EXHIBIT 10.20
SECOND AMENDMENT TO
SECOND AMENDED AND RESTATED LOAN AGREEMENT
This Second Amendment to Second Amended and Restated Loan Agreement,
dated as of February 25, 2002 (this "Agreement"), is by and among aaiPHARMA
INC., a Delaware corporation (the "Borrower"), each of the subsidiaries of the
Borrower identified on the signature pages hereto, the financial institutions
identified on the signature pages hereto and BANK OF AMERICA, N.A., as agent for
the Lenders (in such capacity, the "Agent"). Except as otherwise defined in this
Agreement, terms defined in the Existing Loan Agreement referred to below (as
amended by this Agreement) are used herein as defined therein.
RECITALS:
A. Pursuant to that certain Second Amended and Restated Loan Agreement
dated as of August 17, 2001, as amended by that certain First Amendment to
Second Amended and Restated Loan Agreement dated as of December 13, 2001 (the
"Existing Loan Agreement"), the Lenders have extended a revolving credit
facility to the Borrower in the principal amount of up to $25,000,000 and have
made term loans to the Borrower in the aggregate principal amount of
$85,000,000.
B. The Borrower has requested that the Lenders amend the Existing Loan
Agreement to, among other things, extend the Maturity Date.
C. The Lenders are willing to extend the Maturity Date and to make
certain other modifications to the Existing Loan Agreement based upon and
subject to the terms and conditions specified in this Agreement.
NOW, THEREFORE, based upon the foregoing, and for good and valuable
consideration, the sufficiency and receipt of which is hereby acknowledged, the
parties hereby agree as follows:
PART I
DEFINITIONS
SUBPART 1.1. Certain Definitions. Terms defined in the introductory
paragraph and recitals of this Agreement shall have the meanings ascribed to
them therein. Unless otherwise defined herein or the context otherwise requires,
the following terms used in this Agreement have the following meanings (such
meanings to be equally applicable to the singular and plural forms thereof):
"Amended Loan Agreement" means the Existing Loan Agreement as
amended hereby.
"Effective Date" shall have the meaning ascribed to such term
in Subpart 3.1.
PART II
AMENDMENTS TO EXISTING LOAN AGREEMENT
Subject to satisfaction of the conditions specified in Part III of this
Agreement, the Existing Loan Agreement is hereby amended in accordance with this
Part II. Except as so amended, the Existing Loan Agreement, the Notes and the
other Loan Documents shall continue in full force and effect.
SUBPART 2.1. Amended Definitions. The definition for the following
term in Section 1.1 of the Existing Loan Agreement is amended and restated in
its entirety as follows:
"Maturity Date" means, subject to Section 12.3, January 15,
2003.
SUBPART 2.2. Fees. A new Section 3.5(d) is hereby added to the
Existing Loan Agreement to read as follows:
(d) Additional Fees. Unless the Extension Option has been
exercised pursuant to Section 12.2 hereof, (i) on September 30, 2002, the
Borrower promises to pay to the Agent for the pro rata account of each Lender an
aggregate fee of 1.00% on the sum of the outstanding Term Loans as of such date
plus the Revolving Committed Amount as of such date (excluding any portion of
the Term Loan paid down on such date and any portion of the Revolving Committed
Amount terminated on such date) and (ii) on December 31, 2002, the Borrower
promises to pay to the Agent for the pro rata account of each Lender an
aggregate fee of 1.00% on the sum of the outstanding Term Loans as of such date
plus the Revolving Committed Amount as of such date (excluding any portion of
the Term Loan paid down on such date and any portion of the Revolving Committed
Amount terminated on such date).
SUBPART 2.3. Financial Covenants. Section 7.10(e) of the Existing Loan
Agreement is amended in its entirety to read as follows:
(e) Minimum Consolidated EBITDA. The sum of (i) Consolidated
EBITDA minus (ii) scheduled rental payments under the TROL for the
period from July 1, 2001 through the end of the fiscal quarter
indicated below shall be equal to or greater than the amounts set forth
below:
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Minimum Consolidated EBITDA
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If the Brethine Supplier Consent If the Brethine Supplier
Quarter Ending has not been obtained Consent has been obtained
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September 30, 2001 $ 2,000,000 N/A
December 31, 2001 $ 7,500,000 $ 7,500,000
March 31, 2002 $14,000,000 $15,800,000
June 30, 2002 $20,000,000 $23,500,000
September 30, 2002 $26,000,000 $31,500,000
December 31, 2002 $33,000,000 $42,000,000
SUBPART 2.4. Amendments to Schedules. The following schedules to the
Existing Loan Agreement are deleted in their entirety and replaced with the
corresponding substitute schedules attached to this Agreement:
Schedule 6.17 Intellectual Property
Schedule 6.27 Affiliate Transactions
PART III
CONDITIONS TO EFFECTIVENESS
SUBPART 3.1. Effective Date. This Agreement shall be and become
effective as of the date hereof (the "Effective Date") when all of the
conditions set forth in this Subpart 3.1 shall have been satisfied.
