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EXHIBIT 4.1 (b)
AMENDMENT NO. 7 TO BUSINESS LOAN AGREEMENT
This Amendment No. 7 (the "Amendment") dated as of December 31, 1996 is
among Bank of America National Trust and Savings Association (the "Bank"),
XXXXXX PHARMACEUTICALS, INC. ("WPI"), XXXXXX LABORATORIES, INC. ("WLI") and
CIRCA PHARMACEUTICALS, INC. ("CPI") (WPI, WLI and CPI are sometimes referred to
collectively as the "Borrowers" and individually as the "Borrower").
RECITALS
A. The Bank and the Borrowers entered into a certain Business Loan
Agreement dated as of June 30, 1994 as previously amended (the
"Agreement").
B. The Bank and the Borrowers desire to further amend the Agreement.
AGREEMENT
1. DEFINITIONS. Capitalized terms used but not defined in this Amendment
shall have the meaning given to them in the Agreement.
2. AMENDMENTS. The Agreement is hereby amended as follows:
2.1 In subparagraph (a) of Paragraph 1.1 of the
Agreement, the AMOUNT "TWENTY MILLION DOLLARS
($20,000,000)" is substituted for the amount "TEN
MILLION DOLLARS ($10,000,000)".
2.2 In Paragraph 1.2 of the Agreement, the date "AUGUST
1, 1998" is substituted for the date "NOVEMBER 1,
1996".
2.3 Subparagraph (a) of Paragraph 1.3 of the Agreement is
amended in its entirety and shall read as follows:
"(a) Unless the Borrowers elect an optional interest
rate as described below, the interest rate is the
Bank's Reference Rate minus one-quarter (.25) of a
percentage point."
2.4 Subparagraph (a) of Paragraph 1.6 of the Agreement is
amended in its entirety and shall read as follows:
"(a) 'SHORT TERM FIXED RATE' means the Short Term
Base Rate plus eighty-five hundredths (.85) of a
percentage point."
2.5 The first sentence in Paragraph 1.7 of the Agreement
is amended in its entirety and shall read as follows:
"OFFSHORE RATE. The Borrowers may elect to have all
or portions of the principal balance of the line of
credit bear interest at the Offshore Rate plus
eighty-five hundredths (.85) of a percentage point."
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2.6 In Paragraph 2.2 of the Agreement, the date is
"AUGUST 1, 1997" substituted for the date "JUNE 1,
1996".
2.7 In subparagraph (b) of Paragraph 2.6 of the
Agreement, the date "SEPTEMBER 1, 1997" is
substituted for the date "JULY 1, 1996" and "AUGUST
1, 2002" is substituted for the date "JUNE 1, 2002".
2.8 Article 4 and its subsequent paragraphs are deleted
in their entirety.
2.9 In Paragraph 4A.4 of the Agreement, the date "AUGUST
1, 1997" is substituted for the date "JUNE 1, 1996".
2.10 In subparagraph (b) of Paragraph 4A.4 of the
Agreement, the date "JULY 1, 2004" is substituted for
the date "MAY 1, 2003".
2.11 The first phrase in Paragraph 9. 1 of the Agreement
is amended as follows:
"To use the proceeds of Facility No. 1 only for the
Borrowers' general corporate purposes and joint
venture investments;"
2.12 Subparagraph (a) of Paragraph 9.2 of the Agreement is
amended in its entirety and shall read as follows:
"(a) Copies of WPI's Form 10-K Annual Report and
Form 10-Q Quarterly Report within 30 days after the
date of filing with the Securities and Exchange
Commission."
2.13 Subparagraphs (b), (c), (d), (e) and (h) of Paragraph
9.2 of the Agreement are deleted in their entirety.
2.14 Paragraph 9.3 of the Agreement is deleted in its
entirety.
2.15 Paragraph 9.4 of the Agreement is amended in its
entirety and shall read as follows:
"9.4 TANGIBLE NET WORTH. With respect to WPI, to
maintain on a consolidated basis, tangible net worth
equal to at least the following:
(1) From and including the date hereof to but
excluding the Oclassen Merger Date, the sum
of:
(a) Three Hundred Twenty Five Million
Dollars ($325,000,000); plus
(b) the sum of 50% of net income after
income taxes (without subtracting
losses) earned in each quarterly
accounting period commencing
December 31, 1996.
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(2) On and after the Oclassen Merger Date, the
sum of:
(a) Three Hundred Fifty Million Dollars
($350,000,000); plus
(b) the sum of 50% of net income after
income taxes (without subtracting
losses) earned in each quarterly
accounting period commencing March
31, 1997.
'Oclassen Merger Date' means the date on which
Oclassen Pharmaceuticals, Inc. becomes a wholly-owned
subsidiary of WPI; 'tangible net worth' means the
gross book value of WPI's assets (excluding goodwill,
patents, trademarks, trade names, organization
expense, treasury stock, unamortized debt discount
and expense, deferred research and development costs,
deferred marketing expenses, and other like
intangibles, and monies due from affiliates,
officers, directors or shareholders of WPI) plus debt
subordinated to the Bank in a manner acceptable to
the Bank (using the Bank's standard form) less total
liabilities, including but not limited to accrued and
deferred income taxes, and any reserves against
assets.'
2.16 Paragraph 9.6 of the Agreement is amended in its
entirety and shall read as follows:
'9.6 CASH FLOW COVERAGE RATIO. With respect to
WPI, to maintain on a consolidated basis, cash flow
coverage ratio of at least 2.0:1.0.
'Cash flow coverage ratio' means the sum of net
income after taxes, plus depreciation and other
non-cash charges, plus interest expense minus
dividends and non-financed capital expenditures
divided by the sum of interest expense, plus the
current portion of capital leases and the current
portion of long-term debt. This ratio will be
calculated at the end of each fiscal quarter. The
current portion of long term debt and the current
portion of capital leases will be measured as of the
last day of the preceding fiscal quarter."
2.17 Subparagraph (e) of Paragraph 9.8 of the Agreement is
amended in its entirety to read as follows:
"(e) Additional debts and lease obligations of
Borrowers for business purposes."
2.18 Subparagraph (d) of Paragraph 9.9 of the Agreement is
amended in its entirety to read as follows:
"(d) Additional purchase money security interest in
personal and non-personal property acquired by the
Borrowers or any one of them."
2.19 Paragraph 9.10 of the Agreement is deleted in its
entirety.
2.20 In Paragraph 9.11 of the Agreement, the definition of
"Line year" is amended in its entirety to read as
follows:
" 'Line year' means the period between August 1, 1996
and July 31, 1997, and each subsequent one-year
period (if any)."
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2.21 In subparagraph (a) of Paragraph 9.12 of the
Agreement, the amount "One Million Dollars
($1,000,000)" is substituted for the amount "One
Hundred Thousand Dollars ($100,000)".
2.22 Subparagraph (f) of Paragraph 9.20 of the Agreement
is amended in its entirety to read as follows:
"(f) make any loans or advances to or
investments in any person or entity in
excess of an aggregate amount at any time
exceeding twenty percent (20%) of the
Borrowers' tangible net worth, as of the
period beginning January 1, 1997, subject to
the Borrowers being in compliance with all
other terms and conditions."
2.23 In Paragraphs 11.5 of the Agreement, the amount "Two
Million Five Hundred Thousand Dollars ($2,500,000)"
is substituted for the amount "One Million Dollars
($1,000,000)".
2.24 In Paragraphs 11.6 of the Agreement, the amount "Two
Million Five Hundred Thousand Dollars ($2,500,000)"
is substituted for the amount "Seven Hundred Fifty
Thousand Dollars ($750,000)".
2.25 Paragraph 11.9 of the Agreement is amended in its
entirety to read as follows:
"11.9 CROSS-DEFAULT. Any default occurs under one or
more agreements of any Borrower (or any guarantor),
including without limitation, agreements obtaining
credit, guaranties, and supplier agreements, where
the aggregate amount of obligations thereunder exceed
Five Million Dollars ($5,000,000)."
3. CONDITIONS. This Amendment will be effective when the Bank
receives the following items, in form and content acceptable
to the Bank:
3.1 PERIODIC FEE. (FACILITY NO. 1) The Borrowers agree to
pay (i) a fee in the amount of Five Thousand Eight
Hundred Thirty-Three and 33/100 Dollars ($5,833.33)
payable on or before the date of this Amendment
covering the period from January 1, 1997 through July
31, 1997; and (ii) a fee in the amount of Ten
Thousand Dollars ($10,000) payable on August 1, 1997
covering the period from August 1, 1997 through July
31, 1998.
3.2 A Corporate Resolution to Obtain Credit executed by
each Borrower in an amount not less than Forty
Million Dollars ($40,000,000).
4. EFFECT OF AMENDMENT. Except as provided in this Amendment, all
of the terms and conditions of the Agreement shall remain in
full force and effect.
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This Amendment is executed as of the date stated at the beginning of
this Amendment.
BANK OF AMERICA XXXXXX PHARMACEUTICALS, INC.
National Trust and Savings Association
X /s/ Xxxx X. XxXxxxx X /s/ Xxxxx Xxxx
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By: Xxxx X. XxXxxxx, Vice President By: Xxxxx Xxxx, Chairman and Chief
Executive Officer
X /s/ Xxxxxx X. Xxxxxxx
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By: Xxxxxx X. Xxxxxxx, Secretary
XXXXXX LABORATORIES, INC.
X /s/ Xxxxx Xxxx
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By: Xxxxx Xxxx, President
X /s/ Xxxxx Xxxx
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By: Xxxxx Xxxx, Vice President of
Finance
CIRCA PHARMACEUTICALS, INC.
X /s/ Xxxxx Xxxx
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By: Xxxxx Xxxx, Chairman of the Board
X /s/ Xxxxxx X. Xxxxxxx
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By: Xxxxxx X. Xxxxxxx, Secretary
