LOAN AND SECURITY AGREEMENT By and Between WESTERNBANK PUERTO RICO (BUSINESS CREDIT DIVISION) as Lender And INYX EUROPE LIMITED And CELLTECH MANUFACTURING SERVICES LIMITED as Borrowers Dated: AUGUST30, 2005
EXHIBIT
10.1
By
and Between
WESTERNBANK
PUERTO RICO
(BUSINESS
CREDIT DIVISION)
as
Lender
And
INYX
EUROPE LIMITED
And
CELLTECH
MANUFACTURING
SERVICES
LIMITED
as
Borrowers
Dated:
AUGUST30, 2005
This
Loan
and Security Agreement, dated as of August 30, 2005, is entered into by and
between Westernbank Puerto Rico, a Puerto Rico Banking corporation (“Lender”)
and Inyx Europe Limited (“Inyx EU”), an England And Wales corporation and
Celltech Manufacturing Services Limited (the name of which is in the process
of
being changed to “Ashton Pharmaceuticals Limited) (“CMSL”), an England and Wales
corporation (Inyx EU and CMSL are sometimes hereinafter referred to as
“Borrower” or “Borrowers”).
WITNESSETH
WHEREAS,
Inyx EU’s parent corporation, Inyx, Inc.(“Inyx”) and Borrowers’ Affiliates, Inyx
USA, Ltd.(“Inyx USA”) and Inyx Pharma Limited (“Inyx Pharma”) and Lender have
entered into certain financing arrangements pursuant to which Lender has
made
loans and provided other financial accommodations to such Persons;
WHEREAS,
Inyx EU wishes to purchase all of the issued and outstanding shares of Capital
Stock of CMSL from Seller in order to acquire CMSL’s business and
assets;
WHEREAS,
Borrowers and certain of their Affiliates have requested that Lender provide
Borrowers with a credit facility and financial accommodations to be used
in part
to help pay the purchase price of such stock and for working capital;
and
WHEREAS,
Lender is willing to provide such credit facility and to make loans and provide
such financial accommodations on the terms and conditions set forth
herein;
NOW
THEREFORE, in consideration of the mutual conditions and agreements set forth
herein, and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto agree as
follows:
Section
1. DEFINITIONS
All
terms
used herein which are defined in Article 1 or Article 9 of the Uniform
Commercial Code shall have the meanings given therein unless otherwise defined
in this Agreement. All references to the plural herein shall also mean the
singular and to the singular shall also mean the plural unless the context
otherwise requires. All references to Borrower and Lender or pursuant to
the
definitions set forth in the recitals hereto, or to any other person herein,
shall include their respective successors and assigns. The words "hereof",
"herein", "hereunder", "this Agreement" and words of similar import when
used in
this Agreement shall refer to this Agreement as a whole and not any particular
provision of this Agreement and as this Agreement now exists or may hereafter
be
amended, modified, supplemented, extended, renewed, restated or replaced.
The
word "including" when used in this Agreement shall mean "including, without
limitation". An Event of Default shall exist or continue or be continuing
until
such Event of Default is waived in accordance with Section 11.3 or is cured
in a
manner satisfactory to Lender, if such Event of Default is capable
of being cured as determined by Lender. Any accounting term used herein unless
otherwise defined in this Agreement shall have the meanings customarily given
to
such term in accordance with GAAP. For purposes of this Agreement, the following
terms shall have the respective meanings given to them below:
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1.1
“Accounts” shall mean all present and future rights of Borrower to payment for
goods sold or leased or for services rendered, which are not evidenced by
instruments or chattel paper, and whether or not earned by
performance.
1.2
“Adjusted Net Worth” shall mean as to any Person, at any time, in accordance
with GAAP (except as otherwise set forth below), on a consolidated basis
for
such Person and its subsidiaries (if any), the amount equal to the sum of:
(a)
the difference between: (i) the aggregate net book value of all assets of
such
Person and its subsidiaries, calculating the book value of inventory for
this
purpose on a first-in-first-out basis, after deducting from such book values
all
appropriate reserves in accordance with GAAP (including all reserves for
doubtful receivables, obsolescence, depreciation and amortization) and (ii)
the
aggregate amount of the indebtedness and other liabilities of such Person
and
its subsidiaries (including tax and other proper accruals) plus
(b)
indebtedness of such Person and its subsidiaries which is subordinated in
right
of payment to the full and final payment of all of the Obligations on terms
and
conditions acceptable to Lender plus
(c) the
aggregate excess of the appraised value of all assets of such Person and
its
subsidiaries over the net book value of all assets of such Person and its
subsidiaries (after deducting from such book values all appropriate reserves
in
accordance with GAAP, including all reserves for doubtful receivables,
obsolescence, depreciation and amortization), based on appraisals acceptable
to
Lender.
1.3
“Affiliate” shall mean, with respect to a specified Person, any other Person
which directly or indirectly, through one or more intermediaries, controls
or is
controlled by or is under common control with such Person, and without limiting
the generality of the foregoing, includes (a) any Person which beneficially
owns
or holds ten percent (10%) or more of any class of voting stock of such Person
or other equity interests in such Person, (b) any Person of which such Person
or
a Subsidiary of such Person beneficially owns or holds ten percent (10%)
or more
of any class of voting stock or in which such Person beneficially owns or
holds
ten percent (10%) or more of the equity interests and (c) any director or
executive officer of such Person. For the purposes of this definition, the
term
“control” (including with correlative meanings, the terms (“controlled by and
under common control with”), as used with respect to any Person, means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of such Person, whether through
the
ownership of voting stock, by agreement or otherwise.
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1.4
“Ashton Real Property” shall mean the real property, together will all
buildings, structures and other improvements located thereon, of CMSL located
in
Ashton, England forming part of CMSL’s assets and all licenses, easements and
appurtenances thereto.
1.5
“Availability Reserves” shall mean, as of any date of determination, such
amounts as Lender may from time to time establish and revise in good faith
reducing the amount of Revolving Loans and Letter of Credit Accommodations
which
would otherwise be available to Borrowers under the lending formula(s) provided
for herein: (a) to reflect events, conditions, contingencies or risks which,
as
determined by Lender in good faith, do or may affect either (i) the Collateral
or any other property which is security for the Obligations or its value,
(ii)
the assets, business or prospects of any Borrower or any Obligor or (iii)
the
security interests and other rights of Lender in the Collateral (including
the
enforceability, perfection and priority thereof) or (b) to reflect Lender's
good
faith belief that any collateral report or financial information furnished
by or
on behalf of Borrowers, or any Obligor to Lender is or may have been incomplete,
inaccurate or misleading in any material respect or (c) to reflect outstanding
Letter of Credit Accommodations as provided in Section 2.2 hereof or (d)
in
respect of any state of facts which Lender determines in good faith constitutes
an Event of Default or may, with notice or passage of time or both, constitute
an Event of Default.
1.6
“Blocked Accounts” shall have the meaning set forth in section 6.3
hereof.
1.7
“Business Day” shall mean any day other than a Saturday, Sunday, or other day on
which commercial banks are authorized or required to close under the laws
of the
Commonwealth of Puerto Rico and a day on which Lender is open for the
transaction of business.
1.8
“Capital Lease” shall mean, as applied to any Person, any lease of (or any
agreement conveying the right to use) any property (whether real, personal
or
mixed) by such Person as lessee which in accordance with GAAP, is required
to be
reflected as a liability on the balance sheet of such Person.
1.9
“Capital Stock” shall mean, with respect to any Person, any and all shares,
interests, participations or other equivalents (however designated) of such
Person’s capital stock, partnership interests or limited liability company
interests at any time outstanding, and any and all rights, warrants or options
exchangeable for or convertible into such capital stock or other interests
(but
excluding any debt security that is exchangeable for or convertible into
such
capital stock).
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1.10
“Cash Equivalents” shall mean, at any time, (a) any evidence of indebtedness
with a maturity date of one hundred eighty (180) days or less issued or directly
and fully guaranteed or insured by the United States of America of any agency
or
instrumentality thereof; provided that,
the
full faith and credit of the United States of America is pledged in support
thereof; (b) certificates of deposit or bankers’ acceptances with a maturity of
one hundred eighty (180) days or less of any financial institution that is
a
member of the Federal Reserve System having combined capital and surplus
and
undivided profits of not less than $250,000,000; (c) commercial paper (including
variable rate demand notes) with a maturity of one hundred eighty (180) days
or
less issued by a corporation (except an Affiliate of a Borrower) organized
under
the laws of any State of the United States of America or the District of
Columbia and rated at least A-1 by Standard & Poor’s Ratings Service, a
division of The ▇▇▇▇▇▇-▇▇▇▇ Companies, Inc. or at least P-1 by ▇▇▇▇▇’▇ Investors
Service, Inc.; (d) repurchase obligations with a term of not more than thirty
(30) days for underlying security of the types described in clause (a) above
entered into with any financial institution having combined capital and surplus
and undivided profits of not less than $250,000,000; (e) repurchase agreements
and reverse repurchase agreements relating to marketable direct obligations
issued or unconditionally guaranteed by the United States of America or issued
by any governmental agency thereof and backed by the full faith and credit
of
the United States of America, in each case maturing within one hundred eighty
(180) days or less from the date of acquisition; provided,
that,
the
terms of such agreements comply with the guidelines set forth in the Federal
Financial Agreements of Depository Institutions with Securities Dealers and
Others, as adopted by the Comptroller of the Currency on October 31, 1985;
and
(f) investments in money market funds and mutual funds which invest
substantially all of their assets in securities of the types described in
clauses (a) through (e) above.
1.11
“Change of Control” shall mean (a) the transfer (in one transaction or a series
of transactions) of all or substantially all of the assets of a Borrower
to any
Person or group (as such term is used in Section 13(d)(3) of the Securities
And
Exchange Act of 1934[the Exchange Act]); (b) the liquidation or dissolution
of a
Borrower or the adoption of a plan by the stockholders of a Borrower relating
to
the dissolution or liquidation of any Borrower; (c) the acquisition by any
Person or group (as such term is used in Section 13(d)(3) of the Exchange
Act),
of beneficial ownership directly or indirectly, of a majority of the voting
power of the total outstanding voting stock of any Borrower or (d) during
any
period of one (1) year, individuals who at the beginning of such period
constituted the Board of Directors of any Borrower cease for any reason to
constitute a majority of the Board of Directors of such Borrower, then still
in
office; or (e) the failure of (i) the present beneficial holders of voting
stock
of Inyx to own and control, directly or indirectly fifty percent(50%)of the
voting power of the total outstanding voting stock of Inyx, and (ii) Inyx
to own
and control, directly or indirectly, one hundred (100%) percent of the voting
power of the total outstanding voting stock of Borrowers.
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1.12
“Closing Date” shall mean the date of making of the initial Loans hereunder by
Lender for the closing of the transactions contemplated by the Purchase
Agreements.
1.13
“Code” shall mean the Internal Revenue Code of 1986, as amended.
1.14
“Collateral” shall have the meaning set forth in Section 5 hereof.
1.15
“Collateral Access Agreement” shall mean an agreement in writing, in form and
substance satisfactory to Lender, from any lessor of premises to any Borrower
or
any other Person to whom any Collateral(including Inventory, Equipment, bills
of
lading or other documents of title)is consigned or who has custody, control
or
possession of any such Collateral or is otherwise the owner or operator of
any
premises on which any of such Collateral is located, pursuant to which such
lessor, consignee or other Person, inter
alia,
acknowledges, in form and substance satisfactory to Lender, Lender’s first
priority lien and security interest in such Collateral, and agrees to waive
any
and all claims such lessor, consignee or other Person may at any time have
against such Collateral and agrees to permit Lender access to, and the right
to
remain on the premises of such lessor, consignee or other Person, so as to
exercise Lenders rights and remedies and otherwise deal with such Collateral
and
in the case of any Person who at any time has custody, control or possession
of
any bills of lading or other documents of title, agrees to hold such bills
of
lading or other documents as bailee for Lender and to follow all instructions
of
Lender with respect thereto.
1.16
“Contract Manufacturing Customer” shall mean any Person for whom Borrower
manufactures, processes, provides services, conducts operations or performs
work, on or with respect to Inventory owned by such Person, or sold by such
Person to Borrower with the understanding that such Person will repurchase
such
Inventory from Borrower.
1.17
“Currency Reserves” shall mean, as of any date of determination, such amounts as
Lender may from time to time establish and revise in good faith reducing
the
amount of Revolving Loans and Letter of Credit Accommodations which would
otherwise be available to Borrowers under the lending formula(s) provided
for
herein: (a) to reflect events, conditions, contingencies or risks which,
as
determined by Lender in good faith, do or may affect the exchange rate between
the Reference Currency and British Pounds Sterling, Euros or any other currency
in which any Borrower does business, (b) to reflect Lender’s good faith belief
that any exchange controls may be imposed which would affect the payment
of any
of the Obligations (c) to reflect any devaluation of the British Pound Sterling,
the Euro or any other currency in which a Borrower does business or other
fluctuation in exchange rates of any such currency with respect to the Reference
Currency or (d) in respect of any state of facts which Lender determines
in good
faith or may, affect Borrowers’ ability to repay the Obligations in the
Reference Currency.
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1.18
“Debt” shall include, as to any Person, at any time (without duplication) (a)
any liability, whether or not contingent, of such Person in respect of borrowed
money, (b) all obligations of such Person evidenced by bonds, notes, debentures,
or other similar instruments, (c) all obligations of such Person to pay the
deferred purchase price of property or services, except (i) trade accounts
payable not unpaid more than one hundred twenty (120)days past the invoice
date
(ii) other accounts payable and current accrued expenses payable of such
Person
arising in the ordinary course of business which are not past due by more
than
ninety (90) days, (d) all obligations of such Person under a Capital Lease,
(e)
all indebtedness or other obligations of others guaranteed by such Person,
(f)
all obligations secured by a lien or security interest existing on property
owned by such Person, whether or not the obligations secured thereby have
been
assumed by such Person or are non recourse to the credit of such Person,
(g) all
reimbursement obligations of such Person (whether contingent or otherwise)
in
respect of letters of credit, bankers acceptances, surety or other bonds
or
similar instruments and (h) all obligations of such Person with respect to
redeemable stock or repurchase or redemption obligations with respect to
any
Capital Stock or other equity securities issued by such Person.
1.19
“Dilution” shall mean, for any period, the ratio of (a) the aggregate amount of
reductions in Accounts other than as a result of payments in cash, for such
period to (b) the aggregate amount of total sales, for such period.
1.20
“Due
Date” shall mean March 31, 2008.
1.21
“EBITDA” shall mean, with respect to any Person, for the period in
question,
the
sum
of (a) Net Income After Tax of such Person during such period plus
(b) to
the extent deducted in determining Net Income After Tax, the sum of (i) interest
expense during such period, plus
(ii) all
provisions for any Federal, Commonwealth, state, local, United Kingdom, and/or
foreign income taxes made by such Person during such period plus
(iii)
all depreciation and amortization expenses of Person during such period all
determined on a consolidated basis for such Person and its Subsidiaries,
if
any.
1.22
"Eligible Accounts" shall mean Accounts created by a Borrower which are and
continue to be acceptable to Lender based on the criteria set forth below.
In
general, Accounts shall be Eligible Accounts if:
(a) such
Accounts arise from the actual and bona fide
sale and
delivery by a Borrower or rendition of services by a Borrower in the ordinary
course of its business which transactions are completed in accordance with
the
terms and provisions contained in any documents related thereto;
(b) such
Accounts are not unpaid (i) more than one hundred twenty (120) days after
the
date of the original invoice for them and (ii) more than sixty (60) days
past
the due date thereof(but never more than one hundred twenty (120) days past
the
original invoice date);
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(c) such
Accounts comply with the terms and conditions contained in Section 7.2(c)
of
this Agreement;
(d) such
Accounts do not arise from sales on consignment, guaranteed sale, sale and
return, sale on approval, or other terms under which payment by the account
debtor may be conditional or contingent;
(e)
the
chief executive office of the account debtor with respect to such Accounts
is
located in the United States of America, the Commonwealth of Puerto Rico,
the
United Kingdom or at Lender’s option: if (i) the account debtor has delivered to
a Borrower an irrevocable letter of credit issued or confirmed by a bank
satisfactory to Lender and payable only in the United States of America and
in
U.S. dollars sufficient to cover such Account in form and substance satisfactory
to Lender and if required by Lender the original of such letter of credit
has
been delivered to Lender or Lender’s agent and the issuer thereof notified of
the assignment of the proceeds of such letter of credit to Lender, or (ii)
such
account is subject to credit insurance payable to Lender issued by an insurer
and on terms and in an amount acceptable to Lender or (iii) such Accounts
are
otherwise acceptable in all respects to Lender (subject to such lending formula
with respect thereto as Lender may determine);
(f)
such
Accounts do not consist of progress ▇▇▇▇▇▇▇▇, ▇▇▇▇ and hold invoices or
retainage invoices, except as to progress ▇▇▇▇▇▇▇▇ and ▇▇▇▇ and hold invoices,
if Lender shall have received an agreement in writing from the account debtor
in
form and substance satisfactory to Lender confirming the unconditional
obligation of the account debtor, with respect to progress ▇▇▇▇▇▇▇▇, to pay
such
progress ▇▇▇▇▇▇▇▇ and, with respect to ▇▇▇▇ and hold invoices, to take the
goods
related thereto and pay such invoice;
(g) the
account debtor with respect to such Accounts has not asserted a counterclaim,
defense or dispute and does not have, and does not engage in transactions
which
may give rise to, any right of setoff against such Accounts (but the portion
of
the Accounts of such account debtor in excess of the amount at any time and
from
time to time owed by Borrower to such account debtor or claimed owed by such
account debtor may be deemed Eligible Accounts);
(h) there
are
no facts, events or occurrences which would impair the validity, enforceability
or collect ability of such Accounts or reduce the amount payable or delay
payment thereunder;
(i) such
Accounts are subject to the first priority, valid and perfected security
interest of Lender and any goods giving rise thereto are not, and were not
at
the time of the sale thereof, subject to any liens except those permitted
in
this Agreement;
(j) neither
the account debtor nor any officer or employee of the account debtor with
respect to such Accounts is an officer, employee or agent of or Affiliated
with
any Borrower directly or indirectly by virtue of family membership, ownership,
control, management or otherwise;
(k) the
account debtors with respect to such Accounts are not any foreign government,
the United States of America, any State, political subdivision, department,
agency or instrumentality thereof, unless, if the account debtor is the United
States of America, any State, political subdivision, department, agency or
instrumentality thereof, upon Lender's request, the Federal Assignment of
Claims
Act of 1940, as amended or any similar State or local law, if applicable,
has
been complied with in a manner satisfactory to Lender;
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(l) there
are
no proceedings or actions which are threatened or pending against the account
debtors with respect to such Accounts which might result in any material
adverse
change in any such account debtor's financial condition;
(m)
such
Accounts of a single account debtor or its affiliates do not constitute more
than fifty percent (50%) of all otherwise Eligible Accounts (but the portion
of
the Accounts not in excess of such percentage may be deemed Eligible
Accounts);
(n)
such
Accounts are not owed by an account debtor who has Accounts unpaid more than
one
hundred twenty (120) days after the date of the original invoice for them
which
constitute more than fifty percent (50%) percent of the total Accounts of
such
account debtor;
(o) such
Accounts are owed by account debtors whose total indebtedness to Borrowers
does
not exceed the credit limit with respect to such account debtors as determined
by Lender from time to time (but the portion of the Accounts not in excess
of
such credit limit may be deemed Eligible Accounts); and
(p) such
Accounts are owed by account debtors deemed creditworthy at all times by
Lender,
as determined by Lender.
General
criteria for Eligible Accounts may be established and revised from time to
time
by Lender in good faith. Any Accounts which are not Eligible Accounts shall
nevertheless be part of the Collateral.
1.23
"Eligible Inventory" shall mean Inventory consisting of finished goods held
for
resale in the ordinary course of the business of Borrower and raw materials
for
such finished goods which are acceptable to Lender based on the criteria
set
forth below. In general, Eligible Inventory shall not include (a)
work-in-process, except, in Lender’s discretion, bulk finished solid drugs
listed by Borrower as work in process, immediately prior to bottling;
(b)
components which are not part of finished goods; (c)
spare
parts for equipment; (d)
packaging and shipping materials; (e)
supplies used or consumed in Borrowers business; (f)
Inventory at premises other than those owned and controlled by Borrowers,
except
if Lender shall have received an agreement in writing from the person in
possession of such Inventory and/or the owner or operator of such premises
in
form and substance satisfactory to Lender acknowledging Lender's first priority
security interest in the Inventory, waiving security interests and claims
by
such person against the Inventory and permitting Lender access to, and the
right
to remain on, the premises so as to exercise Lender's rights and remedies
and
otherwise deal with the Collateral; (g)
Inventory subject to a security interest or lien in favor of any person other
than Lender except those permitted in this Agreement; (h)
▇▇▇▇
and hold goods; (i)
unserviceable, obsolete or slow moving Inventory; (j)
Inventory which is not subject to the first priority, valid and perfected
security interest of Lender; (k)
returned, damaged and/or defective Inventory; and (l)
Inventory purchased or sold on consignment. General criteria for Eligible
Inventory may be established and revised from time to time by Lender in good
faith. Any Inventory which is not Eligible Inventory shall nevertheless be
part
of the Collateral.
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1.24
"Environmental Laws" shall mean all foreign(including United Kingdom), Federal,
State and local laws (including common law), legislation, rules, codes,
licenses, permits (including any conditions imposed therein), authorizations,
judicial or administrative decisions, injunctions or agreements between any
Borrower and any governmental authority, (a) relating to pollution and the
protection, preservation or restoration of the environment (including air,
water
vapor, surface water, ground water, drinking water, drinking water supply,
surface land, subsurface land, plant and animal life or any other natural
resource), or to human health or safety, (b) relating to the exposure to,
or the
use, storage, recycling, treatment, generation, manufacture, processing,
distribution, transportation, handling, labeling, production, release or
disposal, or threatened release, of Hazardous Materials, or (c) relating
to all
laws with regard to record keeping, notification, disclosure and reporting
requirements respecting Hazardous Materials. The term "Environmental Laws"
includes (i) the Federal Comprehensive Environmental Response, Compensation
and
Liability Act of 1980, the Federal Superfund Amendments and Reauthorization
Act,
the Federal Water Pollution Control Act of 1972, the Federal Clean Water
Act,
the Federal Clean Air Act, the Federal Resource Conservation and Recovery
Act of
1976 (including the Hazardous and Solid Waste Amendments thereto), the Federal
Solid Waste Disposal and the Federal Toxic Substances Control Act, the Federal
Insecticide, Fungicide and Rodenticide Act, and the Federal Safe Drinking
Water
Act of 1974, (ii) applicable state counterparts to such laws, (iii) any common
law or equitable doctrine that may impose liability or obligations for injuries
or damages due to, or threatened as a result of, the presence of or exposure
to
any Hazardous Materials, and (iv) means
all
applicable United Kingdom laws and regulations in force at any time relating
to
Environmental Matters or the Environment (for purposes of determining applicable
United Kingdom environmental laws: (A) Environment means
ecological systems, living organisms (including human beings) and all or
any of
the following media (whether alone or in combination): air (including air
within
buildings or other structures and whether above or below ground); land
(including buildings and any other structures or erections in, on or under
it or
any soil and anything below the surface of the land); land covered with water;
and water (including water under or within land or in pipe or sewerage systems
and sea, ground and surface water); (B) Environmental Matters means all or
any
of: waste (including packaging waste), contaminated land, discharges to land,
ground, surface and coastal waters and sewers, the abstraction of water,
the
extraction of natural resources, emissions to air, noise, vibration and light,
dangerous materials, common law, including nuisance, trespass and negligence,
statutory nuisance, radiation, radioactive substances and material,; and
the
conservation or protection of species, habitats, biodiversity, flora and
fauna.
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1.25
“Equipment” shall mean all of each Borrower’s now owned and hereafter
acquired equipment, wherever located, including machinery, data processing
and
computer equipment, computers and computer hardware and software (whether
owned
or licensed and including embedded software), vehicles, tools, furniture,
fixtures, racks, shelves, material handling equipment, all attachments,
accessions and property now or hereafter affixed thereto or used in connection
therewith, and substitutions and replacements thereof, wherever
located.
1.26
"Event of Default" shall mean the occurrence or existence of any event or
condition described in Section 10.1 hereof.
1.27
“Excess Availability” shall mean the amount, as determined by Lender, calculated
at any time, equal to: (a) the lesser of: (i) the amount of the Loans available
to Borrowers as of such time based on the applicable lending formulas and
subject to the sublimits and Availability Reserves and Currency Reserves
from
time to time established by Lender hereunder, and (ii) the Maximum Credit
minus
(b) the
sum of: (i) the amount of all then outstanding and unpaid Obligations plus
(ii)
the aggregate amount of all then outstanding and unpaid trade payables and
accrued expenses of Borrowers which are more than sixty (60) days past due
as of
such time, plus (iii) the amount of checks issued by Borrowers to pay trade
payables, but not yet sent and the book overdraft of Borrowers.
1.28
“Excess Cash Flow” shall mean with respect to any Person for any period the
difference between (a) the sum of (i) the Net Income After Tax , plus
(ii)
depreciation, plus
(iii)
amortization, for such Person for such period, plus
(iv) any
non cash charges included in the calculation of Net Income After Tax, of
such
Person for such period minus
(b) the
sum of (i) regularly scheduled principal payments on Debt(including without
limitation, the principal portion of payments in respect of capitalized lease
obligations), plus
(ii)
other capital expenditures in excess of the amount of financing therefore
which
financing is permitted under this Agreement, plus
(iii)
any non cash gains included in the calculation of Net Income After Tax, of
such
Person for such period, all determined on a consolidated basis for such Person
and its Subsidiaries, if any .
1.29
“Financing Agreements” shall mean, collectively, this Agreement and all notes,
guarantees, security agreement documents and instruments now or at any time
hereafter executed and/or delivered by a Borrower or any Obligor in connection
with this Agreement, as the same now exist or may hereafter be amended,
modified, supplemented, extended, renewed, restated or replaced.
1.30
“Foreign Accounts” shall mean Accounts, the chief executive office of the
account debtor with respect to such Accounts is not located in the United
States
of America or the Commonwealth of Puerto Rico or the United
Kingdom.
-11-
1.31
"Hazardous Materials" shall mean any hazardous, toxic or dangerous substances,
materials and wastes, including hydrocarbons (including naturally occurring
or
man-made petroleum and hydrocarbons), flammable explosives, asbestos, urea
formaldehyde insulation, radioactive materials, biological substances,
polychlorinated biphenyls, pesticides, herbicides and any other kind and/or
type
of pollutants or contaminants (including materials which include hazardous
constituents), sewage, sludge, industrial slag, solvents and/or any other
similar substances, materials, or wastes and including any other substances,
materials or wastes that are or become regulated under any Environmental
Law
(including any that are or become classified as hazardous or toxic under
any
Environmental Law).
1.32
“Income Before Taxes” with respect to any period of Borrowers shall mean the
amount shown on the line item denominated “Income before provision (benefit) for
income taxes”, shown on Borrower’s financial statements for such period,
prepared in accordance with GAAP, i.e., the consolidated pre tax net income
of
Borrowers for such period.
1.33
“Information Certificate” shall mean the Information Certificate of Borrowers,
Exhibit A to this Agreement, containing material information with respect
to
Borrowers and their respective business and assets, provided by or on behalf
of
Borrower to Lender in connection with the preparation of this Agreement and
the
other Financing Agreements and the financing arrangements provided for
therein.
1.34
“Intellectual Property” shall mean as to Borrowers such now owned and hereafter
arising or acquired patents, patent rights, patent applications, copyrights,
works which are the subject matter of copyrights, copyright registrations,
trademarks, trade names, trade styles, trademark and service ▇▇▇▇ applications,
and licenses and rights to use any of the foregoing; all extensions, renewals,
reissues, divisions, continuations, and continuations in part of any of the
foregoing; all rights to ▇▇▇ for past, present and future infringement of
any of
the foregoing; inventions, trade secrets, formulae, processes, compounds,
drawings, designs, blueprints, surveys, reports, manuals, and operating
standards; goodwill (including any goodwill associated with any trademark
or the
license of any trademark); customer and other lists in whatever form maintained;
trade secret rights, copyright rights, rights in works of authorship, domain
names and domain name registration; software and contract rights relating
to
computer software programs, in whatever form created or maintained.
1.35 “Inventory”
shall mean all of Borrowers now owned and hereafter existing or acquired
raw
materials, work in process, finished goods and all other inventory of whatsoever
kind or nature, wherever located.
1.36 “Letter
of Credit Accommodations” shall mean the letters of credit, merchandise purchase
or other guaranties which are from time to time either (a) issued or opened
by
Lender for the account of Borrower or any Obligor or (b) with respect to
which
Lender has agreed to indemnify the issuer or guaranteed to the issuer the
performance by Borrower of its obligations to such issuer.
-12-
1.37
“Licenses” shall mean all MHRA licenses, permits and authorizations of a
Borrower and all Intellectual Property relating thereto or the products which
may be sold thereunder, including those MHRA licenses, permits and
authorizations described on Schedule 1.37 hereto and that Intellectual Property
relating thereto or the products which may be sold thereunder described on
Schedule 1.37 hereto, as the same may be amended, supplemented or
modified.
1.38
“Loans” shall mean the Revolving Loans and the Term Loans.
