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AMENDMENT TO LOAN AND SECURITY AGREEMENT
THIS AMENDMENT TO LOAN AND SECURITY AGREEMENT (the "Amendment") is
made and entered into as of the 16th day of August, 1996, between NationsBank,
N.A. (South) (hereinafter referred to as "Lender"), and International Design
Group, Inc., Eagle Premium Finance, Inc. and Xxxxx Financial Corporation
(hereinafter collectively referred to as "Borrowers").
W I T N E S S E T H :
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WHEREAS, Lender and Borrowers are party to the Loan and Security
Agreement dated as of February 23, 1996 (the "Agreement"); and
WHEREAS, Lender and Borrowers desire to amend the Agreement as set
forth herein.
NOW, THEREFORE, in consideration of the foregoing premises, and other
good and valuable consideration, the receipt and legal sufficiency of which
is hereby acknowledged, the parties hereto hereby agree as follows:
1.All capitalized terms used herein and not otherwise expressly
defined herein shall have the respective meanings given to such terms in the
Agreement.
2. The Agreement is amended by as follows:
(a) Delete the definition of "Permitted Investments"
contained in Section 1.1 and replace it with the following:
"Permitted Investments" means: (a) Investments of any
Borrower in: (I) negotiable certificates of deposit, time
deposits and banker's acceptances issued by the Lender or any
Affiliate of the Lender or by any United States bank or trust
company having capital, surplus and undivided profits in excess
of $250,000,000, (ii) any direct obligation of the United States
of America or any agency or instrumentality thereof which has a
remaining maturity at the time of purchase of not more than one
year and repurchase agreements relating to the same, (iii) sales
on credit in the ordinary course of business on terms customary
in the industry, and (iv) notes, accepted in the ordinary course
of business, evidencing overdue accounts receivable arising in
the ordinary course of business, (b) Investments of IDG in money
market accounts, stocks, stock options, and other readily
marketable investments, in each case acceptable to the Lender,
in an amount not to exceed $250,000, provided such securities
are maintained in the Investment Account and are subject to the
Lender's perfected first priority security interest pursuant to
the Assignment of Investment Account, (c) loans and advances
from IDG to the Guarantor in an aggregate principal amount not
to exceed $750,000, to enable the Guarantor to make corresponding
loans and advances to insurance agents in an aggregate principal
amount not to exceed $500,000 and to finance consumer finance
agreements in an aggregate amount not to exceed $250,000, (d)
the financing and/or factoring of up to $250,000 of premium
finance agreements under which premium finance companies
acceptable to the Lender finance the payments of automobile
insurance premiums on terms acceptable to the Lender, (e) loans
and advances between the Borrowers and their Affiliates existing
as of the Effective Date, (f) loans and advances between the
Borrowers and their Affiliates after the Effective Date in an
aggregate amount outstanding at any time not to exceed $25,000,
and (g) advances to QRS Acquisition Inc. for the payment of the
Borrowers' payroll in the ordinary course of business.
(b) Delete the definition of "Revolving Credit Facility" contained in
Section 1.1 and replace it with the following:
"Revolving Credit Facility" means the facility for the
Revolving Credit Loans in the principal sum of up to $10,000,000.
The Borrowers may, by written notice to the Lender, increase the
amount of the Revolving Credit Facility to $11,000,000, provided
that (a) no Default or Event of Default then exists, and (b)
there shall not have occurred any change which, in the Lender's
sole discretion, has had or may have a Materially Adverse Effect
as compared to the condition of any Borrower presented by the
May 31, 1996 unaudited financial statements of the Borrowers
delivered to the Lender pursuant to Section 9.1(b). Such
increase shall be effective upon the fifth Business Day following
the Lender's receipt of the Borrowers' written request, provided
the Borrowers shall pay the Lender a $3,500 closing fee as
consideration for the costs associated with structuring,
processing, approving and closing such increase.
(c) Delete Section 10.1(a) and replace it with the following:
(a) Maximum Liabilities to Tangible Net Worth. Permit the ratio of
the Borrowers' total Liabilities (minus Subordinated Indebtedness) to their
Tangible Net Worth (plus Subordinated Indebtedness), all measured on a
consolidated basis at any time:
(i) from the Effective Date to and including February 28, 1997,
to be greater than 4.0 to 1;
(ii) from March 1, 1997 to and including February 28, 1998, to be
greater than 3.75 to 1; and
(iii)thereafter, to be greater than 3.50 to 1.
(d) Delete Section 10.14 and replace it with the following:
Section 10.14 Minimum Availability. Permit Availability to be less than
$400,000 for any 10 consecutive Business Day period.
