EXHIBIT 99.4
Execution Copy
LOAN AGREEMENT
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LOAN AGREEMENT made as of October 3, 2000, by and among Integ
Incorporated, a Minnesota corporation (the "Borrower"), and Inverness Medical
Technology, Inc., a Delaware corporation (the "Lender"). Capitalized terms used
herein without definition shall have the meanings ascribed to such terms under
the Merger Agreement.
WHEREAS, the Borrower has entered into that certain merger agreement
with Lender and a subsidiary of Lender, dated as of October 3, 2000 (the "Merger
Agreement"), pursuant to which Borrower will merge with and into a subsidiary of
Lender (the "Merger");
WHEREAS, the Borrower desires, in certain circumstances, to obtain
interim financing for general working capital purposes until such time as the
Borrower and Lender consummate the Merger or until such earlier time as referred
to herein; and
WHEREAS, the Lender is willing, in certain circumstances, to provide
such financing pursuant to the terms and conditions contained herein.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto hereby agree as
follows:
ARTICLE I. TERMS OF THE LOAN.
Section 1.01. The Loan.
(a) Loan. Subject to the terms and conditions herein, the Lender agrees
to make loan advances (the "Advance") from time to time from the date hereof
through the Maturity Date to the Borrower, which Advance shall not during any
calendar month exceed an aggregate of five hundred fifty thousand dollars
($550,000) (the "Maximum Monthly Advance") and which Advances in the aggregate
shall not to exceed $3,300,000 (the "Loan"); provided, however, that the initial
Advance may exceed the Maximum Monthly Advance but in no event may it exceed two
times the Maximum Monthly Advance. The principal amount of the Loan together
with all accrued interest thereon and expenses incurred by the Lender in
connection therewith shall be due and payable in full on the earliest to occur
of: (i) the day after the consummation of the Merger, (ii) the acceleration of
the Loan by the Lender upon the occurrence of an Event of Default (as defined in
Article IV below), (iii) termination of the Merger Agreement, or (iv) March 31,
2001 (the "Maturity Date").
(b) The Note. All amounts owed by the Borrower with respect to the Loan
shall be evidenced by a promissory note in the form attached hereto as Exhibit A
dated the date hereof and in the aggregate principal amount of the Loan (the
"Note").
(c) Interest. The Note shall bear interest, prior to the occurrence of
an Event of Default (as defined in Article IV), at a rate per annum equal to the
prime rate of interest (as published in The Wall Street Journal from time to
time) plus five percent (5%). From and after the occurrence of an Event of
Default, the unpaid principal balance of the Note and, to the extent permitted
by law, overdue interest, shall bear interest at the stated rate of interest
plus an additional two percent (2%) per annum. Interest shall be calculated on
the basis of actual days elapsed and on a 360 day year. All accrued interest on
the Note shall be due and payable on the Maturity Date.
Section 1.02. Use of Proceeds. The entire proceeds of the Loan shall be
used by the Borrower for general working capital purposes in accordance with the
Borrower's 2000 Budget.
Section 1.03. Conditions Precedent to Execution of Agreement.
The Lender's obligation to execute this Agreement shall be subject to
the fulfillment to the Lender's satisfaction of the following conditions:
(a) Delivery of Documents. The Lender shall have received the following
documents: (i) fully-executed Note, (ii) the Borrower's 2000 Budget, and (iii) a
copy of resolutions of the Borrower's board of directors authorizing execution
of this Agreement, the Note, the Merger Agreement and other documents to be
delivered by Borrower.
(b) Representations and Covenants. All of the representations and
warranties of the Borrower contained herein shall be true and correct and it
shall have fulfilled all of its obligations hereunder and under the Merger
Agreement required to be fulfilled prior to the date hereof.
Section 1.04. Conditions Precedent to Advances. The Lender's obligation
to make any Advance hereunder shall be subject to the fulfillment to the
Lender's satisfaction of the following conditions:
(a) Default/Notices.
(i) No Event of Default under this Agreement shall have
occurred.
(ii) An event of default under Section 11.1 of the Series B
Preferred Stock Purchase Agreement dated as of February 15, 2000
between Borrower and Amira Medical (the "Strategic Partner") (the
"Preferred Stock Agreement") shall have occurred and be continuing and
notice of such event of default shall have been delivered by Borrower
to Strategic Partner.
