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EXHIBIT 10.64
SUBORDINATION AGREEMENT
Dated as of March 29, 2000
Among
XXXXXX PHARMACEUTICALS, INC.,
XXXXXX DRUG CO., INC.,
The Existing Holders
(as defined herein)
and
THE GRANTORS AND GUARANTORS NAMED HEREIN
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TABLE OF CONTENTS
Page
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ARTICLE I DEFINITIONS........................................................................................2
SECTION 1.1. Definitions of Certain Terms..............................................................2
SECTION 1.2. Terms Generally...........................................................................3
ARTICLE II STANDBY AND SUBORDINATION..........................................................................4
ARTICLE III PAYMENTS...........................................................................................4
ARTICLE IV SECURITY INTEREST SUBORDINATION....................................................................5
ARTICLE V DISPOSITION OF COLLATERAL..........................................................................5
ARTICLE VI SENIOR DEBT........................................................................................5
ARTICLE VII DEFAULT............................................................................................6
ARTICLE VIII NO COMMITMENT......................................................................................6
ARTICLE IX NO CONTEST.........................................................................................6
ARTICLE X FINANCIAL CONDITION OF BORROWER....................................................................6
ARTICLE XI REVIVOR............................................................................................6
ARTICLE XII REPRESENTATIONS AND WARRANTIES.....................................................................7
SECTION 12.1. Representations and Warranties of the Existing Holders....................................7
SECTION 12.2. Representations and Warranties of Each Party..............................................7
ARTICLE XIII EXISTING INTERCREDITOR AGREEMENT...................................................................7
ARTICLE XIV MISCELLANEOUS......................................................................................7
SECTION 14.1. No Individual Action......................................................................7
SECTION 14.2. Successors and Assigns....................................................................7
SECTION 14.3. Notices...................................................................................7
SECTION 14.4. Termination...............................................................................8
SECTION 14.5. Applicable Law............................................................................8
SECTION 14.6. Amendments and Waivers of Agreement and Support Documents.................................8
SECTION 14.7. Waiver of Rights..........................................................................8
SECTION 14.8. Severability..............................................................................8
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SECTION 14.9. Waiver of Jury Trial.......................................................................9
SECTION 14.10. Counterparts; Effectiveness................................................................9
SECTION 14.11. Section Headings...........................................................................9
SECTION 14.12. Complete Agreement.........................................................................9
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SUBORDINATION AGREEMENT
This SUBORDINATION AGREEMENT (the "Agreement") is dated as of March 29,
2000 and is entered into by and among (i) XXXXXX PHARMACEUTICALS, INC., a
Nevada corporation ("Xxxxxx"), (ii) XXXXXX DRUG CO., INC., a New York
corporation (the "Company"), (iii) the holders of the 5% Convertible Senior
Secured Debentures issued by the Company pursuant to the Debenture and Warrant
Purchase Agreement, dated March 10, 1998 (the "Xxxxx Debenture Agreement"), by
and among the Company, Xxxxx Partners III, L.P. and the other signatories
thereto, listed on Schedule 4 attached hereto (such holders, the "XXXXX INVESTOR
GROUP"), (iv) the holders of the 5% Convertible Senior Secured Debentures issued
by the Company pursuant to the Debenture and Warrant Purchase Agreement, dated
May 26, 1999 (the "Oracle Debenture Agreement"), by and among the Company,
Oracle Strategic Partners, L.P. and the other signatories thereto, listed on
Schedule 4 attached hereto (such holders, the "ORACLE INVESTOR GROUP"), and (v)
the Grantors and Guarantors listed on the signature pages hereof. Certain
capitalized terms used herein have the meanings ascribed thereto in Section
1.1.
RECITALS
X. Xxxxxx and the Company have entered into that certain Loan
Agreement, dated as of March 29, 2000 (the "Loan Agreement"), pursuant to which
Xxxxxx agreed to loan the Company the principal amount of Seventeen Million Five
Hundred Thousand Dollars ($17,500,000) (the "Loan").
B. The Company has issued its 5% Convertible Senior Secured
Debentures Due March 15, 2003 to the Xxxxx Investor Group pursuant to the Xxxxx
Debenture Agreement (such debentures, the "Xxxxx Debentures") and to the Oracle
Investor Group pursuant to the Oracle Debenture Agreement (such debentures, the
"Oracle Debentures," and collectively with the Xxxxx Debentures, the "Existing
Debentures"). The holders of the Existing Debentures as of a given date are
sometimes referred to herein as the "Existing Holders", and the Existing Holders
and Xxxxxx are sometimes referred to herein collectively as the "Secured
Creditors".
C. The Company and certain of its affiliates have entered into the
Existing Security Documents and Existing Guaranty Agreements pursuant to which
the Company and such affiliates secured the Company's obligations under the
Existing Debentures and guarantied the payment and performance of such
obligations.
D. In connection with the execution of the Loan Agreement, the
Company and Xxxxxx will be entering into new security documents (the "Xxxxxx
Security Documents").
E. As an inducement to make the Loan, the Xxxxx Investor Group and
the Oracle Investor Group agree that (i) as among the Secured Creditors,
Xxxxxx'x security interest in the Collateral shall rank first in priority among
the Secured Creditors; and (ii) proceeds received from enforcement of the Xxxxxx
Security Documents and the Existing Security Documents will be applied first to
the payment of the Company's obligations in respect of the Loan, and second, to
the extent of any remaining proceeds, to the payment of the Company's
obligations in respect of the Existing Debentures. The Company's and its
affiliates' obligations under the Loan and the Existing Debentures are sometimes
referred to collectively herein as the "Secured Obligations".
F. The parties hereto desire to set forth their agreement regarding
the priority of Xxxxxx'x security interest and the application to the Secured
Obligations of cash received by the
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Secured Creditors from dispositions of Collateral and the enforcement of the
Existing Security Documents and the Xxxxxx Security Documents and the agreement
of Xxxxxx, the Xxxxx Investor Group and the Oracle Investor Group as to the
decisions relating to the exercise of remedies under this Agreement and the
Existing Security Documents and the Xxxxxx Security Documents.
G. It is a condition precedent to the effectiveness of the Loan
Agreement that Xxxxxx, the Xxxxx Investor Group, the Oracle Investor Group, the
Company and its affiliates shall have entered into this Agreement.
In consideration of the above recitals and the mutual covenants
contained herein, Xxxxxx, the Xxxxx Investor Group, the Oracle Investor Group,
the Company and the Grantors and Guarantors hereby agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1. DEFINITIONS OF CERTAIN TERMS. As used
herein, the following terms have the meanings set forth below:
"Agreement" is defined in the Preamble hereto.
"Business Day" shall mean any day other than a Saturday,
Sunday or other day on which commercial banks are authorized or required to be
closed in New York.
"Closing Date" means the date on which this Agreement
becomes effective in accordance with Section 14.10.
"Collateral" means all the properties and assets of
whatever nature, tangible or intangible, now owned or existing or hereafter
acquired or arising, of any of the Grantors on or in which the Secured Creditors
have been granted a lien or security interest pursuant to any of the Existing
Security Documents or Xxxxxx Security Documents or this Agreement.
