EXHIBIT (10) (p)
FIFTH AMENDMENT TO
SECOND AMENDED AND RESTATED LOAN AGREEMENT
AGREEMENT (this "Agreement"), made as of this 27th day of March, 1997,
by and among FLEET BANK-NH, a trust company organized under the laws of New
Hampshire ("Fleet"); MELLON BANK, N.A., a national banking association
("Mellon"); and IGI, INC., a Delaware corporation ("IGI"), IGEN, INC., a
Delaware corporation ("IGEN"), IMMUNOGENETICS, INC., a Delaware corporation
("ImmunoGen"), and BLOOD CELLS, INC., a Delaware corporation ("BCI"). Fleet and
Mellon are hereinafter sometimes individually referred to as a "Lender" and
collectively referred to as the "Lenders", and IGI, IGEN, ImmunoGen and BCI are
hereinafter sometimes individually referred to as a "Borrower" and collectively
referred to as the "Borrowers".
W I T N E S S E T H:
WHEREAS, the Lenders and the Borrowers are parties to a Second Amended
and Restated Loan Agreement between them dated as of December 13, 1995 (as
amended to date, the "Loan Agreement"), the terms and conditions of which are
hereby incorporated herein by reference; and
WHEREAS, the Borrowers have requested certain waivers and amendments
with respect to the covenants, terms and conditions of the Loans under the Loan
Agreement; and
WHEREAS, the Lenders are willing to grant such waivers and amendments
upon the terms and conditions contained in this Agreement;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained, the parties hereby agree as follows:
1. Definitions.
(a) Except as otherwise defined herein, all capitalized terms used in
this Agreement have the respective meanings ascribed to them in the Loan
Agreement.
(b) The following new definitions are hereby added to Section 1.01 of
the Loan Agreement in their appropriate alphabetical order:
"EBITDA" shall mean, as to the Borrowers on a consolidated basis as of
the date of determination thereof, an amount equal to the sum of: (a) Net Income
for the four (4) consecutive fiscal quarters of the Borrowers then ended (except
that, in calculating Net Income for purposes of determining EBITDA, full effect
shall be given to, and the Borrowers will be required to deduct, any and all net
losses (net of any related tax savings thereon) of the type described in clause
(b) of the definition of Net Income), plus (b) all federal and state income
taxes paid or accrued in respect of such fiscal period as reflected on the
consolidated statement of income of the Borrowers for such period, plus (c) all
Interest Expense paid or accrued in such fiscal period, plus (d) all amounts
deducted by the Borrowers in such fiscal period for depreciation of tangible
assets, plus (e) all amounts deducted by the Borrowers in such fiscal period in
respect of amortization of good will and/or other intangible assets.
"Senior Debt to EBITDA Ratio" shall mean, as of any date of
determination thereof, the ratio of Senior Debt as of such date to EBITDA for
the four (4) consecutive fiscal quarters of the Borrowers ended on such date.
2. Replacement of Existing Notes.
Each of the Notes outstanding immediately prior to the execution and
delivery of this Agreement shall be superseded and replaced by new Notes in
substantially the forms attached hereto as Exhibits X-0, X-0, X-0 and B-2,
respectively, and such replacement Notes shall, from and after the effectiveness
of this Agreement, be deemed to be the Fleet Revolving Credit Note, the Mellon
Revolving Credit Note, the Fleet Line of Credit Note, and the Mellon Line of
Credit Note, respectively, for all purposes of the Loan Agreement, Security
Documents and other agreements and instruments under and pursuant to the Loan
Agreement.
3. Modification of Certain Financial Covenants.
(a) Section 5.08 of the Loan Agreement is hereby amended so as to read
in full as follows:
Section 5.08. Net Income. In each quarter of each Fiscal Year as set
forth below, achieve Net Income of not less than the minimum amount set forth
below for such fiscal quarter:
Quarter Ending Minimum Net Income
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March 31, 1997 $200,000
June 30, 1997 $400,000
September 30, 1997 $500,000
December 31, 1997 $500,000
March 31, 1998 $625,000
and each quarter
thereafter
(b) Section 5.09 of the Loan Agreement is hereby amended so as to read
in full as follows:
Section 5.09. Indebtedness to Capital Base Ratio. As at the end of each
quarter of each Fiscal Year, maintain an Indebtedness to Capital Base Ratio of
not more than (a) 2.50 to 1 from January 1, 1997 through June 30, 1997, (b) 2.00
to 1 from July 1, 1997 through September 30, 1997, and (c) 1.50 to 1 from and
after October 1, 1997.
(c) Section 5.10 of the Loan Agreement is hereby deleted from the Loan
Agreement effective as of December 31, 1996, and replaced with the following new
Section 5.10, which is hereby incorporated into the Loan Agreement by this
reference:
Section 5.10. Senior Debt to EBITDA Ratio. As at the end of each
quarter of each Fiscal Year, maintain a Senior Debt to EBITDA Ratio of not more
than (a) 3.0 to 1 from December 31, 1997 through September 30, 1998, and (b)
2.50 to 1 from and after December 31, 1998.
