EXHIBIT 10.15.4
LIMITED WAIVER TO
CREDIT AGREEMENT
This Limited Waiver to Credit Agreement (this "Limited Waiver"), dated
as of December 31, 2005, is made by and among, on the one hand, XXXXX FARGO
FOOTHILL, INC., a California corporation ("Lender"), and on the other hand,
EASYLINK SERVICES CORPORATION, a Delaware corporation ("Parent"), and each of
Parent's Subsidiaries identified on the signature pages hereof (such
Subsidiaries, together with Parent, are referred to hereinafter each
individually as a "Borrower", and individually and collectively, jointly and
severally, as the "Borrowers").
RECITALS
A. The Borrowers and the Lender are parties to that certain Credit
Agreement, dated as of December 9, 2004 (as amended, and as the same may be
further amended, modified or restated from time to time, the "Credit
Agreement").
B. The Borrowers have requested a limited one-time waiver to the
Borrowers' non-compliance with the EBITDA covenant and Projection delivery, each
under the Credit Agreement as provided herein.
C. The Lender is willing to waive such non-compliance, subject to the
terms and conditions of this Limited Waiver.
NOW, THEREFORE, in consideration of the premises herein contained, and
for other good and valuable consideration (the receipt, sufficiency and adequacy
of which are hereby acknowledged), the parties hereto (intending to be legally
bound) hereby agree as follows:
1. Definitions. Terms capitalized herein and not otherwise defined
herein shall have the meanings ascribed to such terms in the Credit Agreement.
2. Limited Waivers. Subject to the terms and conditions contained
herein, the Lender hereby waives the Borrowers' obligation to comply with (i)
the covenant contained in Section 6.16(a) (Minimum EBITDA) thereof solely for
the period ended December 31, 2005 and (ii) the financial reporting covenant
contained in Schedule 5.3(e) to the Credit Agreement (Parent's Projections)
thereof solely for the period ended December 31, 2005 (the "Projections
Waiver"). The Borrowers hereby agree to deliver to the Lender the Parent's
Projections in accord with Schedule 5.3(e) to the Credit Agreement on or prior
to January 16, 2006. If the Borrowers fail to deliver to the Lender such
Parent's Projections on or prior to January 16, 2006, then the Lender may pursue
any and all remedies available to it under the Credit Agreement in connection
with occurrence and continuance of the Event of Default arising under the Credit
Agreement from the failure of the Borrowers to deliver to the Lender the
Parent's Projections. The Borrowers and the Lender hereby agree that concurrent
with delivery of the Parent's Projections, the Minimum EBITDA covenant contained
in Section 6.16(a)(i) of the Credit Agreement shall be amended to such amounts
as agreed to by the Borrowers and the Lender utilizing the Parent's Projections.
In the event that the Borrowers and Lender fail to agree on such amended amounts
for the Minimum EBITDA covenant, then the Minimum EBITDA covenant shall remain
the same amounts as provided in Section 6.16(a)(i) of the Credit Agreement for
the three-month period ending March 31, 2006, and for each calendar quarter
thereafter. The Borrowers further agree that during the period commencing on the
date hereof and continuing until the Minimum EBITDA covenant is conclusively
determined in accordance with the terms hereof, the Borrowers shall maintain,
during such period, an amount of Qualified Cash (as defined in the Credit
Agreement) in an amount equal to not less than $4,000,000 (the "Qualified Cash
Covenant"). If the Borrowers fail to maintain the Qualified Cash Covenant in
accordance with the terms of this Limited Waiver, then the Lender may pursue any
and all remedies available to it under the Credit Agreement in connection with
occurrence and continuance of the Event of Default arising under the Credit
Agreement (as modified by this Limited Waiver) from the failure of the Borrowers
to maintain the Qualified Cash Covenant.
3. Conditions. The limited waivers contained in Section 2 above are
subject to, and contingent upon, the prior or contemporaneous satisfaction of
each of the following conditions:
(i) The Borrowers and the Lender shall have executed and delivered
to each other this Limited Waiver.
(ii) The Borrowers shall have paid to the Lender a fully earned,
non-refundable waiver fee in the amount of $50,000. The Borrowers
hereby agree to permit the Lender to actually receive such fee as of
January 15, 2006.
4. Reference to and Effect on the Credit Agreement. Except as expressly
provided herein, the Credit Agreement and all of the Loan Documents shall remain
unmodified and continue in full force and effect and are hereby ratified and
confirmed. Except as expressly provided in this Limited Waiver, the execution,
delivery and effectiveness of this Limited Waiver shall not operate as a waiver
of: (i) any right, power or remedy of the Lender under the Credit Agreement or
any of the Loan Documents, or (ii) any Default or Event of Default under the
Credit Agreement.
5. Costs, Expenses and Taxes. Without limiting the obligation of the
Borrowers to reimburse the Lender for costs, fees, disbursements and expenses
incurred by the Lender as specified in the Credit Agreement, the Borrowers agree
to pay on demand all reasonable costs, fees, disbursements and expenses of the
Lender in connection with the preparation, execution and delivery of this
Limited Waiver and the other agreements, instruments and documents contemplated
hereby, including, without limitation, reasonable attorneys' fees and
out-of-pocket expenses.
6. Counterparts; Facsimile. This Limited Waiver may be executed in one
or more counterparts, each of which taken together shall constitute one and the
same instrument. Delivery of an executed counterpart of this Limited Waiver by
telefacsimile shall be equally as effective as delivery of a manually executed
counterpart of this Limited Waiver. Any party delivering an executed counterpart
of this Limited Waiver by telefacsimile shall also deliver a manually executed
counterpart of this Limited Waiver, but the failure to deliver a manually
executed counterpart shall not affect the validity, enforceability or binding
effect of this Limited Waiver.
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7. GOVERNING LAW. THIS LIMITED WAIVER SHALL BE CONSTRUED IN ALL
RESPECTS IN ACCORDANCE WITH, AND ENFORCED AND GOVERNED BY, THE INTERNAL LAWS OF
THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICTS OF LAW PRINCIPLES.
8. JURY TRIAL. THE BORROWERS AND THE LENDER HEREBY IRREVOCABLY AND
KNOWINGLY WAIVE (TO THE FULLEST EXTENT PERMITTED BY LAW) ANY RIGHT TO A TRIAL BY
JURY IN ANY ACTION OR PROCEEDING (INCLUDING, WITHOUT LIMITATION, ANY
COUNTERCLAIM) ARISING OUT OF THIS LIMITED WAIVER. EACH OF THE LENDER AND THE
BORROWERS AGREE THAT ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A COURT
AND NOT A JURY.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the undersigned have caused this Limited Waiver to
Credit Agreement to be duly executed and delivered as of the date first above
written.
EASYLINK SERVICES CORPORATION,
a Delaware corporation
By: /s/Xxxxxxx X. Xxxxx
--------------------
Title: Vice President, Chief Financial Officer
EASYLINK SERVICES USA, INC.,
a Delaware corporation
By: /s/Xxxxxxx X. Xxxxx
--------------------
Title: Vice President, Chief Financial Officer
XXXXX FARGO FOOTHILL, INC.,
a California corporation
By: /s/ Xxxxxx X. Xxxx
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Title: V.P.
