FOURTH AMENDMENT TO LOAN AND SECURITY AGREEMENT
This Fourth Amendment to Loan and Security Agreement (the "Amendment")
dated as of September 22, 1997 by and between SUMMIT BANK (f/k/a UNITED JERSEY
BANK), a state banking association organized and existing under the laws of the
State of New Jersey (the "Lender") with an office at 000 Xxxx Xxxxxx,
Xxxxxxxxxx, Xxx Xxxxxx 00000 and SEL-LEB MARKETING, INC., a New York corporation
("Borrower") having a principal place of business located at 0000 00xx Xxxxxx,
Xxxxx Xxxxxx, Xxx Xxxxxx 00000.
WHEREAS, on November 6, 1995, the Lender provided a certain credit facility
(the "Loan") to Borrower pursuant to the terms and conditions of a certain Loan
and Security Agreement dated as of November 6, 1995 (the "Original Loan
Agreement"), as amended by that certain First Amendment to Loan and Security
Agreement dated as of May 31, 1996 (the "First Amendment"), as amended by that
certain Second Amendment to Loan and Security Agreement dated as of May 30, 1997
(the "Second Amendment"), as amended by that certain Third Amendment to Loan and
Security Agreement dated as of July 31, 1997 (the "Third Amendment") (the
Original Loan Agreement as amended by the First Amendment, the Second Amendment
and the Third Amendment shall hereinafter be referred to as the "Loan
Agreement") as evidenced by a certain Line of Credit Note dated November 6, 1995
in the principal amount of Two Million ($2,000,000.00) Dollars (the "Original
Line of Credit Note"), as modified by that certain First Modification of Line of
Credit Note dated as of May 31, 1996 (the "First Line of Credit Note
Modification"), the Second Modification of Line of Credit Note dated as of May
30, 1997 (the "Second Line of Credit Note
Modification"), and the Third Modification of Line of Credit Note dated as of
July 31, 1997 (the "Third Line of Credit Note Modification") (the Original Line
of Credit Note as modified by the First Line of Credit Note Modification, the
Second Line of Credit Note Modification and Third Line of Credit Note
Modification shall hereinafter be referred to as the "Line of Credit Note");
WHEREAS, the Borrower has requested that the Lender increase the Line of
Credit Loan Maximum for a period of ninety (90) days from the date hereof; and
WHEREAS, the Lender is willing to increase the Line of Credit Maximum
subject to the terms and conditions set forth within Amendment.
NOW, THEREFORE, in consideration of the recitals and the mutual covenants
contained herein, the parties hereto agree as follows:
1. All capitalized terms used herein and not otherwise defined herein shall
have the meanings ascribed to them pursuant to the Loan Agreement and the Line
of Credit Note. Notwithstanding anything to the contrary contained in either the
Loan Agreement or the Line of Credit Note, the terms of this Amendment shall
control.
2. Section 1.1(x) of the Loan Agreement is hereby stricken and replaced
with the following:
"(x) "Line of Credit Loan Maximum" shall mean: (i) Two Million
($2,000,000) Dollars from November 6, 1995 through September 21,
1997; (ii) Two Million Two Hundred Fifty Thousand ($2,250,000)
Dollars from September 22, 1997 through December 21, 1997; and
(iii) Two Million
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($2,000,000) Dollars from December 22, 1997 through May 31,
1998."
3. The reference to the "Line of Credit Note" in Section 1.1(aa) of the
Loan Agreement shall be deemed to refer to the Line of Credit Note as restated
by the Restated Line of Credit Note attached hereto as Exhibit A and by this
reference made a part hereof as if fully set forth herein.
4. The reference to "Loan Documents" in Section l.1(bb) of the Loan
Agreement shall be deemed to include the Amendment and the Restated Line of
Credit Note.
5. The Borrower acknowledges and agrees that: (a) as of September 17, 1997
the unpaid principal balance of the Line of Credit Note is One Million Eight
Hundred Twenty Five ($1,825,000) Dollars; (b) the obligation of the Borrower to
repay the Line of Credit Note is absolute and unconditional and is not subject
to any defense, counterclaim, set-off, right of recoupment, abatement or other
claim or determination, and (c) the Line of Credit Note is and shall be governed
by the terms and provisions of the Loan Agreement, and as set forth in this
Amendment.
6. The Lender and the Borrower hereby agree and consent to the terms and
provisions of this Amendment and the transactions contemplated hereby.
7. The Borrower shall pay all of the Lender's reasonable costs and expenses
incurred in connection with the preparation, execution and delivery of this
Amendment, including, without limitation, reasonable legal fees and
disbursements of Lender's counsel.
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8. Except as expressly otherwise provided herein, the terms of the Loan
Agreement shall remain in full force and effect and are incorporated herein by
reference. In the event of a conflict between the terms of this Amendment and
the Loan Agreement, the terms of this Amendment shall control.
