EXHIBIT 10.3
THIRTEENTH AMENDMENT TO PRE-NEGOTIATION AGREEMENT
THIS THIRTEENTH AMENDMENT TO PRE-NEGOTIATION AGREEMENT dated as of July 31, 2003
(this "Thirteenth Amendment"), by and among AKORN, INC., a Louisiana corporation
("Akorn"), AKORN (NEW JERSEY), INC., an Illinois corporation ("Akorn NJ") (Akorn
and Akorn NJ being sometimes referred to herein individually as a "Borrower" and
collectively as the "Borrowers"), and THE NORTHERN TRUST COMPANY, an Illinois
banking corporation (the "Lender");
WITNESSETH:
WHEREAS, the parties heretofore entered into the Pre-Negotiation
Agreement dated as of September 20, 2002, as amended by the First Amendment
dated as of October 18, 2002, the Second Amendment dated as of November 26,
2002, the Third Amendment dated as of December 30, 2002, the Fourth Amendment
dated as of January 16, 2003, the Fifth Amendment dated as of January 31, 2003,
the Sixth Amendment, dated as of February 14, 2003, the Seventh Amendment dated
as of February 28, 2003, the Eighth Amendment dated as of March 14, 2003, the
Ninth Amendment dated as of April 4, 2003, the Tenth Amendment dated as of May
1, 2003, the Eleventh Amendment dated as of May 9, 2003 and the Twelfth
Amendment dated as of June 30, 2003 (the "Prior Agreement");
WHEREAS, the Borrowers have requested an amendment to Section 4.1 of
the Prior Agreement; and
WHEREAS, the Lender has agreed to the Borrowers' request, but only on
the terms set forth herein;
NOW, THEREFORE, in consideration of the premises and the covenants,
agreements and acknowledgments contained herein, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereby agree as follows:
Section 1. Defined Terms. All capitalized terms used and not otherwise
defined in this Thirteenth Amendment shall have the same meanings as in the
Prior Agreement.
Section 2. Amendments.
2.1 Section 1.1 of the Prior Agreement is hereby amended by replacing
the definition of "Existing Events" with the following:
"Existing Events" shall mean the Payment Default and the Events of
Default arising under Section 8.1(e) of the Credit Agreement due to
defaults by the Borrowers under (i) the Promissory Note dated as of
December 20, 2001 made by Akorn in favor of NeoPharm, Inc., as a result of
the Borrowers' failure to remove by June 30, 2003 all sanctions arising as
a result of the 483 M Warning Letter issued by the FDA and (ii) the
Convertible Bridge Loan and Warrant Agreement dated as of July 12, 2001, as
amended,
between Akorn and the Xxxx X. Xxxxxx Trust Dtd 9/20/89, which are described
in the letter dated July 21, 2003 from the Xxxx X. Xxxxxx Trust Dtd 9/20/89
to Akorn.
2.2 Section 4.1 of the Prior Agreement is hereby amended to read as
follows:
4.1 Forbearance Period. Subject to compliance by each Borrower with
each of the terms and conditions of this Agreement, and without waiving the
Existing Events, the Lender hereby agrees to forbear from enforcing its
rights or remedies pursuant to the Loan Documents and applicable law
(including, without limitation, to make a demand for payment as a result of
the Payment Default) as a result of the Existing Events from the Agreement
Closing Date until the earlier to occur of the following (as the case may
be, the "Forbearance Termination Date"): (i) August 22, 2003 and (ii) the
date on which a Borrowing Condition Failure occurs.
Section 3. Pre-Negotiation Agreement and Documents to Remain In
Effect; Confirmation of Obligations; References. Except as expressly modified
and amended by this Thirteenth Amendment, the Prior Agreement shall remain in
full force and effect as originally executed and delivered by the parties. In
order to induce the Lender to enter into this Thirteenth Amendment, the
Borrowers hereby (i) confirm and reaffirm all of their obligations under the
Documents, as modified and amended as described above and under the
Pre-Negotiation Agreement, as modified and amended as described above; (ii)
acknowledge and agree that the Lender, by entering into this Thirteenth
Amendment, does not waive any existing or future default or event of default
under any of the Documents or the Prior Agreement, or any rights, powers or
remedies under any of the Documents or the Pre-Negotiation Agreement; (iii)
acknowledge and agree that the Lender has not heretofore waived any Borrowing
Condition Failure, or any rights or remedies under any of the Documents or the
Prior Agreement; and (iv) acknowledge that they do not have any defense, set-off
or counterclaim to the payment or performance of any of their obligations under
the Documents or the Prior Agreement, as amended hereby. All references to the
Prior Agreement shall henceforth be deemed to refer to the Prior Agreement as
modified by this Thirteenth Amendment and as hereafter modified by any
amendment, modification or supplement thereto.
Section 4. Confirmation of Certifications, Representations and
Warranties. In order to induce the Lender to enter into this Thirteenth
Amendment the Borrowers hereby certify, represent and warrant to the Lender
that, except as otherwise disclosed to the Lender in writing prior to the date
hereof, including in the Pre-Negotiation Agreement and in the Exhibits and
Schedules attached thereto and/or in documents submitted to the Lender prior to
the date hereof (including, but not limited to, any and all financial statements
and reports, budgets, statements of cash flow and governmental reports and
filings) (collectively referred to herein as "Disclosures"), all certifications,
representations and warranties contained in the Documents and in the
Pre-Negotiation Agreement and in all certificates heretofore delivered to the
Lender are true and correct as of the date hereof in all material respects, and,
subject to such Disclosures, all such certifications, representations and
warranties are hereby remade and made to speak as of the date of this Thirteenth
Amendment.
