AMENDMENT NO. 1 TO TERM LOAN AGREEMENT
AMENDMENT NO. 1 ("Amendment No. 1") dated as of October 1, 1995 to Term
Loan Agreement dated as of May 31, 1993 between ALFACELL CORPORATION
("Borrower") and FIRST FIDELITY BANK, N.A. ("Bank") (successor by consolidation
to First Fidelity Bank, N.A., New Jersey).
W I T N E S S E T H:
SECTION 1. RECITALS.
1.1. This Amendment No. 1 is made in contemplation of the following
matters.
1.2. The Borrower, a Delaware corporation, and the Bank have
previously entered into a Term Loan Agreement (the "Loan Agreement"), dated as
of May 31, 1993, and a term note (the "Term Note"), dated as of May 31, 1993,
pursuant to which the Bank agreed to restructure a term loan previously
extended by the Bank to the Borrower (the term loan, as so restructured, the
"Alfacell Term Loan"). Terms defined in the Loan Agreement are used herein as
therein defined unless otherwise defined herein.
1.3. Under the Loan Agreement, the unpaid principal amount of the
Alfacell Term Loan is due and payable no later than the earlier of May 31, 1996
or the date on which the Bank demands payment in full of the Term Note pursuant
to Section 6.01 of the Loan Agreement (the "Termination Date"). The Borrower
has requested that the Bank consent to (i) an extension of the Termination Date
under the Loan Agreement to the earlier of August 31, 1997 or the date on which
the Bank demands payment in full of the Term Note pursuant to Section 6.01 of
the Loan Agreement and (ii) a re-amortization of the payment of principal and
interest on the Alfacell Term Loan based on a one hundred fifty (150) month
amortization schedule effective as of October 1, 1995. The Bank has agreed to
such extension on the conditions that (i) the annual rate of interest on the
Alfacell Term Loan be increased from 7.5% per annum to 8.375% per annum as of
October 1, 1995 and (ii) the Borrower issue to the Bank a warrant to purchase
10,000 shares of the Common Stock, par value $.001 per share, of the Borrower.
1.4. The Borrower has requested the Bank to enter into this Amendment
No. 1 on the conditions specified herein to reflect the foregoing
modifications.
SECTION 2. AMENDMENTS.
2.1. The definition of "Termination Date" in SECTION 1.01 is amended
in its entirety to read as follows:
"TERMINATION DATE" means the earlier of August 31, 1997 or the date
on which the Bank demands payment in full of its Term Note pursuant
to Section 6.01.
2.2. The first two sentences of SECTION 2.02 of the Loan Agreement
are amended in their entirety to read as follows:
SECTION 2.02. TERM NOTE. On the date hereof, subject to the
terms and conditions hereinafter set forth, the Borrower will issue
to the Bank, and the Bank will accept, in substitution and exchange
for (but not in payment of) the Original Note, a term note in
substantially the form attached hereto as Schedule 2.02 in the
principal amount of the Term Loan, and as of October 1, 1995, subject
to the terms and conditions hereof, the Borrower will issue to the
Bank, and the Bank will accept, in substitution and exchange for (but
not in payment of) the term note in the form of Schedule 2.02, a term
note substantially in the form attached hereto as Schedule 2.02A
(each of the term notes attached hereto as Schedules 2.02 and 2.02A
referred to as a "Term Note").
2.3. SECTION 2.03(b) of the Loan Agreement is amended in its entirety
to read as follows:
(b) Subject to the following subparagraphs (d) and (e),
commencing with the Payment Date of October 1, 1993, and on each
Payment Date thereafter until and including October 1, 1995, the Term
Loan shall be payable on each Payment Date in consecutive equal
monthly installments of principal and interest, based on a one
hundred seventy-six (176) month amortization schedule of the unpaid
principal amount of the Term Note together with interest thereon at
the rate of seven and one-half percent (7.5%) per annum.
2.4. A new SECTION 2.03(c) of the Loan Agreement is added as follows:
(c) Subject to the following subparagraphs (d) and (e),
commencing with the Payment Date of November 1, 1995 and on each
Payment Date thereafter until payment in full of the unpaid principal
amount thereof together with interest thereon, the Term Loan shall be
payable on each Payment Date in consecutive equal monthly
installments of principal and interest each in the amount of Sixteen
Thousand Two Hundred Thirteen and 49/100 dollars ($16,213.49) based
on a one hundred fifty (150) month amortization schedule of the
unpaid principal amount of the Term Note together with interest
thereon at the rate per annum set forth in the Term Note.
