EX-10.28
DEL LABORATORIES, INC.
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FIRST AMENDMENT
TO LOAN AGREEMENT
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FIRST AMENDMENT, dated as of March 31, 1997 (this "Amendment"), to the
Loan Agreement, dated as of May 26, 1993 (the "Loan Agreement"), by and among
Del Laboratories, Inc., a Delaware corporation (the "Company"), Xxxxxxx National
Life Insurance Company, a Michigan insurance corporation and Xxxxxxx National
Life Insurance Company of Michigan, a Michigan insurance corporation (Xxxxxxx
National Life Insurance Company and Xxxxxxx National Life Insurance Company of
Michigan are collectively referred to herein as "Lenders").
RECITALS:
WHEREAS, the Company has requested that Lenders consent to modify the Loan
Agreement in order to increase the ability of the Company to redeem certain of
its capital stock; and
WHEREAS, Lenders have agreed that upon this Amendment becoming effective
certain provisions of the Loan Agreement will be amended as provided below;
NOW, THEREFORE, the parties agree as follows:
A. Defined Terms. Terms defined in the Loan Agreement and used herein
shall have the same meanings given to them in the Loan Agreement.
B. Amendments to Loan Agreement.
1. Clause (A) in Section 5.8 of the Loan Agreement shall be deleted
in its entirety and replaced with the following:
"(A) the aggregate amount of all Restricted Payments made during the
period commencing on January 1, 1993, and ending on and including the date
of any action (the "Computation Period") shall not exceed the sum of
(1) $6,000,000, plus
(2) 50% (or, in the case of a net loss, minus 100%) of Consolidated
Net Income for the Computation Period, plus
(3) the amount of the net proceeds, in excess of the first
$6,500,000 of net proceeds, received by the Company at any time during the
period commencing on January 1, 1997, and ending on and including the date
of such Restricted Payment, directly from the issuance of any of the
Company's shares of capital stock, including but not limited to the net
proceeds received by the Company upon the exercise of any stock options or
other rights to purchase capital stock of the Company, less the amount of
all outstanding loans and advances made by the Company or any of its
Affiliates to employees of the Company or other Persons during such period
for the purpose of permitting such Persons to purchase shares or exercise
stock options of the Company, and less the amount of all purchases,
redemptions and retirements of shares of the Company effected
substantially concurrently with the issuance of any shares of the capital
stock of the Company during such period which do not qualify as a
"Restricted Payment" by virtue of Section (B)(2) of the definition
thereof, plus
(4) the amount of all Restricted Payments made by the Company, up to
a maximum of $6,500,000, either directly or indirectly through a
registered broker-dealer or an employee stock ownership trust (an "ESOT"),
to purchase, repurchase or redeem shares of capital stock of the Company
held by employees or former employees of the Company and its Subsidiaries
(or their respective heirs, personal representatives, successors or
assigns) during the period commencing on October 1, 1996, and ending on
and including the date of the Restricted Payment, provided that
(a) the total amount of all payments made to, and stock
purchase made from, Xxxxxx X. Xxxxxx not exceed $1,500,000 (any
excess payment being a prohibited Restricted Payment),
(b) any such payment or purchase of capital stock is otherwise
made in compliance with the terms of the Loan Agreement, and
(c) payments made in cash to any employee or former employee
of the Company or any of its Subsidiaries (or to such person's
heirs, personal representatives, successors or assigns) in
satisfaction of such employee's or former employee's account
balances under the Company's ESOT shall not be considered Restricted
Payments for purposes of this Agreement provided that such cash
payments are made consistent in all respects with the terms of the
ESOT and its past practices and are not made for the purpose,
directly or indirectly, of purchasing or redeeming capital stock of
the Company, and".
2. Section 5.14 of the Loan Agreement shall be amended by adding the
following clause at the end of that Section:
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"provided, however, that with respect to purchases of shares of the
capital stock of the Company from Affiliates, any purchase made for cash
at a price not greater than the average daily closing price of such shares
on all national securities exchanges and/or reported through the automated
quotation system of a registered securities association during the ten
business day period immediately preceding the date or the purchase shall
be deemed to have been made on an arm's length basis."
C. Conditions to Effectiveness. This Amendment shall become effective on
the date (the "Amendment Effective Date") on which the following conditions
precedent have been satisfied or waived:
1. The Company shall have executed and delivered this Amendment to
the Lenders.
2. The Lenders shall have received a Later Date Certificate, dated
as of the Amendment Effective Date, signed by the Secretary of the Company,
certifying such facts concerning the Company, the incumbency of its officers,
and its authority to enter into this Amendment as the Lenders may reasonably
require.
3. The Lenders shall have received the executed legal opinion, dated
the Amendment Effective Date, of Zimet, Haines, Xxxxxxxx & Xxxxxx, counsel to
the Company, or such other law firm as may be acceptable to the Lenders,
satisfactory in form and substance to the Lenders, which shall cover such
matters incident to this Amendment or the other loan documents as the Lenders
may reasonably require.
