AMENDMENT AND ASSUMPTION AGREEMENT
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AMENDMENT AND ASSUMPTION AGREEMENT (this "Agreement") dated as of March __,
2000 by and between AGRO DYNAMICS, INC. ("ADI"), ECOSCIENCE PRODUCE SYSTEMS
CORPORATION ("EPSC"), AGRO-XXX, INC. ("Agro-Xxx") and CENTURY BUSINESS CREDIT
CORPORATION, a Subsidiary of The Foothill Group, Inc. ("Lender").
BACKGROUND
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ADI, EPSC and Lender are parties to a Loan and Security Agreement dated as
of June 29, 1999 (as same has been amended, supplemented, restated or otherwise
modified from time to time, the "Loan Agreement") pursuant to which Lender
provides ADI and EPSC with certain financial accommodations.
Pursuant to the terms of a Joint Venture Agreement dated as of January 12,
2000 ("Joint Venture Agreement") among ADI, Ecoscience Corporation and Grodania
A/S, a substantial portion of the assets of ADI will be transferred to Agro-Xxx,
a newly formed Delaware corporation, and Agro-Xxx shall assume all of ADI's
obligations to Lender under the Loan Agreement and the Ancillary Agreements
including, without limitation, the documents listed on Exhibit A attached hereto
(the Loan Agreement and the Ancillary Agreements, collectively, "Assigned
Documents").
In connection with the transactions contemplated by the Joint Venture
Agreement, all of ADI's rights and obligations under the Assigned Documents
shall automatically become the rights and obligations of Agro-Xxx and Agro-Xxx
shall have the benefit of all the rights of ADI and be bound by all the
obligations of ADI to Lender under the Assigned Documents, in each case on the
terms and conditions set forth in this Agreement.
NOW, THEREFORE, in consideration of the foregoing and for other valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, ADI,
EPSC and Agro-Xxx hereto agree as follows:
1. All capitalized terms used herein that are not defined shall have the
meanings given to them in the Loan Agreement.
2. Agro-Xxx hereby assumes in full, the payment, discharge, satisfaction
and performance of all Obligations of ADI and all other obligations,
indebtedness and liabilities of ADI to Lender under the Assigned Documents and
Agro-Xxx acknowledges that it is liable for the payment, discharge, satisfaction
and performance of all Obligations. Without limiting the generality of the
foregoing, in order to secure the prompt payment and performance to Lender of
the Obligations, Agro-Xxx hereby assigns, pledges and grants to Lender a
continuing security interest in and to all of the Collateral, whether now owned
or existing or hereafter acquired or arising and wheresoever located. Nothing in
this Amendment shall impair, limit or affect the liens and security interest
heretofore granted, pledged and/or assigned to Lender by ADI as
security for the Obligations. Agro-Xxx hereby adopts all of the provisions,
terms and conditions contained in the Assigned Documents as if the Assigned
Documents had been entered into by and between Agro-Xxx and Lender.
3. ADI and Agro-Xxx hereby acknowledge that each will from time to time
after the execution hereof, upon request of Lender, execute and deliver to
Lender such further instruments, agreements and documents, and take such further
action as Lender may request in connection with the transactions herein
contemplated.
4. Subject to satisfaction of the conditions precedent set forth in
Section 6 below, Lender hereby consents to the formation of Agro-Xxx and
the execution of the Joint Venture Agreement by the parties thereto and the
transactions contemplated therein and waives any Event of Default arising out of
the formation of Agro-Xxx or the execution of or consummation of the
transactions contemplated by the Joint Venture Agreement.
5. The Loan Agreement is hereby amended as follows:
(a) The defined terms "Borrower" and "Borrowers" are amended to read
Agro-Xxx.
(b) Paragraph 1(a) is amended as follows:
(i) The following defined terms are inserted in the appropriate
alphabetical order:
"Agro-Xxx" means Agro-Xxx, Inc., a corporation organized
under the laws of the State of Delaware.
"EPSC" means EcoScience Produce Systems Corporation, a
corporation organized under the laws of the State of
Delaware.
"Joint Venture Agreement" means the Joint Venture Agreement
among ADI, Ecoscience Corporation and Grodania A/S.
(ii) The following defined terms are amended in their entirety to
provide as follows:
"Borrowing Agent" means Agro-Xxx.
