EXHIBIT 10.12
FIRST AMENDMENT TO
AMENDED AND RESTATED CREDIT AGREEMENT
THIS FIRST AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT
("Amendment") is made and entered into this 13th day of June, 2002, but
effective as of June 1, 2002 (the "Amendment Date"), by and among XETA
Technologies, Inc., an Oklahoma corporation (the "Borrower"), Bank One,
Oklahoma, N.A., and U.S. Bank National Association (formerly known as Firstar
Bank, N. A., successor by merger to Firstar Bank Missouri, National
Association), as Lenders under the Credit Agreement referred to below (the
"Lenders"), and Bank One, Oklahoma, N.A., as Agent (in such capacity, the
"Agent"), with reference to the following:
A. The Borrower, the Lenders and the Agent are parties to that certain
Amended and Restated Credit Agreement dated as of October 31, 2001 (the "Credit
Agreement"), pursuant to which the Lenders severally agreed to make Loans to the
Borrower under the Facilities therein described.
B. For the four fiscal quarters ended April 30, 2002, the Borrower
failed to maintain a Consolidated Debt Service Coverage Ratio of at least 1.15
to 1.0 as required by Section 6.24.2 of the Credit Agreement.
C. The Borrower has requested that the Lenders and the Agent waive the
Default arising by virtue of its failure to maintain the required minimum
Consolidated Debt Service Coverage Ratio at April 30, 2002, and the Lenders and
the Agent have agreed to such request, subject to the terms and conditions set
forth in this Amendment.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and agreements herein contained, and for other good and valuable
consideration, the receipt and adequacy of which are hereby acknowledged, the
parties hereby amend the Credit Agreement, effective as of the Amendment Date,
as follows:
1. DEFINITIONS. Capitalized terms used herein (including capitalized terms used
in the recitals above) but not otherwise defined have the respective meanings
assigned to them in the Credit Agreement.
2. WAIVER. As of the Amendment Date, and subject to the Borrower's satisfaction
of the conditions precedent set forth in Section 6 of this Amendment, the
Lenders and the Agent agree to waive the Borrower's non-compliance with Section
6.24.2 of the Credit Agreement at April 30, 2002, and any consequences of such
non-compliance (other than as set forth in this Amendment). The foregoing waiver
does not extend to any other existing Default or Unmatured Default (whether or
not known to the Borrower, the Lenders or the Agent) or to any Default or
Unmatured Default which may arise or occur after the Amendment Date. Nothing
contained in this Amendment shall be construed as waiving any other term or
condition of the Credit Agreement or any of the other Loan Documents or as
obligating the Lenders or the Agent to waive any future noncompliance or
Default.
3. REDUCTION IN REVOLVING CREDIT FACILITY. As of the Amendment Date, (i) the
Aggregate Revolving Credit Commitment (i.e., the aggregate amount available for
borrowing under the Revolving Credit Facility) is hereby reduced from
$9,000,000.00 to $5,000,000.00, and (ii) the Revolving Commitment of each of the
Lenders is hereby reduced to the amount set forth opposite its name on the
signature pages hereto directly underneath the caption "Revolving Credit
Commitment."
4. CHANGE IN PRICING. Effective as of the Amendment Date and continuing until
the Obligations have been paid in full, the Applicable Margin for all Eurodollar
Loans (whether Revolving Loans, Term Loans or R/E Term Loans) will be 3.75%, the
Applicable Margin for all Floating Rate Loans (whether Revolving Loans, Term
Loans or R/E Term Loans) will be 1.00%, and the Applicable Fee Rate will be
0.45%. The foregoing percentage rates shall supersede the Applicable Margins and
Applicable Fee Rates set forth in the Pricing Schedule attached to the Credit
Agreement.
5. FINANCIAL COVENANTS AT JULY 31, 2002.
A. Net Income Requirement. The Borrower covenants and agrees with the
Lenders that its Consolidated Net Income for the fiscal quarter ending July 31,
2002, will be at least $1.00. The Borrower further agrees that, in the event it
fails to achieve Consolidated Net Income of at least $1.00 for the fiscal
quarter ending July 31, 2002, such failure will constitute an immediate Default
under the Credit Agreement.
B. Noncompliance With Financial Covenants. The Borrower acknowledges
that, in the event that (i) the Borrower's Consolidated Debt Service Coverage
Ratio determined as of July 31, 2002, for the four fiscal quarters then ending,
is less than 1.15 to 1.0, and/or (ii) the ratio of the Borrower's Consolidated
Funded Indebtedness determined as of July 31, 2002, to Consolidated EBITDA for
the four fiscal quarters then ending is greater than 2.75 to 1.0, the Borrower
will be in noncompliance with Section 6.24.2 and/or 6.24.3 of the Credit
Agreement (as the case may be) and such noncompliance will constitute an
immediate Default under the Credit Agreement. In the event the Lenders are
requested to waive the Borrower's noncompliance with Section 6.24.2 and/or
6.24.3 of the Credit Agreement at July 31, 2002, the Lenders agrees to consider
such request, provided that the Borrower is then in compliance with all other
terms and conditions of the Credit Agreement (as amended by this Amendment) and
has satisfied the net income requirement set forth in Section 5.A of this
Amendment. However, the Lenders will not be obligated to approve such request,
and the Borrower acknowledges that the Lenders have given no assurance or
commitment that any such waiver request will be approved and that the Lenders
may refuse any such request in the exercise of their sole and absolute
discretion. If any such waiver request is granted, the Lenders agree that no
additional waiver or amendment fee will be required of the Borrower and that the
Applicable Margins and Applicable Fee Rate set forth in Section 4 of this
Agreement will not be increased as a condition of granting such waiver.
