-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, OQSs0meM1VwoPxJ8GcTdOFfFHg01154nNBSu6HIGUXfS4gyGFDcutkz7S1P8NFxi c9eYoK+WNfHQHDp4VRankg== /in/edgar/work/0000230131-00-000006/0000230131-00-000006.txt : 20001009 0000230131-00-000006.hdr.sgml : 20001009 ACCESSION NUMBER: 0000230131-00-000006 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20000915 ITEM INFORMATION: FILED AS OF DATE: 20001006 FILER: COMPANY DATA: COMPANY CONFORMED NAME: COMDIAL CORP CENTRAL INDEX KEY: 0000230131 STANDARD INDUSTRIAL CLASSIFICATION: [3661 ] IRS NUMBER: 942443673 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 000-09023 FILM NUMBER: 735671 BUSINESS ADDRESS: STREET 1: 1180 SEMINOLE TRAIL STREET 2: P O BOX 7266 CITY: CHARLOTTESVILLE STATE: VA ZIP: 22906-2200 BUSINESS PHONE: 8049782200 MAIL ADDRESS: STREET 1: 1180 SEMMINOLE TRAIL STREET 2: P O BOX 7266 CITY: CHARLOTTESVILLE STATE: VA ZIP: 22906 8-K 1 0001.txt Securities and Exchange Commission Washington, D.C. 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported): October 5, 2000 COMDIAL CORPORATION (Exact name of registrant as specified in its charter) Delaware 0-9023 94-2443673 (State or other jurisdiction (Commission (IRS Employer of incorporation) File Number) Identification No.) P.O. Box 7266 1180 Seminole Trail Charlottesville, Virginia 22906-7266 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (804) 978-2200 Page 1 INDEX Page Item 5. OTHER EVENTS 3 Item 7. FINANCIAL STATEMENTS AND EXHIBITS 4 Page 2 Item 5. OTHER EVENTS On July 2, 2000, Comdial Corporation (the "Company") was not in compliance with the covenant in its Credit Agreement with Bank of America, N.A. ("BOA") dated October 22, 1998 relating to the ratio of funded debt to earnings before interest, taxes, depreciation and amortization ("EBITDA"). The Company obtained a waiver from BOA with respect to that covenant that was to expire August 30, 2000. In return, the Company agreed, in principle, to restructure the Credit Agreement, as described in the quarterly report on Form 10-Q for the second quarter of 2000, filed by the Company on August 25, 2000. The Company and BOA did not have time to complete the revised Credit Agreement terms before August 30, 2000. Accordingly, on August 28, 2000, BOA extended its waiver on the same terms to September 15, 2000; and on September 15, 2000, BOA further extended its waiver on the same terms to October 2, 2000. As of the end of its third fiscal quarter on September 30, 2000, the Company was not in compliance with the funded debt to EBITDA ratio covenant in the Credit Agreement and was not in compliance with another covenant with respect to its EBITDA to interest expense ratio. On October 4, 2000, the Company and BOA finalized a letter whereby BOA agreed to waive these defaults under the Credit Agreement, subject to the Company's agreement to certain terms and conditions set forth in such letter (the "Conditional Waiver"). The terms and conditions include, among other things, the Company's agreement to three modifications to the Credit Agreement. First, the revolving credit commitment was amended to be forty million dollars, subject to reduction in accordance with other provisions of the Credit Agreement. Second, the interest rate on the Note was amended to be the LIBOR Daily Floating Rate plus three percent per year. BOA reserved the right to increase this rate to the default rate provided in the Credit Agreement if the Conditional Waiver is terminated for any reason. Finally, the revolving credit termination date was amended to be the earlier to occur of March 31, 2002 and the date on which the revolving credit commitment is terminated pursuant to certain provisions of the Credit Agreement. The Company also agreed in the Conditional Waiver that, on or before November 3, 2000, it would execute an amended and restated credit agreement that would contain terms and conditions substantially in accordance with the Company's agreement in principle to restructure the Credit Agreement, which was previously reported as described above. A copy of the Conditional Waiver is filed as Exhibit 10.1 to this Report and is incorporated herein by reference. The foregoing is not a complete des- cription of the terms of the Conditional Waiver and is subject to and qualified in its entirety by reference to the Conditional Waiver. On October 3, 2000, the Company announced the appointment of Nick Branica to the position of President and Chief Executive Officer. In addition to his duties as President and Chief Executive Officer, Mr. Branica will serve on the Company's Board of Directors. A copy of the press release announcing Mr. Branica's appointment is filed as Exhibit 10.2 to this Report. Page 3 Item 7. FINANCIAL STATEMENTS AND EXHIBITS Exhibit Description ------- ----------- 10.1 Conditional Waiver Agreement, by and among Bank of America, N.A., Comdial Corporation, and certain Guarantors of Comdial Corporation's obligations under its Credit Agreement with Bank of America, N.A., dated October 22, 1998. 