3. The Borrowers shall pay the Lender a closing fee of $4,500 on the date
hereof in consideration for the Lender approving and closing the
accommodations set forth herein. Such fee shall be fully earned by the Lender
when due and payable and shall not be subject to refund or rebate. Such fee
is for compensation for services and is not, and shall not be deemed to be,
interest or a charge for the use of money. The Borrowers authorize the Lender
to charge their loan account under the Revolving Credit Facility for the
amount of such fee.
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4. The Borrowers hereby restate, ratify, and reaffirm each and
every term, condition, representation and warranty heretofore made by them
under or in connection with the execution and delivery of the Agreement as
amended hereby, and the other loan documents executed and/or delivered in
connection therewith (the "Loan Documents"), as fully as though such
representations and warranties had been made on the date hereof and with
specific reference to this Amendment and the Loan Documents.
5. Except as expressly set forth herein, the Agreement shall be
and remain in full force and effect as originally written, and shall
constitute the legal, valid, binding and enforceable obligations of the
Borrowers to the Lender.
6. The Borrowers agree to pay on demand all costs and expenses
of the Lender in connection with the preparation, execution, delivery and
enforcement of this Amendment and all other Loan Documents and any other
transactions contemplated hereby, including, without limitation, the fees
and out-of-pocket expenses of legal counsel to the Lender.
7. To induce the Lender to enter into this Amendment, the
Borrowers hereby (I) represent and warrant that, as of the date hereof, and
after giving effect to the terms hereof, there exists no Default or Event of
Default under the Agreement, and (ii) acknowledge and agree that no right of
offset, defense, counterclaim, claim or objection in favor of the Borrowers
against the Lender exists arising out of or with respect to any of the
Secured Obligations.
8. The Borrowers agree to take such further action as the Lender
shall reasonably request in connection herewith to evidence the amendments
herein contained to the Agreement.
9. This Amendment may be executed in any number of counterparts and
by different parties hereto in separate counterparts, each of which, when
so executed and delivered, shall be deemed to be an original and all of which
counterparts, taken together, shall constitute but one and the same
instrument.
10. This Amendment shall be binding upon and inure to the benefit of
the successors and permitted assigns of the parties hereto.
11. This Amendment shall be governed by, and construed in
accordance with, the laws of the State of Georgia.
IN WITNESS WHEREOF, the Borrowers and the Lender have caused this
Amendment to be duly executed under seal, all as of the date first above
written.
BORROWERS:
INTERNATIONAL DESIGN GROUP, INC.
[CORPORATE SEAL]
Attest: By:/s/ Xxxxxx X. Xxxxxxx
Name: Xxxxxx X. Xxxxxxx
By:/s/ Xxxxx Xxxxxxx Title: Chairman of the Board
Name: Xxxxx Xxxxxxx
Title: President
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EAGLE PREMIUM FINANCE, INC.
[CORPORATE SEAL]
Attest: By:/s/ Xxxxxx X. Xxxxxxx
Name: Xxxxxx X. Xxxxxxx
By:/s/ Xxxxx Xxxxxxx Title: Chairman of the Board
Name: Xxxxx Xxxxxxx
Title: President
XXXXX FINANCIAL CORPORATION
[CORPORATE SEAL]
Attest: By:/s/ Xxxxxx X. Xxxxxxx
Name: Xxxxxx X. Xxxxxxx
By:/s/ Xxxxx Xxxxxxx Title: Chairman of the Board
Name: Xxxxx Xxxxxxx
Title: President
LENDER:
NATIONSBANK, N.A. (SOUTH)
By:/s/ Xxxxxx X. Xxxx
Name: Xxxxxx X. Xxxx
Title:Vice President
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AFFIDAVIT REGARDING DELIVERY
(attach to note or other written
obligation to pay money)
I, Xxxxxx X. Xxxx hereby certify that I am a Vice President of
NationsBank, N.A. (South) and that the foregoing note or other
written obligation to pay money was delivered to me as a representative of
NationsBank, N.A. (South) in the State of Georgia, County of Xxxxxx.
/s/ Xxxxxx X. Xxxx
Signature of Officer or Agent of Lender
The undersigned acknowledge receipt of a copy of the foregoing Amendment
and consent to the terms thereof:
------------------------------ (L.S.)
Xxxxx Xxxxxxx
/s/ Xxxxxx Xxxxxxx (L.S.)
Xxxxxx Xxxxxxx
Federal Funding Corporation
By:/s/ Xxxxxx Xxxxxxx
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Chairman of the Board
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