set forth in Discount
Bank Ltd.'s consent to the granting of such floating charge, which is set forth
in Exhibit L attached hereto, and which requires Discount Bank Ltd.'s prior
consent to the exercise by the Lender of the second priority floating charge on
the Israeli Assets. Discount Bank Ltd.'s prior consent is also necessary for
Lender to exercise its remedies under the Lien on the shares of Omrix
Biopharmaceuticals Ltd. and Omrix Biopharmaceuticals S.A. Notwithstanding the
foregoing, the floating charge will not apply to and the Collateral will not
include any of the Guarantors' assets and rights, which are subject to Existing
Liens (e.g., lien granted to MDA and Hapoalim Bank Ltd.), except the lien in
favor of Discount Bank Ltd.
SECTION 4. CONDITIONS PRECEDENT TO LOAN
The obligations of Lender to make the Loan or any Advance hereunder (as
applicable) are subject to the satisfaction by Borrower of the following
conditions:
4.1 The Advance Date for any installment requested by Borrower shall occur
on or before the Commitment Termination Date. No Advance Requests shall be
accepted after the fifth day preceding the Commitment Termination Date.
4.2 Borrower, on or prior to the Closing Date, shall have delivered to
Lender the following:
(a) executed originals of this Agreement, the Loan Documents, UCC
Financing Statements, the Guaranties, and all the other documents and
instruments reasonably required by Lender to effectuate the transactions
contemplated hereby or to create and perfect the Liens of Lender with respect to
all Collateral, in all cases in form and substance reasonably acceptable to
Lender, and which are all attached hereto in Exhibit M;
(b) certified copy of resolutions of Borrower's board of directors
evidencing approval of (i) the Loans and other transactions evidenced by the
Loan Documents; and (ii) the Warrant Agreement and transactions evidenced
thereby;
(c) certified copies of the Certificate of Incorporation and the
Bylaws, as amended through the Closing Date, of Borrower;
(d) a certificate of good standing for Borrower from its state of
incorporation and similar certificates from all other jurisdictions in which it
does business and where the failure to be qualified would have a Material
Adverse Effect;
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(e) payment of the Facility Fee (due only on the date of the first
Advance), the commitment fee of $20,000, and reimbursement of Lender's current
expenses reimbursable pursuant to Section 12.15; and
4.3 On each subsequent Advance Date:
(a) Lender shall have received (i) an Advance Request for the relevant
Advance as required by Section 2.3, duly executed by Borrower's Chief Executive
Officer and Chief Financial Officer, (ii) the duly executed Note evidencing such
Advance, and (iii) any other documents Lender may reasonably request.
(b) The representations and warranties set forth in Section 5 of this
Agreement and in Section 9 of the Warrant Agreement shall be true and correct in
all material respects on and as of the Advance Date with the same effect as
though made on and as of such date, except to the extent such representations
and warranties expressly relate to an earlier date.
(c) No Event of Default shall have occurred and be continuing.
(d) Each Advance Request shall be deemed to constitute a
representation and warranty by Borrower on the relevant Advance Date as to the
matters specified in paragraphs (b) and (c) of this Section 4.3 and in Sections
4.5 and, as to the matters set forth in the Advance Request.
4.4 At the Closing Date and each Advance Date, Borrower shall have taken or
caused to be taken such actions requested by Lender to grant Lender the Lien set
forth in Section 3.1 above in the Collateral, subject only to Permitted Liens.
Such actions shall include the delivery to Lender of all appropriate financing
statements, assignments, notices, and control agreements, executed by Borrower,
as to the Collateral granted by Borrower for all jurisdictions as may be
necessary or desirable to perfect or obtain the priority of Lender's Lien in
such Collateral.
4.5 As of the Closing Date and each Advance Date, no event that has had or
could reasonably be expected to have a Material Adverse Effect has occurred and
is continuing.
SECTION 5. REPRESENTATIONS AND WARRANTIES OF BORROWER
Borrower represents and, warrants that as of the Closing Date except as
set forth in the Disclosure Schedule:
5.1 Borrower owns all right, title and interest in and to the Collateral,
free of all Liens whatsoever, except for Permitted Liens.
5.2 Borrower has the full power and authority to grant and convey to Lender
a Lien in the Collateral as security for the Secured Obligations, free of all
other Liens other than Permitted Liens. Except for Permitted Liens, no other
Lien has been created by Borrower or is known by Borrower to exist with respect
to any Collateral.
5.3 Borrower is a corporation duly organized, legally existing and in good
standing under the laws of the State of Delaware, and is duly qualified as a
foreign corporation in all jurisdictions in which the nature of its business or
location of its properties require such qualifications and where the failure to
be qualified could reasonably be expected to have a Material Adverse Effect.
Attached as Exhibit I hereto is a true, correct and complete list of each
Subsidiary, and all information set forth on Exhibit I is true, correct and
complete.
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5.4 Borrower's execution, delivery and performance of the Notes, this
Agreement, all financing statements, and all other Loan Documents, and
Borrower's execution of any Warrant Agreement then in effect, (i) have been duly
authorized by all necessary corporate action of Borrower, and (ii) will not
result in the creation or imposition of any Lien upon the Collateral, other than
Permitted Liens and the Liens created by this Agreement and the other Loan
Documents. The individual or individuals executing the Loan Documents and the
Warrant Agreement are duly authorized to do so, and the Loan Documents and the
Warrant Agreement constitute legal, valid and binding obligations of Borrower,
enforceable in accordance with their respective terms, subject to applicable
bankruptcy, insolvency, reorganization or other similar laws generally affecting
the enforcement of the rights of creditors.
5.5 This Loan Documents and the Warrant Agreement do not violate any
provisions of Borrower's Certificate of Incorporation, bylaws or any contract,
agreement, law, regulation, order, injunction, judgment, decree or writ to which
Borrower is subject.
5.6 The execution, delivery and performance of the Loan Documents and the
Warrant Agreement do not require the consent or approval of any other Person,
including any regulatory authority or governmental body of the United States or
any State thereof or any political subdivision of the United States or any State
thereof.
5.7 No event that has had or could reasonably be expected to have a
Material Adverse Effect has occurred and is continuing, and Borrower is not
aware of any event likely to occur that could reasonably be expected to result
in a Material Adverse Effect.
5.8
(a) There are no actions, suits or proceedings at law or in equity or
by or before any governmental authority now pending or, to the knowledge of
Borrower, threatened against or affecting Borrower or any business, property or
rights of Borrower (i) which involve any Loan Document or (ii) as to which there
is a reasonable possibility of an adverse determination and which, if adversely
determined, could, individually or in the aggregate, result in a Material
Adverse Effect.
(b) Borrower is not in violation of any law, rule or regulation, or in
default with respect to any judgment, writ, injunction or decree of any
governmental authority, where such violation or default could result in a
Material Adverse Effect.
5.9 Borrower is not in default in any manner under any provision of any
indenture or other agreement, contract or instrument evidencing indebtedness, or
any other material agreement, contract or instrument to which it is a party or
by which it or any of its properties or assets are or may be bound and for which
such default could result in a Material Adverse Effect.
5.10 No information, report, Advance Request, financial statement, exhibit
or schedule attached to any Loan Document or included therein contained,
contains any material misstatement of fact or omission, or omits to state any
material fact necessary to make the statements therein, in the light of the
circumstances under which they were, are or will be made, not misleading.
5.11 Borrower has filed all tax returns that it is required to file, and
has paid all taxes as and when due, or reserved for payment of such taxes in
accordance with GAAP, where failure to perform the aforesaid could result in a
Material Adverse Effect.
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5.12 Borrower's present name, former names (if any), locations, place of
formation, tax identification number, organizational identification number and
other information are correctly set forth in Exhibit D.
5.13 Borrower is the sole or joint owner of, or has the right to use,
solely or together with others, the Intellectual Property, except for licenses
granted by Borrower to its customers in the ordinary course of business.
Borrower is not in material breach of, nor has Borrower failed to perform under,
any agreements pursuant to which Borrower licenses material Intellectual
Property. The Intellectual Property constitutes all right used in or necessary
in the operation or conduct of Borrower's business as currently conducted by
Borrower.
5.14 Exhibit F contains a complete and accurate list of all Borrower
Products.
5.15 To the best of Borrower' s knowledge, each of the Copyrights,
Trademarks and Patents is valid and enforceable, and no part of the Intellectual
Property has been judged invalid or unenforceable, in whole or in part.
5.16 Borrower has not received any written notice or claim, from any third
party claiming that the operation of the business of Borrower as currently
conducted or proposed to be conducted, or that any Borrower Product infringes,
misappropriates, violates, dilutes or constitutes the unauthorized use of any
valid or enforceable right of any third party, including any Intellectual
Property of any third party.
5.17 No Intellectual Property or Borrower Product has been or is subject to
any actual or, to the knowledge of Borrower, threatened litigation, proceeding
(including any proceeding in the United States Patent and Trademark Office or
any corresponding foreign office or agency) or outstanding decree, order,
judgment, settlement agreement or stipulation that restricts in any manner
Borrower's use, transfer or licensing thereof or that may affect the validity,
use or enforceability thereof.
