EXHIBIT 10.2
Execution
Copy
SECOND AMENDMENT TO
FORBEARANCE AGREEMENT
THIS SECOND AMENDMENT
(this “ Amendment
”), is entered into as of this 4th day of August, 2008, and
effective as of the 23rd day of July, 2008, between Devcon
International Corp. (the “ Company ”) and CS
Equity II LLC (the “ Investor ”).
WHEREAS, the Company and the
Investor (collectively, the “ Parties ”) are
parties to that certain Forbearance Agreement, dated as of
May 12, 2008 (the “ Forbearance Agreement
”), as amended from time to time, a copy of which is attached
hereto as Exhibit A ; and
WHEREAS, the Parties desire to amend
the Forbearance Agreement, in the manner and on the terms and
conditions hereinafter set forth.
NOW, THEREFORE, in consideration of
the foregoing, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the
parties hereto hereby agree as follows:
1. Amendment of Forbearance
Agreement . The Forbearance Agreement is hereby amended as
follows:
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(a)
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The following
clauses are hereby added to the Recitals of the Forbearance
Agreement after the ninth WHEREAS clause:
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“ WHEREAS , the
Certificate of Designations provides that, beginning June 30,
2008, so long as any Preferred Shares remain outstanding, the
Company shall not allow the Leverage Ratio to exceed 38.0x;
and
WHEREAS , as of June 30, 2008, Preferred Shares
remained outstanding and the Leverage Ratio exceeded 38.0x (the
“ Ratio Excess ”); and
WHEREAS , the Company acknowledges that the Leverage
Ratio exceeding 38.0x is a Triggering Event under section 3(a)(i)
of the Certificate of Designation and breaches other provisions of
the Transaction Documents; and”.
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(b)
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Section 1(a) of the Forbearance Agreement is hereby deleted
and replaced in its entirety to read as follows:
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“Effective as of the Effective
Time (as defined below), and pursuant to the terms of this
Agreement, the Investor hereby agrees to forbear (the “
Forbearance ”) from (i) declaring a breach of any
Transaction Document caused as a
result of either the Delisting or
the Ratio Excess, (ii) declaring the occurrence of any
Triggering Event caused as a result of either the Delisting or the
Ratio Excess having occurred and from delivering any Notice of
Redemption at Option of Holder with respect thereto or
(iii) demanding any amounts due and payable caused either as a
result of the Delisting or the Ratio Excess, including without
limitation, any Registration Delay Payments payable with respect to
the Preferred Shares, until the earlier of (the “
Forbearance Expiration Date ” and the period
commencing on the Effective Time and ending on the Forbearance
Expiration Date, the “ Forbearance Period
”):”.
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(c)
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Section 1(a)(i) of the Forbearance Agreement is hereby amended
by the deletion of the reference therein to “July 23,
2008” and the insertion in lieu thereof of “August 25,
2008”.
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2. Confirmation . Except as
specifically amended hereby, the Forbearance Agreement is and
remains unmodified and in full force and effect and is hereby
ratified and confirmed in all respects.
3. Defined Terms .
Capitalized terms that are not defined in this Amendment have the
meanings ascribed to them in the Forbearance Agreement.
4. Miscellaneous .
(a) No Waiver . Except as
expressly set forth herein, the execution of this Amendment and any
discussions, negotiations, correspondence and other communications,
drafts of documents and meetings among the parties hereto do
not represent and shall not be construed or relied upon
as being (i) a waiver of or prejudicial to any rights the
parties may have or (ii) a waiver of the parties’ rights
under any statute or under any applicable law or (iii) an
admission or declaration against interest by either party
hereto.
(b) Further Assurances . Each
party shall do and perform, or cause to be done and performed, all
such further acts and things, and shall execute and deliver all
such other agreements, certificates, instruments and documents, as
the other party may reasonably request in order to carry out the
intent and accomplish the purposes of this Amendment and the
consummation of the transactions contemplated hereby.
(c) Entire Agreement . This
Amendment supersedes all prior discussions, agreements,
commitments, arrangements, negotiations or understandings, whether
oral or written, of the parties with respect thereto.
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(d) Headings . Section
headings herein are included for convenience of reference only and
shall not constitute a part of this Amendment for any other
purpose.
(e) Amendment as Transaction
Document . It is understood and agreed that this Amendment
shall constitute a Transaction Document, and that any failure of
Company to comply with the terms and conditions hereof shall
constitute a Triggering Event under the Certificate of
Designations, without any notice or grace or cure periods (except
as otherwise expressly provided herein
