Exhibit 10.13
Credit Facility Letter dated as of January 1, 2005 between Ardent
Pharmaceuticals, Inc. and Bioaccelerate, Inc.
Bioaccelerate Inc
1st January, 2005
Ardent Pharmaceuticals, Inc.
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Attn: President and CEO
Re: Credit Facility
Gentlemen:
BIOACCELERATE INC ("BIOACCELERATE INC") is pleased to make available to Ardent
Pharmaceuticals, Inc. (the "Company") a senior, secured credit facility (the
"Credit Facility"), pursuant to which BIOACCELERATE INC shall provide the
Company one or more loans (each, a "Tranche") in the aggregate principal amount
of up to Two Million Dollars ($2,000,000) dollars (the "Maximum Funded Amount"),
subject to the terms and conditions as hereinafter provided in this letter
agreement (this "Letter Agreement").
The First Tranche (the "Initial Tranche") will be payable to the Company or its
Creditors on an as needed basis in conjunction with a budget agreed by
BiIOACCELERATE INC and will be provided and funded to the Company upon receipt
of the following documents from the Company: (i) a grid promissory note (the
"Note"), executed by an authorized officer of the Company evidencing the
principal amount of funds available under the Credit Facility and the draw down
of the Initial Tranche (in the form attached hereto as Exhibit A), (ii) a
security agreement (the "Security Agreement") and other collateral documents
pursuant to which certain assets and subsequently acquired assets of the Company
shall be pledged to secure the repayment of the indebtedness evidenced by the
Note (the "Security Documents"), executed by an authorized officer of the
Company (in the form attached hereto as Exhibit B), (iii) the warrant (as
defined herein), executed by an authorized officer of the Company, (iv) such
other documents, each in form and substance satisfactory to BIOACCELERATE INC,
as BIOACCELERATE INC shall reasonably request. Subject to the conditions
specified herein, additional Tranches shall be made available on as needed basis
(each a "Funding Date"). Each Additional Tranche will be funded within two (2)
business days following receipt by BIOACCELERATE INC on a Funding Date of a
request for the funding of an Additional Tranche (each, a "Request") from the
Company.
The Company covenants to use the proceeds of each Tranche solely for the
purposes as agreed with BIOACCELERATE INC. In connection with the foregoing
covenant, BIOACCELERATE INC shall have the right (the "Audit and Demand Right"),
subject to customary confidentiality provisions, at any time during the term of
the Note and for such extended period of time as indebtedness remains
outstanding under any Note to (a) audit and inspect the books and records of the
Company for the purpose of determining the use of proceeds from any Tranche at
reasonable times and with reasonable prior notice in accordance with the terms
and conditions of the Note or (b) demand reasonable evidence from the Company
that the Company is in compliance with the foregoing covenant, which evidence
the Company shall provide to BIOACCELERATE INC promptly upon written request.
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Notwithstanding anything to the contrary provided herein or elsewhere,
BIOACCELERATE INC shall have no obligation to fund a Tranche if at the time a
Request is received by BIOACCELERATE INC and prior to when the funds requested
in the Tranche are sent, one or more of the following events shall have
occurred:
(iv) There shall be any material change in the business, properties,
assets, results of operations, prospects or financial condition of the Company
since December 31, 2004, except as represented and disclosed to BIOACCELERATE
INC;
(v) The Company shall be in breach of or default under any material
contract, license or other agreement or instrument; or
(vi) There shall not have occurred (a) any domestic or international
event, act or occurrence which has materially disrupted, or is likely in the
immediate future to materially disrupt, the securities markets; (b) a general
suspension of, or a general limitation on prices for, trading in securities on
the New York Stock Exchange or the American Stock Exchange or in the
over-the-counter market; (c) any outbreak of major hostilities or other national
or international calamity; (d) any banking moratorium declared by a state or
federal authority; (e) any moratorium declared in foreign exchange trading by
major international banks or other persons; (f) any material interruption in the
mail service or other means of communication within the United States; (g) any
change in the market for securities in general or in political, financial, or
economic conditions; or (h) neither the Company nor any of its officers,
directors and/or controlling shareholders have become the subject of or a named
party in any investigation or action involving any regulatory or self-regulatory
organization including, but not limited to, the SEC, the NASD or any state
and/or federal agency (each as set forth in this clause (iii), a "Pro Rata
Event").
As an inducement to BIOACCELERATE INC to provide the Credit Facility to the
Company, the Company's Parent, Enhance Biotech Inc, shall issue to BIOACCELERATE
INC (on the date of the funding of the Initial Tranche) five (5) year warrants
(the "Warrants") to purchase 750,000 shares of the Company's common stock (the
"Common Stock"), at an exercise price of $3.00 per share (subject to adjustment
for anti-dilution and other customary adjustments) .
This Agreement shall be governed by and construed in accordance with the
internal laws of the State of New York without regard to the conflicts of laws
principles thereof. The parties hereto hereby agree that any suit or proceeding
arising directly and/or indirectly pursuant to or under this instrument or the
consummation of the transactions contemplated hereby, shall be brought solely in
a federal or state court located in the City, County and State of New York. By
its execution hereof, the parties hereby covenant and irrevocably submit to the
in personam jurisdiction of the federal and state courts located in the City,
County and State of New York and agree that any process in any such action may
be served upon any of them personally, or by certified mail or registered mail
upon them or their agent, return receipt requested, with the same fall force and
effect as if personally served upon them in New York City. The parties hereto
waive any claim that any such jurisdiction is not a convenient forum for any
such suit or proceeding and any defense or lack of in personam jurisdiction with
respect thereto. In the event of any such action or proceeding, the party
prevailing therein shall be entitled to payment from the other party hereto of
its reasonable counsel fees and disbursements in an amount judicially
determined.
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Any notice, consent, request, or other communication given hereunder shall be
deemed sufficient if in writing and sent by registered or certified mail, return
receipt requested addressed to the Company, at its principal office as first
provided above, Attention: ▇▇▇▇▇▇▇ ▇▇▇▇. And to BIOACCELERATE INC at its
addressed provided above (or to such other address as either the Company and/or
BIOACCELERATE INC shall provide in writing to the other party). Notices shall be
deemed to have been given on the date of receipt by the other party.
Very truly yours,
BIOACCELERATE, INC.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇
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Name: ▇▇▇▇▇▇ ▇▇▇▇▇
Title: CFO
Accepted and agreed as of the
date first appearing above
ARDENT PHARMACEUTICALS, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
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Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Title: CFO
By: /s/ ▇▇▇▇▇▇▇▇▇▇▇ Every
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Name: ▇▇▇▇▇▇▇▇▇▇▇ Every
Title: President and CEO
Enhance Biotech, Inc.
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EXHIBIT A
FORM OF NOTE
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EXHIBIT B
FORM OF SECURITY AGREEMENT
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