Exhibit 10.7

 

WAIVER AND SECOND AMENDMENT TO CREDIT AGREEMENT

 

THIS WAIVER AND SECOND AMENDMENT TO CREDIT AGREEMENT (the “Amendment”), dated
March 28, 2006 is among SPECTRALINK CORPORATION, a Delaware corporation (the
“Borrower”), the lenders party hereto, and JPMORGAN CHASE BANK, N.A., as the
administrative agent (the “Administrative Agent”).

 

RECITALS:

 

A.            The Borrower, the Administrative Agent, and the lenders party
thereto have entered into that certain Credit Agreement dated as of December 9,
2005 (as amended by that certain First Amendment to Credit Agreement dated
December 21, 2005 among the Borrower, the Administrative Agent and the Lenders
party thereto, the “Agreement”).

 

B.            Pursuant to that certain Master Assignment and Acceptance dated as
of December 23, 2005, JPMorgan Chase Bank, N.A. assigned a portion of its
Commitment, Revolving Loans and Term Loans to Comerica West Incorporated,
Guaranty Bank, KeyBank National Association, LaSalle Bank National Association,
Silicon Valley Bank, and U.S. Bank National Association.

 

C.            The Borrower has advised the Administrative Agent and the Lenders
that a Default has occurred under subsection (e) of Article VIII of the
Agreement as a result of the Borrower’s failure to comply with the covenants set
forth in subsections Section 5.01(b) and (c) of the Agreement, in each case for
the fiscal quarter ended December 31, 2005 (the “Existing Default” and the
covenants described in this paragraph, herein the “Violated Covenants”). In
accordance with the Agreement, the Borrower has requested that the Lenders waive
the Existing Default.

 

NOW, THEREFORE, in consideration of the premises herein contained and other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows effective as of March 15,
2006:

 

ARTICLE I.

 

DEFINITIONS

 

SECTION 1.1.            DEFINITIONS. CAPITALIZED TERMS USED IN THIS AMENDMENT,
TO THE EXTENT NOT OTHERWISE DEFINED HEREIN, SHALL HAVE THE SAME MEANINGS AS IN
THE AGREEMENT, AS AMENDED HEREBY.

 

ARTICLE II.

 

AMENDMENTS TO CREDIT AGREEMENT

 

SECTION 2.1.            AMENDMENT TO SECTION 1.01. THE LAST PARAGRAPH IN THE
DEFINITION OF THE TERM “APPLICABLE RATE” CONTAINED IN SECTION 1.01 OF THE
AGREEMENT IS AMENDED AND RESTATED IN ITS ENTIRETY TO READ AS FOLLOWS:

 

FOR PURPOSES OF THE FOREGOING, (I) THE LEVERAGE RATIO SHALL BE DETERMINED AS OF
THE END OF (A) EACH OF THE FIRST THREE FISCAL QUARTERS OF THE BORROWER’S FISCAL
YEAR BASED UPON THE BORROWER’S CONSOLIDATED FINANCIAL STATEMENTS DELIVERED
PURSUANT TO SECTION 5.01(B) AND (B) THE LAST FISCAL QUARTER OF THE BORROWER’S
FISCAL YEAR BASED UPON THE BORROWER’S CONSOLIDATED FINANCIAL STATEMENTS
DELIVERED PURSUANT TO SECTION 5.01(A) AND (II) EACH CHANGE IN THE APPLICABLE
RATE RESULTING FROM A CHANGE IN THE LEVERAGE RATIO SHALL BE

 

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EFFECTIVE DURING THE PERIOD COMMENCING ON AND INCLUDING THE DATE OF DELIVERY TO
THE ADMINISTRATIVE AGENT OF SUCH CONSOLIDATED FINANCIAL STATEMENTS INDICATING
SUCH CHANGE AND ENDING ON THE DATE IMMEDIATELY PRECEDING THE EFFECTIVE DATE OF
THE NEXT SUCH CHANGE; PROVIDED THAT THE LEVERAGE RATIO SHALL BE DEEMED TO BE IN
CATEGORY 1 (A) AT ANY TIME THAT AN EVENT OF DEFAULT HAS OCCURRED AND IS
CONTINUING OR (B) AT THE OPTION OF THE ADMINISTRATIVE AGENT OR AT THE REQUEST OF
THE REQUIRED LENDERS IF THE BORROWER FAILS TO DELIVER THE CONSOLIDATED FINANCIAL
STATEMENTS REQUIRED TO BE DELIVERED BY IT PURSUANT TO SECTION 5.01(A) OR (B),
DURING THE PERIOD FROM THE EXPIRATION OF THE TIME FOR DELIVERY THEREOF UNTIL
SUCH CONSOLIDATED FINANCIAL STATEMENTS ARE DELIVERED.

