EXHIBIT 10.43
FIRST AMENDMENT
TO LOAN AND SECURITY AGREEMENT
This First Amendment To Loan And Security Agreement (the "First
Amendment") dated as of December 31, 2002, 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", and together
with Borrower Agent, Future-Tech, and Xxxxx individually, a "Borrower" and
collectively, "Borrowers"), Xxxx Microproducts Canada Inc., a California
corporation ("Guarantor"), the financial institutions from time to time parties
to the Loan Agreement (as defined below) as lenders (each individually, a
"Lender" and collectively, "Lenders") and Congress Financial Corporation
(Western) in its capacity as administrative, collateral and syndication agent
for 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 (the "Loan Agreement").
B. Lenders wish to extend various secured financial accommodations to
Total Tec Systems, Inc. upon the same terms of the Loan Agreement.
C. 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 definition of "Borrower" as set forth in Section 1.12 of the
Loan Agreement shall be amended and restated in its entirety to read as follows:
"'Borrower' or 'Borrowers' shall have the meaning set forth in the
introductory paragraph hereof and shall also mean Total Tec, once
the conditions set forth in Section 4.3 hereof are met."
(b) The definition of "Borrowing Base" as set forth in Section 1.13 of
the Loan Agreement shall be amended and restated in its entirety to read as
follows:
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"'Borrowing Base' shall mean at any time:
(a) the sum of:
(i) eighty-five percent (85%) of the Net Amount of
the Eligible Accounts of Borrowers, provided that Revolving
Loans made in respect of Eligible Accounts that are Foreign
Accounts shall not exceed $20,000,000, plus
(ii) the lesser of
(A) the sum of
(1) solely with respect to Total
Tec and until such time Administrative Agent
conducts the next regularly scheduled
appraisal of Inventory, thirty-five percent
(35%) multiplied by the Value of Eligible
Inventory of Total Tec, plus
(2) with respect to all Borrowers
but excluding Total Tec during such time
Total Tec's advance rate on its Eligible
Inventory is determined in accordance with
clause (a)(ii)(A)(1) above, the lower of (y)
fifty percent (50%) multiplied by the Value
of Eligible Inventory of such Borrowers, or
(z) eighty-five percent (85%) of the Net
Recovery Percentage multiplied by the Value
of Eligible Inventory of such Borrowers, or
(B) the Inventory Loan Limit, minus
(b) reserves to reflect outstanding Letter of Credit
Accommodations as provided in Section 2.2 hereof, minus
(c) the Dilution Reserve, minus
(d) the Priority Payables Reserve, minus
(e) the Bank Products Reserve, minus
(f) all other reserves (including, without limitation,
reserves with respect to security interests or liens of third parties
permitted hereunder or in connection with litigation) which
Administrative Agent may, in good faith, deem necessary or desirable to
maintain, including, without limitation, reserves for any amounts which
Administrative Agent or any Lender may need to pay in the future for
the account of any Borrower or Guarantor. Without limiting the reserves
Administrative Agent may establish, Administrative Agent may establish
reserves for (u) payments owing to RSA and its Affiliates, whether
under the RSA Note or otherwise, (v) payments that may become due and
payable by any Borrower under any foreign exchange contract upon the
commencement of any foreign exchange contracts, (w) any exposure of any
Borrower
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on account of settlements on foreign exchanges, (x) daylight overdrafts
on foreign exchanges, (y) past due trade payables, and (z) book
overdrafts and held checks. "
(c) The definition of "Eurodollar Rate Margin" as set forth in Section
1.43 of the Loan Agreement shall be amended and restated in its entirety to read
as follows:
"'Eurodollar Rate Margin' shall mean (a) two and one-quarter
percent (2.25%) if the average daily principal balance of Revolving
Loans during the immediately preceding calendar month is equal to
or less than $60,000,000, (b) two and one-half percent (2.5%) if
the average daily principal balance of Revolving Loans during such
period is in excess of $60,000,000 but less than or equal to
$120,000,000, and (c) two and three-quarter percent (2.75%) if the
average daily principal balance of Revolving Loans during such
period is in excess of $120,000,000 but less than or equal to
$160,000,000. If the Borrower Agent completes an offering of its
equity securities in which the net proceeds are at least
$50,000,000 (which for purposes of this definition, such amount of
net proceeds shall not include any amount of proceeds distributed
by Borrower Agent to any other Person that is not a Borrower
hereunder, as permitted pursuant to the terms of this Agreement),
Borrowers may request that Lenders reduce the Eurodollar Rate
Margin by up to one-quarter of one percent (0.25%). Lenders may,
subject to Section 3.3(d), accede to or refuse such request in
their sole discretion."
