EXHIBIT E
INDEMNITY, SUBROGATION and CONTRIBUTION AGREEMENT dated as of
August 25, 1997, among TEL-SAVE HOLDINGS, INC., a Delaware corporation
(the "Borrower"), each person listed on the signature page hereto (the
"Guarantors") and SALOMON BROTHERS HOLDING COMPANY INC, a Delaware
corporation ("SBHC"), as collateral agent (in such capacity, the
"Collateral Agent") for the Secured Parties (as defined in the Credit
Agreement referred to below).
Reference is made to (a) the Credit Agreement dated as of
August 25, 1997 (as amended, supplemented or otherwise modified from
time to time, the "Credit Agreement"), among the Borrower, the lenders
from time to time party thereto (the "Lenders"), any Lender identified
pursuant thereto as an issuing bank (the "Issuing Bank") and SBHC, as
administrative agent for the Lenders (in such capacity, the
"Administrative Agent") and Collateral Agent, and (b) the Guarantee
Agreement dated as of August 25, 1997, among the Guarantors and the
Collateral Agent (the "Guarantee Agreement"). Capitalized terms used
herein and not defined herein shall have the meanings assigned to such
terms in the Credit Agreement.
The Lenders have agreed to make Loans to the Borrower, and an
Issuing Bank may agree to issue Letters of Credit for the account of
the Borrower, pursuant to, and upon the terms and subject to the
conditions specified in, the Credit Agreement. The Guarantors have
guaranteed such Loans and the other Obligations (as defined in the
Guarantee Agreement) of the Borrower under the Credit Agreement
pursuant to the Guarantee Agreement; certain Guarantors have granted
Liens on and security interests in certain of their assets to secure
such guarantees. The obligations of the Lenders to make Loans and of
any Issuing Bank to issue Letters of Credit are conditioned on, among
other things, the execution and delivery by the Borrower and the
Guarantors of an agreement in the form hereof.
Accordingly, the Borrower, each Guarantor and the Collateral
Agent agree as follows:
SECTION 1. Indemnity and Subrogation. In addition to all such
rights of indemnity and subrogation as the Guarantors may have under
applicable law (but subject to Section 3), the Borrower agrees that (a)
in the event a payment shall be made by any Guarantor under the
Guarantee Agreement, the Borrower shall indemnify such Guarantor for
the full amount of such payment and such Guarantor shall be subrogated
to the rights of the person to whom such payment shall have been made
to the extent of such payment and (b) in the event any assets of any
Guarantor shall be sold pursuant to any Security Document to satisfy a
claim of any Secured Party, the Borrower shall indemnify such Guarantor
in an amount equal to the greater of the book value or the fair market
value of the assets so sold.
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SECTION 2. Contribution and Subrogation. Each Guarantor (a
"Contributing Guarantor") agrees (subject to Section 3) that, in the
event a payment shall be made by any other Guarantor under the
Guarantee Agreement or assets of any other Guarantor shall be sold
pursuant to any Security Document to satisfy a claim of any Secured
Party and such other Guarantor (the "Claiming Guarantor") shall not
have been fully indemnified by the Borrower as provided in Section 1,
the Contributing Guarantor shall indemnify the Claiming Guarantor in an
amount equal to the amount of such payment or the greater of the book
value or the fair market value of such assets, as the case may be, in
each case multiplied by a fraction of which the numerator shall be the
net worth of the Contributing Guarantor on the date hereof and the
denominator shall be the aggregate net worth of all the Guarantors on
the date hereof (or, in the case of any Guarantor becoming a party
hereto pursuant to Section 12, the date of the Supplement hereto
executed and delivered by such Guarantor). Any Contributing Guarantor
making any payment to a Claiming Guarantor pursuant to this Section 2
shall be subrogated to the rights of such Claiming Guarantor under
Section 1 to the extent of such payment. Notwithstanding anything else
herein, the obligations of Xxxxxx Xxxxxxxx hereunder will be limited
the Collateral pledged under the Pledged Agreement of even date
herewith between Xxxxxx Xxxxxxxx and the Collateral Agent.