"Eligible Inventory" means Inventory of each Borrower and
ADC Inventory which the Lender, in its sole and absolute discretion, exercised
in a commercially reasonable manner, determines: (a) is subject to the security
interest of Lender and is subject to no other liens or encumbrances whatsoever
(other than Permitted Liens); (b) is in good condition and meets all standards
imposed by any governmental agency, or department or division thereof having
regulatory authority over such Inventory, its use or sale including but not
limited to the Federal Fair Labor Standards Act of 1938 as amended, and all
rules, regulations and orders
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thereunder; (c) is currently either usable or salable in the normal course
of each Borrower's or ADC's business; (d) does not represent Inventory received
from suppliers of ADC within the immediately preceding thirty (30) day period
unless such Inventory has been paid for; and (e) not to be ineligible for any
other reason.
"Eligible Receivables" means and includes each Receivable of
each Borrower and each ADC Receivable which conforms to the following criteria:
(a) shipment of the merchandise or the rendition of services has been completed;
(b) no return, rejection or repossession of the merchandise has occurred; (c)
merchandise or services shall not have been rejected or disputed by the Customer
and there shall not have been asserted any offset, defense or counterclaim; (d)
continues to be in full conformity with the representations and warranties made
by Borrowers and ADC to the Lender with respect thereto; (e) Lender is, and
continues to be, satisfied with the credit standing of the Customer in relation
to the amount of credit extended; (f) there are no facts existing or threatened
which are likely to result in any adverse change in a Customer's financial
condition; (g) is documented by an invoice in a form approved by Lender and
shall not be unpaid more than ninety (90) days from invoice date; (h) less than
thirty-three percent (33%) of the unpaid amount of invoices due from such
Customer remain unpaid more than ninety (90) days from invoice date; (i) is not
evidenced by chattel paper or an instrument of any kind with respect to or in
payment of the Receivable or the ADC Receivable unless such instrument is duly
endorsed to and in possession of the Lender or represents a check in payment of
a Receivable or an ADC Receivable; (j) if the Customer is located outside of the
United States or Canada, the goods which gave rise to such Receivable or such
ADC Receivable were shipped after receipt by such Borrower or ADC, as the case
may be, from or on behalf of the Customer of an irrevocable letter of credit,
assigned and delivered to the Lender and confirmed by a financial institution
acceptable to the Lender and is in form and substance acceptable to the Lender,
payable in the full amount of the Receivable or the ADC Receivable in United
States dollars at a place of payment located within the United States; (k) such
Receivable or ADC Receivable is not subject to any lien, other than Permitted
Liens; (l) does not arise out of transactions with any employee, officer, agent,
director, stockholder or Affiliate of any Borrower or ADC; (m) is payable to
Borrower or ADC; (n) does not arise out of a xxxx and hold sale prior to
shipment and, if the Receivable or the ADC Receivable arises out of a sale to
any Person to which Borrower or ADC is indebted, the amount of such
indebtedness, and any anticipated indebtedness, is deducted in determining the
face amount of such Receivable or such ADC Receivable; (o) is net of any
returns, discounts, claims, credits and allowances; (p) if the Receivable arises
out of contracts between Borrower and the United States, any state, or any
department, agency or instrumentality of any of them, such Borrower has so
notified Lender, in writing, prior to the creation of such Receivable, and, if
Lender so requests, there has been compliance with any governmental notice or
approval requirements, including without limitation, compliance with the Federal
Assignment of Claims Act; (q) is a good and valid account representing the
undisputed portion of a bona fide indebtedness incurred by the Customer therein
named, for a fixed sum as set forth in the invoice relating thereto with respect
to an unconditional sale and delivery upon the stated terms of goods sold by
Borrower, or work, labor and/or services rendered by Borrower or ADC; (r) the
total unpaid Receivables from such Customer does not exceed twenty percent (20%)
of all Eligible Receivables; (s) does not arise out of progress xxxxxxxx prior
to completion of the order; and (t) is otherwise satisfactory to the Lender as
determined in good faith by the Lender in the reasonable exercise of its
discretion.
