1
EXHIBIT 10.25
SECOND AMENDMENT TO
CREDIT AND SECURITY AGREEMENT
THIS SECOND AMENDMENT TO CREDIT AND SECURITY AGREEMENT (this
"AMENDMENT"), dated as of September 30, 2001, is made by and among PENTASTAR
COMMUNICATIONS, INC., a Delaware corporation, PENTASTAR ACQUISITION CORP. I, a
Delaware corporation, PENTASTAR ACQUISITION CORP. II, a Delaware corporation,
PENTASTAR ACQUISITION CORP. III, a Delaware corporation, PENTASTAR ACQUISITION
CORP. IV, a Delaware corporation, PENTASTAR ACQUISITION CORP. VI, a Delaware
corporation, PENTASTAR INTERNET, INC., a Delaware corporation, PENTASTAR HOLDING
CORPORATION, a Delaware corporation, PENTASTAR TELEMARKETING, INC., a Delaware
corporation, PENTASTAR CORPORATION, a Colorado corporation, PENTASTAR
ACQUISITION CORP. V, a Delaware corporation, PENTASTAR ACQUISITION CORP. VII, a
Delaware corporation, PENTASTAR ACQUISITION CORP. VIII, a Delaware corporation,
and PENTASTAR ACQUISITION CORP. IX, a Delaware corporation (collectively, the
foregoing are the "BORROWERS"), and XXXXX FARGO BANK, N.A., a national banking
association (as successor by assignment to Xxxxx Fargo Bank West, N.A., the
"LENDER"). Capitalized terms used and not otherwise defined herein shall have
the meanings ascribed thereto in the Agreement, as defined below.
RECITALS
A. The Borrowers and the Lender are parties to that certain
Credit and Security Agreement, dated as of July 10, 2000 (the "ORIGINAL
AGREEMENT"), as amended by that certain First Amendment to Credit and Security
Agreement (the "FIRST AMENDMENT" and together with the Original Agreement, the
"AGREEMENT"), dated as of August 30, 2001.
B. The parties wish to amend the Agreement as more
particularly described below.
AGREEMENT
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Borrowers and the Lender
hereby agree as follows:
1. Upon the terms and subject to the conditions set forth in this
Amendment, the Agreement is hereby amended as follows:
(a) The following new defined terms are hereby added to the
Agreement:
"Borrowing Base Deficit Amount" means an amount equal to the
Maximum Line as of September 30, 2001 less 75% of Eligible Accounts as
of
1
2
September 30, 2001. The Borrowing Base Deficit Amount shall be a static
number to be determined as of September 30, 2001, and shall remain
unchanged thereafter.
"Borrowing Base Reconciliation Report" means the Borrowing
Base Reconciliation Report, a form of which is set forth in Exhibit D
hereto.
"Capital Expenditures" for a period means any expenditure of
money for the lease, purchase or other acquisition of any capital
asset, or for the lease of any other asset whether payable currently or
in the future, and whether or not capitalized on the Borrowers' balance
sheet, including without limitation those costs arising in connection
with any lease of property by any Borrower that, in accordance with
GAAP, should be reflected as a capital lease on the balance sheet of
such Borrower and excluding any lease of property by any Borrower that,
in accordance with GAAP, is not required to be reflected as a capital
lease on any Borrower's balance sheet (an "Operating Lease") to the
extent that any such Operating Lease was included in the calculation of
EBITDA.
"Fixed Charges" means, for any fiscal quarter of Borrowers,
the sum of (i) the lesser of (x) actual Capital Expenditures incurred
by all Borrowers during such quarter and (y) the projected Capital
Expenditures for such quarter as set forth in Schedule 7.15 and (ii)
Quarterly Interest Expense for all Borrowers for such quarter.
"Four Party Collection Agreement" means the Four Party Lockbox
Agreement by and among the Borrowers, the Lender (in its capacity as
the secured party), the Lender (in its capacity as the holder of the
Lockbox) and Regulus West LLC, dated as of September 30, 2001.
"Lockbox" has the meaning given in the Four Party Collection
Agreement.
"Permanent Repayment" means a permanent repayment or
prepayment by any Borrower of any or all of the outstanding Advances,
the amount of which repayment or prepayment shall no longer be
available for re-borrowing and shall permanently reduce the Maximum
Line.
"Prime Rate" means the interest rate publicly announced or
published from time to time as the prime rate of the Lender and may not
be the lowest interest rate charged by the Lender.
"Quarterly Cash Flow" means (i) for the fiscal quarter ended
September 30, 2001, Parent's consolidated EBITDA for such quarter less
Fixed Charges for such quarter and (ii) for the period ended December
31, 2001, Parent's consolidated EBITDA for the two quarters ending on
December 31, 2001 less Fixed Charges for such two quarters.
2
3
"Quarterly Interest Expense" means, for any fiscal quarter of
Borrowers, the Borrowers' total gross cash interest actually paid on
all Debt, during such period (less cash interest income).
"Restricted Account" has the meaning given in the Four Party
Collection Agreement.
"Seller Note" means that certain Promissory Note in the
principal amount of $500,000 made by Xxx.xxx, Inc. and payable to
Parent.
"Third-Party Investors" means any Person other than the
Borrowers or any Subsidiary.
(b) The definition of "Borrowing Base" is hereby deleted in its
entirety and substituting therefor the following:
"Borrowing Base" means an amount to be reported to Lender as
soon as available, but no later than the 25th day of each month for the
end of the preceding month, such amount to equal at any time the lesser
of:
(a) the Maximum Line; or
(b) 75% of Eligible Accounts.
(c) The definition of "Collateral" is deleted in its entirety and
substituted therefor is the following:
"Collateral" means all of each Borrower's Equipment, General
Intangibles, Inventory, Receivables (including, without limitation, all
sums due to Parent under the Seller Note, all sums on deposit in the
Restricted Account, all Accounts and any items in any Lockbox),
Investment Property, all payment intangibles, instruments (including
without limitation, the Seller Note), documents, chattel paper, deposit
accounts (including without limitation, the Restricted Account), and
letter-of-credit rights (as such terms are defined in the UCC);
together with (i) all substitutions and replacements for and products
of any of the foregoing; (ii) proceeds of any and all of the foregoing;
(iii) in the case of all tangible goods, all accessions; and (iv) all
accessories, attachments, parts, equipment and repairs now or hereafter
attached or affixed to or used in connection with any tangible goods
whether now owned or hereafter acquired.