6. CONDITIONS PRECEDENT. This Amendment shall become effective as of the
Amendment Date, subject to the Borrower's satisfaction of the following
conditions precedent (in addition to the conditions precedent set forth in
Article IV of the Credit Agreement):
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A. Execution of Documents. This Amendment shall have been duly and
validly authorized, executed and delivered to the Agent and the Lenders by the
Borrower.
B. Resolutions. The Bank shall have received a copy of the resolutions
of the Board of Directors of the Borrower authorizing the decrease in the
Revolving Credit Facility, the modification to the Applicable Margins and the
execution, delivery and performance of this Amendment and the Credit Agreement
(as amended by this Amendment).
C. Accuracy of Representations and Warranties. All representations and
warranties made by the Borrower in the Credit Agreement and the other Loan
Documents and in Section 5 hereof shall be true and correct in all material
respects as of the Amendment Date (except to the extent any of such
representations and warranties with respect to the financial condition of the
Borrower refer to an earlier specified date).
D. No Default. There shall not have occurred any additional Default or
Unmatured Default as of the Amendment Date, and the Borrower shall be current in
payment of all principal, interest and fees due and owing to the Agent or the
Lenders as of the Amendment Date.
E. Waiver/Amendment Fee. The Borrower shall have paid to the Agent, for
the account of each Lender in accordance with each Lender's Pro Rata Share, a
waiver/amendment fee of $21,223.49 (which amount is equal to 1/10th of 1% of the
remaining aggregate Commitments).
7. REPRESENTATIONS AND WARRANTIES. All representations and warranties of
Borrower contained in Article V of the Credit Agreement remain true and correct
(except to the extent any representations and warranties as to the Borrower's
financial condition relate solely to an earlier specified date) and are hereby
remade and restated as the date hereof and shall survive the execution and
delivery of this Amendment. The Borrower further represents and warrants as
follows:
A. Authority. The Borrower has all requisite power and authority and
has been duly authorized to decrease the amount of the Aggregate Revolving
Credit Commitment, to modify the Applicable Margins, and to execute, deliver and
perform its obligations under this Amendment and the Credit Agreement (as
amended by this Amendment).
B. Binding Obligations; Enforceability. This Amendment and the Credit
Agreement (as amended by this Amendment) are valid and legally binding
obligations of the Borrower, enforceable in accordance with their respective
terms, except as limited by applicable bankruptcy, insolvency or other laws
affecting the enforcement of creditors' rights generally.
C. No Conflict; Government Consent. Neither the execution and delivery
by the Borrower of this Amendment, nor the consummation of the transactions
therein contemplated, nor compliance with the provisions thereof, will violate
(i) any law, rule, regulation, order, writ, judgment, injunction, decree or
award binding on the Borrower or any of its Subsidiaries, or (ii) the Borrower's
or any Subsidiary's articles or certificate of incorporation, partnership
agreement,
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certificate of partnership, articles or certificate of organization, by-laws, or
operating or other management agreement, as the case may be, or (iii) the
provisions of any indenture, instrument or agreement to which the Borrower or
any of its Subsidiaries is a party or is subject, or by which it, or its
Property, is bound, or conflict with or constitute a default thereunder, or
result in, or require, the creation or imposition of any Lien in, of or on the
Property of the Borrower or any of its Subsidiaries pursuant to the terms of any
such indenture, instrument or agreement. No order, consent, adjudication,
approval, license, authorization, or validation of, or filing, recording or
registration with, or exemption by, or other action in respect of any
governmental or public body or authority, or any subdivision thereof, which has
not been obtained by the Borrower or any of its Subsidiaries, is required to be
obtained by the Borrower or any of its Subsidiaries in connection with the
execution and delivery of this Amendment, the borrowings under the Credit
Agreement (as amended hereby), the payment and performance by the Borrower of
the Obligations, or the legality, validity, binding effect or enforceability of
this Amendment or the Credit Agreement (as amended by this Amendment).
D. No Material Adverse Change. Since April 30, 2002 (the date of the
latest financial statements of the Borrower which have been delivered to the
Agent and the Lenders), there has been no adverse change in the business,
Property, prospects, condition (financial or otherwise) or results of operations
of the Borrower and its Subsidiaries which could reasonably be expected to have
a Material Adverse Effect.
