FOURTH AMENDMENT, LIMITED WAIVER AND CONSENT
THIS FOURTH AMENDMENT, LIMITED WAIVER AND CONSENT (this "Waiver")
is made as of March 17, 1995 by and between Intellicall, Inc., a Delaware
corporation (together with its successors,assigns and transferees, the
"Company"), and Nomura Holding America Inc., a Delaware corporation (together
with its successors, assigns and transferees, the "Purchaser"). Capitalized
terms used herein without definition shall have the respective meanings ascribed
to them in that certain Note Purchase Agreement, dated as of August 11, 1994, by
and between the Company and the Purchaser, as previously amended (the "Purchase
Agreement").
R E C I T A L S
A. Pursuant to the Purchase Agreement, the Purchaser on August 11, 1994
purchased certain secured promissory notes of the Company, consisting of its
Variable Rate Senior Bridge Notes Due 1996, Series A, in an aggregate principal
amount not to exceed $16,000,000 at any one time outstanding (the "Series A
Notes"), and its 12.5% Senior Bridge Notes Due 1996, Series B, in the aggregate
principal amount of $8,000,000 (the "Series B Notes", and, collectively,
together with the Series A Notes, the "Notes").
B. The Company has entered into a Restructuring Agreement dated as of
December 31, 1994, a true and correct copy of which is attached to this Waiver
as Exhibit A (as in effect on the date hereof, the "Restructuring Agreement"),
with ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ & Associates, Inc., an Iowa corporation ("MRA"), pursuant
to which, subject to certain conditions, among other things, (i) the Company has
agreed to cancel and deliver to MRA the Unsecured Note and the Royalty Note
(each defined in the Restructuring Agreement), which notes were previously
executed and delivered by MRA to the Company and have been pledged to the
Purchaser as Collateral pursuant to the Company Security Agreement, and to
cancel certain equipment Lease Agreements previously executed between the
Company as lessor and MRA as lessee (the "MRA Equipment Leases"), and accrued
amounts owed thereunder to the Company by MRA, (ii) in exchange therefor, MRA
has agreed to pay to the Company the sum of $800,000 (the "Initial Payment") and
to execute and deliver to the Company an Installment Note in the principal
amount of $625,000 (the "Installment Note"), payable in five installments of
$125,000 each on April 15, 1995, July 15, 1995, October 15, 1995, January 15,
1996 and April 15, 1996, and (iii) MRA has agreed to redeem 14,706 shares of its
outstanding 10% Series A Preferred Stock held by the Company, which shares have
been pledged to the Purchaser pursuant to the Company Security Agreement (the
"Pledged Preferred Shares"), and to issue to the Company in exchange therefor
its Preferred Stock Subordinated Note due 2005 in the principal amount of
$1,000,000 (the "Subordinated Note"). The foregoing transactions and the other
transactions provided for in the Restructuring Agreement are hereinafter
collectively called the "Restructuring Transactions."
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C. The Company has requested that the Purchaser enter into this Waiver
in order to evidence the Purchaser's consent to the Restructuring Agreement and
the Restructuring Transactions (which consent is a condition precedent to the
obligations of the parties thereunder) and to facilitate the effectuation of the
Restructuring Transactions.
NOW THEREFORE, in consideration of the terms and conditions contained
herein and of other good and valuable consideration the receipt and sufficiency
of which are hereby acknowledged, the parties hereto agree as follows:
1. Limited Waiver and Consent. In condition of the representations,
warranties, covenants and agreements of the Company set forth in this Waiver,
the Purchaser hereby consents to the execution by the Company of the
Restructuring Agreement and the consummation of the Restructuring Transactions
contemplated thereby, and waives any Event of Default that may have occurred or
may occur solely by reason of the execution of such agreement or the
consummation of the Restructuring Transactions, including, without limitation,
and Event of Default arising in connection therewith under Section 10.4 of the
Purchase Agreement. The consent and waiver set forth in this Section 1 shall be
limited to the specific matters described herein and shall not be deemed to (i)
be a waiver of any other term or condition of the Purchase Agreement or (ii)
prejudice any rights not specifically waived herein which the Purchaser or any
other holder of Notes may now have or may have in the future under the Purchase
Agreement or any Related Document.
