EXHIBIT 10(ac)(3)
WAIVER AND THIRD AMENDMENT
TO
AMENDED AND RESTATED REVOLVING
CREDIT AGREEMENT
This Waiver and Third Amendment to
Amended and Restated Revolving Credit Agreement (this “
Amendment ”) is entered into as of October 12, 2005
(the “ Effective Date ”) by and among (i)
Richardson Electronics, Ltd., a Delaware corporation (the “
US-Borrower ”), (ii) Burtek Systems, Inc., a Canadian
corporation, Richardson Electronics Canada, Ltd., a Canadian
corporation (each a “ Canada-Borrower ”, and
collectively, the “ Canada-Borrowers ”); (iii)
Richardson Electronics Limited, an English limited liability
company (the “ UK-Borrower ”); (iv) RESA, SNC, a
French partnership, Richardson Electronique SNC, a French
partnership, Richardson Electronics Iberica, S.A., a Spanish
corporation, Richardson Electronics GmbH, a German limited
liability company, Richardson Electronics Benelux B.V., a Dutch
private limited liability company, (each a “
Euro-Borrower ” and collectively, the “
Euro-Borrowers ”), (v) Richardson Sweden Holding AB, a
Swedish corporation (the “ Krona-Borrower ”) and
(vi) Richardson Electronics KK, a company organized under the laws
of Japan (the “ Japan-Borrower ”) (the
US-Borrower, the Canada-Borrowers, the UK-Borrower, the
Euro-Borrowers, the Krona-Borrower and the Japan-Borrower are
collectively referred to as the “ Borrowers ”),
the lenders party hereto (each, a “ Lender ” and
collectively, the “ Lenders ”), JP Morgan Bank,
N.A., London Branch, as Eurocurrency Agent (the “
Eurocurrency Agent ”), JPMorgan Chase Bank, N.A.,
Canada Branch as Canada Agent (the “ Canada Agent
”), JPMorgan Chase Bank, N.A., Tokyo Branch as Japan Agent
(the “ Japan Agent ”) and JPMorgan Chase Bank,
N.A., successor by merger to Bank One, NA as administrative agent
(in such capacity, the “ Administrative Agent ”)
(the Eurocurrency Agent, the Canada Agent, the Japan Agent and the
Administrative Agent are collectively referred to as the “
Funding Agents ” and each individually a “
Funding Agent ”).
RECITALS
WHEREAS, the Borrowers, the Lenders
and the Funding Agents are parties to that certain Amended and
Restated Revolving Credit Agreement dated as of October 29, 2004
(as amended from time to time, the “ Agreement
”);
WHEREAS, the Borrowers, the Lenders
and the Funding Agents desire to amend the Credit Agreement in
order to revise certain financial covenants on the terms and
conditions set forth herein;
WHEREAS, the Lenders wish to waive
certain Events of Default arising from the US-Borrower and its
Subsidiaries’ failure to satisfy certain requirements in
respect of their Tangible Net Worth at the quarter ended August 31,
2005, on terms and conditions set forth herein;
NOW, THEREFORE, in consideration of
the premises and mutual covenants contained herein, the parties
hereto agree as follows:
1. Defined Terms . Capitalized
terms used herein but not defined herein shall have the meanings
ascribed thereto in the Agreement, as amended hereby.
2. Waiver .
Each Lender hereby waives Events of
Default under Section 7.3 of the Agreement arising solely from the
failure of the US-Borrower and its Subsidiaries to maintain minimum
Tangible Net Worth required by Section 6.26 of the Agreement at the
fiscal quarter ended August 31, 2005.
3. Amendments .
(a) Section 6.26 is deleted in its
entirety and replaced as follows:
6.26 Tangible Net Worth . The
US-Borrower and its Subsidiaries will maintain, at all times, a
Tangible Net Worth greater than the sum of (i) $89,444,000,
plus (ii) fifty-percent (50%) of the Net Income of the
US-Borrower and its Subsidiaries earned in each fiscal quarter
beginning with the quarter ending August 31, 2005 (without
deduction for losses), plus (iii) one hundred percent (100%)
of the net proceeds (gross proceeds minus (A) ordinary and
necessary out of pocket costs and expenses and (B) reasonable
underwriting fees and discounts incurred with respect to such gross
proceeds) received by the US-Borrower or its Subsidiaries on or
after May 31, 2005 from additional paid in capital, including, but
not limited to, equity investments and proceeds from the issuance
and sale of capital stock (including the amount of all Indebtedness
which is converted into equity in the US-Borrower or its
Subsidiaries).
4. Effectiveness . This Amendment
shall become effective when the Administrative Agent has received
all of the following acknowledged to be satisfactory by the
Administrative Agent:
(a) This Amendment, executed by the
requisite signatories;
(b) A certificate, signed by the
chief financial officer of Richardson Electronics, Ltd.
substantially in the form of Annex A attached hereto and made a
part hereof, stating that on the date on which this Amendment
becomes effective (the “ Effective Time ”)
(after giving effect to this Amendment) no Default or Unmatured
Default has occurred and is continuing and further certifying that
the representations and warranties contained in Article 5 of the
Agreement are true and correct on and as of the Effective Time;
and
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(c) Such other documents,
instruments, approvals (and, if requested by the Administrative
Agent, certified duplicates of executed copies thereof) or opinions
as the Administrative Agent may reasonably request.
5. Condition Subsequent . As a
condition subsequent to the waiver contained in Section 2 hereto,
the US Borrower shall furnish to the Administrative Agent a copy of
its final Quarterly Report as filed with the Securities and
Exchange Commission on Form 10-Q as of and for the fiscal quarter
ended August 31, 2005 and the US Borrower’s consolidated
financial statements contained therein shall not vary in any
material respect from the preliminary financial statements
furnished by the US Borrower to the Administrative
Agent.
6. Representations and Warranties
. Each Borrower represents and warrants to the Lenders and
Funding Agents (which representations and warranties shall become
part of the representations and warranties made by such Borrower
under the Agreement) that:
(a) The execution, delivery and
performance of this Amendment has been duly authorized by all
necessary action and will not require any cons
