LINE OF CREDIT AGREEMENT
THIS LINE OF CREDIT AGREEMENT (this “Agreement”) is entered into as of October 19, 2005 by and between Antares Pharma, Inc., a Delaware corporation (“Borrower”), and Dr. Jacques Gonella, an individual residing at Hauptstrasse 16, 4132 Muttenz, Switzerland (“Lender”). In consideration of the mutual agreements set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged by the parties, Borrower and Lender agree as follows:
Amount and Terms of Advances
Section 1.1 Advances. Subject to the provisions of this Agreement and to the Note (as defined below), Lender shall make Advances to Borrower (each, an “Advance”) from time to time during the period from the date hereof to the earlier to occur of the following: (i) January 15, 2007, (ii) termination of the Line of Credit (as defined below) pursuant to Section 2.2, or (iii) the earlier of the date on which (A) Borrower raises through sales of its equity securities at least Five Million United States Dollars and no/100 (USD $5,000,000.00), exclusive of amounts to be loaned by Lender to Borrower pursuant to the terms hereof, or (B) Borrower’s cash and cash equivalent position of at least Six Million United States Dollars and no/100 (USD $6,000,000.00) (any such date, the “Maturity Date”), in an aggregate amount not to exceed Four Million United States Dollars and no/100 (USD$4,000,000.00) (the “Line of Credit”). Borrower’s obligation to repay the Advances and to pay interest thereon is evidenced by the Promissory Note dated the date hereof and payable to the order of Lender, the form of which is attached hereto as Exhibit A (together with any amendments, extensions, renewals and replacements thereof, the “Note”), such Note being executed and delivered by Borrower to Lender as a condition to any Advance being made by Lender to Borrower. Notwithstanding the foregoing, the Line of Credit shall consist of Two Million United States Dollars and no/100 (USD $2,000,000.00) to be used by Borrower for general working capital and other proper corporate requirements (the “Working Capital Portion”), and Two Million United States Dollars and no/100 (USD $2,000,000.00) to be used by Borrower exclusively for the acquisition by Borrower of the business, outstanding shares or assets of another person or entity, or the investment by Borrower in any such other person or entity, and all related activities (the “M&A Portion”).
Section 1.2 Advances.
a) Each Advance of a portion of the Working Capital Portion shall be in increments of Two Hundred Fifty Thousand United States Dollars and no/100 (USD $250,000.00) (the “Working Capital Advance Amount”), or such lesser amount as agreed upon by Borrower and Lender (each such Advance of a portion of the Working Capital Portion being referred to herein as a “Working Capital Advance”), shall be made on thirty (30) days’ advance written notice
from Borrower to Lender, which notice shall specify the date of the requested Advance, the amount thereof and reasonably detailed information concerning the current status of Borrower’s business and Borrower’s financial results (such information being collectively referred to herein as the “Information”), provided that Borrower shall not, unless otherwise agreed to by Lender, request more than one (1) Advance of a portion of the Working Capital Portion every thirty (30) days. On the requested date, Lender shall disburse the amount requested by wiring such amount in immediately available funds to Borrower’s checking account at Wells Fargo Bank - Minneapolis, MN (the “Bank”) (account no. 323-869-1379; ABA no. 121000248; swift code: WFBIUS6S), or in such other manner as Lender and Borrower may from time to time agree, provided that the Lender shall have given his consent to the requested Working Capital Advance and further provided that Lender shall not unreasonably withhold his consent to any request made by Borrower for a Working Capital Advance, the parties hereto acknowledging that in making any such determination for his consent, Lender shall be entitled to consider, without limitation, any adverse change in Borrower’s business. Any failure of Lender to provide a notice to Borrower not less than 10 (ten) days before the requested date of any Working Capital Advance shall obligate Lender to make the requested Advance to Borrower on such date.