EXHIBIT 10.2
FIFTH AMENDMENT
TO LOAN AGREEMENT
FIFTH AMENDMENT, dated September 30, 2004 (the "Amendment"), to the
Loan Agreement referred to below, by and among (i) GENERAL DATACOMM INDUSTRIES,
INC., a Delaware corporation, GENERAL DATACOMM, INC., a Delaware corporation
("GDC"), DATACOMM LEASING CORPORATION, a Delaware corporation, GDC HOLDING
COMPANY, LLC, a Delaware limited liability company, GDC NAUGATUCK, INC., a
Delaware corporation, GDC FEDERAL SYSTEMS, INC., a Delaware corporation, GDC
REALTY, INC., a Texas corporation (each, a "Borrower" and collectively, the
"Borrowers"), (ii) the lenders party thereto from time to time (the "Lenders"),
and (iii) ABLECO FINANCE LLC, as agent for the Lenders (in such capacity, the
"Agent").
WHEREAS, the Borrowers are obligated to repay certain indebtedness
owing to the Agent and the Lenders under that certain Loan and Security
Agreement dated as of August 20, 2002 (as amended, supplemented and otherwise
modified from time to time, the "Loan Agreement");
WHEREAS, GDC has requested that the Lenders permit (i) GDC's
incurrence of additional loans to be made by Xxxxxx X. Xxxxxx in the principal
amount of $250,000 (the "Affiliate Loans") for the payment of and to replace
$250,000 of the Indebtedness owed the Lender and (ii) the grant by the Borrowers
of Liens on their assets to secure the repayment of the Affiliate Loans, all in
accordance with the promissory notes, warrant and the security agreement
attached hereto as Exhibit A;
WHEREAS, the Lenders are willing to consent to the transactions
described in the immediately preceding paragraph, subject to (i) the execution
and delivery of this Amendment by the Borrowers, and (ii) the other terms and
conditions set forth in this Amendment;
NOW THEREFORE, in consideration of the premises and other good and
valuable consideration, the parties hereto hereby agree as follows:
1.1 Definitions in Amendment. Any capitalized term used herein and not
defined shall have the meaning assigned to it in the Loan Agreement.
1.2 Affiliate Loans. Section 1.1 of the Loan Agreement is hereby amended
by replacing the definition of the term "Affiliate Loans" to read in its
entirety as follows:
"'Affiliate Loans' means the loans made by Xxxxxx X. Xxxxxx and
Xxxx X. Xxxxxx to the Parent, on or about December 30, 2003, in an
aggregate principal amount of $600,000, which loans are evidenced by
promissory notes issued by the Parent and dated on or about December 30,
2003, the loans made by Xxxxxx X. Xxxxxx and Xxxx X. Xxxxxx to the Parent
on or about March 1, 2004 in an aggregate principal amount of $250,000,
which loans are evidenced by Promissory Notes issued by the Parent and
dated on or about March 1, 2004, the loans made by Xxxxxx X. Xxxxxx and
Xxxx X. Xxxxxx to the Parent on or about April 1, 2004 in an aggregate
principal amount of $250,000, the
loan made by Xxxxxx X. Xxxxxx to the Parent on or about June 30, 2004 in
the principal amount of $250,000, which loan is evidenced by a Promissory
Note issued by the Parent and dated on or about June 30, 2004, and the loan
made by Xxxxxx X. Xxxxxx to the Parent on or about September 30, 2004 in
the principal amount of $250,000, which loan is evidenced by a Promissory
Note issued by the Parent and dated on or about September 30, 2004."
1.3 Indebtedness; Amendments. (a) Section 7.1(g) of the Loan Agreement is
hereby amended in its entirety to read as follows:
"(g) the Affiliate Loans, provided that (i) the aggregate
principal amount of the Affiliate Loans shall not exceed $1,600,000 and
(ii) the Borrowers shall not pay any principal of, interest on or any other
amount in respect of such Affiliate Loans if an Event of Default exists or
would arise after giving effect to any such payment."
