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EXHIBIT 10.31
THIRD AMENDMENT TO SECOND AMENDED AND RESTATED
LOAN AND SECURITY AGREEMENT
THIRD AMENDMENT TO SECOND AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT
(the "Amendment") is made and entered into the 19th day of December, 1996 by
and between WORLD ACCESS, INC. (formerly known as Restor Industries, Inc.), a
Delaware corporation (the "Borrower"), and CREDITANSTALT-BANKVEREIN, an
Austrian banking corporation (the "Bank").
WITNESSETH :
WHEREAS, Borrower and Bank are parties to a certain Second Amended and
Restated Loan and Security Agreement, dated as of July 18, 1995 (the "Loan
Agreement"), which currently provides for a term loan in the original principal
amount of Four Million Dollars ($4,000,000) and for a revolving credit facility
from Bank to Borrower in the aggregate principal amount of up to Six Million
Dollars ($6,000,000) at any one time outstanding;
WHEREAS, the Loan Agreement was amended (i) December 28, 1995 pursuant to
the First Amendment to the Second Amended and Restated Loan and Security
Agreement and (ii) March 28, 1996 pursuant to the Second Amendment to the
Second Amended and Restated Loan and Security Agreement;
WHEREAS, Borrower has requested that Bank convert the term loan to a
revolving credit loan thereby increasing the aggregate principal amount of
Revolving Credit Loans which may be outstanding at any one time from Six
Million Dollars ($6,000,000) to Ten Million Dollars ($10,000,000); and
WHEREAS, Bank has agreed to grant Borrower's request, subject to the terms
and conditions set forth herein;
NOW, THEREFORE, for and in consideration of the premises, the terms and
conditions set forth herein and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
hereby agree as follows:
1. DEFINED TERMS. Capitalized terms used herein and not otherwise defined
shall have the meanings ascribed to such terms in the Loan Agreement, to the
extent defined therein.
2. AMENDMENTS. The Loan Agreement is amended as follows, subject to the
satisfaction of the conditions precedence set forth in Section 7 of this
Amendment:
2.1 Section 1.1 of the Loan Agreement is hereby further amended by
deleting the definition of "Base Rate" in its entirety and substituting in lieu
thereof a new definition of "Base Rate" to read as follows:
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"Base Rate" shall mean an interest rate per annum,
fluctuating daily, equal to the higher of (a) a rate
announced by Creditanstalt-Bankverein from time to time at
its principal office in Greenwich, Connecticut, as its prime
rate for domestic (United States) commercial loans in effect
on such date; (b) the Federal Funds Rate in effect on such
date plus one-half percent (1/2%). The Base Rate is not
necessarily intended to be the lowest rate of interest
charge by Creditanstalt-Bankverein in connections with
extension of credit. Each change in the Base Rate shall
result in the corresponding change in the interest rates
hereunder with respect to a Base Rate Loan and such change
shall be effective on the effective date of such change in
the Base Rate.
2.2 Section 1.1 of the Loan Agreement is hereby further amended by
deleting the definition of "Business Day" in its entirety and substituting in
lieu thereof a new definition of "Business Day" to read as follows:
"Business Day" shall mean a day on which Banks are not
required or authorized to close in Greenwich, Connecticut
and, if such day relates to a borrowing of, a payment or
prepayment of principal or interest on a Continuation or
Conversion of or into, or an Interest Prior for a Eurodollar
Loan or a notice by Borrower with respect to any such
borrowing, payment, prepayment, Continuation, Conversion or
Interest Period, which is also a day on which dealings by
and between banks in U.S. dollar deposits are carried out in
the interbank Eurodollar market.
2.3 Section 1.1 of the Loan Agreement is hereby further amended by
adding the following definition of "Creditanstalt-Bankverein" in the appropriate
alphabetical order:
"Creditanstalt-Bankverein" shall mean
Creditanstalt-Bankverein, an Austrian Banking Corporation,
having offices at 0 Xxxxxxxxx Xxxxx, 0xx Xxxxx, Xxxxxxxxx,
Xxxxxxxxxxx 00000, and it successors and assigns.
2.4 Section 1.1 of the Loan Agreement is hereby further amended by
deleting the definition of "Federal Funds Rate" in its entirety and substituting
in lieu thereof a new definition of "Federal Funds Rate" to read as follows:
"Federal Funds Rate" shall mean, for any day, the
overnight Federal Funds Rate in Greenwich, Connecticut, as
published for such day (or, if such day is not a Connecticut
Business Day, for the next proceeding Business Day) in the Federal
Reserve Statistical release H.15(519) or any successor publication,
or if such rate is not so published for any day which is a
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Connecticut Business Day, the average of the quotations for
such day on over night Federal Funds transactions in
Connecticut received by the Lender from three Federal Funds
Brokers of recognized standing collected by the Lender.
2.5 Section 1.1 of the Loan Agreement is hereby further amended by
deleting the definition of "Quoted Rate" in its entirety and substituting in
lieu thereof a new definition of "Quoted Rate" to read as follows:
"Quoted Rate" shall mean, when used with respect to an
Interest Period for a Eurodollar Loan, the quotient of (i)
the offered rate quoted by Creditanstalt-Bankverein in the
interbank in the Eurodollar market in Greenwich, Connecticut
or London, England on or about 11:00 a.m. (prevailing
Eastern or London time, as the case may be) two Business
Days prior to such Interest Period for U.S. dollar deposits
in an aggregate amount comparable to the principal amount of
the Eurodollar Loan to which the Quoted Rate is to be
applicable and for a period comparable to such Interest
Period, divided by (ii) one minus the Reserved Percentage.
