SECOND AMENDED AND
RESTATED LOAN AND SECURITY AGREEMENT
This is a SECOND AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT,
dated the 14th day of August, 1998, made by and between PNC BANK, NATIONAL
ASSOCIATION ("Lender"), having offices at Xxx Xxxxx Xxxxxx Xxxxxxxxx, Xxxx
Xxxxxxxxx, Xxx Xxxxxx 00000, and USA DETERGENTS, INC., a corporation organized
and existing under the laws of the State of Delaware ("Borrower"), having its
principal place of business at 0000 Xxxxxx Xxxxxx, Xxxxx Xxxxxxxxx, Xxx Xxxxxx
00000.
W I T N E S S E T H
WHEREAS, Lender and Borrower have previously entered into a commercial
lending relationship as evidenced by the Amended and Restated Loan and Security
Agreement dated February 25, 1998 (the "Loan Agreement"); and
WHEREAS, Borrower has or is about to refinance a portion of its
Obligations with Finova Capital Corporation as agent for itself and other
lenders (collectively, the "New Lender") and repay Lender on or before August
15, 1998 the principal sum of Twenty Five Million ($25,000,000.00) Dollars; and
WHEREAS, Lender has agreed that upon receipt of the Pay Down (as
hereinafter defined) it shall consent to a partial refinancing of Borrower's
Obligations to Lender and the termination of its interest in certain of the
Collateral and release the Guaranty of the Individual Guarantors; and
WHEREAS, Lender is the holder of a warrant to acquire certain common
stock of Borrower dated February 25, 1998 (the "Original Warrant") and has
agreed that, upon receipt of the Pay Down, the Original Warrant shall be
amended as herein provided; and
WHEREAS, Lender and Borrower are desirous of amending and restating
the terms and conditions of the Loan Agreement as herein provided.
NOW, THEREFORE, for and in consideration of the mutual covenants and
agreements herein contained and for other good and valuable consideration,
receipt of which is hereby acknowledged, it is agreed as follows:
1. DEFINITIONS
Section 1 of the Loan Agreement is hereby deleted in its entirety and
replaced with the following:
The definitions of the following terms shall have the meaning ascribed
to them in the preambles to this Agreement:
Borrower
Lender
Loan Agreement
New Lender
Original Warrant
"Affiliate" - any Person, which directly or indirectly through one or
more intermediaries controls, is controlled by, or is under common control
with, any other Person; for the purposes of this definition, "control" when
used with respect to any Person, means the power to direct the management and
policies of such Person, directly or indirectly, whether through the ownership
of voting securities, by contract or otherwise, and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
"Agreement" - this Second Amended and Restated Loan and Security
Agreement.
"Banking Day" - any day other than a Saturday, Sunday or legal holiday
for banks under the laws of the State wherein the New Jersey office of the
Lender as set forth above is located.
"Bridge Loan" - the loan of Lender to Borrower evidenced by the Bridge
Note.
"Bridge Loan Agreement" - the Security Agreement dated March 31, 1997
entered into between Borrower and Lender.
"Bridge Note" - the Amended and Restated Secured Bridge Note dated
February 25, 1998 executed by Borrower and payable to Lender.
"Capital Expenditure Loan" or "Capital Expenditure Loans" - the loan
of Lender to Borrower evidenced by the Capital Expenditure Note.
"Capital Expenditure Note" - the Amended and Restated Secured Capital
Expenditure Note dated February 25, 1998 executed by Borrower and payable to
Lender.
"Collateral" - (i) the Real Estate Collateral, (ii) the unlimited
continuing corporate guarantees of Chicago Management Powder Corp., Big Cloud
Powder Corporation and Chicago Contract Powder Corporation; (iii) all policies
or certificates of insurance related to the Real Estate Collateral and all
claims of Borrower against third parties for loss of or damage to, or otherwise
relating to, any of the Collateral and (iv) all rights and remedies which
Borrower might exercise with respect to any of the foregoing but for the
execution of this Agreement.
"December 1996 Loan Agreement" - the Loan Agreement dated December 17,
1996 entered into between Borrower and Lender.
2
"Default Rate" - a rate of interest two (2%) percent per annum in
excess of the then applicable rate.
"Encumbrance" - any security interest, mortgage, charge, claim,
pledge, hypothecation, assignment, deposit arrangement, encumbrance, lien
(statutory or other), preference, priority or other security agreement or
preferential arrangement of any kind or nature whatsoever (including, without
limitation, any conditional sale or other title retention agreement, any
capitalized lease having substantially the same economic effect as any of the
foregoing, and the filing of any financing statement under the UCC) in, upon,
or against Borrower or any asset of Borrower, whether or not voluntarily given.
"Environmental Claim" - any claim, suit, notice, order, demand or
other communication made by any Person, including Borrower, with respect to
Borrower or any of its properties, whether owned or leased, that: (i) asserts a
violation of an Environmental Law; (ii) asserts a liability under an
Environmental Law; (iv) demands information under an Environmental Law; (v)
alleges personal injury or property damage resulting from Hazardous Substances;
or (vi) alleges that there is or may be contamination.
"Environmental Law" - any Governmental Rule concerning protection or
regulation of the discharge of substances into the environment, including but
not limited to those concerning air emissions, water discharges and treatment,
storage tanks, and the handling, generation, treatment, storage and disposal of
waste materials, chemical substances, pollutants, contaminants, toxic
substances, pathogens, radioactive materials or hazardous substances of any
kind, whether solid, liquid or gaseous, including without limitation the
Resource Conservation and Recovery Act of 1976, 42 U.S.C. ss.6901 et seq., the
Federal Water Pollution Control Act, 33 U.S.C. ss.1251 et seq.,; the Clean Air
Act, 42 U.S.C. ss.7401 et seq.; the Hazardous Materials Transportation Act of
1975, 49 U.S.C. ss.ss.1801-1812; the Toxic Substances Control Act, 15 U.S.C.
ss.2601 et seq.; the Federal Insecticide, Fungicide and Rodenticide Act, 7
U.S.C. ss.136 et seq.; the Safe Drinking Water Act, 42 U.S.C. ss.300 et seq.;
and each as amended and as now or hereinafter in effect, and their state and
local counterparts or equivalents, including any regulations promulgated
thereunder.
"Equipment" - all of Borrower's equipment, machinery, fixtures,
motors, compressors, apparatus, fittings, lighting, electrical, plumbing,
heating and air-conditioning systems, and communications systems, building
supplies and materials, and all other tangible property similar to any of the
foregoing, which become fixtures now or hereafter located upon or related,
appurtenant or affixed to the Real Estate Collateral and usable in connection
with the present or future operation of the Real Estate Collateral and all
repairs, modifications, alterations, replacements, additions, parts and
accessories thereto.
"ERISA" - the provisions of the Employee Retirement Income Security
Act of 1974, as amended, and the related provisions of the Internal Revenue
Code, and with all regulations and published interpretations issued thereunder
by the United States Treasury Department, the United States Department of Labor
and the Pension Benefit Guaranty Corporation.
"Event of Default"- as defined in Section 9.
3
"Existing Loans" - all of the following: (i) a Revolving Loan of up to
$10,000,000.00; (ii) a Capital Expenditure Loan of up to $20,000,000.00; and
(iii) a Bridge Loan of $10,000,000.00.
"GAAP" - generally accepted accounting principles in effect in the
United States of America, consistently applied from reporting period to
reporting period.
"Governmental Authority" - any (i) nation, state, government,
jurisdiction or jurisdictional authority (domestic, foreign or international),
any political subdivision thereof, and any governmental, quasi-governmental,
judicial, public, statutory, administrative or regulatory body, agency,
department, bureau, authority, court, commission, board, office,
instrumentality, administrative tribunal or other entity of any of the
foregoing and any official thereof and (ii) any arbitrator, arbitration
tribunal or other non-governmental entity which has jurisdiction over Borrower
as a result of (A) the consent of Borrower or (B) being vested with such
jurisdiction by any Governmental Authority.
"Governmental Rule" - any constitutional provision, law, statute,
code, act, rule, regulation, permit, license, treaty, ordinance, order, writ,
injunction, decree, judgment, guideline, award, standard, directive, decision,
determination, demand or holding of any Governmental Authority, whether in
existence on the date hereof or whether issued, enacted or adopted hereafter,
and any change therein or in the interpretation or application thereof
following the date hereof.
"Guarantor" or "Guarantors" - Chicago Management Powder Corp., Big
Cloud Powder Corporation, Chicago Contract Powder Corporation and their
successors and assigns and any other Person who, at any time, shall agree to
guaranty and be a surety for the Obligations.
"Individual Guarantors" - Xxxx Xxxxxx, Xxxxxx Xxxxxxx, Xxxxxx Xxxxx,
Uri Xxxx and Xxxxxxxxx Xxxxxxxx.
"ISRA" - as defined in Section 4.9.
"Loans" - the Revolving Loan, the Capital Expenditure Loan and the
Bridge Loan, as the context may require, when not referred to by their full
titles.
"Missouri Property" - the real estate (and all buildings,
improvements, Equipment and appurtenances thereto) owned by the Borrower in the
City of Harrisonville, Cass County, Missouri, more particularly described in a
certain First Deed of Trust, Assignment of Leases and Rents, Security Agreement
and Fixture Filing dated February 25, 1998.
"North Brunswick Property" - the real estate (and all buildings,
improvements, Equipment and appurtenances thereto) owned by the Borrower in
North Brunswick, County of Middlesex, New Jersey, more particularly described
in a certain Mortgage & Security Agreement dated February 25, 1998.
4
"Notes" - the Amended and Restated Secured Capital Expenditure Note
and the Amended and Restated Secured Bridge Note, as the context may require,
when not referred to by their full titles.