(iii) Borrower (A) shall have delivered to Strategic Partner
notice of redemption of the Series B Preferred Stock under Section 4(b)
of the Certificate of Designations
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for Series B Preferred Stock of Borrower (the "Certificate") and (B)
shall have redeemed the Series B Preferred Stock.
(b) Delivery of Documents to Lender. Borrower shall have delivered to
Lender the following:
(i) a copy of the notices referred to in Section 1.04(a)(ii)
and (iii) above.
(ii) a written request for an Advance including a
certification of the President certifying as to the following: (A) that
the Strategic Partner is in default of Section 2.1 of the Preferred
Stock Agreement and an event of default under Section 11.1 thereof has
occurred and is continuing, (B) that Borrower has delivered and
Strategic Partner has received notice of redemption of the Series B
Preferred Stock pursuant to Section 4(b) of the Certificate, (C) that
the Advance shall be for current expenses incurred in accordance with
the Borrower's 2000 Budget, and (D) that the Advance does not exceed
the Maximum Monthly Advance and all Advances do not exceed the
aggregate amount of the Loan.
(iii) such other documents and certificates as the Lender may
reasonably request to support the information set forth in the notice
described in Section 1.04(b)(ii) hereof.
(c) Representations and Covenants. All of the representations,
warranties and covenants of the Borrower hereunder and under the other Lender
Agreements shall be true and correct and Borrower shall have fulfilled all of
its obligations hereunder and thereunder and Lender shall have received a
certificate of the President of Borrower to that effect.
(d) Security Agreement. Borrower shall have granted to Lender a
security interest in certain of its assets and shall have executed and delivered
to Lender a security agreement in form and substance reasonably satisfactory to
the Lender (the "Security Agreement") and such other instruments and documents
necessary for Lender to obtain the full rights and powers therein granted.
(e) Availability of Funds. Lender shall make available the Advance on
or before five (5) business days after the request has been made and the Advance
shall be deposited into Borrower's account at Xxxxx Fargo Bank pursuant to
written instructions provided to Lender no later than two (2) business days
following the request of such Advance.
ARTICLE II. REPRESENTATIONS AND WARRANTIES.
Section 2.01. Authority; Enforceability; No Conflict. Borrower has all
requisite corporate power and authority to enter into this Agreement and to
issue the Note and to carry out its obligations
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hereunder and thereunder. The execution, delivery and performance of this
Agreement and the issuance of the Note by the Borrower have been duly and
validly authorized by all requisite corporate proceedings on the part of the
Borrower. This Agreement and the Note when executed and delivered by the
Borrower are valid and binding obligations of the Borrower, enforceable against
the Borrower in accordance with their terms, except that such enforcement may be
subject to bankruptcy, insolvency, reorganization, moratorium, rehabilitation,
liquidation, conservatorship, receivership or other similar laws now or
hereafter in effect relating to creditors' rights generally. The execution and
delivery of this Agreement and the Note by the Borrower do not, and the
consummation by the Borrower of the transactions contemplated hereby and thereby
will not, result in or constitute: (i) a default, breach or violation of or
under the Articles of Incorporation or the By-laws of the Borrower, (ii) a
default, breach or violation of or under any material mortgage, deed of trust,
indenture, note, bond, license, lease agreement or other material instrument or
obligation to which the Borrower is a party or by which any of its respective
properties or assets are bound, (iii) a violation of any material statute, rule,
regulation, order, judgement or decree of any court, public body or authority by
which the Borrower or any of its respective properties or assets are bound, (iv)
an event which (with notice or lapse of time or both) would permit any Person
(as defined below) to terminate, accelerate the performance required by, or
accelerate the maturity of any material indebtedness or obligation of the
Borrower under any agreement or commitment to which the Borrower is a party or
by which the Borrower is bound or by which any of its properties or assets are
bound, (v) the creation or imposition of any material lien, charge or
encumbrance on any property of the Borrower under any agreement or commitment to
which the Borrower is a party or by which the Borrower is bound or by which any
of its properties or assets are bound, except for the grant of the security
interest in certain assets of Borrower granted to Lender, or (vi) an event which
would require any consent under any agreement to which the Borrower is a party
or by which the Borrower is bound or by which any of its properties or assets
are bound.
