Immucell Corp 8-K, filed Mar 12, 2020
Immucell Corp (ICCC)
About this 8-K
Immucell Corp filed this 8-K on March 12, 2020, reporting on events of March 11, 2020.
Items reported
- Item 1.01: Entered into a material agreement
- Item 2.03: New debt or off-balance-sheet obligation
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: March 11, 2020
(Date of earliest event reported)
ImmuCell
Corporation
(Exact name of registrant as specified in its charter)
| DE | 001-12934 | 01-0382980 | ||
| (State or other jurisdiction | (Commission File Number) | (IRS Employer | ||
| of incorporation) | Identification Number) |
| 56 Evergreen Drive | ||
| Portland, Maine | 04103 | |
| (Address of principal executive offices) | (Zip Code) |
207-878-2770
(Registrant’s telephone number, including area code)
Not
Applicable
(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 obligations 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:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
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 March 11, 2020, ImmuCell Corporation (the “Company”) entered into definitive agreements covering certain credit facilities with Gorham Savings Bank in the aggregate principal amount of $8.6 million. One facility is a $5.1 million mortgage note bearing interest at a fixed rate of 3.50% per annum with monthly principal and interest payments based on a twenty-five year amortization schedule with a ten-year term. The second facility is a $3.5 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. The loan proceeds were used to provide some additional working capital, but mostly to refinance $8.3 million in outstanding bank debt and pay off a related interest rate swap termination liability of $165,000. The Company also entered into a $1 million line of credit agreement with Gorham Savings Bank that bears interest at a variable rate equal to the one-month LIBOR plus 2.15% per annum.
The credit facilities are 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 two Term Notes and the two Loan Agreements and the Line of Credit Agreement executed in connection with these credit facilities are attached as Exhibit 99.2, Exhibit 99.3, Exhibit 99.4, Exhibit 99.5 and Exhibit 99.6, 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.
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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: March 12, 2020 | IMMUCELL CORPORATION | |
| By: | /s/ Michael F Brigham | |
| Michael F. Brigham | ||
| President, Chief Executive Officer and | ||
| Principal Financial Officer | ||
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Exhibit Index
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Exhibit 99.1
ImmuCell
ImmuCell Announces Refinancing of its Bank Debt
For Immediate Release
PORTLAND, Maine – March 11, 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 complete refinancing of its bank debt.
The Company closed on an $8.6 million debt refinancing package with Gorham Savings Bank comprised of three components. The first is a ten-year $5.1 million mortgage note bearing interest at a fixed rate of 3.50% per annum with monthly principal and interest payments due based on a twenty-five-year amortization schedule. The second component is a seven-year $3.5 million note bearing interest at a fixed rate of 3.50% per annum with monthly principal and interest payments due based on a seven-year amortization schedule. The proceeds were used to provide some additional working capital but mostly to refinance $8.3 million in outstanding bank debt and pay off a related interest rate swap termination liability of $165,000. The third component is a $1 million line of credit, which bears interest at a variable rate equal to the one-month LIBOR plus 2.15%.
“This is a great opportunity for us to lower our interest rate exposure and extend our loan repayment terms,” commented Michael F. Brigham, President and CEO. “Given the extreme volatility being experienced in the financial markets right now, I believe we will be well-served with this debt financing over the long term.”
The Company previously had five different loans with interest rates ranging from fixed rates of 4.38% and 6.04% to variable rates of the one-month LIBOR plus 2.25% that had been entered into during different stages of its capital investment programs, including one with a $452,000 balloon principal payment due during the third quarter of 2020.
This indebtedness is secured by mortgages and security interests covering substantially all of the Company’s assets. By bank debt covenant, the Company is required to maintain $1.4 million in an escrow account until certain financial conditions are met based on the Company’s performance during 2020 or after and provided adequate collateral values relative to outstanding loan balances are achieved. In comparison, the covenants included in the repaid debt required the Company to hold $2 million in otherwise unrestricted cash.
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“The Gorham team has been great to work with,” Mr. Brigham concluded. “They are flexible and creative and met our debt financing needs effectively, on a timely basis.”
About Gorham Savings Bank:
Headquartered in Gorham, Maine since its founding in 1868, Gorham Savings Bank is a depositor-owned community bank delivering a full suite of financial services tailored to the needs of Southern Maine’s businesses and consumers. As the only bank headquartered in Cumberland County, GSB serves and supports businesses that value local management, know-how and accountability. The bank offers consumer savings accounts, personal loans, mortgages, HELOCs, CDs, IRAs and financial planning services through its 13 branches and growing network of ATMs, ITMs and mobile services. Gorham Savings Bank is a tireless advocate for the well-being of the communities it serves, donating thousands of volunteer hours to dozens of community-based initiatives annually. Gorham Savings Bank is a member of the FDIC. Learn more at: http://www.gorhamsavingsbank.com.
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 markets First Defense®, providing Immediate Immunity™ to newborn dairy and beef livestock, 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. Investors are encouraged to review the Company’s updated Corporate Presentation slide deck that provides an overview of the Company’s business and is available under the “Investors” tab of the Company’s website at www.immucell.com, or by request to the Company. The Company expects to file its Annual Report on Form 10-K on or about March 27, 2020. 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
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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 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; 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; the future adequacy of our working capital and the availability and cost of third-party financing; future regulatory requirements relating to our products; future expense ratios and margins; future compliance with bank debt covenants; future cost of our variable interest rate exposure on most of our bank debt; 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.
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Exhibit 99.2
TERM NOTE
| $5,100,000 | March 11, 2020 |
FOR VALUE RECEIVED, IMMUCELL CORPORATION, a Delaware corporation (hereinafter the “Borrower”), promises to pay to the order of GORHAM SAVINGS BANK (“Lender”) the principal sum of FIVE MILLION ONE HUNDRED THOUSAND AND 00/100 ($5,100,000) (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 principal payments in the amount of Twenty-five Thousand Six Hundred Seventy-three Dollars and 3/100 ($25,673.03) plus accrued interest (the sum of the monthly principal payment and the accrued interest being the “Payment Amount”), 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 March 11, 2030, ten (10) 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.
AMORTIZATION:
For Fixed Rate Note for entire term include the following:
Monthly principal and interest is based on a 300-month amortization schedule.
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 February 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.
