Document:

a6130392ex10-4.htm

    Exhibit
10.4

     

    
      [EXECUTION

      COUNTERPART]

       

      CONSENT
AND FIRST AMENDMENT

       

      CONSENT AND FIRST AMENDMENT
dated as of December 30, 2009 (this “Amendment”) by and
among ANIKA THERAPEUTICS, INC., a Massachusetts corporation (“Borrower”); ANIKA
SECURITIES, INC., a Massachusetts securities corporation (“Anika Securities”);
each lender signatory hereto (collectively, the “Lenders” and
individually, a “Lender”); and BANK OF
AMERICA, N.A., as Administrative Agent (as such term is defined in the Credit
Agreement referred to below).

       

      WHEREAS,
the Borrower, Anika Securities, Lenders and Administrative Agent are parties to
a Credit Agreement dated as of January 31, 2008 (as amended from time to time,
the “Credit
Agreement”), pursuant to which the Lenders agreed to make certain loans
to the Borrower.

       

      WHEREAS,
the Borrower has requested the Lenders to consent to the FAB Acquisition
described below and to amend certain provisions of the Credit Agreement, and the
Lenders are willing to consent to the foregoing, all on the terms and conditions
provided herein.

       

      NOW,
THEREFORE, in consideration of the foregoing and the mutual covenants herein
contained, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:

       

      1.           Definitions.  Except
as otherwise defined in this Amendment, terms defined in the Credit Agreement
are used herein as defined therein.

       

      2.           Consent to FAB
Acquisition.  Subject to the satisfaction of the conditions
precedent specified in Section 5 below, but effective as of the date hereof, the
Required Lenders hereby consent to the acquisition by the Borrower, on the terms
and conditions set forth in the FAB Purchase Agreement, from the Seller of 100%
of the outstanding capital stock of FAB owned by the Seller.  For
avoidance of doubt and notwithstanding any other provision of this Amendment,
the foregoing consent shall not be deemed to be a consent to any Change of
Control.

       

      3.           Amendments to Credit
Agreement.  Subject to the satisfaction of the conditions
precedent specified in Section 5 below, but effective as of the date
hereof:

       

      (a)           Section
1.01 of the Credit Agreement shall be amended by adding the following new
definitions in their appropriate alphabetical order:

       

      “Collateral” means all
of the “Collateral” referred to in the Pledge Agreement and all of the other
property that is or is intended under the terms of the Pledge Agreement to be
subject to Liens in favor of the Administrative Agent for the benefit of the
Secured Parties.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

         

      

      “FAB” means Fidia
Advanced Biopolymer S.r.l., a company incorporated under the laws of Italy with
its registered office in Abano Terme (PD), C.A.P. 35031, Via Ponte della
Fabbrica 3/B, VAT number 03641500289 and registered with the Company’s Register
of Padua at number 01510440744, and a wholly-owned Subsidiary of the
Borrower.

       

      “FAB Acquisition”
means the acquisition by the Borrower, on the terms and conditions set forth in
the FAB Purchase Agreement, from the Seller of 100% of the outstanding capital
stock of FAB owned by the Seller.

       

      “FAB Purchase
Agreement” means the Sale and Purchase Agreement dated December 30, 2009
between the Seller and the Borrower, as in effect on December 30,
2009.

       

      “Pledge Agreement”
means the pledge and security agreement among the Borrower, FAB and the
Administrative Agent, in form and substance reasonably satisfactory to the
Administrative Agent, delivered pursuant to and in accordance with Section 6.13
and providing for a pledge by the Borrower of 65% of the equity of FAB in favor
of the Administrative Agent.

       

      “Related Documents”
means the FAB Purchase Agreement and Registration Rights Agreement (as such term
is defined therein).

       

      “Secured Parties”
means, collectively, the Administrative Agent, the Lenders, the Hedge Banks, the
Cash Management Banks, each co-agent or sub-agent appointed by the
Administrative Agent from time to time pursuant to Section 9.05, and the other
Persons the Obligations owing to which are or are purported to be secured by the
Collateral under the terms of the Pledge Agreement.

       

      “Seller” means Fidia
Farmaceutici S.p.A., a company duly incorporated under the laws of
Italy.

       

      (b)           The
definition of  “Applicable Rate” in Section 1.01 of the Credit
Agreement shall be amended by replacing the reference to “0.75%” in clause (b)
of said definition with “1.25%”.

       

      (c)           The
definition of  “Loan Documents” in Section 1.01 of the Credit
Agreement shall be amended by adding the phrase “(including without limitation
the Pledge Agreement)” after the phrase “pursuant to Section 6.13” in said
definition.

       

      (d)           The
first sentence of Section 5.15 of the Credit Agreement shall be amended by
adding the following phrase to the end of said sentence:  “(including
as specifically disclosed in Schedule
5.15)”.

       

      (e)           Section
5.16 of the Credit Agreement shall be amended by adding the phrase “Except as
specifically disclosed in Schedule 5.16,” to
the beginning of said Section 5.16.

       

      
        
          
          

        

        
          2

          
            

          

        

        
          
          

        

         

      

      (f)           Section
6.13 of the Credit Agreement shall be amended by replacing the phrase “(and in
any event within 30 days)” therein with the phrase “(and in any event, on or
before February 26, 2010 for FAB, and within 30 days for any other such
Person)”.

       

      (g)           Section
7.02(c) of the Credit Agreement shall be amended by adding the following phrase
at the end of said Section 7.02(c):

       

      “provided, that the
aggregate amount of Investments made by the Loan Parties in FAB shall not exceed
during each fiscal year set forth below, the amount set forth opposite such
fiscal year:

       

      
        	
                Fiscal
      Year

              	
                Amount

              
	
                2010

              	
                $4,000,000

              
	
                2011

              	
                $600,000

              
	
                2012

              	
                $600,000

              
	
                2013

              	
                $600,000

              
	
                2014

              	
                $600,000

              
	
                2015

              	
                $600,000

              

      

       

      ; provided, further, that (1) so
long as no Default has occurred and is continuing or would result from such
Investment, any portion of any amount set forth above, if not expended in the
fiscal year for which it is permitted above, may be carried over for expenditure
in the next following fiscal year and (2) if any such amount is so carried over,
it will be deemed used in the applicable subsequent fiscal year before the
amount set forth opposite such fiscal year above.”

       

      (h)           Section
7.02(h) of the Credit Agreement shall be amended and restated in its entirety to
read as follows:

       

      “(h)           the
FAB Acquisition; and”

       

      (i)           A
new clause (i) shall be added to Section 7.02 of the Credit Agreement as
follows:

       

      “(i)           so
long as no Default has occurred and is continuing or would result therefrom,
other Investments not exceeding $500,000 in the aggregate in any fiscal year of
the Borrower.”

       

      (j)           A
new Section 7.11 shall be added to the Credit Agreement as follows:

       

      “7.11           FAB Purchase
Agreement.  (a) Cancel or terminate any Related Document or
consent to or accept any cancellation or termination thereof; (b) amend, modify
or change in any material manner any term or condition of any Related Document
or give any consent, waiver or approval thereunder; (c) waive any default under
or any material breach of any term or condition of any Related Document; or (d)
take any other action in connection with any Related Document that would
materially impair the rights or interests of the Administrative Agent or any
Lender.”

       

      
        
          
          

        

        
          3

          
            

          

        

        
          
          

        

         

      

      (k)           Section
8.02(j) of the Credit Agreement shall be amended by adding the following phrase
at the end of said Section 8.02(j):

       

      “or the
Pledge Agreement after delivery thereof pursuant to Section 6.13 shall for any
reason (other than pursuant to the terms thereof) cease to create a valid and
perfected first priority Lien on the Collateral purported to be covered
thereby;”

       

      (l)           
Schedules 5.06, 5.13, 7.01 and 7.03 to the Credit Agreement shall be replaced in
their entirety with Schedules 5.06, 5.13, 7.01 and 7.03 hereto.

       

      (m)          New
Schedules 5.15 and 5.16 shall be added to the Credit Agreement in the forms
attached as Schedules 5.15 and 5.16, respectively, hereto.