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"Equipment" means and includes all of each Borrower's,
EPSC's and ADI's now owned or hereafter acquired equipment, machinery and goods
(excluding Inventory), whether or not constituting fixtures, including, without
limitation: plant and office equipment, tools, dies, parts, data processing
equipment, furniture and trade fixtures, trucks, trailers, loaders and other
vehicles and all replacements and substitutions therefore and all accessions
thereto.
"General Intangibles" means and includes all of each
Borrower's, EPSC's and ADI's now owned or hereafter acquired general intangibles
including, without limitation, trademarks, tradenames, tradestyles, trade
secrets, equipment formulation, manufacturing procedures, quality control
procedures, product specifications, patents, patent applications, copyrights,
registrations, contract rights, choses in action, causes of action, corporate or
other business records, inventions, designs, goodwill, claims under guarantees,
licenses, franchises, tax refunds, tax refund claims, computer programs,
computer data bases, computer program flow diagrams, source codes, object codes
and all other intangible property of every kind and nature.
"Guarantor" means individually ADC, ADI, EPSC and any other
Person who may hereafter guarantee payment or performance of the whole or any
part of the Obligations and "Guarantors" means collectively all such Persons.
"Individual Formula Amount" means at the date of
determination thereof, an amount equal to:
(a) Receivables Availability of Agro-Xxx and ADC, plus
(b) Inventory Availability of Agro-Xxx and ADC, minus
(c) such reserves as Lender may reasonably deem proper and necessary from
time to time.
"Inventory" means and includes all of each Borrower's,
EPSC's and ADI's now owned or hereafter acquired goods, merchandise and other
personal property, wherever located, to be furnished under any contract of
service or held for sale or lease, all raw materials, work in process, finished
goods and materials and supplies of any kind, nature or description which are or
might be used or consumed in such Borrower's, EPSC's and ADI's business or used
in selling or furnishing such goods, merchandise and other personal property,
and all documents of title or other documents representing them.
"Inventory Availability" means the amount of Revolving
Credit Advances against Eligible Inventory, Lender may from time to time during
the Term make available to each Borrower up to the lesser of (a) up to fifty
percent (50%) of the value of such Borrower's Eligible Inventory (calculated on
the basis of the lower of cost or market, on a first-in first-out basis) or (b)
fifty percent (50%) of the amount of such Borrower's Receivables Availability.
The Eligible Inventory of ADC shall be included for the purpose of determining
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the Eligible Inventory of Agro-Xxx and the Eligible Receivables of ADC
shall be included for the purposes of determining the Eligible Receivables of
Agro-Xxx.
"Receivables" means and includes all of each Borrower's,
EPSC's and ADI's now owned or hereafter acquired accounts and contract rights,
instruments, insurance proceeds, documents, chattel paper, letters of credit and
each Borrower's, EPSC's and ADI's rights to receive payment thereunder, any and
all rights to the payment or receipt of money or other forms of consideration of
any kind at any time now or hereafter owing or to be owing to any Borrower, EPSC
or ADI, all proceeds thereof and all files in which any Borrower, EPSC or ADI
has any interest whatsoever containing information identifying or pertaining to
any of such Borrower's, EPSC's or ADI's Receivables, together with all of each
Borrower's, EPSC's or ADI's rights to any merchandise which is represented
thereby, and all of each Borrower's, EPSC's or ADI's right, title, security and
guaranties with respect to each Receivable, including, without limitation, all
rights of stoppage in transit, replevin and reclamation and all rights as an
unpaid vendor.
"Receivables Availability" means the amount of Revolving
Credit Advances against Eligible Receivables Lender may from time to time during
the term of this Agreement make available to each Borrower up to eighty-five
percent (85%) of the net face amount of Eligible Receivables of such Borrower.
The Eligible Receivables of ADC shall be included for the purposes of
determining the Eligible Receivables of Agro-Xxx.
(c) Paragraph 6 is amended in its entirety to provide as follows:
"6. Security Interest.