For purposes of its definition, (a) "Reserved Percentage"
shall mean with respect to any Interest Period, the
percentage which is in effect on the first day of such
Interest Period under Regulation D as the maximum reserved
requirement from member banks of the Federal Reserve System
in Greenwich, Connecticut with deposits comparable to an
amount to those of Creditanstalt-Bankverein against
Eurocurrency Liabilities (b) "Eurocurrency Liabilities" has
the meaning assigned to that term in Regulation D, as in
effect from time to time. The Quoted Rate for the
applicable period shall be adjusted automatically on as of
the effective date of any change in the applicable Reserved
Percentage.
2.6 Section 1.1 of the Loan Agreement is hereby further amended by
deleting the amount "Six Million Dollars ($6,000,000)" appearing in the
definition "Revolving Credit Commitment" and substituting the amount "Ten
Million Dollars ($10,000,000)."
2.7 Section 1.1 of the Loan Agreement is hereby amended by deleting
in their entirety the definitions of "Borrowing Base," "Eligible Accounts,"
"Eligible Inventory," "Facility A Loan," "Facility A Note," "Facility B Loan,"
"Facility B Note" contained therein.
2.8 Section 2.1 of the Loan Agreement is hereby amended by deleting
the first sentence thereof in its entirety and substituting the following new
first sentence of Section 2.1 in lieu thereof:
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Subject to the terms and conditions hereof and provided that
there exists no Default or Event of Default, the Bank agrees
to make loans (the "Revolving Credit Loans"), as requested
by the Borrower in accordance with Section 2.3 hereof, to
Borrower from time to time on and after the date hereof and
up to, but not including, the Revolving Credit Termination
Date, in an aggregate principal amount not to exceed at any
one time outstanding an amount equal to the Revolving Credit
Commitment.
2.9 Section 2.3 of the Loan Agreement is hereby amended by deleting
the reference to "New York" time contained in the fifth line thereof and
replacing it with a reference to "prevailing Eastern" time.
2.10 Section 2.7 of the Loan Agreement is hereby amended by deleting
such section in it entirety and substituting the following in lieu thereof:
2.7 LOAN IN EXCESS OF REVOLVING CREDIT COMMITMENT.
Borrower acknowledges that the Bank is not obligated and
does not presently intend to make Revolving Credit Loans,
incur Letter of Credit Obligation, or make other extensions
of credit to Borrower the principal amount of which, in the
aggregate, at any time would exceed the Revolving Credit
Commitment. However, it is agreed that, should the
Revolving Credit Loan, Letter of Credit Obligation or other
extensions of credit incurred hereunder exceed the Revolving
Credit Commitment or any other limitations set forth herein,
all of the obligations of Borrower to the Bank with respect
to such Revolving Credit Loan, Letter of Credit Obligation
and extensions of credit shall nevertheless constitute
Obligation under this Agreement and shall be entitled to the
benefit of all security interests granted under this
Agreement and all other Loan Documents. Notwithstanding the
foregoing, if any amounts outstanding hereunder shall exceed
any such limitation, Borrower shall immediately repay such
excess amounts to the Bank.
2.11 Section 2.8(a) of the Loan Agreement is hereby amended by
deleting such section in its entirety and substituting the following new Section
2.8(a) in lieu thereof:
(a) Each payment by the Borrower to Lender pursuant to
this Agreement or the Notes shall be made prior to 1:00 p.m.
(prevailing Eastern time) on the date due and shall be made
without set-off-or counterclaim to the account of the Lender
maintained with Creditanstalt-Bankverein in Greenwich,
Connecticut or at such other place or places as Lender may
designate from time to time in writing to Borrower and in
such amounts as may be necessary in order that all such
payments (after withholding for or
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on account of any present or future taxes, levies, imposts,
duties or other similar charges of whatsoever nature imposed
by any government or any political subdivision or taxing
authority thereof, other than any tax on or measured by the
net income of the Bank pursuant to the income tax laws of
the jurisdiction where the Bank's principal or lending
office is located) shall not be less than the amounts
otherwise specified to be paid under the Notes. Each such
payment shall be in lawful currency of the United States of
America and on immediately available funds. If the due date
of any payment hereunder or under the revolving Credit Note
would otherwise fall on a day which is not a Business Day,
then such payment shall be due on the next succeeding
Business Day and interest shall be payable on the principal
amount o such payment for the period of such extension. If
the Bank has not received any payment due hereunder by the
close of business on the date five (5) days following the
date on which such payment is due, Borrower authorizes the
Bank, at its option, to charge such payment as a Revolving
Credit Loan. Each such payment shall be in lawful currency
of the United States of America in immediately available
funds.
