EXHIBIT 10.12
WAIVER AND AMENDMENT AGREEMENT
WAIVER AND AMENDMENT AGREEMENT (this "Amendment"), dated as of August 25,
1999, between General Electric Capital Corporation, a New York corporation (the
"Lender") and Polychem Corporation, a Pennsylvania corporation ("Polychem").
Unless otherwise stated or defined herein, capitalized terms used herein shall
have the meanings given to them in the Loan and Security Agreement.
WHEREAS, the Lender and Polychem are parties to a Loan and Security
Agreement, dated as of September 30, 1998 (as amended by the Waiver and
Amendment Agreement thereto, dated as of December 8, 1998, and the Waiver and
Amendment to Loan and Security Agreement, dated as of April 22, 1999, as it may
be further amended or modified, the "Loan and Security Agreement"), pursuant to
which the Lender has agreed to make revolving credit advances and a term loan to
Polychem;
WHEREAS, the Account from the APC-T&KJV project (the "APC Account") became
ineligible as of June 30, 1999, which has caused the Revolving Credit Loan to
exceed the Borrowing Availability (the "Overadvance") and to result in the
occurrence and continuance of an Event of Default under the Loan and Security
Agreement.
WHEREAS, Polychem has requested that the APC Account continue to be deemed
to be an Eligible Account through October 1,1999 and that the Lender waive such
Event of Default;
WHEREAS, Polychem wishes to refinance its real property with financing from
another lending institution, and, in connection therewith, to reduce the Term
Loan and obtain a release of the Mortgage from the Lender;
WHEREAS, Polychem has requested that a portion of the Term Loan in the
amount of $412,000 remain outstanding and that the Maximum Amount of the
revolving credit facility be increased from $3,500,000 to $5,000,000; and
WHEREAS, the Lender is willing to release the Mortgage, permit a portion of
the Term Note in the amount of $412,000 to remain outstanding and increase the
Maximum Amount of the revolving credit facility from $3,500,000 to $5,000,000 on
the terms and conditions set forth herein.
NOW THEREFORE, intending to be legally bound hereby and in consideration of
the mutual covenants contained herein and for other good, valuable and
sufficient consideration, the receipt and sufficiency of which is hereby
acknowledged, it is hereby agreed as follows:
1. Waiver. Effective as of the Effective Date (as hereinafter defined), the
Lender hereby waives any Default or Event of Default which existed on and prior
to the date hereof due to the failure of the APC Account to be an Eligible
Account in accordance with clause (m) of the definition of the term "Eligible
Accounts", it being understood and agreed that the Lender does not waive any
Default or Event of Default, if any, arising from the failure, if any, of the
APC Account to comply with any other clause of the definition of the term
"Eligible Accounts".
2. Amendments to Loan and Security Agreement. The Lender hereby agrees to
amend the Loan and Security Agreement as follows:
(a) Section 1.2 is hereby amended to add a new clause (h) thereto, to
read in its entirety as follows:
"(h) After giving effect to the Waiver and Amendment Agreement,
dated as of August 25, 1999, the original principal amount of the Term Loan
shall be $412,000, payable in 25 monthly installments of $8,000, commencing
on September 1, 1999, with a balloon payment of the remaining outstanding
balance on the Commitment Termination Date."
(b) Clause (m) of the definition of Eligible Account is hereby amended
by adding two clauses to the end of such clause, to read in their entirety
to as follows:
";except for the APC Account which shall be deemed to be an Eligible
Account through October 1, 1999 provided it meets all of the other
requirements set forth in this definition of Eligible Accounts other
than the requirements of this clause (m); provided, further, that the
maximum amount which may be included in the Borrowing Base with respect
to the APC Account shall be $400,000."
(c) The definition of "Maximum Amount" is hereby amended by changing the
amount set forth therein from "$3,500,000" to "$5,000,000".
3. Effectiveness. This Amendment shall become effective on the date (the
"Effective Date") on which each of the following conditions is satisfied:
(a) The Lender shall have received an executed Amended and Restated Term
Note made by Polychem in favor of the Lender (the "New Term Note"), in the
form attached hereto as Exhibit A;
(b) The Lender shall have received an executed Amended and Restated
Revolving Credit Note made by Polychem in favor of the Lender (the "New
Revolving Credit Note"), in the form attached hereto as Exhibit B;
(c) The Lender shall have received a Mortgagee Waiver in the form
attached hereto as Exhibit C;
(d) The Lender shall have received the Reaffirmation Agreement of ConMat
Technologies, Inc. in the form attached hereto as Exhibit D;
(e) Polychem shall have reduced the outstanding indebtedness to the
Lender under the Loan and Security Agreement by $1,800,000; and
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(f) The Lender shall have received an amendment fee in the amount of
$10,000.