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PREPAYMENT. If the Loan is refinanced with another bank by the Borrower, the Borrower shall pay a one-time prepayment penalty equal to One Percent (1%) of the then outstanding loan balance; provided, however, that such prepayment penalty shall not apply to any prepayment to the extent funded by a loan or grant received by the Borrower from the Maine Technology Institute (“MTI”), which MTI loan is subordinated to all indebtedness owing by the Borrower to the Lender..
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.
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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.
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 twenty (20) days after written notice thereof from Lender except as otherwise provided herein; 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 sixty (60) days in which to contest and procure a dismissal of such proceeding during which Lender may suspend any further advances hereunder; or
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(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
(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 Maine 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 |
| 56 Evergreen Drive | |
| Portland, ME 04103 | |
| Attn: Michael F. Brigham, 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 an 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 Lender 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.
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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.
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.A. §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.
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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.
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 February 19, 2020, the terms of which shall survive the closing. This Note is secured by:
| (A) | Valid mortgages on property located at 56 Evergreen Drive, Portland, Maine and 33 Caddie Lane, Portland, Maine |
| (B) | Valid perfected security interests from Borrower in all business assets including, but not limited to, machinery, equipment, accounts receivable and inventory located at 56 Evergreen Drive, Portland, Maine and 33 Caddie Lane, Portland, Maine; |
| (C) | Any other mortgage, security agreement, guarantee, or other security document that either: (i) specifically refers to this Note, or (ii) generally secures all obligations of Borrower to Lender. |
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WITNESS its hand and seal.
| Witness | IMMUCELL CORPORATION | |
| /s/ David Champoux | /s/ Michael F. Brigham | |
| By: Michael F. Brigham | ||
| Its President & CEO |
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Exhibit 99.3
TERM NOTE
| $3,500,000 | March 11, 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 Three Million Five Hundred Thousand and 00/100 Dollars ($3,500,000) 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 Forty-Seven Thousand ONe Hundred and Twenty-three Dollars and 63/100 ($47,123.63) (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 February 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 the Borrower shall pay a one-time prepayment equal to One Percent (1.0%) of the then outstanding balance of the Loan; provided, however, that such prepayment penalty shall not apply to any prepayment to the extent funded by a loan or grant received by the Borrower from the Maine Technology Institute “MTI”, which MTI loan is subordinated to all indebtedness owing by the Borrower to the Lender.
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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 twenty (20) days after written notice thereof from Lender except as otherwise provided herein; 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 sixty (60) 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 Lender 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.A. §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 February 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/ David Champoux | /s/ Michael F. Brigham | |
| Michael F. Brigham | ||
| Its President & CEO |
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Exhibit 99.4
LOAN AGREEMENT
THIS LOAN AGREEMENT (“Agreement”) effective as of the 11th day of March, 2020, by and between IMMUCELL CORPORATION, a Delaware Corporation with a mailing address of 56 Evergreen Drive, Portland, Maine 04103 (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 FIVE MILLION ONE HUNDRED THOUSAND and 00/100 dollars ($5,100,000.00) for purposes of refinancing existing debt of the Borrower, in connection with the Bank issued commitment letter to the Borrower dated February 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 subject to the terms herein up to the sum of FIVE MILLION ONE HUNDRED THOUSAND and 00/100 dollars ($5,100,000.00) (the “Loan”) for the purpose of refinancing existing debt of the Borrower. 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.
(c) 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 promissory note dated as of March 11, 2020, in the Principal Sum of FIVE MILLION ONE HUNDRED THOUSAND and 00/100 dollars ($5,100,000.00) (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.
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(ii) As security for the Note and all of the Borrower’s obligations thereunder and hereunder, and any other outstanding obligations of the Borrow to the Bank 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 Mortgage and security agreements encumbering certain property located at 56 Evergreen Drive, Portland, Maine and 33 Caddie Lane, Portland, Maine (the “Mortgaged Property”) and all building materials, fixtures, machinery and equipment owned by Borrower and necessary or incidental to the general operation and maintenance of each portion of the Mortgaged Property (as hereinafter defined), and all renewals and replacements thereof or additions thereto, all as more specifically described in the Mortgages (collectively the “Mortgage”).
(B) An absolute assignment of all of the Borrower’s right, title and interest in and to any and all present and future leases and agreements of lease affecting any portion of the Mortgaged Property (“Assignments of Leases and Rents”).
(C) Uniform Commercial Code financing statements in favor of the Bank perfecting the Bank’s security interests granted pursuant to the Mortgages in all fixtures now owned or hereafter acquired by the Borrower and located on or used in connection with any portion of the Mortgaged Property (the “UCCs”).
(D) An Environmental Indemnity Agreement (“Environmental Indemnity”) executed by the Borrower in favor of the Bank pursuant to which the Borrower will indemnify, defend and hold the Bank harmless from and against all costs, claims, liability or expense arising in connection with Environmental Laws, Regulated Substances, or Contamination as such terms are defined in the Environmental Indemnity.
(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, Mortgage, Security Agreement, Assignments of Leases and Rents, UCCs, Environmental Indemnity 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, the Guarantor, and any Indemnitor, as the case may be.
The term “Mortgaged Property” as used in this Agreement shall mean all that described on Exhibit A attached hereto (collectively the “Real Property”) together with all structures and/or improvements located thereon (collectively the “Improvements”). The Real Property and the Improvements are sometimes collectively referred to herein as the “Mortgaged Property.”
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:
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(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.
(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.
(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 Mortgaged Property 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. Each portion of the Mortgaged Property, and the 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 Mortgaged Property can be rebuilt without variance or special exception. In addition, the Borrower has obtained all licenses, permits, authorizations, consent or approval from each Governmental Authority necessary for the development of the Project; and all such licenses, permits, authorizations, consents or approvals are in full force and effect.
(f) Title to the Mortgaged Property. The Borrower has good and marketable, equitable and beneficial title to the Mortgaged Property, subject to no lien, charge, or encumbrance except such as are listed as unomitted exceptions to title or exclusions from coverage in the title insurance policy being issued by Commonwealth Title Insurance Company (the “Title Company”) to the Bank concurrently with the recording of the Mortgages.
(g) 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.
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(h) 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.
(i) Access.
There are adequate rights of access to public ways and all roads necessary for the full utilization of the Project for its intended
purposes have either been completed or the necessary rights of way therefor have either been acquired by the appropriate Governmental
Authority or have been dedicated to public use and accepted by said Governmental Authority to assure the complete construction
and installation thereof.
