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Exhibit 10.72
THIRD AMENDMENT TO CREDIT AND SECURITY AGREEMENT
THIS THIRD AMENDMENT TO CREDIT AND SECURITY AGREEMENT (the "Amendment") is
made as of the 22nd day of November, 1998 by and between MEDICIS PHARMACEUTICAL
CORPORATION, a Delaware corporation ("Borrower"), and NORWEST BANK ARIZONA,
NATIONAL ASSOCIATION, a national banking association, as successor-in-interest
to NORWEST BUSINESS CREDIT, INC., a Minnesota corporation ("Lender").
R E C I T A L S:
WHEREAS, Borrower and Norwest Business Credit, Inc. ("NBCI") are parties
to that certain Credit and Security Agreement dated as of August 3, 1995, as
modified by letter agreements dated March 6, 1996 and April 11, 1996, First
Amendment to Credit and Security Agreement dated as of May 29, 1996 among
Borrower, NBCI and Lender, and Second Amendment to Credit and Security Agreement
dated as of November 22, 1998 between Borrower and Lender (collectively, the
"Credit Agreement"), pursuant to which Lender agreed to make available to
Borrower, on a revolving basis, a sum not to exceed $2,000,000 (the "Revolving
Loan"), which Revolving Loan is evidenced by that certain Promissory Note dated
August 3, 1995 from Borrower to NBCI in an amount not to exceed $2,000,000 (the
"Revolving Note"), and committed to advance $3,000,000 (the "Term Credit
Facility") to finance capital expenditures, product development costs, brand
purchase contracts, licensing agreements and other financial needs mutually
agreed upon in writing by Borrower and Lender in their sole and absolute
discretion, which Term Credit Facility is evidenced by that certain Multiple
Advance Note dated May 29, 1996 from Borrower to Lender in an amount not to
exceed $3,000,000 (the "Term Note"), and an additional $20,000,000 revolving
credit facility (the "Acquisitions Credit Facility") to finance acquisition of
complementary businesses, brand product lines, brand purchase contracts,
licensing agreements, and internal product research and development costs, which
Acquisitions Credit Facility is evidenced by that certain Acquisitions Revolving
Note dated November 22, 1996 from Borrower to Lender in an amount not to exceed
$20,000,000 (the "Original Acquisitions Revolving Note");
WHEREAS, the Revolving Loan and the Term Credit Facility expired unused on
the Termination Date and Lender has no further obligation to advance any sums
under the Revolving Loan or the Term Credit Facility;
WHEREAS, Borrower has requested that Lender increase the Acquisitions
Credit Facility to $25,000,000 and extend the term of the Credit Agreement and
Acquisitions Credit Facility for an additional two (2) years and make certain
modifications and amendments to the terms of the Credit Agreement and other Loan
Documents, and Lender is willing to do so on the terms and conditions contained
herein;
WHEREAS, on or about January 14, 1998, Lender agreed, in connection with
the next modification of the Credit Agreement, to amend and restate the Patent
Collateral Assignment and Security Agreement dated August 3, 1995, as amended,
and the Trademark, Tradename and Service ▇▇▇▇ Collateral Assignment and Security
Agreement dated August 3, 1995, as amended,
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to further confirm that the collateral was assigned by Borrower to Lender as
security rather than as an absolute assignment; and
WHEREAS, the origination fee paid by Borrower in connection with the
Second Amendment was fully amortized over the initial two-year term of the
Acquisitions Credit Facility and will not be applied as a credit to any
subsequent fees from Borrower to Lender;
NOW, THEREFORE, in consideration of the premises and the mutual covenants
contained herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Borrower and Lender, intending to
be legally bound, agree as follows:
1. INTERPRETATION. Except as otherwise defined herein, all capitalized
terms used herein shall have the meanings ascribed thereto in the Credit
Agreement.
2. RECITALS. The recitals set forth above are true and accurate in every
respect.
3. OUTSTANDING INDEBTEDNESS. As of November 22, 1998: the outstanding
principal balance of the Revolving Loan is $0.00 and the accrued and unpaid
interest on the Revolving Loan is $0.00; the outstanding principal balance of
the Term Credit Facility is $0.00 and the accrued and unpaid interest on the
Term Credit Facility is $0.00; and the outstanding principal balance of the
Acquisitions Credit Facility is $0.00 and the accrued and unpaid interest on the
Acquisitions Credit Facility is $0.00.