"Obligations" - all the following: (i) all principal of and interest
on the Revolving Loan, the Capital Expenditure Loan and the Bridge Loan, and
all other sums payable by Borrower or any Related Entity under the terms of
this Agreement or any of the Relevant Documents; (ii) all other indebtedness,
liabilities, obligations and agreements of every kind and nature of Borrower or
any Related Entity to or with Lender or any affiliate of Lender whether
pursuant to this Agreement, any of the Relevant Documents or otherwise, whether
in the form of refinancing, letters of credit, bankers acceptances, interest
rate agreements, hedge or currency contracts, guarantees, loans, interest,
overdrafts charges, fees, expenses or otherwise, whether direct or indirect,
whether acquired outright, conditionally or as collateral security from
another, whether absolute or contingent, joint or several, liquidated or
unliquidated, secured or unsecured, and whether arising by operation of law or
otherwise. (iii) all guarantees of any of Borrower's indebtedness to Lender;
(iv) any participation or interest of Lender or any affiliate of Lender in any
indebtedness, liabilities or agreements of Borrower, any Related Entity or any
such guarantor to or with others; (v) all out-of-pockets costs and expenses
incurred by Lender in connection with this Agreement and the Relevant Documents
at any time, including, but not limited to the expenses and reasonable fees of
Lender's counsel, whether of outside counsel or the allocated cost of Lender's
in-house counsel; (vi) in each case whether now existing or hereafter created,
whether now or hereafter contemplated, and including without limitation any
future advances, renewals, extensions modifications or changes in form of, or
substitutions for, any of the items described in the preceding clauses (i)
through (v).
"Pay Down" - shall mean the payment to Lender in good funds of the
principal sum of Twenty Five Million ($25,000,000.00) Dollars on account of the
Loans on or before August 15, 1998, plus interest accrued to the date of
payment and costs (including reasonable legal fees).
"Permitted Encumbrance" - any one or combination of the following: (i)
The liens and security interests in the Real Estate Collateral granted to
Lender; (ii) Liens for taxes, assessments, governmental charges or levies on
Borrower or any of Borrower's properties, but only if such taxes, assessments,
governmental charges or levies (A) are at the time due and payable or if they
can thereafter be paid without penalty or are being contested in good faith by
appropriate proceedings diligently conducted and with respect to which Borrower
has created adequate reserves; or (B) are not pursuant to any Environmental
Law; (iii) Pledges or deposits to secure payment of workers' compensation
obligations, unemployment insurance, deposits or indemnities to secure public
or statutory obligations or for similar purposes; (iv) Mechanics', carriers'
workmen's', repairmen's and other similar statutory liens incurred in the
ordinary course of Borrower's business, so long as the liability secured is not
overdue or, if overdue, is being contested in good faith by appropriate actions
or proceedings diligently conducted with respect to which Borrower has created
adequate reserves or has adequate insurance protection; provided, however, that
at no time may the aggregate amount of such liens exceed $100,000.00; (v)
Encumbrances existing on the date hereof and listed on Schedule 5.8 of this
Agreement; provided, however, that the amount of the indebtedness secured by
each such encumbrance shall not exceed the indebtedness secured by such
encumbrance existing on the date hereof; (vi) with regard to the
5
North Brunswick Property, a second mortgage lien (the "Second Mortgage")
granted by the Borrower to 101 Realty Associates, L.L.C., a New Jersey limited
liability company formed by the Individual Guarantors to secure the principal
sum of $4,000,000.00, and interest thereon, dated the same date as this
Agreement, and (vii) liens and security interests granted to New Lender in
Borrower's assets other than the Real Estate Collateral.
"Person" - any individual, partnership, corporation, association,
trust, business trust, joint venture, joint stock company, limited liability
company, limited liability partnership, limited partnership, unincorporated
organization or enterprise or Governmental Authority.
"Personal Property" - all tangible and intangible personal property of
Borrower, excluding the Real Estate Collateral.
"Plan" - any employee benefit plan of Borrower relating to ERISA.
"Pledge" - collectively, the Pledge of Trademark as Security and the
General Pledge of Trademark as Security delivered by Borrower to Lender on
February 25, 1998 and all amendments, modifications, substitutions and
replacements thereto and thereof.
"Post-Closing Collateral" - a mortgage on the leasehold estate (and
all buildings, improvements, Equipment and appurtenances thereto) located at
0000 Xxxx 00xx Xxxxxx, Xxxxxxx (Clearing), Illinois (the "Chicago Property")
owned by Chicago Contract Powder Corporation ("Chicago Contract"), which Lender
recognizes requires the consent of the ground lessor, Witco Chemical
Corporation (the "Witco Consent"), and that such mortgage is not effective
until and unless the Witco Consent is obtained.
"Prime Rate" - the rate of interest announced from time to time by
Lender as its "prime rate" or "prime lending rate," which rate is determined
from time to time by Lender as a means of pricing some loans to its customers
and is neither tied to any external rate of interest or index nor necessarily
reflects the lowest rate of interest actually charged by Lender to any
particular class or category of customers.
"Real Estate Collateral" - shall mean the mortgages, collateral
assignments of leases or other liens granted by Borrower to Lender in and to
the North Brunswick Property and the Missouri Property together with any
leases, rents, issues or profits derived therefrom, or condemnation awards, or
proceeds of insurance policies relative thereto.
"Related Entity" - any corporate subsidiary of Borrower and any
unincorporated association or other Person through which Borrower conducts any
part of its business.
"Relevant Documents" - any and all documents and instruments delivered
to Lender pursuant or incident to this Agreement or any of the Loans (i) by
Borrower or any Related Entity; (ii) by any pledgor or grantor of a lien,
security interest or other right, or (iii) by any Guarantor of any of the
Obligations, including without limitation the guarantees of the Obligations of
Borrower executed by the Guarantors under even date.
6
"Revolving Loan" or "Revolving Loans" - the loan of Lender to Borrower
evidenced by the Revolving Note.
"Revolving Note" - the Amended and Restated Secured Revolving Note
dated February 25, 1998 executed by Borrower and payable to Lender.
"Termination Date" - shall mean, in relation to the Bridge Loan and
the Capital Expenditure Loan (absent the existence of an Event of Default),
June 30, 1999.
"UCC" - the Uniform Commercial Code as in effect from time to time in
the State wherein Lender's office as set forth on the first page hereof is
located.
"Warrant" - the Amended and Restated Common Stock Purchase Warrant
delivered by Borrower to Lender dated the date hereof and all extensions,
renewals, amendments, modifications, substitutions and replacements thereto and
thereof.
2. CREDIT FACILITIES
Section 2 of the Loan Agreement is hereby deleted in its entirety and
replaced with the following:
DEBT
2.1 PAY DOWN. Borrower hereby acknowledges that upon the payment of
the Pay Down there remains due and owing to Lender on account of the Loans, the
aggregate principal sum of $9,997,983.16 plus accrued and unpaid interest and
costs (including reasonable legal fees). It is understood and agreed that the
Pay Down shall be applied to the extent thereof first to interest due on the
Existing Loans, then to Lender's cost and expenses (including reasonable legal
fees), then to the principal of the Revolving Loan, then to the Capital
Expenditure Loan and then to the Bridge Loan.
2.2 REPAYMENT OF BALANCE OF LOANS. Borrower shall pay any unpaid
principal balance, interest and costs and expenses due to Lender on account of
the Loans in accordance with the terms of this Agreement, the Capital
Expenditure Note and the Bridge Note but in all events on or before the
Termination Date. Lender hereby acknowledges that the Revolving Loan has been
paid in full.
2.3 INTEREST RATE. The Loans shall bear interest at a fluctuating
interest rate per annum equal to the following: (i) three quarters (3/4) of one
percentage point above Lender's Prime Rate in effect from time to time from
June 1, 1998 through and including August 31, 1998; (ii) one (1) percentage
point above Lender's Prime Rate in the effect from time to time from September
1, 1998 through and including September 30, 1998; (iii) one and one quarter (1
1/4) percentage points above Lender's Prime Rate in effect from time to time
from October 1, 1998 through and including October 31, 1998; (iv) one and one
half (1 1/2) percentage points above Lender's Prime Rate in effect from time to
time from November 1, 1998 through and including
7
November 30, 1998; (v) two (2) percentage points above Lender's Prime Rate in
effect from time to time from December 1, 1998 through and including June 30,
1999. Each change in such fluctuating interest rate to take effect
simultaneously with the corresponding change in the Prime Rate, without notice
to Borrower.
2.4 REPAYMENT. Interest on the Loans shall be due at the end of each
calendar month and shall be payable immediately. Any failure or delay by Lender
in presenting invoices for interest payments shall not discharge or relieve
Borrower of the obligation to make such interest payments. The Loans plus all
accrued and unpaid interest and fees thereon, shall be payable (x) on the
Termination Date, or (y) at such other time as is provided in Section 10,
Section 12 or elsewhere in this Agreement, whichever of (x) or (y) shall first
occur.
2.5 ADDITIONAL PROVISIONS RE: INTEREST, FEES AND PAYMENTS ON ALL LOANS
2.5(1) INTEREST CALCULATION; LAWFUL RATE. Interest on the
Loans shall be calculated on a daily basis upon the unpaid principal balance,
with each day representing 1/360th of a year. If the interest rate calculated
in accordance with any provision of this Agreement for any of the Loans would
at any time exceed the maximum permitted by any law then applicable to such
Loans, then for such period as such rate would exceed the maximum permitted by
such law (and no longer), the rate of interest payable on the Loans shall be
reduced to the maximum permitted by such law.
2.5(2) CHARGING PRINCIPAL AND INTEREST PAYMENTS. Lender may,
at its discretion, charge the amount of any payment of principal or interest on
any of the Loans to any checking or loan account of Borrower, deduct such
amount from any future Loan to Borrower or other funds received by Lender
against payment of such amount. Borrower hereby consents to all such charges.