 

SECTION 2.2.            AMENDMENT TO SECTION 5.01(A). SECTION 5.01(A) OF THE
AGREEMENT IS AMENDED AND RESTATED IN ITS ENTIRETY TO READ AS FOLLOWS:

 

(A)           ANNUAL FINANCIAL STATEMENTS. WITHIN 90 DAYS AFTER THE END OF EACH
FISCAL YEAR OF THE BORROWER, ITS AUDITED CONSOLIDATED BALANCE SHEET AND RELATED
STATEMENTS OF OPERATIONS, STOCKHOLDERS’ EQUITY AND CASH FLOWS AS OF THE END OF
AND FOR SUCH YEAR, SETTING FORTH IN EACH CASE IN COMPARATIVE FORM THE FIGURES
FOR THE PREVIOUS FISCAL YEAR, ALL REPORTED ON BY KPMG LLP OR OTHER INDEPENDENT
PUBLIC ACCOUNTANTS OF RECOGNIZED NATIONAL STANDING (WITHOUT A “GOING CONCERN” OR
LIKE QUALIFICATION OR EXCEPTION AND WITHOUT ANY QUALIFICATION OR EXCEPTION AS TO
THE SCOPE OF SUCH AUDIT) TO THE EFFECT THAT SUCH CONSOLIDATED FINANCIAL
STATEMENTS PRESENT FAIRLY IN ALL MATERIAL RESPECTS THE FINANCIAL CONDITION AND
RESULTS OF OPERATIONS OF THE BORROWER AND ITS CONSOLIDATED SUBSIDIARIES ON A
CONSOLIDATED BASIS IN ACCORDANCE WITH GAAP CONSISTENTLY APPLIED;

 

SECTION 2.3.            AMENDMENT TO SECTION 5.01(B). SECTION 5.01(B) OF THE
AGREEMENT IS AMENDED AND RESTATED IN ITS ENTIRETY TO READ AS FOLLOWS:

 

(B)           QUARTERLY FINANCIAL STATEMENTS. WITHIN 45 DAYS AFTER THE END OF
EACH OF THE FIRST THREE FISCAL QUARTERS OF EACH FISCAL YEAR OF THE BORROWER, ITS
CONSOLIDATED BALANCE SHEET AND RELATED STATEMENTS OF OPERATIONS, STOCKHOLDERS’
EQUITY AND CASH FLOWS AS OF THE END OF AND FOR EACH SUCH FISCAL QUARTER AND THE
THEN ELAPSED PORTION OF THE FISCAL YEAR, SETTING FORTH IN EACH CASE IN
COMPARATIVE FORM THE FIGURES FOR THE CORRESPONDING PERIOD OR PERIODS OF (OR, IN
THE CASE OF THE BALANCE SHEET, AS OF THE END OF) THE PREVIOUS FISCAL YEAR, ALL
CERTIFIED BY ONE OF ITS FINANCIAL OFFICERS AS PRESENTING FAIRLY IN ALL MATERIAL
RESPECTS THE FINANCIAL CONDITION AND RESULTS OF OPERATIONS OF THE BORROWER AND
ITS CONSOLIDATED SUBSIDIARIES ON A CONSOLIDATED BASIS IN ACCORDANCE WITH GAAP
CONSISTENTLY APPLIED, SUBJECT TO NORMAL YEAR-END AUDIT ADJUSTMENTS AND THE
ABSENCE OF FOOTNOTES;

 

ARTICLE III.

 

WAIVER

 

