December 24, 1997
MOVIE STAR, INC.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
RE: FINANCING AGREEMENT
DATED: April 24, 1996
It is mutually agreed that the above mentioned agreement between us shall be
amended as hereinafter provided:
Paragraph 3.1, 3.2 and 3.3 are hereby amended to read as follows:
3.1 Borrower agrees to pay to Lender each month interest in arrears
(computed on the basis of the actual number of days elapsed over a year of 360
days) on the average daily balances in the Loan Account during the preceding
month at a rate equal to the Prime Rate plus two percent (2%) per annum (the
"Margin"); provided, however, that no decrease shall reduce the Prime Rate below
6% per annum. Any change in the effective interest rates due to a change in the
Prime Rate shall take effect on the date of such change in the Prime Rate.
3.2 Borrower shall pay to Lender a facility fee for each contract year
of this Agreement equal to one half of one percent (1/2 of 1%) of the Maximum
Amount payable on the first day of each contract year commencing on 7/1/98. Upon
any renewal of this Agreement, Borrower shall pay to Lender an annual facility
fee equal to one half of one percent (1/2 of 1%) of the Maximum Amount provided,
however, that commencing with the calendar quarter beginning July 1, 1998, we
shall rebate to you quarterly twenty five percent (25%) of an amount equal to
one half of one percent (1/2 of 1%) of the amount, if any, by which $13,500,000
exceeds the maximum amount of loans and letters of credit at any time
outstanding during such calendar quarter. In addition to the above we shall
rebate to you quarterly on April 1, 1998 and July 1, 1998 twenty five percent
(25%) of an amount equal to .667% of the amount, if any, by which 13,500,000
exceed the maximum of loans and letters of credit at any time outstanding during
such quarterly period.
3.3 Should Lender arrange to open Letters of Credit or issue guaranties
for Borrower's account, Borrower agrees to pay Lender an amount equal to 1/4 of
1% of the face amount of such Letters of Credit or guaranties, plus 1/8 of 1%
for each 60 days or portion thereof that the Letter of Credit (or any resulting
acceptance) or guaranty remains open and unpaid, plus bank changes.
Paragraph 9.1 is hereby amended to read as follows:
9.1 This Agreement shall become effective upon acceptance by Lender at
its office in the State of New York, and shall continue in full force and effect
until June 30, 1999 (the "Renewal Date") and from year to year thereafter,
unless sooner terminated as herein provided. Borrower may terminate this
Agreement on the Renewal Date or on the anniversary of the Renewal Date in any
year by giving Lender at least sixty (60) days' prior written notice by
registered or certified mail, return receipt requested, and in addition to its
other rights hereunder, Lender shall have the right to terminate this Agreement
at any time by giving Borrower thirty (30) days' prior written notice. If an
event of default hereunder has not been declared by Lender, and Borrower
terminates this Agreement, Borrower shall pay to Lender as liquidated damages
and as part of the Obligations, an early termination fee ("Early Termination
Fee") in an amount equal to $150,000.00 or $75,000 in the event that Xxxx X.
Xxxxx and Xxx. Xxxxxxx Xxxxx xxxx 70% of their respective legal or beneficial
interest in the capital stock of Borrower (which as of June 30, 1997 amounted to
4,655,399 shares) less amounts paid to
Lender for interest or letters of credit income during such contract year. No
termination of this Agreement, however, shall relieve or discharge Borrower of
its duties, obligations and covenants hereunder until such time as all
Obligations have been paid in full, and the continuing security interest in
Receivables and other Collateral granted to Lender hereunder or under any other
agreement shall remain in effect until such Obligations have been fully
discharged. The early termination fee is in addition to all other Obligations of
the Borrower hereunder. No provision hereof shall be modified or amended orally
or by course of conduct but only by a written instrument expressly referring
hereto signed by both parties.
The foregoing amendment shall be effective as of January 1, 1998.
In all other respects the terms and conditions of the aforesaid agreement, as
the same may have heretofore been amended, shall remain unchanged.
XXXXXXXXX & XXXXXXXXX, INC.
BY:/s/ Xxxxx Xxxxxx
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Xxxxx Xxxxxx
SENIOR VICE PRESIDENT
THE FOREGOING IS ACKNOWLEDGED &
AGREED TO:
MOVIE STAR, INC.
BY:/s/ Xxxx Xxxxxxxxx
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Xxxx Xxxxxxxxx
EXECUTIVE VICE PRESIDENT
