Exhibit 10.56
[EXECUTION]
EIGHTH AMENDMENT TO LOAN AND SECURITY AGREEMENT
OF
CAPROCK COMMUNICATIONS CORP.
THIS EIGHTH AMENDMENT TO Loan and Security Agreement (this "Amendment")
is made as of June 18, 1998 by and between CapRock Communications Corp.
("Debtor") and Bank One, Texas, N.A. ("Secured Party").
W I T N E S S E T H:
WHEREAS, Debtor and Secured Party have entered into that certain Loan
and Security Agreement dated as of March 14, 1996 (as supplemented or amended
to the date hereof, the "Original Agreement"), for the purposes and
consideration therein expressed, pursuant to which Secured Party became
obligated to make and made loans to Debtor as therein provided; and
WHEREAS, Debtor and Secured Party desire to amend the Original Agreement
for the purposes set forth herein;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and agreements contained herein and in the Original Agreement, in
consideration of the loans which may hereafter be made by Secured Party to
Debtor, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto do hereby
agree as follows:
ARTICLE I. - DEFINITIONS AND REFERENCES
Section 1.1 TERMS DEFINED IN THE ORIGINAL AGREEMENT. Unless the
context otherwise requires or unless otherwise expressly defined herein, the
terms defined in the Original Agreement shall have the same meanings whenever
used in this Amendment.
Section 1.2. OTHER DEFINED TERMS. Unless the context otherwise
requires, the following terms when used in this Amendment shall have the
meanings assigned to them in this Section 1.2.
"AMENDMENT" means this Eighth Amendment to Loan and Security
Agreement.
"AMENDMENT DOCUMENTS" means this Amendment, the Renewal Note and
the Guarantor Consents.
"GUARANTOR CONSENTS" means each of the Guarantor Consent and
Agreements, substantially in the form of Exhibit D hereto.
"INTERCOMPANY NOTE" means a promissory note with appropriate
insertions in the form attached hereto as Exhibit C, duly executed by
CapRock Fiber payable to the order of Debtor.
"LOAN AGREEMENT" means the Original Agreement as amended hereby.
"ORIGINAL NOTE" means the promissory note referred to in Section
2(a) of the Original Agreement.
"RENEWAL NOTE" means a promissory note with appropriate insertions
in the form attached hereto as Exhibit A payable to the order of Secured
Party on or before the Maturity Date, expressly renewing the Original
Note;
ARTICLE II. - AMENDMENTS TO ORIGINAL AGREEMENT
Section 2.1. BORROWING BASE. Section 1(g) of the Original Agreement is
hereby amended by deleting the present such section in its entirety and
substituting therefor the following:
"(g) 'BORROWING BASE' shall mean, as of any date of determination,
the LESSER of (i) the sum of $7,000,000 less the Letter of Credit
Exposure, or (ii) the sum of (1) the product of (A) the Accounts Advance
Rate and (B) Debtor's Eligible Accounts, PLUS, WITHOUT DUPLICATION, (2)
the lesser of (A) $500,000 and (B) 85% of Debtor's Unbilled Accounts
(PROVIDED that , notwithstanding what the calculation would otherwise
be, the amount determined under this clause (2) shall be ZERO for the
sixth day of each month through the twenty-fifth day of each month
inclusive), PLUS (3) the Fixed Asset Component LESS (4) the Letter of
Credit Exposure, LESS (5) the Reserve, all determined as of such date of
determination."
Section 2.2. MATURITY DATE. Section 1(bb) of the Original Agreement is
hereby amended by deleting the present such section in its entirety and
substituting therefor the following:
"(bb) 'MATURITY DATE' shall mean the earlier of (i) August 31, 1998
and (ii) the first date on which both of the Note Offering and the
Merger have been consummated."
2
Section 2.3. REVOLVING LINE. Section 1(hh) of the Original Agreement is
hereby amended by deleting the present such section in its entirety and
substituting therefor the following:
"(hh) 'REVOLVING LINE' means $7,000,000."
Section 2.4. NEW DEFINITIONS. Section 1 of the Original Agreement is
hereby amended by adding the following Sections 1(ff) throughout 1(kk)
immediately following Section 1(ee):
"(ff) 'CAPROCK FIBER' means CapRock Fiber Network, Ltd., a
Texas limited partnership."
