EXHIBIT 10.25

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AMERICAN PHARMACEUTICAL PARTNERS, INC.

TOTAL COMMITMENT INCREASE AGREEMENT AND

FIRST AMENDMENT TO CREDIT AGREEMENT

 

This Total Commitment Increase Agreement and First Amendment to Credit Agreement
(herein, the “Amendment”) is entered into as of August 2, 2005, by and among
American Pharmaceutical Partners, Inc., a Delaware corporation (the “Borrower”),
the Lenders party hereto, Fifth Third Bank, an Ohio banking corporation, as
Agent and L/C Issuer and Wachovia Bank, National Association, as Documentation
Agent.

 

PRELIMINARY STATEMENTS

 

A. The Borrower, the Lenders party thereto, Fifth Third Bank, an Ohio banking
corporation, as Agent and L/C Issuer, and Wachovia Bank, National Association,
as Documentation Agent, entered into a certain Credit Agreement, dated as of
September 2, 2004 (the “Credit Agreement”). All capitalized terms used herein
without definition shall have the same meanings herein as such terms have in the
Credit Agreement.

 

B. Pursuant to Section 2.1(b) of the Credit Agreement, the Borrower has the
option to request an increase of the Total Commitments, which are currently
$100,000,000, to an amount not to exceed $150,000,000. The Borrower desires to
increase the Total Commitments by $50,000,000 (resulting in Total Commitments of
$150,000,000), and Harris N.A. (the “New Lender”) and LaSalle Bank National
Association, Wachovia Bank, National Association and Fifth Third Bank (the
“Increasing Lenders”) desire to extend new commitments and increased
commitments, respectively, to the Borrower in an aggregate amount equal to such
increased amount pursuant to the terms and conditions set forth in this
Amendment.

 

C. In addition to increasing the Total Commitments, the Borrower and the Lenders
have agreed to amend the definition of Applicable Margin in the Credit Agreement
and extend the Termination Date for the Credit Agreement under the terms and
conditions set forth in this Amendment.

 

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency
of which is hereby acknowledged, the parties hereto agree as follows:

 

SECTION  1.     AMENDMENTS TO CREDIT AGREEMENT.

 

On and after the Effective Date (as defined in Section 3 of this Amendment), the
Credit Agreement shall be amended as follows:

 

1.1. The definitions of “Applicable Margin” and “Termination Date” appearing in
Section 1.1 of the Credit Agreement shall be amended and restated in their
entirety as follows:

 

“Applicable Margin” with respect to Loans, Reimbursement Obligations, and the
commitment fees and letter of credit fees

 

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payable under Section 2.11 hereof, means the rates per annum determined in
accordance with the following schedule:

 

LEVEL

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LEVERAGE RATIO
FOR SUCH
PRICING DATE

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   APPLICABLE MARGIN FOR
BASE RATE LOANS AND
REIMBURSEMENT
OBLIGATIONS SHALL BE:

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  APPLICABLE MARGIN FOR
EURODOLLAR LOANS AND
LETTER OF CREDIT FEE
SHALL BE:

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  APPLICABLE MARGIN FOR
COMMITMENT FEE
SHALL BE:

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I

   Less than 1.00 to 1.0    -.50%   .75%   .20%

II

   Less than 1.50 to 1.0, but greater than or equal to 1.00 to 1.0    -.50%  
.875%   .20%

III

   Less than 2.00 to 1.0, but greater than or equal to 1.50 to 1.0    0.00%  
1.00%   .20%

IV

   Less than 2.50 to 1.0, but greater than or equal to 2.00 to 1.0    0.00%  
1.37%   .25%

V

   Greater than or equal to 2.50 to 1.0    0.00%   1.625%   .30%

 

For purposes hereof, the term “Pricing Date” means, for any fiscal quarter of
the Borrower ending on or after September 30, 2004, the date on which the Agent
is in receipt of the Borrower’s financial statements (and, in the case of the
year-end financial statements, audit report) for the most recently ended fiscal
quarter, pursuant to Section 6.1 hereof. The Applicable Margin shall be
established based on the Leverage Ratio for the most recently completed fiscal
quarter and the Applicable Margin established on a Pricing Date shall remain in
effect until the next Pricing Date. If the Borrower has not delivered its
financial statements by the date such financial statements (and, in the case of
the year-end financial statements, audit report) are required to be delivered
under Section 6.1 hereof, from the due date of such financial statements (and,
if applicable, audit report) until such financial statements (and, if
applicable, audit report) are delivered, the Applicable Margin shall be raised
one level from the existing Applicable Margin level. If the Borrower
subsequently delivers such financial statements before the next Pricing Date,
the Applicable Margin established by such late delivered financial statements
shall take effect from the date of delivery until the next Pricing Date. In all
other circumstances, the Applicable Margin established by such financial
statements shall be in effect from the Pricing Date that occurs after the end of
the fiscal quarter covered by such financial statements until the next Pricing
Date. Each determination of the Applicable Margin made

 

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by the Agent in accordance with the foregoing shall be presumptively correct
absent manifest error.