4. NO OFFSETS. Borrower acknowledges with respect to the amounts owing to
Lender that, as of the date of execution of this Amendment (which may be after
the effective date of this Agreement), Borrower has no offset, defense or
counterclaim with respect thereto, no claim or defense in the abatement or
reduction thereof, or any other claim against Lender or with respect to any
document forming part of the transaction in respect of which the Revolving Loan
or the Term Credit Facility was made or forming part of any other transaction
under which Borrower is indebted to Lender. Borrower acknowledges that all
interest imposed under the Revolving Note and the Term Note through the date of
execution hereof, and all fees and other charges that have been collected from
or known by Borrower to have been imposed upon Borrower with respect to the
Revolving Loan evidenced by the Revolving Note or the Term Credit Facility
evidenced by the Term Note were and are agreed to, and were properly computed
and collected, and that Lender has fully performed all obligations that it may
have had or now have to Borrower, and Lender has no obligation to make any
additional loan or extension of credit to or for the benefit of Borrower, except
as provided in the Credit Agreement, as amended by this Amendment.
5. REPRESENTATIONS AND WARRANTIES OF BORROWER. To induce Lender to enter
into this Amendment and the arrangement contemplated by this Amendment, Borrower
represents and warrants to Lender as follows:
(a) This Amendment and all other instruments executed and delivered
to Lender concurrently herewith, were executed in accordance with the
requirements of law and in accordance with any requirements of Borrower's
certificate of incorporation and bylaws and any amendments thereto.
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(b) The execution and delivery of this Amendment and any other
instruments executed and delivered to Lender concurrently herewith, and the full
and complete performance of the provisions hereof will not result in any breach
of, or constitute a default under, or result in the creation of any lien, charge
or encumbrance upon any property or assets of Borrower under any indenture,
mortgage, deed of trust, bank loan or credit agreement or other instrument to
which Borrower is a party or by which Borrower is bound.
(c) The Loan Documents executed by Borrower and this Amendment are
the legal, valid and binding obligations of Borrower enforceable against
Borrower in accordance with their terms.
(d) Except as previously disclosed to Lender in writing, there are
no actions, suits or proceedings pending or, to the knowledge of the Borrower,
threatened against or affecting Borrower or any of its Subsidiaries or the
properties of Borrower or any of its Subsidiaries before any court or
governmental department, commission, board, bureau, agency or instrumentality,
domestic or foreign, which, if determined adversely to the Borrower or any of
its Subsidiaries, would reasonably be expected to have a material adverse effect
on the financial condition, properties or operations of the Borrower or any
Subsidiaries and where such claim(s) exceed $200,000, individually, or $500,000
in the aggregate.
(e) Except for the sale of TRIAZ under an Applicable License,
Borrower has not derived ten percent (10%) or more of Borrower's Net Sales in
any Fiscal Year from any Applicable License as described in Section 6.14 of the
Credit Agreement.
(f) Except as disclosed by Borrower to Lender in writing
contemporaneously with the execution and delivery of this Amendment, Borrower
does not have any new patent applications pending since January 29, 1998 before
the PTO Office; and none of the pending patent applications as of January 29,
1998 and thereafter has yet been approved by the PTO Office.
(g) There are no oral agreements, understandings or course of
conduct that would modify, amend, rearrange, vary, diminish or impair the Loan
Documents or the obligation of Borrower to pay the indebtedness evidenced
thereby or to perform fully the obligations of Borrower in strict accordance
with the Loan Documents, or which would permit Borrower to void or avoid its
obligations in whole or in part.
(h) All of the respective representations and warranties made by
Borrower in the Loan Documents remain true, complete and correct as of the date
hereof, including, without limitation, the representations and warranties in
Section 5 of the Credit Agreement, except to the extent of any changes to such
representations and warranties previously disclosed in writing to Lender.
No representation or warranty made by Borrower and contained herein or in the
other Loan Documents, and no certificate, information or report furnished or to
be furnished by Borrower in connection with any of the Loan Documents or any of
the transactions contemplated hereby or thereby, contains or will contain a
misstatement of material fact, or omits or will omit to state a
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material fact required to be stated in order to make the statements contained
herein or therein not misleading in the light of the circumstances under which
such statements were made.