(j) Use of Loan Proceeds. Borrower will employ the Loan proceeds solely for the purpose of refinancing existing debt of the Borrower.
3. Covenants. Borrower covenants and agrees that, until the Loan has been paid in full:
(a) Compliance with Laws. Each portion of the Mortgaged Property shall be operated and maintained in accordance with all applicable laws, rules and regulations relating thereto.
(b) Status of Title to Mortgaged Property. Borrower shall not transfer control or ownership of the Mortgaged Property or any part thereof, directly or indirectly, voluntarily or involuntarily, without the prior written approval of the Bank. Borrower agrees to bond off or discharge a filed lien which may become superior to the lien of the Bank within sixty (60) days from the filing date thereof. In general, the Borrower shall keep the title to the Mortgaged Property good and marketable and free of any matter which would prevent any title insurance company from certifying the lien of the Bank is other than a good and valid first lien upon the Mortgaged Property. Notwithstanding the foregoing, the Bank may in its non-reviewable discretion and upon such terms and conditions as it determines prudent, consent to a transfer of the legal or equitable ownership of the Mortgaged Property and an assumption of the Loan in conjunction therewith upon the following terms and conditions (a “Transfer”):
(i) no Event of Default or event or circumstance which, with the passage of time or the giving of notice or both would constitute an Event of Default under any of the Loan Documents shall have occurred and remain uncured at the time the Loan is to be assumed;
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(ii) the proposed transferee (the “Transferee”) shall have executed and delivered to the Bank an assumption agreement in form and substance satisfactory to the Bank evidencing the Transferee’s agreement to abide and be bound by the terms of the Loan Documents and shall have provided the Bank with such legal opinions and title insurance endorsements as may be reasonably requested by the Bank;
(c) Commitment Fee. None
(d) Environmental Matters. Borrower will not, and will not permit any tenant or other occupant of the Mortgaged 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 Mortgaged Property in violation of any applicable federal, state or local laws or regulations. The Borrower shall promptly shall 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 Mortgaged Property of which the Borrower has actual knowledge or the discovery of any Hazardous Substances or Wastes in violation of applicable law at the Mortgaged Property or on any real property adjoining or in the vicinity of the Mortgaged Property.
(e) Financial Statements. During the term of the loan, Borrower and Guarantors agree to provide the following financial reports in the format and frequency as outlined below:
Annual:
Annually within One Hundred Twenty (90) days following the end of the fiscal year or within thirty (30) days of filing.
| ● | 10-K financial statements for ImmuCell Corporation |
In addition, the bank reserves the right to request complete tax returns on any partnerships, corporations or entities in which the Borrower or Guarantors have 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 Lender’s notice to Borrower of such default, and Borrower shall thereupon be obligated to pay interest at the Default Interest Rate.
(f) 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.
(g) Address. The Borrower shall notify the Bank of any change in address for the Borrower.
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(h) Books and Records. The Borrower shall keep complete and accurate books and records in accordance with generally accepted accounting principles consistently applied. 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.
(i) 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.
(j) Changed Circumstances. The Borrower shall promptly notify the Bank of any 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.
(k) 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.
(l) Closing Costs. The Borrower shall pay all reasonable expenses including, but not limited to, title company premiums and charges, fees of the Bank’s counsel, 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.
(m) Additional Appraisals. If the Bank reasonably determines that the value of the Mortgaged Property may have materially diminished since the date of this Agreement or there is an Event of Default, then the Bank shall have the right to obtain an updated appraisal in form and substance satisfactory to the Bank meeting the same requirements as the initial appraisal required by the Commitment. The Borrower shall be required to pay for any such appraisal obtained once during the term of the Loan, as the case may be.
(n) Deposit Accounts. Borrower shall maintain its depository accounts with the Bank for the duration of the Loan.
(o) Intentionally Omitted.
(p) 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.
(q) Debt Service Coverage Ratio. The Borrower shall maintain a combined minimum debt service coverage ratio of 1.35x, to be tested annually starting December 31, 2020. 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.
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(r) Encumbrances. Borrower shall keep valid and unimpaired the Mortgage and the other 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.
(s) Bond. Borrower shall bond off under the provisions of applicable law any lien or claim of lien filed for record, insure over or deposit with the Title Insurer an amount of cash sufficient to satisfy said lien or claim, within thirty (30) days of the date of filing of said claim.
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 any of the properties described in the Mortgage and/or the other Loan Documents or convey, assign, transfer, dispose of or encumber any personal property used or useful in the operation of the Project.
(b) Declare, make or pay any distributions on or of capital of Borrower, 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. In the event that the Loan is refinanced with another bank, the Borrower shall pay a one-time penalty equal to One Percent (1%) of the outstanding loan balance; provided, however, that such prepayment penalty shall not apply to any prepayment to the extent funded by a loan or grant received by the Borrower from the Maine Technology Institute (“MTI”), which MTI loan is subordinated to all indebtedness owing by the Borrower to the Lender.
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.
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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 respective 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.
9. Default.
(a) Events of Default. The occurrence of any one or more of the following events shall, which goes uncured beyond any applicable cure period, 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 within ten (10) days after the same shall become due and payable, whether at maturity or by acceleration or otherwise;
(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 or from the Bank to the Borrower;
(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 sixty (60) days;
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(vii) The Mortgaged Property shall be materially injured or destroyed by fire or other casualty for which the cost of restoration is not fully insured or, if fully insured, the Borrower has failed to deposit or cause to be deposited with the Bank sufficient funds to cover the cost of restoration with the Bank in accordance with the terms of the Mortgage;
(viii) Except as may be otherwise specifically permitted herein, any change in the ownership of the Mortgaged 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.
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(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).
(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 Mortgage 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 Mortgage 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 Mortgaged 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, results of operations or prospects 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, or
(d) impairs materially the ability of the Bank to enforce its legal remedies pursuant to the Loan Documents.
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12. Insurance.
(a) Insurance. Borrower shall maintain hazard insurance on the collateral property 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. 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) Flood Insurance. If the Building is located in a FEMA Special Flood Hazard Zone, the Borrower shall be required to provide and maintain flood insurance in the maximum amount available but not in excess of the Loan amount. Additionally, Flood Insurance on Contents may also be required. “Gorham Savings Bank, its successors and assigns” shall be named in the mortgagee loss payable clause. Each policy shall provide that it cannot be canceled, reduced or terminated without thirty (30) days prior written notice to Bank.
