Ex-10.1



 






Exhibit 10.1




WAIVER AND CONSENT




     WAIVER AND CONSENT, dated as of March 28, 2005 (this “Waiver”), with respect to the
Financing Agreement, dated as of April 23, 2004 (as amended, restated or otherwise modified from
time to time, the “Financing Agreement”), by and among aaiPharma Inc., a Delaware
corporation (the “Parent”), Applied Analytical Industries Learning Center, Inc., a Delaware
corporation (“Applied Analytical”), AAI Technologies, Inc., a Delaware corporation
(“AAI Technologies”), AAI Properties, Inc., a North Carolina corporation (“AAI
Properties”), AAI Japan, Inc., a Delaware corporation (“AAI Japan”), Kansas City
Analytical Services, Inc., a Kansas corporation (“Analytical Services”), AAI Development
Services, Inc., a Massachusetts corporation (“AAI Development-MA”), aaiPharma LLC, a
Delaware limited liability company (“Pharma LLC”) and AAI Development Services, Inc., a
Delaware corporation (“AAI Development-DE”, and together with the Parent, Applied
Analytical, AAI Technologies, AAI Properties, AAI Japan, Analytical Services, AAI Development-MA
and Pharma LLC, each a “Borrower” and collectively, the “Borrowers”), the financial
institutions from time to time party hereto (each a “Lender” and collectively, the
“Lenders”), Silver Point Finance, LLC, a Delaware limited liability company (“Silver
Point”), as collateral agent for the Lenders (in such capacity, and any successor in such
capacity, the “Collateral Agent”), and Bank of America, N.A. (“Bank of America”),
as administrative agent for the Lenders (in such capacity, and any successor in such capacity, the
“Administrative Agent” and together with the Collateral Agent, each an “Agent” and
collectively, the “Agents”).



     WHEREAS, the Borrowers have advised the Agents and the Lenders that they received federal tax
refunds on Thursday, March 24, 2005 in the aggregate amount of $11,287,279.75 (the “Tax
Refund”);



     WHEREAS, pursuant to Section 2.05(c) and Section 2.05(d) of the Financing Agreement, all of
the Net Cash Proceeds of the Tax Refund (subject to certain exceptions contained in such Sections)
are required to be applied to the Term Loan;



     WHEREAS, the Agents and the Lenders may be willing to permit the Borrowers to retain all or a
portion of the Net Cash Proceeds of the Tax Refund on terms that have not yet been agreed upon; and



     WHEREAS, until such time as an alternate application of the Net Cash Proceeds of the Tax
Refund has been agreed upon by the Borrowers, the Agents and the Lenders, if any, the Borrowers,
the Agents and the Lenders have agreed that the Net Cash Proceeds of the Tax Refund may be held in
a Collection Account subject to the dominion and control of the Administrative Agent upon the terms
and conditions set forth herein;



     NOW, THEREFORE, the Borrowers, the Agents and the Lenders hereby agree as follows:



     1.      Capitalized Terms. All terms which are defined in the Financing Agreement and not
otherwise defined herein are used herein as defined therein.



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     2.      Waiver and Consent.



            (a)      Pursuant to the request of the Borrowers and in accordance with Section 12.02 of the
Financing Agreement, for the period commencing on the effective date of this Waiver and ending on
the earlier to occur of (i) March 31, 2005 and (ii) the date on which the Borrowers, the Agents and
the Lenders agree in writing upon an alternate application of the Net Cash Proceeds of the Tax
Refund (the “Waiver Period”), the Agents and the Lenders hereby agree that the Net Cash
Proceeds of the Tax Refund shall not be required to be applied (and the Agents and the Lenders
shall not apply such Net Cash Proceeds) to the Term Loan pursuant to Section 2.05(c) and Section
2.05(d) of the Financing Agreement; provided, that (A) the Net Cash Proceeds of the Tax
Refund (x) are held by the Borrowers in Account No. 24900272 with Banc of America Securities LLC
(the “Designated Account”), which Designated Account is subject to that certain Collateral
Account Notification and Acknowledgement Agreement, dated as of May 21, 2004 (the “Securities
Account Control Agreement”), among the Parent, the Collateral Agent and Banc of America
Securities LLC (the “Securities Intermediary”), and (y) may not be used by the Borrowers
for any purpose whatsoever and (B) the Collateral Agent delivers to the Securities Intermediary a
“Notice of Exclusive Control” under the Securities Account Control Agreement with respect to the
amount of the Tax Refund held in the Designated Account.



