Exhibit 10.1
AMENDMENT NO. 6 TO
LOAN AND SECURITY AGREEMENT
September 29, 2000
All American Semiconductor, Inc.
00000 Xxxxxxxxx 00xx Xxxxxx
Xxxxx, Xxxxxxx 00000
Attention: Chief Financial Officer
Ladies and Gentlemen:
Reference is made to the Loan and Security Agreement dated as
of May 3, 1996 among Xxxxxx Trust and Savings Bank, as a Lender and as
Administrative Agent for the Lenders, American National Bank and Trust Company
of Chicago, as a Lender and as Collateral Agent for the Lenders, the other
Lenders party thereto and All American Semiconductor, Inc., as amended to date
(the "Loan Agreement"). Unless defined herein, capitalized terms used herein
shall have the meanings provided for such terms in the Loan Agreement.
Borrower has requested that Lenders agree to amend the Loan
Agreement in certain respects. Lenders have agreed to the foregoing on the terms
and pursuant to the conditions provided herein.
Therefore, the parties hereto hereby agree as follows:
1. AMENDMENTS TO LOAN AGREEMENT. The Loan Agreement is
hereby amended, as follows:
(a) The first "WHEREAS" clause in the Loan Agreement is
hereby amended by deleting therefrom the amount "One Hundred Million Dollars
($100,000,000)" and inserting in its place the amount "One Hundred Fifty Million
Dollars ($150,000,000)".
(b) The definition of the term "Applicable Domestic Margin"
contained in Section 1.1 of the Loan Agreement is hereby deleted in its
entirety.
(c) The definition of the term "Applicable LIBOR Margin"
contained in Section 1.1 of the Loan Agreement is hereby deleted in its
entirety.
(d) A new defined term "Applicable Margin" is hereby
inserted into Section 1.1 of the Loan Agreement, as follows:
"APPLICABLE MARGIN - from September 29, 2000 to, but not
including, the first Adjustment Date (as hereinafter defined) the
percentages set forth below with respect to the Domestic Rate Portions
and the LIBOR Portions:
Domestic Rate Portions .25%
LIBOR Portions 2.25%
The percentages set forth above will be adjusted ten (10)
Business Days after delivery by the Borrower to the Administrative
Agent of the financial statements required to be delivered pursuant to
SECTION 7.1(b) of this Agreement for each March, June, and September,
commencing with the month ending March 31, 2001, and ten (10) Business
Days after delivery by the Borrower to the Administrative Agent of the
financial statements required to be delivered pursuant to SECTION
7.1(c) of this Agreement for each fiscal year of the Borrower beginning
with the fiscal year ending December 31, 2000 (each such date falling
ten (10) Business Days after delivery of the applicable financial
statements described above is referred to as an "Adjustment Date"),
effective prospectively (PROVIDED, that, notwithstanding the delivery
of any such financial statements, the rate applicable to any existing
LIBOR Portion shall remain unchanged during the Interest Period in
effect for such LIBOR Portion), by reference to (i) the Debt Service
Coverage Ratio for the twelve (12) month period ending on the last day
of the calendar quarter immediately preceding the relevant Adjustment
Date and (ii) Excess Loan Availability for the three (3) month period
ending on the last day of the calendar quarter immediately preceding
the relevant Adjustment Date, determined on an average basis for such
period, in accordance with the following:
(i) if or on the Adjustment Date, the Debt Service Coverage
Ratio is greater than 2.0:1.0, Excess Loan Availability is greater than
or equal to Eighteen Million Dollars ($18,000,000) and no Default or
Event of Default is in existence, the Applicable Margin for Domestic
Rate Portions shall be equal to zero (0%) and the Applicable Margin for
LIBOR Portions shall be equal to two percent (2.00%);
(ii) if or on the Adjustment Date, the Debt Service Coverage
Ratio is less than or equal to 1.5:1.0 and Excess Loan Availability is
less than Ten Million Dollars ($10,000,000), the Applicable Margin for
Domestic Rate Portions shall be equal to one-half of one percent
(0.50%) and the Applicable Margin for LIBOR Portion shall be equal to
two and one-half percent (2.50%); and
(iii) at all other times, the Applicable Margin for Domestic
Rate Portions shall be equal to one-quarter of one percent (0.25%) and
the Applicable Margin for LIBOR Portion shall be equal to two and
one-quarter percent (2.25%);
PROVIDED that, if Borrower fails to deliver the applicable financial
statements required to be delivered pursuant to SECTION 7.1(b) OR (c)
of this Agreement on or before the due date thereof, the Applicable
Margin shall automatically adjust to the highest Applicable Margin set
forth above, effective prospectively from such due date until the next
Adjustment Date."
(e) The definition of the term "Commercial Letter of Credit
Limit" contained in Section 1.1 of the Loan Agreement is hereby amended and
restated in its entirety, as follows:
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" 'COMMERCIAL LETTER OF CREDIT LIMIT' shall mean Thirty
Million Dollars ($30,000,000)."
(f) Clauses (d), (l) and (o) of the definition of the term
"Default" contained in Section 1.1 of the Loan Agreement are each hereby amended
by deleting therefrom the amount "Five Hundred Thousand Dollars ($500,000)" in
each place that it appears and inserting in its place the amount "One Million
Dollars ($1,000,000)".
(g) The definition of the term "Floating Inventory Cap"
contained in Section 1.1 of the Loan Agreement is hereby amended by deleting
therefrom the amount "two and three quarters (2.75)" and inserting in its place
the amount "three (3.00)".
(h) The definition of the term "Letter of Credit Limit"
contained in Section 1.1 of the Loan Agreement is hereby amended and restated in
its entirety, as follows:
" 'LETTER OF CREDIT LIMIT' shall mean Thirty Million Dollars
($30,000,000)."
(i) The definition of the term "Maximum Facility" contained
in Section 1.1 of the Loan Agreement is hereby amended and restated in its
entirety, as follows:
" 'MAXIMUM FACILITY' shall mean One Hundred Fifty Million
Dollars ($150,000,000)."
(j) A new definition of the term "OS Franchise Inventory" is
hereby inserted into Section 1.1 of the Loan Agreement, in appropriate
alphabetical order, as follows:
" 'OS FRANCHISE INVENTORY' shall mean Franchise Inventory
purchased by the Borrower from On Semiconductor Corporation."
(k) The definition of the term "Rate Decrease Event"
contained in Section 1.1 of the Loan Agreement is hereby deleted in its
entirety.
(l) The definition of the term "Rate Increase Event"
contained in Section 1.1 of the Loan Agreement is hereby deleted in its
entirety.
(m) The definition of the term "Special Rate Decrease Event"
contained in Section 1.1 of the Loan Agreement is hereby deleted in its
entirety.
(n) The definition of the term "Standby Letter of Credit
Limit" contained in Section 1.1 of the Loan Agreement is hereby amended and
restated in its entirety, as follows:
" 'STANDBY LETTER OF CREDIT LIMIT' shall mean Twenty Million
Dollars ($20,000,000)."
(o) The definition of the term "Loan Availability" contained
in Section 2.1(a) of the Loan Agreement is hereby amended and restated in its
entirety, as follows:
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"(i) eighty-five percent (85%) of the face amount (less
maximum discounts, credits and allowances which may be taken by or
granted to Account Debtors in connection therewith) then outstanding
under existing Eligible Accounts at such time; PLUS
(ii) the lesser of (a) the sum of (x) fifty percent (50%) of
the value of Eligible Inventory consisting of Franchise Inventory other
than OS Franchise Inventory, (y) sixty-five percent (65%), reducing to
fifty percent (50%) on July 1, 2001, of the value of Eligible Inventory
consisting of OS Franchise Inventory and (z) the lesser of (I) twenty
percent (20%) of the value of Eligible Inventory consisting of
Non-Franchise Inventory and (II) Three Million Fifty Thousand Dollars
($3,050,000), and (b) the applicable Floating Inventory Cap; provided,
that notwithstanding the foregoing, the advance rate applicable to
Eligible Inventory consisting of OS Franchise Inventory shall be equal
to fifty percent (50%) during any month if Excess Loan Availability for
the one (1) month period ending on the last day of the prior month,
determined on an average basis for such period, is less than Ten
Million Dollars ($10,000,000). For purposes of this clause (ii),
Inventory will be valued at the lower of average cost or market value."
