EXHIBIT 10.45
SECOND AMENDMENT
TO LOAN AND SECURITY AGREEMENT AND WAIVER
This Second Amendment To Loan And Security Agreement and Waiver (the
"Second Amendment") dated as of October 9, 2003, is entered into by and among
Xxxx Microproducts Inc., a California corporation ("Borrower Agent"), Xxxx
Microproducts - Future Tech, Inc., a California corporation ("Future Tech"),
Xxxxx Data, Inc., a Minnesota corporation ("Xxxxx"), Xxxx Microproducts Canada -
Tenex Data ULC, a Nova Scotia unlimited liability company ("Tenex"), Total Tec
Systems, Inc., a New Jersey corporation ("Total Tec", and together with Borrower
Agent, Future-Tech, Tenex and Xxxxx individually, a "Borrower" and collectively,
"Borrowers"), Xxxx Microproducts Canada Inc., a California corporation ("Xxxx
Micro Canada"), Xxxx Microproducts Mexico, S.A. de C.V., a Mexican corporation
and a newly formed subsidiary of Future Tech ("Xxxx Micro Mexico"), Xxxx
Microproducts Mexico Shareholder, LLC, a Florida limited liability company
("Mexico Shareholder"), and Congress Financial Corporation (Western) in its
capacity as administrative, collateral and syndication agent for the financial
institutions from time to time parties to the Loan Agreement (as defined below)
as lenders (each individually, a "Lender" and collectively, "Lenders") (in such
capacity, "Administrative Agent"), with reference to the following facts:
RECITALS
A. Lenders are extending various secured financial accommodations to
Borrowers upon the terms of that certain Loan and Security Agreement dated as of
May 14, 2001 (as amended, supplemented or modified from time to time, the "Loan
Agreement").
B. Future Tech has recently formed two new Subsidiaries, Mexico
Shareholder and Xxxx Micro Mexico.
C. Borrower Agent, Future Tech and Xxxx Micro Mexico, as buyers ("EBM
Buyers") have entered into that certain Asset Purchase Agreement, dated as of
October 10, 2003 (together with all of the documents related thereto,
collectively referred to herein as the "EBM Acquisition Documents"), with EBM
Mayorista S.A. de C.V., a Mexican corporation ("EBM Seller"), Empresas Berny
Mayoreo, Inc., a Florida corporation, Xxxxxxxx Xxxxx Xxxxx and Francisco Xxxxx
Xxxxx; pursuant to which EBM Buyers intend to purchase all or substantially all
the assets of the EBM Seller (the "EBM Acquisition").
D. Borrowers, Lenders and Administrative Agent desire to amend the Loan
Agreement upon the terms and conditions set forth herein.
AMENDMENT
NOW THEREFORE, in consideration of the foregoing and for other good and
valuable consideration, the receipt and adequacy of which are hereby
acknowledged by each party hereto, Borrowers, Lenders and Administrative Agent
hereby agree as follows:
1. Defined Terms. Unless otherwise specified herein, any capitalized terms
defined in the Loan Agreement shall have the same respective meanings as used
herein.
(a) The following definitions are hereby added in alphabetical order to
Section 1 of the Loan Agreement:
"Xxxx Micro Mexico' shall mean Xxxx Microproducts Mexico, S.A. de C.V., a
Mexican corporation and a newly formed subsidiary of Future Tech and
Mexico Shareholder."
"EBM Acquisition' shall mean the purchase of all or substantially all of
the assets of EBM Seller by EBM Buyers pursuant to the terms of the EBM
Acquisition Documents."
"EBM Acquisition Documents' shall mean that certain Asset Purchase
Agreement to be entered into by and between EBM Buyers, EBM Seller,
Empresas Berny Mayoreo, Inc., a Florida corporation, Xxxxxxxx Xxxxx Xxxxx
and Francisco Xxxxx Xxxxx, in form and substance satisfactory to
Administrative Agent."
"EBM Buyers' shall mean Borrower Agent, Future Tech and Xxxx Micro
Mexico."
"EBM Seller' shall mean EBM Mayorista S.A. de CN., a Mexican corporation."
"Xxxx Micro Mexico Pledge Agreement' shall mean a stock pledge agreement,
in form and substance satisfactory to Administrative Agent, executed and
delivered by Future Tech and Mexico Shareholder, to Administrative Agent,
for the benefit of Lenders, with respect to 100% of the stock of Xxxx
Micro Mexico owned by Future Tech and Mexico Shareholder."
"Mexico Shareholder' shall mean Xxxx Microproducts Mexico Shareholder,
LLC, a Florida limited liability company."
(b) The definition of "Financing Agreements" is hereby amended to include
the "Xxxx Micro Mexico Pledge Agreement."
(c) The reference to the defined term "Guarantor" in the introduction to
the Loan Agreement is hereby deleted and replaced by the term "Xxxx Micro
Canada."
(d) The following definition is hereby added in alphabetical order to
Section 1 of the Loan Agreement:
"Xxxx Micro Canada' shall have the meaning set forth in the introductory
paragraph hereof."
