Revolving Credit Agreement

Exhibit 10.9


REVOLVING CREDIT AGREEMENT

between


MISSOURI STATE BANK AND TRUST COMPANY,

as Lender

and


ACCENTIA BIOPHARMACEUTICALS, INC.,

as Borrower


Dated as of DECEMBER 30, 2005

REVOLVING CREDIT AGREEMENT


THIS REVOLVING CREDIT AGREEMENT (the " Agreement" ) made and entered into as of this 30th day of December, 2005, by and between Accentia Biopharmaceuticals, Inc. (the " Borrower" ), having an address of 324 South Hyde Park Avenue, Suite 350, Tampa, Florida 33606, and Missouri State Bank and Trust Company, a Missouri state banking corporation (" Lender" ), having an address of 12452 Olive Street Road, Creve Coeur, Missouri 63141.


WITNESSETH:


WHEREAS, Borrower desires to obtain a loan of up to $3,000,000 (the " Loan" ) from Lender on a revolving credit basis to fund the acquisition and licensing of pharmaceutical products and medical devices.

WHEREAS, subject to, and in reliance upon, the terms and conditions of this Agreement and the representations and warranties made herein, all of which terms, conditions, representations and warranties are material and being relied on by Lender, Lender is willing to make the Loan to Borrower.

NOW, THEREFORE, in consideration of the premises, the mutual covenants and agreements hereinafter set forth, and other good and valuable considerations, the receipt and sufficiency of which are hereby acknowledged, and each intending to be legally bound hereby, the parties agree as follows:

SECTION I. DEFINITIONS

As used herein:

" ACCOUNT DEBTOR" shall mean any Person who is and/or may become obligated to borrower and the subsidiaries under or on account of any of the Accounts.


" ACCOUNTS" shall mean all trade accounts receivable of borrower which have been invoiced by borrower.

" AFFILIATE" shall mean any Person (a) which directly or indirectly through one or more intermediaries controls, is controlled by or is under common control with Borrower, (b) which directly or indirectly through one or more intermediaries beneficially owns or holds or has the power to direct the voting power of Twenty-Five Percent (25%) or more of any class of capital stock or other equity interests of Borrower, (c) which has Twenty-Five Percent (25%) or more of any class of its capital stock or other equity interests beneficially owned or held, directly or indirectly, by Borrower or (d) who is a director, officer or manager of Borrower. For Purposes of this definition, " control" shall mean the power to direct the management and policies of a person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise.

" AGREEMENT" means this Agreement including any amendments hereto or modifications or restatements hereof and any supplements hereto.


" BORROWER" means Accentia Biopharmaceuticals, Inc., a Florida corporation.

" BORROWING BASE" shall mean as of the date of any determination thereof, the lesser of (i) $3,000,000 or (ii) Eighty Percent (80%) of the aggregate face amount of all Eligible Accounts of TEAMM Pharmaceuticals, Inc. (" TEAMM" ) which are listed (or which in accordance with GAAP should be listed on the books of TEAMM as of such date) plus Twenty-Five Percent (25%) of the book value of Eligible Inventory of TEAMM which is listed (or which in accordance with GAAP should be listed on the books of TEAMM as of such date) plus fifty percent (50%) of the value of the stock pledged by, respectively, The O' Donnell Trust and Dennis Ryll.


" BORROWING BASE CERTIFICATE" shall have the meaning ascribed thereto in Section 2.01(b).

" CAPITAL EXPENDITURE" shall mean any expenditure to purchase or otherwise acquire a fixed asset (other than a Capitalized Lease Obligation) which, in accordance with GAAP, is required to be capitalized on the balance sheet of the Person making the same.

" CAPITALIZED LEASE" shall mean any lease of Property, whether real and/or personal, by Borrower as lessee, which, in accordance with GAAP, is required to be capitalized on the balance sheet of such Person.


" CAPITALIZED LEASE OBLIGATIONS" shall mean, as of the date of any determination thereof, the amount of the aggregate rental obligations due and to become due under all Capitalized Leases, under which Borrower is a lessee, which would be reflected as a liability on the balance sheet of Borrower on a consolidated basis, in accordance with GAAP.

