FOURTH AMENDMENT TO CREDIT AGREEMENT
THIS FOURTH AMENDMENT TO CREDIT AGREEMENT (this "AMENDMENT") made and
entered into as of September 30, 1999, between VODAVI COMMUNICATIONS SYSTEMS,
INC. ("BORROWER") and GENERAL ELECTRIC CAPITAL CORPORATION, a New York
corporation ("LENDER").
W I T N E S S E T H:
WHEREAS, the Borrower and the Lender entered into a certain Credit
Agreement, dated as of April 11, 1994, as amended (the "CREDIT AGREEMENT";
capitalized terms used herein and not otherwise defined herein shall have the
meanings given such terms in the Credit Agreement), whereby the Lender agreed to
make certain loans to the Borrower, subject to the terms, covenants and
conditions contained in the Credit Agreement; and
WHEREAS, the Borrower has requested that the Lender modify the Credit
Agreement to extend the maturity date of the Revolving Credit Facility, increase
the Commitment, increase the percentage of Eligible Inventory used in
calculating the Borrowing Base, to reduce the Non-use Fee, and to change the
address of the Borrower for communications under the Credit Agreement, and the
Lender is willing to make such modifications, subject to the terms and
conditions of this Amendment;
NOW, THEREFORE, in consideration of the premises and 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. AMENDMENTS. (a) The definition of "BORROWING BASE" in Section 1.1 of the
Credit Agreement is hereby deleted in its entirety and replaced by the
following:
"BORROWING BASE" shall mean at any time an amount not to exceed
the sum of: (i) 85% of Eligible Accounts, and (ii) up to the lesser
of: (A) $6,000,000 and (B) not more than 65% of Eligible Inventory in
each case (Eligible Accounts and Eligible Inventory) as shown on the
most recently delivered Borrowing Base Certificate delivered by the
Borrower, less such additional reserves as Lender shall deem
reasonably necessary.
(b) The definition of "MATURITY DATE" in Section 1.1 of the
Credit Agreement is hereby deleted in its entirety and replaced by the
following:
"MATURITY DATE" shall mean the date that is the later of: (i)
April 11, 2003, and (ii) the date to which, upon prior mutual written
agreement of the Borrower and Lender, the expiration of the Revolving
Credit Facility has been extended.
(c) Section 2.1(a) of the Credit Agreement is hereby deleted in its
entirety and replaced by the following:
(a) CREDIT. Upon and subject to the terms and conditions hereof,
Lender agrees from time to time to make available by deposit to the
Disbursement Account on any Business Day until the Commitment
Termination Date, upon the request of Borrower therefor, advances
(each, a "REVOLVING CREDIT ADVANCE") in an aggregate amount
outstanding that, when added to the aggregate balance of Letter of
Credit Obligations then outstanding, shall not at any given time
exceed the lesser of (the "REVOLVING CREDIT ADVANCE AVAILABILITY"):
(i) $15,000,000, as such amount may be terminated pursuant to the
terms of SECTION 2.5 OR 8.2 (the "COMMITMENT"), and (ii) the Borrowing
Base.
(d) Section 2.3(b) of the Credit Agreement is hereby deleted in its
entirety and replaced by the following:
(b) NON-USE FEE. As additional compensation for Lender's costs
and risks in making the Commitment available to Borrower, Borrower
agrees to pay to Lender, in arrears for the preceding month, on the
first Business Day of each month prior to the Commitment Termination
Date and on the Commitment Termination Date, a fee for Borrower's
non-use of the Commitment (the "NON-USE FEE") in an amount equal to
one eighth of one percent (0.125%) per annum on the average daily
Revolving Credit Commitment Availability.
(e) The address of the Borrower contained in Section 9.10 of the
Credit Agreement is hereby deleted in its entirety and replaced by the
following:
Vodavi Communications Systems, Inc.
