EXHIBIT 10.18.11
ELEVENTH AMENDMENT TO
LOAN AND SECURITY AGREEMENT
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ELEVENTH AMENDMENT, dated as of March 29, 2002 (this "AMENDMENT"), to
the Loan and Security Agreement referred to below by and among GENERAL ELECTRIC
CAPITAL CORPORATION, a Delaware corporation ("LENDER"), PAR PHARMACEUTICAL,
INC., a New Jersey corporation ("BORROWER"), PHARMACEUTICAL RESOURCES, INC., a
New Jersey corporation ("PARENT"), and the other Credit Parties signatory
thereto.
W I T N E S S E T H
WHEREAS, Lender, Borrower and Credit Parties are parties to that
certain Loan and Security Agreement, dated as of December 15, 1996 (as amended,
supplemented or otherwise modified prior to the date hereof, the "LOAN
AGREEMENT"); and
WHEREAS, Lender, Borrower and Credit Parties have agreed to amend the
Loan Agreement in the manner, and on the terms and conditions, provided for
herein.
NOW THEREFORE, in consideration of the premises and for other good
and valuable consideration, the receipt, adequacy and sufficiency of which are
hereby acknowledged, the parties to this Amendment hereby agree as follows:
1. DEFINITIONS. Capitalized terms not otherwise defined herein shall
have the meanings ascribed to them in the Loan Agreement.
2. AMENDMENT TO RECITALS TO LOAN AGREEMENT. Recital A of the Loan
Agreement is hereby deleted in its entirety as of the Amendment Effective Date
(as hereinafter defined in Section 21 hereof).
3. AMENDMENT TO SECTION 1.2 OF THE LOAN AGREEMENT. As of the
Amendment Effective Date, SECTION 1.2(c) of the Loan Agreement is hereby amended
by deleting such Section in its entirety and inserting in lieu thereof the
following new SECTION 1.2(c) to read as follows:
"(c) Immediately upon receipt by Parent, Borrower or any other Credit
Party of proceeds of any asset disposition (including insurance and
condemnation proceeds, but excluding proceeds of the sale of
Inventory in the ordinary course of business), Borrower shall prepay
Revolving Credit Advances in an amount equal to all such proceeds,
net of (A) commissions and other reasonable and customary transaction
costs, fees and expenses properly attributable to such transaction
and payable by the Credit Parties in connection therewith (in each
case, paid to non-Affiliates), (B) transfer taxes, and (C) amounts
payable to holders of senior Liens (to the extent such Liens
constitute Permitted Encumbrances hereunder), if any. If Parent,
Borrower or any other Credit Party issues Stock or any debt
securities, no later than the Business Day following the date of
receipt of the proceeds thereof, Borrower shall prepay Revolving
Credit Advances in an amount equal to all such proceeds (other than
any proceeds from the issuance of common stock of Parent used to
finance the ISP Acquisition), net of underwriting discounts and
commissions and other reasonable costs paid to non-Affiliates in
connection therewith. Any Revolving Credit Advances prepaid under
this Section 1.2(c) may, subject to the provisions hereof, be
reborrowed."
4. AMENDMENT TO SECTION 1.3 OF THE LOAN AGREEMENT. As of the
Amendment Effective Date, SECTION 1.3 of the Loan Agreement is hereby amended by
deleting such Section in its entirety and inserting in lieu thereof the
following new SECTION 1.3 to read as follows:
"1.3 USE OF PROCEEDS. Borrower shall use the proceeds of the
Revolving Credit Loan, as applicable, to (a) pay certain fees and
expenses relating to the transactions under the Loan Documents and
for Borrower's working capital purposes, capital expenditures and
general corporate purposes and (b) fund a portion of the ISP
Acquisition as provided in Section 5(a)."
5. AMENDMENT TO SECTION 3 OF THE LOAN AGREEMENT. As of the Amendment
Effective Date, SECTION 3 of the Loan Agreement is hereby amended by (a)
deleting the first sentence of SECTION 3.2 in its entirety and inserting in lieu
thereof the following new sentence to read as follows:
"(a) The names of Borrower and each Guarantor executing this
Agreement as they appear in the official filings in the states of
each such entity's state of incorporation or organization, (b) the
type of entity of Borrower or such Guarantor, (c) the organizational
identification number issued by each of Borrower's or such
Guarantor's state of incorporation or organization or a statement
that no such number has been issued, (d) each of Borrower's or such
Guarantor's state of organization or incorporation, and (e) the
location of each of Borrower's or such Guarantor 's chief executive
office, corporate offices, warehouses, other locations of Collateral
and locations where records with respect to Collateral are kept
(including in each case the county of such locations) are as set
forth in DISCLOSURE SCHEDULE (3.2) and, except as set forth in such
Disclosure Schedule, such locations have not changed during the
preceding twelve months."
(b) amending and restating Section 3.8(b) in its entirety to read as follows:
"(b) Borrower has no Subsidiaries other than Quad Pharmaceuticals,
Ltd., an Indiana corporation, and Nutriceutical Resources, Inc., a
New York corporation, and Borrower currently owns and shall at all
times own 100% of the Stock of each of its Subsidiaries. Parent
currently owns and shall at all times own 100% of the Stock of
Borrower and each of its other Subsidiaries. Pharma and ParCare are
inactive Subsidiaries of Parent, and NRI and Quad are inactive
Subsidiaries of Borrower; and no such Subsidiary currently owns or,
without giving thirty (30) days prior written notice to Lender, will
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own any property or assets or engage in any business or activity,
have any employees or any Indebtedness, liability or obligation and
no such Subsidiary is or, without giving prior written notice to
Lender, will become a party to any transaction or bound by any
agreement, instrument or other document (other than the Loan
Documents). Research owns 99% of the partnership interests in IPR.
and (c) inserting the following new Sections at the end thereof to read as
follows:
"3.27 AUTHORIZATION FOR LENDER TO FILE FINANCING STATEMENTS. Each of
Borrower and any Guarantor executing this Agreement hereby
irrevocably authorizes the Lender at any time and from time to time
to file in any filing office in any Uniform Commercial Code
jurisdiction any initial financing statements and amendments thereto
that (a) indicate the Collateral (i) as all assets of Borrower or
such Guarantor or words of similar effect, regardless of whether any
particular asset comprised in the Collateral falls within the scope
of Article 9 of the Code or such jurisdiction, or (ii) as being of an
equal or lesser scope or with greater detail, and (b) contain any
other information required by part 5 of Article 9 of the Code for the
sufficiency or filing office acceptance of any financing statement or
amendment, including (i) whether Borrower or such Guarantor is an
organization, the type of organization and any organization
identification number issued to Borrower or such Guarantor, and (ii)
in the case of a financing statement filed as a fixture filing or
indicating Collateral as as-extracted collateral or timber to be cut,
a sufficient description of real property to which the Collateral
relates. Borrower and each Guarantor agrees to furnish any such
information to the Lender promptly upon request. Each of Borrower and
any Guarantor executing this Agreement also ratifies its
authorization for the Lender to have filed in any Uniform Commercial
Code jurisdiction any initial financing statements or amendments
thereto if filed prior to the date hereof.
3.28 GOOD STANDING CERTIFICATES. Not less frequently than once during
each calendar quarter, each of Borrower and each other Credit Party
shall, unless Lender shall otherwise consent, provide to Lender a
certificate of good standing from its state of incorporation or
organization, PROVIDED, that such certificates of good standing will
not be required to be delivered regarding Pharma, NRI, Quad and
ParCare (each, an "INACTIVE SUBSIDIARY") so long as such Inactive
Subsidiary does not (i) own any property or assets, (ii) engage in
any business or activity, (iii) have any employees or any
Indebtedness, liability or obligation (other than under any Loan
Document), or (iv) become party to any transaction or bound by any
agreement, instrument or other documents (other than any Loan
Documents)."
