AMENDMENT NO. 3
TO
LOAN AND SECURITY AGREEMENT
THIS AMENDMENT NO. 3 TO LOAN AND SECURITY AGREEMENT
("Amendment"), dated as of the 27th day of September, 1996,
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. ("CCMI") 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, 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, and a certain Amendment No. 2 thereto, dated June
28, 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. Minimum Consolidated Adjusted Table 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 $24,950,000
ending December 31, 1997
Second fiscal quarter of fiscal year $26,500,000
ending December 31, 1997
Third fiscal quarter of fiscal year $28,300,000
ending December 31, 1997
Fourth fiscal quarter of fiscal year $28,750,000
ending December 31, 1997
First fiscal quarter of fiscal year $29,000,000
ending December 31, 1998
Second fiscal quarter of fiscal year $30,500,000
ending December 31, 1999
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"
1.2 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 (S 450,000)
of fiscal year ending December 31, 1996
Fiscal year ending December 31, 1996 $ 200,000
First fiscal quarter of fiscal year ending S 350,000
December 31, 1997 and the first quarter
of each fiscal year thereafter
First and second fiscal quarters of fiscal $2,250,000
year ending December 31, 1997 and the
first and second fiscal quarters of each
fiscal year thereafter
First, Second and third fiscal quarters of $4,500,000
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 $5,000,000
each fiscal year thereafter
1.3 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 3 1, 1996 "the first fiscal
quarter of each fiscal year thereafter
First and second fiscal quarters of fiscal. 75 to 1.0
year ending December 31, 1996 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, 1996 and
the first, second and third fiscal quarters
of each fiscal year thereafter
Fiscal year ending December 31, 1996 and 1.7 to 1.0
each fiscal year thereafter
1.4 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 in each fiscal year; 1.45
to 1.0 for each of the third and fourth quarters of fiscal
year 1996; and 1.65 to 1.0 for each of the third and fourth
fiscal quarters of fiscal year 1997 and each fiscal year
thereafter."
1.5 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 7.0 to 1.0
ending December 31, 1996
Fourth fiscal quarter of fiscal year 4.0 to 1.0
ending December 31, 1996
First fiscal quarter of fiscal year 3.45 to 1.0
ending December 31, 1997
Second fiscal quarter of fiscal year 3.2 to 1.0
ending December 31, 1997
Third fiscal quarter of fiscal year 3.0 to 1.0
ending December 31, 1997
Fourth fiscal quarter of fiscal year 3.0 to 1.0
ending December 31, 1997
First fiscal quarter of fiscal year 2.9 to 1.0
ending December 31, 1998 and each
fiscal year thereafter
Second fiscal quarter of fiscal year 2.75 to 1.0
ending December 31, 1998 and each
fiscal year thereafter
Third fiscal quarter of fiscal year 2.5 to 1.0
ending December 31, 1998 and each
fiscal year thereafter
Fourth fiscal quarter of fiscal year 2.5 to 1.0
ending 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 the 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. I(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 original 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 BY JURY IN ANY ACTION, SUIT, PROCEEDING OR
COUNTERCLAIM OF ANY KIND ARISING OUT OF OR RELATED TO THIS
AMENDMENT, OR THE LOAN AGREEMENT OR THE OTHER LOAN DOCUMENTS
OR THE TRANSACTIONS RELATED HERETO OR THERETO.
IN WITNESS OF, 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
