FIRST AMENDMENT TO AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT
EXHIBIT 10.1.1
FIRST AMENDMENT TO AMENDED AND RESTATED
LOAN AND SECURITY AGREEMENT
LOAN AND SECURITY AGREEMENT
THIS FIRST AMENDMENT TO AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT (the “Amendment”) is
made effective as of the 14th day of October, 2008, by and among IMPAX LABORATORIES, INC., a
Delaware corporation (“Borrower”), and WACHOVIA BANK, NATIONAL ASSOCIATION, a national banking
association (together with its successors and assigns, (“Bank”).
BACKGROUND
A. Pursuant to that certain Amended and Restated Loan and Security Agreement dated December
15, 2005 by and between Borrower and Bank, as the same may hereafter be further amended, modified,
supplemented or restated from time to time, being referred to herein as the “Loan Agreement”), Bank
agreed, inter alia, to amend and restate an existing revolving line of credit in the maximum
principal amount of Thirty-Five Million Dollars ($35,000,000.00).
B. Borrower has requested and Bank has agreed to amend the Loan Agreement in accordance with
the terms and conditions contained herein.
C. All capitalized terms contained herein and not otherwise defined herein shall have the
meanings set forth in the Loan Agreement.
NOW, THEREFORE, intending to be legally bound hereby, the parties hereto agree as follows:
1. Waiver of Covenant Default.
(a) Bank hereby waives any Default or Event of Default that exists or may arise under the Loan
Agreement as a result of Borrower’s failure to deliver to Lender audited annual financial
statements within ninety (90) days of Borrower’s fiscal years ended December 31, 2004, December 31,
2005, December 31, 2006 and December 31, 2007, as required by Section 5.6(d) and Section
5.18 of the Loan Agreement (collectively, the “Outstanding Annual Statements” and each an
“Outstanding Annual Statement”).
(b) Bank hereby waives any Default or Event of Default that exists or may arise under the Loan
Agreement as a result of Borrower’s failure to deliver to Lender quarterly or monthly financial
statements within thirty (30) days of each month or fiscal quarter ending on or after December 31,
2005, as required by Section 5.6(c) of the Loan Agreement.
(c) Bank hereby waives any Default or Event of Default that exists or may arise under the Loan
Agreement as a result of Borrower’s failure to comply with the Fixed Charge Coverage Ratio set
forth in Section 7.1 of the Loan Agreement for the Applicable Fiscal Period ended June 30,
2006.
The foregoing waivers apply solely with respect to the covenants and periods referenced in
subsections (a), (b) and (c) above and do not apply to or constitute a waiver of any other
Default or Event of Default that exists or may exist under the Loan Agreement or any of the other
Loan
Documents, including, without limitation, Borrower’s failure to comply with the covenants set
forth in Sections 5.6 and 7.1 of the Loan Agreement as of any other date.
2. Termination Date. The reference to “October 31, 2008” contained in the definition
of “Termination Date” in Section 1.1 of the Loan Agreement is hereby deleted and replaced
with “December 31, 2008”.
3. Unused Line Fee. Section 2.11.2 of the Loan Agreement is hereby amended to
read, in its entirety, as follows:
“2.11.2 Unused Line Fee. Borrower shall pay to Bank an Unused Line Fee for
each day equal to the product of (i) 50 basis points per annum multiplied by (ii)
the difference between (A) the Revolver Commitment and (B) the aggregate average
monthly outstanding principal amount of the Revolver Loans and Letter of Credit
Obligations on such day, payable monthly on the first day of each month with respect
to the immediately preceding month.”
4. Loans and Other Investments. Section 6.4 of the Loan Agreement is hereby
amended to read, in its entirety, as follows:
“6.4 Loans and Other Investments. Shall not make or permit
to exist any advances or loans to, or guarantee or become
contingently liable, directly or indirectly, in connection with the
obligations, leases, stock or dividends of, or own, purchase or make
any commitment to purchase any stock, bonds, notes, debentures or
other securities of, or any interest in, or make any capital
contributions to (all of which are sometimes collectively referred
to herein as “Investments”) any Person, except for (a) cash and Cash
Equivalents (b) existing Investments in Subsidiaries, (c)
endorsement of negotiable instruments for collection in the ordinary
course of business, (d) advances to employees for business travel
and other expenses incurred in the ordinary course of business which
do not at any time exceed Five Hundred Thousand Dollars
($500,000.00) in the aggregate, (e) any Swap Agreements with Bank
(or with any of its Affiliates), (f) Permitted Acquisitions and (g)
Investments in Borrower’s Subsidiary located in Taiwan in an amount
not to exceed Nineteen Million Dollars ($19,000,000.00) Borrower’s
fiscal year ended December 31, 2008 and Six Million Dollars
($6,000,000.00) during Borrower’s fiscal year ended December 31,
2009.”