(c) Insurance Mailing Address. All required insurance policies and/or notices shall be mailed to:
Gorham Savings Bank
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.
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(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 Mortgaged 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.
(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 04103 | |
| with a copy to | David Champoux, Esq. |
| Borrower’s attorney: | Pierce Atwood, LLP |
| Merrill’s Wharf | |
| 254 Commercial Street | |
| Portland, ME 04101 | |
| The Bank: | Gorham Savings Bank |
| Attn: Nicholas Weightman, Sr. Vice President | |
| 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.
(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 | ||
| /s/ Adam S. Taylor | /s/ Nicholas Weightman | ||
| By: | Nicholas Weightman | ||
| Its: | Sr. Vice President | ||
| WITNESS | IMMUCELL CORPORATION | ||
| /s/ David J. Champoux | /s/ Michael Brigham | ||
| By: | Michael F. Brigham | ||
| Its: | President & CEO | ||
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EXHIBIT A
LEGAL DESCRIPTION OF THE
MORTGAGED PROPERTY
56 Evergreen Drive, Portland, Maine
A certain lot or parcel of land situated in the City of Portland, County of Cumberland, and the State of Maine, being Lot 3 as shown on plan entitled “Evergreen Industrial Park” dated November 2, 1984, by Land Use Consultants and recorded in the Cumberland County Registry of Deeds in Plan Book 146, Page 57, being more particularly bounded and described as follows:
BEGINNING at an iron bar set on the westerly boundary of land conveyed by Riverside Industrial Park, Inc. to Robert Mitchell Co., Inc. recorded in said Registry of Deeds in Book 4806, Page 108, said iron bar being located S 41° 04’ 09” E, 435’ from an iron bar set at the assumed southeasterly sideline of Riverside Street and the most northwesterly corner of said Mitchell;
Thence S 41° 04’ 09” E along said Mitchell 278.01’ to an iron bar;
Thence S 52º 30’ W along Lot 4, as shown on said plan 244.35’ to an iron bar set on the northeasterly sideline of Evergreen Drive as shown on said plan;
Thence NORTHWESTERLY along said Evergreen Drive following a curve to the left having a radius of 425’, 200’ to an iron bar;
Thence N 35° 16’ 35” E along Lot 2 as shown on said plan 287.01’ to the point of beginning.
TOGETHER WITH the benefit of rights and easements granted to ImmuCell Corporation by 1039 Riverside LLC and Second Tee Business Park Condominium Association as set forth in an Easement Deed dated December 21, 2015 and recorded in the Cumberland County Registry of Deeds in Book 32810, Page 24, subject to all terms and conditions set forth in said instrument.
Unit 11, Second Tee Business Park Condominium, 33 Caddie Lane, Portland, Maine
A certain condominium unit located on Riverside Street in the City of Portland, County of Cumberland and State of Maine, being Unit 11, plus an undivided interest in the common areas and facilities, all as more particularly described in the Declaration of Condominium for Second Tee Business Park Condominium, pursuant to the Maine Condominium Act, Chapter 31 of Title 33 of the Maine Revised Statutes, dated May 17, 2004, and recorded in the Cumberland County Registry of Deeds in Book 21286, Page 289, as amended by a First Amendment dated November 24, 2004 and recorded in said Registry of Deeds in Book 22142, Page 166, as amended by a Second Amendment dated October 6, 2005 and recorded in said Registry of Deeds in Book 23244, Page 49, as amended by a Third Amendment dated September 25, 2006 and recorded in said Registry of Deeds in Book 24400, Page 271, as amended by a Fourth Amendment dated November 30, 2015 and recorded in said Registry of Deeds in Book 32810, Page 1, and as amended by a Fifth Amendment dated January 18, 2017 and recorded in said Registry of Deeds in Book 33787, page 232 (the “Declaration”).
The perimeter boundaries of said Unit and the common areas are shown on a certain survey and condominium plat entitled “Fifth Amended Condominium Plat of Second Tee Business Park Condominium” prepared by Owen Haskell, Inc., dated November 18, 2004, as revised January 2017, approved by the City of Portland Planning Authority on January 17, 2017, and recorded on January 18, 2017 in the Cumberland County Registry of Deeds in Plan Book 217, Page 20 (the “Plat”).
The above-described premises are conveyed subject to the Declaration and the Plat, and together with the easements, rights, benefits and terms thereof.
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Exhibit 99.5
LOAN AGREEMENT
THIS LOAN AGREEMENT (“Agreement”) effective as of the 11th day of March, 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 THREE MILLION FIVE HUNDRED THOUSAND and 00/100 dollars ($3,500,000.00) TERM LOAN and ONE MILLION and 00/100 DOLLARS ($1,000,000.00) OPERATING LINE OF CREDIT to Borrower for purposes of refinancing existing corporate debt of the Borrower and providing a working capital line of credit for the Borrower, in connection with the Bank issued commitment letter to the Borrower dated February 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 subject to the terms herein up to the sum of ONE MILLION and 00/100 dollars ($1,000,000.00) OPERATING LINE OF CREDIT, and THREE MILLION FIVE HUNDRED THOUSAND and 00/100 DOLLARS ($3,500,000.00) TERM LOAN to Borrower (collectively the “Loan”) for the purpose of refinancing existing corporate debt of the Borrower, and to provide a working capital line of credit for the ongoing development of Borrower’s business. 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 (as needed by Borrower in the case of the line of credit), 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 Notes more particularly set forth. The Loan shall be evidenced by the Notes, and repayment of the Notes 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 and Line of Credit Agreement dated March 10, 2020, in the principal sums of Three Million Five Hundred Thousand Dollars ($3,500,000.00) and One Million Dollars ($1,000,000.00), respectively (collectively the “Notes”), 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 Notes.
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(ii) As security for the Notes 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 33 Caddie Lane, Portland, Maine and the Borrower’s other various operating locations (as hereinafter defined), and all renewals and replacements thereof or additions thereto, all as more specifically described in the Security Agreement (collectively the “Security Agreement”).
(B) Uniform Commercial Code financing statements in favor of the Bank perfecting the Bank’s security interests granted pursuant to the Mortgage in all fixtures now owned or hereafter acquired by the Borrower and located on or used in connection with any portion of the Mortgaged Property (the “UCCs”) or any other property used by the Borrower.
(C) 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, and furniture.
