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Exhibit 4(a)(1)(G)
SIXTH AMENDMENT AND WAIVER dated as of
October 17, 1997 to the Revolving Credit
Loan Agreement dated January 31, 1995 (the
"Agreement"), as amended by the First
Amendment dated as of August 3, 1995, the
Second Amendment and Waiver dated as of
November 10, 1995, Amendment of Revolving
Credit Loan Agreement dated December 27,
1995, the Fourth Amendment and Waiver dated
as of May 2, 1997, and the Fifth Amendment
and Waiver dated as of September 23, 1997
(the Agreement together with each of the
amendments, the "Loan Agreement") among TII
International, Inc., a Delaware Corporation
with offices at 0000 Xxxxx Xxxxxx, Xxxxxxxx,
Xxx Xxxx 00000 (the "Borrower"), TII
Industries, Inc., a Delaware corporation
with offices at 0000 Xxxxx Xxxxxx, Xxxxxxxx,
Xxx Xxxx 00000 ("Industries") and The Chase
Manhattan Bank (f/k/a Chemical Bank), a New
York State Banking corporation with offices
at 000 Xxxxx Xxxxxxx Xxxx, Xxxxx 000,
Xxxxxxxx, Xxx Xxxx 00000 (the "Bank") and to
the Master Lease Purchase Agreement Number
00009, dated January 12, 1998, as amended by
a letter dated February 1, 1996 (the "Lease
Agreement") by and between the Borrower and
Chase Equipment Leasing, Inc. (f/k/a
ChemLease Worldwide, Inc.) ("Leasing").
Capitalized terms used but not otherwise
defined herein shall have the meanings set
forth in the Loan Agreement.
WHEREAS, the Lease Agreement provides that the financial covenants
contained in any credit facility provided by the Bank to the Borrower shall
apply to the Lease Agreement as continuing covenants; and
WHEREAS, the Borrower and Industries have requested and the Bank and
Leasing have each agreed, subject to the terms and conditions of this Sixth
Amendment and Waiver, to amend and waive compliance with certain provisions of
the Loan Agreement and the Lease Agreement (by incorporation) to reflect
requests made by the Borrower to the Bank and Leasing in the manner hereafter
set forth;
NOW, THEREFORE, In consideration of the premises and of other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:
1. Waiver of and Amendment to Article 7, Negative Covenant, Section 7.16.
Compliance with Section 7.16 of the Loan Agreement is hereby waived for
the Fiscal Quarter ending September 26, 1997, provided that the
Consolidated Net Loss during such Fiscal Quarter does not exceed Five
Hundred Thousand and No/100 Dollars ($500,000).
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The Borrower, Industries and the Subsidiaries will be permitted to
Incur (i) a Consolidated Net Loss for fiscal Quarter ending December
26, 1997 provided that such loss for such Fiscal Quarter does not
exceed Five Hundred Thousand and No/100 Dollars ($500,000) and (ii) a
Consolidated Net Loss (excluding extraordinary gains) for four Fiscal
Quarters in the four Fiscal Quarter period ending March 27, 1998; and
two Fiscal Quarters in the four Fiscal Quarter period ending June 26,
1998.
2. Waiver of and Amendment to Article 7, Negative Covenants. Section 7.17
Debt Service Ratio.
Compliance with Section 7.17 of the Loan Agreement is hereby waived for
the Fiscal Quarter ending September 26, 1997 to permit the Debt Service Ratio of
Industries and its subsidiaries to be no less than -0.6 to 1 for such Fiscal
Quarter. The Borrower, Industries and the Subsidiaries will be permitted to have
a Debt Service Ratio of not less than (i) -0.7 to 1 for the Fiscal Quarter
ending December 26, 1997; (ii) -0.7 to 1 for the Fiscal Quarter ending March 27,
1998 and (iii) -0.1 to 1 for the Fiscal Quarter ending June 26, 1998.
3. Amendment to Article 8. Events of Default. Section 8.01(n).
Section 8.01(n) is hereby deleted in its entirety and replaced with the
following:
(n) (i) the Xxxxx Family Member shall cease to own
7.5% of all voting stock in Industries, or (ii)
Xxxxxxx X. Xxxxx shall cease to actively manage the
day-to-day operations of the Borrower and the
Guarantors;
4. Amendment to Article 6. Affirmative Covenants applicable to the Loans.
Article 6. Of the Loan Agreement is hereby amended by the addition of
the following section:
Section 6.16. Equity Offering. Borrower, Industries
and the Subsidiaries agrees that in the event that
Borrower, Industries and/or the Subsidiaries complete
one or more equity offering (whether private or
public or a combination thereof) in an amount equal
to or greater than $3,500,000 in the aggregate
(collectively, the "Equity Offering") the Bank and
the Borrower, Industries and the Subsidiaries will
agree to a modification of the existing negative
covenants contained in Article 7 of this Loan
Agreement to reflect the equity raised as a result of
the Equity Offering, provided that if no agreement is
reached within 45 days following completion of the
Equity Offering, the Bank, in its sole discretion,
may terminate the commitment and declare all amounts
outstanding pursuant to this Loan Agreement, the Note
and the other Financing Documents to be immediately
due and payable. The Bank may require another such
modification for each Equity Offering that occurs
after such a modification.
