EXHIBIT 10.23
FIFTH AMENDMENT TO NOTE PURCHASE AGREEMENT
THIS FIFTH AMENDMENT TO NOTE PURCHASE AGREEMENT (this
"Amendment") is made as of March 29, 1996 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").
A. The Company has requested that the Purchaser enter into this
Amendment in order to amend certain financial covenants.
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. Amendments to the Purchase Agreement. The Purchase Agreement
is hereby amended as follows:
A. Section 10.12 is deleted in its entirety and the
following is inserted in lieu thereof:
" Section 10.12. Research and Development
Expenditures. (a) Except as provided in subsection
(b) of this Section 10.12, the Company will not, and
will not permit any of its Subsidiaries to, make or
incur any Research and Development Expenditures or
any contractual commitment with respect to any
Research and Development Expenditure if, after giving
effect thereto, the aggregate amount of all Research
and Development Expenditures by the Company and its
Subsidiaries during any fiscal quarter of the Company
would exceed (i) $1,900,000, with respect to each of
the fiscal quarters ending September 30, 1994,
December 31, 1994, March 31, 1995, June 30, 1995,
September 30, 1995 and December 31, 1995 or (ii)
$2,000,000, with respect to any fiscal quarter ending
on or after March 31, 1996.
(b) Notwithstanding the provisions of
subsection (a) of this Section 10.12, if Cumulative
New Business Profits for any of the periods
commencing on July 1, 1994 and ending on the last day
of the fiscal quarter of the Company immediately
preceding the fiscal quarter ended on any of the
dates set forth in the left most column in the table
below shall be less than the corresponding amount
shown opposite such date in the column entitled
"Cumulative New Business Profits," then during the
fiscal quarter ending on such date the Company will
not, and will not permit any of its Subsidiaries to,
make or incur any Research and Development
Expenditures or any contractual commitment with
respect to any Research and Development Expenditure
if, after giving effect thereto, the aggregate amount
of all Research and Development Expenditures by the
Company and its Subsidiaries during such fiscal
quarter would exceed the corresponding amount shown
opposite such date in the column entitled "Maximum R
& D Expenditure." Solely for purposes of this
subsection (b), the term "Cumulative New Business
Profits" for any period shall mean the excess, if
any, of revenues for such period derived from the
sales of New Business Products and Services over the
related material costs (in the case of revenues from
sales of equipment and other tangible products) or
direct costs (in the case of revenues from the
rendering of services, including, without limitation,
services referred to in clause (c) of the definition
of New Business Products and Services contained in
this Agreement) for such period incurred in
connection with such sales of New Business Products
and Services, in each case as determined for the
Company and its Subsidiaries on a consolidated basis
in accordance with GAAP.
Fiscal Quarter Cumulative New Maximum
Ended: Business Profits R & D Expenditure
June 30, 1995 $7,500,000 $1,600,000
September 30, 1995 $9,500,000 $1,500,000
December 31, 1995 $13,000,000 $1,500,000
March 31, 1996 $16,000,000 $1,500,000
June 30, 1996 $19,500,000 $1,500,000
B. Section 10.20 is deleted in its entirety
and the following is inserted in lieu thereof:
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" Section 10.20. Financial Covenants.
(a) Current Ratio. The Company shall not
permit the current Ratio, measured as at the end of
each fiscal quarter of the Company ending on any of
the dates set forth below, to be less than the
corresponding amount set forth opposite such date:
Measuring Date Ratio
December 31, 1994 1.50
March 31, 1995 1.35
June 30, 1995 1.35
September 30, 1995 1.45
December 31, 1995 1.50
March 31, 1996 1.50
June 30, 1996 1.50
(b) Liabilities-to-Net Worth Ratio. The
Company shall not permit the Liabilities-To-Net Worth
Ratio, measured as at the end of each fiscal quarter
of the Company ending on any of the dates set forth
below, to exceed the corresponding amount set forth
opposite such date:
Measuring Date Ratio
December 31, 1994 1.90
March 31, 1995 2.10
June 30, 1995 2.10
September 30, 1995 2.00
December 31, 1995 1.90
March 31, 1996 2.50
June 30, 1996 2.50
(c) Interest Expense Coverage Ratio. The
Company shall not permit the Interest Expense
Coverage Ratio, measured as of each date set forth
below for (i) in the case of each such date occurring
in 1995, that period commencing January 1, 1995 and
ending upon such date and (ii) in the case of each
such date occurring in 1996, that period commencing
January 1, 1996 and ending upon such date, to be less
than the corresponding amount set forth opposite each
such date:
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Measuring Date Ratio
March 31, 1995 1.35
June 30, 1995 1.25
September 30, 1995 2.25
December 31, 1995 2.50
March 31, 1996 1.25
June 30, 1996 1.50
(d) Fixed Charge Ratio. The Company shall
not permit the Fixed Charge Ratio, measured as of
each date set forth below for (i) in the case of each
such date occurring in 1995, that period commencing
January 1, 1995 and ending upon such date and (ii) in
the case of each such date occurring in 1996, that
period commencing January 1, 1996 and ending upon
such date, to be less than the corresponding amount
set forth opposite each such date:
Measuring Date Ratio
March 31, 1995 1.90
June 30, 1995 1.80
September 30, 1995 2.25
December 31, 1995 2.35
March 31, 1996 1.00
June 30, 1996 1.25
(e) EBIT. The Company shall not permit EBIT,
measured as of each date set forth below for (i) in
the case of each such date occurring in 1995, that
period commencing January 1, 1995 and ending upon
such date and (ii) in the case of each such date
occurring in 1996, that period commencing January 1,
1996 and ending upon such date, to be less than the
corresponding amount set forth opposite each such
date:
Measuring Date Amount
March 31, 1995 $125,000
June 30, 1995 $1,100,000
September 30, 1995 $3,250,000
December 31, 1995 $5,000,000
March 31, 1996 $150,000
June 30, 1996 $650,000
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(f) Consolidated Net Loss. The Company
shall not have a Consolidated Net Loss for any two
consecutive fiscal quarters, commencing with the
two fiscal quarters ending June 30, 1996."
2. 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 (or
with notice or the passage of time would constitute) an Event of Default
under the Purchase Agreement as it existed before this Amendment or as it
exists after the effectiveness of this Amendment, except such as are being
waived pursuant to this Amendment.
B. Corporate Authority. The execution, delivery and performance by
Company of this Amendment (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, or any registration,filing or declaration with, any
Governmental Body or non-governmental Person.
C. Binding Effect. This Amendment 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.
3. Effect of Amendment. 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 Amendment; provided that, except as specifically
provided herein, this Amendment 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 extend specifically amended, modified or waived
pursuant to the provisions of this Amendment.
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4. Payment of 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 Amendment and all other documents
executed pursuant to or in connection herewith, including, without limitation,
the fees and disbursements of Xxxxxxxxxxxx Xxxx & Xxxxxxxxx, special counsel to
the Purchaser, in connection herewith.
5. Counterparts. This Amendment 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.
6. Governing Law. THIS AMENDMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
7. Headings. Section headings are included herein for
convenience of reference only and shall not constitute a part of this Amendment
for any other purposes.
8. Amendments and Modifications. Any term, covenant, agreement or
condition of this Amendment may, with the consent of the parties hereto, be
amended, or compliance therewith may be waived (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 Amendment as
of the date and year first written above.
INTELLICALL, INC.
3/29/96 By: /s/ Xxxx X. Xxxxxxxxx
Date Name: Xxxx X. Xxxxxxxxx
Title: Vice President of Finance
and Controller
NOMURA HOLDING AMERICA INC.
3/39/96 By: /s/ Xxxxxx Xxxxxx
Date Name: Xxxxxx Xxxxxx
Title: Attorney-in-Fact
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