EXHIBIT 10.50
FIRST AMENDMENT TO LOAN AND SECURITY AGREEMENT
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THIS FIRST AMENDMENT TO LOAN AND SECURITY AGREEMENT (the "Amendment"),
dated as of November 30, 1999, is among NUTRITION FOR LIFE INTERNATIONAL, INC.,
a Texas corporation ("Leading Borrower"), NL ACQUISITION COMPANY, a Delaware
corporation ("NLAC"), AC ACQUISITION COMPANY, a Delaware corporation ("ASH"),
BACTOLAC PHARMACEUTICAL INC., a Delaware corporation (formerly known as BPI
Acquisition Company and herein "BPI" and Leading Borrower, ASH, NLAC, and BPI
being collectively referred to as "Borrowers" and each a "Borrower"), and
GENERAL ELECTRIC CAPITAL CORPORATION, a New York corporation ("Lender").
RECITALS:
A. Borrowers and Lender have entered into that certain Loan and Security
Agreement dated as of November 15, 1999 (as the same has been or hereafter may
be amended or otherwise modified, the "Agreement").
B. The Agreement contemplated that ASH would merge into Ash Corp., a
Mississippi corporation and thereafter change its name to ASH Corp. However,
the Acquisition Documents relating to such merger have been modified to provide
that Ash Corp., a Mississippi corporation will merge with and into BPI with BPI
as the surviving corporation doing business in Mississippi under the name ASH
Corp.
C. As a result of the foregoing, Borrowers and Lender now desire to amend
the Agreement as herein set forth.
NOW, THEREFORE, in consideration of the premises herein contained and other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows effective as of the date
hereof unless otherwise indicated:
ARTICLE 1
Definitions
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Section 1.01 Definitions. Capitalized terms used in this Amendment, to
the extent not otherwise defined herein, shall have the same meanings as in the
Agreement, as amended hereby.
ARTICLE 2
Amendments
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Section 2.01 Amendment to Refer to AC Acquisition Company. The phrases
"to be known after the Ash Corp. Acquisition as Ash Corp." or "to be known as
Ash Corp." in the Agreement or any other Loan Document when referring to AC
Acquisition Company are hereby deleted from each place they each separately
appear in the Loan Documents.
Section 2.02 Amendment to subclause(ii) of clause (B) of Section 1.1(a).
Subclause (ii) of clause (B) of Section 1.1(a) is amended in its entirety to
read as follows:
(ii) any Borrower may at the request of Leading Borrower as agent for
such Borrower from time to time borrow, repay and reborrow, and may request
Lender to incur Letter of Credit Obligations, under this Section 1.1;
provided, however, that ASH shall not be entitled to request any advances
under this Agreement.
Section 2.03 Amendment to the Definition of "Ash Corp." The definition of
"Ash Corp." in Schedule A of the Agreement is amended in its entirety to read as
follows:
FIRST AMENDMENT TO LOAN AND SECURITY AGREEMENT-Page 1 of 6
"Ash Corp." shall mean Ash Corp., a Mississippi corporation, when referring
to that certain company to be acquired by BPI.
Section 2.04 Amendment to subclause(v) of clause(a) of Section 5.
Subclause (v) of clause (a) of Section 5 is amended in its entirety to read as
follows:
(v) Bactolac Pharmaceutical Inc. (formerly known as BPI
Acquisition Company) may acquire Ash Corp. through the merger of Bactolac
Pharmaceutical Inc. with Ash Corp., with Bactolac Pharmaceutical Inc.
surviving, if: (A) no Default exists at the time of, or will result from,
such transaction, (B) the Lender consents to the terms and provisions of
such transaction, and (C) all documentation that the Lender may require
related to such transaction has been delivered to Lender;
Section 2.05 Amendment to Section 3.3. The phrase "Closing Date" is
hereby deleted from each place that it separately appears in Section 3.3 of the
Agreement and replaced with the phrase "closing date of the Ash Corp.
Acquisition".
Section 2.06 Amendment to Section 10.2. Section 10.2 of the Agreement is
amended in its entirety to read as follows:
10.2 Expenses. Each Borrower agrees to pay or reimburse Lender
for all costs and expenses (including the fees and expenses of all special
counsel, advisors, consultants (including environmental and management
consultants) and auditors retained in connection therewith), incurred in
connection with: (a) the preparation, negotiation, execution, delivery,
performance and enforcement of the Loan Documents and the preservation of
any rights thereunder; (b) collection, including deficiency collections;
(c) the forwarding to any Borrower or any other Person on behalf of any
Borrower by Lender of the proceeds of any Loan (including a wire transfer
fee of $20 per wire transfer); (d) any amendment, extension, modification
or waiver of, or consent with respect to any Loan Document or advice in
connection with the administration of the Loans or the rights thereunder;
(e) any litigation, contest, dispute, suit, proceeding or action (whether
instituted by or between any combination of Lender, any Borrower or any
other Person or Persons), and an appeal or review thereof, in any way
relating to the Collateral, any Transaction Document, or any action taken
or any other agreements to be executed or delivered in connection
therewith, whether as a party, witness or otherwise; and (f) any effort (i)
to monitor the Loans, (ii) to evaluate, observe or assess any Borrower or
any other Credit Party or the affairs of such Person, and (iii) to verify,
protect, evaluate, assess, appraise, collect, sell, liquidate or otherwise
dispose of the Collateral.
Section 2.07 Amendment to clause (b) of the Definition of "Acquisitions".
Clause (b) of the definition of "Acquisitions" in Schedule A of the Agreement is
amended in its entirety to read as follows:
(b) the merger of Bactolac Pharmaceutical Inc. (formerly known
as BPI Acquisition Company) with Ash Corp., with Bactolac
Pharmaceutical Inc. as the surviving corporation; and
Section 2.08 Amendment to the Definition of "Acquisition Documents". The
definition of "Acquisition Documents" in Schedule A of the Agreement is amended
in its entirety to read as follows:
"Acquisition Documents" shall mean each of the following agreements
and any and all other documentation entered into pursuant to the terms of
or otherwise in connection with the following agreements or the
Acquisitions (other than the Loan Documents), as all the same may be
amended or otherwise modified from time to time:
(a) Agreement and Plan of Merger dated October 20, 1999 among
Leading Borrower, Advanced Nutraceuticals, Inc., and NL
Acquisition Company, Xxxxxxx Xxxxx, and Xxxxx X. Xxxxx;
(b) Agreement and Plan of Merger dated as of October 25, 1999
between Leading Borrower, Advanced Nutraceuticals, Inc.
(succeeded in interest by merger by NL Acquisition Company),
Ash Corp., a Mississippi corporation, Xxxxx X. Xxxxxx and
Xxxx Xxxxxx, as
FIRST AMENDMENT TO LOAN AND SECURITY AGREEMENT-Page 2 of 6
amended by an Amendment to Agreement and Plan of Merger
dated November 24, 1999 to add Bactolac Pharmaceuticals Inc.
(formerly known as BPI Acquisition Company) to such
agreement and to provide for the merger of Ash Corp. with
and into Bactolac Pharmaceuticals Inc.; and
(c) Agreement and Plan of Merger dated November 5, 1999 among
Leading Borrower, Advanced Nutraceuticals, Inc., BPI
Acquisition Company, Bactolac Pharmaceutical Inc., a New
York corporation and Xxxxxx X. Xxxxx.
Section 2.09 Amendment to the Definition of "Ash Corp. Acquisition". The
definition of "Ash Corp. Acquisition" in Schedule A of the Agreement is amended
in its entirety to read as follows:
"Ash Corp. Acquisition" shall mean the merger of Bactolac
Pharmaceutical Inc. (formerly known as BPI Acquisition Company) with Ash
Corp., with Bactolac Pharmaceutical Inc. as the surviving corporation.
Section 2.10 Amendment to the Definition of "Ash Corp. Acquisition
Documents". The definition of "Ash Corp. Acquisition Documents" in Schedule A of
the Agreement is amended and restated in its entirety to read as follows:
"Ash Corp. Acquisition Documents" shall mean each of the Agreement and
Plan of Merger dated as of October 25, 1999 between Leading Borrower,
Advanced Nutraceutical, Inc., Ash Corp., a Mississippi corporation, Xxxxx
X. Xxxxxx and Xxxx Xxxxxx, as amended by an Amendment to Agreement and Plan
of Merger dated November 24, 1999 to add Bactolac Pharmaceuticals Inc.
(formerly known as BPI Acquisition Company) to such agreement and to
provide for the merger of Ash Corp. with and into Bactolac Pharmaceuticals
Inc., and any and all other documentation entered into pursuant to the
terms of or otherwise in connection with such agreement or the Ash Corp.
Acquisition (other than the Loan Documents), as all the same may be further
amended or otherwise modified from time to time.
Section 2.11 Amendments to Section 3.21. Section 3.21 of the Agreement is
amended by adding the following sentence to the end of Section 3.21:
Further, Borrowers and each other Credit Party agree that they shall
cause to be delivered, before December 31, 1999, the following: (m) all tax
returns due under federal, state, local or other applicable law for the
year 1998 for BPI; (n) releases acceptable to the Lender of (i) the
judgment filed May 25, 1999 by International Flavors and Fragrances, Inc.
in Xxxxxxxx County, Mississippi in the original amount of $8,464 (Index
Number 109859) and (ii) the judgment filed June 24, 1999 by Xxxxx Temporary
Services, Inc. in Xxxxxxxx County, Mississippi in the original amount of
$18,902.87 (Index Number 110065); and (o) any documents that Lender may
require to show that BPI is validly existing and in good standing under the
laws of the State of Mississippi.
