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EXHIBIT 2.2
AMENDED AND RESTATED REVOLVING
CREDIT AND SECURITY AGREEMENT
SFBC INTERNATIONAL, INC.,
A DELAWARE CORPORATION
"BORROWER"
SOUTH FLORIDA KINETICS, INC.,
A FLORIDA CORPORATION
SFBC FT. XXXXX, INC.,
A FLORIDA CORPORATION
SFBC ANALYTICAL LABORATORIES, INC.,
A FLORIDA CORPORATION
SFBC NEW DRUG SERVICES, INC.,
A FLORIDA CORPORATION,
F/K/A SFBC CHARLOTTE, INC.
SFBC CANADA, INC.
A FEDERAL CORPORATION (CANADA)
ANAPHARM, INC.
A PROVINCIAL CORPORATION (QUEBEC)
DAEDAL MANAGEMENT & INVESTMENT INC.,
A PROVINCIAL CORPORATION (ONTARIO)
DANAPHARM CLINICAL RESEARCH INC.,
A PROVINCIAL CORPORATION (ONTARIO)
SYNFINE RESEARCH INC.,
A PROVINCIAL CORPORATION (ONTARIO),
(COLLECTIVELY, THE "GUARANTOR")
WACHOVIA BANK, NATIONAL ASSOCIATION
"BANK"
JULY __30, 2003
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REVOLVING CREDIT AND SECURITY AGREEMENT
THIS AGREEMENT (the "Agreement"), dated as of July 30, 2003 by and
among SFBC INTERNATIONAL, INC., a Delaware corporation ("Borrower"), WACHOVIA
BANK, NATIONAL ASSOCIATION ("Bank") and SOUTH FLORIDA KINETICS, INC., a Florida
corporation, d/b/a SOUTH FLORIDA BIOAVAILABILITY CLINIC, SFBC FT. XXXXX, INC., a
Florida corporation, SFBC ANALYTICAL LABORATORIES, INC., a Florida corporation,
SFBC NEW DRUG SERVICES, INC., a Florida corporation, f/k/a SFBC CHARLOTTE, INC.,
SFBC CANADA, INC., a Federal corporation (Canada), ANAPHARM, INC., a provincial
corporation (Quebec), DAEDAL MANAGEMENT & INVESTMENT INC., a provincial
corporation (Ontario), DANAPHARM CLINICAL RESEARCH INC., a provincial
corporation (Ontario), and SYNFINE RESEARCH INC., a provincial corporation
(Ontario) (collectively, the "Guarantor");
W I T N E S S E T H :
In consideration of the premises and of the mutual covenants herein
contained and to induce Bank to extend credit to Borrower, the parties agree as
follows:
1. DEFINITIONS. Capitalized terms that are not otherwise defined herein
shall have the meanings set forth in Exhibit 1 hereto.
2. THE LOANS.
2.1(a). $7,000,000.00 Revolving Credit Facility. Bank agrees, on the
terms and conditions set forth in this Agreement, to make Advances to Borrower
from time to time during the Revolving Credit Period in amounts such that the
aggregate principal amount of Advances at any one time outstanding will not
exceed the lesser of (i) the $7,000,000.00 or (ii) the Borrowing Base (the
"$7,000,000 Loan"). Notwithstanding the foregoing, (i) the aggregate amount of
the Advances by Bank from time to time shall be subject to any reserves that
Bank in its sole and absolute discretion may deem proper and/or necessary.
Within the foregoing limit, Borrower may borrow, prepay and reborrow Advances at
any time during the Revolving Credit Period for general corporate purposes. This
is a revolving credit facility for general business purposes.
2.1(b) $8,000,000.00 Non-Revolving Credit Facility. Bank agrees, on
the terms and conditions set forth in this Agreement, subject to the terms and
condition set forth in the $8,000,000 Note (as defined below), to make Advances
on behalf of Borrower from time to time in amounts such that the aggregate
principal amount of Advances at any one time outstanding will not exceed
$8,000,000.00 (the "$8,000,000 Loan"). This is a non-revolving facility for the
purpose of financing acquisitions of companies in related industries. Any sums
borrowed and re-paid may not be re-borrowed again. Notwithstanding the
foregoing, for so long as Borrower is in compliance with the terms and
conditions of this Agreement and after giving effect thereto, there shall be no
Default hereunder, Borrower may use its own funds to make one or more
acquisitions.
2.2. Notes. The Loans shall be evidenced by (i) an Amended and
Restated Revolving Promissory Note in the face amount of $7,000,000.00 (the
"$7,000,000 Note") and (ii) an Amended and Restated Non-Revolving Promissory
Note in the face amount of $8,000,000.00 (the "8,000,000 Note"), both dated of
even date herewith (collectively the "Notes") and shall be payable in accordance
with the terms of each respective Note and this Agreement.
2.3. Intentionally Deleted.
2.4. Cash Management Services. If Borrower subscribes to Bank's cash
management services and such services are applicable to the $7,000,000 Loan, the
terms of such services, as set forth in the Services Agreement, shall control
the manner in which funds are transferred between the Demand Deposit Account and
the $7,000,000 Loan for credit or debit to the $7,000,000 Loan.
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2.5. Advances.
(a) Under the $7,000,000 Loan, Bank, in its discretion, may require
from Borrower a signed written request for an Advance in form satisfactory to
Bank, which request shall be delivered to Bank no later than 12:00 noon (local
time in Miami, Florida) on the date of the requested Advance, and shall set
forth the calculation of the Borrowing Base and a reconciliation to the previous
request or Borrowing Base Certificate, specify the date (which shall be a
Business Day) and the amount of the proposed Advance and provide such other
information as Bank may require. Bank's acceptance of such a request shall be
indicated by its making the Advance requested. Such an Advance shall be made
available to Borrower in immediately available funds at Bank's address referred
to in Section 10.4. Notwithstanding the foregoing, Bank may, in its sole and
absolute discretion, make or permit to remain outstanding Advances under the
$7,000,000 Loan in excess of the original principal amount of the Note, and all
such amounts shall (i) be part of the Indebtedness evidenced by the $7,000,000
Note, (ii) bear interest as provided herein, (iii) be payable upon demand by
Bank, and (iv) be entitled to all rights and security as provided under the Loan
Documents.
(b) Advances under the $8,000,000 Loan shall be governed by and in
accordance with the terms of the $8,000,000 Note and this Agreement.
2.6. Repayment of Loans.
(a) Interest on the $7,000,000 Loan shall accrue and be payable as
set forth in the $7,000,000 Note. The $7,000,000 Loan shall mature, and the
principal amount thereof and all accrued and unpaid interest, fees, expenses and
other amounts payable under the Loan Documents shall be due and payable, on the
Termination Date.
(b) Interest on the $8,000,000 Loan shall accrue and be payable as
set forth in the $8,000,000 Note. The $8,000,000 Loan shall mature, and the
principal amount thereof and all accrued and unpaid interest, fees, expenses and
other amounts payable under the Loan Documents shall be due and payable, as set
forth in the $8,000,000 Note.
(c) Bank may debit the Demand Deposit Account, the Collections
Account and/or make Advances to Borrower (whether or not in excess of the lesser
of the Maximum Loan Amount and the Borrowing Base) and apply such amounts to the
payment of interest, fees, expenses and other amounts to which Bank may be
entitled from time to time and Bank is hereby irrevocably authorized to do so
without the consent of Borrower.
(d) Borrower shall make each payment of principal of and interest on
the Loans and fees hereunder not later than 12:00 noon (local time Miami,
Florida) on the date when due, without set off, counterclaim or other deduction,
in immediately available funds to Bank at its address referred to in Section
10.4. Whenever any payment of principal of, or interest on, either Loan or of
fees shall be due on a day which is not a Business Day, the date for payment
thereof shall be extended to the next succeeding Business Day. If the date for
any payment of principal is extended by operation of law or otherwise, interest
thereon shall be payable for such extended time.
(e) To the extent that the aggregate amount of all Advances exceeds
the Borrowing Base, the amount of such excess will be paid immediately to Bank
upon Bank's demand.
2.7. Overdue Amounts. Any payments not made as and when due shall
bear interest from the date due until paid at the Default Rate, in Bank's
discretion.
2.8. Calculation of Interest. All interest under the Notes or
hereunder shall be calculated on the basis of the Actual/360 Computation, as
defined in the respective Notes.
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2.9. Sales Tax. Borrower shall notify Bank if any Account includes
any sales or other similar tax and Bank may, but shall not be obligated to,
remit any such taxes directly to the taxing authority and make Advances or
charge the Demand Deposit Account therefor. In no event shall Bank be liable for
any such taxes.
2.10. Intentionally Deleted.
2.11. Fees. Borrower shall pay to Bank: (i) a one-time
non-refundable facility fee in the amount of $25,000.00, prior to the closing of
the Loans; (ii) annually during the term of the $7,000,000 Note, an annual
non-refundable facility fee equal to 25 basis points on the difference between
the average usage and the average availability supported by the Borrowing Base;
and (iii) during the term of the $8,000,000 Note, a non-refundable non-use fee
equal to 50 basis points of the average un-used portion for such previous year
as determined on each fiscal year end of Borrower and on the Termination Date.
2.12. Statement of Account. If Bank provides Borrower with a
statement of account on a periodic basis, such statement will be presumed
complete and accurate and will be definitive and binding on Borrower, unless
objected to with specificity by Borrower in writing within forty-five (45) days
after receipt.
2.13. Termination. Upon at least thirty (30) days prior written
notice to Bank, Borrower may, at its option, terminate this Agreement and the
Loan facility. Bank may terminate the Loan facility hereunder at any time,
without notice, upon or after the occurrence of a Default or Event of Default.
3. CONDITIONS PRECEDENT TO BORROWING. Prior to any Advance, the
following conditions shall have been satisfied, in the sole opinion of Bank and
its counsel:
3.1. Conditions Precedent to Initial Advance. In addition to any
other requirement set forth in this Agreement, Bank will not make the initial
Advance under either Loan unless and until the following conditions shall have
been satisfied:
(a) Loan Documents. Borrower and each other party to any Loan
Document, as applicable, shall have executed and delivered this Agreement, the
$7,000,000 Note, the $8,000,000 Note, and other required Loan Documents, all in
form and substance reasonably satisfactory to Bank.
(b) Supporting Documents. Borrower shall cause to be delivered to
Bank the following documents:
(i) A copy of the governing instruments of Borrower and each
Subsidiary, and a good standing certificate of Borrower and each
Subsidiary, certified by the appropriate official of its state of
incorporation and the State of Florida, if different;
(ii) Incumbency certificate and certified resolutions of the
board of directors (or other appropriate Persons) of Borrower and each
other Person executing any Loan Documents, signed by the Secretary or
another authorized officer of Borrower or such other Person,
authorizing the execution, delivery and performance of the Loan
Documents;
(iii) The legal opinion of Borrower's and any Guarantor's legal
counsel addressed to Bank regarding such matters as Bank and its
counsel may request;
(iv) A satisfactory Borrowing Base Certificate duly completed by
Borrower together with all supporting statements, schedules and
reconciliations as required by Bank;
(v) Satisfactory evidence of payment of all fees due and
reimbursement of all costs incurred by Bank, and evidence of payment to
other parties of all fees or costs which Borrower is required under
this Agreement to pay by the date of the initial Advance;
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(vi) UCC-11 searches and other Lien searches showing no existing
security interests in or Liens on the Collateral other than Permitted
Liens;
(vii) Any lien waivers requested by Bank pursuant to section
5.13(c) hereof; and
(viii) A satisfactory Perfection Certificate duly completed by
Borrower.
(c) Insurance. Borrower shall have delivered to Bank satisfactory
evidence of insurance meeting the requirements of Section 5.3.
(d) Perfection of Liens. UCC-1 financing statements and, if
applicable, certificates of title covering the Collateral executed by Borrower
shall duly have been recorded or filed in the manner and places required by law
to establish, preserve, protect and perfect the interests and rights created or
intended to be created by the Security Agreement; and all taxes, fees and other
charges in connection with the execution, delivery and filing of the Security
Agreement and the financing statements shall duly have been paid.
(e) Subordinations. Bank shall have received subordinations
satisfactory to it from (i) all lessors that might have landlord's Liens on any
Collateral and (ii) all Guarantors and Affiliates as required by Section 5.9.
(f) Additional Documents. Borrower shall have delivered to Bank all
additional opinions, documents, certificates and other assurances that Bank or
its counsel may require.
(g) Payment of Fees. Borrower shall have paid all fees, costs and
expenses as required by the Loan Documents in connection with the Closing.
3.2. Conditions Precedent to Each Advance. The following conditions,
in addition to any other requirements set forth in this Agreement, shall have
been met or performed by the Advance Date with respect to any Advance Request
and each Advance Request (whether or not a written Advance Request is required)
shall be deemed to be a representation that all such conditions have been
satisfied:
(a) Advance Request. Borrower shall have delivered to Bank an
Advance Request and other information, as required under Section 2.5(a), unless
the procedures described in Section 2.4 are in effect.
(b) No Default. No Default shall have occurred and be continuing or
could occur upon the making of the Advance in question and, if Borrower is
required to deliver a written Advance Request, Borrower shall have delivered to
Bank an officer's certificate to such effect, which may be incorporated in the
Advance Request.
(c) Correctness of Representations. All representations and
warranties made by Borrower and any Guarantor herein or otherwise in writing in
connection herewith shall be true and correct in all material respects with the
same effect as though the representations and warranties had been made on and as
of the proposed Advance Date, and, if Borrower is required to deliver a written
Advance Request, Borrower shall have delivered to Bank an officer's certificate
to such effect, which may be incorporated in the Advance Request.
