Exhibit 10.1
FORBEARANCE AGREEMENT
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This FORBEARANCE AGREEMENT (this "Agreement") is entered into
as of this 29th day of March, 2007, by and among All American Semiconductor,
Inc., a Delaware corporation (the "Borrower"), the other "Designated Companies,"
Harris N.A., successor by merger to Harris Trust and Savings Bank, as
administrative agent for the Lenders (in such capacity, the "Administrative
Agent"), U.S. Bank National Association, as co-administrative agent for the
Lenders (the "Co-Administrative Agent"), and the lenders from time to time party
thereto (collectively, the "Lenders"). Capitalized terms used but not otherwise
defined herein shall have the respective meanings ascribed to such terms in the
Credit Agreement (as hereinafter defined).
WHEREAS, the Borrower, the Administrative Agent, the
Co-Administrative Agent and the Lenders are parties to that certain Credit
Agreement, dated as of May 14, 2003 (as amended, restated or otherwise modified
from time to time, including, without limitation, pursuant to this Agreement,
the "Credit Agreement"), as amended by that certain First Amendment to Credit
Agreement dated as of June 11, 2004, as amended by that certain Second Amendment
to Credit Agreement dated as of August 8, 2005, as amended by that certain Third
Amendment to Credit Agreement dated as of March 31, 2006, as amended by that
certain Fourth Amendment to Credit Agreement dated as of May 22, 2006, as
amended by that certain Fifth Amendment to Credit Agreement dated as of August
14, 2006, and as amended by that certain Sixth Amendment to Credit Agreement
dated as of November 14, 2006; and
WHEREAS, the Events of Default listed as "Current Defaults" on
Exhibit A attached hereto have occurred and are continuing under the Credit
Agreement as of the date hereof (the "Current Defaults"), and the Events of
Default listed as "Anticipated Defaults" on Exhibit A attached hereto are
expected to occur and continue under the Credit Agreement during the Forbearance
Period (as defined below) (if, as and when they become Events of Default, the
"Anticipated Defaults," and together with the Current Defaults, the "Specified
Defaults");
WHEREAS, the Borrower has advised the Administrative Agent
that it has been in discussions with product vendors from which it intends to
purchase Inventory and/or obtain value-added services during the Forbearance
Period (collectively, the "Product Vendors") and that as of the date hereof
certain of the Product Vendors have agreed in principle to continue to deliver
new Inventory or provide additional value-added services, as applicable, to
Borrower during the Forbearance Period pursuant to "cash on delivery" or "cash
in advance" payment terms.
WHEREAS, the Borrower has requested that Administrative Agent,
Co-Administrative Agent and Lenders agree, notwithstanding the existence or, as
the case may be, the occurrence during the Forbearance Period of the Specified
Defaults, to (i) forbear from exercising certain of their default-related rights
and remedies under the Credit Agreement, other Loan Documents and applicable law
through and including April 15, 2007; and (ii) continue to make, and permit to
remain outstanding, certain additional Revolving Loans to Borrower during the
Forbearance Period (as defined below); and
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WHEREAS, Administrative Agent, Co-Administrative Agent and
Lenders are willing to continue to forbear and extend additional credit in the
form of Revolving Loans to Borrower, in each case subject to the terms and
conditions set forth herein.
NOW THEREFORE, in consideration of the mutual conditions and
agreements set forth in the Credit Agreement and this Agreement, and for other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto hereby agree as follows:
Confirmation of Obligations and Specified Defaults.
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Borrower and each other Designated Company acknowledges and
agrees that as of the close of business on March 27, 2007, the aggregate
principal balance of the outstanding Obligations under the Credit Agreement was
not less than $55,984,645.86, broken down as follows:
Revolving Loans (excluding L/C Obligations): $54,984,645.86
L/C Obligations: $1,000,000.00
The foregoing amounts do not include interest, fees, expenses and other amounts
which are chargeable or otherwise reimbursable under the Credit Agreement and
the other Loan Documents.
Borrower and each other Designated Company acknowledges and
agrees that each of the Current Defaults constitutes a material Event of Default
that has occurred and is continuing as of the date hereof, and each of the
Anticipated Defaults is expected to occur and continue during the Forbearance
Period, as the case may be. Prior to the effectiveness of this Agreement, the
existence of the Specified Defaults (i) upon the direction of the Required
Lenders to the extent provided in the Credit Agreement would have relieved
Administrative Agent and Lenders from any obligation to extend any Loan or
provide any other financial accommodation to Borrower under the Credit Agreement
or other Loan Documents (including consenting to Borrower's use of cash
collateral), and (ii) upon the direction of the Required Lenders to the extent
provided in the Credit Agreement would have permitted Administrative Agent and
Lenders to, among other things, (A) suspend or terminate any commitment to
provide Loans or make other extensions of credit under any or all of the Credit
Agreement and the other Loan Documents, (B) accelerate all or any portion of the
Obligations, (C) continue to charge, and demand immediate payment of, interest
with respect to any and all of the Obligations at the default rate to the
fullest extent permitted under Section 1.10 of the Credit Agreement, (D)
commence any legal or other action to collect any or all of the Obligations from
Borrower, any other Designated Company and/or any Collateral or any other
property as to which any other Person granted Administrative Agent or any Lender
a security interest therein as security for the Obligations or any guaranty
thereof (collectively, the "Other Collateral"), (E) foreclose or otherwise
realize on any or all of the Collateral and Other Collateral, and/or
appropriate, set-off and apply to the payment of any or all of the Obligations,
any or all of the Collateral and Other Collateral, and/or (F) take any other
enforcement action or otherwise exercise any or all rights and remedies provided
for by any or all of the Credit Agreement, the other Loan Documents or
applicable law.
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Forbearance; Forbearance Default Rights and Remedies.
