Exhibit 10.23(b)
FORM OF
ADDITION OF LENDER AND CONSENT
AND
AMENDMENT TO LOAN AND SECURITY AGREEMENT
This ADDITION OF LENDER AND CONSENT AND AMENDMENT TO LOAN AND SECURITY
AGREEMENT, dated as of , 1999 (this "Consent and Amendment"), is by and
among PAC-WEST TELECOMM, INC., a California corporation ("Borrower"); UNION BANK
OF CALIFORNIA, N.A, as Lender under the Loan Agreement described below (in such
capacity as Lender under the Loan Agreement, "UBOC"); GENERAL ELECTRIC CAPITAL
CORPORATION, as a Lender adding an additional Commitment under the terms of the
Loan Agreement described below (in such capacity as Lender under the Loan
Agreement, "GE Capital," and together with UBOC, "Lenders"); and UNION BANK OF
CALIFORNIA, N.A., as Administrative Agent for the Lenders (in such capacity as
administrative agent, "Agent").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, Borrower, UBOC, as Lender, and Agent are parties to that certain
Loan and Security Agreement, dated as of June 15, 1999 (as such agreement may be
from time to time amended, supplemented or restated the "Loan Agreement");
WHEREAS, capitalized terms used herein and not defined herein shall have the
meanings given them in the Loan Agreement;
WHEREAS, on the Effective Date (as described below), GE Capital has agreed to
provide an Additional Commitment in the amount of Twenty Million Dollars
($20,000,000) under the terms of the Loan Agreement, and subject to the terms
and conditions herein;
WHEREAS, in connection with providing its Additional Commitment, GE Capital has
requested that Borrower, UBOC and Agent agree to certain amendments to the terms
of the Loan Agreement, and Borrower, UBOC and Agent have agreed to such
amendments requested by GE Capital and to that end, the parties hereto have
agreed to amend the Loan Agreement as provided herein; and
WHEREAS, Borrower has requested that each Lender and Agent consent to
certain amendments to the terms of the Loan Agreement with respect to
restrictions on its capital expenditures, and each Lender and Agent has agreed
to such amendments and to that end, the parties hereto have agreed to amend the
Loan Agreement as provided herein.
A G R E E M E N T:
- - - - - - - - -
NOW, THEREFORE, in consideration of the mutual covenants and promises set
forth herein, and for other good and valuable consideration, the receipt and
sufficiency of which is hereby
mutually acknowledged, the parties hereto, intending to be legally bound hereby,
agree as follows:
1. Confirmation. The parties hereby confirm the accuracy of the Recitals
set forth above. Each of the parties hereby ratifies, approves and confirms the
Loan Agreement and each Loan Document, as described therein, and hereby
acknowledges and agrees that the Loan Agreement and each of the Loan Documents
remains in full force and effect.
2. Addition of Commitment.
(a) Additional Commitment. Upon satisfaction of each condition
precedent set forth in Section 4 hereof (the "Effective Date"), GE Capital
hereby agrees to provide an Additional Commitment under the terms of the Loan
Agreement, in the amount of twenty million dollars ($20,000,000). From and
after the Effective Date, the parties hereto agree that GE Capital shall be a
Lender under the Loan Agreement and each of the Loan Documents, and shall be
entitled to all of the rights and benefits of a Lender thereunder, and shall be
subject to all of the agreements of the Lenders thereunder. From and after the
Effective Date, (i) the Commitment under the Loan Agreement shall mean and
include the Commitment of UBOC, in the amount of twenty million dollars
($20,000,000) and the Commitment of GE Capital, in the amount of twenty million
dollars ($20,000,000); and (ii) the Maximum Amount of the Commitments shall
equal forty million dollars ($40,000,000).
(b) Representation and Warranty by GE Capital; Consent. GE Capital
hereby represents and warrants that GE Capital is exempt under the California
usury laws as a licensed finance lender. Borrower, UBOC and Agent hereby
consent to GE Capital becoming a Lender under the Loan Agreement,
notwithstanding anything to the contrary contained in the Loan Agreement.
(c) Address and Wire Transfer Information. The address for notice and
wire transfer information for GE Capital is as set forth on the signature page
for GE Capital, below. The parties agree that the signature page of this
Consent and Amendment shall suffice as the signature page of GE Capital, as a
Lender providing an Additional Commitment, under the terms of Section 13.4 of
the Loan Agreement.
