Document:

exv10w1

 

Exhibit 10.1

WAIVER AND AMENDMENT

Dated as of December 29, 2004

Commerce Bank

7650 Edinborough Way

Suite 150

Edina, MN 55435

Dear Sir or Madam:

     Reference is made to that certain Term Loan Agreement (the “Loan Agreement”), dated October
14, 2003, and amended effective as of November 30, 2004, by and between HEI Inc., a Minnesota
corporation (the “Borrower”) and Commerce Bank, a Minnesota banking corporation (the “Lender”).

     The Borrower has advised the Lender that due to its failure to file its Annual Report on Form
10-K for its fiscal year ended August 31, 2004 (“Fiscal 2004”), with the United States Securities
and Exchange Commission (the “SEC”) by the extension deadline of December 14, 2004, the Borrower is
at present in default under Section 6.6 of the Loan Agreement. The Borrower has further advised
the Lender that it will continue to be in default under Section 6.6 of the Loan Agreement until
such time that it files its Annual Report on Form 10-K for Fiscal 2004 with the SEC, and that a
default may occur under Section 6.6 of the Loan Agreement if the Borrower fails to timely file with
the SEC its Quarterly Report on Form 10-Q for the Borrower’s fiscal quarter that ended in November
2004. The Borrower has further advised the Lender (i) that the Borrower is likely to be in default
under Section 6.5(a) of the Loan Agreement if it is unable to finalize and, accordingly, deliver
to the Lender, its audited financial statements for Fiscal 2004 by December 29, 2004, and (ii) that
a default may occur under Section 6.5(b) of the Loan Agreement if the Borrower is unable to timely
finalize its quarterly financial statements for its fiscal quarter that ended in November 2004.
The Borrower has requested certain waivers and amendments to Sections 6.6, 6.5(a) and 6.5(b) of the
Loan Agreement.

 

 

     In consideration of the promises herein set forth, and subject to Sections 9.1 and 9.2 of the
Loan Agreement, the Borrower and the Lender hereby agree as follows:

     1.     The Lender hereby waives any default existing as of the date hereof under Section 6.6 of
the Loan Agreement, and any Event of Default (as such term is defined in the Loan Agreement)
arising directly therefrom.

     2.     The Lender hereby agrees that, notwithstanding anything in the Loan Agreement to the
contrary, no Event of Default thereunder shall be deemed to occur either (a) as a result of the
Borrower’s failure to file its Annual Report on Form 10-K for Fiscal 2004, so long as such filing
occurs on or prior to January 14, 2005, or (b) as a result of the Borrower’s failure to file its
Quarterly Report on Form 10-Q for the Borrower’s fiscal quarter that ended in November 2004, so
long as such filing occurs on or prior to February 15, 2005.

     3.     Section 6.5(a) of the Loan Agreement is hereby amended by adding to the end thereof the
following sentence.

     Notwithstanding anything in this Section 6.5(a) to the contrary, the Borrower shall
deliver a copy of its annual financial statements for its fiscal year ended August 31,
2004, on or prior to the date that such annual financial statements are filed with the
United States Securities and Exchange Commission, but in any event on or prior to January
14, 2005.

     4.     Section 6.5(b) of the Loan Agreement is hereby amended by adding to the end thereof the
following sentence.

     Notwithstanding anything in this Section 6.5(b) to the contrary, the Borrower shall
deliver a copy of its quarterly financial statements for its fiscal quarter ended in
November 2004, on or prior to the date that such quarterly financial statements are filed
with the United States Securities and Exchange Commission, but in any event on or prior to
February 15, 2005.

     The Loan Agreement shall remain in full force and effect, without modification except as set
forth herein or in any other amendments entered into in accordance with the requirements of the
Loan Agreement.

     This Waiver and Amendment may be executed simultaneously in two or more counterparts, each of
which shall be an original, but all of which constitute but one agreement.

[THE REMAINDER OF THIS PAGE IS BLANK. SIGNATURE PAGES FOLLOW.]

 

 

     If you are in agreement with the foregoing, please sign the form of acceptance on the enclosed
counterpart of this Waiver and Amendment and return the same to the Borrower, whereupon this Waiver
and Amendment shall become a binding agreement between the Lender and the Borrower.

	 	 	 	 	 
	 	

Very truly yours,

HEI, INC.

 	 
	 	/s/ Mack V. Traynor, III
 	 
	 	By:  Mack V. Traynor, III 	 
	 	Its: CEO and President 	 

 

 

	 	 	 	 	 

     Acknowledged as of the date first written above.

	 	 	 	 	 
	 	COMMERCE BANK

 	 
	 	/s/ James E. Senske
 	 
	 	By:  James E. Senske 	 
	 	Its: Presidentexv10w2

 

Exhibit 10.2

WAIVER AND AMENDMENT

Dated as of December 29, 2004

Commerce Financial Group, Inc.

