FIRST AMENDMENT
TO LOAN AGREEMENT
FIRST AMENDMENT, dated as of September 30, 1999 (the
"Amendment"), to the Loan Agreement referred to below, by and among (i) GENERAL
DATACOMM INDUSTRIES, INC., a Delaware corporation, GENERAL DATACOMM, INC., a
Delaware corporation ("GDC"), DATACOMM LEASING CORPORATION, a Delaware
corporation, VITAL NETWORK SERVICES, L.L.C., a Delaware limited liability
company, GDC NAUGATUCK, INC., a Delaware corporation, GDC FEDERAL SYSTEMS, INC.,
a Delaware corporation (each, a "Borrower" and collectively, the "Borrowers"),
(ii) FOOTHILL CAPITAL CORPORATION, as a lender ("Foothill"), (iii) ABLECO
FINANCE LLC, as a lender ("Ableco"), (iv) XXXXXXXXX L.L.C., as a lender
("Xxxxxxxxx" and together with Foothill and Ableco, the "Lenders"), and (v)
FOOTHILL CAPITAL CORPORATION, as agent for the Lenders (the "Agent").
WHEREAS, the Borrowers, the Agent and the Lenders are parties
to the Loan and Security Agreement dated as of May 14, 1999 (the "Loan
Agreement"), pursuant to which the Lenders have agreed to make certain loans to
the Borrowers secured by the Collateral (as defined in the Loan Agreement);
WHEREAS, GDC has requested that the Agent (on behalf of the
Lenders) release its lien on certain equipment (the "Subject Equipment")
identified in the Outsource Manufacturing and Purchase Agreement dated as of
September 30, 1999 (the "Purchase Agreement"), between GDC and The Matco
Electronics Group, Inc. (the "Purchaser"), pursuant to which GDC will sell the
Subject Equipment to the Purchaser;
WHEREAS, the Agent is willing to release its lien on the
Subject Equipment, subject to (i) the execution and delivery of this Amendment
by the Borrowers, and (ii) the other terms and conditions set forth in this
Amendment; and
WHEREAS, each Borrower has determined that its execution,
delivery and performance of this Amendment directly benefit, and are within the
corporate purposes and in the best interests of, such Borrower;
NOW THEREFORE, in consideration of the premises and other good
and valuable consideration, the parties hereto hereby agree as follows:
1.1 Definitions in Amendment. Any capitalized term used herein
and not defined shall have the meaning assigned to it in the Loan Agreement.
1.2 First Amendment Effective Date. Section 1.1 of the Loan
Agreement is hereby amended by inserting, in appropriate alphabetical order, a
definition of the term "First Amendment Effective Date" to read in its entirety
as follows:
"'First Amendment Effective Date' means the date on which all
of the conditions precedent to the effectiveness of the First Amendment
to Loan Agreement dated as of September 30, 1999, by and among the
Borrowers, the Lenders and the Agent, have been fulfilled or waived."
1.3 Disposal of Assets. Section of 7.4 of the Loan Agreement is
hereby amended to read in its entirety as follows:
"Sell, lease, assign, transfer, or otherwise dispose of any of
such Borrower's properties or assets other than, (i) sales of Inventory
to buyers in the ordinary course of such Borrower's business as
currently conducted, (ii) the sale of ARC, or (iii) the sale of the
Middlebury Real Property."
1.4. Conditions Subsequent. Section 3.3 of the Loan Agreement is
hereby amended by inserting a new paragraph (f) at the end of such Section to
read as follows:
"(f) within 60 days after the First Amendment Effective Date,
Agent shall have received appraisals of the Borrowers' asynchronous
transfer mode technology and of Vital's business, from appraisers
acceptable to the Agent, satisfactory in form and substance to Agent."
2. Conditions. The effectiveness of this Amendment is
subject to the fulfillment, in a manner satisfactory to the Agent, of each of
the following conditions precedent (the date such conditions are fulfilled or
waived by the Lender is hereinafter referred to as the "Amendment Effective
Date"):
(a) Representations and Warranties; No Event of Default. The
representations and warranties contained herein, in Section 5 of the Loan
Agreement and in each other Loan Document and certificate or other writing
delivered to the Agent or any Lender pursuant hereto on or prior to the
Amendment Effective Date shall be correct on and as of the Amendment Effective
Date as though made on and as of such date, except to the extent that such
representations and warranties (or any schedules related thereto) expressly
relate solely to an earlier date (in which case such representations and
warranties shall be true and correct on and as of such date); and no Default or
Event of Default shall have occurred and be continuing on the Amendment
Effective Date or would result from this Amendment becoming effective in
accordance with its terms.
(b) Delivery of Documents. The Lender shall have received on
or before the Amendment Effective Date the following, each in form and substance
satisfactory to the Agent and, unless indicated otherwise, dated the Amendment
Effective Date:
(i) the Agent shall have received a true and
correct copy of the Purchase Agreement, certified by an authorized officer of
the Administrative Borrower; and
(ii) such other agreements, instruments,
approvals, opinions and other documents as the Agent may reasonably request.
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(c) Proceedings. All proceedings in connection with the
transactions contemplated by this Amendment, and all documents incidental
thereto, shall be satisfactory to the Agent and its special counsel, and the
Agent and such special counsel shall have received all such information and such
counterpart originals or certified copies of documents, and such other
agreements, instruments, approvals, opinions and other documents, as the Agent
or such special counsel may reasonably request.
5. Representations and Warranties. Each Borrower hereby
represents and warrants to the Agent and the Lenders as follows:
(a) Representations and Warranties; No Event of Default. The
representations and warranties herein, in Section 5 of the Loan Agreement and in
each other Loan Document and certificate or other writing delivered to the Agent
or any Lender pursuant hereto on or prior to the Amendment Effective Date are
correct on and as of the Amendment Effective Date as though made on and as of
such date, except to the extent that such representations and warranties (or any
schedules related thereto) expressly relate solely to an earlier date (in which
case such representations and warranties are true and correct on and as of such
date); and no Default or Event of Default has occurred and is continuing on the
Effective Date or would result from this Amendment becoming effective in
accordance with its terms.
(b) Organization, Good Standing, Etc. Such Loan Party (i) is a
corporation duly organized, validly existing and in good standing under the laws
of the state of its organization, (ii) has all requisite power and authority to
execute, deliver and perform this Amendment and the other Loan Documents to
which it is a party being executed in connection with this Amendment, and to
perform the Loan Agreement, as amended hereby, and (iii) is duly qualified to do
business and is in good standing in each jurisdiction in which the character of
the properties owned or leased by it or in which the transaction of its business
makes such qualification necessary except where the failure to be so qualified
reasonably could not be expected to have a Material Adverse Change.
(c) Authorization, Etc. The execution, delivery and
performance by such Loan Party of this Amendment and each other Loan Document to
which it is a party being executed in connection with this Amendment, and the
performance by such Loan Party of the Loan Agreement, as amended hereby, (i)
have been duly authorized by all necessary action, (ii) do not and will not
contravene such Loan Party's charter or by-laws, any applicable law or any
contractual restriction binding on or otherwise affecting it or any of its
properties, (iii) do not and will not result in or require the creation of any
Lien (other than pursuant to any Loan Document) upon or with respect to any of
its properties, and (iv) do not and will not result in any suspension,
revocation, impairment, forfeiture or nonrenewal of any permit, license,
authorization or approval applicable to its operations or any of its properties.