(d) The definition of "Final Maturity Date" as set forth in Section
1.49 of the Loan Agreement shall be amended and restated in its entirety to read
as follows:
"'Final Maturity Date' shall mean May 31, 2005."
(e) The definition of "Interest Period" as set forth in Section 1.58 of
the Loan Agreement shall be amended and restated in its entirety to read as
follows:
"'Interest Period' shall mean for any Eurodollar Rate Loan, a
period of approximately one (1), two (2), three (3), or six (6)
months duration as a Borrower (or Borrower Agent on behalf of such
Borrower) may elect, the exact duration to be determined in
accordance with the customary practice in the applicable Eurodollar
Rate market; provided that no Borrower (and Borrower Agent on
behalf of such Borrower) may elect an Interest Period which will
end after the last day of the then-current term of this Agreement."
(f) The definition of "Inventory Loan Limit" as set forth in Section
1.62 of the Loan Agreement shall be amended and restated in its entirety to read
as follows:
"'Inventory Loan Limit' shall mean $80,000,000."
(g) The definition of "Prime Rate Margin" as set forth in Section 1.78
of the Loan Agreement shall be amended and restated in its entirety to read as
follows:
"'Prime Rate Margin' shall mean (a) zero percent (0%) if the
average daily principal balance of Revolving Loans during the
immediately preceding calendar
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month is equal to or less than $60,000,000, (b) one-quarter of one
percent (0.25%) if the average daily principal balance of Revolving
Loans during such period is in excess of $60,000,000 but less than
or equal to $120,000,000, and (c) one-half of one percent (0.5%) if
the average daily principal balance of Revolving Loans during such
period is in excess of $120,000,000 but less than or equal to
$160,000,000. If the Borrower Agent completes an offering of its
equity securities in which the net proceeds are at least
$50,000,000 (which for purposes of this definition, such amount of
net proceeds shall not include any amount of proceeds distributed
by Borrower Agent to any other Person that is not a Borrower
hereunder, as permitted pursuant to the terms of this Agreement),
Borrowers may request that Lenders reduce the Prime Rate Margin by
up to one-quarter of one percent (0.25%). Lenders may, subject to
Section 3.3(d), accede to or refuse such request in their sole
discretion."
(h) The definition of "Revolving Loan Commitment" as set forth in
Section 1.88 of the Loan Agreement shall be amended and restated in its entirety
to read as follows:
"'Revolving Loan Commitment' shall mean, at any time, as to each
Lender, the principal amount set forth below designated as the
Revolving Loan Commitment or on Schedule 1 to the Assignment and
Acceptance Agreement pursuant to which such Lender became a Lender
hereunder in accordance with the provisions of Section 13.6 hereof,
as the same may be adjusted from time to time in accordance with
the terms hereof; sometimes being collectively referred to herein
as 'Revolving Loan Commitments':
REVOLVING LOAN
LENDER COMMITMENT PRO RATA SHARE
---------------------------------- ------------------------------- -----------------------------
Congress Financial Corporation $50,000,000 31.250%
(Western)
The CIT Group /Business Credit, $35,000,000 21.875%
Inc.
Bank of America, N.A. $30,000,000 18.750%
PNC Bank, national association $25,000,000 15.625%
LaSalle Business Credit, Inc. $20,000,000 12.500%
(i) The definition of "Revolving Loan Limit" as set forth in Section
1.89 of the Loan Agreement shall be amended and restated in its entirety to read
as follows:
"'Revolving Loan Limit' shall mean $160,000,000."
