Immucell Corp 8-K, filed Dec 17, 2020
Immucell Corp (ICCC)
About this 8-K
Immucell Corp filed this 8-K on December 17, 2020, reporting on events of December 15, 2020.
Items reported
- Item 1.01: Entered into a material agreement
- Item 2.03: New debt or off-balance-sheet obligation
- Item 9.01: Financial statements and exhibits
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) December 15, 2020
| ImmuCell Corporation |
| (Exact name of registrant as specified in its charter) |
| DE | 001-12934 | 01-0382980 | ||
| (State or other jurisdiction of incorporation) | (Commission File Number) | (IRS Employer Identification No.) |
| 56 Evergreen Drive Portland, Maine | 04103 | |
| (Address of principal executive offices) | (Zip Code) |
Registrant’s telephone number, including area code 207-878-2770
| (Former name or former address, if changed since last report) |
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the Registrant under any of the following provisions:
| ☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Securities registered pursuant to Section 12(b) of the Act: None
Item 1.01 – Entry into a Material Definitive Agreement
Item 2.03 – Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant
On December 15, 2020, ImmuCell Corporation (the “Company”) entered into definitive agreements covering a certain credit facility with Gorham Savings Bank. The credit facility is a $1.5 million term loan bearing interest at a fixed rate of 3.50% per annum with monthly principal and interest payments based on a seven-year amortization schedule with a seven-year term. Approximately $624,000 of the proceeds were used to pay down the outstanding balance on its mortgage loan with Gorham Savings Bank. In connection with that pay-down, the bank released the $1.4 million in funds that had been held by the bank in a restricted collateral account since the Company’s March 2020 financing. The remaining proceeds of approximately $876,000 are available to pay closing costs and for general working capital purposes.
The credit facility is secured by mortgages and security interests with respect to substantially all of the Company’s assets. The Company’s failure to make timely payments of principal and interest, or otherwise to comply with the terms of its agreements with Gorham Savings Bank, would entitle the lender to accelerate the maturity of such debt and demand repayment in full.
The Term Note and the Loan Agreement executed in connection with this credit facility are attached as Exhibit 10.1 Exhibit 10.2, respectively, to this Current Report on Form 8-K.
The information shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”) or otherwise subject to liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933 or the Exchange Act, except as expressly set forth by specific reference in such filing.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
The following exhibits relating to Item 1.01 and 2.03 shall be deemed to be furnished, and not filed:
| 99.1 | Press Release of ImmuCell Corporation dated December 15, 2020. |
1
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| Dated: December 16, 2020 | IMMUCELL CORPORATION | |
| By: | /s/ Michael F Brigham | |
| Michael F. Brigham | ||
| President, Chief Executive Officer and Principal Financial Officer | ||
Exhibit Index
Exhibit 10.1
TERM NOTE
| $1,500,000 | December 15, 2020 |
FOR VALUE RECEIVED, IMMUCELL CORPORATION, a Delaware corporation with a place of business at 56 Evergreen Drive, Portland, Maine 04103 (the “Borrower”), promises to pay to the order of GORHAM SAVINGS BANK (“Lender”), the principal sum of One Million Five Hundred Thousand and 00/100 Dollars ($1,500,000) or so much thereof as may be advanced and outstanding from time to time) together with interest thereon at a rate per annum (“Interest Rate”) equal to 3.50 percent per annum.
The Borrower shall repay this note in equal consecutive monthly payments of principal and interest in the amount of Twenty Thousand One Hundred Fifty-Nine Dollars and 78/100 ($20,159.78) (the “Payment Amount”) each, beginning one (1) month from the date hereof and continuing on the same day of each month thereafter, with all remaining principal and interest due and payable Seven (7) years from the date hereof (the “Maturity Date”).
If the Payment Amount stated above is insufficient to pay the accrued interest on any payment due date, the payment shall increase to an amount sufficient to pay such accrued interest. Interest shall be calculated on the basis of a three hundred sixty (360) day year counting the actual number of days elapsed. Payments when received shall be first applied to interest, late charges, fees and costs, and then the balance if any to principal.
DEFINITIONS. As used herein the following terms shall have the meanings assigned:
a) “Amounts Owing Hereunder” shall mean the entire outstanding principal balance of this Note; all accrued, unpaid interest; and all charges and expenses payable by Borrower to Lender under the Loan Documents, including, without limitation, all unpaid late payment fees and default interest, if any.
b) “Lender” shall mean GORHAM SAVINGS BANK, its successors and assigns, including any subsequent holder hereof.
c) “Loan Document(s)” shall mean this Note, the commitment letter dated November 19, 2020, any other debt instrument of Borrower held by Lender, the Security Agreement of even or recent date, and all other agreements, documents or writings evidencing, governing or securing the indebtedness and obligations of Borrower to Lender, including, without limitation, all guaranties and any security therefor.
d) “Parties Liable Herefor” shall mean Borrower, and any guarantor, endorser, accommodation party or other surety, now existing or hereafter arising. All undertakings and obligations of Parties Liable Herefor shall be joint and several.
PREPAYMENT. If the Borrower refinances this Loan with another Bank and the Borrower pays principal in excess of the scheduled amortization of principal under this the Note prior to the maturity, such excess payment of principal shall be subject to a prepayment premium to the Bank in an amount equal to the excess principal payment amount times Five (5) Percent during the first year after the date hereof, Four (4) Percent during the second year after the date hereof; Three (3) Percent during the third year after the date hereof; and One (1) Percent for the remaining term.
LATE PAYMENT. If any payment is received ten (10) or more days after date due, then all Parties Liable Herefor shall be liable to Lender for a late payment fee of Six Percent (6.0%) of the total amount of such delinquent payment, to be assessed at the option of Lender at any time while any balance remains outstanding hereunder. Failure to collect a late payment fee on any one or more occasions shall not be deemed to waive the right of Lender to subsequently collect such late payment fees. Acceptance of late payment fees shall not waive or impair Lender’s rights to require timely payment of all amounts due hereunder.
DEFAULT INTEREST RATE. Lender shall have the right to charge interest on the unpaid principal balance hereof at an interest rate Five Percent (5.0%) per annum in excess of the rate of interest otherwise payable as provided herein, for any period during which any Party Liable Herefor shall be in default under any Loan Document, including without limitation any monetary or payment default, subject to notice, if required, and expiration of any applicable cure period, if any. In the event of default under this Note or under any Loan Document followed by collection and enforcement activity by Lender, the Default Interest Rate shall accrue and be payable until actual payment and satisfaction of all Amounts Owing Hereunder. Failure to collect default interest rates on any one or more occasions shall not be deemed to waive the right of Lender to subsequently collect such rates. Acceptance of default interest rates shall not waive or impair Lender’s rights to require timely payment of all amounts due hereunder.
The Bank, in its sole discretion, may adjust the monthly payment to an amount which will approximately amortize the remaining principal balance, at the default interest rate, based on the note amortization schedule; however this will not change the Maturity Date. Borrower agrees, however, to pay at least the interest portion of any payment should it exceed the regularly scheduled payment each month, regardless of whether notice is sent of changes in the monthly installment amount. Any unpaid principal plus accrued interest shall be due and payable at maturity. Monthly payments when received at the option of the lender hereof shall be first applied to interest, late charges, fees and costs, and then the balance if any to principal.
All payments due hereunder shall be payable to GORHAM SAVINGS BANK at any of its offices, or to such other parties or addresses as Lender may from time to time designate in writing. After the date of this Note, if future advances are made to the Borrower under this Note, such advances shall be added to the principal balance due hereunder, shall bear interest as provided in this Note, and shall be governed by all of the terms of this Note.
