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Exhibit 10.05
FIRST AMENDMENT TO LOAN DOCUMENTS
THIS FIRST AMENDMENT TO LOAN DOCUMENTS ("First Amendment") is made and
entered into as of December 29, 1997 by and among EDIFY CORPORATION, a Delaware
corporation ("Borrower"), and IMPERIAL BANK ("Bank").
RECITALS
A. Bank agreed to make revolving loans to Borrower in the maximum
principal amount of $8,000,000.00 ("Commitment") pursuant to the terms of that
certain Credit Terms and Conditions with Addendum dated December 30, 1996
("Credit Terms Agreement"), entered into between Borrower and Bank. The
Commitment is evidenced by that certain Note dated December 30, 1996 ("Note"),
made by Borrower and payable to Bank in the original principal amount of the
Commitment.
B. The Commitment terminated and the Note matured on December 29, 1997,
and Borrower desires to extend the termination date of the Commitment and the
maturity date of the Note as provided for in this First Amendment, and Bank is
willing to make such accommodation to Borrower, subject to the terms and
conditions set forth herein.
C. The Credit Terms Agreement, the Note (as amended hereby), this First
Amendment, together with all other documents entered into or delivered pursuant
to any of the foregoing, in each case as originally executed or as the same may
from time to time be modified, amended, supplemented, restated or superseded
are hereinafter collectively referred to as the "Loan Documents."
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing recitals and the mutual
covenants herein set forth and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, and intending to be
legally bound, Borrower and Bank hereby agree to amend the Loan Documents as
follows:
1. DEFINITIONS. Unless otherwise defined herein, all terms used in the
Credit Terms Agreement have the same meaning when used herein.
2. AMENDMENTS TO CREDIT TERMS AGREEMENT. The terms of the Credit Terms
Agreement are hereby amended as follows:
a. A portion of the first sentence of SECTION B.4.(c) of the Credit
Terms and Conditions containing the words "Within 45 days after the end of each
fiscal quarter of Borrower, a certificate of chief of financial officer or
partner of Borrower," is hereby deleted in its entirety and replaced with the
following partial sentence:
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"(c) As a condition to any request for a Loan under the
Commitment, Borrower shall have delivered to Bank a compliance
certificate, certified by an officer of Borrower, covering the most
recent fiscal quarter then ended prior to the date of Borrower's
request for a Loan,"
b. PARAGRAPH 1) under the Reporting requirement in the Addendum is
hereby deleted in its entirety and replaced with the following paragraph:
"1) Quarterly 10-Q reports within 45 days of quarter end."
c. The Addendum is hereby amended to add the following additional
sections thereunder:
"COMMITMENT"
Subject to all the terms and conditions of this Credit Terms and
Conditions and Addendum as attached thereto, and prior to the
termination of its commitment as hereinafter provided, Bank hereby
agrees to make loans (each a "Loan" and collectively, "Loans") to
Borrower, in such amounts as Borrower shall request, at any time from
December 29, 1997 through December 28, 1998 (the "Commitment
Termination Date"), in an aggregate principal amount not to exceed
$8,000,000.00 (the "Commitment"). If at any time or for any reason,
the outstanding principal amount advanced under the Commitment is
greater than $8,000,000.00, Borrower shall immediately pay to Bank, in
cash, the amount of such excess. Any commitment of Bank, pursuant to
the terms hereof to make Loans shall expire on the Commitment
Termination Date, subject to Bank's right to renew said commitment in
its sole and absolute discretion at Borrower's request. Any such
renewal of said commitment shall not be binding upon Bank unless it is
in writing and signed by an officer of Bank. Provided that no event of
default has occurred and is continuing hereunder, all or any portion
of the Loans advanced by Bank under the Commitment which are repaid by
Borrower shall be available for reborrowing in accordance with the
terms hereof. Borrower promises to pay to Bank the entire outstanding
principle balance (and all accrued unpaid interest thereon) of the
Commitment on the Commitment Termination Date.
