Exhibit 10.23
SEVENTH AMENDMENT AND FORBEARANCE AGREEMENT
SEVENTH AMENDMENT AND FORBEARANCE AGREEMENT referred to below
("Agreement"), dated as of September 28, 2001, by and between POLYCHEM
CORPORATION, a Pennsylvania corporation ("Borrower"), and GENERAL ELECTRIC
CAPITAL CORPORATION, a Delaware corporation, successor by merger to General
Electric Capital Corporation, a New York corporation ("Lender").
W I T N E S S E T H:
WHEREAS, Lender and Borrower have entered into certain financing
arrangements pursuant to the Loan and Security Agreement dated September 30,
1998 by and between Lender and Borrower (and as amended hereby, and as the same
may have heretofore been or may hereafter be further amended, modified,
supplemented, extended, renewed, restated or replaced, the "Loan Agreement", and
together with all agreements, documents and instruments at any time executed
and/or delivered in connection therewith or related thereto, collectively, the
"Financing Agreements"); and
WHEREAS, as of the date hereof, Borrower is in default under the
Financing Agreements as more particularly described below; and
WHEREAS, the circumstances described herein constitute Events of
Default under the Loan Agreement and the other Financing Agreements; and
WHEREAS, Borrower has requested that Lender forbear from exercising its
rights as a result of such Events of Default, certain of which are continuing,
and that Lender provide further Revolving Credit Loans and other financial
accommodations to Borrower notwithstanding such Events of Default; and
WHEREAS, Borrower has requested that Lender agree to extend the term of
the Loan Agreement and the other Financing Agreements; and
WHEREAS, Lender is willing to agree to temporarily forbear from
exercising certain of its rights and remedies, extend the term of the Loan
Agreement and the other Financing Agreements and provide certain further
Revolving Credit Loans and other financial accommodations to Borrower for the
period and on the terms and conditions specified herein;
NOW, THEREFORE, in consideration of the foregoing, and the respective
agreements, warranties and covenants contained herein, the parties hereto agree,
covenant and warrant as follows:
SECTION 1. DEFINITIONS.
1.1 Interpretation. All capitalized terms used herein (including the
recitals hereto) shall have the respective meanings assigned thereto in the Loan
Agreement unless otherwise defined herein.
1.2 Additional Definition. As used herein, the following term shall
have the meaning given to it below and the Loan Agreement is hereby amended to
include, in addition and not in limitation, the following definition:
"Existing Defaults" shall mean the following Events of
Default: (i) Borrower's failure to meet the required Fixed Charge Coverage Ratio
for each of the Fiscal Quarters ended March 31, 2001 and June 30, 2001, and (ii)
Borrower's failure to meet the required Minimum Tangible Net Worth Covenant for
each of the Fiscal Quarters ended March 31, 2001 and June 30, 2001.
SECTION 2. ACKNOWLEDGMENT
2.1 Acknowledgment of Obligations. Borrower hereby acknowledges,
confirms and agrees that as of the close of business on September 28, 2001,
Borrower is indebted to Lender in respect of the Loans in the principal amount
of $2,634,073.54. All such Loans, together with interest accrued and accruing
thereon, and fees, costs, expenses and other charges now or hereafter payable by
Borrower to Lender, are unconditionally owing by Borrower to Lender, without
offset, defense or counterclaim of any kind, nature or description whatsoever.
2.2 Acknowledgment of Security Interests. Borrower hereby acknowledges,
confirms and agrees that Lender has and shall continue to have valid,
enforceable and perfected liens upon and security interests in the Collateral
heretofore granted to Lender pursuant to the Financing Agreements or otherwise
granted to or held by Lender.
2.3 Binding Effect of Documents. The Borrower hereby acknowledges,
confirms and agrees that: (a) each of the Financing Agreements to which it is a
party has been duly executed and delivered to Lender by Borrower, and each is in
full force and effect as of the date hereof, (b) the agreements and obligations
of Borrower contained in such documents and in this Agreement constitute the
legal, valid and binding Obligations of Borrower, enforceable against it in
accordance with their respective terms, and Borrower has no valid defense to the
enforcement of such Obligations, and (c) Lender is and shall be entitled to the
rights, remedies and benefits provided for in the Financing Agreements and
applicable law.
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SECTION 3. FORBEARANCE IN RESPECT OF CERTAIN EVENTS OF DEFAULT
3.1 Acknowledgment of Default. Borrower hereby acknowledges and agrees
that the Existing Defaults have occurred and are continuing, each of
which constitutes an Event of Default and entitles Lender to exercise
its rights and remedies under the Financing Agreements, applicable law
or otherwise and Borrower further represents and warrants that as of
the date hereof no other Events of Default under the Financing
Agreements exist. Lender has not waived, presently does not intend to
waive and may never waive such Existing Defaults and nothing contained
herein or the transactions contemplated hereby shall be deemed to
constitute any such waiver. Borrower hereby acknowledges and agrees
that Lender has the presently exercisable right to declare the
Obligations to be immediately due and payable under the terms of the
Financing Agreements before the effectiveness of the forbearance
contained in Section 3.2, such right and all other rights and remedies
against the Borrower, the Collateral and/or the Guarantors available to
Lender under the Financing Agreements and under applicable law without
notice to the Borrower or Guarantor.
