Exhibit 10.1

  

SECOND AMENDMENT TO CREDIT AGREEMENT

 

THIS SECOND AMENDMENT TO CREDIT AGREEMENT (this “Agreement”) is entered into as
of August 14, 2015 by and among IGI Laboratories, Inc., a Delaware corporation
(“IGI”), Igen Inc., a Delaware corporation (“Igen”), IGI Labs, Inc., a Delaware
corporation (“IGI Labs”) (IGI, Igen and IGI Labs are sometimes referred to
herein collectively as the “Borrowers” and individually as a “Borrower”),
General Electric Capital Corporation, as Agent, and the Lenders signatory
hereto.

 

WITNESSETH:

 

WHEREAS, Borrowers, Agent and the other Lenders from time to time party thereto
are parties to that certain Credit Agreement dated as of November 18, 2014 (as
amended pursuant to that certain First Amendment to Credit Agreement, dated as
of December 9, 2014, and as otherwise amended, restated, supplemented or
modified from time to time, the “Credit Agreement”; unless otherwise defined
herein, capitalized terms used herein that are not otherwise defined herein
shall have the respective meanings assigned to such terms in the Credit
Agreement, as amended hereby); and

 

WHEREAS, the Credit Parties have requested that the Agent and Lenders amend
certain provisions of the Credit Agreement, and, subject to the satisfaction of
the conditions set forth herein, the Agent and the Lenders signatory hereto are
willing to do so, on the terms set forth herein.

 

NOW, THEREFORE, in consideration of the mutual agreements, provisions and
covenants contained herein, the parties agree as follows:

 

1.          Amendments to Credit Agreement. Upon satisfaction of the conditions
set forth in Section 2 hereof, the Credit Agreement is hereby amended as
follows:

 

a.           Article VI (Financial Covenants) of the Credit Agreement is hereby
modified by amending and restating such Article in its entirety as follows:

 

ARTICLE VI.

FINANCIAL COVENANTS

 

Each Credit Party covenants and agrees that, so long as any Lender shall have
any Commitment hereunder, or any Loan or other Obligation (other than contingent
indemnification Obligations to the extent no claim giving rise thereto has been
asserted) shall remain unpaid or unsatisfied:

 

6.1           Fixed Charge Coverage Ratio. Commencing on the date on which a
Financial Covenant Period begins and measured as of the end of the twelve fiscal
month period ending on the last day of the Fiscal Quarter immediately preceding
the date on which such Financial Covenant Period begins, and as of the last day
of each Fiscal Quarter ending thereafter during such Financial Covenant Period,
the Credit Parties shall not permit the Fixed Charge Coverage Ratio to be less
than 1.25:1.00.

 

“Fixed Charge Coverage Ratio” shall be calculated in the manner set forth in
Exhibit 4.2(b).

 

6.2           Minimum Liquidity. The Credit Parties shall maintain Liquidity of
no less than the greater of $2,000,000 and 20% of the Aggregate Revolving Loan
Commitment at all times during a Financial Covenant Period.

 

 

 

 

b.           Section 11.1 (Defined Terms) of the Credit Agreement is hereby
amended by adding the following sentence to the end of the definition of
“Reserves” appearing therein:

 

“So long as any bailee shall be in possession of Collateral located at 4850
Mendenhall Road, Memphis, Tennessee and the Credit Parties shall not have
delivered a bailee waiver in respect thereof in form and substance reasonably
satisfactory to Agent, Agent shall maintain a reserve against Availability in an
amount equal to the greater of (i) $350,000 and (ii) the aggregate value of
Collateral at such location at any time of determination.”

 

c.           Section 11.1 (Defined Terms) of the Credit Agreement is hereby
amended by adding the following new definitions in the proper alphabetical
order:

 

“Commencement Date” means any date on which Liquidity is less than the
applicable Threshold Amount.

 

“Convertible Senior Notes” means those certain 3.75% convertible senior notes
due 2019 issued pursuant to that certain Indenture, dated as of December 16,
2014, between IGI, as issuer, and Wilmington Trust, National Association, as
trustee.

 

“Financial Covenant Period” means a period which shall commence on any
applicable Commencement Date and shall continue until the last day of the first
full fiscal month after such Commencement Date in which Liquidity shall not have
been less than the applicable Threshold Amount at any time.

 

“Second Amendment Effective Date” means August 14, 2015.

 

“Threshold Amount” means (x) prior to the repurchase or redemption of all
Convertible Senior Notes, $84,000,000, and (y) after the repurchase or
redemption of all Convertible Senior Notes, the greater of (i) $10,000,000 and
(ii) 50% of Liquidity measured immediately after such repurchase or redemption.

 

d.           Section (c) of Exhibit 4.2(b) (Form of Compliance Certificate) is
hereby modified by amending and restating such subsection in its entirety as
follows:

 

“(c)          [no Financial Covenant Period existed during that portion of the
period covered by the financial statements delivered in connection with this
certificate not already covered by a previously delivered Compliance
Certificate] [a Financial Covenant Period existed during that portion of the
period covered by the financial statements delivered in connection with this
certificate not already covered by a previously delivered Compliance Certificate
and Exhibit A hereto is a correct calculation of each of the financial covenants
contained in Article VI of the Credit Agreement, as applicable]; and”

 

2.          Conditions. The effectiveness of this Agreement is subject to the
satisfaction of the following conditions precedent:

 

a.           the execution and delivery of this Agreement by each Credit Party,
Agent and the Required Lenders; and

 

b.           the truth and accuracy of the representations and warranties
contained in Section 3 hereof.

 

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3.          Representations and Warranties. Each Credit Party hereby represents
and warrants to Agent and each Lender as follows:

 

a.           the execution, delivery and performance by each of the Credit
Parties of this Agreement have been duly authorized by all necessary action, and
do not and will not:

 

(i)          contravene the terms of any of that Person’s Organization
Documents;

 

(ii)         conflict with or result in any material breach or contravention of,
or result in the creation of any Lien under, any document evidencing any
material Contractual Obligation to which such Person is a party or any order,
injunction, writ or decree of any Governmental Authority to which such Person or
its Property is subject; or

 

(iii)        violate any material Requirement of Law in any material respect;

 

b.           such Credit Party has the power and authority to execute, deliver
and perform its obligations under this Agreement and the Credit Agreement, as
amended hereby;

 

c.           this Agreement constitutes the legal, valid and binding obligations
of each such Person which is a party hereto enforceable against such Person in
accordance with its terms, except as enforceability may be limited by applicable
bankruptcy, insolvency or similar laws affecting the enforcement of creditors’
rights generally or by equitable principles relating to enforceability;

 

d.           after giving effect to this Agreement and the transactions
contemplated hereby, each of the representations and warranties contained in the
Credit Agreement and the other Loan Documents is true and correct in all
material respects on and as of the date hereof as if made on the date hereof
(except for representations and warranties that speak as of a specific date,
which shall be true and correct as of such specific date); and

 

e.           no Default or Event of Default exists or would result from the
transactions contemplated by this Agreement.

 

4.          No Modification. Except as expressly set forth herein, nothing
contained herein shall be deemed to constitute a waiver of compliance with any
term or condition contained in the Credit Agreement or any of the other Loan
Documents or constitute a course of conduct or dealing among the parties. Except
as expressly stated herein, the Agent and Lenders reserve all rights, privileges
and remedies under the Loan Documents. Except as amended or consented to hereby,
the Credit Agreement and other Loan Documents remain unmodified and in full
force and effect. All references in the Loan Documents to the Credit Agreement
shall be deemed to be references to the Credit Agreement as modified hereby.
This Agreement shall constitute a Loan Document.

 

5.          Counterparts. This Agreement may be executed in any number of
counterparts and by different parties 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. Signature pages may be
detached from multiple separate counterparts and attached to a single
counterpart. Delivery of an executed signature page of this Agreement by
facsimile transmission or Electronic Transmission shall be as effective as
delivery of a manually executed counterpart hereof.