(j) The term "Total Tec" shall be added to Section 1 of the Loan
Agreement in alphabetical order and shall read in its entirety as follows:
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"'Total Tec' shall mean Total Tec Systems, Inc., a New Jersey
corporation."
2. Early Termination Fee and Waiver of Early Termination Fee.
(a) The first sentence of Section 3.3(d) of the Loan Agreement shall be
amended and restated in its entirety to read as follows:
"(d) If for any reason this Agreement is terminated prior to the
Final Maturity Date, in view of the impracticality and extreme
difficulty of ascertaining actual damages and by mutual agreement
of the parties as to a reasonable calculation of Administrative
Agent's and Lenders' lost profits as a result thereof, Borrowers
agree to pay to Administrative Agent, for the benefit of Lenders
based upon their respective Pro Rata Shares, upon the effective
date of such termination an early termination fee equal to (i) one
percent (1.0%) of the Revolving Loan Limit if the effective date of
such termination is on or prior to May 31, 2004, and (ii) one-half
of one percent (0.5%) of the Revolving Loan Limit if the effective
date of such termination is after May 31, 2004 but before November
30, 2004. The parties acknowledge and agree that no early
termination fee is due if any such termination occurs on the Final
Maturity Date."
(b) Clause (A)(3) of Section 3.3(d) of the Loan Agreement shall be
amended and restated in its entirety to read as follows:
"(3) a refinancing by First Union National Bank (or its
successors), if such refinancing occurs after Borrower Agent has
completed a sale of its equity securities resulting in net proceeds
of at least $50,000,000 (which for purposes of this section, such
amount of net proceeds shall not include any amount of proceeds
distributed by Borrower Agent to any other Person that is not a
Borrower hereunder, as permitted pursuant to the terms of this
Agreement) and Lenders have refused a request by Borrowers to
reduce the Prime Rate Margin and the Eurodollar Rate Margin by up
to one-quarter of one percent (0.25%), or"
3. Conditions Precedent. The following shall be added as Section 4.3 of the Loan
Agreement:
"4.3 Conditions Precedent to Total Tec becoming a Borrower and
to Initial Revolving Loans and Letter of Credit Accommodations to Total
Tec. Each of the following is a condition precedent to Total Tec
becoming a Borrower and Administrative Agent and Lenders making the
initial Revolving Loans and providing the initial Letter of Credit
Accommodations hereunder to Total Tec:
(a) Administrative Agent shall have received, in form and
substance satisfactory to Administrative Agent, all releases,
terminations and such other documents as Administrative Agent may
request, including, but not limited to, (i) UCC termination
statements for any UCC financing statements previously filed
against Total Tec, except for those security interests and liens
set forth on Schedule 8.4 hereof; and (ii) satisfactions and
discharges of any mortgages, deeds of trust or deeds to secure debt
by Total Tec in favor of any Person, in form acceptable for
recording with the appropriate Governmental Authority;
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(b) all requisite corporate action and proceedings in
connection with this Agreement and the other Financing Agreements
shall be satisfactory in form and substance to Administrative
Agent, and Administrative Agent shall have received all information
and copies of all documents, including records of requisite
corporate action and proceedings which Administrative Agent may
have requested in connection therewith, such documents where
requested by Administrative Agent or its counsel to be certified by
appropriate corporate officers or Governmental Authority (and
including a copy of the certificate of incorporation of Total Tec
certified by the Secretary of State (or equivalent Governmental
Authority) which shall set forth the same complete corporate name
of Total Tec as is set forth herein and such document as shall set
forth the organizational identification number of Total Tec, if one
is issued in its jurisdiction of incorporation);
(c) no material adverse change shall have occurred in the
assets, business or prospects of Total Tec since the date of
Administrative Agent's latest field examination, and no change or
event shall have occurred which would impair the ability of Total
Tec to perform its obligations hereunder or under any of the other
Financing Agreements to which it is a party or of Administrative
Agent or any Lender to enforce the Obligations or realize upon the
Collateral, as it pertains to Total Tec;
(d) Administrative Agent shall have completed a field review
of the Records and such other information with respect to the
Collateral, as it pertains to Total Tec, as Administrative Agent
may require to determine the amount of Revolving Loans available to
Total Tec, the results of which shall be satisfactory to
Administrative Agent;
(e) Administrative Agent shall have received, in form and
substance satisfactory to Administrative Agent, all required
consents, waivers, acknowledgments and other agreements from third
persons which Administrative Agent may deem necessary or desirable
in order to permit, protect and perfect its security interests in
