AMENDMENT NUMBER SIX TO
LOAN AND SECURITY AGREEMENT
This AMENDMENT NUMBER SIX TO LOAN AND SECURITY AGREEMENT (this "Amendment")
is entered into as of March 15, 1999, by and between FOOTHILL CAPITAL
CORPORATION, a California corporation ("Foothill"), with a place of business
located at 00000 Xxxxx Xxxxxx Xxxxxxxxx, Xxxxx 0000, Xxx Xxxxxxx, Xxxxxxxxxx
00000-0000, on the one hand, and, on the other hand, COMMUNICATION TELESYSTEMS
INTERNATIONAL, dba WORLDxCHANGE Communications, a California corporation
("WXCC"), with its chief executive office located at 0000 Xxxxxx Xxxxx Xxxx, Xxx
Xxxxx, Xxxxxxxxxx 00000, WORLDxCHANGE COMMUNICATIONS, INC., a Canadian
corporation ("WXC"), with its chief executive office located at 0000 Xxxxxx
Xxxxx Xxxx, Xxx Xxxxx, Xxxxxxxxxx 00000, CTS TELCOM HOLDINGS, INC., a Delaware
corporation ("Holdings"), with its chief executive office located at 0000 Xxxxxx
Xxxxx Xxxx, Xxx Xxxxx, Xxxxxxxxxx 00000 and CTS TELCOM, INC., a Florida
corporation ("CTST"), with its chief executive office located at 0000 Xxxxxx
Xxxxx Xxxx, Xxx Xxxxx, Xxxxxxxxxx 00000 (WXCC, WXC, Holdings, and CTST, and each
of them, and any one or more of them, jointly and severally, individually and
collectively, "Borrower"), with reference to the following facts:
A. WHEREAS, Foothill, as lender, and Borrower are parties to that
certain Loan and Security Agreement, dated as of March 11, 1997, as
amended by that certain Amendment Number One to Loan and Security
Agreement, dated as of December 31, 1997, as amended by that certain
Amendment No. Two to the Loan and Security Agreement, dated as of
February 20, 1998, as amended by that certain Amendment Number Three
to Loan and Security Agreement, dated as of April 27, 1998, as amended
by that certain Amendment Number Four to Loan and Security Agreement,
dated as of August 25, 1998, as amended by that certain Amendment
Number Five to Loan and Security Agreement, dated as of December 29,
1998, (as from time to time amended, modified, supplemented, renewed,
extended, or restated, including, without limitation, by this
Amendment Number Six and by the prior amendments to the aforesaid loan
agreement specifically referred to above, the "Loan Agreement");
B. WHEREAS, Holdings as "New Subsidiary," together with WXCC, WXC,
and CTST on the one hand and Foothill on the other hand are parties to
that certain Subsidiary Joinder, dated as of February 4, 1999,
pursuant to which Holdings has agreed to become a party to the Loan
Agreement and the other Loan Documents;
C. WHEREAS, Borrower has requested Foothill to amend the Loan
Agreement to extend the Special Bridge Advance Component Termination
Date and revise the amortization of the Reducing Amount;
D. WHEREAS, Foothill is willing to (i) so amend the Loan Agreement
in accordance with the terms and conditions hereof to extend the
Special Bridge Advance Component Termination Date and revise the
amortization of the Reducing Amount as set forth herein;
1.
E. NOW, THEREFORE, in consideration of the above recitals and the
mutual promises contained herein, Foothill and Borrower hereby agree
as follows:
1. INITIALLY CAPITALIZED TERMS.
All capitalized terms used herein and not defined herein shall have
the meanings ascribed to them in the Loan Agreement, as amended hereby.
2. AMENDMENTS TO THE LOAN AGREEMENT.
a. SECTION 1.1 of the Loan Agreement hereby is amended by
adding the following defined terms in alphabetical order:
"HOLDINGS means, CTS Telcom Holdings, Inc., a Delaware
corporation."
"SIXTH AMENDMENT means, that certain Amendment Number Six to Loan
and Security Agreement, dated as of March 15, 1999, between Foothill and
Borrower."
b. SECTION 1.1 of the Loan Agreement is hereby amended by
deleting the following defined terms in their entirety and replacing them in
their entirety with the defined terms set forth below in alphabetical order:
"BORROWER means WXCC, WXC, Holdings, and CTST, and each of
them, and any one or more of them, collectively and individually, and
jointly and severally, and any other Person that now or in the future
executes and delivers a joinder to this Agreement as a Borrower."
"GUARANTY REAFFIRMATION AND CONSENT" means that certain
guaranty reaffirmation and consent, dated as of March 15, 1999,
entered into by each of the Guarantors in favor of Foothill."
"LOAN DOCUMENTS means, this Agreement, the First Amendment,
the Second Amendment, the Third Amendment, the Fourth Amendment, the
Fifth Amendment, the Sixth Amendment, the Canadian Security
Agreements, the Pledge Agreements, the Disbursement Letter, the
Guarantees, the Guaranty Reaffirmation and Consent, the Tel-Save
Intercreditor Agreement, the Lockbox Agreements, any Mortgages
hereafter delivered by Borrower to Foothill, the Suretyship Agreement,
any note or notes executed by Borrower and payable to Foothill, and
any other agreement entered into, now or in the future, in connection
with this Agreement."
"REDUCING AMOUNT means, as of any date of determination thereof,
$5,000,007.01, as of the Closing Date, reduced cumulatively on the first
and the fifteenth day of each calendar month, commencing April 1, 1999, and
continuing thereafter on the first and the fifteenth day of each succeeding
calendar month, by a bi-monthly reduction of $150,000.00."
2.
"SPECIAL BRIDGE ADVANCE COMPONENT TERMINATION DATE means the
earlier of (a) the Termination Date, and (b) the first date that Foothill
receives a signed written notice from Borrower stating in substance that
Borrower has elected irrevocably to terminate, and reduce to Zero Dollars,
the Special Bridge Advance Component."
3. REPRESENTATIONS AND WARRANTIES. Borrower hereby represents and
warrants to Foothill that (a) the execution, delivery, and performance of this
Amendment and of the Loan Agreement, as amended by this Amendment, are within
its corporate powers, have been duly authorized by all necessary corporate
action, and are not in contravention of any law, rule, or regulation, or any
order, judgment, decree, writ, injunction, or award of any arbitrator, court, or
governmental authority, or of the terms of its charter or bylaws, or of any
contract or undertaking to which it is a party or by which any of its properties
may be bound or affected, and (b) this Amendment and the Loan Agreement, as
amended by this Amendment, constitute Borrower's legal, valid, and binding
obligation, enforceable against Borrower in accordance with its terms.
4. CONDITIONS PRECEDENT TO AMENDMENT. The satisfaction of each of
the following on or before April 1, 1999, shall constitute conditions precedent
to the effectiveness of this Amendment:
a. Each Guarantor shall have executed and delivered the
Guaranty Reaffirmation and Consent in form and substance satisfactory to
Foothill;
b. Foothill shall have received an amendment fee in the amount
of $10,000 in connection herewith;
c. Borrower shall have executed and delivered an officer's
certificate with respect to this Sixth Amendment in form and substance
satisfactory to Foothill;
d. Foothill shall have received the acknowledgment and
agreement of each of its Participants in the secured credit facilities extended
to Borrower under the Agreement to this Amendment;
e. The representations and warranties in this Amendment, the
Loan Agreement as amended by this Amendment, and the other Loan Documents shall
be true and correct in all respects on and as of the date hereof, as though made
on such date (except to the extent that such representations and warranties
relate solely to an earlier date);
f. No Event of Default or event which with the giving of notice
or passage of time would constitute an Event of Default shall have occurred and
be continuing on the date hereof, nor shall result from the consummation of the
transactions contemplated herein;
g. No injunction, writ, restraining order, or other order of
any nature prohibiting, directly or indirectly, the consummation of the
transactions contemplated herein shall have been issued and remain in force by
any governmental authority against Borrower, Foothill, or any of their
Affiliates;
h. The Collateral shall not have declined materially in value
from the values set forth in the most recent appraisals or field examinations
previously done by Foothill; and
3.
i. All other documents and legal matters in connection with the
transactions contemplated by this Amendment shall have been delivered or
executed or recorded and shall be in form and substance satisfactory to Foothill
and its counsel.
5. EFFECT ON LOAN AGREEMENT. The Loan Agreement, as amended hereby,
shall be and remain in full force and effect in accordance with its respective
terms and hereby is ratified and confirmed in all respects. The execution,
delivery, and performance of this Amendment shall not operate as a waiver of or,
except as expressly set forth herein, as an amendment, of any right, power, or
remedy of Foothill under the Loan Agreement, as in effect prior to the date
hereof. The consents contained herein are limited to the specifics hereof,
shall not apply with respect to any facts or occurrences other than those on
which each such consents are based, shall not excuse future non-compliance with
the Loan Agreement or any other Loan Document, (as they may from time to time be
amended), except and only to the extent expressly set forth herein, shall not
operate as a waiver of an amendment of any right, power or remedy of Foothill,
nor as a consent to any further or other matter, under any of the Loan
Documents.
6. FURTHER ASSURANCES. Borrower shall, and shall cause Guarantor
to, execute and deliver all agreements, documents, and instruments, in form and
substance satisfactory to Foothill, and take all actions as Foothill may
reasonably request from time to time, to perfect and maintain the perfection and
priority of Foothill's security interests in the Collateral, and to fully
consummate the transactions contemplated under this Amendment and the Loan
Agreement, as amended by this Amendment.
7. MISCELLANEOUS.
a. Upon the effectiveness of this Amendment, each reference in
the Loan Agreement to "this Agreement", "hereunder", "herein", "hereof" or words
of like import referring to the Loan Agreement shall mean and refer to the Loan
Agreement as amended by this Amendment.
b. Upon the effectiveness of this Amendment, each reference in
the Loan Documents to the "Loan Agreement", "thereunder", "therein", "thereof"
or words of like import referring to the Loan Agreement shall mean and refer to
the Loan Agreement as amended by this Amendment.
c. This Amendment may be executed in any number of
counterparts, all of which taken together shall constitute one and the same
instrument and any of the parties hereto may execute this Amendment by signing
any such counterpart.
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4.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed as of the date first written above.
FOOTHILL CAPITAL CORPORATION,
a California corporation
By:
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Title:
---------------------------
COMMUNICATION TELESYSTEMS
INTERNATIONAL dba
WORLDxCHANGE COMMUNICATIONS,
a California corporation
By:
------------------------------
Title:
--------------------------
WORLDxCHANGE COMMUNICATIONS,
INC., a Canadian corporation
By:
------------------------------
Title:
----------------------------
CTS TELCOM HOLDINGS, INC.,
a Delaware corporation
By:
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Title:
---------------------------
CTS TELCOM, INC.,
a Florida corporation
By:
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Title:
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5.
