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AMENDMENT NO. 6 TO CREDIT AGREEMENT AND WAIVER

Waiver Agreement

AMENDMENT NO. 6 TO CREDIT AGREEMENT AND WAIVER | Document Parties: INTCOMEX, INC. | Comerica Bank You are currently viewing:
This Waiver Agreement involves

INTCOMEX, INC. | Comerica Bank

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Title: AMENDMENT NO. 6 TO CREDIT AGREEMENT AND WAIVER
Governing Law: Michigan     Date: 11/14/2008

AMENDMENT NO. 6 TO CREDIT AGREEMENT AND WAIVER, Parties: intcomex  inc. , comerica bank
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Exhibit 10.1

AMENDMENT NO. 6 TO CREDIT AGREEMENT AND WAIVER

This Amendment No. 6 to Credit Agreement and Waiver (“Amendment”) executed as of November 13, 2008 by and between Software Brokers of America, Inc., a Florida corporation (“Company”) and Comerica Bank (“Bank”).

RECITALS:

A. Company and Bank entered into that certain Credit Agreement dated August 25, 2005, as previously amended (“Agreement”).

B. Company and Bank desire to amend the Agreement as set forth below.

C. Company has requested that Bank waive certain existing Events of Default.

NOW, THEREFORE, Company and Bank agree as follows:

1. Company has advised Bank that it failed to comply with the provisions of Sections 6.11 and 6.12 of the Agreement for its fiscal quarter ending September 30, 2008 (the “Covenant Violations”). Company has requested that the Bank waive any Event of Default under the Agreement resulting from the Covenant Violations. Bank hereby waives any Event of Default under the Agreement resulting from the Covenant Violations. This waiver shall not be deemed to amend or alter in any respect the terms and conditions of the Agreement or any of the other Loan Documents, or to constitute a waiver or release by the Bank of any right, remedy or Event of Default under the Agreement or any of the other Loan Documents, except to the extent specifically set forth herein.

2. The definition of “Borrowing Base” set forth in Section 1 of the Agreement is amended to read as follows:

“‘Borrowing Base’ shall mean, as of any date of determination, an amount equal to the sum of (i) eighty-five percent (85%) of Eligible Accounts, plus (ii) the Applicable Percentage of the amount equal to ninety percent (90%) of Eligible Insured Foreign Accounts, plus (iii) the lesser of (A) an amount equal to the sum of (1) sixty percent (60%) of Eligible Inventory plus (2) sixty percent (60%) of the aggregate undrawn face amount of outstanding Eligible Commercial Letters of Credit, or (B) $14,000,000. In no case may the Borrowing Base include reliance on account of both the Eligible Inventory purchased with an Eligible Commercial Letter of Credit and the Eligible Commercial Letter of Credit”.

3. The definition of “Revolving Credit Maturity Date” set forth in Section 1 of the Agreement is amended to read as follows:

“Revolving Credit Maturity Date” shall mean the earlier of (i) January 1, 2010 or (ii) the date on which the Revolving Commitment shall terminate in accordance with the provisions of this Agreement.


4. The definition of “Revolving Credit Note” set forth in the Agreement is amended to read as follows:

“‘Revolving Credit Note’ shall mean the Revolving Credit Note dated November 13, 2008 made in the principal amount of $30,000,000 by Company payable to Bank, as may be amended, restated, supplemented or replaced from time to time, a copy of which is annexed hereto as Exhibit ‘B’.”

5. Section 2.4 of the Agreement is amended to read as follows:

“2.4 The Revolving Credit Note shall mature on the Revolving Credit Maturity Date. Interest on the principal amount from time to time outstanding under the Revolving Credit Note shall accrue at the rate and shall be calculated and payable as set forth in the Revolving Credit Note.”

6. Section 2.5 of the Agreement is amended to read as follows:

“2.5 [Intentionally deleted.]”

7. Section 2.6 of the Agreement is amended to read as follows:

“2.6 [Intentionally deleted.]”

8. Section 2.8 of the Agreement is amended to read as follows:

“2.8 The aggregate principal amount at any time outstanding under the Revolving Credit Note plus the aggregate undrawn amount of Letters of Credit (and the unpaid amount of any draws or other demands for payment under any Letters of Credit) shall never exceed the lesser of (i) the Revolving Credit Commitment Amount, and (ii) the Borrowing Base. Company shall immediately make all payments necessary to comply with this provision.”

9. Section 2.9 of the Agreement is amended to read as follows:

“2.9 [Intentionally deleted.]”

10. Section 2.10 of the Agreement is amended to read as follows:

“2.10 [Intentionally deleted.]”

11. Section 2.11 of the Agreement is amended to read as follows:

“2.11 [Intentionally deleted.]”

12. Sections 3.1 through 3.6 of the Agreement are amended to read as follows:

“3.1 [Intentionally deleted.]