6. AMENDMENT TO SECTION 4.1 OF THE LOAN AGREEMENT. As of the
Amendment Effective Date, SECTION 4.1(b) of the Loan Agreement is hereby amended
by deleting such Section in its entirety and inserting in lieu thereof the
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following new Section 4.1(b) to read as follows:
"(b) as frequently as Lender may request and in any event no later
than 15 days following the end of each Fiscal Month, a Borrowing Base
Certificate in the form of EXHIBIT C as of the last day of the
previous Fiscal Month detailing ineligible Accounts and Inventory for
adjustment to the Borrowing Base, PROVIDED, that if the aggregate
amount of outstanding Revolving Credit Advances equals or exceeds
$20,000,000, Borrower shall also provide to Lender (based on
Borrower's reasonable estimate and current estimates) no later than
the last day of each month such a Borrowing Base Certificate as of
the fifteenth day of such month;"
7. AMENDMENT TO SECTION 5 OF THE LOAN AGREEMENT. As of the Amendment
Effective Date, SECTION 5 of the Loan Agreement is hereby amended by (a)
deleting SECTION 5(a) in its entirety and inserting in lieu thereof the
following new SECTION 5(a) to read as follows:
"(a) merge with, consolidate with, acquire all or substantially all
of the assets or capital stock of, or otherwise combine with, any Person or
business or form any Subsidiary. Notwithstanding the foregoing, Parent may
consummate the ISP Acquisition on or prior to September 30, 2002 subject to the
satisfaction of each of the following conditions:
(i) the aggregate purchase price for the ISP Acquisition shall
not exceed $112.0 million (including any post-closing
adjustment to the purchase price), and costs and expenses
incurred by the Credit Parties in connection with the ISP
Acquisition shall not exceed $4.0 million (excluding
underwriting commissions incurred in connection with the
issuance by the Parent of its common stock, which will not
exceed 4.5% of the gross proceeds from any such common
stock);
(ii) the ISP Acquisition shall be financed with (a) no less than
$90.0 million of a combination of internally generated cash
and/or proceeds from the issuance of common stock of
Parent, and (b) the balance from the proceeds of Revolving
Credit Advances;
(iii) at the time of the ISP Acquisition and after giving effect
thereto, Borrower shall have Excess Borrowing Availability
of not less than $2,000,000 (on a pro forma basis, with
trade payables being paid in the ordinary course of
business and without acceleration of sales);
(iv) no additional Indebtedness, Guaranteed Indebtedness,
contingent obligations or other liabilities shall be
incurred, assumed or otherwise be reflected on a
consolidated balance sheet of Parent immediately after
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giving effect to the ISP Acquisition, except (A) Revolving
Credit Advances made hereunder and (B) the "Assumed
Liabilities" (as defined in the ISP Acquisition Agreement)
and liabilities of ISP Israel permitted under Section
3.03(c) of the ISP Acquisition Agreement;
(v) the business and assets acquired in the ISP Acquisition
shall be free and clear of all Liens (other than Permitted
Encumbrances), and Lender shall have received either (A)
appropriate, duly executed UCC-3 termination statements and
other lien release documentation in form and substance
satisfactory to Lender or (B) evidence of the completion of
all recordings and filings (including UCC-3 termination
statements and other Lien release documentation) as may be
necessary or, in the opinion of and at the request of
Lender, reasonably desirable to perfect Lender's Lien on
the Collateral;
(vi) at or prior to the closing of the ISP Acquisition, Lender
will be granted a first priority perfected Lien (subject to
Permitted Encumbrances) in all assets (other than real
property) acquired pursuant to the ISP Acquisition
(provided that the pledge of the Stock of ISP Israel will
be limited to 66 1/3 % of the capital stock of ISP Israel,
and no pledge of any assets of ISP Israel will be
required), and the Credit Parties shall have executed such
documents and taken such actions as may be required by
Lender in connection therewith including those specified in
the last sentence of Section 3.6;
(vii) on or prior to the date of the ISP Acquisition, Lender
shall have received from the Credit Parties supplements to
the Disclosure Schedules attached hereto, or such
Disclosure Schedules updated, to reflect any change thereto
as a result of the ISP Acquisition and, without limiting
any other provision hereof, any change to any Disclosure
Schedule hereof as a result of the ISP Acquisition shall be
acceptable to the Lender in its sole discretion;
(viii) on or prior to the date of the ISP Acquisition, Lender
shall have received, in form and substance reasonably
satisfactory to Lender, copies of the ISP Acquisition
Documents, certified by the Parent as being true, correct
and complete copies thereof, and Lender shall have
completed all legal due diligence with respect to the ISP
Acquisition with results satisfactory to Lender;
(ix) at the time of the ISP Acquisition, Lender shall have
received a legal opinion of counsel to the Credit Parties
with respect to the ISP Acquisition and the documents
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executed and delivered in connection therewith, in form and
substance satisfactory to Lender; and
(x) at the time of the ISP Acquisition and after giving effect
thereto, no Default or Event of Default shall have occurred
and be continuing.
Notwithstanding the foregoing, the Accounts and Inventory of the ISP
Group purchased in the ISP Acquisition shall not be included in
Eligible Accounts and Eligible Inventory without the prior written
consent of Lender."
(b) deleting SECTION 5(b) in its entirety and inserting in lieu thereof the
following new SECTION 5(b) to read as follows:
"(b) except as otherwise permitted in this Section 5 below, make any
investment (including any investment in or advance to any other
Person for research and development) in, or make or accrue loans or
advances of money to, any Person, other than (i) investments for
research and development in Persons which are not Credit Parties
which, together with the aggregate amount of research and development
expenses of the Credit Parties, do not in the aggregate exceed (A)
$10,250,000 for the Fiscal Year ending December 31, 2001, (B)
$22,500,000 for the Fiscal Year ending December 31, 2002, (C)
$19,500,000 for the Fiscal Year ending December 31, 2003 and (D)
$21,000,000 for the Fiscal Year ending December 31, 2004; (ii)
investments for working capital and general corporate purposes in the
form of intercompany loans or capital contributions from any Credit
Party to any other Credit Party (except Parent), PROVIDED that (A)
each Credit Party shall record all intercompany transactions on its
books and records in a manner satisfactory to Lender, (B) no Default
or Event of Default would occur and be continuing after giving effect
to any such proposed intercompany loan or capital contribution, and
(C) the aggregate amount outstanding at any time of all such
intercompany loans and capital contributions made by any Credit Party
to another Credit Party other than Parent shall not exceed $5,000,000
in any Fiscal Year (less any dividends under Section 5(l)(iv) below
made in such Fiscal Year); and (iii) an investment in the form of an
intercompany loan by Borrower to Parent for the purpose of funding a
portion of the purchase price of the ISP Acquisition and related
costs and expenses, PROVIDED that (A) each of Borrower and Parent
shall record all intercompany transactions on its books and records
in a manner satisfactory to Lender, (B) no Default or Event of
Default would occur and be continuing after giving effect to any such
proposed intercompany loan or capital contribution, and (C) the
aggregate amount outstanding at any time of such intercompany loans
shall not exceed $28,000,000;"
(c) deleting SECTION 5(c) in its entirety and inserting in lieu thereof the
following new SECTION 5(c) to read as follows:
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"(c) create, incur, assume or permit to exist any Indebtedness,
except: (i) the Obligations; (ii) Indebtedness other than the
Obligations in an aggregate outstanding amount not exceeding
$500,000; (iii) deferred taxes; (iv) other Indebtedness set forth in
DISCLOSURE SCHEDULE (5(c)), (v) Indebtedness of Borrower secured by
Borrower's real property (including any such Indebtedness secured by
Borrower's real property set forth as DISCLOSURE SCHEDULE (5(c))),
(vi) Indebtedness represented by Capital Lease Obligations; (vii)
intercompany loans as permitted by Sections 5(b)(ii) and 5(b)(iii);
and (viii) Indebtedness incurred by Parent in connection with funding
a portion of the purchase price of the ISP Acquisition and related
costs and expenses, in an amount not to exceed $28,000,000; PROVIDED,
HOWEVER, that the aggregate amount of Indebtedness incurred by
Borrower outstanding under clauses (v) and (vi) of this Section 5(c)
shall not exceed $10,000,000;"
(d) deleting SECTION 5(d) in its entirety and inserting in lieu thereof the
following new SECTION 5(d) to read as follows:
"(d) enter into any lending, borrowing or other commercial
transaction with any of its employees, directors, Affiliates or any
other Credit Party (including upstreaming and downstreaming of cash
and intercompany advances, and payments by a Credit Party on behalf
of another Credit Party which are not otherwise permitted hereunder)
other than (i) loans to employees in the ordinary course of business
in an aggregate outstanding amount not exceeding $50,000, (ii) those
transactions contemplated under the Merck Equity Documents and (iii)
indebtedness consisting of intercompany loans permitted under clause
(ii) of Section 5(b);"
(e) amending SECTION 5(i) by (i) deleting the word "and" where it appears
immediately prior to clause (vi) and (ii) inserting the following new clauses
(vii) and (viii) at the end of such Section 5(i) to read as follows:
", (vii) transfer by Parent of any assets acquired pursuant to the
ISP Acquisition to any of its wholly owned, domestic Subsidiaries,
PROVIDED, that (A) Parent provides Lender at least ten (10) Business
Days' advance written notice of such asset transfer and (B) the
Credit Parties have provided any such documents or taken any such
actions as may be required by Lender to continue the perfection of
Lender's Liens on such transferred assets, and (viii) the sale of
other assets or properties having a book value not to exceed $250,000
in the aggregate."
(f) deleting SECTION 5(l) in its entirety and inserting in lieu thereof the
following new SECTION 5(l) to read as follows:
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"(l) make or permit any Restricted Payment, except (i) intercompany
loans from and capital contributions to the extent permitted by
clause (ii) or (iii) of Section 5(b) above, (ii) employee loans
permitted under Section 5(d) above, (iii) dividends by Subsidiaries
of Parent (other than Borrower) paid to Parent, (iv) dividends by
Borrower paid to Parent in an amount not to exceed $5,000,000 in any
Fiscal Year, PROVIDED that no Default or Event of Default would occur
and be continuing after giving effect to any such proposed dividend,
and (v) prior to the earlier of March 1, 2003 and the consummation of
the ISP Acquisition, repurchase by Parent of its common Stock in an
amount not to exceed $30,000,000 in the aggregate, PROVIDED that (A)
no Default or Event of Default shall have occurred or be continuing
either before or after giving effect to any repurchase of common
Stock, (B) no proceeds of the Revolving Credit Loan are used for such
repurchase of common Stock, and (C) the Revolving Credit Loan balance
is zero ($0);"
and (g) inserting the following new subsections at the end thereof to read as
follows:
"(n) without limiting the prohibitions on mergers involving Borrower
or any Guarantor contained in the Loan Agreement, neither Borrower
nor any Guarantor shall reincorporate or reorganize itself under the
laws of any jurisdiction other than the jurisdiction in which it is
incorporated or organized as of the date hereof without the prior
written consent of the Lender; or
(o) each of Borrower and any Guarantor executing this Agreement
acknowledges that it is not authorized to file any financing
statement or amendment or termination statement with respect to any
financing statement without the prior written consent of Lender and
agrees that it will not do so without the prior written consent of
Lender, subject to Borrower's or such Guarantor's rights under
Section 9-509(d)(2) of the Code."
8. AMENDMENT TO SECTION 6 OF THE LOAN AGREEMENT. As of the Amendment
Effective Date, SECTION 6 of the Loan Agreement is amended by: (a) amending and
restating SECTION 6.1(a) in its entirety to read as follows:
"(a) As collateral security for the prompt and complete payment and
performance of the Obligations, Borrower and each Guarantor executing
this Agreement hereby grants to the Lender a security interest in and
Lien upon all of its property and assets, whether real or personal,
tangible or intangible, and whether now owned or hereafter acquired,
or in which it now has or at any time in the future may acquire any
right, title, or interest, including all of the following property in
which it now has or at any time in the future may acquire any right,
title or interest: all Accounts; all Deposit Accounts, other bank
accounts and all funds on deposit therein; all money, cash and cash
equivalents; all Investment Property; all Stock; all Goods (including
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Inventory, Equipment and Fixtures); all Chattel Paper, Documents and
Instruments; all Books and Records; all General Intangibles
(including all Intellectual Property, contract rights, choses in
action, Payment Intangibles and Software); all Letter-of-Credit
Rights; all Supporting Obligations; and to the extent not otherwise
included, all Proceeds, tort claims, insurance claims and other
rights to payment not otherwise included in the foregoing and
products of all and any of the foregoing and all accessions to,
substitutions and replacements for, and rents and profits of, each of
the foregoing, but excluding in all events Hazardous Waste (all of
the foregoing, together with any other collateral pledged to the
Lender pursuant to any other Loan Document, collectively, the
"COLLATERAL")."
(b) inserting the following sentence at the end of SECTION 6.1(b) to read as
follows:
"Borrower and each Guarantor executing this Agreement shall promptly,
and in any event within two (2) Business Days after the same is
acquired by it, notify Lender of any commercial tort claim (as
defined in the Code) acquired by it and unless otherwise consented by
Lender, Borrower or such Guarantor shall enter into a supplement to
this Loan Agreement granting to Lender a Lien in such commercial tort
claim."
and (c) deleting the last sentence of Section 6.3 in its entirety and inserting
the following new sentences in lieu thereof to read as follows:
"Borrower and any Guarantor executing this Agreement also hereby (i)
authorizes Lender to file any financing statements, continuation
statements or amendments thereto that (x) indicate the Collateral (1)
as all assets of Borrower or such Guarantor (or any portion of
Borrower's or such Guarantor's assets) or words of similar effect,
regardless of whether any particular asset comprised in the
Collateral falls within the scope of Article 9 of the Code of such
jurisdiction, or (2) as being of an equal or lesser scope or with
greater detail, and (y) contain any other information required by
Part 5 of Article 9 of the Code for the sufficiency or filing office
acceptance of any financing statement, continuation statement or
amendment and (ii) ratifies its authorization for Lender to have
filed any initial financial statements, or amendments thereto if
filed prior to the date hereof. Borrower and each Guarantor executing
this Agreement acknowledges that it is not authorized to file any
financing statement or amendment or termination statement with
respect to any financing statement without the prior written consent
of Lender and agrees that it will not do so without the prior written
consent of Lender, subject to such Credit Party's rights under
Section 9-509(d)(2) of the Code."
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9. AMENDMENT TO SECTION 8 OF THE LOAN AGREEMENT. As of the Amendment
Effective Date, SECTION 8 of the Loan Agreement is amended by: (a) amending and
restating SECTIONS 8.1(e) to (g) in their entirety to read as follows:
"(e) there shall be commenced against Borrower or any other Credit
Party any Litigation seeking issuance of a warrant of attachment,
execution, distraint or similar process against all or any
substantial part of its assets which results in the entry of an order
for any such relief which remains unstayed or undismissed for sixty
(60) consecutive days; or Borrower or any other Credit Party shall
have concealed, removed or permitted to be concealed or removed, any
part of its property with intent to hinder, delay or defraud its
creditors or any of them or made or suffered a transfer of any of its
property or the incurring of an obligation which may be fraudulent
under any applicable bankruptcy, fraudulent transfer or other similar
law; or
(f) a case or proceeding shall have been commenced involuntarily
against Borrower or any other Credit Party in a court having
competent jurisdiction seeking a decree or order: (i) under the
United States Bankruptcy Code or any other applicable Federal, state
or foreign bankruptcy or other similar law, and seeking either (x)
the appointment of a custodian, receiver, liquidator, assignee,
trustee or sequestrator (or similar official) for such Person or of
any substantial part of its properties, or (y) the reorganization or
winding up or liquidation of the affairs of any such Person, and such
case or proceeding shall remain undismissed or unstayed for sixty
(60) consecutive days or such court shall enter a decree or order
granting the relief sought in such case or proceeding; or (ii)
invalidating or denying any Person's right, power, or competence to
enter into or perform any of its obligations under any Loan Document
or invalidating or denying the validity or enforceability of this
Agreement or any other Loan Document or any action taken hereunder or
thereunder; or
(g) Borrower or any other Credit Party shall (i) commence any case,
proceeding or other action under any existing or future law of any
jurisdiction, domestic or foreign, relating to bankruptcy,
insolvency, reorganization, conservatorship or relief of debtors,
seeking to have an order for relief entered with respect to it or
seeking appointment of a custodian, receiver, liquidator, assignee,
trustee or sequestrator (or similar official) for it or any
substantial part of its properties, (ii) make a general assignment
for the benefit of creditors, (iii) consent to or take any action in
furtherance of, or, indicating its consent to, approval of, or
acquiescence in, any of the acts set forth in paragraphs (e) or (f)
of this Section 8.1 or clauses (i) and (ii) of this paragraph (g), or
(iv) shall admit in writing its inability to, or shall be generally
unable to, pay its debts as such debts become due; or"
and (b) inserting the following new subsection at the end thereof to read as
follows:
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"(k) an ERISA Event shall have occurred and be continuing that, in
the opinion of the Lender, when taken together with all other ERISA
Events that shall have occurred and are then continuing, would
reasonably be expected to result in liability of any Credit Party in
an aggregate amount exceeding the Minimum Actionable Amount."