"Event of Default" means any Event of Default under and
as defined in the Loan Agreement or Xxxxxx Security Documents.
"Existing Guaranty Agreements" means the guaranties and
agreements identified on Schedule 1 hereto.
"Existing Holders" is defined in the Recitals hereto.
"Existing Intercreditor Agreement" means that certain
Intercreditor Agreement, effective May 26, 1999, by and among Xxxxx Partners
III, L.P., Xxxxx Partners International III, L.P., Xxxxx Employee Fund III,
L.P., and Oracle Strategic Partners, L.P.
"Existing Security Documents" means the guaranties,
mortgages, deeds of trust and security agreements identified on Schedule 1 and
Schedule 2 hereto.
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"Grantors" means the Company, Xxxxxx Pharmaceutical,
Inc., a Delaware corporation and Houba Inc., an Indiana corporation, and each
other subsidiary or affiliate of the Company that is or becomes a party to any
Security Document.
"Guarantors" means Xxxxxx Pharmaceutical, Inc., a
Delaware corporation and Houba Inc., an Indiana corporation, and each other
person that is or becomes a party to any Guaranty Agreement.
"Loan" is defined in the Recitals hereto.
"Loan Agreement" is defined in the Recitals hereto.
"Note" means that certain Secured Promissory Note, dated
March __, 2000, executed by the Company in favor of Xxxxxx in the principal
amount of $17,500,000.
"Notice of Default" means a notice delivered by any
Secured Creditor stating that an Event of Default has been declared and setting
forth in reasonable detail the date and nature of such Event of Default.
"Secured Creditors" is defined in the Recitals hereto.
"Secured Obligations" is defined in the Recitals hereto.
"Senior Debt" means, at any time, the sum (without
duplication) of the following:
(i) the aggregate principal amount of the Loan
outstanding at such time and the aggregate amount of accrued unpaid interest
thereon at such time; and
(ii) the reasonable costs and expenses of
enforcement by Xxxxxx of its rights and collection with respect to the Loan.
"Subordinated Debt" means, at any time, the sum
(without duplication) of the following:
(i) the aggregate principal amount of the Existing
Debentures outstanding at such time and the aggregate amount of accrued unpaid
interest thereon at such time;
(ii) the aggregate amount of accrued and unpaid fees
payable to the Existing Holders, or any of them, under or in connection with the
Existing Debentures; and
(iii) the aggregate amount of all other monetary
obligations of the Company, the Guarantors and the Grantors that are accrued
and owing at such time to the Existing Holders, or any of them, under the
Existing Debentures (including all security, guaranty and other documents issued
or executed in connection with and on the same date as the Existing Debentures)
and the Existing Security Documents, including indemnification and expense
reimbursement obligations thereunder.
"Xxxxxx Security Documents" means the guaranties,
mortgages, deeds of trust and security agreements identified on Schedule 5.
SECTION 1.2. TERMS GENERALLY. The definitions in Section 1.1 shall
apply equally to both the singular and plural forms of the terms defined.
Whenever the context may require, any pronoun
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shall include the corresponding masculine, feminine and neuter forms. The words
"include," "includes" and "including" shall be deemed to be followed by the
phrase "without limitation." All references herein to Articles and Sections
shall be deemed references to Articles and Sections of this Agreement unless
the context shall otherwise require.
ARTICLE II
STANDBY AND SUBORDINATION
Except as set forth in Article 3 of this Agreement, the Existing
Holders shall not accept or receive, by setoff or in any other manner, as
against the Company or the Guarantors, the whole or any part of the Subordinated
Debt owing to the Existing Holders from the Company or the Guarantors, or any of
their respective predecessors, successors or assigns, including, without
limitation, a receiver, trustee or debtor in possession under the Existing
Debentures or any note, guaranty or other instrument or agreement executed by
the Company or the Guarantors in favor of the Existing Holders, or otherwise,
whether the sums represent principal, interest, costs, attorneys' fees or
charges, or other obligations due or not due, whether incurred directly or
indirectly, and whether absolute or contingent unless and until the Senior Debt
has been fully paid and satisfied.
ARTICLE III
PAYMENTS
So long as no Event of Default shall have occurred and be continuing
under the Loan Agreement, the Company may pay to the Existing Holders, and the
Existing Holders may accept or receive regularly scheduled payments in respect
of the Subordinate Debt; provided, however, that the aggregate amount of
payments (in any form) which may be made to and accepted by the Existing Holders
shall not exceed the sum of Six Hundred and Twenty-Five Thousand Dollars
($625,000) on any Interest Payment Date (as such term is defined in the Existing
Debentures) and any arrearages thereon, and provided, further, however, that
certain holders of the Existing Debentures designated on Schedule 4 attached
hereto have agreed that, on each Interest Payment Date while any of the Senior
Debt is outstanding , such holders shall receive such payments in the capital
stock and/or like debenture instruments of Borrower and not in cash or cash
equivalents. Xxxxxx shall provide notice to Oracle Strategic Partners, L.P.,
Xxxxx Partners III, L.P., Xxxxx Employee Fund III, L.P., and Xxxxx Partners
International III, L.P. of any Event of Default prior to its enforcement of its
remedies hereunder, provided however, that nothing herein shall impair Xxxxxx'x
ability to act immediately after transmitting such notice. Except as to payments
which the Existing Holders are permitted to accept or receive pursuant to this
Article 3, the Existing Holders shall receive and hold all other payments or
distributions received prior to the satisfaction of the Senior Debt in trust for
the benefit of Xxxxxx and shall forthwith deliver the same to Xxxxxx in the same
form received (except for the endorsement or assignment in favor of Xxxxxx where
necessary) for application to the Senior Debt and, until so delivered, shall not
be commingled with other funds or property of the Existing Holders. Upon any
Event of Default under the Existing Debentures or the Support Documents, any
Existing Holder may file, prosecute and obtain a judgment in a lawsuit against
the Company or the Guarantors; provided, however, that the Existing Holders
shall not commence foreclosure on any judgment lien obtained in connection
therewith or otherwise exercise any remedy with respect thereto, including,
without limitation, filing any petition in bankruptcy with respect to the
Company or the Guarantors, unless and until all Senior Debt has been fully paid
and satisfied.
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ARTICLE IV
SECURITY INTEREST SUBORDINATION
All security interests acquired by Xxxxxx through the Xxxxxx Security
Documents, to the extent securing the Senior Debt, in the Collateral
shall at all times be prior and superior to any lien, ownership interest,
security interest or other interest or claim now held or hereafter acquired by
the Existing Holders in the Collateral (the "Subordinate Interest"). Said
priority shall be applicable irrespective of the time or order of attachment or
perfection of any security interest or the time or order of filing of any
financing statements or other documents, or any statutes, rules of law, or court
decisions to the contrary. Upon any disposition of any of the Collateral by
Xxxxxx, the Existing Holders agree, if requested by Xxxxxx, to execute and
immediately deliver any and all releases or other documents or agreements which
Xxxxxx deems necessary to accomplish a disposition thereof free of the
Subordinate Interest.