and liens upon the Collateral, as it pertains to Total Tec, or to
effectuate the provisions or purposes of this Agreement and the
other Financing Agreements, including, without limitation, a
Collateral Access Agreement, with respect to Total Tec's premises
located at 0 Xxxxxxx Xxxx, Xxxxxx, Xxx Xxxxxx 00000;
(f) Total Tec shall have established the Blocked Accounts and
Administrative Agent shall have received, in form and substance
reasonably satisfactory to Administrative Agent, all agreements
with the depository banks and Total Tec with respect to such
Blocked Accounts as Administrative Agent may require pursuant to
Section 6.3 hereof, duly authorized, executed and delivered by such
depository banks and Total Tec;
(g) Administrative Agent shall have received evidence, in form
and substance satisfactory to Administrative Agent, that
Administrative Agent
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has, for the benefit of the Lenders, a valid perfected first
priority security interest in all of the Collateral, as it pertains
to Total Tec;
(h) Administrative Agent shall have received and reviewed lien
and judgment search results for the jurisdiction of incorporation
of Total Tec, the jurisdiction of the chief executive office of
Total Tec and all jurisdictions in which assets of Total Tec are
located, which search results shall be in form and substance
satisfactory to Administrative Agent;
(i) Administrative Agent shall have received evidence of
insurance and loss payee endorsements required hereunder and under
the other Financing Agreements, in form and substance satisfactory
to Administrative Agent, and certificates of insurance policies
and/or endorsements naming Administrative Agent as loss payee, for
the benefit of the Lenders;
(j) Administrative Agent shall have received, in form and
substance satisfactory to Administrative Agent, such opinion
letters of counsel to Total Tec with respect to the Financing
Agreements and such other matters as Administrative Agent may
request;
(k) the other Financing Agreements and all instruments and
documents hereunder and thereunder shall have been duly executed
and delivered to Administrative Agent, in form and substance
satisfactory to Administrative Agent; and
(l) Administrative Agent shall have received a certificate
from the President of Total Tec, in form and substance satisfactory
to Administrative Agent, (i) confirming that Total Tec has received
copies of this Agreement and the other Financing Agreements,
together with such other documents and information as it has deemed
appropriate to make its own decision to enter into this Agreement
and the other Financing Agreements; (ii) appointing and authorizing
the Borrower Agent to take such action as agent on its behalf and
to exercise such powers under this Agreement and the Financing
Agreements as are delegated to Borrower Agent by the terms hereof,
together with such powers as are reasonably incidental thereto;
(iii) agreeing that it will perform in accordance with their terms
all of the obligations which by the terms of this Agreement and the
Financing Agreements are required to be performed by it as a
Borrower hereunder, and (iv) attesting that the representations and
warranties contained in this Agreement and the other Financing
Agreements are true and correct in all material respects, except as
disclosed by Total Tec on schedules attached thereto." -
4. Collection of Accounts.
(a) Section 6.3(a) of the Loan Agreement shall be amended and restated
in its entirety to read as follows:
"(a) Each Borrower shall establish and maintain, at its expense,
blocked accounts or lockboxes and related blocked accounts (in
either case, "Blocked Accounts"),
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as Administrative Agent may specify, with such banks as are
reasonably acceptable to Administrative Agent into which Borrowers
shall promptly deposit and direct their respective account debtors
to directly remit all payments on Accounts and all payments
constituting proceeds of Inventory or other Collateral in the
identical form in which such payments are made, whether by cash,
check or other manner. The banks at which the Blocked Accounts are
established shall enter into an agreement, in form and substance
reasonably satisfactory to Administrative Agent, providing that all
items received or deposited in the Blocked Accounts are the
property of Administrative Agent, that the depository bank has no
lien upon, or right to setoff against, the Blocked Accounts, the
items received for deposit therein, or the funds from time to time
on deposit therein and that with respect to the Blocked Accounts,
the depository bank will wire, or otherwise transfer, in
immediately available funds, on a daily basis, all funds received
or deposited into such Blocked Accounts to such bank account of
Administrative Agent as Administrative Agent may from time to time
designate for such purpose ("Payment Account"); provided, however,
that so long as the Excess Availability of Borrowers is equal to at
least the greater of (i) fifteen percent (15%) of Borrowing Base or
(ii) $15,000,000, and no Event of Default has occurred and is
continuing, such funds will not be transferred to the Payment
Account and the Borrower owning any such funds will be entitled to
withdraw those funds from the Blocked Accounts for its own account.
