Exhibit 10.28
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AMENDMENT NUMBER TWO
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TO LOAN AND SECURITY AGREEMENT
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This AMENDMENT NUMBER TWO TO LOAN AND SECURITY AGREEMENT (this "Amendment") is
entered into as of October 17, 2002, among FOOTHILL CAPITAL CORPORATION, a
California corporation (the "Lender"), PARADYNE NETWORKS, INC., a Delaware
corporation (the "Parent"), and PARADYNE CORPORATION, a Delaware corporation
(the "Borrower"), with reference to the following:
WHEREAS, Parent and Borrower have previously entered into that certain Loan and
Security Agreement, dated as of July 16, 2001, as amended by Amendment Number
One to Loan and Security Agreement dated as of March 14, 2002 (as so modified
and as otherwise heretofore amended, modified or supplemented from time to time,
the "Agreement"), with Lender, pursuant to which Lender has made certain loans
and financial accommodations available to Borrower. Terms used herein without
definitions shall have the meanings ascribed to them in the Agreement;
WHEREAS, Parent and Borrower have informed Lender that they contemplate that
Ukretelecom will sign a purchase order for aggregate consideration to be paid to
Parent and its Subsidiaries in excess of $11,000,000, pursuant to which 100% of
such consideration could be financed by Xxxxx Fargo HSBC Trade Bank, N.A.
(collectively, the "Designated Transaction");
WHEREAS, Parent and Borrower have requested that Lender agree to amend the
Agreement as set forth in this Amendment;
WHEREAS, subject to the terms and conditions contained herein, Lender is willing
to so amend the Agreement.
NOW, THEREFORE, in consideration of the foregoing and the mutual covenants
herein contained, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereby agree as
follows:
Definitions. Capitalized terms used herein and not otherwise defined herein
shall have the meanings ascribed to them in the Agreement, as amended hereby.
Amendments To The Agreement.
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(a) Section 1.1 of the Agreement is hereby amended by inserting the
following definitions in proper alphabetical order:
"Second Amendment" means that certain Amendment Number Two to Loan and
Security Agreement dated as of October 17, 2002, by and among Parent,
Borrower and Lender.
"Second Amendment Effective Date" means the date, if ever, that all of
the conditions set forth in Section 3 of the Second Amendment shall be
satisfied (or waived by Lender in its sole discretion).
"Triggering Event" means the occurrence of either of the following:
(a) Borrower's Qualified Cash is less than $10,000,000, or (b) Borrower
requests an Advance hereunder.
(b) Section 1.1 of the Agreement is hereby amended by amending and
restating the following definition in its entirety:
"EBITDA" means, with respect to any fiscal period, Parent's and each
of its Subsidiaries' consolidated net earnings (or loss), minus
extraordinary gains and plus extraordinary losses, plus interest expense,
income taxes, depreciation, and write-offs of capital assets, losses from
the sale of capital assets, amortization, write-offs of intangible assets,
and restructuring charges, in each case as determined in accordance with
GAAP.
(c) Section 7.19(a)(i) of the Agreement is hereby amended and restated
in its entirety as follows:
(i) Minimum EBITDA. On and after the first month (after the Second
Amendment Effective Date) after the date when a Triggering Event occurs,
EBITDA, measured on a fiscal month end basis, of not less than the required
amount set forth in the following table for the applicable period set forth
opposite thereto:
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Applicable Amount Applicable Period
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($1,000,000) For the 1 month period commencing on the first day of the first
month following the occurrence of the Triggering Event
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($2,000,000) For the 2 month period commencing on the first day of the first
month following the occurrence of the Triggering Event
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($3,000,000) For the 3 month period commencing on the first day of the first
month following the occurrence of the Triggering Event
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($4,000,000) For the 4 month period commencing on the first day of the first
month following the occurrence of the Triggering Event
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($5,000,000) For the 5 month period commencing on the first day of the first
month following the occurrence of the Triggering Event
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($6,000,000) For the 6 month period commencing on the first day of the first
month following the occurrence of the Triggering Event
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($7,000,000) For the 7 month period commencing on the first day of the first
month following the occurrence of the Triggering Event
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($8,000,000) For the 8 month period commencing on the first day of the first
month following the occurrence of the Triggering Event
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($9,000,000) For the 9 month period commencing on the first day of the first
month following the occurrence of the Triggering Event
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($10,000,000) For the 10 month period commencing on the first day of the first
month following the occurrence of the Triggering Event
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($11,000,000) For the 11 month period commencing on the first day of the first
month following the occurrence of the Triggering Event
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($10,000,000) For the 12 month period commencing on the first day of the first
month following the occurrence of a Triggering Event
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$0 For the period commencing on the first day of the thirteen month
following the occurrence of a Triggering Event and ending on the
last day of such month and on the last day of each month
thereafter
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Conditions Precedent to this Amendment. The satisfaction of each of the
following, unless waived or deferred by Lender, shall constitute conditions
precedent to the effectiveness of this Amendment and each and every provision
hereof:
Lender shall have received this Amendment, duly executed by the parties hereto,
and the same shall be in full force and effect;
Lender shall have received the reaffirmation and consent of Guarantors, attached
hereto as Exhibit A, duly executed and delivered by authorized officers of
Guarantors;
Lender shall have received amendment fee in the amount equal to $20,000 in full
in immediately available funds, which
fee shall be fully earned and (except as set forth below in this Section 3(c))
non-refundable when paid; provided, however, that in the event that Borrower
consummates the Designated Transaction and Xxxxx Fargo HSBC Trade Bank, N.A.
participates in such Designated Transaction by financing a portion of the
consideration to be paid in connection therewith, Lender shall refund to
Borrower $15,000 of such amendment fee;
The representations and warranties in this Amendment, the Agreement as amended
by this Amendment, and the other Loan Documents shall be true and correct in all
respects on and as of the date hereof as though made on such date (except to the
extent that such representations and warranties relate solely to an earlier
date);
After giving effect to this Amendment, no Default or Event of Default shall have
occurred and be continuing on the date hereof, or shall result from the
consummation of the transactions contemplated herein;
No injunction, writ, restraining order, or other order of any nature
prohibiting, directly or indirectly, the consummation of the transactions
contemplated herein shall have been issued and remain in force by any
governmental authority against Lender, Parent or Borrower; and
All other documents and legal matters in connection with the transactions
contemplated by this Amendment shall have been delivered or executed or recorded
and shall be in form and substance satisfactory to Lender and its counsel.
Representations and Warranties. Each of Parent and Borrower hereby represents
and warrants to Lender that (a) the execution, delivery, and performance of this
Amendment and of the Agreement, as amended by this Amendment, are within
Parent's and Borrower's corporate powers, have been duly authorized by all
necessary corporate action, and are not in contravention of any law, rule, or
regulation, or any order, judgment, decree, writ, injunction, or award of any
arbitrator, court, or governmental authority, or of the terms of Parent's or
Borrower's charter or bylaws, or of any contract or undertaking to which Parent
or Borrower is a party or by which any of Parent's or Borrower's properties may
be bound or affected, and (b) this Amendment and the Agreement, as amended by
this Amendment, constitute Parent's and Borrower's legal, valid, and binding
obligation, enforceable against Parent and Borrower in accordance with its
terms, and (c) this Amendment has been duly executed and delivered by Parent and
Borrower.
Choice of Law. The validity of this Amendment, its construction, interpretation
and enforcement, and the rights of the parties hereunder, shall be determined
under, governed by, and construed in accordance with the laws of the State of
California.
Counterparts; Telefacsimile Execution. This Amendment may be executed in any
number of counterparts and by different parties and separate counterparts, each
of which when so executed and delivered, shall be deemed an original, and all of
which, when taken together, shall constitute one and the same instrument.
Delivery of an executed counterpart of a signature page to this Amendment by
telefacsimile shall be effective as delivery of a manually executed counterpart
of this Amendment. Any party delivering an executed counterpart of this
Amendment by telefacsimile also shall deliver a manually executed counterpart of
this Amendment but the failure to deliver a manually executed counterpart shall
not affect the validity, enforceability, and binding effect of this Amendment.
Effect on Loan Documents.
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The Agreement, as amended hereby, and the other Loan Documents shall be and
remain in full force and effect in accordance with its respective terms and
hereby is ratified and confirmed in all respects. The execution, delivery, and
performance of this Amendment shall not, except as expressly set forth herein,
operate as a waiver of or, except as expressly set forth herein, as an amendment
of, any right, power, or remedy of Lender as in effect prior to the date hereof.
The waivers, consents, and modifications herein are limited to the specifics
hereof, shall not apply with respect to any facts or occurrences other than
those on which the same are based, shall not excuse future non-compliance with
the Agreement, and shall not operate as a consent to any further or other
matter, under the Loan Documents.
