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EXHIBIT 10.1
SECOND AMENDMENT AND WAIVER DATED
AS OF FEBRUARY 15, 2001
TO AMENDED AND RESTATED CREDIT AGREEMENT
DATED AS OF SEPTEMBER 15, 1999
THIS SECOND AMENDMENT AND WAIVER, dated as of February 15, 2001 (this
"Amendment"), is entered into among AKORN, INC., a Louisiana corporation
("Akorn"), AKORN NEW JERSEY, INC., an Illinois corporation ("Akorn NJ";
collectively with Akorn, the "Borrowers" and each a "Borrower"), and THE
NORTHERN TRUST COMPANY, an Illinois banking corporation having its principal
office at 00 Xxxxx XxXxxxx Xxxxxx, Xxxxxxx, Xxxxxxxx 00000 (the "Lender").
RECITALS:
A. The Borrowers and the Lender have entered into an Amended and
Restated Credit Agreement dated as of September 15, 1999, as amended by a First
Amendment thereto, dated as of December 28, 1999 (said Amended and Restated
Credit Agreement, as so amended, shall hereinafter be referred to as the
"Agreement"; the terms defined in the Agreement and not otherwise defined herein
shall be used herein as defined in the Agreement).
B. The Borrowers and the Lender wish to (a) amend the Agreement to (i)
provide for monthly accounts receivable reports; (ii) grant to the Lender a lien
on certain real estate of the Borrowers; (iii) reduce the Commitment from
$45,000,000 to $41,000,000; (iv) amend the Applicable Percentage for LIBOR Rate
and Federal Funds Rate Loans; and (v) otherwise amend certain provisions of the
Agreement and (b) waive certain Events of Default.
C. Therefore, the parties hereto agree as follows:
1. AMENDMENTS TO THE AGREEMENT.
1.1. SECTION 1.1 OF THE AGREEMENT. The following amendments
shall be made to Section 1.1 of the Agreement:
(a) The definition of "Commitment" is hereby amended and
restated in its entirety as of the date hereof as follows:
""Commitment" shall mean the aggregate commitment of the Lender
to make Advances and issue Letters of Credit, which aggregate
commitment shall be $45,000,000 on or before March 30, 2001 and
$41,000,000 on March 31, 2001, as such amount may be further adjusted,
if at all, from time to time in accordance with Section 2.3 of the
Agreement.
(b) The definition of "Applicable Percentage" is hereby amended
and restated in its entirety as of the date hereof to read as follows:
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""Applicable Percentage" shall mean, with respect to LIBOR Rate
Loans or Federal Funds Rate Loans, 2.50%."
The related definition of and use of the word "Level" is
hereby deleted as of the date hereof each time it appears in the Agreement.
(c) The definition of "Loan Documents" is hereby amended and
restated in its entirety as of the date hereof to read as follows:
""Loan Documents" shall mean the Agreement, the Note, the
Security Agreements, the Letters of Credit, the Junior Mortgage and all
other agreements, instruments, documents and certificates identified in
the Schedule of Documents in favor of Lender and including (without
limitation) all other documents, agreements, pledges, powers of
attorney, consents, assignments, contracts, notices, and all other
written matter whether heretofore, now or hereafter executed by or on
behalf of any Borrower or any of its Affiliates, or any employee of any
Borrower or any of its Affiliates, and delivered to Lender in
connection with the Agreement or the transactions contemplated hereby."
(d) The definition of "Junior Mortgage" is hereby inserted in
alphabetical order as of the date hereof to read as follows:
""Junior Mortgage" shall mean that certain Junior Mortgage,
dated as of February 15, 2001, executed by ___________________ in favor
of Lender, as the same may be amended, modified or supplemented from
time to time."
1.2. SECTION 2.3 OF THE AGREEMENT. Section 2.3 of the Agreement
is hereby amended as of the date hereof to add a sentence at the end thereof as
follows: "In the event the outstanding amount of Advances exceeds the Commitment
at any time, the Borrowers shall prepay such excess immediately without further
action or notice required from Lender."