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Effective as of the Forbearance Effective Date (as defined
below), Administrative Agent, Co-Administrative Agent and each Lender agrees
that until the expiration or termination of the Forbearance Period as provided
herein, it will forbear from exercising its default-related rights and remedies
against Borrower or any other Designated Company and its or their respective
Collateral and other property solely with respect to the Specified Defaults;
provided, however:
except as otherwise expressly provided in Section 3(c) hereof,
the Specified Defaults shall continue to constitute actionable Events
of Default for the purpose of triggering all limitations, restrictions
or prohibitions on certain actions that may be taken or omitted or
otherwise acquiesced to, by or on behalf of, the Borrower or any other
Designated Company pursuant to the Credit Agreement or any other Loan
Document, including, without limitation, any limitations, restrictions
or prohibitions with respect to any distribution, advance or other
payment from Borrower or any other Designated Company to any other
Designated Company, any direct or indirect owner of an equity interest
in Borrower or any other Designated Company or any Affiliate of any of
the foregoing; and any actions or inactions taken or omitted or
otherwise acquiesced to, by or on behalf of, any Borrower or any other
Designated Company in violation of such provisions while any Event of
Default (including any Specified Default) exists will constitute
additional Events of Default under the Credit Agreement and the other
Loan Documents, as well as a Forbearance Default (as defined below)
under this Agreement;
nothing herein shall restrict, impair or otherwise affect
Administrative Agent's or any Lender's rights and remedies under any
blocked account, control account, bank agency, lock box or similar
agreement to which Administrative Agent is a party relating to any
deposit or other account of Borrower or any other Designated Company;
provided, that notwithstanding the provisions of Section 3.1(c) of the
Credit Agreement, during the Forbearance Period the provisions of
Section 3.1(b) of the Credit Agreement shall, unless otherwise
expressly provided herein (including, without limitation, in Section
3(a) hereof), govern the application of funds and other Collateral
proceeds deposited or held in the lock boxes and deposit and other
accounts governed by such blocked account, control account, bank
agency, lock box or similar agreements; and
(iii) nothing herein shall restrict, impair or otherwise
affect Administrative Agent's or any Lender's right to file, record,
publish or deliver a notice of default or document of similar effect,
except for Specified Defaults during the Forbearance Period unless a
Forbearance Default has occurred.
As used herein, the term "Forbearance Period" shall mean the
period beginning on the Forbearance Effective Date and ending on the earlier to
occur of: (i) any Forbearance Default (as hereinafter defined), or (ii) April
15, 2007. As used herein, the term "Forbearance Default" shall mean any of: (A)
the occurrence of any Default or Event of Default other than the Specified
Defaults, (B) the failure of Borrower or any other Designated Company to timely
and strictly comply with any term, condition, covenant, agreement or other
obligation set forth in this Agreement, (C) the failure of any representation or
warranty made by Borrower or any other Designated Company under or in connection
with this Agreement to be true and complete in all material respects as of the
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date when made or any other material breach of any such representation or
warranty, (D) the taking of any action by Borrower or any other Designated
Company to in any way repudiate or assert a defense to any Obligation under the
Credit Agreement, this Agreement or any of the other Loan Documents or the
assertion of any claim or cause of action against Administrative Agent,
Co-Administrative Agent or any Lender relating in any way thereto, (E) the date
on which Administrative Agent, in its sole discretion or at the direction of the
Required Lenders, delivers to Borrower a written notice terminating the
Forbearance Period, which notice may be delivered at any time upon or after the
delivery of any Proposed Vendor Payment Schedule Rejection Notice (as defined
below) by the Administrative Agent in accordance with Section 3(c)(ii) hereof,
or (F) Borrower fails to receive Inventory purchased with a CIA Payment (as
defined below) within six (6) Business Days of the making of such CIA Payment.
The occurrence of any Forbearance Default shall constitute an immediate Event of
Default under the Credit Agreement and other Loan Documents.
Upon the termination or expiration of the Forbearance Period,
the agreement of Administrative Agent, Co-Administrative Agent and each Lender
hereunder to forbear from exercising its default-related rights and remedies
shall immediately terminate without the requirement of any demand, presentment,
protest, or notice of any kind, all of which Borrower and each other Designated
Company hereby waives. Borrower and each other Designated Company further agrees
that any of Administrative Agent (upon direction of the Required Lenders to the
extent provided in the Credit Agreement) and each Lender may at any time after
the expiration or termination of the Forbearance Period proceed to exercise any
and all of its rights and remedies under any or all of the Credit Agreement, any
other Loan Document and/or applicable law, all of which rights and remedies are
hereby fully reserved by Administrative Agent and each Lender.
Any agreement by Administrative Agent and the Lenders to
extend the Forbearance Period, if any, must be set forth in writing and signed
by Administrative Agent and the Lenders. Borrower and each other Designated
Company acknowledges that none of Administrative Agent or any Lender has made
any assurances concerning any possibility of any extension of the Forbearance
Period.
Borrower and each other Designated Company acknowledges and
agrees that any Loan or other financial accommodation which Administrative
Agent, Co-Administrative Agent or any Lender makes to or for the benefit of
Borrower or any other Designated Company on or after the Forbearance Effective
Date has been made by such party in reliance upon, and is consideration for,
among other things, the general releases and indemnities contained in Section 5
hereof and the other covenants, agreements, representations and warranties of
Borrower and each other Designated Company hereunder.
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Supplemental Terms, Conditions and Covenants During the Forbearance Period.
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The parties hereto hereby agree to comply with the following
terms, conditions, covenants, agreements and other obligations in each case
notwithstanding any provision to the contrary set forth in this Agreement, the
Credit Agreement or any other Loan Document, including, without limitation,
Sections 1.1 and 7.1 of the Credit Agreement:
Immediate Termination of Eurodollar Loans and Adjusted LIBOR
Option. Upon the effectiveness of this Agreement, Administrative Agent shall
have the right to immediately convert any and all Eurodollar Loans into Base
Rate Loans (regardless of when the Interest Period with respect to each such
Eurodollar Loan would have otherwise expired by its terms). Borrower irrevocably
authorizes the Lenders with Revolving Loan Commitments to make a Revolving Loan
to Borrower in an amount (the "LIBOR Breakage Amount") not greater than
$1,200,000.00 to pay: (i) all interest due and owing to Administrative Agent and
the Lenders in respect of such Eurodollar Loans as a result of such conversion
plus (ii) any Eurodollar Loan breakage fee and all other costs and expenses
incurred by Administrative Agent and Lenders in connection with such conversion.