Section 2.02. Representations and Conditions in Lender Agreements. The
Borrower represents and warrants that the representations and warranties of the
Borrower contained herein, in the Note, the Security Agreement, the Merger
Agreement and all other documents related to the Merger (collectively the
"Lender Agreements") are true and correct as of the date hereof.
ARTICLE III. COVENANTS.
Section 3.01. Affirmative Covenants. The Borrower covenants that, until
all of the Borrower's obligations hereunder and under the Note are paid and
performed in full, the Borrower shall:
(a) (i) preserve and maintain its corporate existence, (ii) use its
best efforts to maintain and preserve in full force and effect all material
rights, licenses, patents and franchises, (iii) comply in all material respects
with all valid and applicable statutes, rules and regulations necessary for the
conduct of its business, and (iv) engage only in the businesses which it is
conducting on the date of this Agreement;
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(b) pay and discharge all lawful taxes, assessments and governmental
charges or levies imposed upon it, other than those that the Borrower is
contesting in good faith for a period of up to 90 days from the date of the
imposition of such taxes, assessments or governmental charges or levies;
(c) immediately after obtaining knowledge thereof, give written notice
to the Lender of any matter which constitutes an Event of Default under this
Agreement or a default in the performance by the Borrower or Strategic Partner
under any covenant or agreement contained in any agreement with its Strategic
Partner or in any other agreement to which it is a party or by which it is
bound, specifying the nature of the same, the period it has existed and what
action the Borrower has taken or proposes to take with respect thereto, and any
matter which has resulted in or is likely to result in a material adverse change
in the financial condition or operations of the Borrower;
(d) promptly notify the Lender of the threat or commencement of any
judicial, administrative or other proceeding against the Borrower.
(e) upon request by Lender, provide officers, agents and employees of
Lender with access to Borrower's financial, operating and other data,
information, books and records.
Section 3.02. Negative Covenants. Until all of the Borrower's
obligations hereunder and under the Note are paid and performed in full, the
Borrower shall not (except pursuant to the Agreement or as otherwise consented
to by the Lender):
(a) (i) declare, set aside or pay any dividend or other distribution
(whether in cash, stock, or property or any combination thereof) in respect of
any of its capital stock, (ii) split, combine or reclassify any of its capital
stock or (iii) repurchase, redeem or otherwise acquire any of its securities,
except, in the case of clause (iii), for (A) the acquisition of shares of
Borrower common stock from holders of Borrower stock options in full or partial
payment of the exercise price payable by such holders upon exercise of Borrower
stock options or (B) the redemption of Series B Preferred Stock upon an event of
default under the terms of the Preferred Stock Agreement;
(b) authorize for issuance, issue, sell, deliver or agree or commit to
issue, sell or deliver (whether through the issuance or granting of options,
warrants, commitments, subscriptions, rights to purchase or otherwise) any stock
of any class or any other securities (including indebtedness having the right to
vote) or equity equivalents (including, without limitation, stock appreciation
rights), other than the issuance of shares of Series B Preferred Stock in
accordance with the terms of the Preferred Stock Agreement prior to an event of
default thereunder, or shares of Borrower common stock upon the exercise of
Borrower options or Borrower warrants in accordance with their present terms;
(c) acquire, sell, lease, encumber, transfer or dispose of any assets
outside the ordinary course of business that are material to the Borrower
(whether by asset acquisition, stock
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acquisition or otherwise), except pursuant to obligations in effect on the date
hereof or as set forth in Section 7.2 of the Borrower Disclosure Schedule to the
Merger Agreement;
(d) incur any indebtedness for borrowed money, guarantee any
indebtedness, issue or sell debt securities or warrants or rights to acquire any
debt securities, guarantee (or become liable for) any debt of others, make any
loans, advances or capital contributions, mortgage, pledge or otherwise encumber
any material assets, create or suffer any material lien thereupon;
(e) pay, discharge or satisfy any claims, liabilities or obligations
(absolute, accrued, asserted or unassented, contingent or otherwise), other than
any payment, discharge or satisfaction (i) in the ordinary course of business
consistent with past practice, or (ii) in connection with the transactions
contemplated by this Agreement or the Merger Agreement;
(f) change any of the accounting principles or practices used by it
(except as required by generally accepted accounting principles, in which case
written notice shall be provided to Lender prior to any such change);
(g) except as required by law, (i) enter into, adopt, amend or
