EXHIBIT 10.69
FIRST AMENDMENT AND WAIVER
This First Amendment and Waiver, dated as of February 27,
2003, (this "AMENDMENT") among the financial institutions from time to time
parties hereto (such financial institutions, together with their respective
successors and assigns, are referred to hereinafter each individually as a
"LENDER" and collectively as the "Lenders"), Bank of America, N.A. with an
office at 000 Xxxxxxxxx Xxxxxx, XX, Xxxxx Xxxxx, Xxxxxxx, Xxxxxxx 00000, as
agent for the Lenders (in its capacity as agent, the "AGENT"), Andrx
Corporation, a Delaware corporation, with offices at 0000 Xxxxxx Xxxx, Xxxxxx,
Xxxxxxx 00000 (the "PARENT GUARANTOR"), and each of the Parent Guarantor's
Subsidiaries identified on the signature pages hereof as the Borrowers and each
of the Parent Guarantor's other Subsidiaries identified on the signature pages
hereof as the Guarantors.
RECITALS:
WHEREAS, the Agent, the Lenders, the Borrowers, and the
Guarantors are parties to that certain Credit Agreement dated as of December 30,
2002 (as amended, restated, supplemented or otherwise modified from time to
time, the "CREDIT AGREEMENT"; capitalized terms used herein and not otherwise
defined herein shall have the meanings assigned to such terms in the Credit
Agreement); and
WHEREAS, the Parent Guarantor is party to that certain Parent
Guaranty dated as of December 30, 2002 (as amended, restated, supplemented or
otherwise modified from time to time, the "PARENT GUARANTY") guaranteeing all of
the Obligations (as defined in the Credit Agreement) of the Borrowers to the
Agent and the Lenders; and
WHEREAS, the Guarantors, other than the Parent Guarantor, are
parties to that certain Subsidiary Guaranty dated as of December 30, 2002 (as
amended, restated, supplement or otherwise modified from time to time, the
"SUBSIDIARY GUARANTY") guaranteeing all of the Obligations (as defined in the
Credit Agreement) of the Borrowers to the Agent and the Lenders; and
WHEREAS, certain of the insurance carriers of the Borrower
Parties as set forth on Schedule 1 attached hereto do not maintain a rating of
A+ as required by SECTION 7.5 of the Credit Agreement, and as a result thereof,
there has occurred a Default under SECTION 7.5 of the Credit Agreement and an
Event of Default under SECTION 9.1(C) of the Credit Agreement (collectively, the
"SPECIFIED INSURANCE EVENTS OF DEFAULT"); and
WHEREAS, the Dormant Xxxxxxxxxxx.xxx Subsidiary has not filed
all of the tax returns it was required to file with, and has not paid all of the
taxes that it was required to pay to, the State of California, as more fully set
forth on Schedule 1, and as a result thereof, there has occurred a Default under
SECTION 6.20 and SECTION 7.1 of the Credit Agreement and an Event of Default
under SECTION 9.1(B) and SECTION 9.1(C) of the Credit Agreement (collectively,
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the "SPECIFIED TAX EVENTS OF DEFAULT"; together with the Specified Insurance
Events of Default, collectively, the "SPECIFIED EVENTS OF DEFAULT"); and
WHEREAS, the Borrowers have requested that the Agent and the
Lenders waive the Specified Events of Default and that the Credit Agreement be
amended and modified, all as set forth herein; and
WHEREAS, the Agent and the Lenders have agreed to such waiver
and amendment of the Credit Agreement pursuant to the terms and subject to the
conditions set forth herein;
NOW, THEREFORE, for good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
SECTION 1. AMENDMENTS AND MODIFICATIONS TO THE CREDIT AGREEMENT.
1.1 AMENDMENTS TO SECTION 5.2 OF THE CREDIT AGREEMENT. SECTION 5.2 of
the Credit Agreement, FINANCIAL INFORMATION, is hereby amended and modified as
follows:
(a) SECTION 5.2(B) of the Credit Agreement is hereby amended
and modified by inserting the phrase "chief executive officer," immediately
prior to the phrase "chief financial officer" in the third sentence of such
Section.
