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EXHIBIT 10.29
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SECURITIES
PURCHASE AGREEMENT
among
INTRACEL CORPORATION,
XXXXXXX INC.,
PERIMMUNE HOLDINGS, INC.,
PERIMMUNE, INC.
and
NORTHSTAR HIGH YIELD FUND
NORTHSTAR HIGH TOTAL RETURN FUND
NORTHSTAR HIGH TOTAL RETURN FUND II
NORTHSTAR STRATEGIC INCOME FUND
Dated as of August 25, 1998
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TABLE OF CONTENTS
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ARTICLE I DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION...............................2
Section 1.1 Definitions...........................................................................2
Section 1.2 Accounting Terms and Determinations..................................................13
ARTICLE II THE SECURITIES.......................................................................13
Section 2.1 Issuance, Sale and Delivery of the Securities........................................13
Section 2.2 Closing; Purchase Price; Purchase Price Allocation...................................13
ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND THE SUBSIDIARIES...................15
Section 3.1 Organization, Qualifications and Corporate Power.....................................15
Section 3.2 Authorization of Agreements, etc.....................................................15
Section 3.3 Validity.............................................................................16
Section 3.4 Authorized Capital Stock.............................................................16
Section 3.5 Financial Statements.................................................................17
Section 3.6 Absence of Undisclosed Liabilities and Charges.......................................18
Section 3.7 Events Subsequent to the Date of the Balance Sheet...................................18
Section 3.8 Litigation; Compliance with Law......................................................18
Section 3.9 Title to Properties..................................................................19
Section 3.10 Leasehold Interests..................................................................19
Section 3.11 Taxes................................................................................19
Section 3.12 Other Agreements.....................................................................20
Section 3.13 Patents, Trademarks, etc.............................................................22
Section 3.14 Loans and Advances...................................................................22
Section 3.15 Assumptions, Guaranties, etc. of Debt of Other Persons...............................22
Section 3.16 Significant Customers and Suppliers..................................................23
Section 3.17 Governmental Approvals...............................................................23
Section 3.18 Insurance............................................................................23
Section 3.19 Employment Relations.................................................................23
Section 3.20 Compensation of Key Employees........................................................24
Section 3.21 Environmental Compliance.............................................................24
Section 3.22 Projections..........................................................................24
Section 3.23 Disclosure; Accuracy of Statements...................................................24
Section 3.24 Matters Relating to OncoVAX Products.................................................24
Section 3.25 Subsidiaries.........................................................................24
Section 3.26 Use of Proceeds......................................................................25
Section 3.27 Location of Collateral...............................................................25
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ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS.....................................25
Section 4.1 Purchase of Securities...............................................................25
Section 4.2 Authority............................................................................26
Section 4.3 Projections..........................................................................26
Section 4.4 Risk Factors.........................................................................26
ARTICLE V COVENANTS............................................................................26
Section 5.1 Payment of Principal, Premium and Interest...........................................26
Section 5.2 Money for Note Payments to be Held in Trust..........................................26
Section 5.3 Existence............................................................................26
Section 5.4 Maintenance of Assets................................................................27
Section 5.5 Payment of Taxes and Other Claims; Comply with Material Obligations..................27
Section 5.6 Financial Covenants..................................................................27
Section 5.7 Limitation on Restricted Payments....................................................29
Section 5.8 Limitation on Certain Restrictions Affecting any Subsidiary..........................29
Section 5.9 Limitation on Liens..................................................................30
Section 5.10 Maintenance of Insurance.............................................................30
Section 5.11 Waiver of Stay, Extension and Usury Laws.............................................31
Section 5.12 Financial Statements; Other Information..............................................32
Section 5.13 Inspection and Delivery of Property; Books and Records; Discussions..................35
Section 5.14 Further Security Interest............................................................35
Section 5.15 Further Assurances...................................................................36
Section 5.16 Limitation on Debt...................................................................37
Section 5.17 Limitation on Mergers; Etc...........................................................38
Section 5.18 Limitation on Sales of Property......................................................39
Section 5.19 Limitation on Transactions with Affiliates...........................................39
Section 5.20 Limitation on Credit Extensions......................................................39
Section 5.21 Limitation on Certain Amendments.....................................................40
Section 5.22 Limitation on Investments............................................................40
Section 5.23 Use of Proceeds......................................................................40
Section 5.24 Assumption of Company Debt by Subsidiaries...........................................41
Section 5.25 Covenants with respect to OncoVAX Cancer Vaccine.....................................41
Section 5.26 Covenant with respect to Transfer of Certain Patents................................41
Section 5.27 Foreign Currency Liabilities.........................................................42
Section 5.28 Unaudited Financial Statements.......................................................42
Section 5.29 Consent of Transamerica Business Credit Corporation..................................42
Section 5.30 Interest Escrow Security Agreement...................................................42
Section 5.31 Waiver of Certain Covenants..........................................................42
ARTICLE VI CONDITIONS TO THE OBLIGATIONS OF THE PURCHASERS......................................42
Section 6.1 Supporting Documents.................................................................42
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Section 6.2 Fees of Purchasers...................................................................43
Section 6.3 Warrants.............................................................................43
Section 6.4 Amended and Restated Warrants........................................................43
Section 6.5 Interest Escrow Security Agreement...................................................43
Section 6.6 Notes................................................................................43
Section 6.7 Security Agreements..................................................................43
Section 6.8 Pledge Agreement.....................................................................43
Section 6.9 Guarantees...........................................................................43
Section 6.10 Pledged Stock........................................................................44
Section 6.11 Escrow Agreement.....................................................................44
Section 6.12 Financing Statements.................................................................44
Section 6.13 First Union Agreement................................................................44
Section 6.14 Principal Executive Officer..........................................................44
Section 6.15 Agreement with Akzo..................................................................44
Section 6.16 Financial Statements.................................................................45
Section 6.17 Letter of Instructions...............................................................45
Section 6.18 Other Actions........................................................................45
Section 6.19 No Adverse Actions...................................................................45
Section 6.20 Opinion of Counsel...................................................................45
ARTICLE VII PAYMENT FOR PURCHASE OF SECURITIES...................................................45
ARTICLE VIII MISCELLANEOUS........................................................................45
Section 8.1 Expenses.............................................................................45
Section 8.2 Brokerage............................................................................46
Section 8.3 Notices..............................................................................46
Section 8.4 Governing Law; Submission to Jurisdiction............................................46
Section 8.5 Entire Agreement.....................................................................47
Section 8.6 Counterparts.........................................................................48
Section 8.7 Amendments...........................................................................48
Section 8.8 Disclosure to Other Persons..........................................................48
Section 8.9 Limitation on Interest...............................................................49
Section 8.10 Severability.........................................................................49
Section 8.11 Titles and Subtitles.................................................................49
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EXHIBITS
Exhibit A-1 and A-2 Form of Primary Note and Escrow Note, respectively
Exhibit B-1 Form of Series A-VI Warrant
Exhibit B-2 through B-6 Form of Amended and Restated Warrants
Exhibit C Form of Registration Rights Agreement
Exhibit D Form of Interest Escrow Security Agreement
Exhibit E Form of Security Agreement
Exhibit F Form of Intellectual Property Security Agreement
Exhibit G Form of Pledge Agreement
Exhibits H-1 through H-3 Form of Subsidiary Guaranty
Exhibit I Form of Agreement with CoreStates Enterprises Fund
Exhibit J Form of Akzo Agreement
Exhibit K Form of Counsel Opinion
Exhibit L Funded Commitment Facility Escrow Agreement
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SCHEDULES
Schedule 2.1 Issuance of Newly Issued Securities to Purchasers and Stipulated
Contribution Value of Existing Securities
Schedule 2.2 Cash Position of Purchase Price Paid by Purchasers
Schedule 3.4 Subscriptions, Warrants, Options, Convertible Securities and
Commitments Therefor
Schedule 3.5 Material Adverse Changes Since Most Recent Financial Statements
Schedule 3.6 Liabilities and Charges
Schedule 3.7 Events Subsequent to the Date of the Balance Sheet
Schedule 3.9 Title to Properties
Schedule 3.10 Leasehold Interests
Schedule 3.11 Taxes
Schedule 3.12 Other Agreements
Schedule 3.13 Intellectual Property
Schedule 3.14 Loans and Advances
Schedule 3.15 Assumptions or Guaranties of Indebtedness of other Persons
Schedule 3.16 Significant Customers and Suppliers
Schedule 3.18 Insurance
Schedule 3.19(b) Employee Benefit Plans
Schedule 3.20 Compensation of Key Employees
Schedule 3.25 Subsidiaries
Schedule 5.16 Debt Outstanding as of June 30, 1998
Schedule 5.26 Patents to be Acquired
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SECURITIES PURCHASE AGREEMENT (this "Agreement"), dated as of August
25, 1998, by and among Intracel Corporation, a Delaware corporation (the
"Company"), its wholly-owned subsidiaries (Xxxxxxx, Inc. ("Xxxxxxx"), PerImmune
Holdings, Inc. ("Holdings") and PerImmune, Inc. ("PerImmune" and, together with
Xxxxxxx and Holdings, the "Subsidiaries")) and each of the parties listed on
Schedule 2.1 hereto (each a "Purchaser" and, collectively, the "Purchasers").
PREAMBLE
WHEREAS, the Company wishes to issue and sell to the Purchasers (i)
the Company's 12% Guaranteed Senior Secured Primary Notes, substantially in the
form attached hereto as Exhibit A-1, in the aggregate original principal amount
of $35,000,000 (the "Guaranteed Senior Secured Primary Notes"), (ii) the
Company's 12% Guaranteed Senior Secured Escrow Notes, substantially in the form
attached hereto as Exhibit A-2, in the aggregate original principal amount of
$6,000,000 (the "Guaranteed Senior Secured Escrow Notes" and, together with the
Guaranteed Senior Secured Primary Notes, the "Notes"), (iii) the Series A-VI
Common Stock Warrants, substantially in the form attached hereto as Exhibit B-1
(the "Warrants"), to purchase up to 1,625,000 shares of common stock, $.0001 par
value per share (the "Warrant Shares"), of the Company (the Notes and the
Warrants shall collectively be referred to as the "Securities"); and
WHEREAS, the Company has agreed to amend and restate (i) certain
provisions of the warrants previously granted to certain of the Purchasers (the
"Existing Warrants") and (ii) certain provisions of that portion of a warrant
(the "CoreStates Warrant") previously granted to CoreStates Enterprise Fund, a
division of CoreStates Bank, N.A. ("CoreStates") which is to be assigned and
transferred to the Purchasers pursuant to the CoreStates Agreement, as
hereinafter defined, and will deliver amended and restated warrants in the forms
attached hereto as Exhibits B-2 through B-6 to effect such amendments (the
"Amended and Restated Warrants"); and
WHEREAS, the Company is to enter into an agreement substantially in
the form attached hereto as Exhibit C (the "Registration Rights Agreement"), to
register (i) the Warrant Shares; (ii) the shares issuable upon exercise of the
Existing Warrants (the "Existing Warrant Shares"); (iii) the shares issuable
upon exercise of the CoreStates Warrant (the "CoreStates Warrant Shares"); and
(iv) 381,296 shares of Common Stock owned by the Purchasers and their Affiliates
as of the date hereof and 522,550 shares of Common Stock issuable to the
Purchasers upon conversion of Series A-I Preferred Stock of the Company owned by
the Purchasers as of the date hereof (collectively, the "Existing Shares") (the
Warrant Shares, Existing Warrant Shares, CoreStates Warrant Shares and Existing
Shares are collectively referred to herein as the "Registrable Securities"); and
WHEREAS, each Purchaser is to purchase the Securities set forth
opposite such Purchaser's name in Sections 1 and 2 of Schedule 2.1 hereto, on
the terms and subject to the conditions set forth in this Agreement; and
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WHEREAS, the Company has issued to certain of the Purchasers,
severally, (i) a Secured Promissory Note on December 28, 1995 (the "1995 Note")
in the original principal amount of $4,700,000, (ii) $8,000,000 aggregate
original principal amount of Secured Promissory Notes issued on April 1, 1998
(the "April 1998 Notes"), and (iii) an aggregate of 47,030 shares of Series A-2
Preferred Stock (the "Series A-2 Preferred Stock"), $.0001 par value per share
(the 1995 Note, the April 1998 Notes and the Series A-2 Preferred Stock together
with the Existing Warrants are collectively referred to herein as the "Existing
Securities"), all of which are to be contributed to the Company in partial
payment of the purchase price of the Securities; and
WHEREAS, to induce the Purchasers to purchase the Securities, the
Company is to enter into the interest escrow security agreement in substantially
the form attached hereto as Exhibit D (the "Interest Escrow Security Agreement")
relating to the payment of certain interest due on the Notes; and
WHEREAS, to induce the Purchasers to purchase the Securities, the
Company and the Subsidiaries are entering into various agreements that will
create perfected security interests in favor of the Purchasers of the Notes (the
"Security Agreement," the "Intellectual Property Security Agreement," and the
"Pledge Agreement," substantially in the forms attached hereto as Exhibits E, F,
and G, respectively), and the Subsidiaries are to guaranty the Company's
obligations (each, a "Subsidiary Guaranty Agreement" substantially in the form
attached hereto as Exhibits H-1 through H-3) under this Agreement, the Notes and
the Ancillary Agreements (as defined herein) (together with the Warrants, the
Notes, the Interest Escrow Security Agreement, the Registration Rights
Agreement, the Amended and Restated Warrants, the Funded Commitment Facility
Escrow Agreement (substantially in the form attached hereto as Exhibit L), the
Agreement with CoreStates Enterprise Fund substantially in the form attached
hereto as Exhibit I (the "CoreStates Agreement"), the agreement by and among
Akzo Nobel Pharma International, B.V., Organon Teknika Corporation, PerImmune
Holdings, Inc., PerImmune Inc. and the Company, substantially in the form
attached hereto as Exhibit J (the "Akzo Agreement"), the "Ancillary
Agreements"); and
WHEREAS, the Company has agreed to utilize the proceeds from the sale
of the Notes in accordance with the provisions of Section 5.23;
NOW, THEREFORE, in consideration of the promises and the mutual
representations, warranties, covenants and agreements, and other consideration
contained and exchanged in this Agreement, and other consideration provided by
the parties hereto, the receipt and sufficiency of which is hereby acknowledged,
the parties hereto covenant and agree as follows:
ARTICLE I
DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION
Section 1.1 Definitions. For all purposes of this Agreement and the
Ancillary Agreements, except as otherwise expressly provided or unless the
context otherwise requires:
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(a) the terms defined in this Article have the meanings
assigned to them in this Article and include the plural as well as the singular.
(b) all accounting terms not otherwise defined herein have
the meanings assigned to them in accordance with GAAP; and
(c) the words "herein", "hereof" and "hereunder" and other
words of similar import refer to this Agreement as a whole and not to any
particular Article, Section or other subdivision.
"Accountant" has the meaning specified in Section 5.12(c).
"Adjusted Debt" shall mean, at any time, the consolidated Debt of the
Company and its Subsidiaries minus the amount of consolidated cash and cash
equivalents owned by the Company and its Subsidiaries that is not (i) at such
time restricted or reserved for purposes other than the repayment or defeasance
of Debt and (ii) within the ninety (90) days following such date, needed to pay
the difference between (a) operating expenses and (b) operating revenues, to the
extent that such operating expenses are not then included in the calculation of
Debt.
"Adjusted Debt to EBITDA Ratio" shall mean the Adjusted Debt of a
Person as of the end of such Person's fiscal quarter divided by the product of
(i) such Person's EBITDA for the quarterly period ending on such date times (ii)
four (4).
"Affiliate" of any specified Person means (i) any other Person
directly or indirectly controlling or controlled by or under direct or indirect
common control with such specified Person, (ii) any spouse, child or parent of
any Person described in clause (i) of this paragraph or any other relative of
any Person described in clause (i) who has the same principal residence as such
Person, and (iii) any trust for the sole benefit of any one or more Persons
described in clause (ii) of this paragraph. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Ancillary Agreements" has the meaning specified in the Preamble, as
each of the same may be amended or supplemented from time to time in accordance
with the terms thereof.
"Approved XxXxxxxx Successor" means the person elected by the Board
of Directors, to be Xx. XxXxxxxx'x successor as Chief Executive Officer of the
Company, and who shall have been approved by the Required Holders (as such term
is defined in the Notes) within 180 days of such person's election.
"Assets" shall mean with respect to any Person, all property owned by
such person whether tangible, intangible, real, personal or fixtures.
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"Asset Sale Excess Proceeds" shall mean, with respect to all sales
and other dispositions of assets during any fiscal year of the Company, the
excess of (i) the aggregate Net Cash Proceeds of all such sales or other
dispositions over (ii) $250,000.
"Balance Sheet" has the meaning specified in Section 3.5.
"Board of Directors" means either the board of directors of the
Company or any duly authorized committee of that board, empowered to act on its
behalf.
"Business Day" means each Monday, Tuesday, Wednesday, Thursday and
Friday which is not a day on which banking institutions in New York are
authorized or obligated by law or executive order to close.
"By-laws" means the by-laws of the Company, as amended to the date
hereof.
"Capital Lease Obligation" of any Person means the obligations to pay
rent or other amounts under a lease of (or other arrangement conveying the right
to use) real or personal property of such Person which are required to be
classified and accounted for as a capital lease on the face of a Balance Sheet
of such Person, and, for the purposes of this Agreement and the Ancillary
Agreements, the amount of such obligations shall be the capitalized amount
thereof, and the stated maturity thereof shall be the date of the last payment
of rent or any other amount due under such lease prior to the first date upon
which such lease may be terminated by the lessee without payment of a penalty.
"Capital Stock" of any Person means any and all shares, interests,
participations, rights or equivalents (however designated) of corporate stock of
such Person.
"Certificate of Incorporation" means the Amended and Restated
Certificate of Incorporation of the Company filed with the Secretary of State of
the State of Delaware, as amended to the date hereof.
"Closing" has the meaning specified in Section 2.1.
"Closing Date" has the meaning specified in Section 2.2.
"Common Stock" has the meaning specified in Section 3.4.
"Company" means the Person named as the "Company" in the first
paragraph of this instrument until a successor Person shall have become such
pursuant to the applicable provisions of this Agreement and the Ancillary
Agreements and thereafter "Company" shall mean such successor Person.
"Corporation" means a corporation, association, company, joint-stock
company or business trust.
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"CoreStates Debt" means all obligations under that certain Secured
Promissory Note of the Company (together with all "payment-in-kind" notes issued
pursuant thereto) dated as of June 11, 1996 issued to CoreStates Enterprise
Fund, a division of CoreStates Bank, N.A.
"CoreStates Warrants" means that portion of the Series A-III Common
Stock Warrant originally issued by the Company to CoreStates Enterprise Fund, a
division of CoreStates Bank, N.A. representing the right to purchase 238,610
shares of Common Stock.
"CoreStates Warrant Shares" has the meaning specified in the
Preamble.
"Debt" means (without duplication) with respect to any Person, (i)
every obligation of such Person for money borrowed, (ii) every obligation of
such Person evidenced by bonds, debentures, notes or other similar instruments,
(iii) every obligation of such Person issued or assumed as the deferred purchase
price of property, every conditional sale obligation and every obligation under
any title retention agreement (but excluding trade accounts payable or accrued
liabilities arising in the ordinary course of business which are not overdue by
more than 90 days or which are being contested in good faith) in each case if on
terms permitting any portion of the purchase price to be paid beyond 90 days
from the date of purchase, (iv) every Capital Lease Obligation of such Person,
(v) every obligation of such Person with respect to any Sale and Leaseback
Transaction to which such Person is a party, (vi) the maximum fixed repurchase
price of any Redeemable Stock, (vii) every obligation of such Person issued or
contracted for as payment in consideration of (A) the purchase by such Person or
an Affiliate of such Person of the Capital Stock or all or substantially all of
the Assets of another Person or (B) a merger or consolidation to which such
Person or an Affiliate of such Person was a party, (viii) every Guaranty of
every obligation of the type referred to in clauses (i) through (vii) of other
Persons and all dividends of other Persons for the payment of which, in either
case, such Person is responsible or liable, directly or indirectly, as obligor,
guarantor or, otherwise (whether or not such items would appear on the Balance
Sheet of such Person) and (ix) every obligation of the type referred to in
clauses (i) through (viii) of other Persons secured by any Lien on any Asset of
such Person (whether or not such obligation is assumed by such Person), the
amount of such obligation being deemed to be the lesser of the value of such
Assets or the amount of the obligation so secured. For purposes of this
definition, "obligation" of any Person means any obligation of such Person
(whether contingent or otherwise or whether recourse to all or a portion of such
Person's property or assets) to pay principal, interest, penalties,
reimbursement or indemnity amounts, fees or other amounts.
"Default" has the meaning specified in Section 6(a) of the Notes.
"Determination Date" has the meaning specified in paragraph (i) of
the definition of the term "Fair Market Value".
"Domestic Subsidiary" means any Subsidiary that is not a Foreign
Subsidiary.
"EBITDA" shall mean, with reference to any period, the consolidated
operating income of the Company and its Subsidiaries, plus the amount of all
depreciation and amortization
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deducted in determining the amount of such operating income, all as determined
on a consolidated basis in accordance with GAAP.
"Eligible Institution" means a commercial banking institution in the
United States of America that has combined capital and surplus of not less than
500 million in U.S. dollars whose debt is rated "A" or higher or the equivalent
rating according to Standard & Poor's Corporation ("S&P") or Xxxxx'x Investors
Services, Inc. ("Moody's") at the time as of which any investment or rollover
thereof is made.
"Employee Benefit Plan" has the meaning specified in Section 3.19(b).
"EMEA" means the European Medicines Evaluation Agency.
"ERISA" has the meaning specified in Section 3.19(b).
"Event of Default" has the meaning specified in Section 6(a) of the
Notes.
"Existing Securities" has the meaning specified in the Preamble.
"Existing Warrant Shares" has the meaning specified in the Preamble.
"Fair Market Value" means:
(i) in the case of any equity security of the
Company, as of a specific date of determination (the "Determination
Date"):
(A) if the Determination Date is the
date on which any class of equity security of the Company
is first sold to the public pursuant to a Public Offering,
then the initial public offering price (before deducting
commissions, discounts or expenses) at which such security
is sold in such Public Offering;
(B) if the Determination Date is a
date after the date on which any class of equity
securities of the Company are first sold to the public
pursuant to a Public Offering, then the price per security
thereof, equal to the average of the last sale of such
security on each of the ten (10) trading days (or such
lesser number of days as shares shall have been listed or
traded) prior to the Determination Date on the principal
exchange on which such security may at the time be listed;
or, if there shall have been no sales on such exchange on
any such trading day, the average of the closing bid and
asked price on such exchange on such trading day; or, if
there is no such bid and asked price on any such bid
trading day, on the next preceding date when such bid and
asked price occurred; or, if no such equity security shall
so be listed the average of the closing sales price as
reported by NASDAQ at the end of each of the ten (10)
trading days (or such lesser number of days as shares
shall have been traded) prior to the Determination Date in
the over-the-counter market; and
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(C) if the Determination Date is prior
to the date on which any class of equity securities is
first sold to the public pursuant to a Public Offering (or
the value of such equity securities is not otherwise
determinable under clause (B) above), an amount as
reasonably determined jointly by the Board of Directors of
the Company and the holders representing a majority in
interest of the securities of which the Fair Market Value
is to be determined; provided, however, that if such
parties are unable to reach agreement within a reasonable
time, the Fair Market Value shall be determined, at the
expense of the Company, in good faith by an investment
banking firm that is nationally recognized in the United
States selected jointly by the Board of Directors of the
Company and the holders of a majority in interest of such
securities or, if that selection cannot be made within
fifteen (15) days, by an independent investment banking
firm selected by the American Arbitration Association in
accordance with its rules; it being the intention of the
parties that the value of an equity security of the
Company shall constitute a pro rata portion of the
Company's equity on a fully diluted basis, valuing the
Company as a going concern and without discount in respect
of a minority interest;
(ii) in the case of any equity securities of a
Person other than the Company, an amount determined jointly by the
Board of Directors of the Company and the Purchasers using the rules,
to the extent applicable, set forth in paragraph (i) of this
definition, and subject to the dispute resolution provisions
contained in subsection (C) of said section (i);
(iii) in the case of any Assets, (the fair market
value of which exceeds or could reasonably be expected to exceed
$2,000,000 until the Company has consummated a Qualified Equity
Transaction, as defined in the Interest Escrow Security Agreement
and, thereafter, $5,000,000), an amount as reasonably determined in
good faith by the Company's Board of Directors, at the expense of the
Company, based upon a review of relevant factors and a written
appraisal by an appraiser that (A) had at the time of such appraisal,
and based its appraisal upon, a knowledge of the then-prevailing
methods of valuing such Assets and the then-current valuations of
assets similar to such Assets and (B) is selected by the Company and
approved by the Required Holders, such approval not to be
unreasonably withheld; and
(iv) in case of any other Assets, an amount as
reasonably determined in good faith by the Company's Board of
Directors upon a review of relevant factors.
"FDA" means the United States Food and Drug Administration.
"Foreign Subsidiary" means any Subsidiary or New Subsidiary (i) more
than 80% of the sales, earnings or Assets (determined with respect to such
Foreign Subsidiary on a consolidated basis) of which are or will be located or
derived from operations outside of the United States of America or (ii) which is
or will be a "controlled foreign corporation" within the meaning of Section 952
of the Internal Revenue Code.
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"Fully Diluted Shares" means, as of the date hereof: (i) that number
of shares of the Company's Common Stock outstanding; plus (ii) that number of
shares of Common Stock into which all other securities of the Company are
convertible, exchangeable or exercisable (including, but not limited to
convertible preferred stock, options, warrants and convertible indebtedness).
For purposes of this Agreement, the parties agree that the number of Fully
Diluted Shares is as of the date hereof 21,666,667, which number was based on
the information set forth in Schedule 3.4 provided, however, that, the parties
hereto acknowledge that this number has not been calculated in accordance with
GAAP.
"Funded Debt" shall mean, with respect to any Person, all Debt
Incurred for borrowed money of such Person which by its terms or by the terms of
any instrument or agreement relating thereto matures, or which is otherwise
payable or unpaid, more than one year from, or is directly or indirectly
renewable or extendible at the option of the debtor to a date more than one year
(including an option of the debtor under a revolving credit or similar agreement
obligating the lender or lenders to extend credit over a period of more than one
year) from, the date of the creation thereof.
"GAAP" means generally accepted accounting principles in effect in
the United States at the time of application thereof, including those set forth
in the opinions and pronouncements of the Accounting Principles Board of the
American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or in such other
statements by such other entity as have been approved by a majority of the
accounting profession, which are in effect from time to time.
"Guaranty" by any Person means any obligation, contingent or
otherwise, of such Person guaranteeing any Debt of any other Person (the
"primary obligor") in any manner, whether directly or indirectly, and including,
without limitation, any obligation of such Person, (i) to purchase or pay (or
advance or supply funds for the purchase or payment of) such Debt or to purchase
(or to advance or supply funds for the purchase of) any security for the payment
of such Debt, (ii) to purchase property, securities or services for the purpose
of assuring the holder of such Debt of the payment of such Debt, or (iii) to
maintain working capital, equity capital or other financial statement condition
or liquidity of the primary obligor so as to enable the primary obligor to pay
such Debt; provided, however, that the Guaranty by any Person shall not include
endorsements by such Person for collection or deposit, in either case in the
ordinary course of business.
"Guaranty Obligation" has the meaning specified in Section 11 of the
Notes.
"Holder" means a Purchaser of the Note or any Person to whom the Note
is sold, assigned, conveyed or otherwise transferred.
"Incur" means, with respect to any Debt, Lien or Guaranty of any
Person, to create, issue, assume, guarantee, incur or otherwise become liable in
respect of such Debt, Lien or Guaranty, as the case may be (and "Incurrence",
"Incurred" and "Incurring" shall have meanings correlative to the foregoing),
and "Incur" means, with respect to any Lien to create, incur, assume or suffer
to exist such Lien on any Asset.
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"Intellectual Property" has the meaning specified in Section 3.13.
"Interest Escrow Security Agreement" has the meaning specified in the
Preamble, as it may be amended or supplemented from time to time in accordance
with the terms thereof.
"Interest Expense" shall mean, with respect to any Person, for any
period, the sum, for such Person in accordance with GAAP, of (i) all interest
that is paid, accrued or amortized as an expense during such period (including,
without limitation, imputed interest under Capitalized Lease Obligations), plus
without duplication (ii) all amounts paid, accrued or amortized as an expense
during such period in respect of interest rate protection agreements, minus
(iii) all amounts received or accrued as income during such period in respect of
interest rate protection agreements.
"Investments" means all investments in other Persons in the form of
loans or capital contributions, purchases or other acquisitions for
consideration or evidences of indebtedness, or Capital Stock or other securities
and all other items which are or would be classified as investments on a Balance
Sheet prepared in accordance with GAAP.
"Laws" shall mean, with respect to any Person, all federal, state,
local and foreign laws, ordinances, rules, regulations (including, without
limitation, rules and regulations of the FDA and the EMEA), codes, orders or
zoning requirements and all judicial decisions and other interpretations thereof
applicable to such Person.
"Lien" means with respect to any Assets, any mortgage or deed of
trust, pledge, hypothecation, assignment, deposit arrangement, security
interest, lien, charge, easement (other than any easement not materially
impairing usefulness or marketability), encumbrance, preference, priority or
other security agreement or preferential arrangement of any kind or nature
whatsoever on or with respect to Assets (including, without limitation, any
conditional sale or other title retention agreement having substantially the
same economic effect as any of the foregoing).
"XxXxxxxx Policy" has the meaning specified in Section 5.10.
"Net Cash Proceeds" shall mean the cash proceeds of any sale or other
disposition of Assets (including cash proceeds subsequently received (as and
when received) in respect of non-cash consideration initially received, all
insurance settlements and condemnation awards and all reserves referred to in
clause (ii) below, as and when such reserves are no longer required), minus (i)
transaction expenses (including broker's fees or commissions, legal fees,
accounting fees, investment banking fees and other professional fees, transfer
and similar taxes and the Company's good faith estimate of income taxes payable
and the actual amount of taxes paid in connection with the receipt of such cash
proceeds), (ii) amounts provided as a reserve, in accordance with GAAP,
including pursuant to any escrow arrangement, against any liabilities under any
indemnification obligations associated with such sale or disposition, (iii) the
principal amount, premium or penalty, if any, interest and other amounts on any
Debt which is secured by the Assets sold and is defeased or repaid with such
proceeds and (iv) subject to any provisions of any Security Documents between a
Subsidiary and Purchasers, such distributions required to be
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made to holders of interests in Subsidiaries that are not wholly owned by the
Company or any of its Subsidiaries, in each case made pro rata in accordance
with their interests in such Subsidiaries, provided, however, that with respect
to the cash proceeds of any such sale or other disposition, if the Company shall
have delivered an Officer's Certificate to Purchasers, at the time of the
receipt thereof certifying in good faith that the Company has established a cash
reserve for the reinvestment of such proceeds in productive Assets of a kind
then used or useable in the business of the Company within nine months of
receipt of such proceeds, such proceeds shall not constitute Net Cash Proceeds
except to the extent not so used prior to the end of such nine-month period, at
which time such proceeds shall be deemed to be Asset Sale Excess Proceeds.
"New Subsidiary" has the meaning specified in Section 5.14.
"Notes" has the meaning specified in the Preamble.
"Officer's Certificate" shall mean a certificate signed in the name
of the Company by a Responsible Officer of the Company, provided, however, that
if such certificate relates to any Financial Statements, the financial condition
or other financial information of the Company, such Responsible Officer shall be
a senior executive officer responsible for managing the financial affairs of the
Company or, in such officer's absence, the Chief Executive Officer, President or
Chairman of the Company.
"Outstanding", when used with respect to Notes, means, as of any date
of determination, all Notes theretofore issued and delivered under this
Agreement and the Ancillary Agreements, except:
(i) Notes theretofore cancelled by the Company
or delivered to the Company for cancellation;
(ii) Notes for which payment in full has been
made by the Company pursuant to the terms of the Notes; and
(iii) Notes which have been exchanged for other
securities;
provided, however, that in determining whether the Purchasers of the requisite
principal amount of the Outstanding Notes have given any request, demand,
authorization, direction, notice, consent or waiver hereunder, Notes owned by
the Company or any other obligor under the Notes or any Affiliate of the Company
(other than any Purchaser) or of such other obligor shall be disregarded and
deemed not to be Outstanding.
"PBGC" has the meaning specified in Section 3.19(b).
"Permitted Investments" shall mean:
(i) direct obligations of, or obligations the
principal of and interest on which are unconditionally guaranteed by,
the United States of America (or by any agency
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thereof to the extent such obligations are backed by the full faith
and credit of the United States of America), in each case maturing
within 180 days from the date of acquisition thereof.
(ii) investments in commercial paper maturing
within 90 days from the date of acquisition thereof and having, at
such date of acquisition, the highest rating obtainable from S&P or
from Xxxxx'x.
(iii) investments in certificates of deposit,
banker's acceptances and time deposits maturing within 90 days from
the date of acquisition thereof issued or guaranteed by or placed
with, and money market deposit accounts issued or offered by any
Eligible Institution.
(iv) shares of funds registered under the
Investment Company Act of 1940, as amended, that have Assets of at
least $100,000,000 and invest substantially all their Assets in
obligations described in clauses (i) through (iii) above;
provided that any investment which, when made, constituted a Permitted
Investment may continue to be held (but not reinvested) notwithstanding that
such investment may thereafter cease to constitute a Permitted Investment.
"Person" means any individual, corporation, partnership, joint
venture, trust, unincorporated organization or government or any agency or
political subdivision thereof.
"Preferred Stock" has the meaning specified in Section 3.4.
"Public Offering" means the consummation by the Company of the first
offering of its equity securities to the public pursuant to a registration
statement declared effective by the Securities and Exchange Commission under the
Securities Act of 1933, as amended (the "Securities Act").
"Purchaser" means the Person listed as "Purchaser" on Schedule 2.1
hereto.
"Receivables Facility" means a revolving line of credit that is
secured by trade receivables of the Company and amounts outstanding under which
shall not exceed 80% of the face amount of trade receivables of the Company that
are not more than 60 days past due.
"Redeemable Stock" means any equity security that by its terms or
otherwise is or may be required to be redeemed prior to the Stated Maturity of
the Notes, or is redeemable at the option of the Purchaser thereof at any time
prior to the Stated Maturity of the Notes.
"Registrable Securities" has the meaning specified in the Preamble.
"Reportable Event" has the meaning specified in Section 5.12(d)(iii).
"Responsible Officer" shall mean the duly elected Secretary, Chief
Financial Officer, Chief Operating Officer, Chief Executive Officer, President
or Chairman of the Company.
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"Restricted Payment" has the meaning specified in Section 5.7.
"Required Holders" means that number of Holders of Notes constituting
not less than 70% of the total amount due under the Outstanding Notes.
"Sale and Leaseback Transaction" means an arrangement by a Person
with any other Person, providing for the leasing from such other Person, on
terms creating a Capital Lease obligation by such Person or any Subsidiary of
such Person of any Asset of such Person or any Subsidiary of such Person which
has been or is being sold or transferred by such Person or such Subsidiary to
such other Person from whom funds have been or are to be advanced by such lender
or investor on the security of such Asset.
"Securities" has the meaning specified in the Preamble.
"Security Documents" means the Security Agreement, the Intellectual
Property Security Agreement, the Pledge Agreement, the Interest Escrow Security
Agreement, the Funded Commitment Facility Escrow Agreement and the Subsidiary
Guaranty.
"Series A Preferred" has the meaning specified in Section 3.4.
"Series A-1 Preferred" has the meaning specified in Section 3.4.
"Series A-2 Preferred" has the meaning specified in Section 3.4.
"Series A-3 Preferred" has the meaning specified in Section 3.4.
"Series B-1 Preferred" has the meaning specified in Section 3.4.
"Series B-2 Preferred" has the meaning specified in Section 3.4.
"Stated Maturity", when used with respect to any Note or any
installment of interest thereon, means August 25, 2003.
"Statement No. 5" has the meaning specified in Section 3.6(b).
"Subsidiary" means a corporation more than 50% of the outstanding
voting stock of which is owned, directly or indirectly, by the Company or by one
or more other Subsidiaries of the Company, or by the Company and one or more
other Subsidiaries of the Company. For the purposes of this definition, "voting
stock" means stock which ordinarily has voting power for the election of
directors, whether at all times or only so long as no senior class of stock has
such voting power by reason of any contingency. Unless otherwise specified, the
term "Subsidiary" also includes Foreign Subsidiary and New Subsidiary.
"Warrants" has the meaning specified in the Preamble.
"Warrant Shares" has the meaning specified in the Preamble.
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Section 1.2 Accounting Terms and Determinations. Unless otherwise
specified herein, all accounting terms used herein shall be interpreted, all
determinations with respect to accounting matters hereunder shall be made, any
computation required or permitted hereunder shall be made, and all unaudited
financial statements and certificates and reports as to financial matters
required to be furnished hereunder shall be prepared, in accordance with GAAP,
applied on a basis consistent with the Audited Financial Statements of the
Company delivered pursuant to Section 6.16.
ARTICLE II
THE SECURITIES
Section 2.1 Issuance, Sale and Delivery of the Securities. The
Company hereby agrees to issue, sell and deliver to each Purchaser, and each
Purchaser hereby agrees to purchase from the Company, at the closing (the
"Closing"), a Guaranteed Senior Secured Primary Note and a Guaranteed Senior
Secured Escrow Note, in each case, in the original principal amount set forth
opposite its name in Section 1 on Schedule 2.1 hereto and a Warrant to purchase
such number of Warrant Shares as set forth opposite its name in Section 2 on
Schedule 2.1 hereto. The Guaranteed Senior Secured Primary Note, the Guaranteed
Senior Secured Escrow Note and the Warrants are referred to collectively
hereinafter as the "Newly Issued Securities." In addition, the Company hereby
agrees to deliver, at the Closing, the Amended and Restated Series A-II, Series
A-III and Series A-V Warrants to the Purchasers as set forth in Section 3 on
Schedule 2.1 hereto.
Section 2.2 Closing; Purchase Price; Purchase Price Allocation.
(a) The Closing shall take place at the offices of Xxxxxxxx
& Xxxxxxxx LLP, 0000 Xxxxxx xx xxx Xxxxxxxx, Xxx Xxxx, XX 00000, at 10:00 a.m.,
New York time, on the date hereof, or at such other place, date and time as may
be otherwise mutually agreed in writing by the parties hereto. The date on which
the Closing actually occurs is referred to herein as the "Closing Date."
(b) At the Closing, the Company shall issue and deliver to
each Purchaser a Guaranteed Senior Secured Primary Note and a Guaranteed Senior
Secured Escrow Note, in each case, in the original principal amount set forth
opposite its name in Section 1 on Schedule 2.1 hereto and a Warrant to purchase
such number of Warrant Shares as set forth opposite its name in Section 2 on
Schedule 2.1 hereto.
(c) At the Closing, and upon receipt of the Newly Issued
Securities, the Purchasers shall deliver to the Company, marked as cancelled,
the Existing Securities set forth opposite its name in Section 4 on Schedule 2.1
hereto as follows:
(i) the senior secured promissory note in the
original principal amount of $4,700,000 issued by the Company to
Northstar High Total Return Fund ("Northstar
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Return") on December 27, 1995 (the "Northstar Return Note"), due and
payable on December 31, 2000;
(ii) the senior secured promissory note in the
original principal amount of $4,000,000 issued by the Company to
Northstar High Total Return Fund II ("Northstar Return II"), on April
1, 1998 (the "Northstar Return II Note"), due and payable on April
17, 1998, as amended on June 10, 1998 to extend the maturity date to
July 10, 1998 and increase the principal amount to $5,000,000, as
further amended on July 10, 1998 to extend the maturity date to July
31, 1998 and increase the principal amount to $6,000,000, and as
further amended on July 31, 1998 to extend the maturity date to
August 24, 1998;
(iii) the senior secured promissory note in the
original principal amount of $4,000,000 issued by the Company to
Northstar High Yield Fund ("Northstar High Yield"), on April 1, 1998
(the "Northstar High Yield Note"), due and payable on April 17, 1998,
as amended on June 10, 1998 to extend the maturity date to July 10,
1998, as further amended on July 10, 1998 to extend the maturity date
to July 31, 1998, and as further amended on July 31, 1998 to extend
the maturity date to August 24, 1998;
(iv) The Series A-V Warrant to purchase 49,066
shares of the Company Common Stock, for an exercise price per share
of $7.64, issued to Northstar Return II on April 1, 1998 (the
"Northstar Return II Warrant");
(v) The Series A-V Warrant to purchase 49,066
shares of the Company Common Stock for an exercise price per share of
$7.64, issued to Northstar High Yield on April 1, 1998 (the "North
Star High Yield warrant");
(vi) The Series A-II Warrant to purchase
initially, 94,010 shares of the Company Common Stock for an exercise
price per share of $14.00 (subject to a two for one split of the
Company Common Stock on December 31, 1997), issued to Northstar
Return on December 27, 1995 (the "Northstar Return Warrant"); and
(vii) The Series A-2 Preferred Stock certificate
evidencing the right to purchase 40,000 shares initially (subject to
the issuance of additional dividend shares) of Series A-2 Preferred
Stock issued by the Company to Northstar Return in March 1997.
(d) At the Closing, the Company shall deliver to the
Purchasers a calculation setting forth in reasonable detail, the stipulated
contribution value of the Northstar Return Note, the Northstar Return II Note,
the Northstar High Yield Note and the Series A-2 Preferred Stock, as set forth
in Section 2.2(c), the aggregate amount of which shall constitute the Company's
allocation of that portion of the Purchase Price payable by the exchange of the
Existing Securities for the Newly Issued Securities. Set forth in Schedule 2.2
is the Company's calculation of the cash portion of the purchase price paid by
such Purchaser.
(e) At the Closing, as payment in full for the Newly Issued
Securities and against delivery of such Newly Issued Securities, each Purchaser
shall deliver, on the Closing
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Date, the Existing Securities as listed opposite its name in Section 4 on
Schedule 2.1 hereto, for cancellation by the Company, and shall transfer the sum
of $18,839,432 by wire transfer of immediately available funds to such account
or accounts as the Company may direct in accordance with its letter of
instruction. The Company and each Purchaser agree that $4,553,050 of the
aggregate consideration for the Guaranteed Senior Secured Primary Notes and the
Warrants shall for all purposes be allocated to the Warrants, and that the
balance of such aggregate consideration shall be allocated to the Guaranteed
Senior Secured Primary Notes.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
OF THE COMPANY AND THE SUBSIDIARIES
The Company represents and warrants, and each Subsidiary represents
and warrants as to itself, to the Purchasers as of the Closing Date that:
Section 3.1 Organization, Qualifications and Corporate Power. The
Company and each Subsidiary is a corporation duly organized, validly existing,
and in good standing under the Laws of the jurisdiction of its respective
incorporation, and the Company and each Subsidiary is duly licensed or qualified
to transact business as a foreign corporation and is in good standing in each
jurisdiction in which the nature of the business transacted by it or the
character of the properties owned or leased by it requires such licensing or
qualification, except where the failure so to qualify will not have a material
adverse effect on the business, operations, property or financial condition of
the Company or such Subsidiary, as applicable. The Company and each Subsidiary
has the power and authority to own and hold its properties and to carry on its
business as now conducted and as proposed to be conducted, and the Company and
each Subsidiary has the power and authority to execute, deliver and perform this
Agreement and the Ancillary Agreements to which it is a party, and the Company
has the power and authority to issue, sell and deliver the Notes, the Warrants
and the Amended and Restated Series A-II Warrants, Series A-III Warrants and
Series A-V Warrants and to issue and deliver the Warrant Shares upon the
exercise of the Warrants and the Amended and Restated Series A-II Warrants,
Series A-III Warrants and Series A-V Warrants.
Section 3.2 Authorization of Agreements, etc.
(a) The execution and delivery by the Company and each
Subsidiary of this Agreement and the Ancillary Agreements to which it is a party
and the performance by the Company and each Subsidiary of its respective
obligations hereunder and thereunder, and with respect to the Company, the
issuance, sale and delivery of the Notes and the Warrants, and the Amended and
Restated Series A-II Warrants, Series A-III Warrants and Series A-V Warrants and
the issuance, sale and delivery of the Warrant Shares upon the exercise of the
Warrants, and the Amended and Restated Series A-II Warrants, Series A-III
Warrants and Series A-V Warrants have been duly authorized by all requisite
corporate action and will not violate any provision of Law, any order of any
court or other agency of government (except that the issuance of the Warrant
Shares may require filings under one or more state securities laws, all of which
filings
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the Company hereby agrees will be made within the requisite time period), the
Amended and Restated Certificate of Incorporation of the Company (as amended to
date, the "Certificate of Incorporation") or the Certificate of Incorporation of
the respective Subsidiary or the by-laws of the Company, as amended (the
"By-laws") or the by-laws of the respective Subsidiary, or any provision of any
indenture, agreement or other instrument to which the Company or such Subsidiary
is a party or by which either the Company or such Subsidiary or any of its
respective Assets is bound, or conflict with, result in a breach of, give rise
to a right of termination under or constitute (whether with or without notice or
lapse of time or both) a default under any such indenture, agreement or other
instrument, or result in the creation or imposition of any lien, charge,
restriction, claim or encumbrance of any nature whatsoever upon any of the
Assets of the Company or such Subsidiary.
(b) The Warrants have been authorized and, when issued in
accordance with this Agreement, will be validly issued, fully paid and
nonassessable with no personal liability attaching to the ownership thereof and
will be free and clear of all liens, charges, restrictions, claims and
encumbrances imposed under or through the Company or any of its Subsidiaries
except as set forth in this Agreement. The Warrant Shares have been duly
authorized and reserved for issuance upon exercise of the Warrants, and, when so
issued, will be duly authorized, validly issued, fully paid and nonassessable
with no personal liability attaching to the ownership thereof and will be free
and clear of all liens, charges, restrictions, claims and encumbrances imposed
under or through the Company or any of its Subsidiaries except as set forth in
this Agreement. Neither the issuance, sale or delivery of the Warrants, nor the
issuance or delivery of the Warrant Shares is subject to any preemptive right of
stockholders of the Company or to any right of first refusal or other right in
favor of any person.
Section 3.3 Validity. This Agreement and each of the Ancillary
Agreements have been duly executed and delivered by the Company and the
Subsidiaries party thereto, as the case may be, and each of the Notes, the
Warrants and the Amended and Restated Series A-II Warrants, Series A-III
Warrants and Series A-V Warrants has been duly executed and delivered by the
Company, and each of the foregoing constitutes the legal, valid and binding
obligation of the Company or the respective Subsidiary, as applicable,
enforceable in accordance with its terms, subject to (a) applicable bankruptcy,
insolvency, reorganization, fraudulent conveyance and moratorium Laws and other
similar Laws of general application affecting enforcement of creditors' rights
generally and (b) the availability of equitable remedies including specific
performance may be limited by equitable principles of general applicability
(regardless of whether enforcement is sought in a proceeding in equity or at
Law).
Section 3.4 Authorized Capital Stock. The authorized Capital Stock of
the Company consists of 25,000,000 shares of common stock, $.0001 par value
("Common Stock"), and 5,000,000 shares of preferred stock ("Preferred Stock").
As of March 30, 1998, 10,917,256 shares of Common Stock were issued and
outstanding, all of which were validly issued and outstanding, fully paid and
nonassessable with no personal liability attaching to the ownership thereof. The
Company has authorized 730,000 shares of Series A Convertible Preferred Stock,
$.0001 par value per share (the "Series A Preferred"). As of March 30, 1998, a
total of 615,697 shares of Series A Preferred were issued and outstanding. The
Company has authorized 850,000
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shares of Series A-1 Convertible Preferred Stock, $.0001 par value per share
(the "Series A-1 Preferred"). As of March 30, 1998, a total of 664,196 shares of
Series A-1 Preferred were issued and outstanding. The Company has authorized
155,000 shares of Series A-2 Preferred Stock, $.0001 par value per share (the
"Series A-2 Preferred"). As of March 30, 1998, a total of 45,482 shares of
Series A-2 were issued and outstanding. The Company has authorized 200,000
shares of Series A-3 Convertible Preferred Stock, $.0001 par value per share
(the "Series A-3 Preferred"). As of March 30, 1998, 150,881 shares of Series A-3
Preferred were issued and outstanding. The Company has authorized 100 shares of
Series B-1 Convertible Preferred Stock, $.0001 par value per share (the "Series
B-1 Preferred"). As of March 30, 1998, 100 shares of Series B-1 Preferred were
outstanding. The Company has authorized 120 shares of Series B-2 Convertible
Preferred Stock, $.0001 par value per share (the "Series B-2 Preferred"). As of
March 30, 1998, 120 shares of Series B-2 Preferred were outstanding. The
Warrants will be exercisable immediately upon issuance into an aggregate of
1,625,000 shares of Common Stock, representing 7.5% of the number of Fully
Diluted Shares. As of the date hereof and except as otherwise provided in this
Agreement or the Ancillary Agreements, the outstanding shares of Capital Stock
of the Company are not subject to, nor were they issued in violation of, any
preemptive rights of shareholders or any right of first refusal or other similar
right in favor of any shareholder. As of the date hereof and except as otherwise
provided in this Agreement or the Ancillary Agreements or Schedule 3.4 attached
hereto (i) there has been no material change (defined as more than a five
percent (5%) increase or decrease) in the number of shares of outstanding Common
Stock or outstanding Preferred Stock of the Company since Xxxxx 00, 0000, (xx)
no subscription, warrant, option, convertible security or other right
(contingent or otherwise) to purchase capital stock of the Company is authorized
or outstanding, (iii) there is no commitment to issue any shares, warrants,
options or other such rights or to distribute to holders of any capital stock of
the Company, in respect thereof, any evidences of indebtedness or Assets, and
(iv) the Company has no obligation (contingent or otherwise) to purchase, redeem
or otherwise acquire any capital stock or pay any dividend or make any other
distribution in respect thereof.
Section 3.5 Financial Statements. The Company has furnished to the
Purchasers the audited balance sheet of each of the Company and Holdings for the
fiscal year ended December 31, 1997 and the related audited statements of
income, stockholders' equity and cash flows of each of the Company and Holdings
for the fiscal year ended December 31, 1997 (the "Audited Financial
Statements"). The Company has furnished to the Purchasers the unaudited balance
sheet of the Company for the quarter ended March 31, 1998 (the "Balance Sheet")
and the related unaudited statements of income, stockholders' equity and cash
flows of the Company for the quarter ended March 31, 1998 certified by a
Responsible Officer of the Company (the "Most Recent Financial Statements"). All
such financial statements have been prepared in accordance with GAAP and fairly
present the financial position of the Company and Holdings as of December 31,
1997 and of the Company as of March 31, 1998, respectively, and the results of
the Company's and Holdings' operations and cash flows as of December 31, 1997
and of the Company's operations and cash flows as of March 31, 1998,
respectively. Except as set forth in Schedule 3.5 hereto, since the date of the
Most Recent Financial Statements, (a) there has been no change in the Assets,
liabilities or financial condition of the Company from that reflected in the
Balance Sheet except for changes in the ordinary course of business which in the
aggregate
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have not been materially adverse and (b) none of the business, financial
condition, operations or Assets of the Company have been materially adversely
affected by any occurrence or development, individually or in the aggregate,
whether or not insured against.
Section 3.6 Absence of Undisclosed Liabilities and Charges. Except as
set forth on Schedule 3.6 attached hereto, as of the date hereof, (a) neither
the Company nor any Subsidiary had any liabilities of any nature (matured or
unmatured, fixed or contingent) which were not provided for on the Balance
Sheet, except for (i) liabilities which, individually and in the aggregate, were
not material to the financial condition of the Company or such Subsidiary or
(ii) liabilities incurred in the ordinary course of the Company's or such
Subsidiary business and not required to be so provided for under generally
accepted accounting principles, and (b) all reserves established by the Company
and set forth on the Balance Sheet were adequate in all material respects. There
are no loss contingencies (as such term is used in Statement of Financial
Accounting Standards No. 5 ("Statement No. 5") issued by the Financial
Accounting Standards Board in March 1975) which are not adequately provided for
on the Balance Sheet as required by Statement No. 5.
Section 3.7 Events Subsequent to the Date of the Balance Sheet.
Except as set forth in the attached Schedule 3.7 or as contemplated by this
Agreement, since the date of the Balance Sheet, neither the Company nor any
Subsidiary has (a) issued any stock, bond or other corporate security, (b)
borrowed any amount or incurred or became subject to any liability (absolute,
accrued or contingent), except current liabilities incurred and liabilities
under contracts entered into in the ordinary course of business, (c) discharged
or satisfied any Lien or encumbrance or incurred or paid any obligation or
liability (absolute, accrued or contingent) other than current liabilities shown
on the Balance Sheet and current liabilities incurred since the date of the
Balance Sheet in the ordinary course of business, (d) declared or made any
payment or distribution to stockholders or purchased or redeemed any share of
its Capital Stock or other security, (e) mortgaged, pledged or subjected to Lien
any of its Assets, other than liens of current real property taxes not yet due
and payable, (f) sold, assigned or transferred any of its tangible Assets except
in the ordinary course of business, or canceled any Debt or claim, (g) sold,
assigned, transferred or granted any exclusive license with respect to any
material patent, trademark, trade name, service xxxx, copyright, trade secret or
other intangible Asset other than in the ordinary course of business, (h)
suffered any material loss of property or waived any right of substantial value,
(i) made any change in officer compensation except in the ordinary course of
business and consistent with past practice, (j) made any material change in the
manner of business or operations of the Company or any Subsidiary, (k) entered
into any transaction except in the ordinary course of business or as otherwise
contemplated hereby or (l) entered into any commitment (contingent or otherwise)
to do any of the foregoing.
Section 3.8 Litigation; Compliance with Law. There is no material (a)
action, suit, claim, proceeding or investigation pending or, to the knowledge of
the Company or the respective Subsidiary, threatened against or affecting the
Company or the respective Subsidiary, at Law or in equity, or before or by any
Federal, state, municipal or other governmental department, commission, board,
bureau, agency or instrumentality, domestic or foreign, (b) arbitration
proceeding relating to the Company or the respective Subsidiary, pending under a
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collective bargaining agreement or otherwise or (c) governmental inquiry pending
or to the knowledge of the Company or the respective Subsidiary, threatened
against or affecting the Company or the respective Subsidiary, (including,
without limitation, any inquiry as to the qualification of the Company or the
respective Subsidiary, to hold or receive any license or permit). Neither the
Company nor the respective Subsidiary has received any opinion or memorandum or
legal advice from legal counsel to the effect that it is exposed, from a legal
standpoint, to any liability or disadvantage which may be material to its
business, financial condition, operations or Assets. Neither the Company nor the
respective Subsidiary is in default with respect to any order, writ, injunction
or decree known to or served upon the Company or the respective Subsidiary of
any court or of any Federal, state, municipal or other governmental department,
commission, board, bureau, agency or instrumentality, domestic or foreign. There
is no material action or suit by the Company or the respective Subsidiary
pending or threatened against others. The Company and each Subsidiary has
complied in all material respects with all Laws, applicable to its respective
business, operations, Assets, products and services, and the Company or the
respective Subsidiary has all necessary permits, licenses and other
authorizations required to conduct its business as conducted and as proposed to
be conducted, except where the failure to own or possess such permits, licenses
or authorizations could not, either singly or in the aggregate, have a material
adverse effect on the business, operations, Assets or financial condition of the
Company or the respective Subsidiary.
Section 3.9 Title to Properties. Except as disclosed in Schedule 3.9
hereof, the Company has good and marketable title to its Assets reflected on the
Balance Sheet (other than Assets disposed of in the ordinary course of business
since the date of the Balance Sheet), and all such Assets are free and clear of
mortgages, pledges, security interests, Liens, charges, claims, restrictions and
other encumbrances, except for Liens for current taxes not yet due and payable
and minor imperfections of title, if any, not material in nature or amount and
not materially detracting from the value or materially impairing the use of the
Asset subject thereto or impairing the operations or proposed operations of the
Company.
Section 3.10 Leasehold Interests. Each lease or agreement to which
the Company or any Subsidiary is a party under which it is a lessee of any
Asset, real or personal (a list of all such leases being attached hereto as
Schedule 3.10), is a valid and subsisting agreement without any material Default
of the Company or the respective Subsidiary thereunder and, to the knowledge of
the Company or the respective Subsidiary, without any material default
thereunder of any other party thereto. No event has occurred and is continuing
which, with due notice or lapse of time or both, would constitute a Default or
Event of Default by the Company or the respective Subsidiary, under any such
lease or agreement or, to the knowledge of the Company or the respective
Subsidiary, by any other party thereto.
Section 3.11 Taxes. Except as set forth on Schedule 3.11, the Company
and each Subsidiary has filed or will file within the time prescribed by law
(including extensions of time approved by the appropriate taxing authority) all
tax returns, federal, state, county and local, required to be filed by it, and
the Company or the respective Subsidiary has paid all taxes shown to be due by
such returns and extensions as well as all other taxes, assessments and
governmental charges which have become due or payable, including, without
limitation, all taxes which the
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Company or the respective Subsidiary is obligated to withhold from amounts owing
to employees, creditors and third parties. All such taxes with respect to which
the Company or the respective Subsidiary has become obligated have been paid and
adequate reserves have been established for all taxes accrued but not yet
payable. No deficiency assessment with respect to or proposed adjustment of the
Company's or the respective Subsidiary's federal, state, county or local taxes
is pending or, to the knowledge of the Company or the respective Subsidiary,
threatened. There is no tax Lien in favor of any federal, state, county or local
taxing authority, outstanding against the Assets, or business of the Company or
the respective Subsidiary.
Section 3.12 Other Agreements. Except as set forth in the attached
Schedule 3.12, neither the Company nor any Subsidiary is a party to or otherwise
bound by any written or oral contract or instrument or other restriction which
individually or in the aggregate could materially adversely affect the business,
financial condition, operations or Assets of the Company or the respective
Subsidiary. Except as set forth in the attached Schedule 3.12, or as a result of
the transactions contemplated in this Agreement, or the Ancillary Agreements,
neither the Company nor any Subsidiary is a party to or otherwise bound by any
written or oral:
(a) distributor, dealer, manufacturer's representative or
sales agency contract or agreement which is not terminable on less than ninety
(90) days' notice without cost or other liability to the Company or the
respective Subsidiary;
(b) sales contract which entitles any customer to a rebate
or right of set-off, to return any product to the Company or the respective
Subsidiary after acceptance thereof or to delay the acceptance thereof, or which
varies in any material respect from the Company's or the respective Subsidiary's
standard form contracts;
(c) contract with any labor union (and, to the knowledge of
the Company or the respective Subsidiary, no organizational effort is being made
with respect to any of its employees);
(d) contract or other commitment with any supplier
containing any provision permitting any party other than the Company or the
respective Subsidiary to renegotiate the price or other terms, or containing any
pay-back or other similar provision, upon the occurrence of a failure by the
Company or the respective Subsidiary to meet its obligations under the contract
when due or the occurrence of any other event;
(e) contract for the future purchase of fixed assets or for
the future purchase of materials, supplies or equipment in excess of its normal
operating requirements;
(f) contract for the employment of any officer, employee or
other person (whether of a legally binding nature or in the nature of informal
understandings), on a full-time or consulting basis which is not terminable on
notice without cost or other liability to the Company or the respective
Subsidiary except normal severance arrangements and accrued vacation pay;
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(g) agreement or indenture relating to the borrowing of
money or to the mortgaging or pledging of, or otherwise placing a lien or
security interest on, any Asset of the Company or the respective Subsidiary;
(h) guaranty of any Obligation for borrowed money or
otherwise;
(i) agreement, or group of related agreements with the same
party or any group of affiliated parties, under which the Company or the
respective Subsidiary has advanced or agreed to advance money or has agreed to
lease any Asset as lessee or lessor;
(j) agreement or Obligation (contingent or otherwise) to
issue, sell or otherwise distribute or to repurchase or otherwise acquire or
retire any share of its Capital Stock or any of its other equity securities;
(k) assignment, license or other agreement with respect to
any form of intangible Assets or Intellectual Property (as defined in Section
3.13) or the development or use thereof;
(l) agreement under which it has granted any person any
registration rights;
(m) agreement under which it has limited or restricted its
right to compete with any person in any respect; or
(n) other contract or group of related contracts with the
same party involving more than $500,000 or continuing over a period of more than
one (1) year from the date or dates thereof (including renewals or extensions
optional with another party), which contract or group of contracts is not
terminable by the Company or the respective Subsidiary without penalty upon
notice of thirty (30) days or less, but excluding any contract or group of
contracts with a customer of the Company or the respective Subsidiary for the
sale, lease or rental of the Company's or the respective Subsidiary's products
or services if such contract or group of contracts was entered into by the
Company or the respective Subsidiary in the ordinary course of business.
Each of the contracts listed on Schedule 3.12 hereof is valid and enforceable.
The Company or its respective Subsidiaries are not in Default nor has an Event
of Default, or event that with the lapse of time or the giving of notice, or
both, would constitute an Event of Default occurred or would result therefore
(and, to the knowledge of the Company or the respective Subsidiaries, no other
party thereto is in Default) under the material terms and conditions of any
contract listed on Schedule 3.12 including, but not limited to (i) the
Promissory Note dated August 2, 1996 by PerImmune to Organon Teknika Corporation
("Organon"), (ii) the Intellectual Property Security Agreement dated as of
August 8, 1996, by and among Holdings, PerImmune, Akzo Nobel Pharmaceutical
International, B.V. ("Akzo") and Organon, and (iii) the Intellectual Property
Agreement dated August 2, 1996, by and among Holdings and Akzo, all as amended
by Amendment No. 1 dated July 31, 1998 by Organon, Holdings and PerImmune.
Section 3.13 Patents, Trademarks, etc. Set forth in Schedule 3.13 is
a list and brief description of all patents, patent rights, patent applications,
trademarks, trademark applications,
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service marks, service xxxx applications, trade names and
copyrights, and all applications for such which are in the process of being
prepared, owned by or registered in the name of the Company or any Subsidiary,
or of which the Company or any Subsidiary is a licensor or licensee or in which
the Company or any Subsidiary has any right, and in each case a brief
description of the nature of such right. Except as set forth in Schedule 3.13,
the Company or the respective Subsidiary owns or possesses adequate licenses or
other rights to use all patents, patent applications, trademarks, trademark
applications, service marks, service xxxx applications, trade names, copyrights,
manufacturing processes, formulas, trade secrets and know-how (collectively,
"Intellectual Property") necessary to the conduct of its respective business as
conducted, and no claim is pending or, to the best knowledge of the Company or
the respective Subsidiary, threatened to the effect that the operations of the
Company or the respective Subsidiary infringe upon or conflict with the rights
of any other Person with respect to any Intellectual Property, and to the best
knowledge of the Company or the respective Subsidiary there is no basis for any
such claim. No claim is pending or, to the best knowledge of the Company or the
respective Subsidiary, threatened to the effect that any such Intellectual
Property owned or licensed by the Company or the respective Subsidiary, or which
the Company or the respective Subsidiary otherwise has the right to use, is
invalid or unenforceable by the Company or the respective Subsidiary in any
jurisdiction where it currently does or intends to exploit such Intellectual
Property and to the best knowledge of the Company there is no basis for any such
claim. To the best knowledge of the Company or the respective Subsidiary, all
technical information developed by and belonging to the Company or the
respective Subsidiary which has not been patented has been kept confidential.
Except as set forth in Schedule 3.13, neither the Company nor the respective
Subsidiary has granted or assigned to any other Person any right to manufacture
or assemble any products or proposed products of the Company or the respective
Subsidiary, other than to its affiliates, and to the knowledge of the Company or
the respective Subsidiary no other person or entity has asserted any such right.
Section 3.14 Loans and Advances. Except as set forth on Schedule
3.14, neither the Company nor any Subsidiary has any outstanding loans or
advances to any Person and is not obligated to make any such loans or advances,
except, in each case, for advances to employees of the Company or the respective
Subsidiary in respect of reimbursable business expenses anticipated to be
incurred by them in connection with their performance of services for the
Company or the respective Subsidiary.
Section 3.15 Assumptions, Guaranties, etc. of Debt of Other Persons.
Except as set forth on Schedule 3.15, neither the Company nor any Subsidiary has
assumed, guaranteed, endorsed or otherwise become directly or contingently
liable on any indebtedness of any other Person (including, without limitation,
liability by way of agreement, contingent or otherwise, to purchase, to provide
funds for payment, to supply funds to or otherwise invest in a debtor, or
otherwise to assure a creditor against loss), except for guaranties by
endorsement of negotiable instruments for deposit or collection in the ordinary
course of business and guaranties by the Subsidiaries of the Obligations of the
Company or another Subsidiary.
Section 3.16 Significant Customers and Suppliers. Except as set forth
on Schedule 3.16, (a) no customer which accounted for 5% or more of the
Company's or any
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Subsidiary's sales or revenues during the periods covered by the financial
statements referred to in Section 3.5 or which has been comparably significant
to the Company or the respective Subsidiary thereafter has terminated,
materially reduced or threatened to terminate or materially reduce its purchases
from the Company and (b) as of the date of this Agreement, there is no supplier
that accounts for more than 5% of the Company's or its Subsidiaries' cost of
goods sold during the periods covered by the Financial Statements in Section
3.5.
Section 3.17 Governmental Approvals. Subject to the accuracy of the
representations and warranties of the Purchasers set forth in Article IV hereof,
no registration or filing with, or consent or approval of or other action by,
any federal, state or other governmental agency or instrumentality is or will be
necessary for the valid execution, delivery and performance by the Company or
any Subsidiary of this Agreement, or for the valid execution delivery and
performance by the Company of the Notes or the Warrants, or the Amended and
Restated Series A-II, Series A-III and Series A-V Warrants or the issuance, sale
and delivery of the Warrant Shares upon exercise of the Warrants, or the Amended
and Restated Series A-II, Series A-III and Series A-V Warrants other than
filings pursuant to state securities laws in connection with the issuance and
sale of the Warrants.
Section 3.18 Insurance. Schedule 3.18 lists all insurance policies
which the Company or any Subsidiary maintains with respect to its businesses,
Assets and employees. Such policies are in full force and effect and neither the
Company nor the respective Subsidiary has received a notice of termination from
the insurance carriers. Such policies, with respect to their amounts and types
of coverage, are adequate in the reasonable commercial judgment of the Company
or the respective Subsidiary to insure against risks to which the Company or the
respective Subsidiary and its respective businesses are subject. Since the date
of the Balance Sheet, there has been no material adverse change in the Company's
or any Subsidiary's relationship with its insurers or in the premiums payable
pursuant to such policies.
Section 3.19 Employment Relations.
(a) The Company and each Subsidiary is in material
compliance with applicable Laws, respecting employment and employment practices,
safety, terms and conditions of employment and wages and hours.
(b) Except as set forth in Schedule 3.19(b), neither the
Company nor any Subsidiary maintains or contributes to any employee benefit plan
("Employee Benefit Plan") within the meaning of Section 3(3) of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"), which is subject
to ERISA but which is not in substantial compliance with ERISA, or which has
incurred any material liability to the Pension Benefit Guaranty Company ("PBGC")
in connection with any Employee Benefit Plan covering any employees of the
Company or the respective Subsidiary or ceased operations at any facility or
withdrawn from any such Plan in a manner which could subject it to material
liability under Section 462(f), 4063 or 4064 of ERISA, and knows of no facts or
circumstances which might give rise to any material liability of the Company or
any Subsidiary to the PBGC under Title IV of ERISA.
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Section 3.20 Compensation of Key Employees. Schedule 3.20 sets forth
the aggregate compensation (salaries, wages and bonuses) paid by the Company to
its four most highly compensated employees for the 1997 fiscal year and the
amount of such compensation scheduled to be paid to such employees for the 1998
fiscal year.
Section 3.21 Environmental Compliance. The Company and each
Subsidiary is in compliance with all applicable Laws relating to environmental
matters in each jurisdiction where it is presently engaged in a material
manufacturing business, except for such failures to comply which, in the
aggregate, could reasonably be expected not to have a material adverse effect on
the Company or the respective Subsidiary. Neither the Company nor any Subsidiary
is subject to any liability under any such environmental Laws, that, in the
aggregate for all such liabilities, could be reasonably expected to have a
material adverse effect on the Company or the respective Subsidiary.
Section 3.22 Projections. The projections delivered to the Purchasers
by the Company on August 25, 1998, were prepared by the Company based upon its
experience in the industry and based upon assumptions of fact and opinion which
the Company believes to have been reasonable and accurate both at the time such
projections were delivered and as of the date hereof.
Section 3.23 Disclosure; Accuracy of Statements. Neither this
Agreement nor any Schedule, Exhibit, Ancillary Agreement, statement, list,
certificate or other document including the Registration Statement on Form S-1
filed by the Company on July 9, 1998 (the "Registration Statement") furnished to
the Purchasers by or on behalf of the Company in connection herewith contains
any untrue statement of a material fact or omits to state a material fact
necessary in order to make the statements contained herein and therein not
misleading in light of the circumstances under which they were made. There is no
fact peculiar to the Company which materially adversely affects or in the future
may (so far as the Company can now foresee) materially adversely affect the
business operations, Assets, or the financial condition of the Company that has
not been set forth in this Agreement or the Ancillary Agreements, or other
documents (including the Registration Statement) furnished by the Company prior
to the date hereof in connection with the transactions contemplated hereby.
Section 3.24 Matters Relating to OncoVAX Products. The Company's
Registration Statement contains an accurate description of the Company's OncoVAX
cancer vaccine product as of the date of the Registration Statement and does not
omit to state a material fact necessary in order to make the statements
contained therein not misleading in light of the circumstances under which they
were made, and, to the best of the Company's knowledge, there have been no
material adverse events respecting such product from the date of the filing of
the Registration Statement through the date hereof.
Section 3.25 Subsidiaries. Schedule 3.25 hereto lists all the
Subsidiaries of the Company, all of which are wholly-owned by the Company.
Section 3.26 Use of Proceeds. The Company acknowledges that the
receipt of the proceeds from its sale of the Guaranteed Senior Secured Primary
Notes and the Guaranteed
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Senior Secured Escrow Notes constitutes a financial benefit to the Company and
each of its wholly-owned subsidiaries, PerImmune Holdings, Inc., ("Holdings"),
PerImmune, Inc. ("PerImmune") and Xxxxxxx, Inc. ("Xxxxxxx"), as described in
Section 5.23.
Section 3.27 Location of Collateral.
The Company has no material amount of Collateral, as that term is defined in the
Security Agreement and the Intellectual Property Security Agreement located, in
the State of Massachusetts valued, in the aggregate at more than $5,000.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS
Each Purchaser represents and warrants to the Company, as to itself,
as of the Closing Date that:
Section 4.1 Purchase of Securities.
(a) It is an "accredited investor" within the meaning of
Rule 501 under the Securities Act and was not organized for the specific purpose
of acquiring the Notes or the Warrants.
(b) It has sufficient knowledge and experience in investing
in companies in a similar stage of development to the Company and the
Subsidiaries so as to be able to evaluate the risks and merits of its investment
in the Company and the Subsidiaries and it is able financially to bear the risks
thereof.
(c) It has had an opportunity to discuss the Company's and
the Subsidiaries' business, management and financial condition with the
Company's and the Subsidiaries' management.
(d) It is acquiring the Notes and the Warrants for its own
account for the purpose of investment and not with a view to or for sale in
connection with any distribution thereof.
(e) It understands that (i) the Notes, the Warrants and,
upon exercise thereof, the Warrant Shares have not been registered under the
Securities Act by reason of their issuance in a transaction exempt from the
registration requirements of the Securities Act pursuant to Section 4(2)
thereof, (ii) the Notes, the Warrants and, upon exercise thereof, the Warrant
Shares must be held indefinitely unless a subsequent disposition thereof is
registered under the Securities Act or is exempt from such registration, (iii)
the Notes, the Warrants and, upon exercise thereof, the Warrant Shares will bear
a legend to such effect and (iv) the Company will make a notation on its
transfer books to such effect.
Section 4.2 Authority. It has all requisite power and authority to
execute, deliver and perform this Agreement, and has taken all necessary action
to authorize the execution, delivery
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and performance of this Agreement and the consummation of the transactions
contemplated hereby. This Agreement on the Closing Date will constitute the
legal, valid and binding obligations of the Purchaser, enforceable in accordance
with their terms, except (a) to the extent that enforceability may be limited by
bankruptcy, insolvency, moratorium, fraudulent conveyance, reorganization or
other similar laws affecting the enforcement of creditors' rights generally and
(b) that the availability of equitable remedies, including specific performance,
is subject to the discretion of the court before which any proceedings therefor
may be brought.
Section 4.3 Projections. It understands that any and all financial
projections and other estimates delivered to it were based on the Company's
experience in the industry and on assumptions of fact and opinion which the
Company believes to have been, and to be, as of the date hereof, reasonable. It
understands that the Company cannot and does not assure or guarantee the
attainment of such projections or other estimates.
Section 4.4 Risk Factors. It understands that the Notes and the
Warrants are subject to certain risk factors and has fully and independently
evaluated to its satisfaction each risk factor prior to making a decision to
invest in the Notes and Warrants (and, upon exercise of the Warrants, the
Warrant Shares).
ARTICLE V
COVENANTS
Section 5.1 Payment of Principal, Premium and Interest. The Company
will duly and punctually pay the principal of (and premium, if any) and interest
on the Notes in accordance with the terms of the Notes and this Agreement.
Section 5.2 Money for Note Payments to be Held in Trust. The Company
will, on or before each due date of the principal of (and premium, if any) or
interest on any of the Notes, segregate and hold in trust for the benefit of the
Persons entitled thereto a sum sufficient to pay the principal (and premium, if
any) or interest so becoming due until such sums shall be paid to such Persons
or otherwise disposed of as herein provided.
Section 5.3 Existence. Neither the Company nor any of its
Subsidiaries shall engage in any business which is materially different from the
business now conducted by the Company and its Subsidiaries as of the date hereof
and as described in the Registration Statement. The Company shall preserve and
keep in full force and effect the respective existence, rights (charter and
statutory) and franchises; provided, however, that the Company shall not be
required to preserve any such right or franchise of the Company or any
Subsidiary if the Board of Directors shall determine that the preservation
thereof is no longer desirable in the conduct of the business of the Company or
such Subsidiary and that the loss thereof is not disadvantageous in any
material respect to the Purchasers. The Company will satisfy all material
contractual obligations to which the Company or any of its Subsidiaries is a
party or by which it or any of its or their Assets are bound and comply in all
material respects with all requirements of law applicable or
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binding upon the Company or any of its Subsidiaries or to which the Company or
any of its Subsidiaries or any of its or their respective Assets are subject.
Section 5.4 Maintenance of Assets. The Company will cause all Assets,
licenses, rights and franchises and those of its Subsidiaries used or useful in
the conduct of its business or the business of any Subsidiary to be maintained
and kept in good condition, repair and working order and supplied with all
necessary equipment and will cause to be made all necessary repairs, renewals,
replacements, betterments and improvements thereof, or in the case of licenses,
rights and franchises, cause to be preserved, renewed and maintained in full
force and effect, all as required by Law and all as in the judgment of the
Company may be necessary so that the business carried on in connection therewith
may be properly and advantageously conducted at all times; provided, however,
that nothing in this Section shall prevent the Company from discontinuing the
operation or maintenance of any of such Assets if such discontinuance is, in the
judgment of the Company, desirable in the conduct of its business or the
business of any Subsidiary and not disadvantageous in any material respect to
the Purchasers.
Section 5.5 Payment of Taxes and Other Claims; Comply with Material
Obligations. The Company will pay or discharge or cause to be paid or discharge,
before the same shall become delinquent, (a) all taxes, assessments and
governmental charges levied or imposed upon the Company or any Subsidiary or
upon the income, profits or Assets of the Company or any Subsidiary, (b) all
lawful claims for labor, materials and supplies which, if unpaid, might by law
become a Lien upon the Assets of the Company or any Subsidiary and (c) all
obligations of whatever nature material to the Company and its Subsidiaries,
taken as a whole, except where the amount or validity thereof is currently being
contested in good faith by appropriate proceedings and reserves in conformity
with GAAP with respect thereto have been provided on the books of the Company or
its Subsidiaries, as the case may be. The Company will comply with, and cause
each Subsidiary of the Company to comply with, all material obligations under
leases, contracts and other agreements, and all applicable Laws, (including,
without limitation, any of same (hereinafter "Environmental Laws") regulating,
relating to or imposing liability or standards of conduct concerning pollution
or the protection of the environment, as may now or hereafter be in effect),
except to the extent the failure to comply therewith could not, in the
aggregate, reasonably be expected to have a material adverse effect on the
business operations, Assets or financial condition of the Company and its
Subsidiaries, taken as a whole.
Section 5.6 Financial Covenants. The Company shall comply with the
following financial covenants:
(a) Adjusted Debt to EBITDA Ratio. The Company shall not
permit the Adjusted Debt to annualized EBITDA Ratio as of the last day of each
March, June, September and December during each period specified below to be
greater than the ratio set forth opposite such period:
Date Ratio
---- -----
On or after 1/l/2001 but before 1/l/2001 9:1
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On or after 1/l/2001 but before 1/l/2002 4:5
After 1/l/2002 2:1
If the Adjusted Debt to EBITDA Ratio as of a measuring date is
greater than the ratio set forth above for such date, the Company may, on or
prior to forty-five (45) days after such measuring date (or, if earlier, the
date on which such Financial Statements are required to be delivered pursuant to
Section 5.12) including the Balance Sheet as of such date, cure such Default
either by increasing the consolidated amount of cash and cash equivalents owned
by the Company and its Subsidiaries or by making payments to reduce the
consolidated Debt of the Company and its Subsidiaries, and the Adjusted Debt to
EBITDA Ratio shall be recalculated as of such original measuring date, but
giving retroactive effect to such additional cash or cash equivalents or such
reduction in consolidated Debt of the Company and its Subsidiaries.
(b) Minimum Tangible Net Worth Levels. The Company shall
maintain minimum Tangible Net Worth for each quarter as follows;
Minimum Tangible Net
Date Worth Amount
---- --------------------
On or after 1/l/2000 but before 1/l/2001 $20,000,000
After 1/l/2001 $30,000,000
provided that the Company may include 75% of GAAP book value of its patents and
25% of GAAP book value of its tradenames and trademarks in such calculations.
(c) EBITDA to Interest Expense Ratio. The Company shall not
permit the ratio of EBITDA to Interest Expense as of the last day of each March,
June, September and December during each period specified below to be greater
than the ratio set forth opposite such period:
Date Ratio
---- -----
On or after 1/1/2000 but before 1/l/2001 2:1
On or after 1/l/2001 but before 1/l/2002 4:1
(d) Investment of Proceeds of Guaranteed Senior Secured
Escrow Notes. The proceeds of the issuance of the Guaranteed Senior Secured
Escrow Notes shall be deposited into the Company's account number
20-10-340-0000000 in accordance with the terms of the Funded Commitment Facility
Escrow Agreement. Unless otherwise utilized by the Company in its operations,
such proceeds shall be invested as set forth in the Funded Commitment Facility
Escrow Agreement. If a Default, an Event of Default or any event that with the
lapse of time or the giving of notice, or both, would constitute an Event of
Default shall occur and be continuing, or would result therefrom, the Company
shall not withdraw any funds from the Escrow Account (as defined in the Funded
Commitment Facility Escrow Agreement), which funds shall be held
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thereafter in constructive trust by the Company, as trustee for the benefit of
the Holders who shall be entitled to disbursement of such funds in accordance
with Section 6(b)(v) of the Notes.
Section 5.7 Limitation on Restricted Payments. The Company (a) shall
not declare or pay any dividend or make any distribution in respect of any class
of its Capital Stock or to the holders of any class of its Capital Stock (other
than dividends or distributions payable solely in shares of its Capital Stock or
in options, warrants or other rights to acquire its Capital Stock), (b) shall
not, and will not permit any Subsidiary to, purchase, redeem or otherwise
acquire or retire for value (i) any Capital Stock of the Company or (ii) any
options, warrants or rights to purchase or acquire shares of Capital Stock, (c)
shall not make, or permit any Subsidiary to make, any loan, advance, capital
contribution to or investment in, or payment on a guarantee of any obligation
of, any Person, other than a wholly-owned Subsidiary, (d) shall not, and shall
not permit any Subsidiary to redeem, release, repurchase, retire or otherwise
acquire or retire for value prior to any scheduled maturity, repayment or
sinking fund payment, Debt of the Company which is subordinate in right of
payment to the Notes, and (e) shall not, and shall not permit any Subsidiary to
make any Investments other than Permitted Investments (the transactions
described in clauses (a) through (e) being referred to herein as "Restricted
Payments").
Notwithstanding the foregoing provision, if, at the time thereof no
Default, Event of Default or an event that with the lapse of time or the giving
of notice, or both, would constitute an Event of Default shall have occurred and
is continuing, or would result therefrom the Company may make the following
Restricted Payments:
(a) the redemption or purchase of Capital Stock of the
Company held by an employee or former employee of the Company or its
Subsidiaries who has forfeited the right to own such Capital Stock in accordance
with the terms of an agreement between the Company and such employee entered
into at the time of issuance of such Capital Stock (including pursuant to an
option), in an amount not to exceed $500,000 per employee or $1,000,000 for all
employees, in the aggregate, per annum; or
(b) an investment by the Company or any Subsidiary in any
Foreign Subsidiaries; or
(c) an investment by the Company or any Subsidiary in any
Subsidiary.
Nothing in this Section 5.7 shall be construed to prohibit a merger of the
Company or any Subsidiary in accordance with Section 5.17.
Section 5.8 Limitation on Certain Restrictions Affecting any
Subsidiary. The Company will not, and will not permit any Subsidiary to, create
or otherwise suffer to become effective or exist any consensual encumbrance or
restriction on the ability of any Subsidiary to (a) pay dividends, directly or
indirectly, or make any other distributions on its Capital Stock or pay any Debt
or any other obligation owed to the Company or any Subsidiary, (b) make loans or
advances to the Company or any Subsidiary, or (c) transfer any of its Assets to
the Company or any Subsidiary, provided, however, that this Section shall not
restrict or prohibit any restriction
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existing under this Agreement or under agreements in effect at the date of
execution of this Agreement.
Section 5.9 Limitation on Liens. The Company will not, and will not
permit any Subsidiary to, directly or indirectly, create, incur, assume or
suffer to exist any Lien upon any of its Assets or revenues, whether now owned
or hereafter acquired except for:
(a) Liens on Assets existing at the time of acquisition
thereof, provided the principal amount of the Debt secured by such Lien does not
exceed 100% of the Fair Market Value of the Assets acquired at the time it was
acquired;
(b) Liens on Assets of a corporation existing at the time
such corporation becomes a Subsidiary or is merged into or consolidated with the
Company or any Subsidiary, provided such Liens were not created within 180 days
prior thereto;
(c) Liens on Assets of the Company or any Subsidiary
resulting from Debt secured by the bond issued or to be issued by the Washington
Economic Development Finance Authority in the aggregate principal amount of
$1,500,000;
(d) Liens to secure Debt Incurred for the purpose of
financing all or any part of the purchase price or the cost of construction or
improvement of the Assets subject to such Liens, so long as such Liens are
incurred prior to or within 180 days after such Assets is acquired or such
construction or improvement is completed;
(e) any extension, renewal or refinancing (or successive
extensions, renewals or refinancings), in whole or in part, of any Lien referred
to in the foregoing clauses (a) through (d) and Liens existing as of the date of
this Agreement, so long as in each case such extension, renewal or refinancing
does not extend to any other Assets and the Debt so secured is not increased;
(f) any Lien securing Debt owing by the Company to one or
more wholly owned Subsidiaries, but only if such Debt cannot be transferred by
such Subsidiaries;
(g) any Lien securing the Receivable Facility; and
(h) Liens created by the Security Documents.
Section 5.10 Maintenance of Insurance. The Company will at all times
obtain and maintain (or cause to be obtained and maintained) for itself and each
of its Subsidiaries insurance policies for all of their Assets which are of an
insurable nature insured against loss or damage with insurers believed by the
Company to be responsible (but in no event, with insurers having a claims paying
ability of less than "A" or better by S&P's or Xxxxx'x), ("Insurance Carriers")
to the extent that Assets of similar character is usually so insured by
corporations similarly situated and owning like properties in accordance with
good business practice, provided, however, that the Company shall maintain at
least (a) business interruption insurance covering all locations, and (b) "all
risk" and general public liability insurance against loss, damage or claims of
the kind
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that, in the reasonable good faith opinion of the Company, is adequate
and appropriate for the conduct of the business of the Company and, its
Subsidiaries, all of which insurance shall be in such amounts, with such
deductibles and amounts of self-insurance and by such methods as shall be
customary for entities similarly situated in its industry. Where applicable,
each such insurance policy shall name the Holders of the Notes as additional
insureds, beneficiaries, assignees and loan payees. The Company will, and will
cause its Subsidiaries to, use the proceeds from any such insurance policy to
repair, replace or otherwise restore the Assets to which such proceeds relate.
The Company may elect not to make such repair, replacement or restoration if the
Board of Directors, in its reasonable discretion, determines that such repair,
replacement or restoration is not in the best interests of the Company. Within
sixty (60) days of the date hereof, the Company shall obtain and the Company
shall thereafter, maintain one or more life insurance policies (the "XxXxxxxx
Policies") on the life of Xxxxx XxXxxxxx from one or more Insurance Carriers
selected by the Company in an aggregate face amount of at least $5,000,000. Each
XxXxxxxx Policy shall provide that such insurance cannot be terminated unless
thirty (30) days' advance notice has been provided to the Purchasers of the
Notes, during which time such Purchasers shall have the right to pay any premium
due, and shall be promptly reimbursed by the Company for any amounts so paid.
Each XxXxxxxx Policy shall be for a minimum of a five year term, and premiums in
respect of the first three years of the term shall have been prepaid as of the
date on which the first premium is due. The Purchasers shall be named as a
co-owners and beneficiaries of the XxXxxxxx Policies, and the Company shall
assign, in form and substance satisfactory to the Purchasers their ownership
interest to the Purchasers with the consent and acknowledgment of the Insurance
Carrier thereof, free and clear of any Lien or encumbrance (other than any Lien
or encumbrance created pursuant to the Security Documents), to be applied as
follows: (i) first for the benefit of the Purchasers of Notes, to the extent of
the aggregate outstanding principal balance of the Outstanding Notes plus
accrued but unpaid interest thereon, and any other amounts due under any of the
Ancillary Agreements and then (ii) for the benefit of the Company. Upon the
indefeasible payment in full of the Notes, the Purchasers shall re-assign each
XxXxxxxx Policy to the Company.
Section 5.11 Waiver of Stay, Extension and Usury Laws. The Company
and Subsidiaries covenant (to the extent that they may lawfully do so) that they
will not at any time insist upon, or plead, or in any manner whatsoever claim or
take the benefit or advantage of, any stay, extension or usury Law or other Law
which would prohibit or forgive the Company or such Subsidiary from paying all
or any portion of the principal and/or interest on the Notes wherever such Law
is or may be enacted, now or at any time hereafter in force, or which may affect
the covenants or the performance of this Agreement and the Notes; and the
Company and each of the Subsidiaries (to the extent that they may lawfully do
so) hereby expressly waive all benefit or advantage of any such Law, and
covenant that they will not, by resort to any such Law, hinder, delay or impede
the execution of any power herein granted to the Holders, but will suffer and
permit the execution of every such power as though no such law had been enacted.
Section 5.12 Financial Statements; Other Information. The Company
will deliver in duplicate to Northstar Return, which agrees to accept, on behalf
of each Purchaser:
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(a) if the Company is not subject to the requirements of
Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), as soon as practicable and in any event within 30 days after
the end of each month commencing with the month of September 1998, internally
prepared consolidated statements of income, stockholders' equity, and cash flows
of the Company and its Subsidiaries for such month, and a consolidated Balance
Sheet of the Company any and its Subsidiaries as at the end of such month,
together with a summary of significant facts and developments occurring within
such month of which it is aware affecting its and/or their operations, financial
condition or prospects;
(b) as soon as practicable and in any event within 45 days
after the end of each of the first three quarterly periods in each fiscal year
if the Company is subject to the requirements of Section 13 or 15(d) of the
Exchange Act, and, if the Company is not subject to such requirements, after the
end of each quarterly period in each fiscal year, internally prepared
consolidated statements of income, stockholders' equity, and cash flows of the
Company and its Subsidiaries for the quarterly period and for the period from
the beginning of the current fiscal year to the end of such quarterly period,
and a consolidated Balance Sheet of the Company and its Subsidiaries as at the
end of such quarterly period, setting forth in each case in comparative form
figures for the corresponding periods in the preceding fiscal year, all in
reasonable detail and satisfactory in form to the Purchasers, certified by a
Responsible Officer as having been prepared in accordance with GAAP and as
fairly presenting the consolidated financial condition and consolidated results
of operations of the Company and its Subsidiaries (subject to normal year-end
audit adjustments and the absence of footnotes); provided, however, that
delivery within the aforesaid 45-day period, pursuant to subsection (d)(i)
below, of copies of the Quarterly Report on Form 10-Q of the Company for such
quarterly period filed with the Securities and Exchange Commission shall be
deemed to satisfy the requirements of this subsection (b) with respect to the
consolidated financial statements;
(c) as soon as practicable and in any event within 90 days
after the end of each fiscal year, consolidating and consolidated statements of
income and cash flows and a consolidated statement of stockholders' equity of
the Company and its Subsidiaries for such year, and a consolidating and
consolidated Balance Sheet of the Company and its Subsidiaries as at the end of
such year, setting forth in each case in comparative form the corresponding
consolidated figures from the preceding annual audit, all in reasonable detail
and satisfactory in form to the Purchasers and, as to the consolidated
statements, a report by independent public accountants of recognized national
standing (an "Accountant") selected by the Company whose report shall be without
limitation as to the scope of the audit, and satisfactory in substance to the
Purchasers along with an opinion of such Accountant to the effect that such
consolidated financial statements present fairly in all material respects the
financial condition and results of operations of the Company and its
Subsidiaries on a consolidated basis in accordance with GAAP without any
going-concern or other qualification expressed in such opinion; provided,
however, that delivery within the aforesaid 90-day period, pursuant to
subsection (d)(i) below, of copies of the Annual Report Form 10-K of the Company
for such fiscal year filed with the Securities and Exchange Commission shall be
deemed to satisfy the requirements of this clause (c) with respect to
consolidated financial statements.
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(d) The Company will also deliver:
(i) from and after the date the Company becomes
subject to the requirements of Section 13 or 15(d) of the Exchange
Act, promptly upon transmission thereof, copies of all such financial
statements, proxy statements, notices and reports as it shall send to
its stockholders and copies of all registration statements (without
exhibits) and all reports which it files with the Securities and
Exchange Commission (or any governmental body or agency succeeding to
the functions of the Securities and Exchange Commission);
(ii) promptly upon receipt thereof, a copy of
each other report submitted to the Company or any Subsidiary by its
Accountant in connection with any annual, interim or special audit
made by such Accountant of the books of the Company or any
Subsidiary;
(iii) as soon as practicable and in any event
within 10 days after obtaining knowledge of (A) any Person giving any
written notice to the Company or any of its Subsidiaries with respect
to a claimed Default, or event or condition which would result in the
acceleration of Debt in an amount in excess of $1,000,000, (B) the
institution of any litigation or other proceeding involving claims
against the Company or any of its Subsidiaries equal to or greater
than $1,000,000 or any adverse determination in any proceeding
against the Company equal or greater than $1,000,000 with respect to
a single cause of action, (C) any of the events set forth in Section
4043(b) of ERISA (a "Reportable Event"), or (D) any regulatory
proceeding directly involving the Company or any Subsidiary which, in
the opinion of the Company, would, if adversely determined, have a
material adverse effect on the Company and its Subsidiaries taken as
a whole, an officer's certificate specifying the nature and period of
existence of any such condition or event, specifying the notice given
or action taken by such Person and the nature of any such claimed
Default, event or condition, and specifying the details of such
proceeding, litigation or dispute and what action the Company or any
of its Subsidiaries has taken, is taking or proposes to take with
respect thereto; provided, however, that, with respect to any event
set forth in (A) and (B) above, if the amount involves does not
exceed $3,500,000 the Company shall have 30 days to notify the
Holders after obtaining knowledge thereof;
(iv) promptly after the occurrence thereof (A) a
summary of any material dispute between the Company and its
Accountant and (B) a decision by the Company to change its
Accountant;
(v) with reasonable promptness after request from
any Holder, such information respecting the condition or operations,
financial or otherwise, of the Company or any of its Subsidiaries as
such Purchaser may reasonably request;
(vi) promptly after the filing or receiving
thereof, copies of all reports and notices which the Company or any
Subsidiary files under ERISA with the Internal
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Revenue Service or the PBGC or the U.S. Department of Labor or which
the Company or any Subsidiary received from such corporation;
(vii) within forty-five (45) days after each of
March 31, June 30 and September 30, 2000, a certificate of a
Responsible Officer certifying whether the Company is in compliance
with Section 1(f) of the Note and setting forth in reasonable detail
the information required for the calculations thereof;
(viii) within five (5) business days prior to the
closing of any proposed sale (public or private) by the Company of
its debt or equity securities, a report from a Responsible Officer
setting forth in reasonable detail the amount of securities proposed
for sale; the proceeds expected to be received by the Company
therefrom; and the proposed date for receipt of the funds by the
Company;
(ix) within 45 days after the end of each
quarterly period in each fiscal year, the Company will deliver to the
Purchasers an Officer's Certificate certified by a Responsible
Officer (with such financial information with computations in
reasonable detail) to demonstrate compliance by the Company and its
Subsidiaries with the financial covenants set forth in Section 5.6
and any computations required by the Notes and stating that there
exists no Event of Default or Default, or an event that with the
lapse of time or the giving of notice, or both, could constitute an
Event of Default or, if any Event of Default or Default or an event
that with the lapse of time or the giving of notice, or both, could
constitute an Event of Default exists, specifying the nature and
period of existence thereof and what action the Company proposes to
take with respect thereto;
(x) promptly after the occurrence of a Change of
Control or the cessation of employment for any reason of Xxxxx X.
XxXxxxxx as the Company' Chief Executive Officer for a period of
thirty (30) days (the "XxXxxxxx Termination"), a summary of the
event(s) constituting the Change of Control or XxXxxxxx Termination
and the date of such occurrence;
(xi) The Company will, upon the request of the
Holder of any Note, provide such Holder, and any qualified
institutional buyer or accredited investor designated by such Holder,
such financial and other information as such Holder may reasonably
determine to be necessary in order to permit compliance with the
information requirements of Rule 144A under the Securities Act in
connection with the resale of Notes, except at such times as the
Company is subject to the reporting requirements of Section 13 or
15(d) of the Exchange Act. For the purpose of this paragraph
5.12(d)(xi), the term "qualified institutional buyer" and "accredited
investor" shall have the meanings specified in Rule 144A and Rule 501
of Regulation D, respectively, under the Securities Act; and
(xii) Along with the quarterly Financial
Statements delivered pursuant to Section 5.12(b) hereof when they are
due (A) a report analyzing changes in the Company's gross revenues
and in its net revenues in such fiscal quarter compared to the
comparable quarter in the prior fiscal year, and (B) when and to the
extent practicable, a
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report of the number of people treated and the quantity of doses of
all therapeutic products sold in such fiscal quarter, provided
however, that the gross revenue and net revenue data required
hereunder need not be compared to the prior fiscal year for the first
four quarterly reports under this clause, and provided, further, that
the obligation to provide information pursuant to (B) above, shall
not commence until the earlier to occur of (I) January 1, 2000, (II)
FDA approval for commercial use by the Company of OncoVAX cancer
vaccine or HumaSPECT or HumaRAD (as those products are described in
the Registration Statement), or (III) the approval of a Marketing
Authorization Application (as defined in the Registration Statement)
or a reimbursement agreement for the commercial use by the Company of
OncoVAX cancer vaccine or HumaSPECT or HumaRAD (as those products are
described in the Registration Statement) by a member country of the
European Union or the United Kingdom.
Section 5.13 Inspection and Delivery of Property; Books and Records;
Discussions. The Company hereby agrees that, so long as any Obligations under
this Agreement or any Ancillary Agreements are Outstanding, the Company shall
provide, and shall cause each of its Subsidiaries to provide, within ten (10)
days after request therefore, in writing, such business, financial and other
information as the Holders may from time to time reasonably request. The Company
also agrees that it shall keep proper books of records and accounts in which
full, true and correct entries in conformity with GAAP and all requirements of
Law shall be made of all dealings and transactions in relation to its business
and activities, and permit representatives of the Holders to visit and inspect
any of its properties and examine and make abstracts from any of its books and
corporate, financial and other records at any reasonable time and as often as
may reasonably be desired and to discuss the business, operations, Assets and
financial and other condition of the Company with officers and employees of the
Company and with its Accountants; provided that the Holders shall bear their own
expenses if any such inspection, examination or discussion occurs at a time when
no Default or Event of Default shall have occurred and be continuing.