terminate any Borrower Benefit Plan, (ii) enter into, adopt, amend or terminate
any agreement, arrangement, plan or policy between the Borrower and one or more
of its directors or officers, or (iii) except for normal increases in the
ordinary course of business consistent with past practice, increase in any
manner the compensation or fringe benefits of any director, officer or employee
or pay any benefit not required by any Borrower Benefit Plan or arrangement as
in effect as of the date hereof;
(h) adopt any amendments to its Charter or Bylaws, except as expressly
provided by the terms of this Agreement or any other Lender Agreement;
(i) adopt a plan of complete or partial liquidation or resolutions
providing for or authorizing such a liquidation or a dissolution, merger,
consolidation, restructuring, recapitalization or reorganization;
(j) settle or compromise any litigation (whether or not commenced prior
to the date of this Agreement) other than settlements or compromises of
litigation where the amount paid (after giving effect to insurance proceeds
actually received) in settlement or compromise does not exceed $25,000;
(k) contract, create, incur, assume or permit to exist any Lien (as
defined in the Merger Agreement) with respect to any Intellectual Property Asset
(as defined in the Merger Agreement;
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(l) except for pursuant to its obligations under those agreements
(without amendment thereto) set forth on Schedule 3.02(l) hereto, transfer,
assign, license or grant to anyone ownership in, or rights of any nature to use,
any of its Intellectual Property Assets; or
(m) enter into an agreement to take any of the foregoing actions.
ARTICLE IV. DEFAULT.
Section 4.01. Events of Default. If, while any part of the principal of
or interest on the Note remains unpaid, any one of the following "Events of
Default" shall occur:
(a) the failure by the Borrower to pay the principal of or interest and
expenses on the Note or any other amounts payable hereunder or under any Lender
Agreement within five (5) business days after the date such payment is due;
(b) the Borrower shall (i) have an order, judgment or decree entered by
any court of competent jurisdiction, approving a petition seeking reorganization
or liquidation of the Borrower, or appointing a receiver, trustee or liquidator
of the Borrower of all or a substantial part of its assets; (ii) admit in
writing to its inability to pay its debts as they mature; (iii) make a general
assignment for the benefit of creditors; (iv) be adjudicated a bankrupt or
insolvent; (v) file a voluntary petition in bankruptcy or a petition or an
answer seeking reorganization or an arrangement with creditors to take advantage
of any insolvency law; (vi) file any answer admitting the material allegations
of a petition filed against it in any bankruptcy, reorganization or insolvency
proceeding or fail to dismiss such petition within sixty (60) days after the
filing thereof; or (vii) take any action for the purpose of effecting any of the
foregoing;
(c) except as set forth in Section 4.01(a), the failure by the Borrower
to observe and perform any material covenant, condition and agreement under this
Agreement or the Merger Agreement which failure is not cured within fifteen (15)
business days after the earlier of written notice from the Lender or discovery
by the Borrower;
(d) the failure by the Borrower to observe and perform any material
covenant, condition and agreement under Section 3.02(d), (k) or (l) of this
Agreement;
(e) the Merger Agreement shall been terminated for any reason other
than pursuant to Section 9.1(b)(ii) or Section 9.1(c) thereof;
(f) Borrower grants any interest in or assignment of its assets to a
third party;
(g) After notice of redemption is provided, Borrower withdraws or
alters its notice of an event of default under the Preferred Stock Agreement or
in any other way reinstates Strategic Partner's funding mechanism or issues
shares of Series B Preferred in exchange for funding provided
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after such notice of redemption is provided or Borrower accepts or otherwise
receives funding from such Strategic Partner;
(h) the Merger Agreement shall have been terminated pursuant to Section
9.1(b)(ii) thereof and the amounts due to Lender hereunder have not been repaid
within fifteen (15) business days after such termination;
(i) the Merger Agreement shall have been terminated pursuant to Section
9.1(c) thereof and the amounts due hereunder have not been repaid within (30)
business days after such termination;
(j) Borrower receives funding for working capital from a third party
other than Lender; or
(k) Borrower, without the consent of Lender, enters into an agreement
with a third party, other than Lender, related to any material corporate
transaction not in the ordinary course of business.
then and in every such event, the Lender may, without notice to the Borrower,
declare the Note to be forthwith due and payable, whereupon the Note shall
forthwith become due and payable without presentment, demand, protest or further
notice of any kind, all of which are expressly waived by the Borrower; provided,
however, that upon the happening of any event under Subsection (b) of this
Section 4.01, then the Note shall, without the taking of any action by the
Lender, immediately become due and payable.
