Exhibit 10.1
AMENDMENT AGREEMENT NO. 1
AMENDMENT AGREEMENT NO. 1 (this "Agreement") dated as of July 30, 2002 to
the CREDIT AGREEMENT, dated as of May 31, 2002, (as the same may be amended,
restated, modified or supplemented from time to time, the "Credit Agreement"),
among WIRE ONE TECHNOLOGIES, INC. (the "Borrower"), the lenders named therein
(the "Lenders") and JPMORGAN CHASE BANK, as administrative agent for the Lenders
(the "Administrative Agent"). All capitalized terms used herein and not
otherwise defined shall have the meanings assigned to such terms in the Credit
Agreement.
WHEREAS, the Borrower has requested that the Required Lenders agree to
amend certain provisions of the Credit Agreement.
NOW, THEREFORE, the parties agree as follows:
SECTION 1. AMENDMENTS TO THE CREDIT AGREEMENT
SECTION 1.1 The definition of "Availability Block" in Section 1.01 of the Credit
Agreement is hereby amended in its entirety to read as follows:
"Availability Block" means (i) $4,000,000, or (ii) if at any
time (A) the Leverage Ratio is less than or equal to 4.00:1.00 for two
consecutive fiscal quarters (and based on projections satisfactory to the
Lenders, the Leverage Ratio will be less than or equal to 4.00:1.00 for the
subsequent consecutive four fiscal quarters) and (B) the Fixed Charge Coverage
Ratio is equal to or greater than 1.25:1.00 for two consecutive fiscal quarters
(and based on projections satisfactory to the Lenders, the Fixed Charge Coverage
Ratio will be equal to or greater than 1.25:1.00 for the subsequent consecutive
four fiscal quarters), $2,500,000.
SECTION 1.2 Section 5.04 of the Credit Agreement is hereby amended by deleting,
in its entirety, clause (y) thereof, and substituting, in lieu thereof, the
following:
"(y) shall have the right to retain an inventory appraiser to
appraise the inventory Collateral at any time and from time to time upon
notice to the Borrower."
SECTION 1.3 Section 6.09 of the Credit Agreement is hereby amended by deleting,
in its entirety, the chart appearing in such section and substituting, in lieu
thereof, the following:
Period Amount
------ ------
For the fiscal year ending
December 31, 2002 $4,500,000
For the fiscal year ending
December 31, 2003 and in each
fiscal year thereafter $3,000,000
SECTION 1.4 Section 6.10 of the Credit Agreement is hereby deleted in its
entirety.
SECTION 1.5 Section 6.11 of the Credit Agreement is hereby deleted in its
entirety.
SECTION 1.6 Section 6.12 of the Credit Agreement is hereby amended by deleting,
in its entirety, the chart appearing in such section and substituting, in lieu
thereof, the following:
Period Amount
------ ------
Three fiscal quarters ending ($4,250,000)
September 30, 2002
Four fiscal quarters ending ($4,250,000)
December 31, 2002
Four fiscal quarters ending ($3,750,000)
March 31, 2003
Four fiscal quarters ending ($2,000,000)
June 30, 2003
Four fiscal quarters ending ($ 750,000)
September 30, 2003
Four fiscal quarters ending $ 400,000
December 31, 2003
Four fiscal quarters ending $ 1,000,000
March 31, 2004
Four fiscal quarters ending $ 2,250,000
June 30, 2004
Period Amount
------ ------
Four fiscal quarters ending $ 3,500,000
September 30, 2004
Four fiscal quarters ending $5,000,000
December 31, 2004 and each
four fiscal quarters thereafter
SECTION 2. CONFIRMATION OF FINANCING DOCUMENTS
SECTION 2.1 The Borrower, by its execution and delivery of this Agreement,
irrevocably and unconditionally ratifies and confirms in favor of the
Administrative Agent that the Financing Documents shall continue in full force
and effect in accordance with their terms.
SECTION 3. COVENANTS
SECTION 3.1 The Borrower will furnish to the Administrative Agent within 20 days
after the end of each fiscal month, an unaudited consolidated balance sheet of
the Borrower and its Subsidiaries as of the end of such fiscal month, together
with the related consolidated statement of income for such fiscal month and the
related consolidated statement of cash flows at the end of such fiscal month, in
each case certified by a Financial Officer of the Borrower as presenting fairly
in all material respects the financial position and results of operations and
cash flow of the Borrower and its Subsidiaries in accordance with GAAP. In the
event that the Borrower does not complete the preparation of the financial
statements for any such fiscal month pursuant to this Section 3.1, the Borrower
will furnish to the Administrative Agent within 20 days after the end of such
fiscal month, flash reports satisfactory to the Administrative Agent. Failure to
comply with this reporting requirement shall constitute an Event of Default.
