Exhibit 10.9
REVOLVING CREDIT
AGREEMENT
between
MISSOURI STATE BANK AND TRUST
COMPANY,
as Lender
and
ACCENTIA BIOPHARMACEUTICALS,
INC.,
as Borrower
Dated as of DECEMBER 30,
2005
REVOLVING CREDIT
AGREEMENT
THIS REVOLVING CREDIT AGREEMENT (the
“Agreement”) made and entered into as of this 30th day
of December, 2005, by and between Accentia Biopharmaceuticals, Inc.
(the “Borrower”), having an address of 324 South Hyde
Park Avenue, Suite 350, Tampa, Florida 33606, and Missouri State
Bank and Trust Company, a Missouri state banking corporation
(“Lender”), having an address of 12452 Olive Street
Road, Creve Coeur, Missouri 63141.
WITNESSETH:
WHEREAS, Borrower desires to obtain
a loan of up to $3,000,000 (the “Loan”) from Lender on
a revolving credit basis to fund the acquisition and licensing of
pharmaceutical products and medical devices.
WHEREAS, subject to, and in reliance
upon, the terms and conditions of this Agreement and the
representations and warranties made herein, all of which terms,
conditions, representations and warranties are material and being
relied on by Lender, Lender is willing to make the Loan to
Borrower.
NOW, THEREFORE, in consideration of
the premises, the mutual covenants and agreements hereinafter set
forth, and other good and valuable considerations, the receipt and
sufficiency of which are hereby acknowledged, and each intending to
be legally bound hereby, the parties agree as follows:
SECTION I. DEFINITIONS
As used herein:
“ ACCOUNT DEBTOR
” shall mean any Person who is and/or may become obligated to
borrower and the subsidiaries under or on account of any of the
Accounts.
“ ACCOUNTS ”
shall mean all trade accounts receivable of borrower which have
been invoiced by borrower.
“ AFFILIATE ”
shall mean any Person (a) which directly or indirectly through
one or more intermediaries controls, is controlled by or is under
common control with Borrower, (b) which directly or indirectly
through one or more intermediaries beneficially owns or holds or
has the power to direct the voting power of Twenty-Five Percent
(25%) or more of any class of capital stock or other equity
interests of Borrower, (c) which has Twenty-Five Percent
(25%) or more of any class of its capital stock or other
equity interests beneficially owned or held, directly or
indirectly, by Borrower or (d) who is a director, officer or
manager of Borrower. For Purposes of this definition,
“control” shall mean the power to direct the management
and policies of a person, directly or indirectly, whether through
the ownership of voting securities, by contract or
otherwise.
” AGREEMENT ”
means this Agreement including any amendments hereto or
modifications or restatements hereof and any supplements
hereto.
“ BORROWER ”
means Accentia Biopharmaceuticals, Inc., a Florida
corporation.
“ BORROWING BASE
” shall mean as of the date of any determination thereof, the
lesser of (i) $3,000,000 or (ii) Eighty Percent
(80%) of the aggregate face amount of all Eligible Accounts of
TEAMM Pharmaceuticals, Inc. (“TEAMM”) which are listed
(or which in accordance with GAAP should be listed on the books of
TEAMM as of such date) plus Twenty-Five Percent
(25%) of the book value of Eligible Inventory of TEAMM which
is listed (or which in accordance with GAAP should be listed on the
books of TEAMM as of such date) plus fifty percent
(50%) of the value of the stock pledged by, respectively, The
O’Donnell Trust and Dennis Ryll.
“ BORROWING BASE
CERTIFICATE ” shall have the meaning ascribed thereto in
Section 2.01(b).
“ CAPITAL EXPENDITURE
” shall mean any expenditure to purchase or otherwise acquire
a fixed asset (other than a Capitalized Lease Obligation) which, in
accordance with GAAP, is required to be capitalized on the balance
sheet of the Person making the same.
“ CAPITALIZED LEASE
” shall mean any lease of Property, whether real and/or
personal, by Borrower as lessee, which, in accordance with GAAP, is
required to be capitalized on the balance sheet of such
Person.
“ CAPITALIZED LEASE
OBLIGATIONS ” shall mean, as of the date of any
determination thereof, the amount of the aggregate rental
obligations due and to become due under all Capitalized Leases,
under which Borrower is a lessee, which would be reflected as a
liability on the balance sheet of Borrower on a consolidated basis,
in accordance with GAAP.
“ CERCLA ” shall
mean the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended by the Superfund Amendments and
Reauthorization Act of 1986, 42 U.S.C. §9601 et
seq ., and as the same may from time to time be further
amended.
“ CHANGE OF CONTROL
EVENT ” shall occur if, at any time, Frank E.
O’Donnell, Jr., M.D. ceases (i) to be the President of
Borrower, (ii) to be a Director of Borrower, and (iii) to have the
power to direct the management and policies of the
Borrower.
“ CLOSING DATE ”
means December 30, 2005, or such later date as Loan proceeds are
advanced hereunder.
