EXHIBIT 10.1
FIRST AMENDMENT TO PRE-NEGOTIATION AGREEMENT
THIS FIRST AMENDMENT TO PRE-NEGOTIATION AGREEMENT dated as of
October 18, 2002 (this "First Amendment"), by and among AKORN, INC., a Louisiana
corporation ("Akorn"), AKORN (NEW JERSEY), INC., an Illinois corporation ("Akorn
NJ") (Akorn and Akorn NJ being sometimes referred to herein individually as a
"Borrower" and collectively as the "Borrowers"), and THE NORTHERN TRUST COMPANY,
an Illinois banking corporation (the "Lender");
WITNESSETH:
WHEREAS, the parties heretofore entered into the
Pre-Negotiation Agreement dated as of September 20, 2002 (the "Prior
Agreement"); and
WHEREAS, the Borrowers have requested (i) a waiver with
respect to compliance with Section 6.9 of the Prior Agreement for the period
ending September 30, 2002, (ii) an amendment to the definition of "Borrowing
Base" and (iii) an amendment to Section 7.1 of the Prior Agreement;
WHEREAS, the Lender has agreed to the Borrowers' request, but
only on the terms set forth herein;
NOW, THEREFORE, in consideration of the premises and the
covenants, agreements and acknowledgments contained herein, and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereby agree as follows:
Section 1. Defined Terms. All capitalized terms used and not
otherwise defined in this First Amendment shall have the same meanings as in the
Prior Agreement.
Section 2. Waiver. The Lender hereby waives the Borrowing
Condition Failure arising from the Borrowers' noncompliance with Section 6.9 of
the Prior Agreement for the period ending September 30, 2002.
Section 3. Amendments.
3.1 Section 1.1 of the Prior Agreement is hereby amended by
replacing with definition of "Borrowing Base" with the following:
"Borrowing Base" shall mean, for any date, the product of (a)
0.80 and (b) Net Trade Accounts Receivable on such date.
3.2 Section 7.1 of the Prior Agreement is hereby amended to
read as follows"
7.1 Payments. The Lender (a) shall, and the Borrowers hereby
irrevocably authorize the Lender to, withdraw on the Agreement Closing Date all
cash amounts on deposit (including arising from the liquidation of any cash
equivalent then on deposit and from the transfer on such date of cash from the
Lock-Box Account to the Concentration Account) and
apply same to (i) the payment of the $200,000 fee referred to in Section 5.1(c)
and (ii) thereafter repay outstanding Tranche A Loans and (b) may in its sole
discretion (but shall be under no obligation to), and the Borrowers hereby
irrevocably authorize the Lender at any time and from time to time to, on each
Business Day after the Agreement Closing Date, withdraw all cash amounts on
deposit in the Concentration Account (including any cash transferred thereto on
such date from the Lock-Box Account) in excess of the Minimum Balance and apply
same to (i) first, to all Obligations (other than principal of the Loans) then
due and payable, (ii) second, to the outstanding principal amount of all Tranche
B Loans and (iii) thereafter, to the outstanding principal amount of all Tranche
A Loans.
Section 4. Pre-Negotiation Agreement and Documents to Remain
In Effect; Confirmation of Obligations; References. Except as expressly modified
and amended by this First Amendment, the Prior Agreement shall remain in full
force and effect as originally executed and delivered by the parties. In order
to induce the Lender to enter into this First Amendment, the Borrowers hereby
(i) confirm and reaffirm all of their obligations under the Documents, as
modified and amended as described above and under the Pre-Negotiation Agreement,
as modified and amended as described above; (ii) acknowledge and agree that the
Lender, by entering into this First Amendment, does not waive any existing or
future default or event of default under any of the Documents or the Prior
Agreement, or any rights, powers or remedies under any of the Documents or the
Pre-Negotiation Agreement, except as expressly provided in Section 2; (iii)
acknowledge and agree that the Lender has not heretofore waived any Borrowing
Condition Failure, or any rights or remedies under any of the Documents or the
Prior Agreement; and (iv) acknowledge that they do not have any defense, set-off
or counterclaim to the payment or performance of any of their obligations under
the Documents or the Prior Agreement, as amended hereby. All references to the
Prior Agreement shall henceforth be deemed to refer to the Prior Agreement as
modified by this First Amendment and as hereafter modified by any amendment,
modification or supplement thereto.
Section 5. Confirmation of Certifications, Representations
and Warranties. In order to induce the Lender to enter into this First Amendment
the Borrowers hereby certify, represent and warrant to the Lender that, except
as otherwise disclosed to the Lender in writing prior to the date hereof,
including in the Pre-Negotiation Agreement and in the Exhibits and Schedules
attached thereto and/or in documents submitted to the Lender prior to the date
hereof (including, but not limited to, any and all financial statements and
reports, budgets, statements of cash flow and governmental reports and filings)
(collectively referred to herein as "Disclosures"), all certifications,
representations and warranties contained in the Documents and in the
Pre-Negotiation Agreement and in all certificates heretofore delivered to the
Lender are true and correct as of the date hereof in all material respects, and,
subject to such Disclosures, all such certifications, representations and
warranties are hereby remade and made to speak as of the date of this First
Amendment.
