EXHIBIT 10(ee)
FIRST MODIFICATION
TO LOAN AGREEMENT
Farmstead Telephone Group, Inc.
00 Xxxxxxxx Xxxx Xxxxxx
Xxxx Xxxxxxxx, Xxxxxxxxxxx 00000
(Individually and collectively, "Borrower")
First Union National Bank
000 Xxxx Xxxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
(Hereinafter referred to as "Bank")
THIS AGREEMENT is entered into as of December 19, 2001 by and between Bank
and Borrower.
RECITALS
Bank is the holder of a Promissory Note executed and delivered by Borrower,
dated September 27, 2000, in the original principal amount of $8,000,000.00
(the "Note"); and certain other loan documents, including without
limitation, a Loan Agreement, dated September 27, 2000 (the "Loan
Agreement");
Borrower and Bank have agreed to modify the terms of the Loan Agreement.
In consideration of Bank's continued extension of credit and the agreements
contained herein, the parties agree as follows:
AGREEMENT
MODIFICATIONS.
1. The subsectionof the section entitled FINANCIAL COVENANTS which
subsection is entitled "Funds Flow Coverage Ratio" of the Loan Agreement is
hereby amended by substituting the following in its place and stead:
Funds Flow Coverage Ratio. Borrower shall maintain a Funds Flow Coverage
Ratio of not less than 1.20 to 1.00. Commencing on March 31, 2002, this
covenant shall be calculated quarterly for the fiscal quarter then ending,
then at June 30, 2002, for the two fiscal quarters then ending, then at
September 30, 2002 for the three fiscal quarters then ending and then at
December 31, 2002 for the four fiscal quarters then ending. Thereafter,
the ratio will be measured on a rolling four-quarter basis. "Funds Flow
Coverage Ratio" shall mean the sum of earnings before interest, taxes,
depreciation and amortization divided by the sum of all current maturities
of long term debt and capital lease obligations plus interest plus income
taxes.
ACKNOWLEDGEMENTS AND REPRESENTATIONS. Borrower acknowledges and represents
that the Note and other Loan Documents, as amended hereby, are in full
force and effect without any defense, counterclaim, right or claim of set-
off; that, after giving effect to this Agreement, no default or event that
with the passage of time or giving of notice would constitute a default
under the Loan Documents has occurred, all representations and warranties
contained in the Loan Documents are true and correct as of this date, all
necessary action to authorize the execution and delivery of this Agreement
has been taken; and this Agreement is a modification of an existing
obligation and is not a novation.
MISCELLANEOUS. This Agreement shall be construed in accordance with and
governed by the laws of the applicable state as originally provided in the
Loan Documents, without reference to that state's conflicts of law
principles. This Agreement and the other Loan Documents constitute the
sole agreement
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of the parties with respect to the subject matter thereof and supersede all
oral negotiations and prior writings with respect to the subject matter
thereof. No amendment of this Agreement, and no waiver of any one or more
of the provisions hereof shall be effective unless set forth in writing and
signed by the parties hereto. The illegality, unenforceability or
inconsistency of any provision of this Agreement shall not in any way affect
or impair the legality, enforceability or consistency of the remaining
provisions of this Agreement or the other Loan Documents. This Agreement and
the other Loan Documents are intended to be consistent. However, in the event
of any inconsistencies among this Agreement and any of the Loan Documents, the
terms of this Agreement, and then the Note, shall control. This Agreement may
be executed in any number of counterparts and by the different parties on
separate counterparts. Each such counterpart shall be deemed an original, but
all such counterparts shall together constitute one and the same agreement.
Terms used in this Agreement which are capitalized and not otherwise defined
herein shall have the meanings ascribed to such terms in the Note.
CONNECTICUT PREJUDGMENT REMEDY WAIVER. EACH BORROWER ACKNOWLEDGES THAT THE
TRANSACTIONS REPRESENTED BY THIS AGREEMENT ARE COMMERCIAL TRANSACTIONS AND
HEREBY VOLUNTARILY AND KNOWINGLY WAIVES AND RIGHTS TO THE NOTICE OF AND
HEARING ON PREJUDGMENT REMEDIES UNDER CHAPTER 903A OF THE CONNECTICUT
GENERAL STATUTES OR OTHER STATUTES AFFECTING PREJUDGMENT REMEDIES, AND
AUTHORIZES THE BANK'S ATTORNEY TO ISSUE A WRIT FOR A PREJUDGMENT REMEDY
WITHOUT COURT ORDER, PROVIDED THE COMPLAINT SHALL SET FORTH A COPY OF THIS
WAIVER.
WAIVER OF JURY TRIAL. TO THE EXTENT PERMITTED BY APPLICABLE LAW, BORROWER
BY EXECUTION HEREOF AND BANK BY ACCEPTANCE HEREOF, KNOWINGLY, VOLUNTARILY
AND INTENTIONALLY WAIVE ANY RIGHT THEY MAY HAVE TO A TRIAL BY JURY IN
RESPECT OF ANY LITIGATION BASED ON, OR ARISING OUT OF, UNDER OR IN
CONNECTION WITH THIS AGREEMENT, THE LOAN DOCUMENTS OR ANY AGREEMENT
CONTEMPLATED TO BE EXECUTED IN CONNECTION WITH THIS AGREEMENT, OR ANY
COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR
WRITTEN) OR ACTIONS OF ANY PARTY WITH RESPECT HERETO. THIS PROVISION IS A
MATERIAL INDUCEMENT TO BANK TO ACCEPT THIS AGREEMENT.
BORROWER AND BANK AGREE THAT THEY SHALL NOT HAVE A REMEDY OF PUNITIVE OR
EXEMPLARY DAMAGES AGAINST THE OTHER IN ANY DISPUTE AND HEREBY WAIVE ANY
RIGHT OR CLAIM TO PUNITIVE OR EXEMPLARY DAMAGES THEY HAVE NOW OR WHICH MAY
ARISE IN THE FUTURE IN CONNECTION WITH ANY DISPUTE WHETHER THE DISPUTE IS
RESOLVED BY ARBITRATION OR JUDICIALLY.
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IN WITNESS WHEREOF, the undersigned have signed and sealed this Agreement
the day and year first above written.
PLACE OF EXECUTION AND DELIVERY. Borrower hereby certifies that this
Agreement and the Loan Documents were executed in the State of Connecticut
and delivered to Bank in the State of Connecticut.
Farmstead Telephone Group, Inc.
By: /s/ Xxxxxx X. XxXxxxx (SEAL)
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Xxxxxx X. XxXxxxx, Executive Vice President and Chief Financial Officer
First Union National Bank
By: /s/ Xxxx X. Xxxxx (SEAL)
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Xxxx Xxxxx, Vice President
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