(b) SECTION 5.2(C) of the Credit Agreement is hereby amended
and modified by inserting the phrase "chief executive officer," immediately
prior to the phrase "chief financial officer" in the second sentence of such
Section. SECTION 5.2(C) of the Credit Agreement is hereby further modified and
amended to the extent necessary to provide that the deadline for delivery of the
financial information required by such Section 5.2(c) for the Fiscal Month ended
January 31, 2003 shall be March 7, 2003.
(c) SECTION 5.2(E) of the Credit Agreement is hereby amended
and modified by inserting the phrase "chief executive officer," immediately
prior to each occurrence of the phrase "chief financial officer" in each of the
first three sentences of such Section and by inserting the parenthetical "(with
`reasonable detail' meaning, with respect to each Fiscal Month that is not the
last month of a Fiscal Quarter, only the total amount of such expenditures for
the applicable period on a consolidated basis)" after the phrase "(i) the amount
of all Capital Expenditures for the Fiscal Year to date." SECTION 5.2(E) of the
Credit Agreement is hereby further modified and amended to the extent necessary
to provide that the deadline for delivery of the information required by such
Section 5.2(e) for the Fiscal Month ended January 31, 2003 shall be March 7,
2003.
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(d) SECTION 5.2(G) of the Credit Agreement is hereby amended
and modified by inserting the phrase ", including any Multi-employer Plan"
immediately after the word "Plan" in the last line of such Section.
1.2 AMENDMENT TO SECTION 5.3 OF THE CREDIT AGREEMENT. Subsection (n) of
SECTION 5.3 of the Credit Agreement, NOTICES TO THE LENDERS, is hereby amended
and modified by deleting the phrase "and annual report from any Multi-employer
Plan" from the second line of such Section.
1.3 AMENDMENT TO SCHEDULE 6.7 OF THE CREDIT AGREEMENT. Schedule 6.7 to
the Credit Agreement is hereby replaced by the Schedule 6.7 attached to this
Amendment.
1.4 AMENDMENT TO SECTION 7.1 OF THE CREDIT AGREEMENT. Section 7.1 of
the Credit Agreement, TAXES AND OTHER OBLIGATIONS, is hereby amended and
modified as follows:
(a) Subsection (a) of Section 7.1 of the Credit Agreement is
hereby amended and modified to add the phrase "for taxes, fees, assessments, and
other governmental charges in excess of $100,000 in the aggregate" at the end of
the subsection.
(b) Subsection (b) of Section 7.1 of the Credit Agreement is
hereby amended and modified to add the phrase "in excess of $100,000 in the
aggregate" after the phrase "all taxes, fees, assessments and other governmental
charges" and to delete the proviso set forth therein and to substitute the
following therefor:
"PROVIDED, HOWEVER, neither the Parent Guarantor nor any
Subsidiary need pay any such taxes, fees, assessments, or
governmental charges in excess of $100,000 in the aggregate
(i) it is contesting in good faith by appropriate proceedings
diligently pursued, (ii) as to which the Parent Guarantor or
such Subsidiary, as the case may be, has established proper
reserves as required under GAAP, (iii) the nonpayment of which
does not result in the imposition of a Lien (other than a
Permitted Lien) and (iv) as to which the Administrative
Borrower has notified the Agent in writing"
1.5 AMENDMENT TO SECTION 7.5 OF THE CREDIT AGREEMENT. SECTION 7.5. of
the Credit Agreement, INSURANCE, is hereby amended and modified by deleting
SECTION 7.5(A) in its entirety and by substituting the following in lieu
thereof:
"(a) Each of the Parent Guarantor and each Subsidiary shall
maintain, with financially sound and reputable insurers having
a rating of at least A+ or better by Best Rating Guide or such
lower rating as may be approved by Agent in its reasonable
discretion or at the reasonable discretion of the Majority
Lenders, insurance against loss or damage by fire with
extended coverage; theft, burglary, pilferage and loss in
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transit; products liability; larceny, embezzlement or other
criminal liability; business interruption; public liability
and third party property damage; and such other hazards or of
such other types as is customary for Persons engaged in the
same or similar business, as the Agent, in its discretion, or
acting at the direction of the Majority Lenders, shall
specify, in amounts, and under policies acceptable to the
Agent and the Majority Lenders. Without limiting the
foregoing, in the event that any improved Real Estate covered
by the Mortgages is determined to be located within an area
that has been identified by the Director of the Federal
Emergency Management Agency as a Special Flood Hazard Area
("SFHA"), the Parent Guarantor and the Subsidiaries shall (i)
purchase and maintain flood insurance on the improved Real
Estate and any Equipment and Inventory located on such Real
Estate and (ii) maintain its active participation in the
federally guaranteed flood insurance program with the National
Flood Insurance Program. The amount of said flood insurance
will be reasonably determined by the Agent, and shall, at a
minimum, comply with applicable federal regulations as
required by the Flood Disaster Protection Act of 1973, as
amended. Each of the Parent Guarantor and each Subsidiary
shall also maintain flood insurance for its Inventory and
Equipment which is, at any time, located in a SFHA."