6. Consent. By executing this Amendment, each Lender hereby
consents to (i) the sale of the Subject Equipment by GDC to the Purchaser
pursuant to the Purchase Agreement and (ii) the release of the Agent's lien on
the Subject Equipment.
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7. Miscellaneous.
(a) Continued Effectiveness of the Loan Agreement. Except as
otherwise expressly provided herein, the Loan Agreement and the other Loan
Documents are, and shall continue to be, in full force and effect and are hereby
ratified and confirmed in all respects, except that on and after the Amendment
Effective Date (i) all references in the Loan Agreement to "this Agreement",
"hereto", "hereof", "hereunder" or words of like import referring to the Loan
Agreement shall mean the Loan Agreement as amended by this Amendment, and (ii)
all references in the other Loan Documents to which any Borrower is a party to
the "Loan Agreement", "thereto", "thereof", "thereunder" or words of like import
referring to the Loan Agreement shall mean the Loan Agreement as amended by this
Amendment. Except as expressly provided herein, the execution, delivery and
effectiveness of this Amendment shall not operate as an amendment of any right,
power or remedy of the Lender under the Loan Agreement or any other Loan
Document, nor constitute an amendment of any provision of the Loan Agreement or
any other Loan Document.
(b) Counterparts. This Amendment may be executed in any number
of counterparts and by different parties hereto in separate counterparts, each
of which shall be deemed to be an original, but all of which taken together
shall constitute one and the same agreement.
(c) Headings. Section headings herein are included for
convenience of reference only and shall not constitute a part of this Amendment
for any other purpose.
(d) Governing Law. This Amendment shall be governed by,
and construed in accordance with, the law of the State of New York.
(e) Costs and Expenses. The Borrowers jointly and severally
agree to pay on demand all fees, costs and expenses of the Agent and each Lender
in connection with the preparation, execution and delivery of this Amendment and
the other related agreements, instruments and documents.
(f) Amendment as Loan Document. Each Borrower hereby
acknowledges and agrees that this Amendment constitutes a "Loan Document" under
the Loan Agreement. Accordingly, it shall be an Event of Default under the Loan
Agreement if (i) any representation or warranty made by a Borrower under or in
connection with this Amendment shall have been untrue, false or misleading in
any material respect when made, or (ii) a Borrower shall fail to perform or
observe any term, covenant or agreement contained in this Amendment.
(g) Waiver of Jury Trial. EACH BORROWER, THE AGENT AND THE
LENDER EACH HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION,
PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE)
ARISING OUT OF OR RELATING TO THIS AMENDMENT OR THE ACTIONS OF THE AGENT OR ANY
LENDER IN THE NEGOTIATION, ADMINISTRATION, PERFORMANCE OR ENFORCEMENT HEREOF.
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment
to be executed and delivered as of the date first above written.
Borrowers:
GENERAL DATACOMM INDUSTRIES, INC.,
a Delaware corporation
By /S/ XXXXXX X. XXXXXX
Title: V.P. & Treasurer
GENERAL DATACOMM, INC.,
a Delaware corporation
By /S/ XXXXXX X. XXXXXX
Title: V.P. & Treasurer
DATACOMM LEASING CORPORATION,
a Delaware corporation
By /S/ XXXXXX X. XXXXXX
Title: V.P. & Treasurer
VITAL NETWORK SERVICES, L.L.C.,
a Delaware limited liability company
By /S/ XXXXXX X. XXXXXX
Title: V.P. & Treasurer
GDC FEDERAL SYSTEMS, INC.,
a Delaware corporation
By /S/ XXXXXX X. XXXXXX
Title: V.P. & Treasurer
GDC NAUGATUCK, INC.,
a Delaware Corporation
By /S/ XXXXXX X. XXXXXX
Title: V.P. & TREASURER
Agent and Lender:
FOOTHILL CAPITAL CORPORATION,
a California corporation
By /S/ XXXXX XXXXXX
Title: Vice President
Lenders:
ABLECO FINANCE LLC,
a Delaware limited liability company
By /S/
Title:
XXXXXXXXX L.L.C.,
a New York limited liability company
By /S/
Title: Vice President
AMENDMENT NUMBER TWO TO
LOAN AND SECURITY AGREEMENT
This AMENDMENT NUMBER TWO TO LOAN AND SECURITY AGREEMENT (this
"Amendment"), dated as of December 30, 1999, is entered into by and among
GENERAL DATACOMM INDUSTRIES, INC., a Delaware corporation ("Parent"), GENERAL
DATACOMM, INC., a Delaware corporation ("General DataComm"), DATACOMM LEASING
CORPORATION, a Delaware corporation ("DataComm Leasing"), GDC FEDERAL SYSTEMS,
INC., a Delaware corporation ("GDC Federal"), VITAL NETWORK SERVICES, L.L.C., a
Delaware limited liability company ("Vital"), and GDC NAUGATUCK, INC., a
Delaware corporation ("GDC Naugatuck", and together with the Parent, General
DataComm, DataComm Leasing, GDC Federal and Vital, each a "Borrower" and
collectively the "Borrowers"), each of the financial institutions signatories
hereto (such financial institutions, together with their respective successors
and assigns, each a "Lender" and collectively, the "Lenders"), and FOOTHILL
CAPITAL CORPORATION, a California corporation, as agent for the Lenders (in such
capacity, the "Agent").
WHEREAS, the Borrowers have requested the Lender Group to
amend certain terms of that certain Loan and Security Agreement, dated as of May
14, 1999, by and among the Borrowers, the Lenders, and Agent (as amended,
restated, supplemented, or otherwise modified from time to time, the "Loan
Agreement"), and the Lender Group is willing to amend the Loan Agreement subject
to the terms and conditions of this Amendment. All capitalized terms used herein
and not defined herein shall have the meanings ascribed to them in the Loan
Agreement, as amended hereby.
NOW, THEREFORE, in consideration of the premises and of the
mutual covenants, agreements and conditions hereinafter set forth, and for other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto hereby agree as follows:
1. Amendments.
(a) Section 1.1 of the Agreement is hereby amended by adding the following
definitions in alphabetical order:
"Applicable Period" shall mean (a) with respect to
each of the first, second, or third fiscal quarter of the Parent's
fiscal year, 45 days after the end of such fiscal quarter, and (b) with
respect to the fourth fiscal quarter of the Parent's fiscal year, 90
days after the end of such fiscal quarter.
"Net Worth Reserve" shall mean, as of any date of
determination, an amount equal to: (a) $3,500,000, if the Net Worth of
Parent is less than $15,000,000; (b) $1,500,000, if the Net Worth of
Parent is greater than or equal to $15,000,000 and less
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than $18,131,000; and (c) $-0-, if the Net Worth of Parent is greater
than or equal to $18,131,000.
"Second Amendment" means that certain Amendment
Number Two to Loan and Security Agreement, dated as of December 30,
1999, by and among the Borrowers and the Lender Group.
"Second Amendment Closing Date" means the date that
the Second Amendment initially became effective by its terms.
"Term B Loan Conversion Price" means $5.00 per share
of Common Stock, subject to adjustment as provided in Section 15.
