EXHIBIT 10.1
Amendment No. 2
to Loan Documents
THIS AMENDMENT NO. 2 TO LOAN DOCUMENTS (this "Amendment") is made as of
July 1, 2001, by and between ITXC CORPORATION (the "Borrower"), and PNC BANK,
NATIONAL ASSOCIATION (the "Bank").
BACKGROUND
A. The Borrower has executed and delivered to the Bank (or a predecessor
which is now known by the Bank's name as set forth above), one or more
promissory notes, letter agreements, loan agreements, security agreements,
mortgages, pledge agreements, collateral assignments, and other agreements,
instruments, certificates and documents, some or all of which are more fully
described on attached Exhibit A, which is made a part of this Amendment
(collectively as amended from time to time, the "Loan Documents") which
evidence or secure some or all of the Borrower's obligations to the Bank for
one or more loans or other extensions of credit (the "Obligations").
B. The Borrower and the Bank desire to amend the Loan Documents as
provided for in this Amendment.
NOW, THEREFORE, in consideration of the mutual covenants herein contained
and intending to be legally bound hereby, the parties hereto agree as follows:
1. Certain of the Loan Documents are amended as set forth in Exhibit A.
Any and all references to any Loan Document in any other Loan Document shall be
deemed to refer to such Loan Document as amended by this Amendment. This
Amendment is deemed incorporated into each of the Loan Documents. Any initially
capitalized terms used in this Amendment without definition shall have the
meanings assigned to those terms in the Loan Documents. To the extent that any
term or provision of this Amendment is or may be inconsistent with any term or
provision in any Loan Document, the terms and provisions of this Amendment
shall control.
2. The Borrower hereby certifies that: (a) all of its representations and
warranties in the Loan Documents, as amended by this Amendment, are, except as
may otherwise be stated in this Amendment: (i) true and correct as of the date
of this Amendment, (ii) ratified and confirmed without condition as if made
anew, and (iii) incorporated into this Amendment by reference, (b) no Event of
Default or event which, with the passage of time or the giving of notice or
both, would constitute an Event of Default, exists under any Loan Document
which will not be cured by the execution and effectiveness of this Amendment,
(c) no consent, approval, order or authorization of, or registration or filing
with, any third party is required in connection with the execution, delivery
and carrying out of this Amendment or, if required, has been obtained, and (d)
this Amendment has been duly authorized, executed and delivered so that it
constitutes the legal, valid and binding obligation of the Borrower,
enforceable in accordance with its terms. The Borrower confirms that the
Obligations remain outstanding without defense, set off, counterclaim, discount
or charge of any kind as of the date of this Amendment.
3. The Borrower hereby confirms that any collateral for the Obligations,
including liens, security interests, mortgages, and pledges granted by the
Borrower or third parties (if applicable),
shall continue unimpaired and in full force and effect, and shall cover and
secure all of the Borrower's existing and future Obligations to the Bank, as
modified by this Amendment.
4. As a condition precedent to the effectiveness of this Amendment, the
Borrower shall comply with the terms and conditions (if any) specified in
Exhibit A.
5. To induce the Bank to enter into this Amendment, Borrower waives and
releases and forever discharges the Bank and its officers, directors,
attorneys, agents, and employees from any liability, damage, claim, loss or
expense of any kind that they may have against the Bank or any of them arising
out of or relating to the Obligations. The Borrower further agrees to indemnify
and hold the Bank and its officers, directors, attorneys, agents and employees
harmless from any loss, damage, judgment, liability or expense (including
attorneys' fees) suffered by or rendered against the Bank or any of them on
account of any claims arising out of or relating to the Obligations. The
Borrower further states that it has carefully read the foregoing release and
indemnity, knows the contents thereof and grants the same as its own free act
and deed.
6. This Amendment may be signed in any number of counterpart copies and
by the parties to this Amendment on separate counterparts, but all such copies
shall constitute one and the same instrument. Delivery of an executed
counterpart of a signature page to this Amendment by facsimile transmission
shall be effective as delivery of a manually executed counterpart. Any party so
executing this Amendment by facsimile transmission shall promptly deliver a
manually executed counterpart, provided that any failure to do so shall not
affect the validity of the counterpart executed by facsimile transmission.
7. This Amendment will be binding upon and inure to the benefit of the
Borrower and the Bank and their respective heirs, executors, administrators,
successors and assigns.
