WAIVER AND AMENDMENT NO. 2 TO
LOAN AND SECURITY AGREEMENT
This WAIVER AND AMENDMENT NO. 2 TO LOAN AND SECURITY AGREEMENT'
("Amendment") is dated as of May 19, 1998 and is entered into by and between
BankAmerica Business Credit, Inc. ("Lender") and Intellicell Corp. ("Borrower").
All capitalized terms used herein but not otherwise defined shall have the
meanings ascribed to them in the Agreement (as hereinafter defined).
WITNESSETH
WHEREAS, the Borrower and the Lender have entered into that certain Loan
and Security Agreement dated as of January 12. 1998, as amended and supplemented
(the "Agreement"); and
WHEREAS, an Event of Default has occurred under the Agreement; and
WHEREAS, the Borrower desires to have the Event of Default waived and to
amend the Agreement and the Lender is willing to do so, subject to the terms and
conditions stated herein; and
NOW, THEREFORE, in consideration of the premises herein contained and
other good and valuable consideration, the receipt and adequacy of which are
hereby acknowledged, the Borrower and Lender hereby agree as follows:
Section 1. Waiver of Default. The Lender hereby waives the Event of
Default arising from the failure of the Borrower to comply with the minimum
Adjusted Tangible Net Worth requirement for the month ending March 31, 1998 as
required by Section 10.23 of the Agreement. This waiver is only applicable and
shall only be effective for the specific instance, for the specific purpose, and
for the specific period for which given. Such waiver is expressly limited to the
facts and circumstances referred to herein and shall not operate (a) as a waiver
of or consent to noncompliance with any other section of the Agreement or any
other Loan Document, (b) as a waiver of or a restriction on or prejudice with
respect to, any right, power or remedy of the Lender under the Agreement or any
other Loan Document, or (c) as a waiver of or consent to any other Event of
Default or Event under the Agreement or any other Loan Document.
Section 2. Amendment to the Agreement. The Lender and Borrower agree that
the
Agreement shall be amended as follows:
A. Amendment to Section 1 The definition of "Availability" contained in
Section 1 of the Agreement is amended to read as follows:
"Availability" means at any time the lesser of:
(a) The amount of Four Million and 00/100 Dollars ($4,000,000.00)
(the "Maximum Revolving Credit Line") or
(b) The sum of
(i) up to eighty (80%) percent of the Net Amount of Eligible
Accounts,
and
(ii) the lesser of
a) the Maximum Inventory Loan or
b) up to fifty (50%) of the value of Eligible Inventory;
provided, however, that at all times Availability shall be reduced by the
sum of;
(a) the unpaid balance of Revolving Loans at that time;
(b) the aggregate undrawn face amount of all outstanding Letters of
Credit which the Lender has caused to be issued or obtained for the
Borrower's account;
(c) reserves for accrued interest on the Revolving Loans and
reserves for accounts payable 30 days or more past due date;
(d) the Environmental Compliance Reserve; and
(e) all other reserves which the Lender in its reasonable discretion
deems necessary or desirable to maintain with respect to the Borrower's
account, including, without limitation, with respect to any amounts which
the Lender may be obligated to pay in the future for the account of the
Borrower.
B. Amendment to Section1. Section 1 of the Agreement is amended by adding
a new definition to read as follows:
Maximum Inventory Loan" means $750,000 as of May 19, 1998 and shall
be reduced by $75,000 on each subsequent Monday until the Maximum
Inventory Loan is zero.
C. Amendment to Section 3. Section 3 of the Agreement is amended by adding
a new Section 3.6 to read as follows:
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3.6 Extension Fee. In the event the Obligations are not paid in full
by July 31, 1998. the Borrower agrees to pay the Lender $50,000 on August
1, 1998 and $25,000 on the first day of each month thereafter until the
Obligations are paid in full.
Section 2. Conditions. The effectiveness of this Amendment is subject to
the satisfaction of the following conditions precedent:
A. Amendment. Fully executed copies of this Amendment signed by the
Borrower.
B. Resolution, A certificate executed by the Secretary or Assistant
Secretary of Borrower certifying that the Borrower's Board of Directors
has adopted resolutions authorizing the execution, delivery and
performance by Borrower of the Amendment shall be delivered to lender.
C, Other Documents. Borrower shall have executed and delivered to
Lender such other documents and instruments as Lender may require.
Section 3. Miscellaneous.
A. Survival of Representations and Warranties. All representations
and warranties made in the Agreement or any other document or documents
relating thereto, including, without limitation, any Loan Document
furnished in connection with this Amendment, shall survive the execution
and delivery of this Amendment and the other Loan Documents, and no
investigation by Lender or any closing shall affect the representations
and warranties or the right of Lender to rely thereon.
B. Reference to Agreement. The Agreement, each of the Loan
Documents, and any and all other agreements, documents or instruments now
or hereafter executed and delivered pursuant to the terms hereof, or
pursuant to the terms of the Agreement as amended hereby, are hereby
amended so that any reference therein to the Agreement shall mean a
reference to the Agreement as amended hereby.
C. Agreement Remains in Effect. The Agreement and the Loan Documents
remain in full force and effect and the Borrower ratifies and confirms its
agreements and covenants contained therein.
D. Severability. Any provision of this Amendment held by a court of
competent jurisdiction to be invalid or unenforceable shall not
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impair or invalidate the remainder of this Amendment and the effect
thereof shall be confined to the provision so held to be invalid or
unenforceable.
13. APPLICABLE LAW. THIS AMENDMENT AND ALL OTHER LOAN DOCUMENTS
EXECUTED PURSUANT HERETO SHALL BE DEEMED TO HAVE BEEN MADE AND TO BE
PERFORMABLE IN THE STATE OF CALIFORNIA AND SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE 0F CALIFORNIA.
F. Successors and Assigns. This Amendment is binding upon and shall
inure to the benefit of Lender and Borrower and their respective
successors and assigns; provided, however, that Borrower may not assign or
transfer any of its rights or obligations hereunder without the prior
written consent of Lender.
G. Counterparts. This Amendment may be executed in one or more
counterparts, each of which when so executed shall be deemed to be an
original, but all of which when taken together shall constitute one and
the same instrument.
H. The headings, captions and arrangements used in this Amendment
are for convenience only and shall not affect the interpretation of this
Amendment.
I. Expenses of Lender. Borrower agrees to pay on demand (i) all
costs and expenses reasonably incurred by Lender in connection with the
preparation, negotiation and execution of this Amendment and the other
Loan Documents executed pursuant hereto and any and all subsequent
amendments. modifications, and supplements hereto or thereto, including,
without limitation, the costs and fees of Lender's legal counsel and the
allocated cost of Lender's in-house counsel and (ii) all costs and
expenses reasonably incurred by Lender in connection with the enforcement
or preservation of any rights under the Agreement, this Amendment and/or
other Loan Documents, including, without limitation, the costs and fees of
Lender's legal counsel and the allocated cost of Lender's in-house
counsel.
J. NO ORAL AGREEMENTS. THIS AMENDMENT, TOGETHER WITH THE OTHER LOAN
DOCUMENTS AS WRITTEN, REPRESENTS THE FINAL AGREEMENT BETWEEN LENDER AND
BORROWER AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS
OR SUBSEQUENT ORAL
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AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITFEN ORAL AGREEMENTS BETWEEN
LENDER AND BORROWER.
IN WITNESS WHEREOF, the parties have executed this Amendment under
seal on the date first written above.
INTELLICELL CORP.
Signature _____________________
Title
BANKAMERICA BUSINESS CREDIT. INC.
Signature
Title
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