EXHIBIT 10.13
AMENDMENT NO. 8 TO FINANCING AGREEMENTS
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April 17, 1997
Congress Financial Corporation
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Gentlemen:
Congress Financial Corporation ("Congress") and Eastco Industrial Safety
Corp. ("Eastco") have entered into certain financing arrangements pursuant to
the Accounts Financing Agreement [Security Agreement], dated as of October 1,
1991, between Congress and Eastco, as amended (the "Accounts Agreement"), the
Covenants Supplement to Accounts Financing Agreement [Security Agreement],
dated as of October 1, 1991, between Congress and Eastco, as amended (the
"Covenants Supplement") and all other agreements, documents and instruments
at any time executed and/or delivered in connection therewith or related
thereto (all of the foregoing, together with the Accounts Agreement and the
Covenants Supplement, as the same have hereto fore or contemporaneously been
or may be hereafter amended, modified, supplemented, extended, renewed,
restated or replaced, collectively, the "Financing Agreements").
Eastco and its wholly-owned subsidiary, Eastco Glove Technologies, Inc.
(Eastco Glove") have entered into the Asset Purchase Agreement, dated April
17, 1997, by and among PR Industries, Inc. ("PRI"), ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇▇▇▇, Eastco Glove and Eastco pursuant to which Eastco Glove will purchase
certain machinery, equipment and inventory of PRI (the "Asset Purchase").
Eastco and Eastco Glove have also entered into the Stock Exchange Agreement,
dated April 17, 1997, by and among ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, Eastco
Glove and Eastco pursuant to which Eastco Glove will acquire from ▇▇▇▇▇▇
▇▇▇▇▇▇ and ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ all of the issued and outstanding shares of the
capital stock of Protective Knitting, Inc. ("PKI") in exchange for 100,000
shares of common stock of Eastco (the "Stock Acquisition").
Eastco has requested that Congress (a) consent to the Asset Purchase,
(b) consent to the Stock Acquisition, (c) agree to make loans and other
financial accommodations to Eastco Glove as a borrower under the Financing
Agreements, including a term loan in the original principal amount of
$217,000, (d) agree to make PKI a guarantor of the obligations of Eastco to
Congress under the Financing Agreements, and (e) agree to certain amendments
to the Financing Agreements in connection with all of the foregoing.
Congress is willing to (a) consent to the Asset Purchase, (b) consent to
the Stock Acquisition, (c) agree to make such loans and other financial
accommodations to Eastco Glove as a borrower under the Financing Agreements,
including the term loan, (d) agree to make PKI a guarantor of the obligations
of Eastco to Congress under the Financing Agreement, and (e) agree to such
amendments, subject to the terms and conditions contained herein. By this
Amendment, Congress and Eastco desire and intend to evidence such consents,
agreements and amendments.
In consideration of the foregoing, and the respective agreements and
covenants contained herein, the parties hereto agree as follows:
1. Definitions.
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(a) Additional Definitions. As used in this Amendment,
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the following terms shall have the respective meanings given to them below
and the Accounts Agreement and the Covenants Supplement shall be deemed and
are hereby amended to include, in addition and not in limitation, the
following definitions:
(i) "Acquired Stock" shall mean all of the issued and
outstanding stock of PKI acquired by Eastco Glove pursuant to the Purchase
Agreements.
(ii) "Eastco" shall mean Eastco Industrial Safety Corp., a New
York corporation, and its successors and assigns.
(iii) "Eastco Glove" shall mean Eastco Glove Technologies,
Inc., a Minnesota corporation, and its successors and assigns.
(iv) "PKI" shall mean Protective Knitting, Inc., a Minnesota
corporation, and its successors and assigns.
(v) "Purchase Agreements" shall mean, individually and
collectively, the Asset Purchase Agreement, dated April 17, 1997, by and
among Eastco, Eastco Glove, PR Industries, Inc., ▇▇▇▇▇▇ ▇▇▇▇▇▇ and ▇▇▇▇▇▇▇
▇▇▇▇▇▇, the Stock exchange Agreement, dated April 17, 1997, by and among
Eastco, Eastco Glove, ▇▇▇▇▇▇ ▇▇▇▇▇▇ and ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ and all bills of sale,
assignment and assumption agreements and agreements of transfer as are
referred to therein and all side letters with respect thereto, and all
agreements, documents and instruments executed and/or delivered in connection
therewith, as all of the foregoing now exist or any hereafter be amended,
modified, supplemented, extended, renewed, restated or replaced.
(vi) "Purchased Assets" shall mean all of the assets and
properties acquired by Eastco Glove from PR Industries, Inc. pursuant to the
Purchase Agreements.
(vii) "Term Loan" shall mean the outstanding Obligations
owed to Congress by Eastco Glove consisting of the secured term loan made by
Congress to Eastco glove evidenced by the Term Note.
(viii) "Term Note" shall mean the Term Promissory Note,
dated of even date herewith, made by Eastco Glove payable to Congress in the
original principal amount of $217,000.
(b) Amendments to Definitions.
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(i) All references to the term "Borrower" in the Accounts
Agreement, the Covenants Supplement and any of the other Financing Agreements
shall be deemed and each such reference is hereby amended to mean,
individually and collectively, Eastco and Eastco Glove, and their respective
successors and assigns.
(ii) All references to the term "Financing Agreements" in the
Accounts Agreement, the Covenants Supplement and any of the other Financing
Agreements shall be deemed and each such reference is hereby amended to
include the Term Note, the Guarantee and Waiver by PKI in favor of Congress
of the obligations of Eastco and Eastco Glove to Congress and the General
Security Agreement by PKI in favor of Congress.
(iii) All references to the term "Obligations" in the
Accounts Agreement, the Covenants Supplement and any of the other Financing
Agreements shall be deemed and each such reference is hereby amended to
include the Term Loan.
(c) Interpretation. For purposes of this Amendment,
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unless otherwise defined herein, all terms used herein, shall have the
respective meanings assigned to such terms in the Financing Agreements.
2. Consent. Subject to the terms and conditions contained
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herein, Lender hereby confirms that it has no objection to (a) the purchase
by Eastco Glove of the Purchased Assets from PKI pursuant to the terms of the
Purchase Agreements (as in effect on the date hereof) and (b) the acquisition
by Eastco Glove of the Acquired Stock pursuant to the terms of the Purchase
Agreements (as in effect on the date hereof).
3. Term Loan. Subject to, and upon the terms and conditions
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contained herein, and in the other Financing Agreements, Congress agrees to
make the Term Loan to Eastco Glove on the date hereof in the original
principal amount of $217,000. The Term Loan is (a) evidenced by the Term
Note in the original principal amount of $217,000 executed and delivered by
Eastco Glove to Congress concurrently herewith, (b) to be repaid, together
with interest and other amounts payable thereunder, in accordance with the
provisions of the Term Note, the Accounts Agreement, the covenants
Supplement, this Amendment and the other Financing Agreements, and (c)
secured by all of the Collateral.
4. Amendment Fee. In consideration of the amendments set
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forth herein, Borrower may, on the date hereof, pay to Lender, or Lender at
its option shall charge the account of Borrower maintained by Lender, an
amendment fee in the amount of $4,400, which fee is fully earned as of the
date hereof.
5. Conditions Precedent. The effectiveness of the consent
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in Section 2 above and the other amendments to the Financing Agreements
provided for herein shall only be effective upon the satisfaction of each of
the following conditions precedent in a manner reasonably satisfactory to
Lender:
(a) Congress shall have received, in form and substance
satisfactory to Congress, evidence that the Purchase Agreements have been
duly executed and delivered by and to the appropriate parties thereto and the
transactions contemplated under the terms of the Purchase Agreements have
been consummated prior to or contemporaneously with the execution of this
Amendment;
(b) no Event of Default, or act, condition or event which with
notice or passage of time or both would constitute an Event of Default shall
exist or have occurred;
(c) Congress shall have received, in form and substance
satisfactory to Congress, an original of the Term Note, duly authorized,
executed and delivered by Eastco Glove;
(d) Congress shall have received true, correct and complete copies
of the Purchase Agreements;
(e) Congress shall have received, in form and substance
satisfactory to Congress, a Guarantee and Waiver, a General Security
Agreement and UCC-1 financing statements, duly authorized, executed and
delivered by PKI;
(f) Congress shall have received, in form and substance
satisfactory to Congress, an amended Exhibit 2.1 to the Covenants Supplement
listing all the subsidiaries of each of Eastco and Eastco Glove as of the
date hereof;
(g) Congress shall have received, in form and substance
satisfactory to Congress, a Landlord Agreement by PR Industries in favor of
Congress with respect to the location leased by Eastco Glove situated at ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇;
(h) Congress shall have received, in form and substance
satisfactory to Congress, evidence that all liens and encumbrances on the
Purchased Assets have been released by any such lien holders;
(i) Congress shall have received, in form and substance
satisfactory to Congress, copies of all documents and records with respect to
requisite corporate actions and proceedings which Congress may have requested
in connection with this Amendment and such documents where requested by
Congress or its counsel to be certified by appropriate corporate officers or
governmental authorities; and
(j) Congress shall have received, an original of this Amendment,
duly authorized, executed and delivered by Eastco, Eastco Glove, Puerto Rico
Safety Equipment Corporation, Puerto Rico Safety Corporation, Disposable
Safety Wear Inc., Safety Wear Corp. and PKI.
6. Representations and Warranties. Borrower hereby
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represents, warrants and covenants with and to Congress as follows, which
representations, warranties and covenants are continuing and shall survive
the execution and delivery thereof, and the truth and accuracy of, and
compliance with each, together with the representations, warranties and
covenants in the other Financing Agreements, being a continuing condition of
the making of the loans by Congress to Eastco and Eastco Glove.
(a) The Purchase Agreements and the transactions contemplated
hereunder have been duly executed, delivered and performed in accordance with
their terms by the respective parties thereto in all respects, including the
fulfillment (not merely the waiver, except as may be disclosed to Congress
and consented to in writing by Congress) of all conditions precedent set
forth therein and giving effect to the terms of the Purchase Agreements and
the assignments to be executed and delivered thereunder, Borrower acquired
and has good and marketable title to the Purchased Assets and Acquired Stock,
free and clear of all claims, liens, pledges and encumbrances of any kind,
except as permitted pursuant to the term of the Financing Agreements.
(b) All actions and proceedings, required by the Purchase
Agreements, applicable law or regulation (including, but not limited to,
compliance with the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Anti-Trust Improvements Act ;of 1976,
as amended) have been taken and the transactions required thereunder have
been duly and validly taken and consummated.
(c) No court of competent jurisdiction has issued any injunction,
restraining order or other order which prohibits consummation of the
transactions described in the Purchase Agreements and no governmental or
other action or proceeding has been threatened or commenced, seeking any
injunction, restraining order or other order which seeks to void or
otherwise modify the transactions described in the Purchase Agreements.
(d) Borrower has delivered, or cause to be delivered, to Congress,
true, correct and complete copies of the Purchase Agreements.
(e) No Event of Default exists on the date of this Amendment
(after giving effect to the amendments to the financing Agreements, made by
this Amendment.
(f) This Amendment has been duly executed and delivered by Eastco,
Eastco Glove and the other parties hereto and is in full force and effect as
of the date hereof and the agreements and obligations of the Eastco, Eastco
Glove and the other parties hereto contained herein constitute legal, valid
and binding obligations of Eastco, Eastco Glove and the parties hereto
enforceable against Eastco, Eastco Glove and the parties hereto in accordance
with its terms.
7. Effect of this Amendment. Except as specifically
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modified pursuant hereto, no other changes or modifications to the Financing
Agreements are intended or implied and in all other respects the Financing
Agreements are hereby specifically ratified, restated and confirmed by all
parties hereto as of the effective date hereof. To the extent of any
conflict between the terms of this Amendment and the other Financing
Agreements, the terms of this Amendment shall control.
8. Further Assurances. The parties hereto shall execute and
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deliver such additional documents and take such additional action as may be
requested by such parties to effectuate the provisions and purposes of this
Amendment.
9. Governing Law. The validity, construction and effect of
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this Agreement shall be governed by the laws of the State of New York.
10. Binding Effect. This Amendment shall be binding upon and
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inure to the benefit of each of the parties hereto and their respective
successors and assigns.
11. Counterparts. This Amendment may be executed in any
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number of counterparts, but all of such counterparts shall together
constitute but one and the same agreement. In making proof of this
Amendment, it shall not be necessary to produce or account for more than one
counterpart thereof signed by each of the parties hereto.
Very truly yours,
EASTCO INDUSTRIAL SAFETY CORP.
By: \s\ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇
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Title: Vice-President of Finance
EASTCO GLOVE TECHNOLOGIES, INC.
By: \s\ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇
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Title: Vice-President
ACKNOWLEDGED AND AGREED:
CONGRESS FINANCIAL CORPORATION
By: \s\ ▇▇▇▇▇▇ ▇▇▇▇▇
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Title: Senior Vice-President
CONSENT
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The undersigned guarantors hereby consent to the foregoing Amendment and
ratify and confirm the terms of their respective Guarantee and Waivers as
applicable to all present and future indebtedness, liabilities and
obligations of EASTCO INDUSTRIAL SAFETY CORP. and EASTCO GLOVE TECHNOLOGIES,
INC. to CONGRESS FINANCIAL CORPORATION including, without limitation, all
indebtedness, liabilities and obligations under the Financing Agreements as
amended pursuant to the foregoing.
PUERTO RICO SAFETY EQUIPMENT CORPORATION
By: \s\ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇
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Title: Vice President
PUERTO RICO SAFETY CORPORATION
By: \s\ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇
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Title: Vice President
DISPOSABLE SAFETY WEAR INC.
By: \s\ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇
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Title: Vice President
SAFETY WEAR CORP.
By: \s\ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇
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Title: Vice President
PROTECTIVE KNITTING, INC.
By: \s\ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇
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Title: Vice President