Each Borrower agrees that if the Excess Availability of Borrowers
is less than the greater of (i) fifteen percent (15%) of Borrowing
Base or (ii) $15,000,000, or an Event of Default has occurred and
is continuing, then all payments made to such Blocked Accounts or
other funds received and collected by Administrative Agent or any
Lender, whether in respect of the Accounts, as proceeds of
Inventory or other Collateral or otherwise shall be treated as
payments to Administrative Agent and Lenders in respect of the
Obligations and therefore shall constitute the property of
Administrative Agent and Lenders to the extent of the then
outstanding Obligations."
(b) Section 6.3(c) of the Loan Agreement shall be amended and restated
in its entirety to read as follows:
"(c) If the Excess Availability of Borrowers is less than the
greater of (i) fifteen percent (15%) of Borrowing Base or (ii)
$15,000,000, or if an Event of Default has occurred and is
continuing (and without limiting Administrative Agent's and
Lenders' other rights and remedies on account of such Event of
Default), each Borrower and all of its directors, employees,
agents, Subsidiaries and other Affiliates shall, acting as trustee
for Administrative Agent and Lenders, receive, as the property of
Administrative Agent and Lenders, any monies, checks, notes, drafts
or any other payment relating to and/or proceeds of Collateral
which come into their possession or under their control and
immediately upon receipt thereof, shall deposit or cause the same
to be deposited in the Blocked Accounts, or remit the same or cause
the same to be remitted, in kind, to Administrative Agent and in no
event shall the same be commingled with a Borrower's own funds.
Each Borrower agrees to reimburse Administrative Agent and Lenders
on demand for
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any amounts owed or paid to any bank at which a Blocked Account is
established or any other bank or person involved in the transfer of
funds to or from the Blocked Accounts arising out of Administrative
Agent or any Lender's payments to or indemnification of such bank
or person in connection with such Blocked Account or any amounts
received therein or transferred therefrom in accordance with any
Blocked Account Agreement. The obligation of Borrowers to reimburse
Administrative Agent and Lenders for such amounts pursuant to this
Section 6.3 shall survive the termination of this Agreement."
5. Collateral Reporting. Section 7.1(a)(i) of the Loan Agreement shall be
amended and restated in its entirety as follows:
"(i) (A) twice a month, as Administrative Agent may reasonably
request, a schedule of sales made, credits issued and cash
received for the immediately preceding period, and (B) once a
month, on or before the tenth (10th) Business Day of the month
(or more frequently as Administrative Agent may reasonably
request, but not to exceed twice a month), a schedule of
Inventory (separately showing Inventory covered by
non-cancelable, non-returnable purchase orders and "end of
life" Inventory, and the sales of such Inventory); provided
that the schedules referenced in clauses (A) and (B) above
will be provided on a weekly basis or more frequently as
Administrative Agent may request if either (1) an Event of
Default has occurred and is continuing, or (2) the Excess
Availability is less than the greater of (y) fifteen percent
(15%) of the Borrowing Base or (z) $15,000,000;"
6. Inventory Covenants. Clauses (d) and (e) of Section 7.3 of the Loan Agreement
shall be amended and restated in its entirety as follows:
"(d) Borrowers shall, at their expense, on a semi-annual basis, (or
upon an Event of Default or if Borrowers' Excess Availability is
less than the greater of (i) fifteen percent (15%) of the Borrowing
Base or (ii) $15,000,000, once every two months or at such other
time or times as Administrative Agent may request) deliver or cause
to be delivered to Administrative Agent full written reports or
