Document:

Exhibit 10.2

 

WAIVER

 

This WAIVER (this “Waiver”) is entered into as of March 30, 2012 by and among REDDY ICE CORPORATION, a Nevada corporation (the “Borrower”), MACQUARIE BANK LIMITED (“MBL”), in its capacity as the administrative agent (in such capacity, the “Administrative Agent”) and MBL, and the other financial institutions from time to time parties to the Credit Agreement referred to below (collectively, the “Lenders”).  Unless otherwise specified herein, capitalized terms used in this Waiver shall have the meanings ascribed to them in to the Credit Agreement (as hereinafter defined).

 

RECITALS:

 

WHEREAS, Borrower, the Administrative Agent and the Lenders entered into that certain Amended and Restated Credit Agreement dated as of October 22, 2010 (as amended by the Amendment No. 1 to Amended and Restated Credit Agreement, dated as of March 27, 2012, and as further amended, supplemented, restated or otherwise modified from time to time, the “Credit Agreement”);

 

WHEREAS, pursuant to Section 7.1.1(b) of the Credit Agreement, the Borrower is required to furnish to Administrative Agent and the Lenders on or before March 30, 2012 (x) a Form 10-K together with the consolidated balance sheet of the Borrower and its Subsidiaries, and the related consolidated statements of income and cash flow of the Borrower and its Subsidiaries for the Fiscal Year ended December 31, 2011 (the “2011 Financial Statements”) and (y) a report from the Borrower’s auditors as to such 2011 Financial Statements (the “Audited Report”) without any Impermissible Qualification;

 

WHEREAS, the Borrower has requested that Administrative Agent and Required Lenders waive certain provisions of the Credit Agreement as set for herein;

 

NOW, THEREFORE, in consideration of the premises contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

 

1.                                      Waiver.  Subject to the limitations set forth in Section 2 of this Waiver, the Administrative Agent and the Lenders party hereto hereby waive any Default or Event of Default that may occur or be continuing as a result of (x) the Borrower’s failure to deliver the 2011 Financial Statements and (y) the Borrower’s delivery of the Audited Report containing an Impermissible Qualification of the kind specified in clause (a) of the definition of such term ((x) and (y), together, the “Waived Events”).

 

1.                                      Waiver Termination.  Notwithstanding the waivers set forth in Section 1, such waivers shall immediately terminate (the date of such termination, the “Waiver Termination Date”) upon the first occurrence of any of the following events:

 

(a)         the Borrower shall fail to deliver the 2011 Financial Statements on or before April 16, 2012;

 

 

(b)         any Default or Event of Default under the Credit Agreement other than the Waived Defaults; or

 

(c)          March 30, 2013.

 

2.                                      Representations and Warranties.  In order to induce Administrative Agent and the Lenders to enter into this Waiver, the Borrower represents and warrants to Administrative Agent and each Lender (which representations and warranties shall survive the execution and delivery of this Waiver), that:

 

(a)                                 the execution, delivery and performance by the Borrower of this Waiver has been duly authorized by all necessary corporate action and this Waiver is a legal, valid and binding obligation of the Borrower enforceable against the Borrower in accordance with its terms, except as may be limited by bankruptcy, insolvency, reorganization, moratorium or other laws affecting, creditors’ rights generally and the effects of general principles of equity;

 

(b)                                 on and as of the effectiveness of this Waiver after giving effect to this Waiver and the transactions contemplated hereby, the representations and warranties set forth in each Loan Document shall, in each case, be true and correct in all material respects (except that any representation and warranty that is qualified as to “materiality” or “Material Adverse Effect” shall be true and correct in all respects) with the same effect as if then made (unless stated to relate solely 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);

 

(c)                                  at the time of and immediately following the date hereof, after giving effect to the waivers of the Waived Events, no Default or Event of Default shall be in existence; and

 

(d)                                 by its signature below, the Borrower agrees that it shall constitute an Event of Default if any representation or warranty made above should be false or misleading in any material respect.

 

3.                                      Miscellaneous.

 

3.1                               Effect; Ratification.

 

(a)                                 Except as specifically set forth above, the Credit Agreement and the other Loan Documents shall remain in full force and effect and are hereby ratified and confirmed.

 

(b)                                 The execution, delivery and effectiveness of this Waiver shall not operate as a waiver of any right, power or remedy of Administrative Agent or any Lender under the Credit Agreement or any other Loan Document, nor constitute amendment of any provision of the Credit Agreement or any other Loan Document, except as specifically set forth herein.  Upon the effectiveness of this Waiver, each reference in the Credit 

 

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Agreement to “this Agreement,” “hereunder,” “hereof,” “herein” or words of similar import shall mean and be a reference to the Credit Agreement as waived hereby.

