On May 14, 2024 Eagle Pharmaceuticals, Inc. reported the company entered into a Third Amendment to Third Amended and Restated Credit Agreement (the "Third Amendment Agreement") with JPMorgan Chase Bank, N.A., as administrative agent (the "Agent"), and the lenders party thereto (the "Lenders"), with an effective date of May 13, 2024, which amends the terms of (i) the Company’s Third Amended and Restated Credit Agreement, dated as of November 1, 2022 (as amended by the First Amendment Agreement (defined below), the "Original Credit Agreement") and (ii) the Limited Waiver and First Amendment to Third Amended and Restated Credit Agreement, dated as of January 12, 2024 (as amended by the Second Amendment Agreement (defined below), the "First Amendment Agreement") (Press release, Eagle Pharmaceuticals, MAY 15, 2024, View Source [SID1234643301]). The Original Credit Agreement as amended by that certain Second Amendment to Third Amended and Restated Credit Agreement, dated as of February 29, 2024 (the "Second Amendment Agreement"), is referred to herein as the "Credit Agreement," and the Credit Agreement as amended by the Third Amendment Agreement is referred to herein as the "Amended Credit Agreement."

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As previously disclosed (i) in the Company’s Current Report on Form 8-K filed with the U.S. Securities and Exchange Commission (the "SEC") on January 16, 2024, incorporated by reference herein, the Company, the Agent and the Lenders entered into the First Amendment Agreement, which provided a waiver of defaults and events of default that occurred and were continuing under the Original Credit Agreement at such time and (ii) in the Company’s Current Report on Form 8-K filed with the SEC on March 1, 2024, incorporated by reference herein, the Company, the Agent and the Lenders entered into the Second Amendment Agreement, which amended certain terms of the Original Credit Agreement and the First Amendment Agreement.

Pursuant to the Credit Agreement and the First Amendment Agreement, (i) the Company is required to deliver to the Agent and the Lenders, by not later than May 13, 2024, (a) annual audited financial statements for the fiscal year ended December 31, 2023, reported on by the Company’s independent public accountant (without a "going concern" or like qualification or exception and without any qualification or exception as to the scope of such audit) to the effect that such consolidated financial statements present fairly in all material respects the financial condition and results of operations of the Company and its consolidated subsidiaries in accordance with GAAP (the "Annual Financial Statement Requirement"), (b) restated quarterly financial statements for the fiscal quarter ended June 30, 2023 and (c) quarterly financial statements for the fiscal quarter ended September 30, 2023, (ii) the Company is required to deliver to the Agent and the Lenders, by not later than June 3, 2024, quarterly financial statements for the fiscal quarter ended March 31, 2024, (iii) the Company is required to deliver to the Agent and the Lenders, concurrently with delivery of the financials statements referred to in the foregoing clauses (i)(b), (i)(c) and (ii), a certificate by one of its officers that such financial statements present fairly in all material respects the financial condition and results of operations of the Company and its consolidated subsidiaries in accordance with GAAP for the respective quarter (clauses ((i)(b), (i)(c) and (ii), the "Quarterly Financial Statement Requirement" and together with the Annual Financial Statement Requirement, the "Financial Statement Requirement") and (iv) until the Quarterly Financial Statement Requirement has been satisfied, (a) availability under the revolving facility under the Credit Agreement is reduced from $100 million to $50 million (the "Availability Restriction"), (b) the Company is not permitted to utilize any negative covenant flexibility that is based on a pro forma compliance with any of the Fixed Charge Coverage Ratio, Senior Secured Net Leverage Ratio and/or the Total Net Leverage Ratio test (each as defined in the Credit Agreement), which restricts the Company’s flexibility to, among other things, incur certain additional indebtedness, complete certain corporate transactions, including certain acquisitions and dispositions, or make certain additional restricted payments (the "Covenant Flexibility Restriction") and (c) compliance with the minimum liquidity covenant is waived (the "Liquidity Covenant Waiver").

Pursuant to the terms of the Third Amendment Agreement, (i) the delivery deadline with respect to each Financial Statement Requirement has been extended to July 31, 2024, (ii) the Availability Restriction has been superseded by a permanent reduction of availability under the revolving facility under the Amended Credit Agreement from $100 million to $50 million, (iii) the Covenant Flexibility Restriction has been revised to continue until the Company has satisfied each Financial Statement Requirement, (iv) the Liquidity Covenant Waiver has been terminated and (v) the minimum liquidity covenant in the Amended Credit Agreement has been reduced from $50 million to $10 million.

Pursuant to the terms of the Amended Credit Agreement, failure to timely satisfy the Financial Statement Requirement will result in an event of default. During the continuance of an event of default, the Agent may, with the consent of the required lenders, and shall, at the request of the required lenders, by notice to the Company, terminate undrawn commitments, declare the loans then outstanding to be due and payable in full and/or exercise other remedies available to it, among other things. In addition, the Company’s obligations under the Amended Credit Agreement are secured by a pledge of substantially all of the Company’s assets. If the Company is unable to pay its obligations, the Agent on behalf of the lenders could proceed to protect and enforce their rights under the Amended Credit Agreement, including by foreclosure on the assets securing the Company’s obligations under the Amended Credit Agreement. The foregoing would materially and adversely affect the Company’s business and financial condition. There can be no assurance that the Company will be able to satisfy the Financial Statement Requirement on the required timing or at all, or comply with the terms of the Third Amendment Agreement and the Amended Credit Agreement.

The foregoing descriptions of the Third Amendment Agreement, the Second Amendment Agreement, the First Amendment Agreement and the Original Credit Agreement are not intended to be complete and are qualified in their entirety by reference to the full text of the Third Amendment Agreement, the Second Amendment Agreement, the First Amendment Agreement and the Original Credit Agreement, which are filed as Exhibit 10.1 to this Current Report on Form 8-K, Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on March 1, 2024, Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on January 16, 2024, and Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on November 3, 2022, respectively.