appraisals as to the Inventory in form, scope and methodology
reasonably acceptable to Administrative Agent and by an appraiser
reasonably acceptable to Administrative Agent, addressed to
Administrative Agent and Lenders, and upon which Administrative
Agent and Lenders are expressly permitted to rely, which appraisals
shall employ the same methodology as in prior appraisals unless the
appraiser justifies to Administrative Agent, in its sole
discretion, the need to employ a different methodology; provided
that Administrative Agent will make reasonable efforts to discuss
any proposed change in methodology with Borrower Agent prior to its
implementation, provided, further, that the failure to discuss such
proposed change shall not invalidate such appraisal or limit the
rights of Administrative Agent and Lenders to rely on such
appraisal; (e) Borrowers shall, at their expense, on a semi-annual
basis, (or upon an Event of Default or if Borrowers' Excess
Availability is less than the greater of (i) fifteen percent (15%)
of the Borrowing Base or (ii) $15,000,000, once every two months or
at such
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other time or times as Administrative Agent may request) deliver or
cause to be delivered to Administrative Agent written desktop
appraisals as to Inventory (by product code as determined by the
appraiser) in form, scope and methodology acceptable to
Administrative Agent and by an appraiser reasonably acceptable to
Administrative Agent, addressed to Administrative Agent and
Lenders, and upon which Administrative Agent and Lenders are
expressly permitted to rely, which appraisals shall employ the same
methodology as in prior appraisals unless the appraiser justifies
to Administrative Agent, in its sole discretion, the need to employ
a different methodology; provided that Administrative Agent will
make reasonable efforts to discuss any proposed change in
methodology with Borrower Agent prior to its implementation;
provided, further, that the failure to discuss such proposed change
shall not invalidate such desktop appraisal or limit the rights of
Administrative Agent and Lenders to rely on such desktop appraisal;
provided, further, that the appraisals of Inventory as set forth
herein and in clause (d) above shall be provided on an alternating
basis, unless otherwise requested by Administrative Agent;"
7. Loans, Investments, Guarantees, Etc. The following shall be added as Section
9.10(m) of the Loan Agreement:
"(m) without duplication of any amounts distributed in accordance
with Section 9.11(d) hereof, equity investments by Borrower Agent
into Persons other than Borrowers in an amount not to exceed in the
aggregate, at any one time, fifty percent (50%) of the net proceeds
received from the sale of Capital Stock made pursuant to Section
9.7(b)(iv) hereof, so long as no Event of Default has occurred and
is continuing or would result therefrom."
8. Dividends and Redemptions. The following shall be added as Section 9.11(d) of
the Loan Agreement:
"(d) without duplication of any amounts distributed in accordance
with Section 9.10(m) hereof, dividends by Borrower Agent not to
exceed in the aggregate, at any one time, fifty percent (50%) of
the net proceeds received from the sale of Capital Stock made
pursuant to Section 9.7(b)(iv) hereof, so long as no Event of
Default has occurred and is continuing or would result therefrom."
9. Financial Covenants. Section 9.13 of the Loan Agreement shall be amended and
restated in its entirety to read as follows:
"9.13 Financial Covenants. Borrower Agent shall at all times maintain
Consolidated Net Worth of not less than the sum of $117,500,000, which amount
shall be increased by $1 for each $1 Borrower Agent distributes to Persons
other than a Borrower pursuant to Sections 9.10(m) or 9.11(d) hereof, from
the net proceeds received from the sale of Capital Stock made pursuant to
Section 9.7(b)(iv) hereof."