Section 5.14 Further Security Interest. In the event that the Company
or any Subsidiary of the Company at any time or from time to time after the date
hereof shall form or acquire any Subsidiary (a "New Subsidiary") as may be
permitted hereby, (a) the Company or, as the case may be, such Subsidiary, as
beneficial owner of the capital stock of the New Subsidiary, shall promptly
execute and deliver to the Holders of the Notes a supplemental agreement
pursuant to which the Company or such Subsidiary will pledge shares of Capital
Stock or other equity interests to the Holders of the Notes, pursuant to which
supplemental agreement 100% of the issued and outstanding shares of Capital
Stock or other equity interests in or of the New Subsidiary held beneficially by
the Company or such Subsidiary, as the case may be, shall be pledged under and
in accordance with such supplemental agreement, (b) the Company or such
Subsidiary, as the case may be, shall promptly take all actions necessary and
appropriate to perfect the Liens of such pledge (including without limitation,
the delivery of stock or other certificates evidencing the shares of Capital
Stock or other equity interest so pledged (if, any), accompanied by duly
executed and undated stock powers in blank) and (c) the Company and
such Subsidiary shall promptly deliver to the Holders of the Notes such legal
opinions respecting
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such supplemental agreement, and the pledge granted thereby, as the Holders of
the Notes shall reasonably request.
The Company or, as the case may be, any of its Subsidiaries as the
record or beneficial owners of the Capital Stock of any New Subsidiary shall
promptly cause such New Subsidiary to become a party to the Security Documents
and such New Subsidiary shall promptly take all actions necessary and
appropriate to perfect the Liens of such Security Interests as are granted by
such Security Documents which such New Subsidiary shall have entered into as
aforesaid (including, without limitation, the delivery to the Holders of the
Notes of financing statements, executed by such New Subsidiary), and otherwise
in form and substance appropriate for filing in all appropriate jurisdictions)
and such New Subsidiary shall promptly deliver to the Holders of the Notes such
legal opinions in form and substance respecting such Security Documents and the
Security Interests granted thereby as the Holders of the Notes shall reasonably
request. The Company, or as the case may be, any of its Subsidiaries as the
record or beneficial owners of the capital stock of any New Subsidiary shall
promptly cause such New Subsidiary to become a party to a Guaranty Agreement
substantially in the form of Exhibits H-1 through H-3 attached hereto and such
New Subsidiary shall promptly take all actions necessary and appropriate to
guaranty the obligations of the Company and its Subsidiaries hereunder.
Section 5.15 Further Assurances.
(a) The Company, at its own cost and expense, will cause to
be promptly duly taken, executed, acknowledged and delivered all such further
acts, documents and issuances as the Holders of the Notes may from time to time
reasonably request in order to more effectively carry out the intent and
purposes of this Agreement and the Ancillary Agreements and the transactions
contemplated hereby and thereby. In furtherance, but not in limitation of the
foregoing, the Company agrees to deliver and to cause its Subsidiaries to
deliver all further instruments and documents that may be necessary or desirable
in order to grant, confirm, protect and perfect first and prior Liens in any
real or personal property which is at such time Collateral or which was intended
to be Collateral pursuant to the Security Documents.
(b) The Company further agrees to take all actions
requested by the Holders of the Notes to name the Holders of the Notes as the
beneficiaries of the XxXxxxxx Policy delivered on the Closing Date, or as
co-owners, assignees or additional insureds, as applicable.
(c) The Company further agrees, at its own cost and
expense, to take all actions necessary to (i) file for patent protection in any
and all jurisdictions in which the Company intends to operate its business with
respect to patents reasonably expected to generate, directly, or indirectly
(through product sales or licensing of products related to such patents), more
than 10% of the Company's annual revenues in such jurisdiction (the "Material
Patents"); (ii) cause the Holders' Security Interests in the Company's existing
or future Material Patents to be perfected, protected and maintained as a first
priority security interest (except with respect to certain Collateral in which
Akzo Nobel Pharma International, B.V., as Collateral Agent under the
Intellectual Property Security Agreement dated August 8, 1996 (the "Collateral
Agent") has a first priority security interest (the "Akzo Security Interest
Collateral") and with respect to the
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Akzo Security Interest Collateral, a second priority perfected security
interest until such time as payment in full of the Debt underlying the Akzo
Security Interest Collateral has been made and at such time, a first priority
perfected security interest in the Akzo Security Interest Collateral) to the
fullest extent permitted by the laws of the jurisdiction in which the Company is
operating its business utilizing Material Patents; and (iii) to comply with the
obligations of Section 5.26 to assure that the patents and patent applications
set forth on Schedule 5.26 have been assigned and transferred into the name of
Holdings in the United States, the Netherlands, Belgium and the United Kingdom
and to cause the Holders' Security Interests in such patents to be perfected,
protected and maintained in such jurisdictions as a second priority Security
Interest (until such time as the Debt underlying the Akzo Security Interest
Collateral shall have been repaid and in such case, as a first priority
perfected security interest).
(d) The Company further agrees to make prompt payment of
all fees, costs and expenses of the Holders and their counsel arising out of the
transactions contemplated hereby which have not been paid in full at the
Closing.
Section 5.16 Limitation on Debt. The Company shall not, and shall not
permit any of its Subsidiaries to, directly or indirectly, create, incur, assume
or suffer to exist any Debt, except:
(a) Debt of the Company in respect of the Notes.
(b) Debt of the Company to any Subsidiary of the Company
that has executed and delivered Security Documents and of any such Subsidiary to
the Company or any other such Subsidiary.
(c) Debt outstanding as of June 30, 1998 as set forth on
Schedule 5.16 hereto and any amendments or modifications thereof (but excluding
any increase in the principal amount or interest on such Debt).
(d) Debt of the Company or any of its Subsidiaries that was
incurred by such Person on customary commercial trade terms to vendors,
suppliers or other Persons providing services for use by such Person in the
ordinary course of its business, unless and until such Debt is outstanding more
than 60 days past the original due date therefor.
(e) Debt of the Company or any of its Subsidiaries for any
deposit received by the Company or such Subsidiary from any customer or client
for services to be performed or goods sold by the Company or such Subsidiary,
unless the Company or such Subsidiary for any reason becomes obligated to refund
such deposit and the reimbursement obligation has been outstanding for more than
60 days from the date such reimbursement obligation occurred.
(f) So long as (i) no Default or Event of Default or event
that with the lapse of time or the giving of notice, or both, would constitute
an Event of Default, then exists or is continuing or would result therefrom and
(ii) no Default or Event of Default or event that with the lapse of time or the
giving of notice, or both, would constitute an Event of Default, would
exist after giving pro forma effect to the Debt to be incurred (including,
without limitation, Defaults or Events of Default or under Section 5.6).
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(A) Debt outstanding under the Company's
Receivables Facility;
(B) Unsecured Debt of the Company and its
Subsidiaries which, by its terms, is made expressly
subordinate to the Debt of the Company under the Notes,
provided that the Company may incur unsecured Debt which
is subordinate to the Debt of the Notes without regard to
any Default, Event of Default or event that with the lapse
of time or the giving of notice, or both, would constitute
an Event of Default, under Section 5.6, in an amount equal
to the difference between $11,000,000 and the amount of
the Notes that have been prepaid before the date on which
such unsecured Debt is incurred under this provision;
(C) Debt of the Company and its Subsidiaries
incurred to finance the acquisition of tangible Assets
(whether pursuant to a loan, a lease financing or
otherwise) after the date hereof provided that such Debt
shall be limited to 100% of the cost of such Assets at the
time such Assets were acquired.
(D) Debt of a corporation, limited liability
company, partnership or other entity which becomes a
Subsidiary of the Company after the date hereof as
permitted hereunder, provided that such Debt existed at
the time at the same time such entity became a Subsidiary
and was not created within 180 days prior thereto or
otherwise in anticipation thereof; and
(E) Debt of the Company with respect to letters
of credit or applications or reimbursements therefor to
support payment or performance obligations of the Company.
Section 5.17 Limitation on Mergers; Etc. The Company shall not, and
shall not permit any of its Subsidiaries to, directly or indirectly, enter into
any merger, consolidation or amalgamation, or liquidate, wind up or dissolve
itself (or suffer any liquidation or dissolution), or convey, sell, lease,
assign, transfer or otherwise dispose of, all or substantially all of its
business or Assets, or make any material change in its present method of
conducting business, except so long as no Default, Event of Default or event
that with the lapse of time or the giving of notice, or both, would constitute
an Event of Default, has occurred and is continuing or would result therefrom:
(a) any wholly-owned Subsidiary may be merged or
consolidated with or into the Company (provided that the Company shall be
continuing or surviving corporation) or with or into any one or more
wholly-owned Subsidiaries (provided that a wholly-owned Subsidiary or
Subsidiaries shall be the continuing or surviving corporation);
(b) any wholly-owned Subsidiary may sell, lease, transfer
or otherwise dispose of any or all of its Assets (upon voluntary liquidation or
otherwise) to the Company or any other wholly-owned Subsidiary; and
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(c) the Company or any Subsidiary may be merged or
consolidated with one or more entities provided that (i) the Company or any such
Subsidiary shall be the continuing or surviving corporation, (ii) the Required
Holders shall have consented to such merger or consolidation and (iii)
immediately after giving effect thereto, no Default or Event of Default or event
that with the lapse of time or them giving notice, would constitute an Event of
Default shall have occurred and be continuing or would result therefrom.
Section 5.18 Limitation on Sales of Property. The Company shall not,
and shall not permit any Subsidiaries to, directly or indirectly, convey, sell,
lease, assign, transfer or otherwise dispose of any of its Assets or business
(including, without limitation receivables and leasehold interests) or any
product line, whether owned or hereafter acquired, or, in the case of any
Subsidiary, issue or sell any shares of such Subsidiary's Capital Stock to any
Person other than the Company or any wholly-owned Subsidiary, except:
(a) the sale, lease or other disposition of any product,
inventory or equipment in the ordinary course of business in bona fide
commercial transactions;
(b) as permitted by Section 5.16(a), (b) or (f) (A); or
(c) a sale or other disposition where the consideration
received is at least equal to the Fair Market Value of such Assets; provided
that the Asset Sale Excess Proceeds must be used to prepay the Notes.
Section 5.19 Limitation on Transactions with Affiliates. The Company
shall not, and shall not permit any of its Subsidiaries, directly or indirectly,
to enter into any transaction (including, without limitation, any purchase,
sale, lease or exchange of Assets or the rendering of any service) with any
Affiliate that is not a wholly-owned Subsidiary, unless such transaction (a) is
otherwise permitted hereunder, (b) is in the ordinary course of the Company or
such Subsidiary's business, and (c) is on terms no less favorable to the Company
or such Subsidiary, as the case may be, than it would obtain in an arm's-length
transaction; provided, that the Company may pay customary directors' fees and
reimburse reasonable out-of-pocket expenses directly related to meetings of the
Board of Directors.
Section 5.20 Limitation on Credit Extensions. The Company shall not,
and shall not permit any of its Subsidiaries to, extend credit, make advances or
make loans other than (a) normal and prudent extensions of credit to customers
buying goods and services in the ordinary course or business, which extensions
shall not be for longer periods than those extended by similar businesses
operated in a normal and prudent manner, (b) loans or other advances, however,
characterized, to the Company or to any of its wholly-owned Subsidiaries to the
extent otherwise permitted hereunder, and (c) loans to employees in the
furtherance of the Company's business as shall not exceed at any one time
outstanding $500,000 in the aggregate.
Section 5.21 Limitation on Certain Amendments. The Company shall not
amend or otherwise modify or waive any provision of its Certificate of
Incorporation without the prior written consent of the Required Holders, which
consent shall not unreasonably withheld.
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Section 5.22 Limitation on Investments. The Company shall not, and
shall not permit any of its Subsidiaries to, purchase, hold or acquire
beneficially any stock, bond, notes, debentures or other securities or any
Assets constituting a business unit of, or make any other investment in, any
Person, except (a) as expressly permitted by Section 5.20 hereof, (b)
investments in Capital Stock of any of the wholly owned Subsidiaries of the
Company that have executed and delivered Security Documents, (c) investments in
joint ventures, partnerships and other entities in the biopharmaceutical
business that have, for all such investments taken together, an aggregate cost
basis not greater than $1,000,000, so long as no Default or Event of Default or
event that with the lapse of time or the giving of notice, or both, would
constitute an Event of Default exists at the time of and after giving effect to
any such investment, (d) investments in any entity for which the only
consideration paid therefor by the Company or any of its Subsidiaries is the
Common Stock of the Company or such Subsidiary, valued at its Fair Market Value
and (e) Permitted Investments.
Section 5.23 Use of Proceeds. The Company and its Subsidiaries will
utilize the proceeds from the sale of the Guaranteed Senior Secured Primary
Notes and the Guaranteed Senior Secured Escrow Notes as follows:
(a) $7,171,131 will be applied at the Closing to repay the
1995 Note owed by the Company to Northstar High Total Return Fund;
(b) $10,113,014 will be applied at the Closing to repay the
April 1998 Notes owed by the Company to Northstar High Total Return Fund II and
Northstar High Yield Fund;
(c) $4,876,423 will be applied at the Closing to the
redemption of the Company's Series A-II Preferred Stock held by Northstar High
Total Return Fund;
(d) $5,097,568.91 will be applied at the Closing to
discharge in full the Company's Debt to CoreStates Enterprise Fund, a division
of CoreStates Bank, N.A. ("CoreStates");
(e) $500,000 will be applied at the Closing to the payment
by Holdings of amounts owed by it to Organon pursuant to the Intellectual
Property Agreement dated August 2, 1996 by and among Holdings, and Akzo Nobel
Pharma International, B.V. ("Akzo"); and
(f) $2,165,365.09 will be advanced by the Company to its
Subsidiaries, Holdings, PerImmune and Xxxxxxx for capital (including, without
limitation, working capital) required by such Subsidiaries.
The Company agrees that the funds utilized to make payments pursuant to Section
5.23(a) through and including (f) will be disbursed directly to the
corresponding payees from the Purchasers at the Closing.
Section 5.24 Assumption of Company Debt by Subsidiaries. Upon the
request of any Holder after the Closing Date, the Company shall cause each of
its Subsidiaries, Holdings, PerImmune and Xxxxxxx, and any New Subsidiaries to
execute Notes (the "Subsidiary Notes"), on
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terms and conditions identical to the Guaranteed Senior Secured Primary Notes
and the Guaranteed Senior Secured Escrow Notes, evidencing the aggregate
principal amount of Outstanding Notes held by such Holder pursuant to this
Purchase Agreement, provided that in the event there shall be any amounts owed
to the Collateral Agent at the time of such request, the Company shall use its
best efforts to obtain, within twenty (20) business days after delivery of the
request, the consent of the Collateral Agent to the execution and delivery of
the Subsidiary Notes. The Company shall not be required to deliver the
Subsidiary Notes pursuant to this provision if the Collateral Agent refuses to
consent thereto provided that the Company has used its best efforts to obtain
the Collateral Agent's consent. If there shall be no amounts owing to the
Collateral Agent at the time of the request for Subsidiary Notes, the Company
shall deliver the Subsidiary Notes to the requesting Holder within seven (7)
business days after delivery of the request by such Holder to the Company.
Section 5.25 Covenants with respect to OncoVAX Cancer Vaccine. The
Company will use its commercially reasonable best efforts (a) to file its
Biological License Application with respect to the OncoVAX cancer vaccine not
later than December 31, 1998, (b) to obtain FDA approval expeditiously of the
Company's therapeutic products currently utilized in its clinical trials and to
initiate Phase III clinical trials for OncoVAX in combination with chemotherapy
for Stage III colon cancer and (c) to obtain not later than December 31, 1998,
regulatory and/or reimbursement approvals required for the commercial use of its
OncoVAX cancer vaccine in the Netherlands.
Section 5.26 Covenant with respect to Transfer of Certain Patents.
The Company at its own cost and expense, within 60 days after the date hereof,
will take all actions necessary to record the assignment and transfer of patents
and patent applications listed on Schedule 5.26 hereto into the name of Holdings
with the appropriate authorities in the United States, Netherlands, Belgium, and
the United Kingdom and to cause the Holders' Security Interests in such patents
to be perfected, protected and maintained in such jurisdictions as a second
priority perfected security interest until such time as the Debt underlying the
Akzo Security Interest has been repaid in full, and in such case, a first
priority perfected security interest in the Akzo Security Interest Collateral.
In the event that the Company shall fail to have caused the Holders'
Security Interests in such patents to be perfected, protected and maintained in
such jurisdictions as a second priority perfected security interest (or, in the
event that the Debt underlying the Akzo Security Interest Collateral shall have
been repaid in full, and in such case, a first priority perfected security
interest in the Akzo Security Interest Collateral) within 60 days after the date
hereof, the rate of interest payable with respect to the principal amount of
Outstanding Notes shall be increased to 15% per annum in accordance with Section
2(c) of the Guaranteed Senior Secured Primary Note and Section 2(c) of the
Guaranteed Senior Secured Escrow Note until such time as the Company has
fulfilled its obligations under this Section 5.26; provided however, that
failure of the Company to fulfill its obligations under this Section 5.26 within
180 days after the date hereof shall be deemed an "Event of Default" in
accordance with Section 6(a)(iv) of the Guaranteed Senior Secured Primary Note
and Section 6(a)(iv) of the Senior Secured Escrow Note.
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Section 5.27 Foreign Currency Liabilities. The Company will manage
its foreign currencies, Assets, liabilities and expenses in a manner that will
protect and promote its ability to pay its U.S. Dollar liabilities and related
costs and expenses.
Section 5.28 Unaudited Financial Statements. The Company shall
furnish to the Purchasers, on or prior to September 15, 1998, the unaudited
balance sheet of the Company for the quarter and six months ended June 30, 1998
and the related unaudited statements of income, stockholders' equity and cash
flows of the Company for the quarter ended June 30, 1998, each certified by a
Responsible Officer of the Company. Such financial statements shall be prepared
in accordance with GAAP and shall fairly present the financial position of the
Company as of June 30, 1998.
Section 5.29 Consent of Transamerica Business Credit Corporation. The
Company shall use its best efforts to obtain the consent of the Transamerica
Business Credit Corporation to the grant of a second lien on the Excluded
Equipment.
Section 5.30 Interest Escrow Security Agreement. The Company will
provide information reasonably requested by the Holders respecting the
Depositary appointed under the Interest Escrow Security Agreement and will
change the Depositary, if requested by the Holders.
Section 5.31 Waiver of Certain Covenants. The Company may omit in any
particular instance to comply with any covenant or condition set forth in
Sections 5.1 to 5.30, inclusive, if before the time for such compliance the
Required Holders shall, by act of such Required Holders, either waive such
compliance in such instance or generally waive compliance with such covenant or
condition, but no such waiver shall extend to or affect such covenant or
condition except to the extent and for the time so expressly waived, and, until
such waiver shall become effective, the obligations of the Company in respect of
any such covenant or condition shall remain in full force and effect.
ARTICLE VI
CONDITIONS TO THE OBLIGATIONS OF THE PURCHASERS
The obligations of each Purchaser to purchase and pay for the Newly
Issued Securities being purchased by it on the Closing Date are subject, at the
option of such Purchaser, to the satisfaction of the following conditions on or
before such Closing Date:
Section 6.1 Supporting Documents. At the Closing, the Purchasers
shall have received copies of the following documents:
(a) (i) the Charter, certified as of a recent date by the
Secretary of State of the State of Delaware and (ii) a certificate of said
Secretary dated as of a recent date as to the due incorporation and subsistence
of the Company, and listing all documents of the Company on file with said
Secretary; and
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(b) a certificate of the Secretary or an Assistant
Secretary of the Company dated the Closing Date and certifying: (i) that
attached thereto is a true and complete copy of all resolutions adopted by the
Board of Directors (the "Company Board") or the stockholders of the Company
authorizing the execution, delivery and performance of this Agreement, the
issuance, sale, delivery, and performance of the Notes and the Warrants, and the
reservation, issuance and delivery of the Warrant Shares upon the exercise of
the Warrants, and that all such resolutions are in full force and effect and are
all the resolutions adopted in connection with the transactions contemplated by
this Agreement; (ii) that the Charter has not been amended since the date of the
last amendment referred to in the certificate delivered pursuant to clause
(a)(ii) above; and (iii) the incumbency and specimen signature of each officer
of the Company executing this Agreement, the Notes, and the Warrants and any
certificate or instrument furnished pursuant hereto, and a certification by
another officer of the Company as to the incumbency and signature of the officer
signing the certificate referred to in this clause (b);
Section 6.2 Fees of Purchasers. The Company shall have paid, in
accordance with Article VII, the reasonable legal and other fees and
disbursements of the Purchasers, as invoiced.
Section 6.3 Warrants. The Company shall have issued and duly executed
the Warrants to the Purchasers and shall have executed a registration rights
agreement, substantially in the form set forth as Exhibit B-1 hereto.
Section 6.4 Amended and Restated Warrants. The Company shall have
duly executed and delivered the Amended and Restated Warrants, substantially in
the form of Exhibits B-2 through B-6 hereto.
Section 6.5 Interest Escrow Security Agreement. The Company shall
have duly executed the Interest Escrow Security Agreement, substantially in the
form set forth as Exhibit D hereto.
Section 6.6 Notes. Each Purchaser shall have received the Guaranteed
Senior Secured Primary Note and the Guaranteed Senior Secured Escrow Note it is
purchasing duly executed and delivered by a duly authorized officer of the
Company.
Section 6.7 Security Agreements. The Company and its Subsidiaries and
the Holders shall have duly executed and delivered the Global Security Agreement
in substantially the form of Exhibit E hereto and the Intellectual Property
Security Agreement in substantially the form of Exhibit F hereto.
Section 6.8 Pledge Agreement. The Company and its Subsidiaries shall
have duly executed and delivered a pledge agreement in substantially the form of
Exhibit G hereto.
Section 6.9 Guarantees. Each of the Subsidiaries shall have duly
executed and delivered their respective guaranty in substantially the form of
Exhibits H-1 through H-3 hereof.
Section 6.10 Pledged Stock. The Company shall have delivered to the
Holders certificates representing all issued and outstanding shares of Capital
Stock of each of the existing
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Subsidiaries, together with stock powers duly executed in blank, to be held
pursuant to the terms of the Pledge Agreement.
Section 6.11 Escrow Agreement. The Company shall have duly executed
the Funded Commitment Facility Escrow Agreement, substantially in the form of
Exhibit L annexed hereto.
Section 6.12 Financing Statements. The Company and each Subsidiary
shall have duly executed such financing statements (Form UCC-1) as shall be
requested by the Holders to perfect the security interest provided by the Global
Security Agreement and shall have taken all action reasonably requested by
Purchasers to perfect and protect the security interests created by such Form
UCC-1s.
Section 6.13 First Union Agreement. The Company shall have executed
an agreement with First Union National Bank (as successor-in-interest to
CoreStates), as amended through the date hereof containing, among other things,
a waiver of any defaults under the agreements between the Company and
Corestates, substantially in the form of Exhibit I hereto and shall have caused
CoreStates to deliver (a) an assignment of the CoreStates Warrants to the
Purchasers and (b) such UCC-3 termination notices and other releases in form and
substance satisfactory to the Purchasers terminating CoreStates' interest in the
Company's Assets.
Section 6.14 Principal Executive Officer. Xxxxx XxXxxxxx Successor
shall be the principal executive of the Company in charge of the Company's
management and policies. The Company shall obtain a "XxXxxxxx Policy" in
accordance with Section 5.10, with premiums prepaid for a period of not less
than three years from the Closing Date and shall execute and deliver an
Assignment of Life Insurance as Collateral in a form reasonably acceptable to
the Purchasers within sixty (60) days of the date hereof.
Section 6.15 Agreement with Akzo. The Company shall have duly
executed an agreement with Akzo, Organon, Holdings and PerImmune substantially
in the form of Exhibit J attached hereto amending certain terms of the
Intellectual Property Security Agreement by and among PerImmune, Organon, and
Akzo as Collateral Agent pursuant to which the Collateral Agent consents to the
granting of a second priority security interest to the Purchasers on all assets
of PerImmune in which the Collateral Agent maintains a first priority security
interest. The Company shall have delivered to the Purchasers, a confirmation
signed by the Collateral Agent that it has received the guaranty duly executed
by the Company on August 21, 1998 and that the provisions of Amendment No. 1
executed by and among Holdings, PerImmune, Akzo and Organon dated July 31, 1998
to the Akzo Agreement are of full legal force and effect as of the date hereof.
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Section 6.16 Financial Statements. The Company shall have delivered
its (a) audited consolidated financial statements as of and for the year ended
December 31, 1997, together with the notes thereto, the auditor's unqualified
report thereon and any accompanying management letter and (b) unaudited
consolidated financial statements as of and for the three months ended March 31,
1998, together with the notes thereto.
Section 6.17 Letter of Instructions. Purchasers shall have received
irrevocable instructions from the Company to direct funds to accounts maintained
pursuant to the Interest Escrow Security Agreement and the Funded Commitment
Facility Agreement.
Section 6.18 Other Actions. The Company and each Subsidiary shall
have taken all other action reasonably requested by the Purchasers desirable to
perfect and protect the security interests created by the Security Documents.
Section 6.19 No Adverse Actions. There shall be no action, suit,
complaint, investigation or proceeding pending or, to the knowledge of the
Company, threatened against the Company, or any properties or rights of the
Company, by or before any court, arbitrator or administrative or governmental
body which could reasonably be expected to result in any material adverse change
in the business, financial condition or operations of the Company taken as a
whole. There shall be no action, suit, investigation or proceeding pending or
threatened against the Company which purports to affect the validity or
enforceability of this Agreement or the Ancillary Agreements.
Section 6.20 Opinion of Counsel. The Purchasers shall have received
from Xxxxxxxx & Xxxxxxxx LLP, counsel for the Company, opinions dated the
Closing Date, in the form attached hereto as Exhibit K-1 and Exhibit K-2.
ARTICLE VII
PAYMENT FOR PURCHASE OF SECURITIES
Contemporaneously with the satisfaction of the obligations of the
Company as set forth in Article VI, each Purchaser shall transfer to the Company
such sum, and deliver the Existing Securities, as set forth opposite its name in
Column 2 and Column 3, respectively, of Schedule 2.1 hereto, as specified in
Section 2.2 of this Agreement.
ARTICLE VIII
MISCELLANEOUS
Section 8.1 Expenses. The Company will pay its own expenses and the
Purchasers' expenses in connection with the transactions contemplated hereby
whether or not such transactions shall be consummated and the Company shall pay
for all out-of-pocket costs of the Purchasers, including, without limitation (a)
legal fees incurred by Purchasers in connection with
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due diligence, documentation and closing of this transaction, and (b) the costs
of appraisals, financial reports and other documents requested by Purchasers in
connection with this transaction.
Section 8.2 Brokerage. Each party hereto will indemnify and hold
harmless any other party hereto against and in respect of any claim for
brokerage or other commissions relative to this Agreement or to the transactions
contemplated hereby, based in any way on agreements, arrangements or
understandings made or claimed to have been made by such party with any third
party.
Section 8.3 Notices. All notices, requests, consents and other
communications hereunder shall be in writing and shall be delivered in person,
or mailed by certified or registered mail, return receipt requested, or
nationwide overnight delivery service (with charges prepaid) as follows:
(a) if to the Company or any Subsidiary, at Intracel
Corporation, 0000 XX Xxxxxxxxx Xxxx, Xxxxx 000, Xxxxxxxx Xxxxxxxxxx 00000, Attn:
Chief Executive Officer, with a copy to Xxxxxx X. Xxxxxxxx, Esq., Xxxxxxxx &
Xxxxxxxx LLP, 0000 Xxxxxx xx xxx Xxxxxxxx, Xxx Xxxx, XX 00000; and
(b) if to the Purchasers, at their respective addresses set
forth on Schedule 2.1 hereto with a copy to Xxxxx Xxxxxxxxx, Esq., Reboul,
MacMurry, Xxxxxx, Xxxxxxx & Kristol, 00 Xxxxxxxxxxx Xxxxx, Xxx Xxxx, Xxx Xxxx
00000.
or, in any such case, at such other address or addresses as shall have been
furnished in writing by such party to the other. Any notice given hereunder
shall be deemed given and delivered when delivered in person, or three days
after mailing by mail or one day after delivery to an overnight express service
for next day delivery, as the case may be.
Section 8.4 Governing Law; Submission to Jurisdiction. This Agreement
shall be construed in accordance with, and governed by, the internal laws of the
State of New York as permitted by Section 5-401 of the New York General
Obligations Law (or any similar successor provision) without giving effect to
any choice of law rule that would cause the application of the Laws of any
jurisdiction other than the State of New York. The Company and each existing
Subsidiary of the Company hereby irrevocably and unconditionally:
(a) submit itself and its Subsidiaries and their respective
Assets in any legal action or proceeding relating to this Agreement and the
Ancillary Agreements to which it is a party, or for recognition and enforcement
of any judgment in respect thereof, to the general jurisdiction of the Courts of
the State of New York, the courts of the United States of America for the
Southern District of New York, and appellate courts of any thereof;
(b) consents that any such action or proceeding may be
brought in such courts and waives any objection that it may now or hereafter
have to the venue of any such action or proceeding in any such court or that
such action or proceeding was brought in an inconvenient court and agrees not to
plead or claim the same;
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(c) agrees that service of process in any such action or
proceeding may be effected by mailing a copy thereof by registered or certified
mail (or any substantially similar form of mail), postage prepaid, to it at its
address set forth in or determined pursuant to Section 8.3 or at such other
address of which the Purchasers shall have been notified pursuant thereto; and
(d) waives, to the maximum extent not prohibited by Law,
any right it may have to claim or recover in any legal action or proceeding
referred to in this Section 8.4 any punitive or exemplary damages and any
damages which are not proximately caused by or the reasonably foreseeable result
of the breach which is the subject of such action or proceeding.
The Company hereby acknowledges that:
(a) it has been advised by counsel in the negotiation,
execution and delivery of this Agreement and the Ancillary Agreements;
(b) the Purchasers do not have any fiduciary relationship
with or duty to the Company arising out of or in connection with this Agreement,
or the Ancillary Agreements; and
(c) no joint venture or partnership exists between the
Purchasers, on the one hand, and the Company, on the other hand, and the
relationship of the Company and the Purchasers is that of, inter alia, debtor
and creditor.
THE COMPANY, EACH SUBSIDIARY OF THE COMPANY AND THE PURCHASERS HEREBY
IRREVOCABLY AND UNCONDITIONALLY WAIVE TRIAL BY JURY, ANY OBJECTION BASED ON
FORUM NON CONVENIENS OR VENUE IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS
AGREEMENT, THE ANCILLARY AGREEMENTS AND FOR ANY COUNTERCLAIM THEREIN.
THIS AGREEMENT AND THE ANCILLARY AGREEMENTS REPRESENT THE FINAL
AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.
THERE ARE NO UNWRITTEN ORAL AGREEMENTS OF THE PARTIES.
THE COMPANY WILL CAUSE EACH NEW SUBSIDIARY TO TAKE SUCH ACTION AS IS
REQUIRED TO CONSENT TO, AND BE BOUND BY, THE PROVISIONS OF THIS SECTION 8.4 IN
ITS ENTIRETY.
Section 8.5 Entire Agreement. This Agreement, including the Schedules
and Exhibits hereto and the Ancillary Agreements, constitutes the sole and
entire agreement of the parties with respect to the subject matter hereof. All
Schedules and Exhibits hereto are hereby incorporated herein by reference.
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Section 8.6 Counterparts. This Agreement may be executed in
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument. This Agreement shall not
be effective unto duly executed by each and every party hereto.
Section 8.7 Amendments. This Agreement may not be amended or modified
and no provisions hereof may be waived, without the written consent of the
Company, each Subsidiary and each Purchaser. However, this Agreement may be
amended, and the Company may take any action herein prohibited, or omit to
perform any act herein required to be performed by it, if the Company shall
obtain the written consent to such amendment, action or omission to act, of the
Required Holders, except that, without the prior written consent of one hundred
percent (100%) of the Purchasers, no amendment to this Agreement shall change
the maturity of any Note, or change the principal of, or the rate or time of
payment of interest on any Note, or affect the time, amount or allocation of any
prepayments, change the proportion of the principal amount of the Notes required
with respect to any consent, amendment, waiver or declaration, amend, modify or
waive any provision of this Section 8.7, change the percentage specified in the
definition of Required Holders or consent to the assignment or transfer by the
Company or any of its Subsidiaries of their respective rights and obligations
under this Agreement or the Ancillary Agreements. Each Purchaser of the Notes
shall be bound by any consent authorized by this Section 8.7 whether or not such
Note shall have been marked to indicate such consent, but any Notes issued
thereafter may bear notation referring to any such consent. Any amendment or
waiver of any provision of any Note shall be effective only for the purposes and
period of time expressly set forth therein and shall not entitle the Company to
any other waiver or amendment in similar or other circumstances. No course of
dealing between the Company and any Purchaser of any Note, nor any failure to
exercise or any delay in exercising on the part of the holder of any Note any
right, remedy, power or privilege under any Note shall or operate as a waiver
thereof; nor shall any single or partial exercise of any right, remedy, power or
privilege under any Note preclude any other right, remedy, power or privilege.
The rights, remedies, powers and privileges under the Notes are cumulative and
not exclusive of any rights, remedies, powers and privileges provided by Law. As
used herein and in the Notes, the term "this Agreement and the Ancillary
Agreements" and references thereto shall mean this Agreement and the Ancillary
Agreements as they may from time to time be amended or supplemented.
Section 8.8 Disclosure to Other Persons. The Company hereby
authorizes any of the Purchasers of the Notes to deliver copies of any financial
statements and other documents delivered to such Purchaser, and disclose any
other information disclosed to such Purchaser, by or on behalf of the Company or
any Subsidiary in connection with or pursuant to this Agreement or the Ancillary
Agreements to (a) such Purchaser's directors, officers, employees, agents and
professional consultants, (b) any other Purchaser of any Note, (c) any Person to
which such Purchaser offers to sell such Note or any part thereof, (d) any
Person to which such Purchaser sells or offers to sell a participation in all or
any part of such Note, (e) any Person from which such Purchaser offers to
purchase any security of the Company, (f) any federal or state regulatory
authority having jurisdiction over such Purchaser, or (g) any other Person to
which such delivery or disclosure may be necessary or appropriate (i) in
compliance with any Law applicable to such Purchaser, (ii) in response to any
subpoena or other legal process or informal investigative
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demand or (iii) in connection with any litigation to which such Purchaser is a
party. Notwithstanding the foregoing, except as provided in clauses (f) and (g)
above, the Purchasers agree that they shall not disclose any information learned
or received by them in connection with the negotiation, execution, delivery and
performance of this Agreement or the Ancillary Agreements to any Person that
directly competes or may reasonably be expected to directly compete with any
business of the Company.
Section 8.9 Limitation on Interest. The Company and each Purchaser
intends to comply with applicable usury Laws from time to time in effect. At no
time shall the interest rate payable on the Notes exceed the maximum rate of
interest, if any, that at any time or from time to time may be contracted for,
taken, charged or received on the Notes or on any amount which may be owing to
the Purchasers of the Notes under the Laws applicable to such Purchasers of
Notes and this transaction. In the event that the interest rate payable on the
Notes shall exceed the maximum rate of interest allowable under applicable usury
Laws, then the rate of interest shall automatically be reduced to the maximum
rate permitted by Law.
Section 8.10 Severability. If any provision of this Agreement shall
be declared void or unenforceable by any judicial or administrative authority,
the validity of any other provision and of the entire Agreement shall not be
affected thereby.
Section 8.11 Titles and Subtitles. The titles and subtitles used in
this Agreement are for convenience only and are not to be considered in
construing or interpreting any term or provision of this Agreement.
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IN WITNESS WHEREOF, the Company, the Subsidiaries and the Purchasers
have executed this Agreement as of the day and year first above written.
INTRACEL CORPORATION
By: /s/ XXXXX X. XxXXXXXX
--------------------------------------
Name: Xxxxx X. XxXxxxxx
Title: President and Chief
Executive Officer
XXXXXXX, INC.
By: /s/ XXXXX X. XxXXXXXX
--------------------------------------
Name: Xxxxx X. XxXxxxxx
Title: President and Chief
Executive Officer
PERIMMUNE HOLDINGS, INC.
By: /s/ XXXXX X. XxXXXXXX
--------------------------------------
Name: Xxxxx X. XxXxxxxx
Title: President and Chief
Executive Officer
PERIMMUNE, INC.
By: /s/ XXXXX X. XxXXXXXX
--------------------------------------
Name: Xxxxx X. XxXxxxxx
Title: President and Chief
Executive Officer
NORTHSTAR HIGH YIELD FUND
By: /s/ XXXXXXX X. XXXXXX
--------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Vice President
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NORTHSTAR HIGH TOTAL RETURN FUND
By: /s/ XXXXXXX X. XXXXXX
--------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Vice President
NORTHSTAR HIGH TOTAL RETURN FUND II
By: /s/ XXXXXXX X. XXXXXX
--------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Vice President
NORTHSTAR STRATEGIC INCOME FUND
By: /s/ XXXXXXX X. XXXXXX
--------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Vice President
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EXHIBIT A-1
GUARANTEED SENIOR SECURED PRIMARY NOTE
59
THIS PROMISSORY NOTE HAS NOT BEEN REGISTERED OR QUALIFIED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS. IT MAY NOT BE SOLD,
OFFERED FOR SALE OR OTHERWISE TRANSFERRED UNLESS REGISTERED UNDER SUCH ACT OR IN
COMPLIANCE WITH ANY EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF SUCH ACT, IN
EACH CASE IN ACCORDANCE WITH ANY APPLICABLE STATE SECURITIES LAWS.
THIS NOTE HAS BEEN ISSUED WITH ORIGINAL ISSUE DISCOUNT FOR U.S. FEDERAL INCOME
TAX PURPOSES. FOR FURTHER INFORMATION, CONTACT: XXXXXXXX & XXXXXXXX LLP, 0000
XXXXXX XX XXX XXXXXXXX, XXX XXXX, XXX XXXX 00000, ATTN: XXXXXX X. XXXXXXXX, ESQ.
INTRACEL CORPORATION
12% GUARANTEED SENIOR SECURED PRIMARY PROMISSORY NOTE
August 25, 1998 $3,841,463
FOR VALUE RECEIVED, INTRACEL CORPORATION, a Delaware corporation (the
"Company"), hereby promises to pay to the order of NORTHSTAR HIGH YIELD FUND its
successors or assigns (the "Noteholder"), the Principal Amount (as defined
below) payable on August 25, 2003 (the "Principal Payment Date") with interest
payable pursuant to Section 2. Capitalized terms used in this Note have the
meanings provided in Section 11. All capitalized terms not otherwise defined
herein shall have the meanings set forth in the Securities Purchase Agreement
dated the date hereof by and among the Company and the other parties thereto
(including this Noteholder) (the "Securities Purchase Agreement").
SECTION 1. Payments of Principal.
(a) Prior Loans. The Company issued to the Noteholder or
Affiliates of the Noteholder certain Senior Secured Promissory Notes dated
December 28, 1995 and certain Promissory Notes dated April 1, 1998, as amended,
in the aggregate principal amount of $16,800,000, and, in connection therewith,
granted certain other rights to the Noteholder to acquire shares of the
Company's Capital Stock (such Notes and rights collectively referred to herein
as the "Existing Securities"). The Noteholder or its Affiliates have agreed to
contribute the Existing Securities and pay additional consideration as set forth
in the Securities Purchase Agreement to purchase $3,841,463 these Guaranteed
Senior Secured Primary Promissory Notes (the "Guaranteed Senior Secured Primary
Notes") on the terms and conditions set forth herein.
(b) Principal Amount. On August 25, 1998 (the "Closing Date"),
the Noteholder purchased this Note for Three Million Three Hundred Forty-One
Thousand Seven Hundred Thirty-Eight Dollars ($3,341,738) pursuant to the
Securities Purchase Agreement and
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the principal amount of this Note is Three Million Eight Hundred Forty-One
Thousand Four Hundred Sixty-Three Dollars ($3,841,463) (the "Principal Amount").
(c) Principal Payment Date. Subject to earlier redemption or
prepayment as provided herein, the Principal Amount of this Guaranteed Senior
Secured Primary Note and all other theretofore unpaid amounts due hereunder
shall be due and payable on the Principal Payment Date.
(d) Prepayment. (i) The Noteholder, at its option, may require
the Company to prepay this Guaranteed Senior Secured Primary Note in whole or in
part, not later than five (5) Business Days after notice of prepayment is
delivered to the Company, pursuant to Section 1(d)(ii) hereof, at a price equal
to 101% of the principal amount so prepaid, plus accrued interest to the date of
prepayment, if:
(A) there is a Change of Control of the Company,
or
(B) (x) Xxxxx X. XxXxxxxx ("XxXxxxxx") shall
cease at any time for whatever reason to be
the principal executive officer of the
Company in charge of the Company's
management and policies for a period of
thirty (30) days or more and (y) the
Required Holders, in the reasonable exercise
of their discretion, shall not have approved
the successor to XxXxxxxx (the "XxXxxxxx
Successor") within 180 days after the
cessation by XxXxxxxx of his full time
service to the Company; and
(ii) the notice of prepayment delivered by the Noteholder
to the Company upon occurrence of the event(s) described in this Section
1(d) shall specify the event requiring such prepayment and the amount of
such prepayment.
(e) Mandatory Redemption in the Event of the Sale of Assets, Debt
or Equity Securities. Commencing on or after the date of this Guaranteed Senior
Secured Primary Note, if at any time or from time to time, the Company or any of
its Subsidiaries receives cash proceeds (the "Net Cash Proceeds") from the sale
of its debt or equity securities or from Asset Sale Excess Proceeds (as defined
in the Securities Purchase Agreement) for sales of property under Section
5.18(c) of the Securities Purchase Agreement, all of the Net Cash Proceeds or
Asset Sale Excess Proceeds, as applicable, from such sale shall be utilized to
(i) pay all accrued unpaid past due interest on all Notes and all accrued unpaid
interest on the principal amount of the Notes actually redeemed pursuant to this
Section 1(e), all through the date of redemption; and (ii) to redeem this Note
in accordance with the terms set forth in the notice of redemption attached
hereto as Exhibit A (the "Notice of Redemption"). On the date of receipt of Net
Cash Proceeds from the sale of debt or equity securities or the receipt of Asset
Sale Excess Proceeds, as applicable (the "Funding Date"), an amount equal to the
lesser of all Net Cash Proceeds or Asset Sale Excess Proceeds, as applicable, or
$5,000,000 shall be held in constructive trust by the Company, as trustee for
the benefit of Holders who shall be entitled to disbursement of such funds in
accordance with this Section 1(e). On the Funding Date, the Company shall
forward to each
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Noteholder by facsimile transmission and by overnight courier, a Notice of
Redemption. Each Noteholder shall select one of the four redemption options set
forth on such notice and return by facsimile or overnight courier the executed
Notice of Redemption to the Company by the close of business on the fifth
Business Day following the Funding Date. If an executed Notice of Redemption has
not been delivered to the Company by the close of business on such date, the
Noteholder shall be deemed to have elected Redemption Option A in Section 2 of
the Notice of Redemption. The Company shall prepay the Guaranteed Senior Secured
Primary Notes, in accordance with the provisions of the Notice of Redemption, on
the seventh Business Day following the Funding Date. Any Notice of Redemption
forwarded pursuant to this provision shall be irrevocable. Notwithstanding
anything in this Guaranteed Senior Secured Primary Note to the contrary, (i) the
Company shall have no obligation to make any payments under this Section 1(e)
which result from the sale of debt or equity securities pursuant to the exercise
(or series of related exercises) of employee stock options not exceeding
$250,000; (ii) the Company shall have no obligation to make payments pursuant to
this Section 1(e) in excess of $5,000,000 in the aggregate, and (iii) the
Company shall have no obligation to make payments under this Section 1(e) which
result from proceeds received from Transamerica Business Credit Corporation (as
a result of a financing guaranteed by a bond posted by the State of Washington
Economic Development Council), provided, and to the extent that, such proceeds
are utilized to purchase equipment for the Company or its Subsidiaries.
(f) EBITDA Required Redemptions
(i) For purposes of this provision, the terms set forth
below shall have the following meanings:
(A) "EBITDA Measurement Date" shall mean each of
March 31, 2000, June 30, 2000 and September
30, 2000.
(B) "EBITDA Ratio" shall mean the ratio of the
Company's EBITDA to the Company's Interest
Expense for each of the quarters ended March
31, 2000, June 30, 2000 and September 30,
2000 as follows:
Quarter Ended EBITDA Ratio
------------- ------------
March 31, 2000 3:1
June 30, 2000 4:1
September 30, 2000 5:1
(C) "EBITDA" means with reference to any
Measurement Period, the consolidated
operating income of the Company and its
Subsidiaries, plus the amount of all
depreciation and amortization deducted in
determining the amount of such operating
income, all as determined on a consolidated
basis in accordance with GAAP applied on a
basis consistent
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with the Audited Financial Statements of the
Company delivered pursuant to Section 6.16
of the Securities Purchase Agreement.
(D) "Interest Expense" means, for any
Measurement Period, the sum, in accordance
with GAAP, of (i) all interest on Debt that
is paid or accrued as an expense during such
period (including without limitations,
imputed interest under Capitalized Lease
Obligations (as defined in the Securities
Purchase Agreement), plus (ii) all amounts
paid, accrued or ---- amortized as an
expense during such period in respect of
interest rate protection agreements minus,
(iii) all amounts received or accrued as
income during such period in respect of
interest rate protection agreements.
(E) "Measurement Period" means any quarterly
period ending on an EBITDA Measurement Date.
(F) "Notice of EBITDA Redemption" means the
Noteholder's demand for payment by the
Company at the Pro Rata Redemption Price of
its Pro Rata Redemption Amount as set forth
in Exhibit B attached hereto.
(G) "Pro Rata Redemption Amount" means the
product of (i) a fraction, the numerator of
which is the Principal Amount of this
Guaranteed Senior Secured Primary Note and
the denominator is the aggregate Principal
Amount of all Notes initially Outstanding
pursuant to the Securities Purchase
Agreement, multiplied by (ii) the Quarterly
Redemption Amount.
(H) "Pro Rata Redemption Price" means the Pro
Rata Redemption Amount, plus accrued unpaid
interest thereon to the date of redemption.
(I) "Quarterly Redemption Amount" means
$2,500,000 for each of the quarters ended
March 30, 2000, June 30, 2000 and September
30, 2000.
(J) "Report Date" shall mean thirty (30) days
after an EBITDA Measurement Date.
(K) "Total Redemption Amount" means $7,500,000.
(ii) Unless the Company is in compliance with the EBITDA
Ratio on each EBITDA Measurement Date, the Noteholder, at its option,
may demand, by sending
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a Notice of EBITDA Redemption, that the Company redeem the Pro Rata
Redemption Amount of the Guaranteed Senior Secured Primary Note at the
Pro Rata Redemption Price for each EBITDA Measurement Date on which the
Company fails to comply with the applicable EBITDA Ratio. The
Noteholder's right to redemption under this Section 1(f) is subject to
the following provisions:
(A) The Company shall deliver a certificate to
the Noteholder not later than each Report
Date (the "EBITDA Ratio Certificate"), which
sets forth, with reference to the applicable
EBITDA Measurement Date: (i) EBITDA and
Interest Expense; (ii) the EBITDA Ratio; and
(iii) a statement to the effect that the
Company has either satisfied the EBITDA
Ratio or has failed to satisfy the EBITDA
Ratio for such EBITDA Measurement Date. In
the event that the Company has failed to
meet or exceed the EBITDA Ratio applicable
to such Measurement Date (or, the Company
fails to deliver the EBITDA Ratio
Certificate to the Noteholder on or prior to
the Report Date), the Noteholder shall have
the right to demand payment to it of the Pro
Rata Redemption Amount at a price equal to
the Pro Rata Redemption Price within five
(5) Business Days after a Notice of EBITDA
Redemption is delivered by the Noteholder to
the Company.
(B) Notwithstanding the provisions of
1(f)(ii)(A) above, in the event the Company
fails to comply with the EBITDA Ratio
applicable to an EBITDA Measurement Date,
the Noteholder shall be deemed to have
waived its right to redemption arising from
such failure to comply (the "Waiver of
Payment") if both of the following
conditions are met: (i) a subsequent
quarterly certificate delivered to the
Noteholder pursuant to this Section 1(f) or
Section 5.12 of the Securities Purchase
Agreement certifies that the EBITDA Ratio
(or the EBITDA to Interest Ratio) certified
thereby meets or exceeds the EBITDA Ratio
applicable to the EBITDA Measurement Date
giving rise to the Noteholder's right of
redemption hereunder; and (y) the Noteholder
has not delivered its Notice of EBITDA
Redemption to the Company respecting such
EBITDA Measurement Date prior to receiving
such subsequent certificate.
(iii) Any Waiver of Payment with respect to an EBITDA
Measurement Date shall not constitute or be construed as a Waiver of
Payment with respect to any other EBITDA Measurement Date.
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(iv) Subject to the provisions of Section 1(f)(ii)(B)
above, the Noteholder's rights to demand and receive the Pro Rata
Redemption Amount at the Pro Rata Redemption Price under this Section
1(f) are cumulative.
(v) The Pro Rata Redemption Price shall be paid by wire
transfer of immediately available funds.
(vi) Notwithstanding anything herein to the contrary, the
Company shall not be required to redeem more than the Total Redemption
Amount plus unpaid and accrued interest to the dates of redemption,
pursuant to this Section 1(f).
(g) Optional Prepayment. This Guaranteed Senior Secured Primary
Note may be prepaid at the option of the Company at any time, in part or in full
together with accrued interest through the date of prepayment on the principal
amount, prepaid. Any prepayment (other than a payment pursuant to Section 1(e)
or Section 1(f)) made prior to July 31, 2002, shall include amounts equal to the
following increases in the principal amount to be prepaid:
--------------------------------------------------------------------------------
If Prepaid
During the Percentage
12-month period of Principal
beginning and ending: Amount Prepaid
--------------------------------------------------------------------------------
August 1, 1999 - July 31, 2000 112%
August 1, 2000 - July 31, 2001 108.0%
August 1, 2001 - July 31, 2002 104.0%
Thereafter 100.0%
--------------------------------------------------------------------------------
SECTION 2. Payments of Interest.
(a) Interest Rate. Except as otherwise expressly provided in
Section 6(b), interest shall accrue from the Closing Date at the rate of twelve
percent (12%) per annum on the Unpaid Principal Amount, provided, however, that,
in the event the Company does not comply with the covenant set forth in Section
5.26 of the Securities Purchase Agreement within the sixty (60) day period set
forth therein, interest shall accrue from the expiration of the sixty (60) day
period until such covenant has been satisfied, at the Default Interest Rate. All
computations of interest shall be made on the basis of a year of three hundred
and sixty (360) days for the actual number of days including the first day but
excluding the last day for which any interest period is calculated.
(b) Interest Payment Date. All accrued and unpaid interest shall
be payable quarterly in arrears on each Interest Payment Date beginning on
November 25, 1998.
(c) Interest Escrow Security Agreement for Certain Interest
Payments. To secure the Company's obligations to make certain interest payments
pursuant to this Guaranteed Senior Secured Primary Note, the Company has
executed an interest escrow security agreement
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as of the date hereof (the "Interest Escrow Security Agreement"), pursuant to
which the Company has agreed to deposit funds into and restrict withdrawals from
an account for the benefit of the Noteholder and to make additional
contributions as described in the Interest Escrow Security Agreement. The
Company will make interest payments, and in certain circumstances principal and
other payments, in accordance therewith.
SECTION 3. Covenants.
The Company hereby agrees that, so long as any amount is owing to the
Noteholder, it shall and shall cause its Subsidiaries to perform the covenants
set forth in Article V of the Securities Purchase Agreement.
SECTION 4. Guaranties.
The performance of the Company's obligations under the Securities Purchase
Agreement, this Guaranteed Senior Secured Primary Note, all Notes issued
pursuant to the Securities Purchase Agreement and the Ancillary Agreements (the
"Obligations") has been unconditionally guaranteed by the Company's Subsidiaries
(the "Guaranties") as set forth in the Guaranty Agreements executed as of the
date hereof.
SECTION 5. Security.
This Guaranteed Senior Secured Primary Note and all other Notes issued
pursuant to the Securities Purchase Agreement represent Senior Secured Debt of
the Company. The performance of the Company's Obligations and the Guaranties
relating to the Obligations are secured by certain Collateral as set forth in
the Security Documents.
SECTION 6. Events of Default.
(a) Definition. For purposes of this Guaranteed Senior Secured
Primary Note, an Event of Default shall have occurred and shall be deemed to
have occurred if:
(i) the Company shall fail to pay any principal when due
in accordance with the terms hereof; or
(ii) the Company shall fail to pay any interest or any
other amount payable hereunder or under the Securities Purchase
Agreement or any of the Ancillary Agreements when due in accordance with
their respective terms by a date which is five calendar days after such
interest or other amount payable hereunder is due and payable in
accordance with the terms hereof; or
(iii) any representation or warranty made or deemed made
by the Company in the Securities Purchase Agreement, the Ancillary
Agreements or any written document furnished in connection with or
pursuant to such Agreements shall prove to have been incorrect in any
material respect on or as of the date made or deemed made; or
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66
(iv) the Company shall have failed to comply with the
covenant set forth in Section 5.26 of the Securities Purchase Agreement
within 180 days from the date hereof or the Company or any Subsidiary
shall default in the observance or performance of any other agreement
contained in this Guaranteed Senior Secured Primary Note, the Securities
Purchase Agreement or any of the Ancillary Agreements; or
(v) the Company or any Subsidiary (whether as primary
obligor or as a guarantor or other surety) shall (A) default in any
payment of principal of or interest on any Debt (after giving effect to
any applicable grace period); or (B) default in the observance or
performance of any other agreement or condition relating to any such
Debt or any Guarantee Obligation or contained in any instrument or
agreement evidencing, securing or relating thereto, or any other event
shall occur or condition exist, the effect of which default or other
event or condition is to give the Holder thereof the right to cause such
Debt to become due prior to its stated maturity or such Guarantee
Obligation to become payable (whether by the terms of any document
evidencing such Debt or Guarantee Obligation, upon the election of any
Holder of Debt or beneficiary of any Guarantee Obligation or otherwise);
provided, that the aggregate amount of all obligations as to which such
payment Default shall occur and be continuing or other event causing or
permitting acceleration thereof exceeds $500,000; or
(vi) (A) the Company or any Subsidiary shall commence any
case, proceeding or other action (1) under any existing or future Law of
any jurisdiction, domestic or foreign, relating to bankruptcy,
insolvency, reorganization or relief of debtors, seeking to have an
order for relief entered with respect to it, or seeking to adjudicate it
a bankrupt or insolvent, or seeking reorganization, arrangement,
adjustment, winding-up, liquidation, dissolution, composition or other
relief with respect to it or its debts, or (2) seeking appointment of a
receiver, trustee, custodian, conservator or other similar official for
it or for all or any substantial part of its Assets, or the Company
shall make a general assignment for the benefit of its creditors; or (B)
there shall be commenced against the Company any case, proceeding or
other action of a nature referred to in clause (A) above which (1)
results in the entry of an order for relief or any such adjudication or
appointment or (2) remains undismissed, undischarged or unbonded for a
period of sixty (60) days; or (C) there shall be commenced against the
Company any case, proceeding or other action seeking issuance of a
warrant of attachment, execution, distraint or similar process against
all or any substantial part of its Assets which results in the entry of
an order for any such relief which shall not have been vacated,
discharged, or stayed or bonded pending appeal within sixty (60) days
from the entry thereof; or (D) the Company shall take any action in
furtherance of, or indicating its consent to, approval of, or
acquiescence in, any of the acts set forth in clause (A), (B) or (C)
above; or (E) the Company shall generally not, or shall be unable to, or
shall admit in writing its inability to, pay its debts as they become
due; or
(vii) one or more final judgments or decrees shall be
entered against the Company or any Subsidiary involving in the aggregate
a liability (not paid or fully covered by insurance) of two hundred
fifty thousand dollars ($250,000) or more; or
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(viii) any judgment or decree is entered in any
proceedings against the Company or any Subsidiary decreeing a split-up
of the Company or such Subsidiary which requires the divestiture of
Assets representing more than 33 1/3%, or the divestiture of the stock
of a Subsidiary whose Assets represent more than 33 1/3%, of the
consolidated Assets of the Company and its Subsidiaries (determined in
accordance with GAAP) or which requires the divestiture of Assets, or
stock of a Subsidiary, which shall have contributed more than 33 1/3%
of the consolidated net income of the Company and its Subsidiaries
(determined in accordance with GAAP) during the three fiscal years then
most recently ended, and such order, judgment or decree remains unstayed
and in effect for more than 120 days; or
(ix) the Company or any Community Controlled Entity, in
its capacity as an employer under a Multiemployer Plan, makes a complete
or partial withdrawal from such Multiemployer Plan resulting in the
incurrence by such withdrawing employer of a withdrawal liability in an
amount exceeding $500,000; or
(x) the Company shall have not consummated on or prior to
August 25, 1999 a sale of its Common Stock, whether in a public offering
registered under the Securities Act or otherwise, which sale has an
aggregate offering price of not less than $40,000,000 and results in
aggregate proceeds to the Company (net of selling expenses and
underwriter's discount or selling agent's commission) of not less than
$35,000,000; or
(xi) (A) the Securities Purchase Agreement or any
Ancillary Agreement entered into on or after the date hereof shall cease
in any material respect, for any reason, to be in full force and effect
or the Company or any subsidiary shall assert that any of such
Agreements has ceased in any material respect to be in full force and
effect, (B) the Liens created by any Security Documents shall cease, in
any material respect, for any reason other than a release executed and
delivered by each Holder of the Notes, to be enforceable and of the same
effect and first priority purported to be created thereby (unless
otherwise contemplated thereby), or (C) any breach, default or event of
default occurs under any Securities Purchase Agreement or any Ancillary
Agreement and the same is not remedied within the applicable period of
grace (if any) provided in such Agreement; or
(xii) the Company shall fail to prepay the Guaranteed
Senior Secured Primary Note in accordance with the terms of Section 1(d)
hereof; or
(xiii) the Company shall fail to redeem the Guaranteed
Senior Secured Primary Note in accordance with the terms of Section 1(e)
hereof; or
(xiv) the Company shall fail to pay any amounts under
Section 1(f) hereof.
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(b) Consequences of Events of Default.
(i) When any Event of Default has occurred and is
continuing, the interest rate on this Guaranteed Senior Secured Primary
Note shall increase to the Default Interest Rate. Any increase of the
interest rate resulting from the operation of this clause shall
terminate as of the close of business on the date on which no Events of
Default exist (subject to subsequent increases pursuant to this clause),
provided, however, that nothing herein shall prevent subsequent
increases of the interest rate to the Default Interest Rate upon any
subsequent Defaults or Events of Default by the Company.
(ii) If an Event of Default of the type described in
Section 6(a)(vi) has occurred, the aggregate principal amount of this
Guaranteed Senior Secured Primary Note (together with all accrued
interest thereon and all other amounts due and payable with respect
thereto) shall become immediately due and payable without any action on
the part of the Noteholder, and the Company shall immediately pay to the
Noteholder all amounts due and payable hereunder.
(iii) If any Event of Default has occurred (other than
under Section 6(a)(vi)), the Noteholder may declare this Guaranteed
Senior Secured Primary Note to be immediately due and payable and may
demand immediate payment of the Unpaid Principal Amount (together with
all accrued and unpaid interest and all other amounts due and payable
with respect thereto).
(iv) If any Event of Default or Default shall occur and be
continuing, the Holder of any Guaranteed Senior Secured Primary Note may
proceed to protect and enforce its rights under the Guaranteed Senior
Secured Primary Note and the Securities Purchase Agreement by exercising
such remedies as are available to such Holder in respect thereof, under
applicable Law, whether for specific performance of any covenant or
other agreement contained in this Guaranteed Senior Secured Primary Note
or otherwise; no remedy is intended to be exclusive of any other remedy,
and each and every such remedy shall be cumulative and shall be in
addition to every other remedy conferred herein or now or hereafter
existing at Law or in equity or by statute or otherwise.
(v) If an Event of Default or Default shall occur and be
continuing, payments by the Company of amounts due to the Noteholder
shall be made in the following order or priority:
(A) all accrued unpaid past due interest on the
Notes issued pursuant to the Securities
Purchase Agreement;
(B) all accrued unpaid interest due on the Notes
issued pursuant to the Securities Purchase
Agreement and the Ancillary Agreements;
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(C) all accrued unpaid and past due amounts
pursuant to the Securities Purchase
Agreement and the Ancillary Agreements;
(D) all other accrued unpaid amounts pursuant to
the Securities Purchase Agreement and the
Ancillary Agreements; and
(E) the principal amount due under the Notes.
(c) Rescission of Acceleration. At any time after any or all of
the Guaranteed Senior Secured Primary Notes shall have been declared immediately
due and payable pursuant to subsection (b), the Required Holders may, by notice
in writing to the Company, rescind and annul such declaration and its
consequences if (i) the Company shall have paid all overdue interest on the
Guaranteed Senior Secured Primary Notes, the principal of any Guaranteed Senior
Secured Primary Notes which have become due otherwise than by reason of such
declaration, and interest on such overdue interest and overdue principal at the
rate specified in the Guaranteed Senior Secured Primary Notes, (ii) the Company
shall have paid any amounts which have become due solely by reason of such
declaration, (iii) all Events of Default and Defaults, other than non-payment of
amounts which have become due solely by reason of such declaration, shall have
been cured or waived and (iv) no judgment or decree shall have been entered for
the payment of any amounts due pursuant to the Guaranteed Senior Secured Primary
Notes. No such rescission or annulment shall extend to or affect any subsequent
Event of Default or Default or impair any right arising therefrom.
(d) Notice of Acceleration or Rescission. Whenever any Guaranteed
Senior Secured Primary Note shall be declared immediately due and payable
pursuant to subsection (b) or any such declaration shall be rescinded and
annulled pursuant to subsection (c), the Company shall forthwith give written
notice thereof to each Holder of Guaranteed Senior Secured Primary Notes at the
time outstanding.
SECTION 7. Waiver of Certain Rights. The Company hereby waives
diligence, presentment, protest and demand and notice of protest and demand,
dishonor and nonpayment of this Guaranteed Senior Secured Primary Note, and
expressly agrees that this Guaranteed Senior Secured Primary Note, or any
payment hereunder, may be extended from time to time and that the Holder hereof
may accept security for this Guaranteed Senior Secured Primary Note or release
security for this Guaranteed Senior Secured Primary Note, all without in any way
affecting the liability of the Company hereunder.
SECTION 8. Transfer of this Guaranteed Senior Secured Primary Note. Upon
surrender for registration of transfer of this Guaranteed Senior Secured Primary
Note at the principal office of the Company, the Company shall, execute and
deliver one or more new Guaranteed Senior Secured Primary Notes of like tenor
and of like aggregate principal amount, registered in the name of such
transferee or transferees and or the Noteholder, as the case may be. At the time
this Guaranteed Senior Secured Primary Note is surrendered for registration of
transfer, it shall be duly endorsed, or be accompanied by a written instrument
of transfer duly executed, by the Noteholder or such Holder's attorney duly
authorized in writing. Any
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Guaranteed Senior Secured Primary Note or Guaranteed Senior Secured Primary
Notes issued upon transfer of this Guaranteed Senior Secured Primary Note shall
carry the rights to unpaid interest and the accrual of interest which were
carried by this Guaranteed Senior Secured Primary Note, so that neither gain nor
loss of interest shall result from any such transfer. In the event that the
Holder shall transfer less than the full amount of the Note, the Company shall
execute and deliver a replacement Note of like tenor for the balance of the
amount of the Note due to Holder. In addition, on receipt of evidence reasonably
satisfactory to the Company of the loss, theft, destruction or mutilation of
this Note and, in the case of any such loss, theft or destruction of this Note,
and delivery of an indemnity agreement or security reasonably satisfactory in
form and amount to the Company in the case of such mutilation, on delivery and
cancellation of this Note, the Company at its expense, will execute and deliver
in lieu thereof, a replacement Note of like tenor.
SECTION 9. Assignment. The rights and obligations of the Company and the
Noteholder shall be binding upon and benefit the permitted successors, assigns
and transferees of the parties; provided that (i) in no event shall the Company
assign its rights hereunder without the prior written consent of the Noteholder,
(ii) the Noteholder may sell, assign, convey, or otherwise transfer this
Guaranteed Senior Secured Primary Note with the consent of the Company, which
consent will not be unreasonably withheld, (iii) notwithstanding Section 9(ii),
the Noteholder may at all times, without the consent of the Company, sell,
assign, convey or otherwise transfer this Guaranteed Senior Secured Primary Note
to an Affiliate of the Noteholder and (iv) the Noteholder may, at all times,
sell, convey or otherwise transfer this Guaranteed Senior Secured Promissory
Note to a Qualified Institutional Buyer or an Accredited Investor, without the
consent of the Company if, after the proposed transfer, the aggregate unpaid
principal amount of all Notes then held by the Noteholder and its Affiliates,
exceeds $10,000,000.
SECTION 10. Amendment and Waiver. Except as otherwise expressly provided
herein, the provisions of this Guaranteed Senior Secured Primary Note may be
amended and the Company may take any action herein prohibited, or omit to
perform any act herein required to be performed by it, only if the Company has
obtained the written consent of the Required Holders. No failure or delay on the
part of the Noteholder in exercising any power or right under this Guaranteed
Senior Secured Primary Note shall operate as a waiver thereof, nor shall any
single or partial exercise of any such power or right preclude any other or
further exercise thereof or the exercise of any other power or right.
SECTION 11. Definitions. For purposes of this Guaranteed Senior Secured
Primary Note, the following capitalized terms have the following meaning:
"Accredited Investor" has the meaning set forth in Rule 501 of
Regulation D promulgated under the Securities Act.
"Affiliate" means, with reference to a specified person or
entity, any person or entity that directly or indirectly through one or more
intermediaries controls or is controlled by or is under common control with the
specified person or entity. For purposes of this definition, "control"
(including, with correlative meaning, the terms "controlled by" and "under
common control
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with"), as used with respect to any person or entity, shall mean the possession,
directly or indirectly, of the power to direct or cause the direction of the
management and policies of such person or entity, whether through the ownership
of voting securities or by contract or otherwise.
"Business Day" has the meaning specified in Section 1.1 of the
Securities Purchase Agreement.
"Capital Lease Obligation" has the meaning specified in Section
1.1 of the Securities Purchase Agreement.
"Change in Control" has the meaning specified in Section 1.1 of
the Securities Purchase Agreement.
"Closing Date" is defined in Section 1(a).
"Code" means the Internal Revenue Code of 1986, as amended, or
any successor statute thereto.
"Common Stock" means the common stock of the Company.
"Commonly Controlled Entity" means an entity, whether or not
incorporated, which is under common control with the Company within the meaning
of Section 4001 of ERISA or is part of a group which includes the Company and
which is treated as a single employer under Section 414 of the Code.
"Company" is defined in the preamble.
"Debt" has the meaning specified in Section 1.1 of the Securities
Purchase Agreement.
"Default" means any of the events specified in Section 6, whether
or not any requirement for the giving of notice, the lapse of time, or both, or
any other condition, has been satisfied.
"Default Interest Rate" means a rate of interest equal to fifteen
percent (15%) per annum.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time.
"Event of Default" means each of the events described in Section
6; provided, however, that any requirement for the giving of notice, the lapse
of time, or both, or any other condition, has been satisfied.
"GAAP" has the meaning specified in Section 1.1 of the Securities
Purchase Agreement.
"Governmental Authority" means any nation or government, any
state or other political subdivision thereof and any entity exercising
executive, legislative, judicial, regulatory or administrative functions of or
pertaining to government.
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"Guarantee Obligation" means as to any Person (the "guaranteeing
person"), any obligation of (a) the guaranteeing person or (b) another Person
(including, without limitation, any bank under any letter of credit) to induce
the creation of which the guaranteeing person has issued a reimbursement,
counterindemnity or similar obligation, in either case guaranteeing or in effect
guaranteeing any Debt, leases, dividends or other obligations (the "primary
obligations") of any other third Person (the "primary obligor") in any manner,
whether directly or indirectly, including, without limitation, any obligation of
the guaranteeing person, whether or not contingent, (i) to purchase any such
primary obligation or any property constituting direct or indirect security
therefor, (ii) to advance or supply funds (1) for the purchase or payment of any
such primary obligation or (2) to maintain working capital or equity capital of
the primary obligor or otherwise to maintain the net worth or solvency of the
primary obligor, (iii) to purchase property, securities or services primarily
for the purpose of assuring the owner of any such primary obligation of the
ability of the primary obligor to make payment of such primary obligation or
(iv) otherwise to assure or hold harmless the owner of any such primary
obligation against loss in respect thereof; provided, however, that the term
Guarantee Obligation shall not include endorsements of instruments for deposit
or collection in the ordinary course of business. The amount of any Guarantee
Obligation of any guaranteeing person shall be deemed to be the lower of (x) an
amount equal to the stated or determinable amount of the primary obligation in
respect of which such Guarantee Obligation is made and (y) the maximum amount
for which such guaranteeing person may be liable pursuant to the terms of the
instrument embodying such Guarantee Obligation, unless such primary obligation
and the maximum amount for which such guaranteeing person may be liable are not
stated or determinable, in which case the amount of such Guarantee Obligation
shall be such guaranteeing person's maximum reasonably anticipated liability in
respect thereof as determined by the Company in good faith.
"Guaranteed Senior Secured Primary Note" means this 12%
Guaranteed Senior Secured Primary Promissory Note.
"Interest Payment Dates" mean, for any year, November 25,
February 25, May 25, and August 25, beginning with the Interest Payment Date of
November 25, 1998.
"Lien" has the meaning specified in Section 1.1 of the Securities
Purchase Agreement.
"Multiemployer Plan" means a Plan which is a multiemployer plan
as defined in Section 4001(a)(3) of ERISA.
"Net Cash Proceeds" means the cash proceeds of any sale or other
disposition of debt or equity securities of the Company (including cash proceeds
subsequently received (as and when received) in respect of non-cash
consideration initially received and all reserves referred to in clause (ii)
below, as and when such reserves are no longer required), minus (i) transaction
expenses (including broker's fees or commission, legal fees, accounting fees,
investment banking fees and other professional fees, transfer and similar taxes
and the Company's good faith estimate of income taxes payable and the actual
amount of taxes paid in connection with the receipt of such cash proceeds); and
(ii) amounts provided as a reserve, in accordance with
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GAAP, including pursuant to any escrow arrangement, against any liabilities
under any indemnification obligations associated with such sale or disposition.
"Noteholder" means the Person defined as such in the first
paragraph hereof and its permitted successors, transferees and assigns.
"Person" means an individual, partnership, corporation, business
trust, joint stock company, trust, unincorporated association, joint venture,
Governmental Authority or other entity of whatever nature.
"Principal Amount" is defined in Section 1(a).
"Principal Payment Date" is defined in the preamble.
"Qualified Institutional Buyer" means shall have the meaning specified
in Rule 144A of the Securities Act.
"Required Holders" has the meaning specified in Section 1.1 of
the Securities Purchase Agreement.
"Subsidiary" has the meaning specified in Section 1.1 of the
Securities Purchase Agreement.
"Unpaid Principal Amount" means, at any time, the portion of the
Principal Amount outstanding at such time.
SECTION 12. Notices Relating to Patents and Trademarks. The Company
agrees that as long as any amount is owing to the Noteholder, it shall promptly
give notice to the Noteholder of any application or registration relating to any
Material Patent or trademark of the Company becoming abandoned or dedicated, or
of any adverse determination or development (including, without limitation, the
institution of, or any such determination or development in, any proceeding in
the United States Patent and Trademark Office or any court or tribunal in any
country regarding the Company's ownership of any material patent or trademark or
its right to register the same and keep and maintain same). Notice shall be
accompanied by a statement of a Responsible Officer setting forth details of the
occurrence and stating what action the Company proposes to take with respect
thereto.
SECTION 13. Cancellation. After all principal, accrued interest thereon
and all other amounts due hereunder at any time owed on this Guaranteed Senior
Secured Primary Note has been paid in full, this Guaranteed Senior Secured
Primary Note shall be surrendered to the Company for cancellation and shall not
be reissued.
SECTION 14. Payment of Expenses and Taxes. The Company hereby agrees (a)
to pay or reimburse the Noteholder for all its reasonable and documented costs
and expenses incurred in connection with the enforcement or preservation of any
rights under this Guaranteed Senior Secured Primary Note after the occurrence of
any Event of Default, including, without
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limitation, the reasonable and documented fees and disbursements of counsel to
the Noteholder and (b) to pay, indemnify, and hold the Noteholder harmless from,
any and all recording and filing fees and any and all liabilities with respect
to, or resulting from any delay in paying, stamp, excise and other taxes, if
any, which may be payable or determined to be payable in connection with the
execution and delivery of, or consummation or administration of any of the
transactions contemplated by, or any amendment, supplement or modification of,
or any waiver or consent under or in respect of, this Guaranteed Senior Secured
Primary Note.
SECTION 15. Payments. All payments to be made to the Noteholder shall be
made in the lawful money of the United States of America in immediately
available funds.
SECTION 16. Place of Payment. Payments of principal and interest shall
be delivered to the Noteholder by wire transfer of immediately available funds
to the following account: Xxxxx Xxxxxx Xxxx & Xxxxx, Xxxxxx/XXXX XX00, XXX
#000-000-000, For further credit to: Northstar High Yield Fund, Regarding:
Intracel 12% Guaranteed Senior Secured Primary Promissory Note due August 25,
2003, Taxpayer ID# 00-0000000, or to such other Noteholder at such other address
or to the attention of such other person or to such other account as specified
by prior written notice to the Company.
SECTION 17. Severability. Whenever possible, each provision of this
Guaranteed Senior Secured Primary Note shall be interpreted in such manner as to
be effective and valid under applicable law, but if any provision of this
Guaranteed Senior Secured Primary Note is held to be prohibited by or invalid
under applicable law, such provision shall be ineffective only to the extent of
such prohibition or invalidity, without invalidating the remainder of this
Guaranteed Senior Secured Primary Note.
SECTION 18. Descriptive Headings; Interpretation. The descriptive
headings of this Guaranteed Senior Secured Primary Note are inserted for
convenience only and do not constitute a substantive part of this Guaranteed
Senior Secured Primary Note. The use of the word "including" in this Guaranteed
Senior Secured Primary Note shall be by way of example rather than by
limitation.
SECTION 19. Governing Law; Submission to Jurisdiction. This Note shall
be construed in accordance with, and governed by, the internal laws of the State
of New York as permitted by Section 5-401 of the New York General Obligations
Law (or any similar successor provision) without giving effect to any choice of
law rule that would cause the application of the laws of any jurisdiction other
than the State of New York. The Company hereby irrevocably and unconditionally:
(i) submits itself and its properties in any legal action
or proceeding relating to this Note, the Securities Purchase Agreement
and the Ancillary Agreements to which it is a party, or for recognition
and enforcement of any judgment in respect thereof, to the general
jurisdiction of the Courts of the State of New York, the courts of the
United States of America for the Southern District of New York, and
appellate courts of any thereof;
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(ii) consents that any such action or proceeding may be
brought in such courts and waives any objection that it may now or
hereafter have to the venue of any such action or proceeding in any such
court or that such action or proceeding was brought in an inconvenient
court and agrees not to plead or claim the same;
(iii) agrees that service of process in any such action or
proceeding may be effected by mailing a copy thereof by registered or
certified mail (or any substantially similar form of mail), postage
prepaid, to it at its address set forth in or delivered pursuant to
Section 21 or at such other address of which the Holders shall have been
notified pursuant thereto;
(iv) waives, to the maximum extent not prohibited by Law,
any right it may have to claim or recover in any legal action or
proceeding referred to in this Section 19 any punitive or exemplary
damages and any damages which are not proximately caused by or the
reasonably foreseeable result of the breach which is the subject of such
action or proceeding.
The Company hereby acknowledges that:
(v) it has been advised by counsel in the negotiation,
execution and delivery of this Note, the Securities Purchase Agreement
and the Ancillary Agreements;
(vi) the Holders do not have any fiduciary relationship
with or duty to the Company arising out of or in connection with this
Note, the Securities Purchase Agreement, or the Ancillary Agreements;
and
(vii) no joint venture or partnership exists between the
Holders, on the one hand, and the Company, on the other hand and the
relationship of the Company and the Holders is that of inter alia,
debtor and creditor.
THE COMPANY AND THE HOLDERS HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE
TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS NOTE, THE
SECURITIES PURCHASE AGREEMENT, THE ANCILLARY AGREEMENTS AND FOR ANY COUNTERCLAIM
THEREIN.
THIS NOTE, THE SECURITIES PURCHASE AGREEMENT AND THE ANCILLARY
AGREEMENTS REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE
CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS
OF THE PARTIES.
THERE ARE NO UNWRITTEN ORAL AGREEMENTS OF THE PARTIES.
SECTION 20. Other Jurisdictions. The Company agrees that the Noteholder
shall have the right to proceed against the Company in a court in any location
to enable such Holder to enforce a judgment or other court order entered in
favor of such holder. The Company waives
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any objection that it may have to the location of the court in which the
Noteholder has commenced a proceeding described in this Section 20.
SECTION 21. Notices. All notices, requests, demands, waivers and other
communication required or permitted to be given under this Guaranteed Senior
Secured Primary Note shall be in writing and shall be deemed to have been duly
given if (a) delivered personally, (b) mailed by first-class, registered or
certified mail, return receipt requested, postage prepaid, or (c) sent by
next-day or overnight courier:
If to the Noteholder:
Northstar High Yield Fund
000 Xxxxx Xxxxxxxx Xxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Attn: Xxxxxxx Xxxxxx
Fax Number (000) 000-0000
Confirm Number (000) 000-0000
with a copy, which will
not constitute notice to
the Noteholder, to:
Reboul, MacMurray, Xxxxxx, Xxxxxxx & Kristol
00 Xxxxxxxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxx Xxxxxxxxx, Esq.
Fax Number (000) 000-0000
Confirm Number (000) 000-0000
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If to the Company:
Intracel Corporation
0000 XX Xxxxxxxxx Xxxx, Xxxxx 000
Xxxxxxxx, Xxxxxxxxxx 00000
Attn: Xxxxx X. XxXxxxxx
Fax Number: (000) 000-0000
Confirm Number: (000) 000-0000
with a copy, which will
not constitute notice to
the Company, to:
Xxxxxxxx & Xxxxxxxx LLP
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxx X. Xxxxxxxx, Esq.
Fax Number: (000) 000-0000
Confirm Number.: (000) 000-0000
or at such other address as may be specified in writing to the other parties in
accordance with this Section 21.
All such notices, requests, demands, waivers and other communications shall be
deemed to have been delivered if by personal delivery or by courier on the date
of such delivery and if by certified or registered mail, on the third (3rd)
Business Day after the mailing thereof.
SECTION 22. Business Days. If any payment is due, or any time period for
giving notice or taking action expires, on a day which is not a Business Day,
the payment shall be due and payable on, and the time period shall automatically
be extended to, the next Business Day immediately following such day, and
interest shall continue to accrue at the required rate hereunder until any such
payment is made.
SECTION 23. Usury Laws. The Company and each Noteholder intend to comply
with applicable usury Laws from time to time in effect. At no time shall the
interest rate payable on the Notes exceed the maximum rate of interest, if any,
that at any time or from time to time may be contracted for, taken, charged or
received on the Notes or on any amount which may be owing to the Holders of the
Notes under the Laws applicable to such Holders of Notes and this transaction.
In the event that the interest rate payable on the Notes shall exceed the
maximum rate of interest allowable under applicable usury Laws, then the rate of
interest shall automatically be reduced to the maximum rate permitted by Law.
* * * * *
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IN WITNESS WHEREOF, the Company has executed and delivered this
Guaranteed Senior Secured Primary Note on August 25, 1998.
INTRACEL CORPORATION
By: /s/ XXXXX X. XxXXXXXX
-------------------------------------
Name: Xxxxx X. XxXxxxxx
Title: Chief Executive Officer
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Exhibit A
NOTICE OF REDEMPTION
Name of Holder
Address of Holder
Gentlemen:
Pursuant to Section 1(e) of the 12% Guaranteed Senior Secured Primary
Notes (the "Guaranteed Senior Secured Primary Notes"), Intracel Corporation (the
"Company") hereby notifies the Noteholder that the Company has received on
_____, 199__ (the "Funding Date"), aggregate Net Cash Proceeds of $__________
from the sale of its debt or equity securities and, in accordance with the
mandatory redemption provisions of Section 1(e), the Company shall apply an
aggregate of (i) $_________ to pay accrued unpaid past due interest on all
outstanding Guaranteed Senior Secured Primary Notes and accrued unpaid interest
on the principal amount of this Note actually redeemed pursuant to Section 1(e),
all through the Redemption Date, as defined below, and the balance of (ii)
$________ (the "Available Redemption Amount") is hereby offered to reduce the
outstanding principal amount of the Guaranteed Senior Secured Primary Notes in
accordance with the elections made in Section 2 below, or subject to the
provisions of Section 3 below. All payments of principal and interest pursuant
to this redemption shall be made by the Company on the Redemption Date by wire
transfer, immediately available funds.
1. Definitions. All capitalized terms used but not defined herein shall
have the meanings set forth in the Guaranteed Senior Secured Primary Notes. For
purposes of this notice the following terms shall have the following meanings:
"Redemption Date" shall mean ________, 199_, which shall not be later
than two (2) Business Days after the date set forth in Section 2.
"Pro Rata Amount" as to any Noteholder shall mean the product of (i) a
fraction, the numerator of which is the unpaid principal amount of the
Guaranteed Senior Secured Primary Note held by such Noteholder on the date
hereof and the denominator of which is the aggregate unpaid principal amount of
all Guaranteed Senior Secured Primary Notes issued pursuant to the Securities
Purchase Agreement and outstanding on the date hereof, multiplied by (ii) the
Available Redemption Amount.
"Pro Rata Unclaimed Amount" means the sum of (I) the Pro Rata Amount due
to the Noteholder less the amount actually elected by the Noteholder for
redemption under Redemption
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Option B; and (ii) the Pro Rata Amount due to the Noteholder which elects
Redemption Option C.
"Proportional Amount" as to any Noteholder shall mean the Pro Rata
Amount plus the Unsubscribed Amount.
"Unsubscribed Amount" as to any Noteholder shall mean the product of (i)
a fraction, the numerator of which is the unpaid principal amount of the
Guaranteed Senior Secured Primary Note held by such Noteholder on the date
hereof and the denominator of which is the aggregate unpaid principal amount of
all Guaranteed Senior Secured Primary Notes on the date hereof held by
Noteholders who have elected Redemption Option (D) set forth in Section 2 below,
multiplied by (ii) an amount equal to the aggregate unpaid principal amount of
the Guaranteed Senior Secured Primary Notes held by Noteholders who have elected
Redemption Option (B) or (C) set forth in Section 2 below minus the aggregate
redemption amount elected to be received by the Noteholders which selected
Redemption Option B.
2. Election of Redemption Option. (a) Please indicate your selection of
a redemption option by checking the appropriate box set forth below and signing
and returning this Notice of Redemption to the Company no later than 5:00 p.m.
on ______, 199__, which date is five (5) Business Days after delivery of this
Notice to the Noteholder. If the Company has not received an executed copy of
this Notice by such time, the Noteholder shall be deemed to have elected
Redemption Option A:
[ ] Redemption Option A. The Noteholder hereby elects to receive its Pro
Rata Amount, which is equal to $_____________.
[ ] Redemption Option B. The Noteholder hereby elects to receive
$____________, which amount is less than its Pro
Rata Amount.
[ ] Redemption Option C. The Noteholder hereby elects to receive no
redemption of principal at this time.
[ ] Redemption Option D. The Noteholder hereby elects to receive its
Proportional Amount.
(b) Notwithstanding the provisions of Section 2(a) above, each
Noteholder hereby acknowledges and agrees that in the event the aggregate amount
to be prepaid to the Noteholders as a result of the elections under Section 2 is
less than the Available Redemption Amount, each holder shall receive an amount
equal to its Pro Rata Amount notwithstanding such Noteholders election pursuant
to Section 2.
3. Notwithstanding the provisions of Section 2 above, the Company shall
not be required to redeem any Pro Rata Unclaimed Amount of Net Cash Proceeds.
4. This Notice of Redemption may not be amended or rescinded by the
Company without the prior written consent of the Noteholders. Upon receipt of an
executed Notice of
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Redemption from a Noteholder, the Noteholder's election of a
redemption option may not be amended or rescinded without the prior written
consent of the Company and the other holders of Guaranteed Senior Secured
Primary Notes.
Please acknowledge your election of a redemption option by checking the
appropriate box in Section 2, signing below and returning this Notice of
Redemption to the Company on or before the time specified in Section 2 above.
Intracel Corporation
By:________________________________
Name of Noteholder
By:_____________________
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Exhibit B
NOTICE OF EBITDA REDEMPTION
Intracel Corporation
0000 XX Xxxxxxxxx Xxxx
Xxxxx 000
Xxxxxxxx, Xxxxxxxxxx 00000
Gentlemen:
Pursuant to Section 5.12 of the Securities Purchase Agreement, Intracel
Corporation (the "Company") has advised ____________________ (the "Noteholder"),
that it has failed to comply with the EBITDA Ratio set forth in Section 1(f) of
the 12% Guaranteed Senior Secured Primary Notes (the "Guaranteed Senior Secured
Primary Notes"), for the EBITDA Measurement Period ending on
____________________, or the Company has failed to notify the Noteholder of its
EBITDA Ratio for such EBITDA Measurement Period.
Accordingly, pursuant to Section 1(f) of the Guaranteed Senior Secured
Primary Notes, the Noteholder hereby demands that the Company redeem the Pro
Rata Redemption Amount of the Guaranteed Senior Secured Primary Note at a price
equal to the Pro Rata Redemption Price within five (5) Business Days after this
Notice of EBITDA Redemption is delivered to the Company.
Dated: __________, 199__
[Noteholder]
By:___________________________________________
Name:
Title:
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EXHIBIT A-2
GUARANTEED SENIOR SECURED ESCROW NOTE
84
THIS PROMISSORY NOTE HAS NOT BEEN REGISTERED OR QUALIFIED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS. IT MAY NOT BE SOLD,
OFFERED FOR SALE OR OTHERWISE TRANSFERRED UNLESS REGISTERED UNDER SUCH ACT OR IN
COMPLIANCE WITH ANY EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF SUCH ACT, IN
EACH CASE IN ACCORDANCE WITH ANY APPLICABLE STATE SECURITIES LAWS.
INTRACEL CORPORATION
12% GUARANTEED SENIOR SECURED ESCROW PROMISSORY NOTE
August 25, 1998 $658,537
FOR VALUE RECEIVED, INTRACEL CORPORATION, a Delaware corporation (the
"Company"), hereby promises to pay to the order of NORTHSTAR HIGH YIELD FUND,
its successors or assigns (the "Noteholder"), the Principal Amount (as defined
below) payable on August 25, 2003 (the "Principal Payment Date") with interest
payable pursuant to Section 2. Capitalized terms used in this Note have the
meanings provided in Section 11. All capitalized terms not otherwise defined
herein shall have the meanings set forth in the Securities Purchase Agreement
dated the date hereof by and among the Company and the other parties thereto
(including this Noteholder) (the "Securities Purchase Agreement").
SECTION 1. Payments of Principal.
(a) Prior Loans. The Company issued to the Noteholder or
Affiliates of the Noteholder certain Senior Secured Promissory Notes dated
December 28, 1995 and certain Promissory Notes dated April 1, 1998, as amended,
in the aggregate principal amount of $16,800,000, and, in connection therewith,
granted certain other rights to the Noteholder to acquire shares of the
Company's Capital Stock (such Notes and rights collectively referred to herein
as the "Existing Securities"). The Noteholder or its Affiliates have agreed to
contribute the Existing Securities and pay additional consideration as set forth
in the Securities Purchase Agreement to purchase $658,537 of these Guaranteed
Senior Secured Escrow Promissory Notes (the "Guaranteed Senior Secured Escrow
Notes") on the terms and conditions set forth herein.
85
(b) Principal Amount. On August 25, 1998 (the "Closing Date"),
the Noteholder purchased this Note for Six Hundred Fifty-Eight Thousand Five
Hundred Thirty Seven Dollars ($658,537) (the "Principal Amount").
(c) Principal Payment Date. Subject to earlier redemption or
prepayment as provided herein, the Principal Amount of this Guaranteed Senior
Secured Escrow Note and all other theretofore unpaid amounts due hereunder shall
be due and payable on the Principal Payment Date.
(d) Prepayment. (i) The Noteholder, at its option, may require
the Company to prepay this Guaranteed Senior Secured Escrow Note in whole or in
part, not later than five (5) Business Days after notice of prepayment is
delivered to the Company, pursuant to Section 1(d)(ii) hereof, at a price equal
to 101% of the principal amount so prepaid, plus accrued interest to the date of
prepayment, if:
(A) there is a Change of Control of the Company,
or
(B) (x) Xxxxx X. XxXxxxxx ("XxXxxxxx") shall
cease at any time for whatever reason to be
the principal executive officer of the
Company in charge of the Company's
management and policies for a period of
thirty (30) days or more and (y) the
Required Holders, in the reasonable exercise
of their discretion, shall not have approved
the successor to XxXxxxxx (the "XxXxxxxx
Successor") within 180 days after the
cessation by XxXxxxxx of his full time
service to the Company; and
(ii) the notice of prepayment delivered by the Noteholder
to the Company upon occurrence of the event(s) described in this Section
1(d) shall specify the event requiring such prepayment and the amount of
such prepayment.
(e) Mandatory Redemption in the Event of the Sale of Assets, Debt
or Equity Securities. Commencing on or after the date of this Guaranteed Senior
Secured Escrow Note, if at any time or from time to time, the Company or any of
its Subsidiaries receives cash proceeds ("Net Cash Proceeds") from the sale of
its debt or equity securities or from Asset Sale Excess Proceeds (as defined in
the Securities Purchase Agreement) for sales of property under Section 5.18 (c)
of the Securities Purchase Agreement, the Company shall, or all of the Net Cash
Proceeds or Asset Sale Excess Proceeds, as applicable, from such sale shall be
utilized to (i) pay all accrued unpaid past due interest on all Notes and all
accrued unpaid interest on the principal amount of the Notes actually redeemed
pursuant to this Section 1(e), all through the date of redemption; and (ii)
redeem this Note in accordance with the terms set forth in the notice of
redemption attached hereto as Exhibit A (the "Notice of Redemption"). On the
date of receipt of Net Cash Proceeds from the sale of debt or equity securities
or the receipt of Asset Sale Excess Proceeds, as applicable (the "Funding
Date"), an amount equal to the lesser of all Net Cash Proceeds or Asset Sale
Excess Proceeds, as applicable, or $6,000,000 shall be held in constructive
trust by the Company, as trustee for the benefit of Holders who shall be
entitled to
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disbursement of such funds in accordance with this Section 1(e). On the Funding
date, the Company shall forward to each Noteholder by facsimile transmission and
by overnight courier, a Notice of Redemption. Each Noteholder shall select one
of the four redemption options set forth on such notice and return by facsimile
or overnight courier the executed Notice of Redemption to the Company by the
close of business on the fifth Business Day following the Funding Date. If an
executed Notice of Redemption has not been delivered to the Company by the close
of business on such date, the Noteholder shall be deemed to have elected
Redemption Option A in Section 2 of the Notice of Redemption. The Company shall
prepay the Guaranteed Senior Secured Escrow Notes, in accordance with the
provisions of the Notice of Redemption, on the seventh Business Day following
the Funding Date. Any Notice of Redemption forwarded pursuant to this provision
shall be irrevocable. Notwithstanding anything in this Guaranteed Senior Secured
Escrow Note to the contrary (i) the Company shall have no obligation to make any
payments under this Section 1(e) which result from the sale of debt or equity
securities pursuant to the exercise (or series of related exercises) of employee
stock options not exceeding $250,000; (ii) the Company shall have no obligation
to make payments pursuant to this Section 1(e) in excess of $6,000,000 in the
aggregate, and (iii) the Company shall have no obligation to make payments under
this Section 1(e) which result from proceeds received from Transamerica Business
Credit Corporation (as a result of a financing guaranteed by a bond posted by
the State of Washington Economic Development Council), provided, and to the
extent that, such proceeds are utilized to purchase equipment for the Company or
its Subsidiaries.
(f) EBITDA Required Redemptions
(i) For purposes of this provision, the terms set forth
below shall have the following meanings:
(A) "EBITDA Measurement Date" shall mean each of
March 31, 2000, June 30, 2000 and September
30, 2000.
(B) "EBITDA Ratio" shall mean the ratio of the
Company's EBITDA to the Company's Interest
Expense for each of the quarters ended March
31, 2000, June 30, 2000 and September 30,
2000 as follows:
Quarter Ended EBITDA Ratio
------------- ------------
March 31, 2000 3:1
June 30, 2000 4:1
September 30, 2000 5:1
(C) "EBITDA" means with reference to any
Measurement Period, the consolidated
operating income of the Company and its
Subsidiaries, plus the amount of all
depreciation and amortization deducted in
determining the amount of such operating
income, all as determined on a consolidated
basis in accordance with GAAP applied on a
basis consistent
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87
with the Audited Financial Statements of the
Company delivered pursuant to Section 6.16
of the Securities Purchase Agreement.
(D) "Interest Expense" means, for any
Measurement Period, the sum, in accordance
with GAAP, of (i) all interest on Debt that
is paid or accrued as an expense during such
period (including without limitations,
imputed interest under Capitalized Lease
Obligations (as defined in the Securities
Purchase Agreement), plus (ii) all amounts
---- paid, accrued or amortized as an
expense during such period in respect of
interest rate protection agreements minus,
(iii) all amounts received or accrued as
income during such period in respect of
interest rate protection agreements.
(E) "Measurement Period" means any quarterly
period ending on an EBITDA Measurement Date.
(F) "Notice of EBITDA Redemption" means the
Noteholder's demand for payment by the
Company at the Pro Rata Redemption Price of
its Pro Rata Redemption Amount as set forth
in Exhibit B attached hereto.
(G) "Pro Rata Redemption Amount" means the
product of (i) a fraction, the numerator of
which is the Principal Amount of this
Guaranteed Senior Secured Escrow Note and
the denominator is the aggregate Principal
Amount of all Notes initially Outstanding
pursuant to the Securities Purchase
Agreement, multiplied by (ii) the Quarterly
Redemption Amount
(H) "Pro Rata Redemption Price" means the Pro
Rata Redemption Amount, plus accrued unpaid
interest thereon to the date of redemption.
(I) "Quarterly Redemption Amount" means
$2,500,000 for each of the quarters ended
March 30, 2000, June 30, 2000 and September
30, 2000.
(J) "Report Date" shall mean thirty (30) days
after an EBITDA Measurement Date.
(K) "Total Redemption Amount" means $7,500,000.
(ii) Unless the Company is in compliance with the EBITDA
Ratio on each EBITDA Measurement Date, the Noteholder, at its option,
may demand, by sending
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a Notice of EBITDA Redemption, that the Company redeem the Pro Rata
Redemption Amount of the Guaranteed Senior Secured Escrow Note at the
Pro Rata Redemption Price for each EBITDA Measurement Date on which the
Company fails to comply with the applicable EBITDA Ratio. The
Noteholder's right to redemption under this Section 1(f) is subject to
the following provisions:
(A) The Company shall deliver a certificate to
the Noteholder not later than each Report
Date (the "EBITDA Ratio Certificate"), which
sets forth, with reference to the applicable
EBITDA Measurement Date: (i) EBITDA and
Interest Expense; (ii) the EBITDA Ratio; and
(iii) a statement to the effect that the
Company has either satisfied the EBITDA
Ratio or has failed to satisfy the EBITDA
Ratio for such EBITDA Measurement Date. In
the event that the Company has failed to
meet or exceed the EBITDA Ratio applicable
to such Measurement Date (or, the Company
fails to deliver the EBITDA Ratio
Certificate to the Noteholder on or prior to
the Report Date), the Noteholder shall have
the right to demand payment to it of the Pro
Rata Redemption Amount at a price equal to
the Pro Rata Redemption Price within five
(5) Business Days after a Notice of EBITDA
Redemption is delivered by the Noteholder to
the Company.
