EXHIBIT 3.5
THIRD AMENDMENT AND WAIVER TO LOAN AGREEMENT
This THIRD AMMENDMENT AND WAIVER TO LOAN AGREEMENT (this "Amendment")
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is entered into as of September 10, 2001, between ASSOCIATED HYGIENIC PRODUCTS
LLC, a Delaware limited liability company (the "Borrower") and FOOTHILL CAPITAL
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CORPORATION, in its capacity as administrative agent (the "Agent") for the
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Lenders (as defined below),
W I T N E S S E T H:
WHEREAS, the Borrower, the Lenders (as defined therein) and Agent have
entered into that certain Amended and Restated Loan and Security Agreement dated
as of March 14, 2001, as amended by that certain First Amendment to Loan
Agreement and that certain Second Amendment to Loan Agreement prior to the date
hereof (as the same may be further modified, amended, restated or supplemented
from time to time, the "Loan Agreement"), pursuant to which the Lenders have
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agreed to extend credit to the Borrower from time to time; and
WHEREAS, pursuant to Section 7.8(a) of the Loan Agreement and Section
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2 of the Subordination Agreement in connection with Subordinated Note A, the
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Borrower is prohibited from making any payments of principal on Subordinated
Note A or Subordinated Note B (the "Subordinated Note Payment Prohibition"); and
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WHEREAS, pursuant to Section 7.14 of the Loan Agreement, the Borrower
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is prohibited from directly or indirectly entering into or permitting to exist
any transaction with any Affiliate of Borrower except for transactions that are
in the ordinary course of Borrower's business, upon fair and reasonable terms,
and are fully disclosed to Agent, including, without limitation, any disclosure
set forth on Annex A to the Affiliate Subordination Agreement, and that are no
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less favorable to Borrower than would be obtained in an arm's length transaction
with a non-Affiliate, and are subject to the Affiliate Subordination Agreement
(the "Affiliate Payment Prohibition"); and
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WHEREAS, the Borrower has requested that the Agent and the Lenders
waive the Subordinated Note Payment Prohibition and the Affiliate Payment
Prohibition, and amend the Loan Agreement and the Affiliate Subordination
Agreement to allow the Borrower to make (a) a $2,500,000 prepayment of principal
on Subordinated Note A, and (b) a non-ordinary course payment in full with
respect to the affiliate loan owed by Borrower to AHP Canada, Inc. in the amount
of $1,282,323.66, and the Agent and the Lenders have agreed to the requested
amendment and waiver on the terms and conditions set forth herein and in that
certain First Amendment to Amended and Restated Subordination and Non-Setoff
Agreement dated of even date herewith;
NOW THEREFORE, in consideration of the foregoing premises and other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the
parties hereto hereby agree that all capitalized terms not otherwise defined
herein shall have the meanings ascribed to such terms in the Loan Agreement and
further agree as follows:
1. Amendment to Section 7.14 of the Loan Agreement. Section 7.14 of the
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loan Agreement, "Transactions with Affiliates," is hereby modified and amended
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by deleting the existing Section 7.14 in its entirety and substituting the
following therefor:
"7.14 Transactions with Affiliates. Directly or indirectly enter into
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or permit to exist any transaction with any Affiliate of Borrower except (a)
transactions disclosed Annnex A to the Affiliate Subordination Agreement,
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(b) transactions that are in the ordinary course of Borrower's business, upon
fair and reasonable terms, that are fully disclosed to Agent, that are no less
favorable to Borrower than would be obtained in an arm's length transaction with
a non-Affiliate, and are subject to the Affiliate Subordination Agreement, and
(c) the affiliate loan owed by Borrower to AHP Canada, Inc. in an amount not
exceeding $1,282,323.66, which loan may be repaid in full (i) provided no Event
of Default has occurred and is continuing, and (ii) if after giving effect to
such repayment, Borrower shall have Excess Availability equal to or greater than
$10,000,000"
2. Waiver. The Lenders and the Agent hereby waive the Subordinated Note
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Payment Prohibition to allow a one-time principal repayment on Subordinated Note
A prior to September 15, 2001, in the amount of $2,500,000; provided, however,
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the above-referenced waiver shall not waive any other requirement or hinder,
restrict or otherwise modify the rights and remedies of the Agent or the Lenders
following the occurrence of any other Default or Event of Default under the Loan
Agreement, including, but not limited to, the Subordinated Note Payment
Prohibition with respect to any other future payments on Subordinated Note A or
Subordinated Note B,
3. No Other Amendments or Waivers. Except as otherwise expressed herein,
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the execution, delivery and effectiveness of this Amendment shall not operate as
a waiver of any right, power or remedy of the Agent or the Lenders under the
Loan Agreement, the Affiliate Subordination Agreement or any of the other Loan
Documents, nor constitute a waiver of any provision of the Loan Agreement, the
Affiliate Subordination Agreement or any of the other Loan Documents. Except for
the amendment and waiver set forth above, the text of the Loan Agreement, the
Affiliate Subordination Agreement and all other Loan Documents shall remain
unchanged and in full force and effect and the Borrower hereby ratifies and
confirms its obligations thereunder. This Amendment shall not constitute a
modification of the Loan Agreement or the Affiliate Subordination Agreement or a
course of dealing with the Agent or the Lenders at variance with the Loan
Agreement or the Affiliate Subordination Agreement such as to require further
notice by the Agent or the Lenders to require strict compliance with the terms
of the Loan Agreement, the Affiliate Subordination Agreement and the other Loan
Documents in the future, except as expressly set forth herein. The Borrower
acknowledges and expressly agrees that the Agent and the Lenders reserve the
right to and do in fact, require strict compliance with all terms and provisions
of the Loan Agreement, the Affiliate Subordination Agreement and the other Loan
Documents. The Borrower has no knowledge of any challenge to the Agent's or any
Lenders' claims arising under the Loan Documents, or to the effectiveness of the
Loan Documents.
