Exhibit 4.4
The CIT Group/
Business Credit
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, XX 00000
(000)000-0000
May 17, 2000
NOODLE KIDOODLE, INC.
0000 Xxxxxxx Xxxxxxxx
Xxxxxxx, XX 00000
Ladies and Gentlemen:
We refer to the Financing Agreement between you and us dated June 27, 1997, as
supplemented and amended (the "Financing Agreement"). Capitalized terms used
and not otherwise defined herein shall have the same meanings given them in
the Financing Agreement.
This letter is to confirm that pursuant to mutual consent and understanding,
effective upon fulfillment to our satisfaction of the Conditions Precedent
(as defined below), the Financing Agreement shall be amended as follows:
1. The definitions of "Anniversary Date", "Early Termination Fee", "Inventory
Advance Percentage", "Letter of Credit Sub-Line" and "Line of Credit" set
forth in Section 1 of the Financing Agreement shall be deleted in their
entirety and replaced by the following:
"Anniversary Date shall mean May 17, 2003 and the same date in every year
thereafter.
Early Termination Fee shall: (i) mean the fee CITBC is entitled to charge
the Company in the event the Company terminates the Line of Credit or this
Financing Agreement on a date prior to an Anniversary Date; and (ii) be equal
to (x) one percent (1%) of the Line of Credit if the Early Termination Date
occurs prior to May 17, 2001, (y) one-half of one percent (.50%) if the Early
Termination Date occurs on or after May 17, 2001 put prior to May 17, 2002
and (z) zero percent (0%) if the Early Termination Date occurs on or after
May 17, 2002. Notwithstanding any provision to the contrary contained herein,
in the event that this Financing Agreement is terminated in conjunction with
the merger of the Company with Zainy Brainy and CITBC is offered and elects,
in its sole discretion, to participate in the financing arrangement with the
merger entity, no such Early Termination Fee shall be due or payable hereunder.
1
Inventory Advance Percentage shall mean (i) sixty-five percent (65%) during
the period from January 1 through and including July 31 of each year and (ii)
seventy-five percent (75%) during the period from August 1 through and
including December 31 of each year.
Letter of Credit Sub-Line shall mean $15,000,000 in the aggregate.
Line of Credit shall mean the commitment of CITBC to make Revolving Loans
pursuant to Section 3 of this Financing Agreement and to assist the Company
in opening Letters of Credit pursuant to Section 4 of this Financing
Agreement, in the aggregate amount equal to $50,000,000. Notwithstanding the
foregoing, the Company may at any time upon notice to CITBC elect to increase
the Line of Credit hereunder to $60,000,000, provided that such increase
shall not be effective (i) until such time as CITBC has completed syndication
(on terms, provisions and conditions acceptable to CITBC) of up to
$20,000,000 of such increased Line of Credit to a lender or lenders
acceptable to CITBC and (ii) if any Default or Event of Default has occurred
hereunder. The Company shall pay (x) any and all fees, costs and expenses
required by any such lender or lenders to facilitate and consummate such
syndication and (y) all Out-of-Pocket Expenses incurred by CITBC in
connection with any such syndication."
2. Section 7, Paragraph 1 (b) of the Financing Agreement shall be, and hereby
is deleted in its entirety and replaced by the following:
"(b) (i) in the event the average daily loan balance for any such month is
less than $20,000,000, two percent (2%) and (ii) in the event the average
daily loan balance for such month is $20,000,000 or more two and one-quarter
percent (2 1/4%), plus in each case the applicable Libor on any Libor Loan,
on a per annum basis, on the average of the net balances of Libor Loans owing
by the Company to CITBC in the Company's Revolving Loan Account at the close
of each day during such month."
3. The maximum of Libor Loans outstanding as referred to in Section 7,
Paragraph 2 shall be, and hereby is increased from three (3) to four (4).
4. Section 7, Paragraph 7 of the Financing Agreement shall be, and hereby
amended by increasing the dollar amount set forth in clause (ii) thereof from
$15,000 to $35,000.
5. The effectiveness of all the amendments set forth above shall be, an
hereby is, subject to the fulfillment to CITBC's satisfaction of the
following conditions precedent (herein the "Conditions Precedent"):
(a) the Company shall have an minimum Availability of $6,000,000.00. It is
understood that such requirement contemplates that all debts, obligations and
payables of the Company are current; and
(b) the absence of any Default of Event of Default
2
In consideration of the foregoing, the Company shall pay to CITBC an
Accommodation Fee $100,000 (which amount includes a Documentation Fee for the
services of our in-house legal department). Such fee shall be fully earned
on the date hereof, and may, at our option, be charged to your Revolving Loan
Account on the due date thereof.
Except to the extent set forth herein, no other waiver of, or change in any
of the terms, provisions or conditions of the Financing Agreement is intended
or implied. If the foregoing is in accordance with your understanding of our
agreement, kindly so indicate by signing and returning the enclosed copy of
this letter.
Very truly yours,
THE CIT GROUP/BUSINESS CREDIT, INC.
By:/s/Xxxxxxxxxxx Xxxx
Title: Vice President
Read and Agreed to:
NOODLE KIDOODLE, INC.
By: /s/ Xxxxxxx Xxxxxxxx
Title: Chairman of the Board, Chief Executive Officer and Treasurer
