FIRST AMENDMENT TO
LOAN AND SECURITY AGREEMENT
This First Amendment to Loan and Security Agreement (the "Amendment")
dated April 1, 1998 by and between SUMMIT BANK, a state banking association
organized and existing under the laws of the State of New Jersey (the
"Lender") with an office at 000 Xxxxx Xxxxxx, 0xx Xxxxx, Xxxxxxxxxx, Xxx
Xxxxxx 00000 and SEL-LEB MARKETING, INC., a New York corporation ("Sel-Leb"),
having its principal executive office located at 000 Xxxxx Xxxxxx, Xxxxxxxx,
Xxx Xxxxxx 00000 and ALES SIGNATURE LTD., a New York corporation ("ALES"),
having its principal executive office located at 000 Xxxxx Xxxxxx, Xxxxxxxx,
Xxx Xxxxxx 00000 (ALES and SEL-LEB each a "Borrower" and collectively the
"Borrowers").
WHEREAS, on October 22, 1997, the Lender provided a certain credit
facility (the "Loan") to the Borrowers pursuant to the terms and conditions of
a certain Loan and Security Agreement dated as of October 22, 1997 (the "Loan
Agreement") in the principal amount of Three Million ($3,000,000.00) Dollars
as evidenced by a certain Line of Credit Note dated October 22, 1997 in the
principal amount of Two Million ($2,000,000.00) Dollars (the "Line of Credit
Note") and by a certain Term Note dated October 22, 1997 in the principal
amount of One Million ($1,000,000.00) Dollars (the "Term Note");
WHEREAS, the Borrowers have requested that the Lender increase the
Line of Credit Loan Maximum by five hundred thousand ($500,000) dollars;
WHEREAS, the Lender is willing to increase the Line of Credit Loan
Maximum subject to the terms and conditions set forth within this Amendment.
NOW, THEREFORE, in consideration of the recitals and the mutual
covenants contained herein, the parties hereto agree as follows:
1. All capitalized terms used herein and not otherwise defined herein
shall have the meanings ascribed to them pursuant to the Loan Agreement, Line
of Credit Note and Term Note. Notwithstanding anything to the contrary
contained in the Loan Agreement, the Line of Credit Note or the Term Note, the
terms of this Amendment shall control.
2. Section 1.1(x) of the Loan Agreement is hereby stricken and
replaced with the following:
"(x) "Line of Credit Loan Maximum" shall mean Two Million Five
Hundred Thousand ($2,500,000) Dollars."
3. The reference to the "Line of Credit Note" in Section 1.1(z)
of the Loan Agreement shall be deemed to refer to the Line of Credit
Note as amended and restated by that certain Restated Line of Credit Note
attached hereto as Exhibit A (the "Restated Line of Credit Note") and by this
reference made a part hereof as if fully set forth herein.
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4. The reference to "Loan Documents" in Section 1.1(aa) of the Loan
Agreement shall also be deemed to include this Amendment and the Restated Line
of Credit Note.
5. The Borrowers acknowledge and agree that: (a) as of March 27, 1998
the unpaid principal balance of the Line of Credit Note is One Million Seven
Hundred Thousand ($1,700,000.00) Dollars; (b) the obligation of the Borrower
to repay the Line of Credit Note is absolute and unconditional and is not
subject to any defense, counterclaim, set-off, right of recoupment, abatement
or other claim or determination, and (c) the Line of Credit Note is and shall
be governed by the terms and provisions of the Loan Agreement, and as set
forth in this Amendment.
6. The Lender and the Borrower hereby agree and consent to the terms
and provisions of this Amendment and the transactions contemplated hereby.
7. The Borrowers shall pay all of the Lender's costs and expenses
incurred in connection with the preparation, execution and delivery of this
Amendment, including, without limitation, reasonable legal fees and
disbursements of Lender's counsel.
8. Except as expressly otherwise provided herein, the terms of the
Loan Agreement shall remain in full force and effect and are incorporated
herein by reference. In the event of a conflict between the terms of this
Amendment and the Loan Agreement, the terms of this Amendment shall control.
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9. The Borrowers acknowledge that the Lender has no obligation to
make any further amendments to the Loan Agreement or any other agreement
executed in connection therewith, including but not limited to this Amendment
and the Line of Credit Note.
10. This Amendment shall be construed in accordance with, and shall
be governed by, the laws of the State of New Jersey. This Amendment shall be
binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns.
IN WITNESS WHEREOF, the undersigned have caused this First Amendment
to Loan and Security Agreement to be executed by their proper and duly
authorized officers and members as of the date first set forth above.
