FIRST AMENDMENT TO REVOLVING CREDIT AND SECURITY AGREEMENT
FIRST AMENDMENT TO REVOLVING CREDIT AND SECURITY AGREEMENT, dated
as of September 20, 1995, by and between THE BANK OF EAST ASIA, LIMITED, NEW
YORK BRANCH, a Hong Kong banking association having a federally chartered
branch at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ (the "Bank") and CONCORD
CAMERA HK, LIMITED, a Hong Kong corporation with an address c/o Concord Camera
Corp., ▇▇ ▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ (the "Borrower").
W I T N E S S E T H:
WHEREAS, the Borrower and the Bank entered into a Revolving Credit
And Security Agreement, dated as of December 20, 1994 (as from time to time
may be amended, supplemented or modified, the "Credit Agreement"), pursuant to
which the Bank agreed to make Advances to Borrower from time to time in an
aggregate principal amount not to exceed the lesser of US $1,500,000.00 and
the Borrowing Base at the time of any Advance;
WHEREAS, in connection with the Credit Agreement, the Borrower has
executed and delivered or has caused to be executed and delivered to the Bank
the Line of Credit Note, the Corporate Guaranty of Concord Camera Corp., and
the other Loan Documents (all as from time to time may be amended,
supplemented or modified); and
WHEREAS, the Borrower and the Bank desire to amend certain of the
terms and conditions of the transactions contemplated in the Loan Documents as
set forth herein;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and agreements set forth herein, the Borrower and the Bank agree as
follows:
1. Definitions. Capitalized terms used and not otherwise
defined herein shall have the respective meanings ascribed to such terms in
the Credit Agreement.
2. Representations and Warranties. In order to induce the Bank
to enter into this Agreement, the Borrower hereby represents and warrants to
the Bank as follows:
(a) the representations and warranties of the Borrower contained
in the Credit Agreement are true on and as of the date hereof to
the same extent as though made on and as of the date hereof;
(b) it has the general corporate power and authority to own its
assets and conduct its business as now conducted and to execute,
deliver and perform its obligations under this Agreement, the
first amended and restated note, in the form of Exhibit A attached
hereto (the "First Amended and Restated Note"), and all other
documents, instruments, agreements and certificates delivered to
the Bank by the Borrower pursuant hereto, on the date hereof or
hereafter in connection with this Agreement (collectively, the
"First Amendment Loan Documents");
(c) the consummation of the transactions described in this
Agreement, the First Amended and Restated Note and the other First
Amendment Loan Documents have been duly authorized by all
requisite corporate action;
(d) this Agreement, the First Amended and Restated Note and the
other First Amendment Loan Documents constitute its respective
legal, valid and binding obligations, enforceable against it in
accordance with their respective terms, except as the
enforceability thereof may be limited by bankruptcy, insolvency,
reorganization or other similar laws affecting the enforcement of
creditors' rights generally and general equitable principles,
regardless whether enforceability is considered in a proceeding in
equity or at law;
(e) the execution, delivery and performance by it of this
Agreement, the First Amended and Restated Note and the other First
Amendment Loan Documents do not, (i) violate any material
provision of any law, rule, regulations, judgment, injunction or
order applicable to it, or its certificate of incorporation or
by-laws, or (ii) result in a breach of, or constitute a default
under, any contractual obligation;
(f) no consent, approval or other action by, or any notice to or
filing with, any governmental authority (other than UCC filings,
if applicable) is or will be necessary for the valid execution,
delivery or performance by it of this Agreement, the First Amended
and Restated Note or any other First Amendment Loan Documents;
(g) it has good and marketable legal and beneficial title to the
Collateral (as amended herein), free and clear of any Liens,
except Permitted Liens. On and after the date hereof, this
Agreement creates, as security for the payment and performance
when and as due of the Obligations (as amended by the terms
herein), a valid and enforceable first priority and, upon (i)
filing of the appropriate financing statement, (ii) filing of a
charge in Hong Kong, and (iii) giving of written notice to 3M,
Polaroid Corporation, Auchan , Agfa-Gevaert AG, and The Boots
Company PLC (collectively, the "Account Debtors"), perfected
security interest in, and Lien against, the Collateral in favor of
the Bank, superior and prior to the rights of all persons and
entities and subject to no other Liens, except Permitted Liens;
(h) it is the sole owner of its Accounts (as amended by the terms
herein) and no person has or claims to have an interest of any
kind therein or thereto; the Account Debtors are indebted to it in
the amounts and on the terms indicated in their respective
invoices of Accounts; each Account is bona fide and arises out of
the sale or lease of goods and services; and none of the Accounts
is now, nor will at any time in the future become, contingent upon
the fulfillment of any contract or condition whatsoever, nor
subject to any Lien (except those of the Bank), deduction,
defense, setoff or counterclaim;
(i) no material adverse change has occurred in its business,
operations, properties or condition (financial or otherwise),
taken as a whole, since the date of its most recent financial
statements delivered to the Bank;
(j) no financial statements, accounts receivable sub-ledgers, or
other documents furnished to the Bank by or on behalf of it
contain any untrue statement of a material fact or omit to state a
material fact necessary to make the statements contained therein
not misleading in light of the circumstances under which it was
made;
(k) the proceeds of the Advances will be used for its working
capital purposes;
(l) no event of default has occurred and is continuing which
constitutes or will constitute an Event of Default under the
Credit Agreement or the other Loan Documents; and
(m) there exists no right of setoff or recoupment, counterclaim or
defense of any kind or nature whatsoever to payment of the
Obligations.
