EXHIBIT 10.39
May 31, 2000
Mr. Hoyt Hackney, President
Wellington Hall Caribbean Corporation ("WHCC" or "Company")
P.O. Box 1354
Lexington, North Carolina 27293-1354
Mr. Hoyt Hackney, President
Wellington Hall, Limited ("WH" or "Sponsor")
Route 17, U.S. Highway No 29. and No. 70
P.O. Box 1354
Lexington, North Carolina 27293-1354
Mr. Hoyt Hackney, President
Muebles Wellington Hall, S.A. ("Muebles" or "Guarantor")
P.O. Box 1371
San Pedro Sula, Honduras, C. A.
Re: Wellington Hall Caribbean Corporation's
Financing for Operations in Honduras
Ladies and Gentlemen:
1. We refer to that certain letter agreement dated as of May 1, 2000 (the
"Forbearance Agreement") among Wellington Hall Caribbean Corporation ("WHCC' or
"Company"), Wellington Hall, Limited ("WH" or "Sponsor") and Muebles Wellington
Hall ("Muebles" or "Guarantor") and the Overseas Private Investment Corporation
("OPIC" or "Lender"), the Loan Agreement, as amended, and related documents
executed among and between WHCC, WH, and Muebles, and OPIC with respect to
WHCC's furniture manufacturing operations in Honduras (the "Project") through
its wholly owned subsidiary, Muebles. All capitalized terms used and not
otherwise defined herein shall have the meaning set forth for such terms in the
Loan Agreement and Forbearance Agreement.
2. The Forbearance Agreement is hereby amended at paragraph 3(ii),
which is hereby amended and restated in its entirety as follows:
"Make quarterly interest payments in the manner specified in the Loan Agreement
on the full, unpaid balance of the loan, effective as of October 31, 1999; and
in lieu of making penalty interest payments on each quarterly payment date
specified in the Loan Agreement, the Company shall pay a total penalty charge of
$25,138.70 on October 31, 2000, which represents the penalty interest that will
accrue during the Forbearance Period, computed on the basis of 360-day years of
twelve 30-day months; and"
3. Except as expressly provided herein, all other terms and conditions of the
Forbearance Agreement shall remain in full force and effect, and the Company,
the Sponsor, and the Guarantor each hereby reaffirms its respective obligations
under the Financing Documents and the Forbearance Agreement and confirms that
such obligations remain in full force and effect, without any claims, set-offs,
or defenses.
4. Each Signatory for WHCC, the Sponsor and the Guarantor has full power and
authority to enter into this Agreement and to incur and perform all obligations
and covenants contained herein, all of which have been duly authorized by all
proper and necessary corporate action.
5. This Agreement shall be binding upon and inure to the benefit of the Company,
Sponsor, Guarantor, OPIC, and each of their respective heirs, personal
representatives, successors, and assigns. None of the Company, Sponsor,
Guarantor shall assign any of their respective rights or obligations under this
Agreement without the express written consent of OPIC.
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6. In case one or more provisions contained in this Agreement shall be invalid,
illegal, or unenforceable in any respect under any law, the validity, legality,
and enforceability of the remaining provision contained herein shall remain
effective and binding and shall not be affected or impaired thereby.
7. This Agreement shall be governed by the laws of the District of Columbia
without regard to the conflict of laws principles thereof.
Please sign and return a copy of this Agreement confirming your
acknowledgment and agreement with the terms hereof, whereupon this Agreement
shall constitute a legally binding document.
Yours truly,
John R. Aldonas
Manager, Special Assets
SIGNATURES
WELLINGTON HALL CARIBBEAN CORPORATION
By: Date:
--------------------------- ------------------------------
Hoyt Hackney
President
WELLINGTON HALL, LIMITED
By: Date:
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Hoyt Hackney
President
MUEBLES WELLINGTON HALL, S.A.
By: Date:
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Hoyt Hackney
President
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