SECOND AMENDMENT
TO
REVOLVING CREDIT, TERM LOAN AND SECURITY AGREEMENT
THIS SECOND AMENDMENT ("Amendment") is entered into as of
July 31, 1998, by and among HEALTH-CHEM CORPORATION, a
corporation organized under the laws of the State of Delaware
("Holdings"), HERCULITE PRODUCTS, INC., a corporation organized
under the laws of the State of New York ("HPI"), TRANSDERM
LABORATORIES CORPORATION, a corporation organized under the laws
of the State of Delaware ("TLC"), HERCON ENVIRONMENTAL
CORPORATION, a corporation organized under the laws of the State
of Delaware ("HEC"), PACIFIC COMBINING CORPORATION, a corporation
organized under the laws of the State of California ("PCC") and
HERCON LABORATORIES CORPORATION, a corporation organized under
the laws of the State of Delaware ("HLC") (Holdings, HPI, TLC,
HEC, PCC and HLC, each a "Borrower" and collectively
"Borrowers"), and IBJ XXXXXXXX BUSINESS CREDIT CORPORATION (as
successor in interest to IBJ Xxxxxxxx Bank & Trust Company), as
agent (in such capacity, the "Agent") for itself and the
financial institutions which are now or which hereafter become a
party (collectively, the "Lenders" and individually a "Lender")
to the Loan Agreement (as hereafter defined).
BACKGROUND
Borrowers, Agent and Lender are parties to a Revolving
Credit, Term Loan and Security Agreement dated as of January 9,
1997 (as amended, supplemented or otherwise modified from time to
time, the "Loan Agreement") pursuant to which Agent and Lenders
provided Borrowers with certain financial accommodations.
Borrower has requested that Agent and Lenders amend the Loan
Agreement to, among other things, continue to provide Borrower
with an overadvance facility which shall terminate no later than
December 31, 1998 and Agent and Lenders are willing to do so on
the terms and conditions hereafter set forth.
NOW, THEREFORE, in consideration of any loan or advance or
grant of credit heretofore or hereafter made to or for the
account of Borrowers by Agent and Lenders, and for other good and
valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto hereby agree as follows:
1. Definitions. All capitalized terms not otherwise
defined herein shall have the meanings given to them in the Loan
Agreement.
2. Amendment to Loan Agreement. Subject to satisfaction
of the conditions precedent set forth in Section 3 below, the
Loan Agreement is hereby amended by amending the defined term
"Special Advance Amount" in its entirety to provide as follows:
"Special Advance Amount" shall mean an amount equal to
(i) $400,000 during the period January 21, 1998 through July 31,
1998, (ii) $600,000 during the period August 1, 1998 through
December 31, 1998 and (iii) $0 at all other times.
3. Conditions of Effectiveness. This Amendment shall
become effective when Agent shall have received (i) three (3)
copies of this Amendment executed by Borrowers and consented and
agreed to by each Guarantor and (ii) payment of an amendment fee
of $10,000 (which amount shall be charged to Borrower's Account).
4. Representations and Warranties. Each Borrower hereby
represents and warrants as follows:
(a) This Amendment and the Loan Agreement, as amended
hereby, constitute legal, valid and binding obligations of
such Borrower and are enforceable against such Borrower in
accordance with their respective terms.
(b) Upon the effectiveness of this Amendment, each
Borrower hereby reaffirms all covenants, representations and
warranties made in the Loan Agreement to the extent the same
are not amended hereby and agree that all such covenants,
representations and warranties shall be deemed to have been
remade as of the effective date of this Amendment.
(c) No Event of Default or Default has occurred and is
continuing or would exist after giving effect to this
Amendment.
(d) No Borrower has any defense, counterclaim or
offset with respect to the Loan Agreement.
5. Effect on the Loan Agreement.
(a) Upon the effectiveness of Section 2 hereof, each
reference in the Loan Agreement to "this Agreement," "hereunder,"
"hereof," "herein" or words of like import shall mean and be a
reference to the Loan Agreement as amended hereby.
(b) Except as specifically amended herein, the Loan
Agreement, and all other documents, instruments and agreements
executed and/or delivered in connection therewith, shall remain
in full force and effect, and are hereby ratified and confirmed.
(c) The execution, delivery and effectiveness of this
Amendment shall not, operate as a waiver of any right, power or
remedy of Agent or any Lender, nor constitute a waiver of any
provision of the Loan Agreement, or any other documents,
instruments or agreements executed and/or delivered under or in
connection therewith.
6. Governing Law. This Amendment shall be binding upon
and inure to the benefit of the parties hereto and their
respective successors and assigns and shall be governed by and
construed in accordance with the laws of the State of New York.
7. Headings. Section headings in this Amendment are
included herein for convenience of reference only and shall not
constitute a part of this Amendment for any other purpose.
8. Counterparts; Telecopies Signature. This Amendment may
be executed in any number of and by different parties hereto, on
separate counterparts, all of which when so executed shall be
deemed an original, but all such counterparts shall constitute
one and the same agreement. Any signature delivered by a party
by facsimile transmission shall be deemed to be an original
signature hereto.
IN WITNESS WHEREOF, this Amendment has been duly executed as
of the day and year first written above.
HEALTH-CHEM CORPORATION
HERCULITE PRODUCTS, INC.
PACIFIC COMBINING CORPORATION
HERCON LABORATORIES CORPORATION
By: /s/ Xxxxxx X. Xxxxxxx
Name: Xxxxxx X. Xxxxxxx
Title: Chairman of the Board of
each of the foregoing
corporations
TRANSDERM LABORATORIES CORPORATION
By: /s/ Xxxxxx X. Xxxxxxxxxx
Name: Xxxxxx X. Xxxxxxxxxx
Title: Vice President Finance
HERCON ENVIRONMENTAL CORPORATION
By: /s/ Xxxx X. Xxxxxxx
Name: Xxxx X. Xxxxxxx
Title: President
IBJ XXXXXXXX BUSINESS CREDIT
CORPORATION, as Agent and Lender
By: /s/ Xxxx X. Xxxxxx
Name: Xxxx X. Xxxxxx
Title: Vice President
CONSENT AND REAFFIRMATION BY GUARANTORS
Each of the undersigned consents to the execution of the
Second Amendment and acknowledges and agrees that each Guaranty
by each of the undersigned with respect to the Obligations is,
and will remain, in full force and effect in accordance with its
terms and that the undersigned has no defense, counterclaim or
offset with respect to the Guaranty.
August 20, 1998
MEDALLION GROUP, INC.
HEALTH-CHEM INDUSTRIES, INC.
H.S. PROTECTIVE FABRICS CORPORATION
H.S. DEVELOPMENT, INC.
YORK AEROSOL DELIVERY SYSTEM
CORPORATION
SPRINGS DEVELOPMENT CORPORATION
RESEARCH DEVELOPMENT CORPORATION
HEALTH-MED CORPORATION
CAPCO DELAWARE, INC.
ABERDEEN RESEARCH CORPORATION
By: /s/ Xxxxxx X. Xxxxxxx
Name: Xxxxxx X. Xxxxxxx
Title: President or Chairman of
the Board of each of the
foregoing corporations