"Term B Loan Lender Registration Rights Agreement"
means that certain Registration Rights Agreement, dated as of the
Closing Date, by and between the Parent and the Term B Loan Lender,
with respect to the shares of Common Stock that Term B Loan Lender may
acquire and certain rights associated with such shares.
"Term C Loan" has the meaning set forth in Section
2.4(a)(iii).
"Term C Loan Commitment" means the amount set forth
opposite such Lender's name on Schedule C-1 as such Lender's "Term C
Loan Commitment", as the same may be adjusted from time to time
pursuant to the terms of this Agreement.
"Term C Loan Conversion Price" means $9.00 per share
of Common Stock, subject to adjustment as provided in Section 15;
provided, however, that, solely in the event that any "daily closing
price" (as such term is defined below) during the period between
December 29, 1999 and the Second Amendment Closing Date is $6.00 per
share or less, then the Term C Loan Conversion Price instead shall mean
a price per share of Common Stock equal to the lower of (a) $9.00 and
(b) the product of (i) 1.35 times (ii) the "Alternate Base Price" as of
the Second Amendment Closing Date, subject to adjustment as provided in
Section 15. For purposes of this definition, the "Alternate Base Price"
on any date of determination shall be the average of the daily closing
prices for the immediately preceding 10 consecutive Trading Days. For
purposes of this definition, the closing price for each day (i.e., a
"daily closing price") shall be the last reported sales price or, in
case no such reported sale takes place on such date, the average of the
reported closing bid and asked prices in either case on the New York
Stock Exchange or, if Common Stock is not listed or admitted to trading
on the New York Stock Exchange, on the principal national securities
exchange on which Common Stock is listed or admitted to trading or, if
not listed or admitted to trading on any national securities exchange,
the closing sales price of Common Stock as quoted by NASDAQ or, in case
no reported sales takes place, the average of the closing bid and asked
prices as quoted by NASDAQ or any comparable system or, if Common Stock
is not quoted on NASDAQ or any comparable system, the closing sales
price or, in case no reported sale takes place, the average of the
closing bid and asked prices, as furnished by any two members of the
National Association of Securities Dealers, Inc. selected from time to
time by the Parent for that purpose.
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"Term C Loan Lender" has the meaning set forth in
Section 15.1.
"Term C Loan Lender Registration Rights Agreement"
means the Registration Rights Agreement, in form and substance
substantially similar to the Term B Loan Lender Registration Rights
Agreement, by and between the Parent and the Term C Loan Lender, with
respect to the shares of Common Stock that Term C Loan Lender may
acquire and certain rights associated with such shares.
(b) Section 1.1 of the Agreement is hereby amended by amending and
restating the following definitions in their respective entirety as follows:
"Commitment" means, as to any Lender, the Revolving
Credit Commitment of such Lender, the Term A Loan Commitment of such
Lender, the Term B Loan Commitment of such Lender, and the Term C Loan
Commitment of such Lender, as applicable, and "Commitments" means,
collectively, the aggregate amount of the Commitments of the Lenders.
"Conversion Price" shall mean, as the context
requires, (a) the Term B Loan Conversion Price, or (b) the Term C Loan
Conversion Price. Without limiting the generality of the foregoing, the
term "Conversion Price" shall mean the Term B Loan Conversion Price if
such term is used in the context of Term B Loan (including the
conversion thereof) and shall mean the Term C Loan Conversion Price if
such term is used in the context of Term C Loan (including the
conversion thereof).
"Maximum Revolving Amount" shall mean $35,000,000.
"Pro Rata Share" shall mean, with respect to a
Lender, a fraction (expressed as a percentage), the numerator of which
is the amount of such Lender's Commitment and the denominator of which
is the aggregate amount of the Commitments, provided that, if the
Commitments have been reduced to zero, the numerator shall be the
aggregate unpaid principal amount of such Lender's Advances and Term
Loans and interest in Letter of Credit Obligations and the denominator
shall be the aggregate unpaid principal amount of all of the Advances,
the Term Loans and Letter of Credit Obligations. If and to the extent
that, pursuant to Section 16.1 hereof, an assignor Lender makes in
favor of an Assignee a non-ratable assignment of 100% of the
Commitments in respect of the Term A Loan and the Term Loan Obligations
with respect to the Term A Loan, or the Term B Loan and the Term Loan
Obligations with respect to the Term B Loan, or the Term C Loan and the
Term Loan Obligations with respect to the Term C Loan, then, anything
in the Loan Agreement or the other Loan Documents to the contrary
notwithstanding, for purposes of determining "ratability" among the
Lenders under the Loan Agreement and the other Loan Document: (a) when
used in the context of a Lender's obligation or Commitment to make the
Term A Loan or the Term B Loan or the Term C Loan, as the case may be,
or a Lender's right to receive payments in respect of the Term Loan
Obligations with respect to the Term A Loan or the Term B Loan or the
Term C Loan, as the case may be, the term "Pro Rata Share" shall mean
(i) 100% with respect to such Assignee and (ii) -0-% with respect to
such assignor Lender; (b) when used in the
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context of a Lender's obligation or Commitment to make Advances or
participate in Letters of Credit or a Lender's right to receive
payment in respect of the Other Obligations, the term "Pro Rata Share"
shall mean (i) 100% with respect to the assignor Lender and (ii) -0-%
with respect to the Assignee; (c)from and after the Closing Date, the
then outstanding principal amount of the Term Loans shall be deemed
to be the amount of the total Commitments in respect of the Term
Loans; and (d) in all other cases, the term "Pro Rata Share" shall
have the meaning set forth in the first sentence of this definition.
"Registration Rights Agreement" means, collectively,
the Term B Loan Lender Registration Rights Agreement and the Term C
Loan Lender Registration Rights Agreement.
"Term Loans" means, collectively, the Term A Loan,
the Term B Loan, and the Term C Loan.
(c) Clause (z) of the definition of "Borrowing Base" set forth in Section
2.1(a) of the Loan Agreement hereby is amended and restated in its entirety to
read as follows:
(z) the Net Worth Reserve and the aggregate amount
of reserves, if any, established by Agent under Section 2.1(b).
(d) The following hereby is added to the Loan Agreement as a new Section
2.4(a)(iii) in proper alphanumerical order:
(iii) Subject to the terms and conditions of this
Agreement, each Lender that has a Term C Loan Commitment severally
agrees to make a term loan on the Second Amendment Closing Date
(collectively, the "Term C Loan") to Borrowers in the original
aggregate principal amount equal to such Lender's Term C Loan
Commitment. The outstanding principal amount of the Term C Loan (after
giving effect to any conversions pursuant to Section 15 hereof) shall
be repaid in quarterly installments of principal equal to $1,000,000.