6. CONTINUED ENFORCEABILITY OF LOAN DOCUMENTS. Except as modified herein,
all of the terms and provisions of the Loan Documents remain in full force and
effect. In the event of any conflict between the terms and provisions of this
Amendment and the terms and provisions of the Loan Documents, the terms and
provisions of this Amendment shall govern and prevail. Borrower acknowledges,
confirms and ratifies the enforceability of the Credit Agreement, the
Acquisitions Revolving Note and the Loan Documents, as modified pursuant to this
Amendment, and the continuing validity, enforceability and priority of the liens
and security interests granted in the Loan Documents.
7. RELEASE OF CLAIMS.
(a) Borrower hereby releases Lender and its officers, employees and
agents from all claims and demands (known and unknown) it may have on the date
hereof arising out of or in any way relating to the extension or denial of
credit by Lender to Borrower or other matters relating to the indebtedness, any
collateral securing payment and performance of such indebtedness, or any matter
preliminary to the execution and delivery by Borrower and Lender of this
Amendment. The release set forth above shall not extend to any claim arising
after the date of execution hereof (which may be after the effective date of
this Agreement) to the extent based on acts or omissions of Lender occurring
after such date, except that such release is specifically intended by the
parties to include the transactions leading up to the execution of this
Amendment. This Amendment and the release provisions contained in this Section 7
are contractual, and not a mere recital.
(b) Borrower acknowledges and agrees that Lender is not, and shall
not be, obligated in any way to continue or undertake any loan, financing or
other credit arrangement with Borrower, including, without limitation, any
renewal of the indebtedness evidenced by the Loan Documents, except on the terms
and subject to the conditions set forth in the Loan Documents as hereby amended
and modified.
(c) Borrower understands and acknowledges that Lender and Account
Holder are separate and distinct corporate entities, as well as affiliate
corporations, and Borrower has knowingly and consciously made the determination
to proceed with the credit arrangements with Lender as provided in this Credit
Agreement and to maintain the investment advisor and custodian relationship with
Account Holder as provided in the Investment Agreement. Borrower (i) knowingly
waives and releases Lender for, from and against any claim, demand, cause of
action, liability, damages and expenses incurred by Borrower and (ii) covenants
and agrees that it will not claim, or attempt to claim, rights of setoff,
off-set, recoupment or the like against Lender, in the case of both clauses (i)
and (ii), arising out of, based upon, relating to, or otherwise occurring as a
result of, any acts or omissions of, or any breach of contract or tort or any
other theory of liability by, Account Holder. This provision is not intended to
affect any rights or remedies of Borrower against Lender pursuant to the Credit
Agreement.
8. CONDITIONS OF CLOSING. Lender's obligation to enter into this Amendment
and the other documents and instruments required hereunder shall be subject to
the satisfaction of all of
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the following conditions on or before December 31, 1998 (the "Closing" or the
"Closing Date") in a manner, form and substance satisfactory to Lender, which
conditions may be waived by Lender in writing in its sole and absolute
discretion.
(a) On the Closing Date, the representations and warranties of
Borrower set forth in the Loan Documents shall be true and correct in all
material respects when made and at and as of the time of the Closing.
(b) The following shall have been delivered to Lender, each duly
authorized, executed and acknowledged, where applicable:
(i) This Amendment.
(ii) A Replacement Acquisitions Revolving Note from Borrower
payable to the order of Lender in the principal amount of $25,000,000.
(iii) An Amended and Restated Patent Collateral Assignment
and Security Agreement.
(iv) An Amended and Restated Trademark, Tradename and Service
▇▇▇▇ Collateral Assignment and Security Agreement.
(v) The First Amendment to the Securities Account Pledge and
Security Agreement.
(vi) The First Amendment to Acknowledgment of Control of
Pledged Securities Account.
(c) Borrower shall have performed and complied in all material
respects with all agreements and conditions contained in the Loan Documents to
be performed by or complied with by Borrower prior to or at the Closing, and no
Event of Default or Default shall have occurred and be continuing or would occur
by Borrower entering into this Amendment and each condition precedent to the
effectiveness of each of the Loan Documents shall have been satisfied.