4. Representations and Warranties.
4.1. Polychem hereby represents and warrants to the Lender that:
(a) (i) it is a corporation duly organized, validly existing and in good
standing under the laws of the jurisdiction of its incorporation and has
the corporate power and authority and the legal right to own and operate
its property, to lease the property it operates and to conduct the business
in which it is currently engaged, (ii) it has the power and authority and
the legal right and capacity to execute and deliver, and to perform its
obligations under this Amendment, the Agreement, as amended by this
Amendment, and the New Term Note and the New Revolving Credit Note
(collectively, the "New Notes"), and has taken all necessary action to
authorize its execution, delivery and performance of this Amendment, the
Agreement, as amended by this Amendment, and the New Notes.
(b) this Amendment, the Agreement as amended by the Amendment and the
New Notes constitute the legal, valid and binding obligations of Polychem,
enforceable in accordance with their terms, except as affected by
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium
and other similar laws relating to or affecting the enforcement of
creditors' rights generally, general equitable principles and an implied
covenant of good faith and fair dealing;
(c) the execution, delivery and performance of this Amendment, the
Agreement, as amended by this Amendment, and the New Notes will not violate
any provision of any Requirement of Law or Contractual Obligation of
Polychem and will not result in or require the creation or imposition of
any Lien on any of its properties or revenues pursuant to any Requirement
of Law or any of its Contractual Obligations;
(d) no consent or authorization of, filing with, or other act by or in
respect of, any arbitrator or Governmental Authority and no consent of any
other Person (including, any shareholder or creditor of Polychem) is
required in connection with the execution, delivery, performance, validity
or enforceability of this Amendment, the Agreement, as amended by this
Amendment or the New Notes; and
(e) no litigation, investigation or proceeding of or before any
arbitrator or Governmental Authority is pending or, to the knowledge of
Polychem threatened by or against it or against any of its properties or
revenues (1) with respect to this Amendment, the Agreement, as amended by
this Amendment, or the New Notes, or any of the transactions contemplated
hereby, or (2) which could have a material adverse effect on the business,
property, or financial or other condition of Polychem.
4.2. Polychem hereby represents and warrants to the Lender that each of
its representations and warranties contained in the Loan and Security
Agreement is true and
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correct and hereby restates each such representation and warranty and
further represents and warrants that no Event of Default or Default has
occurred or is continuing after giving effect to this Amendment.
5. Miscellaneous Terms and Conditions.
5.1. Loan and Security Agreement in Full Force and Effect. Except as
amended or waived by this Amendment, all of the provisions of the Loan and
Security Agreement shall remain in full force and effect from and after the
date hereof.
5.2. References to Loan and Security Agreement and to New Notes. From
and after the effectiveness of this Amendment, (a) all references in the
Loan and Security Agreement to "this Agreement," "hereof," "herein," or
similar terms, all references to the Loan and Security Agreement in the
Loan Documents, or any other documents or instruments executed or delivered
in connection with the Loan and Security Agreement, and all references to
the Loan and Security Agreement shall mean and refer to the Loan and
Security Agreement as amended by this Amendment, (b) all references in the
Loan and Security Agreement or in the other Loan Documents, or any other
documents or instruments executed or delivered in connection with the Loan
and Security Agreement to "the Term Note" shall mean and refer to the
Amended and Restated Term Note attached hereto as Exhibit A. and (c) all
references in the Loan and Security Agreement or in the other Loan
Documents, or any other documents or instruments executed or delivered in
connection with the Loan and Security Agreement to "the Revolving Credit
Note" shall mean and refer to the Amended and Restated Revolving Credit
Note attached hereto as Exhibit B.
5.3. Further Assurances. At the request of either party, the other party
shall deliver any further instruments and take all reasonable actions as
may be necessary or appropriate to effectuate the transactions contemplated
by this Amendment.
5.4. GOVERNING LAW. THIS AMENDMENT WILL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO THE
CONFLICTS OF LAW PRINCIPLES THEREOF.
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IN WITNESS WHEREOF, the parties have executed this Waiver and Amendment
Agreement upon the date first written above.
GENERAL ELECTRIC CAPITAL CORPORATION
By:_________________________________
Name:
Title:
POLYCHEM CORPORATION
By: /s/ Xxxx X. XxXxxxxx
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Name: Xxxx X. XxXxxxxx
Title: Chairman and CEO
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