1.39
“Manufacturing Contracts” shall mean all present and future contracts,
agreements and other arrangements, pursuant to which a Borrower manufactures
Inventory, goods or products for, or render sources to, a third party, including
those described on schedule 1.39 hereto, as the same may be amended,
supplemented or modified.
1.40
“Material Adverse Effect” shall mean a material adverse effect on (a) the
financial condition, business, performance or operation of a Borrower, or
(b)
the legality, validity or enforceability of this Agreement or any of the
other
Financing Agreements; (c) the legality, validity, enforceability, perfection
or
priority of the security interests and liens of Lender upon the Collateral
or
any other property which is security for the Obligations; (d) the Collateral
of
Borrower or the value of the Collateral; (e) the ability of a Borrower to
repay
the Obligations or of a Borrower to perform its obligations under this Agreement
or any of the other Financing Agreements; or (f) the ability of Lender to
enforce the Obligations or realize upon the Collateral or otherwise with
respect
to the rights and remedies of Lender under this Agreement or any of the other
Financing Agreements.
1.41
“Material
Contract” shall mean (a) any contract or other agreement (other
than the Financing Agreements), written or oral, of Borrowers involving
monetary
liability of or to any Person in an amount in excess of $1,000,000 in
any fiscal
year and (b) any other contract or other agreement (other than the Financing
Agreements), whether written or oral, to which a Borrower is a party
as to which
the breach, nonperformance, cancellation or failure to renew by any party
thereto would have a material adverse effect on the business, assets,
condition
(financial or otherwise) or results of operations or prospects of Borrower
or
the validity or enforceability of this Agreement, any of the other Financing
Agreements, or any of the rights and remedies of Lender hereunder or
thereunder.
|
1.42
|
“Maximum
Credit” shall mean the amount of
$36,500,000.
|
1.43
“Net
Amount of Eligible Accounts” shall mean the gross amount of Eligible
Accounts less (a) sales, excise or similar taxes included in the amount
thereof
and (b) returns, discounts, claims, credits and allowances of any nature
at any
time issued, owing, granted, outstanding, available or claimed with respect
thereto.
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1.44 “Net
Income After Tax” shall mean, with respect to any Person for any period, the
aggregate of the net income (loss) of such Person and its Subsidiaries,
if any
on a consolidated basis, for such period (excluding to the extent included
therein any extraordinary or non-recurring gains and extraordinary non-cash
charges to property, plant and equipment or goodwill) after deducting
all
charges (including income taxes) which should be deducted before arriving
at the
net income (loss) for such period, all as determined in accordance with
GAAP;
provided that,
(a) the
net income of any Person that is not a wholly-owned Subsidiary or that
is
accounted for by the equity method of accounting shall be included only
to the
extent of the amount of dividends or distributions paid or payable to
such
Person or a wholly-owned Subsidiary of such Person; and (b) the effect
of any
change in accounting principles adopted by such Person or its Subsidiaries
after
the date hereof shall be excluded. For the purposes of this definition,
net
income excludes any gain and non-cash loss (but not any cash loss) realized
upon
the sale or other disposition of any assets that are not sold in the
ordinary
course of business (including, without limitation, dispositions pursuant
to sale
and leaseback transactions) or of any Capital Stock of such Person or
a
Subsidiary of such Person and any net income realized as a result of
changes in
accounting principles or the application thereof to such Person.
1.45
"Obligations" shall mean any and all Revolving Loans, Term Loans, Letter
of
Credit Accommodations, and all other obligations, liabilities and indebtedness
of every kind, nature and description owing by Borrowers to Lender and/or
its
affiliates, including principal, interest, charges, fees, costs and expenses,
however evidenced, whether as principal, surety, endorser, guarantor
or
otherwise, whether arising under this Agreement or otherwise, whether
now
existing or hereafter arising, whether arising before, during or after
the
initial or any renewal term of this Agreement or after the commencement
of any
case with respect to Borrower under the Bankruptcy Code or any similar
statute
(including the payment of interest and other amounts which would accrue
and
become due but for the commencement of such case, whether or not such
amounts
are allowed or allowable in whole or in part in such case), whether direct
or
indirect, absolute or contingent, joint or several, due or not due, primary
or
secondary, liquidated or unliquidated, secured or unsecured, and however
acquired by Lender.
1.46
“Obligor” shall mean any guarantor, endorser, acceptor, surety or other person
liable on or with respect to the Obligations or who is the owner of any property
which is security for the Obligations, other than Borrower.
1.47
“Parent Financing Agreements” shall mean the Loan And Security Agreement”
between Inyx and Inyx USA, Ltd. and Lender, dated as of March 31, 2005, as
amended and the other “Financing Agreements” as defined, and referred to,
therein, as any of same have been and may hereafter be amended, from time
to
time.
-14-
1.48 "Payment
Account" shall have the meaning set forth in Section 6.3 hereof.
1.49
“Permitted Liens” shall mean those liens, encumbrances and security interests
(i) allowed by Section 9.8(b) through (f) hereof or (ii) as may otherwise
be
consented to by Lender, in writing.
1.50
“Person” or “person” shall mean any individual, sole proprietorship,
partnership, corporation (including any corporation which elects Subchapter
S
status under the Internal Revenue Code of 1986, as amended or N corporation
status under the Puerto Rico Internal Revenue Code of 1994, as amended),
limited
liability company, limited liability partnership, business trust, unincorporated
association, joint stock corporation, trust, joint venture or other entity
or
any government or any agency or instrumentality or political subdivision
thereof.
1.51 “Prime
Rate” shall mean the rate from time to time advised by Westernbank Puerto Rico,
or its successors, to its clients as its prime rate, whether or not such
advised
rate is the best rate available at such bank.
1.52
“Purchase Agreements” shall mean individually and collectively the “Agreement
for the Sale and Purchase of the entire Issued Share Capital of Celltech
Manufacturing Services Limited”, dated August 25, 2005 between Seller and Inyx
EU and Inyx , together with bills of sale, deeds, assignment and assumption
agreements and such other instruments of transfer as are referred to therein
and
all side letters with respect thereto, and all agreements, documents and
instruments executed and/or delivered in connection therewith; provided that,
the
term “Purchase Agreements” as used herein shall not include any of the
“Financing Agreements” as such term is defined herein.
1.53 “Purchased
Stock” shall mean all of the issued and outstanding shares of Capital Stock of
CMSL, to be acquired by Inyx EU pursuant to the Purchase
Agreements.
1.54
“PUT
Agreement” shall mean an agreement entered into between Lender and a Contract
Manufacturing Customer, in form and substance satisfactory to Lender, pursuant
to which the Contract Manufacturing Customer, among other things, agrees
with
Lender to:
(a)
Purchase, repurchase, take delivery of, and make payment for, at a price
acceptable to Lender, Inventory purchased by a Borrower from the Contract
Manufacturing Customer;
(b)
Purchase, at a price acceptable to Lender, services provided or work performed
by Borrower, for such Contract Manufacturing Customer;
(c)
Purchase, repurchase, take delivery of, and make payment for, at a price
acceptable to Lender, the outstanding amount of Borrower’s purchase orders for
inventory or products for such Contract Manufacturing Customer and all work
in
process and finished goods manufactured or processed or worked on by a Borrower
for such Contract Manufacturing Customer; and
(d)
Pay
to Lender all invoices rendered by Borrower for goods and services, in
accordance with the invoice term, without any offset, set-off, defense or
counterclaim whatsoever, for any reason.
-15-
1.55
“Real Estate Security” shall include the mortgage liens on the Real Property
and
interests of Borrower described in Schedule 1.55 hereto (the Mortgages),
(b) the
mortgage notes described on Schedule 1.55 hereto pledged or to be pledged
to
Lender and (c) liens and security interests in favor of Lender on all other
Real
Property of Borrowers, all on the terms and subject to the provisions contained
herein and in the other applicable Financing Agreements.
1.56 “Real
Property” shall mean all now owned and hereafter acquired real property of any
Borrower, including the Ashton Real Property together with all buildings,
structures and other improvements located thereon and all licenses, easements
and appurtenances relating thereto, whenever located.
1.57 “Receivables”
shall mean all of the following now owned or hereafter arising
or acquired property of Borrower: (a) all Accounts; (b) all interest, fees,
late
charges, penalties, collection fees and other amounts due or to become due
or
otherwise payable in connection with any Account; (c) all payment intangibles
of
Borrower; (d) all letters of credit, indemnities, guarantees, security or
other
deposits and proceeds thereof issued payable to Borrower or otherwise in
favor
of or delivered to Borrower in connection with any Account; or (e) all other
accounts, contract rights, chattel paper, instruments, notes, general
intangibles and other forms of obligations owing to Borrower, whether from
the
sale and lease of goods or other property, licensing of any property (including
Intellectual Property or other general intangibles), rendition of services
or
from loans or advances by Borrower or to or for the benefit of any third
person,
including loans or advances to any Affiliates or Subsidiaries of Borrower
or
otherwise associated with any Accounts, Inventory or general intangibles
of
Borrower (including without limitation, chooses in action, causes of action,
tax
refunds, tax refund claims, any funds which may become payable to Borrower
in
connection with the termination of any employee benefit plan and any other
amounts payable to Borrower from any employee benefit plan) and claims against
carriers and shippers, rights to indemnification, business interruption
insurance and proceeds thereof, casualty or any similar types of insurance
and
any process thereof and proceeds of insurance covering the lives of employees
on
which Borrower is a beneficiary.
1.58 “Records”
shall mean all of Borrower’s present and future books of account of every kind
or nature, purchase and sale agreements, invoices, ledger cards, bills of
lading
and other shipping evidence, statements, correspondence, memoranda, credit
files
and other data relating to the Collateral or any account debtor, together
with
the tapes, disks, diskettes, electronic or virtual files and other data and
software storage media and devices, file cabinets or containers in or on
which
the foregoing are stored (including any rights of a Borrower with respect
to the
foregoing maintained with or by any other person).
-16-
1.59
“Reference Currency” shall mean United States Dollars.
1.60
“Restricted Junior Payment” shall mean (a) any dividend or other distribution,
direct
or
indirect, on account of any shares of any class of Capital Stock of a Borrower
now or hereafter outstanding or any payment on account of a return of capital
(or the setting aside or otherwise depositing or investing of any sums for
such
purpose) or (b) any redemption, retirement, purchase, defeasance or other
acquisition, direct of indirect, of any shares of any class of Capital Stock
of
any Borrower or any Affiliate of a Borrower now or hereafter outstanding
(or the
setting aside or otherwise depositing or investing of any sums for such purpose)
or (c) any payment, direct or indirect, of any interest, principal of or
premium, if any, on any redemption, retirement, purchase or other acquisition,
direct or indirect, of any Subordinated Debt (or the setting aside or otherwise
depositing or investing of any sums for such purpose or (d) any payment of
money
or transfer of any interest in any asset to any Affiliate of Borrower, except
as
permitted by Section 9.11(a) hereof.
1.61 "Revolving
Loans" shall mean the loans now or hereafter made by Lender to or for the
benefit of Borrower on a revolving basis (involving advances, repayments
and
readvances) as set forth in Section 2.1 hereof.
1.62
"Seller" shall mean UCB Pharma Limited a company registered in England and
its
successors and assigns.
1.63
“Solvent” shall mean, at any time with respect to any Person, that at such time
such Person (a) is able to pay its debts as they mature and has (and has
a
reasonable basis to believe it will continue to have) sufficient capital
(and
not unreasonably small capital) to carry on its business consistent with
its
practices as of the date thereof, and (b) the assets and properties of such
Person at a fair valuation (and including as assets for this purpose at a
fair
valuation all rights of subrogation, contribution or indemnification arising
pursuant to any guarantees given by such Person) are greater than the
indebtedness of such Person, and including subordinated and contingent
liabilities computed at the amount which, such person has a reasonable basis
to
believe, represents an amount which can reasonably be expected to become
an
actual or matured liability (and including as to contingent liabilities arising
pursuant to any guarantee the face amount of such liability as reduced to
reflect the probability of it becoming a matured liability).
1.64 “Subordinated
Debt” shall mean all liabilities, indebtedness and obligations of Borrower or
any Obligor to any Person the payment of which is restricted by this Agreement
or any of the other Financing Agreements.
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1.65 “Subsidiary
or Subsidiaries” shall mean, with respect to any Person, any corporation,
association, limited liability company, limited liability partnership, or
other
limited or general partnership, trust, association or other business entity,
of
which an aggregate of at least a majority of the outstanding Capital Stock
or
other interests entitled to vote in the election of the Board of Directors
of
such corporation, managers, trustees or other controlling persons (whether
or
not the right so to vote exists or has been suspended by reason of the happening
of a contingency), or an equivalent controlling interest therein, of such
Person
is, at the time directly or indirectly, owned by such Person and/or one or
more
subsidiaries of such Person.
1.66 “Suppressed
Availability” shall mean the amount, as determined by Lender, calculated at any
time, which Borrower shall otherwise be entitled to borrow under applicable
lending formulas but which shall not be available to, and which shall be
withheld from, Borrower.
1.67
“Tangible Net Worth” shall mean, as of the date of any determination thereof,
the difference between (a) the amount of the capital stock accounts (net
of
treasury stock, at cost) of Borrower and its Subsidiaries as of such date
plus
(or
minus in the case of a deficit) the surplus and retained earnings of Borrower
and its Subsidiaries as of such date, plus
indebtedness of such Borrower and its Subsidiaries which is subordinated
in
right of payment to the full and final payment of all of the Obligations
on
terms and conditions acceptable to Lender, plus
the
portion of the Term Loans maturing more than one(1) year from such date of
determination, determined on a consolidated basis and in accordance with
GAAP
minus
(b) all
Intellectual Property (including any amount for goodwill, however designated,
representing the cost of acquisition of business and investments in excess
of
the book value thereof), unamortized debt discount and expense, unamortized
deferred charges, deferred research and development costs, any write-up of
asset
value after the date of this Agreement, non-competition covenants, signing
bonuses, prepaid expenses and other forms of prepaid assets, deferred taxes,
loans, advances and/or other amounts due from shareholders, directors, officers,
managers and/or employees, intercompany accounts, investments in and receivables
due from affiliates, deposits for insurance, utilities and the like and any
other assets treated as intangible assets under GAAP, as of such date, all
determined on a consolidated basis for Borrower and its Subsidiaries and
in
accordance with GAAP.
1.68
“Term Loans” shall mean the term loans made by Lender to Inyx EU as provided for
in Section 2.3 hereof and guaranteed by CMSL.
1.69
“Uniform
Commercial Code” or “UCC” shall include the Puerto Rico “Commercial
Transactions Act” and “UCC” shall mean the Uniform Commercial Code.
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1.70 "Value"
shall mean, as determined by Lender in good faith, with respect to Inventory,
(a) the lower of (i) cost computed on a first-in-first-out basis in accordance
with GAAP or (ii) market value or (b) any other valuation method acceptable
to,
and approved in writing by, Lender, in its sole discretion .
1.71
“Voluntary Prepayment” shall mean the prepayments in respect of the Term Loans
described in Section 2.3(f) hereof.
1.72
“Voting Stock” or voting stock shall mean with respect to any Person, (a) one(1)
or more classes of Capital Stock of such Person having general voting powers
to
elect at least a majority of the Board of Directors, managers, trustees or
other
persons performing similar functions, even if at the time any other class
or
classes of Capital Stock have, or might have, voting power by reason of the
happening of any contingency or (b) any Capital Stock of such Person convertible
or exchangeable without restriction at the option of the holder thereof into
Capital Stock of such Person described in clause (a) of this definition.
1.73 "Working
Capital" shall mean as to any Person, at any time, in accordance with GAAP,
on a
consolidated basis for such Person and its Subsidiaries (if any), the amount
equal to the difference between: (a) the aggregate net book value of all
current
assets of such Person and its subsidiaries (as determined in accordance with
GAAP), calculating the book value of inventory for this purpose on a
first-in-first-out basis and excluding prepaid expenses, and (b) all current
liabilities of such Person and its Subsidiaries (as determined in accordance
with GAAP), provided,
that,
as to
Borrower, for purposes of Section 9.14, the liabilities of Borrower to Lender
under this Agreement, shall not be considered current liabilities (whether
or
not classified as current liabilities in accordance with GAAP).
Section
2. Credit
Facilities.
2.1 Revolving
Loans.
(a) Subject
to and upon the terms and conditions contained herein, Lender agrees to make
Revolving Loans to CMSL from time to time in amounts requested by Borrower
up to
the amount equal to:
(i)
Up to
eighty five percent (85%) of the Net Amount of Eligible Accounts from the
sale
of pharmaceutical products and services, other than Foreign
Accounts;
plus
(ii)
Up
to sixty percent (60%) of the Value of Eligible Inventory,
less
(iii)
Any
Availability Reserves,
less
(iv)
Any
Currency Reserves;
-19-
provided that,
except
in Lender’s discretion, the aggregate amount of Revolving Loans at any time
outstanding pursuant to (x) Section 2.1(a)(i) and (ii) hereof shall in no
event
exceed Eleven Million Six Hundred Twenty Four Thousand Dollars ($11,700,000)
and
(y) Section 2.1(a)(ii) hereof shall in no event exceed Five Million Dollars
($5,000,000).
(b)
Lender may, in its discretion, from time to time, upon not less than five
(5)
days prior notice to Borrower, (i) reduce the lending formula with respect
to
Eligible Accounts and Eligible Inventory, to the extent that Lender determines
in good faith that: (A) the Dilution with respect to the Accounts for any
period
has increased in any material respect or may be reasonably anticipated to
increase in any material respect above historical levels, or (B) the general
creditworthiness of account debtors has declined or (C) the Dilution as of
the
close of any month is greater than five percent (5%) for such month or (ii)
reduce the lending formula(s) with respect to Eligible Inventory, to the
extent
that Lender determines that: (A) the number of days of the turnover of the
Inventory for any period has changed in any material respect or (B) the
liquidation value of the Eligible Inventory, or any category thereof, has
decreased, or (C) the nature and quality of the Inventory has deteriorated.
In
determining whether to reduce the lending formula(s), Lender may consider
events, conditions, contingencies or risks which are also considered in
determining Eligible Accounts, Eligible Inventory or in establishing
Availability Reserves or Currency Reserves. Lender anticipates that any
reduction on account of a determination by Lender under Section 2.1(b)(i)(C)
hereof will be at a rate which is not less than twice the percentage determined
thereunder.
(c)
Except in Lender's discretion, the aggregate amount of the Loans and the
Letter
of Credit Accommodations outstanding at any time shall not exceed the Maximum
Credit. In the event that the outstanding amount of any component of the
Loans,
or the aggregate amount of the outstanding Loans and Letter of Credit
Accommodations exceed the amounts available under the lending formulas, the
sublimits for the Maximum Amount of Revolving Loans, for Inventory or for
Letter
of Credit Accommodations set forth in Section 2.2(d) or the Maximum Credit,
as
applicable, such event shall not limit, waive or otherwise affect any rights
of
Lender in that circumstance or on any future occasions and Borrower shall,
upon
demand by Lender, which may be made at any time or from time to time,
immediately repay to Lender the entire amount of any such excess(es) for
which
payment is demanded.
(d)
Lender may treat the then undrawn amounts of outstanding Letter of Credit
Accommodations for the purpose of purchasing Eligible Inventory as Revolving
Loans to the extent Lender is in effect basing the issuance of the Letter
of
Credit Accommodations on the Value of the Eligible Inventory being purchased
with such Letter of Credit Accommodations. In determining the actual amounts
of
such Letter of Credit Accommodations to be so treated for purposes of the
sublimit, the outstanding Revolving Loans and Availability Reserves and Currency
Reserves shall be attributed first to any components of the lending formulas
in
Section 2.1(a) that are not subject to such sublimit, before being
attributed to the components of the lending formulas subject to such
sublimit.
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(e)
Subject
to the terms and conditions contained herein, Lender may, in its discretion
make
Revolving Loans to CMSL from time to time, in amounts requested by Borrower,
up
to a percentage of Foreign Accounts, which meet the criteria of Section
1.20(e)(i) or (ii) hereof and are otherwise Eligible Accounts, determined
by
Lender on an account by account basis from time to time and as may be revised
by
Lender from time to time. The amount of any such Revolving Loans shall be
included within the sublimits for Revolving Loans specified in Section 2.1(a)
hereof.
(f)
Lender may, in its discretion, increase the advance rate specified in Section
2.1(a)(ii) hereof from sixty percent (60%) to eighty five percent (85%) of
the
Value of Eligible Inventory, which is:
(i)
Finished goods Inventory, manufactured for a Contract Manufacturing Customer,
and
(ii)
The
subject of a PUT Agreement, satisfactory to Lender in all respects;
provided that;
Lender
shall establish a separate sublimit for Loans with respect to this Inventory,
included within the $5,000,000 sublimit for Eligible Inventory, specified
in
Section 2.1(a) hereof .
2.2
Letter
Of Credit Accommodations.
(a)
Subject to and upon the terms and conditions contained herein, at the request
of
Borrower, Lender agrees to provide or arrange for Letter of Credit
Accommodations for the account of CMSL containing terms and conditions
acceptable to Lender and the issuer thereof. Any payments made by Lender
to any
issuer thereof and/or related parties in connection with the Letter of Credit
Accommodations shall constitute additional Revolving Loans to CMSL pursuant
to
this Section 2.2.
(b)
In
addition to any charges, fees or expenses charged by any bank or issuer in
connection with the Letter of Credit Accommodations Borrower shall pay to
Lender
a letter of credit fee at a rate equal to one percent (1.00%) per annum on
the
daily outstanding balance of the Letter of Credit Accommodations for the
immediately preceding month (or part thereof), payable in arrears as of the
first day of each succeeding month, except that Borrower shall pay to Lender
such letter of credit fee, at Lender's option, without notice, at a rate
equal
to three percent (3.00%) per annum on such daily outstanding balance for:
(i)
the period from and after the date of termination or non-renewal hereof until
Lender has received full and final payment of all Obligations (notwithstanding
entry of a judgment against Borrower) and (ii) the period from and after
the
date of the occurrence of an Event of Default for so long as such Event of
Default is continuing as determined by Lender. Such letter of credit fee
shall
be calculated on the basis of a three hundred sixty (360) day year and actual
days elapsed and the obligation of Borrower to pay such fee shall survive
the
termination or non-renewal of this Agreement.
(c)
No
Letter of Credit Accommodations shall be available unless on the date of
the
proposed issuance of any Letter of Credit Accommodations the Revolving Loans
available to CMSL (subject to the Maximum Credit and any Availability Reserves
and any Currency Resreves) are equal to or greater than: (i) if the proposed
Letter of Credit Accommodation is for the purpose of purchasing Eligible
Inventory, other than Inventory described in Section 2.1(f) hereof, the sum
of
(A) forty percent (40%) of the Value of such Eligible Inventory, plus (B)
freight, taxes, duty and other amounts which Lender estimates must be paid
in
connection with such Inventory upon arrival and for delivery to one of
Borrower's locations for Eligible Inventory within England and (ii) if the
proposed Letter of Credit Accommodation is for any other purpose an amount
equal
to one hundred percent(100%) of the face amount thereof and all other
commitments and obligations made or incurred by Lender with respect thereto.
Effective on the issuance of each Letter of Credit Accommodation an Availability
Reserve shall be established in the applicable amount set forth in Section
2.2(c)(i) or Section 2.2(c)(ii).
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(d)
Except in Lender's discretion, the amount of all outstanding Letter of Credit
Accommodations and all other commitments and obligations made or incurred
by
Lender in connection therewith shall not at any time exceed Two Million Five
Hundred Thousand ($2,500,000) in the aggregate, included within the overall
Revolving Loans. At any time an Event of Default exists or has occurred and
is
continuing, upon Lender's request, Borrower will either furnish cash collateral
to secure the reimbursement obligations to the issuer in connection with
any
Letter of Credit Accommodations or furnish cash collateral to Lender for
the
Letter of Credit Accommodations and in either case, the Revolving Loans
otherwise available to CMSL shall not be reduced as provided in Section 2.2(c)
to the extent of such cash collateral.
(e)
Borrower shall indemnify and hold Lender harmless from and against any and
all
losses, claims, damages, liabilities, costs and expenses which Lender may
suffer
or incur in connection with any Letter of Credit Accommodations and any
documents, drafts or acceptances relating thereto, including any losses,
claims,
damages, liabilities, costs and expenses due to any action taken by any issuer
or correspondent or any other person with respect to any Letter of Credit
Accommodation. Borrower assumes all risks with respect to the acts or omissions
of the drawer under or beneficiary of, or any other person with respect to,
any
Letter of Credit Accommodation and for such purposes the drawer or beneficiary
shall be deemed Borrower’s agent. Borrower assume all risks for, and agree to
pay, all foreign, Federal, State and local taxes, duties and levies relating
to
any goods subject to any Letter of Credit Accommodations and any documents,
drafts or acceptances thereunder. Borrower hereby releases and holds Lender
harmless from and against any acts, waivers, errors, delays or omissions,
whether caused by Borrower, by any issuer or correspondent or otherwise with
respect to or relating to any Letter of Credit Accommodation. The provisions
of
this Section 2.2(e) shall survive the payment of Obligations and the termination
or non-renewal of this Agreement.
(f)
Nothing contained herein shall be deemed or construed to grant Borrower any
right or authority to pledge the credit of Lender in any manner. Lender shall
have no liability of any kind with respect to any Letter of Credit Accommodation
provided by an issuer other than Lender unless Lender has duly executed and
delivered to such issuer the application or a guarantee or indemnification
in
writing with respect to such Letter of Credit Accommodation. Borrower shall
be
bound by any interpretation made in good faith by Lender, or any other issuer
or
correspondent under or in connection with any Letter of Credit Accommodation
or
any documents, drafts or acceptances thereunder, notwithstanding that such
interpretation may be inconsistent with any instructions of Borrower. Lender
shall have the sole and exclusive right and authority to, and Borrower shall
not: (i) at any time an Event of Default exists or has occurred and
is
continuing, (A) approve or resolve any questions of non-compliance of documents,
(B) give any instructions as to acceptance or rejection of any documents
or
goods or (C) execute any and all applications for steamship or airway
guaranties, indemnities or delivery orders, and (ii) at all times,
(A) grant any extensions of the maturity of, time of payment for,
or time
of presentation of, any drafts, acceptances, or documents, and (B) agree
to any
amendments, renewals, extensions, modifications, changes or cancellations
of any
of the terms or conditions of any of the applications, Letter of Credit
Accommodations, or documents, drafts or acceptances thereunder or any letters
of
credit included in the Collateral. Lender may take such actions either in
its
own name or in Borrower’s names.
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(g)
Any
rights, remedies, duties or obligations granted or undertaken by Borrower
to any
issuer or correspondent in any application for any Letter of Credit
Accommodation, or any other agreement in favor of any issuer or correspondent
relating to any Letter of Credit Accommodation, shall be deemed to have been
granted or undertaken by Borrower to Lender. Any duties or obligations
undertaken by Lender to any issuer or correspondent in any application for
any
Letter of Credit Accommodation, or any other agreement by Lender in favor
of any
issuer or correspondent relating to any Letter of Credit Accommodation, shall
be
deemed to have been undertaken by Borrower to Lender and to apply in all
respects to Borrower.
2.3 Term
Loans.
Lender
is or will be making four (4) Term Loans to Inyx EU as follows:
(a)
(i)
Lender intends to make a Term Loan to Inyx EU for the purpose of acquiring
the
Purchased Stock and to be used as provided in section 6.6 (a) and (c) hereof,
in
the original principal amount of the lesser of (A) $3,000,000 and (B) seventy
five percent (75%) of the “Fair Market Value” of the Ashton Real Property. This
Term Loan (“Term Loan A”) is and will be (A) evidenced by a Term Loan A
Promissory Note in the original principal amount disbursed duly executed
and
delivered by Inyx EU to Lender concurrently with disbursement thereof, (B)
repaid together with interest and other amounts, in accordance with this
Agreement, the Term Loan A Promissory Note, and the other Financing Agreements,
calculated on the basis of 180 consecutive monthly installments payable on
the
1st day of each month, commencing December 1, 2005, of which all installments
except the last installment, shall each be in the principal amount of (1)
the
amount disbursed divided by (2) 180 and the last installment and final payment
shall be the amount of the entire unpaid balance of such Term Loan and Term
Loan
A Promissory Note and due on the Due Date, together with interest and other
amounts as provided herein and in the Term Loan A Promissory Note and (C)
secured by all of the Collateral. All amounts drawn under Term Loan A and
the
Term Loan A Promissory Note shall be payable calculated on the basis of 180
equal monthly payments of principal with a final payment of the then remaining
principal balance, interest and other amounts, as provided herein and in
the
Term Loan A Promissory Note, on the Due Date. Inyx EU shall execute and deliver
to Lender a Term Loan A Promissory Note at the time of disbursement of this
Term
Loan A in the principal amount of such disbursement. Interest only shall
be
payable monthly with respect to Term Loan A on September 1, 2005, October
1,
2005 and November 1, 2005.
(ii)
For
purposes of this Section 2.3(a) the term “Fair Market Value” with respect to the
Ashton Real Property means the fair value of such property, determined by
appraisals acceptable to Lender.