"(gg) 'FIXED ASSET COMPONENT' means $1,750,000."
"(hh) 'INTERCOMPANY NOTE' means the promissory note payable to the
order of Debtor in the form of Exhibit C duly executed by CapRock Fiber."
"(ii) 'MERGER' means the merger of CapRock Fiber, Debtor and IWL
Communications Incorporated with Debtor being the surviving entity."
"(jj) 'NOTE OFFERING' means the note offering by Debtor, CapRock
Fiber, and IWL Communications Incorporated in the amount of at least
$100,000,000 or more."
"(kk) 'UNBILLED ACCOUNTS' means accounts receivable of Debtor that
would constitute Eligible Accounts except for the fact they such
accounts receivable have not been invoiced."
Section 2.5. REVOLVING LOANS. Section 2(a) is hereby amended to add the
following language at the end of such section:
"Debtor must give Secured Party written notice (or telephonic
notice promptly confirmed in writing) of any new Revolving Loans to be
advanced by Secured Party. Each such notice constitutes a "Borrowing
Notice" hereunder and must specify: (i) the aggregate amount of such new
Revolving Loans and the date on which such Revolving Loans are to be
advanced, and (ii) the amount of such new Revolving Loan, if any, that
shall be advanced by Secured Party to CapRock Fiber under the
Intercompany Note. Each such written request or confirmation must be
made in the form and substance of the "Borrowing Notice" attached hereto
as Exhibit B, duly completed. Each such telephonic request shall be
deemed a representation, warranty, acknowledgment and agreement by
Debtor as to the matters which are required to be set out in such
written confirmation."
Section 2.6. AMENDMENT OF SECTION 2. Section 2 of the Original
Agreement is hereby amended by adding thereto the following as Section 2(d):
"(d) USE OF PROCEEDS. Debtor shall use all Revolving Loans (i)
to provide working capital for its operations, (ii) for other general
business purposes and (iii) to make loans to CapRock Fiber. In no event
shall the funds from any Revolving Loan or any Letter of Credit be used
directly or indirectly by Debtor or CapRock Fiber to pay breakage fees
owed by Debtor in connection with the Merger or for the repurchase of
notes issued in the Note Offering or the payment of any premium with
respect thereto.
3
Section 2.7.NEGATIVE COVENANTS. The second sentence Section 12(m) is
hereby amended in its entirety to provide as follows:
"(m) As used herein, `INVESTMENT' in any Person means (i) any
investment, whether by means of share purchase, loan, advance, purchase
of debt instrument, extension of credit (other than accounts receivable
arising from the sale of goods or services in the ordinary course of
business), capital contribution or otherwise, in or to such Person, (ii)
the guaranty of any indebtedness of such Person or the subordination of
any claim against such Person to other indebtedness of such person or
entity or (iii) investments in an amount not to exceed $2,500,000 in the
aggregate to CapRock Fiber."
Section 2.8. EVENTS OF DEFAULT. The following Section 14(l) is hereby
added to Section 14 of the Original Agreement to provide as follows:
"(h) The failure of both of the Note Offering and the Merger to
have been successfully completed by August 31, 1998."
Section 2.9. EXHIBITS. Exhibit A to the Loan Agreement is hereby
amended in its entirety to read as set forth in Exhibit A to this Amendment
and is incorporated by reference herein. Exhibit B and Exhibit C are hereby
added to the Loan Agreement in the form of Exhibit B and Exhibit C attached
hereto and incorporated by reference herein.
Section ▇.▇▇.▇▇▇▇▇▇▇ WAIVER. Secured Party hereby waives the Default
existing as of December 31, 1997 under Section 12(o) of the Loan Agreement.