“ CODE ” shall
mean the Internal Revenue Code of 1986, as amended, and any
successor statute of similar import, together with the regulations
thereunder, in each case as in effect from time to time. References
to sections of the Code shall be construed to also refer to any
successor sections.
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“ COLLATERAL ”
means any Property of Borrower which now or at any time hereafter
secures the payment or performance of any of the Obligations,
including, without limitation, all Collateral described in the
Security Agreement, and all proceeds, substitutes, replacements,
accretions, accessions and products of any of the foregoing; any
and all other collateral now or hereafter providing security for
the Loan and all other property, rights and interests described in
Section 2.07 hereof.
“ DEFAULT ” shall
mean any event or condition the occurrence of which would, with the
lapse of time or the giving of notice or both, become an Event of
Default.
“ DISTRIBUTIONS ”
in respect of any corporation or other entity shall mean dividends
or other distributions in cash or Property on or in respect of the
capital stock of such entity.
“ DOMESTIC BUSINESS DAY
” shall mean any day except a Saturday, Sunday or legal
holiday observed by the Lender.
“ ELIGIBLE ACCOUNTS
” shall mean all Accounts of TEAMM arising in the ordinary
course of TEAMM’s business from the sale of goods or the
rendering of services which the Lender, in its reasonable credit
judgment, deems to be an Eligible Account. Eligible Accounts shall
not include the following: (a) Accounts which remain unpaid for
more than ninety (90) days after their original invoice dates and
Accounts which are not due and payable within ninety (90) days
after their original invoice dates; (b) Accounts with respect to
which the Account Debtor is a shareholder of TEAMM or an Affiliate;
(c) Accounts with respect to which payment by the Account Debtor is
or may be conditional and Accounts commonly known as bill and hold
Accounts or Accounts of a similar or like arrangement; (d) Accounts
with respect to which the Account Debtor is not a resident or
citizen of or otherwise located in the continental United States of
America, unless such Accounts are backed in full by an irrevocable
letter of credit in form and substance satisfactory to the Lender
issued by a domestic commercial bank acceptable to the Lender; (e)
Accounts with respect to which the Account Debtor is the United
States of America, any state of the United States or any other
governmental body or any department, agency or instrumentality of
any of the foregoing, unless such Accounts are duly assigned to the
Lender in accordance with all applicable governmental and
regulatory rules and regulations (including, without limitation,
the Federal Assignment of Claims Act of 1940, as amended, if
applicable) so that the Lender is recognized by the Account Debtor
to have all of the rights of an assignee of such Accounts; (f)
Accounts which are not invoiced (and dated as of such date) and
sent to the Account Debtor thereof concurrently with or not later
than five (5) days after the shipment and delivery to said Account
Debtor of the goods giving rise thereto or the performance of the
services giving rise thereto; (g) Accounts arising from a
consignment sale, a “sale on approval” or a “sale
or return”; (h) Accounts which are subject to any dispute,
offset, counterclaim, discount or other claim or defense on the
part of the Account Debtor or to any claim on the part of the
Account Debtor contesting or denying liability under such Account;
(i) the Account Debtor has commenced a voluntary case under the
federal bankruptcy laws, as now constituted or hereafter amended,
or made an assignment for the benefit of creditors, or a decree or
order for relief has been entered by a court having jurisdiction in
the premises in respect of the Account Debtor in an involuntary
case under the federal bankruptcy laws, as now constituted or
hereafter amended, or any other petition or other application for
relief under the federal
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bankruptcy laws has been filed against the
Account Debtor, or if the Account Debtor has failed, suspended
business, ceased to be solvent, or consented to or suffered a
receiver, trustee, liquidator or custodian to be appointed for it
or for all or a significant portion of its assets or affairs;
(j) Accounts which are not subject to a first priority
perfected security interest in favor of the Lender.
“ ELIGIBLE
INVENTORY” means such inventory of TEAMM, which the
Lender, in the exercise of its reasonable credit judgment, deems to
be Eligible Inventory. Without limiting the generality of the
foregoing, no inventory shall be Eligible Inventory unless, in the
Lender’s opinion, it (i) is in good, new and saleable
condition, (ii) is not obsolete or unmerchantable,
(iii) meets all standards imposed by any governmental agency
or authority, (iv) conforms in all respects to the warranties
and representations set forth in this Agreement and the TEAMM
Security Agreement, (v) is at all times subject to the
Lender’s duly perfected, first priority security interest and
no other Lien other than Permitted Liens as defined herein,
(vi) is situated at premises occupied by Borrower or at
facilities leased or contracted by Borrower or TEAMM for storage,
and (vii) is not, in the Lender’s sole and absolute
discretion, unacceptable due to age, category, type, quantity or
other characteristic. Eligible Inventory does not include any
discontinued items.
