EXHIBIT 10.1
SECOND FORBEARANCE AGREEMENT
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This SECOND FORBEARANCE AGREEMENT (this "Agreement") is entered into as
of this 15th day of April, 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 the First Forbearance Agreement (as
defined below) and 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, Administrative Agent, Co-Administrative Agent, each Lender,
Borrower and each other Designated Company are parties to that certain
Forbearance Agreement, dated as of March 29, 2007 (as amended, restated or
otherwise modified, the "First Forbearance Agreement"), pursuant to which
Administrative Agent and Lenders agreed, subject to the terms and conditions set
forth therein, to (i) forbear from exercising certain default-related rights and
remedies under the Credit Agreement, other Loan Documents and applicable law,
and (ii) continue to make certain extensions of credit to Borrower in the form
of Revolving Loans, in each case through a date no later than April 15, 2007
notwithstanding the continuance or expected occurrence, as applicable, of
certain Events of Default specified therein;
WHEREAS, by its terms, the "Forbearance Period" (as such term is
defined in the First Forbearance Agreement) (the "First Forbearance Period") is
scheduled to expire on the date hereof;
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, in view of the imminent expiration of the First Forbearance
Period, 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)
continue to 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 24, 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
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.
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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 April 11, 2007, the aggregate principal balance
of the outstanding Obligations under the Credit Agreement was not less than
$45,875,923.33, broken down as follows:
Revolving Loans (excluding L/C Obligations): $45,875,923.33
L/C Obligations: $0.00
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.
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;
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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 24,
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
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:
[Intentionally omitted.]
Delivery of Weekly Proposed Vendor Payment Schedules. On or prior to
12:00 p.m. prevailing Central time on April 16, 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 (or portion thereof) 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:
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.
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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: (a)
the aggregate amount of all Lenders' Revolving Credit Commitments in effect
at such time, and (b) the sum of (I) 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 (II)
an amount equal to (A) $4,948,000 at all times from and including April 16,
2007 through and including April 20, 2007, and (B) $4,912,000 at all times
thereafter during the Forbearance Period (clause (II) is referred to herein
as the "Permitted Forbearance Overadvance Amount").
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 9:00 a.m.
prevailing Eastern time each Tuesday 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 (provided, however, that at the Company's request, such approved
Proposed Vendor Payment Schedule may be amended with the prior consent of
the Administrative Agent so long as the amended schedule complies with all
terms and conditions set forth herein); (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 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
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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.
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 close of business on April 16, 2007, in
connection with its efforts to explore various strategic alternatives, Borrower
shall cause at least one appraisal firm satisfactory to the Administrative Agent
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in its sole discretion (the "Appraiser") to 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 best efforts
to provide Appraiser the information and access necessary, and otherwise
cooperate with 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 in accordance with this
subsection (k). Borrower agrees to provide Administrative Agent (for subsequent
distribution to the Lenders), promptly upon the receipt thereof, a copy of such
offer received from such Appraiser as well any each other proposal, written
expression of interest and offer received from any other appraisal firm.
[Intentionally omitted.]
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 $25,000, which
fee shall be fully earned upon the effectiveness of this Agreement, shall be due
and payable in immediately available funds upon expiration or termination of the
Forbearance Period, and shall be non-refundable upon its receipt by the
Administrative Agent.
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 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
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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);
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;
8
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 (other than
a statutory tax lien that is or may become of record for unpaid sales tax in an
amount not to exceed $5,000 owed to Westminster County, Colorado).
As of the date hereof, each Product Vendor with whom Borrower has had
discussions and who 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 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 to 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, the First Forbearance
Agreement, 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.
9
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.
Acknowledgement and Consent to Corporate Overhead Variance. Administrative Agent
and each Lender hereby confirms its acknowledgement of, and consent to, the
Borrower's use of $150,216.32 of Loan proceeds during the week ending April 13,
2007 to pay certain shipping costs due and owing by Borrower to Federal Express
and United Parcel Service, Inc. (the "Supplemental Shipping Costs") that were
not provided for in the Forbearance Budget for such week. Borrower hereby
represents and warrants that such Loan proceeds were used solely to pay the
Supplemental Shipping Costs.
