EXHIBIT 10.1
ASSUMPTION AGREEMENT AND SEVENTH AMENDMENT TO
CREDIT AGREEMENT AND OTHER LOAN DOCUMENTS
-----------------------------------------
This ASSUMPTION AGREEMENT AND SEVENTH AMENDMENT TO CREDIT
AGREEMENT AND OTHER LOAN DOCUMENTS (this "Amendment") is entered
into as of this
25th day of April, 2007, by and among All American Semiconductor,
Inc., a
Delaware corporation, as pre-petition debtor and as a debtor
and
debtor-in-possession ("Borrower"), the other "Designated Companies"
signatory
hereto, each as a pre-petition debtor and as a debtor and
debtor-in-possession,
the financial institutions signatory hereto as lenders
(collectively, the
"Lenders"), Harris N.A., successor by merger to Harris Trust and
Savings Bank,
individually as a Lender, as L/C Issuer and as administrative agent
for the
Lenders (in such capacity, the "Administrative Agent"), and U.S.
Bank National
Association, individually as a Lender and as co-administrative
agent for the
Lenders (in such capacity, the "Co-Administrative Agent").
Capitalized terms
used but not otherwise defined in this Amendment shall have the
respective
meanings ascribed to them in the Pre-Petition Credit Agreement (as
defined
below), as amended hereby (the Pre-Petition Credit Agreement, as so
amended, the
"Credit Agreement").
RECITALS
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WHEREAS, Borrower, Administrative Agent, Co-Administrative
Agent and the Lenders have entered into that certain Credit
Agreement, dated as
of May 14, 2003 (as amended, restated, supplemented or otherwise
modified in
writing from time to time prior to the Petition Date, the
"Pre-Petition Credit
Agreement," and together with the other "Loan Documents" (as
defined in the
Pre-Petition Credit Agreement and as in effect immediately prior to
the Petition
Date, the "Pre-Petition Credit Documents");
WHEREAS, on April 25, 2007 (the "Petition Date"), Borrower and
each other Designated Company (each a "Debtor," and collectively,
the
"Debtors"(1)) filed voluntary petitions for relief under chapter 11
of title 11
of the United States Code (the "Bankruptcy Code"), in the United
States
Bankruptcy Court of the Southern District of Florida (Miami
Division) (the
"Bankruptcy Court"), Case No. 07-12963-LMI (Jointly Administered)
(each, a
"Bankruptcy Case," and collectively, the "Bankruptcy Cases");
WHEREAS, numerous Events of Default, including, without
limitation, the Events of Default arising from the commencement of
the
Bankruptcy Cases, have occurred and are continuing under the
Pre-Petition Credit
Agreement as of the date hereof;
---------------------------------
(1) The
following are wholly-owned subsidiaries of the Borrower,
organized
under the laws of jurisdictions outside the United States and who
are
not Designated Companies, also filed voluntary petitions for
relief
under chapter 11 of the Bankruptcy Code in the Bankruptcy
Court:
AllAmMex Components, S. de R.L. de C.V.; AGD Electronics Asia
Pacific
Co., Ltd.; and AGD Electronics Limited (the "Foreign Debtors").
The
Foreign
Debtors are not parties to the Pre-Petition Credit Documents or
this Amendment.
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WHEREAS, in order to continue their operations as
debtors-in-possession under the Bankruptcy Code pending the sale of
all or a
substantial portion of their assets and properties pursuant to
section 363 and
other applicable provisions of the Bankruptcy Code, the Debtors
have requested
that Administrative Agent and the Lenders continue making secured
revolving
loans to Borrower pursuant to the Credit Agreement (the "DIP
Financing"); and
WHEREAS, Administrative Agent and the Lenders are willing to
continue to provide further secured financing to Borrower only if,
among other
things, the Pre-Petition Credit Documents are amended as
hereinafter set forth,
and the Bankruptcy Court enters an Interim Financing Order and a
Final Financing
Order, each in form and substance satisfactory to Administrative
Agent and the
Required Lenders.
NOW THEREFORE, in consideration of the premises, and for other
good and valuable consideration, the receipt and adequacy of which
are hereby
acknowledged, the parties hereto agree as follows:
I.
Amendments to Pre-Petition Credit Documents. Effective as of
the
Assumption Agreement Effectiveness Date (as defined in Section V
hereof), the
parties hereto hereby amend the Pre-Petition Credit Documents as
follows:
A. From
and after the Assumption Agreement Effectiveness Date,
all references in the Credit Agreement and the other Loan Documents
to (i) "All
American Semiconductor, Inc.," "AASI," "AAS," "Borrower" or any
other reference
to such entity in any capacity shall be deemed to be references to
All American
Semiconductor, Inc., both before the Petition Date, as a
pre-petition debtor,
and on and after the Petition Date, as a debtor-in-possession in
its Bankruptcy
Case; (ii) each Designated Company by any name and in any capacity
shall be
deemed to be references to such Designated Company, both before the
Petition
Date, as a pre-petition debtor, and on and after the Petition Date,
as a
debtor-in-possession in its Bankruptcy Case; and (iii) the
Pre-Petition Credit
Agreement and the other Pre-Petition Credit Documents shall mean
and include the
Pre-Petition Credit Agreement and the other Pre-Petition Credit
Documents, in
each case, as amended by this Amendment.
B. When
used in the Credit Agreement and the other Loan
Documents, the terms "Bankruptcy Code," "Bankruptcy Court,"
"Debtors," "DIP
Financing," "Pre-Petition Credit Documents," "Petition Date,"
"Pre-Petition
Credit Agreement," and "Bankruptcy Cases" shall have the respective
meanings set
forth in the Recitals of this Amendment.
C. When
used in the Credit Agreement and the other Loan
Documents, the terms "Approved Budget," "Initial Approved Budget,"
"Supplemental
Approved Budget," "Pre-Petition Collateral," "DIP Collateral,"
"Pre-Petition
Indebtedness," "DIP Indebtedness," "DIP Credit Documents,"
"Permitted Budget
Variances," "Collateral Value Reduction Amount," "Approved
Administration
Expenses," "Final Hearing," "Loan Payment Date," "Tested Line
Item," "Carve-Out
Event," "Prior Claims" and "Carve-Out" shall have the respective
meanings set
forth in the Financing Order.
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D.