3.2 Forbearance.
(a) In reliance upon the representations, warranties and
covenants of Borrower and Guarantor contained in this
Agreement, and subject to the terms and conditions of this
Agreement and any documents or instruments executed in
connection herewith, Lender agrees to forbear from exercising
its rights and remedies under the Financing Agreements or
applicable law in respect of or arising out of the Existing
Defaults, subject to the conditions, amendments and
modifications contained herein for the period (the
"Forbearance Period") commencing on the date hereof and ending
on the earlier of: (i) January 31, 2002 or (ii) the occurrence
or existence of any Event of Default, other than the Existing
Defaults.
(b) Upon the termination of the Forbearance Period, the
agreement of Lender to forbear shall automatically and without
further action terminate and be of no force and effect, it
being expressly agreed that the effect of such termination
will be to permit Lender to exercise such rights and remedies
immediately, including, but not limited to, (i) ceasing to
make any further Loans, (ii) the acceleration of all of the
Obligations; and (iii) enforce any or all of its rights
against the Collateral, Borrower or Guarantors; in each case
without any further notice, passage of time or forbearance of
any kind.
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3.3 No Waivers; Reservation of Rights.
(a) Lender has not waived, is not by this Agreement waiving,
and has no intention of waiving, any Events of Default which
may be continuing on the date hereof or any Events of Default
which may occur after the date hereof (whether the same or
similar to the Existing Defaults or otherwise), and Lender has
not agreed to forbear with respect to any of its rights or
remedies concerning any Events of Default (other than, during
the Forbearance Period, the Existing Defaults to the extent
expressly set forth herein), which may have occurred or are
continuing as of the date hereof or which may occur after the
date hereof.
(b) Subject to Section 3.2 above (solely with respect to the
Existing Defaults), Lender reserves the right, in its
discretion, to exercise any or all of its rights and remedies
under the Loan Agreement and the other Financing Agreements as
a result of any Events of Default which may be continuing on
the date hereof or any Event of Default which may occur after
the date hereof, and Lender has not waived any of such rights
or remedies, and nothing in this Agreement, and no delay on
its part in exercising any such rights or remedies, should be
construed as a waiver of any such rights or remedies.
SECTION 4. AMENDMENTS AND SUPPLEMENTARY PROVISIONS
4.1 Interest. Section 1.5(a) of the Loan Agreement is hereby
amended and restated in its entirety as follows:
"1.5 Interest. (a) Borrower shall pay interest to Lender on
the aggregate outstanding Revolving Credit Advances at a
floating rate equal to the Index Rate plus six and
three-quarters (6 3/4%) percent per annum (the "Revolving
Credit Rate"), and on the aggregate outstanding balance of the
Term Loan at a floating rate equal to the Index Rate plus
eight and one-half (8 1/2%) percent per annum (the "Term Loan
Rate").
4.2 Representations and Warranties. The first sentence of Section
3.2 of the Loan Agreement is hereby deleted in its entirety
and the following new sentence is hereby inserted in lieu
thereof:
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"Each Corporate Credit Party's name as it appears in official
filing in the state of its incorporation or organization, the
type of entity of each Corporate Credit Party, organizational
identification number issued by each such Credit Party state
of incorporation or organization or a statement that no such
number has been issued, each Corporate Credit Party's state of
organization or incorporation, the location of each Corporate
Credit Party's chief executive office, corporate offices,
warehouses, other locations of Collateral and locations where
records with respect to Collateral are kept (including in each
case the county of such locations) are as set forth in
Disclosure Schedule (3.2) and, except as set forth in such
Disclosure Schedule, such locations have not changed during
the preceding twelve months."
4.3 Grant of Security Interest.
(a) Section 6.1(a) of the Loan Agreement is hereby amended and
restated in its entirety to read as follows:
"(a) As collateral security for the prompt and complete
payment and performance of the Obligations, each of the
Borrower and any other Credit Party executing this Agreement
hereby grants to the Lender a security interest in and Lien
upon all of its property and assets, whether real or personal,
tangible or intangible, and whether now owned or hereafter
acquired, or in which it now has or at any time in the future
may acquire any right, title, or interest, including all of
the following property in which it now has or at any time in
the future may acquire any right, title or interest: all
Accounts; all Deposit Accounts, other bank accounts and all
funds on deposit therein; all money, cash and cash
equivalents; all Investment Property; all Stock; all Goods
(including Inventory, Equipment and Fixtures); all Chattel
Paper, Documents and Instruments; all Books and Records; all
General Intangibles (including all Intellectual Property,
contract rights, choses in action, payment intangibles and
Software); all Letter-of-Credit Rights; all Supporting
Obligations; and to the extent not otherwise included, all
Proceeds, tort claims, insurance claims and other rights to
payment not otherwise included in the foregoing and products
of all and any of the foregoing and all accessions to,
substitutions and replacements for, and rents and profits of,
each of the foregoing, but excluding in all events Hazardous
Waste (all of the foregoing, together with any other
collateral pledged to the Lender pursuant to any other Loan
Document, collectively, the "Collateral")."
