Acknowledgment, Waiver, and Amendment to Inventory and Working Capital Financing Agreement between Datatec Industries, Inc. and IBM Credit Corporation
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Datatec Industries, Inc. and IBM Credit Corporation have agreed to amend their existing Inventory and Working Capital Financing Agreement. Datatec acknowledges it failed to meet certain financial requirements, and IBM Credit agrees to waive these specific defaults in exchange for a $5,000 nonrefundable fee. The waiver is effective once Datatec signs the document and pays the fee. All other rights and remedies under the original agreement remain in effect, except for the specific waivers granted here.
EX-10.1 3 exhibit10100101_10312002.htm sec document
EXHIBIT 10.1 ACKNOWLEDGMENT, WAIVER AND AMENDMENT TO THE INVENTORY AND WORKING CAPITAL FINANCING AGREEMENT This ACKNOWLEDGMENT, WAIVER AND AMENDMENT ("Waiver") TO THE INVENTORY AND WORKING CAPITAL FINANCING AGREEMENT is made as of December 11, 2002 by and between Datatec Industries, Inc., a Delaware corporation ("Customer") and IBM Credit Corporation, a Delaware corporation ("IBM Credit"). RECITALS: WHEREAS, Customer and IBM Credit have entered into that certain Inventory and Working Capital Financing Agreement dated as of November 10, 2000 (as amended, supplemented or otherwise modified from time to time, the "Agreement"); WHEREAS, Customer is in default of one or more of its financial covenants contained in the Agreement (as more specifically explained in Section 2 hereof); WHEREAS, Customer requests that IBM Credit waive such defaults; and WHEREAS, IBM Credit is willing to waive such default and amend the Agreement subject to the conditions set forth below. AGREEMENT NOW THEREFORE, in consideration of the premises set forth herein, and for other good and valuable consideration, the value and sufficiency of which is hereby acknowledged, the parties hereto agree that the Agreement is amended as follows: Section 1. Definitions. All capitalized terms not otherwise defined herein shall have the respective meanings set forth in the Agreement. Section 2. Acknowledgment. Customer acknowledges that the financial covenants set forth in Attachment A to the Agreement are applicable to the financial results of Customer for the quarterly period ending October 31, 2002, and Customer was required to maintain such financial covenants at all times. Customer further acknowledges its actual attainment was as follows: Covenant Covenant Covenant Requirement Actual -------- ------------------------------ --------------- (i) Revenue on an Annual Basis Greater than 5.0:1.0 and equal -86.0 FAIL to Working Capital to or less than 25.0:1.0 (ii) Net Profit after Tax to Revenue Equal to or greater than 4.9 PASS 0.1% (iii) Tangible Net Worth Equal to or greater than $2.5 $3,819,000 PASS million (iv) Debt Service Ratio Equal or greater than 4.7 PASS 2.0:1.0 (v) Debt to Equity Equal to or less than 4.0 PASS 5.0:1.0 The preceding being the "Defaults". Section 3. Waivers to Agreement. IBM Credit hereby waives the Defaults of Customer with the terms of the Agreement to the extent such Defaults are set forth in Section 2 hereof.Section 4. Conditions to Effectiveness of Waiver. The waiver set forth in Section 3 hereof shall become effective upon: (a) the receipt by IBM Credit from Customer of this Waiver executed by Customer; and (b) the payment by Customer to IBM Credit of a waiver fee (the "Waiver Fee"), payable in immediately available funds, in the amount of $5,000 by no later than December 13, 2002. The Waiver Fee shall be nonrefundable and shall be in addition to any other fees IBM Credit may charge customer. Section 5. Rights and Remedies. Except to the extent specifically waived herein IBM Credit reserves any and all rights and remedies that IBM Credit now has or may have in the future with respect to Customer, including any and all rights or remedies which it may have in the future as a result of Customer's failure to comply with its financial covenants to IBM Credit. Except to the extent specifically waived herein neither this Waiver, any of IBM Credit's actions or IBM Credit's failure to act shall be deemed to be a waiver of any such rights or remedies. Section 6. Governing Law. This Waiver shall be governed by and interpreted in accordance with the laws which govern the Agreement. Section 7. Counterparts. This Waiver may be executed in any number of counterparts, each of which shall be an original and all of which shall constitute one agreement. IN WITNESS WHEREOF, this Waiver has been executed by duly authorized representatives of the undersigned as of the day and year first above written. IBM Credit Corporation Datatec Industries, Inc. By: /s/ J.N. Boland By: /s/ Isaac J. Gaon ----------------------------------- ----------------------------------- Print Name: J.N. Boland Print Name: Isaac J. Gaon -------------------------- --------------------------- Title: Chief Credit Officer Title: CEO ------------------------------- ------------------------------- Date: 12/12/02 Date: 12/12/02 -------------------------------- --------------------------------