 

(c)                                  The Borrower acknowledges and agrees that the waivers set forth herein are effective solely for the purposes set forth herein and that the execution and delivery by Administrative Agent of this Waiver shall not be deemed (i) except as expressly provided in this Waiver, to be a consent to any amendment, waiver or modification of any term or condition of the Credit Agreement or of any other Loan Document, (ii) to create a course of dealing or otherwise obligate Administrative Agent or Lenders to forbear, waive, consent or execute similar amendments under the same or similar circumstances in the future, or (iii) to amend, prejudice, relinquish or impair any right of Administrative Agent or Lenders to receive any indemnity or similar payment from any Person or entity as a result of any matter arising from or relating to this Waiver.  The Credit Parties agree that upon the Waiver Termination Date, the Waiver shall be of no further force or effect and the Waived Events shall constitute immediate Events of Defaults, without notice of any kind necessary by the Administrative Agent or the Lenders.

 

3.2                               Counterparts and Signatures by Fax.  This Waiver may be executed in any number of counterparts, each such counterpart constituting an original but all together one and the same instrument.  An executed counterpart of this Waiver delivered by facsimile or in portable document format shall constitute an original and shall not affect the validity, enforceability or binding effect of this Waiver.

 

3.3                               Severability.  In case any provision in or obligation under this Waiver shall be invalid, illegal or unenforceable in any jurisdiction, the validity, legality and enforceability of the remaining provisions or obligations, or of such provision or obligation in any other jurisdiction, shall not in any way be affected or impaired thereby.

 

3.4                               Loan Document.  This Waiver shall constitute a Loan Document.

 

3.5                               Release.  To the extent not otherwise set forth herein, the Borrower hereby remises, releases, acquits, satisfies and forever discharges the Administrative Agent and the Lenders, each of their respective agents, employees, officers, directors, predecessors, attorneys and all others acting or purporting to act on behalf of or at the direction of the Administrative Agent or the Lenders, of and from any and all manner of actions, causes of action, suit, debts, accounts, covenants, contracts, controversies, agreements, variances, damages, judgments, claims and demands whatsoever, in law or in equity, which any of such parties ever had, now has or, to the extent arising from or in connection with any act, omission or state of facts taken or existing on or prior to the date hereof, may have after the date hereof against the Administrative Agent or the Lenders, their agents, employees, officers, directors, attorneys and all persons acting or purporting to act on behalf of or at the direction of the Administrative Agent or the Lenders (“Releases”), for, upon or by reason of any matter, cause or thing whatsoever through the date hereof in connection with this Waiver or the Loan Documents.  Without limiting the generality of the foregoing, the Borrower waives and affirmatively agrees not to allege or otherwise pursue any defenses, affirmative defenses, counterclaims, claims, causes of action, setoffs or other rights they do, shall or may have as of the date hereof, including, but not limited 

 

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to, the rights to contest:  (a) the right of the Administrative Agent and the Lenders to exercise their rights and remedies described in this Waiver; (b) any provision of this Waiver or the Loan Documents; or (c) any conduct of the Administrative Agent, the Lenders or other Releases in connection with this Waiver or the Loan Documents.

 

3.6                               GOVERNING LAW.  THIS WAIVER AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL, IN ALL RESPECTS, INCLUDING MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE, BE GOVERNED BY, AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND PERFORMED IN THAT STATE AND ANY APPLICABLE LAWS OF THE UNITED STATES OF AMERICA.

 

[Signature Page Follows]

 

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IN WITNESS WHEREOF, the parties hereto have executed this Waiver as of the date first above written.

 

	
 
    	
REDDY   ICE CORPORATION
    
	
 
    	
 
    
	
 
    	
By:   
    	
/s/   Steven J. Janusek
    
	
 
    	
Print   Name:
    	
Steven   J. Janusek
    
	
 
    	
Title:   
    	
Chief   Financial Officer
    
	
 
    	
 
    	
 
    
	
 
    	
 
    
	
 
    	
MACQUARIE   BANK LIMITED, as Administrative Agent and a Lender
    
	
 
    	
 
    
	
 
    	
By:   
    	
/s/   David Prince Althea Hennedige
    
	
 
    	
Name:
    	
David   Prince and Althea Hennedige
    
	
 