1.4 Transactions with Affiliates. Lenders hereby consent and agree to the
issuance of a warrant to Xxxxxx X. Xxxxxx in form attached in connection with
the loan made under Section 1.2 above and Section 7.14 of the Loan Agreement
shall be deemed amended to permit such transaction.
1.5 Financial Covenant Waiver. Lenders hereby waive the requirement of
Borrowers under Section 7.20, Financial Covenant, of the Loan Agreement to
maintain EBITDA for the fiscal quarter ending September 30, 2004 and the related
obligation under Section 6.2 of the Loan Agreement to provide a compliance
certificate containing any such calculation for such period.
2. Conditions. The effectiveness of this Amendment is subject to the
fulfillment, in a manner satisfactory to the Agent, of each of the following
conditions precedent (the date such conditions are fulfilled or waived by the
Lender is hereinafter referred to as the "Amendment Effective Date"):
(a) Representations and Warranties; No Event of Default. The
representations and warranties contained herein, in Section 5 of the Loan
Agreement and in each other Loan Document and certificate or other writing
delivered to the Agent or any Lender pursuant hereto on or prior to the
Amendment Effective Date shall be correct on and as of the Amendment Effective
Date as though made on and as of such date, except to the extent that such
representations and warranties (or any schedules related thereto) expressly
relate solely to an earlier date (in which case such representations and
warranties shall be true and correct on and as of such date); and no Default or
Event of Default shall have occurred and be continuing on the Amendment
Effective Date or would result from this Amendment becoming effective in
accordance with its terms.
(b) Delivery of Documents. The Lender shall have received on or
before the Amendment Effective Date the following, each in form and substance
satisfactory to the Agent and, unless indicated otherwise, dated the Amendment
Effective Date:
(i) counterparts of this Amendment duly executed by the
Borrowers and the Lenders; and
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(ii) such other agreements, instruments, approvals, opinions
and other documents as the Agent may reasonably request.
(c) Proceedings. All proceedings in connection with the transactions
contemplated by this Amendment, and all documents incidental thereto, shall be
satisfactory to the Agent and its special counsel, and the Agent and such
special counsel shall have received all such information and such counterpart
originals or certified copies of documents, and such other agreements,
instruments, approvals, opinions and other documents, as the Agent or such
special counsel may reasonably request.
3. Representations and Warranties. Each Borrower hereby represents and
warrants to the Agent and the Lenders as follows:
(a) Representations and Warranties; No Event of Default. The
representations and warranties herein, in Section 5 of the Loan Agreement and in
each other Loan Document and certificate or other writing delivered to the Agent
or any Lender pursuant hereto on or prior to the Amendment Effective Date are
correct on and as of the Amendment Effective Date as though made on and as of
such date, except to the extent that such representations and warranties (or any
schedules related thereto) expressly relate solely to an earlier date (in which
case such representations and warranties are true and correct on and as of such
date); and no Default or Event of Default has occurred and is continuing on the
Effective Date or would result from this Amendment becoming effective in
accordance with its terms.
(b) Organization, Good Standing, Etc. Such Borrower (i) is a
corporation duly organized, validly existing and in good standing under the laws
of the state of its organization, (ii) has all requisite power and authority to
execute, deliver and perform this Amendment and the other Loan Documents to
which it is a party being executed in connection with this Amendment, and to
perform the Loan Agreement, as amended hereby, and (iii) is duly qualified to do
business and is in good standing in each jurisdiction in which the character of
the properties owned or leased by it or in which the transaction of its business
makes such qualification necessary except where the failure to be so qualified
reasonably could not be expected to have a Material Adverse Change.