“ ENVIRONMENTAL
CLAIM” shall mean any administrative, regulatory or
judicial action, judgment, order, consent decree, suit, demand,
demand letter, claim, Lien, notice of noncompliance or violation,
investigation or other proceeding arising (a) pursuant to any
Environmental Law or governmental or regulatory approval issued
under any such Environmental Law, (b) from the presence, use,
generation, storage, treatment, Release, threatened Release,
disposal, remediation or other existence of any Hazardous
Substance, (c) from any removal, remedial, corrective or other
response action pursuant to an Environmental Law or the order of
any governmental or regulatory authority or agency, (d) from any
third party seeking damages, contribution, indemnification, cost
recovery, compensation, injunctive or other relief in connection
with a Hazardous Substance or arising from alleged injury or threat
of injury to health, safety, natural resources or the environment
or (e) from any Lien against any Property owned, leased or operated
by Borrower in favor of any governmental or regulatory authority or
agency in connection with a Release, threatened Release or disposal
of a Hazardous Substance.
“ ENVIRONMENTAL
LAW” shall mean any Federal, state, local, foreign or
other statute, law, rule, regulation, order, consent decree,
judgment, permit, license, code, covenant, deed restriction, common
law, treaty, convention, ordinance or other requirement relating to
public health, safety or the environment, including, without
limitation, those relating to Releases, discharges or emissions to
air, water, land or groundwater, to the withdrawal or use of
groundwater, to the use and handling of polychlorinated biphenyls
or asbestos, to the disposal, treatment, storage or management of
hazardous or solid waste, Hazardous Substances or crude oil, or any
fraction thereof, to exposure to toxic or hazardous materials, to
the handling, transportation, discharge or release of gaseous or
liquid Hazardous Substances and any rule, regulation, order, notice
or demand issued pursuant to such law, statute or ordinance, in
each case applicable to any of the Property owned, leased or
operated by the Borrower or the operation, construction or
modification of any such Property, including, without limitation,
the following: CERCLA, the Solid Waste Disposal Act, as amended by
the Resource Conservation
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and Recovery Act of 1976 and the Hazardous and
Solid Waste Amendments of 1984, the Hazardous Materials
Transportation Act, as amended, the Federal Water Pollution Control
Act, as amended by the Clean Water Act of 1976, the Safe Drinking
Water Control Act, the Clean Air Act of 1966, as amended, the Toxic
Substances Control Act of 1976, the Occupational Safety and Health
Act of 1970, as amended, the Emergency Planning and Community
Right-to-Know Act of 1986, the National Environmental Policy Act of
1975, the Oil Pollution Act of 1990 and any similar or implementing
state or local law, and any state or local statute and any further
amendments to these laws providing for financial responsibility for
cleanup or other actions with respect to the Release or threatened
Release of Hazardous Substances or crude oil, or any fraction
thereof and all rules, regulations, guidance documents and
publication promulgated thereunder.
“ ERISA ” shall
mean the Employee Retirement Income Security Act of 1974, as
amended, and any successor statute of similar import, together with
the regulations thereunder, in each case as in effect from time to
time. References to sections of ERISA shall be construed to also
refer to any successor sections.
“ ERISA AFFILIATE
” shall mean any corporation, trade or business that is,
along with Borrower, a member of a controlled group of corporations
or a controlled group of trades or businesses, as described in
Sections 414(b) and 414(c), respectively, of the Code or
Section 4001 of ERISA.
“ ERISA EVENT ”
means (a) a Reportable Event with respect to a Pension Plan; (b) a
withdrawal by the Borrower or any ERISA Affiliate from a Pension
Plan subject to Section 4063 of ERISA during a plan year in which
it was a substantial employer (as defined in Section 4001(a)(2) of
ERISA) or a substantial cessation of operations which is treated as
such a withdrawal; (c) a complete or partial withdrawal by the
Borrower or any ERISA Affiliate from a Multiemployer Plan or
notification that a Multiemployer Plan is in reorganization; (d)
the filing of a notice of intent to terminate, the treatment of a
Pension Plan amendment as a termination under Section 4041 or 4041A
of ERISA, or the commencement of proceedings by the PBGC to
terminate a Pension Plan or Multiemployer Plan; (e) an event or
condition which might reasonably be expected to constitute grounds
under Section 4042 of ERISA for the termination of, or the
appointment of a trustee to administer, any Pension Plan or
Multiemployer Plan; or (f) the imposition of any liability
exceeding Fifty Thousand and 00/100 Dollars ($50,000.00) under
Title IV of ERISA, other than PBGC premiums due but not delinquent
under Section 4007 of ERISA, upon the Borrower or any ERISA
Affiliate.
“ EVENT OF DEFAULT
” shall have the meaning ascribed thereto in
Section 5.01.
“ FINANCIAL STATEMENTS
” means balance sheets and statements of income and capital
accounts for Borrower and the Subsidiaries for the applicable
fiscal year.
“ GAAP ” shall
mean, at any time, generally accepted accounting principles at such
time in the United States.
