Third Amendment Agreement and Waiver to Senior Subordinated Convertible Notes between Accom, Inc. and American Bankers Insurance Group, Inc.

Summary

This agreement is between Accom, Inc. and American Bankers Insurance Group, Inc. It amends the terms of Accom’s Senior Subordinated Convertible Notes, including reducing the conversion price and changing prepayment conditions. The agreement also grants Accom a waiver for certain past defaults until March 31, 2001, with a possible extension to September 30, 2001, if Accom secures new senior financing. The document confirms the company’s legal authority to enter into the amendment and that no significant legal actions are pending against it.

EX-10.12.2 5 0005.txt THIRD AMENDMENT AGREEMENT AND WAIVER Exhibit 10.12.2 American Bankers Insurance Group, Inc. January 29, 2001 Accom, Inc. 1490 O'Brien Drive Menlo Park, CA 94025 Attn: Junaid Sheikh Accom, Inc. - Third Amendment Agreement and Waiver Dear Sirs: We refer you to the Senior Subordinated Convertible Notes due March 12, 2004, (the "Notes") of Accom, Inc. (the "Company") issued March 12, 1999 to the persons listed on Annex I to the Purchase Agreement (as herein defined) (the "Holders") in the amounts set forth opposite the names of such persons on said Annex I and the Note Purchase Agreement, dated as of March 12, 1999 (the "Purchase Agreement") among the Company and the Holders. Capitalized terms used herein without definition shall have the same meanings herein as specified in the Notes and the Purchase Agreement, as applicable, without giving effect to this Third Amendment Agreement. On October 25, 2000, the American Bankers Insurance Group, Inc. ("ABIG"), as the Holder of at least 50% of the aggregate outstanding principal amount of the Notes, waived through September 30, 2000 certain Events of Default under Section 13(c) of the Notes that had occurred due to failure on the part of the Company to comply with the covenants contained in Section 11(k) and 11(l) of the Notes for a period of more than 30 days (the "Existing Events of Default") pursuant to a September 2000 Agreement of Waiver dated as of such date (the "September 2000 Waiver"). Subsequently, the Company and ABIG have agreed that the Notes be amended, with effect from October 1, 2000, to (i) cause the Conversion Price, as in effect on such date, to be reduced from $1.30 to $1.00 and (ii) to amend certain of the conditions relating to prepayment of the Notes, in each case, on the terms and conditions contained herein. In addition, the Company has requested the Holders to grant a further limited waiver of the Existing Events of Default through March 31, 2001(the "Basic Waiver") and, under certain circumstances, through September 30, 2001(the "Extended Waiver"), and the Holders would be willing, subject to the satisfaction of the conditions set forth in Section 4(a) and Section 4 (b) hereof, respectively, to grant the Company the Basic Waiver and the Extended Waiver. 1. Basic Waiver Relating to the Existing Events of Default. Pursuant to Section 12 of the Notes, compliance by the Company with the covenant contained in Section 11(1) and the covenant contained in Section 11(k) of the Notes is hereby waived for all periods through and including March 31, 2001; provided, however, that unless the Extended Waiver shall have become effective, the Company shall be required to comply with said covenants on and as of June 30, 2001 without regard to the 30-day grace period contained in Section 13(c) of the Notes. 2. Extended Waiver Relating to the Existing Events of Default. (a) Pursuant to Section 12 of the Notes, subject as set forth in paragraph (b) below, compliance by the Company with the covenant contained in Section 11(1) and the covenant contained in Section 11(k) of the Notes will be waived, from and as of the effective date specified in Section 4(b) for all periods thereafter through and including September 30, 2001; provided, however, that the Company shall be required to comply with said covenants on and as of December 31, 2001, without regard to the 30-day grace period contained in Section 13(c) of the Notes. (b) The Waiver set forth in paragraph (a) above is contingent upon the Company having obtained, on or prior to June 30, 2001, a binding commitment (the "New Senior Commitment") from a senior lender to make loans to the Company from and after such date in at least the same amount and on terms and conditions substantially as favorable (including the terms and conditions on which the Notes shall be subordinated to loans made to the Company pursuant to the New Senior Commitment) as the terms and conditions applicable to the Company's existing arrangements with the Provident Bank, except that the maturity date of the New Senior Commitment shall be no earlier than December 31, 2001, it being understood that an extension of such existing arrangements until such date shall be deemed to satisfy this condition. 3. Amendment to the Notes. Pursuant to Section 12 of the Notes, each of the Notes is hereby amended, with effect from September 30, 2000, as follows: (i) Section 5(a)(i). Section 5(a)(i) of the Notes is hereby amended by deleting it in its entirety and substituting therefor the following new Section 5(a)(i): "(i) The Common Stock, $.001 par value ("Common Stock"), of the Company shall, at the time such notice is given, have been traded during the twenty trading days immediately preceding the date of such prepayment, and the price per share during such period shall not at any time have been less than $3.75; and" (ii) Section 5(a)(iii)(1). Section 5(a)(iii)(1) of the Notes is hereby amended by deleting the number "200,000" in the last line thereof and substituting therefor the number "150,000". (iii) Section 5(b). Section 5(b) of the Notes is hereby amended by deleting it in its entirety and substituting therefor the following new Section 5(b) "(b) On and at any time after the first anniversary of the Closing Date, upon notice given as provided in Section 6, the Company may, at its option, prepay all or any portion of the Notes at 122.5% of the principal amount thereof so to be prepaid." 2 (iv) Section 10(a). Section 10(a) of the Notes is hereby amended by deleting the dollar amount "$1.30" in the sixth line thereof and substituting therefor the dollar amount "$1.00". 4. Representations and Warranties of the Company. The Company represents and warrants to each Holder as follows: (i) Organization, Qualifications and Corporate Power. The Company is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware. (ii) Authorization of Agreements; Etc.. Each of (a) the execution and delivery by the Company of this Third Amendment Agreement and (b) the performance by the Company of its obligations under the Notes as amended hereby have been duly authorized by all requisite corporate action and will not violate any provision of law, any order of any court or other agency of government, the Certificate of Incorporation or Bylaws of the Company, or any provision of any material indenture, agreement or other instrument to which the Company is a party or by which it or its properties or assets is bound or affected, or conflict with, result in a material breach of or constitute (with due notice or lapse of time or both) a material default under any such indenture, agreement or other instrument, or result in the creation or imposition of any material lien, charge or encumbrance of any nature whatsoever upon any of the properties or assets of the Company. (iii) Validity. This Third Amendment Agreement has been duly executed and delivered by the Company and constitutes, and each of the Notes, as amended hereby, will constitute, legal, valid and binding obligations of the Company, enforceable in accordance with their respective terms. (iv) Actions Pending, Etc. There is no action, suit or proceeding pending or, to the knowledge of the Company, threatened against or affecting the Company, or any of its properties or rights, before any court or by or before any governmental body or arbitration board or tribunal, nor is there any judgment, decree, injunction or order of any court, governmental department, commission, agency, instrumentality or arbitrator against the Company, nor to the knowledge of the Company, does there exist any basis for any action, suit, investigation or proceeding against the Company which, if adversely determined, could reasonably be expected to have a Material Adverse Effect. There are no actions, suits, proceedings or claims pending before or by any court, arbitrator, regulatory authority or government agency against or affecting the Company that might enjoin the transactions contemplated by this Third Amendment Agreement. (v) No Default. After giving effect to this Third Amendment Agreement, no Event of Default or event which, with the giving of notice or the lapse of time would constitute an Event of Default, has occurred and is continuing. (vi) Conversion Price. The Conversion Price immediately prior to September 30, 2000, without giving effect to this Third Amendment Agreement, was $1.30. 3 5. Conditions Precedent. (a) The Basic Waiver and amendments to the Notes contained in Section 1 and Section 3 hereof, respectively, shall become effective as of the date hereof, with effect as specified therein, subject to the satisfaction of the following conditions precedent as of the date hereof: (i) Power and Authorization. The Holders shall have received a Secretary's Certificate, dated the date hereof, certifying that (i) attached thereto are true and complete copies of the resolutions of the Board of Directors of the Company authorizing the execution, delivery and performance by the Company of this Third Amendment Agreement the performance by the Company of its obligations under the Notes, as amended hereby, (ii) said resolutions are all the resolutions adopted by the Board of Directors of the Company in connection with the transactions contemplated thereby and are in full force and