(b) Section 6.1(b) is hereby amended by inserting the
following new sentence at the end thereof:
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"Each Credit Party executing this Agreement shall promptly,
and in any event within two (2) Business Days after the same
is acquired by it, notify Lender of any commercial tort claim
(as defined in the Code) acquired by it and unless otherwise
consented by Lender, such Credit Party shall enter into a
supplement to this Loan Agreement granting to Lender a Lien in
such commercial tort claim."
4.4 Attorney-in-Fact. The last sentence of Section 6.3 of the
Loan Agreement is hereby deleted in its entirety and the
following new sentences are hereby inserted in lieu thereof:
"Notwithstanding the foregoing, the Borrower and each other
Credit Party executing this Agreement also hereby (i)
authorizes Lender to file any financing statement,
continuation statement or amendment thereto that (x) indicate
the Collateral (1) as all assets of such Credit Party or words
of similar effect or (2) as being of an equal or lesser scope
or with greater detail and (y) contains any other information
required by Part 5 of Revised Article 9 of the Code for the
sufficiency or filing office acceptance of any financing
statement, continuation statement or amendment, in each case,
without the signature of Borrower or such Credit Party and
(ii) ratifies its authorization for Lender to have filed any
initial financial statements, or amendments thereto if filed
prior to the date hereof. The Borrower and each other Credit
Party executing this Agreement acknowledges that it is not
authorized to file any financing statement or amendment or
termination statement with respect to any financing statement
without the prior written consent of Lender and agrees that it
will not do so without the prior written consent of Lender,
subject to such Credit Party's rights under Section
9-509(d)(2) of the Code."
4.5 Schedule A - Definitions.
(a) Each definition from Schedule A to the Loan Agreement
set forth on Schedule A hereto is hereby amended and
restated in its entirety to read as set forth on
Schedule A hereto.
(b) The following defined terms are hereby added to
Schedule A to the Loan Agreement in appropriate
alphabetical order:
"Deposit Accounts" means all "deposit accounts" as
such term is defined in the Code, now or hereafter
held in the name of any Person.
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"Letter-of-Credit Rights" means "letter-of-credit
rights" as such term is defined in the Code, now
owned or hereafter acquired by any Person, including
rights to payment or performance under a letter of
credit, whether or not such Person, as beneficiary,
has demanded or is entitled to demand payment or
performance.
"Software" shall mean all "software" as such term is
defined in the Code, now owned or hereafter acquired
by any Person, other than software embedded in any
category of Goods, including all computer programs
and all supporting information provided in connection
with a transaction related to any program.
"Supporting Obligations" means all "supporting
obligations" as such term is defined in the Code,
including letters of credit and guaranties issued in
support of Accounts, Chattel Paper, Documents,
General Intangibles, Instruments, or Investment
Property.
4.6 Borrowing Base. Section (b) of the definition of the term
"Borrowing Base", as set forth on Schedule A - Definitions to
the Loan Agreement, is hereby amended and restated as follows:
"(b) the lesser of (i) $750,000 minus the amount of proceeds
received by Lender from the sale by Borrower of Borrower's
machinery, equipment and inventory outside the ordinary course
of business from and after September 28, 2001 and (ii) up to
fifty percent (50%)(less reserves established by Lender
pursuant to Section 1.13) of the value of Borrower's Eligible
Inventory consisting of raw material and finished goods, in
each case as determined by Lender, valued on a first-in,
first-out basis (at the lower of cost or market), less a
reserve equal to $300,000 against availability."
4.7 Maximum Amount. The definition of the term "Maximum Amount",
as set forth on Schedule A - Definitions to the Loan
Agreement, is hereby amended and restated as follows:
""Maximum Amount" shall mean $3,000,000, provided that, the
Maximum Amount shall be further reduced by the amount of
proceeds received by Lender from the sale by Borrower of its
machinery, equipment and inventory outside the ordinary course
of business from and after September 28, 2001, excluding the
amount of such proceeds received by Lender and applied to the
outstanding principal balance of the Term Loan."
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4.8 Stated Maturity Date. The definition of the term "Stated
Maturity Date", as set forth on Schedule A - Definitions to
the Loan Agreement, is hereby amended and restated as follows:
""Stated Maturity Date" shall mean January 31, 2002."
4.9 Fixed Charge Coverage Ratio. The first sentence of Section 1
of "Fixed Charge Coverage Ratio", as set forth on Schedule G -
Financial Covenants to the Loan Agreement, is hereby amended
and restated in its entirety as follows:
"1. [Intentionally omitted.]"
4.10 Minimum Tangible Net Worth. Section 3 of Schedule G -
Financial Covenants to the Loan Agreement is hereby amended
and restated in its entirety as follows:
"3. [Intentionally omitted.]"
4.11 Disclosure Schedule 3.2. Attached hereto is Disclosure
Schedule 3.2 reflecting the information required by Section
3.2 of the Loan Agreement, as amended hereby.
SECTION 5. Additional Amendments and Supplementary Provisions.
5.1 Pretax Income. Borrower covenants and agrees that Borrower
shall maintain aggregate Net Income, prior to the effect of
taxes on income, for each month set forth below in an amount
exceeding the amount set forth opposite such month.