(d) Lender shall have received such documents as Lender shall
require to establish the proper organization and good standing of Borrower, the
authority of Borrower to execute this Amendment and any other documents or
instruments required hereunder, and evidence that all approvals and/or consents
of, or other action by, any shareholder, governmental agency or other Person
whose approval or consent is necessary or required to enable Borrower to (a)
enter into and perform its obligations under the Loan Documents and (b) grant to
Lender the Security Interests, have been obtained.
(e) All filings of Uniform Commercial Code financing statements and
other filings and actions necessary to perfect and maintain the Security
Interests as first, valid and perfected security interest in the Collateral
shall have been filed or taken (or such filings delivered for filing immediately
following the Closing, to Lender or a third party acceptable to Lender) and
confirmation thereof shall have been received by Lender.
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(f) Lender shall have determined to its satisfaction that, as of the
Closing Date, there has been no material adverse change in the financial
condition of Borrower from the financial statements dated as of September 30,
1998 and other documents submitted by Borrower to Lender prior to the Closing
Date.
(g) Borrower shall have paid to Lender an extension fee of $37,500,
which shall be fully earned and non-refundable upon Lender's execution and
delivery of this Amendment, and, when invoiced, Lender's reasonable attorneys'
fees and costs incurred in connection with this Amendment.
(h) Lender shall be satisfied that (a) Borrower has good and
indefeasible title to all of the Collateral and (b) Borrower at all times shall
be entitled to the use and quiet enjoyment of all assets necessary and desirable
for the continued ownership and operation of Borrower's business, including,
without limitation, the use of equipment, licenses, fixtures and warehouses.
(i) Lender shall have received an opinion of counsel to the
Borrower, addressed to Lender, with respect to the transactions contemplated by
this Amendment, in form and substance reasonably satisfactory to Lender and its
counsel.
9. DEFINITIONS. (a) The definitions of "Acquisitions Committed Amount",
"Acquisitions Credit Facility", "Acquisitions Revolving Note", "Borrowing Base"
and "Net Income" in Section 1.1 of the Credit Agreement are hereby deleted in
their entirety and the following inserted therefor:
"Acquisitions Committed Amount" means a principal amount of
$25,000,000.
"Acquisitions Credit Facility" means the revolving credit
facility in a principal amount not to exceed the Acquisitions
Committed Amount.
"Acquisitions Revolving Note" means that certain Replacement
Acquisitions Revolving Note dated November 22, 1998 from Borrower to
Lender in a principal amount not to exceed the Acquisitions
Committed Amount, and any note or notes taken in exchange or
replacement therefor and any modifications, renewals, extensions or
increases thereof.
"Borrowing Base" means seventy-five percent (75%) of the
Market Value of the Securities Accounts.
"Net Income" means, for any period, all income less costs and
expenses for the applicable period, determined in accordance with
GAAP, plus, to the extent deducted in initially determining Net
Income, any extraordinary, non-recurring acquisition expenses
reflected in the proforma consolidated financial statements provided
to Lender in connection with any acquisition transaction
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that is the subject of an Advance under the Acquisitions Credit
Facility.
and (b) Section 1.1 of the Credit Agreement is hereby amended to add the
following definitions in proper alphabetical order:
"Market Value of the Securities Accounts" means the value of
all of the financial assets in any Securities Accounts that
constitute Collateral securing the obligations of the Borrower in
which Lender holds a valid, enforceable first priority lien and
security interest, free and clear of any other liens, claims or
encumbrances, and, with respect to all such non-cash financial
assets, the value of such financial assets marked-to-market as of
the close of business on the last Banking Day of the immediately
preceding month.
"Maturity Date" means November 22, 2000.
"Securities Account" or "Securities Accounts" means,
individually or collectively, any "securities account" (as defined
in the Uniform Commercial Code, as adopted in the States of Arizona
and Minnesota, maintained by Borrower or any Affiliate of Borrower
with Norwest Bank Minnesota, National Association, pursuant to that
certain Investment Advisory Agreement dated as of October 17, 1996
(as it may be amended, modified, supplemented, rested, extended or
replaced from time to time) that constitute Collateral securing the
obligations of the Borrower in which Lender holds a valid,
enforceable first priority lien and security interest, free and
clear of any other liens, claims or encumbrances.