(a) To secure the prompt payment to Lender of the Obligations, each
Borrower, EPSC and ADI hereby assigns, pledges and grants to Lender a continuing
security interest in and to the Collateral, whether now owned or existing or
hereafter acquired or arising and wheresoever located, whether or not the same
is subject to Article 9 of the UCC; provided, however, the foregoing grant of a
security interest and lien shall not include any rights or interests of any
Borrower, EPSC or ADI under any licenses, leases or other contracts if and to
the extent that (i) the terms of the agreement or agreements creating or
evidencing such rights or interests prohibit such grant and (ii) the term
prohibiting such grant is effective as a matter of law and has not been waived
or the consent of the necessary party to the grant to Lender has not been
obtained; provided, further, (x) if any such prohibition is subsequently lifted,
terminated or is otherwise no longer effective as a matter of law or is waived
or the consent of the necessary party is obtained, a security interest therein
in favor of Lender shall automatically arise hereunder without any further
action on the part of any Borrower, EPSC, ADI or Lender and (y) nothing
contained herein shall be deemed to limit, impair or otherwise affect Lender's
security interest in any rights or interests of any Borrower, EPSC or ADI in or
to monies due or to become due under any such agreement. All of Borrowers',
EPSC's and ADI's ledger sheets, files, records, books of account, business
papers and documents relating to the Collateral shall, until delivered to or
removed by Lender, be kept by Borrowers, EPSC and ADI in trust for Lender until
all Obligations have been paid in full. Each confirmatory assignment schedule or
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other form of assignment hereafter executed by Borrowers, EPSC and ADI shall be
deemed to include the foregoing grant, whether or not the same appears therein.
(b) Lender may file one or more financing statements disclosing
Lender's security interest in the Collateral without a Borrower's, EPSC's
or ADI's signature appearing thereon or Lender may sign on a Borrower's, EPSC's
or ADI's behalf as provided in paragraph 13 hereof. The parties agree that a
carbon, photographic or other reproduction of this Agreement shall be sufficient
as a financing statement. If any Receivable or any ADC Receivable becomes
evidenced by a promissory note or any other instrument for the payment of money,
the applicable Borrower, EPSC or ADI will or will cause ADC to immediately
deliver such instrument to Lender appropriately endorsed."
(d) Paragraph 7 is amended in its entirety to provide as follows:
"7. Representations Concerning the Collateral. Each Borrower, ESPC
and ADI represents and warrants (each of which such representations and
warranties shall be deemed repeated upon the making of each request for a
Revolving Credit Advance and made as of the time of each and every Revolving
Credit Advance hereunder):
(a) each Borrower, EPSC and ADI owns its respective Collateral free
and clear of all claims, liens, security interests and encumbrances
(including without limitation any claims of infringement) except (A) those in
Lender's favor and (B) Permitted Liens;
(b) none of the Collateral is subject to any agreement prohibiting
the granting of a security interest or requiring notice of or consent to
the granting of a security interest; and
(c) all Receivables and ADC Receivables (i) represent complete bona
fide transactions which require no further act under any circumstances on
the applicable Borrower's, EPSC's or ADC's part to make such Receivables or ADC
Receivables payable by the Customers, (ii) to the best of each Borrower's,
EPSC's and ADI's knowledge, are not subject to any present, future or contingent
offsets or counterclaims, and (iii) do not represent xxxx and hold sales,
consignment sales, guaranteed sales, sale or return or other similar
understandings or obligations of any Affiliate or Subsidiary of any Borrower,
EPSC or ADI."
(e) Paragraph 8 is amended in its entirety to provide as follows:
"8. Covenants Concerning the Collateral. During the Term, each
Borrower, EPSC and ADI covenants that it shall:
(a) not dispose of any of the Collateral whether by sale, lease or
otherwise except for (i) the sale of Inventory in the ordinary course of
business, and (ii) the disposition or transfer in the ordinary course of
business during any fiscal year of obsolete and worn-out Equipment having an
aggregate fair market value for all Borrower's, EPSC and ADI of not more than
$100,000 and only to the extent that (x) the proceeds (if any) of any such
disposition are used to acquire replacement Equipment which is subject to
Lender's first priority
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security interest or (y) the proceeds (if any) of which are remitted to
Lender in reduction of the Obligations;
(b) not encumber, mortgage, pledge, assign or grant any security
interest in any Collateral or any other assets of Borrowers, EPSC or ADI to
anyone other than Lender and except for Permitted Liens;
(c) place notations upon each Borrower's, EPSC's or ADI's books of
account and any financial statement prepared by each such entity to
disclose Lender's security interest in the Collateral;
(d) keep and maintain the Equipment in good operating condition,
except for ordinary wear and tear, and except for obsolete and worn-out
equipment, shall make all necessary repairs and replacements thereof so that the
value and operating efficiency shall at all times be maintained and preserved.