--------------------------------
Month Amount
--------------------------------
September 2001 $11,900
--------------------------------
October 2001 $10,150
--------------------------------
November 2001 $30,450
--------------------------------
December 2001 $26,950
--------------------------------
5.2 Additional Reserves. In addition to, and not in limitation of,
Lender's continuing right to establish reserves under the Financing Agreements
and in addition to all reserves established prior to the date of this Agreement
including, without limitation, the reserve in the amount of $25,000 established
on or about September, 2001, and the reserve in the amount of $25,000
established, or to be established, on or about September 28, 2001. Borrower
hereby acknowledges and confirms that from and after October 1, 2001, Borrower
hereby consents to the daily establishment of additional reserves against
Borrower in the amount of $2,500 per day on each Business Day. Such reserves
shall continue in effect until Lender determines otherwise in its sole
discretion.
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5.3 Eastwind Settlement.
(a) Attached hereto as Exhibit B is a draft settlement
agreement ("the "Eastwind Settlement Agreement") in
the matter of Xxxx X. Xxxxxx, Esq., Chapter 11
Trustee for the Eastwind Group, Inc. v. Conmat
Technologies, Inc., et al. Case No. 00-33372 (SR)
pending in the United States Bankruptcy Court for the
Eastern District of Pennsylvania (the "Eastwind
Lawsuit"), and Borrower has advised Lender that
Borrower expects to enter into a substantially
similar agreement, satisfactory to Lender in Lender's
sole discretion (the "Eastwind Settlement
Agreement"), and any such agreement shall include,
without limitation, payment by Borrower in full
settlement of the Eastwind Lawsuit of not more than
$500,000 prior to January 31, 2002, and not more than
$1,500,000 in the aggregate.
(b) By not later than October 12, 2001, Borrower shall
deliver to Lender evidence satisfactory to Lender
that the Eastwind Settlement Agreement has been
submitted to the United States Bankruptcy Court for
the Eastern District of Pennsylvania for approval.
(c) By not later than October 31, 2001, Borrower shall
deliver to Lender evidence satisfactory to Lender
that the Eastwind Settlement Agreement has been
approved by the United States Bankruptcy Court for
the Eastern District of Pennsylvania.
5.4 Asset Sales. Borrower represents, covenants and agrees that in
connection with the sale by Borrower of substantially all of
Borrower's machinery, equipment and inventory (the
"Manufacturing Assets") and the sale by Borrower of
substantially all of its intellectual property, including
patents, customer lists and product technology (the "Sales
Assets"):
(a) (i) By not later than October 22, 2001 Borrower shall
deliver to Lender a copy of a fully executed letter
of intent or similar agreement with a third party
purchaser satisfactory to Lender, providing for the
sale by Borrower of the Manufacturing Assets on terms
and conditions satisfactory to Lender.(ii) By not
later than October 22, 2001 Borrower shall deliver to
Lender a copy of a fully executed letter of intent or
similar agreement with a third party purchaser
satisfactory to Lender, providing for the sale by
Borrower of the Sales Assets on terms and conditions
satisfactory to Lender.
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(b) (i) By not later than the earlier of (i) November 30,
2001, and (ii) thirty days after execution and
delivery of the Eastwind Settlement Agreement,
Borrower shall deliver to Lender, a copy of a fully
executed asset sale agreement with respect to the
Manufacturing Assets, with a third party purchaser or
purchasers satisfactory to Lender in its sole
discretion, on terms and conditions satisfactory to
Lender in its sole discretion, including application
to the Obligations of any amounts payable at closing
in immediately available funds, and a promissory note
for the remaining balance, which shall be assigned to
Lender as collateral for the Obligations. Borrower
shall execute and deliver all documents, instruments
and agreements requested by Lender in order to assign
all such proceeds to Lender, and to perfect Lender's
security interests therein.
(ii) By not later than the earlier of (i) November
30, 2001, and (ii) thirty days after execution and
delivery of the Eastwind Settlement Agreement,
Borrower shall deliver to Lender, a copy of a fully
executed asset sale agreement with respect to the
Sales Assets, with a third party purchaser
satisfactory to Lender, providing that the Sales
Assets shall remain subject to the first priority
Lien of Lender and such other terms and conditions
satisfactory to Lender in its sole discretion
including, without limitation, a purchase price of
not less than $2,900,000, including not less than
$500,000 payable at closing of such sale in
immediately available funds, for application to the
settlement of the Eastwind Lawsuit, Stock of the
Sales Asset purchaser valued at not less than
$1,250,000 and a promissory note for not less than
$1,150,000 of the remaining balance for application
to the settlement of the Eastwind Lawsuit.
(c) By not later than October 31, 2001, Borrower shall
deliver to Lender a copy of Borrower's proxy
statement or other documents filed with the United
States Securities and Exchange Commission ("SEC")
seeking SEC approval of Borrower's sale of the
Manufacturing Assets and Borrower's sale of the Sales
Assets.
(d) By not later than December 31, 2001, Borrower shall
deliver to Lender evidence satisfactory to Lender of
the SEC's approval of Borrower's sale, upon terms and
conditions satisfactory to Lender, of the
Manufacturing Assets and the Sales Assets.
