Exhibit 10.9

WAIVER AND

SEVENTEENTH AMENDMENT TO CREDIT AGREEMENT

THIS WAIVER AND SEVENTEENTH AMENDMENT TO CREDIT AGREEMENT (this “Amendment”) is
entered into as of March 22, 2012, by and among Dialogic Corporation, a British
Columbia corporation (“Borrower”), Dialogic Inc., a Delaware corporation
formerly known as Veraz Networks, Inc. (“Parent”), Wells Fargo Foothill Canada
ULC, an unlimited corporation existing under the laws of Alberta, as
administrative agent for the Lenders (“Administrative Agent”), and the financial
institutions named as lenders on the signature pages hereto (the “Lenders”).

WHEREAS, Borrower, Administrative Agent and the Lenders are parties to that
certain Credit Agreement dated as of March 5, 2008 (as amended, restated,
supplemented or otherwise modified from time to time, the “Credit Agreement”);

WHEREAS, Events of Default have occurred and are continuing under the Loan
Agreement, as more particularly described on Exhibit A hereto (the “Existing
Events of Default”);

WHEREAS, Borrower and Parent have requested that Administrative Agent and
Required Lenders waive the Existing Events of Default and subject to the terms
and conditions specified herein, Administrative Agent and Required Lenders have
agreed to waive the Existing Events of Default; and

WHEREAS, Borrower, Parent, Administrative Agent and Required Lenders have agreed
to amend the Credit Agreement as set forth herein;

NOW, THEREFORE, in consideration of the premises and mutual agreements herein
contained, the parties hereto agree as follows:

1. Defined Terms. Unless otherwise defined herein, capitalized terms used herein
shall have the meanings ascribed to such terms in the Credit Agreement.

2. Waiver.

(a) Subject to the satisfaction of the conditions set forth in Section 4 below
and in reliance on the representations and warranties set forth in Section 5
below, Administrative Agent and Required Lenders hereby waive the Existing
Events of Default. The foregoing waiver shall not constitute (a) a modification
or alteration of the terms, conditions or covenants of the Credit Agreement or
any other Loan Document, (b) a waiver of, or consent to, any other breach of, or
any other Event of Default under, the Credit Agreement or any other Loan
Document, or (c) a waiver, release or limitation upon the exercise by
Administrative Agent or any Lender of any of its rights, legal or equitable,
under the Credit Agreement, the other Loan Documents and applicable law, all of
which are hereby reserved.

 

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3. Amendments. Subject to the satisfaction of the conditions set forth in
Section 4 below and in reliance on the representations and warranties set forth
in Section 5 below, the Credit Agreement is hereby amended as follows:

(a) The first sentence of Section 3.3 of the Credit Agreement is hereby amended
and restated as follows:

This Agreement shall continue in full force and effect for a term ending on the
earlier of (i) March 31, 2015, or (ii) the maturity date of the Term Loan
Indebtedness (by acceleration or otherwise) under the Term Loan Credit Agreement
(the “Maturity Date”).

(b) Section 5.25 is hereby amended and restated in its entirety as follows:

5.25 [Intentionally Omitted]

(c) Section 6.1(f) is hereby amended and restated in its entirety as follows:

(f) Term Loan Indebtedness and any refinancing thereof, in each case to the
extent permitted by the Intercreditor Agreement (it being understood that the
principal amount of the Term Loan Indebtedness on the Seventeenth Amendment
Effective Date is $92,833,006.75),

(d) Section 6.4(b) is hereby amended and restated in its entirety as follows:

(b) other assets having an aggregate book value in excess of $1,000,000 during
any calendar year.