1) Letter of Credit Usage and Sublimit. Subject to the availability
of the Commitment and in reliance on the representations and
warranties of Borrower set forth herein, at any time and from
time to time from the date hereof through the banking day
immediately prior to the Commitment Termination Date, Bank shall
issue for the account of Borrower such standby and commercial
letters of credit ("Letters of Credit") as Borrower may request,
which request shall be made by delivering to Bank a duly executed
letter of credit application on Bank's standard form; provided,
however, that the outstanding and undrawn amounts under all such
Letters
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of Credit (a) shall not at any time exceed $1,000,000.00 and (b) shall
be deemed to constitute Loans for the purpose of calculating
availability under the Commitment. Unless Borrower shall have
deposited with Bank cash collateral in an amount sufficient to cover
all undrawn amounts under each such Letter of Credit and Bank shall
have agreed in writing, no Letter of Credit shall have an expiration
date that is later than the Commitment Termination Date. All Letters
of Credit shall be in form and substance acceptable to Bank in its
sole discretion and shall be subject to the terms and conditions of
Bank's form application and letter of credit agreement. Borrower will
pay any standard issuance and other fees that Bank notifies Borrower
will be charged for issuing and processing Letters of Credit for
Borrower.
2) Foreign Exchange Usage and Sublimit. Subject to the availability of
the Commitment and in reliance on the representations and warranties
of Borrower set forth herein, at any time and from time to time from
the date hereof through the banking day immediately prior to the
Commitment Termination Date, Bank shall arrange the purchase by
Borrower of foreign exchange futures contracts ("Exchange Contracts")
as Borrower may request, which request shall be made by delivering to
Bank a duly executed exchange contract application on Bank's standard
form; provided, however, that the maximum aggregate notional contract
amount under all such Exchange Contracts shall not at any time exceed
$1,000,000.00; provided, further, that 10% of the maximum aggregate
notional contract amount under all such Exchange Contracts shall be
deemed to constitute outstanding Loans for the purpose of calculating
availability under the Commitment. Unless Borrower shall have
deposited with Bank cash collateral in an amount sufficient to cover
all undrawn amounts under each such Exchange Contract and Bank shall
have agreed in writing, no Exchange Contract shall have a due date
that is later than the Commitment Termination Date. All Exchange
Contracts shall be in form and substance acceptable to Bank in its
sole discretion and shall be subject to the terms and conditions of
Bank's form exchange contract application. Borrower will pay any
standard issuance and other fees that Bank notifies Borrower will be
charged for issuing and processing Exchange Contracts for Borrower.
After and during the continuance of an Event of Default, Bank may, in
its sole and absolute discretion, terminate any or all of the Exchange
Contracts. Borrower agrees to indemnify and hold harmless Bank from
and against all loss, costs and expense associated with any such
termination of any Exchange Contract."
3. AMENDMENT TO NOTE. The stated maturity date of the Note is hereby
extended from December 29, 1997 to December 28, 1998.
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4. REPRESENTATIONS AND WARRANTIES. Borrower represents and warrants that
its representations and warranties in the Loan Documents continue to be true
and complete in all material respects as of the date hereof after giving effect
to this First Amendment (except to the extent such specifically relate to
another date or as specifically described on EXHIBIT A attached hereto and
incorporated herein by his reference) and that the execution, delivery and
performance of this First Amendment are duly authorized, do not require the
consent or approval of any governmental body or regulatory authority and are
not in contravention of or in conflict with any law or regulation or any term
or provision of any other agreement entered into by Borrower.