2.12 Section 2.10 of the Loan Agreement is hereby amended by
deleting such subsection in it entirety and substituting the following in lieu
thereof:
2.10 CERTAIN NOTICES. All notices given by Borrower to
the Bank hereunder of terminations or reductions of the
Revolving Credit Commitment or of borrowing, Conversions,
Continuations or prepayments of Loans hereunder or request
for the issuance of Letters of Credit shall either be oral,
with written confirmation, which may be by telecopy; or in
writing, with such written confirmation or writing in the
case of a borrowing, Conversion or Continuation, to be
substantially in the form of Exhibit C attached hereto (a
"Notice of Borrowing"), and in the case of a request for a
Letter of Credit, to be substantially in the form of Exhibit
J attached hereto (a "Request for Letter of Credit"); shall
be irrevocable; shall be effective only if received by the
Bank prior to 10:00 a.m. (prevailing Eastern time) on a
business day which is: (a) at least fifteen (15) days prior
to such termination or reduction of the Revolving Credit
Commitment; (b) on a date such Loan is to be made as,
Converted to or Continued as a Base Rate Loan; (c) at least
three (3) Business Days prior to the date such Loan is to be
made as, Converted to or Continued as a Eurodollar Loan; or
(d) at least three (3) Business Days prior to the date such
Letter of Credit is to be issued. Each such notice to
reduce the Revolving Credit Commitment shall specify the
amount of the Revolving Credit Commitment to be reduced and
the date of such reduction, which date, in the case of
prepayment of a Eurodollar Loan, shall not be prior
to the last day of the Interest Period then
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applicable to such Eurodollar Loan. Each such notice of
borrowing, Conversion or Continuation shall specify: (i)
the amount of such borrowing, Conversion or Continuation
(which shall be in integral multiples of $100,000); (ii)
whether such Loan will be made, Converted or Continued as a
Eurodollar Loan or as a Base Rate Loan; (iii) the date such
Loan is to be made, Converted or Continuation (which shall
be a Business Day and, if such Loan is to Convert Continue a
Eurodollar Loan then outstanding, shall not be prior to the
last day of the then current Interest Period for such
outstanding Loan ); and (iv) if such Loan is a Eurodollar
Loan, the duration of the Interest Period with respect
thereto. Each request for a borrowing, Conversion or a
Continuation of a Loan, for the issuance of a Letter of
Credit or for any other financial accommodation by Borrower
pursuant to this Agreement or the other Loan Documents shall
constitute (x) an automatic warranty and representation by
Borrower to the Bank if there does not then exist a Default
or Event of Default or any event or condition which, with
the making of such Loan or the issuance of such Letter of
Credit, will constitute a Default Event of Default and (y)
an affirmation that as of the date of such request all of
the representations and warranties of the Borrower contained
in this Agreement and the other Loan Documents are true and
correct in all material respects, both before and after
giving effect to the making of such Loan or the issuance of
such Letter of Credit. If on the last day of the Interest
Period of any Eurodollar Loan hereunder, the Bank has not
received a timely notice hereunder to Convert, Continue or
prepay such Loan, Borrower shall be deemed to have submitted
a notice to Convert such Loan to a Base Rate Loan.
2.13 Section 2.11(a) of the Loan Agreement is hereby amended by
deleting such subsection in it entirety and substituting the following in lieu
thereof:
(a) Subject to the terms and conditions hereof and
provided that there exists no Default or Event of Default,
at any time and from time to time from the Closing Date to
(but not including) the Revolving Credit Termination Date,
Bank shall, in its discretion, issue such Letters of Credit
as Borrower may request by a Request for a Letter of Credit
(in the manner described in Section 2.10 hereof), each in a
minimum principal amount of $100,000; provided, however,
that the Bank shall be under no obligation to so issue any
such Letter of Credit unless, after giving effect to the
issuance of such Letter of Credit, (i) the aggregate amount
of all Letter of Credit Obligation of Borrower then
outstanding does not exceed the $1,000,000, and (ii) the
aggregate amount of all outstanding Revolving Credit Loans,
together with all outstanding Letter of Credit Obligation
with respect to Letters of Credit, will not exceed at any one time
outstanding the Revolving
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Credit Commitment. No Letter of Credit shall be issued by
Bank hereunder except to the extent reasonably necessary in
connection with transactions in the ordinary course of
business of Borrower. The expiration date of any Letter of
Credit shall not extend beyond the earliest of (i) one year
from the date of issuance thereof, (ii) the Maturity Date,
and (iii) any date fixed for termination of the Revolving
Credit Commitment pursuant to Section 2.9 hereof.
2.14 Section 6.2 of the Loan Agreement is hereby amended by deleting
subsections (a) and (e) thereof in their entirety and substituting the following
new subsections (a) and (e) in lieu thereof:
(a) As soon as practicable, and in any event within thirty (30)
days after the end of each quarter, consolidating interim unaudited
financial statements, including a balance sheet, income statement
and statement of cash flow, for the quarter and year-to-date period
then ended, prepared in accordance with GAAP, consistent with the
past practice or Borrower and its Subsidiaries, and certified as to
truth and accuracy thereof by the chief financial officer of
Borrower;
(e) [Intentionally Omitted].
2.15 Section 7.2 of the Loan Agreement is hereby amended by deleting
such section in its entirety and substituting the following new Section 7.2 in
lieu thereof:
7.2 INDEBTEDNESS. Incur, assume, or suffer to exist any
Indebtedness for borrowed money or Capital Lease Obligations except
for (a) Indebtedness existing on the date hereof and listed on
Schedule 7.2 hereof (provided that there shall be no increase in
the amount or change in the terms of any such Indebtedness without
the prior written consent of the Bank); (b) trade payables arising
in the ordinary course of Borrower's business; (c) the Obligations;
(d) Capital Lease Obligations in an aggregate principal amount not
to exceed $2,000,000 at any one time outstanding; and (e) the
Landlord Subordinated Debt (provided that there shall be no
increase in the amount or change in the terms of any such
Indebtedness without the prior written consent of the Bank).