    	
Title:   
    	
Authorized   Signatories
    
									

 

Signature page to Waiver to Credit AgreementExhibit 10.2

 

THIRD LOAN MODIFICATION AGREEMENT

 

This Third Loan Modification Agreement (this “Loan Modification Agreement”) is entered into as of                       , 2012, but is effective as of March 31, 2012, by and between SILICON VALLEY BANK, a California corporation, with its principal place of business at 3003 Tasman Drive, Santa Clara, California 95054 and with a loan production office located at 275 Grove Street, Suite 2-200, Newton, Massachusetts 02466 (“Bank”) and NETWORK ENGINES, INC., a Delaware corporation with its chief executive office located at 25 Dan Road, Canton, Massachusetts 02021 (“Borrower”).

 

1.                                      DESCRIPTION OF EXISTING INDEBTEDNESS AND OBLIGATIONS. Among other indebtedness and obligations which may be owing by Borrower to Bank, Borrower is indebted to Bank pursuant to a loan arrangement dated as of February 5, 2010, evidenced by, among other documents, a certain Amended and Restated Loan and Security Agreement dated as of February 5, 2010, between Borrower and Bank, as amended by a certain Consent and First Loan Modification Agreement dated as of January 18, 2011, between Borrower and Bank, and as further amended by a certain Second Loan Modification Agreement dated as of December 13, 2011, between Borrower and Bank (as amended, the “Loan Agreement”).  Capitalized terms used but not otherwise defined herein shall have the same meaning as in the Loan Agreement.

 

2.                                      DESCRIPTION OF COLLATERAL.  Repayment of the Obligations is secured by the Collateral as described in the Loan Agreement (together with any other collateral security granted to Bank, the “Security Documents”).  Hereinafter, the Security Documents, together with all other documents evidencing or securing the Obligations shall be referred to as the “Existing Loan Documents”.

 

3.                                      DESCRIPTION OF CHANGE IN TERMS.

 

A.                                    Modifications to Loan Agreement.

 

1                                         The Loan Agreement shall be amended by deleting Section 2.1.1 (Letters of Credit Sublimit) in its entirety.

 

2                                         The Loan Agreement shall be amended by deleting the following Section 2.2 (Overadvances) thereof in its entirety:

 

“2.2                         Overadvances.  If, at any time, the sum of (a) the outstanding principal amount of any Advances (including any amounts used for Cash Management Services); plus (b) the face amount of any outstanding Letters of Credit (including drawn but unreimbursed Letters of Credit and any Letter of Credit Reserve); plus (c) the FX Reduction Amount exceeds the lesser of either the Revolving Line or the Borrowing Base (such excess amount being an “Overadvance”), Borrower shall immediately pay to Bank in cash such Overadvance.  Without limiting Borrower’s obligation to repay Bank any amount of the Overadvance, Borrower agrees to pay Bank interest on the outstanding amount of any Overadvance, on demand, at the Default Rate.”

 

and inserting in lieu thereof the following:

 

“2.2                         Overadvances.  If, at any time, the outstanding principal amount of any Advances exceeds the lesser of either the Revolving Line or the Borrowing Base (such excess amount being an “Overadvance”), Borrower shall immediately pay to Bank in cash such Overadvance.  Without limiting Borrower’s obligation to repay Bank any amount of the Overadvance, Borrower agrees to pay Bank interest on the outstanding amount of any Overadvance, on demand, at the Default Rate.”

 

 

3                                         The Loan Agreement shall be amended by deleting Section 2.4(d) (Letter of Credit Fee) thereof in its entirety.

 

4                                         The Loan Agreement shall be amended by deleting the following text appearing in Section 2.4(e) (Unused Revolving Line Facility Fee) thereof:

 

“A fee (the “Unused Revolving Line Facility Fee”), payable monthly, in arrears, on a calendar year basis, in an amount equal to 0.30% per annum of the average unused portion of the Revolving Line during such month, as determined by Bank.”

 

and inserting in lieu thereof the following:

 

“A fee (the “Unused Revolving Line Facility Fee”), payable monthly, in arrears, on a calendar year basis, in an amount equal to (i) prior to the 2012 Effective Date, 0.30%, and (ii) on and after the 2012 Effective Date, 0.25% per annum of the average unused portion of the Revolving Line during such month, as determined by Bank.”

