Exhibit 10.12
WAIVER
AGREEMENT
THIS WAIVER AGREEMENT
(this “Agreement”
) dated as of December 9, 2008, is entered into among
MODUSLINK CORPORATION, a Delaware corporation (“
ModusLink” ), SALESLINK LLC, a Delaware limited
liability company ( “SalesLink” ), SALESLINK
MEXICO HOLDING CORP., a Delaware corporation ( “SalesLink
Mexico” ) (each herein called a
“Borrower” and collectively, the
“Borrowers” ), the lenders party hereto (herein
collectively called the “Lenders” and each
individually called a “Lender” ) and BANK OF
AMERICA, N.A. (as successor by merger to LaSalle Bank National
Association), as a Lender and as Agent for the Lenders.
WHEREAS , the Borrowers and the Lenders are parties to
that certain Second Amended and Restated Loan and Security
Agreement dated as of October 31, 2005 as amended by
(i) that certain First Amendment to Second Amended and
Restated Loan and Security Agreement dated as of October 29,
2006, (ii) that certain Second Amendment to Second Amended and
Restated Loan and Security Agreement dated as of January 9,
2007, (iii) that certain Third Amendment to Second Amended and
Restated Loan and Security Agreement dated as of October 31,
2007 and (iv) that certain Fourth Amendment to Second Amended
and Restated Loan and Security Agreement dated as of
October 31, 2008 (the “Loan Agreement”
);
WHEREAS, Borrowers have failed to comply with the Fixed
Charge Coverage Ratio covenant set forth in Section 7.1(iii)
of the Loan Agreement as of October 31, 2008, which
constitutes an Event of Default under the Loan Agreement (the
“Designated Default” ); and
WHEREAS , Borrowers have requested that the Lenders
waive the Designated Default and the Lenders are willing to waive
the Designated Default subject to, and on the terms and conditions
set forth herein.
NOW, THEREFORE
, in consideration of the premises
contained herein and other good and valuable consideration, it is
agreed that:
1. Defined
Terms . Capitalized
terms used but not defined herein shall have the meanings ascribed
to such terms in the Loan Agreement.
2. Waiver
. From and after the date of this
Agreement, and subject to the other terms and conditions set forth
in this Agreement, the Lenders hereby waive the Designated Default
and all of its rights and remedies with respect to such Designated
Default. The foregoing shall not be deemed a waiver of any Event of
Default or Default which may occur after the date hereof or
establish a custom or course of dealing between the Lenders and
Borrowers, nor shall such waiver modify Borrowers’
obligations to comply with Sections 7.1(iii) of the Loan
Agreement.
3. Agreements in Respect of
Waiver . In
consideration for the agreement of the Lenders to waive the
Designated Default, each Borrower hereby acknowledges and agrees to
the following terms, conditions and agreements:
3.1 Financial Covenant
Restructuring . In
the event that the financial covenants contained in the Loan
Agreement are not amended by January 31, 2009 in a manner
acceptable to Lenders in their sole discretion (the “
Covenant Restructuring Amendment ”), such failure to
amend the financial covenants shall constitute an Event of Default
under the Loan Agreement and the Agent and Lenders shall have all
rights and remedies available to them as a result of the occurrence
of an Event of Default under the Loan Agreement and the other
Ancillary Agreements. The Lenders agree to exercise their
discretion in connection with the Covenant Restructuring Amendment
in good faith, provided, however, that the Borrowers hereby
acknowledge that the following items shall be conditions precedent
to the effectiveness and consummation of the Covenant Restructuring
Amendment:
(i) The Agent and Lenders shall have
received the audited financial statements of Borrowers required to
be delivered pursuant to Section 7.2(C)(i) of the Loan
Agreement and such audited financial statements shall have no
material deviations from the internally prepared annual financial
statements for fiscal year 2008 previously delivered to the Agent
and Lenders; and
(ii) The Agent and Lenders shall
have received the results of the field exam that is being commenced
on or around the date of this Agreement and such results shall be
acceptable to Agent and Lenders in their sole
discretion.
3.2 Approval of Advances under
Revolving Credit Facility . Notwithstanding any other provision contained
in the Loan Agreement to the contrary, until such time that the
Covenant Restructuring Amendment is consummated and in effect, each
request for an advance under the Revolving Credit Facility by
Borrowers, and all advances made in connection therewith, shall be
conditioned upon and subject to the receipt by Agent of approval of
such advance from each Lender (including delivery of to Agent via
electronic email). Each Lender may grant or withhold its approval
in connection with any request for an advance under the Revolving
Credit Facility in such Lender’s sole discretion for any
reason (or for no reason). No Lender shall be obligated to advance
any amounts in connection with a request for a Revolving Loan by
the Borrowers unless each Lender has approved such request and has
agreed to make an advance pursuant thereto. For the avoidance of
doubt, at such time that the Covenant Restructuring Amendment is
consummated and effective, this Section 3.2 shall be of
no further force and effect.
3.3 Cash Collateralization of
Letters of Credit .
Notwithstanding any other provision contained in the Loan Agreement
to the contrary, until such time that the Covenant Restructuring
Amendment is consummated and in effect, the Issuing Lender shall be
under no obligation to issue Letters of Credit for the account of a
Borrower unless (i) the Borrowers shall have deposited in a
cash collateral account opened by the Issuing Lend