SECTION 3.1.            WAIVER. EACH OF THE UNDERSIGNED LENDERS WAIVES THE
EXISTING DEFAULT AND AGREES NOT TO EXERCISE ANY RIGHTS OR REMEDIES AVAILABLE AS
A RESULT OF THE OCCURRENCE THEREOF. TO INDUCE THE LENDERS TO AGREE TO THE TERMS
OF THIS SECTION 3.1, THE BORROWER AND THE SUBSIDIARY LOAN PARTIES (BY THEIR
EXECUTION BELOW) AGREE THAT THE WAIVER SPECIFICALLY DESCRIBED HEREIN SHALL NOT
CONSTITUTE AND SHALL NOT BE DEEMED A WAIVER OF ANY OTHER DEFAULT, WHETHER
ARISING AS A RESULT OF THE FURTHER VIOLATION THE VIOLATED COVENANTS OR
OTHERWISE, OR A WAIVER OF ANY RIGHTS OR REMEDIES ARISING AS A RESULT OF SUCH
OTHER DEFAULTS. THE FAILURE TO COMPLY WITH THE VIOLATED COVENANTS FOR ANY DATE
OTHER THAN AS DESCRIBED ABOVE IN THE DEFINITION OF EXISTING DEFAULT SHALL
CONSTITUTE A DEFAULT. EACH OF THE UNDERSIGNED LENDERS AGREES THAT THE BORROWER
SHALL NOT BE REQUIRED TO DELIVER (A) ITS CONSOLIDATED BALANCE SHEET AND RELATED
STATEMENTS OF

 

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OPERATIONS, STOCKHOLDERS’ EQUITY AND CASH FLOWS FOR THE FISCAL QUARTER ENDED
DECEMBER 31, 2005 AS REQUIRED BY SECTION 5.01(B) OF THE AGREEMENT OR (B) A
COMPLIANCE CERTIFICATE FOR THE FISCAL QUARTER ENDED DECEMBER 31, 2005 AS
REQUIRED BY SECTION 5.01(C) OF THE AGREEMENT.

 

ARTICLE IV.

 

MISCELLANEOUS

 

SECTION 4.1.            RATIFICATIONS. THE TERMS AND PROVISIONS SET FORTH IN
THIS AMENDMENT SHALL MODIFY AND SUPERSEDE ALL INCONSISTENT TERMS AND PROVISIONS
SET FORTH IN THE AGREEMENT AND EXCEPT AS EXPRESSLY MODIFIED AND SUPERSEDED BY
THIS AMENDMENT, THE TERMS AND PROVISIONS OF THE AGREEMENT AND THE OTHER LOAN
DOCUMENTS ARE RATIFIED AND CONFIRMED AND SHALL CONTINUE IN FULL FORCE AND
EFFECT. THE BORROWER, THE ADMINISTRATIVE AGENT AND THE LENDERS AGREE THAT THE
AGREEMENT, AS AMENDED HEREBY, AND THE OTHER LOAN DOCUMENTS SHALL CONTINUE TO BE
LEGAL, VALID, BINDING AND ENFORCEABLE IN ACCORDANCE WITH THEIR TERMS.

 

SECTION 4.2.            REPRESENTATIONS AND WARRANTIES. THE BORROWER AND EACH
SUBSIDIARY LOAN PARTY HEREBY REPRESENTS AND WARRANTS TO THE ADMINISTRATIVE AGENT
AND THE LENDERS AS FOLLOWS AS OF THE DATE HEREOF AND AFTER GIVING EFFECT TO THIS
AMENDMENT: (A) NO DEFAULT EXISTS AND (B) THE REPRESENTATIONS AND WARRANTIES SET
FORTH IN THE LOAN DOCUMENTS ARE TRUE AND CORRECT IN ALL MATERIAL RESPECTS ON AND
AS OF THE DATE HEREOF WITH THE SAME EFFECT AS THOUGH MADE ON AND AS OF SUCH DATE
EXCEPT TO THE EXTENT SUCH REPRESENTATIONS AND WARRANTIES EXPRESSLY RELATE TO AN
EARLIER DATE, IN WHICH CASE SUCH REPRESENTATIONS AND WARRANTIES SHALL HAVE BEEN
TRUE AND CORRECT IN ALL MATERIAL RESPECTS ON AND AS OF SUCH DATE.

 

SECTION 4.3.            SURVIVAL OF REPRESENTATIONS AND WARRANTIES. ALL
REPRESENTATIONS AND WARRANTIES MADE IN THIS AMENDMENT SHALL SURVIVE THE
EXECUTION AND DELIVERY OF THIS AMENDMENT, AND NO INVESTIGATION BY ADMINISTRATIVE
AGENT OR ANY LENDER OR ANY CLOSING SHALL AFFECT THE REPRESENTATIONS AND
WARRANTIES OR THE RIGHT OF THE ADMINISTRATIVE AGENT OR ANY LENDER TO RELY UPON
THEM.