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“ GUARANTEE” by
any Person shall mean any obligation (other than endorsements of
negotiable instruments for deposit or collection in the ordinary
course of business), contingent or otherwise, of such Person
guaranteeing, or in effect guaranteeing, any Indebtedness,
liability, dividend or other obligation of any other Person (the
“primary obligor”) in any manner, whether directly or
indirectly, including, without limitation, all obligations incurred
through an agreement, contingent or otherwise, by such Person: (a)
to purchase such Indebtedness or obligation or any Property
constituting security therefor, (b) to advance or supply funds (i)
for the purchase or payment of such Indebtedness or obligation,
(ii) to maintain working capital or other balance sheet condition
or otherwise to advance or make available funds for the purchase or
payment of such Indebtedness or obligation, (iii) to lease property
or to purchase securities or other property or services primarily
for the purpose of assuring the owner of such Indebtedness or
obligation of the ability of the primary obligor to make payment of
the Indebtedness or obligation or (iv) otherwise to assure the
owner of the Indebtedness or obligation of the primary obligor
against loss in respect thereof. For the purposes of all
computations made under this Agreement, a Guarantee in respect of
any Indebtedness for borrowed money shall be deemed to be
Indebtedness equal to the then outstanding principal amount of such
Indebtedness for borrowed money which has been guaranteed or such
lesser amount to which the maximum exposure of the guarantor shall
have been specifically limited, and a Guarantee in respect of any
other obligation or liability or any dividend shall be deemed to be
Indebtedness equal to the amount of such obligation, liability or
dividend required to be shown as a liability under GAAP on the
balance sheet of such Person or such lesser amount to which the
maximum exposure of the guarantor shall have been specifically
limited. Guarantee when used as a verb shall have a
correlative meaning.
“ GUARANTORS” or
“GUARANTOR” shall mean each of the following:
TEAMM Pharmaceuticals, Inc., Hopkins Capital Group, L.L.C. and MOAB
Investments L.P. (sometimes hereinafter referred to collectively as
the “Entity Guarantors”) and Francis O’Donnell,
Jr. and The Francis E. O’Donnell, Jr. Irrevocable Trust
No. 1, dated May 25, 1990 (the “O’Donnell
Trust”), Dennis Ryll and Steven Stogel (sometimes hereinafter
referred to as the “Individual Guarantors”).
“ HAZARDOUS SUBSTANCE
” shall mean any hazardous or toxic material, substance or
waste, pollutant or contaminant which is regulated under any
Environmental Law or any other statute, law, ordinance, rule or
regulation of any Federal, state, local, foreign or other body,
instrumentality, agency, authority or official having jurisdiction
over any of the Property owned, leased or operated by Borrower or
its use, including, without limitation, any material, substance or
waste which is: (a) defined as a hazardous substance under Section
311 of the Federal Water Pollution Control Act (33 U.S.C.
§§1317), as amended; (b) regulated as a hazardous waste
under Section 1004 or Section 3001 of the Federal Solid Waste
Disposal Act, as amended by the Resource Conservation and Recovery
Act (42 U.S.C. §§6901 et seq .), as
amended; (c) defined as a hazardous substance under Section 101 of
the Comprehensive Environmental Response, Compensation and
Liability Act (42 U.S.C. §§9601 et seq .),
as amended; or (d) defined or regulated as a hazardous substance or
hazardous waste under any rules or regulations promulgated under
any of the foregoing statutes.
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“ INDEBTEDNESS”
shall mean, with respect to any Person, without duplication, all
indebtedness, liabilities and obligations of such Person which in
accordance with GAAP are required to be classified upon a balance
sheet of such Person as liabilities of such Person, and in any
event shall include all (a) obligations of such Person for borrowed
money or which have been incurred in connection with the purchase
or other acquisition of Property, (b) obligations secured by any
Lien (other than mechanics’, materialman’s,
architect’s, or similar Lien arising in the ordinary course
of a construction business) on, or payable out of the proceeds of
or production from, any Property owned by such Person, whether or
not such Person has assumed or become liable for the payment of
such obligations, (c) indebtedness, liabilities and obligations of
third parties, including joint ventures and partnerships of which
such Person is a venturer or general partner, recourse to which may
be had against such Person, (d) obligations created or arising
under any conditional sale or other title retention agreement with
respect to Property acquired by such Person, notwithstanding the
fact that the rights and remedies of the seller, lender or lessor
under such agreement in the event of default are limited to
repossession or sale of such Property, (e) Capitalized Lease
Obligations of such Person, (f) the aggregate undrawn face amount
of all letters of credit issued for the account of and/or upon the
application of such Person together with all unreimbursed drawings
with respect thereto, and (g) trade account payables and all other
liabilities of such Person as defined by GAAP.
“ INTEREST RATE ”
shall mean the Prime Rate.
“ INVESTMENT ”
shall mean any investment by Borrower in any Person, whether
payment therefor is made in cash or capital stock of Borrower and
whether such investment is by acquisition of stock or Indebtedness,
or by loan, advance, transfer of Property out of the ordinary
course of business, capital contribution, equity or profit sharing
interest or extension of credit on terms other than those normal in
the ordinary course of business or otherwise.
“ LAWS ” means
all ordinances, statutes, rules, regulations, orders, injunctions,
writs or decrees of any government or political subdivision or
agency or authority thereof (including, without limitation, the
states of Missouri, Florida and Delaware), or of any court or
similar entity having jurisdiction over Borrower or the
Collateral.