No Borrower shall and neither EPSC nor ADI shall permit any such items to become
a fixture to real estate or accessions to other personal property;
(e) not extend the payment terms of any Receivable beyond thirty (30)
days from invoice date without prompt notice thereof to Lender;
(f) perform all other steps requested by Lender to create and
maintain in Lender's favor a valid perfected first security interest in all
Collateral (except for Permitted Liens);
(g) defend the Collateral against the claims and demands of al
parties; and
(h) cause at least annually, an appraisal to be performed by an
appraiser satisfactory to Lender, of the Inventory of Borrowers and the ADC
Inventory and Lender shall have the right based upon such appraisal to decrease
the amount to the amount of Inventory availability to an amount not greater than
eighty (80%) of the auction value of the Inventory of Borrowers and ADC
Inventory which is acceptable to Lender and on which Lender has a first
perfected security interest as set forth such appraisal."
(f) Paragraph 10 is amended in its entirety to provide as follows:
"10. Inspections. At all times during normal business hours, Lender
shall have the right to (a) visit and inspect Borrowers', EPSC's and ADI's
properties and the Collateral, (b) upon reasonable notice to Borrowing Agent,
inspect, audit and make extracts from Borrowers', EPSC's and ADI's relevant
books and records, including, but not limited to, management letters prepared by
independent accountants, provided, that no notice shall be required if an
Incipient Event of Default or Event of Default shall have occurred or if Lender
at any time deems itself insecure or shall fear the diminution in value of the
Collateral, and (c) discuss with Borrowers', EPSC's and ADI's principal
officers, and independent accountants, Borrowers', EPSC's and ADI's business,
assets, liabilities, financial condition, results of operations and business
prospects. Borrowers, EPSC and ADI will deliver to Lender any
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instrument necessary for Lender to obtain records from any service bureau
maintaining records for Borrowers, EPSC and ADI."
(g) Paragraph 11 is amended in its entirety to provide as follows:
"11. Financial Information. Borrowers shall provide Lender (a) as
soon as available, but in any event within ninety (90) days after the end
of each of Borrowers', EPSC's and ADI's fiscal years, a balance sheet of each
Borrower, EPSC, ADI and ADC as at the end of such fiscal year and the related
statements of income, retained earnings and changes in cash flow for such fiscal
year, setting forth in comparative form the figures as at the end of and for the
previous fiscal year, which shall have been reported on by independent certified
public accountants who shall be satisfactory to Lender and shall be accompanied
by an unqualified audit report issued by such independent certified public
accountants; (b) as soon as available, drafts of the balance sheet of each
Borrower, EPSC, ADI and ADC as at the end of each of Borrowers', EPSC's, ADI's
and ADC's fiscal years and the related statements of income, retained earnings
and changes in cash flow for such fiscal year, which have been internally
prepared by Borrowers, EPSC, ADI or ADC, as the case may be; (c) as soon as
available, but in any event within thirty (30) days after the close of each
month, the balance sheet as at the end of such month and the related statements
of income, retained earnings and changes in cash flow for such month, which have
been internally prepared by Borrowers, EPSC, ADI or ADC, as the case may be. All
financial statements required under (a), (b) and (c) above shall be prepared in
accordance with GAAP, subject to year-end adjustments in the case of monthly and
quarterly statements. Together with the financial statements furnished pursuant
to (a) above, Borrowers, EPSC and ADI shall and shall cause ADC to, deliver a
certificate of Borrowers', EPSC's, ADI's or ADC's certified public accountants
addressed to Lender stating that (i) they have caused this Agreement, the
Ancillary Agreements and the Guaranty Security Agreements to be reviewed and
(ii) in making the examination necessary for the issuance of such financial
statements, nothing has come to their attention to lead them to believe that any
Event of Default or Incipient Event of Default exists and, in particular, they
have no knowledge of any Event of Default or Incipient Event of Default or, if
such is not the case, specifying such Event of Default or Incipient Event of
Default and its nature, when it occurred and whether it is continuing. At the
times the financial statements are furnished pursuant to (a), (b) and (c) above,
a certificate of each Borrower's, EPSC's, ADI's and ADC's President or Chief
Financial Officer shall be delivered to Lender stating that, based on an
examination sufficient to enable him to make an informed statement, no Event of
Default or Incipient Event of Default exists, or, if such is not the case,
specifying such Event of Default or Incipient Event of Default and its nature,
when it occurred, whether it is continuing and the steps being taken by
Borrowers with respect to such event. In addition, Borrowers, EPSC and ADI shall
provide Lender, as soon as available, copies of all proxy statements, financial
statements and reports which any Borrower, EPSC, ADI, ADC or EcoScience sends to
its shareholders and holders of its Indebtedness and copies of any and all
periodic and special reports, as well as all registration statements which any
Borrower, EPSC, ADI, ADC or EcoScience files with the Securities and Exchange
Commission."