Section 6. RELEASE. EACH BORROWER ON BEHALF OF ITSELF AND ITS
AFFILIATES, SUBSIDIARIES, SUCCESSORS, ASSIGNS, PRINCIPALS, SHAREHOLDERS,
BENEFICIARIES, OFFICERS, MANAGERS, DIRECTORS, AGENTS, REPRESENTATIVES, ADVISORS,
EMPLOYEES AND ATTORNEYS, HEREBY JOINTLY AND SEVERALLY RELEASES, WAIVES AND
FOREVER DISCHARGES EACH OF THE LENDER AND ITS AFFILIATES, SUBSIDIARIES,
SUCCESSORS, ASSIGNS,
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PRINCIPALS, SHAREHOLDERS, BENEFICIARIES, OFFICERS, MANAGERS, DIRECTORS, AGENTS,
REPRESENTATIVES, ADVISORS, EMPLOYEES AND ATTORNEYS OF, FROM, AND WITH RESPECT TO
ANY AND ALL MANNER OF ACTIONS, CAUSES OF ACTIONS, SUITS, DISPUTES, CLAIMS,
COUNTERCLAIMS AND/OR LIABILITIES, CROSS CLAIMS, DEFENSES THAT ARE KNOWN OR
UNKNOWN, SUSPECTED OR UNSUSPECTED, PAST OR PRESENT, ASSERTED OR UNASSERTED,
CONTINGENT OR LIQUIDATED, WHETHER OR NOT WELL FOUNDED IN FACT OR LAW, WHETHER IN
CONTRACT, IN TORT OR OTHERWISE, AT LAW OR IN EQUITY, BASED UPON, RELATING TO OR
ARISING OUT OF ANY AND ALL TRANSACTIONS, RELATIONSHIPS OR DEALINGS WITH OR LOANS
MADE TO THE BORROWERS PURSUANT TO THE LOAN DOCUMENTS AND/OR THE PRIOR AGREEMENT
PRIOR TO THE EFFECTIVENESS HEREOF.
Section 7. Entire Agreement. This First Amendment sets forth
all of the covenants, promises, agreements, conditions and understandings of the
parties relating to the subject matter of this First Amendment, and there are no
covenants, promises, agreements, conditions or understandings, either oral or
written, between them relating to the subject matter of this First Amendment
other than as are herein set forth.
Section 8. Successors. This First Amendment shall inure to
the benefit of and shall be binding upon the parties and their respective
successors, assigns and legal representatives.
Section 9. Severability. In the event any provision of this
First Amendment shall be held invalid or unenforceable by any court of competent
jurisdiction, such holding shall not invalidate or render unenforceable any
other provision hereof.
Section 10. Amendments, Changes and Modifications. This First
Amendment may be amended, changed, modified, altered or terminated only by a
written instrument executed by all of the parties hereto:
Section 11. Construction.
(a) The words "hereof," "herein," and "hereunder,"
and other words of a similar import refer to this First Amendment as a
whole and not to the individual Sections in which such terms are used.
(b) References to Sections and other subdivisions of
this First Amendment are to the designated Sections and other
subdivisions of this First Amendment as originally executed.
(c) The headings of this First Amendment are for
convenience only and shall not define or limit the provisions hereof.
(d) Where the context so requires, words used in
singular shall include the plural and vice versa, and words of one
gender shall include all other genders.
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(e) Each party to this First Amendment and legal
counsel for each party have participated in the drafting of this First
Amendment, and accordingly the general rule of construction to the
effect that any ambiguities in a contract are to be resolved against
the party drafting the contract shall not be employed in the
construction and interpretation of this First Amendment.
Section 12. Execution of Counterparts. This First Amendment
may be simultaneously executed in several counterparts, each of which shall be
an original and all of which shall constitute but one and the same instrument.
Section 13. Governing Law. This First Amendment shall be
governed by and be construed and enforced in accordance with the laws of the
State of Illinois.
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IN WITNESS WHEREOF, the parties hereto have caused this First
Amendment to be executed by their respective officers thereunto duly authorized,
as of the date first written above.
Address for Notices: AKORN, INC.
0000 Xxxxxxxxx Xxxxx
Xxxxxxx Xxxxx, XX 00000 By /s/ Xxx Xxxxxxx
Attention: Chief Financial Officer ---------------
Telecopier No.: (000) 000-0000 Name: Xxx Xxxxxxx
Telephone No.: (000) 000-0000 Title: C.F.O.
AKORN (NEW JERSEY), INC.
By /s/ Xxx Xxxxxxx
---------------
Name: Xxx Xxxxxxx
Title: C.F.O.
00 Xxxxx XxXxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000 THE NORTHERN TRUST COMPANY
Attention: Xxxx Xxxxxxxx
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000 By Xxxx Xxxxxxxx
--------------
Name: Xxxx Xxxxxxxx
With a copy to Title:
-------------------------
White & Case LLP
000 X. Xxxxxxxx Xxxx., Xxxxx 0000
Xxxxx, XX 00000
Attention: Xxxx X. Xxxxxxxxxx, Esq.
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