FOURTH AMENDMENT TO REVOLVING CREDIT AGREEMENT
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FOURTH AMENDMENT entered into as of January 29, 1997 between HI-TECH
PHARMACAL CO., INC. (the "Company") and FLEET BANK, N.A., formerly known as
National Westminster Bank USA (the "Bank").
WHEREAS, the Company and the Bank are parties to a Revolving Credit
Agreement dated as of January 23, 1992, as amended by a First Amendment dated as
of May 1, 1992, a Second Amendment dated December 6, 1993 and a Third Amendment
dated as of October 31, 1994 (collectively the "Loan"); and
WHEREAS, the Company has requested that the Bank extend the Credit Period
to August 31, 1997 and modify certain of the terms set forth in the Agreement
and the Bank is willing to comply with such requests but only upon and subject
to the following terms and conditions.
NOW, THEREFORE, the parties hereto hereby agree as follows:
1. The Agreement is hereby amended as follows:
(A) The preamble to the Agreement is hereby amended by deleting "New
York corporation" appearing therein and substituting "Delaware corporation"
therefor.
(B) Section 1 of the Agreement is hereby amended to read as follows:
"1. The Credit. From time to time after the execution of this
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Agreement to and including August 31, 1997 (the "Credit Period"), the Bank,
in reliance on the representations and warranties contained herein, agrees
to extend credit to the Company by making revolving credit loans to the
Company or issuing Letters of Credit, as hereinafter defined, for the
account of the Company, in the aggregate principal amount up to but not
exceeding the lesser of $2,000,000.00 or the Borrowing Base, as hereinafter
defined (the "Credit") and Letters of Credit at any one time outstanding
shall not exceed $100,000. The obligation of the Bank to make the Credit
available is hereinafter called the "Commitment". During the Credit
Period, the Company may use the Credit by (i) borrowing, paying and
prepaying in whole or in part and reborrowing and (ii) for the issuance of
Letters of Credit, all in accordance with the terms and conditions
hereof. The Commitment and the Credit are subject to the terms and
conditions of this Agreement and the Note (Note) which evidences the
Credit. The Credit is secured by any collateral specified in the schedule
hereto (Schedule) under the heading "Collateral" and any other collateral
granted to the Bank and is guaranteed by any parties specified in the
Schedule under the heading "Guaranties". The Credit is subject to the
following terms and conditions:"
(C) In order to conform to the amendment hereinabove set forth in
paragraph (B), the Note evidencing the Credit is hereby substituted for and
replaced with the Amended Note in the form of Exhibit 1 hereto.
(D) A new Section 1.5 is inserted in the Agreement to read as follows:
"1.5 Letters of Credit. Subject to the limitations of Section 1
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hereof and as herein provided, the Borrower may from time to time during
the Credit Period, upon one day's notice, request the issuance by the Bank,
for the account of the Borrower, of documentary letters of credit which
shall be issued to facilitate the purchase of goods by it in transactions
involving the importation, exportation or domestic shipment of such goods
(the "Letters of Credit").
(a) Letter of Credit Fees. The Borrower agrees to pay the fees
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for the issuance of each Letter of Credit, the fees for drawings on same
and any other standard fees and commissions routinely charged in connection
therewith in accordance with the Bank's schedule of fees and commissions in
effect from time to time.
(b) Reimbursement. In the event the Bank makes payment to the
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beneficiary of any Letter of Credit in accordance with the terms thereof,
the Borrower agrees to reimburse the Bank therefor on the same day such
payment is made, all as more fully set forth in, and subject to the terms
and conditions of, any applicable Letter of Credit Application and
Agreement, each of which Letter of Credit
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Application and Agreement is fully incorporated herein by reference
thereto."