(d) No Adverse Change. There shall have been no change which could
have a Material Adverse Effect on the condition, financial or otherwise, of
Borrower, any Subsidiary or any Guarantor from such condition as it existed on
the date of the most recent financial statements of such Person delivered to
Bank from time to time.
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(e) Limitations Not Exceeded. As to the $7,000,000 Loan, the
proposed Advance shall not cause the outstanding principal balance of the
$7,000,000 Loan to exceed the lesser of the Maximum Loan Amount and the
Borrowing Base. If Borrower is required to deliver a written Advance Request,
Bank shall have received a current Accounts Receivable Report (as required by
Section 5.6) sufficient in form and substance to calculate and verify the
Borrowing Base. As to the $8,000,000 Loan, the proposed Advance shall not cause
the outstanding principal balance of the $8,000,000 Loan to exceed $8,000,000.
(f) No Termination. Bank shall (i) have timely received all
financial information from all Guarantors as required under the Loan Documents,
and (ii) not have received notice from any Guarantor or any surety terminating
or repudiating such Person's guaranty of the Indebtedness incurred by Borrower.
(g) New Subsidiary Acquisition Funded by Advances. As to Advances
under the $8,000,000 Loan, Borrower shall have delivered and Bank shall have
approved in its sole and absolute discretion: (i) a purchase contract or letter
of intent for the entity being acquired; (ii) two (2) most recent fiscal
year-end financial statements of the entity being acquired; (iii) a
consolidating three (3) year projection of Borrower, its subsidiaries and the
entity being acquired; and (iv) a covenant compliance certification as of each
fiscal year-end for the three (3) year projection period. At such time as an
entity is acquired by use of an Advance, such entity shall, upon the Advance,
become a guarantor of the $8,000,000 Loan and a guarantor of the $7,000,000
Loan. The new guarantor shall secure its guaranty by a first lien security
interest in all of its assets in favor of Bank. Borrower shall pay all of Bank's
reasonable out of pocket expenses incurred in connection with such
acquisition(s), which fees shall, per occurrence, not exceed $5,000 in the
aggregate.
(h) New Subsidiary Acquisition or Formation Not Funded by Advances.
As to the acquisition of a subsidiary or the formation of a new subsidiary not
otherwise funded by Advances under the $8,000,000 Loan, Borrower shall have
delivered (as applicable) and Bank shall have approved in its sole and absolute
discretion: (i) a purchase contract or letter of intent for the entity being
acquired; (ii) two (2) most recent fiscal year-end financial statements of the
entity being acquired; (iii) a consolidating three (3) year projection of
Borrower, its subsidiaries and the entity being acquired; and (iv) a covenant
compliance certification as of each fiscal year-end for the three (3) year
projection period. At such time as an entity is acquired or formed, such entity
shall, within sixty (60) days of said acquisition or formation, become a
guarantor of the $8,000,000 Loan and a guarantor of the $7,000,000 Loan. The new
guarantor shall secure its guaranty by a first lien security interest in all of
its assets in favor of Bank. Borrower shall pay all of Bank's reasonable out of
pocket expenses incurred in connection with such acquisition(s) or formation(s),
which fees shall, per occurrence, not exceed $5,000 in the aggregate.
(i) Further Assurances. Borrower shall have delivered such further
documentation or assurances as Bank may reasonably require.
4. REPRESENTATIONS AND WARRANTIES. In order to induce Bank to enter
into this Agreement and to make the Loan provided for herein, Borrower makes the
following representations and warranties, all of which shall survive the
execution and delivery of the Loan Documents. Unless otherwise specified, such
representations and warranties shall be deemed made as of the date hereof and as
of the Advance Date of any Advance by Bank to Borrower:
4.1. Valid Existence and Power. Each of Borrower and each Subsidiary
is a corporation duly organized, validly existing and in good standing under the
laws of the jurisdiction of its organization and is duly qualified or licensed
to transact business in all places where the failure to be so qualified would
have a Material Adverse Effect on it. Each of Borrower and each other Person
which is a party to any Loan Document (other than Bank) has the power to make
and perform the Loan Documents executed by it and all such instruments will
constitute the legal, valid and binding obligations of such Person, enforceable
in accordance with their respective terms, subject only to bankruptcy and
similar laws affecting creditors' rights generally. Borrower is organized under
the laws of Delaware and has not changed the jurisdiction of its organization
within the five years preceding the date hereof except as previously reported to
Bank.
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4.2. Authority. The execution, delivery and performance thereof by
Borrower and each other Person (other than Bank) executing any Loan Document
have been duly authorized by all necessary action of such Person, and do not and
will not violate any provision of law or regulation, or any writ, order or
decree of any court or governmental or regulatory authority or agency or any
provision of the governing instruments of such Person, and do not and will not,
with the passage of time or the giving of notice, result in a breach of, or
constitute a default or require any consent under, or result in the creation of
any Lien upon any property or assets of such Person pursuant to, any law,
regulation, instrument or agreement to which any such Person is a party or by
which any such Person or its respective properties may be subject, bound or
affected.
4.3. Financial Condition. Other than as disclosed in financial
statements delivered on or prior to the date hereof to Bank, neither Borrower
nor any Subsidiary nor (to the knowledge of Borrower) any Guarantor has any
direct or contingent obligations or liabilities (including any guarantees or
leases) or any material unrealized or anticipated losses from any commitments of
such Person except as described on Exhibit 4.3 (if any). All such financial
statements have been prepared in accordance with GAAP and fairly present the
financial condition of Borrower, Subsidiary or Guarantor, as the case may be, as
of the date thereof. Borrower is not aware of any material adverse fact (other
than facts which are generally available to the public and not particular to
Borrower, such as general economic or industry trends) concerning the conditions
or future prospects of Borrower or any Subsidiary or any Guarantor which has not
been fully disclosed to Bank, including any adverse change in the operations or
financial condition of such Person since the date of the most recent financial
statements delivered to Bank. Borrower is Solvent, and after consummation of the
transactions set forth in this Agreement and the other Loan documents, Borrower
will be Solvent.
4.4. Litigation. Except as disclosed on Exhibit 4.4 (if any), there
are no material suits or proceedings pending, or to the knowledge of Borrower
threatened, before any court or by or before any governmental or regulatory
authority, commission, bureau or agency or public regulatory body against or
affecting Borrower, any Subsidiary or (to Borrower's knowledge) any Guarantor,
or their assets, which if adversely determined would have a Material Adverse
Effect on the financial condition or business of Borrower, such Subsidiary or
such Guarantor.
4.5. Agreements, Etc. Neither Borrower nor any Subsidiary is a party
to any agreement or instrument or subject to any court order, governmental
decree or any charter or other corporate restriction, adversely affecting its
business, assets, operations or condition (financial or otherwise), nor is any
such Person in default in the performance, observance or fulfillment of any of
the obligations, covenants or conditions contained in any agreement or
instrument to which it is a party, or any law, regulation, decree, order or the
like.
4.6. Authorizations. All authorizations, consents, approvals and
licenses required under applicable law or regulation for the ownership or
operation of the property owned or operated by Borrower or any Subsidiary or for
the conduct of any business in which it is engaged have been duly issued and are
in full force and effect, and it is not in default, nor has any event occurred
which with the passage of time or the giving of notice, or both, would
constitute a default, under any of the terms or provisions of any part thereof,
or under any order, decree, ruling, regulation, closing agreement or other
decision or instrument of any governmental commission, bureau or other
administrative agency or public regulatory body having jurisdiction over such
Person, which default would have a Material Adverse Effect on such Person.
Except as noted herein, no approval, consent or authorization of, or filing or
registration with, any governmental commission, bureau or other regulatory
authority or agency is required with respect to the execution, delivery or
performance of any Loan Document.
4.7. Title. Each of Borrower and each Subsidiary has good title to
all of the assets shown in its financial statements free and clear of all Liens,
except Permitted Liens. Borrower alone has full ownership rights in all
Collateral.
4.8. Collateral. The security interests granted to Bank herein and
pursuant to any other Security Agreement (a) constitute and, as to subsequently
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acquired property included in the Collateral covered by the Security Agreement,
will constitute, security interests under the Code entitled to all of the
rights, benefits and priorities provided by the Code and (b) are, and as to such
subsequently acquired Collateral will be, fully perfected, superior and prior to
the rights of all third persons, now existing or hereafter arising, subject only
to Permitted Liens. All of the Collateral is intended for use solely in
Borrower's business.
4.9. Location. The chief executive office of Borrower where
Borrower's business records are located, all of Borrower's other places of
business and any other places where any Collateral is kept, are all located at
the addresses indicated on Exhibit 4.9. The Collateral is located and shall at
all times be kept and maintained only at Borrower's location or locations as
described on Exhibit 4.9 herein. No such Collateral is attached or affixed to
any real property so as to be classified as a fixture unless Bank has otherwise
agreed in writing. Borrower has not moved its chief executive office within the
five (5) years preceding the date hereof.
4.10. Taxes. Borrower and each Subsidiary have filed all federal and
state income and other tax returns which are required to be filed, and have paid
all taxes as shown on said returns and all taxes, including withholding, FICA
and ad valorem taxes, shown on all assessments received by it to the extent that
such taxes have become due. Neither Borrower nor any Subsidiary is subject to
any federal, state or local tax Liens nor has such Person received any notice of
deficiency or other official notice to pay any taxes. Borrower and each
Subsidiary have paid all sales and excise taxes payable by it.
4.11. Labor Law Matters. No goods or services have been or will be
produced by Borrower or any Subsidiary in violation of any applicable labor laws
or regulations or any collective bargaining agreement or other labor agreements
or in violation of any minimum wage, wage-and-hour or other similar laws or
regulations.
4.12. Accounts. Each Account, instrument, Chattel Paper and other
writing constituting any portion of the Collateral (a) is genuine and
enforceable in accordance with its terms except for such limits thereon arising
from bankruptcy and similar laws relating to creditors' rights; (b) is not
subject to any deduction or discount (other than as stated in the invoice and
disclosed to Bank), defense, set off, claim or counterclaim of a material nature
against Borrower except as to which Borrower has notified Bank in writing; (c)
is not subject to any other circumstances that would impair the validity,
enforceability or amount of such Collateral except as to which Borrower has
notified Bank in writing; (d) arises from a bona fide sale of goods or delivery
of services in the ordinary course and in accordance with the terms and
conditions of any applicable purchase order, contract or agreement; (e) is free
of all Liens other than Permitted Liens; and (f) is for a liquidated amount
maturing as stated in the invoice therefor. Each Account included in any Advance
Request, Borrowing Base Certificate, report or other document as an Eligible
Account or as an Eligible Unbilled Account meets all the requirements of an
Eligible Account or as an Eligible Unbilled Account set forth herein.
4.13. Judgment Liens. Neither Borrower nor any Subsidiary, nor any
of their assets, are subject to any unpaid judgments (whether or not stayed) or
any judgment liens in any jurisdiction.
4.14. Subsidiaries. If Borrower has any Subsidiaries, they are
listed on Exhibit 4.14.
4.15. Environmental. Except as disclosed on Exhibit 4.15, and except
for ordinary and customary amounts of solvents, cleaners and similar materials
used in the ordinary course of Borrower's business and in strict compliance with
all Environmental Laws, neither Borrower, nor to Borrower's best knowledge any
other previous owner or operator of any real property currently owned or
operated by Borrower, has generated, stored or disposed of any Regulated
Material on any portion of such property, or transferred any Regulated Material
from such property to any other location in violation of any applicable
Environmental Laws. Except as disclosed on Exhibit 4.15 to Borrower's best
knowledge, no Regulated Material has been generated, stored or disposed of on
any portion of the real property currently owned or operated by Borrower by any
other Person, or is now located on such property. Except as disclosed on Exhibit
4.15, to Borrower's best knowledge, Borrower is in full compliance with all
applicable Environmental Laws and Borrower has not been notified of any action,
suit, proceeding or investigation which calls into question compliance by
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Borrower with any Environmental Laws or which seeks to suspend, revoke or
terminate any license, permit or approval necessary for the generation,
handling, storage, treatment or disposal of any Regulated Material.
4.16. ERISA. Borrower has furnished to Bank true and complete copies
of the latest annual report required to be filed pursuant to Section 104 of the
Employee Retirement Income Security Act of 1974, as amended ("ERISA"), with
respect to each employee benefit plan or other plan maintained for employees of
Borrower or any Subsidiary and covered by Title IV of ERISA (a "Plan"), and no
Termination Event (as hereinafter defined) with respect to any Plan has occurred
and is continuing. For the purposes of this Agreement, a "Termination Event"
shall mean a "reportable event" as defined in Section 4043(b) of ERISA, or the
filing of a notice of intent to terminate under Section 4041 of ERISA. Neither
Borrower nor any Subsidiary has any unfunded liability with respect to any such
Plan.
4.17. Investment Company Act. Neither Borrower nor any Subsidiary is
an "investment company" as defined in the Investment Company Act of 1940, as
amended.
4.18. Names. Borrower currently conducts all business only under its
legal name as set forth above in the introductory section of this Agreement.
Except as disclosed on Exhibit 4.18, during the preceding five (5) years
Borrower has not (i) been known as or used any other corporate, fictitious or
trade name, (ii) been the surviving entity of a merger or consolidation or (iii)
acquired all or substantially all of the assets of any Person.
4.19. Insider. Borrower is not, and no Person having "control" (as
that term is defined in 12 U.S.C. ? 375(b)(5) or in regulations promulgated
pursuant thereto) of Borrower is, an "executive officer," "director," or
"principal shareholder" (as those terms are defined in 12 U.S.C. ? 375(b) or in
regulations promulgated pursuant thereto) of Bank, of a bank holding company of
which Bank is a subsidiary, or of any subsidiary of a bank holding company of
which Bank is a subsidiary.