1.3. SECTION 5.1 OF THE AGREEMENT. Section 5.1 of the Agreement
is hereby amended as of the date hereof by _______________________________
inserting a new clause (g) therein to read as follows:_______________________
"(g) Monthly Accounts Receivable Report. Within five (5) days
after the end of each month, beginning with the month ending February
28, 2001, Borrowers shall provide to Lender with an accounts receivable
aging schedule for such month, and, including with such schedule, a
calculation of the monthly collections of its accounts receivable for
such month ended, all in form and substance satisfactory to Lender."
1.4. SECTION 6 OF THE AGREEMENT. Section 6 of the Agreement is
hereby amended as of the date hereof by inserting a new subsection 6.13 therein
to read as follows:
"6.13 Delivery of Documentation. Borrowers shall deliver to
Lender, on or prior to 5:00 p.m., Chicago time, February 23, 2001 (the
"Delivery Date"), in form and substance satisfactory to Lender: (a)
recommendation letters from PMD
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Consulting and Xxxxxxxx Consulting addressing the FDA 483 M Warning
Letter issued to Borrowers from the Food and Drug Administration, and
(b) appraisal pertaining to the Borrowers' machinery and equipment
from a certified appraiser. Notwithstanding Section 8.1(c) hereof,
failure to deliver the documents in the foregoing clauses (a) and (b)
on or prior to the Delivery Date shall constitute an immediate Event
of Default."
1.5. EXHIBIT E TO THE AGREEMENT. The Agreement is hereby
amended as of the date hereof to add a new Exhibit E thereto to be in the form
set forth as Exhibit E attached hereto.
2. WAIVER. The Borrowers have advised the Lender that they are not or have not
been in compliance with Section 7.10(a) (Minimum Net Income), Section 7.10(c)
(Cash Flow Coverage Ratio), and Section 7.10(d) (Ratio of Funded Debt to EBITDA)
of the Agreement for its fiscal quarter ended December 31, 2000. On the date
hereof, as of and through December 31, 2000, the Lender waives compliance by the
Borrowers with Section 7.10(a), Section 7.10(c) and Section 7.10(d). The
Lender's waiver of non-compliance with Section 7.10(a), Section 7.10(c) and
Section 7.10(d) of the Agreement is limited to the specific instance of failure
to comply which is described above and shall not be deemed a waiver of or
consent to any other failure to comply with the terms of Section 7.10(a),
Section 7.10(c) and Section 7.10(d) of the Agreement or any other provisions of
the Agreement. Such waiver shall not prejudice or constitute a waiver of any
right or remedies which the Lender may have or be entitled to with respect to
any other breach of Section 7.10(a), Section 7.10(c) and Section 7.10(d) or any
other provision of the Agreement.
3. WARRANTIES. To induce the Lender to enter into this Amendment, each
Borrower warrants that:
3.1. AUTHORIZATION. Such Borrower is duly authorized to execute and
deliver this Amendment and the Junior Mortgage and is and will continue to be
duly authorized to borrow monies under the Agreement, as amended hereby, and to
perform its obligations under the Agreement, as amended hereby, under the Note
and under all other Loan Documents.
3.2. NO CONFLICTS. The execution and delivery of this Amendment and
the Junior Mortgage, and the performance by such Borrower of its obligations
under the Agreement, as amended hereby, under the Note and under the other Loan
Documents, do not and will not conflict with any provision of law or of the
charter or by-laws of such Borrower or of any agreement binding upon such
Borrower.
3.3. VALIDITY AND BINDING EFFECT. The Agreement, as amended hereby,
is, and the Junior Mortgage when duly executed and delivered will be, legal,
valid and binding obligations of such Borrower, enforceable against such
Borrower in accordance with their terms, except as enforceability may be limited
by bankruptcy, insolvency or other similar laws of general application affecting
the enforcement of creditors' rights or by general principles of equity limiting
the availability of equitable remedies.
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4. CONDITIONS PRECEDENT TO AMENDMENTS AND WAIVER. The amendments contemplated
by Section 1 and the waiver in Section 2 hereof are subject to the satisfaction
of each of the following conditions precedent:
4.1. DOCUMENTATION. The Borrowers shall have delivered to the Lender
all of the following, each duly executed and dated the closing date hereof, in
form and substance satisfactory to the Lender:
(a) Junior Mortgage. A duly executed Junior Mortgage, together with
such UCC financing statements, title insurance notices and such other documents
as the Lender shall request.
