LOAN AND SECURITY AGREEMENT
by and between
XXXXXXX X. XXXXXXX
("Borrower")
and
STARTEC GLOBAL COMMUNICATIONS CORPORATION
("Lender")
June 30, 1998
LOAN AND SECURITY AGREEMENT
THIS LOAN AND SECURITY AGREEMENT (the "Agreement") is made as of June 30,
1998 by and between Xxxxxxx X. Xxxxxxx ("Borrower"), and Startec Global
Communications Corporation, a Maryland corporation ("Lender").
RECITALS
A. Whereas, Borrower desires to borrow funds from Lender and Lender is
willing to establish such arrangements for and make loans to Borrower, on the
terms and conditions set forth below.
B. Whereas, the parties desire to define the terms and conditions of their
relationship and to reduce their agreements to writing.
NOW, THEREFORE, in consideration of the promises and covenants contained in
this Agreement, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows:
ARTICLE I
DEFINITIONS
As used in this Agreement, the following terms shall have the following
meanings:
SECTION 1.1. AGREEMENT. "Agreement" means this Loan and Security Agreement,
as it may be amended or supplemented from time to time.
SECTION 1.2. APPLICABLE INTEREST RATE. "Applicable Interest Rate" means an
interest rate of 7.87% per annum.
SECTION 1.3. BORROWED MONEY. "Borrowed Money" means any obligation to repay
money, any indebtedness evidenced by this Loan and Security Agreement.
SECTION 1.4. BORROWER. "Borrower" has the meaning set forth in the
Preamble.
SECTION 1.5. BUSINESS DAY. "Business Day" means any day on which financial
institutions are open for business in the State of Maryland, excluding Saturdays
and Sundays.
SECTION 1.6. CLOSING DATE. "Closing" and "Closing Date" mean the date on
which this Agreement is executed by and between the Borrower and the Lender.
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SECTION 1.7. LENDER. "Lender" has the meaning set forth in the Preamble.
SECTION 1.8. LOAN. "Loan" has the meaning set forth in Section 2.1(a).
SECTION 1.9. LOAN DOCUMENTS. "Loan Documents" means and includes this
Agreement and each and every other document now or hereafter delivered in
connection therewith, as any of them may be amended, modified, or supplemented
from time to time.
SECTION 1.10. PERSON. "Person" means an individual, partnership,
corporation, trust, joint venture, joint stock company, limited liability
company, association, unincorporated organization, Governmental Authority, or
any other entity.
SECTION 1.11. TERM. "Term" has the meaning set forth in Section 2.3.
ARTICLE II
LOAN
SECTION 2.1. TERMS.
(a) Borrower and Lender agree that the aggregate principal amount
given by Lender to Borrower hereunder (the "Loan") will be Five Hundred and
Fifty Thousand Dollars ($550,000.00).
(b) Borrower hereby agrees to repay Lender the principal amount of the
Loan pursuant to the terms and conditions set forth herein. Borrower further
agrees to pay the Lender interest on the Loan from the date hereof until repaid,
at a rate per annum in arrears (on the basis of the actual number of days
elapsed over a year of 360 days) equal to the Applicable Interest Rate.
SECTION 2.2. PAYMENTS. Principal payable on account of this Loan shall be
due and payable by Borrower to Lender immediately upon the earliest of (i)
December 31, 1998 or (ii) the termination of this Agreement pursuant to Section
2.4(b) hereof. Interest shall be due and payable on the last Business Day of
each calendar quarter or upon the termination of this Agreement. Pursuant to
Section 2.4(b), the Loan may be prepaid in whole or in part at any time or from
time to time without premium or penalty.
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SECTION 2.3. TERM.
(a) This Agreement shall be in effect from the Closing Date until
December 31, 1998 ("the Term"), unless terminated as provided in this Section,
and this Agreement may be renewed for one-year periods thereafter upon the
mutual written agreement of the parties.
(b) Borrower may terminate this Agreement at any time, provided that
as of the effective date of such termination, Borrower shall pay to Lender (in
addition to accrued interest) the full amount of any outstanding principal then
due and owning on the Loan.
