Exhibit 10.25

 

WAIVER AND THIRD AMENDMENT TO
LOAN AND SECURITY AGREEMENT

 

THIS WAIVER AND THIRD AMENDMENT TO LOAN AND SECURITY AGREEMENT (this “Waiver and
Amendment”), dated as of November 18, 2005, is entered into by and among
Channell Commercial Corporation, a Delaware corporation (“Domestic Borrower”),
Channell Commercial Canada Inc., an Ontario corporation (“Canadian Borrower”),
Channell Limited, a limited liability company incorporated under the laws of
England and Wales (“CLU”), Channell Commercial Europe Limited, a limited
liability company incorporated under the laws of England and Wales (“CCEL” and,
together with CLU, “UK Borrowers”, and, together with Domestic Borrower,
Canadian Borrower and CLU, “Borrowers”), Bank of America, N.A., as assignee of
Banc of America Leasing Capital, LLC, successor-in-interest to Fleet Capital
Corporation, as Administrative Agent under the Loan Agreement referred to below
(in such capacity, the “Administrative Agent”), BABC Global Finance Inc., fka
Fleet Capital Global Finance, Inc., as assignee of Fleet Capital Canada
Corporation, as Canadian Agent under the Loan Agreement referred to below (in
such capacity, the “Canadian Agent”), Bank of America, N.A., as
successor-in-interest to Fleet National Bank, London U.K. Branch, as UK Agent
under the Loan Agreement referred to below (in such capacity, the “UK Agent”),
and the Lenders party to the Loan Agreement referred to below, with reference to
the following facts:

 

RECITALS

 

Borrowers are parties to the Loan and Security Agreement, dated as of
September 25, 2002, as amended (collectively, the “Loan Agreement”), with the
Administrative Agent, the Canadian Agent, the UK Agent and the Lenders party
thereto, pursuant to which the Lenders have provided Borrowers with certain
credit facilities.

 

Borrowers currently are in default under Section 10.1.3 of the Loan Agreement
due to their breach of Section 8.3 of the Loan Agreement by failing to maintain
a Fixed Charge Coverage Ratio of at least 1.15 to 1.00 as of September 30, 2005
(Borrower’s actual Fixed Charge Coverage Ratio as of September 30, 2005 was 0.36
to 1.00) – such Event of Default hereinafter is referred to as the “Existing
Event of Default”.

 

The Borrowers have requested that the Lenders waive the Existing Event of
Default and modify the minimum Fixed Charge Covenant to facilitate the
Borrower’s future compliance with the Loan Agreement.

 

The Lenders are willing to grant such accommodations to Borrowers as set for
below.

 

NOW, THEREFORE, the parties hereby agree as follows:

 

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1.             Defined Terms.  Any and all initially-capitalized terms used in
this Waiver and Amendment (including, without limitation, in the recitals
hereto) without definition shall have the respective meanings specified in the
Loan Agreement.

 

2.             Waiver of Existing Event of Default.  The Lenders hereby waive
the Existing Event of Default.  Such waiver by the Lenders shall constitute a
waiver of only the Existing Event of Default and not a waiver of any future
breach of Section 8.3 or any other provision of the Loan Agreement or any other
Loan Document.

 

3.             Amendment to Minimum Aggregate Availability Covenant. 
Section 8.2.18 is hereby amended to read in full as follows:

 

“8.2.18   Aggregate Availability.  Permit Aggregate Availability to be less than
$2,500,000 at any time.”

 

4.             Amendment to Minimum Fixed Charge Coverage Ratio Covenant. 
Exhibit 8.3 to the Loan Agreement is hereby amended to read in full as follows:

 

“EXHIBIT 8.3
FINANCIAL COVENANTS

 

Minimum Fixed Charge Coverage Ratio.  Borrowers shall not permit, as of the last
day of any fiscal quarter of Domestic Borrower (beginning with the fiscal
quarter ending December 31, 2005), the Fixed Charge Coverage Ratio to be less
than 0.20 to 1.00.”

 

5.             Waiver and Amendment Fee.  In consideration of the Agreement of
the Agents and the Lenders to enter into this Waiver and Amendment, Domestic
Borrower hereby agrees to pay to the Administrative Agent on the Effective Date
of this Waiver and Amendment, for the sole account of the Domestic Lender, a
one-time fee in the amount of $10,000 (the “Waiver and Amendment Fee”), which
fee shall be deemed fully-earned and non-refundable once paid.  Domestic
Borrower hereby acknowledges and agrees that the Administrative Agent may effect
payment of the Waiver and Amendment Fee by charging the full amount thereof to
the Domestic Loan Account.

 

6.             Conditions Precedent.  The effectiveness of this Waiver and
Amendment shall be subject to the prior satisfaction of the following
conditions:

 

(a)           The Administrative Agent and Banc of America Leasing Capital, LLC,
as successor-in-interest to Fleet Capital Corporation, shall have entered into
an assignment agreement in form and substance satisfactory to the Administrative
Agent;

 

(b)           The Administrative Agent shall have received, in form and
substance satisfactory to the Administrative Agent, this Waiver and Amendment,
duly executed by the Borrowers, the Canadian Agent, the UK Agent and Majority
Lenders;

 

(c)           Egerton shall have executed the consent to this Waiver and
Amendment attached hereto;

 

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(d)           The Borrowers and all other Loan Parties shall be in compliance
with all the terms and provisions of the Loan Documents applicable to such
Person or its Property and no Default or Event of Default (other than the
Existing Event of Default waived hereby) shall have occurred and be continuing;
and

 

(e)           All of the Borrowers’ representations and warranties contained
herein shall be true and correct on and as of the date of execution hereof.