3. First Amended and Restated Note. The Advances shall be
evidenced by the First Amended and Restated Note of the Borrower. All
references in the Credit Agreement and the other Loan Documents to the "Note"
shall be deemed to be referenced to the "First Amended and Restated Note".
4. Amendments to Credit Agreement. To induce the Bank to enter
into this Agreement, the Borrower hereby agrees that the Credit Agreement
shall be amended as follows:
(a) All references in the Credit Agreement and the other Loan
Documents to "3M" shall be deemed to be references to the "Account Debtors".
(b) Section 1(a) of the Credit Agreement is hereby amended by
deleting the words "One Million Five Hundred Thousand Unites States Dollars
(US $1,500,000.00)" after the subsection "(i)" in the fourth line thereof and
inserting the words "Three Million United States Dollars (US $3,000,000.00)".
(c) Section 2(b) of the Credit Agreement is hereby amended as
follows:
(i) by inserting the phrase ", and 35 millimeter cameras
with film" after the word "subassemblies" in the ninth line thereof;
(ii) by inserting the phrase ", Polaroid Corporation,
Auchan, Agfa-Gevaert AG, or The Boots Company PLC" after the word "Company" in
the eleventh line thereof;
(iii) by replacing the word "its" after the word "of" in
the eleventh line thereof with the words "their respective"; and
(iv) by replacing the quote "3M" after the word
"collectively" in the eleventh line thereof with the quote "Account Debtors".
(d) Section 9(b)(iii)(A) of the Credit Agreement is hereby amended
by deleting the phrase "# 3003671" and by inserting the letter "s" after the
word "account" in the first line thereof.
5. Conditions to Effectiveness. This Agreement shall not
become effective unless or until each of the following conditions shall have
been satisfied:
(a) receipt by the Bank of a duly executed counterpart of this
Agreement;
(b) receipt by the Bank of the duly executed First Amended and
Restated Note;
(c) receipt by the Bank of the duly executed First Amended and
Restated Continuing Corporate Guaranty of Guarantor, in the form of Exhibit B
attached hereto;
(d) receipt by the Bank of certified copies of all corporate
action taken by the Borrower and Guarantor, as the case may be, to authorize
the execution, delivery and performance of this Agreement, the First Amended
and Restated Note, and the other First Amendment Loan Documents;
(e) receipt by the Bank of certificates, dated the date hereof, of
duly authorized officers or representatives of Borrower and Guarantor, as the
case may be, as to the incumbency, and setting forth the specimen signatures,
of the persons who have signed this Agreement, the First Amended and Restated
Note, and the other First Amendment Loan Documents;
(f) receipt by the Bank of duly executed UCC financing statements
as requested by the Bank;
(g) receipt by the Bank of an opinion of counsel for the Borrower
in the form as Exhibit C attached hereto;
(h) receipt by the Bank of an opinion of counsel for the Guarantor
in the form as Exhibit D attached hereto;
(i) receipt by the Bank of an opinion of Hong Kong counsel for the
Borrower in the form as Exhibit E attached hereto;
(j) copies of accounts receivable sub-ledger attributable to the
sale of the Product by Borrower to each of the Account Debtors for the most
recent past six (6) months;
(k) payment to the Bank of all fees and expenses of the Bank in
the amount of $5,000.00, and fees and disbursements of its legal counsel;
(l) at the closing of the transactions contemplated hereunder, the
Bank shall deliver and return to Borrower the Note and Guaranty.
