EXHIBIT 10.1
October 2, 2000
BY FACSIMILE - (000) 000-0000
Xx. Xxxx X. Xxxxx
Senior Vice President/CFO
Comdial Corporation
0000 Xxxxxxxx Xxxxx
Xxxxxxxxxxxxxxx, Xxxxxxxx 00000-0000
Re: Conditional Waiver
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Dear Xxxx:
As you know, Bank of America, N.A. (the "Bank") and Comdial Corporation
("Comdial") are parties to the Credit Agreement dated October 22, 1998 between
Comdial and the Bank (the "Credit Agreement"). As you also know, the Bank has
issued three letters to Comdial concerning a default under the Credit Agreement,
namely a letter dated July 26, 2000, a letter dated August 28, 2000, and a
letter dated September 15, 2000 (such letters, collectively, the "Letters").
Each of the Letters stated that Comdial is in default under the Credit Agreement
because Comdial's Funded Debt to EBITDA Ratio (as defined in Section 8.2 of the
Credit Agreement) exceeded 3.0 to 1 as of June 30, 2000. In addition, Comdial
anticipates that its financial statements for its third fiscal quarter will
show that it is in default under Section 8.3 of the Credit Agreement because
its EBITDA to Interest Expense Ratio (as defined in Section 8.3 of the Credit
Agreement) for such fiscal quarter will be less than 3.0 to 1 (such defaults
under Sections 8.2 and 8.3 of the Credit Agreement hereinafter referred to as
the "Financial Covenant Defaults").
The Bank hereby waives each of the Financial Covenant Defaults on the express
condition that Comdial and each of the Guarantors (as defined in the Credit
Agreement) agree to each of the following seven (7) terms and conditions (this
waiver shall be hereinafter referred to as the "Conditional Waiver").
First, that the following three modifications are hereby made to the Credit
Agreement and the Note (as defined in the Credit Agreement): (1) the definition
of the term "Revolving Credit Commitment" as used in the Credit Agreement is
hereby deleted in its entirety and the following definition is inserted in its
place and stead: ""Revolving Credit Commitment" means Forty Million Dollars
($40,000,000), as such commitment may be reduced from time to time pursuant
to Section 2.2."; (2) the Note (as defined in the Credit Agreement) shall,
commencing on October 2, 2000 and continuing until the Note is paid in full,
bear interest at a rate equal to the LIBOR Daily Floating Rate (as defined in
the Credit Agreement) plus three percent (3%) per annum, with such rate to
be reset on each day on which there is a change in the LIBOR Daily Floating
Rate; provided, however, that the Bank reserves the right, upon the termination
of the Conditional Waiver for any reason, to increase the interest rate charged
on the Note to the Default Rate (as defined in the Credit Agreement); and (3)
the definition of the term "Revolving Credit Termination Date" as used in the
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Credit Agreement is hereby deleted in its entirety and the following definition
is inserted in its place and stead: ""Revolving Credit Termination Date" means
the earlier to occur of (i) March 31, 2002, and (ii) the date on which the
Revolving Credit Commitment is terminated pursuant to Section 2.2 or Section
10."
Second, that Comdial and the Guarantors hereby acknowledge and agree that, as of
October 2, 2000, the outstanding principal balance of the Note is
$38,346,872.57, the accrued but unpaid interest on the Note is $242,585.84,
attorneys' fees, costs and other expenses have accrued under the Loan Documents,
and such fees, costs and expenses are due and payable.
Third, that Comdial and the Guarantors hereby acknowledge and agree that each
of the Financial Covenant Defaults has occurred and therefore an Event of
Default (as defined in the Credit Agreement) has occurred, and, but for the
Conditional Waiver, the Bank has the present right to exercise the rights and
remedies set forth in Section 10 of the Credit Agreement.
