printer-friendly

Sample Business Contracts

Loan Documents [Amendment No. 1] - PNC Bank NA, Inmark Enterprises Inc., U.S. Concepts Inc., Inmark Services Inc. and Optimum Group Inc.

Sponsored Links


                        FIRST AMENDMENT TO LOAN DOCUMENTS

         THIS FIRST AMENDMENT TO LOAN AGREEMENT;  SECURITY AGREEMENT; and PLEDGE
AGREEMENT  (this  "Amendment")  is made as of  December  29, 1998 among PNC Bank
National  Association  ("Lender")  having offices at One Garret  Mountain Plaza,
West  Paterson,   New  Jersey  07424,  Inmark  Enterprises,   Inc.,  a  Delaware
corporation  ("Enterprises"),  U.S.  Concepts,  Inc.,  a  Delaware  corporation,
("USC"), Inmark Services, Inc. a Delaware corporation ("Services"),  and Optimum
Group, Inc., an Ohio corporation (formerly, OG Acquisition Corp.) ("New OGI" and
together with Services and USC, the "Borrower"). Enterprises, USC, Services, and
New OGI are collectively referred to herein as the "Inmark Group".

                             PRELIMINARY STATEMENT:

         A.  Lender,  Enterprises,  Services  and  New OGI  entered  into a Loan
Agreement dated as of March 31, 1998 (as amended hereby and as further  amended,
supplemented or otherwise modified from time to time, the "Agreement"), pursuant
to which,  among other  things,  Lender  agreed to make (i)  Revolving  Loans to
Services  and  New  OGI in the  aggregate  principal  amount  at  any  one  time
outstanding  not to exceed  $5,000,000  and (ii) a term loan to Services and New
OGI in the principal amount of $5,000,000, all upon the terms and subject to the
conditions set forth therein.

         B. Enterprises,  Services and New OGI entered into a Security Agreement
in favor of Lender dated as of March 31, 1998 (as amended  hereby and as further
amended,  supplemented  or otherwise  modified from time to time,  the "Security
Agreement").

         C. Enterprises, Services and New OGI entered into a Pledge Agreement in
favor of Lender  dated as of March 31,  1998 (as  amended  hereby and as further
amended,  supplemented  or  otherwise  modified  from time to time,  the "Pledge
Agreement").

         D.  Enterprises  entered into a Guaranty in favor of Lender dated as of
March 31,  1998 (as  amended  hereby and as  further  amended,  supplemented  or
otherwise modified from time to time, the "Guaranty").

         E.  Enterprises,  Services and New OGI have each  requested that Lender
consent to the  transaction  (the "Proposed  Transaction")  contemplated  by the
Asset Purchase  Agreement  among U.S.  Concepts,  Inc., a New York  corporation,
Brian  Murphy,  an  individual,   ("Murphy"),  USC  and  Enterprises  (the  "USC
Acquisition  Agreement"),   including,  the  purchase  and  acquisition  of  the
Purchased  Assets and the assumption of the Assumed  Liabilities  (as such terms
are  defined  in the USC  Acquisition  Agreement),  and waive any  breach by the
Inmark  Group  of  Section  5.1 of  the  Agreement  by  reason  of the  Proposed
Transaction (the "Waiver").

         F. Lender has agreed to the Waiver upon the  condition,  among  others,
that each member of the Inmark Group executes and delivers this Amendment.



<PAGE>



                                   AGREEMENT:

1.  Definitions.  Capitalized  terms used in this Amendment  shall have the same
meanings given them in the Agreement, unless otherwise defined herein.

2.  Addition of USC as Borrower and Grantor.  USC hereby  becomes and now is for
all purposes a "Borrower"  or  "Grantor," as the case may be, under (and a party
to) the Agreement,  the Security  Agreement,  the Pledge Agreement and all other
Loan Documents  (with all the obligations of a Borrower and Grantor in and under
the Loan Documents), as fully as if USC executed and delivered the Agreement and
the other Loan Documents as a Borrower on March 31, 1998 and the term "Borrower"
and "Grantor" in the Agreement  and the other Loan  Documents  shall now include
USC as well as Services  and New OGI.  Without  limiting the  generality  of the
preceding   sentences,   (a)  USC   understands  and  agrees  that  all  of  the
representations  and warranties in the Agreement,  the Security  Agreement,  the
Pledge Agreement and the other Loan Documents will be deemed repeated for USC at
the date hereof and at the time that each Revolving Loan is made; and (b) USC is
bound by  (including  without  limitation  that it fully  adopts  and  agrees to
perform) all of the covenants,  other agreements and other provisions binding on
the Borrower contained in the Loan Documents,  including, without limitation, to
repay money borrowed by the Borrower.

3. Grant of Collateral  under Security  Agreement.  As security for the full and
punctual payment and performance  when due (whether at the stated  maturity,  by
acceleration or otherwise) of all of the  Obligations,  whether  pursuant to any
Loan Document or otherwise, USC hereby pledges,  transfers and assigns to Lender
(and its successors  and assigns),  and grants to Lender (and its successors and
assigns) security  interests in (a) all of the Collateral now or hereafter owned
by USC (or to which it has any right,  title or interest),  wherever located and
whether now existing or hereafter created,  and (b) all accessions and additions
thereto,  replacements  and  substitutions  therefor,  and proceeds and products
thereof.  (The security  interests  granted  hereby,  and all remedies and other
rights  stated or  referred  to in the  Security  Agreement  or any  other  Loan
Document,  shall  continue  in full force and effect  until the later of (i) the
termination  of the  Revolving  Line of  Credit,  or (ii) the  full,  final  and
indefeasible payment and performance of the Obligations.

4. Grant of Security Collateral under Pledge Agreement. As security for the full
and punctual  payment and performance  when due (whether at the stated maturity,
by acceleration or otherwise) of all of the Obligations, whether pursuant to any
Loan Document or otherwise, USC hereby pledges,  transfers and assigns to Lender
(and its successors  and assigns),  and grants to Lender (and its successors and
assigns)  security  interests  in all of its Security  Collateral.  The security
interests  granted hereby,  and all remedies and other rights stated or referred
to in the Pledge  Agreement or any other Loan  Document,  shall continue in full
force and effect until the later of (i) the termination of the Revolving Line of
Credit, or (ii) the full, final and indefeasible  payment and performance of the
Obligations.

5. Revised Schedules. To take into account the addition of USC as a Borrower and
Grantor,  the purchase of the Purchased  Assets,  the  assumption of the Assumed
Liabilities  and the other s transactions  contemplated  by the USC  Acquisition
Agreement,  the parties hereby amend the Agreement,  the Security  Agreement and
Pledge  Agreement by replacing  each of the  Schedules  thereto with the revised
Schedules  set forth in Appendix  A-1,  Appendix  A-2 and  Appendix  A-3 to this
Amendment (collectively, the "Revised Schedules").

                                        2

<PAGE>



6. Consent of Other Member of Inmark Group.  Each of  Enterprises,  Services and
New OGI hereby consents to the addition of USC as a Borrower under the Agreement
and the other Loan Document and acknowledges and agrees that such addition shall
not impair,  reduce or otherwise affect the obligations of any of them under the
Agreement or any other Loan Document.

7.       Waivers and Consents.

         a.  The  Lender   hereby   grants  a  waiver  of  the  Inmark   Group's
non-compliance  with  Section 5.1 of the  Agreement  and of the Event of Default
that would otherwise  result from a violation of that Section,  solely by reason
of  the  Proposed  Transaction.  Subject  to  the  accuracy,  non-violation  and
satisfaction  of  each  of  the  representations,   warranties,  covenants,  and
conditions set forth herein, Lender hereby consents to the Proposed Transaction.
Each member of the Inmark Group agrees that it will hereafter  comply fully with
this and all other  provisions  of the  Agreement  and all other Loan  Documents
which remain in full force and effect.

         b. The Lender  hereby  consents  to the change of the  location  of the
chief executive  office/chief place of business of Enterprises and Services from
One Plaza Road, Greenvale,  New York to 415 Northern Boulevard,  Great Neck, New
York and waives any prior  breaches  of section  4.2 of the  Security  Agreement
directly related to such change without 30 calendar days prior written notice to
Lender;  provided,  that,  without  limiting  the  generality  of  the  Security
Agreement,  at the sole expense of the Inmark Group,  the Inmark Group agrees to
execute and  deliver to Lender  amendments  to  financing  statements  and other
similar public filings to reflect such change of location.

         c. The Lender hereby  consents to the guarantee by  Enterprises  of the
obligations  of USC under that certain  Agreement of Sublease  dated November 8,
1995 between Ketchum Communications, Inc. and UCS (as assignee of U.S. Concepts,
Inc., a New York corporation).

         d. Except as  expressly  described  above,  the  foregoing  waivers and
consents shall not constitute (i) a modification  or an alteration of the terms,
conditions  or covenants of the  Agreement or any other Loan  Document or (ii) a
waiver,  release or limitation  upon the Lender's  exercise of any of its rights
and remedies thereunder,  which are hereby expressly reserved. This waiver shall
not relieve or release any member of the Inmark  Group or any  guarantor  in any
way from any of its  respective  duties,  obligations,  covenants or  agreements
under the Agreement or the other Loan  Documents or from the  consequence of any
Event of Default thereunder,  except as expressly described above. These waivers
and  consents  shall not  obligate  the Lender,  or be  construed to require the
Lender,  to waive any other Events of Default or defaults,  whether now existing
or which may occur after the date of this Amendment.

8.  Certain  Representations  and  Warranties.  In order to induce the Lender to
enter into this Amendment, each member of the Inmark Group hereby represents and
warrants to the Lender that after giving effect to the transactions contemplated
by the Proposed Transaction:

         a. no Event of Default,  or any event which, with the giving of notice,
the lapse of time, or both,  or the  occurrence  of any other  condition,  would
constitute an Event of Default, has occurred and is continuing;

         b. the Agreement, the Security Agreement, the Pledge Agreement and each
 of the


                                        3

<PAGE>



other Loan Documents (as amended by this Amendment), after giving effect to this
Amendment,  continue to be in full force and effect and to constitute the legal,
valid and binding obligations of each member of the Inmark Group that is a party
thereto,  enforceable against each member of the Inmark Group in accordance with
their respective terms; and

         c. the representations and warranties made by each member of the Inmark
Group in or  pursuant  to the  Agreement,  the  Security  Agreement,  the Pledge
Agreement  or any  other  Loan  Document  (in  each  case  as  amended  by  this
Amendment), or which are contained in any certificate,  document or financial or
other  statement  furnished  at any time  under  or in  connection  herewith  or
therewith,  are each true and correct in on and as of the date hereof, as though
made on and as of such date.

         d. Appendix B to this Amendment  contains a true,  complete and correct
copy of the  unaudited  pro  forma  balance  sheets  of the  Inmark  Group as at
September 30, 1998; (b) such pro forma balance  sheets fairly  presents on a pro
forma basis the  financial  condition  of the Inmark Group as of that date after
giving effect to the Proposed Transaction; and (c) such pro forma balance sheets
were prepared in accordance with GAAP.

9.       Certain Acknowledgments.

         The  parties  acknowledge  and  agree  that the term  "Loan  Documents"
includes  any  Documents  relating  to any  derivative,  swap or  other  similar
transactions entered into by any member of the Inmark Group in relation to or in
connection  with  the  other  Loan  Documents,  and  correspondingly,  the  term
"Obligations"  as used in the Loan  Documents,  includes all the liabilities and
obligations  under such  Documents  relating to such  derivative,  swap or other
similar transactions.

10.  Conditions to Effectiveness of this Amendment.  This Amendment shall become
effective upon the satisfaction of the following conditions:

         a. Notes. In exchange for the Revolving Note and the Term Note,  Lender
shall have  received an Amended and Restated  Revolving  Note and an Amended and
Restated  Term Note,  each  payable to the order of  Lender,  conforming  to the
requirements  hereof and executed by (a) duly authorized  officer(s) of Borrower
(including USC).

         b. Certain Other Loan Documents. Lender shall have received each of the
following,  duly  executed  and  delivered  by the parties  thereto  (other than
Lender) and each of which shall be in full force and effect:

                  i. the letter  notifying the account debtors of each member of
                  the Inmark Group of the  assignment of the Accounts to Lender,
                  substantially  in the form of Exhibit K to the Agreement (with
                  the addition of USC as a  signatory)  that may be delivered by
                  Lender after an Event of Default.

         c. Legal  Opinion of  Counsel  to the  Inmark  Group - Loan  Agreement.
Lender  shall have  received a favorable  opinion,  dated the Closing  Date,  of
Kronish, Lieb, Weiner & Hellman LLP, counsel to the Inmark Group,  substantially
in the form of Appendix C to this Amendment.

                                        4

<PAGE>



         d.  Legal  Opinion  of  Counsel  to  the  Inmark  Group  -  Acquisition
Agreement.  Lender shall have  received a favorable  opinion,  dated the Closing
Date,  of Kronish,  Lieb,  Weiner & Hellman  LLP,  counsel to the Inmark  Group,
substantially in the form of Exhibit F to the USC Acquisition Agreement.

         e. Legal  Opinion of Seller  Counsel -  Acquisition  Agreement.  Lender
shall have received a favorable  opinion,  dated the date of this Agreement,  of
Corbin  Silverman & Sanseverino LLP, counsel to Seller under the USC Acquisition
Agreement,  substantially  in the  form  of  Exhibit  D to the  USC  Acquisition
Agreement  or a letter from such  counsel  stating  that Lender may rely on such
opinion in form reasonably satisfactory to Lender.

         f. Acquisition  Agreement  Closing;  etc. (i) The Proposed  Transaction
shall have been consummated without any amendment, modification or waiver of any
of the  provisions of the USC  Acquisition  Agreement  (other than those made to
comply with the Loan  Documents),  (ii) the Inmark Group shall have delivered to
Lender a true,  complete and correct copy of the USC  Acquisition  Agreement and
each  of the  Documents  executed  and  delivered  by  the  parties  thereto  in
connection therewith, (iii) each of the parties to the USC Acquisition Agreement
shall  have  executed  and  delivered  to  Lender a  consent  to the  collateral
assignment  of  the  USC  Acquisition   Agreement  for  the  benefit  of  Lender
substantially in the form of Exhibit N to the Agreement (but taking into account
the conforming  changes arising from this Amendment),  and (iv) the Inmark Group
shall have delivered to Lender evidence that the indebtedness to Chase Manhattan
Bank  referenced  in  section  2.3 of the USC  Acquisition  Agreement  has  been
paid-off and terminated and the security interests granted to the lender parties
to the Seller's Loans have been terminated and released.

         g. Fees and Expenses.  The Inmark Group shall have paid all expenses of
Lender,  including,  without limitation,  reasonable counsel fees, in connection
with the  preparation,  execution  and delivery of this  Amendment and all other
documents and  instruments  to be executed and delivered  pursuant  hereto or in
connection herewith, and the transactions contemplated hereby.

         h. Certificate of Secretary of Assistant  Secretary.  Lender shall have
received a  certificate  from the  Secretary or an  Assistant  Secretary of each
member of the Inmark Group,  dated the Closing Date,  certifying (as applicable)
that or as to (i) attached to each such certificate is a (A) true,  complete and
correct copy of (I) the  resolutions of the Board of Directors of such member of
the Inmark Group authorizing among other things (x) the execution,  delivery and
performance  of this Amendment (y) in the case of USC, the granting by it of the
Liens provided for in the Loan Documents,  and (z) in the case of Parent and USC
authorizing the Acquisition Agreement and the transactions  contemplated thereby
and (B) the By-Laws of USC and (ii) such  resolutions  and By-Laws have not been
amended,  modified,  revoked  or  rescinded  since the dates on which  they were
adopted and (iii) the  incumbency  and  signature of each  officer  signing this
Amendment and any other  certificate or other document to be delivered  pursuant
hereto (and another  officer of such member of the Inmark Group shall certify as
to the incumbency of such Secretary or Assistant Secretary).

         i. Organizational Documents;  Good Standing Certificates.  Lender shall
have  received  from  USC (i) a  certificate  of the  Secretary  of State of the
jurisdiction of its  incorporation,  with an attached copy of the Certificate of
Incorporation  (or  Articles  of  Incorporation)  of USC and (ii) good  standing
certificates  (or  comparable  certificates)  from each Secretary of State (or a
similar official) of each jurisdiction where it is qualified to do business.


                                        5

<PAGE>



         j.  Consents,  Licenses,  Approvals,  etc.  Lender shall have  received
copies of all consents,  licenses and approvals,  if any, required in connection
with the execution, delivery and performance by each member of the Inmark Group,
and the validity and  enforceability  against each member of the Inmark Group of
this Amendment, and such consents, licenses and approvals shall be in full force
and effect.

         k. Financial  Information;  Solvency.  Lender shall have received (i) a
copy of each of the  financial  statements  referred  to in section  8.d of this
Amendment,  and (ii) a certification  by the Chief  Financial  Officer of Parent
substantially in the form of Exhibit O to the Agreement (but taking into account
the Proposed Transactions)  regarding such financial statements and the Solvency
of the Inmark Group

         l.  Recordings and Filings;  Other Actions.  Any documents  (including,
without  limitation,  financing  statements  and  an  assignment  of  registered
intellectual  property)  required to be filed,  registered or recorded (and that
have not already been so filed,  registered or recorded) in order to create,  in
favor of Lender a perfected Lien against the Collateral  thereunder with respect
to which a Lien may be perfected by a filing under the Uniform  Commercial  Code
or any other applicable law shall have been delivered to Lender duly executed by
the  appropriate  member of the Inmark  Group and shall be in proper  form to be
filed,  registered or recorded in each office in each  jurisdiction  required in
order to create in favor of Lender a perfected Lien on the respective Collateral
described  therein having the priority  purported to be granted thereby.  Lender
shall have also received  evidence that all necessary  filing fees and all taxes
or other expenses  related to such filings,  registrations or recordings will be
paid in full.  Lender  shall  have  received  evidence  that all  other  actions
necessary  or, in the opinion of Lender,  desirable to perfect the Liens created
by the Loan Documents have been taken.

         m. Searches. Lender shall have received the results of recent searches,
in form and substance  satisfactory  to Lender and by a Person  satisfactory  to
Lender,  of (i) Uniform  Commercial  Code filings which may have been filed with
respect to personal  property of Seller and USC (including  under any tradenames
used by it) in each jurisdiction in which it has or, within the last six months,
had personal  property,  (ii) upper and lower court  judgment  filings which may
have been filed against Seller or USC in each jurisdiction referred to in clause
(i) above,  and (iii) tax lien filings which may have been filed against  Seller
or USC in each jurisdiction referred to in clause (i) above.

         n.  Evidence  of  Insurance.   Lender  shall  have  received   evidence
satisfactory to it that USC has obtained policies of insurance required pursuant
to section 4.7.

         o. No Legal Restraints. There shall be no (i) litigation, investigation
or other proceeding of or before any Governmental  Authority  pending or, to the
best of knowledge  of each member of the Inmark  Group,  threatened  against any
member of the Inmark Group or any of its  properties or revenues that could have
a Material Adverse Effect or (ii)  injunction,  writ,  restraining  order or any
order of any nature  issued by any  Governmental  Authority  directing  that the
transactions  provided  for in this  Amendment  not be  consummated  as  therein
provided.

         p.   Additional   Matters.   Lender  shall  have  received  such  other
certificates,  opinions,  documents and instruments relating to the transactions
contemplated  by this  Amendment as it may have  reasonably  requested,  and all
corporate  and  other  proceedings  and  all  other  documents  (including,  all
documents  referred to herein and not  appearing  as exhibits  hereto) and legal
matters in


                                        6

<PAGE>



connection  with  the  transactions  contemplated  by this  Amendment  shall  be
satisfactory in form and substance to Lender and its counsel.

11. North  American  Holding Corp.  The Inmark Group  acknowledges,  represents,
warrants and covenants  with respect to its  affiliate  North  American  Holding
Corp.  ("NAHC"):  (i) 100 percent of the issued and outstanding equity interests
of NAHC is owned by a member of the Inmark Group; (ii) NAHC has no right,  title
or interest  of any kind in or to any asset or  property of any kind  (tangible,
intangible or otherwise); (iii) no member of the Inmark Group has at any time or
will at any time  permit the  conduct of any  business  of any kind  (including,
without  limitation,  the purchase or  acquisition  (by transfer,  conveyance or
otherwise)  of any  asset  or  property  of any  kind or the  assumption  of any
liability or obligation of any kind);  and (iv) as soon as  practicable,  Inmark
Group will cause the dissolution of NAHC.

12. Counterparts.  This Amendment may be executed in several counterparts,  each
of which, when executed and delivered,  shall be deemed an original,  and all of
which together shall constitute one agreement.

13.  Governing  Law.  This  Amendment  shall be  governed by and  construed  and
interpreted in accordance with the laws of the State of New York, without giving
effect to principles of conflicts of law.

14. Effect of Amendment. From and after the effectiveness hereof, all references
to the Agreement,  the Security  Agreement and the Pledge Agreement in the other
Loan Documents shall mean the Agreement,  the Security  Agreement and the Pledge
Agreement, respectively, as amended and modified by this Amendment.

15.  Ratification.  Except as amended and otherwise  modified by this Amendment,
the Agreement,  the Security Agreement,  the Pledge Agreement and the other Loan
Documents  shall  remain in full  force  and  effect in  accordance  with  their
respective terms.


                            [signature page follows]


                                        7

<PAGE>





         IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed and delivered by their proper and duly  authorized  officers as of
the day and year first above written.


                   PNC BANK NATIONAL ASSOCIATION



                   By:               /s/ Charles W. Jones
                                     ---------------------
                   Name/Title:       Charles W. Jones


                   INMARK ENTERPRISES, INC.



                   By:               /s/ Donald A. Bernard
                                     ---------------------
                   Name/Title:       Donald A. Bernard
                                     Executive Vice President,
                                     Chief Financial Officer and
                                     Secretary


                   U.S. CONCEPTS, INC.
                   (a Delaware corporation)



                   By:               /s/ Donald A. Bernard
                                     ---------------------
                   Name/Title:       Donald A. Bernard
                                     Executive Vice President,
                                     Chief Financial Officer and
                                     Secretary


                   INMARK SERVICES, INC.



                   By:               /s/ Donald A. Bernard
                                     ---------------------
                   Name/Title:       Donald A. Bernard
                                     Executive Vice President,
                                     Chief Financial Officer and
                                     Secretary



                                        8

<PAGE>



                   OPTIMUM GROUP, INC.



                   By:               Donald A. Bernard
                                     ---------------------
                   Name/Title:       Donald A. Bernard
                                     Executive Vice President,
                                     Chief Financial Officer and
                                     Secretary


                                        9