5. CONDITIONS PRECEDENT. The legal effectiveness of this First Amendment
is subject to the satisfaction of all of the following conditions precedent:
a. PAYMENT OF ACCRUED INTEREST. Bank shall have received all unpaid
interest accrued under the Note from December 1, 1997 through and including
December 29, 1997 at the rate of interest and computed in accordance with the
terms of the Note.
b. EXECUTED AMENDMENT. Bank shall have received this First
Amendment duly executed and delivered by Borrower.
c. RESOLUTIONS AND OTHER CORPORATE DOCUMENTS OF BORROWER. Bank
shall have received resolutions of the Board of Directors of Borrower
authorizing Borrower to enter into this First Amendment and such other
corporate documents as Bank shall reasonably request.
d. FINANCIAL CONDITION. There shall have occurred no material
adverse change in the financial condition or prospects of Borrower as shown on
the most recent financial statements submitted to Bank or disclosed to Bank,
respectively, and relied upon by Bank in entering into this First Amendment.
e. NO DEFAULT. There shall have occurred no Event of Default that
remains uncured and is continuing under any of the Loan Documents.
f. PAYMENTS OF FEES. Bank shall have received reimbursement from
Borrower of its costs and expenses incurred (including, without limitation, its
attorneys' fees and expenses) in connection with this First Amendment and the
transactions contemplated hereby.
g. OTHER DOCUMENTS. Bank shall have received such other documents,
information and items from Borrower as it shall reasonably request to effectuate
the transactions contemplated hereby.
6. RELEASE AND WAIVER.
a. Borrower hereby acknowledges and agree that: (1) it has no claim
or cause of action against Bank or any parent, subsidiary or affiliate of Bank,
or any of Bank's officers, directors, employees, attorneys or other
representatives or agents (all of which parties
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other than Bank being, collectively, "Bank's Agents") in connection with the
Loan Documents, the loans thereunder or the transactions contemplated therein
and herein; (2) it has no offset or defense against any of its respective
obligations, indebtedness or contracts in favor of Bank; and (3) it recognizes
that Bank has heretofore properly performed and satisfied in a timely manner
all of its obligations to and contracts with Borrower.
b. Although Bank regards its conduct as proper and does not believe
Borrower to have any claim, cause of action, offset or defense against Bank or
any of Bank's Agents in connection with the Loan Documents, the loans
thereunder or the transactions contemplated therein, Bank wishes and Borrower
agrees to eliminate any possibility that any past conditions, acts, omissions,
events, circumstances or matters could impair or otherwise affect any rights,
interests, contracts or remedies of Bank. Therefore, Borrower unconditionally
releases and waives (1) any and all liabilities, indebtedness and obligations,
whether known or unknown, of any kind to Bank or of any of Bank's Agents to
Borrower, except the obligations remaining to be performed by Bank as expressly
stated in the Credit Terms Agreement, this First Amendment and the other Loan
Documents executed by Bank; (2) any legal, equitable or other obligations or
duties, whether known or unknown, of Bank or of any of Bank's Agents to
Borrower (and any rights of Borrower against Bank) besides those expressly
stated in the Credit Terms Agreement, this First Amendment and the other Loan
Documents; (3) any and all claims under any oral or implied agreement,
obligation or understanding with Bank or any of Bank's Agents, whether known or
unknown, which is different from or in addition to the express terms of the
Credit Terms Agreement, this First Amendment or any of the other Loan
Documents; and (4) all other claims, causes of action or defenses of any kind
whatsoever (if any), whether known or unknown, which Borrower might otherwise
have against Bank or any of Bank's Agents, on account of any condition, act,
omission, event, contract, liability, obligation, indebtedness, claim, cause of
action, defense, circumstance or matter of any kind whatsoever which existed,
arose or occurred at any time prior to the execution and delivery of this First
Amendment or which could arise concurrently with the effectiveness of this
First Amendment.
c. Borrower agrees that it understands the meaning and effect of Section
1542 of the California Civil Code, which provides:
Section 1542. Certain Claims Not Affected by General Release. A
general releases does not extend to claims which the creditor does not
know or suspect to exist in his favor at the time of executing the
release, which if known by him must have materially affected his
settlement with the debtor.