(E) Section 4 (f) of the Agreement is hereby amended to delete the
language contained therein and to substitute the following therefor:
"(f) Corporate Standing; Business. Maintain its corporate
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existence in good standing and remain or become duly licensed or qualified
and in good standing in each jurisdiction in which the conduct of its
business or ownership of its property requires such qualification or
licensing and wherein the failure to be so licensed or qualified would have
a material adverse effect on the Company; conduct its business in
substantially the same manner and in substantially the same fields as such
business is now carried on and conducted; and cause each Consolidated
Subsidiary to comply with this paragraph, provided, however, this covenant
shall not restrict any Consolidated Subsidiary formed hereafter from
merging or consolidating with any other Consolidated Subsidiary formed
hereafter or with the Company, provided that if the Company shall be
involved in any such transaction, it shall be the surviving corporation and
provided further, however, this covenant shall not restrict any
Consolidated Subsidiary formed hereafter from merging with the Company even
if the Company is not the surviving corporation if the sole purpose of such
merger is to change the jurisdiction of incorporation of the Company from
New York to Delaware."
(F) Section 5(g) of the Agreement is hereby amended to delete the
language contained therein and to substitute the following therefor:
"(g) Mergers. Merge or consolidate with or into any other firm
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or corporation or enter into any joint venture or partnership with any
other person, firm or corporation except for joint venture marketing
arrangements with Circa Pharmaceuticals Inc., presently known as ▇▇▇▇▇▇
Pharmaceuticals Inc., which have been disclosed to and approved by the Bank
and provided the Bank will not unreasonably withhold its consent to a
merger of ▇▇. ▇▇▇▇, Inc. ("Rose") into the Company or a
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Consolidated Subsidiary of the Company provided the financial condition,
including but not limited to liabilities and contingent liabilities, of
Rose immediately prior to any such merger, is in all respects satisfactory
to the Bank and no event shall occur and be continuing which constitutes,
or with notice or lapse of time or both, would constitute an Event of
Default and provided further, however, this covenant shall not restrict any
Consolidated Subsidiary formed hereafter from merging with the Company even
if the Company is not the surviving corporation if the sole purpose of such
merger is to change the jurisdiction of incorporation of the Company from
New York to Delaware."
2. The Company and the Bank hereby agree that the Note and the Security
Agreement are amended to change any references to the Company as a New York
corporation to a Delaware corporation.
3. Application of the covenant set forth in Section 5(g) of the Agreement
prior to this amendment is hereby waived with respect to non-compliance by
reason of the merger of Hi Tech Pharmacal Co., Inc., a New York corporation,
into Hi Tech Pharmacal Co., Inc., a Delaware corporation pursuant to a plan of
merger dated October 9, 1996.
4. The Company hereby represents and warrants to the Bank that:
(A) Each and every one of the representations and warranties set forth
in the Agreement is true as of the date hereof and with the same effect as
though made on the date hereof, and is hereby incorporated herein in full by
reference as if fully restated herein in its entirety.
(B) No Default or Event of Default and no event or condition which,
with the giving of notice or lapse of time or both, would constitute such a
Default or Event of Default, now exists or would exist.
5. All capitalized terms used herein, unless otherwise defined herein,
have the same meanings provided therefor in the Agreement.
6. It is expressly understood and agreed that all collateral security for
the Credit and other extensions of credit set forth in the Agreement prior to
the amendment provided for herein is and shall continue to be collateral
security for the Credit and other extensions of credit provided in the Agreement
as herein amended. Without limiting the generality of the foregoing, the Company
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hereby absolutely and unconditionally confirms that (i) each document and
instrument executed by the Company pursuant to the Agreement continues in full
force and effect, is ratified and confirmed and is and shall continue to be
applicable to the Agreement (as herein amended), and (ii) the Note is hereby
ratified and confirmed and shall remain in full force and effect in accordance
with its terms.
7. By its execution of this amendment in the space provided below, the
guarantor indicated below hereby consents to this Amendment and reaffirms its
continuing liability under its guarantee, in respect of the Agreement as amended
hereby and all the documents, instruments and agreements executed pursuant
thereto or in connection therewith, without offset, defense or counterclaim (any
such offset, defense or counterclaim as may exist being hereby irrevocably
waived by such guarantor).