Upon and after the effectiveness of this Amendment, each reference in the
Agreement to "this Agreement", "hereunder", "herein", "hereof" or words of like
import referring to the Agreement, and each reference in the other Loan
Documents to "the Agreement", "thereunder", "therein", "thereof" or words of
like import referring to the Agreement, shall mean and be a reference to the
Agreement as modified and amended hereby.
To the extent that any terms and conditions in any of the Loan Documents shall
contradict or be in conflict with any
terms or conditions of the Agreement, after giving effect to this Amendment,
such terms and conditions are hereby deemed modified or amended accordingly to
reflect the terms and conditions of the Agreement as modified or amended hereby.
Entire Agreement. This Amendment, together with all other instruments,
agreements, and certificates executed by the parties in connection herewith or
with reference thereto, embody the entire understanding and agreement between
the parties hereto and thereto with respect to the subject matter hereof and
thereof and supersede all prior agreements, understandings, and inducements,
whether express or implied, oral or written.
[Signature page follows.]
IN WITNESS WHEREOF, the parties have entered into this Amendment as of the date
first above written.
PARADYNE NETWORKS, INC.,
a Delaware corporation
By: /s/ Xxxxxxx X. Xxxxxx
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Title: Sr. Vice President
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PARADYNE CORPORATION,
a Delaware corporation
By: /s/ Xxxxxxx X. Xxxxxx
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Title: Sr. Vice President
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FOOTHILL CAPITAL CORPORATION,
a California corporation
By: /s/ Xxxxxxx X. Xxxxxxxxx
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Title: Vice President
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EXHIBIT A
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REAFFIRMATION AND CONSENT
All capitalized terms used herein but not otherwise defined herein shall
have the meanings ascribed to them in that certain Loan and Security Agreement,
dated as of July 16, 2001, by and among Paradyne Networks, Inc., a Delaware
corporation (the "Parent"), Paradyne Corporation, a Delaware corporation (the
"Borrower"), and Foothill Capital Corporation, a California corporation (the
"Lender") (as amended, restated, supplemented or otherwise modified, the "Loan
Agreement"), or in Amendment Number Two to Loan and Security Agreement, dated as
of October 17, 2002, by and among Parent, Borrower and Lender (the "Amendment").
The undersigned each hereby (a) represent and warrant to the Lender that the
execution, delivery, and performance of this Reaffirmation and Consent are
within its powers, have been duly authorized by all necessary action, and are
not in contravention of any law, rule, or regulation, or any order, judgment,
decree, writ, injunction, or award of any arbitrator, court, or governmental
authority, or of the terms of its charter or bylaws, or of any contract or
undertaking to which it is a party or by which any of its properties may be
bound or affected; (b) consents to the transactions contemplated by the
Amendment; (c) acknowledges and reaffirms its obligations owing to the Lender
under any Loan Documents to which it is a party; and (d) agrees that each of the
Loan Documents to which it is a party is and shall remain in full force and
effect. Although each of the undersigned has been informed of the matters set
forth herein and has acknowledged and agreed to same, it understands that Lender
has no obligations to inform it of such matters in the future or to seek its
acknowledgment or agreement to future amendments, and nothing herein shall
create such a duty. Delivery of an executed counterpart of this Reaffirmation
and Consent by telefacsimile shall be equally as effective as delivery of an
original executed counterpart of this Reaffirmation and Consent. Any party
delivering an executed counterpart of this Reaffirmation and Consent by
telefacsimile also shall deliver an original executed counterpart of this
Reaffirmation and Consent but the failure to deliver an original executed
counterpart shall not affect the validity, enforceability, and binding effect of
this Reaffirmation and Consent. This Reaffirmation and Consent shall be governed
by the laws of the State of California.
[Signature page follows]
IN WITNESS WHEREOF, the undersigned have each caused this Reaffirmation and
Consent to be executed as of the date of the Amendment.
PARADYNE NETWORKS, INC.,
a Delaware corporation, as a Guarantor
By: /s/ Xxxxxxx X. Xxxxxx
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Title: Sr. Vice President
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PARADYNE INTERNATIONAL, LTD.,
a corporation organized under the laws
of the United Kingdom, as a Guarantor
By: /s/ Xxxxxxx X. Xxxxxx
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Title: Director
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PARADYNE WORLDWIDE CORP.,
a Delaware corporation, as a Guarantor
By: /s/ Xxxxxxx X. Xxxxxx
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Title: Sr. Vice President
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PARADYNE FINANCE CORP.,
a Delaware corporation, as a Guarantor
By: /s/ Xxxxxxx X. Xxxxxx
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Title: Sr. Vice President
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