The Borrower will, at all times (upon reasonable prior notice and during normal business hours) make its books and records available, in its offices, for inspection, examination, and copying by the Lender and its representatives and will, at all times (upon reasonable prior notice and during normal business hours), permit inspection of its properties by the Lender and its representatives.
The Borrower will promptly advise Lender of any notice in respect of any order, claim or proceeding received by the Borrower as to material violations or alleged material violations of any statutes, orders, rules or regulations requiring any material work, repair or capital expenditures, or which may result in any material money penalties or costs to Borrower.
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The Borrower will pay or reimburse the Lender, on demand, for all expenses (including, without limitation, attorney’s and paralegal fees and expenses) reasonably incurred or paid by the Lender in connection with the preparation, analysis, amendment or rearrangement of the Loan Documents and any instrument, agreement or document executed and delivered pursuant thereto or in connection therewith, or with the successful enforcement by the Lender of its rights as against the Borrower or any other person primarily or secondary liable to the Lender in respect of any obligations by the Borrower or such person to the Lender, or with the administration, supervision, protection or realization of any security held by the Lender for any of such obligations, and in the successful defense, settlement or satisfaction of any action, claim or demand asserted against the Lender with respect to the Lender’s rights or liabilities in respect of any such obligations, all of which shall be included in the obligations secured hereunder. At its option, and without limiting any rights or remedies, the Lender may pay or discharge taxes, liens, security interests and other encumbrances at any time levied against or placed on any of the Collateral and may procure and pay any premiums on any insurance to be carried by the Borrower or provide for the maintenance and preservation of the collateral and add the expense thereof to the obligations secured hereby.
From time to time hereafter, the Borrower will execute and deliver, or will cause to be executed and delivered, such additional instruments, certificates or documents, and will take all such actions, as the Lender may reasonably request, for the purpose of implementing or effectuating the provisions of the Loan Documents, or for more fully perfecting or renewing the Lender’s rights with respect to the collateral pursuant hereto or thereto.
Borrower agrees that the Amounts Owing Hereunder may be demanded by Lender upon the occurrence of any one or more of the following events of default (“Events of Default”):
(a) Failure by Borrower to pay as and when due and payable any interest on or principal of or other sum payable under this Note, and continuation of such failure for a period of ten (10) days after such due date; or
(b) Failure by Borrower and/or any Parties Liable Herefor to pay as and when due and payable any sums to be paid by Borrower or Parties Liable Herefor under any Loan Documents (including, but not limited to, any payments required for taxes, insurance premiums and water and sewer charges) and continuance of such failure for a period of ten (10) days after written notice thereof from Lender; or
(c) Failure by Borrower or any Parties Liable Herefor to duly observe or perform any other term, covenant, condition or agreement contained in any note from Borrower and/or any Parties Liable Herefor to Lender, or the Loan Documents, and the continuance of such failure for a period of thirty (30) days after written notice thereof from Lender except as otherwise provided herein or in such Loan Document; or
(d) Any material representation or warranty of Borrower or any Parties Liable Herefor in any Loan Document shall prove to have been false or incorrect in any material respect; or
(e) The merger, dissolution, liquidation, termination of existence, sale of substantially all the assets of or insolvency of, or commencement of any kind of insolvency or bankruptcy proceeding by or against, or any assignment for the benefit of its creditors by, the Borrower or any Parties Liable Herefor, provided that upon the filing of any involuntary insolvency or bankruptcy proceeding, Borrower and any Parties Liable Herefor shall have ninety (90) days in which to contest and procure a dismissal of such proceeding during which Lender may suspend any further advances hereunder; or
(f) Any other event of default under any Loan Document, or any guaranty, security agreement, mortgage or other agreement (whether or not such other agreement relates to or secures this Note) entered into between Lender and Borrower or any Parties Liable Herefor, which is not cured within any applicable cure period; or
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(g) Any other default by Borrower with respect to its indebtedness or obligations to any other creditors, except as are being actively contested in good faith and by appropriate proceedings with adequate reserves established therefore or except for claims amounting to less than $25,000 in the aggregate.
Upon the occurrence of any Events of Default, Lender may make demand for Amount Owing Hereunder; cease making advances hereunder; and exercise any rights and remedies of a secured party under the Delaware Uniform Commercial Code and/or of any of the Loan Documents.
All notices, requests and other communications to any party hereunder shall be in writing (including bank wire, telex, telecopy or similar writing), except for any telephone notices as specifically provided for herein, may be personally served or sent by telex, telecopier, mail or the express mail service of the United States Postal Service, FedEx or other equivalent overnight or expedited delivery service, and (a) if given by personal service, telex (confirmed by telephone) or telecopier (confirmed by telephone), it shall be deemed to have been given upon receipt; (b) if sent by telex or telecopier without telephone confirmation, it shall be deemed to have been given twenty-four (24) hours after being given; (c) if sent by mail, it shall be deemed to have been given upon the earlier of (i) actual receipt, or (ii) three (3) Business Days after deposit in a depository of the United States Postal Service, first class mail, postage prepaid, or actual receipt; (d) if sent by Federal Express, the express mail service of the United States Postal Service or other equivalent overnight or expedited delivery service, it shall be deemed given upon the earlier of (i) actual receipt or (ii) twenty-four (24) hours after delivery to such overnight or expedited delivery service, delivery charges prepaid, and properly addressed to Borrower or the Lender, as applicable. For purposes hereof, the address of the parties to this Agreement shall be as follows:
| To Lender: | GORHAM SAVINGS BANK |
10 Wentworth Drive
Gorham, Maine 04038
Attn: Nick Weightman, SVP
| To Borrower: | IMMUCELL CORPORATION |
Attn: Michael F. Brigham
56 Evergreen Drive
Portland, ME 04103
Attn: President & CEO
Lender is hereby authorized at any time and from time to time, to the fullest extent permitted by law, at its option, without notice or demand and without liability, following and during the continuation of any Event of Default, to set-off and apply any and all deposits (general or special, time or demand, provisional or final, excepting, however, any fiduciary or escrow accounts established by Borrower into which only funds of unrelated third-parties are deposited, and provided that Borrower has informed Lender and the applicable financial institution of the nature of such accounts) at any time held, and other indebtedness at any time owing, by such Lender to or for the credit or the account of Borrower against any and all of the Amounts Owing Hereunder now or hereafter existing under this Note and the other Loan Documents, in such order and manner as such Lender may determine in its sole discretion.
No failure to exercise and no delay in exercising, on the part of Lender, any right, power or privilege hereunder, shall operate as a waiver thereof, nor shall any single or partial exercise of any right, power, or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, power or privilege. The rights and remedies herein provided are cumulative and not exclusive of any rights of remedies provided by law.
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The Borrower and all Parties Liable Herefor, whether principal, guarantor, endorser or otherwise, hereby waive demand, notice and protest, and waive all recourse to suretyship and guarantorship defenses generally, including but not limited to, any extension of time for payment or performance which may be granted to Borrower or to any other liable party, any modifications or amendments to this Agreement or any documents securing payment and performance hereof, any act or omission to act by or behalf of Lender, any invalidity or unenforceability of security given herefor, any suretyship defenses or impairment of collateral, any release, whether intentional, unintentional, or by operation of law, of security, any release, whether intentional, unintentional or by operation of law, of a liable party or parties, and all other indulgences of any type which may be granted by Lender to the Borrower or any party liable herefor, and to also agree to pay all costs of collection of the indebtedness evidenced hereby, including, without limitation, reasonable attorneys’ fees which may be incurred in connection therewith, The Borrower hereby submits to the jurisdiction of the Courts of the State of Maine, and the United States District Courts therein, and to the jurisdiction of all courts to which an appeal may be taken, for the purpose of any action or other proceeding arising out of any obligation under this Agreement, and expressly waives any objections as to venue in any of such courts.
