December 22, 2009
Exhibit
10.5
December
22, 2009
UNIVERSAL
SECURITY INSTRUMENTS, INC.
00000X
Xxxxxxxx Xxxxx
Xxxxxx
Xxxxx, Xxxxxxxx 00000
Ladies
and Gentlemen:
We refer
to the Amended and Restated Factoring Agreement between us dated June 22, 2007,
as supplemented and amended (herein the “Agreement”). Further
reference is made to that certain letter from you to us, dated October 12, 2009,
notifying us of your intention to terminate the Agreement (the “Termination
Letter”). Unless otherwise defined, any capitalized terms used herein
shall have the meanings ascribed to them in the Agreement.
This
letter shall confirm that pursuant to mutual agreement, effective as of the date
hereof, the Termination Letter is hereby rescinded and cancelled, and the
Agreement in its entirety continues in full force and effect, without a break in
continuity. All of the terms, provisions and conditions of the
Agreement shall be and hereby are ratified and confirmed in all
respects.
In
addition, effective as of the date hereof, the Agreement shall be, and hereby
is, amended as follows:
1. The
first sentence of Paragraph 6.of the Agreement shall be, and hereby is, deleted
in its entirety and replaced with the following:
“At your
request, and in our sole and absolute discretion, we may advance funds to you
and your affiliate USI Electric, Inc. (“USI”) of up to the lesser of (i)
$7,500,000 or (ii) 90% of your Accounts and the Accounts of USI, prior to the
collection of the Accounts and (iii) 50% of your eligible inventory and/or the
eligible inventory of USI.”
2. The
second sentence of Paragraph 7.1 of the Agreement shall be, and hereby is,
deleted in its entirety and replaced with the following:
“In
exchange for such application, we shall charge your account monthly with the
cost of three (3) additional business days on all such payments at the rate
charged by us in section 14.1 below on debit balances.”
3. The
first two sentence of Paragraph 15.1 of the Agreement shall be, and hereby are
deleted in its entirety and replaced with the following:
“15.1 For
our services hereunder, you will pay us a factoring fee or charge of (a) one
quarter of one percent (.25%) of the gross face amount of all Accounts factored
with us due from Home Depot Inc., Home Depot Supply, Xxxxxx Supply, Inc. and HD
Supply Repair and Remodel and (b) sixty five hundredths of one percent (.65%) of
the gross face amount of all other Accounts factored with us, but in no event
less than $2.50 per invoice (“Minimum Invoice Commission”), provided, however
there shall be no Minimum Invoice Commission on invoices arising from sales by
Home Depot, Inc., Home Depot Supply, Xxxxxx Supply, Inc. and HD Supply Repair
and Remodel.”
4. The
definition of “Anniversary Date” in paragraph 16.1 of the Agreement shall be and
hereby is deleted in its entirety and replaced with the following:
“Anniversary Date” shall mean December 31, 2010 and the same date in each year
thereafter.”
Except to
the extent set forth herein, no other change or amendment in any of the terms,
provisions or conditions of the Agreement is intended or implied. If the
foregoing is in accordance with your understanding of our agreement, kindly so
indicate by signing and returning the enclosed copy of this letter.
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Very
truly yours,
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THE
CIT GROUP/COMMERCIAL SERVICES, INC.
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By:
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/s/
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Name:
Xxxxxxx Xxxxxxxx
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Title:
Vice President
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Read and
Agreed to:
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UNIVERSAL
SECURITY INSTRUMENTS, INC.
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By:
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/s/
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Name:
Xxxxxx X. Xxxxxxxxxx
Title:
President
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