       

      4.           Representations and
Warranties.  Each Loan Party represents and warrants to the
Lenders and Administrative Agent that the representations and warranties of such
Loan Party set forth in the Credit Agreement and in each other Loan Document to
which such Loan Party is party are true and correct in all material respects
(except that any representation and warranty that is qualified as to
“materiality” or “Material Adverse Effect” shall be true and correct in all
respects) on the date hereof, as if made on and as of the date hereof (except to
the extent that such representations and warranties expressly relate to an
earlier date), after giving effect to the FAB Acquisition, and as if each
reference therein to the Credit Agreement included reference to this Amendment
and the Credit Agreement as amended hereby.

       

      5.           Conditions
Precedent.  This Amendment shall become effective, as of the
date hereof, upon the Administrative Agent’s receipt of the following, each in
form and substance satisfactory to the Administrative Agent and the
Lenders:

       

      (a)           this
Amendment, duly executed and delivered by the Loan Parties and Required
Lenders;

       

      (b)           such
certificates of resolutions or other action, incumbency certificates and/or
other certificates of Responsible Officers of each Loan Party as the
Administrative Agent may reasonably require evidencing the identity, authority
and capacity of each Responsible Officer thereof authorized to act as a
Responsible Officer in connection with the Loan Documents to which such Loan
Party is a party or is to be a party;

       

      (c)           such
documents and certifications as the Administrative Agent may reasonably require
to evidence that FAB is duly organized or formed, and that FAB is validly
existing, in good standing and qualified to engage in business in
Italy;

       

      (d)           confirmation
satisfactory to the Required Lenders of the consummation of the FAB Acquisition
strictly in accordance with the terms of the FAB Purchase Agreement (other than
the consent of the Required Lenders), without any waiver or amendment not
consented to by the Required Lenders of any term, provision or condition set
forth therein, and in compliance with all applicable requirements of
Law;

       

      
        
          
          

        

        
          4

          
            

          

        

        
          
          

        

         

      

      (e)           certificates
attesting to the solvency of each Loan Party before and after giving effect to
the FAB Acquisition, from its chief financial officer;

       

      (f)           an
officer’s certificate of the Loan Parties, (1) to the effect set forth in
Sections 4, 5(g) and 5(h) hereof, and (2) attaching a certified, true and
correct copy of the FAB Purchase Agreement and related documents;

       

      (g)           evidence
that no Default shall have occurred and be continuing, nor shall any Default
result from the consummation of the transactions contemplated herein and in the
FAB Purchase Agreement;

       

      (h)          evidence
that all consents (other than the consent of the Lenders), licenses and
approvals required in connection with the execution, delivery and performance by
the Loan Parties of this Amendment, the FAB Acquisition, the FAB Purchase
Agreement and the transactions contemplated hereby and thereby shall have been
obtained and shall be in full force and effect;

       

      (i)           evidence
that the Borrower shall have paid in full to the Administrative Agent for
account of the Lenders a non-refundable amendment fee equal to $74,000, which
fee shall be fully earned, due and payable on the date of this Amendment and
which fee shall not be refunded in whole or in part under any
circumstance;

       

      (j)           evidence
that the Borrower shall have paid in full to the Administrative Agent all
invoiced costs and expenses (including reasonable attorneys’ fees) incurred on
behalf of the Administrative Agent in connection with this Amendment;
and

       

      (k)          such
other certificates or documents as the Administrative Agent may reasonably
require.

       

      The Loan
Parties agree that the amendment fee described in Section 5(i) hereof shall be
fully earned when paid and shall not be refundable for any reason
whatsoever.

       

      6.           Condition
Subsequent.  To induce the Lenders to consent to the FAB
Acquisition and the amendments to the Credit Agreement set forth in Section 3
hereof prior to the satisfaction of certain requirements of Section 6.13 of the
Credit Agreement, and without limiting any other provisions contained in the
Credit Agreement or the other Loan Documents, the Borrower hereby agrees to
deliver to the Administrative Agent, on or before February 26, 2010, the
following documents, each in form and substance satisfactory to the
Administrative Agent and the Lenders:

       