 

“Termination Date” means September 1, 2008, or such earlier date on which the
Commitments are terminated in whole pursuant to Section 2.9, 7.2 or 7.3 hereof.

 

1.2. Schedules 5.18 and 6.14 to the Credit Agreement shall be restated in their
entirety by Schedules 5.18 and 6.14 attached hereto.

 

SECTION  2.     TOTAL COMMITMENTS INCREASE.

 

2.1. On and after the Effective Date and subject to and in accordance with the
terms and conditions of this Amendment and the Credit Agreement, in respect of
the interest in, and to all of the rights and obligations of a Lender under, the
Credit Agreement and all other Loan Documents, the New Lender hereby becomes a
Lender under the Credit Agreement and each of the Increasing Lenders increases
its respective Commitment so that (i) Schedule 1 to the Credit Agreement shall
be restated in its entirety by Schedule 1 attached hereto and (ii) the
definition of Total Commitments appearing in Section 1.1 of the Credit Agreement
shall be restated in its entirety to read as follows:

 

“Total Commitments” means the aggregate amount of the Commitments which shall be
One Hundred Fifty Million Dollars ($150,000,000); as such amount may be
decreased pursuant to the provisions of (a) Section 2.9 or (b) other applicable
provisions of this Agreement.

 

2.2. The New Lender (a) represents and warrants that (i) it has full power and
authority to become a Lender under the Credit Agreement, (ii) from and after the
Effective Date, it shall be bound by the provisions of the Credit Agreement as a
Lender thereunder and, to the extent of its Commitment, shall have the
obligations of a Lender thereunder, (iii) agrees that its payment instructions
and notice instructions are as set forth in Schedule 2 to this Agreement, (iv)
confirms it has received a copy of the Credit Agreement, together with copies of
financial statements and such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into this
Agreement and to extend its Commitment on the basis of which it has made such
analysis and decision independently and without reliance on the Agent or any
other Lender, and (v) attached as part of Schedule 2 to this Agreement is any
documentation required to be delivered by such New Lender with respect to its
tax status pursuant to the terms of the Credit Agreement, duly completed and
executed by such New Lender and (b) agrees that (i) it will, independently and
without reliance on the Agent or any other Lender, and based on such documents
and information as it shall deem appropriate at the time, continue to make its
own credit decisions in taking or not taking action under the Loan Documents,
and (ii) it will perform in accordance with their terms all of the obligations
which by the terms of the Credit Documents are required to be performed by it as
a Lender.

 

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SECTION  3.     CONDITIONS PRECEDENT.

 

This Amendment shall become effective on that date (the “Effective Date”) that
all of the following conditions precedent are satisfied:

 

3.1. The Borrower and the Lenders shall have executed and delivered this
Amendment.

 

3.2. The Borrower shall have executed and delivered Revolving Notes payable to
the New Lender and the Increasing Lenders in the amounts set forth next to their
names below:

 

LENDER

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   AMOUNT OF
REVOLVING NOTE

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Harris N.A.

   $ 25,000,000

LaSalle Bank National Association

   $ 20,000,000

Wachovia Bank, National Association

   $ 35,000,000

Fifth Third Bank

   $ 40,000,000

 

The Increasing Lenders shall promptly mark “cancelled” and return to the
Borrower the previous Revolving Notes delivered to the Increasing Lenders in
connection with the Credit Agreement.

 

3.3. The Agent shall have received a certificate of the Borrower acceptable to
the Agent dated as of the date of this Amendment certifying as of the date of
this Amendment (A) resolutions of the Board of Directors of the Borrower with
respect to the transactions herein contemplated and (B) a true and correct copy
of the organizational documents of the Borrower.

 

3.4. The Agent shall have received favorable written opinions of Morrison &
Foerster LLP, counsel for the Borrower, and of the in-house counsel of the
Borrower, each in a form reasonably acceptable to the Agent, dated as of the
date of this Amendment.