5.18 There is no outstanding or, to the knowledge of Borrower, threatened,
dispute or disagreement of which Borrower is aware with respect to any contract,
license or agreement between Borrower and any third party related to the
Intellectual Property.
5.19 Borrower has no knowledge that any third party is infringing,
misappropriating, diluting or violating any Intellectual Property and no such
claims have been brought against any third party by Borrower.
5.20 Exhibit G is a true, correct and complete list of (a) all banks and
other financial institutions at which Borrower maintains Deposit Accounts and
(b) all institutions at which Borrower an account holding Investment Property,
and such exhibit correctly identifies the name, address and telephone number of
each bank or other institution, the name in which the account is held, a
description of the purpose of the account, and the complete account number
therefor.
5.21 Borrower has no outstanding loans to any employee, officer or director
of the Borrower, which exceed with respect to any such employee, officer or
director $10,000, nor has Borrower guaranteed the payment of any unpaid loan
(which unpaid part exceeds $10,000) made to an employee, officer or director of
the Borrower by a third party.
SECTION 6. INSURANCE; INDEMNIFICATION
6.1 So long as there are any Secured Obligations outstanding, Borrower
shall cause to be carried and maintained its current existing insurance policies
listed in Exhibit N.
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6.2 Borrower shall deliver to Lender certificates of insurance, which
evidence Borrower's compliance with its insurance obligations in Section 6.1,
within fifteen (15) days of the Closing Date.
6.3 Borrower shall indemnify and hold Lender, its officers, directors
employees, agents, attorneys, representatives and shareholders harmless from and
against any and all costs, expenses, damages and liabilities, including
reasonable attorneys' fees and disbursement and other costs of investigation or
defense, that may be incurred by Lender as a result of credit having been
extended, suspended or terminated under this Agreement and the other Loan
Documents or the administration of such credit, or in connection with or arising
out of the transactions contemplated hereunder and thereunder, or any actions or
failure to act in connection therewith, or arising out of the disposition or
utilization of the Collateral, all of the abovementioned as a result of a third
party claim against Lender, excluding in all cases claims resulting solely from
(i) Lender's breach of this Agreement, gross negligence or willful misconduct
and (ii) agreements between Lender and a third party to which Borrower is not
party, or relationships or legal obligations between Lender and a third party
that exist at the election of Lender and not at the request of Borrower (e.g.,
claims by shareholders of Lender or claims in relation to securitization of the
Loan).
SECTION 7. COVENANTS OF BORROWER
Borrower covenants and agrees as follows at all times while any of the
Secured Obligations remain outstanding:
7.1 Borrower shall furnish to Lender the Compliance Certificate monthly (in
the form attached as Exhibit H) within five (5) business days of the end of each
month and financial statements listed hereinafter, each prepared in accordance
with GAAP (except for the absence of footnotes and subject to normal year-end
adjustments) (the "Financial Statements"):
(a) as soon as practicable (and in any event within thirty (30) days)
after the end of each month, unaudited interim financial statements as of the
end of such month (prepared on a consolidated and consolidating basis, if
applicable), including balance sheet and related statements of income and cash
flows accompanied by a report detailing any material contingencies (including
the commencement of any material litigation by or against Borrower) or any other
occurrence that could reasonably be expected to have a Material Adverse Effect,
all certified, on behalf of the Borrower and not in any personal capacity, by
Borrower's Chief Executive Officer or Chief Financial Officer to the effect that
such financial statements present fairly in all material respects the financial
condition and results of operations of Borrower in accordance with GAAP;
(b) as soon as practicable (and in any event within forty five (45)
days) after the end of each calendar quarter, unaudited interim financial
statements as of the end of such calendar quarter (prepared on a consolidated
and consolidating basis, if applicable), including balance sheet and related
statements of income and cash flows accompanied by a report detailing any
material contingencies (including the commencement of any material litigation by
or against Borrower) or any other occurrence that could reasonably be expected
to have a Material Adverse Effect, all certified, on behalf of the Borrower and
not in any personal capacity, by Borrower's Chief Executive Officer or Chief
Financial Officer to the effect that such financial statements present fairly in
all material respects the financial condition and results of operations of
Borrower in accordance with GAAP;
(c) as soon as practicable (and in any event within ninety (90) days)
after the end of each fiscal year, unaudited financial statements as of the end
of such year (prepared on a consolidated and consolidating basis, if
applicable), including balance sheet and related statements of income and cash
flows, and setting forth in comparative form the corresponding figures for the
preceding fiscal year;
15
(d) as soon as practicable (and in any event within one hundred and
twenty (120) days) after the end of each fiscal year, (i) audited financial
statements as of the end of such year (prepared on a consolidated and
consolidating basis, if applicable), including balance sheet and related
statements of income and cash flows, and setting forth in comparative form the
corresponding figures for the preceding fiscal year, certified by a firm of
independent certified public accountants selected by Borrower, accompanied by
any management report from such accountants (ii) budgets, operating plans and
other financial information reasonably requested by Lender, provided and limited
to such information, which has already been presented to the board of directors
of the Borrower or any committee thereof;
(e) promptly after the sending or filing thereof, as the case may be,
copies of any proxy statements, financial statements, financial materials or
financial reports that Borrower has made available to its Board of Directors or
common shareholders and copies of any regular, periodic and special reports or
registration statements that Borrower files with the Securities and Exchange
Commission or any governmental authority that may be substituted therefor, or
any national securities exchange; and
(f) promptly, any additional financial information and financial
materials reasonably requested by Lender, including without limitation, tax
returns, names of principal creditors, reports of adverse developments,
management letters, communications with stockholders or directors, press
releases and registration statements, provided that Borrower may refuse to
provide such information or any other information if (i) Borrower determines
that a conflict of interest exists between Borrower and Lender, (ii) the release
of such information would cause a violation of any duties of confidentiality to
a third party, (iii) the disclosure would result in the waiver of Borrower's
attorney client privilege, or (iv) the release of such information to Lender
would be injurious to Borrower's business.
The executed Compliance Certificate may be sent via facsimile to Lender at (650)
473-9194. All Financial Statements required to be delivered pursuant to clauses
(a), (b) and (c) shall be sent via e-mail to xxxxx@xxxxxxxxxxxx.xxx; provided,
that if e-mail is not available or sending such Financial Statements via e-mail
is not possible, they shall be sent via facsimile to Lender at: (000) 000-0000,
attention Chief Credit Officer, referenced Omrix Biopharmaceuticals, Inc.
7.2 As long as an Event of Default has not occurred and is continuing,
Borrower shall be entitled to permit and have certain convertible promissory
notes by Borrower to the order of certain of its investors in an aggregate
principal amount of up to $2,000,000, maturing not earlier than December 31,
2007, to be secured by Borrower's property pari passu with Lender's security
interest, provided the aggregate amount outstanding under this Agreement, at the
time such security is provided, is not more than $2,000,000.
7.3 Borrower shall permit any representative Lender authorizes, including
its attorneys and accountants, subject to such representatives first signing
non-disclosure agreements in a form acceptable to Borrower, to inspect, examine
and make copies and abstracts of the financial books of account and financial
records of Borrower at reasonable times and upon reasonable notice during normal
business hours. In addition, any such representative shall have the right to
meet with management and officers of Borrower to discuss such books of account
and records. In addition, Lender shall be entitled at reasonable times and
intervals to consult with and advise the management and officers of Borrower
concerning significant business issues affecting Borrower. Such consultations
shall not unreasonably interfere with Borrower's business operations. The
parties intend that the rights granted Lender shall constitute ["management
rights" within the meaning of 29 C.F.R Section 2510.3-101(d)(3)(ii),] but that
any advice, recommendations or participation by Lender with respect to any
business issues shall not be deemed to give Lender, nor be deemed an exercise by
Lender of, control over Borrower's management or policies. Lender shall bear all
costs related to the aforesaid inspections, meetings and consultations.
16
7.4 Borrower shall from time to time execute, deliver and file, alone or
with Lender, any financing statements, security agreements, collateral
assignments, notices, control agreements, or other documents to perfect or give
the highest priority to Lender's Lien on the Collateral, subject to Permitted
Liens and subject to and in accordance with the terms of this Agreement.
Borrower shall from time to time procure any instruments or documents as may be
reasonably requested by Lender, and take all further action that may be
necessary or desirable, or that Lender may reasonably request, to carry out more
effectively the provisions and purposes of the Loan Documents or the Warrant
Agreement or to confirm, perfect, preserve and protect the Liens granted hereby
and thereby.
7.5 Borrower shall protect and defend Borrower's title to the Collateral
and Lender's Lien thereon against all Persons claiming any interest adverse to
Borrower or Lender (except Persons acting with respect to the Permitted Liens).
Borrower shall at all times keep the Collateral and all other property and
assets used in Borrower's business or in which Borrower now or hereafter holds
any interest free and clear from any legal process (which is not contested in
good faith) or Liens whatsoever (except for Permitted Liens), and shall give
Lender immediate written notice of any legal process affecting the Collateral,
such other property and assets, or any Liens thereon.