2.16 Section 7.3 of the Loan Agreement is hereby amended by deleting
such section in its entirety and substituting the following new Section 7.3 in
lieu thereof:
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7.3 ASSET SALES. Sell, lease or dispose of any of the
Collateral or any interest therein or any of its other assets
except for (a) the sale of Inventory in the ordinary course of
business and (b) the sale of assets having an aggregate value of
not more than $500,000 during any fiscal year.
2.17 Section 7.13 of the Loan Agreement is hereby amended by
deleting such section in its entirety and substituting the following new Section
7.13 in lieu thereof:
7.13 OPERATING LEASES. Enter into or be a party to any
Operating Lease, except for those set forth on Schedule 5.27
attached hereto as they may be renewed or extended pursuant to
similar terms and conditions unless the aggregate monthly rentals
to be paid by Borrower under all Operating Leases (including those
listed on Schedule 5.27, and any new Operating Leases and all other
Operating Leases) will not at any time exceed $175,000.00.
2.18 Section 7.9 of the Loan Agreement is hereby amended by deleting
the words "Eligible Inventory" appearing in the sixth line thereof in their
entirety and substituting the word "Inventory" in lieu thereof.
2.19 Section 8.1 of the Loan Agreement is hereby amended by deleting
such section in its entirety and substituing therefore the following new Section
8.1 in lieu thereof:
8.1 NET WORTH. Maintain at all times during the applicable
periods set forth below, an Adjusted Net Worth of not less than the
amount set forth opposite each such applicable period:
APPLICABLE PERIOD AMOUNT
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09/30/96 - 12/31/96 $35,000,000
01/01/97 - 12/31/97 $40,000,000
At all times thereafter $45,000,000
Notwithstanding the foregoing, in the event that Borrower makes an
offering of additional shares of its capital stock after the
Closing Date in a single transaction or related series of
transactions and, as a result of the issuance of such shares,
Borrower's stockholders' equity is increased, the amount set forth
above for each applicable period, commencing as of the beginning of
the fiscal year immediately following the issuance of Borrower's
capital stock as a part of such offering occurs shall be increased
by an amount equal to seventy-five percent (75%) of the amount by
which Borrower's stockholders' equity is increased as a result of
the issuance of said shares of its capital stock.
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2.20 Section 8.2 of the Loan Agreement is hereby amended by deleting
such section in its entirety and substituting therefore the following new
Section 8.2 in lieu thereof:
8.2 FIXED CHARGE COVERAGE RATIO. Maintain as of the last day
of each fiscal quarter of Borrower, commencing with the fiscal
quarter ending December 31, 1996, a Fixed Charge Coverage Ratio for
such quarter of not less than 2.0 to 1.0.
2.21 Section 8.3 of the Loan Agreement is hereby amended by deleting
such section in its entirety and substituting therefore the following new
Section 8.3 in lieu thereof:
8.3 CAPITAL EXPENDITURES. Make no Capital Expenditure in any
fiscal year in excess of $2,000,000.
2.22 The Loan Agreement is hereby further amended by deleting
Exhibit A, the Form of Revolving Credit Note, attached thereto and substituting
a new Exhibit A thereto in the form of Exhibit A attached hereto and
incorporated herein by reference.
2.23 The Loan Agreement is hereby further amended by deleting
Exhibit D, the Form of Borrowing Base Certificate, attached thereto.
2.24 The Loan Agreement is hereby amended by deleting by Schedules
1.1, 5.2, 5.5, 5.8, 5.9, 5.10, 5.14, 5.19, 5.22, 5.27, 5.29, and 7.2 attached
thereto and substituting new Schedules 1.1, 5.2, 5.5, 5.8, 5.9, 5.10, 5.14,
5.19, 5.22, 5.27, 5.29, and 7.2 thereto in the forms of Xxxxxxxx X, X, X, X, X,
X, X, X, X, X, X and M, respectively, attached hereto and incorporated by
reference.
3. EXPENSES. Borrower agrees to pay, immediately upon demand by Bank, all
costs, expenses, attorneys' fees, and other charges and expenses incurred by
Bank in connection with the negotiation, preparation, execution and delivery of
this Amendment.
4. DEFAULTS HEREUNDER. The breach of any representation, warranty or
covenant contained herein or in any document executed in connection herewith,
or the failure to observe or comply with any term or agreement contained herein
or in any document executed in conjunction herewith, shall constitute an Event
of Default under the Loan Documents and Bank shall be entitled to exercise all
rights and remedies it may have under the Loan Agreement, any of the other Loan
Documents and applicable law.
5. REPRESENTATIONS AND WARRANTIES. All of the representations and
warranties made by Borrower under the Loan Agreement and the Loan Documents
shall be true and correct in all material respects as of the date hereof with
the same force and effect as if made on and as
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the date hereof except for such changes in such representations and warranties
which do not constitute a Default or Event of Default, which do not,
individually or in the aggregate, have a Material Adverse Effect and which
have, to the extent required, been disclosed to the Bank pursuant to Section
6.2 of the Loan Agreement or otherwise. Borrower further represents and
warrants to Bank on and as of the date of this Amendment, and after giving
effect thereto, no Default or Event of Default has occurred and is continuing.
