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WAIVER AND AMENDMENT NO. 6
TO
LOAN AND SECURITY AGREEMENT
THIS WAIVER AND AMENDMENT NO. 6 ("Amendment") is entered into as of
November 2, 1999, by and among Let's Talk Cellular & Wireless, Inc., a
corporation organized under the laws of the State of Florida ("LTC"), Telephone
Warehouse, Inc., a corporation organized under the laws of the State of Delaware
("TWI"), National Cellular, Incorporated, a corporation organized under the laws
of the State of Texas ("NCI"), Cellular USA, a corporation organized under the
laws of the State of Nevada ("USA") and ▇▇▇▇▇▇▇ Enterprises, Inc., a corporation
organized under the laws of the State of Georgia ("SEI") (LTC, TWI, NCI, USA and
SEI, each a "Borrower" and jointly and severally, the "Borrowers"), the
undersigned financial institutions (each, a "Lender" and collectively, the
"Lenders") and The Chase Manhattan Bank, a corporation organized under the laws
of the State of New York ("Chase") as agent for Lenders (Chase in such capacity,
the "Agent").
BACKGROUND
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Borrowers, Agent and Lenders are parties to a Loan and Security
Agreement dated as of April 2, 1998 (as amended, restated, supplemented or
otherwise modified from time to time, the "Loan Agreement"), pursuant to which
Agent and Lenders provide Borrowers with certain financial accommodations.
Borrowers have requested that Agent and Lenders amend certain
provisions of the Loan Agreement and waive certain financial covenant defaults
that have occurred and Agent and Lenders are willing to do so on the terms and
conditions hereafter set forth.
NOW, THEREFORE, in consideration of any loan or advance or grant of
credit heretofore or hereafter made to or for the account of Borrowers by Agent
and Lenders, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto hereby agree as
follows:
1. DEFINITIONS. All capitalized terms not otherwise defined herein
shall have the meanings given to them in the Loan Agreement.
2. AMENDMENTS TO LOAN AGREEMENT. Subject to satisfaction of the
conditions precedent set forth in Section 3 below, the Loan Agreement is hereby
amended as follows:
(a) Section 1.2 of the Loan Agreement is hereby amended as
follows:
(i) the following defined terms are added in their
appropriate alphabetical order:
"AMENDMENT NO. 6" shall mean Amendment No. 6 to this Agreement
dated as of November 2, 1999.
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"AMENDMENT NO. 6 EFFECTIVE DATE" shall mean the date on which
all of the conditions precedent contained in Section 3 of Amendment No.
6 shall have been satisfied.
(ii) the definition of "Commitment Percentage" is
hereby amended in its entirety to provide as follows:
"COMMITMENT PERCENTAGE" of any Lender shall mean 25% for each
Lender, in each case as the same may be adjusted upon any assignment by
a Lender pursuant to Section 16.3(b) hereof.
(iii) the definition of Earnings Before Interest and
Taxes is hereby amended in its entirety to read as follows:
"EARNINGS BEFORE INTEREST AND TAXES" shall mean for
any period the sum of (i) net income (or loss of Borrowers on a
Consolidated Basis for such period, PLUS (ii) all interest expense of
Borrowers on a Consolidated Basis for such period, PLUS (iii) all
charges against the income of Borrowers on a Consolidated Basis for
such period for federal, state and local taxes.
(iv) the definition of "Maximum Revolving Advance
Amount" is hereby amended by deleting clauses (a) and (b) and inserting the
following in their place and stead: "(a) $23,500,000 from the Amendment No. 6
Effective Date through and including December 30, 1999, (b) $22,000,000 from
December 31, 1999 through and including January 30, 2000, (c) $20,000,000 from
January 31, 2000 through and including ▇▇▇▇▇▇▇▇ ▇▇, ▇▇▇▇, (▇) $18,000,000 from
February 28, 2000 through and including March 30, 2000 and (e) $13,500,000 from
and after March 31, 2000."
