June 5, 2003
JACO ELECTRONICS, INC. ("Jaco")
000 Xxxx Xxxxxx
Xxxxxxxxx, XX 00000
NEXUS CUSTOM ELECTRONICS, INC. ("Nexus")
Xxxxxxxx Xxxxxx
Xxxxxxx, XX 00000
INTERFACE ELECTRONICS, INC. ("Interface")
000 Xxxxx Xxxxxx
Xxxxxxxx, XX 00000
Gentlemen:
Reference is made to the Second Restated and Amended Loan and
Security Agreement in effect between us, as successor by merger to GMAC
Commercial Credit LLC, which was the successor in interest to BNY Financial
Corporation ("GMAC"), as Agent and Lender, and Fleet Bank, N.A., f/k/a Natwest
Bank, N.A ("Fleet") as Lender, and Jaco, Nexus and Interface, dated September
13, 1995, as supplemented and amended from time to time, (the "Agreement"). Both
GMAC and Fleet may hereinafter be referred to jointly as the "Lenders", and
individually, as a "Lender" and GMAC may also be herein referred to as "Agent"
when acting in such capacity, as the case may be. Initially capitalized terms
not defined herein shall have the meanings ascribed to such terms in the
Agreement. Jaco, Nexus and Interface may hereinafter and in the Agreement, be
referred to jointly and severally as "Debtors", and each individually as a
"Debtor".
WHEREAS you have requested that the Lenders amend the
Agreement so as to enable you to purchase certain assets and assume certain
liabilities, ("Purchase") of Reptron Electronics, Inc., a Florida corporation
("Reptron"), in accordance with the terms and conditions of a certain Asset
Purchase Agreement dated May 19, 2003 ("Purchase Agreement"); and
WHEREAS the Lenders are willing to agree to such Purchase
provided such Purchase is made in accordance with the terms and conditions of
the Purchase Agreement as submitted to the Agent and the amendment of the
Agreement is subject to the terms and conditions of this amendment agreement;
NOW THEREFORE IT IS HEREBY AGREED AS FOLLOWS:
1) The Lenders hereby agree notwithstanding any provisions in the Agreement to
the contrary to allow Jaco to assume additional liabilities in a maximum
amount not to exceed $7,000,000.00 in conjunction with the Purchase and to
consummate the Purchase, provided that the purchase price, for the
Purchase, shall not exceed a maximum amount of $5,600,000.00, subject to
the terms and conditions hereof.
2) It is hereby agreed that under the terms of the Agreement, the Lenders will
establish and maintain at all times a $2,500,000.00 permanent reserve to be
established at the time that the inventory acquired from Reptron, pursuant
to the Purchase, is incorporated into the Inventory Borrowing Base. Such
reserve shall reduce the availability of Loans available to the Debtors
under the Agreement.
3) The Debtors hereby agree to provide Agent on behalf of the Lenders with an
appraisal of the inventory being purchased from Reptron pursuant to the
Purchase, acceptable in all respects to the Agent and the Lenders, in their
sole discretion, and Agent's field examiners will review such inventory and
provide a satisfactory opinion with respect thereto, before such purchased
inventory is considered a part of the Inventory Borrowing Base.
4) In consideration for the Agreement by the Lenders, as described herein, the
Borrowers agree to pay to the Agent for the benefit of the Lenders on a
pro-rata basis, a Facilitation Fee in the amount of $25,000.00. The
Borrowers hereby agree that the Agent may automatically charge the amount
of such Facilitation Fee to the Debtors account as of the date of this
Agreement.
5) By their signatures below, Jaco, Nexus and Interface hereby ratify the
Agreement and agree to be jointly and severally liable for all Obligations
under the Agreement and agree that all of the outstanding amounts of the
Loans under the Agreement, as of the date hereof, shall be valid and
binding Obligations of each of them, and shall be deemed Obligations
outstanding under the Agreement, and hereby agree and promise to repay to
the Agent, for the benefit of the Lenders, such Obligations (including but
not limited to all applicable interest) in accordance with the terms of the
Agreement, but in no event, later than the Termination Date (for purposes
hereof, "Termination Date" shall mean June 30, 2004, or any extended
termination date, or any earlier termination date, whether by acceleration
or otherwise).
6) By their signatures below, Jaco, Nexus and Interface hereby ratify and
affirm to the Agent that as of the date hereof, they are in full compliance
with all covenants under the Agreement and certify that all representations
and warranties of the Agreement are true and accurate as of the date
hereof, with the same effect as if they had been made as of the date
hereof.
Except as herein specifically amended, the Agreement shall
remain in full force and effect in accordance with its original terms, except as
previously amended.
If the foregoing accurately reflects our understanding, kindly
sign the enclosed copy of this letter and return it to our office as soon as
practicable.
Very truly yours,
GMAC COMMERCIAL FINANCE LLC
(as Agent and Lender)
By: /s/ Xxxxx Xxxxx
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Title:SVP
AGREED AND ACCEPTED:
JACO ELECTRONICS, INC. FLEET BANK, N.A.
(as Lender)
By: /s/ Xxxxxxx X. Xxxx By: /s/ Xxxxxxx X. Xxxx
-------------------- -----------------------
Title: EVP Title: Vice President
NEXUS CUSTOM ELECTRONICS, INC. INTERFACE ELECTRONICS CORP.
By: /s/ Xxxxxxx X. Xxxx By: /s/ Xxxxxxx X. Xxxx
----------------------- -----------------------
Title: EVP Title: EVP
RATIFICATION OF GUARANTOR
By its signature below, Jaco Overseas, Inc. hereby ratifies its guaranty of the
Agreement, as such Agreement has been amended from time to time, including but
not limited to certain amendments dated June 6, 2000, September 28, 2000,
January 31, 2001, June 12, 2001, July 1, 2001, November 14, 2001, February 6,
2002, and September 2002 (the "Amendments") and hereby agrees to be liable for
all of the Obligations under the Guaranty with respect to the Agreement as
amended from time to time, including but not limited to by this amendment and
the Amendments, and hereby agrees that the said Guaranty shall continue to apply
and remain in full force and effect with respect to the amended Agreement and
hereby agrees and consents that a certain General Loan and Security Agreement
dated January 20, 1989, shall continue to be in full force and effect and apply
to the amended Agreement, and it further hereby agrees to make all payments of
all its Obligations under the said Guaranty and General Loan and Security
Agreement to GMAC Commercial Finance LLC as Agent and Lender, and to Fleet Bank,
N.A. as Lender, as successors in interest to the previous Agent and Lenders
respectively.
RATIFIED, ACCEPTED AND CONSENTED:
JACO OVERSEAS, INC.
By: /s/ Xxxxxxx X. Xxxx
---------------------
Title: EVP