7.6 Without Lender's prior written consent, Borrower shall not enter into
any loan agreement or otherwise borrow money which involves the grant of any
security interest (in addition to Existing Liens and except for Permitted Liens)
in any of the Borrower's assets except to the extent that such loan or borrowing
is subject to and subordinate to Lender's Lien on the Collateral on terms
reasonably acceptable to Lender, acceptance or approval of which not to be
unreasonably withheld. Notwithstanding the foregoing, Borrower shall be
entitled, in the event that an Existing Lien granted by the Borrower (to secure
the repayment of a loan or a credit facility which was paid) is released, grant
a security interest in the same priority as the released Existing Lien to secure
any new or existing loan or credit facility; provided that such new lien shall
be limited to the property encumbered by the existing Lien that was so released
and the principal amount of the indebtedness does not increase from the amount
secured under the Existing Lien that released.
7.7 Borrower shall maintain and protect its properties, assets and
facilities, including its Equipment and Fixtures, in good order and working
repair and condition (taking into consideration ordinary wear and tear and
obsolescence) and from time to time make or cause to be made all necessary and
proper repairs, renewals and replacements thereto and shall competently manage
and care for its property in accordance with prudent industry practices.
7.8 In the event that Borrower or any of its Subsidiaries shall enter into
or be a party to any Merger, then Borrower shall, at Lender's request, prepay
all Notes and Advances, in which case Borrower shall not be obligated to pay any
of the premium prepayment amounts in accordance with Section 2.4 herein.
7.9 Borrower agrees that, without the prior written consent of Lender, it
shall not, (a) repurchase or redeem any class of Borrower's stock other than
pursuant to employee, director or consultant repurchase plans or other similar
agreements, or (b) other than set forth in subsection 7.9(a) above, declare or
pay any cash dividend or make a cash distribution on any class of stock.
7.10 Upon the request of Lender and at Lender's own cost, Borrower, for
itself and on behalf of its Subsidiaries, agrees that during normal business
hours and with prior notice and coordination, Borrower shall make the Inventory,
Equipment, other Collateral, and books and records concerning Collateral
(including software used in Borrower or Subsidiary's business) available to
Lender for inspection at the place where Borrower is normally located and shall
make all logs and maintenance records pertaining to the Inventory and Equipment
available to Lender for inspection. Borrower, for itself
17
and on behalf of its Subsidiaries, shall take all action necessary to maintain
such books, records, logs, and maintenance records in a correct and complete
fashion.
7.11 Borrower and its Subsidiaries shall pay when due all taxes, fees or
other charges of any nature whatsoever (together with any related interest or
penalties) now or hereafter imposed or assessed against Borrower or the
Collateral or upon Borrower's ownership, possession, use, operation or
disposition thereof or upon Borrower's rents, receipts or earnings arising
therefrom. Borrower shall file on or before the due date therefor all personal
property tax returns in respect of the Collateral. Notwithstanding the
foregoing, Borrower may contest, in good faith and by appropriate proceedings,
taxes for which Borrower maintains adequate reserves therefor in accordance with
GAAP.
7.12 Neither Borrower nor any Subsidiary shall relocate its chief executive
office or its principal place of business unless it has provided prior written
notice to Lender.
7.13 Neither Borrower nor any Subsidiary shall change its corporate name,
legal form or jurisdiction of formation without twenty (20) days' prior written
notice to Lender.
7.14 Borrower shall arrange for automatic debit and corresponding payment
to Lender on each Payment Date of all periodic obligations payable to Lender
under each Note or Advance. All payments to Lender shall be wired to Lender's
bank account at the following address:
Hercules Technology Growth Capital, Inc.
C/O Union Bank of California
000 Xxxxxxxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxxxxxxx, XX 00000
Acct.# 4720023798
ABA# 000000000
7.15 Borrower shall not maintain any Deposit Accounts or accounts holding
Investment Property except with respect to which Lender has a perfected security
interest in each such account
7.16 Subject to and without derogating from Section 7.6, which Section 7.6
will apply mutatis mutandis to the Guarantors, without Lender's prior written
consent, Borrower shall not allow any Guarantor to enter into any loan agreement
or otherwise borrow money that involves the grant of a security interest, except
Permitted Liens (which definition will apply mutatis mutandis to the Guarantors)
in any of the Israeli Assets unless such transaction involves not more than
$100,000, and except (i) purchase money security interests that are confined to
the Equipment purchased and the proceeds thereof or (ii) security interests in
property subordinated to Lender's security interests on terms acceptable to
Lender, approval or acceptance of which not to be unreasonably withheld.
SECTION 8. RIGHT TO PURCHASE STOCK
8.1 Lender shall have the right, in its discretion, to purchase shares of
Borrower's securities having an aggregate purchase price of up to One Million
U.S. Dollars ($1,000,000.00) in the first Equity Event to occur after the
Closing Date and prior to an Initial Public Offering. Such right shall be upon
the most favorable terms and conditions afforded to other investors in each such
Equity Event (not including any board of directors representation rights, veto
rights and any similar rights), provided, however, that if Lender will wish, at
any time following such purchase, but before Borrower's Initial Public Offering,
to sell or otherwise transfer, directly or indirectly, any or all of such shares
purchased by the Lender, it shall be required to offer the Borrower to acquire
such shares, and if the Borrower refuses then the Lender may sell or transfer
such shares, but on terms not more favorable to the buyer of such shares than
the terms offered by the Lender to the Borrower. Notwithstanding the foregoing,
the Lender agrees and
18
acknowledges that its rights under this Section 8.1 shall be subject to the
participation rights of the other shareholders of Borrower as set forth in
Section 3 to the Investor Rights Agreement among Borrower and its shareholders
of December 2004 (which allows, however, the Borrower under certain terms to
issue, without triggering the participation rights, up to an aggregate of 3
million shares to obtain bank financing or borrowing). Lender may not assign its
rights under this Section 8 without the prior written consent of Borrower,
provided no consent shall be necessary for an assignment to an Affiliate of
Lender. "Affiliate" means any Person that directly or indirectly owns or
controls Lender, any Person that is controlled by or is under common control
with Lender, and Lender's officers and directors.
SECTION 9. Reserved
SECTION 10. EVENTS OF DEFAULT
The occurrence of any one or more of the following events (herein called
"Events of Default") shall constitute a default under this Loan Agreement, the
Notes, and the other Loan Documents:
10.1 Borrower defaults in the payment of any principal, interest or other
Secured Obligation involving the payment of money under this Agreement, the
Notes or any of the other Loan Documents, provided Borrower may cure any default
by making such payment within one business day after the receipt of notice from
Lender, or
10.2 Borrower breaches or defaults in the performance of any covenant under
this Agreement, and (a) with respect to a default under any covenant under this
Agreement (other than under Sections 6, 7.6, 7.8, 7.9, or Section 7.16) such
default continues for more than five (5) business days after the date on which
Lender has given notice of such default to Borrower or (b) with respect to a
default under Sections 6, 7.6, 7.8, 7.9, or Section 7.16 of this Agreement, such
default continues for more than ten (10) days after the earlier of the date on
which (i) Borrower has actual knowledge of such default or (ii) Lender has given
notice of such default to Borrower, or
10.3 Any representation or warranty made by Borrower in Section 5 of this
Agreement shall have been false or misleading in any material respect when made
or furnished;
10.4 A Material Adverse Effect occurs that is likely to result in a
material adverse effect on the ability of Borrower to perform the Secured
Obligations in accordance with the terms of this Agreement; or
10.5 Borrower (a) shall make an assignment for the benefit of creditors; or
(b) shall admit in writing its inability to pay its debts as they become due, or
its inability to pay or perform under the Loan Documents or the Excluded
Agreements; or (c) shall file a voluntary petition in bankruptcy; or (d) shall
file any petition, answer, or document seeking for itself any reorganization,
arrangement, composition, readjustment, liquidation, dissolution or similar
relief under any present or future statute, law or regulation pertinent to such
circumstances; or (e) shall seek or consent to or acquiesce in the appointment
of any trustee, receiver, or liquidator of Borrower or of all or any substantial
part (i.e., 33-1/3% or more) of the assets or property of Borrower; or (f) shall
cease operations of its business as its business has normally been conducted, or
terminate substantially all of its employees; or (g) Borrower or its directors
or majority shareholders shall take any action initiating any of the foregoing
actions described in clauses (a) through (f); or
10.6 Either (a) thirty (30) days shall have expired after the commencement
of an involuntary action against Borrower seeking reorganization liquidation,
dissolution or similar relief under any present
19
or future statute, law or regulation, without such action being dismissed or all
orders or proceedings thereunder affecting the operations or the business of
Borrower being stayed; or (b) Borrower shall file any answer admitting or not
contesting the material allegations of a petition filed against Borrower in any
such proceedings; or (c) the court in which such proceedings are pending shall
enter a decree or order granting the relief sought in any such proceedings,
which is not dismissed within thirty (30) days; or
10.7 Thirty (30) days shall have expired after the appointment, without the
consent or acquiescence of Borrower, of any trustee, receiver or liquidator of
Borrower or of all or any substantial part (i.e., 33-1/3% or more) of the
properties of Borrower without such appointment being vacated; or
10.8 The occurrence of any default under any Excluded Agreement, (other
than any default embodied in or covered by any other clause of this Section 10)
and such default continues for more than twenty (20) days after the Lender has
given notice of such default to Borrower which is likely to result in a Material
Adverse Effect; or
10.9 Either (a) the occurrence of any default (other than any default
embodied in or covered by any other clause of this Section 10), as a result of
which the payment of the amount outstanding under any lease, loan, or other
agreement or obligation of Borrower involving the borrowing of money is
accelerated or declared due before its stated maturity date (due to any default
or breach thereunder), which is likely to have a Material Adverse Effect that is
likely to result in a material adverse effect on the ability of Borrower to
perform the Secured Obligations in accordance with the terms of this Agreement,
or (b) the entry of any judgment or arbitration award against Borrower that is
likely to have a Material Adverse Effect that is likely to result in a material
adverse effect on the ability of Borrower to perform the Secured Obligations in
accordance with the terms of this Agreement.
