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Exhibit 4.1
EIGHTH AMENDMENT AGREEMENT
THIS EIGHTH AMENDMENT AGREEMENT (the "Agreement") is entered as of June
15, 2001 between SHARED TECHNOLOGIES CELLULAR, INC., a Delaware corporation,
with its principal place of business at 000 Xxxxx Xxxxxx Xxxx, Xxxxx 000,
Xxxxxxxxxxxx, Xxxxxxxxxxx 00000 (the "Borrower") and MOBILE INVESTMENTS LLC, a
Connecticut limited liability company with an address at c/x Xxxxx, Xxxxxxxxxxxx
& Co., Inc., c/x Xxxxx & Fulvio, 00 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000
("Mobile" or "Lender").
RECITALS:
On July 7, 0000, Xxxxx Xxxxxx Bank and Trust Company ("State Street")
and the Borrower entered into a Loan Agreement, as amended by that certain First
Amendment Agreement dated as of December 3, 1999, that certain Second Amendment
Agreement dated as of May 1, 2000, that certain Third Amendment Agreement dated
August 8, 2000, and that certain Fourth Amendment Agreement dated March 1, 2001
(referred to herein collectively as the "Credit Agreement"). State Street
assigned its interest in the Credit Agreement, the loans made thereunder, and
the documents executed in connection therewith to Citizens Bank of Massachusetts
("Citizens"), pursuant to which Citizens extended to the Borrower a Revolving
Credit Facility.
The Borrower executed and delivered to State Street on July 7, 1999 a
Secured Revolving Credit Promissory Note in the original principal amount of Ten
Million Dollars ($10,000,000.00), which was amended and restated by that certain
Amended and Restated Secured Revolving Credit Promissory Note in the original
principal amount of Five Million Dollars ($5,000,000.00) dated May 1, 2000
delivered to Citizens and that certain Amended and Restated Secured Revolving
Credit Promissory Note in the original principal amount of Two Million Five
Hundred Thousand Dollars ($2,500,000.00) dated August 8, 2000 delivered to
Citizens (collectively the "Original Note").
Pursuant to a Nonrecourse Assignment and Acceptance Agreement dated as
of March 1, 2001, Citizens assigned its interest in said Loan to Xxxxxxx
Xxxxxxxx. Xxxxxxx Xxxxxxxx assigned the Loan to Mobile pursuant to a certain
Nonrecourse Assignment and Acceptance Agreement dated March 14, 2001.
Pursuant to said Fourth Amendment Agreement, Citizens agreed to hold
all collateral securing the obligations of the Borrower under the Credit
Agreement and the Retained Letter of Credit as agent for itself and Mobile, (the
"Collateral Agent") pursuant to the terms thereof. As of March 29, 2001 Citizens
has resigned as Collateral Agent and has assigned all of its interests in the
Credit Agreement and the collateral pledged thereby to Mobile. On March 30,
2001, Mobile and the Borrower entered into a Fifth Amendment Agreement under
which Citizens resigned as Agent, and the parties further amended the Credit
Agreement on April 20, 2001 pursuant to a Sixth Amendment Agreement and on May
2, 2001 pursuant to a Seventh Amendment Agreement.
The parties have agreed to further amend the Credit Agreement upon the
terms and conditions set forth herein.
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NOW, THEREFORE, in consideration of the provisions herein contained,
Borrower and the Lender, each intending to be legally bound hereby, agree as
follows:
SECTION I. AMENDMENTS TO CREDIT AGREEMENT.
The Credit Agreement is amended hereby as follows:
1. Notwithstanding the terms of the Fourth Amendment Agreement,
Mobile shall make an Advance of $1,000,000 as follows:
(a) $300,000 shall be advanced to Borrower on the date hereof in
immediately available funds;
(b) $200,000 is being advanced by Lender on the date hereof to
satisfy the put fee for the warrant issued to Citizen's Bank dated
July 7, 1999, and of which Lender is now the Holder. Lender shall
immediately surrender said warrant to Borrower, and said warrant
is now deemed extinguished.
(c) $200,000 is being advanced by Lender on the date hereof for an
extension fee for the extension of the Loan through the maturity
date of the Original Note and for Lenders making the additional
Advance pursuant to the terms of this Agreement.
(d) $200,000 is being advanced by Lender on the date hereof for a
loan modification fee in consideration of Lender's agreement to
modify the Loan on the terms hereof.
(e) $100,000 is being advanced by Lender on date hereof to pay
legal fees of Lender incurred in connection with the Fourth,
Fifth, Sixth and Seventh Amendment Agreements through May 31,
2001.