Anything herein to the contrary notwithstanding, Lender shall not make any such
charge against an account or funds otherwise pledged to the New Lender as agent
or any other Person.
2.5(3) DEFAULT RATE. Upon the occurrence and during the
continuance of any Event of Default hereunder, the Loans shall, at the option
of Lender, bear interest at the Default Rate.
2.5(4) NON-BANKING DAYS. If any payment pursuant to this
Agreement or any of the Relevant Documents shall be stated to be due on a day
other than a Banking Day, such payment may be made on the next succeeding
Banking Day and such extension of time shall be included in computation of the
interest or other payment due.
2.5(5) REIMBURSEMENT OF INCREASED COST TO LENDER. If any law,
regulation or guideline, or change in any law, regulation or guideline or in
the interpretation thereof, or any order or ruling by any Governmental
Authority, or compliance by the Lender, with any Governmental Rule of any such
Governmental Authority, shall impose, modify, or deem applicable to Lender any
reserve, capital, special deposit or other requirement or condition in respect
of this Agreement or any of the Loans, which results in an increased cost or
reduced
8
benefit to Lender in maintaining any of the Loans (as determined by reasonable
allocation of the aggregate of such increased costs or reduced benefits to
Lender resulting from such event), then Borrower shall pay to Lender from time
to time, upon demand, additional amounts sufficient to compensate Lender for
such increased costs or reduced benefits. Interest shall be due and payable on
each such amount if not paid within ten (10) days after the date of such demand
until payment in full thereof at the Default Rate. A certificate setting forth
in reasonable detail such increased cost incurred or reduced benefit realized
by Lender as a result of any such event shall be conclusive as to the amount
thereof, absent manifest error.
2.6 EXISTING LOANS. Borrower hereby acknowledges that:
A. the Existing Loans are due from the Borrower to
Lender without any defense, offset or counterclaim whatsoever;
B. the Existing Loans shall henceforth be governed
and paid pursuant to this Agreement; and
C. all Existing Loans shall be secured by the
Collateral set forth herein.
3. SECURITY INTEREST
Section 3 of the Loan Agreement is hereby deleted in its entirety and
replaced with the following
COLLATERAL
3.1 PERSONAL PROPERTY. Effective upon receipt of the Pay Down in good
funds, the Lender's security interest in the Personal Property and Post Closing
Collateral of the Borrower is hereby released and terminated and Lender shall
thereupon cease to have a lien on the Personal Property of the Borrower and
shall retain a lien only on the Real Estate Collateral. In furtherance thereof,
Lender shall execute and deliver to Borrower on the date of the Pay Down (a)
Uniform Commercial Code termination statements relevant thereto for the state
filing offices in which Lender has filed a lien, including, but not limited to,
the offices set forth in Exhibit "A" attached hereto and made a part hereof,
and (b) a discharge of the assets subject to the Pledge. Lender shall execute
and deliver such additional documents as Borrower may reasonably request from
time to time to effectuate the termination of Lender's security interest in the
Personal Property, at the Borrower's sole cost and expense.
3.2 INDIVIDUAL GUARANTORS. Effective upon receipt of the Pay Down in
good funds by the Lender, the Individual Guarantors shall be deemed released of
their obligations to Lender under the terms of the guarantees executed by them.
3.3 OTHER COLLATERAL. As security for the due and punctual payment and
performance of all of the Obligations, whether pursuant to this Agreement or
otherwise,
9
Borrower has mortgaged and granted assignments of leases and rents to Lender in
the Real Estate Collateral.
3.4 FURTHER ASSURANCES. Borrower shall execute and deliver such other
documents (in form and substance satisfactory to Lender) and take such other
actions as Lender may reasonably request from time to time in order to create,
perfect or continue the mortgage and assignment of lease interests and other
liens provided for by this Agreement in the Real Estate Collateral. All Real
Estate Collateral shall be retained by Lender to secure the repayment of the
Loans in accordance with the terms of this Agreement, the Capital Expenditure
Note and the Bridge Note.
4. REPRESENTATIONS AND WARRANTIES.
Section 4 of the Loan Agreement is hereby deleted in its entirety and
replaced with the following:
REPRESENTATIONS AND WARRANTIES.
Borrower represents and warrants to Lender that the following
statements are true and accurate.
4.1 ORGANIZATION AND QUALIFICATION
4.1(1) Borrower is a corporation duly organized, validly
existing and in good standing under the laws of the jurisdiction stated at the
beginning of this Agreement.
4.1(2) Borrower has the power and authority, and all
necessary licenses or other authorizations, to own its properties and to carry
on its business as now conducted, and is duly qualified and in good standing in
each jurisdiction wherein the nature of the property owned or used or of the
business conducted requires such qualification, except where the failure to
satisfy such requirements would not have a material adverse effect on the
Borrower's operations, financial condition, or ability to perform under the
terms of this Agreement.
4.2 DUE AUTHORIZATION; NO DEFAULT
4.2(1) The execution, delivery and performance by Borrower of
this Agreement, the Notes and the Relevant Documents are within Borrower's
powers, have been duly authorized by all necessary action on the part of
Borrower, and do not and will not (a) violate Borrower's Certificate of
Incorporation or By-Laws, or any Governmental Rule of any Governmental
Authority, (b) constitute a breach of, or default under, any agreement,
undertaking or instrument to which Borrower is a party or by which it may be
affected, or (c) result in the imposition of any lien, Encumbrance or
restriction on any assets of Borrower.
10
4.2(2) Borrower has delivered to Lender true and complete
copies of Borrower's resolutions necessary to authorize the transactions
contemplated by this Agreement, and of Borrower's Certificate of Incorporation
and By-Laws, all as in effect on the date hereof and certified by a duly
authorized officer of Borrower.
4.2(3) This Agreement, upon its execution and delivery, shall
be a legal, valid and binding obligation of Borrower, enforceable against
Borrower in accordance with its terms, and the Notes and Relevant Documents
remain legal, valid and binding obligations of Borrower, enforceable against
Borrower in accordance with their respective terms.
4.3 NO PROCEEDINGS. Except as forth in Schedule 4.3 to this Agreement,
there are no pending or threatened claims, actions, proceedings or
investigations before any Governmental Authority that may, singly or in the
aggregate, have a material adverse effect on (a) the validity or enforceability
of this amendment to the Loan Agreement, any of the Notes or any of the
Relevant Documents, or the ability of Borrower to perform any of its
Obligations, or (b) the financial condition or the properties or operations of
Borrower.
4.4 NO CHANGE IN FINANCIAL CONDITION; SOLVENCY.
4.4(1) There has been no material adverse change in
Borrower's financial condition since February 25, 1998.
4.4(2) Borrower's assets, at a fair valuation, exceed
Borrower's liabilities (including, without limitation, contingent liabilities),
Borrower has the capacity to pay its debts, and Borrower has capital and assets
sufficient to carry on its business.
4.5 COMPLIANCE WITH LAWS. Except as set forth in Schedule 4.5 of this
Agreement, Borrower is in compliance in all material respects with all
Governmental Rules applicable to its ownership or use of properties or the
conduct of its business; Borrower has not received any notice of violation of
any of the foregoing; and Borrower is not in violation of any judgment, order
or decree of any Governmental Rule.
4.6 NO OTHER VIOLATIONS. Borrower is not in violation of any term of
its Certificate or Articles of Incorporation or Bylaws.
4.7 TAXES AND ASSESSMENTS. Except as set forth on Schedule 4.7(A) of
this Agreement, Borrower has filed all federal, state and local tax returns and
other reports it is required to file to the date hereof (or has obtained valid,
written extensions as to any not so filed), has paid all taxes, assessments,
and other governmental charges due and payable to the date hereof, and has made
adequate provision for the payment of such taxes, assessments and charges
accrued but not yet payable. Borrower has no knowledge of any deficiency or
additional assessment in a materially important amount in connection with any
taxes, assessments or other governmental charges not provided for or disclosed
in the financial statements set forth on Schedule 4.7(B) of this Agreement.
11
4.8 OTHER REPRESENTATIONS AND WARRANTIES. Except as otherwise set
forth herein, all other representations and warranties of the Borrower as set
forth in the Loan Agreement are true accurate and correct as of the date hereof
and do not as of this date contain any material fact or omit to state any
material fact necessary to make such representation or warranty not misleading
in light of the circumstances under which it has been made.