(p) Section 2.6(a)(i) of the Loan Agreement is hereby
amended by deleting therefrom the phrase "Applicable Domestic Margin" and
inserting in its place the phrase "Applicable Margin then in effect for the
applicable Loan".
(q) Section 2.6(a)(ii) of the Loan Agreement is hereby
amended by deleting therefrom the phrase "Applicable LIBOR Margin" and inserting
in its place the phrase "Applicable Margin then in effect for the applicable
Loan".
(r) Section 2.6(b) of the Loan Agreement is hereby amended
by deleting therefrom the phrase "; the foregoing will be in addition to any
increase in the Applicable LIBOR Margin or the Applicable Domestic Margin caused
by the occurrence of such Default".
(s) Section 2.7(a) of the Loan Agreement is hereby amended
and restated in its entirety, as follows:
"(a) The Borrower shall pay to the Administrative Agent, for
the account of the Lenders, an unused facility fee determined by (i)
subtracting from the Maximum Facility, the sum of the average daily
outstanding Revolving Loans during the immediately preceding calendar
month and the average daily Letter of Credit Exposure during the
immediately preceding calendar month and (ii) multiplying the result
thereof by the "Applicable Percentage" (as defined below) per annum.
The unused facility fees shall be computed on the basis of a year of
three hundred sixty (360) days for the actual number of days elapsed
and shall be payable monthly in arrears on the first day of each
calendar month commencing October 1, 2000. For purposes hereof, the
term "Applicable Percentage" shall mean (i) one quarter of one percent
(0.25%) at all times that the Applicable Margin for Domestic Rate
Portions is equal to 0 percent (0%) and (ii) three-eighths of one
percent (0.375%) at all other times."
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(t) Section 2.7(d) of the Loan Agreement is hereby amended
and restated in its entirety, as follows:
"(d) The Borrower shall pay to the Administrative Agent, for
the account of the Collateral Agent, a collateral agency fee equal to
Eighty-Five Thousand Dollars ($85,000) per annum, payable quarterly in
advance in equal installments of Twenty-One Thousand Two Hundred Fifty
Dollars ($21,250), commencing on October 1, 2000 and continuing in each
quarterly anniversary thereof."
(u) The first sentence of Section 2.8 of the Loan Agreement
is hereby amended and restated in its entirety, as follows:
"This Agreement shall be effective until May 3, 2004 (the
"Initial Term"), and may be renewed for successive periods ("Terms") of
one year upon the prior written agreement of the Borrower and each
Lender, unless terminated as provided in this SECTION 2.8 or following
prepayment under SECTION 2.9."
(v) Section 3.5 of the Loan Agreement is hereby amended by
deleting therefrom the amount "Two Hundred Thousand Dollars ($200,000)" each
place that it appears, and inserting in its place the amount "Five Hundred
Thousand Dollars ($500,000)".
(w) Section 3.10 of the Loan Agreement is hereby amended by
(i) deleting therefrom the amount "One Hundred Thousand Dollars ($100,000)" and
inserting in its place the amount of "Two Hundred Fifty Thousand Dollars
($250,000)" and (ii) amending and restating clause (g) thereof in its entirety,
as follows:
"(g) Inventory which is stored with a consignee, unless the
Borrower has furnished or caused to be furnished to the Collateral
Agent such agreements, instruments and documents as the Collateral
Agent has specified with respect to such consigned inventory, including
without limitation UCC financing statements showing the consignee as
debtor, the Borrower as secured party and the Collateral Agent as
assignee of secured party and the Borrower has appropriately notified
(with a copy to the Collateral Agent) each other Person claiming a lien
on such Inventory of the Borrower's and the Collateral Agent's rights
with respect thereto;"
(x) Section 3.13 of the Loan Agreement is hereby amended and
restated in its entirety, as follows:
"3.13 SAFEKEEPING OF INVENTORY AND INVENTORY COVENANTS.
