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Exhibit 4.32
October 17, 1996
Parlux Ltd.
0000 X.X. 00xx Xxxxxx
Xxxx Xxxxxxxxxx, XX 00000
RE: AMENDMENT NO. 5 TO LOAN AND SECURITY AGREEMENT
Ladies and Gentlemen:
We refer to the Loan and Security Agreement dated December 29, 1994, as
amended (the "Loan Agreement"), between Greyhound Financial Corporation, now
known as FINOVA Capital Corporation ("FINOVA") and you. Defined terms used in
this letter and not defined herein have the meanings given to them in the Loan
Agreement.
You have requested that FINOVA increase the Total Facility and make certain
other amendments to the Loan Agreement. FINOVA is willing to do so, but only on
the terms and conditions set forth herein. Accordingly, Borrower hereby agrees
with FINOVA as follows:
1. Amendments to Loan Agreement and Schedule.
(a) Each reference in the Loan Agreement, the Schedule, or any other
Loan Document to FINOVA's address in Los Angeles, California is hereby amended
to read: "355 Xxxxx Xxxxx Xxxxxx, Xxxxx 0000, Xxx Xxxxxxx, Xxxxxxxxxx 00000".
(b) Section 18.1 of the Schedule is amended by adding the following
definitions:
"Base Rate" means the rate of interest announced publicly by
Citibank, N.A., from time to time as its "base rate" (or any
successor thereto), which may not be such institution's lowest
rate.
(c) Section 1.1of the Schedule is amended in its entirety to read:
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"The amount of the Total Facility is Ten Million Dollars ($10,
000,000). "
(d) Section 1.2 of the Schedule is amended as follows:
(1) Clause (a) under "Revolving Loans" is amended in its
entirety to read: "Ten Million Dollars ($10,000,000) (the "Revolving
Loan Facility"); or
(2) Subclause (b)(ii)(A) under "Revolving Loans" is
amended in its entirety to read: "Six Million Dollars ($6,000,000)";
and
(3) Subclause (b)(ii)(B)(ii) under "Revolving Loans" is
amended by deleting the words "Five Hundred Thousand Dollars
($500,000)" and replacing them with "Seven Hundred Fifty Thousand
Dollars ($750,000)".
(e) Section 3.1 of the Schedule is amended
as follows:
(1) The first sentence under "Interest" is amended in
its entirety to read: "Borrower shall pay FINOVA interest (i) at a
per annum rate of one and three-quarters percent (1.75 %) in excess
of the Base Rate on fifty percent (50%) of the daily outstanding
balance of Borrower's loan account and (ii) at a per annum rate of
one-half of one percent (0. 5 %) in excess of the Base Rate on the
remaining fifty percent (50%) of the daily outstanding balance of
Borrower's loan account. Borrower's loan account shall be adjusted
on a weekly basis."
(2) The words "one-fourth of one percent (.25 %) per
annum of the amount of the Total Facility, or" shall be deleted from
the first sentence under "Annual Renewal."
(f) Section 5.2(iii) of the Loan Agreement is amended by deleting
the word "monthly" before the words "unaudited financial statements" and
replacing it with "quarterly".
(g) Section 5.2, Paragraph 4, of the Schedule is amended as follows:
(1) The words "month", "months" and "monthly" shall be
deleted and replaced with "quarter", "quarters" and
"quarterly", respectively; and
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(2) The words "thirty (30)" shall be deleted and
replaced with "forty-five (45)".
(h) Section 13.14 of the Schedule is amended as follows:
(1) The words "and not less than $15,000,000 on and
and after March 31, 1996" in the "Net Worth" covenant shall be
deleted and replaced with "not less than $15,000,000 from March
31, 1996 until June 29, 1996, and not less than $35,000,000 on
and after June 30, 1996"; and
(2) The word "month" shall be deleted and replaced with
"quarter".
2. Conditions Precedent. The amendments set forth in Paragraph I above
shall not be effective unless and until each of the following conditions
precedent is satisfied as determined by FINOVA in its sole judgment:
(a) Each of Borrower, Parent and Xxxx Xxxxxx shall have executed and
delivered this Amendment to FINOVA.
(b) Xxxxxxx Xxxxx Business Financial Services Inc. ("Xxxxxxx Xxxxx")
shall have executed and delivered a Participation Agreement, in form and
substance satisfactory to FINOVA, pursuant to which Xxxxxxx Xxxxx will acquire
and FINOVA will sell an ongoing participation interest of fifty percent (50%)
in the Collateral, Revolving Loans, Loan Documents and the transactions
thereunder.
