Exhibit 10.14
THIRD AMENDMENT TO
LOAN AGREEMENT
$40,000,000 REVOLVING LINE OF CREDIT
FROM
BANK ONE, NA,
COBANK, ACB,
AND
INTRUST BANK, NA
TO
T-NETIX, INC.
MARCH 26, 2002
THIRD AMENDMENT TO LOAN AGREEMENT
This Third Amendment to Loan Agreement ("THIRD AMENDMENT"), dated as of
March 26, 2002, is by and among T-NETIX, INC., a Delaware corporation
("BORROWER"), Lenders (as defined in the Original Loan Agreement), and BANK ONE,
NA, a national banking association, f/k/a Bank One, Colorado, N. A., as agent
for Lenders (in such capacity, the "AGENT").
The parties executed and delivered the original Loan Agreement, dated
September 9, 1999 ("ORIGINAL LOAN AGREEMENT"), which Original Loan Agreement was
amended pursuant to the First Amendment to Loan Agreement, dated July 11, 2000,
and the Second Amendment to Loan Agreement dated April 16, 2001. Section 12.5 of
the Original Loan Agreement permits such agreement to be amended with the
consent of the Lenders.
In consideration of the mutual covenants set forth in this Third Amendment
and the other Loan Documents, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, Borrower, Lenders, and
Agent agree as follows:
ARTICLE 1.
DEFINITIONS
1.1 DEFINITIONS. Unless amended hereby, each capitalized term as used
herein shall have the meaning given it in Section 1.1 of the Original Loan
Agreement. The following definitions shall be amended and restated in their
entirety to read as follows:
"Agreement" shall mean, collectively, the Original Loan Agreement,
as amended by the First Amendment to Loan Agreement, the Second
Amendment to Loan Agreement and this Third Amendment to Loan
Agreement.
"Interest Rate" shall mean the fluctuating rate of Prime Rate plus
2.25%. The term "Prime Rate" means the rate of interest per annum
designated by Agent, or its successors as its "prime rate" and as
publicly announced by Agent from time to time. The rate announced by
the Agent as its prime rate may not necessarily be the lowest rate
available to Agent's most creditworthy customers.
"Letters of Credit" is hereby deleted in its entirety.
"Letters of Credit Liability" is hereby deleted in its entirety.
"Loan" shall collectively mean a $14,000,000 revolving line of
credit (the "REVOLVING LINE") and a $7,800,000 term loan (the "TERM
LOAN").
"Maturity Date" shall mean the earlier of (i) the date of
acceleration of the Loan, or (ii) June 30, 2002.
"Maximum Loan Amount" shall mean $21,800,000, comprised of the
Revolving Line and the Term Loan. Notwithstanding Section 2.1 of the
Original Loan Agreement, Borrower may not borrow, repay and reborrow
on that portion of the Loan constituting the Term Loan.
ARTICLE 2
CONDITIONS PRECEDENT
2.1 Conditions Precedent The following conditions precedent must be
strictly fulfilled, substantial performance being insufficient, on or before
March 26, 2002 (the "Amendment Closing Date") and the failure of any one of
which to be fulfilled shall be deemed an Event of Default:
(a) Borrower shall pay to Lenders an Amendment Fee equal to three
quarters of one percent (.75%) of the Maximum Loan Amount to be
distributed as follows: One quarter of one percent (.25%) of the Maximum
Loan Amount shall be immediately distributed to Lenders on a pro rata
basis by Agent, and (ii) one-half of one percent (.50%) of the Maximum
Loan Amount shall be held by Agent in an interest bearing account and
shall remain subject to the Amendment Fee Refund described in Article 4
below
(b) Borrower shall pay all accrued interest to date through and
including the Amendment Closing Date, due on the Loan at the Interest Rate
payable to each Lender on Lender's Percentage Interest (as defined in the
Loan Agreement) in effect immediately prior to the date of this Third
Amendment;
(c) In the event the outstanding balance of the Loan on the
Amendment Closing Date exceeds the Maximum Loan Amount (as defined in this
Third Amendment), Borrower shall make such payment as is necessary to
reduce said balance to an amount that is less than or equal to the Maximum
Loan Amount;
(d) Borrower shall have paid all fees and expenses of Agent and
Lenders incurred in relation to this Third Amendment;
(e) Borrower shall have performed all of its Obligations under the
Loan, including without limitation, (i) shall be current in all payments
of principal and interest, (ii) shall have submitted to Agent all
financial reports and Covenant Compliance Certificates, and (iii) shall
have submitted to agent "pre-audit" results for fiscal year 2001;
(f) Agent shall have received evidence acceptable to Agent of
appropriate
corporate action on the part of Borrower and Subsidiaries hereon
authorizing the execution and delivery of this Third Amendment;
(g) Agent shall have received opinions of Borrowers' counsel in
form and substance acceptable to Agent
(h) Borrower and Xxxxxx X. Xxxxxx shall amend and extend that
certain Subordinated Loan Agreement dated as of April 14, 2000.
(i) In the event Borrower's 2001 10K financial report is not
completed by the date hereon, Borrower shall deliver to Agent the most
recent draft of said 10K report and weekly thereafter provide Agent with
updated drafts of the 10K report until the report is delivered in its
final form. Agent and Lenders shall keep the information contained in the
drafts of the 10K report confidential until such time as the report is
finalized.
(j) Agent shall have received a letter, in form and substance
satisfactory to Agent, from a reputable financial institution or
investment banking firm acceptable to Agent and Lenders which provides
evidence that Borrower has taken substantive efforts and continues to
pursue arrangements with said financial institution or investment banking
firm for payment of the entire amount of its Obligations to Lenders on or
before the Maturity Date.
ARTICLE 3
AMENDMENTS
3.1 Subordinated Indebtedness. The Subordinated Loan Agreement between
Borrower and Xxxxxx X. Xxxxxx, dated as of April 14, 2000, as amended or
supplemented from time to time shall be renewed and extended by a written
extension of the subordinated debt under the same terms as the previous year to
mature no sooner than July 31, 2002.
3.2 Repayment Terms. Payments of interest on the Revolving Line shall be
due and payable beginning April 1, 2002 and on the first day of each month
thereafter. The entire outstanding principal and unpaid interest on the
Revolving Loan shall be due and payable on the Maturity Date. Payments of
$200,000 principal plus interest on the Term Loan shall be due and payable
beginning April 1, 2002 and on the first day each month thereafter. The entire
outstanding principal and unpaid interest on the Term Loan shall be due and
payable on the Maturity Date.
3.3 Letters of Credit. Section 2.6 of the Original Loan Agreement is
hereby deleted in its entirety. Agent shall have no further obligation to issue
Letters of Credit.
3.4 Financial Statements. Section 6.2(a) of the Original Loan Agreement
is hereby amended to provide that Borrower's audited annual Consolidated
financial statements and 10K report for year ending 2001 shall be delivered to
each Lender within three days following completion of the reports but in no
event later than April 30, 2002.
3.5 Financial Covenants. Section 6.11 of the Original Loan Agreement, as
amended, is further amended to provide as follows:
(a) Senior Bank Debt to Unadjusted EBITDA. For the Quarter ending
March 31, 2002 and thereafter Borrower shall maintain a ratio of Senior
Bank Debt to Unadjusted EBITDA of less than or equal to 1.25 calculated as
set forth in the Original Loan Agreement, as amended.
(b) Fixed Charge Coverage Ratio. For the Quarter ending March 31,
2001, and thereafter, the current maturity of long term debt (CMLTD)
calculation used to determine Fixed Charges shall include the monthly
principal payments on the Term Loan.
3.6 Tangible Shareholder's Equity. Section 6.18 of the Original Loan
Agreement, as amended, is hereby amended to provided that Borrower shall
maintain a minimum Tangible Shareholder's Equity for the Quarter ending March
31, 2002, and thereafter, of $17,500,000
ARTICLE 4.
MISCELLANEOUS
4.1 Interest Rate Effective Date. The parties agree that the Interest
Rate, as that term is defined in this Third Amendment, is effective as of the
date hereof, shall be applicable with respect to both the Revolving Loan and the
Term Loan, and shall, as of the date of this Third Amendment, be the exclusive
rate of interest applicable to the Loan (subject to the application of the
Default Rate).
4.2 Amendment Fee Refund. Provided that Borrower performs all of its
Obligations on or before the Maturity Date, Borrower shall be entitled to a
refund of the .50% portion of the Amendment Fee set forth in Section 2.1 (a)
(ii) above, plus accrued interest,(the "Amendment Fee Refund") held by Agent as
set forth in Section 2.1(a) above. If Borrower shall fail to timely perform its
Obligations, the entire amount of the Amendment Fee plus accrued interest shall
be distributed pro rata by Agent to Lenders.
4.3 Commitment Letter. On or before April 30, 2002, Borrower shall
provide Agent with a commitment letter from a reputable financial institution or
investment banking firm acceptable to Agent and Lenders indicating a commitment
to facilitate payment of all of Borrower's Obligations on or before the Maturity
Date. The commitment letter must be in a form and substance acceptable to Agent
and Lenders in their sole discretion.
4.4 Counterpart/Facsimile Signatures. This Third Amendment may be
executed in any number of counterparts which together will be one and the same
instrument. This Third Amendment shall become effective whenever each party
shall have signed at least one counterpart. Facsimile signatures shall be
treated as original signatures hereon.
4.5 Inconsistent Provisions; Severability. In case of any irreconcilable
conflict between the provisions of this Third Amendment and those of the Loan
Documents and the Notes, the provisions of this Third Amendment shall govern.
The invalidity, illegality or unenforceability of any provision of any of the
Loan Documents shall not in any way affect or impair the legality or
enforceability of the remaining provisions of each of the Loan Documents.
4.6 References and Titles. All references in this Third Amendment to
Sections and subsections and other subdivisions refers to the Sections and
subsections and other subdivisions of this Third Amendment unless expressly
provided otherwise. Headings are for convenience only and do not constitute any
part of such subdivisions and shall be disregarded in construing the language
contained in such subdivisions. The words "herein," "hereby," "hereunder" and
words of similar import refer to this Third Amendment as a whole and not to any
particular subdivision unless expressly so limited. Pronouns in masculine,
feminine and neuter genders shall be construed to include any other gender, and
words in the singular form shall be construed to include the plural and vice
versa, unless the context otherwise requires.
4.7 Successors and Assigns. This Third Amendment shall be binding upon
and inure to the benefit of the parties hereto and their respective successors
and assigns.
4.8 Confirmation of Original Loan Agreement. Except as amended hereby,
by the First Amendment to Loan Agreement, the Second Amendment to Loan
Agreement, and this Third Amendment to Loan Agreement, the Original Loan
Agreement is ratified and confirmed.
4.9 Indemnity. Borrower agrees to indemnify, defend and hold harmless
the Agent and Lenders, all present and future officers, directors, employees,
attorneys and agents of the foregoing (the "Indemnitees") from and against any
claims, loss or damage to which any Indemnitee may be subjected if any
representation or warranty of Borrower proves to be incorrect in any respect or
as a result of any violation of any covenant and from and against any and all
other liabilities, losses, damages, penalties, judgments, suits, claims, costs
and expenses of any kind or nature whatsoever (including, without limitation,
the reasonable fees and disbursements of counsel) in connection with the
foregoing and any other investigative, administrative or judicial proceedings,
whether or not such Indemnitee shall be designated a party thereto, which may be
imposed on, incurred by or asserted against any such Indemnitee, in any manner
related to or arising out of or in connection with the making of the Loan or the
use or intended use of the proceeds of the Loan.
[Remainder of Page Intentionally Blank]
EXECUTED to be effective as of the day and year first above written.
"BORROWER"
T-NETIX, INC., a Delaware corporation
By:__________________________________
Name:________________________________
Title:_______________________________
"SUBSIDIARIES"
T-NETIX TELECOMMUNICATIONS SERVICES,
INC., a Texas corporation, f/k/a
GATEWAY TECHNOLOGIES, INC.
By:__________________________________
Name:________________________________
Title:_______________________________
T-NETIX MONITORING CORPORATION,
a Colorado corporation
By:__________________________________
Name:________________________________
Title:_______________________________
SPEAKEZ, INC., a Colorado corporation
By:__________________________________
Name:________________________________
Title:_______________________________
T-NETIX JMS CORPORATION, a Colorado
corporation
By:__________________________________
Name:________________________________
Title:_______________________________
"LENDERS"
BANK ONE, NA,
a national banking association
By:__________________________________
Xxx X. Xxxxx, First Vice-President
COBANK, ACB
By:__________________________________
Name:________________________________
Title:_______________________________
INTRUST BANK, NA,
a national banking association
By:__________________________________
Name:________________________________
Title:_______________________________
"AGENT"
BANK ONE, NA,
a national banking association
By:__________________________________
Xxx X. Xxxxx, First Vice-President