(d) The definition of "Eligible Accounts" is hereby amended as follows:
(i) by changing the reference from "Net Accounts" in the first
sentence thereof to "Accounts";
3
4
(ii) by deleting subparagraph (i) in its entirety and
substituting therefor the following:
(i) that portion of any Account (a) relating to which
the Account debtor is refusing to pay or is asserting is not
due and payable or (b) subject to a claim of offset or a
contra account; including without limitation, all amounts
carried on any Borrower's balance sheet as deferred revenue
with respect to such Account;
(iii) by deleting subparagraph (v) in its entirety and
substituting therefor the following:
(v) accounts owed by either (a) an account debtor or
(b) an end-user to an account debtor, in which case either the
account debtor or the end-user is insolvent, the subject of
bankruptcy proceedings or has gone out of business; provided
that in the case of clause (b) only, such exclusion shall not
apply to the extent of any Accounts (x) that are in existence
on September 30, 2001 and with respect to which the end user
is insolvent, the subject of bankruptcy proceedings or has
gone out of business as of September 30, 2001; or (y) with
respect to which Lender determines in its reasonable judgement
that no contract relating to such account allows the account
debtor to require the repayment or return of any previously
received payments as a result of such insolvency, bankruptcy
or cessation of business;
(iv) by deleting the "and" from the end of subparagraph (xi)
and substituting therefor a semicolon, by deleting the period from the
end of subparagraph (xii) and substituting therefor ";"; and
(v) by deleting subparagraph (xii) in its entirety and
substituting therefor the following:
(xii) Accounts, or portions thereof, otherwise deemed
ineligible by the Lender in its reasonable discretion;
provided, however, that Lender's reasonable determination that
an Account is ineligible under this clause (xii) must be:
(a) based upon information not provided to
the Lender before the Effective Date;
(b) not primarily based upon the aging of
the Account, except that this clause (b) shall not be
applicable unless in Lender's reasonable judgment
Borrowers have complied with all of Lender's
reasonable requests for information with respect to
any such Account; and
4
5
(c) based upon collection issues related to
such Account that differ materially from the
collection issues experienced by the Borrowers with
respect to such Accounts prior to the Effective Date;
provided, further, that upon Lender's reasonable
request, Borrowers shall advise as to whether, in
Borrowers reasonable judgment, the conditions set
forth in clauses (a) and (c) above are applicable.
(vi) by adding a new subparagraph (xiii) as follows:
(xiii) that portion of Accounts unpaid 270 days or
more after the invoice date.
(e) The definition of "Maturity Date" is deleted in its entirety and
substituted therefor is the following:
"Maturity Date" means April 15, 2002, or such earlier date on
which the Obligations shall have been accelerated in
accordance with the terms hereof.
(f) The definition of "Maximum Line" is amended by adding the words "or
Section 2.7" after the words "or Section 2.6."
(g) The definition of "Net Accounts" is deleted in its entirety.
(h) The definition of "Permitted Acquisition" is deleted in its
entirety.
(i) Section 2.1 of the Agreement is amended as follows:
(i) by deleting the second sentence in its entirety and
substituting therefor the following:
The Lender shall have no obligation to make an
Advance if, after giving effect to such requested Advance, the
sum of the outstanding and unpaid Advances, less the Borrowing
Base Deficit Amount, would exceed the Borrowing Base.
(ii) by adding the following sentence after the end of the
third sentence:
Within the limits set forth in this Section 2.1 and Section
2.7(a), the Borrowers may borrow and prepay pursuant to Section 2.6 and
re-borrow, except as is otherwise provided herein.
5
6
(j) Section 2.2(a) is deleted in its entirety and substituted therefor
is the following:
(a) INTEREST. Subject to Section 2.2(b), the outstanding
principal balance of the Note shall bear interest at the Prime Rate
plus 3.00% (or otherwise as set forth in the Note), and such interest
shall be due and payable, as set forth in the Note. All interest due
and payable under the Note shall be debited from the Borrowers'
account.
(k) Section 2.3(b) of the Agreement is deleted in its entirety and
substituted therefor is the following:
(b) [Intentionally Omitted].
(l) Section 2.7 of the Agreement is deleted in its entirety and
substituted therefor is the following:
Section 2.7 Mandatory Prepayment. Without notice or demand,
Borrowers shall make a mandatory prepayment of the Advances in the
following circumstances:
(a) if the Borrowing Base Reconciliation Report required to be
provided pursuant to the terms of Section 6.1(o) demonstrates that the
outstanding principal balance of the Advances less the Borrowing Base
Deficit Amount shall at any time exceed the Borrowing Base, the
Borrowers shall immediately prepay the Advances to the extent necessary
to eliminate such excess; provided, however, that to the extent the
Borrowing Base Reconciliation Report required to be provided pursuant
to the terms of Section 6.1(o) demonstrates that the outstanding
principal balance of the Advances less the Borrowing Base Deficit
Amount is less than the Borrowing Base, the Borrowers shall be
permitted to request additional Advances in accordance with the
provisions of Section 2.1; provided that to the extent that a mandatory
prepayment is required under this clause (a) as a result of any Account
or Accounts being deemed ineligible under clause (xii) of the
definition of Eligible Accounts, Borrowers shall have 15 days from the
date that any Borrower receives notice from Lender that such Account or
Accounts have been declared ineligible to make the mandatory prepayment
required in connection therewith;
(b) on November 30, 2001, Borrowers shall prepay the Advances
in an amount equal to $50,000, and such $50,000 shall constitute a
Permanent Repayment;
(c) as required pursuant to Section 6.16 herein, with any such
pre-payment constituting a Permanent Repayment;
6
7
(d) upon the occurrence of any transaction or series of
transactions pursuant to which a third party or a group of third
parties acting in concert (excluding the shareholders of any Borrower)
acquires (i) at least 50% of the fully diluted common stock of any
Borrower, whether through purchase, merger, consolidation or otherwise
or (ii) at least 50% of any Borrower's operating assets, based on fair
market value as a going concern, which payment shall constitute a
Permanent Repayment and must be a prepayment of all outstanding
Advances; and
(e) immediately upon any Borrower's receipt, 80% of all
amounts paid and collected in connection with the Seller Note, which
payment shall constitute a Permanent Repayment.
Any payment received by the Lender under this Section 2.7 or under
Section 2.6 may be applied to the Obligations, in such order and in
such amounts as the Lender, in its reasonable discretion, may from time
to time determine.
(m) Section 2.9 of the Agreement is deleted in its entirety and
substituted therefor is the following:
Section 2.9 Use of Proceeds. The Borrowers shall use the
proceeds of Advances to finance purchases of fixed assets and for
ordinary working capital purposes.
