Document:

Exhibit 10.22(e)

 

MODIFICATION OF CREDIT AGREEMENT

AND WAIVER

 

 

THIS MODIFICATION OF CREDIT
AGREEMENT (“Modification”) is made as of the 20th day of December, 2004 (the “Effective
Date”), by and between SOUTHTRUST BANK,
an Alabama corporation, formerly known as SouthTrust Bank, National Association
acting as a Lender and as Administrative Agent and Funding Agent (collectively “Agent”)
pursuant to the Credit Agreement (defined below), WACHOVIA
BANK, NATIONAL ASSOCIATION, a national banking association, formerly
known as First Union National Bank, a national banking association, acting as a
lender, (together, the “Lenders”), and TODHUNTER INTERNATIONAL,
INC., a Delaware corporation (the “Borrower”)

 

W I T N E S S E T H:

 

WHEREAS, On October 19,
2001, Agent, Lenders and Borrower entered into an Amended and Restated Credit
Agreement (as subsequently amended, “Credit Agreement”) in connection with
Revolving Loans, Term Loans and Letters of Credit made available by Lenders,
and other lenders, to Borrower in an aggregate commitment that is currently of
$43,000,000.00; and

 

WHEREAS, Borrower has requested
Agent and Lenders to make certain modifications to the Credit Agreement and to
waive compliance with certain covenants in the Credit Agreement; and

 

WHEREAS, Lenders and Agent are
willing to amend the Credit Agreement and to waive such compliance on the terms
and conditions set forth in this Modification.

 

NOW, THEREFORE, in
consideration of mutual promises and covenants of this Modification and for
other good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, Lenders, Agent and Borrower agree as follows:

 

1.             Recitals.  The foregoing recitals are true and correct
and by this reference are made a material part of this Modification.  All capitalized terms used herein shall have
the meaning ascribed to them in the Credit Agreement unless the context shall
require otherwise.

 

2.             Lenders.  SouthTrust Bank and Wachovia Bank, National
Association are the sole Lenders, having received by assignment and mutual
agreement the Loan interests of the other lenders heretofore a party to the
Credit Agreement as Lenders.  As of the
Effective Date hereof, the Credit Percentage of SouthTrust Bank is 55.5556% and
the Credit Percentage of Wachovia Bank, National Association is 44.4444%.

 

3.             Waiver.  Subject to the terms of this Modification, Lenders
hereby agree to waive compliance with the provisions of Section 11.03
(Fixed Charge Coverage) and Section 11.05 (Funded Debt to EBITDA) of the
Credit Agreement as of the fiscal year ending September 30, 2004 and as of
the fiscal quarter ending December 31, 2004.

 

 

4.             Minimum
Fixed Charge Coverage Ratio.  Figures
used in the calculation of the Minimum Fixed Charge Coverage Ratio under
Section 11.03 for the fiscal quarters ending March 31, 2005 through
September 30, 2005 shall be actual year-to-date numbers.  Commencing with the fiscal quarter ending
December 31, 2005, the calculation will be made on a rolling four-quarter
basis.  The Minimum Fixed Charge Coverage
Ratio for fiscal quarter ending March 31, 2005 shall be 0.75 to 1 and for
fiscal quarter ending June 30, 2005 and each fiscal quarter thereafter
shall be 1:00 to 1.

 

5.             Maximum
Funded Debt to EBITDA Ratio.  Figures
used in the calculation of EBITDA for purposes of the Maximum Funded Debt to
EBITDA Ratio under Section 11.05 for the fiscal quarters ending
March 31, 2005 through September 30, 2005 shall be year-to-date
results annualized, net of federal income taxes.  Commencing with the fiscal quarter ending
December 31, 2005, the calculation will be made on a rolling four-quarter
basis.  The table in Section 11.05
is replaced in its entirety with the following:

 

	
  Ratio

  	
   

  	
  For
  Fiscal Quarter Ending

  
	
   

  	
   

  	
   

  
	
  4:00 to 1

  	
   

  	
  March 31, 2005

  
	
  3:25 to 1

  	
   

  	
  June 30, 2005

  
	
  3:25 to 1

  	
   

  	
  September 30, 2005

  
	
  3:00 to 1

  	
   

  	
  December 31, 2005 and each fiscal quarter
  thereafter

  

 

6.             Maturity.  The maturity date for all Obligations, unless
due sooner pursuant to the terms of the Credit Agreement, shall be
January 31, 2006.