SECTION 11. REMEDIES
11.1 Upon and during the occurrence of any one or more Events of Default,
(i) Lender shall have the right to terminate its commitment to make any
Advances, (ii) Lender may, at its option, accelerate and demand payment of all
or any part of the Secured Obligations and declare them to be immediately due
and payable (provided, that upon the occurrence of an Event of Default of the
type described in Sections 10.5 or 10.6, the Notes and all of the Secured
Obligations shall automatically be accelerated and made due and payable, in each
case without any further notice or act), and (iii) Lender may notify any of
Borrower's account debtor's to make payment directly to Lender, compromise the
amount of any such account on Borrower's behalf and endorse Lender's name
without recourse on any such payment for deposit directly to Lender's account.
Upon and during the continuance of an Event of Default, the unpaid principal of
and accrued interest on the Notes and Advances and all outstanding Secured
Obligations shall thereafter bear interest at the Default Rate. Lender may
exercise all rights and remedies with respect to the Collateral under the Loan
Documents or otherwise available to it under the UCC and other applicable law,
including the right to release, hold, liquidate, collect, realize upon, or
otherwise dispose of all or any part of the Collateral and the right to occupy,
utilize, process and commingle the Collateral. All Lender's rights and remedies
shall be cumulative and not exclusive.
11.2 Upon the occurrence and during the continuance of any Event of
Default, Lender may, at any time or from time to time, apply, collect,
liquidate, sell in one or more sales, any or all of the Collateral, in its then
condition or following any commercially reasonable preparation or processing, in
such order as Lender may elect. Any such sale may be made either at public or
private sale at its place of business or elsewhere. Borrower agrees that any
such public or private sale may occur upon ten (10) calendar days' prior written
notice to Borrower. Lender may require Borrower to assemble the Collateral and
make it available to Lender at a place designated by Lender that is reasonably
convenient to Lender
20
and Borrower. The proceeds of any sale, disposition or other realization upon
all or any part of the Collateral shall be applied by Lender in the following
order of priorities:
First, to Lender in an amount sufficient to pay in full Lender's costs
and professionals' and advisors' fees and expenses as described in
Section 12.15;
Second, to Lender in an amount equal to the then unpaid amount of the
Secured Obligations (including principal, interest, and the Default
Rate interest), in such order and priority as Lender may choose in its
sole discretion; and
Finally, after the full, final, and indefeasible payment in Cash of
all of the Secured Obligations, to any creditor holding a junior Lien
on the Collateral, or to Borrower or its representatives or as a court
of competent jurisdiction may direct.
Lender shall be deemed to have acted reasonably in the custody, preservation and
disposition of any of the Collateral if it complies with the obligations of a
secured party under the UCC.
11.3 Lender shall be under no obligation to marshal any of the Collateral
for the benefit of Borrower or any other Person, and Borrower expressly waives
all rights, if any, to require Lender to marshal any Collateral.
11.4 Notwithstanding anything stated to the contrary contained in this
Agreement and the Loan Documents, the Borrower's and the Guarantors' total and
maximum liability toward Lender for any breach of this Agreement and the Loan
Documents, any guaranty of the obligations under this Agreement and the Loan
Documents executed by any Person other than Borrower (including without
limitation the Guarantees), the covenants or in any case of an Event of Default
or otherwise under all such agreements (but expressly excluding from this limit
any liability in respect of the Warrant Agreement) shall be limited to the then
current outstanding unpaid Loan amount including all unpaid interest accrued
thereon plus any expenses due under Section 12.15 plus any amount due on account
of Section 6.3.
SECTION 12. MISCELLANEOUS
12.1 Continuation of Security Interest. This is a continuing Agreement and
the grant of a Lien hereunder shall remain in full force and effect and all of
the rights, powers and remedies of Lender hereunder shall continue to exist
until the Secured Obligations (other than inchoate indemnity obligations) are
fully, finally, and indefeasibly paid in Cash and until Lender has executed a
written termination statement. Lender shall execute a termination statement
immediately upon the full, final, and indefeasible payment in Cash of the
Secured Obligations hereunder, reconveying to Borrower, without recourse, the
Collateral and all rights conveyed hereby and returning possession of the
Collateral to Borrower and taking all necessary actions to remove any of
Lender's Liens in the Collateral. Without derogating from Section 11.4 above,
the rights, powers and remedies of Lender hereunder shall be in addition to all
rights, powers and remedies given by statute or rule of law and are cumulative.
The exercise of any one or more of the rights, powers and remedies provided
herein shall not be construed as a waiver of or election of remedies with
respect to any other rights, powers and remedies of Lender.
12.2 Severability. Whenever possible, each provision of this Agreement
shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement shall be prohibited by or
invalid under such law, such provision shall be ineffective only to the extent
and duration of such prohibition or invalidity, without invalidating the
remainder of such provision or the remaining provisions of this Agreement.
12.3 Notice. Except as otherwise provided herein, any notice, demand,
request, consent, approval, declaration, service of process or other
communication (including the delivery of Financial
21
Statements) that is required, contemplated, or permitted under the Loan
Documents or with respect to the subject matter hereof shall be in writing, and
shall be deemed to have been validly served, given, delivered, and received upon
the earlier of: (i) the first business day after transmission by facsimile or
hand delivery or deposit with an overnight express service or overnight mail
delivery service; or (ii) the third calendar day after deposit in the United
States mails, with proper first class postage prepaid (provided, that any
Advance Request shall not be deemed received until Lender's actual receipt
thereof), and shall be addressed to the party to be notified as follows:
(a) If to Lender:
HERCULES TECHNOLOGY GROWTH CAPITAL, INC.
Legal Department
Attention: Chief Legal Officer
000 Xxxxxxxxxx Xxxxxx
Xxxxx 000
Xxxx Xxxx, XX 00000
Facsimile: 000-000-0000
Telephone: 000-000-0000
With a copy to:
HERCULES TECHNOLOGY GROWTH CAPITAL, INC.
Attention: Xxxxx Xxxx
0000 Xxxxxxx Xxxxxx
00xx Xxxxx
Xxxxxx, XX 00000
Facsimile: 000-000-0000
Telephone: 000-000-0000
(b) If to Borrower:
OMRIX BIOPHARMACEUTICALS, INC.
MDA Blood Center, Tel Hashomer Hospital
Tel Aviv, ISRAEL
Attention: Xxxxxxx Xxxxxxxxx, Chief Financial Officer
Facsimile: x000 0 000 00 00
Telephone:x000 0 000 00 00
or to such other address as each party may designate for itself by like notice.
12.4 Entire Agreement; Amendments. This Agreement, the Notes, and the other
Loan Documents constitute the entire agreement and understanding of the parties
hereto in respect of the subject matter hereof and thereof, and supersede and
replace in their entirety any prior proposals, term sheets, letters,
negotiations or other documents or agreements, whether written or oral, with
respect to the subject matter hereof or thereof (including Lender's proposal
letter dated February 16, 2005). None of the terms of this Agreement, the Notes
or any of the other Loan Documents may be amended except by an instrument
executed by both parties hereto.
12.5 Headings. The various headings in this Agreement are inserted for
convenience only and shall not affect the meaning or interpretation of this
Agreement or any provisions hereof.
22
12.6 Advice of Counsel. Each of the parties represents to each other party
hereto that it has discussed (or had an opportunity to discuss) with its counsel
this Agreement and, specifically, the provisions of Sections 12.12, 12.13 and
12.14.
12.7 No Strict Construction. The parties hereto have participated jointly
in the negotiation and drafting of this Agreement. In the event an ambiguity or
question of intent or interpretation arises, this Agreement shall be construed
as if drafted jointly by the parties hereto and no presumption or burden of
proof shall arise favoring or disfavoring any party by virtue of the authorship
of any provisions of this Agreement.