ARTICLE V
DISPOSITION OF COLLATERAL
The Existing Holders agree that, until Xxxxxx has received payment in
full of all Senior Debt, Xxxxxx may dispose of, and exercise any other rights
with respect to, any or all of the Collateral, free of the Subordinate Interest;
provided, that the Existing Holders retain any rights they may have as a junior
secured creditor with respect to the surplus, if any, arising from any such
disposition or enforcement. The Existing Holders agree that any funds of the
Company or the Guarantors which it obtains through the exercise of any right of
setoff or other similar right constitute Collateral, and the Existing Holders
shall immediately pay such funds to Xxxxxx to be applied to the outstanding
Senior Debt.
ARTICLE VI
SENIOR DEBT
Until Xxxxxx has received payment in full of all Senior Debt, the
Existing Holders agree that, in addition to any other rights that Xxxxxx may
have, at law or in equity, Xxxxxx may at any time, and from time to time,
without the Existing Holders' consent and without notice to the Existing
Holders, renew or extend, but not increase, any of the Senior Debt or that of
any other person at any time directly or indirectly liable for the payment of
any Senior Debt, accept partial payments of the Senior Debt, settle, release (by
operation of law or otherwise), compound, compromise, collect or liquidate any
of the Senior Debt, change, alter or vary the interest charge on, or any other
terms or provisions of the Senior Debt or any present or future instrument,
document or agreement between the Senior Lender and the Company or the
Guarantors, and take any other action or omit to take any other action with
respect to the Senior Debt or the Collateral as Xxxxxx may xxxx necessary or
advisable in its sole discretion. The Existing Holders waive any right to
require Watson to marshal any assets in favor of the Existing Holders or against
or in payment of any or all of the Senior Debt. The Existing Holders further
waive any defense arising by reason of any claim or defense based upon an
election of remedies by Xxxxxx which in any manner impairs, affects, reduces,
releases, destroys and/or extinguishes any of the Existing Holders' subrogation
rights, rights to proceed against the Company or the Guarantors for
reimbursement, and/or any other rights of any of the Existing Holders.
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ARTICLE VII
DEFAULT
The Existing Holders shall promptly give Xxxxxx written notice of any
Event of Default by the Company or the Guarantors on any obligation secured
by the Subordinate Interest.
ARTICLE VIII
NO COMMITMENT
It is understood and agreed that this Agreement shall in no way be
construed as a commitment or agreement by Xxxxxx to continue financing
arrangements with the Company or the Guarantors.
ARTICLE IX
NO CONTEST
The Existing Holders shall not contest the validity, perfection,
priority or enforceability of any lien or security interest granted to Xxxxxx to
secure the Senior Debt pursuant to the Xxxxxx Security Documents.
ARTICLE X
FINANCIAL CONDITION OF BORROWER
The Existing Holders are presently informed of the financial condition
of the Company and of all other circumstances which a diligent inquiry
would reveal and which bear upon the risk of non-payment of the Senior Debt and
the Subordinated Debt. The Existing Holders acknowledge that they are each
entitled to keep themselves informed under the terms of the Existing Debentures
and the Existing Security Documents as to the Company's financial condition and
all other circumstances which bear upon the risk of non-payment of the Senior
Debt and the Subordinated Debt or the Existing Holders' compliance with their
obligations hereunder. Except as otherwise specifically provided herein, the
Existing Holders waive any right to require Xxxxxx to disclose to them any
information which Xxxxxx may now or hereafter acquire concerning the Company or
the Guarantors.
ARTICLE XI
REVIVOR
If any payment made on any of the Senior Debt shall for any reason be
required to be returned by Xxxxxx, whether on the ground that such payment
constituted a preference or for any other reason, then for purposes of this
Agreement, such payment on the Senior Debt shall be treated as not having been
made, and this Agreement shall in all respects be effective with respect to such
Senior Debt as though such payment had not been made.
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ARTICLE XII
REPRESENTATIONS AND WARRANTIES
SECTION 12.1. REPRESENTATIONS AND WARRANTIES OF THE EXISTING HOLDERS.
The Existing Holders represent and warrant that they have not heretofore
transferred or assigned the Subordinate Interest or any financing statement
naming any Grantor as debtor and any Existing Holder as secured party, and that
they will not do so without first delivering a copy of this Agreement to the
proposed transferee or assignee.
SECTION 12.2. REPRESENTATIONS AND WARRANTIES OF EACH PARTY. Each party
hereto represents and warrants to the other parties hereto that (a) the
execution, delivery and performance of this Agreement (i) have been duly
authorized by all requisite corporate action on its part and (ii) will not
contravene any provision of its charter or by-laws or any order of any court or
other governmental authority having applicability to it or any applicable law,
and (b) this Agreement has been duly executed and delivered by it and
constitutes its legal, valid and binding obligation.
ARTICLE XIII
EXISTING INTERCREDITOR AGREEMENT
The parties hereto acknowledge the existence of the Existing
Intercreditor Agreement. Nothing herein shall be deemed to rescind any portion
of the Existing Intercreditor Agreement and such agreement shall remain in full
force except as modified by the terms of this Agreement.
ARTICLE XIV
MISCELLANEOUS
SECTION 14.1. NO INDIVIDUAL ACTION. No Secured Creditor may require any
other Secured Creditor to take or refrain from taking any action
hereunder or under any of the Support Documents or with respect to any of the
Collateral except as and to the extent expressly set forth in this Agreement.
SECTION 14.2. SUCCESSORS AND ASSIGNS. This Agreement shall be binding
on and inure to the benefit of each of the Secured Creditors and their
respective successors and permitted assigns; provided, however, that, except as
provided in the next sentence, no Existing Holder may assign its rights or
obligations hereunder. The rights and obligations of any Existing Holder under
this Agreement may be assigned, and the term "Existing Holder" as used in this
Agreement shall include, any assignee, transferee or successor of such Existing
Holder under the Existing Debentures by the execution of a Joinder Agreement by
such assignee, transferee or successor, and any such assignee, transferee or
successor shall thereupon become an Existing Holder under and a party to this
Agreement. This Agreement is not intended to confer any benefit on, or create
any obligation of any Secured Creditor to, the Company or any third party,
including the Guarantors and other Grantors.
SECTION 14.3. NOTICES. Notices and other communications provided for
herein or in any Xxxxxx Security Document shall be in writing and shall
be delivered by hand or overnight courier service, mailed or sent by telex or
telecopy, as follows:
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(a) if to any Existing Holder, to it as set forth
opposite its signature on the signature pages hereto;
(b) if to Xxxxxx, to 000 Xxxxxx Xxxxxx, Xxxxxx,
Xxxxxxxxxx, 00000, fax no. (000) 000-0000, to the attention of Xx. Xxxxxx
Xxxxxxx, General Counsel; and
(c) if to the Company, to 000 Xx. Xxxxxxxxxx Xxxx,
Xxxxxxxx, Xxxxxxxx 00000, fax no. (000) 000-0000, to the attention of Xx.
Xxxxxxx Xxxxxxx, Chief Executive Officer any Grantor, or any Guarantor, to it as
specified in the Support Document to which it is a party.
