AMENDMENT NO. 6
EXHIBIT 10.1
TO
LOAN AND SECURITY AGREEMENT
THIS AMENDMENT NO. 6 TO LOAN AND SECURITY AGREEMENT
("Amendment"), dated the 24th day of June, 1998, made by and between
FLEET CAPITAL CORPORATION (formerly known as Shawmut Capital
Corporation and successor by assignment from Barclays Business Credit, Inc.),
a Rhode Island corporation (the "Lender"); and
COMDIAL CORPORATION ("Parent") and its wholly-owned subsidiaries
AMERICAN TELECOMMUNICATIONS CORPORATION ("ATC"), AMERICAN
PHONE CENTERS, INC. ("APC"), COMDIAL ENTERPRISE SYSTEMS, INC. ("CES"),
COMDIAL TELECOMMUNICATIONS INTERNATIONAL, INC. ("CTII"), TELECOM
TECHNOLOGIES CORPORATION (f/k/a Xxxxx Technologies Corporation) ("STC"),
COMDIAL CUSTOM MANUFACTURING, INC. ("CCM"), COMDIAL VIDEO
TELEPHONY, INC. ("CVT"), COMDIAL TECHNOLOGY CORPORATION ("CTC"),
COMDIAL TELECOMMUNICATIONS, INC. ("CTI"), AURORA SYSTEMS, INC.
("ASI"), KEY VOICE TECHNOLOGIES, INC. ("KVTI"), and CTI's wholly-owned
subsidiaries, COMDIAL BUSINESS COMMUNICATIONS CORPORATION ("CBCC"),
and COMDIAL CONSUMER COMMUNICATIONS CORPORATION ("CCCC"; Parent,
ATC, APC, CES, CTII, STC, CCM, CVT, CTC, CTI, ASI, KVTI, CBCC and CCCC being
hereinafter referred to collectively as the "Borrowers" and, individually,
as a "Borrower"), each a Delaware corporation,to the Loan and Security
Agreement, dated February 1, 1994 (as amended, modified, restated or
supplemented from time to time, the "Loan Agreement"). All capitalized terms
used herein without definition shall have the meanings ascribed to such terms
in the Loan Agreement.
RECITALS
A. Pursuant to the Loan Agreement, the Lender has agreed to make
loans and extend credit to the Borrowers secured by the Collateral and the
Realty.
B. The Loan Agreement was previously amended by a certain
Consolidated Amendment No. 1 thereto, dated March 13, 1996, a certain Amendment
No. 2 thereto, dated June 28, 1996, and a certain Amendment No. 3 thereto,
dated September 27, 1996, a certain Amendment No. 4 thereto, dated March 27,
1997, and a certain Amendment No. 5 thereto, dated March 13, 1998.
C. The Borrowers and the Lender now desire to further amend the
Loan Agreement as set forth herein.
STATEMENT OF AGREEMENT
NOW, THEREFORE, in consideration of the premises and for other good
and valuable consideration, the receipt and sufficiency of which are hereby
expressly acknowledged, the Borrowers and the Lender hereby agree as follows:
ARTICLE I
AMENDMENTS TO LOAN AGREEMENT
The Loan Agreement is hereby amended as follows:
1.1. Minimum Consolidated Adjusted Tangible Net Worth. Section
9.3(A) is amended in its entirety to read as follows:
"(A) Minimum Consolidated Adjusted Tangible Net Worth. Maintain a
Consolidated Adjusted Tangible Net Worth of not less than the amount shown
below at all times during the period corresponding thereto:
Consolidated Adjusted
Period Tangible Net Worth
Second fiscal quarter of fiscal year $27,500,000
ending December 31, 1998
Third fiscal quarter of fiscal year $30,500,000
ending December 31, 1998
Fourth fiscal quarter of fiscal year $32,000,000
ending December 31, 1998
Fourth fiscal quarter of fiscal year $32,750,000
ending December 31, 1999 and at all
times thereafter
1.2 Profitability. Section 9.3(B) is amended in its entirety to
read as follows:
"(B) Profitability. Achieve a Consolidated Adjusted Earnings From
Operations of not less than the amount shown below for the period corresponding
thereto:
Consolidated Adjusted
Period Earnings From Operations
First and second fiscal quarters of ($3,500,000)
fiscal year ending December 31, 1998
First, second and third fiscal quarters ($1,500,000)
of fiscal year ending December 31, 1998
Fiscal year ending December 31, 1998 $ 500,000
First fiscal quarter of fiscal year ending $ 250,000
December 31, 1999 and the first quarter of
each fiscal year thereafter
First and second fiscal quarters of fiscal $1,100,000
year ending December 31, 1999 and the
first and second fiscal quarters of each
fiscal year thereafter
First, second and third fiscal quarters of $2,750,000
fiscal year ending December 31, 1999 and
the first, second and third fiscal quarters
of each fiscal year thereafter
Fiscal year ending December 31, 1999 and $4,500,000
each fiscal year thereafter"
1.3 Consolidated Debt Service Coverage Ratio. Section 9.3(C)
is amended in its entirety to read as follows:
"(C) Consolidated Debt Service Coverage Ratio. Maintain a
Consolidated Debt Service Coverage Ratio of not less than the ratio shown
below for the period corresponding thereto:
Consolidated Debt
Period Service Coverage Ratio