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(b)(i)
Lender intends to make a Term Loan to Inyx EU for the purpose of acquiring
the
Purchased Stock and to be used as provided in Section 6.6 (a) and (c) hereof,
in
the original principal amount of the lesser of (A) $9,800,000 and (B) eighty
percent (80%) of the Orderly Liquidation Value” of the CMSL Equipment. This Term
Loan (“Term Loan B”) is and will be (A) evidenced by a Term Loan B Promissory
Note in the original principal amount disbursed duly executed and delivered
by
Inyx EU to Lender concurrently with disbursement thereof, (B) repaid together
with interest and other amounts, in accordance with this Agreement, the Term
Loan B Promissory Note and the other Financing Agreements in consecutive
monthly
installments, payable on the 1st
day of
each month, commencing December 1, 2005, of which all installments except
the
last installment, shall each be in the principal amount of (1) the amount
disbursed divided by (2) 60 and the last installment and final payment shall
be
the amount of the entire unpaid balance of such Term Loan and Term Loan B
Promissory Note and due on the Due Date, together with interest and other
amounts as provided herein and in the Term Loan B Promissory Note and (C)
secured by all of the Collateral. Term Loan B shall in no event exceed
$9,800,000, during the term of this Agreement. All amounts drawn under Term
Loan
B and the Term Loan B Promissory Note shall be payable calculated on the
basis
of 60 equal monthly payments of principal with a final payment of the then
remaining principal balance, interest and other amounts, as provided herein
and
in the Term Loan B Promissory Note, on the Due Date. Inyx EU shall execute
and
deliver to Lender a Term Loan B Promissory Note at the time of disbursement
of
this Term Loan B in the principal amount of such disbursement. Interest only
shall be payable monthly with respect to Term Loan B on September 1, 2005,
October 1, 2005 and November 1, 2005.
(ii)
As
used in this Section 2.3(b), “CMSL Equipment” means Equipment owned by CMSL (A)
which is not fixtures, (B) which is not subject to a lien or security interest
of any other Person, (C) which is not leased, (D) which is not worn-out or
obsolete, (E) which is in good working order and (F) which is part of the
assets
of CMSL.
(iii)
For
purposes of this Section 2.3(b) the term “Orderly Liquidation Value”, with
respect to CMSL Equipment, means the value of such Equipment based on the
estimated gross amount that such Equipment should realize if sold piecemeal
on a
negotiated basis with the seller being compelled to sell, given a reasonable
period of time in which to find a purchaser, with the purchaser buying as
is,
where is, for cash, reduced by expenses, and with the purchaser assuming
any
costs to dismantle and remove, as determined by appraisals conducted at Inyx
EU’s expense, by independent appraisers acceptable to Lender.
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(c)
(i)
Lender
intends to make a Term Loan to Inyx EU for the purpose of acquiring the
Purchased Stock and to be used as provided in section 6.6 (a) and (c) hereof,
in
the original principal amount of the lesser of (i) $3,000,000 and (ii) fifty
percent (50%) of the “Net Fair Market Value of the Eligible Licenses”. This Term
Loan (“Term Loan C”) is and will be (A) evidenced by a Term Loan C Promissory
Note in the original principal amount disbursed duly executed and delivered
by
Inyx EU to Lender concurrently with disbursement thereof, (B) repaid together
with interest and other amounts, in accordance with this Agreement, the Term
Loan C Promissory Note and the other Financing Agreements in consecutive
monthly
installments, payable on the 1st
day of
each month, commencing December 1, 2005, of which all installments except
the
last installment, shall each be in the principal amount of (1) the amount
disbursed divided by (2) 60 and the last installment and final payment shall
be
the amount of the entire unpaid balance of such Term Loan and Term Loan C
Promissory Note and due on the Due Date, together with interest and other
amounts as provided herein and in the Term Loan C Promissory Note and (C)
secured by all of the Collateral. Term Loan C shall in no event exceed
$3,000,000, during the term of this Agreement. All amounts drawn under Term
Loan
C and the Term Loan C Promissory Note shall be payable calculated on the
basis
of 60 equal monthly payments of principal with a final payment of the then
remaining principal balance, interest and other amounts, as provided herein
and
in the Term Loan C Promissory Note, on the Due Date. Inyx EU shall execute
and
deliver to Lender a Term Loan C Promissory Note at the time of disbursement
of
this Term Loan C in the principal amount of such disbursement. Interest only
shall be payable monthly with respect to Term Loan C on September 1, 2005,
October 1, 2005 and November 1, 2005.
(ii)
For
purposes of this Section 2.3(c) the Net Fair Market Value of Eligible Licenses
will be the fair market value of such Licenses determined by appraisals
conducted at the expense of Inyx EU by independent appraisers acceptable
to
Lender, reduced by the amount of all reserves and contingencies, determined
by
Lender, in its discretion. “Eligible Licenses s” for this purpose are Licenses
(A) owned by CMSL, (B) which are legal, valid, binding and enforceable by
CMSL
to Lender’s satisfaction, (C) which are recorded or registered in the name of
CMSL in the appropriate filing or recording office therefore, (D) which are
free
and clear of all liens, security interests claims, charges, encumbrances
and
rights of third parties (including claims of infringement), (E) which by
their
respect terms do not terminate or expire prior to the Due Date, (F) which
are
assignable and which may be encumbered to Lender’s satisfaction, (G) with the
terms of which CMSL is in full compliance and as to which no event has occurred
which with or without the giving of notice or passage of time or both would
give
to a right of termination or revocation thereof, (H) as to which CMSL has
not
received any notice of termination or revocation, (I) which are shown on
Schedule 1.37 hereto and (J) which are otherwise acceptable to
Lender.
(d)
(i)
Lender intends to make a Term Loan to Inyx EU for the purpose of for the
purpose
of acquiring the Purchased Stock and to be used as provided in section 6.6
(a)
and (c) hereof, in the original principal amount of the lesser of (A) $9,000,000
or (B) the sum of (1) twenty five percent (25%) of the Net Fair Market Value
of
the Ashton Real Property plus (2) thirty six percent (36%) of the Fair Market
Value of the
-25-
CMSL
Equipment, owned by CMSL plus (3) fifty percent (50%) of the Net Fair Market
Value of the Eligible Licenses. This Term Loan (“Term Loan D”) is and will be
(A) evidenced by a Term Loan D Promissory Note in the original principal
amount
disbursed, duly executed and delivered by Inyx EU to Lender concurrently
herewith, (B) subject to mandatory prepayments in respect thereof, repaid
together with interest and other amounts in accordance with this Agreement,
the
Term Loan D Promissory Note, and the other Financing Agreements, calculated
on
the basis of 60 consecutive monthly installments, payable on the 1st
day of
each month commencing December 1, 2005, of which all installments, except
the
last installment shall each be in the principal amount of (1) the amount
disbursed divided by (2) 60 and the last installment and final payment shall
be
the amount of the entire unpaid balance of such Term Loan and Term Loan D
Promissory Note and due on the Due Date, together with interest and other
amounts as provided herein and in the Term Loan D Promissory Note and (C)
secured by all of the Collateral. All amounts drawn under Term Loan D and
the
Term Loan D Promissory Note shall be payable calculated on the basis of 60
equal
monthly payments of principal, with the final payment of the then remaining
principal balance, interest and other amounts, as provided herein and in
the
Term Loan D Promissory Note, on the Due Date. Inyx EU shall execute and deliver
to Lender a Term Loan D Promissory Note at the time of disbursement of this
Term
Loan D, in the principal amount of such disbursement. Interest only shall
be
payable monthly with respect to Term Loan D on September 1, 2005, October
1,
2005 and November 1, 2005.
(ii)
Term
Loan D and the Term Loan D Promissory Note shall be subject to mandatory
prepayments. Commencing with the fiscal quarter of Borrower beginning January
1,
2006, Inyx EU shall make and pay to Lender, quarterly, as a mandatory prepayment
in respect of Term Loan D and the Term Loan D Promissory Note, on the
30th
day
after the close of each fiscal quarter of Borrower, the greater of (A) fifty
percent (50%) of Borrowers’ Excess Cash Flow for the preceding fiscal quarter of
Borrowers and (B) the average amount of Borrowers’ Excess Availability during
such preceding fiscal quarter.
Such
mandatory prepayments are in addition to all other payments of principal,
interest and charges payable by Inyx EU to Lender in respect of Term loan
D and
will be due and payable on the thirtieth (30th) day after the close of each
fiscal quarter of Borrowers, and with respect to Borrower’s Excess Cash Flow,
based on Borrower’s internally prepared financial statements; provided
that,
if
Borrower’s audited financial statements for any fiscal year (which Borrower
agrees to furnish to Lender within one hundred twenty (120) days from the
close
of each of its fiscal years) shall reflect that Borrowers’ Excess Cash Flow, for
the preceding fiscal year, shall be in
excess
of that
reported by Borrowers to Lender in its internally prepared financial statements
for the fiscal quarters within such fiscal year then Borrowers shall pay
to
Lender, on demand, as an additional mandatory prepayment in respect of Term
Loan
D and the Term Loan D Promissory Note, fifty percent (50%) of such excess.
If
Borrower’s audited financial statements for any fiscal year shall reflect that
Borrowers’ Excess Cash Flow, for the preceding fiscal year, shall be
less
than
that
reported by Borrowers to Lender in its internally prepared financial statements
for the fiscal quarters within such fiscal year no repayment shall be made
by
Lender to Borrowers and Borrowers shall not receive any adjustment or credit
in
respect thereof. In the event Borrower or any Affiliate of Borrower shall
change
its fiscal year, appropriate adjustment shall be made in the periods based
on
which the Excess Cash Flow and mandatory prepayments will be determined.
All
mandatory prepayments of principal of Term Loan D shall be applied to payments
falling due in inverse order of maturity.
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(iii)
As
used in this Section 2.3(d) the terms “Net Fair Market Value of the Eligible
Licenses, “CMSL Equipment” and “Fair Market Value” shall have the respective
meanings prescribed in Section 2.3(c) hereof (with respect to Licenses),
Section
2.3(b) hereof (with respect to Equipment) and Section 2.3(a) hereof (with
respect to the Ashton Real Property).
(e)
Notwithstanding any other provision of this Agreement or the Term Loan
Promissory Notes, all Term Loans and Term Loan Promissory Notes shall become
immediately due and payable upon the termination or non-renewal of this
Agreement, or in Lender’s discretion upon the occurrence of an Event of Default
under this Agreement or any of the other Financing Agreements.
(f)
(i)
Inyx EU may make “Voluntary Prepayments” of Term Loan D and the Term Loan D
Promissory Note only, without premium or penalty, in integral multiples of
$100,000, but only under the following terms and conditions:
(A)
as of
both the date of notice of intent to make such Voluntary Prepayment and the
date
of making of such prepayment and after giving effect thereto, no Event of
Default or act, condition or event which with the giving of notice or passage
of
time or both would constitute an Event of Default shall exist or have occurred,
including a failure to comply with any of the provisions of Section 9.14,
9.16,
9.15 or 9.17 hereof,
(B)
As of
both the date of notice of intent to make such Voluntary Prepayment and the
date
of making of such prepayment and after giving effect thereto, Borrower shall
be
Solvent;
(C)
Inyx
EU shall have given Lender at least ten (10) Business Days prior written
notice
of its intent to make the Voluntary Prepayment, stating the amount of such
Voluntary Prepayment and the date on which such Voluntary Prepayment is to
be
made;
(D)
All
mandatory prepayments required to be made in respect of Term Loan D, pursuant
to
Section 2.3(d) hereof, shall have been made;
(E)
The
amount of all Voluntary Prepayments made in any fiscal year of Borrower may
not
exceed ten percent (10%) of Borrowers’ Excess Cash Flow for the preceding fiscal
year; and
(F)
The
amount of all Voluntary Prepayments made in any fiscal year of Borrower may
not
exceed ten percent (10%) of the outstanding balance of all Term Loans as
of the
first day of such fiscal year.
(ii)
All
Voluntary Prepayments shall be applied to Term Loan D to payments falling
due in
inverse order of maturity.
(iii)
The
aggregate amount of all Voluntary Prepayments made during any fiscal year
of
Borrower shall reduce the amount of dividends, if
any,
that
Borrower may pay, pursuant to Section 9.19 hereof during such fiscal year;
provided that,
the
aggregate amount of all Voluntary Prepayments made and dividends if
any,
that
maybe declared or paid, during any fiscal year of Borrowers (as may be permitted
by Section 9.19 hereof) may not exceed twenty five percent (25%) of Borrowers’
Excess Cash Flow for the preceding fiscal year.
(iv)
Inyx
EU having given notice of the intent to make a Voluntary Prepayment described
in
Section 2.3(f)(i)(C) hereof and all of the other conditions specified in
this
section 2.3(f) having been met, the amount of the Voluntary Prepayment specified
therein shall be due and payable on the date specified therein.
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2.4
Availability
Reserves.
All
Revolving Loans otherwise available to a Borrower pursuant to the lending
formulas and subject to the Maximum Credit and other applicable limits hereunder
shall be subject to Lender's continuing right to establish and revise
Availability Reserves and Currency Reserves.
2.5
Maximum
Credit. Except
in
Lender's discretion, the aggregate amount of all of the Loans at any time
shall
not exceed the Maximum Credit. In the event that the outstanding amount of
any
component of the Loans, or the aggregate amount of the outstanding Loans,
exceed
the amounts available under the lending formulas, or the Maximum Credit,
as
applicable, such event shall not limit, waive or otherwise affect any rights
of
Lender in that circumstance or on any future occasions and Borrower shall,
upon
demand by Lender, which may be made at any time or from time to time,
immediately repay to Lender the entire amount of any such excess(es) for
which
payment is demanded. The Maximum Credit shall have the following
sublimits:
|
(a)
Revolving Loans-
|
$11,700,000;
|
|
(b)
Eligible Inventory
|
|
|
(included
within the Revolving Loans) -
|
$
5,000,000;
|
|
(c)
Eligible Inventory Subject to PUT Agreements (included within
|
|
|
the
Eligible Inventory sublimit) -
|
$
5,000,000;
|
|
(d)
Letter Of Credit Accommodations (included within the Revolving
Loans) -
|
$2,500,000;
|
|
(e)
Term Loan A-
|
$
3,000,000;
|
|
(f)
Term Loan B-
|
$
9,800,000;
|
|
(g)
Term Loan C-
|
$
3,000,000; and
|
|
(h)
Term Loan D
|
$9,000,000.
|
3.1
Interest.
(a)
(a)
Borrower shall pay to Lender interest on the outstanding principal amount
of (i)
the non contingent Obligations, except the Term Loans, at the rate of one
percent (1.00%) per annum in excess of the Prime Rate, (ii) Term Loan A,
Term
Loan B and Term Loan C, at the
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rate
of
two percent (2.00%) per annum in excess of the Prime Rate and (iii) Term
Loan D,
at the rate of fifteen percent (15%) per annum; except that,
at
Lender's option, without notice, Borrower shall pay to Lender interest at
the
rate of (i) three percent (3.00%) per annum in excess of the Prime Rate:
(A) on
all of the non contingent Obligations, except the Term Loans for (1) the
period
from and after the date of termination or non-renewal hereof until such time
as
Lender has received full and final payment of all such Obligations
(notwithstanding entry of any judgment against Borrower), and (2) the period
from and after the date of the occurrence of an Event of Default for so long
as
such Event of Default is continuing as determined by Lender and (B) on the
Revolving Loans, at any time outstanding in excess of the amounts available
to
Borrower under Section 2 (whether or not such excess(es), arise or are made
with
or without Lender's knowledge or consent and whether made before or after
an
Event of Default), (ii) four percent (4.00%) per annum in excess of the Prime
Rate on Term Loan A, Term Loan B and Term Loan C for the periods specified
in
Section 3.1(a)(i)(A)(1) and (2) hereof and (iii) seventeen percent (17%)
per
annum on Term Loan D for the periods specified in Section 3.1(a)(i)(A)(1)
and
(2) hereof; provided
that,
the
minimum interest rate, at all times payable hereunder, shall never be less
than
six and one half percent (6.50%) per annum on the non contingent Obligations,
except the Term Loans and (y) seven and one half percent (7.50%) per annum
on
Term Loan A, Term Loan B and Term Loan C.
(b)
Interest shall be payable by Borrower to Lender monthly in arrears not later
than the first day of each calendar month and shall be calculated on the
basis
of a three hundred sixty (360) day year and actual days elapsed. The interest
rate shall increase or decrease by an amount equal to each increase or decrease
in the Prime Rate effective on the first day of the month after any change
in
such Prime Rate is advised or announced. The increase or decrease shall be
based
on the Prime Rate in effect on the last day of the month in which any such
change occurs. All interest accruing hereunder on and after an Event of Default
or termination or non-renewal hereof shall be payable on demand. In no event
shall charges constituting interest payable by Borrower to Lender exceed
the
maximum amount or the rate permitted under any applicable law or regulation,
and
if any part or provision of this Agreement is in contravention of any such
law
or regulation, such part or provision shall be deemed amended to conform
thereto.
3.2 Closing
Fee.
Borrower shall pay to Lender as a closing fee of one and one half percent
(1.50)% of the Maximum Credit, which shall be fully earned as of and payable
on
the date hereof.
3.3 Servicing
Fee.
Borrower shall pay to Lender monthly a servicing fee in an amount equal to
$2,500 in respect of Lender's services for each month (or part thereof) while
this Agreement remains in effect and for so long thereafter as any of the
Obligations are outstanding, which fee shall be fully earned as of and payable
in advance on the date hereof and on the first day of each month hereafter.
-29-
3.4 Unused
Line Fee.
Borrower shall pay to Lender monthly, an unused line fee at a rate equal
to one
half of one percent (0.50%) percent per annum calculated upon the amount
by
which $10,000,000 exceeds the average daily principal balance of the outstanding
Revolving Loans and Letter of Credit Accommodations during the immediately
preceding month (or part thereof), while this Agreement is in effect and
for so
long thereafter as any of the Obligations are outstanding, which fee shall
be
payable on the first day of each month in arrears.
3.5
Letter
of Credit Fees.
Borrower
shall pay Lender fees for Letter of Credit Accommodations as stated in Section
2.2(b) hereof.
3.6
Facility
Fee.
Borrower
shall pay to Lender commencing September 1, 2006, and annually thereafter
as a
facility fee the amount of $50,000 for providing the revolving credit facility,
which shall be fully earned as of and payable on such dates.
3.7
Success
Fee.
In the
event that Borrower has positive Income Before Taxes in excess of Zero
Dollars($0) for any three(3) of its fiscal years ending during the
Term(including any renewal thereof) of this Agreement then Borrower shall
pay to
Lender a “success fee” in the amount of the greater of (a) $100,000 and (b)ten
percent (10%) the Income Before Taxes of Borrower for such fiscal year,
determined on a consolidated basis and in accordance with GAAP, for and with
respect to each such fiscal year. Such fee is in addition to all other fees,
interest and charges payable by Borrower to Lender and such fee will be due
and
payable on the thirtieth (30th) day after the close of each of fiscal year
of
Borrower for which it has Income Before Taxes equal to or greater then Zero
Dollars($0), based on Borrower’s internally prepared financial statements; but
adjusted accordingly, if necessary, upon receipt of Borrower’s preliminary
audited consolidated and consolidating financial statements, which Borrower
agrees to furnish to Lender within ninety (90) days from the close of Borrower’s
fiscal year. Lender may charge such fees to Borrower’s loan account, without
prior notice. In the event Borrower shall change its fiscal year, appropriate
adjustment shall be made in the periods based on which the “success fee” will be
determined.
3.8
Early
Termination Fee.
If for
any reason this Agreement is terminated prior to the end of the then current
term or any renewal term of this Agreement, in view of the impracticality
and
extreme difficulty of ascertaining actual damages and by mutual agreement
of the
parties as to a reasonable calculation of Lender’s lost profits as a result
thereof, Borrower agrees to pay to Lender, on demand an early termination
fee in
the amount set forth below if such termination or failure is effective in
the
period indicated:
|
Amount
|
Period
|
|
|
(a)
5% of the Maximum Credit
|
From
the date hereof to and including March 31, 2006;
|
|
|
(b)
3% of the sublimit on Revolving Loans plus 3% of the then
|
From
April 1, 2006 to and including March
31, 2007; and
|
|
|
outstanding
balance of
the Term Loans
|
||
|
(d)
1% of the sublimit on Revolving Loans plus 1% of the then
|
From
April 1, 2007, to and including March 30, 2008 or if this
|
|
|
outstanding
balance of
the Term Loans
|
Agreement
is extended for an additional period as provided
herein,
|
|
|
to
and including
the end of the then current
term;
|
-30-
provided that;
(a)
Borrower shall pay one half (1/2) the amount of the early termination fee
computed
above if and only if, all Loans are repaid simultaneously from the proceeds
of
the
issue
and sale of by Inyx of shares of its Capital Stock and (b) Borrower may repay
all Loans simultaneously at any time and shall pay the full amount of the
early
termination fee computed above. Such early termination fee shall be presumed
to
be the amount of damages sustained by Lender as a result of such early
termination and Borrower agrees that it is reasonable under the circumstances
currently existing. In addition, Lender shall be entitled to such early
termination fee upon the occurrence of any Event of Default described in
Sections 10.1(g) or 10.1(h) hereof even if Lender does not exercise its right
to
terminate this Agreement; but Lender elects, at its option, to provide financing
to Borrower or permit the use of cash collateral under the Bankruptcy Code.
The
early termination fee provided for in this Section 3.8 shall be deemed included
in the Obligations. Borrower waives any claim for reduction of fees whether
or
not such fees are treated as a penalty.
3.9
Special
Interest Computation.
Interest on the initial Loans will accrue and be calculated as of and from
August 26, 2005, notwithstanding that this Agreement will be signed and such
Loans made available to Borrower at a later date.
Section
4. Conditions
Precedent.
4.1 Conditions
Precedent to Initial Loans and Letter of Credit Accommodations.
Each of
the following is a condition precedent to Lender making the initial Loans,
and
providing the initial Letter of Credit Accommodations hereunder:
(a)
Lender shall have received, in form and substance satisfactory to Lender,
(i)
evidence that Lender has valid, perfected and first priority security interests
in and liens upon the Collateral and any other property which is intended
to be
security for the Obligations, subject only to Permitted Liens, (ii) all
releases, terminations and such other documents as Lender may request to
evidence and effectuate the termination by others who have provided financial
accommodations to any Borrower of their respective financing arrangements
with
each such Borrower and the termination and release by it or them, as the
case
may be, of any interest in and to any assets and properties of Borrower,
duly
authorized, executed and delivered by it or each of them, including, but
not
limited to, (A) UCC termination statements for all UCC financing statements
previously filed by it or any of them or their predecessors, as secured party
and Borrower, as debtor and (B) satisfactions and discharges of any mortgages,
deeds of trust or deeds to secure debt by any Borrower in favor of others
in
form acceptable for recording in the appropriate government office and
(iii)
evidence
that the Purchase Agreements have been duly executed and delivered by and
to the
appropriate parties thereto and the transactions contemplated under the terms
of
the Purchase Agreements have been consummated prior to or contemporaneously
with
the execution of this Agreement.
-31-
(b)
All
requisite corporate and other actions and proceedings in connection with
this
Agreement and the other Financing Agreements shall be satisfactory in form
and
substance to Lender, and Lender shall have received all information and copies
of all documents, including records of requisite corporate and other actions
and
proceedings which Lender may have requested in connection therewith, such
documents where requested by Lender or its counsel to be certified by
appropriate corporate officers or governmental authorities.
(c)
No
material adverse change shall have occurred in the assets, business or prospects
of Borrower since the date of Lender's latest field examination and no change
or
event shall have occurred which would impair the ability of any Borrower
to
perform its obligations hereunder or under any of the other Financing Agreements
to which it is a party or of Lender to enforce the Obligations or realize
upon
the Collateral.
(d)
Lender shall have completed a field review of the Records and such other
information with respect to the Collateral as Lender may require to determine
the amount of Revolving Loans and Term Loans available to Borrower, the results
of which shall be satisfactory to Lender, not more than three (3) business
days
prior to the Closing Date.
(e)
Lender shall have received, in form and substance satisfactory to Lender,
all
consents, waivers, acknowledgments and other agreements from third persons
which
Lender may deem necessary or desirable in order to permit, protect and perfect
its security interests in and liens upon the Collateral or to effectuate
the
provisions or purposes of this Agreement and the other Financing Agreements,
including acknowledgments by counter parties to licensing agreements and
other
Manufacturing Contracts, lessors, mortgagees and warehousemen of Lender's
liens
and security interests in the Collateral, waivers by such persons of any
security interests, liens or other claims by such persons to the Collateral
and
agreements permitting Lender access to, and the right to remain on, the premises
to exercise its rights and remedies and otherwise deal with the
Collateral.
(f)
Lender shall have received, in form and substance satisfactory to Lender,
(i)
such opinion letters of counsel to Borrower and counsel to Lender with respect
to the Purchase Agreements, the Financing Agreements, and the security interests
and liens of Lender in the Collateral as Lender may request and as to such
other
matters as Lender may request.
(g)
The
other Financing Agreements requested or submitted by Lender from or to Borrower
and all instruments and documents hereunder and thereunder shall have been
duly
executed and delivered to Lender, in form and substance satisfactory to
Lender.
(h)
Lender shall have received, in form and substance satisfactory to Lender
(i) all
agreements
with respect to (i) the Blocked Accounts and (ii)all investment property
and all
other deposit accounts of Borrower as Lender may require, duly authorized,
executed and delivered by Borrower and the appropriate depository, financial
or
other applicable institution.
-32-
(i)
Excess Availability and Suppressed Availability, as of the Closing Date,
shall
not be less than $2,000,000 and $500,000 respectively(included within such
Excess Availability), after giving the effect to the Loans to be made to
be
provided in connection with the initial transactions hereunder.
(j)
All
indebtedness owing by (i) any Borrower to any Affiliate, (ii) by any guarantor
of the Obligations to Borrower, (iii) by Borrower to any stockholder, officer
or
director of Borrower whether of not on Affiliate of Borrower, (iv) by a Borrower
to any other Borrower or (v) by any Affiliate of Borrower to Borrower, shall
have been fully subordinated to the Obligations to Lenders
satisfaction.
(k)
Lender shall have received, in form and substance satisfactory to Lender,
(i) a
pro forma and market value balance sheet of each Borrower, reflecting the
initial transactions contemplated hereunder, including, but not limited to,
(A)
the Loans and Letter Of Credit Accommodations to be provided by Lender to
Borrowers, (B) the use of the proceeds of the initial Loans as provided herein
and (C) the consummation of the acquisition of the Purchased Stock by Borrower
from Seller and the other transactions contemplated by the Purchase Agreements
and (ii) a projection and forecast of each Borrower’s cash flow for its current
and three (3) succeeding fiscal years all accompanied by a certificate, dated
as
of the Closing Date, of the chief executive officer and chief financial officer
of each Borrower, stating that such pro-forma balance sheet, market value
balance sheet and projection of cash flow, represents the reasonable, good
faith
opinion of such officers as to the subject matter thereof as of the date
of such
certificate and as to such other matters as Lender may request.
(l)
Lender shall have received evidence of insurance and loss payee endorsements
required hereunder and under the other Financing Agreements, in form and
substance satisfactory to Lender, and certificates of insurance policies
and/or
endorsements naming Lender as loss payee, all of which insurance shall be
in
amounts, for periods, with coverage and otherwise satisfactory to Lender,
in
form and substance, including policies covering business and environmental
risk
with respect to the Collateral.
(m)
Lender shall have received a pledge in form and substance satisfactory to
Lender
of all of the Capital Stock of each Borrower.
(n)
Lender shall have received assignments of all Material Contracts, leases,
rent
proceeds from leases, distribution rights, permits, Licenses, Manufacturing
Contracts, and other Intellectual Property and all consents and agreements
of
counter parties or other third parties with respect thereof, as Lender shall
have required, all in form and substance satisfactory to Lender.
(o)
All
fees, costs and expenses owing to Lender, including the fees and disbursements
of Lender’s counsel shall have been paid, concurrently with the execution
hereof.
(p)
Borrower shall have delivered to Lender, at its expense, an environmental
audit
of the Ashton Real Property conducted by an environmental engineering firm
acceptable to Lender and in form, scope and methodology satisfactory to Lender
confirming that (i) Borrower and Seller is each in compliance with all
Environmental Laws, in all material respects and (ii)there is no material
potential or actual liability of Borrower for any remedial action with respect
to any environmental condition or any other significant environmental
problem.
-33-
(q)
Lender shall have received evidence of payments or certificates, to its
satisfaction that all Federal, Commonwealth, British, municipal and other
taxes
or charges of any Governmental Agency owing or claimed owing by Borrower
(directly or as a transferee of the assets of the Company) have been paid
or
adequate provision for the payment thereof, including payment plans, to Lender’s
satisfaction, has been made.
(r)
Borrower shall be in full compliance with the financial covenants contained
in
Sections 9.14, 9.15, 9.16 and 9.17 hereof.
(s)
Borrower shall have furnished evidence to Lender that all property taxes
on the
Real Estate Security then due have been paid, Borrower shall have executed
and
delivered to Lender all Real Estate Security and Lender shall have received
mortgagee title policies with respect thereto in such amounts and from such
insurers and with such affirmative coverage’s as Lender may request, or in
Lender’s discretion title opinions from Lender’s counsel, all in form and
substance satisfactory to Lender.
(t)
Lender shall have received recent surveys of the Ashton Real Property prepared
by a licensed engineer, satisfactory to Lender, conforming to the descriptions
and showing no encroachments and certified to Lender and Lender shall have
received appraisals for the Ashton Real Property from appraisers acceptable
to
Lender, addressed to Lender, all in form and substance and showing such values
therefor, as shall be acceptable to Lender.
(u)
The
market value balance sheets of Borrowers, the certificate and the projection
referred to in Section 4.1 (k) hereof shall reflect to Lender’s satisfaction
that each Borrower is Solvent.