2.5. SECTION 2.03(c) is renumbered as SECTION 2.03(d).
2.6. SECTION 2.03(d) is renumbered as SECTION 2.03(e).
2.7. SECTION 2.03(e) is renumbered as SECTION 2.03(f).
2.8. SECTION 5.02(b)(ii) is deleted in its entirety and replaced with
the following:
(ii) intentionally omitted
2.9. SECTION 5.02(b)(v) is amended in its entirety to read as
follows:
(v) unsecured Indebtedness arising in the ordinary course of the
Borrower's business which at no time exceeds $1,452,000 in the
aggregate.
2.10. SECTION 5.02(j) is amended in its entirety to read as follows:
(j) ISSUANCE OF SHARES. Issue any shares of Stock of the
Borrower to any Person, or issue any options, warrants or any other
rights to purchase any shares of Stock to any Person if after giving
immediate effect to any such issuance the ratio of (i) the Market
Value (as such term is defined below) of the Pledged Stock under the
Pledge Agreement to (ii) the aggregate Indebtedness of the Borrower
and Kuslima Shogen to the Bank then outstanding shall be less than
1:1; PROVIDED, HOWEVER, that, without limiting SECTION 6.01(m)
hereof, the foregoing shall not prohibit the Borrower from issuing
shares of common stock of the Borrower upon the conversion, in
accordance with the terms thereof, of any convertible subordinated
debenture outstanding as of the date hereof or of any other options,
warrants or convertible securities which may be issued in the
ordinary course of business. For purposes of this SECTION 5.02(j),
"Market Value" per share of common stock as of any date shall equal
the average of the daily closing prices for the twenty (20) trading
days immediately preceding the date in question unless there shall
not have occurred twenty (20) trading days over the two (2) month
period preceding the date in question in which case "Market Value"
per share of common stock as of any date shall be determined by the
Bank in its reasonable discretion. The closing price for each day
shall be the last reported sales price on the primary exchange or
market (including the NASDAQ - National Market System) on which the
common stock is then listed or traded, or if not listed or admitted
to trading on any such market, the average of the closing bid and
asked prices on the NASDAQ or in the over-the-counter market as
furnished by any New York Stock Exchange member firm selected from
time to time by the Borrower for that purpose.
2.11. SECTION 6.01(m) is amended in its entirety to read as follows:
(m) At any time, the ratio of (i) the Market Value (as such
term is defined in Section 5.02(j) hereof) of the Pledged Stock under
the Pledge Agreement to (ii) the aggregate Indebtedness of the
Borrower and Kuslima Shogen to the Bank then outstanding shall be
less than 1:1 for five (5) consecutive Business Days unless the
Borrower shall within fifteen (15) days following such five (5) day
period pledge and grant to the Bank a security interest in such
amount and form of additional collateral as shall be acceptable to
the Bank in its sole discretion;
2.12. SECTION 7.03 of the Loan Agreement is amended to reflect that
copies of notices to the Borrower no longer be sent to Xxxxxxxx & Xxxxxx, P.C.
and that such notices instead be sent to the following:
Xxxx & Xxxxxxx
Park Avenue Tower
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: Xxxxx X. Xxxxxxx, Esq.
2.13. The second sentence of SECTION 7.13 is amended in its entirety
to read as follows:
The Borrower hereby waives personal service of process and
consents that service of process upon it may be made by
certified or registered mail, return receipt requested, at its
address specified or determined in accordance with the
provisions of Section 7.03, and hereby appoints Xxxxx Xxxxxxxx,
Esq. as its agent for service of process and consents that
service of process upon it may be made upon such agent at her
offices located at Xxxx & Xxxxxxx, 000 Xxxxxx Xxxxxx, Xxxxxxxx,
Xxx Xxxxxx 00000.
SECTION 3. REPRESENTATIONS AND WARRANTIES.