 

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3.2 [Intentionally deleted.]

3.3 [Intentionally deleted.]

3.4 [Intentionally deleted.]

3.5 [Intentionally deleted.]

3.6 [Intentionally deleted.]”

13. Section 6.1(e) of the Agreement is amended to read as follows:

“(e) within ten (10) days after the end of each month, a borrowing base certificate in the form annexed hereto as Exhibit “C”, with appropriate insertions certified by an authorized officer of Company as being correct and accurate to the best of such officer’s knowledge; and on Monday of each week and as of the close of business on the prior Friday, a weekly update to the borrowing base certificate in the form annexed hereto as Exhibit “C-1”, with appropriate insertions certified by an authorized officer of Company as being correct and accurate to the best of such officer’s knowledge; and”

14. Section 6.4 of the Agreement is amended to read as follows:

“6.4 Permit Bank, through its authorized attorneys, accountants, and representatives, to examine Company=s books, accounts, records, ledgers and assets of every kind and description at all reasonable times during normal business hours upon oral or written request of Bank, including, without limitation, (i) semi-annual Collateral audits at Company’s sole expense, provided, that Company shall only be obligated to pay the expenses for two such Collateral audits per year unless an Event of Default has occurred and is continuing and (ii) appraisals of Company’s inventory by a third party appraiser acceptable to Bank, provided, that Company shall only be obligated to pay the expenses for such appraisal once every other year (commencing in 2008) unless an Event of Default has occurred and is continuing.”

15. Section 7.11 of the Agreement is amended to read as follows:

“7.11 Make or allow to remain outstanding any Investment except the following permitted Investments (all of the exceptions set forth below being subject to the provisions of Section 7.13 of this Agreement):

(a) Investments of cash in cash equivalents and any extensions, renewals or reinvestments thereof;

(b) sales of inventory on open account (or otherwise on credit) and in the ordinary course of business and Investments in the form of notes or other similar instruments evidencing or supporting the obligation of an Account Debtor received in connection with such sales;

 

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(c) deposits made in the ordinary course of business in order to obtain goods or services;

(d) existing Investments described in attached Schedule 7.11 and any extensions, renewals or reinvestments thereof (excluding any increases thereof);

(e) Investments received in settlement of amounts due or owing to Company as a result of insolvency proceedings or other disputes involving an Account Debtor or upon the foreclosure or enforcement of any lien in favor of Company;

(f) loans and advances to employees of Company that constitute Investments so long as the aggregate amount outstanding does not exceed US$75,000 at any time;

(g) loans to the Guarantor; and

(h) additional Investments not to exceed US $100,000 in the aggregate.”

16. Any reference to the term “Prime-based Rate” in the Agreement shall mean the rate then applicable under the Revolving Credit Note.

17. Exhibit “B” of the Agreement is amended to read in the form annexed hereto as Exhibit “B”. Exhibit “C-1” is added to the Agreement to read in the form of Exhibit “C-1” annexed hereto.

18. Company shall furnish Bank within 45 days after and as of December 31, 2008, (i) a balance sheet and statement of profit and loss and surplus reconciliation of Company for Company’s fiscal year ending on such date, certified by an authorized officer of Company as being correct and accurate to the best of his knowledge, and (ii) a covenant compliance report satisfying the requirements of Section 6.6 of the Agreement. Nothing set forth in this paragraph shall modify in any respect Company’s obligations to provide Bank with a detailed audit report for such fiscal year as and when set forth in Section 6.1(a) of the Agreement as required under Section 6.6 of the Agreement.

19. Company will reimburse the Bank for all costs and expenses, including reasonable attorneys’ fees, incurred by the Bank in connection with the preparation of this Amendment and the documents, instruments and agreements executed in connection herewith.

20. The amendments and waiver contained herein shall be effective upon execution of this Amendment by Company and Bank, receipt by Bank of all other loan documents, if any, listed on the Closing Agenda of even date herewith duly executed by the parties thereto and payment of the fee required under paragraph 8 above.

21. Except as modified hereby, all of the terms and conditions of the Agreement shall remain in full force and effect, the liability of the Company howsoever arising or provided for in the Agreement, as hereby modified or amended, is hereby reaffirmed.

 

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22. The Company hereby represents and warrants that, after giving effect to the amendments and waiver contained herein; (a) execution, delivery and performance of this Amendment and any other documents and instruments required under this Amendment or the Agreement are within Company’s corporate powers, have been duly authorized, are not in contravention of law or the terms of Company’s Articles of Incorporation or Bylaws, and do not require the consent or approval of any governmental body, agency, or authority; and this Amendment and any other documents and instruments required under this Amendment or the Agreement, will be valid and binding in accordance with their terms; (b) the continuing representations and warranties of Company set forth in Sections 5.1 through 5.5 and 5.7 through 5.15 of the Agreement are true and correct on and as of the date hereof with the same force and effect as made on and as of the date hereof; (c) the continuing representations and warranties of Company set forth in Section 5.6 of the Agreement are true and correct as of the date hereof with respect to the most recent financial statements furnished to the Bank by Company in accordance with Section 6.1 of the Agreement; and (d) no Event of Default (as defined in the Agreement), or condition or event which, with the giving of notice or the running of time, or both, would constitute an Event of Default, has occurred and is continuing as of the date hereof.