"Third Amendment" means that certain Third Amendment to Credit
and Security Agreement dated as of November 22, 1998 between
Borrower and Lender.
10. ADVANCES. (a) The preface to Section 2.1 of the Credit Agreement is
hereby deleted in its entirety and the following inserted therefor:
Section 2.1 Advances. The Lender agrees, on the terms and
subject to the conditions herein set forth, to make Advances to the
Borrower from time to time during the period from the date hereof to
and including the Maturity Date with respect to the Acquisitions
Credit Facility, or the earlier date of termination in whole of the
Acquisitions Credit Facility pursuant to Sections 2.4(a) or 8.2
hereof, in an aggregate principal amount at any time outstanding not
to exceed the lesser of (a) the Borrowing Base and (b) the
Acquisitions Committed Amount, which Advances shall be
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secured by the Collateral as provided in Article 3 hereof. The
Acquisitions Credit Facility shall be a revolving credit facility
and it is contemplated that the Borrower will request Advances, make
prepayments and request additional Advances thereunder, and it is
contemplated that Borrower will request Advances for financing
acquisition of complementary businesses, brand product lines, brand
purchase contracts, licensing agreements, and internal product
research and development costs and other purposes mutually agreed
upon in writing by Borrower and Lender in their sole and absolute
discretion, which Advances will be repaid in accordance with the
terms of this Agreement. The Borrower agrees to comply with the
following procedures in requesting Advances under this Section 2.1:
(b) Section 2.1(a) of the Credit Agreement is hereby deleted in its entirety and
the following inserted therefor:
(a) The Borrower will not request any Advance under this
Section 2.1 if, after giving effect to such requested Advance, the
sum of the outstanding and unpaid Advances under this Section 2.1 or
otherwise, would exceed the Borrowing Base.
and (c) Section 2.1(b) of the Credit Agreement is hereby deleted in its entirety
and the following inserted therefor:
(b) Each request for an Advance under this Section 2.1 shall
be made to the Lender prior to 11:00 a.m. (Phoenix time) of the day
of the requested Advance by the Borrower. Each request for an
advance may be made in writing or by telephone, specifying the date
of the requested Advance and the amount thereof, and shall be made
by (A) any officer of the Borrower; or (B) any person designated as
the Borrower's agent by any officer of the Borrower in a writing
delivered to the Lender; or (C) any person reasonably believed by
the Lender to be an officer of the Borrower or such a designated
agent.
11. NOTE. Section 2.2 of the Credit Agreement is hereby deleted in its
entirety and the following inserted therefor:
Section 2.2 Note. All Advances made by the Lender under this
Section 2.1 shall be evidenced by and repayable with interest in
accordance with the Acquisitions Revolving Note. The principal of
the Acquisitions Revolving Note shall be payable as provided herein
and on the earlier of the Maturity Date or acceleration by the
Lender pursuant to Section 8.2 hereof, and shall bear interest as
provided herein.
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12. INTEREST. Section 2.3(a) of the Credit Agreement is hereby deleted in
its entirety and the following inserted therefor:
(a) Except as otherwise provided in Section 2.13, clause (b),
the principal of the Loans outstanding from time to time during any
month shall bear interest (computed on the basis of actual days
elapsed in a 360-day year) at the Floating Rate; provided, however,
that from the first day of any month during which any Default or
Event of Default occurs or exists at any time, in the Lender's
discretion and without waiving any of its other rights and remedies,
the principal of the Loans outstanding from time to time shall bear
interest at the Default Rate during the entire Default Period; and
provided, further, that in any event no rate change shall be put
into effect which would result in a rate greater than the highest
rate permitted by applicable law. Interest accruing on the principal
balance of the Advances outstanding from time to time shall be
payable on the first day of each succeeding month and on the
Maturity Date, or earlier demand or prepayment in full. The Borrower
agrees that the interest rate contracted for includes the interest
rate set forth herein, plus any other charges or fees set forth
herein and costs and expenses incident to this transaction paid by
the Borrower to the extent the same are deemed interest under
applicable law. In the event, and on each occasion, that Lender
shall have determined that dollar deposits in the aggregate amount
of the Acquisition Credit Facility Advances are not generally
available in the London interbank market, or that the rates at which
such dollar deposits are being offered will not adequately and
fairly reflect the cost to Lender of making or maintaining the
outstanding Acquisitions Credit Facility Advances, or that
reasonable means do not exist for ascertaining the Floating Rate,
Lender shall, as soon as practicable thereafter, give written or
facsimile transmission notice of such determination to Borrower. In
the event of any such determination, until Lender shall have advised
Borrower that the circumstances giving rise to such notice no longer
exist, the interest rate on any outstanding Acquisitions Credit
Facility Advances shall be the Base Rate, as such Base Rate changes
from time to time, plus 125 basis points. Each determination by
Lender hereunder shall be conclusive absent manifest error.