(h) The first paragraph of Paragraph 12 is amended in its entirety to
provide as follows:
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"12. Additional Representations, Warranties and Covenants. Each
Borrower, EPSC and ADI represents, warrants (each of which such
representations and warranties shall be deemed repeated upon the making of a
request for a Revolving Credit Advance and made as of the time of each Revolving
Credit Advance made hereunder), and covenants that:"
(i) Paragraphs 12(a), (b) and (c) are amended in their entirety to provide
as follows:
"(a) (i) each Borrower, ESPC and ADI is a corporation duly organized
and validly existing under the laws of the states listed on Exhibit 12(a),
(ii) each Borrower, EPSC and ADI is duly qualified and in good standing in every
other state or jurisdiction in which the nature of such Borrower's, EPSC's or
ADI's business requires such qualification and (iii) ADC is a wholly owned
Subsidiary of Agro-Xxx;
(b) the execution, delivery and performance of this Agreement and
the Ancillary Agreements (i) have been duly authorized, (ii) are not in
contravention of such Borrower's, EPSC's or ADI's certificate of incorporation,
by-laws or of any indenture, agreement or undertaking to which such Borrower,
EPSC or ADI is a party or by which such Borrower or ADI is bound except where
the failure to qualify would not have a material adverse effect on the business,
assets, operations, prospects or financial or other condition of Borrower, EPSC
or ADI or the ability of such party to perform the Obligations and (iii) are
within such Borrower's, EPSC's or ADI's corporate powers;
(c) this Agreement and the Ancillary Agreements executed and
delivered by each Borrower, EPSC and ADI are such Borrower's, EPSC's or
ADI's legal, valid and binding obligations, enforceable in accordance with their
terms;"
(j) The following paragraph is inserted at the end of Paragraph 12:
"(r) Lender has received complete copies of the Joint Venture
Agreement (including all exhibits, schedules and disclosure letters
referred to therein or delivered pursuant thereto, if any) and all amendments
thereto waivers relating thereto and other side letters or agreements affecting
the terms thereof. None of such documents and agreements has been amended or
supplemented, nor have any of the provisions thereof been waived, except
pursuant to a written agreement or instrument which has heretofore been
delivered to Lender. Borrower, EPSC and ADI shall enforce all of its rights
under the Joint Venture Agreement and the executed in connection therewith
including, but not limited to, all indemnification rights and pursue all
remedies available to it with diligence and in good faith in connection with the
enforcement of any such rights."
(k) Paragraph 13 is amended in its entirety to provide as follows:
"13. Power of Attorney. Each Borrower, EPSC and ADI hereby appoints
Lender or any other Person whom Lender may designate as such Borrower's,
EPSC's or ADI's attorney, with power to: (i) endorse such Borrower's, EPSC's or
ADI's name on any
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checks, notes, acceptances, money orders, drafts or other forms of payment
or security that may come into Lender's possession; (ii) sign such Borrower's,
EPSC's or ADI's name on any invoice or xxxx of lading relating to any
Receivables, drafts against customers, schedules and assignments of Receivables,
notices of assignment, financing statements and other public records,
verifications of account and notices to or from customers; (iii) verify the
validity, amount or any other matter relating to any Receivable by mail,
telephone, telegraph or otherwise with account debtors; (iv) execute customs
declarations and such other documents as may be required to clear Inventory
through Customs; (v) do all things necessary to carry out this Agreement, any
Ancillary Agreement and all related documents; and (vi) on or after the
occurrence and continuation of an Event of Default, notify the post office
authorities to change the address for delivery of such Borrower's, EPSC's or
ADI's mail to an address designated by Lender, and to receive, open and dispose
of all mail addressed to such Borrower. Each Borrower, EPSC and ADI hereby
ratifies and approves all acts of the attorney. Neither Lender nor the attorney
will be liable for any acts or omissions or for any error of judgment or mistake
of fact or law. This power, being coupled with an interest, is irrevocable so
long as any Receivable which is assigned to Lender or in which Lender has a
security interest remains unpaid and until the Obligations have been fully
satisfied."