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(e) By not later than five (5) days after receipt of each
of the SEC approvals described in Section (d) above,
Borrower shall deliver to Lender evidence
satisfactory to Lender of the submission for approval
to the shareholders of Conmat Technologies, Inc. of
such planned sales of the Manufacturing Assets and
the Sales Assets.
(f) By not later than thirty (30) days after submission
of such planned sales to the shareholders of Conmat
Technologies, Inc., Borrower shall deliver to Lender
evidence satisfactory to Lender of the approval by
the shareholders of Conmat Technologies, Inc. of such
planned sales of the Manufacturing Assets and the
Sales Assets.
(g) By not later than October 31, 2001, Borrower shall
deliver to Lender a term sheet or proposal letter
from a lender satisfactory to Lender with respect to
proposed financing of each of the proposed purchaser
of the Manufacturing Assets and the proposed
purchaser of the Sales Assets, each containing terms
and conditions satisfactory to Lender.
(h) By not later than December 15, 2001, Borrower shall
deliver to Lender a fully executed commitment letter
from a Lender satisfactory to Lender with respect to
proposed financing of each of the proposed purchaser
of the Manufacturing Assets and the proposed
Purchaser of the Sales Assets, each containing Terms
and Conditions satisfactory to Lender.
5.5 Additional Reporting. Borrower shall deliver, or
cause to be delivered, to Lender, on or before the
close of business on the second Business Day of each
week, a report of Borrower's raw materials for the
immediately prior week, in form and detail
satisfactory to Lender. Without limiting any
provision of the Financing Agreements, Borrower shall
additionally provide to Lender and Lender's auditors
and field examiners all information necessary or
requested by Lender to analyze and verify Borrower's
standard costs and standard cost adjustments.
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SECTION 6. REPRESENTATIONS, WARRANTIES AND COVENANTS
Borrower hereby represents, warrants and covenants with and to Lender
as follows:
6.1 Representations in Financing Agreements. Each of the
representations and warranties made by or on behalf of Borrower to
Lender in any of the Financing Agreements was true and correct when
made and in all material respects is, except for the representation and
warranty set forth in the Loan Agreement relating to the non-existence
of an Event of Default, true and correct on and as of the date of this
Agreement with the same full force and effect as if each of such
representations and warranties had been made by Borrower on the date
hereof and in this Agreement.
6.2 Binding Effect of Documents. This Agreement and the other Financing
Agreements have been duly executed and delivered to the Lender by
Borrower and are in full force and effect, as modified hereby.
6.3 No Conflict, Etc. The execution and delivery and performance of
this Agreement by Borrower will not violate any Requirement of Law or
Contractual Obligation of Borrower and will not result in, or require,
the creation or imposition of any Lien on any of its properties or
revenues.
6.4 Additional Events of Default. The parties hereto acknowledge,
confirm and agree that any misrepresentation by Borrower, or any
failure of Borrower to comply with the covenants, conditions and
agreements contained in any Financing Agreement, herein or in any other
agreement, document or instrument at any time executed and/or delivered
by Borrower with, to or in favor of Lender shall constitute an Event of
Default hereunder, under the Loan Agreement and the other Financing
Agreements. In the event any Person, other than Lender, shall at any
time exercise for any reason (including by reason of any Existing
Default, any other present or future Event of Default, or otherwise)
any of its rights or remedies against Borrower or any obligor providing
credit support for Borrower's obligations to such other Person, or
against Borrower or such obligor's properties or assets, such event
shall constitute an Event of Default hereunder.
SECTION 7. CONDITIONS TO EFFECTIVENESS OF CERTAIN PROVISIONS OF THIS AGREEMENT
The effectiveness of the terms and provisions of Section 3 of this
Agreement shall be subject to the receipt by Lender of each of the following, in
form and substance satisfactory to Lender:
(a) an original of this Agreement, duly authorized,
executed and delivered by Borrower; and
(b) original UCC financing statements and such other
documents as Lender in its sole discretion deems
necessary;
(c) payment of the fee set forth in Section 8.1 of this
Agreement; and
(d) payment of the fees and disbursements of counsel to
Lender incurred in connection with the preparation,
negotiation, execution and delivery of this Agreement
and the transactions hereunder; and
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SECTION 8. PROVISIONS OF GENERAL APPLICATION
8.1 In consideration of the agreements set forth herein, Borrower
shall pay to Lender a fee in the amount of $50,000, which fee
shall be fully earned as of the date hereof and shall be
payable in five separate installments, with the first
installment in the amount of $10,000 payable contemporaneously
with the execution of this Agreement, the second, third and
fourth installments in the amount of $10,000 each payable on
October 31, 2001, November 30, 2001 and December 31, 2001,
respectively, and the fifth and final installment in the
amount of the entire then outstanding balance of such fee
payable on January 31, 2002, provided that the entire unpaid
balance of the earned and unpaid amendment fee shall be
subject to acceleration, demand and payment on the same terms
and conditions as the other Obligations upon an Event of
Default or the termination of this Agreement. Such fee is in
addition to all other fees, interest, costs and expenses
payable in connection with the Financing Agreements and may be
charged by Lender to any account of Borrower maintained by
Lender. The fee shall be fully earned by Lender
notwithstanding any failure by Borrower to comply with any
other term of this Agreement.
