WAIVER #6 TO THIRD RESTATED AND AMENDED LOAN AND SECURITY AGREEMENT
THIS WAIVER #6 TO THIRD RESTATED AND AMENDED LOAN AND SECURITY
AGREEMENT (this "Agreement") is made as of November 14, 2005 by and between GMAC
COMMERCIAL FINANCE LLC, as successor by merger to GMAC Commercial Credit LLC,
which was the successor in interest to BNY Financial Corporation ("GMAC CF"), as
Agent and Lender, and PNC BANK, NATIONAL ASSOCIATION ("PNC", and together with
GMAC CF, "Lenders"), as Lender and Co-Agent, JACO ELECTRONICS, INC. ("Jaco"),
NEXUS CUSTOM ELECTRONICS, INC. ("Nexus") and INTERFACE ELECTRONICS, INC.
("Interface", and together with Jaco and Nexus, the "Borrowers").
W I T N E S S E T H :
WHEREAS, Borrowers, GMAC CF, PNC and Jaco de Mexico, Inc. entered into
that certain Third Restated and Amended Loan and Security Agreement, dated
December 22, 2003 (the "Third Restated Agreement"), as amended by (i) Amendment
#1 to Third Restated and Amended Loan and Security Agreement, dated September
20, 2004, (ii) Amendment #2 to Third Restated and Amended Loan and Security
Agreement, dated November 23, 2004, (iii) Amendment #3 to Third Restated and
Amended Loan and Security Agreement, dated February 11, 2005, (iv) Waiver and
Amendment #4 to Third Restated and Amended Loan and Security Agreement, dated as
of May 10, 2005, and (v) Waiver and Amendment #5 to Third Restated and Amended
Loan and Security Agreement, dated as of September 28, 2005 (as heretofore
amended and as hereafter restated, supplemented, extended, renewed, amended and
otherwise modified from time to time, the "Loan Agreement"), and into various
instruments, agreements and other documents executed and/or delivered in
connection therewith (all of the foregoing, together with the Loan Agreement, as
the same now exist or may hereafter be amended, restated, renewed, extended,
substituted, modified or supplemented from time to time, collectively, the "Loan
Documents"); and
WHEREAS, Events of Default have occurred under the Loan Agreement as
the result of the failure by Borrowers to maintain, for the four weeks ended
October 28, 2005 and November 4, respectively, the minimum sales of inventory
required by Section 6.9(c) of the Loan Agreement (such Events of Default,
collectively, the "Prior Sales Defaults"); and
WHEREAS, Borrowers have advised Lenders that Borrowers may violate
Section 6.9(c) of the Loan Agreement in respect of the minimum sales
requirements applicable under said Section 6.9(c) to the four weeks ended
November 11, 2005, November 18, 2005, November 25, 2005 and December 2, 2005,
respectively (the Events of Default, if any, as may arise from one or more
violations of Section 6.9(c) for the four weeks ended November 11, November 18,
November 25 and/or December 2, 2005, collectively, "Future Sales Defaults"); and
WHEREAS, Borrowers have requested that Lenders agree to waive the Prior
Sales Defaults and the Future Sales Defaults, if any, and Lenders have agreed to
accommodate
Borrowers' request subject to the terms and conditions set forth
herein, all as more particularly set forth below.
NOW THEREFORE, in consideration of the foregoing, and for good and
other valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:
1. Definitions. Capitalized terms used in this Agreement and not otherwise
defined shall have the meanings ascribed to such terms, respectively, in the
Loan Agreement.
2. Borrowers' Acknowledgement and Reaffirmation.
a. Each Borrower hereby acknowledges, confirms and agrees that as of the date of
such Borrowers' execution hereof, none of the Obligations are subject to offset,
defense or counterclaim of any kind, nature or description whatsoever.
b. Each Borrower hereby ratifies and confirms the Loan Agreement and each of the
other Loan Documents as being legal, valid and binding joint and several
obligations of Borrowers, enforceable against Borrowers in accordance with their
respective terms. Each Borrower hereby ratifies and confirms such Borrower's
grant to Agent, for the ratable benefit of Agent, Lenders and each Issuer, of
the first priority perfected liens upon, and security interests in, the
properties and assets of such Borrower heretofore mortgaged, pledged, granted or
assigned to Agent under the Loan Agreement and the other Loan Documents, and
acknowledges and confirms that such first priority perfected liens and security
interests secure, and shall continue to secure, the Obligations, subject only to
such prior security interests as are expressly permitted under the Loan
Documents.
c. By its signature below, each Borrower ratifies and affirms to the Agent and
the Lenders that as of the date hereof, it is in full compliance with all
covenants under the Loan Documents (except as to the non-compliance that gave
rise to the Prior Sales Defaults or may hereafter give rise to a Future Sales
Default), and certifies (i) that all representations and warranties of Borrowers
in the Loan Documents are true and accurate as of the date hereof, with the same
effect as if they had been made as of the date hereof, (ii) as of the date
hereof, no Default or Event of Default, other than the Prior Sales Defaults, has
occurred and is continuing, or would result from the execution, delivery and
performance by Borrowers of this Agreement; (iii) each Borrower has full power,
right and legal authority to execute, deliver and perform its obligations under
this Agreement; (iv) each Borrower has taken all action necessary to authorize
the execution and delivery of, and the performance of its obligations under,
this Agreement; and (v) this Agreement does not constitute a breach of any other
agreement or understanding to which such Borrower is a party or by which any
property of such Borrower is bound.