4.9 ENVIRONMENTAL MATTERS. Except as disclosed in Schedule 4.9 to this
Agreement: (a) no property owned or used by Borrower and located in the State
of New Jersey is an "industrial establishment" within the meaning of the New
Jersey Industrial Site Recovery Act ("ISRA") or is or has been used for the
generation, manufacture, refining, transportation, treatment, storage handling
or disposal of any "hazardous substances" or "hazardous wastes" within the
meaning of ISRA; (b) the following are all of the Standard Industrial
Classification Codes applicable to the properties and operations of Borrower:
2841; (c) Borrower is in compliance with all applicable Environmental Laws; (d)
there has been no contamination or release of hazardous substances, at, upon,
under or within any property owned or, to the best of Borrower's knowledge, at,
upon, or within any property leased by Borrower, and there has been no
contamination (as defined in any applicable Environmental Law) or release of
hazardous substances (as defined in any applicable Environmental Law) on any
other property that has migrated or threatens to migrate to any property owned
by Borrower or, to the best of Borrower's knowledge, to any property leased by
Borrower; (e) there are not now and never have been above-ground or underground
storage tanks at any property owned by Borrower or, to the best of Borrower's
knowledge, at any property leased by Borrower; (f) there are no transformers,
capacitors, or other items of Equipment containing polychlorinated biphenyls at
levels in excess of 49 parts per million, violative of applicable Environmental
Law, at any property owned by Borrower or, to the best of Borrower's knowledge,
at any property leased by Borrower; (g) other than materials used or produced,
held, transported and disposed of in accordance with Environmental Laws,
Borrower has not used its operations for, and properties owned or leased by
Borrower are not now and have never been used by Borrower (or, to the best
knowledge of Borrower after due inquiry, by any predecessor in possession or
other Person) for treatment, generation, storage, recycling, or disposal of
hazardous substances; (h) no hazardous substances are present at any property
owned by Borrower or, to the best of Borrower's knowledge, at any property
leased by Borrower, nor will any hazardous substances be present upon any such
property or utilized in the operation thereof by Borrower except which are
transported, used, stored, disposed of and otherwise handled in accordance with
all Environmental Laws, in proper storage containers; (i) all permits and
authorizations required under Environmental Laws for all operations of Borrower
have been duly issued and are in full force and effect, including but not
limited to those for air emissions, water discharges and treatment, storage
tanks and the generation, treatment, storage and disposal of hazardous
substances; (j) there are no pending or threatened Environmental Claims against
Borrower or any property owned or leased by Borrower; and Borrower has not
created or caused any condition or occurrence with respect to any property
owned or leased by Borrower that could reasonably be anticipated (x) to form
the basis of an Environmental Claim against Borrower or its properties or (y)
to cause any property owned or leased by Borrower to be subject to any
restrictions on its ownership, occupancy or transferability under any
Environmental Law; (k) no notice relating to hazardous substances is contained
in any deed relating to any property owned by Borrower or, to the best of
Borrower's
12
knowledge, in any deed relating to any property leased by Borrower and there
are no facts or conditions on any such property that would require that such a
notice be placed in the deed to any such property; (l) no portion of any
property owned by Borrower or, to the best of Borrower's knowledge, any
property leased by Borrower, contains asbestos-containing material that is or
threatens to become friable; and (m) the representations and warranties set
forth in this Section 4.9 shall survive repayment of the Obligations and the
termination of this Agreement and the Relevant Documents.
5. AFFIRMATIVE COVENANTS
Section 5 of the Loan Agreement is hereby deleted in its entirety and
replaced with the following:
AFFIRMATIVE COVENANTS
Borrower covenants and agrees that, until full and final payment and
performance of the Loans and all other Obligations under this Agreement and the
Relevant Documents, Borrower shall, unless Lender shall otherwise consent in
writing:
5.1 MAINTENANCE OF EXISTENCE AND QUALIFICATIONS. Maintain and preserve
in full force and effect its existence and good standing and all other rights,
powers, franchises, licenses and qualifications necessary or desirable for its
ownership or use of properties material to, or the conduct of, its business.
5.2 PAYMENT OF TAXES AND OTHER OBLIGATIONS. Pay, before they become
delinquent, all taxes, assessments and governmental charges imposed upon the
Real Estate Collateral, except where the same is being contested in good faith.
5.3 MAINTENANCE OF PROPERTIES. Maintain its properties in good working
order and condition, normal wear and tear excepted.
5.4 NOTICE OF ADVERSE EVENTS. Promptly notify Lender in writing of the
occurrence or existence of any of the following: (a) any Event of Default as
defined in this Agreement or any event which, with the giving of notice, lapse
of time or other condition, would become such an Event of Default; (b) any
matter or event which has resulted in, or may result in, a material adverse
change in the financial condition or any property or operations of Borrower;
(c) any material claim, action, proceeding or investigation filed or instituted
against Borrower, or any adverse determination in any material pending action,
proceeding or investigation affecting it; (d) any loss from casualty or theft
in excess of $250,000.00, whether or not insured, affecting property of
Borrower; (e) whether or not otherwise reportable under this Section 5.4, any
complaint, citation, order or other notice of a violation of a claim involving
any of the following, if the liability or penalty therefor may exceed $100,000
singly or in the aggregate: any applicable Governmental Rules relating to air
emissions, water discharge, noise emissions, solid or liquid disposal,
hazardous waste or substances, or other environmental health or safety matters
(the notice to Lender to include, along with other relevant information, the
name of the complainant or
13
claimant and the nature and potential amount of the claim); (f) any event or
condition described in Section 9.13 of this Agreement relating to ERISA; or (g)
if any of the representations and warranties contained in this Agreement, or in
any of the Relevant Documents or any other writing delivered to Lender by
Borrower in connection with this Agreement or any of the transactions
contemplated thereby, ceases to be true, correct and complete in any material
respect.
5.5 INFORMATION AND DOCUMENTS TO BE FURNISHED TO LENDER. Furnish to
Lender in form and substance satisfactory to it:
5.5(1) REPORTING REQUIREMENTS. Upon request, such information
and statements as Lender shall reasonably request from time to time regarding
Borrower's business affairs, financial condition and the results of its
operations. Without limiting the generality of the foregoing, Borrower shall
provide Lender with:
(i) for each month other than December in each year, within
thirty (30) days after the end of each month, unaudited financial statements
with respect to the prior month prepared on a basis consistent with such
statements prepared in prior months and otherwise in accordance with GAAP,
provided that (a) no such monthly reports will be required until January, 1999,
and (b) for the months of January and February 1999, unaudited financial
statements within forty-five (45) days after the end of such months and for
each of March, June and September of each fiscal year of Borrower, Borrower may
deliver such unaudited financial statements in accordance with paragraph (ii)
below.
(ii) within fifty (50) days after the end of each quarter but
in no event more than five (5) days after the date of filing with the
Securities and Exchange Commission, unaudited financial statements with respect
to the prior quarter prepared on a basis consistent with such statements
prepared in prior quarters and otherwise in accordance with GAAP, it being
acknowledged that Borrower's delivery of its 10Q report will satisfy the
foregoing reporting requirement.
(iii) audited annual financial statements, prepared in
accordance with GAAP, including balance sheets, income and cash flow
statements, accompanied by the unqualified report thereon of independent
certified public accountants reasonably acceptable to Lender as soon as
available, and, in any event, within one hundred (100) days after the end of
each fiscal year of Borrower, it being acknowledged that Borrower's delivery of
its 10K report will satisfy the foregoing reporting requirement, together with
the management letter, in the form provided to the auditors and shareholders of
Borrower within one hundred fifty (150) days after the end of each fiscal year
of Borrower.
(iv) at least fifteen (15) days prior to the end of each
fiscal year of Borrower, annual operating budget (including income statement,
balance sheet and cashflow statement, by month) for the upcoming fiscal year of
Borrower; and
(v) such certificates relating to the foregoing as Lender may
reasonably request, including, without limitation, a certificate from the
president or the chief financial officer
14
of Borrower ("Compliance Certificate") monthly with regard to all covenants, in
each case also stating whether any Event of Default has occurred or event
which, with giving of notice or the passage of time, or both, would constitute
an Event of Default, and if so, the steps being taken to prevent or cure such
Event of Default, and such other certificates relating to the reporting
requirements set forth in this Section 5.5(1) as Lender shall reasonably
request. All reports or financial statements submitted by Borrower shall be in
reasonable detail and shall be certified by the chief financial officer of
Borrower as being complete and correct.
5.5(2) PUBLIC COMPANY REPORTING. In addition to the reporting
requirements under Section 5.5(1) above, Borrower shall deliver to Lender, (i)
all press releases made available general by Borrower or any of its Related
Entities to the public concerning material developments in the business of
Borrower or any such Related Entity and all notifications received from the
Securities and Exchange Commission by Borrower or its Related Entities which
are of public record pursuant to the Security Exchange Act of 1934 and the
rules promulgated thereunder, and (ii) true and complete copies of all
financial statements, reports, notices and documents set or made available by
Borrower to its securities holders or publicly filed with the Securities and
Exchange Commission, any other federal agency at any time administering United
States securities laws and with any other governmental agency (including,
without limitation, 10Q reports, 10K reports, proxy statements and registration
statements), within five (5) Business Days after such reports are filed, but in
no event more than five (5) Business Days after the due date of such documents.
5.5(3) ACCOUNTANT'S CERTIFICATE/RELIANCE LETTER.
Simultaneously with the delivery of the annual financial statements referred to
in Section 5.5(1), a certificate of the certified public accountant preparing
such statements stating his/her acknowledgment of Lender's reliance upon such
financial statements in providing financial accommodations to Borrower which
certificate shall also include an affirmative acknowledgment by Borrower that
Borrower has knowledge of the submission of such financial statements to Lender
and of Lender's reliance thereon.
5.5(4) ERISA DOCUMENTS. As soon as filed or distributed, all
ERISA reports, notices, returns and other documents filed as required by or in
compliance with ERISA, whether to the Internal Revenue Service, the Department
of Labor, the Pension Benefit Guaranty Corporation or any other appropriate
agency.
5.5(5) VIOLATIONS. Immediately, a copy of any complaint,
citation, order or other notice of a violation or claim required to be reported
pursuant to Subsection 5.4 of this Agreement.
5.5(6) OTHER DOCUMENTS. Promptly upon demand:
(A) A certificate executed by an officer of Borrower
satisfactory to Lender stating that there then exists no Event of Default
hereunder and no event which, with the giving of notice or lapse of time or
other condition, would constitute an Event of Default;
15
(B) Photocopies of documents evidencing right to
payment (and if an Event of Default occurs, all original documents evidencing
right to payment, including but not limited to invoices, original orders, and
shipping and delivery receipts); and
(C) Such other documents or information as Lender
may reasonably request, including financial projections and cash flow analysis.
5.6 ACCESS TO PROPERTY. At any time and from time to time, upon
request by Lender, give any representative of Lender access, during normal
business hours, to inspect any of Borrower's properties.