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
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.
11
Post-Forbearance Period Budget and Proposal. Borrower shall have
prepared and delivered to Administrative Agent and Lenders a revised 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. 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]
11
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/ PHILLIP LYKENS
----------------------------------------
Name: Phillip Lykens
Title: Executive Vice President
SIGNATURE PAGE TO SECOND FORBEARANCE AGREEMENT
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
SIGNATURE PAGE TO SECOND FORBEARANCE AGREEMENT
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).
3. The failure of Borrower to comply with the following sections
of the First Forbearance Agreement: 3(c)(iv) (solely with respect to
the payment of the Supplemental Shipping Costs described in Section 9
hereof); 3(k) ; 6(e) (relating solely to a statutory tax lien that is
or may become of record for unpaid sales tax in an amount not to exceed
$5,000 owed to Westminster County, Colorado).
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 Date of
Agreement in Expected Expected
Payment Place with Product Shipment Customer
Product Vendor Product Terms to Vendor Receipt Customer to Sales Payment
Purchased Name Cost Vendor (Y/N?) Date Name Customer Price Terms
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
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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% $ 15,000,000
U.S. Bank National Association 20% $ 12,000,000
GMAC Commercial Finance LLC 20% $ 12,000,000
PNC Bank, National Association 20% $ 12,000,000
First Bank Business Capital, Inc. 15% $ 9,000,000
Total 100% $ 60,000,000
Harris N.A.
April 16, 2007
All American Semiconductor, Inc.
16115 NW. 52nd Avenue
Miami, Florida 33014
Attention: Chief Financial Officer
Facsimile: (305) 624-5258
VIA FACSIMILE AND ELECTRONIC MAIL
- ---------------------------------
Ladies and/or Gentlemen:
Reference is made to: (i) that certain Credit Agreement, dated as of
May 14, 2003 (as amended, restated, supplemented or otherwise modified from time
to time, the "Credit Agreement"), by and among All American Semiconductor, Inc.,
as the borrower thereunder ("Borrower"), the financial institutions party
thereto from time to time as lenders thereunder (collectively, the "Lenders"),
Harris, N.A. (successor by merger to Harris Trust and Savings Bank), as
administrative agent for the Lenders (in such capacity, "Administrative Agent")
and as a Lender, and U.S. Bank National Association, as co-administrative agent
for the Lenders (in such capacity, the "Co-Agent") and as a Lender; and (ii)
that certain Second Forbearance Agreement, dated as of even date herewith (as
amended, restated or otherwise modified from time to time, the "Forbearance
Agreement"), by and among Borrower, the other Designated Companies,
Administrative Agent and the Lenders. Capitalized terms used but not otherwise
defined herein shall have the respective meanings ascribed to such terms in the
Forbearance Agreement.
By this letter, Administrative Agent hereby confirms its agreement, as
well as the agreement of each Lender, to extend the April 16, 2007 deadline set
forth in Section 3(k) of the Forbearance Agreement until April 18, 2007.
Except as expressly provided in the preceding paragraph, nothing in
this letter shall (i) amend, modify or operate as a waiver of any provision of
the Credit Agreement, the Forbearance Agreement or any other Loan Document, or
any right, power, privilege or remedy of Administrative Agent and Lenders
thereunder, or (iv) constitute a course of dealing or other basis for altering
any Obligations of the Borrower or any other Designated Company under the Credit
Agreement, the Forbearance Agreement, the other Loan Documents or any other
contract or instrument.
If you have any questions regarding the foregoing, please contact the
undersigned at (312) 461-2370.
Very truly yours,
Harris N.A., as Administrative Agent, on
behalf of itself and the Lenders
By: /s/ LAWRENCE A. MIZERA
Name: Lawrence A Mizera
Its: Vice President
cc: Each Lender (via email)
David S. Heller, Esq. (via email)
Peter P. Knight, Esq. (via email)
Craig Hansen, Esq. (via email)
Stephen Lerner, Esq. (via email)
Jonathan Morrison (via email)
Mick Solimene (via email)
Casey Coston, Esq. (via email)