Exhibit 10.32
January 15, 1996
Congress Financial Corporation (Northwest)
000 X.X. Xxxx Xxxxxx, Xxxxx 000
Xxxxxxxx, XX 00000
Re: Eleventh Amendment to Accounts Financing Agreement
--------------------------------------------------
Ladies and Gentlemen:
This Eleventh Amendment to Accounts Financing Agreement, dated as of
the 15th day of January, 1996 (this "Amendment") is for the purpose of amending
the Accounts Financing Agreement [Security Agreement] which we entered into on
or about December 20, 1990, as it has been previously amended (the "Accounts
Financing Agreement").
For valuable consideration, receipt and sufficiency of which are
acknowledged, we agree as follows:
1. A new Section 2.7 is hereby added to the Accounts Financing Agreement as
follows:
"2.7 In addition to amounts otherwise available under the
formulas described above, and notwithstanding the Maximum Credit
limit, you will temporarily allow us an overadvance of up to the
lesser of (i) fifty percent of the market value of that certain
real property in Lynnwood, Washington, more fully described in
Exhibit C hereto (the "Lynnwood Property") as established by an
MAI appraisal satisfactory to you; or (ii) $1,000,000 (the lesser
of (i) or (ii) being referred to hereinafter as the "Overadvance
Limit"). All overadvance amounts shall bear interest at the rate
prescribed in Section 3 hereof. The Overadvance Limit will be
reduced by the following amounts, and any overadvance amounts in
excess of such reduced Overadvance Limit must be repaid, on the
dates listed below:
Congress Financial Corporation (Northwest)
January 15, 1996
Page 2
Date Reduction Amount
---- ----------------
2/29/96 $575,000
3/31/96 $ 75,000
4/30/96 $100,000
5/31/96 $250,000
provided, however, that notwithstanding the provision for elimination of the
overadvance on May 31, 1996, all Obligations, including the overadvance, will be
due and payable on April 30, 1996 in the event the Accounts Financing Agreement
is not extended beyond that date.
2. A new section 4.3 is hereby added to the Accounts Financing Agreement as
follows:
"4.3 In addition to the security interest granted in Section 4.1
hereof, we shall execute and deliver to you a first Deed of Trust
on the Lynnwood Property (the "Deed of Trust") in form
satisfactory to you to secure the prompt performance, observance
and payment in full of all Obligations. Upon payment in full of
the overadvance provided in Section 2.7 hereof, including all
accrued interest thereon, and provided that there then exists no
Event of Default, you will reconvey the Lynnwood Property to us.
3. A new Section 6.11 is hereby added to the Accounts Financing Agreement as
follows:
"6.11 We own the Lynnwood Property free and clear of any
mortgages, liens, encumbrances, reservations, restrictions,
easements or adverse claims of any kind, except as disclosed in
Schedule 6.11 hereto. Without your prior written consent, we
shall not sell, lease, transfer or convey all or any portion of
the Lynnwood Property, or create, assume, incur or permit to
exist any mortgage, trust deed, lien, security interest or
encumbrance of any nature in or against the Lynnwood Property
other than those specifically set forth in Schedule 6.11 attached
hereto."
Congress Financial Corporation (Northwest)
January 15, 1996
Page 3
4. Section 8.1 of the Accounts Financing Agreement is hereby amended by
changing the period at the end of the section to a semicolon and by adding the
following:
"or (h) if there shall be any breach of any covenant,
representation or warranty contained in the Deed of Trust, or any
other instrument delivered to you by us in connection with any
loans hereunder."
5. For the accommodation described in this Amendment, we agree to pay you a
fee in the sum of $5,000.
6. To induce you to accept this Amendment, we make the following
representations, warranties, and covenants:
(a) Each and every recital, representation, and warranty contained in
this Amendment, the Accounts Financing Agreement, and the Deed of Trust is
correct as of the date of this Amendment.
(b) No event has occurred or is continuing which constitutes or, with
the giving of notice, the passage of time, or both, would constitute, an Event
of Default under the Accounts Financing Agreement.
7. We shall pay all expenses, including attorney fees, which you incur in
connection with the preparation and implementation of this Amendment and any
related documents.
8. Except as specifically provided above, the Accounts Financing Agreement
remains fully valid, binding, and enforceable according to its terms.
9. We waive and discharge any and all defenses, claims, counterclaims, and
offsets which we may have against you and which have arisen or accrued up to the
date of this Amendment. We acknowledge that you and your employees, agents and
attorneys have made no representations or promises to us except as specifically
reflected in this Amendment and in the written agreements which have been
previously executed. In this connection, we specifically waive the provisions
of California Civil Code (S) 1542, which provides as follows:
Congress Financial Corporation (Northwest)
January 15, 1996
Page 4
A general release does not extend to claims which the creditor does
not know or suspect to exist in his favor at the time of executing the
release, which, if known by him, must have materially affected his
settlement with the debtor.
Very truly yours,
XXXXXX CORPORATION
By /s/ Xxxxxx X. Xxxxxxx
------------------------------
Its Vice President Finance
------------------------------
The undersigned guarantor acknowledges that Congress Financial
Corporation (Northwest) ("Congress") has no obligation to provide it with notice
of, or to obtain its consent to, the terms of this Amendment. The undersigned
guarantor nevertheless hereby (i) acknowledges and agrees to the terms and
conditions of this Amendment; (ii) acknowledges that its guaranty remains fully
valid, binding and enforceable; and (iii) waives any and all defenses, claims,
counterclaims and offsets against Congress which may have accrued to date. In
connection with these waivers, the undersigned guarantor specifically waives the
provisions of California Civil Code (S) 1542, which provides as follows:
A general release does not extend to claims which the creditor does
not know or suspect to exist in his favor at the time of executing the
release, which, if known by him, must have materially affected his
settlement with the debtor.
USS CORPORATION, dba US Sound
By /s/ Xxxx X. World
------------------------------
Its Secretary
------------------------------
ACCEPTED AND AGREED:
CONGRESS FINANCIAL CORPORATION (NORTHWEST)
By /s/ Xxxx Xxxxxx
--------------------------
Its Vice President
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