Section 5. RELEASE. EACH BORROWER ON BEHALF OF ITSELF AND ITS
AFFILIATES, SUBSIDIARIES, SUCCESSORS, ASSIGNS, PRINCIPALS,
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SHAREHOLDERS, BENEFICIARIES, OFFICERS, MANAGERS, DIRECTORS, AGENTS,
REPRESENTATIVES, ADVISORS, EMPLOYEES AND ATTORNEYS, HEREBY JOINTLY AND SEVERALLY
RELEASES, WAIVES AND FOREVER DISCHARGES EACH OF THE LENDER AND ITS AFFILIATES,
SUBSIDIARIES, SUCCESSORS, ASSIGNS, PRINCIPALS, SHAREHOLDERS, BENEFICIARIES,
OFFICERS, MANAGERS, DIRECTORS, AGENTS, REPRESENTATIVES, ADVISORS, EMPLOYEES AND
ATTORNEYS OF, FROM, AND WITH RESPECT TO ANY AND ALL MANNER OF ACTIONS, CAUSES OF
ACTIONS, SUITS, DISPUTES, CLAIMS, COUNTERCLAIMS AND/OR LIABILITIES, CROSS
CLAIMS, DEFENSES THAT ARE KNOWN OR UNKNOWN, SUSPECTED OR UNSUSPECTED, PAST OR
PRESENT, ASSERTED OR UNASSERTED, CONTINGENT OR LIQUIDATED, WHETHER OR NOT WELL
FOUNDED IN FACT OR LAW, WHETHER IN CONTRACT, IN TORT OR OTHERWISE, AT LAW OR IN
EQUITY, BASED UPON, RELATING TO OR ARISING OUT OF ANY AND ALL TRANSACTIONS,
RELATIONSHIPS OR DEALINGS WITH OR LOANS MADE TO THE BORROWERS PURSUANT TO THE
LOAN DOCUMENTS AND/OR THE PRIOR AGREEMENT PRIOR TO THE EFFECTIVENESS HEREOF.
Section 6. Entire Agreement. This Thirteenth Amendment sets forth all
of the covenants, promises, agreements, conditions and understandings of the
parties relating to the subject matter of this Thirteenth Amendment, and there
are no covenants, promises, agreements, conditions or understandings, either
oral or written, between them relating to the subject matter of this Thirteenth
Amendment other than as are herein set forth.
Section 7. Successors. This Thirteenth Amendment shall inure to the
benefit of and shall be binding upon the parties and their respective
successors, assigns and legal representatives.
Section 8. Severability. In the event any provision of this Thirteenth
Amendment shall be held invalid or unenforceable by any court of competent
jurisdiction, such holding shall not invalidate or render unenforceable any
other provision hereof.
Section 9. Amendments, Changes and Modifications. This Thirteenth
Amendment may be amended, changed, modified, altered or terminated only by a
written instrument executed by all of the parties hereto:
Section 10. Construction.
(a) The words "hereof," "herein," and "hereunder," and other words of
a similar import refer to this Thirteenth Amendment as a whole and not to the
individual Sections in which such terms are used.
(b) References to Sections and other subdivisions of this Thirteenth
Amendment are to the designated Sections and other subdivisions of this
Thirteenth Amendment as originally executed.
(c) The headings of this Thirteenth Amendment are for convenience only
and shall not define or limit the provisions hereof.
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(d) Where the context so requires, words used in singular shall
include the plural and vice versa, and words of one gender shall include all
other genders.
(e) Each party to this Thirteenth Amendment and legal counsel for each
party have participated in the drafting of this Thirteenth Amendment, and
accordingly the general rule of construction to the effect that any ambiguities
in a contract are to be resolved against the party drafting the contract shall
not be employed in the construction and interpretation of this Thirteenth
Amendment.
Section 11. Execution of Counterparts. This Thirteenth Amendment may
be simultaneously executed in several counterparts, each of which shall be an
original and all of which shall constitute but one and the same instrument.
Section 12. Governing Law. This Thirteenth Amendment shall be governed
by and be construed and enforced in accordance with the laws of the State of
Illinois.
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IN WITNESS WHEREOF, the parties hereto have caused this
Thirteenth Amendment to be executed by their respective officers thereunto duly
authorized, as of the date first written above.
Address for Notices: AKORN, INC.
0000 Xxxxxxxxx Xxxxx
Xxxxxxx Xxxxx, XX 00000
Attention: Chief Financial Officer By /s/ Xxx Xxxxxxx
------------------------
Telecopier No.: (000) 000-0000 Name: Xxx Xxxxxxx
Telephone No.: (000) 000-0000 Title: C.F.O
AKORN (NEW JERSEY), INC.
By /s/ Xxx Xxxxxxx
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Name: Xxx Xxxxxxx
Title: C.F.O.
00 Xxxxx XxXxxxx Xxxxxx THE NORTHERN TRUST COMPANY
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxx Xxxxxxxx
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000 By /s/ Xxxx Xxxxxxxx
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Name: Xxxx Xxxxxxxx
With a copy to Title:
White & Case LLP
000 X. Xxxxxxxx Xxxx., Xxxxx 0000
Xxxxx, XX 00000
Attention: Xxxx X. Xxxxxxxxxx, Esq.
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