SECOND AMENDMENT
SECOND AMENDMENT dated as of August 13, 1998, (the "Amendment"), with
respect to the Credit Agreement dated as of August 20, 1997 (such agreement as
it has been amended prior to the date hereof, the "Credit Agreement"), by and
among PDK LABS INC. and FUTUREBIOTICS, INC., as Co-Borrowers (the
"Co-Borrowers"), and EUROPEAN AMERICAN BANK, a New York banking corporation
("EAB"), as Agent and as a Bank and the Banks party hereto.
RECITALS
The Co-Borrowers have requested and the Banks have agreed, subject to
the terms and conditions of this Amendment, to waive and amend certain
provisions of the Credit Agreement as herein set forth. Capitalized terms used
herein and not defined herein shall have the meanings given to them in the
Credit Agreement.
Accordingly, in consideration of the premises and of the mutual
covenants and agreements hereinafter set forth, the parties hereto agree as
follows:
I. Amendments.
Section 1.1. Section 1.1 of the Credit Agreement is hereby amended by
inserting the following definitions therein immediately prior to the definition
of "Debt":
"Consulting Agreement" means a consulting agreement to be
executed by and between PDK and Xxxxxxx Xxxxxxxx having a term of not less than
three (3) years pursuant to which Xx. Xxxxxxxx shall provide consulting
services to PDK in the areas of marketing, finance, administration and mergers
and acquisitions at least sixteen (16) Business Days per month and which shall
include a non-compete agreement which will prohibit Xx. Xxxxxxxx from being
employed by or from providing consulting services to any competitor of PDK,
which agreement shall be reasonably satisfactory to the Banks.
Section 1.2. The definition of the term "Revolving Credit Commitment"
contained in Section 1.1 of the Credit Agreement is hereby amended by deleting
the chart therefrom and by substituting the following in its place:
Bank Commitment
---- ----------
EAB $5,300,000
National Bank of Canada $2,350,000
Bank Leumi USA $2,350,000
Section 1.3. The definition of the term "Revolving Credit Note"
contained in Section 1.1 of the Credit Agreement is hereby amended by inserting
the following phrase at the end thereof: ", or any note issued in substitution
or replacement thereof."
Section 1.4. The definition of the term "Term Note" contained in
Section 1.1 of the Credit Agreement is hereby amended by inserting the
following phrase at the end thereof: ", or any note issued in substitution or
replacement thereof."
Section 1.5. Article 6 of the Credit Agreement is hereby amended by
inserting the following in a new Section 6.20 at the end thereof:
Section 6.20. Year 2000. Any reprogramming or other
corrective modifications required to permit the proper
functioning, in and following the year 2000, of (i)
Co-Borrower's and their Subsidiaries' computer systems and
(ii) equipment containing embedded microchips (including
systems and equipment supplied by others or with which the
Co-Borrowers' or their Subsidiaries' systems interface) and
the testing of all such systems and equipment, as so
reprogrammed, will be completed by January 1, 1999. The
cost to the Co-Borrowers and their Subsidiaries of such
reprogramming, modifications and testing and of the
reasonably foreseeable consequences of year 2000 to the
undersigned and its subsidiaries (including, without
limitation, reprogramming errors and the failure of others'
systems or equipment) will not result in the occurrence of
an Event of Default or result in a Material Adverse Change.
Except for such of the reprogramming and modifications
referred to in the preceding sentence as may be necessary,
the computer and management information systems of the
Co-Borrowers and their Subsidiaries are, and with ordinary
course upgrading and maintenance, will continue for the
term of this Agreement to be, sufficient to permit the
Co-Borrowers to conduct their business.
Section 1.6. Section 8.11 of the Credit Agreement is hereby
amended and restated to provide in its entirety as follows:
"Fail to maintain Xxxxxxx X. Xxxxxxxx (i) in a reasonably
active full time capacity as the President of PDK and as an
officer to Futurebiotics, responsible for the day to day
operations of each of the Co-Borrowers or (ii) as a
consultant to PDK and Futurebiotics pursuant to the terms
of the Consulting Agreement."
II. Conditions. The amendments provided for pursuant to Section
I hereof shall become effective only upon satisfaction of the following
conditions precedent:
(a) The Agent shall have received each of the
following, in form and substance satisfactory to
the Agent and its counsel.
