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Exhibit 10.46
[First Amendment to Amended, Restated and Consolidated Bridge Loan Agreement
dated December 7, 1998 between the Company and the lenders listed
on the signature page thereto]
Execution Copy
FIRST AMENDMENT
TO
AMENDED, RESTATED AND CONSOLIDATED
BRIDGE LOAN AGREEMENT
THIS FIRST AMENDMENT TO AMENDED, RESTATED AND CONSOLIDATED BRIDGE LOAN
AGREEMENT (the "First Amendment") dated as of December 7, 1998 by and among
HALSEY DRUG CO., INC., a New York corporation ("Borrower"), GALEN PARTNERS III,
L.P. ("Galen", an "Initial Lender" or a "Lender") a Delaware limited
partnership, GALEN PARTNERS INTERNATIONAL III, L.P. and GALEN EMPLOYEE FUND III,
L.P., each a Delaware limited partnership (each an "Initial Lender", a "Lender",
and collectively, with Galen, the "Galen Entities"), PATRICK COYNE ("Coyne", a
"First Amendment Lender" or a "Lender"), an individual residing at 477 Margo
Lane, Berwyn, Pennsylvania 19312, ALAN SMITH ("Smith", a "First Amendment
Lender" or a "Lender"), an individual residing at 21 Bedlow Avenue, Newport,
Rhode Island 02840, MICHAEL WEISBROT AND SUSAN WEISBROT (collectively, the
"Weisbrots" or jointly and severally, with respect to the Initial Commitment, an
"Initial Lender", with respect to the First Amendment Commitment, a "First
Amendment Lender" or a "Lender"), individuals residing at 1136 Rock Creek Road,
Gladwyne, Pennsylvania 19035, GREG WOOD ("Wood", a "First Amendment Lender" or a
"Lender"), an individual residing at c/o D.R. International, 7474 Figueron
Street, Los Angeles, California 90041, (Coyne, Smith, the Weisbrots and Wood,
each a "First Amendment Lender" and collectively, the "First Amendment Lenders"
and the First Amendment Lenders, together with the Galen Entities and the
Weisbrots, each a "Lender", and collectively, the "Lenders"), and GALEN, as
agent for the Lenders (in such capacity, the "Agent") to the Amended, Restated
and Consolidated Bridge Loan Agreement dated as of December 2, 1998 by and among
Borrower, the Galen Entities and the Weisbrots
(the Weisbrots and the Galen Entities, each an "Initial Lender", a "Lender" and
collectively, the "Initial Lenders", as amended through the date hereof, the
"Consolidated Bridge Loan Agreement"). Terms that are capitalized in this First
Amendment and not otherwise defined shall have the meaning ascribed to such
terms in the Consolidated Bridge Loan Agreement.
WITNESSETH:
WHEREAS, the Borrower and the Initial Lenders have entered into the
Consolidated Bridge Loan Agreement;
WHEREAS, Borrower has requested that certain Lenders consider making an
additional $283,000 bridge loan ("First Amendment Bridge Loan") available to
Borrower, the proceeds of which will be used by Borrower solely for Borrower's
working capital purposes and other general
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business purposes, in each case pursuant to the Consolidated Bridge Loan
Agreement and in accordance with the terms thereof and hereof.
WHEREAS, Borrower and the Lenders have agreed to add Smith, Wood and Coyne
as a party to the Consolidated Bridge Loan Agreement effective from the First
Amendment Closing Date;
NOW, THEREFORE, in consideration of the mutual promises contained herein,
and for other good and valuable consideration, the recipient and sufficiency of
which are hereby acknowledged, the parties hereto hereby agree as follows:
SECTION 1.
AMENDMENTS
A. Amendment of Section 1. Definitions.
1. Paragraph 1.1 is amended by:
(i) adding thereto, in the appropriate alphabetical order, each of
the terms "Agency Agreements", "Agent", "Consents and Waivers", "Consolidated
Bridge Loan", "First Amendment", "First Amendment Agency Agreement", "First
Amendment Bridge Loan", "First Amendment Closing Date", "First Amendment Closing
Fees", "First Amendment Commitment", "First Amendment Consent and Waiver",
"First Amendment Conversion Price", "First Amendment Lenders", "First Amendment
Loan", "First Amendment Notes", "First Amendment Warrants", "Initial Agency
Agreement", "Initial Closing Date", "Initial Commitment", "Initial Consent and
Waiver", "Initial Consolidated Bridge Loan", "Initial Consolidated Bridge Loan
Agreement", "Initial Conversion Price", "Initial Lenders", "Initial Notes",
"Initial Warrants", "Note 1", "Note 2", "Note 3", "Note 4", "Note 5", "Note 6",
"Note 7", "Note 8" and the definitions thereof, as hereinafter provided, and
(ii) deleting the definitions of the terms "Agreement", "Bridge Loan
Documents", "Lenders", "Notes", "Obligations", "Warrants" and substituting the
definitions set forth below in lieu thereof:
"Agency Agreements" mean the Initial Agency Agreement and the First
Amendment Agency Agreement.