SECTION 3. Subordination. Notwithstanding any provision of
this Agreement to the contrary, all rights of the Guarantors under
Sections 1 and 2 and all other rights of indemnity, contribution or
subrogation under applicable law or otherwise shall be fully
subordinated to the indefeasible payment in full in cash of the
Obligations. No failure on the part of the Borrower or any Guarantor to
make the payments required by Sections 1 and 2 (or any other payments
required under applicable law or otherwise) shall in any respect limit
the obligations and liabilities of any Guarantor with respect to its
obligations hereunder, and each Guarantor shall remain liable for the
full amount of the obligations of such Guarantor hereunder.
SECTION 4. Termination. This Agreement shall survive and be in
full force and effect so long as any Obligation is outstanding and has
not been indefeasibly paid in full in cash, and so long as any L/C
Exposure has not been reduced to zero or any of the Commitments under
the Credit Agreement have not been terminated, and shall continue to be
effective or be reinstated, as the case may be, if at any time payment,
or any part thereof, of any Obligation is rescinded or must otherwise
be restored by any Secured Party or any Guarantor upon the bankruptcy
or reorganization of the Borrower, any Guarantor or otherwise.
SECTION 5. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY,
AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
SECTION 6. No Waiver; Amendment. (a) No failure on the part of
the Collateral Agent or any Guarantor to exercise, and no delay in
exercising, any right, power or remedy hereunder shall operate as a
waiver thereof, nor shall any single or partial exercise of any such
right, power or remedy by the Collateral Agent or any Guarantor
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preclude any other or further exercise thereof or the exercise of any
other right, power or remedy. All remedies hereunder are cumulative and
are not exclusive of any other remedies provided by law. None of the
Collateral Agent and the Guarantors shall be deemed to have waived any
rights hereunder unless such waiver shall be in writing and signed by
such parties.
(b) Neither this Agreement nor any provision hereof may be
waived, amended or modified except pursuant to a written agreement
entered into between the Borrower, the Guarantors and the Collateral
Agent, with the prior written consent of the Required Lenders (except
as otherwise provided in the Credit Agreement).
SECTION 7. Notices. All communications and notices hereunder
shall be in writing and given as provided in the Guarantee Agreement
and addressed as specified therein.
SECTION 8. Binding Agreement; Assignments. Whenever in this
Agreement any of the parties hereto is referred to, such reference
shall be deemed to include the successors and assigns of such party;
and all covenants, promises and agreements by or on behalf of the
parties that are contained in this Agreement shall bind and inure to
the benefit of their respective successors and assigns. Neither the
Borrower nor any Guarantor may assign or transfer any of its rights or
obligations hereunder (and any such attempted assignment or transfer
shall be void) without the prior written consent of the Required
Lenders. Notwithstanding the foregoing, at the time any Guarantor is
released from its obligations under the Guarantee Agreement in
accordance with such Guarantee Agreement and the Credit Agreement, such
Guarantor will cease to have any rights or obligations under this
Agreement.
SECTION 9. Survival of Agreement; Severability. (a) All
covenants and agreements made by the Borrower and each Guarantor herein
and in the certificates or other instruments prepared or delivered in
connection with this Agreement or the other Loan Documents shall be
considered to have been relied upon by the Collateral Agent, the other
Secured Parties and each Guarantor and shall survive the making by the
Lenders of the Loans and the issuance of any Letters of Credit by any
Issuing Bank, and shall continue in full force and effect as long as
the principal of or any accrued interest on any Loans or any other fee
or amount payable under the Credit Agreement or this Agreement or under
any of the other Loan Documents is outstanding and unpaid or the L/C
Exposure does not equal zero and as long as the Commitments have not
been terminated.
(b) In case any one or more of the provisions contained in
this Agreement should be held invalid, illegal or unenforceable in any
respect, no party hereto shall be required to comply with such
provision for so long as such provision is held to be invalid, illegal
or unenforceable, but the validity, legality and enforceability of the
remaining provisions contained herein shall not in any way be affected
or impaired thereby. The parties shall endeavor in good-faith
negotiations to replace the invalid, illegal or unenforceable
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provisions with valid provisions the economic effect of which comes as
close as possible to that of the invalid, illegal or unenforceable
provisions.