(B) Notwithstanding the provisions of
1(f)(ii)(A) above, in the event the Company
fails to comply with the EBITDA Ratio
applicable to an EBITDA Measurement Date,
the Noteholder shall be deemed to have
waived its right to redemption arising from
such failure to comply (the "Waiver of
Payment") if both of the following
conditions are met: (i) a subsequent
quarterly certificate delivered to the
Noteholder pursuant to this Section 1(f) or
Section 5.12 of the Securities Purchase
Agreement certifies that the EBITDA Ratio
(or the EBITDA to Interest Ratio) certified
thereby meets or exceeds the EBITDA Ratio
applicable to the EBITDA Measurement Date
giving rise to the Noteholder's right of
redemption hereunder; and (y) the Noteholder
has not delivered its Notice of EBITDA
Redemption to the Company respecting such
EBITDA Measurement Date prior to receiving
such subsequent certificate.
(iii) Any Waiver of Payment with respect to an EBITDA
Measurement Date shall not constitute or be construed as a Waiver of
Payment with respect to any other EBITDA Measurement Date.
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(iv) Subject to the provisions of Section 1(f)(ii)(B)
above, the Noteholder's rights to demand and receive the Pro Rata
Redemption Amount at the Pro Rata Redemption Price under this Section
1(f) are cumulative.
(v) The Pro Rata Redemption Price shall be paid by wire
transfer of immediately available funds.
(vi) Notwithstanding anything herein to the contrary, the
Company shall not be required to redeem more than the Total Redemption
Amount plus unpaid and accrued interest to the dates of redemption,
pursuant to this Section 1(f).
(g) Optional Prepayment. This Guaranteed Senior Secured Escrow
Note may be prepaid utilizing funds from any source, at the option of the
Company at any time, in part or in full together with accrued interest through
the date of prepayment on the principal amount prepaid, provided that the
Company shall give notice to the Noteholder of its intention to prepay (the
"Notice to Prepay") the Guaranteed Senior Secured Escrow Note seven (7) calendar
days prior to the date of prepayment (the "Prepayment Date") and the Noteholder
shall, within three (3) calendar days prior to the Prepayment Date, mail a
notice of its election to the Company to accept or decline to accept such
prepayment. In the event that the Noteholder shall decline to accept such
prepayment or shall elect to accept less than the full amount to be prepaid by
the Company (the "Unsubscribed Amount"), the Unsubscribed Amount shall be
prepaid pro rata to the remaining holders of the Guaranteed Senior Secured
Escrow Notes who have elected to be prepaid. In the event that all holders of
outstanding Guaranteed Senior Secured Escrow Notes shall decline to accept the
amount to be prepaid by the Company, the Unsubscribed Amount shall be prepaid to
all holders of outstanding Guaranteed Senior Secured Escrow Notes pro rata.
SECTION 2. Payment of Interest.
(a) Interest Rate. Except as otherwise expressly provided in
Section 6(b), interest shall accrue from the Closing Date at the rate of twelve
percent (12%) per annum on the Unpaid Principal Amount, provided, however, that,
in the event the Company does not comply with the covenant set forth in Section
5.26 of the Securities Purchase Agreement within the sixty (60) day period set
forth therein, interest shall accrue from the expiration of the sixty (60) day
period until such covenant has been satisfied, at the Default Interest Rate. All
computations of interest shall be made on the basis of a year of three hundred
and sixty (360) days for the actual number of days including the first day but
excluding the last day for which any interest period is calculated.
(b) Interest Payment Date. All accrued and unpaid interest shall
be payable quarterly in arrears on each Interest Payment Date beginning on
November 25, 1998.
(c) Interest Escrow Security Agreement for Certain Interest
Payments. To secure the Company's obligations to make certain interest payments
pursuant to this Guaranteed Senior Secured Escrow Note, the Company has executed
an interest escrow security agreement as of the date hereof (the "Interest
Escrow Security Agreement"), pursuant to which the Company has agreed to deposit
funds into and restrict withdrawals from an account for the
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benefit of the Noteholder and to make additional contributions as described in
the Interest Escrow Security Agreement. The Company will make interest payments,
and in certain circumstances principal and other payments, in accordance
therewith.
SECTION 3. Covenants.
The Company hereby agrees that, so long as any amount is owing to the
Noteholder, it shall and shall cause its Subsidiaries to perform the covenants
set forth in Article V of the Securities Purchase Agreement.
SECTION 4. Guaranties.
The performance of the Company's obligations under the Securities
Purchase Agreement, this Guaranteed Senior Secured Escrow Note, all Notes issued
pursuant to the Securities Purchase Agreement and the Ancillary Agreements (the
"Obligations") has been unconditionally guaranteed by the Company's Subsidiaries
(the "Guaranties") as set forth in the Guaranty Agreements executed as of the
date hereof.
SECTION 5. Security.
This Guaranteed Senior Secured Escrow Note and all other Notes issued
pursuant to the Securities Purchase Agreement represent Senior Secured Debt of
the Company. The performance of the Company's Obligations and the Guaranties
relating to the Obligations are secured by certain Collateral as set forth in
the Security Documents.
SECTION 6. Events of Default.
(a) Definition. For purposes of this Guaranteed Senior Secured
Escrow Note, an Event of Default shall have occurred and shall be deemed to have
occurred if:
(i) the Company shall fail to pay any principal when due
in accordance with the terms hereof; or
(ii) the Company shall fail to pay any interest or any
other amount payable hereunder or under the Securities Purchase
Agreement or any of the Ancillary Agreements when due in accordance with
their respective terms by a date which is five calendar days after such
interest or other amount payable hereunder is due and payable in
accordance with the terms hereof; or
(iii) any representation or warranty made or deemed made
by the Company in the Securities Purchase Agreement, the Ancillary
Agreements or any written document furnished in connection with or
pursuant to such Agreements shall prove to have been incorrect in any
material respect on or as of the date made or deemed made; or
(iv) the Company shall have failed to comply with the
covenant set forth in Section 5.26 of the Securities Purchase Agreement
within 180 days from the date hereof or the Company or any Subsidiary
shall default in the observance or performance
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of any other agreement contained in this Guaranteed Senior Secured
Escrow Note, the Securities Purchase Agreement or any of the Ancillary
Agreements; or
(v) the Company or any Subsidiary (whether as primary
obligor or as a guarantor or other surety) shall (A) default in any
payment of principal of or interest on any Debt (after giving effect to
any applicable grace period); or (B) default in the observance or
performance of any other agreement or condition relating to any such
Debt or any Guarantee Obligation or contained in any instrument or
agreement evidencing, securing or relating thereto, or any other event
shall occur or condition exist, the effect of which default or other
event or condition is to give the Holder thereof the right to cause such
Debt to become due prior to its stated maturity or such Guarantee
Obligation to become payable (whether by the terms of any document
evidencing such Debt or Guarantee Obligation, upon the election of any
Holder of Debt or beneficiary of any Guarantee Obligation or otherwise);
provided, that the aggregate amount of all obligations as to which such
payment Default shall occur and be continuing or other event causing or
permitting acceleration thereof exceeds $500,000; or
(vi) (A) the Company or any Subsidiary shall commence any
case, proceeding or other action (1) under any existing or future Law of
any jurisdiction, domestic or foreign, relating to bankruptcy,
insolvency, reorganization or relief of debtors, seeking to have an
order for relief entered with respect to it, or seeking to adjudicate it
a bankrupt or insolvent, or seeking reorganization, arrangement,
adjustment, winding-up, liquidation, dissolution, composition or other
relief with respect to it or its debts, or (2) seeking appointment of a
receiver, trustee, custodian, conservator or other similar official for
it or for all or any substantial part of its Assets, or the Company
shall make a general assignment for the benefit of its creditors; or (B)
there shall be commenced against the Company any case, proceeding or
other action of a nature referred to in clause (A) above which (1)
results in the entry of an order for relief or any such adjudication or
appointment or (2) remains undismissed, undischarged or unbonded for a
period of sixty (60) days; or (C) there shall be commenced against the
Company any case, proceeding or other action seeking issuance of a
warrant of attachment, execution, distraint or similar process against
all or any substantial part of its Assets which results in the entry of
an order for any such relief which shall not have been vacated,
discharged, or stayed or bonded pending appeal within sixty (60) days
from the entry thereof; or (D) the Company shall take any action in
furtherance of, or indicating its consent to, approval of, or
acquiescence in, any of the acts set forth in clause (A), (B) or (C)
above; or (E) the Company shall generally not, or shall be unable to, or
shall admit in writing its inability to, pay its debts as they become
due; or
(vii) one or more final judgments or decrees shall be
entered against the Company or any Subsidiary involving in the aggregate
a liability (not paid or fully covered by insurance) of two hundred
fifty thousand dollars ($250,000) or more; or
(viii) any judgment or decree is entered in any
proceedings against the Company or any Subsidiary decreeing a split-up
of the Company or such Subsidiary
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which requires the divestiture of Assets representing more than 33 1/3%,
or the divestiture of the stock of a Subsidiary whose Assets represent
more than 33 1/3%, of the consolidated Assets of the Company and its
Subsidiaries (determined in accordance with GAAP) or which requires the
divestiture of Assets, or stock of a Subsidiary, which shall have
contributed more than 33 1/3% of the consolidated net income of the
Company and its Subsidiaries (determined in accordance with GAAP) during
the three fiscal years then most recently ended, and such order,
judgment or decree remains unstayed and in effect for more than 120
days; or
(ix) the Company or any Community Controlled Entity, in
its capacity as an employer under a Multiemployer Plan, makes a complete
or partial withdrawal from such Multiemployer Plan resulting in the
incurrence by such withdrawing employer of a withdrawal liability in an
amount exceeding $500,000; or
(x) the Company shall have not consummated on or prior to
August 25, 1999 a sale of its Common Stock, whether in a public offering
registered under the Securities Act or otherwise, which sale has an
aggregate offering price of not less than $40,000,000 and results in
aggregate proceeds to the Company (net of selling expenses and
underwriter's discount or selling agent's commission) of not less than
$35,000,000; or
(xi) (A) the Securities Purchase Agreement or any
Ancillary Agreement entered into on or after the date hereof shall cease
in any material respect, for any reason, to be in full force and effect
or the Company or any subsidiary shall assert that any of such
Agreements has ceased in any material respect to be in full force and
effect, (B) the Liens created by any Security Documents shall cease, in
any material respect, for any reason other than a release executed and
delivered by each Holder of the Notes, to be enforceable and of the same
effect and first priority purported to be created thereby (unless
otherwise contemplated thereby), or (C) any breach, default or event of
default occurs under any Securities Purchase Agreement or any Ancillary
Agreement and the same is not remedied within the applicable period of
grace (if any) provided in such Agreement; or
(xii) the Company shall fail to prepay the Guaranteed
Senior Secured Escrow Note in accordance with the terms of Section 1(d)
hereof; or
(xiii) the Company shall fail to redeem the Guaranteed
Senior Secured Escrow Note in accordance with the terms of Section 1(e)
hereof; or
(xiv) the Company shall fail to pay any amounts under
Section 1(f) hereof.
(b) Consequences of Events of Default.
(i) When any Event of Default has occurred and is
continuing, the interest rate on this Guaranteed Senior Secured Escrow
Note shall increase to the Default
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Interest Rate. Any increase of the interest rate resulting from the
operation of this clause shall terminate as of the close of business on
the date on which no Events of Default exist (subject to subsequent
increases pursuant to this clause), provided, however, that nothing
herein shall prevent subsequent increases of the interest rate to the
Default Interest Rate upon any subsequent Defaults or Events of Default
by the Company.
(ii) If an Event of Default of the type described in
Section 6(a)(vi) has occurred, the aggregate principal amount of this
Guaranteed Senior Secured Escrow Note (together with all accrued
interest thereon and all other amounts due and payable with respect
thereto) shall become immediately due and payable without any action on
the part of the Noteholder, and the Company shall immediately pay to the
Noteholder all amounts due and payable hereunder.
(iii) If any Event of Default has occurred (other than
under Section 6(a)(vi)), the Noteholder may declare this Guaranteed
Senior Secured Escrow Note to be immediately due and payable and may
demand immediate payment of the Unpaid Principal Amount (together with
all accrued and unpaid interest and all other amounts due and payable
with respect thereto).
(iv) If any Event of Default or Default shall occur and be
continuing, the Holder of any Guaranteed Senior Secured Escrow Note may
proceed to protect and enforce its rights under the Guaranteed Senior
Secured Escrow Note and the Securities Purchase Agreement by exercising
such remedies as are available to such Holder in respect thereof, under
applicable Law, whether for specific performance of any covenant or
other agreement contained in this Guaranteed Senior Secured Escrow Note
or otherwise; no remedy is intended to be exclusive of any other remedy,
and each and every such remedy shall be cumulative and shall be in
addition to every other remedy conferred herein or now or hereafter
existing at Law or in equity or by statute or otherwise.
(v) If an Event of Default or Default shall occur and be
continuing, payments by the Company of amounts due to the Noteholder
shall be made in the following order or priority:
(A) all accrued unpaid past due interest on the
Notes issued pursuant to the Securities
Purchase Agreement;
(B) all accrued unpaid interest due on the Notes
issued pursuant to the Securities Purchase
Agreement and the Ancillary Agreements;
(C) all accrued unpaid and past due amounts
pursuant to the Securities Purchase
Agreement and the Ancillary
Agreements;
(D) all other accrued unpaid amounts pursuant to
the Securities Purchase Agreement and the
Ancillary Agreements; and
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(E) the principal amount due under the Notes.
(c) Rescission of Acceleration. At any time after any or all of
the Guaranteed Senior Secured Escrow Notes shall have been declared immediately
due and payable pursuant to subsection (b), the Required Holders may, by notice
in writing to the Company, rescind and annul such declaration and its
consequences if (i) the Company shall have paid all overdue interest on the
Guaranteed Senior Secured Escrow Notes, the principal of any Guaranteed Senior
Secured Escrow Notes which have become due otherwise than by reason of such
declaration, and interest on such overdue interest and overdue principal at the
rate specified in the Guaranteed Senior Secured Escrow Notes, (ii) the Company
shall have paid any amounts which have become due solely by reason of such
declaration, (iii) all Events of Default and Defaults, other than non-payment of
amounts which have become due solely by reason of such declaration, shall have
been cured or waived and (iv) no judgment or decree shall have been entered for
the payment of any amounts due pursuant to the Guaranteed Senior Secured Escrow
Notes. No such rescission or annulment shall extend to or affect any subsequent
Event of Default or Default or impair any right arising therefrom.
(d) Notice of Acceleration or Rescission. Whenever any Guaranteed
Senior Secured Escrow Note shall be declared immediately due and payable
pursuant to subsection (b) or any such declaration shall be rescinded and
annulled pursuant to subsection (c), the Company shall forthwith give written
notice thereof to each Holder of Guaranteed Senior Secured Escrow Notes at the
time outstanding.
SECTION 7. Waiver of Certain Rights. The Company hereby waives
diligence, presentment, protest and demand and notice of protest and demand,
dishonor and nonpayment of this Guaranteed Senior Secured Escrow Note, and
expressly agrees that this Guaranteed Senior Secured Escrow Note, or any payment
hereunder, may be extended from time to time and that the Holder hereof may
accept security for this Guaranteed Senior Secured Escrow Note or release
security for this Guaranteed Senior Secured Escrow Note, all without in any way
affecting the liability of the Company hereunder.
SECTION 8. Transfer of this Guaranteed Senior Secured Escrow Note. Upon
surrender for registration of transfer of this Guaranteed Senior Secured Escrow
Note at the principal office of the Company, the Company shall execute and
deliver one or more new Guaranteed Senior Secured Escrow Notes of like tenor and
of like aggregate principal amount, registered in the name of such transferee or
transferees and or the Noteholder, as the case may be. At the time this
Guaranteed Senior Secured Escrow Note is surrendered for registration of
transfer, it shall be duly endorsed, or be accompanied by a written instrument
of transfer duly executed, by the Noteholder or such Holder's attorney duly
authorized in writing. Any Guaranteed Senior Secured Escrow Note or Guaranteed
Senior Secured Escrow Notes issued upon transfer of this Guaranteed Senior
Secured Escrow Note shall carry the rights to unpaid interest and the accrual of
interest which were carried by this Guaranteed Senior Secured Escrow Note, so
that neither gain nor loss of interest shall result from any such transfer. In
the event that the Holder shall transfer less than the full amount of the Note,
the Company shall execute and deliver a replacement Note of like tenor for the
balance of the amount of the Note due to Holder.
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In addition, on receipt of evidence reasonably satisfactory to the Company of
the loss, theft, destruction or mutilation of this Note and, in the case of any
such loss, theft or destruction of this Note, and delivery of an indemnity
agreement or security reasonably satisfactory in form and amount to the Company
in the case of such mutilation, on delivery and cancellation of this Note, the
Company at its expense, will execute and deliver in lieu thereof, a replacement
Note of like tenor.
SECTION 9. Assignment. The rights and obligations of the Company and the
Noteholder shall be binding upon and benefit the permitted successors, assigns
and transferees of the parties; provided that (i) in no event shall the Company
assign its rights hereunder without the prior written consent of the Noteholder,
(ii) the Noteholder may sell, assign, convey, or otherwise transfer this
Guaranteed Senior Secured Escrow Note with the consent of the Company, which
consent will not be unreasonably withheld, (iii) notwithstanding Section 9(ii),
the Noteholder may at all times, without the consent of the Company, sell,
assign, convey or otherwise transfer this Guaranteed Senior Secured Escrow Note
to an Affiliate of the Noteholder, and (iv) the Noteholder may, at all times,
sell, convey or otherwise transfer this Guaranteed Senior Secured Promissory
Note to a Qualified Institutional Buyer or an Accredited Investor, without the
consent of the Company if, after the proposed transfer, the aggregate unpaid
principal amount of all Notes then held by the Noteholder and its Affiliates,
exceeds $10,000,000.
SECTION 10. Amendment and Waiver. Except as otherwise expressly provided
herein, the provisions of this Guaranteed Senior Secured Escrow Note may be
amended and the Company may take any action herein prohibited, or omit to
perform any act herein required to be performed by it, only if the Company has
obtained the written consent of the Required Holders. No failure or delay on the
part of the Noteholder in exercising any power or right under this Guaranteed
Senior Secured Escrow Note shall operate as a waiver thereof, nor shall any
single or partial exercise of any such power or right preclude any other or
further exercise thereof or the exercise of any other power or right.
SECTION 11. Definitions. For purposes of this Guaranteed Senior Secured
Escrow Note, the following capitalized terms have the following meaning:
"Accredited Investor" has the meaning set forth in Rule 501 of
Regulation D promulgated under the Securities Act.
"Affiliate" means, with reference to a specified person or entity, any
person or entity that directly or indirectly through one or more intermediaries
controls or is controlled by or is under common control with the specified
person or entity. For purposes of this definition, "control" (including, with
correlative meaning, the terms "controlled by" and "under common control with"),
as used with respect to any person or entity, shall mean the possession,
directly or indirectly, of the power to direct or cause the direction of the
management and policies of such person or entity, whether through the ownership
of voting securities or by contract or otherwise.
"Business Day" has the meaning specified in Section 1.1 of the
Securities Purchase Agreement.
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"Capital Lease Obligation" has the meaning specified in Section
1.1 of the Securities Purchase Agreement.
"Change in Control" has the meaning specified in Section 1.1 of
the Securities Purchase Agreement.
"Closing Date" is defined in Section 1(a).
"Code" means the Internal Revenue Code of 1986, as amended, or
any successor statute thereto.
"Common Stock" means the common stock of the Company.
"Commonly Controlled Entity" means an entity, whether or not
incorporated, which is under common control with the Company within the meaning
of Section 4001 of ERISA or is part of a group which includes the Company and
which is treated as a single employer under Section 414 of the Code.
"Company" is defined in the preamble.
"Debt" has the meaning specified in Section 1.1 of the Securities
Purchase Agreement.
"Default" means any of the events specified in Section 6, whether
or not any requirement for the giving of notice, the lapse of time, or both, or
any other condition, has been satisfied.
"Default Interest Rate" means a rate of interest equal to fifteen
percent (15%) per annum.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time.
"Event of Default" means each of the events described in Section
6; provided, however, that any requirement for the giving of notice, the lapse
of time, or both, or any other condition, has been satisfied.
"GAAP" has the meaning specified in Section 1.1 of the Securities
Purchase Agreement.
"Governmental Authority" means any nation or government, any
state or other political subdivision thereof and any entity exercising
executive, legislative, judicial, regulatory or administrative functions of or
pertaining to government.
"Guarantee Obligation" means as to any Person (the "guaranteeing
person"), any obligation of (a) the guaranteeing person or (b) another Person
(including, without limitation, any bank under any letter of credit) to induce
the creation of which the guaranteeing person has issued a reimbursement,
counterindemnity or similar obligation, in either case guaranteeing or in effect
guaranteeing any Debt, leases, dividends or other obligations (the "primary
obligations") of any other third Person (the "primary obligor") in any manner,
whether directly or indirectly, including, without limitation, any obligation of
the guaranteeing person, whether or not
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contingent, (i) to purchase any such primary obligation or any property
constituting direct or indirect security therefor, (ii) to advance or supply
funds (1) for the purchase or payment of any such primary obligation or (2) to
maintain working capital or equity capital of the primary obligor or otherwise
to maintain the net worth or solvency of the primary obligor, (iii) to purchase
property, securities or services primarily for the purpose of assuring the owner
of any such primary obligation of the ability of the primary obligor to make
payment of such primary obligation or (iv) otherwise to assure or hold harmless
the owner of any such primary obligation against loss in respect thereof;
provided, however, that the term Guarantee Obligation shall not include
endorsements of instruments for deposit or collection in the ordinary course of
business. The amount of any Guarantee Obligation of any guaranteeing person
shall be deemed to be the lower of (x) an amount equal to the stated or
determinable amount of the primary obligation in respect of which such Guarantee
Obligation is made and (y) the maximum amount for which such guaranteeing person
may be liable pursuant to the terms of the instrument embodying such Guarantee
Obligation, unless such primary obligation and the maximum amount for which such
guaranteeing person may be liable are not stated or determinable, in which case
the amount of such Guarantee Obligation shall be such guaranteeing person's
maximum reasonably anticipated liability in respect thereof as determined by the
Company in good faith.
"Guaranteed Senior Secured Escrow Note" means this 12% Guaranteed
Senior Secured Escrow Promissory Note.
"Interest Payment Dates" mean, for any year, November 25,
February 25, May 25 and August 25, beginning with the Interest Payment Date of
November 25, 1998.
"Lien" has the meaning specified in Section 1.1 of the Securities
Purchase Agreement.
"Multiemployer Plan" means a Plan which is a multiemployer plan
as defined in Section 4001(a)(3) of ERISA.
"Net Cash Proceeds" means the cash proceeds of any sale or other
disposition of debt or equity securities of the Company (including cash proceeds
subsequently received (as and when received) in respect of non-cash
consideration initially received and all reserves referred to in clause (ii)
below, as and when such reserves are no longer required), minus (i) transaction
expenses (including broker's fees or commission, legal fees, accounting fees,
investment banking fees and other professional fees, transfer and similar taxes
and the Company's good faith estimate of income taxes payable and the actual
amount of taxes paid in connection with the receipt of such cash proceeds); and
(ii) amounts provided as a reserve, in accordance with GAAP, including pursuant
to any escrow arrangement, against any liabilities under any indemnification
obligations associated with such sale or disposition.
"Noteholder" means the Person defined as such in the first
paragraph hereof and its permitted successors, transferees and assigns.
"Person" means an individual, partnership, corporation, business
trust, joint stock company, trust, unincorporated association, joint venture,
Governmental Authority or other entity of whatever nature.
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"Principal Amount" is defined in Section 1(a).
"Principal Payment Date" is defined in the preamble.
"Qualified Institutional Buyer" means shall have the meaning specified
in Rule 144A of the Securities Act.
"Required Holders" has the meaning specified in Section 1.1 of
the Securities Purchase Agreement.
"Subsidiary" has the meaning specified in Section 1.1 of the
Securities Purchase Agreement.
"Unpaid Principal Amount" means, at any time, the portion of the
Principal Amount outstanding at such time.
SECTION 12. Notices Relating to Patents and Trademarks. The Company
agrees that as long as any amount is owing to the Noteholder, it shall promptly
give notice to the Noteholder of any application or registration relating to any
Material Patent or trademark of the Company becoming abandoned or dedicated, or
of any adverse determination or development (including, without limitation, the
institution of, or any such determination or development in, any proceeding in
the United States Patent and Trademark Office or any court or tribunal in any
country regarding the Company's ownership of any material patent or trademark or
its right to register the same and keep and maintain same). Notice shall be
accompanied by a statement of a Responsible Officer setting forth details of the
occurrence and stating what action the Company proposes to take with respect
thereto.
SECTION 13. Cancellation. After all principal, accrued interest thereon
and all other amounts due hereunder at any time owed on this Guaranteed Senior
Secured Escrow Note has been paid in full, this Guaranteed Senior Secured Escrow
Note shall be surrendered to the Company for cancellation and shall not be
reissued.
SECTION 14. Payment of Expenses and Taxes. The Company hereby agrees (a)
to pay or reimburse the Noteholder for all its reasonable and documented costs
and expenses incurred in connection with the enforcement or preservation of any
rights under this Guaranteed Senior Secured Escrow Note after the occurrence of
any Event of Default, including, without limitation, the reasonable and
documented fees and disbursements of counsel to the Noteholder and (b) to pay,
indemnify, and hold the Noteholder harmless from, any and all recording and
filing fees and any and all liabilities with respect to, or resulting from any
delay in paying, stamp, excise and other taxes, if any, which may be payable or
determined to be payable in connection with the execution and delivery of, or
consummation or administration of any of the transactions contemplated by, or
any amendment, supplement or modification of, or any waiver or consent under or
in respect of, this Guaranteed Senior Secured Escrow Note.
SECTION 15. Payments. All payments to be made to the Noteholder shall be
made in the lawful money of the United States of America in immediately
available funds.
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SECTION 16. Place of Payment. Payments of principal and interest shall
be delivered to the Noteholder by wire transfer of immediately available funds
to the following account: State Street Bank & Trust, Boston/SPEC WJ 09, ABA
#000-000-000, For further credit to: Northstar High Yield Fund, Regarding:
Intracel 12% Guaranteed Senior Secured Promissory Note due August 25, 2003,
Taxpayer ID# 00-0000000, or to such other Noteholder at such other address or to
the attention of such other person or to such other account as specified by
prior written notice to the Company.
SECTION 17. Severability. Whenever possible, each provision of this
Guaranteed Senior Secured Escrow Note shall be interpreted in such manner as to
be effective and valid under applicable law, but if any provision of this
Guaranteed Senior Secured Escrow Note is held to be prohibited by or invalid
under applicable law, such provision shall be ineffective only to the extent of
such prohibition or invalidity, without invalidating the remainder of this
Guaranteed Senior Secured Escrow Note.
SECTION 18. Descriptive Headings; Interpretation. The descriptive
headings of this Guaranteed Senior Secured Escrow Note are inserted for
convenience only and do not constitute a substantive part of this Guaranteed
Senior Secured Escrow Note. The use of the word "including" in this Guaranteed
Senior Secured Escrow Note shall be by way of example rather than by limitation.
SECTION 19. Governing Law; Submission to Jurisdiction. This Note shall
be construed in accordance with, and governed by, the internal laws of the State
of New York as permitted by Section 5-401 of the New York General Obligations
Law (or any similar successor provision) without giving effect to any choice of
law rule that would cause the application of the laws of any jurisdiction other
than the State of New York. The Company hereby irrevocably and unconditionally:
(i) submits itself and its properties in any legal action
or proceeding relating to this Note, the Securities Purchase Agreement
and the Ancillary Agreements to which it is a party, or for recognition
and enforcement of any judgment in respect thereof, to the general
jurisdiction of the Courts of the State of New York, the courts of the
United States of America for the Southern District of New York, and
appellate courts of any thereof;
(ii) consents that any such action or proceeding may be
brought in such courts and waives any objection that it may now or
hereafter have to the venue of any such action or proceeding in any such
court or that such action or proceeding was brought in an inconvenient
court and agrees not to plead or claim the same;
(iii) agrees that service of process in any such action or
proceeding may be effected by mailing a copy thereof by registered or
certified mail (or any substantially similar form of mail), postage
prepaid, to it at its address set forth in or delivered pursuant to
Section 21 or at such other address of which the Holders shall have been
notified pursuant thereto;
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(iv) waives, to the maximum extent not prohibited by Law,
any right it may have to claim or recover in any legal action or
proceeding referred to in this Section 19 any punitive or exemplary
damages and any damages which are not proximately caused by or the
reasonably foreseeable result of the breach which is the subject of such
action or proceeding.
The Company hereby acknowledges that:
(v) it has been advised by counsel in the negotiation,
execution and delivery of this Note, the Securities Purchase Agreement
and the Ancillary Agreements;
(vi) the Holders do not have any fiduciary relationship
with or duty to the Company arising out of or in connection with this
Note, the Securities Purchase Agreement, or the Ancillary Agreements;
and
(vii) no joint venture or partnership exists between the
Holders, , on the one hand, and the Company, on the other hand and the
relationship of the Company and the Holders is that of inter alia,
debtor and creditor.
THE COMPANY AND THE HOLDERS HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE
TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS NOTE, THE
SECURITIES PURCHASE AGREEMENT, THE ANCILLARY AGREEMENTS AND FOR ANY COUNTERCLAIM
THEREIN.
THIS NOTE, THE SECURITIES PURCHASE AGREEMENT AND THE ANCILLARY
AGREEMENTS REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE
CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS
OF THE PARTIES.
THERE ARE NO UNWRITTEN ORAL AGREEMENTS OF THE PARTIES.
SECTION 20. Other Jurisdictions. The Company agrees that the Noteholder
shall have the right to proceed against the Company in a court in any location
to enable such Holder to enforce a judgment or other court order entered in
favor of such holder. The Company waives any objection that it may have to the
location of the court in which the Noteholder has commenced a proceeding
described in this Section 20.
SECTION 21. Notices. All notices, requests, demands, waivers and other
communication required or permitted to be given under this Guaranteed Senior
Secured Escrow Note shall be in writing and shall be deemed to have been duly
given if (a) delivered personally, (b) mailed by first-class, registered or
certified mail, return receipt requested, postage prepaid, or (c) sent by
next-day or overnight courier:
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If to the Noteholder:
Northstar High Yield Fund
000 Xxxxx Xxxxxxxx Xxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Attn: Xxxxxxx Xxxxxx
Fax Number (000) 000-0000
Confirm Number (000) 000-0000
with a copy, which will
not constitute notice to
the Noteholder, to:
Reboul, MacMurray, Xxxxxx, Xxxxxxx & Kristol
00 Xxxxxxxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxx Xxxxxxxxx, Esq.
Fax Number (000) 000-0000
Confirm Number (000) 000-0000
If to the Company:
Intracel Corporation
0000 XX Xxxxxxxxx Xxxx, Xxxxx 000
Xxxxxxxx, Xxxxxxxxxx 00000
Attn: Xxxxx X. XxXxxxxx
Fax Number: (000) 000-0000
Confirm Number: (000) 000-0000
with a copy, which will
not constitute notice to
the Company, to:
Xxxxxxxx & Xxxxxxxx LLP
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxx X. Xxxxxxxx, Esq.
Fax No: (000) 000-0000
Confirm No.: (000) 000-0000
or at such other address as may be specified in writing to the other parties in
accordance with this Section 21.
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All such notices, requests, demands, waivers and other communications shall be
deemed to have been delivered if by personal delivery or by courier on the date
of such delivery and if by certified or registered mail, on the third (3rd)
Business Day after the mailing thereof.
SECTION 22. Business Days. If any payment is due, or any time period for
giving notice or taking action expires, on a day which is not a Business Day,
the payment shall be due and payable on, and the time period shall automatically
be extended to, the next Business Day immediately following such day, and
interest shall continue to accrue at the required rate hereunder until any such
payment is made.
SECTION 23. Usury Laws. The Company and each Noteholder intend to comply
with applicable usury Laws from time to time in effect. At no time shall the
interest rate payable on the Notes exceed the maximum rate of interest, if any,
that at any time or from time to time may be contracted for, taken, charged or
received on the Notes or on any amount which may be owing to the Holders of the
Notes under the Laws applicable to such Holders of Notes and this transaction.
In the event that the interest rate payable on the Notes shall exceed the
maximum rate of interest allowable under applicable usury Laws, then the rate of
interest shall automatically be reduced to the maximum rate permitted by Law.
* * * * *
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IN WITNESS WHEREOF, the Company has executed and delivered this
Guaranteed Senior Secured Escrow Note on August 25, 1998.
INTRACEL CORPORATION
By: /s/ XXXXX X. XXXXXXXX
----------------------------------
Name: Xxxxx X. XxXxxxxx
Title: Chief Executive Officer
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Exhibit A
NOTICE OF REDEMPTION
Name of Holder
Address of Holder
Gentlemen:
Pursuant to Section 1(e) of the 12% Guaranteed Senior Secured Escrow
Notes (the "Guaranteed Senior Secured Escrow Notes"), Intracel Corporation (the
"Company") hereby notifies the Noteholder that the Company has received on
_____, 199__ (the "Funding Date"), aggregate Net Cash Proceeds of $__________
from the sale of its debt or equity securities and, in accordance with the
mandatory redemption provisions of Section 1(e), the Company shall apply an
aggregate of (i) $_________ to pay accrued unpaid past due interest on all
outstanding Guaranteed Senior Secured Escrow Notes and accrued unpaid interest
on the principal amount of this Note actually redeemed pursuant to Section 1(e),
all through the Redemption Date, as defined below, and the balance of (ii)
$________ (the "Available Redemption Amount") is hereby offered to reduce the
outstanding principal amount of the Guaranteed Senior Secured Escrow Notes in
accordance with the elections made in Section 2 below, or subject to provisions
of Section 3 below. All payments of principal and interest pursuant to this
redemption shall be made by the Company on the Redemption Date by wire transfer
in immediately available funds.
1. Definitions. All capitalized terms used but not defined herein shall
have the meanings set forth in the Guaranteed Senior Secured Escrow Notes. For
purposes of this notice the following terms shall have the following meanings:
"Redemption Date" shall mean ________, 199_, which shall not be later
than two (2) Business Days after the date set forth in Section 2.
"Pro Rata Amount" as to any Noteholder shall mean the product of (i) a
fraction, the numerator of which is the unpaid principal amount of the
Guaranteed Senior Secured Escrow Note held by such Noteholder on the date hereof
and the denominator of which is the aggregate unpaid principal amount of all
Guaranteed Senior Secured Escrow Notes issued pursuant to the Securities
Purchase Agreement and outstanding on the date hereof, multiplied by (ii) the
Available Redemption Amount.
"Proportional Amount" as to any Noteholder shall mean the Pro Rata
Amount plus the Unsubscribed Amount.
"Unsubscribed Amount" as to any Noteholder shall mean the product of (i)
a fraction, the numerator of which is the unpaid principal amount of the
Guaranteed Senior Secured Escrow Note held by such Noteholder on the date hereof
and the denominator of which is the aggregate unpaid principal amount of all
Guaranteed Senior Secured Escrow Notes on the date hereof held by Noteholders
who have elected Redemption Option (D) set forth in Section 2 below, multiplied
by (ii) an amount equal to the aggregate unpaid principal amount of the
Guaranteed Senior Secured Escrow Notes held by Noteholders who have elected
Redemption Option (B) or (C) set
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forth in Section 2 below minus the aggregate redemption amount elected to be
received by the Noteholders which selected Redemption Option B.
2. Election of Redemption Option. (a) Please indicate your selection of
a redemption option by checking the appropriate box set forth below and signing
and returning this Notice of Redemption to the Company no later than 5:00 p.m.
on ______, 199__, which date is five (5) Business Days after delivery of this
Notice to the Noteholder. If the Company has not received an executed copy of
this Notice by such time, the Noteholder shall be deemed to have elected
Redemption Option A:
[ ] Redemption Option A. The Noteholder hereby elects to receive its Pro
Rata Amount, which is equal to $_____________.
[ ] Redemption Option B. The Noteholder hereby elects to receive
$____________, which amount is less than its Pro
Rata Amount.
[ ] Redemption Option C. The Noteholder hereby elects to receive no
redemption of principal at this time.
[ ] Redemption Option D. The Noteholder hereby elects to receive its
Proportional Amount.
(b) Notwithstanding the provisions of Section 2(a) above, each
Noteholder hereby acknowledges and agrees that in the event the aggregate amount
to be paid to the Noteholders as a result of the elections under Section 2 is
less than the Available Redemption Amount, each holder shall receive an amount
equal to its Pro Rata Amount notwithstanding such Noteholders election pursuant
to Section 2.
3. This Notice of Redemption may not be amended or rescinded by the
Company without the prior written consent of the Noteholders. Upon receipt of an
executed Notice of Redemption from a Noteholder, the Noteholder's election of a
redemption option may not be amended or rescinded without the prior written
consent of the Company and the other holders of Guaranteed Senior Secured Escrow
Notes.
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Please acknowledge your election of a redemption option by checking the
appropriate box in Section 2, signing below and returning this notice of
redemption to the Company on or before the time specified in Section 2 above.
Intracel Corporation
By:________________________________
Name of Noteholder
By:_________________
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Exhibit B
NOTICE OF EBITDA REDEMPTION
Intracel Corporation
0000 XX Xxxxxxxxx Xxxx
Xxxxx 000
Xxxxxxxx, Xxxxxxxxxx 00000
Gentlemen:
Pursuant to Section 5.12 of the Securities Purchase Agreement, Intracel
Corporation (the "Company") has advised ____________________ (the "Noteholder"),
that it has failed to comply with the EBITDA Ratio set forth in Section 1(f) of
the 12% Guaranteed Senior Secured Primary Notes (the "Guaranteed Senior Secured
Primary Notes"), for the EBITDA Measurement Period ending on
____________________, or the Company has failed to notify the Noteholder of its
EBITDA Ratio for such EBITDA Measurement Period.
Accordingly, pursuant to Section 1(f) of the Guaranteed Senior Secured
Primary Notes, the Noteholder hereby demands that the Company redeem the Pro
Rata Redemption Amount of the Guaranteed Senior Secured Primary Note at a price
equal to the Pro Rata Redemption Price within five (5) Business Days after this
Notice of EBITDA Redemption is delivered to the Company.
Dated: __________, 199__
[Noteholder]
By:_________________________________
Name:
Title:
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EXHIBIT B-1
WARRANT
109
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, AND MAY NOT BE TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS IT HAS BEEN
REGISTERED UNDER THAT ACT OR AN EXEMPTION FROM REGISTRATION IS AVAILABLE.
SERIES A-VI COMMON STOCK WARRANT
Void after Right to purchase 178,354
August 25, 2003 shares of Common Stock
(subject to adjustment)
of Intracel Corporation
No. A-VI-1
INTRACEL CORPORATION
Common Stock Warrant
Intracel Corporation, a Delaware corporation (the "Company"), hereby
certifies that, for value received, Northstar High Yield Fund (the "Holder") or
its registered assigns, is entitled, subject to the terms set forth below, to
purchase from the Company at any time or from time to time before 5:00 P.M. New
York time, on August 25, 2003 (the "Expiration Time"), up to one hundred seventy
eight thousand three hundred fifty four (178,354) fully paid and nonassessable
shares of the Company's Common Stock, $.0001 par value per share, at a purchase
price per share equal to the lesser of (i) $10.00, or (ii) in the event that the
Company consummates an Initial Public Offering ("IPO") (as hereinafter defined),
at any time prior to the Expiration Time, the price per share offered to the
public in the IPO less underwriter(s) discounts and commissions (the "IPO
Price"); provided that in the event the IPO shall be consummated on or prior to
December 31, 1998, the purchase price per share shall be equal to the IPO Price
if the IPO Price is more than $10.00 (the "Purchase Price"). The number and
character of such shares of Common Stock and the Purchase Price are subject to
adjustment as provided herein.
This warrant (this "Warrant") is issued pursuant to a certain Securities
Purchase Agreement, dated as of August 25, 1998, between, among other parties,
the Company and the Holder, a copy of which is on file at the principal office
of the Company (the "Securities Purchase Agreement"). This Warrant has not been
issued as part of any unit. As used herein, all capitalized terms not otherwise
defined herein shall have the meanings set forth in the Securities Purchase
Agreement.
This warrant is subject to the rights and obligations set forth in that
certain Registration Rights Agreement dated as of August 25, 1998, between,
among other parties, the Company and the Holder, a copy of which is on file at
the principal office of the Company (the "Registration Rights Agreement.")
110
As used herein the following terms, unless the context otherwise
requires, have the following respective meanings:
"Accredited Investor" has the meaning set forth in Rule 501 of
Regulation D promulgated under the Securities Act.
"Affiliate" has the meaning specified in Section 1.1 of the
Securities Purchase Agreement.
"Assets" has the meaning specified in Section 1.1 of the
Securities Purchase Agreement.
"Common Stock" means the Company's common stock, $.0001 par
value per share, in existence on the date of this Warrant, or any class
or classes (however designated) replacing such Common Stock as a result
of any recapitalization, reorganization or other reclassification of the
Company's capital stock which affects the holders of Common Stock.
"Company" includes any corporation which shall succeed to or
assume the obligations of the Company hereunder.
"Extraordinary Transaction" means any consolidation of the
Company with or the merger of the Company into any other corporation or
entity (other than a merger in which the Company is the continuing
entity) or the sale or transfer of all or substantially all of the
Assets of the Company to another person or entity.
"Fair Market Value" has the meaning specified in Section 1.1 of
the Securities Purchase Agreement.
"Fully Diluted Shares" has the meaning specified in Section 1.1
of the Securities Purchase Agreement.
"Initial Public Offering" means an underwritten public offering
pursuant to an effective registration statement on Form S-1 or successor
form under the Securities Act covering the offering and sale of Common
Stock for the account of the Company with an aggregate purchase price of
at least $40,000,000 and aggregate net proceeds to the Company of at
least $35,000,000.
"Qualified Institutional Buyer" means shall have the meaning
specified in Rule 144A of the Securities Act.
"Required Holders" has the meaning specified in Section 1.1 of
the Securities Purchase Agreement.
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"Securities Act" means the Securities Act of 1933, or any
successor Federal statute, and the rules and regulations of the
Commission thereunder, all as the same shall be in effect at the time.
"Securities and Exchange Commission" or "Commission" refers to
the Securities and Exchange Commission or any other Federal agency then
administering the Securities Act.
"Warrant Shares" means the Common Stock issued or issuable upon
exercise of this Warrant.
1. Restricted Stock.
1.1 This Warrant and all rights hereunder may not be transferred
by the Holder unless (i) the transferee is an Affiliate of the Holder; or (ii)
the transferee is a Qualified Institutional Buyer or an Accredited Investor,
and, after giving effect to the transfer, the aggregate unpaid principal amount
of all Notes then held by the Holder and its Affiliates, exceeds $10,000,000, or
(iii) the Company gives its prior written consent to the transfer, which consent
will not be unreasonably withheld.
1.2 If, at the time of any transfer or exchange pursuant to
Section 1.1 (other than a transfer or exchange not involving a change in the
beneficial ownership of this Warrant) of this Warrant or Warrant Shares, such
Warrant or Warrant Shares shall not be registered under the Securities Act, the
Company may require, as a condition of allowing such transfer or exchange, that
the Holder or transferee of such Warrant or Warrant Shares, as the case may be,
furnish to the Company an opinion of counsel reasonably acceptable to the
Company or a "no action" or similar letter from the Securities and Exchange
Commission to the effect that such transfer or exchange may be made without
registration under the Securities Act. In the case of such transfer or exchange,
and in the case of an exercise of this Warrant if the Warrant Shares to be
issued thereupon are not registered pursuant to the Securities Act, the Company
may require a written statement that such Warrant or Warrant Shares, as the case
may be, are being acquired for investment and not with a view to the
distribution thereof (subject, however, to any requirement of Law that the
disposition thereof shall at all times be within the control of such Holder or
transferee, as the case may be).
1.3 Certificates evidencing Warrant Shares shall, unless at the
time of exercise such Warrant Shares are registered under the Securities Act,
bear a legend substantially in the following form:
"THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED, AND MAY NOT BE TRANSFERRED OR OTHERWISE
DISPOSED OF UNLESS IT HAS BEEN REGISTERED UNDER THAT ACT OR AN
EXEMPTION FROM REGISTRATION IS AVAILABLE."
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2. Exercise of Warrant.
(a) The Holder may exercise this Warrant in whole or in part (but
not as to fractional shares of Common Stock) by delivering this Warrant prior to
the Expiration Time, with the form of subscription at the end hereof duly
executed by the Holder, to the Company at its principal office.
(b) The Holder may make payment of the Purchase Price (as such
may be adjusted as provided herein) in respect of the exercise of this Warrant
as follows:
(i) Cash Exercise. By payment to the Company of the
Purchase Price in cash or official bank check;
(ii) Notes Exercise. By surrender to the Company of any of
the Notes issued pursuant to the Securities Purchase Agreement as of the
date hereof, with all such Notes or other Obligations of the Company so
surrendered being credited against the Purchase Price in an amount equal
to the principal amount thereof plus the amount of any accrued unpaid
interest thereon to the date of such surrender;
(iii) Securities Exercise. By delivery to the Company of
any other securities issued by the Company, with such securities being
credited against the Purchase Price in an amount equal to the Fair
Market Value thereof;
(iv) Net Issue Exercise. By an election to receive shares
of the Company's Common Stock, without payment of additional cash
consideration in an amount equal to the number of shares as to which
this Warrant is so exercised, less the number of shares having a Fair
Market Value on the date of exercise equal to the aggregate Purchase
Price then in effect for the number of shares as to which this Warrant
is so exercised;
(v) Combined Payment Method. By satisfaction of the
Purchase Price for each share being acquired in any combination of the
methods described in sections (i) through (iv);
provided that, irrespective of the form of payment, the amount paid therefor
must be equal to the aggregate Purchase Price of the Common Stock being
purchased pursuant to such exercise.
(c) The Company represents and warrants that the number of shares
of Common Stock issued or issuable upon exercise, of this Warrant constitutes
0.82% of the number of Fully Diluted Shares as of the original date of issuance
of this Warrant and that the number of Shares of Common Stock issuable upon
exercise of all Series A-VI Warrants issued pursuant to the Securities Purchase
Agreement constitutes, in the aggregate, 7.5% of the number of Fully Diluted
Shares as of the original date of issuance of this Warrant.
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(d) In the event of the purchase of less than all of the shares
of Common Stock purchasable under this Warrant, the Company shall execute and
deliver a replacement Warrant of like tenor for the balance of the shares of
Common Stock purchasable thereunder.
3. Delivery of Stock Certificates on Exercise.
Certificates for shares of Common Stock purchased under this
Warrant shall be issued as soon as practicable after the exercise of this
Warrant in accordance with Section 2 hereof, but in no event later than 10 days
after the date of delivery to the Company of this Warrant for exercise, without
charge to the Holder, including, without limitation, any tax that may be payable
in respect thereof, and such certificates shall be issued and registered in the
name of, or, subject to Section 1.1, in such names as may be directed by, the
Holder; provided, however, that the Company shall not be required to pay any
income tax to which the Holder may be subject in connection with the issuance of
this Warrant or the shares of Common Stock upon exercise of this Warrant;
provided, further, that the Company shall not be required to pay any tax that
may be payable in respect of any transfer involved in the issuance and delivery
of any such certificate in a name other than that of the Holder and the Company
shall not be required to issue or deliver such certificate unless or until the
person or persons requesting the issuance thereof shall have paid to the Company
for payment by it of the amount of such tax or shall have established to the
satisfaction of the Company that such taxes have been paid.
4. Adjustments to Warrants.
4.1 Adjustment for Certain Dividends and Distributions. If, at
any time or from time to time, the number of shares of Common Stock outstanding
is increased (i) by a stock dividend payable in shares of Common Stock or in any
other security exchangeable for or convertible into Common Stock or (ii) by a
subdivision or split-up of shares of Common Stock, then, following the record
date fixed for the determination of holders of Common Stock entitled to receive
such stock dividend, subdivision or split-up, provision shall be made so that
the Holder of this Warrant shall receive upon exercise thereof in addition to
the number of shares of Common Stock receivable thereupon, the amount of
securities of the Company that it would have received if (A) this Warrant had
been exercised into Common Stock on the date of such event and (B) it had
thereafter retained such securities and all rights and distributions relating to
them.
4.2 Adjustment for Capital Reorganization, Reclassification,
Exchange, or Substitution. If Common Stock is changed into the same or a
different number of shares of any class or classes of stock, whether by capital
reorganization, reclassification, or otherwise, then and in each such event, the
Holder of this Warrant shall have the right thereafter to convert its Warrant
Shares into the kind and amount of shares of stock and other securities and
Assets receivable upon such reorganization, reclassification, or other change.
If, at any time or from time to time, the number of shares of Common Stock
outstanding is decreased by a combination of the outstanding shares of Common
Stock, then, following the record date for such
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combination, the Purchase Price shall appropriately increase and the number of
Warrant Shares shall be appropriately decreased.
5. Anti-Dilution Adjustment.
(a) Adjustment for Common Stock Issue. If at any time or from
time to time after the date hereof, the Company issues shares of Common Stock
for a price per share less than the then applicable Purchase Price per share
(other than for Exempt Issuances (as hereinafter defined)) ("Lower Price"), on
the date such additional shares are issued, the Purchase Price shall be reduced
to such Lower Price. This subsection does not apply to (the "Exempt Issuances")
(i) any of the transactions described in Sections 4.1 and 4.2 and the first
paragraph of subsection (b) or the issuance of Common Stock upon the exercise of
such rights described therein, (ii) the issuance by the Company or any of its
Subsidiaries' of preferred stock issued in lieu of cash dividends on the
preferred stock as provided for under the terms of the applicable designations
or provisions of the Company's certificate of incorporation on the date hereof,
(iii) upon the exercise of rights under securities issued before the date hereof
to convert, exchange or exercise such securities into shares of Common Stock,
(iv) the issuance of shares of Common Stock upon the exercise of rights or
warrants issued by the Company prior to the date hereof, or (v) the issuance of
shares of Common Stock upon the exercise of options granted, either prior to the
date hereof or in the future, to employees and directors of the Company pursuant
to employee benefit plans or employee stock option plans available for grants to
the Company's executives in general.
(b) Adjustment for Convertible Securities Issue. If at any time
after the date hereof, the Company issues any securities convertible,
exchangeable or exercisable into shares of Common Stock for a price per share of
Common Stock initially deliverable upon conversion, exchange or exercise of such
securities less than the then applicable Purchase Price per share (other than
for Exempt Derivatives (as hereinafter defined)) (a "Lower Payment"), on the
date of issuance of such securities, the Purchase Price shall be reduced to such
Lower Payment.
This subsection does not apply to (the "Exempt Derivatives") (i)
any of the transactions described in Sections 4.1 and 4.2 and the first
paragraph of subsection (a) or (ii) the rights, warrants or options described in
Section 5(a)(iv) and (v).
6. Replacement of Warrants. On receipt of evidence reasonably
satisfactory to the Company of the loss, theft, destruction or mutilation of
this Warrant and, in the case of any such loss, theft or destruction of this
Warrant, on delivery of an indemnity agreement or security reasonably
satisfactory in form and amount to the Company or, in the case of any such
mutilation, on delivery and cancellation of this Warrant, the Company at its
expense will execute and deliver, in lieu thereof, a replacement Warrant of like
tenor.
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7. Notices.
7.1 Notices for Adjustments under Section 4 and Section 5. In
the event of:
(a) any taking by the Company of a record of the holders of any
class of securities for the purpose of determining the holders thereof who are
entitled to receive any dividend or other distribution, or any right to
subscribe for, purchase or otherwise acquire any shares of stock of any class or
any other securities or Assets, or to receive any other right; or
(b) any capital reorganization of the Company, any
reclassification or recapitalization of the Capital Stock of the Company or the
occurrence of any Extraordinary Transaction; or
(c) any voluntary or involuntary dissolution, liquidation or
winding-up of the Company; or
(d) any proposed issue or grant by the Company of any shares of
stock of any class or any other securities, or any right or option to subscribe
for, purchase or otherwise acquire any shares of stock of any class or any other
securities (other than the issuance of Warrant Shares); or
(e) any action by the Company pursuant to Section 5(a) or (b);
then, and in each such event, the Company will send to the Holders, a notice
specifying (i) the date on which any such record is to be taken for the purpose
of such dividend, distribution or right, and stating the amount and character of
such dividend, distribution or right, (ii) the date on which any such
reorganization, reclassification, recapitalization, Extraordinary Transaction,
dissolution, liquidation or winding-up is to take place, and the time, if any is
to be fixed, as of which the holders of record of Common Stock shall be entitled
to exchange their shares of Common Stock for securities or other Assets
deliverable on such reorganization, reclassification, recapitalization,
Extraordinary Transaction, dissolution, liquidation or winding up, and (iii) the
amount and character of any stock or other securities, or rights or options with
respect thereto, proposed to be issued or granted, the date of such proposed
issue or grant the persons or class of persons to whom such proposed issue or
grant is to be offered or made, and the consideration to be received by the
Company therefor.
All notices to be given pursuant to subsection (a) of this Section 7.1
shall be sent at least fifteen (15) days prior to the record date of such events
described therein, and in any event at least twenty-five (25) days prior to the
actual event. All notices to be given pursuant to subsections (b) through (d) of
this Section 7.1 shall be sent at least thirty (30) days prior to the record
date of such events described therein.
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7.2 Other Notices. (a) In the event of an Initial Public
Offering, the Company will send a notice of the initial filing of the
registration statement for the Initial Public Offering. Any notice to be given
pursuant to this Section 7.2(a) shall be sent on the date of such filing.
(b) All notices, requests, consents and other communications
hereunder shall be in writing and shall be delivered in person, or mailed by
certified or registered mail, return receipt requested, or nationwide overnight
delivery service (with charges prepaid) as follows:
(i) if to the Company or any Subsidiary, at Intracel
Corporation, 0000 XX Xxxxxxxxx Xxxx, Xxxxx 000, Xxxxxxxx, Xxxxxxxxxx
00000, Attn: Chief Executive Officer, with a copy to Xxxxxx X. Xxxxxxxx,
Esq., Xxxxxxxx & Xxxxxxxx LLP, 0000 Xxxxxx xx xxx Xxxxxxxx, Xxx Xxxx,
XX 00000; and
(ii) if to the Holders, at their respective addresses set
forth on Schedule 2.1 to the Securities Purchase Agreement, with a copy
to Xxxxx Xxxxxxxxx, Esq., Reboul, MacMurry, Xxxxxx, Xxxxxxx & Kristol,
00 Xxxxxxxxxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000.
or, in any such case, at such other address or addresses as shall have been
furnished in writing by such party to the other. Any notice given hereunder
shall be deemed given and delivered when delivered in person, or three days
after mailing by mail or one day after delivery to an overnight express service
for next day delivery, as the case may be.
8. Consent to Amendments. This Agreement may not be amended or modified
and no provisions hereof may be waived, without the written consent of the
Company and each Holder. However, this Agreement may be amended, and the Company
may take any action herein prohibited, or omit to perform any act herein
required to be performed by it, if the Company shall obtain the written consent
to such amendment, action or omission to act, of the Required Holders, except
that, without the prior written consent of one hundred percent (100%) of the
Holders, no amendment to this Agreement shall change the Expiration Time of this
Warrant, the Purchase Price of this Warrant or the number of shares issuable
hereunder or change the percentage specified in the definition of Required
Holders or consent to the assignment or transfer by the Company of its rights
and obligations under this Agreement or the Ancillary Agreements. Each Holder of
the Warrants shall be bound by any consent authorized by this Section 8 whether
or not such Warrant shall have been marked to indicate such consent, but any
Warrants issued thereafter may bear notation referring to any such consent. Any
amendment or waiver of any provision of any Warrant shall be effective only for
the purposes and period of time expressly set forth therein and shall not
entitle the Company to any other waiver or amendment in similar or other
circumstances. No course of dealing between the Company and any Holder of any
Warrant, nor any failure to exercise or any delay in exercising on the part of
the holder of any Warrant any right, remedy, power or privilege under any
Warrant shall or operate as a waiver thereof; nor shall any single or partial
exercise of any right, remedy, power or privilege under any Warrant preclude any
other right, remedy, power or privilege. The rights, remedies, powers and
privileges under the Warrants are cumulative and not exclusive of any rights,
remedies, powers and privileges provided by Law. As used herein and in the
Warrants,
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the term "this Agreement and the Ancillary Agreements" and references thereto
shall mean this Agreement and the Ancillary Agreements as they may from time to
time be amended or supplemented.
9. Governing Law; Submission to Jurisdiction. This Warrant shall be
construed in accordance with, and governed by, the internal laws of the State of
New York as permitted by Section 5-401 of the New York General Obligations Law
(or any similar successor provision) without giving effect to any choice of law
rule that would cause the application of the laws of any jurisdiction other than
the State of New York. The Company hereby irrevocably and unconditionally:
(a) submits itself and its properties in any legal action or
proceeding relating to this Agreement and the Ancillary Agreements to which it
is a party, or for recognition and enforcement of any judgment in respect
thereof, to the general jurisdiction of the Courts of the State of New York, the
courts of the United States of America for the Southern District of New York,
and appellate courts of any thereof;
(b) consents that any such action or proceeding may be brought in
such courts and waives any objection that it may now or hereafter have
to the venue of any such action or proceeding in any such court or that
such action or proceeding was brought in an inconvenient court and
agrees not to plead or claim the same;
(c) agrees that service of process in any such action or proceeding
may be effected by mailing a copy thereof by registered or certified
mail (or any substantially similar form of mail), postage prepaid, to it
at its address set forth in or determined pursuant to Section 7.2 or at
such other address of which the Holders shall have been notified
pursuant thereto;
(d) waives, to the maximum extent not prohibited by Law, any right
it may have to claim or recover in any legal action or proceeding
referred to in this Section 9 any punitive or exemplary damages and any
damages which are not proximately caused by or the reasonably
foreseeable result of the breach which is the subject of such action or
proceeding.
The Company hereby acknowledges that:
(e) it has been advised by counsel in the negotiation, execution
and delivery of this Warrant, the Securities Purchase Agreement and the
Ancillary Agreements;
(f) the Holders do not have any fiduciary relationship with or duty
to the Company arising out of or in connection with this Agreement, or
the Ancillary Agreements; and
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(g) no joint venture or partnership exists between the Holders, on
the one hand, and the Company, on the other hand, and the relationship
of the Company and the Holders is that of, inter alia, debtor and
creditor.
THE COMPANY AND THE HOLDERS HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE
TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT, THE
ANCILLARY AGREEMENTS AND FOR ANY COUNTERCLAIM THEREIN.
THIS AGREEMENT AND THE ANCILLARY AGREEMENTS REPRESENT THE FINAL
AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.
THERE ARE NO UNWRITTEN ORAL AGREEMENTS OF THE PARTIES.
10. Stock to be Reserved. The Company will, at all times reserve and
keep available out of its authorized Common Stock or its treasury shares solely
for the purpose of issue upon the exercise of this Warrant as herein provided,
such number of shares of Common Stock as shall then be issuable upon the
exercise of this Warrant. The Company covenants that all shares of Common Stock
which shall be so issued shall be duly and validly issued and fully paid and
nonassesable and free from all taxes, Liens and charges with respect to the
issue thereof, and without limiting the generality of the foregoing, the Company
covenants that it will from time to time take all such action as may be
requisite to assure that the par value per share of the Common Stock is at all
times equal to or less than the effective Purchase Price. The Company will take
all such action as may be necessary to assure that all such shares of Common
Stock may be so issued without violation of any applicable Law, or any
requirements of any national securities exchange upon which the Common Stock of
the Company may be listed. The Company will not take any action which results in
any adjustment of the Purchase Price if the total number of shares of Common
Stock issued and issuable after such action upon exercise of this Warrant would
exceed the total number of shares of Common Stock then authorized by the
Company's Articles of Incorporation. The Company has not granted and will not
grant any right of first refusal with respect to shares issuable upon exercise
of this Warrant, and there are no preemptive rights associated with such shares.
11. Issue Tax. The issuance of certificates for shares of Common Stock
upon exercise of the Warrants shall be made without charge to the Holder of such
Warrant for any issuance tax in respect thereof provided that the Company shall
not be required to pay any tax which may be payable in respect of any transfer
involved in the issuance and delivery of any certificate in a name other than
that of the Holder of the Warrant.
12. Miscellaneous. The headings in this Warrant are for purposes of
reference only, and shall not limit or otherwise affect any of the terms hereof.
This Warrant is being executed as an instrument under seal. All nouns and
pronouns used herein shall be deemed to refer to the
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masculine, feminine or neuter, as the identity of the person or persons to whom
reference is made herein may require.
13. Expiration. This Warrant shall expire, and be without further force
and effect, at 5:00 P.M., New York time, on August 25, 2003.
[see attached signature page]
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Dated: August 25, 1998 INTRACEL CORPORATION
(Corporate Seal) By: /s/ XXXXX X. XXXXXXXX
------------------------------------
Xxxxx X. XxXxxxxx, Chief
Executive Officer
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FORM OF SUBSCRIPTION
(To be signed upon exercise of Warrant)
To Intracel Corporation:
The undersigned, pursuant to the provisions of the Warrant issued by
Intracel Corporation on August 25, 1998 and held by the undersigned, hereby
subscribes for and purchases at the price per share provided in such Warrant
__________ shares of Common Stock issuable upon exercise of such Warrant, and
(i) makes cash payment herewith in an amount equal to
[___%] of the aggregate purchase price therefor;
(ii) surrenders to the Company its Notes due __________
or such other promissory notes or other obligations
issued by the Company, in accordance with Section
2(b)(ii) of such Warrant, as payment herewith in an
amount equal to [___%] of the aggregate purchase
price therefor;
(iii) delivers to the Company other securities issued by
the Company, in accordance with Section 2(b)(iii)
of such Warrant, as payment herewith in an amount
equal to [___%} of the aggregate purchase price
therefor; and/or
(iv) elects Net Issue Exercise as provided in Section
2(b)(iv) of such Warrant as to an amount equal to
[___%] of the aggregate purchase price therefor.
The combination of (i) through (iv) above shall equal 100%
of the purchase price of the shares being issued upon
exercise of the Warrant.
Dated:
-----------------------------------------------
(Name must conform in all respects to name of
holder as specified on the face of the Warrant)
HOLDER:
By:
-------------------------------------------
Name:
Title:
Address:
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EXHIBIT B-2
AMENDED AND RESTATED SERIES-II WARRANT
123
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, AND MAY NOT BE TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS IT HAS BEEN
REGISTERED UNDER THAT ACT OR AN EXEMPTION FROM REGISTRATION IS AVAILABLE.
AMENDED AND RESTATED SERIES A-II COMMON STOCK WARRANT
Void after Right to purchase 188,020
August 25, 2003 shares of Common Stock
(subject to adjustment )
of Intracel Corporation
No. A-II-1
INTRACEL CORPORATION
Common Stock Warrant
Intracel Corporation, a Delaware corporation (the "Company"), hereby
certifies that, for value received, Northstar High Total Return Fund (the
"Holder") or its registered assigns, is entitled, subject to the terms set forth
below, to purchase from the Company at any time or from time to time before 5:00
P.M. New York time, on August 25, 2003 (the "Expiration Time"), up to One
Hundred Eighty-Eight Thousand Twenty (188,020) fully paid and nonassessable
shares of the Company's Common Stock, $.0001 par value per share, at a purchase
price per share of $7.00 (the "Purchase Price"). The number and character of
such shares of Common Stock and the Purchase Price are subject to adjustment as
provided herein.
This Amended and Restated Warrant (this "Warrant") amends, as of August
25, 1998, the warrant issued on December 28, 1995 pursuant to a certain Warrant
Agreement dated as of December 28, 1995, between the Company and the Holder, a
copy of which is on file at the principal office of the Company. This Warrant
has been amended and restated in accordance with the terms of a certain
Securities Purchase Agreement, dated as of August 25, 1998, between, among other
parties, the Company and the Holder, a copy of which is on file at the principal
office of the Company (the "Securities Purchase Agreement"). This Warrant was
not issued as part of any unit. As used herein, all capitalized terms not
otherwise defined herein shall have the meanings set forth in the Securities
Purchase Agreement.
This warrant is subject to the rights and obligations set forth in that
certain Registration Rights Agreement dated as of August 25, 1998, between,
among other parties, the Company and the Holder, a copy of which is on file at
the principal office of the Company (the "Registration Rights Agreement.")
As used herein the following terms, unless the context otherwise
requires, have the following respective meanings:
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"Accredited Investor" has the meaning set forth in Rule 501 of
Regulation D promulgated under the Securities Act.
"Affiliate" has the meaning specified in Section 1.1 of the Securities
Purchase Agreement.
"Assets" has the meaning specified in Section 1.1 of the Securities
Purchase Agreement.
"Common Stock" means the Company's common stock, $.0001 par value per
share, in existence on the date of this Warrant, or any class or classes
(however designated) replacing such Common Stock as a result of any
recapitalization, reorganization or other reclassification of the Company's
capital stock which affects the holders of Common Stock.
"Company" includes any corporation which shall succeed to or assume the
obligations of the Company hereunder.
"Extraordinary Transaction" means any consolidation of the Company with
or the merger of the Company into any other corporation or entity (other than a
merger in which the Company is the continuing entity) or the sale or transfer of
all or substantially all of the Assets of the Company to another person or
entity.
"Fair Market Value" has the meaning specified in Section 1.1 of the
Securities Purchase Agreement.
"Initial Public Offering" means an underwritten public offering pursuant
to an effective registration statement on Form S-1 or successor form under the
Securities Act covering the offering and sale of Common Stock for the account of
the Company with an aggregate purchase price of at least $40,000,000 and
aggregate net proceeds to the Company of at least $35,000,000.
"Qualified Institutional Buyer" means shall have the meaning specified
in Rule 144A of the Securities Act.
"Required Holders" has the meaning specified in Section 1.1 of the
Securities Purchase Agreement.
"Securities Act" means the Securities Act of 1933, or any successor
Federal statute, and the rules and regulations of the Commission thereunder, all
as the same shall be in effect at the time.
"Securities and Exchange Commission" or "Commission" refers to the
Securities and Exchange Commission or any other Federal agency then
administering the Securities Act.
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"Warrant Shares" means the Common Stock issued or issuable upon exercise
of this Warrant.
1. Restricted Stock.
1.1 This Warrant and all rights hereunder may not be transferred
by the Holder unless (i) the transferee is an Affiliate of the Holder; (ii) the
transferee is a Qualified Institutional Buyer or an Accredited Investor, and,
after giving effect to the transfer, the aggregate unpaid principal amount of
all Notes then held by the Holder and its Affiliates, exceeds $10,000,000, or
(iii) the Company gives its prior written consent to the transfer, which consent
will not be unreasonably withheld.
1.2 If, at the time of any transfer or exchange pursuant to
Section 1.1 (other than a transfer or exchange not involving a change in the
beneficial ownership of this Warrant) of this Warrant or Warrant Shares, such
Warrant or Warrant Shares shall not be registered under the Securities Act, the
Company may require, as a condition of allowing such transfer or exchange, that
the Holder or transferee of such Warrant or Warrant Shares, as the case may be,
furnish to the Company an opinion of counsel reasonably acceptable to the
Company or a "no action" or similar letter from the Securities and Exchange
Commission to the effect that such transfer or exchange may be made without
registration under the Securities Act. In the case of such transfer or exchange,
and in the case of an exercise of this Warrant if the Warrant Shares to be
issued thereupon are not registered pursuant to the Securities Act, the Company
may require a written statement that such Warrant or Warrant Shares, as the case
may be, are being acquired for investment and not with a view to the
distribution thereof (subject, however, to any requirement of Law that the
disposition thereof shall at all times be within the control of such Holder or
transferee, as the case may be).
1.3 Certificates evidencing Warrant Shares shall, unless at the
time of exercise such Warrant Shares are registered under the Securities Act,
bear a legend substantially in the following form:
"THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED, AND MAY NOT BE TRANSFERRED OR OTHERWISE
DISPOSED OF UNLESS IT HAS BEEN REGISTERED UNDER THAT ACT OR AN
EXEMPTION FROM REGISTRATION IS AVAILABLE."
2. Exercise of Warrant.
(a) The Holder may exercise this Warrant in whole or in part (but
not as to fractional shares of Common Stock) by delivering this Warrant prior to
the Expiration Time, with the form of subscription at the end hereof duly
executed by the Holder, to the Company at its principal office.
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(b) The Holder may make payment of the Purchase Price (as such
may be adjusted as provided herein) in respect of the exercise of this Warrant
as follows:
(i) Cash Exercise. By payment to the Company of the
Purchase Price in cash or official bank check;
(ii) Notes Exercise. By surrender to the Company of any
of the Notes issued pursuant to the Securities
Purchase Agreement as of the date hereof, with all
such Notes or other Obligations of the Company so
surrendered being credited against the Purchase
Price in an amount equal to the principal amount
thereof plus the amount of any accrued unpaid
interest thereon to the date of such surrender;
(iii) Securities Exercise. By delivery to the Company of
any other securities issued by the Company, with
such securities being credited against the Purchase
Price in an amount equal to the Fair Market Value
thereof;
(iv) Net Issue Exercise. By an election to receive
shares of the Company's Common Stock, without
payment of additional cash consideration in an
amount equal to the number of shares as to which
this warrant is so exercised, less the number of
shares having a Fair Market Value on the date of
exercise equal to the aggregate Purchase Price then
in effect for the number of shares as to which this
Warrant is so exercised;
(v) Combined Payment Method. By satisfaction of the
Purchase Price for each share being acquired in any
combination of the methods described in sections
(i) through (iv);
provided that, irrespective of the form of payment, the amount paid therefor
must be equal to the aggregate Purchase Price of the Common Stock being
purchased pursuant to such exercise.
(c) In the event of the purchase of less than all of the shares
of Common Stock purchasable under this Warrant, the Company shall execute and
deliver a replacement Warrant of like tenor for the balance of the shares of
Common Stock purchasable thereunder.
3. Delivery of Stock Certificates on Exercise.
Certificates for shares of Common Stock purchased under this
Warrant shall be issued as soon as practicable after the exercise of this
Warrant in accordance with Section 2 hereof, but in no event later than 10 days
after the date of delivery to the Company of this Warrant for exercise, without
charge to the Holder, including, without limitation, any tax that may be payable
in respect thereof, and such certificates shall be issued and registered in the
name of, or, subject to Section 1.1, in such names as may be directed by, the
Holder; provided,
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however, that the Company shall not be required to pay any income tax to which
the Holder may be subject in connection with the issuance of this Warrant or the
shares of Common Stock upon exercise of this Warrant; provided, further, that
the Company shall not be required to pay any tax that may be payable in respect
of any transfer involved in the issuance and delivery of any such certificate in
a name other than that of the Holder and the Company shall not be required to
issue or deliver such certificate unless or until the person or persons
requesting the issuance thereof shall have paid to the Company for payment by it
of the amount of such tax or shall have established to the satisfaction of the
Company that such taxes have been paid.
4. Adjustments to Warrants.
4.1 Adjustment for Certain Dividends and Distributions. If, at
any time or from time to time, the number of shares of Common Stock outstanding
is increased (i) by a stock dividend payable in shares of Common Stock or in any
other security exchangeable for or convertible into Common Stock or (ii) by a
subdivision or split-up of shares of Common Stock, then, following the record
date fixed for the determination of holders of Common Stock entitled to receive
such stock dividend, subdivision or split-up, provision shall be made so that
the Holder of this Warrant shall receive upon exercise thereof in addition to
the number of shares of Common Stock receivable thereupon, the amount of
securities of the Company that it would have received if (A) this Warrant had
been exercised into Common Stock on the date of such event and (B) it had
thereafter retained such securities and all rights and distributions relating to
them.
4.2 Adjustment for Capital Reorganization, Reclassification,
Exchange, or Substitution. If Common Stock is changed into the same or a
different number of shares of any class or classes of stock, whether by capital
reorganization, reclassification, or otherwise, then and in each such event, the
Holder of this Warrant shall have the right thereafter to convert its Warrant
Shares into the kind and amount of shares of stock and other securities and
Assets receivable upon such reorganization, reclassification, or other change.
If, at any time or from time to time, the number of shares of Common Stock
outstanding is decreased by a combination of the outstanding shares of Common
Stock, then, following the record date for such combination, the Purchase Price
shall appropriately increase and the number of Warrant Shares shall be
appropriately decreased.
5. Anti-Dilution Adjustment.
(a) Adjustment for Common Stock Issue. If at any time or from
time to time after the date hereof, the Company issues shares of Common Stock
for a price per share less than the then applicable Purchase Price per share
(other than for Exempt Issuances (as hereinafter defined)) ("Lower Price"), on
the date such additional shares are issued, the Purchase Price shall be reduced
to such Lower Price. This subsection does not apply to (the "Exempt Issuances")
(i) any of the transactions described in Sections 4.1 and 4.2 and the first
paragraph of subsection (b) or the issuance of Common Stock upon the exercise of
such rights described therein, (ii) the issuance by the Company or any of its
Subsidiaries of preferred stock issued in lieu of cash dividends on the
preferred stock as provided for under the terms of the applicable
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designations or provisions of the Company's certificate of incorporation on the
date hereof, (iii) upon the exercise of rights under securities issued before
the date hereof to convert, exchange or exercise such securities into shares of
Common Stock, (iv) the issuance of shares of Common Stock upon the exercise of
rights or warrants issued by the Company prior to the date hereof, or (v) the
issuance of shares of Common Stock upon the exercise of options granted, either
prior to the date hereof or in the future, to employees and directors of the
Company pursuant to employee benefit plans or employee stock option plans
available for grants to the Company's executives in general.
(b) Adjustment for Convertible Securities Issue. If at
any time after the date hereof, the Company issues any securities convertible,
exchangeable or exercisable into shares of Common Stock for a price per share of
Common Stock initially deliverable upon conversion, exchange or exercise of such
securities less than the then applicable Purchase Price per share (other than
for Exempt Derivatives (as hereinafter defined)) (a "Lower Payment"), on the
date of issuance of such securities, the Purchase Price shall be reduced to such
Lower Payment.
This subsection does not apply to (the "Exempt Derivatives") (i) any of
the transactions described in Sections 4.1 and 4.2 and the first paragraph of
subsection (a) or (ii) the rights, warrants or options described in Section
5(a)(iv) and (v).
6. Replacement of Warrants. On receipt of evidence reasonably
satisfactory to the Company of the loss, theft, destruction or mutilation of
this Warrant and, in the case of any such loss, theft or destruction of this
Warrant, on delivery of an indemnity agreement or security reasonably
satisfactory in form and amount to the Company or, in the case of any such
mutilation, on delivery and cancellation of this Warrant, the Company at its
expense will execute and deliver, in lieu thereof, a replacement Warrant of like
tenor.
7. Notices.
7.1 Notices for Adjustments under Section 4 and Section 5. In
the event of:
(a) any taking by the Company of a record of the holders
of any class of securities for the purpose of determining the holders thereof
who are entitled to receive any dividend or other distribution, or any right to
subscribe for, purchase or otherwise acquire any shares of stock of any class or
any other securities or Assets, or to receive any other right; or
(b) any capital reorganization of the Company, any
reclassification or recapitalization of the Capital Stock of the Company or the
occurrence of any Extraordinary Transaction; or
(c) any voluntary or involuntary dissolution, liquidation
or winding-up of the Company; or
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(d) any proposed issue or grant by the Company of any
shares of stock of any class or any other securities, or any right or option to
subscribe for, purchase or otherwise acquire any shares of stock of any class or
any other securities (other than the issuance of Warrant Shares); or
(e) any action by the Company pursuant to Section 5(a) or
(b); then, and in each such event, the Company will send to the Holders, a
notice specifying (i) the date on which any such record is to be taken for the
purpose of such dividend, distribution or right, and stating the amount and
character of such dividend, distribution or right, (ii) the date on which any
such reorganization, reclassification, recapitalization, Extraordinary
Transaction, dissolution, liquidation or winding-up is to take place, and the
time, if any is to be fixed, as of which the holders of record of Common Stock
shall be entitled to exchange their shares of Common Stock for securities or
other Assets deliverable on such reorganization, reclassification,
recapitalization, Extraordinary Transaction, dissolution, liquidation or winding
up, and (iii) the amount and character of any stock or other securities, or
rights or options with respect thereto, proposed to be issued or granted, the
date of such proposed issue or grant the persons or class of persons to whom
such proposed issue or grant is to be offered or made, and the consideration to
be received by the Company therefor.
All notices to be given pursuant to subsection (a) of this Section 7.1
shall be sent at least fifteen (15) days prior to the record date of such events
described therein, and in any event at least twenty-five (25) days prior to the
actual event. All notices to be given pursuant to subsections (b) through (d) of
this Section 7.1 shall be sent at least thirty (30) days prior to the record
date of such events described therein.
7.2 Other Notices. (a) In the event of an Initial Public
Offering, the Company will send a notice of the initial filing of the
registration statement for the Initial Public Offering. Any notice to be given
pursuant to this Section 7.2(a) shall be sent on the date of such filing.
(b) All notices, requests, consents and other
communications hereunder shall be in writing and shall be delivered in person,
or mailed by certified or registered mail, return receipt requested, or
nationwide overnight delivery service (with charges prepaid) as follows:
(i) if to the Company or any Subsidiary, at Intracel
Corporation, 0000 XX Xxxxxxxxx Xxxx, Xxxxx 000,
Xxxxxxxx, Xxxxxxxxxx 00000, Attn: Chief Executive
Officer, Fax Number (000) 000-0000, Confirm Number
(000) 000-0000 with a copy to Xxxxxx X. Xxxxxxxx,
Esq., Xxxxxxxx & Xxxxxxxx LLP, 0000 Xxxxxx xx xxx
Xxxxxxxx, Xxx Xxxx, XX 00000, Fax Number (212)
468-7900, Confirm Number (000) 000-0000; and
(ii) if to the Holders, at their respective addresses
set forth on Schedule 2.1 to the Securities
Purchase Agreement, with a copy to Xxxxx Xxxxxxxxx,
Esq., Reboul, MacMurry, Xxxxxx, Xxxxxxx &
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Kristol, 00 Xxxxxxxxxxx Xxxxx, Xxx Xxxx, Xxx
Xxxx 00000, Fax Number (000) 000-0000, Confirm
Number (000) 000-0000.
or, in any such case, at such other address or addresses as shall have been
furnished in writing by such party to the other. Any notice given hereunder
shall be deemed given and delivered when delivered in person, or three days
after mailing by mail or one day after delivery to an overnight express service
for next day delivery, as the case may be.
8. Consent to Amendments. This Agreement may not be amended or modified
and no provisions hereof may be waived, without the written consent of the
Company and each Holder. However, this Agreement may be amended, and the Company
may take any action herein prohibited, or omit to perform any act herein
required to be performed by it, if the Company shall obtain the written consent
to such amendment, action or omission to act, of the Required Holders, except
that, without the prior written consent of one hundred percent (100%) of the
Holders, no amendment to this Agreement shall change the Expiration Time of this
Warrant, the Purchase Price of this Warrant or the number of shares issuable
hereunder or change the percentage specified in the definition of Required
Holders or consent to the assignment or transfer by the Company of its rights
and obligations under this Agreement or the Ancillary Agreements. Each Holder of
the Warrants shall be bound by any consent authorized by this Section 8 whether
or not such Warrant shall have been marked to indicate such consent, but any
Warrants issued thereafter may bear notation referring to any such consent. Any
amendment or waiver of any provision of any Warrant shall be effective only for
the purposes and period of time expressly set forth therein and shall not
entitle the Company to any other waiver or amendment in similar or other
circumstances. No course of dealing between the Company and any Holder of any
Warrant, nor any failure to exercise or any delay in exercising on the part of
the holder of any Warrant any right, remedy, power or privilege under any
Warrant shall or operate as a waiver thereof; nor shall any single or partial
exercise of any right, remedy, power or privilege under any Warrant preclude any
other right, remedy, power or privilege. The rights, remedies, powers and
privileges under the Warrants are cumulative and not exclusive of any rights,
remedies, powers and privileges provided by Law. As used herein and in the
Warrants, the term "this Agreement and the Ancillary Agreements" and references
thereto shall mean this Agreement and the Ancillary Agreements as they may from
time to time be amended or supplemented.
9. Governing Law; Submission to Jurisdiction. This Warrant shall be
construed in accordance with, and governed by, the internal laws of the State of
New York as permitted by Section 5-401 of the New York General Obligations Law
(or any similar successor provision) without giving effect to any choice of law
rule that would cause the application of the laws of any jurisdiction other than
the State of New York. The Company hereby irrevocably and unconditionally:
(a) submits itself and its properties in any legal action or
proceeding relating to this Agreement and the Ancillary Agreements to which it
is a party, or for recognition and enforcement of any judgment in respect
thereof, to the general jurisdiction of the Courts of the
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000
Xxxxx xx Xxx Xxxx, the courts of the United States of America for the Southern
District of New York, and appellate courts of any thereof;
(b) consents that any such action or proceeding may be brought
in such courts and waives any objection that it may now or hereafter
have to the venue of any such action or proceeding in any such court or
that such action or proceeding was brought in an inconvenient court and
agrees not to plead or claim the same;
(c) agrees that service of process in any such action or
proceeding may be effected by mailing a copy thereof by registered or
certified mail (or any substantially similar form of mail), postage
prepaid, to it at its address set forth in or determined pursuant to
Section 7.2 or at such other address of which the Holders shall have
been notified pursuant thereto;
(d) waives, to the maximum extent not prohibited by Law, any
right it may have to claim or recover in any legal action or proceeding
referred to in this Section 9 any punitive or exemplary damages and any
damages which are not proximately caused by or the reasonably
foreseeable result of the breach which is the subject of such action or
proceeding.
The Company hereby acknowledges that:
(e) it has been advised by counsel in the negotiation, execution
and delivery of this Warrant, the Securities Purchase Agreement and the
Ancillary Agreements;
(f) the Holders do not have any fiduciary relationship with or
duty to the Company arising out of or in connection with this Agreement,
or the Ancillary Agreements; and
(g) no joint venture or partnership exists between the Holders,
on the one hand, and the Company, on the other hand, and the
relationship of the Company and the Holders is that of, inter alia,
debtor and creditor.
THE COMPANY AND THE HOLDERS HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE
TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT, THE
ANCILLARY AGREEMENTS AND FOR ANY COUNTERCLAIM THEREIN.
THIS AGREEMENT AND THE ANCILLARY AGREEMENTS REPRESENT THE FINAL
AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.
THERE ARE NO UNWRITTEN ORAL AGREEMENTS OF THE PARTIES.
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10. Stock to be Reserved. The Company will, at all times reserve and
keep available out of its authorized Common Stock or its treasury shares solely
for the purpose of issue upon the exercise of this Warrant as herein provided,
such number of shares of Common Stock as shall then be issuable upon the
exercise of this Warrant. The Company covenants that all shares of Common Stock
which shall be so issued shall be duly and validly issued and fully paid and
nonassessable and free from all taxes, Liens and charges with respect to the
issue thereof, and without limiting the generality of the foregoing, the Company
covenants that it will from time to time take all such action as may be
requisite to assure that the par value per share of the Common Stock is at all
times equal to or less than the effective Purchase Price. The Company will take
all such action as may be necessary to assure that all such shares of Common
Stock may be so issued without violation of any applicable Law, or any
requirements of any national securities exchange upon which the Common Stock of
the Company may be listed. The Company will not take any action which results in
any adjustment of the Purchase Price if the total number of shares of Common
Stock issued and issuable after such action upon exercise of this Warrant would
exceed the total number of shares of Common Stock then authorized by the
Company's Articles of Incorporation. The Company has not granted and will not
grant any right of first refusal with respect to shares issuable upon exercise
of this Warrant, and there are no preemptive rights associated with such shares.
11. Issue Tax. The issuance of certificates for shares of Common Stock
upon exercise of the Warrants shall be made without charge to the Holder of such
Warrant for any issuance tax in respect thereof provided that the Company shall
not be required to pay any tax which may be payable in respect of any transfer
involved in the issuance and delivery of any certificate in a name other than
that of the Holder of the Warrant.
12. Miscellaneous. The headings in this Warrant are for purposes of
reference only, and shall not limit or otherwise affect any of the terms hereof.
This Warrant is being executed as an instrument under seal. All nouns and
pronouns used herein shall be deemed to refer to the masculine, feminine or
neuter, as the identity of the person or persons to whom reference is made
herein may require.
13. Expiration. This Warrant shall expire, and be without further force
and effect, at 5:00 P.M., New York time, on August 25, 2003.
[see attached signature page]
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Dated: August 25, 1998 INTRACEL CORPORATION
(Corporate Seal) By: /s/ XXXXX X. XxXXXXXX
-----------------------------------
Xxxxx X. XxXxxxxx, President and
Chief Executive Officer
c
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FORM OF SUBSCRIPTION
(To be signed upon exercise of Warrant)
To Intracel Corporation:
The undersigned, pursuant to the provisions of the Warrant issued by
Intracel Corporation and amended on August 25, 1998 and held by the undersigned,
hereby subscribes for and purchases at the price per share provided in such
Warrant __________ shares of Common Stock issuable upon exercise of such
Warrant, and
(i) makes cash payment herewith in an amount equal to
[___%] of the aggregate purchase price therefor;
(ii) surrenders to the Company its Notes due __________
or such other promissory notes or other obligations
issued by the Company, in accordance with Section
2(b)(ii) of such Warrant, as payment herewith in an
amount equal to [___%] of the aggregate purchase
price therefor;
(iii) delivers to the Company other securities issued by
the Company, in accordance with Section 2(b)(iii)
of such Warrant, as payment herewith in an amount
equal to [___%] of the aggregate purchase price
therefor; and/or
(iv) elects Net Issue Exercise as provided in Section
2(b)(iv) of such Warrant as to an amount equal to
[___%] of the aggregate purchase price therefor.
The combination of (i) through (iv) above shall equal 100%
of the purchase price of the shares being issued upon
exercise of the Warrant.
Dated:
-----------------------------------------------
(Name must conform in all respects to name of
holder as specified on the face of the Warrant)
HOLDER:
By:
-------------------------------------------
Name:
Title:
Address:
135
EXHIBIT B-3
AMENDED AND RESTATED SERIES-III WARRANT
136
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, AND MAY NOT BE TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS IT HAS BEEN
REGISTERED UNDER THAT ACT OR AN EXEMPTION FROM REGISTRATION IS AVAILABLE.
AMENDED AND RESTATED SERIES A-III COMMON STOCK WARRANT
Void after Right to purchase 190,888
August 25, 2003 shares of Common Stock
(subject to adjustment)
of Intracel Corporation
No. A-III-1
INTRACEL CORPORATION
Common Stock Warrant
Intracel Corporation, a Delaware corporation (the "Company"), hereby
certifies that, for value received, Northstar High Total Return Fund II (the
"Holder") or its registered assigns, is entitled, subject to the terms set forth
below, to purchase from the Company at any time or from time to time before 5:00
P.M. New York time, on August 25, 2003 (or such earlier date as provided in
Section 7 hereof) (the "Expiration Time"),up to One Hundred Ninety Thousand
Eight Hundred Eighty Eight(190,888) fully paid and nonassessable shares of the
Company's Common Stock, $.0001 par value per share, at a purchase price per
share of $7.00 (the "Purchase Price"). The number and character of such shares
of Common Stock and the Purchase Price are subject to adjustment as provided
herein.
This Amended and Restated Warrant (this "Warrant") amends, as of August
25, 1998 the warrant issued on June 11, 1996 pursuant to a Note and Warrant
Purchase Agreement dated as of June 11, 1996, a copy of which is on file at the
principal office of the Company. This Warrant has been amended and restated in
accordance with the terms of a certain Securities Purchase Agreement, dated as
of August 25, 1998, between, among other parties, the Company and the Holder, a
copy of which is on file at the principal office of the Company (the "Securities
Purchase Agreement"). This Warrant was not issued as part of any unit. As used
herein, all capitalized terms not otherwise defined herein shall have the
meanings set forth in the Securities Purchase Agreement.
This warrant is subject to the rights and obligations set forth in that
certain Registration Rights Agreement dated as of August 25, 1998, between,
among other parties, the Company and the Holder, a copy of which is on file at
the principal office of the Company (the "Registration Rights Agreement.")
137
As used herein the following terms, unless the context otherwise
requires, have the following respective meanings:
"Accredited Investor" has the meaning set forth in Rule 501 of
Regulation D promulgated under the Securities Act.
"Affiliate" has the meaning specified in Section 1.1 of the
Securities Purchase Agreement.
"Assets" has the meaning specified in Section 1.1 of the
Securities Purchase Agreement.
"Common Stock" means the Company's common stock, $.0001 par
value per share, in existence on the date of this Warrant, or any class or
classes (however designated) replacing such Common Stock as a result of any
recapitalization, reorganization or other reclassification of the Company's
capital stock which affects the holders of Common Stock.
"Company" includes any corporation which shall succeed to or
assume the obligations of the Company hereunder.
"Extraordinary Transaction" means any consolidation of the
Company with or the merger of the Company into any other corporation or entity
(other than a merger in which the Company is the continuing entity) or the sale
or transfer of all or substantially all of the Assets of the Company to another
person or entity.
"Fair Market Value" has the meaning specified in Section 1.1 of
the Securities Purchase Agreement.
"Initial Public Offering" means an underwritten public offering
pursuant to an effective registration statement on Form S-1 or successor form
under the Securities Act covering the offering and sale of Common Stock for the
account of the Company with an aggregate purchase price of at least $40,000,000
and aggregate net proceeds to the Company of at least $35,000,000.
"Qualified Institutional Buyer" means shall have the meaning
specified in Rule 144A of the Securities Act.
"Required Holders" has the meaning specified in Section 1.1 of
the Securities Purchase Agreement.
"Securities Act" means the Securities Act of 1933, or any
successor Federal statute, and the rules and regulations of the Commission
thereunder, all as the same shall be in effect at the time.
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"Securities and Exchange Commission" or "Commission" refers to
the Securities and Exchange Commission or any other Federal agency then
administering the Securities Act.
"Warrant Shares" means the Common Stock issued or issuable upon
exercise of this Warrant.
1. Restricted Stock.
1.1 This Warrant and all rights hereunder may not be transferred
by the Holder unless (i) the transferee is an Affiliate of the Holder; or (ii)
the transferee is a Qualified Institutional Buyer or an Accredited Investor,
and, after giving effect to the transfer, the aggregate unpaid principal amount
of all Notes then held by the Holder and its Affiliates, exceeds $10,000,000, or
(iii) the Company gives its prior written consent to the transfer, which consent
will not be unreasonably withheld.
1.2 If, at the time of any transfer or exchange pursuant to
Section 1.1 (other than a transfer or exchange not involving a change in the
beneficial ownership of this Warrant) of this Warrant or Warrant Shares, such
Warrant or Warrant Shares shall not be registered under the Securities Act, the
Company may require, as a condition of allowing such transfer or exchange, that
the Holder or transferee of such Warrant or Warrant Shares, as the case may be,
furnish to the Company an opinion of counsel reasonably acceptable to the
Company or a "no action" or similar letter from the Securities and Exchange
Commission to the effect that such transfer or exchange may be made without
registration under the Securities Act. In the case of such transfer or exchange,
and in the case of an exercise of this Warrant if the Warrant Shares to be
issued thereupon are not registered pursuant to the Securities Act, the Company
may require a written statement that such Warrant or Warrant Shares, as the case
may be, are being acquired for investment and not with a view to the
distribution thereof (subject, however, to any requirement of law that the
disposition thereof shall at all times be within the control of such Holder or
transferee, as the case may be).
1.3 Certificates evidencing Warrant Shares shall, unless at the
time of exercise such Warrant Shares are registered under the Securities Act,
bear a legend substantially in the following form:
"THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED, AND MAY NOT BE TRANSFERRED OR OTHERWISE
DISPOSED OF UNLESS IT HAS BEEN REGISTERED UNDER THAT ACT OR AN
EXEMPTION FROM REGISTRATION IS AVAILABLE."
2. Exercise of Warrant.
(a) The Holder may exercise this Warrant in whole or in part (but
not as to fractional shares of Common Stock) by delivering this Warrant prior to
the Expiration Time,
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with the form of subscription at the end hereof duly executed by the Holder, to
the Company at its principal office.
(b) The Holder may make payment of the Purchase Price (as such
may be adjusted as provided herein) in respect of the exercise of this Warrant
as follows:
(i) Cash Exercise. By payment to the Company of the
Purchase Price in cash or official bank check;
(ii) Notes Exercise. By surrender to the Company of any
of the Notes issued pursuant to the Securities
Purchase Agreement as of the date hereof, with all
such Notes or other Obligations of the Company so
surrendered being credited against the Purchase
Price in an amount equal to the principal amount
thereof plus the amount of any accrued unpaid
interest thereon to the date of such surrender;
(iii) Securities Exercise. By delivery to the Company of
any other securities issued by the Company, with
such securities being credited against the Purchase
Price in an amount equal to the Fair Market Value
thereof;
(iv) Net Issue Exercise. By an election to receive
shares of the Company's Common Stock, without
payment of additional cash consideration in an
amount equal to the number of shares as to which
this Warrant is so exercised, less the number of
shares having a Fair Market Value on the date of
exercise equal to the aggregate Purchase Price then
in effect for the number of shares as to which this
Warrant is so exercised;
(v) Combined Payment Method. By satisfaction of the
Purchase Price for each share being acquired in any
combination of the methods described in sections
(i) through (iv);
provided that, irrespective of the form of payment, the amount paid therefor
must be equal to the aggregate Purchase Price of the Common Stock being
purchased pursuant to such exercise.
(c) In the event of the purchase of less than all of the shares
of Common Stock purchasable under this Warrant, the Company shall execute and
deliver a replacement Warrant of like tenor for the balance of the shares of
Common Stock purchasable thereunder.
3. Delivery of Stock Certificates on Exercise.
Certificates for shares of Common Stock purchased under this
Warrant shall be issued as soon as practicable after the exercise of this
Warrant in accordance with Section 2 hereof, but in no event later than 10 days
after the date of delivery to the Company of this
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Warrant for exercise, without charge to the Holder, including, without
limitation, any tax that may be payable in respect thereof, and such
certificates shall be issued and registered in the name of, or, subject to
Section 1.1, in such names as may be directed by, the Holder; provided, however,
that the Company shall not be required to pay any income tax to which the Holder
may be subject in connection with the issuance of this Warrant or the shares of
Common Stock upon exercise of this Warrant; provided, further, that the Company
shall not be required to pay any tax that may be payable in respect of any
transfer involved in the issuance and delivery of any such certificate in a name
other than that of the Holder and the Company shall not be required to issue or
deliver such certificate unless or until the person or persons requesting the
issuance thereof shall have paid to the Company for payment by it of the amount
of such tax or shall have established to the satisfaction of the Company that
such taxes have been paid.
4. Adjustments to Warrants.
4.1 Adjustment for Certain Dividends and Distributions. If, at
any time or from time to time, the number of shares of Common Stock outstanding
is increased (i) by a stock dividend payable in shares of Common Stock or in any
other security exchangeable for or convertible into Common Stock or (ii) by a
subdivision or split-up of shares of Common Stock, then, following the record
date fixed for the determination of holders of Common Stock entitled to receive
such stock dividend, subdivision or split-up, provision shall be made so that
the Holder of this Warrant shall receive upon exercise thereof in addition to
the number of shares of Common Stock receivable thereupon, the amount of
securities of the Company that it would have received if (A) this Warrant had
been exercised into Common Stock on the date of such event and (B) it had
thereafter retained such securities and all rights and distributions relating to
them.
4.2 Adjustment for Capital Reorganization, Reclassification,
Exchange, or Substitution. If Common Stock is changed into the same or a
different number of shares of any class or classes of stock, whether by capital
reorganization, reclassification, or otherwise, then and in each such event, the
Holder of this Warrant shall have the right thereafter to convert its Warrant
Shares into the kind and amount of shares of stock and other securities and
Assets receivable upon such reorganization, reclassification, or other change.
If, at any time or from time to time, the number of shares of Common Stock
outstanding is decreased by a combination of the outstanding shares of Common
Stock, then, following the record date for such combination, the Purchase Price
shall appropriately increase and the number of Warrant Shares shall be
appropriately decreased.