(n) Section 3.2 of the Agreement is deleted in its entirety and
substituted therefor is the following:
Section 3.2 Notification of Account Debtors and Other
Obligors; Power of Attorney.
(a) Upon the occurrence of an Event of Default, the Lender may
at any time (whether or not a Default or Event of Default then exists)
notify any account debtor or other person obligated to pay the amount
due that such right to payment has been assigned or transferred to the
Lender for security and shall be paid directly to the Lender. The
Borrowers will join in giving such notice if the Lender so requests.
(b) Borrowers hereby irrevocably appoint Lender as Borrowers'
attorney-in-fact and proxy, with full authority in the place and stead
of Borrowers and in the name of Borrowers or otherwise, in Lender's
discretion, at any time upon the occurrence and during the continuance
of an Event of Default, to take any action and to execute any
instrument that Lender may deem necessary or advisable to accomplish
the purposes of this Agreement, including without limitation (i) to
obtain and adjust insurance required to be paid to Lender under the
Loan Documents, (ii) to demand, xxx for, collect or receive any money
or property at any time payable or receivable on account of, or
securing, any such
7
8
right to payment, or to waive, modify, amend or change the obligations
(including collateral obligations) of any such account debtor or other
obligor; (iii) as each Borrower's agent and attorney-in-fact, notify
the United States Postal Service to change the address for delivery of
each Borrower's mail to any address designated by the Lender, otherwise
intercept each Borrower's mail, and receive, open and dispose of each
Borrower's mail, applying all Collateral as permitted under this
Agreement and holding all other mail for each Borrower's account or
forwarding such mail to each Borrower's last known address, (iv) to
receive, endorse and collect any drafts or other instruments, documents
and chattel paper in connection with clause (i), (ii) or clause (iii)
above, (v) to file any claims or take any action or institute any
proceedings that Lender may deem necessary or desirable for the
collection of any of the Collateral or otherwise to enforce the rights
of Lender with respect to any of the Collateral, and (vi) to execute
and file one or more financing or continuation statements, and
amendments thereto, relating to the Collateral. Such appointment is
coupled with an interest and shall be irrevocable from the date hereof
and so long as any part of the Obligations are outstanding.
(o) Section 5.5 of the Agreement is amended by adding the following
sentence at the end of such Section:
As of September 28, 2001, the Borrowers' accounts receivable
reserve, as determined by its auditors, is $730,000. Since July 31,
2001, there has been no material adverse change with respect to the
Borrowers' accounts receivable reserve as determined in accordance with
GAAP and reviewed by Borrowers' auditors from time to time.
(p) Section 6.1 of the Agreement is amended as follows:
(i) subparagraph (d) is deleted in its entirety and
substituted therefor is the following:
(d) as soon as available but no later than the 25th
day of each month, or more frequently if the Lender so
reasonably requires, agings of the Parent's consolidated
Receivables (broken down by Borrower), a calculation of each
Borrower's Accounts, and a calculation of the aggregate
Eligible Accounts of all Borrowers (or if Lender reasonably
requests, a calculation of Eligible Accounts broken down by
each Borrower), all as at the end of such previous month or
shorter time period, based upon all information available to
any Borrower as of such date, and all with such detail as
Lender reasonably requests;
(ii) by deleting the word "and" from the end of subparagraph
(n);
(iii) by deleting subparagraph (o) in its entirety and
substituting therefor the following:
8
9
(o) (i) as soon as available, but no later than the
25th day of each month, a Borrowing Base Reconciliation Report
relating to the prior month; and (ii) until such time as
Borrowers provide the Lender with written certification by the
Parent's Chief Financial Officer in form and substance
satisfactory to Lender that more than 95% of all account
debtors of the Borrowers are remitting their Accounts to the
Lockbox, a weekly report to be delivered no later than Monday
of each week detailing cash collections broken down by each
account debtor for the previous week; and
(iv) by adding the following subparagraphs:
(p) as soon as available, but no later than 45 days
after the end of each fiscal quarter, a quarterly report that
details results on a monthly basis for revenues, expenses,
EBIDTA, net income and net cash flow for all Borrowers for
such quarter, together with a report setting forth Quarterly
Cash Flow for the period to which such quarter relates;
(q) no later than the first day of each month, (i) a
weekly cash flow forecast covering such month through the
following month, in form and substance reasonably satisfactory
to Lender, and (ii) a reconciliation of actual cash flows for
the previous two months as against the forecast for such two
months;
(r) as soon as available, but no later than 45 days
after the end of each quarter, a profitability analysis that
details Borrowers' fixed costs (including but not limited to
lease expense, utilities, wages, taxes), variable costs and
total revenue for such quarter;
(s) promptly upon any Borrower's knowledge or receipt
thereof (i) notice and a copy of any and all written reports
received by any of the Borrowers' auditors or accountants,
including, without limitation, any negative report that is
issued by any such auditor or accountant relating to the
Borrowers' accounts receivable and any reports relating to any
material adverse change with respect to, or any material
inadequacy with respect to, the Borrowers' accounts receivable
reserve, and (ii) notice of any material adverse change with
respect to, or any material inadequacy with respect to, the
Borrowers' accounts receivable reserve;
(t) prompt notification in writing in the event that
35% or more of the total amount due under Accounts from any
one account debtor remains unpaid 270 days or more after the
invoice date, such written notification to set forth a
detailed explanation of the reason for such delinquencies and
the measures Borrowers are taking to cure such delinquencies;
and
9
10
(u) promptly upon Borrowers' knowledge thereof,
notice of the cancellation of any contract between any
Borrower and any one of Qwest, Verizon and Ameritech.
(v) each Borrower shall provide Lender with all
"Required Information" (as such term is defined in the First
Amendment to this Agreement) as of January 31, 2002, no later
than 12:00 noon MDT on February 25, 2002, together with a
written representation stating whether or not all such
Required Information has in fact been provided. The Borrowers'
failure or inability to provide all such Required Information,
or Borrowers' failure to make the above written
representation, by such time and date shall constitute an
Event of Default two days after Lender notifies Borrowers to
such effect. All such Required Information will be provided on
a spreadsheet, in electronic format (Microsoft Excel
spreadsheet) and a paper format. The Required Information will
be provided to the extent it exists and on a "Line Item"
basis.
