EXHIBIT 10.10
WAIVER AND AMENDMENT TO
LOAN AND SECURITY AGREEMENT
THIS WAIVER AND AMENDMENT TO LOAN AND SECURITY AGREEMENT (the
"Agreement"), dated as of June , 2003, is by and between GENERAL ELECTRIC
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CAPITAL CORPORATION (the "Lender") and UNIVERSAL POWER GROUP, INC. f/k/a
UNIVERSAL BATTERY CORPORATION and COMPUTER COMPONENTS CORPORATION (the
"Borrower").
RECITAL
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A. The Lender and the Borrower have entered into that certain Loan and
Security Agreement, dated as of March 27, 2002, as amended (the "Loan
Agreement").
B. Events of Default (as defined in the Loan Agreement) have occurred
under the Loan Agreement on account of (i) the failure of the Borrower to
maintain the required Fixed Charge Coverage Ratio (as defined in the Loan
Agreement) for the months ending December 31, 2002, January 31, 2003 and
February 28, 2003 in accordance with the terms of Section 1, Schedule G of the
Loan Agreement and (ii) the failure of the Borrower to maintain the required
Tangible Net Worth (as defined in the Loan Agreement) for the Fiscal Quarter
ending December 31, 2002 in accordance with the terms of Section 2, Schedule G
of the Loan Agreement.
C. The Borrower has requested that the Lender waive such Events of
Default and make certain other changes to the Loan Agreement as set forth
herein.
D. The Lender has agreed to waive such Events of Default and make such
other changes so long as the Loan Agreement is amended as set forth herein.
NOW, THEREFORE, the parties hereto agree as follows:
1. The Lender hereby waives the Events of Default caused by (i) the
failure of the Borrower to maintain the required Fixed Charge Coverage Ratio for
the months ending December 31, 2002, January 31, 2003 and February 28, 2003 in
accordance with the terms of Section 1, Schedule G of the Loan Agreement and
(ii) the failure of the Borrower to maintain the required Tangible Net Worth (as
defined in the Loan Agreement) for the Fiscal Quarter ending December 31, 2002
in accordance with the terms of Section 2, Schedule G of the Loan Agreement. The
foregoing waiver is only applicable for the specific Events of Default
referenced above. The Borrower is required to be in compliance with Section 1 of
Schedule G of the Loan Agreement for the month ending March 31, 2003 and for
each month ending thereafter and in compliance with Section 2 of Schedule G of
the Loan Agreement for the Fiscal Quarter ending March 31, 2003 and for each
Fiscal Quarter ending thereafter.
2. The last paragraph of the definition of "Eligible Accounts" in
Schedule A of the Loan Agreement (which was added by Section 3 of that certain
Waiver and Amendment to Loan and Security Agreement dated July 31, 2002) is
amended in its entirety so that such paragraph now reads as follows:
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Notwithstanding anything to the contrary contained herein,
"Eligible Accounts" shall not include Accounts of Brink's Home
Security, Inc. ("Brink's") to the extent that (i) the total unpaid
Accounts of Brink's exceed the lesser of 40% of the aggregate of all
Accounts (with such 40% to be reduced to 25% automatically upon the
reduction by S&P or Xxxxx'x of the senior unsecured debt rating of
Brinks Company to a rating below investment grade) or $2,000,000 or
(ii) more than 10% of the total unpaid Accounts of Brink's are past
due for more than 60 days.
3. Subsection (b) (i) of the definition of "Borrowing Base" is
amended by replacing the reference to "$3,000,000" with a reference to
"$3,500,000."
4. Subsection (ii) of the definition of "Fixed Charge Coverage
Ratio" is amended in its entirety so that such subsection now reads as follows:
(ii) cash taxes paid during such period,
5. Section 4 in Schedule G of the Loan Agreement is amended in its
entirety so that such Section now reads as follows:
4. Net Borrowing Availability. Borrower shall maintain Net
Borrowing Availability of at least $250,000 at all times.
6. All references in the Loan Agreement to "Computer Components
Corporation" shall refer to "Universal Power Group, Inc." and the Lender hereby
consents to such change.
7. Except as modified hereby, all of the terms and provisions of the
Loan Agreement remain in full force and effect.
8. This Agreement may be executed in any number of counterparts,
each of which when so executed and delivered shall be deemed an original, and it
shall not be necessary in making proof of this Agreement to produce or account
for more than one counterpart.
9. This Agreement shall be a "Loan Document" (as defined in the Loan
Agreement) and shall be subject to all of the terms, provisions and conditions
of the Loan Agreement including the terms and provisions of Sections 9.10 and
9.11 of the Loan Agreement.
10. All references to the term "Agreement" in each of the Loan
Documents (as defined in the Loan Agreement) shall refer to the Loan Agreement
as amended by this Agreement. All references to "Computer Components
Corporation" in each of the Loan Documents shall refer to "Universal Power
Group, Inc."
11. The Borrower will execute such additional documents as are
reasonably requested by the Lender to reflect the terms and conditions of this
Agreement and will cause to be delivered such certificates, legal opinions and
other documents as are reasonably required by the Lender. In addition, the
Borrower will pay all costs and expenses in connection with the preparation,
execution and delivery of the documents executed in connection with this
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transaction, including, without limitation, the reasonable fees and
out-of-pocket expenses of special counsel to the Lender as well as any and all
filing and recording fees and stamp and other taxes with respect thereto and to
save the Lender harmless from any and all such costs, expenses and liabilities.
12. The Borrower shall pay Lender a fee of $30,000 on the date
hereof. The Borrower shall also pay on the date hereof all reasonable fees and
expenses of the Lender's external counsel.
13. The Borrower acknowledges and agrees that it is obligated to pay
the "Obligations" (as defined in the Loan Agreement) without setoff, defense or
counterclaim.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized corporate officers as of the day and year
first above written.
UNIVERSAL POWER GROUP, INC. f/k/a UNIVERSAL BATTERY CORPORATION
and COMPUTER COMPONENTS CORPORATION
By:
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Name:
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Title:
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GENERAL ELECTRIC CAPITAL
CORPORATION
By:
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Name:
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Title:
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ACKNOWLEDGMENT
The undersigned hereby acknowledges as of the day of June, 2003 the
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execution by Universal Power Group, Inc. f/k/a Universal Battery Corporation and
Computer Components Corporation (the "Borrower") of the foregoing Waiver and
Amendment to Loan of Security Agreement (the "Agreement") and agrees that the
obligations of the undersigned under that certain Guarantee dated as of March
27, 2002 executed by the undersigned in favor of General Electric Capital
Corporation (the "Guarantee") remains in full force and effect and that there
are no set-offs, defenses or counterclaims available to the undersigned with
respect to the performance of such obligations. All references in the Guarantee
to "Tech Electro Industries, Inc." shall refer to Zunicom, Inc."
ZUNICOM, INC. f/k/a TECH ELECTRO INDUSTRIES, INC.
By:
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Name:
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Title:
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