(c) Parent shall have executed and delivered to FINOVA a written
agreement, in form and substance satisfactory to FINOVA, in which Parent agrees
and covenants to notify FINOVA immediately of any termination with respect to
any of Parent's license agreements, and to send a copy of any notice of
termination delivered by a licensor.
(d) Borrower shall have delivered or caused to be delivered to FINOVA
(1) evidence that all amounts outstanding under the Xxxxx Xxxxx Purchase
Agreement have been indefeasibly paid in full, including without limitation a
copy of the note dated December 29, 1994 in favor of Sanofi marked "CANCELLED"
and the Reversionary Assignment and Assumption dated December 29, 1994 between
Sanofi and Guarantor marked "CANCELLED", and (2) copies of termination
statements executed by Sanofi in connection with any UCC financing statements
it filed against Borrower and/or Parent.
(e) At the time the conditions in subparagraphs (a) through (d) above
have been satisfied, no Event of Default, or event or condition which with
notice or the passage of time, or both, would become an Event of Default, has
occurred and is continuing.
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3. Fee and Expenses. In consideration of FINOVA's agreements contained
herein and in order to induce FINOVA to enter into this letter, Borrower
herewith pays FINOVA a fee of $62,500, which FINOVA is authorized to charge to
Borrower's loan account with FINOVA. Borrower confirms that, under the Loan
Agreement, it shall pay FINOVA's attorneys' fees and expenses incurred in
connection with this letter and the transactions contemplated hereby.
4. Ratification. (a) Except as expressly set forth herein, the Loan
Agreement and the other Loan Documents are not modified hereby and each shall
remain in full force and effect in accordance with the respective provisions
thereof on the date hereof, and the Loan Agreement and the other Loan Documents
are each in all respects ratified and affirmed. FINOVA's agreements herein shall
not be construed to require FINOVA to extend any additional credit not expressly
contemplated by the Loan Agreement, or make any amendment to the Loan Agreement
or any other Loan Documents, on any other occasion, regardless of the similarity
of circumstances.
(b) Each of Parent and Xxxx Xxxxxx (which join in this letter solely for
the purposes of this subsection) hereby (i) acknowledges notice of the terms and
conditions of this letter, (ii) confirms and agrees that the Indebtedness under
and as defined in the Continuing Guaranties listed on Exhibit A hereto include
all Borrower's Obligations for or in respect of the principal of, accrued
interest in, and other charges now or hereafter payable in connection with the
Revolving Loans including, without limitation, those arising after giving effect
to this letter, and (iii) confirms that, after giving effect to this letter and
to the of the amendments to the Loan Agreement and Schedule, each such
Continuing Guaranty, to extent it is a party thereto, is its valid and binding
obligation, enforceable against it in accordance with its terms, without
defenses, offsets, or counterclaims, and continues in full force and effect.
5. Representations and Warranties. Without limiting any other provision of
this letter, and as an inducement to FINOVA to enter into this letter, Borrower
hereby: (a) represents, warrants and agrees that the Loan Agreement and the
other Loan Documents are its valid and binding obligations enforceable against
it in accordance with their terms, without defenses, offsets or counterclaims;
and (b) represents and warrants that:
(i) each of the representations and warranties of Borrower set forth
in the Loan Agreement and the other Loan Documents is true and
correct in all material respects, as of the date hereof, and
(ii) after giving effect to this letter, no Event of Default, or
event or condition which with notice or the passage of time, or
both, would become an Event of Default, has occurred and is
continuing.
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6. Governing Law. This letter shall be construed in accordance
with and be governed by the laws (as opposed to the conflicts of
laws provisions) of the State of Arizona.
7. Counterparts. This letter may be executed in one or more
counterparts, and by FINOVA and each other party hereto in separate
counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument
Please countersign below to indicate your agreement to and acceptance of
the foregoing terms. The provisions of this letter shall not become effective
unless and until so countersigned.
Very truly yours,
FINOVA CAPITAL CORPORATION
By: /s/ Xxxxx Xxxxx
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Name: Xxxxx Xxxxx
Title: Asst. V.P.
Accepted and Agreed:
PARLUX LTD.
By: /s/ Xxxxx X. Xxxxxxxxxxx
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Name: Xxxxx X. Xxxxxxxxxxx
Title: Exec. Vice President and CFO
XXXXXX XXXXXXXXXX, INC.
By: /s/ Xxxxx X. Xxxxxxxxxxx
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Name: Xxxxx X. Xxxxxxxxxxx
Title: Exec. Vice President and CFO
/s/ Xxxx Xxxxxx
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XXXX XXXXXX, an individual
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