EXHIBIT 10.27
SECOND AMENDMENT AND WAIVER
TO LOAN AND SECURITY AGREEMENT
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SECOND AMENDMENT AND WAIVER, dated as of August 22, 1997 (this
"Amendment"), to the Loan and Security Agreement referred to below by and among
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GENERAL ELECTRIC CAPITAL CORPORATION, a New York corporation ("Lender"), PAR
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PHARMACEUTICAL, INC., a New Jersey corporation ("Borrower"), PHARMACEUTICAL
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RESOURCES, INC., a New Jersey corporation ("Parent"), NUTRICEUTICAL RESOURCES,
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INC., a New York Corporation ("NRI"), and PARCARE, LTD., a New York corporation
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("ParCare"). Parent, NRI and ParCare are hereinafter referred to as
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"Guarantors".
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W I T N E S S E T H
- - - - - - - - - -
WHEREAS, Lender, Borrower and Guarantors 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");
WHEREAS, Lender, Borrower and Guarantors have agreed to amend the Loan
Agreement in the manner, and on the terms and conditions, provided for herein;
and
WHEREAS, Lender has agreed to waive and/or consent to certain
violations of 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
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shall have the meanings ascribed to them in the Loan Agreement.
2. Amendments to Loan Agreement.
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A. Recital A of the Loan Agreement is hereby amended by (i)
inserting, immediately after the word "loan" in the first line thereof, the
following: "(including a subfacility for letters of credit)", (ii) inserting
under the caption "Revolving Credit Rate" a new caption to read: "Letter of
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Credit Subfacility: $2,000,000", and (iii) inserting under the caption "Unused
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Line Fee" a new caption to read: "Letter of Credit Fee: 2%".
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B. Section 1.1(a) of the Loan Agreement is hereby amended in
its entirety to read as follows:
"Subject to the terms and conditions of this Agreement, from the
Closing Date and until the Commitment Termination Date (i) Lender
agrees (A) to make available advances (each, a "Revolving Credit
Advance") and (B) to incur Letter of Credit Obligations, in an
aggregate outstanding amount not to exceed the Borrowing
Availability, and (ii) Borrower may at its request from time to
time borrow, repay and reborrow, and may cause Lender to incur
Letter of Credit Obligations, under this Section 1.1."
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C. Section 1.1 of the Loan Agreement is hereby further amended
by (i) deleting the caption in its entirety and inserting in lieu thereof a new
caption entitled "Loans", and (ii) adding a new Section 1.1(e) at the end
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thereof to read as follows:
"(e) Subject to the terms and conditions of this Agreement,
including Schedule G, Borrower shall have the right to request,
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and Lender agrees to incur, the Letter of Credit Obligations for
the account of Borrower in accordance with Schedule G."
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D. Section 1.2 of the Loan Agreement is hereby amended by
deleting the second sentence in its entirety and inserting in lieu thereof a new
sentence to read as follows:
"Upon the Commitment Maturity Date Borrower shall pay to Lender
in full, in cash: (i) all outstanding Revolving Credit Advances
and all interest earned, but unpaid, thereon; (ii) an amount
sufficient to enable Lender to hold cash collateral as specified
in Schedule G; and (iii) all other non-contingent Obligations due
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to or incurred by Lender."
E. Section 1.2(b) of the Loan Agreement is hereby amended by
inserting, immediately following the word "Advances", the phrase "and Letter of
Credit Obligations".
F. Section 1.5(c) of the Loan Agreement is hereby amended by
inserting, immediately after the word "interest" in the first line thereof, the
phrase ", and all calculations of the Letter of Credit Fee,".
G. Section 1.5(d) of the Loan Agreement is hereby amended by
inserting (i) immediately after the word "Rate" in the second line thereof, the
phrase "and the Letter of Credit Fee", and (ii) immediately after the word
"interest" the first place it appears in the third line thereof, the phrase "and
Letter of Credit Fees".