2. Borrower acknowledges and agrees that Lender may disburse the
warrant put fee, loan modification fee, extension fee, and legal fees to itself
as reimbursement for said costs and fees.
3. The following new definitions are added to the Credit Agreement:
"Eighth Amendment Agreement" shall mean that certain Eighth
Amendment Agreement entered into between the Borrower and the
Lender dated as of June 15, 2001."
4. The Note is amended pursuant to an Amendment to Note of even date
herewith which increases the principal amount thereof to $4,078,006.96.
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SECTION II. RECONFIRMATION OF COVENANTS, REPRESENTATIVES AND WARRANTIES.
1. The Borrower further reaffirms all of its obligations, as amended
hereby, under the Credit Agreement, and under the Security Documents.
2. Borrower represents and agrees that, there is currently
outstanding the principal amount of $4,078,006.96 under the Credit Agreement and
Original Note, together with accrued interest of $66,452, thereon through June
15, 2001 ($1,026 per diem) all of which are due and owing without setoff,
defense, or counterclaim, and Borrower hereby waives any such setoff, defense or
counterclaim it may have against Mobile.
SECTION III. RESERVATION OF RIGHTS.
Mobile and the Borrower agree that:
i) This Agreement evidences solely the amendment of the terms
and provisions of the Borrower's obligations under the Credit Agreement
and the Original Note, and is not a novation or discharge thereof; and
ii) Except for this Amendment, and the other documents
executed in connection herewith, there are no other understandings,
express or implied between Mobile and the Borrower regarding the Credit
Agreement and the Original Note.
SECTION IV. EFFECT OF AMENDMENT.
1. Except as amended hereby, the Credit Agreement and the Original
Note and all other documents entered into in connection therewith shall:
a) remain in full force and effect in accordance with their
original terms and nothing herein shall be deemed to modify, abrogate, waive or
extend any other provision in the Credit Agreement and the Original Note or in
any other document, agreement or instrument executed in connection therewith or
pursuant thereto prior to the execution of this Agreement, including without
limitation any of the Borrower's liabilities to Mobile or any of Mobile's rights
with respect to such liabilities; and
b) be in all respects ratified and affirmed.
2. The Borrower acknowledges that all of the liabilities and
obligations of the Borrower to Mobile now existing and hereafter incurred are
secured by the security described in the Security Documents defined in the
Credit Agreement; the Borrower further acknowledges that Mobile is relying upon
the security described above, both as entered into on July 9, 1999 and as
entered into from time to time thereafter, as security for the financing
represented by the Liabilities and as security for all other obligations of the
Borrower to Mobile.
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SECTION V. WAIVER.
Mobile hereby waives all existing Events of Default under the Credit
Agreement, with the express stipulation that this Waiver shall not operate as a
waiver of any other failure by the Borrower to meet other covenants of which
Mobile does not have notice as of the date hereof, or waiver of the failure of
the Borrower to meet the same covenants on a future occasion.
Such Waiver shall not be construed as a course of action which would
constitute a waiver of any other default under the Credit Agreement or under any
other document executed in connection therewith or pursuant thereto. No delay in
taking any action with respect to any such default, or any other course of
action by Mobile shall affect Mobile's rights to later take any such action with
respect to any such default.
SECTION VI. GENERAL.
1. Construction. Except as amended hereby, incorporated herein by
reference are the representations, warranties, agreements, affirmative and
negative covenants, definitions, terms and conditions all as set forth in the
Credit Agreement and the Original Note and all documents executed in connection
therewith or pursuant thereto. This Agreement, the Credit Agreement, the
Original Note, the Amendment to Note and the other Loan Documents shall be
construed collectively and in the event that any term, provision or condition of
any of such documents is inconsistent with or contradictory to any term,
provision or condition of any other such document, the terms, provisions and
conditions of this Agreement shall supersede and control the terms, provisions
and conditions of the Credit Agreement and the Original Note.
2. Governing Law. This Agreement, the Original Note and the Credit
Agreement and all Security Documents thereunder, and the rights and obligations
of the parties hereunder, shall in all respects be governed by, and interpreted
and determined in accordance with, the laws of the State of Connecticut
(excluding the laws applicable to conflicts or choice of law).
SECTION VII. SECURITY DOCUMENTS.
