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EXHIBIT 10.3
XXXXXX'X FURNITURE, INC.
000 Xxxxx Xxxxx Xxxxxx
Xxxx, Xxxxxxxxxx 00000
August 14, 1997
Congress Financial Corporation (Western)
000 Xxxxx Xxxx Xxxxxx, Xxxxx 0000
Xxxxxxxx, Xxxxxxxxxx 00000
Re: Xxxxxx'x Sofa Factory and Xxxxxx Convertible Corporation
(collectively, "Borrower")
Ladies and Gentlemen:
In connection with that certain Loan and Security Agreement dated as of
January 20, 1995, as amended to date (the "Senior Loan Agreement"), between
Borrower and Congress Financial Corporation (Western), a California corporation
("Lender"), Xxxxxx'x Furniture, Inc., a Delaware corporation ("KFI"), has
previously entered into (i) that certain Amended and Restated Subordination
Agreement, dated as of August 26, 1996 (the "Subordination Agreement"), with
Lender, and (ii) that certain Guarantee dated as of January 20, 1995 (the
"Guarantee"), in favor of Lender. Any and all initially capitalized terms set
forth herein shall have the meaning ascribed thereto in the Subordination
Agreement.
Concurrently with the execution of that certain Fourth Amendment to Loan
and Security Agreement, of even date herewith (the "Amendment") between Borrower
and Lender, Borrower shall have received new Junior Debt financing in the amount
of Three Million Dollars ($3,000,000) (the "New KFI Indebtedness") as evidenced
by that certain Promissory Note, dated as of August 15, 1997, in the original
principal amount of Three Million Dollars ($3,000,000) executed by Borrower to
the order of KFI (the "New Promissory Note"). Furthermore, Borrower will, from
time to time, receive from KFI additional Junior Debt financing in the maximum
amount of Three Million Six Hundred Thousand Dollars ($3,600,000) (together with
the New KFI Indebtedness, the "New Junior Debt"), which will be evidenced by
additional notes or other instruments executed by Borrower to the order of KFI
(such additional notes or instruments, together with the New Promissory Note,
the "New Junior Debt Documents").
In consideration of Lender's consent to the execution and delivery of
the New Junior Debt Documents by Borrower (which consent is evidenced by
Lender's signature hereto), and Lender's agreement to continue to extend
financial accommodations under the Senior Loan Agreement to Borrower, KFI hereby
acknowledges and confirms that the
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Congress Financial Corporation (Western)
August 14, 1997
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Junior Debt as defined in the Subordination Agreement includes (without
limitation) the New Junior Debt and that the New Junior Debt and the New Junior
Debt Documents are subject to the terms and conditions of the Subordination
Agreement.
KFI further acknowledges and confirms that the Guarantee and the
Subordination Agreement remain in full force and effect.
Although KFI has acknowledged and confirmed the matters set forth above,
KFI understands and agrees that Lender has no duty under the Subordination
Agreement, the Guarantee, the Senior Loan Agreement or any other agreement with
KFI or Borrower to seek such an acknowledgment or consent, and nothing contained
herein is intended to or shall create such a duty as to any advances or
transactions hereafter.
XXXXXX'X FURNITURE, INC.,
a Delaware corporation
By:
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Name:
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Title:
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CONGRESS FINANCIAL CORPORATION (WESTERN),
a California corporation
By:
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Name:
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Title:
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