4.20. Compliance with Covenants; No Default. Borrower is, and upon
funding of the Loan will be, in compliance with all of the covenants hereof. No
Default has occurred, and the execution, delivery and performance of the Loan
Documents and the funding of the Loan will not cause a Default.
4.21. Full Disclosure. There is no material fact which is known or
which should be known by Borrower that Borrower has not disclosed to Bank which
could have a Material Adverse Effect. No Loan Document, nor any agreement,
document, certificate or statement delivered by Borrower to Bank, contains any
untrue statement of a material fact or omits to state any material fact which is
known or which should be known by Borrower necessary to keep the other
statements from being misleading.
4.22. Additional Representations. Any additional representations or
warranties set forth on Exhibit 4.22 (if any) hereto are true and correct in all
material respects.
4.23. Perfection Certificate. All representations, warranties and
statements made by Borrower in the Perfection Certificate executed and delivered
by Borrower to Bank in connection with the Loan are true and correct as of the
date hereof.
4.24. SFBC New Drug Services, Inc. SFBC New Drug Services, Inc., a
Florida corporation, merged into SFBC Charlotte, Inc., a Florida corporation, as
evidenced by those certain Articles of Merger of SFBC New Drug Services, Inc., a
Florida corporation, filed with the Secretary of State of the State of Florida
on April 4, 2003. SFBC New Drug Services, Inc. was dissolved and is no longer
conducting any business. On April 4, 2003, the surviving entity, as a result of
the merger, SFBC Charlotte, Inc., a Florida corporation changed its name with
the Secretary of State of the State of Florida from SFBC Charlotte, Inc. to SFBC
New Drug Services, Inc., a Florida corporation.
5. AFFIRMATIVE COVENANTS OF BORROWER. Borrower covenants and agrees
that from the date hereof and until payment in full of the Indebtedness and the
formal termination of this Agreement, Borrower and each Subsidiary:
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5.1. Use of Loan Proceeds. Shall use the proceeds of the $7,000,000
Loan only for general corporation purposes, the proceeds of the $8,000,000 Loan
only for the acquisition of new entitles and shall furnish Bank all evidence
that it may reasonably require with respect to such uses.
5.2. Maintenance of Business and Properties. Shall at all times
maintain, preserve and protect all Collateral and all the remainder of its
material property used or useful in the conduct of its business, and keep the
same in good repair, working order and condition (subject to ordinary wear and
tear), and from time to time make, or cause to be made, all material needful and
proper repairs, renewals, replacements, betterments and improvements thereto so
that the business carried on in connection therewith may be conducted properly
and in accordance with standards generally accepted in businesses of a similar
type and size at all times, and maintain and keep in full force and effect all
licenses and permits necessary to the proper conduct of its business.
5.3. Insurance. Shall maintain such liability insurance, workers'
compensation insurance, business interruption insurance and casualty insurance
as may be required by law, customary and usual for prudent businesses in its
industry or as may be reasonably required by Bank and shall insure and keep
insured all Collateral and other properties in good and responsible insurance
companies satisfactory to Bank. All hazard insurance covering Collateral shall
be in amounts and shall contain co-insurance and deductible provisions approved
by Bank, shall name and directly insure Bank as secured party and loss payee
under a long-form New York standard loss payee clause acceptable to Bank, or its
equivalent, and shall not be terminable except upon 30 days' written notice to
Bank. Borrower shall maintain professional liability insurance for Borrower and
all domestic subsidiaries in an amount not less than $5,000,000.00 plus an
umbrella policy in an amount not less than $3,000,000.00. Such professional
liability insurance for all foreign subsidiaries shall be in an amount not less
than $3,000,000.00. Borrower shall furnish to Bank copies of all such policies.
5.4. Notice of Default. Shall provide to Bank immediate notice of
(a) the occurrence of a Default and what action (if any) Borrower is taking to
correct the same, (b) any material litigation or material changes in existing
material litigation or any judgment against it or its assets, (c) any material
damage or loss to property, (d) any notice from taxing authorities as to claimed
deficiencies or any tax lien or any notice relating to alleged ERISA violations,
(e) any Reportable Event, as defined in ERISA, (f) any rejection, return,
offset, dispute, loss or other circumstance having a Material Adverse Effect on
any Collateral, (g) the cancellation or termination of, or any default under,
any material agreement to which Borrower is a party or by which any of its
properties are bound, or any acceleration of the maturity of any Debt of
Borrower; and (h) any loss or threatened loss of material licenses or permits.
5.5. Inspections. Shall permit upon not less than three business
days' notice to the Borrower, inspections of the Collateral and the records of
such Person pertaining thereto and verification of the Accounts, at such times
during regular business hours, and in such manner as may be reasonably required
by Bank and shall further permit such inspections, reviews and field
examinations of its other records and its properties (with such reasonable
frequency and at such reasonable times as Bank may desire) by Bank as Bank may
reasonably deem necessary or desirable from time to time, but in no event more
often than twice each year provided an Event of Default shall not have occurred
or is continuing. The cost of such field examinations, reviews, verifications
and inspections shall be borne by Borrower with the aggregate costs and expenses
of each such examination not to exceed $5,000.
5.6. Financial Information. Shall maintain books and records in
accordance with GAAP and shall furnish to Bank the following periodic financial
information:
(a) Periodic Borrowing Base Information. Within thirty (30) days of
the end of each quarter (or more frequently if required by Bank), a completed
Borrowing Base Certificate in such form as Bank shall require (a "Borrowing Base
Certificate"). The Borrowing Base Certificate shall confirm that there is no
Default under the Loan and Borrower shall attach the following to such Borrowing
Base Certificate, which shall be certified by the chief financial officer or
president of Borrower to be accurate and complete and in compliance with the
terms of the Loan Documents: (i) a report listing all Accounts, all Eligible
Accounts, and all Eligible Unbilled Accounts of Borrower as of the last Business
Day of such month (an "Accounts Receivable Report") which shall include the
amount and age of each Account (including the original date of each invoice),
the name and mailing address of each Account Debtor, a detailing of all credits
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due such Account Debtor by Borrower stated in the number of days which have
elapsed since the date each such credit was issued by Borrower, a reconciliation
statement, and such other information as Bank may require in order to verify the
Eligible Accounts and the Eligible Unbilled Accounts, all in reasonable detail
and in form acceptable to Bank.
(b) No Default Certificates. Within forty-five (45) days of the end
of each quarter and within one hundred twenty 120 days of the end of each fiscal
year, a compliance certificate in form satisfactory to Bank and a certificate of
its president or chief financial officer that no Default then exists or if a
Default exists, the nature and duration thereof and Borrower's intention with
respect thereto, and in addition, shall cause Borrower's independent auditors
(if applicable) to submit to Bank, together with its audit report, a statement
that, in the course of such audit, it discovered no circumstances which it
believes would result in a Default or if it discovered any such circumstances,
the nature and duration thereof;
(c) 10-K Statements. Deliver to Bank, within one hundred twenty
(120) days of the end of Borrower's and Guarantor's fiscal year end, Borrower's
and Guarantor's 10-K Statements.
(d) 10-Q Statements. Deliver to Bank, quarterly within sixty (60)
days of the end of each such period, Borrower's and Guarantor's 10-Q Statements.
(e) Subsidiary. Should Borrower or Guarantor acquire or form a new
subsidiary during the term of the Loan, cause such new subsidiary to execute and
deliver to Bank an unconditional and unlimited guaranty acceptable in form and
substance to Bank, secured by new subsidiary's assets, within sixty (60) days of
such purchase or formation.
(f) Other Information. Such other information reasonably requested
by Bank from time to time concerning the business, properties or financial
condition of Borrower, Guarantor and their respective Subsidiaries.
5.7. Maintenance of Existence and Rights. Borrower will preserve and
maintain its corporate existence, authorities to transact business, rights and
franchises, trade names, patents, trademarks and permits necessary to the
conduct of its business.
5.8. Payment of Taxes, Etc. Shall pay before delinquent all of its
debts and taxes, except that Bank shall not unreasonably withhold its consent to
nonpayment of taxes being actively contested in accordance with law (provided
that Bank may require bonding or other assurances).
5.9. Subordination. Shall cause all debt and other obligations now
or hereafter owed to any Guarantor, Affiliate, or any shareholder of Borrower to
be subordinated in right of payment and security to the Indebtedness in
accordance with subordination agreements satisfactory to Bank.
5.10. Compliance; Hazardous Materials. Shall strictly comply with
all laws, regulations, ordinances and other legal requirements, specifically
including, without limitation, ERISA, all securities laws and all laws relating
to hazardous materials and the environment. Unless approved in writing by Bank,
neither Borrower nor any Subsidiary shall engage in the storage, manufacture,
disposition, processing, handling, use or transportation of any hazardous or
toxic materials, whether or not in compliance with applicable laws and
regulations.
5.11. Compliance with Assignment Laws. Shall if required by Bank
comply with the Federal Assignment of Claims Act and any other applicable law
relating to assignment of government contracts.
5.12. Further Assurances. Shall take such further action and provide
to Bank such further assurances as may be reasonably requested to ensure
compliance with the intent of this Agreement and the other Loan Documents.
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5.13. Covenants Regarding Collateral. Borrower makes the following
covenants with Bank regarding the Collateral:
(a) Borrower will use the Collateral only in the ordinary course of
its business and will not permit the Collateral to be used in violation of any
applicable law or policy of insurance;
(b) Borrower, as agent for Bank, will defend the Collateral against
all claims and demands of all Persons, except for Permitted Liens;
(c) Borrower will, at Bank's request, obtain and deliver to Bank
such waivers as Bank may require waiving the landlord's, mortgagee's or other
lienholder's enforcement rights against the Collateral and assuring Bank's
reasonable access to the Collateral during normal business hours, in exercise of
its rights hereunder;
(d) Borrower will promptly deliver to Bank all promissory notes,
drafts, trade acceptances, chattel paper, instruments or documents of title
which are Collateral in tangible form, appropriately endorsed to Bank's order,
and Borrower will not create any electronic chattel paper without taking all
steps deemed necessary to confer control of the electronic chattel paper upon
Bank in accordance with the Code;
(e) Except for sales of Inventory in the ordinary course of
business, Borrower will not sell, assign, lease, transfer, pledge, hypothecate
or otherwise dispose of or encumber any Collateral or any interest therein with
a book value over $1,000,000.00 without the Bank's prior written consent; and
(f) Borrower shall promptly notify Bank of any future patents,
trademarks or copyrights owned by Borrower and any license agreements entered
into by Borrower authorizing Borrower to use any patents, trademarks or
copyrights owned by third parties.
6. NEGATIVE COVENANTS OF BORROWER. Borrower covenants and agrees that
from the date hereof and until payment in full of the Indebtedness and the
formal termination of this Agreement, Borrower and each Subsidiary:
6.1. Debt. Shall not create or permit to exist any Debt, including
any guaranties or other contingent obligations, except Permitted Debt.
6.2. Liens. Shall not create or permit any Liens on any of its
property except Permitted Liens.
6.3. Dividends. Shall not pay or declare any dividends (other than
stock dividends) or other distribution or purchase, redeem or otherwise acquire
any stock or other equity interests (including payments by Borrower from the
"NDS Earn out" and/or the "Clinical Pharmacology Earn out") pay or acquire any
debt subordinate to the Indebtedness unless, after giving effect thereto, there
shall be no Default hereunder and such payment or acquisition is specifically
permitted by Exhibit 6.3 hereto (if any); provided, however, that any Subsidiary
may pay dividends to Borrower or another Subsidiary wholly-owned by Borrower.
6.4. Loans and Other Investments. Shall not make or permit to exist
any advances or loans to, or guarantee or become contingently liable, directly
or indirectly, in connection with the obligations, leases, stock or dividends
of, or own, purchase or make any commitment to purchase any stock, bonds, notes,
debentures or other securities of, or any interest in, or make any capital
contributions to (all of which are sometimes collectively referred to herein as
"Investments") any Person except for (a) purchases of direct obligations of the
federal government, (b) deposits in commercial banks, (c) commercial paper of
any U.S. corporation having the highest ratings then given by the Xxxxx'x
Investors Services, Inc. or Standard & Poor's Corporation, (d) existing
investments in Subsidiaries, (e) endorsement of negotiable instruments for
collection in the ordinary course of business, and (f) advances to employees for
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business travel and other expenses incurred in the ordinary course of business
which do not at any time exceed $25,000 in the aggregate.
6.5. Change in Business. Shall not enter into any business which is
substantially different from the business in which it is presently engaged.
Borrower may enter into any business which provides goods and/or services to
pharmaceutical, biotechnology and drug development services companies.
6.6. Accounts. (a) Shall not sell, assign or discount any of its
Accounts, Chattel Paper or any promissory notes held by it other than the
discount of such Accounts or notes in the ordinary course of business for
collection; and (b) shall notify Bank promptly in writing of any discount,
offset or other deductions not shown on the face of an Account invoice and any
dispute over an Account, and any information relating to an adverse change in
any Account Debtor's financial condition or ability to pay its obligations.
6.7. Transactions with Affiliates. Shall not directly or indirectly
purchase, acquire or lease any property from, or sell, transfer or lease any
property to, pay any management fees to or otherwise deal with, in the ordinary
course of business or otherwise, any Affiliate (other than a Subsidiary);
provided, however, that any acts or transactions prohibited by this Section may
be performed or engaged in (after written notice to Bank) if upon terms not less
favorable to Borrower or such Subsidiary than if no such relationship existed.
6.8. No Change in Name, Offices Jurisdiction of Organization;
Removal of Collateral. Shall not, unless it shall have given 60 days' advance
written notice thereof to Bank, (a) change its name or the location of its chief
executive office or other office where books or records are kept, or change the
jurisdiction in which the Borrower is organized, or (b) permit any Inventory or
other tangible Collateral to be located at any location other than as specified
in Section 4.9 the Perfection Certificate.