9. The Borrower acknowledges that the Lender has no obligation to make any
further amendments to the Loan Agreement or any other agreement executed in
connection therewith, including but not limited to this Amendment and the
Restated Line of Credit Note.
10. This Amendment shall be construed in accordance with, and shall be
governed by, the laws of the State of New Jersey. This Amendment shall be
binding upon and inure to the benefit of the parties hereto and their respective
successors and assigns.
IN WITNESS WHEREOF, the undersigned have caused this Fourth Amendment to
Loan and Security Agreement to be executed by their proper and duly authorized
officers as of the date first set forth above.
SUMMIT BANK
By: /s/ Xxxxxxx Xxxx
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XXXXXXX XXXX, Vice President
SEL-LEB MARKETING, INC.
By: /s/ Xxx X. Xxxxxx
----------------------------------------
XXX XXXXXX, Executive Vice President
of Finance
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RESTATED LINE OF CREDIT NOTE
Principal Amount: $2,250,00 Dated: September 22, 1997
FOR VALUE RECEIVED, SEL-LEB MARKETING, INC., a New York corporation, having
its principal place of business at 0000 00xx Xxxxxx, Xxxxx Xxxxxx, Xxx Xxxxxx
00000 ("Payor"), promises to pay to the order of SUMMIT BANK (f/k/a United
Jersey Bank), a state banking association organized under the laws of the State
of New Jersey (the "Bank" or "Holder"), its successors and assigns, at its
offices at 000 Xxxx Xxxxxx, Xxxxxxxxxx, Xxx Xxxxxx 00000, or at such other
address as Holder shall notify Payor in writing, the principal sum of TWO
MILLION TWO HUNDRED FIFTY THOUSAND ($2,250,000) DOLLARS, or so much thereof as
shall have been advanced to Payor pursuant to the Loan Agreement (as defined
below), together with interest on the unpaid principal balance, payable as
provided below.
1. Subject to Loan Documents. The definitions, terms and provisions of a
certain loan and security agreement entered into between the Bank and Payor on
November 6, 1995, as amended by that certain First Amendment to Loan and
Security Agreement dated as of May 31, 1996, as amended by that certain Second
Amendment to Loan and Security Agreement dated May 30, 1997, as amended by that
certain Third Amendment to Loan and Security Agreement dated as of July 31,
1997, as amended by that certain Fourth Amendment to Loan and Security Agreement
dated the date hereof (collectively the "Loan Agreement") and all other
documents and instruments referred to therein or executed and delivered pursuant
thereto are incorporated herein by reference (all of the foregoing are
hereinafter collectively referred to as the "Loan Documents").
2. Rate of Interest. The principal amount outstanding under this Note shall
bear interest at the Bank's Prevailing Base Rate on a floating basis. The Bank's
Prevailing Base Rate of interest is the fluctuating rate of interest established
by the Bank from time to time whether or not such rate shall be otherwise
published. The Prevailing Base Rate is established for the convenience of the
Bank. The Prevailing Base Rate is a means of pricing some loans to customers of
the Bank. The Base Rate is not tied to any external rate of interest and does
not necessarily reflect the lowest rate of interest actually charged at any
given time by the Bank to any particular class or category of customers of the
Bank. In the event that there shall be a change in the Prevailing Base Rate,
such change shall be effective on the date of such change without notice to
Payor. Interest shall be computed on the basis of the actual number of days
elapsed over a period of 360 days.
3. Repayment. Principal and interest shall be paid during the term of this
Note in the following manner:
(a) Payor shall make consecutive monthly payments of interest at the
Bank's Prevailing Base Rate on a floating basis on the principal balance
outstanding under this Note commencing on
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October 1, 1997, and continuing on the first (1st) day of each and every
month thereafter through and including May 1, 1998.
(b) Payor shall make a final payment of the entire unpaid principal
balance and accrued interest under this Note and all other costs, expenses
and charges of any nature whatsoever due or assessable hereunder, on May
31, 1998.
(c) In addition to the payments required to be made as set forth in
subparagraphs 4(a) and 4(b) above, pursuant to Section 5.20 of the Loan
Agreement, during each twelve month period, commencing on the date of
execution of the Loan Agreement, Payor shall reduce the principal amount
outstanding under this Note to zero ($0) dollars for a period of thirty
(30) continuous and consecutive days.
(d) Upon the failure of Payor to make any payments hereunder within
ten (10) days of the date when due, Payor shall, to the extent permitted by
law, pay a late payment charge on all amounts overdue equal to five (5%)
percent of the overdue amount (but in no event less than twenty five
($25.00) dollars nor more than two thousand five hundred ($2,500.00)
dollars). Any such late charge assessed is immediately due and payable.