ARTICLE III. - CONDITIONS OF EFFECTIVENESS
Section 3.1. EFFECTIVE DATE. This Amendment shall become effective as
of the date first above written when and only when Secured Party shall have
received, at Secured Party's office, and executed by, if applicable, Debtor
or any Guarantor:
a. this Amendment;
b. the Renewal Note;
c. a certificate of the Secretary of Debtor dated the date of this
Amendment certifying that attached thereto is a true and complete
copy of resolutions adopted by the Board of Directors of Debtor
authorizing the execution, delivery and performance of this
Amendment and the Renewal Note, certifying the names and true
signatures of the officers of Debtor authorized to sign this
Amendment and the Renewal Note and certifying that all of the
representations and warranties set forth in Article IV hereof are
true and correct at and as of the time of such effectiveness;
d. a Consent of Guarantor;
e. the Intercompany Note and an assignment by Debtor of all notes and
obligations of CapRock Fiber Network, Ltd. to Debtor; and
4
f. such supporting documents as Secured Party may reasonably request.
ARTICLE IV. - REPRESENTATIONS AND WARRANTIES
Section 4.1. REPRESENTATIONS AND WARRANTIES OF DEBTOR. In order to
induce Secured Party to enter into this Amendment, Debtor represents and
warrants to Secured Party that:
(a) The representations and warranties contained in Section 7 of
the Original Agreement are true and correct at and as of the time of the
effectiveness hereof.
(b) Debtor and each Guarantor is duly authorized to execute and
deliver each Amendment Document to which it is a party and Debtor is and
will continue to be duly authorized to borrow and to perform its
obligations under the Loan Agreement. Debtor and each Guarantor which
is a corporation has duly taken all corporate action necessary to
authorize the execution and delivery of each Amendment Document to which
it is a party and to authorize the performance of its obligations
thereunder.
(c) The execution and delivery by Debtor and each Guarantor of
each Amendment Document to which it is a party, the performance by
Debtor and each Guarantor of their obligations thereunder and the
consummation of the transactions contemplated thereby do not and will
not conflict with any provision of law, statute, rule or regulation or
any organizational document of Debtor or any Guarantor, or of any
material agreement, judgment, license, order or permit applicable to or
binding upon Debtor or any Guarantor, or result in the creation of any
lien, charge or encumbrance upon any assets or properties of Debtor or
any Guarantor. Except for those which have been duly obtained, no
consent, approval, authorization or order of any court or governmental
authority or third party is required in connection with the execution
and delivery by Debtor and each Guarantor of each Amendment Document to
which it is a party or to consummate the transactions contemplated
hereby.
(d) When duly executed and delivered, the Loan Agreement and each
Amendment Document will be a legal and binding instrument and agreement
of Debtor and each Guarantor, to the extent each is a party thereto,
enforceable in accordance with its terms, except as limited by
bankruptcy, insolvency and similar laws applying to creditors' rights
generally and by principles of equity applying to creditors' rights
generally.
ARTICLE V. - MISCELLANEOUS
Section 5.1. RATIFICATION OF AGREEMENTS. The Original Agreement as
hereby amended is hereby ratified and confirmed in all respects. All Loan
Documents, as they may be amended or affected by the various Amendment
Documents, are hereby ratified and confirmed in all respects. Any reference
to the Loan Agreement in any Loan Document shall be deemed to refer to this
Amendment also. Any reference to the promissory note of Debtor shall be
deemed to be a reference to the Renewal Note. The execution, delivery and
effectiveness of the Amendment Documents shall not, except as expressly
provided herein or therein, operate as a waiver of any right, power or remedy
of Secured Party under the Loan Agreement or any other Loan Document nor
constitute a waiver of any provision of the Loan Agreement or any other Loan
Document.
5
Section 5.2. SURVIVAL OF AGREEMENTS. All representations, warranties,
covenants and agreements of Debtor herein shall survive the execution and
delivery of this Amendment and the Renewal Note and the performance hereof
and thereof, including without limitation the making or granting of the
Loans, and shall further survive until all of the Obligations are paid in
full. All statements and agreements contained in any certificate or
instrument delivered by Debtor or General Partner hereunder or under the Loan
Agreement to Secured Party shall be deemed to constitute representations and
warranties by, or agreements and covenants of, Debtor under this Amendment
and under the Loan Agreement.
Section 5.3. LOAN DOCUMENTS. The Amendment Documents are Loan
Documents, and all provisions in the Loan Agreement pertaining to Loan
Documents apply hereto and thereto.