5. Capital Expenditures. Section 7.2 of the Loan Agreement is hereby amended
to read, in its entirety, as follows:
“7.2 Capital Expenditures. Borrower shall not, directly or
indirectly, make total Capital Expenditures in excess of (a) Fifty
Million Dollars ($50,000,000.00) for the period from January 1, 2005
through December 31, 2006, (b) Twenty-Five Million Dollars
($25,000,000.00) for the period from January 1, 2007 through
December 31, 2007, and (c) Thirty-Four Million Dollars
-2-
($34,000,000.00) for the period from January 1, 2008 through December
31, 2008.”
6. Past Due Financial Statements. The Borrower agrees that, on or before October 31,
2008, the Borrower will furnish to Lender the Outstanding Annual Statements. Notwithstanding
anything to the contrary in the Loan Agreement, each Outstanding Annual Statement shall consist of
an audited financial report of Borrower and its Subsidiaries and shall contain, for the applicable
period, a consolidated balance sheet, a consolidated income statement and statement of cash flows,
setting forth in comparative form the figures for the preceding fiscal year, together with
footnotes, and containing an unqualified audit opinion of independent certified public accountants
that the financial statements were prepared in accordance with GAAP. Failure to comply with this
Section 6 shall constitute an Event of Default under the Loan Agreement.
7. Updated Schedules. Borrower and Bank agree that the schedules attached hereto
shall replace each of the corresponding schedules to the Loan Agreement (collectively, the “Updated
Schedules”).
8. Amendment Fee. Upon execution of this Amendment, Borrower shall pay to Bank an
amendment fee in the amount of Twenty-Five Thousand Dollars ($25,000.00) (the “Amendment Fee”),
which fee may be charged as a Revolver Loan or charged to any bank account of Borrower maintained
with Bank. The foregoing Amendment Fee is in addition to the interest and other amounts which
Borrower is required to pay under the Loan Documents, and is fully earned and nonrefundable.
9. Amendment/References. The Loan Agreement and the Loan Documents are hereby amended
to be consistent with the terms of this Amendment. All references in the Loan Agreement and the
Loan Documents to (a) the “Loan Agreement” shall mean the Loan Agreement as amended hereby; and (b)
the “Loan Documents” shall include this Amendment and all other instruments or agreements executed
pursuant to or in connection with the terms hereof.
10. Release. Borrower acknowledges and agrees that it has no claims, suits or causes
of action against Bank and hereby remises, releases and forever discharges Bank, their officers,
directors, shareholders, employees, agents, successors and assigns, and any of them, from any
claims, suits or causes of action whatsoever, in law or at equity, which Borrower has or may have
arising from any act, omission or otherwise, at any time up to and including the date of this
Amendment.
11. Additional Documents; Further Assurances. Borrower covenants and agrees to
execute and deliver to Bank, or to cause to be executed and delivered to Bank contemporaneously
herewith, at the sole cost and expense of Borrower, the Amendment and any and all documents,
agreements, statements, resolutions, searches, insurance policies, consents, certificates, legal
opinions and information as Bank may require in connection with the execution and delivery of this
Amendment or any documents in connection herewith, or to further evidence, effect, enforce or
protect any of the terms hereof or the rights or remedies granted or intended to be granted to Bank
herein or in any of the Loan Documents, or to enforce or to protect Bank’s interest in the
Collateral. All such documents, agreements, statements, etc., shall be in form and content
acceptable to Bank in its sole discretion. Borrower hereby authorizes Bank to file, at Borrower’s
cost and expense, financing statements, amendments thereto and other items as Bank may require to
evidence or perfect Bank’s continuing security interest and liens in and against the Collateral.
Borrower agrees to join with Bank in notifying any third party with possession of any Collateral of
Bank’s security interest
-3-
therein and in obtaining an acknowledgment from the third party that it is holding the
Collateral for the benefit of Bank. Borrower will cooperate with Bank in obtaining control with
respect to Collateral consisting of deposit accounts, investment property, letter-of-credit rights
and electronic chattel paper.