10.2 Press release, dated October 3, 2000, regarding the appointment of Nicholas A. Branica as President and Chief Executive Officer of Comdial Corporation. SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. COMDIAL CORPORATION By: Paul K. Suijk ------------- Name: Paul K. Suijk Title: Senior Vice President and Chief Financial Officer Dated: October 5, 2000 EX-10.1 2 0002.txt EXHIBIT 10.1 October 2, 2000 BY FACSIMILE - (804) 978-2512 Mr. Paul K. Suijk Senior Vice President/CFO Comdial Corporation 1180 Seminole Trail Charlottesville, Virginia 22901-2829 Re: Conditional Waiver ------------------ Dear Paul: As you know, Bank of America, N.A. (the "Bank") and Comdial Corporation ("Comdial") are parties to the Credit Agreement dated October 22, 1998 between Comdial and the Bank (the "Credit Agreement"). As you also know, the Bank has issued three letters to Comdial concerning a default under the Credit Agreement, namely a letter dated July 26, 2000, a letter dated August 28, 2000, and a letter dated September 15, 2000 (such letters, collectively, the "Letters"). Each of the Letters stated that Comdial is in default under the Credit Agreement because Comdial's Funded Debt to EBITDA Ratio (as defined in Section 8.2 of the Credit Agreement) exceeded 3.0 to 1 as of June 30, 2000. In addition, Comdial anticipates that its financial statements for its third fiscal quarter will show that it is in default under Section 8.3 of the Credit Agreement because its EBITDA to Interest Expense Ratio (as defined in Section 8.3 of the Credit Agreement) for such fiscal quarter will be less than 3.0 to 1 (such defaults under Sections 8.2 and 8.3 of the Credit Agreement hereinafter referred to as the "Financial Covenant Defaults"). The Bank hereby waives each of the Financial Covenant Defaults on the express condition that Comdial and each of the Guarantors (as defined in the Credit Agreement) agree to each of the following seven (7) terms and conditions (this waiver shall be hereinafter referred to as the "Conditional Waiver"). First, that the following three modifications are hereby made to the Credit Agreement and the Note (as defined in the Credit Agreement): (1) the definition of the term "Revolving Credit Commitment" as used in the Credit Agreement is hereby deleted in its entirety and the following definition is inserted in its place and stead: ""Revolving Credit Commitment" means Forty Million Dollars ($40,000,000), as such commitment may be reduced from time to time pursuant to Section 2.2."; (2) the Note (as defined in the Credit Agreement) shall, commencing on October 2, 2000 and continuing until the Note is paid in full, bear interest at a rate equal to the LIBOR Daily Floating Rate (as defined in the Credit Agreement) plus three percent (3%) per annum, with such rate to be reset on each day on which there is a change in the LIBOR Daily Floating Rate; provided, however, that the Bank reserves the right, upon the termination of the Conditional Waiver for any reason, to increase the interest rate charged on the Note to the Default Rate (as defined in the Credit Agreement); and (3) the definition of the term "Revolving Credit Termination Date" as used in the Page 1 Credit Agreement is hereby deleted in its entirety and the following definition is inserted in its place and stead: ""Revolving Credit Termination Date" means the earlier to occur of (i) March 31, 2002, and (ii) the date on which the Revolving Credit Commitment is terminated pursuant to Section 2.2 or Section 10." Second, that Comdial and the Guarantors hereby acknowledge and agree that, as of October 2, 2000, the outstanding principal balance of the Note is $38,346,872.57, the accrued but unpaid interest on the Note is $242,585.84, attorneys' fees, costs and other expenses have accrued under the Loan Documents, and such fees, costs and expenses are due and payable. Third, that Comdial and the Guarantors hereby acknowledge and agree that each of the Financial Covenant Defaults has occurred and therefore an Event of Default (as defined in the Credit Agreement) has occurred, and, but for the Conditional Waiver, the Bank has the present right to exercise the rights and remedies set forth in Section 10 of the Credit Agreement. Fourth, that no later than November 3, 2000 Comdial and the Guarantors hereby agree to execute and deliver an amended and restated credit agreement and all collateral and other documents related thereto (including without limitation a complete release of any and all claims that Comdial or any of the Guarantors has or may have against the Bank and a covenant not to sue the Bank) which evidence the new terms and conditions that govern the indebtedness arising under or in connection with the Credit Agreement and the other Loan Documents (as defined in the Credit Agreement), which terms and conditions shall be substantially in accordance with the terms and conditions described in the term sheet attached to the July 26, 2000 Letter. Fifth, that Comdial and