AMENDMENT NUMBER ONE TO LOAN AND SECURITY AGREEMENT
AMENDMENT
NUMBER ONE TO
THIS
AMENDMENT NUMBER ONE TO LOAN AND SECURITY AGREEMENT
(this
“Amendment”), dated as of July 16, 2008, is entered into between FIRST
CAPITAL WESTERN REGION, LLC
(“Lender”), and ▇▇▇▇’▇,
INC.,
a
Delaware corporation (“Borrower”), in light of the following facts:
RECITALS
WHEREAS,
Borrower and Lender have previously entered into certain Loan and Security
Agreement, dated as of May 30, 2008 (the “Agreement”).
WHEREAS,
Borrower has requested that Lender (i) increase advance rate for Eligible
Inventory for the purposes of calculating the Borrowing Base, and (ii) increase
the Maximum Credit Limit.
WHEREAS,
Lender has agreed to Borrower's request subject to the terms and conditions
contained in this Amendment.
WHEREAS,
Borrower and Lender wish to amend the Agreement as set forth in this
Amendment.
NOW,
THEREFORE, the parties agree as follows:
1. DEFINITIONS.
All
terms which are defined in the Agreement shall have the same definition when
used herein unless a different definition is ascribed to such term under this
Amendment, in which case, the definition contained herein shall
govern.
2. AMENDMENTS.
The
Agreement is amended in the following respect:
(a) Change
in Maximum Credit Limit.
The
definition of “Maximum
Credit Limit”
in
Section
1
of the
Agreement is deleted in its entirety and is replaced with a new definition
as
follows:
“Maximum
Credit Limit”
means
$3,000,000.
(b) Weekly
Inventory Reports.
Section
9(b)
of the
Agreement is deleted in its entirety and is replaced with a new Section
9(b)
as
follows:
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(b) Collateral
Reports.
Concurrent with the execution of this Agreement by Borrower and concurrent
with
each request for a loan pursuant to Section 2(a),
but no
less frequently than as required by Item 26
of the Schedule,
Borrower shall deliver to Lender a fully completed Borrowing Base Certificate
certified by the Chief Executive Officer or Chief Financial Officer of Borrower
as being true and correct. Concurrent with the delivery of each such Borrowing
Base Certificate, Borrower shall provide a written report to Lender of all
materially significant returns, disputes and claims, together with sales and
other reports relating to the Accounts and Inventory as required by Lender.
Borrower shall deliver to Lender on the first day of each week a detailed report
of Borrower’s Inventory, setting forth the quantity, type, cost and location
thereof, all of which shall be set forth in a form and shall contain such
information as is acceptable to Lender. Borrower shall deliver to Lender within
ten (10) days after the end of each month a report, reflecting the status as
of
the end of each month and certified by the Chief Executive Officer or Chief
Financial Officer of Borrower as being true and correct, containing (i) a
current detailed aging, by total and by Customer, of Borrower’s Accounts, and
(ii) a current detailed aging, by total and by vendor, of Borrower’s accounts
payable. Borrower will also conduct a physical inventory count no less
frequently than annually, adjust Borrower’s records to reflect the results of
the count and deliver to Lender monthly a list of locations of Inventory and
the
types and values of Inventory at each such location, in such form as Lender
may
require. At Lender’s request, Borrower shall conduct such physical inventory
counts and deliver such information more or less often than described above
and
such other information with respect to the Collateral, Borrower or Borrower’s
business or financial condition as Lender may reasonably request.
(c) Increase
in Advance Rate for Eligible Inventory.
Item
1(a)(ii)(B)
of the
Schedule
to the
Agreement is deleted in its entirety and is replaced with a new Item
1(a)(ii)(B)
as
follows:
(B) An
amount
equal to the lesser of:
1. $1,000,000,
and
2. An
amount
equal to (y) 50% of the dollar value (determined at the lower of cost or market
value) of Eligible Inventory located at Borrower’s premises located at 12930 and
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, plus,
(z) 50%
of the dollar value (determined at the lower of cost or market value) of
Eligible Inventory consisting of finished goods (and not raw materials) located
at Valley Distributing & Storage Company’s warehouse in ▇▇▇▇▇▇-▇▇▇▇▇,
Pennsylvania; provided, however, that the inclusion of qualifying Eligible
Inventory located at Valley Distributing & Storage Company is subject to the
condition subsequent that Lender shall have received an executed warehouseman’s
letter agreement containing terms and conditions satisfactory to Lender by
no
later than August 15, 2008 (failure to satisfy this condition subsequent shall
cause the qualifying Eligible Inventory at such location to no longer be
included in the calculation of the Borrowing Base),
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3. FEE
FOR INCREASE IN MAXIMUM CREDIT LIMIT.
Upon
execution of this Amendment, in consideration of Lender’s agreeing to increase
the Maximum Credit Limit to $3,000,000, but without affecting Borrower’s
obligation to reimburse Lender for costs associated with this Amendment and
the
transactions contemplated hereby as provided elsewhere in the Agreement,
Borrower agrees to pay Lender a fee in the amount of $7,500, which will be
fully
earned on the date of this Amendment and shall be non-refundable.
4. REPRESENTATIONS
AND WARRANTIES.
Borrower hereby affirms to Lender that all of Borrower's representations and
warranties set forth in the Agreement are true, complete and accurate in all
respects as of the date hereof.
5. LIMITED
EFFECT.
Except
for the specific amendment contained in this Amendment, the Agreement shall
remain unchanged and in full force and effect.
6. COUNTERPARTS;
EFFECTIVENESS.
This
Amendment may be executed in any number of counterparts and by different parties
on separate counterparts, each of which when so executed and delivered shall
be
deemed to be an original. All such counterparts, taken together, shall
constitute but one and the same Amendment. This Amendment shall become effective
upon the execution of this Amendment by each of the parties hereto.
[Signatures
are on the next page]
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IN
WITNESS WHEREOF, Lender and Borrower have executed this Amendment.
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▇▇▇▇’▇,
INC.,
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a
Delaware corporation
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By:
/s/ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
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Name:
▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
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Title:
CEO
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FCC,
LLC,
a
Florida limited liability company
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doing
business as First Capital Western Region, LLC
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By:
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇
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Name:
▇▇▇▇ ▇. ▇▇▇▇▇
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Title:
Vice President
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ACKNOWLEDGMENT
AND REAFFIRMATION OF GUARANTOR
The
undersigned hereby acknowledges that he executed a Continuing Guaranty, dated
on
or around May 30, 2008 (the “Guaranty”), with respect to the present and future
obligations of Borrower owing to Lender. The undersigned hereby acknowledges
the
foregoing Amendment, consent to its terms, and reaffirms his Guaranty. The
undersigned further acknowledges that nothing in the Guaranty obligates Lender
to notify the undersigned of any changes in the financial accommodations made
available to Borrower or to seek future reaffirmations of the Guaranty, even
if
the Agreement is further amended; and no requirement to so notify the
undersigned or to seek reaffirmations in the future shall be implied by the
execution of this reaffirmation.
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/s/
▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
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▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇, an individual
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