Section 1.1 of the Pre-Petition Credit Agreement is hereby
amended by adding the following new paragraph to the conclusion
thereof:
"Subject to the terms and conditions hereof, each DIP Lender,
by its acceptance hereof, severally agrees to make DIP Revolving
Loans
to Borrower from time to time on or after the Assumption
Agreement
Effectiveness Date and prior to the Termination Date, up to the
amount
of such DIP Lender's DIP Revolving Credit Commitment, subject to
any
reductions thereof pursuant to the terms hereof. The sum of the
aggregate principal amount of all Revolving Loans (including
DIP
Revolving Loans) and L/C Obligations at any time outstanding on
or
after the Petition Date shall not exceed the sum of: (a) the
Borrowing
Base as calculated as at the close of business on the
immediately
preceding Business Day (as reduced by any reserves taken pursuant
to
this Section 1.1) plus (b) the DIP Overadvance Amount as then in
effect
plus (c) in the Administrative Agent's sole discretion, any
Permitted
Overadvances then in effect; provided, however, that (i) the amount
of
Eligible Receivables included in any Borrowing Base shall take
into
account the Receivable-related information from the then most
recently
delivered report provided by Borrower to Administrative Agent
pursuant
to Section 8.5(b) hereof, and (ii) the Eligible Inventory component
as
at each Business Day, subject to true-up on or prior to the
fifth
Business Day of each week using actual Eligible Inventory reflected
on
the then most recently delivered weekly Borrowing Base
Certificate
pursuant to Section 8.5(a) hereof, shall be equal to (A) the
aggregate
amount of Eligible Inventory for the immediately preceding Business
Day
minus (B) the aggregate amount of sales of Eligible Inventory made
by
Borrower on the such immediately preceding Business Day (less
the
aggregate amount of gross margin associated therewith) plus (C)
the
aggregate amount of Eligible Inventory purchased during such
immediately preceding Business Day. Each Borrowing of DIP
Revolving
Loans shall be made ratably from the DIP Lenders in proportion to
their
respective Revolver Percentages for DIP Revolving Loans. Except
as
otherwise expressly provided herein or in the Financing Order,
DIP
Revolving Loans may be repaid and the principal amount thereof
reborrowed before the Termination Date. Notwithstanding any
other
provision of this Agreement to the contrary, the Administrative
Agent
shall have the right from time to time from and after the
Assumption
Agreement Effectiveness Date, upon two (2) Business Days' prior
written
notice, to establish reserves against the Borrowing Base in
such
amounts and with respect to such matters (including without
limitation
reserves with respect to Funds Transfer and Deposit Account
Liability,
Hedging Liability, cash management exposure, uninsured casualty to
or
other loss of any material portion of the Inventory occurring after
the
Assumption Agreement Effectiveness Date and the unused portion of
the
Carve-Out, if any, from and after the occurrence of a Carve-Out
Event
as
permitted in the Financing Order) as the Administrative Agent
shall
deem necessary or appropriate in its reasonable business judgment
to
preserve and/or protect the Collateral. Any and all reserves in
effect
immediately prior to the Assumption Agreement Effectiveness Date
shall
remain in effect, in amounts determined by the Administrative Agent
in
its reasonable discretion, from and after the Petition Date. The
amount
of all such reserves established from time to time pursuant to
this
Section 1.1 shall be subtracted from the Borrowing Base when
calculating the amount of availability with respect to DIP
Revolving
Loans hereunder.
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E.
Section 1.2 of the Pre-Petition Credit Agreement is hereby
amended by deleting the first sentence thereof in its entirety and
replacing it
with the following:
"The Revolving Loans made to the Borrower by a Lender prior to
the Petition Date shall be evidenced by a single promissory note of
the
Borrower issued to such Lender in the form of Exhibit B hereto. The
DIP
Revolving Loans made to the Borrower by a DIP Lender from and after
the
Petition Date shall be evidenced by a single promissory note of
the
Borrower issued to such DIP Lender in the form of Exhibit A
attached to
the Assumption Agreement."
F.
Section 1.3(a) of the Pre-Petition Credit Agreement is hereby
amended by adding the following sentence at the end of such
Section:
"Borrower and each other Designated Company acknowledges and
agrees that no Letter of Credit remained undrawn and outstanding as
of
the Petition Date. Notwithstanding any provision to the contrary
set
forth in this Agreement or any other Loan Document, Borrower shall
not
have the right to request, and none of Administrative Agent, L/C
Issuer
or any Lender shall have any obligation to issue or guaranty,
any
Letter of Credit, in each case from and after the Petition
Date."
G.
Section 1.6(a) of the Pre-Petition Credit Agreement is hereby
amended by adding the following sentence at the end of such
Section:
"Notwithstanding any provision to the contrary set forth in
this Section 1.6(a) or any other provision of the Loan Documents,
from
and after the Petition Date, (i) all Revolving Loans made on or
after
the Petition Date shall be made as Base Rate Loans, and not
Eurodollar
Loans, (ii) no Base Rate Loan may be converted to, or continued as,
a
Eurodollar Loan, and (iii) all Loans outstanding from and after
the
Petition Date are and shall be Base Rate Loans."
H.
Section 1.6(d) of the Pre-Petition Credit Agreement shall be
inapplicable from and after the Petition Date as if deleted in its
entirety from
the Credit Agreement as of such date.
I.
Section 1.9(b) of the Pre-Petition Credit Agreement is hereby
amended by amending and restating such Section in its entirety as
follows:
"(b) Mandatory. Subject to the terms of the Financing Order:
---------
(i) All proceeds of Collateral, including, without limitation,
payments in respect of Receivables, shall be applied to the
Obligations
in the manner described in Section 3.1 hereof.
(ii) Immediately upon receipt of any Net Cash Proceeds from
any Disposition of Collateral (other than the sale of Inventory in
the
ordinary course of business) or Event of Loss of Borrower or any
other
Designated Company, Borrower shall remit to the Administrative
Agent
for application to the Obligations in accordance with Section
3.1
hereof 100% of such Net Cash Proceeds, and any such Loan
repayment
shall not be subject to reborrowing (and to the extent applied
to
outstanding DIP Revolving Loans, shall result in a
corresponding
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permanent reduction of the DIP Lenders' respective DIP Revolving
Credit
Commitments according to their applicable Revolver Percentages for
DIP
Revolving Loans. Upon any Disposition of all or substantially all
of
the assets of the Designated Companies, the Revolving Credit
Commitments shall be automatically and permanently reduced to
zero;
provided, however, that the Administrative Agent shall set aside
a
portion of the Net Cash Proceeds of such Disposition and shall
make
available such Net Cash Proceeds to the Borrower from time to time
for
payment of any amounts constituting part of the Carve-Out and
any
amounts constituting Approved Administration Expenses, in each
case
subject to the terms of the Financing Order.
