EXHIBIT 10.39.3
THIRD AMENDMENT AND WAIVER TO
LOAN AND SECURITY AGREEMENT
THIS THIRD AMENDMENT AND WAIVER TO LOAN AND SECURITY AGREEMENT dated as
of May 15, 2001 (the "THIRD AMENDMENT"), amends the Loan and Security Agreement
dated as of December 31, 1998, as amended by that certain Amendment to Loan and
Security Agreement dated as of June 30, 2000 and that Second Amendment to Loan
and Security Agreement, dated as of April 13, 2001 (as so amended, the "LOAN
AGREEMENT"), between NTFC Capital Corporation, a Delaware corporation (the
"LENDER"), and Startec Global Communications Corporation, a Delaware corporation
(the "BORROWER"), as the successor by merger to Startec Global Communications
Corporation, a Maryland corporation.
W I T N E S S E T H:
WHEREAS, Borrower has requested that the Loan Agreement be amended to
change the time period for satisfaction of certain covenants contained in
Article VII of the Loan Agreement, and that Lender waive certain Events of
Default arising out of (i) the failure of Borrower to meet the Minimum EBITDA
covenant for the quarter ended March 31, 2001, found in item (a)(4) to Schedule
7.14 to the Loan Agreement and (ii) the failure of Borrower meet the gross
margin covenant for the quarter ended March 31, 2001, found in item (a)(5) to
Schedule 7.14 to the Loan Agreement; and
WHEREAS, Lender is willing to amend the Loan Agreement to extend the
date for satisfaction of certain covenants contained in Article VII of the Loan
Agreement, as provided for herein in consideration of an amendment fee of
Twenty-Five Thousand Dollars ($25,000) (the "AMENDMENT FEE") and to waive the
Events of Defaults caused by (i) the failure of Borrower to meet the Minimum
EBITDA covenant for the quarter ended March 31, 2001, and (ii) the failure of
Borrower to meet the gross margin covenant for the quarter ended March 31, 2001,
but only on the terms and conditions set forth herein;
NOW, THEREFORE, in consideration of the agreements herein contained,
the parties hereto agree as follows:
ARTICLE I
AMENDMENTS TO LOAN AGREEMENT
1.1 AMENDMENT TO SECTION 7.18 OF THE LOAN AGREEMENT. Effective on, and subject
to the occurrence of, the Amendment Effective Date, Section 7.18 of the Loan
Agreement is hereby amended by deleting the date "April 20, 2001" therein and
replacing it with the date "May 18, 2001".
1.2 AMENDMENT TO SECTION 7.19 OF THE LOAN AGREEMENT. Effective on, and subject
to the occurrence of, the Amendment Effective Date, Section 7.19 of the Loan
Agreement is hereby amended by deleting the text of such section in its entirety
and replacing it with the following:
"7.19 LANDLORD CONSENTS. Borrower shall obtain and deliver to Lender
those landlord consents listed on EXHIBIT F to the Second Amendment not
later than June 12, 2001."
ARTICLE II
LIMITED WAIVER OF COVENANTS TO LOAN AGREEMENT
2.1. LIMITED WAIVER OF ARTICLE IX (EVENTS OF DEFAULT).
(a) Effective on, and subject to the occurrence of, the Amendment
Effective Date, Lender waives the Event of Default under Section 9.01(c) of
ARTICLE IX of the Loan Agreement caused solely by the failure of Borrower to
comply with the financial covenants required by items (a)(4) (Minimum EBITDA)
and (a)(5) (gross margin) of Schedule 7.14 of the Loan Agreement for the fiscal
quarter ended March 31, 2001.
(b) Effective on, and subject to the occurrence of, the Amendment
Effective Date, Lender waives the Event of Default under Section 9.01(c) of
ARTICLE IX of the Loan Agreement caused solely by the failure of Borrower to
comply with the covenant found in Section 7.18 of the Loan Agreement (as
modified by that certain Side Letter, dated as of April 20, 2001, between
Borrower and Lender) caused solely by Borrower's failure to deliver the required
legal opinion(s) under Section 7.18 of the Loan Agreement by May 4, 2001.
ARTICLE III
AFFIRMATIONS
3.1. REAFFIRMATION AND RELEASE.
(a) Borrower hereby represents, warrants and covenants that (i) the
representations and warranties of Borrower contained in the Loan Agreement and
the other Loan Documents are true and correct in all material respects with the
same effect as if now made (unless stated to relate solely to an earlier date,
in which case such representations and warranties were true and correct as of
such earlier date), (ii) except as set forth on EXHIBIT 4.16 attached hereto,
there has been no Material Adverse Change in the financial condition or results
of operations of Borrower since the date of the projections previously delivered
to Lender on March __, 2001, (iii) on the date hereof no Default or Event of
Default has occurred and is continuing or exists (except for the failure of
Borrower to comply with the financial covenants required by items (a)(4) and
(a)(5) of Schedule 7.14 to the Loan Agreement for the fiscal quarter ended March
31, 2001), or will occur or exist after giving effect to this Third Amendment,
(iii) the execution and terms of this Third Amendment have been duly authorized
by all necessary and appropriate corporate action for Borrower, and (iv)
Borrower's execution of this Third Amendment does not require the consent of or
giving of notice to any other Person other than those consents which Borrower
has already obtained.
(b) Borrower reaffirms that the Loan Agreement, as amended hereby, and
the other Loan Documents to which it is a party are and remain the valid and
binding obligations of
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Borrower, enforceable against Borrower in accordance with their respective
terms. Borrower acknowledges that Lender is not waiving, and Borrower is
required to and shall comply with, the financial covenants for the fiscal
quarter ended March 31, 2001, required by Section 7.14 and Schedule 7.14 of the
Loan Agreement in effect on and after the Amendment Effective Date (other than
the financial covenants required by items (a)(4) and (a)(5) of Schedule 7.14 to
the Loan Agreement for the fiscal quarter ended March 31, 2001).
(c) Borrower hereby acknowledges and stipulates it has no claims or
causes of action against Lender, and/or its officers, directors, agents, and/or
employees, of any kind whatsoever, and hereby releases Lender and its officers,
directors, agents, and employees from any and all claims, causes of action,
demands and liabilities of any kind whatsoever, whether direct or indirect,
fixed or contingent, liquidated or non-liquidated, disputed or undisputed, known
or unknown, arising under contract, warranty, tort (including negligence),
strict liability or otherwise, which Borrower has now or may acquire in the
future under any event, circumstance, action, failure to act, or otherwise from
any time prior to, and through, the date of this Third Amendment, whether
relating in any way to the Loan Agreement, any other Loan Document(s), any
Collateral or otherwise.
ARTICLE IV
CONSIDERATION
4.1 CONSIDERATION. In consideration of Lender's agreement to amend the Loan
Agreement pursuant to this Third Amendment, Borrower shall pay Lender the
Amendment Fee.
ARTICLE V
CONDITIONS TO EFFECTIVENESS
5.1. AMENDMENT EFFECTIVE DATE. This Third Amendment shall become effective as
of the date first above written (the "AMENDMENT EFFECTIVE DATE"), when Lender
shall have received:
(a) counterparts of this Third Amendment duly executed by Borrower and
Lender;
(b) a certificate and its attachments (the "OFFICERS' CERTIFICATE")
dated the date first above written executed by a Responsible Officer of Borrower
and a Responsible Officer of each of the Guarantors certifying that the
resolutions attached to the Officers' Certificate are true and correct copies of
all corporate action necessary to be taken by Borrower and the Guarantors to
authorize the execution and delivery of this Third Amendment or Consent thereto,
and such resolutions remain in full force and effect; and the Responsible
Officers of Borrower and of each of the Guarantors whose names, true signatures
and incumbency are set forth therein are authorized to execute and deliver this
Third Amendment or Consent thereto, as applicable; and
(c) the Amendment Fee and confirmation from Lender's counsel that all
fees and expenses of Lender's counsel outstanding on the date hereof have been
paid in full;
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ARTICLE VI
MISCELLANEOUS
6.1. CROSS REFERENCES. References in this Third Amendment to any article or
section are, unless otherwise specified, to such article or section of this
Third Amendment.
6.2. INSTRUMENT PURSUANT TO LOAN AGREEMENT. This Third Amendment is a Loan
Document executed pursuant to the Loan Agreement and shall (unless otherwise
expressly indicated therein) be construed, administered, and applied in
accordance with all of the terms and provisions of the Loan Agreement (including
that it shall be governed by the laws of the State of New York and that Borrower
shall pay, on demand, all out-of-pocket expenses (including reasonable
attorneys' fees) of Lender in connection herewith). Any term or provision of and
any modification or waiver effected by this Third Amendment may be modified in
any manner by an instrument in writing executed by Borrower and Lender. Except
as expressly amended or waived hereby, all of the representations, warranties,
terms, covenants and conditions of the Loan Agreement shall remain unmodified
and unwaived. The modifications and waiver set forth herein shall be limited
precisely as provided for herein to the provisions expressly modified or waived
herein and shall not be deemed to be an amendment of, consent to or modification
or waiver of any other term or provision of the Loan Agreement or any other Loan
Document or of any transaction or further or future action on the part of
Borrower or any Guarantor which could require the consent of Lender under the
Loan Agreement or any other Loan Document. Unless otherwise defined herein or
the context otherwise requires, capitalized terms used in this Third Amendment,
including its preamble and recitals, have the meanings provided in the Loan
Agreement.
6.3. SUCCESSORS AND ASSIGNS. This Third Amendment shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
assigns.
6.4. COUNTERPARTS. This Third Amendment may be executed by the parties hereto
in several counterparts which shall be executed by Borrower and Lender, as the
case may be, all of which shall be deemed to be an original and which shall
constitute together but one and the same agreement.
6.5. EVENT OF DEFAULT. It is understood and agreed that any breach by Borrower
or any Guarantor of any representation, warranty or covenant contained herein or
the Officers' Certificate shall constitute an Event of Default.
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IN WITNESS WHEREOF, the parties hereto have caused this Third Amendment
to be executed by the respective officers hereunder duly authorized to be
effective as of the day and year first above written.
BORROWER:
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STARTEC GLOBAL COMMUNICATIONS CORPORATION
BY: /s/
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TITLE:
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LENDER:
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NTFC CAPITAL CORPORATION
BY: /s/
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TITLE:
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