 

7.             Pricing.  The pricing grid incorporated into the
definition of Applicable Margin in Section 1.01 of the Credit Agreement is
hereby replaced in its entirety with the following:

 

	
  Level

  	
   

  	
  Funded

  Debt/EBITDA

  	
   

  	
  Applicable Margin

  Revolving Loans

  	
   

  	
  Applicable Margin

  Term Loans

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Eurodollar

  Rate

  	
   

  	
  Base Rate

  	
   

  	
  Unused

  Fee

  	
   

  	
  Eurodollar

  Rate

  	
   

  	
  Base Rate

  	
   

  
	
  IA

  	
   

  	
  < 4.00 and ›
  3.25

  	
   

  	
  3.00

  	
  %

  	
  1.00

  	
  %

  	
  0.25

  	
  %

  	
  3.50

  	
  %

  	
  1.25

  	
  %

  
	
  I

  	
   

  	
  < 3.25 and ›
  2.50

  	
   

  	
  2.75

  	
  %

  	
  .75

  	
  %

  	
  0.25

  	
  %

  	
  3.25

  	
  %

  	
  1.00

  	
  %

  
	
  II

  	
   

  	
  <2.50 and ›
  2.00

  	
   

  	
  2.25

  	
  %

  	
  0.50

  	
  %

  	
  0.25

  	
  %

  	
  2.75

  	
  %

  	
  0.75

  	
  %

  
	
  III

  	
   

  	
  < 2.00 and ›
  1.50

  	
   

  	
  2.00

  	
  %

  	
  0.25

  	
  %

  	
  0.25

  	
  %

  	
  2.50

  	
  %

  	
  00.50

  	
  %

  
	
  IV

  	
   

  	
  < 1.50

  	
   

  	
  1.75

  	
  %

  	
  0.25

  	
  %

  	
  0.25

  	
  %

  	
  2.25

  	
   

  	
  0.50

  	
  %

  

 

As of the Effective Date and until
the next recalculation of the Funded Debt to EBITDA Ratio, the Applicable
Margin shall be that at Level IA.

 

2

 

8.             Warranty.  Borrower hereby warrants and represents to Lenders
that, since June 29, 2004, after giving effect to this Modification,
Borrower has been and is in compliance with all provisions of the Credit Agreement
and all other Loan Documents and that no Default or Event of Default has
occurred thereunder nor has any event occurred or failed to occur which with
the passage of time or the giving of notice or both would comprise such a
Default or Event of Default.

 

9.             Ratifications.  Borrower hereby ratifies and confirms each of
its obligations and indebtedness under the Credit Agreement and each of the
other Loan Documents, as amended hereby, and hereby represents and warrants to
Lenders and Agent that Borrower neither has nor claims any defenses,
counterclaims or offsets to any such obligations or indebtedness.

 

10.           Fees.  The effectiveness of this Modification and
the amendments and waivers contemplated herein are expressly conditioned upon
the payment by Borrower to Agent for the prorata benefit of Lenders an
amendment fee of $107,500.00 (based on .25% of the current committed amount ($43,000,000.00)),
$47,777.73 of which shall be payable by Agent to Lender Wachovia Bank, and
reimbursement by Borrower of Agent for all reasonable attorneys’ fees and
expenses incurred in connection with this Modification.

 

11.           Miscellaneous.

 

(a)  This agreement shall be governed by and
construed in accordance with the laws of the State of Florida.  Paragraph headings used herein are for
convenience only and shall not be used to interpret any term hereof.  The Credit Agreement shall continue in full
force and effect as modified by this Modification.  In the event the terms of this Modification
conflict with the terms of the  Credit
Agreement, the terms of this Modification shall control.

 

(b)  This Modification constitutes the entire
agreement among the parties hereto and supersedes all prior agreements,
understandings, negotiations and discussions, both written and oral among the
parties hereto with respect to the subject matter hereof, all of which prior
agreements, understanding, negotiations and discussions, both written and oral,
are merged into this Modification.  All
provisions of the Credit Agreement and each of the other Loan Documents shall
remain in full force and effect as modified by this Modification.  Without limiting the generality of any of the
provisions of this Modification, nothing herein or in any instrument or
agreement shall be deemed or construed to constitute a novation, satisfaction
or refinancing of all or any portion of the Loan or in any manner affect or
impair the lien or priority of the Credit Agreement or any of the Loan
Documents as amended hereby.

