**Exhibit 10.7**

 

WAIVER AND SECOND AMENDMENT TO CREDIT AGREEMENT

 

THIS WAIVER AND SECONDAMENDMENT 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 administrativeagent (the “Administrative Agent”).

 

RECITALS:

 

A.            TheBorrower, the Administrative Agent, and the lenders party thereto have enteredinto that certain Credit Agreement dated as of December 9, 2005 (as amendedby that certain First Amendment to Credit Agreement dated December 21,2005 among the Borrower, the Administrative Agent and the Lenders partythereto, the “Agreement”).

 

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

 

C.            TheBorrower has advised the Administrative Agent and the Lenders that a Default hasoccurred under subsection (e) of Article VIII ofthe Agreement as a result of the Borrower’s failure to comply with thecovenants set forth in subsections Section 5.01(b) and (c) ofthe 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, theBorrower has requested that the Lenders waive the Existing Default.

 

NOW, THEREFORE, inconsideration of the premises herein contained and other good and valuableconsideration, 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 theextent not otherwise defined herein, shall have the same meanings as in theAgreement, as amended hereby.

##  

# ARTICLE II.

#  

# Amendments to CreditAgreement

 

## Section 2.1.            Amendment to Section 1.01. The last paragraph in thedefinition of the term “Applicable Rate” contained in Section 1.01of the Agreement is amended and restated in its entirety to read as follows:

##  

## For purposes of the foregoing, (i) theLeverage Ratio shall be determined as of the end of (A) each of the firstthree fiscal quarters of the Borrower’s fiscal year based upon the Borrower’sconsolidated financial statements delivered pursuant to Section 5.01(b) and(B) the last fiscal quarter of the Borrower’s fiscal year based upon theBorrower’s consolidated financial statements delivered pursuant to Section 5.01(a) and(ii) each change in the Applicable Rate resulting from a change in theLeverage Ratio shall be 

 

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## effective during the periodcommencing on and including the date of delivery to the Administrative Agent ofsuch consolidated financial statements indicating such change and ending on thedate immediately preceding the effective date of the next such change; providedthat the Leverage Ratio shall be deemed to be in Category 1 (A) atany time that an Event of Default has occurred and is continuing or (B) atthe option of the Administrative Agent or at the request of the RequiredLenders if the Borrower fails to deliver the consolidated financial statementsrequired 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 untilsuch consolidated financial statements are delivered.

##  

## Section 2.2.            Amendment to Section 5.01(a). Section 5.01(a) ofthe Agreement is amended and restated in its entirety to read as follows:

##  

## (a)           Annual Financial Statements. within 90 days after the end ofeach fiscal year of the Borrower, its audited consolidated balance sheet andrelated statements of operations, stockholders’ equity and cash flows as of theend of and for such year, setting forth in each case in comparative form thefigures for the previous fiscal year, all reported on by KPMG LLP or otherindependent public accountants of recognized national standing (without a “goingconcern” or like qualification or exception and without any qualification orexception as to the scope of such audit) to the effect that such consolidatedfinancial statements present fairly in all material respects the financialcondition and results of operations of the Borrower and its consolidatedSubsidiaries on a consolidated basis in accordance with GAAP consistentlyapplied;

##  

## Section 2.3.            Amendment to Section 5.01(b). Section 5.01(b) ofthe Agreement is amended and restated in its entirety to read as follows:

##  

## (b)           Quarterly Financial Statements. within 45 days after the endof 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 fiscalquarter and the then elapsed portion of the fiscal year, setting forth in eachcase in comparative form the figures for the corresponding period orperiods of (or, in the case of the balance sheet, as of the end of) theprevious fiscal year, all certified by one of its Financial Officers aspresenting fairly in all material respects the financial condition and resultsof operations of the Borrower and its consolidated Subsidiaries on aconsolidated basis in accordance with GAAP consistently applied, subject tonormal year-end audit adjustments and the absence of footnotes;

##  

# ARTICLE III.

#  

# Waiver

 

## Section 3.1.            Waiver. Each of the undersigned Lenders waives the ExistingDefault and agrees not to exercise any rights or remedies available as a resultof 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) agreethat the waiver specifically described herein shall not constitute and shallnot be deemed a waiver of any other Default, whether arising as a result of thefurther violation the Violated Covenants or otherwise, or a waiver of anyrights or remedies arising as a result of such other Defaults. The failure tocomply with the Violated Covenants for any date other than as described abovein the definition of Existing Default shall constitute a Default. Each of theundersigned Lenders agrees that the Borrower shall not be required to deliver (a) itsconsolidated 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) aCompliance Certificate for the fiscal quarter ended December 31, 2005 asrequired by Section 5.01(c) of the Agreement.