0000 Xxxx Xxxxxxxx Xxxxx
Xxxxxxxxxx, Xxxxxxx 00000
Attention: Xxxxx Xxxxxx, Chief Financial Officer
Telecopy No.: (000) 000-0000
2. REPRESENTATIONS AND WARRANTIES. The Borrower hereby represents and
warrants to the Lender that (a) this Amendment has been duly authorized,
executed and delivered by the Borrower, (b) no Default has occurred and is
continuing as of this date, and (c) each of the representations and warranties
of the Borrower made in or pursuant to this Amendment and the other Financing
Documents is true and correct, except to the extent that any such representation
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or warranty expressly relates to an earlier date and except for changes therein
expressly permitted or expressly contemplated by the Credit Agreement, both
before and after giving effect to this Amendment. Any breach by the Borrower of
its representations and warranties contained in this Section 2 shall be an Event
of Default for all purposes of the Credit Agreement.
3. RATIFICATION. The Borrower hereby ratifies and reaffirms each and every
term and condition set forth in the Credit Agreement and all other documents
delivered by the Borrower in connection therewith (including without limitation
the other Loan Documents to which the Borrower is a party), effective as of the
date hereof.
4. ESTOPPEL. To induce the Lender to enter into this Amendment, the
Borrower hereby acknowledges and agrees that, as of the date hereof, there
exists no right of offset, defense or counterclaim in favor of the Borrower as
against the Lender with respect to the obligations of the Borrower under the
Credit Agreement or the other Loan Documents, either with or without giving
effect to this Amendment.
5. CONDITIONS TO EFFECTIVENESS. The Amendments contained in Section 1 shall
become effective upon the date of this Amendment, subject to the satisfaction of
the following conditions on or prior to such date:
(a) the receipt by the Lender of this Amendment, together with the Consent
attached hereto, duly executed, completed and delivered by the Lender, the
Borrower, and the other Credit Parties;
(b) the receipt by the Lender of a certificate signed by the chief
financial officer or treasurer of the Borrower to the effect that, as of the
date of this Amendment, (i) no Default shall have occurred and be continuing and
(ii) each of the representations and warranties of the Credit Parties made in or
pursuant to this Amendment and the other Financing Documents executed by such
Person is true, except to the extent that any such representation or warranty
expressly relates to an earlier date and except for changes therein expressly
permitted or expressly contemplated by the Credit Agreement, both before and
after giving effect to this Amendment;
(c) the receipt by the Lender of such other documents as the Lender may
reasonably request.
6. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK FOR CONTRACTS TO BE PERFORMED
ENTIRELY WITHIN SAID STATE.
7. SEVERABILITY OF PROVISIONS. Any provision of this Amendment which is
prohibited by, or invalid under the Applicable Law of any jurisdiction shall be
ineffective to the extent of such prohibition or invalidity in such jurisdiction
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without invalidating the remaining provisions hereof or affecting the validity
or enforceability of such provision in any other jurisdiction. To the extent
permitted by Applicable Law, Borrower hereby waives any provision of law that
renders any provision hereof unenforceable in any respect.
8. COUNTERPARTS. This Amendment may be executed in any number of
counterparts, all of which shall be deemed to constitute but one original and
shall be binding upon all parties, their successors and permitted assigns.
9. ENTIRE AGREEMENT. The Credit Agreement as amended by this Amendment
embodies the entire agreement between the parties hereto relating to the subject
matter hereof and supersede all prior agreements, representations and
understandings, if any, relating to the subject matter hereof.
[Remainder of Page Intentionally Left Blank]
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed by their respective duly authorized officers, as of the date first
above written.
VODAVI COMMUNICATIONS
SYSTEMS, INC.
By: /s/ Xxxxx X. Xxxxxx
Name: Xxxxx X. Xxxxxx
Title: Chief Financial Officer
GENERAL ELECTRIC CAPITAL
CORPORATION
By: /s/ Xxxxxxx X. Xxxxxxxxx
Name: Xxxxxxx X. Xxxxxxxxx
Title: Duly Authorized Signatory
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CONSENT
The undersigned Credit Party hereby acknowledges and consents to, and
agrees to the terms of, the foregoing Fourth Amendment to Credit Agreement, and
ratifies and confirms its obligations under the Loan Documents, as of the date
of the foregoing Amendment.
ENHANCED SYSTEMS, INC.
By: /s/ Xxxxx X. Xxxxxx
Name: Xxxxx X. Xxxxxx
Title: Chief Financial Officer
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