" CERCLA" shall mean the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended by the Superfund Amendments and Reauthorization Act of 1986, 42 U.S.C. a79601 et seq ., and as the same may from time to time be further amended.

" CHANGE OF CONTROL EVENT" shall occur if, at any time, Frank E. O' Donnell, Jr., M.D. ceases (i) to be the President of Borrower, (ii) to be a Director of Borrower, and (iii) to have the power to direct the management and policies of the Borrower.

" CLOSING DATE" means December 30, 2005, or such later date as Loan proceeds are advanced hereunder.

" CODE" shall mean the Internal Revenue Code of 1986, as amended, and any successor statute of similar import, together with the regulations thereunder, in each case as in effect from time to time. References to sections of the Code shall be construed to also refer to any successor sections.


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" COLLATERAL" means any Property of Borrower which now or at any time hereafter secures the payment or performance of any of the Obligations, including, without limitation, all Collateral described in the Security Agreement, and all proceeds, substitutes, replacements, accretions, accessions and products of any of the foregoing; any and all other collateral now or hereafter providing security for the Loan and all other property, rights and interests described in Section 2.07 hereof.

" DEFAULT" shall mean any event or condition the occurrence of which would, with the lapse of time or the giving of notice or both, become an Event of Default.


" DISTRIBUTIONS" in respect of any corporation or other entity shall mean dividends or other distributions in cash or Property on or in respect of the capital stock of such entity.


" DOMESTIC BUSINESS DAY" shall mean any day except a Saturday, Sunday or legal holiday observed by the Lender.

" ELIGIBLE ACCOUNTS" shall mean all Accounts of TEAMM arising in the ordinary course of TEAMM' s business from the sale of goods or the rendering of services which the Lender, in its reasonable credit judgment, deems to be an Eligible Account. Eligible Accounts shall not include the following: (a) Accounts which remain unpaid for more than ninety (90) days after their original invoice dates and Accounts which are not due and payable within ninety (90) days after their original invoice dates; (b) Accounts with respect to which the Account Debtor is a shareholder of TEAMM or an Affiliate; (c) Accounts with respect to which payment by the Account Debtor is or may be conditional and Accounts commonly known as bill and hold Accounts or Accounts of a similar or like arrangement; (d) Accounts with respect to which the Account Debtor is not a resident or citizen of or otherwise located in the continental United States of America, unless such Accounts are backed in full by an irrevocable letter of credit in form and substance satisfactory to the Lender issued by a domestic commercial bank acceptable to the Lender; (e) Accounts with respect to which the Account Debtor is the United States of America, any state of the United States or any other governmental body or any department, agency or instrumentality of any of the foregoing, unless such Accounts are duly assigned to the Lender in accordance with all applicable governmental and regulatory rules and regulations (including, without limitation, the Federal Assignment of Claims Act of 1940, as amended, if applicable) so that the Lender is recognized by the Account Debtor to have all of the rights of an assignee of such Accounts; (f) Accounts which are not invoiced (and dated as of such date) and sent to the Account Debtor thereof concurrently with or not later than five (5) days after the shipment and delivery to said Account Debtor of the goods giving rise thereto or the performance of the services giving rise thereto; (g) Accounts arising from a consignment sale, a " sale on approval" or a " sale or return" ; (h) Accounts which are subject to any dispute, offset, counterclaim, discount or other claim or defense on the part of the Account Debtor or to any claim on the part of the Account Debtor contesting or denying liability under such Account; (i) the Account Debtor has commenced a voluntary case under the federal bankruptcy laws, as now constituted or hereafter amended, or made an assignment for the benefit of creditors, or a decree or order for relief has been entered by a court having jurisdiction in the premises in respect of the Account Debtor in an involuntary case under the federal bankruptcy laws, as now constituted or hereafter amended, or any other petition or other application for relief under the federal


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bankruptcy laws has been filed against the Account Debtor, or if the Account Debtor has failed, suspended business, ceased to be solvent, or consented to or suffered a receiver, trustee, liquidator or custodian to be appointed for it or for all or a significant portion of its assets or affairs; (j) Accounts which are not subject to a first priority perfected security interest in favor of the Lender.


" ELIGIBLE INVENTORY" means such inventory of TEAMM, which the Lender, in the exercise of its reasonable credit judgment, deems to be Eligible Inventory. Without limiting the generality of the foregoing, no inventory shall be Eligible Inventory unless, in the Lender' s opinion, it (i) is in good, new and saleable condition, (ii) is not obsolete or unmerchantable, (iii) meets all standards imposed by any governmental agency or authority, (iv) conforms in all respects to the warranties and representations set forth in this Agreement and the TEAMM Security Agreement, (v) is at all times subject to the Lender' s duly perfected, first priority security interest and no other Lien other than Permitted Liens as defined herein, (vi) is situated at premises occupied by Borrower or at facilities leased or contracted by Borrower or TEAMM for storage, and (vii) is not, in the Lender' s sole and absolute discretion, unacceptable due to age, category, type, quantity or other characteristic. Eligible Inventory does not include any discontinued items.


" ENVIRONMENTAL CLAIM" shall mean any administrative, regulatory or judicial action, judgment, order, consent decree, suit, demand, demand letter, claim, Lien, notice of noncompliance or violation, investigation or other proceeding arising (a) pursuant to any Environmental Law or governmental or regulatory approval issued under any such Environmental Law, (b) from the presence, use, generation, storage, treatment, Release, threatened Release, disposal, remediation or other existence of any Hazardous Substance, (c) from any removal, remedial, corrective or other response action pursuant to an Environmental Law or the order of any governmental or regulatory authority or agency, (d) from any third party seeking damages, contribution, indemnification, cost recovery, compensation, injunctive or other relief in connection with a Hazardous Substance or arising from alleged injury or threat of injury to health, safety, natural resources or the environment or (e) from any Lien against any Property owned, leased or operated by Borrower in favor of any governmental or regulatory authority or agency in connection with a Release, threatened Release or disposal of a Hazardous Substance.


" ENVIRONMENTAL LAW" shall mean any Federal, state, local, foreign or other statute, law, rule, regulation, order, consent decree, judgment, permit, license, code, covenant, deed restriction, common law, treaty, convention, ordinance or other requirement relating to public health, safety or the environment, including, without limitation, those relating to Releases, discharges or emissions to air, water, land or groundwater, to the withdrawal or use of groundwater, to the use and handling of polychlorinated biphenyls or asbestos, to the disposal, treatment, storage or management of hazardous or solid waste, Hazardous Substances or crude oil, or any fraction thereof, to exposure to toxic or hazardous materials, to the handling, transportation, discharge or release of gaseous or liquid Hazardous Substances and any rule, regulation, order, notice or demand issued pursuant to such law, statute or ordinance, in each case applicable to any of the Property owned, leased or operated by the Borrower or the operation, construction or modification of any such Property, including, without limitation, the following: CERCLA, the Solid Waste Disposal Act, as amended by the Resource Conservation


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and Recovery Act of 1976 and the Hazardous and Solid Waste Amendments of 1984, the Hazardous Materials Transportation Act, as amended, the Federal Water Pollution Control Act, as amended by the Clean Water Act of 1976, the Safe Drinking Water Control Act, the Clean Air Act of 1966, as amended, the Toxic Substances Control Act of 1976, the Occupational Safety and Health Act of 1970, as amended, the Emergency Planning and Community Right-to-Know Act of 1986, the National Environmental Policy Act of 1975, the Oil Pollution Act of 1990 and any similar or implementing state or local law, and any state or local statute and any further amendments to these laws providing for financial responsibility for cleanup or other actions with respect to the Release or threatened Release of Hazardous Substances or crude oil, or any fraction thereof and all rules, regulations, guidance documents and publication promulgated thereunder.


" ERISA" shall mean the Employee Retirement Income Security Act of 1974, as amended, and any successor statute of similar import, together with the regulations thereunder, in each case as in effect from time to time. References to sections of ERISA shall be construed to also refer to any successor sections.


" ERISA AFFILIATE" shall mean any corporation, trade or business that is, along with Borrower, a member of a controlled group of corporations or a controlled group of trades or businesses, as described in Sections 414(b) and 414(c), respectively, of the Code or Section 4001 of ERISA.


" ERISA EVENT" means (a) a Reportable Event with respect to a Pension Plan; (b) a withdrawal by the Borrower or any ERISA Affiliate from a Pension Plan subject to Section 4063 of ERISA during a plan year in which it was a substantial employer (as defined in Section 4001(a)(2) of ERISA) or a substantial cessation of operations which is treated as such a withdrawal; (c) a complete or partial withdrawal by the Borrower or any ERISA Affiliate from a Multiemployer Plan or notification that a Multiemployer Plan is in reorganization; (d) the filing of a notice of intent to terminate, the treatment of a Pension Plan amendment as a termination under Section 4041 or 4041A of ERISA, or the commencement of proceedings by the PBGC to terminate a Pension Plan or Multiemployer Plan; (e) an event or condition which might reasonably be expected to constitute grounds under Section 4042 of ERISA for the termination of, or the appointment of a trustee to administer, any Pension Plan or Multiemployer Plan; or (f) the imposition of any liability exceeding Fifty Thousand and 00/100 Dollars ($50,000.00) under Title IV of ERISA, other than PBGC premiums due but not delinquent under Section 4007 of ERISA, upon the Borrower or any ERISA Affiliate.


" EVENT OF DEFAULT" shall have the meaning ascribed thereto in Section 5.01.


" FINANCIAL STATEMENTS" means balance sheets and statements of income and capital accounts for Borrower and the Subsidiaries for the applicable fiscal year.

" GAAP" shall mean, at any time, generally accepted accounting principles at such time in the United States.


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" GUARANTEE" by any Person shall mean any obligation (other than endorsements of negotiable instruments for deposit or collection in the ordinary course of business), contingent or otherwise, of such Person guaranteeing, or in effect guaranteeing, any Indebtedness, liability, dividend or other obligation of any other Person (the " primary obligor" ) in any manner, whether directly or indirectly, including, without limitation, all obligations incurred through an agreement, contingent or otherwise, by such Person: (a) to purchase such Indebtedness or obligation or any Property constituting security therefor, (b) to advance or supply funds (i) for the purchase or payment of such Indebtedness or obligation, (ii) to maintain working capital or other balance sheet condition or otherwise to advance or make available funds for the purchase or payment of such Indebtedness or obligation, (iii) to lease property or to purchase securities or other property or services primarily for the purpose of assuring the owner of such Indebtedness or obligation of the ability of the primary obligor to make payment of the Indebtedness or obligation or (iv) otherwise to assure the owner of the Indebtedness or obligation of the primary obligor against loss in respect thereof. For the purposes of all computations made under this Agreement, a Guarantee in respect of any Indebtedness for borrowed money shall be deemed to be Indebtedness equal to the then outstanding principal amount of such Indebtedness for borrowed money which has been guaranteed or such lesser amount to which the maximum exposure of the guarantor shall have been specifically limited, and a Guarantee in respect of any other obligation or liability or any dividend shall be deemed to be Indebtedness equal to the amount of such obligation, liability or dividend required to be shown as a liability under GAAP on the balance sheet of such Person or such lesser amount to which the maximum exposure of the guarantor shall have been specifically limited. Guarantee when used as a verb shall have a correlative meaning.


" GUARANTORS" or " GUARANTOR" shall mean each of the following: TEAMM Pharmaceuticals, Inc., Hopkins Capital Group, L.L.C. and MOAB Investments L.P. (sometimes hereinafter referred to collectively as the " Entity Guarantors" ) and Francis O' Donnell, Jr. and The Francis E. O' Donnell, Jr. Irrevocable Trust No. 1, dated May 25, 1990 (the " O' Donnell Trust" ), Dennis Ryll and Steven Stogel (sometimes hereinafter referred to as the " Individual Guarantors" ).