8. This Amendment has been delivered to and accepted by the Bank and will
be deemed to be made in the State where the Bank's office indicated in the Loan
Documents is located. This Amendment will be interpreted and the rights and
liabilities of the parties hereto determined in accordance with the laws of the
State where the Bank's office indicated in the Loan Documents is located,
excluding its conflict of laws rules.
9. Except as amended hereby, the terms and provisions of the Loan
Documents remain unchanged, are and shall remain in full force and effect
unless and until modified or amended in writing in accordance with their terms,
and are hereby ratified and confirmed. Except as expressly provided herein,
this Amendment shall not constitute an amendment, waiver, consent or release
with respect to any provision of any Loan Document, a waiver of any default or
Event of Default under any Loan Document, or a waiver or release of any of the
Bank's rights and remedies (all of which are hereby reserved). The Borrower
expressly ratifies and confirms the confession of judgment (if applicable) and
waiver of jury trial provisions contained in the Loan Documents.
WITNESS the due execution of this Amendment as a document under seal as
of the date first written above.
WITNESS / ATTEST: ITXC CORP.
/s/ Xxxxx X. Xxxxxx By: /s/ Xxxxxx X. Xxxxxx
-------------------------------- --------------------------------
Print Name: Xxxxx X. Xxxxxx Print Name: Xxxxxx X. Xxxxxx
Title: Assistant Secretary Title: CFO/EVP
(Include title only if an officer of
entity signing to the right)
PNC BANK, NATIONAL ASSOCIATION
By: /s/ Xxxxxxx X. Xxxxxxxxx
-----------------------------------
Print Name: Xxxxxxx X. Xxxxxxxxx
Title: Assitant Vice President
EXHIBIT A TO
AMENDMENT NO. 2 TO LOAN DOCUMENTS
DATED July 1, 2001
A. The "Loan Documents" that are the subject of this Amendment include the
following (as any of the foregoing have previously been amended, modified
or otherwise supplemented):
1. Amended and Restated Loan Agreement dated as of February 5, 2000, as
amended by Amendment No. I to Loan Agreement dated as of July 7, 2000
(as amended, the "Loan Agreement").
2. Amended and Restated Promissory Note dated February 5, 2000 (the
"Note").
3. Amended and Restated Borrowing Base Rider dated February 5, 2000.
4. Guaranty Agreement from ITXC Data Transport Services LLC ("Guarantor")
dated February 5,2000.
5. Security Agreement from the Guarantor dated February 5, 2000.
6. Security Agreement from Borrower dated as of August 20, 1998.
7. Rider to Security Agreement - Trademarks dated as of August 20, 1998.
8. All other documents, instruments, agreements, and certificates
executed and delivered in connection with the Loan Documents listed in
this Section A.
B. The Loan Documents are amended as follows:
1. The definitions of "Revolving Credit Expiration Date" and "Equipment
Line Expiration Date", as set forth in Section 2.1 of the Loan
Agreement and Sections 3 and 4 of the Note, are each amended,
effective July 1, 2001, to mean "June 30, 2002, or such later date as
may be designated by the Bank by written notice from the Bank to the
Borrower".
2. The Addendum to the Loan Agreement is hereby amended and restated to
read in full as set forth on the Addendum attached hereto and made a
part hereof.
3. The Note is hereby amended as follows:
(a) Section 4(b) of the Note is amended and restated to read in full
as follows:
"(b) Equipment Line. Accrued interest will be due and payable on
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the 15th day of each month. From and after each respective
Tranche A Conversion Date or Tranche B Conversion Date (as each
is hereinafter defined), advances under the Equipment Line made
during the corresponding Tranche A Borrowing Period or Tranche B
Borrowing Period (as each is hereinafter defined) shall be due
and payable in thirty-six (36) equal consecutive monthly
installments, commencing on the 15th day of the month following
the respective Tranche A Conversion Date or Tranche B Conversion
Date, and
continuing on the 15th day of each month thereafter until paid in
full. Each principal payment shall be in an amount determined by
dividing (i) the principal amount of advances made during the
respective Tranche A Borrowing Period or Tranche B Borrowing
Period and outstanding under the Equipment Line on the respective
Tranche A Conversion Date or Tranche B Conversion Date, by (ii)
thirty-six (36). The outstanding balance of any tranche and any
accrued but unpaid interest thereon shall be due and payable on
the 15th day of the 36th month following the respective Tranche A
Conversion Date or Tranche B Conversion Date, but in no event
later than June 30, 2005.