 

(c)  This Modification may be executed in any
number of counterparts with each executed counterpart constituting an original,
but altogether constituting but one and the same instrument.

 

(d)  This Modification shall be binding upon and
inure to the benefit of Borrower, Agent and Lenders and their respective heirs,
legal representatives, executors, successors and assigns.

 

12.           RELEASE.  IN CONSIDERATION OF THE ACCOMMODATIONS
PROVIDED HEREIN, BORROWER HEREBY UNCONDITIONALLY IRREVOCABLY

 

3

 

AND FOREVER RELEASES, ACQUITS AND DISCHARGES
LENDERS AND EACH OF LENDERS’ RESPECTIVE OFFICERS, DIRECTORS, EMPLOYEES, AGENTS
AND COUNSEL FROM ANY AND ALL CLAIMS, DEMANDS AND CAUSES OF ACTION THAT ANY OF
THEM HAD, NOW HAS OR MAY IN THE FUTURE HAVE AGAINST ANY ONE OR MORE OF THE LENDERS
OR ANY ONE OR MORE OF LENDERS’ OFFICERS, DIRECTORS, EMPLOYEES, AGENTS OR
COUNSEL FOR THE ACTS OR OMISSIONS OF ANY OF THE FOREGOING PARTIES FROM THE
BEGINNING OF TIME THROUGH, TO AND INCLUDING THE DATE OF THE EFFECTIVENESS OF
THIS MODIFICATION, WHICH RELATED TO ANY CLAIMS ARISING OUT OF OR CONNECTED IN
ANY MANNER WITH THE TRANSACTIONS CONTEMPLATED HEREIN OR IN THE CREDIT AGREEMENT
AS AMENDED HEREBY OR ANY OTHER LOAN DOCUMENTS AS THE SAME MAY BE AMENDED
HEREBY, AS THE CASE MAY BE.

 

13.           WAIVER
OF JURY TRIAL.  BORROWER, AGENT AND
LENDERS HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE THE RIGHT ANY OF
THEM MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON, OR
ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS MODIFICATION OR ANY AGREEMENT
EXECUTED IN CONJUNCTION HEREWITH, OR ANY COURSE OF CONDUCT, COURSE OF DEALING,
STATEMENTS, (WHETHER VERBAL OR WRITTEN) OR ACTIONS BY ANY PARTY.  THIS PROVISION IS A MATERIAL INDUCEMENT TO
LENDERS’ ENTERING INTO THIS MODIFICATION AND MAKING ANY LOAN, ADVANCE OR OTHER
EXTENSION OF CREDIT TO BORROWER. 
FURTHER, BORROWER HEREBY CERTIFIES THAT NO REPRESENTATIVE OR AGENT OF
LENDERS, NOR THE AGENT OR ANY OF AGENT’S COUNSEL OR LENDERS’ COUNSEL, HAS
REPRESENTED, EXPRESSLY OR OTHERWISE, THAT AGENT OR ANY OF AGENT’S COUNSEL OR
LENDERS WOULD NOT, IN THE EVENT OF SUCH LITIGATION, SEEK TO ENFORCE THIS WAIVER
OF RIGHT TO JURY TRIAL PROVISION.  NO
REPRESENTATIVE OR AGENT OF LENDERS, NOR AGENT OR ANY OF AGENT’S COUNSEL OR
LENDERS’ COUNSEL HAS THE AUTHORITY TO WAIVE, CONDITION, OR MODIFY THIS
PROVISION.

 

IN WITNESS WHEREOF, Borrower,
Agent and Lenders have caused this agreement to be effective as of the day and
year set forth above.

 

	
  WITNESSES:

  	
   

  	
  BORROWER:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  TODHUNTER INTERNATIONAL, INC., a Delaware
  corporation

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  /s/: William Viggiano

  	
   

  	
  By:

  	
  /s/

  	
  Ezra Shashoua

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  	
  Executive Vice President & CFO

  	
   

  
	
  /s/: Rose Siebeneck

  	
   

  	
   

  

 

4

 

 

	
  STATE OF FLORIDA

  	
  )

  	
   

  
	
   

  	
  )

  	
   

  
	
  COUNTY OF PALM BEACH

  	
  )

  	
   

  

 

The foregoing instrument was acknowledged
before me this 20th day of December, 2004 by Ezra Shashoua as EVP & CFO of
Todhunter International, Inc., on behalf of the corporation.  He is personally known to me or has produced                          (type
of identification) as identification.