1.6 AMENDMENT TO SECTION 7.18 OF THE CREDIT AGREEMENT. Section 7.18 of
the Credit Agreement, Business Conducted, is hereby amended and modified by
changing the date "February 28, 2003" set forth therein to "December 31, 2003."
1.7 AMENDMENTS TO ANNEX A TO THE CREDIT AGREEMENT. ANNEX A. to the
Credit Agreement, DEFINITIONS, is hereby amended and modified as follows:
(a) The definition of "Applicable Margin" is hereby amended
and modified by inserting the phrase "chief executive officer," immediately
prior to the phrase "chief financial officer" in the second sentence following
the final table.
(b) The definition of "Dormant Xxxxxxxxxxx.xxx Subsidiary" is
hereby deleted in its entirely and the following is substituted in lieu thereof:
"Dormant Xxxxxxxxxxx.xxx Subsidiary" means, collectively,
Cyberdiet, Inc., a California corporation, Mood Sciences,
Inc., a California corporation, and MCNS Merger Subsidiary II,
a New Jersey corporation, f/k/a Cybear-Tech, Inc.
(c) The definition of "Responsible Officer" is hereby deleted
in its entirety and the following is substituted in lieu thereof:
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"Responsible Officer" means the chief executive officer, the
chief financial officer, the president or any executive vice
president of the Administrative Borrower, or any other officer
having substantially the same authority and responsibility.
SECTION 2. WAIVER OF DEFAULTS.
Subject to the fulfillment of the conditions precedent to the
effectiveness of this Amendment, which are set forth below, Lenders hereby waive
the Specified Events of Default; PROVIDED, HOWEVER, the Lenders waive the
Specified Insurance Events of Default so long as, unless otherwise consented to
by the Agent in its reasonable discretion or at the reasonable discretion of the
Majority Lenders, (a) the amount of insurance provided by the insurance carriers
referred to on Schedule 1 is not materially increased, (b) the ratings of such
insurance carriers are not at any time lower than the ratings reflected on
Schedule 1 and (c) the amount and level (in terms of the order in which
insurance policies cover losses of the Borrower Parties) of insurance provided
by insurance carriers that meet the requirements of SECTION 7.5 is not
materially decreased.
SECTION 3. NO OTHER AMENDMENT OR WAIVER.
The execution, delivery and effectiveness of this Amendment
shall not, except as expressly provided in Sections 1 and 2 of this Amendment,
operate as an amendment to or waiver of any right, power or remedy of the Agent
or the Lenders under the Credit Agreement or any of the other Loan Documents,
nor constitute a waiver of any provision of the Credit Agreement or any of the
other Loan Documents. Except for the amendments expressly set forth in Section 1
of this Amendment, the text of the Credit Agreement and all other Loan Documents
shall remain unchanged and in full force and effect and each Borrower Party
hereby ratifies and confirms its respective obligations thereunder. This
Amendment shall not constitute a modification of the Credit Agreement or a
course of dealing with the Agent or the Lenders at variance with the Credit
Agreement such as to require further notice by the Agent or the Lenders to
require strict compliance with the terms of the Credit Agreement and the other
Loan Documents in the future, except as expressly set forth herein. Each
Borrower Party acknowledges and expressly agrees that the Agent and the Lenders
reserve the right to, and do in fact, require strict compliance with all terms
and provisions of the Credit Agreement and the other Loan Documents. The
Borrower Parties have no knowledge of any challenge to the Agent's or the
Lenders' claims arising under the Loan Documents or the effectiveness of the
Loan Documents.