ARTICLE V. SECURITY.
Section 5.01. Security for the Note.
As security for the Loan and any other amounts advanced to the Borrower
under this Agreement, the Borrower shall enter into the Security Agreement
pursuant to which Borrower will grant to Lender a security interest in certain
of its assets other than its Intellectual Property Assets.
ARTICLE VI. MISCELLANEOUS.
Section 6.01. Notices. All necessary notices, demands and requests
permitted or required under this Agreement shall be in writing and shall be
deemed effective (a) if given by facsimile, when such facsimile is transmitted
to the facsimile number specified below, the appropriate answer back is received
and a copy is sent to such party by an express mail carrier at the address
indicated below, (b) four (4) days after being mailed by certified mail, return
receipt requested, postage prepaid to the applicable party at the address
indicated below or (c) one (1) business day after being sent by an express mail
carrier to the applicable party at the address indicated below:
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To the Lender: 000 Xxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxxxxxxx 00000
Attn: Vice President of Finance
Facsimile: (000) 000-0000
With copies to: Xxxxxxx, Procter & Xxxx XXX
Xxxxxxxx Xxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attn: Xxxxxxx X. Xxxx, P.C.
Xxxxx X. Xxxxxx, Esq.
Facsimile: (000) 000-0000
If to the Borrower: 0000 Xxxxxx Xxxx
Xx. Xxxx, Xxxxxxxxx 00000
Attn: Chief Executive Officer
Facsimile: (000) 000-0000
With a copy to: Xxxxxx & Xxxxxxx LLP
000 Xxxxx 0xx Xxxxxx
Xxxxxxxxxxx, XX 00000
Attn: Xxxxxxx X. Xxxxxx, Esq.
Facsimile: (000) 000-0000
or such other address or facsimile number as such party may hereafter specify
for the purpose of receiving notice hereunder.
Section 6.02. No Waiver. No failure to exercise, and no delay in
exercising, on the part of the Lender, any right, power or privilege hereunder
shall operate as a waiver thereof; nor shall any single or partial exercise of
any right, power or privilege hereunder preclude any other or further exercise
thereof or the exercise of any other right, power or privilege. The rights and
remedies herein provided are cumulative and not exclusive of any rights or
remedies provided by law.
Section 6.03. Governing Law; Construction. This agreement and the Note
shall each be deemed to be a contract made under the laws of the Commonwealth of
Massachusetts, and shall be construed in accordance with the laws of the
Commonwealth of Massachusetts. The descriptive headings of the several sections
hereof are for convenience only and shall not control or affect the meaning or
construction of any of the provisions hereof. This agreement, together with the
exhibits hereto, the Note and all other documents, instruments and agreements
executed pursuant hereto, constitute the entire agreement and understanding
between the parties hereto with respect to the subject
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matter hereof, supersede all prior agreements, understandings or representations
pertaining to the subject matter hereof, whether oral or written, and may not be
contradicted by evidence of any alleged oral agreement.
TO THE EXTENT PERMITTED BY LAW, THE BORROWER HEREBY WAIVES ITS RIGHT TO
TRIAL BY JURY WITH RESPECT TO ANY ACTION, CLAIM, SUIT OR PROCEEDING IN RESPECT
OR ARISING OUT OF THIS NOTE, THE LOAN AGREEMENT, AND THE OTHER AGREEMENTS AND
TRANSACTIONS CONTEMPLATED BY THE LOAN AGREEMENT.
Section 6.04. Amendments, Waivers and Consents. Any term, covenant or
condition of this Agreement may be amended, omitted or waived (either generally
or in a particular instance and either retroactively or prospectively) only by
written consent of the parties hereto.
Section 6.05. Counterparts. For the convenience of the parties and to
facilitate execution, this Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which shall
constitute one and the same document.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement
under seal as of the date first above written.
BORROWER:
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INTEG INCORPORATED
By: /s/ Xxxxx X. Xxxxxxx
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Name: Xxxxx X. Xxxxxxx
Title: Chief Executive Officer
LENDER:
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INVERNESS MEDICAL
TECHNOLOGY, INC.
By: /s/ Xxx Xxxxxxxxx
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Name: Xxx Xxxxxxxxx
Title: Chief Executive Officer
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