(e) Section 6.12(a) of the Credit Agreement is hereby amended and restated in
its entirety as follows:

(a) Except for Permitted Investments, directly or indirectly, make or acquire
any Investment or incur any liabilities (including contingent obligations) for
or in connection with any Investment; provided, however, that (i) Borrower and
Guarantors shall not have Permitted Investments (other than in the Cash
Management Accounts) in Deposit Accounts or Securities Accounts in an aggregate
amount in excess of $250,000 at any one time unless Borrower or such Guarantor,
as applicable, and the applicable securities intermediary or bank have entered
into Control Agreements governing such Permitted Investments in order to perfect
(and further establish) the Agent’s Liens in such Permitted Investments and
(ii) the Non-Guarantor Subsidiaries of Parent shall not have Permitted
Investments other than in Deposit Accounts or Securities Accounts having an
aggregate balance equal to or less than $200,000 (or, in the case of Deposit
Accounts with respect to Subsidiaries formed in (a) France, balances equal to or
less than $1,500,000, (b) India, balances equal to or less than $1,500,000 and
(c) Russia, balances equal to or less than $2,500,000, in each case in the
aggregate for all Subsidiaries formed in each such country). Subject to the
foregoing proviso, Parent shall not and shall not permit any Guarantor to
establish or maintain any Deposit Account or Securities Account unless Agent
shall have received a Control Agreement in respect of such Deposit Account or
Securities Account. Upon receipt by Agent of any such Control Agreement,
Schedule 4.17 shall be deemed to be automatically updated to refer to the
applicable Deposit Account or Securities Account covered by such Control
Agreement

 

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(f) Section 6.12(b)(vii) of the Credit Agreement is hereby amended and restated
in its entirety as follows:

(vii) Parent may make Investments in any of its Subsidiaries that are not
Guarantors so long as (A) such Investments are in the form of an intercompany
loan and used solely (1) to fund ordinary course business expenses of
Subsidiaries that are not Guarantors, and (2) to fund Capital Expenditures of
such Subsidiaries, and (B) such Subsidiaries are party to the Intercompany
Subordination Agreement; and

(g) Section 6.12(b) of the Credit Agreement is hereby amended by adding a new
clause (viii) at the end thereof as follows:

(viii) Parent, Borrower and any Guarantor may make Investments in any of their
Subsidiaries that are not Guarantors so long as (A) such Investments either
(1) are used solely to capitalize newly formed Subsidiaries that are not
required to become Guarantors in an amount not to exceed $1,500,000 for any one
Subsidiary and $4,000,000 in the aggregate for all such Subsidiaries, or
(2) otherwise, do not to exceed $3,000,000 in the aggregate during the term of
the Agreement, and (B) if such Investments are in the form of intercompany
loans, such Subsidiaries are party to the Intercompany Subordination Agreement;
provided that with respect to Investments made pursuant to this clause (viii),
such Investments shall only be permitted if at the time any such Investment is
made (i) no Default or Event of Default has occurred or is continuing,
(ii) Borrower shall have Availability plus any unencumbered cash held by
Borrower or any Guarantor (in the United States or any foreign jurisdiction) of
at least $2,500,000, both before and after giving effect to such Investments,
and (iii) Borrower shall be in compliance with the financial covenants in
Section 6.16 on a pro forma basis both before and after giving effect to such
Investments.

(h) Section 6.16(a) of the Credit Agreement is hereby amended and restated in
its entirety as follows:

(a) Minimum EBITDA. Fail to achieve EBITDA, measured on a quarter-end basis, of
at least the required amount set forth in the following table for the applicable
period set forth opposite thereto:

 

Applicable Amount    Applicable Period

$1,000,000

  

For the 3-month period ending on

June 30, 2012

$4,000,000

   For the 6-month period ending on September 30, 2012

$7,500,000

   For the 9-month period ending on December 31, 2012

 

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$15,000,000

   For the 12-month period ending on March 31, 2013

$16,900,000

  

For the 12-month period ending on

June 30, 2013

$17,100,000

   For the 12-month period ending on September 30, 2013

$17,100,000

   For the 12-month period ending on December 31, 2013

$18,100,000

  

For the 12-month period ending on

March 31, 2014

$19,400,000

  

For the 12-month period ending on

June 30, 2014

$20,900,000

   For the 12-month period ending on September 30, 2014

$22,600,000

   For the 12-month period ending on December 31, 2014

$24,700,000

  

For the 12-month period ending on

March 31, 2015 and the last date of each 12-month period thereafter.

