FIRST AMENDMENT AND WAIVER dated as of February
26, 1997 to the REVOLVING CREDIT AGREEMENT dated
as of September 25, 1996 (the "Credit Agreement")
by and among PDK LABS INC., a New York corporation
having its principal place of business at 000
Xxxxxxxxx Xxxx, Xxxxxxxxx, Xxx Xxxx 00000 ("PDK"),
FUTUREBIOTICS, INC., a Delaware corporation having
its principal place of business at 000 Xxxxxxxxx
Xxxx, Xxxxxxxxx, Xxx Xxxx 00000 ("Futurebiotics";
collectively with PDK, the "Co-Borrowers") and THE
CHASE MANHATTAN BANK, a New York banking
corporation, having an office at 000 Xxxxx Xxxxxxx
Xxxx, Xxxxxxxx, Xxx Xxxx 00000 (the "Bank").
WHEREAS, the Co-Borrowers have requested and the Bank has agreed, subject to the
terms and conditions of this FIRST AMENDMENT AND WAIVER, to amend and waive
compliance with certain provisions of the Credit Agreement to reflect the
requests herein set forth.
NOW, THEREFORE, in consideration of the premises and of the mutual covenants and
agreements hereinafter set forth, the parties hereto agree as follows:
1. Waiver of ARTICLE 5. AFFIRMATIVE COVENANTS.
Section 5.1. Financial Statements. (j).
Compliance with Section 5.1 (j) of the Credit Agreement is hereby waived to
permit (i) the non-receipt of the accounts receivable aging schedule for each
Co-Borrower for the fiscal quarter ended May 30, 1996 and (ii) the late
receipt of the accounts receivable aging schedule for each Co-Borrower for
the fiscal quarter ended November 30, 1996, provided, however, that the
Co-Borrowers shall each deliver to the Bank an accounts receivable aging
schedule as of November 30, 1996 no later than March 17, 1997.
2. Waiver of ARTICLE 5. AFFIRMATIVE COVENANTS.
Section 5.10. Dissolution of C&C Enterprises, Inc.
Compliance with Section 5.10 of the Credit Agreement is hereby waived,
provided, however, that C&C Enterprises shall be dissolved and the
Co-Borrowers shall deliver to the Bank a certified copy of the certificate of
dissolution of C&C Enterprises, Inc. no later than May 22, 1997.
3. Waiver of ARTICLE 6. NEGATIVE COVENANTS.
Section 6.10. Maintenance of Consolidated Indebtedness to Consolidated
Tangible Net Worth Ratio.
Compliance with Section 6.10 of the Credit Agreement is hereby waived to
permit the ratio of Consolidated Indebtedness to Consolidated Tangible Net
Worth to exceed 1.0 to 1.0 during the fiscal quarter ended November 30, 1996,
provided, however, that the ratio of Consolidated Indebtedness to
Consolidated Tangible Net Worth did not exceed 1.29 to 1.0 during the fiscal
quarter ended November 30, 1996.
- 2 -
4. Waiver of ARTICLE 6. NEGATIVE COVENANTS.
Section 6.18. Limitation on Dividends and Stock Acquisitions.
Section 6.18 of the Credit Agreement is hereby waived to permit PDK to pay
cash dividends in excess of $362,000 during its fiscal year ended November
30, 1996, provided, however, that cash dividends paid by PDK during its
fiscal year ended November 30, 1996 did not exceed $362,382.
5. Amendment to ARTICLE 6. NEGATIVE COVENANTS.
Section 6.10. Maintenance of Consolidated Indebtedness to Consolidated
Tangible Net Worth Ratio.
Section 6.10 of the Credit Agreement is hereby amended by deleting "1.0 to
1.0" and substituting therefore "1.75 to 1.0".
6. Amendment to ARTICLE 6. NEGATIVE COVENANTS.
Section 6.18. Limitation on Dividends and Stock Acquisitions.
Section 6.18 of the Credit Agreement is hereby amended by deleting "362,000"
and substituting therefore "362,382".