"Agent" means Galen acting as agent to the Lenders pursuant to the
Initial Agency Agreement and the First Amendment Agency Agreement.
"Agreement" means the Initial Consolidated Bridge Loan Agreement, as
amended by the First Amendment, as the same may hereafter be further amended,
extended, modified, restated or supplemented from time to time.
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"Bridge Loan Documents" means, collectively, this Agreement, the
Notes, the Warrants, the Agency Agreements, the Consents and Waivers, each of
the Collateral Documents and all other documents, agreements, instruments,
opinions and certificates now or hereafter executed and delivered in connection
herewith or therewith, as modified, amended, extended, restated or supplemented
from time to time.
"Consents and Waivers" mean the Initial Consent and Waiver and the
First Amendment Consent and Waiver.
"Consolidated Bridge Loan" has the meaning set forth in Section
I(B)(1) hereto.
"First Amendment" means the First Amendment to the Initial
Consolidated Bridge Loan Agreement dated as of December 7, 1998 by and among
Borrower, the Lenders and Agent, as the same may hereafter be further amended,
extended, modified, restated or supplemented from time to time.
"First Amendment Agency Agreement" means the Agency Agreement by and
among the First Amendment Lenders dated the date hereof and entered into
simultaneously herewith, substantially in the Form of Exhibit E attached hereto.
"First Amendment Bridge Loan" has the meaning set forth in the
Recitals to this Agreement.
"First Amendment Closing Date" means the date upon which the last of
the events, the fulfillment of each of which is condition precedent to the
effectiveness of this First Amendment, as set forth in Section II of this First
Amendment, shall have occurred.
"First Amendment Closing Fees" means the expenses as set forth in
Section II(4) of this First Amendment.
"First Amendment Commitment" means the commitment of each First
Amendment Lender to fund the dollar amount of its share of the First Amendment
Loan in the amount set forth opposite such Lender's name on Exhibit A, a copy of
which is attached hereto and made a part hereof.
"First Amendment Consent and Waiver" means a consent and waiver of
lien, indebtedness and registration rights restrictions executed by the Majority
Holders in connection with this First Amendment dated the date hereof and
executed simultaneously herewith, substantially in the form of Exhibit D
attached hereto.
"First Amendment Conversion Price" means $1.3133.
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"First Amendment Lenders" has the meaning set forth in the Section
entitled "Pari Passu and Pro Rata Relationship of the Initial Lenders to the
First Amendment Lenders" (Section I(B)(4) hereof).
"First Amendment Notes" mean Note 5, Note 6, Note 7 and Note 8.
"First Amendment Warrants" means the warrants to purchase 28,300
shares, in the aggregate, of the Common Stock, dated the date hereof and issued
by Borrower to each of the First Amendment Lenders, substantially in the form of
Exhibit C attached hereto.
"Initial Agency Agreement" means a certain Agency Agreement by and
among the Agent and each of the Initial Lenders dated as of December 2, 1998
entered into in connection with the Initial Consolidated Bridge Loan Agreement.
"Initial Closing Date" means the Closing Date.
"Initial Commitment" means the Total Commitment of each Initial
Lender.
"Initial Consent and Waiver" means a certain consent and waiver of
lien, indebtedness and registration rights restrictions executed by the Majority
Holders in connection with the Initial Consolidated Bridge Loan Agreement dated
as of December 2, 1998.
"Initial Consolidated Bridge Loan" has the meaning set forth in
Section I(B)1 hereof.
"Initial Consolidated Bridge Loan Agreement" means the agreement
dated as of December 2, 1998 by and among Borrower, the Initial Lenders and the
Agent.
"Initial Conversion Price" means $1.3688.
"Initial Lenders" has the meaning set forth in the Section entitled
"Pari Passu and Pro Rata Relationship of the Initial Lenders to the First
Amendment Lenders" (Section I(B)(4) hereof).