 

 

	
   

  	
  /s/:

  	
  Jennifer Lubrano-Murphy

  	
   

  
	
   

  	
  Notary Public

  
	
   

  	
  State of Florida

  
	
   

  	
   

  
	
   

  	
  /s/:

  	
  Jennifer Lubrano-Murphy

  	
   

  
	
   

  	
  (Print, Type or Stamp Commissioned Name of Notary Public)

  

 

 

	
  WITNESSES:

  	
   

  	
  AGENT:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  SOUTHTRUST BANK, an Alabama banking
  corporation

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/

  	
  Tom Turnberger

  	
   

  
	
  /s/: William Viggiano

  	
   

  	
   

  
	
  /s/: Rose Siebeneck

  	
   

  	
  Title: Vice President

  

 

 

	
  STATE OF FLORIDA

  	
  )

  	
   

  
	
   

  	
  )

  	
   

  
	
  COUNTY OF

  	
  )

  	
   

  

 

The foregoing instrument was
acknowledged before me this 20th day of December, 2004 by Tom
Turnberger as Vice President of SouthTrust Bank, on behalf of the bank.  He is personally known to me or has produced                          (type
of identification) as identification.

 

	
   

  	
  /s/:

  	
  Jennifer Lubrano-Murphy

  	
   

  
	
   

  	
  Notary Public

  
	
   

  	
  State of Florida

  
	
   

  	
   

  
	
   

  	
  /s/:

  	
  Jennifer Lubrano-Murphy

  	
   

  
	
   

  	
  (Print, Type or Stamp Commissioned Name of Notary Public)

  

 

5

 

	
  WITNESSES:

  	
   

  	
  LENDERS:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  SOUTHTRUST BANK, an Alabama banking

  corporation

  
	
   

  	
   

  	
   

  
	
  /s/: Willilam Viggiano

  	
   

  	
  By:

  	
  /s/

  	
  Tom Turnberger

  	
   

  
	
  /s/: Rose Siebeneck

  	
   

  	
  Title: Vice President

  

 

 

	
  STATE OF FLORIDA

  	
  )

  	
   

  
	
   

  	
  )

  	
   

  
	
  COUNTY OF

  	
  )

  	
   

  

 

The foregoing instrument was
acknowledged before me this 20th day of December, 2004 by Tom Turnberger as
Vice President of SouthTrust Bank, on behalf of the bank.  He is personally known to me or has produced                          (type
of identification) as identification.

 

 

	
   

  	
  /s/:

  	
  Jennifer Lubrano-Murphy

  	
   

  
	
   

  	
  Notary Public

  
	
   

  	
  State of Florida

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/:

  	
  Jennifer Lubrano-Murphy

  	
   

  
	
   

  	
  (Print, Type or Stamp Commissioned Name of Notary Public)

  
	
   

  	
  WITNESSES:

  

 

6

 

	
  WITNESSES:

  	
   

  	
  WACHOVIA BANK, NATIONAL ASSOCIATION

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  /s/:William Viggiano

  	
   

  	
  By:

  	
  /s/

  	
   Britt Core

  	
   

  
	
  /s/: Rose Siebeneck

  	
   

  	
  Title: Vice President

  

 

 

	
  STATE OF FLORIDA

  	
  )

  	
   

  
	
   

  	
  )

  	
   

  
	
  COUNTY OF

  	
  )

  	
   

  

 

The foregoing instrument was
acknowledged before me this 20th day of December, 2004 by Britt Core as Vice
President of Wachovia Bank, National Association, on behalf of the bank.  He/She is personally known to me or has
produced                         (type
of identification) as identification.

 

 

	
   

  	
  /s/:

  	
  Jennifer Lubrano-Murphy

  	
   

  
	
   

  	
  Notary Public

  
	
   

  	
  State of Florida

  
	
   

  	
   

  
	
   

  	
  /s/:

  	
  Jennifer Lubrano-Murphy

  	
   

  
	
   

  	
  (Print, Type or Stamp Commissioned Name of Notary Public)

  

 

7EXHIBIT 10.1

 

SECURED PROMISSORY NOTE

 

	
  $190,000.00

  	
   

  	
  Pasadena,
  California

  
	
   

  	
   

  	
  November 23,2004

  

 

FOR
VALUE RECEIVED, the undersigned hereby jointly and severally
(if applicable) promises to pay to PREFERRED BUSINESS CREDIT, INC., a
California Corporation, at 300 N. Lake Ave., Pasadena, California, 91101, or at
such other address as the holder may specify in writing, the principal sum of One
Hundred Ninety Thousand and 00/100 Dollars ($190,000.00) plus
interest as provided below.