This FIRST AMENDMENT AND WAIVER shall be governed by and construed in accordance
with the laws of the State of New York applicable to agreements made and to be
performed in said State.
All capitalized terms not otherwise defined herein are used with the respective
meanings given to such terms in the Credit Agreement.
Except as expressly waived hereby, the Credit Agreement shall remain in full
force and effect in accordance with the original terms thereof. This FIRST
AMENDMENT AND WAIVER herein contained is limited specifically to the matters set
forth above and does not constitute directly or by implication a waiver or
amendment of any other provision of the Credit Agreement or any default which
may occur or may have occurred under the Credit Agreement.
The Co-Borrowers hereby represent and warrant that, after giving effect to this
FIRST AMENDMENT AND WAIVER, no Event of Default or event which with the giving
of notice or lapse of time or both would constitute an Event of Default exists
under the Credit Agreement or any documents relating thereto.
This FIRST AMENDMENT AND WAIVER may be executed in any number of counterparts,
each of which shall constitute an original, but all of which, when taken
together, shall constitute but one FIRST AMENDMENT AND WAIVER. This FIRST
AMENDMENT AND WAIVER shall become effective when (i) duly executed counterparts
hereof which, when taken together, bear the signatures of each of the parties
hereto shall have been delivered to the Bank and (ii) the Co-Borrowers have
delivered to the Bank the duly executed letter from the Agent to the
Co-Borrowers relating to the Agent's fee, as provided in Section 8.1 of the
Credit Agreement and which letter is attached hereto.
IN WITNESS WHEREOF, the Co-Borrowers and the Bank have caused this FIRST
AMENDMENT AND WAIVER to be duly executed by their duly authorized officers, all
as of the day and year first above written.
PDK LABS INC.
By: /s/ Xxxxxxxx Xxxxxxxx
Title: V.P.
- 3 -
FUTUREBIOTICS, INC.
By: /s/ Xxxxxxxx Xxxxxxxx
Title: President
THE CHASE MANHATTAN BANK
By: /s/ Xxxxx X. Xxxxxxxx
Vice President
CONSENT
The undersigned, as Guarantor of the obligations of the Co-Borrowers hereby
consents to the execution and delivery by the Co-Borrowers of this FIRST
AMENDMENT AND WAIVER and hereby confirms that it will remain fully bound by the
terms of the Corporate Guaranty dated September 25, 1996 to which it is a party.
PDI LABS, INC.
By: /s/ Xxxxxxxx Xxxxxxxx
Title: Asst. Sec.
February 26, 1997
PDK Labs, Inc.
Futurebiotics, Inc.
000 Xxxxxxxxx Xxx.
Xxxxxxxxx, Xxx Xxxx 00000
Re: $15,000,000 Revolving Credit Agreement, dated
September 25, 1996 by and between The Chase Manhattan
Bank, as Bank, and PDK Labs, Inc. and Futurebiotics, Inc.,
as Co-Borrowers (the "Credit Agreement")
Ladies and Gentlemen:
Reference is made to the captioned Credit Agreement. Pursuant to the terms
of the Credit Agreement, The Chase Manhattan Bank (the "Bank") has agreed to act
as agent for the "Banks" which are now or hereafter become party to the Credit
Agreement. In consideration of the Bank agreeing to act as Agent, you hereby
agree to pay the Bank an annual agency fee of $10,000. This fee shall be due and
payable upon the Closing Date and upon each anniversary of the date of the
Credit Agreement.
Please indicate your agreement to the foregoing terms by signing the
enclosed copy of this letter and returning it to us.
Very truly yours,
THE CHASE MANHATTAN BANK
By: /s/ Xxxxx X. Xxxxxxxx
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
ACKNOWLEDGED AND AGREED:
PDK LABS, INC.
By: /s/ Xxxxxxxx Xxxxxxxx
Name: Xxxxxxxx Xxxxxxxx
Title: V.P.
FUTUREBIOTICS, INC.
By: /s/ Xxxxxxxx Xxxxxxxx
Name: Xxxxxxxx Xxxxxxxx
Title: Pres.