"Initial Notes" means Note 1, Note 2, Note 3 and Note 4.
"Initial Warrants" mean the warrants dated December 2, 1998 and
issued to the Initial Lenders to purchase 689,722 shares, in the aggregate, of
the Common Stock.
"Lenders" mean the Initial Lenders and the First Amendment Lenders.
"Note 1" means a certain promissory note dated as of December 2,
1998 payable by Borrower to the order of Galen Partners III, L.P. in the amount
of $7,052,621.
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"Note 2" means a certain promissory note dated as of December 2,
1998 payable by Borrower to the order of Galen Partners International III, L.P.
in the amount of $638,389.
"Note 3" means a certain promissory note dated as of December 2,
1998 payable by Borrower to the order of Galen Employee Fund III, L.P. in the
amount of $28,880.
"Note 4" means a certain promissory note dated as of December 2,
1998 payable by Borrower to the order of Michael Weisbrot and Susan Weisbrot in
the amount of $101,222.
"Note 5" means a promissory note dated the date hereof payable by
Borrower to the order of Alan Smith in the amount of $8,000, substantially in
the form of Exhibit B attached hereto.
"Note 6" means a promissory note dated the date hereof payable by
Borrower to the order of Michael Weisbrot and Susan Weisbrot in the amount of
$150,000, substantially in the form of Exhibit B.
"Note 7" means a promissory note dated the date hereof payable by
Borrower to the order of Greg Wood in the amount of $100,000, substantially in
the form of Exhibit B.
"Note 8" means a promissory note dated the date hereof payable by
Borrower to the order of Patrick Coyne in the amount of $25,000, substantially
in the form of Exhibit B.
"Notes" means Note 1, Note 2, Note 3, Note 4, Note 5, Note 6, Note
7, and Note 8, or any one of the Notes ("Note").
"Obligations" means the unpaid principal and interest hereunder,
expenses and all other obligations and liabilities of Borrower to the Lenders
under this Agreement, the Notes or any other Bridge Loan Document, and includes,
but is not limited to, any and all indebtedness of Borrower to the Lenders,
whether now existing or hereafter incurred, of every kind and character, direct
or indirect, and whether such indebtedness is from time to time reduced and
thereafter increased, or entirely extinguished and thereafter reincurred,
including, without limitation: (a) indebtedness not yet outstanding, but
contracted for, or with respect to which any other commitment by the Lenders
exists; (b) all interest provided in any instrument, document, or agreement
(including this Agreement) which accrues on any indebtedness until payment of
such indebtedness in full; and (c) any moneys payable as hereinafter provided.
"Warrants" mean the Initial Warrants and the First Amendment
Warrants.
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B. Amendment of Section 2. Terms of the Consolidated Bridge Loan.
1. Section 2.2 of the Agreement is amended in its entirety to read as
follows:
"2.2 Initial Consolidated Bridge Loan; Consolidated Bridge Loan.
(a) Initial Consolidated Bridge Loan. Borrower warrants,
represents and confirms that, as of the Initial Closing Date,
(i) the aggregate outstanding principal balance of the
Original Bridge Loan equals $4,500,000, (ii) the aggregate
accrued interest on such principal balance equals $71,111 and
(iii) the aggregate outstanding principal balance of the
Additional Bridge Loan equals $3,250,000. Borrower and Lenders
agree that effective on the Initial Closing Date, upon the
consolidation of the outstanding principal balances of the
Original Bridge Loan and the Additional Bridge Loan, and the
addition to principal of the accrued interest on the Original
Bridge Loan, Lenders shall be deemed to have made a single
loan to Borrower in the aggregate principal amount of
$7,821,111 (the "Initial Consolidated Bridge Loan").
(b) Consolidated Bridge Loan. Borrower warrants,
represents and confirms that, as of the First Amendment
Closing Date (i) the aggregate outstanding principal balance
of the Original Bridge Loan equals $4,500,000, (ii) the
aggregate accrued interest on such principal balance equals
$71,111, (iii) the aggregate outstanding principal balance of
the Additional Bridge Loan equals $3,250,000 and (iv) the
aggregate outstanding principal balance of the First Amendment
Loan equals $283,000. Borrower and the Lenders agree that
effective on the First Amendment Closing Date, the total
amount of funds advanced by the Lenders equals, in the
aggregate principal amount $8,104,111 (the "Consolidated
Bridge Loan")."