Neither either Agent nor any Lender shall be responsible for:
(a) the safekeeping of the Inventory of any Designated Company; (b) any
loss or damage to the Inventory of any Designated Company; (c) any
diminution in the value of the Inventory of any Designated Company; or
(d) any act or default of any carrier, warehouseman, bailee, forwarding
agency or any other Person. All risk of loss, damage, destruction or
diminution in value of the Inventory of any Designated
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Company shall be borne by such Designated Company. No Inventory of any
Designated Company shall be stored with a bailee, warehouseman,
processor, assembler or similar third party unless the Borrower first
(i) obtains the Collateral Agent's written consent, which will not be
unreasonably withheld, and (ii) furnishes or to causes to be furnished
to the Collateral Agent such agreements, instruments and documents as
the Collateral Agent shall reasonably specify with respect to such
stored Inventory, including without limitation any negotiable warehouse
receipts or other documents of title and warehouseman's, processor's or
similar agreements; provided, that notwithstanding the foregoing, the
Designated Companies may keep up to an aggregate amount of Five Hundred
Thousand Dollars ($500,000) of Inventory located at such third party
locations without being required to comply with such requirements,
although such Inventory shall not be deemed Eligible Inventory unless
the requirements of CLAUSE (ii) above have been complied with in
respect of such locations. No Designated Company shall sell any
Inventory to any customer on a xxxx-and-hold basis. The Designated
Companies may sell Inventory on a consignment basis to their customers,
although such Inventory shall not be deemed to be Eligible Inventory
unless the requirements of SECTION 3.10(g) hereof have been complied
with in respect of any such locations. The Borrower shall notify the
Collateral Agent if any Designated Company has on its premises for
processing or otherwise, inventory or other goods owned by other
Persons and the Borrower agrees to keep or cause to be kept all such
inventory and goods segregated from the applicable Designated Company's
own Inventory. The Borrower agrees that if the Borrower has not
provided the Collateral Agent with a Landlord's Agreement duly executed
by the owner of each leased premise of a Designated Company at which
Two Hundred Fifty Thousand Dollars ($250,000) or more of Inventory is
at any time located, the Inventory located at such locations shall not
be included in Eligible Inventory."
(y) A new Section 7.17 is hereby added to the Loan
Agreement, as follows:
"7.17 POST AMENDMENT FURTHER ASSURANCES.
Borrower shall deliver to the Administrative Agent the
following items within the time frames set forth below, all in form and
substance satisfactory to the Administrative Agent:
(a) on or before October 15, 2000, the following amended and
restated Schedules to the Loan Agreement: Schedules 3.14, 6.5, 6.8,
6.13, 6.15, 6.17, 6.18, 6.19, 8.4, 8.5 and 8.9; and
(b) on or before October 31, 2000, (i) a Secretary's
Certificate for each Designated Company, with respect to resolutions of
directors, incumbency of officers, by-laws and certificate or articles
of incorporation, (ii) a certificate of good standing for each
Designated Subsidiary in its state of incorporation and (iii) a legal
opinion of Bilzin Xxxxxxx Xxxx Xxxxx Price & Xxxxxxx LLP with respect
to each Designated Subsidiary, but limited to matters of US federal
law,
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Florida law and the general corporation law of Delaware and covering
the same matters as set forth in the legal opinion being delivered on
September 29, 2000."
(z) Clause (d) of Section 8.2 of the Loan Agreement is
hereby amended to delete therefrom the amount "Two Million Five Hundred Thousand
Dollars ($2,500,000)" and inserting in its place the amount "Ten Million Dollars
($10,000,000)".
(aa) Section 8.4 of the Loan Agreement is hereby amended and
restated in its entirety, as follows:
"8.4 INVESTMENTS OR LOANS.
Except as set forth on SCHEDULE 8.4, no Designated Company
shall make or permit to exist investments or loans in or to any other
Person, except (a) investments in its Subsidiaries existing on
September 29, 2000; (b) investments in short-term direct obligations of
the United States Government; (c) investments in negotiable
certificates of deposit issued by any Lender or by any other bank
satisfactory to the Administrative Agent, payable to the order of such
Designated Company or to bearer; (d) investments in commercial paper
rated A1 or P1; (e) loans made by the Borrower to another Designated
Company; (f) nominal (not to exceed Fifty Thousand Dollars ($50,000)
each) investments made to initially capitalize new Designated
Companies; (g) Investments by the Borrower in any New Subsidiary in
connection with the consummation of any Permitted Acquisition; (h) an
Investment by Borrower of up to $60,000 in a third party; and (i)
Investments by the Borrower in AllAmMex Components S. de X.X. de C.V.
not to exceed (i) Two Million Dollars ($2,000,000) during the period
prior to and through and including March 31, 2002 or (ii) Three Million
Dollars ($3,000,000) during the period commencing on April 1, 2002 and
thereafter. Except as permitted by clause (i) above, after the date
hereof, no Designated Company shall make any loan to or investment in
any Company that is not a Designated Company."
(bb) Clauses (a) and (b) of Section 8.8 of the Loan Agreement
are hereby amended and restated in their entirety, as follows:
"(a) Two Million Five Hundred Thousand Dollars ($2,500,000)
during the 2000 fiscal year, (b) Ten Million Dollars ($10,000,000)
during the 2001 fiscal year or (c) Two Million Five Hundred Thousand
Dollars ($2,500,000) during each fiscal year thereafter,"
(cc) Section 8.9 of the Loan Agreement is hereby amended by
deleting therefrom the amount "Two Hundred Fifty Thousand Dollars ($250,000)"
the first time that it appears and inserting in its place the amount "Five
Hundred Thousand Dollars ($500,000)".
(dd) Section 8.12 of the Loan Agreement is hereby deleted in
its entirety.
(ee) Section 8.17 of the Loan Agreement is hereby amended and
restated in its entirety, as follows:
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"8.17 MINIMUM TANGIBLE NET WORTH.
Tangible Net Worth of the Designated Companies, on a
consolidated basis, shall not at any time during any period set forth
below be less than the amount set forth below opposite such period:
Period Amount
------ ------
September 30, 2000 through and $30,000,000
including December 30, 2000
December 31, 2000 through and $34,000,000
including December 30, 2001
December 31, 2001 through and $40,000,000
including December 30, 2002
December 31, 2002 through and $45,000,000
including December 30, 2003
December 31, 2003 and thereafter $50,000,000
(ff) Section 8.19 of the Loan Agreement is hereby amended and
restated in its entirety, as follows:
"8.19 MINIMUM INVENTORY TURNOVER.
Inventory Turnover shall not on the last day of any calendar
quarter ending after June 30, 2000, for the calendar quarter ending on
such date, be less than 3.0."
(gg) The Pro Rata Share and Maximum Loan Amount of each
Lender is amended and restated as set forth on Annex 1 attached hereto.
(hh) Schedules 2.1, 3.11, 3.16, 6.1, 6.10 and 6.12 attached
to the Loan Agreement are hereby amended and restated in their entirety, as set
forth on the Schedules attached hereto.
2. SCOPE. This Amendment No. 6 to Loan and Security
Agreement (this "Amendment") shall have the effect of amending the Loan
Agreement and the other Financing Agreements as appropriate to express the
agreements contained herein. In all other respects, the Loan Agreement and the
other Financing Agreements shall remain in full force and effect in accordance
with their respective terms.
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3. CONDITIONS TO EFFECTIVENESS. This Amendment shall be
effective immediately upon the execution hereof by each Lender, the acceptance
hereof by Borrower and each Guarantor, and the delivery hereof to the
Administrative Agent, at 000 Xxxx Xxxxxx Xxxxxx, Xxxxxxx, Xxxxxxxx 00000,
Attention: Mr. Xxxxxxx Xxxx, Vice President, on or before September 29, 2000,
together with the following, all in form and substance satisfactory to each
Agent:
(a) Amended and Restated Revolving Credit Notes executed by
the Borrower in the amount of each Lender's Maximum Loan
Amount;
(b) Secretary's Certificate of the Borrower with respect to
resolutions of directors, incumbency of officers,
by-laws and Certificate of Incorporation;
(c) certified copy of Borrower's Certificate of
Incorporation from the State of Delaware;
(d) certificates of good standing for the Borrower in the
States of Delaware and Florida;
(e) legal opinion of Bilzin Xxxxxxx Xxxx Xxxxx Price &
Xxxxxxx LLP;
(f) an extension fee of $125,000, payable to each Lender in
accordance with its Pro Rata Share immediately prior to
the effectiveness of this Amendment; and
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(g) a closing fee of $250,000, payable to each Lender in
accordance with its pro rata portion of the amount by
which the aggregate Maximum Loan Amounts of the Lenders
have increased by virtue of this Amendment.
Very truly yours,
XXXXXX TRUST AND SAVINGS BANK,
as Administrative Agent and a Lender
Pro Rata Share: 20%
By: /s/ XXXXXXX X. XXXX
--------------------------------------
Its: Vice President
AMERICAN NATIONAL BANK AND TRUST
COMPANY OF CHICAGO,
as Collateral Agent and a Lender
Pro Rata Share: 20%
By: /s/ M. XXXXXX XXXXXX
--------------------------------------
Its: Vice President
FLEET BUSINESS CREDIT CORPORATION,
formerly known as SANWA BUSINESS
CREDIT CORPORATION, as a Lender
Pro Rata Share: 15%
By: /s/ XXXXXX XXXXXXX
--------------------------------------
Its: Vice President
FIRSTAR BANK N.A.,
formerly known as MERCANTILE BUSINESS
CREDIT, INC., as a Lender
Pro Rata Share: 15%
By: /s/ XXXX XXXXX
--------------------------------------
Its: Vice President
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GMAC COMMERCIAL CREDIT LLC,
formerly known as THE BANK OF NEW YORK
COMMERCIAL CORPORATION, as a Lender
Pro Rata Share: 15%
By: /s/ XXXXXXX XXXXX
--------------------------------------
Its: Vice President
BANK OF AMERICA, N.A.,
formerly known as NATIONSBANK, N.A.
successor by merger to
NATIONSBANK OF TEXAS, N.A., as a Lender
Pro Rata Share: 15%
By: /s/ XXXX X. XXXXXXX
--------------------------------------
Its: Vice President
Acknowledged and agreed to as of this 29th day of September, 2000.
ALL AMERICAN
SEMICONDUCTOR, INC.
By: /s/ XXXXXX X. XXXXXXXX
----------------------------------
Its: EVP & CFO
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ACKNOWLEDGMENT AND ACCEPTANCE OF GUARANTORS
Each of the undersigned, in its capacity as a Guarantor of the
Liabilities of Borrowers to Agents and Lenders under the Loan Agreement, hereby
acknowledges receipt of the foregoing Amendment No. 6 to Loan and Security
Agreement, accepts and agrees to be bound by the terms thereof, ratifies and
confirms all of its obligations under the Master Corporate Guaranty executed by
it and agrees that such Master Corporate Guaranty shall continue in full force
and effect as to it, notwithstanding such amendment.
Dated: September 29, 2000
Each of the Subsidiaries of All American
Semiconductor, Inc. listed on Exhibit A
attached hereto
By: /s/ XXXXXX X. XXXXXXXX
-------------------------------
Its: EVP & CFO
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EXHIBIT A
SUBSIDIARIES
NAME
----
All American Semiconductor, Inc.
Access Micro Products, Inc.
All American Added Value, Inc.
All American A.V.E.D., Inc.
All American Semiconductor of Atlanta, Inc.
All American Semiconductor of Canada, Inc.
All American Semiconductor of Chicago, Inc.
All American Semiconductor of Florida, Inc.
All American Semiconductor of Huntsville, Inc.
All American Semiconductor of Massachusetts, Inc.
All American Semiconductor of Michigan, Inc.
All American Semiconductor of Minnesota, Inc.
All American Semiconductor of New York, Inc.
All American Semiconductor of Ohio, Inc.
All American Semiconductor of Philadelphia, Inc.
All American Semiconductor of Phoenix, Inc.
All American Semiconductor of Portland, Inc.
All American Semiconductor of Rockville, Inc.
All American Semiconductor of Salt Lake, Inc.
All American Semiconductor of Texas, Inc.
All American Semiconductor-Northern California, Inc.
All American Semiconductor of Washington, Inc.
All American Semiconductor of Wisconsin, Inc.
All American Technologies, Inc.
All American Transistor of California, Inc.
Aved Industries, Inc.
Palm Electronics Manufacturing Corp.