Borrower further irrevocably authorizes and directs the proceeds of such
Revolving Loan to be immediately and directly applied by Administrative Agent
(in lieu of being remitted to Borrower) to fund the LIBOR Breakage Amount. From
and after the Forbearance Effective Date, Borrower shall not be permitted to
borrow, continue or convert any Loan as a Eurodollar Loan.
Delivery of Weekly Proposed Vendor Payment Schedules. On March
30, 2007 and on or prior to each Thursday thereafter during the Forbearance
Period, Borrower shall prepare and deliver to Administrative Agent a schedule in
the form attached hereto as Exhibit B, which sets forth each and every product
vendor payment that Borrower proposes to make during the immediately following
week in accordance with the Forbearance Budget (as defined below) (each, a
"Proposed Vender Payment Schedule").
Permitted Forbearance Overadvances. Subject to Section 3(a)
hereof, each Lender severally agrees, solely during the Forbearance Period, to
make additional Revolving Loans to Borrower up to the amount of such Lender's
Revolving Credit Commitment and in proportion to its Revolver Percentage (each,
a "Permitted Forbearance Overadvance"), in each case subject to the satisfaction
of all the following terms and conditions as determined by Administrative Agent
in its sole discretion:
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Administrative Agent shall have received a written request for
each such Borrowing to be made pursuant to this Section 3(c) prior to
1:00 p.m. prevailing Central time on such date, and such request shall
be accompanied by a Borrowing Base Certificate calculating the
Borrowing Base (which shall include the $1,500,000 of Excess
Availability required pursuant to Section 8.22(g) of the Credit
Agreement) in reasonable detail as at the close of business on the
immediately preceding Business Day. Both the Eligible Receivables and
Eligible Inventory components of each such Borrowing Base shall be
determined as at the close of business on the immediately preceding
Business Day; provided, however, that (A) the determination of whether
a Receivable is an Eligible Receivable shall be determined as currently
being done under the Credit Agreement, and (B) the Eligible Inventory
component as at each Business Day, subject to true-up on or prior to
the fifth Business Day of each week using actual Eligible Inventory
reflected on the then most recently delivered weekly Borrowing Base
Certificate pursuant to Section 8.5(a) of the Credit Agreement, shall
be equal to (a) the aggregate amount of Eligible Inventory for the
immediately preceding Business Day minus (b) the aggregate amount of
sales of Eligible Inventory booked by Borrower on the such immediately
preceding Business Day (less the aggregate amount of gross margin
associated therewith) plus (c) the aggregate amount of Eligible
Inventory purchased during such immediately preceding Business Day. For
the purpose of avoidance of doubt and without in any way limiting the
Credit Agreement, "in-transit" Inventory shall not be included in any
Borrowing Base calculated pursuant to this Agreement.
Solely with respect to that portion of any Permitted
Forbearance Overadvance to be used for product vendor payments,
Administrative Agent shall not have delivered to Borrower, prior to
12:00 p.m. prevailing Central time on Monday of such week, written
notice of the Lenders' refusal to consent to the use of any Loan or
Collateral proceeds to fund the payments reflected in the Proposed
Vendor Payment Schedule covering such week, which notice Administrative
Agent shall have the right to deliver in its sole discretion or at the
direction of Required Lenders in their sole discretion (each, a
"Proposed Vendor Payment Schedule Rejection Notice"); provided,
however, that if the Administrative Agent shall have timely delivered a
Proposed Vendor Payment Schedule Rejection Notice to Borrower with
respect to a Proposed Vendor Payment Schedule in accordance with this
subparagraph (ii), neither Administrative Agent nor any Lender shall
have any obligation under this Agreement, the Credit Agreement or
otherwise to fund any payments set forth on such Proposed Vendor
Payment Schedule.
The sum of the aggregate principal amount of all Revolving
Loans and L/C Obligations at any time outstanding shall not exceed the
lesser of: (i) the aggregate amount of all Lenders' Revolving Credit
Commitments in effect at such time, and (ii) the sum of (a) the
Borrowing Base in effect at such time and reflected on a Borrowing Base
Certificate delivered to Administrative Agent in accordance with
Section 3(c)(i) hereof, plus (b) an amount equal to (I) $9,850,000 at
all times from and including the Forbearance Effective Date through and
including March 30, 2007, (II) $9,520,000 at all times from and
including March 31, 2007 through and including April 6, 2007, and (III)
$10,640,000 at all times thereafter during the Forbearance Period
(clause (ii) is referred to herein as the "Permitted Forbearance
Overadvance Amount").
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All proceeds of Permitted Forbearance Overadvances shall be
used solely to pay the types of disbursements reflected in the
respective line items set forth in the Budget (which Borrower
represents it prepared in consultation with RAS Management Advisors,
Inc. and which shall be in form and substance acceptable to
Administrative Agent and Lenders) provided by the Borrower to the
Administrative Agent on the date hereof (the "Forbearance Budget"), and
at no time during the Forbearance Period shall Borrower make
disbursements (A) for any week that, in the aggregate, exceed the
aggregate disbursements for all line items set forth in the Forbearance
Budget for such week or (B) with respect to any particular line item
set forth in the Forbearance Budget for any week that exceed by more
than five percent (5%) the forecasted total disbursements with respect
to such line item for such week in the Forbearance Budget. On or prior
to the close of business on each Monday during the Forbearance Period,
Borrower shall prepare and deliver to Administrative Agent a
reconciliation of the projected cash receipts and disbursements for the
immediately preceding week set forth in the Forbearance Budget with the
actual cash receipts and disbursements for such week.