(c) Authorization, Etc. The execution, delivery and performance by
such Borrower of this Amendment and each other Loan Document to which it is a
party being executed in connection with this Amendment, and the performance by
such Borrower of the Loan Agreement, as amended hereby, (i) have been duly
authorized by all necessary action, (ii) do not and will not contravene such
Borrower's charter or by-laws, any applicable law or any contractual restriction
binding on or otherwise affecting it or any of its properties, (iii) do not and
will not result in or require the creation of any Lien (other than pursuant to
any Loan Document) upon or with respect to any of its properties, and (iv) do
not and will not result in any suspension, revocation, impairment, forfeiture or
nonrenewal of any permit, license, authorization or approval applicable to its
operations or any of its properties.
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4. Miscellaneous.
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(a) Continued Effectiveness of the Loan Agreement. Except as
otherwise expressly provided herein, the Loan Agreement and the other Loan
Documents are, and shall continue to be, in full force and effect and are hereby
ratified and confirmed in all respects, except that on and after the Amendment
Effective Date (i) all references in the Loan Agreement to "this Agreement",
"hereto", "hereof", "hereunder" or words of like import referring to the Loan
Agreement shall mean the Loan Agreement as amended by this Amendment, and (ii)
all references in the other Loan Documents to which any Borrower is a party to
the "Loan Agreement", "thereto", "thereof", "thereunder" or words of like import
referring to the Loan Agreement shall mean the Loan Agreement as amended by this
Amendment. Except as expressly provided herein, the execution, delivery and
effectiveness of this Amendment shall not operate as an amendment of any right,
power or remedy of the Lender under the Loan Agreement or any other Loan
Document, nor constitute an amendment of any provision of the Loan Agreement or
any other Loan Document.
(b) Counterparts. This Amendment may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which shall be deemed to be an original, but all of which taken together shall
constitute one and the same agreement.
(c) Headings. Section headings herein are included for convenience
of reference only and shall not constitute a part of this Amendment for any
other purpose.
(d) Governing Law. This Amendment shall be governed by, and
construed in accordance with, the law of the State of New York.
(e) Costs and Expenses. The Borrowers jointly and severally agree to
pay on demand all fees, costs and expenses of the Agent and each Lender in
connection with the preparation, execution and delivery of this Amendment and
the other related agreements, instruments and documents.
(f) Amendment as Loan Document. Each Borrower hereby acknowledges
and agrees that this Amendment constitutes a "Loan Document" under the Loan
Agreement. Accordingly, it shall be an Event of Default under the Loan Agreement
if (i) any representation or warranty made by a Borrower under or in connection
with this Amendment shall have been untrue, false or misleading in any material
respect when made, or (ii) a Borrower shall fail to perform or observe any term,
covenant or agreement contained in this Amendment.
(g) Waiver of Jury Trial. EACH BORROWER, THE AGENT AND THE LENDER
EACH HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION,
PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE)
ARISING OUT OF OR RELATING TO THIS AMENDMENT OR THE ACTIONS OF THE AGENT OR ANY
LENDER IN THE NEGOTIATION, ADMINISTRATION, PERFORMANCE OR ENFORCEMENT HEREOF.
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
be executed and delivered as of the date first above written.
Borrowers:
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GENERAL DATACOMM INDUSTRIES, INC.,
a Delaware corporation
By:
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Title:
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GENERAL DATACOMM, INC.,
a Delaware corporation
By:
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Title:
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DATACOMM LEASING CORPORATION,
a Delaware corporation
By:
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Title:
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GDC HOLDING COMPANY, LLC,
a Delaware limited liability company
By:
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Title:
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GDC FEDERAL SYSTEMS, INC.,
a Delaware corporation
By:
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Title:
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GDC NAUGATUCK, INC.,
a Delaware corporation
By:
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Title:
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GDC REALTY, INC.,
a Texas corporation
By:
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Title:
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Agent and Lender:
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ABLECO FINANCE LLC,
a Delaware limited liability company, on behalf
of itself and its affiliated assigns
By:
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Title:
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