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Exhibit 10.14
WAIVER AND AMENDMENT NO. 2
TO
LOAN AND SECURITY AGREEMENT
THIS WAIVER AND AMENDMENT NO. 2 ("Amendment") is entered into as of
October 30, 1998, by and among Let's Talk Cellular & Wireless, Inc., a
corporation organized under the laws of the State of Florida ("LTC"), Telephone
Warehouse, Inc., a corporation organized under the laws of the State of Delaware
("TWI"), Cellular Warehouse Inc., a corporation organized under the laws of the
State of Georgia ("CWI"), Cellular USA, a corporation organized under the laws
of the State of Nevada ("USA"), Xxxxxxx Enterprises, Inc., a corporation
organized under the laws of the State of Georgia ("SEI") and National Cellular
Incorporated, a corporation organized under the laws of the State of Texas
("NCI") ("LTC, TWI, CWI, USA, SEI and NCI, each a "Borrower" and jointly and
severally, the "Borrowers"), the undersigned financial institutions (each, a
"Lender" and collectively, the "Lenders") and The Chase Manhattan Bank, a
corporation organized under the laws of the State of New York ("Chase") as agent
for Lenders (Chase in such capacity, the "Agent").
BACKGROUND
Borrowers, Agent and Lenders are parties to a Loan and Security
Agreement dated as of April 2, 1998 (as amended, restated, supplemented or
otherwise modified from time to time, the "Loan Agreement"), pursuant to which
Agent and Lenders provide Borrowers with certain financial accommodations.
Borrowers have requested that Agent and Lenders waive certain financial
covenant defaults that have occurred and amend certain provisions of the Loan
Agreement and Agent and Lenders are willing to do so on the terms and conditions
hereafter set forth.
NOW, THEREFORE, in consideration of any loan or advance or grant of
credit heretofore or hereafter made to or for the account of Borrowers by Agent
and Lenders, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto hereby agree as
follows:
1. DEFINITIONS. All capitalized terms not otherwise defined herein
shall have the meanings given to them in the Loan Agreement.
2. WAIVER. Subject to satisfaction of the conditions precedent set
forth in Section 4 below, Agent and Lenders hereby waive the Events of Default
which have occurred as a result of Borrowers' non-compliance with (a) Section
7.6 of the Loan Agreement for Fiscal Year 1998 to the extent Capital
Expenditures made during such year were no more than $7,375,000, (b) Section
7.20(i) of the Loan Agreement to the extent EBITDA at the end of the fiscal
quarter ended July 31, 1998 with respect to the immediately preceding two fiscal
quarter period was no less than
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$4,675,000 and (c) Section 7.22(i) of the Loan Agreement to the extent the
Interest Coverage Ratio at the end of the fiscal quarter ended July 31, 1998
with respect to the immediately preceding two fiscal quarter period was no less
than 0.30 to 1.00, but, in each case, only to the extent the non-compliance with
such Sections occurred prior to such periods.
3. AMENDMENTS TO LOAN AGREEMENT. Subject to satisfaction of the
conditions precedent set forth in Section 4 below, the Loan Agreement is hereby
amended as follows:
(a) Section 1.2 of the Loan Agreement is amended as follows:
(i) the definition of "Earnings Before Interest and Taxes" is hereby
amended in its entirety to read as follows:
"EARNINGS BEFORE INTEREST AND TAXES" shall mean for
any period the sum of (i) net income or loss of Borrowers on a
Consolidated Basis for such period (exclusive of any
extraordinary gains or losses or any gains or losses from the
sale or disposition of assets other than in the ordinary
course of Borrower's business), PLUS (ii) all interest expense
of Borrowers on a Consolidated Basis for such period, PLUS
(iii) all charges against the income of Borrowers on a
Consolidated Basis for such period for federal, state and
local taxes.
(ii) the following defined terms are added in their appropriate
alphabetical order:
"AMENDMENT NO. 2" shall mean Amendment No. 2 to this Agreement
dated as of October 30, 1998.
"AMENDMENT NO. 2 EFFECTIVE DATE" shall mean the date on which
all of the conditions precedent contained in Section 4 of Amendment No.
2 shall have been satisfied.
(b) Section 7.20(ii) of the Loan Agreement is amended in its
entirety to provide as follows:
"(ii) the fiscal quarter ended October 31, 1998 with respect
to the immediately preceding three fiscal quarter period (ending on the
last day of such fiscal quarter) to be less than $6,200,000."
(c) Section 7.22(ii) of the Loan Agreement is deleted in its
entirety.
(d) A new Section 7.24 is hereby added to the Loan Agreement
and shall read as follows:
"7.24 COVENANT CALCULATIONS. For the purposes of calculating
compliance with the requirements of Sections 7.19, 7.20, 7.21 and 7.22
for the fiscal quarters ended July 31,
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1998, October 31, 1998, January 31, 1999 and April 30, 1999, CWI's
EBITDA for the months of Februray, 1998 and March, 1998 shall be
included in such calculation."