Provided that Administrative Agent does not timely deliver a
Proposed Vendor Payment Schedule Rejection Notice with respect to the
Proposed Vendor Payment Schedule covering any week, Borrower shall only
make payments to Product Vendors during such week if, and to the
extent, all of the following conditions precedent are satisfied to the
reasonable satisfaction of Administrative Agent: (a) each Product
Vendor and corresponding payment is listed in the Proposed Vendor
Payment Schedule for such week; (b) each such payment is made either
(I) in contemporaneous exchange for Inventory of equal or greater value
(i.e., pursuant to "cash on delivery" payment terms) (each, a "COD
Payment") or (II) in advance by wire transfer for Inventory of equal or
greater value (i.e., pursuant to "cash in advance" payment terms)
(each, a "CIA Payment") and is made subject to a written agreement
between the Borrower and such Product Vendor, in the form attached
hereto as Exhibit C or otherwise in form and substance acceptable to
the Administrative Agent in its sole discretion; and (c) all Inventory
being purchased by Borrower is at the time of ordering subject to
existing customer purchase orders and can be shipped to such customers
within two (2) Business Days of receipt; provided, however, that if
Inventory purchased by Borrower is, prior to delivery to a customer,
subject to the completion of services provided to Borrower by a
provider of value-added services, then such provider of value-added
services shall be deemed to be an additional Product Vendor with
respect to such Inventory and Borrower shall have no obligation to ship
such Inventory to its customer until two (2) Business Days after
receipt from such Product Vendor. For the avoidance of doubt, neither
Administrative Agent nor any Lender shall have any obligation under
this Agreement, the Credit Agreement or otherwise to fund any payment
set forth on any Proposed Vendor Payment Schedule that does not satisfy
all of the conditions precedent set forth in this Section 3(c)(v).
(vi) Neither Administrative Agent nor any Lender shall have
any obligation to make any Permitted Forbearance Overadvance to fund
any payment reflected in the Forbearance Budget that Borrower paid
prior to the date hereof.
(vii) No proceeds of any Collateral or any Permitted
Forbearance Overadvance may be used by Borrower or any other Designated
Company to pay any fees or expenses of legal counsel in connection with
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the investigation and/or assertion of or joinder in any claim,
counterclaim, action, proceeding, application, motion, objection,
defense or other contested matter, the purpose of which is to seek or
the result of which would be to obtain any order, judgment,
determination, declaration or similar relief: (A) invalidating, setting
aside, avoiding or subordinating, in whole or in part, any Obligations
or Administrative Agent's liens and security interests in any
Collateral; (B) for monetary, injunctive or other affirmative relief
against any or all of the Administrative Agent and any Lenders or the
Collateral; or (B) preventing, hindering or otherwise delaying the
exercise by any or all of the Administrative Agent and the Lenders of
any of their respective rights and remedies under this Agreement, any
other Loan Document or applicable law, or the enforcement or
realization (whether by foreclosure, credit bid, court order or
otherwise) by Administrative Agent or any Lender upon any Collateral.
Administrative Agent Access and Cooperation. In supplement to,
and without in any way limiting, the rights of Administrative Agent,
Co-Administrative Agent and the Lenders under the Credit Agreement and other
Loan Documents, Borrower and each other Designated Company hereby agrees to: (A)
give Administrative Agent and its Representatives (defined below) access to the
offices, properties, officers, employees, accountants, auditors, counsel and
other representatives, books and records of Borrower and the other Designated
Companies, (B) furnish to Administrative Agent and its Representatives such
financial, operating and property related data and other information as such
persons shall reasonably request, and (C) instruct Borrower's and any other
Designated Company's employees, accountants, auditors, counsel, financial
advisors (including, without limitation, Raymond James & Associates, Inc. and
RAS Management Advisors, Inc.) and other representatives to fully cooperate
with, and upon request regularly consult with, Administrative Agent and its
Representatives in respect of the aforementioned clauses (A) and (B)). For
purposes of this Agreement, the term "Representatives" shall mean Administrative
Agent's employees, agents, representatives, advisors and consultants, and any
financial advisor or consultant retained by Administrative Agent's counsel to
assist in the representation of Administrative Agent in connection with this
matter (including, without limitation, Giuliani Capital Advisors and its
members, employees and other representatives).
Immediate Repayment of Overadvances in Excess of Permitted
Forbearance Overadvances. If at any time the sum of the aggregate principal
amount of all Revolving Loans (including Permitted Forbearance Overadvances) and
L/C Obligations at any time outstanding shall be in excess of the sum of the
Permitted Forbearance Overadvance Amount, Borrower shall immediately and without
notice or demand pay over the full amount of the excess to the Administrative
Agent for the ratable account of the Lenders as and for a mandatory prepayment
on such Obligations, with each such prepayment being applied to the Obligations
as set forth in Section 1.9(v) of the Credit Agreement.
Letters of Credit. Borrower shall not have the right to
request, and none of Administrative Agent, any Lender or any L/C Issuer shall
have any obligation to issue or renew, any Letter of Credit during the
Forbearance Period; provided, however, nothing in this Section 3(f) shall
require termination of any Letter of Credit that was in effect as of the date
hereof.
Reduction of Revolving Credit Commitments. Upon the
effectiveness of this Agreement, Schedule 1 to the Credit Agreement, which sets
forth each Lender's Revolving Credit Commitment, is hereby amended by replacing
such Schedule in its entirety with Schedule 1 attached hereto.
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Payment of Administrative Agent and Lender Expenses. Without
in any way limiting any term or provision of the Credit Agreement (including,
without limitation, Sections 2.1 and 12.15 thereof), Borrower shall pay or
reimburse Administrative Agent, as applicable, for all fees and expenses
incurred by, or on behalf of, the Administrative Agent included in the
Forbearance Budget during the respective weeks in which such fees and expenses
are listed in the Forbearance Budget.
Imposition of Default Interest on all Obligations. From and
after the first occurrence of an Event of Default (which Borrower acknowledges
and agrees shall in no event be later than March 21, 2007) and at all times
during the continuance of any Event of Default (including, without limitation,
at all times during the Forbearance Period and after the expiration thereof
notwithstanding the existence of any Specified Default), all of the Obligations
shall bear interest at the applicable default rate specified in Section 1.10 of
the Credit Agreement.
Reporting of Forbearance Defaults. Promptly upon becoming
aware of the occurrence of any Forbearance Default, Borrower and each other
Designated Company shall promptly notify Administrative Agent of such
Forbearance Default in writing.