12.8 No Waiver. The powers conferred upon Lender by this Agreement are
solely to protect its rights hereunder and under the other Loan Documents and
its interest in the Collateral and shall not impose any duty upon Lender to
exercise any such powers. No omission or delay by either Party at any time to
enforce any right or remedy reserved to it, or to require performance of any of
the terms, covenants or provisions hereof by the other Party at any time
designated, shall be a waiver of any such right or remedy to which such Party is
entitled, nor shall it in any way affect the right of that Party to enforce such
provisions thereafter.
12.9 Survival. All agreements, representations and warranties contained in
this Agreement, the Notes and the other Loan Documents or in any document
delivered pursuant hereto or thereto shall be for the benefit of Lender and
shall survive the execution and delivery of this Agreement and the expiration or
other termination of this Agreement until the full repayment of all Notes and
Advances.
12.10 Successors and Assigns. The provisions of this Agreement and the
other Loan Documents shall inure to the benefit of and be binding on Borrower
and its permitted assigns (if any). Borrower shall not assign its obligations
under this Agreement, the Notes or any of the other Loan Documents without
Lender's express prior written consent, and any such attempted assignment shall
be void and of no effect. Except as set forth in Section 8, above, Lender may
assign, transfer, or endorse its rights hereunder and under the other Loan
Documents as set forth in Section 7.12 without prior notice to Borrower; and all
of such rights shall inure to the benefit of Lender's successors and assigns;
provided, however, that in any such assignment by the Lender to an entity
unrelated to Lender where Lender ceases to have authority over the management of
this Agreement, the Borrower will be entitled to a prior notice and to pre-pay
all or any part of the Secured Obligations without paying any penalty payments
per Section 2.4 above. Except as set forth in Section 8, above, Borrower
consents to, and the previous sentence does not apply to, the assignment of this
Agreement to a bankruptcy proof or special purpose entity or the granting of a
security interest in this Agreement, in connection with the financing of
Lender's portfolio.
12.11 Governing Law. This Agreement, the Notes and the other Loan Documents
have been negotiated and delivered to Lender in the State of California, and
shall have been accepted by Lender in the State of California. Payment to Lender
by Borrower of the Secured Obligations is due in the State of California. This
Agreement, the Notes and the other Loan Documents shall be governed by, and
construed and enforced in accordance with, the laws of the State of California,
excluding conflict of laws principles that would cause the application of laws
of any other jurisdiction.
12.12 Consent to Jurisdiction and Venue. All judicial proceedings arising
in or under or related to this Agreement, the Notes or any of the other Loan
Documents may be brought in any state or federal court of competent jurisdiction
located in the State of California. By execution and delivery of this Agreement,
each party hereto generally and unconditionally: (a) consents to personal
jurisdiction in Santa Xxxxx County, California; (b) waives any objection as to
jurisdiction or venue in Santa Xxxxx County, State of California; (c) agrees not
to assert any defense based on lack of jurisdiction or venue in the
23
aforesaid courts; and (d) irrevocably agrees to be bound by any judgment
rendered thereby in connection with this Agreement, the Notes or the other Loan
Documents. Service of process on any party hereto in any action arising out of
or relating to this Agreement shall be effective if given in accordance with the
requirements for notice set forth in Section 12.3, and shall be deemed effective
and received as set forth in Section 12.3. Nothing herein shall affect the right
to serve process in any other manner permitted by law or shall limit the right
of either party to bring proceedings in the courts of any other jurisdiction.
12.13 Mutual Waiver of Jury Trial. Because disputes arising in connection
with complex financial transactions are most quickly and economically resolved
by an experienced and expert person and the parties wish applicable state and
federal laws to apply (rather than arbitration rules), the parties desire that
their disputes be resolved by a judge applying such applicable laws. EACH OF
BORROWER AND LENDER SPECIFICALLY WAIVES ANY RIGHT IT MAY HAVE TO TRIAL BY JURY
OF ANY CAUSE OF ACTION, CLAIM, CROSS-CLAIM, COUNTERCLAIM, THIRD PARTY CLAIM OR
ANY OTHER CLAIM (COLLECTIVELY, "CLAIMS") ASSERTED BY BORROWER AGAINST LENDER OR
ITS ASSIGNEE OR BY LENDER OR ITS ASSIGNEE AGAINST BORROWER. This waiver extends
to all such Claims, including Claims that involve Persons other than Borrower
and Lender; Claims that arise out of or are in any way connected to the
relationship between Borrower and Lender; and any Claims for damages, breach of
contract, specific performance, or any equitable or legal relief of any kind,
arising out of this Agreement, any other Loan Document or any of the Excluded
Agreements. If this jury waiver is for any reason unenforceable, the parties
agree that any disputes be resolved by binding arbitration conducted in
accordance with the commercial arbitration rules of the American Arbitration
Association, to be conducted in Palo Alto, California.
12.14 Professional Fees. Borrower promises to pay Lender's actually
incurred fees and expenses necessary to finalize the loan documentation, up to
an aggregate total sum of $100,000, including but not limited to attorneys fees,
UCC searches, filing costs, and other miscellaneous expenses. In addition,
Borrower promises to pay any and all reasonable attorneys' and other
professionals' fees and expenses incurred by Lender after the Closing Date in
connection with or related to: collection, or enforcement of the Loan or
Collateral. Lender's professional fees and expenses shall include reasonable
fees or expenses for Lender's attorneys, accountants, auctioneers, liquidators,
appraisers, investment advisors, environmental and management consultants, or
experts engaged by Lender in connection with the foregoing. Borrower's promise
to pay all of Lender's reasonable professional fees and expenses, as per this
Section 12.15, is part of the Secured Obligations under this Agreement. For the
purposes of this Section 12.15, attorneys' fees shall include reasonable fees
incurred in connection with the following: (i) contempt proceedings; (ii)
discovery; (iii) any motion, proceeding or other activity of any kind in
connection with an insolvency proceeding; (iv) garnishment, levy, and debtor and
third party examinations; and (v) post-judgment motions and proceedings of any
kind, including without limitation any activity taken to collect or enforce any
judgment. All of the foregoing costs and expenses not paid on or before the
Closing Date shall be payable with 30 days of written demand by Lender, and if
not paid within thirty (30) days of presentation of invoices shall bear interest
at the highest applicable Default Rate. Borrower agrees that Lender's written
demand need not consist of more detail than a separate line item for each
general category of expense and corresponding amount, such as legal fees and
costs $100.00, filing fees $100.00, or courier services $100.00, etc.
12.15 Confidentiality. Lender acknowledges that certain items of
Collateral, including, but not limited to trade secrets, source codes, customer
lists, and any Financial Statements and any other Borrower's information, which
is deemed by the Borrower to be confidential or proprietary in nature, provided
pursuant hereto or to which the Lender or its representatives will be exposed,
shall constitute proprietary and confidential information of Borrower (the
"Confidential Information"). Accordingly, Lender agrees that any Confidential
Information it may obtain in the course of acquiring, administering, or
perfecting Lender's security interest in the Collateral shall be received in the
strictest confidence and
24
shall not be disclosed to any other person or entity in any manner whatsoever,
in whole or in part, without the prior written consent of Borrower, except that
Lender may disclose any such information: (a) to its own directors, officers,
employees, accountants, counsel and other professional advisors and to its
affiliates if Lender in its sole discretion determines that any such party
should have access to such information and, provided that such recipient of such
Confidential Information either (i) agrees to be bound by the confidentiality
provisions of this paragraph 12.15 or (ii) is otherwise subject to
confidentiality restrictions that reasonably protect against the disclosure of
Confidential Information, and has been informed of the confidential nature of
such Confidential Information prior to its exposure thereto; (b) if such
information is generally available to the public when first disclosed to the
Lender; (c) if required or appropriate in any report, statement or testimony
submitted to any governmental authority having or claiming to have jurisdiction
over Lender; (d) if legally required in response to any summons or subpoena or
in connection with any litigation, to the extent permitted or deemed advisable
by Lender's counsel; (e) to comply with any legal requirement or law applicable
to Lender; (f) to the extent reasonably necessary in connection with the
exercise of any right or remedy under any Loan Document, including Lender's
sale, lease, or other disposition of Collateral after default, which Collateral
constitutes or is reasonably related to Confidential Information;(g) to any
participant or assignee of Lender or any prospective participant or assignee,
provided such participant or assignee or prospective participant or assignee
agrees in writing to be bound by this Section prior to disclosure; or (h)
otherwise with the prior consent of Borrower; provided, that any disclosure made
in violation of this Agreement shall not affect the obligations of Borrower or
any of its affiliates or any guarantor under this Agreement or the other Loan
Documents, and provided further that the foregoing proviso shall not preclude
Borrower from filing an action or asserting a claim against Lender as a
consequence of such disclosure.