This Note shall be binding upon and inure to the benefit of the Borrower, Lender and their respective successors and assigns.
This Note and the rights and obligations of the parties hereunder shall be governed by and construed and interpreted in accordance with the laws of the State of Maine.
If more than one person or entity executes this Note in favor of Lender, all obligations shall be joint and several with respect to each.
The singular form of any word used herein shall include the plural and vice versa. The use herein of a word of any gender shall include each of the masculine, feminine and neuter genders. The headings or titles of the several sections and paragraphs of this Agreement shall be solely for convenience of reference and shall not affect the meaning, construction or effect of the provisions hereof.
If any term or provision of this Agreement shall be held invalid or unenforceable under any applicable laws, such invalidity or unenforceability shall not affect the validity or enforceability of any other terms or provisions of this Agreement.
It is intended, and Borrower and Lender hereby agree, that (i) a default under or in respect of any obligation of Borrower issued pursuant hereto or any Loan Documents or other security securing such obligation shall constitute a default in respect of the other obligations of Borrower to Lender and (ii) each obligation of Borrower to Lender is secured by the collateral of Borrower and the Loan Documents or any other security therefor. Borrower agrees that any and all collateral that the Lender has or may have or may in the future acquire from the Borrower for any current or future obligations of any of the foregoing to Lender shall be security for all obligations that the Borrower now has or may in the future incur to the Lender. Borrower shall execute and deliver to the Lender such mortgages, security agreements and other security documents satisfactory to the Lender to reflect and assure such cross-collateralization.
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LENDER AND BORROWER AGREE THAT NEITHER OF THEM NOR ANY ASSIGNEE OR SUCCESSOR SHALL (A) SEEK A JURY TRIAL IN ANY LAWSUIT, PROCEEDING, COUNTERCLAIM OR ANY RELATED INSTRUMENTS, OR THE DEALINGS OR THE RELATIONSHIP BETWEEN OR AMONG ANY OF THEM, OR (B) SEEK TO CONSOLIDATE ANY SUCH ACTION WITH ANY OTHER ACTION IN WHICH A JURY TRIAL CANNOT BE OR HAS NOT BEEN WAIVED. THE PROVISIONS OF THIS PARAGRAPH HAVE BEEN FULLY DISCUSSED BY LENDER AND BORROWER, AND THESE PROVISIONS SHALL BE SUBJECT TO NO EXCEPTIONS. NEITHER LENDER NOR BORROWER HAS AGREED WITH OR REPRESENTED TO THE OTHER THAT THE PROVISIONS OF THIS PARAGRAPH WILL NOT BE FULLY ENFORCED IN ALL INSTANCES.
THE PARTIES AGREE THAT NO PROMISE, CONTRACT OR AGREEMENT TO LEND MONEY, EXTEND CREDIT, FOREBEAR FROM COLLECTION OF A DEBT OR MAKE ANY OTHER ACCOMMODATION FOR THE REPAYMENT OF A DEBT MAY BE ENFORCED AGAINST LENDER UNLESS THE PROMISE, CONTRACT OR AGREEMENT IS IN WRITING AND SIGNED BY THE LENDER. ACCORDINGLY, BORROWER CANNOT ENFORCE ANY ORAL PROMISE UNLESS IT IS CONTAINED IN LOAN DOCUMENTS SIGNED BY THE LENDER, NOR CAN ANY CHANGE, FORBEARANCE, OR OTHER ACCOMMODATION RELATING TO THE OBLIGATIONS, THE NOTE OR ANY OTHER OF THE LOAN DOCUMENTS BE ENFORCED, UNLESS IT IS IN WRITING AND SIGNED BY THE LENDER. BORROWER ALSO UNDERSTANDS AND AGREES THAT ALL FUTURE PROMISES, CONTRACTS OR AGREEMENTS OF THE LENDER RELATING TO ANY OTHER TRANSACTION BETWEEN IT AND THE LENDER CANNOT BE ENFORCED IN COURT UNLESS THEY ARE IN WRITING AND SIGNED BY THE LENDER. BY EXECUTION OF THIS AGREEMENT, BORROWER HEREBY ACKNOWLEDGES AND AGREES THAT THE REQUIREMENT OF A WRITING DESCRIBED IN THIS PARAGRAPH SHALL APPLY TO THIS NOTE, THE OBLIGATIONS, THE LOAN DOCUMENTS, ANY EXTENSION, MODIFICATION, RENEWAL, FORBEARANCE OR OTHER ACCOMMODATION RELATING HERETO OR THERETO AND TO ANY OTHER CREDIT RELATIONSHIP BETWEEN BORROWER AND LENDER (WHETHER NOW EXISTING OR CREATED IN THE FUTURE), WHETHER OR NOT THE AMOUNT INVOLVED EXCEEDS $250,000.
Borrower submits to the jurisdiction of any state or federal court located within the State of Maine in connection with any suits or proceedings arising from or under this Note, and Borrower hereby waives personal service of any and all process upon Borrower, and consents that all such service of process be made by registered mail, or certified mail, return receipt requested, directed to Borrower at the address stated at this Note (or such other address as Borrower may have given Lender notice of under the terms of this Note) and service so made shall be deemed to be completed five (5) days after the same shall have been mailed to Borrower’s address.
Borrower hereby consents to the release and disclosure from time to time by Lender to any institution now or hereafter acquiring a participation interest in any of the Loan Documents, to any guarantor now or hereafter existing as to any of the Loan Documents and to Lender’s parent and affiliated financial institutions of any of the following items or matters: (i) copies or originals of any and all “financial records” (as defined at 9-B M.R.S. §161, as amended) of Borrower now or hereafter in the possession or under the control of Lender, and (ii) any and all notices, financial and operating reports, balance sheets, financial statements, consultants’ reports, and any and all documentation and information of or regarding Borrower heretofore or hereafter provided to or generated by or for the benefit of Lender in connection with this Agreement or any of the obligations now or hereafter existing.
This Note and any extensions, renewals, refinances hereof and substitutions herefor shall be deemed to be secured by the terms of any mortgages or other security documents now held by, or in the future to be granted to, Lender, whether from the Borrower or any other Parties Liable Herefor, and whether or not such security is described therein. Lender shall have the right, without notice, upon and during the continuation of any Event of Default to reduce to possession and to set-off against any and all obligations and liabilities of Borrower any account, deposit or other property of the Borrower coming into Lender’s possession, or any other claim of Borrower against Lender.
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Delay or failure on the part of Lender in exercising any rights herein shall not operate as a waiver of these or any other rights under this Note. After the due date, or acceleration or demand of all Amounts Owing Hereunder, the acceptance by Lender of any payment representing less than the total balance of all Amounts Owing Hereunder shall not constitute a waiver or relinquishment of Lender’s right to full and immediate payment of all remaining Amounts Owing Hereunder.
All Parties Liable Herefor hereby waive demand, presentment, notice of dishonor and protest. This Note shall take effect as an instrument under seal. This Note evidences a loan for business and/or commercial purposes.
All Parties Liable Herefor assent to its terms and consent to any and all extensions of time and all other indulgences, to any substitution, exchange or release of collateral, if any, and/or to the addition or release of any other party or person primarily or secondarily liable, all without notice, and generally waive all suretyship rights and defenses while any sums remain outstanding hereunder.