3. Amendments. Effective on the Effective Date, the parties hereto agree
that the Loan Agreement shall be amended as follows:
(a) Definition of "Restricted Investment(s) or Expenditure(s)." The
definition of "Restricted Investment(s) or Expenditure(s)" in the Loan Agreement
is amended to read in full as follows:
""Restricted Investment(s) or Expenditure(s)" means any acquisition of
property by Borrower in exchange for cash or other property (including if
in the form of an acquisition of stock, debt or other indebtedness or
obligation), or the acquisition of any other property, or a loan, advance,
capital contribution or subscription. Notwithstanding the foregoing, the
following investments and other acquisitions shall not be deemed Restricted
Investments or Expenditures for purposes of Section 9.9(c) hereof (so long
as, prior to and subsequent to any such investment or acquisition, Borrower
is and remains in compliance with all of its covenants herein, including
all financial covenants): (a) capital expenditures not to exceed fifty
million dollars ($50,000,000) in the aggregate for the Fiscal Year ending
December 31, 1999, and sixty million dollars ($60,000,000) in the aggregate
for each of the Fiscal Years ending December 31, 2000 and December 31,
2001; (b) in addition to the capital expenditures described in clause (a),
capital expenditures in an aggregate amount not to exceed the net proceeds
of any initial public offering of Borrower's equity securities (provided
that such public offering is made on or before June 30, 2000), plus capital
expenditures in an aggregate amount not to exceed the proceeds of
Borrower's settlement with Pacific Xxxx in the amount of twenty million
dollars ($20,000,000) made in September, 1999, and carried as an off
balance sheet receivable; (c) acquisitions of businesses in the same line
of business as Borrower, in an aggregate amount not to exceed fifteen
million dollars ($15,000,000) per Fiscal Year, provided that Borrower is in
compliance with all of its covenants hereunder at the time of such
acquisition, and Borrower has demonstrated to Agent that it shall remain in
compliance with its covenants hereunder after and as a result of such
acquisition; (d) Equipment, inventory, supplies and proprietary assets
purchased, leased or licensed in the ordinary course of Borrower's
business, including fiber transport lines; (e) current assets arising from
the sale or lease of goods or the rendition of services in the ordinary
course of business of Borrower, exclusive, however, of Intercompany
Accounts; (f) direct obligations of the United States of America or any
agency thereof; provided that such obligations mature within two (2) years
from the date of acquisition thereof; (g) obligations guaranteed by the
United States of America, such as United States Treasury Bills, Notes,
Bonds and Strips; provided that such obligations mature within two (2)
years from the date of acquisition thereof;, (h) obligations of the
Government National Mortgage Association, Tennessee Valley Authority or
World Bank; provided that such obligations mature within two (2) year from
the date of acquisition thereof; (i) obligations of government sponsored
enterprises, such as Farm Credit System, Federal National Mortgage
Association, Federal Home Loan Mortgage Corporation, Federal Home Loan
Bank, Student Loan Marketing Association, Financing Corporation, The
Resolution Funding Corporation, Farm Credit System Financial Assistance
Corporation or the Federal Housing Finance Board; provided that such
obligations mature within two (2) years from the date of acquisition
thereof; (j) certificates of deposit, bankers' acceptances, eurodollar bank
deposits or overnight bank deposits, in each case issued by, created by, or
with a bank or trust company organized under the laws of the United States
or any state thereof having capital and surplus aggregating at least one
hundred million dollars ($100,000,000); provided that such obligations
mature within two (2) years from the date of acquisition thereof; (k) money
market securities rated at least "A1/P1/F1/D1" by either Standard & Poor's
or Moody's, including, but not limited to, commercial paper, banker's
acceptances, certificates of deposit (Eurodollar and Yankee issues
permissible), money market preferred and unconditional demand floating rate
securities; provided that all such securities mature not more than two (2)
years from the date of creation thereof; (l) taxable or tax-exempt
municipal Bonds: rated
"A" or better by either Standard & Poor's or Moody's; provided that such
obligations mature within two (2) years from the date of acquisition
thereof; (m) money market funds comprised of listed eligible investments
rated at least AAA by either Standard & Poor's or Moody's; provided that
such investments mature no more than two (2) years from the date of
acquisition thereof; (n) asset backed securities: or mortgage backed pass
throughs rated "AAA" or better by either Standard & Poor's or Moody's;
provided that such investments mature no more than two (2) years from the
date of acquisition thereof; or (o) repurchase agreements collateralized at
least one hundred and two percent (102%) by United States Treasuries;
provided that such investments mature no more than two (2) years from the
date of acquisition thereof."
(b) Agent Advances. Section 2.3(b)(ii) of the Loan Agreement is
amended to read in full as follows:
"(ii) Any contrary provision of this Agreement notwithstanding, but
subject to the limitations set forth in the provisos contained in this
Section 2.3(b)(ii), Agent is hereby authorized by Borrower and the Lenders
to make Revolving Loans to Borrower on behalf of the Lenders which Agent,
in its reasonable business judgment, deems necessary or desirable (A) to
preserve or protect the Collateral or any portion thereof; (B) to pay any
other amount chargeable to Borrower pursuant to the terms of this
Agreement, including, without limitation, costs, fees and expenses as
described in Section 15.5; or (C) if the conditions for Borrowing under
Section 10.2(c) cannot be fulfilled, to advance a Revolving Loan to repay
any principal or interest or other amounts, including reimbursement
obligations in connection with Letters of Credit, and fees and premiums
payable to the Lenders hereunder (any advances made pursuant to this
Section 2.3(b)(ii) are also referred to herein as "Agent Advances"); and
provided, that Agent shall have no obligation to Borrower to make an Agent
Advance under any circumstances. In no event shall Agent make an Agent
Advance if the aggregate Revolving Loan Usage (including such Agent
Advance) would exceed the Maximum Amount. Agent shall notify each Lender
and Agent in writing of each Agent Advance made pursuant to this Section
2.3(b)(ii)."
(c) Defaulting Lenders. The first paragraph of Section 2.3(c) of the
Loan Agreement is amended to read in full as follows:
"(c) Defaulting Lenders.
Unless Agent receives notice from a Lender at least one (1) Business Day
prior to the date of a Borrowing that such Lender will not make available
as and when required hereunder to Agent for the account of Borrower the
amount of that Lender's Pro Rata Share of the Borrowing, Agent may assume
that each Lender has made such amount available to Agent in immediately
available funds on the
Funding Date and Agent may (but shall not be so required), in reliance upon
such assumption, make available to Borrower on such date a Revolving Loan
in the corresponding amount. If and to the extent any Lender shall not have
made its full amount available to Agent in immediately available funds and
Agent in such circumstances has made available to Borrower such amount,
then Lender shall on the Business Day following such Funding Date make such
amount available to Agent, together with interest, to be retained by Agent
for its own account, at the Federal Funds Rate for each day after the
Funding Date until (but not including) the date paid (provided, however,
that if such Lender shall not make such funds available within two (2)
Business Days of the Funding Date, interest shall accrue on such funds and
shall be payable by such Lender at the Base Rate for each day from and
after the second (2nd) Business Day after the Funding Date until, but not
including, the date paid). A notice of Agent submitted to any Lender with
respect to amounts owing under this subsection shall be prima facia
evidence of the truth thereof, absent manifest error. If such amount is so
made available, such payment to Agent shall constitute such Lender's Loan
on the date of Borrowing for all purposes of this Agreement. If such amount
is not made available to Agent on the Business Day following the Funding
Date, Agent will notify Borrower of such failure to fund and, upon demand
by Agent, Borrower shall pay such amount to Agent for Agent's account,
together with interest thereon for each day elapsed since the date of such
Borrowing, at a rate per annum equal to the Rate applicable at the time to
the Loan comprising such Borrowing. The failure of any Lender to make any
Loan on any Funding Date shall not relieve any other Lender of any
obligation hereunder to make a Loan on such Funding Date, but no Lender
shall be responsible for the failure of any other Lender to make the Loan
to be made by such other Lender on any Funding Date. Any Lender that fails
to make any Loan on any Funding Date and continues to fail to make such
Loan within one (1) Business Day after written demand upon it by Agent to
do so, shall constitute a "Defaulting Lender" for purposes of this
Agreement. For the purposes of this Section, "Federal Funds Rate" means, on
any particular day, the per annum rate of interest offered for sale by the
San Francisco or New York branch of Union Bank of California, N.A. (as
selected by Agent) to other prime banks of Federal Funds for such day, in
an amount comparable to the principal amount owed to Agent by the
Defaulting Lender."
(d) Settlement. Section 2.4(a) of the Loan Agreement is amended to read in
full as follows:
"(a) Computation of Pro Rata Shares. The amount of the Pro Rata Share of
each Lender of the Revolving Loans shall be computed upon each advance of
a Revolving Loan hereunder and the amounts actually funded by each Lender
shall be adjusted upward or downward based on all Revolving Loans
(including Lender Advances and Agent Advances) and repayments of Revolving
Loans received by
Agent as of the close of business in San Francisco on the date of advance
of each such Revolving Loan (such date being referred to herein as the
"Settlement Date"). Agent shall deliver to each of the Lenders periodically
a summary statement of the amount of outstanding Revolving Loans (including
Lender Advances and Agent Advances) and Letters of Credit, and shall use
its best efforts to deliver such a summary statement no later than two (2)
Business Days after Agent has knowledge that the principal amount of
Revolving Loans advanced by any Lender is not equal to such Lender's Pro
Rata Share of the aggregate amount of the Revolving Loans that are
outstanding as of such date (although the failure to so deliver such a
summary statement at such time shall not affect the obligation of the
Lenders under this Section 2.4)."
(e) Fees and Expenses. Section 15.5(a) of the Loan Agreement is
amended as follows: in each place where Agent is entitled to recover any cost,
expense, attorneys fees or other fees, Section 15.5(a) is amended to entitle
Agent and each Lender the right to recover such cost, expense, attorneys fees or
other fees.
4. Conditions Precedent. GE Capital's agreement to provide the Additional
Commitment provided herein, and UBOC's and GE Capital's consent to the
amendments contained herein, is subject to the satisfaction of the following
conditions precedent:
(a) Execution. Execution of this Consent and Amendment by the parties
hereto;
(b) Opinion. Receipt by GE Capital and UBOC of an opinion of
Xxxxxxxxx & Xxxxxxxxx, counsel to Borrower, as to (i) the due authorization,
execution and delivery of this Consent and Amendment by Borrower; (ii) the
enforceability of this Consent and Amendment against Borrower; (iii) the
permission granted to GE Capital to rely on the opinion of Xxxxxxxxx &
Xxxxxxxxx, dated June 17, 1999, and rendered in connection with the closing of
the transactions contemplated by the Loan Agreement; and (iv) any other matter
reasonably requested by GE Capital or UBOC;
(c) Fee. Receipt by GE Capital of an upfront fee in the amount of two
hundred thousand dollars ($200,000); and
(d) Other Items. Such other documents, agreements and instruments as
GE Capital or UBOC may request in connection with the transactions contemplated
hereby.
5. Costs. Borrower shall be responsible for all costs and expenses of the
Agent, UBOC and GE Capital in connection with the transactions contemplated by
this Consent and Amendment, including, without limitation, Attorney Costs.
6. General Provisions. This Consent and Amendment and the Loan Agreement
shall be read together as one document. Where any provisions of the Loan
Agreement amended by this Consent and Amendment appear in any other Loan
Document and are tied to the Loan Agreement,
such provisions in such Loan Documents shall be deemed likewise amended.
Borrower hereby confirms all representations and warranties contained in the
Loan Agreement and in each Loan Document, and reaffirms all covenants set forth
therein. Borrower further certifies that, as of the Effective Date, there exists
no Default or Event of Default.
7. Miscellaneous.
(a) No Course of Dealing. Borrower acknowledges and agrees that the
execution and delivery of this Consent and Amendment by Lender and Agent shall
not be deemed to create a course of dealing or otherwise obligate Agent or
Lenders to enter into similar agreements under the same or similar circumstances
in the future.
(b) Binding. This Consent and Amendment shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
assigns. No third party beneficiaries are intended in connection with this
Consent and Amendment.
(c) Governing Law. This Consent and Amendment shall be governed by
and construed in accordance with the internal laws of the State of California
(without regard to conflicts of laws principles).
(d) Counterparts. This Consent and Amendment may be executed in any
number of counterparts, each of which shall be deemed an original, and all such
counterparts together shall constitute one and the same instrument.
(e) Merger. This Consent and Amendment constitutes the entire,
exclusive agreement of the parties hereto with respect to the subject matter
hereof.
[Signature Page Follows]
IN WITNESS WHEREOF, the parties hereto have caused this Consent and
Amendment to be executed by their duly authorized officers or partners, as of
the day and year first above written.
PAC-WEST TELECOMM, INC.,
as Borrower
By:
Name:
Title:
UNION BANK OF CALIFORNIA, N.A.,
as the Administrative Agent
By:
Name:
Title:
UNION BANK OF CALIFORNIA, N.A., Commitment: $20,000,000
as a Lender Address for Notices:
UNION BANK OF CALIFORNIA, N.A.
Union Bank of California
By: 0000 Xxxxxxxx Xxxxxx, Xxxxx 0000
Name: Xxxxxxx, Xxxxxxxxxx 00000-0000
Title: Attn: Xxxx Xxxxxxxx
Vice President & Relationship Manager
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
Wire Transfer Instructions:
Union Bank of California N.A.
Monterey Park, California
Account Number: 070-196431
Account Name: Wire Transfer Clearing
Attn: Commercial Loan Operations
Reference: Pac-West Telecomm, Inc.
ABA Number: 000-000-000
GENERAL ELECTRIC Capital Corporation Commitment: $20,000,000
as a Lender Address for Notices:
General Electric Capital Corporation
By: 0000 Xxxxxxxxx Xxxx, X.X.
Name: Suite 560
Title: Xxxxxxx, Xxxxxxx 00000
Attn: Pac-West Telecomm Account Manager
Wire Transfer Instructions:
GECC/CAF Depository
Account #00-000-000
Bankers Trust Company
Xxx Xxxxxxx Xxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
ABA Number 000-000-000
Ref: CFA 4717/Pac-West Telecomm, Inc.