MODIFICATION AGREEMENT
THIS AGREEMENT is made as of the 24TH day of February, 1997, by and among
PNC BANK, NATIONAL ASSOCIATION, a national banking association with offices at
0000 Xxxxxx Xxxxxx, Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000 (the "Bank") , and TEL-SAVE
HOLDINGS, INC., TS INVESTMENT CORPORATION and TEL-SAVE, INC. (the "Borrower")
BACKGROUND
Bank agreed to make available to Borrower a line of credit in the principal
amount of $50,000,000 (the "Line of Credit") pursuant to a letter loan agreement
dated March 22, 1996 (the "Loan Agreement"). The Line of Credit is evidenced by
Borrower's promissory note dated March 22, 1996 (the "Note") .
Bank and Borrower desire to amend the Note and Loan Agreement to increase
the amount of the Line of Credit and to make certain other modifications
thereto, upon the terms and conditions set forth herein.
NOW, THEREFORE, the parties hereto, intending to be legally bound hereby,
agree as follows:
AGREEMENT
1. Terms. Capitalized terms used herein and not otherwise defined herein
shall have the meanings given to such terms in the Loan Agreement.
2. Restated Note. Concurrently with the execution and delivery of
this Agreement, Borrower shall execute and deliver to Bank a restated note (the
"Restated Note") , evidencing the Line of Credit in the principal amount of
$60,000,000 in the form of Exhibit A attached hereto. Upon receipt by Bank of
the Restated Note, the original Note shall be cancelled and returned to the
Borrower; the Line of Credit and all accrued and unpaid interest on the original
Note shall thereafter be evidenced by the Restated Note; and all references to
the "Note," evidencing the Line of Credit in any documents relating thereto
shall thereafter be deemed to refer to the Restated Note. Without duplication,
the Restated Note shall in no way extinguish the Borrower's unconditional
obligation to repay all indebtedness, including accrued and unpaid interest,
evidenced by the original Note.
3. Amendments to Loan Agreement. The Loan Agreement is hereby amended as
follows:
(a) Paragraph 1 of the Loan Agreement is hereby amended such that
the maximum amount of the Line of Credit is hereby increased from $50,000,000 to
$60,000,000.
(b) The first sentence of Paragraph 5(b) of the Loan Agreement is
hereby amended and restated to read in full as follows:
(b) Euro-Rate Option. A rate of interest per annum (computed on
the basis of a year of 360 days and the actual number of days elapsed)
equal to the sum of (i) the Euro-Rate plus (ii) (A) eighty-seven and
one-half (87.5) basis points (7/8%) per annum, for Loans up to and
including $50,000,000, and (B) one hundred (100) basis points (1%) per
annum, for Loans over $50,000,000, in each case, for the Euro-Rate
Interest Period in an amount equal to the Loan bearing interest under
the Euro-Rate option and having a comparable maturity as determined at
or about 11 a.m. (eastern time) two (2) Business Days prior to the
commencement of the Euro-Rate Interest Period.
3. Loan Documents. Except where the context clearly requires otherwise, all
references to the Loan Agreement in the Note or any other document delivered to
Bank in connection therewith shall be to the Loan Agreement as amended by this
Agreement.
4. Borrower's Ratification. Borrower agrees that it has no defenses or
set-offs against the Bank, its officers, directors, employees, agents or
attorneys with respect to the Note and the Loan Agreement, all of which are in
full force and effect and shall remain in full force and effect unless and until
modified or amended in writing in accordance with their terms. Borrower hereby
ratifies and confirms its obligations under the Note and the Loan Agreement and
agrees that the execution and the delivery of this Agreement does not in any way
diminish or invalidate any of its obligations thereunder. WITHOUT LIMITING THE
GENERALITY OF THE FOREGOING, BORROWER HEREBY RATIFIES AND CONFIRMS THE WARRANT
OF ATTORNEY GIVEN IN THE NOTE.
5. Renresentations and Warranties. Borrower hereby certifies that:
(a) except as otherwise previously disclosed to Bank, the
representations and warranties made in the Note and the Loan Agreement are true
and correct as of the date hereof.
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(b) no Event of Default under the Note or the Loan Agreement and no
event which with the passage of time or the giving of notice or both could
become an Event of Default, exists on the date hereof; and
(c) this Agreement has been duly authorized, executed and delivered so as to
constitute the legal, valid and binding obligation of Borrower, enforceable in
accordance with its terms.
All of the above representations and warranties shall survive the making of this
Agreement.
6. No Waiver. This Agreement does not and shall not be deemed to
constitute a waiver by Bank of any Event of Default under the Note or Loan
Agreement, or of any event which with the passage of time or the giving of
notice or both would constitute an Event of Default, nor does it obligate Bank
to agree to any further modifications of the terms of the Note and Loan
Agreement or constitute a waiver of any of Bank's other rights or remedies.
7. Conditions to Effectiveness of Agreement. Bank's willingness to agree to
the increase and modifications contained herein are subject to the prior
satisfaction of the following conditions:
(a) execution of this Agreement, the Restated Note and a Disclosure
of Confession of Judgment, each in form and substance satisfactory to the Bank;
and
(b) delivery of resolutions of Borrowers authorizing execution and
delivery of this Agreement and the Restated Note.
8. Miscellaneous
(a) All terms, conditions, provisions and covenants in the Note, the
Loan Agreement, and all other documents delivered to Bank in connection
therewith shall remain unaltered and in full force and effect except as modified
or amended hereby. To the extent that any term or provision of this Agreement is
or may be deemed expressly inconsistent with any term or provision in the Loan
Agreement, the Note or any other document executed in connection therewith, the
terms and provisions hereof shall control.
(b) This Agreement shall be governed by and construed according to
the laws of the Commonwealth of Pennsylvania.
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(c) This Agreement shall inure to the benefit of, and be binding
upon, the parties hereto and their respective successors and assigns and may be
executed in one or more counterparts, each of which shall be deemed an original,
but all of which together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
day and year first above written.
BORROWER
[SEAL] TEL-SAVE HOLDINGS, INC.
Attest: /s/ Xxxxxxxx X. Lawn IV By: /s/ Xxxxxx X. Xxxxxx
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Title: Secretary Title: CFO
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[SEAL] TS INVESTMENT CORPORATION
Attest: /s/ Xxxxxxxx X. Lawn IV By: /s/ Xxxxxx X. Xxxxxx
----------------------------- ------------------------------
Title: Secretary Title: CFO
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[SEAL] TEL-SAVE, INC.
Attest: /s/ Xxxxxxxx X. Lawn IV By: /s/ Xxxxxx X. Xxxxxx
----------------------------- ------------------------------
Title: Secretary Title: CFO
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BANK
PNC BANK, NATIONAL ASSOCIATION
By: /s/ Xxxxx X. Xxxxxxx
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Title: Vice President
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