SECTION 10. Counterparts. This Agreement may be executed in
counterparts (and by different parties hereto on different
counterparts), each of which shall constitute an original, but all of
which when taken together shall constitute a single contract. This
Agreement shall be effective with respect to any Guarantor when a
counterpart bearing the signature of such Guarantor shall have been
delivered to the Collateral Agent. Delivery of an executed signature
page to this Agreement by facsimile transmission shall be as effective
as delivery of a manually signed counterpart of this Agreement.
SECTION 11. Rules of Interpretation. The rules of
interpretation specified in Section 1.02 of the Credit Agreement shall
be applicable to this Agreement.
SECTION 12. Additional Guarantors. Pursuant to Section 5.11 of
the Credit Agreement, each Subsidiary of the Borrower that was not in
existence on the date of the Credit Agreement is required to enter into
the Guarantee Agreement as a Guarantor upon becoming a Subsidiary. Upon
execution and delivery, after the date hereof, by the Collateral Agent
and such a Subsidiary of an instrument in the form of Annex 1 hereto,
such Subsidiary shall become a Guarantor hereunder with the same force
and effect as if originally named as a Guarantor hereunder. The
execution and delivery of any instrument adding an additional Guarantor
as a party to this Agreement shall not require the consent of any
Guarantor hereunder. The rights and obligations of each Guarantor
hereunder shall remain in full force and effect notwithstanding the
addition of any new Guarantor as a party to this Agreement.
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IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their duly authorized officers as of the
date first appearing above.
TEL-SAVE HOLDINGS, INC.
By:
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Name:
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Title:
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XXXXXX XXXXXXXX
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TEL-SAVE, INC.
By:
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Name:
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Title:
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EMERGENCY TRANSPORT CORP.
By:
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Name:
---------------------------------
Title:
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TEL-SAVE HOLDINGS OF
VIRGINIA, INC.
By:
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Name:
---------------------------------
Title:
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TSHCo, INC.
By:
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Name:
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Title:
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SALOMON BROTHERS HOLDING COMPANY INC,
as Collateral Agent,
By:
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Name:
---------------------------------
Title:
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Annex 1 to
the Indemnity, Subrogation and
Contribution Agreement
SUPPLEMENT NO. dated as of , to the Indemnity, Subrogation
and Contribution Agreement dated as of August 25, 1997 (as the
same may be amended, supplemented or otherwise modified from time
to time, the "Indemnity, Subrogation and Contribution
Agreement"), among TEL-SAVE HOLDINGS, INC., a Delaware
corporation (the "Borrower") each person listed on the signature
page thereto (the "Guarantors"), and SALOMON BROTHERS HOLDING
COMPANY INC, a Delaware corporation ("SBHC"), as collateral agent
(the "Collateral Agent") for the Secured Parties (as defined in
the Credit Agreement referred to below).
A. Reference is made to (a) the Credit Agreement dated as of
August 25, 1997 (as amended, supplemented or otherwise modified from
time to time, the "Credit Agreement"), among the Borrower, the lenders
from time to time party thereto (the "Lenders"), the Lender identified
therein as an issuing bank (the "Issuing Bank") and SBHC, as
administrative agent for the Lenders (in such capacity, the
"Administrative Agent") and Collateral Agent, and (b) the Guarantee
Agreement dated as of August 25, 1997, among the Guarantors and the
Collateral Agent (the "Guarantee Agreement").
B. Capitalized terms used herein and not otherwise defined
herein shall have the meanings assigned to such terms in the Indemnity,
Subrogation and Contribution Agreement and the Credit Agreement.