(q) Section 6.11 of the Agreement is deleted in its entirety and
substituted therefor is the following:
Section 6.11 [Intentionally Omitted]
(r) Section 6.12 of the Agreement is deleted in its entirety and
substituted therefor is the following:
Section 6.12 [Intentionally Omitted]
(s) Section 6.15 is deleted in its entirety and substituted therefor is
the following:
Section 6.15 Lockbox Arrangement.
(a) Borrowers shall irrevocably direct all present and future
debtors and other Persons obligated to make payments constituting
Collateral to make such payments directly to the Lockbox. All of each
Borrowers' invoices, account statements and other written or oral
communications directing, instructing, demanding or requesting payment
of any Account or any other amount constituting Collateral shall
conspicuously direct that all payments be made to the Lockbox and shall
include the Lockbox address. All payments received in the Lockbox shall
be processed to the Restricted Account.
(b) Borrowers agree to deposit into the Restricted Account, or
at the Lender's option, to deliver to the Lender, all collections on
Accounts, contract rights, chattel paper and other rights to payment
constituting Collateral, and all other cash proceeds of Collateral,
that Borrowers may receive directly notwithstanding their direction to
Account debtors and other obligors to make
10
11
payments to the Lockbox, immediately upon receipt thereof, in the form
received, except for Borrowers' endorsement when deemed necessary.
Until delivered to the Lender or deposited in the Restricted Account,
all proceeds or collections of Collateral shall be held in trust by
Borrowers for and as the property of the Lender and shall not be
commingled with any funds or property of Borrowers.
(c) Amounts deposited in the Restricted Account shall not bear
interest.
(d) All deposits in the Restricted Account shall constitute
proceeds of Collateral and shall not constitute payment of the
Obligations. After the occurrence of any Event of Default, Borrower
shall not have access to the Restricted Account or any cash or other
items on deposit therein and, Lender may, in its sole discretion, apply
funds in the Restricted Account to the payment of the Obligations, in
any order or manner of application satisfactory to the Lender.
(e) All items deposited in the Restricted Account shall be
subject to final payment. If any such item is returned uncollected,
Borrowers will immediately pay the Lender the amount of that item, or
Lender at its discretion may charge any uncollected item to Borrowers'
account. Borrowers shall be liable as endorsers on all items deposited
in the Restricted Account, whether or not in fact endorsed by the
Borrowers.
(f) Except after the occurrence and during the continuance of
an Event of Default, (i) all Collateral (including without limitation,
all amounts in the Restricted Account) shall be available for use by
the Borrowers in accordance with the terms of this Agreement and (ii)
the Lender shall not allow "Instructions" (as defined in the Four Party
Collection Agreement) to be issued and continue to exist.
(t) A new Section 6.16 is added to the Agreement as follows:
Section 6.16 Quarterly Cash Flow.
(a) Beginning with the quarter ending September 30, 2001, and
for each quarter thereafter, Borrowers shall achieve Quarterly Cash
Flow of $0 or greater; provided that if Quarterly Cash Flow for any
relevant period ending on any such quarter is negative, Borrowers, on
or before the 45th day following the end of such quarter, shall do one
or both of the following: (i) obtain additional cash equity
contributions from one or more Third-Party Investors or (ii) incur
additional debt in the form of CASH provided to the Borrowers, from one
or more Third-Party Investors, which debt shall be subordinated to the
Obligations in accordance with the subordination terms set forth in
Exhibit C, or otherwise in form and substance reasonably satisfactory
to Lender (collectively, the foregoing are the "Capital
Contributions"), in any such case in an amount such that, if all such
equity contributions and subordinated debt were added to Quarterly Cash
11
12
Flow for such period, the Quarterly Cash Flow for such period would not
be less than $0. In the event that Borrowers obtain Capital
Contributions with respect to the quarter ending September 30, 2001,
such Capital Contributions shall, without duplication, be added to
Quarterly Cash Flow for the period ending December 31, 2001. Borrowers
shall provide any and all documentation requested by the Lender in its
reasonable discretion to evidence the Capital Contributions. Cash
obtained pursuant to the requirement set forth in Section 6.18 hereof
shall not constitute a Capital Contribution except to the extent such
cash obtained exceeds $200,000. For purposes of this paragraph only,
all non-recurring compensation expenses, including severance, paid by
Borrowers between July 1, 2001 and September 30, 2001 to any employees
who have been terminated and not replaced shall not be taken into
account when determining Quarterly Cash Flow.
(b) If the Quarterly Cash Flow exceeds $0 for any relevant
period ending on any such quarter, then Borrowers, on or before the
45th day following the end of such quarter, shall make a mandatory
permanent pre-payment of the Advances in an amount equal to one-half of
the amount by which such Quarterly Cash Flow exceeds $0.
(c) If Quarterly Cash Flow exceeds $0 and during such period
Borrowers nevertheless obtain Capital Contributions, such Capital
Contributions may be used by the Borrowers to satisfy the requirements
of Section 6.16(a) hereof for subsequent periods.
(d) If Quarterly Cash Flow is less than $0 for any period, and
Borrowers nevertheless obtain Capital Contributions that exceed the
requirements set forth in Section 6.16(a) above with respect to such
period, such excess Capital Contributions may be used by the Borrowers
to satisfy the requirements of Section 6.16(a) hereof for subsequent
periods.
The following two examples demonstrate the mechanics of this
Section 6.16:(1)
(1) If Parent's consolidated EBITDA for the quarter equals
$200,000, Quarterly Interest Expense equals $100,000 and Capital
Expenditures equals $10,000, THEN Quarterly Cash Flow shall equal
$90,000. Under the circumstances set forth in this example, a mandatory
pre-payment of Advances would be required in the amount of $45,000.
(2) If Parent's consolidated EBITDA for the quarter equals
($100,000), Quarterly Interest Expense equals $100,000 and Capital
Expenditures equals $10,000, THEN Quarterly Cash Flow shall equal
($210,000). Under these circumstances, there shall be no Event of
Default if a Capital Contribution of $210,000 is made within 45 days of
the end of such quarter. Under the
----------
(1) Both examples assume (i) the relevant period is the quarter ending September
30, 2001 and (ii) that the cash infusion contemplated by Section 6.18 does not
exceed $200,000.
12
13
circumstances set forth in this example, no mandatory pre-payment of
Advances is required.
(u) A new Section 6.17 is added to the Agreement as follows:
Section 6.17 Delivery of Notes. Borrowers shall immediately
deliver to the Lender the Seller Note and any other note payable to any
Borrower from time to time.