“ LIEN ” shall
mean any interest in Property securing an obligation owed to, or a
claim by, a Person other than the owner of the Property, whether
such interest is based on common law, statute or contract,
including, without limitation, any security interest, mortgage,
deed of trust, pledge, hypothecation, judgment lien or other lien
or encumbrance of any kind or nature whatsoever, any conditional
sale or trust receipt, any lease, consignment or bailment for
security purposes and any Capitalized Lease. The term
“Lien” shall include reservations, exceptions,
encroachments, easements, rights-of-way, covenants, conditions,
restrictions, leases and other title exceptions and encumbrances
affecting Property.
“ LOAN ” shall
mean that certain revolving credit loan of up to $3,000,000 to be
made by Lender to Borrower, pursuant to this Agreement.
“ LOAN DOCUMENTS
” means this Agreement, the Note, the Security Agreement and
all financing statements in connection therewith, and any and all
other documents or instruments
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now or hereafter evidencing or securing the
Loan, and all those documents specified in Section 2.07 hereof
and each and every other document to be delivered from time to time
pursuant to this Agreement with respect to the Loan or
otherwise.
“ MATERIAL ADVERSE
EFFECT ” shall mean (a) a material adverse effect on the
Properties, assets, liabilities, business, operations, prospects,
income or condition (financial or otherwise) of the Borrower taken
as a whole, (b) material impairment of Borrower’s ability to
perform any of its obligations under this Agreement, the Note, or
any of the other Loan Documents or (c) material impairment of the
enforceability of the rights of, or benefits available to, the
Lender under this Agreement, the Note, or any of the other Loan
Documents.
“ MATURITY DATE ”
means January 15, 2007.
“ MULTI-EMPLOYER PLAN
” shall mean a “multi-employer plan” as defined
in Section 4001(a)(3) of ERISA which is maintained for employees of
Borrower, or any ERISA Affiliate or to which Borrower, or any ERISA
Affiliate has contributed in the past or currently
contributes.
“ NOTE ” means
the Revolving Credit Note delivered to Lender, a copy of which is
attached hereto as Exhibit A .
“ NOTICE OF REVOLVING
CREDIT BORROWING ” shall have the meaning ascribed
thereto in Section 2.02.
“ OBLIGATIONS ”
means any and all present and future indebtedness, liabilities and
obligations of Borrower to Lender respecting this Loan, including,
without limitation, the following obligations of
Borrower:
A. To pay the principal of and
interest on the Note in accordance with the terms thereof and to
satisfy all of its other obligations and liabilities to Lender
under the Loan Documents;
B. To repay to Lender all amounts
advanced by Lender hereunder, or under any of the other Loan
Documents; and
C. To reimburse Lender, on demand,
for all of Lender’s expenses and costs, including the
reasonable fees and expenses of its counsel, agents and advisors,
in connection with the Loan and enforcement of the Loan Documents,
or any of them, whether or not litigation is commenced.
“ OBLIGOR ” shall
mean the Borrower, each Guarantor and each other Person who is or
shall at any time hereafter become primarily or secondarily liable
on any of the Obligations or who grants the Lender a Lien upon any
of the Property of such Person as security for any of the
Obligations.
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“ OCCUPATIONAL SAFETY AND
HEALTH LAWS ” shall mean the Occupational Safety and
Health Act of 1970, as amended, and any other Federal, state or
local statute, law, ordinance, code, rule, regulation, order or
decree regulating, relating to or imposing liability or standards
of conduct concerning employee health and/or safety, as now or at
any time hereafter in effect.
“ OPERATING LEASE
” shall mean any lease of Property, whether real and/or
personal, by a Person as lessee which is not a Capitalized
Lease.
“ OPERATING LEASE
EXPENSE ” shall mean, for the period in question, the
aggregate amount of all Operating Lease Expenses during such
period, determined in accordance with GAAP.
“ OPERATING LEASE
EXPENSES ” shall mean with respect to any Person, for the
period in question, the aggregate amount of rental and other
expenses incurred by such Person in respect of Operating Leases
during such period, all determined in accordance with
GAAP.
“ PBGC ” shall
mean the Pension Benefit Guaranty Corporation and any entity
succeeding to any or all of its functions under ERISA.
“ PENSION PLAN ”
shall mean a “pension plan,” as such term is defined in
Section 3(2) of ERISA, which is established or maintained by
Borrower or any ERISA Affiliate, other than a Multi-Employer
Plan.
“PERMITTED
LIENS” shall mean
liens held by Laurus Master Fund, Ltd., McKesson Corporation, and
Harbinger Mezzanine Partners, L.P. and/or lessors/providers of
office equipment or furnishings in amounts not to exceed $10,000.00
each.
“ PERSON ” shall
mean any individual, sole proprietorship, partnership, joint
venture, limited liability company, trust, unincorporated
organization, association, corporation, institution, entity or
government (whether national, Federal, state, county, city,
municipal or otherwise, including, without limitation, any
instrumentality, division, agency, body or department
thereof).