13. MANDATORY PREPAYMENT. (a) Section 2.5(a) of the Credit Agreement is
hereby deleted in its entirety and the following inserted therefor:
Section 2.5 Remargining and Mandatory Prepayment of Credit
Facilities. (a) If, as of the end of any calendar month, the
Advances exceed the Borrowing Base due to a decrease in the Market
Value of the Securities Account, then, on or before five (5) Banking
Days after Borrower's receipt of written notice thereof,
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Borrower shall cause the aggregate outstanding principal amount of
the Advances to equal the Borrowing Base by (a) prepaying the
Advances to the extent necessary to reduce the sum of the
outstanding principal balance of the Advances to the Borrowing Base
or less, and/or (b) depositing additional cash or financial assets
into the Securities Accounts. Any payment received by the Lender
under this Section 2.5(a) or under Section 2.4 may be applied to the
Advances, including interest thereon and any fees, commissions,
costs and expenses due and unpaid hereunder and under the Security
Documents, in such order and in such amounts as the Lender, in its
discretion, may from time to time determine.
and (b) Section 2.5(b) of the Credit Agreement is hereby deleted in its entirety
and the following inserted therefor:
(b) Without notice or demand, except as provided in Section
2.5(a) above, if the sum of the outstanding principal balance of the
Advances shall at any time exceed the Borrowing Base, Borrower shall
within forty-eight (48) hours (excluding Saturdays, Sundays and
Holidays) thereof cause the aggregate outstanding principal amount
of the Advances to equal the Borrowing Base by (a) prepaying the
Advances to the extent necessary to reduce the sum of the
outstanding principal balance of the Advances to the Borrowing Base
or less, and/or (b) depositing additional cash or financial assets
into the Securities Accounts. Any payment received by the Lender
under this Section 2.5(b) or under Section 2.4 may be applied to the
Advances, including interest thereon and any fees, commissions,
costs and expenses due and unpaid hereunder and under the Security
Documents, in such order and in such amounts as the Lender, in its
discretion, may from time to time determine.
14. FEES. (a) Section 2.11(c) of the Credit Agreement is hereby deleted in
its entirety and the following inserted therefor:
Except as otherwise required by applicable laws or regulatory
or internal audit requirements, so long as no Advances are
outstanding and no Default or Event of Default has occurred and is
continuing, Lender shall not undertake any collateral audits or
inspections of the operations or business of the Borrower. To the
extent that Lender is required by applicable laws or regulatory or
internal audit requirements to undertake any collateral audits or
inspections of the operations or business of the Borrower when no
Advances are outstanding (and no Default or Event of Default has
occurred and is continuing), Borrower shall not be required to pay
any audit fees or out-of-pocket costs and expenses incurred by
Lender in connection therewith. Upon any request for an Advance
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by Borrower (but not as a condition to such Advance), Lender may
undertake a collateral audit and inspection of the operation and
business of the Borrower and so long as any Advance remains
outstanding (and provided that no Default or Event of Default has
occurred and is continuing), Lender shall not undertake more than
two (2) collateral audits or inspections of the operations or
business of the Borrower in any Fiscal Year and Borrower shall not
be required to pay any audit fees or out-of-pocket costs and
expenses incurred by Lender in connection therewith. Upon the
occurrence of a Default or Event of Default and during the
continuance thereof, Lender may undertake such collateral audits and
inspections of the operations or business of the Borrower as Lender
deems necessary in its sole and absolute discretion and the Borrower
hereby agrees to pay the Lender, on demand, audit fees of $60 per
hour (or the then applicable rate charged by Lender) per auditor in
connection with any such audits or inspections by the Lender of any
collateral or the corresponding operations or business of the
Borrower, together with all actual out-of-pocket costs and expenses
incurred in conducting any such audit or inspection.
and Section 2.11 is hereby amended to add the following:
(e) Borrower hereby agrees to pay to Lender an extension fee
of $37,500, which shall be fully earned and non-refundable upon
Lender's execution and delivery of the Third Amendment, and, when
invoiced, Lender's reasonable attorneys' fees and costs incurred in
connection with the Third Amendment.
