SECOND AMENDMENT TO LOAN INSTRUMENTS
This SECOND AMENDMENT TO LOAN INSTRUMENTS (this "AMENDMENT"), dated as
of September 27, 2000, is between AQUIS WIRELESS COMMUNICATIONS, INC., a
Delaware corporation ("BORROWER"), and FINOVA CAPITAL CORPORATION, a Delaware
corporation ("FINOVA"), in its individual capacity and as agent for all Lenders
(this and all other capitalized terms used but not elsewhere defined herein are
defined in Section 2 below).
R E C I T A L S
A. Borrower and FINOVA entered into an Amended and Restated Loan
Agreement dated as of January 31, 2000 (the "ORIGINAL LOAN AGREEMENT"), as
amended by a First Amendment to Loan Instruments dated as of April 12, 2000 (the
"FIRST AMENDMENT") between Borrower and FINOVA, pursuant and subject to the
terms and conditions of which Lenders agreed to make loans and other financial
accommodations to Borrower. The Original Loan Agreement, as amended by the First
Amendment, is referred to herein as the Loan Agreement.
B. Borrower has requested that FINOVA agree to make certain amendments
to the Loan Agreement.
C. FINOVA is willing to agree to such request of Borrower on the terms
and conditions set forth herein.
NOW, THEREFORE, in consideration of the mutual agreements contained
herein, Borrower and FINOVA agree as follows:
1. INCORPORATION OF RECITALS. The Recitals set forth above are
incorporated herein, are acknowledged by Borrower, Agent and Lenders to be true
and correct and by this reference are made a part hereof.
2. DEFINITIONS. All capitalized terms used but not elsewhere
defined herein shall have the respective meanings ascribed to such terms in the
Loan Agreement, as amended by this Amendment.
3. AMENDMENTS TO LOAN INSTRUMENTS. The Loan Instruments are
amended as set forth below:
(a) SECTION 1.1 - AMENDED DEFINITIONS. Section 1.1 of
the Loan Agreement is amended by deleting the current versions of the
following definitions and substituting the following versions of such
definitions in appropriate alphabetical order:
(b) SECTION 1.1 - ADDITIONAL DEFINITIONS. Section 1.1
of the Loan Agreement is amended by inserting the following definitions
in appropriate alphabetical order: "DEFERRAL FEE: as defined in
subsection 2.7.12.
"EQUITY LINE OF CREDIT: a line of credit of up to
$20,000,000 available to Aquis Group pursuant to the Loan
Agreement dated as of March 31, 2000 between Aquis Group and
the lenders signatory thereto.
"INCOMING COO: the Chief Operating Officer of
Borrower, who shall be an individual reasonably acceptable to
Agent.
"REGISTRATION STATEMENT: the Form S-1 Registration
Statement of Aquis Group filed with the Securities and
Exchange Commission on September 27, 2000.
"SECOND AMENDMENT: the Second Amendment to Loan
Instruments dated as of September 27, 2000 between Borrower
and FINOVA."
(c) SUBSECTION 2.2.5. The following subsection 2.2.5
is added to the Loan Agreement immediately following subsection 2.2.4:
"2.2.5 INTEREST RATE IF EQUITY LINE OF CREDIT PAYMENT
IS NOT MADE. If the payment required pursuant to
subsection 2.8.2(c) is not made on or before December
31, 2000, then commencing on January 1, 2001,
Borrower's Obligations shall bear interest at a rate
equal to, with respect to (i) the Base Rate Portion
and all other Borrower's Obligations other than the
SourceOne Base Rate Portion, LIBOR Loans and
SourceOne LIBOR Loans, a per annum rate equal to the
Base Rate in effect from time to time plus the
Applicable Margin plus 2.0% per annum, (ii) each
LIBOR Loan, a per annum rate equal to the LIBOR Rate
applicable thereto plus the Applicable Margin plus
2.0% per annum, (iii) the SourceOne Base Rate
Portion, a per annum rate equal to the Base Rate in
effect from time to time plus the SourceOne
Applicable Margin and (iv) each SourceOne LIBOR Loan,
a per annum rate equal to the LIBOR Rate applicable
thereto plus the SourceOne Applicable Margin plus
2.0% per annum."