Appraisal Firms. On or prior to March 30, 2007, in connection
with its efforts to explore various strategic alternatives, Borrower shall
contact and enter into confidentiality agreements (copies of which shall be
delivered to Administrative Agent promptly upon request) with appraisal firms
satisfactory to the Administrative Agent in its sole discretion (each, an
"Appraiser," and collectively, the "Appraisers"), and request that each such
Appraiser submit an offer binding on such Appraiser to the Borrower for
Borrower's consideration with respect to the purchase or sale as agent of the
Borrower's and Designated Companies' assets and properties. Borrower and the
other Designated Companies shall use their reasonable best efforts to provide
each Appraiser the information and access necessary, and otherwise cooperate
with each Appraiser, so as to permit each Appraiser to submit such an offer to
the Borrower with respect to the purchase or sale as agent of the Borrower's and
Designated Companies' assets and properties on or prior to April 5, 2007.
Borrower agrees to provide Administrative Agent (for subsequent distribution to
the Lenders), promptly upon the receipt thereof, a copy of each proposal,
written expression of interest and offer received from each Appraiser.
Post-Forbearance Period Budget and Proposal. On or prior to
April 5, 2007, Borrower shall prepare and deliver to Administrative Agent and
Lenders a proposal and budget addressing how Borrower proposes to address its
funding requirements and current default situation upon expiration of the
Forbearance Period, which proposal and budget shall be based on assumptions
satisfactory to Administrative Agent in its sole discretion.
Forbearance Fee. In consideration for the execution and
delivery of this Agreement by the Administrative Agent and the Lenders, Borrower
agrees to pay to the Administrative Agent, for the benefit of the Lenders
according to their respective Revolver Percentages, a forbearance fee equal to
$100,000, which fee shall be fully earned upon the effectiveness of this
Agreement, shall be due and payable in immediately available funds upon
execution and delivery of this Agreement and shall be non-refundable upon its
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receipt by the Administrative Agent. Borrower irrevocably authorizes (i) the
Lenders to make a Revolving Loan to Borrower upon the expiration of the
Forbearance Period in the amount of such forbearance fee, and (ii)
Administrative Agent to remit the proceeds of such Revolving Loan directly to
the Lenders in accordance with their respective Revolver Percentages in payment
of such forbearance fee.
Reaffirmation of Guaranties. Each Designated Company hereby reaffirms its
obligations under the applicable Guaranty in favor of Administrative Agent (for
the benefit of itself and the Lenders) to which it is a party, and agrees that
such Guaranty shall remain in full force and effect following the execution and
delivery of this Agreement and shall secure all Obligations, including, without
limitation, all Permitted Forbearance Overadvances. All references to the
"Credit Agreement" in each such Guaranty shall be deemed to refer to the Credit
Agreement as amended or otherwise modified by this Agreement. Except as set
forth in the immediately preceding sentence, each such Guaranty shall remain
unmodified and in full force and effect.
General Release; Covenant Not to Sue.
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In consideration of, among other things, Administrative
Agent's and each Lender's execution and delivery of this Agreement, Borrower and
each other Designated Company, on behalf of itself and its agents,
representatives, officers, directors, advisors, employees, subsidiaries,
affiliates, successors and assigns (collectively, "Releasors"), hereby forever
waives, releases and discharges, to the fullest extent permitted by law, each
Releasee (as hereinafter defined) from any and all liens, claims, interests and
causes of action of any kind or nature (collectively, the "Claims") that such
Releasor now has or hereafter may have against Administrative Agent,
Co-Administrative Agent or any Lender in any capacity and their respective
affiliates, subsidiaries, shareholders and "controlling persons" (within the
meaning of the federal securities laws), and their respective successors and
assigns and each and all of the officers, directors, employees, agents,
attorneys and other representatives of each of the foregoing (collectively, the
"Releasees"), based on facts existing on or before the Forbearance Effective
Date that relate to: (i) any Loan Document, (ii) any transaction, action or
omission contemplated thereby, or (iii) any aspect of the dealings or
relationships between or among Borrower and the other Designated Companies, on
the one hand, and any of Administrative Agent, Co-Administrative Agent or any
Lender, on the other hand, relating to any Loan Document or transaction, action
or omission contemplated thereby. The receipt by Borrower or any other
Designated Company of any Loans or other financial accommodations made by
Administrative Agent or any Lender on or after the Forbearance Effective Date
shall constitute a ratification, adoption, and confirmation by such party of the
foregoing general release of all Claims against the Releasees which are based on
facts existing on or prior to the date of receipt of any such Loans or other
financial accommodations. The provisions of this Section shall survive the
termination of this Agreement, the Credit Agreement, the other Loan Documents
and payment in full of the Obligations.
Borrower and each other Designated Company, on behalf of
itself and its successors, assigns, and other legal representatives, hereby
unconditionally and irrevocably agrees that it will not sue any Releasee on the
basis of any Claim released, remised and discharged by Borrower or any other
Designated Company pursuant to Section 5(a) hereof. If Borrower, any other
Designated Company or any of its successors, assigns or other legal
representatives violates the foregoing covenant, Borrower and the other
10
Designated Companies, each for itself and its successors, assigns and legal
representatives, agrees to pay, in addition to such other damages as any
Releasee may sustain as a result of such violation, all attorneys' fees and
costs incurred by any Releasee as a result of such violation.
To the extent that, notwithstanding the Illinois choice of law
provisions in the Credit Agreement, this Agreement and the other Loan Documents,
California law is deemed to apply to the release and indemnification provisions
set forth herein, Borrower and each other Designated Company warrants,
represents and agrees that it is fully aware of California Civil Code Section
1542, which provides as follows:
SECTION 1542. GENERAL RELEASE. A GENERAL RELEASE DOES NOT
EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT
TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE
RELEASE, WHICH IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY
AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR.
Borrower and each other Designated Company hereby knowingly and voluntarily
waives and relinquishes the provisions, rights and benefits of Section 1542 and
all similar federal and state laws, rights, rules, or legal principles of any
other jurisdiction that may be applicable herein, and any rights they may have
to invoke the provisions of any such law now or in the future with respect to
the Claims being released pursuant to Section 5(a) hereof, and Borrower and each
other Designated Company hereby agrees and acknowledges that this is an
essential term of the releases set forth in this Section 5(a). In connection
with such releases, Borrower and each other Designated Company further
acknowledges that it is aware that its attorneys or others may hereafter
discover claims or facts presently unknown or unsuspected in addition to or
different from those which they now know or believe to be true with respect to
the subject matter of the Claims being released pursuant to Section 5(a) hereof.
