AMENDMENT NO. 4
EXHIBIT 10.2
TO LOAN AND SECURITY AGREEMENT
THIS AMENDMENT NO. 4 TO LOAN AND SECURITY AGREEMENT
("Amendment"), dated the 27th day of March, 1997, 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"), 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.
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 Capital Expenditures. Section 9.2(L) is amended in its entirety to read as
follows:
(L) Capital Expendtiures. Make Capital Expenditures (including, without
limitation, by way of capitalized leases) which, in the aggregate, as to all
Borrowers and their Subsidiaries, exceed $4,000,000 during the fiscal year
ending December 31, 1996; $4,500,000 during the fiscal year ending December
31, 1997; and $4,000,000 during any fiscal year thereafter.
1.2. 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
First fiscal quarter of fiscal year $21,500,000
ending December 31, 1996
Second fiscal quarter of fiscal year $21,000,000
ending December 31, 1996
Third fiscal quarter of fiscal year $18,750,000
ending December 31, 1996
Fourth fiscal quarter of fiscal year $20,200,000
ending December 31, 1996
First fiscal quarter of fiscal year $21,500,000
ending December 31, 1997
Second fiscal quarter of fiscal year $23,250,000
ending December 31, 1997
Third fiscal quarter of fiscal year $26,000,000
ending December 31, 1997
Fourth fiscal quarter of fiscal year $29,000,000
ending December 31, 1997
First fiscal quarter of fiscal year $30,000,000
ending December 31, 1998
Second fiscal quarter of fiscal year $31,000,000
ending December 31, 1998
Third fiscal quarter of fiscal year $32,350,000
ending December 31, 1998
Fourth fiscal quarter of fiscal year $32,750,000
ending December 31, 1998 and at all
times thereafter"
1.3 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 fiscal quarter of fiscal year ($1,000,000)
ending December 31, 1996
First and second fiscal quarters of ($1,500,000)
fiscal year ending December 31, 1996
First, second and third fiscal quarters ($ 450,000)
of fiscal year ending December 31, 1996
Fiscal year ending December 31, 1996 $ 200,000
First fiscal quarter of fiscal year ending $ 250,000
December 31, 1997 and the first quarter of
each fiscal year thereafter
First and second fiscal quarters of fiscal $1,100,000
year ending December 31, 1997 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, 1997 and
the first, second and third fiscal quarters
of each fiscal year thereafter
Fiscal year ending December 31, 1997 and $4,500,000
each fiscal year thereafter:
1.4 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 fiscal quarter of fiscal year ending .75 to 1.0
December 31, 1996
First and second fiscal quarters of fiscal .75 to 1.0
year ending December 31, 1996
First, second and third fiscal quarters of 1.5 to 1.0
fiscal year ending December 31, 1996
Fiscal year ending December 31, 1996 1.7 to 1.0
First fiscal quarter of fiscal year ending .40 to 1.0
December 31, 1997 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, 1997 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, 1997 and
the first, second and third fiscal quarters
of each fiscal year thereafter
Fiscal year ending December 31, 1997 and 1.7 to 1.0
each fiscal year thereafter:
1.5 Minimum Current Ratio. Section 9.3(D) is amended in its entirety to
read as follows:
(D) Minimum Current Ratio. Maintain a ratio of Consolidated Current
Assets to Consolidated Current Liabilities of not less than 1.4 to 1.0 for
each of the first and second fiscal quarters of each fiscal year; 1.45 to
1.0 for each of the third and fourth quarters of the fiscal year ending
December 31, 1996; and 1.50 to 1.0 for each of the third and fourth fiscal
quarters of the fiscal year ending December 31, 1997 and each fiscal year
thereafter.