(e) The definition of "Guarantor" as set forth in Section 1.54 of the Loan
Agreement shall be amended and restated in its entirety to read as follows:
"Guarantor" or `Guarantors' shall mean Xxxx Micro Canada, Xxxx Micro
Mexico, Mexico Shareholder, and any other guarantor, endorser, acceptor,
surety or other
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Person liable on or with respect to the Obligations or who is the owner of
any property which is security for the Obligations, other than Borrowers."
(f) The definition of "Subject Subsidiary" as set forth in Section 1.96 of
the Loan Agreement shall be amended and restated in its entirety to read as
follows:
"Subject Subsidiary' shall mean all Subsidiaries of the Borrowers
organized under the laws of any state or any political jurisdiction of any
country in North America, Central America, or South America, except any
Subsidiary that is itself a Borrower or a Guarantor and except for Xxxx
Microproducts Europe Inc., a California corporation."
2. Encumbrances. The following is hereby added to Section 9.8 of the Loan
Agreement:
"(j) the liens and security interests in the assets of Xxxx Micro Mexico
granted by Xxxx Micro Mexico to EBM Seller pursuant to the EBM Acquisition
Documents; so long as Xxxx Micro Mexico does not create, incur, assume or
suffer to exist any other security interest, mortgage, pledge, lien,
charge or other encumbrance of any nature whatsoever on any of its assets
or properties, except as provided in this Section 9.8"
3. Indebtedness. The following is hereby added to Section 9.9 of the Loan
Agreement:
"(j) Indebtedness of Xxxx Micro Mexico owed to EBM Seller pursuant to the
EBM Acquisition Documents."
4. Loans, Investment, Guarantees, Etc. The following is hereby added to Section
9.10 of the Loan Agreement:
"(n) intercompany receivables owed by any Affiliate of a Borrower that is
not a "Borrower" hereunder to any Borrower, so long as no Event of Default
exists and is continuing or would result therefrom and the amount of such
intercompany receivable does not exceed $15,000,000 in the aggregate at
any one time, which amount shall include, without limitation, any
intercompany receivables owed by Xxxx Micro Mexico to any Borrower
pursuant to clause (o) below; and
(o) investments, loans and advances, including Indebtedness in the form of
intercompany receivables, made by any Borrower for the benefit of Xxxx
Micro Mexico so long as no Event of Default exists and is continuing or
would result therefrom and the amount of such investments, loans and
advances do not exceed $10,000,000 in the aggregate at any one time."
5. Waivers.
(a) Pursuant to Section 9.10 of the Loan Agreement, no Borrower, Guarantor
or Subject Subsidiary is permitted to (i) form or acquire any Subsidiaries, (ii)
make investments by capital contributions, dividend or otherwise, in a Person,
or (iii) purchase all or substantially all of the assets of any Person.
Administrative Agent hereby permits (i) the formation of Xxxx Micro
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Mexico and Mexico Shareholder for the purpose of effectuating the EBM
Acquisition, (ii) the capital contribution made by Borrower Agent to Future Tech
for the benefit of Xxxx Micro Mexico for the purpose of effectuating the EBM
Acquisition, subject to the provisions set forth in Section 9.10(o) of the Loan
Agreement, so long as the amount of Consolidated Net Worth required to be
maintained by Borrower Agent at all times pursuant to Section 9.13 of the Loan
Agreement is increased by $1 for each $1 Borrower Agent contributed to Future
Tech for the benefit of Xxxx Micro Mexico, and (iii) the EBM Buyers to enter
into the EBM Acquisition Documents and effectuate the EBM Acquisition in
accordance with the terms thereof.
(b) This waiver shall be effective only for the specific provisions
referenced in Section 5 of this Second Amendment, and in no event shall this
waiver be deemed to be a waiver of enforcement of Administrative Agent's or any
Lender's rights with respect to any other Defaults or Events of Default now
existing or hereafter arising. Except as specifically set forth in this Second
Amendment, nothing contained in Section 5 of this Agreement shall diminish,
prejudice or waive any of Administrative Agent's or any Lender's rights and
remedies under the Loan Agreement, any other Financing Agreements or applicable
law, and Administrative Agent hereby reserves all of such rights and remedies.
6. Conditions to Effectiveness. The effectiveness of this Second Amendment is
subject to the receipt by Administrative Agent or the completion by Borrowers of
the following:
(a) Counterparts of this Second Amendment, executed by each of the parties
hereto;
(b) Xxxx Micro Mexico and Mexico Shareholder shall each have executed and
delivered to Administrative Agent for the benefit of the Lenders, a general
continuing guaranty, in form and substance satisfactory to Administrative Agent;
(c) Future Tech and Mexico Shareholder shall have executed and delivered
to Administrative Agent, for the benefit of the Lenders, the Xxxx Micro Mexico
Pledge Agreement, together with the certificates, if any, representing the
shares of stock of Xxxx Micro Mexico, pledged thereunder, as well as stock
powers with respect thereto endorsed in blank;
(d) Borrower Agent shall have delivered to Administrative Agent an
executed copy of the EBM Acquisition Documents; and
(e) Borrower Agent shall have paid to Administrative Agent, for the
ratable benefit of the Lenders, a waiver fee of $25,000, which is due and
payable as of the date of this Amendment.
