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Exhibit 10.7
AMENDMENT TO CREDIT AND SECURITY AGREEMENT
THIS AMENDMENT TO CREDIT AND SECURITY AGREEMENT ("Amendment") is dated
as of the day of ________ 1997, between LANCETTI COSMETICS CORPORATION, a
Florida corporation ("Borrower") and FIRST UNION NATIONAL BANK OF FLORIDA, a
national banking association ("Bank").
R E C I T A L S:
A. Borrower and Bank entered into that certain Credit and Security
Agreement ("Agreement") dated ________________.1995.
B. Bank has agreed to advance additional sums to Borrower and to renew
Borrower's existing Revolving Loan.
C. Borrower and Bank desire to modify and amend certain provisions of
the Agreement pursuant to this Amendment.
NOW, THEREFORE, in consideration of the mutual covenants contained
herein and to induce the Bank to extend the additional credit to the Borrower,
the parties, each intending to be legally bound, do hereby agree as follows:
1. The foregoing recitals are true and are incorporated in this
Amendment by this reference.
2. Capitalized terms as used herein shall have the same meanings as set
forth in the Agreement unless the context indicates a different meaning.
3. Paragraph 1.1 of the Agreement is hereby amended by adding the
following definitions:
""CONSOLIDATED NOTE" shall mean that certain renewal and consolidated
note of even date herewith from Borrower to Bank in the original
principal amount of THREE MILLION DOLLARS ($3,000,000), which
Consolidated Note consolidates, amends, restates and renews the Notes
described therein.
"$800,000 NOTE" shall mean that certain Demand Revolving, Promissory
Note from Borrower to Bank of even date in the original principal
amount of EIGHT HUNDRED THOUSAND DOLLARS ($800,000)."
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4. Section 1.1 is further modified to amend the definitions as follows:
""MAXIMUM LOAN Amount" shall mean THREE MILLION DOLLARS ($3,000,000) as
to the Revolving Loan and TWO HUNDRED FIFTY THOUSAND DOLLARS ($250,000)
as to the Term Loan or such other amount as the Bank may consent to
from time to time.
"Note" shall mean collectively the Consolidated Note and the Term Note,
and any other promissory note now or hereafter evidencing the
indebtedness, and all modifications, extensions or renewals thereto."
5. Paragraph 3.1 of the Agreement is hereby amended to change the
definition of "Maximum Revolving Loan Amount" from ONE MILLION SEVEN HUNDRED
THOUSAND DOLLARS ($1,700,000) to THREE MILLION DOLLARS ($3,000,000).
6. Paragraph 3.2 of the Agreement is hereby modified by deleting
subparagraph 2 thereof and substituting the following:
"(2) The "Borrowing Base" which shall equal seventy-five percent (75%)
of Eligible Accounts Receivable plus fifty percent (50%) of eligible
inventory. At least monthly, Borrower shall provide a certificate as to
Eligible Accounts Receivable (including an aging analysis), eligible
inventory and such other management and/or collateral information as
Bank may require. Advances shall be limited to fifty percent (50%) of
eligible inventory and shall be capped at ONE MILLION DOLLARS
($1,000,000).
Concentration caps on eligible accounts receivable shall be waived for
"opening orders" defined as the initial order for a new customer
certified to Bank by Borrower. Concentration caps for other accounts
receivable shall be limited to ten percent (10%) except for the
following companies:
Wal-Mart 35%
Rite Aide 35%
Revco 35%
Walgreens 35%
CVS 35%
Target 35%
American Drug Stores 35%
Thirty/Payless 35%
Eckerd 35%
Xxxx Xxx Distributors 25%
Fays 25%
Kmart 20%"
6. Exhibit 5.26 of the Agreement is deleted in its entirety and Exhibit
5.26 attached hereto and made a part hereof is hereby inserted in lieu thereof.
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