 

This note shall bear
interest at the rate of 13.0% per annum, computed on the basis of a 360
day year for actual days elapsed.  This
rate is based upon the prime rate of interest of 5.0%, the rate in effect as of
this date.  The prime rate of interest is
the prime rate announced as being charged by Union Bank of California, San
Francisco, from time to time.  In the
event the prime rate is from time to time hereafter changed, the rate of
interest provided in this note shall be correspondingly changed.  For each month the rate of interest charged
under this note shall be based upon the average prime rate in effect during
such month.  In no event shall the rate
of interest chargeable hereunder be less than 1.0% per month.

 

Principal shall be
payable in twelve equal monthly installments of Eight Thousand and 00/100
Dollars ($8,000.00) commencing January 3, 2005, and continue thereafter on the
1st day of each month, plus interest shall be payable monthly commencing
December 1, 2004, and continue thereafter on the 1st day of each month, and one
final installment on December 1, 2005, equal to all principal outstanding
together with all accrued and unpaid interest.

 

This note is secured by
that certain Loan and Security Agreement (“Agreement”) dated February 20, 2001,
and is subject to all of the terms and conditions thereof.  In the event of default under the Agreement,
including but not limited to, the failure to pay any installment of principal
or interest hereunder when due, the holder of this note may, at its election
and without notice to the undersigned, declare the entire balance hereof
immediately due and payable.

 

If any installment of
principal or interest hereunder is not paid when due, the holder shall have the
following rights in addition to the rights set forth in the preceding paragraph:
(a) the right to add unpaid interest to principal and to have such amount
thereafter bear interest as provided in this note, and (b) if any installment
is more than ten days past due, the right to collect a charge equal to the
greater of $15.00 or five percent of the delinquent payment.  This charge is the result of a reasonable
endeavor by the undersigned and the holder to estimate the holder’s added costs
and damages resulting from the undersigned’s failure to timely make payments
under this note; hence the undersigned agrees that the charge shall be presumed
to be the amount of damage sustained by the holder since it is extremely
difficult to determine the actual amount necessary to reimburse the holder of
such damages.  If this note is not paid
when due, the undersigned further promises to pay all costs of collection,
foreclosure fees and reasonable attorney’s fees incurred by the holder whether
or not suit is filed hereon.

 

1

 

Provided the undersigned
is not then in default hereunder or under any other agreement with the holder
of this note, this note may be prepaid at any time after one year from the date
hereof by paying the balance of principal owing plus all accrued and unpaid
interest and charges, together with a prepayment charge of N/A on the amount
prepaid.

 

Presentment for payment,
notice of dishonor, protest, and notice of protest are expressly waived.  This note cannot be changed, modified,
amended or terminated orally.

 

Waiver by Trial of Jury.  THE UNDERSIGNED, TO THE EXTENT IT MAY LEGALLY
DO SO, HEREBY EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND,
ACTION, CAUSE OF ACTION, OR PROCEEDING ARISING UNDER OR WITH RESPECT TO THIS
NOTE, OR IN ANY WAY CONNECTED WITH, OR RELATED TO, OR INCIDENTAL TO, THE
DEALINGS OF THE PARTIES HERETO WITH RESPECT TO THIS NOTE OR THE TRANSACTIONS
RELATED THERETO, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND
IRRESPECTIVE OF WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE.  THE UNDERSIGNED, TO THE EXTENT IT MAY LEGALLY
DO SO, HEREBY AGREES THAT ANY SUCH CLAIM, DEMAND, ACTION, CAUSE OF ACTION, OR
PROCEEDING SHALL BE DECIDED BY A COURT TRIAL WITHOUT A JURY AND THAT THE HOLDER
OF THIS NOTE MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS SECTION WITH
ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE UNDERSIGNED TO THE WAIVER
OF ITS RIGHT TO TRIAL BY JURY.

 

IN
WITNESS WHEREOF, this Note has been executed and delivered on
the date first set forth above.

 

 

	
   

  	
  LEE PHARMACEUTICALS

  
	
   

  	
  a California
  corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  Ronald G. Lee

  	
   

  
	
   

  	
  Ronald G. Lee,
  President

  
				

 

2

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