“ PRIME RATE ”
shall mean the interest rate announced from time to time by Lender
as its “prime rate” on commercial loans (which rate
shall fluctuate as and when said prime rate shall change). Borrower
acknowledges that such “prime rate” is a reference rate
and does not necessarily represent the lowest or best rate offered
by Lender to its customers.
“ PROPERTY” shall
mean any interest in any kind of property or asset, whether real,
personal or mixed, or tangible or intangible. Properties
shall mean the plural of Property. For purposes of this Agreement,
Borrower shall be deemed to be the owner of any Property which it
has acquired or holds subject to a conditional sale agreement,
financing lease or other arrangement pursuant to which title to the
Property has been retained by or vested in some other Person for
security purposes.
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“ RCRA ” shall
mean the Solid Waste Disposal Act, as amended by the Resource
Conservation and Recovery Act of 1976 and Hazardous and Solid Waste
Amendments of 1984, 42 U.S.C. §§6901 et seq
., and any future amendments.
“ RELEASE ” shall
mean any spilling, leaking, pumping, pouring, emitting, emptying,
discharging, injecting, escaping, leaching, dumping or disposing
into the environment, including, without limitation, the
abandonment or discarding of barrels, drums, containers, tanks
and/or other receptacles containing (or containing traces of) any
Hazardous Substance.
“ REPORTABLE EVENT
” shall have the meaning given to such term in
ERISA.
“ REVOLVING CREDIT
AVAILABILITY ” shall mean the amount identified as
“Revolving Credit Availability” on the most recent
Borrowing Base Certificate (in the form of Exhibit B
attached hereto) delivered to Lender in accordance with
Section 2.01 below.
“ REVOLVING CREDIT
LOANS ” shall have the meaning ascribed thereto in
Section 2.01(a).
“ REVOLVING CREDIT
PERIOD ” shall mean the period commencing on the date of
this Agreement and ending January 15, 2007.
“ SECURITY AGREEMENT
” shall mean that certain Security Agreement dated as of the
date hereof and executed by the Borrower in favor of the Lender, in
the form of Exhibit C attached hereto, as the same may from time to
time be amended, modified, extended, renewed or restated, by an
instrument in writing signed by all parties thereto.
“ SUBSIDIARY ”
shall mean any corporation or other entity of which more than Fifty
Percent (50%) of the issued and outstanding capital stock or other
equity interests entitled to vote for the election of directors or
persons performing similar functions (other than by reason of
default in the payment of dividends or other distributions) is at
the time owned directly or indirectly by Borrower and/or any
Subsidiary.
“TEAMM SECURITY
AGREEMENT” means
that certain Security Agreement dated as of even date hereof and
executed by TEAMM in favor of the Lender in the form of Exhibit
E attached hereto, as the same may from time to time be
amended, modified, extended, renewed or restated, by an instrument
in writing signed by the parties thereto. The security interest
granted therein secures TEAMM’s obligations under the Entity
Guaranty.
“ TOTAL OUTSTANDING
REVOLVING CREDIT LOANS ” shall mean, as of any date, the
aggregate principal amount of all Revolving Credit Loans
outstanding as of such date.
“ UNLIMITED GUARANTY
” shall mean that Continuing Contract of Guaranty, dated as
of even date herewith, and executed and delivered by the
Guarantors.
“ VOTING STOCK ”
shall mean, with respect to any corporation, any shares of stock of
such corporation whose holders are entitled under ordinary
circumstances to vote for the election of directors of such
corporation (irrespective of whether at the time stock of any other
class or classes shall have or might have voting power by reason of
the happening of any contingency).
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“ WELFARE PLAN ”
shall mean a “welfare plan” as such term is defined in
Section 3(1) of ERISA, which is established or maintained by
Borrower, or any ERISA Affiliate, other than a Multi-Employer
Plan.
1.02. Accounting Terms and
Determinations . Except as otherwise specified in this
Agreement, all accounting terms used in this Agreement shall be
interpreted, all accounting determinations under this Agreement
shall be made and all financial statements required to be delivered
under this Agreement shall be prepared in accordance with GAAP as
in effect from time to time, applied on consistent basis (except
for changes approved by Lender and by Borrower’s independent
certified public accountants).
SECTION II. THE LOAN
TERMS
2.01. Loan .
(a) Subject to compliance by
Borrower with all of the terms and conditions hereinafter set
forth, and predicated on the representations and warranties of
Borrower hereunder, all of which are material and are being relied
upon by Lender, being true and complete as of closing and as of
each date of funding, and so long as no Default or Event of Default
has occurred and is continuing, during the Revolving Credit Period,
Lender agrees to advance funds to Borrower (a “Revolving
Credit Loan”), from time to time, pursuant to
Section 2.03, not to exceed, in the aggregate, the from time
to time, Borrowing Base. Within the foregoing limits, Borrower may
borrow under this Section 2.01(a), prepay under
Section 2.05 and reborrow at any time during the Revolving
Credit Period under this Section 2.01(a). All advances not
paid prior to the last day of the Revolving Credit Period, together
with all accrued and unpaid interest thereon and all fees and other
amounts owing by Borrower to the Lender with respect thereto, shall
be due and payable on the last day of the Revolving Credit
Period.
