AMENDMENT TO TERM LOAN AGREEMENT
This AMENDMENT TO TERM LOAN AGREEMENT (this "Amendment") is entered
into as of the 22nd day of November, 1996 by EXECUTIVE TELECARD, S.A., a
corporation incorporated under the laws of the Turks and Caicos Islands
("Borrower"), EXECUTIVE TELECARD, LTD., a Delaware corporation ("Parent"),
and ING (U.S.) CAPITAL CORPORATION, a Delaware corporation (formerly known
as Internationale Nederlanden (U.S.) Capital Corporation) ("Lender").
WHEREAS, Borrower, Parent and Lender have entered into that certain
Term Loan Agreement dated as of June 28, 1996, as heretofore amended or
modified (the "Loan Agreement"); and
WHEREAS, Borrower and Parent have requested that Lender make
additional loans available to Borrower, and Lender has agreed to do so on
the terms and subject to the conditions set forth in this Amendment.
NOW, THEREFORE, in consideration of the above recitals, and the
agreements, conditions and covenants contained in this Amendment, the
parties hereto agree as follows:
1. DEFINITIONS. Capitalized terms used and not otherwise defined
in this Amendment shall have the meanings given such terms in the Loan
Agreement.
2. AMENDMENTS TO LOAN AGREEMENT. Upon the "Effective Date" as
defined below, the Loan Agreement is amended as follows:
(a) AMENDMENTS TO SUBSECTION 1.1. Subsection 1.1 of the Loan
Agreement is hereby amended to delete the definitions of "Loan", "Note"
and "Warrant Agreement", and to add the following definitions in
applicable alphabetical order:
"Amendment" means the Amendment to Term Loan Agreement
dated as of November 22, 1996 among Borrower, Parent and Lender.
"Amendment Effective Date" means the date on which the
Amendment becomes effective in accordance with its terms.
"Loan" means, collectively, the Tranche A Loan and the
Tranche B Loans.
"New Warrant Agreement" means the Common Stock Warrant
Agreement by and between Parent and Lender executed and delivered on
the Amendment Effective Date.
"Note" means, collectively, the Tranche A Note and the
Tranche B Note.
"Notice of Borrowing" means a request for a Tranche B Loan
in the form attached hereto as EXHIBIT I.
"Tranche A Loan" means the term loan in the principal
amount of $6,000,000 made by Lender to Borrower on the Closing Date.
"Tranche A Note" means the promissory note evidencing the
Tranche A Loan, in the form attached hereto as EXHIBIT G.
"Tranche B Commitment" means $4,000,000.
"Tranche B Loans" means the term loans made by Lender to
Borrower pursuant to Section 2.1(B) of this Agreement, in the
aggregate principal amount not to exceed $4,000,000.
"Tranche B Note" means the promissory note evidencing the
Tranche B Loan, in the form attached hereto as EXHIBIT H.
"Warrant Agreement" means, collectively, the Common Stock
Warrant Agreement by and between Parent and Lender executed and
delivered on the Closing Date, as amended, and the New Warrant
Agreement.
(b) AMENDMENT TO SUBSECTION 2.1. Subsection 2.1 of the
Loan Agreement is deleted in its entirety and replaced by the following:
"2.1 TERM LOANS.
(A) Subject to the terms and conditions of this Agreement
and in reliance upon the representations and warranties of Parent and
Borrower herein set forth, Lender agreed to lend to Borrower on the
Closing Date the Tranche A Loan in the amount of $6,000,000. The
Tranche A Loan shall be funded in one drawing.
(B) Subject to the terms and conditions of this Agreement
and in reliance upon the representations and warranties of Parent and
Borrower herein set forth, Lender agrees to lend to Borrower, from
time to time from the Amendment Effective Date to (but excluding) the
Maturity Date, the Tranche B Loans in the aggregate amount not to
exceed $4,000,000. The Tranche B Loans may be funded in multiple
drawings, subject to the provisions of SUBSECTION 2.10.
(C) Amounts borrowed under this SUBSECTION 2.1 and repaid
may not be reborrowed. The Loan shall be due and payable in full,
together with all interest accrued thereon, on the Maturity Date."
