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EXHIBIT 10.6
FIRST AMENDMENT DATED
AS OF DECEMBER 28, 1999
TO AMENDED AND RESTATED CREDIT AGREEMENT
DATED AS OF SEPTEMBER 15, 1999
THIS FIRST AMENDMENT, dated as of December 28, 1999 (this "Amendment"), is
entered into among AKORN, INC., a Louisiana corporation ("Akorn"), AKORN NEW
JERSEY, INC. ("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 (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 increase the Lender's Commitment,
extend the term of the Agreement and to otherwise amend certain provisions of
the Agreement.
C. Therefore, the parties hereto agree as follows:
1. AMENDMENTS TO THE AGREEMENT.
1.1. Section 1.1 of the Agreement. The definition of "Commitment" in
Section 1.1 of the Agreement is hereby amended as of the date hereof by deleting
the dollar amount "Twenty-Five Million United State [sic] Dollars ($25,000,000)"
appearing therein and substituting the dollar amount "Forty-Five Million United
States Dollars ($45,000,000)" therefor.
1.2. Section 1.1 of the Agreement. The definition of "Termination
Date" in Section 1.1 of the Agreement is hereby amended as of the date hereof by
deleting the date "December 29, 2000" appearing therein and substituting the
date "December 29, 2001" therefor.
1.3. Section 7.10(c) of the Agreement. Section 7.10(c) of the
Agreement is hereby amended and restated in its entirety as of the date hereof
as follows:
"Cash Flow Coverage Ratio. Borrowers and their Subsidiaries on a
consolidated basis shall maintain a ratio of (a) EBITDA, measured at the
end of each Fiscal Quarter for the four immediately preceding Fiscal
Quarters then ended to (b) the sum of (i) Debt Service, measured as of the
end of such Fiscal Quarter plus (ii) capital expenditures (determined in
accordance with GAAP) for the four immediately preceding Fiscal Quarters
then ended, measured at the end of such Fiscal Quarter, of at least
1.25:1.0."
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1.4. Exhibit B to the Agreement. Exhibit B to the Agreement is hereby
amended as of the date hereof to be in the form set forth as Exhibit B hereto.
2. WARRANTIES. To induce the Lender to enter into this Amendment, each
Borrower warrants that:
2.1. Authorization. Such Borrower is duly authorized to execute and
deliver this Amendment and the Replacement Note (as hereinafter defined) 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, and under the Replacement Note.
2.2. No Conflicts. The execution and delivery of this Amendment and
the Replacement Note, and the performance by such Borrower of its obligations
under the Agreement, as amended hereby, and under the Replacement Note, 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.
2.3. Validity and Binding Effect. The Agreement, as amended hereby,
is, and the Replacement Note when duly executed and delivered will be, a legal,
valid and binding obligation of such Borrower, enforceable against such Borrower
in accordance with its 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.
3. CONDITIONS PRECEDENT TO AMENDMENTS. The amendments contemplated by
Section 1 hereof are subject to the satisfaction of each of the following
conditions precedent:
3.1. 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) Replacement Note. A promissory note of the Borrowers (the
"Replacement Note"), substantially in the form set forth as Exhibit B hereto.
Upon receipt of the Replacement Note, the Lender will: (i) record the
aggregate unpaid principal amount of the Note dated September 15, 1999 (the
"Original Note") issued under the Agreement in its records or, at its option, on
the schedule attached to the Replacement Note as the aggregate unpaid principal
amount of the Replacement Note; (ii) xxxx the Original Note as replaced by the
Replacement Note; and (iii) return the Original Note to Akorn upon Akorn's
request. Thereafter, all references in the Agreement and in any and all
instruments or documents provided for therein or delivered or to be delivered
thereunder or in connection therewith to the Original Note shall be deemed
references to the Replacement Note. The replacement of the Original Note with
the Replacement Note shall not be construed (i) to deem paid or forgiven the
unpaid principal amount of, or unpaid accrued interest on, the Original Note
outstanding at the time of replacement, or (ii) to release, cancel, terminate or
otherwise adversely affect all or any part of any lien, mortgage, deed of trust,
assignment, security interest or other
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encumbrance heretofore granted to or for the benefit of the payee of the
Original Note which has not otherwise been expressly released.
(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 and the Replacement Note 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 Replacement Note.
(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 Replacement Note 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, XxxXxx & 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 3.2 and 3.3
hereof.
(f) Participant Consent. The Lender shall have obtained the consents
of its existing participants to the execution, delivery and performance of this
Amendment.
(g) Bank of America. The Lender and Bank of America, National
Association shall have entered a participation agreement in form and substance
satisfactory to the Lender.
(h) Other. Such other documents as the Lender may reasonably request.
3.2. No Default. As of the closing date hereof, no Event of Default or
Default under the Loan Documents shall have occurred and be continuing.
3.3. Warranties. As of the closing date hereof, the warranties in the
Loan Documents and in Section 2 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.
4. GENERAL.
4.1. 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 Replacement Note and any document required to
be furnished therewith.
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4.2. Law. THIS AMENDMENT AND THE REPLACEMENT NOTE SHALL BE CONSTRUED
IN ACCORDANCE WITH AND GOVERNED BY THE INTERNAL LAWS OF THE STATE OF ILLINOIS.
4.3. 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.