D. General.
1. Representation and Warranties. To induce the Lenders to enter
into this Amendment, the Company hereby represents and warrants to the Lenders
as of the Amendment Effective Date that:
(a) No Material Adverse Change or Default. Since May 26, 1993, there
has been no development or event nor any prospective development or event, which
has had or could reasonably be expected to have a material adverse effect on the
assets, business or financial condition of the Company. No Event of Default has
occurred and will be continuing after giving effect to this Amendment.
(b) Corporate Power; Authorization; Enforceable Obligations.
(i) The Company has the corporate power and authority, and the legal
right, to make and deliver this Amendment and to perform all of its obligations
under the Loan Agreement, as amended by this Amendment, and the other loan
documents, and has taken all
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necessary corporate action to authorize the execution and delivery of this
Amendment and the performance of the loan documents, as so amended.
(ii) No consent or authorization of, approval by, notice to, filing
with or other act by or in respect of, any governmental authority or any other
Person is required in connection with the execution and delivery of this
Amendment or with the performance, validity or enforceability of the loan
documents, as amended by this Amendment.
(iii) When executed and delivered, this Amendment and the Loan
Agreement, as amended by this Amendment, will constitute a legal, valid and
binding obligation of the Company enforceable against the Company in accordance
with its terms, except as affected by bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and other similar laws relating to or
affecting the enforcement of creditors' rights generally, general equitable
principles (whether considered in a proceeding in equity or at law) and an
implied covenant of good faith and fair dealing.
(c) No Legal Bar. The execution and delivery of this Amendment and
the performance of the Company's obligations under the loan documents, as
amended by this Amendment, will not violate any statute, rule, law, ordinance,
regulation or order (statutes, rules, laws, ordinances, regulations and orders
are collectively referred to as, "Governmental Rule") applicable to the Company
or any material contractual obligation of the Company and will not result in, or
require, the creation or imposition of any Encumbrance on any of its properties
or revenues pursuant to any such Governmental Rule or contractual obligation
which could reasonably be expected to have a material adverse effect on the
assets, business or financial condition of the Company.
(d) Representation and Warranties. The representations and
warranties made by the Company in the Loan Agreement and in Exhibit B thereto
are true and correct in all material respects on and as of the Amendment
Effective Date, before and after giving effect to the effectiveness of this
Amendment, as if made on and as of the Amendment Effective Date, other than
those that relate to an earlier or specific date provided, however, that the
Company makes no representation as to the continued accuracy of the information
contained in Schedules D-1 through D-8 of the Loan Agreement.
2. Payment of Expenses. The Company agrees to pay or reimburse
Lenders for all of their out-of-pocket costs and reasonable expenses incurred
in connection with this Amendment, any other documents prepared in connection
herewith and the transactions contemplated hereby, including, without
limitation, the reasonable fees and disbursements of counsel to Lenders.
3. No Other Amendments; Confirmation.
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(a) Except as expressly amended, modified and supplemented hereby, the
provisions of the Loan Agreement and each of the other loan documents are and
shall remain in full force and effect. The Company may not rely in any way upon
the Lenders' willingness to enter into this Amendment or assume that the Lenders
will agree to any future amendment of the Loan Agreement or other loan
documents.
(b) The Company hereby confirms its obligations under the Loan Agreement
and acknowledges that it has no defenses, claims or set-offs to the enforcement
by the Lenders of any of the Company's stated obligations thereunder.
4. Governing Law; Counterparts.
(a) This Amendment and the rights and obligations of the parties
hereto shall be governed by, and construed and interpreted in accordance with,
the internal, substantive laws of the State of Illinois without regard to its
conflicts of law doctrine.
(b) This Amendment may be executed by one or more of the parties to
this Amendment on any number of separate counterparts, and all of said
counterparts taken together shall be deemed to constitute one and the same
instrument. A set of the copies of this Amendment signed by all the parties
shall be lodged with the Company and with the Lenders. This Amendment may be
delivered by facsimile transmission of the relevant signature pages hereof.
[The next page is the signature page]
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IN WITNESS HEREOF, the parties hereto have caused this First
Amendment to be duly executed and delivered by their respective proper and duly
authorized officers as of the date and year first above written.
DEL LABORATORIES, INC. a Delaware
corporation
By: /s/ Xxxxxx X. Xxxxxxxxx
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Its: Vice President Finance
XXXXXXX NATIONAL LIFE INSURANCE
COMPANY, a Michigan insurance corporation
By: PPM America, Inc., its agent
By: /s/ Xxx Xxxxx
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Its: Senior Vice President
Xxxxxxx National Life Insurance Company as
successor by merger to
XXXXXXX NATIONAL LIFE INSURANCE COMPANY OF
MICHIGAN, a Michigan insurance
corporation
By: PPM America, Inc., its agent
By: /s/ Xxx Xxxxx
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Its: Senior Vice President
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