(c) AMENDMENT TO SUBSECTION 2.3. The following
subsections are added to subsection 2.3 of the Loan Agreement:
"(C) On the Amendment Effective Date Borrower shall pay to
Lender a facility fee for the Tranche B Loans in the amount of
$20,000.
(D) Borrower shall pay to Lender an unused commitment fee
equal to one half of one percent (.5%) per annum on the amount of the
Tranche B Commitment LESS the amount of the Tranche B Loans made
hereunder, such fee to be computed on the basis of a 360 day year for
the actual number of days elapsed in the period during which it
accrues and to be payable quarterly in arrears on the last day of
each calendar quarter."
(d) AMENDMENT TO SUBSECTION 2.4.
(1) The following subjection 2.4(B)(3) is hereby added to the
Loan Agreement.
"(3) PREPAYMENTS FROM ISSUANCE OF INDEBTEDNESS.
Immediately upon receipt by Parent or any of its Subsidiaries of
proceeds from the issuance of any Indebtedness other than that
permitted under SUBSECTION 6.2, Borrower shall prepay the Loan in an
amount equal to 100% of the proceeds of such Indebtedness, net of
customary costs and expenses of issuance."
(2) Subsection 2.4(B)(3) of the Loan Agreement is renumbered as
subsection (4) and amended to add the following: "All prepayments of
principal shall be applied first to the Tranche A Loan and then to the
Tranche B Loans."
(e) ADDITION OF SUBSECTION 2.10. The following subsection
2.10 is added to the Loan Agreement:
"2.10 TRANCHE B LOANS.
(A) NOTICE OF BORROWING. If Borrower desires to borrow a
Tranche B Loan, Borrower shall deliver a Notice of Borrowing to
Lender no later than noon (New York time) on the Business Day prior
to the date on which Borrower desires that the Tranche B Loan be
funded. Subject to satisfaction of the conditions set forth in
SUBSECTION 2.10(B), Lender shall fund the Tranche B Loan by wiring
proceeds to the account of Borrower designated in the Notice of
Borrowing.
(B) CONDITIONS TO TRANCHE B LOANS.
(1) Borrower shall have delivered a Notice of
Borrowing in accordance with SUBSECTION 2.10(A).
(2) The representations and warranties of Parent,
Borrower and their Subsidiaries contained in the Loan Documents shall
be accurate and complete in all respects as if made on and as of the
date on which the Tranche B Loan is funded, except to the extent that
such representations by their express terms speak as of an earlier
date.
(3) There shall not have occurred any Default which
has not been cured or waived or any Event of Default which has not
been waived by Lender.
(4) No event or circumstance shall have occurred
since June 30, 1996 that, in the opinion of Lender, constitutes or
would reasonably be expected to constitute a Material Adverse
Effect."
(5) Borrower shall be in compliance with SUBSECTION
5.14, after giving effect to the Tranche B Loan requested in the
Notice of Borrowing.
(f) ADDITION OF SUBSECTION 5.14. The following subsection
5.14 is added to the Loan Agreement:
"5.14 LEVERAGE RATIO. Parent shall maintain a ratio of
total Indebtedness of Parent and its Subsidiaries on a consolidated
basis to trailing four quarter EBITDA, calculated as of the end of
the most recent fiscal quarter, of not more than 2 to 1."
(g) AMENDMENT TO SUBJECTION 6.1. Subsection 6.1 is
amended to delete the amount $5,500,000 and replace is with $9,500,000.
(h) SUBSTITUTION OF COMPLIANCE CERTIFICATE. The form of
Compliance Certificate attached to the Agreement as Exhibit A is replaced
with the form attached to this Agreement.
3. REPRESENTATIONS AND WARRANTIES OF PARENT AND BORROWER. To
induce Lender to enter into this Amendment and to make the Tranche B
Loans, each of Parent and Borrower represents and warrants to lender that
the following statements are true, correct and complete:
(a) Each of the representations and warranties of the Loan
Parties contained in the Loan Documents are true in all material
respects on and as of the date hereof, except to the extent that any
representation and warranty relates only to an earlier date, in which
case it was true and correct as of such date.
(b) This Amendment, the Amendment Documents (as defined in
paragraph 4 below), and the borrowing of the Tranche B Loans have
been duly authorized, and this Amendment constitutes, and upon
execution and delivery of the Amendment Documents in accordance with
the provisions hereof the Amendment Documents will constitute, legal,
valid and binding agreements and obligations of the applicable Loan
Parties enforceable in accordance with their respective terms.