6. Effect of Agreement.
(a) This Agreement shall be limited precisely as written.
(b) Except as specifically provided herein, this Agreement shall
not in any way affect or impair the terms and conditions of the Credit
Agreement and the other Loan Documents, and all terms and conditions of the
Credit Agreement and the other Loan Documents shall remain in full force and
effect, and are hereby ratified and confirmed in all respects by the Borrower,
unless otherwise specifically amended, waived or changed pursuant to the terms
and conditions of this Agreement. Except as specifically provided herein,
this Agreement is not a consent to any waiver or modification of any term or
condition of the Credit Agreement or of any instrument referred to therein and
does not require the Bank to extend or renew the Facility.
(c) In the event of any inconsistency between the terms of this
Agreement and the Credit Agreement, this Agreement shall govern. The Borrower
acknowledges that it has consulted with counsel and such other experts and
advisors as it has deemed necessary in connection with the negotiation,
execution and delivery of this Agreement.
7. General Conditions.
(a) The Borrower agrees that it shall reimburse the Bank upon
request for all out-of-pocket costs and expenses that the Bank may incur,
including, without limitation, fees and disbursements of counsel, in
connection with respect to the enforcement of the Bank's rights under this
Agreement, the First Amended and Restated Note or any other First Amendment
Loan Documents.
(b) This Agreement and the rights and obligations of the parties
hereunder shall be construed in accordance with and be governed by the laws of
the State of New York, without giving effect to its conflicts of law
principles.
(c) This Agreement shall create a continuing security interest in
the Collateral, which shall remain in full force and effect until indefeasible
payment in full of the Obligations and the expiration or termination of the
Bank's commitments hereunder. Upon the indefeasible payment in full of the
Obligations and the expiration or termination of the Bank's commitments
hereunder, the security interest granted hereby shall terminate and all rights
to the Collateral shall revert to the Borrower.
(d) All agreements, indemnifications, representations and
warranties made herein by the Borrower shall survive and not be waived by the
execution and delivery of this Agreement, the First Amended and Restated Note,
or any other First Amendment Loan Document, any investigations by the Bank, or
the making and repayment of the Advances.
(e) All Exhibits and Schedules, if any, attached hereto are hereby
incorporated by reference and are part of this Agreement as if expressly set
forth at length herein.
(f) If any provision of this Agreement is determined to be
unenforceable or invalid under applicable law, such unenforceability or
invalidity shall not affect the enforceability or validity of any other
provision of this Agreement, and the parties hereto expressly agree that such
unenforceable or invalid provision shall be deemed severed from this
Agreement.
(g) The descriptive headings of the several sections and
subsections of this Agreement are inserted for convenience only, and are in no
way intended or to be used or applied to describe, interpret, construe, define
or limit the scope, extent or operation of this Agreement or of any term or
provision hereof.
(h) This Agreement may be executed in any number of counterparts,
and by the different parties hereto on the same or separate counterparts, each
of which shall be deemed to be an original instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed and to be executed and delivered by their respective
officers thereunto authorized as of the date first above written.
THE BORROWER
CONCORD CAMERA HK, LIMITED
By:___________________________
Name:
Title:
THE BANK
THE BANK OF EAST ASIA, LIMITED
NEW YORK BRANCH
By:___________________________
Name:
Title:
By:___________________________
Name:
Title:
THE GUARANTOR
CONCORD CAMERA CORP.
By:___________________________
Name:
Title:
EXHIBIT A
[FIRST AMENDED AND RESTATED NOTE]
EXHIBIT B
[FIRST AMENDED AND RESTATED CONTINUING GUARANTY]
EXHIBIT C
[BORROWER'S COUNSEL OPINION]
EXHIBIT D
[GUARANTOR'S COUNSEL OPINION]
EXHIBIT E
[BORROWER'S HONG KONG COUNSEL OPINION]