8. MISCELLANEOUS.
A. Effect of Amendment. The terms of this Amendment shall be
incorporated into and form a part of the Credit Agreement. Except as amended,
modified and supplemented by this Amendment, the Credit Agreement shall continue
in full force and effect in accordance with its original stated terms, all of
which are hereby reaffirmed in every respect as of the date hereof. In the event
of any irreconcilable inconsistency between the terms of this Amendment and the
terms of the Credit Agreement, the terms of this Amendment shall control and
govern, and the agreements shall be interpreted so as to carry out and give full
effect to the intent of this Amendment. All references to the "Credit Agreement"
appearing in any of the Loan Documents shall hereafter be deemed references to
the Credit Agreement as amended, modified and supplemented by this Amendment.
B. Descriptive Headings. The descriptive headings of the several
sections of this Amendment are inserted for convenience only and shall not be
used in the construction of the content of this Amendment.
C. Governing Law. This Amendment shall be construed and enforced in
accordance with, and the rights of the parties shall be governed by, the laws of
the State of Oklahoma.
D. Reimbursement of Expenses. The Borrower agrees to pay the reasonable
fees and out-of-pocket expenses of Xxxxx & Xxxxxxx, counsel to the Agent,
incurred in connection with the preparation of this Amendment and the
consummation of the transactions contemplated hereby.
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E. Release by Borrower. In consideration of the waivers and other
agreements of the Lenders and the Agent contained herein, the Borrower, for
itself and its officers, directors, agents, employees, successors and assigns,
hereby releases, acquits and forever discharges each of the Lenders and the
Agent, and each of their respective parent, subsidiary and affiliated companies
and each of their respective officers, directors, agents, employees, successors,
and assigns, and all other persons acting for or on behalf of the Lenders and/or
the Agent, of and from any and all manner of actions, causes of actions, suits,
debts, accounts, conveyances, agreements, damages, claims, demands, liabilities,
costs, and expenses of whatsoever kind or nature, including attorney's fees, in
law or in equity, known or unknown, anticipated or unanticipated and howsoever
arising or accruing, which the Borrower may now have or may claim to have
against the parties released or any of them, including, without limitation,
those arising out of or relating in any way to the Credit Agreement or the
administration of the Facilities thereunder, any other Loan Document or any
other agreement or document relating to the Facilities. It is understood and
agreed by the Borrower that this is a full and final release covering any and
all of the Borrower's actions, claims, debts, judgment, damages, objections,
costs, attorney's fees, demands or liabilities, whether known or unknown,
undisclosed and/or unanticipated, which may have arisen, or may arise from any
act or omission, prior to the date of the execution and delivery of this
Amendment.
[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK.
SIGNATURES APPEAR ON FOLLOWING PAGE.]
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IN WITNESS WHEREOF, the Borrower, the Lenders and the Agent have
executed and delivered this Amendment on the day and year first set forth above.
XETA TECHNOLOGIES, INC.
By: /s/ Xxxxxx X. Xxxxxx
-------------------------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Secretary and Chief Financial
Officer
Revolving Loan Commitment BANK ONE, OKLAHOMA, N.A.,
from and after Amendment Individually and as Agent
Date: $ 2,750,000.00
By: /s/ Xxxxxxx X. Xxxxx
-------------------------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Vice President
Revolving Loan Commitment: U.S. BANK NATIONAL ASSOCIATION,
from and after Amendment (formerly known as Firstar Bank, N. A., successor
Date: $ 2,250,000.00 by merger to Firstar Bank Missouri, National
Association)
By: /s/ Xxxxxxx X. Xxxxxxxxx, Xx.
-------------------------------------------------
Name: Xxxxxxx X. Xxxxxxxxx, Xx.
Title: Vice President
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CONSENT OF GUARANTOR
The undersigned hereby (i) acknowledges and consents to the execution
and delivery of the above and foregoing First Amendment to Credit Agreement,
(ii) confirms that the Subsidiary Guaranty of the undersigned will continue in
full force and effect as security for payment and performance of all of the
"Guaranteed Obligations," as such term is used in the Subsidiary Guaranty, and
(iii) ratifies and reaffirms the Subsidiary Guaranty.
No inference shall be drawn from the undersigned's execution of this
Consent that consent or approval of the undersigned is required for this or any
future modification or amendment of or supplement to the Credit Agreement or
other Loan Document, or for this or any future increase, decrease, extension or
renewal of the Guaranteed Obligations.
Capitalized terms used in this Consent and not otherwise defined have
the respective meanings assigned to them in the Credit Agreement referred to in
the above and foregoing First Amendment to Credit Agreement.
U.S. TECHNOLOGIES SYSTEMS, INC.
By: /s/ Xxxxxx X. Xxxxxx
----------------------------------------
Name: Xxxxxx X. Xxxxxx
--------------------------------------
Title: Vice President
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