This Note constitutes the entire and integrated agreement and understanding between the Borrower and Lender, and it supercedes any prior negotiations, representations or agreements, either written or oral. Borrower agree that any representation, promise, condition or inducement, express or implied, not included in writing in this agreement shall not be binding upon any party. This agreement may be amended or modified only by a written modification signed by all parties.
Reference is made to a certain commitment letter dated November 19, 2020, the terms of which shall survive the closing. This Note is secured by:
A valid perfected security interest from Borrower in all business assets including, but not limited to, machinery, equipment, accounts receivable and inventory, machinery and equipment, motor vehicles, furniture and fixtures, all located at but not limited to 56 Evergreen Drive, Portland, Maine;
WITNESS its hand and seal.
| Witness | IMMUCELL CORPORATION | |
| /s/ Bayleigh Canonico | /s/ Michael F. Brigham | |
| Michael F. Brigham | ||
| Its President & CEO |
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Exhibit 10.2
LOAN AGREEMENT
THIS LOAN AGREEMENT (“Agreement”) effective as of the 15th day of December, 2020, by and between IMMUCELL CORPORATION, a Delaware corporation with a place of business at 56 Evergreen Drive, Portland, Maine (referred to hereinafter “Borrower”), and GORHAM SAVINGS BANK, a Maine banking company, with a mailing address of 10 Wentworth Drive, Gorham, Maine 04038, and its successors and assigns (the “Bank”).
Background
The Borrower desires to borrow from the Bank and the Bank, subject to the terms and conditions set forth herein, is prepared to lend to the Borrower the total sum of ONE MILLION FIVE HUNDRED THOUSAND and 00/100 dollars ($1,500,000.00) TERM LOAN to Borrower for purposes of refinancing existing corporate debt of the Borrower and to reimburse Borrower for equipment purchases, in connection with the Bank issued commitment letter to the Borrower dated November 19, 2020 (the “Commitment”).
NOW THEREFORE, in consideration of the premises, and of the mutual promises and undertakings of the parties set forth herein, and with the intention of being legally bound hereby, the parties hereto agree as follows:
1. The Loan.
(a) Purpose and Amount. The Bank shall loan to the Borrower on the date hereof subject to the terms herein the sum of ONE MILLION FIVE HUNDRED and 00/100 dollars ($1,500,000.00) TERM LOAN to Borrower (collectively the “Loan”) for the purpose of refinancing existing corporate debt of the Borrower, and to reimburse Borrower for equipment purchases. The parties agree and acknowledge that (a) $635,213 of the Loan proceeds will be applied on the date hereof to partially prepay the existing mortgage note given by the Borrower to the Bank, and (b) the cash of the Borrower being held by the Bank in a restricted account will be released to the Borrower on the date hereof. Subject to all the terms and provisions hereof, the Bank hereby agrees to lend to Borrower, and Borrower hereby agrees to borrow from the Bank, the full amount of the Loan, to be advanced as provided herein and repaid together with accrued interest thereon and with all costs and charges due and owing under this Agreement, all as hereinafter and in the Note more particularly set forth. The Loan shall be evidenced by the Note, and repayment of the Note and all other sums due the Bank under the terms hereof shall be secured by the Loan Documents set forth below.
(b) Loan Documents; Security.
(i) The Borrower’s obligation to repay the Loan and any other sums loaned to the Borrower by the Bank hereunder is evidenced by the Borrower’s Term Note dated December __, 2020, in the principal sum of One Million Five Hundred Thousand Dollars ($1,500,000.00) (the “Note”), providing for the payment of principal, together with interest thereon at the rate set forth therein, in such installments, at such times, and according to such further terms as set forth in the Note.
(ii) As security for the Note and all of the Borrower’s obligations thereunder and hereunder, the Borrower shall execute and deliver to the Bank or cause to be executed and delivered to the Bank, as the case may be, the following:
(A) First priority Security Agreement encumbering all assets including but not limited to accounts, accounts receivable, inventory, machinery and equipment, motor vehicles, furniture and fixtures located at 56 Evergreen Drive, Portland, Maine and the Borrower’s other various operating locations (the “Property”), and all renewals and replacements thereof or additions thereto, all as more specifically described in the Security Agreement (the “Security Agreement”).
(B) First perfected security interest and UCC financing statements in all assets of the Borrower, including but not limited to accounts, accounts receivable, inventory, machinery and equipment, motor vehicles, furniture and fixtures (the “UCCs”).
(iii) The Borrower shall execute and deliver, or cause to be executed and delivered, such additional documents and instruments as the Bank shall reasonably require in order to perfect the Bank’s interest in any of the foregoing property. The Note, Security Agreement, UCCs, and other documents and instruments referred to above (all of which, together with this Agreement (as from time to time amended, restated and extended) and the Commitment are hereinafter collectively referred to as the “Loan Documents”) shall be in form and substance satisfactory to the Bank, and all necessary filing and recording fees with respect thereto shall be paid by the Borrower.
The term “Obligor” as used in this Agreement shall mean, individually and collectively, the Borrower, and any Indemnitor, as the case may be.
2. Representations and Warranties. The Borrower hereby represents and warrants to the Bank (which representations and warranties shall survive until the Loan has been paid in full) that as of the date hereof:
(a) Power and Authority; Authorization; Enforceability. The Borrower has full power, authority and legal right to execute, deliver and comply with each of the Loan Documents to which it was a party and any other document or instrument relating to the Loan to be executed by the Borrower, all actions of the Borrower and other authorizations necessary or appropriate for the execution and delivery of and compliance with the Loan Documents and such other documents and instruments have been taken or obtained and the Loan Documents and such other documents and instruments constitute the respective valid and legally binding obligations of the Borrower, enforceable against the Borrower in accordance with their respective terms, subject to bankruptcy laws, insolvency laws and general equitable principles.
(b) Governmental Approval of Loan Documents. No consent, approval, or other authorization of or by any court, administrative agency, or other governmental authority is required in connection with the Borrower’s execution and delivery of or compliance with any of the Loan Documents or any other document or instrument relating to the Loan executed by the Borrower.
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(c) Conflict; Breach. The Borrower’s execution and delivery of and compliance with the Loan Documents will not conflict with or result in a breach of any applicable law, judgment, order, writ, injunction, decree, rule, or regulation of any court, administrative agency, or other governmental authority, or of any provision of the Borrower’s Organizational Documents or of any agreement or other document or instrument to which the Borrower is a party or by which the Borrower or any of its property is bound, and such actions by the Borrower will not result in the creation or imposition of any lien, charge or encumbrance upon any property of the Borrower in favor of anyone other than the Bank.
(d) Litigation. There is no action, suit or proceeding pending or, to the knowledge of the Borrower, threatened against or affecting the Borrower or the Collateral which is the subject of the Security Agreement before or by any court, administrative agency, or other governmental authority that is not covered by insurance, or which brings into question the validity of the transactions contemplated hereby.
(e) Compliance With Laws. To the Borrower’s knowledge, each portion of the Property, and the Borrower’s use thereof, complies in all material respects with all applicable zoning, fire, electrical, safety, building and land use codes, laws and regulations and if damaged the Property can be rebuilt without variance or special exception. In addition, the Borrower has obtained all licenses, permits, authorizations, consents or approvals from each Governmental Authority necessary for the ownership and operation of the Borrower’s business; and all such licenses, permits, authorizations, consents or approvals are in full force and effect.