(v)
Lender shall have received evidence of zoning of the Ashton Real Property
disclosing no violation of applicable regulations, satisfactory to Lender
and
flood zone certificates for the Ashton Real Property, satisfactory to
Lender.
(w)
Lender shall have received, in form and substance satisfactory to Lender,
a
guarantee of payment of the Obligations by each Affiliate of Borrower requested
by Lender, secured
by first and only liens and security interests (except for those permitted
by
Section 9.8(a) hereof) in each such Person’s assets in favor of Lender,
including real property, Equipment, Inventory and Accounts of Inyx, Inyx
USA,
Ltd. and Inyx Pharma, Limited, (x) With respect to the Purchase Agreements
and
the Purchased Stock:
(i)
The
Purchase Agreements shall be satisfactory to Lender, in form and
substance;
(ii)
Lender shall have received, in form and substance satisfactory to Lender,
evidence that the Purchase Agreements, have been duly executed and delivered
by
and to the appropriate parties thereto, constitute the legal, valid and binding
obligations of the parties thereto and the transactions contemplated under
the
terms of the Purchase Agreements shall have closed and have been consummated
prior to or contemporaneously with the making of the initial Loans;
(iii)
Lender shall have received, in form and substance satisfactory to Lender,
the
agreement of the Seller consenting to the collateral assignment by Borrower
to
Lender of all of Borrower's rights and remedies and claims for damages,
indemnification or other relief under the Purchase Agreements and granting
Lender such other rights as Lender may require, duly authorized, executed
and
delivered by Seller;
-34-
(iv)
Lender shall have received in form and substance satisfactory to Lender
such
opinion
letters of counsel to the Seller with respect to the Purchase Agreement and
the
consummation of the transactions contemplated thereby and as to such other
matters as Lender may request;
(v)
Lender shall have received in form and substance satisfactory to Lender evidence
that all payments required to be made by Borrower in connection with the
Purchase Agreements have been, or concurrently with the making of the Initial
Loans will be, made;
(vi)
The
purchase price for the Purchased Stock payable by Borrower to Seller shall
not
exceed $23,500,000;
(vii)
No
court
of competent jurisdiction shall have issued any injunction, restraining order
or
other order which prohibits consummation of the transactions described in
the
Purchase Agreements and no governmental or other action or proceeding shall
have
been threatened or commenced, seeking any injunction, restraining order or
other
order which seeks to void or otherwise modify the transactions described
in the
Purchase Agreements, no law,
regulation, order, judgment or decree of any governmental authority shall
exist
which has or could reasonably be expected to have a Material Adverse Effect
on
the transactions contemplated by the Purchase Agreements and Borrower shall
have
obtained all consents required for the consummation of the transactions
contemplated by the Purchase Agreements, in each case to Lender’s satisfaction;
and
(viii)
Borrower shall have acquired from Seller, pursuant to the Purchase Agreements
good and marketable title to the Purchased Stock to Lender’s satisfaction free
and clear of all liens, claims, charges, encumbrances, security interest
and
rights of third parties, except Permitted Liens.
(y)
Lender shall have received all such subordination agreements, non-disturbance
agreements, assignments of leases, landlord’s consents and other agreements and
consents from landlords, subtenants and mortgagees and as Lender shall
request.
(z)
Lender shall have received estoppel certificates from all of Seller’s landlords,
customers, suppliers and others with whom Borrower will do business or have
contractual arrangements showing that no defaults thereunder exist or that
any
alleged default will not have a Material Adverse Effect.
(aa)
Lender shall have received appraisals for the Real Estate Security and the
CMSL
Equipment from appraisers acceptable to Lender, addressed to Lender, all
in form
and substance and showing such values therefor, as shall be acceptable to
Lender.
(bb)
Lender shall have received evidence satisfactory to Lender that all payments
required to be made by Inyx EU to acquire the Purchased Stock and pay the
purchase price therefore, will be made concurrently with the making of the
Initial Loans.
(cc)
Lender shall have received background reports, satisfactory to Lender in
all
respects, on the principal shareholders and officers of Borrower.
-35-
(dd)
The
payment of not less than $10,000,000 of the purchase price payable to the
Seller
under the Purchase Agreements (i) shall have been deferred by Seller on terms
and conditions acceptable to Lender (ii) shall be evidenced by a note issued
and
delivered by Inyx EU to Seller, in form and substance satisfactory to Lender,
the payment of which note shall be fully subordinated to the payment of the
Obligations to Lender’s satisfaction and which subordination shall be reflected
in such Note to Lender’s satisfaction and (iii) the Seller shall have entered
into such subordination and intercreditor agreements with Lender with respect
thereto and with respect to any security therefor as Lender shall have
requested, all in form and substance satisfactory to Lender.
(ee)
Lender shall have received appraisals for all Licenses from appraisers
acceptable to Lender, addressed to Lender, all in form and substance and
showing
such values therefor, as shall be acceptable to Lender.
(ff)
All
actions shall have been taken to Lenders satisfaction, so that:
(i)
CMSL
may legally and validly guaranty the Obligations of Inyx EU to
Lender,
(ii)
Inyx
EU may legally, and validly guaranty the Obligations of CMSL to Lender, and
(iii)
Borrowers may legally and validly guaranty the obligations and liabilities
of
Inyx, Inyx USA and Inyx Pharma to Lender,
(iv)
Inyx
Pharma may legally and validly guaranty the Obligations of Borrowers to Lender,
and
(v)
Inyx
EU and CMSL may both legally and validly be and undertake the liabilities
of
Borrowers under this Agreement,
including
such declarations, opinions of independent auditors and other matters necessary
to effect a “whitewash” as required and all such Persons shall have executed and
delivered such guarantees to Lender all in form and substance satisfactory
to
Lender.
(gg)
Inyx
EU and CMSL shall have entered into a loan agreement, in form and substance
satisfactory to Lender providing for the making and funding of loans by CMSL
to
Inyx EU in amounts and at times sufficient to enable Inyx EU to pay the
Obligations to Lender, which agreement shall been assigned to Lender, to
its
satisfaction.
Notwithstanding
that all conditions specified in this Section 4.1 have not been complied
with or
fulfilled by the Closing Date, Lender may permit Borrower periods of up to
thirty (30) days from the Closing Date to comply with and satisfy one or
more of
the conditions specified in this Section 4.1 hereof which have not been complied
with and satisfied as of the Closing Date and may defer funding of, fund
partially or not fund at all, any or all of the initial and future Loans
as
Lender shall determine, unless and until such conditions have been satisfied,
all in Lender’s discretion. Lender shall have no liability to Borrower
whatsoever for not funding any or all of the Loans if any such condition
is not
satisfied within such thirty (30) day period.
4.2
Conditions
Precedent to All Loans And Letter of Credit Accommodations.
Each of
the following is an additional condition precedent to Lender making Loans
to
Borrower, including the initial and any future Loans:
-36-
(a)
all
representations and warranties contained herein and in the other Financing
Agreements shall be true and correct in all material respects with the same
effect as though such representations and warranties had been made on and
as of
the date of the making of each such Loan and after giving effect
thereto;
(b)
no
Event of Default and no event or condition which, with notice or passage
of time
or both, would constitute an Event of Default, shall exist or have occurred
and
be continuing on and as of the date of the making of such Loan, and after
giving
effect thereto;
(c)
No
law, regulation, order, judgment or decree of any governmental authority
shall
exist, and no action, suit, investigation, litigation or proceeding shall
be
pending or threatened in any court or before any arbitrator or Governmental
Authority, which (i) purports to enjoin, prohibit, restrain or otherwise
affect
(A) the making of the Loans or (B) the consummation of the transactions
contemplated pursuant to the terms hereof or the other Financing Agreements
or
(ii) has or could reasonably be expected to have a Material Adverse Effect;
and
(d)
Lender shall have received such certificates, from such persons and in such
detail, as to the forgoing matters and as to such other matters covered by
this
Agreement, as it may have requested.
4.3
Additional Conditions Precedent to Term Loans.
Each of
the following is an additional condition precedent to Lender making
disbursements of any portion of any Term Loan to Borrower of amounts thereof
not
disbursed at closing as part of the initial Loans:
(a)
Any
condition precedent specified in Section 4.1 hereof or elsewhere herein to
the
making of the initial Loans not satisfied at the time of making of the initial
Loans the satisfaction of which had been deferred by Lender shall have been
fulfilled to Lender’s satisfaction;
(b)
All
such conditions shall have been satisfied within the time prescribed, to
Lenders
satisfaction;
(c)
No
material adverse change shall have occurred in the assets, business or prospects
of Borrower since the Closing Date and no change or event shall have occurred
which would impair the ability of Borrower or any Obligor to perform its
obligations hereunder or under any of the other Financing Agreements to which
it
is a party or of Lender to enforce the Obligations or realize upon the
Collateral;
(d)
Lender shall have approved the purpose for which the proceeds of such Term
Loan
are to be used; and
(e)
All
conditions specified in Section 4.2 hereof must continue to be satisfied
at and
as of the date of each disbursement.
4.4
United
Kingdom Specific Conditions Precedent.
The
receipt by the Lender of a certified copy of each of the following, in form
and
substance satisfactory to Lender are each additional conditions precedent
to
Lender making the initial Loans, and providing the initial Letter of Credit
Accommodations hereunder:
-37-
| (a) |
the
certificate of incorporation (and any relative certificate of
incorporation on change of name) of each of Inyx EU and
CMSL;
|
| (b) |
the
memorandum and articles of association of each of Inyx EU and
CMSL;
|
| (c) |
the
minutes of a meeting of the board of directors of Inyx EU and CMSL
(including the resolutions passed at those
meetings):
|
|
(i)
approving and authorizing the execution, delivery and performance
of each
Financing Agreement to which it is to be a party on the terms and
conditions of those documents subject always, where appropriate,
to the
provisions of sections 151 to 158 (inclusive) of the
Act;
|
|
(ii)
showing that the relevant board meeting was quorate, that due
consideration was given by all the relevant directors present of
the
relevant company's obligations and liabilities arising under those
documents and that all declarations of interests required in connection
with any Financing Agreement to which it is to be a party were
made;
and
|
|
(iii)
authorizing any director whose name and specimen signature is set
out in
those minutes to sign or otherwise attest the execution of those
documents
and any other documents to be executed or delivered pursuant to
those
documents;
|
| (d) |
a
certificate of the Borrowers confirming that borrowing or guaranteeing
of
the Loans would not cause any borrowing, guaranteeing or similar
limit
binding to be exceeded;
|
| (e) |
a
special resolution of the members of CMSL;
|
| (f) |
the
statutory declarations made for the purpose of section 155
of the Act
in the prescribed form by all of the directors of CMSL together
with a
Certified Copy of each statutory report by each of those companies'
auditors required under section 156(4) of the Act;
|
| (g) |
the
register of directors of CMSL (including the resignation letters
of the
existing directors of CMSL and forms 288b) and Inyx EU, board
memorandum
given by the directors of CMSL, members register for Inyx EU
showing Inyx,
Inc as parent and updated members register for CMSL showing Inyx
EU as
parent;
|
| (h) |
a
letter addressed to the Lender from the auditors of Inyx EU and
CMSL
confirming that the aggregate of their respective assets as stated
in
their respective accounting records exceeds the aggregate of
their
liabilities as so stated (net assets
letter);
|
-38-
| (i) |
evidence
that all security interests, mortgages, pledges, charges or any
other
encumbrance over the assets and undertakings of the Borrowers
have been
released and discharged and that there are no security interests,
mortgages, pledges, charges or any other encumbrance over the
assets
(other than Permitted Liens) and in particular evidence that
the overdraft
facility and company composite guarantee that supports this overdraft
facility provided to CSML and other members of the CSML's group
by Royal
Bank of Scotland plc has been
discharged;
|
| (j) |
share
certificates in relation to the entire issued share capital of
CMSL and
Inyx EU together with duly executed blank stock transfer forms;
|
| (k) |
The
following documents, instruments, agreements and
reports:
|
|
(i)
Security Agreement given by Inyx
EU;
|
|
(ii)Security
Agreement given by CMSL;
|
(iii)
Mortgage of Shares given by Inyx, Inc in respect of its shares in Inyx
EU;
(iv)
Mortgage of Shares given by Inyx, Inc in respect of its shares in Inyx
Pharma;
(v)
Receipts Accounts letter from each of Inyx EU and CMSL to the
Lender;
(vi)
Supplemental Security Agreement given by Inyx Pharma;
(vii)
Real Estate Report on title in a form satisfactory to the Lender;
(viii)All
deeds, documents and ancillary papers (or an undertaking to procure the same)
relating to the Real Property including official copies of Land Registry
entries, counterpart leases , licences and other deeds or documents necessary
or
desirable to assist the Lender to enforce its Security;
(ix)
The
results of Land Registry searches in favour of the Lender on the appropriate
forms against all of the registered titles comprising the real property giving
not less than 10 Business Days' priority beyond the date of the security
agreement and showing no adverse entries;
(x)
An
effective discharge of all mortgages, charges and liens affecting the real
property including completed forms and fees for all resultant registration
formalities;
(xi)
Such
land registry application forms as the Lender may require (in a form approved
by
the Lender) and an undertaking from the Borrower's solicitors to use reasonable
endeavours forthwith to submit to the Land Registry within the priority period,
(and if necessary to take all steps necessary to extend the priority period
conferred y the Land Registry in favour of the Lender), the application to
register the Debenture as a first ranking charge and to deal promptly and
satisfy any requisitions raised by the Land Registry in connection with the
application and to pay all necessary Land Registry fees in connection with
the
application; and
(xii)
Legal opinion of ▇▇▇▇▇ & ▇▇▇▇▇;
-39-
|
(l)
|
notice
to the Seller and any third party of the assignment of Inyx
EU's and
Inyx's rights and interests in and to the Purchase Agreement,
Relevant
Contracts and bank accounts in a form and content satisfactory
to the
Lender forthwith upon the Lender's request together with an
acknowledgment
duly executed by the
Seller;
|
| (m) |
a
Certified Copy of the Disclosure
Letter;
|
| (n) |
all
items comprising the Information
Package;
|
| (o) |
certified
copies of all Relevant
Contracts;
|
| (p) |
all
searches, registrations, recordings and filings of or with respect
to the
Financing Agreements which in the opinion of counsel to the Lender
are
necessary to render effective the security intended to be created
thereby;
and
|
|
(q)
|
all
other documents deliverable under the Financing Agreements
to be governed
by English law;
|
| (s) |
a
certificate from a director of Inyx EU certifying that as at
Completion:
|
(i) each
of
the conditions precedent to the consummation of the transactions contemplated
by
the Purchase Agreement has been satisfied or, with the consent of the Lender,
waived;
(ii) other
than with the consent of the Lender, none of Inyx EU's rights under the Purchase
Agreement has been waived or varied;
(iii) Inyx
EU
is not aware of any breach of warranty under the Purchase Agreement;
and
(iv) Inyx
EU
will be the beneficial owner of the all the issued share capital in
CMSL.
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For
purposes of this Section 4.4 “Completion” means
the
completion of the acquisition of the stock of CMSL pursuant to the Purchase
Agreement.
Section
5. Grant
of Security Interest.
5.1
Grant
of Security Interest.
To
secure payment and performance of all Obligations, each Borrower hereby grants
to Lender a continuing security interest in, a lien upon, and a right of
set off
against, and hereby assigns to Lender as security, the following property
and
interests in property of such Borrower, whether now owned or hereafter acquired
or existing, and wherever located (together with all other collateral security
for the Obligations at any time granted to or held or acquired by Lender
collectively (the “Collateral”).
(a)
all
Accounts;
(b)
all
present and future general intangibles, including all Intellectual
Property;
(c)
all
Inventory;
(d)
all
Equipment;
(e)
all
Real Property and fixtures and all Real Estate Security;
(f)
all
chattel paper, including all tangible and electronic chattel paper;
(g)
all
instruments, including all promissory notes;
|
|
(h)
all documents;
|
(i)
all
deposit accounts;
(j)
all
letters of credit, banker’s acceptances and similar instruments and including
all letter of credit rights;
(k)
all
supporting obligations and all present and future liens, security interests,
rights, remedies, title and interest in, to and in respect of Receivables
and
other Collateral, including (i) rights and remedies under or relating to
guaranties, contracts of surety ship, letters of credit and credit and other
insurance related to the Collateral, (ii) rights of stoppage in transit,
replevin, repossession, reclamation and other rights and remedies of an unpaid
vendor, lienor or secured party, (iii) goods described in invoices, documents,
contracts or instruments with respect to, or otherwise representing or
evidencing, Receivables or other collateral, including returned, repossessed
and
reclaimed goods, and (iv) deposits by and property of account debtors or
other
persons securing the obligations of account debtors;
(l)
all
(i) investment property (including securities, whether certificated or
uncertificated, securities accounts, security entitlements, commodity contracts
or commodity accounts) and (ii) monies, credit balances, deposits and other
property of Borrower, now or hereafter held or received by or in transit
to
Lender or at any other depository or other institution from or for the account
of Borrower whether for safekeeping, pledge, custody, transmission, collection
or otherwise;
(m)
all
commercial tort claims, including, without limitation, those identified in
the
Information Certificate;
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(n)
to
the extent not otherwise described above, all Receivables and all
goods;
(o)
all
Records;
(p)
the
leases of all premises leased by Borrower(including an assignment
thereof);
(q)
all
motor vehicles;
(r)
all
shares of Capital Stock of each Subsidiary of a Borrower and the certificates
representing such shares;
(s)
all
Manufacturing Contracts and assignment of proceeds of all Manufacturing
Contracts;
(t)
all
Licenses; and
(u)
all
products and proceeds of the foregoing in any form, including insurance proceeds
and all claims against third parties for loss or damage to or destruction
of or
other involuntary conversion of any kind or nature of any or all of the other
collateral and any indemnities, warranties and guaranties payable by reason
of
loss or damage to or otherwise with respect to any of the foregoing
items.
5.2
Perfection
of Security Interest.
Each
Borrower irrevocably and unconditionally authorize Lender (or its agent)
to file
at any time and from time to time such financing statements and other
instruments and documents with respect to the Collateral naming Lender or
its
designee as the secured party and Borrower as debtor, as Lender may require,
and
including any other information with respect to a Borrower or otherwise required
by (a) Article 9 of the Uniform Commercial Code of such jurisdiction as Lender
may determine and (b) other applicable laws of such jurisdictions as Lender
may
determine, together with any amendments and continuations with respect thereto,
which authorization shall apply to all financing statements and other
instruments and documents filed on, prior to or after the date hereof. Each
Borrower hereby ratifies and approves all financing statements and other
instruments and documents naming Lender or its designee as secured party
and
Borrower as debtor with respect to the Collateral (and any amendments with
respect to such financing statements and other instruments and documents)
filed
by or on behalf of Lender prior to the date hereof and ratify and confirm
the
authorization of Lender to file such financing statements and other instruments
and documents (and amendments, if any). Each Borrower hereby authorizes Lender
to adopt on behalf of Borrower any symbol required for authenticating any
electronic filing. In the event that the description of the Collateral in
any
financing statement and other instruments and documents naming Lender or
its
designee as the secured party and Borrower as debtor includes assets and
properties of Borrower that do not at any time constitute Collateral, whether
hereunder, under any of the other Financing Agreements, or otherwise, the
filing
of such financing statement and other instruments and documents shall
nonetheless be deemed authorized by Borrower to the extent of the Collateral
included in such description and it shall not render the financing statements
and other instruments and documents ineffective as to any of the Collateral
or
otherwise affect the financing statement as it applies to any of the Collateral.
In no event shall Borrower at any time file, or permit or cause to be filed,
any
correction statement or termination statement with respect to any financing
statement and other instruments and documents (or amendment or continuation
with
respect thereto) naming Lender or its designee as secured party and any Borrower
as debtor.
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Section
6. Collection
And Administration
6.1 Borrower’s
Loan Account.
Lender
shall maintain one or more loan account(s) on its books in which shall be
recorded (a) all Loans, Letter of Credit Accommodations and other Obligations
and the Collateral, (b) all payments made by or on behalf of each Borrower
and
(c) all other appropriate debits and credits as provided in this Agreement,
including fees, charges, costs, expenses and interest. All entries in the
loan
account(s) shall be made in accordance with Lender's customary practices
as in
effect from time to time.
6.2 Statements.
Within
ten (10) Business Days after the first day of the month, Lender shall render
to
Borrower each month a statement setting forth the balance in the Borrower’s loan
account(s) maintained by Lender for Borrower pursuant to the provisions of
this
Agreement, including principal, interest, fees, costs and expenses. Each
such
statement shall be subject to subsequent adjustment by Lender but shall,
absent
manifest errors or omissions, be considered correct and deemed accepted by
Borrower and conclusively binding upon Borrower as an account stated except
to
the extent that Lender receives a written notice from Borrower of any specific
exceptions of Borrower thereto within thirty (30) days after the date such
statement has been mailed by Lender. Until such time as Lender shall have
rendered to Borrower a written statement as provided above, the balance in
Borrower’s loan account(s) shall be presumptive evidence of the amounts due and
owing to Lender by Borrower.
6.3 Collection
of Accounts.
(a) At
Lender’s request, Borrowers shall establish and maintain, at their expense,
blocked accounts or lock boxes and related blocked accounts (in either case,
"Blocked Accounts"), as Lender may specify, with such banks as are acceptable
to
Lender. Each Borrower shall promptly deposit and direct their respective
account
debtors, to directly remit all payments on Receivables, including Accounts
and
all payments constituting proceeds of Inventory, Equipment or other Collateral
in the identical form in which such payments are made, whether by cash, check
or
other manner into such accounts as Lender may specify, which may be a Blocked
Account or an account(s) of Lender (“Lender Accounts”). The banks at which the
Blocked Accounts are established shall enter into an agreement, in form and
substance satisfactory to Lender, providing that all items received or deposited
in the Blocked Accounts are the property of Lender, that the depository bank
has
no lien upon, or right to setoff against, the Blocked Account(s) or Lender
Account, the items received for deposit therein, or the funds from time to
time
on deposit therein and that the depository bank will wire, or otherwise
transfer, in immediately available funds and in the Reference Currency on
a not
less than weekly basis all funds received or deposited into the Blocked Accounts
to (i) such bank accounts of Lender as Lender may from time to time designate
for such purpose in Lender’s discretion(“Payment Account[s]”) and (ii) in
Lenders discretion, such bank accounts as Lender may from time to time designate
for such purpose(which may or may not be an account of Lender) ("Intermediate
Account)"). Lender will wire, or otherwise transfer, in immediately available
funds and in the Reference Currency on a not less than weekly basis all funds
received or deposited into the Lender Accounts to such bank accounts of Lender
as Lender may from time to time designate for such purpose in Lender’s
discretion(“Payment Account[s]”). The bank at which an Intermediate Account is
established shall enter into an agreement, in form and substance satisfactory
to
Lender, providing that all items received or deposited in the Intermediate
Account are the property of Lender and that the depository bank will wire,
or
otherwise transfer, in immediately available funds and in the Reference
Currency, on a daily basis, all funds received or deposited into the
Intermediate Account to such bank accounts of Lender as Lender may from time
to
time designate for such purpose (“Payment Account”). Borrowers agree that all
payments made to such Blocked Accounts or Lender Accounts or other funds
received and collected by Lender, whether on the Accounts or as proceeds
of
Inventory, Equipment or other Collateral or otherwise shall be the property
of
Lender.
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(b) For
purposes of calculating the amount of the Loans available to Borrowers, such
payments will be applied (conditional upon final collection) to the Obligations
on the Business Day of receipt by Lender of immediately available funds in
the
Reference Currency in the applicable Payment Account, provided such payments
and
notice thereof are received in accordance with Lender's usual and customary
practices as in effect from time to time and within sufficient time to credit
Borrowers’ loan account on such day, and if not, then on the next Business Day.
For the purposes of calculating interest on the Obligations, payments or
other
funds received will be applied (conditional upon final collection) to the
Obligations one(1) Business Day(s) following the date of receipt of immediately
available funds by Lender in the applicable Payment Account provided such
payments or other funds and notice thereof are received in accordance with
Lender's usual and customary practices as in effect from time to time and
within
sufficient time to credit Borrowers’ loan account on such day, and if not, then
on the next Business Day.
(c) Each
Borrower and all of their respective Subsidiaries and other Affiliates,
shareholders, directors, employees or agents shall, acting as trustee for
Lender, receive, as the property of Lender, any monies, checks, notes, drafts
or
any other payment relating to and/or proceeds of Accounts or other Collateral
which come into their possession or under their control and immediately upon
receipt thereof, shall deposit or cause the same to be deposited in the Blocked
Accounts or Lender Accounts, as has been specified by Lender, or remit the
same
or cause the same to be remitted, in kind, to Lender. In no event shall the
same
be commingled with a Borrower’s own funds. Borrowers agree to reimburse Lender
on demand for any amounts owed or paid to any bank at which a Blocked Account
or
Lender Account is established or any other bank or person involved in the
transfer of funds to or from the Blocked Accounts or Lender Accounts arising
out
of Lender's payments to or indemnification of such bank or person. The
obligation of Borrower to reimburse Lender for such amounts pursuant to this
Section 6.3 shall survive the termination or non-renewal of this
Agreement.
6.4 Payments.
All
Obligations shall be payable to the Payment Account as provided in Section
6.3
or such other place as Lender may designate from time to time. Lender may
apply
payments received or collected from each Borrower or for the account of each
Borrower (including the monetary proceeds of collections or of realization
upon
any Collateral) to such of the Obligations, whether or not then due, in such
order and manner as Lender determines. At Lender's option, all principal,
interest, fees, costs, expenses and other charges provided for in this Agreement
or the other Financing Agreements may be charged directly to the loan account(s)
of each Borrower. Borrowers shall make all payments to Lender on the Obligations
free and clear of, and without deduction or withholding for or on account
of,
any setoff, counterclaim, defense, duties, taxes, levies, imposts, fees,
deductions, withholding, restrictions or conditions of any kind. If after
receipt of any payment of, or proceeds of Collateral applied to the payment
of,
any of the Obligations, Lender is required to surrender or return such payment
or proceeds to any Person for any reason, then the Obligations intended to
be
satisfied by such payment or proceeds shall be reinstated and continue and
this
Agreement shall continue in full force and effect as if such payment or proceeds
had not been received by Lender. Borrower shall be liable to pay to Lender,
and
do hereby indemnify and hold Lender harmless for the amount of any payments
or
proceeds surrendered or returned. This Section 6.4 shall remain effective
notwithstanding any contrary action which may be taken by Lender in reliance
upon such payment or proceeds. This Section 6.4 shall survive the payment
of the
Obligations and the termination or non-renewal of this Agreement.
Without
limiting the forgoing all payments made by any Borrower un-der this Agreement,
and the other Financing Agreements shall be made without reduction for or
on
account of, any pre-sent or future income or other taxes, levies, imposts,
duties, charges, fees, deductions, withholdings, now or here-after imposed,
levied, collected, withheld or assessed by any country (or by any political
subdivision or taxing authority thereof or therein, including England) other
than taxes of the Commonwealth of Puerto Rico measured by or based upon the
overall net income of the Lender (such taxes being called "Taxes"). If any
Taxes
are required to be withheld from any amounts payable to the Lender hereunder
or
any other Financing Agreement, the amounts so payable to the Lender shall
be
increased to the extent necessary to yield to the Lender (after payment of
all
Taxes) interest or any such other amounts payable hereunder at the rates
or in
the amounts specified in this Agreement or such other Financing Agreement.
It is
understood and agreed that the Borrowers shall be obligated to so "gross-up"
with respect to payments to the Lender under or in connection with the Loans
and
Letter of Credit Accommodations even though a Borrower claims an exemption
from
the
payment or withholding of Taxes imposed under the laws of England or any
governmental agency or body thereof with respect to such payments to the
Lender.
Whenever any Tax is payable by a Borrower, as promptly as possible thereafter,
such Borrower shall send to the Lend-er, a certified copy of an original
official receipt showing payment thereof. If a Borrower fails to pay any
Taxes
when due to the appropriate taxing authority or fails to remit to the Lender
the
required re-ceipts or other required documentary evidence, Borrowers shall
indemnify the Lender for any incremental taxes, interest or penalties that
may
become payable by the Lender as a result of any such failure. If
any
Taxes are required to be withheld from any amounts payable to the Lender
hereunder or any other Financing Agreement,
Lender
may, but shall not be required to, on behalf of Borrowers, increase
the amounts payable to the Lender to the extent necessary to yield to Lender
(after payment of all Taxes) interest or any such other amounts payable
hereunder at the rates or in the amounts specified in this Agreement or other
Financing Agreement and Lender may, on behalf of the Borrowers, so "gross-up"
payments to the Lender under or in connection with the Loans and Letter of
Credit Accommodations.
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6.5 Authorization
to Make Loans.
Lender
is authorized to make the Loans and provide Letter of Credit Accommodations
based upon telephonic or other instructions received from anyone purporting
to
be an officer of a Borrower or other authorized person or, at the discretion
of
Lender, if such Loans are necessary to satisfy any Obligations. All requests
for
Loans and Letter of Credit Accommodations, hereunder shall specify the date
on
which the requested advance is to be made or established (which day shall
be a
Business Day) and the amount of the requested Loan and Letter of Credit
Accommodation. Requests received before 11:00 a.m. Atlantic Standard Time
on a
Business Day shall be processed on that day. Requests received after 11:00
a.m.
