LOAN MODIFICATION AGREEMENT
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THIS LOAN MODIFICATION AGREEMENT (the "AMENDMENT") is made this 23rd day of
December, 1998, by and among TOTAL CONTAINMENT, INC., TCI ENVIRONMENT NV/SA,
RENE MORIN, INC., AMERICAN CONTAINMENT, INC., (collectively "BORROWERS"), and
FIRST UNION NATIONAL BANK, successor by merger to CoreStates Bank, N.A. (the
"BANK").
BACKGROUND
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A. Pursuant to the Amended and Restated Loan and Security Agreement among
Borrowers and Bank dated April 3, 1998 (the foregoing agreement, as modified and
amended hereby, shall be referred to as the "LOAN AGREEMENT"), Bank agreed to
(i) increase the WC Line to Ten Million Dollars ($10,000,000.00); (ii) extend
the term of the Acquisition Line; and (iii) amend and modify various terms of
existing loan documents.
B. Borrowers' obligations under the Loan Agreement and the Notes evidencing
the Loans are secured, inter alia, by the Collateral.
C. Capitalized terms not otherwise defined herein will have the meanings set
forth therefor in the Loan Agreement.
D. At Borrowers' request, Bank has agreed to enter into this Agreement, inter
alia, to (i) make LIBOR rate pricing available to Borrowers for advances under
the WC Line; (ii) ratify and confirm the respective obligations and liabilities
of Obligors to Bank under the Loan Documents, and (iii) reaffirm, ratify and
continue Bank's liens on, and security interests in, certain assets of
Borrowers.'
NOW, THEREFORE, in consideration of the foregoing premises and intending to
be legally bound hereby, the parties hereto agree as follows:
TERMS
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1. MODIFICATION OF CAPITALIZED TERMS. The following terms set forth in the
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Loan Agreement shall be modified as provided below:
(a) "LOAN DOCUMENTS" shall be amended to include the Loan Agreement, as amended
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and modified pursuant to the terms hereof and as the same may be modified,
revised, supplemented, replaced and/or amended from time to time.
(b) "WC LINE NOTE" means a certain Amended and Restated Line Note dated April
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3, 1998, given by Borrowers to Bank in the original principal amount of
$10,000,000.00, as amended by the Allonge dated of even date herewith.
2. GENERAL ACKNOWLEDGMENTS. Each Borrower hereby ratifies, confirms and
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acknowledges that:
(a) The statements contained in the foregoing Background are true and complete
in all material respects and that the Loan Documents are valid, binding and in
full force and effect as of the date hereof and fully enforceable against the
Borrowers and their respective assets in accordance with the terms thereof;
(b) Neither this Agreement nor any other agreement entered in connection
herewith or pursuant to the terms hereof shall be deemed or construed to be a
compromise, satisfaction, reinstatement, accord and satisfaction, novation or
release of any of the Loan Documents, or any rights or obligations thereunder,
or a waiver by Bank of any of its rights under the Loan Documents or at law or
in equity;
(c) All liens, security interests, rights and remedies granted to the Bank in
the Loan Documents are hereby renewed, confirmed and continued, and shall also
secure the performance by Borrowers of their obligations hereunder;
(d) None of them has any defense, set-off, counterclaim or challenge against
the payment of any sums owing under the Loan Documents, or the enforcement of
any of the terms or conditions thereof; and
(e) All references in the Loan Documents to the "Bank" shall mean, unless
otherwise provided herein or therein, First Union National Bank.
3. AMENDMENTS. The Loan Agreement shall be and is hereby amended as follows:
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(a) INTEREST ON THE WC LINE. SECTION 2.2 of the Loan Agreement is hereby
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amended to read in its entirety as follows:
"2.2 INTEREST ON THE WC LINE
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(a) Provided that no Event of Default has occurred and is
continuing, interest on the unpaid principal balance of the WC
Line will accrue from the date of advance until final payment
thereof at a rate or rates selected by Borrowers from one of the
two (2) interest rate options set forth below, subject to the
restrictions and in accordance with the procedures set forth
herein:
i. the Prime Rate; or
ii. the LIBOR Based Rate.
(b) LIBOR RATE OPTION. Provided that no Event of Default
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shall have occurred and is continuing, Borrowers may request, in
accordance with the procedures provided herein or established by
Bank from time to time, that cash advances
outstanding under the WC Line, or to be advanced under the WC
Line, accrue interest at the LIBOR Based Rate; provided, however,
that Borrowers shall at all times maintain a minimum of
$100,000.00 of the outstanding balance of the WC Line accruing at
the Prime Rate (the "Minimum Prime Rate Balance"). The Minimum
Prime Rate Balance can be waived by Bank at any time, in Bank's
sole discretion. To evidence such request, Borrowers shall
deliver to Bank a LIBOR Rate Notification. Upon delivery by
Borrowers to Bank of a LIBOR Rate Notification, that portion of
the principal balance outstanding under the WC Line identified in
such LIBOR Rate Notification shall accrue interest at the LIBOR
Based Rate as follows: (i) with respect to the principal amount
of any new cash advance under the WC Line, from the date of such
advance until the end of the Rate Period specified in such LIBOR
Rate Notification; and/or (ii) with respect to the principal
amount of any portion of the WC Line outstanding and accruing
interest at another LIBOR Rate at the time of the LIBOR Rate
Notification related to such principal amount, from the
expiration of the then current Rate Period related to such
principal amount until the end of the Rate Period specified in
such LIBOR Rate Notification; and/or (iii) with respect to all or
any portion of the principal amount of the WC Line outstanding
and accruing interest at the Prime Based Rate at the time of such
LIBOR Rate Notification, from the date set forth in such LIBOR
Rate Notification until the end of the Rate Period specified in
such LIBOR Rate Notification.
(c) APPLICATION OF RATES. Borrowers and Bank understand and
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agree that: (i) subject to the provisions of this Agreement, the
LIBOR Based Rate may apply simultaneously to different parts of
the outstanding principal balance of the WC Line, (ii) Borrowers
shall not make a request for a LIBOR Based Rate to apply to any
new or existing advance under the WC Line at any time when three
(3) previously requested LIBOR Based Rate requests are in effect
(regardless of whether any one or more of the LIBOR Based Rates
then in effect are actually the same rate or whether a new LIBOR
Based Rate would be the same rate as being charged under any of
the three (3) existing rates); (iii) no LIBOR Based Rate may be
elected or continued at any time when an Event of Default has
occurred and is continuing, but shall be automatically converted
to the Prime Rate or the Default Rate, if applicable; (iv) no
LIBOR Based Rate shall be available for a Rate Period which
extends beyond the Contract Period; (v) the LIBOR Based Rate may
apply simultaneously to various portions of the outstanding
principal balance of the WC Line for various Rate
Periods; (vi) the LIBOR Based Rate applicable to any portion of
the outstanding principal balance of the WC Line may be different
from the LIBOR Based Rate applicable to any other portion of the
outstanding principal balance of the WC Line; and (vii) each
advance under the WC Line accruing interest at the LIBOR Based
Rate must be in a minimum amount of Five Hundred Thousand Dollars
($500,000.00).
(d) FALL BACK RATE. After expiration of any Rate Period for a
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LIBOR Based Rate, any principal portion of the WC Line
corresponding to such Rate Period which has not been converted or
renewed in accordance with the terms of this Agreement shall
accrue interest automatically at the Prime Rate in effect from
time to time, from the date of expiration of such Rate Period
until paid in full, unless and until Borrowers request a
conversion to a LIBOR Based Rate in accordance with the terms of
this Agreement. With respect to any principal amount of the WC
Line (whether an advance of new funds or an already outstanding
amount), if Borrowers fail to properly request a LIBOR Based Rate
such principal amount shall be deemed to earn interest at the
Prime Rate.
(e) UNAVAILABILITY OF LIBOR. If, at any time, (i) Bank shall
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determine that, by reason of circumstances affecting foreign
exchange and interbank markets generally, LIBOR deposits in the
applicable amounts are not being offered to Bank; or (ii) a new
law, a revision in any existing law, or interpretation or
administration (including reversals) thereof by any government
authority, central bank or comparable agency shall make it
unlawful or impossible for Bank to honor its obligations under
this Agreement to provide the LIBOR Based Rate, then (A) Bank's
obligation to make or maintain a LIBOR-based rate shall be
suspended, and (B) all LIBOR-based rates shall immediately be
converted to the Prime Rate. The rate of interest charged under
the Loan Agreement following conversion to the Prime Rate shall
change automatically and immediately as of the date of any change
in the Prime Rate without notice to the Borrowers."
(b) PERFORMANCE PRICING FOR WC LINE. SECTION 2.3 of the Loan Agreement is
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hereby deleted and replaced with the following:
"2.3 PERFORMANCE PRICING FOR WC LINE. In the event Borrowers
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have a consolidated EBITDA of not less than $4,000,000 for the six-
month period ending June 30, 1999, the LIBOR Based Rate shall be
reduced for advances or outstanding balances which are the subject of
any future LIBOR Based Rate requests, within five business days after
Bank's receipt of Borrowers' financial statement reflecting compliance
with such EBITDA, subject to the provisions of SECTION 2.2, to a rate
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of interest equal to the applicable LIBOR plus 225 basis points.
(c) INTEREST PAYMENTS ON THE WC LINE. SECTION 3.2 of the Loan Agreement is
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hereby deleted and replaced with the following:
"3.2 INTEREST PAYMENTS ON THE WC LINE. Borrowers will pay
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interest on the principal balance of the WC Line monthly, in arrears,
on the first day of each calendar month commencing the first day of
the first calendar month following the date hereof and, as applicable,
at the end of each Rate Period and, with respect to any Rate Period in
excess of 90 days, an interest payment shall also be due on the 90th
day after the date of the applicable advance."
(d) INDEMNITY FOR LIBOR PORTION. The following is hereby added to and made a
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part of the Loan Agreement as SECTION 3.16 thereof:
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"3.16 INDEMNIFICATION. Borrowers shall indemnify Bank and any
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affiliate of Bank against any loss or expense incurred in
employing deposits as a consequence of any payment of sums
outstanding under the WC Line accruing interest at a LIBOR Base
Rate on a date other than the last day of the applicable Rate
Period ("INDEMNIFIED LOSS OR EXPENSE"). The amount of such
Indemnified Loss or Expense shall be determined, in Bank's sole
discretion, based upon the assumption that Bank funded 100% of
that portion of the WC Line to which the LIBOR Based Rate applies
in the applicable London interbank market."
(e) ADDITIONAL DEFINITIONS. The following definitions are hereby added to and
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made a part of the Loan Agreement as the SECTIONS described below:
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"14.19A "GOOD BUSINESS DAY" means any Business Day when banks in
London, England, Philadelphia, Pennsylvania and Charlotte, North
Carolina are open for business.
14.20A "LIBOR" means, with respect to each day during each Rate
Period, the rate for U.S. dollar deposits with a maturity comparable
to such Rate Period as reported on Telerate page 3750 as of 11:00
a.m., London time, on the second London business day before the
relevant Rate Period begins (or if not so reported, then as determined
by the Lender from another recognized source or interbank quotation),
adjusted for reserves by dividing that rate by 1.00 minus the LIBOR
Reserve. LIBOR shall be rounded to the next higher 1/100 of 1%.
14.20B "LIBOR BASED RATE" means a rate of interest equal to the
applicable LIBOR plus 250 basis points. The LIBOR Based Rate shall
remain in effect, subject to the provisions hereof, for the entire
Rate Period for the WC Line advance for which it is determined.
14.20C "LIBOR RATE NOTIFICATION" means an irrevocable written
notice requesting a LIBOR Based Rate which must be provided to Bank
prior to 11:00 a.m. Philadelphia time on a Business Day which is at
least two (2) Good Business Days prior to the date on which such rate
is requested to take effect, specifying:
(1) The principal amount which is to accrue interest at such
rate;
(2) The date on which such rate is to take effect;
(3) Whether such principal amount is a new advance, a
conversion from another interest rate, a renewal of another
interest rate or a combination thereof; and
(4) The Rate Period.
14.20D "LIBOR RESERVE" means the maximum percentage reserve
requirement (rounded to the next higher 1/100 of 1% and expressed as a
decimal) in effect for any day during the applicable rate under the
Federal Reserve Board's Regulation D for Eurocurrency liabilities as
defined therein.
14.30A "RATE PERIOD" shall mean for any portion of the WC Line
for which Borrower elects a LIBOR Based Rate, the period of time for
which such rate shall apply to such principal portions. The Rate
Period for a LIBOR Based Rate shall be for periods of 30, 60, 90, or
180 days. If any Rate Period would otherwise end on a day which is
not a Business Day, that Rate Period shall be extended to the next
succeeding Business Day unless the result of such extension would be
to carry such Rate Period into another calendar month, in which event
such Rate Period shall end on the immediately preceding Business Day;
and any Rate Period that begins on the last Business Day of a calendar
month (or on a day for which there is no numerically corresponding day
in the calendar month at the end of such Rate Period) shall end on the
last Business Day of a calendar month."
4. CONDITIONS. Without in any manner limiting the other requirements
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contained herein, Bank's agreement to amend the Loan Documents in accordance
with this Amendment, as determined by Bank, shall be subject to each of the
following:
(a) Delivery to Bank, in form and content acceptable to Bank, of an Allonge to
the WC Line Note evidencing the interest rate options made available
herein.
(b) Delivery of evidence of Borrowers' authorization to execute and deliver
this Agreement; and
(c) Delivery of such other searches, corporate records, incumbency
certificates, insurance policies, documents, agreements, statements and
information as Bank may reasonably require to consummate the transactions
contemplated hereby.
5. REPRESENTATIONS AND WARRANTIES. Borrowers hereby represent and warrant to
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Bank, which representations and warranties shall survive until all Bank
Indebtedness and all other obligations of Borrowers to Bank are paid and
satisfied in full, as follows:
(a) Except as previously disclosed to Bank in writing, all representations and
warranties of Borrowers set forth in the Loan Documents are true and
complete as of the date hereof.
(b) No condition or event exists or has occurred which would constitute an
Event of Default under the Loan Documents (or would, upon the giving of
notice or the passage of time, or both constitute an event of default).
(c) The execution and delivery of this Amendment by Borrowers and all documents
and agreements to be executed and delivered pursuant to the terms hereof;
(i) has been duly authorized by all requisite corporate action by
Borrowers; (ii) will not conflict with or result in the breach of or
constitute a default (upon the passage of time, delivery of notice or both)
under Borrowers' Articles of Incorporation or By-Laws or any applicable
statute, law, rule, regulation or ordinance or any indenture, mortgage,
loan or other document or agreement to which any Borrower is a party or by
which any of them is bound or affected; or (iii) will not result in the
creation or imposition of any lien, charge or encumbrance of any nature
whatsoever upon any of the property or assets of Borrowers, except liens in
favor of the Bank or as permitted hereunder or under the Loan Documents.
6. EVENT OF DEFAULT. Borrowers covenant and agree that Borrowers' failure to
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comply with any of the terms of this Amendment or any other instrument or
agreement executed in connection with or pursuant to the terms of this
Amendment, shall constitute an Event of Default under the Loan Agreement and
each of the other Loan Documents.
7. CERTAIN FEES, COSTS, EXPENSES AND EXPENDITURES. Borrowers will pay all of
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the Bank's reasonable expenses in connection with the review, preparation,
negotiation, documentation and closing of this Amendment and the consummation of
the transactions
contemplated hereunder, including without limitation, fees, disbursements,
expenses, appraisal costs and fees and expenses of counsel retained by Bank and
all fees related to filings, recording of documents and searches, whether or not
the transactions contemplated hereunder are consummated. Nothing contained
herein shall limit in any manner whatsoever Bank's right to reimbursement under
any of the Loan Documents.
8. INCONSISTENCIES. TO THE EXTENT OF ANY INCONSISTENCY BETWEEN THE TERMS AND
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CONDITIONS OF THIS AMENDMENT AND THE TERMS AND CONDITIONS OF THE LOAN DOCUMENTS,
THE TERMS AND CONDITIONS OF THIS AMENDMENT SHALL PREVAIL. All terms and
conditions of the Loan Documents not inconsistent herewith shall remain in full
force and effect and are hereby ratified and confirmed by Borrowers.
9. BINDING EFFECT. This Amendment and all rights and powers granted hereby
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will bind and inure to the benefit of the parties hereto and their respective
permitted successors and assigns.
10. SEVERABILITY. The provisions of this Amendment and all other Loan
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Documents are deemed to be severable, and the invalidity or unenforceability of
any provision shall not affect or impair the remaining provisions which shall
continue in full force and effect.
11. NO THIRD PARTY BENEFICIARIES. The rights and benefits of this Amendment
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and the Loan Documents shall not inure to the benefit of any third party.
12. MODIFICATIONS. No modification of this Amendment or any of the Loan
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Documents shall be binding or enforceable unless in writing and signed by or on
behalf of the party against whom enforcement is sought.
13. INTERPRETATION. All references herein and in any of the Loan Documents to
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the Loan Amendment shall be deemed to refer to the Loan Agreement as amended
hereby.
14. LAW GOVERNING. This Amendment has been made, executed and delivered in the
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Commonwealth of Pennsylvania and will be construed in accordance with and
governed by the laws of such Commonwealth.
15. EXHIBITS AND SCHEDULES. All exhibits and schedules attached hereto are
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hereby made a part of this Amendment.
16. HEADINGS. The headings of the Articles, Sections, paragraphs and clauses
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of this Amendment are inserted for convenience only and shall not be deemed to
constitute a part of this Amendment.
17. COUNTERPARTS. This Amendment may be executed in any number of
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counterparts, all of which taken together shall constitute one and the same
instrument, and any of the parties hereto may execute this Amendment by signing
any such counterpart.
18. ACKNOWLEDGMENT OF CONFESSION OF JUDGMENT PROVISIONS. EACH BORROWER
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ACKNOWLEDGES AND AGREES THAT THE NOTES AND THE LOAN DOCUMENTS CONTAIN PROVISIONS
WHEREBY BANK MAY ENTER JUDGMENT BY CONFESSION AGAINST BORROWERS. BEING FULLY
AWARE OF THEIR RESPECTIVE RIGHTS TO PRIOR NOTICE AND HEARING ON THE QUESTION OF
THE VALIDITY OF ANY CLAIMS THAT MAY BE ASSERTED AGAINST THEM BY BANK UNDER THE
NOTES AND LOAN DOCUMENTS, BEFORE JUDGMENT CAN BE ENTERED, BORROWERS HEREBY WAIVE
THESE RIGHTS AND AGREE AND CONSENT TO BANK ENTERING JUDGMENT AGAINST BORROWERS
BY CONFESSION. ANY PROVISION IN A CONFESSION OF JUDGMENT IN ANY OF THE LOAN
DOCUMENTS FOR AN ATTORNEY'S COLLECTION COMMISSION SHALL IN NO WAY LIMIT
BORROWERS' LIABILITY TO REIMBURSE BANK FOR ALL LEGAL FEES ACTUALLY INCURRED BY
BANK, EVEN IF SUCH FEES ARE IN EXCESS OF THE ATTORNEY'S COLLECTION COMMISSION
PROVIDED FOR IN SUCH CONFESSION OF JUDGMENT. '
1.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
as of the date first above written.
TOTAL CONTAINMENT, INC.
By: /s/ Pierre Desjardins
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Pierre Desjardins, President
TCI ENVIRONMENT NV/SA
By: /s/ Jeffrey Boehmer
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Jeffrey Boehmer, Secretary
RENE MORIN, INC.
By: /s/ Jeffrey Boehmer
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Jeffrey Boehmer, Secretary
AMERICAN CONTAINMENT, INC.
By: /s/ Jeffrey Boehmer
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Jeffrey Boehmer, Secretary
FIRST UNION NATIONAL BANK,
successor by merger to CoreStates Bank, N.A.
By: /s/ Charles O'Donnell
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Charles O'Donnell, Vice President
ALLONGE
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THIS ALLONGE is made this 23 day of December, 1998, by and between TOTAL
CONTAINMENT, INC., TCI ENVIRONMENT NV/SA, RENE MORIN, INC., AMERICAN
CONTAINMENT, INC., (collectively "BORROWERS"), and FIRST UNION NATIONAL BANK,
successor by merger to CoreStates Bank, N.A. (the "BANK").
BACKGROUND
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A. By an Amended and Restated Loan and Security Agreement dated April 3,
1998, by and among Borrowers and Bank, as amended ( the "LOAN AGREEMENT"), Bank
agreed, inter alia, to increase the WC Line to Ten Million Dollars
($10,000,000.00), as evidenced by Borrowers' Amended and Restated Line Note
dated April 3, 1998 (the "NOTE") in the original principal amount of Ten Million
Dollars ($10,000,000.00).
B. By a Loan Modification Agreement of even date herewith by and among
Borrowers and Bank (the "MODIFICATION"), Bank agreed, inter alia, to provide
certain interest rate options for sums outstanding under the Note.
D. Borrowers and Bank desire that the terms of the Note be modified to
reflect the terms and conditions of the Modification.
NOW, THEREFORE, in consideration of the mutual benefits inuring to
Borrowers and Bank, and intending to be legally bound hereby, it is agreed that
the Note is hereby modified as described below.
TERMS
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1. NOTE. The Note, as modified hereby, is the "WC LINE NOTE," as defined in
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the Loan Agreement.
2. AMENDMENTS TO NOTE.
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a. SECTION 2 of the Note is hereby amended to be as follows:
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"2. INTEREST RATE. Interest on the unpaid principal balance
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hereof will accrue interest as provided in SECTION 2.2 of the Loan
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Agreement, as amended."
b. SECTION 6 of the Note is hereby amended to be as follows:
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"6. INTEREST PAYMENTS. Interest which accrues on the
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outstanding principal balance hereof shall be due and payable as
provided in Section 3.2 of the Loan Agreement, as amended."
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3. EFFECT OF MODIFICATION. All other provisions of the Note, and all other
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agreements and instruments executed in connection therewith, shall not be
modified hereby, except as expressly set forth below, and this Allonge shall not
be construed as a waiver of any of Bank's rights under the Note as heretofore
existing or as hereafter modified by this Allonge.
4. CONFIRMATION OF DEBT. Borrowers hereby further confirm and ratify the Note,
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as modified hereby, and acknowledge that they have no defense, setoff,
counterclaim, or challenge against the payment of all sums as set forth in the
Note, as modified hereby, the enforcement of any of the terms thereof, or the
validity of the provisions hereof.
5. SINGLE INSTRUMENT. Borrowers hereby direct Bank to affix this Allonge to
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the Note, whereupon the Note and this Allonge will become and constitute a
single instrument.
IN WITNESS WHEREOF, Bank and Borrowers have executed this Allonge under
seal on the date first above written.
TOTAL CONTAINMENT, INC.
By: /s/ Pierre Desjardins
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Pierre Desjardins, President
TCI ENVIRONMENT NV/SA
By: /s/ Jeffrey Boehmer
-------------------
Jeffrey Boehmer, Secretary
RENE MORIN, INC.
By: /s/ Jeffrey Boehmer
-------------------
Jeffrey Boehmer, Secretary
AMERICAN CONTAINMENT, INC.
By: /s/ Jeffrey Boehmer
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Jeffrey Boehmer, Secretary
[signatures continued on following page]
[signatures continued from previous page]
FIRST UNION NATIONAL BANK,
successor by merger to
CoreStates Bank, N.A.
2
By: /s/ Charles O'Donnell
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Charles O'Donnell, Vice President
3