7650 Edinborough Way

Suite 150

Edina, MN 55435

Dear Sir or Madam:

     Reference is made to that certain Term Loan Agreement (the “Loan Agreement”), dated October
28, 2003, and amended effective as of November 30, 2004, by and between HEI Inc., a Minnesota
corporation (the “Borrower”) and Commerce Financial Group, Inc., a Minnesota corporation (the
“Lender”).

     The Borrower has advised the Lender that due to its failure to file its Annual Report on Form
10-K for its fiscal year ended August 31, 2004 (“Fiscal 2004”), with the United States Securities
and Exchange Commission (the “SEC”) by the extension deadline of December 14, 2004, the Borrower is
at present in default under Section 6.6 of the Loan Agreement. The Borrower has further advised
the Lender that it will continue to be in default under Section 6.6 of the Loan Agreement until
such time that it files its Annual Report on Form 10-K for Fiscal 2004 with the SEC, and that a
default may occur under Section 6.6 of the Loan Agreement if the Borrower fails to timely file with
the SEC its Quarterly Report on Form 10-Q for the Borrower’s fiscal quarter that ended in November
2004. The Borrower has further advised the Lender (i) that the Borrower is likely to be in default
under Section 6.5(a) of the Loan Agreement if it is unable to finalize and, accordingly, deliver to
the Lender, its audited financial statements for Fiscal 2004 by December 29, 2004, and (ii) that a
default may occur under Section 6.5(b) of the Loan Agreement if the Borrower is unable to timely
finalize its quarterly financial statements for its fiscal quarter that ended in November 2004.
The Borrower has requested certain waivers and amendments to Sections 6.6, 6.5(a) and 6.5(b) of the
Loan Agreement.

 

 

     In consideration of the promises herein set forth, and subject to Sections 9.1 and 9.2 of the
Loan Agreement, the Borrower and the Lender hereby agree as follows:

     1.     The Lender hereby waives any default existing as of the date hereof under Section 6.6 of
the Loan Agreement, and any Event of Default (as such term is defined in the Loan Agreement)
arising directly therefrom.

     2.     The Lender hereby agrees that, notwithstanding anything in the Loan Agreement to the
contrary, no Event of Default thereunder shall be deemed to occur either (a) as a result of the
Borrower’s failure to file its Annual Report on Form 10-K for Fiscal 2004, so long as such filing
occurs on or prior to January 14, 2005, or (b) as a result of the Borrower’s failure to file its
Quarterly Report on Form 10-Q for the Borrower’s fiscal quarter that ended in November 2004, so
long as such filing occurs on or prior to February 15, 2005.

     3.     Section 6.5(a) of the Loan Agreement is hereby amended by adding to the end thereof the
following sentence.

     Notwithstanding anything in this Section 6.5(a) to the contrary, the Borrower shall
deliver a copy of its annual financial statements for its fiscal year ended August 31,
2004, on or prior to the date that such annual financial statements are filed with the
United States Securities and Exchange Commission, but in any event on or prior to January
14, 2005.

     4.     Section 6.5(b) of the Loan Agreement is hereby amended by adding to the end thereof the
following sentence.

     Notwithstanding anything in this Section 6.5(b) to the contrary, the Borrower shall
deliver a copy of its quarterly financial statements for its fiscal quarter ended in
November 2004, on or prior to the date that such quarterly financial statements are filed
with the United States Securities and Exchange Commission, but in any event on or prior to
February 15, 2005.

     The Loan Agreement shall remain in full force and effect, without modification except as set
forth herein or in any other amendments entered into in accordance with the requirements of the
Loan Agreement.

     This Waiver and Amendment may be executed simultaneously in two or more counterparts, each of
which shall be an original, but all of which constitute but one agreement.

[THE REMAINDER OF THIS PAGE IS BLANK. SIGNATURE PAGES FOLLOW.]

 

 

     If you are in agreement with the foregoing, please sign the form of acceptance on the enclosed
counterpart of this Waiver and Amendment and return the same to the Borrower, whereupon this Waiver
and Amendment shall become a binding agreement between the Lender and the Borrower.

	 	 	 	 	 
	 	Very truly yours,

HEI, INC.

 	 
	 	/s/ Mack V. Traynor, III
 	 
	 	By:  Mack V. Traynor, III 	 
	 	Its: CEO and President 	 

 

 

	 	 	 	 	 

     Acknowledged as of
the date first written above.

	 	 	 	 	 
	 	COMMERCE FINANCIAL GROUP, INC.