The Borrower and The Cellular Hotline, Inc., each with respect to
itself, by its signature hereto, agree that:
a) the Security Documents (defined in the Credit Agreement) are
amended to reflect that the obligations and liabilities secured thereby are
deemed amended pursuant to this Agreement and the Amendment to Note, as
incorporated therein by reference; and
b) except as specifically amended hereby and by all other
documents executed in connection herewith, the Security Documents shall remain
in full force and effect, in accordance with their original terms as previously
amended, and nothing herein shall be deemed to modify, abrogate, waive or extend
any other provision in the Security Documents, except as previously amended, or
in any other document, agreement, or instrument executed in connection therewith
or pursuant thereto prior to the execution of this Agreement, including without
limitation any of the Borrower's or The Cellular Hotline, Inc.'s liabilities to
the Lender or any of the Lender's rights with respect to such liabilities; and
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c) the Security Documents, as amended hereby and by such other
documents executed in connection herewith, shall continue to secure the
Borrower's obligations under the Credit Agreement, the Original Note as amended,
and all other obligations of the Borrower and of The Cellular Hotline, Inc. to
the Lender, whether now existing or hereafter arising.
SECTION VIII. WAIVER OF TRIAL BY JURY.
BORROWER, THE CELLULAR HOTLINE, INC., AND LENDER MUTUALLY HEREBY
KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE THE RIGHT TO A TRIAL BY JURY IN
RESPECT OF ANY CLAIM BASED HEREIN, ARISING OUT OF, UNDER OR IN CONNECTION WITH
THIS AGREEMENT OR ANY OTHER LOAN DOCUMENTS CONTEMPLATED TO BE EXECUTED IN
CONNECTION HEREWITH OR ANY COURSE OF CONDUCT, COURSE OF DEALINGS, STATEMENTS
(WHETHER VERBAL OR WRITTEN) OR ACTIONS OF ANY PARTY. THIS WAIVER CONSTITUTES A
MATERIAL INDUCEMENT FOR THE LENDER TO ACCEPT THIS AGREEMENT AND TO AMEND THE
REVOLVING CREDIT FACILITY.
[THE BALANCE OF THIS PAGE IS INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the Lender and the Borrower have caused their duly
authorized officers to execute this Agreement as of the day and year first above
written as an instrument under seal.
WITNESS: SHARED TECHNOLOGIES CELLULAR, INC.
________________________________ By: ________________________________
Name:
Title:
MOBILE INVESTMENTS LLC
By: Xxxxx, Xxxxxxxxxxxx & Co., Inc.
Its Manager
________________________________ By: ________________________________
Xxxxxxx X. Xxxxx, Xx.
Its President
CONSENT AND CONFIRMATION
The undersigned consents to the amendment of the Credit Agreement
pursuant to the Eighth Amendment Agreement, and of all underlying documents
referred to therein and all documents entered into pursuant thereto or in
connection therewith.
The undersigned confirms its obligations under that certain Guaranty
dated as of July 7, 1999 (the "Guaranty"), executed by the undersigned, of all
Liabilities (as defined in the Guaranty), as amended hereby, of the Borrower to
the Lender, and confirms its obligations under all documents securing the
Guaranty, and acknowledges that the indebtedness evidenced by the Original Note,
as amended by the Amendment to Note dated May 2, 2001 and June 15, 2001
constitutes a "Liability" under the Guaranty.
IN WITNESS WHEREOF, the undersigned has caused its duly authorized
officer to execute this Consent and Confirmation as an instrument under Seal.
WITNESS: THE CELLULAR HOTLINE, INC.
________________________________ By: ________________________________
Name:
Title:
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[NOTARIZATIONS FOR SIGNATURES ON PRIOR PAGE]
STATE OF CONNECTICUT )
) ss.
COUNTY OF HARTFORD )
In Wethersfield on the day of June, 2001, before me personally appeared
the above-named , of SHARED TECHNOLOGIES CELLULAR, INC. to me known and known by
me to be the party executing the foregoing instrument on behalf of said
corporation and acknowledged said instrument so executed to be his free act and
deed in said capacity and the free act and deed of said corporation.
____________________________________
Notary Public
My Commission Expires:
STATE OF CONNECTICUT )
) ss.
COUNTY OF HARTFORD )
In Wethersfield on the day of June, 2001, before me personally
appeared the above-named , of THE CELLULAR HOTLINE, INC. to
me known and known by me to be the party executing the foregoing instrument on
behalf of said corporation and acknowledged said instrument so executed to be
his free act and deed in said capacity and the free act and deed of said
corporation.
____________________________________
Notary Public
My Commission Expires:
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STATE OF )
) ss.
COUNTY OF )
In _____________________ on the day of June, 2001, before me
personally appeared the above-named Xxxxxxx X. Xxxxx, Xx., the President of
Xxxxx, Xxxxxxxxxxxx & Co., Inc., Manager of Mobile Investments LLC to me known
and known by me to be the party executing the foregoing instrument on behalf of
said Lender and acknowledged said instrument so executed to be his free act and
deed in said capacity and the free act and deed of said Lender.
____________________________________
Notary Public
My Commission Expires:
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