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4. Conditions Precedent to Effectiveness. This Amendment shall become
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effective as of the date hereof when and only when, the Agent shall have
received:
(a) an amendment fee from the Borrower in the amount of $5,000
(it being understood that, by execution and delivery of this Amendment,
Borrower authorizes Agent to charge Borrower's Loan Account for such fee and
such amount shall thereafter accrue interest at the rate applicable to Advances
under the Loan Agreement in accordance with Section 2.6 of the Loan Agreement);
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and
(b) counterparts of this Amendment duly executed and delivered by the
Borrower and the Lenders; and
(c) the First Amendment to Amended and Restated Subordination and Non
Setoff Agreement dated of even date herewith, duly executed and delivered by
the Borrower, the Creditors party thereto, the Lenders and the Agent; and
(d) such other information, documents, instruments or approvals as the
Agent or the Agent's counsel may reasonably require.
5. Representations and Warranties of Borrower. Borrower represents and
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warrants as follows:
(a) Borrower is a limited liability company organized, validly
existing and in good standing under the laws of the jurisdiction indicated at
the beginning of this Amendment and all other jurisdictions in which the failure
to be so qualified reasonably could be expected to constitute a Material Adverse
Change;
(b) The execution, delivery, and performance by Borrower of this
Amendment and the Loan Documents to which it is a party, as amended hereby, are
within Borrower's limited liability company powers, have been duly authorized by
all necessary limited liability company action and do not and will not (i)
violate any provision of federal, state, or local law or regulation applicable
to Borrower, the Governing Documents of Borrower, or any order, judgment, or
decree of any court or other Governmental Authority binding on Borrower, (ii)
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 Borrower,
(iii) result in or require the creation or imposition of any Lien of any
nature whatsoever upon any properties or assets of Borrower, other than
Permitted Liens, or (iv) require any approval of Borrower's members or any
approval or consent of any Person under any material contractual obligation of
Borrower,
(c) The execution, delivery, and performance by Borrower of this
Amendment and the Loan Documents to which it is a party, as amended hereby, do
not and will no, require any registration with, consent, or approval of, or
notice to, or other action with or by, any Governmental Authority or other
Person;
(d) This Amendment and each other Loan Document to which Borrower is a
party, and all other documents contemplated hereby and thereby, when executed
and delivered by Borrower will be the legally valid and binding obligations of
Borrower, enforceable against Borrower in accordance with their respective
terms, except as enforcement may be limited by
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equitable principles or by bankruptcy, insolvency, reorganization, moratorium,
or similar laws relating to or limiting creditors' rights generally; and
(e) No Default or Event of Default is existing.
6. Counterparts. This Amendment may be executed in multiple counterparts,
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each of which shall be deemed to be an original and all of which, taken
together, shall constitute one and the same agreement. In proving this
Amendment in any judicial proceedings, it shall not be necessary to produce or
account for more than one such counterpart signed by the party against whom such
enforcement is sought. Any signatures delivered by a party facsimile
transmission shall be deemed our original signature hereto.
7. Reference to and Effect on the Loan Documents. Upon the effectiveness of
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this Amendment, on and after the date hereof each reference in the Loan Agrement
to "this Agreement", "hereunder", "hereof" or words of like import referring to
the Loan Agreement, and each reference in the other Loan Documents to "the Loan
Agreement" "thereunder", "thereof" or words of like import referring to the Loan
Agreement, shall mean and be a reference to the Loan Agreement as amended
hereby.
8. Costs, Expenses and Taxes. Borrower agrees to pay on demand all
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reasonable costs and expenses in connection with the preparation, execution, and
delivery of this Amendment and the other instruments and documents to be
delivered hereunder, including, without limitation, the reasonable fees and
out-of-pocket expenses of counsel for the Agent with respect thereto and with
respect to advising the Agent as to its rights and responsibilities hereunder
and thereunder.
9. Governing Law. This Amendment shall be deemed to be made pursuant to the
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laws of the State of Georgia with respect to agreements made and to be performed
wholly in the State of Georgia, and shall be construed, interpreted, performed
and enforced is accordance therewith.
10. Loan Document. This Amendment shall be deemed to be a Loan Document for
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all purposes.
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IN WITNESS WHEREOF, the parties hereto have executed and delivered
this Amendment as of the day and year first written above.
BORROWER: ASSOCIATED HYGIENIC PRODUCTS LLC
By:
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Name:
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Title:
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AGENT
and LENDER: FOOTHILL CAPITAL CORPORATI0N,
as Agent and a Lender
By:
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Name:
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Title:
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THIRD AMMENDMENT TO LOAN AGREEMENT
Signature Page