 

7.             Representations and Warranties.

 

(a)           Reaffirmation of Prior Representations and Warranties.  Each
Borrower hereby reaffirms and restates as of the date hereof all of the
representations and warranties made by such Borrower in the Loan Agreement and
the other Loan Documents, which shall be true and correct in all material
respects, except to the extent such representations and warranties specifically
relate to an earlier date.

 

(b)           No Default.  Other than the Existing Event of Default waived
hereby, no Default or Event of Default has occurred and remains continuing under
any of the Loan Documents.

 

8.             Miscellaneous.

 

(a)           Reference to Loan Agreement.  The Loan Agreement, each of the
other Loan Documents, and any and all other agreements, documents or instruments
now or hereafter executed and delivered pursuant to the terms hereof, or
pursuant to the terms of the Loan Agreement as amended hereby, are hereby
amended so that any reference therein to the Loan Agreement shall mean a
reference to the Loan Agreement as amended by this Waiver and Amendment.

 

(b)           Loan Agreement Remains in Effect.  The Loan Agreement and the
other Loan Documents remain in full force and effect and the Borrowers ratify
and confirm their agreements and covenants contained therein.

 

(c)           APPLICABLE LAW.  THIS WAIVER AND AMENDMENT SHALL BE DEEMED TO HAVE
BEEN MADE AND TO BE PERFORMABLE IN THE STATE OF CALIFORNIA AND SHALL BE GOVERNED
BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF CALIFORNIA.

 

(d)           Counterparts.  This Waiver and Amendment may be executed in
multiple counterparts, each of which when so executed shall be deemed to be an
original, but all of which when taken together shall constitute one and the same
instrument.

 

[Rest of page intentionally left blank; signature pages follow]

 

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IN WITNESS WHEREOF, the parties have entered into this Waiver and Amendment by
their respective duly authorized officers as of the date first above written.

 

 

Channell Commercial Corporation,

 

a Delaware corporation

 

 

 

By:

/s/ William H. Channell, Jr.

 

 

Name:

William H. Channell, Jr.

 

Title:

President and Chief Executive Officer

 

 

 

 

 

Channell Commercial Canada Inc.,

 

an Ontario corporation

 

 

 

By:

/s/ William H. Channell, Jr.

 

 

Name:

William H. Channell, Jr.

 

Title:

President and Chief Executive Officer

 

 

 

 

 

Channell Limited,

 

a limited liability company incorporated

 

under the laws of England and Wales

 

 

 

By:

/s/ William H. Channell, Jr.

 

 

Name:

William H. Channell, Jr.

 

Title:

President and Chief Executive Officer

 

 

 

 

 

Channell Commercial Europe Limited,

 

a limited liability company incorporated

 

under the laws of England and Wales

 

 

 

By:

/s/ William H. Channell, Jr.

 

 

Name:

William H. Channell, Jr.

 

Title:

President and Chief Executive Officer

 

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Bank of America, N.A.,

 

(as assignee of Banc of America

 

Leasing & Capital, LLC, successor-

 

in-interest to Fleet Capital Corporation),

 

as Administrative Agent and as sole

 

Domestic Lender

 

 

 

By:

/s/Matthew R. Van Steenhuyse

 

 

 

Matthew R. Van Steenhuyse

 

 

Senior Vice President

 

 

 

 

 

BABC GLOBAL FINANCE INC.,

 

(as assignee of Fleet Capital Global Finance, Inc.,

 

as assignee of Fleet Capital Canada Corporation),

 

as Canadian Agent and as Canadian Lender

 

 

 

By:

 

 

 

Name:

 

 

 

Title:

 

 

 

 

 

 

 

Bank of America, N.A.

 

(successor-in-interest to Fleet National Bank, London U.K. Branch), as UK Agent
and as UK Lender

 

 

 

 

 

By:

 

 

 

Name:

 

 

 

Title:

 

 

 

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Consent of Egerton

 

Reference is made to that certain Loan and Security Agreement, dated as of
September 25, 2002, among Channell Commercial Corporation, a Delaware
corporation, Channell Commercial Canada Inc., an Ontario corporation, Channell
Limited, a limited liability company incorporated under the laws of England and
Wales, Channell Commercial Europe Limited, a limited liability company
incorporated under the laws of England and Wales, Bank of America, N.A., as
assignee of Banc of America Leasing & Capital, LLC, successor-in-interest to
Fleet Capital Corporation, as Administrative Agent, BABC Global Finance Inc.,
fka Fleet Capital Global Finance, Inc., as assignee of Fleet Capital Canada
Corporation, a Canadian corporation, as Canadian Agent, Bank of America, N.A.,
successor-in-interest to Fleet National Bank, London U.K. Branch, which traded
as FleetBoston Financial, as UK Agent, and the Lenders party thereto.

 

The undersigned hereby consents to the execution, delivery and performance of
the foregoing Waiver and Third Amendment to Loan and Security Agreement.

 

 

Dated:  November 18, 2005

 

 

A.C. Egerton (Holdings) Limited,
a company incorporated under the
laws of England and Wales

 

 

By:

/s/ William H. Channell, Jr.

 

Name:

William H. Channell, Jr.

Title:

President and Chief Executive Officer

 

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