Atlantic Standard time on any day shall be deemed to have been made as of
the
opening of business on the immediately following business day. All Loans
and
Letter of Credit Accommodations under this Agreement shall be conclusively
presumed to have been made to, and at the request of and for the benefit
of,
Borrower when deposited to the credit of a Borrower or otherwise disbursed
or
established in accordance with the instructions of Borrowers’ Agent or in
accordance with the terms and conditions of this Agreement.
6.6 Use
of
Proceeds.
Borrowers shall use the initial proceeds of the Loans provided by Lender
to
Borrowers hereunder only for (a) payments (i) by Borrowers to each of the
persons listed in the disbursement direction letter furnished by Borrowers
to
Lender on or about the date hereof, and (ii) by Inyx EU to the Seller in
respect
of the purchase price for the Purchased Stock under the Purchase Agreements,
(b)
working capital and (c) costs, expenses and fees in connection with the
preparation, negotiation, execution and delivery of this Agreement and the
other
Financing Agreements, all in the amounts shown on Schedule 6.6 hereto. All
other
Loans and Letter of Credit Accommodations made by Lender to Borrowers pursuant
to the provisions hereof shall be used by Borrowers only for general operating,
working capital and other proper corporate purposes of Borrowers not otherwise
prohibited by the terms hereof. None of the proceeds will be used, directly
or
indirectly, for the purpose of purchasing or carrying any margin security
or for
the purposes of reducing or retiring any indebtedness which was originally
incurred to purchase or carry any margin security or for any other purpose
which
might cause any of the Loans to be considered a "purpose credit" within the
meaning of Regulation U of the Board of Governors of the Federal Reserve
System,
as amended. Lender may, on behalf of and for the account of Borrower, pay
directly to the Seller and to the other Persons specified in the disbursement
direction letter, the respective amounts payable to them, pursuant to such
letter and this Section 6.6.
6.7
Reference
Currency.
(a) All
Loans shall be made and disbursed and all Obligations shall be payable and
paid,
in the Reference Currency.
(b)
All
Revolving Loans otherwise available to Borrower pursuant to the lending formulas
and subject to the Maximum Credit and other applicable limits hereunder shall
be
subject to Lender's continuing right to establish and revise Currency Reserves.
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(c)
All
risks of currency devaluation, other fluctuations in exchange rates or the
imposition of any exchange controls will be borne by Borrower and Borrower
shall
be liable to pay to Lender, and does hereby indemnify and hold Lender harmless
for any loss or damage resulting from any devaluation of currency (including
the
amount thereof), any other fluctuations in exchange rates and/or the imposition
of any exchange controls affecting the Loans disbursed or the repayments
thereof, as provided herein.
(d)
Deposits to any Blocked Account or Lender Account in currency other than
the
Reference Currency shall be converted to the Reference Currency, by purchase
of
the Reference Currency at Borrowers’ cost and expense and at the rate of
exchange, then utilized by the bank effecting such conversion.
Section
7. Collateral
Reporting And Covenants.
7.1 Collateral
Reporting.
Borrowers shall provide Lender with the following documents in a form
satisfactory to Lender: (a) on a regular basis as required by Lender, a schedule
of Accounts, sales made, credits issued and cash received; (b) on a monthly
basis or more frequently as Lender may request, (i) perpetual inventory reports
or other inventory reports acceptable to Lender, (ii) inventory reports by
category, (iii) aging of accounts payable, (iv) a report of any Inventory
shrinkage or Equipment which has been stolen, and (v) a report of any Equipment
which has been sold, exchanged or otherwise transferred or disposed of, (c)
upon
Lender's request, (i) copies of customer statements and credit memos, remittance
advices and reports, and copies of deposit slips and bank statements, (ii)
copies of shipping and delivery documents, and (iii) copies of purchase orders,
invoices and delivery documents for Inventory and Equipment acquired by
Borrower; (d) aging of accounts receivable on a weekly basis or more frequently
as Lender may request; and (e) such other reports as to the Collateral as
Lender
shall request from time to time. If any of Borrower's records or reports
of the
Collateral are prepared or maintained by an accounting service, contractor,
shipper or other agent, Borrower hereby irrevocably authorize such service,
contractor, shipper or agent to deliver such records, reports, and related
documents to Lender and to follow Lender's instructions with respect to further
services at any time that an Event of Default exists or has occurred and
is
continuing.
7.2 Accounts
Covenants.
(a)
Borrowers shall notify Lender promptly of: (i) any material delay in a
Borrower’s performance of any of its obligations to any account debtor or the
assertion of any claims, offsets, defenses or counterclaims by any account
debtor, or any disputes with account debtors, or any settlement, adjustment
or
compromise thereof, (ii) all material adverse information relating to the
financial condition of any account debtor and (iii) any event or circumstance
which, to Borrower’s knowledge would cause Lender to consider any then existing
Accounts as no longer constituting Eligible Accounts. No credit, discount,
allowance or extension or agreement for any of the foregoing shall be granted
to
any account debtor without Lender's consent, except in the ordinary course
of
Borrower’s business in accordance with practices and policies previously
disclosed in writing to Lender. So long as no Event of Default exists or
has
occurred and is continuing, Borrower shall have the right to settle, adjust
or
compromise any claim, offset, counterclaim or dispute with any account debtor.
At any time that an Event of Default exists or has occurred and is continuing,
Lender shall, at its option, have the exclusive right to settle, adjust or
compromise any claim, offset, counterclaim or dispute with account debtors
or
grant any credits, discounts or allowances.
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(b)
Without limiting the obligation of Borrowers to deliver any other information
to
Lender, Borrower shall promptly report to Lender any return of Inventory
by any
one account debtor if the inventory so returned in such case has a value
in
excess of $10,000. At any time that Inventory is returned, reclaimed or
repossessed, the Account (or portion thereof) which arose from the sale of
such
returned, reclaimed or repossessed Inventory shall not be deemed an Eligible
Account. In the event any account debtor returns Inventory when an Event
of
Default exists or has occurred and is continuing, Borrower shall, upon Lender's
request, (i) hold the returned Inventory in trust for Lender, (ii) segregate
all
returned Inventory from all of its other property, (iii) dispose of the returned
Inventory solely according to Lender's instructions, and (iv) not issue any
credits, discounts or allowances with respect thereto without Lender's prior
written consent.
(c)
With
respect to each Account: (i) the amounts shown on any invoice delivered to
Lender or schedule thereof delivered to Lender shall be true and complete,
(ii)
no payments shall be made thereon except payments immediately delivered to
Lender pursuant to the terms of this Agreement, (iii) no credit, discount,
allowance or extension or agreement for any of the foregoing shall be granted
to
any account debtor except as reported to Lender in accordance with this
Agreement and except for credits, discounts, allowances or extensions made
or
given in the ordinary course of a Borrower’s business in accordance with
practices and policies previously disclosed to Lender, (iv) there shall be
no
setoffs, deductions, contras, defenses, counterclaims or disputes existing
or
asserted with respect thereto except as reported to Lender in accordance
with
the terms of this Agreement and (v) none of the transactions giving rise
thereto
will violate any applicable Commonwealth, State or Federal laws or regulations,
all documentation relating thereto will be legally sufficient under such
laws
and regulations and all such documentation will be legally enforceable in
accordance with its terms.
(d)
Lender shall have the right at any time or times, in Lender's name or in
the
name of a nominee of Lender, to verify the validity, amount or any other
matter
relating to any Account or other Collateral, by mail, telephone, facsimile
transmission or otherwise.
(e)
Borrowers shall deliver or cause to be delivered to Lender, with appropriate
endorsement and assignment, with full recourse to Borrowers, all chattel
paper
and instruments which a Borrower now owns or may at any time acquire immediately
upon a Borrower’s receipt thereof, except as Lender may otherwise
agree.
(f)
Lender may, at any time or times that an Event of Default exists or has occurred
and is continuing, (i) notify any or all account debtors or other obligors
in
respect thereof that the Receivables, including the Accounts have been assigned
to Lender and that Lender has a security interest therein and Lender may
direct
any or all accounts debtors and other obligors to make payment of thereof
directly to Lender, (ii) extend the time of payment of, compromise, settle
or
adjust for cash, credit, return of merchandise or otherwise, and upon any
terms
or conditions, any and all Receivables including the Accounts or other
obligations included in the Collateral and thereby discharge or release the
account debtor or any other party or parties in any way liable for payment
thereof without affecting any of the Obligations, (iii) demand, collect or
enforce payment of any Receivables, including the Accounts or such other
obligations, but without any duty to do so, and Lender shall not be liable
for
its failure to collect or enforce the payment thereof nor for the negligence
of
its agents or attorneys with respect thereto and (iv) take whatever other
action
Lender may deem necessary or desirable for the protection of its interests.
At
any time that an Event of Default exists or has occurred and is continuing,
at
Lender's request, all invoices and statements sent to any account debtor
shall
state that the Accounts and such other obligations have been assigned to
Lender
and are payable directly and only to Lender and Borrowers shall deliver to
Lender such originals of documents evidencing the sale and delivery or lease
of
goods or the performance of services giving rise to any Accounts as Lender
may
require.
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7.3
Inventory
Covenants.
With
respect to the Inventory: (a) Borrowers shall at all times maintain inventory
records reasonably satisfactory to Lender, keeping correct and accurate records
itemizing and describing the kind, type, quality and quantity of Inventory,
each
Borrower's cost therefor and daily or weekly withdrawals therefrom and additions
thereto; (b) Borrowers shall conduct (i) a physical count of the Inventory
at
least once each year, but at any time or times as Lender may request on or
after
an Event of Default, and (ii) test counts of inventory at any time or times
as
Lender may request utilizing a third party service therefore designated by
Lender, and promptly following such physical inventory and test counts of
inventory shall supply Lender with a report in the form and with such
specificity as may be reasonably satisfactory to Lender concerning such physical
count and test counts; (c) Borrowers shall not remove any Inventory from
the
locations set forth or permitted herein, without the prior written consent
of
Lender, except for sales of Inventory in the ordinary course of a Borrower’s
business and except to move Inventory directly from one location set forth
or
permitted herein to another such location; (d) upon Lender's request, Borrowers
shall, at there expense, no more than four times in any twelve (12) month
period, but at any time or times as Lender may request on or after an Event
of
Default, deliver or cause to be delivered to Lender written reports or
appraisals as to the Inventory in form, scope and methodology acceptable
to
Lender and by an appraiser acceptable to Lender, addressed to Lender or upon
which Lender is expressly permitted to rely; (e) Borrowers shall produce,
use,
store and maintain the Inventory with all reasonable care and caution and
in
accordance with applicable standards of any insurance and in conformity with
applicable laws (including the requirements of the Federal Fair Labor Standards
Act of 1938, as amended and all rules, regulations and orders related thereto);
(f) Borrowers shall assume all responsibility and liability arising from
or
relating to the production, use, sale or other disposition of the Inventory;
(g)
Borrowers shall not sell Inventory to any customer on approval, or any other
basis which entitles the customer to return or may obligate a Borrower to
repurchase such Inventory; (h) Borrowers shall keep the Inventory in good
and
marketable condition, and (i) Borrower shall not, without prior written notice
to Lender, acquire or accept any Inventory on consignment or approval.
7.4
Equipment
Covenants.
With
respect to the Equipment: (a) upon Lender's request, Borrowers shall, at
their
expense, at any time or times as Lender may request on or after an Event
of
Default, deliver or cause to be delivered to Lender written reports or
appraisals as to the Equipment in form, scope and methodology acceptable
to
Lender and by an appraiser acceptable to Lender; (b) Borrowers shall keep
the
Equipment in good order, repair, running and marketable condition (ordinary
wear
and tear excepted); (c) Borrowers shall use the Equipment with all reasonable
care and caution and in accordance with applicable standards of any insurance
and in conformity with all applicable laws; (d) the Equipment is and shall
be
used in Borrowers’ business and not for personal, family, household or farming
use; (e) Borrowers shall not remove any Equipment from the locations set
forth
or permitted herein, except to the extent necessary to have any Equipment
repaired or maintained in the ordinary course of the business of a Borrower
or
to move Equipment directly from one location set forth or permitted herein
to
another such location and except for the movement of motor vehicles used
by or
for the benefit of a Borrower in the ordinary course of business; (f) the
Equipment is now and shall remain personal property and Borrowers shall not
permit any of the Equipment to be or become a part of or permanently affixed
to
real property; and (g) Borrowers assume all responsibility and liability
arising
from the use of the Equipment. Borrowers shall deliver to Lender within five(5)
Business Days of the close of each month a schedule of all Equipment at the
Ashton Real Property used by any Borrower that has been furnished by a third
party for use by such Borrower in connection with a Manufacturing Contract
or
License and is not owned by such Borrower, in such detail, containing such
information and in such form as shall be satisfactory to Lender and accompanied
by a certificate of an officer of Borrowers, in form and substance satisfactory
to Lender.
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7.5
Trade
Name Covenants.
With
respect to its trade names and trademarks (a) each Borrower shall at all
times
maintain its registered trade names and trademarks, except for trade names
and
trademarks no longer used or useful in such Borrower’s business; (b) Borrowers
shall not at any time, grant any person, a license except for trade names
and
trademarks no longer used or useful in a Borrower’s business, to use any trade
name or trademarks; (c) upon Lender’s request, Borrowers’ shall, at their
expense, no more than twice in any twelve (12) months period, but at any
time or
times as Lender may request on or after an Event of Default, deliver or
cause to
be delivered to Lender written reports or appraisals as to its trade names
and
trademarks in form, scope and methodology acceptable to Lender and by an
appraisers acceptable to Lender, addressed to Lender or upon which Lender
is
expressly permitted to rely; and (d) a Borrower shall not use its trade
names or
trademarks to sell any assets or property other than assets and property
in a
business classification similar to that currently being carried on by such
Borrower.
7.6 Power
of Attorney.
Each
Borrower hereby irrevocably designates and appoints Lender (and all persons
designated by Lender) as such Borrower’s true and lawful attorney-in-fact, and
authorizes Lender, in Borrower’s or Lender’s name, to: (a) at any time an Event
of Default or event which with notice or passage of time or both would
constitute an Event of Default exists or has occurred and is continuing (i)
demand payment on Accounts or chattel paper or other proceeds of Inventory
or
other Collateral, (ii) enforce payment of Receivables including Accounts
by
legal proceedings or otherwise, (iii) enforce and exercise all of Borrower’s
rights and remedies to collect any Receivables including Accounts or other
Collateral, (iv) sell or assign any Receivable, including any Accounts upon
such
terms, for such amount and at such time or times as the Lender deems advisable,
(v) settle, adjust, compromise, extend or renew any Receivable, including
any
Account or any Chattel Paper (vi) discharge and release any Receivable,
including any Account, (vii) prepare, file and sign such Borrower’s name on any
proof of claim in bankruptcy or other similar document against an account
debtor, (viii) notify the post office authorities to change the address for
delivery of Borrower's mail to an address designated by Lender, and open
and
dispose of all mail addressed to Borrower, and (ix) do all acts and things
which
are necessary, in Lender's determination, to fulfill Borrower’s obligations
under this Agreement and the other Financing Agreements and (b) at any time
to
(i) take control in any manner of any item of payment or proceeds thereof,
(ii)
have access to any lockbox or postal box into which any Borrower's mail is
deposited, (iii) endorse any Borrower's name upon any items of payment or
proceeds thereof and deposit the same in the Lender's account for application
to
the Obligations, (iv) endorse any Borrower's name upon any chattel paper,
document, instrument, invoice, or similar document or agreement relating
to any
Receivables including Account or any goods pertaining thereto or any other
Collateral, (v) sign any Borrower's name on any verification of Accounts
and
notices thereof to account debtors and (vi) execute in any Borrower's name
and
file any UCC financing statements or amendments thereto. Borrowers hereby
release Lender and its officers, employees and designees from any liabilities
arising from any act or acts under this power of attorney and in furtherance
thereof, whether of omission or commission, except as a result of Lender's
own
gross negligence or willful misconduct as determined pursuant to a final
non-appealable order of a court of competent jurisdiction.
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7.7 Right
to Cure.
Lender
may, at its option, (a) cure any default by a Borrower under any agreement
with
a third party or pay or bond on appeal any judgment entered against Borrower,
(b) discharge taxes, liens, security interests or other encumbrances at any
time
levied on or existing with respect to the Collateral, (c) pay or bond on
appeal
any judgment entered against a Borrower and (d) pay any amount, incur any
expense or perform any act which, in Lender's judgment, is necessary or
appropriate to preserve, protect, insure or maintain the Collateral and the
rights of Lender with respect thereto. Lender may add any amounts so expended
to
the Obligations and charge Borrowers’ accounts therefor, such amounts to be
repayable by Borrowers on demand. Lender shall be under no obligation to
effect
such cure, payment or bonding and shall not, by doing so, be deemed to have
assumed any obligation or liability of any Borrower. Any payment made or
other
action taken by Lender under this Section shall be without prejudice to any
right to assert an Event of Default hereunder and to proceed
accordingly.
7.8 Access
to Premises.
From
time to time as requested by Lender, at the cost and expense of Borrowers
(a)
Lender or its designee shall have complete access to all of Borrowers’ premises
during normal business hours and after notice to Borrowers or at any time
and
without notice to Borrowers if an Event of Default exists or has occurred
and is
continuing, for the purposes of inspecting, verifying and auditing the
Collateral and all of Borrower’s books and records, including the Records, and
(b) Borrowers shall promptly furnish to Lender such copies of such books
and
records or extracts therefrom as Lender may request, and (c) use during normal
business hours such of a Borrower’s personnel, equipment, supplies and premises
as may be reasonably necessary for the foregoing and if an Event of Default
exists or has occurred and is continuing for the collection of Accounts and
realization of other Collateral.
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7.9
Chattel
Paper Covenants.
(a)
Each Borrower represent and warrant to Lender that Borrower does not have
any
chattel paper (whether tangible or electronic) or instruments as of the date
hereof, except as set forth in Schedule 7.9 hereto. In the event that Borrower
shall be entitled to or shall receive any chattel paper or instrument after
the
date hereof, Borrower shall promptly notify Lender thereof in writing. Promptly
upon the receipt thereof by or on behalf of Borrower (including by any agent
or
representative), Borrower shall deliver, or cause to be delivered to Lender,
all
tangible chattel paper and instruments that Borrower has or may at any time
acquire, accompanied by such instruments of transfer or assignment duly executed
in blank as Lender may from time to time specify in each case except as Lender
may otherwise agree. At Lender’s option, Borrower shall, and Lender may at any
time on behalf of Borrower, cause the original of any such instrument or
chattel
paper to be conspicuously marked in a form and manner acceptable to Lender
with
the following legend referring to chattel paper or instruments as applicable:
“This ______________________________________ is subject to the security interest
of Westernbank Puerto Rico and any sale, transfer, assignment or encumbrance
of
this ___________________________________________ violates the rights of such
secured party”.
(b)
In
the event that Borrower shall at any time hold or acquire an interest in
any
electronic chattel paper or any “transferable record” (as such term is defined
in Section 201 of the Federal Electronic Signatures in Global and National
Commerce Act or in Section 16 of the Uniform Electronic Transactions Act
as in
effect in any relevant jurisdiction), Borrower shall promptly notify Lender
thereof in writing. Promptly upon Lenders request, Borrower shall take, or
cause
to be taken, such actions as Lender may request to give Lender control of
such
electronic chattel paper under Section 9-105 of the UCC and control of such
transferable record under Section 201 of the Federal Electronic Signatures
in
Global and National Commence Act or, as the case may be, Section 16 of the
Uniform Electronic Transactions Act, as in effect in such
jurisdiction.
7.10
Letters
of Credit.
Borrower represents and warrants to Lender that Borrower is not the beneficiary
or otherwise entitled to any right to payment under any letter of credit,
banker’s acceptance or similar instrument as of the date hereof. In the event
that Borrower shall be entitled to or shall receive any right to payment
under
any Letter of Credit banker’s acceptance or any similar instrument, whether as
beneficiary thereof or otherwise after the date hereof, Borrower shall promptly
notify Lender thereof in writing. Borrower shall immediately, as Lender may
specify, either (i) deliver, or cause to be delivered to Lender, with respect
to
any such letter of credit, banker’s acceptance or similar instrument, the
written agreement of the issuer and any other nominated person obligated
to make
any payment in respect thereof (including any confirming or negotiating bank),
in form and substance satisfactory to Lender consenting to the assignment
of the
proceeds of the letter of credit to Lender by Borrower and agreeing to make
all
payment thereon directly to Lender or as Lender may otherwise direct or (ii)
cause Lender to become, at such person’s expense, the transferee beneficiary of
the letter of credit, banker’s acceptance or similar instrument (as the case may
be.
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7.11
Deposit
Accounts.
Borrowers represent and warrant to Lender that Borrowers do not have any
deposit
accounts as of the date hereof, except as set forth in Schedule 8.8 hereto.
Borrowers shall not, directly or indirectly, after the date hereof open,
establish or maintain any deposit account unless each of the following
conditions is satisfied: (i) Lender shall have received not less than fifteen
(15) Business Days prior written notice of the intention of a Borrower to
open
or establish such account which notice shall specify in reasonable detail
and
specificity acceptable to Lender the name of the account, the owner of the
account, the name and address of the bank at which such account is to be
opened
or established, the individual at such bank with whom such Lender is dealing
and
the purpose of the account and Lender shall have consented thereto in writing,
(ii) the bank where such account is opened or maintained shall be reasonably
acceptable to Lender and (iii) on or before the opening of such deposit account,
Borrowers shall as Lender may specify, either (A) deliver to ender a Deposit
Account Control Agreement in form and substance satisfactory to Lender with
respect to such deposit account duly authorized, executed and delivered by
such
Person and the bank at which such deposit account is opened and maintained
or
(B) arrange for Lender to become the customer of the bank with respect to
the
deposit account on terms and conditions acceptable to lender. The terms of
this
subsection 7.11 shall not apply to deposit accounts specifically and exclusively
used for payroll, payroll taxes and other employee wage and benefit payments
to
or for the benefit of a Borrower’s salaried employees.
7.12
Investment
Property.
Borrowers represent and warrant to Lender that Borrowers’ do not own or hold,
directly or indirectly, beneficially or as record owner or both, any investment
property, as of the date hereof, or have any investment account, securities
account, commodity account or other similar account with any bank or other
financial institution or other securities intermediary or commodity intermediary
as of the date hereof, in each case except as set forth in Schedule 7.12
hereto.
In the event that any Borrower shall be entitled to or shall at any time
after
the date hereof hold or acquire any certificated securities, Borrowers shall
promptly endorse, assign and deliver the same to Lender, accompanied by such
instruments of transfer or assignment duly executed in blank as Lender may
from
time to time specify. If any securities now owned or hereafter acquired by
Borrowers are uncertificated and are issued to a Borrower or its nominee
directly by the issuer thereof, Borrower shall immediately notify Lender
thereof
and shall as Lender may specify, either (i) cause the issuer to agree to
comply
with instructions from Lender as to such securities, without further consent
of
any of Borrowers or such nominee, or (ii) arrange for Lender to become the
registered owner of the securities. Borrowers shall not, directly or indirectly,
after the date hereof open, establish or maintain any investment account,
securities account, commodity account or any other similar account (other
than a
deposit account) with any securities intermediary or commodity intermediary
unless each of the following conditions is satisfied (i) Lender shall have
received not less than fifteen (15) Business Days prior written notice of
the
intention of Borrowers to open or establish such account which notice shall
specify in reasonable detail and specificity acceptable to Lender the name
of
the account, the owner of the account, the name and address of the securities
intermediary or commodity intermediary at which such account is to be opened
or
established, the individual at such intermediary with whom a Borrowers is
dealing and the purpose of the account and Lender shall have consented thereto
in writing, (ii) the securities intermediary or commodity intermediary (as
the
case may be) where such account is opened or maintained shall be acceptable
to
Lender, and (iii) on or before the opening of such investment account,
securities account or other similar account with a securities intermediary
or
commodity intermediary, such person shall as Lender may specify, either (A)
execute and deliver, and cause to be executed and delivered to Lender, a
Pledge
Agreement and an Investment Property Control Agreement in form and substance
satisfactory to Lender with respect thereto duly authorized, executed and
delivered by Borrowers and such securities intermediary or commodity
intermediary or (B) arrange for Lender to become the entitlement holder with
respect to such investment property on terms and conditions acceptable to
Lender.
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7.13
Tort
Claims.
Borrower
represents and warrants to Lender that Borrower does not have any commercial
tort claims as of the date hereof, except as set forth on Schedule 7.11 hereto.
In the event that Borrower shall at any time after the date hereof have any
commercial tort claims Borrower shall promptly notify Lender thereof in writing,
which notice shall (i) set forth in reasonable detail the basis for and nature
of such commercial tort claim and (ii) include the express grant by Borrower
to
Lender of a security interest in such commercial tort claim (and the proceeds
thereof). In the event that such notice does not include such grant of a
security interest, the sending thereof by Borrower to Lender shall be deemed
to
constitute such grant to Lender. Upon the sending of such notice, any commercial
tort claim described therein shall constitute part of the Collateral and
shall
be deemed included therein. Without limiting the authorization of Lender
provided herein or otherwise arising by the execution by Borrower of this
Agreement or any of the other Financing Agreements, Lender is hereby irrevocably
authorized from time to time and at any time to file such financing statements
naming Lender or its designee as secured party and Borrower as debtor, or
any
amendments to any financing statements, covering any such commercial tort
claim
as Collateral. In addition, Borrower shall promptly upon request by Lender,
execute and deliver, or cause to be executed and delivered, to Lender such
other
agreements, documents and instruments as Lender may require in connection
with
such commercial tort claim.
7.14
Third
Party Possession.
Borrowers represent and warrant to Lender that no Borrower has any goods,
documents of title or other collateral in the custody, control or possession
of
a third party as of the date hereof, except for goods located in England
in
transit to a location of a Borrower permitted herein in the ordinary course
of
business of such Borrower in the possession of the carrier transporting such
goods. In the event that any goods, documents of title or other collateral
are
at any time after the date hereof in the custody, control or possession of
any
other person or such carriers, Borrowers shall promptly notify Lender thereof
in
writing; provided that,
as to
such carriers, Borrowers need only notify Lender on an aggregate basis. Promptly
upon Lender’s request, Borrowers shall deliver a Collateral Access Agreement in
form and substance satisfactory to Lender, duly authorized, executed and
delivered by any such person and the applicable Borrower.
7.15
Additional
Actions.
Borrowers shall take any other actions reasonably requested by Lender from
time
to time to cause the attachment, perfection and first priority of, and the
ability of Lender to enforce, the security interest of Lender in any and
all of
the Collateral, including, without limitation, (i) executing, delivering
and,
where appropriate, filing, financing statements and other instruments or
documents and amendments relating thereto under the UCC or other applicable
law,
to the extent, if any, a Borrower’s signature thereon is required therefor, (ii)
causing Lender’s name to be noted as secured party on any certificate of title
for a titled good if such notation is a condition to attachment, perfection
or
priority of, or ability of Lender to enforce, the security interest of Lender
in
such Collateral, (iii) complying with any provision of any statute, regulation
or treaty of the United States, any State of the United States, Puerto Rico
and
England or any other country or the European Union as to any Collateral if
compliance with such provision is a condition to attachment, perfection or
priority of, or ability of Lender to enforce, the security interest of Lender
in
such Collateral, (iv) obtaining the consents and approvals of any governmental
authority or third party, including, without limitation, any consent of any
licensor, lessor or other person obligated on Collateral, and taking all
actions
required by any earlier versions of the UCC or by other law, as applicable
in
any relevant jurisdiction and (v) transferring any and all deposit accounts
and
investment property to a financial institution or account specified by
Lender.
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Section
8. Representations
And Warranties.
Borrowers
hereby represent and warrant to Lender the following (which shall survive
the
execution and delivery of this Agreement), the truth and accuracy of which
are a
continuing condition of the making of Loans and providing Letter of Credit
Accommodations by Lender to Borrowers:
8.1
Corporate
Existence, Power And Authority; Subsidiaries.
Each
Borrower is a limited company (corporation), duly organized, validly existing
and registered under the laws of England And Wales. Each Borrower is duly
qualified as a foreign corporation in good standing in all jurisdictions
where
the nature and extent of the business transacted by it or the ownership of
assets makes such qualification necessary, except for those jurisdictions
in
which the failure to so qualify would not have a Material Adverse Effect.
The
execution, delivery and performance of this Agreement, the other Financing
Agreements and the transactions contemplated hereunder and thereunder (a)
are
all within each Borrower’s corporate powers, (b) have been duly authorized, (c)
are not in contravention of law or the terms of any Borrower’s certificate of
incorporation, memorandum and articles of association , or other organizational
documentation, or any indenture, agreement or undertaking to which any Borrower
is a party or by which any Borrower or its property is bound and (d) except
for
those arising pursuant to the Financing Agreements will not result in the
creation or imposition of, or require or give rise to any obligation to grant,
any lien, security interest, charge or other encumbrance upon any property
of
Borrower. This Agreement and the other Financing Agreements constitute legal,
valid and binding obligations of Borrower enforceable in accordance with
their
respective terms.
8.2 Financial
Statements; No Material Adverse Change.
All
financial statements relating to any Borrower or its Affiliates which have
been
or may hereafter be delivered by Borrowers or any of their Affiliates to
Lender
have been prepared in accordance with GAAP and fairly present the financial
condition and the results of operations of Borrower and such Affiliates as
of
the dates and for the periods set forth therein. Except as disclosed in any
interim financial statements furnished by Borrowers or any of their Affiliates
to Lender prior to the date of this Agreement, there has been no material
adverse change in the assets, liabilities, properties and condition, financial
or otherwise, of any Borrower or any of its Affiliates since the date of
the
most recent audited financial statements furnished by to Lender prior to
the
date of this Agreement.
