Amendment No. 4 to Loan and Security Agreement between GMAC Commercial Finance LLC and Parlux Fragrances, Inc. and Parlux Ltd.

Summary

This agreement is an amendment to an existing Loan and Security Agreement between GMAC Commercial Finance LLC and Parlux Fragrances, Inc. and Parlux Ltd. It updates certain terms, including the loan term, fees, and some financial covenants, and requires the borrowers to pay a $15,000 amendment fee. The amendment also includes a release of claims by the borrowers against the lender related to the original agreement. All other terms of the original agreement remain unchanged, and the amendment is effective once signed by all parties.

EX-4.32 2 ex432.txt GMAC COMMERCIAL FINANCE LLC Exhibit 4.32 GMAC COMMERCIAL FINANCE LLC 1290 Avenue of the Americas New York, New York 10104 as of January 4, 2005 PARLUX FRAGRANCES, INC. PARLUX LTD. 3725 S.W. 30th Avenue Ft. Lauderdale, Florida 33312 Re: Amendment No. 4 to Loan and Security Agreement ---------------------------------------------- Gentlemen: Reference is made to certain financing arrangements by and among PARLUX FRAGRANCES, INC. ("Fragrances") and PARLUX LTD. (each individually, a "Borrower" and collectively, the "Borrowers") and GMAC Commercial Finance LLC, as successor by merger to GMAC Commercial Credit LLC ("Lender") pursuant to certain financing agreements with Borrowers, including, but not limited to, the Revolving Credit and Security Agreement, dated as of July 20, 2001 (as amended, the "Credit Agreement") entered into by and among Borrowers and Lender (the foregoing, together with all related documents, agreements, guarantees, instruments or notes delivered in connection therewith, as the same may now exist or may hereafter be amended, modified, supplemented, renewed or extended, are collectively referred to herein as the "Documents"). All capitalized terms used and not otherwise defined herein shall have the respective meanings ascribed to them in the Credit Agreement. Borrowers have requested that Lender amend certain provisions of the Credit Agreement, which Lender has agreed to do subject to the terms and provisions set forth in this letter agreement (hereinafter, this "Amendment"). In consideration of the foregoing, and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, and the respective agreements, warranties and covenants contained herein, the parties hereto agree as follows: 1. AMENDMENTS TO CREDIT AGREEMENT. The Credit Agreement is hereby amended, as of the date hereof, as follows: (a) The definition of "Term" as set forth in Section 1.1 of the Credit Agreement is hereby amended and restated in its entirety as follows: ""Term" shall mean the Closing Date through July 20, 2006, as same may be extended in accordance with the provisions of Section 13.1 hereof." 1 (b) Section 3.3(c) of the Credit Agreement is hereby amended and restated in its entirety as follows: "(c) Unused Line Fee. If, for any month during the Term, the average daily unpaid balance of the Revolving Advances for each day of such month does not equal the Maximum Loan Amount, then Borrowers shall pay to Lender a fee at a rate equal to one-quarter of one percent (0.25%) per annum on the amount by which the Maximum Loan Amount exceeds such average daily unpaid balance. Such fee shall be payable to Lender in arrears on the last day of each month." (c) Section 3.3(e) of the Credit Agreement is hereby amended and restated in its entirety as follows: "(e) Collateral Monitoring Fee. Borrowers shall pay to Lender a collateral monitoring fee (the "Collateral Monitoring Fee") for the immediately preceding month in an amount equal to (i) Five Thousand ($5,000) Dollars if during such immediately preceding month Revolving Advances were at any time outstanding, and (ii) Two Thousand Five Hundred ($2,500) Dollars if during such immediately preceding month no Revolving Advances were at any time outstanding. The Collateral Monitoring Fee shall be fully earned when due and shall not be subject to refund, rebate or proration for any reason whatsoever." (d) Section 6.5 of the Credit Agreement (Tangible Net Worth) is hereby amended and restated in its entirety as follows: "[INTENTIONALLY OMITTED]" (e) Section 6.8 of the Credit Agreement (Minimum Funded Debt/EBITDA Ratio) is hereby amended and restated in its entirety as follows: "[INTENTIONALLY OMITTED]" (f) Section 13.1(c) of the Credit Agreement is hereby amended and restated in its entirety as follows: "(c) one percent (1%) of the Maximum Loan Amount if the Prepayment Date occurs on or after the second anniversary of the Closing Date to and including the date immediately preceding the fifth (5th) anniversary of the Closing Date or prior to the end of any extended term." 2. AMENDMENT FEE. In consideration of the amendments set forth herein, Borrowers unconditionally agree to pay to Lender an amendment fee in the amount 2 of Fifteen Thousand ($15,000) Dollars, which amendment fee shall be fully earned and payable as of the date hereof. The amendment fee shall not be subject to refund, rebate or proration for any reason whatsoever, and shall be charged by Lender to any account of Borrowers maintained by Lender as of the date hereof. 