(d) Section 5.11 is hereby deleted from the Loan Agreement effective as
of December 31, 1996.
(e) Each Compliance Certificate delivered pursuant to Section 5.04(d)
of the Loan Agreement shall include a detailed calculation of EBITDA, in
addition to all other information and calculations required to be stated or
included therein.
4. Waivers of Certain Financial Covenant Defaults.
(a) The Lenders hereby waive the Events of Default which have occurred
under and in respect of (i) Section 5.08 of the Loan Agreement as of December
31, 1996, and (ii) Section 5.11 of the Loan Agreement as at the end of the
Fiscal Year ended December 31, 1996; and the Lenders hereby agree not to assert
such Events of Default or any of the Agent's or the Lenders' remedies solely in
respect of such Events of Default.
(b) The waivers set forth in this paragraph 4 shall only apply to the
specific matters stated and only in the specific instances and as of the
specific dates and for the specific periods stated herein; and nothing contained
in this Agreement shall be deemed to constitute the Lenders' agreement or
consent to any other waiver or forbearance of any kind (whether of like or
unlike nature) at any other time, in any other instance, or under any other
circumstances.
5. Waiver Fees.
In the event that, at any time from and after the date of this
Agreement, the Borrowers shall request any waiver or forbearance by the Lenders
in respect of any Event of Default (including but not limited to Events of
Default under Sections 5.08 through 5.10 of Loan Agreement), and the Lenders
agree to grant such waiver and/or forbearance, the Borrowers shall pay to the
Agent (for allocation and payment 60% to Fleet and 40% to Mellon) the sum of
$10,000 for each such waiver or forbearance, which fee shall be charged
separately for each covenant under which waiver or forbearance is sought or
required, regardless of whether such Events of Default arise out of the same
acts, events, conditions or circumstances or occur as of the same dates or at
the same time. The Borrowers hereby acknowledge that the Lenders have required
the imposition of such fees as a result of the frequency with which the
Borrowers have historically required and requested waivers and/or forbearances
in respect of Events of Default, and that such fees constitute fair and
reasonable charges in respect of the additional risk normally entailed by the
occurrence of Events of Default and the additional investigation and diligence
prompted thereby. The Borrowers further acknowledge that such fees may be
charged and collected in addition to any other conditions or payments (payable
then or thereafter) which the Lenders may require in connection with any
particular waivers or forbearances. The foregoing notwithstanding, in the event
and to the extent that the Lenders' receipt of any fees under this paragraph 5
would cause the aggregate amounts paid or agreed to be paid for the use,
forbearance or detention of the indebtedness under and pursuant to the Loan
Agreement to exceed the maximum amount permitted under Applicable Law, then the
fees under this paragraph 5 shall be subject to reduction as and in the manner
provided in the Notes.
6. Representations and Warranties.
The Borrowers hereby confirm that (a) all representations and
warranties made by the Borrowers in the Loan Agreement are true and correct on
and as of the date hereof, and (b) no Default or Event of Default (other than
those waived pursuant to paragraph 4(a) above) has occurred and is continuing on
the date hereof.
7. Conditions Precedent.
The effectiveness of this Agreement and the amendments to be effected
hereby are expressly subject to (a) the execution and delivery of this Agreement
by the Borrowers and the Lenders, (b) the execution and delivery by the
Borrowers to the respective Lenders of the replacement Notes contemplated by
paragraph 2 above, (c) the payment by the Borrowers to the Agent (for allocation
and payment 60% to Fleet and 40% to Mellon) of an amendment and restructuring
fee in the aggregate amount of $40,000, and (d) the truth and accuracy, at the
time of satisfaction of the conditions set forth in the foregoing paragraphs
7(a), 7(b) and 7(c), of the Borrower's representations and warranties contained
in paragraph 6 above.
8. No Novation; Confirmation and Reaffirmation.
(a) Each of the Borrowers hereby reaffirms all of its representations
and warranties in the Loan Agreement (as amended hereby) and the Security
Documents on and as of the date hereof, as if expressly made on and as of the
date hereof.
(b) Each of the Borrowers hereby confirms the ongoing validity of all
of the Obligations outstanding on the date hereof (including but not limited to
Obligations under the Notes), and further acknowledges, confirms and agrees that
none of the amendments effected by this Agreement constitutes a novation of any
of the Obligations outstanding on the date hereof or immediately prior to the
effectiveness of this Agreement.
(c) Each of the Borrowers hereby reaffirms the validity of all of the
liens and security interests heretofore granted to the Agent as collateral
security for the Obligations, and acknowledges that all of such liens and
security interests, and all collateral heretofore pledged as security for the
Obligations, continue to be and remain collateral for the Obligations (whether
now existing and/or hereafter arising, including but not limited to the Bridge
Advances) from and after the effectiveness of this Agreement.
9. Ongoing Force and Effect.
Except as and to the extent expressly provided in this Agreement, all
covenants, terms and conditions of the Loan Agreement shall remain unchanged and
in full force and effect. All references to the Loan Agreement contained in the
Notes and the Security Documents shall hereafter mean and refer to the Loan
Agreement as amended by this Agreement, and all references to the Notes
contained in the Loan Agreement and the Security Documents shall hereafter mean
and refer to the Notes as amended and supplemented pursuant to this Agreement.