(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 Notes, Security Agreement, UCCs, Environmental Indemnity 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, the Guarantor, 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.
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(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.
(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 Mortgaged Property 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 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 acquired business by Borrower as contemplated; 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.
(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 and the purchase of new equipment and to establish new working capital, which line of credit will be reviewed for renewal annually (commencing March 10, 2022).
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, a fee of One Thousand Dollars ($1,000.00), 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 shall 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 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 Lender’s notice to Borrower of such default, and Borrower shall thereupon be obligated to pay interest at the Default Interest Rate.
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(f) 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.
(g) Address. The Borrower shall notify the Bank of any change in address for the Borrower.
(h) 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.
(i) 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.
(j) 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.
(k) 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.
(l) Closing Costs. The Borrower shall pay all reasonable expenses including, but not limited to, title company premiums and charges, fees of the Bank’s counsel (in an amount not to exceed $4,500), 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.
(m) Additional Appraisals. If the Bank reasonably determines that the value of the Mortgaged Property may have materially diminished since the date of this Agreement or there is an Event of Default, then the Bank shall have the right to obtain an updated appraisal in form and substance satisfactory to the Bank meeting the same requirements as the initial appraisal required by the Commitment. The Borrower shall be required to pay for any such appraisal obtained once during the term of the Loan, as the case may be.
(n) Deposit Accounts. Borrower shall maintain its primary depository account with the Bank for the duration of the Loan.
(o) Advances Under $1,000,000 Line of Credit. Advances under the Line of Credit require an annual review of the financials of the Borrower (commencing March 10, 2022). The maximum term of the Line of Credit without written renewal shall be two years from March 10, 2020.
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(p) 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.
(q) Financial Covenants. The Borrower shall maintain a combined minimum debt service coverage ratio of 1.35x, to be tested annually starting December 31, 2020. 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.
(r) Encumbrances. 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.
(s) Bond. Borrower shall bond off under the provisions of applicable law any lien or claim of lien filed for record, insure over or deposit with the Title Insurer an amount of cash sufficient to satisfy said lien or claim, within ninety (90) days of the date of filing of said claim.
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 acquired 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(q) 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 above-described $3,500,000 term loan is refinanced by the Borrower with another bank, the Borrower shall pay a one-time prepayment penalty in an amount equal to One Percent (1.0%) of the then outstanding balance of said loan; provided, however, that such prepayment penalty shall not apply to any prepayment to the extent funded by a loan or grant received by the Borrower from the Maine Technology Institute (“MTI”), which MTI loan is subordinated to all indebtedness owing by the Borrower to the Lender. Prepayment in whole or in part is permitted at any time during the term of the above-described Line of Credit loan.
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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 respective 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.
9. Default.
(a) Events of Default. The occurrence of any one or more of the following events shall, which goes uncured beyond any applicable cure period, 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 Notes or under any of the other Loan Documents after the same shall become due and payable, whether at maturity or by acceleration or otherwise;
(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 or from the Bank to the Borrower which is not cured within any applicable cure period;
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(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 with the Bank in accordance with the terms of the Security Agreement;
(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.
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(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).
(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.
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(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 Notes, the Loan shall bear interest, at a rate of five (5%) over the interest rate provided for by the Notes (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.
(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.
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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, results of operations or prospects 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, 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 property 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.
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.
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(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.
(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
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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.
(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 | ||
| /s/ Adam S. Taylor | /s/ Nicholas Weightman | ||
| By: | Nicholas Weightman | ||
| Its: | Executive Vice President | ||
| IMMUCELL CORPORATION | |||
| /s/ David J. Champoux | /s/ Michael F. Brigham | ||
| By: | Michael F. Brigham | ||
| Its | President & CEO | ||
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Exhibit 99.6
LINE OF CREDIT AGREEMENT
(Working Capital Line)
THIS LINE OF CREDIT AGREEMENT is by and between IMMUCELL CORPORATION, a Delaware corporation with principal place of business at 56 Evergreen Drive, Portland, County of Cumberland and State of Maine (“Borrower”) and GORHAM SAVINGS BANK, a Maine banking corporation with a principal place of business at 10 Wentworth Drive, Gorham, Maine 04038 (“Lender”).
IN CONSIDERATION of the mutual covenants and promises hereinafter set forth, Borrower and Lender hereby AGREE as follows:
Section 1 - General Terms and Credit Arrangements
1.1 Subject to the terms of this Agreement, Lender agrees to make advances to Borrower which shall not exceed at any one time outstanding of One Million and 00/100 Dollars ($1,000,000.00) (the “Ceiling Amount”) except in the sole discretion of Lender, which the Borrower may borrow in full or in part, repay in full or in part, and reborrow, in accordance with the terms of this Agreement. All advances made after the date hereof shall be made by written request by Borrower to Lender on Lender’s form (or a form acceptable to Lender), signed by the Borrower’s chief executive officer, or other officer duly authorized by the Borrower or by telephone request at Lender’s option as provided below. At Lender’s sole option, if checks are presented on Borrower’s checking account(s) for which sufficient funds are not available, Lender may advance on this Line of Credit to cover such checks but Lender shall not have any duty to do so. This commitment shall expire on the first to occur of the following: (a) the occurrence of an event of default defined in Section 5 below; or (b) upon the expiration of the term of this Line or Credit set forth in Paragraph 1.3.
The Debtor hereby authorizes any one of the following persons to request advances hereunder by telephone (a “Telephone Advance Request”) or by facsimile telecopier (a “Facsimile Advance Request). Telephone Advance Requests shall be followed by written confirmation transmitted by telecopier if requested by Lender. Facsimile Advance Requests shall be followed by telephone confirmation transmitted if requested by Lender. Lender shall have no obligation to inquire into the circumstances, use, purpose, disposition or application of funds advanced pursuant to a Telephone Advance Request or a Facsimile Advance Request and shall have no liability relating thereto. Lender may, in its sole discretion, terminate telephonic and/or facsimile advance request authority at any time and require written loan requests. Authorized Persons for Telephone Advance Requests and Facsimile Advance Requests are: Michael F. Brigham and Elizabeth S. Toothaker and any individuals Borrower subsequently advises Lender in writing as being authorized to request advances hereunder.