4.4. Confirmation of the Agreement. The Agreement, as amended hereby,
shall remain in full force and effect and is hereby ratified and confirmed in
all respects.
4.5. 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.
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:
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Title
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AKORN NEW JERSEY, INC.
By:
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Title
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THE NORTHERN TRUST COMPANY
By:
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Title
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EXHIBIT B
NOTE
$45,000,000 Chicago, Illinois
December 28, 1999
FOR VALUE RECEIVED, the undersigned, AKORN, INC., a Louisiana corporation
("Akorn"), and AKORN NEW JERSEY, INC., an Illinois corporation ("Akorn NJ"),
jointly and severally, promise to pay to the order of THE NORTHERN TRUST COMPANY
(the "Lender") on or before the Termination Date, the principal amount of
FORTY-FIVE MILLION DOLLARS ($45,000,000), or the amount outstanding as endorsed
on the grid attached to this Note (or recorded in the Lender's books and
records, if the Lender is the holder hereof). Such endorsement or recording by
the Lender shall, absent manifest error, be rebuttably presumptive evidence of
the principal balance due on this Note.
This Note evidences indebtedness incurred under that certain Amended and
Restated Credit Agreement, dated as of September 15, 1999 (as the same may be
subsequently amended, restated, supplemented or otherwise modified, the "Credit
Agreement"), among Akorn, Akorn NJ and the Lender, to which Credit Agreement
reference is hereby made for a statement of its terms and provisions, including
those under which this Note may be paid prior to its due date or have its due
date accelerated, and pursuant to which the applicable interest rate herein set
forth may be reduced. All capitalized terms used but not otherwise defined
herein shall have the meanings assigned to them in the Credit Agreement. This
Note constitutes a renewal and restatement of, and a replacement and substitute
for, the Note dated September 15, 1999, of Akorn and Akorn NJ payable to the
order of the Lender in the principal amount of $25,000,000 (the "Original
Note"). The indebtedness under the Original Note is continuing indebtedness
hereunder, and nothing herein shall be deemed to release or otherwise adversely
affect any lien, mortgage or security interest securing such indebtedness or any
rights of the Lender against any guarantor, surety or other party primarily or
secondarily liable for such indebtedness.
Unless or until this Note shall sooner become due and payable, whether by
acceleration or otherwise, the principal amount outstanding hereunder shall be
paid in accordance with the terms and conditions of the Credit Agreement. The
unpaid principal amount of this Note from time to time outstanding shall bear
interest from the date of this Note at the rate per annum set forth in the
Credit Agreement. Accrued interest on this Note shall be payable in accordance
with the terms of the Credit Agreement. After maturity, whether by acceleration
or otherwise, accrued interest shall be payable on demand. Interest on this Note
shall be computed for the actual number of days elapsed on the basis of a year
consisting of 360 days. Payments of both principal and interest are to be made
in immediately available funds in lawful money of the United States of America.
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Subject to the terms and conditions of the Credit Agreement, the
undersigned agree to pay all reasonable expenses, including reasonable
attorneys' fees and legal expenses, incurred by the holder of this Note in
attempting to collect any amounts payable hereunder. The undersigned irrevocably
waive presentment, protest, demand and notice of any kind in connection
herewith.
This Note is made under and governed by the internal laws of the State of
Illinois (without regard to conflict of laws provisions thereof), and shall be
deemed to have been executed in the State of Illinois.
AKORN, INC.,
a Louisiana corporation
By:
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Title:
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AKORN NEW JERSEY, INC.,
an Illinois corporation
By:
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Title:
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Schedule attached to Note dated December 28, 1999 of AKORN, INC. and AKORN NEW
JERSEY, INC., payable to the order of THE NORTHERN TRUST COMPANY.
LOANS AND PRINCIPAL PAYMENTS
--------------------- ------------------- ------------------- ------------------- ------------------- -------------------
Type of Loan & Amount of Unpaid Principal
Amount of Loan Applicable Principal Repaid Balance Notation Made By
Date Made Interest Rate
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The aggregate unpaid principal amount shown on this schedule shall be rebuttable
presumptive evidence of the principal amount owing and unpaid on this Note. The
failure to record the date and amount of any loan on this schedule shall not,
however, limit or otherwise affect the obligations of the Borrowers under the
Credit Agreement or under this Note or repay the principal amount of the loan
together with all interest accruing thereon.
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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 First Amendment dated as of December 28, 1999 (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 Replacement Note.
3. The execution and delivery of the Amendment and the Replacement Note,
the performance by each Borrower of its obligations under the Agreement, as
amended by the Amendment, and under Replacement Note, 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
Replacement Note 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 by bankruptcy, insolvency or other similar laws of general
application affecting the
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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 Replacement Note, 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 Replacement Note.
5. Neither the making of the Amendment or the Replacement Note nor
performance of the Agreement, as amended by the Amendment, or the Replacement
Note, 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: First Amendment dated as of December 28, 1999 (the "Amendment") to
Amended and Restated Agreement dated as of September 15, 1999 (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 3.1(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. No Event of Default or Default under the Loan Documents has occurred
and is continuing.
2. The warranties in the Loan Documents and in Section 2 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 December 28, 1999 AKORN, INC.
By: _______________________________
Title: Chief Financial Officer
AKORN NEW JERSEY, INC.
By: _______________________________
Title: Chief Financial Officer