Nevertheless, it is the intention of Borrower and the other Designated Companies
in executing this Agreement to fully, finally, and forever settle and release
all matters and all claims relating thereto, which exist, hereafter may exist or
might have existed (whether or not previously or currently asserted in any
action) constituting Claims released pursuant to Section 5(a) hereof.
Representations, Warranties And Covenants Of Borrower and Other Designated
Companies . To induce Administrative Agent, Co-Administrative Agent and each
Lender to execute and deliver this Agreement, each of Borrower and other
Designated Companies represents, warrants and covenants as follows:
The individual executing this Agreement on behalf of Borrower
and each other Designated Company is authorized to so act and the execution of
this Agreement by such individual makes the obligations set forth herein legal,
valid, binding and enforceable against Borrower or such other Designated
Company, as the case may be, in accordance with their respective terms, except
as the enforcement thereof may be subject to (i) the effect of any applicable
bankruptcy, insolvency, reorganization, moratorium or similar law affecting
creditors' rights generally and (ii) general principles of equity (regardless of
whether such enforcement is sought in a proceeding in equity or at law);
11
Except with respect to the Specified Defaults, each of the
representations and warranties contained in the Credit Agreement and the other
Loan Documents is true and correct in all material respects on and as of the
date hereof as if made on the date hereof and after giving effect to the terms
hereof, except to the extent that such representations and warranties expressly
relate to an earlier date, in which case such representations and warranties
shall be true and correct in all material respects as of such earlier date and
after giving effect to the terms hereof, and each of the agreements and
covenants in the Credit Agreement and the other Loan Documents is hereby
reaffirmed with the same force and effect as if each were separately stated
herein and made as of the date hereof;
Neither the execution, delivery and performance of this
Agreement nor the consummation of the transactions contemplated hereby does or
shall contravene, result in a breach of, or violate (i) any provision of
Borrower's or any other Designated Company's corporate charter, bylaws,
operating agreement, or other governing documents, (ii) any law or regulation,
or any order or decree of any court or government instrumentality, or (iii) any
indenture, mortgage, deed of trust, lease, agreement or other instrument to
which Borrower or any other Designated Company is a party or by which Borrower
or any other Designated Company or any of their respective property is bound;
To the best of Borrower's knowledge after reasonable inquiry,
as of the date hereof, except for the Current Defaults, no Event of Default has
occurred or is continuing under this Agreement, the Credit Agreement or any
other Loan Document.
Administrative Agent's security interests in the Collateral
and Other Collateral continue to be valid, binding, and enforceable
first-priority security interests which secure the Obligations (subject only to
Liens permitted under Section 8.8 of the Credit Agreement), and no tax or
judgment liens are currently of record against Borrower or any other Designated
Company.
As of the date hereof, each Product Vendor with whom Borrower
has had discussions and who have has agreed to conduct business with Borrower
during the Forbearance Period is providing, or at Borrower's request has agreed
to provide, Inventory or value-added services to Borrower, as applicable,
pursuant to "cash on delivery" or "cash in advance" payment terms.
Ratification of Liability.
- -------------------------
Each of Borrower and the other Designated Companies hereby
ratifies and reaffirms all of its payment and performance obligations and
obligations to indemnify, contingent or otherwise, under this Agreement and each
other Loan Document to which such party is a party, and each such party hereby
ratifies and reaffirms its grant of liens on or security interests in its
properties pursuant to such Loan Documents to which it is a party as security
for the Obligations under or with respect to the Credit Agreement, and confirms
and agrees that such liens and security interests hereafter secure all of the
Obligations (including, without limitation, all Permitted Forbearance
Overadvances). Borrower and each other Designated Company acknowledges receipt
of a copy of this Agreement and all other agreements, documents, and instruments
executed and/or delivered in connection herewith, (ii) consents to the terms and
12
conditions of same, and (iii) agrees and acknowledges that each of the Loan
Documents remains in full force and effect and is hereby ratified and confirmed.
Reference To And Effect Upon The Credit Agreement.
- -------------------------------------------------
Except as expressly modified hereby, all terms, conditions,
covenants, representations and warranties contained in the Credit Agreement and
other Loan Documents, and all rights of Administrative Agent, Co-Administrative
Agent and the Lenders, and all of the Obligations, shall remain in full force
and effect. Each of Borrower and the other Designated Companies hereby confirms
that no such party has any right of setoff, recoupment or other offset or any
defense, claim or counterclaim with respect to any of the Obligations, the
Credit Agreement or any other Loan Document.
Except as expressly set forth herein, the effectiveness of
this Agreement shall not directly or indirectly (i) create any obligation to
make any further Loans or to continue to defer any enforcement action after the
occurrence of any Default or Event of Default (including, without limitation,
any Forbearance Default), (ii) constitute a consent or waiver of any past,
present or future violations of any provisions of the Credit Agreement or any
other Loan Documents, (iii) amend, modify or operate as a waiver of any
provision of the Credit Agreement or any other Loan Documents or any right,
power or remedy of Administrative Agent, Co-Administrative Agent or any Lender,
(iv) constitute a consent any use of cash collateral, any merger, sale or other
transaction, or any restructuring or refinancing transaction, (v) constitute a
course of dealing or other basis for altering any Obligations or any other
contract or instrument. Except as expressly set forth herein, Administrative
Agent, Co-Administrative Agent and the Lenders each reserves all of its rights,
powers, and remedies under the Credit Agreement, the other Loan Documents and
applicable law. Except as otherwise expressly set forth herein, all of the
provisions of the Credit Agreement and the other Loan Documents are hereby
reiterated and reaffirmed by the Borrower and each other Designated Company.
From and after the Forbearance Effective Date, (i) the term
"Agreement" in the Credit Agreement, and all references to the Credit Agreement
in any Loan Document shall mean the Credit Agreement, as amended and otherwise
modified hereby, and (ii) the term "Loan Documents" in the Credit Agreement and
the other Loan Documents shall include, without limitation, this Agreement and
any agreements, instruments and other documents executed and/or delivered in
connection herewith. All Permitted Forbearance Overadvances made to Borrower
pursuant to this Agreement shall constitute Obligations.
