EXHIBIT 3.2
FIRST AMENDMENT TO LOAN AND SECURITY AGREEMENT
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THIS FIRST AMENDMENT TO LOAN AND SECURITY AGREEMENT, made, entered into and
effective as of the 19th day of August, 1997 (the "Amendment"), by and between
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ASSOCIATED HYGIENIC PRODUCTS LLC, a limited liability company duly organized
under the laws of the State of Wyoming ("Borrower"), and SOUTHTRUST BANK, N.A.,
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successor by merger to SOUTHTRUST BANK OF GEORGIA, N.A., a national banking
association with offices in Atlanta, Georgia ("Lender").
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WITNESSETH:
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WHEREAS, Borrower and Lender executed a certain Loan and Security
Agreement, dated as of December 16, 1996 (as amended to date, the "Loan
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Agreement"); and
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WHEREAS, concurrently herewith, Borrower's affiliate, Xxxxxxx X X Xxxx, and
Lender have entered into a certain Loan Agreement, dated as of even date
herewith, pursuant to which, subject to the terms and conditions set forth
therein, Lender has agreed to make a term loan available to Xx. Xxxx, the entire
proceeds of which will simultaneously be paid over and delivered to Borrower in
payment of certain currently existing intercompany indebtedness in such amount;
and
WHEREAS, in connection with the foregoing, Borrower and Lender have agreed
to amend the Loan Agreement in certain respects; and
WHEREAS, Borrower and Lender wish to enter into this Amendment in order to
memorialize their mutual understandings in regard to the foregoing matters;
NOW, THEREFORE, for and in consideration of the sum of $10.00, the
foregoing premises and for other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the parties agree as follows:
1. Definitions. As used in this Amendment, all defined terms shall
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have the same meanings as and when used in the Loan Agreement.
2. Amendments to Definitions.
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(a) Section 1.1 of the Loan Agreement is hereby amended by adding
therein the following definitions, in appropriate alphabetical order:
"AHP Canada" shall mean Associated Hygienic Products (Canada),
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Inc., an Ontario corporation.
"Borrower Guaranty" shall mean that certain Guaranty, dated as of
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August 19, 1997, executed and delivered by Borrower to Lender, pursuant to
which
Borrower has guaranteed the payment and performance by Xxxxxxx X X Xxxx of
his obligations under the Wang Loan Agreement, as such guaranty may be
amended or modified from time to time hereafter.
"Wang Loan Agreement" shall mean that certain Loan Agreement,
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dated as of August 19, 1997 between Lender and Xxxxxxx X X Xxxx, as amended
or modified from time to time hereafter.
(b) The definition of "Change of Control" contained in Section 1.1 of
the Loan Agreement is hereby amended by deleting clause (c) thereof in its
entirety and substituting in lieu thereof the following revised clause (c):
(c) either Member shall transfer any or all of its ownership
units in Borrower or AHP Canada to any other Person or shall otherwise
cease to own and control such ownership units.
(c) The definition of "Control", "Controlled" or "Controlling"
contained in Section 1.1 of the Loan Agreement is hereby amended by deleting the
last sentence thereof and substituting in lieu thereof the following sentence:
Without limitation of the foregoing, the Members shall be deemed
to "Control" Borrower and AHP Canada, and Parent shall be deemed to
"Control" the Members, Borrower and AHP Canada.
(d) The definition of "Obligations" contained in Section 1.1 of the
Loan Agreement is hereby amended by adding the following sentence at the end of
such definition:
Without limitation of the foregoing, the "Obligations" shall
include all obligations of Borrower to Lender under the Borrower Guaranty.
3. Decrease in Revolving Line of Credit. Section 2.1 of the Loan
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Agreement is hereby amended by deleting in its entirety the first sentence in
paragraph (a) thereof and substituting in lieu thereof the following sentence:
On the Closing Date, Lender opened a Revolving Line of Credit in favor
of Borrower, the maximum aggregate principal amount of which has been
reduced to Five Million Dollars ($5,000,000) effective as of the date
of the funding of the "Term Loan" under the Wang Loan Agreement.
4. Collateral. Borrower hereby acknowledges and agrees with Lender
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that all of the Collateral shall secure all obligations of Borrower under the
Borrower Guaranty (in addition to all other Obligations of Borrower to Lender).
In furtherance of the foregoing, Section 3 of the
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Loan Agreement is hereby amended by inserting the following parenthetical after
the words "Loan Documents" in the third line thereof:
(including, without limitation, Borrower's Obligations under the
Borrower Guaranty)
5. Financial Statements. Section 8.5 of the Loan Agreement is
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hereby amended by deleting the parenthetical in the third and fourth lines
thereof and substituting in lieu thereof the following parenthetical:
(such statements for AHP Holding to be on a consolidated and
consolidating basis and such statements for Parent to be on a
consolidated basis)
6. Leverage Ratio. Section 8.17 of the Loan Agreement is hereby
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deleted in its entirety and the following revised Section 8.17 is hereby
substituted in lieu thereof:
8.17 Leverage Ratio.
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The Leverage Ratio shall be not more than 2.00:1 for each Fiscal
Quarter.