BORROWER AGREES TO ASSUME THE RISK OF ANY AND ALL UNKNOWN, UNANTICIPATED OR
MISUNDERSTOOD DEFENSES, CLAIMS, CAUSES OF ACTION, CONTRACTS, LIABILITIES,
INDEBTEDNESS AND OBLIGATIONS WHICH ARE RELEASED BY THIS FIRST AMENDMENT IN
FAVOR OF BANK AND BANK'S AGENTS, AND BORROWER HEREBY WAIVES AND RELEASES ALL
RIGHTS AND BENEFITS WHICH IT MIGHT OTHERWISE HAVE UNDER THE AFOREMENTIONED
SECTION 1542 OF THE CALIFORNIA CIVIL CODE WITH REGARD TO THE RELEASE
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OF SUCH UNKNOWN, UNANTICIPATED OR MISUNDERSTOOD DEFENSES, CLAIMS, CAUSES OF
ACTION, CONTRACTS, LIABILITIES, INDEBTEDNESS AND OBLIGATIONS. TO THE EXTENT
(IF ANY) WHICH ANY SUCH LAWS MAY BE APPLICABLE, BORROWER WAIVES AND RELEASES
(TO THE MAXIMUM EXTENT PERMITTED BY LAW) ANY RIGHT OR DEFENSE WHICH IT MIGHT
OTHERWISE HAVE UNDER ANY OTHER LAW OF ANY APPLICABLE JURISDICTION WHICH MIGHT
LIMIT OR RESTRICT THE EFFECTIVENESS OR SCOPE OF ANY OF ITS WAIVERS OR RELEASES
UNDER THIS FIRST AMENDMENT.
7. FULL, FORCE AND EFFECT; ENTIRE AGREEMENT. Except to the extent
expressly provided in this First Amendment, the terms and conditions of the
Credit Terms Agreement and the other Loan Documents shall remain in full force
and effect. This First Amendment and the other Loan Documents constitute and
contain the entire agreement of the parties hereto and supersede any and all
prior agreements, negotiations, correspondence, understandings and
communications between the parties, whether written or oral, respecting the
subject matter hereof. The parties hereto further agree that the Loan Documents
comprise the entire agreement of the parties thereto and supersede any and all
prior agreements, negotiations, correspondence, understandings and other
communications between the parties thereto, whether written or oral respecting
the extension of credit by Bank to Borrower and/or its affiliates.
8. COUNTERPARTS; EFFECTIVENESS. This First Amendment may be executed in
any number of counterparts, each of which when so delivered shall be deemed an
original, but all such counterparts taken together shall constitute but one
and the same instrument. Each such agreement shall become effective upon the
execution of a counterpart hereof or thereof by each of the parties hereto and
telephonic notification that such executed counterparts has been received by
Borrower and Bank.
IN WITNESS WHEREOF, each of the parties hereto has caused this First
Amendment to be executed and delivered by its duly authorized officer as of the
date first written above.