Section 5.4. GOVERNING LAW. This Amendment shall be governed by and
construed in accordance with the laws of the State of Texas and any
applicable laws of the United States of America in all respects, including
construction, validity and performance.
Section 5.5. COUNTERPARTS. This Amendment may be separately executed
in counterparts and by the different parties hereto in separate counterparts,
each of which when so executed shall be deemed to constitute one and the same
Amendment.
THIS AMENDMENT AND THE OTHER LOAN DOCUMENTS REPRESENT THE FINAL
AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF
PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE
ARE NO UNWRITTEN ORAL AGREEMENTS OF THE PARTIES.
[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
6
IN WITNESS WHEREOF, this Amendment is executed as of the date first
above written.
BANK ONE, TEXAS, N.A.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇
Vice President
CAPROCK COMMUNICATIONS CORP.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇.
------------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇.
President
EXHIBIT A
RENEWAL AND EXTENSION PROMISSORY NOTE
$7,000,000 June 18, 1998
FOR VALUE RECEIVED, on or before the Maturity Date (as such term is
defined in the Loan Agreement, as hereinafter defined), the undersigned and
if more than one, each of them, jointly and severally (hereinafter referred
to as "Borrower'), promises to pay to the order of BANK ONE, TEXAS, NATIONAL
ASSOCIATION ("Bank") at its offices in Dallas County, Texas, at ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, the principal amount of SEVEN MILLION
AND NO/100 DOLLARS ($7,000,000.00) ("Total Principal Amount"), or such amount
less than the Total Principal Amount which is outstanding from time to time
if the total amount outstanding under this Promissory Note (this "Note") is
less than the Total Principal Amount, together with interest on such portion
of the Total Principal Amount which has been advanced to Borrower from the
date advanced until paid at a fluctuating rate per annum, which shall from
day to day be equal to the lesser of (a) the Maximum Rate (as hereinafter
defined), or (b) a rate ("Contract Rate"), calculated on the basis of the
actual days elapsed but computed as if each year consisted of 360 days, equal
to the sum of (A) the Base Rate of interest ("Base Rate") as established from
time to time by Bank (which may not be the lowest, best or most favorable
rate of interest which Bank may charge on loans to its customers) plus (B)
one and one-half percent (1.50%), each change in the rate to be charged on
this Note to become effective without notice to Borrower on the effective
date of each change in the Maximum Rate or the Base Rate, as the case may be;
provided, however, that (i) the Contract Rate shall be subject to reduction
as provided in the Loan Agreement (as hereinafter defined) and (ii) if at any
time the Contract Rate shall exceed the Maximum Rate, thereby causing the
interest on this Note to be limited to the Maximum Rate, then any subsequent
reduction in the base Rate shall not reduce the rate of interest on this Note
below the Maximum Rate until the total amount of interest accrued on this
Note equals the amount of interest which would have accrued on this Note if
the Contract Rate had at all times been in effect.
The term "Maximum Rate," as used herein, shall mean at the particular
time in question the maximum rate of interest which, under applicable law,
may then be charged on this Note. If such maximum rate of interest changes
after the date hereof and this Note provides for a fluctuating rate of
interest, the Maximum Rate shall be automatically increased or decreased, as
the case may be, without notice to Borrower from time to time as of the
effective date of each change in such maximum rate. If applicable law ceases
to provide for such a maximum rate of interest, the Maximum Rate shall be
equal to eighteen percent (18%) per annum. All capitalized terms used herein
that are not defined herein shall have the meaning given them in that certain
Loan and Security Agreement, dated as of March 14, 1996, by and between
Borrower and Bank (as the same has been and may be amended, restated,
renewed, extended, or otherwise modified, the "Loan Agreement").
The principal of and all accrued but unpaid interest on this Note shall
be due and payable as follows:
(a) interest shall be due and payable monthly as it accrues, commencing
on the first day of June, 1998, and continuing on the first day of each
successive month thereafter during the term of this Note; and
1
(b) the outstanding principal balance of this Note, together with all
accrued but unpaid interest, shall be due and payable on the Maturity Date.