5.7 INSURANCE.
5.7(1) LIABILITY AND PROPERTY INSURANCE. Maintain at
Borrower's expense (with such insurers, in such amounts and with such
deductibles (not greater than $10,000.00) as is reasonably satisfactory to
Lender, public liability and third party property damage insurance and
insurance on the Real Estate Collateral (including without limitation,
insurance against fire, explosion, boiler damage, theft, burglary, pilferage,
loss in transit and all other hazards and risks ordinarily insured against by
other owners or users of such properties in similar businesses), which
insurance shall be evidenced by policies (i) in form and substance reasonably
satisfactory to Lender, (ii) designating Lender and its assigns as mortgagee,
additional co-insureds and loss payees as their interests may appear from time
to time, (iii) containing a "breach of warranty clause" whereby the insurer
agrees that (1) a breach of the insuring conditions or any act or neglect of
Borrower or any other named insured, (2) the foreclosure or other proceedings
or notice of sale or enforcement of any lien or security relating to the
property of the Borrower, (3) the occupation of the premises wherein such
property is located for purposes more hazardous than are permitted by the
policy of insurance, or (4) any errors, omissions, or improper or incorrect
reporting by the named insured, shall not invalidate the insurance as to Lender
and its assigns, and (iv) requiring at least thirty (30) days' prior written
notice to Lender and its assigns before cancellation or any material change
shall be effective.
5.7(2) COPIES OF POLICIES. Upon demand, deliver to Lender a
photocopy of each policy (and if an Event of Default has occurred, the original
of each policy) evidencing insurance required by this Section 5.7, together
with evidence of payment of all premiums therefor.
5.7(3) NOTICE AND PROOF OF LOSS. In the event of loss or
damage, forthwith notify Lender and file proofs of loss satisfactory to Lender
with the appropriate insurer, but without limiting the rights of Lender
pursuant to Subsection 8.1(5).
5.7(4) PROCEEDS. Forthwith upon receipt, endorse and deliver
insurance proceeds (for any loss or property damage to the Collateral) to
Lender, but without limiting the rights of Lender pursuant to Subsection
8.1(5).
16
In no event shall Lender be required either to (i)
ascertain the existence of or examine any insurance policy, or (ii) advise
Borrower in the event such insurance coverage shall not comply with the
requirements of this Agreement.
5.8 CONDITION OF COLLATERAL; NO LIENS. Maintain the Collateral in good
condition and repair at all times (normal wear and tear excepted), preserve the
Real Estate Collateral from loss, damage, or destruction of any nature
whatsoever, and keep the Collateral free and clear of any Encumbrance, except
Permitted Encumbrances including any identified on Schedule 5.8 to this
Agreement .
5.9 RECORDS. Maintain complete and accurate books and records of the
Collateral.
5.10 FURTHER ASSURANCES. From time to time, execute and deliver such
further documents and take such further actions as Lender may reasonably
request in order to carry out the purposes of this Agreement, the Relevant
Documents and any other instruments, documents and agreements which shall be
executed concurrently herewith or thereafter with regard to the transactions
contemplated by this Agreement.
5.11 RELATED ENTITIES. Cause each Related Entity to comply with the
covenants stated in this Section 5, to the extent relevant to such entity, as
if stated with reference to such entity.
5.12 ENVIRONMENTAL SITE ASSESSMENTS. In the event the Loans have not
been paid by February 1, 1999, then in that event, at the request of Lender,
Borrower shall deliver to Lender, upon demand, Phase I environmental site
assessments for all real property owned or leased by Borrower, in form and
substance satisfactory to Lender, and such additional reports that may be
requested following the completion of any remediation or further investigation
recommended by such site assessment, in a manner satisfactory to Lender.
6. NEGATIVE COVENANTS
Section 6 of the Loan Agreement is hereby deleted in its entirety and
replaced with the following:
NEGATIVE COVENANTS
Borrower covenants and agrees that, until full and final payment and
performance of the Loans and all other Obligations under this Agreement and the
Relevant Documents, Borrower shall not, unless Lender shall otherwise consent
in writing:
6.1 NO CONSOLIDATION, MERGER, ACQUISITION, LIQUIDATION. Enter into any
merger, consolidation, reorganization or recapitalization; take any steps in
contemplation of dissolution or liquidation; conduct any part of Borrower's
business through any corporate subsidiary, unincorporated association or other
entity not disclosed on Schedule 6.1 to this Agreement; or acquire the stock or
assets of any person, firm, joint venture, partnership, corporation or other
entity, whether by merger, consolidation, purchase of stock or otherwise.
17
6.2 DISPOSITION OF COLLATERAL. Sell, lease, or otherwise transfer or
dispose of any or all of the Real Estate Collateral.
6.3 OTHER LIENS. incur, create or permit to exist, in an aggregate
amount at any time exceeding $100,000.00 in excess of Permitted Encumbrances,
any Encumbrance, conditional sale or other title retention agreement, lease
having substantially the same effect as any of the foregoing, or other
preferential arrangement of any type, in each case upon or with respect to Real
Estate Collateral of Borrower, except Permitted Encumbrances.
6.4 LOANS. Make advances, loans or extensions of credit to, or invest
in, any Person except for loans or cash advances to employees (i) in the amount
of $341,000 until December 31, 1998, and (ii) as of January 1, 1999 and
thereafter, not in excess of an aggregate amount of $205,000 in any fiscal year
of Borrower on a consolidated basis with its Affiliates.
6.5 GUARANTIES; CONTINGENT LIABILITIES. Except as set forth in Section
6.3, assume, guarantee, endorse, contingently agree to purchase or otherwise
become liable upon the obligation of any person or entity (except a subsidiary
of Borrower), except by the endorsement of negotiable instruments for deposit
or collection or similar transactions in the ordinary course of business.
6.6 DIVIDENDS AND OTHER DISTRIBUTIONS. Declare or pay any cash
dividend or make any distribution on, or redeem, retire or otherwise acquire
directly or indirectly, any share of its stock, or make any distribution of
assets to its stockholders without the prior written consent of Lender.
6.7 MODIFICATION OF GOVERNING DOCUMENTS. Change, alter or modify, or
permit any change, alteration or modification of, its Certificate of
Incorporation or Bylaws (or partnership agreement) or other governing
documents.
6.8 CHANGE BUSINESS. Cause or permit a material change in the nature
of its business as conducted on the date of this Agreement.
6.9 CHANGE OF ACCOUNTING PRACTICES. Change its present accounting
principles or practices in any material respect, except as may be required or
permitted by changes in or pursuant to GAAP.
6.10 INCONSISTENT AGREEMENT. Enter into any agreement containing any
provision that would be violated by the performance of the Obligations or
Borrower's obligations under any of the Relevant Documents or under any
document delivered or to be delivered by it in connection therewith.
7. CONDITIONS TO MAKING EXTENSIONS OF CREDIT
18
Section 7 of the Loan Agreement is hereby deleted in its entirety.
8. ADDITIONAL POWERS OF LENDER
Section 8 of the Loan Agreement is hereby deleted in its entirety and
replaced with the following:
ADDITIONAL POWERS OF LENDER
8.1 POWERS OF ATTORNEY. Borrower hereby constitutes and appoints
Lender (and any employee or agent of Lender, with full power of substitution)
its true and lawful attorney and agent in fact to take any or all of the
actions described below in Lender's or Borrower's name and at Borrower's
expense.
8.1(2) EVIDENCE OF LIENS. Lender may execute such financing
statements and other documents and take such other actions as Lender deems
reasonably necessary or proper in order to create, perfect or continue the
mortgage liens provided for by this Agreement or any of the Relevant Documents,
and Lender may file the same in any appropriate governmental office.
8.1(3) PRESERVATION OF COLLATERAL. Lender, acting in good
faith, may take any and all actions that it deems necessary or proper to
preserve its interest in the Collateral, including without limitation the
payment of debts of Borrower that might impair the Collateral or Lender's
security interest therein, the purchase of insurance on the Real Estate
Collateral, the repair or safeguarding of the Real Estate Collateral, or the
payment of taxes, assessments or other liens thereon. All sums so expended by
Lender shall be added to the Obligations, shall be secured by the Collateral,
and shall be payable on demand with interest at the Default Rate from the
respective dates such sums are expended.
8.1(4) LENDER'S RIGHT TO CURE. In the event Borrower fails to
perform any of its Obligations, then Lender may perform the same but shall not
be obligated to do so. All sums so expended by Lender shall be added to the
Obligations, shall be secured by the Collateral, and shall be payable on demand
with interest at the Default Rate from the respective dates such sums are
expended.
8.1(5) INSURANCE. Lender may file proofs of loss and claim
with respect to any of the Real Estate Collateral with the appropriate insurer,
and may endorse in its own and Borrower's name any checks of drafts
constituting insurance proceeds.
8.2 IRREVOCABILITY; LENDER'S DISCRETION. Borrower covenants and agrees
that any action described in Section 8.1 may be taken at Lender's sole and
absolute discretion, acting in good faith, at any time and from time to time,
and (unless stated specifically to the contrary in Section 8.1 with respect to
any power) whether prior or subsequent to an Event of Default, and Borrower
hereby ratifies and confirms at actions so taken. Borrower further covenants
and agrees that the power of attorney granted by Section 8.1 are coupled with
an interest and shall be
19
irrevocable until full and final payment and performance of the Loans and all
other Obligations under this Agreement and the Relevant Documents; that said
powers are granted solely for the protection of Lender's interest and Lender
shall have no duty to exercise any thereof; that the decision whether to
exercise any of such powers, and the manner of exercise, shall be solely within
Lender's discretion; and that neither Lender nor any of its directors,
officers, employees or agents shall be liable for any act of omission or
commission, or for any mistake or error of judgment, in connection with any
such powers.
