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EXHIBIT 10.6
FIRST AMENDMENT
TO
FOURTH AMENDED AND RESTATED LOAN AGREEMENT
This First Amendment to Fourth Amended and Restated Loan Agreement
(this "Amendment") is entered into effective as of March 27, 1998, by and
between the following parties:
a. BEARCOM OPERATING, L.P. (the "Company"), and
x. XXXXX FARGO BANK (TEXAS), NATIONAL ASSOCIATION (the "Bank").
RECITALS:
a. On August 29, 1997, the Company and the Bank entered into that
certain Fourth Amended and Restated Loan Agreement (the "Loan Agreement"; terms
defined in the Loan Agreement and used herein shall have the definitions herein
as ascribed in the Loan Agreement, unless otherwise defined herein) in which the
Bank agreed to provide certain loans and other accommodations to the Company
upon the conditions and in accordance with the covenants set forth therein.
b. Concurrently herewith, Condor Holdings, Inc. ("Condor
Acquisition Corp."), a direct subsidiary of BearCom, Inc. ("Parent"), who is the
Company's indirect parent, is entering into an asset purchase agreement whereby
Condor Acquisition Corp. will purchase all or substantially all of the assets of
Condor Communications, Inc. ("Condor") for a total cash purchase price not to
exceed Ten Million Dollars ($10,000,000) (the "Condor Acquisition").
c. The Company has requested that the Bank provide funds for the
Condor Acquisition and permit it to loan or otherwise distribute such funds in
an amount not to exceed Ten Million Dollars ($10,000,000) to Parent (such loan
or distribution in such amount herein, the "Condor Acquisition Advance"). Parent
will then contribute, loan or otherwise distribute such funds to Condor
Acquisition Corp. The Bank has agreed to provide such funds and permit the
Condor Acquisition Advance upon and subject to the terms and conditions of this
Amendment and the terms and conditions of the Loan Agreement, as amended hereby.
d. Subsequent to the date hereof but prior to June 1998, Parent
intends to issue capital stock through an initial public offering (the "Parent
IPO"), which may result in a change in the control of the Company of the type
restricted by Section 15(k) of the Loan Agreement.
e. The Company has requested that the Bank consent to the Parent
IPO, and the Bank has agreed to give such consent upon the terms and conditions
of this Amendment and the terms and conditions of the Loan Agreement, as amended
hereby.
f. The Company has also advised the Bank that Events of Default
have occurred under Subsection 17(d) of the Loan Agreement as a result of the
Company's failure to comply with the
FIRST AMENDMENT TO FOURTH AMENDED AND RESTATED LOAN AGREEMENT - Page 1
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covenants set forth in (i) Subsection 16(a) of the Loan Agreement as of October
31, 1997, November 30, 1997 and December 31, 1997; (ii) Subsection 16(b) of the
Loan Agreement as of September 30, 1997, October 31, 1997, November 30, 1997,
December 31, 1997, and January 31, 1998; (iii) Subsections 14(a) through (e) of
the Loan Agreement for periods prior to the date hereof; and (iv) Subsection
15(d) of the Loan Agreement, which prohibits the Company's making any
acquisition for consideration in excess of $500,000, due to the acquisitions
made by the Company in 1997 (the Events of Default described above are herein
collectively called the "Existing Defaults", and the covenants in the
Subsections specifically described above, herein the "Violated Covenants").
g. The Company has requested that the Bank waive the Existing
Defaults, and the Bank agrees to waive the Existing Defaults upon the terms and
conditions of this Amendment and the Loan Agreement, as amended hereby.
AGREEMENT:
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained, and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
1. Waivers and Consents.
A. The Bank hereby waives the Existing Defaults.
B. The Bank hereby consents to the Company's departure from
Subsection 15(k) of the Loan Agreement to the extent such covenant is
violated by the Parent IPO.
C. The Bank hereby waives the Company's compliance with the
covenant set forth in Subsection 16(b) of the Loan Agreement from the
date hereof through and including May 30, 1998. The Company's
obligation to comply with the covenant set forth in subsection 16(b)
shall be reinstated and fully effective on and at all times after May
31, 1998.
D. The Bank hereby consents to the departure by the Company
from Subsections 15(g) or 15(h) of the Loan Agreement to the extent
such covenants are violated by the Condor Acquisition Advance and each
of the Bank and the Company agree that the acquisition of the assets of
Condor shall be a Revolver Acquisition under the Loan Agreement.
E. The waivers and consents specifically described in this
Section 1 shall not constitute and shall not be deemed a waiver of any
Event of Default other than the Existing Default or a consent to the
departure from provisions of the Loan Agreement other than as
specifically described above, or a waiver of any rights or remedies
arising as a result of any Events of Default other than the Existing
Default. The failure to comply with the Violated Covenants or the
covenants described in Sections 1 B, C or D above for any date,
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or any period ending on any date, or for any activity other than as
specifically described above shall constitute an Event of Default.