Section 2.12 Amendment to clause (l) of the Definition of "Eligible
Account". Clause (l) of the definition of "Eligible Accounts" in Schedule A of
the Agreement is amended in its entirety to read as follows:
(l) that is an obligation for which the total unpaid Accounts of
the Account Debtor exceed 20% of the aggregate of all
Accounts, to the extent of such excess; provided, that in
calculating the Eligible Accounts of BPI, the unpaid
Accounts of Bayer Corporation to BPI's Ash Corp. Division
shall not be included in calculating compliance with this
clause;
Section 2.13 Amendment to Attachment I of Schedule D. Attachment I of
Schedule D of the Agreement is amended in its entirety to read as set forth in
Attachment I of Schedule D attached hereto.
Section 2.14 Amendments to Disclosure Schedules. The following Disclosure
Schedules to the Agreement are each amended in their respective entirety to read
as set forth on the corresponding disclosures schedules attached hereto:
FIRST AMENDMENT TO LOAN AND SECURITY AGREEMENT-Page 3 of 6
Disclosure Schedule (3.2)
Disclosure Schedule (3.6)
Disclosure Schedule (3.10)
Disclosure Schedule (3.12)
Disclosure Schedule (3.13)
Disclosure Schedule (3.16)
Disclosure Schedule (5(b))
Disclosure Schedule (5(e))
Disclosure Schedule (6.1).
ARTICLE 3
Ratifications, Representations and Warranties
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Section 3.01 Ratifications. The terms and provisions set forth in this
Amendment shall modify and supersede all inconsistent terms and provisions set
forth in the Agreement and except as expressly modified and superseded by this
Amendment, the terms and provisions of the Agreement and the other Loan
Documents are ratified and confirmed and shall continue in full force and
effect. Each Borrower and Lender agree that the Agreement as amended hereby and
the other Loan Documents shall continue to be legal, valid, binding and
enforceable in accordance with their respective terms.
Section 3.02 Representations and Warranties. Each Borrower hereby
represents and warrants to Lender as follows: (a) after giving effect to this
Amendment, no Default has occurred and is continuing; (b) after giving effect to
this Amendment, the representations and warranties set forth in the Loan
Documents are true and correct in all material respects on and as of the date
hereof with the same effect as though made on and as of such date except with
respect to any representations and warranties limited by their terms to a
specific date; (c) the execution, delivery and performance of this Amendment has
been duly authorized by all necessary action on the part of each Borrower and
does not and will not: (1) violate any provision of law applicable to any
Borrower, the certificate of incorporation, bylaws, partnership agreement,
membership agreement, or other applicable governing document of any Borrower or
any order, judgment, or decree of any court or agency of government binding upon
any Borrower; (2) conflict with, result in a breach of or constitute (with due
notice or lapse of time or both) a default under any material contractual
obligation of any Borrower; (3) result in or require the creation or imposition
of any material lien upon any of the assets of any Borrower; or (4) require any
approval or consent of any Person under any material contractual obligation of
any Borrower; (d) the articles of incorporation, bylaws, partnership agreement,
certificate of limited partnership, membership agreement, articles of
organization or other applicable governing document of each Borrower and the
resolutions of each Borrower attached as an exhibit to the respective
Certificate of Secretary of each Borrower dated November 17, 1999 have not been
modified or rescinded and remain in full force and effect as of the date of this
Amendment; (e) following the Ash Corp. Acquisition, BPI will no longer rely on
Bayer Corporation to finance any materials used by BPI's Ash Corp. Division in
the production of inventory.