            (b)      Upon the expiration of the Waiver Period, the waiver and consent provided for herein shall
immediately (without cure period) and automatically terminate in its entirety and be of no further
force or effect and, except in the case of the expiration of the Waiver Period pursuant to clause
(a)(ii) above, all Net Cash Proceeds of the Tax Refund required to be applied to the Term Loan
pursuant to Section 2.05(c) and Section 2.05(d) of the Financing Agreement shall be applied by the
Borrowers to the Term Loan pursuant to such Sections.



            (c)      The waiver and consent in this Section 2 shall be effective only in this specific
instance, for the specific purpose, and for the specific period set forth herein and does not allow
for any other or further departure from the terms and conditions of the Financing Agreement or any
other Loan Document, which terms and conditions shall continue in full force and effect.



     3.      Notice of Exclusive Control. The Borrowers hereby acknowledge and agree that,
notwithstanding anything to the contrary contained in the Financing Agreement, the Securities
Account Control Agreement or any other Loan Document, the Collateral Agent is hereby authorized by
the Borrowers to deliver the “Notice of Exclusive Control” attached hereto as Annex I to
the Securities Intermediary immediately upon the effectiveness of this Waiver.



     4.      Conditions. This Waiver shall become effective only upon receipt by the Collateral
Agent of counterparts of this Waiver, duly executed by the Borrowers, the Agents and the Lenders.



     5.      Continued Effectiveness of the Financing Agreement.



            (a)      Ratifications. Except as otherwise expressly provided herein, (i) the Financing
Agreement and the other Loan Documents are, and shall continue to be, in full force and effect and
are hereby ratified and confirmed in all respects, (ii) to the extent that the



 









 




Financing Agreement
or any other Loan Document purports to pledge to any Agent, or to grant to any Agent a security
interest in or lien on, any collateral as security for the Obligations, such pledge or grant of a
security interest or lien is hereby ratified and confirmed in all respects, and (iii) the
execution, delivery and effectiveness of this Waiver shall not operate as an amendment of any
right, power or remedy of the Agents or the Lenders under the Financing Agreement or any other Loan
Document, nor constitute an amendment of any provision of the Financing Agreement or any other Loan
Document.




            (b)      No Waivers. Except as otherwise expressly provided herein, this Waiver is not a
waiver of, or consent to, any Default or Event of Default now existing or hereafter arising under
the Financing Agreement or any other Loan Document and the Agents and the Lenders expressly reserve
all of their rights and remedies under the Financing Agreement and the other Loan Documents, under
applicable law or otherwise.



     6.      Miscellaneous.



            (a)      Counterparts. This Waiver may be executed in any number of counterparts and by
different parties hereto in separate counterparts, each of which shall be deemed to be an original,
but all of which taken together shall constitute one and the same agreement. Delivery of an
executed counterpart of this Waiver by telefacsimile or electronic mail shall be equally effective
as delivery of an original executed counterpart of this Waiver.



            (b)      Headings. Section and paragraph headings herein are included for convenience of
reference only and shall not constitute a part of this Waiver for any other purpose.



            (c)      Governing Law. This Waiver shall be governed by, and construed in accordance
with, the laws of the State of New York.



            (d)      Expenses. The Borrowers will pay on demand all reasonable fees, costs and
expenses of the Agents in connection with the preparation, execution and delivery of this Waiver
and all documents incidental hereto, including, without limitation, the reasonable fees,
disbursements and other charges of Schulte Roth & Zabel LLP, counsel to the Collateral Agent.



[Remainder of this page intentionally left blank]




 









 








     IN WITNESS WHEREOF, the parties hereto have caused this Waiver and Consent to be
executed by their respective officers thereunto duly authorized, as of the date first above
written.



	 	 	 	 	 
	 	 	BORROWERS:


 

 
AAIPHARMA INC.
	 	 	 	 	 
	 	 	
By:
	 	/s/ Matthew E. Czajkowski


Name: Matthew E. Czajkowski

Title: Chief Financial Officer






	 	 	 	 	 
	 	 	APPLIED ANALYTICAL INDUSTRIES LEARNING CENTER, INC.
	 	 	 	 	 
	 	 	
By:
	 	/s/ Albert N. Cavagnaro


Name:

Title:






	 	 	 	 	 
	 	 	AAI TECHNOLOGIES, INC.
	 	 	 	 	 
	 	 	
By:
	 	/s/ Albert N. Cavagnaro


Name:

Title:






	 	 	 	 	 
	 	 	AAI PROPERTIES, INC.
	 	 	 	 	 
	 	 	
By:
	 	/s/ Albert N. Cavagnaro


Name:

Title:






	 	 	 	 	 
	 	 	AAI JAPAN, INC.
	 	 	 	 	 
	 	 	
By:
	 	/s/ Albert N. Cavagnaro


Name:

Title:






	 	 	 	 	 
	 	 	KANSAS CITY ANALYTICAL SERVICES, INC.
	 	 	 	 	 