5. Anti-Dilution Adjustment.
(a) Adjustment for Common Stock Issue. If at any time or from
time to time after the date hereof, the Company issues shares of Common Stock
for a price per share less than the then applicable Purchase Price per share
(other than for Exempt Issuances (as hereinafter defined)) ("Lower Price"), on
the date such additional shares are issued, the Purchase Price shall be reduced
to such Lower Price. This subsection does not apply to (the "Exempt Issuances")
(i) any of the transactions described in Sections 4.1 and 4.2 and the first
paragraph of
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subsection (b) or the issuance of Common Stock upon the exercise of such rights
described therein, (ii) the issuance by the Company's or any of its
Subsidiaries' of preferred stock issued in lieu of cash dividends on the
preferred stock as provided for under the terms of the applicable designations
or provisions of the Company's certificate of incorporation on the date hereof,
(iii) upon the exercise of rights under securities issued before the date hereof
to convert, exchange or exercise such securities into shares of Common Stock,
(iv) the issuance of shares of Common Stock upon the exercise of rights or
warrants issued by the Company prior to the date hereof, or (v) the issuance of
shares of Common Stock upon the exercise of options granted, either prior to the
date hereof or in the future, to employees and directors of the Company pursuant
to employee benefit plans or employee stock option plans available for grants to
the Company's executives in general.
(b) Adjustment for Convertible Securities Issue. If at any
time after the date hereof, the Company issues any securities convertible,
exchangeable or exercisable into shares of Common Stock for a price per share of
Common Stock initially deliverable upon conversion, exchange or exercise of such
securities less than the then applicable Purchase Price per share (other than
for Exempt Derivatives (as hereinafter defined)) (a "Lower Payment"), on the
date of issuance of such securities, the Purchase Price shall be reduced to such
Lower Payment.
This subsection does not apply to (the "Exempt Derivatives") to
(i) any of the transactions described in Sections 4.1 and 4.2 and the first
paragraph of subsection (a) or (ii) the rights, warrants or options described in
Section 5(a)(iv) and (v).
6. Replacement of Warrants. On receipt of evidence reasonably
satisfactory to the Company of the loss, theft, destruction or mutilation of
this Warrant and, in the case of any such loss, theft or destruction of this
Warrant, on delivery of an indemnity agreement or security reasonably
satisfactory in form and amount to the Company or, in the case of any such
mutilation, on delivery and cancellation of this Warrant, the Company at its
expense will execute and deliver, in lieu thereof, a replacement Warrant of like
tenor.
7. Accelerated Expiration of Warrants. Notwithstanding anything in this
Warrant to the contrary, this Warrant and the terms and provisions hereunder
shall immediately expire without further action by the Company or the Holder (a)
upon the closing of an underwritten public offering pursuant to an effective
registration statement on Form S-1 or successor form under the Securities Act
covering the offering and sale of Common Stock for the account of the Company at
a per share price of at least $9.00 (as currently configured) in which the
aggregate proceeds (net of offering expenses and underwriters' discounts or
commissions) received by the Company equals or exceeds $10,000,000 (an "Initial
Public Offering") (provided that the Company shall have given notice of the
initial filing of such registration statement promptly after the date of such
filing); or (b) on the day prior to the effective date of any Extraordinary
Transaction.
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8. Notices.
8.1 Notices for Adjustments under Section 4 and Section 5.
In the event of:
(a) any taking by the Company of a record of the holders
of any class of securities for the purpose of determining the holders thereof
who are entitled to receive any dividend or other distribution, or any right to
subscribe for, purchase or otherwise acquire any shares of stock of any class or
any other securities or Assets, or to receive any other right; or
(b) any capital reorganization of the Company, any
reclassification or recapitalization of the Capital Stock of the Company or the
occurrence of any Extraordinary Transaction; or
(c) any voluntary or involuntary dissolution, liquidation
or winding-up of the Company; or
(d) any proposed issue or grant by the Company of any
shares of stock of any class or any other securities, or any right or option to
subscribe for, purchase or otherwise acquire any shares of stock of any class or
any other securities (other than the issuance of Warrant Shares); or
(e) any action by the Company pursuant to Section 5(a) or
(b); then, and in each such event, the Company will send to the Holders a notice
specifying (i) the date on which any such record is to be taken for the purpose
of such dividend, distribution or right, and stating the amount and character of
such dividend, distribution or right, (ii) the date on which any such
reorganization, reclassification, recapitalization, Extraordinary Transaction,
dissolution, liquidation or winding-up is to take place, and the time, if any is
to be fixed, as of which the holders of record of Common Stock shall be entitled
to exchange their shares of Common Stock for securities or other Assets
deliverable on such reorganization, reclassification, recapitalization,
Extraordinary Transaction, dissolution, liquidation or winding up, and (iii) the
amount and character of any stock or other securities, or rights or options with
respect thereto, proposed to be issued or granted, the date of such proposed
issue or grant the persons or class of persons to whom such proposed issue or
grant is to be offered or made, and the consideration to be received by the
Company therefor.
All notices to be given pursuant to subsection (a) of this Section 8.1
shall be sent at least fifteen (15) days prior to the record date of such events
described therein, and in any event at least twenty-five (25) days prior to the
actual event. All notices to be given pursuant to subsections (b) through (d) of
this Section 8.1 shall be sent at least thirty (30) days prior to the record
date of such events described therein.
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8.2 Other Notices.
(a) In the event of an Initial Public Offering, the Company will
send a notice of the initial filing of the registration statement for the
Initial Public Offering. Any notice to be given pursuant to this Section 8.2(a)
shall be sent the date of such filing.
(b) All notices, requests, consents and other communications
hereunder shall be in writing and shall be delivered in person, or mailed by
certified or registered mail, return receipt requested, or nationwide overnight
delivery service (with charges prepaid) as follows:
(i) if to the Company or any Subsidiary, at Intracel
Corporation, 0000 XX Xxxxxxxxx Xxxx, Xxxxx 000,
Xxxxxxxx, Xxxxxxxxxx 00000, Attn: Chief Executive
Officer, Fax Number (000) 000-0000, Confirm Number
(000) 000-0000, with a copy to Xxxxxx X. Xxxxxxxx,
Esq., Xxxxxxxx & Xxxxxxxx LLP, 0000 Xxxxxx xx xxx
Xxxxxxxx, Xxx Xxxx, XX 00000, Fax Number (212)
468-7900, Confirm Number (000) 000-0000; and
(ii) if to the Holders, at their respective addresses
set forth on Schedule 2.1 to the Securities
Purchase Agreement, with a copy to Xxxxx Xxxxxxxxx,
Esq., Reboul, MacMurry, Xxxxxx, Xxxxxxx & Kristol,
00 Xxxxxxxxxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Fax
Number (000) 000-0000, Confirm Number (212)
841-5781.
or, in any such case, at such other address or addresses as shall have been
furnished in writing by such party to the other. Any notice given hereunder
shall be deemed given and delivered when delivered in person, or three days
after mailing by mail or one day after delivery to an overnight express service
for next day delivery, as the case may be.
9. Consent to Amendments. This Agreement may not be amended or modified
and no provisions hereof may be waived, without the written consent of the
Company, each Subsidiary and each Holder. However, this Agreement may be
amended, and the Company may take any action herein prohibited, or omit to
perform any act herein required to be performed by it, if the Company shall
obtain the written consent to such amendment, action or omission to act, of the
Required Holders, except that, without the prior written consent of one hundred
percent (100%) of the Holders, no amendment to this Agreement shall change the
Expiration Time of this Warrant, the Purchaes Price of this Warrant or the
number of shares issuable hereunder or change the percentage specified in the
definition of Required Holders or consent to the assignment or transfer by the
Company or any of its Subsidiaries of their respective rights and obligations
under this Agreement or the Ancillary Agreements. Each Holder of the Warrants
shall be bound by any consent authorized by this Section 9 whether or not such
Warrant shall have been marked to indicate such consent, but any Warrants issued
thereafter may bear notation referring to any such consent. Any amendment or
waiver of any provision of any Warrant shall be effective only for the purposes
and period of time expressly set forth therein and shall not entitle the Company
to any other waiver or amendment in similar or other circumstances. No
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course of dealing between the Company and any Holder of any Warrant, nor any
failure to exercise or any delay in exercising on the part of the holder of any
Warrant any right, remedy, power or privilege under any Warrant shall or operate
as a waiver thereof; nor shall any single or partial exercise of any right,
remedy, power or privilege under any Warrant preclude any other right, remedy,
power or privilege. The rights, remedies, powers and privileges under the
Warrants are cumulative and not exclusive of any rights, remedies, powers and
privileges provided by Law. As used herein and in the Warrants, the term "this
Agreement and the Ancillary Agreements" and references thereto shall mean this
Agreement and the Ancillary Agreements as they may from time to time be amended
or supplemented.
10. Governing Law; Submission to Jurisdiction. This Warrant shall be
construed in accordance with, and governed by, the internal laws of the State of
New York as permitted by Section 5-401 of the New York General Obligations Law
(or any similar successor provision) without giving effect to any choice of law
rule that would cause the application of the laws of any jurisdiction other than
the State of New York. The Company hereby irrevocably and unconditionally:
(a) submits itself and its properties in any legal action or
proceeding relating to this Agreement and the Ancillary Agreements to which it
is a party, or for recognition and enforcement of any judgment in respect
thereof, to the general jurisdiction of the Courts of the State of New York, the
courts of the United States of America for the Southern District of New York,
and appellate courts of any thereof;
(b) consents that any such action or proceeding may be brought in
such courts and waives any objection that it may now or hereafter have
to the venue of any such action or proceeding in any such court or that
such action or proceeding was brought in an inconvenient court and
agrees not to plead or claim the same;
(c) agrees that service of process in any such action or proceeding
may be effected by mailing a copy thereof by registered or certified
mail (or any substantially similar form of mail), postage prepaid, to it
at its address set forth in or determined pursuant to Section 8.2 or at
such other address of which the Holders shall have been notified
pursuant thereto;
(d) waives, to the maximum extent not prohibited by Law, any right
it may have to claim or recover in any legal action or proceeding
referred to in this Section 10 any punitive or exemplary damages and any
damages which are not proximately caused by or the reasonably
foreseeable result of the breach which is the subject of such action or
proceeding.
The Company hereby acknowledges that:
(e) it has been advised by counsel in the negotiation, execution
and delivery of this Warrant, the Securities Purchase Agreement and the
Ancillary Agreements;
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(f) the Holders do not have any fiduciary relationship with or duty
to the Company arising out of or in connection with this Agreement, or
the Ancillary Agreements; and
(g) no joint venture or partnership exists between the Holders, on
the one hand, and the Company, on the other hand, and the relationship
of the Company and the Holders is that of, inter alia, debtor and
creditor.
THE COMPANY AND THE HOLDERS HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE
TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT, THE
ANCILLARY AGREEMENTS AND FOR ANY COUNTERCLAIM THEREIN.
THIS AGREEMENT AND THE ANCILLARY AGREEMENTS REPRESENT THE FINAL
AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.
THERE ARE NO UNWRITTEN ORAL AGREEMENTS OF THE PARTIES.
11. Stock to be Reserved. The Company will, at all times reserve and
keep available out of its authorized Common Stock or its treasury shares solely
for the purpose of issue upon the exercise of this Warrant as herein provided,
such number of shares of Common Stock as shall then be issuable upon the
exercise of this Warrant. The Company covenants that all shares of Common Stock
which shall be so issued shall be duly and validly issued and fully paid and
nonassesable and free from all taxes, Liens and charges with respect to the
issue thereof, and without limiting the generality of the foregoing, the Company
covenants that it will from time to time take all such action as may be
requisite to assure that the par value per share of the Common Stock is at all
times equal to or less than the effective Purchase Price. The Company will take
all such action as may be necessary to assure that all such shares of Common
Stock may be so issued without violation of any applicable Law, or any
requirements of any national securities exchange upon which the Common Stock of
the Company may be listed. The Company will not take any action which results in
any adjustment of the Purchase Price if the total number of shares of Common
Stock issued and issuable after such action upon exercise of this Warrant would
exceed the total number of shares of Common Stock then authorized by the
Company's Articles of Incorporation. The Company has not granted and will not
grant any right of first refusal with respect to shares issuable upon exercise
of this Warrant, and there are no preemptive rights associated with such shares.
12. Issue Tax. The issuance of certificates for shares of Common Stock
upon exercise of the Warrants shall be made without charge to the Holder of such
Warrant for any issuance tax in respect thereof provided that the Company shall
not be required to pay any tax which may be payable in respect of any transfer
involved in the issuance and delivery of any certificate in a name other than
that of the Holder of the Warrant.
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13. Miscellaneous. The headings in this Warrant are for purposes of
reference only, and shall not limit or otherwise affect any of the terms hereof.
This Warrant is being executed as an instrument under seal. All nouns and
pronouns used herein shall be deemed to refer to the masculine, feminine or
neuter, as the identity of the person or persons to whom reference is made
herein may require.
14. Expiration. This Warrant shall expire, and be without further force
and effect, at 5:00 P.M., New York time, on August 25, 2003.
[see attached signature page]
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Date: August 25, 1998 INTRACEL CORPORATION
(Corporate Seal) By: /s/ XXXXX X. XxXXXXXX
------------------------------------
Xxxxx X. XxXxxxxx, President and
Chief Executive Officer
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FORM OF SUBSCRIPTION
(To be signed upon exercise of Warrant)
To Intracel Corporation:
The undersigned, pursuant to the provisions of the Warrant issued by
Intracel Corporation and amended on August 25, 1998 and held by the undersigned,
hereby subscribes for and purchases at the price per share provided in such
Warrant __________ shares of Common Stock issuable upon exercise of such
Warrant, and
(i) makes cash payment herewith in an amount equal to
[__%] of the aggregate purchase price therefor;
(ii) surrenders to the Company its Notes due __________
or such other promissory notes or other obligations
issued by the Company, in accordance with Section
2(b)(ii) of such Warrant, as payment herewith in an
amount equal to [__%] of the aggregate purchase
price therefor;
(iii) delivers to the Company other securities issued by
the Company, in accordance with Section 2(b)(iii)
of such Warrant, as payment herewith in an amount
equal to [__%] of the aggregate purchase price
therefor; and/or
(iv) elects Net Issue Exercise as provided in Section
2(b)(iv) of such Warrant as to an amount equal to
[__%] of the aggregate purchase price therefor.
The combination of (i) through (iv) above shall equal 100%
of the purchase price of the shares being issued upon
exercise of the Warrant.
Dated:
-----------------------------------------------
(Name must conform in all respects to name of
holder as specified on the face of the Warrant)
HOLDER:
By:
-------------------------------------------
Name:
Title:
Address:
149
EXHIBIT B-4
AMENDED AND RESTATED SERIES III WARRANT
150
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, AND MAY NOT BE TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS IT HAS BEEN
REGISTERED UNDER THAT ACT OR AN EXEMPTION FROM REGISTRATION IS AVAILABLE.
AMENDED AND RESTATED SERIES A-III COMMON STOCK WARRANT
Void after Right to purchase 47,722
August 25, 2003 shares of Common Stock
(subject to adjustment)
of Intracel Corporation
No. A-III-2
INTRACEL CORPORATION
Common Stock Warrant
Intracel Corporation, a Delaware corporation (the "Company"), hereby
certifies that, for value received, Northstar High Yield Fund (the "Holder") or
its registered assigns, is entitled, subject to the terms set forth below, to
purchase from the Company at any time or from time to time before 5:00 P.M. New
York time, on August 25, 2003 (or such earlier date as provided in Section 7
hereof) (the "Expiration Time"),up to Forty Seven Thousand Seven Hundred
Twenty-Two (47,722) fully paid and nonassessable shares of the Company's Common
Stock, $.0001 par value per share, at a purchase price per share of $7.00 (the
"Purchase Price"). The number and character of such shares of Common Stock and
the Purchase Price are subject to adjustment as provided herein.
This Amended and Restated Warrant (this "Warrant") amends, as of August
25, 1998 the warrant issued on June 11, 1996 pursuant to a Note and Warrant
Purchase Agreement dated as of June 11, 1996, a copy of which is on file at the
principal office of the Company. This Warrant has been amended and restated in
accordance with the terms of a certain Securities Purchase Agreement, dated as
of August 25, 1998, between, among other parties, the Company and the Holder, a
copy of which is on file at the principal office of the Company (the "Securities
Purchase Agreement"). This Warrant was not issued as part of any unit. As used
herein, all capitalized terms not otherwise defined herein shall have the
meanings set forth in the Securities Purchase Agreement.
This warrant is subject to the rights and obligations set forth in that
certain Registration Rights Agreement dated as of August 25, 1998, between,
among other parties, the Company and the Holder, a copy of which is on file at
the principal office of the Company (the "Registration Rights Agreement.")
151
As used herein the following terms, unless the context otherwise
requires, have the following respective meanings:
"Accredited Investor" has the meaning set forth in Rule 501 of
Regulation D promulgated under the Securities Act.
"Affiliate" has the meaning specified in Section 1.1 of the
Securities Purchase Agreement.
"Assets" has the meaning specified in Section 1.1 of the
Securities Purchase Agreement.
"Common Stock" means the Company's common stock, $.0001 par
value per share, in existence on the date of this Warrant, or any class or
classes (however designated) replacing such Common Stock as a result of any
recapitalization, reorganization or other reclassification of the Company's
capital stock which affects the holders of Common Stock.
"Company" includes any corporation which shall succeed to or
assume the obligations of the Company hereunder.
"Extraordinary Transaction" means any consolidation of the
Company with or the merger of the Company into any other corporation or entity
(other than a merger in which the Company is the continuing entity) or the sale
or transfer of all or substantially all of the Assets of the Company to another
person or entity.
"Fair Market Value" has the meaning specified in Section 1.1 of
the Securities Purchase Agreement.
"Initial Public Offering" means an underwritten public offering
pursuant to an effective registration statement on Form S-1 or successor form
under the Securities Act covering the offering and sale of Common Stock for the
account of the Company with an aggregate purchase price of at least $40,000,000
and aggregate net proceeds to the Company of at least $35,000,000.
"Qualified Institutional Buyer" means shall have the meaning
specified in Rule 144A of the Securities Act.
"Required Holders" has the meaning specified in Section 1.1 of
the Securities Purchase Agreement.
"Securities Act" means the Securities Act of 1933, or any
successor Federal statute, and the rules and regulations of the Commission
thereunder, all as the same shall be in effect at the time.
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"Securities and Exchange Commission" or "Commission" refers to
the Securities and Exchange Commission or any other Federal agency then
administering the Securities Act.
"Warrant Shares" means the Common Stock issued or issuable upon
exercise of this Warrant.
1. Restricted Stock.
1.1 This Warrant and all rights hereunder may not be transferred
by the Holder unless (i) the transferee is an Affiliate of the Holder; or (ii)
the transferee is a Qualified Institutional Buyer or an Accredited Investor,
and, after giving effect to the transfer, the aggregate unpaid principal amount
of all Notes then held by the Holder and its Affiliates, exceeds $10,000,000, or
(iii) the Company gives its prior written consent to the transfer, which consent
will not be unreasonably withheld.
1.2 If, at the time of any transfer or exchange pursuant to
Section 1.1 (other than a transfer or exchange not involving a change in the
beneficial ownership of this Warrant) of this Warrant or Warrant Shares, such
Warrant or Warrant Shares shall not be registered under the Securities Act, the
Company may require, as a condition of allowing such transfer or exchange, that
the Holder or transferee of such Warrant or Warrant Shares, as the case may be,
furnish to the Company an opinion of counsel reasonably acceptable to the
Company or a "no action" or similar letter from the Securities and Exchange
Commission to the effect that such transfer or exchange may be made without
registration under the Securities Act. In the case of such transfer or exchange,
and in the case of an exercise of this Warrant if the Warrant Shares to be
issued thereupon are not registered pursuant to the Securities Act, the Company
may require a written statement that such Warrant or Warrant Shares, as the case
may be, are being acquired for investment and not with a view to the
distribution thereof (subject, however, to any requirement of law that the
disposition thereof shall at all times be within the control of such Holder or
transferee, as the case may be).
1.3 Certificates evidencing Warrant Shares shall, unless at the
time of exercise such Warrant Shares are registered under the Securities Act,
bear a legend substantially in the following form:
"THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED, AND MAY NOT BE TRANSFERRED OR OTHERWISE
DISPOSED OF UNLESS IT HAS BEEN REGISTERED UNDER THAT ACT OR AN
EXEMPTION FROM REGISTRATION IS AVAILABLE."
2. Exercise of Warrant.
(a) The Holder may exercise this Warrant in whole or in part (but
not as to fractional shares of Common Stock) by delivering this Warrant prior to
the Expiration Time,
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with the form of subscription at the end hereof duly executed by the Holder, to
the Company at its principal office.
(b) The Holder may make payment of the Purchase Price (as such
may be adjusted as provided herein) in respect of the exercise of this Warrant
as follows:
(i) Cash Exercise. By payment to the Company of the
Purchase Price in cash or official bank check;
(ii) Notes Exercise. By surrender to the Company of any
of the Notes issued pursuant to the Securities
Purchase Agreement as of the date hereof, with all
such Notes or other Obligations of the Company so
surrendered being credited against the Purchase
Price in an amount equal to the principal amount
thereof plus the amount of any accrued unpaid
interest thereon to the date of such surrender;
(iii) Securities Exercise. By delivery to the Company of
any other securities issued by the Company, with
such securities being credited against the Purchase
Price in an amount equal to the Fair Market Value
thereof;
(iv) Net Issue Exercise. By an election to receive
shares of the Company's Common Stock, without
payment of additional cash consideration in an
amount equal to the number of shares as to which
this Warrant is so exercised, less the number of
shares having a Fair Market Value on the date of
exercise equal to the aggregate Purchase Price then
in effect for the number of shares as to which this
Warrant is so exercised;
(v) Combined Payment Method. By satisfaction of the
Purchase Price for each share being acquired in any
combination of the methods described in sections
(i) through (iv);
provided that, irrespective of the form of payment, the amount paid therefor
must be equal to the aggregate Purchase Price of the Common Stock being
purchased pursuant to such exercise.
(c) In the event of the purchase of less than all of the shares
of Common Stock purchasable under this Warrant, the Company shall execute and
deliver a replacement Warrant of like tenor for the balance of the shares of
Common Stock purchasable thereunder.
3. Delivery of Stock Certificates on Exercise.
Certificates for shares of Common Stock purchased under this
Warrant shall be issued as soon as practicable after the exercise of this
Warrant in accordance with Section 2 hereof, but in no event later than 10 days
after the date of delivery to the Company of this
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Warrant for exercise, without charge to the Holder, including, without
limitation, any tax that may be payable in respect thereof, and such
certificates shall be issued and registered in the name of, or, subject to
Section 1.1, in such names as may be directed by, the Holder; provided, however,
that the Company shall not be required to pay any income tax to which the Holder
may be subject in connection with the issuance of this Warrant or the shares of
Common Stock upon exercise of this Warrant; provided, further, that the Company
shall not be required to pay any tax that may be payable in respect of any
transfer involved in the issuance and delivery of any such certificate in a name
other than that of the Holder and the Company shall not be required to issue or
deliver such certificate unless or until the person or persons requesting the
issuance thereof shall have paid to the Company for payment by it of the amount
of such tax or shall have established to the satisfaction of the Company that
such taxes have been paid.
4. Adjustments to Warrants.
4.1 Adjustment for Certain Dividends and Distributions. If, at
any time or from time to time, the number of shares of Common Stock outstanding
is increased (i) by a stock dividend payable in shares of Common Stock or in any
other security exchangeable for or convertible into Common Stock or (ii) by a
subdivision or split-up of shares of Common Stock, then, following the record
date fixed for the determination of holders of Common Stock entitled to receive
such stock dividend, subdivision or split-up, provision shall be made so that
the Holder of this Warrant shall receive upon exercise thereof in addition to
the number of shares of Common Stock receivable thereupon, the amount of
securities of the Company that it would have received if (A) this Warrant had
been exercised into Common Stock on the date of such event and (B) it had
thereafter retained such securities and all rights and distributions relating to
them.
4.2 Adjustment for Capital Reorganization, Reclassification,
Exchange, or Substitution. If Common Stock is changed into the same or a
different number of shares of any class or classes of stock, whether by capital
reorganization, reclassification, or otherwise, then and in each such event, the
Holder of this Warrant shall have the right thereafter to convert its Warrant
Shares into the kind and amount of shares of stock and other securities and
Assets receivable upon such reorganization, reclassification, or other change.
If, at any time or from time to time, the number of shares of Common Stock
outstanding is decreased by a combination of the outstanding shares of Common
Stock, then, following the record date for such combination, the Purchase Price
shall appropriately increase and the number of Warrant Shares shall be
appropriately decreased.
5. Anti-Dilution Adjustment.
(a) Adjustment for Common Stock Issue. If at any time or from
time to time after the date hereof, the Company issues shares of Common Stock
for a price per share less than the then applicable Purchase Price per share
(other than for Exempt Issuances (as hereinafter defined)) ("Lower Price"), on
the date such additional shares are issued, the Purchase Price shall be reduced
to such Lower Price. This subsection does not apply to (the "Exempt Issuances")
(i) any of the transactions described in Sections 4.1 and 4.2 and the first
paragraph of
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subsection (b) or the issuance of Common Stock upon the exercise of such rights
described therein, (ii) the issuance by the Company's or any of its
Subsidiaries' of preferred stock issued in lieu of cash dividends on the
preferred stock as provided for under the terms of the applicable designations
or provisions of the Company's certificate of incorporation on the date hereof,
(iii) upon the exercise of rights under securities issued before the date hereof
to convert, exchange or exercise such securities into shares of Common Stock,
(iv) the issuance of shares of Common Stock upon the exercise of rights or
warrants issued by the Company prior to the date hereof, or (v) the issuance of
shares of Common Stock upon the exercise of options granted, either prior to the
date hereof or in the future, to employees and directors of the Company pursuant
to employee benefit plans or employee stock option plans available for grants to
the Company's executives in general.
(b) Adjustment for Convertible Securities Issue. If at any
time after the date hereof, the Company issues any securities convertible,
exchangeable or exercisable into shares of Common Stock for a price per share of
Common Stock initially deliverable upon conversion, exchange or exercise of such
securities less than the then applicable Purchase Price per share (other than
for Exempt Derivatives (as hereinafter defined)) (a "Lower Payment"), on the
date of issuance of such securities, the Purchase Price shall be reduced to such
Lower Payment.
This subsection does not apply to (the "Exempt Derivatives") to
(i) any of the transactions described in Sections 4.1 and 4.2 and the first
paragraph of subsection (a) or (ii) the rights, warrants or options described in
Section 5(a)(iv) and (v).
6. Replacement of Warrants. On receipt of evidence reasonably
satisfactory to the Company of the loss, theft, destruction or mutilation of
this Warrant and, in the case of any such loss, theft or destruction of this
Warrant, on delivery of an indemnity agreement or security reasonably
satisfactory in form and amount to the Company or, in the case of any such
mutilation, on delivery and cancellation of this Warrant, the Company at its
expense will execute and deliver, in lieu thereof, a replacement Warrant of like
tenor.
7. Accelerated Expiration of Warrants. Notwithstanding anything in this
Warrant to the contrary, this Warrant and the terms and provisions hereunder
shall immediately expire without further action by the Company or the Holder (a)
upon the closing of an underwritten public offering pursuant to an effective
registration statement on Form S-1 or successor form under the Securities Act
covering the offering and sale of Common Stock for the account of the Company at
a per share price of at least $9.00 (as currently configured) in which the
aggregate proceeds (net of offering expenses and underwriters' discounts or
commissions) received by the Company equals or exceeds $10,000,000 (an "Initial
Public Offering") (provided that the Company shall have given notice of the
initial filing of such registration statement promptly after the date of such
filing); or (b) on the day prior to the effective date of any Extraordinary
Transaction.
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8. Notices.
8.1 Notices for Adjustments under Section 4 and Section 5.
In the event of:
(a) any taking by the Company of a record of the holders
of any class of securities for the purpose of determining the holders thereof
who are entitled to receive any dividend or other distribution, or any right to
subscribe for, purchase or otherwise acquire any shares of stock of any class or
any other securities or Assets, or to receive any other right; or
(b) any capital reorganization of the Company, any
reclassification or recapitalization of the Capital Stock of the Company or the
occurrence of any Extraordinary Transaction; or
(c) any voluntary or involuntary dissolution, liquidation
or winding-up of the Company; or
(d) any proposed issue or grant by the Company of any
shares of stock of any class or any other securities, or any right or option to
subscribe for, purchase or otherwise acquire any shares of stock of any class or
any other securities (other than the issuance of Warrant Shares); or
(e) any action by the Company pursuant to Section 5(a) or
(b); then, and in each such event, the Company will send to the Holders a notice
specifying (i) the date on which any such record is to be taken for the purpose
of such dividend, distribution or right, and stating the amount and character of
such dividend, distribution or right, (ii) the date on which any such
reorganization, reclassification, recapitalization, Extraordinary Transaction,
dissolution, liquidation or winding-up is to take place, and the time, if any is
to be fixed, as of which the holders of record of Common Stock shall be entitled
to exchange their shares of Common Stock for securities or other Assets
deliverable on such reorganization, reclassification, recapitalization,
Extraordinary Transaction, dissolution, liquidation or winding up, and (iii) the
amount and character of any stock or other securities, or rights or options with
respect thereto, proposed to be issued or granted, the date of such proposed
issue or grant the persons or class of persons to whom such proposed issue or
grant is to be offered or made, and the consideration to be received by the
Company therefor.
All notices to be given pursuant to subsection (a) of this Section 8.1
shall be sent at least fifteen (15) days prior to the record date of such events
described therein, and in any event at least twenty-five (25) days prior to the
actual event. All notices to be given pursuant to subsections (b) through (d) of
this Section 8.1 shall be sent at least thirty (30) days prior to the record
date of such events described therein.
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8.2 Other Notices.
(a) In the event of an Initial Public Offering, the Company will
send a notice of the initial filing of the registration statement for the
Initial Public Offering. Any notice to be given pursuant to this Section 8.2(a)
shall be sent the date of such filing.
(b) All notices, requests, consents and other communications
hereunder shall be in writing and shall be delivered in person, or mailed by
certified or registered mail, return receipt requested, or nationwide overnight
delivery service (with charges prepaid) as follows:
(i) if to the Company or any Subsidiary, at Intracel
Corporation, 0000 XX Xxxxxxxxx Xxxx, Xxxxx 000,
Xxxxxxxx, Xxxxxxxxxx 00000, Attn: Chief Executive
Officer, Fax Number (000) 000-0000, Confirm Number
(000) 000-0000, with a copy to Xxxxxx X. Xxxxxxxx,
Esq., Xxxxxxxx & Xxxxxxxx LLP, 0000 Xxxxxx xx xxx
Xxxxxxxx, Xxx Xxxx, XX 00000, Fax Number (212)
468-7900, Confirm Number (000) 000-0000; and
(ii) if to the Holders, at their respective addresses
set forth on Schedule 2.1 to the Securities
Purchase Agreement, with a copy to Xxxxx Xxxxxxxxx,
Esq., Reboul, MacMurry, Xxxxxx, Xxxxxxx & Kristol,
00 Xxxxxxxxxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Fax
Number (000) 000-0000, Confirm Number (212)
841-5781.
or, in any such case, at such other address or addresses as shall have been
furnished in writing by such party to the other. Any notice given hereunder
shall be deemed given and delivered when delivered in person, or three days
after mailing by mail or one day after delivery to an overnight express service
for next day delivery, as the case may be.
9. Consent to Amendments. This Agreement may not be amended or modified
and no provisions hereof may be waived, without the written consent of the
Company, each Subsidiary and each Holder. However, this Agreement may be
amended, and the Company may take any action herein prohibited, or omit to
perform any act herein required to be performed by it, if the Company shall
obtain the written consent to such amendment, action or omission to act, of the
Required Holders, except that, without the prior written consent of one hundred
percent (100%) of the Holders, no amendment to this Agreement shall change the
Expiration Time of this Warrant, the Purchaes Price of this Warrant or the
number of shares issuable hereunder or change the percentage specified in the
definition of Required Holders or consent to the assignment or transfer by the
Company or any of its Subsidiaries of their respective rights and obligations
under this Agreement or the Ancillary Agreements. Each Holder of the Warrants
shall be bound by any consent authorized by this Section 9 whether or not such
Warrant shall have been marked to indicate such consent, but any Warrants issued
thereafter may bear notation referring to any such consent. Any amendment or
waiver of any provision of any Warrant shall be effective only for the purposes
and period of time expressly set forth therein and shall not entitle the Company
to any other waiver or amendment in similar or other circumstances. No
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course of dealing between the Company and any Holder of any Warrant, nor any
failure to exercise or any delay in exercising on the part of the holder of any
Warrant any right, remedy, power or privilege under any Warrant shall or operate
as a waiver thereof; nor shall any single or partial exercise of any right,
remedy, power or privilege under any Warrant preclude any other right, remedy,
power or privilege. The rights, remedies, powers and privileges under the
Warrants are cumulative and not exclusive of any rights, remedies, powers and
privileges provided by Law. As used herein and in the Warrants, the term "this
Agreement and the Ancillary Agreements" and references thereto shall mean this
Agreement and the Ancillary Agreements as they may from time to time be amended
or supplemented.
10. Governing Law; Submission to Jurisdiction. This Warrant shall be
construed in accordance with, and governed by, the internal laws of the State of
New York as permitted by Section 5-401 of the New York General Obligations Law
(or any similar successor provision) without giving effect to any choice of law
rule that would cause the application of the laws of any jurisdiction other than
the State of New York. The Company hereby irrevocably and unconditionally:
(a) submits itself and its properties in any legal action or
proceeding relating to this Agreement and the Ancillary Agreements to which it
is a party, or for recognition and enforcement of any judgment in respect
thereof, to the general jurisdiction of the Courts of the State of New York, the
courts of the United States of America for the Southern District of New York,
and appellate courts of any thereof;
(b) consents that any such action or proceeding may be brought in
such courts and waives any objection that it may now or hereafter have
to the venue of any such action or proceeding in any such court or that
such action or proceeding was brought in an inconvenient court and
agrees not to plead or claim the same;
(c) agrees that service of process in any such action or proceeding
may be effected by mailing a copy thereof by registered or certified
mail (or any substantially similar form of mail), postage prepaid, to it
at its address set forth in or determined pursuant to Section 8.2 or at
such other address of which the Holders shall have been notified
pursuant thereto;
(d) waives, to the maximum extent not prohibited by Law, any right
it may have to claim or recover in any legal action or proceeding
referred to in this Section 10 any punitive or exemplary damages and any
damages which are not proximately caused by or the reasonably
foreseeable result of the breach which is the subject of such action or
proceeding.
The Company hereby acknowledges that:
(e) it has been advised by counsel in the negotiation, execution
and delivery of this Warrant, the Securities Purchase Agreement and the
Ancillary Agreements;
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(f) the Holders do not have any fiduciary relationship with or duty
to the Company arising out of or in connection with this Agreement, or
the Ancillary Agreements; and
(g) no joint venture or partnership exists between the Holders, on
the one hand, and the Company, on the other hand, and the relationship
of the Company and the Holders is that of, inter alia, debtor and
creditor.
THE COMPANY AND THE HOLDERS HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE
TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT, THE
ANCILLARY AGREEMENTS AND FOR ANY COUNTERCLAIM THEREIN.
THIS AGREEMENT AND THE ANCILLARY AGREEMENTS REPRESENT THE FINAL
AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.
THERE ARE NO UNWRITTEN ORAL AGREEMENTS OF THE PARTIES.
11. Stock to be Reserved. The Company will, at all times reserve and
keep available out of its authorized Common Stock or its treasury shares solely
for the purpose of issue upon the exercise of this Warrant as herein provided,
such number of shares of Common Stock as shall then be issuable upon the
exercise of this Warrant. The Company covenants that all shares of Common Stock
which shall be so issued shall be duly and validly issued and fully paid and
nonassesable and free from all taxes, Liens and charges with respect to the
issue thereof, and without limiting the generality of the foregoing, the Company
covenants that it will from time to time take all such action as may be
requisite to assure that the par value per share of the Common Stock is at all
times equal to or less than the effective Purchase Price. The Company will take
all such action as may be necessary to assure that all such shares of Common
Stock may be so issued without violation of any applicable Law, or any
requirements of any national securities exchange upon which the Common Stock of
the Company may be listed. The Company will not take any action which results in
any adjustment of the Purchase Price if the total number of shares of Common
Stock issued and issuable after such action upon exercise of this Warrant would
exceed the total number of shares of Common Stock then authorized by the
Company's Articles of Incorporation. The Company has not granted and will not
grant any right of first refusal with respect to shares issuable upon exercise
of this Warrant, and there are no preemptive rights associated with such shares.
12. Issue Tax. The issuance of certificates for shares of Common Stock
upon exercise of the Warrants shall be made without charge to the Holder of such
Warrant for any issuance tax in respect thereof provided that the Company shall
not be required to pay any tax which may be payable in respect of any transfer
involved in the issuance and delivery of any certificate in a name other than
that of the Holder of the Warrant.
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13. Miscellaneous. The headings in this Warrant are for purposes of
reference only, and shall not limit or otherwise affect any of the terms hereof.
This Warrant is being executed as an instrument under seal. All nouns and
pronouns used herein shall be deemed to refer to the masculine, feminine or
neuter, as the identity of the person or persons to whom reference is made
herein may require.
14. Expiration. This Warrant shall expire, and be without further force
and effect, at 5:00 P.M., New York time, on August 25, 2003.
[see attached signature page]
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Date: August 25, 1998 INTRACEL CORPORATION
(Corporate Seal) By: /s/ XXXXX X. XxXXXXXX
------------------------------------
Xxxxx X. XxXxxxxx, President and
Chief Executive Officer
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FORM OF SUBSCRIPTION
(To be signed upon exercise of Warrant)
To Intracel Corporation:
The undersigned, pursuant to the provisions of the Warrant issued by
Intracel Corporation and amended on August 25, 1998 and held by the undersigned,
hereby subscribes for and purchases at the price per share provided in such
Warrant __________ shares of Common Stock issuable upon exercise of such
Warrant, and
(i) makes cash payment herewith in an amount equal to
[__%] of the aggregate purchase price therefor;
(ii) surrenders to the Company its Notes due __________
or such other promissory notes or other obligations
issued by the Company, in accordance with Section
2(b)(ii) of such Warrant, as payment herewith in an
amount equal to [__%] of the aggregate purchase
price therefor;
(iii) delivers to the Company other securities issued by
the Company, in accordance with Section 2(b)(iii)
of such Warrant, as payment herewith in an amount
equal to [__%] of the aggregate purchase price
therefor; and/or
(iv) elects Net Issue Exercise as provided in Section
2(b)(iv) of such Warrant as to an amount equal to
[__%] of the aggregate purchase price therefor.
The combination of (i) through (iv) above shall equal 100%
of the purchase price of the shares being issued upon
exercise of the Warrant.
Dated:
-----------------------------------------------
(Name must conform in all respects to name of
holder as specified on the face of the Warrant)
HOLDER:
By:
--------------------------------------------
Name:
Title:
Address:
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163
EXHIBIT B-5
AMENDED AND RESTATED SERIES V WARRANT
164
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, AND MAY NOT BE TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS IT HAS BEEN
REGISTERED UNDER THAT ACT OR AN EXEMPTION FROM REGISTRATION IS AVAILABLE.
AMENDED AND RESTATED SERIES A-V COMMON STOCK WARRANT
Void after Right to purchase 49,066
August 25, 2003 shares of Common Stock
(subject to adjustment)
of Intracel Corporation
No. A-V-1
INTRACEL CORPORATION
Common Stock Warrant
Intracel Corporation, a Delaware corporation (the "Company"), hereby
certifies that, for value received, Northstar High Yield Fund (the "Holder") or
its registered assigns, is entitled, subject to the terms set forth below, to
purchase from the Company at any time or from time to time before 5:00 P.M. New
York time, on August 25, 2003 (the "Expiration Time"), up to Forty Nine Thousand
Sixty-Six (49,066) fully paid and nonassessable shares of the Company's Common
Stock, $.0001 par value per share, at a purchase price per share of $7.64 (the
"Purchase Price"). The number and character of such shares of Common Stock and
the Purchase Price are subject to adjustment as provided herein.
This Amended and Restated Warrant (this "Warrant") amends, as of August
25, 1998, the warrant issued on April 1, 1998 pursuant to a Note and Warrant
Purchase Agreement dated as of April 1, 1998, a copy of which is on file at the
principal office of the Company. This Warrant has been amended and restated in
accordance with the terms of a certain Securities Purchase Agreement, dated as
of August 25, 1998, between, among other parties, the Company and the Holder, a
copy of which is on file at the principal office of the Company (the "Securities
Purchase Agreement"). This Warrant was not issued as part of any unit. As used
herein, all capitalized terms not otherwise defined herein shall have the
meanings set forth in the Securities Purchase Agreement.
This warrant is subject to the rights and obligations set forth in that
certain Registration Rights Agreement dated as of August 25, 1998, between,
among other parties, the Company and the Holder, a copy of which is on file at
the principal office of the Company (the "Registration Rights Agreement.")
As used herein the following terms, unless the context otherwise
requires, have the following respective meanings:
165
"Accredited Investor" has the meaning set forth in Rule
501 of Regulation D promulgated under the Securities Act.
"Affiliate" has the meaning specified in Section 1.1 of
the Securities Purchase Agreement.
"Assets" has the meaning specified in Section 1.1 of the
Securities Purchase Agreement.
"Common Stock" means the Company's common stock, $.0001
par value per share, in existence on the date of this Warrant, or any class or
classes (however designated) replacing such Common Stock as a result of any
recapitalization, reorganization or other reclassification of the Company's
capital stock which affects the holders of Common Stock.
"Company" includes any corporation which shall succeed to
or assume the obligations of the Company hereunder.
"Extraordinary Transaction" means any consolidation of the
Company with or the merger of the Company into any other corporation or entity
(other than a merger in which the Company is the continuing entity) or the sale
or transfer of all or substantially all of the Assets of the Company to another
person or entity.
"Fair Market Value" has the meaning specified in Section
1.1 of the Securities Purchase Agreement.
"Initial Public Offering" means an underwritten public
offering pursuant to an effective registration statement on Form S-1 or
successor form under the Securities Act covering the offering and sale of Common
Stock for the account of the Company with an aggregate purchase price of at
least $40,000,000 and aggregate net proceeds to the Company of at least
$35,000,000.
"Qualified Institutional Buyer" means shall have the
meaning specified in Rule 144A of the Securities Act.
"Required Holders" has the meaning specified in Section
1.1 of the Securities Purchase Agreement.
"Securities Act" means the Securities Act of 1933, or any
successor Federal statute, and the rules and regulations of the Commission
thereunder, all as the same shall be in effect at the time.
"Securities and Exchange Commission" or "Commission"
refers to the Securities and Exchange Commission or any other Federal agency
then administering the Securities Act.
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166
"Warrant Shares" means the Common Stock issued or issuable
upon exercise of this Warrant.
1. Restricted Stock.
1.1 This Warrant and all rights hereunder may not be transferred
by the Holder unless (i) the transferee is an Affiliate of the Holder; or (ii)
the transferee is a Qualified Institutional Buyer or an Accredited Investor,
and, after giving effect to the transfer, the aggregate unpaid principal amount
of all Notes then held by the Holder and its Affiliates, exceeds $10,000,000, or
(iii) the Company gives its prior written consent to the transfer, which consent
will not be unreasonably withheld.
1.2 If, at the time of any transfer or exchange pursuant to
Section 1.1 (other than a transfer or exchange not involving a change in the
beneficial ownership of this Warrant) of this Warrant or Warrant Shares, such
Warrant or Warrant Shares shall not be registered under the Securities Act, the
Company may require, as a condition of allowing such transfer or exchange, that
the Holder or transferee of such Warrant or Warrant Shares, as the case may be,
furnish to the Company an opinion of counsel reasonably acceptable to the
Company or a "no action" or similar letter from the Securities and Exchange
Commission to the effect that such transfer or exchange may be made without
registration under the Securities Act. In the case of such transfer or exchange,
and in the case of an exercise of this Warrant if the Warrant Shares to be
issued thereupon are not registered pursuant to the Securities Act, the Company
may require a written statement that such Warrant or Warrant Shares, as the case
may be, are being acquired for investment and not with a view to the
distribution thereof (subject, however, to any requirement of Law that the
disposition thereof shall at all times be within the control of such Holder or
transferee, as the case may be).
1.3 Certificates evidencing Warrant Shares shall, unless at the
time of exercise such Warrant Shares are registered under the Securities Act,
bear a legend substantially in the following form:
"THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED, AND MAY NOT BE TRANSFERRED OR OTHERWISE
DISPOSED OF UNLESS IT HAS BEEN REGISTERED UNDER THAT ACT OR AN
EXEMPTION FROM REGISTRATION IS AVAILABLE."
2. Exercise of Warrant.
(a) The Holder may exercise this Warrant in whole or in part (but
not as to fractional shares of Common Stock) by delivering this Warrant prior to
the Expiration Time, with the form of subscription at the end hereof duly
executed by the Holder, to the Company at its principal office.
3
167
(b) The Holder may make payment of the Purchase Price (as such
may be adjusted as provided herein) in respect of the exercise of this Warrant
as follows:
(i) Cash Exercise. By payment to the Company of the
Purchase Price in cash or official bank check;
(ii) Notes Exercise. By surrender to the Company of any
of the Notes issued pursuant to the Securities
Purchase Agreement as of the date hereof, with all
such Notes or other Obligations of the Company so
surrendered being credited against the Purchase
Price in an amount equal to the principal amount
thereof plus the amount of any accrued unpaid
interest thereon to the date of such surrender;
(iii) Securities Exercise. By delivery to the Company of
any other securities issued by the Company, with
such securities being credited against the Purchase
Price in an amount equal to the Fair Market Value
thereof;
(iv) Net Issue Exercise. By an election to receive
shares of the Company's Common Stock, without
payment of additional cash consideration in an
amount equal to the number of shares as to which
this Warrant is so exercised, less the number of
shares having a Fair Market Value on the date of
exercise equal to the aggregate Purchase Price then
in effect for the number of shares as to which this
Warrant is so exercised;
(v) Combined Payment Method. By satisfaction of the
Purchase Price for each share being acquired in any
combination of the methods described in sections
(i) through (iv);
provided that, irrespective of the form of payment, the amount paid therefor
must be equal to the aggregate Purchase Price of the Common Stock being
purchased pursuant to such exercise.
(c) In the event of the purchase of less than all of the shares
of Common Stock purchasable under this Warrant, the Company shall execute and
deliver a replacement Warrant of like tenor for the balance of the shares of
Common Stock purchasable thereunder.
3. Delivery of Stock Certificates on Exercise.
Certificates for shares of Common Stock purchased under this
Warrant shall be issued as soon as practicable after the exercise of this
Warrant in accordance with Section 2 hereof, but in no event later than 10 days
after the date of delivery to the Company of this Warrant for exercise, without
charge to the Holder, including, without limitation, any tax that may be payable
in respect thereof, and such certificates shall be issued and registered in the
name of, or, subject to Section 1.1, in such names as may be directed by, the
Holder; provided,
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168
however, that the Company shall not be required to pay any income tax to which
the Holder may be subject in connection with the issuance of this Warrant or the
shares of Common Stock upon exercise of this Warrant; provided, further, that
the Company shall not be required to pay any tax that may be payable in respect
of any transfer involved in the issuance and delivery of any such certificate in
a name other than that of the Holder and the Company shall not be required to
issue or deliver such certificate unless or until the person or persons
requesting the issuance thereof shall have paid to the Company for payment by it
of the amount of such tax or shall have established to the satisfaction of the
Company that such taxes have been paid.
4. Adjustments to Warrants.
4.1 Adjustment for Certain Dividends and Distributions. If, at
any time or from time to time, the number of shares of Common Stock outstanding
is increased (i) by a stock dividend payable in shares of Common Stock or in any
other security exchangeable for or convertible into Common Stock or (ii) by a
subdivision or split-up of shares of Common Stock, then, following the record
date fixed for the determination of holders of Common Stock entitled to receive
such stock dividend, subdivision or split-up, provision shall be made so that
the Holder of this Warrant shall receive upon exercise thereof in addition to
the number of shares of Common Stock receivable thereupon, the amount of
securities of the Company that it would have received if (A) this Warrant had
been exercised into Common Stock on the date of such event and (B) it had
thereafter retained such securities and all rights and distributions relating to
them.
4.2 Adjustment for Capital Reorganization, Reclassification,
Exchange, or Substitution. If Common Stock is changed into the same or a
different number of shares of any class or classes of stock, whether by capital
reorganization, reclassification, or otherwise, then and in each such event, the
Holder of this Warrant shall have the right thereafter to convert its Warrant
Shares into the kind and amount of shares of stock and other securities and
Assets receivable upon such reorganization, reclassification, or other change.
If, at any time or from time to time, the number of shares of Common Stock
outstanding is decreased by a combination of the outstanding shares of Common
Stock, then, following the record date for such combination, the Purchase Price
shall appropriately increase and the number of Warrant Shares shall be
appropriately decreased.
5. Anti-Dilution Adjustment.
(a) Adjustment for Common Stock Issue. If at any time or from
time to time after the date hereof, the Company issues shares of Common Stock
for a price per share less than the then applicable Purchase Price per share
(other than for Exempt Issuances (as hereinafter defined)) ("Lower Price"), on
the date such additional shares are issued, the Purchase Price shall be reduced
to such Lower Price. This subsection does not apply to (the "Exempt Issuances")
(i) any of the transactions described in Sections 4.1 and 4.2 and the first
paragraph of subsection (b) or the issuance of Common Stock upon the exercise of
such rights described therein, (ii) the issuance by the Company or any of its
Subsidiaries of preferred stock issued in lieu of cash dividends on the
preferred stock as provided for under the terms of the applicable
5
169
designations or provisions of the Company's certificate of incorporation on the
date hereof, (iii) upon the exercise of rights under securities issued before
the date hereof to convert, exchange or exercise such securities into shares of
Common Stock, (iv) the issuance of shares of Common Stock upon the exercise of
rights or warrants issued by the Company prior to the date hereof, or (v) the
issuance of shares of Common Stock upon the exercise of options granted, either
prior to the date hereof or in the future, to employees and directors of the
Company pursuant to employee benefit plans or employee stock option plans
available for grants to the Company's executives in general.
(b) Adjustment for Convertible Securities Issue. If at any
time after the date hereof, the Company issues any securities convertible,
exchangeable or exercisable into shares of Common Stock for a price per share of
Common Stock initially deliverable upon conversion, exchange or exercise of such
securities less than the then applicable Purchase Price per share (other than
for Exempt Derivatives (as hereinafter defined)) (a "Lower Payment"), on the
date of issuance of such securities, the Purchase Price shall be reduced to such
Lower Payment.
This subsection does not apply to (the "Exempt Derivatives") (i) any of
the transactions described in Sections 4.1 and 4.2 and the first paragraph of
subsection (a) or (ii) the rights, warrants or options described in Section
5(a)(iv) and (v).
6. Replacement of Warrants. On receipt of evidence reasonably
satisfactory to the Company of the loss, theft, destruction or mutilation of
this Warrant and, in the case of any such loss, theft or destruction of this
Warrant, on delivery of an indemnity agreement or security reasonably
satisfactory in form and amount to the Company or, in the case of any such
mutilation, on delivery and cancellation of this Warrant, the Company at its
expense will execute and deliver, in lieu thereof, a replacement Warrant of like
tenor.
7. Notices.
7.1 Notices for Adjustments under Section 4 and Section 5.
In the event of:
(a) any taking by the Company of a record of the holders
of any class of securities for the purpose of determining the holders thereof
who are entitled to receive any dividend or other distribution, or any right to
subscribe for, purchase or otherwise acquire any shares of stock of any class or
any other securities or Assets, or to receive any other right; or
(b) any capital reorganization of the Company, any
reclassification or recapitalization of the Capital Stock of the Company or the
occurrence of any Extraordinary Transaction; or
(c) any voluntary or involuntary dissolution, liquidation
or winding-up of the Company; or
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170
(d) any proposed issue or grant by the Company of any
shares of stock of any class or any other securities, or any right or option to
subscribe for, purchase or otherwise acquire any shares of stock of any class or
any other securities (other than the issuance of Warrant Shares); or
(e) any action by the Company pursuant to Section 5(a) or
(b); then, and in each such event, the Company will send to the Holders, a
notice specifying (i) the date on which any such record is to be taken for the
purpose of such dividend, distribution or right, and stating the amount and
character of such dividend, distribution or right, (ii) the date on which any
such reorganization, reclassification, recapitalization, Extraordinary
Transaction, dissolution, liquidation or winding-up is to take place, and the
time, if any is to be fixed, as of which the holders of record of Common Stock
shall be entitled to exchange their shares of Common Stock for securities or
other Assets deliverable on such reorganization, reclassification,
recapitalization, Extraordinary Transaction, dissolution, liquidation or winding
up, and (iii) the amount and character of any stock or other securities, or
rights or options with respect thereto, proposed to be issued or granted, the
date of such proposed issue or grant the persons or class of persons to whom
such proposed issue or grant is to be offered or made, and the consideration to
be received by the Company therefor.
All notices to be given pursuant to subsection (a) of this Section 7.1
shall be sent at least fifteen (15) days prior to the record date of such events
described therein, and in any event at least twenty-five (25) days prior to the
actual event. All notices to be given pursuant to subsections (b) through (d) of
this Section 7.1 shall be sent at least thirty (30) days prior to the record
date of such events described therein.
7.2 Other Notices. (a) In the event of an Initial Public
Offering, the Company will send a notice of the initial filing of the
registration statement for the Initial Public Offering. Any notice to be given
pursuant to this Section 7.2(a) shall be sent on the date of such filing.
(b) All notices, requests, consents and other
communications hereunder shall be in writing and shall be delivered in person,
or mailed by certified or registered mail, return receipt requested, or
nationwide overnight delivery service (with charges prepaid) as follows:
(i) if to the Company or any Subsidiary, at Intracel
Corporation, 0000 XX Xxxxxxxxx Xxxx, Xxxxx 000,
Xxxxxxxx, Xxxxxxxxxx 00000, Attn: Chief Executive
Officer, Fax Number (000) 000-0000, Confirm Number
(000) 000-0000, with a copy to Xxxxxx X. Xxxxxxxx,
Esq., Xxxxxxxx & Xxxxxxxx LLP, 0000 Xxxxxx xx xxx
Xxxxxxxx, Xxx Xxxx, XX 00000, Fax Number (212)
468-7900, Confirm Number (000) 000-0000; and
(ii) if to the Holders, at their respective addresses
set forth on Schedule 2.1 to the Securities
Purchase Agreement, with a copy to Xxxxx Xxxxxxxxx,
Esq., Reboul, MacMurry, Xxxxxx, Xxxxxxx &
7
171
Kristol, 00 Xxxxxxxxxxx Xxxxx, Xxx Xxxx, Xxx
Xxxx 00000, Fax Number (000) 000-0000, Confirm
Number (000) 000-0000.
or, in any such case, at such other address or addresses as shall have been
furnished in writing by such party to the other. Any notice given hereunder
shall be deemed given and delivered when delivered in person, or three days
after mailing by mail or one day after delivery to an overnight express service
for next day delivery, as the case may be.
8. Consent to Amendments. This Agreement may not be amended or modified
and no provisions hereof may be waived, without the written consent of the
Company and each Holder. However, this Agreement may be amended, and the Company
may take any action herein prohibited, or omit to perform any act herein
required to be performed by it, if the Company shall obtain the written consent
to such amendment, action or omission to act, of the Required Holders, except
that, without the prior written consent of one hundred percent (100%) of the
Holders, no amendment to this Agreement shall change the Expiration Time of this
Warrant, the Purchase Price of this Warrant or the number of shares issuable
hereunder or change the percentage specified in the definition of Required
Holders or consent to the assignment or transfer by the Company of its rights
and obligations under this Agreement or the Ancillary Agreements. Each Holder of
the Warrants shall be bound by any consent authorized by this Section 8 whether
or not such Warrant shall have been marked to indicate such consent, but any
Warrants issued thereafter may bear notation referring to any such consent. Any
amendment or waiver of any provision of any Warrant shall be effective only for
the purposes and period of time expressly set forth therein and shall not
entitle the Company to any other waiver or amendment in similar or other
circumstances. No course of dealing between the Company and any Holder of any
Warrant, nor any failure to exercise or any delay in exercising on the part of
the holder of any Warrant any right, remedy, power or privilege under any
Warrant shall or operate as a waiver thereof; nor shall any single or partial
exercise of any right, remedy, power or privilege under any Warrant preclude any
other right, remedy, power or privilege. The rights, remedies, powers and
privileges under the Warrants are cumulative and not exclusive of any rights,
remedies, powers and privileges provided by Law. As used herein and in the
Warrants, the term "this Agreement and the Ancillary Agreements" and references
thereto shall mean this Agreement and the Ancillary Agreements as they may from
time to time be amended or supplemented.
9. Governing Law; Submission to Jurisdiction. This Warrant shall be
construed in accordance with, and governed by, the internal laws of the State of
New York as permitted by Section 5-401 of the New York General Obligations Law
(or any similar successor provision) without giving effect to any choice of law
rule that would cause the application of the laws of any jurisdiction other than
the State of New York. The Company hereby irrevocably and unconditionally:
(a) submits itself and its properties in any legal action or
proceeding relating to this Agreement and the Ancillary Agreements to which it
is a party, or for recognition and enforcement of any judgment in respect
thereof, to the general jurisdiction of the Courts of the
8
000
Xxxxx xx Xxx Xxxx, the courts of the United States of America for the Southern
District of New York, and appellate courts of any thereof;
(b) consents that any such action or proceeding may be brought in
such courts and waives any objection that it may now or hereafter have
to the venue of any such action or proceeding in any such court or that
such action or proceeding was brought in an inconvenient court and
agrees not to plead or claim the same;
(c) agrees that service of process in any such action or proceeding
may be effected by mailing a copy thereof by registered or certified
mail (or any substantially similar form of mail), postage prepaid, to it
at its address set forth in or determined pursuant to Section 7.2 or at
such other address of which the Holders shall have been notified
pursuant thereto;
(d) waives, to the maximum extent not prohibited by Law, any right
it may have to claim or recover in any legal action or proceeding
referred to in this Section 9 any punitive or exemplary damages and any
damages which are not proximately caused by or the reasonably
foreseeable result of the breach which is the subject of such action or
proceeding.
The Company hereby acknowledges that:
(e) it has been advised by counsel in the negotiation, execution
and delivery of this Warrant, the Securities Purchase Agreement and the
Ancillary Agreements;
(f) the Holders do not have any fiduciary relationship with or duty
to the Company arising out of or in connection with this Agreement, or
the Ancillary Agreements; and
(g) no joint venture or partnership exists between the Holders, on
the one hand, and the Company, on the other hand, and the relationship
of the Company and the Holders is that of, inter alia, debtor and
creditor.
THE COMPANY AND THE HOLDERS HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE
TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT, THE
ANCILLARY AGREEMENTS AND FOR ANY COUNTERCLAIM THEREIN.
THIS AGREEMENT AND THE ANCILLARY AGREEMENTS REPRESENT THE FINAL
AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.
THERE ARE NO UNWRITTEN ORAL AGREEMENTS OF THE PARTIES.
9
173
10. Stock to be Reserved. The Company will, at all times reserve and
keep available out of its authorized Common Stock or its treasury shares solely
for the purpose of issue upon the exercise of this Warrant as herein provided,
such number of shares of Common Stock as shall then be issuable upon the
exercise of this Warrant. The Company covenants that all shares of Common Stock
which shall be so issued shall be duly and validly issued and fully paid and
nonassessable and free from all taxes, Liens and charges with respect to the
issue thereof, and without limiting the generality of the foregoing, the Company
covenants that it will from time to time take all such action as may be
requisite to assure that the par value per share of the Common Stock is at all
times equal to or less than the effective Purchase Price. The Company will take
all such action as may be necessary to assure that all such shares of Common
Stock may be so issued without violation of any applicable Law, or any
requirements of any national securities exchange upon which the Common Stock of
the Company may be listed. The Company will not take any action which results in
any adjustment of the Purchase Price if the total number of shares of Common
Stock issued and issuable after such action upon exercise of this Warrant would
exceed the total number of shares of Common Stock then authorized by the
Company's Articles of Incorporation. The Company has not granted and will not
grant any right of first refusal with respect to shares issuable upon exercise
of this Warrant, and there are no preemptive rights associated with such shares.
11. Issue Tax. The issuance of certificates for shares of Common Stock
upon exercise of the Warrants shall be made without charge to the Holder of such
Warrant for any issuance tax in respect thereof provided that the Company shall
not be required to pay any tax which may be payable in respect of any transfer
involved in the issuance and delivery of any certificate in a name other than
that of the Holder of the Warrant.
12. Miscellaneous. The headings in this Warrant are for purposes of
reference only, and shall not limit or otherwise affect any of the terms hereof.
This Warrant is being executed as an instrument under seal. All nouns and
pronouns used herein shall be deemed to refer to the masculine, feminine or
neuter, as the identity of the person or persons to whom reference is made
herein may require.
13. Expiration. This Warrant shall expire, and be without further force
and effect, at 5:00 P.M., New York time, on August 25, 2003.
[see attached signature page]
10
174
Dated: August 25, 1998 INTRACEL CORPORATION
(Corporate Seal) By: /s/ XXXXX X. XxXXXXXX
-----------------------------------
Xxxxx X. XxXxxxxx, Chief
Executive Officer
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175
FORM OF SUBSCRIPTION
(To be signed upon exercise of Warrant)
To Intracel Corporation:
The undersigned, pursuant to the provisions of the Warrant issued by
Intracel Corporation and amended on August 25, 1998 and held by the undersigned,
hereby subscribes for and purchases at the price per share provided in such
Warrant __________ shares of Common Stock issuable upon exercise of such
Warrant, and
(i) makes cash payment herewith in an amount equal to
[___%] of the aggregate purchase price therefor;
(ii) surrenders to the Company its Notes due __________
or such other promissory notes or other obligations
issued by the Company, in accordance with Section
2(b)(ii) of such Warrant, as payment herewith in an
amount equal to [___%] of the aggregate purchase
price therefor;
(iii) delivers to the Company other securities issued by
the Company, in accordance with Section 2(b)(iii)
of such Warrant, as payment herewith in an amount
equal to [___%] of the aggregate purchase price
therefor; and/or
(iv) elects Net Issue Exercise as provided in Section
2(b)(iv) of such Warrant as to an amount equal to
[___%] of the aggregate purchase price therefor.
The combination of (i) through (iv) above shall equal 100%
of the purchase price of the shares being issued upon
exercise of the Warrant.
Dated:
-----------------------------------------------
(Name must conform in all respects to name of
holder as specified on the face of the Warrant)
HOLDER:
By:
--------------------------------------------
Name:
Title:
Address:
176
EXHIBIT B-6
AMENDED AND RESTATED SERIES V WARRANT
177
THIS SECURITY HAS NOT BEEN RESTRICTED UNDER THE SECURITIES ACT OF
1933, AS AMENDED, AND MAY NOT BE TRANSFERRED OR OTHERWISE DISPOSE
OF UNLESS IT HAS BEEN REGISTERED UNDER THAT ACT OF AN EXEMPTION
FROM REGISTRATION IS AVAILABLE.
AMENDED AND RESTATED SERIES A-V COMMON STOCK WARRANT
----------------------------------------------------
Void after Right to purchase 49,066
August 25, 2003 shares of Common Stock
(subject to adjustment)
of Intracel Corporation
No. A-V-2
INTRACEL CORPORATION
Common Stock Warrant
Intracel Corporation, a Delaware corporation (the "Company"), hereby
certifies that, for value received, Northstar High Total Return Fund II (the
"Holder") or its registered assigns, is entitled, subject to the terms set
forth below, to purchase from the Company at any time or from time to time
before 5:00 P.M. New York time, on August 25, 2003 (the "Expiration Time"), up
to Forty Nine Thousand Sixty-Six (49,066) fully paid and nonassessable shares
of the Company's Common Stock, $.0001 par value per share, at a purchase price
per share of $7.64 (the "Purchase Price"). The number and character of such
shares of Common Stock and the Purchase Price are subject to adjustment as
provided herein.
This Amended and Restated Warrant (this "Warrant") amends, as of August
25, 1998, the warrant issued on April 1, 1998 pursuant to a Note and Warrant
Purchase Agreement dated as of April 1, 1998, a copy of which is on file at the
principal office of the Company. This Warrant has been amended and restated in
accordance with the terms of a certain Securities Purchase Agreement, dated as
of August 25, 1998, between, and among other parties, the Company and the
Holder, a copy of which is on file at the principal office of the Company (the
"Securities Purchase Agreement"). This Warrant was not issued as part of any
unit. As used herein, all capitalized terms not otherwise defined herein shall
have the meanings set forth in the Securities Purchase Agreement.
This warrant is subject to the rights and obligations set forth in that
certain Registration Rights Agreement dated as of August 25, 1998, between,
among other parties, the Company and the Holder, a copy of which is on file at
the principal office of the Company (the "Registration Rights Agreement.")
As used herein the following terms, unless the context otherwise requires,
have the following respective meanings:
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"Accredited Investor" has the meaning set forth in Rule 501 of
Regulation D promulgated under the Securities Act.
"Affiliate" has the meaning specified in Section 1.1 of the Securities
Purchase Agreement.
"Assets" has the meaning specified in Section 1.1 of the Securities
Purchase Agreement.
"Common Stock" means the Company's common stock, $.0001 par value per
share, in existence on the date of this Warrant, or any class or classes
(however designated) replacing such Common Stock as a result of any
recapitalization, reorganization or other reclassification of the Company's
capital stock which affects the holders of Common Stock.
"Company" includes any corporation which shall succeed to or assume the
obligations of the Company hereunder.
"Extraordinary Transaction" means any consolidation of the Company with
or the merger of the Company into any other corporation or entity (other than a
merger in which the Company is the continuing entity) or the sale or transfer
of all or substantially all of the Assets of the Company to another person or
entity.
"Fair Market Value" has the meaning specified in Section 1.1 of the
Securities Purchase Agreement.
"Initial Public Offering" means as underwritten public offering
pursuant to an effective registration statement on Form S-1 or successor form
under the Securities Act covering the offering and sale of Common Stock for the
account of the Company with an aggregate purchase price of at least $40,000,000
and aggregate net proceeds to the Company of at least $35,000,000.
"Qualified Institutional Buyer" means shall have the meaning specified
in Rule 144A of the Securities Act.
"Required Holders" has the meaning specified in Section 1.1 of the
Securities Purchase Agreement.
"Securities Act" means the Securities Act of 1933, or any successor
Federal statute, and the rules and regulations of the Commission thereunder,
all as the same shall be in effect at the time.
"Securities and Exchange Commission" or "commission" refers to the
Securities and Exchange Commission or any other Federal agency then
administering the Securities Act.
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"Warrant Shares" means the Common Stock issued or issuable upon
exercise of this Warrant.
1. RESTRICTED STOCK.
1.1 This Warrant and all rights hereunder may not be
transferred by the Holder unless (i) the transferee is an Affiliate of the
Holder; or (ii) the transferee is a Qualified Institutional Buyer or an
Accredited Investor, and, after giving effect to the transfer, the aggregate
unpaid principal amount of all Notes then held by the Holder and its
Affiliates, exceeds $10,000,000, or (iii) the Company gives its prior written
consent to the transfer, which consent will not be unreasonably withheld.
1.2 If, at the time of any transfer or exchange pursuant to
Section 1.1 (other than a transfer or exchange not involving a change in the
beneficial ownership of this Warrant) of this Warrant or Warrant Shares, such
Warrant or Warrant Shares shall not be registered under the Securities Act, the
Company may require, as a condition of allowing such transfer or exchange, that
the Holder or transferee of such Warrant or Warrant Shares, as the case may be,
furnish to the Company an opinion of counsel reasonably acceptable to the
Company or a "no action" or similar letter from the Securities and Exchange
Commission to the effect that such transfer or exchange may be made without
registration under the Securities Act. In the case of such transfer or
exchange, and in the case of an exercise of this Warrant if the Warrant Shares
to be issued thereupon are not registered pursuant to the Securities Act, the
Company may require a written statement that such Warrant or Warrant Shares, as
the case may be, are being acquired for investment and not with a view to the
distribution thereof (subject, however, to any requirement of Law that the
disposition thereof shall at all times be within the control of such Holder or
transferee, as the case may be).
1.3 Certificates evidencing Warrant Shares shall, unless at
the time of exercise such Warrant Shares are registered under the Securities
Act, bear a legend substantially in the following form:
"THIS SECURITY HAS NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, AND
MAY NOT BE TRANSFERRED OR OTHERWISE DISPOSED
OF UNLESS IT HAS BEEN REGISTERED UNDER THAT
ACT OR AN EXEMPTION FROM REGISTRATION IS
AVAILABLE."
2. EXERCISE OF WARRANT
(a) The Holder may exercise this Warrant in whole or in
part (but not as to fractional shares of Common Stock) by delivering this
Warrant prior to the Expiration Time, with the form of subscription at the end
hereof duly executed by the Holder, to the Company at its principal office,
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(b) The Holder may make payment of the Purchase Price (as such may
be adjusted as provided herein) in respect of the exercise of this Warrant as
follows:
(i) Cash Exercise. By payment to the Company of the Purchase
Price in cash or official bank check;
(ii) Notes Exercise. By surrender to the Company of any of the
Notes issued pursuant to the Securities Purchase
Agreement as of the date hereof, with all such Notes or
other Obligations of the Company so surrendered being
credited against the Purchase Price in an amount equal to
the principal amount thereof plus the amount of any
accrued unpaid interest thereon to the date of such
surrender;
(iii) Securities Exercise. By delivery to the Company of any
other securities issued by the Company, with such
securities being credited against the Purchase Price in
an amount equal to the Fair Market Value thereof;
(iv) Net Issue Exercise. By an election to receive shares of
the Company's Common Stock, without payment of additional
cash consideration in an amount equal to the number of
shares as to which this Warrant is so exercised, less the
number of shares having a Fair Market Value on the date
of exercise equal to the aggregate Purchase Price then in
effect for the number of shares as to which this Warrant
is so exercised;
(v) Combined Payment Method. By satisfaction of the Purchase
Price for each share being acquired in any combination of
the methods described in sections (i) through (iv);
provided that, irrespective of the form of payment, the amount paid therefor
must be equal to the aggregate Purchase Price of the Common Stock being
purchased pursuant to such exercise.
(c) In the event of the purchase of less than all of the shares of
Common Stock purchasable under this Warrant, the Company shall execute and
deliver a replacement Warrant of like tenor for the balance of the shares of
Common Stock purchasable thereunder.
3. Delivery of Stock Certificates on Exercise.
Certificates for shares of Common Stock purchased under this Warrant
shall be issued as soon as practicable after the exercise of this Warrant in
accordance with Section 2 hereof, but in no event later than 10 days after the
date of delivery to the Company of this Warrant for exercise, without charge to
the Holder, including, without limitation, any tax that may be payable in
respect thereof, and such certificates shall be issued and registered in the
name of, or, subject to Section 1.1, in such names as may be directed by, the
Holder; provided,
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however, that the Company shall not be required to pay any income tax to which
the Holder may be subject in connection with the issuance of this Warrant or
the shares of Common Stock upon exercise of this Warrant; provided, further,
that the Company shall not be required to pay any tax that may be payable in
respect of any transfer involved in the issuance and delivery of any such
certificate in a name other than that of the Holder and the Company shall not
be required to issue or deliver such certificate unless or until the person or
persons requesting the issuance thereof shall have paid to the Company for
payment by it of the amount of such tax or shall have established to the
satisfaction of the Company that such taxes have been paid.
4. Adjustments to Warrants.
4.1 Adjustment for Certain Dividends and Distributions. If, at any
time or from time to time, the number of shares of Common Stock outstanding is
increased (i) by a stock dividend payable in shares of Common Stock or in any
other security exchangeable for or convertible into Common Stock or (ii) by a
subdivision or split-up of shares of Common Stock, then, following the record
date fixed for the determination of holders of Common Stock entitled to receive
such stock dividend, subdivision or split-up, provision shall be made so that
the Holder of this Warrant shall receive upon exercise thereof in addition to
the number of shares of Common Stock receivable thereupon, the amount of
securities of the Company that it would have received if (A) this Warrant had
been exercised into Common Stock on the date of such event and (B) it had
thereafter retained such securities and all rights and distributions relating to
them.
4.2 Adjustment for Capital Reorganization, Reclassification,
Exchange, or Substitution. If Common Stock is changed into the same or a
different number of shares of any class or classes of stock, whether by capital
reorganization, reclassification, or otherwise, then and in each such event,
the Holder of this Warrant shall have the right thereafter to convert its
Warrant Shares into the kind and amount of shares of stock and other securities
and Assets receivable upon such reorganization, reclassification, or other
change. If, at any time or from time to time, the number of shares of Common
Stock outstanding is decreased by a combination of the outstanding shares of
Common stock, then, following the record date for such combination, the
Purchase Price shall appropriately increase and the number of Warrant Shares
shall be appropriately decreased.
5. Anti-Dilution Adjustment.
(a) Adjustment for Common Stock Issue. If at any time or from time
to time after the date hereof, the Company issues shares of Common stock for a
price per share less than the then applicable Purchase Price per share (other
than for Exempt Issuances (as hereinafter defined)) ("Lower Price"), on the date
such additional shares are issued, the Purchase Price shall be reduced to such
Lower Price. This subsection does not apply to (the "Exempt Issuances") (i) any
of the transactions described in Sections 4.1 and 4.2 and the first paragraph of
subsection (b) or the issuance of Common Stock upon the exercise of such rights
described therein, (ii) the issuance by the Company or any of its Subsidiaries
of preferred stock issued in lieu of cash dividends on the preferred stock as
provided for under the terms of the applicable
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designations or provisions of the Company's certificate of incorporation on the
date hereof, (iii) upon the exercise of rights under securities issued before
the date hereof to convert, exchange or exercise such securities into shares
Common Stock, (iv) the issuance of shares of Common Stock upon exercise of
rights or warrants issued by the Company prior to the date hereof, or (v) the
issuance of shares of Common Stock upon the exercise of options granted, either
prior to the date hereof or in the future, to employees and directors of the
Company pursuant to employee benefit plans or employee stock option plans
available for grants to the Company's executives in general.
(b) Adjustment for Convertible Securities Issue. If at any
time after the date hereof, the Company issues any securities convertible,
exchangeable or exercisable into shares of Common Stock for a price per share of
Common Stock initially deliverable upon conversion, exchange or exercise of such
securities less than the then applicable Purchase Price per share (other than
for Exempt Derivatives (as hereinafter defined)) (a "Lower Payment"), on the
date of issuance of such securities, the Purchase Price shall be reduced to such
Lower Payment.
This subsection does not apply to (the "Exempt Derivatives") (i)
any of the transactions described in Sections 4.1 and 4.2 and the first
paragraph of subsection (a) or (ii) the rights, warrants or options described
in Section 5(a)(iv) and (v).
6. Replacement of Warrants. On receipt of evidence reasonably
satisfactory to the Company of the loss, theft, destruction or mutilation of
this Warrant and, in the case of any such loss, theft or destruction of this
Warrant, on delivery of an indemnity agreement or security reasonably
satisfactory in form and amount to the Company or, in the case of any such
mutilation, on delivery and cancellation of this Warrant, the Company at its
expense will execute and deliver, in lieu thereof, a replacement Warrant of
like tenor.
7. Notices.
7.1 Notices for Adjustments under Section 4 and Section 5. In the
event of:
(a) any taking by the Company of a record of the holders of
any class of securities for the purpose of determining the holders thereof who
are entitled to receive any dividend or other distribution, or any right to
subscribe for, purchase or otherwise acquire any shares of stock of any class
or any other securities or Assets, or to receive any other right; or
(b) any capital reorganization of the Company, any
reclassification or recapitalization of the Capital Stock of the Company or the
occurrence of any Extraordinary Transaction; or
(c) any voluntary or involuntary dissolution, liquidation
or winding-up of the Company; or
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(d) any proposed issue or grant by the Company of any shares of stock of
any class or any other securities, or any right or option to subscribe for,
purchase or otherwise acquire any shares of stock of any class or any other
securities (other than the issuance of Warrant Shares); or
(e) any action by the Company pursuant to Section 5(a) or (b);
then, and in each such event, the Company will send to the Holders, a notice
specifying (i) the date on which any such record is to be taken for the purpose
of such dividend, distribution or right, and stating the amount and character
of such dividend, distribution or right, (ii) the date on which any such
reorganization, reclassification, recapitalization, Extraordinary Transaction,
dissolution, liquidation or winding-up is to take place, and the time, if any
is to be fixed, as of which the holders of record of Common Stock shall be
entitled to exchange their shares of Common Stock for securities or other
Assets deliverable on such reorganization, reclassification, recapitalization,
Extraordinary Transaction, dissolution, liquidation or winding up, and (iii)
the amount and character of any stock or other securities, or rights or options
with respect thereto, proposed to be issued or granted, the date of such
proposed issue or grant the persons or class of persons to whom such proposed
issue or grant is to be offered or made, and the consideration to be received
by the Company therefor.
All notices to be given pursuant to subsection (a) of this Section 7.1
shall be sent at least fifteen (15) days prior to the record date of such
events described therein, and in any event at least twenty-five (25) days prior
to the actual event. All notices to be given pursuant to subsections (b)
through (d) of this Section 7.1 shall be sent at least thirty (30) days prior
to the record date of such events described therein.
7.2 Other Notices. (a) In the event of an Initial Public Offering, the
Company will send a notice of the initial filing of the registration statement
for the Initial Public Offering. Any notice to be given pursuant to this
Section 7.2(a) shall be sent on the date of such filing.
(b) All notices, requests, consents and other communications hereunder
shall be in writing and shall be delivered in person, or mailed by certified or
registered mail, return receipt requested, or nationwide overnight delivery
service (with charges prepaid) as follows:
(i) if to the Company or any Subsidiary, at Intracel Corporation,
0000 XX Xxxxxxxxx Xxxx, Xxxxx 000, Xxxxxxxx, Xxxxxxxxxx 00000,
Attn: Chief Executive Officer, Fax Number (000) 000-0000,
Confirm Number (000) 000-0000, with a copy to Xxxxxx X.
Xxxxxxxx, Esq., Xxxxxxxx & Xxxxxxxx LLP, 0000 Xxxxxx xx xxx
Xxxxxxxx, Xxx Xxxx, XX 00000, Fax Number (000) 000-0000,
Confirm Number (000) 000-0000; and
(ii) if to the Holders, at their respective addresses set forth on
Schedule 2.1 to the Securities Purchase Agreement, with a copy
to Xxxxx Xxxxxxxxx, Esq., Reboul, MacMurry, Xxxxxx, Xxxxxxx &
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Kristol, 00 Xxxxxxxxxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Fax
Number (000) 000-0000, Confirm Number (000) 000-0000.
or, in any such case, at such other address or addresses as shall have been
furnished in writing by such party to the other. Any notice given hereunder
shall be deemed given and delivered when delivered in person, or three days
after mailing by mail or one day after delivery to an overnight express service
for next day delivery, as the case may be.
8. Consent to Amendments. This Agreement may not be amended or
modified and no provisions hereof may be waived, without the written consent of
the Company and each Holder. However, this Agreement may be amended, and the
Company may take any action herein prohibited, or omit to perform any act
herein required to be performed by it, if the Company shall obtain the written
consent to such amendment, action or omission to act, of the Required Holders,
except that, without the prior written consent of one hundred percent (100%) of
the Holders, no amendment to this Agreement shall change the Expiration Time of
this Warrant, the Purchase Price of this Warrant or the number of shares
issuable hereunder or change the percentage specified in the definition of
Required Holders or consent to the assignment or transfer by the Company of its
rights and obligations under this Agreement or the Ancillary Agreements. Each
Holder of the Warrants shall be bound by any consent authorized by this Section
8 whether or not such Warrant shall have been marked to indicate such consent,
but any Warrants issued thereafter may bear notation referring to any such
consent. Any amendment or waiver of any provision of any Warrant shall be
effective only for the purposes and period of time expressly set forth therein
and shall not entitle the Company to any other waiver or amendment in similar or
other circumstances. No course of dealing between the Company and any Holder of
any Warrant, nor any failure to exercise or any delay in exercising on the part
of the holder of any Warrant any right, remedy, power or privilege under any
Warrant shall or operate as a waiver thereof; nor shall any single or partial
exercise of any right, remedy, power or privilege under any Warrant preclude
any other right, remedy, power or privilege. The rights, remedies, powers and
privileges under the Warrants are cumulative and not exclusive of any rights,
remedies, powers and privileges provided by Law. As used herein and in the
Warrants, the term "this Agreement and the Ancillary Agreements" and
references thereto shall mean this Agreement and the Ancillary Agreements as
they may from time to time be amended or supplemented.
9. Governing Law; Submission to Jurisdiction. This Warrant shall be
construed in accordance with, and governed by, the internal laws of the State
of New York as permitted by Section 5-401 of the New York General Obligations
Law (or any similar successor provision) without giving effect to any choice of
law rule that would cause the application of the laws of any jurisdiction other
than the State of New York. The Company hereby irrevocably and unconditionally:
(a) submits itself and its properties in any legal action or
proceeding relating to this Agreement and the Ancillary Agreements to which it
is a party, or for recognition and enforcement of any judgment in respect
thereof, to the general jurisdiction of the Courts of the
8
000
Xxxxx xx Xxx Xxxx, the courts of the United States of America for the Southern
District of New York, and appellate courts of any thereof;
(b) consents that any such action or proceeding may be brought in
such courts and waives any obligation that it may now or hereafter have to
the venue of any such action or proceeding in any such court or that such
action or proceeding was brought in an inconvenient court and agrees not to
plead or claim the same;
(c) agrees that service of process in any such action or proceeding
may be effected by mailing a copy thereof by registered or certified mail
(or any substantially similar form of mail), postage prepaid, to it at its
address set forth in or determined pursuant to Section 7.2 or at such other
address of which the Holders shall have been notified pursuant thereto;
(d) waives, to the maximum extent not prohibited by Law, any right it
may have to claim or recover in any legal action or proceeding referred to
in this Section 9 any punitive or exemplary damages and any damages which
are not proximately caused by or the reasonably foreseeable result of the
breach which is subject of such action or proceeding.
The Company hereby acknowledges that:
(e) it has been advised by counsel in the negotiation, execution and
delivery of this Warrant, the Securities Purchase Agreement and the
Ancillary Agreements;
(f) the Holders do not have any fiduciary relationship with or duty
to the Company arising out of or in connection with this Agreement, or the
Ancillary Agreements; and
(g) no joint venture or partnership exists between the Holders, on
the one hand, and the Company, on the other hand, and the relationship of
the Company and the Holders is that of, inter alia, debtor and creditor.
THE COMPANY AND THE HOLDERS HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE
TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT, THE
ANCILLARY AGREEMENTS AND FOR ANY COUNTERCLAIM THEREIN.
THIS AGREEMENT AND THE ANCILLARY AGREEMENTS REPRESENT THE FINAL AGREEMENT
BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.
THERE ARE NO UNWRITTEN ORAL AGREEMENTS OF THE PARTIES.
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10. Stock to be Reserved. The Company will, at all times reserve
and keep available out of its authorized Common Stock or its treasury shares
solely for the purpose of issue upon the exercise of this Warrant as herein
provided, such number of shares of Common Stock as shall then be issuable upon
the exercise of this Warrant. The Company covenants that all shares of Common
Stock which shall be so issued shall be duly and validly issued and fully paid
and nonassessable and free from all taxes, Liens and charges with respect to
the issue thereof, and without limiting the generality of the foregoing, the
Company covenants that it will from time to time take all such action as may be
requisite to assure that the par value per share of the Common Stock is all at
all times equal to or less than the effective Purchase Price. The Company will
take all such action as may be necessary to assure that all such shares of
Common Stock may be so issued without violation of any applicable Law, or any
requirements of any national securities exchange upon which the Common Stock of
the Company may be listed. The Company will not take any action which results
in any adjustment of the Purchase Price if the total number of shares of Common
Stock issued and issuable after such action upon exercise of this Warrant would
exceed the total number of shares of Common Stock then authorized by the
Company's Articles of Incorporation. The Company has not granted and will not
grant any right of first refusal with respect to shares issuable upon exercise
of this Warrant, and there are no preemptive rights associated with such shares.
11. Issue Tax. The issuance of certificates for shares of Common
Stock upon exercise of the Warrants shall be made without charge to the Holder
of such Warrant for any issuance tax in respect thereof provided that the
Company shall not be required to pay any tax which may be payable in respect of
any transfer involved in the issuance and delivery of any certificate in a name
other than that of the Holder of the Warrant.
12. Miscellaneous. The headings in this Warrant are for purposes of
reference only, and shall not limit or otherwise affect any of the terms
hereof. This Warrant is being executed as an instrument under seal. All nouns
and pronouns used herein shall be deemed to refer to the masculine, feminine or
neuter, as the identity of the person or persons to whom reference is made
herein may require.
13. Expiration. This Warrant shall expire, and be without further
force and effect, at 5:00 P.M., New York time, on August 25, 2003.
[see attached signature page]
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Dated: August 25, 1998 INTRACEL CORPORATION
(Corporate Seal) By: /s/ XXXXX X. XXXXXXXX
--------------------------------
Xxxxx X. XxXxxxxx, President and
Chief Executive Officer
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FORM OF SUBSCRIPTION
(To be signed upon exercise of Warrant)
To Intracel Corporation:
The undersigned, pursuant to the provisions of the Warrant issued by
Intracel Corporation and amended on August 25, 1998 and held by the
undersigned, hereby subscribes for and purchases at the price per share
provided in such Warrant ______ shares of Common Stock issuable upon exercise
of such Warrant, and
(i) makes cash payment herewith in an amount equal to [___%] of
the aggregate purchase price therefor;
(ii) surrenders to the Company its Notes due __________ or such
other promissory notes or other obligations issued by the
Company, in accordance with Section 2(b)(ii) of such Warrant,
as payment herewith in an amount equal to [____%] of the
aggregate purchase price therefor;
(iii) delivers to the Company other securities issued by the
Company, in accordance with Section 2(b)(iii) of such Warrant,
as payment herewith in an amount equal to [____%] of the
aggregate purchase price therefor; and/or
(iv) elects Net Issue Exercise as provided in Section 2(b)(iv) of
such Warrant as to an amount equal to [____%] of the aggregate
purchase price therefor.
The combination of (i) through (iv) above shall equal 100% of the
purchase price of the shares being issued upon exercise of the
Warrant.
Dated: ______________________________________________
(Name must conform in all respects to name of
holder as specified on the face of the Warrant)
HOLDER:
By: _________________________________________
Name:
Title:
Address:
189
EXHIBIT C
REGISTRATION RIGHTS AGREEMENT
190
EXHIBIT 4.3
INTRACEL CORPORATION
REGISTRATION RIGHTS AGREEMENT
This Agreement is made as of August 25, 1998, by and among Intracel
Corporation, a Delaware corporation (the "Company"), and the persons and
entities listed on the signature pages hereof (the "Holders"), who are (a)
holders of the Company's Series A-VI Common Stock Warrants (the "Series A-VI
Warrants") to purchase the Company's Common Stock, par value $.0001 per share
("Common Stock"); (b) holders of the Company's Amended and Restated Series A-V
Common Stock Warrants (the "Series A-V Warrants"); (c) holders of the Company's
Amended and Restated Series A-II Common Stock Warrants (the "Series A-II
Warrants"); (d) holders of certain Amended and Restated Series A-III Warrants
(the "Series A-III Warrants") and (e) holders of an aggregate of 381,296 shares
of the Company's Common Stock ("Existing Common Stock") and 259,568 shares of
Series A-1 Preferred Stock which is convertible into shares of the Company's
Common Stock. ("Existing Preferred Stock").
PREAMBLE
The Company desires to extend registration rights to the Holders of the
Warrants.
NOW, THEREFORE, in consideration of the premises and mutual agreements
set forth herein, the Company and the Holders agree as follows:
Section 1. Definitions. As used in this Agreement, the following terms
shall have the following meanings:
(a) "Commission" shall mean the Securities and Exchange
Commission, or any other Federal agency at the time administering the Securities
Act.
(b) "Exchange Act" shall mean the Securities Exchange Act of
1934, as amended, or any similar Federal statute and the rules and regulations
thereunder, all as the same shall be in effect at the time.
(c) "Holders" shall have the meaning set forth in the
preamble.
(d) "Initiating Holders" shall mean any Holder or Holders who
initiate a registration pursuant to the terms of this Agreement.
(e) "Register," "registered" and "registration" shall refer to
a registration effected by preparing and filing a registration statement in
compliance with the Securities Act, and the declaration or ordering of the
effectiveness of such registration statement, and compliance with applicable
state securities laws of such states in which Holders notify the Company of
their intention to offer Registrable Securities.
191
(f) "Registrable Securities" shall mean all of the following
to the extent the same have not been sold to the public: (i) any and all shares
of Common Stock of the Company issuable upon exercise of the Series A-II
Warrants, the Series A-V Warrants, the Series A-VI Warrants and the Series A-III
Warrants; (ii) Existing Common Stock and shares issuable upon conversion of
Existing Preferred Stock, or (iii) stock issued in respect of securities
referred to in (i) or (ii) above in any reorganization; or (iv) stock issued in
respect of the securities referred to in (i), (ii) or (iii) as a result of a
stock split, stock dividend, recapitalization or combination or upon the
exercise of any rights, options, warrants or similar rights to purchase any
Common Stock. Notwithstanding the foregoing, Registrable Securities shall not
include otherwise Registrable Securities (i) sold by a person in a transaction
in which his rights under this Agreement are not properly assigned; or (ii) (A)
sold to or through a broker or dealer or underwriter in a public distribution or
a public securities transaction, (B) sold in a transaction exempt from the
registration and prospectus delivery requirements of the Securities Act under
Section 4(1) thereof so that all transfer restrictions, and restrictive legends
with respect thereto, if any, are removed upon the consummation of such sale or
(C) the registration rights associated with such securities have been terminated
pursuant to Section 12 of this Agreement.
(g) "Rule 144" shall mean Rule 144 under the Securities Act or
any successor or similar rule as may be enacted by the Commission from time to
time, but shall not include Rule 144A.
(h) "Rule 144A" shall mean Rule 144A under the Securities Act
or any successor or similar rule as may be enacted by the Commission from time
to time, but shall not include Rule 144.
(i) "Securities Act" shall mean the Securities Act of 1933, as
amended, or any similar Federal statute and the rules and regulations
thereunder, all as the same shall be in effect at the time.
(j) "Warrants" shall mean collectively, the Series A-II
Warrants, the Series A-V Warrants, the Series A-VI Warrants and the Series A-III
Warrants.
As used herein, all capitalized terms not otherwise defined herein
shall have the meanings set forth in the Securities Purchase Agreement.
Section 2. Demand Registration.
(a) If the Company shall receive from Initiating Holders a
written request that the Company effect any registration with respect to not
less than 20% of the shares of Common Stock which are Registrable Securities,
the Company shall:
(i) promptly give written notice of the proposed
registration to all other Holders; and
(ii) as soon as practicable use its best efforts to
register (including, without limitation, the execution of an
undertaking to file post-effective amendments and
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192
any other governmental requirements) all Registrable Securities which
the Initiating Holders request to be registered within twenty (20) days
after receipt of such written notice from the Company; provided, that
the Company shall not be obligated to file a registration statement
pursuant to this Section 2(a):
(A) prior to the date which is 180 days from
the date the Company consummates its initial offering of
Common Stock to the public pursuant to a registration
statement filed under the Securities Act, which offering
requires such Common Stock to become registered under the
Exchange Act; provided however that, in the event the Company
receives a written request pursuant hereto to effect a
registration prior to the date which is six (6) months from
the date of the consummation of the Company's initial public
offering, the Company shall prepare the registration statement
covering the Registrable Securities so that it may be filed as
soon as practicable upon the expiration of such six (6) month
period;
(B) in any particular state in which the
Company would be required to execute a general consent to
service of process in effecting such registration;
(C) within 120 days following the effective
date of any registered offering of the Company's securities to
the general public in which the Holders of Registrable
Securities shall have been able effectively to register all
Registrable Securities as to which registration shall have
been requested;
(D) in any registration having an aggregate
offering price (before deduction of underwriting discounts and
expenses of sale) of less than $5.0 million; or
(E) after the Company has effected one such
registration pursuant to this Section 2(a).
Subject to the foregoing clauses (A) through (E), the Company shall file a
registration statement covering the Registrable Securities so requested to be
registered as soon as practicable after receipt of the request or requests of
the Initiating Holders and shall use reasonable best efforts to have such
registration statement promptly declared effective by the Commission whether or
not all Registrable Securities requested to be registered can be included;
provided, however, that if the Company shall furnish to such Holders a
certificate signed by the President of the Company stating that in the good
faith judgment of the Board of Directors it would be seriously detrimental to
the Company and its shareholders for such registration statement to be filed
within such ninety-day (90-day) period and it is therefore essential to defer
the filing of such registration statement, the Company shall have an additional
period of not more than ninety (90) days after the expiration of the initial
ninety-day (90-day) period within which to file such registration statement;
provided, that (i) during such time the Company may not file a registration
statement for securities to be issued and sold for its own account and (ii) the
Company shall not utilize this right more than once in any twelve (12) month
period. Notwithstanding anything to the contrary contained herein, the
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obligation of the Company under this Section 2(a) shall be deemed satisfied only
when a registration statement covering all Registrable Securities specified in
notices received as aforesaid, for sale in accordance with the method of
disposition specified by the Required Holders, shall have become effective and,
if such method of disposition is a firm commitment underwritten public offering,
all such Registrable Securities shall have been sold pursuant thereto.
(b) If the Initiating Holders intend to distribute the
Registrable Securities covered by their request by means of an underwriting,
they shall so advise the Company as a part of their request. In such event, the
Company shall include such information in the written notice referred to in
subsection 2(a)(i). If so requested in writing by the Company, the Initiating
Holders shall negotiate with an underwriter selected by the Company with regard
to the underwriting of such requested registration. The right of any Holder to
registration pursuant to Section 2 shall be conditioned upon such Holder's
participation in such underwriting and the inclusion of such Holder's
Registrable Securities in the underwriting (unless otherwise mutually agreed by
a majority in interest of the Initiating Holders and such Holder) to the extent
provided herein. The Company shall (together with all Holders proposing to
distribute their securities through such underwriting) enter into an
underwriting agreement in customary form with the underwriter or underwriters
selected for such underwriting. Notwithstanding any other provision of this
Section 2(a), if the managing underwriter determines that marketing factors
require a limitation of the number of shares to be underwritten, the securities
of the Company held by directors, officers or employees and by shareholders
other than the Initiating Holders shall be excluded from such registration pro
rata (based on the number of securities each wishes to so register) to the
extent so required by such limitation, and if a limitation of the number of
shares is still required, then the managing underwriter may limit the number of
Registrable Securities to be included in the registration, provided that no such
reduction may reduce the securities being offered by the Holders to less than
twenty-five percent (25%) of the total securities requested to be included in
such registration and underwriting, allocated pro rata among the Initiating
Holders based on the number of Registrable Securities otherwise requested to be
included in such registration (and, in event such reduction results in less than
twenty-five percent (25%) of the total securities requested to be included in
such underwriting actually being included, such registration shall be cancelled
and shall not count as a registration request under this Section 2). If any
Holder disapproves of the terms of any such underwriting, he may elect to
withdraw therefrom by written notice to the Company and the managing
underwriter.
(c) In addition to all other rights of the Holders set forth
herein, the Company shall be obligated to, without any prior demand from the
Holders, file a Registration Statement to register the Registrable Securities
and use its best efforts to cause such Registration Statement to become
effective as soon as practicable following 180 days after the Company
consummates its initial offering of Common Stock to the public.
Section 3. Piggyback Registration.
(a) If at any time, or from time to time, the Company shall
determine to register any of its securities for its own account or the account
of any of its shareholders, other than a registration relating solely to
employee benefit plans, or a registration relating solely to an
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SEC Rule 145 transaction, a transaction relating solely to the sale of debt or
convertible debt instruments or a registration on any form (other than Form X-0,
X-0 or S-3, or their successor forms) which does not include substantially the
same information as would be required to be included in a registration statement
covering the sale of Registrable Securities, the Company will:
(i) give to each Holder written notice thereof as
soon as practicable prior to filing the registration statement; and
(ii) include in such registration and in any
underwriting involved therein, all the Registrable Securities specified
in a written request or requests, made within fifteen (15) days after
receipt of such written notice from the Company, by any Holder or
Holders, except as set forth in subsection (b) below.
