WAIVER AGREEMENT
THIS WAIVER AGREEMENT ("Waiver") made as of this 30th day of April, 1999
among XXXXXX INTERNATIONAL CORP., a Delaware corporation having its principal
place of business at 000 Xxxxxxxx Xxxxxxxxx, Xxxxxxxxx, Xxx Xxxx 00000 ("Xxxxxx"
or a "Borrower"), HAPL LEASING CO., INC., a New York corporation having its
principal place of business at 000 Xxxxxxxx Xxxxxxxxx, Xxxxxxxxx, Xxx Xxxx 00000
("HAPL" or a "Borrower") (Xxxxxx and HAPL sometimes referred to herein as a
"Borrower" or collectively, as the "Borrowers"), SEWING MACHINE EXCHANGE, INC.,
an Illinois corporation having an office at 000 Xxxxxxxx Xxxxxxxxx, Xxxxxxxxx,
Xxx Xxxx 00000 ("SMX"), PULSE MICROSYSTEMS LTD., an Ontario, Canada corporation
having its principal place of business at 0000 Xxxxxxxxxx Xxxxxxxxx, Xxxx 00,
Xxxxxxxxxxx, Xxxxxxx, Xxxxxx X0X0X0 ("Pulse"), SEDECO, INC., a Texas corporation
having its principal place of business at 0000 X. Xxxxxx Xxxxxx, Xxxx Xxxxx,
Xxxxx 00000 ("Sedeco") and XXXXXX EQUIPMENT CONNECTION, INC., a Delaware
corporation having an office at 000 Xxxxxxxx Xxxxxxxxx, Xxxxxxxxx, Xxx Xxxx
00000 ("Equipment") (Xxxxxx,( with respect to Loans made to HAPL), HAPL, (with
respect to Loans made to and Letters of Credit issued for, Xxxxxx), SMX, Pulse,
Sedeco and Equipment being individually, a "Guarantor" and collectively, the
"Guarantors"), THE BANK OF NEW YORK, a New York banking organization, having an
office at 000 Xxxxx Xxxxxx Xxxx, Xxxxxxxx Xxx Xxxx 00000 ("BNY" or a "Bank")
FLEET BANK, N.A., a national banking association, having an office at 000 Xxxxx
Xxxxxx Xxxx, Xxxxxxxx, Xxx Xxxx ("Fleet" or a "Bank"), MELLON BANK, N.A., a
national banking association, having an office at 000 XXX Xxxxx, Xxxx Xxxxx,
00xx Xxxxx, Xxxxxxxxx, Xxx Xxxx 00000-0000 ("Mellon" or a "Bank") and THE BANK
OF NEW YORK, as agent for the Banks (the "Agent").
W I T N E S S E T H :
WHEREAS, Xxxxxx, HAPL and the other Guarantors, and BNY, Mellon and Fleet,
as lending Banks, and BNY, as Agent, entered into a Loan Agreement dated as of
the 7th day of January, 1997, which Loan Agreement has heretofore been amended
pursuant to that certain First Amendment dated September 26, 1997 and that
certain Second Amendment dated as of February 9, 1999 (hereinafter, the
"Agreement"); and
WHEREAS, the Banks have made certain commitments to Xxxxxx and HAPL
pursuant to the Agreement; and
WHEREAS, Xxxxxx, HAPL and the other Guarantors have requested that the
Agent and the Banks agree to waive certain defaults under the Agreement; and
WHEREAS, the Agent and the Banks have agreed to waive such defaults on the
terms and conditions herein contained.
NOW, THEREFORE, in consideration of Ten ($10.00) Dollars and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Borrower, the Guarantors and the Bank do hereby agree as
follows:
1. Defined Terms. As used in this Waiver, capitalized terms, unless
otherwise defined, shall have the meanings set forth in the Agreement.
2. Representations and Warranties. As an inducement for the Agent and the
Banks to enter into this Waiver, Xxxxxx, HAPL and each other Guarantor represent
and warrant as follows:
A. That with respect to the Agreement and the Loan Documents executed in
connection therewith and herewith:
(i) There are no defenses or offsets to Xxxxxx'x, HAPL's or any other
Guarantor's obligations under the Agreement, as in effect prior to or subsequent
to this Waiver, the Notes or any of the other Loan Documents or any other
agreements in favor of the Agent or the Banks referred to in the Agreement, and
if any such defenses or offsets exist without the knowledge of Xxxxxx, HAPL or
any other Guarantor, the same are hereby waived.
(ii) All of the representations and warranties made by Xxxxxx, HAPL or any
other Guarantor in the Agreement, as amended hereby, are true and correct in all
material respects as if made on the date hereof, except for those made with
respect to a particular date, which such representations and warranties are
restated as of such date; and provided further that the representations and
warranties set forth in Section 4.01(f) of the Agreement shall relate to the
consolidated financial statements of Xxxxxx, HAPL and the other Guarantors for
the fiscal quarter ended October 31, 1998 other than as set forth in Xxxxxx'x
press release dated April 26, 1999.