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Expenditures
Section 7.09 shall be modified by adding the following language to the
end of the existing covenant:
except that during fiscal years ending June 26, 1998 and June
25, 1999, the Borrower, Industries and the Subsidiaries shall
be permitted to make capital expenditures (including capital
leases) for property, plant, machinery and equipment in an
amount not to exceed $10,000,000 in the aggregate during such
Fiscal Years, provided that (i) the capital expenditures
incurred during Fiscal Year ending June 26, 1998 shall not
exceed $6,000,000 and (ii) the Equity Offering is completed by
December 26, 1997, and raises gross proceeds (before
discounts, commissions and expenses) of at least $7,000,000.
THIS SIXTH AMENDMENT AND WAIVER shall be construed and enforced in
accordance with the laws of the State of New York.
Except as expressly amended or waived hereby, the Loan Agreement and
the Lease Agreement shall remain in full force and affect in accordance with the
original terms thereof. This Sixth Amendment and Waiver herein is limited
specifically to the matters set forth above and does not constitute directly or
by implication a waiver or amendment of any other provision of the Loan
Agreement or the Lease Agreement or any breach, default or Event of Default
which may occur or may have occurred under the Loan Agreement or the Lease
Agreement.
The Borrower and Industries hereby represent and warrant that, after
giving effect to this Sixth Amendment and Waiver, no Event of Default or
defaults exists under the Loan Agreement, the Lease Agreement or any other
related documents.
THIS SIXTH AMENDMENT AND WAIVER may be executed in any number of
counterparts, each of which shall constitute an original but all of which, when
taken together, shall constitute but one Sixth Amendment and Waiver.
THIS SIXTH AMENDMENT AND WAIVER shall become effective when duly
executed counterparts hereof which, when taken together bear the signatures of
each of the parties hereto shall have been delivered to the Bank and Leasing.
IN WITNESS WHEREOF, the Borrower, Industries, the Bank and Leasing have
caused
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this Sixth Amendment and Waiver to be duly executed by their duly authorized
officers all as of the date and year first above written.
TII INTERNATIONAL, INC.
BY: /s/ Xxxx X. Xxxxxxx
Xxxx X. Xxxxxxx, Vice President
TII INDUSTRIES, INC.
BY: /s/ Xxxx X. Xxxxxxx
Xxxx X. Xxxxxxx, Vice President
THE CHASE MANHATTAN BANK
BY: /s/ Xxxxxxxxxxx X. Xxxxxxxxx
Xxxxxxxxxxx X. Xxxxxxxxx, Vice President
CHASE EQUIPMENT LEASING, INC.
BY: /s/ Xxxxxxx X. Masalitis
Xxxxxxx X. Masalitis, Vice President
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CONSENT
The undersigned, as Guarantors of the obligations of TII International,
Inc. Hereby Consent to the execution and delivery by TII International, Inc. and
TII Industries, Inc. of this Sixth Amendment and Waiver and hereby confirm that
they remain fully bound by the terms of the Joint and Several Guaranty of
Payment dated January 31, 1995 to which they are a party.
TII INTERNATIONAL, INC.
BY: /s/ Xxxx X. Xxxxxxx
Xxxx X. Xxxxxxx, Vice President
TII INDUSTRIES, INC.
BY: /s/ Xxxx X. Xxxxxxx
Xxxx X. Xxxxxxx, Vice President
TII DITEL, INC.
BY: /s/ Xxxx X. Xxxxxxx
Xxxx X. Xxxxxxx, Vice President
TII CORPORATION
BY: /s/ Xxxx X. Xxxxxxx
Xxxx X. Xxxxxxx, Vice President
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TELECOMMUNICATIONS INDUSTRIES, INC.
BY: /s/ Xxxx X. Xxxxxxx
Xxxx X. Xxxxxxx, Vice President
TII DOMINICANA, INC.
BY: /s/ Xxxx X. Xxxxxxx
Xxxx X. Xxxxxxx, Vice President
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