(b) If the registration is for a registered public offering
involving an underwriting, the Company shall so advise the Holders as a part of
the written notice given pursuant to subsection 3(a)(i). In such event, the
right of any Holder to registration pursuant to Section 3 shall be conditioned
upon such Holder's participation in such underwriting and the inclusion of such
Holder's Registrable Securities in the underwriting to the extent provided
herein. All Holders proposing to distribute their securities through such
underwriting shall (together with the Company and the other holders distributing
their securities through such underwriting) enter into an underwriting agreement
in customary form with the underwriter or underwriters selected for such
underwriting by the Company. Notwithstanding any other provision of this Section
3, if the managing underwriter determines that marketing factors require a
limitation of the number of shares to be underwritten, the managing underwriter
may limit the number of Registrable Securities to be included in the
registration and underwriting and the number of Registrable Securities to be
included in such offering shall be reduced to zero before any reduction in any
securities to be offered by the Company on its own behalf. The Company shall so
advise all Holders and the other Holders distributing their securities through
such underwriting pursuant to piggy-back registration rights similar to this
Section 3, and the number of shares of Registrable Securities and other
securities that may be included in the registration and underwriting shall be
allocated among all Holders (and any other selling shareholders), pro rata, as
nearly as practicable, based on the numbers of Registrable Securities and other
shares held by selling shareholders, each such party wishes to register pursuant
to this Section 3. If any Holder disapproves of the terms of any such
underwriting, he may elect to withdraw therefrom by written notice to the
Company and the managing underwriter. If, by the withdrawal of such Registrable
Securities, a greater number of Registrable Securities held by other Holders may
be included in such registration (up to the limit imposed by the underwriters),
the Company shall offer to all Holders who have included Registrable Securities
in the registration the right to include additional Registrable Securities. Any
Registrable Securities excluded or withdrawn from such underwriting shall be
withdrawn from such registration.
Section 4. Form S-3. The Company shall use its best efforts to qualify
for registration on Form S-3 or its successor form. After the Company has
qualified for the use of Form S-3, Initiating Holders shall have the right at
any time to request registrations on Form S-3
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(such requests shall be in writing and shall state the number of shares of
Registrable Securities to be disposed of and the intended method of disposition
of shares by such Initiating Holders), subject to the following:
(a) The Company shall not be required to file a registration
statement pursuant to this Section 4 within ninety (90) days of the effective
date of any registration referred to in Sections 2 and 3 above;
(b) The Company shall not be required to file a registration
statement pursuant to this Section 4 unless the Initiating Holder or Holders
requesting registration propose to dispose of shares of Registrable Securities
having an aggregate disposition price (before deduction of underwriting
discounts and expenses of sale) of at least $250,000; and
(c) The Company shall not be required to file more than two
(2) registration statements pursuant to this Section 4 within any twelve (12)
month period.
The Company shall give written notice to all Holders of Registrable
Securities of the receipt of a request for registration pursuant to this Section
4 and shall provide a reasonable opportunity for other Holders to participate in
the registration; provided, that if the registration is for an underwritten
offering, the right of any Holder to registration pursuant to Section 4 shall be
conditioned upon such Holder's participation in such underwriting and the
inclusion of such Holder's Registrable Securities in the underwriting to the
extent provided herein. All Holders proposing to distribute their securities
through such underwriting shall (together with the Company and the other Holders
distributing their securities through such underwriting) enter into an
underwriting agreement in customary form with the underwriter or underwriters
selected for such underwriting by the Company. Notwithstanding any other
provision of this Section 4, if the managing underwriter determines that
marketing factors require a limitation of the number of shares to be
underwritten, the managing underwriter may limit the number of Registrable
Securities to be included in the registration and underwriting. The Company
shall so advise all Holders of Registrable Securities which would otherwise be
registered and underwritten pursuant hereto, and the number of Registrable
Securities that may be included in the registration and underwriting shall be
allocated among the Holders and any other selling shareholders pro rata, as
nearly as practicable, based on the number of Registrable Securities and shares
held by selling shareholders, such Holder and any selling shareholders wish to
include in a registration pursuant to this Section 4. If any Holder disapproves
of the terms of any such underwriting, he may elect to withdraw therefrom by
written notice to the Company and the underwriter. If, by the withdrawal of such
Registrable Securities, a greater number of Registrable Securities held by other
Holders may be included in such registration (up to the limit imposed by the
underwriters), the Company shall offer to all Holders who have included
Registrable Securities in the registration the right to include additional
Registrable Securities in the same proportion used in determining the limitation
as set forth above. Any Registrable Securities excluded or withdrawn from such
underwriting shall be withdrawn from such registration. Registrations effected
pursuant to this Section 4 shall not be counted as requests for registration
pursuant to Section 2.
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Section 5. Expenses of Registration. In addition to the fees and
expenses contemplated by Section 6 hereof, all expenses incurred in connection
with one registration pursuant to Section 2 hereof, and all registrations
pursuant to Sections 3 and 4 hereof, including without limitation all
registration, filing and qualification fees, printing expenses, fees and
disbursements of counsel for the Company and expenses of any special audits of
the Company's financial statements incidental to or required by such
registration, shall be borne by the Company, except that the Company shall not
be required to pay underwriters' fees, discounts or commissions relating to
Registrable Securities or fees of legal counsel for the Holders.
Section 6. Registration Procedures. In the case of each registration
effected by the Company pursuant to this Agreement, the Company will keep each
Holder participating therein advised in writing as to the initiation of each
registration and as to the completion thereof. At its expense the Company will:
(a) keep such registration pursuant to Sections 2, 3 or 4
continuously effective until the date on which the Holder or Holders have
completed the distribution described in the registration statement relating
thereto;
(b) promptly prepare and file with the Commission such
amendments and supplements to such registration statement and the prospectus
used in connection therewith as may be necessary to comply with the provisions
of the Securities Act; and to keep such registration statement effective for
that period of time specified in Section 6(a) above;
(c) furnish such number of prospectuses and other documents
incident thereto as a Holder from time to time may reasonably request;
(d) use reasonable best efforts to obtain the withdrawal of
any order suspending the effectiveness of a registration statement, or the
lifting of any suspension of the qualification of any of the Registrable
Securities for sale in any jurisdiction, at the earliest possible moment;
(e) subject to Section 2(a)(ii)(B), register or qualify such
Registrable Securities for offer and sale under the securities or Blue Sky laws
of such jurisdictions as any Holder or underwriter reasonably requires, and keep
such registration or qualification effective during the period set forth in
Section 6(a) above;
(f) cause all Registrable Securities covered by such
registrations to be listed on each securities exchange, including NASDAQ, on
which similar securities issued by the Company are then listed;
(g) cause its accountants to issue to the underwriter, if any,
or the Holders, if there is no underwriter, comfort letters and updates thereof,
in customary form and covering matters of the type customarily covered in such
letters with respect to underwritten offerings;
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(h) cause its counsel to issue to the underwriter, if any, or
to the Holders, if there is no underwriter, opinions in customary form and
covering matters of the type customarily covered in such opinions with respect
to underwritten offerings;
(i) enter into such customary agreements (including
underwriting agreements in customary form);
(j) make available for inspection by any seller of Registrable
Securities, any underwriter participating in any disposition pursuant to such
registration statement, and any attorney, accountant or other agent retained by
any such seller or underwriter, all financial and other records, pertinent
corporate documents and properties of the Company, and cause the Company's
officers, directors, employees and independent accountants to supply all
information reasonably requested by any such seller, underwriter, attorney,
accountant or agent in connection with such registration statement;
(k) immediately notify each Holder, at any time a prospectus
covered by such registration statement is required to be delivered under the
Securities Act, of the happening of any event of which it has knowledge as a
result of which the prospectus included in such registration statement, as then
in effect, includes an untrue statement of a material fact or omits to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading in the light of the circumstances then existing; and
(l) take such other actions as shall be reasonably requested
by any Holder.
For purposes of Sections 2, 6(a) and 6(b) above, the period of
distribution of Registrable Securities in a firm commitment underwritten public
offering shall be deemed to extend until each underwriter has completed the
distribution of all securities purchased by it, and the period of distribution
of Registrable Securities in any other registration shall be deemed to extend
until the earlier of the sale of all Registrable Securities covered thereby and
six (6) months after the effective date thereof.
Section 7. Indemnification.
(a) In the event of a registration, qualification or
compliance of any of the Registrable Securities under the Securities Act
pursuant to Sections 2, 3 or 4, the Company will indemnify and hold harmless
each Holder of such Registrable Securities thereunder, each underwriter of such
Registrable Securities thereunder and each other person, if any, who controls
such Holder or underwriter within the meaning of the Securities Act, against any
losses, claims, damages or liabilities, joint or several, to which such Holder,
underwriter or controlling person may become subject under the Securities Act,
insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon any untrue statement or alleged untrue
statement of any material fact contained in any registration statement under
which such Registrable Securities was registered under the Securities Act, any
preliminary prospectus or final prospectus contained therein, or any amendment
or supplement thereof, any offering circular or other offering document or arise
out of or are based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the
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statements therein not misleading, or any violation by the Company of any rule
or regulation promulgated under the Securities Act or any state securities law
or rule or regulation promulgated under the Securities Act or any state
securities law applicable to the Company and relating to action or inaction
required of the Company in connection with any such registration, qualification
or compliance, and will reimburse each such Holder, each of its officers,
directors and partners, and each person controlling such Holder, each such
underwriter and each person who controls any such underwriter, for any
reasonable legal and any other expenses incurred in connection with
investigating, defending or settling any such claim, loss, damage, liability or
action; provided, that, not withstanding the foregoing, the Company will not be
liable in any such case to the extent that any such claim, loss, damage or
liability arises out of or is based on any untrue statement or omission based
upon written information furnished to the Company by an instrument duly executed
by such Holder or underwriter specifically for use therein.
(b) Each Holder will, if Registrable Securities held by or
issuable to such Holder are included in the securities as to which such
registration, qualification or compliance is being effected, indemnify and hold
harmless the Company, each of its directors and officers, each underwriter, if
any, of the Company's securities covered by such a registration statement, each
person who controls the Company and each underwriter within the meaning of the
Securities Act, and each other Holder, each of such other Holder's officers,
directors and partners and each person controlling such other Holder, against
all claims, losses, expenses, damages and liabilities (or actions in respect
thereof) arising out of or based on any untrue statement (or alleged untrue
statement) of a material fact contained in any such registration statement,
prospectus, offering circular or other offering document, or any omission (or
alleged omission) to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, and will reimburse
the Company, such Holders, such directors, officers, partners, persons or
underwriters for any reasonable legal or any other expenses incurred in
connection with investigating, defending or settling any such claim, loss,
damage, liability or action, in each case to the extent, but only to the extent,
that such untrue statement (or alleged untrue statement) or omission (or alleged
omission) is made in such registration statement, prospectus, offering circular
or other offering document in reliance upon and in conformity with written
information furnished to the Company by an instrument duly executed by such
Holder specifically for use therein; provided, however, the total amount for
which any Holder, its officers, directors and partners, and any person
controlling such Holder, shall be liable under this Section 7(b) shall be
limited to the proportion of any such loss, claim, damage, liability or expense
which is equal to the proportion that the public offering price of shares sold
by such Holder under such registration statement bears to the total public
offering price of all securities sold thereunder but not to exceed, in any
event, the aggregate proceeds received by such Holder from the sale of
Registrable Securities sold by such Holder in such registration, qualification
or compliance.
(c) Each party entitled to indemnification under this Section
7 (the "Indemnified Party") shall give notice to the party required to provide
indemnification (the "Indemnifying Party") promptly after such Indemnified Party
has actual knowledge of any claims as to which indemnity may be sought, and
shall permit the Indemnifying Party to assume the defense of any such claim or
any litigation resulting therefrom, provided that counsel for the
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Indemnifying Party, who shall conduct the defense of such claim or litigation,
shall be approved by the Indemnified Party (whose approval shall not be
unreasonably withheld), and the Indemnified Party may participate in such
defense at such party's expense, and provided further that the failure of any
Indemnified Party to give notice as provided herein shall not relieve the
Indemnifying Party of its obligations hereunder, unless such failure resulted in
actual detriment to the Indemnifying Party. The Indemnifying Party shall not be
liable to indemnify any Indemnified Party for any settlement of any such action
effected without the Indemnifying Party's consent. No Indemnifying Party, in the
defense of any such claim or litigation, shall, except with the consent of each
Indemnified Party, consent to entry of any judgment or enter into any settlement
which does not include as an unconditional term thereof the giving by the
claimant or plaintiff to such Indemnified Party of a release from all liability
in respect of such claim or litigation.
(d) Notwithstanding the foregoing, to the extent that the
provisions on indemnification contained in the underwriting agreements entered
into among the selling Holders, the Company and the underwriters in connection
with the underwritten public offering are in conflict with the foregoing
provisions, the provisions in the underwriting agreement shall be controlling as
to the Registrable Securities included in the public offering.
(e) If the indemnification provided for in this Section 7 is
held by a court of competent jurisdiction to be unavailable to an indemnified
party with respect to any loss, liability, claim, damage or expense referred to
therein, then the Indemnifying Party, in lieu of indemnifying such Indemnified
Party thereunder, shall contribute to the amount paid or payable by such
Indemnified Party as a result of such loss, liability, claim, damage or expense
in such proportion as is appropriate to reflect the relative fault of the
Indemnifying Party on the one hand and of the Indemnified Party on the other
hand in connection with the statements or omissions which resulted in such loss,
liability, claim, damage or expense as well as any other relevant equitable
considerations. The relevant fault of the Indemnifying Party and the Indemnified
Party shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or the omission to state a
material fact relates to information supplied by the Indemnifying Party or by
the Indemnified Party and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
Notwithstanding the foregoing, the amount any Holder shall be obligated to
contribute pursuant to this Section 7(e) shall be limited to an amount equal to
the proceeds to such Holder of the Registrable Securities sold pursuant to the
registration statement which gives rise to such obligation to contribute.
(f) The indemnification provided by this Section 7 shall be a
continuing right to indemnification and shall survive the registration and sale
of any securities by any definition entitled to indemnification hereunder and
the expiration or termination of this Agreement.
Section 8. Lockup Agreement. In consideration for the Company agreeing
to its obligations under this Agreement, each Holder agrees in connection with
any underwritten registration of the Company's securities (whether or not such
Holder is participating in such registration) upon the request of the Company
and the underwriters managing the underwritten
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offering of the Company's securities, not to publicly sell, make any short sale
of, loan, grant any option for the purchase of, or otherwise dispose of any
Registrable Securities (other than those included in the registration) without
the prior written consent of the Company and such underwriters for such period
of time (not to exceed 180 days in the case of the Company's initial public
offering) from the effective date of such registration as the Company and the
underwriters may specify.
Section 9. Information by Holder. The Holder or Holders of Registrable
Securities included in any registration shall promptly furnish to the Company
such information regarding such Holder or Holders and the distribution proposed
by such Holder or Holders as the Company may request in writing and as shall be
required in connection with any registration' referred to herein.
Section 10. Rule 144 and 144A Reporting. With a view to making
available to Holders of Registrable Securities the benefits of certain rules and
regulations of the Commission which may permit the sale of the Registrable
Securities to the public without registration, the Company agrees at all times
after ninety (90) days after the effective date of the first registration filed
by the Company for an offering of its securities to the general public to:
(a) make and keep public information available, as those terms
are understood and defined in Rule 144 and Rule 144A;
(b) use its best efforts to file with the Commission in a
timely manner all reports and other documents required of the Company under the
Securities Act and the Exchange Act; and
(c) furnish to each Holder so long as such Holder owns any
Registrable Securities forthwith, upon written request, a written statement by
the Company that it has complied with the reporting requirements of Rule 144,
the Securities Act and the Exchange Act (to the extent that it is then subject
to any such reporting requirements), a copy of the most recent annual and
quarterly report of the Company, and such other reports and documents filed by
the Company under the Exchange Act as may be reasonably requested by such Holder
in connection with availing the Holder of any rule or regulation of the
Commission permitting the selling of such securities without registration.
Section 11. Transfer of Registration Rights. The rights to cause the
Company to register Registrable Securities of a Holder and keep information
available granted to a Holder by the Company under Sections 2, 3, and 4, may be
assigned by a Holder to any partner or shareholder of such Holder, to one or
more affiliated partnerships managed by such Holder, any other Holder, to any
"Affiliate" of the Holder as that term is defined by the Securities Purchase
Agreement; to any "Qualified Institutional Buyer" as that term is defined by the
Note executed as of the date hereof; or to a transferee or assignee who receives
at least 50% of the shares of Common Stock which are Registrable Securities;
provided, that the Company is given written notice by the Holder at the time of
or within a reasonable time after said transfer, stating the name and address of
said transferee or assignee and identifying the securities with respect to which
such registration rights are being assigned, and that said transferee or
assignee agrees in
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writing to be bound by the terms and provisions of this Agreement as if an
original signatory thereto.
Section 12. Termination of Rights.
(a) The rights of any particular Holder to cause the Company
to register securities under Sections 2, 3 and 4 shall terminate with respect to
such Holder at such time as such Holder is able to dispose of all of his
Registrable Securities in one twelve-month period pursuant to the provisions of
Rule 144.
(b) Notwithstanding the provisions of paragraph (a) of this
Section 12, all rights of any particular Holder under this Agreement shall
terminate at 5:00 p.m. Eastern time on August 25, 2003.
Section 13. Miscellaneous.
(a) Amendments. This Agreement constitutes the entire
agreement of the parties within respect to the subject matter hereof and may be
amended or modified only by a writing signed by the Company and the Required
Holders of the Registrable Securities (as the term is defined in the Securities
Purchase Agreement), as constituted from time to time. The Holders hereby
consent to future amendments to this Agreement that permit future investors to
be made parties hereto and to become Holders of Registrable Securities.
(b) Counterparts. This Agreement may be executed in any number
of counterparts, all of which shall constitute a single instrument.
(c) Notices, Etc. All notices and other communications
required or permitted hereunder shall be in writing and may be sent initially by
facsimile transmission and shall be mailed by registered or certified mail,
postage prepaid, or otherwise delivered by hand or by messenger, addressed (i)
if to a Holder, at such Holder's address set forth on the books of the Company,
or at such other address as such Holder shall have furnished to the Company in
writing, or (ii) if to any other holder of any Registrable Securities, at such
address as such holder shall have furnished the Company in writing, or, until
any such holder so furnishes an address to the Company, then to and at the
address of the last holder of such securities who has so furnished an address to
the Company, or (iii) if to the Company, one copy should be sent to the
Company's current address at 1871 X.X. Xxxxxx Blvd., Issaquah, Washington, or at
such other address as the Company shall have furnished to the Holders. All such
notices shall be effective and deemed duly given when received or when attempted
delivery is refused.
(d) Non-Public Information. Any other provisions of this
agreement to the contrary notwithstanding, the Company's obligation to file a
registration statement, or cause such registration statement to become and
remain effective, shall be suspended for a period not to exceed 30 days (and for
periods not exceeding, in the aggregate, 60 days in any 24-month period) if
there exists at the time material non-public information relating to the Company
which, in the reasonable opinion of the Company, should not be disclosed.
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(e) Severability. If any provision of this Agreement shall be
held to be illegal, invalid or unenforceable, such illegality, invalidity or
unenforceability shall attach only to such provision and shall not in any manner
affect or render illegal, invalid or unenforceable any other provision of this
Agreement, and this Agreement shall be carried out as if any such illegal,
invalid or unenforceable provision were not contained herein.
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(f) Governing Law. This Agreement shall be governed by and
construed under the laws of the State of New York without regard to principles
of conflict of law.
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
the date first set forth above.
INTRACEL CORPORATION
By: /s/ XXXXX X. XxXXXXXX
------------------------------
Name: Xxxxx X. XxXxxxxx
Title: President and Chief
Executive Officer
Investors
Northstar High Total Return Fund
By: /s/ XXXXXXX X. XXXXXX
------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Vice President
Northstar High Total Return Fund II
By: /s/ XXXXXXX X. XXXXXX
------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Vice President
Northstar High Yield Fund
By: /s/ XXXXXXX X. XXXXXX
------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Vice President
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Northstar Strategic Income Fund
By: /s/ XXXXXXX X. XXXXXX
--------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Vice President
Northstar Balance Sheet Opportunities
By: /s/ XXXXXXX X. XXXXXX
--------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Vice President
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EXHIBIT D
INTEREST ESCROW SECURITY AGREEMENT
206
EXHIBIT 10.30
INTEREST ESCROW SECURITY AGREEMENT
This INTEREST ESCROW SECURITY AGREEMENT (the "Agreement"),
dated as of August 25, 1998, among Northwestern Trust and Investors Advisory
Company, as Depositary (in such capacity, the "Depositary"), the holders set
forth on Schedule A attached hereto (the "Holders") of the certain promissory
notes (the "Notes") dated the date hereof, of Intracel Corporation, a Delaware
corporation (the "Company"), and the Company. All references herein to the "UCC"
shall mean the Uniform Commercial Code as in effect on the date hereof in the
State of New York, and all references herein to the "Revised UCC" shall mean the
1994 Official Text of Article 8 of the Uniform Commercial Code with conforming
amendments to Article 9.
RECITALS
A. Pursuant to that certain Securities Purchase Agreement
dated as of August 25, 1998 (the "Securities Purchase Agreement"), between the
Company, its Subsidiaries and the Holders, the Company is issuing the Notes (as
that term is defined in the Securities Purchase Agreement).
B. Pursuant to the Securities Purchase Agreement, the Company
shall initially deposit in the Securities Account (as defined in Section 2(a)
hereof) Four Million Nine Hundred and Twenty Thousand Dollars ($4,920,000) in
cash (which amount will be sufficient to pay, together with the proceeds from
the investment thereof, a minimum of twelve months interest on the Notes) to be
held in the Securities Account subject to the terms and conditions of this
Agreement.
C. Pursuant to the Securities Purchase Agreement, the Company
shall be required to deposit certain additional amounts in the Securities
Account in cash.
D. As security for its Obligations (as such term is defined in
the Security Agreement, dated as of the date hereof among the Company and the
Holders (the "Securities Agreement")) under the Securities Purchase Agreement,
the Notes and the Ancillary Agreements, the Company hereby grants to the
Holders, a first priority perfected Security Interest in and Lien upon the
Securities Account.
E. The parties have entered into this Agreement in order to
(i) create the Security Interest in favor of the Holders of the Securities
Account, (ii) obtain certain assurances herein from the Depositary, including,
without limitation, establishing the Holders' control (within the meaning of the
Revised UCC) over the Securities Account, and (iii) set forth the manner in
which funds will be disbursed from the Securities Account and released from the
Security Interest and Lien described above.
AGREEMENT
NOW, THEREFORE, in consideration of the premises and mutual
representations, warranties, covenants, agreements and other consideration
contained and
207
exchanged herein, the receipt and sufficiency of which are hereby acknowledged
and intending to be legally bound, the parties hereto covenant and otherwise
agree as follows:
1. Defined Terms. For all purposes of this Agreement, all
capitalized terms not otherwise defined below, shall have the same meaning set
forth in the Securities Purchase Agreement.
"Affiliate" has the meaning specified in Section 1.1 of the
Securities Purchase Agreement.
"Available Funds" means (A) the sum of (i) the cash equal to
the Initial Deposit Amount, (ii) subsequent cash amounts deposited, if any, into
the Securities Account, (iii) cash interest or dividends paid into the
Securities Account with respect to the funds in the Securities Account from time
to time and (iv) the Fair Market Value of holdings of Marketable Securities in
the Securities Account, less (B) the aggregate cash disbursements previously
made pursuant to this Agreement.
"Business Day" means any day of the week other than Saturday,
Sunday and days on which banking institutions in Seattle, Washington are closed.
"Collateral" shall have the meaning given in Section 5(a)
hereof.
"Default" shall have the meaning ascribed to it in the Notes.
"Eligible Institution" has the meaning specified in Section
1.1 of the Securities Purchase Agreement.
"Event of Default" shall have the meaning ascribed to it in
the Notes.
"Initial Deposit Amount" shall mean $4,920,000
"Interest Payment Date" means, for any year, November 25,
February 25, May 25 and August 25, beginning with the Interest Payment Date of
November 25, 1998.
"Issue Date" means August 25, 1998.
"Marketable Securities" means the following securities or
financial Assets maturing not later than 180 days after their acquisition: (i)
U.S. Treasury Bills, notes and bonds payable thereby and agreements to
repurchase such instruments; (ii) any certificate of deposit issued by, or time
deposit of, an Eligible Institution; (iii) commercial paper issued by a
corporation (other than an Affiliate of the Company) with a rating, at the time
as of which any investment therein is made, of "A-1" (or higher) according to
S&P or "P-1" (or higher) according to Moody's; (iv) any banker's acceptances or
money market deposit accounts issued or offered by an Eligible Institution; and
(v) any Investment Company (as such term is defined by the Investment Company
Act of 1940) fund investing exclusively in investments of the types described in
clauses (i) through (iv) above.
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"Payment Notice and Disbursement Request" means a notice sent
by the Required Holders to the Depositary, which may be in the form of Exhibit A
hereto.
"Qualified Equity Transaction" means the sale by the Company
of its securities, whether in a public offering registered under the Securities
Act of 1933, as amended, or otherwise, which sale has an aggregate offering
price of not less than $40,000,000 and results in aggregate proceeds to the
Company (net of selling expenses and underwriters' discount or selling agent's
commission) of not less than $35,000,000.
"Required Holders" has the meaning specified in Section 1.1 of
the Securities Purchase Agreement.
"Securities Account" shall have the meaning given in Section
2(a).
"Security Interest" has the meaning specified in Section 1(a)
of the Security Agreement.
2. Securities Account.
(a) Establishment of Securities Account. The Depositary hereby
confirms and agrees that (i) the Depositary has established account number
"000398" under the name "Escrow A/C" (such account and any successor account,
the "Securities Account"), (ii) the Securities Account is a "securities account"
as such term is defined in Section 8-501(a) of the Revised UCC, (iii) the
Depositary shall, subject to the terms of this Agreement, treat the Holders as
the parties entitled to exercise the rights that comprise any financial Asset
credited to the Securities Account, (iv) all Assets delivered to, and actually
received by, the Depositary pursuant, to this Agreement will be promptly
credited to the Securities Account, and (v) all securities or other Assets
underlying any financial Assets credited to the Securities Account shall be
registered in the name of the Depositary or one of its agents or nominees,
indorsed to the Depositary or in blank or credited to another securities account
maintained in the name of the Depositary and in no case will any financial Asset
credited to the Securities Account be registered in the name of the Company,
payable to the order of the Company or specially indorsed to the Company except
to the extent the foregoing have been specially indorsed to the Depositary or in
blank.
(b) Investment of Funds in Securities Account. Funds deposited
in the Securities Account shall be invested and reinvested only upon the
following terms and conditions:
(i) Acceptable Investments. All funds deposited or
held in the Securities Account at any time shall be invested
in cash or Marketable Securities. Unless a Default or Event of
Default or any event that with the lapse of time or the giving
of notice, or both, would constitute an Event of Default has
occurred or would result therefrom or the Required Holders
have otherwise notified the Depositary, the Company may
instruct the Depositary in writing with respect to the
Marketable Securities in which the funds will be invested. The
Depositary shall have the right with acquittance and without
liability to rely on any such instructions from the Company
unless the Depositary shall have been notified otherwise in
writing by the Required Holders.
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(ii) Security Interest in Investments. No investment
of funds in the Securities Account shall be made unless the
Company has certified to the Required Holders, with a copy of
the certification being sent to the Depositary, that, upon
such investment, the Holders will have a first priority
perfected security interest in the applicable investment.
(iii) Interest and Dividends. All interest earned and
dividends paid on funds invested in cash or Marketable
Securities shall be deposited in the Securities Account as
additional Collateral for the exclusive benefit of the Holders
of the Notes and shall be reinvested in accordance with the
terms hereof at the Company's direction, unless a Default or
Event of Default or an event that with the lapse of time or
the giving of a notice or both, would constitute an Event of
Default has occurred and the Required Holders have notified
the Depositary in writing that it should only take direction
from the Required Holders or should no longer take further
written direction from the Company.
3. Funding Requirements. The Company shall direct the
Purchasers to and the Purchasers shall deposit by wire transfer in accordance
with the written instruction received from the Depositary on the Closing Date in
the Securities Account the Initial Deposit Amount. Thereafter, the Company shall
be required to replenish the funds in the Securities Account to the extent
necessary on each Interest Payment Date at such times when the Available Funds
in the Securities Account are less than the appropriate amounts as specified in
clauses (A) and (B) of this Section 3 (the "Shortfall"), and such replenishment
shall be made in the amount of such Shortfall within five (5) Business Days
after such notification of the Shortfall has been provided. The Company shall be
entitled to rely conclusively in making the foregoing determination on
information provided to it by the Depositary. The balance in the Securities
Account shall be maintained, as of each Interest Payment Date, at an amount
sufficient to provide (A) for the period prior to the date on which the Company
notifies the Depositary in writing of the consummation of a Qualified Equity
Transaction (the "Effective Date") (and thereafter if the Effective Date is not
on or before July 1, 1999), for the next four successive payments of interest on
the then Outstanding Notes on the applicable Interest Payment Dates, and, if
necessary, (B) provided the Effective Date is on or before July 1, 1999,
thereafter, the funds in the Securities Account shall be replenished to an
amount sufficient to pay the next four successive payments of interest, and,
after two successive full payments of interest thereafter, the funds shall
thereafter be maintained at a level sufficient to pay the next two successive
payments of interest on the then Outstanding Notes on the applicable Interest
Payment Dates. The Company's obligation to provide such funds and to maintain
such balance as described in either clause (A) or (B) above shall, in all
respects, terminate on the date on which the Company shall have fully paid all
interest accrued through and including the twelfth successive Interest Payment
Date (the "Termination Date"). The Depositary agrees to send a statement not
less frequently than quarterly by the fifteenth day of each month in which the
Depositary provides such statement, a statement of the balance and activity in
the Securities Account for the period covered by such statement.
4. Disbursements.
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(a) Payment Notice and Disbursement Requests; Disbursements.
Prior to the disbursement of any funds from the Securities Account by the
Depositary, the Company must deliver to the Depositary the written consent of
the Holders to such disbursement. The Company shall obtain such written consent
by delivering notice (the "Disbursement Notice") to the Holders of a proposed
disbursement five (5) Business Days prior to such date on which such
disbursement is to be made (the "Disbursement Date"), which Disbursement Notice
shall contain the time period to which such payment applies and the amount of
the disbursement. Promptly after receipt of the Disbursement Notice from the
Company, the Holders shall notify the Depositary of their consent, if any, to
the disbursement of funds on the Disbursement Date by delivery of a Payment
Notice and Disbursement Request substantially in the form of Exhibit A attached
hereto. No disbursements of funds from the Securities Account shall be made by
the Depositary without receipt of the Payment Notice and Disbursement Request
from the Holders authorizing such disbursement.
(b) All disbursements from the Securities Account must be made
in cash and shall apply solely to the payment of interest due under the Notes,
except in the event of a Default, an Event of Default, or an event that with the
lapse of time or the giving of notice, or both, would constitute an Event of
Default, or termination of this Agreement in accordance with the provisions of
Section 6 hereof, in which case written notice thereof shall be provided to the
Depositary by the Required Holders and disbursements of amounts from the
Securities Account shall be made in accordance with the provisions of Section
6(b)(v) of the Notes.
(c) Notwithstanding the provisions contained in Section 4(a)
above, the Holders may, at any time or from time to time, issue a written
payment demand to the Depositary without any prior notice to or from the Company
if: (i) there shall be interest due under the Notes which is five (5) or more
days past due; or (ii) in their reasonable judgment, the Required Holders have
concluded that a Default, Event of Default or event that with the lapse of time
or the giving of notice, or both, would constitute an Event of Default has
occurred and is continuing, or would result therefrom under Section 6(a)(vi) of
the Notes and written notice thereof shall be provided to the Depositary by the
Required Holders. The Depositary shall pay to the Holders promptly after receipt
of their payment demand, the sums specified therein with respect to any payments
due pursuant to the provisions of this Section 4(c).
(d) Retired Notes. In the event that the funds held in the
Securities Account exceed the respective amounts provided for in Section 3
hereof (or, in the event an interest payment or payments have been made, an
amount sufficient to provide for payment in full of any interest payment
remaining, up to and including such scheduled interest payments), the Required
Holders will be permitted to release to the Company any such excess amount if no
Default or Event of Default or event that with the lapse of time, or the giving
of notice, or both, would constitute an Event of Default, then exists under the
Notes.
5. Grant of Security Interest.
(a) The Company hereby irrevocably grants a first priority
perfected security interest in and pledges, assigns and sets over to the Holders
all of the Company's right, title and interest in the Securities Account, and
all Assets now or hereafter placed or deposited in, or delivered to the
Depositary for placement or deposit in, the Securities Account, including,
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without limitation, all cash and other funds held therein, all Marketable
Securities in the Securities Account established by (or otherwise maintained in
the name of) the Depositary pursuant to Section 2 and security entitlements
credited to or held in the Securities Account, and all proceeds thereof as well
as all rights of the Company under this Agreement (collectively, the
"Collateral"), in order to secure all Obligations (as defined in the Security
Agreement) of the Company under the Securities Purchase Agreement, the Notes and
the Ancillary Agreements.
The Depositary and the Company hereby acknowledge the Holders' security
interest as set forth above. The Company shall take all actions necessary on its
part to perfect, protect, maintain and insure the continuance of a first
priority perfected Security Interest in the Collateral in favor of the Holders
in order to secure all Obligations.
The rights and powers granted herein to the Holders have been granted
in order to perfect their Security Interest in the Securities Account, are
powers coupled with an interest and shall neither be affected by the bankruptcy
of the Company nor by the lapse of time.
(b) Upon demand, the Company will execute and deliver to the
Holders such instruments and documents as the Holders may reasonably deem
necessary or advisable to confirm or perfect their rights under this Agreement
and their interest in the Collateral. The Holders shall be entitled to take all
necessary action to preserve and protect the Security Interest created hereby as
a Lien and encumbrance upon the Collateral.
(c) The Company hereby appoints the Holders as its
attorney-in-fact with full power of substitution to do any act which the Company
is obligated hereunder to do, and the Holders may exercise such rights as the
Company might exercise with respect to the Collateral and take any action in the
Company's name to protect the Holders' Security Interest hereunder.
(d) In addition to the rights provided in this Agreement upon
a Default or an Event of Default, and for so long as such Default or Event of
Default or event that with the lapse of time or the giving of notice, or both,
would constitute an Event of Default continues or would result therefrom, the
Holders may exercise in respect of the Collateral, in addition to other rights
and remedies provided for herein or otherwise available to it, all the rights
and remedies of a secured party under the UCC, the Revised UCC (if applicable)
or other applicable Law, including, without limitation, collecting payment from
the Company of any attorney fees incurred by the Holders in exercising such
rights and remedies. The Holders may also, upon a Default or an Event of Default
or event that with the lapse of time or the giving of notice, or both, would
constitute an Event of Default, without notice to the Company except as
specified below, sell the Collateral or any part thereof in one or more parcels
at public or private sale, at any exchange, broker's board or at any of the
Holders' offices or elsewhere, for cash, on credit or for future delivery, and
upon such other terms as the Required Holders may deem commercially reasonable.
The Company acknowledges and agrees that any such private sale may result in
prices and other terms less favorable to the seller than if such sale were a
public sale. The Company agrees that, to the extent notice of sale shall be
required by law, ten (10) days' notice to the Company of the time and place of
any public sale or the time after which any private sale is to be made shall
constitute reasonable notification within the meaning of the UCC, the Revised
UCC, or any other applicable law. The Required Holders shall not be obligated to
make any sale
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regardless of notice of sale having been given. The Required Holders may adjourn
any public or private sale from time to time by announcement at the time and
place fixed therefor, and such sale may, without further notice, be made at the
time and place to which it was so adjourned.
6. Termination. (a) On the Termination Date, all funds remaining in the
Securities Account shall be disbursed by wire transfer as follows:
(i) to the Holders, in an amount equal to all accrued unpaid
past due interest on the Notes;
(ii) to the Holders in an amount equal to all accrued unpaid
interest due on the Notes;
(iii) to the Holders in an amount equal to all accrued unpaid
and past due amounts under the Securities Purchase Agreement, the Notes
and any of the Ancillary Agreements;
(iv) to the Holders in an amount equal to all other accrued
unpaid amounts under the Securities Purchase Agreement, the Notes and
any of the Ancillary Agreements;
(v) to the Holders in an amount equal to the aggregate
principal amount Outstanding under the Notes; and
(vi) any surplus of such cash or cash proceeds held by the
Holders through the Depositary and remaining on or after the
Termination Date shall be paid over to the Company or to whosoever may
be lawfully entitled to receive such surplus or as a court of competent
jurisdiction may direct.
(b) The Company and the Required Holders shall provide the
Depositary with written instructions regarding the disbursements to be made
pursuant to Section 6(a) on the Termination Date at least five (5) Business Days
prior to the Termination Date.
(c) This Agreement shall terminate automatically ten (10) days
following disbursement of all funds remaining in the Securities Account
(including proceeds from the sale of Marketable Securities), unless sooner
terminated by agreement of the parties hereto (in accordance with the terms
hereof, not in violation of the Notes, and provided that the Holders may not
agree to such earlier termination unless they have received the consent of all
Holders of all of the Notes then outstanding); provided, however, that until
such tenth day, the Company will cause this Agreement (or any permitted
successor agreement) to remain in effect and will cause the Depositary
(including any permitted successor thereto) to continue to act hereunder (or
under any such permitted successor agreement).
7. "Financial Assets" Election. The Depositary hereby agrees that each
item of property (whether investment property, financial Asset, security,
instrument or cash) comprising the Initial Deposit Amount, Available Funds,
Collateral, or any other property otherwise credited to the Securities Account
shall be treated as a "financial asset" within the meaning of Section
8-102(a)(9) of the Revised UCC.
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8. Entitlement Orders. If at any time the Depositary shall receive an
"entitlement order" (within the meaning of Section 8-102(a)(8) of the Revised
UCC) issued by the Holders and relating to the Securities Account, the
Depositary shall comply with such entitlement order without further consent by
the Company or any other person.
9. Subordination of Lien; Waiver of Setoff. In the event that the
Depositary has or subsequently obtains by agreement, operation of law or
otherwise a security interest in the Securities Account or any security
entitlement credited thereto, the Depositary hereby agrees that such security
interest shall be subordinate to the Security Interest of the Holders. The
financial Assets and other items deposited to the Securities Account shall not
be subject to deduction, set-off, banker's Lien, or any other right in favor of
any person other than the Holders (except that the Depositary may set off (a)
all amounts due to the Depositary in respect of the Depositary's customary fees
and expenses for the routine maintenance and operation of the Securities Account
and (b) the face amount of any checks which have been credited to the Securities
Account but are subsequently returned unpaid because of uncollected or
insufficient funds).
10. Representations, Warranties and Covenants of the Company. The
Company hereby represents and warrants that this Agreement has been duly
authorized, executed and delivered on its behalf and constitutes the legal,
valid and binding obligation of the Company. The execution, delivery and
performance of this Agreement by the Company does not violate any applicable Law
to which the Company is subject and does not require the consent of any
governmental or other regulatory body to which the Company is subject, except
for such consents and approvals as have been obtained and are in full force and
effect.
11. Representations, Warranties and Covenants of the Depositary. The
Depositary hereby makes the following representations, warranties and covenants:
(a) The Securities Account has been established as set forth
in Sections 2 through 4 above and shall be maintained in the manner set forth
herein until termination of this Agreement. The Depositary shall not change the
name or account number of the Securities Account without the prior written
consent of the Required Holders.
(b) No financial Asset is or shall be registered in the name
of the Company, payable to the Company's order, or specially endorsed to the
Company, except to the extent such financial asset has been endorsed to the
Depositary or in blank.
(c) This Agreement is the valid and legally binding obligation
of the Depositary duly authorized, executed and enforceable in accordance with
its terms.
(d) The Depositary has not entered into, and until the
termination of this Agreement shall not enter into, any agreement with any other
Person relating to any of the Securities Account and/or any financial Assets
credited thereto pursuant to which it has agreed to comply with entitlement
orders (as defined in Section 8-102(a)(8) of the Revised UCC) of such person.
The Depositary has not entered into any other agreement with the Company or the
Holders purporting to limit or condition the obligation of the Depositary to
comply with entitlement orders as set forth in Section 8 hereof.
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(e) The Depositary shall at all times act as a "financial
intermediary" (within the meaning of Section 8-313(4) of the UCC) or as a
"securities intermediary" (within the meaning of Section 8-102(a)(14) of the
Revised UCC), and as a custodian of funds, as applicable, and will comply with
all applicable regulations.
12. Automatic Stay. If the Company becomes the subject of a bankruptcy
or a reorganization case under the United States Bankruptcy Code, the automatic
stay imposed by section 362 of the United States Bankruptcy Code will be deemed
lifted (or, in the event that a court does not recognize the validity of such
deemed lifting of the automatic stay, the parties will use their best efforts to
seek relief from the stay), insofar as such stay affects enforcement of the
security interest in the Securities Account granted thereby.
13. Fees and Expenses. The Company agrees to pay the Depositary
reasonable compensation for its basic services rendered pursuant to this
Agreement. The fees shall be paid within 30 days after the Company has been
billed by the Depositary, except for the document review and set-up fee of $1000
plus out-of-pocket legal review expenses which shall be paid by the Company upon
establishment of the Securities Account. In the event the Depositary renders any
material service not contemplated in this Agreement, or there is any assignment
of interest in the subject matter of this Agreement, or any material
modification hereof, or if any material controversy arises hereunder, or the
Depositary is made a party to any litigation pertaining to this Agreement, or
the subject matter hereof, then the Depositary shall also be reasonably
compensated by the Company for such extraordinary services and reimbursed by the
Company for all costs and expenses, including reasonable attorneys' fees,
occasioned by any controversy, litigation or event.
14. Resignation or Removal of the Depositary. The Depositary may resign
upon 30 days' advance written notice of resignation to the Company and the
Holders. The Company and the Holders may also jointly at any time remove the
Depositary by giving written notice to the Depositary. If the Depositary shall
resign or be removed, a successor Depositary, which shall be either a bank,
trust company or other financial institution constituting an Eligible
Institution (as that term is defined in Section 1.1 of the Securities Purchase
Agreement) having an office in the State of Washington and satisfactory to the
Company and the Holders, shall be appointed by written instrument executed and
delivered by the Company and the Holders to the Depositary and to such successor
depositary, and upon the resignation or removal of the predecessor Depositary,
the successor depositary shall, without any further act, deed or conveyance,
become vested with all the right, title and interest to all property held
hereunder, of such predecessor Depositary; provided that such predecessor
Depositary shall, on the written request of the Company and the Holders, execute
and deliver to such successor depositary an instrument transferring to such
successor depositary all right, title and interest hereunder in and to the
Securities Account and all other rights hereunder, of such predecessor
Depositary. If no successor depositary has been appointed at the end of 30 days
after notice of resignation by the Depositary, the Depositary hereunder may
petition any court of competent jurisdiction to name a successor depositary.
15. Depositary Not a Party to Other Agreement. By entering into this
Agreement, the Depositary is a party only to this Agreement and the Depositary
does not become a party to any other agreement, including, but not limited to,
the Securities Purchase Agreement.
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16. Reliance. The Depositary may act upon any instrument or other
writing believed by it in good faith to be genuine and to be signed or presented
by the proper person or persons and shall not be liable in connection with the
performance by it of its duties pursuant to the previsions hereof, except for
its own willful default or gross negligence. The Company and the Holders shall,
jointly and severally, indemnify and save harmless the Depositary for all
claims, losses, costs, damages, liabilities and expenses which may be incurred
on the part of the Depositary, arising out of or in connection with its entering
into this Agreement and carrying out its duties hereunder due to:
(a) The Depositary's failure to ascertain or comply with the
terms of any document, other than this Agreement, and all Exhibits and Schedules
attached hereto, unless that document is filed and the Depositary is expressly
instructed by this Agreement to comply with a specified paragraph or provision
of that document. The Company agrees to indemnify and pay the Holders for any of
the Holders' losses, costs, damages, liabilities and expenses ("Holders'
Losses") which may be incurred by the Holders as a result of the indemnity
provided to the Depositary under this Section 16 except for any Holders' Losses
paid to the Depositary by the Holders as a result of the Holders' gross
negligence or willful misconduct.
(b) Forgeries or false impersonations.
(c) Exercise of the Depositary's discretion in any particular
manner in any situation in which the Depositary is authorized by this Agreement
to exercise its discretion.
(d) Any reason other than the Depositary's gross negligence or
willful misconduct in following this Agreement and acting as Depositary
hereunder.
17. Miscellaneous.
(a) Waiver. Any party hereto may specifically waive any breach
of this Agreement by any other party (provided, in the case of any such waiver
by a Holder, that it shall first have obtained the written consent of the
Required Holders, but no such waiver shall be deemed to have been given unless
such waiver is in writing, signed by the waiving party and specifically
designating the breach waived, nor shall any such waiver constitute a continuing
waiver of similar or other breaches.
(b) Invalidity. If for any reason whatsoever any one or more
of the provisions of this Agreement shall be held or deemed to be inoperative,
unenforceable or invalid in a particular case or in all cases, such
circumstances shall not have the effect of rendering any of the other provisions
of this Agreement inoperative, unenforceable or invalid, and the inoperative,
unenforceable or invalid provision shall be construed as if it were written so
as to effectuate, to the maximum extent possible, the parties' intent.
(c) Assignment. This Agreement is personal to the parties
hereto, and the rights and duties of any party hereunder shall not be assignable
except with the prior written consent of the Company and the Holders.
Notwithstanding the foregoing, this Agreement shall inure to and be binding upon
the parties and their successors and permitted assigns.
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(d) Benefit. The parties hereto and their successors and
permitted assigns, but no others, shall be bound hereby and entitled to the
benefits hereof and to enforce this Agreement.
(e) Time. Time is of the essence with respect to each
provision of this Agreement.
(f) Entire Agreement; Amendments. This Agreement, the
Securities Purchase Agreement, the Notes and the other Ancillary Agreements
identified in the Securities Purchase Agreement contain the entire agreement
among the parties with respect to the subject matter hereof and supersede any
and all prior agreements, understandings and commitments, whether oral or
written. This Agreement may be amended only with the consent of the Company and
the Required Holders, and in the case of any provision referring to the rights
and duties of the Depositary, the Depositary.
(g) Notices. All notices and other communications required or
permitted to be given or made under this Agreement shall be in writing and shall
be deemed to have been duly given and received, regardless of when and whether
received, either: (a) on the day of hand delivery; (b) three Business Days
following the day sent, when sent by United States certified mail, postage and
certification fee prepaid, return receipt requested, addressed as set forth
below; or (c) one Business Day following the day timely delivered to a next-day
air courier addressed as set forth below:
To the Company:
Intracel Corporation
0000 XX Xxxxxxxxx Xxxx, Xxxxx 000
Xxxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxx X. XxXxxxxx
Telecopy: 000-000-0000
Telephone: 000-000-0000
To the Holders:
000 Xxxxxxxx Xxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Attention: Xxxxxxx Xxxxxx
Telecopy: 000-000-0000
Telephone:000-000-0000
To the Depositary:
0000 Xxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxxxx
Telecopy: (000) 000-0000
Telephone: (000) 000-0000
11
217
or at such other address as the specified entity most recently may have
designated in writing in accordance with this Section.
(h) Counterparts. This Agreement may be executed in one or
more counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.
(i) Captions. Captions in this Agreement are for convenience
only and shall not be considered or referred to in resolving questions of
interpretation of this Agreement.
(j) Choice of Law. The existence, validity, construction,
operation and effect of any and all terms and provisions of this Agreement shall
be determined in accordance with and governed by the Laws of the State of New
York, without regard to principles of conflicts of Laws that would result in the
application of the Law of any jurisdiction other than the State of New York.
Regardless of any provision in any other agreement, for purposes of the UCC or
the Revised UCC, New York shall be deemed to be the Depositary's location and
the Securities Account (as well as the securities entitlements related thereto)
shall be governed by the Laws of the State of New York. The parties to this
Agreement hereby agree that jurisdiction over such parties and over the subject
matter of any action or proceeding arising under this Agreement may be exercised
by a competent Court of the State of New York, or by a United States Court,
sitting in New York City. The Company hereby submits to the personal
jurisdiction of such courts, hereby waives personal service of process upon it
and consents that any such service of process may be made by certified or
registered mail, return-receipt requested, directed to the Company at its
address last specified for notices hereunder, and service so made shall be
deemed completed five (5) days after the same shall have been so mailed, and
hereby waives the right to a trial by jury in any action or proceeding with the
Depositary.
(k) Each of the Depositary and the Holders hereby represents
and warrants that this Agreement has been duly authorized, executed and
delivered on its behalf and constitutes its legal, valid and binding obligation.
(l) Conflict With Other Agreements. There are no other
agreements entered into between the Depositary and the Company with respect to
the Securities Account. In the event of any conflict between this Agreement (or
any portion thereof) and any other agreement now existing or hereafter entered
into, the terms of this Agreement shall prevail.
(m) Notice of Adverse Claims. Except for the claims and
interest of the Holders and of the Company in the Securities Account, the
Depositary does not know of any claim to, or interest in, the Securities Account
or in any "financial Asset" (as defined in Section 8-102(a) of the Revised UCC)
credited thereto. If any Person asserts any Lien, encumbrance or adverse claim
(including any writ, garnishment, judgment, warrant of attachment, execution or
similar process) against the Securities Account or in any financial Asset
carried therein, the Depositary shall promptly notify the Holders and the
Company thereof.
(n) Execution of Agreement. The execution of this Agreement by
the Depositary shall conclusively evidence its acceptance and agreement to the
terms hereof.
12
218
IN WITNESS WHEREOF, the parties have executed and delivered
this Interest Escrow Security Agreement as of the day first above written.
COMPANY: Intracel Corporation
By: /s/ XXXXX XxXXXXXX
------------------------------------
Name: Xxxxx XxXxxxxx
Title: President and Chief
Executive Officer
HOLDERS: NORTHSTAR HIGH YIELD FUND
By: /s/ XXXXXXX X. XXXXXX
------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Vice President
NORTHSTAR HIGH TOTAL RETURN FUND
By: /s/ XXXXXXX X. XXXXXX
------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Vice President
NORTHSTAR HIGH TOTAL RETURN FUND II
By: /s/ XXXXXXX X. XXXXXX
------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Vice President
NORTHSTAR STRATEGIC INCOME FUND
By: /s/ XXXXXXX X. XXXXXX
------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Vice President
13
219
DEPOSITARY: NORTHWESTERN TRUST AND INVESTORS
ADVISORY COMPANY, as Depositary
By: /s/ XXXXX X. XXXXXXXX
----------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: President & CEO
14
220
EXHIBIT A
Form of Payment Notice and Disbursement Request
[Date]
___________________
___________________
___________________
Attention: Corporate Agent
Administration Department
Re: Disbursement Request No. ____
[indicate whether revised]
Ladies and Gentlemen:
We refer to the Interest Escrow Security Agreement, dated as of
_________ (the "Interest Escrow Security Agreement") among you (the
"Depositary"), the undersigned as Holders, and Intracel Corporation, a Delaware
corporation (the "Company"). Capitalized terms used herein shall have the
meaning given in the Interest Escrow Security Agreement.
This letter constitutes a Payment Notice and Disbursement Request
under the Interest Escrow Security Agreement.
The undersigned hereby directs that you make a disbursement of
funds contained in the Securities Account in the amount of $________ to the
Holders for payment of _________.
The Depositary is entitled to rely on the foregoing in disbursing
funds relating to this Payment Notice and Disbursement Request.
_________, as Holders
By: __________________________________
Name:
Title:
15
221
EXHIBIT B
Investment Instructions
All sums on deposit shall be invested
in cash or Marketable Securities.
222
EXHIBIT C
Depositary Fees
223
EXHIBIT 10.30
Schedule A
See attached.
224
SCHEDULE A
INTELLECTUAL PROPERTY SECURITY AGREEMENT
PATENTS AND PATENT APPLICATIONS
Title Country Patent # Allowed App # Filed App #
Monoclonal Antibodies
Tumor specific monoclonal antibodies US 4,828,991
Tumor associated monoclonal antibodies derived from US 4,997,762
human B-cell line 5,180,814
AT E71410
AU 589,351
635,511
BE 0151030
CA ??3130
CH 0151030
DE P3585093
DK 408/85
EP 0151030
ES 539,987
FR 0151030
GB 0151030
GR 850,179
HU 209,519
IE 58,859
IL 74,156
91,045
IT 0151030
JP 2021518 269230/93
LU 0151030
NL 0151030
NZ 210,867
PT 79,894
SE 0151030
ZA 8,500,689
225
Schedule A
PATENTS AND PATENT APPLICATIONS
Title Country Patient # Allowed App # Filed App #
Tumor specific monoclonal antibodies US 5,106,738
Tumor associated monoclonal antibody 81AV78 US 5,348,880
XX 000000
XX 0000000
EP 92913154.8
FI 935038
XX 000000/00
XX 93/703412
WO US92/04023
Tumor associated monoclonal antibodies US 5,474,755
Monoclonal Antibody 88BV59 US 08/341469
AU 651,261
CA 2083542
EP 92203827.8
FI 925638
HU 9203932
ID P-005142
IL 103758
XX 000000/00
XX 92/23925
NO 924803
NZ 245443
TW 81109353
ZA 92/8880
Monoclonal antibody 88BV59, subclones and method of making US 08/192069
AU 17425/95
CA 2158572
EP 95909472.3
FI 954700
JP 52078/95
226
SCHEDULE A
PATENTS AND PATENT APPLICATIONS
Title Country Patent # Allowed App # Filed App #
KR 95/?Q4282
WO US95/01440
Tumor associated monoclonal antibody 123AV16 US 5,495,002
ID P-950285
WO EP95/00581
ZA 95/1113
In-vitro method for producing antigen specific human US 5,229,275
monoclonal antibodies
AT E123,311
AU 647,112
BE 0,454,225
CA 2,041,213
CH 0,454,225
DE 69,110,084.5
555
DK 0,454,225
EP 0,454,225
ES 0,454,225
FI 912,016
FR 0,454,225
GB 0,454,225
GR 3,017,162
IE 66,523
IT 0,454,225
XX 000000/00
XX 91/6661
NL 0,454,225
SE 0,454,225
ZA 91/2998
Imaging infectious foci with human IgM 16.88 US 08/346,988
227
SCHEDULE A
PATENTS AND PATENT APPLICATIONS
Title Country Patent # Allowed App # Filed App #
Chelators
Method for purifying chelator conjugated
compounds US 5,244,816
AU 656,717
CA 2,069,303
DK 0488/92
EP 90915696.0
FI 921,579
IE 3585/90
XX 000000/00
XX 92/700833
NZ 235,618
PT 95574
WO US90/05772
ZA 90/8095
Chelating agents for attaching metal ions
to proteins US 5,292,868 08/430657
5,488,126
AT E128035
AU 638,757
BE 0429644
CA 2,033,086
CH 0429644
DE 69022542.3
DK 0429644
EP 0429644 95200465.3
ES 0429644
FI 910,329
FR 0429644
GB 0429644
DE 1867/90
228
SCHEDULE A
PATENTS AND PATENT APPLICATIONS
Title Country Patent # Allowed App # Filed App #
IT 0429644
XX 000000/00
XX 91/700100
NL 0429644
SE 0429644
WO US90/02910
ZA 90/4047
Technetium-99M labelling
of proteins US 5,317,091
AU 658,403
CA 2104943
EP 92907824.4
FI 933760
XX 000000/00
XX 93/702561
WO US92/01577
Chelator IDAC-2 and methods
for purifying chelator US 08/278721
conjugated compounds 08/442856
WO US95/09285
New Polyaminocarboxylate
chelators US 95/00068
WO US95/00068
Pre-Targeting
Site specific in vivo
activation of therapeutic
drugs US 5,433,955 07/300999
08/382469
AT E123414
AU 648,015
BE 0454783
CA 2025899
CH 0454783
DE 69019959.7
DK 0454783
229
SCHEDULE A
PATENTS AND PATENT APPLICATIONS
Title Country Patent # Allowed App # Filed App #
EP 0454783
ES 0454783
FI 913,511
FR 0454783
GB 0454783
IT 0454783
XX 000000/00
XX 90/702129
LU 0454783
NL 0454783
NO 912,864
SE 0454783
WO 90/00503
In Vivo Binding Pair Pretargeting US 08/146186 08/452938
08/461267
AU 663,582
CA 2,107,558
EP 93906276 6
FI 934,857
ID P-005991
XX 000000/00
XX 93/703311
WO US93/01?58
ZA 93/3035
High yield preparation of dimene to
decamene chitin oligomers US 08/397464
IL 117052
WO US96/02705
230
SCHEDULE A
PATENTS AND PATENT APPLICATIONS
Title Country Patent # Allowed App # Filed App #
Polymer affinity systems in the delivery US 08/471264
of cytotoxic materials and other components
in the site of disease
Immunotherapy
Active specific immunotherapy US 5,484,596 08/540298
CTAA 28A32, the antigen recognized by
MCA 28A32 US 08/041529
AT 0537168
AU 660,927
BE 0537168
CA 2079601
XX 0000000
XX 0000000
DK 0537168
EP 0537168
ES 0537168
FI 000000
XX 0537168
GB 0537168
GR 0537168
IT 0537168
XX 000000/00
XX 92/702530
LU 0537168
NL 0537168
231
SCHEDULE A
PATENTS AND PATENT APPLICATIONS
Title Country Patent # Allowed App # Filed App #
SE 0537168
WO US91/02459
Antigen recognized by MCA 16.88 US 5,338,832
AT E137674
AU 618,209
BE 0328578
CA 5?1,017
CH 0328578
DE P3855290.9
DK 1025/89
EP 0328578
FR 0328578
GB 0328578
HU 4187/88
IE 2034/88
IL 86,958
IT 0328578
JP 505983/89
LU 0328578
NL 0328578
NZ 225,280
SE 0328578
WO US88/02245
ZA 88/4777
Keyhole ? hemocyanin composition with enhanced US 5,407,912 08/343808
immunogenic activity
AS 09/009,121
XX 00000/00
XX 0000000
EP 94200997.8
232
SCHEDULE A
PATENTS AND PATENT APPLICATIONS
Title Country Patent # Allowed App # Filed App #
FI 941725
ID P-940578
XX 000000/00
XX 94/8063
ZA 94/2510
Tumor associated epitope US 08/478591
CTAA 8IAV78, the antigen recognized
by human monoclonal US 08/150036
antibody 81AV78
AU 20085/92
CA 2102422
EP 92912470.9
FI 934,963
XX 000000/00
XX 93/703413
WO US92/04108
Others
Leukoregulin, an antitumor
lymphokine and its therapeutic uses US 4,849,506
5,082,657
AT E48617
AU 592,529
641,386
BE 0179127
CA 478,987
CH 0179127
DE P3574710.2
DK 170,781
170,423
EP 0179127
FI 85,867
FR 0179127
GB 0179127
233
SCHEDULE A
PATENTS AND PATENT APPLICATIONS
Title Country Patent # Allowed App # Filed App #
IT 0179127
JP 501862/85
300409/93
LU 0179127
NL 0179127
NO 170423
SE 0179127
WO US85/00626
Urethral catheter and catheterization process US 5,120,316
Immunoreactive peptides of apo(2) US 08/266407
08/456840
08/457449
08/172461
AU 81,606/94
CA 2138605
EP 942036534
FI 945976
ID P-942209
XX 000000/00
XX 94/35809
ZA 94/10145
An alignment system to overlay abdominal
computer aided tomography and magnetic US 5,299,253
resonance anatomy with single photon
emulsion tomography
234
Schedule B
INTELLECTUAL PROPERTY SECURITY AGREEMENT
TRADEMARKS
OncoSpect(TM)
Oncovax(TM)
Onconostika(TM)
Oncoscan(TM)
Oncoselect(TM)
Apo-Tek Lp(a)*
Apo-Tek Apo E*
KLH Immune Activator*
* Final name and registration to be completed
235
Schedule B
See attached.
236
INTRACEL CORPORATION
EQUIPMENT LIST
Vendor Equipment Description Total Cost
Osmonics, Inc. Steam Generator $ 48,670.00
PS. VSG-500/50TI
Xxxxxxxx Technologies, Inc. Pharmapro Sterilizer $133,460.00
PP263648D
Scientek Glassware Washer $ 61,135.00
Xxxxxx Boiler & Equipment Xxxxxx Steam Boiler $ 22,310.00
Serial #48270
Inova Pao-Systeme Auto Filling, Inserting & Screw $180,671.00
Capping Machine
VFVM 4031 031 163
Urania Engineering Co. PouchPro System with $102,472.00
Desiccant Dispenser
Telenet, Inc. Phone System $ 72,264.62
Accraply, Inc. Infeed/Outfeed Turntable $ 13,295.00
Urania Engineering Co. Rotary Band Heat Sealer $ 16,060.00
with Ink Jet Printer Interface
Model 3500P
VWR Scientific Masterpro Balance with $ 4,176.31
2 Stat Data Printers
Model 620G X 001G
VWR Scientific Branson Sonifier with $ 3,232.08
1/4" micro tip
Model 450
Bio Rad Prep Cell with Power Pac $ 11,808.50
Model 491
Bio Rad Mini Protein II Cell/Power $ 5,423.00
Pac 3000 system
VWR Eppondorf Micro-centrifuge $ 2,395.00
Model 5417C
Ismaca USA, Inc. Bio-Line Dispensing System $ 35,958.00
Total $713,330.49
237
Schedule C
1. Certain patents, patent applications and trademarks serve as collateral under
that certain Intellectual Property Security Agreement, dated August 8, 1996,
among PerImmune Holdings, Inc., PerImmune, Inc., Akzo Nobel Pharma
International, B.V. and Organon Teknika Corporation.
2. Pursuant to an Assignment Agreement, dated December 27, 1995, by and among
Intracel Corporation, Northstar Advantage High Total Return Fund and Dade
International Inc. ("Dade"), Dade assigned all its rights, title and interest
in and to a Secured Promissory Note in the amount of $4,667,000 of Intracel,
dated November 16, 1995, issued to Dade and the Related Agreements (as
defined therein) to Northstar.
3. CoreStates obtained a security interest in all the Company's assets now owned
or hereinafter acquired, which was junior to that of Credianstalt and
Northstar, pursuant to the transactions contemplated by the Note and
Series A-III Warrant Purchase Agreement between the Company and CoreStates,
dated as of June 11, 1996 ("CoreStates Agreement").
4. The Company also has certain other short-term liabilities incurred in the
ordinary course of the Company's business.
5. Pursuant to a Loan and Security Agreement, dated September 30, 1997, by
Washington Economic Development Finance Authority, Intracel Corporation, and
Transamerica Business Credit Corporation, Transamerica Business Credit
Corporation obtained a security interest in certain equipment. The first
drawdown list is attached.
6. See Schedule 3.10 to the Purchase Agreement for Leasehold Interests.
238
Schedule D
Principal Place of Business
INTRACEL CORPORATION
0000 XX Xxxxxxxxx Xxxx, Xxxxx 000
Xxxxxxxx, Xxxxxxxxxx 00000
0000 XX Xxxxxx Xxxxxxxxx
Xxxxxxxx, Xxxxxxxxxx 00000
0000 Xxxxxxx Xxxxx
Xxxxxxxxx, Xxxxxxxx 00000
00000 Xxxxxxxx Xxxxxxx
Xxxxxxxx, Xxxxxxx Xxxxxxxx
X0X 0X0, Xxxxxx
XXXXXXX, INC.
0000 XX Xxxxxxxxx Xxxx, Xxxxx 000
Xxxxxxxx, Xxxxxxxxxx 00000
PERIMMUNE, INC.
0000 Xxxxxxx Xxxxx
Xxxxxxxxx, Xxxxxxxx 00000
PERIMMUNE HOLDINGS, INC.
0000 Xxxxxxx Xxxxx
Xxxxxxxxx, Xxxxxxxx 00000
LOCATION OF ASSETS
See attached.
239
LOCATION OF XXXXXXX, INC.'S ASSETS
Ter # Rep Customer Address
2 Xxxxxxx Xxxxxxxx Xxxxx Xxxxxxxx demo
3 Xxxxxxxx Xxxxxx University of Louisville 000 Xxxxx Xxxxxxx, Xxxxxxxxxx, XX 00000
3 Xxxxxxxx Xxxxxx University of Kentucky 000 Xxxx Xxxxxx, Xxxxxxxxx, XX 00000
3 Xxxxxxxx Xxxxxx Cleveland Metrohealth Mch 0000 Xxxxxxxxxxx Xxxxx, Xxxxxxxxx, XX 00000
3 Xxxxxxxx Xxxxxx Xxxxxxxx Xxxxxx
3 Xxxxxxxx Xxxxxx Children's Hospital Medical Center 0000 Xxxxxx Xxxxxx, Xxxxxxxxxx, XX 00000
0 Xxxxxxxx Xxxxxx Xx. Xxxxxxxxx Medical Center 0000 Xxxxxxx Xxxxxx, 0xx XX, Xxxxxxxxxx, XX 00000
3 Xxxxxxxx Xxxxxx Lutheran Hospital 7950 ???? Blvd., Ft. Xxxxx, XX 00000
3 Xxxxxxxx Xxxxxx Xxxxxx Memorial Hospital 0000 XxxXxxxxx Xxx XX, X. Xxxxxxxxxx, XX 00000
3 Xxxxxxxx Xxxxxx Covance 0000 Xxxxxx Xx., Xxxxxxxxxxxx, XX 00000
4 Xxxxx Xxxxxxxx Xxxxxxx Xxxxxxxx Xxxxx Dorm VAMC 0000 Xxxxxxx Xxxxx Xxxx, Xxxxxxxx, XX 00000
4 Xxxxx Xxxxxxxx Lab South, Inc. 0000 0xx Xxx Xxxxx, Xxxxxxxxxx, XX 00000
4 Xxxxx Xxxxxxxx St. Xxxxxxx Hospital Xxx Xx. Xxxxxxx Xxxxx, Xxxxxxxxxx, XX 00000
4 Xxxxx Xxxxxxxx Erlanger Medical Center 000 X Xxxxx Xxxxxx, Xxxxxxxxxx, XX 00000
4 Xxxxx Xxxxxxxx Quest Diagnostics 000 00xx Xxx Xxxxx, Xxxxxxxxx, XX 00000
4 Xxxxx Xxxxxxxx Xxxxx Xxxxxxx Xxxxxx Xxxxxx XxXxxx Xxxx, Xxxx, XX 00000
4 Xxxxx Xxxxxxxx Xxxxx Xxxxxxxx
4 Xxxxx Xxxxxxxx ARL/Labrouth 000 X. Xxxxxxx Xxxxxx, Xxxxxxxxxx, XX 00000
4 Xxxxx Xxxxxxxx University of Alabama Hospital 000 00xx Xx Xxxxx, Xxxxxxxxxx, XX 00000
4 Xxxxx Xxxxxxxx Sarasota Memorial Hospital 0000 Xxxxx Xxxxxxxx Xxxxx, Xxxxxxxx, XX 00000
4 Xxxxx Xxxxxxxx ???? Hospital 000 Xxxxxxxx Xxx, Xxxxxxxxx, XX 00000
4 Xxxxx Xxxxxxxx to Xxxx Kota printer only inoperative/replaced by AAA0153981
Xxxxx Trowartha
4 Xxxxx Xxxxxxxx HCA W. FL Regional Medical Center 0000 X. Xxxxx Xxx., Xxxxxxxxx, XX 00000
5 Xxxx Xxxxxxx Children's Medical Center Dallas, TX
6 Xxxx Xxxxxxxxx Dakota Heartland Hospital 0000 X Xxxxxxxxxx, Xxxxx, XX 00000
6 Xxxx Xxxxxxxxx St Xxxxx Hospital 000 X Xxxxxxxxx Xx, Xxxxxxxxxxx, XX 00000
6 Xxxx Xxxxxxxxx The Pathology Center 0000 Xxxxx Xx, Xxxxx, XX 00000
6 Xxxx Xxxxxxxxx Xxxxxx Health Center 000 0xx Xxxxxx, Xxxxx Xxxx, XX
6 Xxxx Xxxxxxxxx Arkansas Children's Hospital 000 Xxxxxxxx Xxxxxx, Xxxxxx Xxxx, XX 00000
6 Xxxx Xxxxxxxxx McAlester Regional Hospital Xxx Xxxxx Xxxx Xxx, XxXxxxxxx, XX 00000
6 Xxxx Xxxxxxxxx Med Center One/Q&R Clinic 000 X. 0xx Xxxxxx, Xxxxxxx, XX 00000
0 Xxxx Xxxxxxxxx Xxxxxxx Xxxx Regional Hospital 0000 Xxxxxxxx Xx, Xxxxxxx Xxxx, XX 00000
6 Xxxx Xxxxxxxxx in-house
8 Xxxxx La Croix Childrens Hospital 0000 Xxxxxxxx'x Xxx, Xxx Xxxxx, XX 00000
8 Xxxxx La Croix San Bern Community Hospital 0000 Xxxxxxx Xxxxxx Xxxxx, Xxx Xxxx, XX 00000
0 Xxxxx Xx Xxxxx Xxx Xxxx Xxxxxx Medical Center 000 X Xxxxxxx, Xxx Xxxxxxxxxx, XX 00000
8 Xxxxx La Croix Physicians Automated Lab 0000 X Xxxxxx, Xxxxxxxxxxx, XX 00000
8 Xxxxx La Croix Bio Clinical Ref Lab 00000 Xxxxxxx Xxxx, Xxxxxxx, XX 00000
8 Xxxxx La Croix Cottage Hospital Pueblo Bath St., Santa Barbara, CA 93102
Date
Ter # Rep Customer Reader Printer Plate Shipped
2 Xxxxx Xxxxxxxx Xxxxx Xxxxxxxx 137073 134441 6/30/97
0 Xxxxxxxx Xxxxxx Xxxxxxxxxx xx Xxxxxxxxxx 000000 AAA0118810 130699 10/27/97
3 Xxxxxxxx Xxxxxx University of Kentucky 136754 130753 10/31/97
3 Xxxxxxxx Xxxxxx Cleveland Metrohealth Mch 136751 130756 10/23/97
0 Xxxxxxxx Xxxxxx Xxxxxxxx Xxxxxx 000000 AAA0124094 130787 11/13/97
3 Xxxxxxxx Xxxxxx Children's Hospital Medical Cente 136881 AAA0151961 131373 12/12/97
0 Xxxxxxxx Xxxxxx Xx. Xxxxxxxxx Xxxxxxx Xxxxxx 000000 AAA153871 131388 12/8/97
3 Xxxxxxxx Xxxxxx Lutheran Hospital 138880 AAA0159250 131363 6/15/98
3 Xxxxxxxx Xxxxxx Xxxxxx Memorial Hospital 137074 AAA0153965 131439 7/10/98
0 Xxxxxxxx Xxxxxx Xxxxxxx 000000 AAA0153858 131429 7/16/98
4 Xxxxx Xxxxxxxx Xxxxxxx Xxxxxxxx Xxxxx Dorm VAMC 136790 AAA0118792 130768 11/4/97
4 Xxxxx Xxxxxxxx Lab South, Inc.
4 Xxxxx Xxxxxxxx St. Xxxxxxx Hospital 136744 130752 10/6/97
4 Xxxxx Xxxxxxxx Erlenger Medical center 136745 130750 10/18/97
4 Xxxxx Xxxxxxxx Quest Diagnostics 136749 130751 10/16/97
4 Xxxxx Xxxxxxxx Xxxxx Medical Center 136751 130758 10/18/97
4 Xxxxx Xxxxxxxx Xxxxx Xxxxxxxx 136813 AAA0134445 130786 11/12/97
4 Xxxxx Xxxxxxxx ARL/Labrouth 136791 AAA0118794 130758 10/25/97
4 Xxxxx Xxxxxxxx University of Alabama Hospital 136884 AAA0133868 111376 12/4/97
4 Xxxxx Xxxxxxxx Sarasota Memorial Hospital 136748 130755 10/7/97
4 Xxxxx Xxxxxxxx Wueshalft Hospital 10/7/97
4 Xxxxx Xxxxxxxx to Xxxx Kota AAA0159220 6/25/98
Xxxxx Trowartha 136811 AAA0124306 130768 11/11/97
12/22/97
4 Xxxxx Xxxxxxxx HCA W. FL Regional Medical Center 136898 AAA0153981* 131374 6/9/98*
0 Xxxx Xxxxxxx Xxxxxxxx'x Xxxxxxx Xxxxxx 000000 AAA0159232 131432 7/30/98
6 Xxxx Xxxxxxxxx Dakota Heartland Hospital 136888 AAA0153985 131359 12/4/97
6 Xxxx Xxxxxxxxx St Xxxxx Hospital 14362 AH8810767 11/19/97
6 Xxxx Xxxxxxxxx The Pathology Center 136889 AAA0159242 131384 11/19/97
6 Xxxx Xxxxxxxxx Xxxxxx Health Center 12/8/97
6 Xxxx Xxxxxxxxx Arkansas Children's Hospital 136750 130757 10/22/97
6 Xxxx Xxxxxxxxx McAleister Regional Hospital 136894 AAA0153860 131367 11/16/97
6 Xxxx Xxxxxxxxx Med Center One/Q&R Clinic 137071 AAA0153980 131440 4/15/98
6 Xxxx Xxxxxxxxx Midwest City Regional Hospital 136579 AAA0159221 131371 5/12/98
6 Xxxx Xxxxxxxxx in-house 137065 131428 5/12/98
0 Xxxxx Xx Xxxxx Xxxxxxxxx Xxxxxxxx 000000 AAA0124097 131399 11/21/97
0 Xxxxx Xx Xxxxx Xxx Xxxx Xxxxxxxxx Xxxxxxxx 000000 AAA0118791 130762 10/29/97
0 Xxxxx Xx Xxxxx Xxx Xxxx Xxxxxx Medical Center 136752 AAA8006075 130760 10/29/97
8 Xxxxx La Croix Physicians Automated Lab 10/20/97
8 Xxxxx La Croix Bio Clinical Ref Lab 136746 130749 10/24/97
0 Xxxxx Xx Xxxxx Xxxxxxx Xxxxxxxx 000000 AAA0153957 131361 11/25/97
240
Date
Tsr # Rep Customer Address Reader Printer Plate Stripped
----- ------------------ ------------------------ ------------------------------ -------- ----------- ------- --------
0 Xxxxx Xx Xxxxx Xx. Mary's Hospital 0000 Xxxxxx Xxx., 136896 AAA0153867 131364 12/19/97
Xxxx Xxxxx, XX 00000
8 Xxxxx La Croix Samaritan Health Services 000 Xxxxx Xxxxxx Xx, 000000 XXX0000000 131366 0/0/00
Xxxx Xxxxxx Xxxx, XX
? Xxxxx La Croix Xxxxx La Croix demo 137079 AAA0159211 131424 6/25/98
9 Xxx ??? Pathology Associates X 00000 Xxxxxxx, 000000 ELX800??? 13168? 12/5/97
Xxxxxxx, XX 00000
9 Jan ??? Infectious Limited 0000 Xxxxx X Xxxxxx, Xxxxx 000, 136814 AAA0118786 130874 11/10/97
Laboratory Tacoma, WA
10 Xxxxx Xxxxxxxxx Xxxxx Xxxxxxxxx for demo 137061 AAA0153960 ?? ??
00 Xxxxx Xxxxxxxxx Xxxxxxx XX Alliance Lab 1803 ?? Rose Ave., York, PA 17403 137067 AAA0153959 131126 6/27/98
Xxxxxx Xxxxxxxxx For SmithKline Xxxxxxx sent to DZ 136876 AAA0152978 131370 12/11/97
13 Xxxxx Xxxxxxx Associated Pathology Labs ??? 136795 AAA0153968 130761 ??
Xxxx Xxxx Florida Hospital ??? 137060 AAA0159246 137438 ??
Xxxx Xxxx Omega Medical Labs ??? 136899 AAA0153974 131362 12/9/97
Xxxx Xxxx MedLabs 000 Xxxxxx Xxxx, ??? 136880 AAA0151952 131372 12/9/97
Xxxx Xxxx Allegheny Valley Hospital ??? 136882 AAA0153817 131375 12/9/97
Xxxx Xxxx ??? Medical Center 323 Jefford St., 137099 AAA0153814 131445 2/11/98
Xxxxxxxxxx, XX 00000
Xxxx Xxxx Mount Sinai Hospital ?? Street, 9th Floor, NY NY 10029 137099 AAA0159225 131446 1/7/98
000
XXXXXXX X
GLOBAL SECURITY AGREEMENT
242
EXHIBIT 10.31
--------------------------------------------------------------------------------
SECURITY AGREEMENT
among
Intracel Corporation,
Xxxxxxx, Inc.,
PerImmune Holdings, Inc.,
PerImmune, Inc.
and
the holders of the 12%
Guaranteed Senior Secured Primary Promissory Notes
due August 25, 2003 of
Intracel Corporation
and
the holders of the 12%
Guaranteed Senior Secured Escrow Promissory Notes
due August 25, 2003 of
Intracel Corporation
-----------------
Dated as of August 25, 1998
-----------------
--------------------------------------------------------------------------------
243
SECURITY AGREEMENT
THIS SECURITY AGREEMENT, dated as of August 25, 1998, among
Intracel Corporation, a Delaware corporation (together with its successors and
assigns, the "Company"), the Company's wholly-owned subsidiaries Xxxxxxx, Inc.
("Xxxxxxx"), PerImmune Holdings, Inc. ("Holdings") and PerImmune, Inc.
("PerImmune" and, together with Xxxxxxx and Holdings, the "Subsidiaries") and
the holders (collectively, the "Holders") of the 12% Guaranteed Senior Secured
Primary Promissory Notes (the "Guaranteed Senior Secured Primary Notes") of the
Company and the holders of the 12% Guaranteed Senior Secured Escrow Promissory
Notes (the "Guaranteed Senior Secured Escrow Notes") of the Company
(collectively, the "Notes") issued pursuant to that certain Securities Purchase
Agreement, dated as of the date hereof, by and among the Company and the other
parties thereto (the "Purchase Agreement"). As used herein, all capitalized
terms not otherwise defined herein shall have the meanings set forth in the
Purchase Agreement.
W I T N E S S E T H:
WHEREAS, the Company is to issue 12% Guaranteed Senior Secured
Primary Promissory Notes in the aggregate original principal amount of
$35,000,000 and 12% Guaranteed Senior Secured Escrow Promissory Notes in the
aggregate original principal amount of $6,000,000; and
WHEREAS, in order to secure the performance of the obligations
of the Company under the Purchase Agreement, the Notes and the Ancillary
Agreements (the "Obligations") and the guaranties relating to the Obligations
executed on the date hereof by each of the Subsidiaries, the parties hereto are
entering into this Security Agreement regarding the terms and conditions of the
Company's and Subsidiaries' (together, the "Company Parties") grant of a
security interest in the Collateral (as defined below) to the holders of the
Notes (the "Holders"); and
WHEREAS, the Company and the Holders of the Notes have entered
into the Intellectual Property Security Agreement as of the date hereof (the
"Intellectual Property Security Agreement") to secure the performance of the
Obligations, the representations, warranties, covenants, terms and provisions of
which are hereby incorporated by reference and made a part hereof; and
WHEREAS, the Company and the Holders of the Notes have entered
into an Interest Escrow Security Agreement as of the date hereof relating to the
payment of certain interest due on the Notes (the "Interest Escrow Security
Agreement"), the terms and provisions of which are hereby incorporated herein by
reference and made a part hereof, and the Company has agreed to grant to the
Holders a first priority perfected security interest in the accounts established
pursuant to the Interest Escrow Security Agreement (the "Interest Escrow
Accounts") which comprise a portion of the Collateral (as defined below); and
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WHEREAS, the Company and the Holders of the Notes have entered
into a Funded Commitment Facility Escrow Agreement as of the date hereof
relating to certain segregated escrowed funds in connection with the issuance of
the Guaranteed Senior Secured Escrow Notes (the "Funded Commitment Facility
Escrow Agreement"), the terms and provisions of which are hereby incorporated
herein by reference and made a part hereof, and the Company has agreed to grant
the Holders a first priority perfected security interest in the accounts
established pursuant to the Funded Commitment Facility Escrow Agreement (the
"Funded Commitment Facility Escrow Accounts") which comprise a portion of the
Collateral (as defined below).
NOW, THEREFORE, in consideration of the premises and other
benefits to the Company Parties, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto hereby agree as follows:
Section 1. Security Interest.
(a) Grant of Security Interest.
As collateral security for the payment and performance in full
of the Obligations in accordance with their respective terms, the Company
Parties hereby pledge, assign, transfer and grant to the Holders as to all
Collateral, a first priority perfected continuing security interest (except with
respect to certain Collateral listed on Schedule A hereto in which Akzo Nobel
Pharma International, B.V., as Collateral Agent under the Intellectual Property
Security Agreement dated August 8, 1996 (the "Collateral Agent") has a first
priority security interest (the "Akzo Security Interest Collateral") and with
respect to the Akzo Security Interest Collateral, a second priority perfected
security interest until such time as payment in full of the Debt underlying the
Akzo Security Interest Collateral has been made and at such time, a first
priority perfected security interest in the Akzo Security Interest Collateral)
(collectively, the "Security Interests") in all of the right, title and interest
of the Company Parties in and to all of the Assets, real or personal, tangible
or intangible of the Company Parties, now owned or hereafter acquired (the
"After Acquired Collateral"), wherever located, including, without limitation,
the following:
(i) All equipment in all of its forms, wherever
located, now or hereafter existing, and all
parts thereof and all accessions thereto,
with the exception of the Excluded Equipment
(any and all such equipment, parts and
accessions being the "Equipment");
(ii) All inventory in all of its forms, wherever
located, now or hereafter existing,
(including, but not limited to (i) raw
materials and work in process therefor,
finished goods thereof, and materials used
or consumed in the manufacture or
production, (ii) goods in which the Company
has an interest in mass or a joint or other
interest or right of any kind and (iii)
goods which are returned to or repossessed
by the Company, and all accessions thereto
and products thereof (any and all such
inventory, accessions and products being the
"Inventory");
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(iii) All accounts, accounts receivable, contract
rights, chattel paper, instruments,
securities (including, without limitation,
all Investment Property (as such term is
defined in the Uniform Commercial Code (the
"UCC")), general intangibles (as such term
is defined in the UCC) and other obligations
of any kind now or hereafter existing
whether or not arising out of or in
connection with the sale or lease of goods
or the rendering of services, and all rights
now or hereafter existing in and to all
options to acquire real or personal property
("Property Options"), security agreements,
leases and other contracts securing or
otherwise relating to any such accounts,
contract rights, chattel paper, instruments,
general intangibles or obligations (any and
all such accounts, contract rights, chattel
paper, instruments, general intangibles and
obligations being the "Receivables," and any
and all such options, leases, security
agreements and other contracts being the
"Related Contracts");
(iv) All real Assets and interests in real
property, now or hereafter existing wherever
located, together with all buildings,
towers, structures and other improvements
erected, situated or placed thereon and all
attachments used in connection therewith
(collectively, the "Real Property
Collateral");
(v) All Financial Accounts, including, but not
limited to the Interest Escrow Accounts, the
Funded Commitment Facility Escrow Accounts
and the Collateral Account (collectively,
the "Financial Accounts") and all sums of
money, from any source whatsoever, now or
hereafter transferred to and comprising the
Financial Accounts, including, without
limitation, all proceeds of the Collateral
paid into the Financial Accounts and any and
all interest and dividends and other income
dividend from any such moneys and all
certificates and instruments in or
representing the Financial Accounts now or
hereafter existing;
(vi) All documents (as such term is defined in
the UCC) or other receipts covering,
evidencing or representing goods, now owned
or hereafter acquired by the Company; and
(vii) All patents, patent applications and
patentable inventions now or hereafter
existing, including, without limitation,
each patent and patent application
identified in Schedule I to the Intellectual
Property Security Agreement and made a part
hereof, and including without limitation (A)
all inventions and improvements described
and claimed therein, (B) the right to xxx or
otherwise recover for any and all past,
present and future infringements and
misappropriations thereof, (C) all income,
royalties, damages and other payments now
and hereafter due and/or payable with
respect
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thereto (including, without limitation,
payments under all licenses entered into in
connection therewith, and damages and
payments for the past and future
infringements thereof), and (D) all rights
corresponding thereto throughout the world
and all reissues, divisions, continuations,
continuations-in-part, provisionals,
substitutes, renewals, and extensions
thereof, all improvements thereon and all
other rights of any kind whatsoever of the
Company accruing thereunder or pertaining
thereto (the "Patents");
(viii) All trademarks, service marks, trade names,
trade dress or other indicia of trade
origin, trademark and service xxxx
registrations, and applications for
trademark or service xxxx registrations and
any renewals thereof now or hereafter
existing, including, without limitation,
each registration and application identified
in Schedule II to the Intellectual Property
Security Agreement and made a part hereof,
and including without limitation (A) the
right to xxx or otherwise recover for any
and all past, present and future
infringements and misappropriations thereof
(B) all income, royalties, damages and other
payments now and hereafter due and/or
payable with respect thereto (including,
without limitation, payments under all
licenses entered into in connection
therewith, and damages and payments for past
or future infringements thereof), and (C)
all rights corresponding thereto throughout
the world and all other rights of any kind
whatsoever of the Company or accruing
thereunder or pertaining thereto, together
in each cash with the good will of the
business connected with the use of, and
symbolized by, each such trademark, service
xxxx, trade name, trade dress or other
indicia of trade origin (the "Trademarks");
(ix) All copyrights, whether statutory or common
law, and whether or not the underlying works
of authorship have been published, and all
works of authorship and other intellectual
property rights therein, all copyrights of
works based on, incorporated in, derived
from or relating to works covered by such
copyrights, all right, title and interest to
make and exploit all derivative works based
on or adopted from works covered by such
copyrights, and all copyright registrations
and copyright applications, and any renewals
or extensions thereof, including, without
limitation, each copyright registration and
copyright application, if any, identified in
Schedule I to the Intellectual Property
Security Agreement and made a part hereof,
and including now or hereafter existing,
without limitation, (A) the right to print,
publish and distribute any of the foregoing,
(B) the right to xxx or otherwise recover
for any and all past, present and future
infringements and misappropriations thereof,
(C) all income, royalties, damages and other
payments now and hereafter due and/or
payable with respect thereto (including,
without limitation, payments under all
licenses
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entered into in connection therewith, and
damages and payments for past or future
infringements thereof), and (D) all rights
corresponding thereto throughout the world
and all other rights and any kind whatsoever
of the Company accruing thereunder or
pertaining thereto (the "Copyrights");
(x) All license agreements with any other person
in connection with any of the Patents,
Trademarks or Copyrights, or such other
person's patents, trade names, trademarks,
service marks or copyrights, whether the
Company is a licensor or licensee under any
such license agreement, including now or
hereafter existing, without limitation, the
license agreements listed on Schedule II to
the Intellectual Property Agreement Security
attached hereto and made a part hereof,
subject, in each case to the terms of such
license agreements, including, without
limitation, terms requiring consent to a
grant of security interest, and any right to
prepare for sale, sell and advertise for
sale, all Inventory (as defined in the
Security Agreement) now or hereafter owned
by the Company and now or hereafter covered
by such licenses (the "Intangible
Licenses"); and
(xi) All products and proceeds of any and all of
the foregoing Collateral now or hereafter
existing including without limitation,
proceeds which constitute Assets of the type
described in clauses (i) through and
including (x) and to the extent not
otherwise included, all (A) payments under
insurance (whether or not the Secured Party
is the loss payee thereof), or any
indemnity, warranty or guaranty, payable by
reason of loss or damage to or otherwise
with respect to any of the foregoing
Collateral, license royalties and (B) cash.
(b) The Security Interests and Liens granted hereunder shall
be treated as (i) a first priority perfected security interest in all the
existing and future Assets of the Company, and its Subsidiaries (including but
not limited to the Collateral set forth in Section 1(a) and any Assets or After
Acquired Collateral), other than (A) the Akzo Security Interest Collateral set
forth on Schedule A attached hereto and with respect thereto, a second priority
perfected security interest until such time as payment in full of the Debt
underlying the Akzo Security Interest Collateral has been made and at such time,
a first priority perfected security interest in the Akzo Security Interest
Collateral, (B) the Excluded Equipment subject to (y) the receipt of the consent
(which the Company shall use its best efforts to obtain) of Transamerica
Business Credit Corporation ("Transamerica") to the grant of a second priority
perfected Security Interest therein and (z) upon termination of any Security
Interest by Transamerica, in which case the Holders shall automatically retain a
first priority perfected Security Interest in the Excluded Equipment,, and (C)
the Receivables secured by the Receivables Facility, but only during such time
as the Receivables Facility is existing, and a second priority perfected
Security Interest in all such Receivables, and a first priority perfected
security interest in all other Receivables; and (ii) a pledge of all the issued
and outstanding Capital Stock of the Subsidiaries of the Company. For
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purposes of this Section 1(b) the "Receivables Facility" and "Subsidiaries"
shall have the meanings set forth in the Purchase Agreement.
(c) Until the Obligations shall have been satisfied in full
and this Agreement shall have been terminated, the Company and its Subsidiaries
(as defined in the Purchase Agreement), shall not, without the Holders' prior
written consent, which consent will not be unreasonably withheld, create, incur
or assume any pledge, sale, license or assignment of any of the Collateral or
the After Acquired Collateral, or grant, convey or hypothecate any interest in
the Collateral or the After Acquired Collateral, or take any action the effect
of which is to have created any Lien, encumbrance, claim, charge, preference,
priority or other restriction on the Collateral or the After Acquired
Collateral.
(d) Certain Definitions.
All terms not otherwise defined in this Section 1 or the
Purchase Agreement, or the Notes or any Ancillary Agreement shall have their
respective meanings, if any, in the UCC as in effect in the State of New York.
"Accounts Receivable" has the meaning specified in Section
1(a)(iii) and, to the extent not otherwise described therein, (i) all accounts
(other than accounts generated from the sale or other disposition of any
Collateral of the type described in Section 1(a) clauses (i), (iv), (vi), (vii),
(viii), (ix) and (x)), (ii) all of the rights of the Company Parties to payment
for any goods or services sold by it, whether now in existence or arising from
time to time hereafter, including, without limitation, rights evidenced by an
account, note, contract, security agreement, chattel paper or other evidence of
indebtedness or security (in each case in respect of such goods or services) and
rights to payment of any interest, finance charges or other obligations with
respect thereto (all of the foregoing payments for the purposes of this
paragraph, "Payments"), in each case together with (A) all security pledged,
assigned, hypothecated or granted to or held by the Company Parties (in each
case in respect of such goods or services) to secure Payments, (B) all of the
right, title and interest of the Company Parties in and to any goods, the sale
of which gave rise to Payments to the extent of the Company Parties' interest in
such goods after such sale, (C) all proceeds thereof, (D) all insurance and
claims for insurance effected or held for the Company Parties in respect of
Payments or such goods, (E) all guarantees of any of the foregoing, (F) all
records, ledger cards and invoices of the Company Parties relating to any of the
foregoing, and (G) all credit information, reports and memoranda relating to any
of the foregoing) and (iii) all documents, books, log books, records, ledger
cards, invoices, correspondence, files, tapes, cards, and computer programs,
computer runs, computer stored data, computer print-outs, disks, data processing
software and relating to all Assets and rights of the type described above in
this definition.
"Assets" has the meaning specified in the Purchase Agreement.
"Collateral Account" means a separate custodial account or
accounts maintained by the Holders of the Notes pursuant to this Agreement.
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"Contracts" has the meaning specified in Section 1(a)(iii) and
(vi), and to the extent not otherwise described therein, all those contracts and
agreements (including, without limitation, insurance policies, franchise,
management and employment agreements) to which any Company Party is a party or
is bound or from which any Company Party is a party or is bound or from which
such Company Party derives a benefit, and shall include, without limitation, all
rights to terminate, perform, compel performance, exercise remedies and all
rights to receive Inventory, Equipment, services and proceeds of any insurance,
indemnity, warranty or guaranty.
"Copyrights" has the meaning specified in Section 1(a)(ix) and
includes the items listed under "Copyrights" on Schedule I to the Intellectual
Property Security Agreement.
"Equipment" has the meaning specified in Section 1(a)(i), and
to the extent not otherwise described therein, all goods, other than Inventory,
and, in any event, shall include, but shall not be limited to, all equipment,
machinery, furniture, furnishings, fixtures, aircraft, computer equipment,
computer hardware, tools and vehicles, together with all attachments,
components, parts, accessories and accessions installed thereon or affixed
thereto, but excluding all Excluded Equipment.
"Excluded Equipment" means the equipment listed on Schedule B,
together with all attachments, components, parts, accessories and accessions
installed thereon or affixed thereto.
"Financial Accounts" has the meaning specified in Section
1(a)(v), and to the extent not otherwise described therein, all right, title and
interest of Company Parties in all deposit, investment or other accounts
maintained with any bank, savings and loan association, broker, brokerage, or
any other financial institution, together with all monies and other Assets
deposited or held therein, including, without limitation, any checking account,
NOW account, savings account, escrow account, savings certificate and margin
account, the Interest Escrow Accounts, the Funded Commitment Facility Escrow
Accounts and the Collateral Accounts. The Company Parties hereby xxxxx x xxxx on
and assigns to the Holders each such Financial Account, whether or not such lien
or assignment is subject to the UCC.
"Funded Commitment Facility Escrow Accounts" means a separate
custodial escrow account or accounts maintained by the Company for the benefit
of the Holders of the Notes pursuant to the Funded Commitment Facility Escrow
Agreement.
"General Intangibles" has the meaning specified in Section
1(a)(iii), (vii), (viii), (ix) and (x) and to the extent not otherwise described
therein, all general intangibles, and, in any event, shall include, but not be
limited to, all rights to receive Inventory or goods that will become Inventory,
all general intangibles arising from the sale, loan, exchange or other
disposition of goods or general intangibles and all general intangibles arising
from the furnishing of services, all rights under or to any franchises, Patents,
Patent applications, know-how, inventions (whether or not patentable), Marks and
the goodwill of the business symbolized thereby, copyrights and any registration
or application relating thereto, all licenses (whether any Company Party is
licensee or licensor thereunder) but only to the extent that such licenses do
not
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prohibit the Company Parties' granting of a security interest therein or a valid
written consent to assignment or pledge has been obtained from the licensor
thereunder, all tax refunds, tax refund claims, guaranty claims, all judgments,
chooses in action and all computer software, computer programs and all general
intangibles which represent the right to receive money and all interests of the
Company Parties in any partnerships in which any of them is a general or limited
partner.
"Interest Escrow Accounts" mean a separate custodial escrow
account or accounts maintained by the Company, for the benefit of the Holders of
the Notes pursuant to the Interest Escrow Security Agreement.
"Inventory" has the meaning specified in Section 1(a)(ii) and
to the extent not otherwise described therein, all inventory of every type or
description (other than inventory subject to purchase money security interests)
and all documents covering such inventory, including, but not limited to, all
goods, merchandise and other personal Assets, held for sale, lease or exchange,
or which are furnished or are to be furnished under contracts of service, in
each case whether such goods, merchandise or other personal Assets are on
consignment, or which constitute raw materials, work in process or materials
used or consumed or to be used or consumed in the Company Parties' businesses,
or in the processing, packaging or shipping of the same, and all finished goods.
"Leases" has the meaning specified in Section 1(a) (iv) and to
the extent not otherwise described therein, any and all leasehold interests of
the Company Parties in real or personal Assets, whether any Company Party is
lessor or lessee thereunder, and any other such leasehold interests created
hereafter.
"Patents" has the meaning specified in Section 1(a)(vii) and
includes the items listed under the heading "patents" on Schedule I to the
Intellectual Property Security Agreement.