2. Amendments to the Loan Agreement. As of the date hereof, the
Loan Agreement is hereby amended as follows:
A. Subsection 1(a) of the Loan Agreement is amended in its
entirety to read as follows:
(a) Subject to, and upon the terms, conditions,
covenants and agreements contained herein, the Bank agrees to
loan the Company, at any time, and from time to time prior to
the maturity of the Company's promissory note executed in
conjunction with this Agreement, such amounts as the Company may
request up to but not exceeding an aggregate principal sum at
any time outstanding equal to $25,000,000 (the "Revolving Line
of Credit"); within such limits and during such period, the
Company may borrow, repay, and re-borrow hereunder. All loans
under the Revolving Line of Credit shall be evidenced by the
Company's Renewal Master Revolving Credit Note dated March 27,
1998 (the "Revolving Note"), in form and substance satisfactory
to the Bank, payable to the order of the Bank, and bearing
interest upon the terms provided therein (but in no event to
exceed the maximum non-usurious interest rate permitted by law).
The principal of and interest on the Revolving Note shall be due
and payable as set forth on the face of the Revolving Note.
Notation by the Bank on its records shall constitute prima facie
evidence of the amount and date of any payment or borrowing
thereunder. The Revolving Line of Credit shall be used by the
Company for its ordinary working capital needs, or for general
corporate purposes, or for its (or Parent's, in the case of the
Condor Acquisition only, as such term is defined in the First
Amendment to this Agreement) acquisition of all or substantially
all of the assets or capital stock of one or more operating
businesses (each such acquisition a "Revolver Acquisition").
B. Subsection 16(a) is amended in its entirety to read
as follows:
(a) Working Capital. Maintain at all times Working
Capital in an amount not less than $12,000,000. "Working
Capital" is defined as current assets less current liabilities,
with the exception that current assets will exclude prepaid
assets other than prepaid catalog expenses and current
liabilities shall at all times exclude amounts outstanding under
the Revolving Line of Credit.
C. Exhibits A, B-1 and B-2 are amended in their entireties
to read as set forth in Exhibits A, B-1 and B-2, respectively,
attached hereto.
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3. Conditions. The effectiveness of this Amendment is subject to
the satisfaction of each of the following conditions precedent:
A. Documents. Bank shall have received each of the following
duly executed documents, in form and substance satisfactory to the Bank:
(1) A guaranty agreement that guaranties the Bank
Indebtedness and is executed by Condor Acquisition Corp.;
(2) A security agreement that secures the Bank
Indebtedness and is executed by Condor Acquisition Corp.;
(3) A pledge agreement whereby Parent pledges all
of the shares of Condor Acquisition Corp. to secure the Bank
Indebtedness;
(4) A Revolving Note dated as of the date hereof;
(5) A consent to this Amendment, and a reaffirmation
of the applicable guaranty agreement, each executed by Parent,
Page-Com GP, Inc. and Bear Communications, Inc.;
(6) The written opinion of the Company's and the
Parent's counsel as to the validity and enforceability of this
Amendment and as to such other issues as are requested by the
Bank; and
(7) A Borrowing Base Certificate as of February 28,
1998, including the Free Cash Flow of Condor therein.
B. Confirmation of Releases. Bank shall have received, in
form and substance satisfactory to Bank, written confirmation of the
release of any and all liens of Condor or Condor Acquisition Corporation
and any other entity holding liens or security interests in or upon the
assets of Condor acquired by Condor Acquisition Corp. (other than
purchase money liens on specific equipment or inventory, or equipment
financing leases).
C. Governmental Certificates. Governmental Certificates,
each dated a current date, showing that each of the Company, Parent,
Condor Acquisition Corp., Condor and Page-Com GP, Inc. is duly organized
and in good standing in the jurisdiction of its incorporation or
registration.
D. Acquisition Documentation and Name Change. The Company
shall have provided to the Bank final, executed copies of each of the
agreements, bills of sale and other documents effecting the acquisition
of assets by Condor Acquisition Corp. from Condor.
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E. Payment of Bank's Fees and Cost. The Company agrees to
pay on the date of the execution of this Amendment to the Bank in
immediately available funds, an amendment fee equal to $12,500 and also
agrees to pay within ten (10) days of receipt of a statement, the
reasonable legal fees and expenses incurred by the Bank in connection
with this Amendment and the associated documentation.
F. Additional Information. The Bank shall have received
such additional information and materials as the Bank may reasonably
request, including, without imitation, evidence of the authority of
Company, Condor Acquisition Corp. and Parent to enter into this
Amendment and the documents contemplated hereby.