6. CONDITIONS PRECEDENT. Subject to other terms and conditions hereof,
this Amendment shall not become effective unless and until the Bank shall have
received the following documents, each duly executed and delivered to Bank, and
each to be satisfactory in form and substance to Bank and its counsel:
(a) the Amendment;
(b) the Replacement Revolving Credit Note, in the form of Exhibit A
attached hereto;
(c) a certificate signed by the president and chief financial
officer of Borrower, stating that, giving effect to this Amendment, the
representations and warranties set forth in Article 5 of the Loan
Agreement are true and correct in all material respects on the date
hereof, Borrower is on the date hereof in compliance with all the terms
and conditions set forth in the Loan Agreement, as amended hereby, and
the Loan Documents on its part to be observed performed, and on the date
hereof, after giving effect to this Amendment, no Default or Event of
Default has occurred or is continuing;
(d) a certificate of the Secretary of Borrower certifying that
attached thereto is a true and correct copy of the resolutions adopted by
its Board of Directors, authorizing the execution, delivery and
performance of the Amendment, the Replacement Term Note and the other
documents contemplated hereby;
(e) good standing certificates for the Borrower, issued as of a date
close to the date hereof by the Secretaries of State of each of the
states in which the Borrower is required to be qualified to do business;
(f) the written opinion of Xxxxxxx & Xxxxxxx, P.A., counsel to
Borrower, in the form and substance satisfactory to Bank;
(g) an Acknowledgment and Agreement of Guarantor, executed by
Restor-AIT, Inc., a Delaware corporation;
(h) an Acknowledgment and Agreement of Guarantor, executed by Westec
Communications, Inc., a Delaware corporation;
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(i) a Guaranty and Agreement executed by Sunrise Sierra, Inc., a
Delaware corporation ("Sunrise");
(j) a Stock Pledge Agreement executed by Borrower with respect to
all the outstanding stock of Sunrise;
(k) such other documents, instruments and agreements with respect to
the transactions contemplated by this Amendment, in each case in such
form and containing such additional terms and conditions as may be
reasonably satisfactory to Bank, and containing, without limitation,
representations and warranties which are customary and usual in such
documents.
7. REFERENCES IN LOAN DOCUMENTS. All references in the Loan Agreement and
the other Loan Documents to the Loan Agreement shall hereafter be deemed to be
references to the Loan Agreement as amended hereby and as the same may
hereafter be amended from time to time.
8. NO CLAIMS, OFFSET. Borrower hereby represents, warrants, acknowledges
and agrees to and with Bank that (a) Borrower does not hold or claim any right
of action, claim, cause of action or damages, either at law or in equity,
against Bank which arises from, may arise from, allegedly arise from, are based
upon or are related in any manner whatsoever to the Loan Agreement and the Loan
Documents or which are based upon acts or omissions of Bank in connection
therewith and (b) the Obligations are absolutely owed to Bank, without offset,
deduction or counterclaim.
9. NO NOVATION. The terms of this Amendment are not intended to and do
not serve to effect a novation as to the Loan Agreement. The parties hereto
expressly do not intend to extinguish any debt or security interest created
pursuant to the Loan Agreement. Instead, it is the express intention of the
parties hereto to affirm the Loan Agreement and the security created thereby.
10. LIMITATION OF AMENDMENT. Except as expressly set forth herein, this
Amendment shall not be deemed to waive, amend or modify any term or condition
of the Loan Agreement or any of the other Loan Documents, each of which is
hereby ratified and reaffirmed, and which shall remain in full force and
effect, nor to serve as a consent to any matter prohibited by the terms and
conditions thereof.
11. COUNTERPARTS. This Amendment may be executed in any number of
counterparts, and any party hereto may execute any counterpart, each of which,
when executed and delivered, will be deemed to be an original and all of which,
taken together, will be deemed to be but one and the same agreement. Any
signature page to this Amendment may be witnessed by a telecopy or
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other facsimile of any original signature page or any counterpart hereof may be
appended to any other counterpart hereof to form a completely executed
counterpart hereof.
12. SUCCESSORS AND ASSIGNS. This Amendment shall be binding upon and
inure to the benefit of the successors and permitted assigns of the parties
hereto.
13. SECTION REFERENCES. Section titles and references used in this
Amendment shall be without substantive meaning or content of any kind
whatsoever and are not a part of the agreements among the parties hereto
evidenced hereby.
14. GOVERNING LAW. This Amendment shall be governed by, and construed in
accordance with, the laws of the State of New York, without regard to
principles of conflicts of law.
IN WITNESS WHEREOF, the parties hereto have executed this Amendment under
seal as of the date first written above.
"BORROWER"
WORLD ACCESS, INC., f/k/a Restor Industries, Inc.