(v) A new Section 6.18 is added to the Agreement as follows:
Section 6.18 Cash Infusion. Borrowers shall obtain a cash
infusion in the amount of not less than $200,000 by obtaining
subordinated loans from Third Party Investors, which debt shall be
subordinated to the Obligations in accordance with the subordination
terms set forth in Exhibit C, or otherwise in form and substance
reasonably satisfactory to Lender, or by the sale of equity interests
in the Borrowers to Third Party Investors no later than October 31,
2001.
(w) A new Section 6.19 is added to the Agreement as follows:
Section 6.19 Discounts, etc. Borrowers will not grant any
discount, credit or allowance to any customer of the Borrowers except
in the ordinary course of the Borrowers' business and consistent with
Borrowers' past practices. The Borrowers will not at any time modify,
amend, subordinate, cancel or terminate the obligation of any account
debtor or other obligor of the Borrowers except in the ordinary course
of the Borrowers' business and consistent with Borrowers' past
practices.
(x) Section 7.2 is amended (i) by deleting the word "and" after clause
(c) thereof, (ii) by deleting the phrase "Section 7.1(d)" from clause (d)
thereof and substituting therefor the phrase "Section 7.1", (iii) by deleting
the period after clause (d) and substituting therefor the phrase "; and", and
(iv) by adding a new clause (e) as follows:
(e) indebtedness of any Borrower owing to any Third-Party
Investor, incurred pursuant to and in accordance with the terms of
Section 6.16 or 6.18.
(y) Section 7.4 is amended as follows:
(i) by deleting subparagraph (a)(ii) in its entirety and
substituted therefor is the following:
(ii) [Intentionally Omitted].
(ii) by deleting subparagraph (b) and substituting therefor
the following:
13
14
(b) No Borrower will create or permit to exist any
Subsidiary other than the Subsidiaries in existence on the date hereof
and listed on Schedule 5.4.
(z) Section 7.7 of the Agreement is hereby deleted in its entirety and
substituted therefor is the following:
Section 7.7 Consolidation and Merger; Asset Acquisitions. No
Borrower will consolidate with or merge into any Person, or permit any
other Person to merge into it, or acquire all or substantially all the
assets of any other Person except with Lender's prior written approval.
(aa) A new Section 7.15 is added to the Agreement as follows:
Section 7.15 Capital Expenditures. The Borrowers will not
incur or contract to incur Capital Expenditures in any fiscal quarter
in an amount greater than the amount projected for such quarter as set
forth in Schedule 7.15 hereto.
(bb) A new Section 7.16 is added to the Agreement as follows:
Section 7.16 Subordinated Debt. The Borrowers shall not amend
the terms of any Subordinated Debt Agreement nor make any payments of
principal of, interest on or any other payment in respect of any
Subordinated Loan until all of the Obligations have been paid in full
and Lender's commitment to make Advances has been terminated. For
purposes of this Section 7.16, "Subordinated Loan" shall mean any and
all of the following, all of which shall be subordinated to the
Obligations in accordance with the subordination terms set forth in
Exhibit C, or otherwise in form and substance reasonably satisfactory
to Lender: (i) that certain subordinated loan made by Xxxxx Xxxxxxxx to
Parent in the amount of $345,000 on December 29, 2000; (ii) that
certain subordinated loan made by Xxxxxxx Xxxxx to Parent in the amount
of $163,000 on December 29, 2000; (iii) that certain subordinated loan
made by Xxxxxx Xxxxxxx to Parent in the amount of $142,000 on December
29, 2000; and (iv) any subordinated loan made to any Borrower pursuant
to Sections 6.16(a) or 6.18, and "Subordinated Debt Agreement" shall
mean any note or other agreement or instrument evidencing any such
Subordinated Loan.
(cc) Section 8.1 of the Agreement is hereby amended as follows:
(i) by deleting the word "or" from the end of subparagraph
(l), by deleting the period from the end of subparagraph (m) and
substituting therefor a semicolon; and
(n) by adding a new subparagraph (n) as follows:
14
15
(n) any accountant or auditor of the Borrowers shall
render any report stating that a material adverse change in
the Borrowers' accounts receivable in the aggregate has
occurred.
(dd) Section 8.2(c) of the Agreement is hereby deleted in its entirety
and substituting therefor the following:
(c) the Lender may, without notice to any Borrower and without
further action, apply any and all money owing by the Lender to the
Borrowers (including without limitation, all sums on deposit in the
Restricted Account) to the payment of the Obligations;
(ee) Section 9.3 of the Agreement is hereby amended by deleting the
following text "1522 Xxxxx Xxxxxx, Xxxxxx, XX 00000," and replacing such text
with "1660 Xxxxxxx, Suite 1010, Xxxxxx, XX 00000."
(ff) Section 9.14(a) of the Agreement is hereby amended by adding the
following text to the end of the paragraph as follows:
Notwithstanding any contrary provision, it is the intention of each
Borrower and the Lender that the amount of the Obligations for which
any Borrower is liable shall be, but not in excess of, the maximum
amount permitted by fraudulent conveyance, fraudulent transfer, or
similar laws applicable to such Borrower. Accordingly, notwithstanding
anything to the contrary contained in this Agreement or any other
agreement or instrument executed in connection with the payment of any
of the Obligations, the amount of the Obligations for which any
Borrower is liable shall be limited to an aggregate amount equal to the
largest amount that would not render such Borrower's obligations
hereunder subject to avoidance under Section 548 of the United States
Bankruptcy Code or any comparable provision of any applicable state
law.
(gg) A new Section 9.17 is added to the Agreement as follows:
Section 9.17 Insolvency. None of the Borrowers are insolvent
as of the Effective Date (as defined in the Second Amendment to this
Agreement). As of such Effective Date, none of the Borrowers intend to
file for relief under the United States Bankruptcy Code or any other
state or federal insolvency laws or laws providing relief of debtors.
(hh) A new Exhibit C, a new Schedule 7.15 and a new Exhibit D are added
to the Agreement in the forms attached as Exhibit C, Schedule 7.15 and Exhibit D
respectively, attached hereto.
(ii) Exhibit B to the Agreement (Compliance Certificate) is deleted in
its entirety and substituted by Exhibit E hereto.
15
16
2. In consideration of the terms and conditions of this Amendment,
Borrowers hereby agree to pay to Lender a fee of $500,000, fully earned as of
the date hereof, payable upon the earliest of the following to occur: (i) the
Maturity Date, (ii) payment or pre-payment in full of the Obligations; or (iii)
upon the refinancing of the Obligations with another lender.
