Document:

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 

 

1

 

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 

 

2

 

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 

 

3

 

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

  

 

4

 

	
   

  	
  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:

  	
   

  

 

5

 

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

  

 

6

 

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

  	
  %Exhibit 10.1

 

FORM OF RESTRICTED STOCK AWARD AGREEMENT

 

UNDER THE MAC-GRAY CORPORATION

LONG TERM INCENTIVE PLAN

 

Name of
Grantee:                                          

No. of
Shares:                       
(the “Restricted Shares”)

Purchase
Price per Share:

Grant
Date:                                
(the “Grant Date”)

Final
Acceptance
Date:                          

 

Pursuant to the Mac-Gray Corporation Long Term
Incentive Plan, as amended through the date hereof (the “Plan”), Mac-Gray
Corporation (the “Company”) hereby grants a Restricted Stock Award (an “Award”)
to the Grantee named above. Upon acceptance of this Award, the Grantee shall
have the right to receive the number of shares of Common Stock, par value $0.01
per share (the “Stock”) of the Company specified above upon the satisfaction
of, and subject to, the vesting provisions, restrictions and other conditions
set forth herein and in the Plan. Capitalized terms used herein but not defined
shall have the meanings given to such terms in the Plan.

 

1.             Acceptance of Award. The Grantee shall have no rights with respect to
this Award unless he or she shall have accepted this Award prior to the close
of business on the Final Acceptance Date specified above by (i) making
payment to the Company by certified or bank check or other instrument
acceptable to the Committee (as defined below) of the Purchase Price per Share,
if any, times the number of Restricted Shares covered by this Award, and
(ii) signing and delivering to the Company a copy of this Award Agreement.
For purposes of this Agreement, “Committee” shall mean those members of the
Compensation Committee of the Board of Directors of the Company who are
“non-employee directors” as such term is defined under Rule 16b-3 promulgated
under the Securities and Exchange Act of 1934, as amended.

 

2.             Restrictions and Conditions.

 

(a)           Any book
entries for the Restricted Shares covered by this Award shall bear an
appropriate legend, as determined by the Committee in its sole discretion, to
the effect that such shares are subject to the restrictions as set forth herein
and in the Plan.

 

(b)           The right
to received shares of Stock hereunder, and the Restricted Shares covered by
this Award, may not be sold, assigned, transferred, pledged or otherwise
encumbered or disposed of by the Grantee prior to satisfaction of the vesting
provisions pursuant to Paragraph 3 below.

 

(c)           If the
Grantee’s employment with the Company and its Subsidiaries is voluntarily or
involuntarily terminated for any reason prior to the satisfaction of the
vesting conditions set forth in Paragraph 3 below, any Restricted Shares that
have not vested as of such date shall automatically and without notice
terminate, be forfeited and be and become null and void, and neither the
Grantee nor any of his successors, heirs, assigns, or personal representatives
will thereafter have any further rights or interests in such unvested
Restricted Shares.

 

 

3.             Vesting of Restricted Shares. The restrictions and conditions in Paragraph 2
of this Agreement shall lapse on up to one third (1/3) of the Restricted Shares
following each of the Company’s fiscal years ended December 31,
[         ], [         ]and
[         ] (each, a “Fiscal Year”)
on the date (the “Vesting Date”) on which the Committee makes a determination
that the Company has achieved the Performance Measure target amount established
by the Committee for such Fiscal Year, provided that the Grantee is an employee
of the Company or a Subsidiary on such Vesting Date. The actual number of
Restricted Shares that will vest on a particular Vesting Date will depend on
the percentage of the Performance Measure target the Company achieved for the
previous Fiscal Year based on the following percentage thresholds:

 

	
  If this % of the Performance Measure target amount

  is achieved:

  	
   

  	
  Grantee will earn this % of one third (1/3) of the

  Restricted Shares on the Vesting Date:

  	
   

  
	
  Less than 90 %

  	
   

  	
  0

  	
  %

  	
   

  
	
  90

  	
  %

  	
   

  	
  50

  	
  %

  	
   