This Agreement shall not be deemed or construed to be a
satisfaction, reinstatement, novation or release of the Credit Agreement or any
other Loan Document or any Obligation arising thereunder.
Construction This Agreement and all other agreements and documents executed
and/or delivered in connection herewith have been prepared through the joint
efforts of all of the parties hereto. Neither the provisions of this Agreement
or any such other agreements and documents nor any alleged ambiguity therein
shall be interpreted or resolved against any party on the ground that such party
or its counsel drafted this Agreement or such other agreements and documents, or
based on any other rule of strict construction. Each of the parties hereto
represents and declares that such party has carefully read this Agreement and
13
all other agreements and documents executed in connection therewith, and that
such party knows the contents thereof and signs the same freely and voluntarily.
The parties hereto acknowledge that they have been represented by legal counsel
of their own choosing in negotiations for and preparation of this Agreement and
all other agreements and documents executed in connection herewith and that each
of them has read the same and had their contents fully explained by such counsel
and is fully aware of their contents and legal effect.
Counterparts. This Agreement may be executed in any number of counterparts, each
of which when so executed shall be deemed an original, but all such counterparts
shall constitute one and the same instrument, and all signatures need not appear
on any one counterpart. Any party hereto may execute and deliver a counterpart
of this Agreement by delivering by facsimile or other electronic transmission a
signature page of this Agreement signed by such party, and any such facsimile or
other electronic signature shall be treated in all respects as having the same
effect as an original signature.
Severability. The invalidity, illegality, or unenforceability of any provision
in or obligation under this Agreement in any jurisdiction shall not affect or
impair the validity, legality, or enforceability of the remaining provisions or
obligations under this Agreement or of such provision or obligation in any other
jurisdiction.
Further Assurances. Borrower and each other Designated Company agrees to take
all further actions and execute all further documents as Administrative Agent or
any Lender may from time to time reasonably request to carry out the
transactions contemplated by this Agreement and all other agreements executed
and delivered in connection herewith.
Section Headings. Section headings in this Agreement are included herein for
convenience of reference only and shall not constitute part of this Agreement
for any other purpose.
Notices. All notices, requests, and demands to or upon the respective parties
hereto shall be given in accordance with the Credit Agreement.
Effectiveness. This Agreement shall become effective at the time (the
"Forbearance Effective Date") that all of the following conditions precedent
have been met (or waived) as determined by Administrative Agent in its sole
discretion:
Agreement. Administrative Agent shall have received duly
executed signature pages for this Agreement signed by Administrative Agent, each
Lender, Borrower and each other Designated Company.
Due Authorization. Borrower and each other Designated Company
shall have delivered to Administrative Agent (i) evidence of the corporate
authority of each such party to execute, deliver and perform its obligations
under this Agreement and, as applicable, all other agreements and documents
executed in connection therewith, and (ii) such other documents and instruments
as Administrative Agent may require, all of the foregoing of which shall be in
form and substance acceptable to Administrative Agent.
14
Assignments; No Third Party Beneficiaries. This Agreement shall be binding upon
and inure to the benefit of Borrower, the other Designated Companies,
Administrative Agent, Co-Administrative Agent, each Lender and their respective
successors and assigns; provided, that neither Borrower nor any other Designated
Company shall be entitled to delegate any of its duties hereunder and shall not
assign any of its rights or remedies set forth in this Agreement without the
prior written consent of Administrative Agent in its sole discretion. No Person
other than the parties hereto, and in the case of Section 5 hereof, the
Releasees, shall have any rights hereunder or be entitled to rely on this
Agreement and all third-party beneficiary rights (other than the rights of the
Releasees under Section 5 hereof) are hereby expressly disclaimed.
Final Agreement. This Agreement, the Credit Agreement, the other Loan Documents,
and the other written agreements, instruments, and documents entered into in
connection therewith (collectively, the "Borrower/Lender Documents") set forth
in full the terms of agreement between the parties hereto and thereto and are
intended as the full, complete, and exclusive contracts governing the
relationship between such parties, superseding all other discussions, promises,
representations, warranties, agreements, and understandings between the parties
with respect thereto. No term of the Borrower/Lender Documents may be amended,
restated, waived or otherwise modified except in a writing signed by the party
against whom enforcement of the modification, amendment, or waiver is sought
except to the extent expressly provided in Section 12.13 of the Credit
Agreement. Any waiver of any condition in, or breach of, any of the foregoing in
a particular instance shall not operate as a waiver of other or subsequent
conditions or breaches of the same or a different kind. The exercise or failure
to exercise any rights or remedies under any of the foregoing in a particular
instance by any of Administrative Agent, Co-Administrative Agent or any Lender
shall not operate as a waiver of its right to exercise the same or different
rights and remedies in any other instances. There are no oral agreements among
the parties hereto.
[Signature pages to follow]
15
IN WITNESS WHEREOF, this Forbearance Agreement has been
executed by the parties hereto as of the date first written above.
ALL AMERICAN SEMICONDUCTOR, INC.,
a Delaware corporation, as the Borrower
By: /s/ HOWARD L. FLANDERS
------------------------------------
Name: Howard L. Flanders
Title: EVP & CFO
HARRIS N.A., successor by merger to
HARRIS TRUST AND SAVINGS BANK,
as Administrative Agent and as a Lender
By: /s/ LAWRENCE A. MIZERA
------------------------------------
Name: Lawrence A. Mizera
Title: Vice President
U.S. BANK NATIONAL ASSOCIATION,
as Co-Administrative Agent and as a
Lender
By: /s/ PAUL NIEDERMAYER
------------------------------------
Name: Paul Niedermayer
Title: Vice President
GMAC COMMERCIAL FINANCE LLC,
as a Lender
By: /s/ DOUG BOOTHE
------------------------------------
Name: Doug Boothe
Title: Director
PNC BANK, NATIONAL ASSOCIATION,
as a Lender
By: /s/ BRUCE J. METTEL
------------------------------------
Name: Bruce J. Mettel
Title: Vice President
FIRST BANK BUSINESS CAPITAL, INC.
f/k/a FB Commercial Finance, Inc., as a
Lender
By: /s/ WALTER CASTILLO
------------------------------------
Name: Walter Castillo
Title: Vice President
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.
