Exhibit 10.1
WAIVER AND
THIRD AMENDMENT TO LOAN AND SECURITY AGREEMENT
This Waiver and Third Amendment to Loan and Security Agreement, dated
as of the 3rd day of November, 1999 (this "Waiver and Amendment"), is made by
and between Accom, Inc. ("Borrower") and LaSalle Business Credit, Inc.
("LaSalle") for the purpose of amending the Loan and Security Agreement executed
between them as of December 10, 1998 (as amended, the "Agreement").
RECITALS
A. Lender has received the September 1999 financial statements
for Borrower. Upon review of these statements, Lender has determined that
Borrower has breached the following covenants of the Agreement:
o 14(n)(i) - "Consolidated Tangible Net Worth: Borrower and
its Subsidiaries, on a consolidated basis, shall maintain
as of the end of (A) the month ending September 30, 1999
a Tangible Net Worth of not less than $3,200,000 (the
'Base Amount') and (B) each month thereafter . . . ."
Breach: The Tangible Net Worth was calculated to be
$2,980,784 as of September 30, 1999 versus a
minimum requirement of $3,200,000 as of such
date.
o 14(n)(vi) - "Maximum Loss: Borrower and its Subsidiaries,
on a consolidated basis, shall not incur a fiscal
year-to-date pre-tax loss, calculated in accordance with
GAAP, in excess of $525,000 as of September 30, 1999."
Breach: The Borrower has incurred a year-to-date pre-tax
loss of $897,674 as of September 30, 1999.
B. The breaches of these covenants constitute Events of
Default as defined in the Agreement. Based upon such Events of Defaults, Lender
has the right to immediately exercise all remedies provided in the Agreement.
C. Borrower has proposed that Lender waive the defaults
described above.
D. Lender is willing to grant Borrower's request, subject to
and upon the terms and conditions set forth below.
TERMS AND CONDITIONS
1. Acknowledgements. Borrower acknowledges that:
(a) Borrower's breach of each of the covenants
described in Recital A above each constitutes an Event of Default under the
Agreement.
(b) Borrower has no defense, claim or offset,
deduction or recoupment with respect to any of the Liabilities, and no
counterclaims which would reduce the amount owing to Lender.
(c) All terms, covenants, conditions and obligations
contained in the Agreement and the Other Agreements are fully valid, binding and
enforceable in accordance with their terms.
2. Waiver. Lender hereby waives the Events of Default
described in Recital A; provided, however, this waiver will not excuse or
diminish Borrower's obligations under the Agreement and the Other Agreements
following the date of this waiver. If Borrower fails to comply with the terms
and conditions set forth in this Waiver and Amendment, the Agreement as amended
by this Waiver and Amendment, and the Other Agreements, or if there is any
adverse change in Borrower's Tangible Net Worth or financial condition or if any
other Event of Default occurs, Lender will have the right, immediately and
without notice to Borrower, to exercise each and every one of its rights and
remedies.
3. Amendments to the Agreement.
Borrower and Lender agree to amend the Agreement as follows:
(a) The definition of "Inventory Advance Rate" in
paragraph 1 of the Agreement is deleted in its entirety, and hereafter, Lender
will not make any advances against Borrower's Eligible Inventory.
(b) The definition of Revolving Loan Facility" in
paragraph 1 of the Agreement is amended to read as follows:
"'Revolving Loan Facility' shall mean the sum of $2,000,000."
(c) The second sentence of paragraph 5(a) of the
Agreement is amended to read as follows:
"Interest shall accrue on the principal amount of the
Revolving Loans made to Borrower outstanding at the end of
each day at a fluctuating rate per annum equal to three and
three-quarters percent (3.75%) above the Prime Rate.
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(d) Paragraph 12 of the Agreement is amended to read
as follows:
"12. TERMINATION.
"Unless the due date of the Liabilities is
accelerated pursuant to paragraph 17 shall be in effect from
the date hereof until January 31, 2000 at which time Borrower
shall pay all of the Liabilities in full. Lender does not
intend to extend the term of this Agreement after January 31,
2000. If the due date of the Liabilities is accelerated as
provided above, this Agreement shall terminate on the date
thereafter that the Liabilities are paid in full and the
security interests and liens created under this Agreement and
the Other Agreements shall survive such termination until the
date upon which payment and satisfaction in full of the
Liabilities shall have occurred. At such time as Borrower has
repaid all of the Liabilities and this Agreement has
terminated, (A) Borrower shall deliver to LaSalle a release,
in form and substance reasonably satisfactory to LaSalle, of
all obligations and liabilities of LaSalle and its officers,
directors, employees, agents, parents, subsidiaries and
affiliates to Borrower, and if Borrower is obtaining new
financing from another lender, Borrower shall deliver such
lender's indemnification of LaSalle, in form and substance
satisfactory to LaSalle, for checks which LaSalle has credited
to Borrower's account, but which subsequently are dishonored
for any reason and (B) upon Borrower's request, LaSalle shall
deliver to Borrower a release in form and substance reasonably
satisfactory to Borrower."