 

3.5. Legal matters incident to the execution and delivery of this Amendment
shall be satisfactory to the Agent and its counsel.

 

SECTION  4.     REPRESENTATIONS AND WARRANTIES.

 

The Borrower represents and warrants to the Lenders that (i) each of the
representations and warranties set forth in Section 5 of the Credit Agreement is
true and correct on and as of the date of this Amendment after giving effect to
this Amendment as if made on and as of the date hereof and as if each reference
therein to the Credit Agreement referred to the Credit Agreement as amended
hereby (except that the representations and warranties contained in Section 5.3
shall be deemed to refer to the most recent financial statements of the Borrower
delivered to the Agent, and any representations and warranties that refer to a
specific date shall be true and correct as of such date); (ii) as of the
Effective Date, no Default or Event of Default exists or shall result after
giving effect to this Amendment; and (iii) without limiting the effect of the

 

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foregoing, the Borrower’s execution, delivery and performance of this Amendment
has been duly authorized, and this Amendment has been executed and delivered by
duly authorized officers of the Borrower.

 

SECTION  5.     MISCELLANEOUS.

 

5.1. Except as specifically amended herein, the Credit Agreement shall continue
in full force and effect in accordance with its original terms. Reference to
this specific Amendment need not be made in the Credit Agreement or any other
Loan Document, or in any certificate, letter or communication issued or made
pursuant to or with respect to any Loan Document, any reference in any of such
items to the Credit Agreement being sufficient to refer to the Credit Agreement
as amended hereby.

 

5.2. The Borrower agrees to pay on demand all reasonable costs and expenses of
or incurred by the Agent in connection with the negotiation, preparation,
execution and delivery of this Amendment, including the reasonable fees and
expenses of counsel for the Agent.

 

5.3. This Amendment may be executed in any number of counterparts and by
different parties hereto on separate counterpart signature pages, each of which
when so executed shall be an original but all of which shall constitute one and
the same instrument. This Amendment shall be governed by the internal laws of
the State of Illinois.

 

5.4. On the Effective Date, the Lenders each agree to make such purchases and
sales of interests in the outstanding Loans and interests in outstanding Swing
Loans and Letters of Credit between themselves so that each Lender is then
holding its Percentage of outstanding Revolving Loans and interests in Swing
Loans and Letters of Credit. Such purchases and sales shall be arranged through
the Agent and each Lender hereby agrees to execute such further instruments and
documents, if any, as the Agent may reasonably request in connection therewith.
The payment of interest and letter of credit fees after the Effective Date shall
be paid in amounts adjusted to reflect the adjustments of the respective
Commitments and Percentages of the Loans and Letter of Credit as of the
Effective Date.

 

5.5. Each Lender represents and warrants that is has full power and authority,
and has taken all action necessary, to execute and deliver this Agreement and to
consummate the transactions contemplated hereby.

 

[SIGNATURE PAGES TO FOLLOW]

 

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IN WITNESS WHEREOF, the parties hereto have caused their duly authorized
officers to execute and deliver this Total Increase Agreement and First
Amendment to Credit Agreement as of the date first set forth above.

 

“BORROWER”

AMERICAN PHARMACEUTICAL PARTNERS, INC.

By  

/s/ Nicole Williams

   

Name:

 

Nicole Williams

   

Title:

 

CFO

“LENDERS”

FIFTH THIRD BANK, an Ohio banking corporation, as Agent and L/C Issuer and as a
Lender

By  

/s/ Gregory D. Amoroso

   

Name:

 

Gregory D. Amoroso

   

Title:

 

Vice President

WACHOVIA BANK, NATIONAL ASSOCIATION, as a Lender and as Documentation Agent

By  

/s/ Katharine Kappler

   

Name:

 

Katharine Kappler

   

Title:

 

Vice President

 

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MERRILL LYNCH BUSINESS FINANCIAL SERVICES, INC., as a Lender

By:  

/s/ David J. Mitchell

   

Name:

 

David J. Mitchell

   

Title:

 

Vice President

CIBC Inc., as a Lender

By  

/s/ Gerald Girardi

   

Name:

 

Gerald Girardi

   

Title:

  Executive Director, CIBC World Markets Corp, as Agent

LASALLE BANK NATIONAL ASSOCIATION, as a Lender

By  

/s/ James L. Rocke

   

Name:

 

James L. Rocke

   

Title:

  Senior Vice President and Division Head

HARRIS N.A., as a Lender

By  

/s/ Mark W. Piekos

   

Name:

 

Mark W. Piekos

   

Title:

  Director