23. Company hereby waives, discharges, and forever releases Bank and the Bank’s employees, officers, directors, attorneys, stockholders and successors and assigns (collectively, the “Released Parties”), from and of (i) any and all claims, causes of action, allegations or assertions that Company and/or Intcomex has or may have had against any or all of the Released Parties arising under or in connection with the financial arrangements between Company under Agreement and/or any of the other Loan Documents (as defined in the Credit Agreement) at any time up through and including the date of this Amendment, and (ii) any and all other claims, causes of action, allegations or assertions that Company has or may have had against any or all of the Released Parties at any time up through and including the date of this Amendment, and which are known to Company (collectively, the “Known Claims”), regardless if any such Known Claims arose as a result of Bank’s actions or omissions in connection with the financial arrangements between Company and Bank, any amendments, extensions, or modifications thereto, or Bank’s administration of those financial arrangements.

WITNESS the due execution hereof on the date and year first above written.

 

 

 

 

 

 

 

 

 

 

COMERICA BANK

 

 

 

SOFTWARE BROKERS OF AMERICA, INC.

 

 

 

 

 

By:

 

/s/ Mark Koszyk

 

 

 

By:

 

/s/ Anthony Shalom

 

 

Mark Koszyk

 

 

 

 

 

Anthony Shalom

 

 

 

 

 

Its:

 

Senior Vice President

 

 

 

Its:

 

President

 

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Acknowledgement

The above Amendment is hereby acknowledged by the undersigned Guarantor as of November 13, 2008:

 

 

 

 

INTCOMEX, INC.

 

 

By:

 

/s/ Anthony Shalom

 

 

Anthony Shalom

 

 

Its:

 

CEO

 

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EXHIBIT “B”

THIS REVOLVING CREDIT NOTE RENEWS, EXTENDS AND/OR MODIFIES THAT CERTAIN $30,000,000 REVOLVING CREDIT NOTE DATED AUGUST 17, 2007 BY SOFTWARE BROKERS OF AMERICA, INC. PAYABLE TO COMERICA BANK, WHICH RENEWED, EXTENDED, INCREASED AND/OR MODIFIED THAT CERTAIN $27,500,000 REVOLVING CREDIT NOTE DATED MAY 17, 2007 BY SOFTWARE BROKERS OF AMERICA, INC. PAYABLE TO COMERICA BANK WHICH RENEWED, EXTENDED, INCREASED AND/OR MODIFIED THAT CERTAIN $25,000,000 REVOLVING CREDIT NOTE DATED AUGUST 25, 2005 BY SOFTWARE BROKERS OF AMERICA, INC. PAYABLE TO COMERICA BANK, EVIDENCING AN ORIGINAL PRINCIPAL AMOUNT OF $25,000,000. IN CONNECTION WITH THE ISSUANCE OF THE $25,000,000 REVOLVING CREDIT NOTE, FLORIDA DOCUMENTARY STAMP TAX IN THE AMOUNT OF $2450 WAS PAID DIRECTLY TO THE FLORIDA DEPARTMENT OF REVENUE CERTIFICATE OF REGISTRATION NO. 38-0477375-16-01. NO ADDITIONAL DOCUMENTARY STAMP TAX IS DUE ON THIS NOTE.

REVOLVING CREDIT NOTE

 

 

 

 

$30,000,000

  

November 13, 2008

On or before the Maturity Date, FOR VALUE RECEIVED, the undersigned promise(s) to pay to the order of COMERICA BANK (herein called “Bank”), at any office of the Bank in the State of Michigan, the principal sum of THIRTY MILLION DOLLARS ($30,000,000), or so much of said sum as has been advanced and is then outstanding under this Note, together with interest thereon at the Daily Adjusting LIBOR Rate, except during any period of time during which, in accordance with the terms and conditions of this Note, the Indebtedness hereunder shall bear interest at the Prime-based Rate.

This Note is a note under which advances, repayments and re-advances may be made from time to time, subject to the terms and conditions of this Note and the Credit Agreement. AT NO TIME SHALL THE BANK BE UNDER ANY OBLIGATION TO MAKE ANY ADVANCES TO THE UNDERSIGNED PURSUANT TO THIS NOTE (NOTWITHSTANDING ANYTHING EXPRESSED OR IMPLIED IN


 
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