EXHIBIT 10.2
October 30, 1996
House of Fabrics, Inc.
00000 Xxxxxxxxx Xxxxx
Xxxxxxx Xxxx, XX 00000
Gentlemen:
Reference is made to the Financing Agreement between you and the undersigned as
Agent and Lender dated July 23, 1996 as the same may be amended from time to
time (the "Financing Agreement"). Capitalized terms not otherwise defined herein
shall have the meaning ascribed thereto in the Financing Agreement.
You have requested and we hereby agree to amend the Financing Agreement as
follows:
1. Effective October 30, 1996, paragraph 10 of Section 6 of the Financing
Agreement is hereby deleted and the following is substituted in lieu thereof:
"10. The Company and its Subsidiaries, shall have, on a consolidated
basis, a Fixed Charge Coverage Ratio (calculated at the end of each fiscal
quarter indicated below for the applicable period) of a least:
PERIOD RATIO
------ -----
a) For the one (1) Fiscal Quarter ending
October 31, 1996 1.25 to 1.0
b) For the two (2) Fiscal Quarters ending
January 31, 1997 1.50 to 1.0
c) For the three (3) Fiscal Quarters ending
April 30, 1997 .75 to 1.0
d) For the four (4) Fiscal Quarters ending
July 31, 1997 and for the four (4)
fiscal quarters ending on each October 31,
January 31, April 30, and July 31 thereafter 1.0 to 1.0
Notwithstanding any provision to the contrary contained herein, in the event
that the Company's average daily Availability for the thirty (30) day period
immediately preceding any such calculation date for this Fixed Charge Coverage
Ratio Covenant is $7,500,000 or more, such Fixed Charge Coverage Ratio Covenant
shall not be effective solely for any such calculation date and the Company
shall have no obligation hereunder to comply with such Fixed Charge Coverage
Ratio Covenant with respect to the period ending as of any such calculation
date."
2. In consideration of this amendment you hereby agree to pay the Agent
on behalf of the Lenders: (i) a $75,000 facility fee, due upon execution of this
Amendment, and (ii) a $25,000 contingency fee, which shall be due and payable
solely in the event your Mauldin, South Carolina premises is not sold on or
before December 15, 1996. You hereby authorize the Agent to charge your
Revolving Loan Account with the Agent with any such amounts as set forth above.
Except as set forth herein no other change in the terms or provisions of the
Financing Agreement is intended or implied. If the foregoing is in accordance
with your understanding of our agreement, please so indicate by signing and
returning to us the enclosed copy of this letter. It is agreed with respect to
this amendment that signed faxed copies shall be deemed of the same force and
effect as an original manually signed copy, provided further that the Company
hereby confirms that it shall promptly deliver original signature pages to the
undersigned.
Very truly yours,
THE CIT GROUP/BUSINESS CREDIT, Inc.
(as Agent and Lender)
By: /s/ Xxxxx Xxxxx
-------------------------------
Title: Assistant Vice President
XXXXX FARGO BANK, N.A. (as Lender)
By: /s/ Xxxxx X. Xxxxxxx
-------------------------------
Title: Vice President
LA SALLE BUSINESS CREDIT, INC., (as Lender)
By: /s/ Xxxxx Magkamit
-------------------------------
Title: Assistant Vice President
FINOVA CAPITAL CORPORATION, (as Lender)
By: /s/ Xxxx Xxxxxxxx
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Title: Assistant Vice President
FREMONT FINANCIAL CORPORATION, (as Lender)
By: /s/ Xxxxx Xxxxxx
-------------------------------
Title: Assistant Vice President
Read and Agreed to:
HOUSE OF FABRICS, INC.
By: Xxxx X. Xxxxxxx
-----------------------
Title: EVP/CFO
