ACKNOWLEDGMENT AND WAIVER
TO THE
INVENTORY AND WORKING CAPITAL FINANCING AGREEMENT
This ACKNOWLEDGMENT AND WAIVER ("Waiver") TO THE INVENTORY AND
WORKING CAPITAL FINANCING AGREEMENT is made as of December 14, 2001 by and
between Datatec Industries, Inc., a Delaware corporation ("Customer") and IBM
Credit Corporation, a Delaware corporation ("IBM Credit").
RECITALS:
WHEREAS, Customer and IBM Credit have entered into that certain
Inventory and Working Capital Financing Agreement dated as of November 10, 2000
(as amended, supplemented or otherwise modified from time to time, the
"Agreement");
WHEREAS, Customer is in default of one or more of its financial
covenants contained in the Agreement (as more specifically explained in Section
2 hereof); and
WHEREAS, IBM Credit is willing to waive such defaults subject to the
conditions set forth below.
AGREEMENT
NOW THEREFORE, in consideration of the premises set forth herein,
and for other good and valuable consideration, the value and sufficiency of
which is hereby acknowledged, the parties hereto agree that the Agreement is
amended as follows:
Section 1. Definitions. All capitalized terms not otherwise defined herein shall
have the respective meanings set forth in the Agreement.
Section 2. Acknowledgment.
Customer acknowledges that the financial covenants set forth in
Attachment A to the Agreement are applicable to the financial results of
Customer for the fiscal quarter ending July 31, 2001, and Customer was required
to maintain such financial covenants at all times. Customer further acknowledges
its actual attainment was as follows:
Covenant Covenant
Covenant Requirement Actual
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(a) Revenue on an Annual Basis Greater than Zero and -4.5:1.0
to Working Capital Equal to or Less than 25.0:1.0
(b) Net Profit after Tax to Revenue Equal to or Greater than -1.7%
0.1 percent
(c) Tangible Net Worth Equal to or Greater than ($1,114,566)
$2,500,000
Section 3. Waivers to Agreement. IBM Credit hereby waives the defaults of
Customer with the terms of the Agreement to the extent such defaults are set
forth in Section 2 hereof.
Section 4. Conditions to Effectiveness of Waiver. The waiver set forth in
Section 3 hereof shall become effective upon the receipt by IBM Credit from
Customer of this Waiver executed by Customer.
Section 5. Rights and Remedies. Except to the extent specifically waived herein
IBM Credit reserves any and all rights and remedies that IBM Credit now has or
may have in the future with respect to Customer, including any and all rights or
remedies which it may have in the future as a result of Customer's failure to
comply with its financial covenants to IBM Credit. Except to the extent
specifically waived herein neither this Waiver, any of IBM Credit's actions or
IBM Credit's failure to act shall be deemed to be a waiver of any such rights or
remedies.
Section 6. Governing Law. This Waiver shall be governed by and interpreted in
accordance with the laws which govern the Agreement.
Section 7. Counterparts. This Waiver may be executed in any number of
counterparts, each of which shall be an original and all of which shall
constitute one agreement.
IN WITNESS WHEREOF, this Waiver has been executed by duly authorized
representatives of the undersigned as of the day and year first above written.
IBM Credit Corporation Datatec Industries, Inc.
By: /s/ Xxxxxx Xxxxxxxx By: /s/ Xxxxx Xxxx
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Print Name: Xxxxxx Xxxxxxxx Print Name: Xxxxx Xxxx
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Title: Manager of Special Handling Title: Chairman and CEO
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Date: December 17, 2001 Date: December 17, 2001
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