(iii) [Intentionally omitted].
(iv) The Borrower shall, on each date the DIP Revolving Credit
Commitments are reduced pursuant to Section 1.12 hereof, prepay the
DIP
Revolving Loans by the amount, if any, necessary to reduce the sum
of
the aggregate principal amount of DIP Revolving Loans then
outstanding
to the amount to which the DIP Revolving Credit Commitments have
been
so reduced.
(v) If at any time on or after the Petition Date the sum of
the unpaid principal balance of the Revolving Loans (including
DIP
Revolving Loans) and L/C Obligations then outstanding shall be
in
excess of the sum of the Borrowing Base as then determined and
computed
in accordance with Section 1.1 hereof (and as reduced by any
reserves
taken pursuant to Section 1.1 hereof) plus the DIP Overadvance
Amount
then in effect plus, in the Administrative Agent's sole discretion,
any
Permitted Overadvances then in effect, the Borrower shall
immediately
and without notice or demand pay over the full amount of such
excess
(together with any accrued interest and fees with respect thereto)
to
the Administrative Agent for the ratable account of the DIP Lenders
as
and for a mandatory prepayment of the Obligations, with each
such
prepayment to be applied in the manner required pursuant to Section
3.1
hereof.
(vi) [Intentionally omitted].
J.
Section 2.1 of the Pre-Petition Credit Agreement is hereby
amended by adding as new subsections (e) and (f) thereof the
following:
"(e) DIP Commitment Fee. Borrower agrees to pay to the
Administrative Agent, for the benefit of the Administrative Agent
and
the DIP Lenders in accordance with their respective Revolver
Percentages for DIP Revolving Loans, a fee in an aggregate amount
equal
to $250,000 (the "DIP Commitment Fee"), which fee shall be fully
earned
on, and paid in immediately available funds on, the Assumption
Agreement Effectiveness Date.
(f) DIP Administration Fee. The Borrower agrees to pay to the
Administrative Agent for its own account an administration fee
of
$50,000 (the "DIP Agency Fee"), which administration fee shall be
fully
earned on, and paid in immediately available funds on, the
Assumption
Agreement Effectiveness Date."
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K.
Section 3.1 of the Pre-Petition Credit Agreement is hereby
amended by amending and restating subsections (b) and (c) thereof
in their
entirety as follows:
"(b) Application of Collateral Proceeds. Notwithstanding any
provision to the contrary in this Agreement or any other Loan
Documents, except to the extent otherwise provided in the
Financing
Order, all Collateral proceeds or other payments received for
application to any Obligations (whether received in the normal
course,
from mandatory prepayments, from the exercise of default-related
rights
and remedies or otherwise) shall (subject to set asides or
other
provision for payment of the Carve-Out and Approved
Administration
Expenses to the extent permitted under the Financing Order) be
distributed as follows (as among the Administrative Agent and
the
Lenders, regardless of the allowability of any portion of such
Obligations) unless otherwise determined by Administrative Agent
and
Required Lenders in their sole discretion: first, to the
Administrative
Agent for payment of any pre-petition and post-petition fees
(including, without limitation, the DIP Agency Fee), expenses,
costs
(including, without limitation, the pre-petition and post-petition
fees
and expenses of Latham & Watkins LLP and Giuliani Capital
Advisors),
indemnities and other amounts as to which Administrative Agent
is
entitled to be reimbursed or indemnified by any or all of the
Borrower,
any other Designated Company and/or the Lenders pursuant to the
Loan
Documents or the Financing Order; second, to the DIP Lenders
for
payment of the DIP Commitment Fee pro rata based on their
respective
Revolver Percentages for DIP Revolving Loans; third, to the
Administrative Agent for payment or reimbursement of all
Obligations in
respect of all pre-Petition Date Letters of Credit then due and
payable;
fourth, to the Pre-Petition Lenders for payment of interest in
respect of the Pre-Petition Indebtedness pro rata based on
their
respective Revolver Percentages under the Pre-Petition Revolving
Credit
Commitments; fifth, to the Pre-Petition Lenders or
Administrative
Agent, as the case may be, for payment of the outstanding
principal
balance of the Pre-Petition Indebtedness and cash collateralization
of
any Obligations in respect of any pre-Petition Date Letters of
Credit
that are not then due and payable, in the case of principal
payments,
pro rata based on the respective Revolver Percentages of the
Pre-Petition Lenders under the Pre-Petition Revolving Credit
Commitments; sixth, to
the Pre-Petition Lenders for payment of all
fees, expenses, costs, indemnities, and all other Pre-Petition
Indebtedness not addressed above, pro rata based on their
respective
Revolver Percentages under the Pre-Petition Revolving Credit
Commitments; seventh, to the DIP Lenders for payment of interest
in
respect of the DIP Indebtedness pro rata based on their
respective
Revolver Percentages for DIP Revolving Loans; eighth, to the
DIP
Lenders for payment of the outstanding principal balance of the
DIP
Indebtedness pro rata based on the DIP Lenders' respective
Revolver
Percentages for DIP Revolving Loans; ninth, to the DIP Lenders
for
payment of all fees, expenses, costs, indemnities and all other
DIP
Indebtedness not addressed above, pro rata based on their
respective
Revolver Percentages for DIP Revolving Loans; and tenth, to the
Borrower or as otherwise required by law. Notwithstanding the
foregoing, to the extent the Bankruptcy Court fails to allow or
otherwise permit payment of all or any portion of the DIP Agency
Fee
and the DIP Commitment Fee (collectively, the "Disallowed Fees"),
then
(x)
the first proceeds distributable on account of the Pre-Petition
Indebtedness equal to the aggregate amount of the Disallowed Fees
shall
be remitted to the Administrative Agent and/or the DIP Lenders,
as
applicable, on account of their respective Pre-Petition
Indebtedness
(in the case of Administrative Agent, the Pre-Petition
Indebtedness
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owing to Harris as Pre-Petition Lender) pro rata up to the
respective
amounts of the Disallowed Fees to which they would otherwise have
been
entitled had the Bankruptcy Court permitted and allowed such
Disallowed
Fees in their entirety and (y) the balance of the proceeds
distributable on account of the Pre-Petition Indebtedness shall
be
distributed pro rata to the Pre-Petition Lenders based on their
respective Revolver Percentages under the Pre-Petition Revolving
Credit
Commitments determined as if the payments referenced in the
immediately
preceding clause (x) had not been made.
