WAIVER AND EIGHTH AMENDMENT TO THE LOAN AND SECURITY AGREEMENT
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Waiver and Eighth Amendment dated as of August 10, 2001 (this "AMENDMENT")
to the Loan and Security Agreement, dated as of December 31, 1997 (as amended
and modified, the "LOAN AGREEMENT"), among GENERAL ELECTRIC CAPITAL CORPORATION,
a Delaware corporation ("LENDER") and KNOGO NORTH AMERICA INC., a Delaware
corporation ("BORROWER"), and the other Credit Parties executing this Amendment.
WITNESSETH :
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WHEREAS, Borrower has requested that Lender waive the defaults arising from
the breach of the "Minimum Net Worth" financial covenant for certain dates of
determination and amend the terms of certain financial covenants;
WHEREAS, Lender is willing to waive such financial covenant defaults and
amend the Loan Agreement only on the terms and conditions set forth herein;
NOW, THEREFORE, in consideration of the premises, the covenants and
agreements contained herein, and for other good and valuable consideration, the
receipt and adequacy of which are hereby acknowledged, the parties do hereby
agree that all capitalized terms used herein shall have the meanings ascribed
thereto in the Loan Agreement and do hereby further agree as follows:
STATEMENT OF TERMS
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1. WAIVERS. Lender hereby waives the Event of Default arising solely as a
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result of the breach of the Minimum Net Worth covenant solely for the periods
ending December 31, 2000, January 31, 2001, February 28, 2001, March 31, 2001,
April 30, 2001 and May 31, 2001.
2. AMENDMENT. Paragraph 2 of Schedule G of the Loan Agreement is amended in
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its entirety to provide as follows:
"Minimum Net Worth. Sentry and its Subsidiaries on a consolidated basis
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shall have a Net Worth of not less than the amounts set forth below as of
the dates set forth below:
Fiscal Month Ending Net Worth
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June 30, 2001 $3,200,000
July 31, 2001 $2,700,000
August 31, 2001 $2,700,000
September 30, 2001 and the last $3,200,000
day of each Fiscal Month thereafter"
3. REPRESENTATIONS AND WARRANTIES. To induce Lender to enter into this
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Amendment, each Credit Party hereto hereby warrants, represents and covenants to
Lender that: (a) each representation and warranty of the Credit Parties set
forth in the Loan Agreement is hereby restated and reaffirmed as true and
correct on and as of the date hereof after giving affect to this Amendment as if
such representation or warranty were made on and as of the date hereof (except
to the extent that any such representation or warranty expressly relates to a
prior specific date or period in which case it is true and correct as of such
prior date or period), and no Default or Event of Default has occurred and is
continuing as of this date under the Loan Agreement after giving effect to this
Amendment; and (b) each Credit Party hereto has the power and is duly authorized
to enter into, deliver and perform this Amendment, and this Amendment is the
legal, valid and binding obligation of such Credit Party enforceable against it
in accordance with its terms.
4. CONDITIONS PRECEDENT TO EFFECTIVENESS OF THIS AMENDMENT. The
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effectiveness of this Amendment is subject to the fulfillment of the following
conditions precedent:
(a) Lender shall have received one or more counterparts of this
Amendment duly executed and delivered by the Credit Parties hereto;
(b) Any and all guarantors of the Obligations shall have consented
to the execution, delivery and performance of this Amendment and all of
the transactions contemplated hereby by signing one or more counterparts of
this Amendment in the appropriate space indicated below and returning same to
Lender; and
(c) Borrower shall have paid to Lender an amendment fee in the
amount of $5,000 which shall be charged to Borrower's loan account on the date
of this Amendment together with all of Lenders legal fees, costs and expenses
incurred in connection with the preparation, negotiation, execution and delivery
of this Amendment.
5. CONTINUING EFFECT OF LOAN AGREEMENT. Except as expressly set forth
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herein, the provisions of the Loan Agreement, and the Liens granted thereunder,
are and shall remain in full force and effect and the waiver set forth herein
shall be limited precisely as drafted and shall not constitute a waiver of any
other provisions of the Loan Agreement.
6. COUNTERPARTS. This Amendment may be executed in multiple counterparts
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each of which shall be deemed to be an original and all of which when taken
together shall constitute one and the same instrument.
7. GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
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ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK APPLICABLE TO
CONTRACTS MADE AND PERFORMED IN SUCH STATE WITHOUT REGARD TO THE PRINCIPLES
THEREOF REGARDING CONFLICTS OF LAWS.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed and delivered as of the day and year specified at the beginning
hereof.
KNOGO NORTH AMERICA INC.,
AS BORROWER
By: /s/ Xxxxx X. Xxxxx
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Name: Xxxxx X. Xxxxx
Title: V.P. - CFO
SENTRY TECHNOLOGY CORPORATION,
AS CREDIT PARTY
By: /s/ Xxxxx X. Xxxxx
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Name: Xxxxx X. Xxxxx
Title: V.P. - CFO
VIDEO SENTRY CORPORATION,
AS CREDIT PARTY
By: /s/ Xxxxx X. Xxxxx
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Name: Xxxxx X. Xxxxx
Title: V.P. - CFO
KNOGO CARIBE, INC.,
AS CREDIT PARTY
By: /s/ Xxxxx X. Xxxxx
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Name: Xxxxx X. Xxxxx
Title: V.P. - CFO
GENERAL ELECTRIC CAPITAL CORPORATION,
AS LENDER
By: /s/ Xxxxxx X. Xxxxxxx
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Name: Xxxxxx X. Xxxxxxx
Title: Duly Authorized Signatory
CONSENT OF GUARANTORS
Each of the undersigned guarantors does hereby consent to the execution,
delivery and performance of the within and foregoing Amendment and confirms the
continuing effect of such guarantor's guarantee of the Obligations after giving
effect to the foregoing Amendment.
IN WITNESS WHEREOF, each of the undersigned guarantors has executed this
Consent to Guarantors as of the day and year first above set forth.
GUARANTORS:
SENTRY TECHNOLOGY CORPORATION
By: /s/ Xxxxx X. Xxxxx
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Name: Xxxxx X. Xxxxx
Title: V.P. - CFO
VIDEO SENTRY CORPORATION
By: /s/ Xxxxx X. Xxxxx
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Name: Xxxxx X. Xxxxx
Title: V.P. - CFO
KNOGO CARIBE, INC.
By: /s/ Xxxxx X. Xxxxx
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Name: Xxxxx X. Xxxxx
Title: Treasurer
