Exhibit 10.1
FIRST AMENDMENT TO CREDIT AGREEMENT
This FIRST AMENDMENT TO CREDIT AGREEMENT ("Amendment") is
dated as of June 11, 2004 by and among All American Semiconductor, Inc., a
Delaware corporation (the "Company"), Harris Trust and Savings Bank, as
Administrative Agent (the "Agent"), U.S. Bank National Association, as Co-Agent
(the "Co-Agent") and the lenders from time to time party thereto (the
"Lenders").
WHEREAS, the Company, the Agent, the Co-Agent and the Lenders
are parties to a certain Credit Agreement dated as of May 14, 2003 (as such
agreement may have been or may hereafter be amended, supplemented or otherwise
modified from time to time, the "Credit Agreement"); and
WHEREAS, the Company has requested that the Agent and the
Lenders agree to amend certain provisions of the Credit Agreement, as more
particularly set forth herein;
NOW THEREFORE, in consideration of the mutual conditions and
agreements set forth in the Credit Agreement and this Amendment, and other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto hereby agree as follows:
1. Definitions. Capitalized terms used in this
Amendment, unless otherwise defined herein, shall have the meanings ascribed to
such terms in the Credit Agreement.
2. Amendments. Subject to prior satisfaction of the
conditions set forth in Section 3 below and in reliance on the representations
and warranties set forth in Section 4 below, the Credit Agreement is hereby
amended as follows:
(a) Clause (b) of the definition of "Borrowing Base" set
forth in Section 5.1 (Definitions) of the Credit Agreement is hereby amended and
restated in its entirety as follows:
"(b) the least of (i) $45,000,000, (ii) up to 40% of the value
(computed at the lower of market or cost using the first-in first-out
method of Inventory valuation applied by the Borrower in accordance
with GAAP but excluding from any such value inventoriable variances
(defined herein to mean that portion of capitalized overhead costs
which represent the portion of such costs in excess of standard
overhead costs which are needed to state the Borrower's Inventory at
actual FIFO cost and intercompany profits associated with intercompany
sales) of Eligible Inventory and (iii) 100% of the amount derived
pursuant to clause (a) above;"
(b) Clause (d) of the definition of "Eligible
Receivables" set forth in Section 5.1 (Definitions) of the Credit Agreement is
hereby amended and restated in its entirety as follows:
"(d) it has not remained unpaid in whole or in part more than
90 days from and after its invoice date; or, in the case of an
aggregate amount of up to $3,000,000 of Receivables subject to 30 to 60
day extended payment terms, it has not remained unpaid in whole or in
part more than 120 days after its invoice date;"
(c) The proviso contained in clause (g) of the definition
of "Eligible Receivables" set forth in Section 5.1 (Definitions) of the Credit
Agreement is hereby amended and restated in its entirety as follows:
"provided, that the Administrative Agent agrees to consider on
a case-by-case basis, in its reasonable business judgment, treating as
Eligible Receivables those Receivables owing from Account Debtors that
are multinational corporations operating in industrialized countries
outside of the United States or Canada (other than the Province of
Quebec) up to an aggregate amount of (x) $8,000,000 during the period
from June 11, 2004 through and including November 11, 2004 and (y)
$3,000,000 at all times thereafter;"
(d) A new definition of "First Amendment" is hereby
inserted into Section 5.1 (Definitions) of the Credit Agreement, in appropriate
alphabetical order, as follows:
"First Amendment" means that certain First Amendment to Credit
Agreement dated as of June 11, 2004 among the Company, the
Administrative Agent, the Co-Agent and the Lenders.
(e) The definition of "Revolving Credit Commitment" in
Section 5.1 (Definitions) of the Credit Agreement is hereby amended and restated
in its entirety as follows:
"Revolving Credit Commitment" means, as to any Lender, the
obligation of such Lender to make Revolving Loans and to participate in
Letters of Credit issued for the account of the Borrower hereunder in
an aggregate principal or face amount at any one time outstanding not
to exceed the amount set forth opposite such Lender's name on Schedule
1 attached hereto and made a part hereof, as the same may be reduced or
modified at any time or from time to time pursuant to the terms hereof.
The Borrower and the Lenders acknowledge and agree that the Revolving
Credit Commitments of the Lenders aggregate $85,000,000 on the date
hereof.
(f) Clause (g) of Section 8.9 (Investments, Acquisitions,
Loans and Advances) of the Credit Agreement is hereby amended and restated in
its entirety as follows:
"(g) intercompany advances and capital contributions made from
time to time by the Borrower to AASI UK, at a time when no Event of
Default is in existence (unless otherwise agreed by the Required
Lenders), in an aggregate amount not to exceed $2,500,000 at any time
outstanding;"
(g) Clause (n) of Section 8.9 (Investments, Acquisitions,
Loans and Advances) of the Credit Agreement is hereby amended and restated in
its entirety as follows:
"(n) intercompany advances, capital contributions and other
investments made from time to time by the Borrower to AASI Korea, at a
time when no Event of Default is in existence (unless otherwise agreed
by the Required Lenders), in an aggregate amount not to exceed
$2,500,000 at any time outstanding; and;"
(h) Clause (o) of Section 8.9 (Investments, Acquisitions,
Loans and Advances) of the Credit Agreement is hereby amended and restated in
its entirety as follows:
"(o) intercompany advances, capital contributions and other
investments made from time to time by the Borrower to a Foreign
Subsidiary other than AASI UK, AASI Mexico or AASI Korea at a time when
no Event of Default is in existence (unless otherwise agreed by the
Required Lenders), in an aggregate amount not to exceed $5,000,000 at
any time outstanding."