(d) SUBSECTION 2.4.2. Subsection 2.4.2 is deleted in its
entirety and the following is substituted therefor:
"2.4.2 PRINCIPAL. The Principal Balance shall be
payable in consecutive quarterly installments on the
first Business Day of each quarter commencing with
the quarter beginning July 1, 2000. Each such
installment shall be (i) in an amount equal to the
percentage of the Principal Balance as of June 30,
2000 set forth below opposite the quarter in which
such payment is due and (ii) applied first, to the
Existing Principal Balance and then to the SourceOne
Principal Balance, except that the Special Prepayment
shall be applied first to the SourceOne Portion and
then to the Existing Principal Balance:
PERCENTAGE OF PRINCIPAL
QUARTER BEGINNING BALANCE AS OF JUNE 30, 2000
----------------- ---------------------------
July 1, 2000 $132,572.50
October 1, 2000 $132,572.50
January 1, 2001 $514,381.30
April 1, 2001 $514,381.30
July 1, 2001 $514,381.30
October 1, 2001 $514,381.30
January 1, 2002 $829,903.85
April 1, 2002 $829,903.85
July 1, 2002 $829,903.85
October 1, 2002 $829,903.85
January 1, 2003 $928,007.50
April 1, 2003 $928,007.50
July 1, 2003 $928,007.50
October 1, 2003 $928,007.50;
provided, however, that Borrower may elect to pay
$200,000 in satisfaction of its July 1, 2001 payment
(instead of the amount of $514,381.30, which would be
due absent such election) provided that Borrower (i)
makes such principal payment on such date and (ii)
such principal payment is accompanied by the Deferral
Fee required pursuant to 2.7.12. The unpaid Principal
Balance, together with all accrued and unpaid
interest thereon and all other sums which then are
due and payable pursuant to the terms of the Loan
Instruments, shall be due and payable in full on the
Maturity Date."
(E) SECTION 2.7. Section 2.7 is deleted in its entirety
and the following is substituted therefor:
"2.7 FEES.
"2.7.1 SOURCEONE LOAN FEE. Borrower paid to
Lenders a loan fee in the amount of $100,000 (the
"SourceOne Loan Fee") upon the Closing. The SourceOne
Loan Fee was fully earned as of the Closing.
"2.7.2 SECOND AMENDMENT FEE. Borrower shall
pay to Lenders a fee in the amount of $100,000 on the
date of the Second Amendment, which fee shall be in
consideration of FINOVA's agreement to enter into the
Second Amendment.
"2.7.3 JUNE 30, 2000 FEE. The Senior
Leverage Ratio as of June 30, 2000 was equal to or
greater than 4.00. Consequently, pursuant to the
terms of the First Amendment, a fee of $75,000 is due
and payable from Borrower to FINOVA.
"2.7.4 SEPTEMBER 30, 2000 FEE. If the Senior
Leverage Ratio as of September 30, 2000 is equal to
or greater than 4.90, Borrower shall pay to FINOVA a
fee of $100,000 on such date. If the Senior Leverage
Ratio as of September 30, 2000 is less than 4.90 but
equal to or greater than 3.75, Borrower shall pay to
FINOVA a fee of $75,000 on such date.
"2.7.5 DECEMBER 31, 2000 FEE. If the Senior
Leverage Ratio as of December 31, 2000 is equal to or
greater than 4.20, Borrower shall pay to FINOVA a fee
of $100,000 on such date. If the Senior Leverage
Ratio as of December 31, 2000 is less than 4.20 but
greater than or equal to 3.50, Borrower shall pay to
FINOVA a fee of $75,000 on such date.
"2.7.6 MARCH 31, 2001 FEE. Borrower shall
pay to FINOVA a fee of $75,000 on March 31, 2001 if
the Senior Leverage Ratio as of such date is equal to
or greater than 3.25. In addition to the fee
described in the preceding sentence, Borrower shall
pay to FINOVA a fee of $250,000 on the Maturity Date
if, as of March 31, 20001, any one or more of the
following events occur: (i) the Senior Leverage Ratio
as of such date is equal to or greater than 5.06,
(ii) the Total Leverage Ratio is equal to or greater
than 5.30 or (iii) the Senior Debt Service Coverage
Ratio is equal to or less than 1.64.
"2.7.7 JUNE 30, 2001 FEE. Borrower shall pay
to FINOVA a fee of $75,000 on June 30, 2001 if the
Senior Leverage Ratio as of such date is equal to or
greater than 3.25. In addition to the fee described
in the preceding sentence, Borrower shall pay to
FINOVA a fee of $250,000 on the Maturity Date if, as
of June 30, 2000, any one or more of the following
events occur: (i) the Senior Leverage Ratio as of
such date is equal to or greater than 5.00, (ii) the
Total Leverage Ratio is equal to or greater than 5.25
or (iii) the Senior Debt Service Coverage Ratio is
equal to or less than 1.35.