"Permitted Lien" means (i) Liens for taxes, assessments or
governmental charges or levies not delinquent or which any Company Party is in
good faith and by appropriate proceedings contesting and for which an adequate
reserve has been established in accordance with GAAP, (ii) deposits, pledges or
other items to secure obligations under workers' compensation, social security
or similar laws, or under employment insurance, (iii) indemnity, performance or
other similar bonds or deposits, pledges or other items to secure bids, tenders,
contracts (other than contracts for the payment of money), statutory
obligations, surety and appeal bonds and other obligations of like nature, in
each case arising in the ordinary course of business, (iv) interests of
landlords or other lessors under leases of real or personal Assets, (v)
statutory Liens of landlords and mechanics', workmen's, materialmen's, carrier's
or warehousemen's or other like Liens arising in the ordinary course of business
with respect to obligations which are not due or which any Company Party is in
good faith and by appropriate proceedings contesting and for which an adequate
reserve has been established in accordance with GAAP, (vi) Liens securing
purchase money Debt incurred to finance the acquisition of the Assets encumbered
by such Liens, (vii) rights of tenants, subtenants, franchisees or parties in
possession (other than a debtor-in-possession, trustee in bankruptcy or
receiver) if such rights were granted in the ordinary course of business and
vested on or before the date hereof or created
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thereafter in the ordinary course of business, (viii) interests of any customer
who has purchased goods that are held by any Company Party until delivery is
requested by such customer, (ix) Liens of any third party in insurance premiums
returned to any Company Party, which Liens secure loans by such third party to
the Company for the purpose of purchasing the insurance to which such premium
relates, (x) extensions, renewals or replacements of any Lien referred to in
paragraphs (i) through (ix) above, provided that any such extension, renewal or
replacement is granted in the ordinary course of business and limited to the
Assets originally encumbered thereby and (xi) Laws with respect to any Company
Parties' Assets and any amendments thereto now or at any time hereafter adopted
by any governmental or quasi-governmental authority having jurisdiction.
"Real Property" has the meaning specified in Section 1(a)(iv).
"Required Holders" has the meaning specified in the Purchase
Agreement.
"Trademarks" has the meaning specified in Section 1(a)(viii),
and to the extent not otherwise described therein, all trademarks, tradenames
and service marks, including, without limitation, those listed on Schedule II to
the Intellectual Property Security Agreement, which are registered in the United
States Patent and Trademark Office, any office of any state or any other
governmental authority, or in any country and all licenses of trademarks,
tradenames and service marks, as well as any unregistered marks used by any
Company Party in the United States and elsewhere, including any logos and/or
designs used in connection with any such trademarks, tradenames or service marks
and all registrations, recordings and applications for registration thereof;
Section 2. Representations, Warranties and Covenants. Each Company
Party hereby represents and warrants, covenants and agrees, with respect to
itself, that:
(a) Each Company Party owns each item of Collateral pledged by
it hereunder, and such Collateral is and shall at all times be free and clear of
any security interest, mortgage, hypothecation, pledge, lien or encumbrance or
restriction on the transfer thereof, except for (i) the Security Interests
created under this Security Agreement and the other Security Documents, (ii) the
Liens and encumbrances listed on Schedule C attached hereto (the "Existing
Liens") and (iii) Permitted Liens. Each Company Party shall pay and discharge,
or cause to be paid and discharged, when due and payable, all amounts secured by
any of the Existing Liens or Permitted Liens. Each Company Party shall maintain,
preserve and protect the security interests granted by it hereunder for as long
as this Security Agreement shall remain in full force and effect.
(b) Schedule D hereto sets forth as of the date hereof each
city, state and county where each Company Party has a place of business
(including each Company Party's chief executive office and principal place of
business) and each additional county and state where any Asset of each Company
Party is located.
(c) The information set forth in Schedules C and D attached
hereto is true, complete and correct as of the date hereof.
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(d) Each Company Party will not (i) keep Collateral or After
Acquired Collateral in any State in which financing statements have not
theretofore been filed in a manner sufficient to perfect under the UCC of such
State the Security Interests in the Collateral and the After Acquired Collateral
granted hereby, or (ii) change its name or change its chief executive office or
places of business from that shown in Schedule D, unless the Company Party (A)
gives notice to the Required Holders of such event, (B) does the appropriate
filing or other action necessary to perfect the Liens of the Holders on the
Collateral and the After Acquired Collateral and (C) delivers an Officers'
Certificate to the Required Holders stating that its obligations under Section
2(d)(B) have been fulfilled and setting forth the actions taken to comply with
such section.
(e) Each Company Party will maintain or cause to be maintained
at its expense, with financially sound and reputable insurers having a claims
paying ability of "A" or better by Standard & Poor's ("S&P") or Xxxxx'x Investor
Service, Inc. ("Moody's") insurance with respect to the Collateral and After
Acquired Collateral against loss or damage of the kinds customarily insured
against by corporations of established reputations engaged in the same or
similar business and similarly situated as such Company Party, of such types and
in such amounts as are customarily carried under similar circumstances by such
other corporations and with such deductible amounts as are customary for
companies in similar businesses similarly situated. Each Company Party will
cause the Holders to be named as an additional insured and loss payee, as its
interests may appear, under all present or future policies of insurance that
insure any of the Collateral or After Acquired Collateral. Each Company Party
will cause all policies of insurance to (i) provide that insurance proceeds with
respect to the Collateral or After Acquired Collateral shall be adjusted with
such Company Party (which shall give notice of any such loss to the Holders)
prior to a Default in payment of any Note or an Event of Default, other than an
Event of Default related to the failure to pay principal of any Note, and, on
and after a Default in payment of principal of any Note or an Event of Default,
other than an Event of Default related to the failure to pay principal of any
Note, shall be adjusted with, and payable to, the Holders and (ii) include
waivers by the insurer of all claims for insurance premiums against the Holders.
Each Company Party shall use its best efforts to obtain insurance that provides
that any losses shall be payable to the Holders, notwithstanding any act,
failure to act or negligence of, or violation of warranties, declarations or
conditions contained in such policy by, such Company Party or Holders. Insurance
policies required to be obtained hereunder shall contain an agreement by the
insurer that it will not cancel such policy except after 30 days' prior notice
to the Required Holders. Each Company Party shall deliver to the Holders
originals of such policies of insurance or certificates evidencing such
policies, together with the evidence of payment (which evidence may be an
Officers' Certificate of such Company) of all premiums then due thereon and such
Company Party shall, at least five days prior to the expiration of any such
insurance, deliver other original policies or other certificates of the insurers
evidencing the renewal of such insurances. Should any Company Party fail to
effect, maintain or renew any insurance provided for in this Section, or to pay
the premium therefor, or to deliver to the Holders any of such policies or
certificates, then in any of said events each Holder, at its option, but without
obligation so to do, may, upon 10 days' notice to such Company Party procure
such insurance. Any sums expended by the Holders to procure such insurance shall
be repaid by such Company Party within 10 days following the date on which such
expenditure shall be made by the Holders. Each Company Party annually will
deliver to the Holders a letter from an insurance broker with whom such Company
Party regularly conducts its business with respect to insurance
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setting forth the insurance obtained pursuant to this Section 2(e) and then in
effect and stating whether, as to amounts, coverage and provisions, such
insurance protects such Company Party against any and all risks that are
customarily insured against by companies in similar businesses similarly
situated. Such letter shall also set forth any recommendation of such
independent insurance broker as to additional insurance, if any, required in
order to make insurance coverage of the Collateral consistent with practice
regarding insurance coverage in the Company Party's industry. Upon notice of a
Default in payment of principal of any Note or an Event of Default, other than
an Event of Default in payment of principal of any Note, the Holders, (i) may,
(ii) upon notice from the Required Holders shall and (iii) shall, in any event,
upon acceleration of the Obligations in accordance with Section 6 of the Notes,
send written notice to all insurers for which it has received policies of
insurance or certificates evidencing such policies informing them of the
occurrence of such Default or Event of Default and instructing them to adjust
all claims as set forth above until such insurers are notified to the contrary
by the Required Holders. If such Event of Default is cured or waived prior to
acceleration of any Obligations, the Required Holders shall advise such insurers
to adjust claims with the Company Party.
(f) Each Company Party, at its own expense: (i) will do all
acts and things, and will make, execute, acknowledge and deliver, and file and
record in the proper filing and recording places all such instruments
(including, without limitation, mortgages, assignments, security agreements,
financing statements and continuation statements), required (and any that are
reasonably requested by the Holders) to establish, perfect, maintain and
continue the perfection and priority of the Security Interests of the Holders in
the Collateral and the After Acquired Collateral, in the order of priority as
described in Section 1(b), and, in addition, authorizes the Holders to execute
and file in the name of the Holders any financing or continuation statements
that the Holders may determine to be necessary or advisable to protect their
security interests with respect to the Collateral and the After Acquired
Collateral; (ii) will make all searches necessary (and any deemed necessary by
the Holders) to establish and determine the validity and priority of such
Security Interests of the Holders; provided, however, that, so long as no Event
of Default has occurred and is continuing, the Company Party shall not be
required to make any search in any location more frequently than once a year;
and (iii) will satisfy all claims and charges, other than Permitted Liens and
Existing Liens, that might reasonably be expected to materially prejudice,
imperil or otherwise adversely affect the Collateral or the After Acquired
Collateral or affect the existence, perfection or priority of such Security
Interests. A carbon, photographic or other reproduction of this Security
Agreement or a financing statement shall be sufficient as a financing statement
and may be filed in lieu of the original in any or all jurisdictions which
accept such reproductions. Each Company Party, at its own expense, will cause
any New Subsidiaries (as defined in the Purchase Agreement), to do all acts and
things required to comply with the protection and perfection of the Holders'
Security Interest under this Section 2(f), in accordance with the provisions of
Section 1(b).
(g) Neither the execution and delivery of this Security
Agreement by the Company Party, the consummation of the transactions herein
contemplated nor the fulfillment of the terms hereof violate the terms of any
agreement, indenture, mortgage, deed of trust, equipment lease, instrument or
other document to which any Company Party is a party, or conflict with any Law,
applicable to such Company Party of any court or any government, regulatory body
or administrative agency or other governmental body having jurisdiction over
such Company Party or its Assets, to the extent that such violation or conflict
would have a
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material adverse effect on the financial condition, business, assets,
liabilities or prospects of such Company Party, or on the value of the
Collateral, the After Acquired Collateral or the Security Interests.
(h) No consent or approval that has not been obtained prior to
the date hereof of any governmental body, regulatory authority or securities
exchange was or is necessary as a condition to the validity of the Security
Interests granted hereunder in the Collateral and the After Acquired Collateral
and this Security Agreement is effective to vest in the Holders the rights of
the Holders in the Collateral and the After Acquired Collateral as set forth
herein.
(i) For so long as any of the Notes shall remain outstanding,
the Company Party shall not take any action discharging, canceling,
extinguishing or otherwise impairing the Company Party's right, title and
interest in and to any of the Collateral in contravention of the terms of the
Purchase Agreement, the Notes or any of the Ancillary Agreements.
(j) The Company Party shall pay and discharge any taxes,
assessments and governmental charges and levies against any Collateral and the
After Acquired Collateral prior to delinquency thereof and shall keep all
Collateral and the After Acquired Collateral free of any unpaid charges
whatsoever, unless such charges are being contested in.
Section 3. Administration of the Collateral. The Holders shall
administer the Collateral and the After Acquired Collateral in accordance with
the provisions hereof.
Section 4. Release and Substitution of Collateral. The Collateral and
the After Acquired Collateral shall not be released from the Security Interests
created hereunder and no Assets shall be substituted for any of the Collateral
except in accordance with the provisions of Article V of the Purchase Agreement,
which provisions are hereby incorporated herein by reference.
Section 5. Default; Remedies.
(a) Defined. For purposes of this Security Agreement, the
terms "Default" and "Event of Default" shall have the respective meanings
provided in the Notes and shall include an event that with the lapse of time or
the giving of notice, or both, would constitute an Event of Default.
(b) Exercise of Remedies Under the Security Agreement. If a
Default in payment of any Obligations shall have occurred or any Event of
Default shall have occurred and be continuing, or would result therefrom, the
Holders may commence the taking of such actions (or refrain from taking actions)
toward collection or enforcement of this Security Agreement and the Collateral
or After Acquired Collateral (or any portion thereof), including, without
limitation, action toward foreclosure upon any Collateral or After Acquired
Collateral, as it deems appropriate in its sole discretion or as instructed by
the Required Holders. If any such Default or Event of Default that was the basis
for the commencement of such action shall have been cured or waived, and, in the
case where there has been an acceleration, recession of such acceleration shall
have occurred, in each case in accordance with the terms of the Purchase
Agreement, the Notes, or any of the Ancillary Agreements, as applicable, any
direction to the Holders to take
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any action in connection with the aforementioned notice shall be deemed
rescinded upon notification by the Holders of such cure, waiver or rescission of
acceleration, as the case may be.
(c) Remedies Generally. If a Default in the payment of any Obligations shall
have occurred or any Event of Default shall have occurred and be continuing or
would result therefrom, the Holders or by agents or attorneys may exercise in
respect of the Collateral or After Acquired Collateral all of the rights and
remedies set forth herein or otherwise available to a secured party upon Default
under any applicable provision of the UCC or any other applicable jurisdiction
and, in conjunction with or in addition to such rights and remedies, may
themselves or by agents or attorneys retain the Collateral or the After Acquired
Collateral or sell, assign, transfer, or dispose of, endorse and deliver the
whole or, from time to time, any part of the Collateral or the After Acquired
Collateral at public or private sale, for cash, upon credit or for other Assets,
for immediate or future delivery, and for such price or prices and on such other
terms as are satisfactory to the Holders (in their discretion) without liability
for loss or damage. Upon consummation of any such sale, the Holders shall have
the right to assign, transfer, endorse and deliver to the purchaser or
purchasers thereof the Collateral or After Acquired Collateral so sold. Each
such purchaser at any such sale shall hold the Assets sold absolutely free from
any claim or right on the part of any Company Party, and each Company Party
hereby waives (to the full extent permitted by law) all rights of redemption,
stay or appraisal which such Company Party now has or may at any time in the
future have under any rule of law or statute now existing or hereafter enacted.
The Holders shall give such Company Party ten days' written notice (which each
Company Party agrees shall be deemed to be reasonable notification within the
meaning of Section 9-504(3) of the relevant UCC) of the Holder's intention to
make any such public or private sale. Any such sale shall be held at such time
or times and at such place or places as the Holders may fix. At any such sale,
the Collateral or After Acquired Collateral, or portion thereof to be sold, may
be sold as an entirety or in separate portions, as the Holders may, in their
discretion, determine. The Holders shall not be obligated to make any sale of
the Collateral or After Acquired Collateral if it shall determine not to do so,
regardless of the fact that notice of sale of the Collateral or After Acquired
Collateral may have been given. The Holders may, without notice or publication,
adjourn any public or private sale or cause the same to be adjourned from time
to time by announcement at the time and place fixed for sale, and such sale may,
without further notice, be made at the time and place to which the same was so
adjourned. In case sale of all or any part of the Collateral or After Acquired
Collateral is made on credit or for future delivery, the Collateral or After
Acquired Collateral so sold may be retained by the Holders until the sale price
is paid by the purchaser or purchasers thereof, but the Holders shall not incur
any liability in case any such purchaser or purchasers shall fail to take up and
pay for the Collateral or After Acquired Collateral so sold and, in case of any
such failure, such Collateral may or After Acquired Collateral be sold again
upon like notice. As an alternative to exercising the power of sale herein
conferred upon it, the Holders may proceed by suit or suits at law or in equity
to foreclose this Security Agreement and sell the Collateral or After Acquired
Collateral or any portion thereof pursuant to judgment or decree of a court or
courts having competent jurisdiction. Any of the Collateral or After Acquired
Collateral may be sold, leased or otherwise disposed of, in the condition in
which the same existed when taken by the Holders or after any overhaul or repair
that the Holders shall determine to be commercially reasonable. If, under
mandatory requirements of applicable law, the Holders shall be required to make
disposition of the Collateral or After Acquired Collateral within a period of
time that does not permit the giving of notice to a Company Party as provided
herein, the Holders need give
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such Company Party only such notice of disposition as shall be reasonably
practicable in view of such mandatory requirements of law.
(d) Remedies; Obtaining the Collateral Upon Default. Each
Company Party agrees that, if a Default or Event of Default shall have occurred
and be continuing, or would result therefrom then and in every such case, and in
addition to the rights and remedies available to a secured party under any
applicable provisions of the Uniform Commercial Code, or any other applicable
law, the Holders, may:
(i) personally, or by agents or attorneys,
immediately take possession of the
Collateral or After Acquired Collateral or
any part thereof from such Company Party or
any other person who then has possession of
any part thereof, with or without notice or
process of law, and for that purpose may
enter upon such Company Party's premises
where any of the Collateral or After
Acquired Collateral is located and remove
the same and use in connection with such
removal any and all services, supplies, aids
and other facilities of such Company Party;
(ii) instruct the obligor or obligors on any
agreement, instrument or other obligation
constituting Collateral or After Acquired
Collateral to make any payment or render any
performance required by the terms of such
agreement, instrument or obligation directly
to the Holders or their designee;
(iii) withdraw all monies, securities and
instruments held by the Holders in any
Financial Account (including but not limited
to the Collateral Account, the Interest
Escrow Accounts or the Funded Commitment
Facility Escrow Accounts), or otherwise for
application to the Obligations;
(iv) sell or otherwise liquidate, or direct such
Company Party to sell or otherwise
liquidate, any or all investments made in
whole or in part with the Collateral or
After Acquired Collateral or any part
thereof, and take possession of the proceeds
of any such sale or liquidation; and
(v) take possession of the Collateral or After
Acquired Collateral or any part thereof by
directing such Company Party in writing to
deliver the same to the Holders at any place
or places designated by the Required
Holders, in which event such Company Party
shall at its own expense:
(A) forthwith cause the same to be
moved to the place or places so
designated by the Agent and there
delivered to the Holders;
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(B) store and keep any Collateral or
After Acquired Collateral so
delivered to the Holders at such
place or places pending further
action by the Required Holders as
provided in this Section 5(d); and
(C) while any such Collateral or After
Acquired Collateral shall be so
stored and kept, provide such guard
and maintenance services as shall
be necessary to protect the same
and to preserve and maintain such
Collateral or After Acquired
Collateral in good condition;
it being understood that such Company Party's obligation so to deliver
the Collateral or the After Acquired Collateral is of the essence of
this Security Agreement and that, accordingly, upon application to a
court of equity having jurisdiction, the Holders shall be entitled to a
decree requiring specific performance by such Company Party of such
obligation.
(e) Collateral Account. The Required Holders shall deposit the
proceeds of any Collateral or the After Acquired Collateral obtained or disposed
of pursuant to this Section 5 in the Collateral Account.
(f) Intellectual Property Collateral. The Holders may exercise
in respect of the Intellectual Property Collateral (as that term is defined in
the Intellectual Property Security Agreement), in addition to other rights and
remedies provided for herein or otherwise available to it, all the rights and
remedies of a secured party upon Default under the N.Y. Uniform Commercial Code,
and may also (i) require the Company or any of its Subsidiaries to, and the
Company and each of its Subsidiaries hereby agree that they will, at their
expense, and upon the request of any Holder forthwith, assemble all or part of
the documents and things embodying all or any part of the Intellectual Property
Collateral as directed by the Holders and make them available to the Holders at
a place and time to be designated by the Holders which is reasonably convenient
to the parties and (ii) without notice, except as specified below, sell the
Intellectual Property Collateral or any part thereof in one or more parcels at
public or private sale, at any of the Holder's offices or elsewhere, for cash,
on credit or for future delivery, and upon such other terms as the Holders may
deem commercially reasonably. In the event of any sale, assignment, or other
disposition of any of the Intellectual Property Collateral of the Companies or
any of its Subsidiaries, the goodwill of the business connected with and
symbolized by any Trademarks subject to such disposition shall be included and
the Company and its Subsidiaries, as the case may be, shall supply to the
Holders the Company's and its Subsidiaries', as the case may be, know-how and
expertise, and documents and things embodying the same, relating to the
manufacture, distribution, advertising and sale of the products or the provision
of services relating to any Intellectual Property Collateral subject to such
disposition, and the Company's and its Subsidiaries', as the case may be,
customer lists and other records and documents relating to the Intellectual
Property Collateral and to the manufacture, distribution, advertising and sale
of such products and services. The Company and its Subsidiaries agree that, to
the extent notice of sale shall be required by law, at least ten days' notice to
the Company and its Subsidiaries, as the case may be, of the time and place of
any public sale or the time after which any private sale is to be made shall
constitute reasonable notification. The Holders shall not be obligated to make
any
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sale of the Intellectual Property Collateral regardless of notice having been
given. The Holders may adjourn the public or private sale from time to time by
announcement at the time and place fixed therefor, and such sale may, without
further notice, be made at the time and place to which it was so adjourned.
(g) Preventing Impairment of the Collateral. Regardless of
whether there shall have occurred any Default or Event of Default, the Holders
may institute and maintain or cause in the name of each Company Party or of the
Required Holders, or both, to be instituted or maintained, such suits and
proceedings as the Required Holders may be advised by counsel shall be necessary
or expedient to prevent any impairment of the Collateral or After Acquired
Collateral in contravention of the terms hereof or of the Purchase Agreement,
the Notes or any Ancillary Agreements.
Section 6. Holders Appointed Attorney-in-Fact. Each Company Party
hereby constitutes and appoints the Holders their attorney-in-fact for all
Collateral for the purpose of carrying out the provisions, but subject to the
terms and conditions, of this Security Agreement and taking any action and
executing any instrument, including, without limitation, any financing
statements or continuation statements, and taking any other action to maintain
the validity, perfection and enforcement of the Security Interests intended to
be created hereunder, that the Holders may deem necessary or advisable to
accomplish the purposes hereof, which appointment is irrevocable and coupled
with an interest.
Section 7. Purchase of Collateral by Required Holders. At any sale of
the Collateral or After Acquired Collateral, whether pursuant to power of sale
or otherwise hereunder, any Holder of the Notes may, to the extent permitted by
applicable law, bid for and purchase, free from any right of redemption, stay or
appraisal (all such rights being hereby waived and released by each Company
Party to the extent permitted by law), the Collateral or After Acquired
Collateral or any party thereof or any interest therein and upon compliance with
the terms of such sale may hold, retain, exploit, resell or otherwise dispose of
such Assets without further accountability to the Company Party for the proceeds
of such sale. Each Company Party will execute and deliver, or cause to be
executed and delivered, such instruments, endorsements, assignments, waivers,
certificates and other documents and take such further action as the Holder of
the Notes shall reasonably request in connection with any such sale.
Section 8. Disposition of Proceeds. The proceeds of any sale or other
disposition of the whole or any part of the Collateral or After Acquired
Collateral by the Holders pursuant to this Security Agreement, together with any
other monies held by the Holders pursuant to this Security Agreement, shall be
applied by the Holders in accordance with the provisions of the Notes.
Section 9. Waiver of Claims. Except as otherwise provided in this
Security Agreement, EACH COMPANY PARTY HEREBY WAIVES, TO THE EXTENT PERMITTED BY
APPLICABLE LAW, NOTICE OF JUDICIAL HEARING IN CONNECTION WITH THE REQUIRED
HOLDERS' TAKING POSSESSION OR THE REQUIRED HOLDERS' DISPOSITION OF ANY OF THE
COLLATERAL IN ACCORDANCE WITH THE TERMS HEREOF. THE PURCHASE AGREEMENT, THE
NOTES, AND ANY ANCILLARY AGREEMENTS INCLUDING, WITHOUT LIMITATION, ANY AND ALL
PRIOR NOTICES
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AND HEARINGS FOR ANY PREJUDGMENT REMEDY OR REMEDIES AND ANY SUCH RIGHT THAT THE
COMPANY PARTY WOULD OTHERWISE HAVE UNDER THE CONSTITUTION OR ANY STATUTE OF THE
UNITED STATES OR OF ANY STATE, and, to the fullest extent permitted by
applicable law, each Company Party hereby further waives:
(a) all damages occasioned by such taking of possession except
any damages that are the direct result of the Holders' gross negligence, bad
faith or willful misconduct; and
(b) all other requirements as to the time, place and terms of
sale or other requirements with respect to the enforcement of the Holders'
rights and powers hereunder.
Any sale of, or the exercise of any options to purchase, or
any other realization upon, any Collateral or After Acquired Collateral shall
operate to divest all right, title, interest, claim and demand, at law or in
equity, of the Company Party therein and thereto, and shall be a perpetual bar
both at law and in equity against the Company Party and against any and all
persons claiming or attempting to claim the Collateral or After Acquired
Collateral so sold, optioned or realized upon, or any part thereof, through and
under such Company Party.
Section 10. Remedies Cumulative; No Waiver. Each right, power and
remedy of the Holders provided for herein, in the Purchase Agreement, the Notes
and any Ancillary Agreement or in another agreement pursuant to which a Lien is
created in favor of any Holder, or now or hereafter existing at Law or in
equity, by statute or otherwise, shall be cumulative and concurrent and shall be
in addition to every other right, power or remedy of any Holder provided for
herein, in the Purchase Agreement, the Note or in any other Ancillary Agreement
or in another agreement pursuant to which a Lien is created in favor of any
Holder or now or hereafter existing at Law or in equity, by statute or
otherwise. No failure on the part of any Holder to exercise, and no delay in
exercising, any right, power or remedy hereunder or under any such other
agreement or now or hereafter existing at Law or in equity, by statute or
otherwise, shall operate as a waiver thereof, nor shall any single or partial
exercise of any such right, power or remedy preclude any other or further
exercise thereof or the exercise of any other right, power or remedy. No notice
to or demand on any Company Party hereunder shall, of itself, entitle it to any
other or further notice or demand in the same, similar or other circumstances.
Section 11. Additional Collateral. Without notice or consent of any
Company Party and without impairment of the Security Interests and rights
created by this Security Agreement, the Holders may accept from any person or
persons additional Collateral or other security for the Obligations. The
creation of the security interest created hereunder shall not prevent the
Holders from resorting to such additional Collateral or security without
affecting the Holders' rights hereunder. The Holders' acceptance of any such
additional Collateral or security shall not prevent the Holders from resorting
to the Collateral without affecting the Holders' rights in and to such
additional Collateral or the After Acquired Collateral or security.
Section 12. Further Assurances. Each Company Party agrees (a) that it
shall, at its own expense, file or record such notices, financing statements,
continuation statements or other documents as may be necessary to perfect the
Security Interests, and as the Holders may reasonably request, such instruments
to be in form and substance satisfactory to the Holders and (b) that each
Company Party shall, and shall cause all new Subsidiaries (as that term is
defined in
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the Purchase Agreement), at its own expense, do such further acts and things and
execute and deliver to the Holders such additional conveyances, assignments,
agreements and instruments as the Holders may at any time reasonably request in
connection with the administration and enforcement of this Security Agreement or
relative to the Collateral or the After Acquired Collateral or any part thereof
or in order to assure and confirm unto the Holders, their rights, powers and
remedies hereunder.
Section 13. Expenses and Indemnification.
(a) Expenses. The Company Parties agree to pay to the Holders
from time to time upon demand, all reasonable fees, costs and expenses of the
Holders (including, without limitation, the reasonable fees and disbursements of
counsel) (i) arising in connection with the preparation, execution, delivery,
modification or termination of this Security Agreement or the enforcement of any
of the provisions hereof or (ii) incurred or required to be advanced in
connection with the sale or other disposition of any Collateral or After
Acquired Collateral pursuant to this Security Agreement and the preservation,
protection or defense of the Holders' rights under this Security Agreement or in
and to the Collateral or After Acquired Collateral.
(b) Stamp and Other Taxes. The Company Parties hereby agree to
indemnify each Holder for, and hold each of them harmless against, any present
or future claim for liability for any stamp or other similar tax and any
penalties or interest with respect thereto, which may be assessed, levied or
collected by any jurisdiction in connection with this Security Agreement or any
Collateral or After Acquired Collateral.
(c) Filing Fees, Excise Taxes, Etc. The Company Parties hereby
agree to pay or to reimburse the Holders for any and all amounts in respect of
all search, filing, recording and registration fees, taxes, excise taxes and
other similar imposts which may be payable or determined to be payable in
respect of the execution, delivery, performance and enforcement of this Security
Agreement.
(d) Survival of Obligations. The Obligations of the Company
Parties set forth in this Section 13 shall survive the execution, delivery and
termination of this Security Agreement and the payment of all other Obligations.
Section 14. Obligations Absolute. The liability of the Company Parties
under this Security Agreement shall remain in full force and effect without
regard to, and shall not be released, suspended, discharged, terminated or
otherwise affected by (a) any change in the time, place or manner of payment of
all or any of the Obligations, or in any other term of this Agreement or the
Purchase Agreement, any Ancillary Agreement or the Notes, any waiver,
indulgence, renewal, extension, amendment or modification of or addition,
consent or supplement to or deletion from or any other action or inaction under
or in respect of this Agreement or the Purchase Agreement, the Notes or any
Ancillary Agreement or any assignment or transfer thereof; (b) any lack of
validity or enforceability, in whole or in part, of this Agreement or the
Purchase Agreement, any Ancillary Agreement or the Notes; (c) any furnishing of
any additional security for the Obligations or any acceptance thereof or any
release or non-perfection of any Security Interests in the Assets other than the
Collateral or After Acquired Collateral; (d) any limitation on any party's
liability or obligations under this
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Agreement or the Purchase Agreement, any Ancillary Agreement or the Notes; (e)
any bankruptcy, insolvency, reorganization, composition, adjustment,
dissolution, liquidation or other like proceeding relating to any Company Party,
or any action taken with respect to this Security Agreement by any trustee or
receiver, or by any court, in any such proceeding, whether or not the Company
Party shall have notice or knowledge of any of the foregoing; (f) any exchange,
release or amendment or waiver of or consent to departure from this Agreement,
the Purchase Agreement, the Notes, any Ancillary Agreement or any other
agreement pursuant to which a Lien is created in favor of any Holder, pursuant
to which a person other than the respective Company Party has granted a security
interest; or (g) any other circumstance that might otherwise constitute a
defense available to, or discharge of, any Company Party.
Section 15. Waiver. To the extent permitted by applicable law, each
Company Party hereby waives promptness, diligence, notice of acceptance and any
other notice with respect to any of the Obligations and this Security Agreement
and any requirement that the Holders protect, secure, perfect or insure any
security interest or any Assets subject thereto or exhaust any right or take any
action against the Company Party or any other person or entity; provided,
however, that the Holders shall in any event take such care in the handling of
any Collateral or After Acquired Collateral in its possession as it takes with
respect to the Assets of a similar nature in its possession.
Section 16. Termination. Upon payment in full and satisfaction of all
of the Obligations, this Security Agreement shall terminate and the Holders
shall reassign and redeliver to each Company Party all Collateral and After
Acquired Collateral hereunder that has not been sold, disposed of, retained or
applied by the Holders in accordance with the terms hereof and the Notes. Such
reassignment and redelivery shall be without warranty by or recourse to the
Holders, and shall be at the expense of such Company Party. At such time, this
Security Agreement shall no longer constitute a Lien upon or grant any Security
Interest in any of the Collateral and After Acquired Collateral; and the Holders
shall, at such Company Party's expense, deliver to the Company Party written
acknowledgment thereof and of cancellation of this Security Agreement in a form
as reasonably requested by the Company Party and adequate for proper filing or
recording in such offices and such jurisdictions as the Company Party reasonably
deems necessary to release the Security Interests granted hereby. This Security
Agreement shall continue to be effective or be reinstated, as the case may be,
if at any time any payment of any of the Obligations is rescinded or must
otherwise be returned upon the insolvency, bankruptcy or reorganization of any
Company Party, all as though such payment had not been made.
Section 17. Notices. Any notices or other communications required or
permitted hereunder shall be in writing, and shall be sufficiently given if made
by hand delivery or by registered or certified mail, postage prepaid, return
receipt requested or by nationwide overnight delivery service (with charges
prepaid) addressed as follows:
If to any Company Party:
Intracel Corporation
0000 XX Xxxxxxxxx Xxxx, Xxxxx 000
Xxxxxxxx, Xxxxxxxxxx 00000
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Attention: Chief Executive Officer
Fax Number: (000) 000-0000
Confirm Number: (000) 000-0000
cc: Xxxxxxxx & Xxxxxxxx LLP
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxxxxx, Esq.
If to the Holders:
Northstar High Yield Fund
Northstar High Total Return Fund
Northstar High Total Return Fund II
Northstar Strategic Income Fund
000 Xxxxx Xxxxxxxx Xxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Attention: Xx. Xxxxxxx X. Xxxxxx
Fax Number: (000) 000-0000
Confirm Number: (000) 000-0000
cc: Reboul, MacMurray, Xxxxxx, Xxxxxxx & Kristol
00 Xxxxxxxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx X. Xxxxxxxxx, Esq.
Each party hereto may by notice to the other party designate such additional or
different addresses as shall be furnished in writing by such party. Any notice
or communication to any party shall be deemed to have been given or made as of
the date so delivered, if personally delivered; and three calendar days after
mailing if sent by registered or certified mail (except that a notice of change
of address shall not be deemed to have been given until actually received by the
addressee) or one day after delivery to an overnight express service for next
day delivery, as the case may be. The Company Parties may give notice to the
Holders at the address set forth above, or any different address as shall be
specified for them in the Company's records.
Section 18. Binding Agreement; Assignment. This Security Agreement
shall be binding upon and inure to the benefit of the Company Parties and the
Holders and their respective successors and permitted assigns. Neither this
Security Agreement nor any Interest herein or in the Collateral or After
Acquired Collateral, or any part thereof, may be assigned by the Company
Parties; provided, however, that this Security Agreement may be assigned by a
Company Party and shall be deemed to be automatically assigned by a Company
Party to any person who succeeds to the Company Party, provided however, that
the Company Parties shall not as a result of such assignment be relieved of any
Obligations hereunder or under the Purchase Agreement, the Notes or any
Ancillary Agreements. This Security Agreement shall be deemed to be
automatically assigned by the Holders to any person who succeeds to or replaces
the
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Holders in accordance with the terms hereof, and its assignee shall have all
rights and powers of, and act as, the Holder hereunder.
Section 19. Governing Law. THE PARTIES HERETO EXPRESSLY ACKNOWLEDGE AND
AGREE THAT, IN ACCORDANCE WITH THE PROVISIONS OF NEW YORK GENERAL OBLIGATIONS
LAW SECTION 5-1401 GOVERNING AGREEMENTS RELATING TO ANY OBLIGATION ARISING OUT
OF A TRANSACTION COVERING IN THE AGGREGATE NOT LESS THAN $250,000, THIS SECURITY
AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK, EXCEPT TO THE EXTENT THAT THE VALIDITY OR THE PERFECTION OF
THE SECURITY INTERESTS HEREUNDER, OR REMEDIES HEREUNDER, IN RESPECT OF ANY
PARTICULAR COLLATERAL ARE GOVERNED BY THE LAWS OF A JURISDICTION OTHER THAN NEW
YORK. TO THE FULLEST EXTENT THEY MAY EFFECTIVELY DO SO UNDER APPLICABLE LAW, THE
PARTIES HERETO HEREBY IRREVOCABLY SUBMIT TO THE JURISDICTION OF ANY NEW YORK
STATE COURT SITTING IN THE BOROUGH OF MANHATTAN IN NEW YORK CITY OR ANY FEDERAL
COURT SITTING IN THE BOROUGH OF MANHATTAN IN NEW YORK CITY IN RESPECT OF ANY
SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS SECURITY
AGREEMENT, AND IRREVOCABLY AGREE THAT ALL CLAIMS IN RESPECT OF ANY SUCH SUIT,
ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN ANY SUCH COURT. THE PARTIES
HERETO IRREVOCABLY WAIVE, TO THE FULLEST EXTENT THEY MAY EFFECTIVELY DO SO UNDER
APPLICABLE LAW, TRIAL BY JURY AND ANY OBJECTION WHICH THEY MAY NOW OR HEREAFTER
HAVE TO THE LAYING OF THE VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT
IN ANY SUCH COURT AND ANY CLAIM THAT ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT
IN ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.
Section 20. Amendments. This Security Agreement may not be amended or
modified except by a written agreement signed by the Company and the required
Holders.
Section 21. Severability. In the event that any provision contained in
this Security Agreement shall for any reason be held to be illegal or invalid
under the Laws of any jurisdiction, such illegality or invalidity shall in no
way impair the effectiveness of any other provision hereof, or of such provision
under the laws of any other jurisdiction; provided, that in the construction and
enforcement of such provision under the laws of the jurisdiction in which such
holding of illegality or invalidity exists, and to the extent only of such
illegality or invalidity, this Security Agreement shall be construed and
enforced as though such illegal or invalid provision had not been contained
herein.
Section 22. Headings. Section headings used herein are inserted for
convenience only and shall not in any way affect the meaning or construction of
this Security Agreement.
Section 23. Counterparts. This Security Agreement may be executed in
any number of counterparts, each of which when so executed and delivered shall
be an original, and all of
21
264
which shall together constitute but one and the same instrument. A complete set
of counterparts shall be lodged with the Holders.
22
265
IN WITNESS WHEREOF, the Company Parties and the Holders have caused
this Security Agreement to be executed and delivered by their respective
officers thereunto duly authorized as of the date first above written.
INTRACEL CORPORATION
By: /s/ XXXXX X. XxXXXXXX
----------------------------------
Name: Xxxxx X. XxXxxxxx
Title: President and Chief
Executive Officer
XXXXXXX, INC.
By: /s/ XXXXX X. XxXXXXXX
----------------------------------
Name: Xxxxx X. XxXxxxxx
Title: President and Chief
Executive Officer
PERIMMUNE HOLDINGS, INC.
By: /s/ XXXXX X. XxXXXXXX
----------------------------------
Name: Xxxxx X. XxXxxxxx
Title: President and Chief
Executive Officer
PERIMMUNE, INC.
By: /s/ XXXXX X. XxXXXXXX
----------------------------------
Name: Xxxxx X. XxXxxxxx
Title: President and Chief
Executive Officer
NORTHSTAR HIGH YIELD FUND
By: /s/ XXXXXXX X. XXXXXX
----------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Vice President
23
266
NORTHSTAR HIGH TOTAL RETURN FUND
By: /s/ XXXXXXX X. XXXXXX
----------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Vice President
NORTHSTAR HIGH TOTAL RETURN FUND II
By: /s/ XXXXXXX X. XXXXXX
----------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Vice President
NORTHSTAR STRATEGIC INCOME FUND
By: /s/ XXXXXXX X. XXXXXX
----------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Vice President
24
267
Schedule A
See attached.
268
SCHEDULE A
INTELLECTUAL PROPERTY SECURITY AGREEMENT
PATENTS AND PATENT APPLICATIONS
Title Country Patent # Allowed App # Filed App #
Monoclonal Antibodies
Tumor specific monoclonal antibodies US 4,828,991
Tumor associated monoclonal antibodies derived from US 4,997,762
human B-cell line 5,180,814
AT E71410
AU 589,351
635,511
BE 0151030
CA ??3130
CH 0151030
DE P3585093
DK 408/85
EP 0151030
ES 539,987
FR 0151030
GB 0151030
GR 850,179
HU 209,519
IE 58,859
IL 74,156
91,045
IT 0151030
JP 2021518 269230/93
LU 0151030
NL 0151030
NZ 210,867
PT 79,894
SE 0151030
ZA 8,500,689
269
Schedule A
PATENTS AND PATENT APPLICATIONS
Title Country Patient # Allowed App # Filed App #
Tumor specific monoclonal antibodies US 5,106,738
Tumor associated monoclonal antibody 81AV78 US 5,348,880
XX 000000
XX 0000000
EP 92913154.8
FI 935038
XX 000000/00
XX 93/703412
WO US92/04023
Tumor associated monoclonal antibodies US 5,474,755
Monoclonal Antibody 88BV59 US 08/341469
AU 651,261
CA 2083542
EP 92203827.8
FI 925638
HU 9203932
ID P-005142
IL 103758
XX 000000/00
XX 92/23925
NO 924803
NZ 245443
TW 81109353
ZA 92/8880
Monoclonal antibody 88BV59, subclones and method of making US 08/192069
AU 17425/95
CA 2158572
EP 95909472.3
FI 954700
JP 52078/95
270
SCHEDULE A
PATENTS AND PATENT APPLICATIONS
Title Country Patent # Allowed App # Filed App #
KR 95/?Q4282
WO US95/01440
Tumor associated monoclonal antibody 123AV16 US 5,495,002
ID P-950285
WO EP95/00581
ZA 95/1113
In-vitro method for producing antigen specific human US 5,229,275
monoclonal antibodies
AT E123,311
AU 647,112
BE 0,454,225
CA 2,041,213
CH 0,454,225
DE 69,110,084.5
555
DK 0,454,225
EP 0,454,225
ES 0,454,225
FI 912,016
FR 0,454,225
GB 0,454,225
GR 3,017,162
IE 66,523
IT 0,454,225
XX 000000/00
XX 91/6661
NL 0,454,225
SE 0,454,225
ZA 91/2998
Imaging infectious foci with human IgM 16.88 US 08/346,988
271
SCHEDULE A
PATENTS AND PATENT APPLICATIONS
Title Country Patent # Allowed App # Filed App #
Chelators
Method for purifying chelator conjugated
compounds US 5,244,816
AU 656,717
CA 2,069,303
DK 0488/92
EP 90915696.0
FI 921,579
IE 3585/90
XX 000000/00
XX 92/700833
NZ 235,618
PT 95574
WO US90/05772
ZA 90/8095
Chelating agents for attaching metal ions
to proteins US 5,292,868 08/430657
5,488,126
AT E128035
AU 638,757
BE 0429644
CA 2,033,086
CH 0429644
DE 69022542.3
DK 0429644
EP 0429644 95200465.3
ES 0429644
FI 910,329
FR 0429644
GB 0429644
DE 1867/90
272
SCHEDULE A
PATENTS AND PATENT APPLICATIONS
Title Country Patent # Allowed App # Filed App #
IT 0429644
XX 000000/00
XX 91/700100
NL 0429644
SE 0429644
WO US90/02910
ZA 90/4047
Technetium-99M labelling
of proteins US 5,317,091
AU 658,403
CA 2104943
EP 92907824.4
FI 933760
XX 000000/00
XX 93/702561
WO US92/01577
Chelator IDAC-2 and methods
for purifying chelator US 08/278721
conjugated compounds 08/442856
WO US95/09285
New Polyaminocarboxylate
chelators US 95/00068
WO US95/00068
Pre-Targeting
Site specific in vivo
activation of therapeutic
drugs US 5,433,955 07/300999
08/382469
AT E123414
AU 648,015
BE 0454783
CA 2025899
CH 0454783
DE 69019959.7
DK 0454783
273
SCHEDULE A
PATENTS AND PATENT APPLICATIONS
Title Country Patent # Allowed App # Filed App #
EP 0454783
ES 0454783
FI 913,511
FR 0454783
GB 0454783
IT 0454783
XX 000000/00
XX 90/702129
LU 0454783
NL 0454783
NO 912,864
SE 0454783
WO 90/00503
In Vivo Binding Pair Pretargeting US 08/146186 08/452938
08/461267
AU 663,582
CA 2,107,558
EP 93906276 6
FI 934,857
ID P-005991
XX 000000/00
XX 93/703311
WO US93/01?58
ZA 93/3035
High yield preparation of dimene to
decamene chitin oligomers US 08/397464
IL 117052
WO US96/02705
274
SCHEDULE A
PATENTS AND PATENT APPLICATIONS
Title Country Patent # Allowed App # Filed App #
Polymer affinity systems in the delivery US 08/471264
of cytotoxic materials and other components
in the site of disease
Immunotherapy
Active specific immunotherapy US 5,484,596 08/540298
CTAA 28A32, the antigen recognized by
MCA 28A32 US 08/041529
AT 0537168
AU 660,927
BE 0537168
CA 2079601
XX 0000000
XX 0000000
DK 0537168
EP 0537168
ES 0537168
FI 000000
XX 0537168
GB 0537168
GR 0537168
IT 0537168
XX 000000/00
XX 92/702530
LU 0537168
NL 0537168
275
SCHEDULE A
PATENTS AND PATENT APPLICATIONS
Title Country Patent # Allowed App # Filed App #
SE 0537168
WO US91/02459
Antigen recognized by MCA 16.88 US 5,338,832
AT E137674
AU 618,209
BE 0328578
CA 5?1,017
CH 0328578
DE P3855290.9
DK 1025/89
EP 0328578
FR 0328578
GB 0328578
HU 4187/88
IE 2034/88
IL 86,958
IT 0328578
JP 505983/89
LU 0328578
NL 0328578
NZ 225,280
SE 0328578
WO US88/02245
ZA 88/4777
Keyhole ? hemocyanin composition with enhanced US 5,407,912 08/343808
immunogenic activity
AS 09/009,121
AU 60519/94
CA 2121296
EP 942009978
276
SCHEDULE A
PATENTS AND PATENT APPLICATIONS
Title Country Patent # Allowed App # Filed App #
FI 941725
ID P-940578
XX 000000/00
XX 94/8063
ZA 94/2510
Tumor associated epitope US 08/478591
CTAA 8IAV78, the antigen recognized
by human monoclonal US 08/150036
antibody 81AV78
AU 20085/92
CA 2102422
EP 92912470.9
FI 934,963
XX 000000/00
XX 93/703413
WO US92/04108
Others
Leukoregulin, an antitumor
lymphokine and its therapeutic uses US 4,849,506
5,082,657
AT E48617
AU 592,529
641,386
BE 0179127
CA 478,987
CH 0179127
DE P3574710.2
DK 170,781
170,423
EP 0179127
FI 85,867
FR 0179127
GB 0179127
277
SCHEDULE A
PATENTS AND PATENT APPLICATIONS
Title Country Patent # Allowed App # Filed App #
IT 0179127
JP 501862/85
300409/93
LU 0179127
NL 0179127
NO 170423
SE 0179127
WO US85/00626
Urethral catheter and catheterization process US 5,120,316
Immunoreactive peptides of apo(2) US 08/266407
08/456840
08/457449
08/172461
AU 81,606/94
CA 2138605
EP 942036534
FI 945976
ID P-942209
XX 000000/00
XX 94/35809
ZA 94/10145
An alignment system to overlay abdominal
computer aided tomography and magnetic US 5,299,253
resonance anatomy with single photon
emulsion tomography
278
Schedule B
INTELLECTUAL PROPERTY SECURITY AGREEMENT
TRADEMARKS
OncoSpect(TM)
Oncovax(TM)
Onconostika(TM)
Oncoscan(TM)
Oncoselect(TM)
Apo-Tek Lp(a)*
Apo-Tek Apo E*
KLH Immune Activator*
* Final name and registration to be completed
279
Schedule B
See attached.
280
INTRACEL CORPORATION
EQUIPMENT LIST
Vendor Equipment Description Total Cost
Osmonics, Inc. Steam Generator $ 48,670.00
PS. VSG-500/50TI
Xxxxxxxx Technologies, Inc. Pharmapro Sterilizer $133,460.00
PP263648D
Scientek Glassware Washer $ 61,135.00
Xxxxxx Boiler & Equipment Xxxxxx Steam Boiler $ 22,310.00
Serial #48270
Inova Pao-Systeme Auto Filling, Inserting & Screw $180,671.00
Capping Machine
VFVM 4031 031 163
Urania Engineering Co. PouchPro System with $102,472.00
Desiccant Dispenser
Telenet, Inc. Phone System $ 72,264.62
Accraply, Inc. Infeed/Outfeed Turntable $ 13,295.00
Urania Engineering Co. Rotary Band Heat Sealer $ 16,060.00
with Ink Jet Printer Interface
Model 3500P
VWR Scientific Masterpro Balance with $ 4,176.31
2 Stat Data Printers
Model 620G X 001G
VWR Scientific Branson Sonifier with $ 3,232.08
1/4" micro tip
Model 450
Bio Rad Prep Cell with Power Pac $ 11,808.50
Model 491
Bio Rad Mini Protein II Cell/Power $ 5,423.00
Pac 3000 system
VWR Eppondorf Micro-centrifuge $ 2,395.00
Model 5417C
Ismaca USA, Inc. Bio-Line Dispensing System $ 35,958.00
Total $713,330.49
281
Schedule C
1. Certain patents, patent applications and trademarks serve as collateral under
that certain Intellectual Property Security Agreement, dated August 8, 1996,
among PerImmune Holdings, Inc., PerImmune, Inc., Akzo Nobel Pharma
International, B.V. and Organon Teknika Corporation.
2. Pursuant to an Assignment Agreement, dated December 27, 1995, by and among
Intracel Corporation, Northstar Advantage High Total Return Fund and Dade
International Inc. ("Dade"), Dade assigned all its rights, title and interest
in and to a Secured Promissory Note in the amount of $4,667,000 of Intracel,
dated November 16, 1995, issued to Dade and the Related Agreements (as
defined therein) to Northstar.
3. CoreStates obtained a security interest in all the Company's assets now owned
or hereinafter acquired, which was junior to that of Credianstalt and
Northstar, pursuant to the transactions contemplated by the Note and
Series A-III Warrant Purchase Agreement between the Company and CoreStates,
dated as of June 11, 1996 ("CoreStates Agreement").
4. The Company also has certain other short-term liabilities incurred in the
ordinary course of the Company's business.
5. Pursuant to a Loan and Security Agreement, dated September 30, 1997, by
Washington Economic Development Finance Authority, Intracel Corporation, and
Transamerica Business Credit Corporation, Transamerica Business Credit
Corporation obtained a security interest in certain equipment. The first
drawdown list is attached.
6. See Schedule 3.10 to the Purchase Agreement for Leasehold Interests.
282
Schedule D
Principal Place of Business
INTRACEL CORPORATION
0000 XX Xxxxxxxxx Xxxx, Xxxxx 000
Xxxxxxxx, Xxxxxxxxxx 00000
0000 XX Xxxxxx Xxxxxxxxx
Xxxxxxxx, Xxxxxxxxxx 00000
0000 Xxxxxxx Xxxxx
Xxxxxxxxx, Xxxxxxxx 00000
00000 Xxxxxxxx Xxxxxxx
Xxxxxxxx, Xxxxxxx Xxxxxxxx
X0X 0X0, Xxxxxx
XXXXXXX, INC.
0000 XX Xxxxxxxxx Xxxx, Xxxxx 000
Xxxxxxxx, Xxxxxxxxxx 00000
PERIMMUNE, INC.
0000 Xxxxxxx Xxxxx
Xxxxxxxxx, Xxxxxxxx 00000
PERIMMUNE HOLDINGS, INC.
0000 Xxxxxxx Xxxxx
Xxxxxxxxx, Xxxxxxxx 00000
LOCATION OF ASSETS
See attached.
283
LOCATION OF XXXXXXX, INC.'S ASSETS
Ter # Rep Customer Address
2 Xxxxxxx Xxxxxxxx Xxxxx Xxxxxxxx demo
3 Xxxxxxxx Xxxxxx University of Louisville 000 Xxxxx Xxxxxxx, Xxxxxxxxxx, XX 00000
3 Xxxxxxxx Xxxxxx University of Kentucky 000 Xxxx Xxxxxx, Xxxxxxxxx, XX 00000
3 Xxxxxxxx Xxxxxx Cleveland Metrohealth Mch 0000 Xxxxxxxxxxx Xxxxx, Xxxxxxxxx, XX 00000
3 Xxxxxxxx Xxxxxx Xxxxxxxx Xxxxxx
3 Xxxxxxxx Xxxxxx Children's Hospital Medical Center 0000 Xxxxxx Xxxxxx, Xxxxxxxxxx, XX 00000
0 Xxxxxxxx Xxxxxx Xx. Xxxxxxxxx Medical Center 0000 Xxxxxxx Xxxxxx, 0xx XX, Xxxxxxxxxx, XX 00000
3 Xxxxxxxx Xxxxxx Lutheran Hospital 7950 ???? Blvd., Ft. Xxxxx, XX 00000
3 Xxxxxxxx Xxxxxx Xxxxxx Memorial Hospital 0000 XxxXxxxxx Xxx XX, X. Xxxxxxxxxx, XX 00000
3 Xxxxxxxx Xxxxxx Covance 0000 Xxxxxx Xx., Xxxxxxxxxxxx, XX 00000
4 Xxxxx Xxxxxxxx Xxxxxxx Xxxxxxxx Xxxxx Dorm VAMC 0000 Xxxxxxx Xxxxx Xxxx, Xxxxxxxx, XX 00000
4 Xxxxx Xxxxxxxx Lab South, Inc. 0000 0xx Xxx Xxxxx, Xxxxxxxxxx, XX 00000
4 Xxxxx Xxxxxxxx St. Xxxxxxx Hospital Xxx Xx. Xxxxxxx Xxxxx, Xxxxxxxxxx, XX 00000
4 Xxxxx Xxxxxxxx Erlanger Medical Center 000 X Xxxxx Xxxxxx, Xxxxxxxxxx, XX 00000
4 Xxxxx Xxxxxxxx Quest Diagnostics 000 00xx Xxx Xxxxx, Xxxxxxxxx, XX 00000
4 Xxxxx Xxxxxxxx Xxxxx Xxxxxxx Xxxxxx Xxxxxx XxXxxx Xxxx, Xxxx, XX 00000
4 Xxxxx Xxxxxxxx Xxxxx Xxxxxxxx
4 Xxxxx Xxxxxxxx ARL/Labrouth 000 X. Xxxxxxx Xxxxxx, Xxxxxxxxxx, XX 00000
4 Xxxxx Xxxxxxxx University of Alabama Hospital 000 00xx Xx Xxxxx, Xxxxxxxxxx, XX 00000
4 Xxxxx Xxxxxxxx Sarasota Memorial Hospital 0000 Xxxxx Xxxxxxxx Xxxxx, Xxxxxxxx, XX 00000
4 Xxxxx Xxxxxxxx ???? Hospital 000 Xxxxxxxx Xxx, Xxxxxxxxx, XX 00000
4 Xxxxx Xxxxxxxx to Xxxx Kota printer only inoperative/replaced by AAA0153981
Xxxxx Trowartha
4 Xxxxx Xxxxxxxx HCA W. FL Regional Medical Center 0000 X. Xxxxx Xxx., Xxxxxxxxx, XX 00000
5 Xxxx Xxxxxxx Children's Medical Center Dallas, TX
6 Xxxx Xxxxxxxxx Dakota Heartland Hospital 0000 X Xxxxxxxxxx, Xxxxx, XX 00000
6 Xxxx Xxxxxxxxx St Xxxxx Hospital 000 X Xxxxxxxxx Xx, Xxxxxxxxxxx, XX 00000
6 Xxxx Xxxxxxxxx The Pathology Center 0000 Xxxxx Xx, Xxxxx, XX 00000
6 Xxxx Xxxxxxxxx Xxxxxx Health Center 000 0xx Xxxxxx, Xxxxx Xxxx, XX
6 Xxxx Xxxxxxxxx Arkansas Children's Hospital 000 Xxxxxxxx Xxxxxx, Xxxxxx Xxxx, XX 00000
6 Xxxx Xxxxxxxxx McAlester Regional Hospital Xxx Xxxxx Xxxx Xxx, XxXxxxxxx, XX 00000
6 Xxxx Xxxxxxxxx Med Center One/Q&R Clinic 000 X. 0xx Xxxxxx, Xxxxxxx, XX 00000
0 Xxxx Xxxxxxxxx Xxxxxxx Xxxx Regional Hospital 0000 Xxxxxxxx Xx, Xxxxxxx Xxxx, XX 00000
6 Xxxx Xxxxxxxxx in-house
8 Xxxxx La Croix Childrens Hospital 0000 Xxxxxxxx'x Xxx, Xxx Xxxxx, XX 00000
8 Xxxxx La Croix San Bern Community Hospital 0000 Xxxxxxx Xxxxxx Xxxxx, Xxx Xxxx, XX 00000
0 Xxxxx Xx Xxxxx Xxx Xxxx Xxxxxx Medical Center 000 X Xxxxxxx, Xxx Xxxxxxxxxx, XX 00000
8 Xxxxx La Croix Physicians Automated Lab 0000 X Xxxxxx, Xxxxxxxxxxx, XX 00000
8 Xxxxx La Croix Bio Clinical Ref Lab 00000 Xxxxxxx Xxxx, Xxxxxxx, XX 00000
8 Xxxxx La Croix Cottage Hospital Pueblo Bath St., Santa Barbara, CA 93102
Date
Ter # Rep Customer Reader Printer Plate Shipped
2 Xxxxx Xxxxxxxx Xxxxx Xxxxxxxx 137073 134441 6/30/97
0 Xxxxxxxx Xxxxxx Xxxxxxxxxx xx Xxxxxxxxxx 000000 AAA0118810 130699 10/27/97
3 Xxxxxxxx Xxxxxx University of Kentucky 136754 130753 10/31/97
3 Xxxxxxxx Xxxxxx Cleveland Metrohealth Mch 136751 130756 10/23/97
0 Xxxxxxxx Xxxxxx Xxxxxxxx Xxxxxx 000000 AAA0124094 130787 11/13/97
3 Xxxxxxxx Xxxxxx Children's Hospital Medical Cente 136881 AAA0151961 131373 12/12/97
0 Xxxxxxxx Xxxxxx Xx. Xxxxxxxxx Xxxxxxx Xxxxxx 000000 AAA153871 131388 12/8/97
3 Xxxxxxxx Xxxxxx Lutheran Hospital 138880 AAA0159250 131363 6/15/98
3 Xxxxxxxx Xxxxxx Xxxxxx Memorial Hospital 137074 AAA0153965 131439 7/10/98
0 Xxxxxxxx Xxxxxx Xxxxxxx 000000 AAA0153858 131429 7/16/98
4 Xxxxx Xxxxxxxx Xxxxxxx Xxxxxxxx Xxxxx Dorm VAMC 136790 AAA0118792 130768 11/4/97
4 Xxxxx Xxxxxxxx Lab South, Inc.
4 Xxxxx Xxxxxxxx St. Xxxxxxx Hospital 136744 130752 10/6/97
4 Xxxxx Xxxxxxxx Erlenger Medical center 136745 130750 10/18/97
4 Xxxxx Xxxxxxxx Quest Diagnostics 136749 130751 10/16/97
4 Xxxxx Xxxxxxxx Xxxxx Medical Center 136751 130758 10/18/97
4 Xxxxx Xxxxxxxx Xxxxx Xxxxxxxx 136813 AAA0134445 130786 11/12/97
4 Xxxxx Xxxxxxxx ARL/Labrouth 136791 AAA0118794 130758 10/25/97
4 Xxxxx Xxxxxxxx University of Alabama Hospital 136884 AAA0133868 111376 12/4/97
4 Xxxxx Xxxxxxxx Sarasota Memorial Hospital 136748 130755 10/7/97
4 Xxxxx Xxxxxxxx Wueshalft Hospital 10/7/97
4 Xxxxx Xxxxxxxx to Xxxx Kota AAA0159220 6/25/98
Xxxxx Trowartha 136811 AAA0124306 130768 11/11/97
12/22/97
4 Xxxxx Xxxxxxxx HCA W. FL Regional Medical Center 136898 AAA0153981* 131374 6/9/98*
0 Xxxx Xxxxxxx Xxxxxxxx'x Xxxxxxx Xxxxxx 000000 AAA0159232 131432 7/30/98
6 Xxxx Xxxxxxxxx Dakota Heartland Hospital 136888 AAA0153985 131359 12/4/97
6 Xxxx Xxxxxxxxx St Xxxxx Hospital 14362 AH8810767 11/19/97
6 Xxxx Xxxxxxxxx The Pathology Center 136889 AAA0159242 131384 11/19/97
6 Xxxx Xxxxxxxxx Xxxxxx Health Center 12/8/97
6 Xxxx Xxxxxxxxx Arkansas Children's Hospital 136750 130757 10/22/97
6 Xxxx Xxxxxxxxx McAleister Regional Hospital 136894 AAA0153860 131367 11/16/97
6 Xxxx Xxxxxxxxx Med Center One/Q&R Clinic 137071 AAA0153980 131440 4/15/98
6 Xxxx Xxxxxxxxx Midwest City Regional Hospital 136579 AAA0159221 131371 5/12/98
6 Xxxx Xxxxxxxxx in-house 137065 131428 5/12/98
0 Xxxxx Xx Xxxxx Xxxxxxxxx Xxxxxxxx 000000 AAA0124097 131399 11/21/97
0 Xxxxx Xx Xxxxx Xxx Xxxx Xxxxxxxxx Xxxxxxxx 000000 AAA0118791 130762 10/29/97
0 Xxxxx Xx Xxxxx Xxx Xxxx Xxxxxx Medical Center 136752 AAA8006075 130760 10/29/97
8 Xxxxx La Croix Physicians Automated Lab 10/20/97
8 Xxxxx La Croix Bio Clinical Ref Lab 136746 130749 10/24/97
0 Xxxxx Xx Xxxxx Xxxxxxx Xxxxxxxx 000000 AAA0153957 131361 11/25/97
284
Date
Tsr # Rep Customer Address Reader Printer Plate Stripped
----- ------------------ ------------------------ ------------------------------ -------- ----------- ------- --------
0 Xxxxx Xx Xxxxx Xx. Mary's Hospital 0000 Xxxxxx Xxx., 136896 AAA0153867 131364 12/19/97
Xxxx Xxxxx, XX 00000
8 Xxxxx La Croix Samaritan Health Services 000 Xxxxx Xxxxxx Xx, 000000 XXX0000000 131366 0/0/00
Xxxx Xxxxxx Xxxx, XX
? Xxxxx La Croix Xxxxx La Croix demo 137079 AAA0159211 131424 6/25/98
9 Xxx ??? Pathology Associates X 00000 Xxxxxxx, 000000 ELX800??? 13168? 12/5/97
Xxxxxxx, XX 00000
9 Jan ??? Infectious Limited 0000 Xxxxx X Xxxxxx, Xxxxx 000, 136814 AAA0118786 130874 11/10/97
Laboratory Tacoma, WA
10 Xxxxx Xxxxxxxxx Xxxxx Xxxxxxxxx for demo 137061 AAA0153960 ?? ??
00 Xxxxx Xxxxxxxxx Xxxxxxx XX Alliance Lab 1803 ?? Rose Ave., York, PA 17403 137067 AAA0153959 131126 6/27/98
Xxxxxx Xxxxxxxxx For SmithKline Xxxxxxx sent to DZ 136876 AAA0152978 131370 12/11/97
13 Xxxxx Xxxxxxx Associated Pathology Labs ??? 136795 AAA0153968 130761 ??
Xxxx Xxxx Florida Hospital ??? 137060 AAA0159246 137438 ??
Xxxx Xxxx Omega Medical Labs ??? 136899 AAA0153974 131362 12/9/97
Xxxx Xxxx MedLabs 000 Xxxxxx Xxxx, ??? 136880 AAA0151952 131372 12/9/97
Xxxx Xxxx Allegheny Valley Hospital ??? 136882 AAA0153817 131375 12/9/97
Xxxx Xxxx ??? Medical Center 323 Jefford St., 137099 AAA0153814 131445 2/11/98
Xxxxxxxxxx, XX 00000
Xxxx Xxxx Mount Sinai Hospital ?? Street, 9th Floor, NY NY 10029 137099 AAA0159225 131446 1/7/98
285
EXHIBIT F
INTELLECTUAL PROPERTY SECURITY AGREEMENT
286
EXHIBIT 10.32
INTELLECTUAL PROPERTY SECURITY AGREEMENT
Among
Intracel Corporation,
Xxxxxxx, Inc.,
PerImmune Holdings, Inc. and
PerImmune, Inc.
and
the holders of the 12%
Guaranteed Senior Secured Primary Notes
due August 1, 2003 of
Intracel Corporation
and
the holders of the 12%
Guaranteed Senior Escrow Notes
due August 1, 2003 of
Intracel Corporation
Dated August 25, 1998
287
INTELLECTUAL PROPERTY SECURITY AGREEMENT
INTELLECTUAL PROPERTY SECURITY AGREEMENT dated August 25, 1998,
among Intracel Corporation, a Delaware corporation (together with its successors
and assigns, the "Company"), the Company's wholly-owned subsidiaries, Xxxxxxx,
Inc. ("Xxxxxxx"), PerImmune Holdings, Inc. ("Holdings") and PerImmune, Inc.
("PerImmune" and, together with Xxxxxxx and Holdings, the "Subsidiaries") and
the holders of the 12% Guaranteed Senior Secured Promissory Notes of the Company
(the "Guaranteed Senior Secured Primary Notes") and the holders of the 12%
Guaranteed Senior Secured Escrow Promissory Notes ("Guaranteed Senior Secured
Escrow Notes") of the Company (collectively, the "Notes") issued pursuant to
that certain Securities Purchase Agreement, dated as of the date hereof, by and
among the Company and the other parties thereto (the "Purchase Agreement"). As
used herein, all capitalized terms not otherwise defined herein shall have the
meanings set forth in the Purchase Agreement.
WITNESSETH:
WHEREAS, the Company is to issue 12% Guaranteed Senior Secured
Primary Promissory Notes in the aggregate original principal amount of
$35,000,000 and 12% Guaranteed Senior Secured Escrow Promissory Notes in the
aggregate original principal amount of $6,000,000;
WHEREAS, in order to secure the performance of the obligations of
the Company under the Purchase Agreement, the Notes and the Ancillary Agreements
(the "Obligations") and the guaranties relating to the Obligations executed on
the date hereof by each of the Subsidiaries, the parties hereto entered into a
Security Agreement as of the date hereof ("Security Agreement") regarding the
terms and conditions of the Company's and Subsidiaries' (together the "Company
Parties") grant of a security interest in the certain Collateral (as defined
therein), including the Intellectual Property Collateral (as defined below) to
the Holders;
WHEREAS, pursuant to and in connection with the Security
Agreement, and also in order to secure the performance of the Obligations and
the guaranties relating to the Obligations, the parties hereto are entering into
this Intellectual Property Security Agreement to confirm and supplement the
terms and conditions of the Company Parties' grant of security interest, as set
forth in the Security Agreement, in the Intellectual Property Collateral (as
defined below) to the Holders;
WHEREAS, unless otherwise defined in this Agreement or in the
Credit Agreement, terms defined in Article 8 or 9 of the Uniform Commercial Code
in effect in the State of New York ("N.Y. Uniform Commercial Code") are used in
this Agreement as such terms are defined in such Article 8 or 9.
288
NOW, THEREFORE, in consideration of the premises and other
benefits to the Company Parties, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto hereby agree as follows:
SECTION 1. Grant of Security. As collateral security for the
payment and performance in full of the Obligations in accordance with their
respective terms, the Company Parties hereby pledge, assign, transfer and grant
to the Holders as to all Intellectual Property Collateral (defined below), a
first priority perfected continuing security interest, except with respect to
certain Intellectual Property Collateral listed on Exhibit A-1 to the Security
Agreement in which Akzo Nobel Pharma International, B.V., as Collateral Agent
under the Intellectual Property Security Agreement dated August 13, 1996 (the
"Collateral Agent"), has a first priority security interest (the "Akzo Security
Interest Collateral"), and with respect to the Akzo Security Interest
Collateral, a second priority perfected security interest until such time as
payment in full of the Debt underlying the Akzo Security Interest Collateral has
been made and, at such time, a first priority perfected security interest in the
Akzo Security Interest Collateral, in all of such Company Party's right, title
and interest in and to the following, whether now owned or hereafter acquired by
such Company Party and whether now or hereafter existing (collectively, the
"Intellectual Property Collateral"):
(a) all patents, patent applications and patentable inventions,
including, without limitation, each patent and patent application
identified in Schedule I attached hereto and made a part hereof, and
including without limitation (i) all inventions and improvements
described and claimed therein, (ii) the right to xxx or otherwise
recover for any and all past, present and future infringements and
misappropriations thereof, (iii) all income, royalties, damages and
other payments now and hereafter due and/or payable with respect thereto
(including, without limitation, payments under all licenses entered into
in connection therewith, and damages and payments for past and future
infringements thereof), and (iv) all rights corresponding thereto
throughout the world and all reissues, divisions, continuations,
continuations-in-part, provisionals, substitutes, renewals, and
extensions thereof, all improvements thereon and all other rights of any
kind whatsoever of such Company Party accruing thereunder or pertaining
thereto (the "Patents");
(b) all trademarks, service marks, trade names, trade dress or
other indicia of trade origin, trademark and service xxxx registrations,
and applications for trademark or service xxxx registrations and any
renewals thereof, including, without limitation, each registration and
application identified in Schedule II attached hereto and made a part
hereof, and including without limitation (i) the right to xxx or
otherwise recover for any and all past, present and future infringements
and misappropriations thereof, (ii) all income, royalties, damages and
other payments now and hereafter due and/or payable with respect thereto
(including, without limitation, payments under all licenses entered into
in connection therewith, and damages and payments for past or future
infringements thereof), and (iii) all rights corresponding thereto
throughout the
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289
world and all other rights of any kind whatsoever of such Company Party
accruing thereunder or pertaining thereto, together in each case with
the goodwill of the business connected with the use of, and symbolized
by, each such trademark, service xxxx, trade name, trade dress or other
indicia of trade origin (the "Trademarks");
(c) all copyrights, whether statutory or common law, and whether
or not the underlying works of authorship have been published, and all
works of authorship and other intellectual property rights therein, all
copyrights of works based on, incorporated in, derived from or relating
to works covered by such copyrights, all right, title and interest to
make and exploit all derivative works based on or adopted from works
covered by such copyrights, and all copyright registrations and
copyright applications, and any renewals or extensions thereof,
including, without limitation, each copyright registration and copyright
application, if any, identified in Schedule III attached hereto and made
a part hereof, and including, without limitation, (i) the right to
print, publish and distribute any of the foregoing, (ii) the right to
xxx or otherwise recover for any and all past, present and future
infringements and misappropriations thereof, (iii) all income,
royalties, damages and other payments now and hereafter due and/or
payable with respect thereto (including, without limitation, payments
under all licenses entered into in connection therewith, and damages and
payments for past or future infringements thereof), and (iv) all rights
corresponding thereto throughout the world and all other rights of any
kind whatsoever of such Company Party accruing thereunder or pertaining
thereto (the "Copyrights");
(d) all license agreements with any other person in connection
with any of the Patents, Trademarks or Copyrights, or such other
person's patents, trade names, trademarks, service marks or copyrights,
whether such Company Party is a licensor or licensee under any such
license agreement, including, without limitation, the license agreements
listed on Schedule IV attached hereto and made a part hereof, subject,
in each case, to the terms of such license agreements, including,
without limitation, terms requiring consent to a grant of a security
interest, and any right to prepare for sale, sell and advertise for
sale, all Inventory (as defined in the Security Agreement) now or
hereafter owned by such Company Party and now or hereafter covered by
such licenses (the "Licenses"); and
(e) all proceeds of any and all of the foregoing Intellectual
Property Collateral (including, without limitation, proceeds that
constitute property of the types described in clauses (a) - (d) of this
Section 1) and, to the extent not otherwise included, all (i) payments
under insurance (whether or not the Holders are the loss payees
thereof), or any indemnity, warranty or guaranty, payable by reason of
loss or damage to or otherwise with respect to any of the foregoing
Intellectual Property Collateral, and (ii) cash.
Until the Obligations shall have been satisfied in full and this Agreement shall
have been terminated, the Company and its Subsidiaries (as defined in the
Purchase Agreement), shall
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290
not, without the Holders' prior written consent, which consent will not be
unreasonably withheld, create, incur or assume any pledge, sale, license or
assignment of any of the Intellectual Property Collateral, or grant, convey or
hypothecate any interest in the Intellectual Property Collateral, or take any
action the effect of which is to have created any Lien, encumbrance, claim,
charge, preference, priority or other restriction on the Intellectual Property
Collateral.
SECTION 2. Security Agreement. The security interest granted
hereby has been granted in conjunction with the security interest granted to the
Holders under the Security Agreement, which this Intellectual Property Security
Agreement supplements. Except as supplemented hereby, the Security Agreement
shall remain in full force and effect in accordance with its terms.
SECTION 3. Confirmation of Security Interest. The Company Parties
hereby confirm that pursuant to the Security Agreement, for good and valuable
consideration, the Company Parties have granted to the Holders a continuing
security interest in and to the Company Parties' entire right, title and
interest in all of the Collateral, including the Intellectual Property
Collateral, that the Company Parties' right, title and interest in the
Collateral is subject to such interest of the Holders and that such security
interest therein shall continue unimpaired by the security interest of the
Collateral granted hereby which serves as evidence of the continuing nature of
such interest in favor of the Holders.
SECTION 4. Representations and Warranties. Each Company Party
represents and warrants as to itself and its Intellectual Property Collateral as
follows:
(a) Such Company Party is the legal and beneficial owner of the
entire right, title and interest in and to the Intellectual Property
Collateral of such Company Party free and clear of any Lien, claim,
option or right of others, except for the liens and security interests
created by this Agreement and the lien created in favor of the
Collateral Agent. No effective financing statement or other instrument
similar in effect covering all or any part of such Intellectual Property
Collateral or listing such Company Party or any trade name of such
Company Party as debtor is on file in any recording office (including,
without limitation, the United States Patent and Trademark Office and
the United States Copyright Office), except such as may have been filed
in favor of the Holders relating to the Loan Documents and such as have
been filed in favor of the Collateral Agent.
(b) Set forth in Schedule I is a complete and accurate list of
all patents and all patent applications owned by the Company Parties.
Set forth in Schedule II is a complete and accurate list of all
trademark and service xxxx registrations and all trademark and service
xxxx applications owned by the Company Parties. Set forth in Schedule
III is a complete and accurate list of all copyright registrations and
copyright applications owned by the Company Parties. Set forth in
Schedule IV is a complete and accurate list of all Licenses owned by the
Company Parties in which a Company
-4-
291
Party is (i) a licensor with respect to any of the Patents, Trademarks
or Copyrights, or (ii) a licensee of any other person's patents, trade
names, trademarks, service marks or copyrights. Except as set forth in
Schedule II, all necessary filings and recordations have been made to
protect and maintain the patents, patent applications, trademark and
service xxxx registrations, trademark and service xxxx applications,
copyright registrations, copyright applications and Licenses set forth
in Schedules I, II, III and IV.
(c) Each patent, patent application, trademark or service xxxx
registration, trademark or service xxxx application, copyright
registration and copyright application of such Company Party set forth
in Schedules I, II and III is subsisting and has not been adjudged
invalid, unregistrable or unenforceable, in whole or in part. Each
License of such Company Party identified in Schedule IV is validly
subsisting and has not been adjudged invalid or unenforceable, in whole
or in part, and is valid and enforceable. Such Company Party is not
aware of any uses of any item of Intellectual Property Collateral which
could be expected to lead to such item becoming invalid or
unenforceable, including unauthorized uses by third parties and uses
which were not supported by the goodwill of the business connected with
such Intellectual Property Collateral.
(d) Such Company Party has not made a previous assignment,
transfer or agreement constituting a present or future assignment,
transfer or encumbrance of any of the Intellectual Property Collateral
other than the Intellectual Property Security Agreement dated August 13,
1996 with respect to the Akzo Security Interest Collateral. Such Company
Party has not granted any license (other than those listed on Schedule
IV hereto), release, covenant not to xxx, or non-assertion assurance to
any person with respect to any part of the Intellectual Property
Collateral.
(e) Such Company Party has used proper statutory notice in
connection with its use of each patent, each registered trademark and
service xxxx and each copyright contained in Schedules I, II and III.
(f) This Agreement creates in favor of the Holders a valid first
priority security interest in the Intellectual Property Collateral of
the Company Parties, except with respect to the Akzo Security Interest
Collateral and, with respect thereto, a second priority continuing
security interest until such time as payment in full of the Debt
underlying the Akzo Security Interest Collateral has been made and, at
such time, a first priority security interest in the Akzo Security
Interest Collateral, securing the payment of the Obligations, and all
filings and other actions necessary or desirable to perfect and protect
such security interest have been duly taken.
(g) With the exception of the consent of the Collateral Agent,
no consent of any other Person and no authorization, approval or other
action by, and no notice to or filing with, any governmental authority
or regulatory body or other Person is
-5-
292
required (i) for the assignment and grant by such Company Party of the
security interest assigned and granted hereby or for the execution,
delivery or performance of this Agreement by such Company Party, (ii)
for the perfection or maintenance of the security interest created
hereunder (including the first priority nature of such security
interest), except for the filing of financing and continuation
statements under the Uniform Commercial Code, which financing statements
have been duly filed, and the filing and recordal of this Agreement
with the United States Patent and Trademark Office and the United States
Copyright Office or (iii) for the exercise by the Holders of their
rights provided for in this Agreement or the remedies in respect of the
Intellectual Property Collateral pursuant to this Agreement.
(h) Except for the Licenses set forth in Schedule IV, the
Company Parties are not aware of any claims that are likely to be made
by any third party relating to any item of Intellectual Property
Collateral.
(i) Except as set forth in Schedule 3.13 of the Securities
Purchase Agreement, no claim has been made and is continuing or
threatened that any item of Intellectual Property Collateral is invalid
or unenforceable or that the use by such Company Party of any
Intellectual Property Collateral does or may violate the rights of any
Person. The Company Parties are not aware of any infringement of any
item of Intellectual Property Collateral.
(j) Such Company Party has taken all necessary steps to use
consistent standards of quality in the manufacture, distribution and
sale of all products sold and the provision of all services provided
under or in connection with any of the Trademarks and has taken all
reasonably necessary steps to ensure that all licensed users of any of
the Trademarks use such consistent standards of quality.
SECTION 5. Further Assurances. (a) Each Company Party agrees that
from time to time, at the expense of such Company Party, such Company Party will
promptly execute and deliver, and use its best efforts to cause to be executed
and delivered, all further instruments and documents, and take all further
action, that may be necessary or desirable, or that the Holders may request, in
order to perfect and protect any security interest assigned and granted or
purported to be assigned and granted hereby or to enable the Holders to exercise
and enforce its rights and remedies hereunder with respect to any part of the
Intellectual Property Collateral. Without limiting the generality of the
foregoing, each Company Party will execute and file such financing or
continuation statements, or amendments thereto, and such other instruments or
notices, as may be necessary or desirable, or as the Holders may request, in
order to perfect and preserve the security interest assigned and granted or
purported to be assigned and granted hereunder.
(b) Each Company Party hereby authorizes the Holders to file one
or more financing or continuation statements, and amendments thereto, relating
to all or any part of
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293
the Intellectual Property Collateral without the signature of such Company Party
where permitted by law. A photocopy or other reproduction of this Agreement or
any financing statement covering the Intellectual Property Collateral or any
part thereof shall be sufficient as a financing statement where permitted by
law.
(c) Each Company Party will furnish to the Holders from time to
time statements and schedules further identifying and describing the
Intellectual Property Collateral and such other reports in connection with the
Intellectual Property Collateral as the Holders may reasonably request, all in
reasonable detail.
(d) Each Company Party agrees that, should it obtain an ownership
interest in any patent, patent application, patentable invention, trademark,
service xxxx, trade name, trade dress, other indicia of trade origin, trademark
or service xxxx registration, trademark or service xxxx application, copyright,
work of authorship, copyright registration, copyright application or license,
which is not now a part of the Intellectual Property Collateral, (i) the
provisions of Section 1 shall automatically apply thereto, (ii) any such patent,
patent application, patentable invention, trademark, service xxxx, trade name,
trade dress, indicia of trade origin, trademark or service xxxx registration or
trademark or service xxxx application (together with the goodwill of the
business connected with the use of same and symbolized by same), copyright, work
of authorship, copyright registration, copyright application or license shall
automatically become part of the Intellectual Property Collateral, and (iii)
with respect to any ownership interest in any patent, patent application,
trademark or service xxxx registration, trademark or service xxxx application,
copyright registration, copyright application or license that such Company Party
should obtain, it shall give prompt written notice thereof to the Holders in
accordance with the provisions of the Security Agreement. Each Company Party
authorizes the Holders to modify this Agreement by amending Schedules I, II, III
and IV (and will cooperate with the Holders in effecting any such amendment) to
include any patent, patent application, trademark or service xxxx registration,
trademark or service xxxx application, copyright registration, copyright
application or license which becomes part of the Intellectual Property
Collateral under this Section.
(e) With respect to each patent, patent application, trademark or
service xxxx registration, trademark or service xxxx application, copyright
registration, copyright application and License, such Company Party agrees to
take all necessary steps, including, without limitation, in the United States
Patent and Trademark Office, the United States Copyright Office or in any court,
to (i) maintain each such patent, trademark or service xxxx registration,
copyright registration and License of such Company Party, and (ii) pursue each
such patent application, trademark or service xxxx application, and copyright
application now or hereafter included in the Intellectual Property Collateral of
such Company Party, including, without limitation, the filing of responses to
office actions issued by the United States Patent and Trademark Office and the
United States Copyright Office, the filing of applications for renewal or
extension, the filing of affidavits under Sections 8 and 15 of the United States
Trademark Act, the filing of divisional, continuation, continuation-in-part and
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294
substitute applications, the filing of applications for re-issue, renewal or
extensions, the payment of maintenance fees, and the participation in
interference, reexamination, opposition, cancellation, infringement and
misappropriation proceedings. Each Company Party agrees to take corresponding
steps with respect to each new or acquired patent, patent application, trademark
or service xxxx registration, trademark or service xxxx application, copyright
registration, copyright application or License to which it is now or later
becomes entitled. Any expenses incurred in connection with such activities shall
be borne by such Company Party. No Company Party shall, without the written
consent of the Holders, which consent will not be unreasonably withheld,
discontinue use of or otherwise abandon any patent or patentable invention,
trademark or service xxxx, or copyright identified in Schedules I, II and III,
or abandon any right to file an application for letters patent, trademark or
service xxxx registration, or copyright registration, or abandon any pending
application for a letters patent, trademark or service xxxx registration, or
copyright registration identified in Schedules I, II and III.
(f) Each Company Party agrees to notify the Holders promptly and
in writing if it learns (i) that any item of the Intellectual Property
Collateral may be determined to have become abandoned or dedicated or (ii) of
any adverse determination or the institution of any proceeding (including,
without limitation, the institution of any proceeding in the United States
Patent and Trademark Office or any court) regarding any item of the Intellectual
Property Collateral.
(g) In the event that any Company Party becomes aware that any
item of the Intellectual Property Collateral is infringed or misappropriated by
a third party, such Company Party shall promptly notify the Holders and shall
take such actions as such Company Party or the Holders deems reasonable and
appropriate under the circumstances to protect such Intellectual Property
Collateral, including, without limitation, suing for infringement or
misappropriation and for an injunction against such infringement or
misappropriation. Any expense incurred in connection with such activities shall
be borne by such Company Party.
(h) Each Company Party shall continue to use proper statutory
notice in connection with its use of each of its patents, registered trademarks
and service marks, and copyrights contained in Schedules I, II and III.
(i) Each Company Party shall take all steps which it or the
Holders deem reasonable and appropriate under the circumstances to preserve and
protect each item of its Intellectual Property Collateral, including, without
limitation, maintaining the quality of any and all products or services used or
provided in connection with any of the Trademarks, consistent with the quality
of the products and services as of the date hereof, and taking all steps
necessary to ensure that all licensed users of any of the Trademarks use such
consistent standards of quality.
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295
IN WITNESS WHEREOF, each Grantor has caused this Agreement to be
duly executed and delivered by its officer thereunto duly authorized as of the
date first above written.
INTRACEL CORPORATION
By: /s/ XXXXX X. XXXXXXXX
------------------------------------------
Name: Xxxxx X. XxXxxxxx
Title: President & Chief Executive Officer
XXXXXXX, INC.
By: /s/ XXXXX X. XXXXXXXX
------------------------------------------
Name: Xxxxx X. XxXxxxxx
Title: President & Chief Executive Officer
PERIMMUNE HOLDINGS, INC.
By: /s/ XXXXX X. XXXXXXXX
-----------------------------------------
Name: Xxxxx X. XxXxxxxx
Tide: President & Chief Executive Officer
PERIMMUNE, INC.
By: /s/ XXXXX X. XXXXXXXX
-----------------------------------------
Name: Xxxxx X. XxXxxxxx
Tide: President & Chief Executive officer
-9-
296
NORTHSTAR HIGH YIELD FUND
By: /s/ XXXXXXX X. XXXXXX
-------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Vice President
NORTHSTAR HIGH TOTAL RETURN FUND
By: /s/ XXXXXXX X. XXXXXX
-------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Vice President
NORTHSTAR HIGH TOTAL RETURN FUND II
By: /s/ XXXXXXX X. XXXXXX
-------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Vice President
NORTHSTAR STRATEGIC INCOME FUND
By: /s/ XXXXXXX X. XXXXXX
-------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Vice President
-10-
297
STATE OF WA )
) ss.:
COUNTY OF KING )
On the 20th day of August, 1998, before me personally came Xxxxx XxXxxxxx
to me known, who, being by me duly sworn, did depose and say he resides at 0000
0xx Xx. Xxxxx, Xxxxxxx, XX and that he is the Pres/CEO of INTRACEL CORPORATION,
the corporation described in and which executed the above instrument; that he
has been authorized to execute said instrument on behalf of said corporation;
and that he signed said instrument on behalf of said corporation pursuant to
said authority.
/s/ XXXXXXXXX X. XXXXXXX-XXXXXXX
--------------------------------
Notary Public
------------------------------------
Notary Public
State of Washington
[Notarial Seal] XXXXXXXXX X. XXXXXXX-XXXXXXX
My Appointment Expires Jan. 15, 2002
------------------------------------
STATE OF WA )
) ss.:
COUNTY OF KING )
On the 20th day of August, 1998, before me personally came Xxxxx XxXxxxxx
to me known, who, being by me duly sworn, did depose and say he resides at 0000
0xx Xx. Xxxxx, Xxxxxxx, XX and that he is the Pres/CEO of XXXXXXX, INC., the
corporation described in and which executed the above instrument; that he has
been authorized to execute said instrument on behalf of said corporation; and
that he signed said instrument on behalf of said corporation pursuant to said
authority.
/s/ XXXXXXXXX X. XXXXXXX-XXXXXXX
--------------------------------
Notary Public
------------------------------------
Notary Public
State of Washington
[Notarial Seal] XXXXXXXXX X. XXXXXXX-XXXXXXX
My Appointment Expires Jan. 15, 2002
------------------------------------
298
STATE OF WA )
) ss.:
COUNTY OF KING )
On the 20th day of August, 1998, before me personally came Xxxxx XxXxxxxx
to me known, who, being by me duly sworn, did depose and say he resides at 0000
0xx Xx. Xxxxx, Xxxxxxx, XX and that he is the Pres/CEO of PERIMMUNE HOLDINGS,
INC., the corporation described in and which executed the above instrument; that
he has been authorized to execute said instrument on behalf of said corporation;
and that he signed said instrument on behalf of said corporation pursuant to
said authority.
/s/ XXXXXXXXX X. XXXXXXX-XXXXXXX
--------------------------------
Notary Public
------------------------------------
Notary Public
State of Washington
[Notarial Seal] XXXXXXXXX X. XXXXXXX-XXXXXXX
My Appointment Expires Jan. 15, 2002
------------------------------------
STATE OF WA )
) ss.:
COUNTY OF KING )
On the 20th day of August, 1998, before me personally came Xxxxx XxXxxxxx
to me known, who, being by me duly sworn, did depose and say he resides at 0000
0xx Xx. Xxxxx, Xxxxxxx, XX and that he is the Pres/CEO of PERIMMUNE, INC., the
corporation described in and which executed the above instrument; that he has
been authorized to execute said instrument on behalf of said corporation; and
that he signed said instrument on behalf of said corporation pursuant to said
authority.
/s/ XXXXXXXXX X. XXXXXXX-XXXXXXX
--------------------------------
Notary Public
------------------------------------
Notary Public
State of Washington
[Notarial Seal] XXXXXXXXX X. XXXXXXX-XXXXXXX
My Appointment Expires Jan. 15, 2002
------------------------------------
000
XXXXX XX XXX XXXX )
) ss.:
COUNTY OF NEW YORK )
On the 25th day of August, 1998, before me personally came Xxxxxxx Xxxxxx
to me known, who, being by me duly sworn, did depose and say he resides at
Fairfield County, CT and that he is the Vice President of NORTHSTAR HIGH YIELD
FUND, the institution described in and which executed the above instrument; that
he has been authorized to execute said instrument on behalf of said institution;
and that he signed said instrument on behalf of said institution pursuant to
said authority.
/s/ XXXX XXXXXXX XXXXX
----------------------
Notary Public
XXXX XXXXXXX XXXXX
[Notarial Seal] NOTARY PUBLIC
MY COMMISSION EXPIRES FEB. 23, 0000
XXXXX XX XXX XXXX )
) ss.:
COUNTY OF NEW YORK )
On the 25th day of August, 1998, before me personally came Xxxxxxx Xxxxxx
to me known, who, being by me duly sworn, did depose and say he resides at
Fairfield County, CT and that he is the Vice President of NORTHSTAR HIGH TOTAL
RETURN FUND, the institution described in and which executed the above
instrument; that he has been authorized to execute said instrument on behalf of
said institution; and that he signed said instrument on behalf of said
institution pursuant to said authority.
/s/ XXXX XXXXXXX XXXXX
----------------------
Notary Public
XXXX XXXXXXX XXXXX
[Notarial Seal] NOTARY PUBLIC
MY COMMISSION EXPIRES FEB. 23, 0000
000
XXXXX XX XXX XXXX )
) ss.:
COUNTY OF NEW YORK )
On the 25th day of August, 1998, before me personally came Xxxxxxx Xxxxxx
to me known, who, being by me duly sworn, did depose and say he resides at
Fairfield County, CT and that he is the Vice President of NORTHSTAR HIGH TOTAL
REFUND FUND II, the institution described in and which executed the above
instrument; that he has been authorized to execute said instrument on behalf of
said institution; and that he signed said instrument on behalf of said
institution pursuant to said authority.
/s/ XXXX XXXXXXX XXXXX
----------------------
Notary Public
XXXX XXXXXXX XXXXX
[Notarial Seal] NOTARY PUBLIC
MY COMMISSION EXPIRES FEB. 23, 0000
XXXXX XX XXX XXXX )
) ss.:
COUNTY OF NEW YORK )
On the 25th day of August, 1998, before me personally came Xxxxxxx Xxxxxx
to me known, who, being by me duly sworn, did depose and say he resides at
Fairfield County, CT and that he is the Vice President of NORTHSTAR STRATEGIC
INCOME FUND, the institution described in and which executed the above
instrument; that he has been authorized to execute said instrument on behalf of
said institution; and that he signed said instrument on behalf of said
institution pursuant to said authority.
/s/ XXXX XXXXXXX XXXXX
----------------------
Notary Public
XXXX XXXXXXX XXXXX
[Notarial Seal] NOTARY PUBLIC
MY COMMISSION EXPIRES FEB. 23, 2003
301
SCHEDULE I
to
Intellectual Property Security Agreement
Patents and Patent Applications
302
SCHEDULE I
Title Country Patient # Allowed App # Filed App #
Monoclonal Antibodies
Tumor specific monoclonal antibodies US 4,828,991
Tumor associated monoclonal antibodies derived from US 4,997,762
human B-cell line 5,180,814
AT E71410
AU 589,351
635,511
BE 0151030
CA 473130
CH 0151030
DE P3585093
DK 408/85
EP 0151030
ES 539,987
FR 0151030
GB 0151030
GR 850,179
HU 209,519
IE 58,859
IL 74,156
91,045
IT 0151030
JP 2021518 269230/93
LU 0151030
NL 0151030
NZ 210,867
PT 79,894
SC 0131030
ZA 8,500,689
303
Title Country Patient # Allowed App # Filed App #
Tumor specific monoclonal antibodies US 5,106,738
Tumor associated monoclonal antibody 81AV78 US 5,348,880
XX 000000
XX 0000000
EP 92913154.8
FI 935038
XX 000000/00
XX 93/703412
WO US92/04023
Tumor associated monoclonal antibodies US 5,474,755
Monoclonal Antibody 88BV59 US 08/341469
AU 651,261
CA 2083542
EP 92203827.8
FI 925638
HU 9203932
ID P-005142
IL 103758
XX 000000/00
XX 92/23925
NO 924803
NZ 245443
TW 81109353
ZA ?2/8880
Monoclonal antibody 88BV59, subclones and method of making US 08/192069
AU 17425/95
CA 2158572
EP 95909472.3
FI 954700
JP 52078/95
304
Title Country Patient # Allowed App # Filed App #
KR 95/7Q4282
WO US95/01440
Tumor associated monoclonal antibody 123AV16 US 5,495,002
ID P-950285
WO EP95/00581
ZA 95/1113
In-vitro method for producing antigen specific human US 5,229,275
monoclonal antibodies
AT E123,311
AU 657,112
BE 0,454,225
CA 2,041,213
CH 0,454,225
DE 69,110,084.5
555
DK 0,454,225
EP 0,454,225
ES 0,454,225
FI 912,016
FR 0,454,225
GB 0,454,225
GR 3,017,162
IE 66,523
IT 0,454,225
XX 000000/00
XX 91/6661
NL 0,454,225
SE 0,454,225
ZA 91/2?98
Imaging infectious ????????????? US 5,549,882
305
Title Country Patent # Allowed App # Filed App #
Chelators
Method for purifying chelator conjugated
compounds US 5,244,816
AU 656,717
CA 2,069,303
DK 0488/92
EP 90915696.0
FI 921579
IE 3585/90
XX 000000/00
XX 92/700833
NZ 235,618
PT 95574
WO US90/05772
ZA 90/8095
Chelating agents for attaching metal ions
to proteins US 5,292,868
5,488,126
5,583,219
AT E128035
AU 638,757
BE 0429644
CA 2,033,086
CH 0429644
DE 69022542.3
DK 0429644
EP 0429644 952004?5.0
ES 0429644
FI 910.329
FR 0429644
GB 0429644
IE 1867/90
306
Title Country Patent # Allowed App # Filed App #
IT 0429644
XX 000000/00
XX 91/700100
NL 0429644
SE 0429644
WO US90/02910
ZA 90/4047
Technetium-99M labelling
of proteins US 5,317,091
AU 658,403
CA 2104943
EP 92907824.4
FI 933760
XX 000000/00
XX 93/702561
WO US92/01577
Chelator IDAC-2 and methods
for purifying chelator
conjugated compounds US 08/278721
08/442856
WO US95/09285
New Polyaminocarboxylate
chelators US 08/178875
WO US95/00068
Pre-Targeting
Site specific in vivo
activation of therapeutic
drugs US 5,433,955 07/300999
AT E123414
AU 648,015
BE 0454783
CA 2025599
CH 0454783
DE 69019959.7
DK 0454753
307
Title Country Patent # Allowed App # Filed App #
EP 0454783
ES 0454783
FI 913,511
FR 0454783
GB 0454783
IT 0454783
XX 000000/00
XX 90/702129
LU 0454783
NL 0454783
NO 912,864
SE 0454783
WO 90/00503
In Vivo Binding Pair Pretargeting US 5,578,289 08/452938
08/451267
AU 663,582
CA 2,107,558
EP 93906276 6
FI 934,857
ID P-005991
XX 000000/00
XX 93/703311
WO US93/01858
ZA 93/3035
High yield preparation of dimene to
decamene chitin oligomers XX XX/000000
XX 000000
WO US96/02705
308
Title Country Patent # Allowed App # Filed App #
Polymer affinity systems in the delivery US 5,686,071
of cytotoxic materials and other compounds
in the site of disease Immunotherapy
Active specific immunotherapy US 5,484,596 08/540298
CTAA 28A32, the antigen recognized by
MCA 28A32 US 5,521,285
AT 0537168
AU 660,927
BE 0537168
CA 2079601
XX 0000000
XX 0000000
DK 0537168
EP 0537168
ES 0537168
FI 000000
XX 0537168
GB 0537168
GR 0537168
IT 0537168
XX 000000/00
XX 92/702530
LU 0537168
NL 0537168
309
Title Country Patient # Allowed App # Filed App #
SE 0537168
WO US91/02459
Antigen recognized by MCA 16.88 US 5,338,832
AT E137674
AU 618,209
BE 0328578
CA 571,017
CH 0328578
DE P3855290.9
DK 1025/89
EP 0328578
FR 0328578
GB 0328578
HU 4187/88
IE 2034/88
IL 86,958
IT 0328578
JP 505583/89
LU 0328578
NL 0328578
NZ 225,280
SE 0328578
WO US88/02245
ZA 88/4777
Keyhole limpet hemocyanin composition with enhanced US 5,407,912 08345808
immunogenic activity
US 09/009,121
AU 60519/94
CA 2121298
EP 94200997.8
310
Title Country Patent # Allowed App # Filed App #
FI 941725
ID P-940578
XX 000000/00
XX 94/8063
ZA 94/2510
Tumor associated epitope US 08/478591
CTAA 8IAV78, the antigen recognized
by human monoclonal US 5,595,738
antibody 81AV78
AU 20085/92
CA 2102422
EP 92912470.9
FI 934,963
XX 000000/00
XX 93/703413
Others WO US92/04108
Loukoregulin, an antitumor
lymphokine and its therapeutic uses US 4,849,506
5,082,657
AT E48617
AU 592,529
641,386
BE 0179127
CA 478,937
CH 0179127
DE P3574710.2
DK 170.781
170.423
E 0179127
FI 85,867
FR 0179127
GB 0179127
311
Title Country Patent # Allowed App # Filed App #
IT 0179127
JP 501862/85
300400/93
LU 0179127
NL 0179127
NQ 170423
SE 0179127
WO US85/00626
Urethral catheter and catherization process US 5,120,316
Immunoreactive peptides of apo(2) US 08/266407
5,597,908 08/457449
08/172461
08/892544
AU 81,606/94
CA 2138605
EP 942036534
FI 945976
ID P-942209
XX 000000/00
XX 94/35809
ZA 94/10145
An alignment system to overlay abdominal
computer aided tomography and magnetic US 5,299,253
resonance anatomy with single photon
emulsion tomography
312
Application Patent
Title Country No. No.