; provided that EBITDA shall only be tested for the periods ending on June 30,
2012, September 30, 2012 and December 31, 2012 as described above if the average
amount of Availability plus any unencumbered cash held by Borrower or any
Guarantor (in the United States or any foreign jurisdiction) for the 30-day
period immediately preceding the applicable testing date is less than
$2,500,000.

Concurrently with the closing of each Permitted Acquisition (it being understood
that none of the transactions contemplated by the Acquisition Agreement is a
Permitted Acquisition), each EBITDA level set forth above shall be increased by
80% of pro forma adjustment to EBITDA as set forth in the definition thereof for
any applicable Reference Period.

(i) Schedule 1.1 to the Credit Agreement is hereby amended by adding the
following defined terms in the appropriate alphabetical order therein as
follows:

“Dialogic Brazil” means Dialogic do Brasil Comercio de Equipamentos Para
Telecomunicacao Ltda., formerly known as Veraz Networks Do Brasil Comercio De
Equipamentos Para Telecomunicacao Ltda.

“Dialogic Israel” means Dialogic Networks (Israel) Ltd.

“Seventeenth Amendment Effective Date” means March 22, 2012.

(j) Schedule 1.1 to the Credit Agreement is hereby amended by amending and
restating clause (a)(i)(A) of the defined term “Eligible Accounts” in its
entirety as follows:

(A) that the Account Debtor has failed to pay within 120 days of original
invoice date or within 90 days of the original due date, or

 

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(k) Schedule 1.1 to the Credit Agreement is hereby amended by amending and
restating clause (c) of the defined term “Borrowing Base” in its entirety as
follows:

(c) the sum of (i) the Bank Product Reserve, (ii) the Rent Reserve, (iii) the
Irish Reserve, and (iv) the aggregate amount of reserves, if any, established by
Agent under Section 2.1(b).

(l) Schedule 1.1 to the Credit Agreement is hereby amended by adding new
subclauses (x), (xi) and (xii) to clause (b) of the defined term “EBITDA” as
follows:

(x) in connection with the Restructuring (as defined in the Term Loan Credit
Agreement), transaction fees and expenses paid in cash in an amount not to
exceed $8,000,000 in the aggregate, plus

(xi) cash fees and expenses incurred in connection with any proceeding by a
Governmental Authority pending as of the Seventeenth Amendment Effective Date,
plus

(xii) non-recurring cash restructuring charges or other non-recurring cash
expenses incurred to restructure or improve productivity or cost effectiveness
of assets or operations, including facility or office closures, surrender of
leasehold interests, consolidation and integration costs and severance,
relocation and retention bonuses, in an amount not to exceed $6,000,000 in the
aggregate, and in each case, approved by the Agent in its reasonable discretion,

(m) Schedule 1.1 to the Credit Agreement is hereby amended by amending and
restating the defined terms “Base Rate Margin”, “Guarantor”, “Guaranties”,
“LIBOR Rate Margin”, “Permitted Dispositions”, “Permitted Investments” and
“Security Agreements” in their entirety as follows:

“Base Rate Margin” means 1.50 percentage points.

“Guarantor” means (a) Parent, (b) Dialogic US, (c) Dialogic Ireland,
(d) Cantata, (e) Dialogic Israel, (f) Dialogic Brazil and (g) any other
Subsidiary of the Parent that becomes party to the Guaranties by executing a
joinder thereto, and “Guarantor” means any one of them

“Guaranties” means (a) that certain general continuing guaranty executed and
delivered by Dialogic US and Cantata in favor of Agent, for the benefit of the
Lender Group and Bank Product Providers, in form and substance satisfactory to
Agent, (b) that certain guaranty and indemnity executed and delivered by
Dialogic Ireland in favor of Agent, for the benefit of Lender Group and Bank
Product Providers, in form and substance satisfactory to Agent, (c) those
certain joinders to general continuing guaranty executed and delivered by
Dialogic Israel and

 

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Dialogic Brazil in favor of Agent, for the benefit of Lender Group and Bank
Product Providers, in form and substance satisfactory to Agent, and (d) any
joinder to general continuing guaranty executed and delivered by any other party
that becomes a Guarantor hereunder in favor of Agent, for the benefit of Lender
Group and Bank Product Providers, in form and substance satisfactory to Agent.