4. CONDITIONS OF EFFECTIVENESS. This Amendment shall become effective
upon satisfaction of the following conditions precedent: Agent shall have
received (i) four (4) copies of this Amendment executed by each Borrower and
each Lender, (ii) the fees set forth in the Fee Letter dated the date hereof and
all legal fees and (iii) such other certificates, instruments, documents,
agreements and opinions of counsel as may be required by Agent, Lenders or their
counsel, each of which shall be in form and substance satisfactory to Agent,
Lenders and their counsel.
5. REPRESENTATIONS AND WARRANTIES. Borrowers hereby represent and
warrant as follows:
(a) This Amendment and the Loan Agreement, as amended
hereby, constitute legal, valid and binding obligations of
Borrowers and are enforceable against Borrowers in accordance
with their respective terms.
(b) Upon the effectiveness of this Amendment,
Borrowers hereby reaffirm all covenants, representations and
warranties made in the Loan Agreement to the extent the same
are not amended hereby and agree that all such covenants,
representations and warranties shall be deemed to have been
remade as of the effective date of this Amendment.
(c) No Event of Default or Default has occurred and
is continuing or would exist after giving effect to this
Amendment.
(d) Borrowers have no defense, counterclaim or offset
with respect to the Loan Agreement.
6. EFFECT ON THE LOAN AGREEMENT.
(a) Upon the effectiveness of this Amendment, each reference
in the Loan Agreement to "this Agreement," "hereunder," "hereof," "herein" or
words of like import shall mean and be a reference to the Loan Agreement as
amended hereby.
(b) Except as specifically amended herein, the Loan Agreement,
and all other documents, instruments and agreements executed and/or delivered in
connection therewith, shall remain in full force and effect, and are hereby
ratified and confirmed.
(c) The execution, delivery and effectiveness of this
Amendment shall not, except as expressly provided in Section 2, operate as a
waiver of any right, power or remedy of Lender, nor constitute a waiver of any
provision of the Loan Agreement, or any other documents, instruments or
agreements executed and/or delivered under or in connection therewith.
7. GOVERNING LAW. This Amendment shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and assigns and
shall be governed by and construed in accordance with the laws of the State of
New York.
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8. HEADINGS. Section headings in this Amendment are included herein for
convenience of reference only and shall not constitute a part of this Amendment
for any other purpose.
9. COUNTERPARTS. This Amendment may be executed by the parties hereto
in one or more counterparts, each of which shall be deemed an original and all
of which when taken together shall constitute one and the same agreement.
IN WITNESS WHEREOF, this Amendment has been duly executed as of the day
and year first written above.
LET'S TALK CELLULAR & WIRELESS, INC.
By: /s/ Xxxxx Xxxxxxxxx
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Name: Xxxxx Xxxxxxxxx
Title: President
TELEPHONE WAREHOUSE, INC.
By: /s/ Xxxxx Xxxxxxxxx
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Name: Xxxxx Xxxxxxxxx
Title: Vice President
CELLULAR WAREHOUSE, INC.
By: /s/ Xxxxx Xxxxxxxxx
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Name: Xxxxx Xxxxxxxxx
Title: Vice President
NATIONAL CELLULAR INCORPORATED
By: /s/ Xxxxx Xxxxxxxxx
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Name: Xxxxx Xxxxxxxxx
Title: Vice President
CELLULAR USA
By: /s/ Xxxxx Xxxxxxxxx
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Name: Xxxxx Xxxxxxxxx
Title: President
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XXXXXXX ENTERPRISES, INC.
By: /s/ Xxxxx Xxxxxxxxx
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Name: Xxxxx Xxxxxxxxx
Title: Vice President
THE CHASE MANHATTAN BANK, as Agent and a Lender
By: /s/ Xxxxx X. Xxxx
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Name: Xxxxx X. Xxxx
Title: Vice President
Commitment Percentage: 25%
BANK OF AMERICA, FSB, Lender
By: /s/ Xxxx Xxxxxxxxxx
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Name: Xxxx Xxxxxxxxxx
Title: Vice President
Commitment Percentage: 25%
IBJ XXXXXXXX BANK & TRUST COMPANY, Lender
By: /s/ Xxxxxxxx X. XxXxxxxxx
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Name: Xxxxxxxx X. XxXxxxxxx
Title: Director
Commitment Percentage: 25%
XXXXXXX XXXXX BUSINESS FINANCIAL SERVICES, Lender
By: /s/ Xxxx X. Xxxxxxx
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Name: Xxxx X. Xxxxxxx
Title: Assistant Vice President
Commitment Percentage: 25%