Each such installment shall be due and payable on the last day of each
March, June, September, and December, commencing on March 31, 2001 and
continuing on the last day of each succeeding March, June, September,
and December until and including the date on which the unpaid balance
of the Term C Loan is paid in full or has been converted pursuant to
Section 15 hereof. At the Term C Loan Lender's sole discretion and upon
the Term C Loan Lender's delivery of not less than 3 Business Days
prior written notice to Agent and Borrower, one or more scheduled
principal payments due in respect of the Term C Loan may be deferred
until the Maturity Date. The outstanding principal balance and all
accrued and unpaid interest under the Term C Loan shall be due and
payable upon the termination of this Agreement (or all Revolving Credit
Commitments), whether by its terms, by prepayment, by acceleration, or
otherwise. If and only if the Term A Loan has been repaid in full and
the Term B Loan has been repaid and/or converted in full, the unpaid
principal balance of the Term C Loan may be prepaid in whole or in part
without penalty or premium at any time during the term of this
Agreement upon 30 days prior written notice by Borrowers to Agent, all
such prepaid amounts shall be applied to the installments due on the
Term C Loan in the inverse order
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of their maturity; provided, however, that (A) notwithstanding anything
herein to the contrary, the Term C Loan Lender shall have the right to
convert up to $4,000,000 of the outstanding principal amount of the
Term C Loan into shares of Common Stock, pursuant to Section 15 of this
Agreement, at any time during the 30 day period after the Borrowers'
delivery of written notice of the proposed prepayment of the Term
C Loan and (B) no such prepayment of the Term C Loan shall be made
unless, both before and after giving effect thereto, availability is
not less than $1,000,000. All amounts outstanding under the Term C
Loan shall constitute Obligations.
(e) Section 2.5(b)(i) of the Loan Agreement hereby is amended and restated
in its entirety to read as follows:
(b) Apportionment, Application of Payments, and
Reversal of Payments. (i) Except as otherwise provided with respect to
Defaulting Lenders, aggregate principal and interest payments shall be
apportioned ratably among the Lenders (according to the unpaid
principal balance of each Lender's Advances and Term Loans as to which
such payments relate), and payments of the fees (other than fees
designated for Agent's sole and separate account) shall, as applicable,
be apportioned ratably among the Lenders. All payments shall be
remitted to Agent and all such payments not relating to principal of or
interest on specific Advances or the Term Loans (other than payments
constituting payment of specific fees) and all proceeds of Collateral
received by Agent pursuant to this Agreement or any other Loan
Document, shall be applied:
first, to pay any fees or Lender Group Expenses then
due to Agent from Borrowers until paid in full;
second, to pay any fees or Lender Group Expenses then
due to Lenders from Borrowers;
third, to pay interest due in respect of all Foothill
Loans and Agent Advances until paid in full;
fourth, to pay interest due in respect of all Advances
(other than Foothill Loans and Agent Advances) until paid in full;
fifth, so long as no Event of Default has occurred
and is continuing or, if an Event of Default has occurred and is continuing and
Agent agrees in its sole discretion, to pay interest due in respect of the Term
Loans until paid in full (if an Event of Default has occurred and is continuing
and Agent has not so agreed, the priority of such amounts is deferred to item
"ninth");
sixth, to pay or prepay principal of Foothill Loans
and Agent Advances until paid in full;
seventh, ratably to pay principal of the Advances
(other than Foothill Loans and Agent Advances);
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eighth, to be held by Agent as cash collateral in
accordance with Section 2.2(e) hereof with respect to unreimbursed obligations
in respect of Letters of Credit until paid in full;
ninth, to pay interest due in respect of the Term
Loans until paid in full;
tenth, when due and payable, to pay the principal of
the Term A Loan and the Term B Loan until paid in full;
eleventh, when due and payable, to pay the principal
of the Term C Loan until paid in full; and
twelfth, ratably to pay any other Obligations due to
Agent or any Lender by Borrowers.
Agent shall promptly distribute to each Lender,
pursuant to the applicable wire transfer instructions received from each Lender
in writing, such funds as it may be entitled to receive, subject to a Settlement
delay as provided for in Section 2.1(h).
(f) Section 2.7(a) of the Loan Agreement hereby is amended and restated in
its entirety to read as follows:
(a) Interest Rate. Except as provided in clause (b)
below: (i) all Obligations (except for the Term Loan Obligations and
amounts undrawn under Letters of Credit) shall bear interest at a per
annum rate of 0.625 percentage point above the Reference Rate; (ii) all
Term Loan Obligations with respect to Term A Loan and Term B Loan shall
bear interest at a per annum rate of 12.50 percent; provided, however,
the interest rate on such Term Loans shall automatically increase to 13
percent per annum on the first anniversary of the Closing Date and
shall automatically increase to 14 percent per annum on the second
anniversary of the Closing Date; and (iii) all Term Loan Obligations
with respect to Term C Loan shall bear interest at a per annum rate of
5.00 percentage points above the Reference Rate.
(g) Section 2.7(c) of the Loan Agreement hereby is amended and restated in
its entirety to read as follows:
(c) Default Rate. Upon the occurrence and during the
continuation of an Event of Default: (i) all Obligations (except for
the Term Loan Obligations and amounts undrawn under Letters of Credit)
shall bear interest at a per annum rate equal to 2.625 percentage
points above the Reference Rate; (ii) all Term Loan Obligations with
respect to Term A Loan or Term B Loan shall bear interest at a per
annum rate equal to 2.00 percentage points above the interest rate
applicable to such Term Loans at such time; (iii) the Letter of Credit
fee provided in Section 2.7(b) shall be increased to 3.50% per annum
times the amount of the undrawn Letters of Credit that were outstanding
during the immediately preceding month; and (iv) all Term Loan
Obligations with respect to Term C Loan shall bear interest at a per
annum rate equal to 2.00 percentage points above the interest rate
applicable to such Term Loans at such time.
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(h) Section 2.7(d) of the Loan Agreement hereby is amended and restated in
its entirety to read as follows:
(d) Minimum Interest. (i) In no event shall
the rate of interest chargeable under Section 2.7(a)(i)for any day be less than
7.00% per annum. To the extent that interest accrued hereunder at the rate set
forth in Section 2.7(a)(i) would be less than the foregoing minimum daily rate,
the interest rate chargeable under Section 2.7(a)(i) for such day automatically
shall be deemed increased to such minimum rate.
(ii) In no event shall the rate of interest
chargeable under Section 2.7(a)(iii) for any day be less than 13.50% per annum.
To the extent that interest accrued hereunder at the rate set forth in Section
2.7(a)(iii) would be less than the foregoing minimum daily rate, the interest
rate chargeable under Section 2.7(a)(iii) for such day automatically shall be
deemed increased to such minimum rate.
(i) Section 2.12(b) of the Loan Agreement hereby is amended and restated in
its entirety to read as follows:
(b) Second Amendment Closing Fees. On or before
the Second Amendment Closing Date, (i) a supplemental closing fee, for the
ratable benefit of the Lenders with a Revolving Credit Commitment, of $100,000,
and (ii) a supplemental closing fee, for the sole and separate account of the
Term C Loan Lender, of $200,000; (j) Section 2.12(c) of the Loan Agreement
hereby is amended and restated in its entirety to read as follows:
(c) Annual Facility Fee. (i) On each
anniversary of the Closing Date, an annual facility fee in an amount equal to
0.25% of the Maximum Revolving Amount; (ii) on each of the first and the second
anniversaries of the Closing Date, a facility fee in an amount equal to 0.50% of
the then outstanding principal amount of the Term A Loan and the Term B Loan;
and (iii) on each anniversary of the Second Amendment Closing Date, a facility
fee, for the sole and separate account of the Term C Loan Lender, in an amount
equal to 1.00% of the then outstanding principal amount of the Term C Loan; (k)
Section 3.3(f) of the Loan Agreement hereby is amended and restated in its
entirety to read as follows:
(f) within 45 days of the Second Amendment Closing
Date, Agent and the Lenders shall have received an updated business
valuation appraisal of Borrower's Broadband Systems Division and of
Vital (as previously required under the First Amendment, which
authorized the Matco outsourcing transaction described therein) from
appraisers acceptable to the Agent, which valuation appraisal shall be
in conformity with the form and methodology used by Xxxxxx Xxxxxxxx in
the valuation appraisals delivered to the Lender Group in May 1999 and
otherwise in form and substance satisfactory to Agent.
