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EXHIBIT 10.26
AMENDMENT NO. 1 TO TERM LOAN AGREEMENT
AMENDMENT NO. 1 TO TERM LOAN AGREEMENT dated as of October
18, 1999 (this "Amendment"), among the Lenders (the "Lenders") listed on the
Initial and Supplemental Signature Pages of the Term Loan Agreement (as
hereinafter defined), LDI Acquisition Sub Inc., a Delaware corporation (the
"Company"), Long Distance International Inc., a Florida corporation (the
"Parent"), Xxxxxxxxx X. XxXxxx, as collateral agent for the Lenders ("XxXxxx"
or the "Collateral Agent"), The Bank of New York, acting not in its individual
capacity, but solely as trustee on behalf of the Holders (as defined below)
(the "Trustee") and World Access, Inc. (the "New Lender").
W I T N E S S E T H:
WHEREAS, the parties hereto, other than the New Lender and
the Trustee, are parties to a Term Loan Agreement dated as of July 20, 1999
(the "Loan Agreement");
WHEREAS, the New Lender desires to make a Term Loan to the
Company in the principal amount of $2,000,000 and has requested that the
Lenders, XxXxxx, the Company and the Parent amend the Loan Agreement, as
provided below:
NOW, THEREFORE, the parties hereto agree as follows:
Section 1. Certain Definitions.
(a) Capitalized terms used in this Agreement without
definition shall have the meanings set forth in the Loan Agreement.
Section 2. Amendment.
(a) Section 2 of the Loan Agreement is hereby amended by
adding the following to the end thereof:
", subject to the terms of the letter
agreement between XxXxxx, the New Lender, the Parent and the
Company. Pursuant to Section 5 of that certain letter
agreement dated as of November ___, 1999 among XxXxxx, the
Parent, the Company, the New Lender and the beneficial owners
(the "Holders") of the Notes (as defined in that certain
indenture dated as of April 13, 1998 (the "Indenture")
between the Parent and the Trustee), the Trustee shall act on
behalf of the Holders who shall be entitled to all of the
rights and privileges of a Lender hereunder (including,
without limitation, the Holders' entitlement to a pro rata
share of the Pledged Collateral on a basis pari passu with
all other Lenders hereunder), but in no event shall the
Trustee be deemed to have assumed the Holders' duties and
obligations hereunder (including, without limitation, the
Lenders' duties to indemnify the Collateral Agent under
Section 12(e) of this Agreement)."
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(b) Section 5(a) of the Loan Agreement is hereby amended by
adding the words "Subject to the terms of the letter agreement dated October
19, 1999 between XxXxxx and the New Lender, a copy of which is attached as
Exhibit A to this Amendment (the "New Lender Agreement") and Section 5(f) of
this Agreement" following the heading of Section 5(a).
(c) Section 5(b) of the Loan Agreement is hereby amended by
adding the words ", Section 5(f) and the New Lender Agreement," following the
words "Subject to Section 5(c)" in the first line of such Section. Subsection
5(b) is further amended by adding the following words after the last sentence
thereof: "Notwithstanding anything herein to the contrary, following any
written notice by the Company or any other election by the Company to prepay
any Term Loan or portion thereof, XxXxxx or the New Lender may elect, by
written notice to the Company, not to have his or its Term Loan prepaid, in
which event the Company shall have no right to prepay and XxXxxx or the New
Lender shall have no obligation to accept prepayment of his or its Term Loan or
any portion thereof pursuant to this Section. Any prepayment by the Company of
the Term Loan held by XxXxxx which is made pursuant to the New Lender Agreement
at XxXxxx'x election shall be exempt from any prepayment premium. Such
exemption shall not apply if the Company elects to prepay the Term Loan held by
XxXxxx pursuant to the Term Loan Agreement and XxXxxx has not previously
elected to have his Term Loan prepaid. Any prepayment by the Company of a Term
Loan held by a Lender other than XxXxxx which is made in connection with a
Transaction (as defined in the New Lender Agreement) or additional financing
provided by World Access (as defined in the New Lender Agreement) shall be
exempt from any prepayment premium.
(d) Section 5(c) of the Loan Agreement is hereby amended by
adding the words "Subject to the provisions hereof and the New Lender
Agreement" after the heading of Section 5(c).
(e) Section 5(e) of the Loan Agreement is hereby amended by
adding the words "Subject to the New Lender Agreement and Section 5(f) of this
Agreement," following the heading of Section 5(e). Section 5(e) is further
amended by adding the following words after the last sentence thereof:
"Notwithstanding anything herein to the contrary, XxXxxx shall have no
obligation to share with any of the other Lenders, and may retain for himself,
any payment received by him or to which he may become entitled pursuant to the
New Lender Agreement, including any payment from the New Lender or the Company,
and shall have no obligation to share and shall be entitled to retain for
himself any and all shares of the equity securities of the New Lender (or its
affiliates) which he shall receive or to which he shall become entitled
following exercise of the election described in Paragraph 2 of the New Lender
Agreement."