2. Section 2.3(a) of the Agreement is amended in its entirety to read as
follows:
"2.3 Amended, Restated and Consolidated Notes.
(a) The Amount. The Initial Consolidated Bridge Loan is
evidenced by the Initial Notes and the First Amendment Loan is
evidenced by the First Amendment Notes (each of the Initial
Notes and the First Amendment Notes, a " Note" and
collectively, the "Notes")."
3. Section 2.4 of the Agreement is amended in its entirety to read as
follows:
"2.4 Warrants. Subject to the terms of Initial Consolidated Bridge
Loan Agreement and the terms of the Initial Warrants, Borrower has
issued Initial Warrants to purchase in the aggregate, 689,722 shares
of the Common Stock, initially, at a price per share equal to
Initial Conversion Price, in the amounts set
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forth opposite each Initial Lender's name on Exhibit A. Subject to
the terms of this First Amendment and the terms of the First
Amendment Warrants substantially in the form of Exhibit C, Borrower
will issue Warrants to purchase in the aggregate, 28,300 shares of
the Common Stock, initially, at a price per share equal to the First
Amendment Conversion Price. The First Amendment Warrants shall be
issued to each of the First Amendment Lenders in the amounts set
forth opposite each First Amendment Lender's name on Exhibit A. For
purposes of this Agreement, the term "Warrant Shares", shall mean
the shares of Common Stock that may be issued from time to time
pursuant to the exercise of the Warrants."
4. The following Section 2.10 is to be added after Section 2.9 of
Agreement:
"2.10.Pari Passu and Pro Rata Relationship of the Initial Lenders to
the First Amendment Lenders. Until such time as the unpaid principal
balance of the Initial Notes, in the original aggregate principal
amount of $7,821,111 and the First Amendment Notes, in the original
aggregate principal amount of $283,000, shall have been paid in
full, or in a manner otherwise satisfactory to the Agent, (i) the
Initial Lenders' Lien on the Borrower's Collateral with respect to
the Obligations of Borrower to the Initial Lenders under this
Agreement, any other Bridge Loan Documents and the Initial Notes, on
the one hand, and the Obligations of Borrower to the First Amendment
Lenders under this Agreement, any other Bridge Loan Documents and
the First Amendment Notes, on the other hand, shall rank pari passu
with one another, and (ii) each of the Initial Lenders and the First
Amendment Lenders shall share pro rata in the proceeds of the
Borrower's Collateral in accordance with a fraction, the denominator
of which shall equal the unpaid principal balance of the
Consolidated Bridge Loan, and the numerator of which shall equal, in
the case of the Initial Lenders, the unpaid principal balance of the
Initial Notes, and in the case of the First Amendment Lenders, the
unpaid principal balance of the First Amendment Notes, all such
amounts to be calculated as of (A) the Maturity Date, or (B) the
date each Note becomes due and payable, whether by acceleration or
otherwise, whichever date is sooner to occur."
SECTION II.
CONDITIONS PRECEDENT.
This First Amendment shall become effective on the date when all of the
following conditions, the fulfillment of each of which is a condition precedent
to the effectiveness of this First Amendment, shall have occurred or shall have
been waived in writing by Borrower and the Agent:
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1. First Amendment Closing Documents. Each Lender shall have received a
duly executed original of, as is appropriate:
(i) this First Amendment;
(ii) its Note, if applicable;
(iii) its Warrant, if applicable;
(iv) the First Amendment Agency Agreement; and
(v) the First Amendment Waiver and Consent;
each conforming to the requirements hereof and executed as of the date of this
First Amendment by a duly authorized representative of Borrower, the Lenders and
the Agent, as the case may be.
2. Legal Opinion of Counsel to Borrower. The Agent shall have received an
opinion, dated as of the First Amendment Closing Date, of St. John & Wayne,
L.L.C., counsel to Borrower, which opinion shall be reasonably satisfactory to
the Agent and its counsel.
3. Officer's Certificate. Borrower shall have received an Officer's
Certificate from Borrower dated as of the First Amendment Closing Date,
certifying as to the (i) Certificate of Incorporation of Borrower and all
amendments thereto, (ii) accuracy and completeness of all By-Laws attached
thereto, (iii) validity of the updated Certificates of Good Standing from the
Secretaries of State of New York and Illinois with respect to Borrower, (iv)
validity of the resolutions of the Board of Directors of Borrower approving the
transactions relating to this First Amendment and each of the Bridge Loan
Document to which it or they are a party and any other certificate or other
document to be delivered pursuant thereto, together with evidence of the
incumbency of such officer signing the same.