8. This Fourth Amendment shall become effective on such date as all of
the following conditions shall be satisfied:
(A) The Bank shall have received copies of the Agreement and Plan of
Merger pursuant to which the Company will be merged into a Delaware Subsidiary
and the certificate of incorporation and by-laws of the successor Delaware
corporation under which the Company's businesses would be conducted after the
merger, certified as true and correct by the Secretary of the Company together
with a certificate of the Secretary of the Company certifying that such merger
is effective.
(B) The Bank shall have received evidence of payment of all of the
Bank's attorneys fees and disbursements in connection with this Fourth
Amendment.
(C) All legal matters incident to this Fourth Amendment shall be
satisfactory to counsel to the Bank.
9. This Fourth Amendment is dated for convenience as of January 29, 1997
and shall be effective on the date of satisfaction of the conditions precedent
contained in paragraph 8 hereof and delivery by the Bank of an executed
counterpart hereof to the Company. This Fourth Amendment may be executed in any
number of counterparts and by different parties hereto in separate counterparts,
each of which when so executed shall be deemed to be an original and all of
which taken together shall constitute one and the same agreement.
10. The amendments set forth herein are limited precisely as written and
shall not be deemed to (a) be a consent to or a waiver of any other term or
condition of the Agreement or any of the documents referred to therein or (b)
prejudice any right or rights which the Bank may now have or may have in the
future under or in connection with the Agreement or any documents referred to
therein.
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Whenever the Agreement is referred to in the Agreement or any of the
instruments, agreements or other documents or papers executed and delivered in
connection therewith, it shall be deemed to mean the Agreement as modified by
this Fourth Amendment.
IN WITNESS WHEREOF, the parties hereto have caused this Fourth Amendment to
be duly executed and delivered by their respective duly authorized officers as
of the date first above written.
HI-TECH PHARMACAL CO., INC.
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
By:_____________________
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: President
FLEET BANK, N.A.
/s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
By:_______________________
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Vice President
The guarantor indicated below hereby consents to this Fourth Amendment and
reaffirms its continuing liability under its guarantee in respect of the
Agreement as amended hereby and all the documents, instruments and agreements
executed pursuant thereto or in connection therewith, without offset, defense or
counterclaim (any such offset, defense or counterclaim as may exist being hereby
irrevocably waived by such guarantor).
ROSE LABORATORIES, INC.,
formerly known as H-T Acquisition Corp.
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
By:______________________
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: President
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▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇ )
) ss:
COUNTY OF SUFFOLK )
On the 9th day of April, 1997, before me personally came ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇,
to me known, who, being by me duly sworn, did depose and say that he resides at
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇; that he is the President of HI-TECH
PHARMACAL CO., INC., the corporation described in and which executed the
foregoing instrument; and that he signed his name thereto by order of the board
of directors of said corporation.
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
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Notary Public
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Notary Public, State of New York
No. 01F15060916
Qualified in Nassau County
Commission Expires May 28, ▇▇▇▇
▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇ )
) ss:
COUNTY OF SUFFOLK )
On the 9th day of April, 1997, before me personally came ▇▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇, to me known, who, being by me duly sworn, did depose and say that she
resides at c/o ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇; that she is a Vice
President of FLEET BANK, N.A., the banking institution described in and which
executed the foregoing instrument; and that she signed her name thereto by order
of the board of directors of said corporation.
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
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Notary Public
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Notary Public, State of New York
No. 01F15060916
Qualified in Nassau County
Commission Expires May 28, ▇▇▇▇
▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇ )
) ss:
COUNTY OF SUFFOLK )
On the 9th day of April, 1997, before me personally came ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇,
to me known, who, being by me duly sworn, did depose and say that he resides at
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇; that he is the President of ROSE
LABORATORIES, INC., formerly known as H-T Acquisition Corp., the corporation
described in and which executed the foregoing instrument; and that he signed his
name thereto by order of the board of directors of said corporation.
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
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Notary Public
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Notary Public, State of New York
No. 01F15060916
Qualified in Nassau County
Commission Expires May 28, 1998
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EXHIBIT 1
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AMENDED REVOLVING CREDIT NOTE
$2,000,000.00 MELVILLE, NEW YORK AS OF JANUARY 29, 1997
FOR VALUE RECEIVED, HI-TECH PHARMACAL CO., INC., a corporation formed under
the laws of the State of Delaware ("Company") promises to pay to the order of
FLEET BANK, N.A. ("Bank") at its office located at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ the principal sum of the lesser of: (a) Two Million and
00/100 ($2,000,000.00) Dollars; or (b) the aggregate unpaid principal amount of
all advances made by Bank to Company pursuant to the Agreement hereinafter
referred to, on August 31, 1997.
Company shall also pay interest on the unpaid balance from time to time
outstanding, at said office at a rate per annum equal to the Prime Rate, as
hereinafter defined. Interest on payments which are past due whether at the
stated maturity or by acceleration or otherwise shall accrue at the otherwise
applicable rate per annum plus three (3%) percent. "Prime Rate" shall mean and
refer to the floating rate of interest per annum announced by the Bank from time
to time as being the so called "Prime Rate" of interest charged by the Bank.
Such interest rates shall change when and as the Prime Rate is changed, and any
such change in the Prime Rate shall become effective on the day such change is
adopted. In no event shall interest be required in excess of the maximum rate
permitted by New York law. Interest shall be payable in arrears on the 1st day
of each calendar month commencing February 1, 1997 at maturity, by acceleration
or otherwise and after such maturity, on demand. All computations of interest
hereunder shall be made on the basis of a 360 day year for the actual number of
days elapsed.
All payments including prepayments on this Note shall be made in lawful
money of the United States of America in immediately available funds. If a
payment becomes due and payable on a Saturday, Sunday, or public or other
banking holiday under the laws of the State of New York, the maturity thereof
shall be extended to the next succeeding business day, and interest shall be
payable thereon at the rate herein specified during such extension.
Company hereby authorizes Bank to enter from time to time the amount of
each Advance to Company on the schedule annexed hereto and made a part hereof.
Failure of Bank to record such information on such schedule shall not in any way
affect the obligation of Company to pay any amount due under this Note.
This Note is the promissory note referred to in that certain Revolving
Credit Agreement between Company and Bank dated as of January 23, 1992 as
amended by agreements dated as of May 1, 1992, as of December 6, 1993, as of
October 31, 1994 and as of January
29, 1997 (collectively, the "Agreement") as such Agreement may be further
amended from time to time, and is subject to prepayment and its maturity is
subject to acceleration upon the terms contained in said Agreement. This Note is
secured by the Collateral specified in the Agreement.
If any action or proceeding be commenced to collect this Note or enforce
any of its provisions, Company further agrees to pay all costs and expenses of
such action or proceeding and reasonable attorneys' fees and further expressly
waives any and every right to interpose any counterclaim in any such action or
proceeding. Company hereby submits to the jurisdiction of the Supreme Court of
the State of New York and agrees with Bank that personal jurisdiction over
Company shall rest with the Supreme Court of the State of New York for purposes
of any action on or related to this Note or the enforcement of same. Company
hereby expressly waives any and every right to a trial by jury in any action on
or related to this Note or the enforcement of the same.
Bank may transfer this Note and may deliver the security or any part
thereof to any transferee or transferees, who shall thereupon become vested with
all the powers and rights above given to Bank in respect thereto, and Bank shall
thereafter be forever relieved and fully discharged from any liability or
responsibility in the matter except for any liability or responsibility which
arose prior to the date of such transfer. The failure of any holder of this
Note to insist upon strict performance of each and/or all of the terms and
conditions hereof shall not be construed or deemed to be a waiver of any such
term or condition.
Company and all endorsers and guarantors hereof waive presentment and
demand for payment, notice of non-payment, protest, and notice of protest.
This Note and its provisions shall be construed in accordance with the laws
of the State of New York.
HI-TECH PHARMACAL CO., INC.
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
By:______________________
President
Address: ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Exhibit 1-2