By:
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Name:
Title:
"BANK"
CREDITANSTALT-BANKVEREIN
By:
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Xxxxxx X. Xxxxxxxx
Executive Vice President
By:
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Xxxxxx X. Xxxxxxx
Vice President
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Exhibit A
to the Third Amendment to
Second Amended and Restated Credit Agreement
dated as of December __, 1996
FORM OF REVOLVING CREDIT NOTE
$10,000,000.00 December __, 1996
FOR VALUE RECEIVED, the undersigned, WORLD ACCESS, INC. (formerly known as
Restor Industries, Inc.), a Delaware corporation (hereinafter referred to as
"Maker"), promises to pay to the order of Creditanstalt-Bankverein (hereinafter
referred to as the "Holder"), at the office of Creditanstalt-Bankverein located
at Two Xxxxxxxxx Xxxxx, Xxxxxxxxx, Xxxxxxxxxxx 00000 or at such other place as
Holder may from time to time designate in writing, the principal sum of XXX
XXXXXXX XXX 00/000 Xxxxxx Xxxxxx Dollars (U.S. $10,000,000.00) or, if less, the
aggregate outstanding principal amount of Revolving Credit Loans, as such term
is defined in the Loan Agreement referred to hereinbelow, made or issued by
Holder to Maker, in lawful money of the United States, payable in full on the
Revolving Credit Maturity Date.
Interest on the principal balance from time to time outstanding hereunder
shall accrue at the rates and shall be payable in the manner set forth in that
certain Second Amended and Restated Loan and Security Agreement dated as of
July 18, 1995 (as the same has been, and as the same may be further amended,
restated, supplemented or otherwise modified from time to time, the "Loan
Agreement"; capitalized terms contained herein and not otherwise defined herein
shall have the respective meanings given to such terms in the Loan Agreement)
by and between Maker and Holder. In no contingency or event whatsoever shall
the interest rate charged pursuant to the terms of this Revolving Credit Note
(this "Note") exceed the highest rate permissible under any law which a court
of competent jurisdiction shall, in a final determination, deem applicable
hereto. In the event that such a court determines that Holder has received
interest hereunder in excess of the highest applicable rate, Holder shall
promptly refund such excess interest to Maker.
The date and amount of each Revolving Credit Loan made by the Holder to
the Maker of this Note under the Loan Agreement, and each payment of principal
thereof, shall be recorded by Holder on its books and, prior to any transfer of
this Note, endorsed by Holder on the Schedule attached hereto or on any
continuation thereof.
This Note is, in part, a renewal and extension of and replacement for that
certain Revolving Credit Note dated as of March 28, 1996 by Maker and payable
to the order of Holder in the original principal amount of $6,000,000.
This Note is the "Revolving Credit Note" referred to in the Loan
Agreement, and is subject to all of the terms and conditions of the Loan
Agreement, including, but not limited to,
14
those related to the acceleration of the indebtedness represented hereby upon
the occurrence of an Event of Default or the reduction of the Revolving Credit
Commitment. Payment of this Note is secured by the Collateral.
In the event that all or any portion of the indebtedness evidenced hereby
shall be collected by or through an attorney-at-law, Holder shall be entitled
to collect from Maker all costs of collection, including reasonable attorneys'
fees.
Maker hereby waives presentment, demand for payment, protest and notice of
protest, notice of dishonor and all other notices in connection with this Note.
This Note shall be payable without right of setoff, any defense of want or
failure of consideration, nonperformance of any condition precedent,
nondelivery or delivery for a special purpose or any other defense of any
nature whatsoever.
THIS NOTE, AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER, SHALL
BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK (WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW). MAKER HEREBY (A)
SUBMITS TO THE NONEXCLUSIVE JURISDICTION OF THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF NEW YORK AND OF ANY NEW YORK STATE COURT SITTING
IN NEW YORK CITY FOR THE PURPOSES OF ALL LEGAL PROCEEDINGS ARISING OUT OF OR
RELATING TO THIS NOTE AND (B) IRREVOCABLY WAIVES, TO THE FULLEST EXTENT
PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE REGARDING
THE LAYING OF THE VENUE OF ANY SUCH PROCEEDING BROUGHT IN SUCH A COURT AND ANY
CLAIM THAT ANY SUCH PROCEEDING BROUGHT IN SUCH A COURT HAS BEEN BROUGHT IN AN
INCONVENIENT FORUM. NOTWITHSTANDING ANYTHING HEREIN TO THE CONTRARY, NOTHING
HEREIN SHALL LIMIT THE RIGHT OF THE HOLDER TO BRING PROCEEDINGS AGAINST MAKER
IN THE COURTS OF ANY OTHER JURISDICTION WITHIN THE UNITED STATES OF AMERICA OR
IN WHICH ANY COLLATERAL IS LOCATED.
AFTER REVIEWING THIS PROVISION SPECIFICALLY WITH ITS COUNSEL, MAKER HEREBY
KNOWINGLY, INTELLIGENTLY AND INTENTIONALLY WAIVES ANY AND ALL RIGHTS IT MAY
HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LEGAL PROCEEDING BASED ON OR ARISING
OUT OF, UNDER, IN CONNECTION WITH, OR RELATING TO THIS NOTE, THE TRANSACTIONS
CONTEMPLATED HEREBY, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS
(WHETHER ORAL OR WRITTEN), OR ACTIONS OF MAKER OR HOLDER. THIS PROVISION IS A
MATERIAL INDUCEMENT FOR THE HOLDER TO MAKE THE LOANS EVIDENCED BY THIS NOTE TO
MAKER.
15
IN WITNESS WHEREOF, the undersigned has caused this Note to be executed
under seal by its duly authorized officer as of the day and year first written
above.