Fourth, that no later than November 3, 2000 Comdial and the Guarantors hereby
agree to execute and deliver an amended and restated credit agreement and all
collateral and other documents related thereto (including without limitation
a complete release of any and all claims that Comdial or any of the Guarantors
has or may have against the Bank and a covenant not to xxx the Bank) which
evidence the new terms and conditions that govern the indebtedness arising
under or in connection with the Credit Agreement and the other Loan Documents
(as defined in the Credit Agreement), which terms and conditions shall be
substantially in accordance with the terms and conditions described in the
term sheet attached to the July 26, 2000 Letter.
Fifth, that Comdial and the Guarantors hereby acknowledge and agree that the
Conditional Waiver only waives, on the terms and conditions contained in this
letter, the Financial Covenant Defaults, that the Bank has not waived any
other Default (as defined in the Credit Agreement) or Event of Default under
the Credit Agreement, and that the Conditional Waiver does not imply or in
any way obligate the Bank to waive any other Defaults or Events of Default
that may now exist or may hereafter exist or occur under the Credit Agreement.
Sixth, that Comdial and the Guarantors hereby acknowledge and agree that,
except as expressly modified hereby, the Conditional Waiver does not affect
or impair any of the Bank's rights or remedies under the Credit Agreement or
any of the other Loan Documents.
Seventh, that Comdial and the Guarantors hereby acknowledge and agree that,
except as expressly modified hereby, all existing terms and conditions in the
Credit Agreement and all of the other Loan Documents are, and shall remain,
in full force and effect, and that the Bank expressly reserves all of its
rights and remedies thereunder.
Comdial and the Guarantors hereby acknowledge and agree that Comdial's or any
of the Guarantor's failure to comply with any of the seven terms or conditions
of the Conditional Waiver shall make the Conditional Waiver immediately void
and of no force or effect.
Please have Comdial and the Guarantors acknowledge their agreement to and their
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acceptance of the terms of the Conditional Waiver by signing below in the spaces
provided, and returning the original of this letter to me by October 4, 2000.
Sincerely,
Xxxxxx X. Xxxxxxx, XX
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Xxxxxx X. Xxxxxxx, XX
Vice President
By signing under seal below, each of Comdial and each of the Guarantors hereby
agrees to the terms and conditions of the Conditional Waiver:
COMDIAL CORPORATION
By: Xxxx X. Xxxxx (SEAL) Date: 10/3/00
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Xxxx X. Xxxxx
Its: Senior VP & CFO
COMDIAL TELECOMMUNICATIONS, INC.
By: Xxxx X. Xxxxx (SEAL) Date: 10/3/00
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Xxxx X. Xxxxx
Its: Senior VP & CFO
COMDIAL BUSINESS COMMUNICATIONS CORPORATION
By: Xxxx X. Xxxxx (SEAL) Date: 10/3/00
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Xxxx X. Xxxxx
Its: Senior VP & CFO
COMDIAL ENTERPRISE SYSTEMS, INC.
By: Xxxx X. Xxxxx (SEAL) Date: 10/3/00
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Xxxx X. Xxxxx
Its: Senior VP & CFO
KEY VOICE TECHNOLOGIES, INC.
By: Xxxx X. Xxxxx (SEAL) Date: 10/3/00
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Xxxx X. Xxxxx
Its: Senior VP & CFO
AURORA SYSTEMS, INC.
By: Xxxx X. Xxxxx (SEAL) Date: 10/3/00
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Xxxx X. Xxxxx
Its: Senior VP & CFO
ARRAY TELECOM CORPORATION
By: Xxxx X. Xxxxx (SEAL) Date: 10/3/00
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Xxxx X. Xxxxx
Its: Senior VP & CFO
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AMERICAN PHONE CENTERS, INC.
By: Xxxx X. Xxxxx (SEAL) Date: 10/3/00
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Xxxx X. Xxxxx
Its: Senior VP & CFO
COMDIAL TELECOMMUNICATIONS INTERNATIONAL, INC.
By: Xxxx X. Xxxxx (SEAL) Date: 10/3/00
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Xxxx X. Xxxxx
Its: Senior VP & CFO
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