(f) Title to Personal Property. All personal property with respect to which the Borrower has granted to the Bank a security interest pursuant to any of the Loan Documents is otherwise owned by such Borrower and is free and clear of all liens, encumbrances, and security interests, except prior security interests in said property given by the Borrower to the Bank.
(g) Bankruptcy; Insolvency. Neither the Borrower nor any other Obligor, as the case may be, has applied for or consented to the appointment of a receiver, trustee or liquidator of itself, himself or herself or any of its, his or her property, admitted in writing its, his or her inability to pay its, his or her debts as they mature, made a general assignment for the benefit of creditors, been adjudicated as bankrupt or insolvent or filed a voluntary petition in bankruptcy, or a petition or an answer seeking reorganization or an arrangement with creditors or to take advantage of any bankruptcy, reorganization, insolvency, readjustment of debt, dissolution or liquidation law or statute, or an answer admitting the material allegations of a petition filed against it, him or her in any proceeding under any such law, and no action has been taken by it, him or her for the purpose of effecting any of the foregoing. No order, judgment or decree has been entered by any court of competent jurisdiction approving a petition seeking reorganization of the Borrower, any general partner of the Borrower, or any other Obligor, or all or a substantial part of the assets of the Borrower, any general partner of the Borrower, or any other Obligor, or appointing a receiver, sequestrator, trustee or liquidator of it, him or her or any of its, his or her property.
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(h) Use of Loan Proceeds. Borrower will employ the Loan proceeds for refinance of existing debt, the purchase of new equipment, for partial paydown on an existing loan from the Bank (as set forth above), and to reimburse Borrower for equipment purchases.
3. Covenants. Borrower covenants and agrees that, until the Loan has been paid in full:
(a) Compliance with Laws. Each portion of the Property shall be operated and maintained in accordance with all applicable laws, rules and regulations relating thereto in all material respects.
(b) Commitment Fee. As consideration for the issuance of the Commitment, Borrower shall pay to Bank a fee of Two Thousand Five Hundred Dollars ($2,500.00), which shall be payable upon the first renewal of the above-described Line of Credit.
(c) Environmental Matters. Borrower will not, and will not permit any tenant or other occupant of the property to, store, use, generate, treat or dispose of any Hazardous Substances or Wastes (each term being defined in the Environmental Indemnity Agreement) on the Property in violation of any applicable federal, state or local laws or regulations. The Borrower shall promptly advise the Bank in writing of and with respect to any pending or threatened claim, demand or action by any governmental authority or third party relating to any Hazardous Substances or Wastes affecting the Property of which the Borrower has actual knowledge or the discovery of any Hazardous Substances or Wastes in violation of applicable law at the Property or on any real property adjoining or in the vicinity of the Property.
(d) Financial Statements. During the term of the Loan, Borrower agrees to provide to the Bank the following financial reports in the format and frequency as outlined below:
Annual:
Annually within Ninety (90) days following the end of the fiscal year:
| ● | 10-K financial statements for Borrower |
In addition, the Bank reserves the right to request complete tax returns on any partnerships, corporations or entities in which the Borrower has an interest.
The Loan Documents shall provide that failure to provide such information shall be a default under the Loan, provided that such default is not cured within ten (10) days of the Bank’s notice to Borrower of such default, and Borrower shall thereupon be obligated to pay interest at the Default Interest Rate.
(e) Additional Financial Information. The Borrower shall furnish to the Bank such additional financial statements and reports, asset verification, and other information as the Bank may reasonably request from time to time.
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(f) Address. The Borrower shall notify the Bank of any change in address for the Borrower.
(g) Books and Records. The Borrower shall keep complete and accurate books and records. The Borrower shall furnish to the Bank all such written information relating to its affairs as may be reasonably requested by the Bank from time to time.
(h) Audit. The Bank shall have the right at any time and from time to time (upon reasonable prior notice and during normal business hours) to audit the books and records of the Borrower and the Borrower shall be obligated to make available for any such audit all books, records and other information that the Bank may reasonably request for such purpose and to cooperate fully with the Bank in connection therewith.
(i) Changed Circumstances. The Borrower shall promptly notify the Bank of any material change in any fact or circumstance represented or warranted by the Borrower herein and in any other documents furnished to the Bank in connection with this Agreement.
(j) Bank’s Fees and Costs. The Borrower shall pay or reimburse the Bank for all other reasonable costs and expenses incurred by the Bank in connection with the preparation, review, modification and, after the occurrence of an Event of Default hereunder, successful enforcement of the Loan Documents and collection of the Loan.
(k) Closing Costs. The Borrower shall pay all reasonable expenses including, but not limited to, title company premiums and charges, fees of the Bank, appraisal, environmental site assessment (if applicable), recording fees and taxes, property inspection fees, consultant fees, and all other reasonable expenses in connection with the preparation, closing and disbursement of the Loan. To the extent incurred, the foregoing expenses shall be paid by Borrower whether or not the Loan shall close or be funded.
(l) Deposit Accounts. Borrower shall maintain its primary depository account with the Bank for the duration of the Loan.
(m) Loss or Damage. Borrower shall notify the Bank of any material loss or damage to the Property within ten (10) days of the occurrence of said loss or damage.
(n) Financial Covenants. The Borrower shall maintain a combined minimum debt service coverage ratio of 1.35x, to be tested annually starting with FY20. Debt Service Coverage ratio shall be defined as income before income taxes plus depreciation, amortization, and interest expense for the fiscal year just completed, divided by all scheduled loan payments for the Borrower during the succeeding fiscal year. Bank shall use appropriate consideration with respect to the inclusion or exclusion of extraordinary or one-time gains or expenses (including stock based compensation) in calculating income before income taxes.
(o) Further Assurances. Borrower shall keep valid and unimpaired the Loan Documents, and to that end shall execute at any future time and as often as may be deemed necessary, on demand of the Bank, all further instruments as may be deemed proper by the Bank to the better carrying out of the true intent and meaning of this Agreement.
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4. Negative Covenants. Borrower shall not do any of the following without the prior written approval of the Bank:
(a) Convey, transfer, or further encumber the Property or convey, assign, transfer, dispose of or encumber any personal property used or useful in the operation of the Borrower’s business other than sales of inventory in the ordinary course of business and dispositions of damaged, worn, outdated or obsolete items.
(b) Declare, make or pay any distributions on or of capital of Borrower in excess of one half of net income (consistent with Borrower’s financial covenants set forth in subsection 3(n) above), or pay any loans payable to any of its directors, officers, shareholders, partners, or to any person or entity affiliated with any of them, or to any family member of any of them.
(c) Liquidate, terminate, consolidate, merge or voluntary dissolve.
5. Prepayment Premium. If the Loan is refinanced by the Borrower with another financial institution, and Borrower pays principal in excess of the scheduled amortization of principal under this the Note prior to the maturity, such excess payment of principal shall be subject to a prepayment premium to the Bank in an amount equal to the excess principal payment amount times Five (5) Percent during the first year following the date of this Agreement, Four (4) Percent during the second year following the date of this Agreement; Three (3) Percent during the third year following the date of this Agreement; and One (1) Percent for the remaining term.
6. Maximum Rate of Interest on Loan. Notwithstanding anything to the contrary contained herein or in any other document executed in connection with the Loan, the effective rate of interest on the Loan shall not exceed the maximum effective rate of interest permitted by applicable law or regulation. The Bank hereby agrees not to collect knowingly any interest from the Borrower in the form of fees or otherwise which will render the Loan usurious. In the event that such interest would be usurious in the Bank’s opinion, the Bank reserves the right to reduce the interest payable by the Borrower. This provision shall survive the closing and repayment of the Loan.