 

5                                         The Loan Agreement shall be amended by deleting the following text appearing in Section 6.6 (Access to Collateral; Books and Records) thereof:

 

“At reasonable times, on five (5) Business Day’s notice (provided no notice is required if an Event of Default has occurred and is continuing), Bank, or its agents, shall have the right, on a semi-annual basis (or more frequently after the occurrence of an Event of Default), to inspect the Collateral and the right to audit and copy Borrower’s Books.”

 

and inserting in lieu thereof the following:

 

“At reasonable times, on five (5) Business Day’s notice (provided no notice is required if an Event of Default has occurred and is continuing), Bank, or its agents, shall have the right, on an annual basis (or more frequently after the occurrence of an Event of Default), to inspect the Collateral and the right to audit and copy Borrower’s Books.”

 

6                                         The Loan Agreement shall be amended by deleting the following definitions appearing in Section 13.1 thereof:

 

“                                          “Availability Amount” is (a) the lesser of (i) the Revolving Line or (ii) the amount available under the Borrowing Base, minus (b) the Dollar Equivalent amount of all outstanding Letters of Credit (including drawn but unreimbursed Letters of Credit plus an amount equal to the Letter of Credit Reserve), and minus (c) the outstanding principal balance of any Advances.”

 

“                                          “Bank Services” are any products, credit services and/or financial accommodations previously, now, or hereafter provided to Borrower or any of its subsidiaries by Bank or any Bank Affiliate, including, without limitation, cash management services (including, without limitation, merchant services, direct deposit of payroll, business credit cards, and check cashing services), interest rate swap arrangements, and foreign exchange services as any such products or services may be identified in Bank’s various agreements related thereto (each, a “Bank Services Agreement”).”

 

 

“                                      “Credit Extension” is any Advance, Letter of Credit, or any other extension of credit by Bank for Borrower’s benefit.”

 

“                                          “Letter of Credit” means a standby letter of credit issued by Bank or another institution based upon an application, guarantee, indemnity or similar agreement on the part of Bank as set forth in Section 2.1.2.”

 

“                                          “Obligations” are Borrower’s obligations to pay when due any debts, principal, interest, Bank Expenses, and other amounts Borrower owes Bank now or later, whether under this Agreement, the other Loan Documents, or otherwise, including, without limitation, all obligations relating to letters of credit (including reimbursement obligations for drawn and undrawn letters of credit), if any, and including any interest accruing after Insolvency Proceedings begin and debts, liabilities, or obligations of Borrower assigned to Bank, and the performance of Borrower’s duties under the Loan Documents.”

 

“                                      “Revolving Line” is an Advance or Advances in an amount equal to Eighteen Million Dollars ($18,000,000.00); provided, however, that upon the expiration of the Dell Letter of Credit, the Revolving Line shall be an Advance or Advances in an amount equal to Ten Million Dollars ($10,000,000.00).  If upon the expiration of the Dell Letter of Credit, the outstanding principal amount of Credit Extensions exceeds Ten Million Dollars ($10,000,000.00), Borrower shall immediately pay to Bank such excess.”

 

“                                      “Revolving Line Maturity Date” is March 31, 2012.”

 

and inserting in lieu thereof the following:

 

“                                          “Availability Amount” is (a) the lesser of (i) the Revolving Line or (ii) the amount available under the Borrowing Base, minus (b) the outstanding principal balance of any Advances.”

 

“                                          “Bank Services” are any products, credit services and/or financial accommodations previously, now, or hereafter provided to Borrower or any of its subsidiaries by Bank or any Bank Affiliate, including, without limitation, any letters of credit, cash management services (including, without limitation, merchant services, direct deposit of payroll, business credit cards, and check cashing services), interest rate swap arrangements, and foreign exchange services as any such products or services may be identified in Bank’s various agreements related thereto (each, a “Bank Services Agreement”).”

 

“                                      “Credit Extension” is any Advance, or any other extension of credit by Bank for Borrower’s benefit.”

 

“                                          “Letter of Credit” is a standby or commercial letter of credit issued by Bank upon request of Borrower based upon an application, guarantee, indemnity or similar agreement.”

 

“                                      “Obligations” are Borrower’s obligations to pay when due any debts, principal, interest, Bank Expenses, and other amounts Borrower owes Bank now or later, whether under this Agreement, the other Loan Documents, or otherwise, including any interest accruing after Insolvency Proceedings begin and debts, liabilities, or obligations of Borrower assigned to Bank, and the performance of Borrower’s duties under the Loan Documents.”

 

 

“                                      “Revolving Line” is an Advance or Advances in an amount equal to Ten Million Dollars ($10,000,000).”

