AMENDMENT #3
to
CREDIT AGREEMENT
THIS AMENDMENT #3 TO CREDIT AGREEMENT (this "Amendment") dated
as of January 19, 1999, between V BAND CORPORATION (the "Borrower") and NATIONAL
BANK OF CANADA, NEW YORK BRANCH (the "Bank").
RECITALS
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A. The Borrower and the Bank are parties to the Credit
Agreement dated as of May 28, 1997, as amended by Amendment and Waiver dated as
of February 10, 1998 and Amendment and Waiver dated as of June 4, 1998 (as the
same may have been, is hereby or may hereafter be further amended, the "Credit
Agreement"), pursuant to which the Bank agreed to extend credit to the Borrower
in the form of revolving loans and letters of credit upon the terms and subject
to the conditions set forth in the Credit Agreement.
B. The Borrower has requested that the Bank permit it to
borrow under the Credit Agreement overadvances of up to $153,000 in the
aggregate and allow such overadvances to remain outstanding until January 29,
1999, in consideration of, inter alia, the agreement of the Borrower to comply
with the requirements imposed hereby.
C. The Bank is willing to permit such overadvances, subject to
the terms and conditions set forth below.
NOW THEREFORE, in consideration of the premises and for other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
1. Definitions. All capitalized terms used but not
defined herein shall have the meanings ascribed to them in the Credit Agreement.
2. Amendment to Credit Agreement.
(a) The definition of the term "Permitted
Overadvance Amount" set forth within the definition of "Borrowing Base" in
Section 1.1 of the Credit Agreement (Defined Terms) is hereby amended to read as
follows:
"Permitted Overadvance Amount" means (x) during the
period commencing on January 19, 1999 and ending on
January 29, 1999, One Hundred Fifty-Three Thousand
Dollars ($153,000), and (y) thereafter, $0.00.
(b) All references in the Credit Agreement to
"this Agreement" or such words as "hereof", "herein", or "hereunder" shall be
deemed to be references to the "Credit Agreement," as defined in this Amendment.
3. Reaffirmation of Obligations. The Borrower hereby
acknowledges and confirms to the Bank (a) that the amendments and modifications
to the Credit Agreement made pursuant to this Amendment shall not affect or
impair in any way the validity, binding effect or enforceability of any Loan
Document to which the Borrower is a party or of any liens or security interests
granted to the Bank thereunder, or the Borrower's obligations or the Bank's
rights and remedies thereunder, and (b) that the Loan Documents to which the
Borrower is a party, any liens and security interests granted to the Bank
thereunder, and the Borrower's obligations and the Bank's rights and remedies
thereunder shall continue in full force and effect, notwithstanding such
amendments and modifications.
4. Effectiveness. The provisions of this Amendment to
the contrary notwithstanding, the foregoing amendment shall be effective only
through the earliest of (a) noncompliance by the Borrower with any of the
limitations or requirements contained herein, or (b) the occurrence of an Event
of Default under the Credit Agreement.
5. Amendment Fee. As consideration for the amendment to
the Credit Agreement provided herein, the Borrower shall pay to the Bank upon
the execution hereof a fee in the amount of $500 (the "Amendment Fee"), which
fee is nonrefundable and is deemed earned by the Bank when paid.
6. Representations and Warranties. The Borrower hereby
represents and warrants to the Bank that (a) it has full power and authority to
execute and deliver this Amendment, (b) this Amendment, and the Credit Agreement
as amended hereby, constitute the legal, valid and binding obligations of the
Borrower, enforceable against the Borrower in accordance with their respective
terms, (c) the Borrower's execution and delivery of this Amendment, and its
performance of this Amendment and of
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the Credit Agreement, have been duly authorized by all requisite action of the
Borrower and do not require the approval of its shareholders, (d) the execution
and delivery by the Borrower of this Amendment and the performance by the
Borrower of the Credit Agreement do not and will not (i) violate the Borrower's
Certificate of Incorporation or By-Laws or any law or regulation applicable to
the Borrower, (ii) violate or constitute (with due notice or lapse of time or
both) a default under any indenture, agreement, license or other instrument to
which the Borrower is a party or by which the Borrower or any of its properties
may be bound or affected, (iii) violate any order of any court, tribunal or
governmental agency binding upon the Borrower or its properties, (iv) result in
the creation or imposition of any Lien of any nature whatsoever upon any
properties or assets of the Borrower, or (v) require any license, consent or
approval of any governmental agency or regulatory authority or any other third
party.
7. Conditions Precedent. This Amendment shall be deemed
effective as of January 19, 1999, upon satisfaction or waiver of each of the
following conditions precedent:
(a) the Borrower and the Bank shall have executed and
delivered counterpart originals or facsimiles hereof;
(b) the Consent attached hereto as Exhibit A shall have
been duly executed by all of the Borrower's Domestic Subsidiaries and delivered
to the Bank;
(c) the Bank shall have received payment in full of the
Amendment Fee; and
(d) all legal, documentary and other matters in
connection with this Amendment and the transactions contemplated hereby shall be
satisfactory to the Bank and its counsel.
8. Default. Any default by the Borrower in the
observance or performance of any term, condition, covenant, representation or
warranty set forth in this Amendment shall constitute an Event of Default under
the Credit Agreement.
9. Miscellaneous.
(a) THIS AMENDMENT SHALL BE GOVERNED BY AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING
EFFECT TO ITS CONFLICT OF LAWS RULES (OTHER THAN SECTION 5-1401 OF THE GENERAL
OBLIGATIONS LAW).
(b) Except as expressly amended hereby, all terms and
conditions of the Credit Agreement and the other Loan Documents, and all rights
of the Bank and obligations of the Borrower thereunder and under all related
documents, shall remain in full force and effect. Without limiting the
generality of the foregoing, nothing herein contained shall be deemed to
increase
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the Commitment.
(c) The Borrower hereby agrees to pay on demand all costs
and expenses (including without limitation the reasonable fees and expenses of
outside counsel to the Bank) incurred by the Bank in connection with the
negotiation, preparation, execution and delivery of this Amendment and all
related documents, whether or not the transactions contemplated hereby are
consummated.
(d) This Amendment may be executed by one or more of the
parties hereto on any number of separate counterparts, and all of said
counterparts taken together shall be deemed to constitute one and the same
instrument. Delivery of an executed signature page to this Amendment by
facsimile transmission shall be as effective as delivery of a manually signed
counterpart hereof.
(e) This Amendment constitutes the entire agreement and
understanding of the parties hereto with respect to the subject matter hereof
and any prior oral agreements or understandings are merged herein.
IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be duly executed by their duly authorized officers as of the day
and year first above written.
V BAND CORPORATION
By:___________________________
Name:
Title:
NATIONAL BANK OF CANADA, NEW YORK BRANCH
By:___________________________
Name:
Title:
By:___________________________
Name:
Title:
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Exhibit A
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CONSENT OF GUARANTORS
Each of the undersigned consents and agrees to the execution and
delivery by the Borrower of the Amendment #3 to Credit Agreement dated as of
January 19, 1999 (the "Amendment") between V Band Corporation and National Bank
of Canada, New York Branch (the "Bank") and to all of the transactions
contemplated by the Amendment. Each of the undersigned acknowledge and agree
that each of the documents which they have executed in connection with the
Credit Agreement are ratified, confirmed and reaffirmed, including, without
limitation, their respective Subsidiary Guarantee, and any other Loan Documents
to which they are party and that such documents are in full force and effect in
accordance with their terms and there are no defenses, counterclaims or rights
of set-off as to any of their respective obligations thereunder. Each of the
undersigned further acknowledges and agrees that the Amendment is supported by
good and valuable consideration by the Bank including, without limitation, the
Bank's agreement to execute the Amendment.
LICOM Incorporated
By:___________________________
Name:
Title:
V Band NE, Inc.
By:___________________________
Name:
Title:
V Band Services, Inc.
By:___________________________
Name:
Title:
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