2. Disposition of Collateral; Application of Funds. The Company agrees
that (i) upon receipt of the Initial Payment, it will immediately pay a portion
thereof equal to $379,000 to the Purchaser, for application to the outstanding
principal balance of the Series A Notes in accordance with the provisions of the
Purchase Agreement as amended by this Waiver, and will pay the remaining
$421,000 to Norwest Financial Leasing, Inc. in payment of the Company's
obligations under the Norwest Purchase Agreement; and (ii) upon receipt of the
Installment Note and the Subordinated Note, it will immediately pledge and
deliver the same to the Purchaser as additional Collateral pursuant to the
provisions of the Company security Agreement, together with appropriate
assignments executed by the Company in blank. Upon receipt of such amount and
such notes and assignments, the Purchaser will thereupon release and deliver to
the Company the Unsecured Note, the Royalty Note and the Pledged Preferred
Shares, for delivery by the Company to MRA in cancellation or redemption thereof
(as the case may be) pursuant to the provisions of the Restructuring Agreement,
and will further execute and deliver to the Company any UCC-3 Termination
Statements that may be required in order to evidence the release of the
Purchaser's Liens in the MRA Equipment Leases and the equipment leased thereby.
The Company acknowledges and agrees that all notes and other instruments or
documents received by it pursuant top or in connection with the Restructuring
Agreement, and all of the Company's rights under the Restructuring Agreement and
such notes, instruments and documents, and all proceeds of any thereof,
constitute additional Collateral subject to the provisions of the Company
Security Agreement.
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3. Amendments to the Purchase Agreement. The Purchase Agreement is hereby
amended as follows:
A. Section 1.1 of the Purchase Agreement is hereby amended by inserting the
following new definitions immediately following the definition of the term
"Maturity Date") appearing therein:
"'MRA' means ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ & Associates, Inc., an Iowa corporation.
"'MRA Initial Payment' means the sum of $800,000 to be paid to the Company
by MRA pursuant to Section 2.3 of the MRA Restructuring Agreement.
"'MRA Installment Note' means the Unsecured Note due April 15, 1996 in the
principal amount of $625,000, issued or to be issued by MRA to the Company
pursuant to Section 2.3 of the MRA Restructuring Agreement, as from time to time
amended, modified or supplemented in accordance with its terms.
"'MRA Restructuring Agreement' means the Restructuring Agreement dates as
of December 31, 1994, between the Company and MRA,as from time to time amended,
modified or supplemented in accordance with its terms.
"'MRA Subordinated Note' means the Preferred Stock Subordinated Note due
January 31, 2005 in the principal amount of $1,000,000, issued or to be issued
by MRA to the Company pursuant to Section 3.2 of the MRA Restructuring
Agreement, as from time to time amended, modified or supplemented in accordance
with its terms."
B. Section 3.1 of the Purchase Agreement is amended by adding the following
new subsection (f) immediately following subsection (e) thereof:
"(f) Within one (1) Business Day after receipt by the Company of any
payment made at any time pursuant to or in connection with the provisions of the
MRA Restructuring Agreement or any note or other document executed in connection
therewith, including, without limitation, (i) the MRA Initial Payment (other
than a portion thereof equal to $421,000, which shall be used by the Company to
pay obligations owed to Norwest Financial leasing, Inc. under the Norwest
Purchase Agreements), (ii) any installment payment or other payment of principal
or interest paid by MRA under the MRA Installment Note, and (iii) any payment or
principal or interest made by MRA under the MRA Subordinated Note, the Company
shall pay such amount to the Purchaser, for application to the outstanding
principal balance of the Series A Notes (pro rata in accordance with the
respective outstanding principal amounts thereof), or, in the event that at the
time of such payment the outstanding principal balance of the Eries A Notes if
$0, for application to the outstanding principal balance of
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the Series B Notes (pro rata in accordance with the respective outstanding
principal amounts thereof). Each such payment shall be accompanied by an
Officer's Certificate of the Company setting forth the source and amount of such
payment and stating that it is being paid pursuant to the provisions of this
Section 3.1(f)."
