AMENDMENT AND WAIVER
EXHIBIT 10.4
EXECUTION
COPY
This
AMENDMENT AND WAIVER (this “Amendment”),
dated
as of May 30, 2008, is made by and between RxElite, Inc., a Delaware corporation
(the “Company”),
and
Castlerigg Master Investments Ltd., a British Virgin Islands company (the
“Holder”
or
“Castlerigg”).
The
Company and the Holder are, collectively, the “Parties.”
Capitalized terms used herein and not otherwise defined shall have the meanings
ascribed to them in that certain Senior Secured Convertible Note, issued by
the
Company to the Holder on December 31, 2007 in the principal amount of
$10,500,000, as may have been previously amended (the “Note”),
pursuant to that certain Securities Purchase Agreement dated as of December
31,
2007 by and between the Company and the Holder (the “Securities
Purchase Agreement”).
RECITALS
WHEREAS,
Section 14(b) of the Note provides that the Company shall not, and the Company
shall not permit any of its Subsidiaries to, directly or indirectly, incur
or
guarantee, assume or suffer to exist any Indebtedness, other than (i) the
Indebtedness evidenced by the Note and the Other Notes and (ii) other Permitted
Indebtedness;
WHEREAS,
Section 14(c) of the Note provides that the Company shall not, and the Company
shall not permit any of its Subsidiaries to, directly or indirectly, allow
or
suffer to exist any Liens other than Permitted Liens and Permitted Vaporizer
Liens;
WHEREAS,
the Company desires to enter into a Loan and Security Agreement with NPIL Pharma
Inc., a Delaware corporation (“NPIL”),
in
the form attached hereto as Exhibit
A
(the
“Loan
and Security Agreement”),
pursuant to which NPIL shall lend the Company $5,000,000 (the “NPIL
Loan”)
in
exchange for a promissory note and a junior lien in substantially all of the
Company’s assets (the “NPIL
Lien”);
WHEREAS,
the NPIL Loan is not Permitted Indebtedness and the NPIL Lien is not a Permitted
Lien; and
WHEREAS,
at the request of the Company, the Holder has agreed to consent to the NPIL
Loan
and the granting of the NPIL Lien, and treat them as Permitted Indebtedness
and
a Permitted Lien, respectively, subject to the terms and conditions set forth
in
the subordination agreement, in the form attached hereto as Exhibit
B
(the
“Subordination
Agreement”),
by
and among NPIL, the Company and Castlerigg in its capacity as collateral agent
for the Holder.
NOW,
THEREFORE, in consideration of the promises and covenants made herein, and
for
such other good and valuable consideration, the receipt and sufficiency of
which
are hereby acknowledged, the Parties hereby agree as follows:
1. Amendment
to the Note.
(a) Section
(4) of the Note is hereby amended by (i) deleting the word “or” appearing at the
end of clause (xviii) thereof, (ii) redesignating clause (xix) as new clause
(xx) and (iii) adding new clause (xix) to read as follows:
“(xix) any
default or event of default shall have occurred under the Loan and Security
Agreement; or”
(b) The
definition of “Permitted Indebtedness” set forth in Section (28)(dd) of the Note
is hereby amended by
(i)
deleting the word “and” appearing therein immediately before clause (v) thereof
and (ii) adding the following new clause (vi) to read as follows:
“and
(vi)
Indebtedness incurred under that certain Loan and Security Agreement, dated
as
of May 30, 2008 (the “Loan
and Security Agreement”),
by
and between the Company and NPIL Pharma Inc., a Delaware corporation (the
“Subordinated
Lender”),
to
the extent that such Indebtedness and the Liens that secure such Indebtedness
are subject to the terms of the Subordination Agreement, dated as of May 30,
2008 (the “Subordination
Agreement”),
by
and among the Subordinated Lender, the Company and Castlerigg Master Investments
Ltd., in its capacity as collateral agent for the Holder.”
(c) The
definition of “Permitted Vaporizer Liens” set forth in Section (28)(ff) of the
Note is hereby amended and restated in its entirety to read as
follows:
“Permitted
Vaporizer Liens”
means
Liens incurred by the Company pursuant to the Loan and Security Agreement (as
in
effect on the date hereof), securing Indebtedness permitted under clause (vi)
of
the definition of Permitted Indebtedness, to the extent that such Liens are
subject to the terms of the Subordination Agreement.”