7. Guarantor's Acknowledgement. Xxxx Micro Canada hereby acknowledges and
consents to the terms, conditions and provisions of this Second Amendment and to
the transactions contemplated hereby. In addition, Xxxx Micro Canada hereby
reaffirms its obligations under its Guarantee, dated as of May 14, 2001,
delivered to lender in connection with the Loan Agreement, and agrees that it is
and shall remain responsible for the obligations of Borrowers under the Loan
Agreement as amended by this Second Amendment.
8. Representations and Warranties. Each Borrower reaffirms that the
representations and warranties made to Lenders and Administrative Agent in the
Loan Agreement and other
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Financing Agreements are true and correct in all material respects as of the
date of this Second Amendment as though made as of such date and after giving
effect to this Second Amendment. In addition, each Borrower makes the following
representations and warranties to Lenders and Administrative Agent, which shall
survive the execution of this Second Amendment.
(a) The execution, delivery and performance of this Second Amendment are
within each Borrower's powers, have been duly authorized by all necessary
actions, have received all necessary governmental approvals, if any, and do not
contravene any law or any contractual restrictions binding on each Borrower.
(b) This Second Amendment is the legal, valid and binding obligation of
each Borrower enforceable against each Borrower in accordance with its terms,
except as enforcement may be limited by bankruptcy, insolvency, moratorium and
other similar laws affecting the rights of creditors generally.
(c) No event has occurred and is continuing, after giving effect to this
Second Amendment, which constitutes an Event of Default under the Loan Agreement
or any other of the Financing Agreements, or would constitute such an Event of
Default but for the requirement that notice be given or time elapse or both.
9. Continuing Effect of Financing Agreements. To the extent of any
inconsistencies between the terms of this Second Amendment and the Loan
Agreement, this Second Amendment shall govern. In all other respects, the Loan
Agreement and other Financing Agreements shall remain in full force and effect
and are hereby ratified and confirmed.
10. References. Upon the effectiveness of this Second Amendment, each reference
in any Financing Agreements to "the Agreement", "hereunder," "herein," "hereof,"
or of like import referring to the Loan Agreement shall mean and be a reference
to the Loan Agreement as amended hereby.
11. Governing Laws. This Second Amendment, upon becoming effective, shall be
deemed to be a contract made under, governed by, and subject to, and shall be
construed in accordance with, the internal laws of the State of California.
[signature pages to follow]
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IN WITNESS WHEREOF, the parties hereto, intending to be legally bound hereby,
have executed this Amendment as of the date first set forth above, to become
effective in the manner set forth above.
"BORROWERS"
XXXX MICROPRODUCTS INC. XXXX MICROPRODUCTS CANADA INC.
By: /s/ Xxx Xxxxxx By: /s/ Xxx Xxxxxx
--------------------------------------- ---------------------------------------
Name: Xxx Xxxxxx Name: Xxx Xxxxxx
------------------------------------- -------------------------------------
Title: CFO Title: CFO
------------------------------------ ------------------------------------
TOTAL TEC SYSTEMS, INC. XXXX MICROPRODUCTS MEXICO, SHAREHOLDER, LLC
By: /s/ Xxx Xxxxxx By: /s/ Xxx Xxxxxx
--------------------------------------- ---------------------------------------
Name: Xxx Xxxxxx Name: Xxx Xxxxxx
------------------------------------- -------------------------------------
Title: CFO Title: CFO
------------------------------------ ------------------------------------
XXXX MICROPRODUCTS - FUTURE TECH, INC. XXXX MICROPRODUCTS MEXICO, S.A. de C.V.
By: /s/ Xxx Xxxxxx By: /s/ Xxx Xxxxxx
--------------------------------------- ---------------------------------------
Name: Xxx Xxxxxx Name: Xxx Xxxxxx
------------------------------------- -------------------------------------
Title: CFO Title: CFO
------------------------------------ ------------------------------------
XXXXX DATA, INC. "ADMINISTRATIVE AGENT"
By: /s/ Xxx Xxxxxx CONGRESS FINANCIAL
--------------------------------------- CORPORATION (WESTERN)
Name: Xxx Xxxxxx
-------------------------------------
Title: CFO
By: /s/ Xxxx Xxxxxxxx
---------------------------------------
Name: Xxxx Xxxxxxxx
-------------------------------------
Title: VP
------------------------------------
XXXX MICROPRODUCTS CANADA -
TENEX DATA ULC
By: /s/ Xxx Xxxxxx
---------------------------------------
Name: Xxx Xxxxxx
-------------------------------------
Title: CFO
------------------------------------
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