All mandatory prepayments of principal and accrued but unpaid interest
thereon required to be made under the Loan Agreement shall be due and payable
immediately unless otherwise provided in the Loan Agreement.
To the extent that any interest is not paid on or before the day it
becomes due and payable, Bank may, at its option, add such accrued interest
to the principal of this Note. Notwithstanding anything herein to the
contrary, upon an Event of Default (as hereinafter defined) or at maturity,
whether by acceleration or otherwise, all principal of this Note shall, at
the option of Bank, bear interest at the Default Rate until paid.
This Note evidences obligations and indebtedness from time to time owing
by Borrower to Bank pursuant to the Loan Agreement, and is secured by, inter
alia, the Collateral. The holder of this Note is entitled to the benefits
and security provided in the Loan Documents.
Under the Loan Agreement, Borrower may request advances and make
payments hereunder from time to time, provided that it is understood and
agreed that the aggregate principal amount outstanding from time to time
hereunder shall not at any time exceed the Total Principal Amount. The
unpaid balance of this Note shall increase and decrease with each new advance
or payment hereunder, as the case may be. This Note shall not be deemed
terminated or canceled prior to the Maturity Date, although the entire
principal balance hereof may from time to time be paid in full. Borrower may
borrow, repay and reborrow hereunder in accordance with the provisions of the
Loan Agreement. All regularly scheduled payments of the indebtedness
evidenced by this Note and by any of the other Loan Documents shall be
applied first to any accrued but unpaid interest then due and payable
hereunder or thereunder and then to the principal amount then due and
payable. All non-regularly scheduled payments shall be applied to such
indebtedness in such order and manner as the holder of this Note may from
time to time determine in its sole discretion. All payments and prepayments
of principal of or interest on this Note shall be made in lawful money of the
United States of America in immediately available funds, at the address of
Bank indicated above, or such other place as the holder of this Note shall
designate in writing to Borrower. If any payment of principal of or interest
on this Note shall become due on a day which is not a Business Day, such
payment shall be made on the next succeeding Business Day and any such
extension of time shall be included in computing interest in connection with
such payment. The books and records of Bank shall be prima facie evidence of
all outstanding principal of and accrued and unpaid interest on this Note.
Borrower agrees that no advances under this Note shall be used for
personal, family or household purposes, and that all advances hereunder shall
be used solely for business, commercial, investment or other similar purposes.
Borrower agrees that upon the occurrence of any one or more Events of
Default (as defined in the Loan Agreement), the holder of this Note may, at
its option, without further notice or demand, (i) declare the outstanding
principal balance of and accrued but unpaid interest on this Note at once due
and payable, (ii) refuse to advance any additional amounts under this Note,
(iii) foreclose all liens and security interests securing payment hereof,
(iv) pursue and all other rights, remedies and recourses available to the
holder hereof, including but not limited to any such rights, remedies or
recourses under the Loan Documents, at law or in equity, or (v) pursue any
combination of the foregoing.
The failure to exercise the option to accelerate the maturity of this
Note or any other right, remedy or recourse available to the holder hereof
upon the occurrence of an Event of Default shall not constitute a
2
waiver of the right of the holder of this Note to exercise the same at that
time or at any subsequent time with respect to such Event of Default or any
other Event of Default. The rights, remedies and recourses of the holder
hereof, as provided in this Note and in any of the other Loan Documents,
shall be cumulative and concurrent and may be pursued separately,
successively or together as often as occasion therefore shall arise, at the
sole discretion of the holder hereof. The acceptance by the holder hereof of
any payment under this Note which is less than the payment in full of all
amounts due and payable at the time of such payment shall not (i) constitute
a waiver of or impair, reduce, release or extinguish any right, remedy or
recourse of the holder hereof, or nullify any prior exercise of any such
right, remedy or recourse, or (ii) impair, reduce, release or extinguish the
obligations of any party liable under any of the Loan Documents as originally
provided herein or therein.