3.1.1. Execution of Agreement. The Agent shall have received
original duly executed counterparts of this Agreement from the
Borrowers, the Guarantors and the Lenders.
3.1.2. Resolutions. The Agent shall have received a certified
copy of the resolutions of the Board of Directors of the Borrower and
each other Credit Party evidencing its approval of this Agreement.
3.1.3. Other Corporate Documents. The Agent shall have
received all documents it may reasonably request relating to the
existence and good standing of the Credit Parties and to the
authorization, execution and delivery of this Agreement and the other
Loan Documents and other matters relevant hereto, including current
incumbency information for the officers of the Credit Parties, all in
form and substance satisfactory to the Agent and its counsel in their
reasonable discretion.
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3.1.4. Legal Opinions. The Agent shall have received
assurances that it will receive on the Effective Date or as soon as
practicable thereafter, in form and substance reasonably satisfactory
to the Agent, (i) a legal opinion of Xxxxxxxx Xxxxxxxx & Xxxxxx,
outside counsel for the Credit Parties and (ii) a legal opinion of
in-house counsel for the Credit Parties with respect to various
corporate and organizational matters for each Credit Party.
3.1.5. Officer's Certificates. The Agent shall have received a
certificate or certificates executed by an Executive Officer of the
Borrower as of the Effective Date, in form and substance satisfactory
to the Agent, stating that (A) each Credit Party is in compliance with
all existing material financial obligations, (B) all material
governmental, shareholder and third party consents and approvals, if
any, with respect to the Loan Documents and the transactions
contemplated thereby have been obtained, (C) no action, suit,
investigation or proceeding is pending or threatened in any court or
before any arbitrator or governmental instrumentality that purports to
affect any Credit Party or any transaction contemplated by the Loan
Documents, if such action, suit, investigation or proceeding would
reasonably be expected to have a Material Adverse Effect, (D) no
Default or Event of Default exists and all representations and
warranties contained herein, in the Amended Loan Agreement and in the
other Loan Documents are true and correct in all material respects and
(E) all financial projections concerning the Borrower and its
Subsidiaries that have been or are hereafter made available to the
Agent or the Lenders by the Borrower or any of the Borrower's
authorized representatives have been or will be prepared in good faith
based upon assumptions the Borrower believes to be reasonable.
3.1.6. Solvency. The Agent shall have received a certificate
executed by an Executive Officer of the Borrower as of the Effective
Date, in form and substance satisfactory to the Agent, regarding the
Solvency of each of the Credit Parties on a consolidated basis.
3.1.7. Fees and Expenses, Etc. Payment by the Credit Parties
to the Arranger, BAMC and the Agent of all fees and expenses which are
due and payable on the Effective Date, if any.
3.1.8. Litigation, Etc. There shall not exist any pending or
threatened action, suit, investigation or proceeding, which, if
adversely determined, could materially and adversely affect the
Borrower or its subsidiaries, any transaction contemplated hereby or
the ability of the Borrower and its subsidiaries or any other Guarantor
to perform its obligations under the Amended Loan Agreement or the
other Loan Documents or the ability of the Lenders to exercise their
rights thereunder.
3.1.9. No Material Adverse Change. There shall not have
occurred a material adverse change since December 31, 2000 in the
business, assets, liabilities (actual or contingent), operations,
condition (financial or otherwise) or prospects of the Borrower, in the
case of the Borrower together with its subsidiaries taken as a whole,
or in the facts and information regarding such entities and assets as
represented to date.
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3.1.10. Other. Receipt by the Lenders of such other documents,
instruments, agreements or information as reasonably requested by any
Lender, including, but not limited to, information regarding
litigation, tax, accounting, labor, insurance, pension liabilities
(actual or contingent), real estate leases, material contracts, debt
agreements, property ownership and contingent liabilities of the
Consolidated Parties.
PART IV
MISCELLANEOUS
SUBPART 4.1. Cross-References. References in this Agreement to any Part
or Subpart are, unless otherwise specified, to such Part or Subpart of this
Agreement.
SUBPART 4.2. Instrument Pursuant to Existing Loan Agreement. This
Agreement is a document executed pursuant to the Existing Loan Agreement and
shall (unless otherwise expressly indicated therein) be construed, administered
and applied in accordance with the terms and provisions of the Existing Loan
Agreement.
SUBPART 4.3. Loan Documents. Each Credit Party hereby confirms and
agrees that the Loan Documents are, and shall continue to be, in full force and
effect, except as amended hereby, and except that, on and after the Effective
Date references in each Loan Document to the "Loan Agreement", "thereunder",
"thereof" or words of like import referring to the Existing Loan Agreement shall
mean the Amended Loan Agreement.