(c)
[Intentionally omitted]."
L.
Section 4.1 of the Pre-Petition Credit Agreement is hereby
amended by amending and restating such Section in its entirety as
follows:
"Section 4.1
Collateral.
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Subject to the terms of the Financing Order (and except to the
extent otherwise provided in the Financing Order), the
Obligations
shall be secured by valid, perfected and enforceable Liens on
all
right, title and interest of the Borrower and each other
Designated
Company in all real and personal property and fixtures of such
Person,
including all accounts, chattel paper, instruments, documents,
cash,
cash equivalents, general intangibles (including payment
intangibles
and software, all patents, trademarks, copyrights and similar
intellectual property rights, and all application and
registrations
therefor, and all tax refunds), letter-of-credit rights,
supporting
obligations, deposit accounts, investment property, inventory,
equipment, fixtures, and commercial tort claims, whether now owned
or
hereafter acquired or arising, and all proceeds thereof. The
Borrower
acknowledges and agrees that the Administrative Agent's Liens on
the
Collateral are for the benefit of Administrative Agent, L/C Issuer,
the
Lenders and their respective Affiliates, and are valid and
perfected
first priority Liens subject only to Liens permitted by Section
8.8
hereof, in each case pursuant to one or more Collateral Documents
from
such Persons, each in form and substance satisfactory to the
Administrative Agent. Borrower hereby confirms that the
security
interests granted hereunder and under the other Loan Documents
extend
to all Collateral, whether arising or acquired prior to, on or
after
the Petition Date and secure all Obligations, whether arising prior
to,
on or after the Petition Date, including, without limitation, the
DIP
Indebtedness.
Furthermore, subject to the terms of the Financing Order, to
further secure the payment and performance of the Obligations
(whether
arising prior to, on or after the Petition Date), including all
renewals, extensions, restructurings and refinancings of any or all
of
the Obligations, Borrower and each other Designated Company
hereby
grants to Administrative Agent, for the benefit of
Administrative
Agent, L/C Issuer and the Lenders, a continuing security interest,
Lien
and mortgage in and to all of the respective right, title and
interest
of such Designated Company, as pre-petition debtor and
debtor-in-possession, in all of the real and personal property of
such
Designated Company (as pre-petition debtor and
debtor-in-possession),
whether arising or acquired prior to, on or after the Petition Date
and
regardless of where located, including, without limitation: (i)
the
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Collateral referenced in this Section 4.1 and in Section 1 of
the
Security Agreement to which such Designated Company is a party;
(ii)
all causes of action and claims of such Designated Company's
estate
against third parties, including, without limitation, claims of
such
Designated Company as debtor-in-possession under the Bankruptcy
Code
and all proceeds of avoidance claims of such Designated Company
under
sections 544, 545, 547, 548, 551 or 553 of the Bankruptcy Code
(such
avoidance claims of all Designated Companies, collectively,
"Avoidance
Actions"); (iii) all other assets of such Designated Company,
whether
real, personal, tangible or intangible or mixed, now existing
or
hereafter
acquired, created, built or otherwise coming into being
together with all improvements thereon (including, without
limitation,
all of each such Designated Company's leasehold interests, rights
of
tenancy or other rights to occupy the premises occupied or
controlled
by such Designated Company); and (iv) all additions and accessions
to,
substitutions for, and replacements, rents, profits, products
and
proceeds of any of the foregoing, including, without limitation,
the
proceeds of any insurance policies covering any of the
above-described
property. Subject to the terms of the Financing Order
(including,
without limitation, the set asides or other provision for payment
of
amounts constituting part of the Carve-Out and Approved
Administration
Expenses), that portion of the Obligations equal to the sum of the
DIP
Indebtedness plus the Collateral Value Reduction Amount shall have
the
highest administrative priority under section 364(c)(1) of the
Bankruptcy Code, and shall have priority over all other costs
and
expenses of administration of any kind, including those specified
in,
or ordered pursuant to, sections 105, 326, 328, 330, 331,
503(b),
506(c), 507(a), 507(b), 546(c), 726, 1114 or any other provision of
the
Bankruptcy Code or otherwise (whether incurred in any Bankruptcy
Case,
any conversion of any Bankruptcy Case pursuant to section 1112 of
the
Bankruptcy Code, or in any other proceedings related thereto),
and
shall at all times be senior to the rights of the Borrower, each
other
Designated Company and each other Foreign Debtor, any successor
trustee
or estate representative in their respective Bankruptcy Cases or
any
subsequent case or proceeding under the Bankruptcy Code, and shall
have
the highest administrative priority under section 364(c)(1) of
the
Bankruptcy Code."
M.
Section 4.2 of the Pre-Petition Credit Agreement is hereby
amended by adding the following new sentence to the conclusion
thereof:
"Notwithstanding anything in this Agreement or any other Loan
Document to the contrary, Administrative Agent shall have the right
to
transfer, on a daily basis, all collected and available balances in
the
Designated Companies' deposit accounts (other than (i) accounts
containing solely employee-related trust funds and (ii) "petty
cash"
accounts of Designated Companies other than the Borrower; provided
that
the aggregate balances in all such petty cash accounts shall at no
time
exceed $25,000), including, without limitation, the
Concentration
Accounts, to an account in the name of Administrative Agent for
application to the Obligations in accordance with Section
1.9(b)(ii)
hereof or Section 3.1 hereof, as applicable."
N.
Section 5.1 of the Pre-Petition Credit Agreement is hereby
amended by adding, or amending and restating, as applicable, the
following
defined terms as follows:
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"AASI Canada" means All American Semiconductor of Canada, Inc.