"2.7.8 SEPTEMBER 30, 2001 FEE. Borrower
shall pay to FINOVA a fee of $75,000 on September 30,
2001 if the Senior Leverage Ratio as of such date is
equal to or greater than 3.25. In addition to the fee
described in the preceding sentence, Borrower shall
pay to FINOVA a fee of $250,000 on the Maturity Date
if, as of September 30, 2001, any one or more of the
following events occur: (i) the Senior Leverage Ratio
as of such date is equal to or greater than 4.25,
(ii) the Total Leverage Ratio is equal to or greater
than 4.50 or (iii) the Senior Debt Service Coverage
Ratio is equal to or less than 1.35.
"2.7.9 JULY 1, 2001 DEFERRAL FEE. If,
pursuant to subsection 2.4.2, Borrower elects to
defer a portion of the principal payment due on
July 1, 2001, Borrower shall pay on such date a fee
(the "Deferral Fee") in the amount of $75,000."
"2.7.10 EQUITY LINE OF CREDIT PAYMENT FEE.
If Borrower fails to make the payment required
pursuant to subsection 2.8.2(c) on or before December
31, 2000, Borrower shall pay on the Maturity Date a
fee in the amount of $500,000."
(f) SUBSECTION 2.8.2(C). Subsection 2.8.2(c) is deleted
in its entirety and the following is substituted therefor:
"(c) EQUITY LINE OF CREDIT PAYMENT. Borrower shall
prepay the Principal Balance in the amount of
$2,000,000 on or before December 31, 2000, provided
that the proceeds of the SunStar Transfer were not
used to prepay the Principal Balance as provided in
Section 6.17."
(g) SECTION 6.15. Section 6.15 is deleted in its
entirety and the following is substituted therefor:
"6.15 DELETED."
(h) SECTION 6.17. Section 6.17 is added to the Loan
Agreement immediately following 6.16:
"6.17 REQUIRED SUNSTAR TRANSFER. If the Senior
Leverage Ratio as of June 30, 2000 equals or exceeds 4.00, (i)
consummate the SunStar Transfer on or before October 31, 2000
on terms and conditions, including cash purchase price,
reasonably acceptable to FINOVA and (ii) prepay the Principal
Balance by an amount equal to the greater of the SunStar
Proceeds or $2,000,000, on a date which is within 10 Business
Days after the Effective Date of the Second Amendment, unless
Aquis Group has filed the Registration Statement on or before
such date."
(i) SECTION 7.18. Subsection 7.18 of the Loan Agreement
is deleted in its entirety and the following is substituted therefor:
"7.18 SENIOR LEVERAGE RATIO. Permit the Senior
Leverage Ratio as of such date to be greater than the amount set forth
opposite such date:
DATE AMOUNT
---- ------
September 30, 2000 5.59
December 31, 2000 5.16
March 31, 2001 5.19
June 30, 2001 5.42
September 30, 2001 5.66
December 31, 2001 3.00
DATE AMOUNT
---- ------
March 31, 2002 2.75
June 30, 2002 2.75
September 30, 2002 2.75
December 31, 2002 2.50
March 31, 2003 2.50
June 30, 2003 2.50
September 30, 2003 2.50
December 31, 2003 2.50"
(j) SECTION 7.19. Section 7.19 of the Loan Agreement is
deleted in its entirety and the following is substituted therefor:
"7.19 SENIOR DEBT SERVICE COVERAGE RATIO. Permit the
Senior Debt Service Coverage Ratio as of any date set forth below to be
less than the amount set forth below opposite such date:
DATE AMOUNT
---- ------
September 30, 2000 1.61
December 31, 2000 1.64
March 31, 2001 1.36
June 30, 2001 1.12
September 30, 2001 1.05
December 31, 2001 2.25
March 31, 2002 2.00
June 30, 2002 2.00
September 30, 2002 2.00
December 31, 2002 2.00
March 31, 2003 1.90
June 30, 2003 1.90
September 30, 2003 1.90
December 31, 2003 1.90"
(k) SECTION 7.20. Subsection 7.20 of the Loan Agreement
is deleted in its entirety and the following is substituted therefor:
"7.20 TOTAL LEVERAGE RATIO. Permit the Total Leverage
Ratio as of such date to be greater than the amount set forth opposite
such date:
DATE AMOUNT
---- ------
September 30, 2000 5.80
December 31, 2000 5.34
March 31, 2001 5.36
June 30, 2001 5.59
September 30, 2001 5.83
December 31, 2001 3.25
March 31, 2002 3.00
June 30, 2002 3.00
September 30, 2002 3.00
December 31, 2002 2.75
March 31, 2003 2.75
June 30, 2003 2.75
September 30, 2003 2.75
December 31, 2003 2.75"
(l) SECTION 8.1.1. Section 8.1.1 is deleted in its
entirety and the following is substituted therefor:
"8.1.1 DEFAULT IN PAYMENT. If Borrower shall fail to
pay all or any portion of Borrower's Obligations when the same
become due and payable, except that Borrower's failure to make
the payment required pursuant to subsection 2.8.2(c) shall not
result in an Event of Default but shall result in the exercise
by Lenders of the remedies set forth in subsections 2.2.5 and
2.7.10."