      (a)           the
Pledge Agreement, duly executed and delivered by each of the parties thereto,
together with evidence of the completion of all actions, recordings and filings
of or with respect to the Pledge Agreement that the Administrative Agent may
deem necessary or desirable in order to perfect the Liens created
thereby;

       

      (b)           documents
of the types referred to in clauses (iii) and (iv) of Section 4.01(a) of the
Credit Agreement; and

       

      
        
          
          

        

        
          5

          
            

          

        

        
          
          

        

         

      

      (c)           favorable
legal opinions of Massachusetts and Italian counsel to the Loan Parties, and of
Italian counsel to the Administrative Agent, each in form and substance
reasonably satisfactory to the Administrative Agent, regarding the Pledge
Agreement and the creation, perfection and enforceability of the security
interest created thereunder, and related matters as counsel to the
Administrative Agent may reasonably request, under applicable Massachusetts and
Italian laws.

       

      7.           Effect on Loan
Documents.  The Credit Agreement and the other Loan Documents
shall be and remain in full force and effect in accordance with their terms and
are hereby ratified and confirmed in all respects.  Except as
expressly set forth herein, the execution, delivery, and performance of this
Amendment shall not operate as a waiver or an amendment of any right, power, or
remedy of the Administrative Agent or Lenders under the Credit Agreement or any
other Loan Document.  Each Loan Party hereby ratifies and confirms in
all respects all of its obligations under the Credit Agreement and the other
Loan Documents.  For avoidance of doubt, the Loan Parties confirm that
breach of Section 6.13 (as amended hereby) shall constitute an Event of
Default.

       

      8.           No Novation; Entire
Agreement.  This Amendment is not a novation or discharge of
the terms and provisions of the obligations of the Loan Parties under the Loan
Documents.  There are no other understandings, express or implied,
among the Loan Parties, Administrative Agent, Lenders and other parties hereto
regarding the subject matter hereof or thereof.

       

      9.           Governing
Law.  This Amendment shall be governed by, and construed in
accordance with, the law of The Commonwealth of Massachusetts.

       

      10.         Counterparts; Facsimile
Execution.  This Amendment may be executed in any number of
counterparts and by different parties and separate counterparts, each of which
when so executed and delivered shall be deemed an original, and all of which,
when taken together, shall constitute one and the same
instrument.  Delivery of an executed counterpart of a signature page
to this Amendment by facsimile shall be as effective as delivery of a manually
executed counterpart of this Amendment.  Any party delivering an
executed counterpart of this Amendment by facsimile also shall deliver a
manually executed counterpart of this Amendment (but the failure to deliver a
manually executed counterpart shall not affect the validity, enforceability, and
binding effect of this Amendment).

       

      11.         Construction.  This
Amendment is a Loan Document.  Upon and after the effectiveness of
this Amendment, each reference in the Credit Agreement to “this Agreement”,
“hereunder”, “herein”, “hereof” or words of like import referring to the Credit
Agreement, and each reference in the other Loan Documents to “the Credit
Agreement”, “thereunder”, “therein”, “thereof” or words of like import referring
to the Credit Agreement, shall mean and be a reference to the Credit Agreement
as amended hereby.

       

      
        
          
          

        

        
          6

          
            

          

        

        
          
          

        

         

      

      IN WITNESS
WHEREOF, the parties hereto have caused this Amendment to be executed as of the
date first above written.

       

       

      
        
          	 
      	
                  LOAN PARTIES

                
	 
      	 
      
	 
      	
                  ANIKA
      THERAPEUTICS, INC.

                
	 	 
	 
      	 
      
	 
      	
                  By:  /s/ Charles H.
      Sherwood

                
	 
      	
                  Name:  Charles H.
      Sherwood

                
	 
      	
                  Title:  Chief Executive Officer and
      President

                
	 
      	 
      
	 	 
	 
      	 
      
	 
      	
                  ANIKA
      SECURITIES, INC.

                
	 	 
	 
      	 
      
	 
      	
                  By:   /s/
      Charles H. Sherwood

                
	 
      	
                  Name:  Charles H.
      Sherwood

                
	 
      	
                  Title:  Chief Executive
      Officer and President

                
	 
      	 
      
	 
      	 
      
	 
      	 
      

        

      

       

       

      
        
          
          

        

        
          7

          
            

          

        

        
          
          

        

         

      

      
        
          	 
      	
                  LENDERS

                
	 
      	 
      
	 
      	
                  BANK
      OF AMERICA, N.A.