This Note and all of the other Loan Documents are intended to be
performed in accordance with, and only to the extent permitted by, all
applicable usury laws. If any provision hereof or of any of the other Loan
Documents or the application thereof to any person or circumstance shall, for
any reason and to any extent, be invalid or unenforceable, neither the
application of such provision to any other person or circumstance nor the
remainder of the instrument in which such provision is contained shall be
affected thereby and shall be enforced to the greatest extent permitted by
law. It is expressly stipulated and agreed to be the intent of the holder
hereof to at all times comply with the usury and other applicable laws now or
hereafter governing the interest payable on the indebtedness evidenced by
this Note. If the applicable law is ever revised, repealed or judicially
interpreted so as to render usurious any amount called for under this Note or
under any of the other Loan Documents, or contracted for, charged, taken,
reserved or received with respect to the indebtedness evidenced by this Note,
or if Bank's exercise of the option to accelerate the maturity of this Note,
or if any prepayment by Borrower results in Borrower's having paid any
interest in excess of that permitted by law, then it is the express intent of
Borrower and Bank that all excess amounts theretofore collected by Bank be
credited on the principal balance of this Note (or, if this Note and all
other indebtedness arising under or pursuant to the other Loan Documents have
been paid in full, refunded to Borrower), and the provisions of this Note and
the other Loan Documents immediately be deemed reformed and the amounts
thereafter collectable hereunder and thereunder reduced, without the
necessity of the execution of any new document, so as to comply with the then
applicable law, but so as to permit the recovery of the fullest amount
otherwise called for hereunder or thereunder. All sums paid, or agreed to be
paid, by Borrower for the use, forbearance, detention, taking, charging,
receiving or reserving of the indebtedness of Borrower to Bank under this
Note or arising under or pursuant to the other Loan Documents shall, to the
maximum extent permitted by applicable law, be amortized, prorated, allocated
and spread throughout the full term of such indebtedness until payment in
full so that the rate or amount of interest on account of such indebtedness
does not exceed the usury ceiling from time to time in effect and applicable
to such indebtedness for so long as such indebtedness is outstanding. To the
extent federal law permits Bank to contract for, charge or receive a greater
amount of interest, Bank will rely on federal law instead of the Texas
Finance Code, as supplemented by Texas Credit Title for the purpose of
determining the Maximum Rate. Additionally, to the maximum extent permitted
by applicable law now or hereafter in effect, Bank may, at its option and
from time to time, implement any other method of computing the Maximum Rate
under the Texas Finance Code, as supplemented by Texas Credit Title, or under
other applicable law by giving notice, if required, to Borrower as provided
by applicable law now or hereafter in effect. Notwithstanding anything to
the contrary contained herein or in any of the other Loan Documents, it is
not the intention of Bank to accelerate the maturity of any interest that has
not accrued at the time of such acceleration or to collect unearned interest
at the time of such acceleration.
In no event shall Chapter 346 of the Texas Finance Code (which regulates
certain revolving loan accounts and revolving tri-party accounts) apply to
this Note. To the extent that Chapter 303 of the Texas Finance Code is
applicable to this Note, the "weekly ceiling" specified in Chapter 303 is the
applicable
3
ceiling; provided that, if any applicable law permits greater interest, the
law permitting the greatest interest shall apply.
If this Note is placed in the hands of an attorney for collection, or is
collected in whole or in part by suit or through probate, bankruptcy or other
legal proceedings of any kind, Borrower agrees to pay, in addition to all
other sums payable hereunder, all costs and expenses of collection, including
but not limited to reasonable attorneys' fees.
Borrower and any and all endorsers and guarantors of this Note severally
waive presentment for payment, notice of nonpayment, protest, demand, notice
of protest, notice of intent to accelerate, notice of acceleration and
dishonor, diligence in enforcement and indulgences of every kind and without
further notice hereby agree to renewals, extensions, exchanges or releases of
collateral, taking of additional collateral, indulgences or partial payments,
either before or after maturity.
This Note is given in renewal and extension of, but not in
extinguishment of, that certain Sixth Renewal and Extension Promissory Note
in the original principal amount of $2,500,000.00, dated as of December 31,
1997, from Borrower to Bank (the "Prior Note"). The execution of this Note
is not intended to and shall not cause or result in a novation with regard to
the indebtedness evidenced by the Prior Note.