 

SECTION 4.4.            REFERENCE TO AGREEMENT. EACH OF THE LOAN DOCUMENTS,
INCLUDING THE AGREEMENT AND ANY AND ALL OTHER AGREEMENTS, DOCUMENTS, OR
INSTRUMENTS NOW OR HEREAFTER EXECUTED AND DELIVERED PURSUANT TO THE TERMS HEREOF
OR PURSUANT TO THE TERMS OF THE AGREEMENT AS AMENDED HEREBY, ARE HEREBY AMENDED
SO THAT ANY REFERENCE IN SUCH LOAN DOCUMENTS TO THE AGREEMENT SHALL MEAN A
REFERENCE TO THE AGREEMENT AS AMENDED HEREBY.

 

SECTION 4.5.            EXPENSES OF LENDER. BORROWER AGREES TO PAY ALL COSTS AND
EXPENSES INCURRED BY THE ADMINISTRATIVE AGENT IN CONNECTION WITH THE
PREPARATION, NEGOTIATION, AND EXECUTION OF THIS AMENDMENT, INCLUDING WITHOUT
LIMITATION, THE COSTS AND FEES OF THE ADMINISTRATIVE AGENT’S LEGAL COUNSEL, AS
AND TO THE EXTENT REQUIRED BY SECTION 10.03(A) OF THE AGREEMENT. ALL AMOUNTS DUE
UNDER THIS SECTION SHALL BE PAYABLE NOT LATER THAN THREE BUSINESS DAYS AFTER
WRITTEN DEMAND THEREFOR, TOGETHER WITH REASONABLY DETAILED SUPPORTING
DOCUMENTATION.

 

SECTION 4.6.            SEVERABILITY. ANY PROVISION OF THIS AMENDMENT HELD BY A
COURT OF COMPETENT JURISDICTION TO BE INVALID OR UNENFORCEABLE SHALL NOT IMPAIR
OR INVALIDATE THE REMAINDER OF THIS AMENDMENT AND THE EFFECT THEREOF SHALL BE
CONFINED TO THE PROVISION SO HELD TO BE INVALID OR UNENFORCEABLE.

 

SECTION 4.7.            APPLICABLE LAW. THIS AMENDMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE APPLICABLE LAW PERTAINING IN THE STATE OF NEW
YORK, OTHER THAN THOSE CONFLICT OF LAW PROVISIONS THAT WOULD DEFER TO THE
SUBSTANTIVE LAWS OF ANOTHER JURISDICTION. THIS GOVERNING LAW ELECTION

 

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HAS BEEN MADE BY THE PARTIES IN RELIANCE (AT LEAST IN PART) ON SECTION 5–1401 OF
THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK, AS AMENDED (AS AND TO THE
EXTENT APPLICABLE), AND OTHER APPLICABLE LAW.

 

SECTION 4.8.            SUCCESSORS AND ASSIGNS. THIS AMENDMENT IS BINDING UPON
AND SHALL INURE TO THE BENEFIT OF THE ADMINISTRATIVE AGENT, EACH LENDER, THE
BORROWER, EACH SUBSIDIARY LOAN PARTY AND THEIR RESPECTIVE SUCCESSORS AND
ASSIGNS, EXCEPT THAT NEITHER BORROWER NOR ANY SUBSIDIARY LOAN PARTY MAY ASSIGN
OR TRANSFER ANY OF ITS RIGHTS OR OBLIGATIONS HEREUNDER WITHOUT THE PRIOR WRITTEN
CONSENT OF EACH LENDER.

 

SECTION 4.9.            COUNTERPARTS. THIS AMENDMENT MAY BE EXECUTED IN
COUNTERPARTS (AND BY DIFFERENT PARTIES HERETO ON DIFFERENT COUNTERPARTS), EACH
OF WHICH SHALL CONSTITUTE AN ORIGINAL, BUT ALL OF WHICH WHEN TAKEN TOGETHER
SHALL CONSTITUTE A SINGLE CONTRACT.

 

SECTION 4.10.          EFFECT OF WAIVER. NO CONSENT OR WAIVER, EXPRESS OR
IMPLIED, BY THE ADMINISTRATIVE AGENT OR ANY LENDER TO OR FOR ANY BREACH OF OR
DEVIATION FROM ANY COVENANT, CONDITION OR DUTY BY THE BORROWER OR ANY SUBSIDIARY
LOAN PARTY SHALL BE DEEMED A CONSENT OR WAIVER TO OR OF ANY OTHER BREACH OF THE
SAME OR ANY OTHER COVENANT, CONDITION OR DUTY.

 

SECTION 4.11.          HEADINGS. THE HEADINGS, CAPTIONS, AND ARRANGEMENTS USED
IN THIS AMENDMENT ARE FOR CONVENIENCE ONLY AND SHALL NOT AFFECT THE
INTERPRETATION OF THIS AMENDMENT.