10. AMENDMENT TO SECTION 10 OF THE LOAN AGREEMENT. As of the
Amendment Effective Date, SECTION 10 of the Loan Agreement is amended by adding
the following new subsections at the end thereof to read as follows:
"10.14 PRESS RELEASES. Each Credit Party executing this Agreement
agrees that neither it nor its Affiliates will in the future issue
any press release or other public disclosure using the name of
General Electric Capital Corporation or its affiliates or referring
to this Agreement or the other Loan Documents without at least two
(2) Business Days' prior notice to Lender and without the prior
written consent of Lender unless (and only to the extent that) such
Credit Party or Affiliate is required to do so under law or the rules
of any securities exchange, and then, in any event, such Credit Party
or Affiliate will consult with Lender before issuing such press
release or other public disclosure. Each Credit Party consents to the
publication by Lender of a tombstone or similar advertising material
relating to the financing transactions contemplated by this
Agreement.
10.15 WAIVER OF RIGHTS. IF AND TO THE EXTENT THAT ANY OBLIGATION OF
ANY CREDIT PARTY TO LENDER SHALL BE CONSIDERED AN OBLIGATION OF
GUARANTY OR SURETYSHIP, THEN THE FOLLOWING PROVISIONS OF THIS SECTION
10.15 SHALL APPLY WITH RESPECT TO SUCH CREDIT PARTY SOLELY TO THE
EXTENT THAT SUCH CREDIT PARTY IS DEEMED TO ACT IN THE CAPACITY OF A
GUARANTOR AND SHALL NOT EFFECT A WAIVER OF RIGHTS IN SUCH PERSON'S
CAPACITY AS BORROWER OR A CREDIT PARTY;
(A) SUCH CREDIT PARTY EXPRESSLY WAIVES THE RIGHT TO REQUIRE
LENDER FIRST TO PURSUE ANY OTHER PERSON, THE COLLATERAL, OR ANY OTHER
SECURITY OR GUARANTY THAT MAY BE HELD FOR THE OBLIGATIONS, OR TO
APPLY ANY SUCH SECURITY OR GUARANTY TO THE OBLIGATIONS BEFORE SEEKING
FROM SUCH CREDIT PARTY PAYMENT IN FULL OF ITS LIABILITIES TO LENDER
OR PROCEEDING AGAINST SUCH CREDIT PARTY FOR SAME.
(B) SUCH CREDIT PARTY ACKNOWLEDGES THAT LENDER MAY, UNDER
APPLICABLE LAW, PROCEED TO REALIZE ITS BENEFITS UNDER ANY OF THE LOAN
DOCUMENTS GIVING LENDER A LIEN UPON ANY COLLATERAL, WHETHER OWNED BY
BORROWER OR ANY CREDIT PARTY OR BY ANY OTHER PERSON, EITHER BY
JUDICIAL FORECLOSURE OR BY NON-JUDICIAL SALE OR ENFORCEMENT. LENDER
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MAY, AT ITS SOLE OPTION, DETERMINE WHICH OF ITS REMEDIES OR RIGHTS IT
MAY PURSUE WITHOUT AFFECTING ANY OF ITS RIGHTS AND REMEDIES. IF, IN
THE EXERCISE OF ANY OF ITS RIGHTS AND REMEDIES, LENDER SHALL FORFEIT
ANY OF ITS RIGHTS OR REMEDIES, INCLUDING ITS RIGHT TO ENTER A
DEFICIENCY JUDGMENT AGAINST BORROWER OR ANY CREDIT PARTY OR ANY OTHER
PERSON, WHETHER BECAUSE OF ANY APPLICABLE LAWS PERTAINING TO
"ELECTION OF REMEDIES" OR THE LIKE, SUCH CREDIT PARTY HEREBY CONSENTS
TO SUCH ACTION BY LENDER AND WAIVES ANY CLAIM BASED UPON SUCH ACTION,
EVEN IF SUCH ACTION BY LENDER SHALL RESULT IN A FULL OR PARTIAL LOSS
OF ANY RIGHTS OF SUBROGATION WHICH SUCH CREDIT PARTY MIGHT OTHERWISE
HAVE HAD BUT FOR SUCH ACTION BY LENDER. ANY ELECTION OF REMEDIES
WHICH RESULTS IN THE DENIAL OR IMPAIRMENT OF THE RIGHT OF LENDER TO
SEEK A DEFICIENCY JUDGMENT AGAINST ANY CREDIT PARTY SHALL NOT IMPAIR
ANY OTHER CREDIT PARTY'S OBLIGATION TO PAY THE FULL AMOUNT OF THE
OBLIGATIONS. IN THE EVENT LENDER SHALL BID AT ANY FORECLOSURE OR
TRUSTEE'S SALE OR AT ANY PRIVATE SALE PERMITTED BY LAW OR THE LOAN
DOCUMENTS AND CONDUCTED IN ACCORDANCE THEREWITH, LENDER MAY BID ALL
OR LESS THAN THE AMOUNT OF THE OBLIGATIONS AND THE AMOUNT OF SUCH BID
NEED NOT BE PAID BY LENDER BUT SHALL BE CREDITED AGAINST THE
OBLIGATIONS. THE AMOUNT OF THE SUCCESSFUL BID AT ANY SUCH SALE,
WHETHER LENDER OR ANY OTHER PARTY IS THE SUCCESSFUL BIDDER, SHALL BE
CONCLUSIVELY DEEMED TO BE THE FAIR MARKET VALUE OF THE COLLATERAL AND
THE DIFFERENCE BETWEEN SUCH BID AMOUNT AND THE REMAINING BALANCE OF
THE OBLIGATIONS SHALL BE CONCLUSIVELY DEEMED TO BE THE AMOUNT OF THE
OBLIGATIONS GUARANTEED BY SUCH CREDIT PARTY, NOTWITHSTANDING THAT ANY
PRESENT OR FUTURE LAW OR COURT DECISION OR RULING MAY HAVE THE EFFECT
OF REDUCING THE AMOUNT OF ANY DEFICIENCY CLAIM TO WHICH LENDER MIGHT
OTHERWISE BE ENTITLED BUT FOR SUCH BIDDING AT ANY SUCH SALE.
(C) SUCH CREDIT PARTY AGREES THAT LENDER SHALL BE UNDER NO
OBLIGATION TO (I) MARSHAL ANY ASSETS IN FAVOR OF SUCH CREDIT PARTY,
(II) PROCEED FIRST AGAINST ANY OTHER CREDIT PARTY OR PERSON OR ANY
PROPERTY OF ANY OTHER CREDIT PARTY OR PERSON OR AGAINST ANY
COLLATERAL, (III) ENFORCE FIRST ANY OTHER GUARANTY OBLIGATIONS WITH
RESPECT TO, OR SECURITY FOR, THE OBLIGATIONS, OR (IV) PURSUE ANY
OTHER REMEDY IN LENDER'S POWER THAT SUCH CREDIT PARTY MAY NOT BE ABLE
12
TO PURSUE ITSELF AND THAT MAY LIGHTEN SUCH CREDIT PARTY 'S BURDEN,
ANY RIGHT TO WHICH SUCH CREDIT PARTY HEREBY EXPRESSLY WAIVES.
(D) EACH CREDIT PARTY ACKNOWLEDGES THAT THE FOREGOING WAIVERS
ARE A MATERIAL INDUCEMENT TO LENDER'S ENTERING INTO THIS AGREEMENT
AND THAT LENDER IS RELYING UPON THE FOREGOING WAIVERS IN ITS FUTURE
DEALINGS WITH THE CREDIT PARTIES. EACH CREDIT PARTY WARRANTS AND
REPRESENTS THAT IT HAS REVIEWED THE FOREGOING WAIVERS WITH ITS LEGAL
COUNSEL AND HAS KNOWINGLY AND VOLUNTARILY WAIVED ITS JURY TRIAL
RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL. IN THE EVENT OF
LITIGATION, THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A
TRIAL BY THE COURT."