6.9. No Sale, Leaseback. Shall not enter into any sale-and-leaseback
or similar transaction.
6.10. Margin Stock. Shall not use any proceeds of the Loan to
purchase or carry any margin stock (within the meaning of Regulation U of the
Board of Governors of Federal Reserve System) or extend credit to others for the
purpose of purchasing or carrying any margin stock. Notwithstanding the
foregoing, for so long as Borrower is in compliance with the terms and
conditions of this Agreement and after giving effect thereto, there shall be no
Default hereunder, Borrower may continue its scheduled program to buy back up to
750,000 shares of its common stock.
6.11. Tangible Collateral. Shall not, except as otherwise provided
herein, allow any Inventory or other tangible Collateral to be commingled with,
or become an accession to or part of, any property of any other Person so long
as such property is Collateral; nor allow any tangible Collateral to become a
fixture unless Bank shall have given its prior written authorization.
6.12. Change of Ownership. Except in furtherance of an acquisition
of an entity, as permitted under the $8,000,000 Note, Borrower shall not,
without the prior written consent of Bank, permit a "change in control" to
occur. Within the foregoing limit, Borrower and any Subsidiary may issue stock,
options and warrants in compliance with existing employment/pension plans. In no
event shall Borrower cease (on a fully diluted basis) to own and control less
than a majority of the voting equity interests of any of Borrower's
Subsidiaries, without the prior written consent of Bank. For the purposes of
this Paragraph, a "change in control" shall mean (i) a merger or consolidation
with or into an entity other than any wholly owned subsidiary of Borrower
whereby Borrower is not the surviving entity; (ii) the sale of all or
substantially all of the assets of Borrower to another entity; or (iii) a
transaction whereby any entity or person not now an executive officer or
director of Borrower becomes, either individually or as part of a group, a
direct beneficial owner of 50.1% (or more) of the stock of Borrower.
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6.13. Use of Additional Name. Shall give Bank thirty (30) days prior
written notice of any new trade or fictitious name. Borrower's use of any trade
or fictitious name shall be in compliance with all laws regarding the use of
such names.
6.14. Liquidation, Mergers, Consolidations and Dispositions of
Substantial Assets. Shall not dissolve or liquidate, or become a party to any
merger or consolidation, or sell, transfer, lease or otherwise dispose of all or
more than $1,000,000.00, in the aggregate during the term hereof, of its
property or assets or sell or dispose of any equity ownership interests in any
Subsidiary except for (a) any merger, consolidation, sale, transfer, conveyance,
lease or assignment of or by any Subsidiary of Borrower with or to any other
Subsidiary of Borrower, any purchase or other acquisition by the Borrower or any
Subsidiary of the assets or stock of any other Subsidiary, and sales and
dispositions of assets (including the stock of Subsidiaries) for at least fair
market value (as determined by the board of directors of Borrower) so long as
the net book value of all assets sold or otherwise disposed of in any fiscal
year does not exceed 10% of the Tangible Net Worth as of the last day of the
preceding fiscal year. Borrower shall not acquire by acquisition, merger or
otherwise, all or a substantial part of the assets of any Person unless Borrower
is in compliance with the terms and conditions of this Agreement and after
giving effect thereto, there shall be no Default hereunder.
6.15. Change of Fiscal Year or Accounting Methods. Shall not change
its fiscal year or its accounting methods.
6.16. Cross-Default. Shall not default in payment or performance of
any obligation under any other loans, contracts, or agreements of Borrower, any
subsidiary or affiliate of Borrower, any general partner of or the holder(s) of
the majority ownership interests of Borrower, with Bank or its affiliates.
6.17. Guarantees. Guarantee or otherwise become responsible for
obligations of any other person, corporation or entity other than the
endorsement of checks and drafts for collection in the ordinary course of
business for collection.
6.18. Management. Replace or otherwise remove Xxxx Xxxxxxx, M.D.,
and/or Xx. Xxxxxx Xxxxxxx from their respective executive positions with the
Borrower.
7. OTHER COVENANTS OF BORROWER. Borrower and each Guarantor covenant
and agree that from the date hereof and until payment in full of the
Indebtedness and the formal termination of this Agreement, Borrower and each
Guarantor shall comply with the following additional covenants:
7.1 Leverage Ratio. Borrower and each Guarantor shall, at all times,
maintain a consolidated aggregate Leverage Ratio of not more than .75 to 1.0.
"Leverage Ratio" shall be measured as the ratio of aggregate Total Liabilities
of the Borrower and Guarantor divided by aggregate Tangible Net Worth of the
Borrower and Guarantor and shall be tested quarterly. "Total Liabilities" shall
mean the aggregate of all liabilities of Borrower and Guarantor, including
capitalized leases and all reserves for deferred taxes, debt fully subordinated
to Bank on terms and conditions acceptable to Bank, and other deferred sums
appearing on the liabilities side of a balance sheet of Borrower and Guarantor,
in accordance with generally accepted accounting principles applied on a
consistent basis. "Tangible Net Worth" shall mean the aggregate of Borrower's
and Guarantor's total assets minus Total Liabilities. For purposes of this
computation, the aggregate amount of any intangible assets of Borrower or
Guarantor including, without limitation, goodwill, franchises, licenses,
patents, trademarks, trade names, copyrights, service marks, and brand names,
shall be subtracted from total assets.
7.2 Debt Service Coverage Ratio. Borrower and Guarantor shall
maintain a Consolidated Debt Service Coverage Ratio of not less than 3.0 to 1.0,
to be calculated annually at each fiscal year-end. "Consolidated Debt Service
Coverage Ratio" means the ratio of the aggregate net profit of Borrower and
14
Guarantor after tax, plus depreciation and amortization, less, unfinanced
capital expenditures, less, dividends, divided by the paid current portion of
long term debt, including capitalized leases during each period.
7.3 Liquidity Covenant. Borrower and domestic Guarantor shall
maintain an aggregate of unencumbered aggregate cash liquidity equal to the then
lesser of (i) $3,000,000.00 or (ii) the aggregate outstanding balance under the
$7,000,000 Note and the $8,000,000 Note.
7.4 Deposit Relationship. Borrower and Guarantor shall maintain its
primary depository account with Bank.
8. DEFAULT.
8.1. Events of Default. Each of the following shall constitute an
Event of Default:
(a) There shall occur any default by Borrower in the payment, when
due, of any principal of or interest on the $7,000,000 Note or the $8,000,000
Note, any amounts due hereunder or any other Loan Document, or any other
Indebtedness and the continuance thereof for 10 business days; or
(b) There shall occur any material default by Borrower or any other
party to any Loan Document (other than Bank) in the performance of any
agreement, covenant or obligation contained in this Agreement or such Loan
Document not provided for elsewhere in this Section 8 which default shall
continue for a period of more than 10 business days; or
(c) Any representation or warranty made by Borrower or any other
party to any Loan Document (other than Bank) herein or therein or in any
certificate or report furnished in connection herewith or therewith shall prove
to have been untrue or incorrect in any material respect when made; or
(d) Any other obligation now or hereafter owed by Borrower or any
Subsidiary or Guarantor to Bank shall be in default and not cured within the
grace period, if any, provided therein; or
(e) Borrower or any Subsidiary or Guarantor shall (A) voluntarily
dissolve, liquidate or terminate operations or apply for or consent to the
appointment of, or the taking of possession by, a receiver, custodian, trustee
or liquidator of such Person or of all or of a substantial part of its assets,
(B) admit in writing its inability, or be generally unable, to pay its debts as
the debts become due, (C) make a general assignment for the benefit of its
creditors, (D) commence a voluntary case under the federal Bankruptcy Code (as
now or hereafter in effect), (E) file a petition seeking to take advantage of
any other law relating to bankruptcy, insolvency, reorganization, winding-up, or
composition or adjustment of debts, (F) fail to controvert in a timely and
appropriate manner, or acquiesce in writing to, any petition filed against it in
an involuntary case under Bankruptcy Code, or (G) take any corporate action for
the purpose of effecting any of the foregoing; or
(f) An involuntary petition or complaint shall be filed against
Borrower or any Subsidiary or any Guarantor seeking bankruptcy relief or
reorganization or the appointment of a receiver, custodian, trustee, intervenor
or liquidator of Borrower or any Subsidiary or any Guarantor, of all or
substantially all of its assets, and such petition or complaint shall not have
been dismissed within ninety (90) days of the filing thereof; or an order, order
for relief, judgment or decree shall be entered by any court of competent
jurisdiction or other competent authority approving or ordering any of the
foregoing actions;
(g) There shall occur any material loss, theft, damage or
destruction of any of the Collateral, which loss is not insured within
commercially reasonable limits; or
(h) A judgment in excess of $10,000 shall be rendered against the
Borrower or any Subsidiary or Guarantor and shall remain undischarged,
undismissed and unstayed for more than 30 days (except judgments validly covered
by cash or a bond with a deductible of not more than $100,000) after the filing
of such judgment or there shall occur any levy upon, or attachment, garnishment
or other seizure of, any material portion of the Collateral or other assets of
Borrower, any Subsidiary or any Guarantor by reason of the issuance of any tax
levy, judicial attachment or garnishment or levy of execution in an amount in
15
excess of $100,000 which levy, attachment, garnishment or seizure shall remain
undischarged, undismissed, undissolved or unstayed for more than 30 days after
the entry of the same; or
(i) Borrower, any Subsidiary or any Guarantor shall fail to pay, on
demand, any returned or dishonored draft, check, or other item which has been
deposited to the Collections Account or the Demand Deposit Account or otherwise
presented to Bank and for which Borrower has received provisional credit; or
(j) Any Guarantor shall repudiate or revoke any Guaranty Agreement;
or
(k) Loss, theft, damage or destruction of any material portion of
the tangible Collateral for which there is either no insurance coverage or for
which, in the reasonable opinion of Bank, there is insufficient insurance
coverage; or
(l) There shall occur any change in the condition (financial or
otherwise) of Borrower and/or any Guarantor which, in the reasonable opinion of
Bank, could have a Material Adverse Effect;
(m) The death of the holder of the majority ownership interests of
Borrower; or
(n) Borrower or any Subsidiary shall suffer a material change in
ownership or a "change in control" as set forth in Section 6.12.
8.2. Remedies. If any Default shall occur, Bank may, without notice
to Borrower, at its option, withhold further Advances to Borrower. If an Event
of Default shall have occurred and be continuing, Bank may at its option take
any or all of the following actions:
(a) Bank may declare any or all Indebtedness to be immediately due
and payable (if not earlier demanded), terminate its obligation to make Advances
to Borrower, bring suit against Borrower to collect the Indebtedness, exercise
any remedy available to Bank hereunder or at law and take any action or exercise
any remedy provided herein or in any other Loan Document or under applicable
law. No remedy shall be exclusive of other remedies or impair the right of Bank
to exercise any other remedies.
(b) Without waiving any of its other rights hereunder or under any
other Loan Document, Bank shall have all rights and remedies of a secured party
under the Code (and the Uniform Commercial Code of any other applicable
jurisdiction) and such other rights and remedies as may be available hereunder,
under other applicable law or pursuant to contract. If requested by Bank,
Borrower will promptly assemble the Collateral and make it available to Bank at
Borrower's or Guarantor's place of business, as the case may be. Borrower agrees
that any notice by Bank of the sale or disposition of the Collateral or any
other intended action hereunder, whether required by the Code or otherwise,
shall constitute reasonable notice to Borrower if the notice is sent to Borrower
by receipted federal express or other overnight courier service, first morning
delivery, at least five days before the action to be taken. Borrower shall be
liable for any deficiencies in the event the proceeds of the disposition of the
Collateral do not satisfy the Indebtedness in full.
(c) Bank may demand, collect and xxx for all amounts owed pursuant
to Accounts, General Intangibles, Chattel Paper or for proceeds of any
Collateral (either in Borrower's name or Bank's name at the latter's option),
with the right to enforce, compromise, settle or discharge any such amounts.
8.3. Receiver. In addition to any other remedy available to it, Bank
shall have the absolute right, upon the occurrence of an Event of Default (after
the expiration of Borrower's right to cure, if any), to seek and obtain the
appointment of a receiver to take possession of and operate and/or dispose of
the business and assets of Borrower and any costs and expenses incurred by Bank
in connection with such receivership shall bear interest at the Default Rate, at
Bank's option, and shall be secured by all Collateral.
16
8.4. Deposits; Insurance. After the occurrence of an Event of
Default, Borrower authorizes Bank to collect and apply against the Indebtedness
when due any cash or deposit accounts in its possession, and any refund of
insurance premiums or any insurance proceeds payable on account of the loss or
damage to any of the Collateral and irrevocably appoints Bank as its
attorney-in-fact to endorse any check or draft or take other action necessary to
obtain such funds.
9. SECURITY AGREEMENT.
9.1. Security Interest.
(a) As security for the payment and performance of any and all of
the Indebtedness and the performance of all other obligations and covenants of
Borrower hereunder and under the other Loans Documents, certain or contingent,
now existing or hereafter arising, which are now, or may at any time or times
hereafter be owing by Borrower to Bank, Borrower hereby pledges to Bank and
gives Bank a continuing security interest in and general Lien upon and right of
set-off against, all right, title and interest of Borrower in and to the
Collateral, whether now owned or hereafter acquired by Borrower.