-7-
(l) The following hereby is added to the Loan Agreement as a new Section
3.3(g) in proper alphanumerical order:
(g) Within 15 days following the Second Amendment
Closing Date, Agent shall have received duly executed originals of the
Term C Loan Registration Rights Agreement, in form and substance
satisfactory to the Term C Loan Lender, and the same shall be in full
force and effect.
(m) Section 7.11 of the Loan Agreement hereby is amended and restated in
its entirety to read as follows:
7.11 Distributions. Make any distribution or declare or pay
any dividends (in cash or other property, other than capital Stock) on,
or purchase, acquire, redeem, or retire any of such Borrower's capital
Stock, of any class, whether now or hereafter outstanding, except that
(i) a Subsidiary of any Borrower may pay dividends to such Borrower,
(ii) so long as both before and after giving effect thereto, no Default
or Event of Default has occurred and is continuing and Availability is
not less than $1,000,000, Parent may pay regularly scheduled quarterly
dividends on its 9% Cumulative Convertible Exchangeable Preferred
Stock, (iii) Parent may receive shares of its Common Stock in
consideration for the exercise of stock options granted to its
employees and directors (so long as no cash consideration is paid by
Parent or any of its Subsidiaries), (iv) Parent may cancel or retire
options in accordance with its stock option plans (so long as Parent
does not make any cash payments in connection therewith, and (v) Parent
may exchange its 9% Cumulative Convertible Exchangeable Preferred Stock
for a corresponding amount of its 9% Convertible Subordinated
Debentures or its Common Stock (but not for any other consideration).
(n) Section 7.17 of the Loan Agreement hereby is amended and restated in
its entirety to read as follows:
7.17 Use of Proceeds. (a) Use the proceeds of the
Advances and the Term A Loan and Term B Loan made hereunder for any
purpose other than (i) on the Closing Date, (y) to repay in full the
outstanding principal, accrued interest, and accrued fees and expenses
owing to Existing Lender, and (z) to pay transactional costs and
expenses incurred in connection with this Agreement, and (ii)
thereafter, consistent with the terms and conditions hereof, for its
lawful and permitted corporate purposes.
(b) Use the proceeds of the Term C Loan made
hereunder for any purpose other than (i) solely on the Second Amendment
Closing Date, (y) to pay transactional costs and expenses incurred in
connection with the Second Amendment, and (z) to repay outstanding
Advances, and (ii) thereafter, consistent with the terms and conditions
hereof, for its lawful and permitted corporate purposes.
(o) Section 7.20 of the Loan Agreement hereby is amended and restated in
its entirety to read as follows:
-8-
7.20 Financial Covenant. Fail to maintain Net Worth
at the end of each fiscal quarter of the Parent of at least
$10,018,000, determined in accordance with GAAP as in effect on the
Closing Date. If GAAP changes subsequent to the Closing Date, the
Parent will deliver to the Agent, within the Applicable Period, a
statement reconciling the calculation of Net Worth using GAAP as it
existed on the Closing Date to the Net Worth calculation based upon
financial statements delivered to the Agent for such fiscal quarter.
(p) Section 15 of the Loan Agreement hereby is amended and restated in its
entirety to read as follows:
15. CONVERSION
15.1. Privilege. (a) Subject to the further
provisions of this Section 15.1, the holder of the Term B Loan
(individually and collectively, the "Term B Loan Lender") may make one
or more elections to convert up to an aggregate of $3,000,000 of the
principal amount of the Term B Loan, at any time or from time-to-time
outstanding, into Common Stock at a price equal to the then Term B Loan
Conversion Price. The number of shares of Common Stock issuable upon
conversion of the Term B Loan shall be determined by dividing the
amount of the Term B Loan elected to be converted by the Term B Loan
Lender by the then Term B Loan Conversion Price. The Term B Loan Lender
shall be entitled to the rights of a holder of Common Stock only to the
extent that the Term B Loan Lender has exercised its privilege to
convert Term B Loan into Common Stock.
(b) Subject to the further provisions
of this Section 15.1, the holder of the Term C Loan
(individually and collectively, the "Term C Loan Lender") may make one
or more elections to convert up to an aggregate of $4,000,000 of the
principal amount of the Term C Loan, at any time or from time-to-time
outstanding, into Common Stock at a price equal to the Term C Loan
Conversion Price. The number of shares of Common Stock upon conversion
of the Term C Loan shall be determined by dividing the amount of the
Term C Loan elected to be converted by the Term C Loan Lender by the
then Term C Loan Conversion Price. The Term C Loan Lender shall be
entitled to the rights of a holder of Common Stock only to the extent
that the Term C Loan Lender has exercised its privilege to convert Term
C Loan into Common Stock.
15.2. Procedure. To convert a portion of the Term B
Loan or the Term C Loan, as the case may be, the Term B Loan Lender or
the Term C Loan Lender, as the case may be, shall (a) furnish on the
Conversion Date a written notice of its election to convert such
portion of the Term B Loan or the Term C Loan, as the case may be, as
it may designate in such written notice (the "Conversion Amount") to
the Parent, and (b) surrender the note (if any) evidencing the Term B
Loan or the Term C Loan, as the case may be, to the Parent in exchange
for a new note in an amount equal to the difference between (i) the
then outstanding principal amount of the Term B Loan or the Term C
Loan, as the case may be, and (ii) the Conversion Amount plus the
aggregate amount of any prior Conversion Amounts relative to Term B
Loan or Term C Loan, as the case may
-9-
be. The date on which the Term B Loan Lender or the Term C Loan
Lender, as the case may be, satisfies such requirements is the
"Conversion Date." Within ten days of the applicable Conversion Date,
the Parent shall deliver to the Term B Loan Lender or the Term C Loan
Lender, as the case may be, a certificate for the number of whole
shares of the Common Stock issuable upon the conversion. The
person in whose name the certificate is registered shall be deemed
to be a shareholder of record on the Conversion Date.
15.3. Fractional Shares. The Parent will not
issue fractional shares of Common Stock upon conversion of the Term B
Loan or the Term C Loan. The number of shares of Common Stock to be
issued shall be rounded down to the nearest whole number.
15.4. Taxes on Conversion. If the Term B Loan Lender
converts the Term B Loan, the Parent shall pay any documentary, stamp
or similar issue or transfer tax due on the issue of shares of Common
Stock upon such conversion. If the Term C Loan Lender converts the Term
C Loan, the Parent shall pay any documentary, stamp or similar issue or
transfer tax due on the issue of shares of Common Stock upon such
conversion.
15.5. Parent to Provide Stock. (a) At all times, the
Parent shall from and after the date hereof reserve, out of its
authorized but unissued Common Stock, a sufficient number of shares of
Common Stock to permit (i) the conversion of up to $3,000,000 of the
Term B Loan into shares of Common Stock, and (ii) the conversion of up
to $4,000,000 of the Term C Loan into shares of Common Stock.