"Agreement" means that certain Credit Agreement, dated as of May
14,
2003, by and among Borrower, Administrative Agent,
Co-Administrative
Agent and the Lenders, as amended, restated, supplemented or
otherwise
modified
from time to time prior to the Petition Date, and as further
amended by the Assumption Agreement, and as the foregoing may
thereafter be further amended, restated, supplemented or
otherwise
modified from time to time, including, without limitation, pursuant
to
the Interim Financing Order, the Final Financing Order or any
other
order of the Bankruptcy Court to which the Administrative Agent
and
Required Lenders have consented in writing in their sole
discretion.
"Assumption Agreement" means that certain Assumption Agreement
and Seventh Amendment to Credit Agreement and Other Loan
Documents,
dated as of April 25, 2007, by and among the Borrower, the
other
Designated Companies, Administrative Agent, Co-Administrative Agent
and
Lenders.
"Assumption Agreement Effectiveness Date" shall have the
meaning ascribed to such term in Section 5 of the Assumption
Agreement.
"Collateral" means any and all properties, rights, interests
and privileges from time to time subject to the Liens granted to
the
Administrative Agent, for the ratable benefit of Administrative
Agent,
the L/C Issuer and the Lenders, or any security trustee
therefor,
pursuant to the Collateral Documents, the Interim Financing Order
or
the Final Financing Order, in each case, whether such property,
right,
interest or privilege is acquired by the Borrower or any other
Designated Company, as the case may be, on or after the Petition
Date.
The term "Collateral" shall include all Pre-Petition Collateral and
all
DIP Collateral, as those terms are defined in the Financing
Order.
"Credit Event" means the advancing of any Revolving Loan
(including, without limitation, any DIP Revolving Loan), the
continuation of or conversion into a Eurodollar Loan, or the
issuance
of, or extension of the expiration date or increase in the amount
of,
any Letter of Credit, in each case whether made or done prior to,
on or
after the Petition Date.
"DIP Lenders" shall mean those Lenders with DIP Revolving
Credit
Commitments.
"DIP Overadvance Amount" means, at any time during each week
reflected in the Approved Budget, the amount listed in the "DIP
Overadvance Amount" line item of the Approved Budget for such week,
as
the same may be increased solely to the extent expressly
provided
herein and in the Financing Order.
"DIP Revolving Credit Commitments" shall mean the obligations
of the DIP Lenders to make DIP Revolving Loans to or for the
account of
Borrower hereunder from and after the Petition Date in accordance
with
their respective Revolver Percentages for DIP Revolving Loans in
an
aggregate principal amount at any one time outstanding not to
exceed
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the amount set forth opposite each DIP Lender's name on Schedule
1
attached to the Assumption Agreement.
"DIP Revolving Loans" shall mean all Revolving Loans made or
incurred on or after the Petition Date by any or all of the
Administrative Agent and the DIP Lenders to, or for the account of,
the
Borrower.
"Existing Pre-Petition Defaults" shall mean all Events of
Default existing as of the Petition Date, including, without
limitation, all "Specified Defaults" under, and as defined in,
the
Forbearance Agreements.
"Final Financing Order" shall mean an order of the Bankruptcy
Court
entered in the Bankruptcy Cases after the Final Hearing (as
defined in the Interim Financing Order) pursuant to sections 363
and
364 of the Bankruptcy Code, inter alia, authorizing the
Designated
Companies, as debtors-in-possession, to use cash collateral and
authorizing Borrower to incur secured indebtedness pursuant to
this
Agreement and the other Loan Documents, which order shall be in
form
and substance satisfactory to Administrative Agent and Required
Lenders
in their sole discretion.
"Financing Order" shall mean the Interim Financing Order until
such time as the Final Financing Order shall have become
effective,
upon which event, "Financing Order" shall mean the Final
Financing
Order.
"Forbearance Agreements" mean, collectively, (i) that certain
Forbearance Agreement, dated as of March 29, 2007, by and among
Borrower, the other Designated Companies, Administrative Agent,
Co-Administrative Agent and the Lenders, and (ii) that certain
Second
Forbearance Agreement, dated as of April 15, 2007, by and among
Borrower, the other Designated Companies, Administrative Agent,
Co-Administrative Agent and the Lenders, in each case, as may
be
amended, restated or otherwise modified from time to time.
"Foreign Debtor" means AllAmMex Components, S. de R.L. de
C.V.; AGD Electronics Asia Pacific Co., Ltd.; and AGD
Electronics
Limited, or any of them.
"Foreign Subsidiary" means a Subsidiary of Borrower or any
other Designated Company organized under the laws of any country
(or
any political subdivision thereof) other than the United States
of
America.
"Interim Financing Order" shall mean the order of the
Bankruptcy Court entered in the Bankruptcy Cases on April __,
2007,
pursuant to sections 363 and 364 of the Bankruptcy Code, inter
alia,
authorizing the Designated Companies, as debtors-in-possession, to
use
cash collateral and authorizing the Borrower to incur secured
indebtedness pursuant to this Agreement and the other Loan
Documents,
and to enter into and/or assume the Assumption Agreement and the
other
DIP Credit Documents, which order shall be in form and
substance
satisfactory to Administrative Agent and Required Lenders in their
sole
discretion.
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"Lenders" means and includes Harris N.A. and the other
financial institutions from time to time party to this
Agreement,
including each assignee Lender pursuant to Section 12.12 hereof,
in
their capacity as Pre-Petition Lenders in respect of the
Pre-Petition
Credit Documents, the Pre-Petition Collateral and the
Pre-Petition
Indebtedness, and in their capacity as DIP Lenders in respect of
the
DIP Credit Documents, the DIP Indebtedness and the DIP
Collateral.
"Loan Documents" means this Agreement, the Assumption
Agreement, the Interim Financing Order, the Final Financing Order,
the
Revolving Notes, the Applications, the Collateral Documents,
the
Guaranties, each other instrument or document executed and/or
delivered
hereunder or thereunder or otherwise in connection therewith, as
each
may be amended, supplemented or otherwise modified from time to
time
(including, without limitation, by any of the DIP Credit Documents
(as
defined in the Financing Order) or any order of the Bankruptcy
Court to
which Administrative Agent and Required Lenders have consented in
their
sole discretion). Without limiting the foregoing, the term
"Loan
Documents" shall include all DIP Credit Documents.
"Loans" means any Revolving Loan (including, without
limitation, any DIP Revolving Loan), whether outstanding as a Base
Rate
Loan or Eurodollar Loan, each of which is a "type" of Loan
hereunder,
and whether made before, on or after the Petition Date.
