SouthTrust Bank, N.A.
Xxx Xxxx Xxxxxxx Xxxxxxxxx
Xxxxx 000
Xxxx Xxxxxxxxxx, Xxxxxxx 00000
February 24, 2000
Xxxx Xxxxx, President
PetMed Xxxxxxx.xxx, Inc.
0000 XX 00xx Xxxxxx
Xxxxxxx Xxxxx, XX 00000
RE: SouthTrust Bank, N.A. Loan #5232160-40813 and Loan #5232160-4083
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Dear Xx. Xxxxx:
We refer to the Note and Security Agreement ("Loan Documents") between
SouthTrust Bank, N.A. ("the Bank") and PetMed Xxxxxxx.xxx, Inc. ("the Company",
"you") dated April 29, 1999 and September 17, 1999.
As indicated in the Bank's February 24, 2000 letter to the Company, we have
agreed to waive certain covenant violations which occurred as of the quarter
ended December 31, 1999. You have agreed to pledge a Certificate of Deposit in
the amount of $300,000 as additional collateral for the above loans. Please be
advised that this Certificate of Deposit is to be provided as additional
security and is not to be construed as a prepayment of any principal or interest
on either loan. The Bank expects the Company to continue to make its regularly
scheduled payments on the loans. In addition, understand that the Bank reserves
the right to require additional collateral at any time in the future.
Furthermore, the Certificate of Deposit shall beheld by the Bank to secure the
loans until such time that a satisfactory review of the financial statements for
two consecutive quarters is completed and full compliance with the covenants
initially set forth in the Loan Documents as noted above. The financial
statements shall be prepared by the Company's Certified Public Accountant in
accordance with generally accepted accounting principles and in compliance with
the provisions set forth in the Loan Documents.
We will charge a one-time fee in the amount of $5,000 to compensate the Bank for
processing this transaction.
Please also be advised that this waiver is limited to the instances set forth
above and is not a waiver or relinquishment for the future of such or any other
covenants, terms, provisions or conditions of your loan documents and that any
and all other requirements, obligations and covenants under the aforementioned
loan documents and agreements shall remain in full force and effect.
Please indicate your acceptance and concurrence with the above provisions by
signing below.
Yours truly,
/s/ Xxxxx Xxxx
--------------
Xxxxx Xxxx
Vice President
Acknowledged and accepted on February 24, 2000 by PetMed Xxxxxxx.xxx, Inc.
By: /s/ Xxxx Xxxxx
------------------
Xxxx Xxxxx, President
SouthTrust Bank, N.A.
Xxx Xxxx Xxxxxxx Xxxxxxxxx
Xxxxx 000
Xxxx Xxxxxxxxxx, Xxxxxxx 00000
February 24, 2000
Xxxx Xxxxx, President
PetMed Xxxxxxx.xxx, Inc.
0000 XX 00xx Xxxxxx
Xxxxxxx Xxxxx, XX 00000
RE: SouthTrust Bank, N.A. Loan #5232160-40813 and Loan #5232160-4083
----------------------------------------------------------------
Dear Xx. Xxxxx:
We refer to the Note and Security Agreement ("loan document") between SouthTrust
Bank, N.A. ("the Bank") and PetMed Xxxxxxx.xxx, Inc. ("the Company") dated April
29, 1999 and September 17, 1999.
You have informed us that as of December 31, 1999, the Company is not in
compliance with the Fixed Charge Coverage and Working Capital ratios set forth
in the loan documents described above. These deficiencies constitute an "event
of default" as defined in the loan documents.
In connection with the loan documents, specifically Article 6, paragraph
6.21(iii) which requires the Company to maintain at all times that this
Agreement is in effect a Fixed Charge Coverage, as amended, of not less than
1.45 to 1, we hereby agree, that although the Company is currently not in
compliance with this covenant, to waive this violation for the period from
December 31, 1999 through January 1, 2001, and further agree that the Company
not be required to comply with this covenant during the period from December 31,
1999 through January 1, 2001.
In addition, in connection with the loan documents, specifically Article 6,
General Covenants, paragraph 6.21(i) which requires the Company maintain at all
times that this agreement is in effect, working capital of not less than
$2,000,000, we hereby agree that although the Company is currently not in
compliance with this covenant, to waive this violation for the period ending
December 31, 1999.
We also agree to amend the working capital covenant to require that the Company
maintain working capital of not less than $1,000,000 at all times for the period
from December 31, 1999 through the earlier of January 1, 2001.
We understand that this waiver is limited to the instances set forth above and
is not a waiver or relinquishment for the future of such or any other covenants,
terms, provisions, or conditions of your loan documents and that any and all
other requirements, obligations, and covenants under the aforementioned loan
documents and agreements shall remain in full force and effect.
Yours truly, Agreed this ______________ day of February, 2000
/s/ Xxxxx Xxxx PetMed Xxxxxxx.xxx, Inc.
----------------------
Xxxxx Xxxx
Vice President By: /s/ Xxxx Xxxxx
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Xxxx Xxxxx, President