(b) All shares of Common Stock delivered upon
conversion of the Term B Loan shall be newly issued shares or treasury
shares, shall be duly authorized, validly issued, fully paid and
nonassessable and shall be free from preemptive rights and free of any
lien or adverse claim. All shares of Common Stock delivered upon
conversion of the Term C Loan shall be newly issued shares or treasury
shares, shall be duly authorized, validly issued, fully paid and
nonassessable and shall be free from preemptive rights and free of any
lien or adverse claim.
(c) The Parent will endeavor promptly to comply with
all federal and state securities laws regulating the offer and delivery
of shares of Common Stock upon conversion, if any, of the Term B Loan
or the Term C Loan, as the case may be, and will comply with the terms
and provisions of the applicable Registration Rights Agreement.
15.6. Adjustment of Conversion Price. The
Conversion Price shall be adjusted from time to time by the Parent as
follows:
(a) In case the Parent shall (i) pay a dividend in
shares of Common Stock to all holders of Common Stock, (ii) make a
distribution in shares of Common Stock to all holders of Common Stock,
(iii) subdivide its outstanding Common Stock into a greater number of
shares, or (iv) combine its outstanding Common Stock into a smaller
number of shares, the applicable Conversion Price in effect immediately
prior thereto shall
-10-
be adjusted so that the Term B Loan Lender or the Term C Loan Lender,
as the case may be, shall be entitled to receive that number of shares
of Common Stock which it would have owned had the Term B Loan or the
Term C Loan, as the case may be, been converted immediately prior
to the happening of such event. An adjustment made pursuant to this
subsection (a) shall become effective immediately after the
record date in the case of a dividend in shares or distribution
and shall become effective immediately after the effective date in the
case of subdivision or combination.
(b) In case the Parent shall issue rights or warrants
to all or substantially all holders of Common Stock entitling them (for
a period commencing no earlier than the record date described below and
expiring not more than 90 days after such record date) to subscribe for
or purchase shares of Common Stock (or securities convertible into
Common Stock) at a price per share less than the current market price
per share of Common Stock (as determined in accordance with subsection
(e) of this Section 15.6) at the record date for the determination of
shareholders entitled to receive such rights or warrants, the
applicable Conversion Price in effect immediately prior thereto shall
be adjusted so that the same shall equal the price determined by
multiplying such Conversion Price in effect immediately prior to such
record date by a fraction of which the numerator shall be the number of
shares of Common Stock outstanding on such record date, plus the number
of shares which the aggregate offering price of the total number of
shares of Common Stock so offered (or the aggregate applicable
Conversion Price of the convertible securities so offered) would
purchase at such current market price, and of which the denominator
shall be the number of shares of Common Stock outstanding on such
record date plus the number of additional shares of Common Stock
offered (or into which the convertible securities so offered are
convertible). Such adjustment shall be made successively whenever any
such rights or warrants are issued, and shall become effective
immediately after such record date. If at the end of the period during
which such rights or warrants are exercisable not all rights or
warrants shall have been exercised, the applicable adjusted Conversion
Price shall be immediately readjusted to what it would have been based
upon the number of additional shares of Common Stock actually issued
(or the number of shares of Common Stock issuable upon conversion of
convertible securities actually issued).
(c) In case the Parent shall distribute to all or
substantially all holders of Common Stock any shares of capital stock
(other than Common Stock) of the Parent evidences of indebtedness or
other non-cash assets (including securities of any company other than
the Parent), or shall distribute to all or substantially all holders of
Common Stock rights or warrants to subscribe for or purchase any of its
securities (excluding those referred to in subsection (b) of this
Section 15.6) ("Rights"), then in each such case the applicable
Conversion Price shall be adjusted so that the same shall equal the
price determined by multiplying such Conversion Price in effect
immediately prior to the date of such distribution by a fraction of
which the numerator shall be the current market price per share (as
defined in subsection (e) of this Section 15.6) of Common Stock on the
record date mentioned below less the fair market value on such record
date (as determined by the Board of Directors of the Parent, whose
determination shall be conclusive evidence of such fair market value)
of the portion of the capital stock or assets or evidences of
-11-
indebtedness so distributed or of such rights or warrants applicable to
one share of Common Stock (determined on the basis of the number of
shares of Common Stock outstanding on the record date), and of which
the denominator shall be the current market price per share (as defined
in subsection (e) of this Section 15.6) of Common Stock on such record
date. Such adjustment shall become effective immediately after the
record date for the determination of shareholders entitled to receive
such distribution. Notwithstanding the foregoing, in the event that the
Parent shall distribute Rights (other than those referred to in
subsection (b) of this Section 15.6) pro rata to holders of Common
Stock, the Parent may, in lieu of making any adjustment pursuant to
this Section 15.6, make proper provision so that the Term B Loan Lender
or the Term C Loan Lender, as the case may be, upon conversion of the
Term B Loan or the Term C Loan, as the case may be, after the record
date for such distribution and prior to the expiration or redemption of
the Rights shall be entitled to receive upon such conversion, in
addition to the shares of Common Stock issuable upon such conversion
(the "Conversion Shares"), a number of Rights to be determined as
follows: (i) if such conversion occurs on or prior to the date for the
distribution to the holders of Rights of separate certificates
evidencing such Rights (the "Distribution Date"), the same number of
Rights to which the Term B Loan Lender or the Term C Loan Lender, as
the case may be, of a number of shares of Common Stock equal to the
number of Conversion Shares is entitled at the time of such conversion
in accordance with the terms and provisions of and applicable to the
Rights and (ii) if such conversion occurs after the Distribution Date,
the same number of Rights to which the Term B Loan Lender or the Term C
Loan Lender, as the case may be, of the number of shares of Common
Stock into which the outstanding principal amount of the Term B Loan or
the Term C Loan, as the case may be, together with all accrued and
unpaid interest thereon so converted was convertible immediately prior
to the Distribution Date would have been entitled on the Distribution
Date in accordance with the terms and provisions of and applicable to
the Rights.
(d) In case the Parent shall, by dividend or
otherwise, at any time distribute (a "Triggering Distribution") to all
or substantially all holders of Common Stock cash in an aggregate
amount that, together with the aggregate amount of any other cash
distributions to all or substantially all holders of Common Stock made
within the 12 months preceding the date of payment of the Triggering
Distribution and in respect of which no applicable Conversion Price
adjustment pursuant to this Section 15.6 has been made, exceeds 50% of
the product of the current market price per share of Common Stock (as
determined in accordance with subsection (e) of this Section 15.6) on
the Business Day (the "Determination Date") immediately preceding the
day on which such Triggering Distribution is declared by the Parent,
multiplied by the number of shares of Common Stock outstanding on such
date (excluding shares held in the treasury of the Parent), the
applicable Conversion Price shall be reduced so that the same shall
equal the price determined by multiplying such Conversion Price in
effect immediately prior to the Determination Date by a fraction of
which the numerator shall be the current market price per share of
Common Stock (as determined in accordance with subsection (e) of this
Section 15.6) on the Determination Date less the amount of cash so
distributed within such 12 months (including, without limitation, the
Triggering Distribution) applicable to
-12-
one share of Common Stock (determined on the basis of the number
of shares of Common Stock outstanding on the Determination Date)
and the denominator shall be such current market price per share of
Common Stock (as determined in accordance with subsection (e)
of this Section 15.6) on the Determination Date, such reduction
to become effective immediately prior to the opening of business on
the day following the date on which the Triggering Distribution is
paid.
