FIRST AMENDMENT TO THE SECOND AMENDED AND
RESTATED LOAN AND SECURITY AGREEMENT
THIS FIRST AMENDMENT TO THE SECOND AMENDED AND RESTATED LOAN AND
SECURITY AGREEMENT (this "Amendment") is made as of this 1st day of January,
1995 by and among EXECUTONE Information Systems, Inc., a Virginia corporation
with its principal place of business at 478 Wheelers Farms Road, Milford,
Connecticut 06460 ("Borrower"), and Bank of America Illinois (formerly known as
Continental Bank, which was, itself, formerly known as Continental Bank, N.A.
an Illinois banking corporation) with an office at 231 South LaSalle Street,
Chicago, Illinois 60697 ("Bank of America"), as agent for the "Lenders"
(hereinafter defined) (in such capacity, the "Agent"), Fleet Bank N.A.
("Fleet"), and Bank of Boston Connecticut, a Connecticut banking corporation
("Bank of Boston"). Bank of America, Fleet and Bank of Boston are hereinafter
collectively referred to as the "Lenders."
W I T N E S S E T H :
WHEREAS, Lenders have made loans, extensions of credit and other
financial accommodations to Borrower pursuant to the Second Amended and Restated
Loan and Security Agreement dated as of August 30, 1994 ("Loan Agreement") by
and among the Agent, the Lenders and Borrower;
WHEREAS, Borrower and the Lenders have agreed to amend Section 5.29 of
the Loan Agreement, and to waive compliance with that Section 5.29 for Fiscal
Year 1994, under the terms and conditions set forth herein; and
NOW, THEREFORE, in consideration of the premises, and in order to induce
the Lenders to amend the Loan Agreement pursuant to the terms hereof, and for
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto hereby agree as follows:
1. Definitions. Unless otherwise defined herein, and except as provided
in Section 2 of this Amendment, all capitalized words and phrases
used in this Amendment shall have the same meanings as are specifically set
forth in the Loan Agreement.
2. Amendments to the Loan Agreement.
(a) Section 5.29 to the Loan Agreement is hereby amended by changing the
maximum amount of Capital Expenditures permitted under the terms and conditions
of Section 5.29 for Fiscal Years 1995 through 1999 to the following:
Fiscal Year Maximum Amount
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1995 $7,500,000
1996 7,500,000
1997 7,500,000
1998 7,500,000
1999 7,500,000
(b) It is understood by all parties hereto that Continental Bank, an
Illinois banking corporation, is now known as Bank of America Illinois, an
Illinois banking corporation; and the Loan Agreement is amended so as to delete
the defined term, "Continental", wherever that term appears therein, and in its
place, insert the term, "Bank of America".
3. Waiver. Borrower hereby acknowledges and agrees that, for Fiscal Year
1994, it exceeded or permitted its Capital Expenditures to exceed the limit set
forth in Section 5.29 of the Loan Agreement by approximately $3,080,000. The
Lenders hereby waive Borrower's obligation to comply with Section 5.29 for
Fiscal Year 1994. However, the foregoing waiver is limited to the specific
matter addressed herein and for the specific time period referenced herein and
shall not be deemed a waiver with respect to any other matter or time period, or
otherwise restrict the exercise or to prejudice any right or remedy of the
Lenders under the Loan Agreement or any other document, agreement or instrument
delivered in connection therewith.
4. Acknowledgment of Borrower. Borrower hereby acknowledges and agrees
that: (a) Borrower has no defense, offset or counterclaim with respect to the
payment of any sum owed to the Lenders, or with respect to the performance or
observance of any warranty or covenant contained in the Loan Agreement or any of
the Related Agreements; and (b) the Lenders have performed all
obligations and duties owed to Borrower through the date hereof.
5. Representations and Warranties of Borrower. To induce the Lenders to
amend the Loan Agreement and to consider making future Loans thereunder,
Borrower represents and warrants to the Lenders that:
(a) Compliance with Loan Agreements. On the date hereof, and except as
discussed in Section 3 of this Amendment, Borrower is in compliance with all of
the terms and provisions set forth in the Loan Agreement (as modified by this
Amendment) and no Event of Default or Unmatured Event of Default has occurred
and is continuing.
(b) Representations and Warranties. On the date hereof, and except as
discussed in Section 3 of this Amendment, the representations and warranties set
forth in Section 4 of the Loan Agreement are true and correct with the same
effect as though such representations and warranties had been made on the date
hereof, except to the extent that such representations and warranties expressly
relate to an earlier date.
(c) Corporate Authority. Borrower has full power and authority to
consummate this Amendment, and to make the borrowings under the Loan Agreement
as amended by this Amendment, and has full power and authority to incur and
perform the obligations provided for under the Loan Agreement and this
Amendment, all of which have been duly authorized by all proper and necessary
corporate action. No consent or approval of stockholders or of any public
authority or regulatory body which has not been obtained is required as a
condition to the validity or enforceability of this Amendment.
(d) Amendment as Binding Agreement. This Amendment constitutes the valid
and legally binding obligation of Borrower fully enforceable against Borrower in
accordance with its terms.