7. Limitation of Bank’s Liability. The rights and benefits of this Agreement shall not inure to the benefit of any third party, except as otherwise provided in this Agreement. Notwithstanding anything to the contrary contained in this Agreement or in any of the other Loan Documents, or any conduct or course of conduct by the Borrower or the Bank or their respective affiliates, agents or employees, neither this Agreement nor any such Loan Documents shall be construed as creating any rights, claims or causes of action against the Bank in favor of any person or entity other than the Borrower.
8. Indemnity. The Borrower, for itself and all those claiming under or through it, agrees to protect, indemnify, defend and hold the Bank, and its directors, officers and employees harmless, from and against any and all liability, expense, or damage of any kind or nature and from any suits, claims or demands, including reasonable legal fees and expenses, arising out of this Agreement or in connection therewith including, without limitation, claims for brokerage and finder’s fees in connection with the Loan. This obligation specifically shall survive the repayment of the Loan.
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9. Default.
(a) Events of Default. The occurrence of any one or more of the following events, which goes uncured beyond any applicable cure period shall, at the sole option of the Bank, constitute an Event of Default hereunder:
(i) The Borrower shall fail to make any payment of principal, and/or interest, and/or real estate taxes and insurance escrow, as applicable, due to the Bank under the Note or under any of the other Loan Documents after the same shall become due and payable, whether at maturity or by acceleration or otherwise, and continuation of such failure for ten (10) days after such due date;
(ii) Except as otherwise specifically provided for in this Agreement, the Borrower shall fail to observe or perform any of the covenants or agreements on its part to be observed and performed under this Agreement or under any of the other Loan Documents within thirty (30) days after written notice from the Bank of such non-compliance; provided, however, that such thirty (30) day period shall be extended as reasonably necessary if the default is not reasonably susceptible to cure within thirty (30) days and Borrower has commenced and is diligently prosecuting cure of the default;
(iii) Any representation or warranty under any Loan Document shall be untrue in any material respect when made;
(iv) Any Event of Default shall occur under the terms of any Loan Document or under any document evidencing or securing any other loan or future advance from the Bank to the Borrower which is not cured within any applicable cure period;
(v) The Borrower or any other Obligor shall apply for or consent to the appointment of a receiver, trustee or liquidator of itself, himself or herself or any of its, his or her property, admit in writing its, his or her inability to pay its, his or her debts as they mature, make a general assignment for the benefit of creditors, be adjudicated a bankrupt, insolvent or file a voluntary petition in bankruptcy, or a petition or an answer seeking reorganization or an arrangement with creditors or to take advantage of any bankruptcy, reorganization, insolvency, readjustment of debt, dissolution or liquidation law or statute, or an answer admitting the material allegations of a petition filed against it, him or her in any proceeding under any such law, or if action shall be taken by the Borrower or any other Obligor for the purpose of effecting any of the foregoing;
(vi) Any order, judgment or decree shall be entered by any court of competent jurisdiction, approving a petition seeking reorganization of the Borrower or any other Obligor or of all or a substantial part of the assets of the Borrower or any other Obligor, or appointing a receiver, sequestrator, trustee or liquidator of the Borrower or any other Obligor or any of their property, and such order, judgment, or decree shall not be dismissed within ninety (90) days;
(vii) The Property shall be materially injured or destroyed by fire or other casualty and the Borrower has failed to deposit or cause to be deposited with the Bank sufficient funds, together with insurance proceeds, to cover the cost of restoration in accordance with the terms of the Security Agreement;
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(viii) Except as may be otherwise specifically permitted herein, any change in the ownership of the Property without the prior written consent of the Bank, which may be granted or withheld in the Bank’s sole judgment.
(b) Acceleration and Remedies. Upon the occurrence of any Event of Default hereunder, in addition to any other rights or remedies available to it hereunder or under any other Loan Document or at law or in equity granted in any of the Loan Documents, the Bank may declare the outstanding principal balance of the Loan, together with all accrued and unpaid interest thereon and all other sums due hereunder or under any of the other Loan Documents, to be immediately due and payable in full.
(c) Remedies Cumulative, etc.
(i) No right or remedy conferred upon or reserved to the Bank under any of the Loan Documents, or of performance of any of the Borrower’s obligations under any of the Loan Documents, or any collateral securing the payment of the Loan under any of the Loan Documents (collectively, the “Collateral”), now or hereafter existing at law or in equity or by statute or other legislative enactment, is intended to be or shall be deemed exclusive of any other such right or remedy, and each and every such right or remedy shall be cumulative and concurrent, and shall be in addition to every other such right or remedy, and may be pursued singly, concurrently, successively or otherwise, at the sole discretion of the Bank, and shall not be exhausted by any one exercise thereof but may be exercised as often as occasion therefore shall occur. No act of the Bank shall be deemed or construed as an election to proceed under any one such right or remedy to the exclusion of any other such right or remedy; furthermore, each such right or remedy of the Bank shall be separate, distinct and cumulative and none shall be given effect to the exclusion of any other. The failure to exercise or delay in exercising any such right or remedy, or the failure to insist upon strict performance of any term of any of the Loan Documents, shall not be construed as a waiver or release of the same, or of any Event of Default thereunder, or of any obligation or liability of the Borrower thereunder. Nothing herein, however, shall be construed to prevent the Bank from waiving any condition, obligation or default it should so elect. In the event of such election by the Bank, any waiver, in order to be effective, must be in writing and signed by the Bank, and any such waiver shall be strictly limited in its effect to the condition, obligation or default specified therein and shall not extend to any subsequent condition, obligation or default or impair any right of the Bank with respect thereto.
(ii) The recovery of any judgment by the Bank and/or the levy of execution under any judgment shall not affect in any manner or to any extent, liens or other security interests in any Collateral, or any rights, remedies or powers of the Bank under any of the Loan Documents or with respect to any Collateral, but such liens and security interests, and such rights, remedies and powers of the Bank shall continue unimpaired as before. Further, the entry of any judgment by the Bank shall not affect in any way the interest rate payable under any of the Loan Documents on any amounts due to the Bank, but interest shall continue to accrue on such amounts at the Default Rate (as hereafter defined).
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(iii) Except as to notices that are specifically provided for herein or in any of the other Loan Documents, the Borrower hereby waives presentment, demand, notice of nonpayment, protest, notice of protest, or other notice of dishonor, and any and all other notices in connection with any default in the payment of, or any enforcement of the payment of, the Loan. To the extent permitted by law, Borrower waives the right to any stay of execution and the benefit of all exemption laws now or hereafter in effect.
(iv) The Borrower agrees that the Bank may release, compromise, forbear with respect to, waive, suspend, extend or renew any of the terms of the Loan Documents (and the Borrower hereby waives any notice of any of the foregoing), and that the Loan Documents may be amended, supplemented or modified by the Bank and the other signatory parties and that the Bank may resort to any Collateral in such order and manner as it may think fit, or accept the assignment, substitution, exchange, pledge, or release of all or any portion of any Collateral, for such consideration, or none, as it may require, without in any way affecting the validity of any liens over or other security interest in the remainder of any such Collateral (or the priority thereof or the position of any subordinate holder of any lien or other security interest with respect thereto); and any action taken by the Bank pursuant to the foregoing shall in no way be construed as a waiver or release of any right or remedy of the Bank, or of any Event of Default, or of any liability or obligation of the Borrower, under any of the Loan Documents.