8.3 Chief
Executive Office; Collateral Locations.
The
chief executive office of each Borrower and such Person’s Records concerning
Accounts are located only at the address set forth below on the signature
page
hereto and its only other places of business and the only other locations
of
Collateral, if any, are the addresses set forth in the Information Certificate.
The Information Certificate correctly identifies any of such locations which
are
not owned by a Borrower and sets forth the owners and/or operators thereof
and
to the best of Borrowers’ knowledge, the holders of any mortgages on such
locations.
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8.4 Priority
of Liens; Title to Properties.
The
security interests and liens granted to Lender under this Agreement and the
other Financing Agreements constitute valid and perfected first priority
liens
and security interests in and upon the Collateral subject only to those non
material liens indicated on Part 1 of Schedule 8.4 hereto, the existence
of
which has previously been approved, in writing by Lender. Each Borrower has
good
and marketable title to all of its properties and assets, including the
Purchased Stock subject to no liens, mortgages, pledges, security interests,
encumbrances or charges of any kind, except those granted to Lender and such
others as may be specifically listed on Parts 1 and 2 of Schedule 8.4 hereto
(including those permitted by Section 9.8(f) hereof) and as to those listed,
if
any, on Part 2 of Schedule 8.4 hereto only as specifically set forth therein
and
only on the assets and properties specifically identified therein.
8.5 Tax
Returns.
Except
as disclosed in the Information Certificate, each Borrower has filed, or
caused
to be filed, in a timely manner all tax returns, reports and declarations
which
are required to be filed by it (without requests for extension, except as
previously disclosed in writing to Lender). All information in such tax returns,
reports and declarations is complete and accurate in all material respects.
Each
Borrower has paid or caused to be paid all taxes due and payable or claimed
due
and payable in any assessment received by it, except taxes the validity of
which
are being contested in good faith by appropriate proceedings diligently pursued
and available to such Borrower and with respect to which adequate reserves
have
been set aside on its books. Adequate provision has been made for the payment
of
all accrued and unpaid Federal, State, Commonwealth, United Kingdom, county,
local, foreign and other taxes whether or not yet due and payable and whether
or
not disputed.
8.6 Litigation.
Except
as set forth on the Information Certificate or in Schedule 8.6 hereto, there
is
no present investigation by any governmental agency pending, or to the best
of
any Borrower’s knowledge threatened, against or affecting a Borrower, its assets
or business and there is no action, suit, proceeding or claim by any Person
pending, or to the best of each Borrower’s knowledge threatened, against any
Borrower or its assets or goodwill, or against or affecting any transactions
contemplated by this Agreement or the Purchase Agreements, which if adversely
determined against a Borrower would result in any material adverse change
in the
assets, business or prospects of any Borrower or would impair the ability
of any
Borrower to perform its obligations hereunder or under any of the other
Financing Agreements to which it is a party or of Lender to enforce any
Obligations or realize upon any Collateral.
8.7 Compliance
with Other Agreements and Applicable Laws.
Borrower is not in default in any material respect under, or in violation
in any
material respect of any of the terms of, any agreement, contract, instrument,
lease or other commitment to which it is a party or by which it or any of
its
assets are bound and Borrower is in compliance in all material respects with
all
applicable provisions of laws, rules, regulations, licenses, permits, approvals
and orders of any foreign, English, Federal, State or local governmental
authority.
8.8 Bank
Accounts.
All of
the deposit accounts, merchant payment accounts, investment accounts or other
accounts in the name of or used by any Borrower maintained at any bank or
other
financial institution are set forth on Schedule 8.8 hereto.
8.9 Accuracy
and Completeness of Information.
All
information furnished by or on behalf of any Borrower in writing to Lender
in
connection with this Agreement, or any other Financing Agreements or any
transaction contemplated hereby or thereby, including all information on
the
Information Certificate is true and correct in all material respects on the
date
as of which such information is dated or certified and does not omit any
material fact necessary in order to make such information not misleading.
No
event or circumstance has occurred which has had or could reasonably be expected
to have a Material Adverse Effect which has not been fully and accurately
disclosed to Lender in writing.
8.10 Survival
of Warranties; Cumulative.
All
representations and warranties contained in this Agreement or any of the
other
Financing Agreements shall survive the execution and delivery of this Agreement
and shall be deemed to have been made again to Lender on the date of each
additional borrowing or other credit accommodation hereunder and shall be
conclusively presumed to have been relied on by Lender regardless of any
investigation made or information possessed by Lender. The representations
and
warranties set forth herein shall be cumulative and in addition to any other
representations or warranties which any Borrower shall now or hereafter give,
or
cause to be given, to Lender.
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8.11
Intellectual
Property.
Each
Borrower owns or licenses or otherwise has the right to use all Intellectual
Property materially necessary for the operations of its business as presently
conducted or proposed to be conducted. As of the date hereof, no Borrower
has
any Intellectual Property registered, or subject to pending applications,
in the
United States Patent and Trademark Office or any similar office or agency
in the
United States or any similar office or agency of the European Union or of
England, any State thereof, any political subdivision thereof or in any other
country, other than those described in Schedule 8.11 hereto and has not granted
any licenses with respect thereto, other than as set forth in Schedule 8.11
hereto. To Borrowers’ knowledge, after reasonable investigation, no event has
occurred which permits or would permit after notice or passage of time or
both,
the revocation, suspension or termination of such rights. Except as otherwise
disclosed by Borrower to Lender in writing to the best of Borrowers’ knowledge,
no slogan or other advertising device, product, process, method, substance
or
other Intellectual Property or goods bearing or using any Intellectual Property
presently employed by a Borrower infringes any patent, trade ▇▇▇▇, service
▇▇▇▇,
trade name, copyright, license or other Intellectual Property owned by any
other
Person presently and no claim or litigation is pending or threatened against
or
affecting Seller or any Borrower or contesting Seller’s or any Borrower’s rights
to sell or use any such Intellectual Property. Schedule 8.11 sets forth all
of
the agreements or other arrangements of any Borrower pursuant to which such
Borrower or has a license or other rights to use any trademarks, logos, designs,
representations or other Intellectual Property owned by another person as
in
effect on the date hereof and the dates of the expiration of such agreements
or
other arrangements of such Borrower as in effect on the date hereof and after
giving effect to the transactions contemplated by the Purchase Agreements.
No
trademark, service ▇▇▇▇ or other Intellectual Property at any time used by
Seller or any Borrower which is owned by another person, or owned by Seller
or
any Borrower is subject to any security interest, lien, collateral assignment,
pledge or other encumbrance in favor of any person other than Lender, is
or will
be affixed to any Eligible Inventory.
8.12
Capitalization.
(a)
All
of the issued and outstanding shares of Capital Stock of each Borrower are
directly and beneficially owned and held by those persons specified on Schedule
8.12 hereto, in the amounts specified therein and all of such shares of Capital
Stock have been duly issued and are fully paid and non-assessable, free and
clear of all claims, liens, pledges and encumbrances of any kind except those
in
favor of Lender.
(b)
Except as set forth on Schedule 8.12 hereto, no Borrower has any
Subsidiary.
(c)
Each
Borrower is Solvent and will continue to be Solvent after (i) the creation
of
Obligations and the security interests of Lender and (ii) the consummation
of
the other transactions contemplated hereunder and under the Purchase
Agreements.
8.13
Environmental
Compliance.
(a)
Except as set forth on Schedule 8.13 hereto, no Person has with respect to
any
Real Property including any Real Estate Security, generated, used, stored,
treated, transported, manufactured, handled, produced or disposed of any
Hazardous Materials, on or off any such property (whether or not owned by
it) in
any manner which at any time violates any applicable Environmental Law or
any
license, permit, certificate, approval or similar authorization thereunder
and
the present or proposed operations of Borrower complies in all material respects
with all Environmental Laws and all licenses, permits, certificates, approvals
and similar authorizations thereunder.
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(b)
Except as set forth on Schedule 8.13 hereto, there has been no investigation,
proceeding, complaint, order, directive, claim, citation or notice by any
governmental authority or any other person nor is any pending or to the best
of
Borrower’s knowledge threatened, with respect to any non-compliance with or
violation of the requirements of any Environmental Law by any Person with
respect to any Real Property including any Real Estate Security or the release,
spill or discharge, threatened or actual, of any Hazardous Material or the
generation, use, storage, treatment, transportation, manufacture, handling,
production or disposal of any Hazardous Materials or any other environmental,
health or safety matter, which affects Borrower or any Real Property including
any Real Estate Security or Borrower’s business, operations or assets or any
properties at which Borrower has transported, stored or disposed of any
Hazardous Materials.
(c)
Borrower has no material liability (contingent or otherwise) in connection
with
a release, spill or discharge, threatened or actual, of any Hazardous Materials
or the generation, use, storage, treatment, transportation, manufacture,
handling, production or disposal of any Hazardous Materials.
(d)
)
Except as set forth on Schedule 8.13 hereto, Borrower has all licenses, permits,
certificates, approvals or similar authorizations required to be obtained
or
filed in connection with the present and proposed operations of Borrower
under
any Environmental Law and all of such licenses, permits, certificates, approvals
or similar authorizations are valid and in full force and effect.
8.14
Employee
Benefits.
(a)
Except as set forth on Schedule 8.14 hereto, no Borrower has engaged in any
transaction in connection with which such Borrower or any of its ERISA
Affiliates could be subject to either a civil penalty assessed pursuant to
Section 502(i) of ERISA or a tax imposed by Section 4975 of the code, including
any accumulated funding deficiency described in Section 8.14(c) hereof and
any
deficiency with respect to vested accrued benefits described in Section 8.14(d)
hereof.
(b)
Except as set forth in schedule 8.14 hereto, no liability to the Pension
Benefit
Guaranty Corporation or any other person has been or is expected by Borrower
to
be incurred with respect to any employee benefit plan of Seller or of Borrower
or any of its ERISA Affiliates. There has been no reportable event (without
the
meaning of Section 4043(b) of ERISA) or any other event or condition with
respect to any employee pension benefit plan of any Borrower or any of its
ERISA
Affiliates which presents a risk of termination of any such plan by the Pension
Benefit Guaranty Corporation. No liability to the Pension Benefit Guaranty
Corporation has been or will be incurred by any Borrower with respect to
any
employee benefit plan of Seller or any of its ERISA Affiliates.
(c)
Full
payment has been made of all amounts which any Borrower or any of its ERISA
Affiliates is required under Section 302 of ERISA and Section 412 of the
Code to
have paid under the terms of each employee benefit plan as contributions
to such
plan as of the last day of the most recent fiscal year of such plan ended
prior
to the date hereof, and no accumulated funding deficiency (as defined in
Section
302 of ERISA and Section 412 of the Code), whether or not waived, exists
with
respect to any employee benefit plan, including any penalty or tax described
in
Section 8.14(a) hereof and any deficiency with respect to vested accrued
benefits described in section 8.14(d) hereof.
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(d)
The
current value of all vested accrued benefits under all employee benefit plans
maintained by any Borrower or any of its ERISA Affiliates that are subject
to
Title IV of ERISA does not exceed the current value of the assets of such
plans
allocable to such vested accrued benefits, including any penalty or tax
described in Section 8.14(a) hereof any accumulated funding deficiency described
in Section 8.14(c) hereof. The terms “current value” and “accrued benefit” have
the meanings specified in ERISA.
(e)
Neither any Borrower nor any of its ERISA Affiliates is or has ever been
obligated to contribute to any “multi employer plan” of any (as such term is
defined in section 4001(a)(3) of ERISA) that is subject to Title IV of
ERISA.
(f)
Except as set forth in Schedule 8.14 hereto and then only in the amounts
shown
therein and for the periods shown therein, no Borrower has or expects to
have
any present, future, projected or anticipated liability in respect of employee
benefits, fixed or contingent, including any pension or life assurance or
other
deferred compensation or benefit plan or “scheme”.
8.15
Credit
Card Agreements.
No
Borrower has any credit card agreements or any other agreement, document
or
instrument existing as of the date hereof between or among Borrower, and
any
credit card issuer or any credit card processor, except for credit cards
issued
to their respective executive personnel, in the ordinary course of business,
to
▇▇▇ expenses incurred in Borrower’s business and having an aggregate limit not
in excess 40,000 British Pounds Sterling
8.16 Acquisition
of Purchased Stock.
(a) The
Purchase Agreements and the transactions contemplated thereunder have been
duly
executed, delivered and performed in accordance with their terms by the
respective parties thereto in all respects, including the fulfillment (not
merely the waiver, except as may be disclosed to Lender and consented to
in
writing by Lender) of all conditions precedent set forth therein and giving
effect to the terms of the Purchase Agreements and the assignments to be
executed and delivered by Seller (or any of its Affiliates or Subsidiaries)
thereunder, Borrower has acquired and has good and marketable title to the
Purchased Stock, free and clear of all claims, liens pledges and encumbrances
of
any kind, except as permitted hereunder.
(b) All
actions and proceedings, required by the Purchase Agreements, applicable
law or
regulation (including, but not limited to, compliance with the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇
Anti-Trust Improvements Act of 1976, as amended) have been taken and the
transactions required thereunder have been duly and validly taken and
consummated.
(c) No
court
of competent jurisdiction has issued any injunction, restraining order or
other
order which prohibits consummation of the transactions described in the Purchase
Agreements and no governmental or other action or proceeding has been threatened
or commenced, seeking any injunction, restraining order or other order which
seeks to void or otherwise modify the transactions described in the Purchase
Agreements.
(d) Borrowers
have delivered, or caused to be delivered, to Lender, true, correct and complete
copies of the Purchase Agreements.
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8.17
Interrelated
Business.
Borrowers shares an identity of interest with each other and with Inyx, Inyx
Pharma, Inyx USA and Inyx Canada, such that any benefit received by one benefits
the other. Except as may otherwise be prohibited by Section 9.26 hereof each
such Person renders or will render services to or for the benefit of the
other,
makes or will make loans and advances to or for the benefit of the other,
shares
or will share research and development and Intellectual Property and provides
or
will provide administrative, marketing, payroll or management services to
or for
the benefit of the other. Such Persons have centralized accounting and legal
services.
8.18
Special
United Kingdom Representations.
(a) No
Borrower incorporated in the United Kingdom has
taken
any action nor (to the best of its knowledge and belief) have any steps been
taken or legal proceedings been started or threatened against it for its
winding-up, dissolution or re-organisation, for the enforcement of any
Collateral over its assets or for the appointment of a liquidator supervisor,
receiver, administrator, administrative receiver, compulsory manager, trustee
or
other similar officer of it or in respect.
(b)
Each
Borrower incorporated in England and Wales shall maintain its centre of main
interests in England and Wales for the purposes of the Insolvency
Regulation.
(c)
Each of
the directors of CMSL has made the statutory declarations required to be
made
under section 155 of the Companies ▇▇▇ ▇▇▇▇ and those declarations
are
true, accurate in all respects and complete, and has otherwise procured
compliance with all the relevant provisions of the Companies ▇▇▇ ▇▇▇▇ in
relation to the lawful giving of financial assistance directly or indirectly
for
the purpose of reducing or discharging Inyx EU's liability incurred in
connection with its acquisition of the shares in the CMSL.
(d) Other
than the registration of particulars of the Financing Agreements at the
Companies Registration Office pursuant to section 395 of the Act,
registrations at Land Registry and the Trade Marks Registry and equivalent
registration in any other relevant jurisdictions in respect of assets to
be
mortgaged or charged, in each case pursuant to the Financing Agreements,
the
stamping of the Purchase Agreement and the filing of the statutory declarations
all authorizations, consents (including an environmental consent), approvals,
resolutions, licenses, exemptions, filings, notarizations or registrations
required or desirable:
(i)
to
enable
it lawfully to enter into, exercise its rights and comply with its obligations
in the Financing Agreements which it is a party;
(ii)
to
make
the Financing Agreements to which it is a party admissible in evidence in
its
jurisdiction of incorporation; and
(iii)
to
enable
it and each of its Subsidiaries to carry on its business, trade and ordinary
activities, have
been
obtained or effected and are in full force and effect.
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(e)
Under
the
law of its jurisdiction of incorporation and the jurisdiction of incorporation
of any of its Subsidiaries it is not necessary that any of the Financing
Agreements or Purchase Agreement be filed, recorded or enrolled with any
court
or other authority in that jurisdiction, or that any stamp, registration
or
similar tax be paid on or in relation to any of the Financing Agreements
or
Purchase Agreement or any of the transactions contemplated by the Financing
Agreement or Purchase Agreement.
(f)
No Event
of Default is continuing or might reasonably be expected to result from the
making of a Loan.
(g) Any
factual information provided by any Borrower for the purposes of either or
both
of the the Information Package was true and accurate in all material respects
as
at the date it was provided or as at the date (if any) at which it is stated.
The financial estimates, forecasts and projections contained in the Information
Package have been prepared on the basis of recent historical information
and on
the basis of reasonable assumptions and nothing has occurred which would
necessitate a material revision to any of those estimates, forecasts and
projections in order for them to be fair and reasonable. Nothing has occurred
or
been omitted from the Information Package and no information has been given
or
withheld which results in the information contained in the Information Package
being untrue or misleading in any material respect.
(h)
The
factual information contained in the certificates of title is or was at the
respective dates of those certificates of title, true and accurate in all
respects and complete.
(i)
The
factual information provided for the purpose of producing valuations of the
properties of Borrowers and associated forecasts and projections is or was
at
the date on which such information was provided, true and accurate in all
respects and complete.
For
purposes of this Section “Information Package” means all information,
documentation and reports furnished by any Borrower to Lender in connection
with
the transactions contemplated herein.
(j)
There
is
no disclosure made in the Disclosure Letter or any other disclosure to the
Purchase Agreement which has or may have a material adverse effect on any
of the
information, prospects, estimates, forecasts or projections contained or
referred to in the Information Package.
(k)
Before
the making of the first Loan hereunder, Inyx EU has not traded nor undertaken
any commercial activities of any kind and (except as contemplated by, or
otherwise in connection with, this Agreement and the other Financing Agreeemnts
and the Purchase Agreement and the transactions contemplated by this Agreement,
the other Financing Agreements or by the Purchase Agreement) has no assets
or
liabilities, actual or contingent.
(l)
Each
Borrower’s payment obligations under the Financing Agreements rank at least pari
passu with the claims of all their respective other unsecured and unsubordinated
creditors, except for obligations mandatorily preferred by law applying to
companies generally.
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Section
9. Affirmative
And Negative Covenants.
9.1 Maintenance
of Existence.
Each
Borrower shall at all times preserve, renew and keep in full, force and effect
its corporate or other existence and rights and franchises with respect thereto
and maintain in full force and effect all permits, licenses, trademarks,
trade
names, approvals, authorizations, leases and contracts necessary to carry
on its
business as presently or proposed to be conducted. Borrowers shall give Lender
thirty (30) days prior written notice of any proposed change in any their
respective corporate or other names, which notice shall set forth the new
name(s) and Borrowers shall deliver to Lender a copy of the amendment to
the
Certificate of Incorporation or other organizational document of each Borrower
providing for the name change certified by the Secretary of State or other
appropriate official of the jurisdiction of incorporation or organization
of
such Person as soon as it is available; provided
that,
Lender
has consented to CMSL changing its company name to “Ashton Pharmaceuticals
Limited”.
9.2 New
Collateral Locations.
A
Borrower may open any new location within England only; provided (a) Borrowers
give Lender thirty (30) days prior written notice of the intended opening
of any
such new location and (b) Borrowers execute and delivers, or causes to be
executed and delivered, to Lender such agreements, documents, and instruments
as
Lender may deem reasonably necessary or desirable to protect its interest
in the
Collateral at such location.
9.3 Compliance
with Laws, Regulations, Etc.
(a)
Borrowers shall, at all times, comply in all material respects with all laws,
rules, regulations, licenses, permits, approvals and orders applicable to
any of
them and duly observe all requirements of any Federal, English, State or
local
governmental authority, including the Employee Retirement Security Act of
1974,
as amended, the Pension Schemes Act Of 1993, as amended, the Occupational
Safety
and Health Act of 1970, as amended, the Fair Labor Standards Act of 1938,
as
amended, and all statutes, rules, regulations, orders, permits and stipulations
relating to environmental pollution and employee health and safety, including
all of the Environmental Laws.
(b)
Borrowers shall establish and maintain, at their expense, a system to assure
and
monitor its continued compliance with all Environmental Laws in all of its
operations, which system shall include annual reviews of such compliance
by
employees or agents of Borrowers who are familiar with the requirements of
the
Environmental Laws. Copies of all environmental surveys, audits, assessments,
feasibility studies and results of remedial investigations shall be promptly
furnished, or caused to be furnished, by Borrower to Lender. Borrowers shall
take prompt and appropriate action to respond to any non-compliance with
any of
the Environmental Laws and shall regularly report to Lender on such
response.
(c)
Borrowers shall give both oral and written notice to Lender immediately upon
Borrower’s receipt of any notice of, or Borrowers’ otherwise obtaining knowledge
of, (i) the occurrence of any event involving the release, spill or discharge,
threatened or actual, of any Hazardous Material or (ii) any investigation,
proceeding, complaint, order, directive, claims, citation or notice with
respect
to: (A) any non-compliance with or violation of any Environmental Law by
(1) a
Borrower or (2) any Obligor with respect to any Real Estate Security or (B)
the
release, spill or discharge, threatened or actual, of any Hazardous Material
or
(C) the generation, use, storage, treatment, transportation, manufacture,
handling, production or disposal of any Hazardous Materials or (D) any other
environmental, health or safety matter, which affects (1) a Borrower or its
business, operations or assets or any properties at which a Borrower
transported, stored or disposed of any Hazardous Materials or (2) any Real
Estate Security given by any Obligor.
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(d)
Without limiting the generality of the foregoing, whenever Lender reasonably
determines that there is non-compliance, or any condition which requires
any
action by or on behalf of Borrower with respect to any Real Estate Security,
in
order to avoid any material non-compliance, with any Environmental Law,
Borrowers shall, at Lender's request and Borrowers’ expense: (i) cause an
independent environmental engineer acceptable to Lender to conduct such tests
of
the site where Borrower's non-compliance or alleged non-compliance with such
Environmental Laws has occurred as to such non-compliance and prepare and
deliver to Lender a report as to such non-compliance setting forth the results
of such tests, a proposed plan for responding to any environmental problems
described therein, and an estimate of the costs thereof and (ii) provide
to
Lender a supplemental report of such engineer whenever the scope of such
non-compliance, or Borrowers’ response thereto or the estimated costs thereof,
shall change in any material respect.
(e)
Borrowers shall indemnify and hold harmless Lender, its directors, officers,
employees, agents, invitees, representatives, successors and assigns, from
and
against any and all losses, claims, damages, liabilities, costs, and expenses
(including attorneys' fees and legal expenses) directly or indirectly arising
out of or attributable to the use, generation, manufacture, reproduction,
storage, release, threatened release, spill, discharge, disposal or presence
of
a Hazardous Material, including the costs of any required or necessary repair,
cleanup or other remedial work with respect to any property of any Borrower
or
any Real Estate Security given by it and the preparation and implementation
of
any closure, remedial or other required plans. All representations, warranties,
covenants and indemnifications in this Section 9.3 shall survive the payment
of
the Obligations and the termination or non-renewal of this
Agreement.
9.4
Payment
of Taxes and Claims.
Each
Borrower shall duly pay and discharge all taxes, assessments, contributions
and
governmental charges upon or against it or its properties or assets except
for
taxes the validity of which are being contested in good faith by appropriate
proceedings diligently pursued and available to such Borrower and with respect
to which adequate reserves have been set aside on their books. Borrowers
shall
be liable for any tax or penalties imposed on Lender as a result of the
financing arrangements provided for herein and Borrowers agree to indemnify
and
hold Lender harmless with respect to the foregoing, and to repay to Lender
on
demand the amount thereof, and until paid by Borrowers such amount shall
be
added and deemed part of the Loans, provided,
that,
nothing
contained herein shall be construed to require Borrowers to pay any income
or
franchise taxes attributable to the income of Lender from any amounts charged
or
paid hereunder to Lender. The foregoing indemnity shall survive the payment
of
the Obligations and the termination or non-renewal of this
Agreement.
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9.5 Insurance.
Borrowers shall at all times, maintain with financially sound and reputable
insurers insurance with respect to the Collateral against loss or damage
and all
other insurance of the kinds and in the amounts customarily insured against
or
carried by corporations of established reputation engaged in the same or
similar
businesses and similarly situated (including product liability insurance).
Said
policies of insurance shall be satisfactory to Lender as to form, amount
and
insurer. Borrowers shall furnish certificates, policies or endorsements to
Lender as Lender shall require as proof of such insurance, and, if Borrower
fails to do so, Lender is authorized, but not required, to obtain such insurance
at the expense of Borrowers. All policies shall provide for at least thirty
(30)
days prior written notice to Lender of any cancellation or reduction of coverage
and that Lender may act as attorney for Borrowers in obtaining, and at any
time
an Event of Default exists or has occurred and is continuing, adjusting,
settling, amending and canceling such insurance. Borrowers shall cause Lender
to
be named as a loss payee and an additional insured (but without any liability
for any premiums) under such insurance policies and Borrower shall obtain
non-contributory lender's loss payable endorsements to all insurance policies
in
form and substance satisfactory to Lender. Such lender's loss payable
endorsements shall specify that the proceeds of such insurance shall be payable
to Lender as its interests may appear and further specify that Lender shall
be
paid regardless of any act or omission by Borrower or any of its Affiliates.
At
its option, Lender may apply any insurance proceeds received by Lender at
any
time to the cost of repairs or replacement of Collateral and/or to payment
of
the Obligations, whether or not then due, in any order and in such manner
as
Lender may determine or hold such proceeds as cash collateral for the
Obligations.
9.6 Financial
Statements and Other Information.
(a)
Borrowers shall keep proper books and records in which true and complete
entries
shall be made of all dealings or transactions of or in relation to the
Collateral and the business of Borrower and its Subsidiaries (if any) in
accordance with GAAP. Borrowers shall (i) promptly furnish or cause to be
furnished to Lender all such financial and other information as Lender may
request relating to the Collateral and the assets, business and operations
of
Borrowers and shall notify the independent public accountants acting as auditors
to Borrowers that Lender is authorized to obtain such information directly
from
such accountants. Without limiting the foregoing Borrowers shall cause to
be
furnished to Lender: (i) within fifteen (15) days after the end of each fiscal
month, monthly unaudited consolidated and consolidating financial statements
of
Borrower and its Subsidiaries (including in each case balance sheets, statements
of income and loss, statements of cash flow, and statements of shareholders'
equity), all in reasonable detail, fairly presenting the financial position
and
the results of the operation of Borrower and its Subsidiaries as of the end
of
and through such fiscal month, (ii) within forty five (45) days after the
end of
each fiscal quarter, unaudited consolidated and consolidating financial
statements of Borrower and its Subsidiaries (including the information specified
in Section 9.6(a)(i) hereof),as of the end and through the fiscal quarter
then
ended and (iii) within ninety (90) days after the end of each fiscal year,
drafts of audited consolidated and consolidating financial statements of
Borrower and its Subsidiaries and drafts of audited separate financial
statements of each Borrower(including balance sheets, statements of income
and
loss, statements of cash flow and statements of shareholders' equity), and
the
accompanying notes thereto, all in reasonable detail, fairly presenting the
financial position and the results of the operations of Borrower as of the
end
of and for such fiscal year and (iv) within one hundred twenty (120) days
after
the end of each fiscal year, audited consolidated and consolidating financial
statements Borrower and its Subsidiaries and separate audited financial
statements of each Borrower (including balance sheets, statements of income
and
loss, statements of cash flow and statements of shareholders' equity), and
the
accompanying notes thereto, all in reasonable detail, fairly presenting the
financial position and the results of the operations of Borrower and its
Subsidiaries and of each Borrower separately, as of the end of and for such
fiscal year, together with the unqualified opinion of independent certified
public accountants, which accountants shall be an independent accounting
firm
selected by Borrower and reasonably acceptable to Lender, that such financial
statements have been prepared in accordance with GAAP, and present fairly
the
results of operations and financial condition of Borrower as of the end of
and
for the fiscal year then ended. The financial statements(i) referred to in
Section 9.6(a)(i), (ii) and (iii) hereof shall be accompanied by a certificate
of the Chief Financial Officer of Borrower to the effect that such financial
statements are correct in all material respects, subject to normal year end
audit adjustments, (ii) referred to in Section 9.6(a)(ii), (iii) and (iv)
hereof
shall be accompanied by a certificate of the Chief Financial Officer of Borrower
to the effect that Borrower is in compliance with the covenants set forth
in
Sections 9.14, 9.15 and 9.16 hereof , as of the close of the period to which
such financial statements relate, together with a schedule showing the
calculations used in determining such compliance and that no Event of Default
or
event which would with the giving of notice or passage of time, constitute
an
Event of Default exists and is continuing, (iii) referred to in Section
9.6(a)(iv) hereof shall be accompanied by a certificate of the Chief Financial
Officer of Borrower to the effect that Borrower is in compliance with the
covenants set forth in Sections 9.14, 9.15, 9.16 and 9.17 hereof , as of
the
close of the period to which such financial statements relate, together with
a
schedule showing the calculations used in determining such compliance and
that
no Event of Default or event which would with the giving of notice or passage
of
time, constitute an Event of Default exists and is continuing and (iv) referred
to in Section 9.6(a)(ii),(iii) and (iv) hereof shall be accompanied by a
certificate of the Chief Executive Officer and Chief Financial Officer of
Borrower setting forth the Adjusted Net Worth of Borrower as of the respective
dates of such financial statements and shall be accompanied by a schedule
showing the calculations used in determining such Adjusted Net Worth and
the
appraisals on which such calculations are based, which appraisals( and the
appraisers performing such appraisals) must be acceptable to Lender in all
respects; provided
that,
for
purposes of determining Adjusted Net Worth (A) at any time an Event Of Default
or act, condition or event which with the giving of notice or passage of
time or
both would constitute an Event of Default shall exist or (B) on the request
of
Lender, but not more often than once in any two(2) year period, Borrower
shall,
within fifteen(15) working days after request of Lender therefor furnish
to
Lender new appraisals of all of the assets of Borrower, in form and substance
and from appraisers satisfactory to Lender.