9. EVENTS OF DEFAULT
Section 9 of the Loan Agreement is hereby deleted in its entirety and
replaced with the following:
EVENTS OF DEFAULT
The occurrence of any of the following shall constitute an Event of
Default:
9.1 FAILURE TO PAY. Borrower fails to pay when due any principal of or
interest on any Revolving Loan, Capital Expenditure Loan or Bridge Loan or any
other sum owing to Lender, including without limitation any of the Obligations
arising under this Agreement or any of the Relevant Documents or under any
other agreement with Lender;
9.2 FAILURE TO PERFORM. Borrower fails to perform or observe any
covenant, term or condition of this Agreement or any of the Relevant Documents,
and such default is not cured within three (3) business days following written
notification of such violation;
9.3 CROSS DEFAULT; DEFAULT ON OTHER DEBT. (a) Any other default on any
of the Obligations or under any of the Relevant Documents occurs, after
applicable notice and cure periods, if any, or (b) default occurs under any
indebtedness for borrowed money of Borrower, or of any Guarantor of any of the
Obligations, to any third party which in the aggregate exceeds One Hundred
Thousand ($100,000.00) Dollars, and such third party declares such indebtedness
or other obligation due prior to its date of maturity.
9.4 FALSE REPRESENTATION OR WARRANTY. Any representation, warranty or
statement contained in this Agreement, in any of the Relevant Documents or in
any other writing delivered to Lender in connection with the Collateral, this
Agreement or any of the transactions contemplated thereby, proves to have been
incorrect in any material respect when made;
9.5 CESSATION OF BUSINESS. Borrower ceases to do business as a going
concern;
9.6 CHANGE IN CONDITION. There occurs any material and adverse change
in the condition or affairs, financial or otherwise, of Borrower or of any
endorser, guarantor or surety for any of the Obligations, which in the
reasonable opinion of Lender impairs Lender's security or increases its risks;
20
9.7 LIQUIDATION OR DISSOLUTION. Borrower takes any action to authorize
its liquidation or dissolution;
9.8 INABILITY TO PAY DEBTS. Borrower (a) becomes unable or fails to
pay its debts generally as they become due, (b) admits in writing its inability
to pay its debts, or (c) proposes or makes a composition agreement with
creditors, a general assignment for the benefit of creditors, or a bulk sale;
9.9 BANKRUPTCY; INSOLVENCY. Any proceeding is instituted by or against
Borrower (a) seeking to adjudicate it bankrupt or insolvent, or seeking
reorganization, arrangement, adjustment or composition of it or its debts under
any law relating to bankruptcy, insolvency or reorganization or relief of
debtors, or (b) seeking appointment of a receiver, trustee, or other similar
official for it or for any substantial part of its property, or Borrower takes
any action to authorize or consent to any action described in this Section 9.9
and not stayed or dismissed within sixty (60) days.
9.10 JUDGMENTS. One or more judgments or orders (other than
shareholder litigation) for the payment of money exceeding $250,000.00 in the
aggregate in any fiscal year are rendered against Borrower and/or its Related
Entities that are not covered by insurance, and any such judgment(s) or
order(s) continue(s) unsatisfied and not effectively discharged or stayed for a
period of forty-five (45) consecutive days from the entry thereof;
9.11 ATTACHMENT. Any part of the Real Estate Collateral becomes
subject to attachment, execution, levy or like process which shall not have
been effectively stayed;
9.12 CONDEMNATION. Any governmental agency, or other entity with power
to do so, commences proceedings to condemn, seizes or expropriates the Real
Estate Collateral (unless Borrower obtains an injunction against such actions
within thirty (30) days from the date of their commencement) necessary for the
conduct of Borrower's business as conducted on the date of this Agreement,
without material change, or Borrower abandons the Real Estate Collateral or
suspends operation thereof for a period of thirty (30) consecutive days;
9.13 ERISA. With respect to any Plan, there occurs or exists any of
the events or conditions described in the following clauses (a) through (h) and
such event or condition, together with all like events or conditions, could in
the opinion of Lender subject Borrower to any tax, penalty or other liability
that might, singly or in the aggregate, have a material adverse effect on the
financial condition or the properties or operations of Borrower: (a) a
reportable event as defined in Section 4043 of ERISA, (b) a prohibited
transaction as defined in Section 406 of ERISA or Section 4975 of the Internal
Revenue Code, (c) termination of the Plan or filing of notice of intention to
terminate, (d) institution of the Pension Benefit Guaranty Corporation of
proceedings to terminate, or to appoint a trustee to administer, the Plan, or
circumstances that constitute grounds for any such proceedings, (e) complete or
partial withdrawal from a multi-employer Plan, or the reorganization,
insolvency or termination of a multi-employer Plan, (f) an accumulated funding
deficiency within the meaning of ERISA, (g) violation of the reporting,
21
disclosure or fiduciary responsibility requirements of ERISA or the Internal
Revenue Code, or (h) any act or condition which could result in direct,
indirect or contingent liability to any Plan or the Pension Benefit Guaranty
Corporation; or
9.14 GUARANTY. Any guaranty of any of the Obligations by the
Guarantors ceases to be effective or any Guarantor denies liability thereunder.
10. REMEDIES
Section 10 of the Loan Agreement is hereby deleted in its entirety and
replaced with the following:
REMEDIES
10.1 RIGHTS IN GENERAL. Automatically upon the occurrence of an Event
of Default described in Section 9, and at the option of Lender upon the
occurrence of any other Event of Default, (a) the principal and accrued
interest of the Loans, all other amounts payable under this Agreement and all
other Obligations shall become and be immediately due and payable, without
presentment, demand, protest, or further notice of any kind, all of which are
hereby expressly waived by Borrower, and (b) Lender shall be entitled to
exercise forthwith (to the extent and in such order as Lender may elect, in its
sole and absolute discretion) any or all rights and remedies provided for in
this Agreement, the mortgages, the assignment of leases, the Capital
Expenditure Note, the Bridge Note or any Relevant Documents, all rights and
remedies of a secured party under the UCC, and all other rights and remedies
that may otherwise be available to Lender by agreement or at law or in equity.
10.2 SPECIFIC RIGHTS REGARDING COLLATERAL. In addition to the rights
as stated generally in Section 10.1, Borrower agrees that, upon the occurrence
of an Event of Default, Lender shall be entitled to the rights and remedies,
and Borrower shall have the obligations, set forth below:
10.2(1) Lender may enter upon the Real Estate Collateral and
take possession thereof.
10.2(2) Any cash proceeds of sale, lease or other disposition
of Collateral shall be applied as follows:
First: To the expenses of collecting, enforcing,
safeguarding, holding and disposing of Collateral, and to
other expenses of Lender in connection with the enforcement
of this Agreement, any of the Notes, any of the Relevant
Documents, or any other agreement relating to any of the
Obligations (including without limitation court costs and the
fees and expenses of attorneys, accountants and
22
appraisers), together with interest at the Default Rate from
the respective dates such sums are expended;
Second: Any surplus then remaining to the payment of interest
and principal of the Loans and other sums payable as part of
the Obligations, in such order as Lender elects; and
Third: Any surplus then remaining to Borrower or whoever may
be lawfully entitled thereto.
10.3 CUMULATIVE REMEDIES; NO WAIVER BY LENDER. No remedy referred to
in this Agreement is intended to be exclusive, but each shall be cumulative and
in addition to any other remedy referred to in this Agreement or otherwise
available to Lender by agreement or at law or in equity, and Lender may
exercise its remedies concurrently, independently, or successively. No express
or implied waiver by Lender of any default or Event of Default shall in any way
be, or be construed to be, a waiver of any future or subsequent default or
Event of Default. The failure or delay of Lender in exercising any rights
granted it hereunder upon any occurrence of any of the contingencies set forth
herein shall not constitute a waiver of any such right upon the continuation or
recurrence of any such contingency or similar contingencies, and any single or
partial exercise of any particular right by Lender shall not exhaust the same
or constitute a waiver of any other right.
10.4 WAIVERS AND AGREEMENTS RELATING TO REMEDIES. In connection with
any action or proceeding arising out of or relating in any way to this
Agreement, any of the Notes, any of the Loans, any of the Relevant Documents,
any other agreement relating to any of the Obligations, any of the Collateral,
or any act or omission relating to any of the foregoing:
10.4(1) Borrower agrees that all of the Collateral
constitutes equal security for all of the Obligations, and agrees that Lender
shall be entitled to sell, retain or otherwise deal with any or all of the
Collateral, in any order or simultaneously as Lender shall determine in its
sole and absolute discretion, free of any requirement for the marshaling of
assets or other restriction upon Lender in dealing with the Collateral; and
10.4(2) Borrower agrees that Lender may proceed directly
against Borrower for collection of any or all of the Obligations without first
selling, retaining or otherwise dealing with any of the Collateral.
11. ADDITIONAL WAIVERS AND CONSENTS OF BORROWER
Section 11 of the Loan Agreement is hereby deleted in its entirety and
replaced with the following:
23
ADDITIONAL WAIVERS AND CONSENTS OF BORROWER
11.1 WAIVERS. Borrower waives demand, presentment, notice of dishonor
or protest of any instruments either of Borrower or others which may be
included in the Collateral.
11.2 CONSENTS. Borrower consents to (a) any extension, postponement of
time of payment or other indulgence, (b) any substitution, exchange or release
of Collateral, (c) any addition to, or release of, any party or person
primarily or secondarily liable, and (d) after the occurrence of an Event of
Default, any acceptance of partial payments on any Accounts or instruments and
the settlement, compromising or adjustment thereof.
11.3 APPLICATIONS OF PAYMENTS. Borrower consents and agrees that,
whether or not an Event of Default shall have occurred, Lender shall be
entitled to apply the proceeds of any payment on account of the Loans made to
Lender by or on behalf of Borrower, including, without limitation, any and all
proceeds arising from any of the Collateral securing the obligations of
Borrower to Lender, in the manner and against the Obligation or Obligations as
determined in the sole and absolute discretion of Lender.
12. TERMINATION OF AGREEMENT
Section 12 of the Loan Agreement is hereby deleted in its
entirety and replaced with the following:
TERMINATION OF AGREEMENT
12.1 TERMINATION CHARGE. On the Termination Date or if this Agreement
is terminated at any time and for any reason, Borrower shall pay to Lender:
(i) The principal and interest due on the Loans; plus
(ii) All other Obligations under this Agreement and the
Relevant Documents; plus
(iii) The sum of Two Hundred Fifty Thousand Dollars
($250,000.00).
12.2 RIGHTS UPON TERMINATION. Notwithstanding the termination of this
Agreement as herein provided, Lender's mortgages on the Real Estate Collateral,
assignment of leases and liens on the Collateral, together with its rights and
remedies herein set forth shall remain in full force and effect until all
Borrower's Obligations are paid in full.
24
12.3 RELEASE. IN CONSIDERATION OF LENDER'S ENTERING INTO THIS
AGREEMENT, BORROWER AND GUARANTORS HEREBY RELEASE THE LENDER, ITS SUCCESSORS
AND ASSIGNS, ATTORNEYS, AGENTS, OFFICERS, DIRECTORS AND EMPLOYEES, FROM ANY AND
ALL CLAIMS THEY OR ANY OF THEM HAVE, HAD OR MAY CLAIM TO HAVE, AT ANY TIME,
AGAINST THE LENDER RELATING TO, ARISING OUT OF OR RESULTING FROM THE DECEMBER
1996 LOAN AGREEMENT, BRIDGE LOAN AGREEMENT, ANY DOCUMENTS AND/OR INSTRUMENTS
RELATING THERETO OR SECURING THE OBLIGATIONS, THE LOAN AGREEMENT, THIS
AGREEMENT AND ANY AMENDMENTS HERETO OR THERETO, AT ANY TIME FROM THE BEGINNING
OF TIME THROUGH THE DATE HEREOF. LENDER SHALL NOT BE LIABLE OR RESPONSIBLE TO
BORROWER OR GUARANTORS FOR ANY ACTS OR OMISSIONS NOR FOR ANY ERROR OF JUDGMENT
OR MISTAKE OF LAW OR FACT EXCEPT FOR GROSS NEGLIGENCE OR WILLFUL MISCONDUCT.
13. COSTS, EXPENSES AND TAXES
Section 13 of the Loan Agreement is hereby deleted in its entirety and
replaced with the following:
COSTS, EXPENSES AND TAXES
Borrower agrees to pay on demand: (a) all costs and expenses in
connection with the preparation, execution, delivery and administration of this
Agreement, the Notes, the Relevant Documents, and the other documents to be
delivered in connection with this Agreement or any amendments to any of the
foregoing (including, without limitation, the fees and out-of-pocket expenses
of the attorneys for Lender, whether outside counsel or the allocated costs of
Lender's internal counsel and the cost of appraisals and reappraisals of the
Real Estate Collateral); (b) all losses, costs and expenses incurred by Lender
in connection with the enforcement of this Agreement, any of the Notes, any of
the Relevant Documents, or any other agreement relating to any of the
Obligations, or in the preservation of any rights of Lender under any thereof,
or in connection with legal advice relating to the rights or responsibilities
of Lender under any thereof (including with limitation court costs and the fees
and expenses of attorneys, accountants and appraisers), and any expenditure
made by Lender in accordance with this Agreement; and (c) any and all stamp and
other taxes payable or determined to be payable in connection with the
execution and delivery of this Agreement, any of the Notes, or any of the
Relevant Documents, and all liabilities to which Lender may become subject as
the result of delay in paying or omission to pay such taxes. With respect to
any amount advanced by Lender and required to be reimbursed by Borrower
pursuant to the foregoing provisions of this Section 13, Borrower shall also
pay Lender interest on such amount at the Default Rate. Borrower's obligations
under this Section 13 shall survive termination of the other provisions of this
Agreement.
14. INDEMNIFICATION BY BORROWER/WAIVER OF CLAIMS
Section 14 of the Loan Agreement is hereby deleted in its
entirety and replaced with the following:
25
INDEMNIFICATION BY BORROWER/WAIVER OF CLAIMS
14.1 INDEMNIFICATION. Borrower hereby covenants and agrees to
indemnify, defend and hold harmless Lender and its officers, directors,
employees and agents from and against any and all claims, damages, liabilities,
costs and expenses (including without limitation, the reasonable fees and
out-of-pocket expenses of counsel) which may be incurred by or asserted against
Lender or any such other individual or entity in connection with: (a) any
investigation, action or proceeding arising out of or in any way relating to
this Agreement, any of the Notes, any of the Loans, any of the Relevant
Documents, any other agreement relating to any of the Obligations, any of the
Collateral, or any act or omission relating to any of the foregoing; (b) any
taxes (other than income taxes applicable to the Lender), liabilities, claims
or damages relating to the Collateral or Lender's liens thereon; (c) the
correctness, validity or genuineness of any instruments or documents that may
be released or endorsed to Borrower by Lender (which shall automatically be
deemed to be without recourse to Lender in any event), or the existence,
character, quantity, quality, condition, value or delivery of any goods
purporting to be represented by any such documents; or (d) any broker's
commission, finder's fee or similar charge or fee in connection with the Loans
and the transactions contemplated in this Agreement. It being further
understood and agreed that, excluded from the indemnification set forth above,
are any claims attributable to the gross negligence or willful misconduct of
the Lender and such indemnified person.
To the extent that the undertaking to indemnify, pay and hold
harmless set forth in this Section 14.1 may be unenforceable because it is
violative of any law or public policy, Borrower shall contribute the maximum
portion which it is permitted to pay and satisfy under applicable law, to the
payment and satisfaction of all matters referred to under this Section. It is
further understood and agreed that, to the extent a claim indemnified by the
Borrower set forth hereunder is in fact paid by the Borrower and/or an insurer
under a policy of insurance maintained by the Borrower, the Borrower and/or
such insurer, as the case may be, shall be subrogated to the extent of such
payment to the rights and remedies of the indemnified person on whose behalf
such claim was paid with respect to the transaction or event giving rise to
such claim; provided further that such right of subrogation shall not extend to
any insurance policy maintained by or on behalf of the Lender or any
indemnified person.
14.2 WAIVER OF CLAIMS. To the extent permitted by applicable law, no
claim may be made by Borrower or any other person against Lender or any of its
affiliates, directors, officers, employees, agents, attorneys or consultants
for any special, indirect, consequential or punitive damages in respect of any
claim for breach of contract, tort or any other theory of liability arising out
of or related to the transactions contemplated by this Agreement or any act,
omission or event occurring in connection therewith; and Borrower hereby
waives, releases and agrees not to xxx upon any claim for any such damages,
whether or not accrued and whether or not known or suspected to exist in its
favor. Neither Lender nor any of its affiliates, directors, officers, employees
or agents shall be liable for any action taken or omitted to be taken by it or
them under or in connection with this Agreement or the transactions
contemplated hereby, except for its or their own gross negligence or willful
misconduct.
26
14.3 CLAIMS PROCEDURE. The Lender and such indemnified person shall
promptly notify the Borrower of any claim as to which indemnification is
sought, provided that the failure to provide such notice shall not release the
Borrower from any of its obligations to indemnify hereunder, so long as such
failure does not in any way prejudice the rights of the Borrower with respect
to the availability or extent of coverage of insurance or otherwise result in
any material adverse consequence to the Borrower. Subject to the rights of
insurers under policies of insurance maintained by the Borrower, the Borrower
shall have the right to investigate, and a right in its sole discretion to
defend or compromise any claim for which indemnification is sought under this
Section 14, and the Lender or such indemnified person shall cooperate with all
reasonable requests of the Borrower in connection therewith. Nothing contained
in this Section 14 shall be deemed to require the Lender or such indemnified
person to contest any claim or to assume responsibility for or control of any
judicial proceeding with respect thereto.
15. MISCELLANEOUS
Section 15 of the Loan Agreement is hereby deleted in its entirety and
replaced with the following:
MISCELLANEOUS
15.1 ENTIRE AGREEMENT; AMENDMENTS; LENDER'S CONSENT. This Agreement
(including the Exhibits and Schedules thereto), the Revolving Note, the Capital
Expenditure Note, the Bridge Note and the Relevant Documents supersede, with
respect to their subject matter, all prior and contemporaneous agreements,
understandings, inducements or conditions between the respective parties,
whether express or implied, oral or written. No amendment or waiver of any
provision of this Agreement, any of the Notes or any of the Relevant Documents,
nor consent to any departure by Borrower therefrom, shall in any event be
effective unless the same shall be in writing and signed by Lender, and then
such waiver or consent shall be effective only in the specific instance and for
the specific purpose for which given.
15.2 NOTICES. All notices and other communications relating to this
Agreement or any of the Notes (or to any of the Relevant Documents, unless
otherwise specified therein) shall be in writing, and addressed as follows and
sent by hand delivery, registered or certified mail, recognized overnight
courier service or telecopier with confirmation of delivery:
If to Lender: PNC Bank, National Association
000 Xxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxxxxxx 00000-0000
Attention: Xxxxxx X. XxXxxx, Senior Vice President
With a copy to: Xxxxx X. Xxxxxxx, Esq. Pitney, Xxxxxx, Xxxx & Xxxxx
X.X. Xxx 0000
00
Xxxxxxxxxx, XX 00000-0000
If to Borrower: USA Detergents, Inc.
0000 Xxxxxx Xxxxxx
Xxxxx Xxxxxxxxx, Xxx Xxxxxx 00000
Attention: Xxxxxxx Xxxxxx, Chief Financial Officer
With a copy to: Xxxxxxx Xxxxxxxx, Esq.