3. The amendments set forth in Section 1 shall be effective on the date
(the "EFFECTIVE DATE") when the following conditions precedent shall have been
met or completed in a manner acceptable to the Lender:
(a) The Borrowers shall pay the Lender on the date hereof a
fully earned, non-refundable fee in the amount of $25,000 in
consideration of the Lender's execution of this Amendment. For the
avoidance of doubt, such amount includes the $10,000 fee required to be
paid pursuant to the terms of the First Amendment.
(b) The Borrowers shall have executed and delivered or caused
to be executed and delivered this Amendment and all other documents
reasonably required by the Lender and shall have complied with such
additional conditions and requests as the Lender may reasonably
require.
(c) (i) All representations and warranties made in the Loan
Documents shall be true, complete and correct in all respects as of the
date hereof as if made on the date hereof, and (ii) no Default or Event
of Default shall have occurred and be continuing under any of the Loan
Documents or will occur as a result of this Amendment.
(d) The Borrowers shall pay or cause to be paid all of the
reasonable expenses incurred by the Lender in connection with the
transactions contemplated by this Amendment, including, without
limitation, the reasonable fees and disbursements of the Lender's
attorneys and their staff (including, without limitation, all fees and
disbursements incurred by Lender's attorneys and their staff in
connection with the drafting and preparation of the First Amendment and
any recording and filing fees, charges and expenses).
(e) The execution, delivery and performance by the Borrowers
of this Amendment shall have been duly authorized by all necessary
corporate action and do not and will not (i) require any consent or
approval of the Borrowers' stockholders; (ii) require any
authorization, consent or approval by, or registration, declaration or
filing with, or notice to, any governmental department, commission,
board, bureau, agency or instrumentality, domestic or foreign, or any
third party, except such authorization, consent, approval,
registration, declaration, filing or notice as has been obtained,
accomplished or given prior to the date hereof; (iii) violate any
provision of any law, rule or regulation (including, without
limitation, Regulation X of the Board of Governors of the Federal
Reserve System) or of any order, writ, injunction or decree presently
in effect having applicability to the Borrowers or of the Borrowers'
articles of incorporation or bylaws; (iv) result in a breach of or
constitute a default under any indenture or loan or credit agreement or
any other material agreement, including, without limitation, the
Xxxxxxx Xxxxx Loan Documents, any lease or instrument to which any
Borrower is a party
16
17
or by which it or its properties may be bound or affected; or (v)
result in, or require, the creation or imposition of any mortgage, deed
of trust, pledge, lien, security interest or other charge or
encumbrance of any nature (other than the Security Interest) upon or
with respect to any of the properties now owned or hereafter acquired
by the Borrowers.
(f) All financing statements necessary to perfect the Security
Interest in the Collateral have been filed, to the extent the Security
Interest is capable of being perfected by filing, and Lender shall have
a first priority Security Interest in all Collateral (other than any
Collateral subject to the Xxxxxxx Xxxxx Xxxx or any Permitted Liens).
(g) The Borrowers shall have each executed and delivered the
Note in the form set forth in Exhibit A hereto.
(h) The Borrowers shall have provided the Lender with the
following financial information and documentation relating to each
Borrower: (i) a current, separate accounts receivable and accounts
payable report, together with a report of the number of each Borrower's
employees, and (ii) a schedule of each Borrower's bank accounts and
inter-company loans and debts, if any.
(i) The Borrowers shall provide Lender with an opinion of
counsel to the Borrowers, in form and substance satisfactory to the
Lender.
4. Borrowers hereby certify to the Lender that as of the date of this
Amendment (i) all of the Borrowers' representations and warranties contained in
the Loan Documents are true, complete and correct in all material respects as if
made on the date hereof, and (ii) no Default or Event of Default has occurred
and is continuing under any Loan Document or will occur as a result of this
Amendment.
5. Borrowers hereby agree that no later than 10 Banking Days after the
Effective Date, they shall (i) use best efforts to cause the termination of each
of those financing statements described in Exhibit B hereto and (ii) cause the
Subordinated Debt Agreements relating to the Subordinated Loans specified in
clauses (i)-(iii) in Section 1(bb) above to be amended to reflect the
subordination terms set forth in Exhibit C attached hereto. Lender agrees that
no Default or Event of Default shall occur as a result of the conditions
described in this Section 5 during such 10 Banking Day period.
6. Except as expressly set forth herein, the Agreement and the Loan
Documents shall remain as originally stated and in full force and effect. The
Borrowers and the Lender hereby confirm and ratify each of the provisions of the
Agreement and the Loan Documents as amended hereby. The Note shall be amended
and restated in its entirety in the form attached hereto as Exhibit A (the "New
Note") and shall be deemed modified as of the Effective Date. From and after the
Effective Date all references in any Loan Documents to the Note shall be deemed
references to the New Note.
7. Each Borrower hereby absolutely and unconditionally releases and
forever discharges the Lender, and any and all participants, parent
corporations, subsidiary corporations,
17
18
affiliated corporations, insurers, indemnitors, successors and assigns thereof,
together with all of the present and former directors, officers, agents and
employees of any of the foregoing, from any and all claims, demands or causes of
action of any kind, nature or description, whether arising in law or equity or
upon contract or tort or under any state or federal law or otherwise, which any
Borrower has had, now has or has made claim to have against any such person for
or by reason of any act, omission, matter, cause or thing whatsoever arising
from the beginning of time to and including the date of this Amendment, whether
such claims, demands and causes of action are matured or unmatured or known or
unknown.
8. Each Borrower hereby reaffirms its agreement under the Credit
Agreement to pay or reimburse the Lender on demand for all costs and expenses
incurred by the Lender in connection with the Loan Documents, including without
limitation all reasonable fees and disbursements of legal counsel. Without
limiting the generality of the foregoing, the Borrowers specifically agree to
pay all fees and disbursements of counsel to the Lender for the services
performed by such counsel in connection with the preparation and negotiation of
this Amendment and the transactions, documents and instruments incidental
hereto. The Borrowers hereby agree that the Lender may, at any time or from time
to time in its sole discretion and without further authorization by the
Borrowers, make a loan to the Borrowers under the Credit Agreement, or apply the
proceeds of any loan, for the purpose of paying any such fees, disbursements,
costs and expenses and the fee required under Section 2 hereof.
9. This Amendment shall be governed by, and construed in accordance
with, the substantive laws (other than conflict laws) of the State of Colorado.
10. This Amendment shall inure to, benefit and bind the successors and
assigns of the parties hereto.