H. Section 2.2 of the Loan Agreement is hereby amended by
inserting, immediately after the word "Advance" in the second line thereof, the
phrase "or the incurrence of any Letter of Credit Obligations".
I. Section 2.2(b) of the Loan Agreement is hereby amended by
inserting, immediately after the word "Advance", the phrase ", or the incurrence
of such Letter of Credit Obligation,".
J. Section 2.2(c) of the Loan Agreement is hereby amended by
inserting, immediately after the word "Advance", the phrase "or the incurrence
of such Letter of Credit Obligation,".
K. Section 2.2 of the Loan Agreement is hereby further amended
by inserting, immediately after the word "Advance" in the last sentence thereof,
the phrase ", and the request by Borrower for the incurrence by Lender of any
Letter of Credit Obligations, as the case may be,".
L. Section 8.2(a) of the Loan Agreement is hereby amended in
its entirety to read as follows:
"(a) If any Default or Event of Default shall have occurred and
be continuing, then Lender may terminate or suspend its
obligation to make further Revolving Credit Advances and to incur
additional Letter of Credit Obligations. In addition, if any
Event of Default shall have occurred and be continuing, Lender
may, without notice, take any one or more of the following
actions: (1) upon notice to Borrower from Lender, increase the
rate of interest applicable to
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Revolving Credit Advances and the Letter of Credit Fee, as
provided in Section 1.5(d), effective as of the date of the
initial Default; (2) declare all or any portion of the
Obligations to be forthwith due and payable, including contingent
liabilities with respect to Letter of Credit Obligations,
whereupon such Obligations shall become and be due and payable;
(3) require that all Letter of Credit Obligations be fully cash
collateralized pursuant to Schedule G; or (4) exercise
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any rights and remedies provided to Lender under the Loan
Documents or at law or equity, including all remedies provided
under the Code; provided, that upon the occurrence of an Event
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of Default specified in Sections 8.1 (e), (f) or (g), the
Obligations shall become immediately due and payable (and any
obligation of Lender to make further Revolving Credit Advances or
incur additional Letter of Credit Obligations, if not previously
terminated, shall immediately be terminated) without declaration,
notice or demand by Lender."
M. Section 8.4 of the Loan Agreement is hereby amended by
inserting, immediately before the phrase "and finally", the phrase "third, to
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cash collateralize any outstanding Letter of Credit Obligations pursuant to
Schedule G;".
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N. The Index of Exhibits and Schedules to the Loan Agreement is
hereby amended by inserting under Schedule F a new line to read "Schedule G -
Letters of Credit".
3. Amendments to Schedule A to the Loan Agreement. Schedule A to
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the Loan Agreement is hereby amended as follows:
A. The following new definitions are hereby added immediately
following the definition of "Lender":
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"Letters of Credit" shall mean any and all commercial or standby
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letters of credit issued at the request and for the account of
Borrower for which Lender has incurred Letter of Credit
Obligations.
"Letter of Credit Fee" shall have the meaning assigned to it in
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Schedule D.
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"Letter of Credit Obligations" shall mean all outstanding
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obligations incurred by Lender at the request of Borrower,
contingent or otherwise, due or not due, in connection with the
guarantee by Lender of Letters of Credit, all as further set
forth in Schedule G. The amount of such Letter of Credit
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Obligations at any time shall equal the maximum amount which may
be payable by Lender thereupon or pursuant thereto at such time.
B. The definition of "Maximum Amount" is hereby amended by
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inserting, immediately after the word "Advances", the phrase "and Letter of
Credit Obligations".
C. The definition of "Obligations" is hereby amended by
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inserting, immediately after the word "Advances" in the ninth line thereof, the
phrase ", Letter of Credit Obligations".
D. The definition of "Prepayment Fee" is hereby amended by
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inserting, immediately after the word "Advances", the phrase "or to incur Letter
of Credit Obligations".