10. Term. Section 13.1(a) of the Loan Agreement shall be amended and restated in
its entirety to read as follows:
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"(a) This Agreement and the other Financing Agreements shall
become effective as of the date set forth on the first page
hereof and shall continue in full force and effect for a term
ending on the Final Maturity Date, unless sooner terminated
pursuant to the terms hereof. Upon the effective date of
termination of this Agreement and the Financing Agreements,
Borrowers and Guarantor shall pay to Administrative Agent, for
the ratable benefit of Lenders, in full, all outstanding and
unpaid Obligations and shall furnish cash collateral to
Administrative Agent, for the ratable benefit of Lenders (or
at Administrative Agent's option, a letter of credit issued to
Administrative Agent for the ratable benefit of Lenders and at
Borrowers' expense, in form and substance satisfactory to
Administrative Agent, by an issuer acceptable to
Administrative Agent and payable to Administrative Agent as
beneficiary, for the ratable benefit of Lenders), in such
amounts as Administrative Agent determines in good faith are
reasonably necessary to secure Administrative Agent and
Lenders from loss, cost, damage or expense, including
reasonable attorneys' fees and legal expenses, in connection
with any contingent Obligations, including issued and
outstanding Letter of Credit Accommodations and checks or
other payments provisionally credited to the Obligations
and/or as to which Administrative Agent and Lenders have not
yet received final and indefeasible payment. Such payments in
respect of the Obligations and cash collateral shall be
remitted by wire transfer in Federal funds to such bank
account of Administrative Agent, as Administrative Agent may,
in its discretion, designate in writing to Borrower Agent for
such purpose. Interest shall be due until and including the
next Business Day, if the amounts so paid by Borrowers to the
bank account designated by Administrative Agent are received
in such bank account later than 10:30 a.m.
California time."
11. Conditions to Effectiveness. The effectiveness of this First Amendment is
subject to the receipt by Administrative Agent or the completion by Borrowers of
the following:
(a) Counterparts of this First Amendment, executed by each of the parties
hereto;
(b) Borrowers have paid Administrative Agent, for the Pro Rata Share of each
Lender, an extension and modification fee of $400,000; and
(c) Counterparts of that certain Side Letter, dated as of the date hereof,
and entered into by and among Congress Financial Corporation (Western), The CIT
Group/Business Credit, Inc., Bank of America, N.A., PNC Bank, national
association, LaSalle Business Credit, Inc.,
California Bank & Trust and Comerica
Bank, executed by each of the parties thereto.
12. Guarantor's Acknowledgement. The Guarantor hereby acknowledges and consents
to the terms, conditions and provisions of this First Amendment and to the
transactions contemplated hereby. In addition, the Guarantor 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 First Amendment.
13. 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 First Amendment as though made as of such date and after giving
effect to this First Amendment. In addition, each Borrower makes the following
representations and warranties to Lenders and Administrative Agent, which shall
survive the execution of this First Amendment.
(a) The execution, delivery and performance of this First 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 First 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 First 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.
14. Continuing Effect of Financing Agreements. To the extent of any
inconsistencies between the terms of this First Amendment and the Loan
Agreement, this First 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.
15. References. Upon the effectiveness of this First 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.
16. Governing Laws. This First 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" "GUARANTOR"
XXXX MICROPRODUCTS INC. XXXX MICROPRODUCTS CANADA INC.
By: By:
-------------------------------------- -------------------------------
Name: Name:
----------------------------------- -----------------------------
Title: Title:
---------------------------------- ----------------------------
"ADMINISTRATIVE AGENT AND LENDER"
XXXX MICROPRODUCTS - FUTURE TECH, CONGRESS FINANCIAL
INC. CORPORATION (WESTERN)
By: By:
-------------------------------------- -------------------------------
Name: Name: Xxxx Xxxxxxxx
----------------------------------- Title: Vice President
Title:
----------------------------------
"LENDERS"
XXXXX DATA, INC. BANK OF AMERICA, N.A.
By: By:
-------------------------------------- -------------------------------
Name: Name:
----------------------------------- -----------------------------
Title: Title:
---------------------------------- ----------------------------
XXXX MICROPRODUCTS CANADA - THE CIT GROUP/BUSINESS CREDIT,
TENEX DATA ULC INC.
By: By:
-------------------------------------- -------------------------------
Name: Name:
----------------------------------- -----------------------------
Title: Title:
---------------------------------- ----------------------------
PNC BANK, national association
By:
-------------------------------
Name:
-----------------------------
Title:
----------------------------
LASALLE BUSINESS CREDIT, INC.
By:
-------------------------------
Name:
-----------------------------
Title:
----------------------------
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