“LIBOR Rate Margin” means 3.00 percentage points.

“Permitted Dispositions” means (a) sales or other dispositions of Equipment that
is substantially worn, damaged, or obsolete in the ordinary course of business,
(b) sales or leases of Inventory to buyers in the ordinary course of business,
(c) the use or transfer of money or Cash Equivalents in a manner that is not
prohibited by the terms of the Agreement or the other Loan Documents, (d) the
licensing, on a non-exclusive basis, of patents, trademarks, copyrights, and
other intellectual property rights in the ordinary course of business, (e) sale
or disposition of United States patent numbers 5,812,819 and 5,598,536 and any
corresponding foreign patents directly related thereto, and (f) sale or
disposition of Borrower’s or its Subsidiaries’ (i) ISDN client line of products
and assets directly associated therewith, (ii) VPN line of products and assets
directly associated therewith, or (iii) X.25 line of products and assets
directly associated therewith; provided that with respect to sales or
dispositions made pursuant to clauses (e) and (f), such sale or disposition
shall only be permitted so long as no Default or Event of Default has occurred
or is continuing either prior to or after giving effect to such sale or
disposition.

“Permitted Investments” means (a) Investments in cash and Cash Equivalents,
(b) Investments in negotiable instruments for collection, (c) advances made in
connection with purchases or leases of goods or services and the licensing of
intellectual property in the ordinary course of business, (d) Investments
received in settlement of amounts due to Parent or any of its Subsidiaries
effected in the ordinary course of business or owing to Parent or any of its
Subsidiaries as a result of Insolvency Proceedings involving an Account Debtor
or upon the foreclosure or enforcement of any Lien in favor of Parent or its
Subsidiaries and (e) Investments to capitalize newly-formed Subsidiaries that
are not required by this Agreement to become Guarantors in an amount not to
exceed $1,500,000 in the case of any one Subsidiary and $4,000,000 in the case
of all such Subsidiaries; provided that with respect to Investments made
pursuant to clause (e), such Investments shall only be permitted if at the time
any such Investment is made (i) no Default or Event of Default has occurred or
is continuing, (ii) Borrower shall have Availability plus any unencumbered cash
held by Borrower or any Guarantor (in the United States or any foreign
jurisdiction) of at least $2,500,000, both before and after giving effect to
such Investments, and (iii) Borrower shall be in compliance with the financial
covenants in Section 6.16 on a pro forma basis both before and after giving
effect to such Investments.

 

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“Security Agreements” means (a) the general security agreement, in form and
substance satisfactory to Agent, executed and delivered by Borrower to Agent,
(b) a deed of hypothec and issue of bond, a 25% demand bond, a delivery order
with respect to the 25% demand bond and a pledge of bond agreement, each in form
and substance satisfactory to Agent and executed and delivered by Borrower to
Agent, (c) a security agreement, in form and substance satisfactory to Agent,
executed and delivered by Dialogic US and Cantata to Agent, (d) those certain
joinders to security agreement, in form and substance satisfactory to Agent,
executed and delivered by Dialogic Israel and Dialogic Brazil to Agent, (e) a
charge and assignment, in form and substance satisfactory to Agent, executed and
delivered by Dialogic Ireland to Agent, (f) a debenture – floating and Fixed
charge, in form and substance satisfactory to Agent, executed and delivered by
Dialogic Israel to Agent, and (g) an asset pledge agreement, in form and
substance satisfactory to Agent, executed and delivered by Dialogic Brazil to
Agent.

(n) Schedule 1.1 is amended by deleting the defined term “Specified Immaterial
Subsidiaries”.

(o) Schedule P-2, 4.3, 4.5, 4.7(a), 4.7(b), 4.7(c), 4.8(b), 4.8(c), 4.8(d),
4.13, 4.14, 4.15, 4.17, 4.20 and 5.2 to the Credit Agreement are each hereby
amended and restated in their entirety in the form attached hereto.