	 	 	
By:
	 	/s/ Albert N. Cavagnaro


Name:

Title:






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	 	 	AAI DEVELOPMENT SERVICES, INC.
	 	 	 	 	 
	 	 	
By:
	 	/s/ Albert N. Cavagnaro


Name:

Title:






	 	 	 	 	 
	 	 	AAIPHARMA LLC
	 	 	 	 	 
	 	 	
By:
	 	/s/ Albert N. Cavagnaro


Name:

Title:






	 	 	 	 	 
	 	 	AAI DEVELOPMENT SERVICES, INC.
	 	 	 	 	 
	 	 	
By:
	 	/s/ Albert N. Cavagnaro


Name:

Title:






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	 	 	COLLATERAL AGENT:

 

 
SILVER POINT FINANCE, LLC,

as Collateral Agent
	 	 	 	 	 
	 	 	
By:
	 	/s/ Jeffrey A. Gelfand


Name: Jeffrey A. Gelfand

Title: Authorized Signatory






	 	 	 	 	 
	 	 	ADMINISTRATIVE
AGENT:
 

 
BANK OF AMERICA, N.A.,

as Administrative Agent
	 	 	 	 	 
	 	 	
By:
	 	/s/ Annie Cuenco


Name: Annie Cuenco

Title: Assistant Vice President






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	 	 	LENDERS:
 


BANK OF AMERICA, N.A.,

as L/C Issuer
	 	 	 	 	 
	 	 	
By:
	 	/s/ Timothy L. Isom


Name: Timothy L. Isom

Title: Vice President






	 	 	 	 	 
	 	 	BANK OF AMERICA, N.A.,

as a Lender
	 	 	 	 	 
	 	 	
By:
	 	/s/ Jonathan M. Barnes


Name: Jonathan M. Barnes

Title: Associate






	 	 	 	 	 
	 	 	SEA PINES FUNDING LLC,

as a Lender
	 	 	 	 	 
	 	 	
By:
	 	/s/ Meredith J. Koslick


Name: Meredith J. Koslick

Title: Assistant Vice President






	 	 	 	 	 
	 	 	TRS THEBE LLC,

as a Lender
	 	 	 	 	 
	 	 	
By:
	 	/s/ Edward Schaffer


Name: Edward Schaffer

Title: Vice President






	 	 	 	 	 
	 	 	SIL LOAN FUNDING LLC,

as a Lender
	 	 	 	 	 
	 	 	
By:
	 	/s/ Jason Trala


Name: Jason Trala

Title: Attorney-in-Fact






	 	 	 	 	 
	 	 	SPCP GROUP LLC,

as a Lender
	 	 	 	 	 
	 	 	
By:
	 	/s/ Jeffrey A. Gelfand


Name: Jeffrey A. Gelfand

Title: Authorized Signatory






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	 	 	SPF CDO I, LLC,

as a Lender
	 	 	 	 	 
	 	 	
By:
	 	/s/ Jeffrey A. Gelfand


Name: Jeffrey A. Gelfand

Title: Authorized Signatory






	 	 	 	 	 
	 	 	GOLDMAN SACHS CREDIT PARTNERS L.P.,

as a Lender
	 	 	 	 	 
	 	 	
By:
	 	/s/ Mark DeNatale


Name: Mark DeNatale

Title: Authorized Signatory






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ANNEX I




SILVER POINT FINANCE, LLC

600 Steamboat Road

Greenwich, Connecticut 06830




NOTICE OF EXCLUSIVE CONTROL




BY FACSIMILE TRANSMISSION

((704) 335-6727) AND CERTIFIED MAIL



Banc of America Securities LLC

Mutual Fund Operations

NCI-004-03-46

200 North College Street

Charlotte, NC 28255



	 	 	 
	Re:

	 	aaiPharma Inc.

Account No. 24900272





Ladies and Gentlemen:



As referenced in the Collateral Account Notification and Acknowledgment, dated as of May 21, 2004
(“Agreement”), among aaiPharma Inc., Silver Point Finance, LLC, as collateral agent, and
Banc of America Securities LLC, we hereby give you notice that we are exercising exclusive control
over securities account number 24900272 (the “Collateral Account”) with respect to the
amount of $11,287,279.75 (the “Controlled Amount”) held in the Collateral Account. We
hereby instruct you to comply only with orders and instructions regarding the Collateral Account
and the Collateral from us to the extent of the Controlled Amount.



Capitalized terms used in this notice and not defined herein have the meanings assigned in the
Agreement.




Very truly yours,



Silver Point Finance, LLC, as collateral agent



By:
________________________


Name: ______________________


Title: _______________________



cc: aaiPharma Inc.




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