"Net Cash Proceeds" means, as applicable, (a) with respect to
any Disposition by a Person, the aggregate amount of cash and
cash
equivalent proceeds received by such Person or for such
Person's
account (including, without limitation, any payments received
for
non-competition covenants, consulting or management fees in
connection
with such sale, and any portion of the amount received evidenced by
a
promissory note or other evidence of indebtedness issued by the
purchaser), minus the sum of (i) the reasonable direct costs
relating
to such Disposition, including, without limitation, customary
sales
fees, commissions and other expenses and any allowed success fee
owing
to Raymond James & Associates, Inc. under the terms of that
certain
engagement letter with the Borrower, dated April 24, 2007 (as in
effect
on the Assumption Agreement Effectiveness Date or as otherwise
amended
with the prior written consent of Administrative Agent), (ii)
income,
capital gains, sale, use or other transactional taxes paid or
payable
by such Person at the time of such Disposition as a direct result
of
such Disposition, (iii) the amounts required to be applied to
repay
principal, interest and other fees and charges on indebtedness or
other
obligations constituting a Prior Claim and secured by a Lien on
the
asset which is the subject of such Disposition that is senior
in
priority to the Administrative Agent's Liens on such asset, and
(iv)
until actually received by, or payable to, such Person, any portion
of
the amount received held in escrow or evidenced by a promissory
note or
other evidence of indebtedness issued by a purchaser or
non-compete,
consulting or management agreement or covenant or otherwise for
which
compensation is paid over time; and (b) with respect to any Event
of
Loss of a Person, cash and cash equivalent proceeds received by
such
Person or
for such Person's account (whether as a result of payments
made under any applicable insurance policy therefor or in
connection
with condemnation proceedings or otherwise), minus the sum of (i)
the
reasonable direct costs incurred in connection with the collection
of
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such proceeds, awards or other payments, (ii) income or capital
gains
taxes paid or payable by such Person at the time of receipt of
such
insurance proceeds as a direct result of such Event of Loss, and
(iii)
any amounts retained by or paid to parties having rights to
such
proceeds, awards or other payments that are superior to the rights
of
the Administrative Agent and Lenders to such proceeds, awards or
other
payments.
"Obligations" means all obligations of the Borrower to pay
principal and interest on the Loans, all Reimbursement
Obligations
owing under the Applications, all fees and charges payable
hereunder,
and all other payment obligations of the Borrower or any other
Designated Company arising under or in relation to any Loan
Document
(including, without limitation, any interest, fees and other
charges on
the Loans or otherwise under the Loan Documents that would accrue
but
for the filing of the Bankruptcy Cases or any other insolvency
proceeding with respect to the Borrower or any other Designated
Company, whether or not a claim for such amounts is allowed in
such
Bankruptcy Cases or any other insolvency proceeding and
including
Obligations to the Administrative Agent and Lenders pursuant to
Sections 9.5 and 12.15 hereof), all obligations of the Borrower or
any
other Designated Company in respect of Hedging Liabilities and
all
obligations of the Borrower or any other Designated Company in
respect
of Funds Transfer and Deposit Account Liability, in each case
whether
now existing or hereafter arising, due or to become due, direct
or
indirect, absolute or contingent, liquidated or unliquidated,
arising
by operation of law or otherwise, and howsoever evidenced, held
or
acquired, whether arising or incurred before, on or after the
Petition
Date. Without limiting the generality of the foregoing, the
term
"Obligations" shall include all Pre-Petition Indebtedness and all
DIP
Indebtedness as those terms are defined in the Financing Order.
The
allowability of the Obligations constituting Pre-Petition
Indebtedness
shall be subject to the terms of the Financing Order and any
other
applicable order of the Bankruptcy Court, and all references to
"Obligations" herein shall be deemed to exclude any portion of
the
Obligations, if any, that are disallowed by final order of the
Bankruptcy Court, and in such case, only from and after such
disallowance order becomes final.
"Permitted Overadvance" means an amount approved in the sole
discretion of the Administrative Agent not to exceed $500,000 at
any
one time outstanding by which the outstanding principal balance
of
Revolving Loans and L/C Obligations hereof knowingly exceeds the
sum of
the Borrowing Base as then determined and computed in accordance
with
Section 1.1 hereof (as reduced by any reserves taken pursuant
to
Section 1.1 hereof) plus the DIP Overadvance Amount; provided,
however,
that (i) Permitted Overadvances shall be advanced only if, in
Administrative Agent's judgment, such Permitted Overadvances
are
necessary or desirable to preserve or protect the Collateral, or
any
portion thereof, or to enhance the likelihood of, or maximize
the
amount of, repayment by the Borrower of the Obligations, and
(ii)
Permitted Overadvances shall not knowingly be permitted to be
outstanding for a period exceeding three consecutive Business
Days.
"Pre-Petition Revolving Credit Commitments" shall mean the
Revolving Credit Commitments to make Revolving Loans, as in
effect
immediately prior to the Petition Date.
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<PAGE>
"Pre-Petition Lenders" shall mean those Lenders with Revolving
Credit Commitments to make Revolving Loans immediately prior to
the
Petition Date.
"Revolver Percentage" means: (i) so long as there are any
Revolving Loans (including, without limitation, DIP Revolving
Loans) or
Revolving Credit Commitments (including, without limitation,
DIP
Revolving Credit Commitments) outstanding, the percentage of
the
Revolving Credit Commitments represented by such Lender's
Revolving
Credit Commitment, which in the case of the DIP Revolving
Credit
Commitments of the DIP Lenders are as set forth in Schedule 1
attached
to the Assumption Agreement; or (ii) at all other times after
the
indefeasible payment in full of the Loans (including all DIP
Revolving
Loans) and the termination in full of the Revolving Credit
Commitments
(including the DIP Revolving Credit Commitments), the percentage
held
by such Lender (including through participation interests in
Reimbursement Obligations) of the aggregate principal amount of
all
Loans and L/C Obligations then outstanding.
"Revolving Credit" means the credit facility for making
Revolving Loans (including, without limitation, DIP Revolving
Loans)
and issuing Letters of Credit described in Sections 1.1 and 1.3
hereof.
"Revolving Loan" is defined in Section 1.1 hereof whether made
before, on or after the Petition Date (including, without
limitation,
DIP Revolving Loans), and as so defined, includes a Base Rate Loan
or a
Eurodollar Loan, each of which (as so defined) is a "type" of
Revolving
Loan hereunder.