15. CONDITIONS PRECEDENT TO THE INITIAL ADVANCE. Section 4.1 of the Credit
Agreement is hereby amended to add the following:
(dd) The Acquisitions Revolving Note in
the maximum principal amount of $25,000,000.
(ee) An amended and restated Patent Collateral
Assignment and Security Agreement, in form and substance reasonably
satisfactory to Lender.
(ff) An amended and restated Trademark, Tradename and
Service ▇▇▇▇ Collateral Assignment and Security Agreement, in form
and substance reasonably satisfactory to Lender.
(gg) A First Amendment to the Securities Account Pledge
and Security Agreement, in form and substance reasonably
satisfactory to Lender.
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(hh) A First Amendment to Acknowledgment of Control of
Pledged Securities Account, in form and substance reasonably
satisfactory to Lender.
(ii) A certificate of the Secretary or an Assistant
Secretary of the Borrower, certifying as to the resolutions of the
directors and, if required, the shareholders of the Borrower,
authorizing the execution, delivery and performance of the Third
Amendment, the Acquisitions Revolving Note, and all other documents
and instruments incident thereto and to the transactions
contemplated by the Third Amendment, reasonably satisfactory to
Lender and its counsel.
(jj) An opinion of counsel to the Borrower, addressed to
Lender, with respect to the transactions contemplated by the Third
Amendment, in form and substance reasonably satisfactory to Lender
and its counsel.
16. CONDITIONS PRECEDENT TO ALL ADVANCES. Section 4.2(c) of the Credit
Agreement is hereby deleted in its entirety and the following inserted therefor:
(c) Borrower has not been required to remargin the
Acquisitions Credit Facility by depositing additional cash or
financial assets into the Securities Accounts and/or by reducing the
outstanding principal balance of the Advances in any two (2)
consecutive months, pursuant to Section 2.5(a).
17. FINANCIAL CONDITION; NO ADVERSE CHANGE. Section 5.5 of the Credit
Agreement is hereby deleted in its entirety and the following inserted therefor:
Section 5.5 Financial Condition; No Adverse Change. The
Borrower has heretofore furnished to the Lender audited financial
statements of the Borrower for its Fiscal Year ended June 30, 1998
and such statements fairly present the financial condition of the
Borrower on the dates thereof and the results of its operations and
cash flows for the period then ended and were prepared in accordance
with generally accepted accounting principles applied in a
consistent manner. Since the date of such financial statements of
the Borrower, there has been no material adverse change in the
business, properties or condition (financial or otherwise) of the
Borrower.
18. NET INCOME AFTER TAXES. Section 6.12 of the Credit Agreement is hereby
deleted in its entirety and the following inserted therefor:
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Section 6.12 Net Income After Taxes. Borrower's Net Income
After Taxes, on a consolidated basis, shall be no less than the
following for the following periods:
=======================================================
PERIOD NET INCOME AFTER TAXES
-------------------------------------------------------
October 1, 1998 through $2,500,000
December 31, 1998
-------------------------------------------------------
January 1, 1999 through $8,000,000
June 30, 1999 and each six
month period thereafter
during the term of this
Agreement
=======================================================
19. CURRENT RATIO. Section 6.18 of the Credit Agreement is hereby deleted
in its entirety and the following inserted therefor:
Section 6.18 Current Ratio. During the term of this Agreement,
Borrower shall maintain on a consolidated basis, measured quarterly
as of the last day of each fiscal quarter commencing with the fiscal
quarter ending September 30, 1998, a Current Ratio of no less than
3:1.
20. CAPITAL EXPENDITURES. Section 7.10 of the Credit Agreement is hereby
deleted in its entirety and the following inserted therefor:
Section 7.10 INTENTIONALLY DELETED
21. PATENT APPLICATIONS. The list of all of Borrower's patent applications
filed with, and/or approved by, the PTO Office is attached hereto as Schedule 1
to this Amendment and such patent applications are hereby incorporated as
Exhibit F to the Credit Agreement and Schedule "A" to the Amended and Restated
Patent Collateral Assignment.