3. Acknowledgement of Prior Sales Defaults. Each Borrower hereby expressly
acknowledges the occurrence of the Prior Sales Defaults.
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4. Waiver. Each Lender hereby waives the Prior Sales Defaults and any such
Future Sales Defaults as may hereafter occur, subject to the terms and
conditions set forth herein.
5. Reservation of Rights. Agent and Lenders hereby reserve all rights and
remedies granted to them, respectively, under the Loan Documents, applicable law
or otherwise, and nothing contained herein shall be construed to limit, impair
or otherwise affect the right of Agent or Lenders to declare a default or an
Event of Default with respect to any existing default or Event of Default, other
than the Prior Sales Defaults, or with respect to any future breach or
non-compliance, other than a Future Sales Default, with any covenant, term or
provision of the Loan Documents (including, without limitation, any violation of
Section 6.9(c) of the Loan Agreement with respect to the four weeks ended
December 9, 2005 or any four weeks ended thereafter) or any other document now
or hereafter executed and delivered in connection therewith.
6. Release. In consideration of the waivers and agreements made by Lenders in
this Agreement and the performance thereof and other good and valuable
consideration, each Borrower, for itself and its successors and assigns
(collectively, the "Releasors"), forever releases and discharges Lenders, and
their respective affiliates, members, officers, directors, consultants, agents,
attorneys, representatives and employees, and their respective successors and
assigns (collectively, the "Released Parties") from any and all actions, causes
of action, suits, debts, dues, sums of money, accounts, reckonings, bonds,
bills, specialties, controversies, variances, trespasses, damages, judgments,
extent, executions, claims and demands whatsoever, in law, admiralty or equity,
without defense, offset or counterclaim, which any Releasor, directly or
indirectly, ever had or now or can, shall or may, have against any of the
Released Parties for, upon, or by reason of any matter, cause or thing arising
under or relating to the Loan Agreement and any other Loan Document and the
transactions contemplated therein. In addition to the foregoing, each Releasor
agrees to forever refrain and forbear from commencing, assisting, instituting,
prosecuting or encouraging others to institute or prosecute any litigation,
action, arbitration, administrative or other proceeding of any kind against any
of the Released Parties directly or indirectly arising out of, resulting from or
relating in any way to the subject matter of, or the fact and course of conduct
underlying, the releases granted herein.
7. No Modifications. No changes or modifications to the Loan Agreement or the
other Loan Documents are intended or implied by the terms hereof and the Loan
Agreement and the other Loan Documents shall continue to remain in full force
and effect in accordance with their respective terms as of the date hereof.
8. No Third Party Beneficiaries. The terms and provisions of this Agreement
shall be for the benefit of the parties hereto and their respective successors
and assigns; no other person, firm, entity or corporation shall have any right,
benefit or interest under this Agreement.
9. Condition to Effectiveness. The effectiveness of the terms and provisions of
this Agreement shall be subject to the receipt by Agent of an original of this
Agreement, duly authorized, executed and delivered by Borrowers.
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10. Counterparts. This Agreement may be signed in counterparts, each of which
shall be an original and all of which, when taken together, shall constitute one
agreement. In making proof of this Agreement, it shall not be necessary to
produce or account for more than one counterpart signed by the party to be
charged. Delivery of an executed counterpart of this Agreement by telefacsimile
shall have the same force and effect as the delivery of an original executed
counterpart of this Agreement.
11. Merger. This Agreement sets forth the entire agreement and understanding of
the parties with respect to the matters set forth herein. This Agreement cannot
be changed, modified, amended or terminated except in a writing executed by the
party to be charged.
12. Amendment Fee. In consideration of Lenders' consent to the foregoing,
Borrowers agree to pay to Agent for the ratable benefit of Lenders, concurrently
with Borrowers' execution hereof, a fee in the amount of $5,000. Borrowers
hereby authorize Lenders to automatically charge to Borrowers' account the
amount of such fee.
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the date first written above.
GMAC COMMERCIAL FINANCE LLC,
as Agent and Lender
By: /s Xxxxxx X. Xxxxxx
------------------------------------
Title: 1st VP
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PNC BANK,
NATIONAL ASSOCIATION,
as Co-Agent and Lender
By: /s/ Xxxx X. Xxxxx
-------------------------------------
Title: Vice President
-----------------------------------
JACO ELECTRONICS, INC., as Borrower
By: /s/ Xxxxxxx X. Xxxx
--------------------------------------
Title: CFO
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[SIGNATURES CONTINUED ON FOLLOWING PAGE]
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[SIGNATURES CONTINUED FROM PREVIOUS PAGE]
NEXUS CUSTOM ELECTRONICS, INC.,
as Borrower
By: /s/ Xxxxxxx X. Xxxx
-------------------------------------
Title: CFO
-----------------------------------
INTERFACE ELECTRONICS, INC.,
as Borrower
By: /s/ Xxxxxxx X. Xxxx
-------------------------------------
Title: CFO
-----------------------------------
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