4. Event of Default Either of the following shall constitute an Event of
Default under this Note:
(a) Failure to make any payments required hereunder within five (5)
days after the date when due; or
(b) The occurrence of any Event of Default (as defined in the Loan
Agreement) under any of the Loan Documents.
5. Acceleration Upon Default. Upon the occurrence of an Event of Default,
the entire unpaid principal balance of this Note, together with accrued
interest, shall, at the option of holder, immediately become due and payable
without notice or demand. Upon acceleration by Holder as hereinabove provided,
all amounts due hereunder, whether principal, interest or otherwise, which have
not been paid as of the date of such acceleration, shall bear interest from such
date to the date payment in full is received by Holder at the rate of interest
set forth in Paragraph 2 of this Note plus five (5%) percent per annum, instead
of the rate established in Paragraph 2 of this Note.
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6. Cumulative Remedies: Waivers by Payor. No remedy referred to herein is
intended to be exclusive, but each shall be cumulative and in addition to any
other remedy above or otherwise available to the Holder under any of the Loan
Documents, at law or in equity. Payor hereby waives presentment, demand for
payment, protest and notice of dishonor of this Note and all other notices and
demands.
7. Non-Waiver. Failure to insist on the strict performance of any or all of
the terms, provisions, and covenants contained in this Note shall not be
construed as a waiver or relinquishment of the future performance of any term,
provision or covenant herein.
8. Collection Fees. If Suit is brought to collect this Note or any part
hereof, Payor expressly agrees to pay all of Holder's reasonable costs and
expenses of collection, including reasonable attorneys' fees.
9. Prepayment. This Note may be prepaid in full or in part at any time
without premium or penalty.
10. WAIVER OF JURY TRIAL. PAYOR HEREBY WAIVES ALL RIGHTS IT MAY HAVE TO A
JURY TRIAL IN ANY AND ALL ACTIONS OR CONTROVERSIES ARISING OUT OF OR IN
CONNECTION WITH THIS NOTE.
11. Usury. All provisions of this Note and the Loan Documents are expressly
subject to the condition that in no event, whether by reason of acceleration of
maturity of the indebtedness evidenced hereby or otherwise, shall the amount
paid or agreed to be paid to the undersigned hereunder and deemed interest under
applicable law exceed the maximum rate of interest on the unpaid principal
balance of this Note allowed by applicable law (the "Maximum Allowable Rate"),
which shall mean the law in effect on the date of this Note, except that if
there is a change in such law which results in a higher Maximum Allowable Rate
being applicable to this Note, then this Note shall be governed by such amended
law from and after its effective date. In the event that fulfillment of any
provision of this Note or the Loan Documents results in the interest rate
hereunder being in excess of the Maximum Allowable Rate, the obligation to be
fulfilled shall automatically be reduced to eliminate such excess. If,
notwithstanding the foregoing, the Bank or any other holder of this Note
receives an amount which under applicable law would cause the interest rate
hereunder to exceed the Maximum Allowable Rate, the portion thereof which would
be excessive shall automatically be applied to and deemed a prepayment of the
unpaid principal balance of this Note and not a payment of interest.
12. Governing Law. This Note shall be governed by and construed in
accordance with the laws of the State of New Jersey.
13. Certification by Executing Party. The Payor, by executing this Note and
delivering same to the Holder, hereby certifies to the Holder, knowing and
intending that the Holder is relying hereon in making the loan evidenced by this
Note, that: (i) there is no Default or Event of Default and no event which with
the
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giving of notice or lapse of time, or both would become a Default or Event of
Default; (ii) all representations, warranties and covenants of the Payor made in
the Loan Documents are true and accurate and complete; and (iii) the Payor shall
comply with all of the terms and conditions in the Loan Documents.
14. Right of Set-off. In the event of the occurrence of an Event of
Default, the Bank shall have the right immediately and without notice or other
action (any such notice being expressly waived by each of the Payor), to set-off
against the Payor's liability to the Bank: (i) any money owed by the Bank in any
capacity to the Payor whether due or not and/or; (ii) any property of the Payor
in the possession of the Bank, and the Bank shall be deemed to have exercised
such right of set-off and to have made a charge against any such money and/or
property immediately upon the occurrence of an Event of Default, even though the
actual book entries may be made at some time subsequent thereto.
15. Note. This Note amends and restates that certain Note dated November 6,
1995, as modified by the First Modification of Line of Credit Note dated as of
May 31, 1996, as modified by the Second Modification of Line of Credit Note
dated as of May 30, 1997, as modified by the Third Modification of Line of
Credit Note dated as of July 31, 1997.
IN WITNESS WHEREOF, Payor has duly executed this Note the day and year
first above written.
ATTEST: SEL-LEB MARKETING, INC.
BY: /s/ Xxxxx Xxxxxx BY: /s/ Xxx X. Xxxxxx
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Xxxxx Xxxxxx, Secretary XXX XXXXXX, Executive Vice
President of Finance
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