 

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6.          Successors and Assigns. The provisions of this Agreement shall be
binding upon and inure to the benefit of the parties hereto and their respective
successors and assigns; provided that none of the Credit Parties may assign or
transfer any of its rights or obligations under this Agreement without the prior
written consent of the Agent.

 

7.          Governing Law. The laws of the State of New York shall govern all
matters arising out of, in connection with or relating to this Agreement,
including, without limitation, its validity, interpretation, construction,
performance and enforcement (including, without limitation, any claims sounding
in contract or tort law arising out of the subject matter hereof and any
determinations with respect to post-judgment interest).

 

8.          Severability. The illegality or unenforceability of any provision of
this Agreement or any instrument or agreement required hereunder shall not in
any way affect or impair the legality or enforceability of the remaining
provisions of this Agreement or any instrument or agreement required hereunder.

 

9.          Captions. The captions and headings of this Agreement are for
convenience of reference only and shall not affect the interpretation of this
Agreement.

 

10.         Reaffirmation. Each of the Credit Parties as debtor, grantor,
pledgor, guarantor, assignor, or in other any other similar capacity in which
such Credit Party grants liens or security interests in its property or
otherwise acts as accommodation party or guarantor, as the case may be, hereby
(i) ratifies and reaffirms all of its payment and performance obligations,
contingent or otherwise, under each of the Loan Documents to which it is a party
(after giving effect hereto) and (ii) to the extent such Credit Party granted
liens on or security interests in any of its property pursuant to any such Loan
Document as security for or otherwise guaranteed the Borrower’s Obligations
under or with respect to the Loan Documents, ratifies and reaffirms such
guarantee and grant of security interests and liens and confirms and agrees that
such security interests and liens hereafter secure all of the Obligations as
amended hereby. Each of the Credit Parties hereby consents to this Agreement and
acknowledges that each of the Loan Documents remains in full force and effect
and is hereby ratified and reaffirmed. The execution of this Agreement shall not
operate as a waiver of any right, power or remedy of the Agent or Lenders,
constitute a waiver of any provision of any of the Loan Documents or serve to
effect a novation of the Obligations.

 

11.         Release of Claims. In consideration of the Lenders’ and the Agent’s
agreements contained in this Agreement, each Credit Party hereby irrevocably
releases and forever discharge the Lenders and the Agent and their affiliates,
subsidiaries, successors, assigns, directors, officers, employees, agents,
consultants and attorneys (each, a “Released Person”) of and from any and all
claims, suits, actions, investigations, proceedings or demands, whether based in
contract, tort, implied or express warranty, strict liability, criminal or civil
statute or common law of any kind or character, known or unknown, which such
Credit Party ever had or now has against Agent, any Lender or any other Released
Person which relates, directly or indirectly, to any acts or omissions of Agent,
any Lender or any other Released Person relating to the Credit Agreement or any
other Loan Document on or prior to the date hereof.

 

[Remainder of Page Intentionally Left Blank; Signature Pages Follow]

 

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IN WITNESS WHEREOF, each of the undersigned has executed this Agreement as of
the date set forth above.

 

  BORROWERS:           IGI LABORATORIES, INC.           By: /s/ Jenniffer
Collins     Name:

Jenniffer Collins

    Title: CFO & Secretary  

 

  IGEN INC.           By:

/s/ Jenniffer Collins

    Name:

Jenniffer Collins

    Title: CFO & Secretary  

 

  IGI LABS, INC.             By: /s/ Jenniffer Collins     Name: Jenniffer
Collins     Title: CFO & Secretary  

 

Second Amendment to Credit Agreement

 

 

 

 

  AGENT AND LENDERS:           GENERAL ELECTRIC CAPITAL CORPORATION, as Agent  
        By: /s/ Jason Dufour     Name:

Jason Dufour

    Title: Its Duly Authorized Signatory  

 

Second Amendment to Credit Agreement

 

 

 

 

  GE CAPITAL BANK,     as a Lender           By: /s/ Paul Sleet     Name: Paul
Sleet     Title: Duly Authorized Signatory  

 

Second Amendment to Credit Agreement