(b) Resolutions. A copy, duly certified by the secretary or an
assistant secretary of each Borrower, of (i) resolutions of such Borrower's
Board of Directors authorizing or ratifying the execution and delivery of this
Amendment, the Junior Mortgage and all other documents to be delivered in
connection herewith and authorizing the borrowings under the Agreement, as
amended hereby, (ii) all documents evidencing other necessary corporate action,
and (iii) all approvals or consents, if any, with respect to this Amendment and
the Junior Mortgage.
(c) Incumbency Certificate. A certificate of the secretary or an
assistant secretary of each Borrower certifying the names of such Borrower's
officers authorized to sign this Amendment, the Junior Mortgage and all other
documents or certificates to be delivered hereunder, together with the true
signatures of such officers.
(d) Opinion. An opinion of Xxxxx, Xxxxxx, MacKay & Xxxxxxxxxx,
counsel to the Borrowers, addressed to the Lender, in substantially the form of
Exhibit C hereto.
(e) Certificate. A certificate of the president or chief financial
officer of each Borrower as to the matters set out in Sections 4.2 and 4.3
hereof.
(f) Participant Consent. The Lender shall have obtained the written
consents of each of its existing participants to the execution, delivery and
performance of this Amendment and all other documents to be delivered in
connection herewith.
(g) Other. Such other documents as the Lender may reasonably
request.
4.2. NO DEFAULT. After giving effect to the waiver herein, as of the
closing date hereof, no Event of Default or Default under the Loan Documents
shall have occurred and be continuing.
4.3. WARRANTIES. After giving effect to the waiver herein, as of the
closing date hereof, the warranties in the Loan Documents and in Section 3 of
this Amendment shall be true and correct as though made on such date, except for
such changes as are specifically permitted under the Agreement.
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4.4. AMENDMENT FEE. The Borrowers shall have paid to the Lender, for
the account of the Lender and its participants who have approved in writing the
transactions contemplated by this Amendment on or before the close of business,
Chicago time, on February __, 2001, a fee equal to the product of 25 basis
points times the Commitment of the Lender and such consenting participants. Such
fee shall be non-refundable after February __, 2001. The Lender shall forward to
each consenting participant its portion of such amendment fee.
5. GENERAL.
5.1. EXPENSES. Each Borrower agrees to pay the Lender upon demand for
all reasonable expenses, including reasonable attorneys' and legal assistants'
fees (which attorneys and legal assistants may be employees of the Lender),
incurred by the Lender in connection with the preparation, negotiation and
execution of this Amendment, the Junior Mortgage and any document required to be
furnished therewith.
5.2. LAW. THIS AMENDMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND
GOVERNED BY THE INTERNAL LAWS OF THE STATE OF ILLINOIS.
5.3. SUCCESSORS. This Amendment shall be binding upon each Borrower
and the Lender and their respective successors and assigns, and shall inure to
the benefit of each Borrower and the Lender and the successors and assigns of
the Lender.
5.4. CONFIRMATION OF THE AGREEMENT. The Agreement, as amended
hereby, and the other Loan Documents shall remain in full force and effect and
is hereby ratified and confirmed in all respects.
5.5. REFERENCES TO THE AGREEMENT. Each reference in the Agreement to
"this Agreement," "hereunder," "hereof," or words of similar import in
instruments or documents provided for in the Agreement or delivered or to be
delivered thereunder or in connection therewith, shall, except where the context
otherwise requires, be deemed a reference to the Agreement as amended hereby.
5.6. COUNTERPARTS. This Amendment may be executed in any number of
counterparts, each of which shall be deemed to be an original and all of which,
taken together, shall constitute but one and the same Amendment. Delivery of an
executed counterpart of this Amendment by facsimile shall be as effective as
delivery of a manually executed counterpart of this Amendment.
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed at Chicago, Illinois by their respective officers thereunto duly
authorized as of the date first written above.
AKORN, INC.
By: /s/ Xxxx XxXxxxxxxx
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Title Chief Financial Officer
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AKORN NEW JERSEY, INC.