the Guarantors hereby acknowledge and agree that the Conditional Waiver only waives, on the terms and conditions contained in this letter, the Financial Covenant Defaults, that the Bank has not waived any other Default (as defined in the Credit Agreement) or Event of Default under the Credit Agreement, and that the Conditional Waiver does not imply or in any way obligate the Bank to waive any other Defaults or Events of Default that may now exist or may hereafter exist or occur under the Credit Agreement. Sixth, that Comdial and the Guarantors hereby acknowledge and agree that, except as expressly modified hereby, the Conditional Waiver does not affect or impair any of the Bank's rights or remedies under the Credit Agreement or any of the other Loan Documents. Seventh, that Comdial and the Guarantors hereby acknowledge and agree that, except as expressly modified hereby, all existing terms and conditions in the Credit Agreement and all of the other Loan Documents are, and shall remain, in full force and effect, and that the Bank expressly reserves all of its rights and remedies thereunder. Comdial and the Guarantors hereby acknowledge and agree that Comdial's or any of the Guarantor's failure to comply with any of the seven terms or conditions of the Conditional Waiver shall make the Conditional Waiver immediately void and of no force or effect. Please have Comdial and the Guarantors acknowledge their agreement to and their Page 2 acceptance of the terms of the Conditional Waiver by signing below in the spaces provided, and returning the original of this letter to me by October 4, 2000. Sincerely, Robert E. Clinage, II - --------------------- Robert E. Clinage, II Vice President By signing under seal below, each of Comdial and each of the Guarantors hereby agrees to the terms and conditions of the Conditional Waiver: COMDIAL CORPORATION By: Paul K. Suijk (SEAL) Date: 10/3/00 ------------- Paul K. Suijk Its: Senior VP & CFO COMDIAL TELECOMMUNICATIONS, INC. By: Paul K. Suijk (SEAL) Date: 10/3/00 ------------- Paul K. Suijk Its: Senior VP & CFO COMDIAL BUSINESS COMMUNICATIONS CORPORATION By: Paul K. Suijk (SEAL) Date: 10/3/00 ------------- Paul K. Suijk Its: Senior VP & CFO COMDIAL ENTERPRISE SYSTEMS, INC. By: Paul K. Suijk (SEAL) Date: 10/3/00 ------------- Paul K. Suijk Its: Senior VP & CFO KEY VOICE TECHNOLOGIES, INC. By: Paul K. Suijk (SEAL) Date: 10/3/00 ------------- Paul K. Suijk Its: Senior VP & CFO AURORA SYSTEMS, INC. By: Paul K. Suijk (SEAL) Date: 10/3/00 ------------- Paul K. Suijk Its: Senior VP & CFO ARRAY TELECOM CORPORATION By: Paul K. Suijk (SEAL) Date: 10/3/00 ------------- Paul K. Suijk Its: Senior VP & CFO Page 3 AMERICAN PHONE CENTERS, INC. By: Paul K. Suijk (SEAL) Date: 10/3/00 ------------- Paul K. Suijk Its: Senior VP & CFO COMDIAL TELECOMMUNICATIONS INTERNATIONAL, INC. By: Paul K. Suijk (SEAL) Date: 10/3/00 ------------- Paul K. Suijk Its: Senior VP & CFO Page 4 EX-10.2 3 0003.txt EXHIBIT 10.2 Comdial Corporation Announces the Appointment of - ------------------------------------------------ Nicholas A. Branica as New Chief Executive Officer - ---------------------------------------------------- CHARLOTTESVILLE, Va. - October 3, 2000 - The Board of Directors of Comdial Corporation (Nasdaq: CMDL) today announced the appointment of Nicholas A. Branica as President and Chief Executive Officer of Comdial Corp. Additionally, Nick will also join the Company's Board of Directors. Dianne C. Walker, Chairman of Comdial's Board of Directors, stated, "We are fortunate to have someone with Nick's expertise and knowledge to lead the management team. Nick joined Comdial as part of the KVT acquisition and brought with him a strong entrepreneurial spirit. The decision to offer him the CEO's position seemed to be a logical progression. We believe Nick, with his expertise in the industry and his vision for Comdial, is the best person to lead the Company to the next level." Regarding his appointment, Mr. Branica commented, "I'm pleased to have this opportunity to take Comdial forward in this exciting era of converged communications. We will continue to build and enhance our relationships with our dealers who, besides our people, are our most valuable asset. I intend to build upon Comdial's solid foundation which will usher the way into the next generation of telecommunications products and services." Mr. Branica is well suited to this position with a background that includes over 15 years experience in the telecommunications market. Mr. Branica specializes in bringing value-adding communications solutions to the small to mid-sized business market. About Comdial - ------------- Comdial is a provider of integrated communications solutions. The Company's broad product line includes business communications, hospitality, assisted living, real estate, and call center solutions. For more information about Comdial and its products, please visit their web site at www.comdial.com. # # # # # Page 1 -----END PRIVACY-ENHANCED MESSAGE-----