June 25, 1996
Congress Financial Corporation
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Re: Twelfth Amendment to Financing Agreements
Gentlemen:
Reference is made to the Accounts Financing Agreement
[Security Agreement] between Congress Financial Corporation ("Congress") and
I.C. Xxxxxx & Company L.P. ("Borrower") dated as of June 16, 1992, as amended
(the "Accounts Agreement") and all supplements thereto, and all other
agreements, documents and instruments related thereto and executed in
connection therewith (collectively, all of the foregoing, as the same now
exist or may hereafter be further amended, modified, supplemented, extended,
renewed, restated or replaced, the "Financing Agreements"). Capitalized
terms used herein, unless otherwise defined herein, shall have the meaning
set forth in the Financing Agreements.
Xxxxxxxx has requested an extension of, and certain modifications to, the
Financing Agreements and Congress is willing to agree to such extension and
modifications, subject to the terms and conditions set forth herein.
In consideration of the foregoing, and the mutual agreements and
covenants contained herein and for other good and valuable consideration,
Borrower and Congress hereby agree as follows:
1. Definitions.
(a) Additional Definition. As used herein the term "Amended
Term Note" shall mean the Amended and Restated Term Promissory Note, dated of
even date herewith, made by Borrower payable to the order of Congress in the
original principal amount of $1,000,000 as the same now exists or may
hereafter be amended, modified, supplemented, extended, renewed, restated or
replaced.
(b) Amendments to Definitions.
(i) All references to the term "Term Note" herein and in the
Covenant Supplement and the other Financing Agreements shall be deemed and
each such reference is hereby amended to mean the Amended Term Note as
defined herein.
(ii) All references to the term "Term Loan" herein and in the Covenant
Supplement and the other Financing Agreements shall be deemed and each such
reference is hereby amended to mean the outstanding Obligations owed to
Congress by Borrower consisting of the indebtedness evidenced by the Amended
Term Note.
(c) Interpretation. For purposes of this Amendment, unless otherwise
defined herein, all terms used herein, including, but not limited to, those
terms used and/or defined in the recitals hereto, shall have the respective
meanings assigned to such terms in the other Financing Agreements.
2. Term Loan.
(a) Xxxxxxxx hereby acknowledges, confirms and agrees that as of June
1, 1996, the aggregate principal amount outstanding in respect of the Term
Loan (as such term is defined in the Financing Agreements immediately prior
to the effectiveness of this Amendment) is $216,651. On the date hereof,
subject to the terms and conditions contained herein, Congress shall make an
additional advance to Borrower in the amount of $783,349, so that the
outstanding principal balance of the Term Loan shall be increased to
$1,000,000. Such Term Loan shall be (i) evidenced by the Amended Term Note
executed and delivered by Borrower to Congress concurrently herewith, (ii)
repaid, together with interest and other amounts due thereunder, in accordance
with the terms and provisions of such Amended Term Note and the other
Financing Agreements, and (iii) secured by all of the Collateral. Borrower
may not reborrow any principal amounts prepaid pursuant to the Amended Term
Note.
(b) The amendment and restatement contained herein, shall not, in any
manner, be construed to constitute payment of, or impair, limit, cancel or
extinguish, or constitute a novation in respect of, the Obligations evidenced
by or arising under the Financing Agreements, and the liens and security
interests securing such Obligations shall not in any manner be impaired,
limited, terminated, waived or released.
3. Maximum Credit.
(a) Effective as of April 8, 1996, all references to the Maximum Credit
in the Financing Agreements, including but not limited to Section 1.7 of the
Accounts Agreement, shall be deemed and each such reference is hereby amended
by replacing "$15,000,000" with "$25,000,000". Notwithstanding the foregoing,
during the period from June 15, 1996 through and including September 15,
1996, all references to the Maximum Credit in the Financing Agreements shall
automatically be deemed and each such
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reference shall be automatically amended by replacing "$25,000,000" with
$27,000,000".
(b) Notwithstanding anything to the contrary contained in the Financing
Agreements, and without limiting the right of Congress to demand payment of
the Obligations, or any portion thereof, in accordance with any other terms
of the Financing Agreements, if the outstanding aggregate principal amount of
loans made by Congress to Borrower on and after September 16, 1996 exceeds
the Maximum Credit, Borrower shall remain liable therefor and such excess
shall automatically, without notice or demand, be absolutely and
unconditionally due and payable in cash or other immediately available funds
on September 16, 1996.
4. Accounts Advances. Section 2.1 of the Accounts Agreement, as amended,
is hereby deleted in its entirety and replaced with the following:
"2.1 You shall, in your discretion, make loans to us from time to time,
at our request, of up to eighty (80%) percent of the Net Amount of Eligible
Accounts (or such greater or lesser percentage thereof as you shall in your
sole discretion determine from time to time); provided, that, for the period
May 1, 1996 through July 31, 1996, you shall, in your discretion, make loans
to us from time to time, at our request, of up to eighty-five (85%) percent
of the Net Amount of Eligible Accounts (or such greater or lesser percentage
thereof as you shall in your sole discretion as determined from time to
time)."
5. Supplemental Loans.
(a) In addition to the loans and advances which may be made by Congress to
Borrower pursuant to the lending formulas set forth in the Financing
Agreements, upon the request of Xxxxxxxx made at any time and from time to
time during the period April 1, 1996 to July 31, 1996, Congress shall,
subject to the terms and conditions contained in the Financing Agreements,
make supplemental loans to Borrower in such amounts from time to time as
Congress shall in good faith determine, in its discretion, of up to
$1,000,000 in excess of the amounts otherwise available to Borrower under the
lending formulas set forth in the Financing Agreements, as calculated by
Congress (the "Supplemental Loans").
(b) The Supplemental Loans shall be secured by all Collateral and shall be
payable ON DEMAND. In any event, unless sooner demanded by Congress, all
outstanding and unpaid obligations arising pursuant to the Supplemental Loans
(including, but not limited to, principal, interest, fees, costs
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and expenses) shall automatically, without notice or demand, be absolutely
and unconditionally due and payable in cash or other immediately available
funds on July 31, 1996.
6. Unused Line Fee. Effective as of April 8,
1996, Section 3.5 of the Accounts Agreement, as amended, is hereby further
amended by deleting all references to "$10,000,000" and replacing them with
"$20,000,000".
7. Renewal Date. Section 9.1 of the Accounts Agreement,
as amended, is hereby further amended by deleting the first two sentences
thereof in their entirety and substituting the following therefor:
"9.1 This Agreement shall become effective upon
acceptance by you and shall continue in force and effect for a
term ending June 30, 1998 (the "Renewal Date"), unless sooner
terminated pursuant to the terms hereof. You shall have the right
to terminate this Agreement immediately at any time upon the
occurrence of an Event of Default."
8. Early Termination Fee. Section 9.2 of the Accounts
Agreement, as amended, is hereby deleted in its entirety and replaced with
the following:
"9.2 If you terminate this Agreement upon the
occurrence of an Event of Default or at our request, in
view of the impracticability and extreme difficulty of
ascertaining actual damages and by mutual agreement of
the parties as to a reasonable calculation of your lost
profits as a result thereof, we hereby agree that we
shall pay you, upon the effective date of such
termination, an early termination fee, in an amount equal
to: (i) $150,000 if such termination occurs on or prior to
June 30, 1997 or (ii) $100,000 if such termination occurs after
June 30, 1997 but prior to June 30, 1998."
9. Inventory Loans.
(a) During the period from May 1, 1996 through
July 31, 1996, and only for such period, Section 2 of the letter re:
Inventory Loans, dated December 31, 1994, by Xxxxxxxx in favor of Congress
(the "Inventory Loan Letter") is hereby amended by replacing the
reference to "fifty (50%) percent" with "sixty (60%) percent".
(b) Effective as of May 1, 1996, Section 3(b)
of the Inventory Loan Letter is hereby amended by deleting the
reference to "$2,500,000" and replacing it with "$4,000,000".
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10. Letter of Credit Sublimit. Effective as of May 1, 1996, Section
1.5 of the Trade Financing Agreement Supplement to Accounts Agreement, dated
June 16, 1992, by Xxxxxxxx in favor of Congress is hereby amended by deleting
the reference to "$6,000,000" and replacing it with "$8,000,000".
11. Fee. In partial consideration of the extension of the term of the
Financing Agreements, the Supplemental Loans, the increase in the Maximum
Credit and the other modifications to the Financing Agreements as set forth
herein, Xxxxxxxx agrees to pay Congress a fee in an amount equal to $75,000,
payable as of May 1, 1996, which fee is fully earned as of May 1, 1996. At
Congress' option, Congress may charge such fee directly to Xxxxxxxx's loan
account.
12. Conditions Precedent. The effectiveness of the amendments to the
Financing Agreements provided for herein shall only be effective upon the
satisfaction of each of the following conditions precedent in a manner
satisfactory to Congress:
(a) no Event of Default shall have occurred and be continuing and no
event shall have occurred or condition be existing and continuing which, with
notice or passage of time or both, would constitute an Event of Default;
(b) Congress shall have received, in form and substance satisfactory to
Congress, an original of the Amended Term Note, duly authorized, executed and
delivered by Xxxxxxxx; and
(c) Congress shall have received, in form and substance satisfactory to
Congress, an original of this Amendment, duly authorized, executed and
delivered by Xxxxxxxx, Xxx Xxxxxxx, Xxxxxx Xxxxx, Xxxxxx Xxxx, Xxxxxx
Xxxxxxxxx, Xxxx Xxxxxxxx and Xxxxxxx Xxxxxx.
13. Effect and Entirety of this Amendment. Except as specifically
modified pursuant hereto, no other changes or modifications to the Financing
Agreements are intended or implied and, in all other respects, the Financing
Agreements are hereby ratified and confirmed by all parties hereto as of the
date hereof. This Amendment represents and incorporates the entire
understanding and agreements of the parties with respect to the matters set
forth herein and the parties hereto agree that there are no representations,
warranties, covenants or understandings of any kind, nature or description
whatsoever made by Congress to Borrower with respect to this Amendment,
except as specifically set forth herein. This Amendment represents the final
agreement between the parties as to the subject matter hereof and may not be
contradicted by evidence or prior, contemporaneous or subsequent oral
agreements of the parties.
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14. Waiver, Modification, Etc. No provision or term hereof may be
modified, altered, waived, discharged or terminated orally, but only by an
instrument in writing executed by the party against whom such modification,
alteration, waiver, discharge or termination is sought.
15. Further Assurances. The parties hereto shall execute and deliver such
additional documents and take such additional action as may be necessary to
effectuate the provisions and purposes of this Amendment.
16. Counterparts. This Amendment may be executed in one or more
counterparts which, taken together, shall constitute the agreement of the
parties.
Very truly yours,
I.C. XXXXXX & COMPANY L.P.
By: ISBUYCO, INC., General Partner
By: /s/ Xxxxxx Xxxxx
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Title: Chairman
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Agreed and Accepted:
CONGRESS FINANCIAL CORPORATION
By: /s/ Xxxx X. Xxxxxx
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Title: Asst. Vice President
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ACKNOWLEDGED:
/s/ Xxx Xxxxxxx
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/s/ Xxxxxx Xxxxx
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/s/ Xxxxxx Xxxx
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/s/ Xxxxxx Xxxxxxxxx
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