"Termination Date" means the occurrence of the Loan Payment
Date, as such term is defined in the Financing Order, or such
earlier
date on which the Revolving Credit Commitments are terminated
in
accordance with the terms of this Agreement (subject to the
provisions
of the Financing Order with respect to funding of Approved
Administration Expenses); provided, that the Obligations
outstanding as
of the commencement of the Bankruptcy Cases shall be deemed to
have
been automatically accelerated pursuant to this Agreement
(provided
that, notwithstanding such acceleration, such Obligations shall be
due
and payable as provided in this Agreement and the Financing Order)
and
the Pre-Petition Revolving Credit Commitments outstanding as of
the
commencement of the Bankruptcy Cases shall have been
automatically
terminated pursuant to this Agreement.
O. The
definition of "Applicable Margin" in Section 5.1 of the
Pre-Petition Credit Agreement is hereby amended by adding the
following sentence
at the end of such definition:
"Notwithstanding the foregoing and notwithstanding any
provision to the contrary in Section 1.4 hereof or any other
provision
of this Agreement, at any time on or after the Petition Date,
the
Applicable Margin with respect to all DIP Revolving Loans and
other
Obligations incurred or advanced on or after the Petition Date
shall
equal three percent (3%)."
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<PAGE>
P. The
definition of "Eligible Inventory" in Section 5.1 of the
Pre-Petition Credit Agreement is hereby amended by replacing
subparagraph (m)
thereof with the following:
"(m)
it is not "in-transit" Inventory, and
(n) it is
otherwise deemed to be Eligible Inventory in
the reasonable judgment of the Administrative Agent."
Q. The
definition of "Required Lenders" in Section 5.1 of the
Pre-Petition Credit Agreement is hereby amended by adding the
following sentence
at the end of such definition:
"Notwithstanding the foregoing, at any time on or after the
Petition Date, the term "Required Lenders" shall mean the DIP
Lenders
the total of whose (i) DIP Revolving Credit Commitments, plus
(ii)
outstanding Loans and interests in Letters of Credit as of the
Petition
Date, exceeds 50% of the sum of (x) the total DIP Revolving
Credit
Commitments of all DIP Lenders, plus (y) all outstanding Loans
and
interests in Letters of Credit of all Lenders as of the Petition
Date."
R. The
definition of "Revolving Credit Commitment" in Section 5.1
of the Pre-Petition Credit Agreement is hereby amended by adding
the following
sentence at the end of such definition:
"Notwithstanding the foregoing, upon the commencement of the
Bankruptcy Cases and at all times prior to the Assumption
Agreement
Effectiveness Date, the Revolving Credit Commitment of each
Lender
shall be deemed terminated, but from and after the Assumption
Agreement
Effectiveness Date, the Revolving Credit Commitment of each
Lender
shall mean such Lender's DIP Revolving Credit Commitment."
S.
Section 6.4 of the Pre-Petition Credit Agreement is hereby
amended by amending and restating the first sentence thereof in its
entirety as
follows:
"From and after the Petition Date, the Borrower will use the
proceeds of the Loans and other Collateral proceeds solely to fund
(i)
disbursements of the type and up to the amounts set forth in
the
Approved Budget (after giving effect to any Permitted Budget
Variances), (ii) amounts constituting part of the Carve-Out and
Approved Administration Expenses, in each case to the extent
provided
in the Financing Order, and (iii) repayment of any part of the
Obligations."
T.
Section 6.6 of the Pre-Petition Credit Agreement is hereby
amended by replacing the reference to "December 31, 2002" set forth
therein with
a reference to "the Petition Date."
U.
Section 6.14 of the Pre-Petition Credit Agreement is hereby
amended by amending and restating such Section in its entirety as
follows:
"Section 6.14 Affiliate
Transactions.
----------------------
Except as set forth in Section 8.15 hereof, no Designated
Company is a party to any contract or agreement with any of its
Affiliates except on terms and conditions which are no less
favorable
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<PAGE>
to such Designated Company than would be usual and customary in
similar
contracts or agreements between Persons not affiliated with
each
other."
V.
Article 6 of the Pre-Petition Credit Agreement is hereby
further amended by adding as new subsections 6.26, 6.27 and 6.28
thereof the
following:
Section 6.26
Administrative Priority; Lien Priority.
--------------------------------------
(a) From and
after the entry of the Financing Order, and
subject to the provisions thereof, the Obligations will
constitute
allowed administrative expenses in the Bankruptcy Cases having
priority
in payment over all other administrative expenses and unsecured
claims
against the Borrower and the other Designated Companies now
existing or
hereafter arising, of any kind or nature whatsoever (subject to the
set
asides or other provision for payment of amounts constituting part
of
the Carve-Out and amounts constituting Approved Administration
Expenses), including, without limitation, all administrative
expenses
of the kind specified in, or arising or ordered under, sections
105,
326, 328, 330, 331, 503(b), 506(c), 507, 546(c), 726, 1114 or any
other
provision of the Bankruptcy Code, subject, as to priority, only
to
Prior Claims.
(b) From and
after the entry of the Financing Order, and
subject to the terms thereof, the Liens of the Administrative Agent
on
the Collateral shall be a valid and perfected first priority
Liens,
subject only to the Liens permitted under Section 8.8 hereof.
(c) From and
after the entry of the Financing Order, such
Financing Order is in full force and effect, and has not been
reversed,
modified, amended, stayed, vacated or subject to appeal absent
the
written consent of the Administrative Agent, the Required Lenders
and
the Borrower.
Section 6.27
Appointment of Trustee or Examiner.
----------------------------------
No order has been entered in any Bankruptcy Case (i) for the
appointment of a chapter 11 trustee, (ii) for the appointment of
an
examiner with enlarged powers (beyond those set forth in
sections
1106(a)(3) and (4) of the Bankruptcy Code) under section 1106(b) of
the
Bankruptcy Code or (iii) to convert any Bankruptcy Case to a
chapter 7
case or to dismiss any Bankruptcy Case (other than any Bankruptcy
Case
of any Foreign Debtor).
Section 6.28 Foreign
Debtors.