E. The definition of "Revolving Credit Loan" is hereby amended
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in its entirety to read as follows:
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"Revolving Credit Loan" shall mean at any time the sum of (i) the
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aggregate amount of Revolving Credit Advances then outstanding,
plus (ii) the total Letter of Credit Obligations incurred by
Lender and outstanding at such time, plus the amount of earned
and accrued, but unpaid, interest thereon and Letter of Credit
Fees with respect thereto."
F. The definition of "Termination Date" is hereby amended by
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inserting, immediately after the word "cash", the parenthetical "(other than
amounts in respect of Letter of Credit Obligations if any, then outstanding,
provided that Borrower shall have funded such amounts in cash in full into a
cash collateral account as contemplated by Schedule G)".
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4. Amendments to Schedule D to the Loan Agreement. Schedule D to
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the Loan Agreement is hereby amended by inserting (i) in each of the first three
paragraphs in Section 4 thereof, immediately following the word "Advances", the
phrase "or Letter of Credit Obligations" and (ii) a new section at the end
thereof which shall read as follows:
"7. Letter of Credit Fee: For each day for which Lender
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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."
5. New Schedule G. The Loan Agreement is hereby amended by
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inserting, immediately following Schedule F thereto, a new Schedule G in the
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form attached hereto as Annex A.
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6. Waiver/Consent. Lender hereby (A) waives any Event of Default
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under Section 8.1(b) of the Loan Agreement solely arising out of (i) the sale by
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Parent on June 3, 1997 of 1,666 registered ordinary shares, par value NIS 1.00,
and 1,666 registered voting shares, par value NIS 1.00, in each case of Fine-
Tech Ltd., an Israeli private company limited by shares, (ii) the sale/release
by Borrower of distribution rights concerning certain drug delivery products
(which were previously granted to Borrower by Sano Corporation, a Florida
corporation ("Sano"), pursuant to a certain Distribution Agreement, dated as of
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February 24, 1994 among, Sano, Borrower and Parent, as amended by a letter
agreement dated May 8, 1995) in accordance with the terms and conditions of that
certain Amended and Restated Distribution Agreement, dated July 28, 1997, among
Sano, Borrower and Parent (it being understood that all of the proceeds from
such sale have been deposited into the Collection Account), and (iii) the
advance of One Million Nine Hundred Fifty-Three Thousand Three Hundred Ninety-
Three Dollars (U.S.$1,953,393) by Borrower to SANO in connection with such sale,
as evidenced by that certain Promissory Note made by SANO in favor of Borrower,
dated July 28, 1997 ("Note"), and (B) consents to (i) the investment by Parent
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of Two Hundred Fifty Thousand Dollars (U.S.$250,000) in Authorgenics, Inc.
("Authorgenics") on or before August 29, 1997 (it being understood that such
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investment shall be paid to Authorgenics in exchange for 625 shares of Series A
Preferred Stock, $.01 par value, of Authorgenics), (ii) the establishment by
Parent of a Delaware limited partnership, the general partner of which shall be
a newly-formed Delaware corporation and wholly-owned subsidiary of Parent (it
being understood that (a) such limited partnership and corporation are being
formed to consummate the transactions contemplated under that certain Marketing
and Sales Umbrella Agreement ("Marketing Agreement") to be entered into between
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Authorgenics and Parent, (b) notwithstanding anything to the contrary contained
in the Loan Agreement, including Section 5(b) thereof, Parent's aggregate
investment in such entities shall not exceed U.S.$1,000, without the prior
written consent of Lender, (c) no Credit Party shall or shall be required to
provide any collateral to support any liabilities, Indebtedness or other
obligations of such entities, (d) no Credit Party shall or shall be required to
indemnify in any manner such entities or other Person in connection with any
obligation or liability of such entities, and (e) without limiting the
foregoing, such investment shall be non-recourse to Borrower and the other
Credit Parties (other than to the extent of
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Parent's initial investment of U.S.$1,000)), and (iii) the expenditure by Parent
of no more than One Hundred Fifty Thousand Dollars (U.S.$150,000) on the
development of a plan to market/sell the software developed in connection with
the Marketing Agreement. The parties agree that the foregoing consent shall be
null and void if the Marketing Agreement is not executed and delivered
substantially in the form attached hereto as Exhibit A.