(d) if to the other Grantors and Guarantors,
as applicable to: (i) Houba, Inc., 00000 Xxxxx Xxxx, #00, Xxxxxx, Xxxxxxx
00000, fax no: ____________, to the attention of Xx. Xxxxxxx Xxxxxxx, Chief
Executive Officer; or (ii) Xxxxxx Pharmaceutical, Inc., 000 Xx. Xxxxxxxxxx
Xxxx, Xxxxxxxx, Xxxxxxxx 00000, fax no. (000) 000-0000, to the attention of Xx.
Xxxxxxx Xxxxxxx, Chief Executive Officer. All notices and other communications
given to any party hereto in accordance with the provisions of this Agreement
shall be deemed to have been given on the date of receipt if delivered by hand
or overnight courier service or sent by telex or telecopy, or on the date five
Business Days after dispatch by certified or registered mail if mailed, in each
case delivered, sent or mailed (properly addressed) to such party as provided
in this Section 14.3 or in accordance with the latest unrevoked direction from
such party given in accordance with this Section 14.3.
SECTION 14.4. TERMINATION. This Agreement shall terminate automatically
upon the indefeasible payment in full of the Senior Debt.
SECTION 14.5. APPLICABLE LAW. THIS AGREEMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF CALIFORNIA, WITHOUT
REFERENCE TO ITS CHOICE OF LAW RULES.
SECTION 14.6. AMENDMENTS AND WAIVERS OF AGREEMENT AND SUPPORT DOCUMENTS.
No amendment or waiver of any provision of this Agreement or any Support
Document shall in any event be effective unless the same shall be in writing and
signed by the Secured Creditors; provided, however, that no such amendment or
waiver which materially affects the duties of the Company shall be effective
without the prior written consent of the Company. No waiver of any provision of
this Agreement and no consent to any departure by any party hereto from the
provisions hereof shall be effective unless such waiver or consent shall be set
forth in a written instrument executed by the party against which it is sought
to be enforced, and then such waiver or consent shall be effective only in the
specific instance and for the purpose for which given. No notice to or demand on
any party hereto in any case shall entitle such party to any other or further
notice or demand in the same, similar or other circumstances.
SECTION 14.7. WAIVER OF RIGHTS. Neither any failure nor any delay on the
part of any party hereto in exercising any right, power or privilege
hereunder shall operate as a waiver thereof, and a single or partial exercise
thereof shall not preclude any other or further exercise or the exercise of any
other right, power or privilege.
SECTION 14.8. SEVERABILITY. In case any one or more of the provisions
contained in this Agreement should be invalid, illegal or unenforceable
in any respect, the validity, legality and
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enforceability of the remaining provisions contained herein shall not in
any way be affected or impaired thereby. The parties shall endeavor in good
faith negotiations to replace the invalid, illegal or unenforceable provisions
with valid provisions the economic effect of which comes as close as possible to
that of the invalid, illegal or unenforceable provision.
SECTION 14.9. WAIVER OF JURY TRIAL. NEITHER THE COMPANY, THE SECURED
CREDITORS OR ANY GRANTOR OR GUARANTOR, NOR ANY ASSIGNEE, SUCCESSOR, HEIR
OR PERSONAL REPRESENTATIVE OF THE COMPANY, ANY SECURED CREDITOR, OR ANY GRANTOR
OR GUARANTOR SHALL SEEK A JURY TRIAL IN ANY LAWSUIT, PROCEEDING, COUNTERCLAIM OR
ANY OTHER LITIGATION PROCEDURE BASED UPON OR ARISING OUT OF OR OTHERWISE
RELATING TO THIS AGREEMENT, THE SUPPORT DOCUMENTS, ANY RELATED INSTRUMENT OR
AGREEMENT, ANY COLLATERAL FOR ALL OR ANY PART OF THE LOAN AGREEMENT OBLIGATIONS
OR EXISTING DEBENTURE OBLIGATIONS, OR THE DEALINGS OR THE RELATIONSHIP BETWEEN
OR AMONG SUCH PERSONS. THE COMPANY, EACH SECURED CREDITOR AND EACH GRANTOR AND
GUARANTOR HEREBY WAIVE ANY AND ALL RIGHT TO ANY SUCH JURY TRIAL. NEITHER THE
COMPANY, ANY SECURED CREDITOR NOR ANY GRANTOR OR GUARANTOR SHALL SEEK TO
CONSOLIDATE ANY SUCH ACTION IN WHICH A JURY TRIAL HAS BEEN WAIVED WITH ANY OTHER
ACTION IN WHICH A JURY TRIAL CANNOT OR HAS NOT BEEN WAIVED. THE PROVISIONS OF
THIS SECTION HAVE BEEN FULLY DISCUSSED BY THE PARTIES HERETO, AND THE PROVISIONS
OF THIS AGREEMENT SHALL BE SUBJECT TO NO EXCEPTIONS. NO PARTY HAS IN ANY WAY
AGREED WITH OR REPRESENTED TO ANY OTHER PARTY THAT THE PROVISIONS OF THIS
SECTION WILL NOT BE FULLY ENFORCED IN ALL INSTANCES.
SECTION 14.10. COUNTERPARTS; EFFECTIVENESS. This Agreement may be
executed in two or more counterparts, each of which shall constitute an
original, but all of which, when taken together, shall constitute but one
instrument. This Agreement shall become effective on the date (the "Closing
Date") this Agreement shall have been executed and delivered by each party
identified in the introductory paragraph hereto.
SECTION 14.11. SECTION HEADINGS. The Article and Section headings used
herein are for convenience of reference only and are not to affect the
construction of or be taken into consideration in interpreting this Agreement.
SECTION 14.12. COMPLETE AGREEMENT. This Agreement constitutes the entire
agreement between the parties hereto with respect to the subject matter hereof
and supersedes all prior representations, negotiations, writings, memoranda and
agreements. To the extent any provision of this Agreement conflicts with any of
the documents referenced herein, the provisions of this Agreement shall be
controlling.
[signature pages to follow]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed by their duly authorized officers all as of the day and year
first above written.
"XXXXXX" "THE COMPANY"
XXXXXX PHARMACEUTICAL, INC., XXXXXX DRUG CO., INC.,
a Nevada corporation a New York corporation
/s/ Xxxxxx X. Xxxxxxx /s/ Xxxxxxx Xxxxxxx
---------------------- ----------------------
By: By:
Its: Senior Vice President Its: Chief Executive Officer
"GRANTOR/GUARANTOR" "GRANTOR/GUARANTOR"
HOUBA, INC., XXXXXX PHARMACEUTICAL, INC.,
an Indiana corporation a Delaware corporation
/s/ Xxxxxxx Xxxxxxx /s/ Xxxxxxx Xxxxxxx
---------------------- ----------------------
By: By:
Its: Chief Executive Officer Its: Chief Executive Officer
ORACLE STRATEGIC PARTNERS, L.P. GALEN PARTNERS III, L.P.