4. Conditions to Effectiveness of Amendment. This Amendment shall become
effective upon the satisfaction of the following conditions (each in form and
substance satisfactory to Administrative Agent):

(a) each party hereto shall have executed and delivered this Amendment to
Administrative Agent;

(b) Administrative Agent shall have received the fees payable on the date hereof
referred to in the Amended and Restated Fee Letter, dated as of the date hereof;

(c) Administrative Agent shall have received fully executed copies of the
Consent and Reaffirmation attached hereto;

(d) Administrative Agent shall have received fully executed copies of the
documents listed on Exhibit B hereto; and

(e) no Default or Event of Default (other than the Existing Events of Default)
shall have occurred and be continuing.

5. Representations and Warranties. In order to induce Administrative Agent and
the Lenders to enter into this Amendment, Borrower hereby represents and
warrants to Administrative Agent and the Lenders:

(a) all representations and warranties contained in the Credit Agreement and the
other Loan Documents are true and correct on and as of the date of this
Amendment, in each

 

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case as if made on and as of such date, except (i) to the extent such
representations and warranties expressly refer to an earlier date (in which case
such representations and warranties were true and correct in all material
respects (unless otherwise qualified by materiality, Material Adverse Changes or
a dollar threshold, in which case they shall be true in all respects) on and as
of such earlier date, (ii) to the extent that any Schedule relating to any such
representation and warranty was not required to be updated pursuant to the terms
of the Credit Agreement (it being understood that the Agent has not requested
any such update), (iii) to the extent such representations or warranties are not
true and correct solely as a result of the Existing Events of Default, and
(iv) that the existence of the Existing Events of Default shall not, in and of
itself, be deemed to be a “Material Adverse Change” for purposes of Section 4.11
of the Credit Agreement;

(b) no Default or Event of Default (other than the Existing Events of Default)
has occurred and is continuing; and

(c) this Amendment constitutes a legal, valid and binding obligation of Borrower
and is enforceable against Borrower in accordance with its terms.

6. Release.

(a) In consideration of the agreements of Administrative Agent and Lenders
contained herein and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, each of Parent and each Subsidiary
of Parent, on behalf of itself, its successors, assigns, and other legal
representatives, hereby absolutely, unconditionally and irrevocably releases,
remises and forever discharges Administrative Agent, Lenders, Wells Fargo, Wells
Fargo Capital Finance, LLC and Wells Fargo Capital Finance, Inc. and their
successors and assigns, and their present and former shareholders, predecessors,
directors, officers, attorneys, employees, agents and other representatives and
their affiliates, subsidiaries and divisions engaged in the provision of
financial services to Borrower and any of its subsidiaries (Administrative
Agent, each Lender, Wells Fargo, Wells Fargo Capital Finance, LLC and Wells
Fargo Capital Finance, Inc. and all such other Persons being hereinafter
referred to collectively as the “Releasees” and individually as a “Releasee”),
of and from all demands, actions, causes of action, suits, covenants, contracts,
controversies, agreements, promises, sums of money, accounts, bills, reckonings,
damages and any and all other claims, counterclaims, defenses, rights of
set-off, demands and liabilities whatsoever (individually, a “Claim” and
collectively, “Claims”) of every name and nature, known or unknown, suspected or
unsuspected, both at law and in equity, which Parent or such Subsidiary or any
of their successors, assigns, or other legal representatives may now or
hereafter own, hold, have or claim to have against the Releasees or any of them
for, upon, or by reason of any circumstance, action, cause or thing whatsoever
which has arisen at any time on or prior to the date of this Amendment for or on
account of, or in relation to, or in any way in connection with any of the
Credit Agreement, or any of the other Loan Documents or transactions thereunder
or related thereto.

(b) Each of Parent and each Subsidiary of Parent understands, acknowledges and
agrees that the release set forth above may be pleaded as a full and complete
defense and may be used as a basis for an injunction against any action, suit or
other proceeding which may be instituted, prosecuted or attempted in breach of
the provisions of such release.

 

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(c) Each of Parent and each Subsidiary of Parent agrees that no fact, event,
circumstance, evidence or transaction which could now be asserted or which may
hereafter be discovered shall affect in any manner the final, absolute and
unconditional nature of the release set forth above.