SECTION 4. CONDITIONS PRECEDENT
This Agreement shall become effective upon the execution and delivery of
counterparts hereof by the Borrower, the Administrative Agent and the Lenders
and the fulfillment of the following conditions:
SECTION 4.1 All legal matters in connection with this Agreement shall be
satisfactory to the Administrative Agent, the Lenders and their respective
counsel in their sole discretion.
SECTION 4.2 Xxxx Xxxxxxx LLP, counsel to the Administrative Agent, shall have
received payment in full for all legal fees charged, and all costs and expenses
incurred, by such
counsel through the date hereof and all legal fees charged, and all costs and
expenses incurred, by such counsel in connection with the transactions
contemplated under this Agreement and the other Loan Documents and instruments
in connection herewith and therewith.
SECTION 4.3 The Administrative Agent shall have received an amendment fee (the
"Amendment Fee") in the amount of $62,500, provided, however, that in the event
that within seven Business Days of the date of this Agreement, the Borrower and
the Administrative Agent enter into an agreement satisfactory to the
Administrative Agent and the Borrower for the purchase of 50,000 options of the
Borrower, then the Administrative Agent shall refund to the Borrower an amount
equal to $25,000 of the Amendment Fee.
SECTION 4.4 The Administrative Agent shall have received such other approvals,
opinions or documents as the Administrative Agent may reasonably request.
SECTION 5. MISCELLANEOUS
SECTION 5.1 The Borrower reaffirms and restates the representations and
warranties set forth in Article III of the Credit Agreement (except as set forth
in the revised financial model for the Borrower delivered to the Administrative
Agent on July 18, 2002), after giving effect to the transactions contemplated
herein, and all such representations and warranties shall be true and correct on
the date hereof with the same force and effect as if made on such date (unless
expressly related to an earlier date). The Borrower represents and warrants
(which representations and warranties shall survive the execution and delivery
hereof) to the Administrative Agent that:
(a) It has the corporate power and authority to execute, deliver and
carry out the terms and provisions of this Agreement and the transactions
contemplated hereby and has taken or caused to be taken all necessary
corporate action to authorize the execution, delivery and performance of
this Agreement and the transactions contemplated hereby;
(b) No consent of any other person (including, without limitation,
shareholders or creditors of the Borrower), and no action of, or filing
with any governmental or public body or authority is required to
authorize, or is otherwise required in connection with the execution,
delivery and performance of this Agreement;
(c) This Agreement has been duly executed and delivered on behalf of
the Borrower by a duly authorized officer, and constitutes a legal, valid
and binding obligation of the Borrower, enforceable in accordance with its
terms, subject to bankruptcy, reorganization, insolvency, moratorium and
other similar laws affecting the enforcement of creditors' rights
generally and the exercise of judicial discretion in accordance with
general principles of equity; and
(d) The execution, delivery and performance of this Agreement will
not violate any law, statute or regulation, or any order or decree of any
court or governmental instrumentality, or conflict with, or result in the
breach of, or constitute a default under any contractual obligation of the
Borrower.
SECTION 5.2 Except as herein expressly amended, the Credit Agreement is ratified
and confirmed in all respects and shall remain in full force and effect in
accordance with its terms.
SECTION 5.3 All references to the Credit Agreement in the Credit Agreement and
the other Financing Documents and the other documents and instruments delivered
pursuant to or in connection therewith shall mean the Credit Agreement as
amended hereby and as may in the future be amended, restated, supplemented or
modified from time to time.
SECTION 5.4 This Agreement may be executed by the parties hereto individually or
in combination, in one or more counterparts, each of which shall be an original
and all of which shall constitute one and the same agreement.
SECTION 5.5 Delivery of an executed counterpart of a signature page to this
Agreement by telecopier shall be effective as delivery of a manually executed
counterpart of this Agreement.
SECTION 5.6 THIS AGREEMENT, IN ACCORDANCE WITH SECTION 5-1401 OF THE GENERAL
OBLIGATION LAW OF THE STATE OF NEW YORK, SHALL BE CONSTRUED IN ACCORDANCE WITH
AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO ANY
CONFLICTS OF LAWS PRINCIPLES THEREOF THAT WOULD CALL FOR THE APPLICATION OF THE
LAWS OF ANY OTHER JURISDICTION.
SECTION 5.7 The parties hereto shall, at any time and from time to time
following the execution of this Agreement, execute and deliver all such further
instruments and take all such further actions as may be reasonably necessary or
appropriate in order to carry out the provisions of this Agreement.
[Remainder Intentionally Left Blank]
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
by their respective officers thereunto duly authorized, as of the date first
above written.
WIRE ONE TECHNOLOGIES, INC., as Borrower
By:_____________________________
Name:
Title:
JPMORGAN CHASE BANK, as Administrative
Agent and Lender
By:_____________________________
Name:
Title:
