AMENDMENT TO CREDIT AGREEMENT AND CONSENT
Exhibit
10.27.9
AMENDMENT TO CREDIT
AGREEMENT AND CONSENT
as
of January 6, 2009
JACO
ELECTRONICS, INC.
000
Xxxx Xxxxxx
Xxxxxxxxx,
Xxx Xxxx 00000
Ladies
and Gentlemen:
The
CIT Group/Business Credit, Inc. (“CIT”), in its
capacity as agent pursuant to the Credit Agreement (as hereinafter defined)
acting for and on behalf of the financial institutions which are parties thereto
as lenders (in such capacity, “Agent”), CIT, Bank of
America, N.A. and the other financial institutions which are parties to the
Credit Agreement as lenders (each a “Lender” and
collectively, “Lenders”) have
entered into certain financing arrangements pursuant to which Agent and Lenders
may make loans and advances and provide other financial accommodations to Jaco
Electronics, Inc., a New York corporation (“Jaco”), and Interface
Electronics Corp., a Massachusetts corporation (“Interface”; and
together with Jaco, collectively, “Borrowers”) as set
forth in the Credit Agreement, dated as of December 22, 2006, by and among
Borrowers, Agent and Lenders (as the same now exists or may hereafter be
amended, modified, supplemented, extended, renewed, restated or replaced, the
“Credit
Agreement”), and other agreements, documents and instruments referred to
therein or at any time executed and/or delivered in connection therewith or
related thereto (all of the foregoing, together with the Credit Agreement, as
the same now exist or may hereafter be amended, modified, supplemented,
extended, renewed, restated or replaced, being collectively referred to herein
as the “Loan
Documents”).
Borrowers
have requested that Agent and Lenders (a) consent to the sale and transfer (the
“Sale”) by Jaco
to WPG Americas, Inc. (“Purchaser”) of all of
Jaco’s right, title and interest in and to substantially all of the assets and
properties that are owned and utilized by Jaco in connection with its business
of the distribution of passive and active electronic components and supporting
technology products and services but excluding Jaco’s flat-panel display and
supporting technology products and services (the “Component Business”),
which assets and properties are more particularly described in the Asset
Purchase Agreement, dated as of November 7, 2008, as amended by that certain
First Amendment to Asset Purchase Agreement, dated as of December 30, 2008, by
and between Jaco and WPG (“Purchase Agreement”),
and are defined therein as the “Acquired Assets”, (b) in connection with and
after giving effect to the Sale, agree to release their liens and security
interests in the Acquired Assets and (c) make certain other amendments to the
Credit Agreement and other Loan Documents as set forth herein, which Agent and
Lenders are willing to do subject to the terms and provisions set forth in this
Amendment to Credit Agreement and Consent (this “Amendment”);
and
In
consideration of the premises and the mutual covenants contained herein, the
parties hereto agree as follows:
1. Defined
Terms.
(a) Additional Definitions to
Credit Agreement. As used herein, the following terms shall
have the meanings given to them below, and the Credit Agreement and the other
Loan Documents are hereby amended to include, in addition and not in limitation,
the following definitions:
“3-Month LIBO Rate”
means, for any day, (a) the rate per annum equal to the rate determined by the
Agent to be the offered rate that appears on the Bloomberg BBAM Screen (or any
successor thereto) that displays an average British Bankers Association Interest
Settlement Rate for deposits in Dollars (for delivery on such day) with a term
equivalent to three months, determined as of approximately 11:00 a.m. (London
time) on such day (or if such day is not a Business Day, the immediately
preceding Business Day), or (b) if the rate referenced in the preceding clause
(a) does not appear on such page or service or such page or such service shall
not be available, the rate per annum equal to the rate determined by the Agent
to be the offered rate on such other page or other service that displays an
average British Bankers Association Interest Settlement Rate for deposits in
Dollars (for delivery on such day) with a term equivalent to three months,
determined as of approximately 11:00 a.m. (London time) on such day (or if such
day is not a Business Day, the immediately preceding Business Day), or (c) if
the rates referenced in the preceding clauses (a) and (b) are not available, the
rate per annum (rounded upward to the next 1/100th of 1%) determined by the
Agent as the rate of interest at which deposits in Dollars for delivery on such
day in same day funds in the approximate amount of the LIBOR Loan being made,
continued or converted by JPMorgan Chase Bank and with a term equivalent to
three months would be offered by JPMorgan Chase Bank’s London Branch (or such
other major bank as is acceptable to the Agent if JPMorgan Chase Bank is no
longer offering to acquire or allow deposits in the London interbank eurodollar
market) to major banks in the London interbank eurodollar market at their
request at approximately 11:00 a.m. (London time) on such day (or if such day is
not a Business Day, the immediately preceding Business Day).”
“1/09 Amendment” means
the Amendment to Credit Agreement and Consent, dated as of January 6, 2009, by
and among Borrowers, the Agent and the Lenders.
“Closing Component Business
Accounts” means the Component Business Accounts outstanding as of the
date hereof as set forth in the report required to be delivered to Agent under
Section 8(b)(i) of the 1/09 Amendment.
“Closing Dominion
Accounts” means the Accounts due and owing Borrowers from Dominion Voting
Systems Corp. outstanding as of the date hereof as set forth in the report
required to be delivered to Agent under Section 8(b)(ii) of the 1/09
Amendment.
“Component Business”
means the Parent’s business of the distribution of passive and active electronic
components and supporting technology products and services, but excluding the
Parent’s flat-panel display and supporting technology products and
services.
“Component Business
Account” means an Account arising out of or in connection with the
Component Business.
“Consent to Supplemental
Loan” means the Consent to Supplemental Loan Under Loan and Security
Agreement, dated March 5, 2007, among the Borrowers, the Agent and The CIT
Group/Business Credit, Inc., as lender, as the same now exists or may hereafter
be amended, modified, supplemented, extended, renewed, restated or
replaced.
“Projected EBITDA”
means the Borrowers’ projected EBITDA as set forth in the 09/10 Projections as
defined in Section 6(g)(ii) of the 1/09 Amendment.
“Supplemental Loan”
means the Revolving Loan made by The CIT Group/Business Credit, Inc., as lender,
to the Borrowers pursuant to the Consent to Supplemental Loan.
(b) Other Capitalized Terms used
in this Amendment. Capitalized terms used and not otherwise
defined herein shall have their respective meanings as defined in the Credit
Agreement and the Consent, as amended by this Amendment.
2. Acknowledgment
(a) Acknowledgment of
Obligations. Borrowers hereby acknowledge, confirm and agree
that as of the close of business on January 5, 2009, Borrowers are indebted to
Agent and Lenders in respect of the Revolving Loans in the aggregate principal
amount of $12,578,015.00, the Supplemental Loan in the aggregate principal
amount of $500,000 and Letter of Credit Obligations in the aggregate principal
amount of $2,900,000. All such Loans, together with interest accrued
and accruing thereon, and fees, costs, expenses and other charges now or
hereafter payable by Borrowers to Lenders, are unconditionally owing by
Borrowers to Lenders, without offset, defense or counterclaim of any kind,
nature or description whatsoever.
(b) Acknowledgment of Security
Interests. Borrowers hereby acknowledge, confirm and agree
that Agent has and shall continue to have valid, enforceable and perfected liens
upon and security interests in the Collateral heretofore granted to Agent
pursuant to the Loan Documents or otherwise granted to or held by
Agent.
(c) Binding Effect of
Documents. Each Borrower hereby acknowledges, confirms and
agrees that: (a) each of the Loan Documents to which it is a party has been duly
executed and delivered to Agent by such Borrower, and each is in full force and
effect as of the date hereof, (b) the agreements and obligations of such
Borrower contained in such documents and in this Amendment constitute the legal,
valid and binding Obligations of such Borrower, enforceable against it in
accordance with their respective terms, and such Borrower has no valid defense
to the enforcement of such Obligations, and (c) Agent and Lenders are and shall
be entitled to the rights, remedies and benefits provided for in the Loan
Documents and applicable law.
3. Amendments to Loan
Documents.
(a) Aggregate
Commitment. The definition of the term “Aggregate Commitment”
as set forth in Section 1.01 of the Credit Agreement is hereby amended and
restated in its entirety as follows:
““Aggregate Commitment”
means the aggregate of the Commitments of all the Lenders, as reduced from time
to time pursuant to the terms hereof. As of the 1/09 Amendment, the
Aggregate Commitment shall be in the amount of $25,000,000.”
(b) Alternate Base
Rate. The definition of the term “Alternate Base Rate” as set
forth in Section 1.01 of the Credit Agreement is hereby amended and restated in
its entirety as follows:
““Alternate Base Rate”
means, for any day, a fluctuating rate per annum equal to the highest of (a) the
Federal Funds Effective Rate plus 1/2 of 1%, (b) the rate of interest in effect
for such day as publicly announced from time to time by JPMorgan Chase Bank as
its “prime rate” in effect for such day or (c) the 3-Month LIBO Rate on such day
plus one (1%) percent. Any change in the “prime rate” announced by
JPMorgan Chase Bank shall take effect without notice to the Borrowers at the
opening of business on the day specified as the effective date of change in the
public announcement or publication of such change. The Alternate Base
Rate is not necessarily the lowest rate of interest charged by Lenders in
connection with extensions of credit. If JPMorgan Chase Bank ceases
to announce its “prime rate”, the Agent may select a reasonably comparable index
or source to use as the basis for the Alternate Base Rate.”
(c) Applicable
Rate. The definition of the term “Applicable Rate” as set
forth in Section 1.01 of the Credit Agreement is hereby amended and restated in
its entirety as follows:
““Applicable Rate”
means (a) from the date of the 1/09 Amendment through and including June 30,
2009, three (3.00%) percent with respect to any ABR Loan and four (4.00%)
percent with respect to any Eurodollar Loan, (b) from July 1, 2009 through and
including September 30, 2009, three and one half (3.50%) percent with respect to
any ABR Loan and four and one half (4.50%) percent with respect to any
Eurodollar Loan and (c) from October 1, 2009 and at all times thereafter, four
(4.00%) percent with respect to any ABR Loan and five (5.00%) percent with
respect to any Eurodollar Loan.”
(d) Availability
Block.
|
(i)
|
The
definition of the term “Availability Block” as set forth in Section 1.01
of the Credit Agreement is hereby amended and restated in its entirety as
follows:
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““Availability Block”
means $1,500,000, or such lesser amount as Agent, in its Permitted Discretion,
shall determine.”
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(ii)
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Section
3 of the Amendment No. 3 to Consent to Supplemental Loan Under Loan and
Security Agreement is hereby deleted in its
entirety.
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(e) Borrowing
Base. The definition of the term “Borrowing Base” as set forth
in Section 1.01 of the Credit Agreement is hereby amended and restated in its
entirety as follows:
““Borrowing Base”
means, at any time, the sum of (a) 85% of Borrowers’ Eligible Accounts at such
time, plus (b) the lesser of (i) 60% of Borrowers’ Eligible Inventory, valued on
an average cost basis, consistent with the Borrowers’ practices as of the
Effective Date, (ii) 85% of the Net Recovery Rate of Borrowers’ Eligible
Inventory, multiplied by the value of such Inventory determined on an average
cost basis, consistent with the Borrowers’ practices as of the Effective Date,
and (iii) $10,000,000, minus (c) the
Availability Block, minus (d)
Reserves.”
(f) Federal Funds Effective
Rate. The definition of the term “Federal Funds Effective
Rate” as set forth in Section 1.01 of the Credit Agreement is hereby amended and
restated in its entirety as follows:
““Federal Funds Effective
Rate” means, for any day, the rate per annum equal to the weighted
average of the rates on overnight federal funds transactions with members of the
Federal Reserve System arranged by federal funds brokers on such day, as
published by the Federal Reserve Bank on the Business Day next succeeding such
day; provided,
that, (a) if
such day is not a Business Day, the Federal Funds Effective Rate for such day
shall be such rate on such transactions on the next preceding Business Day as so
published on the next succeeding Business Day, and (b) if no such rate is so
published on such next succeeding Business Day, the Federal Funds Effective Rate
for such day shall be the average rate (rounded upward, if necessary, to a whole
multiple of 1/100 of 1%) charged to The CIT Group/Business Credit, Inc. on such
day on such transactions as determined by the Agent, in its sole
discretion.”
(g) Eligible
Accounts. Paragraph (c) of the definition of the term
“Eligible Accounts” as set forth in Section 1.01 of the Credit Agreement is
hereby amended and restated in its entirety as follows:
“(c) with
respect to which more than 90 days have elapsed since the date of the original
invoice therefor or (i) with respect to any Component Business Account, which is
more than 5 days past the due date for payment or (ii) with respect to any
Account (other than Component Business Accounts), which is more than 60 days
past the due date for payment;”
(h) Revolving
Commitment. The definition of the term “Revolving Commitment”
as set forth in Section 1.01 of the Credit Agreement is hereby amended and
restated in its entirety as follows:
““Revolving Commitment”
means, with respect to each Revolving Lender, the commitment of such Lender to
make Revolving Loans and to acquire participations in Letters of Credit and
Swingline Loans hereunder, as such commitment may be (a) reduced from time to
time pursuant to Section 2.11, and (b) reduced or increased from time to time
pursuant to assignments by or to such Lender pursuant to Section
9.05. The initial amount of each Revolving Lender’s Revolving
Commitment is set forth on the Commitment Schedule, or in the Assignment and
Assumption pursuant to which such Lender shall have assumed its Revolving
Commitment, as applicable. As of the 1/09 Amendment, the aggregate
amount of the Revolving Lenders’ Revolving Commitments shall be in the amount of
$25,000,000.”
(i) Letter of Credit
Sublimit. Section 2.08(a)(i) of the Credit Agreement is hereby
amended and restated in its entirety as follows:
“(i) Subject
to the terms and conditions of this Agreement, the Agent and Revolving Lenders
agree to incur, from time to time prior to the Maturity Date, upon the request
of the Administrative Borrower and for a Borrower’s account, Letter of Credit
Obligations by causing Letters of Credit to be issued by (i) Agent (or an
Affiliate thereof), (ii) a Revolving Lender (or an Affiliate thereof) selected
by or acceptable to the Agent or (iii) a bank or other legally authorized Person
selected by or acceptable to the Agent in its sole discretion and guaranteed by
the Agent (a “Letter
of Credit Guaranty”) (each of (i) through (iii), an “Issuing
Bank”). The aggregate amount of all such Letter of Credit
Obligations shall not at any time exceed the least of (A) ONE AND A HALF MILLION
($1,500,000) DOLLARS (the “Letter of Credit
Sublimit”), and (B) the aggregate Revolving Commitments less the
aggregate outstanding principal balance of the Revolving Loans and Swingline
Loans, and (C) the Borrowing Base less the aggregate outstanding principal
balance of the Revolving Loans, Overadvances, Protective Advances and Swingline
Loans. No such Letter of Credit shall have an expiry date that is
more than one year following the date of issuance thereof, unless otherwise
determined by Agent in its sole discretion (including with respect to customary
evergreen provisions), and neither Agent nor Revolving Lenders shall be under
any obligation to incur Letter of Credit Obligations in respect of, or purchase
risk participations in, any Letter of Credit having an expiry date that is later
than the Maturity Date.”
(j) Letter of Credit
Fee. Section 2.08(d) of the Credit Agreement is hereby amended
and restated in its entirety as follows:
“(d) Fees and
Expenses. Each Borrower agrees to pay to Agent for the benefit
of Revolving Lenders, as compensation to such Lenders for Letter of Credit
Obligations incurred hereunder, (i) all costs and expenses incurred by Agent or
any Revolving Lender on account of such Letter of Credit Obligations, and (ii)
for each month during which any Letter of Credit Obligation shall remain
outstanding, a fee (the “Letter of Credit
Fee”) equal to 3.00% on the face amount of each Letter of
Credit. The Letter of Credit Fee shall be due and payable monthly on
the first day of each month. In addition, Borrowers shall pay to any
Issuing Bank, on demand, such fees (including all per annum fees), charges and
expenses of such Issuing Bank in respect of the issuance, negotiation,
acceptance, amendment, transfer and payment of such Letter of Credit or
otherwise payable pursuant to the application and related documentation under
which such Letter of Credit is issued.”
(k) Minimum
EBITDA. Section 6.11 of the Credit Agreement is hereby amended
and by adding the following paragraph (b) as follows:
“(b) EBITDA. Commencing
July, 2009, and for each month thereafter, Borrowers will not permit EBITDA,
calculated on a consolidated basis for the trailing twelve (12) month period
ending on the last day of each such month, of not less than an amount equal to
ninety (90%) percent of the Projected EBITDA or such other amount as Agent and
Parent shall mutually agree.”
(l) Commitment
Fee. Effective as of January 1, 2009, Section 2.14(a) of the
Credit Agreement is hereby amended and restated in its entirety as
follows:
“(a) Borrowers
agree to pay to the Agent for the account of each Revolving Lender a commitment
fee, which shall accrue at the rate of three-quarters of one (0.750%) percent
per annum on the average daily amount of the Available Commitment of such
Revolving Lender during the period from and including the Effective Date to but
excluding the date on which such Lenders’ Revolving Commitments
terminate. Accrued commitment fees shall be payable in arrears on the
last day of each calendar month and on the date on which the Revolving
Commitments terminate, commencing on the first such date to occur after January
1, 2009. All commitment fees in respect of Commitments shall be
payable in Dollars and shall be computed on the basis of the actual number of
days elapsed (including the first day but excluding the last day) in a year of
360 days.”
(m) Commitment
Schedule. The Commitment Schedule annexed to the Credit
Agreement is hereby amended and replaced in its entirety as
follows:
“COMMITMENT
SCHEDULE
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Lender
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Revolving
Commitment
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|
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The
CIT Group/Business Credit, Inc.
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$13,636,364
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|
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Bank
of America, N.A.
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$11,363,636
|
|
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Total
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$25,000,000
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”
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4. Consent to
Purchase.
(a) Notwithstanding
anything to the contrary set forth in the Credit Agreement, subject to the terms
and conditions contained herein, Agent and Lenders consent to the Sale of the
Acquired Assets in connection with the Component Business pursuant to the terms
of the Purchase Agreement as in effect on the date hereof (the “Consent”); provided, that, the foregoing
Consent is expressly conditioned upon Agent and Lenders receipt of the
following: (i) from Purchaser, in the account set forth in Section
5(f) below, at closing, an amount of not less than $6,500,000, in cash or other
immediately available funds by wire transfer for application against (A) the
Supplemental Loan and (B) the Obligations in accordance with the Credit
Agreement (the “Closing Payment”);
(ii) evidence that each of the Letters of Credit set forth on Schedule A hereto in the
aggregate outstanding amount of $2,400,000 have been cancelled and the originals
of each such Letter of Credit returned to the Issuing Bank; (iii) a true correct
and complete copy of the Purchase Agreement and any such other information,
documents or instruments related thereto, including a copy of the xxxx of sale
and other title transfer documents executed by and between Jaco and WPG, duly
authorized executed and delivered by the parties thereto; (iv) a letter
agreement from Purchaser, duly authorized, executed and delivered by Purchaser,
pursuant to which Purchaser, among other things, acknowledges the security
interest of Agent and Lenders in the Accounts related to the Component Business
and agrees to forward any amounts received in respect of the Accounts related to
the Component Business to the account of Agent set forth in Section 7(f) below
(the “Purchaser Letter
Agreement”); and (v) of an original of this Amendment (or an executed
copy hereof by facsimile or by email), duly authorized, executed and delivered
by each of Borrowers.
(b) In
connection with the consummation of the Sale, as consented to hereunder, and the
receipt by Agent of the Closing Payment, Agent’s and Lenders’ security interest
in and lien upon all of the Acquired Assets in connection with the Component
Business shall thereupon be automatically released (the “Release”). In
order to evidence the Release with respect to the Acquired Assets, Agent and
Lenders agree to deliver to Borrowers, or their designee, a UCC Amendment with
respect to the UCC-1 financing statement presently filed of record by Agent and
Lenders with respect to Jaco with the New York Secretary of State, releasing the
Acquired Assets from the Collateral, all at Borrowers’ sole cost and
expense.
(c) Notwithstanding
anything to contrary contained in this Section 4, the Release does not extend
to, and Borrowers acknowledge, confirm and agree that Agent and Lenders shall
retain their continuing security interest in and lien upon, all other Collateral
of Borrowers, including, without limitation, (i) the Component Business Accounts
and (ii) the Excluded Assets (as defined in the Purchase Agreement) which are
expressly excluded from the Sale and are described in the Purchase Agreement as
in effect on the date hereof.
5. Bemar Guaranty and Bemar
Mortgage
(a) Borrowers
shall deliver or cause to be delivered to Agent, in form and substance
satisfactory to Agent, the following: (i) a limited recourse guaranty in respect
of the Obligations, duly executed and delivered by Bemar Realty Company (“Bemar”) in favor of
Agent (the “Bemar
Guaranty”), with recourse limited to the manufacturing facility located
in Suffolk County, New York to secure the Obligations in a principal amount of
$1,000,000, (ii) a second priority Mortgage by Bemar in favor of Agent with
respect to the manufacturing facility located in Suffolk County, New York
securing the Obligations in a principal amount of $1,000,000 (the “Bemar Mortgage”),
subject only to such liens and encumbrances as shall be reasonably acceptable to
Agent, and (iii) such other documents, agreements and instruments (including,
without limitation, corporation organization and authorization documents,) as
Agent may reasonably request with respect to the foregoing. Agent and
Lenders shall record the Bemar Mortgage on April 1, 2009 unless, prior to such
date, each of the Bemar Release Events (as defined in Section 5(b) below) shall
have been satisfied.
(b) Upon
(i) the receipt by Agent of collections from Dominion Voting Systems Corp. in an
aggregate amount equal to ninety (90%) percent of the Closing Dominion Accounts
and no Event of Default then exists and is continuing, (ii) the receipt by Agent
of Component Business Accounts collections in an aggregate amount equal to
ninety (90%) percent of the Closing Component Business Accounts and no Event of
Default then exists and is continuing, and (iii) the repayment in full of the
Supplemental Loan (collectively, the “Bemar Release
Events”), subject to the last sentence of this Section 5(b), (A) the
Bemar Guaranty and the Bemar Mortgage shall be released, terminated, cancelled
and of no further force and effect, and Bemar shall have no further obligations
thereunder, (B) all security interests and liens upon any and all properties and
assets of Bemar heretofore granted by Bemar to Agent, for the benefit of
Lenders, pursuant to the Bemar Morgage shall be released and terminated and (C)
Agent shall deliver to Bemar (or any person that Agent believes in good faith
represents Bemar), at Borrowers’ expense, all releases, terminations or other
documents as may be reasonably necessary in order to effect or evidence more
fully the matters covered by this Section 5. If the Bemar Release
Events are satisfied but as of the date that the last Bemar Release Event is
satisfied, an Event of Default exists and is continuing, the Bemar Guaranty and
the Bemar Mortgage shall remain in full force and effect in accordance with
their terms.
6. Representations, Warranties
and Covenants
. Each of the
Borrowers represents, warrants and covenants with and to Agent and Lenders as
follows, which representations, warranties and covenants are continuing and
shall survive the execution and delivery hereof, the truth and accuracy of, or
compliance with each, together with the representations, warranties and
covenants in the other Loan Documents, being a condition of the effectiveness of
this Amendment and a continuing condition of the making or providing of any
Loans or other financial accommodations by Agent and Lenders to
Borrowers:
(a) This
Amendment has been duly authorized, executed and delivered by all necessary
action of each of the Borrowers and is in full force and effect, and the
agreements and obligations of each of Borrowers contained herein constitute
legal, valid and binding obligations of each of the Borrowers, enforceable
against each of the Borrowers in accordance with their terms.
(b) All
of the representations and warranties set forth in the Credit Agreement, as
amended hereby, and in the other Loan Documents, are true and correct in all
material respects after giving effect to the provisions of this Amendment,
except to the extent any such representation or warranty is made as of a
specified date, in which case such representation or warranty shall have been
true and correct as of such date.
(c) The
Acquired Assets are all exclusively, specifically and directly used in or
related to the Component Business and such assets are not used in, related to or
necessary to the operation of each of the Borrower’s businesses (other than the
Component Business).
(d) The
copy of the Purchase Agreement annexed hereto as Exhibit A is a true,
correct and complete copy of such agreement to be executed by Jaco and
WPG.
(e) The
security interests in and liens of Agent and Lenders upon the Collateral (as
such term is defined in the Credit Agreement), other than the Acquired Assets,
are and shall continue to be in full force and effect, including, but not
limited to, all amounts at any time payable to Jaco pursuant to the Purchase
Agreement (and all related agreements, documents and instruments), and all
rights, benefits and remedies of Jaco pursuant to the Purchase Agreement (and
all related agreements, documents and instruments).
(f) Jaco
shall cause all amounts at any time payable to Jaco pursuant to the Purchase
Agreement or any related agreements, documents and instruments to be paid by
Purchaser directly to Agent, for the benefit of Lenders, to the account set
forth below for application to the Obligations in accordance with the provisions
of the Credit Agreement:
Name
of
Bank: JPMorgan
Chase Bank
ABA
No.: 000000000
Account
Name:
The CIT Group/Business Credit, Inc.
Account
Number: 000-0-00000
Reference: Jaco
– WPG sale
(g) In
addition to the appraisals, financial reports and other information required to
be delivered under the Loan Documents:
(i) on
or before February 3, 2009, Borrowers shall provide Agent with an appraisal of
Borrowers’ FPD (flat-panel display) Inventory prepared by Dovebid or such other
appraiser and using a methodology satisfactory to Agent; and
(ii) on
or before May 15, 2009, Borrowers shall provide Agent with a financial plan and
forecast (including a projected consolidated and consolidating balance sheet,
income statement, funds flow statement and schedule of projected Availability)
of Jaco and its Subsidiaries for each month of the 2009 and 2010 Fiscal Years of
Jaco and its Subsidiaries (the “09/10 Projections”), which 09/10 Projections
shall be satisfactory to Agent in all material respects.
(h) From
the date of this Amendment through the date of the repayment in full of all
outstanding amounts due and owing to Borrowers in connection with the Accounts
related to the Component Business, as soon as available but in any event within
two (2) Business Days of the end of each calendar week and at such other times
as may be reasonably requested by Agent, in each case as of the period then
ended, a (i) a detailed aging of the Accounts related to the Component Business
(1) including all invoices aged by invoice date and (2) reconciled to the
Borrowing Base Certificate delivered as of such date prepared in a manner
reasonably acceptable to Agent, together with a summary specifying the name,
address, and balance due for each Account Debtor.
(i) In
the event that Jaco or any other Borrower or Guarantor receive any amounts at
any time payable to Jaco pursuant to the Purchase Agreement, or any related
agreement, document or instrument, such amounts shall be collected by Jaco or
any other Borrower or Guarantor as the property of Agent and Lenders and held by
it or them in trust for Agent and Lenders and shall on the date received be
remitted to Agent in the form received, with any necessary assignments or
endorsements, for application to the Obligations in accordance with the
provisions of the Credit Agreement. The failure of Jaco or any other
Borrower or Guarantor to remit any amounts received on account of the Purchase
Agreement shall constitute an Event of Default under the Credit
Agreement.
7. Amendment
Fee.
In
addition to any other fees payable under the Credit Agreement, in consideration
of the amendments to the Credit Agreement as set forth herein, Borrowers shall
jointly and severally pay to Agent, for the benefit of Lenders, an amendment fee
in the amount of $100,000, which fee shall be fully earned as of the date hereof
and shall be charged by Agent to any account of Borrowers maintained by Agent on
the date hereof.
8. Conditions
Precedent
. This Amendment
shall not become effective unless all of the following conditions precedent have
been satisfied in full, as determined by Agent:
(a) Agent
shall have received an original of this Amendment (or an executed copy hereof by
facsimile or by email), duly authorized, executed and delivered by each of
Borrowers;
(b) Agent
shall have received a detailed schedule, in form and substance satisfactory to
Agent, of (i) all Component Business Accounts outstanding as of the date hereof
(the “Closing Component Business Accounts”), (ii) all Accounts due and owing
Borrowers from Dominion Voting Systems Corp. outstanding as of the date hereof
(the “Closing Dominion Accounts”) and (iii) all Inventory (A) to be sold in
connection with the Sale and (B) remaining after consummation of
Sale;
(c) Agent
shall have received the Bemar Guaranty and the Bemar Mortgage, duly authorized,
executed and delivered by Bemar, together with such other agreements, documents
and instruments, including opinion letters, as may be requested by
Agent;
(d) After
giving effect to this Amendment, the Borrowers’ Availability shall not be less
than $500,000;
(e) Agent
shall have received the amendment fee payable under Section 7 above;
and
(f) Agent
shall have received all related agreements, documents and instruments as may be
requested by Agent.
9. No Other
Changes
. Except as
specifically modified pursuant hereto, no other changes or modifications to the
Consent are intended or implied and in all other respects, the Consent and other
Loan Documents are hereby ratified, restated and confirmed by all parties hereto
as of the date hereof. To the extent of any conflicts between the
terms of this Amendment and the Consent, the terms of this Amendment shall
control.
10. Successors and
Assigns
. This Amendment
shall be binding upon and inure to the benefit of each of the parties hereto and
its respective successors and assigns.
11. Counterparts
. This Amendment may be
executed in any number of counterparts, but all of such counterparts shall
together constitute but one and the same agreement.
[SIGNATURE
PAGE FOLLOWS]
Very
truly yours,
THE CIT GROUP/BUSINESS CREDIT,
INC., as Agent
By: /s/ Xxxxxx
Xxxxxxxxxxx
Name:
Xxxxxx
Xxxxxxxxxxx
Title: Vice-President
|
|
Read
and Agreed to:
|
|
|
JACO
ELECTRONICS, INC.
|
By: /s/ Xxxx
Xxxx
Name:
Xxxx
Xxxx
Title: Executive
Vice-President
|
|
INTERFACE
ELECTRONICS CORP.
|
By: /s/ Xxxx
Xxxx
Name:
Xxxx
Xxxx
Title:
Executive
Vice-President
Acknowledged
and Agreed to:
|
|
BANK OF AMERICA, N.A.,
as a Lender
|
By: /s/ Xxxxxx
Xxxxxxx
Name: Xxxxxx
Xxxxxxx
Title: Senior
Vice-President
THE CIT GROUP/BUSINESS CREDIT,
INC., as a Lender
By: /s/ Xxxxxx
Xxxxxxxxxxx
Name: Xxxxxx
Xxxxxxxxxxx
Title: Vice-President
Exhibit
A
to
1/09
Amendment
Asset Purchase
Agreement
[see
attached]
Schedule
A
to
1/09
Amendment
Letters of
Credit
|
Issuer/Letter of Credit
Number
|
Beneficiary
|
Undrawn
Principal Amount
|
Expiry Date
|
|
TTS313571
|
Samsung
Semicondutor Inc.
|
$2,250,000
|
4/30/09
|
|
TTS316288
|
Kingbright
Corporation
|
$150,000
|
3/31/09
|
