EXHIBIT 10.1
SECOND AMENDMENT TO LOAN AGREEMENT
AND THIRD AMENDMENT
TO COLLATERAL ASSIGNMENT AND SECURITY AGREEMENT
THIS SECOND AMENDMENT TO LOAN AGREEMENT, AND THIRD AMENDMENT
TO COLLATERAL ASSIGNMENT AND SECURITY AGREEMENT (the "Amendment")
is made effective the 28th day of August, 1996, by and between
ELCOTEL, INC., a Delaware corporation ("Borrower"), and
NATIONSBANK, N.A. (SOUTH), a National Banking Association, as
successor in interest to NATIONSBANK OF FLORIDA, N.A. ("Lender").
RECITALS:
WHEREAS, Borrower being indebted to Lender, executed and
delivered to Lender a certain promissory note dated January 20,
1994, in the original principal amount of $1,000,000.00, which
note is secured by accounts receivable, notes receivable and
inventory, as evidenced by, among other loan documents, a
Collateral Assignment dated January 20, 1994, and a Security
Agreement dated January 20, 1994; and
WHEREAS, in connection with an additional $1,000,000.00 line
of credit loan Borrower executed a $1,000,000.00 promissory note
and a $2,000,000.00 Consolidation Promissory Note, both dated
August 31, 1994, as renewed by Renewal Promissory Note dated
August 31, 1995, and executed a Loan Agreement and an Amendment
to Collateral Assignment and Security Agreement both dated August
31, 1994 as amended by a First Amendment to Loan Agreement and
Second Amendment to Collateral Assignment and Security Agreement
dated August 31, 1995; and
WHEREAS, Borrower has requested Lender to renew the line of
credit loan in the amount of $2,000,000.00; and
WHEREAS, Borrower and Lender desire to amend the terms of
the Loan Agreement, Collateral Assignment and the Security
Agreement, as previously amended, to reflect the renewal of the
Line of Credit Loan.
NOW THEREFORE, in consideration of the premises and of the
agreements herein contained and the agreement by Lender to make
the Loan, the parties hereto agree as follows:
1. The above recitals are true and correct and are
incorporated herein by this reference.
2. The Note as defined in the Collateral Assignment shall
be deemed to include the Renewal Promissory Note in the amount of
$2,000,000.00 of even date herewith. Lender represents to the
best of its knowledge there is not currently a reserve
requirement imposed by the Federal Reserve System for
establishing Lender's Floating Libor Rate, as defined in such
notes, or any other additional costs as defined in Article 2(b)
in each of the above referenced notes.
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3. The obligations secured by the Loan Agreement,
Collateral Assignment and Security Agreement shall include all
debts, obligations, liabilities and agreements of Borrower to
Lender, now or hereafter existing, including but not limited to
the indebtedness evidenced by the $2,000,000.00 Renewal
Promissory Note of even date, and all renewals, extensions or
modifications thereof.
4. Paragraph 3 of the Addendum to Security Agreement and
paragraph 2.D. of the Loan Agreement are hereby modified to
delete all references to Eligible Note Portfolio from the formula
for determining the borrowing base. Borrower shall no longer be
entitled to request funds based upon Eligible Note Portfolio.
5. The definition of Debt Service Coverage Ratio in
Paragraph 1.F., is hereby replaced in its entirety with the
following:
"Debt Service Coverage Ratio. Debt Service
Coverage Ratio means Borrower's Net Income ("NI")
+ Depreciation ("D") + Amortization ("AMORT") less
Dividends ("DIV"), all divided by Current
Maturities of Long Term Debt ("CMLTD") and Current
Maturities of Capital Leases ("CMCL") (i.e.
(NI + D + AMORT - DIV
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CMLTD + CMCL)".
6. Paragraph 4.A.ii. is amended to provide Borrower shall
maintain a Debt Service Coverage Ratio of not less than 1.3:1.0
for the fiscal quarter end June 30, 1996, a Debt Service Coverage
Ratio of not less than 1.5:1.0 for the fiscal quarter end
September 30, 1996, a Debt Service Coverage Ratio of not less
than 2.0:1.0 for fiscal quarter end December 31, 1996, and
thereafter Borrower shall maintain a Debt Service Coverage Ratio
of not less than 2.0:1.0 measured on a rolling four (4) quarter
basis from the annual and quarterly financial statements,
commencing March 31, 1997. Prior to March 31, 1997, the Debt
Service Coverage Ratio shall be measured based upon only the
fiscal quarter end and not on a rolling four (4) quarter basis.
7. All references to Loan Agreement in the Security
Agreement and Collateral Assignment shall mean the Loan Agreement
dated August 31, 1994, as amended by Amendment to Loan Agreement
dated August 3, 1995, and by Second Amendment to Loan Agreement
dated of even date herewith by and between Borrower and Lender.
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8. Except as modified herein, all other terms and
conditions of the Loan Agreement, Collateral Assignment and the
Security Agreement, all as previously amended, shall remain
unchanged and in full force and effect.
IN WITNESS WHEREOF, the parties hereto have duly executed
this Amendment, and shall be conclusively deemed to have executed
such on the day and year first written above.
NATIONSBANK, N.A., (SOUTH) ELCOTEL, INC., a Delaware
a National Banking Association corporation
as successor in interest to
NATIONSBANK OF FLORIDA, N.A.
By:/s/ Xxxxxxx X. Xxxx By:/s/ Xxxxxx X. Xxxxx
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Xxxxxxx X. Xxxx Xxxxxx X. Xxxxx
Vice President Vice President and Chief
Financial Officer
Address: 0000 Xxxx Xxxxxx Address: 0000 Xxxxxxxx Xxxxx
Xxxxxxxx, XX 00000 Xxxxxxxx, XX 00000
(CORPORATE SEAL) (CORPORATE SEAL)
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