" HAZARDOUS SUBSTANCE" shall mean any hazardous or toxic material, substance or waste, pollutant or contaminant which is regulated under any Environmental Law or any other statute, law, ordinance, rule or regulation of any Federal, state, local, foreign or other body, instrumentality, agency, authority or official having jurisdiction over any of the Property owned, leased or operated by Borrower or its use, including, without limitation, any material, substance or waste which is: (a) defined as a hazardous substance under Section 311 of the Federal Water Pollution Control Act (33 U.S.C. a7a71317), as amended; (b) regulated as a hazardous waste under Section 1004 or Section 3001 of the Federal Solid Waste Disposal Act, as amended by the Resource Conservation and Recovery Act (42 U.S.C. a7a76901 et seq .), as amended; (c) defined as a hazardous substance under Section 101 of the Comprehensive Environmental Response, Compensation and Liability Act (42 U.S.C. a7a79601 et seq .), as amended; or (d) defined or regulated as a hazardous substance or hazardous waste under any rules or regulations promulgated under any of the foregoing statutes.

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" INDEBTEDNESS" shall mean, with respect to any Person, without duplication, all indebtedness, liabilities and obligations of such Person which in accordance with GAAP are required to be classified upon a balance sheet of such Person as liabilities of such Person, and in any event shall include all (a) obligations of such Person for borrowed money or which have been incurred in connection with the purchase or other acquisition of Property, (b) obligations secured by any Lien (other than mechanics' , materialman' s, architect' s, or similar Lien arising in the ordinary course of a construction business) on, or payable out of the proceeds of or production from, any Property owned by such Person, whether or not such Person has assumed or become liable for the payment of such obligations, (c) indebtedness, liabilities and obligations of third parties, including joint ventures and partnerships of which such Person is a venturer or general partner, recourse to which may be had against such Person, (d) obligations created or arising under any conditional sale or other title retention agreement with respect to Property acquired by such Person, notwithstanding the fact that the rights and remedies of the seller, lender or lessor under such agreement in the event of default are limited to repossession or sale of such Property, (e) Capitalized Lease Obligations of such Person, (f) the aggregate undrawn face amount of all letters of credit issued for the account of and/or upon the application of such Person together with all unreimbursed drawings with respect thereto, and (g) trade account payables and all other liabilities of such Person as defined by GAAP.

" INTEREST RATE" shall mean the Prime Rate.

" INVESTMENT" shall mean any investment by Borrower in any Person, whether payment therefor is made in cash or capital stock of Borrower and whether such investment is by acquisition of stock or Indebtedness, or by loan, advance, transfer of Property out of the ordinary course of business, capital contribution, equity or profit sharing interest or extension of credit on terms other than those normal in the ordinary course of business or otherwise.


" LAWS" means all ordinances, statutes, rules, regulations, orders, injunctions, writs or decrees of any government or political subdivision or agency or authority thereof (including, without limitation, the states of Missouri, Florida and Delaware), or of any court or similar entity having jurisdiction over Borrower or the Collateral.

" LIEN" shall mean any interest in Property securing an obligation owed to, or a claim by, a Person other than the owner of the Property, whether such interest is based on common law, statute or contract, including, without limitation, any security interest, mortgage, deed of trust, pledge, hypothecation, judgment lien or other lien or encumbrance of any kind or nature whatsoever, any conditional sale or trust receipt, any lease, consignment or bailment for security purposes and any Capitalized Lease. The term " Lien" shall include reservations, exceptions, encroachments, easements, rights-of-way, covenants, conditions, restrictions, leases and other title exceptions and encumbrances affecting Property.


" LOAN" shall mean that certain revolving credit loan of up to $3,000,000 to be made by Lender to Borrower, pursuant to this Agreement.


" LOAN DOCUMENTS" means this Agreement, the Note, the Security Agreement and all financing statements in connection therewith, and any and all other documents or instruments


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now or hereafter evidencing or securing the Loan, and all those documents specified in Section 2.07 hereof and each and every other document to be delivered from time to time pursuant to this Agreement with respect to the Loan or otherwise.


" MATERIAL ADVERSE EFFECT" shall mean (a) a material adverse effect on the Properties, assets, liabilities, business, operations, prospects, income or condition (financial or otherwise) of the Borrower taken as a whole, (b) material impairment of Borrower' s ability to perform any of its obligations under this Agreement, the Note, or any of the other Loan Documents or (c) material impairment of the enforceability of the rights of, or benefits available to, the Lender under this Agreement, the Note, or any of the other Loan Documents.


" MATURITY DATE" means January 15, 2007.


