aaiPharma offers holders of 11½% notes second chance to receive consent fee

New York, Jan. 24 - aaiPharma Inc. said that it is offering holders of its 11½% senior subordinated notes due 2010 who did not participate in its earlier consent solicitation the opportunity to receive the consent payment.

Investors must submit consents by 5 p.m. ET on Feb. 7 to receive the fee of $20 per $1,000 principal amount.

The second chance follows discussions with representatives of an ad hoc committee of holders of the notes, aaiPharma said in an 8-K filing with the Securities and Exchange Commission.

The previous consent solicitation successfully ended on Oct. 29.

The previous consent fee was also $20 per $1,000 principal amount.

aaiPharma was seeking amendments and waivers allowing it, among other things, to incur up to $30 million of additional debt under its credit facilities by increasing the amount of senior debt allowed under the indenture by $40 million and eliminating the general provision permitting borrowings of up to $10 million.

aaiPharma is not allowed under the amendment to pay more than $5 million in cash to settle pending litigation, excluding payments funded or reimbursed under insurance policies, until it makes the interest payments due on the notes on April 1, 2005 and Oct. 1, 2005.

The amendments prohibit the payment of dividends on the company's common stock and other restricted payments as defined in the indenture until it pays the note coupons due on April 1, 2005 and Oct. 1, 2005.

The interest rate on the notes will step up by 50 basis points from Oct. 1, 2004 to March 31, 2005.

aaiPharma is a Wilmington, N.C., pharmaceutical company.

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