SECTION 4. REPRESENTATIONS AND WARRANTIES.
In consideration of the agreement of the Agent and the Lenders
to amend the Loan Agreement and to waive the Specified Events of Default, each
Borrower Party hereby represents and warrants to the Agent and the Lenders as of
the date hereof as follows:
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4.1 DUE AUTHORIZATION; ENFORCEABILITY. Each Borrower Party has the
power and authority to execute, deliver and perform this Amendment. Each
Borrower Party has taken all necessary action (including obtaining approval of
its stockholders if necessary) to authorize its execution, delivery, and
performance of this Amendment. This Amendment has been duly executed and
delivered by each Borrower Party, and constitutes the legal, valid and binding
obligations of such Borrower Party, enforceable against it in accordance with
its terms.
4.2 AFFIRMATION OF BINDING OBLIGATIONS. All Loan Documents (as the same
may be amended, restated, supplemented or otherwise modified from time to time)
including, without limitation, the Credit Agreement, the Revolving Loan Note,
the Security Agreement, the Parent Guaranty, the Subsidiary Guaranty, the
Mortgages, the Patent and Trademark Security Agreement, the Pledge Agreement and
each of the other Loan Documents constitute valid and legally binding
obligations of the Borrower Parties, as applicable, enforceable against the
Borrower Parties in accordance with the terms thereof and as heretofore amended
and as amended by Section 1 hereof.
4.3 NO DEFAULT OR EVENT OF DEFAULT. After giving effect to the waiver
set forth in Section 2 of this Amendment, no Default or Event of Default exists.
SECTION 5. COVENANTS AND AGREEMENTS.
In order to induce the Agent and the Lenders to amend the
Credit Agreement and to waive the Specified Events of Default, each Borrower
Party hereby covenants and agrees with the Agent and the Lenders as follows,
and, unless otherwise indicated, such covenants and agreements shall expressly
survive the Termination Date hereof:
5.1 EXPENSES. The Borrower Parties agree to pay on demand all
reasonable costs and expenses in connection with the preparation, execution,
delivery, administration, modification and amendment of this Amendment and the
other instruments and documents to be delivered hereunder, including, without
limitation, the reasonable fees and expenses of counsel for the Agent with
respect thereto and with respect to advising the Agent as to its rights and
responsibilities hereunder and thereunder.
SECTION 6. MISCELLANEOUS.
6.1 ACKNOWLEDGMENT OF VALIDITY AND ENFORCEABILITY OF LOAN DOCUMENTS.
Each Borrower Party expressly acknowledges and agrees that the Credit Agreement
and other Loan Documents are valid and enforceable by the Agent and the Lenders,
and expressly confirms, ratifies and reaffirms that the respective Loan
Documents to which each is a party, secure the full amount of the Obligations of
the Borrowers under the Credit Agreement and other Loan Documents, free and
clear of all defenses, offsets and counterclaims of any kind or nature.
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6.2 CONDITIONS PRECEDENT. This Amendment shall become effective and be
deemed effective as of the date hereof, upon the occurrence of each of the
following, to the satisfaction of the Agent and the Required Lenders:
(a) This Amendment shall have been duly executed and delivered
by each Borrower Party and the Required Lenders; and
(b) The Agent shall have received such other documents as the
Agent may request.
6.3 SECTION TITLES. The section titles contained in this Amendment are
included for the sake of convenience only, shall be without substantive meaning
or content of any kind whatsoever, and are not a part of the agreement between
the parties.
6.4 SEVERABILITY. The illegality or unenforceability of any provision
of this Amendment or any instrument or agreement required hereunder shall not in
any way affect or impair the legality or enforceability of the remaining
provisions of this Amendment or any instrument or agreement required hereunder.
6.5 ENTIRE AGREEMENT. This Amendment constitutes the entire agreement
and understanding between the parties hereto with respect to the transactions
contemplated hereby and supersedes all prior negotiations, understandings and
agreements between such parties with respect to such transactions. This
Amendment shall constitute a Loan Document for all purposes.
6.6 APPLICABLE LAW. This Amendment shall be interpreted and the rights
and liabilities of the parties hereto determined in accordance with the internal
laws (as opposed to the conflict of laws provisions provided that perfection
issues with respect to Article 9 of the UCC may give effect to applicable choice
or conflict of law rules set forth in Article 9 of the UCC) of the State of
Georgia; provided that the agent and the lenders shall retain all rights arising
under federal law.