11. This Amendment may be executed in one or more counterparts, each of
which shall be deemed an original, and all of which together shall constitute
one and the same instrument. This Amendment shall be a "Loan Document" as
defined in the Agreement.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
18
19
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed by their respective officers thereunto duly authorized as of the date
first above written.
XXXXX FARGO BANK, N.A.
a national banking association
By: /s/ Xxxx Xxxxxx
-----------------------------------
Name: Xxxx Xxxxxx
Title: Vice President
PENTASTAR COMMUNICATIONS, INC., a Delaware
corporation
By: /s/ Xxxxx X. Xxxxxx
-----------------------------------
Xxxxx X. Xxxxxx
Chief Financial Officer
PENTASTAR ACQUISITION CORP. I , a Delaware
corporation
By: /s/ Xxxxx X. Xxxxxx
-----------------------------------
Xxxxx X. Xxxxxx
Chief Financial Officer
PENTASTAR ACQUISITION CORP. II , a Delaware
corporation
By: /s/ Xxxxx X. Xxxxxx
-----------------------------------
Xxxxx X. Xxxxxx
Chief Financial Officer
PENTASTAR ACQUISITION CORP. III , a Delaware
corporation
By: /s/ Xxxxx X. Xxxxxx
-----------------------------------
Xxxxx X. Xxxxxx
Chief Financial Officer
19
20
PENTASTAR ACQUISITION CORP. IV , a Delaware
corporation
By: /s/ Xxxxx X. Xxxxxx
-----------------------------------
Xxxxx X. Xxxxxx
Chief Financial Officer
PENTASTAR ACQUISITION CORP. VI , a Delaware
corporation
By: /s/ Xxxxx X. Xxxxxx
-----------------------------------
Xxxxx X. Xxxxxx
Chief Financial Officer
PENTASTAR INTERNET, INC , a Delaware
corporation
By: /s/ Xxxxx X. Xxxxxx
-----------------------------------
Xxxxx X. Xxxxxx
Chief Financial Officer
PENTASTAR HOLDING CORPORATION , a Delaware
corporation
By: /s/ Xxxxx X. Xxxxxx
-----------------------------------
Xxxxx X. Xxxxxx
Chief Financial Officer
PENTASTAR TELEMARKETING, INC., a Delaware
corporation
By: /s/ Xxxxx X. Xxxxxx
-----------------------------------
Xxxxx X. Xxxxxx
Chief Financial Officer
20
21
PENTASTAR CORPORATION, a Colorado corporation
By: /s/ Xxxxx X. Xxxxxx
-----------------------------------
Xxxxx X. Xxxxxx
Chief Financial Officer
PENTASTAR ACQUISITION CORP. V, a Delaware
corporation
By: /s/ Xxxxx X. Xxxxxx
-----------------------------------
Xxxxx X. Xxxxxx
Chief Financial Officer
PENTASTAR ACQUISITION CORP. VII, a Delaware
corporation
By: /s/ Xxxxx X. Xxxxxx
-----------------------------------
Xxxxx X. Xxxxxx
Chief Financial Officer
PENTASTAR ACQUISITION CORP. VIII, a Delaware
corporation
By: /s/ Xxxxx X. Xxxxxx
-----------------------------------
Xxxxx X. Xxxxxx
Chief Financial Officer
PENTASTAR ACQUISITION CORP. IX, a Delaware
corporation
By: /s/ Xxxxx X. Xxxxxx
-----------------------------------
Xxxxx X. Xxxxxx
Chief Financial Officer
21
22
EXHIBIT A
AMENDED AND RESTATED PROMISSORY NOTE
$7,465,000.00 September 28, 2001
FOR VALUE RECEIVED EACH OF PENTASTAR COMMUNICATIONS, INC., a Delaware
corporation, PENTASTAR ACQUISITION CORP. I, a Delaware corporation, PENTASTAR
ACQUISITION CORP. II, a Delaware corporation, PENTASTAR ACQUISITION CORP. III, a
Delaware corporation, PENTASTAR ACQUISITION CORP. IV, a Delaware corporation,
PENTASTAR ACQUISITION CORP. VI, a Delaware corporation, PENTASTAR INTERNET,
INC., a Delaware corporation, PENTASTAR HOLDING CORPORATION, a Delaware
corporation, PENTASTAR TELEMARKETING, INC., a Delaware corporation, PENTASTAR
CORPORATION, a Colorado corporation, PENTASTAR ACQUISITION CORP. V, a Delaware
corporation, PENTASTAR ACQUISITION CORP. VII, a Delaware corporation, PENTASTAR
ACQUISITION CORP. VIII, a Delaware corporation, and PENTASTAR ACQUISITION CORP.
IX, a Delaware corporation (collectively, the foregoing are the "Maker"),
promises to pay to the order of XXXXX FARGO BANK, N. A. (as successor by
assignment to Xxxxx Fargo Bank West, N.A., the "Bank"), or its order, on or
before April 15, 2002, the principal sum of SEVEN MILLION FOUR HUNDRED SIXTY
FIVE THOUSAND DOLLARS ($7,465,000.00) or so much as may be advanced and
outstanding from time to time (the "Principal Amount") pursuant to the Credit
and Security Agreement of even date herewith between Bank and Maker (as it may
be amended, restated or supplemented from time to time, the "Loan Agreement")
together with interest on the Principal Amount at a rate of interest as provided
in the Loan Agreement.
This Note is issued to evidence a revolving line of credit from Bank to
Maker made pursuant to the terms of the Loan Agreement, together with all other
amounts due pursuant to the Loan Agreement and the Loan Documents. This Note is
issued pursuant, and is subject, to the Loan Agreement, which provides, among
other things, for acceleration hereof. This Note is the Note referred to in the
Loan Agreement. Bank is entitled to the benefits of certain Security Documents
executed in connection with the Loan Agreement. All capitalized terms used
herein and not defined shall have the meaning given to them in the Loan
Agreement.
Interest, based upon a three hundred sixty (360) day year and the
actual number of days elapsed, shall accrue daily, and is due and payable
monthly on the first day of each month for all interest accrued through the
first day of the month, and all accrued and unpaid interest plus the outstanding
Principal Amount shall be due on the Termination Date.
It is not intended hereby to charge interest at a rate in excess of the
maximum rate of interest permitted to be charged to the Maker under applicable
law, but if, notwithstanding,
22
23
interest in excess of such maximum rate shall be paid hereunder, the excess
shall be retained by the holder of this Note as additional cash collateral for
the payment of the Loan, unless such retention is not permitted by law, in which
case the interest rate on this Note shall be adjusted to the maximum permitted
under applicable law during the period or periods that the interest rate
otherwise provided herein would exceed such rate.