By: Oracle Strategic Capital L.L.C., By: Claudius, L.L.C., General Partner
General Partner 000 Xxxxx Xxxxxx, 0xx Xx.
000 Xxxxx Xxxxxx Xxx Xxxx, Xxx Xxxx 00000
Xxx Xxxx, Xxx Xxxx 00000
/s/ Xxxxx Xxxxxxxx /s/ Xxxxxx Xxxxxxxxxxx
---------------------- ----------------------
By: By:
Its: Managing Member Its: General Partner
XXXXX EMPLOYEE FUND III, L.P.
By: Wesson Enterprises, Inc. XXXXX PARTNERS INTERNATIONAL, III, L.P.
000 Xxxxx Xxxxxx, 0xx Xxxxx By: Claudius, L.L.C., General Partner
Xxx Xxxx, Xxx Xxxx 00000 000 Xxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
/s/ Xxxxx X. Xxxxxx /s/ Xxxxxx Xxxxxxxxxxx
---------------------- ----------------------
By: By:
Its: General Partner Its: General Partner
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XXXX XXXXX XXXXXXX XXXXX
00 Xxxxxx Xxxxxx 000 Xxxxx Xxxx
Xxxxxxx, Xxxxx Xxxxxx 00000 Xxxxxx, Xxxxxxxxxxxx 00000
/s/ Xxxx Xxxxx /s/ Xxxxxxx Xxxxx
---------------------------- ----------------------------
XXXXXXX XXXXXXXX XXXXX XXXXXXXX
0000 Xxxx Xxxxx Xxxx 0000 Xxxx Xxxxx Xxxx
Xxxxxxxx, Xxxxxxxxxxxx 00000 Xxxxxxxx, Xxxxxxxxxxxx 00000
/s/ Xxxxxxx Xxxxxxxx /s/ Xxxxx Xxxxxxxx
---------------------------- ----------------------------
XXXX XXXX XXXXXX XXXXX
c/o D.R. International 000 Xxxxxx Xxxx
0000 Xx. Xxxxxxxx Xxxxxx Xxxxxx, Xxxxxxxxxxxx 00000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
/s/ Xxxx Xxxx /s/ Xxxxxx Xxxxx
---------------------------- ----------------------------
XXXXXXX XXXX XXXXXX X. XXXXX & CO., INC., TTEE
c/o Xxxxxx Xxxx FBO Xxxxxxx X. Xxxxxxx XXX
000 Xxxx Xxxxxx c/x Xxxxxx Drug Co., Inc.
Xxx Xxxx, Xxx Xxxx 00000 000 Xxxxx Xxxxxxxxxx Xx.
Crimson Building #2
Rockford, Ill. 00000
/x/ Xxxxxxx Xxxx /s/ Xxxxxxx X. Xxxxxxx
---------------------------- ----------------------------
By:
Its: Trustee
XXXXXXX XXXXXXX XXXXX XXXXXXX
c/x Xxxxxx Drug Co., Inc. c/x Xxxxxx Drug Co., Inc.
000 Xxxxx Xxxxxxxxxx Xx. 000 Xxxxx Xxxxxxxxxx Xx.
Crimson Building #2 Crimson Building #2
Rockford, Ill. 61107 Xxxxxxxx, Xxx. 00000
/s/ Xxxxxxx X. Xxxxxxx /s/ Xxxxx Xxxxxxx
---------------------------- ----------------------------
11
15
XXXXXX XXXXXXX TRUST
c/x Xxxxxx Drug Co., Inc. XXXXXXXX XXXXXXXXX
000 Xxxxx Xxxxxxxxxx Xx. c/x Xxxxxx Drug Co., Inc.
Xxxxxxx Xxxxxxxx #0 000 Xxxxx Xxxxxxxxxx Xx.
Rockford, Ill. 00000 Xxxxxxx Xxxxxxxx #0
Xxxxxxxx, Xxx. 00000
/s/ Xxxxxx Xxxxxxx /s/ Xxxxxxxx Xxxxxxxxx
---------------------------- ----------------------------
By:
Its: Trustee
XXX XXXX XXXXXX X. XXXX
0000 Xxxxx Xxxxxx 00 Xxxxxxx Xxxxx
Xxxxxxxxx, Xxxxxxxxxx 00000 Xxxxxx, Xxx Xxxxxx 00000
/s/ Xxx Xxxx /s/ Xxxxxx X. Xxxx
---------------------------- ----------------------------
XXXXXX X. XXXX XXXXXX X. XXXX AS CUSTODIAN
00 Xxxxxxx Xxxxx FOR XXXXXX X. XXXX
Xxxxxx, Xxx Xxxxxx 00000 00 Xxxxxxx Xxxxx
Xxxxxx, Xxx Xxxxxx 00000
/s/ Varshah X. Xxxx /s/ Varshah X. Xxxx
---------------------------- ----------------------------
By:
Its: Custodian
XXXXXX X. XXXX AS CUSTODIAN XXXXX XXXXXXXX
FOR XXXXXX X. XXXX x/x Xxxxx Xxxxxxxx
00 Xxxxxxx Xxxxx 000 Xxxxx Xxxxx
Xxxxxx, Xxx Xxxxxx 00000 Xxxxxxxxxxx, Xxx Xxxxxx 00000
/s/ Varshah X. Xxxx /s/ Xxxxx Xxxxxxxx
---------------------------- ----------------------------
By:
Its: Custodian
XXXXXXX XXXXXXXX XXXXXXX XXXXXX
c/o Xxxxx Xxxxxxxx 0000 Xxxxxxxxxx Xxxxxx
000 Xxxxx Xxxxx Xxxxxxxx Xxxx, Xxx. 00000
Xxxxxxxxxxx, Xxx Xxxxxx 00000
/s/ Xxxxxxx Xxxxxxxx /s/ Xxxxxxx Xxxxxx
---------------------------- ----------------------------
12
16
XXXXXXX XXXXXX, XXX ACCOUNT
FBO XXXXXXX XXXXXX
0000 Xxxxxxxxxx Xxxxxx
Xxxxxxxx Xxxx, Xxx. 00000
----------------------------
By:
Its:
13
17
SCHEDULE 1
LIST OF EXISTING GUARANTY AGREEMENTS
1. Continuing Unconditional Secured Guaranty by Houba, Inc. dated
March 10, 1998.
2. Continuing Unconditional Secured Guaranty by Xxxxxx Pharmaceutical, Inc.
dated March 10, 1998.
3. Continuing Unconditional Secured Guaranty by Houba, Inc. dated May 26,
1999.
4. Continuing Unconditional Secured Guaranty by Xxxxxx Pharmaceutical, Inc.
dated May 26, 1999.
SCHEDULE 1
18
SCHEDULE 2
LIST OF EXISTING SECURITY DOCUMENTS
1. Company General Security Agreement, dated March 10, 1998, between
Xxxxxx Drug Co., Inc. and Xxxxx Partners III, L.P., as agent.
2. Guarantors General Security Agreement, dated March 10, 1998, by and
among Xxxxx Powder Products, Inc., Xxxxxx Pharmaceutical, Inc., X.X.
