As of January 4, 1993
Congress Financial Corporation
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, XX 00000
Re: Second Amendment to Financing Agreements
Dear Gentlemen:
Reference is made to Accounts Financing Agreement [Security Agreement]
between Congress Financial Corporation ("Congress") and I.C. Xxxxxx & Co.
L.P. ("Borrower") dated as of June 16, 1992 ( the "Accounts Agreement") and
all supplements thereto, and all other agreements, documents and instruments
related thereto and executed in connection therewith including, the Covenant
Supplement to Accounts Financing Agreement [Security Agreement] ("Covenant
Supplement") and the Inventory and Equipment Security Agreement Supplement to
Accounts Financing Agreement [Security Agreement] ("Inventory and Equipment
Security Agreement"), as each is amended by the amendment to Financing
Agreements dated October 30, 1992, as the same now exists or may hereafter be
further amended, modified, supplemented, extended, renewed, restated or
replaced (collectively, the "Financing Agreements"). Capitalized terms used
herein, unless otherwise defined herein shall have the meaning set forth in
the Financing Agreements.
Borrower has requested supplemental loans in an amount up to $500,000
under the Financing Agreements and certain modifications to the Financing
Agreements and Congress is willing to agree to such supplemental loans and
modifications, subject to the terms and conditions set forth herein.
In consideration of the foregoing, and the mutual agreements and covenants
contained herein and for other good and valuable consideration, Borrower and
Congress hereby agree as follows:
1. Maximum Credit. All references to "Maximum Credit" in the Financing
Agreements, including but not limited to Section 1.7 of the Accounts
Agreement, shall be deemed and each such reference is hereby amended by
replacing the figure "$10,000,000" with the figure "$11,000,000".
2. Supplemental Loans. Section 2.1 of the Accounts Agreement is hereby
deleted in its entirety and replaced with the following:
"2.1. You shall, in your discretion, make loans to us from time to time,
at our request, of up to eighty percent (80%) of the Net Amount of Eligible
Accounts (or such greater or lesser percentage thereof as you shall in your
sole discretion determine from time to time). Subject to the terms and
conditions hereof, you may also, in your discretion, make loans to us from
time to time, at our request, of up to $500,000 in excess of such lending
formula until May 28, 1993, subject to reduction thereof as hereafter set
forth, (the "Supplemental Loans"); provided, however, the maximum
aggregate outstanding amount of such Supplemental Loans shall not exceed
the lesser of (a) $500,000 and (b) the sum of (i) fifty percent (50%) of
the "Value" (as hereinafter defined) of our first quality imported
finished goods Inventory (as such term is defined in the Inventory and
Equipment Security Agreement) for our current selling season, acceptable
to you in all respects, plus (ii) up to five percent (5%) of the Net Amount
of Eligible Accounts. "Value" shall mean the lower of (a) cost computed on
a first-in-first-out basis or (b) market price, as determined by you.
Notwithstanding anything to the contrary contained herein, the maximum
amount of permitted Supplemental Loans available to us from you shall
decrease on the dates and in the amounts indicated below and any
outstanding Supplemental Loans in excess of such permitted maximum amount
shall be repaid concurrently with such reduction:
Date of Reduction Reduced Maximum Amount
----------------- ----------------------
May 7, 1993 $375,000
May 14, 1993 $250,000
May 21, 1993 $125,000
May 28, 1993 -0- "
3. Capital Expenditures. Section 4.12 of the Covenant Supplement is hereby
deleted in its entirety and replaced with the following:
"4.12 Capital Expenditures. Borrower will not, in the aggregate,
directly or indirectly, expend or commit to expend, Capital Expenditures in
excess of $431,000 in fiscal year 1992 or in excess of $300,000 in any fiscal
year thereafter."
4. Fee. In partial consideration of the amendments to the Financing
Agreements as set forth herein, Borrower agrees to pay Congress a fee in an
amount equal to $10,000, payable simultaneously with the execution hereof,
which fee is fully
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earned as of the data hereof. At Congress' option, Congress may charge such
fee directly to Borrower's loan account.
5. Effect and Entirety of this Amendment. Except as specifically
modified pursuant hereto, no other changes or modifications to the Financing
Agreements are intended or implied and, in all others respects, the Financing
Agreements are hereby ratified and confirmed by all parties hereto as of the
date hereof. This Amendment represents and incorporates the entire
understanding and agreements of the parties with respect to the matters set
forth herein and the parties hereto agree that there are no representations,
warranties, covenants or understandings of any kind, nature or description
whatsoever made by Congress to Borrower with respect to this Amendment,
except as specifically set forth herein. This Amendment represents the final
agreement between the parties and may not be contradicted by evidence or
prior, contemporaneous or subsequent oral agreements of the parties.
6. Waiver, Modification, Etc. No provision or term hereof may be
modified, altered, waived, discharged or terminated orally, but only by an
instrument in writing executed by the party against whom such modification,
alteration, waiver, discharge or termination is sought.
7. Further Assurances. The parties hereto shall execute and deliver
such additional documents and take such additional action as may be necessary
to effectuate the provisions and purposes of this Amendment.
8. Counterparts. This Amendment may be executed in one or more
counterparts which, taken together, shall constitute the agreement of the
parties.
Very truly yours,
I.C. XXXXXX & CO. L.P.
By: ISBUYCO, INC., General Partner
By: /s/ Xxxxxx X. Xxxxxxxxx
--------------------------
Title: VP
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Agreed and Accepted:
CONGRESS FINANCIAL CORPORATION
By: /s/ Xxxx X. Xxxxxxx
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Title: AVP
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