2. Waiver
and Consent.
(a) Subject
to Section 3 hereof, the Holder consents to, and waives any Event of Default
that would otherwise arise under Section (4)(x) of the Note as a result of
the
Company’s failure to comply with Sections (14)(b) and (c) of the Note due to the
Company entering into the Loan and Security Agreement and granting a Lien on
and
in the Company’s assets under the Loan and Security Agreement.
(b) The
waiver in this Section 2 shall be effective only in this specific instance
and
for the specific purpose set forth herein and does not allow for any other
or
further departure from the terms and conditions of the Securities Purchase
Agreement, the Note or any other Transaction Document (as defined in the
Securities Purchase Agreement), which terms and conditions shall continue in
full force and effect.
3. Miscellaneous
Provisions.
(a) No
Further Agreements/Waivers.
The
Company hereby (i) acknowledges, that except as set forth herein and as may
have
been previously amended, the Note shall remain unmodified and in full force
and
effect and
is
hereby ratified and confirmed in all respects except that on and after the
date
hereof all references in the Note to the “Notes”, the “Note”, the “Senior
Secured Convertible Note”, “thereto”, “thereof”, “thereunder” or words of like
import referring to the Note shall mean the Note as amended by this Amendment,
and (ii) confirms and agrees that to the extent that any Transaction
Document purports to assign or pledge to Castlerigg, individually and in its
capacity as collateral agent for the Buyers party to the Securities Purchase
Agreement, or to grant to Castlerigg, individually and in its capacity as
collateral agent for the Buyers party to the Securities Purchase Agreement,
a
security interest in or Lien on, any Collateral (as defined in the Security
Agreement dated as of December 31, 2007 by and among the Company and the
subsidiaries of the Company signatories thereto in favor of Castlerigg
individually and as collateral agent for the Buyers party to the Securities
Purchase Agreement (the “Security
Agreement”))
as
security for the Company’s obligations under the Securities Purchase Agreement,
the Note and the Transaction Documents, as the case may be, of the Company
or
any Guarantor (as defined in the Security Agreement) from time to time existing
in respect of the Note (as amended hereby) and the other Transaction Documents,
such pledge, assignment and/or grant of the security interest or Lien is hereby
ratified and confirmed in all respects. This
Amendment may only be modified or amended by a written agreement executed by
Parties. Each
Party hereby acknowledges and agrees that this Amendment constitutes a
“Transaction Document” under the Note.
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(b) Fees
and Expenses.
The
Company shall pay or cause to be paid all legal fees and expenses of counsel
for
the Holder incurred in connection with the execution and delivery of this
Amendment.
(c) Counterparts.
This
Amendment may be executed in one or more counterparts, each of which shall
be
deemed an original but all of which when taken together shall constitute one
and
the same instrument. Facsimiles or portable document files transmitted by e-mail
containing original signatures shall be deemed for all purposes to be originally
signed copies of the documents which are the subject of such facsimiles or
files.
(d) Binding
on Successors.
This
Amendment shall be binding upon and shall inure to the benefit of the successors
and permitted assigns of the Parties.
(e) Entire
Agreement.
The
Note, as may have been previously amended, and as reflective of the terms
hereof, contains the entire understanding between the Parties and supersede
any
prior written or oral agreements between them respecting the subject matter
contained herein. There are no representations, agreements, arrangements or
understandings, oral or written, between the Parties relating to the subject
matter hereof that are not fully expressed herein.
[Signature
Page Follows]
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[SIGNATURE
PAGE TO AMENDMENT]
IN
WITNESS WHEREOF, the Parties have caused this Amendment to be duly executed
by
their respective authorized officers as of the date first above
written.
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By:
___________________________________
Name:
Xxxxxxxx Xxxxxxxx
Title:
President and Chief Executive Officer
CASTLERIGG
MASTER INVESTMENTS LTD.
By:
Xxxxxxx Asset Management Corp.
By:
___________________________________
Name:
Title:
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ACCEPTED
BY:
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RXELITE
HOLDINGS INC.
By:________________________________
Name:
Title:
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