10. Miscellaneous.
(a) The Borrowers will jointly and severally reimburse the Lenders and
the Agent upon demand for all out-of-pocket costs, charges and expenses of the
Lenders and the Agent (including, without limitation, the reasonable fees and
disbursements of counsel to the Lenders and the Agent) in connection with the
preparation, execution and delivery of this Agreement, the replacement Notes
pursuant to paragraph 2 above, any and all further agreements and instruments in
connection herewith, and any amendments, modifications, consents, waivers or
enforcement action in connection herewith.
(b) This Agreement shall be governed by and construed in accordance
with the laws of the State of New Hampshire (without giving effect to principles
of conflicts of laws).
(c) Neither this Agreement nor any provision hereof may be waived,
amended or modified except by means of a written agreement signed by the party
to be charged therewith, and then only in the specific instance and for the
specific purpose stated therein.
(d) This Agreement shall be binding upon and shall inure to the benefit
of the parties hereto and their respective successors and assigns, except that
none of the Borrowers shall have any right to assign any of its rights or
obligations hereunder or any interest herein without the prior written consent
of the Lenders.
(e) Each of the Borrowers hereby consents to the jurisdiction of all
courts (state and federal) sitting in the State of New Hampshire, and of all
courts from which an appeal may be taken from any of such courts, for the
purpose of any suit, action or other proceeding arising out of any of its
obligations hereunder or with respect to the transactions contemplated hereby.
Each of the Borrowers hereby expressly waives any and all objections which it
may have as to venue in any of such courts, and also hereby knowingly WAIVES
TRIAL BY JURY in any such suit, action or other proceeding.
(f) The paragraph headings in this Agreement are included for
convenience of reference only, and shall not affect the construction or
interpretation of any of the provisions hereof.
(g) This Agreement may be executed in any number of counterparts, each
of which shall be deemed an original, but all of which shall together constitute
one and the same instrument.
(h) The parties acknowledge and agree that each of them and its counsel
have reviewed and negotiated the terms and provisions of this Agreement, and
have contributed to its final form; accordingly, any rules of construction to
the effect of construing ambiguities against the drafting party shall not be
employed in the interpretation of this Agreement, which shall be construed
fairly as to all parties hereto and not in favor of or against any particular
party who might generally have been responsible for the preparation hereof.
(i) This Agreement is intended for the sole and exclusive benefit of
the parties hereto and their respective successors and permitted assigns, and no
other person or entity shall have any right to rely on this Agreement or to
derive any benefit herefrom absent the express written consent of the party to
be charged with such reliance or benefit.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized officers as of the date first set forth above.
FLEET BANK-NH
By: ___________________________
MELLON BANK, N.A.
By: ___________________________
IGI, INC.
By: ___________________________
IGEN, INC.
By: ___________________________
IMMUNOGENETICS, INC.
By: ___________________________
BLOOD CELLS, INC.
By: ___________________________
STATE OF NEW HAMPSHIRE )
) ss:
COUNTY OF ___________ )
On the _____ day of March, 1997, personally appeared before me
________________, of Fleet Bank-NH, who acknowledged that he is the _________ of
Fleet Bank-NH, and that said instrument was signed by him on behalf of said
corporation by due authority.
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Notary Public
My Commission Expires:
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STATE OF _________ )
) ss:
COUNTY OF ________ )
On the _____ day of March, 1997, personally appeared before me
________________, of Mellon Bank, N.A., who acknowledged that he is the
_________ of Mellon Bank, N.A., and that said instrument was signed by him on
behalf of said corporation by due authority.
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Notary Public
My Commission Expires:
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STATE OF NEW JERSEY )
) ss:
COUNTY OF ________ )
On the _____ day of March, 1997, personally appeared before me
________________, of IGI, Inc., who acknowledged that he is the _________ of
IGI, Inc., and that said instrument was signed by him on behalf of said
corporation by due authority.
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Notary Public
My Commission Expires:
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STATE OF _________ )
) ss:
COUNTY OF ________ )
On the _____ day of March, 1997, personally appeared before me
________________, of IGEN, Inc., who acknowledged that he is the _________ of
IGEN, Inc., and that said instrument was signed by him on behalf of said
corporation by due authority.
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Notary Public
My Commission Expires:
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STATE OF NEW JERSEY )
) ss:
COUNTY OF ________ )
On the _____ day of March, 1997, personally appeared before me
________________, of Immunogenetics, Inc., who acknowledged that he is the
_________ of Immunogenetics, Inc., and that said instrument was signed by him on
behalf of said corporation by due authority.
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Notary Public
My Commission Expires:
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STATE OF NEW JERSEY )
) ss:
COUNTY OF ________ )
On the _____ day of March, 1997, personally appeared before me
________________, of Blood Cells, Inc., who acknowledged that he is the
_________ of Blood Cells, Inc., and that said instrument was signed by him on
behalf of said corporation by due authority.
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Notary Public
My Commission Expires:
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