7. Representations and Warranties. To induce Lender to enter into
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this Amendment, each Credit Party hereby represents and warrants that:
A. The execution, delivery and performance by each Credit Party
of this Amendment: (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. This Amendment has been duly executed and delivered by or on
behalf of each Credit Party.
C. This Amendment constitutes a legal, valid and binding
obligation of each Credit Party 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).
D. No Default has occurred and is continuing both before and
after giving effect to this Amendment.
E. 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,
(i) 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 Loan Agreement as amended hereby or
any other Loan Document, or the validity or enforceability of this
Amendment, the Loan Agreement as amended hereby or any other Loan Document
or any action taken under this Amendment, the Loan Agreement as amended
hereby or any other Loan Document or (ii which if determined adversely
could have or result in a Material Adverse Effect.
8. No Other Amendments/Waivers. Except as expressly amended herein,
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the Loan Agreement shall be unmodified and shall continue to be in full force
and effect in accordance with its terms. In addition, except as expressly
provided in Section 6 hereof, 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.
9. Outstanding Indebtedness; Waiver of Claims. Each Credit Party
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hereby acknowledges and agrees that as of August 20, 1997 the aggregate
outstanding principal amount of the Revolving Credit Loan is $5,921,548.54 and
that such principal amount is payable pursuant to the Loan Agreement, as amended
hereby, without defense, offset, withholding, counterclaim or deduction of any
kind. 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,
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to any acts or omissions of Lender or any other Indemnified Person on or prior
to the Amendment Effective Date.
10. Expenses. Borrower hereby reconfirms its obligations pursuant to
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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.
11. Effectiveness. This Amendment shall become effective as of
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August 22, 1997 (the "Amendment Effective Date") only upon satisfaction in full
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in the judgment of the Lender of each of the following conditions on or prior to
August 27, 1997:
A. Documents. Lender shall have received two original copies
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of this Amendment duly executed and delivered by Lender and each Credit Party.
B. Payment of Expenses. Borrower shall have paid to Lender all
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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. Representations and Warranties. All representations and
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warranties of or on behalf of each Credit Party in this Amendment and all the
other Loan Documents shall be true and correct in all respects with the same
effect as though such representations and warranties had been made on and as of
the date hereof and on and as of the date that the other conditions precedent in
this Section 11 have been satisfied, except to the extent that any such
representation or warranty expressly relates to an earlier date.
D. Secretary's Certificate. Each Credit Party shall have
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provided Lender with a certificate in form and substance satisfactory to Lender
of their respective Secretary or an Assistant Secretary certifying the
resolutions adopted by their respective Boards of Directors approving this
Amendment and the transactions contemplated herein.
In the event that each of the foregoing conditions precedent has not
been satisfied on or prior to August 27, 1997, this Amendment shall become, upon
written notice by Lender to Borrower, null and void and of no force or effect.
12. Covenants of Borrower. Borrower shall, within ten (10) Business
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Days of the date hereof, grant to Lender a first priority security interest in
the Note and the collateral securing such Note, if any, pursuant to a pledge
agreement, in form and substance satisfactory to Lender. Notwithstanding
anything to the contrary contained in the Loan Agreement or any other Loan
Document, each of the Credit Parties acknowledges and agrees that failure to so
provide Lender with such a first priority security interest shall constitute an
immediate Event of Default.
13. GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED BY, AND
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INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
14. Counterparts. This Amendment may be executed by the parties
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hereto on any number of separate counterparts and all of said counterparts taken
together shall be deemed to constitute one and the same instrument.
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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:
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PAR PHARMACEUTICAL, INC.
By:___________________________
Name:
Title:
Lender:
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GENERAL ELECTRIC CAPITAL
CORPORATION
By:___________________________
Xxxxxx X. Xxxxxxxxx
Its: Duly Authorized Signatory
Parent:
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PHARMACEUTICAL RESOURCES,
INC.