7. Foreign Opinions. The Agent shall receive opinions in form and substance
satisfactory to the Agent within ten (10) Business Days of the Seventeenth
Amendment Effective Date (or such longer time period agreed upon by Agent) from
(i) Lawson Lundell, special Canadian counsel for the Borrower, (ii) Davies Ward
Phillips & Vineberg LLP, special Canadian counsel for the Borrower, and
(iii) McCann FitzGerald, special Irish counsel for Dialogic Ireland.

8. Miscellaneous.

(a) Expenses. Each of Parent and each Subsidiary of Parent agrees to pay on
demand all costs and expenses of Administrative Agent (including the reasonable
fees and expenses of outside counsel for Administrative Agent) in connection
with the preparation, negotiation, execution, delivery and administration of
this Amendment and all other instruments or documents provided for herein or
delivered or to be delivered hereunder or in connection herewith.

(b) Governing Law. This Amendment shall be a contract made under and governed by
the laws of the province of Ontario, Canada.

(c) Counterparts. This Amendment may be executed in any number of counterparts,
and by the parties hereto on the same or separate counterparts, and each such
counterpart, when executed and delivered, shall be deemed to be an original, but
all such counterparts shall together constitute but one and the same Amendment.

 

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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed
by their respective officers thereunto duly authorized and delivered as of the
date first above written.

 

DIALOGIC CORPORATION, a British Columbia corporation By  

/s/ Anthony Housefather

Name:   Anthony Housefather Title:   Director DIALOGIC, INC., a Delaware
corporation formerly known as Veraz Networks, Inc. By  

/s/ Anthony Housefather

Name:   Anthony Housefather Title:   Secretary WELLS FARGO FOOTHILL CANADA ULC,
as Administrative Agent and as a Lender By  

/s/ Domenico Consentino

Name:

 

Domenico Consentino

Title:  

Vice President

Signature Page to Waiver and Seventeenth Amendment to Credit Agreement

 

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CONSENT AND REAFFIRMATION

Dialogic (US) Inc., formerly known as Dialogic Inc. (“Dialogic US”), Cantata
Technology, Inc. (“Cantata”), Dialogic Distribution Limited (“Dialogic
Ireland”), Dialogic Networks (Israel) Ltd. (“Dialogic Israel”) and Dialogic do
Brasil Comercio de Equipamentos Para Telecomunicacao Ltda., formerly known as
Veraz Networks Do Brasil Comercio De Equipamentos Para Telecomunicacao Ltda.
(“Dialogic Brazil”; Dialogic US, Cantata, Dialogic Ireland, Dialogic Israel and
Dialogic Brazil are each, individually, a “Guarantor” and, collectively, the
“Guarantors”) each hereby (i) acknowledges receipt of a copy of the foregoing
Waiver and Seventeenth Amendment to Credit Agreement (the “Amendment”;
capitalized terms used but not otherwise defined herein shall have the meanings
ascribed to such terms in that certain Credit Agreement dated as of March 5,
2008 (as amended through the date hereof) by and among Dialogic Inc., formerly
known as Veraz Networks, Inc., Dialogic Corporation, Wells Fargo Foothill Canada
ULC, as administrative agent for the Lenders (in such capacity, “Administrative
Agent”), and the lenders from time to time party thereto (the “Lenders”)),
(ii) consents to Borrower’s execution and delivery of the Amendment;
(iii) agrees to be bound by the Amendment (including without limitation,
Sections 6 and 8(a) thereof); (iv) affirms that nothing contained in the
Amendment shall modify in any respect whatsoever any Loan Document to which it
is a party except as expressly set forth therein; and (v) reaffirms its
obligations under each of the other Loan Documents to which it is a party
(collectively, the “Reaffirmed Loan Documents”). Although each Guarantor has
been informed of the matters set forth herein and has acknowledged and agreed to
same, each Guarantor understands that neither Administrative Agent nor the
Lenders have any obligation to inform any Guarantor of such matters in the
future or to seek any Guarantor’s acknowledgment or agreement to future
amendments, waivers or consents, and nothing herein shall create such a duty.

The undersigned further agree that after giving effect to the Amendment, each
Reaffirmed Loan Document shall remain in full force and effect.

 

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IN WITNESS WHEREOF, each Guarantor has executed this Consent and Reaffirmation
on and as of the date of the Amendment.

