SECOND AMENDMENT TO AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT
EXHIBIT
10.1
SECOND
AMENDMENT
TO AMENDED AND RESTATED LOAN
AND SECURITY AGREEMENT
This
Second Amendment To Amended and Restated Loan And Security Agreement (this
“Amendment”)
dated as of February 17, 2009, is entered into by and among Xxxx Microproducts
Inc., a California corporation (“Administrative
Borrower”), 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”),
Forefront Graphics US Inc., an Ontario corporation (“Forefront” and
together with Administrative Borrower, Future-Tech, Xxxxx, Tenex and Total Tec,
individually, a “Borrower” and
collectively, “Borrowers”), Xxxx
Microproducts Canada Inc., a California corporation (“Xxxx Micro Canada”),
Xxxx Microproducts Mexico Shareholder, LLC, a Florida limited liability company
(“Mexico
Shareholder” and together with Xxxx Micro Canada, collectively, “Guarantors”),
Wachovia Capital Finance Corporation (Western), in its capacity as
administrative 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, “Agent”), and Required
Lenders (as defined in the Loan Agreement), with reference to the following
facts:
RECITALS
A. Lenders
are extending various secured financial accommodations to Borrowers upon the
terms of that certain Amended and Restated Loan and Security Agreement dated as
of September 29, 2008 among Borrowers, Guarantors, Lenders, Wachovia Capital
Markets, LLC in its capacity as lead arranger and sole bookrunner, Agent and
Bank of America, N.A., in its capacity as co-agent, as amended by that certain
First Amendment to Amended and Restated Loan and Security Agreement dated as of
November 10, 2008 (the “Loan
Agreement”).
B. Borrowers,
Guarantors, Required Lenders and Agent now 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, Guarantors, Required Lenders and 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.
2. Amendments to Loan
Agreement.
(a) Interest
Rate. Clause (a) of the definition of “Interest Rate” in
Section 1.75 of the Loan Agreement is hereby amended and restated to read in its
entirety as follows:
“(a) Subject
to clause (b) below, (i) as to Prime Rate Loans, a rate per annum equal to the
greater of (A) five percent (5.0%) or (B) the applicable Prime Rate Margin plus
the Prime Rate, and (ii) as to Eurodollar Rate Loans, a rate per annum
equal to the greater of (A) five percent (5.0%) or (B) the applicable Eurodollar
Rate Margin plus the Adjusted Eurodollar Rate (based on the London Interbank
Offered Rate applicable for the Interest Period selected by a Borrower (or on
its behalf by Administrative Borrower) as in effect three (3) Business Days
after the date of receipt by Agent of the request by or on behalf of such
Borrower for such Eurodollar Rate Loans in accordance with the terms hereof,
whether such rate is higher or lower than any rate previously quoted to such
Borrower or Administrative Borrower).”
(b) Inventory
Appraisals. The following is hereby added at the end of
Section 7.3(d) of the Loan Agreement:
“In
addition to the foregoing appraisals, Borrowers shall, at their expense, deliver
or cause to be delivered to Agent desktop appraisals as to Inventory in form,
scope and methodology acceptable to Agent in its sole discretion, on a monthly
basis through and including December 2009 and, if requested by Agent in its sole
discretion, on a monthly basis thereafter; provided, however, that if
Borrowers furnish Agent with a full appraisal as to Inventory pursuant to the
foregoing provisions for any month, a desktop appraisal as to Inventory will not
be required for such month.”
(c) Financial
Statements. The proviso at the end of the first sentence in
Section 9.6(a) of the Loan Agreement is hereby amended and restated to read in
its entirety as follows:
“provided, that, notwithstanding
anything contained in this Section 9.6(a) to the
contrary, Borrowers hereby agree that they shall deliver the audited
consolidated financial statements and associated documentation that would
otherwise be required under Clause (iii) above
for the 2007 and 2008 fiscal years, on or before June 30, 2009, and the Agent
and Lenders agree that the failure of Borrowers to deliver any such audited
consolidated financial statements and associated documentation prior to June 30,
2009 shall not constitute an Event of Default hereunder.”
(d) Fixed Charge Coverage
Ratio. Section 9.13 of the Loan Agreement is hereby amended
and restated to read in its entirety as follows:
“9.13 Fixed Charge Coverage
Ratio. Administrative Borrower and its Subsidiaries, on a
consolidated basis, shall achieve, when measured for each fiscal period of
Administrative Borrower set forth below, a Fixed Charge Coverage Ratio of not
less than the ratio set forth opposite such fiscal period:
|
Fiscal Period
|
Minimum Fixed Charge Coverage
Ratio
|
|
For
the 3 month period ending March 31, 2009
|
0.35
to one
|
|
For
the 3 month period ending June 30, 2009
|
0.75
to one
|
|
For
the 3 month period ending September 30, 2009
|
1.10
to one
|
|
For
the 6 month period ending December 31, 2009
|
1.10
to one
|
|
For
the 9 month period ending March 31, 2010
|
1.10
to one
|
|
For
each 12 month period ending on the last day of each fiscal quarter after
March 31, 2010
|
1.10
to one”
|
(e) Excess
Availability. Section 9.14 of the Loan Agreement is hereby
amended and restated to read in its entirety as follows:
“9.14 Excess
Availability. Borrowers shall maintain an average daily Excess
Availability during each calendar month, as calculated at the end of such
calendar month, of not less than ten percent (10%) of the lesser of (a) the
Revolving Loan Limit or (b) the average daily Borrowing Base during such
calendar month; provided, however, that Excess Availability shall not be less
than $15,000,000 at any time.”