(b) Except as herein or by applicable law otherwise expressly
provided, Bank shall not be obligated to exercise any degree of care in
connection with any Collateral in its possession, to take any steps necessary to
preserve any rights in any of the Collateral or to preserve any rights therein
against prior parties, and Borrower agrees to take such steps. In any case Bank
shall be deemed to have exercised reasonable care if it shall have taken such
steps for the care and preservation of the Collateral or rights therein whether
Borrower may have reasonably requested Bank to take such actions or not;
however, Bank's omission to take any action requested by Borrower shall not be
deemed a failure to exercise reasonable care. No segregation or specific
allocation by Bank of specified items of Collateral against any liability of
Borrower shall waive or affect any security interest in or Lien against other
items of Collateral or any of Bank's options, powers or rights under this
Agreement or otherwise arising.
(c) Following the occurrence of an Event of Default (after the
expiration of Borrower's right to cure, if any), Bank may thereafter at any time
and from time to time, with notice to Borrower, (i) transfer into the name of
Bank or the name of Bank's nominee any of the Collateral, (ii) notify any
Account Debtor or other obligor of any Collateral to make payment thereon direct
to Bank of any amounts due or to become due thereon and (iii) receive and after
a Default direct the disposition of any proceeds of any Collateral.
9.2. Net Cash Position
(a) Until the earlier of (i) notification by Bank to Borrower or
(ii) the occurrence of a Default, all collected balances held in the Collections
Account shall be considered in calculating the Net Cash Position.
(b) Upon the earlier of (i) notification by Bank to Borrower or (ii)
the occurrence of a Default, in Bank's sole discretion, all collected balances
held in the Collections Account shall not be considered in calculating the Net
Cash Position.
9.3. Power of Attorney. Borrower authorizes Bank at Borrower's
expense to file any financing statements relating to the Collateral (without
Borrower's signature thereon) which Bank deems appropriate and Borrower
irrevocably appoints Bank as its attorney-in-fact to execute any such financing
statements and/or control agreements in Borrower's name and to perform all other
acts, at Borrower's expense, which Bank deems appropriate to perfect and to
continue perfection of the security interest of Bank. Borrower hereby appoints
Bank as Borrower's attorney-in-fact to endorse, present and collect on behalf of
Borrower and in Borrower's name any draft, checks or other documents necessary
or desirable to collect any amounts which Borrower may be owed. Following the
occurrence of an Event of Default (after the expiration of Borrower's right to
cure, if any) Bank is hereby granted a license or other right to use, without
charge, Borrower's labels, patents, copyrights, rights of use of any name, trade
secrets, trade names, trademarks and advertising matter, or any Property of a
similar nature, as it pertains to the Collateral, in advertising for sale and
selling any Collateral, and Borrower's rights under all licenses and all
franchise agreements shall inure to Bank's benefit. The proceeds realized from
the sale or other disposition of any Collateral may be applied, after allowing
17
two (2) Business Days for collection, first to the reasonable costs, expenses
and reasonable attorneys' fees and expenses incurred by Bank for collection and
for acquisition, completion, protection, removal, storage, sale and delivering
of the Collateral; secondly, to interest due upon any of the Indebtedness; and
thirdly, to the principal amount of the Indebtedness. If any deficiency shall
arise, Borrower and each Guarantor shall remain jointly and severally liable to
Bank therefor.
9.4. Entry. Borrower hereby irrevocably consents to any act by Bank
or its agents in entering upon any premises during normal business hours, upon
reasonable notice, but in no event more often than twice annually provided that
an Event of Default has not occurred or is continuing, for the purposes of
either (i) inspecting the Collateral or (ii) following the occurrence of an
Event of Default (after the expiration of Borrower's right to cure, if any)
taking possession of the Collateral and Borrower hereby waives its right to
assert against Bank or its agents any claim based upon trespass or any similar
cause of action for entering upon any premises where the Collateral may be
located.
9.5. Other Rights. After an Event of Default has occurred and after
expiration of any cure period, Borrower authorizes Bank without affecting
Borrower's obligations hereunder or under any other Loan Document from time to
time (i) to take from any party and hold additional Collateral or guaranties for
the payment of the Indebtedness or any part thereof, and to exchange, enforce or
release such collateral or guaranty of payment of the Indebtedness or any part
thereof and to release or substitute any endorser or guarantor or any party who
has given any security interest in any collateral as security for the payment of
the Indebtedness or any part thereof or any party in any way obligated to pay
the Indebtedness or any part thereof; and (ii) upon the occurrence of any Event
of Default to direct the manner of the disposition of the Collateral and the
enforcement of any endorsements, guaranties, letters of credit or other security
relating to the Indebtedness or any part thereof as Bank in its sole discretion
may determine.
9.6. Accounts. Following the occurrence of an Event of Default
(after the expiration of Borrower's right to cure, if any), Bank may notify any
Account Debtor of Bank's security interest and may direct such Account Debtor to
make payment directly to Bank for application against the Indebtedness. Any such
payments received by or on behalf of Borrower at any time, whether before or
after default, shall be the property of Bank, shall be held in trust for Bank
and not commingled with any other assets of any Person (except to the extent
they may be commingled with other assets of Borrower in an account with Bank)
and shall be immediately delivered to Bank in the form received. Bank shall have
the right to apply any proceeds of Collateral to such of the Indebtedness as it
may determine.
9.7. Waiver of Marshaling. Following the occurrence of an Event of
Default (after the expiration of Borrower's right to cure, if any) Borrower
hereby waives any right it may have to require marshaling of its assets.
9.8 Control. Borrower will cooperate with Bank in obtaining control
of, or control agreements with respect to, Collateral for which control or a
control agreement is required for perfection of the Bank's security interest
under the Code.
10. MISCELLANEOUS.
10.1. No Waiver, Remedies Cumulative. No failure on the part of Bank
to exercise, and no delay in exercising, any right hereunder or under any other
Loan Document shall operate as a waiver thereof, nor shall any single or partial
exercise of any right hereunder preclude any other or further exercise thereof
or the exercise of any other right. The remedies herein provided are cumulative
and are in addition to any other remedies provided by law, any Loan Document or
otherwise.
10.2. Survival of Representations. All representations and
warranties made herein shall survive the making of the Loan hereunder and the
delivery of the $7,000,000 Note and $8,000,000 Note, and shall continue in full
force and effect so long as any Indebtedness is outstanding, there exists any
commitment by Bank to Borrower, and until this Agreement expires in accordance
with its terms.
18
10.3. Indemnity By Borrower; Expenses. In addition to all other
Indebtedness, Borrower agrees to defend, protect, indemnify and hold harmless
Bank and its Affiliates and all of their respective officers, directors,
employees, attorneys, consultants and agents from and against any and all
losses, damages, liabilities, obligations, penalties, fees, costs and expenses
(including, without limitation, reasonable attorneys' and paralegals' fees,
costs and expenses) incurred by such indemnitees, whether prior to or from and
after the date hereof, as a result of or arising from or relating to (i) the due
diligence effort (including, without limitation, public record search, recording
fees, examinations and investigations of the properties of Borrower and
Borrower's operations), negotiation, preparation, execution and/or performance
of any of the Loan Documents or of any document executed in connection with the
transactions contemplated thereby and the perfection of Bank's Liens in the
Collateral, maintenance of the Loan by Bank, and any and all amendments,
modifications, and supplements of any of the Loan Documents or restructuring of
the Indebtedness, (ii) any suit, investigation, action or proceeding by any
Person (other than Borrower), whether threatened or initiated, asserting a claim
for any legal or equitable remedy against any Person under any statute,
regulation or common law principle, arising from or in connection with Bank's
furnishing of funds to Borrower under this Agreement, (iii) Bank's preservation,
administration and enforcement of its rights under the Loan Documents and
applicable law, including the reasonable fees and disbursements of counsel for
Bank in connection therewith, whether suit be brought or not and whether
incurred at trial or on appeal, and all costs of repossession, storage,
disposition, protection and collection of Collateral, (iv) periodic field exams,
audits and appraisals performed by Bank and/or (v) any matter relating to the
financing transactions contemplated by the Loan Documents or by any document
execution in connection with the transactions contemplated thereby, other than
for such loss, damage, liability, obligation, penalty, fee, cost or expense
arising from such indemnitee's gross negligence or willful misconduct. If
Borrower should fail to pay any tax or other amount required by this Agreement
to be paid or which may be reasonably necessary to protect or preserve any
Collateral or Borrower's or Bank's interests therein, Bank may make such payment
and the amount thereof shall be payable on demand, shall bear interest at the
Default Rate from the date of demand until paid and shall be deemed to be
Indebtedness entitled to the benefit and security of the Loan Documents. In
addition, Borrower agrees to pay and save Bank harmless against any liability
for payment of any state documentary stamp taxes, intangible taxes or similar
taxes (including interest or penalties, if any) which may now or hereafter be
determined to be payable in respect to the execution, delivery or recording of
any Loan Document or the making of any Advance, whether originally thought to be
due or not, and regardless of any mistake of fact or law on the part of Bank or
Borrower with respect to the applicability of such tax. Borrower's obligation
for indemnification for all of the foregoing losses, damages, liabilities,
obligations, penalties, fees, costs and expenses of Bank shall be part of the
Indebtedness, secured by the Collateral, chargeable against Borrower's loan
account, and shall survive termination of this Agreement.
10.4. Notices. Any notice or other communication hereunder under the
Note to any party hereto or thereto shall be by hand delivery, overnight
delivery, facsimile, telegram, telex or registered or certified mail and unless
otherwise provided herein shall be deemed to have been given or made when
delivered, telegraphed, telexed, faxed or three (3) Business Days after having
been deposited in the mails, postage prepaid, addressed to the party at its
address specified below (or at any other address that the party may hereafter
specify to the other parties in writing):
Bank: Commercial Notices
Wachovia Bank, National Association
Mail Code VA7391
X.X. Xxx 00000
Xxxxxxx, Xxxxxxxx 00000
With a copy to: Wachovia Bank, National Association
000 X. Xxxxxxxx Xxxxxxxxx, 00xx Xxxxx
Xxxxx, Xxxxxxx 00000
Attn: Xxxxxx X. Xxxxxxxx
19
Borrower: SFBC International, Inc.
00000 Xxxxxxxx Xxxxxxxxx
Xxxxx Xxxxx, Xxxxxxx 00000
Attn: Xxxxx Xxxxx
10.5. Governing Law. This Agreement and the Loan Documents shall be
deemed contracts made under the laws of the State of the Jurisdiction and shall
be governed by and construed in accordance with the laws of said state
(excluding its conflict of laws provisions if such provisions would require
application of the laws of another jurisdiction) except insofar as the laws of
another jurisdiction may, by reason of mandatory provisions of law, govern the
perfection, priority and enforcement of security interests in the Collateral.
10.6. Successors and Assigns. This Agreement shall be binding upon
and shall inure to the benefit of Borrower and Bank, and their respective
successors and assigns; provided, that Borrower may not assign any of its rights
hereunder without the prior written consent of Bank, and any such assignment
made without such consent will be void.
10.7. Counterparts. This Agreement may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which when so executed and delivered shall be deemed an original and all of
which when taken together shall constitute but one and the same instrument.
10.8. No Usury. Regardless of any other provision of this Agreement,
the Note or in any other Loan Document, if for any reason the effective interest
should exceed the maximum lawful interest, the effective interest shall be
deemed reduced to, and shall be, such maximum lawful interest, and (i) the
amount which would be excessive interest shall be deemed applied to the
reduction of the principal balance of the Note and not to the payment of
interest, and (ii) if the loan evidenced by the Note has been or is thereby paid
in full, the excess shall be returned to the party paying same, such application
to the principal balance of the Note or the refunding of excess to be a complete
settlement and acquittance thereof.
10.9. Powers. All powers of attorney granted to Bank are coupled
with an interest and are irrevocable.
10.10. Approvals. If this Agreement calls for the approval or
consent of Bank, such approval or consent may be given or withheld in the
reasonable discretion of Bank unless otherwise specified herein.
10.11. Binding Arbitration; Preservation of Remedies.
(a) Binding Arbitration. Upon demand of any party hereto, whether
made before or after institution of any judicial proceeding, any claim or
controversy arising out of, or relating to the Loan Documents ("Disputes")
between the parties hereto (a "Dispute") shall be resolved by binding
arbitration conducted under and governed by the Commercial Financial Disputes
Arbitration Rules (the "Arbitration Rules") of the American Arbitration
Association (the "AAA") and the Federal Arbitration Act in Miami, FL. Disputes
may include, without limitation, tort claims, counterclaims, disputes as to
whether a matter is subject to arbitration, claims brought as class actions, or
claims arising from documents executed in the future. A judgment upon the award
may be entered in any court having jurisdiction. Notwithstanding the foregoing,
this arbitration provision does not apply to disputes under or related to swap
agreements.
(b) Special Rules. All arbitration hearings shall be conducted in
the city in which the office of Bank first stated above is located. A hearing
shall begin within 90 days of demand for arbitration and all hearings shall be
concluded within 120 days of demand for arbitration. These time limitations may
not be extended unless a party shows cause for extension and then for no more
than a total of 60 days. The expedited procedures set forth in Rule 51 et seq.
of the Arbitration Rules shall be applicable to claims of less than $1,000,000.
Arbitrators shall be licensed attorneys selected from the Commercial Financial
Dispute Arbitration Panel of the AAA. The parties do not waive applicable
Federal or state substantive law except as provided herein.
20
(c) Preservation and Limitation of Remedies. Notwithstanding the
preceding binding arbitration provisions, the parties agree to preserve, without
diminution, certain remedies that any party may exercise before or after an
arbitration proceeding is brought. The parties shall have the right to proceed
in any court of proper jurisdiction or by self-help to exercise or prosecute the
following remedies, as applicable: (i) all rights to foreclose against any real
or personal property or other security by exercising a power of sale or under
applicable law by judicial foreclosure including a proceeding to confirm the
sale; (ii) all rights of self-help including peaceful occupation of real
property and collection of rents, set-off, and peaceful possession of personal
property; (iii) obtaining provisional or ancillary remedies including injunctive
relief, sequestration, garnishment, attachment, appointment of receiver and
filing an involuntary bankruptcy proceeding; and (iv) when applicable, a
judgment by confession of judgment. Any claim or controversy with regard to the
parties' entitlement to such remedies is a Dispute.