First and second fiscal quarters of fiscal .negative (.70) to 1.0
year ending December 31, 1998
First, second and third fiscal quarters of 0.7 to 1.0
fiscal year ending December 31, 1998
Fiscal year ending December 31, 1998 1.7 to 1.0
First fiscal quarter of fiscal year ending .30 to 1.0
December 31, 1999 and the first fiscal
quarter of each fiscal year thereafter
First and second fiscal quarters of fiscal .75 to 1.0
year ending December 31, 1999 and the
first and second fiscal quarters of each
fiscal year thereafter
First, second and third fiscal quarters of 1.5 to 1.0
fiscal year ending December 31, 1999 and
the first, second and third fiscal quarters
of each fiscal year thereafter
Fiscal year ending December 31, 1999 and 1.7 to 1.0
each fiscal year thereafter"
1.4 Debt/EBITDA. Section 9.3(E) is amended in its entirety to
read as follows:
(E) Debt/EBITDA. Maintain for each period of four (4)
consecutive fiscal quarters, commencing with the fiscal quarter ending
September 29, 1996, a ratio of (a) Indebtedness for Money Borrowed of Parent
and its Subsidiaries at the end of such period calculated on a Consolidated
basis to (b) the sum of (i) EBITDA for such period less (ii) the greater of
the amount of Capital Expenditures made by Parent and its Subsidiaries during
such period or $1,500,000, of not greater than the ratio shown below for the
period corresponding thereto:
Four (4) Consecutive
Fiscal Quarters Ending With Debt/EBITDA Ratio
Second fiscal quarter of fiscal year ending 4.001.0
December 31, 1998
Third fiscal quarter of fiscal year ending 3.00 to 1.0
December 31, 1998
Fourth fiscal quarter of fiscal year ending 2.80 to 1.0
December 31, 1998
First fiscal quarter of fiscal year ending 2.90 to 1.0
December 31, 1999 and each fiscal year
thereafter
Second fiscal quarter of fiscal year ending 2.75 to 1.0
December 31, 1999 and each fiscal year
thereafter
Third fiscal quarter of fiscal year ending 2.50 to 1.0
December 31, 1999 and each fiscal year
thereafter
Fourth fiscal quarter of fiscal year ending 2.50 to 1.0
December 31, 1999 and each fiscal year
thereafter"
ARTICLE II
REPRESENTATIONS AND WARRANTIES
Each Borrower hereby represents and warrants to the Lender that:
2.1. Compliance with the Loan Agreement and Other Loan Documents.
As of the execution of this Amendment, each Borrower is in compliance with
all of the terms and provisions set forth in the Loan Agreement and in the
other Loan Documents to be observed or performed by such Borrower, except
where the failure of such Borrower to comply has been waived in writing by
the Lender.
2.2. Representations in Loan Agreement and other Loan Documents.
The representations and warranties of each Borrower set forth in the Loan
Agreement and the other Loan Documents are true and correct in all material
respects except for any changes in the nature of any Borrower's business or
operations which have occurred in the ordinary course of business that would
render the information contained in any exhibit attached to the Loan
Agreement either inaccurate or incomplete in any material respect, so long
as (a) the Lender has consented to such changes, (b) such changes are not
expressly prohibited by the Loan Agreement, or (c) with
respect to matters Borrowers are required to notify Lender of pursuant to
Sections 4.9(E) or 9.1(A), Borrowers have given notice as required by such
sections.
2.3. No Event of Default. After giving effect to this Amendment,
no Default or Event of Default exists.
ARTICLE III
MODIFICATION OF LOAN DOCUMENTS
3.1. Loan Documents. The Loan Agreement and each of the other Loan
Documents are amended to provide that any reference to the Loan Agreement in
the Loan Agreement or any of the other Loan Documents shall mean the Loan A
greement as amended by this Amendment, and as it is further amended, restated,
supplemented or modified from time to time.
ARTICLE IV
GENERAL
4.1. Full Force and Effect. As expressly amended hereby, the Loan
Agreement shall continue in full force and effect in accordance with the
provisions thereof. As used in the Loan Agreement, "hereinafter", "hereto",
"hereof" or words of similar import, shall, unless the context
otherwise requires, mean the Loan Agreement as amended by this Amendment.
4.2 Applicable Law. This Amendment shall be governed by and
construed in accordance with the internal laws and judicial decisions of the
State of North Carolina.
4.3 Counterparts. This Amendment may be executed in one or more
counterparts, each of which shall constitute an original, but all of which
when taken together shall constitute but one and the same instrument.