---------------
With respect to any and all Receivables invoiced on letterhead
of any Foreign Debtor and/or paid by the applicable account debtor
to
the order of such Foreign Debtor: (i) all such Receivables were and
are
generated from the sale by such Foreign Debtor of Inventory
acquired by
such Foreign Debtor from the Borrower, (ii) the Borrower was and is
the
sole source of Inventory for such Foreign Subsidiary, (iii) all
such
Receivables were and are included in the calculation of the
Borrowing
Base, (iv) to reimburse the Borrower for such Inventory provided
to
such Foreign Subsidiary, all payments on such Receivables by
the
respective account debtors were made directly to Borrower's
collections
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<PAGE>
lock box maintained at the Administration Agent, (v) all such
Receivables payments were and are transferred from such lock
box
directly into the Concentration Account, (vi) all collection
efforts on
such Receivables were and are performed by Borrower, and (vii)
Borrower
is the sole provider of cash and other working capital to such
Foreign
Subsidiary. The aggregate book value of all Inventory owned,
controlled
or otherwise possessed (including, without limitation, on a
consignment
basis) by the Foreign Debtors is less than $400,000."
W.
Section 7.1 of the Pre-Petition Credit Agreement is hereby
amended by amending and restating such Section in its entirety as
follows:
"Section 7.1 All Credit
Events.
-----------------
At the time of each Credit Event hereunder:
(a) each of
the representations and warranties set forth
herein and in
the other Loan Documents, which, in accordance with
Section 12.5 hereof, are made at and as of the time of such
Credit
Event, shall be and remain true and correct in all material
respects as
of said time, both before and after giving effect to such Credit
Event,
except to the extent the same (i) expressly relate to an earlier
date
or (ii) are not true and correct solely by virtue of the occurrence
or
continuance of an Existing Pre-Petition Default or the event or
condition that gave rise to same;
(b) except for
the Existing Pre-Petition Defaults, the
Designated Companies shall be in compliance in all material
respects
with all of the terms and conditions hereof and of the other
Loan
Documents, and no Default or Event of Default shall have occurred
and
be continuing or would occur as a result of such Credit Event;
provided, however, that the Lenders (or the Administrative Agent,
in
the case of Revolving Loans made pursuant to Section 3.2(e)
hereof), in
their sole discretion, may continue to make advances with respect
to a
Credit Event notwithstanding the existence of any Default or Event
of
Default and any such advances so made shall not be deemed a waiver
of
any such Default or Event of Default;
(c) in the
case of any Borrowing request under the
Revolving Credit, after giving effect to such Borrowing, (i)
the
aggregate outstanding principal amount of all Revolving Loans
(including DIP Revolving Loans) and outstanding L/C Obligations
shall
not exceed the sum of the Borrowing Base as then determined and
computed in accordance with Section 1.1 hereof (as reduced by
any
reserves taken pursuant to Section 1.1 hereof) plus the DIP
Overadvance
Amount then in effect plus, in the Administrative Agent's sole
discretion, any Permitted Overadvances then in effect, and (ii)
the
aggregate principal amount of all DIP Revolving Loans then
outstanding
shall not exceed the sum of all DIP Revolving Credit Commitments
then
in effect;
(d) in the
case of a Borrowing, the Administrative Agent
shall have received the notice required by Section 1.6 hereof, and
in
the case of the issuance of any Letter of Credit, the L/C Issuer
shall
have received a duly completed Application for such Letter of
Credit
together with any fees called for by Section 2.1 hereof, and, in
the
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case of an extension or increase in the amount of a Letter of
Credit, a
written request therefor in a form reasonably acceptable to the
L/C
Issuer together with fees called for by Section 2.1 hereof;
(e) since the
Petition Date, there shall have occurred no
Material Adverse Effect and no event which may be expected to have
a
Material Adverse Effect; and
(f) such
Credit Event shall not violate any order,
judgment or decree of the Bankruptcy Court or any other court or
other
governmental authority, including, without limitation, the
Financing
Order, or any provision of law or regulation applicable to the
Administrative Agent, L/C Issuer or any Lender (including,
without
limitation, Regulation U of the Board of Governors of the
Federal
Reserve System) as then in effect.
Each request for a Borrowing hereunder and each request for
the issuance of, increase in the amount of, or extension of the
expiration date of, a Letter of Credit hereunder, shall be deemed
to be
a representation and warranty by the Borrower and each other
Designated
Company on the date of such Credit Event as to the facts specified
in
subsections (a) through (f), inclusive, of this Section."
X.
Section 8.5(a) of the Pre-Petition Credit Agreement is hereby
amended by amending and restating such Section in its entirety as
follows:
"(a)
as soon as available, and in any event no later than
the close of business on each Business Day, a consolidated
Borrowing
Base Certificate in the form attached hereto as Exhibit C showing
the
computation of the Borrowing Base (calculated in accordance
with
Section 1.1 hereof) in reasonable detail as of the close of
business on
the immediately preceding Business Day, together with such
other
information as is therein required, in each case prepared by
the
Borrower and certified to by the Borrower's chief financial officer
or
such other officer of the Borrower reasonably acceptable to the
Administrative Agent;"
Y.
Section 8.5 of Pre-Petition Credit Agreement is hereby amended
by amending and restating subsection (b) thereof in its entirety as
follows:
"(b)
as soon as available, and in any event within 20 days
after the last day of each calendar month, a consolidated
Receivables
and accounts payable aging and a consolidated Inventory stock
status
report (by major category of Inventory and by location of the
relevant
Inventory) and an aging of Franchise Inventory for the
Designated
Companies (separately listing the aggregate value of Franchise
Inventory that is aged (i) less than or equal to 18 months from
the
date of last receipt, (ii) more than 18 months, but less than or
equal
to 36 months from the date of last receipt, and (iii) more than
36
months from the date of last receipt), each in form and scope
reasonably satisfactory to the Administrative Agent and prepared by
the
Borrower and certified to by its chief financial officer or
another
officer of the Borrower reasonably acceptable to the
Administrative
Agent; provided, however, that for each calendar month ending on
or
after the Petition Date, the Borrower shall furnish such
consolidated
17
<PAGE>
Receivables and accounts payable aging reports on a weekly basis
as
soon as available, and in any event within seven days following the
end
of each week;"
Z.
Section 8.6 of the Pre-Petition Credit Agreement is hereby
amended by adding the following paragraph at the end of such
Section:
"Without limiting any of the foregoing, from and after the
Petition Date, Borrower hereby agrees to, and shall cause each
other
Designated Company to: (i) give Administrative Agent