(m) SECTION 8.1.11. Section 8.1.11 is deleted in its
entirety and the following is substituted therefor:
"8.1.11 CHANGE IN CONTROL. If (i) Xxxx X. Xxxxxxxx
shall cease to serve as Chief Executive Officer of Borrower,
(ii) Borrower shall have failed to employ the Incoming COO by
October 22, 2000 or the Incoming COO shall have failed to
begin his full-time employment by such date, (iii) the
Incoming COO shall cease to devote his full business time and
effort to the day to day operational management of the Systems
and Paging Business of Borrower existing as of the Effective
Date of the Second Amendment, or (iv) any "person" or "group"
(as such terms are used for purposes of Sections 13(d) and
14(d) of the Securities Exchange Act, whether or not
applicable) is or becomes the "beneficial owner" (as such term
is used in Rules 13d-3 and 13d-5 under the Securities Exchange
Act, whether or not applicable, except that a "person" shall
be deemed to have "beneficial ownership" of all shares that
any such person has the right to acquire, whether such right
is exercisable immediately or only after the passage of time),
directly or indirectly (including as a result of a merger or
consolidation), of more than 30% of the total voting power in
the aggregate of all classes of capital stock of Aquis Group
then outstanding normally entitled to vote in elections of
directors (but excluding from the percentage of voting power
held by any group the voting power of shares owned by the
Management Holders and their Related Parties who are deemed to
be members of the group, provided that such Management Holders
and Related Parties beneficially own a majority of the total
voting power of capital stock held by such group), if at such
time the Management Holders and their Related Parties together
shall fail to beneficially own, directly or indirectly,
securities representing at least the same percentage of the
combined voting power of such capital stock as the percentage
"beneficially owned" by such person or group.
4. CONDITIONS TO EFFECTIVENESS. The effectiveness of this Amendment
shall be subject to the satisfaction of all of the following conditions in a
manner, form and substance reasonably satisfactory to FINOVA:
(a) DELIVERY OF DOCUMENTS. The following shall have been
delivered to FINOVA, each duly authorized and executed:
(1) this Amendment;
(2) a good standing certificate for Borrower from the
Secretary of State of Delaware;
(3) certified copies of (i) any amendments to the
articles of incorporation of Borrower since April 12, 2000,
certified by the Secretary of State of Delaware; (ii) any
amendments to the by-laws of Borrower since April 12, 2000,
certified as of the date of this Amendment by the secretary of
Borrower and (iii) resolutions adopted by the board of
directors of Borrower authorizing the execution and delivery
of this Amendment;
(4) such other documents, agreements, opinions and
consents as FINOVA reasonably may request.
(b) OPINION OF COUNSEL. Agent shall have received an opinion
of counsel dated the date hereof from Xxxxxxxx Ingersoll Professional
Corporation, in such form and covering such matters as Agent reasonably
may require.
(c) MODIFICATION FEE. FINOVA shall have received a
modification fee in the amount of $100,000, due and payable upon the
date of this Amendment, in consideration of the agreement of Lenders to
enter into this Amendment. Such modification fee shall be deemed to be
fully earned as of the date hereof.
Upon the satisfaction of conditions set forth in this Paragraph 4, this
Amendment shall be effective as of the date set forth in the preamble hereto and
such date shall be referred to herein as the "Effective Date."
5. POST-CLOSING DELIVERIES. Within 3 Business Days of the filing
thereof with the Securities and Exchange Commission, Borrower will cause Aquis
Group to deliver to FINOVA a copy of the Registration Statement, certified as a
true, correct and complete copy by an authorized officer of Aquis Group.
6. REFERENCES. From and after the Effective Date all terms used in the
Loan Instruments which are defined in the Loan Agreement shall be deemed to
refer to such terms as amended by this Amendment.
7. REPRESENTATIONS AND WARRANTIES. Borrower hereby confirms to Agent
and Lenders that the representations and warranties set forth in the Loan
Instruments, as amended by this Amendment, to which any Obligor is a party are
true and correct in all material respects as of the date hereof, and shall be
deemed to be remade as of the date hereof. Borrower represents and warrants to
Agent and Lenders that (i) Borrower has full power and authority to execute and
deliver this Amendment and to perform its obligations hereunder, (ii) upon the
execution and delivery hereof, this Amendment will be valid, binding and
enforceable upon Borrower in accordance with its terms, (iii) the execution and
delivery of this Amendment does not and will not contravene, conflict with,
violate or constitute a default under (A) its articles of incorporation or
by-laws or (B) any applicable law, rule, regulation, judgment, decree or order
or any agreement, indenture or instrument to which Borrower is a party or is
bound or which is binding upon or applicable to all or any portion of Borrower's
Property and (iv) as of the date hereof no Incipient Default or Event of Default
exists.
8. COSTS AND EXPENSES; MODIFICATION FEE. Borrower agrees to reimburse
Agent for all fees and expenses incurred in the preparation, negotiation and
execution of this Amendment and the consummation of the transactions
contemplated hereby, including, without limitation, the fees and expenses of
counsel for Agent.
9. NO FURTHER AMENDMENTS; RATIFICATION OF LIABILITY. Except as amended
hereby, the Loan Agreement and each of the other Loan Instruments shall remain
in full force and effect in accordance with its respective terms. Borrower
hereby ratifies and confirms its liabilities, obligations and agreements under
the Loan Agreement and the other Loan Instruments, all as amended by this
Amendment, and the Liens created thereby, and acknowledges that (i) it has no
defenses, claims or set-offs to the enforcement by Agent and Lenders of such
liabilities, obligations and agreements, (ii) Agent and Lenders have fully
performed all obligations to Borrower which any such Person may have had or has
on and as of the date hereof and (iii) other than as specifically set forth
herein, neither Agent nor any Lender waives, diminishes or limits any term or
condition contained in the Loan Agreement or the other Loan Instruments. Agent
and Lenders' agreement to the terms of this Amendment or any other amendment of
the Loan Agreement shall not be deemed to establish or create a custom or course
of dealing among Agent, Lenders and Borrower. The Loan Instruments, as amended
by this
Amendment, contain the entire agreement among Agent, Lenders and Borrower with
respect to the transactions contemplated hereby.
10. COUNTERPARTS. This Amendment may be executed in one or more
counterparts, each of which shall be deemed an original, and all of which, when
taken together, shall constitute one and the same instrument.
11. FURTHER ASSURANCES. Borrower covenants and agrees that it will at
any time and from time to time do, execute, acknowledge and deliver, or will
cause to be done, executed, acknowledged and delivered, all such further acts,
documents and instruments as reasonably may be required by Agent and Lenders in
order to effectuate fully the intent of this Amendment.
12. SEVERABILITY. If any term or provision of this Amendment or the
application thereof to any party or circumstance shall be held to be invalid,
illegal or unenforceable in any respect by a court of competent jurisdiction,
the validity, legality and enforceability of the remaining terms and provisions
of this Amendment shall not in any way be affected or impaired thereby, and the
affected term or provision shall be modified to the minimum extent permitted by
law so as most fully to achieve the intention of this Amendment.
13. CAPTIONS. The captions in this Amendment are inserted for
convenience of reference only and in no way define, describe or limit the scope
or intent of this Amendment or any of the provisions hereof.
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IN WITNESS WHEREOF, this Amendment has been executed and delivered
by each of the parties hereto by a duly authorized officer of each such party
on the date first set forth above.
AQUIS WIRELESS COMMUNICATIONS,
INC., a Delaware corporation
By: /s/ XXXX X. XXXXXXXX
-----------------------------------
Xxxx X. Xxxxxxxx
Chief Executive Officer
FINOVA CAPITAL CORPORATION, a
Delaware corporation
By: /s/ XXXXXX X. XXXXX
-----------------------------------
Xxxxxx X. Xxxxx
Vice President