12.16 Assignment of Rights. Borrower acknowledges and understands that
Lender may sell and assign all or part of its interest hereunder and under the
Note(s) and Loan Documents to any person or entity (an "Assignee"), subject to a
ten (10) day prior notice to the Borrower. After such assignment the term
"Lender" as used in the Loan Documents shall mean and include such Assignee, and
such Assignee shall be vested with all rights, powers and remedies of Lender
hereunder with respect to the interest so assigned; but with respect to any such
interest not so transferred, Lender shall retain all rights, powers and remedies
hereby given. No such assignment by Lender shall relieve Borrower of any of its
obligations hereunder. Lender agrees that in the event of any transfer by it of
the Note(s), it will endorse thereon a notation as to the portion of the
principal of the Note(s), which shall have been paid at the time of such
transfer and as to the date to which interest shall have been last paid thereon.
In addition, in such event, and except in the case of an assignment by Lender
pursuant to a securitization transaction, Borrower shall be entitled to prepay
the Notes and the Advances plus all interest accrued thereon without the need to
pay any prepayment premiums pursuant to Section 2.4.
12.17 Revival of Secured Obligations. This Agreement and the Loan Documents
shall remain in full force and effect and continue to be effective if any
petition is filed by or against Borrower for liquidation or reorganization, if
Borrower becomes insolvent or makes an assignment for the benefit of creditors,
if a receiver or trustee is appointed for all or any significant part of
Borrower's assets, or if any payment or transfer of Collateral is recovered from
Lender. The Loan Documents and the Secured Obligations and Collateral security
shall continue to be effective, or shall be revived or reinstated, as the case
may be, if at any time payment and performance of the Secured Obligations or any
transfer of Collateral to Lender, or any part thereof is rescinded, avoided or
avoidable, reduced in amount, or must otherwise be restored or returned by, or
is recovered from, Lender or by any obligee of the Secured Obligations, whether
as a "voidable preference," "fraudulent conveyance," or otherwise, all as though
such payment, performance, or transfer of Collateral had not been made. In the
event that any payment, or any part thereof, is rescinded, reduced, avoided,
avoidable, restored, returned, or recovered, the Loan Documents and the Secured
Obligations shall be deemed, without any further action or documentation, to
25
have been revived and reinstated except to the extent of the full, final, and
indefeasible payment to Lender in Cash.
12.18 Counterparts. This Agreement and any amendments, waivers, consents or
supplements hereto may be executed in any number of counterparts, and by
different parties hereto in separate counterparts, each of which when so
delivered shall be deemed an original, but all of which counterparts shall
constitute but one and the same instrument.
12.19 No Third Party Beneficiaries. No provisions of the Loan Documents are
intended, nor will be interpreted, to provide or create any third-party
beneficiary rights or any other rights of any kind in any person other than
Lender and Borrower unless specifically provided otherwise herein, and, except
as otherwise so provided, all provisions of the Loan Documents will be personal
and solely between the Lender and the Borrower.
12.20
(SIGNATURES TO FOLLOW)
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IN WITNESS WHEREOF, Borrower and Lender have duly executed and delivered
this Senior Loan and Security Agreement as of the day and year first above
written.
BORROWER: OMRIX BIOPHARMACEUTICALS, INC.
Signature: /s/ Xxxxxxx Xxxxxxxxx
-----------------------------
Print Name: Xxxxxxx Xxxxxxxxx
----------------------------
Title: CFO
---------------------------------
Accepted in Palo Alto, California:
LENDER: HERCULES TECHNOLOGY GROWTH CAPITAL, INC.
Signature: /s/ Xxxxx Xxxxxx
-----------------------------
Print Name: Xxxxx Xxxxxx
----------------------------
Title: Chief Legal Officer
---------------------------------
27
Table of Exhibits and Schedules
Exhibit A: Advance Request
Attachment to Advance Request
Exhibit B: Promissory Note
Exhibit C: Disclosure Schedule
Exhibit D: Name, Locations, and Other Information for Borrower
Exhibit E: Borrower's Patents, Trademarks, Copyrights and Licenses
Exhibit F: Borrower Products
Exhibit G: Borrower's Deposit Accounts and Investment Accounts
Exhibit H: Compliance Certificate
Exhibit I: List of Subsidiaries
Exhibit J: Form of Guaranties
Exhibit K: Existing Liens
Exhibit L: Discount Bank Ltd. Consent
Exhibit M: UCC Financing Statement, Compliance Certificate (including February
financial statements) and other Loan Documents
Exhibit N: Insurance Policies
28
EXHIBIT A
ADVANCE REQUEST
To: Lender: Date: ____________________
Hercules Technology Growth Capital, Inc.
000 Xxxxxxxxxx Xxxxxx Xxxxx 000
Xxxx Xxxx, XX 00000
Attention: (000) 000-0000 facsimile
Omrix Biopharmaceuticals, Inc. ("Borrower") hereby requests from Hercules
Technology Growth Capital, Inc. ("Lender") an Advance in the amount of
____________________________________ Dollars ($_____________________.00) on
____________________, _______(the "Advance Date") pursuant to the Senior Loan
and Security Agreement between Borrower and Lender (the "Agreement").
Capitalized words and other terms used but not otherwise defined herein are used
with the same meanings as defined in the Agreement.
Please:
(a) Issue a check payable to Borrower __________
or
(b) Wire Funds to Borrower's account __________
Bank: _________________________________________________
Address: ______________________________________________
______________________________________________
ABA Number: ___________________________________________
Account Number: _______________________________________
Account Name: _________________________________________
Borrower hereby represents that the conditions precedent to Advances set
forth in the Agreement are satisfied and shall be satisfied upon the making of
such Advance, including but not limited to: (i) that no Material Adverse Effect
in Borrower's business or financial condition has occurred; (ii) that the
representations and warranties set forth in the Agreement and in the Warrant
Agreement are and shall be true and correct in all material respects on and as
of the Advance Date with the same effect as though made on and as of such date,
except to the extent such representations and warranties expressly relate to an
earlier date; (iii) that Borrower is in compliance with all the terms and
provisions set forth in each Loan Document on its part to be observed or
performed; and (iv) that as of the Advance Date, no fact or condition exists
that would (or would, with the passage of time, the giving of notice, or both)
constitute an Event of Default under the Loan Documents. Borrower understands
and acknowledges that Lender has the right to review the financial information
supporting this representation and, based upon such review in its sole
discretion, Lender may decline to fund the requested Advance.
29
Borrower hereby represents that Borrower's corporate status and locations
are as set forth in the Attachment to this Advance Request.
Borrower agrees to notify Lender promptly before the funding of the Loan if
any of the matters which have been represented above shall not be true and
correct on the Borrowing Date and if Lender has received no such notice before
the Advance Date then the statements set forth above shall be deemed to have
been made and shall be deemed to be true and correct as of the Advance Date.
Executed this ___________ day of ________________________, _____________.
BORROWER: OMRIX BIOPHARMACEUTICALS, INC.
SIGNATURE:
-----------------------------
TITLE: Chief Executive Officer or
Chief Financial Officer
PRINT NAME:
----------------------------
30
ATTACHMENT TO ADVANCE REQUEST
Dated: ________________
Borrower hereby represents and warrants to Lender that Borrower's current name
and organizational status is as follows:
Name: OMRIX BIOPHARMACEUTICALS, INC.
Type of organization: corporation
State of organization: Delaware
Organization file number: 2985349
Borrower hereby represents and warrants to Lender that xxx xxxxxx xxxxxxxxx,
xxxxxx, xxxxxx and postal codes of its current locations are as follows:
Chief Executive Office: _____________________________________
_____________________________________
_____________________________________
Principal Place of Business: _____________________________________
_____________________________________
_____________________________________
Locations of Collateral: _____________________________________
_____________________________________
_____________________________________
31
EXHIBIT B
PROMISSORY NOTE
$5,000,000.00 Advance Date: _______________
Maturity Date: March 31, 2008
FOR VALUE RECEIVED, Omrix Biopharmaceuticals, Inc. a Delaware corporation
(the "Borrower") hereby promises to pay to the order of Hercules Technology
Growth Capital, Inc., a Maryland corporation or the holder of this Note (the
"Lender") at 000 Xxxxxxxxxx Xxxxxx, Xxxxx 000, Xxxx Xxxx, XX. 00000 or such
other place of payment as the holder of this Senior Promissory Note (this
"Note") may specify from time to time in writing, in lawful money of the United
States of America, the principal amount of___________________ Million 00/100
Dollars ($__________________) together with interest at eleven and 45/100
percent (11.45%) per annum based upon a year consisting of twelve (12) months of
thirty (30) days each. Each monthly installment shall be due and payable in
monthly installments of accrued interest only on the first day of the month
after the date of the Advance (the "Interest Only Payment Dates") through
October 1, 2005 (the "Interest Only Payment Dates"), followed by equal monthly
installments of principal and interested computed on the basis of a thirty (30)
month amortization schedule, through March 1, 2008, followed by a final payment
(the "Maturity Date Payment") consisting of interest and the balance of the
entire unpaid principal outstanding as of the Maturity Date. Each such monthly
installment, including the Maturity Date Payment, shall be due and payable on
the first calendar day of each month (each, a "Payment Date"), with the Maturity
Date Payment being due and payable on April 1, 2008. If any payment for an
Advance shall be payable on a day other than a business day, then such payment
shall be due and payable on the next succeeding business day. Each Advance shall
be repaid in full, together with all interest accrued thereon, on the Maturity
Date for said Advance, whether or not the Advance is evidenced by a Note.