  
	
  91

  	
  %

  	
   

  	
  55

  	
  %

  	
   

  
	
  92

  	
  %

  	
   

  	
  60

  	
  %

  	
   

  
	
  93

  	
  %

  	
   

  	
  65

  	
  %

  	
   

  
	
  94

  	
  %

  	
   

  	
  70

  	
  %

  	
   

  
	
  95

  	
  %

  	
   

  	
  75

  	
  %

  	
   

  
	
  96

  	
  %

  	
   

  	
  80

  	
  %

  	
   

  
	
  97

  	
  %

  	
   

  	
  85

  	
  %

  	
   

  
	
  98

  	
  %

  	
   

  	
  90

  	
  %

  	
   

  
	
  99

  	
  %

  	
   

  	
  95

  	
  %

  	
   

  
	
  100

  	
  %

  	
   

  	
  100

  	
  %

  	
   

  

 

For purposes of this Paragraph 3, the “Performance
Measure” shall mean, for any Fiscal Year, (a) the Company’s earnings before
interest, taxes, depreciation and amortization (EBITDA) for such Fiscal Year,
less (b) the Company’s interest expenses and capital expenditures for such
Fiscal Year, as determined by reference to the Company’s audited financial
statements for such Fiscal Year. The Committee shall review the Company’s
audited financial statements promptly after their preparation each year to
determine the percentage of the Performance Measure target amount that was
achieved for purposes of this Paragraph 3.

 

If any of the Restricted Shares vest on a Vesting Date,
the Company will thereupon issue an equal number of shares of unrestricted
Stock to the Grantee and the Grantee shall thereafter have all the rights of a
stockholder of the Company with respect to such shares, including voting

 

2

 

and
dividend rights, and such shares of Stock shall not be restricted by the
provisions hereof. If in any year the Restricted Shares do not vest because the
conditions of this Paragraph 3 are not satisfied, then such unvested Restricted
Shares shall automatically and without notice terminate, be forfeited and be
and become null and void, and neither the Grantee nor any of his successors,
heirs, assigns, or personal representatives will thereafter have any further
rights or interests in such forfeited Restricted Shares.

 

4.             Incorporation of Plan. Notwithstanding anything herein to the contrary,
this Agreement shall be subject to and governed by all the terms and conditions
of the Plan, including the powers of the Committee set forth in Section 3 of
the Plan.

 

5.             Transferability. This Agreement is personal to the Grantee, is non-assignable and is not
transferable in any manner, by operation of law or otherwise, other than by
will or the laws of descent and distribution.

 

6.             Tax Withholding. The Grantee shall, not later than the date as of which the receipt of
this Award becomes a taxable event for Federal income tax purposes, pay to the
Company or make arrangements satisfactory to the Committee for payment of any
Federal, state, and local taxes required by law to be withheld on account of
such taxable event. The Grantee may elect to have such minimum tax withholding
obligation satisfied, in whole or in part, by (i) authorizing the Company to
withhold from shares of Stock to be issued, or (ii) transferring to the
Company, a number of shares of Stock with an aggregate fair market value that
would satisfy the withholding amount due.

 

7.             No Obligation to Continue Employment. Neither the Company nor any Subsidiary is
obligated by or as a result of the Plan or this Agreement to continue the
Grantee in employment and neither the Plan nor this Agreement shall interfere
in any way with the right of the Company or any Subsidiary to terminate the
employment of the Grantee at any time.

 

8.             Notices. Notices hereunder shall be mailed or delivered to the Company at its
principal place of business and shall be mailed or delivered to the Grantee at
the address on file with the Company or, in either case, at such other address
as one party may subsequently furnish to the other party in writing.

 

(Signature Page Follows)

 

3

 

	
   

  	
  MAC-GRAY
  CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

The
foregoing Agreement is hereby accepted and the terms and conditions thereof
hereby agreed to by the undersigned.

 

 

	
  Dated:

  	
   

  	
   

  	
   

  
	
   

  	
  Grantee’s
  Signature

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Grantee’s
  name and address:

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