(e) No Conflicting Agreements. The execution and performance by Borrower
of this Amendment, and the borrowing by Borrower under the Loan Agreement, as
amended, will not (i) violate any provision of law, any order of any court or
other agency of government, or the Articles of Incorporation or Bylaws of
Borrower; or (ii) violate any indenture, contract, agreement or other instrument
to which Borrower is a party, or
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by which any of its property is bound, or be in conflict with, result in a
breach of or constitute (with due notice and or lapse of time) a default under,
any such indenture, contract, agreement or other instrument; or (iii) result in
the creation or imposition of any lien, charge or encumbrance of any nature
whatsoever upon any of the property or assets of Borrower, other than in favor
of Agent for the benefit of the Lenders.
6. Effectiveness of This Amendment. The amendments set forth above shall
become effective as of the date of this Amendment only upon the satisfaction of
the following conditions precedent:
(a) Receipt of Documents. Agent shall have received four (4) copies of
this Amendment duly executed by Borrower and the Lenders.
(b) No Material Adverse Change. No event shall have occurred which may
have a material adverse effect on the financial condition or operations of the
Borrower.
(c) Fees and Expenses. Borrower shall have paid the amendment fee of
$10,000.00 as provided in Section 8 of this Amendment.
7. Effect on Loan Agreement. Except as specifically amended hereby, the
terms and provisions of the Loan Agreement are in all other respects ratified
and confirmed and remain in full force and effect. No reference to this
Amendment need be made in any notice, writing or other communication relating to
the Loan Agreement; any such reference to the Loan Agreement shall be deemed to
be a reference thereto as amended by this Amendment.
8. Fees and Expenses. Borrower hereby agrees to pay all reasonable
out-of-pocket expenses incurred by the Lenders in connection with the
preparation, negotiation and consummation of this Amendment, and all other
documents related hereto (whether or not any borrowing under the Loan Agreement
as amended shall be consummated), including, without limitation, the reasonable
fees and expenses of the Lenders' counsel, and any filing fees and recordation
tax required in connection with the filing of any documents necessary to
consummate the provisions of this Amendment. To induce Lenders to enter into
this Amendment, Borrower further agrees to pay an
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amendment fee of $10,000.00 to Bank of America which shall be fully earned and
non-refundable upon execution of this Amendment, and which shall be distributed
on a pro-rata basis to each of the Lenders pursuant to Sections 2.11 and 2.14 of
the Loan Agreement.
9. Governing Law. This Amendment shall be construed in accordance with
and governed by the laws of the State of Illinois, without regard to the
conflict of laws principles thereof.
10. Counterparts. This Amendment may be executed in any number of
counterparts, each of which shall be deemed original and all of which taken
together shall constitute one and the same Amendment.
11. Indemnification. Borrower hereby agrees to indemnify and hold
harmless each Lender, the Agent, their respective affiliates and their
respective directors, officers, employees, agents and controlling persons (each
being an "Indemnified Party") from and against any and all claims, damages,
liabilities and expenses (including, without limitation, reasonable fees and
disbursements of counsel) that may be incurred by or asserted against such
Indemnified Party in connection with the investigation of, preparation for or
defense of any pending or threatened claim or any action or proceeding arising
out of or relating to the Loan Documents and this Amendment, whether or not such
Indemnified Party is a party hereto, provided that Borrower shall not be liable
for any such claims, damages, liabilities or expenses resulting from such
Indemnified Party's own gross negligence or willful misconduct. The obligations
of the Borrower described in this Section are independent of all other
obligations of the Borrower hereunder and under the documentation which will
evidence the transactions contemplated hereunder and shall survive the
expiration and termination of the Loan Agreement, and shall be payable on
demand.
12. Release. In consideration of the mutual covenants herein contained,
and for other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, Borrower for itself and on behalf of all present
and former officers, directors, stockholders, agents, employees, predecessors,
subsidiaries, affiliates, successors and assigns (all of the foregoing hereafter
collectively referred to as ("Releasors") have fully and forever remised,
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released and discharged and do hereby fully and forever remise, release and
discharge the Lenders, and each and all of their respective subsidiary and
affiliated corporations, companies, divisions, predecessors, successors and
assigns, and each and all of its directors, officers, employees, attorneys,
accountants, consultants, and other agents, of and from all manner of actions,
cause and causes of action, suits, debts, sums of money, accounts, reckonings,
bonds, bills, specialties, covenants, contracts, controversies, agreements,
promises, judgments, executions, claims and demands of whatsoever, whether or
not concealed or hidden, arising out of or relating to any matter, cause or
thing whatsoever, which the Releasors, jointly or severally, have had, may have
had, or now have, or which the Releasors, jointly or severally, hereafter can,
shall or may have, for or by reason of any matter, cause or thing whatsoever,
whenever arising, to and including the date of this Amendment.
IN WITNESS WHEREOF, Borrower has caused this Amendment to be duly
executed under seal by its duly authorized officer and the Lenders have caused
this Amendment to be executed by their duly authorized officers, all as of the
date and year first above written.
EXECUTONE INFORMATION SYSTEMS, INC. a Virginia corporation
By:________________________________
Name:______________________________
Its:_______________________________
BANK OF AMERICA ILLINOIS, individually, and as Agent
By:________________________________
Name:______________________________
Its:_______________________________
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FLEET BANK N.A.
By:________________________________
Name:______________________________
Its:_______________________________
BANK OF BOSTON CONNECTICUT
By:________________________________
Name:______________________________
Its:_______________________________
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