3.1. Notwithstanding anything otherwise contained in the Loan
Agreement to the contrary, the Borrower represents, warrants and acknowledges
to the Bank and the Bank agrees that as of the date hereof the unpaid principal
amount of the Term Loan is $1,504,662.16. The Borrower represents, warrants
and acknowledges to the Bank that the Term Loan, together with all other
amounts payable in respect thereof, are payable to the Bank by the Borrower
without deduction, set-off, defense or counterclaim for any reason whatsoever.
The Borrower hereby acknowledges and agrees that it has no claims against the
Bank, or any of its officers, directors, employees or agents, arising out of or
in connection with the Loan Documents, or any other transactions contemplated
thereby, and hereby expressly waives and releases any and all such claims.
3.2. Subject to Section 4.1 below, each representation and warranty
by the Borrower set forth in Article IV of the Loan Agreement (other than that
set forth in SECTION 4.01(a)) is true and correct on and as of the date of this
Amendment No. 1 as though made by the Borrower on and as of such date.
SECTION 4. SCHEDULES.
4.1. Schedule 4.01(q) of the Loan Agreement is superseded in its
entirety as of October 1, 1995 by Schedule 4.01(q) annexed hereto.
SECTION 5. TERM NOTE.
5.1. Simultaneously with the execution and delivery by Borrower to
the Bank of this Amendment No. 1, the Borrower shall execute and deliver to the
Bank, and the Bank will accept, in substitution and exchange for (but not in
payment of) the Term Note, dated as of May 31, 1993, an Amended and Restated
Term Note, dated as of the date hereof, in the principal amount of
$1,504,662.16 substantially in the form annexed hereto as Schedule 2.02A. The
Amended and Restated Term Note shall supersede Schedule 2.02 to the Loan
Agreement and be entitled to all the benefits and subject to the terms and
conditions of the Loan Agreement and the other Loan Documents applicable to the
Term Note.
SECTION 6. WARRANT.
6.1. Simultaneously with the execution and delivery by Borrower to
the Bank of this Amendment No. 1, the Borrower shall execute and deliver to the
Bank a warrant (the "Warrant") to purchase 10,000 shares of the Common Stock,
par value $.001 per share, of the Borrower, substantially in the form annexed
hereto as Schedule 6.01.
SECTION 7. GENERAL.
7.1. This Amendment No. 1 is made pursuant to Section 7.02 of the
Loan Agreement and the Borrower and the Bank acknowledge that all provisions of
the Loan Agreement and the Loan Documents, except as amended hereby, are and
shall remain, in full force and effect, and nothing herein contained shall be
deemed a waiver of, or impair the effectiveness or enforceability of, any other
terms or conditions of the Loan Agreement or any of the other Loan Documents,
or constitute a waiver of any Event of Default thereunder.
7.2. The Bank hereby acknowledges receipt of payment in full of the
amount required to be paid by Borrower pursuant to SECTION 2.04(b)(iii) of the
Loan Agreement.
SECTION 8. EFFECTIVENESS.
8.1. This Amendment No. 1 shall become effective when (i) this
Amendment shall have been signed and delivered by Kuslima Shogen and on behalf
of the Borrower and the Bank, (ii) the Borrower shall have executed and
delivered to the Bank the Amended and Restated Note and the Warrant, and (iii)
the Bank shall have delivered to the Borrower the Term Note of the Borrower,
dated as of May 31, 1993, marked "replaced and superseded."
SECTION 9. COUNTERPARTS.
9.1. This Amendment No. 1 may be executed in any number of
counterparts, each of which shall be an original and all of which shall
constitute one agreement. It shall not be necessary in making proof of this
Amendment No. 1 or of any document required to be executed and delivered in
connection herewith or therewith to produce or account for more than one
counterpart.
IN WITNESS WHEREOF, the parties hereto have executed, or caused to be
executed by their respective officers thereunto duly authorized, this Amendment
No. 1 as of the date first above written.
ALFACELL CORPORATION
By:/S/ KUSLIMA SHOGEN
Kuslima Shogen, President
FIRST FIDELITY BANK, N.A.
By:/S/ XXXXXXX X. XXXXXXX
Xxxxxxx X. Xxxxxxx,
Vice President
The undersigned, as Guarantor of the Alfacell
Term Loan pursuant to that certain Guaranty
dated as of May 31, 1993, hereby consents to
this Amendment No. 1 and confirms and re-
affirms her obligations under the Guaranty
including the guaranty of payment and
performance by the Borrower of the Alfacell
Term Loan as modified by this Amendment
No. 1.