11. AMENDMENT TO SCHEDULE A TO THE LOAN AGREEMENT. SCHEDULE A to the
Loan Agreement is hereby amended as of the Amendment Effective Date by (a)
inserting the following new definitions in the proper order thereof to read as
follows:
"`DEPOSIT ACCOUNTS" shall mean all "deposit accounts" as such term is
defined in the Code, now or hereafter held in the name of any Person.
"ELEVENTH AMENDMENT EFFECTIVE DATE" shall mean March __, 2002.
"EXCESS BORROWING AVAILABILITY" shall mean Borrowing Availability
less the amount of the outstanding Revolving Credit Loan.
"FIXTURES" shall mean all "fixtures" as such term is defined in the
Code, now owned or hereafter acquired by any Person.
"INACTIVE SUBSIDIARY" shall have the meaning assigned to it in
Section 3.28.
"INTELLECTUAL PROPERTY SECURITY AGREEMENT" shall mean that certain
Intellectual Property Security Agreement, dated as of March __, 2002
between Parent, Borrower, the other Grantors signatory thereto and
Lender, together with all amendments, modifications and supplements
thereto.
"IPR" shall mean Israel Pharmaceutical Resources, L.P., an Israeli
limited partnership.
"ISP ACQUISITION" shall mean the acquisition pursuant to the ISP
Acquisition Agreement by Parent from the ISP Group of its fine
chemicals business, consisting of a manufacturing facility in
Columbus, Ohio, certain inventory, intellectual property, and other
assets related to the manufacture, sale, research and development of
13
advanced intermediates and active pharmaceutical ingredients for
brand name and generic pharmaceutical companies and all of the issued
and outstanding capital stock of ISP Israel.
"ISP ACQUISITION AGREEMENT" shall mean the Purchase Agreement dated
as of December 28, 2001 among the Parent and the ISP Group
substantially in the form attached to the letter agreement dated
December 28, 2001 among the Parent and the ISP Group, or such other
agreement as Lender may deem approved in its discretion.
"ISP GROUP" shall mean ISP Hungary Holdings Limited, ISP Investments
Inc., ISP Chemicals Inc. and ISP Technologies Inc.
"ISP ISRAEL" shall mean ISP FineTech Ltd., an Israeli corporation.
"LITIGATION" shall mean any claim, lawsuit, litigation, investigation
or proceeding of or before any arbitrator or Governmental Authority.
"LETTER-OF-CREDIT RIGHTS" shall mean "letter-of-credit rights" as
such term is defined in the Code, now owned or hereafter acquired by
any Person, including rights to payment or performance under a letter
of credit, whether or not such Person, as beneficiary, has demanded
or is entitled to demand payment or performance.
"PAYMENT INTANGIBLES" shall mean all "payment intangibles" as such
term is defined in the Code, now owned or hereafter acquired by any
Person.
"PHARMA" shall mean Par Pharma Group, Ltd., a Delaware corporation.
"PRX" shall mean PRX Pharmaceuticals, Ltd., a Delaware corporation.
"RESEARCH" shall mean PRI-Research, Inc., a Delaware corporation.
"QUAD" shall mean Quad Pharmaceuticals, Inc., an Indiana corporation.
"SOFTWARE" shall mean all "software" as such term is defined in the
Code, now owned or hereafter acquired by any Person, other than
software embedded in any category of Goods, including all computer
programs and all supporting information provided in connection with a
transaction related to any program.
"SUPPORTING OBLIGATIONS" shall mean all "supporting obligations" as
such term is defined in the Code, including letters of credit and
guaranties issued in support of Accounts, Chattel Paper, Documents,
General Intangibles, Instruments, or Investment Property."
and (b) amending and restating each of the following definitions in its entirety
to read as follows:
14
"`ACCOUNT DEBTOR" shall mean any Person who is or may become
obligated with respect to, or on account of, an Account, Chattel
Paper or General Intangibles (including a Payment Intangible).
"ACCOUNTS" shall mean all "accounts," as such term is defined in the
Code, now owned or hereafter acquired by any Person, including: (i)
all accounts receivable, other receivables, book debts and other
forms of obligations (other than forms of obligations evidenced by
Chattel Paper or Instruments) (including any such obligations that
may be characterized as an account or contract right under the Code);
(ii) all of such Person's rights in, to and under all purchase orders
or receipts for goods or services; (iii) all of such Person's rights
to any goods represented by any of the foregoing (including unpaid
sellers' rights of rescission, replevin, reclamation and stoppage in
transit and rights to returned, reclaimed or repossessed goods); (iv)
all rights to payment due to such Person for Goods or other property
sold, leased, licensed, assigned or otherwise disposed of, for a
policy of insurance issued or to be issued, for a secondary
obligation incurred or to be incurred, for energy provided or to be
provided, for the use or hire of a vessel under a charter or other
contract, arising out of the use of a credit card or charge card, or
for services rendered or to be rendered by such Person or in
connection with any other transaction (whether or not yet earned by
performance on the part of such Person) ; (v) all health care
insurance receivables; and (vi) all collateral security and
guarantees of any kind given by any Account Debtor or any other
Person with respect to any of the foregoing.
"BORROWING BASE" shall mean at any time an amount equal to the sum at
such time of:
(a) Eighty-five percent (85%) (or such lesser percentage as may be
specified by Lender in its reasonable credit judgment from time to
time by written notice to Borrower) of the value (as determined by
Lender) of Borrower's Eligible Accounts; PLUS
(b) the lesser of (i) $12,000,000 or (ii) fifty percent (50%) (or
such lesser percentage as may be specified by Lender in its
reasonable credit judgment from time to time by written notice to
Borrower) of the value of Borrower's Eligible Inventory, as
determined by Lender, valued on a first-in, first-out basis (at the
lower of cost or market).
"CHATTEL PAPER" shall mean all "chattel paper," as such term is
defined in the Code, including electronic chattel paper, now owned or
hereafter acquired by any Person.
"COLLATERAL" shall have the meaning assigned to it in Section 6.1(a).
15
"CODE" shall mean the Uniform Commercial Code as the same may, from
time to time, be in effect in the State of New York; provided, that
in the event that, by reason of mandatory provisions of law, any or
all of the attachment, perfection or priority of, or remedies with
respect to, Lender's Lien on any Collateral is governed by the
Uniform Commercial Code as in effect in a jurisdiction other than the
State of New York, the term "Code" shall mean the Uniform Commercial
Code as in effect in such other jurisdiction for purposes of the
provisions of this Agreement relating to such attachment, perfection,
priority or remedies and for purposes of definitions related to such
provisions; provided further, that to the extent that the Code is
used to define any term herein or in any Loan Document and such term
is defined differently in different Articles or Divisions of the
Code, the definition of such term contained in Article or Division 9
shall govern.
"COMMITMENT MATURITY DATE" shall mean the earliest of (i) March [__],
2005, (ii) the date Lender's obligation to advance funds is
terminated and the Obligations are declared to be due and payable
pursuant to Section 7.2 and (iii) the date of prepayment in full by
Borrower of the Obligations in accordance with the provisions of
Section 1.2(b).
"COMMITMENT TERMINATION DATE" shall mean the earliest of (i) March
[__], 2005, (ii) the date of Termination of Lender's obligation to
advance funds pursuant to Section 7.2 and (iii) the date of
prepayment in full by Borrower of the Obligations in accordance with
the provisions of Section 1.2(b).
"ERISA EVENT" shall mean (a) any "reportable event", as defined in
Section 4043 of ERISA or the regulations issued thereunder with
respect to a Plan (other than an event for which the 30-day notice
period is waived); (b) the existence with respect to any Plan of an
"accumulated funding deficiency" (as defined in Section 412 of the
IRC or Section 302 of ERISA), whether or not waived; (c) the filing
pursuant to Section 412(b) of the IRC or Section 303(d) of ERISA of
an application for a waiver of the minimum funding standard with
respect to any Plan; (d) the incurrence by any Credit Party or any
ERISA Affiliate of any liability under Title IV of ERISA with respect
to the termination of any Title IV Plan; (e) the receipt by any
Credit Party or any ERISA Affiliate from the PBGC or a plan
administrator of any notice expressing an intention to terminate any
Title IV Plan or to appoint a trustee to administer any Title IV
Plan; (f) the incurrence by any Credit Party or any ERISA Affiliate
of any liability with respect to any withdrawal or partial withdrawal
from any Title IV Plan or Multiemployer Plan; or (g) the receipt by
any Credit Party or any ERISA Affiliate of any notice, or the receipt
by any Multiemployer Plan from any Credit Party or any ERISA
Affiliate of any notice, concerning the imposition of Withdrawal
Liability or a determination that a Multiemployer Plan is, or is
expected to be, insolvent or in reorganization, within the meaning of
Title IV of ERISA.