8.2 Effect of this Agreement. Except as modified pursuant hereto,
no other changes or modifications to the Financing Agreements
are intended or implied and in all other respects the
Financing Agreements are hereby specifically ratified,
restated and confirmed by all parties hereto as of the
effective date hereof. To the extent of conflict between the
terms of this Agreement and the other Financing Agreements,
the terms of this Agreement shall control. The Loan Agreement
and this Agreement shall be read and construed as one
agreement.
8.3 Costs and Expenses. Borrower absolutely and unconditionally
agrees to pay to the Lender, on demand by the Lender at any
time and as often as the occasion therefor may require,
whether or not all or any of the transactions contemplated by
this Agreement are consummated: all fees and disbursements of
any counsel to Lender in connection with the preparation,
negotiation, execution, or delivery of this Agreement and any
agreements delivered in connection with the transactions
contemplated hereby and expenses which shall at any time be
incurred or sustained by the Lender or any participant of
Lender or any of their respective directors, officers,
employees or agents as a consequence of or in any way in
connection with the preparation, negotiation, execution, or
delivery of this Agreement and any agreements prepared,
negotiated, executed or delivered in connection with the
transactions contemplated hereby.
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8.4 Further Assurances. The parties hereto shall execute and
deliver such additional documents and take such additional
action as may be necessary or desirable to effectuate the
provisions and purposes of this Agreement.
8.5 Binding Effect. This Agreement shall be binding upon and inure
to the benefit of each of the parties hereto and their
respective successors and assigns.
8.6 Survival of Representations and Warranties. All
representations and warranties made in this Agreement or any
other document furnished in connection with this Agreement
shall survive the execution and delivery of this Agreement and
the other documents, and no investigation by Lender or any
closing shall affect the representations and warranties or the
right of Lender to rely upon them.
8.7 Severability. Any provision of this Agreement held by a court
of competent jurisdiction to be invalid or unenforceable shall
not impair or invalidate the remainder of this Agreement and
the effect thereof shall be confirmed to the provision so held
to be invalid or unenforceable.
8.8 Reviewed by Attorneys. Borrower represents and warrants to
Lender that it (a) understands fully the terms of this
Agreement and the consequences of the execution and delivery
of this Agreement, (b) has been afforded an opportunity to
have this Agreement reviewed by, and to discuss this Agreement
and document executed in connection herewith with, such
attorneys and other persons as Borrower may wish, and (c) has
entered into this Agreement and executed and delivered all
documents in connection herewith of its own free will and
accord and without threat, duress or other coercion of any
kind by any Person. The parties hereto acknowledge and agree
that neither this Agreement nor the other documents executed
pursuant hereto shall be construed more favorably in favor of
one than the other based upon which party drafted the same, it
being acknowledged that all parties hereto contributed
substantially to the negotiation and preparation of this
Agreement and the other documents executed pursuant hereto or
in connection herewith.
14
8.9 Governing Law: Consent to Jurisdiction and Venue. EXCEPT AS
OTHERWISE EXPRESSLY PROVIDED IN ANY OF THE FINANCING
AGREEMENTS, IN ALL RESPECTS, INCLUDING ALL MATTERS OF
CONSTRUCTION, VALIDITY AND PERFORMANCE, THIS AGREEMENT AND THE
OTHER FINANCING AGREEMENTS AND THE OBLIGATIONS ARISING UNDER
THE FINANCING AGREEMENTS SHALL BE GOVERNED BY, AND CONSTRUED
AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK APPLICABLE TO CONTRACTS MADE AND PERFORMED IN SUCH STATE,
WITHOUT REGARD TO THE PRINCIPLES THEREOF REGARDING CONFLICTS
OF LAWS, AND ANY APPLICABLE LAWS OF THE UNITED STATES OF
AMERICA. BORROWER HEREBY CONSENTS AND AGREES THAT THE STATE OR
FEDERAL COURTS LOCATED IN NEW YORK SHALL HAVE EXCLUSIVE
JURISDICTION TO HEAR AND DETERMINE ANY CLAIMS OR DISPUTES
BETWEEN BORROWER AND LENDER PERTAINING TO THIS AGREEMENT OR
ANY OF THE OTHER FINANCING AGREEMENTS OR TO ANY MATTER ARISING
OUT OF OR RELATED TO THIS AGREEMENT OR ANY OF THE OTHER
FINANCING AGREEMENTS; PROVIDED, THAT LENDER AND BORROWER
ACKNOWLEDGE THAT ANY APPEALS FROM THOSE COURTS MAY HAVE TO BE
HEARD BY A COURT LOCATED OUTSIDE OF NEW YORK; AND FURTHER
PROVIDED, THAT NOTHING IN THIS AGREEMENT SHALL BE DEEMED OR
OPERATE TO PRECLUDE LENDER FROM BRINGING SUIT OR TAKING OTHER
LEGAL ACTION IN ANY OTHER JURISDICTION TO COLLECT THE
OBLIGATIONS, TO REALIZE ON THE COLLATERAL OR ANY OTHER
SECURITY FOR THE OBLIGATIONS, OR TO ENFORCE A JUDGMENT OR
OTHER COURT ORDER IN FAVOR OF LENDER. BORROWER EXPRESSLY
SUBMITS AND CONSENTS IN ADVANCE TO SUCH JURISDICTION IN ANY
ACTION OR SUIT COMMENCED IN ANY SUCH COURT, AND BORROWER
HEREBY WAIVES ANY OBJECTION WHICH IT MAY HAVE BASED UPON LACK
OF PERSONAL JURISDICTION, IMPROPER VENUE OR FORUM NON
CONVENIENS AND HEREBY CONSENT TO THE GRANTING OF SUCH LEGAL OR
EQUITABLE RELIEF AS IS DEEMED APPROPRIATE BY SUCH COURT.