AGD China, Inc., each as a Designated Company
Each by: /s/ HOWARD L. FLANDERS
---------------------------------------
Its: EVP & CFO
AMERICAPITAL, LLC, as a Designated Company
By: All American Semiconductor, Inc.,
its sole member
By: /s/ HOWARD L. FLANDERS
------------------------------------
Its: EVP & CFO
ALL AMERICAN SEMICONDUCTOR OF CANADA,
INC., as a Designated Company
By: /s/ HOWARD L. FLANDERS
------------------------------------
Its: EVP & CFO
EXHIBIT A (Specified Defaults)
------------------------------
Current Defaults
- ----------------
1. The Event of Default arising under Section 9.1(a) of the Credit
Agreement as a result of Borrower's failure to immediately and without
notice or demand pay over any overadvance that existed as of date
hereof (immediately prior to giving effect to this Agreement) in
violation of Section 1.9(b)(v).
2. The failure of the Borrower to comply with the following
Sections of the Credit Agreement: 6.6 (provided that any such change
resulting from events or circumstances occurring from and after the
Forbearance Effective Date shall not constitute a Specified Default);
8.5(n); 8.22(a); 8.22(c); 8.22(f); 8.22(g); 8.22(h); and 8.25 (solely
as a result of how Inventory purchases are reflected in Borrower's
computer systems).
Anticipated Defaults
- --------------------
1. The Borrower anticipates that Events of Default may arise after
the date of this Agreement by its failure to comply with the following
Sections of the Credit Agreement: 8.5(d); 8.22(b); and 8.22(d).
EXHIBIT B (Form of Proposed Vendor Payment Schedule)
----------------------------------------------------
[See Attached]
--------------
- ----------------------------------------------------------------------------------------------------------------------------
Written
Agreement Date of
Payment in Place Expected Expected
Terms with Product Shipment Customer
Product Vendor Product to Vendor Receipt Customer to Sales Payment
Purchased Name Cost Vendor (Y/N?) Date Name Customer Price Terms
- ----------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------
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- ----------------------------------------------------------------------------------------------------------------------------
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EXHIBIT C (Form of Product Vendor Agreement)
--------------------------------------------
VENDOR AGREEMENT
----------------
This Vendor Agreement (the "Agreement") is made and entered
into as of the __ day of March, 2007, by and between All American Semiconductor,
Inc., a Delaware corporation (the "Company"), and ____________, a ___________
corporation (the "Vendor"), as follows:
WHEREAS, prior to March __, 2007, the Vendor supplied certain
goods and/or services to the Company in the Company's ordinary course of
business;
WHEREAS, as of March __, 2007, the Vendor held a claim against
the Company on account of goods and services previously sold and provided to the
Debtor;
WHEREAS, as a condition precedent to the future provision of
goods and/or services to the Company by the Vendor in accordance with the
purchase order(s) dated ________ (the "Purchase Orders") (copies of which are
attached hereto as Exhibit A), Vendor is requiring payment in the form of cash
in advance ("CIA") from the Company; and
WHEREAS, the Company's senior secured lenders (the "Banks")
have refused to provide the Company additional funding (the "Bank Funds") from
which payments will be made to, among others, the Vendor on account of the
Purchase Order(s) absent an agreement between the Company and the Vendor
ensuring that (a) the Vendor will provide the goods and/or services set forth in
the Purchase Order(s) to the Company as requested, promptly upon receipt of the
CIA, and (b) that such funds will not be applied and/or setoff against past
debts or other obligations that may be owed to the Vendor by the Company;
NOW, THEREFORE, in consideration of the foregoing recitals and
other good and valuable consideration, the receipt and the sufficiency of which
is hereby acknowledged by the parties hereto, the Company and the Vendor hereby
agree as follows:
1. Company shall provide payment in the form of CIA by wire
transfer in immediately available funds in exchange for the
delivery or provision of all goods and/or services in
accordance with Paragraph 2 below.
2. Vendor covenants and agrees unconditionally and irrevocably to
provide all goods and/or services set forth in each Purchase
Order immediately upon receipt of the CIA payment.
3. Vendor further covenants and agrees that Vendor will not apply
and/or setoff any of the CIA payment received by it from the
Company against any past debt or other obligation that may be
owed to Vendor by the Company. Additionally, by accepting the
CIA payment, Vendor shall be deemed to have waived any and all
purported claims or rights of recoupment that the Vendor may
have with respect to such CIA payment and/or any goods or
services provided in connection with the Purchase Order(s).
4. Vendor and Company, each being fully aware that the Company
would not have access to the Bank Funds absent this Agreement,
acknowledge and agree that the Banks and Harris N.A.
(successor by merger to Harris Trust and Savings Bank), in its
capacity as administrative agent for the Banks under that
certain Credit Agreement, dated as of May 14, 2003 (as amended
or otherwise modified from time to time) (the "Bank Agent"),
are and shall be third party beneficiaries of this Agreement
and shall have the right to enforce its terms directly against
Vendor.
5. Vendor agrees that in any action or proceeding required to
enforce any term of this Agreement due to the Vendor's failure
to deliver or provide goods or services for which the Company
has made CIA payments, each of the Company, the Bank Agent and
the Banks shall be entitled to recover their respective
reasonable out-of-pocket fees and expenses (including, without
limitation, reasonable attorneys' fees and costs) incurred in
connection with such action or proceeding directly from
Vendor.
In witness whereof, the parties, intending to be legally
bound, have executed this Agreement as of the date set forth above.
All American Semiconductor, Inc.,
Company
By: _________________________
Its: _________________________
_______________________,
Vendor
By: _________________________
Its: _________________________
SCHEDULE 1
----------
(Revolving Credit Commitments)
------------------------------
Percentage New Commitment
Harris N.A., successor by merger to
Harris Trust and Savings Bank 25% $17,500,000
U.S. Bank National Association 20% $14,000,000
GMAC Commercial Finance LLC 20% $14,000,000
PNC Bank, National Association 20% $14,000,000
First Bank Business Capital, Inc. 15% $10,500,000
Total 100% $70,000,000