(e) For the purpose of any computation under
subsections (b), (c) and (d) of this Section 15.6, the current market
price per share of Common Stock on any date shall be deemed to be the
average of the daily closing prices for the 30 consecutive Trading Days
commencing 35 Trading Days before (i) the Determination Date with
respect to distributions under subsection (d) of this Section 15.6 or
(ii) the record date with respect to distributions, issuances or other
events requiring such computation under subsection (b) or (c) of this
Section 15.6. The closing price for each day shall be the last reported
sales price or, in case no such reported sale takes place on such date,
the average of the reported closing bid and asked prices in either case
on the New York Stock Exchange or, if Common Stock is not listed or
admitted to trading on the New York Stock Exchange, on the principal
national securities exchange on which Common Stock is listed or
admitted to trading or, if not listed or admitted to trading on any
national securities exchange, the closing sales price of Common Stock
as quoted by NASDAQ or, in case no reported sales takes place, the
average of the closing bid and asked prices as quoted by NASDAQ or any
comparable system or, if Common Stock is not quoted on NASDAQ or any
comparable system, the closing sales price or, in case no reported sale
takes place, the average of the closing bid and asked prices, as
furnished by any two members of the National Association of Securities
Dealers, Inc. selected from time to time by the Parent for that
purpose. If no such prices are available, the current market price per
share shall be the fair value of a share of Common Stock as determined
by the Board of Directors of the Parent.
15.7. Notice of Adjustment. Whenever the Term B Loan
Conversion Price is adjusted, the Parent shall promptly mail to the
Term B Loan Lender a notice of the adjustment briefly stating the facts
requiring the adjustment and the manner of computing it. Whenever the
Term C Loan Conversion Price is adjusted, the Parent shall promptly
mail to the Term C Loan Lender a notice of the adjustment briefly
stating the facts requiring the adjustment and the manner of computing
it.
15.8 Notice of Certain Transactions. In the
event that:
(1) the Parent proposes to take any action which
would require an adjustment in any Conversion Price;
(2) the Parent enters into any agreement for its
consolidation or merger with, or transfer of all or substantially all
of its assets to, another corporation and shareholders of the Parent
must approve the transaction; or
(3) there is a proposal for the dissolution or
liquidation of the Parent;
-13-
then, in each case, the Parent shall at least ten days before such
date, mail to the Term B Loan Lender or the Term C Loan Lender, as the
case may be, a notice stating the proposed effective date.
15.9. Effect of Reclassification, Consolidation,
Merger or Sale on Conversion Privilege. If any of the following events
shall occur with respect to the Parent, namely: (a) any
reclassification or change of shares of Common Stock (other than a
change in par value, or from par value to no par value, or from no par
value to par value, or as a result of a subdivision or combination, or
any other change for which an adjustment is specifically provided in
Section 15.6); (b) any consolidation or merger to which the Parent is a
party other than a merger in which the Parent is the continuing
corporation or other entity and which does not result in any
reclassification of, or change (other than a change in name, or in par
value, or from par value to no par value, or from no par value to par
value, or as a result of a subdivision or combination) in, outstanding
shares of Common Stock; or (c) any sale or conveyance of all or
substantially all of the assets of the Parent, as an entirety, then the
Parent or such successor or purchasing corporation or other entity, as
the case may be, shall, as a condition precedent to such
reclassification, change, consolidation, merger, sale or conveyance,
execute and deliver to the Term B Loan Lender or the Term C Loan
Lender, as the case may be, an agreement providing that the Term B Loan
Lender or the Term C Loan Lender, as the case may be, shall have the
right to convert the Term B Loan or the Term C Loan, as the case may
be, into the kind and amount of shares of stock and other securities
and property (including cash) receivable upon such reclassification,
change, consolidation, merger, sale or conveyance by a holder of the
number of shares of Common Stock issuable upon conversion of the Term B
Loan or the Term C Loan, as the case may be, immediately prior to such
reclassification, change, consolidation, merger, sale or conveyance.
Such agreement shall provide for adjustments of the Conversion Price
which shall be as nearly equivalent as may be practicable to the
adjustments of the Conversion Price provided for in this Section 15,
mutatis mutandis. If, in the case of any such consolidation, merger,
sale or conveyance, the stock or other securities and property
(including cash) receivable thereupon by a holder of Common Stock
include shares of stock, membership interests, or other securities and
property of a corporation or other entity other than the successor or
purchasing corporation or other entity, as the case may be, in such
consolidation, merger, sale or conveyance, then such agreement shall
also be executed by such other corporation or other entity and shall
contain such additional provisions to protect the interests of the Term
B Loan Lender or the Term C Loan Lender, as the case may be, that are
comparable to the provisions set forth in this Section 15, mutatis
mutandis. The provisions of this Section 15.9 shall similarly apply to
successive consolidations, mergers, sales or conveyances, mutatis
mutandis.
(q) Schedule C-1 hereby is amended and restated in its entirety to read as
set forth in Annex I attached hereto.
2. Conditions. This Amendment shall become effective only upon satisfaction in
full of the following conditions precedent (the first date upon which all such
conditions have been satisfied being herein called the "Second Amendment Closing
Date"):
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(a) Agent shall have received on or before the
Second Amendment Closing Date the following, each in form and substance
satisfactory to Agent (and, where indicated, the applicable Lender) and, unless
indicated otherwise, dated as of the Second Amendment Closing Date:
(i) counterparts of this Amendment, duly
executed by the Borrowers and the Lenders Group;
(ii) the reaffirmation and consent of each
Guarantor attached hereto as Exhibit A, duly executed and
delivered by an authorized official of each entity thereof;
and
(iii) such other agreements, instruments,
approvals, opinions and other documents as Agent or any Lender
may reasonably request.
(b) (i) Agent shall have received, for the
benefit of the Lenders with a Revolving Credit Commitment, the fee described in
Section 2.12(b)(i) of the Loan Agreement; and (ii) the Term C Loan Lender shall
have received, for its sole and separate account, the fee described in Section
2.12(b)(ii) of the Loan Agreement.
(c) Borrowers shall have a minimum of $3,000,000
of unrestricted cash balances and Availability after the payment of all amounts
contemplated in Section 7.17(b) of the Loan Agreement and based upon a Borrowing
Base calculated using information as of a date no earlier than December 29,
1999, rolled forward to a date acceptable to the Agent, and after reserving for
amounts necessary to maintain Borrowers' current liabilities reasonably within
terms;
(d) the several counsel to the members of the
Lender Group shall have received payment, in immediately available funds, of all
accrued and unpaid attorneys fees and expenses constituting Lender Group
Expenses incurred in connection with this Amendment and the transactions
contemplated hereunder or reasonably ancillary hereto;
(e) The representations and warranties in
this Amendment, the Loan Agreement as amended by this Amendment, and the other
Loan Documents shall be true and correct in all respects on and as of the date
hereof, as though made on such date (except to the extent that such
representations and warranties relate solely to an earlier date);
(f) No Default or Event of Default shall have
occurred and be continuing on the date hereof, nor shall result from the
consummation of the transactions contemplated herein;
(g) No injunction, writ, restraining order,
or other order of any nature prohibiting, directly or indirectly, the
consummation of the transactions contemplated herein shall have been issued and
remain in force by any governmental authority against Borrower or the Lender
Group; and
-15-
(h) All other documents and legal matters in
connection with the transactions contemplated by this Amendment shall have been
delivered or executed or recorded and shall be in form and substance
satisfactory to Agent and its counsel.