Fulbright & Xxxxxxxx, LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
(The failure to transmit a copy of the notice to the
foregoing shall not constitute defective notice to the Borrower.)
or to such other address as the respective party or its successors or
assigns may subsequently designate by proper notice. All notices shall be
deemed effective (i) upon receipt of same (whether by personal delivery or
transmittal by facsimile/telecopier with confirmation thereof); or (ii) two (2)
Banking Days after deposit with an overnight courier; or (iii) three (3)
Banking Days if sent by registered or certified mail, postage prepaid,
whichever is earlier.
15.3 GENDER. Throughout this Agreement, the masculine shall include
the feminine and vice versa and the singular shall include the plural and vice
versa, unless the context of this Agreement indicates otherwise.
15.4 JOINT BORROWERS. If more than one party executes this Agreement
as Borrower, then for the purpose of this Agreement the term Borrower shall be
read to mean each such party and each party shall be jointly and severally
liable as Borrower for the Obligations as defined herein without regard to
which party receives the proceeds of any of the Loans. Each such party hereby
acknowledges that it expects to derive economic advantage from each of the
Loans.
15.5 CROSS DEFAULT; CROSS COLLATERAL. Borrower hereby agrees that (a)
all other agreements between Borrower and Lender or any of Lender's affiliates
are hereby amended so that a default (after applicable notice and cure periods,
if any,) under this Agreement is a default under all other agreements and a
default (after applicable notice and cure periods, if any,) under any one of
the other agreements is a default under this Agreement, and (b) the Collateral
under this Agreement secures the Obligations now or hereafter outstanding under
all other agreements between Borrower and Lender or any of Lender's affiliates
and the collateral pledged under any other agreement with Lender or any of its
affiliates secures the Obligations under this Agreement.
15.6 BINDING EFFECT; GOVERNING LAW. This Agreement shall be binding
upon and inure to the benefit of Borrower and Lender and their respective
successors and assigns, except that Borrower shall not have the right to assign
its rights hereunder or any interest herein without the prior written consent
of Lender. This Agreement, the Notes, the Relevant Documents and the
28
other documents delivered in connection with this Agreement shall be governed
by, and construed in accordance with, the laws of the State of New Jersey.
15.7 FURTHER ASSURANCES. The Borrower shall execute and deliver from
time to time hereafter, such additional instruments, certificates and
documents, and shall take all actions, as the Lender shall reasonably request
for the purpose of implementing or effectuating the provisions of this
Agreement, the Notes, or any other Relevant Documents, and upon the exercise by
the Lender of any power, right, privilege or remedy pursuant to this Agreement,
or any other Relevant Documents, which require any consent, approval,
registration, qualification or authorization of any governmental authority,
execute and deliver all applications, certifications, instruments and other
documents and papers that the Lender that may be so required to obtain.
15.8 EXECUTION IN COUNTERPARTS. This Agreement may be executed in any
number of counterparts, each of which when so executed shall be deemed to be an
original and all of which taken together shall constitute but one and the same
agreement.
15.9 SEVERABILITY OF PROVISIONS. Any provision of this Agreement, any
of the Notes or any of the Relevant Documents that is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions of this Agreement, such Notes or such
Relevant Documents or affecting the validity or enforceability of such
provision in any other jurisdiction.
15.10 TABLE OF CONTENTS; HEADINGS. The table of contents and headings
preceding the text of this Agreement are inserted solely for convenience of
reference and shall not constitute a part of this Agreement nor affect its
meaning, construction or effect.
15.11 EXHIBITS AND SCHEDULES. All of the Exhibits and Schedules to
this Agreement are hereby incorporated by reference herein and made a part
hereof.
15.12 FURTHER ACKNOWLEDGMENTS AND AGREEMENTS OF BORROWER AND LENDER.
Borrower and Lender acknowledge and agree that they (i) have
independently reviewed and approved each and every provision of this Agreement,
including the Exhibits and Schedules attached hereto and any and all other
documents and items as they or their counsel have deemed appropriate, and (ii)
have entered into this Agreement and have executed the closing documents
voluntarily, without duress or coercion, and have done all of the above with
the advice of their legal counsel or have knowingly and voluntarily elected to
proceed without advice of legal counsel.
15.13 GENERAL LIMITATION ON AMOUNT OF LIABILITY. Notwithstanding any
other provisions of this Agreement, the obligations of Borrower hereunder shall
be limited to a maximum aggregate amount equal to the largest amount that would
not render its obligations hereunder subject to avoidance as a fraudulent
transfer or conveyance under Section 548 of Title 11 of the United States
Bankruptcy Code or any applicable provisions of comparable state law
(collectively, the "Fraudulent Transfer Laws"), in each case after giving
effect to all other
29
liabilities of Borrower, contingent or otherwise, that are relevant under the
Fraudulent Transfer Laws (specifically excluding, however, any liabilities of
Borrower in respect of intercompany indebtedness to the Affiliates of the
Borrower to the extent that such indebtedness would be discharged in an amount
equal to the amount paid by Borrower hereunder) and after giving effect as
assets to the value (as determined under the applicable provisions of the
Fraudulent Transfer Laws) of any rights to subrogation, contribution,
reimbursement, indemnity or similar rights of Borrower pursuant to (i)
applicable law or (ii) any agreement providing for an equitable allocation
among Borrower and other Affiliates of the Borrower of obligations arising
under any security provided by such parties.
16. WAIVER OF JURY TRIAL, CONSENT TO JURISDICTION.
Section 16 of the Loan Agreement is hereby deleted in its entirety and
replaced with the following:
WAIVER OF JURY TRIAL, CONSENT TO JURISDICTION.
16.1 WAIVER OF JURY TRIAL. BORROWER AND LENDER ACKNOWLEDGE AND AGREE
THAT ANY SUIT, ACTION OR PROCEEDING, WHETHER CLAIM OR COUNTERCLAIM, BROUGHT OR
INSTITUTED BY BORROWER OR LENDER ON OR WITH RESPECT TO ANY LOANS, LETTERS OF
CREDIT, THE OBLIGATIONS OR THE RELEVANT DOCUMENTS OR THE DEALINGS OF THE
PARTIES WITH RESPECT HERETO OR THERETO SHALL BE TRIED ONLY BY COURT AND NOT BY
A JURY AND EACH PARTY HEREBY WAIVES THE RIGHT TO TRIAL BY JURY. BORROWER AND
LENDER AGREE THAT THIS SECTION IS A MATERIAL AND SPECIFIC ASPECT OF THIS
AGREEMENT AND LENDER WOULD NOT CONTINUE TO EXTEND CREDIT IF THE WAIVER SET
FORTH IN THIS SECTION WAS NOT A PART OF THIS AGREEMENT.
16.2 CONSENT TO JURISDICTION; SERVICE OF PROCESS.
16.2(1) Borrower and Lender consent to the jurisdiction of
any court of the State wherein the office of Lender set forth in the first page
hereof is located and of any federal court located in such State and waive any
right to object to such court as an inconvenient forum.
16.2(2) Borrower waives personal service of any summons,
complaint or other process in connection with any such action or proceeding and
agrees that service thereof may be made as Lender may elect, by certified mail
directed to Borrower at the location provided in Section 15.2 for notices to
Borrower or, in the alternative, in any other form or manner permitted by law.
30
17. ACKNOWLEDGMENT OF WAIVERS.
Section 17 of the Loan Agreement is hereby deleted in its entirety and
replaced with the following:
ACKNOWLEDGMENT OF WAIVERS. THIS AGREEMENT PROVIDES FOR THE WAIVER OF
RIGHTS AND REMEDIES. BORROWER ACKNOWLEDGES THAT IT IS REPRESENTED BY COUNSEL
(OR HAS HAD THE OPPORTUNITY TO CONSULT WITH COUNSEL) AND THAT SUCH COUNSEL HAS
REVIEWED AND EXPLAINED THE MEANING OF THESE WAIVERS TO BORROWER.
18. CONSENT AND WAIVER. With respect to the proposed lending arrangement about
to be entered into between Borrower and New Lender, Lender hereby consents to
Borrower granting a lien to the New Lender in and to the Personal Property of
Borrower other than the Real Estate Collateral.
19. WARRANT. It is further understood and agreed that the terms of the Original
Warrant shall be amended and restated contemporaneously herewith to provide
that if, and only if, prior to August 15, 1998, a portion of the PNC Debt (as
defined in the Original Warrant) has been indefeasibly repaid such that the
outstanding principal amount of the PNC Debt is less than $10,000,000.00, the
Warrant Number (as defined in the Original Warrant) shall, automatically and
without the need for further action by the Borrower or the Lender, be reduced
to the number of shares constituting 1.0% of the number of shares of Common
Stock (as defined in the Original Warrant) issued and outstanding as at the
date the Original Warrant was initially issued.
20. DEBT TO INDIVIDUAL GUARANTORS. As of the date hereof, the Borrower owes 101
Realty Associates, L.L.C. the aggregate principal sum of Four Million
($4,000,000.00) Dollars (the 101 Realty Debt"). Borrower hereby covenants and
agrees that it will not repay any portion of the 101 Realty Debt until the
Obligations of Borrower to Lender have been paid in full.
21. AMENDMENT AND RESTATEMENT. It is understood and agreed that this is an
amendment and restatement of the Loan Agreement and to that end replaces the
Loan Agreement in all respects except as herein specifically provided.
SIGNATURES ON NEXT PAGE
31
IN WITNESS WHEREOF, the undersigned have set their hands and seals or
caused these presents to be executed by their proper corporate officers and
sealed with their seal the day and year first above written.
USA DETERGENTS, INC., Borrower
By: /s/ Uri Evan
---------------------------
Name: Uri Evan
Title: Chairman & CEO
PNC BANK, NATIONAL ASSOCIATION,
Lender
By: /s/ Unintelligible
---------------------------