22. TRADEMARK, TRADENAME AND SERVICE ▇▇▇▇ APPLICATIONS. The list of all of
Borrower's trademark, tradename and service ▇▇▇▇ applications filed with, and/or
approved by, the PTO Office is attached hereto as Schedule 2 to this Amendment
and such trademark, tradename and service ▇▇▇▇ applications are incorporated as
Exhibit F to the Credit Agreement and Schedule "A" to the Amended and Restated
Trademark Collateral Assignment.
23. MISCELLANEOUS.
(a) Arbitration Agreement; Waiver of Right to Jury Trial. The
Agreement contains an arbitration provision, governing law provision and waiver
of right to jury trial. In the event of any dispute arising out of or related to
this Amendment, the provisions of Section 9.12 of the Agreement shall apply.
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(b) Voluntary Agreement. Borrower represents and warrants to Lender
that (i) it is, or has had the opportunity to be, represented by legal counsel
of its choice in regard to the transaction provided for by this Amendment and
that such counsel (if engaged) has explained the significance of the terms, and
the meaning and effect of this Amendment; (ii) it is fully aware and clearly
understands all of the terms and provisions contained in this Amendment; (iii)
it has voluntarily, with full knowledge and without coercion or duress of any
kind, entered into this Amendment and the documents executed in connection with
this Amendment; (iv) it is not relying on any representations, either written or
oral, express or implied, made to it by Lender other than as set forth in this
Amendment; and (v) the consideration received by Borrower to enter into this
Amendment and the arrangement contemplated by this Amendment has been actual and
adequate.
(c) Entire Agreement. This Amendment and the Loan Documents
constitute the entire agreement among the parties as to the agreements and
understandings contemplated by this Amendment. All parties to this Amendment
acknowledge that there are no agreements, understandings, warranties or
representations among the parties except as set forth in the Loan Documents and
this Amendment.
(d) Counterpart Execution. This Amendment may be executed in
counterparts, each of which shall be deemed an original document, and all of
which combined shall constitute a single document.
(e) Waiver. Neither this Amendment nor any of the provisions hereof
may be changed, waived, discharged or terminated, except by an instrument in
writing signed by the party against whom enforcement of the change, waiver,
discharge or termination is sought.
(f) Headings. Paragraph or other headings contained in this
Amendment are for reference purposes only and are not intended to affect in any
way the meaning or interpretation of this Amendment.
(g) Severability. If any clause or provision of this Amendment is
determined to be illegal, invalid, or unenforceable under any present or future
law by the final judgment of a court of competent jurisdiction, such clause or
provision shall be ineffective, but the remainder of this Amendment will not be
affected thereby.
(h) Binding Effect. All of the provisions of this Amendment shall be
binding upon and shall inure to the benefit of Borrower and Lender and their
permitted successors and assigns, including, without limitation, any successor
holder of any Note and any successor mortgagee/beneficiary under any security
document.
(i) Time of the Essence. Time is of the essence of each and every
provision under this Amendment.
(j) Amendment. Except as specifically set forth herein, the
Agreement and the other Loan Documents shall remain in full force and effect. In
the event of a conflict between the terms and provisions of this Amendment and
the terms and provisions of the Agreement, the terms and provisions of this
Amendment shall govern and control. Nothing
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contained in this Amendment is intended to or shall be construed as relieving
any person or entity, whether a party to this Amendment or not, of any of such
person's or entity's obligations to Lender.
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IN WITNESS WHEREOF, this Amendment is executed to be effective as of the
date first above written.
BORROWER:
MEDICIS PHARMACEUTICAL CORPORATION,
a Delaware corporation
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇.
------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇.
Title: Chief Financial Officer
Execution Date: November 22, 1998
LENDER:
NORWEST BANK ARIZONA, NATIONAL
ASSOCIATION, a national banking
association
By: /s/ ▇▇▇ ▇▇▇▇▇▇▇▇
------------------------------
Name: ▇▇▇ ▇▇▇▇▇▇▇▇
Title: Vice President
Execution Date: November 22, 1998
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SCHEDULE 1
18
SCHEDULE 2