(d) No Punitive Damages. Each party agrees that it shall not have a
remedy of punitive or exemplary damages against the other in any Dispute and
hereby waives any right or claim to punitive or exemplary damages it may have
now or which may arise in the future in connection with any Dispute, whether the
Dispute is resolved by arbitration or judicially.
(e) Waiver of Jury Trial. The parties acknowledge that by agreeing
to binding arbitration they have irrevocably waived any right they may have to a
jury trial with regard to a Dispute.
10.12. Participations. Bank shall have the right to enter into one
or more participation with other lenders with respect to the Indebtedness. Upon
prior notice to Borrower of such participation, Borrower shall thereafter
furnish to such participant any information furnished by Borrower to Bank
pursuant to the terms of the Loan Documents. Nothing in this Agreement or any
other Loan Document shall prohibit Bank from pledging or assigning this
Agreement and Bank's rights under any of the other Loan Documents, including
collateral therefor, to any Federal Reserve Bank in accordance with applicable
law.
10.13. Dealings with Multiple Borrowers. If more than one Person is
named as Borrower hereunder, all Indebtedness, representations, warranties,
covenants and indemnities set forth in the Loan Documents to which such Person
is a party shall be joint and several. Bank shall have the right to deal with
any individual of any Borrower with regard to all matters concerning the rights
and obligations of Bank hereunder and pursuant to applicable law with regard to
the transactions contemplated under the Loan Documents. All actions or inactions
of the officers, managers, members and/or agents of any Borrower with regard to
the transactions contemplated under the Loan Documents shall be deemed with full
authority and binding upon all Borrowers hereunder. Each Borrower hereby
appoints each other Borrower as its true and lawful attorney-in-fact, with full
right and power, for purposes of exercising all rights of such Person hereunder
and under applicable law with regard to the transactions contemplated under the
Loan Documents. The foregoing is a material inducement to the agreement of Bank
to enter into the terms hereof and to consummate the transactions contemplated
hereby.
10.14. Waiver of Certain Defenses. To the fullest extent permitted
by applicable law, upon the occurrence of any Event of Default, neither Borrower
nor anyone claiming by or under Borrower will claim or seek to take advantage of
any other law requiring Bank to attempt to realize upon any Collateral or
collateral of any surety or guarantor, or any appraisement, evaluation, stay,
extension, homestead, redemption or exemption laws now or hereafter in force in
order to prevent or hinder the enforcement of this Agreement. Borrower, for
itself and all who may at any time claim through or under Borrower, hereby
expressly waives to the fullest extent permitted by law the benefit of all such
laws. All rights of Bank and all obligations of Borrower hereunder shall be
absolute and unconditional irrespective of (i) any change in the time, manner or
place of payment of, or any other term of, all or any of the Indebtedness, or
any other amendment or waiver of or any consent to any departure from any
provision of the Loan Documents, (ii) any exchange, release or non-perfection of
any other collateral given as security for the Indebtedness, or any release or
amendment or waiver of or consent to departure from any guaranty for all or any
of the Indebtedness, or (iii) any other circumstance which might otherwise
constitute a defense available to, or a discharge of, Borrower or any third
party, other than payment and performance in full of the Indebtedness.
21
10.15. Other Provisions. Any other or additional terms and
conditions set forth in Exhibit 10.15 (if any) are hereby incorporated herein.
10.16. Amended and Restated Credit and Security Agreement. This
Amended and Restated Credit and Security Agreement amends, restates, supersedes
and replaces in its entirely that certain Credit and Security Agreement dated
September 16, 2002 (the "Original Security Agreement"). Should there by any
conflict between any of the terms of this Amended and Restated Credit and
Security Agreement and the Original Security Agreement, the terms of this
Amended and Restated Credit and Security Agreement shall control. The execution
and delivery of this Amended and Restated Credit and Security Agreement shall
not create a novation of any previous or existing lien.
[EXECUTIONS AND ACKNOWLEDGMENTS APPEAR ON FOLLOWING PAGE]
22
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed as of the day and year first above written.
BORROWER:
SFBC INTERNATIONAL, INC., a Delaware corporation
By: /s/
-------------------------------------------------
Xxxxx Xxxxx, Vice President and CFO
GUARANTOR:
SOUTH FLORIDA KINETICS, INC., a Florida corporation,
d/b/a SOUTH FLORIDA BIOAVAILABILITY CLINIC
By: /s/
-------------------------------------------------
Xxxxx Xxxxx, Vice President
SFBC FT. XXXXX, INC., a Florida corporation
By: /s/
-------------------------------------------------
Xxxxx Xxxxx, Vice President
SFBC ANALYTICAL LABORATORIES, INC.,
a Florida corporation
By: /s/
-------------------------------------------------
Xxxxx Xxxxx, Vice President
SFBC NEW DRUG SERVICES, INC., a Florida corporation,
f/k/a SFBC CHARLOTTE, INC.
By: /s/
-------------------------------------------------
Xxxxx Xxxxx, Vice President
SFBC CANADA, INC., a Federal corporation (Canada)
By: /s/
-------------------------------------------------
Xxxxx Xxxxx, Vice President and Assistant Secretary
ANAPHARM, INC., a provincial corporation (Quebec)
By: /s/
-------------------------------------------------
Xxxxx Xxxxx, Vice President, Secretary and Treasurer
SYNFINE RESEARCH INC., a provincial corporation
(Ontario)
By: /s/
-------------------------------------------------
Xxxxx Xxxxx, Vice President and Assistant Secretary
23
DAEDAL MANAGEMENT & INVESTMENT INC.,
a provincial corporation (Ontario)
By: /s/
-------------------------------------------------
Xxxxx Xxxxx, Vice President and
Assistant Secretary
DANAPHARM CLINICAL RESEARCH INC.,
a provincial corporation (Ontario)
By: /s/
-------------------------------------------------
Xxxxx Xxxxx, Vice President and
Assistant Secretary
BANK:
WACHOVIA BANK, NATIONAL ASSOCIATION
By: /s/
-----------------------------------------(SEAL)
Xxxxxx X. Xxxxxxxx, Senior Vice President
[ACKNOWLEDGMENTS APPEAR ON FOLLOWING PAGE]
24
COMMONWEALTH OF BAHAMAS )
) SS:
PROVINCE OF NASSAU )
I HEREBY CERTIFY THAT on this day, before me in this Commonwealth of Bahamas,
Province of Nassau, personally appeared Xxxxx Xxxxx, as (i) the Vice President
and CFO of SFBC INTERNATIONAL, INC., a Delaware corporation; (ii) the Vice
President of SOUTH FLORIDA KINETICS, INC., a Florida corporation, d/b/a SOUTH
FLORIDA BIOAVAILABILITY CLINIC; (iii) the Vice President of SFBC FT. XXXXX,
INC., a Florida corporation; (iv) the Vice President of SFBC ANALYTICAL
LABORATORIES, INC., a Florida corporation; (v) the Secretary of SFBC NEW DRUG
SERVICES, INC., a Florida corporation, f/k/a SFBC CHARLOTTE, INC.; (vi) the Vice
President and Assistant Secretary of SFBC CANADA, INC., a Federal corporation
(Canada), (vii) the Vice President, Secretary and Treasurer of ANAPHARM, INC., a
provincial corporation (Quebec), (viii) the Vice President and Assistant
Secretary of DAEDAL MANAGEMENT & INVESTMENT, INC., a provincial corporation
(Ontario), (ix) the Vice President and Assistant Secretary of DANAPHARM CLINICAL
RESEARCH INC., a provincial corporation (Ontario), and (x) the Vice President
and Assistant Secretary of SYNFINE RESEARCH INC., a provincial corporation
(Ontario), who after being duly sworn, executed the forgoing instrument.
WITNESS my hand and official seal this 30 day of July, 2003.
Print or Stamp Name:
------------------------------------------
Notary Public: /s/
--------------------------------------------
Commission No.:
-----------------------------------------------
My Commission Expires:
----------------------------------------
COMMONWEALTH OF BAHAMAS )
) SS:
PROVINCE OF NASSAU )
I HEREBY CERTIFY THAT on this day, before me in this Commonwealth of Bahamas,
Province of Nassau, personally appeared Xxxxxx X. Xxxxxxxx, as Senior Vice
President of Wachovia Bank, National Association, who after being duly sworn,
executed the forgoing instrument.
WITNESS my hand and official seal this 30 day of July, 2003.
Print or Stamp Name:
------------------------------------------
Notary Public: /s/
--------------------------------------------
Commission No.:
-----------------------------------------------
My Commission Expires:
----------------------------------------
25
SCHEDULE OF EXHIBITS
(If any exhibit is omitted, the information called for therein
shall be considered "None" or "Not Applicable")
Exhibit Section Reference Title
------- ----------------- -----
1 1 ("Definitions") Definitions
1.1A 1.1 ("Collateral") Additional Collateral
1.1B 1.1 ("Eligible Accounts") Ineligible Accounts
1.1C 1.1 ("Permitted Debt") Permitted Debt
1.1D 1.1 ("Permitted Liens") Permitted Liens
3.1 3.1(b)(vii) ("Supporting Documents") Perfection Certificate
4.3 4.3 ("Financial Condition") Contingent Liabilities
4.4 4.4 ("Litigation") Litigation
4.9 4.9"Location") Offices of Borrower
4.14 4.14 ("Subsidiaries") List of Subsidiaries
4.15 4.15 ("Environmental") Environmental Disclosures
4.18 4.18 ("Names") Names; Mergers; Acquisitions
4.22 4.22 ("Additional Representations") Additional Representations
6.3 6.3 ("Dividends") Permitted Dividends
and Distributions
10.15 10.15 ("Other Provisions") Additional Terms
26
EXHIBIT 1
DEFINITIONS
1.1 DEFINED TERMS:
"Account" has the meaning set forth in the Code, together with any
guaranties, letters of credit, Letter-of-Credit Right, and other security
therefore, including Supporting Obligations.
"Account Debtor" means a Person who is obligated under any Account,
Chattel Paper, General Intangible or instrument (as instrument is defined in the
Code).
"Advance" means an advance of proceeds of the Loan to Borrower or the
issuance of a letter of credit or bankers acceptance on behalf of Borrower
pursuant to this Agreement.
"Advance Date" means the date on which an Advance is made.
"Advance Request" means the written request for an Advance under the
Loan as identified in Subsection 2.5(a) hereof and shall also include
presentments triggering an automatic Advance under the Services Agreement.
"Affiliate" of a Person means (a) any Person directly or indirectly
owning 5% or more of the voting stock or rights of such named Person or of which
the named Person owns 5% or more of such voting stock or rights; (b) any Person
controlling, controlled by or under common control with such named Person; (c)
any officer, director or employee of such named Person or any Affiliate of the
named Person; and (d) any family member of the named Person or any Affiliate of
such named Person.
"Arbitration Rules" has the meaning set forth in Section 10.11.
"Borrowing Base" means at any time the sum of 80% of the total amount
of Eligible Accounts plus 50% of Eligible Unbilled Accounts minus any Reserves
required by Bank.
"Borrowing Base Certificate" has the meaning set forth in Subsection
5.6.(a).
"Business Day" means a weekday on which commercial banks are open for
business in Miami, Florida.
"Chattel Paper" has the meaning set forth in the Code, including
Electronic Chattel Paper, together with any guaranties, letters of credit,
Letter-of-Credit Right, and other security therefore, including Supporting
Obligations.
27
"Code" means the Uniform Commercial Code, as presently and hereafter
enacted in the Jurisdiction. Any term used in this Agreement and in any
financing statement filed in connection herewith which is defined in the Code
and not otherwise defined in this Agreement or in any other Loan Document has
the meaning given to the term in the Code. Any such term relating to the
description of Collateral may be defined in one or both of (a) the version of
Article 9 of the Code as enacted and in effect in the Jurisdiction on the date
of this Agreement, or (b) the revised version of Article 9 of the Code
(substantially in the form of Revised Article 9 (2000 Revision) promulgated by
the National Conference of Commissioners on Uniform State Laws and the American
Law Institute) ("Revised Article 9") enacted and in force in the Jurisdiction at
any relevant future time. If terms defining items or classes of Collateral
change or are added as a result of the enactment of Revised Article 9 in the
Jurisdiction, the meaning to be ascribed to any such term with respect to any
particular item or class of Collateral hereunder and to the interpretation
thereof after the date of such enactment shall be (i) if such term is defined in
both versions of Article 9 and such definitions differ, the broader or more
encompassing of the two definitions regardless of duplication, and (ii) if such
term is defined under only one of the versions of Article 9, the definition in
that version. Except for the filing of registrations in Canada to secure that
portion of Borrower's Collateral located in Canada, the term "Code" shall not
mean or refer to any similar law(s) enacted or in force in Canada or any
province or any other governmental subdivision.
"Collateral" means the following property of Borrower, wherever located
and whether now owned by Borrower or hereafter acquired: (a) all Inventory; (b)
all General Intangibles; (c) all Accounts and Chattel Paper and any other
instrument or intangible representing payment for goods or services; (d) all
Equipment; (e) all investment property (as defined in the Code); (f) any other
collateral described in Exhibit 1.1A hereto (if any) or in which Bank may be
hereafter granted a security interest or Lien; (g) all funds in the Demand
Deposit Account, the Collections Account or otherwise on deposit with or under
the control of Bank or its agents or correspondents; and (h) all parts,
replacements, substitutions, profits, products and cash and non-cash proceeds
and Supporting Obligations of any of the foregoing (including insurance proceeds
payable by reason of loss or damage thereto) in any form and wherever located.