effect without modification as of such date and (iii) as to the incumbency and signatures of its officers executing this Third Amendment Agreement. (ii) Interest. The Holders shall have received all interest owed and currently due, if any, on the Notes as amended hereby. (iii) Expenses. The Holders shall have received payment in full of their out-of-pocket expenses incurred through the date of this Third Amendment Agreement, including, but not limited to, the fees and expenses of counsel to the Holders. (iv) Other Documents. The Holders shall have received such other documents, in form and substance satisfactory to the Holders and their counsel, as it may request. (b) The Extended Waiver contained in Section 2 hereof shall automatically become effective, with effect as specified therein, as of the date on which each of the following conditions shall have been satisfied: (i) The Basic Waiver shall have become effective, as provided herein. (ii) On or prior to June 30, 2001, the Holders shall have received evidence reasonably satisfactory to them that the New Senior Commitment shall have been obtained by the Company, as provided in Section 2(b) hereof. (iii) On or prior to June 30, 2001, the New Senior Commitment and all documents executed and delivered by the Company in connection therewith shall have been duly authorized by all requisite corporate action and will not violate any provision of law, any order of any court or other agency of government, the Certificate of Incorporation or Bylaws of the Company, or any provision of any material indenture, agreement or other instrument to which the Company is a party or by which it or its properties or assets is bound or affected, or conflict with, result in a material breach of or constitute (with due notice or lapse of time or both) a material default under any such indenture, agreement or other instrument, or result in the creation or imposition of any material lien, charge or encumbrance of any nature whatsoever upon any of the properties or assets of the Company, other than liens, charges or encumbrances created pursuant to such documents. 4 (iv) As of the date on which the other conditions set forth in this paragraph (b) shall have been satisfied, there shall be no action, suit or proceeding pending or, to the knowledge of the Company, threatened against or affecting the Company, or any of its properties or rights, before any court or by or before any governmental body or arbitration board or tribunal, nor will there be any judgment, decree, injunction or order of any court, governmental department, commission, agency, instrumentality or arbitrator against the Company, nor to the knowledge of the Company, will there exist any basis for any action, suit, investigation or proceeding against the Company which, if adversely determined, could reasonably be expected to have a Material Adverse Effect, and there shall be no actions, suits, proceedings or claims pending before or by any court, arbitrator, regulatory authority or government agency against or affecting the Company that might enjoin the transactions contemplated by this Third Amendment Agreement. (v) After giving effect to the transactions contemplated by the New Senior Commitment and the Extended Waiver, no Event of Default or event which, with the giving of notice or the lapse of time would constitute an Event of Default, shall have occurred and be continuing. 6. Events of Default. It is understood and agreed that failure to comply with any provision of this Third Amendment Agreement by the Company shall be deemed to constitute an Event of Default under the Notes, as amended hereby. 7. Effect of Amendments; Confirmation by Company. Except as expressly provided herein, nothing contained in this Third Amendment Agreement shall affect or be deemed to affect any provisions of the Notes, and, except only to the extent that they may be varied hereby, the Company hereby ratifies and confirms all of its agreements and obligations contained in the Notes and the Purchase Agreement. The waiver granted hereunder shall not entitle the Company to any other waiver in the same or similar circumstances, and the Holders reserve all of their rights and remedies under the Notes with respect to any Event of Default or event which, with the giving of notice or the lapse of time, would constitute an Event of Default, other than the Existing Events of Default, to the extent waived hereunder and under all previous waivers granted to the Company by the Holders. 5 If the foregoing is acceptable to you, please so indicate by signing and returning the attached copy of this letter to counsel to the Holders at Reboul, MacMurray, Hewitt, Maynard & Kristol, Attention: Isabel Barzun, 45 Rockefeller Plaza, New York, New York 10111. Very truly yours, AMERICAN BANKERS INSURANCE GROUP, INC. By: /S/ Len Garcia ---------------------- AGREED AND ACCEPTED as of this 29th day of January, 2001 ACCOM, INC. By: /S/ Junaid Sheikh --------------------------------- 6