7. Tangible Net Worth. Section 8.18 of the Loan Agreement is hereby
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deleted in its entirety and the following revised Section 8.18 is hereby
substituted in lieu thereof:
8.18 Tangible Net Worth.
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Tangible Net Worth Shall be at least equal to Sixteen Million Dollars
($16,000,000), which minimum amount shall increase annually concurrently
with Borrower's delivery to Lender of the audited financial statements of
AHP Holdings and its consolidated subsidiaries for each Fiscal Year,
commencing with the Fiscal Year ending December 31, 1997, as required by
Section 8.6 hereof (but in no event more than one hundred twenty (120)
days after the end of any Fiscal Year) by an amount equal to forty percent
(40%) of net income of AHP and its consolidated subsidiaries for each
Fiscal Year.
8. Proceeds of Loan Repayment. The following new Section 8.23 is
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hereby added immediately after Section 8.22 of the Loan Agreement.
8.23 Proceeds of Loan Repayment. Concurrently with Borrower's
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receipt of the sum of Fifteen Million Dollars ($15,000,000) in payment of a
certain loan in like principal amount made by Borrower to Parent, which
payment shall be made concurrently with Lender's disbursement of the "Term
Loan" under the Wang Loan Agreement, Borrower shall apply Four Million
Dollars ($4,000,000) of such proceeds in payment of outstanding Revolving
Advances. The balance of such proceeds ($11,000,000) shall be held by
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Borrower in cash or cash equivalents satisfactory to Lender until this
Agreement has terminated and all Obligations have been paid in full. On a
quarterly basis, concurrently with its delivery of its financial statements
pursuant to Section 8.5 hereof. Borrower shall deliver to Lender such
evidence as Lender shall request that it continues to hold such amount in
cash or cash equivalents.
9. Intercompany Debt. Section 9.2 of the Loan Agreement is hereby
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amended by deleting clause (viii) thereof in its entirety, and substituting in
lieu thereof the following revised clause (viii):
(viii) Debt owing by Borrower to Parent or to the
Members or AHP Canada which does not exceed (net
of Debt owing by Parent or the Members or AHP
Canada to Borrower) Ten Million Dollars
($10,000,000) in aggregate principal amount, as to
all such Debt outstanding at any one time.
10. Distributions. Section 9.4 of the Loan Agreement is hereby
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deleted in its entirety and the following revised Section 9.4 is hereby
substituted in lieu thereof.
9.4 Distributions.
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Pay any dividend, make any capital distribution, redeem
or retire any capital stock or take any action which would
have an effect equivalent to any of the foregoing, except
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that unless an Event of Default or Default Condition then
exists and is continuing or would result from the payment of
such distributions and so long as the payment of such
distributions is otherwise made in accordance with
applicable law and Borrower's Organizational Documents, (i)
Borrower may make Tax Distributions to its Members at such
times as are provided in the Operating Agreement and (ii)
Borrower may make annual distributions to its Members in
each Fiscal Year in an amount, which does not exceed Three
Million Dollars ($3,000,000) in the aggregate in any Fiscal
Year.
11. Loans and Advances. Section 9.12 of the Loan Agreement is hereby
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deleted in its entirety and the following revised Section 9.12 is hereby
substituted in lieu thereof:
9.12. Loans and Advances.
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Make any loans or other advances of money or any other property, to
any person, including, without limitation, any officer, director,
stockholder, employee or Affiliate of Borrower except for (i) loans to
officers and employees that do not exceed Twenty-Five Thousand Dollars
($25,000) in aggregate principal amount as to all such Persons, at any one
time outstanding, and (ii) loans to Parent and the Members and AHP Canada,
the aggregate amount of which (net of loans from Parent and the Members and
AHP Canada to Borrower
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described in Section 9.2 above) does not exceed Ten Million Dollars
($10,000,000) at any time outstanding.
12. Events of Default. The following subsection 10.16 is hereby
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added at the end of Article 10 of the Loan Agreement:
10.16 Wang Loan Agreement
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Any "Event of Default" (as defined therein) shall occur under
the Wang Loan Agreement.
13. Binding Effect. Except to the extent set forth expressly
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hereinabove to the contrary, Borrower acknowledges and agrees that all terms and
provisions, covenants and conditions of the Loan Agreement and all documents
executed in conjunction therewith shall be and remain in full force and effect
and constitute the legal, valid, binding and enforceable obligations of Borrower
to Lender in accordance with their respective terms as of the date hereof.
14. Representations. In order to induce Lender to enter into this
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Amendment, Borrower hereby restates and renews each and every representation and
warranty heretofore made by it under or pursuant to the Loan Agreement and
represents and warrants further to Lender that it has taken all necessary and
appropriate company action to authorize the execution, delivery and performance
hereof and of any other document, instrument or agreement executed and/or
delivered in connection herewith and the same will not violate the
Organizational Documents or any document, instrument or agreement to which
Borrower is a party or any provision of law applicable to Borrower.