 

DIALOGIC (US) INC., a Delaware corporation formerly known as Dialogic Inc. By:  

/s/ Anthony Housefather

Name:  

Anthony Housefather

Title:  

Secretary

CANTATA TECHNOLOGY, INC.,

a Massachusetts corporation

By:  

/s/ Anthony Housefather

Name:  

Anthony Housefather

Title:  

Director

DIALOGIC DISTRIBUTION LIMITED

(a company organized under the laws of Ireland)

By:  

/s/ Anthony Housefather

Name:  

Anthony Housefather

Title:  

Director

SIGNED SEALED AND DELIVERED AS A DEED By  

/s/ Anthony Housefather

the attorney for and on behalf of

DIALOGIC DISTRIBUTION LIMITED

in the presence of:

Witness:  

/s/ Stephen Becker

Print Name:  

Stephen Becker

Print Address:  

9800 Cavendish Blvd.

5th floor, Montreal, Canada

Signature Page to Waiver and Seventeenth Amendment to Credit Agreement

 

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DIALOGIC NETWORKS (ISRAEL) LTD.,

a limited liability company incorporated under the laws of Israel

By:  

/s/ Anthony Housefather

Name:  

Anthony Housefather

Title:  

Director

DIALOGIC DO BRASIL COMERCIO DE EQUIPAMENTOS PARA TELECOMUNICACAO LTDA., a
limited liability company duly organized and existing under the laws of Brazil,
f/k/a Veraz Networks Do Brasil Comercio De Equipamentos Para Telecomunicacao
Ltda. By:  

/s/ Jobelino Vitoriano Locateli

Name:  

Jobelino Vitoriano Locateli

Title:  

Legal Representative

Signature Page to Waiver and Seventeenth Amendment to Credit Agreement

 

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EXHIBIT A TO

WAIVER AND SEVENTEENTH AMENDMENT

Existing Events of Default

 

1. Event of Default existing under Section 7.8 of the Credit Agreement as a
result of the occurrence of an “Event of Default” under the Term Loan Credit
Agreement due to the failure of Parent to achieve Liquidity (as defined in the
Term Loan Credit Agreement) of at least the required amount set forth in the
Term Loan Credit Agreement for the Fiscal Quarter ended on or about March 31,
2011.

 

2. Event of Default existing under Section 7.8 of the Credit Agreement as a
result of the occurrence of an “Event of Default” under the Term Loan Credit
Agreement due to the failure of Parent to achieve Liquidity (as defined in the
Term Loan Credit Agreement) of at least the required amount set forth in the
Term Loan Credit Agreement for the Fiscal Quarter ended on or about June 30,
2011.

 

3. Event of Default existing under Section 7.8 of the Credit Agreement as a
result of the occurrence of an “Event of Default” under the Term Loan Credit
Agreement due to the failure of Parent to comply with Section 10.13 (Minimum
Interest Coverage Ratio), Section 10.14 (Minimum EBITDA), Section 10.15 (Maximum
Consolidated Total Leverage Ratio) and Section 10.16 (Liquidity) in each case
for the Fiscal Quarter ended on or about September 30, 2011.

 

4. Event of Default existing under Section 7.8 of the Credit Agreement as a
result of the failure of the Parent to comply with Section 6.16(a) of the Credit
Agreement by meeting minimum EBITDA of at least the required amount set forth in
the Credit Agreement for the 12 month period ending on September 30, 2011.

 

5. Event of Default existing under Section 7.8 of the Credit Agreement as a
result of the occurrence of an “Event of Default” under the Term Loan Credit
Agreement due to the failure of Parent to comply with Section 10.13 (Minimum
Interest Coverage Ratio), Section 10.14 (Minimum EBITDA), Section 10.15 (Maximum
Consolidated Total Leverage Ratio) and Section 10.16 (Liquidity) in each case
for the Fiscal Quarter ended on or about December 31, 2011.

 

6. Event of Default existing under Section 7.8 of the Credit Agreement as a
result of the failure of the Parent comply with Section 6.16(a) of the Credit
Agreement by meeting minimum EBITDA of at least the required amount set forth in
the Credit Agreement for the 12 month period ending on December 31, 2011.