(i) This Amendment and amended and
restated Revolving Credit Notes
executed by the Co-Borrowers in favor
of each Bank;
(ii) a certificate of the Secretary of
Compare Generiks, Inc. (the
"New Guarantor") dated the date of
this Amendment, attesting to all
corporate action taken by such entity,
including resolutions of its Board of
Directors authorizing the execution,
delivery and performance of its
Guarantee and each other document to
be delivered pursuant to this
Agreement, together with certified
copies of the certificate or articles
of incorporation and the by-laws of
the New Guarantor; and, such
certificate shall state that the
resolutions and corporate documents
thereby certified have not been
amended, modified, revoked or
rescinded as of the date of such
certificate;
(iii) a certificate of the Secretary of the
New Guarantor, dated the Closing Date,
certifying the names and true
signatures of the officers of such
entity authorized to sign the Facility
Documents and the other documents to
be delivered by such entity under this
Agreement;
(iv) a certificate of a duly authorized
officer of each of the Co-Borrowers,
dated the date of this Agreement,
stating that the representations and
warranties in Article 6 are true and
correct on such date as though made on
and as of such date and that no event
has occurred and is continuing which
constitutes a Default or Event of
Default;
(v) a Guarantor Security Agreement duly
executed by the New Guarantor,
together with (A) fully completed and
executed financing statements on
Form UCC-1, in proper form for filing
duly filed under the Uniform
Commercial Code in all jurisdictions
necessary or, in the reasonable
discretion of the Agent, desirable to
perfect the security interests to be
granted hereunder and under the
Guarantor Security Agreement and (B)
UCC search results identifying all
of the financing statements on file
with respect to the New Guarantor in
all jurisdictions referred to under
clause (A) hereof, indicating that no
party claims an interest in any of the
Collateral;
(vi) a favorable opinion of counsel for the
New Guarantor dated the Closing Date,
in form and substance satisfactory to
the Agent and its counsel;
(vii) satisfactory evidence that the New
Guarantor is duly organized, validly
existing and in good standing under
the laws of their respective
jurisdictions of incorporation and
each other jurisdiction where
qualification is necessary; and
(viii) such other documents, instruments,
agreements, approvals, opinions and
evidence as the Agent may reasonably
require.
III. Miscellaneous.
(a) This Amendment shall be governed by and construed in
accordance with the laws of the State of New York.
(b) All terms used herein shall have the same meaning as in
the Credit Agreement, as amended hereby, unless specifically defined herein.
(c) This Amendment shall constitute a Facility Document.
(d) As expressly amended hereby, the Credit Agreement
remains in full force and effect in accordance with the terms thereof. The
Credit Agreement is ratified and confirmed in all respects by the Co-Borrowers.
The amendments herein are limited specifically to the matters set forth above
and for the specific instance and purposes for which given and do not
constitute directly or by implication an amendment or waiver of any other
provisions of the Credit Agreement or a waiver of any Event of Default or event
which upon notice, lapse of time or both would constitute an Event of Default
which may occur or may have occurred under the Credit Agreement or any other
Facility Document.
(e) The Co-Borrowers hereby represent and warrant that (i)
the representations and warranties by the Co-Borrowers and each Guarantor
pursuant to the Credit Agreement and each other Facility Document are true and
correct on the date hereof, and (ii) after giving effect to this Amendment, no
Event of Default or event which upon notice, lapse of
time or both would constitute an Event of Default exists under the Credit
Agreement or any other Facility Document.
(f) This Amendment may be executed in one or more
counterparts, each of which shall constitute an original, but all of which,
when taken together, shall constitute but one Amendment.
IN WITNESS WHEREOF, the Co-Borrowers, the Agent and the Banks have
caused this Amendment and Waiver to be duly executed by their duly authorized
officers as of the day and year first above written.
PDK LABS INC.
By:
-------------------------------
Title:
FUTUREBIOTICS, INC.
By:
-------------------------------
Title:
EUROPEAN AMERICAN BANK,
as Agent and as a Bank
By:
-------------------------------
Title:
BANK LEUMI USA, as a Bank
By:
-------------------------------
Title:
NATIONAL BANK OF CANADA, as a Bank
By:
-------------------------------
Title:
