Exhibit 10.2
[LOGO]
SCHEDULE TO
LOAN AND SECURITY AGREEMENT
BORROWERS: SA TELECOMMUNICATIONS, INC. ("STEL")
U.S. COMMUNICATIONS, INC. ("USCI")
LONG DISTANCE NETWORK, INC. ("LONG DISTANCE")
SOUTHWEST LONG DISTANCE NETWORK, INC. ("SOUTHWEST")
DATE: DECEMBER 26, 1996
This Schedule is an integral part of the Loan and Security Agreement between
GREYROCK BUSINESS CREDIT, A DIVISION OF NATIONSCREDIT COMMERCIAL CORPORATION
("GBC") and the above-borrowers (jointly and severally, the "Borrower") of
even date.
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1. CREDIT LIMIT
(Section 1.1): An amount not to exceed the lesser of: (i) $10,000,000 at
any one time outstanding (the "Overall Credit Limit"); or
(ii) 80% of the amount of Borrower's Eligible Receivables
(as defined in Section 8 above). Loans will be made to
each Borrower based on the Eligible Receivables of each
Borrower, subject to the Overall Credit Limit set forth
above for all Loans to all Borrowers combined.
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2. INTEREST.
INTEREST RATE (Section 1.2):
Subject in all respects to Exhibit C hereto, the interest
rate in effect throughout each calendar month during the
term of this Agreement shall be the lesser of (a) the
maximum rate permitted by applicable law, or (b) the
highest "Prime Rate" in effect during such month, plus
2.5% per annum, provided that the interest rate in effect
in each month shall not be less than 9% per annum.
Interest shall be calculated on the basis of a 360-day
year for the actual number of days elapsed. "Prime Rate"
means the actual "Reference Rate" or the substitute
therefor of the Bank of America NT & SA whether or not
that rate is the lowest interest rate charged by said
bank. If the Prime Rate, as defined, is unavailable,
"Prime Rate" shall mean the highest of the prime rates
published in the Wall Street Journal on the first
business day of the month, as the base rate on corporate
loans at large U.S. money center commercial banks.
Interest charged throughout each month shall be based on
the highest Prime Rate in effect during such month.
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GREYROCK BUSINESS CREDIT SCHEDULE TO LOAN AND SECURITY AGREEMENT
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3. FEES (Section 1.3/Section 6.2):
Loan Fee: $100,000, payable concurrently herewith.
Unused Line Fee: In the event accrued interest in any month is less than
$10,000, Borrower shall pay GBC an unused line fee in
an amount equal to the difference between $10,000 and
interest accrued during such month. The unused line
fee represents compensation to GBC for having Loans
available to Borrower. The unused line fee shall be
payable on the last day of each month and may be charged
by GBC to the Borrower's Loan account.
Termination Fee: $10,000 per month for each month (or portion thereof)
from the effective date of termination to the Maturity
Date; provided that no Termination Fee shall be charged
if termination occurs after the first anniversary of the
date of this Agreement.
NSF Check Charge: $15.00 per item.
Wire Transfers: $15.00 per transfer.
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4. MATURITY DATE
(Section 6.1): DECEMBER 31, 1997, subject to automatic renewal as
provided in Section 6.1 above, and early termination
as provided in Section 6.2 above.
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5. REPORTING.
(Section 5.2):
Borrower shall provide GBC with the following:
1. Annual financial statements (consolidated and
consolidating), as soon as available, and in any event
within 90 days following the end of Borrower's fiscal
year, certified by independent certified public
accountants acceptable to GBC.
2. Quarterly unaudited financial statements (consolidated
and consolidating), as soon as available, and in any
event within 45 days after the end of each fiscal
quarter of Borrower.
3. Monthly unaudited financial statements (consolidated
and consolidating), as soon as available, and in any
event within 45 days after the end of each month.
4. Monthly Receivable agings, aged by invoice date,
within 15 days after the end of each month.
5. Monthly accounts payable agings, aged by invoice date,
and outstanding or held check registers within 15 days
after the end of each month.
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GREYROCK BUSINESS CREDIT SCHEDULE TO LOAN AND SECURITY AGREEMENT
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6. BORROWER INFORMATION:
PRIOR NAMES OF
BORROWER
(Section 3.2): As set forth in Representations and Warranties
of Borrower dated December 2, 1996 (the
"Representations").
PRIOR TRADE
NAMES OF BORROWER
(Section 3.2): As set forth in the Representations.
EXISTING TRADE
NAMES OF BORROWER
(Section 3.2): As set forth in the Representations.
OTHER LOCATIONS
AND ADDRESSES
(Section 3.3): As set forth in the Representations.
MATERIAL ADVERSE
LITIGATION
(Section 3.10): See Exhibit B
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7. NEGATIVE COVENANTS-EXCEPTIONS:
Notwithstanding the provisions of Section 5.5, the
following shall be permitted:
(a) Mergers and consolidations between two entities
which are both Borrowers, mergers and consolidations
of a subsidiary of a Borrower into such Borrower, and
other mergers and consolidations if a Borrower is the
surviving corporation in such merger.
(b) Sale or transfer of all or substantially all of
the assets of a Borrower to another Borrower.
(c) Acquisitions of assets or business by a Borrower,
provided the assets acquired are not subject to any
liens or encumbrances other than Permitted Liens.
(d) Payment of stock dividends, or issuance of
capital stock, or liens on the treasury or outstanding
capital stock of STEL.
(e) Payment of cash dividends on STEL's Series A
Cumulative Convertible Preferred Stock (the "Preferred
Stock") in an aggregate amount not to exceed $164,000
in any fiscal year of the Borrower (computed on a non-
cumulative basis).
(f) Sale of the international call back business and
related assets (other than any Receivables with
respect to which Loans are outstanding or any customer
lists or other General Intangibles relating thereto),
in a good faith arm's length transaction. GBC shall
execute and deliver UCC-2 releases with respect to
sales permitted under this clause (f) on written
request by the Borrower.
(g) Sale of Collateral as a part of the sale of a
business or line of business, which was acquired after
the date hereof (other than any Receivables with
respect to which Loans are outstanding or any customer
lists or other General Intangibles relating thereto),
in a good faith arm's length transaction. GBC shall
execute and deliver UCC-2
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GREYROCK BUSINESS CREDIT SCHEDULE TO LOAN AND SECURITY AGREEMENT
releases with respect to sales permitted under this
clause (g) on written request by the Borrower.
(h) Repurchase stock, options or warrants under any
stock option plan in an aggregate amount not to exceed
$500,000 in any fiscal year of the Borrower (computed
on a non-cumulative basis).
(i) Redeem Preferred Stock after July 1, 2000, for an
aggregate amount not to exceed $2,204,000 in any
fiscal year of the Borrower (computed on a non-
cumulative basis).
(j) Guaranty the obligations of any other Borrower or
any subsidiary of any Borrower, or continue in effect
any guarantees in existence on the date of this
Agreement.
(k) Make loans (i) to officers and directors of any
Borrower not exceeding at any one time an aggregate
of $200,000 outstanding, (ii) to employees, officers
and directors of any Borrower arising from the
exercise of options to purchase stock of any Borrower,
provided Borrower does not make any cash advance in
connection therewith, (iii) which are travel advances
to officers and employees in the ordinary course of
business, (iv) which are progress payments, advances
against commissions, prepaid rent or security deposits
in the ordinary course of business, (v) from one
Borrower to another Borrower or to a direct or
indirect subsidiary of a Borrower.
Borrower shall provide GBC with written notice of any
of the actions in clauses (a)-(c) above at least 15
days before taking any such action.
Borrower shall provide GBC with written notice of any
of the actions in clauses (e)-(i) above within 30 days
after taking any such action.
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8. OTHER PROVISIONS:
(1) CORPORATE STRUCTURE. Borrower represents and
warrants that:
(a) STEL is a holding company which owns 100%
of the issued and outstanding shares of
stock of USCI, Long Distance, and North
American.
(b) USCI owns 100% of the issued and
outstanding shares of stock of Southwest
Long Distance Network, Inc. ("Southwest").
(c) STEL also owns 100% of the issued and
outstanding shares of stock of Baltic
States and CIS Ventures, Inc. ("Baltic"),
and CIS Intelligence Information Services,
Inc. ("CIS"), all of which are and shall
continue to be inactive corporations,
without assets, and all of which shall be
dissolved by June 30, 1997. On or before
said date, Borrower shall give GBC evidence
confirming the dissolution of said
corporations.
(d) Baltic also owns 50% of the issued and
outstanding shares of stock of Intertex
Trading Corporation ("Intertex"), which is
and shall continue to be an inactive
corporation, without assets.
(e) STEL also owns 100% of the issued and
outstanding shares of Uniquest
Communications, Inc. ("Unitex").
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GREYROCK BUSINESS CREDIT SCHEDULE TO LOAN AND SECURITY AGREEMENT
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(2) CONTINUING GUARANTEES. Concurrently, each
Borrower shall execute and deliver Continuing
Guarantees, on GBC's standard form, with respect
to each other Borrower, and Borrower shall cause
North American, Baltic, CIS, and Unitex to
execute and deliver Continuing Guarantees, on
GBC's standard form, with respect to each
Borrower, together with security agreements
granting security interests in all of their
assets to secure said guarantees, on GBC's
standard form. Borrower shall cause all
guarantees referred to in this Section 7(2) to
continue in full force and effect so long as any
Obligations are outstanding and throughout the
term of this Agreement.
(3) FUTURE SUBSIDIARIES. If, in the future any
Borrower directly or indirectly acquires a
subsidiary of which it owns more than 50% of the
outstanding shares (a "Future Subsidiary"),
Borrower shall cause the Future Subsidiary,
simultaneously with, or within 10 Business Days
after its formation or acquisition, to join as an
additional Borrower under this Agreement, subject
to all of the terms and conditions of this
Agreement, provided such Future Subsidiary is
acceptable to GBC.
(4) STOCK PLEDGES. Concurrently, STEL shall execute
and deliver a Stock Pledge Agreement, on GBC's
standard form, with respect to all of the
outstanding stock of USCI, Long Distance, North
American and Unitex. Concurrently, USCI shall
execute and deliver a Stock Pledge Agreement, on
GBC's standard form, with respect to all of the
outstanding stock of Southwest. Borrower shall
cause all stock owned by a Borrower in any Future
Subsidiary to be pledged to GBC pursuant to a
Stock Pledge Agreement, on GBC's standard form,
simultaneously with, or within 10 Business Days
after the formation or acquisition of the Future
Subsidiary. Borrower shall cause all Stock
Pledge Agreements referred to in this Section
7(4) to continue in full force and effect so long
as any Obligations are outstanding and throughout
the term of this Agreement.
Borrower: GBC:
SA TELECOMMUNICATIONS, INC. GREYROCK BUSINESS CREDIT,
a Division of NationsCredit
Commercial Corporation
By J. Xxxxx Xxxxxxx By /s/ Xxx Xxxxxxxxx
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Vice President-Finance Title Chief Operating Officer
Borrower: Borrower:
U.S. COMMUNICATIONS, INC. LONG DISTANCE NETWORK, INC.
By /s/ J. Xxxxx Xxxxxxx By /s/ J. Xxxxx Xxxxxxx
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Vice President Vice President
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GREYROCK BUSINESS CREDIT SCHEDULE TO LOAN AND SECURITY AGREEMENT
Borrower:
SOUTHWEST LONG DISTANCE NETWORK, INC.
By /s/ J. Xxxxx Xxxxxxx
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Vice President
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EXHIBIT A
EXISTING LIENS
THOSE SHOWN ON THE FOLLOWING UCC SEARCHES
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EXHIBIT B
MATERIAL ADVERSE
LITIGATION
1. Xxxxxx Xxxxx vs. SA Holdings, Inc. and North American Telecommunications
Corporation, Cause No. 95-07136-E, 101st Judicial District Court, Dallas County,
Texas, filed July 20, 1995. This litigation alleges damages in excess of
$1,500,000 for alleged breach of contract, breach of fiduciary duty, conspiracy
and fraud arising out of the termination of the plaintiff's consulting agreement
with North American. The defendants have filed counterclaims and believe they
have meritorious defenses to the claims made. The case is currently in
discovery. A trial date has not yet been set.
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EXHIBIT C
MAXIMUM INTEREST RATE
(a) Notwithstanding the foregoing provisions of Section 2 of the Schedule
regarding the rates of interest applicable to the Loans, if at any time the
amount of such interest computed on the basis of the interest rate specified
therein (the "Applicable Interest Rate") would exceed the amount of such
interest computed upon the basis of the maximum rate of interest permitted by
applicable state or federal law in effect from time to time hereafter, after
taking into account, to the extent required by applicable law, any and all fees,
payments, charges and calculations provided for in this Agreement or in any
other agreement between Borrower and GBC (the "Maximum Legal Rate"), the
interest payable under this Agreement shall be computed upon the basis of the
Maximum Legal Rate, but any subsequent reduction in the Prime Rate shall not
reduce such interest thereafter payable hereunder below the amount computed on
the basis of the Maximum Legal Rate until the aggregate amount of such interest
accrued and payable under this Agreement equals the total amount of interest
which would have accrued if such interest had been at all times computed solely
on the basis of the Applicable Interest Rate.
(b) No agreements, conditions, provisions or stipulations contained in
this Agreement or any other instrument, document or agreement between the
Borrower and the GBC or default of the Borrower, or the exercise by the GBC of
the right to accelerate the payment of the maturity of principal and interest or
to exercise any option whatsoever contained in this Agreement or any other
agreement between the Borrower and the GBC, or the arising of any contingency
whatsoever, shall entitle the GBC to collect, in any event, interest exceeding
the Maximum Legal Rate and in no event shall the Borrower be obligated to pay
interest exceeding such Maximum Legal Rate and all agreements, conditions or
stipulations, if any, which may in any event or contingency whatsoever operate
to bind, obligate or compel the Borrower to pay a rate of interest exceeding the
Maximum Legal Rate, shall be without binding force or effect, at law or in
equity, to the extent only of the excess of interest over such Maximum Legal
Rate. In the event any interest is charged in excess of the Maximum Legal Rate
("Excess"), the Borrower acknowledges and stipulates that any such charge shall
be the result of an accidental and BONA FIDE error, and such Excess shall be,
first, applied to reduce the principal then unpaid hereunder; second, applied to
reduce the Obligations; and third, returned to the Borrower, it being the
intention of the parties hereto not to enter at any time into a usurious or
otherwise illegal relationship. The Borrower recognizes that, with fluctuations
in the Applicable Interest Rate and the Maximum Legal Rate, such an
unintentional result could inadvertently occur. By the execution of this
Agreement, the Borrower covenants that (i) the credit or return of any Excess
shall constitute the acceptance by the Borrower of such Excess, and (ii) the
Borrower shall not seek or pursue any other remedy, legal or equitable, against
GBC, based in whole or in part upon the charging or receiving of any interest in
excess of the maximum authorized by applicable law. For the purpose of
determining whether or not any Excess has been contracted for, charged or
received by GBC, all interest at any time contracted for, charged or received by
the GBC in connection with this Agreement shall be amortized, prorated,
allocated and spread in equal parts during the entire term of this Agreement.
(c) The provisions of this Exhibit C shall be deemed to be incorporated
into every document or communication relating to the Obligations which sets
forth or prescribes any account, right or claim or alleged account, right or
claim of the GBC with respect to the Borrower (or any other obligor in respect
of Obligations), whether or not any provision of this Exhibit C is referred to
therein. All such documents and communications and all figures set forth
therein shall, for the sole purpose of computing the extent of the liabilities
and obligations of the Borrower (or other obligor) asserted by the GBC
thereunder, be automatically recomputed by any Borrower or obligor, and by any
court considering the same, to give effect to the adjustments or credits
required by this Exhibit C.
(d) If the applicable state or federal law is amended in the future to
allow a greater rate of interest to be charged under this Agreement or any other
Loan Documents that is presently allowed by applicable state or federal law,
then the limitation of interest under this Exhibit C shall be increased to the
maximum rate of interest allowed by applicable state or federal law as amended,
which increase
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GREYROCK BUSINESS CREDIT SCHEDULE TO LOAN AND SECURITY AGREEMENT
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shall be effective hereunder on the effective date of such amendment, and all
interest charges owing to the GBC by reason thereof shall be payable upon
demand.
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