BORROWER HEREBY WAIVES PERSONAL SERVICE OF THE SUMMONS,
COMPLAINT AND OTHER PROCESS ISSUED IN ANY SUCH ACTION OR SUIT
AND AGREES THAT SERVICE OF SUCH SUMMONS, COMPLAINTS AND OTHER
PROCESS MAY BE MADE BY REGISTERED OR CERTIFIED MAIL ADDRESSED
TO BORROWER AT THE ADDRESS SET FORTH IN SCHEDULE 1.1 OF THE
LOAN AGREEMENT AND THAT SERVICE SO MADE SHALL BE DEEMED
COMPLETED UPON THE EARLIER OF BORROWER'S ACTUAL RECEIPT
THEREOF OR THREE (3) DAYS AFTER DEPOSIT IN THE U.S. MAILS,
PROPER POSTAGE PREPAID.
15
8.10 Mutual Waiver of Jury Trial. BECAUSE DISPUTES ARISING IN
CONNECTION WITH COMPLEX FINANCIAL TRANSACTIONS ARE MOST
QUICKLY AND ECONOMICALLY RESOLVED BY AN EXPERIENCED AND EXPERT
PERSON AND THE PARTIES WISH APPLICABLE STATE AND FEDERAL LAWS
TO APPLY (RATHER THAN ARBITRATION RULES), THE PARTIES DESIRE
THAT THEIR DISPUTES BE RESOLVED BY A JUDGE APPLYING SUCH
APPLICABLE LAWS. THEREFORE, TO ACHIEVE THE BEST COMBINATION OF
THE BENEFITS OF THE JUDICIAL SYSTEM AND OF ARBITRATION, THE
PARTIES HERETO WAIVE ALL RIGHTS TO TRIAL BY JURY IN ANY
ACTION, SUIT, OR PROCEEDING BROUGHT TO RESOLVE ANY DISPUTE,
WHETHER ARISING IN CONTRACT, TORT, OR OTHERWISE BETWEEN LENDER
AND BORROWER ARISING OUT OF, CONNECTED WITH, RELATED OR
INCIDENTAL TO THE RELATIONSHIP ESTABLISHED BETWEEN THEM IN
CONNECTION WITH THIS AGREEMENT OR ANY OF THE OTHER FINANCING
AGREEMENTS OR THE TRANSACTIONS RELATED THERETO.
8.11 Counterparts. This Agreement may be executed in any number of
counterparts, but all of such counterparts shall together
constitute but one and the same agreement. In making proof of
this Agreement, it shall not be necessary to produce or
account for more than one counterpart thereof signed by each
of the parties hereto.
16
IN WITNESS WHEREOF, this Agreement is executed and delivered as of the
day and year first above written.
POLYCHEM CORPORATION
By:
-----------------------------------
Xxxx XxXxxxxx
Title:
---------------------------------
GENERAL ELECTRIC CAPITAL CORPORATION
By:
-----------------------------------
Title: Duly Authorized Signatory
--------------------------------
17
The terms and provisions of the foregoing Agreement are hereby acknowledged,
confirmed and agreed to and the undersigned hereby ratifies and confirms the
terms and provisions of the undersigned's Guarantee dated December 8, 1998 which
Guarantee remains in full force and effect in accordance with its terms without
offset, defense or counterclaim of any kind, nature or description whatsoever.
CONMAT TECHNOLOGIES, INC.
By:
-----------------------------------
Xxxx XxXxxxxx
Title:
---------------------------------
SCHEDULE A
18
"Account Debtor" means any Person who is or may become obligated with respect
to, or on account of, an Account, Chattel Paper or General Intangibles
(including a payment intangible).
"Accounts" means all "accounts," as such term is defined in the Code, now owned
or hereafter acquired by any Person, including: (i) all accounts receivable,
other receivables, book debts and other forms of obligations (other than forms
of obligations evidenced by Chattel Paper or Instruments) (including any such
obligations that may be characterized as an account or contract right under the
Code); (ii) all of such Person's rights in, to and under all purchase orders or
receipts for goods or services; (iii) all of such Person's rights to any goods
represented by any of the foregoing (including unpaid sellers' rights of
rescission, replevin, reclamation and stoppage in transit and rights to
returned, reclaimed or repossessed goods); (iv) all right to payment due to such
Person for property sold, leased, licensed, assigned or otherwise disposed of,
for a policy of insurance issued or to be issued, for a secondary obligation
incurred or to be incurred, for energy provided or to be provided, for the use
or hire of a vessel under a charter or other contract, arising out of the use of
a credit card or charge card, or for services rendered or to be rendered by such
Person or in connection with any other transaction (whether or not yet earned by
performance on the part of such Person), ; (v) all health care insurance
receivables; and (vi) all collateral security of any kind given by any Account
Debtor or any other Person with respect to any of the foregoing.
