Private Client Group
XXXXXXX XXXXX BUSINESS
FINANCIAL SERVICES INC.
000 Xxxxx XxXxxxx Xxxxxx
00xx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
(000) 000-0000
FAX: (000) 000-0000
October 18, 2002
[LOGO] XXXXXXX XXXXX
Sel-Leb Marketing, Inc.
000 Xxxxx Xxxxxx
Xxxxxxxx, XX 00000
RE: LOAN DOCUMENTS AMENDMENT AND EXTENSION
Ladies and Gentlemen:
This Letter Agreement will serve to confirm certain agreements of Xxxxxxx Xxxxx
Business Financial Services Inc. ("MLBFS") and Sel-Leb Marketing, Inc.
("Customer") with respect to: (i) that certain WCMA AND TERM LOAN AND SECURITY
AGREEMENT DATED NOVEMBER 24, 1998 between MLBFS and Customer (including any
previous amendments and extensions thereof), and (ii) all other agreements
between MLBFS and Customer or any party who has guaranteed or provided
collateral for Customer's obligations to MLBFS (a "Guarantor") in connection
therewith (collectively, the "Loan Documents"). Capitalized terms used herein
and not defined herein shall have the meaning set forth in the Loan Documents.
Subject to the terms hereof, effective as of the "Effective Date" (as defined
below), the Loan Documents are hereby amended as follows:
(a) The "Maturity Date" of the WCMA Line of Credit is hereby extended to October
31, 2003.
(b) The term "Maximum WCMA Line of Credit" shall mean an amount equal to the
lesser of: (A) 80% of Customer's Accounts and Chattel Paper, as shown on its
regular books and records (excluding Accounts over 90 days old, directly or
indirectly due from any person or entity not domiciled in the United states, or
from any shareholder, officer or employee of Customer or any affiliated entity)
plus 50% of Customer's Inventory, as shown on its regular books and records, up
to a maximum of $2,750,000.00, less the aggregate outstanding balance of
Customer's Term Loan dated June 6, 2002, or (B) $3,550,000.00.
(c) The "Line Fee" for the period ending October 31, 2003, shall be $35,500.00.
Customer hereby authorizes and directs MLBFS to charge said amount to WCMA
Account No. 886-07E38 on or at any time after the Effective Date.
(d) Customer's "tangible net worth" shall at all times exceed $8,500,000.00. For
the purposes hereof, the term "tangible net worth" shall mean Customer's net
worth as shown on Customer's regular financial statements prepared in a manner
consistent with the terms hereof, but excluding an amount equal to: (i) any
assets which are ordinarily classified as "intangible" in accordance with
generally accepted accounting principles, and (ii) any amounts now or hereafter
directly or indirectly owing to Customer by officers, shareholders or affiliates
of Customer.
XXXXXXX XXXXX BUSINESS FINANCIAL SERVICES INC.
Sel-Leb Marketing, Inc.
October 18, 2002
Page No. 2
Except as expressly amended hereby, the Loan Documents shall continue in full
force and effect upon all of their terms and conditions.
By their execution of this Letter Agreement, the below-named Guarantors hereby
consent to the foregoing modifications to the Loan Documents, and hereby agree
that the "Obligations" under their respective Unconditional Guaranty and/or
agreements providing collateral shall extend to and include the Obligations of
Customer under the Loan Documents, as amended hereby.
Customer and said Guarantors acknowledge, warrant and agree, as a primary
inducement to MLBFS to enter into this Agreement, that: (a) no Default or Event
of Default has occurred and is continuing under the Loan Documents; (b) each of
the warranties of Customer in the Loan Documents are true and correct as of the
date hereof and shall be deemed remade as of the date hereof; (c) neither
Customer nor any of said Guarantors have any claim against MLBFS or any of its
affiliates arising out of or in connection with the Loan Documents or any other
matter whatsoever; and (d) neither Customer nor any of said Guarantors have any
defense to payment of any amounts owing, or any right of counterclaim for any
reason under, the Loan Documents.
The obligations of MLBFS under this Letter Agreement are subject to its receipt
(where applicable) and satisfaction with the following:
(1) Current Accounts Receivable Aging and Inventory Report dated within 15
days of funding; and
(2) 09/30/2002 Financial Statements, if funded after 11/15/2002.
Provided that no Event of Default, or event which with the giving of notice,
passage of time, or both, would constitute an Event of Default, shall then have
occurred and be continuing under the terms of the Loan Documents, and each of
the conditions specified above shall have been met to our satisfaction, the
amendments and agreements in this Letter Agreement will become effective on the
date (the "Effective Date") upon which: (a) Customer and the Guarantors shall
have executed and returned the duplicate copy of this Letter Agreement and the
other documents enclosed herewith; and (b) an officer of MLBFS shall have
reviewed and approved this Letter Agreement and such other documents as being
consistent in all respects with the original internal authorization hereof.
Notwithstanding the foregoing, if Customer and the Guarantors do not execute and
return the duplicate copy of this Letter Agreement and said other documents
within 14 days from the date hereof, or if for any other reason (other than the
sole fault of MLBFS) the Effective Date shall not occur within said 14-day
period, then all of said amendments and agreements will, at the sole option of
MLBFS, be void.
XXXXXXX XXXXX BUSINESS FINANCIAL SERVICES INC.
Sel-Leb Marketing, Inc.
October 18, 2002
Page No. 3
Very truly yours,
XXXXXXX XXXXX BUSINESS FINANCIAL SERVICES INC.
By: /s/ Xxxxxxxx X. Xxxxxxxx
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Xxxxxxxx X. Xxxxxxxx
Senior Credit Manager
ACCEPTED:
SEL-LEB MARKETING, INC.
By: /s/ Xxx Xxxxxxxxx
----------------------------
Printed Name: Xxx Xxxxxxxxx
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Title: Chairman
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APPROVED:
ALES SIGNATURE LTD.
By: /s/ Xxx Xxxxxxxxx
----------------------------
Printed Name: Xxx Xxxxxxxxx
-----------------
Title: Chairman
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