(iii) The outstanding aggregate principal balance of the Revolving Credit
Loans (Xxxxxx) is $16,500,000.00 and interest has been paid (i) with respect to
the $14,500,000 Eurodollar Loan through April 18, 1999, and (ii) with respect to
the $2,000,000.00 Eurodollar Loan through April 14, 1999.
(iv) The outstanding aggregate L/C Exposure is $2,874,998.47.
(v) The outstanding aggregate principal balance of the Revolving Credit
Loans (HAPL) is $0.
3. Waivers. The Agent and the Banks hereby waive the following:
(a) (i) the failure of Xxxxxx and the Guarantors to maintain a Consolidated
Tangible Net Worth ("TNW") (excluding the financial impact of third party sales
by Tajima USA, Inc. from consolidated operations and after excluding the net
income of Tajima USA, Inc. from Xxxxxx'x consolidated net income) of not less
than $60,958,600.00 as of the fiscal year ended January 31, 1999, provided that
the actual TNW as of such fiscal year end is not less than $51,595,000.00.
(ii) the failure of Xxxxxx and the Guarantors to maintain a Consolidated
Tangible Net Worth ("TNW") of not less than $60,958,600.00 as of the fiscal year
ended January 31, 1999, provided that the actual TNW as of such fiscal year end
is not less than $51,669,000.00.
(b) (i) the failure of Xxxxxx and Guarantors to maintain as of the fiscal
year ended January 31, 1999, on a consolidated basis, a Funded Debt to EBITDA
Ratio (excluding the financial impact of third party sales by Tajima USA, Inc.
from consolidated operations and after excluding the net income of Tajima USA,
Inc. from Xxxxxx'x consolidated net income) of not greater than 2.25 to 1.00,
provided that the actual Funded Debt to EBITDA Ratio as of such fiscal year end
is not greater than 9.00 to 1.00.
(ii) the failure of Xxxxxx and Guarantors to maintain as of the fiscal year
ended January 31, 1999, on a consolidated basis, a Funded Debt to EBITDA Ratio
of not greater than 2.25 to 1.00, provided that the actual Funded Debt to EBITDA
Ratio as of such fiscal year end is not greater than 5.37 to 1.00.
(c) (i) the failure of Xxxxxx and Guarantors to maintain as of the fiscal
year ended January 31, 1999, on a consolidated basis, a Fixed Charge Coverage
Ratio (excluding the financial impact of third party sales by Tajima USA, Inc.
from consolidated operations and after excluding the net income of Tajima USA,
Inc. from Xxxxxx'x consolidated net income) of not less than 3.50 to 1.00,
provided that the actual Fixed Charge Coverage Ratio is not less than -0.08 to
1.00.
(ii) the failure of Xxxxxx and Guarantors to maintain as of the fiscal year
ended January 31, 1999, on a consolidated basis, a Fixed Charge Coverage Ratio
of not less than 3.50 to 1.00, provided that the actual Fixed Charge Coverage
Ratio is not less than 0.67 to 1.00.
4. Effectiveness. This Waiver shall become effective upon the occurrence of
the following events and the receipt and satisfactory review by the Bank and its
counsel of the following documents:
(a) The Agent shall have received this Waiver, duly executed by Hirsch,
HAPL, each other Guarantor and each of the Banks.
(b) The Bank's counsel shall have been paid their fees and disbursements in
connection with this Waiver.
5. Governing Law. This Waiver shall be governed by, and construed in
accordance with, the laws of the State of New York.
6. Counterparts. This Waiver may be executed in any number of counterparts
and by different parties hereto in separate counterparts, each of which when so
executed shall be deemed to be an original and all of which taken together shall
constitute one and the same agreement.
7. Ratification. Except as hereby amended, the Agreement and all other Loan
Documents executed in connection therewith shall remain in full force and effect
in accordance with their originally stated terms and conditions. The Agreement
and all other Loan Documents executed in connection therewith, as amended
hereby, are in all respects ratified and confirmed.
REMAINDER OF PAGE INTENTIONALLY LEFT BLANK
IN WITNESS WHEREOF, the parties hereto have executed this Waiver as of the
year and date first above written.
THE BANK OF NEW YORK, as Agent HAPL LEASING CO., INC.
By:____________________________ By:________________________
Xxxxxx X. Xxxxxx Name:
Vice President Title:
THE BANK OF NEW YORK PULSE MICROSYSTEMS, LTD.
By:____________________________ By:________________________
Xxxxxx X. Xxxxxx Name:
Vice President Title:
FLEET BANK, N.A. SEWING MACHINE EXCHANGE, INC.
By:____________________________ By:________________________
Name: Name:
Title: Title:
MELLON BANK, N.A. SEDECO, INC.
By:____________________________ By:________________________
Name: Name:
Title: Title:
XXXXXX INTERNATIONAL CORP. XXXXXX EQUIPMENT CONNECTION,INC.
By:____________________________ By:_________________________
Name: Name:
Title: Title:
