Exhibit 10.1 Extension of Temporary Increase and Renewal for the WCMA Line of
Credit.
[XXXXXXX XXXXX LETTERHEAD]
July 2, 2001
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:
(a) As of the Effective Date and continuing thereafter to and including October
31, 2001 (the "Increase End Date") the "Maximum WCMA Line of Credit" shall mean
an amount equal to the lesser of: (A) $4,350,000.00 (the "Initial Maximum
Amount"), or (B) 80% of Customer's domestic 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 continental United States, Alaska or Hawaii, or from any
shareholder, officer or employee of Customer or any affiliated entity) plus 50%
of Customer's Inventory, as shown on its regular books and records, up to a
maximum of $3,250,000.00, and less the aggregate outstanding balance of
Customer's Term Loan Nos. 9811551601, 9911550701 and 0012552001. Provided,
however, that commencing on the last Business Day of June, 2001 and continuing
on the last Business Day of each month thereafter to and including the last
Business Day of September, 2001, the Initial Maximum Amount shall be reduced by
an amount equal to $50,000.00 per month. CUSTOMER AGREES THAT IT WILL, WITHOUT
DEMAND, INVOICING OR THE REQUEST OF MLBFS, FROM TIME TO TIME MAKE SUFFICIENT
PAYMENTS ON ACCOUNT OF THE WCMA LOAN BALANCE TO ASSURE THAT THE WCMA LOAN
BALANCE WILL NOT AT ANY TIME EXCEED THE MAXIMUM WCMA LINE OF CREDIT, AS REDUCED
EACH MONTH PURSUANT TO THE PRECEDING SENTENCE.
(b) 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)
$3,800,000.00, or (B) 80% of Customer's
XXXXXXX XXXXX BUSINESS FINANCIAL SERVICES INC.
Sel-Leb Marketing, Inc.
July 2, 2001
Page No. 2
domestic 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 continental United
States, Alaska or Hawaii, or from any shareholder, officer or employee of
Customer or any affiliated entity) plus 50% of Customer's Inventory, as shown on
its regular books and records, up to a maximum of $3,250,000.00, and less the
aggregate outstanding balance of Customer's Term Loan Nos. 9811551601,
9911550701 and 0012552001. 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.
(c) In connection with said temporary increase, Customer agrees to pay MLBFS a
fee of $15,000.00. 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 its execution of this Letter Agreement, the below-named Guarantor hereby
consents to the foregoing modifications to the Loan Documents, and hereby agrees
that the "Obligations" under its Unconditional Guaranty and/or agreements
providing collateral shall extend to and include the Obligations of Customer
under the Loan Documents, as amended hereby.
Customer and said Guarantor 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 said Guarantor 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 said Guarantor have any defense
to payment of any amounts owing, or any right of counterclaim for any reason
under, the Loan Documents.
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, the amendments
and agreements in this Letter Agreement will become effective on the date (the
"Effective Date") upon which: (a) Customer and the Guarantor shall have executed
and returned the duplicate copy of this Letter Agreement enclosed herewith; and
(b) an officer of MLBFS shall have reviewed and approved this Letter Agreement
as being consistent in all respects with the original internal authorization
hereof.
Notwithstanding the foregoing, if Customer and the Guarantor do not execute and
return the duplicate copy of this Letter Agreement 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 occur within said 14-day period, then all of said
amendments and agreements will, at the sole option of MLBFS, be void.
XXXXXXX XXXXX BUSINESS FINANCIAL SERVICES INC.
Sel-Leb Marketing, Inc.
July 2, 2001
Page No.3
Very truly yours,
XXXXXXX XXXXX BUSINESS FINANCIAL SERVICES INC.
By: /s/ Xxxxxxxx Xxx
--------------------------------
Xxxxxxxx Xxx
Senior Relationship Manager
ACCEPTED:
SEL-LEB MARKETING, INC.
By: /s/ X. Xxxxxx
--------------------------------
X. Xxxxxx
-----------------------------
Title: VICE-CHAIRMAN
-----------------------------
APPROVED:
ALES SIGNATURE LTD.
By: /s/ X. Xxxxxx
--------------------------------
X. Xxxxxx
-----------------------------
Title: Chairman of The Board
and CEO
-----------------------------
/s/ Xxxxx Xxxxxx
7/5/01
XXXXX XXXXXX
NOTARY PUBLIC STATE OF NEW JERSEY
NO. 69402
Commission Expires June 25, 2004