" MULTI-EMPLOYER PLAN" shall mean a " multi-employer plan" as defined in Section 4001(a)(3) of ERISA which is maintained for employees of Borrower, or any ERISA Affiliate or to which Borrower, or any ERISA Affiliate has contributed in the past or currently contributes.


" NOTE" means the Revolving Credit Note delivered to Lender, a copy of which is attached hereto as Exhibit A .


" NOTICE OF REVOLVING CREDIT BORROWING" shall have the meaning ascribed thereto in Section 2.02.


" OBLIGATIONS" means any and all present and future indebtedness, liabilities and obligations of Borrower to Lender respecting this Loan, including, without limitation, the following obligations of Borrower:

A. To pay the principal of and interest on the Note in accordance with the terms thereof and to satisfy all of its other obligations and liabilities to Lender under the Loan Documents;


B. To repay to Lender all amounts advanced by Lender hereunder, or under any of the other Loan Documents; and

C. To reimburse Lender, on demand, for all of Lender' s expenses and costs, including the reasonable fees and expenses of its counsel, agents and advisors, in connection with the Loan and enforcement of the Loan Documents, or any of them, whether or not litigation is commenced.

" OBLIGOR" shall mean the Borrower, each Guarantor and each other Person who is or shall at any time hereafter become primarily or secondarily liable on any of the Obligations or who grants the Lender a Lien upon any of the Property of such Person as security for any of the Obligations.


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" OCCUPATIONAL SAFETY AND HEALTH LAWS" shall mean the Occupational Safety and Health Act of 1970, as amended, and any other Federal, state or local statute, law, ordinance, code, rule, regulation, order or decree regulating, relating to or imposing liability or standards of conduct concerning employee health and/or safety, as now or at any time hereafter in effect.


" OPERATING LEASE" shall mean any lease of Property, whether real and/or personal, by a Person as lessee which is not a Capitalized Lease.

" OPERATING LEASE EXPENSE" shall mean, for the period in question, the aggregate amount of all Operating Lease Expenses during such period, determined in accordance with GAAP.


" OPERATING LEASE EXPENSES" shall mean with respect to any Person, for the period in question, the aggregate amount of rental and other expenses incurred by such Person in respect of Operating Leases during such period, all determined in accordance with GAAP.


" PBGC" shall mean the Pension Benefit Guaranty Corporation and any entity succeeding to any or all of its functions under ERISA.

" PENSION PLAN" shall mean a " pension plan," as such term is defined in Section 3(2) of ERISA, which is established or maintained by Borrower or any ERISA Affiliate, other than a Multi-Employer Plan.


" PERMITTED LIENS" shall mean liens held by Laurus Master Fund, Ltd., McKesson Corporation, and Harbinger Mezzanine Partners, L.P. and/or lessors/providers of office equipment or furnishings in amounts not to exceed $10,000.00 each.


" PERSON" shall mean any individual, sole proprietorship, partnership, joint venture, limited liability company, trust, unincorporated organization, association, corporation, institution, entity or government (whether national, Federal, state, county, city, municipal or otherwise, including, without limitation, any instrumentality, division, agency, body or department thereof).

" PRIME RATE" shall mean the interest rate announced from time to time by Lender as its " prime rate" on commercial loans (which rate shall fluctuate as and when said prime rate shall change). Borrower acknowledges that such " prime rate" is a reference rate and does not necessarily represent the lowest or best rate offered by Lender to its customers.

" PROPERTY" shall mean any interest in any kind of property or asset, whether real, personal or mixed, or tangible or intangible. Properties shall mean the plural of Property. For purposes of this Agreement, Borrower shall be deemed to be the owner of any Property which it has acquired or holds subject to a conditional sale agreement, financing lease or other arrangement pursuant to which title to the Property has been retained by or vested in some other Person for security purposes.

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" RCRA" shall mean the Solid Waste Disposal Act, as amended by the Resource Conservation and Recovery Act of 1976 and Hazardous and Solid Waste Amendments of 1984, 42 U.S.C. a7a76901 et seq ., and any future amendments.

" RELEASE" shall mean any spilling, leaking, pumping, pouring, emitting, em ...