FOURTH AMENDMENT AND WAIVER dated as of May 2,
1997 to the Revolving Credit Loan Agreement
dated January 31, 1995, as amended by the FIRST
AMENDMENT dated as of August 3, 1995, the SECOND
AMENDMENT AND WAIVER dated as of November 10,
1995, and AMENDMENT OF REVOLVING CREDIT LOAN
AGREEMENT dated December 27, 1995 (the "Loan
Agreement") among TII INTERNATIONAL, INC., a
Delaware corporation with offices located at
0000 Xxxxx Xxxxxx Xxxxxxxx, Xxx Xxxx 00000 (the
"Borrower"), TII INDUSTRIES, INC., a Delaware
corporation with offices at 0000 Xxxxx Xxxxxx
Xxxxxxxx, Xxx Xxxx 00000 ("Industries") and THE
CHASE MANHATTAN BANK (formerly known as Chemical
Bank), a New York State banking corporation with
offices at 000 Xxxxx Xxxxxxx Xxxx, Xxxxx 000,
Xxxxxxxx, Xxx Xxxx 00000 (the "Bank").
WHEREAS, the Borrower and Industries have requested and the Bank has agreed,
subject to the terms and conditions of this FOURTH AMENDMENT AND WAIVER, to
amend and waive compliance with certain provisions of the Loan Agreement to
reflect the requests herein set forth;
NOW, THEREFORE, in consideration of the premises and of the mutual covenants and
agreements hereinafter set forth, the parties hereto agree as follows:
1. Waiver of Article VII. Negative Covenants. Section 7.17. Debt Service
--------------------------------------------------------------
Ratio.
------
Compliance with Section 7.17 of the Loan Agreement is hereby waived for
the fiscal quarter ended March 28,1997 to permit the Debt Service Ratio
to be less than 1.35 to 1.0, provided, however, that Industries and its
Subsidiaries did not incur a net loss in excess of $2,326,000 for the
fiscal quarter ended March 28, 1997 and provided further that such net
loss arose as a result of a "one-time" charge in an amount not to exceed
$3,000,000 for such fiscal period (the "1996 Extraordinary Charge").
2. Amendment to Article VII. Negative Covenants. Section 7.17. Debt Service
-----------------------------------------------------------
Ratio.
------
Section 7.17 of the Loan Agreement is hereby amended by adding the
following immediately at the end of such section:
"The 1996 Extraordinary Charge in the amount up to $3,000,000 for the
fiscal quarter ended March 28, 1997 shall be excluded from the
calculation of the Debt Service Ratio for the fiscal quarters ended June
29, 1997, September 30, 1997 and December 31, 1997."
This FOURTH AMENDMENT AND WAIVER shall be construed and enforced in accordance
with the laws of the State of New York.
All capitalized terms not otherwise defined herein are used with the respective
meanings given to such terms in the Loan Agreement.
Except as expressly waived or amended hereby, the Loan Agreement shall remain in
full force and effect in accordance with the original terms thereof. This FOURTH
AMENDMENT AND WAIVER herein contained is limited specifically to the matters set
forth above and does not constitute directly or by implication
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a waiver or amendment of any other provision of the Loan Agreement or any
default which may occur or may have occurred under the Loan Agreement.
The Company and Industries hereby represent and warrant that, after giving
effect to this FOURTH AMENDMENT AND WAIVER, no Event of Default or default
exists under the Loan Agreement or any other related documents.
This FOURTH AMENDMENT AND WAIVER may be executed in any number of counterparts,
each of which shall constitute an original but all of which, when taken
together, shall constitute but one FOURTH AMENDMENT AND WAIVER. This FOURTH
AMENDMENT AND WAIVER shall become effective when (i) the Bank shall have
received a certificate of the chief financial officer detailing the $3,000,000
one time charge for the fiscal quarter ended March 28, 1997 and the breakdown of
accounting entries used to reflect the charge on the balance sheet and income
statement of Industries and its Subsidiaries and (ii) duly executed counterparts
hereof which, when taken together, bear the signatures of each of the parties
hereto shall have been delivered to the Bank.
IN WITNESS WHEREOF, the Borrower, Industries and the Bank caused this FOURTH
AMENDMENT AND WAIVER to be duly executed by their duly authorized officers all
as of the day and year first above written.
TII INTERNATIONAL, INC.
By: /s/ Xxxx Xxxxxxx
-----------------------------
Name: Xxxx Xxxxxxx
Title:
TII INDUSTRIES, INC.
By: /s/ Xxxx Xxxxxxx
-----------------------------
Name: Xxxx Xxxxxxx
Title:
THE CHASE MANHATTAN BANK
By: /s/ Xxxxxxxxxxx Xxxxxxxxx
-----------------------------
Name: Xxxxxxxxxxx Xxxxxxxxx
Title: Vice President
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CONSENT
The undersigned, as Guarantors of the obligations of TII International, Inc.
hereby consent to the execution and delivery by TII International, Inc. and TII
Industries, Inc. of this FOURTH AMENDMENT AND WAIVER and hereby confirm that
they remain fully bound by the terms of the Joint and Several Guaranty of
Payment dated January 31, 1995 to which they are a party.
TII INDUSTRIES, INC. TII CORPORATION
By: /s/ Xxxx Xxxxxxx
--------------------
By: /s/ Xxxx Xxxxxxx Name: Xxxx Xxxxxxx
-------------------- Title: VP - Finance
Name: Xxxx Xxxxxxx
Title: VP - Finance
TII INDUSTRIES NC, INC. TELECOMMUNICATIONS INDUSTRIES,
INC.
By: /s/ Xxxx Xxxxxxx
--------------------
Name: Xxxx Xxxxxxx By: /s/ Xxxx Xxxxxxx
Title: VP - Finance --------------------
Name: Xxxx Xxxxxxx
Title: VP - Finance
TII DOMINICANA, INC.
By: /s/ Xxxx Xxxxxxx
--------------------
Name: Xxxx Xxxxxxx
Title: VP - Finance
TII ELECTRONICS, INC.
By: /s/ Xxxx Xxxxxxx
--------------------
Name: Xxxx Xxxxxxx
Title: VP - Finance
DITEL, INC.
By: /s/ Xxxx Xxxxxxx
--------------------
Name: Xxxx Xxxxxxx
Title: VP - Finance
