EXHIBIT 10.18
SECOND RIDER TO SUBORDINATION AGREEMENT
This Second Rider to Subordination Agreement (this "Rider") dated February
25, 1997 amends and modifies that certain Subordination Agreement dated as of
June 7, 1996 among CoreStates Bank, N.A. (the "Bank"), Diplomat Ambassador, Inc.
("Borrower") and Xxxx Xxxxxxx ("Creditor"), as amended and modified by that
certain Rider to Subordination Agreement dated June 7, 1996 (the "First Rider";
the Subordination Agreement, as amended and modified by the First Rider, the
"Subordination Agreement").
On June 6, 1996, the Bank made a $6,000,000 demand line of credit (the
"Demand Line") available to Borrower. Thereafter, the Demand Line was increased
to $8,250,000. Borrower has requested an increase in the Demand Line to
$12,000,000. The Bank is agreeable to such an increase provided that, among
other things, Creditor makes a subordinated loan to Borrower of not less than
$250,000 (the "Shareholder Acquisition Loan") subject to the terms and
conditions of this Rider.
1. Capitalized terms not defined herein shall have the meaning given to
such terms in the Subordination Agreement.
2. Provided that no default or event of default exists under Demand Line
or any other indebtedness of Borrower to the Bank and notwithstanding anything
to the contrary in the Subordination Agreement, Borrower is permitted to pay to
Creditor:
a. interest that accrues on the principal of the Shareholder
Acquisition Loan, provided that the Shareholder Acquisition Loan shall not bear
interest at a rate greater than 8% per annum.
b. the principal of the Shareholder Acquisition Loan in whole or in
part, provided that Borrower has excess borrowing availability under the Demand
Line of at least $750,000 for a period of not less than 90 consecutive days or
$1,000,000 for a period of not less than 60 consecutive days immediately
proceeding and continuing on the date of such proposed repayment of the
Shareholder Acquisition Loan. As used herein, the phrase "excess borrowing
availability" shall mean the excess of Borrower's Borrowing Base over Borrower's
Credit Limit (as such terms are defined in the Loan Agreement dated June 7, 1996
between Borrower and the Bank, as amended from time to time).
IN WITNESS WHEREOF, the undersigned, individually or by their duly
authorized officers, have executed this Rider on the day and year first above
written.
(Corporate Seal) DIPLOMAT AMBASSADOR, INC.
Attest:
By /s/ Xxxxx Xxxxxxx
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/s/ Xxxx Xxxxxxx Title: President
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Secretary
Witness:
/s/ Xxxxx Xxxxxxx /s/ Xxxx Xxxxxxx
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Xxxx Xxxxxxx
CORESTATES BANK, N.A.,
By /s/ Xxxxx X. Xxxxx
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Title: Vice President
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