Xxxxx Laboratories, Inc., Houba, Inc., Indiana Fine Chemicals, Inc.
and Xxxxx Partners III, L.P., as agent.
3. Stock Pledge Agreement, dated March 10, 1998, between Xxxxxx Drug Co.,
Inc. and Xxxxx Partners III, L.P., as agent.
4. Company General Security Agreement, dated March 26, 1999, between
Xxxxxx Drug Co., Inc. and Oracle Strategic Partners, L.P., as agent.
5. Guarantors General Security Agreement dated, May 26, 1999, by and among
Houba, Inc., Xxxxxx Pharmaceutical, Inc. and Oracle Strategic Partners,
L.P., as agent.
6. Stock Pledge Agreement, dated May 26, 1999, between Xxxxxx Drug Co.,
Inc. and Oracle Strategic Partners, L.P., as agent.
SCEHDULE 2
19
SCHEDULE 3
EXISTING MORTGAGES AND DEEDS OF TRUST
1. Real estate mortgage, dated May 10, 1998, between Houba, Inc. and Xxxxx
Partners III, L.P., as agent, covering the property located at 00000
Xxxxx Xxxx 00, Xxxxxx, Xxxxxxx 00000.
2. Real estate mortgage, dated May 26, 1999, between Houba, Inc. and
Oracle Strategic Partners, L.P., as agent, covering the property
located at 00000 Xxxxx Xxxx 00, Xxxxxx, Xxxxxxx 00000.
SCHEDULE 3
20
SCHEDULE 4
EXISTING HOLDERS
XXXXX DEBENTURES
Principal Amount of $1.50 $2.375
Name and Address of Purchaser Debenture Purchased Warrants Warrants
----------------------------- ------------------- -------- --------
Xxxxx Partners III, L.P.* $ 15,423,195 1,557,898 1,557,898
000 Xxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Xxxxx Partners International III, L.P.* $ 1,709,167 172,643 172,643
000 Xxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Xxxxx Employee Fund III, L.P.* $ 67,638 6,833 6,833
000 Xxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Xxxxxxx Xxxxxxx* $ 300,000 30,303 30,303
c/x Xxxxxx Drug Co., Inc.
0000 Xxxxxxx Xxxxxx
Xxxxxxxx, Xxx Xxxx 00000
Xxxxx Xxxxxxx* $ 100,000 10,101 10,101
c/x Xxxxxx Drug Co., Inc.
0000 Xxxxxxx Xxxxxx
Xxxxxxxx, Xxx Xxxx 00000
Xxxxxxxx Xxxxxxxxx $ 20,000 2,020 2,020
c/x Xxxxxx Drug Co., Inc.
0000 Xxxxxxx Xxxxxx
Xxxxxxxx, Xxx Xxxx 00000
Xxx Xxxx $ 10,000 1,010 1,010
c/x Xxxxxx Drug Co., Inc.
0000 Xxxxxxx Xxxxxx
Xxxxxxxx, Xxx Xxxx 00000
Purchase
Name and Address of Purchaser Price
----------------------------- ------------------
Xxxxx Partners III, L.P.* $ 15,423,195
000 Xxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Xxxxx Partners International III, L.P.* $ 1,709,167
000 Xxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Xxxxx Employee Fund III, L.P.* $ 67,638
000 Xxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Xxxxxxx Xxxxxxx* $ 300,000
c/x Xxxxxx Drug Co., Inc.
0000 Xxxxxxx Xxxxxx
Xxxxxxxx, Xxx Xxxx 00000
Xxxxx Xxxxxxx* $ 100,000
c/x Xxxxxx Drug Co., Inc.
0000 Xxxxxxx Xxxxxx
Xxxxxxxx, Xxx Xxxx 00000
Xxxxxxxx Xxxxxxxxx $ 20,000
c/x Xxxxxx Drug Co., Inc.
0000 Xxxxxxx Xxxxxx
Xxxxxxxx, Xxx Xxxx 00000
Xxx Xxxx $ 10,000
c/x Xxxxxx Drug Co., Inc.
0000 Xxxxxxx Xxxxxx
Xxxxxxxx, Xxx Xxxx 00000
*Agrees to receive interest in capital stock or like kind debentures.
SCHEDULE 4
21
Principal Amount of $1.50 $2.375
Name and Address of Purchaser Debenture Purchased Warrants Warrants
----------------------------- ------------------- -------- --------
Xxxx Xxxxx $ 10,000 1,010 1,010
c/x Xxxxxx Drug Co., Inc.
0000 Xxxxxxx Xxxxxx
Xxxxxxxx, Xxx Xxxx 00000
Xxxxxx Xxxxx $ 1,170,000 118,182 118,182
000 Xxxxxx Xxxx
Xxxxxx, Xxxxxxxxxxxx 00000
Xxxxxxx Xxxxx $ 50,000 5,051 5,051
000 Xxxxx Xxxx
Xxxxxx, Xxxxxxxxxxxx 00000
Xxxxxxx Xxxxxxxx and Xxxxx Xxxxxxxx $ 300,000 30,303 30,303
0000 Xxxx Xxxxx Xxxx
Xxxxxxxx, Xxxxxxxxxxxx 00000
Xxxx Xxxx $ 100,000 10,101 10,101
0000 Xxxx Xxxxxxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxxxx 00000
Xxxxxx X. Xxxx and Xxxxxx X. Xxxx $ 950,000 95,960 95,960
00 Xxxxxxx Xxxxx
Xxxxxx, Xxx Xxxxxx 00000
Xxxxxx X. Xxxx as Custodian for $ 20,000 2,020 2,020
Xxxxxx X. Xxxx
00 Xxxxxxx Xxxxx
Xxxxxx, Xxx Xxxxxx 00000
Xxxxxx X. Xxxx as Custodian for $ 20,000 2,020 2,020
Xxxxxx X. Xxxx
00 Xxxxxxx Xxxxx
Xxxxxx, Xxx Xxxxxx 00000
Xxxxxxx Xxxx $ 400,000 40,404 40,404
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Name and Address of Purchaser Purchase
Price
----------------------------- ------------------
Xxxx Xxxxx $ 10,000
c/x Xxxxxx Drug Co., Inc.
0000 Xxxxxxx Xxxxxx
Xxxxxxxx, Xxx Xxxx 00000
Xxxxxx Xxxxx $ 1,170,000
000 Xxxxxx Xxxx
Xxxxxx, Xxxxxxxxxxxx 00000
Xxxxxxx Xxxxx $ 50,000
000 Xxxxx Xxxx
Xxxxxx, Xxxxxxxxxxxx 00000
Xxxxxxx Xxxxxxxx and Xxxxx Xxxxxxxx $ 300,000
0000 Xxxx Xxxxx Xxxx
Xxxxxxxx, Xxxxxxxxxxxx 00000
Xxxx Xxxx $ 100,000
0000 Xxxx Xxxxxxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxxxx 00000
Xxxxxx X. Xxxx and Xxxxxx X. Xxxx $ 950,000
00 Xxxxxxx Xxxxx
Xxxxxx, Xxx Xxxxxx 00000
Xxxxxx X. Xxxx as Custodian for $ 20,000
Xxxxxx X. Xxxx
00 Xxxxxxx Xxxxx
Xxxxxx, Xxx Xxxxxx 00000
Xxxxxx X. Xxxx as Custodian for $ 20,000
Xxxxxx X. Xxxx
00 Xxxxxxx Xxxxx
Xxxxxx, Xxx Xxxxxx 00000
Xxxxxxx Xxxx $ 400,000
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
*Agrees to receive interest in capital stock or like kind debentures.