All payments of this Note shall be made in lawful money of the United
States of America at the Bank's offices at MAC # C7301-031, 0000 Xxxxxxxx,
Xxxxxx, Xxxxxxxx 00000, or at such other place as the Bank may designate to the
Maker in writing.
Time is of the essence hereof. In the event of (i) any default in the
payment of principal or interest when due and payable under the terms of this
Note, (ii) any Event of Default under the Loan Agreement, or (iii) any default
under any other Loan Document, then the whole principal sum plus accrued
interest and all other obligations of the Maker to holder, direct or indirect,
absolute or contingent, now existing or hereafter arising, shall, at the option
of the holder of this Note, become immediately due and payable without notice or
demand, and the holder of this Note shall have and may exercise any or all of
the rights and remedies provided herein and in the Loan Agreement, and the other
Loan Documents, as they may be amended, modified or supplemented from time to
time.
If the Maker fails to pay any amount due under this Note and the Bank
has to take any action to collect the amount due or to exercise its rights under
the Loan Agreement or the Loan Documents, including without limitation,
retaining attorneys for collection of this Note, or if any suit or proceeding is
brought for the recovery of all or any part of or for protection of the
indebtedness or to foreclose the Loan Documents or to enforce the Bank's rights
under the Loan Agreement, or the Loan Documents, then the Maker agrees to pay on
demand all costs and expenses of any such action, suit or proceeding to collect,
and any appeal of any such action, suit or proceeding, incurred by the Bank,
including but not limited to the reasonable fees and disbursements of the Bank's
attorneys and their staff.
The Maker and any endorser hereof waive presentment for payment,
protest, notice of dishonor and protest, and consent to any extension of time
with respect to any payment due under this Note, to any substitution or release
of collateral pursuant to the Loan Agreement, and to the addition or release of
any party. No waiver of any payment under this Note shall operate as a waiver of
any other payment.
If any provision in this Note shall be held invalid, illegal or
unenforceable in any jurisdiction, the validity, legality or enforceability of
any defective provision shall not be in any way affected or impaired in any
other jurisdiction.
No delay or failure of the holder of this Note in the exercise of any
right or remedy provided for hereunder shall be deemed a waiver of such right by
the holder hereof, and no exercise of any right or remedy shall be deemed a
waiver of any other right or remedy which the holder may have.
23
24
All notices given hereunder shall be given in accordance with the
notice provisions of the Loan Agreement.
At the option of the holder hereof, an action may be brought to enforce
this Note in the manner set forth in the Loan Agreement.
This Note is to be governed by and construed according to the laws of
the State of Colorado.
24
25
DATED as of the day and year first set forth above.
MAKER:
PENTASTAR COMMUNICATIONS, INC.
By /s/ Xxxxx. X. Xxxxxx
-----------------------------
Name: Xxxxx. X. Xxxxxx
Its Chief Financial Officer
PENTASTAR ACQUISITION CORP. I
By /s/ Xxxxx. X. Xxxxxx
-----------------------------
Name: Xxxxx. X. Xxxxxx
Its Chief Financial Officer
PENTASTAR ACQUISITION CORP. II
By /s/ Xxxxx. X. Xxxxxx
-----------------------------
Name: Xxxxx. X. Xxxxxx
Its Chief Financial Officer
PENTASTAR ACQUISITION CORP. III
By /s/ Xxxxx. X. Xxxxxx
-----------------------------
Name: Xxxxx. X. Xxxxxx
Its Chief Financial Officer
25
26
PENTASTAR ACQUISITION CORP. IV
By /s/ Xxxxx. X. Xxxxxx
-----------------------------
Name: Xxxxx. X. Xxxxxx
Its Chief Financial Officer
PENTASTAR ACQUISITION CORP. VI
By /s/ Xxxxx. X. Xxxxxx
-----------------------------
Name: Xxxxx. X. Xxxxxx
Its Chief Financial Officer
PENTASTAR INTERNET, INC.
By /s/ Xxxxx. X. Xxxxxx
-----------------------------
Name: Xxxxx. X. Xxxxxx
Its Chief Financial Officer
PENTASTAR HOLDING CORPORATION
By /s/ Xxxxx. X. Xxxxxx
-----------------------------
Name: Xxxxx. X. Xxxxxx
Its Chief Financial Officer
26
27
PENTASTAR TELEMARKETING, INC.
By /s/ Xxxxx. X. Xxxxxx
-----------------------------
Name: Xxxxx. X. Xxxxxx
Its Chief Financial Officer
PENTASTAR CORPORATION
By /s/ Xxxxx. X. Xxxxxx
-----------------------------
Name: Xxxxx. X. Xxxxxx
Its Chief Financial Officer
PENTASTAR ACQUISITION CORP. V
By /s/ Xxxxx. X. Xxxxxx
-----------------------------
Name: Xxxxx. X. Xxxxxx
Its Chief Financial Officer
PENTASTAR ACQUISITION CORP. VII
By /s/ Xxxxx. X. Xxxxxx
-----------------------------
Name: Xxxxx. X. Xxxxxx
Its Chief Financial Officer
PENTASTAR ACQUISITION CORP. VIII
By /s/ Xxxxx. X. Xxxxxx
-----------------------------
Name: Xxxxx. X. Xxxxxx
Its Chief Financial Officer
PENTASTAR ACQUISITION CORP. IX
By /s/ Xxxxx. X. Xxxxxx
-----------------------------
Name: Xxxxx. X. Xxxxxx
Its Chief Financial Officer
27
28
EXHIBIT B--FINANCING STATEMENT REQUIRING PARTIAL RELEASE
Secured Party: Xxxxxxx Xxxxx Business Financial Services
Debtor: Telecomm Industries Corp.
Filing Number: 003933147
Filing Jurisdiction: Illinois Secretary of State
Filing Date: October 29, 1998
28
29
EXHIBIT C
SUBORDINATION TERMS
29
30
EXHIBIT D
FORM OF BORROWING BASE RECONCILIATION CERTIFICATE
30
31
EXHIBIT E
FORM OF BORROWING COMPLIANCE CERTIFICATE
31
32
SCHEDULE 7.15
CAPITAL EXPENDITURES
------------------------------------ ---------------------------------------
QUARTER ENDING: PROJECTED CAPITAL EXPENDITURES
------------------------------------ ---------------------------------------
December 31, 2001 $59,500
March 31, 2002 $41,000
32