4. Representations and Warranties. The Company hereby represents
and warrants that (i) the execution, delivery and performance by the Company of
this Amendment have been duly authorized by all necessary corporate action and
will not violate the certificate of incorporation or bylaws of the Company; (ii)
this Amendment is a legal, valid and binding obligation of the Company
enforceable against the Company in accordance with its terms, except to the
extent that such enforcement may be limited by applicable bankruptcy, insolvency
and other similar laws affecting creditors' rights generally, or by general
principles of equity limiting the availability of certain remedies; (iii) the
representations and warranties set forth in the Loan Agreement, as amended
hereby, and all Loan Documents are true and correct on and as of the date hereof
as though made on and as of the date hereof; (iv) no Event of Default or event
that with the giving of notice or lapse of time or both would be an Event of
Default has occurred and is continuing other than the Existing Defaults; (v)
there are no claims or offsets against or defenses or counterclaims to the terms
and provisions of any obligations of the Company created or evidenced by the
Loan Agreement or other Loan Documents; (vi) all inventory and equipment of the
Company and each guarantor of the Bank Indebtedness is located at the locations
described on Schedule 1 hereto and no third parties are in possession of any
such collateral; (vii) Schedule 1 correctly identifies the landlord or mortgagee
of each location listed thereon; and (viii) neither the Company nor any
guarantor of the Bank Indebtedness owns any fixtures.
5. Miscellaneous.
A. Effectiveness. Except as specified herein, all terms and
conditions of the Loan Agreement and all other Loan Documents shall
remain unmodified and in full force and effect. The parties hereto agree
and acknowledge that neither the Bank's consent to, nor its knowledge
of, the execution of the agreements, bills of sale and other documents
described in the Recitals to this Amendment shall be construed as an
express or implied amendment or waiver of any term, condition or
restriction set forth in the Loan Agreement or other Loan Documents,
except as expressly amended or waived hereinabove. Further, the Company
hereby ratifies and reaffirms the Company's obligations and agreements
under the Loan Documents, agrees that the Loan Documents shall remain in
full force and effect, notwithstanding execution of this Amendment, and
agrees that the Loan Documents shall continue to be the legal, valid and
binding obligations of the Company, enforceable in accordance with the
terms therein. In furtherance of the foregoing, the Company agrees that
the "Obligations" as defined in the Security Agreement, include, without
limitation,
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the obligations, indebtedness and liability of the Company to the Bank
under the Loan Agreement, this Amendment and the Revolving Note
executed pursuant hereto.
B. Survival of Representations and Warranties. All
representations and warranties made in this Amendment or in any other
Loan Document shall survive the execution and delivery of this Amendment
and any other Loan Documents and no investigation by the Bank or any
closing shall affect the representations and warranties or the right of
the Bank to rely upon them.
C. Reference to Agreement. Each of the Loan Documents are
hereby amended so that any reference in such Loan Documents to the Loan
Agreement shall mean a reference to the Loan Agreement as amended
hereby.
D. Severability. Any provision of this Amendment held by a
court of competent jurisdiction to be invalid or enforceable shall not
impair or invalidate the remainder of this Amendment and any effect
thereof shall be confined to the provisions so held to be invalid or
unenforceable.
E. Successors and Assigns. This Amendment is binding upon
and shall inure to the benefit of the Company and the Bank and their
respective successors and assigns, except that the Company may not
assign or transfer any of its rights or obligations hereunder without
the prior written consent of the Bank.
F. Effective Waiver. No consent or waiver expressed or
implied by the Bank to or for any breach of or deviation from any
convent, condition or duty by the Company shall be deemed a consent or
waiver to or of any other breach of the same or any other covenant,
condition or duty.
G. Governing Law. This Amendment shall be governed by and
construed in accordance with the laws of the State of Texas.
H Counterparts. This Amendment may be executed in any
number of counterparts, all of which taken together shall constitute one
and the same agreement and any of the parties hereto may execute this
Amendment by signing any such counterpart.
I. NO ORAL AGREEMENTS. THIS AMENDMENT CONSTITUTES A WRITTEN
AGREEMENT THAT REPRESENTS THE FINAL AGREEMENT BETWEEN THE PARTIES AND
MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR
SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL
AGREEMENTS BETWEEN THE PARTIES RELATING TO THE LOAN DOCUMENTS.
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IN WITNESS WHEREOF, the Company and the Bank have caused this Amendment
to be duly executed as of the day and year first above written.
BEARCOM OPERATING, L.P.
By: Page-Com GP, Inc., its general partner
By:
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Xxxx X. Xxxxxx
President
XXXXX FARGO BANK (TEXAS),
NATIONAL ASSOCIATION
By:
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Xxxxx Xxxxxx
Vice President
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