(b) Borrower shall deliver to Lender
as soon as possible following the execution of this Agreement (with
respect to the month ended December 31, 2005) and on the
thirtieth (30th) day of each month thereafter commencing
January, 2006, a Borrowing Base Certificate in the form of
Exhibit B attached hereto and incorporated herein by
reference (a “Borrowing Base Certificate”) (together
with such supporting information as the Lender may reasonably
request in connection therewith) setting forth:
(i) the Borrowing Base and its
components as of the end of the immediately preceding
month;
(ii) the aggregate principal amount
of all Revolving Credit Loans outstanding as of the end of the
immediately preceding month; and
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(iii) the aggregate undrawn face
amount of all Letters of Credit outstanding as of the end of the
immediately preceding month plus all unreimbursed drawings
with respect thereto.
The Borrowing Base shown in such Borrowing Base
Certificate shall be and remain the Borrowing Base hereunder until
the next Borrowing Base Certificate is delivered to the Lender, at
which time the Borrowing Base shall be the amount shown in such
subsequent Borrowing Base Certificate. Each Borrowing Base
Certificate shall be certified (subject to normal year-end
adjustments) as being true, correct and complete in all material
respects by the President or the chief financial officer of
Borrower.
(c) If at any time the Total
Outstanding Revolving Credit Loans are greater than the Borrowing
Base as shown on the most recent Borrowing Base Certificate,
Borrower shall be automatically required (without demand or notice
of any kind by the Lender, all of which are hereby expressly waived
by Borrower) to immediately repay the Revolving Credit Loans and/or
surrender for cancellation the outstanding Letters of Credit, in
either case in an amount sufficient to reduce the amount of the
Total Outstanding Credit Loans to the amount of the Borrowing Base,
and to reduce the Letter of Credit Obligations to the Letter of
Credit Sublimit.
2.02. Method of Borrowing
.
(a) Borrower shall give notice (a
“Notice of Revolving Credit Borrowing”) to the Lender
by 10:00 a.m. (St. Louis time) on the Domestic Business Day of each
Revolving Credit Loan to be made to Borrower,
specifying:
(i) the date of such Revolving
Credit Loan, which shall be a Domestic Business Day; and
(ii) the aggregate principal amount
of such Revolving Credit Loan.
Such Notice of Revolving Credit Borrowing may be
delivered by fax or e-mail, or by telephone.
(b) A Notice of Revolving Credit
Borrowing shall not be revocable by Borrower.
(c) Not later than 2:00 p.m. (St.
Louis time) on the date of each Revolving Credit Loan, Lender shall
make available such Revolving Credit Loan, in Federal or other
funds immediately available in St. Louis, Missouri, to the Borrower
by crediting such funds to a demand deposit account of Borrower at
Lender.
(d) Borrower hereby irrevocably
authorizes Lender to reasonably rely on telephonic, telegraphic,
telecopy, telex or written instructions of any person identifying
himself or herself as one of the individuals listed on Schedule
2.02 attached hereto (or any other individual from time to time
authorized to act on behalf of Borrower pursuant to a resolution
adopted by the Board of Directors of Borrower and certified by the
Secretary of Borrower and
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delivered to the Lender) (each, an
“Authorized Person”) with respect to any request to
make a Revolving Credit Loan or a repayment hereunder, and on any
signature which the Lender believes to be genuine, and Borrower
shall be bound thereby in the same manner as if such individual
were actually authorized or such signature were genuine. Borrower
also hereby agrees to defend and indemnify the Lender and to hold
the Lender harmless from and against any and all claims, demands,
damages, liabilities, losses, costs and expenses (including,
without limitation, reasonable attorneys’ fees and expenses)
relating to or arising out of or in connection with the acceptance
of instructions purportedly given by any Authorized Person for
making Revolving Credit Loans or repayments hereunder.
2.03. The Note . The
Revolving Credit Loan shall be evidenced by and payable as to
principal and interest in accordance with the terms of a recourse,
negotiable revolving credit promissory note of Borrower (the
“Note”), dated as of the date hereof, being in the
original principal amount of $3,000,000, and substantially in the
form of Exhibit A attached hereto and incorporated by
reference herein. Lender shall record in its books and records the
date, amount, type and maturity of each Revolving Credit Loan made
by it and the date and amount of each payment of principal and/or
interest made by Borrower with respect thereto; provided, however,
that the obligation of Borrower to repay each Revolving Credit Loan
made to Borrower under this Agreement shall be absolute and
unconditional, notwithstanding any failure of Lender to make any
such recordation or any mistake by Lender in connection with any
such recordation. The books and records of Lender showing the
account between Lender and Borrower shall be conclusive evidence of
the items set forth therein in the absence of demonstrable
error.
