Exhibit 10(vii)
THIRD AMENDMENT TO LOAN AND SECURITY AGREEMENT
This Third Amendment to Loan and Security Agreement is made this 22nd
day of January 2002 by and between CONGRESS FINANCIAL CORPORATION, a Delaware
corporation ("Lender") and BONTEX, INC., a Virginia corporation ("Borrower").
Recitals
Borrower and Lender entered into a certain Loan and Security Agreement
dated January 26, 2000 (together with all amendments, modifications, addenda and
supplements, the "Loan Agreement") and related documents, evidencing certain
financing arrangements between Lender and Borrower as more particularly
described therein.
Borrower and Lender entered into an Amendment to Loan and Security
Agreement on November 13, 2000 and a Second Amendment to Loan and Security
Agreement on September 12, 2001.
Borrower has requested certain additional modifications to the terms
and conditions of and an extension of the Maturity Date under the Loan
Agreement. Lender is willing to make the said modifications and to extend the
Maturity Date, subject to the terms and conditions of this Amendment
("Amendment").
NOW, THEREFORE, in consideration of the mutual conditions and
agreements set forth herein, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
hereby agree, as of the date hereof (unless an earlier date is specified
herein), that the Loan Agreement is amended, as follows:
1. AMENDMENT TO DEFINITIONS. Section 1.26 of the Loan Agreement is
hereby amended to read as follows:
1.26 "Maximum Credit" shall mean the maximum amount of
Loans outstanding under Section 2.1 of this
Agreement, which shall be Two Million Dollars
($2,000,000).
2. AMENDMENT TO REVOLVING LOAN PROVISIONS.
(a) Section 2.1(a)(iii) of the Loan Agreement is hereby
amended to read as follows:
"(iii) the lesser of: (A) the sum of (I) the sum of
(I) the lesser of eighty-five percent (85%) of the net orderly
liquidation value or fifty-six percent (56%) of the Value of
Eligible Inventory consisting of finished goods (but not to
exceed $400,000) plus (II) the lesser of eighty-five (85%) of
the net orderly liquidation value or twelve percent (12%) of
the Value of Eligible Inventory consisting of
raw materials for such finished goods (but not to exceed
$100,000); or (B) Five Hundred Thousand Dollars ($500,000);
less"
3. TERM: Section 11.1(a) of the Loan Agreement is hereby amended
to read as follows:
(a) This Agreement and the other Financing Agreements shall
become effective as of the date set forth on the first page
hereof and shall continue in full force and effect for a
term ending on February 26, 2002 ("Maturity Date"),
provided, that, this Agreement and all other Financing
Agreements must be terminated simultaneously. Upon the
Maturity Date, Borrower shall pay to Lender, in full, all
outstanding and unpaid Obligations and shall furnish cash
collateral to Lender in such amounts as Lender determines
are reasonably necessary to secure Lender from loss, cost,
damage or expense, including attorneys' fees and legal
expenses, in connection with any contingent Obligations,
including checks or other payments provisionally credited to
the Obligations and/or as to which Lender has not yet
received final and indefeasible payment. Such payments in
respect of the Obligations and cash collateral shall be
remitted by wire transfer in Federal funds to such bank
account of Lender, as Lender may, in its discretion,
designate in writing to Borrower for such purpose. Interest
shall be due until and including the next business day, if
the amounts so paid by Borrower to the bank account
designated by Lender are received in such bank account later
than 12:00 noon (Eastern Time.)"
4. NET WORTH COVENANT. Section 9.14 of the Loan Agreement is
hereby amended, as of September 12, 2001, to read as follows:
"9.14. Adjusted Tangible Net Worth. Borrower (excluding, for
purposes of this covenant, foreign subsidiaries and
affiliates) shall continuously maintain Adjusted Tangible
Net Worth of not less than Five Million Dollars ($5,000,000)
from July 1, 2001 through December 31, 2001, not less than
Five Million Seventy Five Thousand Dollars ($5,075,000) from
January 1, 2002 through January 31, 2002, and not less than
Five Million Dollars ($5,000,000) commencing February 1,
2002 and at all times thereafter."
5. FEE. This Amendment is conditioned on the payment by Borrower to
Lender of an extension fee of Five Thousand Dollars ($5,000), which shall be
fully earned as of the date hereof. Borrower authorizes Lender to advance such
fee as a Revolving Loan under the Loan Agreement.
6. CONFIRMATION OF INDEBTEDNESS. Borrower confirms and acknowledges
that as of the close of business on December 31, 2001, it is indebted to Lender
under the Loan Documents without any deduction, defense, setoff, claim or
counterclaim, of any nature, in the aggregate principal mount of $ 1,470,876
comprised of: (a) $854,209 outstanding with respect to the
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Revolving Loans, and (b) $616,667 outstanding with respect to the Term Loan,
plus any accrued and unpaid interest and all fees, costs and expenses (including
attorneys' fees) incurred to date in connection with Loan Documents.
