Private Client Group
Xxxxxxx Xxxxx Business
Financial Services Inc.
[GRAPHIC] Xxxxxx Xxxxx 000 Xxxxx XxXxxxx Xxxxxx
00xx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
(000) 000-0000
FAX: (000)000-0000
April 20, 1999
Sel-Leb Marketing, Inc.
000 Xxxxx Xxxxxx
Xxxxxxxx, XX 00000
Re: Temporary WCMA Line of Credit Increase
Ladies & 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 NO. 9811551601 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 ("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:
1. During the period between the Effective Date and October 31, 1999 (the
"Increase End Date"), the term "Maximum WCMA Line of Credit" shall mean as of
any date of determination thereof, an amount equal to the lesser of: (A)
$3,800,000.00, or (B) 80% of Customer's Accounts and Chattel Paper, as shown on
its regular books and records (excluding Accounts over 90 days old, Chattel
Paper with installments or other sums more than 90 days past due, and Accounts
and Chattel Paper 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) and 50% of Customer's Inventory, as shown on
its regular books and records, less the outstanding balance of Customer's Term
Loan No. 9811551601.
2. Commencing on the first Business Day immediately following the Increase End
Date, and continuing thereafter to and including the Maturity Date, the "Maximum
WCMA Line of Credit" shall be reduced to an amount equal to the lesser of: (A)
$3,300,000.00, or (B) 80% of Customer's Accounts and Chattel Paper, as shown on
its regular books and records (excluding Accounts over 90 days old, Chattel
Paper with installments or other sums more than 90 days past due, and Accounts
and Chattel Paper 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) and 50% of Customer's Inventory, as shown on
its regular books and records, less the outstanding balance of Customer's Term
Loan No. 9811551601. PRIOR TO THE CLOSE OF BUSINESS ON THE INCREASE END DATE,
CUSTOMER SHALL REPAY ANY AMOUNT OUTSTANDING IN EXCESS OF SUCH REDUCED MAXIMUM
WCMA LINE OF CREDIT.
Xxxxxxx Xxxxx Business Financial Services Inc.
Sel-Leb Marketing, Inc.
April 20, 1999
Page No. 2
3. In connection with said temporary increase, Customer agrees to pay MLBFS a
fee of $10,000.00. Customer hereby authorizes and directs MLBFS to charge the
said fee to WCMA Account No. 885-07E38 on or at any time after the Effective
Date.
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 Unconditional Guaranty 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:
Verification that Customer has an open and active lockbox for collection of
its receivables, in addition to a copy of the executed lockbox agreement;
The February 28, 1999 accounts receivable aging of Ales Signature, Ltd.;
and
An updated Certificate of Insurance evidencing a policy or policies of
physical damage insurance on the tangible collateral described in the Loan
Documents, and providing that losses shall be payable to us as our
interests may appear pursuant to a Lender's Loss Payable Endorsement.
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 the
condition 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
Xxxxxxx Xxxxx Business Financial Services Inc.
Sel-Leb Marketing, Inc.
April 20, 1999
Page No. 3
occur within said 14-day period, then all of said amendments and agreements
will, at the sole option of MLBFS, be void.
Very truly yours,
Xxxxxxx Xxxxx Business Financial Services Inc.
By: /s/ Xxxxxx Xxx Xxxxxxx
-----------------------------
Xxxxxx Xxx Xxxxxxx
Senior Portfolio Manager
Accepted:
Sel-Leb Marketing, Inc.
By: /s/ Xxx Xxxxxx
--------------------------------------
Printed Name: Xxx Xxxxxx
---------------------------
Title: Executive Vice President - Finance
----------------------------------
Approved:
Ales Signature Ltd.
By: /s/Xxx Xxxxxx
--------------------------------------
Printed Name: Xxx Xxxxxx
---------------------------
Title: Executive Vice President - Finance
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