SCHEDULE 4
22
Principal Amount of $1.50 $2.375
Name and Address of Purchaser Debenture Purchased Warrants Warrants
----------------------------- ------------------- -------- --------
Xxxxx Xxxxxxxx $ 25,000 2,525 2,525
000 Xxxxx Xxxxx
Xxxxxxxxxxx, Xxx Xxxxxx 00000
Xxxxxxx Xxxxxxxx $ 25,000 2,525 2,525
00 Xxxxxxx Xxxxxx
Xxxxxx Xxxxxx, Xxx Xxxx 00000
Xxx Xxxxxx $ 100,000 10,101 10,101
000 Xxxxxxx Xxxx
Xxxxxxxx Xxxx, Xxxxxxxx 00000
Purchase
Name and Address of Purchaser Price
----------------------------- ------------------
Xxxxx Xxxxxxxx $ 25,000
000 Xxxxx Xxxxx
Xxxxxxxxxxx, Xxx Xxxxxx 00000
Xxxxxxx Xxxxxxxx $ 25,000
00 Xxxxxxx Xxxxxx
Xxxxxx Xxxxxx, Xxx Xxxx 00000
Xxx Xxxxxx $ 100,000
000 Xxxxxxx Xxxx
Xxxxxxxx Xxxx, Xxxxxxxx 00000
*Agrees to receive interest in capital stock or like kind debentures.
SCHEDULE 4
23
Debenture Number
and Corresponding $1.50 $2.375 Purchase
Name and Address of Purchaser Principal Amount Warrants Warrants Price
----------------------------- ---------------- -------- -------- ---------
Xxxxx Partners III, L.P.* Xx. X-00X
000 Xxxxx Xxxxxx, 0xx Xxxxx $681,105 68,798 68,798 $ 681,105
Xxx Xxxx, Xxx Xxxx 00000
Xxxxx Partners International III, L.P.* No. N-38
000 Xxxxx Xxxxxx, 0xx Xxxxx $3,073,704 310,476 310,476 $ 3,073,704
Xxx Xxxx, Xxx Xxxx 00000
Xxxxx Employee Fund III, No. N-20
L.P.* $65,913 6,658 6,658 $ 65,913
000 Xxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000 No. N-39
$297,456 30,044 30,044 $ 297,456
No. N-21
$2,982 301 301 $ 2,982
No. N-40
$13,456 1,361 1,361 $ 13,456
Xxxxxxx Xxxxxxx* No. N-22
c/x Xxxxxx Drug Co., Inc. $50,000 5,026 5,026 $ 50,000
0000 Xxxxxxx Xxxxxx
Xxxxxxxx, Xxx Xxxx 00000
Xxxxxx X. Xxxxx & Co., Inc. TTEE, No. N-22A
FBO Xxxxxxx X. Xxxxxxx XXX, $22,115 2,258 2,258 $ 22,115
Account Number 7026-6907
c/x Xxxxxx Drug Co., Inc.
0000 Xxxxxxx Xxxxxx
Xxxxxxxx, Xxx Xxxx 00000
Xxxxx Xxxxxxx* No. N-23
c/x Xxxxxx Drug Co., Inc. $24,038 2,428 2,428 $ 24,038
0000 Xxxxxxx Xxxxxx
Xxxxxxxx, Xxx Xxxx 00000
*Agrees to receive interest in capital stock or like kind debentures.
SCHEDULE 4
24
Debenture Number
and Corresponding $1.50 $2.375 Purchase
Name and Address of Purchaser Principal Amount Warrants Warrants Price
----------------------------- ---------------- -------- -------- -----------
Xxxxxxxx Xxxxxxxxx No. N-24
c/x Xxxxxx Drug Co., Inc. $4,808 486 486 $ 4,808
0000 Xxxxxxx Xxxxxx
Xxxxxxxx, Xxx Xxxx 00000
Xxx Xxxx No. N-25
c/x Xxxxxx Drug Co., Inc. $2,404 243 243 $ 2,404
0000 Xxxxxxx Xxxxxx
Xxxxxxxx, Xxx Xxxx 00000
Xxxx Xxxxx No. N-29
c/x Xxxxxx Drug Co., Inc. $2,404 243 243 $ 2,404
0000 Xxxxxxx Xxxxxx
Xxxxxxxx, Xxx Xxxx 00000
Xxxxxx Xxxxx Xx. X-00
000 Xxxxxx Xxxx $281,250 28,409 28,409 $ 281,250
Xxxxxx, Xxxxxxxxxxxx 00000
Xxxxxxx Xxxxx Xx. X-00
000 Xxxxx Xxxx $12,019 1,214 1,214 $ 12,019
Xxxxxx, Xxxxxxxxxxxx 00000
Xxxxxxx Xxxxxxxx and Xxxxx Xxxxxxxx No. N-33
0000 Xxxx Xxxxx Xxxx $72,115 7,284 7,284 $ 72,115
Xxxxxxxx, Xxxxxxxxxxxx 00000
Xxxx Xxxx
0000 Xxxx Xxxxxxxxx Xxxxxx Xx. X-00
Xxxxxxxx, Xxxxxxxxxx 00000 $24,038 2,428 2,428 $ 24,038
Xxxxxx X. Xxxx and Xxxxxx X. Xxxx Xx. X-00
00 Xxxxxxx Xxxxx $228,365 23,067 23,067 $ 228,365
Xxxxxx, Xxx Xxxxxx 00000
Xxxxxx X. Xxxx as Custodian for Xxxxxx X. Xxxx Xx. X-00
00 Xxxxxxx Xxxxx $4,808 486 486 $ 4,808
Xxxxxx, Xxx Xxxxxx 00000
*Agrees to receive interest in capital stock or like kind debentures.
SCHEDULE 4
25
Debenture Number
and Corresponding $1.50 $2.375 Purchase
Name and Address of Purchaser Principal Amount Warrants Warrants Price
----------------------------- ---------------- -------- -------- -----------
Xxxxxx X. Xxxx as Custodian for Xxxxxx X. Xxxx Xx. X-00
00 Xxxxxxx Xxxxx $4,808 486 486 $ 4,808
Xxxxxx, Xxx Xxxxxx 00000
Xxxxxxx Xxxx No. N-37
000 Xxxx 00xx Xxxxxx $96,154 9,712 9,712 96,154
Xxx Xxxx, Xxx Xxxx 00000
$
Xxxxx Xxxxxxxx Xx. X-00
000 Xxxxx Xxxxx $6,010 607 607 6,010
Xxxxxxxxxxx, Xxx Xxxxxx 00000
$
Xxxxxxx Xxxxxxxx Xx. X-00
00 Xxxxxxx Xxxxxx $6,010 607 607 6,010
Xxxxxx Xxxxxx, Xxx Xxxx 00000
Xxx Xxxxxx Xx. X-00
000 Xxxxxxx Xxxx $24,038 2,428 2,428 $ 24,038
Xxxxxxxx Xxxx, Xxxxxxxx 00000
*Agrees to receive interest in capital stock or like kind debentures.