C. Section 3.4 of the Purchase Agreement is amended by adding the following
new subsection (e) immediately following subsection (d) thereof:
"(e) Notwithstanding any other provisions of this Agreement to the
contrary, the Company shall not reissue all or any portion of the principal
amount of the Series A Notes which shall have been repaid pursuant to the
provisions of Section 3.1(f) hereof (i) at any time on or prior to June 30,
1995, or (ii) at any time after June 30, 1995 unless cumulative EBITDA for the
period January 1, 1995 to and including the last day of the fiscal quarter of
the Company most recently ended prior to the proposed date of any such
reissuance shall be not less than the corresponding amount shown opposite such
period below (as demonstrated in a certificate signed by the Chief Financial
Officer of the Company delivered together with the financial statements of the
Company for such fiscal quarter furnished pursuant to Section 7 hereof)":
Period from January 1, 1995
to and Including the Fiscal Required
Quarter Ended: EBITDA
--------------------------- ---------
June 30, 1995 $ 2,070,000
September 30, 1995 5,225,000
December 31, 1995 8,200,000
March 31, 1996 9,425,000
June 30, 1996 11,900,000"
4. Representations and Warranties of the Company. The Company represents
and warrants to the Purchaser that:
A. Representations in the Purchase Agreement; No Defaults. Each of the
representations and warranties made by the Company in the Purchase Agreement is
true and correct on and as of the date hereof to the same extent as if made on
and as of the date hereof except to the extent that such representations and
warranties specifically relate to an earlier date, in which case they are true
and correct as of such earlier date, and such representations and warranties are
hereby incorporated by reference as if set forth herein in full (except that the
representation contained in Section 4.21 of the Purchase Agreement is subject to
the potential infringement claim of Aerotel U.S.A., Inc. contained in its letter
to the Company dated January 13, 1995). No event has occurred and is continuing
or will result from the transactions contemplated hereby which constitutes
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(or with notice or the passage of time would constitute) an Event of
Default under the Purchase Agreement as it existed before this Waiver or as it
exists after the effectiveness of this Waiver, except such as are being waived
pursuant to this Waiver.
B. Corporate Authority. The execution, delivery and performance by Company
of this Waiver (i) is within its corporate powers, (ii) has been duly authorized
by all necessary corporate action on the part of its Board of Directors and
stockholders, and (iii) does not require the consent or approval of, of any
registration, filing or declaration with, any Governmental Body or
non-governmental Person, except of the Purchaser as set forth in this Waiver.
C. Binding Effect. This Waiver is the legal, valid and binding obligation
of the Company, enforceable against the Company in accordance with its terms,
except as such enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium, or other laws relative to or affecting
the enforcement of creditors' rights generally in effect from time to time and
by general principles of equity.
5. Effect of Waiver. It is hereby agreed that from and after the date
hereof all references to the Purchase Agreement in the Related Documents shall
be references to the Purchase Agreement as heretofore amended and as further
amended by this Waiver; provided that, except as specifically provided herein,
this Waiver does not in any way affect or impair the terms, conditions and other
provisions of the Purchase Agreement or any of the other Related Documents, or
the obligations of the Company thereunder, and all terms, conditions and other
provisions of the Purchase Agreement shall remain in full force and effect
except to the extent specifically amended, modified or waived pursuant to the
provisions of this Waiver.
6. Payment Fees. The Company agrees to pay all fees, costs and expenses
incurred by the Purchaser in connection with the negotiation, preparation,
execution and delivery of this Waiver and all other documents executed pursuant
to or in connection herewith, including, without limitation, the fees and
disbursements of ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇▇, special counsel to the
Purchaser, in connection herewith.
7. Counterparts. This Waiver may be executed in any number of counterparts,
each of which shall be deemed an original, and all of which taken together shall
be deemed to constitute one and the same instrument.
8. Governing Law. THIS WAIVER SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
9. Headings. Section headings are included herein for convenience of
reference only and shall not constitute a part of this Waiver for any other
purposes.
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10. Amendments and Modifications. Any term, covenant, agreement or
condition of this Waiver may, with the consent of the parties hereto, be
amended, or compliance therewith may be wived (either generally or in a
particular instance and either retroactively or prospectively), by one or more
substantially concurrent written instruments signed by the parties hereto.
IN WITNESS WHEREOF, the parties hereto have executed this Waiver as of the
day and year first written above.
INTELLICALL, INC.
03/30/95 By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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Dated Chief Financial Officer
NOMURA HOLDING AMERICA, INC.
03/30/95 By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
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Dated Attorney-in-Fact
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