                
	 	 
	 
      	 
      
	 
      	
                  By:  /s/ Jean S.
      Manthorne

                
	 
      	
                  Name:  Jean S.
      Manthorne

                
	 
      	
                  Title:  Senior Vice
      President

                
	 
      	 
      
	 	 
	 
      	 
      
	 
      	
                  ADMINISTRATIVE AGENT

                
	 
      	 
      
	 
      	
                  BANK
      OF AMERICA, N.A., as

                
	 
      	
                  Administrative
      Agent

                
	 	 
	 
      	 
      
	 
      	
                  By:  /s/ Jean S.
      Manthorne

                
	 
      	
                  Name:  Jean S.
      Manthorne

                
	 
      	
                  Title:  Senior Vice
      President

                
	 
      	 
      

        

        

      

       

       

      
        8Exhibit 4.1

               INCORPORATED UNDER THE LAWS OF THE STATE OF NEVADA

                              DIGITAL VALLEYS CORP.

                                  COMMON STOCK
                              PAR VALUE $0.001 EACH

 THE CORPORATION WILL FURNISH WITHOUT CHARGE TO ANY SHAREHOLDER WHO SO REQUESTS
 THE POWERS, DESIGNATIONS, PREFERENCES AND RELATIVE, PARTICIPATING, OPTIONAL OR
      OTHER SPECIAL RIGHTS OF EACH CLASS OF STOCK OR SERIES THEREOF AND THE
  QUALIFICATIONS, LIMITATIONS OR RESTRICTIONS OF SUCH PREFERENCES AND/OR RIGHTS

This is to Certify that ____________________________________ is the owner of

             FULLY PAID AND NON-ASSESSABLE SHARES OF COMMON STOCK OF

                              DIGITAL VALLEYS CORP.

 transferable on the books of the Corporation by the holder hereof in person or
   by duly authorized Attorney, upon surrender of this Certificate, properly
                                   endorsed.

Witness, the seal of the Corporation and the signatures of its duly authorized
officers.

DATED:____________.

_______________________                                  _______________________
CHIEF EXECUTIVE OFFICER                                        SECRETARY

                       THIS CERTIFICATE IS SUBJECT TO THE
                   RESTRICTIONS SET FORTH ON THE BACK HEREOF.
<PAGE>
The following abbreviations, when used in the inscription on the face of this
certificate, shall be construed as though they were written out in full
according to applicable laws or regulations:

                                                     .......Custodian.......
TEN COM - as tenants in common            UNIF GIFT MIN ACT - (Cust.)   (Minor)

TEN ENT - as tenants by the entireties            Under Uniform Gifts to Minors

JT TEN - as joint tenants with right of           Act........................
         survivorship and not as tenants                    (State)
         in common

    Additional abbreviations may also be used though not in the above list.

FOR VALUE RECEIVED, _________________ HEREBY SELLS, ASSIGNS AND TRANSFERS UNTO
PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE

------------------------------------

      (PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS INCLUDING POSTAL ZIP CODE
                                  OF ASSIGNEE)

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

__________________________________________ SHARES OF _____________ COMMON STOCK,
REPRESENTED BY THE WITHIN CERTIFICATE, AND DO HEREBY IRREVOCABLY CONSTITUTE AND
APPOINT _________________________________ ATTORNEY,

TO TRANSFER THE SAID SHARES ON THE BOOKS OF THE WITHIN NAMED CORPORATION WITH
FULL POWER OF SUBSTITUTION IN THE PREMISES.

                       DATED _________________ 20_________

                                 IN PRESENCE OF

                           ---------------------------

          NOTICE: THE SIGNATURE TO THIS ASSIGNMENT MUST CORRESPOND WITH
    THE NAME AS WRITTEN UPON THE FACE OF THE CERTIFICATE IN EVERY PARTICULAR
           WITHOUT ALTERATION OF ENLARGEMENT OR ANY CHANGE WHATSOEVER

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