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1.2 The rate of interest on advances hereunder will adjust in accordance with One (1) Month London Inter Bank Offer Rate (LIBOR) published on Bloomberg Page BBAM1. The current One (1) Month LIBOR is 1.70363 percent. The interest rate shall be a variable rate equal to the One (1) Month LIBOR plus Two and 15/100 percent (2.15%) per annum. The interest rate shall be adjusted on the first day of each month or, if no such LIBOR rate is published on that day, the next business day for which such LIBOR rate is published provided, however, that if LIBOR as determined above would be less than zero, then such rate, at the election of Bank, shall be deemed to be zero for purposes of the Loan. The interest rate shall have a floor of 3.25 percent. If Lender shall reasonably determine (which determination shall be conclusive and binding absent manifest error) that the LIBOR Interest Rate is no longer available or reasonable and adequate means do not exist for ascertaining the LIBOR Interest Rate, Lender shall give written notice thereof to Borrower and after the giving of such notice, until any such notice has been withdrawn by Lender, the principal amount of the loan hereunder shall bear interest at an alternative index or base rate as reasonably determined by Lender in its discretion as a substitute for LIBOR as defined above (based on substitute rates then being used by a significant number of U.S. money center lending institutions), plus a margin percentage equal to the LIBOR Margin.
The Borrower acknowledges that the interest rate on this Agreement is variable as aforesaid and agrees that no such adjustment in the interest rate on this Agreement will in any way alter, discharge or affect the liability of any co-signer, co-maker or endorser hereunder and the Borrower hereby waives any right of notice of such changes or adjustments in the interest rate hereunder.
This Agreement is subject to the condition that at no time shall the Borrower or other parties liable herefor be obligated or required to pay interest at a rate which could subject the Lender, or any subsequent holder hereof, to either civil or criminal liability, forfeiture or loss of principal, interest or other sums as a result of being in excess of the maximum interest rate which Borrower or other liable parties are permitted by law to contract or agree to pay or which the Lender or any subsequent holder hereof, is permitted to receive. If by the terms of this Agreement, Borrower is at any time required or obligated to pay interest at a rate in excess of such maximum rate, the rate of interest under this Agreement is reduced to such maximum rate for so long as such maximum rate shall be in effect, and shall thereafter be payable at the rate provided in this Agreement.
1.3 The term of this Line of Credit shall expire on March 10, 2022, and may be renewed yearly at Lender’s sole discretion in writing, subject to review of credit and pricing. Unless renewed in writing, this Line of Credit will expire on March 10, 2022, unless sooner demanded.
1.4 The Monthly Payment Date shall be one (1) month from the date of this Agreement and continuing on the same day of each and every month hereafter during the term of this Agreement. Borrower agrees to pay all interest due pursuant to Section 1.2 hereof on each Monthly Payment Date.
If such monthly interest payment is not paid in full within ten (10) days of its due date, Borrower shall pay to Lender a late fee on such unpaid amount equal to six percent (6%) of such late payment. Borrower further agrees that Lender’s acceptance of late payments on any occasion shall not waive Lender’s right to require timely payments on any other occasion.
Lender shall have the right to charge interest on the unpaid principal balance hereof at an interest rate five percent (5%) per annum in excess of the rate of interest otherwise payable as provided herein, for any period during which Borrower or any party liable herefor shall be in default under any material provision of this Agreement or any other Loan Documents, including without limitation any monetary or payment defaults, subject to notice, if required, and expiration of any applicable cure period, if any. In the event of default hereunder or under any other 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 or under such other Loan Documents, as applicable.
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1.5 Borrower promises to pay, to the order of Lender, its successors and assigns, at its offices at 10 Wentworth Drive, Gorham, Maine or such other banking office as Lender may direct, all balances outstanding under this Agreement, with all accrued and any unpaid interest and any charges provided for herein, all as provided hereunder.
The commitment of Lender to make advances under this Agreement shall be suspended upon the occurrence (and during the continuation) of a default hereunder or under any other Loan Documents whether or not any applicable grace period has expired, whether or not a demand for payment has been made. All other rights and duties of the parties hereto shall continue in full force and effect until the total sums due Lender hereunder, including principal, interest and any other charges provided for herein (including any advances which may, in Lender’s sole discretion, be made in excess of the Ceiling Amount), are paid in full. Borrower may terminate this Agreement at any time upon delivery of notice to Lender, accompanied by payment of all balances outstanding under this Agreement (including any advances which may, in Lender’s sole discretion, be made in excess of the Ceiling Amount), with interest thereon and any other charges provided for herein to the date of receipt of payment.
All payments received by Lender hereunder shall be credited first to accrued but unpaid interest and costs, and thereafter to principal.
1.6 Except as expressly stated in this Agreement, Lender does not directly or indirectly have any obligation or duty of any kind whatsoever to renew or extend any indebtedness of Borrower to Lender, to grant or extend any further loans or credit to Borrower, to amend, modify or supplement this Agreement, or to otherwise alter its present rights, powers or remedies.
Section 2 - Representations and Warranties.
The Borrower represents, warrants and covenants to Lender that:
2.1 The Borrower is validly organized and is duly existing and in good standing under the laws of the State of Delaware; and if the character of the properties owned or the nature of activities conducted by the Borrower makes qualification or licensing necessary in other jurisdictions, the Borrower agrees that it has become and will remain qualified or licensed in such other jurisdictions; and the Borrower further agrees that it will not change its name, enter into any merger, consolidation, reorganization or recapitalization or reclassify its ownership interest.
2.2 This Agreement evidences a loan for business and commercial purposes and not for personal, family or household purposes.
2.3 The chief executive office of the Borrower is located at 56 Evergreen Drive, Portland, Maine 04010; and the Borrower will not change its chief executive office without at least thirty (30) days prior written notice to Lender.
2.4 The execution, delivery and performance of this Agreement, and the obligations set forth herein, and any other instruments, documents or agreements evidencing, securing or governing this Agreement and the obligations set forth herein are within the powers of the Borrower, have been duly authorized and all necessary actions have been taken and are not in contravention of law, and do not constitute a breach of any of the provisions contained in the Borrower’s certificate of incorporation or bylaws, or conflict with any material agreement or obligation of the Borrower, and the execution, delivery and performance of this Agreement, and each of the other documents executed in connection herewith does not constitute a breach of any material agreement to which the Borrower is a party or by which it or any of its properties are bound.