16
"GENERAL INTANGIBLES" shall mean all "general intangibles," as such
term is defined in the Code, now owned or hereafter acquired by any
Person, including all right, title and interest that such Person may
now or hereafter have in or under any Contract, all Payment
Intangibles, customer lists, Licenses, Intellectual Property,
interests in partnerships, joint ventures and other business
associations, permits, proprietary or confidential information,
inventions (whether or not patented or patentable), technical
information, procedures, designs, knowledge, know-how, software, data
bases, data, skill, expertise, experience, processes, models,
drawings, materials, Books and Records, Goodwill (including the
Goodwill associated with any Intellectual Property), all rights and
claims in or under insurance policies (including insurance for fire,
damage, loss, and casualty, whether covering personal property, real
property, tangible rights or intangible rights, all liability, life,
key-person, and business interruption insurance, and all unearned
premiums), uncertificated securities, choses in action, deposit
accounts, rights to receive tax refunds and other payments, rights to
received dividends, distributions, cash, Instruments and other
property in respect of or in exchange for pledged Stock and
Investment Property, and rights of indemnification.
"GOODS" shall mean all "goods," as such term is defined in the Code,
now owned or hereafter acquired by any Person, wherever located,
including embedded software to the extent included in "goods" as
defined in the Code, manufactured homes, standing timber that is cut
and removed for sale and unborn young of animals.
"INVENTORY" shall mean all "inventory," as such term is defined in
the Code, now owned or hereafter acquired by any Person, wherever
located, including all inventory, merchandise, goods and other
personal property that are held by or on behalf of such Person for
sale or lease or are furnished or are to be furnished under a
contract of service or that constitute raw materials, work in
process, finished goods, returned goods, or materials or supplies of
any kind, nature or description used or consumed or to be used or
consumed in such Person's business or in the processing, production,
packaging, promotion, delivery or shipping of the same, including all
supplies and embedded software.
"LOAN DOCUMENTS" shall mean the Agreement, the Revolving Credit Note,
each Pledge Agreement, the Financial Statements, each Guaranty, the
Powers of Attorney, the patent and trademark assignment, the
Intellectual Property Security Agreement, and the other documents and
instruments listed in Schedule E, and all documents, instruments,
certificates and notices at any time delivered by and between Lender
and any Credit Party in connection with any of the foregoing.
"MAXIMUM AMOUNT" shall mean the maximum amount of credit to be
provided by Lender to or for the benefit of Borrower for aggregate
Revolving Credit Advances and Letter of Credit Obligations
outstanding at any time, without regard to the Borrowing Base or
reserves, which amount, for purposes of the Agreement, is Thirty
Million Dollars ($30,000,000).
17
"MINIMUM ACTIONABLE AMOUNT" shall mean $500,000.
"PROCEEDS" shall mean "proceeds," as such term is defined in the Code
and, in any event, shall include: (i) any and all proceeds of any
insurance, indemnity, warranty or guaranty payable to Borrower or any
other Credit Party from time to time with respect to any Collateral;
(ii) any and all payments (in any form whatsoever) made or due and
payable to Borrower or any other Credit Party from time to time in
connection with any requisition, confiscation, condemnation, seizure
or forfeiture of any Collateral by any governmental body, authority,
bureau or agency (or any person acting under color of governmental
authority); (iii) any claim of Borrower or any other Credit Party
against third parties (a) for past, present or future infringement of
any Intellectual Property or (b) for past, present or future
infringement or dilution of any Trademark or Trademark License or for
injury to the goodwill associated with any Trademark, Trademark
registration or Trademark licensed under any Trademark License; (iv)
any recoveries by Borrower or any other Credit Party against third
parties with respect to any litigation or dispute concerning any
Collateral, including claims arising out of the loss or nonconformity
of, interference with the use of, defects in, or infringement of
rights in, or damage to, Collateral; (v) all amounts collected on, or
distributed on account of, other Collateral, including dividends,
interest, distributions and Instruments with respect to Investment
Property and pledged Stock; and (vi) any and all other amounts,
rights to payment or other property acquired upon the sale, lease,
license, exchange or other disposition of Collateral and all rights
arising out of Collateral.
"SUBSIDIARY GUARANTOR" shall mean NRI, ParCare, IPR, Research, PRX,
Quad, and Pharma and each other Subsidiary of Parent, Borrower or
other Credit Party which executes a guaranty or a support, put or
other similar agreement in favor of Lender in connection with the
transactions contemplated by the Agreement."
12. AMENDMENT TO SCHEDULE D TO THE LOAN AGREEMENT. SCHEDULE D to the
Loan Agreement is hereby amended and restated in its entirety as of the
Amendment Effective Date to read as set forth in SCHEDULE D attached hereto.
13. AMENDMENT TO SCHEDULE F TO THE LOAN AGREEMENT. SCHEDULE F to the
Loan Agreement is hereby amended and restated in its entirety as of the
Amendment Effective Date to read as set forth in SCHEDULE F attached hereto.
14. AMENDMENT TO DISCLOSURE SCHEDULES. The DISCLOSURE SCHEDULES to
the Loan Agreement are hereby amended and restated in their entirety as of the
Amendment Effective Date to read as set forth in EXHIBIT A attached hereto.
15. REPRESENTATIONS AND WARRANTIES. To induce Lender to enter into
this Amendment, each Credit Party hereby represents and warrants that:
18
A. The execution, delivery and performance of this Amendment and
the performance of the Loan Agreement, as amended hereby (the
"AMENDED LOAN AGREEMENT"), the Intellectual Property Security
Agreement and the Research Pledge Agreement (as defined below), by
each Credit Party which is a party thereto: (i) are within their
respective corporate powers; (ii) have been duly authorized by all
necessary corporate and shareholder action; and (iii) are not in
contravention of any provision of their respective certificates or
articles of incorporation or by-laws or other organizational
documents.
B. The execution, delivery and performance of the Amended and
Restated Revolving Credit Note, dated as of the date hereof, from
Borrower in the principal amount of $30,000,000 (the "AMENDED
REVOLVING CREDIT NOTE"): (i) are within Borrower's corporate powers;
(ii) have been duly authorized by all necessary corporate and
shareholder action; and (iii) are not in contravention of any
provision of its certificate or article of incorporation or by-laws
or other organizational documents.
C. Each of this Amendment, the Intellectual Property Security
Agreement and the Research Pledge Agreement has been duly executed
and delivered by or on behalf of each Credit Party which is a party
thereto and the Amended Revolving Credit Note has been duly executed
and delivered by Borrower.
D. Each of this Amendment, the Amended Loan Agreement, the
Intellectual Property Security Agreement and the Research Pledge
Agreement constitutes a legal, valid and binding obligation of each
such Credit Party which is a party thereto enforceable against each
Credit Party in accordance with its terms, except as enforceability
may be limited by applicable bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting creditors' rights generally and
by general equitable principles (whether enforcement is sought by
proceedings in equity or at law).
E. The Amended Revolving Credit Note constitutes a legal, valid
and binding obligation of Borrower enforceable against Borrower in
accordance with its terms, except as enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting creditors' rights generally and by general
equitable principles (whether enforcement is sought by proceedings in
equity or at law).
F. No Default (other than those waived pursuant hereto) has
occurred and is continuing both before and after giving effect to
this Amendment.