Amounts repaid on any Loan shall not be reborrowed.
This Promissory Note is the Note referred to in, and is executed and
delivered in connection with, that certain Senior Loan and Security Agreement
dated March 31, 2005, by and between Borrower and Lender (as the same may from
time to time be amended, modified or supplemented in accordance with its terms,
the "Loan Agreement"), and is entitled to the benefit and security of the Loan
Agreement and the other Loan Documents (as defined in the Loan Agreement), to
which reference is made for a statement of all of the terms and conditions
thereof. All terms defined in the Loan Agreement shall have the same definitions
when used herein, unless otherwise defined herein. An Event of Default under the
Loan Agreement shall constitute a default under this Promissory Note.
In case of a conflict between the terms of this Note and the terms of the
Loan Agreement, the Loan Agreement will prevail.
Borrower waives presentment and demand for payment, notice of dishonor,
protest and notice of protest under the UCC or any applicable law.
This Note has been negotiated and delivered to Lender and is payable in the
State of California. This Note shall be governed by and construed and enforced
in accordance with, the laws of the State of California, excluding any conflicts
of law rules or principles that would cause the application of the laws of any
other jurisdiction.
OMRIX BIOPHARMACEUTICALS, INC.
Signature:
-----------------------------
Print Name:
----------------------------
Title:
---------------------------------
32
EXHIBIT C
DISCLOSURE SCHEDULE
This Borrower's Disclosure Schedule is furnished by Borrower to Lender
pursuant to the Senior Loan And Security Agreement, dated as of March 31, 2005
by and among Borrower and Lender (the "AGREEMENT").
The representations and warranties made by the Borrower in the Agreement
are qualified by and subject to the exceptions identified in the information set
forth in this Disclosure Schedule and shall not be deemed to expand in any way
the scope or effect of any of such representations and warranties. The
disclosure of any item or information in this Disclosure Schedule shall not be
construed as an admission that such item or information is material to the
Borrower or any Subsidiary thereof, and any inclusion in this Disclosure
Schedule shall expressly not be deemed to constitute an admission, or otherwise
imply, that any such item or information is material or creates measures for
materiality for the purposes of the Agreement.
The items and information reflected in this Disclosure Schedule are not
necessarily limited to matters required by the Agreement to be reflected. Each
matter disclosed is arranged in paragraph by reference to the number and letter
of the sections, and if applicable, subsection of Article 5 of the Agreement to
which it relates, and each of the disclosures shall be deemed to be incorporated
by reference into the representations and warranties made in Article 5 of the
Agreement. Any information disclosed under any section, subsection, paragraph
and clause of this Disclosure Schedule shall be deemed disclosed and
incorporated into any other section, subsection, paragraph and clause hereof
where it is reasonably apparent that such disclosure, without reference to
extrinsic documentation, is relevant to such other section, subsection,
paragraph or clause. Capitalized terms used herein but not otherwise defined
shall have the meanings set forth in the Agreement.
SECTION 5.2
Omrix Biopharmaceuticals Ltd. has outstanding loans and credit lines with
(i) Magen Xxxxx Xxxx, (ii) Israel Discount Bank, and (iii) Bank Hapoalim
(collectively, the "Loan and Xxxxxx Agreements"), copies of all such Loan and
Credit Agreements were delivered to Lender prior to execution of the Agreement.
Omrix Biopharmaceuticals Ltd. has the following liens (copies of all such liens
were delivered to Lender prior to execution of the Agreement):
1. Lien dated December 9, 2001 to Magen Xxxxx Xxxx (as amended on July 10,
2002).
2. Lien dated October 2, 2000 to Israel Discount Bank (as amended on June 17,
2002).
3. Lien dated June 18, 2001 to Bank Hapoalim (Kupat Holim Mehuedet).
4. Lien dated June 18, 2001 to Bank Hapoalim (Kupat Holim Leumit).
5. Lien dated July 9, 2001 to Israel Discount Bank.
6. Lien dated October 27, 2003 to Israel Discount Bank.
The Loan and Credit Agreements and the Liens listed above require consent
of the lenders therein and include certain additional restrictions.
33
SECTION 5.3
The Company's subsidiaries are:
COMPANY AND JURISDICTION SHAREHOLDER(S)
------------------------ --------------
Omrix Biopharmaceuticals S.A. (Belgium) Omrix Biopharmaceuticals Inc.
Omrix Biopharmaceuticals Ltd. (Israel) Omrix Biopharmaceuticals SA - 100
Shares
Biopex Ltd. (Israel) Omrix Biopharmaceuticals SA - 99
Shares
Xxxxxx Xxxx - 1 Share
The transfer of shares of Omrix Biopharmaceuticals Ltd. is subject to the
consent of Discount Bank. In addition capital holders of the Borrower are
subject to that certain Stockholders Agreement and Investors Rights Agreement
entered into by and among the Borrower and its stockholders and investors, dated
as of December 2004. Copies of such agreements including the Borrowers
Certificate of Incorporation were delivered to the Lender. Copies of the
Borrower's unaudited financial statements for the period ending December 31,
2004, were delivered to the Lender.
SECTION 5.6
Execution and consummation of the Agreement and the issuance of the Warrant
require the approval of the Borrower's Board of Directors and the consent of at
least 62.5% of the Borrower's stockholders. Copies of the disclosure schedule
attached to the Recapitalization Plan effected by the Borrower on December 2004
was delivered to the Lender.
SECTION 5.8
See the attached correspondence relating to a dispute with Medimop Medical
Projects Ltd. (the Borrower's currently sole manufacturer of devices used to
administer the OFS). The Borrower's relationship with Medimop is under
discussion. Such relationship may terminate and may result in mutual legal
claims relating to the right to manufacture and use by the Borower and Medimop
of certain components of the devices used to administer the OFS. See the
disclosure in Section 5.9 of these schedules.
Compliance with laws:
Environmental Matters - See the attached memorandum providing information
with respect to (i) the toxic material permit issued by the Ministry of
Environment valid until October 26, 2006 and (ii) submerged tanks at the
Company's facility (PFI) at Tel Hashomer Hospital, Kiryat Ono, Israel.
Possible Limitations on Future Financing:
The Borrower's Amended and Restated Certificate of incorporation contain
provisions requiring the consent of the holders of 62% of the Company's
outstanding common stock to create or issue certain securities or create or
authorized new debt securities if the Company's aggregate indebtedness would
exceed $10 million. The Investor Rights Agreement of the Company provides the
parties to that agreement with certain participation rights to purchase
securities offered by the Company. In addition the
34
2005 Convertible Promissory Notes (approx. US$1,967,000 principal amount) also
include certain restrictions (section 3) on the ability of the Borrower to
receive additional loans. Copies of all such certificates and notes were
delivered to the Lender. Such restrictions and other provisions could adversely
affect the Borrower's ability to obtain future financing.
SECTION 5.9
Medimop Medical Projects Ltd., the Company's supplier for the syringe used
to administer the Company's fibrin sealant - see additional details above.
See also section 5.8 above.
SECTION 5.11
The Borrower did not yet filed the 2003 and 2004 tax return with the US
IRS.
SECTION 5.12
(i) See the attached list of patents and patent registrations. The Company
is also the owner of the xxxx Crosseal(R) for a fibrin surgical sealant U.S.
Registration No. 2,795,937, Canadian registration application no. 1158476.
(ii) The Company's Intellectual Property Rights are subject to the
following Security Interests, rights, options, agreements and licenses:
(a) Agreement dated October 5, 2000 by and between Xxxx. Xxxxx
Xxxxxxxxxxx and the Company pursuant to which Xx. Xxxxxxxxxxx is owed certain
payments.
(b) Non-exclusive license dated as of May 1996 for Solvent/Detergent
Treated Blood Derived Therapeutic Products granted by the New York Blood Center,
Inc. Royalties are payable as described in the amendment dated as of February
25, 2002.
(c) The Company has granted a worldwide license to Amerharn to sell
its fibrinogen column technology for fields of use other than fibrin sealants.
(d) The Company is engaged in joint development activities with
Ethicon, Inc., a subsidiary of Xxxxxxx & Xxxxxxx, pursuant to a Development
Agreement with Ethicon.
Copies of all such documents mentioned above were delivered to
the Lender.
(e) Omrix Biopharmaceuticals Ltd. received funding from the Israeli
Chief Scientist in connection with the research of anti-idiotype therapy. This
funding may cause certain restrictions on the ability of Omrix
Biopharmaceuticals Ltd. to sell the technology resulting from the Israeli Chief
Scientist funded research and the Israeli R&D Laws.