(l) Paragraph 19 is amended in its entirety to provide as follows:
"19. Remedies. Upon the occurrence of an Event of Default pursuant
to paragraph 18(k) herein, all Obligations shall be immediately due and
payable and this Agreement shall be deemed terminated; upon the occurrence and
continuation of any other of the Events of Default, Lender shall have the right
to demand repayment in full of all Obligations, whether or not otherwise due.
Until all Obligations have been fully satisfied, Lender shall retain its
security interest in all Collateral. Lender shall have, in addition to all other
rights provided herein, the rights and remedies of a secured party under the
UCC, and under other applicable law, all other legal and equitable rights to
which Lender may be entitled, including without limitation, the right to take
immediate possession of the Collateral, to require Borrowers, EPSC and ADI to
assemble the Collateral, at Borrowers', EPSC's or ADI's expense, and to make it
available to Lender at a place designated by Lender which is reasonably
convenient to both parties and to enter any of the premises of any Borrower,
EPSC or ADI or wherever the Collateral shall be located, with or without force
or process of law, and to keep and store the same on said premises until sold
(and if said premises be the property of a Borrower, EPSC or ADI, such Borrower,
EPSC and ADI agrees not to charge Lender for storage thereof), and the right to
apply for the appointment of a receiver for any Borrower's, EPSC's or ADI's
property. Further, Lender may, at any time or times after default by any
Borrower, EPSC or ADI sell and deliver all Collateral held by or for Lender at
public or private sale for cash, upon credit or otherwise, at such prices and
upon such terms as Lender, in Lender's sole discretion, deems advisable or
Lender may otherwise recover upon the Collateral in any commercially reasonable
manner as Lender, in its sole discretion, deems advisable. The requirement of
reasonable notice shall be met if such notice is mailed postage prepaid to
Borrowing Agent's address as shown in Lender's records, at least ten (10) days
before the time of the event of which notice is being given. Lender may be the
purchaser at any sale, if it is public. In connection with the exercise of the
foregoing remedies, Lender is granted permission to use all of Borrowers'
trademarks, tradenames, tradestyles, patents, patent applications, licenses,
franchises and other proprietary rights which are used in connection with
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(a) Inventory for the purpose of disposing of such Inventory and (b)
Equipment for the purpose of completing the manufacture of unfinished goods. The
proceeds of sale shall be applied first to all costs and expenses of sale,
including attorneys' fees, and second to the payment (in whatever order Lender
elects) of all Obligations. Lender will return any excess to Borrowers and
Borrowers shall remain liable to Lender for any deficiency. In addition to all
other sums due to Lender, Borrowers shall pay Lender, for costs and expenses
incurred by Lender for internal collection efforts to obtain or enforce payment
of Receivables and the ADC Receivables, an amount equal to fifteen percent (15%)
of the net face amount of any Receivables and ADC Receivables collected."
(m) Paragraph 25 is amended to include the following at the end thereof:
"If to ADI: To Borrowing Agent as set forth above."
If to EPSC: To Borrowing Agent as set forth above."
(n) Exhibit 12(a) is replaced with the corresponding exhibit to this
Agreement.
6. This Agreement shall become effective upon satisfaction of the
following conditions precedent, each in a manner satisfactory to Century
and pursuant to agreements in form and substance satisfactory to Century :
(a) Lender shall have received this Agreement duly executed by ADI,
EPSC and Agro-Xxx;
(b) Lender shall have received a fee in the amount of $10,000 which
shall be charged to Borrower's account on the effective date of this
Agreement.