Collateral shall include all written or electronically recorded books and
records relating to any such Collateral and other rights relating thereto.
"Collections Account" means the controlled disbursement account
maintained at Bank to which collections, deposits and other payments on or with
respect to Collateral are made pursuant to the terms hereof, to which only Bank
shall have access.
"Debt" means all liabilities of a Person as determined under GAAP and
all obligations which such Person has guaranteed or endorsed or is otherwise
secondarily or jointly liable for, and shall include, without limitation (a) all
obligations for borrowed money or purchased assets, (b) obligations secured by
assets whether or not any personal liability exists, (c) the capitalized amount
of any capital or finance lease obligations, (d) the unfunded portion of pension
or benefit plans or other similar liabilities, (e) obligations as a general
partner, (f) contingent obligations pursuant to guaranties, endorsements,
letters of credit and other secondary liabilities, and (g) obligations for
deposits.
"Default Rate" means the highest lawful rate of interest per annum
specified in any Note to apply after a default under such Note or, if no such
rate is specified, a rate equal to the lesser of (a) the Libor Market Index Rate
plus three percent (3%) per annum and (b) the highest rate of interest allowed
by law.
"Demand Deposit Account" means the demand deposit account
#2000014656529 or any other demand deposit account maintained by Borrower with
Bank or the DDA Account as defined in the Services Agreement.
"Disputes" has the meaning set forth in Section 10.11.
"Electronic Chattel Paper" has the meaning set forth in the Code.
"Eligible Accounts" means an Account receivable of Borrower or Guarantor
not more than sixty (60) days from the date of the original invoice that arises
28
in the ordinary course of Borrower's or Guarantor's business and meets the
following eligibility requirements: (a) the sale of goods or services reflected
in such account is final and such goods and services have been delivered or
provided and accepted by the Account Debtor and payment for such is owing; (b)
the invoices comprising an Account are not subject to any claims, returns or
disputes of any kind; (c) the Account Debtor is not insolvent; (d) the Account
Debtor has its principal place of business in the United States; (e) the Account
Debtor is not an Affiliate of Borrower or Guarantor and is not a supplier to
Borrower or Guarantor and the Account is not otherwise exposed to risk of
set-off; (f) not more than fifty percent (50%) of the original invoices owing
Borrower or Guarantor by the Account Debtor are more than sixty (60) days from
the date of the original invoice; (g) accounts for which the total of all
Accounts from an Account Debtor exceed ten percent (10%) of the total Accounts
of Borrower or Guarantor (unless Bank shall have given its prior written
approval); and (h) any other Account which Bank otherwise in its sole and
absolute discretion deems to be ineligible.
"Eligible Unbilled Accounts" means an Account receivable without an
outstanding invoice owned by South Florida Kinetics, Inc., a Florida corporation
d/b/a South Florida Bioavailability Clinic, that has been recognized into income
and represents a final amount due for work performed, such Account remaining
unbilled not more than forty-five (45) days from the date of the contract
completion that arises in the ordinary course of Guarantor's business and meets
the following eligibility requirements: (a) the sale of goods or services
reflected in such Account is final and such goods and services have been
delivered or provided and accepted by the Account Debtor and payment for such is
owing to the best of Borrower's knowledge; (b) the invoices comprising an
Account are not subject to any claims, returns or disputes of any kind; (c) the
Account Debtor is not insolvent; (d) the Account Debtor has its principal place
of business in the United States; (e) the Account Debtor is not an Affiliate of
Guarantor and is not a supplier to Guarantor and the Account is not otherwise
exposed to risk of set-off; (f) not more than fifty percent (50%) of the
original invoices owing Guarantor by the Account Debtor are more than sixty (60)
days from the date of the original invoice; (g) accounts for which the total of
all Accounts from an Account Debtor exceed ten percent (10%) of the total
Accounts of Guarantor (unless Bank shall have given its prior written approval);
and (h) any other Account which Bank otherwise in its sole and absolute
discretion deems to be ineligible.
"Environmental Laws" means, collectively the following acts and laws,
as amended: the Comprehensive Environmental Response, Compensation and Liability
Act of 1980; the Superfund Amendments and Reauthorization Act of 1986; the
Resource Conservation and Recovery Act; the Toxic Substances Act; the Clean
Water Act; the Clean Air Act; the Oil Pollution and Hazardous Substances Control
Act of 1978; and any other "Superfund" or "Superlien" law or any other federal,
state or local statute, law, ordinance, code, rule, regulation, order or decree
relating to, or imposing liability or standards of conduct concerning, any
hazardous, toxic or dangerous waste, substance or material, as now or at any
time hereafter in effect.
"Equipment" has the meaning set forth in the Code.
"Event of Default" means any event specified as such in Section 8.1
hereof ("Events of Default"), provided that there shall have been satisfied any
requirement in connection with such event for the giving of notice or the lapse
of time, or both; "Default" or "default" means any of such events, whether or
not any such requirement for the giving of notice or the lapse of time or the
happening of any further condition, event or act shall have been satisfied.
"GAAP" means generally accepted accounting principles as in effect in
the Unites States from time to time, consistently applied.
"General Intangibles" has the meaning set forth in the Code , together
with any guaranties, letters of credit, Letter-of-Credit Right, and other
security therefore, including Supporting Obligations.
"Guarantor" means collectively, SOUTH FLORIDA KINETICS, INC., a Florida
corporation, d/b/a SOUTH FLORIDA BIOAVAILABILITY CLINIC, SFBC FT. XXXXX, INC., a
Florida corporation, SFBC ANALYTICAL LABORATORIES, INC., a Florida corporation,
SFBC NEW DRUG SERVICES, INC., a Florida corporation, f/k/a SFBC XXXXXXXXX, XXX.,
00
XXXX XXXXXX, INC., a Federal corporation (Canada), and ANAPHARM, INC., a
provincial corporation (Quebec), DAEDAL MANAGEMENT & INVESTMENT INC., a
provincial corporation (Ontario), DANAPHARM CLINICAL RESEARCH INC., a provincial
corporation (Ontario), and SYNFINE INC., a provincial corporation (Ontario) and
any Person now or hereafter guaranteeing, endorsing or otherwise becoming liable
for any Indebtedness.
"Guaranty Agreement" means any guaranty instrument now or hereafter
executed and delivered by any Guarantor to Bank, as it may be modified.
"Indebtedness" means all obligations now or hereafter owed to Bank by
Borrower, whether related or unrelated to the Loan, including, without
limitation, amounts owed or to be owed under the terms of the Loan Documents, or
arising out of the transactions described therein, including, without
limitation, the Loan, sums advanced to pay overdrafts on any account maintained
by Borrower with Bank, reimbursement obligations for outstanding letters of
credit or banker's acceptances issued for the account of Borrower or its
Subsidiaries, amounts paid by Bank under letters of credit or drafts accepted by
Bank for the account of Borrower or its Subsidiaries, together with all interest
accruing thereon, all obligations under any swap agreements as defined in 11
U.S.C. ?101 between Bank and Borrower whenever executed, all fees, all costs of
collection, attorneys' fees and expenses of or advances by Bank which Bank pays
or incurs in discharge of obligations of Borrower or to inspect, repossess,
protect, preserve, store or dispose of any Collateral, whether such amounts are
now due or hereafter become due, direct or indirect and whether such amounts due
are from time to time reduced or entirely extinguished and thereafter
re-incurred.
"Inventory" has the meaning set forth in the Code.
"Item" means any "item" as defined in Section 4-104 of the Code, and
shall also mean and include checks, drafts, money orders or other media of
payment.
"Jurisdiction" means the State of Florida.
"Letter-of-Credit Right" has the meaning set forth in the Code.
"Libor Market Index Rate" shall have the meaning set forth in each
respective Note.
"Lien" means any mortgage, pledge, statutory lien or other lien arising
by operation of law, security interest, trust arrangement, security deed,
financing lease, collateral assignment or other encumbrance, conditional sale or
title retention agreement, or any other interest in property designed to secure
the repayment of Indebtedness, whether arising by agreement or under any statute
or law or otherwise.
"Loan" means the $7,000,000 revolving loan credit facility and
$8,000,000 non-revolving loan credit facility identified in Section 2.1(a) and
Section 2.1(b) hereof.
"Loan Documents" means this Agreement, any other Security Agreement,
any Note, any Guaranty Agreement, the Advance Requests, Borrowing Base
Certificates, UCC-1 financing statements and all other documents and instruments
now or hereafter evidencing, describing, guaranteeing or securing the
Indebtedness contemplated hereby or delivered in connection herewith, as they
may be modified, amended, extended, renewed or substituted from time to time.
"Material Adverse Effect" means any (i) material adverse effect upon
the validity, performance or enforceability of any of the Loan Documents or any
of the transactions contemplated hereby or thereby, (ii) material adverse effect
upon the properties, business, prospects or condition (financial or otherwise)
of Borrower and/or any other Person obligated under any of the Loan Documents,
or (iii) material adverse effect upon the ability of Borrower or any other
Person to fulfill any obligation under any of the Loan Documents.
"Maximum Loan Amount" means $7,000,000.00.
30
"Net Cash Position" shall have the meaning set forth in the Services
Agreement.
"Note" shall have the meaning set forth in Section 2.2 and any other
promissory note now or hereafter evidencing any Indebtedness, and all
modifications, extensions and renewals thereof.
"Perfection Certificate" means a certificate executed by the chief
executive officer and chief legal officer of Borrower, substantially in the form
of Exhibit 3.1 hereto.
"Permitted Debt" means (a) the Indebtedness; (b) any other Debt listed
on Exhibit 1.1C hereto (if any) and any extensions, renewals, replacements,
modifications and refundings of any such Debt if, and to the extent, permitted
by Exhibit 1.1C; provided, however, that the principal amount of such Debt may
not be increased from the amount shown as outstanding on such exhibit; (c) the
Debt of any Guarantor arising under any Guaranty Agreement (as defined herein);
(d) the Debt of any Subsidiary to Borrower; and (e) subordinated Debt, which
subordinated Debt may be refinanced by Borrower, as long as the terms and
conditions of such refinancing including, but not limited to, principal amount,
interest rate and maturity date, are in form and substance acceptable to Bank
and such refinancing is subject to a subordination agreement executed by the
refinancing lenders in form and substance acceptable to Bank.
"Permitted Liens" means (a) Liens securing the Indebtedness; (b) Liens
not in excess of $100,000 for taxes and other statutory Liens, landlord's Liens
and similar Liens arising out of operation of law so long as the obligations
secured thereby are not past due or are being contested and the proceedings
contesting such obligations have the intended effect of preventing the
forfeiture or sale of the property subject to such Lien; (c) Liens on Equipment
in favor of Citicorp Vendor Finance, Inc., Copelco Capital, Inc., and Royal Bank
of Canada incurred in the ordinary course of business, provided, however, that
no Debt not now secured by such Liens shall become secured by such Liens
hereafter and such Liens shall not encumber any other assets; (d) Liens arising
in the ordinary course of business (such as (i) Liens of carriers, warehousemen,
mechanics and materialmen and other similar Liens imposed by law and (ii) Liens
incurred in connection with worker's compensation, unemployment compensation and
other types of social security (excluding Liens arising under ERISA) or in
connection with surety bonds, bids, performance bonds and similar obligations)
for sums not overdue or being contested in good faith by appropriate proceedings
and not involving any deposits or advances or borrowed money or the deferred
purchase price of property or services and, in each case, for which it maintains
adequate reserves; (e) attachments, appeal bonds, judgments and other liens, for
sums not exceeding $100,000 arising in connection with court proceedings,
provided the execution or other enforcement of such Liens is effectively stayed
within 30 days as provided in this Agreement; (f) easements, rights of way,
restrictions, minor defects or irregularities in title and other similar Liens
not interfering in any material respect with the ordinary conduct of the
business of Borrower or any Guarantor; (g) Liens that constitute purchase money
security interests on property securing debt incurred for the purpose of
financing all or any part of the cost of acquiring such property; and (h) the
replacement, extension or renewal of any Permitted Lien upon or in the same
property theretofore subject thereto arising out of the extension, renewal or
replacement of the debt secured thereby (without increase in the amount thereof)
"Person" means any natural person, corporation, unincorporated
organization, trust, joint-stock company, joint venture, association, company,
limited or general partnership, any government or any agency or political
subdivision of any government, or any other entity or organization.
"Regulated Materials" means any hazardous, toxic or dangerous waste,
substance or material, the generation, handling, storage, disposal, treatment or
emission of which is subject to any Environmental Law.
"Reserves" means such amounts as may be required by Bank, at any time
and from time to time without prior notice to Borrower or Guarantor, which Bank
deems to be adequate to reserve against outstanding letters of credit,
outstanding banker's acceptances, Borrower's and/or Guarantor's obligations to
Bank or its affiliates or any guaranties or other contingent debts of Borrower
and/or Guarantor.
"Revolving Credit Period" means the period from and including the date
of this Agreement to the Termination Date.
31
"Security Agreement" means this Agreement as it relates to a security
interest in the Collateral, and any other mortgage, security agreement or
similar instrument now or hereafter executed by Borrower or other Person
granting Bank a security interest in any Collateral to secure the Indebtedness.
"Services Agreement" means any Sweep Plus Loan & Investment Services
Description between Bank and Borrower, and any modifications thereto.
"Solvent" means, as to any Person, that such Person has capital
sufficient to carry on its business and transactions in which it is currently
engaged and all business and transactions in which it is about to engage, is
able to pay its debts as they mature, and has assets having a fair valuation
greater than its liabilities, at fair valuation.
"Subsidiary" means any corporation, partnership or other entity in
which Borrower, directly or indirectly, owns more than fifty percent (50%) of
the stock, capital or income interests, or other beneficial interests, or which
is effectively controlled by such Person.