(i) Section 8.21 (Subordinated Debt) of the Credit
Agreement is hereby amended and restated in its entirety as follows:
"Section 8.21. Subordinated Debt.
No Designated Company shall amend or modify any of the terms
or conditions relating to Subordinated Debt or make any voluntary
repayment thereof or effect any voluntary redemption thereof or make
any payment on account of Subordinated Debt which is prohibited under
the terms of any instrument or agreement subordinating the same to the
Obligations; provided that, notwithstanding the foregoing, the Borrower
may repay up to $5,150,000 of the 1994 Debt at its maturity on June 13,
2004, so long as (a) no Event of Default or Default is then in
existence or would be caused after giving affect thereto and (b)
average weekly Excess Availability for the one (1) month period
preceding the consummation of such repayment (calculated as if the
First Amendment was effective as of May 1, 2004), as reflected in the
recalculated Borrowing Base Certificates delivered by the Borrower for
the weeks ended May 14, 2004, May 21, 2004, May 28,
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2004 and June 4, 2004, is equal to at least $10,000,000 and Excess
Availability immediately after such repayment is equal to at least
$7,000,000."
(j) Schedule 1 (Revolving Credit Commitments) to the
Credit Agreement is hereby amended and restated in its entirety as set forth on
Exhibit A attached hereto.
3. Conditions. The effectiveness of this Amendment is
subject to the following conditions precedent:
(a) The Company shall have executed and delivered this
Amendment, together with such other documents, agreements and instruments as
Agent may require, each in form and substance satisfactory to Agent, including,
without limitation, each Reaffirmation of Guaranty attached hereto,
fully-executed Amended and Restated Revolving Notes ("A/R Notes") issued to each
Lender in an aggregate principal amount of $85,000,000, fully-executed certified
board resolutions of the Company authorizing the execution of this Amendment and
the A/R Notes, a good standing certificate of the Company from the State of
Delaware, the Company's Certificate of Incorporation certified by the State of
Delaware, and a legal opinion issued by the Company's counsel;
(b) no Default or Event of Default shall have occurred
and be continuing; and
(c) the Company shall have paid to the Agent, for the pro
rata benefit of the Lenders whose Revolving Credit Commitments increased as a
result of the First Amendment, in proportion to the amount of such increases, an
amendment fee equal to $100,000.
4. Representations and Warranties. To induce the Agent
and the Lenders to enter into this Amendment, the Company represents and
warrants to the Agent and the Lenders that (a) the execution, delivery and
performance of this Amendment has been duly authorized by all requisite
corporate action on the part of the Company and that this Amendment has been
duly executed and delivered by the Company, (b) each of the representations and
warranties set forth in Section 6 of the Credit Agreement (other than those
which, by their terms, specifically are made as of a certain date prior to the
date hereof) are true and correct in all material respects as of the date hereof
and after giving effect to the terms hereof, and (c) no Default or Event of
Default shall have occurred and be continuing before or immediately after giving
effect to this Amendment.
5. References. Any reference to the Credit Agreement
contained in any document, instrument or agreement executed in connection with
the Credit Agreement shall be deemed to be a reference to the Credit Agreement
as modified by this Amendment.
6. Severability; Counterparts. Any provision of this
Amendment held by a court of competent jurisdiction to be invalid or
unenforceable shall not impair or invalidate the remainder of this Amendment and
the effect thereof shall be confined to the provision so held to be invalid or
unenforceable. This Amendment may be executed in one or more counterparts, each
of which shall constitute an original, but all of which taken together shall be
one and the same instrument.
7. Ratification. The terms and provisions set forth in
this Amendment shall modify and supersede all inconsistent terms and provisions
of the Credit Agreement and shall not be deemed to be a consent to the
modification or waiver of any other term or condition of the Credit Agreement.
Except as expressly modified and superseded by this Amendment, the terms and
provisions of the Credit Agreement are ratified and confirmed and shall continue
in full force and effect.
8. Return of Revolving Notes. Each Lender agrees that
promptly after the effectiveness of this Amendment and delivery to such Lender
of the applicable A/R Note, it shall deliver to Agent, and Agent shall promptly
deliver to the Company for cancellation, such Lender's existing Revolving Note.
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IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be duly executed under seal and delivered by their respective duly
authorized officers on the date first written above.
ALL AMERICAN SEMICONDUCTOR, INC.,
a Delaware corporation
By: /s/ BRUCE M. GOLDBERG
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Name: Bruce M. Goldberg
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Title: President & CEO
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HARRIS TRUST AND SAVINGS BANK, as
Administrative Agent and as a Lender
By: /s/ WILLIAM J. KANE
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Name: William J. Kane
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Title: Vice President
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U.S. BANK NATIONAL ASSOCIATION, as Co-Agent
and as a Lender
By: /s/ THOMAS VISCONTI
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Name: Thomas Visconti
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Title: Vice President
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GMAC COMMERCIAL FINANCE LLC, as a Lender
By: /s/ PAMELA D. PETRICK
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Name: Pamela D. Petrick
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Title: Vice President
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PNC BANK, NATIONAL ASSOCIATION, as a Lender
By: /s/ LEE LABINE
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Name: Lee Labine
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Title: Vice President
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EXHIBIT A
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SCHEDULE I TO CREDIT AGREEMENT
Revolving Credit Commitments
NAME OF LENDER REVOLVING CREDIT COMMITMENT
Harris Trust and Savings Bank $25,000,000.00
U.S. Bank National Association $20,000,000.00
GMAC Commercial Finance LLC $20,000,000.00
PNC Bank, National Association $20,000,000.00
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TOTAL $85,000,000.00
REAFFIRMATION OF GUARANTY
In order to induce Harris Trust and Savings Bank, as
Administrative Agent ("Agent") for various lenders ("Lenders"), and Lenders to
execute and deliver that certain First Amendment to Credit Agreement of even
date herewith (the "Amendment"), each of the undersigned hereby reaffirms its
obligations under that certain Master Corporate Guaranty dated as of May 14,
2003 by it favor of Agent (the "Guaranty"). Capitalized terms used herein
without definition shall have the meanings ascribed to such terms in the Credit
Agreement dated as of May 14, 2003 by and among Agent, Lenders and All American
Semiconductor, Inc. (as the same has been, and may be from time to time,
amended, supplemented or otherwise modified, the "Credit Agreement").
Each of the undersigned further agrees that the Guaranty shall
remain in full force and effect following the execution and delivery of the
Amendment and that all references to the "Credit Agreement" in the Guaranty
executed by it shall be deemed to refer to the Credit Agreement as amended by
the Amendment. Except as set forth in the immediately preceding sentence, the
Guaranty shall remain unmodified and in full force and effect.
This Reaffirmation of Guaranty is dated as of June 11, 2004.
Access Micro Products, Inc.
All American A.V.E.D., Inc.
All American Added Value, Inc.
All American Semiconductor of Atlanta, Inc.
All American Semiconductor of Chicago, Inc.
All American Semiconductor of Florida, Inc.
All American Semiconductor of Huntsville, Inc.
All American Semiconductor of Massachusetts, Inc.
All American Semiconductor of Michigan, Inc.
All American Semiconductor of Minnesota, Inc.
All American Semiconductor of New York, Inc.
All American Semiconductor of Philadelphia, Inc.
All American Semiconductor of Phoenix, Inc.
All American Semiconductor of Portland, Inc.
All American Semiconductor of Rockville, Inc.
All American Semiconductor of Salt Lake, Inc.
All American Semiconductor of Texas, Inc.
All American Semiconductor-Northern California, Inc.
All American Semiconductor of Washington, Inc.
All American Technologies, Inc.
All American Transistor of California, Inc.
Aved Industries, Inc.
Palm Electronics Manufacturing Corp.
All American Semiconductor of Ohio, Inc.
All American Semiconductor of Wisconsin, Inc.
All American Semiconductor of Rhode Island, Inc.
All American IDT, Inc.
Each by: /s/ BRUCE M. GOLDBERG
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Its: President
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AMERICAPITAL, LLC
By: All American Semiconductor, Inc.,
its sole member
By: /s/ BRUCE M. GOLDBERG
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Its: President & CEO
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REAFFIRMATION OF GUARANTY
In order to induce Harris Trust and Savings Bank, as
Administrative Agent ("Agent") for various lenders ("Lenders"), and Lenders to
execute and deliver that certain First Amendment to Credit Agreement of even
date herewith (the "Amendment"), the undersigned hereby reaffirms its
obligations under that certain Corporate Guaranty and Covenant dated as of May
14, 2003 by it favor of Agent (the "Guaranty"). Capitalized terms used herein
without definition shall have the meanings ascribed to such terms in the Credit
Agreement dated as of May 14, 2003 by and among Agent, Lenders and All American
Semiconductor, Inc. (as the same has been, and may be from time to time,
amended, supplemented or otherwise modified, the "Credit Agreement").
The undersigned further agrees that the Guaranty shall remain
in full force and effect following the execution and delivery of the Amendment
and that all references to the "Credit Agreement" in the Guaranty executed by it
shall be deemed to refer to the Credit Agreement as amended by the Amendment.
Except as set forth in the immediately preceding sentence, the Guaranty shall
remain unmodified and in full force and effect.
This Reaffirmation of Guaranty is dated as of June 11, 2004.
ALL AMERICAN SEMICONDUCTOR OF CANADA, INC.
By: /s/ BRUCE M. GOLDBERG
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Its: President
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