(c) Lender shall have received final executed copies of the Joint
Venture Agreement and all related agreements, documents and instruments as
in effect o the effective date of this Agreement and the transactions
contemplated by such documentation shall be consummated concurrently with the
execution of this Agreement.
(d) Lender shall have received a copy of the resolutions in form
and substance reasonably satisfactory to Lender, of the board of directors
of Agro-Xxx authorizing (x) the execution, delivery and performance of the
Agreement, and (y) the granting by Agro-Xxx of the liens upon the Collateral
certified by the Secretary or an Assistant Secretary of Agro-Xxx as of the date
of this Agreement; and, such certificate shall state that the resolutions
thereby certified have not been amended, modified, revoked or rescinded as of
the date of such certificate;
(e) Lender shall have received a copy of the certificate of
incorporation of Agro-Xxx, and all amendments thereto, certified by the
Secretary of State or other appropriate official of its jurisdiction of
incorporation together with copies of the by-laws
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of Agro-Xxx certified as accurate and complete by the Secretary or an
Assistant Secretary of Agro-Xxx;
(f) Lender shall have received the executed legal opinion of
Xxxxxxxx, Xxxxxxxx and Xxxxxx in form and substance satisfactory to Lender
regarding the due authorization, enforceability and validity of this Agreement
and the transactions contemplated herein;
(g) Lender shall have received in form and substance satisfactory to
Lender, certified copies of Agro-Dan's casualty insurance policies,
together with loss payable endorsements on Lender's standard form of loss payee
endorsement naming Lender as loss payee, and certified copies of Agro-Dan's
liability insurance policies, together with endorsements naming Lender as a
co-insured;
(h) Lender shall have received a duly executed agreement
establishing accounts for Agro-Xxx with financial institutions reasonably
acceptable to Lender for the collection or servicing of the Receivables and
proceeds of the Collateral of Agro-Xxx;
(i) Lender shall have received a Guaranty Agreement from ADC, ADI
and EPSC covering the Obligations of Agro-Xxx;
(j) Lender shall have received from ADC all such documents necessary
to maintain a perfected security interest in the ADC Collateral granted to
Lender pursuant to the Guarantor Security Agreement;
(k) Lender shall have received from Agro-Xxx stock certificates of
ADC and stock powers with respect to ADC duly endorsed in blank; and
(l) Lender shall have received such other certificates, instruments,
documents and agreements as may reasonably be required by Lender in
connection with this Agreement or its counsel.
7. Except as expressly provided herein, all of the representations,
warranties, terms, covenants and conditions contained in the Assigned
Documents shall remain unamended and shall continue to be and shall remain in
full force and effect in accordance with their respective terms. The amendment
and waivers set forth herein shall be limited precisely as provided for herein
and shall not be deemed a waiver or modification of, or an amendment to, any
other term or provision of any Assigned Document.
8. This Agreement shall be governed and construed in accordance with the
laws of the State of New York.
9. This Agreement may be executed in one or more counterparts each of
which taken together shall constitute one and the same instrument. Any
signature delivered by a party via facsimile shall be deemed an original
signature hereto.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the day
and year specified at the beginning hereof.
AGRO DYNAMICS, INC.
By:_______________________________
Name:
Title:
AGRO-XXX, INC.
By:_______________________________
Name:
Title:
ECOSCIENCE PRODUCE SYSTEMS CORPORATION
By:_______________________________
Name:
Title:
CENTURY BUSINESS CREDIT
CORPORATION, a Subsidiary of The
Foothill Group, Inc.
By:_______________________________
Name:
Title:
CONSENTED AND AGREED TO:
ECOSCIENCE CORPORATION
By:________________________________
Name:
Title:
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Exhibit A
---------
1. Supplement Letter of Credit Security Agreement dated as of June 29, 1999
among ADI, EPSC and Lender.
2. Trademark Collateral Security Agreement and Trademark Assignment of
Security each dated as of June 29, 1999 by and between ADI and Lender and
Power of Attorney dated as of June 29, 1999 made by ADI in favor of Lender.
3. Patent Collateral Security Agreement and Patent Assignment of Security each
dated as of June 29, 1999 by and between ADI and Lender and Power of
Attorney dated as of June 29, 1999 made by ADI in favor of Lender.
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