15. Covenants. Borrower hereby restates and affirms each and every
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obligation, covenant and condition of the Loan Agreement.
16. Further Assurances. Borrower agrees to take such further
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actions, as Lender shall reasonably request in connection herewith, to evidence
the amendments herein contained to the Loan Agreement.
17. No Default. Further to induce Lender to enter into this
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Amendment, Borrower hereby certifies to Lender that, upon execution of this
Amendment, there exists (i) no Default Condition or Event of Default under the
Loan Agreement and (ii) no fight of offset, defense, counterclaim, claim or
objection in favor of Borrower as against Lender arising out of or with respect
to any of the Obligations.
18. Conditions Precedent. The following shall constitute express
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conditions precedent to the effectiveness of the amendments contemplated hereby
and to the obligations of Lender hereunder:
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a. Revolving Note. Borrower shall have executed and delivered in favor of
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Lender a Revolving Promissory Note, dated as of the date hereof, in the
principal amount of Five Million Dollars ($5,000,000), which Revolving
Promissory Note (i) to the extent of the sum of Five Million Dollars
($5,000,000), shall constitute an extension and renewal of that certain
Revolving Promissory Note, dated as of December 16, 1996, in the principal
amount of Ten Million Dollars ($10,000,000), made by Borrower in favor of
Lender and (ii) shall be the "Revolving Note" for all purposes of the Loan
Agreement.
b. Resolutions. Lender shall have received from Borrower a certificate
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from the Secretary or an Assistant Secretary of Borrower, in form and
substance satisfactory to Lender, certifying to Lender that appropriate
resolutions have been entered into by the managers of Borrower incident
hereto and that the officers of Borrower whose signatures appear
hereinbelow, and on any and all other documents, instruments and agreements
executed in connection herewith, are duly authorized by the managers of
Borrower for and on behalf of Borrower to execute and deliver this
Amendment and such other documents, instruments and agreements, and to bind
Borrower accordingly thereby, all in form and substance satisfactory to
Lender;
x. Xxxx Loan Agreement. All conditions precedent to the effectiveness of
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the Wang Loan Agreement shall have been satisfied and such agreement shall
have become effective.
d. Reaffirmation. AHP Holdings shall have delivered to Lender a
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reaffirmation in respect of its Guaranty, specifically acknowledging the
inclusion of the Borrower Guaranty within the Obligations guaranteed under
such Guaranty.
19. Governing Law. This Amendment shall be governed by and construed
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in accordance with the laws of the State of Georgia.
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IN WITNESS WHEREOF, Borrower and Lender have executed this Amendment,
through their duly authorized officers, under their hands and seals, effective
as of the date and year first above written.
"BORROWER"
ASSOCIATED HYGIENIC (SEAL)
PRODUCTS LLC,
a Limited Liability Company
By:/s/ Xxxxx Xxxxx
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Name: Xxxxx Xxxxx
Title: President
Attest:/s/ Xxxxxx Xxxxx
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Name: Xxxxxx Xxxxx
Title: Secretary
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"LENDER"
SOUTHTRUST BANK, N.A. (SEAL)
By:/s/ Xxxxxxx X. Xxxxxx VP.
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Xxxxxxx X. Xxxxxx, Vice President
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REAFFIRMATION OF GUARANTY
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The undersigned, AHP Holdings, L.P., a Georgia limited partnership
("Guarantor") the guarantor pursuant to a Guaranty, dated December 16, 1996
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("Guaranty"), of all "Obligations" of "Borrower" to "Lender" as such terms are
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defined in the "Loan Agreement" referenced in the within and foregoing First
Amendment to Loan Security Agreement ("First Amendment"; capitalized terms used
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herein and not defined herein shall have the meanings assigned to them in the
First Amendment), hereby (a) acknowledges its receipt of a copy of the First
Amendment, (b) agrees to be bound thereby, (c) acknowledges and agrees that the
Guaranty shall continue in full force and effect, without modification,
diminution or impairment, from and after the execution and delivery of the First
Amendment (except that the obligations guaranteed by Guarantor under the
Guaranty shall not include Borrower's obligations under the Borrower Guaranty),
and (d) agrees that for so long as the Guaranty remains in effect it will not
pledge, hypothecate, assign, convey or transfer any of its assets (including,
without limitation, the membership units in Borrower and AHP Canada owned by it)
to any person other than Lender.
IN WITNESS WHEREOF the undersigned has executed this Reaffirmation of
Guaranty as of the 19th day of August, 1997.
AHP HOLDINGS L.P.
By: ELMBAY LIMITED, an English
Corporation, as General Partner
By: /s/ Xxxxx Xxxxx
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Name: Xxxxx Xxxxx
Title: Principal Executive Officer