C. The Borrower and the Guarantors have entered into the
Indemnity, Subrogation and Contribution Agreement in order to induce
the Lenders to make Loans and any Issuing Bank to issue Letters of
Credit. Pursuant to Section 5.11 of the Credit Agreement, each
Subsidiary of the Borrower that was not in existence on the date of the
Credit Agreement is required to enter into the Guarantee Agreement as a
Guarantor upon becoming a Subsidiary. Section 12 of the Indemnity,
Subrogation and Contribution Agreement provides that additional
Subsidiaries of the Borrower may become Guarantors under the Indemnity,
Subrogation and Contribution Agreement by execution and delivery of an
instrument in the form of this Supplement. The undersigned Subsidiary
of the Borrower (the "New Guarantor") is executing this Supplement in
accordance with the requirements of the Credit Agreement to become a
Guarantor under the Indemnity, Subrogation and Contribution Agreement
in order to induce the Lenders to make additional Loans and any Issuing
Bank to issue additional Letters of Credit and as consideration for
Loans previously made and Letters of Credit previously issued.
Accordingly, the Collateral Agent and the New Guarantor agree
as follows:
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SECTION 1. In accordance with Section 12 of the Indemnity,
Subrogation and Contribution Agreement, the New Guarantor by its
signature below becomes a Guarantor under the Indemnity, Subrogation
and Contribution Agreement with the same force and effect as if
originally named therein as a Guarantor and the New Guarantor hereby
agrees to all the terms and provisions of the Indemnity, Subrogation
and Contribution Agreement applicable to it as a Guarantor thereunder.
Each reference to a "Guarantor" in the Indemnity, Subrogation and
Contribution Agreement shall be deemed to include the New Guarantor.
The Indemnity, Subrogation and Contribution Agreement is hereby
incorporated herein by reference.
SECTION 2. The New Guarantor represents and warrants to the
Collateral Agent and the other Secured Parties that this Supplement has
been duly authorized, executed and delivered by it and constitutes its
legal, valid and binding obligation, enforceable against it in
accordance with its terms.
SECTION 3. This Supplement may be executed in counterparts
(and by different parties hereto on different counterparts), each of
which shall constitute an original, but all of which when taken
together shall constitute a single contract. This Supplement shall
become effective when the Collateral Agent shall have received
counterparts of this Supplement that, when taken together, bear the
signatures of the New Guarantor and the Collateral Agent. Delivery of
an executed signature page to this Supplement by facsimile transmission
shall be as effective as delivery of a manually signed counterpart of
this Supplement.
SECTION 4. Except as expressly supplemented hereby, the
Indemnity, Subrogation and Contribution Agreement shall remain in full
force and effect.
SECTION 5. THIS SUPPLEMENT SHALL BE GOVERNED BY, AND CONSTRUED
IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
SECTION 6. In case any one or more of the provisions contained
in this Supplement should be held invalid, illegal or unenforceable in
any respect, neither party hereto shall be required to comply with such
provision for so long as such provision is held to be invalid, illegal
or unenforceable, but the validity, legality and enforceability of the
remaining provisions contained herein and in the Indemnity, Subrogation
and Contribution Agreement shall not in any way be affected or
impaired. The parties hereto shall endeavor in good-faith negotiations
to replace the invalid, illegal or unenforceable provisions with valid
provisions the economic effect of which comes as close as possible to
that of the invalid, illegal or unenforceable provisions.
SECTION 7. All communications and notices hereunder shall be
in writing and given as provided in Section 7 of the Indemnity,
Subrogation and Contribution Agreement. All communications and notices
hereunder to the New Guarantor shall be given to it at the address set
forth under its signature.
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XXXXXXX 0. Xxx Xxx Xxxxxxxxx agrees to reimburse the
Collateral Agent for its reasonable out-of-pocket expenses in
connection with this Supplement, including the reasonable fees, other
charges and disbursements of counsel for the Collateral Agent.
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IN WITNESS WHEREOF, the New Guarantor and the Collateral Agent
have duly executed this Supplement to the Indemnity, Subrogation and
Contribution Agreement as of the day and year first above written.
[Name of Guarantor]
By:
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Name:
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Title:
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Address
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SALOMON BROTHERS HOLDING COMPANY INC,
as Collateral Agent
By:
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Name:
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Title:
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