4. First Amendment Closing Fees. All expenses outstanding as of the date
of this Agreement, including legal fees, relating to the Initial Consolidated
Bridge Loan Agreement and the First Amendment and any and all documents relating
thereto shall have been paid on or prior to the First Amendment Closing Date.
5. Updated Certificates of Good Standing. The Agent shall have received
updated Certificates of Good Standing with respect to Borrower from the
Secretaries of the State of New York and of Illinois.
6. Representations and Warranties. Upon the effectiveness of this First
Amendment, all representations and warranties set forth in the Initial
Consolidated Bridge Loan Agreement (except for such inducing representations and
warranties that were only required to be true and correct as of a prior date),
shall be true and correct in all material respects on and as of the effective
date hereof, and no Default or Event of Default shall have occurred and be
continuing and Agent shall have received a certificate of the President of
Borrower to the same effect.
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7. Material Adverse Effect. No event or development shall have occurred
since the date of delivery to the Agent of Borrower's most recent Form 10-Q and
most recent financial statements which event or development has had or is
reasonably likely to have a Material Adverse Effect.
8. President's Certificate. The Agent shall have received a certificate
from the President of Borrower, as to the satisfaction of paragraphs 6, 7 and 10
of this Section II.
9. Additional Documents. All corporate and legal proceedings and all
documents and instruments executed or delivered in connection with this First
Amendment shall be satisfactory in form and substance to the Lenders, the Agent
and their respective counsel, and the Lenders, the Agent and their respective
counsel shall have received all information and copies of all documents which
the Lenders, the Agent and their respective counsel may have requested in
connection herewith and the matters contemplated hereunder, such documents, when
requested by them, to be certified by the appropriate authorities.
10. Litigation. There shall be no action, suit or proceeding pending or
threatened against Borrower before any court (including bankruptcy court),
arbitrator or governmental or administrative body or agency that challenges or
relates to the performance of this First Amendment or any other transactions
contemplated herein.
11. Consents and Filings. Subject to (i) the receipt of shareholder
approval to amend Borrower's Certificate of Incorporation to increase the
authorized shares of Common Stock and the filing of such amendment with the
Office of the Secretary of State of the State of New York, (ii) the receipt of
the approval of the American Stock Exchange to the extent required under Section
713 of the American Company Stock Exchange Guide, to authorize the issuance of
the Conversion Shares and the Warrant Shares in the event of a dilution
adjustment to the Notes or the Warrants results in issuances of the Conversion
Shares or the Warrant Shares at less than fair market value and (iii) the
approval required under the Hart-Scott-Rodin Antitrust Improvements Act of 1976,
as amended (the "HSR Act"); and except as otherwise obtained, no consent of any
Person (including, without limitation, shareholders or creditors of such
Borrower, as the case may be) other than the Majority Holders, the Agent shall
have received such further agreements, consents, certificates, instruments and
documents as may be necessary or proper in the reasonable opinion of the Agent
and its counsel to carry out the provisions and purposes of this First
Amendment.
12. No Liens. From the date of effectiveness of the Fourth Amendment to
the date of effectiveness of this First Amendment, no Liens shall have arisen or
been recorded against the Collateral.
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SECTION III.
REPRESENTATIONS AND WARRANTIES
Borrower hereby represents and warrants (which representations and warranties
shall survive the execution and delivery hereof) to each Lender and the Agent
that:
1. Authority. Borrower has the corporate power, authority and legal right
to execute, deliver and perform this First Amendment, and the instruments,
agreements, documents and transactions contemplated hereby, and has taken all
actions necessary to authorize the execution, delivery and performance of this
First Amendment, and the instruments, agreements, documents and transactions
contemplated hereby.
2. Consents and Filings. Subject to (i) the receipt of shareholder
approval to amend Borrower's Certificate of Incorporation to increase the
authorized shares of Common Stock and the filing of such amendment with the
Office of the Secretary of State of the State of New York, (ii) the receipt of
the approval of the American Stock Exchange to the extent required under Section
713 of the American Company Stock Exchange Guide, to authorize the issuance of
the Conversion Shares and the Warrant Shares in the event of a dilution
adjustment to the Notes or the Warrants results in issuances of the Conversion
Shares or the Warrant Shares at less than fair market value and (iii) the
approval required under the Hart-Scott-Rodin Antitrust Improvements Act of 1976,
as amended (the "HSR Act"); and except as otherwise obtained, no consent of any
Person (including, without limitation, shareholders or creditors of such
Borrower, as the case may be) other than the Majority Holders, no consent,
permit, approval or authorization of, exemption by, notice or report to, or
registration, filing or declaration with, any governmental authority is required
in connection with the execution, delivery, performance, validity or
enforceability of this First Amendment, and the instruments, agreements,
documents and transactions contemplated hereby.