"Supporting Obligation" has the meaning set forth in the Code.
"Termination Date" means the Maturity Date set forth in the $7,000,000
Note.
1.2. FINANCIAL TERMS. All financial terms used herein shall have the meanings
assigned to them under GAAP unless another meaning shall be specified.
32
EXHIBIT 1.1B
ADDITIONAL INELIGIBLE ACCOUNTS
33
EXHIBIT 1.1C
PERMITTED DEBT
The following shall be additional Permitted Debt:
1. Debt at any time outstanding for Borrower and all Subsidiaries
incurred to purchase Equipment, provided that the amount of
such debt shall not at any time create a Default hereunder.
2. Debt payable to suppliers and other trade creditors in the
ordinary course of business on ordinary and customary trade
terms and which is not past due.
3. Debt of any Subsidiary to Borrower or another Subsidiary.
4. Endorsement of checks for collection in the ordinary course of
business.
5. Debt for equipment owed to Royal Bank of Canada in the
ordinary course of business.
6. Debt fully surbordinate to Bank on terms and conditions
satisfactory to Bank in its sole and absolute discretion,
under no circumstances to exceed $1,000,000.00 in the
aggregate.
7. Guaranty of Borrower of those certain acquisition costs of
Anapharm, Inc., a provincial corporation (Quebec), in
connection with that certain Share Purchase Agreement dated as
of July 7, 2003, as they relate to the acquisition of Daedal
Management & Investment Inc., a provincial corporation
(Ontario) and Danapharm Clinical Research Inc., a provincial
corporation (Ontario).
34
EXHIBIT 3.1
PERFECTION CERTIFICATE
I, Xxxxx Xxxxx, the vice president of finance and chief financial
officer of SFBC INTERNATIONAL, INC., a Delaware corporation (the "Company"),
hereby certify with reference to that certain Amended and Restated Revolving
Credit and Security Agreement dated as of July 30, 2003 among the Company, SOUTH
FLORIDA KINETICS, INC., a Florida corporation, d/b/a SOUTH FLORIDA
BIOAVAILABILITY CLINIC, SFBC FT. XXXXX, INC., a Florida corporation, SFBC
ANALYTICAL LABORATORIES, INC., a Florida corporation, SFBC NEW DRUG SERVICES,
INC., a Florida corporation, f/k/a SFBC CHARLOTTE, INC., SFBC CANADA, INC., a
Federal corporation (Canada), ANAPHARM, INC., a provincial corporation (Quebec),
DAEDAL MANAGEMENT & INVESTMENT INC., a provincial corporation (Ontario),
DANAPHARM CLINICAL RESEARCH INC., a provincial corporation (Ontario), and
SYNFINE INC., a provincial corporation (Ontario), and WACHOVIA BANK, NATIONAL
ASSOCIATION, (the "Bank") and WACHOVIA BANK, NATIONAL ASSOCIATION, (the "Bank")
(the "Credit Agreement") (terms defined therein being used herein as therein
defined), to Bank as follows:
I. NAMES.
A. The exact corporate names of the Company and each Guarantor as
it appears in their respective certificates of incorporation
are as follows:
SFBC INTERNATIONAL, INC., a Delaware corporation
SOUTH FLORIDA KINETICS, INC., a Florida corporation, d/b/a
SOUTH FLORIDA BIOAVAILABILITY CLINIC, formerly known as New
South Florida Kinetics, Inc. (name change effective 6/7/99)
SFBC FT. XXXXX, INC., a Florida corporation, formerly known as
SFBC/Ft Xxxxxx, Inc. (name change effective 2/15/01), formerly
known as SFBC/Xxx Coast Acquisition Corp. (name change
effective 2/8/01)
SFBC ANALYTICAL LABORATORIES, INC., a Florida corporation
SFBC NEW DRUG SERVICES, INC., a Florida corporation, f/k/a
SFBC CHARLOTTE, INC.
SFBC CANADA, INC., a Federal corporation (Canada)
ANAPHARM, INC., a provincial corporation (Quebec)
DAEDAL MANAGEMENT & INVESTMENT INC., a provincial corporation
(Ontario)
DANAPHARM CLINICAL RESEARCH INC., a provincial corporation
(Ontario), formerly known as Dynacare Clinical Research Inc.,
a provincial corporation (Ontario)
SYNFINE INC., a provincial corporation (Ontario), formerly
known as 2022406 Ontario Inc., a provincial corporation
(Ontario)
35
B. Set forth below is each other corporate name the Company and
each Guarantor have had since its organization, together with
the date of the relevant change:
See I.A. above.
C. The following is a list of all other names (including trade
names or similar appellations) used by the Company, any
Guarantor or any of its respective divisions or other business
units at any time during the past five years:
See I.A. above.
D. Except as set forth in Section I.A. above, neither the Company
nor any Guarantor has changed its identity or corporate
structure or the jurisdiction of their organization in any way
within the past five years.
E. SFBC INTERNATIONAL, INC., is organized under the laws of
Delaware.
SOUTH FLORIDA KINETICS, INC., is organized under the laws of
Florida.
SFBC FT. XXXXX, INC., is organized under the laws of Florida.
SFBC ANALYTICAL LABORATORIES, INC., is organized under the
laws of Florida.
SFBC NEW DRUG SERVICES, INC. f/k/a SFBC CHARLOTTE, INC., is
organized under the laws of Florida.
SFBC CANADA, INC., is organized under the Federal laws of
Canada.
ANAPHARM, INC., is organized under the laws of the province of
Quebec, Canada.
DAEDAL MANAGEMENT & INVESTMENT INC., is organized under the
laws of the province of Ontario, Canada.
DANAPHARM CLINICAL RESEARCH INC., is organized under the laws
of the province of Ontario, Canada.
SYNFINE INC., is organized under the laws of the province of
Ontario, Canada.
II. CURRENT LOCATIONS.
A. The chief executive offices of the Company and each Guarantor
are located at the following address:
Street Address County State
-------------- ------ -----
SFBC International, Inc.
00000 Xxxxxxxx Xxxxxxxxx, Xxxxx, Xxxxxxx 00000
SFBC New Drug Services, Inc.
000 XxXxxxxxx Xxxx, Xxxxx 000
Xxxxxxx Xxxxxx, Xxxxxxxxxxxx 00000
XXXX Xxxxxx, Inc.
000 Xxxx Xxxx-Xxxxxxxx Xxxxxxxxx, Xxxxx 000,
Xxxxxxxx, Xxxxxx, Xxxxxx X0X 0X0
36
Anapharm, Inc.
0000 Xxxx Xxxx-Xxxxxxxx Xxxxxxxxx
Xxxxxx Xxxx, Xxxxxx, Xxxxxx X0X 0X0
Daedal Management & Investment Inc.
000 Xxxxxxxx Xxxxxx, Xxxxx 000
Xxxxxx (Xxxxxxx) X0X 0X0
Danapharm Clinical Research Inc.
000 Xxxxxxxx Xxxxxx, Xxxxx 000
Xxxxxx (Xxxxxxx) X0X 0X0
SynFine Research Inc.
000 Xxxxxxx Xxxx
Xxxxxxxx Xxxx (Xxxxxxx) X0X 0X0
B. The following are all the places of business of the Company
and each Guarantor not identified above:
Street Address County State
-------------- ------ -----
SFBC Analytical Laboratories, Inc.
000X Xxxxxxxxxx Xxxxx
Xxxxx Xxxxx, Xxxxxxxxxxxx 00000
SFBC New Drug Services, Inc.
0000 Xxxxxxx Xxxxx Xxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
0 Xxxxxxx Xxxxx Xxxx
Xxxx Xxxxx, Xxxxx Xxxxxxxx 00000
SFBC Ft. Xxxxx, Inc.
0000 Xxxxx Xxxxxx, Xxxxx 000
Xx. Xxxxx, Xxxxxxx 00000
Anapharm, Inc.
0000, X'Xxxxxx Xxxx, Xxxxx 000
Xx, Xxx (Xxxxxx)
Xxxxxx X0X 0X0
0000 Xxxxxxx Xxxxxxxxx
Xxxxxxxx, Xxxxxx
Xxxxxx X0X 0X0
0000 xxx Xxxxxx Xxxxxxxxx
Xxxxx-Xxxxxxxx, Xxxxxx
Xxxxxx X0X 0X0
37
C. The following are all the locations where the Company and each
Guarantor maintain any books or records relating to any
Accounts:
Street Address County State
-------------- ------ -----
See response to II.A. and II.B. above.
D. The following are all the locations not identified above where
the Company and any Guarantor maintain any Inventory,
Equipment, Instruments, documents of title, warehouse receipts
or other tangible Collateral:
Collateral Does Collateral
Street Address County State Description Include Fixtures?
-------------- ------ ----- ----------- -----------------
n/a
-------------------------------------------------------------
E. The following are the names and addresses of all Persons other
than the Company and Guarantor which have possession of any of
any Company's or Guarantors' Inventory, Equipment,
Instruments, documents of title, warehouse receipts or other
tangible Collateral:
Name Street Address County State Collateral Description
---- -------------- ------ ----- ----------------------
n/a
F. The following are all locations where the Company and
Guarantor maintain any of the following:
1. wellheads or mineheads with respect to which the Company
or Guarantor has an interest in unextracted minerals or
the like (including oil and gas);
n/a
2. timber to be cut; or
n/a
3. equipment used in farming operations, farm products, grain
or crops growing or to be growing.
n/a
Name Street Address County State Collateral Description
---- -------------- ------ ----- ----------------------
G. The following are the names and jurisdictions of incorporation
of the Company and/or Guarantor with respect to which the
Company holds uncertificated securities:
n/a
38
H. The following are all items of Collateral with respect to
which a certificate of title has been issued by any
jurisdiction or with respect to which the Company or any
Guarantor has or intends to file an application for title.
The value of any and all Collateral with respect to which a
certificate of title has been issued that is held by Company
and all of the Guarantors does not exceed $75,000 in the
aggregate.
III. PRIOR LOCATIONS.
A. Set forth below is the information required by subparagraphs
A., B. and C. of paragraph II with respect to each location or
place of business maintained by the Company or any Guarantor
at any time during the past five years:
Daedal Management & Investment Inc.
000 Xxxxxxxxx Xxxxxx
Xxxxxx (Xxxxxxx) X0X 0X0
Danapharm Clinical Research Inc.
000 Xxxx Xxxx Xxxxxx
Xxxxxx (Xxxxxxx) X0X 0X0
SynFine Research Inc.
000 Xxx Xxxxxx, Xxxxx 0000
Xxxxxxxx Xxxxx Xxxx
Xxxxxxx (Xxxxxxx) X0X 0X0
B. Set forth below is the information required by subparagraphs
D., E. and F. of paragraph II with respect to each location or
bailee where or with whom Collateral has been lodged at any
time during the past four months: n/a
IV. UNUSUAL TRANSACTIONS. All Accounts have been originated by the Company
and/or Guarantor, and all Inventory and Equipment has been acquired by
the Company and/or Guarantor in the ordinary course of its business
from a dealer in goods of that type.
V. EXISTING LIENS. Except as set forth in the Credit Agreement, as of the
date hereof, there are no (i) UCC financing statements naming the
Company or any Guarantor as debtor or seller and covering any of the
Collateral, (ii) notices of the filing of any federal tax lien (filed
pursuant to section 6323 of the Code) or any lien of the PBGC (filed
pursuant to Section 4068 of ERISA) covering any of the Collateral or
(iii) judgment liens filed against any Company or any Guarantor, except
as set forth in Exhibit 1.1D to the Security Agreement.
VI. PATENTS, TRADEMARKS AND COPYRIGHTS. Save and except for SynFine
Research Inc. which owns U.S. Patent Nos 6,121,454 and 6,437,139,
neither the Company nor any Guarantor owns any Patents, Trademarks or
Copyrights.
IN WITNESS WHEREOF, the undersigned has hereunto set my hands this ____
day of July, 2003.
39
SFBC International, Inc.
By: /s/
-------------------------------------
Xxxxx Xxxxx, Vice President and
Chief Financial Officer
40
SCHEDULE 6
To
Perfection Certificate
LIST OF PATENTS, TRADEMARKS AND COPYRIGHTS
U.S. PATENTS
Number Date Issue Title Patent Holder
------ ---- ----------- -------------
[6,121,454] [Sept. 19, 2000 [Synthesis of pharmaceutically [ Pdi Research Laboratories, Inc.
useful pyridine derivatives (recording Assignment and Change
of Name for the Benefit of SynFine
Research Inc. in process)
6,437,139 August 2, 2002 Synthesis of pharmaceutically Pdi Research Laboratories, Inc.
] useful pyridine derivaties] (recording Assignment and Change
of Name for the Benefit of SynFine
Research Inc. in process)
]
PATENT LICENSES
Licensor Licensee Patent Number Date
-------- -------- ------------- ----
[ ] [ ] [ ] [ ]
TRADEMARK REGISTRATIONS
Trademark Number Registration Date
--------- ------ -----------------
[ ] [ ] [ ]
TRADEMARK APPLICATIONS
Trademark Number Registration Date
--------- ------ -----------------
[ ] [ ] [ ]
TRADEMARK LICENSES
[ ] [ ] [ ]
41
COPYRIGHTS
[ ] [ ] [ ]
COPYRIGHT LICENSES
[ ] [ ] [ ]
42
EXHIBIT 6.3
PERMITTED DIVIDENDS AND DISTRIBUTIONS
Any dividend or other distribution or purchase, redemption or acquisition of
stock or other equity interests or payment or acquisition of any debt
subordinate to the Indebtedness, provided, after giving effect thereto, there
shall be no Default hereunder.
43