"MAKER"
WORLD ACCESS, INC.,
a Delaware corporation
By:
---------------------------------------------
Title:
------------------------------------
Attest:
---------------------------------------------
Title:
------------------------------------
[CORPORATE SEAL]
16
Schedule to
Revolving Credit Note
Dated as of December ___, 1996
of World Access, Inc.,
a Delaware corporation
Principal Principal
Amount of Interest Amount of Outstanding
Date Loan Rate Payment Balance
---- --------- -------- --------- -----------
17
Exhibit B
to Third Amendment to
Second Amended and Restated Loan
and Security Agreement
dated as of December 19, 1996
SCHEDULE 1.1
PERMITTED LIENS
1. A.D.M. Ventures, Inc., d/b/a Yale Industrial
Trucks-Gulf/Atlantic lien against one (1) hand truck (Lease)
2. Credential Leasing Corp. lien against Orlando facility's
telephone equipment and auxiliary equipment (Lease Purchase)
3. IBM Credit Corporation lien against AS400 computer (Model
F20) and related equipment and software (Lease Purchase)
4. AT&T Capital Corporation and/or Affiliated Service Corp. lien
against Universal VCD Inserter and related equipment and software
(Lease Purchase)
5. Copelco Capital, Inc. lien against Quad Surface Mount
equipment, Genrad Test equipment and other assembly equipment (Lease
Purchase)
6. Midwest Commerce Leasing lien against one Yale forklift
(Lease Purchase)
18
Exhibit C
to Third Amendment to
Second Amended and Restated Loan
and Security Agreement
dated as of December 19, 1996
SCHEDULE 5.2
CHIEF EXECUTIVE OFFICE: COLLATERAL LOCATIONS
Borrower's principal place of business and chief executive office:
000 X. Xxxxx Xxxxx Xxxx, Xxxxx 0000
Xxxxxxx, Xxxxxx Xxxxxx, Xxxxxxx 00000
Borrower's principal place of business and chief executive office
prior to November 1996:
0000 Xxxxxxxx Xxxx
Xxxxxxx, Xxxxxxx 00000
Locations Where Collateral is Located
000 X. Xxxxx Xxxxx Xxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000
0000 Xxxxxxxx Xxxx
Xxxxxxx, Xxxxxxx 00000
00000 Xxxx Xxxx Xxxx
Xxxxxx, XX 00000
0000 Xxxxx Xxxxxx Xxxxx
Xxxxx Xxxx, XX 00000
0000 Xxxxxxx Xxxxx Xxxx
Xxxxxxxx, Xxxxxxx 00000
0000 Xxxxxxx Xxxxx Xxxx
Xxxxxxxx, Xxxxxxx 00000
0000 Xxxxxxx Xxxxx Xxxx
00
Xxxxxxxx, Xxxxxxx 00000
0000 Xxxxxxx Xxxx
Xxxxxxxx, Xxxxxxx 00000
00000 X. Xxxxxxxxxx Xxxx
Xxxxxxxxxx, Xxxxxxx 00000
0000 #X Xxx Xxxxxxx Xxxx
Xxxxxxxxx, Xxxxxxxxxx 00000
20
Exhibit D
to Third Amendment to
Second Amended and Restated Loan
and Security Agreement
dated as of December 19, 1996
SCHEDULE 5.5
LITIGATION AND RELATED PROCEEDINGS
PENDING
1. Olympia Holding Corporation, Debtor, Xxxxx X. Xxxxxxxx
Trustee, Plaintiff vs. Restor Industries, Inc., Defendant (United
States Bankruptcy Court, Middle District of Florida, Jacksonville
Division)
2. Mil-Pro Services, Inc., Third Party Plaintiff vs Rytek
Corporation, Restor Industries, Inc. and Atmel, Inc., Third Party
Defendants (Circuit Court in and for Orange County, Florida)
3. R. Xxxxx Xxxxxx, d/b/a Technology Resources Ltd., Plaintiff
vs. World Access, Inc. Xx. Xxxxxx, an Illinois based outside sales
representative for the Company, claims the Company is liable for
sales commissions on certain sales to DSC Communications, Inc.
THREATENED:
1. Circuit Concepts, Inc., dispute involving $36,473 of
fabricated circuit boards purchased by Restor in early 1994, but not
paid for due to a troubled customer program and poor vendor
performance.
21
Exhibit E
to Third Amendment to
Second Amended and Restated Loan
and Security Agreement
dated as of December 19, 1996
SCHEDULE 5.8
INTANGIBLE ASSETS
1. Trademark Registration No. 1585081 for Restor valid 02/27/90
- 02/26/00
2. Trademark Application No. 75/170153 for the World Access
logo.
3. Trademark Application No. 75/170154 for CDX, Compact Digital
Exchange.
4. Trademark Application No. 75/170250 for the World Access
alternate logo.
22
Exhibit F
to Third Amendment to
Second Amended and Restated Loan
and Security Agreement
dated as of December 19, 1996
SCHEDULE 5.9
TAXES
Borrower has not yet filed its Florida state tax return for the
years ended December 31, 1994 and December 31, 1995.