3. Due Execution. This First Amendment has been duly executed and
delivered on behalf of Borrower, and constitutes the legal, valid and binding
obligation of Borrower, enforceable in accordance with its terms.
4. No Default. Borrower is not in default in any material respect under
any indenture, mortgage, deed of trust, agreement or other instrument to which
it is a party or by which it may be bound. Except as otherwise described on
Borrower's Form 10-Q for the quarter ended September 30, 1998, Borrower knows of
no dispute regarding any such indenture, contract, lease, agreement, instrument
or other commitment. Neither the execution and delivery of this First Amendment
nor any Bridge Loan Document, nor the performance of the transactions herein or
therein contemplated, nor compliance with the provisions hereof or thereof will
(i) violate any law or regulation, or (ii) result in or cause a violation by
such Borrower of any order or decree of any court or government instrumentality,
or (iii) conflict with, or result in the breach of, or constitute a default
under, any indenture, mortgage, deed of trust, agreement or other instrument to
which such Borrower is a party or by which it may be bound, or (iv) result in
the creation or imposition of any lien, charge, or encumbrance upon any of the
property of such Borrower, except in favor of the Agent, on behalf of
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the Lenders, to secure the Obligations, or (v) violate any provision of the
Certificate of Incorporation, By-Laws, or any capital stock provisions of such
Borrower, except as otherwise provided in Section III(2) above.
5. No Event of Default. No Event of Default has occurred and is
continuing.
6. Recitals. The recitals contained in this First Amendment are true and
correct in all respects.
SECTION IV.
GENERAL PROVISIONS
1. Except as herein expressly amended, the Consolidated Bridge Loan
Agreement and all other agreements, documents, instruments and certificates
executed in connection therewith, are ratified and confirmed in all respects and
shall remain in full force and effect in accordance with their respective terms.
2. All references in the Bridge Loan Documents to the Consolidated Bridge
Loan Agreement shall mean the Consolidated Bridge Loan Agreement as amended as
of the effective date hereof, and as amended hereby and as hereafter amended,
extended, modified, restated or supplemented from time to time. From and after
the date hereof, all references in the Consolidated Bridge Loan Agreement to
"this Agreement," "hereof," "herein," or similar terms, shall mean and refer to
the Consolidated Bridge Loan Agreement as amended by this First Amendment.
3. The headings preceding the text of the sections and subsections of this
First Amendment are used solely for convenience of reference and shall not
affect the meaning, construction, or effect of the Agreement.
4. The validity and effect of this First Amendment shall be determined by
reference to the substantive laws of the State of New York without regard to
that State's principles of conflicts of laws, except to the extent that such
other laws may govern the grant and perfection of a security interest in the
Collateral.
5. This Amendment may be executed in any number of counterparts, each of
which shall be an original and all of which together shall constitute but one
and the same First Amendment.
[THE REMAINDER OF THIS PAGE HAS BEEN LEFT INTENTIONALLY BLANK]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed in the state of New York, and delivered by their proper and duly
authorized officers or managers as of the date set forth above.
Borrower: HALSEY DRUG CO., INC.
By:/s/
--------------------------------------------
Name: Michael Reicher
Title: Chief Executive Officer
The Lenders: GALEN PARTNERS III, L.P.
By: Claudius, L.L.C., General Partner
By:/s/
--------------------------------------------
Name: Bruce F. Wesson
Title: Managing Member
GALEN PARTNERS INTERNATIONAL III, L.P.
By: Claudius, L.L.C., General Partner
By:/s/
--------------------------------------------
Name: Bruce F. Wesson
Title: Managing Member
GALEN EMPLOYEE FUND III, L.P.
By: Wesson Enterprises, Inc.
By:/s/
--------------------------------------------
Name: Bruce F. Wesson
Title: President
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/s/
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Alan Smith
/s/
-----------------------------------------------
Michael Weisbrot
/s/
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Susan Weisbrot
/s/
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Greg Wood
/s/
-----------------------------------------------
Patrick Coyne
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