IN ADDITION, TO INDUCE THE LENDER TO AGREE TO THE TERMS OF THIS AMENDMENT,
EACH BORROWER (BY IT EXECUTION BELOW) REPRESENTS AND WARRANTS THAT AS OF THE
DATE OF ITS EXECUTION OF THIS AMENDMENT THERE ARE NO CLAIMS OR OFFSETS AGAINST
OR DEFENSES OR COUNTERCLAIMS TO ITS OBLIGATIONS UNDER THE LOAN DOCUMENTS AND IN
ACCORDANCE THEREWITH IT:
(a) WAIVER. WAIVES ANY AND ALL SUCH CLAIMS, OFFSETS, DEFENSES OR
COUNTERCLAIMS, WHETHER KNOWN OR UNKNOWN, ARISING PRIOR TO THE DATE OF
ITS EXECUTION OF THIS AMENDMENT AND
(b) RELEASE. RELEASES AND DISCHARGES LENDER, AND ITS OFFICERS,
DIRECTORS, EMPLOYEES, AGENTS, SHAREHOLDERS, AFFILIATES AND ATTORNEYS
(COLLECTIVELY THE "RELEASED PARTIES") FROM ANY AND ALL OBLIGATIONS,
INDEBTEDNESS, LIABILITIES, CLAIMS, RIGHTS, CAUSES OF ACTION
FIRST AMENDMENT TO LOAN AND SECURITY AGREEMENT-Page 4 of 6
OR DEMANDS WHATSOEVER, WHETHER KNOWN OR UNKNOWN, SUSPECTED OR
UNSUSPECTED, IN LAW OR EQUITY, WHICH ANY BORROWER EVER HAD, NOW HAS,
CLAIMS TO HAVE OR MAY HAVE AGAINST ANY RELEASED PARTY ARISING PRIOR TO
THE DATE HEREOF AND FROM OR IN CONNECTION WITH THE LOAN DOCUMENTS OR
THE TRANSACTIONS CONTEMPLATED THEREBY.
ARTICLE 4
Miscellaneous
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Section 4.01 Survival of Representations and Warranties. All
representations and warranties made in this Amendment or any other Loan Document
including any Loan Document furnished in connection with this Amendment shall
survive the execution and delivery of this Amendment and the other Loan
Documents, and no investigation by Lender or any closing shall affect the
representations and warranties or the right of Lender to rely upon them.
Section 4.02 Reference to Agreement. Each of the Loan Documents,
including the Agreement and any and all other agreements, documents, or
instruments now or hereafter executed and delivered pursuant to the terms hereof
or pursuant to the terms of the Agreement as amended hereby, are hereby amended
so that any reference in such Loan Documents to the Agreement shall mean a
reference to the Agreement as amended hereby.
Section 4.03 Expenses of Lender. As provided in the Agreement, each
Borrower agrees to pay on demand all costs and expenses incurred by Lender in
connection with the preparation, negotiation, and execution of this Amendment
and the other Loan Documents executed pursuant hereto, including without
limitation, the costs and fees of Lender's legal counsel.
Section 4.04 Severability. Any provision of this Amendment held by a
court of competent jurisdiction to be invalid or unenforceable shall not impair
or invalidate the remainder of this Amendment and the effect thereof shall be
confined to the provision so held to be invalid or unenforceable.
Section 4.05 Applicable Law. This Amendment and all other Loan Documents
executed pursuant hereto shall be governed by and construed in accordance with
the laws of the State of New York and the applicable laws of the United States
of America.
Section 4.06 Successors and Assigns. This Amendment is binding upon and
shall inure to the benefit of Lender and each Borrower and their respective
successors and assigns, except no Borrower may assign or transfer any of its
rights or obligations hereunder without the prior written consent of Lender.
Section 4.07 Counterparts. This Amendment may be executed in one or more
counterparts and on telecopy counterparts, each of which when so executed shall
be deemed to be an original, but all of which when taken together shall
constitute one and the same agreement.
Section 4.08 Effect of Waiver. No consent or waiver, express or implied,
by Lender to or for any breach of or deviation from any covenant, condition or
duty by any Borrower shall be deemed a consent or waiver to or of any other
breach of the same or any other covenant, condition or duty.
Section 4.09 Headings. The headings, captions, and arrangements used in
this Amendment are for convenience only and shall not affect the interpretation
of this Amendment.
Section 4.10 Complete Amendment; Modification of Amendment. This
Amendment and the other Loan Documents constitute the complete agreement between
the parties with respect to the subject matter hereof and thereof, supersede all
prior agreements, commitments, understandings or inducements (oral or written,
expressed or implied), and no Loan Document may be modified, altered or amended
except by a written agreement signed by Lender, and each other Credit Party a
party to such Loan Document.
FIRST AMENDMENT TO LOAN AND SECURITY AGREEMENT-Page 5 of 6
Executed as of the date first written above.
BORROWERS:
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Nutrition for Life International, Inc.
By:
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Xxxxx Xxxxxxxx
President
NL ACQUISITION COMPANY
AC ACQUISITION COMPANY
BACTOLAC PHARMACEUTICAL INC.
(formerly known as BPI Acquisition Company)
By:
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Xxxx X. Xxxxx, Xx., Secretary of each company
LENDER:
GENERAL ELECTRIC CAPITAL CORPORATION
By:
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Xxxxx Xxxxxx
Duly Authorized Signatory
FIRST AMENDMENT TO LOAN AND SECURITY AGREEMENT-Page 6 of 6