As used herein, the "Tranche A Conversion Date" shall mean
December 31, 2001; the "Tranche B Conversion Date" shall mean
June 30, 2002; the "Tranche A Borrowing Period" shall mean the
period from July 1, 2001 through and including December 31, 2001;
the "Tranche B Borrowing Period" shall mean the period from
January 1, 2002 through and including June 30, 2002; and the
"Equipment Line Expiration Date" shall mean June 30, 2002, or
such later date as may be designated by the Bank by written
notice from the Bank to the Borrower."
C. Conditions to Effectiveness of Amendment: The Bank's willingness to agree
to the amendments set forth in this Amendment are subject to the prior
satisfaction of the following conditions:
1. Execution and delivery to the Bank of this Amendment No. 2, including
the attached Consent, by all parties.
2. Payment of the fees of the Bank's internal counsel which, as of the
date hereof, equals $750.
CONSENT OF GUARANTOR
Each of the undersigned guarantors (jointly and severally if more than
one, the "Guarantor") consents to the provisions of the foregoing Amendment
(the "Amendment") and all prior amendments (if any) and confirms and agrees
that: (a) the Guarantor's obligations under its Guaranty Agreement dated
February 5, 2000, as amended (collectively if more than one, the "Guaranty"),
relating to the Obligations mentioned in the Amendment, shall be unimpaired by
the Amendment; (b) the Guarantor has no defenses, set offs, counterclaims,
discounts or charges of any kind against the Bank, its officers, directors,
employees, agents or attorneys with respect to the Guaranty; and (c) all of the
terms, conditions and covenants in the Guaranty remain unaltered and in full
force and effect and are hereby ratified and confirmed and apply to the
Obligations, as modified by the Amendment. The Guarantor certifies that all
representations and warranties made in the Guaranty are true and correct.
The Guarantor hereby confirms that any collateral for the Obligations,
including liens, security interests, mortgages, and pledges granted by the
Guarantor or third parties (if applicable), shall continue unimpaired and in
full force and effect, shall cover and secure all of the Guarantor's existing
and future Obligations to the Bank, as modified by this Amendment.
The Guarantor ratifies and confirms the indemnification and waiver of
jury trial provisions contained in the Guaranty.
WITNESS the due execution of this Consent as a document under seal as of
the date of this Amendment, intending to be legally bound hereby.
ITXC DATA TRANSPORT SERVICES LLC
By: /s/ Xxxxxx X. Xxxxxx
---------------------------------
Print Name: Xxxxxx X. Xxxxxx
Title: CFO/EVP
ADDENDUM
ADDENDUM to that certain Loan Agreement dated February 5, 2000, as amended,
between ITXC Corp., as the Borrower, and PNC Bank, National Association.
I. FINANCIAL COVENANTS
1. The Borrower will maintain at all times Tangible Net Worth equal to at
least $100,000,000.
2. The Borrower shall have a minimum Quick Ratio of Current Assets to
Current Liabilities by the end of each fiscal quarter equal to at
least 2.0 to 1.0.
3. The Borrower shall not experience two consecutive quarters of Negative
Net Operating Income from and after the quarter ending March 31, 2002.
4. The Borrower shall maintain a minimum Fixed Charge Coverage Ratio of
1.0: 1.0 at the end of each fiscal quarter, commencing June 30, 2002.
5. The Borrower shall maintain a maximum ratio of total Debt to Tangible
Net Worth at the end of each fiscal quarter of 0.4: 1.0.
Definitions:
"Current Assets" means the sum of cash, accounts receivable and marketable
securities.
"Current Liabilities" means the sum of all current liabilities other than
deferred revenue plus amounts outstanding under the Revolving Credit not
classified as current liabilities.
"Debt" means the maximum combined debt outstanding under the Revolving Credit,
any equipment leases, or any other debt arrangements maturing within one year.
"Fixed Charge Coverage Ratio" means EBITDA plus rent divided by interest plus
principal plus rent.
"Negative Net Operating Income" means earnings before interest, taxes,
depreciation and amortization (or "EBITDA") less than zero calculated in
accordance with generally accepted accounting principles.
"Tangible Net Worth" means shareholders' equity less intangible assets
(calculated in accordance with generally accepted accounting principles), plus
any equity or subordinated and/or convertible debt investments created after
the date of this Agreement.
"Quick Ratio" means Current Assets divided by Current Liabilities.
II. PERMITTED ENCUMBRANCES
1. Purchase money security interests
2. Capital leases permitted under Section 6.1 hereto
III. ENVIRONMENTAL MATTERS
None