12. Further Agreements and Representations. Borrower does hereby:
(a) ratify, confirm and acknowledge that the statements contained in the foregoing Background
are true and complete and that, as amended hereby, the Loan Agreement and the other Loan Documents
are in full force and effect and are valid, binding and enforceable against Borrower and its assets
and properties, all in accordance with the terms thereof, as amended;
(b) covenant and agree to perform all of Borrower’s obligations under the Loan Agreement and
the other Loan Documents, as amended;
(c) acknowledge and agree that as of the date hereof, Borrower has no defense, set-off,
counterclaim or challenge against the payment of any of the Obligations or the enforcement of any
of the terms of the Loan Agreement or of the other Loan Documents, as amended;
(d) acknowledge and agree that all representations and warranties of Borrower contained in the
Loan Agreement and/or the other Loan Documents, as amended (including, without limitation as
modified by the Updated Schedules), are true, accurate and correct on and as of the date hereof as
if made on and as of the date hereof;
(e) represent and warrant that no Default or Event of Default exists;
(f) covenant and agree that Borrower’s failure to comply with any of the terms of this
Amendment or any other instrument or agreement executed or delivered in connection herewith, shall
constitute an Event of Default under the Loan Agreement and each of the other Loan Documents; and
(g) acknowledge and agree that nothing contained herein, and no actions taken pursuant to the
terms hereof, are intended to constitute a novation of the Note, the Loan Agreement or of any of
the other Loan Documents and does not constitute a release, termination or, except as expressly set
forth in Section 1 above, waiver of any existing Event of Default or of any of the liens,
security interests, rights or remedies granted to the Bank in any of the Loan Documents, which
liens, security interests, rights and remedies are hereby expressly ratified, confirmed, extended
and continued as security for all of the Obligations.
Borrower acknowledges and agrees that Bank is relying on the foregoing agreements,
confirmations, representations and warranties of Borrower and the other agreements, representations
and warranties of Borrower contained herein in agreeing to the amendments contained in this
Amendment.
13. Fees, Cost, Expenses and Expenditures. Borrower will pay all of Bank’s
reasonable, out-of-pocket expenses in connection with the review, preparation, negotiation,
documentation and closing of this Amendment and the consummation of the transactions contemplated
hereunder, including without limitation, fees, disbursements, expenses and disbursements of counsel
retained by Bank and all fees related to filings, recording of documents,
-4-
searches, environmental assessments and appraisal reports, whether or not the transactions
contemplated hereunder are consummated.
14. No Waiver. Nothing contained herein constitutes an agreement or obligation by
Bank to grant any further amendments to the Loan Agreement or any of the other Loan Documents.
Except as expressly set forth in Section 1 hereof, nothing contained herein constitutes a
waiver or release by Bank of any Event of Default or of any rights or remedies available to Bank
under the Loan Documents or at law or in equity.
15. Inconsistencies. To the extent of any inconsistencies between the terms and
conditions of this Amendment and the terms and conditions of the Loan Agreement or the other Loan
Documents, the terms and conditions of this Amendment shall prevail. All terms and conditions of
the Loan Agreement and other Loan Documents not inconsistent herewith shall remain in full force
and effect and are hereby ratified and confirmed by Borrower.
16. Binding Effect. This Amendment, upon due execution hereof, shall be binding upon
and inure to the benefit of the parties hereto and their respective successors and assigns.
17. Governing Law. This Amendment shall be governed and construed in accordance with
the laws of the Commonwealth of Pennsylvania without regard to conflict of law principles.
18. Severability. The provisions of this Amendment and all other Loan Documents are
deemed to be severable, and the invalidity or unenforceability of any provision shall not affect or
impair the remaining provisions which shall continue in full force and effect.
19. Modifications. No modification of this Amendment or any of the Loan Documents
shall be binding or enforceable unless in writing and signed by or on behalf of the party against
whom enforcement is sought.
20. Headings. The headings of the Articles, Sections, paragraphs and clauses of this
Amendment are inserted for convenience only and shall not be deemed to constitute a part of this
Amendment.
21. Counterparts. This Amendment may be executed in multiple counterparts, each of
which shall constitute an original and all of which together shall constitute the same agreement.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
-5-
IN WITNESS WHEREOF, the parties hereto, intending to be legally bound hereby, have caused this
Amendment to be executed the day and year first above written.
| IMPAX LABORATORIES, INC. | ||||||
| By: | /s/ Xxxxxx X. Xxxx, Xx. | |||||
| Name/Title: | Xxxxxx X. Xxxx, Xx. Senior Vice President and Chief Financial Officer |
|||||
| WACHOVIA BANK, NATIONAL ASSOCIATION | ||||||
| By: | /s/ Xxxxxxxx X. Xxxxx | |||||
| Name/Title: | Xxxxxxxx X. Xxxxx | |||||
| Director | ||||||