(d) Default Rate. Upon an Event of Default or after the Maturity Date, whether or not the Bank has elected to accelerate the indebtedness evidenced by the Note, the Loan shall bear interest, at a rate of five (5%) over the interest rate provided for by the Note (the “Default Rate”), but in no event more than the highest rate permitted by the applicable usury law in respect of the Borrower, until the unpaid balance of the Principal Sum, interest and any charges shall have been paid in full. Borrower acknowledges that (i) the Default Rate is a material inducement to the Bank to make the Loan; (ii) the Bank would not have made the Loan in the absence of the agreement of Borrower to pay the Default Rate; (iii) the Default Rate represents compensation for increased risk to the Bank that the Loan will not be repaid; and (iv) the Default Rate is not a penalty and represents a reasonable estimate of (a) the cost to the Bank in allocating its resources (both personnel and financial) to the ongoing review, monitoring, administration and collection of the Loan, and (b) compensation to the Bank for losses that are difficult to ascertain.
(e) Costs and Expenses. Following the occurrence of any Event of Default, the Borrower shall pay upon demand all reasonable costs and expenses (including all reasonable amounts paid to attorneys, accountants, real estate brokers, appraisers, and other advisors employed by the Bank), incurred by the Bank in the successful exercise of any of its rights, remedies or powers under any of the Loan Documents, as a secured or unsecured creditor, as the case may be of the Borrower, any general partner of the Borrower or any other Obligor in any federal or state bankruptcy proceedings, or with respect to any Collateral with respect to such Event of Default, and any amount thereof not paid promptly following demand therefor together with interest thereon at the Default Rate from the date of such demand, shall become part of the Loan and shall be secured by the Security Agreement and all other Collateral. In connection with and as part of the foregoing, in the event that any of the Loan Documents is placed in the hands of an attorney for the collection of any sum payable thereunder, the Borrower agrees to pay reasonable attorneys’ fees for the collection of the amount being claimed under such Loan Document, as well as all costs, disbursements, and allowances provided by law, the payment of which sums shall be secured by the Security Agreement and all other Collateral.
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(f) Jurisdiction; Venue. The Borrower agrees that any action or proceeding against it to enforce the Loan may be commenced in state or federal court located in the State of Maine.
(g) JURY TRIAL WAIVER. THE BORROWER AND THE BANK HEREBY WAIVE ANY AND ALL RIGHTS THAT THEY MAY HAVE NOW OR HEREAFTER HAVE UNDER THE LAWS OF THE UNITED STATES OF AMERICA OR ANY STATE TO A TRIAL BY JURY OF ANY AND ALL ISSUES ARISING EITHER DIRECTLY OR INDIRECTLY IN ANY ACTION OR PROCEEDING BETWEEN THE BORROWER AND THE BANK OR THEIR RESPECTIVE SUCCESSORS AND ASSIGNS, OUT OF OR IN ANY WAY CONNECTED WITH THE LOAN AGREEMENT. IT IS INTENDED THAT THIS WAIVER OF JURY TRIAL SHALL APPLY TO ANY AND ALL CLAIMS, DEFENSES, RIGHTS, AND/OR COUNTERCLAIMS IN ANY ACTION OR PROCEEDING.
10. Further Assurances; Corrections. The Borrower shall, within five (5) days of the Bank’s request, execute any documents, provide any lien or other searches, and do anything that the Bank determines to be reasonably necessary to establish, perfect, assure, or maintain the existence and priorities of, the Bank’s liens against the property, the reasonable costs of so doing to be paid by the Borrower. In case of the occurrence of any errors in the execution of the Loan Documents, the Borrower authorizes the Bank to make all necessary corrections in order to cause the Loan Documents to conform to the terms and conditions agreed to by the Borrower and the Bank.
11. Material Adverse Change means any set of circumstances or events which:
(a) has any material adverse effect whatsoever upon the validity or enforceability of the Loan Documents,
(b) is material and adverse to the business, properties, assets, financial condition, or results of operations of the Borrower taken as whole,
(c) impairs materially the ability of the Borrower taken as a whole to duly and punctually pay or perform its obligations under the Loan Documents, or
(d) impairs materially the ability of the Bank to enforce its legal remedies pursuant to the Loan Documents.
12. Insurance.
(a) Insurance. Borrower shall maintain hazard insurance on the Collateral in such amounts and for such coverage as shall be satisfactory in all respects to the Bank, provided that at no time shall coverage be less than 80% of insurable value for the term of the Loan and shall provide the Bank with any policies, endorsements and any riders thereto as the Bank may require. The Bank shall be designated as “Mortgagee” under standard Maine Mortgage Clause for all real estate and “Loss Payee” for personal property. Policy endorsement shall include a 10-day cancellation notice clause to the Bank.
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Borrower shall provide evidence of General Liability Insurance, Loss of rents Insurance (if applicable) and All-Risk-Hazard Insurance covering the improvements, and such coverages must be in amounts reasonably satisfactory in all respects to the Bank, provided that at no time shall coverage be less than 80% of insurable value for the term of the Loan, and such insurance must be maintained at all times during the life of the Loan. The insurance company must be reasonably acceptable to the Bank and “Gorham Savings Bank, (ISAOA/ATIMA)” shall be named in the mortgagee loss payable clause with the address of “Gorham Savings Bank.” Each policy shall provide that it cannot be canceled, reduced or terminated without ten (10) days prior written notice to Bank.
(b) Insurance Mailing Address. All required insurance policies and/or notices shall be mailed to:
Gorham Savings Bank (ISAOA/ATIMA)
Attn: Business Services
10 Wentworth Drive
Gorham, Maine 04038
13. Miscellaneous.
(a) Time of the Essence. All dates and times for the performance of the Borrower’s obligations set forth herein shall be deemed to be of the essence of this Agreement.
(b) Severability. In the event that for any reason one or more of the provisions of this Agreement or their application to any person or circumstance shall be held to be invalid, illegal or unenforceable in any respect or to any extent, such provisions shall nevertheless remain valid, legal and enforceable in all other respects and to such extent as may be permissible. In addition, any such invalidity, illegality or unenforceability shall not affect any other provision hereof, but this Agreement shall be construed as if such invalid, illegal or unenforceable provision had never been contained herein.
(c) Successors and Assigns. This Agreement inures to the benefit of and binds the parties hereto and their respective successors and assigns, and the words “Borrower” and “Bank” whenever occurring herein shall be deemed to include such respective successors and assigns. However, the Borrower shall not voluntarily, or by operation of law, assign or transfer any interest which it may have under this Agreement or convey the property, or any part thereof, without the prior written approval of the Bank. The Bank may assign or otherwise transfer the Loan and any or all of the Loan Documents to any other person, and such other person shall thereupon become vested with all of the benefits in respect thereof granted to the Bank herein or otherwise. The Bank shall have the right to sell participations in the Loan to any other persons or entities without the consent of or notice to the Borrower. Without the consent of or notice to the Borrower, the Bank may disclose to any prospective purchaser of any securities issued or to be issued by the Bank, and any prospective or actual purchaser of any participation or other interest in the Loan or any other loans made by the Bank to the Borrower, any financial or other information, data or material in the Bank’s possession relating to the Borrower or the Loan.