 

“                                      “Revolving Line Maturity Date” is June 30, 2012.”

 

7                                         The Loan Agreement shall be amended by inserting the following new definition to appear alphabetically in Section 13.1 thereof:

 

“                                          “2012 Effective Date” is March 31, 2012.”

 

4.                                      FEES.  Borrower shall pay to Bank a modification fee equal to Seven Thousand Two Hundred Fifty Dollars ($7,250.00), which fee shall be due on the date hereof and shall be deemed fully earned as of the date hereof.  Borrower shall also reimburse Bank for all legal fees and expenses incurred in connection with this amendment to the Existing Loan Documents.

 

5.                                      RATIFICATION OF PERFECTION CERTIFICATE.  Borrower hereby ratifies, confirms and reaffirms, all and singular, the terms and disclosures contained in a certain Perfection Certificate dated as of February 5, 2010 between Borrower and Bank (the “Perfection Certificate”), and acknowledges, confirms and agrees the disclosures and information above Borrower provided to Bank in the Perfection Certificate has not changed, as of the date hereof.

 

6.                                      CONSISTENT CHANGES.  The Existing Loan Documents are hereby amended wherever necessary to reflect the changes described above.

 

7.                                      RATIFICATION OF LOAN DOCUMENTS.  Borrower hereby ratifies, confirms, and reaffirms all terms and conditions of all security or other collateral granted to the Bank, and confirms that the indebtedness secured thereby includes, without limitation, the Obligations.

 

8.                                      NO DEFENSES OF BORROWER.  Borrower hereby acknowledges and agrees that Borrower has no offsets, defenses, claims, or counterclaims against Bank with respect to the Obligations, or otherwise, and that if Borrower now has, or ever did have, any offsets, defenses, claims, or counterclaims against Bank, whether known or unknown, at law or in equity, all of them are hereby expressly WAIVED and Borrower hereby RELEASES Bank from any liability thereunder.

 

9.                                      CONTINUING VALIDITY.  Borrower understands and agrees that in modifying the existing Obligations, Bank is relying upon Borrower’s representations, warranties, and agreements, as set forth in the Existing Loan Documents.  Except as expressly modified pursuant to this Loan Modification Agreement, the terms of the Existing Loan Documents remain unchanged and in full force and effect.  Bank’s agreement to modifications to the existing Obligations pursuant to this Loan Modification Agreement in no way shall obligate Bank to make any future modifications to the Obligations.  Nothing in this Loan Modification Agreement shall constitute a satisfaction of the Obligations.  It is the intention of Bank and Borrower to retain as liable parties all makers of Existing Loan Documents, unless the party is expressly released by Bank in writing.  No maker will be released by virtue of this Loan Modification Agreement.

 

10.                               COUNTERSIGNATURE.  This Loan Modification Agreement shall become effective only when it shall have been executed by Borrower and Bank.

 

[The remainder of this page is intentionally left blank]

 

 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as a sealed instrument under the laws of the Commonwealth of Massachusetts as of the date first written above.

 

BORROWER:

 

	
NETWORK ENGINES, INC.
    	
 
    
	
 
    	
 
    
	
By:
    	
 
    	
 
    
	
Name:
    	
 
    	
 
    
	
Title:
    	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
BANK:
    	
 
    
	
 
    	
 
    
	
SILICON VALLEY BANK
    	
 
    
	
 
    	
 
    
	
By:
    	
 
    	
 
    
	
Name:
    	
 
    	
 
    
	
Title:
    	
 
    	
 
    

 

 

The undersigned, NETWORK ENGINES INTERNATIONAL, INC. (“Guarantor”),  ratifies, confirms and reaffirms, all and singular, the terms and conditions of a certain: (i) Unlimited Guaranty dated January 18, 2011 (the “Guaranty”), (ii) Security Agreement dated February 11, 2011, between Guarantor and Bank (the “Security Agreement”), and (iii) Stock Pledge Agreement dated February 11, 2011, between Guarantor and Bank (the “ Stock Pledge Agreement”) and acknowledges, confirms and agrees that the Guaranty, the Security Agreement, and the Stock Pledge Agreement shall remain in full force and effect and shall in no way be limited by the execution of this Loan Modification Agreement, or any other documents, instruments and/or agreements executed and/or delivered in connection herewith.

 

GUARANTOR:

 

NETWORK ENGINES INTERNATIONAL, INC.

 

	
By:
    	
 
    	
 
    
	
Name:
    	
 
    	
 
    
	
Title:

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