2.04. Interest Rates and Interest
Payments . So long as no Event of Default has occurred and is
continuing, the Revolving Credit Loan shall bear interest on the
outstanding principal amount thereof, for each day from the date
such Revolving Credit Loan is made until it becomes due, at the
Interest Rate. So long as any Event of Default has occurred and is
continuing, the Revolving Credit Loan shall bear interest on the
outstanding principal amount thereof, at a per annum rate equal to
the Prime Rate plus five percent (5%). Such interest shall be
payable monthly in arrears on the thirtieth (30
th
) day of each
month, commencing on January 30, 2006, and at the maturity of
the Note (whether by reason of acceleration or otherwise). From and
after the maturity of the Note, whether by reason of acceleration
or otherwise, the Revolving Credit Loan shall bear interest,
payable on demand, for each day until paid at a rate per annum
equal to the Prime Rate plus five percent (5%). Interest shall be
computed on the basis of a year of 360 days and paid for the actual
number of days elapsed.
2.05. Voluntary Prepayments .
Borrower may upon notice to the Lender, pay, without penalty or
premium, the Revolving Credit Loan, in whole at any time, or in
part from time to time.
2.06. Mandatory Prepayments .
The Borrower is required to prepay the Note whenever, and as often
as may be necessary to keep, the unpaid principal balance thereof
from exceeding the Borrowing Base.
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2.07. Intentionally Deleted
.
2.08. Conditions Precedent to the
Closing of this Loan . Set forth below is a list of the
documents to be executed and delivered, and the actions to be
taken, all of which are conditions precedent to the closing of this
Loan, as follows:
(a) This Agreement and the Note,
each duly executed by Borrower;
(b) The Security Agreement in the
form of Exhibit B and such Uniform Commercial Code financing
statements, collateral schedules, stock powers, original stock
certificates and other documents as Lender may require in
connection therewith, each duly executed by Borrower;
(c) The Unlimited
Guaranty;
(d) The TEAMM Security Agreement in
the form of Exhibit D hereto and such Uniform Commercial
Code financing statements, collateral schedules, stock powers,
original stock certificates and other documents as Lender may
require in connection therewith, each duly executed by
Borrower;
(e) Stock Pledge Agreement, dated as
of even date herewith, in the form of Exhibit E hereto,
executed by The O’Donnell Trust for the benefit of Lender.
The aforesaid Stock Pledge Agreement secures the obligations of The
O’Donnell Trust pursuant to the Guaranty.
(f) Stock Pledge Agreement, dated as
of even date herewith, in the form of Exhibit F hereto,
executed by Dennis Ryll, M.D. for the benefit of Lender. The
aforesaid Stock Pledge Agreement secures the obligations of
Dr. Ryll pursuant to the Guaranty.
(g) Completion by Lender of its
review of all material, licenses, contracts and contingent
liabilities;
(h) A copy of the resolutions of the
Board of Directors of the Borrower duly adopted, which authorize
the execution, delivery and performance of this Agreement, the
Note, the Security Agreement, and any other Loan Documents to be
executed by Borrower, certified by its secretary;
(i) A copy of the resolutions of the
Board of Directors of the respective Entity Guarantors certified by
the Secretary thereof (or comparable officer in the case of an
Entity Guarantor which is not a corporation);
(j) A copy of the Certificate and
Articles of Incorporation of Borrower and any amendments thereto,
the By-laws of Borrower, and an incumbency certificate, certified
by the Secretary of Borrower, and Certificates of Good Standing of
Borrower in the State of its incorporation;
(k) For each Entity Guarantor, a
copy of the Certificate and Articles of Incorporation of such
Entity Guarantor and any amendments thereto, the By-Laws of such
Entity Guarantor, and an incumbency certificate, all certified by
the Secretary of such Entity and a Certificate of Good Standing for
such Entity Guaranty in the State of its incorporation;
14
(l) The initial Borrowing Base
Certificate and the Notice of Revolving Credit Borrowing required
by Sections 2.01(b) and 2.02;
(m) Evidence of the proper filing of
UCC-1 Financing Statement perfecting the security interests in
favor of the Lender in the Collateral;
(n) Evidence satisfactory to the
Lender that the insurance required of this Agreement and the other
Loan Documents is in full force and effect together with loss
payable endorsements in form and substance satisfactory to the
Lender, duly executed by the insurance company; and
(o) Such other agreements,
documents, instruments and certificates as the Lender may
reasonably request.
2.09 Fees . Borrower agrees
to pay Lender at Closing a fee in the amount of Thirty Thousand and
No/100 Dollars ($30,000.00). Notwithstanding the foregoing to the
contrary, the parties hereto agree that Lender will bill Borrower
post closing for such fee.
SECTION III. REPRESENTATIONS AND
WARRANTIES
Borrower hereby represents and
warrants to Lender that:
3.01. Existence and Power .
Borrower: (a) is duly organized, validly existing and in good
standing under the laws of the jurisdiction of its organization;
(b) has all requisite corporate or other powers required to
carry on its business as now conducted; (c) has all requisite
governmental and regulatory licenses, authorizations, consents and
approvals required to carry on its business as now conducted,
except such licenses, authorizations, consents and approvals the
failure to have could