---------------------------------------------------------------------------------------------------
Methods, Reagents and Test Kits for Determinations US 5256532
of Subpopulations of Biological Entities
Methods for Detection and Quantification of Cell US 5385822
Subsets within Subpopulations of a Mixed Cell
Population
Methods, Reagents and Test Kits for Xxxxxxxxxxxxxx XX 0000000
of Subpopulations of Biological Entities
Methods, Reagents and Test Kits for Determinations EP 909088684
of Subpopulations of Biological Entities
Methods for Detection and Quantification of Xxxx XX 0000000
Subsets within Subpopulations of a Mixed Cell
Population
Methods for Detection and Quantification of Cell EP 9290033564
Subsets within Subpopulations of a Mixed Cell
Population
Methods for Detection and Quantification of Cell JP 0501274
Subsets within Subpopulations of a Mixed Cell
Population
Immunoassay for Determination of Cells US 5374531
Immunoassay for Determination of Cells US 08/569100
Immunoassay for Xxxxxxxxxxxxx xx Xxxxx XX 00000/00
Xxxxxxxxxxx for Determination of Xxxxx XX 0000000
Immunoassay for Determination of Cells EP 949109797
Immunoassay for Determination of Cells JP 06521300
Immunoassay for Xxxxxxxxxxxxx xx Xxxxx XX 000000
Intracellular Immunization US 08/099870
Detection Reagent, Article and Immunoassay US 08/177,732
Method
Detection Reagent, Article and Immunoassay BR PI95064455
Method 9
313
Application Patent
Title Country No. No.
-----------------------------------------------------------------------------------------
Detection Reagent, Article and Xxxxxxxxxxx XX 0000000
Method
Detection Reagent, Article and Immunoassay CN 951914774
Method
Detection Reagent, Article and Immunoassay EP 959061565
Method
Radial Flow Assay, Deliverying Member, US 08/177733
Test Kit and Methods
Radial Flow Assay, Deliverying Member, BR PI95064540
Test Kit and Methods
Radial Flow Assay, Deliverying Member, CA 2180429
Test Kit and Methods
Radial Flow Assay, Deliverying Member, CN 95191473
Test Kit and Methods
Radial Flow Assay, Deliverying Member, EP 959067588
Test Kit and Methods
Neutralizing Antibodies to Respiratory US 09/043522
Syncytial Virus
Neutralizing Antibodies to Respiratory US 09/043522
Syncytial Virus
Neutralizing Antibodies to Respiratory CA 2230127
Syncytial Virus
Neutralizing Antibodies to Respiratory EP 969316330
Syncytial Virus
Neutralizing Antibodies to Respiratory CA 2230116
Syncytial Virus
Neutralizing Antibodies to Respiratory EP 969338102
Syncytial Virus
314
SCHEDULE II
to
Intellectual Property Security Agreement
Trademark Registrations and Applications
315
SCHEDULE II
AccuDx
HumaSPECT(TM)* - Ser. No. 75/170,170, Filed 9/23/96
OncoSPECT(TM)**
Oncovax(TM)*** - Ser. No. 75/084,485, Filed 4/5/96
Onconostika(TM)*
Oncoscan(TM)*
Oncoselect(TM)*
Oncotice(TM)*
Oncostat(TM)*
Apo-Tek Lp(a)***
Apo-Tek Apo E***
KLH Immune Activator***
Zymmune***
* In October 1997, PerImmune, Inc. changed the trademark name of
"OncoSPECT(TM)/CR" to "HumaSPECT(TM)"
** Registration has been applied for.
*** Final name and registration to be completed.
* Assignment to be completed.
316
Item A. TRADMARKS
INTRACEL
Registration
County No. Date Filed Status
--------------- ------------ ---------- -----------------------------------
Australia 608813 08/09/93 Pending
Benelux 537216 08/11/93 Registered
817640487 08/01/93 Pending; reg'n fee paid 6/19/95
Brazil
Canada 734,661 08/09/93 Pending; response to OA due 12/7/95
China 93073886 08/26/93 Pending; published in OG 11/21/94
France 93479055 08/03/93 Registered
Germany Z 11488/10 Wz 08/11/93 Pending; published in OG 10/31/91
Greece 116498/93 09/29/93 Pending
Israel 88567 08/12/93 Pending
Italy RM93C/002727 08/18/93 Pending
Japan 82,893/1993 08/10/93 Pending
Mexico 175,387 08/13/93 Registered 4/28/94; Reg. No. 458,743
South Korea 93-28412 08/11/93 Registered 11/2/94; Reg. No. 000000
Xxxxx 1,779,240 09/09/93 Pending
Switzerland 2857/1994.7 04/27/94 Pending
Taiwan 82039743 08/13/93 Registered 8/16/94; Reg. No. 000000
Xxxxxxxx 253401 10/08/93 Pending; published in OG 4/21/95
United Kingdom 1,544,180 08/09/93 Registered 12/16/94; Reg. No. 1,544,180
United States
TRADEMARK LICENSES
Item B.
None.
317
Item A. Trademarks
1. BIOVITRO
Country Registration No. Date Filed Status
---------------- ------------------ ------------ --------
United States 1,930,690
2. FLEX-TRANS
Country Registration No. Date Filed Status
---------------- ------------------ ------------ --------
United States App 74/429821 Pending
2,049,370
Item B. Trademark Licenses
None.
318
SCHEDULE III
to
Intellectual Property Security Agreement
Copyright Registrations and Applications
319
SCHEDULE III
None
320
SCHEDULE IV
to
Intellectual Property Security Agreement
Licenses
321
SCHEDULE IV
1. Research Collaboration and Distribution Agreement, dated December 22, 1997,
by and between PerImmune, Inc. and Mentor Corporation, pursuant to which
Mentor will fund the costs of implementing and carrying out a clinical
testing program and submitting an application to the United States Food and
Drug Administration for the Company's keyhole limpet hemocyanin composition
product (as described therein) and act as the exclusive distributor of such
product.
2. Letter of Agreement, dated September 12, 1997, by and between Bio-Tek
Instruments, Inc. and Xxxxxxx, Inc., pursuant to which Bio-Tek will act as a
distributor of certain Company products (as defined therein).
3. Distribution Agreement, dated August 1, 1997, by and between Organon
Teknika, B.V. and PerImmune, Inc., pursuant to which Organon will grant
PerImmune an exclusive right to promote, distribute and sell the Products
(as defined therein) within the Territory (as defined therein).
4. Exclusive Distribution Agreement, dated June 16, 1997, by and between
PerImmune, Inc. and Mentor Corporation, pursuant to which Mentor will act as
the exclusive distributor of the Company's bladder diagnostic product.
5. Exclusive Distribution Agreement, dated as of April 1, 1997, by and between
Syncor International Corporation and PerImmune, Inc., pursuant to which
Syncor will act as the exclusive distributor of the Company's HumaSPECT/CR.
6. Distribution Agreement, dated as of March 14, 1997, by and between Intracel
Corporation and Seradyn, Inc., pursuant to which Seradyn will act as
distributor of the Company's Zymmune CD4/CD8 test kit within the United
States.
7. Agreement, dated April 1, 1997, by and between Zeus Scientific, Inc. and
Intracel Corporation, pursuant to which Zeus Scientific grants Intracel a
nonexclusive worldwide right to distribute the ELISA products (as defined
therein).
8. Exclusive Distributor Agreement, dated as of February 1, 1997, by and
between Xxxxxxx, Inc. and HIT Medikal Tibbi Urunler Sanayii ve Ticaret A.S.,
pursuant to which HIT will act as the exclusive distributor of the Company's
INSTI HIV I/I1 components in Turkey and North Cyprus.
9. Exclusive Distributor Agreement, dated as of July 25, 1996, by and between
Xxxxxxx, Inc. and Xxxx-Xxxx, X.X., pursuant to which Finn-Vita will act as
the exclusive distributor of the Company's INSTI HIV I/II components in
Chile.
10. Exclusive Distributor Agreement, dated as of July 1, 1996, by and between
Xxxxxxx, Inc. and DSL Diagnostic Products Incorporated COB "Intermedico,"
pursuant to which DSL will act as the exclusive distributor of various
Company products (as defined therein) in Canada.
322
11. Exclusive Distributor Agreement, dated as of May 8, 1996, by and between
Xxxxxxx, Inc. and AMAR Immunodiagnostics, pursuant to which AMAR will act
as the exclusive distributor of the Company's INSTI HIV I/II components in
India.
12. Distributorship Agreement, dated September 20, 1991, between Xxxxxxx
Diagnostics, division of Xxxxxx Diagnostic Inc. and Biotrin International
Ltd., pursuant to which Biotrin will act as a non-exclusive distributor of
various Company products (as defined therein) within the territory of
Europe.
13. Material Transfer Agreement for Hepatitis C Virus Recombinant
RNA-Dependent RNA Polymerase, dated March 10, 1998, by and between Emory
University and Intracel Corporation.
14. Product Development and License Agreement, dated as of June 30, 1997, by
and between PerImmune and Sigma Diagnostics, Inc., pursuant to which Sigma
is licensing a cell line to be used in a marketable product.
15. Development Agreement and License Agreement, dated December 4, 1996, by
and between Intracel Corporation and its affiliates and subsidiaries and
Alexon Biomedical, Inc., pursuant to which Alexon and Intracel will
develop certain technology relating to a rapid, member-based enzyme-linked
immunoabsorbent assay for the detection of C. difficile Toxin A.
16. Patent License Agreement -- Exclusive, dated December 4, 1996, between
Public Health Service and Intracel Corporation, pursuant to which Public
Health Service grants Intracel an exclusive license under the Licensed
Patent Rights (as defined therein) in the Licensed Territory (as defined
therein).
17. Intellectual Property Security Agreement, dated as of August 8, 1996, by
and among PerImmune Holdings, Inc., PerImmune, Inc., Akzo Nobel Pharma
International, B.V. and Organon Teknika Corporation.
18. Intellectual Property Agreement, dated August 2, 1996, by and between Akzo
Nobel Pharma International, B.V. and PerImmune Holdings, Inc.
19. CMV Antigenemia Agreement, dated May 9, 1996, by and between Xxxxxxx, Inc.
and Argene SA, Biosoft Department, pursuant to which Xxxxxx grants Xxxxxxx
exclusive distribution rights to the Assay Kit or Components (as defined
therein) in the United States and a non-exclusive distribution right to
the Assay Kit or Components (as defined therein) in Asia, Australia, South
Africa, Antilles, South America and Central America.
20. Research Collaboration and License Agreement, dated as of January 1, 1996,
by and between PerImmune, Inc. and Xxxxxx Healthcare Corporation, pursuant
to which PerImmune will perform research and development services for the
benefit of Baxter in accordance with the Research Plans (as defined
therein).
323
21. Pursuant to an Agreement dated July 14, 1995, the Company has agreed to
make certain Vpr peptides from HIV-1 available to the University of
Minnesota in return for the option to obtain a royalty-bearing exclusive
license to any patent or patent application which the University of
Minnesota or its scientists may be granted in respect of an invention
arising out of the use of the Vpr peptides.
22. License Agreement, dated July 25, 1994, by and between Arch Development
Corporation and Organon Teknika Corporation, pursuant to which Arch grants
Organon an exclusive license to make, have made, use and sell Licensed
Products (as defined therein) within the Territory (as defined therein).
23. Agreement, dated July 18, 1994, between Intracel Corporation and the World
Health Organization, pursuant to which Intracel will engage in the
development of an INSTI diagnostic test for detection of the measles
virus.
24. License Agreement, dated June 1, 1994, by and between Xxxxxx Xxxxxxxxx
University and Intracel Corporation, pursuant to which Xxxxxx Xxxxxxxxx
grants Intracel an exclusive worldwide license to manufacture, market and
distribute the Products (as defined therein).
25. Assignment, dated September 28, 1993, by and between Xxxxxxxxx Xxxxxxxx
and Intracel Corporation, pursuant to which Xxxxxxxxx Xxxxxxxx will sell,
assign, transfer and deliver to Intracel all of his right, title and
interest in the Future Intellectual Rights (as defined therein) and all
proceeds of, and rights associated with the Future Intellectual Rights.
26. Research Agreement, dated April 9, 1993, as amended, between Intracel
Corporation and Xxxxxx Xxxxxxxxx University, pursuant to which Xxxxxx
Xxxxxxxxx will pursue a research project in accordance with the Protocol
(as defined therein).
27. Licensing Agreement, dated as of April 16, 1991, between American
Bio-Technologies, Inc. ("ABT") and the Medical Reseach Council, pursuant
to which the Medical Research Council grants ABT a nonexclusive worldwide
right and license to make, have made, lease and sell the Licensed Products
(as defined therein).
28. License Agreement, dated June 14, 1990, by and between ABT and Hoffman-La
Roche, Inc., pursuant to which Hoffman-La Roche grants ABT a nonexclusive
license in the United States to make and sell for research purposes only
the Licensed Products (as defined therein).
29. Licensing Agreement, dated May 18, 1990, as amended, by and between Baxter
Healthcare Corporation, Bartels Diagnostic Division, and Virginia Tech
Intellectual Properties, Inc., pursuant to which Virginia Tech grants
Bartels a nonexclusive license to manufacture, have made for it, use,
lease, and/or sell Licensed Product(s) (as defined therein).
324
EXHIBIT G
PLEDGE AGREEMENT
325
EXHIBIT 10.33
================================================================================
PLEDGE AGREEMENT
Intracel Corporation and PerImmune Holdings, Inc.
as Pledgors
to
Holders of the 12% Guaranteed
Senior Secured Primary Promissory Notes
due August 25, 2003 of
Intracel Corporation
and
Holders of the 12%
Guaranteed Senior Secured
Escrow Promissory Notes
due August 25, 2003 of
Intracel Corporation
-----------
Dated as of August 25, 1998
-----------
================================================================================
326
PLEDGE AGREEMENT
PLEDGE AGREEMENT (the "Pledge Agreement"), dated August 25, 1998,
between Intracel Corporation and PerImmune Holdings, Inc., a wholly-owned
subsidiary of Intracel Corporation (together with their successors and assigns,
the "Pledgors") and Northstar High Total Return Fund, Northstar High Total
Return Fund II, Northstar High Yield Fund, and Northstar Strategic Income Fund
(collectively, the "Holders"), the holders of 12% Guaranteed Senior Secured
Primary Promissory Notes of the Company and the holders of 12% Guaranteed Senior
Secured Escrow Promissory Notes of the Company (collectively, the "Notes")
issued pursuant to that certain Securities Purchase Agreement, dated as of the
date hereof, by and among the Company and the other parties thereto (the
"Purchase Agreement"). As used herein, all capitalized terms not otherwise
defined herein shall have the meanings set forth in the Purchase Agreement.
W I T N E S S E T H:
WHEREAS, the Pledgors have entered into the Securities Purchase
Agreement, the Notes and the Ancillary Agreements as of the date hereof,
pursuant to which the Pledgors are subject to the Obligations (as defined
herein);
WHEREAS, in order to secure the performance of such Obligations of
the Company and its Subsidiaries under the Securities Purchase Agreement, the
Notes and the Ancillary Agreements (the "Obligations"), the parties hereto
desire to set forth their mutual understanding and certain agreement regarding
the terms and conditions of the pledge of the Pledged Collateral (as defined
below) made by the Pledgors to the Holders of the Notes (the "Holders").
NOW, THEREFORE, in consideration of the premises and other benefits
to the Pledgors, the receipt and sufficiency of which are hereby acknowledged,
the parties hereto hereby agree as follows:
Section 1. Pledge. As collateral security for the payment and
performance in full of the Obligations, the Pledgors hereby pledge, assign,
transfer and set over unto the Holders and hereby grant upon the Holders and
unto their respective successors and assigns, a continuing security interest
(the "Security Interests") in all of the right, title and interest of the
Pledgors in, to and under any and all of the following described property,
rights and interests (collectively, the "Pledged Collateral"):
(a) all issued and outstanding shares of Capital Stock now
or hereafter owned by the Pledgors of (i) the companies identified on Schedule A
(the "Identified Companies"), including, without limitation, the shares of
Capital Stock set forth on Schedule A, and (ii) any New Subsidiary of the
Pledgors or any other company (the "Additional Companies");
327
(b) all securities of the Identified Companies and the
Additional Companies now or hereafter owned or acquired by the Pledgors; any
present or future options, warrants or other rights to subscribe for or purchase
any shares of Capital Stock of any of the Identified Companies or the Additional
Companies now or hereafter owned by the Pledgors; and any notes bonds,
debentures or other evidences of Debt now or hereafter owned by the Pledgors
that (i) are at any time convertible into Capital Stock of any of the Identified
Companies or the Additional Companies, or (ii) have or at any time could by
their terms have voting rights with respect to any matter affecting any of the
Identifying Companies or the Additional Companies; and all securities,
certificates and instruments representing or evidencing ownership or any of the
property described in subsections 1(a) and (b) hereof (the property described in
subsections 1(a) and (b) being referred to herein collectively as the "Pledged
Securities");
(c) all proceeds and products of the Pledged Securities,
including, without limitation, dividends and distributions payable in cash,
Assets or securities, now or hereafter at any time or from time to time received
or receivable or otherwise distributed or distributable in respect of or in
exchange for any or all of the Pledged Securities; and
(d) any additional property of the kind or type described
in this Section 1 required to be supplied under the terms of this Pledge
Agreement;
TO HAVE AND TO HOLD the Pledged Collateral, together with all rights,
titles, interests, powers, privileges and preferences pertaining or incidental
thereto, unto the Holders and unto their respective successors and assigns;
subject, however, to the terms, covenants and conditions hereinafter set forth.
Section 2. Representations, Warranties and Covenants of Pledgors. The
Pledgors hereby represent and warrant, covenant and agree that:
(a) As of the date hereof, and except for the Security
Interests granted hereunder to the Holders, the Pledgors are the legal and
equitable owners of the Pledged Collateral, hold the Pledged Collateral free and
clear of all Liens, charges, claims, encumbrances and Security Interests of
every kind and nature. Until the Obligations under this Agreement, the
Securities Purchase Agreement, the Notes and any Ancillary Agreement shall have
been satisfied in full and this Agreement shall have been terminated, the
Pledgors will not, without the prior written consent of the Required Holders,
make any other pledge, assignment, sale, mortgage, hypothecation or transfer of,
or create, or permit to exist any Lien, Security Interest or other charge or
encumbrance on, the Pledged Collateral.
(b) The Pledgors have the valid right and legal authority
to pledge or cause to be pledged the Pledged Collateral in the manner hereby
done or contemplated and will defend its title thereto against the claims of all
persons whomsoever and shall maintain and preserve the Security Interests
granted hereunder with respect to the Pledged Collateral as long as this Pledge
Agreement shall remain in full force and effect.
(c) Neither the execution and delivery of this Pledge
Agreement by Pledgors, nor the consummation of the transactions herein
contemplated nor the fulfillment of the terms hereof violate the terms of any
agreement, indenture, mortgage, deed of trust, equipment lease,
2
328
instrument or other document to which Pledgors are parties, or conflict with any
Law, applicable to the Pledgors of any court or any government, regulatory body
or administrative agency or other governmental body having jurisdiction over
Pledgors or their Assets, to the extent that such violation or conflict would
have a material adverse effect on the financial condition, business, Assets,
liabilities or prospects of Pledgors or on the value of the Pledged Collateral
or on the Security Interests.
(d) The Pledged Collateral as described in Schedule A
attached hereto includes all of the issued and outstanding shares of Capital
Stock of the Identified Companies and Additional Companies beneficially owned by
the Pledgors on the date hereof; and all outstanding options, warrants or other
rights to subscribe for or purchase shares of the Capital Stock of the
Identified Companies and the Additional Companies beneficially owned by Pledgors
on the date hereof; and all notes, bonds, debentures or other evidences of Debt
beneficially owned by the Pledgors on the date hereof that (i) are at any time
convertible into Capital Stock of the Identified Companies or the Additional
Companies or (ii) have or at any time could by their terms have voting rights
with respect to any matters affecting the Identified Companies or the Additional
Companies.
(e) No consent or approval that has not been obtained prior
to the date hereof of any governmental body, regulatory authority or securities
exchange was or is necessary as a condition to the validity of the pledge
hereunder of the Pledged Collateral, and such pledge is effective to vest in the
Holders the rights of the Holders in the Pledged Collateral as set forth herein.
(f) If, while this Pledge Agreement is in effect, any
securities of the type described in Section 1 are hereafter acquired by
Pledgors, or any stock dividend, stock split, reclassification, readjustment,
reorganization, merger, consolidation, exchange offer, tender offer or other
change in the capital structure, including the creation of any subscription or
other rights or other Pledged Collateral, is declared or made, or proposed to be
declared or made, by the Identified Companies or any Additional Companies, all
substituted and additional securities or interests, if evidenced by
certificates, shall be endorsed in blank by Pledgors promptly upon receipt
thereof and, if not so evidenced, shall be otherwise appropriately transferred
to the Holders in negotiable form, and all certificates or instruments
evidencing such securities shall be delivered to the Holders to be held under
the terms of this Pledge Agreement in the same manner as, and as part of, the
Pledged Collateral. The Pledgors shall use best efforts to ensure that all
Pledged Securities shall be evidenced by one or more certificates. Any
securities that may be issued upon exercise of any subscription or other rights
relating to the Pledged Securities shall be endorsed in blank and delivered to
the Holders.
(g) Pledgors shall pay and discharge all taxes, assessments
and governmental charges or levies against any Pledged Collateral prior to
delinquency thereof and shall keep all Pledged Collateral free of all unpaid
charges whatsoever, unless such charges are being contested in good faith and
appropriate reserves have been set aside in accordance with GAAP.
Section 3. Administration of the Pledged Collateral. The Holders
shall administer the Pledged Collateral in accordance with the provisions
hereof.
3
329
Section 4. Release and Substitution of Pledged Collateral. The
Pledged Collateral shall not be released from the Security Interests created
hereunder and no Assets shall be substituted for any of the Pledged Collateral,
except in accordance with the provisions of Article V of the Purchase Agreement,
which provisions are hereby incorporated herein by reference.
Section 5. Voting Rights, Dividends, Etc.
(a) So long as no Default or Event of Default or event that
with the lapse of time or the giving of notice or both, would constitute an
Event of Default (as defined below) shall have occurred and be continuing or
would result therefrom:
(i) except as otherwise provided in this Pledge
Agreement, Pledgors shall be entitled to exercise any and
all voting or consensual rights and powers, including
subscription rights, accruing to an owner of the Pledged
Collateral or any part thereof for any purpose not
inconsistent with, or otherwise impair any rights of the
Holders arising under, the terms of this Pledge Agreement
or any agreement giving rise to any of the Obligations;
(ii) Pledgors shall be entitled to retain and use
any and all dividends or distributions which are permitted
by the Purchase Agreement and paid on the Pledged
Collateral in cash or property (other than securities);
(iii) the Required Holders shall execute and
deliver to Pledgors or cause to be executed and delivered
to Pledgors, all such proxies, powers of attorney, dividend
orders and other instruments as Pledgors may reasonably
request for the purpose of enabling it to exercise the
voting or consensual rights and powers which Pledgors are
entitled to exercise pursuant to the foregoing subparagraph
(i) or to receive the dividends or cash or other Assets
which Pledgors are authorized to retain pursuant to the
foregoing subparagraph (ii).
(b) Upon the occurrence and during the continuance of a
Default, an Event of Default, or event that with the lapse of time or the giving
of notice or both, would constitute an Event of Default, all rights of Pledgors
to exercise the voting or consensual rights and powers which the Pledgors would
otherwise be entitled to exercise pursuant to subparagraph (i) of Section 5(a)
hereof and to receive the dividends and distributions which Pledgors would
otherwise be authorized to receive and retain pursuant to subparagraph (ii) of
Section 5(a) hereof shall cease, and all such rights shall thereupon become
vested in the Holders, which shall then have the sole and exclusive right and
authority to exercise all such voting or consensual rights and powers and to
receive and retain all such dividends and distributions. Any and all money and
other Assets paid over to or received by the Holders pursuant to the provisions
of this Section 5(b) shall be retained by the Holders in the account established
pursuant to that certain Interest Escrow Security Agreement, dated as of the
date hereof, by and among the Company and the other parties thereto (the
"Collateral Account") as additional Pledged Collateral hereunder and shall be
administered and applied in accordance with the provisions of the Notes.
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Section 6. Default; Remedies.
(a) Defined. For purposes of this Pledge Agreement, the
terms "Default" and "Event of Default" shall have the respective meanings
provided in the Notes and shall include any event that with the lapse of time or
the giving of notice or both, would constitute an Event of Default.
(b) Exercise of Remedies Under the Security Agreement. If a
Default or Event of Default or event that with the lapse of time or the giving
of notice or both, shall constitute an Event of Default in the payment of any
Obligations shall have occurred and be continuing or would result therefrom the
Holders may commence the taking of such actions (or refrain from taking actions)
toward collection or enforcement of this Pledge Agreement and the Pledged
Collateral (or any portion thereof), including, without limitation, action
toward foreclosure upon any Pledged Collateral, as it deems appropriate in their
sole discretion. If any Default or Event of Default or event that with the lapse
of time or the giving of notice or both, shall constitute an Event of Default
that was the basis for the commencement of such action shall have been cured or
waived, and, in the case where there has been an acceleration, rescission of
such acceleration shall have occurred, in each case in accordance with the terms
of the Securities Purchase Agreement, the Notes, or any of the Ancillary
Agreements, any direction by the Holders to take any action in connection with
the aforementioned notice shall be deemed rescinded upon notification by the
Required Holders of such cure, waiver or rescission of acceleration, as the case
may be.
(c) Remedies Generally. If a Default or Event of Default or
event that with the lapse of time or the giving of notice or both, in the
payment of any Obligation shall constitute an Event of Default shall have
occurred and be continuing or would result therefrom, the Required Holders or
their agents or attorneys may retain the Pledged Collateral or sell, assign,
transfer, or dispose of, endorse and deliver the whole or, from time to time,
any part of the Pledged Collateral at public or private sale, for cash, upon
credit or for other property, for immediate or future delivery, and for such
price or prices and on such other terms as are satisfactory to the Holders (in
their discretion) without liability for loss or damage. Pledgors agree that the
private sale or other private disposition of Pledged Collateral shall be deemed
commercially reasonable notwithstanding the possibility that a substantially
higher price might be realized if such sale or other disposition were public and
deferred until after registration under the Securities Act of 1933, as amended,
or after compliance with any other applicable securities laws. Upon consummation
of any such sale, the Holders shall have the right to assign, transfer, endorse
and deliver to the purchaser or purchasers thereof the Pledged Collateral so
sold. Each such purchaser at any such sale shall hold the property sold
absolutely free from any claim or right on the part of the Pledgors, and
Pledgors hereby waive (to the full extent permitted by Law) all rights of
redemption, stay or appraisal which Pledgors now have or may have at any time in
the future have under any Law. The Holders shall give Pledgors five days'
written notice (which Pledgors agree shall be deemed to be reasonable
notification within the meaning of Section 9-504(3) of the relevant Uniform
Commercial Code) of the their intention to make any such public or private sale.
Any such sale shall be held at such time or times and at such place or places as
the Holders may fix. At any such sale, the Pledged Collateral, or portion
thereof to be sold, may be sold as an entirety or in separate portions, as the
Required Holders may, in their discretion, determine. The Holders shall not be
obligated to make any sale of the Pledged
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Collateral if they shall determine not to do so, regardless of the fact that
notice of sale of the Pledged Collateral may have been given. The Holders may,
without notice or publication, adjourn any public or private sale or cause the
same to be adjourned from time to time by announcement at the time and place
fixed for sale, and such sale may, without further notice, be made at the time
and place to which the same was so adjourned. In case sale of all or any part of
the Pledged Collateral is made on credit or for future delivery, the Pledged
Collateral so sold may be retained by the Holders until the sale price is paid
by the purchaser or purchasers thereof, but the Holders shall not incur any
liability in case any such purchaser or purchasers shall fail to take up and pay
for the Pledged Collateral so sold and, in case of any such failure, such
Pledged Collateral may be sold again upon like notice. As an alternative to
exercising the power of sale herein conferred upon it, the Holders may proceed
by suit or suits at Law or in equity to foreclose this Pledge Agreement and sell
the Pledged Collateral or any portion thereof pursuant to judgment or decree of
a court or courts having competent jurisdiction. If, under mandatory
requirements of Law, the Holders shall be required to make disposition of the
Pledged Collateral within a period of time that does not permit the giving of
notice to Pledgors as provided herein, the Holders need give Pledgors only such
notice of disposition as shall be reasonably practicable in view of such Law.
(d) Remedies; Obtaining the Collateral Upon Default. The
Pledgors agrees that, if a Default, Event of Default or any event that with the
lapse of time or the giving of notice, or both, shall constitute an Event of
Default, in the payment of any Obligations shall have occurred and be
continuing, or would result therefrom, then and in every such case, and in
addition to the rights and remedies available to a secured party under any
applicable provisions of the Uniform Commercial Code, or any other Law, the
Holders may:
(i) personally or by Holders or attorneys,
immediately take possession of the Pledged Collateral or
any part thereof from Pledgors or any other person who then
has possession of any part thereof, with or without notice
or process of Law, and for that purpose may enter upon a
Pledgors' premises where any of the Pledged Collateral is
located and remove the same and use in connection with such
removal any and all services, supplies, aids and other
facilities of Pledgors;
(ii) instruct the obligor or obligors on any
agreement, instrument or other obligation constituting
Pledged Collateral to make any payment or render any
performance required by the terms of such agreement,
instrument or obligation directly to the Holders or their
designee;
(iii) withdraw all monies, securities and
instruments held by the Holders in the Financial Accounts
(as that term is defined in the Security Agreement) or
otherwise for application to the Obligations;
(iv) sell or otherwise liquidate or direct the
Pledgors to sell or otherwise liquidate, any or all
investments made in whole or in part with the Pledged
Collateral or any part thereof, and take possession of the
proceeds of any such sale or liquidation; and
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(v) take possession of the Pledged Collateral or
any part thereof by directing Pledgors in writing to
deliver the same to the Holders at any place or places
designated by the Holders, in which event the Pledgors
shall at its own expense:
(A) forthwith cause the same to be
moved to the place or places so designated by the
Holders and there delivered to the Holders;
(B) store and keep any Pledged
Collateral so delivered to the Holders at such
place or places pending further action by the
Holders as provided in this Section 6(d); and
(C) while any such Pledged Collateral
shall be so stored and kept, provide such guard
and maintenance services as shall be necessary to
protect the same and to preserve and maintain
such Pledged Collateral in good condition;
it being understood that the Pledgors' obligation so to deliver the
Pledged Collateral is of the essence of this Pledge Agreement and
that, accordingly, upon application to a court of equity having
jurisdiction, the Holders shall be entitled to a decree requiring
specific performance by Pledgors of such obligation.
(e) Collateral Account. The Required Holders shall deposit
the proceeds of any Pledged Collateral obtained or disposed of pursuant to this
Section 6 in the Collateral Account (as defined in the Security Agreement).
(f) Preventing Impairment of the Pledged Collateral.
Regardless of whether or not there shall have occurred any Default or Event of
Default, the Holders may institute or maintain or cause in the name of Pledgors
or of the Holders, or both, to be instituted and maintained, such suits and
proceedings as the Holders may be advised by counsel shall be necessary or
expedient to prevent any impairment of the Security Interests in or perfection
of, the Pledged Collateral in contravention of the terms hereof or of the
Securities Purchase Agreement, the Notes or any of the Ancillary Agreements.
Section 7. Holders Appointed Attorney-in-Fact. Pledgors hereby
constitute and appoint the Holders their attorney-in-fact for the purpose of
carrying out the provisions, but subject to the terms and conditions, of this
Pledge Agreement and taking any action and executing any instrument, including,
without limitation, any financing statement or continuation statements, and
taking any other action to maintain validity, perfection and enforcement of the
Security Interests intended to be created hereunder, that the Holders may deem
necessary or advisable to accomplish the purposes hereof, which appointment is
irrevocable and coupled with an interest.
Section 8. Purchase of Pledged Collateral by Holder. At any sale of
the Pledged Collateral, whether pursuant to power of sale or otherwise
hereunder, any Holders may, to the extent permitted by Law, bid for and
purchase, free from any right or redemption, stay or
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333
appraisal (all such rights being hereby waived and released by Pledgors to the
extent permitted by Law), the Pledged Collateral or any part thereof or any
interest therein and upon compliance with the terms of such sale may hold,
retain, exploit, resell or otherwise dispose of such Pledged Collateral without
further accountability to Pledgors for the proceeds of such sale. Pledgors will
execute and deliver, or cause to be executed and delivered, such instruments,
endorsements, assignments, waivers, certificates and other documents and take
such further action as the Holders shall reasonably request in connection with
any such sale.
Section 9. Disposition of Proceeds. The proceeds of any sale or other
disposition of the whole or any part of the Pledged Collateral by the Holders,
together with any other monies held by the Holders pursuant to this Pledge
Agreement, shall be applied by the Holders in accordance with the provisions of
the Notes.
Section 10. Waiver of Claims. Except as otherwise provided in the
Securities Purchase Agreement or this Pledge Agreement, THE PLEDGORS HEREBY
WAIVE, TO THE EXTENT PERMITTED BY LAW, NOTICE OF JUDICIAL HEARING IN CONNECTION
WITH THE HOLDERS' TAKING POSSESSION OR THE HOLDERS' DISPOSITION OF ANY OF THE
PLEDGED COLLATERAL BY THE HOLDERS IN ACCORDANCE WITH THE TERMS HEREOF,
INCLUDING, WITHOUT LIMITATION, ANY AND ALL PRIOR NOTICES AND HEARINGS FROM ANY
PREJUDGMENT REMEDY OR REMEDIES AND ANY SUCH RIGHT THAT THE PLEDGORS WOULD
OTHERWISE HAVE UNDER THE CONSTITUTION OR ANY STATUTE OF THE UNITED STATES OR OF
ANY STATE, and, to the fullest extent permitted by applicable Law, Pledgors
hereby further waive:
(a) all damages occasioned by such taking of possession
except any damages that are the direct result of the Holders' gross negligence,
bad faith or willful misconduct; and
(b) all other requirements as to the time, place and terms
of sale or other requirements with respect to the enforcement of the Holders'
rights and powers hereunder.
Any sale of, or the exercise of any options to purchase, or any other
realization upon, any Pledged Collateral shall operate to divest all right,
title, interest, claim and demand, at Law or in equity, of the Pledgors therein
and thereto, and shall be perpetual bar both at Law and in equity against the
Pledgors and against any and all Persons claiming or attempting to claim the
Pledged Collateral so sold, optioned or realized upon, or any part thereof,
through and under Pledgors.
Section 11. Remedies Cumulative; No Waiver. Each right, power and
remedy of the Holders provided for herein, in the Securities Purchase Agreement,
the Notes and any other Ancillary Agreement pursuant to which a Lien is created
in favor of any Holder, or now or hereafter existing at Law, shall be cumulative
and concurrent and shall be in addition to every other right, power or remedy of
any Holder provided for herein, in the Securities Purchase Agreement, the Notes
and any other Ancillary Agreement pursuant to which a Lien is created in favor
of any Holder or now or hereafter existing at Law. No failure on the part of any
Holder to exercise, and no delay in exercising, any right, power or remedy
hereunder, or under the Securities Purchase Agreement, the Notes and any other
Ancillary Agreement pursuant to
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which a Lien is created in favor of any Holder or now or hereafter existing at
Law, shall operate as a waiver thereof, nor shall any single or partial exercise
of any such right, power or remedy preclude any other or further exercise
thereof or the exercise of any other right, power or remedy. No notice to or
demand on Pledgors hereunder shall, of itself, entitle Pledgors to any other or
further notice or demand in the same, similar or other circumstances.
Section 12. Additional Collateral. Without notice or consent of
Pledgors and without impairment of the Security Interests and rights created by
this Pledge Agreement, the Holders may accept from any Person additional
Collateral or other security for the Obligations. Neither the creation of the
Security Interests created hereunder nor the acceptance of any such additional
Collateral or Security shall prevent the Holders from resorting to such
additional Collateral or Security or to the Pledged Collateral, in any order,
without affecting the Holders' rights hereunder.
Section 13. Further Assurances. The Pledgors agree (i) that they
shall, at their own expense, (and will cause their Subsidiaries and New
Subsidiaries to), file or record such notices, financing statements,
continuation statements or other documents as may be necessary to perfect the
Security Interests, and as the Holders may reasonably request, such instruments
to be in form and substance satisfactory to the Holders and (ii) Pledgors shall,
at their own expense, (and will cause their Subsidiaries and New Subsidiaries
to), do such further acts and things and execute and deliver to the Holders such
additional conveyances, assignments, agreements and instruments as the Holders
may at any time reasonably request in connection with the administration and
enforcement of this Pledge Agreement or relative to the Pledged Collateral or
any part thereof or in order to assure and confirm unto the Holders the Holders'
rights, powers and remedies hereunder.
Section 14. Pledgors' Obligations Absolute. The liability of the
Pledgors under this Pledge Agreement shall remain in full force and effect
without regard to, and shall not be released, suspended, discharged, terminated
or otherwise affected by (a) any change in the time, place or manner of payment
of all or any of the Obligations, or in any other term of the Securities
Purchase Agreement, any Ancillary Agreement or the Notes, any waiver,
indulgence, renewal, extension, amendment or modification of or addition,
consent or supplement to or deletion from or any other action or inaction under
or in respect of the Securities Purchase Agreement, the Notes or any Ancillary
Agreement or any assignment or transfer thereof; (b) any lack of validity or
enforceability, in whole or in part, of the Securities Purchase Agreement, any
Ancillary Agreement or the Notes; (c) any furnishing of any additional security
for the Obligations or any acceptance thereof or any release or non-perfection
of any security interests in the property other than the Pledged Collateral; (d)
any limitation on any party's liability or Obligations under the Securities
Purchase Agreement, any Ancillary Agreement or the Notes; (e) any bankruptcy,
insolvency, reorganization, composition, adjustment, dissolution, liquidation or
other like proceeding relating to the Pledgors, or any action taken with respect
to this Pledge Agreement by any trustee or receiver, or by any court, in any
such proceeding, whether or not the Pledgors shall have notice or knowledge of
any of the foregoing; (f) any exchange, release or amendment or waiver of or
consent to departure from the Securities Purchase Agreement, the Notes and any
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335
Ancillary Agreement, or any other agreement pursuant to which a Lien is created
in favor of the Holders for the benefit of any Holder, pursuant to which a
person other than the Pledgors have been granted a Security Interest; or (g) any
other circumstance that might otherwise constitute a defense available to, or a
discharge of, the Pledgors.
Section 15. Waiver. To the extent permitted by Law, Pledgors hereby
waive promptness, diligence, notice of acceptance and any other notice with
respect to any of the Obligations and this Pledge Agreement and any requirement
that the Holders protect, secure, perfect or insure any security interest or any
property subject thereto or exhaust any right or take any action against the
Pledgors or any other Person; provided, however, that the Holders shall in any
event take such care in the handling of any Pledged Securities in their
possession as they take with respect to the property of a similar nature in its
possession.
Section 16. Termination. Upon payment in full and satisfaction of all
of the Obligations under the Securities Purchase Agreement, the Notes, and any
Ancillary Agreements, this Pledge Agreement shall terminate and the Holders
shall reassign and redeliver to Pledgors all of the Pledged Collateral hereunder
that has not been sold, disposed of, retained or applied by the Holders in
accordance with the terms hereof and the Securities Purchase Agreement, the
Notes and any Ancillary Agreements. Such reassignment and redelivery shall be
without warranty by or recourse to the Holders, and shall be at the expense of
the Pledgors. At such time, this Pledge Agreement shall no longer constitute a
Lien upon or grant of any Security Interests in any of the Pledged Collateral,
and the Holders shall, at the Pledgors' expense, deliver to the Pledgors written
acknowledgement thereof and of cancellation of this Pledge Agreement in a form
as reasonably requested by the Pledgors and adequate for proper filing or
recording in such offices and such jurisdictions as the Pledgors reasonably deem
necessary to release the Security Interests granted hereby. This Pledge
Agreement shall continue to be effective or be reinstated, as the case may be,
if at any time any payment of any of the Obligations is rescinded or must
otherwise be returned upon the insolvency, bankruptcy or reorganization of the
Pledgors, all as though such payment had not been made.
Section 17. Notices. Any notices or other communications required or
permitted hereunder shall be in writing, and shall be sufficiently given if made
by hand delivery, or registered or certified mail, postage prepaid, return
receipt requested, addressed as follows:
To the Pledgors:
Intracel Corporation
2005 NW Sammamish Road
Suite 107
Issaquah, Washington 98027
Attention: Chief Executive Officer
Fax Number: (425) 392-2992
Confirm Number: (425) 557-1894
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To the Holders:
300 First Stamford Place
Stamford, Connecticut 06902
Attention: Mr. Michael Graves
Fax Number: (203) 862-8601
Confirm Number: (203) 863-6224
Either party hereto may by notice to the other party designate such
additional or different addresses as shall be furnished in writing by such
party. Any notice or communication to either party shall be deemed to have been
given or made as of the date so delivered, if personally delivered; and three
calendar days after mailing if sent by registered or certified mail (except that
a notice of change of address shall not be deemed to have been given until
actually received by the addressee). The Pledgors will give notice to the
Holders at the addresses set forth above or, if the Company has been notified of
a change of address of Holders, to such address as set forth in the Company's
records.
Section 18. Binding Agreement; Assignment. This Pledge Agreement
shall be binding upon and inure to the benefit of the Pledgors, the Holders and
their respective successors and permitted assigns. Neither this Pledge Agreement
nor any interest herein or in the Pledged Collateral, or any part thereof, may
be assigned by the Pledgors; provided, however, that this Pledge Agreement may
be assigned by Pledgors and shall be deemed to be automatically assigned by the
Pledgors to any person who succeeds to the Pledgors, but nothing shall relieve
Pledgors of their Obligations hereunder. This Pledge Agreement shall be deemed
to be automatically assigned by the Holders to any person who succeeds to or
replaces any Holder in accordance with the terms hereof, and its assignee shall
have all rights and powers of, and act as, the Holders hereunder.
Section 19. Governing Law. THE PARTIES HERETO EXPRESSLY ACKNOWLEDGE
AND AGREE THAT, IN ACCORDANCE WITH THE PROVISIONS OF NEW YORK GENERAL
OBLIGATIONS LAW SECTION 5-1401 GOVERNING AGREEMENTS RELATING TO ANY OBLIGATION
ARISING OUT OF A TRANSACTION COVERING IN THE AGGREGATE NOT LESS THAN $250,000,
THIS PLEDGE AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NEW YORK, EXCEPT TO THE EXTENT THAT THE VALIDITY OR THE
PERFECTION OF THE SECURITY INTEREST HEREUNDER, OR REMEDIES HEREUNDER, IN RESPECT
OF ANY PARTICULAR COLLATERAL ARE GOVERNED BY THE LAWS OF A JURISDICTION OTHER
THAN NEW YORK. TO THE FULLEST EXTENT THEY MAY EFFECTIVELY DO SO UNDER APPLICABLE
LAW, THE PARTIES HERETO HEREBY IRREVOCABLY SUBMIT TO THE JURISDICTION OF ANY NEW
YORK STATE COURT SITTING IN THE BOROUGH OF MANHATTAN IN NEW YORK CITY OR ANY
FEDERAL COURT SITTING IN THE BOROUGH OF MANHATTAN IN NEW YORK CITY IN RESPECT OF
ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS PLEDGE
AGREEMENT, AND IRREVOCABLY AGREE
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THAT ALL CLAIMS IN RESPECT OF ANY SUCH SUIT, ACTION OR PROCEEDING MAY BE HEARD
AND DETERMINED IN ANY SUCH COURT. THE PARTIES HERETO IRREVOCABLY WAIVE, TO THE
FULLEST EXTENT THEY MAY EFFECTIVELY DO SO UNDER APPLICABLE LAW, TRIAL BY JURY
AND ANY OBJECTION WHICH THEY MAY NOW OR HEREAFTER HAVE TO THE LAYING OF THE
VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT AND ANY
CLAIM THAT ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS
BEEN BROUGHT IN AN INCONVENIENT FORUM.
Section 20. Amendments. This Pledge Agreement may not be amended or
modified except by a written agreement signed by the Company and the Holders.
Section 21. Severability. In the event that any provision contained
in this Pledge Agreement shall for any reason be held to be illegal or invalid
under the Laws of any jurisdiction, such illegality or invalidity shall in no
way impair the effectiveness of any other provision hereof, or of such provision
under the Laws of any other jurisdiction; provided, that in the construction and
enforcement of such provision under the Laws of the jurisdiction in which such
holding of illegality or invalidity exists, and to the extent only of such
illegality or invalidity, this Pledge Agreement shall be construed and enforced
as though such illegal or invalid provision had not been contained herein.
Section 22. Headings. Section headings used herein are inserted for
convenience only and shall not in any way affect the meaning or construction of
any provision of this Pledge Agreement.
Section 23. Counterparts. This Pledge Agreement may be executed in
any number of counterparts, each of which when so executed and delivered shall
be an original, and all of which shall together constitute but one and the same
instrument. A complete set of counterparts shall be lodged with the Holders.
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IN WITNESS WHEREOF, the Pledgors and the Holders have caused this
Pledge Agreement to be executed and delivered by their respective officers
thereunto duly authorized as of the day and year first written above.
INTRACEL CORPORATION
as Pledgor
By: /s/ SIMON R. MCKENZIE
-----------------------------------
Name: Simon R. McKenzie
Title: President and Chief
Executive Officer
PERIMMUNE HOLDINGS, INC.
as Pledgor
By: /s/ SIMON R. MCKENZIE
-----------------------------------
Name: Simon R. McKenzie
Title: President and Chief
Executive Officer
NORTHSTAR HIGH TOTAL RETURN FUND
By: /s/ MICHAEL A. GRAVES
-----------------------------------
Name: Michael A. Graves
Title: Vice President
NORTHSTAR HIGH TOTAL RETURN
FUND II
By: /s/ MICHAEL A. GRAVES
-----------------------------------
Name: Michael A. Graves
Title: Vice President
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NORTHSTAR HIGH YIELD FUND
By: /s/ MICHAEL A. GRAVES
-----------------------------------
Name: Michael A. Graves
Title: Vice President
NORTHSTAR STRATEGIC INCOME FUND
By: /s/ MICHAEL A. GRAVES
-----------------------------------
Name: Michael A. Graves
Title: Vice President
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EXHIBIT H-1 THROUGH H-3
SUBSIDIARY GUARANTY
341
GUARANTY
THIS GUARANTY ("Guaranty") dated as of August 25, 1998, by BARTELS,
INC., a Delaware corporation having its address at 2005 NW Sammamish Road, Suite
107, Issaquah, Washington 98027 ("Guarantor") in favor of the holders and their
successors and assigns (collectively, the "Holders"), of the Notes of the
Company (the "Notes") issued pursuant to that certain Securities Purchase
Agreement, dated as of the date hereof, by and among Intracel Corporation, the
parent company of the Guarantor ("Parent") and the parties thereto (the
"Purchase Agreement"). As used herein, all capitalized terms not otherwise
defined herein shall have the meanings set forth in the Purchase Agreement.
WHEREAS, Guarantor and Parent are to be liable for the obligations of
Parent under the Purchase Agreement, the Notes and the Ancillary Agreements (the
"Obligations"); and
WHEREAS, Guarantor, being a wholly-owned subsidiary of Parent, shall
derive substantial benefit and advantage from the financial accommodations to
Parent provided by the Notes, and it shall be to Guarantor's direct interest and
economic benefit to assist Parent in procuring the Note financing;
NOW, THEREFORE, for and in consideration of the premises and to induce
Holders to purchase the Notes, and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, Guarantor hereby
agrees as follows:
1. Guaranty of Payment.
(a) Guarantor hereby unconditionally guarantees the full and
prompt payment, when due, whether at maturity or by reason of acceleration or
otherwise and at all times thereafter on demand, of any and all of the
Obligations.
(b) Guarantor acknowledges that valuable consideration supports
this Guaranty (including, without limitation, the consideration set forth in the
recitals above as well as any other financial accommodation, whether heretofore
or hereafter made to Parent, any extension, renewal or replacement of any of the
Obligations, any forbearance with respect to any of the Obligations or
otherwise, and any other valuable consideration).
(c) All payments under this Guaranty shall be made in United
States currency and in the same manner as provided for the Obligations.
(d) The term "Collateral" and "After Acquired Collateral" shall
have the meanings ascribed to such terms in the security agreement, dated as of
the date hereof by and among Parent, Guarantor and the Holders (the "Security
Agreement") and the Intellectual Property Security Agreement dated as of the
date hereof (the "Intellectual Property Security Agreement").
342
2. Holders' Costs and Expenses.
Guarantor shall pay on demand, if not paid by Parent, all costs and
expenses of every kind incurred by Holders (a) in enforcing this Guaranty, (b)
in collecting any of the Obligations from Parent or Guarantor, (c) in realizing
upon or protecting any Collateral or After Acquired Collateral for this Guaranty
or for payment of any of the Obligations; and (d) for any other purpose related
to the Obligations or this Guaranty. "Costs and expenses" as used in the
preceding sentence shall include, without limitation, reasonable attorneys' fees
incurred by Holders in retaining counsel for advice, suit, appeal, any
insolvency or other proceedings under the United States Bankruptcy Code, 11
U.S.C. Sections 101-1330 (the "Bankruptcy Code") or otherwise, or for any
purpose specified in the preceding sentence.
3. Nature of Guaranty: Continuing, Absolute and Unconditional.
(a) This Guaranty is and is intended to be a continuing guaranty
of payment of the Obligations, independent of and in addition to any other
guaranty, endorsement, Collateral or other agreement held by Holders therefor or
with respect thereto, whether furnished by Guarantor or another Person. The
liability of Guarantor to repay the Obligations hereunder shall be unlimited.
Guarantor shall have no right of subrogation, indemnification, contribution,
reimbursement or other payment with respect to any payments made by Guarantor
hereunder, and hereby waives any benefit of, and any right to participate in,
any security or Collateral given to Holders to secure payment of the
Obligations, and Guarantor shall not take any action to enforce any
indebtedness, liabilities or obligations of Parent to Guarantor prior to the
Obligations being paid in full; provided that in the event of the bankruptcy or
insolvency of Parent, Holders shall be entitled, notwithstanding the foregoing,
to file in the name of Guarantor or in its own name a claim for any and all
indebtedness, liabilities and obligations owing to Guarantor by Parent, to vote
such claim and to apply the proceeds of any such claim to the Obligations.
(b) For the further security of the Holders and without in any
way diminishing the liability of Guarantor hereunder, following the occurrence
of a Default or an Event of Default (as defined in the Notes) or any event that
with the lapse of time, or the giving of notice, or both, would constitute an
Event of Default, all debts and liabilities, present or future of Parent to
Guarantor and all monies received from Borrower or for its account by Guarantor
shall be received in trust for Holders and forthwith upon receipt shall be paid
over to Holders until all of the Obligations have been paid in full. This
assignment and postponement is independent of and severable from this Guaranty
and shall remain in full force and effect whether Guarantor is liable for any
amount under this Guaranty.
(c) This Guaranty is absolute and unconditional and shall not be
changed or affected by any representation, oral agreement, act or thing
whatsoever, except as herein provided. This Guaranty is intended by Guarantor to
be the final, complete and exclusive expression of the guaranty agreement
between Guarantor and the Holders. No modification or amendment of any provision
of this Guaranty shall be effective unless in writing and signed by the Required
Holders.
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(d) If at any time all or any part of any payment theretofore
applied by Holders to any of the Obligations is or must be rescinded or returned
by Holders for any reason whatsoever (including, without limitation, the
insolvency, bankruptcy or reorganization of Parent), such Obligations shall, for
the purposes of this Guaranty, to the extent that such payment is or must be
rescinded or returned, be deemed to have continued in existence, notwithstanding
such application by Holders, and this Guaranty shall continue to be effective or
be reinstated, as the case may be, as to such Obligations, all as though such
application by Holders had not been made.
4. Certain Rights and Secured Obligations.
(a) Guarantor authorizes Holders, without notice, demand or any
reservation of rights against Guarantor and without affecting Guarantor's
obligations hereunder, from time to time: (i) to renew, extend, increase,
accelerate or otherwise change the time for payment of, the terms of or the
interest on the Obligations or any part thereof or grant other indulgences to
Parent or others; (ii) to accept from any Person and hold collateral (including
the Collateral (as defined in the Security Agreement and the Intellectual
Property Security Agreement)) for the payment of the Obligations or any part
thereof, and to modify, exchange, enforce or refrain from enforcing, or release,
compromise, settle, waive, subordinate or surrender, with or without
consideration, such Collateral or any part thereof; (iii) to accept and hold any
endorsement or guaranty of payment of the Obligations or any part thereof, and
to discharge, release or substitute any such obligation of any such endorser or
guarantor, or any Person who has given any security interest in any Collateral
as security for the payment of the Obligations or any part thereof, or any other
Person in any way obligated to pay the Obligations or any part thereof, and to
enforce or refrain from enforcing, or compromise or modify, the terms of any
obligation of any such endorser, guarantor, or Person; (iv) to dispose of any
and all Collateral securing the Obligations in any manner as Holders, in their
sole discretion, may deem appropriate, and to direct the order or manner of such
disposition and the enforcement of any and all endorsements and guaranties
relating to the Obligations or any part thereof as Holders in their sole
discretion may determine; (v) except as otherwise provided in the Purchase
Agreement or the Notes, to determine the manner, amount and time of application
of payments and credits, if any, to be made on all or any part of any component
or components of the Obligations (whether principal, interest, premium, fees,
costs, and expenses or otherwise) including, without limitation, the application
of payments received from any source to the payment of Debt other than the
Obligations even though Holders might lawfully have elected to apply such
payments to the Obligations and not to obligations that are not covered by this
Guaranty; and (vi) to take advantage or refrain from taking advantage of any
security or accept or make or refrain from accepting or making any compositions
or arrangements when and in such manner as Holders, in their sole discretion,
may deem appropriate and generally do or refrain from doing any act or thing
which might otherwise, at law or in equity, release the liability of Guarantor
as a guarantor or surety in whole or in part, and in no case shall Holders be
responsible or shall Guarantor be released in whole or in part for any act or
omission in connection with Holders having sold any security for less than its
value.
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(b) If any Default or Event of Default, or event that with the
lapse of time, or the giving of notice, or both, would constitute an Event of
Default, shall be made in the payment of any of the Obligations and any grace
period has expired with respect thereto, Guarantor shall pay the same in full to
the extent hereinafter provided: (i) without deduction by reason of any set-off,
defense (other than payment) or counterclaim of Parent; (ii) without requiring
presentment, protest or notice of nonpayment or notice of default to Guarantor,
to Parent or to any other Person; (iii) without demand upon Parent for payment
or proof of such demand or filing of claims with a court in the event of
receivership, bankruptcy or reorganization of Parent; (iv) without requiring
Holders to resort first or concurrently to Parent (this Guaranty being a
guaranty of payment and not of collection) or to any other guaranty or any
Collateral which Parent may hold; (v) without requiring notice of acceptance
hereof or assent hereto by Holders; and (vi) without requiring notice that any
of the Obligations has been incurred, extended or continued or of the reliance
by Holders upon this Guaranty all of which Guarantor hereby waives.
(c) Guarantor's obligation hereunder shall not be affected by any
of the following, all of which Guarantor hereby waives: (i) any failure to
perfect or continue the perfection of any security interest in or other Lien on
any Collateral or After Acquired Collateral securing payment of any of the
Obligations or Guarantor's obligation hereunder; (ii) the invalidity,
unenforceability, propriety of manner of enforcement of, or loss or change in
priority of any such security interest or other Lien or guaranty of the
Obligations; (iii) any failure to protect, preserve or insure any such
Collateral or After Acquired Collateral; (iv) failure of Guarantor to receive
notice of any intended disposition of such Collateral or After Acquired
Collateral; (v) any defense arising by reason of the cessation for any reason
whatsoever of liability of Parent (including, without limitation, any failure,
negligence or omission by Holders in enforcing their claims against Parent);
(vi) any release, settlement or compromise of any obligation of Parent; (vii)
the invalidity or unenforceability of any of the Obligations; (viii) any change
of ownership of Parent or insolvency, bankruptcy or any other change in the
legal status of Parent; (ix) any change in, or imposition of, any Law which
impairs or might impair, delay or in any way affect the validity or
enforceability or the payment when due of the Obligations; (x) the existence of
any claim, set-off or other right that Guarantor may have at any time against
Holders or Parent in connection herewith or any unrelated transaction; (xi)
Holders' election, in any case instituted under chapter 11 of the Bankruptcy
Code, of the application of section 1111(b)(2) of the Bankruptcy Code; (xii) any
borrowing, use of cash Collateral or grant of security interest by Parent, as
debtor in possession, under sections 363 or 364 of the Bankruptcy Code; (xiii)
the disallowance of all or any portion of any of Holders' claims for repayment
of the Obligations under sections 502 or 506 of the Bankruptcy Code or
otherwise; or (xiv) any other fact or circumstance which might otherwise
constitute grounds at law or in equity for the discharge or release of Guarantor
from its Obligations hereunder, all whether Guarantor shall have had notice or
knowledge of any act or omission referred to in the foregoing clauses (i)
through (xiv) of this paragraph.
(d) The Guarantor shall, at its own expense, do all acts and
things required to cause any New Subsidiaries (as defined in the Purchase
Agreement), to become a party to a
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guaranty agreement in form and substance identical to this Guaranty Agreement
and to comply with the obligations of this Agreement.
5. Representations and Warranties.
Guarantor represents and warrants to Holders that: (a) it is a
corporation duly organized, validly existing and in good standing under the laws
of the jurisdiction of its incorporation and has full power, authority and legal
right to own its Assets and to transact the business in which it is engaged; (b)
it has full power, authority and legal right to execute and deliver and to
perform its Obligations under this Guaranty and has taken all necessary action
to authorize the guaranty hereunder on the terms and conditions of this Guaranty
and to authorize the execution, delivery and performance of this Guaranty; and
(c) this Guaranty has been duly executed and delivered by Guarantor and
constitutes the legal, valid and binding obligation of the Guarantor,
enforceable against Guarantor in accordance with its terms.
6. Security.
To secure payment of Guarantor's obligations under this Guaranty,
concurrently with the execution of this Guaranty, Guarantor is entering into the
Security Agreement granting to the Holders of the Notes, a first priority
perfected security interest (except as otherwise provided in the Security
Documents), in all tangible and intangible Assets wherever located in which
Guarantor now has or hereafter acquires any right or interest.
7. Termination.
This Guaranty shall remain in full force and effect until all of the
Obligations shall be finally and irrevocably paid in full. Payment of all of the
Obligations from time to time then Outstanding shall not operate as a
discontinuance of this Guaranty. To the extent that Parent makes a payment or
payments pursuant to the Notes, or Holders receive any proceeds of Collateral or
After Acquired Collateral securing the Obligations, which payment or receipt of
proceeds or any part thereof is subsequently invalidated, declared to be
fraudulent or preferential, set aside or required to be returned or repaid to
Parent or its trustee, receiver, debtor in possession or any other Person
(including, without limitation, any guarantor, under any insolvency or
bankruptcy Law, or equitable cause), then to the extent of such payment, return
or repayment, the Obligation or part thereof that has been paid, reduced or
satisfied by such amount shall be reinstated and continued in full force and
effect as of the date when such initial payment, reduction or satisfaction
occurred, and this Guaranty shall continue in full force notwithstanding any
contrary action that may have been taken by Holders in reliance upon such
payment, and any such contrary action so taken shall be without prejudice to
Holders' rights under this Guaranty and shall be deemed to have been conditioned
upon such payment having become final and irrevocable.
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8. Taxes.
All payments hereunder shall be made without any counterclaim or
set-off, free and clear of, and without reduction by reason of, any taxes,
levies, imposts, charges and withholdings, restrictions or conditions of any
nature other than any income or franchise taxes imposed on the Holders of the
Notes ("Taxes"), which are now or may hereafter be imposed, levied or assessed
by any country, political subdivision or taxing authority, all of which will be
for the account of and paid by Guarantor. If for any reason, any such reduction
is made or any Taxes are paid by Holders, Guarantor shall pay to Holders, such
additional amounts as may be necessary to ensure that Holders receive the same
net amount which it would have received had no reduction been made or Taxes
paid.
9. Miscellaneous.
(a) The terms "Parent" and "Guarantor" as used in this Guaranty
shall include: (i) any successor Person (as defined in the Purchase Agreement)
to which all or a substantial part of the Assets of Parent or Guarantor, as the
case may be, shall have been transferred and (ii) any other Person into or with
which of Parent or Guarantor, as the case may be, shall have been merged,
consolidated, reorganized, or absorbed. The term "Guarantor" shall include all
Subsidiaries of the Company (as that term is defined in the Purchase Agreement).
(b) Guarantor's obligation hereunder is to pay the Obligations in
full when due according to the Purchase Agreement, the Notes and the Ancillary
Agreements to the extent provided herein and shall not be affected by any stay
or extension of time for payment by Parent or Guarantor resulting from any
proceeding under the Bankruptcy Code or any similar law.
(c) Holders shall not by any act, delay, omission or otherwise be
deemed to have waived any of its remedies hereunder, and no waiver by Holders
shall be valid unless in writing and signed by the Required Holders and then
only to the extent therein set forth. A waiver by the Required Holders of any
right or remedy hereunder on any one occasion shall not be construed as a bar to
any right or remedy which Holders would otherwise have on any other occasion. No
course of dealing between Guarantor and Holders and no failure to exercise, nor
any delay in exercising on the part of Holders, any right, power or privilege
hereunder or under the Purchase Agreement, the Notes or the Ancillary Agreements
shall impair such right or remedy or operate as a waiver thereof nor shall any
single or partial exercise of any right, power or privilege hereunder preclude
any other or further exercise thereof or the exercise of any other right, power
or privilege. The rights and remedies herein provided are cumulative and may be
exercised singly or concurrently, and are not exclusive of any rights or
remedies of Holders provided by law.
(d) This Guaranty shall inure to the benefit of the Holders.
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(e) Section headings in this Guaranty are included herein for
convenience of reference only and shall not constitute a part of this Guaranty
for any other purpose or be given any substantive effect.
(f) Governing Law; Submission to Jurisdiction. This Agreement
shall be construed in accordance with, and governed by, the internal laws of the
State of New York as permitted by Section 5-401 of the New York General
Obligations Law (or any similar successor provision) without giving effect to
any choice of law rule that would cause the application of the laws of any
jurisdiction other than the State of New York. The Guarantor hereby irrevocably
and unconditionally:
(i) submit itself and its properties in any legal action
or proceeding relating to this Agreement and the Ancillary
Agreements to which it is a party, or for recognition and
enforcement of any judgment in respect thereof, to the general
jurisdiction of the Courts of the State of New York, the courts
of the United States of America for the Southern District of New
York, and appellate courts of any thereof;
(ii) consents that any such action or proceeding may be
brought in such courts and waives any objection that it may now
or hereafter have to the venue of any such action or proceeding
in any such court or that such action or proceeding was brought
in an inconvenient court and agrees not to plead or claim the
same;
(iii) agrees that service of process in any such action or
proceeding may be effected by mailing a copy thereof by
registered or certified mail (or any substantially similar form
of mail), postage prepaid, to it at its address set forth in or
determined pursuant to Section 10 or at such other address of
which the Holders shall have been notified pursuant thereto;
(iv) waives, to the maximum extent not prohibited by Law,
any right it may have to claim or recover in any legal action or
proceeding referred to in this Section 9(f) any punitive or
exemplary damages and any damages which are not proximately
caused by or the reasonably foreseeable result of the breach
which is the subject of such action or proceeding;
The Guarantor hereby acknowledges that:
(v) it has been advised by counsel in the negotiation,
execution and delivery of this Agreement and the Ancillary
Agreements;
(vi) the Holders do not have any fiduciary relationship
with or duty to the Guarantor arising out of or in connection
with this Agreement, or the Ancillary Agreements; and
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(vii) no joint venture or partnership exists between the
Holders, on the one hand, and the Guarantor, on the other hand,
and the relationship of the Guarantor and the Holders is that of,
inter alia, debtor and creditor.
THE GUARANTOR, EACH SUBSIDIARY OF THE GUARANTOR AND THE HOLDERS HEREBY
IRREVOCABLY AND UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY LEGAL ACTION OR
PROCEEDING RELATING TO THIS AGREEMENT, THE ANCILLARY AGREEMENTS AND FOR ANY
COUNTERCLAIM THEREIN.
THIS AGREEMENT AND THE ANCILLARY AGREEMENTS REPRESENT THE FINAL
AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.
THERE ARE NO UNWRITTEN ORAL AGREEMENTS OF THE PARTIES.
THE GUARANTOR WILL CAUSE EACH NEW SUBSIDIARY TO TAKE SUCH ACTION AS IS
REQUIRED TO CONSENT TO, AND BE BOUND BY, THE PROVISIONS OF THIS SECTION 9(F) IN
THEIR ENTIRETY.
(g) Guarantor agrees that Holders shall have the right to proceed
against Guarantor in a court in any location to enable Agent to enforce a
judgment or other court order entered in favor of Holders. Guarantor waives any
objection that it may have to the location of the court in which a Holder has
commenced a proceeding described in this Section 9(g).
(h) Any provision of this Guaranty which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition, and any such prohibition or unenforceability
in any jurisdiction shall not invalidate or render unenforceable such provision
in any other jurisdiction.
(i) This Guaranty shall in all respects be governed by, and
construed and enforced in accordance with, the laws of the State of New York,
without giving effect to any choice of law or conflict of law rules or
provisions (whether of the State of New York or any other jurisdiction) that
would cause the application of the laws of any jurisdiction other than the State
of New York, except that the filing, perfection, effect of perfection and
enforcement of security interests and Liens in other jurisdictions shall be
governed by the laws of the applicable jurisdictions in accordance with the UCC.
(j) Guarantor hereby represents and warrants to Holders that
Guarantor now has and shall continue to have independent means of obtaining
information concerning the affairs, financial condition and business of Parent.
Holders shall not have any duty or responsibility to provide Guarantor with any
credit or other information concerning the affairs, financial condition or
business of Parent which may come into Holders' possession.
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10. Notices. All notices, requests, demands, waivers and other
communication required or permitted to be given under this Guaranty shall be in
writing and shall be deemed to have been duly given if (a) delivered personally,
(b) mailed by first-class, certified mail, return receipt, postage prepaid, or
(c) sent by next-day or overnight mail or delivery.
If to Guarantor:
Bartels, Inc.
c/o Intracel Corporation
2005 NW Sammamish Road
Suite 107
Issaquah, Washington 98027
Attn: Simon R. McKenzie
Fax Number: (425) 392-2992
Confirm Number: (425) 557-1894
and
Morrison & Foerster LLP
1290 Avenue of the Americas
New York, New York 10104
Attn: Joseph W. Bartlett
Fax Number: (212) 468-7900
Confirm Number: (212) 468-8240
If to Holders:
300 First Stamford Place
Stamford, Connecticut
Attention: Michael A. Graves
Fax Number: (203) 862-8601
Confirm Number: (203) 863-6224
with a copy, which will
not constitute notice to:
Reboul, MacMurray, Hewitt, Maynard & Kristol
45 Rockefeller Plaza
New York, New York
Attn: Karen Wiedemann
Fax Number: (212) 841-5725
Confirm Number: (212) 841-5781
or, in each case, at such other address as may be specified in writing to the
other parties.
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All such notices, requests, demands, waivers and other communications shall be
deemed to have been received (a) if by personal delivery, on the date after such
delivery, (b) if by certified mail, on the third Business Day after the mailing
thereof, and (c) if by next-day or overnight mail or delivery, on the day
delivered.
11. Waivers.
(a) GUARANTOR WAIVES THE BENEFIT OF ALL VALUATION, APPRAISAL AND
EXEMPTION LAWS.
(b) IN THE EVENT OF AN EVENT OF DEFAULT, DEFAULT, OR ANY EVENT THAT WITH
THE LAPSE OF TIME OR GIVING OF NOTICE, OR BOTH, WOULD CONSTITUTE AN EVENT OF
DEFAULT UNDER PURCHASE AGREEMENT, THE NOTES, OR ANY OF THE ANCILLARY AGREEMENTS,
GUARANTOR HEREBY WAIVES TO THE FULL EXTENT PERMITTED BY APPLICABLE LAW ALL
RIGHTS TO NOTICE AND HEARING OF ANY KIND PRIOR TO THE EXERCISE BY HOLDERS OF
THEIR RIGHTS TO REPOSSESS THE COLLATERAL OR AFTER ACQUIRED COLLATERAL WITHOUT
JUDICIAL PROCESS OR TO REPLEVY, ATTACH OR LEVY UPON THE COLLATERAL WITHOUT PRIOR
NOTICE OR HEARING. GUARANTOR ACKNOWLEDGES THAT IT HAS BEEN ADVISED BY COUNSEL OF
ITS CHOICE WITH RESPECT TO THIS TRANSACTION AND THIS GUARANTY.
(c) GUARANTOR HEREBY WAIVES, TO THE EXTENT PERMITTED BY LAW, TRIAL BY
JURY, ANY OBJECTION BASED ON FORUM NON CONVENIENS, ANY OBJECTION TO VENUE OF ANY
ACTION INSTITUTED HEREUNDER AND WAIVES ANY BOND OR SURETY OR SECURITY UPON SUCH
BOND WHICH MIGHT, BUT FOR THIS WAIVER, BE REQUIRED OF HOLDERS.
(d) TO THE EXTENT PERMITTED BY LAW, GUARANTOR HEREBY WAIVES PERSONAL
SERVICE OF ANY AND ALL PROCESS UPON IT AND CONSENTS THAT SUCH SERVICE OF PROCESS
BE MADE BY CERTIFIED MAIL (WITH RETURN RECEIPT) DIRECTED TO IT AT ITS ADDRESS
SET FORTH IN SECTION 10 HEREOF, AND SERVICE SO MADE SHALL BE DEEMED TO BE
COMPLETED THE THIRD BUSINESS DAY AFTER THE SAME SHALL HAVE BEEN DEPOSITED IN THE
U.S. MAILS, POSTAGE PREPAID. GUARANTOR HEREBY WAIVES ANY RIGHT TO REQUIRE A
PROCEEDING FIRST OR CONCURRENTLY AGAINST PARENT OR RIGHT TO REQUIRE THE PRIOR OR
CONCURRENT DISPOSITION OF THE ASSETS OF PARENT TO MEET ITS SECURED OBLIGATIONS
AND COVENANTS THAT THIS GUARANTY WILL NOT BE DISCHARGED EXCEPT BY COMPLETE
PERFORMANCE OF THE OBLIGATIONS.
* * * * *
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IN WITNESS WHEREOF, this Guaranty has been executed as of the day first
written above.
BARTELS, INC.
--------------------------
By: Simon R. McKenzie
Its: Chief Executive Officer
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GUARANTY
THIS GUARANTY ("Guaranty") dated as of August 25, 1998, by PERIMMUNE,
INC., a Delaware corporation having its address at 1330 Piccard Drive,
Rockville, Maryland 20850 ("Guarantor") in favor of the holders and their
successors and assigns (collectively, the "Holders"), of the Notes of the
Company (the "Notes") issued pursuant to that certain Securities Purchase
Agreement, dated as of the date hereof, by and among Intracel Corporation, the
parent company of the Guarantor ("Parent") and the parties thereto (the
"Purchase Agreement"). As used herein, all capitalized terms not otherwise
defined herein shall have the meanings set forth in the Purchase Agreement.
WHEREAS, Guarantor and Parent are to be liable for the obligations of
Parent under the Purchase Agreement, the Notes and the Ancillary Agreements (the
"Obligations"); and
WHEREAS, Guarantor, being a wholly-owned subsidiary of Parent, shall
derive substantial benefit and advantage from the financial accommodations to
Parent provided by the Notes, and it shall be to Guarantor's direct interest and
economic benefit to assist Parent in procuring the Note financing;
NOW, THEREFORE, for and in consideration of the premises and to induce
Holders to purchase the Notes, and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, Guarantor hereby
agrees as follows:
1. Guaranty of Payment.
(a) Guarantor hereby unconditionally guarantees the full and
prompt payment, when due, whether at maturity or by reason of acceleration or
otherwise and at all times thereafter on demand, of any and all of the
Obligations.
(b) Guarantor acknowledges that valuable consideration supports
this Guaranty (including, without limitation, the consideration set forth in the
recitals above as well as any other financial accommodation, whether heretofore
or hereafter made to Parent, any extension, renewal or replacement of any of the
Obligations, any forbearance with respect to any of the Obligations or
otherwise, and any other valuable consideration).
(c) All payments under this Guaranty shall be made in United
States currency and in the same manner as provided for the Obligations.
(d) The term "Collateral" and "After Acquired Collateral" shall
have the meanings ascribed to such terms in the security agreement, dated as of
the date hereof by and among Parent, Guarantor and the Holders (the "Security
Agreement") and the Intellectual Property Security Agreement dated as of the
date hereof (the "Intellectual Property Security Agreement").
353
2. Holders' Costs and Expenses.
Guarantor shall pay on demand, if not paid by Parent, all costs and
expenses of every kind incurred by Holders (a) in enforcing this Guaranty, (b)
in collecting any of the Obligations from Parent or Guarantor, (c) in realizing
upon or protecting any Collateral or After Acquired Collateral for this Guaranty
or for payment of any of the Obligations; and (d) for any other purpose related
to the Obligations or this Guaranty. "Costs and expenses" as used in the
preceding sentence shall include, without limitation, reasonable attorneys' fees
incurred by Holders in retaining counsel for advice, suit, appeal, any
insolvency or other proceedings under the United States Bankruptcy Code, 11
U.S.C. Sections 101-1330 (the "Bankruptcy Code") or otherwise, or for any
purpose specified in the preceding sentence.
3. Nature of Guaranty: Continuing, Absolute and Unconditional.
(a) This Guaranty is and is intended to be a continuing guaranty
of payment of the Obligations, independent of and in addition to any other
guaranty, endorsement, Collateral or other agreement held by Holders therefor or
with respect thereto, whether furnished by Guarantor or another Person. The
liability of Guarantor to repay the Obligations hereunder shall be unlimited.
Guarantor shall have no right of subrogation, indemnification, contribution,
reimbursement or other payment with respect to any payments made by Guarantor
hereunder, and hereby waives any benefit of, and any right to participate in,
any security or Collateral given to Holders to secure payment of the
Obligations, and Guarantor shall not take any action to enforce any
indebtedness, liabilities or obligations of Parent to Guarantor prior to the
Obligations being paid in full; provided that in the event of the bankruptcy or
insolvency of Parent, Holders shall be entitled, notwithstanding the foregoing,
to file in the name of Guarantor or in its own name a claim for any and all
indebtedness, liabilities and obligations owing to Guarantor by Parent, to vote
such claim and to apply the proceeds of any such claim to the Obligations.
(b) For the further security of the Holders and without in any
way diminishing the liability of Guarantor hereunder, following the occurrence
of a Default or an Event of Default (as defined in the Notes) or any event that
with the lapse of time, or the giving of notice, or both, would constitute an
Event of Default, all debts and liabilities, present or future of Parent to
Guarantor and all monies received from Borrower or for its account by Guarantor
shall be received in trust for Holders and forthwith upon receipt shall be paid
over to Holders until all of the Obligations have been paid in full. This
assignment and postponement is independent of and severable from this Guaranty
and shall remain in full force and effect whether Guarantor is liable for any
amount under this Guaranty.
(c) This Guaranty is absolute and unconditional and shall not be
changed or affected by any representation, oral agreement, act or thing
whatsoever, except as herein provided. This Guaranty is intended by Guarantor to
be the final, complete and exclusive expression of the guaranty agreement
between Guarantor and the Holders. No modification or amendment of any provision
of this Guaranty shall be effective unless in writing and signed by the Required
Holders.
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(d) If at any time all or any part of any payment theretofore
applied by Holders to any of the Obligations is or must be rescinded or returned
by Holders for any reason whatsoever (including, without limitation, the
insolvency, bankruptcy or reorganization of Parent), such Obligations shall, for
the purposes of this Guaranty, to the extent that such payment is or must be
rescinded or returned, be deemed to have continued in existence, notwithstanding
such application by Holders, and this Guaranty shall continue to be effective or
be reinstated, as the case may be, as to such Obligations, all as though such
application by Holders had not been made.
4. Certain Rights and Secured Obligations.
(a) Guarantor authorizes Holders, without notice, demand or any
reservation of rights against Guarantor and without affecting Guarantor's
obligations hereunder, from time to time: (i) to renew, extend, increase,
accelerate or otherwise change the time for payment of, the terms of or the
interest on the Obligations or any part thereof or grant other indulgences to
Parent or others; (ii) to accept from any Person and hold collateral (including
the Collateral (as defined in the Security Agreement and the Intellectual
Property Security Agreement)) for the payment of the Obligations or any part
thereof, and to modify, exchange, enforce or refrain from enforcing, or release,
compromise, settle, waive, subordinate or surrender, with or without
consideration, such Collateral or any part thereof; (iii) to accept and hold any
endorsement or guaranty of payment of the Obligations or any part thereof, and
to discharge, release or substitute any such obligation of any such endorser or
guarantor, or any Person who has given any security interest in any Collateral
as security for the payment of the Obligations or any part thereof, or any other
Person in any way obligated to pay the Obligations or any part thereof, and to
enforce or refrain from enforcing, or compromise or modify, the terms of any
obligation of any such endorser, guarantor, or Person; (iv) to dispose of any
and all Collateral securing the Obligations in any manner as Holders, in their
sole discretion, may deem appropriate, and to direct the order or manner of such
disposition and the enforcement of any and all endorsements and guaranties
relating to the Obligations or any part thereof as Holders in their sole
discretion may determine; (v) except as otherwise provided in the Purchase
Agreement or the Notes, to determine the manner, amount and time of application
of payments and credits, if any, to be made on all or any part of any component
or components of the Obligations (whether principal, interest, premium, fees,
costs, and expenses or otherwise) including, without limitation, the application
of payments received from any source to the payment of Debt other than the
Obligations even though Holders might lawfully have elected to apply such
payments to the Obligations and not to obligations that are not covered by this
Guaranty; and (vi) to take advantage or refrain from taking advantage of any
security or accept or make or refrain from accepting or making any compositions
or arrangements when and in such manner as Holders, in their sole discretion,
may deem appropriate and generally do or refrain from doing any act or thing
which might otherwise, at law or in equity, release the liability of Guarantor
as a guarantor or surety in whole or in part, and in no case shall Holders be
responsible or shall Guarantor be released in whole or in part for any act or
omission in connection with Holders having sold any security for less than its
value.
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(b) If any Default or Event of Default, or event that with the
lapse of time, or the giving of notice, or both, would constitute an Event of
Default, shall be made in the payment of any of the Obligations and any grace
period has expired with respect thereto, Guarantor shall pay the same in full to
the extent hereinafter provided: (i) without deduction by reason of any set-off,
defense (other than payment) or counterclaim of Parent; (ii) without requiring
presentment, protest or notice of nonpayment or notice of default to Guarantor,
to Parent or to any other Person; (iii) without demand upon Parent for payment
or proof of such demand or filing of claims with a court in the event of
receivership, bankruptcy or reorganization of Parent; (iv) without requiring
Holders to resort first or concurrently to Parent (this Guaranty being a
guaranty of payment and not of collection) or to any other guaranty or any
Collateral which Parent may hold; (v) without requiring notice of acceptance
hereof or assent hereto by Holders; and (vi) without requiring notice that any
of the Obligations has been incurred, extended or continued or of the reliance
by Holders upon this Guaranty all of which Guarantor hereby waives.
(c) Guarantor's obligation hereunder shall not be affected by any
of the following, all of which Guarantor hereby waives: (i) any failure to
perfect or continue the perfection of any security interest in or other Lien on
any Collateral or After Acquired Collateral securing payment of any of the
Obligations or Guarantor's obligation hereunder; (ii) the invalidity,
unenforceability, propriety of manner of enforcement of, or loss or change in
priority of any such security interest or other Lien or guaranty of the
Obligations; (iii) any failure to protect, preserve or insure any such
Collateral or After Acquired Collateral; (iv) failure of Guarantor to receive
notice of any intended disposition of such Collateral or After Acquired
Collateral; (v) any defense arising by reason of the cessation for any reason
whatsoever of liability of Parent (including, without limitation, any failure,
negligence or omission by Holders in enforcing their claims against Parent);
(vi) any release, settlement or compromise of any obligation of Parent; (vii)
the invalidity or unenforceability of any of the Obligations; (viii) any change
of ownership of Parent or insolvency, bankruptcy or any other change in the
legal status of Parent; (ix) any change in, or imposition of, any Law which
impairs or might impair, delay or in any way affect the validity or
enforceability or the payment when due of the Obligations; (x) the existence of
any claim, set-off or other right that Guarantor may have at any time against
Holders or Parent in connection herewith or any unrelated transaction; (xi)
Holders' election, in any case instituted under chapter 11 of the Bankruptcy
Code, of the application of section 1111(b)(2) of the Bankruptcy Code; (xii) any
borrowing, use of cash Collateral or grant of security interest by Parent, as
debtor in possession, under sections 363 or 364 of the Bankruptcy Code; (xiii)
the disallowance of all or any portion of any of Holders' claims for repayment
of the Obligations under sections 502 or 506 of the Bankruptcy Code or
otherwise; or (xiv) any other fact or circumstance which might otherwise
constitute grounds at law or in equity for the discharge or release of Guarantor
from its Obligations hereunder, all whether Guarantor shall have had notice or
knowledge of any act or omission referred to in the foregoing clauses (i)
through (xiv) of this paragraph.
(d) The Guarantor shall, at its own expense, do all acts and
things required to cause any New Subsidiaries (as defined in the Purchase
Agreement), to become a party to a
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guaranty agreement in form and substance identical to this Guaranty Agreement
and to comply with the obligations of this Agreement.
5. Representations and Warranties.
Guarantor represents and warrants to Holders that: (a) it is a
corporation duly organized, validly existing and in good standing under the laws
of the jurisdiction of its incorporation and has full power, authority and legal
right to own its Assets and to transact the business in which it is engaged; (b)
it has full power, authority and legal right to execute and deliver and to
perform its Obligations under this Guaranty and has taken all necessary action
to authorize the guaranty hereunder on the terms and conditions of this Guaranty
and to authorize the execution, delivery and performance of this Guaranty; and
(c) this Guaranty has been duly executed and delivered by Guarantor and
constitutes the legal, valid and binding obligation of the Guarantor,
enforceable against Guarantor in accordance with its terms.
6. Security.
To secure payment of Guarantor's obligations under this Guaranty,
concurrently with the execution of this Guaranty, Guarantor is entering into the
Security Agreement granting to the Holders of the Notes, a first priority
perfected security interest (except as otherwise provided in the Security
Documents), in all tangible and intangible Assets wherever located in which
Guarantor now has or hereafter acquires any right or interest.
7. Termination.
This Guaranty shall remain in full force and effect until all of the
Obligations shall be finally and irrevocably paid in full. Payment of all of the
Obligations from time to time then Outstanding shall not operate as a
discontinuance of this Guaranty. To the extent that Parent makes a payment or
payments pursuant to the Notes, or Holders receive any proceeds of Collateral or
After Acquired Collateral securing the Obligations, which payment or receipt of
proceeds or any part thereof is subsequently invalidated, declared to be
fraudulent or preferential, set aside or required to be returned or repaid to
Parent or its trustee, receiver, debtor in possession or any other Person
(including, without limitation, any guarantor, under any insolvency or
bankruptcy Law, or equitable cause), then to the extent of such payment, return
or repayment, the Obligation or part thereof that has been paid, reduced or
satisfied by such amount shall be reinstated and continued in full force and
effect as of the date when such initial payment, reduction or satisfaction
occurred, and this Guaranty shall continue in full force notwithstanding any
contrary action that may have been taken by Holders in reliance upon such
payment, and any such contrary action so taken shall be without prejudice to
Holders' rights under this Guaranty and shall be deemed to have been conditioned
upon such payment having become final and irrevocable.
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8. Taxes.
All payments hereunder shall be made without any counterclaim or
set-off, free and clear of, and without reduction by reason of, any taxes,
levies, imposts, charges and withholdings, restrictions or conditions of any
nature other than any income or franchise taxes imposed on the Holders of the
Notes ("Taxes"), which are now or may hereafter be imposed, levied or assessed
by any country, political subdivision or taxing authority, all of which will be
for the account of and paid by Guarantor. If for any reason, any such reduction
is made or any Taxes are paid by Holders, Guarantor shall pay to Holders, such
additional amounts as may be necessary to ensure that Holders receive the same
net amount which it would have received had no reduction been made or Taxes
paid.
9. Miscellaneous.
(a) The terms "Parent" and "Guarantor" as used in this Guaranty
shall include: (i) any successor Person (as defined in the Purchase Agreement)
to which all or a substantial part of the Assets of Parent or Guarantor, as the
case may be, shall have been transferred and (ii) any other Person into or with
which of Parent or Guarantor, as the case may be, shall have been merged,
consolidated, reorganized, or absorbed. The term "Guarantor" shall include all
Subsidiaries of the Company (as that term is defined in the Purchase Agreement).
(b) Guarantor's obligation hereunder is to pay the Obligations in
full when due according to the Purchase Agreement, the Notes and the Ancillary
Agreements to the extent provided herein and shall not be affected by any stay
or extension of time for payment by Parent or Guarantor resulting from any
proceeding under the Bankruptcy Code or any similar law.
(c) Holders shall not by any act, delay, omission or otherwise be
deemed to have waived any of its remedies hereunder, and no waiver by Holders
shall be valid unless in writing and signed by the Required Holders and then
only to the extent therein set forth. A waiver by the Required Holders of any
right or remedy hereunder on any one occasion shall not be construed as a bar to
any right or remedy which Holders would otherwise have on any other occasion. No
course of dealing between Guarantor and Holders and no failure to exercise, nor
any delay in exercising on the part of Holders, any right, power or privilege
hereunder or under the Purchase Agreement, the Notes or the Ancillary Agreements
shall impair such right or remedy or operate as a waiver thereof nor shall any
single or partial exercise of any right, power or privilege hereunder preclude
any other or further exercise thereof or the exercise of any other right, power
or privilege. The rights and remedies herein provided are cumulative and may be
exercised singly or concurrently, and are not exclusive of any rights or
remedies of Holders provided by law.
(d) This Guaranty shall inure to the benefit of the Holders.
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(e) Section headings in this Guaranty are included herein for
convenience of reference only and shall not constitute a part of this Guaranty
for any other purpose or be given any substantive effect.
(f) Governing Law; Submission to Jurisdiction. This Agreement
shall be construed in accordance with, and governed by, the internal laws of the
State of New York as permitted by Section 5-401 of the New York General
Obligations Law (or any similar successor provision) without giving effect to
any choice of law rule that would cause the application of the laws of any
jurisdiction other than the State of New York. The Guarantor hereby irrevocably
and unconditionally:
(i) submit itself and its properties in any legal action
or proceeding relating to this Agreement and the Ancillary
Agreements to which it is a party, or for recognition and
enforcement of any judgment in respect thereof, to the general
jurisdiction of the Courts of the State of New York, the courts
of the United States of America for the Southern District of New
York, and appellate courts of any thereof;
(ii) consents that any such action or proceeding may be
brought in such courts and waives any objection that it may now
or hereafter have to the venue of any such action or proceeding
in any such court or that such action or proceeding was brought
in an inconvenient court and agrees not to plead or claim the
same;
(iii) agrees that service of process in any such action or
proceeding may be effected by mailing a copy thereof by
registered or certified mail (or any substantially similar form
of mail), postage prepaid, to it at its address set forth in or
determined pursuant to Section 10 or at such other address of
which the Holders shall have been notified pursuant thereto;
(iv) waives, to the maximum extent not prohibited by Law,
any right it may have to claim or recover in any legal action or
proceeding referred to in this Section 9(f) any punitive or
exemplary damages and any damages which are not proximately
caused by or the reasonably foreseeable result of the breach
which is the subject of such action or proceeding;
The Guarantor hereby acknowledges that:
(v) it has been advised by counsel in the negotiation,
execution and delivery of this Agreement and the Ancillary
Agreements;
(vi) the Holders do not have any fiduciary relationship
with or duty to the Guarantor arising out of or in connection
with this Agreement, or the Ancillary Agreements; and
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(vii) no joint venture or partnership exists between the
Holders, on the one hand, and the Guarantor, on the other hand,
and the relationship of the Guarantor and the Holders is that of,
inter alia, debtor and creditor.
THE GUARANTOR, EACH SUBSIDIARY OF THE GUARANTOR AND THE HOLDERS HEREBY
IRREVOCABLY AND UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY LEGAL ACTION OR
PROCEEDING RELATING TO THIS AGREEMENT, THE ANCILLARY AGREEMENTS AND FOR ANY
COUNTERCLAIM THEREIN.
THIS AGREEMENT AND THE ANCILLARY AGREEMENTS REPRESENT THE FINAL
AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.
THERE ARE NO UNWRITTEN ORAL AGREEMENTS OF THE PARTIES.
THE GUARANTOR WILL CAUSE EACH NEW SUBSIDIARY TO TAKE SUCH ACTION AS IS
REQUIRED TO CONSENT TO, AND BE BOUND BY, THE PROVISIONS OF THIS SECTION 9(F) IN
THEIR ENTIRETY.
(g) Guarantor agrees that Holders shall have the right to proceed
against Guarantor in a court in any location to enable Agent to enforce a
judgment or other court order entered in favor of Holders. Guarantor waives any
objection that it may have to the location of the court in which a Holder has
commenced a proceeding described in this Section 9(g).
(h) Any provision of this Guaranty which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition, and any such prohibition or unenforceability
in any jurisdiction shall not invalidate or render unenforceable such provision
in any other jurisdiction.
(i) This Guaranty shall in all respects be governed by, and
construed and enforced in accordance with, the laws of the State of New York,
without giving effect to any choice of law or conflict of law rules or
provisions (whether of the State of New York or any other jurisdiction) that
would cause the application of the laws of any jurisdiction other than the State
of New York, except that the filing, perfection, effect of perfection and
enforcement of security interests and Liens in other jurisdictions shall be
governed by the laws of the applicable jurisdictions in accordance with the UCC.
(j) Guarantor hereby represents and warrants to Holders that
Guarantor now has and shall continue to have independent means of obtaining
information concerning the affairs, financial condition and business of Parent.
Holders shall not have any duty or responsibility to provide Guarantor with any
credit or other information concerning the affairs, financial condition or
business of Parent which may come into Holders' possession.
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10. Notices. All notices, requests, demands, waivers and other
communication required or permitted to be given under this Guaranty shall be in
writing and shall be deemed to have been duly given if (a) delivered personally,
(b) mailed by first-class, certified mail, return receipt, postage prepaid, or
(c) sent by next-day or overnight mail or delivery.
If to Guarantor:
PerImmune, Inc.
1330 Piccard Drive
Rockville, Maryland 20850
Attn: Michael G. Hanna
Fax Number: (425) 392-2992
Confirm Number: (425) 557-1894
and
Morrison & Foerster LLP
1290 Avenue of the Americas
New York, New York 10104
Attn: Joseph W. Bartlett
Fax Number: (212) 468-7900
Confirm Number: (212) 468-8240
If to Holders:
300 First Stamford Place
Stamford, Connecticut
Attention: Michael A. Graves
Fax Number: (203) 862-8601
Confirm Number: (203) 863-6224
with a copy, which will
not constitute notice to:
Reboul, MacMurray, Hewitt, Maynard & Kristol
45 Rockefeller Plaza
New York, New York
Attn: Karen Wiedemann
Fax Number: (212) 841-5725
Confirm Number: (212) 841-5781
or, in each case, at such other address as may be specified in writing to the
other parties.
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All such notices, requests, demands, waivers and other communications shall be
deemed to have been received (a) if by personal delivery, on the date after such
delivery, (b) if by certified mail, on the third Business Day after the mailing
thereof, and (c) if by next-day or overnight mail or delivery, on the day
delivered.
11. Waivers.
(a) GUARANTOR WAIVES THE BENEFIT OF ALL VALUATION, APPRAISAL AND
EXEMPTION LAWS.
(b) IN THE EVENT OF AN EVENT OF DEFAULT, DEFAULT, OR ANY EVENT THAT WITH
THE LAPSE OF TIME OR GIVING OF NOTICE, OR BOTH, WOULD CONSTITUTE AN EVENT OF
DEFAULT UNDER PURCHASE AGREEMENT, THE NOTES, OR ANY OF THE ANCILLARY AGREEMENTS,
GUARANTOR HEREBY WAIVES TO THE FULL EXTENT PERMITTED BY APPLICABLE LAW ALL
RIGHTS TO NOTICE AND HEARING OF ANY KIND PRIOR TO THE EXERCISE BY HOLDERS OF
THEIR RIGHTS TO REPOSSESS THE COLLATERAL OR AFTER ACQUIRED COLLATERAL WITHOUT
JUDICIAL PROCESS OR TO REPLEVY, ATTACH OR LEVY UPON THE COLLATERAL WITHOUT PRIOR
NOTICE OR HEARING. GUARANTOR ACKNOWLEDGES THAT IT HAS BEEN ADVISED BY COUNSEL OF
ITS CHOICE WITH RESPECT TO THIS TRANSACTION AND THIS GUARANTY.
(c) GUARANTOR HEREBY WAIVES, TO THE EXTENT PERMITTED BY LAW, TRIAL BY
JURY, ANY OBJECTION BASED ON FORUM NON CONVENIENS, ANY OBJECTION TO VENUE OF ANY
ACTION INSTITUTED HEREUNDER AND WAIVES ANY BOND OR SURETY OR SECURITY UPON SUCH
BOND WHICH MIGHT, BUT FOR THIS WAIVER, BE REQUIRED OF HOLDERS.
(d) TO THE EXTENT PERMITTED BY LAW, GUARANTOR HEREBY WAIVES PERSONAL
SERVICE OF ANY AND ALL PROCESS UPON IT AND CONSENTS THAT SUCH SERVICE OF PROCESS
BE MADE BY CERTIFIED MAIL (WITH RETURN RECEIPT) DIRECTED TO IT AT ITS ADDRESS
SET FORTH IN SECTION 10 HEREOF, AND SERVICE SO MADE SHALL BE DEEMED TO BE
COMPLETED THE THIRD BUSINESS DAY AFTER THE SAME SHALL HAVE BEEN DEPOSITED IN THE
U.S. MAILS, POSTAGE PREPAID. GUARANTOR HEREBY WAIVES ANY RIGHT TO REQUIRE A
PROCEEDING FIRST OR CONCURRENTLY AGAINST PARENT OR RIGHT TO REQUIRE THE PRIOR OR
CONCURRENT DISPOSITION OF THE ASSETS OF PARENT TO MEET ITS SECURED OBLIGATIONS
AND COVENANTS THAT THIS GUARANTY WILL NOT BE DISCHARGED EXCEPT BY COMPLETE
PERFORMANCE OF THE OBLIGATIONS.
* * * * *
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IN WITNESS WHEREOF, this Guaranty has been executed as of the day first
written above.
PERIMMUNE, INC.
--------------------------
By: Simon R. McKenzie
Its: Chief Executive Officer
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GUARANTY
THIS GUARANTY ("Guaranty") dated as of August 25, 1998, by PERIMMUNE
HOLDINGS, INC., a Delaware corporation having its address at 1330 Piccard Drive,
Rockville, Maryland 20850 ("Guarantor") in favor of the holders and their
successors and assigns (collectively, the "Holders"), of the Notes of the
Company (the "Notes") issued pursuant to that certain Securities Purchase
Agreement, dated as of the date hereof, by and among Intracel Corporation, the
parent company of the Guarantor ("Parent") and the parties thereto (the
"Purchase Agreement"). As used herein, all capitalized terms not otherwise
defined herein shall have the meanings set forth in the Purchase Agreement.