SUMMIT BANK
By: /s/ XXXXXXX XXXX
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XXXXXXX XXXX, Vice President
WITNESS: SEL-LEB MARKETING, INC.
/s/ XXXX XXXXXX By: /s/ XXX XXXXXX
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XXX XXXXXX, Executive Vice President
of Finance
WITNESS: ALES SIGNATURE LTD.
/s/ XXXX XXXXXX By: /s/ XXX XXXXXX
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XXX XXXXXX, Chief Financial Officer
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EXHIBIT A
RESTATED LINE OF CREDIT NOTE
Principal Amount: $2,500,000 Dated: April 1, 1998
FOR VALUE RECEIVED, SEL-LEB MARKETING, INC., a New York
corporation, having its principal place of business at 000 Xxxxx Xxxxxx,
Xxxxxxxx, Xxx Xxxxxx 00000 ("SEL-LEB") and ALES SIGNATURE LTD., a New York
corporation, having its principal place of business at 000 Xxxxx Xxxxxx,
Xxxxxxxx, Xxx Xxxxxx 00000 ("ALES") (SEL-LEB and ALES each a "Payor" and
collectively the "Payors"), jointly and severally, promise to pay to the order
of SUMMIT BANK, a state banking association organized under the laws of the
State of New Jersey (the "Bank" or "Holder"), its successors and assigns, at
its offices at 000 Xxxxx Xxxxxx, 0xx Xxxxx, Xxxxxxxxxx, Xxx Xxxxxx 00000, or
at such other address as Holder shall notify Payors in writing, the principal
sum of TWO MILLION FIVE HUNDRED THOUSAND ($2,500,000) DOLLARS, or so much
thereof as shall have been advanced to the Payors pursuant to the Loan
Agreement (as defined below), together with interest on the unpaid principal
balance, payable as provided below.
1. Subject to Loan Documents.
(a) The obligations of Payors under this Restated
Line of Credit Note ("Restated Note") are secured by the "Collateral", as such
term is defined in the Loan and Security Agreement entered into between the
Bank and Payors on October 22, 1997 ("Original Loan and Security Agreement"),
as amended by that certain First Amendment to Loan and Security Agreement
dated the date hereof ("First Amendment") (the Original Loan and Security
Agreement as amended by the First Amendment is hereinafter referred to as the
"Loan Agreement").
(b) The terms and provisions of the Loan Agreement
and all other documents and instruments referred to therein or executed and
delivered pursuant thereto are incorporated herein by reference (all of the
foregoing are hereinafter collectively referred to as the "Loan Documents").
2. Rate of Interest. The principal amount outstanding under
this Restated Note shall bear interest at the Bank's Prevailing Base Rate on a
floating basis. The Bank's Prevailing Base Rate of interest is the fluctuating
rate of interest established by the Bank from time to time whether or not such
rate shall be otherwise published. The Prevailing Base Rate is established for
the convenience of the Bank. The Prevailing Base Rate is a means of pricing
some loans to customers of the Bank. The Prevailing Base Rate is not tied to
any external rate of interest and does not necessarily reflect the lowest rate
of interest actually charged at any given time by the Bank to any particular
class or category of customers of the Bank. In the event that there shall be a
change in the Prevailing Base Rate, such change shall be effective on the date
of such change without
notice to Payors. Interest shall be computed on the basis of the actual number
of days elapsed over a period of 360 days.
3. Payment of Interest; Repayment of Principal. Principal
and interest shall be paid during the term of this Restated Note in the
following manner:
(a) Payors shall make consecutive monthly payments
of interest at the Bank's Prevailing Base Rate on a floating basis on the
principal balance outstanding under this Restated Note commencing on May 1,
1998, and continuing on the first (1st) day of each and every month thereafter
through and including May 1, 1998.
(b) Payors shall make a final payment of the entire
unpaid principal balance and accrued interest under this Restated Note and all
other costs, expenses and charges of any nature whatsoever due or assessable
hereunder, on May 31, 1998.
(c) In addition to the payments required to be made
as set forth in subparagraphs 3(a) and 3(b) above, pursuant to Section 5.20 of
the Loan Agreement, during each twelve month period, commencing on the date of
execution of the Loan Agreement, Payors shall reduce the principal amount
outstanding under this Restated Note to zero ($0) dollars for a period of
thirty (30) continuous and consecutive days.