BANK BORROWER
IMPERIAL BANK EDIFY CORPORATION
a Delaware corporation
By: /s/ Xxxx X. Xxxxx By: /s/ Xxxxxxxxx Xxxxxxx
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Xxxx X. Xxxxx Xxxxxxxxx Xxxxxxx
Assistant Vice President Chief Financial Officer
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EXHIBIT A
Schedule of Exceptions to Representations and Warranties
(List or indicate "NONE")
Exhibit A
Page 1 of 1
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[IMPERIAL BANK LOGO]
CORPORATE RESOLUTION REGARDING CREDIT
OFFICE: SANTA XXXXX VALLEY REGIONAL OFFICE ADDRESS: 000 XXXXXXX XXXXXXX
XXX XXXX, XXXXXXXXXX 00000
RESOLVED, that EDIFY CORPORATION borrow from IMPERIAL BANK, hereinafter
referred to as "Bank", from time to time, such sums of money as, in the
judgement of the officer or officers hereinafter authorized, this corporation
may require; provided that the aggregate amount of such borrowing, pursuant to
this resolution, shall not at any one time exceed the principal sum of *****
EIGHT MILLION AND NO/100 ***** DOLLARS ($8,000,000.00), in addition to such
amount as may be otherwise authorized;
RESOLVED FURTHER, that any 1 of the following named officers
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(Specify Number)
XXXXXXX XXXXX the PRESIDENT/CEO
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XXXXXXXXX XXXXXXX the SECRETARY/CFO
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XXX XXXXXXXX the DIRECTOR OF TREASURY
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the
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the
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of this corporation (the officer or officers acting in combination, authorized
to act pursuant hereto being designated as "authorized officers"), be and they
are hereby authorized, directed and empowered, for and on behalf and in the name
of this corporation (1) to execute and deliver to the Bank such notes or other
evidences of indebtedness of this corporation for the monies so borrowed, with
interest thereon, as the Bank may require, and to execute and deliver, from time
to time, renewals or extensions of such notes or other evidences of
indebtedness; (2) to grant a security interest in, transfer, or otherwise
hypothecate or deed in trust for Bank's benefit and deliver by such instruments
in writing or otherwise as may be demanded by the Bank, any of the property of
this corporation as may be required by the Bank to secure the payment of any
notes or other indebtedness of this corporation or third parties to the Bank,
whether arising pursuant to this resolution or otherwise; and (3) to perform all
acts and execute and deliver all instruments which the Bank may deem necessary
to carry out the purposes of this resolution; REVOLVED FURTHER, that said
authorized officers be and they are hereby authorized and empowered, and that
any one of said authorized officers be and he/she is hereby authorized and
empowered (1) to discount with or sell to the Bank conditional sales contracts,
notes, acceptances, drafts, bailment agreements, leases, receivables and
evidences of indebtedness payable to this corporation, upon such terms as may be
agreed upon by them and the Bank, and to endorse in the name of this corporation
said notes, acceptances, drafts, bailment agreements, leases, receivables and
evidences of indebtedness so discounted, and to guarantee the payment of the
same to the Bank, and (2) to apply for and obtain from the Bank letters of
credit and in connection therewith to execute such agreement, applications,
guarantees, indemnities and other financial undertakings as Bank may require;
RESOLVED FURTHER, that said authorized officers are also authorized to direct
the disposition of the proceeds of any such obligation, and to accept or direct
delivery from the Bank of any property of this corporation at any time held by
the Bank; RESOLVED FURTHER, that the authority given hereunder shall be deemed
retroactive and any and all acts authorized hereunder performed prior to the
passage of this resolution are hereby ratified and affirmed; RESOLVED FURTHER,
that this resolution will continue in full force and effect until the Bank shall
receive official notice in writing from this corporation of the revocation
thereof by a resolution duly adopted by the Board of Directors of this
corporation, and that the certification of the Secretary of this corporation as
to the signatures of the above named persons shall be binding on this
corporation. I, XXXXXXXXX XXXXXXX, Secretary of the above named corporation,
duly organized and existing under the laws of the State of DELAWARE, do hereby
certify that the foregoing is a full, true and correct copy of a resolution of
the Board of Directors of said corporation, duly and regularly passed and
adopted by the Board of Directors of said corporation. I further certify that
said resolution is still in full force and effect and has not been amended or
revoked, and that the specimen signatures appearing below are the signatures of
the officers authorized to sign for this corporation by virtue of said
resolution.
EXECUTED ON DECEMBER 29, 1997
Authorized Signatures:
Signature: /s/ XXXXXXX XXXXX
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XXXXXXX XXXXX
Signature: /s/ XXXXXXXXX XXXXXXX /s/ XXXXXXXXX XXXXXXX
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XXXXXXXXX XXXXXXX (Secretary)
Signature: /s/ XXX XXXXXXXX XXXXXXXXX XXXXXXX
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XXX XXXXXXXX
Signature:
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Signature: BORROWER'S COPY
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L 550 E (Rev 7/97)
