AMENDMENT NUMBER ONE TO CREDIT AGREEMENT
Exhibit
10.2
AMENDMENT
NUMBER ONE TO CREDIT AGREEMENT
This
Amendment Number One to Credit Agreement (“Amendment”) is entered into as
of August 8, 2007, by and among the lenders identified on the signature pages
hereof (such lenders, together with their respective successors and permitted
assigns, are referred to hereinafter each individually as a “Lender” and
collectively as the “Lenders”), and XXXXX FARGO FOOTHILL, INC., a
California corporation, as the arranger and administrative agent for the
Lenders
(in such capacity, together with its successors and assigns in such capacity,
“Agent”), on the one hand, and TELTRONICS, INC., a Delaware corporation
(“Borrower”), on the other hand, with reference to the following
facts:
A. Borrower,
Agent, and Lenders have previously entered into that certain Credit Agreement,
dated as of May 31, 2007 (as amended and modified, from time to time, the
“Agreement”).
B. Borrower,
Agent, and Lenders desire to amend the Agreement as provided for and on the
conditions set forth herein.
NOW,
THEREFORE, for good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
hereby amend and supplement the Agreement as follows:
1. DEFINITIONS. All
initially capitalized terms used in this Amendment shall have the meanings
given
to them in the Agreement unless specifically defined herein.
2. AMENDMENTS.
(a) The
definition of “Borrowing Base” set forth in Schedule 1.1 to the Agreement
ishereby amended by deleting such definition in its entirety and replacing
it with the following:
“Borrowing
Base” means, as of
any date of determination, the result of:
(a) 85%
of the amount of Eligible Accounts, less the amount, if any, of the
Dilution Reserve, plus
(b) the
lower of
(i) $1,000,000,
and
(ii) 15%
of the value of Inventory valued at cost, minus
(c) the
sum of (i) the Bank Product Reserve, and (ii) the aggregate amount of reserves,
if any, established by Agent under Section 2.1(b).
(b) Schedule
1.1 to the Agreement is hereby amended by adding the following newdefinition
thereto in alphabetical order:
“Amendment
One Effective Date”
mean the date on which that certain Amendment Number One to Credit Agreement
by
and among Lenders, Agent and Borrower becomes effective pursuant to its
terms.
(c) Clause
(i) of Section 2.4(c) of the Agreement is hereby amended by deleting
suchclause in its entirety and replacing it with the following:
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(i) If,
as of the last day of any month, (A) the outstanding principal balance of
the
Term Loan on such date exceeds (B) the product of (i) 0.70 times (ii) the
difference of (x) TTM Recurring Revenues calculated as of the last month
for
which financial statements have most recently been delivered pursuant to
Section 5.3, less (y) the outstanding balance of Maintenance Advances on
such date (such difference being referred to as the “Loan Limit” and such excess
being referred to as the “Limiter Excess”), then Borrower shall immediately
prepay the Obligations in accordance with Section 2.4(d)(ii) in an
aggregate amount equal to the Limiter Excess.
(c) Clause
(e) as set forth in Schedule 5.19 to the Agreement is hereby amendedby
deleting such clause in its entirety and replacing it with the
following:
(e) Within
15 days of the Amendment One Effective Date, Borrower shall deliver to Agent
Schedule 3 (Intellectual Property Licenses) to the Security Agreement disclosing
the information called in the Security Agreement in form and content reasonably
acceptable to Agent.
(d) Clauses
(f) as set forth in Schedule 5.19 to the Agreement is hereby deleted in
its entirety without replacement. Notwithstanding the aforementioned
deletion of clause (f) to Schedule 5.19, Borrower hereby acknowledges
that Agent retains the right pursuant to Section 6(g)(ii) of the Security
Agreement, to require Borrower, upon the occurrence of a Default or an Event
of
Default, to promptly file an application with the United States Copyright
Office
with respect to any unregistered Copyright in which Borrower has an interest
and
shall execute and deliver to Agent a Copyright Security Agreement or such
other
documentation as Agent deems necessary in order to perfect and continue
perfected Agent’s Liens on such Copyright following such
registration.
(e) Clause
(h) as set forth in Schedule 5.19 to the Agreement is hereby amended by
deleting such clause in its entirety and replacing it with the
following:
(h) No
later than September 30, 2007, Borrower shall deliver a Collateral Access
Agreement with respect to the leased facility located at 00-00 Xxxxxxxxxx
Xxxxxxxxxx, Xxxxx 000 & 000, Xxxxxxxxxx, Xxx Xxxx 00000.
3. REPRESENTATIONS
AND WARRANTIES. Borrower hereby affirms to Agent and
Lenders that all of Borrower’s representations and warranties set forth in the
Agreement are true, complete and accurate in all respects as of the date
hereof.
4. NO
DEFAULTS. Borrower hereby affirms to Agent and Lenders
that no Event of Default has occurred and is continuing as of the date
hereof.
5. CONDITIONS
PRECEDENT. The effectiveness of this Amendment is
expressly conditioned upon receipt by Agent of a fully executed copy of this
Amendment from each party hereto.
6. REAFFIRMATION. Borrower
hereby acknowledges and reaffirms (i) all of its obligations and duties under
the Loan Documents, and (ii) that the Agent, for the ratable benefit of the
Lender Group, has and shall continue to have valid, perfected Liens in the
Collateral as provided in Section 5.2(d) of the Security
Agreement.
7. COSTS
AND EXPENSES. Borrower shall pay to Agent and Lenders
all of Agent’s and Lenders’ out-of-pocket costs and expenses (including, without
limitation, the fees and expenses of its counsel, which counsel may include
any
local counsel deemed necessary, search fees, filing and recording
fees,
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documentation
fees, appraisal fees, travel expenses, and other fees) arising in connection
with the preparation, execution, and delivery of this Amendment and all related
documents.
8. LIMITED
EFFECT. In the event of a conflict between the terms and
provisions of this Amendment and the terms and provisions of the Agreement,
the
terms and provisions of this Amendment shall govern. In all other
respects, the Agreement, as amended and supplemented hereby, shall remain
in
full force and effect.
9. COUNTERPARTS;
EFFECTIVENESS. This Amendment may be executed in any
number of counterparts and by different parties on separate counterparts,
each
of which when so executed and delivered shall be deemed to be an
original. All such counterparts, taken together, shall constitute but
one and the same Amendment. This Amendment shall become effective
upon the execution of a counterpart of this Amendment by each of the parties
hereto. This Amendment is a Loan Document and is subject to all the
terms and conditions, and entitled to all the protections, applicable to
Loan
Documents generally.
[remainder
of page left blank intentionally; signatures to follow]
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IN
WITNESS WHEREOF, the parties hereto
have executed this Amendment as of the date first set forth above.
|
TELTRONICS,
INC.,
a Delaware Corporation
|
||
| By: | /s/ Xxxx X. Xxxxxxx | |
| Name: | Xxxx X. Xxxxxxx | |
| Title: | President | |
|
XXXXX
FARGO FOOTHILL, INC.,
a California corporation, as Agent and as a
Lender
|
||
| By: | /s/ Xxxxxxx Xxxxx | |
| Name: | Xxxxxxx Xxxxx | |
| Title: | Vice President | |
S-1
Amendment
Number One
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