G. No action, claim or proceeding is now pending or, to the
knowledge of each Credit Party, threatened against any Credit Party,
at law, in equity or otherwise, before any court, board, commission,
agency or instrumentality of any federal, state, or local government
or of any agency or subdivision thereof, or before any arbitrator or
panel of arbitrators, which challenges any Credit Party's right,
power, or competence to enter into this Amendment or, to the extent
applicable, perform any of its obligations under this Amendment, the
19
Amended Loan Agreement, the Amended Revolving Credit Note, the
Intellectual Property Security Agreement, the Research Pledge
Agreement or any other Loan Document, or the validity or
enforceability of this Amendment, the Amended Loan Agreement, the
Amended Revolving Credit Note or any other Loan Document or any
action taken under this Amendment, the Amended Loan Agreement, the
Amended Revolving Credit Note or any other Loan Document.
H. The representations and warranties of the Credit Parties
contained in the Loan Agreement, each Pledge Agreement, the Trademark
Security Agreement and the Intellectual Property Security Agreement
shall be true and correct on and as of the Amendment Effective Date
(after giving effect to this Amendment) with the same effect as if
such representations and warranties had been made on and as of such
date (and any such representation or warranty which is expressly made
only as of the Closing Date or another specified date shall be made
as of the Amendment Effective Date).
16. NO OTHER AMENDMENT. Except as expressly provided in Sections 2
through 14 hereof, the Loan Agreement shall be unmodified and shall continue to
be in full force and effect in accordance with its terms. Except as expressly
provided herein, this Amendment shall not be deemed a waiver of any term or
condition of any Loan Document and shall not be deemed to prejudice any right or
rights which Lender may now have or may have in the future under or in
connection with any Loan Document or any of the instruments or agreements
referred to therein, as the same may be amended from time to time.
17. OUTSTANDING INDEBTEDNESS; AMENDMENT OF CLAIMS. Each Credit Party
hereby acknowledges and agrees that as of March 15, 2002 the aggregate
outstanding principal amount of the Revolving Credit Loan is $0.00. Each Credit
Party hereby waives, releases, remises and forever discharges Lender and each
other Indemnified Person from any and all Claims of any kind or character, known
or unknown, which each Credit Party ever had, now has or might hereafter have
against Lender which relates, directly or indirectly, to any acts or omissions
of Lender or any other Indemnified Person on or prior to the date hereof. This
Amendment shall constitute a Loan Document for all purposes of the Loan
Agreement and each other Loan Document.
18. EXPENSES. Borrower hereby reconfirms its obligations pursuant to
Section 10.2 of the Loan Agreement to pay and reimburse Lender for all
reasonable out-of-pocket expenses (including, without limitation, reasonable
fees of counsel) incurred in connection with the negotiation, preparation,
execution and delivery of this Amendment and all other documents and instruments
delivered in connection herewith.
19. PLEDGE BY RESEARCH. Borrower shall use its best efforts to
deliver to Lender, no later than 30 days following the Amendment Effective Date,
a fully executed Pledge Agreement duly executed by Research pledging 66 1/3 % of
its partnership interest in IPR to Lender as collateral for the Obligations, and
any documents related thereto (the "RESEARCH PLEDGE AGREEMENT"). Failure of
Borrower to use its best efforts to deliver the Research Pledge Agreement on or
20
prior to 30 days from the Amendment Effective Date shall constitute an immediate
Event of Default.
20. COLLATERAL APPRAISAL. No later than 120 days following the
Amendment Effective Date, Lender shall have received an inventory appraisal of
Borrower's Inventory, performed by appraisers retained by Borrower and
acceptable to Lender, in form and substance satisfactory to Lender and
reflecting asset values of Borrower at levels acceptable to Lender. No later
than thirty days following the Amendment Effective Date Borrower shall have
initiated such inventory appraisal and provided to Lender evidence thereof.
21. EFFECTIVENESS. This Amendment shall become effective as of the
date hereof (the "AMENDMENT EFFECTIVE DATE") only upon satisfaction in full in
the judgment of the Lender of each of the following conditions on or prior to
March __, 2002:
A. AMENDMENT. Lender shall have received four original copies of
this Amendment duly executed and delivered by Lender and each Credit
Party.
B. PAYMENT OF AMENDMENT FEE AND EXPENSES. Borrower shall have
paid to Lender a non-refundable amendment fee in the amount of
$150,000 and all costs and expenses owing in connection with this
Amendment and the other Loan Documents and due to Lender (including,
without limitation, reasonable legal fees and expenses).
C. NOTE. Lender shall have received a fully executed Amended
Revolving Credit Note from Borrower in exchange for the Revolving
Credit Note in effect prior to the Amendment Effective Date.
D. OPINION. Lender shall have received a legal opinion of
counsel to the Credit Parties with respect to this Amendment and the
transactions contemplated hereby in form and substance satisfactory
to Lender.
E. COLLATERAL DOCUMENTS. Lender shall have received (i)
certified copies of Requests for Information or other evidence
satisfactory to Lender, listing all effective financing statements or
chattel mortgages which name any Credit Party (under such Credit
Party's current name, any previous name or any trade name or doing
business name) as debtor, together with copies of such other
financing statements; (ii) certificates or other evidences of
ownership representing all instruments constituting part of the
Collateral (including, without limitation, the stock certificates for
the Subsidiaries of each Credit Party) and appropriate undated stock
powers (or the equivalent thereof) executed in blank; and (iii) UCC-1
financing statements for each Credit Party, in form and substance
satisfactory to Lender.
F. INTELLECTUAL PROPERTY. Lender shall have received agreements
relating to the granting to Lender of a security interest in
Intellectual Property of Borrower and each other Credit Party to the
extent applicable in a form suitable for filing with the appropriate
Federal or State filing office.
21
G. LITIGATION DOCUMENTS. Lender shall have received, certified
by Borrower as true correct and complete, copies of all complaints
and pleadings relating to any patent infringement or related actions
against any Credit Party filed relating to fluoxetine.
H. POWERS OF ATTORNEY. Lender shall have received fully executed
Powers of Attorney for Quad, Research, PRX, and Pharma, each in form
and substance satisfactory to Lender.
I. SECRETARIAL CERTIFICATES. A Secretarial Certificate
substantially in the form of Exhibit D to the Loan Agreement duly
completed and executed by the Secretary or Assistant Secretary of
each Credit Party, together with all attachments thereto.
J. DISCLOSURE SCHEDULES. Lender shall have received revised and
updated Disclosure Schedules for all Credit Parties, certified by an
officer of Borrower as true correct and complete as of the Amendment
Effective Date.
K. REPRESENTATIONS AND WARRANTIES. The representations and
warranties of each Credit Party contained in this Amendment shall be
true and correct on and as of the Amendment Effective Date.
22. GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED BY, AND
INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
23. COUNTERPARTS. This Amendment may be executed by the parties
hereto on any number of separate counterparts and all of said counterparts taken
together shall be deemed to constitute one and the same instrument.
24. JOINDER. By its signature below, each of Quad, Research, PRX and
Pharma joins to the Loan Agreement as a Credit Party and a Guarantor, and
assumes all of the rights, responsibilities of a Credit Party and a Guarantor as
set forth therein, including but not limited to (i) the obligations of a
Guarantor as set forth in SECTION 7 of the Loan Agreement and (ii) any
representations and warranties, in each case as if such entity were an original
signatory thereto.
(SIGNATURE PAGE FOLLOWS)
22
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
be duly executed and delivered as of the day and year first above written.
BORROWER:
PAR PHARMACEUTICAL, INC.
By: /s/ DENNIS J. O'CONNOR
-----------------------
Name: Dennis J. O'Connor
Title: Vice President
LENDER:
GENERAL ELECTRIC CAPITAL CORPORATION
By: /s/ MICHAEL LUSTBADER
----------------------
Name: Michael Lustbader
Its: Duly Authorized Signatory
PARENT:
PHARMACEUTICAL RESOURCES, INC.
By: /s/ DENNIS J. O'CONNOR
-----------------------
Name: Dennis J. O'Connor
Title: Vice President
(SIGNATURES CONTINUED ON NEXT PAGE)
23
SUBSIDIARY GUARANTORS:
NUTRICEUTICAL RESOURCES, INC.
By: /s/ DENNIS J. O'CONNOR
-----------------------
Name: Dennis J. O'Connor
Title: Vice President
PARCARE, LTD.
By: /s/ DENNIS J. O'CONNOR
-----------------------
Name: Dennis J. O'Connor
Title: Vice President
QUAD PHARMACEUTICALS INC.