By:___________________________
Name:
Title:
(SIGNATURES CONTINUED ON NEXT PAGE)
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Subsidiary Guarantors:
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NUTRICEUTICAL RESOURCES, INC.
By:_________________________
Name:
Title:
PARCARE, LTD.
By:___________________________
Name:
Title:
8
ANNEX A
TO
SECOND AMENDMENT TO LOAN AND SECURITY AGREEMENT
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SCHEDULE G - LETTERS OF CREDIT
1. Lender agrees, subject to the terms and conditions hereinafter set forth,
to incur Letter of Credit Obligations in respect of the issuance of Letters of
Credit issued on terms acceptable to Lender and supporting obligations of
Borrower incurred in the ordinary course of Borrower's business, in order to
support the payment of Borrower's inventory purchase obligations, insurance
premiums, or utility or other operating expenses and obligations, as Borrower
shall request by written notice to Lender that is received by Lender not less
than five Business Days prior to the requested date of issuance of any such
Letter of Credit; provided, that: (a) the aggregate amount of all Letter of
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Credit Obligations at any one time outstanding (whether or not then due and
payable) shall not exceed the lesser of (i) $2,000,000 or (ii) the Net Borrowing
Availability at such time; (b) no Letter of Credit shall have an expiry date
which is later than one year following the date of issuance thereof; and (c)
Lender shall be under no obligation to incur Letter of Credit Obligations in
respect of any Letter of Credit having an expiry date that is later than
December 30, 1999. The maximum amount payable in respect of each Letter of
Credit requested by Borrower will be guaranteed by Lender in favor of the
issuing bank under terms of a separate agreement between Lender and the issuing
bank, [which agreement (other than as provided for herein) shall not affect
Borrower's rights in respect of the issuing bank set forth in the application
and agreement referred to in the next succeeding sentence]. Borrower will enter
into an application and agreement for such Letter of Credit with the issuing
bank selected by Lender. The bank that issues any Letter of Credit pursuant to
the Agreement shall be determined by Lender in its sole discretion.
2. The notice to be provided to Lender requesting that Lender incur Letter of
Credit Obligations shall be in the form of a Letter of Credit application in the
form customarily employed by the issuing bank, together with a written request
by Borrower and the bank that Lender approve Borrower's application. Upon
receipt of such notice Lender shall establish a reserve against the Borrowing
Availability in the amount of 100% of the face amount of the Letter of Credit
requested; provided, that such reserve shall be reversed if the requested Letter
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of Credit is not issued and to the extent the amount available under it is
reduced. Approval by Lender in the written form agreed upon between Lender and
the issuing bank (a) will authorize the bank to issue the requested Letter of
Credit, and (b) will conclusively establish for purposes of determining Net
Borrowing Availability the existence of the Letter of Credit Obligation as of
the date of such approval; provided, that otherwise such Letter of Credit
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Obligations shall be deemed to be in existence as of the date the applicable
Letter of Credit is issued to its beneficiary.
3. In the event that Lender shall make any payment on or pursuant to any
Letter of Credit Obligation, Borrower shall be unconditionally obligated to
reimburse Lender therefor, and such payment shall then be deemed to constitute a
Revolving Credit Advance. For purposes of computing interest under Section 1.5
of the Agreement, a Revolving Credit Advance made in satisfaction of a Letter of
Credit Obligation shall be deemed to have been made as of the date on which the
issuer or endorser makes the related payment under the underlying Letter of
Credit.
4. In the event that any Letter of Credit Obligations, whether or not then due
or payable, shall for any reason be outstanding on the Commitment Maturity Date,
Borrower will either (a) cause the underlying Letter of Credit to be returned
and canceled and each corresponding Letter of Credit Obligation to be
terminated, or (b) pay to Lender, in immediately available funds, an amount
equal to 105% of the maximum amount then available to be drawn under all Letters
of Credit not so returned and canceled. Such funds shall be held in a cash
collateral account maintained at a bank or financial institution acceptable to
Lender. Such account shall be in the name of Borrower and shall be pledged to,
and subject to the control of, Lender, in a manner satisfactory to Lender.
