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EXHIBIT 10.4
AMENDMENT AND WAIVER
This
AMENDMENT AND WAIVER (this “
Amendment ”),
dated as of May 30, 2008, is made by and between RxElite, Inc., a
Delaware corporation (the “
Company ”),
and Castlerigg Master Investments Ltd., a British Virgin Islands
company (the “
Holder ”
or “
Castlerigg ”).
The Company and the Holder are, collectively, the “
Parties .”
Capitalized terms used herein and not otherwise defined shall have
the meanings ascribed to them in that certain Senior Secured
Convertible Note, issued by the Company to the Holder on December
31, 2007 in the principal amount of $10,500,000, as may have been
previously amended (the “
Note ”),
pursuant to that certain Securities Purchase Agreement dated as of
December 31, 2007 by and between the Company and the Holder (the
“
Securities Purchase Agreement ”).
RECITALS
WHEREAS,
Section 14(b) of the Note provides that the Company shall not,
and the Company shall not permit any of its Subsidiaries to,
directly or indirectly, incur or guarantee, assume or suffer
to exist any Indebtedness, other than (i) the Indebtedness
evidenced by the Note and the Other Notes and (ii) other
Permitted Indebtedness;
WHEREAS,
Section 14(c) of the Note provides that the Company shall not,
and the Company shall not permit any of its Subsidiaries to,
directly or indirectly, allow or suffer to exist any Liens
other than Permitted Liens and Permitted Vaporizer
Liens;
WHEREAS,
the Company desires to enter into a Loan and Security
Agreement with NPIL Pharma Inc., a Delaware corporation
(“
NPIL ”),
in the form attached hereto as
Exhibit A (the
“
Loan and Security Agreement ”),
pursuant to which NPIL shall lend the Company $5,000,000 (the
“
NPIL Loan ”)
in exchange for a promissory note and a junior lien in
substantially all of the Company’s assets (the “
NPIL Lien ”);
WHEREAS,
the NPIL Loan is not Permitted Indebtedness and the NPIL Lien
is not a Permitted Lien; and
WHEREAS,
at the request of the Company, the Holder has agreed to
consent to the NPIL Loan and the granting of the NPIL Lien,
and treat them as Permitted Indebtedness and a Permitted Lien,
respectively, subject to the terms and conditions set forth in
the subordination agreement, in the form attached hereto
as
Exhibit B (the
“
Subordination Agreement ”),
by and among NPIL, the Company and Castlerigg in its capacity as
collateral agent for the Holder.
NOW,
THEREFORE, in consideration of the promises and covenants made
herein, and for such other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged,
the Parties hereby agree as follows:
1.
Amendment to the Note.
(a)
Section
(4) of the Note is hereby amended by (i) deleting the word
“or” appearing at the end of clause (xviii)
thereof, (ii) redesignating clause (xix) as new clause (xx)
and (iii) adding new clause (xix) to read as
follows:
“(xix)
any
default or event of default shall have occurred under the Loan
and Security Agreement; or”
(b)
The
definition of “Permitted Indebtedness” set forth
in Section (28)(dd) of the Note is hereby amended
by
(i) deleting the word “and” appearing therein
immediately before clause (v) thereof and (ii) adding the
following new clause (vi) to read as follows:
“and
(vi) Indebtedness incurred under that certain Loan and
Security Agreement, dated as of May 30, 2008 (the
“
Loan and Security Agreement ”),
by and between the Company and NPIL Pharma Inc., a
Dela
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