SECTION 2.4. SECURITY
(a) Borrower and Lender agree that this Loan shall be secured by, and
Lender shall have legal recourse to, all of Borrower's personal estate,
including, but not limited to all now-owned and hereafter acquired real or
personal property, deposit accounts, money, insurance proceeds, securities and
rights to payment of every kind and description, and all of Borrower's contract
rights, and all of Borrower's rights, remedies, interest, security and liens, in
any real or personal property. Lender's right of recourse to the security
described herein shall be secondary to any pre-existing security interests in
such property held by any other Persons.
ARTICLE III
MISCELLANEOUS
SECTION 3.1. ENTIRE AGREEMENT; AMENDMENTS. This Agreement constitutes the
full and entire understanding and agreement among the parties with regard to
their subject matter and supersedes all prior written or oral agreements,
understandings, representations and warranties made with respect thereto. No
amendment, supplement or modification of this Agreement or any waiver of any
provision thereof shall be made except in writing executed by the party against
whom enforcement is sought.
SECTION 3.2. NOTICES. Any notice or other communication required or
permitted hereunder shall be in writing and personally delivered, mailed by
registered or certified mail (return receipt requested and postage prepaid),
sent by telecopier (with a confirming copy sent by regular mail), or sent by
prepaid overnight courier service, and addressed to the relevant party at its
address set forth below, or at such other address as such party may, by written
notice, designate as its address for purposes of notice hereunder.
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(a) If to Lender, at:
Startec Global Communications Corporation
00000 Xxxxx Xxxx Xxxxx
Xxxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxx Xxx, Vice President and Controller
Telephone: (000) 000-0000
(b) If to Borrower, at:
Xxxxxxx X. Xxxxxxx
000 Xxxxxxxx Xx.
Xxxxxx, XX 00000
Attention: Xxxxxxx Xxxxxxx
Telephone: (000) 000-0000
If mailed, notice shall be deemed to be given five (5) days after being sent, if
sent by personal delivery or telecopier, notice shall be deemed to be given when
delivered, and if sent by prepaid courier, notice shall be deemed to be given on
the next Business Day following deposit with the courier.
SECTION 3.3. SEVERABILITY. If any term, covenant or condition of this
Agreement, or the application of such term, covenant or condition to any party
or circumstance shall be found by a court of competent jurisdiction to be, to
any extent, invalid or unenforceable, the remainder of this Agreement and the
application of such term, covenant, or condition to parties or circumstances
other than those as to which it is held invalid or unenforceable, shall not be
affected thereby, and each term, covenant or condition shall be valid and
enforced to te fullest extent permitted by law. Upon determination that any such
term, covenant or condition is invalid, illegal or unenforceable, the parties
hereto shall amend this Agreement so as to effect the original intent of the
parties as closely as possible in an acceptable manner.
SECTION 3.4 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, but all of which
together shall constitute but one instrument.
SECTION 3.5. INTERPRETATION. No provision of this Agreement or any other
Loan Document shall be interpreted or construed against any party because that
party or its legal representative drafted that provision. The titles of the
paragraphs of this Agreement are for convenience of reference only and are not
to be considered in construing this Agreement. Any pronoun used in this
Agreement shall be deemed to include singular and plural and masculine, feminine
and neuter gender as the case may be. The words "herein," "hereof," and
"hereunder" shall be deemed to refer to this entire Agreement, except as the
context otherwise requires.
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SECTION 3.6. THIRD PARTIES. No rights are intended to be created hereunder
for the benefit of any third party donee, creditor, or incidental beneficiary of
Borrower. Nothing contained in this Agreement shall be construed as a delegation
to Lender of Borrower's duty of performance, including, without limitation,
Borrower's duties under any account or contract in which Lender has a security
interest.
SECTION 3.7. CONSTRUCTION. The validity and construction of this Agreement
and all matters pertaining hereto shall be determined in accordance with the
laws of the State of Maryland.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
as of the date first written above.
LENDER:
ATTEST: STARTEC GLOBAL COMMUNICATIONS,
CORPORATION
a Maryland corporation
By: /s/ Xxxxxxx Xxx By: /s/ Ram Xxxxxxx
--------------- ---------------
Name: Xxxxxxx Xxx Name: Ram Xxxxxxx
Title: Vice President and Controller Title: President and C.E.O.
BORROWER:
ATTEST: XXXXXXX X. XXXXXXX
By: /s/ Xxxxxxx Xxx By: /s/ Pabhav X. Xxxxxxx
--------------- ---------------------
Name: Xxxxxxx Xxx
Title: Vice President and Controller
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