By: /s/ DENNIS J. O'CONNOR
-----------------------
Name: Dennis J. O'Connor
Title: Vice President
PRX PHARMACEUTICALS, INC.
By: /s/ DENNIS J. O'CONNOR
-----------------------
Name: Dennis J. O'Connor
Title: Vice President
PAR PHARMA GROUP, LTD.
By: /s/ DENNIS J. O'CONNOR
-----------------------
Name: Dennis J. O'Connor
Title: Vice President
(SIGNATURES CONTINUED ON NEXT PAGE)
24
PRI-RESEARCH, INC.
By: /s/ DENNIS J. O'CONNOR
-----------------------
Name: Dennis J. O'Connor
Title: Vice President
25
SCHEDULE D
FEES
1. AMENDMENT FEE. A non-refundable amendment fee of $150,000 is payable by
Borrower to Lender on the Eleventh Amendment Effective Date.
2. UNUSED LINE FEE: For each day after the Closing Date, and through but
including the Termination Date, an amount equal to the Maximum Amount less the
outstanding amount of the Revolving Credit Loan (exclusive of accrued, but
unpaid, interest), for such day, multiplied by the Unused Line Fee Percentage
for such period, the product of which is then divided by 360. The Unused Line
Fee for each month (except for the month in which the Termination Date occurs)
is payable on the first Business Day of the immediately following month,
beginning on the first Business Day of the month following the month in which
the Closing Date occurs; the final monthly installment of the Unused Line Fee is
payable on the Termination Date. Notwithstanding the foregoing, any unpaid
Unused Line Fee is immediately due and payable on the Commitment Maturity Date.
The "Unused Line Fee Percentage" shall be, with respect to any period, 0.25%.
3. COLLATERAL MONITORING FEE: $30,000 for each per annum or part of a per annum,
payable in advance on the Closing Date and on the first Business Day of each
month following the Closing Date and prior to the Commitment Maturity Date.
4. AUDIT FEES: Borrower will reimburse Lender at the rate of $800 per person per
day ("Audit Fees"), plus out of pocket expenses, for the audit reviews, field
examinations and collateral examinations conducted by Lender's own personnel.
Lender agrees that Borrower's obligation for Audit Fees shall not be payable
with respect to more than three field examinations in any calendar year;
PROVIDED, that no limit on Audit Fees will be imposed on Lender for those audits
or examinations conducted at a time when a Default has occurred and is
continuing.
5. EXPENSES: Borrower will pay to Lender on demand all costs incurred in
connection with: (a) the preparation, negotiation, execution, delivery,
performance and enforcement of the Loan Documents; (b) collection (including the
fees and expenses of all advisors, consultants (including environmental and
management consultants) and auditors and the reasonable fees of special legal
counsel retained in connection therewith), including deficiency collections; (c)
the forwarding to Borrower or any other Person on behalf of Borrower by Lender
of the proceeds of any Loan (including by wire transfer); (d) any amendment,
extension, modification or waiver of, or consent with respect to any Loan
Document or advice in connection with the administration of the Revolving Credit
Advances or the rights thereunder; (e) any litigation, contest, dispute, suit,
proceeding or action (whether instituted by or between any combination of
Lender, Borrower or any other Person or Persons), and an appeal or review
thereof, in any way relating to the Collateral, any Loan Document, or any action
taken or any other agreements to be executed or delivered in connection
therewith, whether as a party, witness or otherwise; and (f) any effort (i) to
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monitor the Revolving Credit Advances, (ii) to evaluate, observe or assess
Borrower or any other Credit Party or the affairs of such Person, and (iii) to
verify, protect, evaluate, assess, appraise, collect, sell, liquidate or
otherwise dispose of the Collateral, including with respect to all of the
foregoing: the reasonable fees of attorneys and the fees, costs and expenses of
accountants, environmental advisors, appraisers, investment bankers, management
and other consultants, and paralegals; court costs and expenses; photocopying
and duplicating expenses; court reporter fees, costs and expenses; long distance
telephone charges; air express charges; telegram charges; secretarial overtime
charges; and expenses for travel, lodging and food paid or incurred in
connection with the performance of such legal or other advisory services.
6. LETTER OF CREDIT FEE: For each day for which Lender maintains Letter of
Credit Obligations outstanding, an amount equal to the amount of the Letter of
Credit Obligations outstanding on such day, multiplied by 2%, the product of
which is then divided by 360. The Letter of Credit Fee incurred for each month
is payable at the same time each payment of the Unused Line Fee is due.
Notwithstanding the foregoing, any unpaid Letter of Credit Fee is immediately
due and payable on the Commitment Maturity Date.
7. FUNDING FEE. If Borrower uses any of the proceeds of a Revolving Credit
Advance to fund any portion of the ISP Acquisition as permitted by Section 1.3
of the Agreement, Borrower shall pay Lender a non-refundable funding fee of
$150,000 payable on the date of such Advance.
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SCHEDULE F
FINANCIAL COVENANTS
1. FIXED CHARGE COVERAGE RATIO. Parent and its Subsidiaries on a
consolidated basis shall maintain for each Fiscal Quarter, commencing with the
Fiscal Quarter ending on or about March 31, 2002, a Fixed Charge Coverage Ratio
of not less than 2.00:1.00.
2. MINIMUM TANGIBLE NET WORTH. Parent and its Subsidiaries on a
consolidated basis shall maintain, as at the end of each Fiscal Quarter,
Tangible Net Worth of not less than the amount for such period set forth below:
Fiscal Quarter Ending on or about: Minimum Tangible Net Worth
---------------------------------- --------------------------
December 31, 2001 45,600,000
March 31, 2002 105,000,000
June 30, 2002 115,000,000
September 30, 2002 125,000,000
December 31, 2002 135,000,000
March 31, 2003 145,000,000
June 30, 2003 155,000,000
September 30, 2003 165,000,000
December 31, 2003 175,000,000
March 31, 2004 190,000,000
June 30, 2004 205,000,000
September 30, 2004 220,000,000
December 31, 2004 235,000,000
3. CAPITAL EXPENDITURES. Parent and its Subsidiaries on a
consolidated basis shall not make aggregate Capital Expenditures in excess of
$7,500,000 for the Fiscal Year ending on or about December 31, 2001, $12,000,00
for the Fiscal Year ending on or about December 31, 2002 , $9,000,000 for the
Fiscal Year ending on or about December 31, 2003, and $9,000,000 for the Fiscal
Year ending on or about December 31, 2004 and each Fiscal Year thereafter.
For purposes of this covenant in SCHEDULE F the following terms shall have the
meanings set forth below:
"EBITDA" shall mean, for any period, the Net Income (Loss) of Parent
and its Subsidiaries on a consolidated basis for such period, PLUS interest
expense, income tax expense, amortization expense, depreciation expense and
extraordinary losses and MINUS extraordinary gains, in each case, of Parent and
its Subsidiaries on a consolidated basis for such period determined in
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accordance with GAAP to the extent included in the determination of such Net
Income (Loss).
"FIXED CHARGE COVERAGE RATIO" shall mean, for any period, the ratio
of the following for Parent and its Subsidiaries on a consolidated basis
determined in accordance with GAAP; (a) EBITDA for such period LESS (i) Capital
Expenditures for such period which are not financed through the incurrence of
any Indebtedness (excluding the Revolving Credit Loan) and (ii) taxes to the
extent accrued or otherwise payable with respect to such period to (b) the sum
of (i) interest expense paid or accrued in respect of any Indebtedness during
such period, PLUS (ii) regularly scheduled payments of principal paid or that
were required to be paid on Indebtedness (excluding the Revolving Credit Loan)
during such period.
"NET INCOME (LOSS)" shall mean with respect to any Person and for any
period, the aggregate net income (or loss) after taxes of such Person for such
period, determined in accordance with GAAP.
"TANGIBLE NET WORTH" shall mean, with respect to any Person at any
date, all amounts which, in accordance with GAAP, would be included under
stockholders' equity on a consolidated balance sheet of such Person at such date
LESS the aggregate of all intangibles in conformity with GAAP (including
Intellectual Property, goodwill, organization expenses, treasury stock, all
deferred financing and unamortized debt discount expenses, and all current and
non-current deferred tax benefits).
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EXHIBIT A TO ELEVENTH AMENDMENT
Disclosure Schedules.
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(See attached.)
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