1.6 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
Third fiscal quarter of fiscal year ending 7.00 to 1.0
December 31, 1996
Fourth fiscal quarter of fiscal year ending 4.00 to 1.0
December 31, 1996
First fiscal quarter of fiscal year ending 3.95 to 1.0
December 31, 1997
Second fiscal quarter of fiscal year ending 3.20 to 1.0
December 31, 1997
Third fiscal quarter of fiscal year ending 3.00 to 1.0
December 31, 1997
Fourth fiscal quarter of fiscal year ending 3.00 to 1.0
December 31, 1997
First fiscal quarter of fiscal year ending 2.90 to 1.0
December 31, 1998 and each fiscal year
thereafter
Second fiscal quarter of fiscal year ending 2.75 to 1.0
December 31, 1998 and each fiscal year
thereafter
Third fiscal quarter of fiscal year ending 2.50 to 1.0
December 31, 1998 and each fiscal year
thereafter
Fourth fiscal quarter of fiscal year ending 2.5 to 1.0
December 31, 1998 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 Agreement 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 Xxxxxxxxx By: /s/ Xxxxx X. Xxxxxx
Vice President Xxxxx X. Xxxxxx
Senior Vice President
ATTEST AMERICAN TELECOMMUNICATIONS
CORPORATIONS
/s/ Xxxxx Xxxxxxxxx By: /s/ Xxxxx X. Xxxxxx
Vice President Xxxxx X. Xxxxxx
Senior Vice President
ATTEST AMERICAN PHONE CENTERS, INC.
/s/ Xxxxx Xxxxxxxxx By: /s/ Xxxxx X. Xxxxxx
Vice President Xxxxx X. Xxxxxx
Senior Vice President
ATTEST COMDIAL ENTERPRISE SYSTEMS,
INC.
/s/ Xxxxx Xxxxxxxxx By: /s/ Xxxxx X. Xxxxxx
Vice President Xxxxx X. Xxxxxx
Senior Vice President
ATTEST COMDIAL TELECOMMUNICATIONS
INTERNATIONAL, INC.
/s/ Xxxxx Xxxxxxxxx By: /s/ Xxxxx X. Xxxxxx
Vice President Xxxxx X. Xxxxxx
Senior Vice President
ATTEST XXXXX TECHNOLOGIES
CORPORATION
/s/ Xxxxx Xxxxxxxxx By: /s/ Xxxxx X. Xxxxxx
Vice President Xxxxx X. Xxxxxx
Senior Vice President
ATTEST COMDIAL CORPORATION
/s/ Xxxxx Xxxxxxxxx By: /s/ Xxxxx X. Xxxxxx
Vice President Xxxxx X. Xxxxxx
Senior Vice President
ATTEST COMDIAL CUSTOM MANUFACTURING,
INC.
/s/ Xxxxx Xxxxxxxxx By: /s/ Xxxxx X. Xxxxxx
Vice President Xxxxx X. Xxxxxx
Senior Vice President
ATTEST COMDIAL VIDEO TELEPHONY, INC.
/s/ Xxxxx Xxxxxxxxx By: /s/ Xxxxx X. Xxxxxx
Vice President Xxxxx X. Xxxxxx
Senior Vice President
ATTEST COMDIAL TECHNOLOGY
CORPORATION
/s/ Xxxxx Xxxxxxxxx By: /s/ Xxxxx X. Xxxxxx
Vice President Xxxxx X. Xxxxxx
Senior Vice President
ATTEST COMDIAL TELECOMMUNICATIONS,
INC.
/s/ Xxxxx Xxxxxxxxx By: /s/ Xxxxx X. Xxxxxx
Vice President Xxxxx X. Xxxxxx
Senior Vice President
ATTEST AURORA SYSTEMS, INC.
/s/ Xxxxx Xxxxxxxxx By: /s/ Xxxxx X. Xxxxxx
Vice President Xxxxx X. Xxxxxx
Senior Vice President
ATTEST KEY VOICE TECHNOLOGIES, INC.
/s/ Xxxxx Xxxxxxxxx By: /s/ Xxxxx X. Xxxxxx
Vice President Xxxxx X. Xxxxxx
Senior Vice President
ATTEST COMDIAL BUSINESS
COMMUNICATIONS CORPORATION
/s/ Xxxxx Xxxxxxxxx By: /s/ Xxxxx X. Xxxxxx
Vice President Xxxxx X. Xxxxxx
Senior Vice President
ATTEST COMDIAL CONSUMER
COMMUNICATIONS CORPORATION
/s/ Xxxxx Xxxxxxxxx By: /s/ Xxxxx X. Xxxxxx
Vice President Xxxxx X. Xxxxxx
Senior Vice President
LENDER:
FLEET CAPITAL CORPORATION
BY: \S\ Xxxxx X. Xxxxxx
Title: Vice President
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