 

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EXHIBIT B TO

WAIVER AND SEVENTEENTH AMENDMENT

Closing Checklist

 

1. Waiver and Seventeenth Amendment to Credit Agreement, together with Schedules
and Exhibits

 

2. Amended and Restated Fee Letter

 

3. Third Amended and Restated Term Loan Agreement

 

4. Opinions of Counsel re Loan Documents:

 

  a. Davis Wright Tremaine LLP (US)

 

  b. Davies Ward Phillips & Vineberg LLP (Canada)

 

  c. Lawson Lundell LLP (Canada)

 

  d. McCann Fitzgerald (Ireland)

 

-15-

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Schedule 5.2

Provide Agent (and if so requested by Agent, with copies for each Lender) with
each of the documents set forth below at the following times in form
satisfactory to Agent:

 

Monthly; provided however, if the amount of cash held by Borrower and each
Guarantor (in the United States or any foreign jurisdiction) is less than
$10,000,000 at any time, such deliveries shall be provided to Agent on a
bi-monthly basis (or, on a weekly basis if Agent so elects in its sole
discretion)   

(a) an Account roll-forward with supporting details supplied from sales
journals, collection journals, credit registers and any other records (delivered
electronically in an acceptable format),

 

(b) upon Agent’s request, notice of all claims, offsets, or disputes asserted by
Account Debtors with respect to any Borrowing Base Company’s Accounts,

 

(c) upon Agent’s request, copies of invoices together with corresponding
shipping and delivery documents, and credit memos together with corresponding
supporting documentation, with respect to invoices and credit memos in excess of
an amount determined in the sole discretion of Agent, from time to time, and

 

(d) Upon Agent’s request, Inventory system/perpetual reports specifying the cost
of each Borrowing Base Company’s Inventory, by category, with additional detail
showing additions to and deletions therefrom (delivered electronically in an
acceptable format).

Monthly (no later than the 10th day of each month for the previous month-end)   

(e) a Borrowing Base Certificate (delivered electronically in an acceptable
format),

 

(f) a detailed aging, by total, of any Borrowing Base Company’s Accounts,
together with a reconciliation for any reconciling items noted and supporting
documentation (delivered electronically in an acceptable format),

 

(g) upon Agent’s request, a detailed Inventory system/perpetual report together
with a reconciliation to each Borrowing Base Company’s general ledger accounts
(delivered electronically in an acceptable format),

 

(h) a summary aging, by vendor, of Parent’s and its Subsidiaries’ accounts
payable and any book overdraft (delivered electronically in an acceptable
format) and an aging, by vendor, of any held checks,

 

(i) a summary report regarding Parent’s and its Subsidiaries’ cash and Cash
Equivalents, including an indication of which amounts constitute Qualified Cash,
and

 

(j) upon Agent’s request, a monthly Account roll-forward, in a format acceptable
to Agent in its discretion, tied to the beginning and ending account receivable
balances of Borrower’s general ledger.

 

Signature Page to Waiver and Seventeenth Amendment to Credit Agreement

 

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   (k) a copy of the bank statement concerning deposit account number 30663020
held by Dialogic Ireland at Bank of Ireland until such deposit account is
closed. Monthly (no later than the 30th day of each month)   

(l) a reconciliation of Accounts, trade accounts payable, and Inventory of each
Borrowing Base Company’s general ledger accounts to its monthly financial
statements including any book reserves related to each category (delivered
electronically in an acceptable format),

 

(m) a summary report of all distributor price adjustments, and

 

(n) a report regarding Borrower’s and Guarantors’ accrued, but unpaid, payroll
and taxes (including real estate, ad valorem and Canadian taxes).

Annually    (o) a detailed list of each Borrowing Base Company’s customers, with
address and contact information. Upon request by Agent   

(p) copies of purchase orders and invoices for Inventory acquired by any
Borrowing Base Company, and

 

(q) such other reports as to the Collateral or the financial condition of each
Borrowing Base Company, as Agent may reasonably request.

Signature Page to Waiver and Seventeenth Amendment to Credit Agreement