By: /s/ Xxxx XxXxxxxxxx
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Title Chief Financial Officer
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THE NORTHERN TRUST COMPANY
By: /s/ Xxxxxxx Xxxxxx
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Title Vice President
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EXHIBIT C
[FORM OF OPINION OF COUNSEL
TO THE COMPANY]
The Northern Trust Company
00 Xxxxx XxXxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention:
Ladies and Gentlemen:
We have acted as counsel for Akorn, Inc. and Akorn New Jersey, Inc.
(collectively, the "Borrowers" and each individually a "Borrower") in connection
with a Second Amendment and Waiver dated as of February 15, 2001 (the
"Amendment") to the Amended and Restated Credit Agreement dated as of September
15, 1999, as amended, entered into among the Borrowers and Lender (the
"Agreement"), and the transactions and other documents and instruments described
therein. Unless otherwise defined herein, capitalized terms used herein shall
have the respective meanings assigned to such terms in the Amendment.
In so acting, we, as counsel for the Borrowers, have made such factual
inquiries, and we have examined or caused to be examined such questions of law,
as we have considered necessary or appropriate for the purposes of this opinion
and, upon the basis of such inquiries and examination, advise you that, in our
opinion:
1. Each Borrower is a corporation duly organized, validly existing and
in good standing under the laws of the state of its incorporation, and is duly
qualified and in good standing as a foreign corporation in all other
jurisdictions in which its present operations or properties require such
qualification.
2. Each Borrower has full corporate power and authority to enter into
the Amendment and to perform its obligations under the Agreement, as amended by
the Amendment and under the Junior Mortgage.
3. The execution and delivery of the Amendment and the Junior Mortgage,
the performance by each Borrower of its obligations under the Agreement, as
amended by the Amendment and under the Junior Mortgage, and the borrowings by
each Borrower under the Agreement, as amended by the Amendment, have been duly
authorized by all necessary corporate action, and the Amendment and the Junior
Mortgage have been duly executed and delivered on behalf of each Borrower and
constitute valid and binding obligations of such Borrower, enforceable in
accordance with their respective terms, except as enforceability may be limited
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bankruptcy, insolvency or other similar laws of general application affecting
the enforcement of creditors' rights or by general principles of equity limiting
the availability of equitable remedies.
4. There is no provision in such Borrower's articles of incorporation
or by-laws, nor any provision in any indenture, mortgage, contract or agreement
to which such Borrower is a party or by which it or its properties may be bound
and of which we have knowledge, nor any law, statute, rule or regulation, nor
any writ, order or decision of any court or governmental instrumentality binding
on such Borrower which would be contravened by the execution and delivery of the
Amendment or the Junior Mortgage, nor do any of the foregoing prohibit such
Borrower's performance of any term, provision, condition, covenant or any other
obligation of such Borrower contained in the Agreement, as amended by the
Amendment or in the Junior Mortgage.
5. Neither the making of the Amendment or the Junior Mortgage nor
performance of the Agreement, as amended by the Amendment or the Junior
Mortgage, nor the borrowing under the Agreement, as amended by the Amendment,
requires the consent or approval of any governmental instrumentality.
Very truly yours,
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The Northern Trust Company
00 Xxxxx XxXxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Re: Second Amendment and Waiver dated as of February 15, 2001 (the "Amendment")
to Amended and Restated Agreement dated as of September 15, 1999, as
amended (the "Agreement"), among Akorn, Inc. and Akorn New Jersey, Inc.
(the "Borrowers") and The Northern Trust Company (the "Lender")
Ladies and Gentlemen:
This certificate is being delivered to the Lender pursuant to Section 4.1(e) of
the Amendment. Terms used in this certificate which are defined in the Agreement
shall have the same meaning herein as therein.
In connection with the closing today of the Amendment, the undersigned officer
of each Borrower hereby certifies as follows:
1. After giving effect to the waiver in the Amendment, no Event of
Default or Default under the Loan Documents has occurred and is
continuing.
2. After giving effect to the waiver in the Amendment, the
warranties in the Loan Documents and in Section 3 of the
Amendment are true and correct as of the date hereof as though
made on the date hereof, except for such changes as are
specifically permitted under the Agreement.
Very truly yours,
Dated February __, 2001 AKORN, INC.
By:
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Title: Chief Financial Officer
AKORN NEW JERSEY, INC.
By:
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Title: Chief Financial Officer