 

SECTION 4.12.          ENTIRE AGREEMENT. THIS AMENDMENT AND THE OTHER LOAN
DOCUMENTS EMBODY THE FINAL, ENTIRE AGREEMENT AMONG THE PARTIES HERETO AND
SUPERSEDE ANY AND ALL PRIOR COMMITMENTS, AGREEMENTS, REPRESENTATIONS AND
UNDERSTANDINGS, WHETHER WRITTEN OR ORAL, RELATING TO THIS AMENDMENT, AND MAY NOT
BE CONTRADICTED OR VARIED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT
ORAL AGREEMENTS OR DISCUSSIONS OF THE PARTIES HERETO.

 

SECTION 4.13.          REQUIRED LENDERS. THE AGREEMENT IS MODIFIED AS PROVIDED
IN THIS AMENDMENT WITH THE AGREEMENT OF THE BORROWER AND THE REQUIRED LENDERS
WHICH MEANS LENDERS HAVING MORE THAN FIFTY PERCENT (50%) OF THE SUM OF THE TOTAL
REVOLVING EXPOSURES, TERM LOANS AND UNUSED COMMITMENTS (SUCH PERCENTAGE
APPLICABLE TO A LENDER, HEREIN SUCH LENDER’S “REQUIRED LENDER PERCENTAGE”). FOR
PURPOSES OF DETERMINING THE EFFECTIVENESS OF THIS AMENDMENT, EACH LENDER’S
REQUIRED LENDER PERCENTAGE IS SET FORTH ON SCHEDULE 4.13 HERETO.

 

Executed as of the date first written above.

 

 

SPECTRALINK CORPORATION, as Borrower

 

 

 

 

 

By:

 

 

 

David I. Rosenthal, Executive Vice President

 

 

and Chief Financial Officer

 

 

 

 

 

 

 

JPMORGAN CHASE BANK, N.A., as the Administrative Agent and as a Lender

 

 

 

 

 

By:

 

 

 

Sean J. Lynch, Vice President

 

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COMERICA WEST INCORPORATED

 

 

 

 

 

By:

 

 

 

Name:

 

 

 

Title:

 

 

 

 

 

 

GUARANTY BANK

 

 

 

 

 

By:

 

 

 

Name:

 

 

 

Title:

 

 

 

 

 

 

KEYBANK NATIONAL ASSOCIATION

 

 

 

 

 

By:

 

 

 

Name:

 

 

 

Title:

 

 

 

 

 

 

 

 

LASALLE BANK NATIONAL ASSOCIATION

 

 

 

 

 

By:

 

 

 

Name:

 

 

 

Title:

 

 

 

 

 

 

 

 

 

 

SILICON VALLEY BANK

 

 

 

 

 

By:

 

 

 

Name:

 

 

 

Title:

 

 

 

 

 

 

 

 

U.S. BANK NATIONAL ASSOCIATION

 

 

 

 

 

By:

 

 

 

Name:

 

 

 

Title:

 

 

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Subsidiary Loan Party Consent

 

The undersigned Subsidiary Loan Party:  (i) hereby consents and agrees to this
Amendment and (ii) agrees that the Loan Documents to which it is a party shall
remain in full force and effect and shall continue to be the legal, valid and
binding obligation of such Subsidiary Loan Party enforceable against it in
accordance with their respective terms.

 

 

SUBSIDIARY LOAN PARTIES:

 

 

 

SPECTRALINK INTERNATIONAL CORPORATION

 

 

 

By:

 

 

 

David I. Rosenthal, Treasurer

 

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SCHEDULE 4.13

to

WAIVER AND SECOND AMENDMENT TO CREDIT AGREEMENT

 

Required Lenders

 

Lender

 

Required Lender
Percentage Held

 

Lenders Agreeing to Second
Amendment (insert % from prior
column if Lender signs Amendment
then total % in this column)

 

JPMorgan Chase Bank, N.A.

 

25.00

%

25.00

%

Comerica West Incorporated

 

12.50

%

12.50

%

Guaranty Bank

 

12.50

%

12.50

%

KeyBank National Association

 

12.50

%

12.50

%

LaSalle Bank National Association

 

12.50

%

12.50

%

Silicon Valley Bank

 

12.50

%

12.50

%

U.S. Bank National Association

 

12.50

%

12.50

%

TOTAL

 

100.00

%

100.00

%

 

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