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(b)
Borrowers shall promptly notify Lender in writing of the details of (i) any
loss, damages, investigation, action, suit, proceeding or claim which has
or
could result in a Material Adverse Effect, (ii) any Material Contract of
a
Borrower being terminated or amended or any new Material Contract entered
into
(in which event Borrowers shall provide Lender with a copy of such Material
Contract), (iii) any order, judgment or decree in excess of $50,000 which
has
been entered against Borrower or any of its properties or assets, (iv) any
notification from a governmental authority of violation of laws or regulations
received by a Borrower, (v) any ERISA Event and (vi) the occurrence of any
Event
of Default or act, condition or event which with the giving of notice or
the
passage of time or both, would constitute an Event of Default.
(c)
Borrowers shall promptly after the sending or filing thereof furnish or cause
to
be furnished to Lender copies of all reports which Inyx sends to its
stockholders generally and copies of all reports and registration statements
which Inyx files with the Securities and Exchange Commission, any national
securities exchange or the National Association of Securities Dealers,
Inc.
(d)
Borrowers shall furnish or cause to be furnished to Lender such budgets,
forecasts, projections and other information respecting the Collateral and
the
business of Borrowers as Lender may, from time to time, reasonably request.
Lender is hereby authorized to deliver a copy of any financial statement
or any
other information relating to the business of Borrower to any court or other
government agency upon request therefor or to any participant or assignee
or
prospective participant or assignee. Borrower hereby irrevocably authorizes
and
directs all of its accountants or auditors to deliver to Lender, at Borrower’s
expense, copies of the financial statements of Borrower and any reports or
management letters prepared by such accountants or auditors on behalf of
Borrower and to disclose to Lender such information as they may have regarding
the business of Borrower. Any documents, schedules, invoices or other papers
delivered to Lender may be destroyed or otherwise disposed by Lender one
(1)
year after the same are delivered to Lender, except as otherwise designated
by
Borrower to Lender in writing.
(e)
Borrowers shall immediately notify Lender in writing of (i) the occurrence
or
existence of any Event of Default or any act, condition or event which is
an
Event of Default or which with the giving of notice or passage of time or
both
would be an Event of Default, hereunder and (ii) the occurrence or existence
of
any default or event of default or any act, condition or event which is a
default or an event of default or which with the giving of notice or passage
of
time or both would be an event of default, under any agreement or instrument
to
which any Affiliate of a Borrower is a party, relating to any Debt.
(f)
Borrowers shall deliver, or cause to be delivered, to Lender, within ninety
(90)
days from the date hereof, an opening balance sheet of Borrowers after giving
effect to the transactions contemplated by this Agreement and the Purchase
Agreements, together with the opinion of independent certified public
accountants, which accountants shall be an independent accounting firm selected
by Borrower and reasonably acceptable to Lender, to the effect that such
opening
balance sheet has been prepared in accordance with GAAP and presents fairly
the
financial condition of Borrower as of such date.
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9.7 Sale
of Assets, Consolidation, Merger, Dissolution, Etc.
A
Borrower shall not directly or indirectly, (a) merge into or with or consolidate
with any other Person or permit any other Person to merge into or with or
consolidate with it or (b) sell, assign, lease, transfer, abandon or otherwise
dispose of (i) any Capital Stock, except in a transaction involving public
offering, or indebtedness to any other Person or (ii) any of its assets to
any
other Person (except for (A) sales of Inventory in the ordinary course of
business, (B) the disposition of Equipment no longer used in the business
of
Borrower so long as (1) any proceeds are paid to Lender and (2) such sales
do
not involve Equipment having an aggregate fair market value in excess of
$50,000
for all such Equipment disposed of in any fiscal year of Borrower, (C) sales
of
Equipment (1) to which Lender shall have consented in writing and(2) any
proceeds of which are paid to Lender for application as determined by Lender
or
(c) form or acquire any Subsidiary, or transfer any assets to any Subsidiary,
or
(d) wind up, liquidate or dissolve or (e) agree to do any of the foregoing.
9.8 Encumbrances.
A
Borrower shall not create, incur, assume or suffer or permit to exist any
security interest, mortgage, pledge, lien, charge or other encumbrance of
any
nature whatsoever on any of its assets or properties, including the Collateral,
except:
(a)
liens and security interests of Lender; (b) liens securing the payment of
taxes,
either not yet overdue or the validity of which are being contested in good
faith by appropriate proceedings diligently pursued and available to Borrower
and with respect to which adequate reserves have been set aside on its books;
(c) non-consensual statutory liens (other than liens securing the payment
of
taxes) arising in the ordinary course of Borrower’s business to the extent: (i)
such liens secure indebtedness which is not overdue or (ii) such liens secure
indebtedness relating to claims or liabilities which are fully insured and
being
defended at the sole cost and expense and at the sole risk of the insurer
or
being contested in good faith by appropriate proceedings diligently pursued
and
available to Borrower, in each case prior to the commencement of foreclosure
or
other similar proceedings and with respect to which adequate reserves have
been
set aside on its books; (d) zoning restrictions, easements, licenses, covenants
and other restrictions affecting the use of Real Property which do not interfere
in any material respect with the use of such Real Property or ordinary conduct
of the business of Borrower as presently conducted or proposed to be conducted,
thereon or materially impair the value of the Real Property which may be
subject
thereto; (e) purchase money security interests in Equipment (including Capital
Leases entered into after the date hereof), not to exceed $100,000 in the
aggregate at any time outstanding so long as such security interests and
mortgages do not apply to any property of Borrower other than the Equipment
so
acquired, and the indebtedness secured thereby does not exceed the cost of
the
Equipment so acquired, as the case may be and (f) the security interests
and
liens set forth on Schedule 8.4 hereto, including those securing the
indebtedness to Seller referred to in Section 4.1(dd) hereof, which have
been
fully subordinated to the liens and security interests of Lender to Lender’s
satisfaction.
9.9
Indebtedness.
Borrower shall not incur, create, assume, become or be liable in any manner
with
respect to, or suffer or permit to exist, any obligations or indebtedness,
except:
(a)
the
Obligations;
-65-
(b)
trade
accounts payable and other trade obligations and normal accruals in the ordinary
course of business not yet due and payable, or with respect to which Borrower
is
contesting in good faith the amount or validity thereof by appropriate
proceedings diligently pursued and available to Borrower and with respect
to
which adequate reserves have been set aside on their books;
(c)
purchase money indebtedness (including Capital Leases) to the extent not
incurred or secured by liens (including Capital Leases) in violation of any
other provision of this Agreement;
(d)
unsecured indebtedness of Borrower for borrowed money incurred after the
date
hereof, owing to any Person other than any shareholder, officer, director,
agent, employee or Affiliate of Borrower on commercially reasonable rates
and
terms pursuant to an arm's length transaction; provided,
that,
(i)
Lender shall have received not less than five (5) Business Days prior written
notice of the intention to incur such indebtedness, which notice shall set
forth
in reasonable detail satisfactory to Lender, the amount of such indebtedness,
the person to whom such indebtedness will be owed, the interest rate, the
schedule of repayments and maturity date with respect thereto and such other
information as Lender may reasonably request with respect thereto, (ii) Lender
shall have received true, correct and complete copies of all agreements,
documents and instruments evidencing or otherwise related to such indebtedness,
(iii) the aggregate amount of such indebtedness at any time outstanding shall
not exceed $100,000, (iv) on and before the date of incurring such indebtedness
and after giving effect thereto, no Event of Default, or event which with
the
giving notice or the passage of time or both would constitute an Event of
Default, shall exist or have occurred and be continuing, (v) Borrower may
only
make regularly scheduled payments of principal and interest in respect of
such
indebtedness in accordance with the terms of the agreement or instrument
evidencing or giving rise to such indebtedness as in effect on the date of
the
execution thereof, and (vi) Borrower shall not, directly or indirectly, (A)
make
any prepayments or other non-mandatory payments in respect of such indebtedness,
or (B) amend, modify, alter or change the terms of such indebtedness or any
agreement, document or instrument related thereto, or (C) redeem, retire,
defease, purchase or otherwise acquire such indebtedness, or set aside or
otherwise deposit or invest any sums for such purpose, and (vii) Borrower
shall
furnish to Lender all notices, demands or other materials in connection with
such indebtedness either received by Borrower or on its behalf, promptly
after
the receipt thereof, or sent by Borrower, or on its behalf, concurrently
with
the sending thereof, as the case may be;
(e)
indebtedness of Borrower described on Schedule 9.9 hereto; provided,
that:
(i) the
individual principal amounts of such indebtedness and aggregate principal
amounts of all such indebtedness shall not exceed the amounts shown on such
Schedule 9.9 hereto less the aggregate amount of all repayments, repurchases
or
redemptions, whether optional or mandatory in respect thereof, plus interest
thereon at the rate provided for in such agreement or instrument as in effect
on
the date hereof, (ii) Borrower may only make regularly scheduled payments
of
principal and interest in respect of such indebtedness in accordance with
the
terms of the agreement or instrument evidencing or giving rise to such
indebtedness, (iii) Borrower shall not, directly or indirectly, (A) amend,
modify, alter or change the terms of such indebtedness or any agreement,
document or instrument related thereto or (B) redeem, retire, defease, purchase
or otherwise acquire such indebtedness, or set aside or otherwise deposit
or
invest any sums for such purpose, and (iv) Borrower shall furnish to Lender
all
notices or demands in connection with such indebtedness either received by
Borrower or on its behalf, promptly after the receipt thereof, or sent by
Borrower or on its behalf, concurrently with the sending thereof, as the
case
may be;
(f)
Subordinated Debt of Borrower issued to the Seller, pursuant to the Purchase
Agreements; and
(g)
Indebtedness of Inyx EU to CMSL incurred pursuant to the loan agreement
described in Section 4.1(gg) hereof.
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9.10 Loans,
Investments, Guarantees, Etc.
Borrower
shall not directly or indirectly, make or permit to exist any loans or advance
money or property to any person, or invest in (by capital contribution, dividend
or otherwise) or purchase or repurchase the Capital Stock or indebtedness
or all
or a substantial part of the assets or property of any Person, or form or
acquire any Subsidiaries or guarantee, assume, endorse, or otherwise become
responsible for (directly or indirectly) the indebtedness, performance,
obligations or dividends of any Person or agree to do any of the foregoing,
except:
(a) the
endorsement of instruments for collection or deposit in the ordinary course
of
business; (b) investments in cash or Cash Equivalents; provided that,
as to
any of the foregoing, unless waived in writing by Lender, Borrower shall
take
such actions as are deemed necessary by Lender to perfect the security interest
of Lender in such investments; (c) the loans, advances and guarantees set
forth
on Schedule 9.10 hereto; provided,
that,
as to
such loans, advances and guarantees, (i) Borrower shall not, directly or
indirectly, (A) amend, modify, alter or change the terms of such loans, advances
or guarantees or any agreement, document or instrument related thereto, or
(B)
as to such guarantees, redeem, retire, defease, purchase or otherwise acquire
the obligations arising pursuant to such guarantees, or set aside or otherwise
deposit or invest any sums for such purpose, and (ii) Borrower shall furnish
to
Lender all notices or demands in connection with such loans, advances or
guarantees or other indebtedness subject to such guarantees either received
by
Borrower or on its behalf, promptly after the receipt thereof, or sent by
Borrower or on its behalf, concurrently with the sending thereof, as the
case
may be; (d) loans and advances not in excess of the amount of $100,000
outstanding in the aggregate for all such loans and advances during the term
of
this Agreement; provided
that,
except
as permitted by Section 9.10 (e) hereof, no such loan or advance shall be
made
to any Affiliate of Borrower, to the holder of any Capital Stock of Borrower
or
to any Person described on Schedule 9.21 hereto; and (e) loans or advances
described in Section 9.9(g) hereof.
9.11
Transactions
with Affiliates.
Borrower shall not, directly or indirectly, (a) purchase, acquire or lease
any
property from, or sell, transfer or lease any property to, any officer,
director, agent or Person Affiliated with Borrower, except in the ordinary
course of business and pursuant to the reasonable requirements of Borrower’s
business and upon fair and reasonable terms no less favorable to Borrower
than
such Person would obtain in a comparable arm's length transaction with an
unaffiliated person (but in no event may Borrower sell, transfer or lease
any
property to any Subsidiary) or (b) make any payments (i) of any indebtedness
owing to any officer, employee, shareholder or director or other person
Affiliated with Borrower or (ii) of any compensation to any employee, except
reasonable compensation to employees for services rendered to in the ordinary
course of business; provided
that,
nothing
contained in this Section 9.11 shall be construed to permit any Borrower
to take
any of the actions prohibited by Section 9.26.
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9.12
Additional
Bank Accounts.
Borrower shall not, directly or indirectly, open, establish or maintain any
deposit account, investment account or any other account with any bank or
other
financial institution, other than the Blocked Accounts and the accounts set
forth in Schedule 8.8 hereto, except: (a) as to any new or additional Blocked
Accounts and other such new or additional accounts which contain any Collateral
or proceeds thereof, with the prior written consent of Lender and subject
to
such conditions thereto as Lender may establish and (b) as to any accounts
used
by Borrower to make payments of payroll, taxes or other obligations to third
parties, after prior written notice to Lender.
9.13
Compliance
with ERISA.
(a)
Borrower shall not, with respect to any “employee benefit plans” maintained by
Borrower or any of its ERISA Affiliates: (i) terminate any of such employee
benefit plans so as to incur any liability to the Pension Benefit Guaranty
Corporation established pursuant to ERISA, (ii) allow or suffer to exist
any
prohibited transaction involving any of such employee benefit plans or any
trust
created thereunder which would subject Borrower or such ERISA Affiliate to
a tax
or penalty or other liability on prohibited transactions imposed under Section
4975 of the Code or ERISA, (iii) fail to pay to any such employee benefit
plan
any contribution which it is obligated to pay under Section 302 of ERISA,
Section 412 of the Code or the terms of such plan, (iv) allow or suffer to
exist
any accumulated funding deficiency, whether or not waived, with respect to
any
such employee benefit plan, (v) allow or suffer to exist any occurrence of
a
reportable event(other than those as to which the Pension Benefit Guaranty
Corporation has waived notice pursuant to Regulation) or any other event
or
condition which presents a material risk of termination by the Pension Benefit
Guaranty Corporation of any such employee benefit plan that is a single employer
plan, that is a single employer plan, which termination could result in any
liability to the Pension Benefit Guaranty Corporation, (vi) incur any withdrawal
liability with respect to any multi employer pension plan; and (vii) fail
to
maintain each employee benefit plan in compliance in all material respects
with
the applicable provisions of ERISA, the Code and other Federal State and
Commonwealth Law.
(b)
As
used in this Section 9.13 and Section 8.14 the terms (i) “employee benefit
plans”, “accumulated funding deficiency and reportable event” shall have the
respective meanings assigned to them in ERISA, and the term “prohibited
transaction” shall have the meaning assigned to it in Section 4975 of the Code
and “ERISA”, (ii) “ERISA Affiliate” shall mean any Person required to be
aggregated with Borrower or any of its Subsidiaries under Sections 414(b),
414(c), 414(m) or 414(o) of the Code and “ERISA” shall mean the United States
Employee Retirement Income Security Act of 1974 .
9.14 Working
Capital.
Borrower shall, at all times, maintain Working Capital of not less than
$5,000,000.
9.15
Net
Worth.
Borrowers shall, at all times, maintain (a) an Adjusted Net Worth of not
less
than $8,000,000 and (b) a Tangible Net Worth of not less than
$18,000,000.
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9.16
Suppressed
Availability.
(a)
Borrowers shall, maintain with Lender, at all times after the date hereof,
Suppressed Availability of not less than $500,000. Lender may, but shall
not be
required to and in addition to its other rights, in its discretion, use the
amount of Suppressed Availability (i) to pay costs and expenses incurred
by
Borrowers or chargeable to Borrowers under this Agreement, (ii) to cure defaults
of Borrowers under this Agreement, or by Borrower or any other Obligor under
any
of the other Financing Agreements or any other agreement of Borrowers with
any
third party, (iii) to pay taxes of Borrowers and (iv) for, any other purpose
permitted by, or to make any other payment which Lender is authorized to
make,
under this Agreement.
(b)
If
the amount of Suppressed Availability, shall at any time be less than $500,000
Borrowers shall, at all times, on notice by Lender, immediately take such
actions as are required by Lender, including delivery to Lender of cash
collateral so that the amount of Suppressed Availability shall not be less
than
$500,000.
9.17
Excess
Cash Flow.
Borrower shall, for each of its fiscal years during the Term of this Agreement,
have Excess Cash Flow of not less than $4,000,000.
9.18
Changes
in Equity.
A
Borrower shall not (a) cease to have its Capital Stock or other equity interests
owned by the Persons now owning such Capital Stock or other equity interests
in
the same percentages of ownership now held by such Persons or (b) issue,
sell or
deliver any shares of its Capital Stock or other equity interests or rights,
options, warrants or calls to purchase any shares of its Capital Stock other
equity interests or securities convertible into shares of its Capital Stock
or
other equity interests, except in each case as a result of a transaction
involving a public offering.
9.19
Restricted
Junior Payments.
Borrower shall not, directly or indirectly, make, or agree to make, any
Restricted Junior Payment; except
that (a)
CMSL
may make Restricted Junior Payments contemplated by Section 9.27 hereof and
(b)
Borrowers shall repay Inyx on the Closing Date the indebtedness shown on
Schedule 9.9 hereof.
9.20
Costs
and Expenses.
Borrowers shall pay to Lender on demand all costs, expenses, filing fees
and
taxes paid or payable in connection with the preparation, negotiation,
execution, delivery, recording, administration, collection, liquidation,
enforcement and defense of the Obligations, Lender's rights in the Collateral,
this Agreement, the other Financing Agreements and all other documents related
hereto or thereto, including any amendments, supplements or consents which
may
hereafter be contemplated (whether or not executed) or entered into in respect
hereof and thereof, including: (a) all costs and expenses of filing or recording
(including Uniform Commercial Code financing statement filing taxes and fees,
documentary taxes, intangibles taxes and mortgage recording taxes and fees,
if
applicable); (b) all costs and expenses and fees for insurance premiums,
environmental audits, surveys, assessments, engineering reports and inspections,
appraisal fees and search fees; (c) costs and expenses of remitting loan
proceeds, collecting checks and other items of payment, and establishing
and
maintaining the Blocked Accounts or Lender Accounts, together with Lender's
customary charges and fees with respect thereto; (d) charges, fees or expenses
charged by any bank or issuer in connection with the Letter of Credit
Accommodations; (e) costs and expenses of preserving and protecting the
Collateral; (f) costs and expenses paid or incurred in connection with obtaining
payment of the Obligations, enforcing the security interests and liens of
Lender, selling or otherwise realizing upon the Collateral, and otherwise
enforcing the provisions of this Agreement and the other Financing Agreements
or
defending any claims made or threatened against Lender arising out of the
transactions contemplated hereby and thereby (including preparations for
and
consultations concerning any such matters); (g) all out-of-pocket expenses
and
costs heretofore and from time to time hereafter incurred by Lender during
the
course of periodic field examinations of the Collateral and Borrower's
operations including the costs of field testing by third party providers
retained by Lender, plus a per diem charge at the rate of $750.00 per person
per
day plus travel, hotel and all other out of pocket expenses for Lender's
examiners in the field and office; and (h) the fees and disbursements of
counsel
(including legal assistants) to Lender in connection with any of the
foregoing.
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9.21
Environmental
Audits.
Within
ninety (90) days from of a request by Lender, from time to time, Borrowers
shall
deliver to Lender, at its expense updated environmental audits of the Real
Property and the Real Estate Security conducted by an environmental firm
acceptable to Lender and in form, scope and methodology satisfactory to Lender
confirming that (a) Borrower is in compliance with all Environmental Laws,
in
all material respects and (b) there is no material potential or actual liability
of Borrower for any remedial action with respect to any environmental condition
or any other significant environmental problems; provided
that,
if such
audits cannot confirm such compliance or that there is no such liability,
Borrower shall forthwith at their expense, diligently take all remedial action
necessary to cure such condition, effect such compliance and discharge such
liability, to such firm’s satisfaction.
9.22
Management
Compensation.
Borrowers will not directly or indirectly, pay compensation or management,
consulting or other fees for management or similar services directly or
indirectly, to or for the benefit of (a) as to those Persons listed on Schedule
9.22 hereto in per annum amounts in the aggregate in excess of that set forth
and determined as described on Schedule 9.22 hereto, including performance
and
incentive bonuses, for each such person, (b) as to all other officers, directors
or consultants amounts in excess of that which is reasonable, ordinary and
necessary and (c) Inyx Canada, Inc.
9.23
Business
Names.
Borrowers shall not use any trade names in the conduct of its business and
operations other than (a)those listed on Schedule 8.11 hereto and (b)those
trade
names which Borrower may hereafter use after (i) having given Lender at least
15
Business Days notice after the filing for registration of such name and (ii)
taking all such actions and executing and delivering all such agreements,
instruments, notices and documents as Lender shall request to(A) grant to
Lender
a valid and perfected first and prior security interest and lien therein
and (B)
protect and preserve Lender’s security interests and liens in the other
Collateral.
9.24
Additional
Covenants.
(a)
Borrowers shall deliver to Lender, within 30 days after request by Lender
a
report of essential payments made and expenses incurred by Borrower, during
the
period requested by Lender in such detail as Lender may request.
(b)
Borrowers shall deliver to Lender, within 15 days after request by Lender,
a
comparison of its actual availability for the period designated by Lender
with
its budgeted availability for such period.
(c)
Borrowers shall provide Lender, in addition to the other financial information
to be provided by Borrower hereunder, balance sheets, income statements,
cash
flows, availability projections(including
underlying assumptions therefore), inventory locations and a detail of
transactions with Affiliates, in a level of detail acceptable to Lender,
on a
monthly basis until March 31, 2006 and on a quarterly basis
thereafter.
9.25
Loan
Amount Certificate.
Borrowers shall, promptly upon the request of Lender, but not more often
the 4
times in any fiscal year and in any event together with the quarterly and
audited Financial Statements referred to in Section 9.6 hereof furnish to
Lender
a certificate, signed by its President and Chief Financial Officer, stating
as
of the date thereof (a) the then outstanding balance of the Loans, (b) that
no
defense, offset or counterclaim exists with respect to Borrower’s obligation to
pay such Loans or if any such defense, offset or counterclaim does exist,
specifying in detail the nature and amount thereof and the facts upon which
based and (c) that they have reviewed this Agreement and the other Financing
Agreements to which Borrower is a party and have made, or caused to be made
under their supervision, a review in reasonable detail of the transactions
and
condition of the Borrower and that, based on such review, the Borrower has
observed or performed all of their covenants and other agreements(including
those related to Environmental Laws), and satisfied every condition, contained
in this Agreement and the other Financing Agreements to be observed, performed
or satisfied by the Borrower and that such review has not disclosed the
existence, and that such officers do not have knowledge of the existence
as at
the date of the certificate, of any Event of Default or event or condition
which, with the giving of notice or the lapse of time or both, would constitute
an Event of Default or if such officer has any knowledge of any such Event
of
Default or other event or condition, specifying same and what action the
Borrower is taking or proposes to take with respect thereto.
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9.26
No
United States Nexus.
(a) No
Borrower shall create, incur or suffer to exist any Debt, liability or other
obligations of any Borrower of any kind (whether fixed or contingent, due
or to
become due or otherwise, including any Debt, liability or other obligation
to
any Affiliate)) to any Person:
(i)
Resident or domiciled in the United States,
(ii)
Incorporated in the United States,
(iii)
Doing business in the United States,
(iv)
Maintaining an office or place of business located in the United States,
or
(v)
Having any interest in any asset located in the United States;
other
than to
a
branch or permanent establishment of any such Person, not located in the
United
States.
(b)
Borrowers shall not directly or indirectly:
(i)
Own
any interest in any asset located in the United States,
(ii)
Engage in any trade or business or do or transact any business in the United
States,
(iii)
Maintain any office or place of business located in the United States,
or
(iv)
Otherwise become domiciled in, resident of, or have any presence in the United
States.
(c)
As
used in this Section 9.26 the term “United States” has the meaning prescribed by
Section 1.01(55) of the United States Bankruptcy Code.
9.27
Upstream
Loan Agreement.
CMSL
shall loan and advance funds to Inyx EU in such amounts and at such times
as may
be required by Inyx EU to enable Inyx EU to repay Lender the Loans made by
Lender to Inyx EU and all other Obligations of Inyx EU to Lender, when
due.
9.28 Further
Assurances.
At the
request of Lender at any time and from time to time, Borrowers shall at their
expense, duly execute and deliver, or cause to be duly executed and delivered,
such further agreements, documents and instruments, and do or cause to be
done
such further acts as may be necessary or proper to evidence, perfect, maintain
and enforce the security interests of Lender, and the priority thereof, in
the
Collateral and to otherwise effectuate the provisions or purposes of this
Agreement or any of the other Financing Agreements. Lender may at any time
and
from time to time request a certificate from an officer of Borrowers
representing that all conditions precedent to the making of Loans and providing
Letter of Credit Accommodations contained herein are satisfied. In the event
of
such request by Lender, Lender may, at its option, cease to make any further
Loans and providing Letter of Credit Accommodations until Lender has received
such certificate and, in addition, Lender has determined that such conditions
are satisfied. Where permitted by law, Borrowers hereby authorizes Lender
to
execute and file one or more UCC financing statements signed only by
Lender.
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9.29 United
Kingdom Covenants.
| (a) |
The
Borrowers shall (or shall ensure that the relevant Borrower will)
at the
request of the Lender submit simultaneously with the Borrowers
(or the
relevant Borrower's) application to Land Registry for registration
of any
mortgage or charge created by a Financing Agreement, any Land Registry
forms EX1 and EX1A, the relevant documents and cheque for the requisite
fee, each as provided by the Lender to the
Borrowers.
|
| (b) |
Each
Borrower shall (and shall ensure that each of its Subsidiaries
will)
maintain its centre of main interests in England and Wales for
the
purposes of the “Insolvency Regulation” (Insolvency Regulation means the
Council Regulation (EC) No.1346/2000 of 29 May 2000
on Insolvency Proceedings).
|
| (c) |
The
Borrowers shall (and shall ensure that each of its Subsidiaries
will)
within any relevant period laid down in any statute, law or regulation
applicable in the jurisdiction of its incorporation make all necessary
declarations, obtain all necessary authorizations and deliver all
necessary forms and documents required to be delivered to, filed
with or
registered with any governmental, statutory or other body or agency
by it
in connection with the Financing
Agreements.
|
| (d) |
Each
Borrower shall (and shall ensure that each of its Subsidiaries
will) take
all reasonable and practical steps to preserve and enforce its
rights
arising under the Purchase
Agreement.
|
| (e) |
No
Borrower operates any defined benefit pension
schemes.
|
| (f) |
Each
Borrower shall ensure that at all times any unsecured and unsubordinated
claims of the Lender against it under the Financing Agreements
rank at
least pari passu with the claims of all its other unsecured and
unsubordinated creditors except those creditors whose claims are
mandatorily preferred by laws of general application to
companies.
|
| (g) |
The
Borrowers shall comply in all respects with sections 151
to 158 of
the Companies ▇▇▇ ▇▇▇▇, including in relation to the execution
of the
Financing Agreements and the payment of amounts due under this
Agreement.
|
| (h) |
No
Borrower shall permit or effect any variations, novations or amendments
to
the Purchase Agreement.
|
-72-
Section
10. Events
of Default And Remedies.
10.1 Events
of Default.
The
occurrence or existence of any one or more of the following events are referred
to herein individually as an "Event of Default" and collectively as "Events
of
Default":
(a)
any
Borrower (i) fails to pay when due any of the Obligations (including any
mandatory prepayment of Term Loan D or any Voluntary Prepayment, notice of
intent to pay has been given by Borrower to Lender) or (ii) any Borrower
fails
to perform any of the terms, covenants, conditions or provisions contained
in
this Agreement or any of the other Financing Agreements except those described
in Section 10(a)(i) above and such failure shall continue for ten (10) days;
except that,
such
ten (10) day cure period shall not be applicable in the case of (A) any failure
which cannot be cured at all or within such ten (10) day period, (B) an
intentional breach by a Borrower or (C) a failure which has been the subject
of
a prior failure within the preceding three (3) months;
(b)
any
representation, warranty or statement of fact made by any Borrower to Lender
in
this Agreement, the other Financing Agreements or any other agreement, schedule,
confirmatory assignment or otherwise shall when made or deemed made be false
or
misleading in any material respect;
(c)
any
Obligor revokes, terminates or fails to perform any of the terms, covenants,
conditions or provisions of any guarantee, endorsement or other agreement
of
such party in favor of Lender or any representation, warranty or statements
of
fact made by any such Person in any such document shall when made or deemed
made
be false or misleading in any material respect;
(d)
any
judgment for the payment of money is rendered against any Borrower or any
Obligor in excess of $100,000 in any one case, or in excess of $200,000 in
the
aggregate and shall remain undischarged or unvacated for a period in excess
of
sixty (60) days or execution shall at any time not be effectively stayed,
or any
judgment other than for the payment of money, or injunction, attachment,
garnishment or execution is rendered against Borrower or any Obligor or any
of
their assets;
(e)
any
Borrower or any Obligor which is a partnership, limited liability company,
limited liability partnership or a corporation(wherever organized or
constituted), dissolves or suspends or discontinues doing business;
(f)
any
Borrower shall not be Solvent or any Borrower shall make an assignment for
the
benefit of creditors, make or send notice of a bulk transfer or call a meeting
of its creditors or principal creditors;
(g)
a
case or proceeding under the bankruptcy laws of the United States of America
now
or hereafter in effect or under any insolvency, reorganization, receivership,
readjustment of debt, dissolution, winding up or liquidation law or statute
of
any jurisdiction now or hereafter in effect (whether at law or in equity)
is
filed against any Borrower or any Obligor or all or any part of their respective
properties and such petition or application is not dismissed within thirty(30)
days after the date of its filing or any Borrower or any Obligor shall file
any
answer admitting or not contesting such petition or application or indicates
its
consent to, acquiescence in or approval of any such action or proceeding
or the
relief requested is granted sooner.
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(h)
a
case or proceeding under the bankruptcy laws of the United States of America
now
or hereafter in effect or under any insolvency, reorganization, receivership,
readjustment of debt, dissolution or liquidation law or statute of any
jurisdiction now or hereafter in effect (whether at a law or equity) is filed
by
any Borrower or any Obligor or for all or any part of its property;
(i)
any
default by any Borrower or any Obligor under any agreement, document or
instrument relating to any indebtedness for borrowed money owing to any person
other than Lender, or under any Capital Lease obligations, contingent
indebtedness in connection with any guarantee, letter of credit, indemnity
or
similar type of instrument in favor of any person other than Lender, in any
case
in an amount in excess of $100,000, which default continues for more than
the
applicable cure period, if any, with respect thereto, or any default by any
Borrower or any Obligor under any Material Contract, including any Manufacturing
Contract or, lease, license, or other obligation to any person other than
Lender, which default continues for more than the applicable cure period,
if
any, with respect thereto;
(j)
there
shall be a Change of Control or change in the present senior management of
Inyx
or any Borrower;
(k)
the
indictment or threatened indictment of Inyx, any Borrower or any Obligor
under
any criminal statute, or commencement or threatened commencement of any criminal
or civil proceedings against Inyx, any Borrower or any Obligor, pursuant
to
which statute or proceedings the penalties or remedies sought or available
include forfeiture of any of the property of any Borrower or any
Obligor;
(l)
there
shall be a material adverse change in the business, assets or prospects of
Inyx,
any Borrower or any Obligor after the date hereof;
(m)
there
shall be an event of default under any of the other Financing
Agreements;
(n)
there
shall be an event of default under any of the Parent Financing Agreements;
or
(o)
there
shall be any pending or threatened action or proceeding relating to the
suspension, revocation or termination of any License or there shall exist
a
material violation of any term or provision thereof or a Borrower shall
otherwise not be operating in full compliance with all material terms
thereof.
10.2 Remedies.
(a) At
any
time an Event of Default exists or has occurred and is continuing, Lender
shall
have all rights and remedies provided in this Agreement, the other Financing
Agreements, the Uniform Commercial Code and other applicable law, including
English law, all of which rights and remedies may be exercised without notice
to
or consent by Borrower or any Obligor except as such notice or consent is
expressly provided for hereunder or required by applicable law. All rights,
remedies and powers granted to Lender hereunder, under any of the other
Financing Agreements, the Uniform Commercial Code, English law or other
applicable law, are cumulative, not exclusive and enforceable, in Lender's
discretion, alternatively, successively, or concurrently on any one or more
occasions, and shall include, without limitation, the right to apply to a
court
of equity for an injunction to restrain a breach or threatened breach by
Borrowers of this Agreement or any of the other Financing Agreements. Lender
may, at any time or times, proceed directly against Borrowers or any Obligor
to
collect the Obligations without prior recourse to the Collateral.
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(b) Without
limiting the foregoing, at any time an Event of Default exists or has occurred
and is continuing, Lender may, in its discretion and without limitation,
(i)
accelerate the payment of all Obligations and demand immediate payment thereof
to Lender (provided,
that,
upon
the occurrence of any Event of Default described in Sections 10.1(g), or
10.1(h), all Obligations shall automatically become immediately due and
payable), (ii) with or without judicial process or the aid or assistance
of
others, enter upon any premises on or in which any of the Collateral may
be
located and take possession of the Collateral or complete processing,
manufacturing and repair of all or any portion of the Collateral, (iii) require
Borrower at Borrowers’ expense, to assemble and make available to Lender any
part or all of the Collateral at any place and time designated by Lender,
(iv)
collect, foreclose, receive, appropriate, setoff and realize upon any and
all
Collateral, (v) remove any or all of the Collateral from any premises on
or in
which the same may be located for the purpose of effecting the sale, foreclosure
or other disposition thereof or for any other purpose, (vi) sell, lease,
transfer, assign, deliver or otherwise dispose of any and all Collateral
(including entering into contracts with respect thereto, public or private
sales
at any exchange, broker's board, at any office of Lender or elsewhere) at
such
prices or terms as Lender may deem reasonable, for cash, upon credit or for
future delivery, with the Lender having the right to purchase the whole or
any
part of the Collateral at any such public sale, all of the foregoing being
free
from any right or equity of redemption of Borrowers, which right or equity
of
redemption is hereby expressly waived and released by Borrowers and/or (vii)
terminate this Agreement. If any of the Collateral is sold or leased by Lender
upon credit terms or for future delivery, the Obligations shall not be reduced
as a result thereof until payment therefor is finally collected by Lender.
If
notice of disposition of Collateral is required by law, ten (10) days prior
notice by Lender to Borrower designating the time and place of any public
sale
or the time after which any private sale or other intended disposition of
Collateral is to be made, shall be deemed to be reasonable notice thereof
and
Borrowers waive any other notice. In the event Lender institutes an action
to
recover any Collateral or seeks recovery of any Collateral by way of prejudgment
remedy, Borrowers waive the posting of any bond which might otherwise be
required.
(c) Lender
may apply the cash proceeds of Collateral actually received by Lender from
any
sale, lease, foreclosure or other disposition of the Collateral to payment
of
the Obligations, in whole or in part and in such order as Lender may elect,
whether or not then due. Borrowers shall remain liable to Lender for the
payment
of any deficiency with interest at the highest rate provided for herein and
all
costs and expenses of collection or enforcement, including attorneys' fees
and
legal expenses.
(d) Without
limiting the foregoing, upon the occurrence of an Event of Default or an
event
which with notice or passage of time or both would constitute an Event of
Default, Lender may, at its option, without notice, (i) cease making Loans
or
providing Letter of Credit Accommodations or reduce the lending formulas
or
amounts of Loans and Letter of Credit Accommodations available to Borrowers
and/or (ii) terminate any provision of this Agreement providing for any future
Loans or Letter of Credit Accommodations to be made or provided by Lender
to
Borrowers.
(e)
For
the purpose of enabling Lender to exercise the rights and remedies hereunder,
each Borrower hereby grants to Lender, effective as of the occurrence of
any
Event of Default, to the extent assignable, an irrevocable, non-exclusive
license ( exercisable without payment of royalty or other compensation to
Borrowers) to use or assign any of the trademarks, service marks, trade names,
business names, trade styles, designs, logos and other source of business
identifiers and other Intellectual Property and general intangibles now owned
or
hereafter acquired by such Borrower, wherever the same maybe located, including
in such license reasonable access to all media in which any of the licensed
items may be recorded or stored and to all computer programs used for the
complication or printout thereof.
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10.3
Special
Event of Default.
(a)
The
occurrence or existence of the following event shall be an additional “Event of
Default”:
(i)
Any
condition precedent specified in Section 4.1 hereof, the satisfaction of
which
has been deferred by Lender, is not fulfilled and satisfied on or prior to
the
date to which fulfillment and satisfaction thereof has been deferred (whether
or
not such condition is capable of being fulfilled or satisfied by Borrower);
and
(ii)
Lender shall give notice to Borrower that it is declaring an Event of
Default.
(b)
On
the occurrence and during the continuance of an Event of Default specified
in
this Section 10.3 Lender shall be entitled to all rights and remedies hereunder,
including without limitation those set forth in Section 10.2 hereof, under
the
other Financing Agreements, and at law.
10.4
special
United Kingdom Events Of Default.
The
occurrence or existence of any one or more of the following events t shall
each
be an additional “Event of Default”:
| (a) |
Any
Borrower or Obligor incorporated in the United Kingdom is unable
or admits
inability to pay its debts as they fall due, suspends making payments
on
any of its debts or, by reason of actual or anticipated financial
difficulties, commences negotiations with one or more of its creditors
with a view to rescheduling any of its
indebtedness.
|
| (b) |
The
value of the assets of any Borrower or Obligor incorporated in
the United
Kingdom is less than its liabilities (taking into account contingent
and
prospective liabilities).
|
| (c) |
A
moratorium or other protection from its creditors is declared or
imposed
in respect of any indebtedness of any Borrower or Obligor incorporated
in
the United Kingdom.
|
| (d) |
Any
corporate action, legal proceedings or other procedure or step
is taken
(including the making of an application, the presentation of a
petition,
the filing or service of a notice or the passing of a resolution)
in
relation to:
|
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(i)
the
suspension of payments, a moratorium of any indebtedness, winding-up,
dissolution, administration or reorganisation (by way of voluntary arrangement,
scheme of arrangement or otherwise) of any Borrower or Obligor incorporated
in
the United Kingdom or, in the case of a winding-up, a winding up petition
which
is proved to the satisfaction of the Administrative Agent (acting in good
faith)
to be an abuse of process or have no real prospect of success and which is,
in
any event, discharged within three days of its presentation and before it
is
advertised;
(ii)
a
composition, compromise, assignment or arrangement with any creditor of any
Borrower or Obligor incorporated in the United Kingdom;
(iii)
the
appointment of a liquidator, supervisor, receiver, administrative receiver,
administrator, compulsory manager, trustee or other similar officer in respect
of any Borrower or Obligor incorporated in the United Kingdom or any of its
assets; or
(iv)
enforcement of any security over any assets of any
Borrower or Obligor incorporated in the United Kingdom, or any analogous
procedure or step is taken in any jurisdiction.
| (e) |
Any
expropriation, attachment, sequestration, distress or execution
affects
any asset or assets of a Borrower.
|
| (f) |
Inyx
EU redeems or purchases any of its shares or otherwise reduces
its issued
share capital.
|
| (g) |
The
Auditors qualify (other than a qualification of a purely technical
nature)
their report on any audited accounts of either
Borrower.
|
| (h) |
Any
party to the Financing Agreements or the Purchase Agreement (other
than
the Lender) rescinds or purports to rescind any of those agreements
in
whole or in part where to do so would or could be expected to have
a
Material Adverse Effect.
|
| (i) |
Any
party to a Financing Agreement other than the Lender repudiates
a
Financing Agreement or evidences an intention to repudiate a Financing
Agreement.
|
| (j) |
It
is or becomes unlawful for any party to any Financing Agreement
other than
the Lender to perform any of its obligations under the Financing
Agreements.
|
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Section
11. Jury
Trial Waiver; Other Waivers And Consents; Governing Law.
11.1 Governing
Law; Choice of Forum; Service of Process; Jury Trial Waiver.
(a) The
validity, interpretation and enforcement of this Agreement and the other
Financing Agreements and any dispute arising out of the relationship between
the
parties hereto with respect thereto, whether in contract, tort, equity or
otherwise, shall, except where a Financing Agreement shall specifically provide
otherwise, be governed by the internal laws of the Commonwealth of Puerto
Rico
(without giving effect to principles of conflicts of law). If a Financing
Agreement shall specially provide for a choice of governing law other than
the
law of the Commonwealth of Puerto Rico, then the interpretation and enforcement
thereof and any dispute between the parties thereto in respect thereof, whether
in contract, tort, equity or otherwise shall be governed by the internal
laws of
the jurisdiction selected (without giving effect to principles of conflicts
of
law).
(b) Borrowers
and Lender irrevocably consent and submit to the non-exclusive jurisdiction
of
the United States District Court for the District of Puerto Rico and to the
Court of First Instance, (Superior Court) of San ▇▇▇▇, Puerto Rico and waive
any
objection based on venue or forum non conveniences
with
respect to any action instituted therein arising under this Agreement or
any of
the other Financing Agreements or in any way connected with or related or
incidental to the dealings of the parties hereto in respect of this Agreement
or
any of the other Financing Agreements or the transactions related hereto
or
thereto, in each case whether now existing or hereafter arising, and whether
in
contract, tort, equity or otherwise, and agree that any dispute with respect
to
any such matters shall be heard only in the courts described above (except
that
Lender shall have the right to bring any action or proceeding against Borrowers
or its property in the courts of any other jurisdiction which Lender deems
necessary or appropriate in order to realize on the Collateral or to otherwise
enforce its rights against Borrowers and its property).
(c)
Each
Borrower hereby waives personal service of any and all process upon it and
consents that all such service of process may be made by certified mail (return
receipt requested) directed to its address set forth on the signature pages
hereof and service so made shall be deemed to be completed ten (10) days
after
the same shall have been so deposited in the U.S. mails, or, at Lender's
option,
by service upon a Borrower in any other manner provided under the rules of
any
such courts. Within thirty (30) days after such service, the Person so served
shall appear in answer to such process, failing which such Person shall be
deemed in default and judgment may be entered by Lender against such Person
for
the amount of the claim and other relief requested.
(d) BORROWERS
AND LENDER EACH HEREBY WAIVE ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND,
ACTION OR CAUSE OF ACTION (i) ARISING UNDER THIS AGREEMENT OR ANY OF THE
OTHER
FINANCING AGREEMENTS OR (ii) IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL
TO THE DEALINGS OF THE PARTIES HERETO IN RESPECT OF THIS AGREEMENT OR ANY
OF THE
OTHER FINANCING AGREEMENTS OR THE TRANSACTIONS RELATED HERETO OR THERETO
IN EACH
CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER IN CONTRACT,
TORT,
EQUITY OR OTHERWISE. BORROWERS AND LENDER EACH HEREBY AGREE AND CONSENT THAT
ANY
SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL
WITHOUT A JURY AND THAT BORROWERS OR LENDER MAY FILE AN ORIGINAL COUNTERPART
OF
A COPY OF THIS AGREEMENT WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT
OF
THE PARTIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.
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(e) Lender
shall not have any liability to Borrowers (whether in tort, contract, equity
or
otherwise) for losses suffered by it in connection with, arising out of,
or in
any way related to the transactions or relationships contemplated by this
Agreement, or any act, omission or event occurring in connection herewith,
unless it is determined by a final and non-appealable judgment or court order
binding on Lender, that the losses were the result of acts or omissions
constituting gross negligence or willful misconduct. In any such litigation,
Lender shall be entitled to the benefit of the rebuttable presumption that
it
acted in good faith and with the exercise of ordinary care in the performance
by
it of the terms of this Agreement.
11.2 Waiver
of Notices.
Each
Borrower hereby expressly waives demand, presentment, protest and notice
of
protest and notice of dishonor with respect to any and all instruments and
commercial paper, included in or evidencing any of the Obligations or the
Collateral, and any and all other demands and notices of any kind or nature
whatsoever with respect to the Obligations, the Collateral and this Agreement,
except such as are expressly provided for herein. No notice to or demand
on
Borrowers which Lender may elect to give shall entitle it to any other or
further notice or demand in the same, similar or other
circumstances.
11.3 Amendments
and Waivers.
Neither
this Agreement nor any provision hereof shall be amended, modified, waived
or
discharged orally or by course of conduct, but only by a written agreement
signed by an authorized officer of Lender, and as to amendments, as also
signed
by an authorized officer of Borrowers. Lender shall not, by any act, delay,
omission or otherwise be deemed to have expressly or impliedly waived any
of its
rights, powers and/or remedies unless such waiver shall be in writing and
signed
by an authorized officer of Lender. Any such waiver shall be enforceable
only to
the extent specifically set forth therein. A waiver by Lender of any right,
power and/or remedy on any one occasion shall not be construed as a bar to
or
waiver of any such right, power and/or remedy which Lender would otherwise
have
on any future occasion, whether similar in kind or otherwise.
11.4 Waiver
of Counterclaims.
Each
Borrower waives all rights to interpose any claims, deductions, setoffs or
counterclaims of any nature (other than compulsory counterclaims) in any
action
or proceeding with respect to this Agreement, the Obligations, the Collateral
or
any matter arising therefrom or relating hereto or thereto.
11.5 Indemnification.
Borrowers shall indemnify and hold Lender, and its directors, agents, employees
and counsel (collectively “Indemnified Persons”), harmless from and against any
and all losses, claims, damages, liabilities, costs or expenses imposed on,
incurred by or asserted against any of them in connection with any litigation,
investigation, claim or proceeding commenced or threatened related to the
negotiation, preparation, execution, delivery, enforcement, performance or
administration of this Agreement, any other Financing Agreement, or any
undertaking or proceeding related to any of the transactions contemplated
hereby
or by the Purchase Agreements or any act, omission, event or transaction
related
or attendant thereto, including amounts paid in settlement, court costs,
and the
fees and expenses of counsel (the “Indemnified Liabilities”). To the extent that
the undertaking to indemnify, pay and hold harmless set forth in this Section
may be unenforceable because it violates any law or public policy, Borrower
shall pay the maximum portion which it is permitted to pay under applicable
law
to Lender in satisfaction of indemnified matters under this Section. The
foregoing indemnity shall survive the payment of the Obligations and the
termination or non-renewal of this Agreement.
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Section
12. Term
of Agreement; Miscellaneous.
12.1 Term.
(a) This
Agreement and the other Financing Agreements shall become effective as of
the
date set forth on the first page hereof and shall continue in full force
and
effect for a term ending on March 31, 2008 (the “Renewal Date”) and from year to
year thereafter, unless sooner terminated pursuant to the terms hereof. Lender
or Borrowers may terminate this Agreement and the other Financing Agreements
effective on the Renewal Date or on the anniversary of the Renewal Date in
any
year by giving the other party at least ninety (90) days prior written notice;
provided that,
this
Agreement and all other Financing Agreements must be terminated simultaneously.
Upon the effective date of termination or non-renewal of the Financing
Agreements, Borrowers shall pay to Lender, in full, all outstanding and unpaid
Obligations and shall furnish cash collateral to Lender in such amounts as
Lender determines are reasonably necessary to secure Lender from loss, cost,
damage or expense, including attorneys' fees and legal expenses, in connection
with any contingent Obligations, including issued and outstanding Letter
of
Credit Accommodations and checks or other payments provisionally credited
to the
Obligations and/or as to which Lender has not yet received final and
indefeasible payment. Such payments in respect of the Obligations and cash
collateral shall be remitted by wire transfer in Federal funds to such bank
account of Lender, as Lender may, in its discretion, designate in writing
to
Borrower for such purpose. Interest shall be due until and including the
next
business day, if the amounts so paid by Borrowers to the bank account designated
by Lender are received in such bank account later than 12:00 noon, Atlantic
Standard Time.
(b) No
termination of this Agreement or the other Financing Agreements shall relieve
or
discharge any Borrower or any Obligor of its respective duties, obligations
and
covenants under this Agreement, the other Financing Agreements, until all
Obligations have been fully and finally discharged and paid, and Lender's
continuing security interest in the Collateral and the rights and remedies
of
Lender hereunder, under the other Financing Agreements, and applicable law,
shall remain in effect until all such Obligations have been fully and finally
discharged and paid.
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(c)
Upon
the written request of Borrowers, after the effective date of the termination
or
non-renewal of this Agreement, Lender shall deliver to Borrowers, at Borrowers’
cost and expense, UCC-3 termination statements and other termination statements
and a release and reassignment of trademarks, patents, and copyrights, each
in
form and substance satisfactory to Lender, necessary to evidence the termination
of Lender’s security interests in and lien upon the Collateral, provided that,
each of
the following conditions is satisfied: (i) Lender shall have received payment
in
full in cash and performance of all outstanding and unpaid Obligations and
the
delivery to Lender of cash collateral in such amounts as Lender determines
are
reasonably necessary to secure Lender from loss, cost, damage or expense,
including attorneys’ fees and legal expenses, in connection with any contingent
Obligations, including issued and outstanding Letter of Credit Accommodations
and checks or other payments provisionally credited to the Obligations and/or
as
to which Lender has not yet received final and indefeasible payment, and
upon
the release of all claims against Lender, (ii) Lender shall have received
a
written release by Borrowers and all Obligors, of Lender and the other
Indemnified Parties, in form and substance satisfactory to Lender, duly
authorized, executed and delivered by Borrowers and all Obligors, and (iii)
no
suits, actions, proceedings or claims are pending or threatened against any
Indemnified Person asserting any damages, losses or liabilities that are
Indemnified Liabilities. Accordingly each Borrower waives any rights which
it
may have under the Uniform Commercial Code or other applicable law to demand
the
filing of termination statements with respect to the Collateral and Lender
shall
not be required to send such termination statements to Borrower or to file
them
with any filing office, unless and until this Agreement is terminated in
accordance with its terms, the conditions specified in this Section 12.1(c)
satisfied and all of the Obligations indefeasibly paid in immediately available
funds.
12.2
Notices.
All
notices, requests and demands hereunder shall be in writing and (a) made
to
Lender at its address set forth below and to Borrowers at Borrower’s chief
executive office set forth below, or to such other address as any party may
designate by written notice to the other in accordance with this provision,
and
(b) deemed to have been given or made: if delivered in person, immediately
upon
delivery; if by telex, telegram or facsimile transmission, immediately upon
sending and upon confirmation of receipt; if by nationally recognized overnight
courier service with instructions to deliver the next business day, one (1)
business day after sending; and if by certified mail, return receipt requested,
five (5) days after mailing.
12.3
Partial
Invalidity.
If any
provision of this Agreement is held to be invalid or unenforceable, such
invalidity or unenforceability shall not invalidate this Agreement as a whole,
but this Agreement shall be construed as though it did not contain the
particular provision held to be invalid or unenforceable and the rights and
obligations of the parties shall be construed and enforced only to such extent
as shall be permitted by applicable law.
12.4
Successors.
This
Agreement, the other Financing Agreements and any other document referred
to
herein or therein shall be binding upon and inure to the benefit of and be
enforceable by Lender, Borrower and its successors and assigns, except that
Borrower may not assign its rights under this Agreement, the other Financing
Agreements and any other document referred to herein or therein without the
prior written consent of Lender. Lender may, after notice to Borrower, assign
its rights and delegate its obligations under this Agreement and the other
Financing Agreements and further may assign, or sell participation in, all
or
any part of the Loans, the Letter of Credit Accommodations or any other interest
herein to another financial institution or other person, in which event,
the
assignee or participant shall have, to the extent of such assignment or
participation, the same rights and benefits as it would have if it were the
Lender hereunder, except as otherwise provided by the terms of such assignment
or participation.
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12.5
Entire
Agreement.
This
Agreement, the other Financing Agreements, any supplements hereto or thereto,
and any instruments or documents delivered or to be delivered in connection
herewith or therewith represents the entire agreement and understanding
concerning the subject matter hereof and thereof between the parties hereto,
and
supersedes all other prior agreements, understandings, negotiations and
discussions, representations, warranties, commitments, proposals, offers
and
contracts concerning the subject matter hereof, whether oral or written.
In the
event of any inconsistency between the terms of this Agreement and any schedule
or exhibit hereto, the terms of this Agreement shall govern.
12.6
Additional
Interpretative Provision.
(a) All
financial computations hereunder shall be computed unless otherwise specifically
provided herein, in accordance with GAAP as consistently applied and using
the
same method for inventory valuation as used in the preparation of the financial
statements of Borrowers most recently received by Lender prior to the date
hereof.
(b)
In
the computation of periods of time from a specified date to a later specified
date, the word “from” means “from and including”, the words “to” and “until”
each mean “to but excluding” and the word “through” means “to and
including”.
(c)
Unless otherwise expressly provided herein, (i) references herein to any
agreement, document or instrument shall be deemed to include all subsequent
amendments, modifications, supplements, extensions, renewals, restatements
or
replacements with respect thereto, but only to the extent the same are not
prohibited by the terms hereof or of any other Financing Agreement, and (ii)
references to any statute or regulation are to be construed as including
all
statutory and regulatory provisions consolidating, amending, replacing,
recodifying, supplementing or interpreting the statute or
regulation.
(d)
The
captions and headings of this Agreement are for convenience of reference
only
and shall not affect the interpretation of this Agreement.
(e)
This
Agreement and other Financing Agreements may use several different limitations,
tests or measurements to regulate the same or similar matters. All such
limitations, tests and measurements are cumulative and shall each be performed
in accordance with their terms.
(f)
This
Agreement and the other Financing Agreements are the results of negotiations
among and have been reviewed by counsel to Lender and the other parties,
and are
the products of all parties. Accordingly, this Agreement and the other Financing
Agreements shall not be construed against Lender merely because of Lender’s
involvement in their preparation.
(g)
Whenever any action or inaction hereunder is based on or may be taken or
omitted
in the discretion of Lender such discretion shall mean the sole and absolute
discretion of Lender.
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12.7
Multiple
Borrowers.
References to Borrower wherever used in this Agreement, shall mean each and
all
of Borrowers, if more than one and their respective successors and assigns,
individually and collectively, jointly and severally, primarily and
unconditionally. The liability of each Borrower hereunder shall be absolute,
primary and unconditional, joint and several.
12.8
Conflicts:
In the
event of any inconsistency or conflicts in any of the terms or provisions
of the
Financing Agreements, including this Agreement, that which is most favorable
to
Lender shall control.
12.9
Consolidated
Determinations.
Notwithstanding any other provision of this Agreement, the Adjusted Net Worth,
Tangible Net Worth, EBITDA, Excess Cash Flow, Net Income After Tax, Income
Before Taxes and Working Capital of Borrower and any other determinations
which
under GAAP or otherwise would be made on a consolidated basis, shall, if
specified by Lender, be determined for Inyx, Inyx EU and CMSL separately,
Inyx,
Inyx EU and CMSL on a consolidated and consolidating basis or for Inyx and
its
Subsidiaries on a consolidated basis and consolidating basis, as Lender may
elect.
12.10
Appointment
of Borrowers’ Agent
(a) Each
Borrower hereby irrevocably appoints Inyx EU as Borrowers’ Agent hereunder and
Inyx EU hereby agrees to act in such capacity as agent for such Borrowers
hereunder. Each Borrower further irrevocably authorizes Borrowers’ Agent to take
such action on such Borrower’s behalf and to exercise such rights and powers
hereunder as are exercisable by any Borrower.
(b)
Borrowers’ Agent is hereby expressly and irrevocably authorized by each
Borrower, without hereby limiting any implied or express authority, (i) to
give
and receive on behalf of such Borrower all notices and other materials delivered
or provided to be delivered by Lender to such Borrower or by such Borrower
to
Lender pursuant to the Financing Agreements, (ii) to request Revolving Loans,
Term Loans and Letter of Credit Accommodations on behalf of such Borrower,
and
(iii) to pay, on behalf of such Borrower, all Obligations at any time due
Lender
for the benefit of Lender pursuant to the terms of this Agreement.
12.11
Special
Disbursement Procedure.
Lender
shall disburse and provide all Term Loans only to Inyx EU; although repayment
thereof and all interest, fees and other charges associated therewith will
be
guaranteed and may otherwise be made by CMSL.
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IN
WITNESS WHEREOF, Lender and Borrower have caused these presents to be duly
executed as of the day and year first above written.
LENDER:
Westernbank
Puerto Rico
By:
/s/ ▇▇▇▇▇▇ A Vazquez_______
▇▇▇▇▇▇
▇.
▇▇▇▇▇▇▇
Title:
President
Business
Credit Division
Address:
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇
▇▇▇
6th
Floor
▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇
▇▇▇,
▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
BORROWERS:
Inyx
Europe Limited.
By:
/s/ ▇▇▇▇ ▇▇▇▇▇▇▇
Name: ▇▇▇▇ ▇▇▇▇▇▇▇
Title:
Director
By:
/s/ ▇▇▇ ▇. ▇▇▇▇▇
Name:
▇▇▇
▇. ▇▇▇▇▇
Title: Director
(SEAL)
Address:
▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇
▇
▇▇▇▇▇▇▇
▇▇▇▇▇
▇▇▇▇▇
▇▇▇▇
▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇
Attest:
/s/
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Secretary
▇▇▇▇
▇▇▇▇▇▇▇▇▇▇
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Celltech
Manufacturing Services Limited
By:
/s/ ▇▇▇▇
▇▇▇▇▇▇▇
Name:
▇▇▇▇ ▇▇▇▇▇▇▇
Title:
Director
By:
/s/ ▇▇▇ ▇. Green_______________
Name:
▇▇▇
▇. ▇▇▇▇▇
Title:
Director
Address:
Vale
of
▇▇▇▇▇▇▇▇
▇▇▇▇▇▇-Under-Lyne
▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇
▇▇▇
▇▇▇
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Disclosure
schedules omitted and will be supplied by request from the Securites and
Exchange Commission.
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