"Chattel Paper" means all "chattel paper," as such term is defined in the Code,
including electronic chattel paper, now owned or hereafter acquired by any
Person.
"Code" means the Uniform Commercial Code as the same may, from time to time, be
in effect in the State of New York; provided, that to the extent that the Code
is used to define any term herein or in any Loan Document and such term is
defined differently in different Articles or Divisions of the Code, the
definition of such term contained in Article or Division 9 shall govern;
provided further, that in the event that, by reason of mandatory provisions of
law, any or all of the attachment, perfection or priority of, or remedies with
respect to, Lender's Lien on any Collateral is governed by the Uniform
Commercial Code as in effect in a jurisdiction other than the State of New York,
the term "Code" shall mean the Uniform Commercial Code as in effect in such
other jurisdiction for purposes of the provisions of this Agreement relating to
such attachment, perfection, priority or remedies and for purposes of
definitions related to such provisions.
"Fixtures" means all "fixtures" as such term is defined in the Code, now owned
or hereafter acquired by any Person.
19
"General Intangibles" means all "general intangibles," as such term is defined
in the Code, now owned or hereafter acquired by any Person, including all right,
title and interest that such Person may now or hereafter have in or under any
Contract, all payment intangibles, customer lists, Licenses, Intellectual
Property, interests in partnerships, joint ventures and other business
associations, permits, proprietary or confidential information, inventions
(whether or not patented or patentable), technical information, procedures,
designs, knowledge, know-how, software, data bases, data, skill, expertise,
experience, processes, models, drawings, materials, Books and Records, Goodwill
(including the Goodwill associated with any Intellectual Property), all rights
and claims in or under insurance policies (including insurance for fire, damage,
loss, and casualty, whether covering personal property, real property, tangible
rights or intangible rights, all liability, life, key-person, and business
interruption insurance, and all unearned premiums), uncertificated securities,
chooses in action, deposit accounts, rights to receive tax refunds and other
payments, rights to received dividends, distributions, cash, Instruments and
other property in respect of or in exchange for pledged Stock and Investment
Property, and rights of indemnification.
"Goods" means all "goods," as such term is defined in the Code, now owned or
hereafter acquired by any Person, wherever located, including embedded software
to the extent included in "goods" as defined in the Code, manufactured homes,
standing timber that is cut and removed for sale and unborn young of animals.
"Inventory" means all "inventory," as such term is defined in the Code, now
owned or hereafter acquired by any Person, wherever located, including all
inventory, merchandise, goods and other personal property that are held by or on
behalf of such Person for sale or lease or are furnished or are to be furnished
under a contract of service or that constitute raw materials, work in process,
finished goods, returned goods, or materials or supplies of any kind, nature or
description used or consumed or to be used or consumed in such Person's business
or in the processing, production, packaging, promotion, delivery or shipping of
the same, including all supplies and embedded software.
"Proceeds" means "proceeds," as such term is defined in the Code and, in any
event, shall include: (i) any and all proceeds of any insurance, indemnity,
warranty or guaranty payable to Borrower or any other Credit Party from time to
time with respect to any Collateral; (ii) any and all payments (in any form
whatsoever) made or due and payable to Borrower or any other Credit Party from
time to time in connection with any requisition, confiscation, condemnation,
seizure or forfeiture of any Collateral by any governmental body, authority,
bureau or agency (or any person acting under color of governmental authority);
(iii) any claim of Borrower or any other Credit Party against third parties (a)
for past, present or future infringement of any Intellectual Property or (b) for
past, present or future infringement or dilution of any Trademark or Trademark
License or for injury to the goodwill associated with any Trademark, Trademark
registration or Trademark licensed under any Trademark License; (iv) any
recoveries by Borrower or any other Credit Party against third parties with
respect to any litigation or dispute concerning any Collateral, including claims
arising out of the loss or nonconformity of, interference with the use of,
defects in, or infringement of rights in, or damage to, Collateral; (v) all
amounts collected on, or distributed on account of, other Collateral, including
dividends, interest, distributions and Instruments with respect to Investment
Property and pledged Stock; and (vi) any and all other amounts , rights to
payment or other property acquired upon the sale, lease, license, exchange or
other disposition of Collateral and all rights arising out of Collateral.
20
EXHIBIT B
Draft Eastwind Settlement Agreement
[To be provided by Borrower]
21
DISCLOSURE SCHEDULE (3.2)
CHIEF EXECUTIVE OFFICE & CORPORATE NAMES
[To be completed by Borrower]
Official Name Type of Entity (e.g., corporation,
partnership, limited partnership,
limited liability company)
Organization Identification Number
Issued by State of Incorporation or
Organization Or Statement that no such
number has been issued State of Incorporation or Organization
Chief Executive Office County/State
Locations of Inventory and other Collateral County/State
22
