Exhibit 10.25
WAIVER AND THIRD AMENDMENT TO
LOAN AND SECURITY AGREEMENT
THIS WAIVER AND THIRD AMENDMENT TO
LOAN AND SECURITY AGREEMENT (this “Waiver and
Amendment”), dated as of November 18, 2005, is entered
into by and among Channell Commercial Corporation, a Delaware
corporation (“Domestic Borrower”), Channell Commercial
Canada Inc., an Ontario corporation (“Canadian
Borrower”), Channell Limited, a limited liability company
incorporated under the laws of England and Wales
(“CLU”), Channell Commercial Europe Limited, a limited
liability company incorporated under the laws of England and Wales
(“CCEL” and, together with CLU, “UK
Borrowers”, and, together with Domestic Borrower, Canadian
Borrower and CLU, “Borrowers”), Bank of America, N.A.,
as assignee of Banc of America Leasing Capital, LLC,
successor-in-interest to Fleet Capital Corporation, as
Administrative Agent under the Loan Agreement referred to below (in
such capacity, the “Administrative Agent”), BABC Global
Finance Inc., fka Fleet Capital Global Finance, Inc., as
assignee of Fleet Capital Canada Corporation, as Canadian Agent
under the Loan Agreement referred to below (in such capacity, the
“Canadian Agent”), Bank of America, N.A., as
successor-in-interest to Fleet National Bank, London U.K. Branch,
as UK Agent under the Loan Agreement referred to below (in such
capacity, the “UK Agent”), and the Lenders party to the
Loan Agreement referred to below, with reference to the following
facts:
RECITALS
Borrowers are parties to the Loan
and Security Agreement, dated as of September 25, 2002, as
amended (collectively, the “Loan Agreement”), with the
Administrative Agent, the Canadian Agent, the UK Agent and the
Lenders party thereto, pursuant to which the Lenders have provided
Borrowers with certain credit facilities.
Borrowers currently are in default
under Section 10.1.3 of the Loan Agreement due to their
breach of Section 8.3 of the Loan Agreement by failing
to maintain a Fixed Charge Coverage Ratio of at least 1.15 to 1.00
as of September 30, 2005 (Borrower’s actual Fixed Charge
Coverage Ratio as of September 30, 2005 was 0.36 to 1.00)
– such Event of Default hereinafter is referred to as the
“Existing Event of Default”.
The Borrowers have requested that
the Lenders waive the Existing Event of Default and modify the
minimum Fixed Charge Covenant to facilitate the Borrower’s
future compliance with the Loan Agreement.
The Lenders are willing to grant
such accommodations to Borrowers as set for below.
NOW, THEREFORE, the parties hereby
agree as follows:
1.
Defined Terms
. Any and all
initially-capitalized terms used in this Waiver and Amendment
(including, without limitation, in the recitals hereto) without
definition shall have the respective meanings specified in the Loan
Agreement.
2.
Waiver of Existing Event of
Default . The
Lenders hereby waive the Existing Event of Default. Such
waiver by the Lenders shall constitute a waiver of only the
Existing Event of Default and not a waiver of any future breach of
Section 8.3 or any other provision of the Loan
Agreement or any other Loan Document.
3.
Amendment to Minimum Aggregate
Availability Covenant . Section 8.2.18 is hereby
amended to read in full as follows:
“8.2.18
Aggregate Availability . Permit Aggregate Availability
to be less than $2,500,000 at any time.”
4.
Amendment to Minimum Fixed Charge
Coverage Ratio Covenant . Exhibit 8.3 to the Loan
Agreement is hereby amended to read in full as follows:
“EXHIBIT 8.3
FINANCIAL COVENANTS
Minimum Fixed Charge Coverage
Ratio . Borrowers
shall not permit, as of the last day of any fiscal quarter of
Domestic Borrower (beginning with the fiscal quarter ending
December 31, 2005), the Fixed Charge Coverage Ratio to be less
than 0.20 to 1.00.”
5.
Waiver and Amendment
Fee . In
consideration of the Agreement of the Agents and the Lenders to
enter into this Waiver and Amendment, Domestic Borrower hereby
agrees to pay to the Administrative Agent on the Effective Date of
this Waiver and Amendment, for the