WHEREAS, Guarantor and Parent are to be liable for the obligations of
Parent under the Purchase Agreement, the Notes and the Ancillary Agreements (the
"Obligations"); and
WHEREAS, Guarantor, being a wholly-owned subsidiary of Parent, shall
derive substantial benefit and advantage from the financial accommodations to
Parent provided by the Notes, and it shall be to Guarantor's direct interest and
economic benefit to assist Parent in procuring the Note financing;
NOW, THEREFORE, for and in consideration of the premises and to induce
Holders to purchase the Notes, and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, Guarantor hereby
agrees as follows:
1. Guaranty of Payment.
(a) Guarantor hereby unconditionally guarantees the full and
prompt payment, when due, whether at maturity or by reason of acceleration or
otherwise and at all times thereafter on demand, of any and all of the
Obligations.
(b) Guarantor acknowledges that valuable consideration supports
this Guaranty (including, without limitation, the consideration set forth in the
recitals above as well as any other financial accommodation, whether heretofore
or hereafter made to Parent, any extension, renewal or replacement of any of the
Obligations, any forbearance with respect to any of the Obligations or
otherwise, and any other valuable consideration).
(c) All payments under this Guaranty shall be made in United
States currency and in the same manner as provided for the Obligations.
(d) The term "Collateral" and "After Acquired Collateral" shall
have the meanings ascribed to such terms in the security agreement, dated as of
the date hereof by and among Parent, Guarantor and the Holders (the "Security
Agreement") and the Intellectual Property Security Agreement dated as of the
date hereof (the "Intellectual Property Security Agreement").
364
2. Holders' Costs and Expenses.
Guarantor shall pay on demand, if not paid by Parent, all costs and
expenses of every kind incurred by Holders (a) in enforcing this Guaranty, (b)
in collecting any of the Obligations from Parent or Guarantor, (c) in realizing
upon or protecting any Collateral or After Acquired Collateral for this Guaranty
or for payment of any of the Obligations; and (d) for any other purpose related
to the Obligations or this Guaranty. "Costs and expenses" as used in the
preceding sentence shall include, without limitation, reasonable attorneys' fees
incurred by Holders in retaining counsel for advice, suit, appeal, any
insolvency or other proceedings under the United States Bankruptcy Code, 11
U.S.C. Sections 101-1330 (the "Bankruptcy Code") or otherwise, or for any
purpose specified in the preceding sentence.
3. Nature of Guaranty: Continuing, Absolute and Unconditional.
(a) This Guaranty is and is intended to be a continuing guaranty
of payment of the Obligations, independent of and in addition to any other
guaranty, endorsement, Collateral or other agreement held by Holders therefor or
with respect thereto, whether furnished by Guarantor or another Person. The
liability of Guarantor to repay the Obligations hereunder shall be unlimited.
Guarantor shall have no right of subrogation, indemnification, contribution,
reimbursement or other payment with respect to any payments made by Guarantor
hereunder, and hereby waives any benefit of, and any right to participate in,
any security or Collateral given to Holders to secure payment of the
Obligations, and Guarantor shall not take any action to enforce any
indebtedness, liabilities or obligations of Parent to Guarantor prior to the
Obligations being paid in full; provided that in the event of the bankruptcy or
insolvency of Parent, Holders shall be entitled, notwithstanding the foregoing,
to file in the name of Guarantor or in its own name a claim for any and all
indebtedness, liabilities and obligations owing to Guarantor by Parent, to vote
such claim and to apply the proceeds of any such claim to the Obligations.
(b) For the further security of the Holders and without in any
way diminishing the liability of Guarantor hereunder, following the occurrence
of a Default or an Event of Default (as defined in the Notes) or any event that
with the lapse of time, or the giving of notice, or both, would constitute an
Event of Default, all debts and liabilities, present or future of Parent to
Guarantor and all monies received from Borrower or for its account by Guarantor
shall be received in trust for Holders and forthwith upon receipt shall be paid
over to Holders until all of the Obligations have been paid in full. This
assignment and postponement is independent of and severable from this Guaranty
and shall remain in full force and effect whether Guarantor is liable for any
amount under this Guaranty.
(c) This Guaranty is absolute and unconditional and shall not be
changed or affected by any representation, oral agreement, act or thing
whatsoever, except as herein provided. This Guaranty is intended by Guarantor to
be the final, complete and exclusive expression of the guaranty agreement
between Guarantor and the Holders. No modification or amendment of any provision
of this Guaranty shall be effective unless in writing and signed by the Required
Holders.
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(d) If at any time all or any part of any payment theretofore
applied by Holders to any of the Obligations is or must be rescinded or returned
by Holders for any reason whatsoever (including, without limitation, the
insolvency, bankruptcy or reorganization of Parent), such Obligations shall, for
the purposes of this Guaranty, to the extent that such payment is or must be
rescinded or returned, be deemed to have continued in existence, notwithstanding
such application by Holders, and this Guaranty shall continue to be effective or
be reinstated, as the case may be, as to such Obligations, all as though such
application by Holders had not been made.
4. Certain Rights and Secured Obligations.
(a) Guarantor authorizes Holders, without notice, demand or any
reservation of rights against Guarantor and without affecting Guarantor's
obligations hereunder, from time to time: (i) to renew, extend, increase,
accelerate or otherwise change the time for payment of, the terms of or the
interest on the Obligations or any part thereof or grant other indulgences to
Parent or others; (ii) to accept from any Person and hold collateral (including
the Collateral (as defined in the Security Agreement and the Intellectual
Property Security Agreement)) for the payment of the Obligations or any part
thereof, and to modify, exchange, enforce or refrain from enforcing, or release,
compromise, settle, waive, subordinate or surrender, with or without
consideration, such Collateral or any part thereof; (iii) to accept and hold any
endorsement or guaranty of payment of the Obligations or any part thereof, and
to discharge, release or substitute any such obligation of any such endorser or
guarantor, or any Person who has given any security interest in any Collateral
as security for the payment of the Obligations or any part thereof, or any other
Person in any way obligated to pay the Obligations or any part thereof, and to
enforce or refrain from enforcing, or compromise or modify, the terms of any
obligation of any such endorser, guarantor, or Person; (iv) to dispose of any
and all Collateral securing the Obligations in any manner as Holders, in their
sole discretion, may deem appropriate, and to direct the order or manner of such
disposition and the enforcement of any and all endorsements and guaranties
relating to the Obligations or any part thereof as Holders in their sole
discretion may determine; (v) except as otherwise provided in the Purchase
Agreement or the Notes, to determine the manner, amount and time of application
of payments and credits, if any, to be made on all or any part of any component
or components of the Obligations (whether principal, interest, premium, fees,
costs, and expenses or otherwise) including, without limitation, the application
of payments received from any source to the payment of Debt other than the
Obligations even though Holders might lawfully have elected to apply such
payments to the Obligations and not to obligations that are not covered by this
Guaranty; and (vi) to take advantage or refrain from taking advantage of any
security or accept or make or refrain from accepting or making any compositions
or arrangements when and in such manner as Holders, in their sole discretion,
may deem appropriate and generally do or refrain from doing any act or thing
which might otherwise, at law or in equity, release the liability of Guarantor
as a guarantor or surety in whole or in part, and in no case shall Holders be
responsible or shall Guarantor be released in whole or in part for any act or
omission in connection with Holders having sold any security for less than its
value.
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(b) If any Default or Event of Default, or event that with the
lapse of time, or the giving of notice, or both, would constitute an Event of
Default, shall be made in the payment of any of the Obligations and any grace
period has expired with respect thereto, Guarantor shall pay the same in full to
the extent hereinafter provided: (i) without deduction by reason of any set-off,
defense (other than payment) or counterclaim of Parent; (ii) without requiring
presentment, protest or notice of nonpayment or notice of default to Guarantor,
to Parent or to any other Person; (iii) without demand upon Parent for payment
or proof of such demand or filing of claims with a court in the event of
receivership, bankruptcy or reorganization of Parent; (iv) without requiring
Holders to resort first or concurrently to Parent (this Guaranty being a
guaranty of payment and not of collection) or to any other guaranty or any
Collateral which Parent may hold; (v) without requiring notice of acceptance
hereof or assent hereto by Holders; and (vi) without requiring notice that any
of the Obligations has been incurred, extended or continued or of the reliance
by Holders upon this Guaranty all of which Guarantor hereby waives.
(c) Guarantor's obligation hereunder shall not be affected by any
of the following, all of which Guarantor hereby waives: (i) any failure to
perfect or continue the perfection of any security interest in or other Lien on
any Collateral or After Acquired Collateral securing payment of any of the
Obligations or Guarantor's obligation hereunder; (ii) the invalidity,
unenforceability, propriety of manner of enforcement of, or loss or change in
priority of any such security interest or other Lien or guaranty of the
Obligations; (iii) any failure to protect, preserve or insure any such
Collateral or After Acquired Collateral; (iv) failure of Guarantor to receive
notice of any intended disposition of such Collateral or After Acquired
Collateral; (v) any defense arising by reason of the cessation for any reason
whatsoever of liability of Parent (including, without limitation, any failure,
negligence or omission by Holders in enforcing their claims against Parent);
(vi) any release, settlement or compromise of any obligation of Parent; (vii)
the invalidity or unenforceability of any of the Obligations; (viii) any change
of ownership of Parent or insolvency, bankruptcy or any other change in the
legal status of Parent; (ix) any change in, or imposition of, any Law which
impairs or might impair, delay or in any way affect the validity or
enforceability or the payment when due of the Obligations; (x) the existence of
any claim, set-off or other right that Guarantor may have at any time against
Holders or Parent in connection herewith or any unrelated transaction; (xi)
Holders' election, in any case instituted under chapter 11 of the Bankruptcy
Code, of the application of section 1111(b)(2) of the Bankruptcy Code; (xii) any
borrowing, use of cash Collateral or grant of security interest by Parent, as
debtor in possession, under sections 363 or 364 of the Bankruptcy Code; (xiii)
the disallowance of all or any portion of any of Holders' claims for repayment
of the Obligations under sections 502 or 506 of the Bankruptcy Code or
otherwise; or (xiv) any other fact or circumstance which might otherwise
constitute grounds at law or in equity for the discharge or release of Guarantor
from its Obligations hereunder, all whether Guarantor shall have had notice or
knowledge of any act or omission referred to in the foregoing clauses (i)
through (xiv) of this paragraph.
(d) The Guarantor shall, at its own expense, do all acts and
things required to cause any New Subsidiaries (as defined in the Purchase
Agreement), to become a party to a
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guaranty agreement in form and substance identical to this Guaranty Agreement
and to comply with the obligations of this Agreement.
5. Representations and Warranties.
Guarantor represents and warrants to Holders that: (a) it is a
corporation duly organized, validly existing and in good standing under the laws
of the jurisdiction of its incorporation and has full power, authority and legal
right to own its Assets and to transact the business in which it is engaged; (b)
it has full power, authority and legal right to execute and deliver and to
perform its Obligations under this Guaranty and has taken all necessary action
to authorize the guaranty hereunder on the terms and conditions of this Guaranty
and to authorize the execution, delivery and performance of this Guaranty; and
(c) this Guaranty has been duly executed and delivered by Guarantor and
constitutes the legal, valid and binding obligation of the Guarantor,
enforceable against Guarantor in accordance with its terms.
6. Security.
To secure payment of Guarantor's obligations under this Guaranty,
concurrently with the execution of this Guaranty, Guarantor is entering into the
Security Agreement granting to the Holders of the Notes, a first priority
perfected security interest (except as otherwise provided in the Security
Documents), in all tangible and intangible Assets wherever located in which
Guarantor now has or hereafter acquires any right or interest.
7. Termination.
This Guaranty shall remain in full force and effect until all of the
Obligations shall be finally and irrevocably paid in full. Payment of all of the
Obligations from time to time then Outstanding shall not operate as a
discontinuance of this Guaranty. To the extent that Parent makes a payment or
payments pursuant to the Notes, or Holders receive any proceeds of Collateral or
After Acquired Collateral securing the Obligations, which payment or receipt of
proceeds or any part thereof is subsequently invalidated, declared to be
fraudulent or preferential, set aside or required to be returned or repaid to
Parent or its trustee, receiver, debtor in possession or any other Person
(including, without limitation, any guarantor, under any insolvency or
bankruptcy Law, or equitable cause), then to the extent of such payment, return
or repayment, the Obligation or part thereof that has been paid, reduced or
satisfied by such amount shall be reinstated and continued in full force and
effect as of the date when such initial payment, reduction or satisfaction
occurred, and this Guaranty shall continue in full force notwithstanding any
contrary action that may have been taken by Holders in reliance upon such
payment, and any such contrary action so taken shall be without prejudice to
Holders' rights under this Guaranty and shall be deemed to have been conditioned
upon such payment having become final and irrevocable.
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8. Taxes.
All payments hereunder shall be made without any counterclaim or
set-off, free and clear of, and without reduction by reason of, any taxes,
levies, imposts, charges and withholdings, restrictions or conditions of any
nature other than any income or franchise taxes imposed on the Holders of the
Notes ("Taxes"), which are now or may hereafter be imposed, levied or assessed
by any country, political subdivision or taxing authority, all of which will be
for the account of and paid by Guarantor. If for any reason, any such reduction
is made or any Taxes are paid by Holders, Guarantor shall pay to Holders, such
additional amounts as may be necessary to ensure that Holders receive the same
net amount which it would have received had no reduction been made or Taxes
paid.
9. Miscellaneous.
(a) The terms "Parent" and "Guarantor" as used in this Guaranty
shall include: (i) any successor Person (as defined in the Purchase Agreement)
to which all or a substantial part of the Assets of Parent or Guarantor, as the
case may be, shall have been transferred and (ii) any other Person into or with
which of Parent or Guarantor, as the case may be, shall have been merged,
consolidated, reorganized, or absorbed. The term "Guarantor" shall include all
Subsidiaries of the Company (as that term is defined in the Purchase Agreement).
(b) Guarantor's obligation hereunder is to pay the Obligations in
full when due according to the Purchase Agreement, the Notes and the Ancillary
Agreements to the extent provided herein and shall not be affected by any stay
or extension of time for payment by Parent or Guarantor resulting from any
proceeding under the Bankruptcy Code or any similar law.
(c) Holders shall not by any act, delay, omission or otherwise be
deemed to have waived any of its remedies hereunder, and no waiver by Holders
shall be valid unless in writing and signed by the Required Holders and then
only to the extent therein set forth. A waiver by the Required Holders of any
right or remedy hereunder on any one occasion shall not be construed as a bar to
any right or remedy which Holders would otherwise have on any other occasion. No
course of dealing between Guarantor and Holders and no failure to exercise, nor
any delay in exercising on the part of Holders, any right, power or privilege
hereunder or under the Purchase Agreement, the Notes or the Ancillary Agreements
shall impair such right or remedy or operate as a waiver thereof nor shall any
single or partial exercise of any right, power or privilege hereunder preclude
any other or further exercise thereof or the exercise of any other right, power
or privilege. The rights and remedies herein provided are cumulative and may be
exercised singly or concurrently, and are not exclusive of any rights or
remedies of Holders provided by law.
(d) This Guaranty shall inure to the benefit of the Holders.
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(e) Section headings in this Guaranty are included herein for
convenience of reference only and shall not constitute a part of this Guaranty
for any other purpose or be given any substantive effect.
(f) Governing Law; Submission to Jurisdiction. This Agreement
shall be construed in accordance with, and governed by, the internal laws of the
State of New York as permitted by Section 5-401 of the New York General
Obligations Law (or any similar successor provision) without giving effect to
any choice of law rule that would cause the application of the laws of any
jurisdiction other than the State of New York. The Guarantor hereby irrevocably
and unconditionally:
(i) submit itself and its properties in any legal action
or proceeding relating to this Agreement and the Ancillary
Agreements to which it is a party, or for recognition and
enforcement of any judgment in respect thereof, to the general
jurisdiction of the Courts of the State of New York, the courts
of the United States of America for the Southern District of New
York, and appellate courts of any thereof;
(ii) consents that any such action or proceeding may be
brought in such courts and waives any objection that it may now
or hereafter have to the venue of any such action or proceeding
in any such court or that such action or proceeding was brought
in an inconvenient court and agrees not to plead or claim the
same;
(iii) agrees that service of process in any such action or
proceeding may be effected by mailing a copy thereof by
registered or certified mail (or any substantially similar form
of mail), postage prepaid, to it at its address set forth in or
determined pursuant to Section 10 or at such other address of
which the Holders shall have been notified pursuant thereto;
(iv) waives, to the maximum extent not prohibited by Law,
any right it may have to claim or recover in any legal action or
proceeding referred to in this Section 9(f) any punitive or
exemplary damages and any damages which are not proximately
caused by or the reasonably foreseeable result of the breach
which is the subject of such action or proceeding;
The Guarantor hereby acknowledges that:
(v) it has been advised by counsel in the negotiation,
execution and delivery of this Agreement and the Ancillary
Agreements;
(vi) the Holders do not have any fiduciary relationship
with or duty to the Guarantor arising out of or in connection
with this Agreement, or the Ancillary Agreements; and
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(vii) no joint venture or partnership exists between the
Holders, on the one hand, and the Guarantor, on the other hand,
and the relationship of the Guarantor and the Holders is that of,
inter alia, debtor and creditor.
THE GUARANTOR, EACH SUBSIDIARY OF THE GUARANTOR AND THE HOLDERS HEREBY
IRREVOCABLY AND UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY LEGAL ACTION OR
PROCEEDING RELATING TO THIS AGREEMENT, THE ANCILLARY AGREEMENTS AND FOR ANY
COUNTERCLAIM THEREIN.
THIS AGREEMENT AND THE ANCILLARY AGREEMENTS REPRESENT THE FINAL
AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.
THERE ARE NO UNWRITTEN ORAL AGREEMENTS OF THE PARTIES.
THE GUARANTOR WILL CAUSE EACH NEW SUBSIDIARY TO TAKE SUCH ACTION AS IS
REQUIRED TO CONSENT TO, AND BE BOUND BY, THE PROVISIONS OF THIS SECTION 9(F) IN
THEIR ENTIRETY.
(g) Guarantor agrees that Holders shall have the right to proceed
against Guarantor in a court in any location to enable Agent to enforce a
judgment or other court order entered in favor of Holders. Guarantor waives any
objection that it may have to the location of the court in which a Holder has
commenced a proceeding described in this Section 9(g).
(h) Any provision of this Guaranty which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition, and any such prohibition or unenforceability
in any jurisdiction shall not invalidate or render unenforceable such provision
in any other jurisdiction.
(i) This Guaranty shall in all respects be governed by, and
construed and enforced in accordance with, the laws of the State of New York,
without giving effect to any choice of law or conflict of law rules or
provisions (whether of the State of New York or any other jurisdiction) that
would cause the application of the laws of any jurisdiction other than the State
of New York, except that the filing, perfection, effect of perfection and
enforcement of security interests and Liens in other jurisdictions shall be
governed by the laws of the applicable jurisdictions in accordance with the UCC.
(j) Guarantor hereby represents and warrants to Holders that
Guarantor now has and shall continue to have independent means of obtaining
information concerning the affairs, financial condition and business of Parent.
Holders shall not have any duty or responsibility to provide Guarantor with any
credit or other information concerning the affairs, financial condition or
business of Parent which may come into Holders' possession.
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10. Notices. All notices, requests, demands, waivers and other
communication required or permitted to be given under this Guaranty shall be in
writing and shall be deemed to have been duly given if (a) delivered personally,
(b) mailed by first-class, certified mail, return receipt, postage prepaid, or
(c) sent by next-day or overnight mail or delivery.
If to Guarantor:
PerImmune Holdings, Inc.
1330 Piccard Drive
Rockville, Maryland 20850
Attn: Simon R. McKenzie
Fax Number: (425) 392-2992
Confirm Number: (425) 557-1894
and
Morrison & Foerster LLP
1290 Avenue of the Americas
New York, New York 10104
Attn: Joseph W. Bartlett
Fax Number: (212) 468-7900
Confirm Number: (212) 468-8240
If to Holders:
300 First Stamford Place
Stamford, Connecticut
Attention: Michael A. Graves
Fax Number: (203) 862-8601
Confirm Number: (203) 863-6224
with a copy, which will
not constitute notice to:
Reboul, MacMurray, Hewitt, Maynard & Kristol
45 Rockefeller Plaza
New York, New York
Attn: Karen Wiedemann
Fax Number: (212) 841-5725
Confirm Number: (212) 841-5781
or, in each case, at such other address as may be specified in writing to the
other parties.
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All such notices, requests, demands, waivers and other communications shall be
deemed to have been received (a) if by personal delivery, on the date after such
delivery, (b) if by certified mail, on the third Business Day after the mailing
thereof, and (c) if by next-day or overnight mail or delivery, on the day
delivered.
11. Waivers.
(a) GUARANTOR WAIVES THE BENEFIT OF ALL VALUATION, APPRAISAL AND
EXEMPTION LAWS.
(b) IN THE EVENT OF AN EVENT OF DEFAULT, DEFAULT, OR ANY EVENT THAT WITH
THE LAPSE OF TIME OR GIVING OF NOTICE, OR BOTH, WOULD CONSTITUTE AN EVENT OF
DEFAULT UNDER PURCHASE AGREEMENT, THE NOTES, OR ANY OF THE ANCILLARY AGREEMENTS,
GUARANTOR HEREBY WAIVES TO THE FULL EXTENT PERMITTED BY APPLICABLE LAW ALL
RIGHTS TO NOTICE AND HEARING OF ANY KIND PRIOR TO THE EXERCISE BY HOLDERS OF
THEIR RIGHTS TO REPOSSESS THE COLLATERAL OR AFTER ACQUIRED COLLATERAL WITHOUT
JUDICIAL PROCESS OR TO REPLEVY, ATTACH OR LEVY UPON THE COLLATERAL WITHOUT PRIOR
NOTICE OR HEARING. GUARANTOR ACKNOWLEDGES THAT IT HAS BEEN ADVISED BY COUNSEL OF
ITS CHOICE WITH RESPECT TO THIS TRANSACTION AND THIS GUARANTY.
(c) GUARANTOR HEREBY WAIVES, TO THE EXTENT PERMITTED BY LAW, TRIAL BY
JURY, ANY OBJECTION BASED ON FORUM NON CONVENIENS, ANY OBJECTION TO VENUE OF ANY
ACTION INSTITUTED HEREUNDER AND WAIVES ANY BOND OR SURETY OR SECURITY UPON SUCH
BOND WHICH MIGHT, BUT FOR THIS WAIVER, BE REQUIRED OF HOLDERS.
(d) TO THE EXTENT PERMITTED BY LAW, GUARANTOR HEREBY WAIVES PERSONAL
SERVICE OF ANY AND ALL PROCESS UPON IT AND CONSENTS THAT SUCH SERVICE OF PROCESS
BE MADE BY CERTIFIED MAIL (WITH RETURN RECEIPT) DIRECTED TO IT AT ITS ADDRESS
SET FORTH IN SECTION 10 HEREOF, AND SERVICE SO MADE SHALL BE DEEMED TO BE
COMPLETED THE THIRD BUSINESS DAY AFTER THE SAME SHALL HAVE BEEN DEPOSITED IN THE
U.S. MAILS, POSTAGE PREPAID. GUARANTOR HEREBY WAIVES ANY RIGHT TO REQUIRE A
PROCEEDING FIRST OR CONCURRENTLY AGAINST PARENT OR RIGHT TO REQUIRE THE PRIOR OR
CONCURRENT DISPOSITION OF THE ASSETS OF PARENT TO MEET ITS SECURED OBLIGATIONS
AND COVENANTS THAT THIS GUARANTY WILL NOT BE DISCHARGED EXCEPT BY COMPLETE
PERFORMANCE OF THE OBLIGATIONS.
* * * * *
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IN WITNESS WHEREOF, this Guaranty has been executed as of the day first
written above.
PERIMMUNE HOLDINGS, INC.
--------------------------
By: Simon R. McKenzie
Its: Chief Executive Officer
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EXHIBITS I
AGREEMENT WITH CORESTATES ENTERPRISE FUND
375
Exhibit 10.35
AGREEMENT
AGREEMENT dated as of August 20, 1998 by and between Intracel
Corporation, a Delaware corporation (the "Company") and First Union National
Bank (the successor-in-interest to CoreStates Enterprise Fund, a division of
CoreStates Bank, N.A.) (the "Noteholder").
WHEREAS, the Noteholder currently owns beneficially and of record (i) a
secured promissory note of the Company, dated June 11, 1996, in the original
principal amount of $4,000,000 (together with any "payment-in-kind" notes issued
pursuant thereto, in the aggregate, the "Note"), (ii) the Company's Series A-III
Common Stock Warrant, dated June 11, 1996 (the "Warrant"), to purchase up to
318,148 shares of the Company's Common Stock, $.0001 par value per share (the
"Common Stock"); and (iii) 318,148 shares of Common Stock.
WHEREAS, the Company is in the process of negotiating the terms of a
proposed financing transaction (the "Northstar Financing") with Northstar
Advantage High Total Return Fund and/or affiliates thereof ("Northstar"); and
WHEREAS, simultaneously with the closing of the Northstar Financing (the
"Northstar Closing"), the Company desires to repay the Note, to direct the
transfer of a portion of the Warrant representing the right to acquire 238,610
shares of Common Stock which may be acquired under the Warrant (the portion of
the Warrant to be transferred is hereinafter referred to as the "Securities") to
Northstar and to terminate all of the liens, pledges and security interests (the
"Security Interests") granted to the Noteholder in the assets and securities of
the Company in furtherance of the Security Documents (as defined under the Note)
in consideration for payment to the Noteholder of the amount specified herein to
be paid therefor (the "Purchase Price"), and the Noteholder desires that the
Note be so repaid, that the Securities be transferred and that the Security
Interests be so terminated, all on the terms and conditions hereinafter set
forth.
NOW, THEREFORE, in consideration of the foregoing premises and the
mutual agreements contained herein, intending to be legally bound hereby, the
parties hereto agree as follows:
1. Cancellation of the Securities; Payment of Purchase Price;
Termination of Security Interests.
1.1 Notice of Northstar Closing and Note Payoff Amount. The Company
hereby notifies the Noteholder that the closing (the "Closing") of the
transactions contemplated hereby shall occur (the "Closing Date") on August 21,
1998. The Noteholder has calculated the amount of principal and accrued interest
that will be due and owing under the Note and all other amounts due and payable
under the Note and the Note and Series A-III Warrant Purchase Agreement dated as
of June 11, 1996 between the Company and the Noteholder, as amended to date (the
"Original Agreement") as of the Closing Date (the "Purchase Price") and a copy
of the pay-off letter setting forth such calculation is attached hereto as
Exhibit A.
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1.2 Cancellation of the Note and Security Interests and Transfer of
Securities. Upon receipt in immediately available funds of the Purchase Price,
subject to Paragraph 1.5 hereof: (a) the Noteholder shall, and hereby agrees to,
cancel the Note (subject to Paragraph 4.4 hereof), terminate the Security
Interests and sell and transfer all of its right, title and interest, legal and
equitable, in and to the Securities to Northstar, and the Company hereby agrees
to the foregoing; and
(b) all of the Noteholder's right, title and interest in, and lien on, the
property and assets of the Company and each of its Subsidiaries in which it was
granted a security interest pursuant to the Note shall be released and
terminated and all of the Company's obligations under the Note, including any
obligation under Section 15 of the Note, shall be deemed satisfied in full.
1.3 Deliveries at the Closing. (a) On the Closing Date, the Noteholder
shall deliver to counsel to Northstar in escrow pending the receipt of the
Purchase Price, (i) the certificate representing the Warrant to the Company,
together with such assignment documents attached thereto as shall be necessary
to transfer the Securities to Northstar; and (ii) the Note, and (B) such
executed releases and UCC-3 and other termination statements (collectively, the
"Termination Statements") as the Company reasonably deems sufficient to
terminate the Security Interests under the Uniform Commercial Code and
otherwise.
(b) On the Closing Date, the Company shall deliver (i) payment of the
Purchase Price by delivery of immediately available funds to Noteholder in the
amount of the Purchase Price and (ii) a new warrant certificate (the
"Replacement Warrant") registered in the name of the Noteholder evidencing the
right, which is not being purchased in connection with this Agreement, to
acquire 79,538 shares of the Company's Common Stock. The Replacement Warrant
shall embody the same terms and conditions of the Warrant other than the number
of shares of Common Stock with which it is exercisable.
1.4 Closing. The Closing with respect to the transactions provided for in
this Agreement shall be held at the offices of Morrison & Foerster LLP, 1290
Avenue of the Americas, New York, New York 10104 on the Closing Date.
1.5 Closing Date. The Noteholder and the Company hereby acknowledge and
agree that the obligation of the Noteholder to accept the Purchase Price and
perform its obligations under this agreement is contingent upon the Closing Date
taking place on or before August 21, 1998. The parties hereby agree that time is
of the essence hereunder. If the Noteholder shall not have received the Purchase
Price on or before August 21, 1998, the Noteholder shall be under no obligation
to perform its obligations hereunder.
2. Representations and Warranties of the Noteholder. The Noteholder hereby
represents and warrants as follows:
2.1 Ownership of Securities. The Noteholder has good and marketable title
to the Securities and the Note. Upon the consummation of the transactions
contemplated hereby, the Noteholder will have transferred to the Company, and
the Company will have acquired good and valid title to the Securities, free and
clear of all liens, claims and encumbrances.
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377
2.2. Authorization, etc. The Noteholder has full corporate power and
authority to execute and deliver this Agreement and to carry out the
transactions contemplated hereby. This Agreement has been duly executed and
delivered by the Noteholder. This Agreement constitutes a valid and binding
agreement of the Noteholder, enforceable against the Noteholder in accordance
with its terms.
2.3. No Conflict. The execution and delivery of this Agreement by the
Noteholder and the consummation of the transactions contemplated hereby will not
conflict with, violate or constitute a breach or default under any of its
material agreements.
3. Representations and Warranties of the Company. The Company hereby
represents and warrants as follows:
3.1. Authorization, etc. The Company has full corporate power and
authority to execute and deliver this Agreement and the Replacement Warrant and
to carry out the transactions contemplated hereby. This Agreement and the
Replacement Warrant have been duly executed and delivered by the Company. This
Agreement and the Replacement Warrant constitute valid and binding agreements of
the Company, enforceable against the Company in accordance with their
respective terms.
3.2. No Conflict. The execution and delivery of this Agreement and the
Replacement Warrant by the Company and the consummation of the transactions
contemplated hereby will not conflict with, violate or constitute a breach or
default under any of its material agreements.
4. Miscellaneous.
4.1. Counterparts. This Agreement may be executed in one or more
counterparts, but all such counterparts shall constitute one and the same
instrument.
4.2 Amendments; Non-assignability of Rights. This Agreement may not be
amended or assigned without the prior written consent of the parties hereto.
4.3. Governing Law. This Agreement shall be construed in accordance with
and governed by the laws of the State of New York, without regard to the
conflicts of laws and rules thereof would result in the application of the laws
of a jurisdiction other than the State of New York.
4.4. Integration and Severability. The covenants and agreements of the
parties hereto (or their predecessor) set forth in the following agreements are
incorporated by reference as if set forth in full herein: (i) Section 5.1
through 5.4, Article VI and Sections 8.1 through 8.3 of the Original Agreement,
(ii) Section 14 of that certain Secured Promissory Note by the Company dated
June 11, 1996 (as amended to date, the "Note"). This Agreement (including such
incorporation by reference of the Original Agreement and the Notes set forth in
this Section 4.4) embodies the entire agreement and understanding among the
parties hereto, and supersedes all prior agreements and understandings,
relating to the subject matter hereof. In case any one or
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378
more of the provisions contained in this Agreement or in any instrument
contemplated hereby, or any application thereof, shall be invalid, illegal or
unenforceable in any respect, under the laws of any jurisdiction, the validity,
legality and enforceability of the remaining provisions contained herein and
therein, and any other application thereof, shall not in any way be affected or
impaired thereby or under the laws of any other jurisdiction.
4.5 Headings. The headings of the articles, sections and subsections of
this Agreement are inserted for convenience only and shall not be deemed to
constitute a part of this Agreement.
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379
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the
date first above stated.
INTRACEL CORPORATION
By:
-------------------------------
FIRST UNION NATIONAL BANK
By: [SIG]
-------------------------------
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380
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the
date first above stated.
INTRACEL CORPORATION
By: [SIG]
-------------------------------
FIRST UNION NATIONAL BANK
By:
-------------------------------
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381
EXHIBIT J
AKZO AGREEMENT
382
Exhibit 10.36
[AKZO NOBEL LETTERHEAD]
July 31, 1998
Perimmune Holdings, Inc.
c/o Intracel Corporation
1871 N.W. Gillman Blvd.
Issaquah, Washington 98027
Re: Amendment No. 1
Dear Sirs:
The purpose of this letter is to effect an amendment (this "Amendment No. 1")
to each of the agreements set forth below relating to certain debts owed to the
Undersigned, including a note referred to below, in the original principal
amount of $9,234,935 (each such agreement, an "Agreement", and all terms used
herein as defined which are not otherwise defined herein shall be used as
defined in the respective Agreement), as follows:
A. Promissory Note of Perimmune Holdings, Inc. ("Holdings") to the order of
Organon Teknika Corporation ("Teknika") dated August 2, 1996 in the original
principal amount of $9,234,935 (the "Note").
1. The first sentence of the third paragraph of the Note is hereby
amended by deleting "paid in full" and inserting "the Public Date (as
defined below)".
2. The second sentence of the third paragraph of the Note is hereby
amended by adding the following clause at the end thereof: ":provided that
upon the consummation by Intracel Corporation, which is the sole
shareholder of Holdings ("Intracel") of an offering of its equity
securities which is registered pursuant to the Securities Act of 1933 (the
"Public Offering"), the principal amount of this Promissory Note shall be
calculated and all interest which has accrued on this Promissory Note but
has not been paid shall at such time be added to the principal amount of
this Promissory Note (the "IPO Principal Amount"), and from and after the
date of the consummation of the Public Offering (the "Public Date") until
paid in full, interest shall accrue on the IPO Principal Amount at the rate
of ten percent (10%) per annum, and shall be due and payable quarterly on
each November 1, February 1, May 1 and August 1 thereafter."
383
July 31, 1998
Page 2
3. The first three sentences of the fourth paragraph of the Note are
hereby deleted in their entirety and replaced with the following:
"The maturity date of this Promissory Note is January 15, 2000 ("Maturity
Date") subject to Payee's right to accelerate final maturity as set forth
herein. On the Maturity Date, the principal amount shall be calculated and
all interest which has accrued on this Promissory Note but has not been
paid shall at such time be added to the principal amount of this Promissory
Note (the "Final Principal Amount"). Intracel shall as of December 31,
1999, but prior to the Maturity Date, calculate its cash and cash
equivalent balances (including any voluntary payments of amounts not yet
due or any payments classified as extraordinary transactions under
generally accepted accounting principles) as of such date in the same
manner that will be used for purposes of its audited financial statements
(the "Cash Position"). In the event that the Cash Position as determined
above does not exceed $15,000,000, the Final Principal Amount shall not be
payable at the Maturity Date, but shall be payable over the next twelve
month period, in equal quarterly payments (together with interest on the
unpaid amount of the Final Principal Amount on each such quarterly payment
date at a rate of ten percent (10%) per annum) designed to amortize the
Final Principal Amount in full at the end of such 12-month period. The
quarterly installments shall be due on April 15, 2000; July 15, 2000;
October 15, 2000 and January 15, 2001. In the event the Cash Position is
greater than $15,000,000 (such excess, the "Excess Cash Position"), an
amount of the Final Principal Amount equal to the Excess Cash Position (up
to an amount equal to the Final Principal Amount) shall be payable to the
Payee on the Maturity Date. In the event that the payment required by the
immediately preceding sentence is insufficient to pay the Final Principal
Amount in full on the Maturity date, any remainder (the "Remaining
Principal Amount") shall be payable in three equal quarterly payments
(together with interest on the unpaid amount of the Remaining Principal
Amount on each such quarterly payment date at a rate of ten percent (10%)
per annum), commencing on April 15, 2000 designed to amortize the Remaining
Principal Amount in full at the last payment on October 15, 2000. In
addition to the foregoing, from and after the Public Date, this Note shall
be convertible, at the option of the Payee, into that number of shares of
Intracel Common Stock, par value $.0001 per share, obtained by dividing the
sum of the then outstanding principal amount and all then accrued and
unpaid interest (if any) under this Promissory Note by the price set forth
as the per share price to the public on the final prospectus utilized in
the Public Offering."
384
July 31, 1998
Page 3
B. Intellectual Property Security Agreement dated as of August 8, 1996 by and
among Holdings, Perlmmune, Inc. ("Perlmmune"), Akza Nobel Pharma International,
B.V. ("Pharma") and Teknika (the "Security Agreement"):
1. Upon representation by Holdings and its sole shareholder, Intracel
Corporation ("Intracel"), that a financing arrangement has been reached
between Intracel and Northstar High Yield Fund and its affiliates
(collectively "Northstar"), pursuant to the Commitment Letter entered into
by Intracel and Northstar as of June 8, 1998, it is agreed that Section 6
of the Security Agreement is hereby amended by adding the following to the
end of Section 6:
Notwithstanding anything in this Agreement to the contrary, the
Collateral Agent hereby consents to the granting of a security
interest in the Collateral in connection with the transactions
contemplated by the Commitment Letter dated as of June 8, 1998
between Intracel Corporation which is the sole shareholder of
Holdings, and Northstar High Yield Fund and its affiliates
(collectively, "Northstar") on the condition that Northstar's
security interest shall be subject to and secondary to the
Interests of the Secured Parties hereunder. The Collateral Agent
hereby agrees to provide Northstar with 45 days prior written
notice of the Collateral Agent's intent to take any action with
respect to the Collateral due to a default specified in this
Section 6; provided, however, that nothing herein shall prevent
the Collateral Agent from taking such action during the 45 day
notice period as it deems necessary to prevent a sale, pledge,
transfer or assignment of the Collateral prohibited under Section
5 hereof or, after the expiration of the 45 days prior, from
exercising any and all of its rights set forth in this Agreement
with respect to the Collateral including, within limitation, its
rights to sell, pledge, transfer, license or assign the
Collateral.
2. Section 9 of the Security Agreement is hereby amended by deleting the
first sentence and replacing it with the following: "This Security
Agreement shall terminate upon full and final payment of the Purchase Price
Note, as amended through the date hereof."
385
July 31, 1998
Page 4
C. Intellectual Property Agreement dated August 2, 1996 by and among Holdings
and Akzo Nobel Pharma International B.V. ("Pharma") (the "Intellectual Property
Agreement").
1. Subsection 2.2(b) of the Intellectual Property Agreement is hereby
amended by adding the following paragraphs at the end thereof;
All Installment payments provided for under this Subsection 2.2(b)
shall be due no later than 30 days following the date on which the
required product approval is received (or the date on which first
commercial sale occurs in the second country outside the U.S.A., if
no product approval is required). All installment payments shall
accrue interest at the rate of eight percent (8%) per annum from the
date approval is granted by the FDA or the date of approval in the
second country as specified above outside the U.S.A., as applicable.
Holdings hereby agrees to promptly notify Pharma in writing of the
regulatory approval and first commercial sale of any Product in any
of the countries mentioned above, but in any event within seven (7)
days after the occurrence of each of such approval and first
commercial sale.
With respect to any notice, payment or other action becoming due
under this Subsection 2.2(b) upon or in response to regulatory
approval of a Product (including approval by FDA), if regulatory
approval is not required for commercial use of the Product, then
regulatory approval shall be deemed to have been given upon the date
of first commercial use of the Product.
2. Section 2.2 of the Intellectual Property Agreement is hereby amended
by adding a new subsection (g) at the end thereof, as follows: "(g)
Notwithstanding anything in this Section 2.2 to the contrary: (i) all
payments which are due and payable on July 21, 1998, or which would
otherwise become due and payable under the terms hereof from and after
such date (other than the $500,000 milestone payment currently payable
thereunder with respect to the United States introduction of ApoTek Lp(a)
(the "ApoTek Payment"), which shall be paid the day following the closing
of the transactions contemplated by the Commitment Letter dated as of
June 8, 1998 between Intracel Corporation ("Intracel"), which is the sole
shareholder of Holdings, and Northstar High Yield Fund and its
386
July 31, 1998
Page 5
affiliates signatories thereto) and prior to the consummation of the
initial public offering by Intracel of its common stock, par value $.0001
per share, pursuant to a registration statement on Form S-1 filed pursuant
to the provisions of the Securities Act of 1933, as amended (the "IPO"),
shall be due and payable upon the consummation of the IPO and (ii) all
other payments which become due and payable after the IPO shall be paid
when due under the terms of this Agreement.
3. Schedule 2(a)(i) and Schedule 2(a)(ii) to the Intellectual Property
Agreement are hereby amended to read as "Schedule 2.2(a)(i)" and "Schedule
2.2(a)(ii)", respectively.
Except as amended by this Amendment No. 1, the remainder of each Agreement shall
remain in full force and effect.
This Amendment No. 1 shall cease to be effective and shall be deemed null and
void, ab initio, if the guaranty set forth below has not been agreed to and
executed by Intracel on or before August 21, 1998, or on the "closing date"
referred to in the Commitment Letter between Intracel and Northstar, as
described hereinabove, whichever is earlier.
Please indicate your acceptance of and agreement to this Amendment No. 1 by
executing the copy of this letter enclosed herewith and returning it to the
undersigned.
Very truly yours,
Organon Teknika Corporation
By: /s/ [SIG]
------------------------
ACCEPTED AND AGREED TO
AS OF THE DATE FIRST SET FORTH ABOVE:
Perlmmune Holdings, Inc.
By: /s/ [SIG]
------------------------
387
July 31, 1998
Page 6
SO ACCEPTED AND AGREED FOR PURPOSES
OF THE AMENDMENT TO THE INTELLECTUAL
PROPERTY SECURITY AGREEMENT AND THE
INTELLECTUAL PROPERTY AGREEMENT:
Akzo Nobel Pharma International, B.V.
By: /s/ [SIG]
------------------------------------
Perlmmune, Inc.
By: /s/ SIMON R. MCKENZIE
------------------------------------
Guaranty
As an inducement to Organon Teknika Corporation and Akzo Nobel Pharma
International, B.V. to enter into this Amendment of the Agreements, as
described hereinabove, Intracel Corporation hereby agrees to guarantee payment
of the Promissory Note, and payment of milestone payments due under the
Intellectual Property Agreement through the IPO Date, as specified above.
Intracel Corporation
By: /s/ SIMON R. MCKENZIE
-------------------------------
Title: President and CEO
----------------------------
Date:
------------------------------
388
EXHIBIT K
OPINION
389
[MORRISON & FOERSTER LLP LETTERHEAD]
August 25, 1998
To the Lenders Party to the Securities
Purchase Agreement referred to below
and to Northstar High Yield Fund,
as Purchaser
Re: Intracel Corporation
Dear Ladies and Gentlemen:
We have acted as special intellectual property counsel for Intracel
Corporation, a Delaware corporation (the "Company"), PerImmune Holdings, Inc.,
a Delaware corporation and a wholly-owned subsidiary of the Company
("Holdings"), PerImmune, Inc., a Delaware corporation and a wholly-owned
subsidiary of Holdings ("PerImmune") and Bartels, Inc., a Delaware corporation
and a wholly-owned subsidiary of the Company ("Bartels") (the Company,
Holdings, PerImmune and Bartels are each referred to herein as an "Obligor" and
collectively referred to herein as "Obligors") in connection with the
transactions contemplated by the Securities Purchase Agreement dated August 21,
1998 (the "Securities Purchase Agreement") among the Obligors, and Northstar
High Yield Fund, Northstar High Total Return Fund, Northstar High Total Return
Fund II and Northstar Strategic Income Fund (individually, a "Purchaser" and
collectively, the "Purchaser"). This opinion is furnished to the Purchaser
pursuant to Section 6.19 of the Securities Purchase Agreement.
In connection with this opinion, we have examined:
(i) an executed copy of the IP Security Agreement;
(ii) an executed copy of the Security Agreement dated as of
August 25, 1998, made by the Company and the other Obligors in favor of the
Purchaser (the "Security Agreement");
(iii) an executed copy of the Securities Purchase Agreement;
390
[MORRISON & FOERSTER LLP LOGO]
To the Lenders Party to the Securities
Purchase Agreement referred to below
and to Northstar High Yield Fund,
as Agent for such Lenders
August 25, 1998
Page Two
(iv) files created by the Akzo Nobel NV Patent Department relating
to prosecution of U.S. Patents Nos. 4,997,762, 5,180,814, 5,317,091, 5,474,755,
5,484,596, and 5,488,126 (the "Material U.S. Patents")
(v) originals and copies, certified or otherwise identified to
our satisfaction, of such other agreements, instruments and other documents as
we have deemed necessary as a basis for the opinions hereinafter set forth.
In rendering this opinion, we have assumed:
(a) the genuineness of all signatures, the authenticity of all
documents submitted to us as originals, and the conformity to originals of all
documents submitted to us as certified or photostatic copies of such latter
documents and the authenticity of the originals of such latter documents;
(b) that each Obligor is duly incorporated, validly existing and
in good standing under the laws of the jurisdiction of its incorporation and
has full corporate power and authority to execute, deliver and perform its
obligations under the IP Security Agreement and each of the other Loan
Documents to which it is a party;
(c) that each Obligor has taken all necessary corporate action to
authorize the execution, delivery and performance of the IP Security Agreement
and each other Loan Document to which it is a party;
(d) that each of the Loan Documents to which each Obligor is a
party, other than the IP Security Agreement and the Security Agreement (to the
extent that it pertains to the Intellectual Property Collateral, as that term
is defined in the IP Security Agreement), constitutes the legal, valid and
binding obligation of such Obligor enforceable against such Obligor in
accordance with its terms;
(e) that the IP Security Agreement and each other Loan Document
to which each Obligor is a party has been duly executed and delivered on behalf
of such Obligor;
(f) that the execution, delivery and performance by each Obligor
of the IP Security Agreement and each other Loan Document to which it is a
party will not violate the provisions of any existing order, judgment, award or
decree by which such Obligor is bound, or the provisions of any existing
agreement; and
391
MORRISON & FOERSTER LLP
To the Lenders Party to the Securities
Purchase Agreement referred to below
and to Northstar High Yield Fund,
as Agent for such Lenders
August 25, 1998
Page Three
(g) that no Obligor has changed its name or its identity or
corporate structure, whether by amendment of its charter, by reorganization, or
otherwise, within the past four months.
Based upon and subject to the foregoing and the further
qualifications set forth below, it is our opinion that:
1. Each Obligor is the owner of the entire right, title and
interest in and to the material U.S. patents listed on Exhibit A to this
opinion, attached, under the name of such Obligors. Based on our review of the
patent files listed in (iv), above, and the August 13, 1996, Intellectual
Property Security Agreement recorded in the United States Patent and Trademark
Office November 12, 1996 (the "Akzo Security Interest"), we are not aware of
any lien, security interest or other encumbrance recorded against the Material
U.S. Patents under the name of such Obligor other than the first priority
security interest of Akzo Nobel Pharma International B.V., pursuant to the Akzo
Security Interest. Based on our review of the patent files listed in (iv),
above, and the Akzo Security Interest, we are not aware of any effective
financing statements or other instruments similar in effect covering any of the
Material U.S. Patents under the name of such Obligor on file in any recording
office (including, without limitation, the United States Patent and Trademark
Office (hereinafter referred to as the "PTO")), except the Akzo Security
Interest, and such as may have been filed in favor of the Purchaser relating to
the IP Security Agreement or any other Loan Documents.
2. Each of the Material U.S. Patents is subsisting and has not
been adjudged invalid, unregistrable, or unenforceable, in whole or in part,
and is in full force and effect.
3. Xxxxxxxx and Xxxxxxxx LLP will take possession of duplicate
original, executed copies of the IP Security Agreement, will assume
responsibility for recording same in the PTO, will promptly transport same to
Arlington, Virginia and
(a) Will promptly present each such executed copy of the IP
Security Agreement to the appropriate divisions of the PTO
for recording in said office, together with provision for
payment of all requisite fees, and will take all other steps
which may be required to assure prompt recording thereof in
said office with respect to the United States trademark
registrations and applications, and United States
392
[XXXXXXXX & XXXXXXXX LLP LETTERHEAD]
To the Lenders Party to the Securities
Purchase Agreement referred to below
and to Northstar High Yield Fund,
as Agent for such Lenders
August 25, 1998
Page Four
patents and patent applications contained on Schedules I and II to the
IP Security Agreement; and
(b) Will promptly deliver to the Purchaser, proof of filing of each such
executed copy of the IP Security Agreement for recordal in the PTO as
received from the PTO, and upon receipt of the Notices of Recordation
and of each such executed copy of the IP Security Agreement from the
PTO with evidence of recordal endorsed thereon, will promptly deliver
the same to the Purchaser for its records.
We are qualified to express the opinions contained herein.
Very truly yours,
/s/ XXXXXXXX & XXXXXXXX
----------------------------------------
393
Exhibit A
The Material U.S. Patents
4,997,762
5,180,814
5,317,091
5,474,755
5,484,596
5,488,126
394
[XXXXXXXX & XXXXXXXX LLP LETTERHEAD]
Northstar High Yield Fund
Northstar High Total Return Fund
Northstar High Total Return Fund II
Northstar Strategic Income Fund
000 Xxxxx Xxxxxxxx Xxxxx
Xxxxxxxx, Xxxxxxxxxxx
Re: Securities Purchase Agreement dated August 25, 1998 among
Intracel Corporation, PerImmune Holdings, Inc., PerImmune, Inc.
and Xxxxxxx, Inc., Northstar High Yield Fund, Northstar High
Total Return Fund, Northstar High Total Return Fund II and
Northstar Strategic Income Fund
Ladies and Gentlemen:
We have acted as special counsel for Intracel Corporation, a Delaware
corporation (the "Company"), PerImmune Holdings, Inc., a Delaware corporation
and a wholly-owned subsidiary of the Company ("Holdings"), PerImmune, Inc., a
Delaware corporation and a wholly-owned subsidiary of Holdings ("PerImmune")
and Xxxxxxx, Inc., a Delaware corporation and a wholly-owned subsidiary of the
Company ("Xxxxxxx") (the Company, Holdings, PerImmune and Xxxxxxx are each
referred to herein as an "Obligor" and collectively referred to herein as
"Obligors") in connection with the transactions contemplated by the Securities
Purchase Agreement dated August 25, 1998 (the "Securities Purchase Agreement")
among the Obligors, and Northstar High Yield Fund, Northstar High Total Return
Fund, Northstar High Total Return Fund II and Northstar Strategic Income Fund
(individually, a "Purchaser" and collectively, the "Purchasers"). This opinion
is furnished to the Purchasers pursuant to Section 6.19 of the Securities
Purchase Agreement.
We have examined originals or copies of the following documents and
instruments (such documents and instruments listed in clauses (i) through
(xvi), inclusive, being referred to herein as the "Documents"):
(i) the Securities Purchase Agreement;
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(ii) the 12% Guaranteed Senior Secured Primary Promissory Notes of the
Company in the aggregate original principal amount of $35,000,000
(the "Guaranteed Senior Secured Primary Notes");
(iii) the 12% Guaranteed Senior Secured Escrow Promissory Notes of the
Company in the aggregate original principal amount of $6,000,000
(the "Guaranteed Senior Secured Escrow Notes" and together with the
Guaranteed Senior Secured Primary Notes, the "Notes");
(iv) the Series A-VI Common Stock Purchase Warrants of the Company dated
August 25, 1998 (the "Warrants");
(v) the Amended and Restated Series A-II Common Stock Purchase Warrants
of the Company;
(vi) the Amended and Restated Series A-III Common Stock Purchase Warrants
of the Company;
(vii) the Amended and Restated Series A-V Common Stock Purchase Warrants
of the Company (the Amended and Restated Series A-II Common Stock
Purchase Warrants, the Amended and Restated Series A-III Common
Stock Purchase Warrants and the Amended and Restated Series A-V
Common Stock Purchase Warrants are collectively referred to herein
as the "Amended and Restated Warrants");
(viii) the Registration Rights Agreement;
(ix) the Interest Escrow Security Agreement;
(x) the Global Security Agreement;
(xi) the Intellectual Property Security Agreement;
(xii) the Pledge Agreement;
(xiii) the Guaranty issued by each of Xxxxxxx, Holdings and PerImmune;
(xiv) the CoreStates Agreement;
(xv) the Akzo Agreement;
(xvi) the Funded Commitment Facility Escrow Agreement;
396
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Page 3
(xvii) UCC-1 financing statements, executed by the Obligors (the
"Washington Financial Statements"), copies of which are attached
hereto as Attachment 1;
(xviii) UCC-1 financing statements, executed by the Obligors (the
"Maryland Financing Statements"), copies of which are attached
hereto as Attachment 2.
(xix) UCC-1 financing statements, executed by the Obligors (the
"Delaware Financing Statements"), copies of which are attached
hereto as Attachment 3;
(xx) UCC-1 financing statements, executed by the Obligors (the
"Pennsylvania Financing Statements" and, together with the
Washington Financing Statements, the Maryland Financing
Statements, and the Delaware Financing Statements, the "Financing
Statements"), copies of which are attached hereto as Attachment 4;
In addition, we have examined such records, documents, certificates of
public officials and of the Company, Holdings, PerImmune and Xxxxxxx, the stock
certificates and stock powers of Xxxxxxx, Holdings and PerImmune, made such
inquiries of officials of the Company, Holdings, PerImmune and Xxxxxxx, and
considered such questions of law as we have deemed necessary for the purpose of
rendering the opinions set forth herein. In particular, our opinion in
paragraph (a) below as to (i) the good standing of the Company, Holdings,
PerImmune and Xxxxxxx in the State of Delaware; (ii) the qualifications and
good standing of the Company and Xxxxxxx in the State of Washington, and (iii)
the qualification and good standing of PerImmune in the States of Maryland, is
based solely upon certificates of public officials in the State of Delaware,
Washington and Maryland, which certificates are dated August 13, 1998
(Delaware), August 13, 1998 and August 18, 1998 (Washington) and August 20,
1998 (Maryland). We have made no independent investigation as to whether such
certificates are accurate or complete, but we have no knowledge of any such
inaccuracy or incompleteness.
Whenever our opinion herein with respect to the existence or absence of
facts is indicated to be based on our knowledge, it is intended to signify
that, in the course of our representation of the Obligors in connection with
the matters described in the first paragraph hereof, we have not acquired
actual knowledge of the existence or absence of such facts. We have not
undertaken any independent investigation to determine the existence or absence
of such facts, and no inference as to our knowledge of the existence of such
facts should be drawn from the fact of our representation of the Obligors.
We have assumed with your permission:
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Page 4
(i) the genuineness of all signatures and the authenticity of
all items submitted to us as originals and the conformity
with originals of all items submitted to us as copies;
(ii) that each party to one or more of the Documents (other than
the Obligors) is a corporation duly organized, validly
existing and in good standing under the laws of the
jurisdiction of its incorporation, and has the power and
authority to execute and deliver, and to perform and
observe the provisions of, the Documents to which it is a
party;
(iii) that each party to one or more of the Documents (other than
the Obligors) has duly authorized, executed and delivered
such Documents;
(iv) that each Document constitutes a valid and binding
obligation of each party thereto (other than the Obligors);
(v) with respect to the opinion expressed in paragraph (h)
below, that each Purchaser is acquiring the Notes and
Warrants with no present intention of distributing the
same, other than in compliance with the requirements, if
any, of all applicable state and federal securities laws;
(vi) with respect to the opinions expressed in paragraph (j),
and (k) below, that, at all times material to our opinion,
each Obligor has "rights" in the personal property and
fixtures described as collateral in the Security Agreement
(collectively, the "Collateral") within the meaning of
Section 9-203(1)(c) of the New York Uniform Commercial Code
(the "NYUCC");
(vii) with respect to the opinion expressed in paragraph (q)
below, that, at all times material to our opinion, the
Company and Holdings has "rights" in the "Pledged
Collateral" (as defined in the Pledge Agreement) within the
meaning of Section 9-203(1)(c) of the NYUCC;
(viii) for purposes of the opinion expressed in paragraph (r)
below and for the purposes of the transactions
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Page 5
contemplated by the Documents, that the Purchasers will be
deemed the secured party and not a "securities
intermediary" (as defined in Section 8-102 of the NYUCC);
(ix) that the Company is not engaged in the business of buying
or carrying margin stock, and no portion of the proceeds of
any Loan made to the Company pursuant to the Securities
Purchase Agreement, or previously made to the Company by
any Purchaser, will be, or has been, used for such
purposes. As used in this clause, the terms "margin stock"
and "carrying" have the meanings given such terms in
Regulations T, U and X of the Board of Governors of the
Federal Reserve System;
(x) that none of the Collateral consists of property of the
type described in Sections 9-40(1)(a) or 9-401(b) of the
NYUCC;
(xi) that none of the Purchasers, in good faith, has relied upon
"margin stock" (as defined in Regulation U of the Board of
Governors of the Federal Reserve System) as collateral in
extending or maintaining any of the Loans; and
(xii) that none of the Obligors have a place of business in the
State of Pennsylvania and that any Collateral located
within the State of Pennsylvania is located in the county
of Xxxxxxx.
We express no opinion as to:
(i) the enforceability of provisions of the Documents providing for
indemnification or contribution, to the extent such indemnification
or contribution is against public policy;
(ii) the enforceability of provisions of the Documents which purport to
transfer rights under contracts, the transfer of which is restricted
by the terms thereof or by law;
(iii) the effect on the opinions expressed below of (a) the compliance or
noncompliance of any party to any of the Documents (other than the
Obligors) with any laws or regulations applicable to it, or (b) the
legal or regulatory status or
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August 25, 1998
Page 6
the nature of the business of any such party; the effect on the
opinions expressed below of (a) the compliance or noncompliance of
any party to any of the Documents (other than the Obligors) with any
laws or regulations applicable to it, or (b) the legal or regulatory
status or the nature of the business of any such party;
(iv) the enforceability of provisions of the Documents which purport to
establish evidentiary standards or to make determinations conclusive;
(v) the circumstances under which rights of setoff may be exercised;
(vi) the creation of any liens purported to be created by any of the
Documents, except as set forth in paragraphs (j), (k), (p) and (q)
below;
(vii) the perfection of any liens purported to be created in the
Collateral consisting of "fixtures" (as defined in Section
9-313(1)(a) of the NYUCC);
(viii) the perfection of any liens purported to be created in the Collateral
by any of the Documents, except as set forth in paragraphs (l), (m),
(n), (o), and (p) below, or the effect of the absence of such
perfection;
(ix) the perfection of any liens purported to be created in the Delivered
Securities (as defined in paragraph (r) below) by any of the
Documents, except as set forth in paragraph (r) below, or the effect
of the absence of such perfection;
(x) the priority of any liens purported to be created by any of the
Documents, except as set forth in paragraph (r) below, or the effect
of the absence of such priority;
(xi) whether any of the Financing Statements were duly filed;
(xii) the enforceability of a security interest in any property excluded
from the NYUCC by Section 9-104 thereof;
(xiii) the accuracy of the description of the Collateral in the Security
Agreement or any of the Financing Statements or the accuracy of the
description of the Intellectual Property Collateral in the
Intellectual Property Security Agreement; or
(xiv) the enforceability of provisions of the Documents which are construed
as effectively imposing a penalty.
The only opinion with regard to perfection of a security interest in
any patents or patent applications (including the Patents) or any trademark
registrations or applications
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(including the Trademarks) is set forth in paragraph (p) below, and we
caution that the current state of the law with respect to issues involving
security interests in intellectual property is unsettled. In rendering
that opinion with respect to Patents, we have assumed that a security
interest in the Patents is perfected under the Codes (as defined below)
and is effected either (i) by filing a financing statement under the
Washington Uniform Commercial Code, the Maryland Uniform Commercial Code
or the Delaware Uniform Commercial Code, as applicable (collectively, the
"Codes"), or (ii) by filing under the United States Patent Act by reason
of the United States Patent Act providing for a national registration or
national certificate of title or specifying a place of filing different
from that specified in the Codes. In rendering that opinion with respect to
Trademarks, we have assumed that a security interest in the Trademarks is
perfected under the Codes and is effected either (i) by filing a financing
statement under the Codes, or (ii) by filing under the Xxxxxx Act by
reason of the Xxxxxx Act providing for a national registration or national
certificate of title or specifying a place of filing different from that
specified in the Codes.
We note that there is also a possibility that perfection cannot be
effected under either the Codes or under the Patent Act or the Xxxxxx Act.
For example, provisions of the Patent Act which permit recordation of an
"assignment, grant or conveyance" could be construed to preempt the
provisions of the Codes with respect to perfection of security interests
in Patents, yet the Patent Act does not provide a method for perfecting a
security interest. Similarly, provisions of the Xxxxxx Act which permit
"assignments" could be construed to preempt the provisions of the Codes
with respect to perfecting a security interest in Trademarks, yet the
Xxxxxx Act does not provide a method for perfecting a security interest.
This analysis may be supported by the principle of In re AEG Acquisition
Corporation, 127 B.R. 34 (X.X.Xxx. 1991), aff'd, 161 B.R. 50 (9th Cir.
1993) (the "AEG Case"). In that case, the Court held that a secured
party which failed to perfect a security interest in copyrights by filing
with the United States Copyright Office held an unperfected security
interest, even though (as a work subject to the Berne Convention for the
Protection of Literary and Artistic Works (Paris Text 1971)) a federal
registration of the copyright was not required to enforce the copyright.
We know of no case, however, holding that the Patent Act or the
Xxxxxx preempts the Uniform Commercial Code without providing an
alternative method for perfecting. Indeed, as noted above, the AEG case
states that a security interest in a copyright must be perfected by
recordation of the security interest with the United States Copyright
Office. Further, while not definitive, there is support for the view that
a security interest can be perfected in patents by a federal filing. See
e.g., Xxxxxxxx x. XxxXxxxxx, 000 X.X. 000 (1891) (a security interest
constitutes an "assignment" for purposes of permitting a secured party
standing to bring suit for infringement); G.
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Xxxxxxx, 1 Security Interests in Personal Property Section 19:9 at
542-46 (1965)). There is also support for the view that a security
interest in patents can be perfected by filing a financing statement
under the Uniform Commercial Code. See, e.g., City Bank & Trust Co.
x. Xxxx Fabric, Inc., 83 B.R. 780 (D.Kan. 1988); In re Transportation
Design & Tech, Inc. 48 B.R. 635 (X.X.Xxx. 1985)). Similarly, there is
support for the view that a security interest in trademarks may be
perfected by a federal filing. See, e.g., In re 199Z, Inc. 137 B.R.
778, 782 n.7 (C.D. Cal. 1992). There is also support for the view
that a security interest in trademarks can be perfected by filing a
financing statement under the Uniform Commercial Code. See, e.g., In
re 199Z, Inc., 137 B.R. 778 (X.X.Xxx. 1992); In re Chattanooga
Choo-Choo Co., 98 B.R. 792 (E.D. Tenn. 1989); In re C.C. & Co., Inc.,
86 B.R. 485 (X.X.Xx. 1988); In re TR-3 Industries, Inc., 41 B.R. 128
(C.D. Cal. 1984); In re Roman Cleanser Co., 43 B.R. 940 (E.D. Mich.
1984), aff'd on other grounds, 802 F. 2d 207 (6th Cir. 1986).
The opinions expressed below are subject to the following
further qualifications:
(i) the effect of bankruptcy, insolvency, reorganization,
arrangement, moratorium or other similar laws relating to
or affecting the rights of creditors generally, including,
without limitation, laws relating to fraudulent transfers
or conveyances, preferences and equitable subordination;
(ii) limitations imposed by general principles of equity upon
the availability of equitable remedies or the enforcement
of provisions of the Documents and the effect of judicial
decisions which have held that certain provisions are
unenforceable where their enforcement would violate the
implied covenant of good faith and fair dealing, or would
be commercially unreasonable, or where a default under the
Documents is not material;
(iii) certain provisions of the Documents may be unenforceable
in whole or in part under the laws of the State of New
York, but the inclusion of such provisions does not render
invalid any of the Documents and each of the Documents
contains, in our judgment, adequate provisions for the
practical realization of the benefits afforded thereby;
(iv) the effect of judicial decisions which may permit the
introduction of extrinsic evidence to supplement the terms
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of the Documents or to aid in the interpretation of the
Documents;
(v) our opinion as to the enforceability of any provision of
any of the Documents requiring an Obligor to submit to the
jurisdiction of a New York state court is based solely on
the statutes and regulations in effect in the State of New
York on the date hereof (including Section 5-1402 of the
General Obligations Law of the State of New York and
Section 327 of the Civil Practice Law and Rules of the
State of New York); and we express no opinion as to the
enforceability of any provision of any of the Documents
requiring an Obligor to submit to the jurisdiction of any
federal court sitting in New York;
(vi) our opinion in paragraph (f) below is based on a review of
those statutes, rules and regulations which, in our
experience, are normally applicable to transactions of the
type contemplated by the Documents; and
(vii) our opinions with respect to Collateral consisting of
"proceeds," as defined in Section 9-306 of the NYUCC, is
limited to the extent set forth in that section.
Our opinions in paragraphs (j), (k), (l), (m), (n), (o), and (p) below are
also subject to the following further qualifications:
(i) We express no opinion with respect to the security interest of the
Purchasers in proceeds of or "accounts" (as defined in the NYUCC)
relating to any Pledged Collateral.
(ii) We call your attention to the fact that, under United States
trademark law, it is generally held that transfers of trademark
rights are invalid unless accompanied by the related goodwill
and unless the trademarks are used on substantially similar goods as
those previously represented by the trademarks; and we express no
opinion as to the assets or goodwill that would have to accompany the
transfer of any of the trademarks to ensure the continued validity of
the trademarks in the event of foreclosure and ultimate disposition
of the trademarks as a result of default.
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(iii) We call your attention to the fact that the exercise of remedies with
respect to certain types of intellectual property, including, without
limitation, the Patents and trademarks, may require filings by the
Purchasers with the United States Patent and Trademark Office (the
"Patent and Trademark Office").
(iv) We express no opinion with respect to the validity or
enforceability, maintenance or renewal, of any item of intellectual
property, including, without limitation, the Patents and any
trademarks.
(v) We also advise you that additional action may be necessary to
continue such perfection (i) if any of the Obligors changes its
name, identity or structure, or if there is a change in the
jurisdiction in which its place of business (or, if it has more than
one place of business, its chief executive office) or the Collateral
is located, or (ii) with respect to Collateral constituting
"proceeds" under Section 9-306 of the applicable UCC.
Based upon and subject to the foregoing, we are of the opinion that:
(a) Each Obligor is a corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware, and has the corporate
power and authority to operate its property, lease the property it holds as
lessee and to conduct its business as presently conducted. Each of the
Company and Xxxxxxx is duly qualified and in good standing in the State of
Washington, and PerImmune is duly qualified and in good standing in the
State of Maryland.
(b) Each obligor has the corporate power and authority to execute and deliver,
and to perform and observe the provisions of, each of the Documents to
which it is a party. Each of the Documents to which an Obligor is a party
has been duly authorized, executed and delivered by such Obligor.
(c) The Company has the corporate power and authority to issue the Notes, the
Warrants and the Amended and Restated Warrants and to perform and observe
the provisions of the Warrants and the Amended and Restated Warrants. The
Notes, the Warrants and the Amended and Restated Warrants have been duly
authorized and executed, and, upon delivery to the Purchasers against
payment therefor in accordance with the terms of the Securities Purchase
Agreement, will be validly issued.
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(d) Each of the Documents to which an Obligor is a party constitutes valid and
binding obligations of such Obligor enforceable against such Obligor in
accordance with its respective terms.
(e) No registration with, consent or approval of, notice to, or other action
by, any federal or New York governmental entity or any Delaware
governmental entity pursuant to the General Corporation Law of the State
of Delaware, is required on the part of an Obligor for the execution,
delivery or performance by the Obligor of the Documents to which it is a
party, or if required, such registration has been made, such consent or
approval has been obtained, such notice has been given or such other
appropriate action has been taken. No registration with, consent or
approval of, notice to, or other action by, any federal or New York
governmental entity, any Delaware governmental entity pursuant to the
General Corporation Law of the State of Delaware, is required on the part
of the Company for the issuance of the Notes, the Warrants or the Amended
and Restated Warrants by the Company (other than filings pursuant to state
securities laws in connection with the issuance of the Notes, the Warrants
or the Amended and Restated Warrants as to which we express no opinion),
or if required, such registration has been made, such consent or approval
has been obtained, such notice has been given or such other appropriate
action has been taken.
(f) The issuance, execution, delivery and performance by each obligor of each
of the Documents to which it is a party is not in violation of its
certificate of incorporation or its bylaws. Repayment of the Notes by the
Company or issuance of stock upon exercise of the Warrants in accordance
with the respective terms of the Notes and the Warrants will not violate
(i) any federal or New York statute or regulation applicable to the
Company, (ii) the General Corporation Law of the State of Delaware or (iii)
to our knowledge, any order, writ or judgment issued by or filed with a
court of competent jurisdiction applicable to an Obligor.
(g) The shares of Common Stock which have been reserved for issuance upon
exercise of the Warrants and upon exercise of the Amended and Restated
Warrants have been duly authorized for issuance and validly and
effectively reserved by all necessary corporate action of the Company and,
when duly issued and delivered against payment therefor in accordance with
the terms of the Warrants and the Amended and Restated Warrants, will be
validly issued and outstanding, fully paid and nonassessable.
(h) The offering and sale of the Notes and the Warrants and, assuming the
Warrants are fully exercised upon receipt thereof, the Common Stock
issuable upon the exercise of the Warrants is exempt from registration
under the Securities Act of 1933, as amended (the "Securities Act"),
pursuant to the exemption set forth under Section 4(2) of the Securities
Act.
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(i) No Obligor is an "investment company" or a company "controlled" by an
"investment company" within the meaning of the Investment Company Act of
1940, as amended.
(j) The Security Agreement creates a valid lien on and security interest in
all right, title and interest of Obligors in the Collateral in favor of
the Purchasers, as security for the "Obligations" (as defined in the
Security Agreement).
(k) The Intellectual Property Security Agreement creates a valid lien on and
security interest in the Intellectual Property Collateral (as defined
therein) in favor of Purchasers, as security for the Obligations (as
defined in the Security Agreement).
(l) Upon the filing of the Washington Financing Statements in the offices
listed on Attachment 1 hereto, the security interest created by the
Obligors pursuant to the Security Agreement will be a perfected security
interest in the Collateral owned by each of the Obligors, to the extent a
security interest in such Collateral may be perfected by the filing of a
financing statement under the Uniform Commercial Code in effect in the
State of Washington.
(m) Upon the filing of the Maryland Financing Statements in the offices listed
in Attachment 2 hereto, the security interest created by the Obligors
pursuant to the Security Agreement will be a perfected security interest
in the Collateral owned by the Obligors, to the extent a security interest
in such Collateral may be perfected by the filing of a financing statement
under the Uniform Commercial Code in effect in the State of Maryland.
(n) Upon the filing of the Delaware Financing Statements in the offices listed
on Attachment 3 hereto, the security interest created by the Obligors
pursuant to the Security Agreement will be a perfected security interest
in the Collateral owned by the Obligors, to the extent a security interest
in such Collateral may be perfected by the filing of a financing statement
under the Uniform Commercial Code in effect in the State of Delaware.
(o) Upon the filing of the Pennsylvania Financing Statements in the offices
listed on Attachment 4 hereto, the security interest created by the
Obligors pursuant to the Security Agreement will be a perfected security
interest in the Collateral owned by the Obligors, to the extent a security
interest in such Collateral may be perfected by the filing of a financing
statement under the Uniform Commercial Code in effect in the State of
Pennsylvania.
(p) Upon (i) the filing of the Washington Financing Statements in the offices
listed on Attachment 1 hereto, the Maryland Financing Statements in the
offices listed on Attachment 2 hereto and the Delaware Financing
Statements in the offices listed on Attachment 3 hereto, and (ii) the
recordation of the Intellectual Property Security Agreement with the
Patent and Trademark Office against the United States patents and patent
applications identified on Schedule I thereto (the "Patents") and the
United States trademark registrations and
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applications specifically identified on Schedule II thereto (the
"Trademarks") in accordance with the regulations of the Patent and
Trademark Office, the security interest of the Purchasers in the Patents
and Trademarks will constitute a valid and a perfected security interest
under the Codes. In addition, we know of no additional filing or recording
required to perfect a security interest in the Patents and Trademarks
under applicable federal law.
(q) The Pledge Agreement creates a valid lien on and security interest in the
Pledged Collateral in favor of the Purchasers, as security for the
Obligations.
(r) Upon delivery to the Purchasers of the "security certificates" (as defined
in Section 8-102 of the NYUCC) representing the shares of Capital Stock
listed on Schedule A to the Pledge Agreement (the "Delivered Securities"),
together with undated stock powers duly endorsed in blank, and assuming
(i) the continued possession by the Purchasers of such Delivered
Securities in the State of New York, (ii) the Purchasers take possession
of such Delivered Securities in good faith and without notice of any
adverse claim with respect thereto within the meaning of the NYUCC, and
(iii) no security interest of the type described in Section 9-304(4) or
9-304(5) of the NYUCC exists in respect of such Delivered Securities in
favor of any other party, the security interest in such Delivered
Securities created in favor of the Purchasers under the Pledge Agreement
will constitute a perfected security interest, subject to no equal or
prior security interest created under the NYUCC.
(s) To our knowledge, there are no material actions, suits, claims,
proceedings or investigations pending or threatened against or affecting
the Company or any of its Subsidiaries.
(t) To our knowledge, the consummation of the transactions contemplated by the
Securities Purchase Agreement and the Ancillary Agreements will not create
a Lien or other encumbrance against the Collateral in favor of others.
(u) The authorized capital stock consists of 25,000,000 shares of common stock
and 5,000,000 shares of preferred stock.
Except as set forth in the next paragraph, we express no opinion as to
matters governed by any laws other than the substantive laws of the State of
New York (including its applicable choice-of-law rules), the General
Corporation Law of the State of Delaware in respect of the opinions expressed
in paragraphs (a), (b), (c), (e), (f) and (g) above, and the federal laws of
the United States of America, which are in effect on the date hereof. We have
assumed that no provision of the Documents violates the public policy of the
State of Washington or the State of Maryland and that no provision of the law
of the State of New York applicable to the Documents violates the public policy
of the State of Washington or the State of Maryland. We express no
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opinion as to the effect on the opinions expressed herein of the laws of any
jurisdiction other than the State of New York.
We have, with your permission, based our opinions in paragraph (l), (m),
(n), (o) and (p) solely upon our review of the text of the Uniform Commercial
Code in effect in the States of Washington, Maryland, Delaware and Pennsylvania
as set forth in the Commerce Clearing House Secured Transaction Guide as
supplemented through July 21, 1998 and we have not undertaken any inquiry or
research in respect of the laws of Washington, Maryland, Delaware or
Pennsylvania in connection with such opinions other than the review of the
aforementioned text.
This opinion is solely for the Purchaser's benefit and may not be relied
upon by, nor may copies be delivered to, any other person without our prior
written consent.
Very truly yours,
/s/ XXXXXXXX & XXXXXXXX LLP
Xxxxxxxx & Xxxxxxxx LLP
408
EXHIBIT L
FUNDED COMMITMENT FACILITY ESCROW AGREEMENT
409
Exhibit 10.34
FUNDED COMMITMENT FACILITY ESCROW AGREEMENT
THIS FUNDED COMMITMENT FACILITY ESCROW AGREEMENT (this "Escrow
Agreement"), dated as of August 24, 1998 by and among Northstar High Total
Return Fund ("Northstar Return"), Northstar High Total Return Fund II
("Northstar Return III"), Northstar High Yield Fund ("Northstar Yield"),
Northstar Strategic Income Fund ("Northstar Income," together with Northstar
Return, Northstar Return II and Northstar Yield, the "Purchasers"), Intracel
Corporation, a Delaware corporation (the "Company"), and Bank of America NT &
SA, doing business as Seattle First National Bank, (together with its successors
and assigns, the "Escrow Agent").
W I T N E S S E T H:
WHEREAS, the Company has sold to the Purchasers and the
Purchasers have purchased on the date hereof, certain Guaranteed Senior Secured
Primary Promissory Notes (the "Primary Notes") in the aggregate amount of
$35,000,000 in accordance with the terms of the Securities Purchase Agreement
dated the date hereof among the Purchasers and the Company (the "Securities
Purchase Agreement"); and
WHEREAS, the Company has sold to the Purchasers and the
Purchasers have purchased on the date hereof, certain Guaranteed Senior Secured
Escrow Promissory Notes (the "Escrow Notes") in the aggregate amount of
$6,000,000 in accordance with the terms of the Securities Purchase Agreement
(the Primary Notes and the Escrow Notes are collectively referred to herein as
the "Notes"), and
WHEREAS, the obligations of the Company under the Securities
Purchase Agreement, the Notes and the Ancillary Agreements (the "Obligations"),
are secured on the terms and conditions contained in the Securities Documents
(as that term is defined in the Securities Purchase Agreement; and
WHEREAS, the Obligations of the Company are guaranteed by the
Company's Subsidiaries in accordance with the Guaranty Agreement dated the date
hereof among the Purchasers and the Company (the "Guaranty Agreement"); and
WHEREAS, in connection with the purchase and sale of the Notes,
the Company is obligated to deposit into escrow with the Escrow Agent Six
Million Dollars ($6,000,000), which sum represents all of the cash proceeds from
the sale of the Escrow Notes, to be held and disbursed by the Escrow Agent on
the terms and conditions hereinafter set forth;
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NOW THEREFORE, in consideration of the promises and the mutual
representations, warranties, covenants, agreements and other consideration
contained and exchanged in this Escrow Agreement, the receipt and sufficiency
of which are hereby acknowledged, and intending to be legally bound, the parties
hereto agree as follows:
1. Definitions. Capitalized terms defined in the Securities
Purchase Agreement, the Notes and the Ancillary
Agreements, when used herein without definition, shall
have the respective meanings set forth therein.
2. Appointment of Escrow Agent. The Purchasers and the
Company hereby designate and appoint the Escrow Agent to
serve in accordance with the terms, conditions and
provisions of this Escrow Agreement, and the Escrow
Agent hereby agrees to act as such upon the terms,
conditions and provisions provided in this Escrow
Agreement.
3. Escrow. On the date hereof, the Company has instructed
the Purchasers to deliver and the Purchasers have
delivered to the Escrow Agent the sum of Six Million
Dollars ($6,000,000) (the "Escrow Fund"), the receipt of
which the Escrow Agent hereby acknowledges. The Escrow
Fund shall be deposited in the account described on
Annex I hereto for receipt of such amount (the "Escrow
Account") and shall be held in such Escrow Account and
distributed in accordance with the terms and provisions
of this Escrow Agreement.
4. Investment of Escrow Fund. The Escrow Fund shall be held
and invested or reinvested by the Escrow Agent solely in
cash or three-month or six-month U.S. treasury bills,
and otherwise upon and in accordance with the written
instructions of the Company and the Purchasers.
Investments of monies in the Escrow Fund shall be made
in the foregoing securities in a manner that will ensure
that such investments mature or may be redeemed or may
be subject to liquidation by sale or otherwise at the
option of the Escrow Agent at such time as may be
necessary to make timely disbursements from said Escrow
Fund. The Escrow Agent may from time to time sell such
investments and reinvest the proceeds therefrom in other
investments of the type described in this Section 4. The
Escrow Fund shall be credited with all proceeds of sale
and income from such investment.
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411
5. Term. Subject to claims against the Escrow Fund as
hereinafter provided, the term of this Escrow Agreement
shall terminate upon the earlier of (a) the date on
which the Escrow Fund shall have been reduced to zero;
(b) the date on which the Company shall have repaid all
of the Escrow Notes from any source of funds whatsoever;
and (c) August 25, 2003 (the "Escrow Expiration Date").
6. Disbursement of Monies in the Escrow Fund Prior to
Escrow Termination Date. On each occasion that the
Company shall execute and deliver a written notice
substantially in the form of Exhibit A hereto (each, a
"Disbursement Notice") to the Escrow Agent providing the
Escrow Agent with disbursement instructions for all or
any part of the Escrow Fund, the Escrow Agent shall
disburse the portion of the Escrow Fund referred to in
such notice in accordance with the instructions
contained in such notice.
7. Disbursement of Monies in the Escrow Fund on Default or
on the Escrow Termination Date. On the earlier of (A)
any date on which there shall occur a Default, an Event
of Default, or an event that with the lapse of time or
the giving of notice or both, shall constitute an Event
of Default with respect to the Securities Purchase
Agreement, the Notes or any of the Ancillary Agreements
(the "Default Date") and unless the Purchasers shall
have waived the provisions of this Section 7 with
respect to a particular Default Date within five (5)
Business Days after such Default Date, or (B) the Escrow
Expiration Date, the Escrow Agent shall apply any
remaining amounts in the Escrow Fund in the following
order of priority: (A) to the Purchasers, an amount
equal to all accrued unpaid past due interest on the
Notes; (B) to the Purchasers, an amount equal to all
accrued unpaid interest due on the Notes; (C) to the
Purchasers, all accrued unpaid and past due amounts
under the Securities Purchase Agreement, the Notes and
any of the Ancillary Agreements; (D) to the Purchasers,
all other accrued unpaid amounts under the Securities
Purchase Agreement, the Notes and any of the Ancillary
Agreements;(E) the aggregate principal amount
outstanding under the Notes; and (F) to the Company;
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412
provided however, that the Escrow Agent shall not be required to make any
disbursements with respect to a Default Date until it shall have received a
notice from the Purchasers under this Section 7 in substantially the form set
forth in Exhibit B attached hereto, and further provided that it shall make such
disbursement as set forth above promptly after receipt of such notice from the
Purchasers.
8. Escrow Agent. The Escrow Agent shall be an Eligible
Institution as that term is defined in the Securities
Purchase Agreement. The duties of the Escrow Agent,
hereunder shall be entirely administrative and not
discretionary. The Escrow Agent shall be obligated to
act only in accordance with written instructions
received by it as provided in this Escrow Agreement and
is authorized hereby to comply with such written
instructions, any orders, judgments or decrees of any
court with proper jurisdiction and shall not be liable
as a result of its compliance with the same.
a. As to any legal questions arising in connection
with the administration of this Escrow
Agreement, the Escrow Agent may rely absolutely
upon the opinions given to it by its counsel and
shall be free of liability (except for liability
arising from its own gross negligence or wilful
misconduct), for acting in reliance on such
opinions.
b. The Escrow Agent may rely absolutely upon the
genuineness and authorization of the signature
and purported signature of any party upon any
instruction, notice, release, receipt or other
document delivered to it pursuant to this Escrow
Agreement.
c. The Escrow Agent may, as a condition to the
disbursement of monies or disposition of
securities as provided herein, require from the
payee or recipient a receipt therefor and, upon
final payment or disposition, a release of the
Escrow Agent from any liability arising out of
its execution or performance of this Escrow
Agreement, such release to be in a form
satisfactory to the Escrow Agent.
d. The parties agree that any compensation due to
the Escrow Agent for its services
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413
hereunder shall be paid entirely by the Company.
9. Indemnity.
a. The Purchasers and the Company agree to and
hereby waive any suit, claim, demand or cause of
action of any kind which they or it may have or
may assert against the Escrow Agent arising out
of or relating to the execution or performance
by the Escrow Agent of this Escrow Agreement,
unless such suit, claim, demand or cause of
action is based upon the wilful misconduct,
gross negligence or bad faith of the Escrow
Agent. The Purchasers and the Company further
agree, jointly and severally, to indemnify the
Escrow Agent against and from any and all
claims, demands, costs, liabilities and
expenses, including reasonable counsel fees,
which may be asserted against it or to which it
may be exposed or which it may incur by reason
of its execution or performance of this Escrow
Agreement, except such claims, demands, costs,
liabilities and expenses that are based upon or
the result of the wilful misconduct, gross
negligence or bad faith of the Escrow Agent.
Such agreement to indemnify shall survive the
termination of this Escrow Agreement until
extinguished by any applicable statute of
limitations.
b. In case any litigation is brought against the
Escrow Agent in respect of which indemnity may
be sought hereunder, the Escrow Agent shall give
prompt notice of that litigation to the
Purchasers and the Company and the Purchasers
and the Company upon receipt of that notice
shall have the obligation and the right to
assume the defense of such litigation, provided
that failure of the Escrow Agent to give that
notice shall not relieve the Purchasers or the
Company from any of their obligations under this
Section 9 unless that failure prejudices the
defense of such litigation by said parties. At
its own expense, the Escrow Agent may employ
separate counsel and participate in the defense.
The Purchasers and the Company shall not be
liable hereunder pursuant to any settlement
without their respective consents.
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414
10. Acknowledgment by the Escrow Agent. By execution and
delivery of this Escrow Agreement, the Escrow Agent
acknowledges that the terms and provisions of this
Escrow Agreement are acceptable to it and it agrees to
carry out the provisions of this Escrow Agreement on its
part.
11. Resignation or Removal of Escrow Agent; Successors.
a. The Escrow Agent may resign as such following
the giving of ten (10) days' prior written
notice to the other parties hereto. Similarly,
the Escrow Agent may be removed and replaced
following the giving of ten (10) days' prior
written notice to the Escrow Agent by the
Purchasers and the Company. In either event,
subject to subsection 11(b), the duties of the
Escrow Agent shall terminate ten (10) days after
the date of such notice (or as of such earlier
date as may be mutually agreeable among the
parties hereto); and the Escrow Agent shall then
deliver the balance of the Escrow Fund then in
its possession to a successor Escrow Agent as
shall be appointed by the other parties hereto
as evidenced by a written notice filed with the
Escrow Agent. Any successor Escrow Agent
appointed hereunder shall be an Eligible
Institution (as that term is defined in the
Securities Purchase Agreement), that is
appointed by the Purchasers and the Company.
b. If for any reason any bank or trust company is
unwilling to serve as successor Escrow Agent and
if the other parties hereto are unable to agree
upon a successor or shall have failed to appoint
a successor prior to the expiration of ten (10)
days following the date of the notice of
resignation or removal, the then acting Escrow
Agent may petition any court of competent
jurisdiction for the appointment of a successor
Escrow Agent or other appropriate relief and
until any such appointment is made or
appropriate relief granted, the then acting
Escrow Agent shall continue as the Escrow Agent;
and any such resulting appointment shall be
binding upon all of the Parties hereto.
C. Every successor appointed hereunder shall
execute, acknowledge and deliver to its
predecessor and also to the Purchasers and the
Company, an instrument in writing accepting such
appointment hereunder, and thereupon such
successor, without
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415
any further act, shall become fully vested with
all the duties, responsibilities and obligations
of its predecessor; but such predecessor shall,
nevertheless, on the written request of its
successor or any of the parties hereto, execute
and deliver an instrument or instruments
transferring to such successor all the rights of
such predecessor hereunder, and shall duly
assign, transfer and deliver all property,
securities and monies held by it pursuant to
this Escrow Agreement to its successor. Should
any instrument be required by any successor for
more fully vesting in such successor the duties,
responsibilities and obligations hereby vested
or intended to be vested in the predecessor, any
and all such instruments in writing shall, on
the request of any of the parties hereto, be
executed, acknowledged and delivered by the
predecessor or any other party so requested.
d. In the event of an appointment of a successor,
the predecessor shall cease to be custodian of
any funds, securities or other assets and
records it may hold pursuant to this Escrow
Agreement, and the successor shall become such
custodian.
e. Upon acknowledgment by any successor Escrow
Agent of the receipt of the then remaining
balance of the Escrow Fund, which acknowledgment
shall be given promptly after such receipt, the
then acting Escrow Agent shall be fully released
and relieved of all duties, responsibilities and
obligations under this Escrow Agreement.
12. Entire Agreement, Amendments and Waivers. This Escrow
Agreement contains the entire agreement (including
representations, warranties and covenants) among the
parties hereto pertaining to the subject matter hereof
and supersedes all prior and contemporaneous agreements,
negotiations, discussions, arrangements or
understandings with respect thereto. No amendment,
supplement, modification or waiver of this Escrow
Agreement shall be binding unless executed in writing by
the Escrow Agent, the Required Holders (as that term is
defined in the Securities Purchase Agreement) and the
Company, provided however that, except with the prior
written consent of one hundred percent (100%) of the
Purchasers, no amendment to this Agreement can affect
the time, amount or allocation of any payments, change
the percentage
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416
specified in the definition of Required Holders as
contained in the Securities Purchase Agreement or
consent to the assignment or transfer by the Company or
any of its Subsidiaries of their respective obligations
under this Agreement. Any amendment or waiver of any
provision herein shall be effective only for the
purposes and period of time expressly set forth therein
and shall not entitle the Company to any other waiver or
amendment in similar or other circumstances. No course
of dealing between the Company and any Purchaser, nor
any failure to exercise or any delay in exercising on
the part of the Purchasers, any right, remedy, power or
privilege herein shall operate as a waiver thereof; nor
shall any single or partial exercise of any right,
remedy, power or privilege hereunder preclude any other
right, remedy, power or privilege. The rights, remedies,
powers and privileges hereunder are cumulative and not
exclusive of any rights remedies, powers and privileges
provided by law. In addition to the remedies provided in
this Escrow Agreement, any party may pursue any and all
remedies now or hereafter existing at Law or in equity.
13. Execution in Counterparts. This Escrow Agreement may be
executed in one or more counterparts each of which shall
be regarded as an original and all of which shall
constitute but one and the same instrument.
14. Severability. If any provision of this Escrow Agreement,
or any covenant, obligation or agreement contained
herein is determined by a court of competent
jurisdiction to be invalid or unenforceable, such
determination shall not affect any other provision,
covenant, obligation or agreement contained herein, each
of which shall be construed and enforced as if such
invalid or unenforceable portion were not contained
herein. Such invalidity or unenforceability shall not
affect any valid and enforceable application thereof,
and each such provision, covenant, obligation or
agreement shall be deemed to be effective, operative,
made, entered into or taken in the manner and to the
full extent permitted by law.
15. Captions. The captions and headings in this Escrow
Agreement shall be solely for convenience of reference
and shall in no way define, limit or
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417
describe the scope or intent of any provisions or
sections of this Escrow Agreement.
16. Notices. All notices, requests, consents or other
communications which are required or permitted hereunder
shall be in writing and shall be deemed to be
sufficiently given when delivered personally, mailed by
registered or certified mail, postage prepaid, or
nationwide overnight delivery service (with charges
prepaid) and addressed as follows:
if to the Purchasers:
Northstar High Total Return
Northstar High Total Return II
Northstar High Yield Fund
Northstar Strategic Income Fund
000 Xxxxx Xxxxxxxx Xxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Attention: Xx. Xxxxxxx X. Xxxxxx
With a copy to:
Reboul, MacMurray, Xxxxxx, Xxxxxxx
& Kristol
00 Xxxxxxxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx X. Xxxxxxxxx
a. if to the Company:
Intracel Corporation
0000 X.X. Xxxxxxxxx Xxxx
Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxx X. XxXxxxxx
Chief Executive Officer
b. if to the Escrow Agent:
c. Bank of America NT & SA
doing business as
Seattle First National Bank
10500 Northeast 0xx Xxxxxx
Xxxxx 0
Xxxxxxxx, Xxxxxxxxxx 00000
or, in any such case, at such other addresses or addresses as shall have been
furnished in writing by such party to the other. Any notice given hereunder
shall be deemed given and delivered three (3) Business Days after mailing by
mail, or one day after
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delivery to an overnight express service for next day delivery, or upon
delivery, if personally delivered, as the case may be.
17. Expenses. The Company shall pay its own expenses and the
expenses of the Purchasers in connection with the
transactions contemplated hereby, including, but not
limited to, the execution and enforcement of this
Agreement and any indemnity payments by Purchasers to
the Escrow Agent in accordance with Section 9 hereto.
18. Successors. This Escrow Agreement shall be binding
upon, and inure to the benefit of the successors and
assignees of the parties hereto (including without
limitation, in the case of Purchaser and Seller, by
merger), and no other person shall have any right,
benefit or obligation hereunder.
19. Applicable Law. This Escrow Agreement shall be governed
by and construed and enforced in accordance with the
internal laws (and not the laws of conflicts) of the
State of New York as permitted by Section 5-401 of the
New York General Obligations Law (or any similar
successor provision) without giving effect to any
choice of law rule that would cause the application of
the Laws of any jurisdiction other than New York. Each
of the parties hereto hereby (i) submits for itself and
its respective Assets to the nonexclusive general
jurisdiction of the Courts of the State of New York,
County of New York and the Courts of the United States
of America for the Southern District of New York, (ii)
irrevocably agrees that, at the Purchasers' election,
all actions or proceedings arising out of or relating to
this Escrow Agreement may be litigated in such courts,
(iii) waives any objection that it may have to the venue
of any such action or proceeding was brought in an
inconvenient court and agrees not to plead or claim the
same, and (iv) agrees that service of process in any
such action or proceeding may be effected by mailing a
copy thereof by registered or certified mail, postage
prepaid, to it at its address set forth in or determined
pursuant Section 16 of this Agreement.
IN WITNESS WHEREOF, each of the parties hereto has caused this
Escrow Agreement to be executed on its behalf as of the day and year first above
written.
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419
NORTHSTAR HIGH TOTAL RETURN FUND
By: /s/ XXXXXXX X. XXXXXX
-------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Vice President
NORTHSTAR HIGH TOTAL RETURN FUND II
By: /s/ XXXXXXX X. XXXXXX
-------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Vice President
NORTHSTAR HIGH YIELD FUND
By: /s/ XXXXXXX X. XXXXXX
-------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Vice President
NORTHSTAR STRATEGIC INCOME FUND
By: /s/ XXXXXXX X. XXXXXX
-------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Vice President
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INTRACEL CORPORATION
By /s/ XXXXX X. XXXXXXXX
-------------------------------
Name: Xxxxx X. XxXxxxxx
Title: Chief Executive Officer
Bank of America NT & SA
doing business as
Seattle First National Bank
By:
-------------------------------
Name:
Title:
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INTRACEL CORPORATION
By /s/ XXXXX X. XXXXXXXX
-------------------------------
Name: Xxxxx X. XxXxxxxx
Title: Chief Executive Officer
Bank of America NT & SA
doing business as
Seattle First National Bank
By: /s/ X. XXXXXX
-------------------------------
Name: Xxxxxxxxxxx X. Xxxxxx
Title: Assistant Vice-President and Relationship Officer
Seafirst Investment Management
and Trust Services
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Exhibit A
[Form of]
DISBURSEMENT NOTICE
To: Bank of America NT & SA, doing business as Seattle First National Bank, as
Escrow Agent (the "Escrow Agent") under the Escrow Agreement dated as of
August 24, 1998 by and among Northstar High Total Return Fund, Northstar
High Total Return Fund II, Northstar Yield Fund, Northstar Strategic
Income Fund, Intracel Corporation and the Escrow Agent
Ladies and Gentlemen:
You are hereby instructed, pursuant to Section 6 of the referenced Escrow
Agreement, to disburse funds from the Escrow Fund (as defined therein) as
follows:
[INSERT PAYMENT INSTRUCTIONS AND AMOUNTS]
Very truly yours,
INTRACEL CORPORATION
By: _______________________________
Name:
Title:
Bank of America NT & SA
doing business as
Seattle First National Bank
By: _______________________________
Name:
Title:
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423
Exhibit B
[Form of]
DISBURSEMENT NOTICE
To: Bank of America NT & SA, doing business as Seattle First National Bank, as
Escrow Agent (the "Escrow Agent") under the Escrow Agreement dated as of
August 24, 1998 by and among Northstar High Total Return Fund, Northstar
High Total Return Fund II, Northstar Yield Fund, Northstar Strategic Income
Fund, Intracel Corporation and the Escrow Agent
Ladies and Gentlemen:
You are hereby instructed, pursuant to Section 7 of the referenced
Escrow Agreement, to disburse funds from the Escrow Fund (as defined therein)
as follows:
(A) to _________________, the amount of $__________, which amount is
equal to all accrued unpaid past due interest on the Notes;
(B) to _________________, the amount of $__________, which amount is
equal to all accrued unpaid interest due on the Notes;
(C) to _________________, the amount of $__________, which amount is
equal to all accrued unpaid and past due amounts under the
Securities Purchase Agreement, the Notes and any of the Ancillary
Agreements;
(D) to _________________, the amount of $__________, which amount is
equal to all other accrued unpaid amounts under the Securities
Purchase Agreement, the Notes and any of the Ancillary Agreements;
(E) to _________________, the amount of $__________, which amount is
equal to the aggregate principal amount Outstanding under the Notes;
and
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(F) to the Company, the amount of $____________
Very truly yours,
NORTHSTAR [ ]
By:________________________________
Name:
Title:
Bank of America NT & SA
doing business as
Seattle First National Bank
By:_________________________________
Name:
Title:
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