SUBPART 4.4. Representations and Warranties. Each Credit Party hereby
represents and warrants that (i) it has the requisite corporate power and
authority to execute, deliver and perform this Agreement, (ii) it is duly
authorized to, and has been authorized by all necessary corporate action, to
execute, deliver and perform this Agreement, (iii) this Agreement has been duly
executed and delivered by such Credit Party and constitutes such Credit Party's
legal, valid and binding obligation, enforceable in accordance with its terms,
except as such enforceability may be limited (x) by general principles of equity
and conflicts of laws or (y) by bankruptcy, reorganization, insolvency,
moratorium or other laws of general application relating to or affecting the
enforcement, of creditors' rights, (iv) it has no claims, counterclaims,
offsets, or defenses to the Loan Documents and the performance of its
obligations thereunder, or if such Credit Party has any such claims,
counterclaims, offsets, or defenses to the Loan Documents or any transaction
related to the Loan Documents, the same are hereby waived, relinquished and
released in consideration of the Agent's execution and delivery of this
Agreement, (v) the representations and warranties contained in the Loan
Documents are, subject to the limitations set forth therein, true and correct in
all material respects on and as of the date hereof as though made on and as of
such date (except for those which expressly relate to an earlier date), (vi) no
event of default under any other agreement, document or instrument to which such
Credit Party is a party will occur as a result of the transactions contemplated
hereby, (vii) as of the date of this Agreement, no Default or Event of Default
exists, (viii) no consent, approval, authorization or order of, or filing,
registration or qualification with, any court or governmental authority or third
party is required in connection with the execution, delivery or performance by
such Credit Party of this Agreement, (ix) the execution and delivery of this
Agreement does not diminish or reduce its obligations under the
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Loan Documents (including, without limitation, in the case of each Guarantor,
such Guarantor's guaranty pursuant to Section 4 of the Amended Loan Agreement)
in any manner, except as may be specifically set forth herein.
SUBPART 4.5. Liens. Each Credit Party affirms the Liens and security
interests created and granted by it in the Loan Documents (including, but not
limited to, the Pledge Agreement and the Security Agreement) and agrees that
this Agreement shall in no manner adversely affect or impair such Liens and
security interests.
SUBPART 4.6. Costs and Expenses. The Borrower hereby agrees to pay on
demand all out-of-pocket costs and expenses (including without limitation the
reasonable fees and expenses of counsel to the Agent) incurred by the Agent in
connection with the negotiation, preparation, execution, and delivery of this
Agreement and the enforcement or preservation of any rights and remedies of the
Agent hereunder (including without limitation any such fees and expenses
subsequently incurred by the Agent in any subsequent bankruptcy or insolvency
proceeding involving a Credit Party).
SUBPART 4.7. Counterparts, Effectiveness, Telecopy, Etc. This Agreement
may be executed by the parties hereto in several counterparts, each of which
shall be deemed to be an original and all of which shall constitute together but
one and the same agreement. Delivery of executed counterparts by telecopy shall
be effective as an original and shall constitute a representation that an
original will be delivered.
SUBPART 4.8. Captions. The captions in this Agreement are inserted only
as a matter of convenience and for reference and in no way define, limit or
describe the scope of this Agreement or any provision hereof.
SUBPART 4.9. Governing Law. THIS AMENDMENT SHALL BE DEEMED TO BE A
CONTRACT MADE UNDER AND GOVERNED BY THE INTERNAL LAWS OF THE STATE OF NEW YORK
WITHOUT GIVING EFFECT TO THE CONFLICT OF LAW PRINCIPLES THEREOF.
SUBPART 4.10. Successors and Assigns. This Agreement shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors and assigns.
(signature pages follow)
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective duly authorized officers as of the day and year
first above written.
BORROWER: AAIPHARMA INC.,
a Delaware corporation
By:
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Name:
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Title:
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GUARANTORS: APPLIED ANALYTICAL INDUSTRIES
LEARNING CENTER, INC.
AAI TECHNOLOGIES, INC.
AAI INTERNATIONAL, INC.
AAI PROPERTIES, INC.
KANSAS CITY ANALYTICAL
SERVICES, INC.
MEDICAL & TECHNICAL RESEARCH
ASSOCIATES, INC.
AAI JAPAN, INC.
NEOSAN PHARMACEUTICALS, INC.
By:
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Name:
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Title:
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Second Amendment to
Second Amended and Restated Loan Agreement
in favor of aaiPharma, Inc.
AGENT: BANK OF AMERICA, N.A.
Individually in its capacity as a
Lender and in its capacity as Agent
By:
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Name:
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Title:
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LENDERS: BANC OF AMERICA
MEZZANINE CAPITAL LLC
By:
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Name:
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Title:
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FIRST UNION NATIONAL BANK
By:
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Name:
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Title:
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Second Amendment to
Second Amended and Restated Loan Agreement
in favor of aaiPharma, Inc.