(f) Section 5 of the Loan Agreement is hereby amended by
adding the following section after Section 5(e) thereof:
"(f) Notwithstanding anything herein to the
contrary, nothing in this Agreement shall supercede or impair
the rights of XxXxxx, pursuant to the New Lender Agreement,
(i) to elect not to have his Term Loan repaid prior to the
initial maturity date thereof, (ii) to elect at any time
after the signing of an Agreement relating to a Transaction
as described in paragraph 1 of the New Lender Agreement that
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the New Lender (or its affiliates) shall either cause the
Company to pay, or shall pay directly, all outstanding
indebtedness on XxXxxx'x Term Loan (including accrued
interest) in accordance with Paragraph 1 of the New Lender
Agreement, (iii) to convert his Term Loan into stock of the
New Lender or its affiliates in accordance with Paragraphs
2-3 of the New Lender Agreement; and (iv) to make the
elections, enforce the rights, and retain for himself the
payments and stock of the New Lender (or its affiliates)
pursuant to Paragraphs 2-3 of the New Lender Agreement."
(g) Section 9(b) of the Loan Agreement is hereby amended by
inserting at the beginning of clause (ii), the words "subject to the provisions
of Section 12(i),". Section 9(b) of the Loan Agreement is further amended by
adding the following at the end thereof:
"Notwithstanding the foregoing, from and after the
earlier of November 30, 1999 or the filing of any petition
under the Bankruptcy Code by or against Borrower, any Lender
may individually take the actions set forth in clauses (i)
and (ii) above, subject to Section 12(i)."
(h) Section 10 is hereby amended adding, following subsection
(vi) thereof, the following words:
"(vii) in any way affect or impair the rights of
XxXxxx pursuant to the New Lender Agreement."
(i) Section 12 of the Loan Agreement is hereby amended by
adding, following subsection (i) hereof, the following words:
"(j) Notwithstanding anything herein to the
contrary, XxXxxx shall have no liability or obligation,
fiduciary, contractual or otherwise, to any of the other
Lenders or New Lender, by reason of any action or omission
relating to the perfection or failure to perfect security
interests or otherwise relating to his duties as Collateral
Agent prior to the effective date of Amendment No. 1 to this
Agreement, dated as of October 18, 1999 among the Lenders,
the Company, the Parent, XxXxxx, the New Lender and the
Trustee."
(j) Section 13 of the Loan Agreement is hereby amended by
adding the following section after Section 13(g) thereof:
"(h) Limitation of Liability. It is expressly
understood and agreed by the parties hereto that (i) this
Agreement and any amendments hereto are executed and
delivered by The Bank of New York, not individually or
personally but solely as Trustee under the Indenture, in the
exercise of the powers and authority conferred and vested in
it, (ii) nothing herein contained shall be construed as
creating any liability on The Bank of New York, individually
or personally, to perform any covenant either expressed or
implied contained herein, all such liability, if any, being
expressly waived by the parties who are signatories to this
Agreement and any amendments hereto and by any Person
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claiming by, through or under such parties, and (iii) under
no circumstances shall The Bank of New York be personally
liable for the payment of any expenses or advance, risk or
expend its own funds or otherwise incur any financial
liability or be liable for the breach or failure of any
obligation, representation, warranty or covenant made or
undertaken by the parties to this Agreement and any
supplement, modification or amendment hereto."
Section 3. Use of Proceeds.
(a) The Company agrees that the proceeds of loans
made hereunder shall be used solely in accordance with a budget to be prepared
by the Company in connection with additional loans to be made under the Term
Loan Agreement by certain holders of the Parent's 12.25% Senior Notes due 2008,
which budget shall be acceptable to such holders and the New Lender.
Section 4. Miscellaneous.
(a) Ratification. Except as expressly amended hereby,
all of the terms, provisions and conditions of the Loan Agreement are hereby
ratified and confirmed in all respects by each party hereto and, except as
expressly amended hereby, are, and hereafter shall continue, in full force and
effect.
(b) Successors and Assigns. This Amendment shall be
binding upon each party hereto and shall inure to the benefit of the Lender and
all future holders of any Note and their respective successors and assigns.
(c) Governing Law. This Amendment and the rights and
obligations of the parties hereunder shall be construed in accordance with and
be governed by the law (without giving effect to the conflict of law principles
thereof) of the State of New York.
(d) Jury Trial Waiver. THE PARTIES HERETO HEREBY
IRREVOCABLY WAIVE TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING WITH RESPECT
TO THIS AMENDMENT OR ANY DOCUMENT RELATED HERETO.
(e) Counterparts. This Amendment may be executed in
two or more counterparts, each of which shall be deemed an original and all of
which together shall constitute one and the same instrument.
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IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be duly executed and delivered, all as of the date first above
written.
LDI ACQUISITION SUB INC.
By: /s/ Xxxxx X. Xxxx
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Name: Xxxxx X. Xxxx
Title: CEO
LONG DISTANCE INTERNATIONAL INC.
By: /s/ Xxxxx X. Xxxx
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Name: Xxxxx X. Xxxx
Title: CEO
WORLD ACCESS, INC.
By:/s/ W. Xxx Xxxxx
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Name: W. Xxx Xxxxx
Title: E.V.P.
/s/ Xxxxxxxxx X. XxXxxx
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Xxxxxxxxx X. XxXxxx, as
Lender and Collateral Agent
THE BANK OF NEW YORK, not in its
individual capacity, but solely as Trustee
By: /s/ Xxxxxxx X. Xxx
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Name: Xxxxxxx X. Xxx
Title: Assistant Vice President
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