(iii) See the correspondence referred to under Section 5.8 with respect to
a claim by Medimop Medical Projects Ltd. of alleged misuse of confidential
information of Medimop, and the Company's response to such claim.
35
SECTIONS 5.16, 5.17, AND 5.18
See attached correspondence with Medimop Medical Projects Ltd.
SECTION 5.20
Lender Principal Terms
------ --------------------------------------------------
Discount Bank (to Total credit line of NIS 22,000,000 under
Ltd.) different facilities. Covenants: Equity +
shareholders loans of no less then NIS 20 million.
The use of NIS 13,500,000 out of such credit line
is subject to Omrix Biopharmaceuticals Ltd's
execution of certain documents.
Liens - see Section 5.2 above
Bank Hapoalim (to Ltd.) Total credit line - NIS 750,000.
Liens - see Section 5.2 above
MDA Extended supplier credit line of $3,600,000
($3,200,000) to be paid in 2005.
36
EXHIBIT D
NAME, LOCATIONS, AND OTHER INFORMATION FOR BORROWER
1. Borrower hereby represents and warrants to Lender that Borrower's current
name and organizational status as of the Closing Date is as follows:
Name: Omrix Biopharmaceuticals, Inc.
Type of organization: corporation
State of organization: Delaware
Organization file number: 2985349
2. Borrower hereby represents and warrants to Lender that for five (5) years
prior to the Closing Date, Borrower did not do business under any other
name or organization or form except the following:
Name: Omrix Biopharmaceuticals, Inc.
Used during dates of:
Type of Organization: corporation
State of organization: Delaware
Organization file Number: 2985349
3. Borrower's fiscal year ends on _________________.
4. Borrower's federal employer tax identification number is _________________.
5. Borrower hereby represents and warrants to Lender that xxx xxxxxx
xxxxxxxxx, xxxxxx, xxxxxx and postal codes of its current locations as of
the Closing Date are:
Chief Executive Office: Chauss'ee de Waterloo, 200 X-0000 Xxxxx Xx. Xxxxxx
Xxxxxxx
Principal Place of Business: Same
Locations of Collateral:
37
EXHIBIT E
BORROWER'S PATENTS, TRADEMARKS, COPYRIGHTS AND LICENSES
Trademark Registration/Application No.
Patents Registration/Application No.
See Attached
Copyrights Registration No.
Licenses
See Disclosure Schedule Exhibit C
38
EXHIBIT F
BORROWER PRODUCTS
Licensed Products
Quixil/Crosseal
Omri - Hep B
Omrigam XX
XXX
Under development (including clinical trials)
WNF
HTVIG
Thrombin stand along
Fleece
FSII
39
EXHIBIT G
BORROWER'S DEPOSIT ACCOUNTS AND INVESTMENT ACCOUNTS
Accounts with the banks indicated below:
HSBC
Account number: 00000000000
Contact info: Xxxx Xxxxx- EVP Tel: 00 0 00 00 0000
xxxx.xxxxx@xxxxxxxxxxxxxxx.xxx
Xxxxx Xxxxxxxx - Account officer Tel: 00 0 00 00 0000
xxxxx.xxxxxxxx@xxxxxxxxxxxx.xxx
SUNTRUST
Account Number: 0000000000000
Contact Info: 0 000 0000 0000
40
EXHIBIT H
COMPLIANCE CERTIFICATE
Hercules Technology Growth Capital, Inc.
000 Xxxxxxxxxx Xxxxxx
Xxxxx 000,
Xxxx Xxxx, XX 00000
Re: Reference is made to that certain Senior Loan and Security Agreement
dated March 31, 2005 and all ancillary documents entered into in connection with
such Loan and Security Agreement all as may be amended from time to time,
(hereinafter referred to collectively as the "Loan Agreement") between Hercules
Technology Growth Capital, Inc. ("Hercules") as Lender and Omrix
Biopharmaceuticals, Inc. (the "Company") as Borrower. All capitalized terms not
defined herein shall have the same meaning as defined in the Loan Agreement.
Gentlemen:
The undersigned is an Officer of the Company, knowledgeable of all Company
financial matters, and is authorized to provided certification of information
regarding the Company; hereby certifies that in accordance with the terms and
conditions of the Loan Agreement, the Company is in complete compliance for the
period ending ______________ of all required conditions and terms except as
noted below. Attached are the required documents supporting the above
certification. The undersigned further certifies that these are prepared in
accordance with Generally Accepted Accounting Principles (except for the absence
of footnotes with respect to unaudited financial statement and subject to normal
year end adjustments) and are consistent from one period to the next except as
explained below.
Indicate compliance status by circling Yes/No under "Complies "
REPORTING REQUIREMENT REQUIRED COMPLIES
--------------------- -------- --------
Interim Financial Statements Monthly within 30 days YES / NO
Interim Financial Statements Quarterly within 45 days YES / NO
Audited Financial Statements FYE within 90 days YES / NO
FINANCIAL COVENANTS REQUIRED COMPLIES
------------------- -------- --------
None
ALL OTHER COVENANTS REQUIRED COMPLIES
------------------- -------- --------
YES / NO
REOUIRED EXPLANATIONS FOR NONCOMPLIANCE OF ANY OF THE ABOVE:
________________________________________________________________________________
________________________________________________________________________________
Very Truly Yours,
By:
------------------------------------
Name:
----------------------------------
Its:
-----------------------------------
41
EXHIBIT I
LIST OF SUBSIDIARIES
Name and Address Country of Formation Location of Each Office
---------------- -------------------- -----------------------
See Disclosure Schedule Exhibit C
42
EXHIBIT J
FORM OF UNCONDITIONAL GUARANTY
43
EXHIBIT K
LIST OF EXISTING LIENS
See Disclosure Schedule Exhibit C
44
EXHIBIT L
DISCOUNT BANK LTD. CONSENT
45
ISRAEL DISCOUNT BANK : ISRAELI TEXT
Business Center - South
166682.DOC
Date: 30/3/05
To
Omrix Biopharmaceuticals Ltd.
Company reg. no. 00-000000-0
(HEREINAFTER, "THE COMPANY")
Dear Sirs,
Re: Letter of Agreement to create a Floating Charge in the Second Degree
in favors of Hercules Technology Growth Capital, INC
Whereas you signed in favors of Israel Discount Bank Ltd. (hereinafter, "the
Bank") Debenture/s whereby you created in favors of the Bank, inter
alia, a floating charge on all the Company's present and future assets
and property of whatsoever nature (hereinafter, "the floating charge
in favors of the Bank"), and;
Whereas in accordance with the floating charge in favors of the Bank you
undertook inter alia, not to attach and/or charge and/or pledge the
Company's assets and property or any part thereof to others without
obtaining the Bank's prior written consent, and;
Whereas you requested the Bank's agreement to create a floating charge in the
second degree, in an unlimited amount, on all the Company's present
and future assets and property of whatsoever nature, in favors of
Hercules Technology Growth Capital, INC (hereinafter, "the Investor")
as security for a loan in the Omrix Group in an amount of up to 5
million usd which was effected or will be effected by the Investor
(hereinafter, "the floating charge in the second degree");
Now, Therefore, the Bank hereby confirms it's agreement that you create the
floating charge in the second degree, unlimited in amount, in favors of the
Investor, subject to the Bank having preferential rights pursuant to the
floating charge in favors of the Bank and/or any other document, with such
rights being unconditional and independent of the rights of the Investor.
This Letter of Agreement is also subject to the following conditions:
l. The Bank will be entitled to grant the Company additional credit facilities
and/or renew credit facilities, unlimited in amount, which will also be
secured by the floating charges favors of the Bank and/or other floating
and/or fixed charges which the Company created and/or will create in favor
of the Bank, without having to obtain the consent of the
ISRAEL DISCOUNT BANK : ISRAELI TEXT
Investor and the Bank's preferential rights pursuant to the aforementioned
Debenture/s will have priority over the rights of the Investor.
2. The Investor will not be entitled to realise any of its rights pursuant to
the floating charge in the second degree without obtaining the Bank's prior
written consent.
3. The Bank will be entitled to realise any of its rights pursuant to any
charge and/or pledge which the Company created in favors of the Bank
including the floating charge in the first degree in favors of the Bank,
without having to obtain the consent of the Investor and without having to
provide any notice whatsoever to the Investor in connection with the
aforementioned realisation of the Bank's rights.
4. This Letter of Agreement does not derogate from and/or affect any of the
Company's undertakings and/or charges which it created and/or will create
in favors of the Bank.
5. This Letter of Agreement is valid until the 30.5.04, inclusive. If until
the 30.5.04 the Company has not created a floating charge in the second
degree in favors of the Investor then this Letter of Agreement will be
considered as cancelled and null and void.
Yours sincerely,
/s/ Authorized Officer
----------------------------------------
Israel Discount Bank Ltd.
Business Centre - South
cc. Hercules Technology Growth Captial, INC.
EXHIBIT M
UCC FINANCING STATEMENT AND OTHER LOAN DOCUMENTS
46
EXHIBIT N
INSURANCE POLICIES
See Attached
47