/S/ KUSLIMA SHOGEN
Kuslima Shogen
Schedule 2.02A
AMENDED AND RESTATED TERM NOTE
$1,504,662.16 As of October 1, 1995
Newark, New Jersey
FOR VALUE RECEIVED, ALFACELL CORPORATION, a Delaware corporation
("Borrower"), promises to pay to the order of FIRST FIDELITY BANK, N.A.,
NEW JERSEY (the "Bank") at its office at 000 Xxxxx Xxxxxx, Xxxxxx, Xxx
Xxxxxx 00000, in accordance with the Loan Agreement referred to below, the
principal sum of ONE MILLION FIVE HUNDRED FOUR THOUSAND SIX HUNDRED SIXTY-
TWO DOLLARS AND SIXTEEN CENTS ($1,504,662.16) together with interest from
the date hereof on the unpaid principal amount hereof at the rate of EIGHT
AND THREE-EIGHTHS PERCENT (8-3/8%) per annum (computed on the basis of the
actual number of days elapsed over a year of three hundred sixty (360)
days.
This Note shall be payable in the following manner:
(i) Commencing on November 1, 1995 and on each Payment Date
thereafter until payment in full of the unpaid principal amount hereof
together with interest hereon, the Borrower shall pay to the Bank
consecutive equal monthly installments of principal and interest each in
the amount of Sixteen Thousand Two Hundred Thirteen and 49/100 dollars
($16,213.49) based on a one hundred fifty (150) month amortization schedule
of the unpaid principal amount hereof together with interest hereon at the
rate set forth above;
(ii) On the fourth (4th) Payment Date to occur following the
execution by the Borrower of a Licensing Agreement, the unpaid principal
amount hereof together with interest hereon at the rate set forth above
will be re-amortized, and on such fourth (4th) Payment Date and on each
Payment Date thereafter until payment in full of the unpaid principal
amount hereof together with interest hereon, the Borrower shall pay to the
Bank consecutive equal monthly installments of principal and interest based
on a one hundred twenty (120) month amortization schedule of the unpaid
principal amount hereof together with interest hereon at the rate set forth
above;
(iii) In any event, the entire unpaid principal amount hereof
together with unpaid interest accrued thereon shall be due and payable on
August 31, 1997.
Both principal and interest due hereunder shall be paid in
immediately available funds to the Bank at 000 Xxxxx Xxxxxx, Xxxxxx, Xxx
Xxxxxx 00000 or at such other address as the Bank shall notify Borrower.
This Amended and Restated Term Note is issued in substitution and
exchange for (but not in payment of) the Term Note referred to in the Term
Loan Agreement dated as of May 31, 1993 between Borrower and the Bank, as
the same has been, or may further be, amended, modified or supplemented
from time to time (the "Loan Agreement"; terms not defined herein being
used as defined therein) and is entitled to all the benefits and subject to
the terms and conditions of the Loan Agreement and the other Loan Documents
applicable to the Term Note. All of the terms and conditions of the Loan
Agreement are incorporated herein as though fully set forth and the
undersigned acknowledges the reading and execution of said Loan Agreement.
The Loan Agreement, among other things, contains provisions for
acceleration of the maturity hereof upon the happening of certain stated
events and also for prepayments on account of principal prior to the
maturity hereof upon the terms and conditions therein specified.
Presentment for payment, demand, notice or dishonor, protest,
notice of protest and all other demands and notices in connection with the
delivery, performance and enforcement of this Note are hereby waived.
This Amended and Restated Term Note shall be construed and is
enforceable in accordance with, and shall be governed by, the internal laws
of the State of New Jersey without regard to principles of conflict of
laws. If any term or provision of this Amended and Restated Term Note is
at anytime held to be invalid by any court of competent jurisdiction, such
invalidity shall not affect the remaining terms and provisions of this Note
which shall continue to be in full force and effect.
ATTEST: ALFACELL CORPORATION
By: /S/KUSLIMA SHOGEN
Kuslima Shogen, President
Schedule 4.01(q)
ALFACELL CORPORATION
Estimated Unsecured Liabilities
As of October 1, 1995
Accounts Payable $192,000
Payroll Taxes 35,000
Accrued Expenses Payroll - Xxxxxxxx 225,000
TOTAL $452,000