(d) Upon the failure of Payors to make any payments
hereunder within ten (10) days of the date when due, Payors shall, to the
extent permitted by law, pay a late payment charge on all amounts overdue
equal to five (5%) percent of the overdue amount (but in no event less than
twenty five ($25.00) dollars nor more than two thousand five hundred
($2,500.00) dollars). Any such late charge assessed is immediately due and
payable.
4. Event of Default. Either of the following shall
constitute an Event of Default under this Restated Note:
(a) Failure to make any payments required hereunder
within five (5) days after the date when due; or
(b) The occurrence of any Event of Default (as
defined in the Loan Agreement) under any of the Loan Documents.
5. Acceleration Upon Default. Upon the occurrence of an
Event of Default, the entire unpaid principal balance of this Restated Note,
together with accrued interest, shall, at the option of Holder, immediately
become due and payable without notice or demand. Upon acceleration by Holder
as hereinabove provided, all amounts due hereunder, whether principal,
interest or otherwise, which have not been paid as of the date of such
acceleration, shall bear interest from such date to the date payment in full
is received by Holder at the rate of interest set forth in Paragraph
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2 of this Restated Note plus five (5%) percent per annum, instead of the rate
established in Paragraph 2 of this Restated Note.
6. Cumulative Remedies; Waivers by Payors. No remedy
referred to herein is intended to be exclusive, but each shall be cumulative
and in addition to any other remedy above or otherwise available to the Holder
under any of the Loan Documents, at law or in equity. Payors hereby waive
presentment, demand for payment, protest and notice of dishonor of this
Restated Note and all other notices and demands.
7. Non-Waiver. Failure to insist on the strict performance
of any or all of the terms, provisions, and covenants contained in this
Restated Note shall not be construed as a waiver or relinquishment of the
future performance of any term, provision or covenant herein.
8. Collection Fees. If suit is brought to collect this
Restated Note or any part hereof, Payors expressly agree to pay all of
Holder's reasonable costs and expenses of collection, including reasonable
attorneys' fees.
9. Prepayment. This Restated Note may be prepaid in full or
in part at any time without premium or penalty.
10. WAIVER OF JURY TRIAL. EACH PAYOR HEREBY WAIVES ALL
RIGHTS IT MAY HAVE TO A JURY TRIAL IN ANY AND ALL ACTIONS OR CONTROVERSIES
ARISING OUT OF OR IN CONNECTION WITH THIS RESTATED NOTE.
11. Usury. All provisions of this Restated Note and the Loan
Documents are expressly subject to the condition that in no event, whether by
reason of acceleration of maturity of the indebtedness evidenced hereby or
otherwise, shall the amount paid or agreed to be paid to the undersigned
hereunder and deemed interest under applicable law exceed the maximum rate of
interest on the unpaid principal balance of this Restated Note allowed by
applicable law (the "Maximum Allowable Rate"), which shall mean the law in
effect on the date of this Restated Note, except that if there is a change in
such law which results in a higher Maximum Allowable Rate being applicable to
this Restated Note, then this Restated Note shall be governed by such amended
law from and after its effective date. In the event that fulfillment of any
provision of this Restated Note or the Loan Documents results in the interest
rate hereunder being in excess of the Maximum Allowable Rate, the obligation
to be fulfilled shall automatically be reduced to eliminate such excess. If,
notwithstanding the foregoing, the Bank or any other holder of this Restated
Note receives an amount which under applicable law would cause the interest
rate hereunder to exceed the Maximum Allowable Rate, the portion thereof which
would be excessive shall automatically be applied to and deemed a prepayment
of the unpaid principal balance of this Restated Note and not a payment of
interest.
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12. Governing Law. This Restated Note shall be governed
by and construed in accordance with the laws of the State of New
Jersey.
13. Line of Credit Note. This Restated Line of Credit Note
dated as of April 1, 1998 is issued in replacement (but not in novation of the
debt evidenced thereby) of that certain Line of Credit Note of the Borrower
dated as of October 22, 1997.
IN WITNESS WHEREOF, each Payor has duly executed this
Restated Note the day and year first above written.
ATTEST: SEL-LEB MARKETING, INC.
By: /s/ XXXX XXXXXX By: /s/ XXX XXXXXX
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XXXX XXXXXX, Vice-Chairman XXX XXXXXX, Executive Vice
of the Board President of Finance
ATTEST: ALES SIGNATURE, LTD.
By: /s/ XXXX XXXXXX By: /s/ XXX XXXXXX
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XXXX XXXXXX, Secretary XXX XXXXXX, Chief Financial
Officer
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