3. Representations and Warranties. Each Borrower hereby represents and warrants
to the Lender Group that (a) the execution, delivery, and performance of this
Amendment and of the Loan Agreement, as amended by this Amendment, are within
its corporate or other organizational powers, have been duly authorized by all
necessary corporate action, and are not in contravention of any law, rule, or
regulation, or any order, judgment, decree, writ, injunction, or award of any
arbitrator, court, or governmental authority, or of the terms of its charter or
bylaws, or of any contract or undertaking to which it is a party or by which any
of its properties may be bound or affected, and (b) this Amendment and the Loan
Agreement, as amended by this Amendment, constitute such Borrower's legal,
valid, and binding obligation, enforceable against such Borrower in accordance
with its terms.
4. Further Assurances. Borrower shall execute and deliver all agreements,
documents, and instruments, in form and substance satisfactory to Agent, and
take all actions as Agent may reasonably request from time to time fully to
consummate the transactions contemplated under this Amendment and the Loan
Agreement, as amended by this Amendment.
5. Miscellaneous.
(a) Upon the effectiveness of this Amendment,
each reference in the Loan Agreement to "this Agreement", "hereunder", "herein",
"hereof" or words of like import referring to the Agreement shall mean and refer
to the Loan Agreement as amended by this Amendment.
(b) Upon the effectiveness of this Amendment, each
reference in the Loan Documents to the "Loan Agreement", "thereunder",
"therein", "thereof" or words of like import referring to the Loan Agreement
shall mean and refer to the Agreement as amended by this Amendment.
(c) This Amendment shall be governed by and construed
in accordance with the laws of the State of New York.
-16-
(d) This Amendment may be executed in any number
of counterparts and by different parties on separate counterparts, each of
which, when executed and delivered, shall be deemed to be an original, and all
of which, when taken together, shall constitute but one and the same Amendment.
Delivery of an executed counterpart of this Amendment by telefacsimile shall be
equally as effective as delivery of a manually executed counterpart of this
Amendment. Any party delivering an executed counterpart of this Amendment by
telefacsimile also shall deliver a manually executed counterpart of this
Amendment but the failure to deliver a manually executed counterpart shall not
affect the validity, enforceability, and binding effect of this Amendment.
(e) This Amendment is a Loan Document.
[Remainder of this page intentionally left blank]
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IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be duly executed as of the date first above written.
GENERAL DATACOMM INDUSTRIES, INC.,
a Delaware corporation
By /S/ XXXXXXX X. XXXXX
Title: Vice President
GENERAL DATACOMM, INC.,
a Delaware corporation
By /S/ XXXXXXX X. XXXXX
Title: Vice President
DATACOMM LEASING CORPORATION,
a Delaware corporation
By /S/ XXXXXXX X. XXXXX
Title: Vice President
VITAL NETWORK SERVICES, L.L.C.,
a Delaware limited liability company
By /S/ XXXXXXX X. XXXXX
Title: Vice President
GDC FEDERAL SYSTEMS, INC.,
a Delaware corporation
By /S/ XXXXXXX X. XXXXX
Title: Vice President
GDC NAUGATUCK, INC.,
a Delaware Corporation
By /S/ XXXXXXX X. XXXXX
Title: Vice President
FOOTHILL CAPITAL CORPORATION,
a California corporation, as Agent
and a Lender
By /S/ XXXXX XXXXXX
Title: Vice President
ABLECO FINANCE LLC, as a Lender
By /S/ XXXXX XXXXX
Title: SVP & Chief Credit Officer
A2 FUNDING LP, as a Lender
By: A2 FUND MANAGEMENT LLC,
its General Partner
By /S/ XXXXXXXXX X. XXXXXXXX
Title: Vice President
-19-
ANNEX I
Schedule C-1
Commitments
Revolving Loan Commitment Dollar Amount Percentage
------------------------- ------------- ----------
Foothill $35,000,000 100%
Ableco $-0- -0-%
A2 Funding $-0- -0-%
Term A Loan Commitment Dollar Amount Percentage
---------------------- ------------- ----------
Foothill $-0- -0-%
Ableco $12,000,000 100%
A2 Funding $-0- -0-%
Term B Loan Commitment Dollar Amount Percentage
---------------------- ------------- ----------
Foothill $-0- -0-%
Ableco $-0- -0-%
A2 Funding $3,000,000 100%
Term C Loan Commitment Dollar Amount Percentage
---------------------- ------------- ----------
Foothill $-0- -0-%
Ableco $10,000,000 50%
A2 Funding $10,000,000 50%
EXHIBIT A
Reaffirmation and Consent
-------------------------
All capitalized terms used herein but not otherwise defined
herein shall have the meanings ascribed to them in that certain Amendment Number
Two to Loan and Security Agreement, dated as of December 30, 1999 (the
"Amendment"). The undersigned hereby jointly and severally (a) represent and
warrant to the Lender Group that the execution, delivery, and performance of
this Reaffirmation and Consent are within each of their corporate or
organizational powers, have been duly authorized by all necessary corporate or
other organizational action, and are not in contravention of any law, rule, or
regulation, or any order, judgment, decree, writ, injunction, or award of any
arbitrator, court, or governmental authority, or of the terms of its charter or
bylaws, or of any contract or undertaking to which either of them is a party or
by which any of their properties may be bound or affected; (b) consents to the
amendment of the Loan Agreement by the Amendment; (c) acknowledges and reaffirms
its obligations owing to the Lender Group under its respective guaranty and each
of the other Loan Documents to which it is party; and (d) agrees that each of
the guaranties and the other Loan Documents to which they are parties is and
shall remain in full force and effect. Although the undersigned have been
informed of the matters set forth herein and have acknowledged and agreed to
same, they understand that the Lender Group has no obligation to inform it of
such matters in the future or to seek its acknowledgement or agreement to future
amendments, and nothing herein shall create such a duty.
GDC REALTY, INC.
By /S/ XXXXXXX X. XXXXX
Title: Vice President
DATACOMM RENTAL CORPORATION
By /S/ XXXXXXX X. XXXXX
Title: Vice President
GENERAL DATACOMM INTERNATIONAL CORP.
By /S/ XXXXXXX X. XXXXX
Title: Vice President
GENERAL DATACOMM CHINA, LTD.
By /S/ XXXXXXX X. XXXXX
Title: Vice President
GENERAL DATACOMM LIMITED (ENGLAND)
By /S/ XXXXXXX X. XXXXX
Title: Vice President
VITAL NETWORK SERVICES, LTD.
By /S/ XXXXXXX X. XXXXX
Title: Vice President
GENERAL DATACOMM LTD. (CANADA)
By /S/ XXXXXXX X. XXXXX
Title: Vice President