SCHEDULE 4
26
EXISTING HOLDERS
ORACLE DEBENTURES
--------------------------------------------------------- ------------------------------ ----------------------- -------------------
Principal
Oracle Debentures Amount of Debenture $1.404 $2.285
Name and Address of Purchaser Purchased Warrants Warrants
----------------------------- --------- -------- --------
--------------------------------------------------------- ------------------------------ ----------------------- -------------------
1. Oracle Strategic Partners, L.P.* $ 5,000,000.00 505,050 505,050
--------------------------------------------------------- ------------------------------ ----------------------- -------------------
2. Oracle Strategic Partners, L.P.* $ 5,000,000.00(1) 1,010,100 1,010,100
--------------------------------------------------------- ------------------------------ ----------------------- -------------------
3. Xxxxx Partners III, L.P.* $ 5,964,583.09(2) 602,483 602,483
--------------------------------------------------------- ------------------------------ ----------------------- -------------------
4. Xxxxx Partners International III, L.P.* $ 539,900.40(3) 54,535 54,535
--------------------------------------------------------- ------------------------------ ----------------------- -------------------
5. Xxxxx Employee Fund III, L.P.* $ 24,424.10(4) 2,467 2,467
--------------------------------------------------------- ------------------------------ ----------------------- -------------------
6. Xxxxxxx Xxxxx $ 51,178.08(5) 5,169 5,169
--------------------------------------------------------- ------------------------------ ----------------------- -------------------
7. Xxxx Xxxxx $ 13,358.08(6) 1,349 1,349
--------------------------------------------------------- ------------------------------ ----------------------- -------------------
8. Xxxxxxx and Xxxxx Xxxxxxxx $ 564,446.96(7) 57,015 57,015
--------------------------------------------------------- ------------------------------ ----------------------- -------------------
9. Xxxx Xxxx $ 204,712.33(8) 20,678 20,678
--------------------------------------------------------- ------------------------------ ----------------------- -------------------
10. Xxxxxx Xxxxx $ 300,000.00 30,303 30,303
--------------------------------------------------------- ------------------------------ ----------------------- -------------------
11. Xxxxxxx Xxxx $ 200,000.00 20,202 20,202
--------------------------------------------------------- ------------------------------ ----------------------- -------------------
Total $ 17,862,603.04 2,309,351.00 2,309,351.00
--------------------------------------------------------- ------------------------------ ----------------------- -------------------
Oracle Debentures
Name and Address of Purchaser Purchase Price
----------------------------- --------------
------------------------------------------------------------- -----------------------------
1. Oracle Strategic Partners, L.P.* $ 5,000,000.00
------------------------------------------------------------- -----------------------------
2. Oracle Strategic Partners, L.P.* $ 5,000,000.00
------------------------------------------------------------- -----------------------------
3. Xxxxx Partners III, L.P.* $ 5,964,583.09
------------------------------------------------------------- -----------------------------
4. Xxxxx Partners International III, L.P.* $ 539,900.40
------------------------------------------------------------- -----------------------------
5. Xxxxx Employee Fund III, L.P.* $ 24,424.10
------------------------------------------------------------- -----------------------------
6. Xxxxxxx Xxxxx $ 51,178.08
------------------------------------------------------------- -----------------------------
7. Xxxx Xxxxx $ 13,358.08
------------------------------------------------------------- -----------------------------
8. Xxxxxxx and Xxxxx Xxxxxxxx $ 564,446.96
------------------------------------------------------------- -----------------------------
9. Xxxx Xxxx $ 204,712.33
------------------------------------------------------------- -----------------------------
10. Xxxxxx Xxxxx $ 300,000.00
------------------------------------------------------------- -----------------------------
11. Xxxxxxx Xxxx $ 200,000.00
------------------------------------------------------------- -----------------------------
Total $ 17,862,603.04
------------------------------------------------------------- -----------------------------
--------------------
1 Intentionally omitted.
2 Consists of the surrender of convertible bridge notes in the principal
amount of $5,590,917 plus accrued and unpaid interest of $373,666.09.
3 Consists of the surrender of convertible bridge notes in the principal
amount of $506,077 plus accrued and unpaid interest of $33,823.40.
4 Consists of the surrender of convertible bridge notes in the principal
amount of $22,894 plus accrued and unpaid interest of $1,530.10.
5 Consists of (i) the surrender of convertible bridge notes in the
principal amount of $25,000 plus accrued and unpaid interest of $1,178.08
and (ii) an additional investment of $25,000.
6 Consists of the surrender of convertible bridge notes in the principal
amount of $13,000 plus accrued and unpaid interest of $358.08.
7 Consists of (i) the surrender of convertible bridge notes in the
principal amount of $351,222 plus accrued and unpaid interest of
$13,224.96 and (ii) an additional investment of $200,000.
8 Consists of (i) the surrender of convertible bridge notes in the
principal amount of $100,000 plus accrued and unpaid interest of
$4,712.33 and (ii) an additional investment of $100,000.
*Agrees to receive interest in capital stock or like kind debentures.
SCHEDULE 4
27
EXHIBIT A
FORM OF
JOINDER AGREEMENT
Reference is made to that certain Subordination Agreement, dated as of
March __, 2000 (the "Subordination Agreement"), by and among Xxxxxx
Pharmaceuticals, Inc., a Nevada corporation, Xxxxxx Drug Co., Inc., a New York
corporation ("Xxxxxx"), Xxxxx Partners III, L.P., as Agent of the holders of the
Xxxxx Debentures, the Oracle Investor Group and the Grantors and Guarantors
listed on the signature pages thereof. All capitalized terms used but not
defined herein have the respective meanings ascribed thereto in the
Subordination Agreement. This agreement is a Joinder Agreement referred to in
Section 14.2 of the Subordination Agreement.
The undersigned hereby agrees that it is a party to the Subordination
Agreement and is therefore bound by, and subject to, the terms of the
Subordination Agreement, and that it is an "Existing Holder" under, and as
defined, therein.
The undersigned certifies that on or about the date hereof it is the
holder of the following obligations of the Company outstanding under the
Existing Debentures, as applicable.
[describe obligations]
The address for notices to the undersigned pursuant to the
Subordination Agreement is as follows:
[set forth address for notices]
Very truly yours,
[CREDITOR]
By
------------------------------------------
Name:
Title:
EXHIBIT A
28
SCHEDULE 5
XXXXXX SECURITY DOCUMENTS
Xxxxxx Security Agreement
Xxxxxx Stock Pledge Agreement
Xxxxxx Guaranty
Xxxxxx Guarantors Security Agreement
Deed of Trust on Xxxxxx, Indiana Property
Deed of Trust Subordination
EXHIBIT A