 	 
	 	/s/ James E. Senske
 	 
	 	By:  James E. Senske 	 
	 	Its: Presidentexv10w3

 

Exhibit 10.3

NOTICE, WAIVER AND AMENDMENT

Dated as of December 29, 2004

Beacon Bank

Attn: David Peterka - Executive Vice President

19765 Highway 7

Shorewood, MN 55331

Dear Mr. Peterka:

     Reference is made to that certain Accounts Receivable Agreement (as from time to time amended
or renewed, the “Agreement”) dated May 29, 2003 by and between HEI Inc. (the “Client”) and Beacon
Bank (the “Purchaser”).

     On December 16, 2004, the Client received a notification (attached hereto as Schedule
1) from the NASDAQ Listing Qualifications Department that states that the Client is not in
compliance with NASDAQ Marketplace Rule 4310(c)(14) due to its failure to file its Annual Report on
Form 10-K for its fiscal year ended August 31, 2004 (“Fiscal 2004”), with the United States
Securities and Exchange Commission (the “SEC”) by the extension deadline of December 14, 2004, and,
as a result, the Client’s common stock is subject to delisting from the NASDAQ National Market
unless the Client requests a hearing with a NASDAQ Listing Qualifications Panel to appeal such
delisting. The Client intends to request a hearing and make an appeal but can not provide
assurances that the NASDAQ Listing Qualifications Panel will grant the Client’s request for
continued listing of its common stock.

     Pursuant to Section 5.02(a) of the Agreement, the Client is required to promptly notify the
Purchaser of “any developments which would materially adversely affect the business of the Client,
its properties or affairs or the ability of Client to perform its obligations under this
Agreement.” The delisting of the Client’s common stock from the NASDAQ National Market may
materially adversely affect the business of the Client. The Purchaser hereby agrees that the
disclosures of such events in this Notice, Waiver and Amendment constitutes notice required under
Section 5.02(a) of the Agreement.

     As a result of the Client’s failure to file its Annual Report on Form 10-K for Fiscal 2004,
the Client has advised the Purchaser that it is at present in default under Section 3.12 of the
Agreement. The Client has further advised the Purchaser that (i) it will continue to be in default
under Section 3.12 of the Agreement until such time that its files its Annual Report on Form 10-K
for Fiscal 2004 with the SEC, and (ii) a default

 

 

may occur under Section 3.12 of the Agreement if the Client fails to timely file with the SEC its
Quarterly Report on Form 10-Q for the Client’s fiscal quarter that ended in November 2004. The
Client has further advised the Purchaser that the Client is likely to be in default under Section
5.08(a) of the Agreement if it is unable to finalize and, accordingly, deliver to the Purchaser,
its audited financial statements for Fiscal 2004 by December 29, 2004. The Client has requested
certain waivers and amendments to Sections 3.12 and 5.08(a) of the Agreement.

     In consideration of the promises herein set forth, the Client and the Purchaser hereby agree
as follows:

     1.     The Purchaser hereby waives any default existing as of the date hereof under Section 3.12
of the Agreement, and any Event of Default (as such term is defined in the Agreement) arising
directly therefrom.

     2.     The Lender hereby agrees that, notwithstanding anything in the Loan Agreement to the
contrary, no Event of Default thereunder shall be deemed to occur either (a) as a result of the
Client’s failure to file its Annual Report on Form 10-K for Fiscal 2004, so long as such filing
occurs on or prior to January 14, 2005, or (b) as a result of the Client’s failure to file its
Quarterly Report on Form 10-Q for the Client’s fiscal quarter that ended in November 2004, so long
as such filing occurs on or prior to February 15, 2005.

     3.     Section 5.08(a) of the Agreement is hereby amended by adding to the end thereof the
following sentence.

     Notwithstanding anything in this Section 5.08(a) to the contrary, the Client shall
deliver a copy of its annual financial statements for its fiscal year ended August 31,
2004, on or prior to the date that such annual financial statements are filed with the
United States Securities and Exchange Commission, but in any event on or prior to January
14, 2005.

     The Agreement shall remain in full force and effect, without modification except as set forth
herein or in any other amendments entered into in accordance with the requirements of the
Agreement.

     This Notice, Waiver and Amendment may be executed simultaneously in two or more counterparts,
each of which shall be an original, but all of which constitute but one agreement.

 

 

     If you are in agreement with the foregoing, please sign the form of acceptance on the enclosed
counterpart of this Notice, Waiver and Amendment and return the same to the Client, whereupon this
Notice, Waiver and Amendment shall become a binding agreement between the Purchaser and the Client.

	 	 	 	 	 
	 	Very truly yours,

HEI, INC.

 	 
	 	/s/ Mack V. Traynor, III
 	 
	 	By:  Mack V. Traynor, III 	 
	 	Its: CEO and President 	 

 

 

	 	 	 	 	 

     Acknowledged as of the date first written above.

	 	 	 	 	 
	 	BEACON BANK

 	 
	 	
/s/ David L. Peterka	 
	 	By: David L. Peterka	 
	 	Its: Executive Vice President

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