7. REPRESENTATIONS AND WARRANTIES. Borrower represents and warrants
to, and covenants with, Lender as follows, which representations, warranties and
covenants are continuing and shall survive the execution and delivery hereof,
and the truth and accuracy of, or compliance with each, together with the
representations, warranties and covenants in the other Financing Agreements,
being a continuing condition of the making of Loans by Lender to Borrower:
(a) This Amendment has been duly executed and delivered by
Borrower and is in full force and effect as of the date hereof and the
agreements and obligations of Borrower contained herein constitute legal, valid
and binding obligations of Borrower enforceable against Borrower in accordance
with their respective terms;
(b) Borrower has taken all necessary corporate action to
authorize the execution, delivery and performance of this Amendment;
(c) This Amendment is, or when executed by Borrower and
delivered to Lender, will be, duly executed and constitute a valid and legally
binding obligation of Borrower, enforceable against Borrower in accordance with
its terms; and
(d) The execution by Borrower and delivery to Lender of this
Amendment is not and will not be in contravention of any order of any court or
other agency of government, law or any other indenture or agreement to which
wither Borrower is bound or the Articles of Incorporation or bylaws of Borrower
to be in conflict with, or result in a breach of, or constitute (with due notice
and/or passage of time) a default under any such indenture, agreement or
undertaking or result in the imposition of any lien, charge, encumbrance of any
nature on any property of Borrower.
8. REAFFIRMATION: Except as expressly amended herein, the terms
and conditions of the Loan Agreement are hereby reaffirmed and ratified in all
respects, and Borrower reaffirms each of the representations and warranties
under the Loan Agreement made by it, as if said representations and warranties
were made and given on and as of the date hereof
9. NO WAIVER BY LENDER: This Amendment does not and shall not be
deemed to constitute a waiver by Lender of any breach or violation of any
representation, warranty or covenant made or agreed to by any Borrower under the
Loan Agreement as amended hereby, and all of Lender's claims and rights
resulting from any such breach or misrepresentation by either Borrower, are
expressly reserved by Lender. This Amendment does not obligate Lender to agree
to any further extension or any other modification of the Loan Agreement nor
does it constitute a waiver of any other rights or remedies of Lender.
10. INCORPORATION: This Amendment (including, without limitation,
any covenants contained herein) shall amend, and is incorporated into and made
part of, the Loan Agreement.
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All references contained in the Loan Agreement or other Loan Documents to the
Loan Agreement shall be deemed, for all purposes, to mean the Loan Agreement as
amended hereby. To the extentthat any term or provision of this Amendment is or
may be deemed expressly inconsistent with any term or provision in the Loan
Agreement, the terms and provisions hereof shall control. Except as expressly
amended by this Amendment, all of the terms, conditions and provision of the
Loan Agreement are hereby ratified and continue unchanged and remain in full
force and effect.
11. NO MODIFICATION: No modification of this Amendment or of any
agreement referred to herein shall be binding or enforceable unless in writing
and signed on behalf of the party against whom enforcement is sought.
12. HEADINGS: The headings of any paragraph of this Amendment are
for convenience only and shall not be used to interpret any provision of this
Amendment.
13. SUCCESSOR AND ASSIGNS: This Amendment will be binding upon and
inure to the benefit of the parties hereto and their respective heirs,
executors, administrators, successors and permitted assigns.
14. GOVERNING LAW: This Amendment shall be governed by, and
construed and enforced in accordance with the laws of the State of New York,
excluding its conflict of laws rule.
15. SEVERABILITY: The provisions of this Amendment are to be deemed
severable, and the invalidity or unenforceability of any provision shall not
affect or impair the remaining provisions which shall continue in full force and
effect.
16. COUNTERPARTS: This Amendment may be executed in any number of
counterparts and by different parties on separate counterparts (including by
facsimile transmission of executed signature pages hereto), each of which
counterparts, when so executed and delivered, shall be deemed to be an original
and all of which counterparts, taken together, shall constitute but one and the
same agreement. This Amendment shall become effective upon the execution and
delivery of a counterpart hereof by each of the parties hereof.
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IN WITNESS WHEREOF, Lender and Borrower have caused these presents to
be duly executed on and as of the date and year first above written.
LENDER BORROWER
CONGRESS FINANCIAL BONTEX, INC.
CORPORATION
By: /S/ Xxxxx X. Xxxxxxx By: /S/ Xxxxx X. Xxxxxxxx
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Title: V.P. Title: C.E.O.
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ADDRESS: ADDRESS:
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1133 Avenue of the Americas Xxx Xxxxxx Xxxxx
Xxx Xxxx, XX 00000 Xxxxx Xxxxx, Xxxxxxxx 00000
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