3. RELEASE. As material consideration for the execution of this agreement by Lender and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, effective as of the date hereof, each Borrower for itself and on behalf of its respective directors, officers, administrative agents, employees, representatives, successors and assigns (collectively, the "releasors") hereby waives, releases, remises, acquits and discharges Lender and all of its affiliates, directors, officers, administrative agents, employees, representatives, shareholders, attorneys, accountants, consultants, advisors, successors and assigns (Lender, together with the foregoing collectively, the "releasees") of and from any and all controversies, damages, costs, losses, causes of action, suits, judgments, claims, recoupments, counter-claims or demands, of every type, kind, nature, description or character, whether now existing or that could, might, or may be claimed to exist, of whatever kind or name, whether known or unknown, liquidated or unliquidated, fixed or contingent, foreseeable or unforeseeable, each as though fully set forth herein at length, in law, admiralty or equity (any of the foregoing, a "claim"), which any of the releasors previously had from the beginning of the world or now have against any of the releasees through the date hereof, related to or connected with the Credit Agreement and the other Documents, the loans, advances or other financial accommodations provided by Lender to Borrowers or any of them or the transactions contemplated by any of the foregoing. 4. NO OTHER MODIFICATIONS; NO OTHER EVENT OF DEFAULT. Except as specifically set forth herein, no other changes or modifications to the Credit Agreement or any of the other Documents are intended or implied, and, in all other respects, the Credit Agreement and the other Documents shall continue to remain in full force and effect in accordance with their respective terms as of the date hereof. Except as specifically set forth herein, nothing contained herein shall evidence a waiver or amendment by Lender of any other provision of the Documents. Lender hereby reserves all rights and remedies granted to Lender under the Documents, applicable law or otherwise and nothing contained herein shall be construed to limit, impair or otherwise affect the right of Lender to declare a default or an Event of Default with respect to any future non-compliance with any covenant, term or provision of the Documents now or hereafter executed and delivered in connection therewith. Borrowers hereby represent and warrant that no Event of Default exists after giving effect to the provisions of this Amendment. 5. ENTIRE AGREEMENT. The terms and provisions of this Amendment shall be for the benefit of the parties hereto and their respective successors and assigns; no other person, firm, entity or corporation shall have any right, benefit or interest under this Amendment. This Amendment sets forth the entire agreement and understanding of the parties with respect to the matters set forth herein. This Amendment cannot be changed, modified, amended or terminated except in a writing executed by the party to be charged. 3 6. EFFECTIVENESS. This Amendment shall not be effective unless and until Lender shall have received an original or copy hereof, duly executed and delivered by Borrowers. 7. COUNTERPARTS. This Amendment may be signed in counterparts, each of which shall be an original and all of which taken together constitute one amendment. In making proof of this Amendment, it shall not be necessary to produce or account for more than one counterpart signed by the party to be charged. Delivery of an executed counterpart of this Amendment by telefacsimile shall have the same force and effect as the delivery of an original executed counterpart of this Amendment. Any party delivering an executed counterpart of this Amendment by telefacsimile shall also deliver an original executed counterpart, but the failure to do so shall not affect the validity, enforceability or binding effect of this Amendment. Very truly yours, GMAC COMMERCIAL FINANCE LLC By: /s/ Edward Hill --------------------- Senior Vice President ACKNOWLEDGED AND AGREED: PARLUX FRAGRANCES, INC. By: /s/ Frank A. Buttacavoli . --------------------------------- Executive V.P. / COO / CFO PARLUX LTD. By: /s/ Frank A. Buttacavoli . --------------------------------- Executive V.P. / COO / CFO 4