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[LETTERHEAD OF MERRILL LYNCH]
August 3, 2000
Sel-Leb Marketing, Inc.
495 River Street
Paterson, NJ 07524
Re: Amendment to Loan Documents
Ladies & Gentlemen:
This Letter Agreement will serve to confirm certain agreements of Merrill Lynch
Business Financial Services Inc. ("MLBFS") and Sel-Leb Marketing, Inc.
("Customer") with respect to: (i) that certain TERM LOAN AND SECURITY AGREEMENT
No. 9911550701 between MLBFS and Customer (including any previous amendments and
extensions thereof), and (ii) all other agreements between MLBFS and Customer or
any party who has guaranteed or provided collateral for Customer's obligations
to MLBFS (a "Guarantor") in connection therewith (collectively, the "Loan
Documents"). Capitalized terms used herein and not defined herein shall have the
meaning set forth in the Loan Documents.
Subject to the terms hereof, effective as of the "Effective Date" (as defined
below), the Loan Documents are hereby amended as follows:
(a) The "Net Cash Flow" of Customer as of the end of its semi-annual fiscal
period dated June 30 shall not be less than $0.00. As used herein, "Net Cash
Flow" shall mean the (i) the sum of Customer's annual net after-tax income, any
non-recurring expenses and depreciation and similar non-cash charges, less (ii)
the sum of 50% of the current portion of Customer's long term debt, any
non-recurring income and any dividends or other distributions to its owners; all
as set forth on Customer's regular semi-annual financial statements prepared in
a manner consistent with the terms hereof.
(b) The "Net Cash Flow" of Customer as of the end of each of its fiscal years
shall not be less than $100,000.00. As used herein, "Net Cash Flow" shall mean
the (i) the sum of Customer's annual net after-tax income, any non-recurring
expenses and depreciation and similar non-cash charges, less (ii) the sum of the
current portion of Customer's long term debt, any non-recurring income and any
dividends or other distributions to its owners; all as set forth on Customer's
regular annual financial statements prepared in a manner consistent with the
terms hereof.
Except as expressly amended hereby, the Loan Documents shall continue in full
force and effect upon all of their terms and conditions.
By their execution of this Letter Agreement, the below-named Guarantors hereby
consent to the foregoing modifications to the Loan Documents, and hereby agree
that the "Obligations" under their respective Unconditional Guaranty and/or
agreements providing collateral shall extend to and include the Obligations of
Customer under the Loan Documents, as amended hereby.
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Sel-Leb Marketing, Inc.
August 3, 2000
Page No. 2
Customer and said Guarantors acknowledge, warrant and agree, as a primary
inducement to MLBFS to enter into this Agreement, that: (a) no Default or Event
of Default has occurred and is continuing under the Loan Documents; (b) each of
the warranties of Customer in the Loan Documents are true and correct as of the
date hereof and shall be deemed remade as of the date hereof; (c) neither
Customer nor any of said Guarantors have any claim against MLBFS or any of its
affiliates arising out of or in connection with the Loan Documents or any other
matter whatsoever; and (d) neither Customer nor any of said Guarantors have any
defense to payment of any amounts owing, or any right of counterclaim for any
reason under, the Loan Documents.
The obligations of MLBFS under this Letter Agreement are subject to its receipt
(where applicable) and satisfaction with the following:
All late fees and payments due in connection with Term Loan No.
9811551601 and Term Loan No. 9911550701 each in the name of Customer.
Provided that no Event of Default, or event which with the giving of notice,
passage of time, or both, would constitute an Event of Default, shall then have
occurred and be continuing under the terms of the Loan Documents, and the
condition specified above shall have been met to our satisfaction, the
amendments and agreements in this Letter Agreement will become effective on the
date (the "Effective Date") upon which: (a) Customer and the Guarantors shall
have executed and returned the duplicate copy of this Letter Agreement and the
other document enclosed herewith; and (b) an officer of MLBFS shall have
reviewed and approved this Letter Agreement and said other document as being
consistent in all respects with the original internal authorization hereof.
Notwithstanding the foregoing, if Customer and the Guarantors do not execute and
return the duplicate copy of this Letter Agreement and said other document
within 14 days from the date hereof, or if for any other reason (other than the
sole fault of MLBFS) the Effective Date shall not occur within said 14-day
period, then all of said amendments and agreements will, at the sole option of
MLBFS, be void.
Very truly yours,
Merrill Lynch Business Financial Services Inc.
By: /s/ Tony Lau TRP
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Tony Lau
Senior Relationship Manager
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Sel-Leb Marketing, Inc.
August 3, 2000
Page No. 3
Accepted:
Sel-Leb Marketing, Inc.
By: /s/ Jan S. Mirsky
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Printed Name: /s/ Jan S. Mirsky
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Title: Executive Vice President
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Approved:
Ales Signature Ltd.
By: /s/ Jan S. Mirsky
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Printed Name: /s/ Jan S. Mirsky
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Title: Executive Vice President
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