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5. In the event that Lender shall incur any Letter of Credit Obligations,
Borrower agrees to pay the Letter of Credit Fee to Lender as compensation to
Lender for incurring such Letter of Credit Obligations. In addition, Borrower
shall reimburse Lender for all fees and charges paid by Lender on account of any
such Letters of Credit or Letter of Credit Obligations to the issuing bank.
6. Borrower's Obligations to Lender with respect to any Letter of Credit or
Letter of Credit Obligation shall be evidenced by Lender's records and, in the
absence of manifest error, shall be absolute, unconditional and irrevocable and
shall not be affected, modified or impaired by (i) any lack of validity or
enforceability of the transactions contemplated by or related to such Letter of
Credit or Letter of Credit Obligation; (ii) any amendment or waiver of or
consent to depart from all or any of the terms of the transactions contemplated
by or related to such Letter of Credit or Letter of Credit Obligation (other
than an amendment of the agreement between Borrower and the issuing bank
regarding the Letter of Credit or a waiver by the issuing bank of a right under
such agreement which reduces Lender's obligations to the issuing bank); (iii)
the existence of any claim, set-off, defense or other right which Borrower or
any other Credit Party may have against Lender, the issuer or beneficiary of
such Letter of Credit, or any other Person, whether in connection with the
Agreement or the transactions contemplated therein or such Letter of Credit or
the transactions contemplated thereby or any unrelated transactions; or (iv) the
fact that any draft, affidavit, letter, certificate, invoice, xxxx of lading or
other document presented under or delivered in connection with such Letter of
Credit or any other Letter of Credit proves to have been forged, fraudulent,
invalid or insufficient in any respect or any statement therein proves to have
been untrue or incorrect in any respect.
7. In addition to any other indemnity obligations which Borrower may have to
Lender under the Agreement and without limiting such other indemnification
provisions, Borrower hereby agrees to indemnify Lender from and to hold Lender
harmless against any and all claims, liabilities, losses, costs and expenses
(including, attorneys' fees and expenses) which Lender may (other than as a
result of its own gross negligence or willful misconduct) incur or be subject to
as a consequence, directly or indirectly, of (i) the issuance of or payment of
or failure to pay under any Letter of Credit or Letter of Credit Obligation or
(ii) any suit, investigation or proceeding as to which Lender is or may become a
party as a consequence, directly or indirectly, of the issuance of any Letter of
Credit, the incurring of any Letter of Credit Obligation or any payment of or
failure to pay under any Letter of Credit or Letter of Credit Obligation. The
obligations of Borrower under this paragraph shall survive any termination of
the Agreement.
8. Borrower hereby assumes all risks of the acts, omissions or misuse of each
Letter of Credit by the beneficiary or issuer thereof and, in connection
therewith and absent gross negligence or wilful misconduct on Lender's part,
Lender shall not be responsible (i) for the validity, sufficiency, genuineness
or legal effect of any document submitted in connection with any drawing under
any Letter of Credit even if it should in fact prove in any respect to be
invalid, insufficient, inaccurate, untrue, fraudulent or forged; (ii) for the
validity or sufficiency of any instrument transferring or assigning or
purporting to transfer or assign any Letter of Credit or any rights or benefits
thereunder or any proceeds thereof, in whole or in part, even if it should prove
to be invalid or ineffective for any reason; (iii) for the failure of any issuer
or beneficiary of any Letter of Credit to comply fully with the terms thereof,
including the conditions required in order to effect or pay a drawing
thereunder; (iv) for any errors, omissions, interruptions or delays in
transmission or delivery of any messages, by mail, telecopy, telex or otherwise;
(v) for any loss or delay in the transmission or otherwise of any document or
draft required in order to make a drawing under any Letter of Credit; or (vi)
for any consequences arising from causes beyond the control of Lender.
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EXHIBIT A
TO
SECOND AMENDMENT TO LOAN AND SECURITY AGREEMENT
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