(c) No Default or Event of Default has occurred and is
continuing.
(d) No event or circumstance has occurred since June 30,
1996 which constitutes a Material Adverse Effect.
(e) The Indebtedness of Borrower represented by the
Tranche B Note is within the definition of "Senior Obligations" as
defined in the agreement for the Subordinated Debt.
(f) Each Loan Party has performed in all material respects
all agreements and satisfied in all material respects all conditions
which any Loan Document provides shall be performed or satisfied by
it on or before the Effective Date.
4. EFFECTIVE DATE. This Amendment shall become effective as
of the date on which the following conditions shall have been satisfied
and Lender has delivered a notice thereof to Borrower (the "Effective
Date"):
(a) Borrower shall have paid the fee due pursuant to
SUBSECTION 2.3(c).
(b) Borrower and Parent shall have executed and delivered
this Amendment. Counterparts hereof executed by the parties hereto;
(c) The applicable Loan Parties shall have executed and
delivered the following (collectively, the "Amendment Documents"):
(1) The Tranche B Note;
(2) The Confirmation of Guaranties and Security
Interests, duly executed by all Subsidiaries of Parent;
(3) The New Warrant Agreement, and the warrant issued
thereunder; and
(4) An amendment to the Warrant Agreement executed on
the Closing Date extending the exercise period to December 31,
2001.
(d) Lender shall have received each of the following:
(1) A certificate of the Secretary of Assistant
Secretary of Borrower certifying the resolutions of the Board of
Directors of Borrower authorizing the execution, delivery and
performance of this Amendment and the Amendment Documents to
which it is a party;
(2) A certificate of the Secretary or Assistant
Secretary of Parent certifying the resolutions of the Board of
Directors of Parent authorizing the execution, delivery and
performance by Parent of this Amendment, and the Amendment
Documents to which it is a party; and
(3) Legal opinions of counsel to Borrower and Parent,
in form and substance satisfactory to Lender and its counsel.
5. MISCELLANEOUS. This Amendment and the Amendment Documents
are Loan Documents. As of the Effective Date, all references in the Loan
Documents to the Loan Agreement shall mean the Loan Agreement as amended
by this Amendment. The headings herein are for convenience of reference
only and shall not alter or otherwise affect the meaning hereof. Except
to the extent specifically amended or modified hereby, the provisions of
the Loan Agreement and the other Loan Documents shall not be amended,
modified, impaired or otherwise affected hereby and the Loan Agreement and
all of the Obligations are hereby confirmed in full force and effect. The
execution, delivery and effectiveness of this Amendment shall not operate
as a waiver of any right, power or remedy of Lender under the Loan
Agreement or any other Loan Document, nor constitute a waiver of any
provision of Loan Agreement or any other Loan Document, including, without
limitation, any Events of Default or failure of conditions.
6. COUNTERPARTS. This Amendment may be executed in any number
of counterparts and by the different parties hereto in separate
counterparts, each of which when so executed and delivered shall be an
original, but all of which shall together constitute one and the same
instrument.
7. GOVERNING LAW. This Amendment shall be governed by, and
shall be construed and enforced in accordance with, the internal laws of
the State of New York, without regard to conflicts of laws principles.
WITNESS the due execution hereof by the respective duly
authorized officers of the undersigned as of the date first above written.
"Borrower" EXECUTIVE TELECARD, S.A.
THE COMMON SEAL OF a Turks and Caicos Islands
EXECUTIVE TELECARD, S.A. Corporation
was hereunto affixed in
the presence of:
By: /s/ Xxxxx Xxxxxx
By: /s/Xxxx Xxxxxx Xxxxx Xxxxxx
Xxxx Xxxxxx Director
Director
"Parent" EXECUTIVE TELECARD, LTD.
By: /s/Xxxxx Xxxxxx
Name: Xxxxx Xxxxxx
Title: Executive Vice President
FEIN: 00-0000000
"Lender" ING (U.S.) CAPITAL CORPORATION
By: /s/Xxxxxx Xxxxxxxx
Name: Xxxxxx Xxxxxxxx
Title: Senior Vice President