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2.5 Except with the prior written consent of the Lender, the Borrower will not conduct business under any trade name or assumed name, except ImmuCell Corporation and the Borrower has not, within the past six (6) years: (a) conducted business under any other names, (b) changed its name, or (c) been the surviving or resulting entity of any merger or consolidation.
2.6 Except for liens and security interests expressly allowed in writing by Lender in its commitment letter dated February 19, 2020, the Borrower will not pledge, mortgage or create or suffer to exist a security interest in or lien on any of its assets except in favor of Lender, nor permit or suffer to exist the issuance of any attachment, trustee process or execution against any of its assets in favor of any person which is not promptly discharged other than the Lender, and except for liens for current and nondelinquent taxes not yet due or being contested in good faith and by appropriate proceedings diligently pursued, and pre-judgment attachments and prejudgment trustee process, without levy or seizure by the plaintiff in such action, which are being contested in good faith by appropriate proceedings diligently pursued.
2.7 The Borrower shall have and maintain at all times insurance, including, without limitation, workers’ compensation insurance, comprehensive general liability insurance, casualty and extended coverage insurance, and flood insurance, if required. Such insurance shall be issued by a company reasonably acceptable to Lender and in such amounts and on such terms as are reasonably satisfactory to Lender. Each such policy shall contain a provision whereby they cannot be canceled except after ten (10) days prior written notice to the Lender. In the event of a failure to provide and maintain insurance as provided herein, the Lender may, at its option but with no obligation, acquire such insurance and charge the amount paid therefor to the Borrower whereupon such obligations shall be an obligation hereunder. The Borrower shall furnish to the Lender certificates or other evidence satisfactory to the Lender of compliance with the foregoing provisions regarding insurance and, at the request of the Lender, shall furnish to the Lender copies of all such policies.
2.8 The Borrower shall keep all of its assets in good order and repair and adequately insured at all times, and shall maintain and operate such assets in compliance with all laws, and with regulations, ordinances or contractual undertakings governing the same, the non-compliance with which would have a material adverse effect on the Borrower.
2.9 The Borrower shall immediately notify the Lender of any material loss in the value of any of its assets, other than loss resulting from ordinary depreciation, or amortization or depletion taken in accordance with generally accepted accounting principles.
2.10 The Borrower shall pay or cause to be paid promptly when due all taxes and assessments on the collateral which secure Borrower’s obligations to Lender hereunder or under any of the Loan Documents for its use or operation, except for taxes and assessments contested in good faith by appropriate proceedings, promptly initiated and diligently conducted, and provided that the Borrower shall make such reserve or other appropriate provision, if any, as shall be required by generally accepted accounting principles.
2.11 All financial data and statements provided by the Borrower to Lender fairly represent the financial condition of the Borrower in all material respects, and do not contain any untrue statement of a material fact or omit to state any material fact necessary to make the statements herein or therein contained not materially misleading, and all other information furnished Lender shall be accurate and complete in all material respects insofar as necessary to give Lender a true and accurate description of the Borrower’s financial condition.
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2.12 Neither the Borrower nor any of its respective guarantors is required to obtain any order, consent, approval or authorization of, or required to make any declaration or filing with, any governmental authority in connection with the execution or delivery of this Agreement or the obligations set forth herein or in any other document executed by the Borrower in connection herewith.
2.13 The Borrower has complied with all applicable laws pertaining to the products that it manufactures or sells, the conduct of its business and the use, maintenance and operation (present and/or contemplated) of the real and personal property owned or leased by it in the conduct of its business, including, without limitation, all applicable environmental, hazardous waste and land use laws, statutes, ordinances, regulations and orders.
2.14 The Borrower will furnish, or cause to be furnished, to Lender such financial information as required in Lender’s commitment letter dated February 19, 2020, in such detail and by such dates as required under the commitment letter. The Borrower will permit Lender to inspect the books, financial records and any of the properties or assets of the Borrower and guarantor(s) upon reasonable prior notice and at such reasonable times as Lender may from time to time request.
2.15 The Borrower has good and marketable title to all of its assets, none of which are subject to any security interest, encumbrances or lien, claim of any third person except as specifically noted in Lender’s commitment letter dated February 19, 2020; and the Borrower will not sell, lease, transfer or otherwise dispose of all or any material part of its assets (other than as permitted herein), or create, incur, assume or become or remain liable in respect of any indebtedness, other than the obligations set forth herein, and current liabilities of the Borrower incurred in the ordinary course of its business and in accordance with customary trade practices.
2.16 The Borrower has timely filed all federal, state and local tax returns and other reports required by applicable laws to have been filed prior to the date hereof, has paid or caused to be paid all taxes, assessments and other governmental charges that are due and payable prior to the date hereof, and has made adequate provision for the payment of such taxes, assessments or other charges accruing but not yet payable, and that the Borrower has no knowledge of any deficiency or additional assessment in connection with any taxes, assessments or charges.
2.17 The Borrower shall promptly give notice in writing to Lender of any material adverse change in the business affairs of the Borrower and of the existence of any material litigation or administrative proceedings involving Borrower.
2.18 The Borrower shall not alter its form of business organization without the prior written consent of Lender.
Section 3 - Special Financial Covenants
3.1 The Borrower shall not make any loans to or for the benefit of any shareholder of the Borrower.
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Section 4 - Security
This Line of Credit Agreement, and all amounts advanced hereunder and/or due hereunder, are secured and governed by:
4.1 This Agreement and a certain Commitment Letter issued by Bank dated February 19, 2020, provided, however, that in the event of any conflict, the terms of this Agreement shall prevail but such documents shall be interpreted as being consistent with one another and cumulative in their requirements where possible;
4.2 A valid perfected first security interest from Borrower in all business assets including, but not limited to, machinery, equipment, accounts receivable and inventory. This Agreement may also be secured by documents executed in the future by Borrower or by any Guarantor. This Agreement may also secured by existing security agreements, guaranties or other documents if the provisions of such existing documents state that they shall secure all future obligations or liabilities of Borrower to Lender. All documents which secure or guaranty this Agreement, whether executed prior hereto, on even date herewith or in the future, are referred to herein as “Loan Documents”.
Section 5 - Events of Default
Borrower agrees that all advances outstanding hereunder, together with all interest and other charges as provided for herein, as applicable, shall immediately become due and payable, and the Lender’s commitment to make further advances to the Borrower under this Agreement shall automatically and immediately cease and be terminated, all without notice or demand of any nature whatsoever, upon the occurrence of any one or more of the following events, each of which shall constitute an event of default hereunder (“Events of Default”):
5.1 Default in the due and punctual payment of any payment of the principal, premium, if any, or interest on any of the obligations set forth herein as and when the same shall become due and payable; or
5.2 Default or breach in the due performance or observance of any covenant, agreement or provision of this Agreement or any of the Loan Documents and such default or breach shall continue beyond the applicable cure period, if any; or
5.3 Default in the due and punctual payment of any other indebtedness or default or breach in the due performance of any covenant, agreement or provision of any agreement of the Borrower to Lender or (in an amount greater than $25,000) to any secured third party, which default and/or breach shall not have been cured within the applicable cure period, if any; or
5.4 If any representation, statement, report or certificate made or delivered by the Borrower, or by any maker, principal or guarantor for any of the obligations set forth herein or of any of the Loan Documents is false or incorrect in any material respect when made or delivered, or if the Borrower fails to furnish financial information or permit inspections as provided herein or in any other of the Loan Documents; or
5.5 If any attachment, trustee process, lien, execution, levy or receivership (other than pre-judgment attachments and pre-judgment trustee process, without levy or seizure by plaintiff in such action, which are being contested in good faith by appropriate proceedings diligently pursued) is issued or made against the Borrower or any maker, co-maker, principal, or guarantor of the obligations set forth herein, or any assets owned by either of the Borrower or any maker, co-maker, principal or guarantor and is not removed within ten (10) days (but this shall not preclude Lender from immediately setting off on any account balances) or if any final judgment or execution against the Borrower remains unsatisfied for a period of ten (10) days; or
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5.6 If the Borrower or any maker, co-maker, principal or guarantor fails to pay or escrow any tax assessment or other assessments and charges on its assets, as provided herein or in any of the Loan Documents, or fails to maintain any insurance policy the Borrower or any maker, co-maker, principal or guarantor is required to provide to or for the benefit of the Lender; or
5.7 The Borrower or any guarantor or any person liable for the obligations set forth herein shall make an assignment for the benefit of creditors, file a petition in bankruptcy, petition or apply to any tribunal for the appointment of a custodian, receiver or any trustee for them or a material part of their assets, or shall commence or be subject to any proceeding under bankruptcy, reorganization, arrangement, readjustment of debt, dissolution or liquidation law or statute of any jurisdiction, whether now or hereafter in effect; or
5.8 If there shall have been filed any such petition or application as described in Paragraph 5.7 above, or any such proceeding shall have been commenced against the Borrower, or any guarantor, or any person liable for the obligations hereunder or of any of the Loan Documents, in which an order for relief is entered, and if any such proceeding, petition, application or order remains undismissed for a period of ten (10) days or more; or
5.9 If the Borrower or any person liable for the obligations hereunder or under any of the Loan Documents by any act or omission shall indicate their consent to, approval of or acquiescence in any such petition, application or proceeding or order for relief of the appointment of a custodian, receiver or any trustee for them or any material part of any of their properties, or shall suffer any such custodianship, receivership or trusteeship to continue undischarged for a period of ten (10) days or more; or
5.10 Such a change in the condition or affairs (financial or otherwise) of the Borrower or any person liable for the obligations hereunder, or decline in the value of the assets of the Borrower or any person liable for the obligations hereunder, as, in the reasonable opinion of the Lender, materially impairs the Lender’s security or increases its risk; or
5.11 Any breach by the Borrower or any guarantor, if applicable, of the special financial covenants set forth in Section 3 herein.
Section 6 - Miscellaneous
6.1 All notices, request and demands to or upon the respective parties hereto shall be deemed to have been given or made when hand delivered as follows or when deposited in the mails, postage prepaid, addressed as follows or to such other address as may be hereafter designated in writing by the respective parties hereto:
| To Lender: | GORHAM SAVINGS BANK | |
| 10 Wentworth Drive | ||
| Gorham, ME 04038 | ||
| To Borrower: | ImmuCell Corporation | |
| 56 Evergreen Drive | ||
| Portland, ME 04101 |
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6.2 After demand for payment has been made by Lender or upon the occurrence of an Event of Default, whether or not demand for payment has been made, any deposits or other sums credited by or due from Lender to Borrower may be set-off against any and all liabilities hereunder, direct or indirect, absolute or contingent, due or to become due, now existing or hereafter arising, of the Borrower to Lender.
6.3 No failure to exercise and no delay in exercising, on the part of Lender, any right, power or privilege hereunder, shall operate as a wavier 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 or remedies provided by law.
6.4 The Borrower and all other parties liable herefor, whether principal, guarantor, endorser or otherwise, hereby waive demand, notice and protest, and waiver 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 on behalf of Lender, any invalidity or unenforceability of security given herefor, 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 do 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.
BORROWER HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY AND ALL RIGHTS, WHETHER ARISING UNDER THE CONSTITUTIONS OF THE UNITED STATES OR OF ANY STATE, ANY RULES OF CIVIL PROCEDURE, COMMON OR STATUTORY LAW, OR OTHERWISE, TO DEMAND A TRIAL BY JURY IN ANY ACTION, SUIT, PROCEEDING OR COUNTERCLAIM INVOLVING LENDER ARISING OUT OF OR IN ANY WAY CONNECTED WITH THIS AGREEMENT OR ANY OF THE LOAN DOCUMENTS.
6.5 This Agreement shall be binding upon and inure to the benefit of the Borrower, Lender and their respective successors and assigns.
6.6 This Agreement 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.
6.7 If more than one person or entity executes this Agreement in favor of Lender, all obligations shall be joint and several with respect to each.
6.8 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.
6.9 If any term or provision of this Agreement shall be 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.
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6.10 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 AGREEMENT, 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 THE LENDER (WHETHER NOW EXISTING OR CREATED IN THE FUTURE), WHETHER OR NOT THE AMOUNT INVOLVED EXCEEDS $250,000).
6.11 This agreement constitutes the entire and integrated agreement and understanding between the Borrower(s) and Lender, and it supercedes any prior negotiations, representations or agreements, either written or oral. Borrower(s) 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.
IN WITNESS WHEREOF, the parties hereto have caused this Line of Credit Agreement to be executed as an instrument under seal as of March 11, 2020.
| Witness: | IMMUCELL CORPORATION | |
| /s/ David Champoux | /s/ Michael F. Brigham | |
| Michael F. Brigham | ||
| Its President & CEO |
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