4.4 Expenses. Borrowers shall reimburse the Lender for all
reasonable fees and expenses (legal or otherwise) incurred by the Lender in
connection with the preparation, negotiation, execution and delivery of this
Amendment and all other agreements and documents or contemplated hereby.
4.5. Headings. The headings in this Amendment are for the purpose
of reference only and shall not affect the construction of this Amendment.
4.6 Waiver of Jury Trial. TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW, EACH BORROWER AND THE LENDER EACH WAIVES THE
RIGHT TO TRIAL BY JURY IN ANY ACTION, SUIT, PROCEEDING OR
COUNTERCLAIM OF ANY KIND ARISING OUT OF OR RELATED TO THIS
AMENDMENT, THE LOAN AGREEMENT OR THE OTHER LOAN DOCUMENTS OR
THE TRANSACTIONS RELATED HERETO OR THERETO.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
be executed and delivered on the date first above written.
BORROWERS:
ATTEST COMDIAL CORPORATION
/s/ Xxxxx X. Xxxxxxxx By: /s/ Xxxxxxxxx X. Xxxxxx
Assistant Secretary Xxxxxxxxx X. Xxxxxx
Senior Vice President
ATTEST AMERICAN TELECOMMUNICATIONS
CORPORATIONS
/s/ Xxxxx X. Xxxxxxxx By: /s/ Xxxxxxxxx X. Xxxxxx
Assistant Secretary Xxxxxxxxx X. Xxxxxx
Senior Vice President
ATTEST AMERICAN PHONE CENTERS, INC.
/s/ Xxxxx X. Xxxxxxxx By: /s/ Xxxxxxxxx X. Xxxxxx
Assistant Secretary Xxxxxxxxx X. Xxxxxx
Senior Vice President
ATTEST COMDIAL ENTERPRISE SYSTEMS,
INC.
/s/ Xxxxx X. Xxxxxxxx By: /s/ Xxxxxxxxx X. Xxxxxx
Assistant Secretary Xxxxxxxxx X. Xxxxxx
Senior Vice President
ATTEST COMDIAL TELECOMMUNICATIONS
INTERNATIONAL, INC.
/s/ Xxxxx X. Xxxxxxxx By: /s/ Xxxxxxxxx X. Xxxxxx
Assistant Secretary Xxxxxxxxx X. Xxxxxx
Senior Vice President
ATTEST TELECOM TELECOMMUNICATIONS, INC.
(f/k/a Xxxxx Technologies Corporation)
/s/ Xxxxx X. Xxxxxxxx By: /s/ Xxxxxxxxx X. Xxxxxx
Assistant Secretary Xxxxxxxxx X. Xxxxxx
Senior Vice President
ATTEST COMDIAL CUSTOM MANUFACTURING,
INC.
/s/ Xxxxx X. Xxxxxxxx By: /s/ Xxxxxxxxx X. Xxxxxx
Assistant Secretary Xxxxxxxxx X. Xxxxxx
Senior Vice President
ATTEST COMDIAL VIDEO TELEPHONY, INC.
/s/ Xxxxx X. Xxxxxxxx By: /s/ Xxxxxxxxx X. Xxxxxx
Assistant Secretary Xxxxxxxxx X. Xxxxxx
Senior Vice President
ATTEST COMDIAL TECHNOLOGY
CORPORATION
/s/ Xxxxx X. Xxxxxxxx By: /s/ Xxxxxxxxx X. Xxxxxx
Assistant Secretary Xxxxxxxxx X. Xxxxxx
Senior Vice President
ATTEST COMDIAL TELECOMMUNICATIONS,
INC.
/s/ Xxxxx X. Xxxxxxxx By: /s/ Xxxxxxxxx X. Xxxxxx
Assistant Secretary Xxxxxxxxx X. Xxxxxx
Senior Vice President
ATTEST AURORA SYSTEMS, INC.
/s/ Xxxxx X. Xxxxxxxx By: /s/ Xxxxxxxxx X. Xxxxxx
Assistant Secretary Xxxxxxxxx X. Xxxxxx
Senior Vice President
ATTEST KEY VOICE TECHNOLOGIES, INC.
/s/ Xxxxx X. Xxxxxxxx By: /s/ Xxxxxxxxx X. Xxxxxx
Assistant Secretary Xxxxxxxxx X. Xxxxxx
Senior Vice President
ATTEST COMDIAL BUSINESS
COMMUNICATIONS CORPORATION
/s/ Xxxxx X. Xxxxxxxx By: /s/ Xxxxxxxxx X. Xxxxxx
Assistant Secretary Xxxxxxxxx X. Xxxxxx
Senior Vice President
ATTEST COMDIAL CONSUMER
COMMUNICATIONS CORPORATION
/s/ Xxxxx X. Xxxxxxxx By: /s/ Xxxxxxxxx X. Xxxxxx
Assistant Secretary Xxxxxxxxx X. Xxxxxx
Senior Vice President
LENDER:
FLEET CAPITAL CORPORATION
BY: \S\ Xxxxxx X. Xxxxxxxx
Title: Senior Vice President