4
THIS NOTE HAS BEEN EXECUTED UNDER, AND SHALL BE CONSTRUED AND ENFORCED
IN ACCORDANCE WITH, THE LAWS OF THE STATE OF TEXAS, EXCEPT AS SUCH LAWS ARE
PREEMPTED BY APPLICABLE FEDERAL LAWS.
BORROWER:
CAPROCK COMMUNICATIONS CORP.
By:
-------------------------------
Name:
Title:
EXHIBIT B
BORROWING NOTICE
Reference is made to that certain Loan and Security Agreement dated as
of March 14, 1996 (as from time to time amended, the "Agreement"), by and
among CapRock Communications Corp. ("Debtor") and Bank One, Texas, N.A.
("Secured Party"). Terms which are defined in the Agreement are used herein
with the meanings given them in the Agreement. Pursuant to the terms of the
Agreement Debtor hereby requests Secured Party to make a Revolving Loan to
Debtor in the aggregate principal amount of $ __________ and specifies
____________, 1998, as the date Debtor desires for Secured Party to make such
Revolving Loan and to deliver to Debtor the proceeds thereof.
To induce Secured Party to make such Revolving Loan, Debtor hereby
represents, warrants, acknowledges, and agrees to and with Secured Party that:
(a) The officer of Debtor signing this instrument is the duly
elected, qualified and acting officer of Debtor as indicated below such
officer's signature hereto having all necessary authority to act for
Debtor in making the request herein contained.
(b) After the making of the Revolving Loan requested hereby, the
aggregate principal outstanding on all Revolving Loans will not be in
excess of the Borrowing Base. Each of the conditions precedent to
Revolving Loans set forth in the Agreement remains satisfied.
(c) There does not exist on the date hereof any condition or event
which constitutes a Default which has not been waived in writing as
provided in Section 14 of the Agreement; nor will any such Default exist
upon Debtor's receipt and application of the a Revolving Loan requested
hereby.
(d) The proceeds of the Revolving Loan requested hereby will be
used to make advances to CapRock Fiber Network, Ltd. in the amount of $
under the Intercompany Note. Debtor will use the Revolving Loan hereby
requested in compliance with Section 2(d) of the Agreement.
(e) The Loan Documents have not been modified, amended or
supplemented by any unwritten representations or promises, by any course
of dealing, or by any other means not provided for in Section 18(h) of
the Agreement. The Agreement and the other Loan Documents are hereby
ratified, approved, and confirmed in all respects.
The officer of Debtor signing this instrument hereby certifies that, to
the best of his knowledge after due inquiry, the above representations,
warranties, acknowledgements, and agreements of Debtor are true, correct and
complete.
IN WITNESS WHEREOF, this instrument is executed as of ____________, 1998.
CAPROCK COMMUNICATIONS CORP.
By:
------------------------------------
Name:
Title:
EXHIBIT D
CONSENT AND AGREEMENT
THIS CONSENT AND AGREEMENT (this "Consent") is made of June 18, 1998, by
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇. ("Guarantor") in favor of Bank One, Texas, N.A.
("Secured Party"). Guarantor, who is a Guarantor under that certain Loan
Agreement (as so amended, the "Loan Agreement") dated as of March 14, 1996
between CapRock Communications Corp. ("Debtor") and Secured Party, hereby
consents and agrees to the following.
1. Guarantor hereby consents to the provisions of that certain
Eighth Amendment to Loan Agreement of even date herewith between Secured
Party and Debtor (the "Amendment").
2. Guarantor hereby consents the transactions contemplated in the
Amendment.
3. Guarantor hereby ratifies and confirms all of its obligations
and covenants under that certain guaranty (the "Guaranty") dated as of
March 9, 1996 made by him for the benefit of Secured Party (including
without limitation its obligation to guaranty the payment and
performance of all of the obligations and undertakings of Debtor owing
to Secured Party).
4. Guarantor hereby agrees that his obligations and covenants
under the Guaranty are unimpaired by the provisions of the Amendment and
the transactions contemplated therein and shall continue to remain in
full force and effect after the date hereof.
IN WITNESS WHEREOF, this Consent and Agreement is executed as of the
date first above written.
--------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇.