EXHIBIT 10.3(C)
THE The CIT Group/
CIT Credit Finance
GROUP 0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, XX 00000
Tel: 000 000-0000
Fax: 000 000-0000
April 1, 1999
Pharmaceutical Formulations, Inc.
000 Xxxxxxxxxx Xxx.
Xxxxxx, Xxx Xxxxxx 00000
Re: Loan and Security Agreement, dated August 4, 1989, between The CIT
Group/Credit Finance, Inc., assignee of Fidelcor Business Credit
Corporation ("Lender"), and Private Formulations, Inc., predecessor by
merger of Pharmaceutical Formulations, Inc., ("Borrower") (as amended, the
"Loan Agreement") and all related security agreements, documents and
instruments (collectively, the "Financing Agreements")
Gentlemen:
You have requested and we have agreed to amend the Financing Agreements as set
forth below, effective as of the date hereof unless otherwise indicated.
Capitalized terms appearing below that are not defined below shall have the
meanings given in the Loan Agreement.
1. You have requested a temporary advance of $1,500,000 in excess of the
contractual ratios set forth in Section 10 of the Loan Agreement ("the
Overadvance"), through March 1, 2000. We have agreed to make the Overadvance
subject to the terms of this letter agreement and contingent upon the execution
by ICC Industries Inc. of a Limited Guaranty in favor of CIT and in the form
attached hereto as Exhibit A. Borrower agrees that the Overadvance will be
reduced at the rate of $100,000 per month on the first business day of each
month commencing on October 1, 1999, continuing until February 1, 2000.
Thereafter, the Overadvance will be recaptured in full with a final reduction in
the amount of $1,000,000 to be made on March 1, 2000.
2. Section 10.5(a) of the Loan Agreement is hereby amended so as to read in
its entirety as follows:
"(a) Net Worth:
As of the fiscal year end 6/30/99 $1,856,000
As of the fiscal year end 6/30/00 $2,856,000
As of the fiscal year end 6/30/01 $3,856,000"
3. Section 10.5(c) of the Loan Agreement is hereby amended so as to read in
its entirety as follows:
"(c) Net Income: Not less than $300,000 for the period beginning
January 1, 1999 and ending June 30, 1999 and
thereafter not less than $150,000 per fiscal quarter
and not less than $1,000,000 per fiscal year.
For purposes of this Section 10.5(c), Net Income shall be
calculated before extraordinary items and non-recurring items in
accordance with generally accepted accounting principles,
consistently applied. Further, Borrower understands and agrees
that if Borrower fails to meet the Net Income requirement set
forth herein for the period commencing January 1, 1999 and ending
June 30, 1999, the default Interest Rate charged pursuant to
Section 3.1 of the Agreement shall be retroactive to April 1,
1999."
Your financial statements for the fiscal quarters ending September 30, 1998 and
December 31, 1998 show a net income of less than the $150,000 requirement set
forth in Section 10.5(c) of the Loan Agreement. Subject to the condition set
forth below, Lender hereby waives any Event of Default (as defined in the Loan
Agreement) that would be caused by the failure to meet the net income
requirement for the above-specified periods. The granting of the aforementioned
waiver is conditioned upon payment by you to Lender of a fee in the amount of
$50,000 (the "Waiver Fee"). The Waiver Fee shall be earned in full as of the
date hereof and payable in monthly installments of $10,000 per month commencing
on April 2, 1999. The waiver made herein is made only on this occasion with
regard to the specific default set forth above and is not a waiver of any other
rights of Lender. Lender reserves the right to declare an Event of Default under
the Financing Agreements if there are other outstanding Events of Default under
the Financing Agreements now existing or hereafter arising.
Except as herein above specifically provided, the Financing Agreements shall
remain unmodified and in full force and effect.
This amendment shall be null and void if not executed on or before April 2,
1999.
Please signify your agreement with the foregoing by signing and returning to us
the enclosed copy of this letter.
Very truly yours,
THE CIT GROUP/CREDIT FINANCE, INC.
By: /S/
--------------------------------
Title: VICE PRESIDENT
AGREED:
PHARMACEUTICAL FORMULATIONS, INC.
By: /S/ XXXXXXX X. XXXXXX
-------------------------------
Title: PRESIDENT & CEO
CONFIRMED:
EXTRA PARENT CORP.
By: /S/ XXXXXXX X. XXXXXX
---------------------------------
Title: PRESIDENT & CEO
ICC INDUSTRIES INC.
By: /S/ XXXX X. XXXX
---------------------------------
Title: PRESIDENT