23
Exhibit G
to Third Amendment to
Second Amended and Restated Loan
and Security Agreement
dated as of December 19, 1996
SCHEDULE 5.10
ERISA MATTERS
(a) The only formal plans maintained as Restor Industries, Inc.
are:
(i) Restor Industries, Inc. Profit Sharing and
Retirement Savings Plan (401k)
(ii) Restor Industries, Inc. Flexible Benefits Plan (Section 125)
24
Exhibit H
to Third Amendment to
Second Amended and Restated Loan
and Security Agreement
dated as of December 19, 1996
SCHEDULE 5.14
ENVIRONMENTAL MATTERS
NONE
25
Exhibit I
to Third Amendment to
Second Amended and Restated Loan
and Security Agreement
dated as of December 19, 1996
SCHEDULE 5.19
CORPORATE AND TRADE OR FICTITIOUS NAMES
Restor Supply
Restor Telephone Products
REMS (1992-93)
Subscriber Systems (Pre-1990)
AIT, Inc.
American & International Telephone
Westec Communications, Inc.
Sunrise Sierra, Inc.
Restor Industries, Inc.
Restor-AIT, Inc.
26
Exhibit J
to Third Amendment to
Second Amended and Restated Loan
and Security Agreement
dated as of December 19, 1996
SCHEDULE 5.22
1. The following companies all represent 100% owned subsidiaries
of World Access, Inc.
Company State of Incorporation
Restor-AIT, Inc. Delaware
Westec Communications, Inc. Delaware
Sunrise Sierra, Inc. Delaware
2. The following company is a 50% owned subsidiary of World
Access, Inc.
Company State of Incorporation
ICC, Inc. Florida
ICC, Inc. has no known assets or liabilities and is expected to be
liquidated in December 1996.
27
Exhibit K
to Third Amendment to
Second Amended and Restated Loan
and Security Agreement
dated as of December 19, 1996
SCHEDULE 5.27
OPERATING LEASES
Facilities Monthly Rent Expiration
Date
Orlando - Manufacturing Facility 3,400.00 November 1998
Orlando - Corporate Apartment 965.00 July 1997
Atlanta - Corporate Office 7,500.00 October 1998
Atlanta - Corporate Apartment 1,000.00 May 0000
Xxxxx Xxxx 4,032.00 July 1997
Dallas 8,961.00 July 0000
Xxxxxxxxx 3,557.00(1) June 1997
Lakeland - 0000 Xxxxxxx Xxxx 3,710.00 March 1997
Lakeland - 3610 Venture Dr. 3,115.00 June 1998
Lakeland - 3712 Venture Dr. 1,700.00 March 0000
Xxxxxxxx - Xxxxxxx Xxxx 2,915.00 December, 1998
California 7,200.00 ----------------
Scottsdale 7,214.00 November 1999
INFORMATION SYSTEMS:
Digital Equipment-personal computers 3,500.00 March 1998
PRODUCTION EQUIPMENT:
Copelco Capital - Surface Mount Line &
Testing Equipment 25,335.00(2) May-July 1990
Yale-motorized hand truck 100.00 -----------------
Pitney Bowes - carrier manifest system (SB) 150.00 Monthly
L.H. Leasing - trailer storage 105.00 Monthly
Midwest Commerce Leasing - Yale forklift (SB) 130.00 May 1996
Penskc Truck Rental - 24 foot truck 900.00 Monthly
AT&T Capital - Universal VCD Inserter 1,478.00 July 1998
28
OFFICE EQUIPMENT:
Copytronics - Minolta equipment (3 machines) 1,215.00 November 1997
Toshiba - 2 fax machines, 2 copiers 400.00 May 1999
First United - Sharp fax (SB) 73.00 Monthly
Meridan - Sharp fax 143.00 _________
Neopost - Parcel Shipping system (OR) 100.00 _________
Ascom Xxxxxx - Postage Meter (Orlando) 40.00 Quarterly
Ascom Xxxxxx - Postrage Meter (Atlanta) 54.00 November 2000
Pitney Xxxxx - Postage meter (TX) 36.00 Quarterly
Pitney Xxxxx - Postage meter (AZ) 211.00 July 1999
TOTAL MONTHLY RENTALS 119,239.00
==========
(1) Facility has been subleased for the full rental rate through the
remaining term of the lease.
(2) Payments 2-25 of Equipment Lease will be $25,335. Payments 26-48 will be
$10,760. Rent expense for the equipment is being charged to operations
on a straight-line basis (total rents due/48 months).
29
Exhibit L
to Third Amendment to
Second Amended and Restated Loan
and Security Agreement
dated as of December 19, 1996
SCHEDULE 5.29
LABOR MATTERS
1. Written Employment Agreements with Management:
Name Title Agreement
---- ----- ---------
Xxxxxxx Xxxx (RTP) V.P. & General Dated April 1991, renewed
Manager on an annual basis
Xxxxx Xxxxxxx (AIT) President Two year agreement
expiring July 10, 1997
Xxxxxxx Xxxx (AIT) V.P. & General Two year agreement
Manager expiring August 21, 1997
Xxxxxx X'Xxxx (Westec) President One year agreement
expiring October 31, 1996
Xxxxxxx X. Xxx (Sunrise) President Three year agreement
expiring December 31, 1998
2. No collective bargaining agreements exist.
3. No strikes or other labor disputes are pending or threatened.
30
Exhibit M
to Third Amendment to
Second Amended and Restated Loan
and Security Agreement
dated as of December 19, 1996
SCHEDULE 7.2
PERMITTED INDEBTEDNESS
None