6.7 CONSULTATION WITH COUNSEL. Each Borrower Party represents to the
Agent and the Lenders that it has discussed this Amendment with its counsel.
6.8 REFERENCE TO AND EFFECT ON THE LOAN DOCUMENTS. Upon the
effectiveness of this Amendment, on and after the date hereof each reference in
the Credit Agreement to "this Agreement," "hereunder," "hereof" or words of like
import referring to the Credit Agreement, and each reference in the other Loan
Documents to "the Credit Agreement," "thereunder," "thereof" or words of like
import referring to the Credit Agreement, shall mean and be a reference to the
Credit Agreement as heretofore amended and as amended by Section 1 hereof.
6.9 COUNTERPARTS. This Amendment may be executed in any number of
counterparts, and by the Agent, each Lender, and each Borrower Party in separate
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counterparts, each of which shall be an original, but all of which shall
together constitute one and the same agreement; signature pages may be detached
from multiple separate counterparts and attached to a single counterpart so that
all signature pages are physically attached to the same document.
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IN WITNESS WHEREOF, the parties have entered into this
Amendment on the date first above written.
BORROWERS:
ANDA, INC., a Florida corporation
By:
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Title:
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ANDA PHARMACEUTICALS, INC., a Florida
corporation
By:
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Title:
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ANDRX LABORATORIES, INC., a Mississippi
corporation
By:
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Title:
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ANDRX LABS, LLC, a Delaware limited liability
company
By:
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Title:
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ANDRX MANAGEMENT CORPORATION, formerly known
as Anda Sales, Inc., a Florida corporation
By:
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Title:
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S-1
ANDRX PHARMACEUTICALS EQUIPMENT #1, LLC, a
Florida limited liability company
By:
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Title:
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ANDRX PHARMACEUTICALS, INC., a Florida
corporation
By:
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Title:
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ANDRX PHARMACEUTICALS, LLC, a Delaware
limited liability company
By:
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Title:
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ANDRX PHARMACEUTICALS (NC), INC., a Florida
corporation
By:
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Title:
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VALMED PHARMACEUTICAL, INC., a New York
corporation
By:
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Title:
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GUARANTORS:
ANDA PUERTO RICO, INC., a Puerto Rico
corporation
By:
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Title:
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S-2
ANDRX CORPORATION, a Delaware corporation
By:
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Title:
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ANDRX LABORATORIES (NJ), INC., a Delaware
corporation
By:
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Title:
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ANDRX PHARMACEUTICALS SALES AND MARKETING,
INC., a Florida corporation
By:
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Title:
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XXXXXXXXX PHARMACEUTICALS, INC., a Delaware
corporation
By:
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Title:
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CARAN PHARMACEUTICALS, INC., a Nevada
corporation
By:
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Title:
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S-3
CYBEAR, LLC, a Delaware limited liability
company
By:
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Title:
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XXXXXXXXXXX.XXX, INC., a Delaware
corporation,
By:
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Title:
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XXXXXXXXXXX.XXX (US), LTD., a Delaware
corporation
By:
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Title:
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PHYSICIANS' ONLINE, LLC, a Delaware limited
liability company
By:
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Title:
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SR SIX, INC., a Florida corporation
By:
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Title:
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S-4
AGENT AND LENDERS:
BANK OF AMERICA, N.A., as the Agent and a
Lender
By:
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Title:
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S-5
CONGRESS FINANCIAL CORPORATION (CENTRAL), as
a Lender
By:
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Title:
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S-6
STANDARD FEDERAL BANK NATIONAL ASSOCIATION,
acting by and through its agent, LaSalle
Business Credit, LLC, a Delaware limited
liability company, successor by merger to
LaSalle Business Credit, Inc., a Delaware
corporation, as a Lender
By:
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Title:
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S-7
TRANSAMERICA BUSINESS CAPITAL CORPORATION, as
a Lender
By:
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Title:
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S-8
PNC BANK, NATIONAL ASSOCIATION as a Lender
By:
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Title:
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S-9
THE CIT GROUP/BUSINESS CREDIT, INC., as a
Lender
By:
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Title:
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S-10