##  

# ARTICLE IV.

#  

# Miscellaneous

 

## Section 4.1.            Ratifications. The terms and provisions set forth in this Amendmentshall modify and supersede all inconsistent terms and provisions set forth inthe Agreement and except as expressly modified and superseded by this Amendment,the terms and provisions of the Agreement and the other Loan Documents areratified and confirmed and shall continue in full force and effect. TheBorrower, the Administrative Agent and the Lenders agree that the Agreement, asamended 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 SubsidiaryLoan Party hereby represents and warrants to the Administrative Agent and theLenders as follows as of the date hereof and after giving effect to thisAmendment: (a) no Default exists and (b) the representations andwarranties set forth in the Loan Documents are true and correct in all materialrespects on and as of the date hereof with the same effect as though made onand as of such date except to the extent such representations and warranties expresslyrelate to an earlier date, in which case such representations and warrantiesshall have been true and correct in all material respects on and as of suchdate.

##  

## Section 4.3.            Survival of Representations and Warranties. All representations and warrantiesmade in this Amendment shall survive the execution and delivery of thisAmendment, and no investigation by Administrative Agent or any Lender or anyclosing shall affect the representations and warranties or the right of the AdministrativeAgent 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, orinstruments now or hereafter executed and delivered pursuant to the termshereof or pursuant to the terms of the Agreement as amended hereby, are herebyamended so that any reference in such Loan Documents to the Agreement shallmean a reference to the Agreement as amended hereby.

##  

## Section 4.5.            Expenses of Lender. Borrower agrees to pay all costs and expensesincurred by the Administrative Agent in connection with the preparation,negotiation, and execution of this Amendment, including without limitation, thecosts and fees of the Administrative Agent’s legal counsel, as and to theextent required by Section 10.03(a) of the Agreement. Allamounts due under this Section shall be payable not later than threeBusiness Days after written demand therefor, together with reasonably detailedsupporting documentation.

##  

## Section 4.6.            Severability. Any provision of this Amendment held by a court ofcompetent jurisdiction to be invalid or unenforceable shall not impair orinvalidate the remainder of this Amendment and the effect thereof shall beconfined to the provision so held to be invalid or unenforceable.

##  

## Section 4.7.            Applicable Law. This Amendment shall be governed by and construed inaccordance with the applicable law pertaining in the State of New York, otherthan those conflict of law provisions that would defer to the substantive lawsof another jurisdiction. This governing law election 

 

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## has beenmade by the parties in reliance (at least in part) on Section 5–1401 ofthe General Obligations Law of the State of New York, as amended (as and to theextent applicable), and other applicable law.

##  

## Section 4.8.            Successors and Assigns. This Amendment is binding upon andshall inure to the benefit of the Administrative Agent, each Lender, theBorrower, each Subsidiary Loan Party and their respective successors andassigns, except that neither Borrower nor any Subsidiary Loan Party may assignor transfer any of its rights or obligations hereunder without the priorwritten 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 whichshall constitute an original, but all of which when taken together shallconstitute a single contract.

##  

## Section 4.10.          Effect of Waiver. No consent or waiver, express or implied, by the AdministrativeAgent 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 deemeda consent or waiver to or of any other breach of the same or any othercovenant, condition or duty.

##  

## Section 4.11.          Headings. The headings, captions, and arrangements used inthis Amendment are for convenience only and shall not affect the interpretationof this Amendment.

##  

## Section 4.12.          ENTIRE AGREEMENT. THIS AMENDMENT AND THE OTHER LOAN DOCUMENTS EMBODYTHE FINAL, ENTIRE AGREEMENT AMONG THE PARTIES HERETO AND SUPERSEDE ANY AND ALLPRIOR COMMITMENTS, AGREEMENTS, REPRESENTATIONS AND UNDERSTANDINGS, WHETHERWRITTEN OR ORAL, RELATING TO THIS AMENDMENT, AND MAY NOT BE CONTRADICTEDOR VARIED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTSOR DISCUSSIONS OF THE PARTIES HERETO.

##  

## Section 4.13.          Required Lenders. The Agreement is modified as provided in thisAmendment with the agreement of the Borrower and the Required Lenders whichmeans Lenders having more than fifty percent (50%) of the sum of the totalRevolving Exposures, Term Loans and unused Commitments (such percentageapplicable to a Lender, herein such Lender’s “Required Lender Percentage”).For purposes of determining the effectiveness of this Amendment, each Lender’sRequired Lender Percentage is set forth on Schedule 4.13 hereto.

##  

Executed as of the datefirst 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 SubsidiaryLoan Party:  (i) hereby consents andagrees to this Amendment and (ii) agrees that the Loan Documents to whichit is a party shall remain in full force and effect and shall continue to bethe legal, valid and binding obligation of such Subsidiary Loan Partyenforceable 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 SECONDAMENDMENT 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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