(e) Paragraph 14(u) of the Agreement is amended to
read as follows:
"(u) Borrower shall not make any payments of either principal
or interest to any of the following persons: (a) Scitex; or
(b) the holders of Borrower's 6% Senior Subordinated
Convertible Notes."
4. Accommodation Fee. For and in consideration of the waiver
and other accommodations reflected in this Waiver and Amendment, including
without limitation, the deletion of a prepayment fee, any Borrower shall pay to
LaSalle an accommodation fee of $45,000 in two installments. The first
installment, in the amount of $5,000, is due and payable upon the execution and
delivery of this Amendment. The second installment, in the amount of $40,000, is
due and payable on January 31, 2000 unless Borrower pays all Liabilities in full
and terminates all of Borrower's rights under the Agreement. If Borrower pays
all Liabilities in full and terminates all of its rights under the Agreement on
or before January 31, 2000, Lender will waive the payment of the final $40,000
installment of the accommodation fee described in this paragraph.
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5. Costs and Fees. Borrower shall pay all expenses, including
attorney fees, which LaSalle incurs in connection with the preparation of this
Amendment, and any related documents. All such fees and expenses may be charged
against Borrower's loan account.
6. Additional Representations and Warranties. To induce
LaSalle to enter into this Amendment, Borrower makes the following
representations and warranties:
(a) Each recital, representation and warranty
contained in this Amendment, in the Agreement as amended by this Amendment and
in the Other Agreements, are true and correct as of the date of this Amendment
and do not omit to state a material fact required to make those recitals,
representations and warranties not misleading.
(b) Except as described in Recital A above, no event
has occurred and is continuing which constitutes or would, with the giving of
notice, the passage of time or both, constitute an Event of Default under the
Agreement or any of the Other Agreements.
(c) This Amendment has been approved by all necessary
corporate action, and the individuals signing below represent and warrant that
they are fully authorized to do so.
7. Effect on Rest of Agreement and Other Agreements. Except as
specifically provided above, the Agreement and the Other Agreements remain fully
valid, binding and enforceable according to their terms.
8. Waivers. Borrower waives any and all defenses, claims,
counterclaims and offsets against LaSalle which may have arisen or accrued
through the date of this Amendment. Borrower acknowledges that LaSalle and its
employees, agents and attorneys have made no representations or promises except
as specifically reflected in this Amendment and in the written agreements which
have been previously executed. Borrower and each Guarantor hereby waives any and
all defenses, claims, counterclaims and offsets against LaSalle which may have
arisen or accrued through the date of this Amendment.
9. Effective Date. This Waiver and Amendment will not become
effective until:
(a) Borrower has executed this Waiver and Amendment
and delivered it to Lender;
(b) Borrower has delivered to Lender the
accommodation fee described in Section 4 above; and
(c) Borrower has delivered to Lender a copy of a
waiver of all defaults under Borrower's 6% Senior Subordinated Convertible Notes
that has been signed by American Bankers Insurance Group, Inc.
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UNDER OREGON LAW, MOST AGREEMENTS, PROMISES AND COMMITMENTS
MADE BY BORROWER AFTER OCTOBER 3, 1989 CONCERNING LOANS AND
OTHER CREDIT EXENTIONS ARE NOT FOR PERSONAL, FAMILY OR
HOUSEHOLD PURPOSES OR SECURED SOLELY BY BORROWER'S RESIDENCE
MUST BE IN WRITING, EXPRESS CONSIDERATION AND BE SIGNED BY
LENDER TO BE ENFORCEABLE.
ACCOM, INC.
By: /s/ DONALD K. McCAULEY
-------------------------------------
(Donald K. McCauley)
Title: Sr. VP, Finance and Chief Financial Officer
LASALLE BUSINESS CREDIT, INC.
By: /s/ ROBERT C. ALEXANDER
-------------------------------------
(Robert C. Alexander)
Title: VP & Senior Loan Officer
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