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(d) Notices. All notices required or desired to be given to either of the parties hereunder shall be in writing and shall be deemed to have been sufficiently given for all purposes when presented personally to such party or sent by certified or registered mail, return receipt requested, to such party at its address set forth below:
| The Borrower: | ImmuCell Corporation |
| Attn: Michael Brigham | |
| 56 Evergreen Drive | |
| Portland, ME 04013 |
| with a copy to | David Champoux, Esq. |
| Borrower’s attorney: | Pierce Atwood LLP |
| 254 Merrill’s Wharf | |
| Portland, ME 04101 | |
| The Bank: | Gorham Savings Bank |
Attn: Nicholas Weightman 10 Wentworth Drive Gorham, Maine 04038 | |
| with a copy to | Adam S. Taylor, Esq. |
| the Bank’s attorney: | Taylor, McCormack & Frame, LLC |
| 30 Milk Street, 5th Floor | |
| Portland, ME 04101 |
Such notice shall be sent certified or registered mail, return receipt requested or by Federal Express and shall be deemed to be given upon receipt or upon refusal of acceptance. Any notice of any change in such address shall also be given in the manner set forth above. Whenever the giving of notice is required, the giving of such notice may be waived in writing by the party entitled to receive such notice.
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(e) Definitions; Number and Gender. For purposes of this Agreement, the singular shall be deemed to include the plural and the neuter shall be deemed to include the masculine and feminine, as the context may require.
(f) Conflicts Between Instruments. In the event of any conflict between the provisions of this Agreement and the provisions of any of the other Loan Documents, the provisions of this Agreement shall prevail.
(g) Captions. The captions or headings of the paragraphs of this Agreement are for convenience only and shall not control or affect the meaning or construction of any of the terms or provisions of this Agreement.
(h) Governing Law; Consent to Jurisdiction. To the extent permitted by the laws of the State of Maine, this Agreement and the rights of the parties hereunder shall be governed by the laws of the State of Maine applicable to contracts made and to be performed in the State of Maine. The parties hereby consent and submit to the exclusive jurisdiction of the Superior Court for Cumberland County or the United States District Court for the District of Maine, located in Portland, for the adjudication of any rights or claims arising under this Agreement. The Agreement hereby waives any objection that it may now or hereafter have to the venue of any such suit or any such court or that such suit was brought in an inconvenient court.
SIGNATURES TO FOLLOW ON NEXT PAGE
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IN WITNESS WHEREOF, the Borrower and the Bank have executed or caused this Agreement to be executed on the date first above set forth.
| WITNESS | GORHAM SAVINGS BANK | |
| By: Nicholas Weightman | ||
| Its: Executive Vice President | ||
| IMMUCELL CORPORATION | ||
| /s/ Bayleigh Canonico | /s/ Michael F. Brigham | |
| By: Michael F. Brigham | ||
| Its President & CEO |
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Exhibit 99.1
ImmuCell
ImmuCell Announces Restructuring of its Bank Debt
For Immediate Release
PORTLAND, Maine – December 15, 2020 – ImmuCell Corporation (Nasdaq: ICCC) (“ImmuCell” or the “Company”), a growing animal health company that develops, manufactures and markets scientifically-proven and practical products that improve the health and productivity of dairy and beef cattle, today announced a restructuring of its bank debt.
Today, the Company secured a $1.5 million loan from its existing lender, Gorham Savings Bank, with a seven-year term and amortization at 3.5% per annum. Approximately $624,000 of the proceeds were used to pay down the outstanding balance on its mortgage loan with Gorham Savings Bank. In connection with that pay-down, the bank released the $1.4 million in funds that had been held by the bank in a restricted collateral account since the Company’s March 2020 financing. The remaining proceeds of approximately $876,000 are available to pay closing costs and for general working capital purposes.
Management’s Discussion:
“The Gorham Savings Bank team continues to demonstrate that they believe in ImmuCell, and we appreciate that,” commented Michael F. Brigham, President and CEO. “This additional support improves our liquidity position and helps us continue to fund our expansion plans.”
About ImmuCell:
ImmuCell Corporation’s (Nasdaq: ICCC) purpose is to create scientifically-proven and practical products that improve the health and productivity of dairy and beef cattle. ImmuCell manufactures and markets First Defense®, providing Immediate Immunity™ to newborn dairy and beef calves, and is in the late stages of developing Re-Tain™, a novel treatment for subclinical mastitis without a milk discard requirement that provides an alternative to traditional antibiotics. Press releases and other information about the Company are available at: http://www.immucell.com.
| Contacts: | Michael
F. Brigham, President and CEO ImmuCell Corporation (207) 878-2770 |
Joe
Diaz, Robert Blum and Joe Dorame
Lytham Partners, LLC
(602) 889-9700
iccc@lythampartners.com
Cautionary Note Regarding Forward-Looking Statements (Safe Harbor Statement):
This Press Release contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Such statements include, but are not limited to, any statements relating to: our plans and strategies for our business; projections of future financial or operational performance; the timing and outcome of pending or anticipated applications for regulatory approvals; factors that may affect the dairy and beef industries and future demand for our products; the extent, nature and duration of the COVID-19 pandemic and its consequences, and their direct and indirect impacts on the Company’s production activities, operating results and financial condition and on the customers and markets the Company serves; the scope and timing of ongoing and future product development work and commercialization of our products; future costs of product development efforts; the estimated prevalence rate of subclinical mastitis and producers’ level of interest in treating subclinical mastitis given the current economic and market conditions; the expected efficacy of new products; estimates about the market size for our products; future market share of and revenue generated by current products and products still in development; our ability to increase production output and reduce costs of goods sold associated with our new product, Tri-Shield First Defense®; the future adequacy of our own manufacturing facilities or those of third parties with which we have contractual relationships to meet demand for our products on a timely basis; the anticipated costs of (or time to complete) planned expansions of our manufacturing facilities and the adequacy of our funds available for these projects; the continuing availability to us on reasonable terms of third-party providers of critical products or services; the robustness of our manufacturing processes and related technical issues; estimates about our production capacity, efficiency and yield, which are highly subject to biological variability and the product format mix of our sales; the future adequacy of our working capital and the availability and cost of third-party financing; our ability to gain access to all or a substantial portion of the cash escrow funds presently held by our bank lender; future regulatory requirements relating to our products; future expense ratios and margins; future compliance with bank debt covenants; costs associated with sustaining compliance with current Good Manufacturing Practice (cGMP) regulations in our current operations and attaining such compliance for the facility to produce the Nisin Drug Substance; implementation of international trade tariffs that could reduce the export of dairy products, which could in turn weaken the price received by our customers for their products; our effectiveness in competing against competitors within both our existing and our anticipated product markets; the cost-effectiveness of additional sales and marketing expenditures and resources; anticipated changes in our manufacturing capabilities and efficiencies; the value of our net deferred tax assets; projections about depreciation expense and its impact on income for book and tax return purposes; anticipated market conditions; and any other statements that are not historical facts. Forward-looking statements can be identified by the use of words such as “expects”, “may”, “anticipates”, “aims”, “intends”, “would”, “could”, “should”, “will”, “plans”, “believes”, “estimates”, “targets”, “projects”, “forecasts”, “seeks” and similar words and expressions. In addition, there can be no assurance that future developments affecting us will be those that we anticipate. Such statements involve risks and uncertainties, including, but not limited to, those risks and uncertainties relating to difficulties or delays in development, testing, regulatory approval, production and marketing of our products (including the First Defense® product line and Re-Tain™), competition within our anticipated product markets, customer acceptance of our new and existing products, product performance, alignment between our manufacturing resources and product demand, our reliance upon third parties for financial support, products and services, changes in laws and regulations, decision making and delays by regulatory authorities, currency values and fluctuations and other risks detailed from time to time in filings we make with the SEC, including our Quarterly Reports on Form 10-Q, our Annual Reports on Form 10-K and our Current Reports on Form 8-K. Such statements involve risks and uncertainties and are based on our current expectations, but actual results may differ materially due to various factors, including the risk factors summarized above.