3. Conditions to
Effectiveness. The effectiveness of this Amendment is subject
to the receipt by Agent or the satisfaction of the following conditions
precedent:
(a) Counterparts
of this Amendment duly executed and delivered by Borrowers, Guarantors, Agent
and Required Lenders;
(b) A stock
pledge agreement duly executed and delivered by Xxxx Micro Canada in favor of,
and in form and substance satisfactory to, Agent with respect to 65% of the
issued and outstanding shares of Capital Stock of Tenex;
(c) Original
stock certificates representing all of the issued and outstanding shares of
Capital Stock of Future Tech, Xxxxx, Tenex and Forefront in which Agent holds a
security interest, together with stock powers duly executed in blank
therefor;
(d) A fee
letter duly executed and delivered by Borrowers and Guarantors in favor of, and
in form and substance satisfactory to, Agent with respect to the agreed upon fee
payable to Agent for its own account;
(e) No Event
of Default or act, condition or event which with notice or passage of time or
both would constitute an Event of Default, shall exist;
(f) The
representations and warranties set forth herein and in the Loan Agreement shall
be true and correct; and
(g) All other
documents and legal matters in connection with the transactions contemplated by
this Amendment shall have been delivered or executed or recorded and shall be in
form and substance satisfactory to Agent.
4. Guarantors’
Acknowledgement. Guarantors each hereby acknowledge and
consent to the terms, conditions and provisions of this Amendment and to the
transactions contemplated hereby. Xxxx Micro Canada hereby reaffirms
its obligations under its Guarantee, dated as of May 14, 2001, and agrees
that it is and shall remain responsible for the Obligations of Borrowers under
the Loan Agreement as amended by this Amendment. Mexico Shareholder
hereby reaffirms its obligations under its Guarantee, dated as of October 9,
2003, and agrees that it is and shall remain responsible for the Obligations of
Borrowers under the Loan Agreement as amended by this Amendment.
5. Amendment
Fee. Borrowers shall pay an amendment fee in the amount of
$300,000 to Agent for the benefit of Lenders based upon their respective Pro
Rata Shares, which amendment fee shall be due and payable by Borrowers, and
fully earned by Lenders, on the date of this Amendment.
6. Representations and
Warranties. Each Borrower and Guarantor reaffirms that the
representations and warranties made to Lenders and Agent in the Loan Agreement
and other Financing Agreements are true and correct in all material respects as
of the date of this Amendment as though made as of such date and after giving
effect to this Amendment. In addition, each Borrower and Guarantor
makes the following representations and warranties to Lenders and Agent, which
shall survive the execution of this Amendment.
(a) The
execution, delivery and performance of this Amendment are within each Borrower’s
and Guarantor’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 any Borrower or
Guarantor.
(b) This
Amendment is the legal, valid and binding obligation of each Borrower and
Guarantor enforceable against each Borrower and Guarantor 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 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.
7. Continuing Effect of
Financing Agreements. To the extent of any inconsistencies
between the terms of this Amendment and the Loan Agreement, this 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.
8. References. Upon
the effectiveness of this 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.
9. Governing
Laws. This 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.
[remainder
of page intentionally left blank]
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”
|
“Guarantors”
|
|
XXXX
MICROPRODUCTS INC.
By: /s/ W. Xxxxxx
Xxxx
Name:
W. Xxxxxx
Xxxx
Title:
President &
Chief Executive
Officer
XXXX
MICROPRODUCTS – FUTURE TECH, INC.
By: /s/ Xxxxxx X.
Xxxxxx
Name:
Xxxxxx X.
Xxxxxx
Title:
Vice President
&
Secretary
|
XXXX
MICROPRODUCTS CANADA INC.
By: /s/
Xxxxxx X. Xxxxxx
Name:
Xxxxxx X.
Xxxxxx
Title:
Vice President &
Secretary
XXXX
MICROPRODUCTS MEXICO SHAREHOLDER, LLC
By: /s/ W.
Xxxxxx Xxxx
Name:
W.
Xxxxxx
Xxxx
Title:
Authorized
Representative
|
|
XXXXX
DATA, INC.
By: /s/ Xxxxxx X.
Xxxxxx
Name:
Xxxxxx X.
Xxxxxx
Title:
Vice President
&
Secretary
|
|
|
XXXX
MICROPRODUCTS CANADA – TENEX DATA ULC
By: /s/ Xxxxxx X.
Xxxxxx
Name:
Xxxxxx X.
Xxxxxx
Title:
Vice President
&
Secretary
|
|
|
TOTAL
TEC SYSTEMS, INC.
By: /s/
Xxxxxx X.
Xxxxxx
Name:
Xxxxxx X.
Xxxxxx
Title:
Vice President
&
Secretary
|
|
|
FOREFRONT
GRAPHICS US, INC.
By: /s/ Xxxxxx X.
Xxxxxx
Name:
Xxxxxx X.
Xxxxxx
Title:
Vice President
&
Secretary
|
|
|
“Agent
and Lenders”
WACHOVIA
CAPITAL FINANCE CORPORATION (WESTERN), as Agent and Lender
By: /s/ Xxxx Xxxxxxxx
Name:
Xxxx
Xxxxxxxx
Title:
Director
|
|
|
BANK
OF AMERICA, N.A., as Lender
By:
Name:
Title:
|
|
|
THE
CIT GROUP/BUSINESS CREDIT, INC., as Lender
By: /s/ Xxxx
Xxxxxxxxx
Name:
Xxxx
Xxxxxxxxx
Title:
Vice
President
|
|
|
XXXXX
FARGO FOOTHILL,
LLC, as Lender
By: /s/
Xxxxx Xxxxxxxxx
Name:
Xxxxx
Xxxxxxxxx
Title:
Vice
President
|