(v) the definition of "Required Lenders" is hereby
amended by (a) deleting "Cumulative Commitment Percentages" wherever it appears
and inserting "Commitment Percentages" in its place and stead and (b) deleting
"sixty six and two thirds (66 2/3%) percent" and inserting "fifty one (51%)
percent" in its place and stead.
(b) Section 2.1(y) of the Loan Agreement is hereby amended (a)
deleting "MINUS" after subclause (ii) and inserting the following in its place
and stead:
"PLUS
(iii) up to $3,000,000 for the period commencing on
November 2, 1999 and ending December 1, 1999;
MINUS"
and (b) renumbering subclause (iii) as subclause (iv).
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(c) Section 2.10(a)(iv) is hereby amended by (i) deleting
"$3,000,000" and inserting "$5,000,000" in its place and stead and (ii) by
deleting the last sentence thereof and inserting the following in its place and
stead:
"Such repayment shall be applied first, to the
outstanding principal installments of the Term Loan in the inverse
order of maturity and second, to the remaining Advances in such order
as Agent may determine, subject to Borrowers' ability to reborrow
Revolving Advances in accordance with the terms hereof."
(d) Section 7.19(ii) is hereby renumbered as subclause (iii)
and a new subclause (ii) is hereby added as follows:
"(ii) to be less than (a) .65 to 1.00 at October 31,
1999, (b) .67 to 1.00 at January 31, 2000, (c) .69 to 1.00 at April 30, 2000 and
(d) .98 to 1.00 at July 31, 2000, in each case with respect to the immediately
preceding four fiscal quarter period (ending on the last day of such fiscal
quarters) and"
(e) Section 7.21(ii) is hereby renumbered as subclause (iii)
and the reference to October 31, 1999 is hereby changed to October 31, 2000 and
a new subclause (ii) is hereby added to read as follows:
"(ii) to be more than 6.16 to 1.00 at October 31,
1999, (b) 5.50 to 1.00 at January 31, 2000, (C) 5.61 to 1.00 at April 30, 2000
and (d) 3.08 to 1.00 at July 31, 2000, in each case with respect to the
immediately preceding four fiscal quarter period (ending on the last day of such
fiscal quarter), and"
(f) Each Lender's Commitment Percentage shall be amended to
read as set forth below its signature to Amendment No. 6.
3. CONDITIONS OF EFFECTIVENESS. This Amendment shall become effective
upon satisfaction of the following conditions precedent: Agent shall have
received (i) four (4) copies of this Amendment executed by each Borrower and
each Lender, (ii) a non-refundable structuring fee for benefit of all Lenders in
the amount of $175,000, (iii) a non-refundable amendment fee for the benefit of
all Lenders of $75,000, (iv) payment of all fees specified in the Fee Letter
dated as of October 28, 1999, among Borrowers and Agent, in accordance with term
sheets, (v) Guaranty duly executed by HIG in form and substance satisfactory to
Agent evidencing HIG's guarantee of the Obligations in a maximum amount of
$1,000,000, (v) Warrants for each Lender in form and substance satisfactory to
Agent representing Lenders' rights to purchase Capital Stock of LTC in an
aggregate amount equal to 6% of the Capital Stock of LTC containing such terms
and conditions as shall be acceptable to Agent, (vi) original stock certificates
and stock powers representing all shares of Capital Stock of ▇▇▇▇▇▇▇▇.▇▇▇ owned
by LTC, (vii) four (4) copies of a duly executed Subordination Agreement from
Guarantor in form and substance satisfactory to Agent and (viii) such other
certificates, instruments, documents, agreements and opinions of counsel as may
be required by Agent, Lenders or their counsel, each of which shall be in form
and substance satisfactory to Agent, Lenders and their counsel.
4. REPRESENTATIONS AND WARRANTIES. Borrowers hereby represent and
warrant as follows:
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(a) This Amendment and the Loan Agreement, as amended hereby,
constitute legal, valid and binding obligations of Borrowers and are enforceable
against Borrowers in accordance with their respective terms.
(b) Upon the effectiveness of this Amendment, Borrowers hereby
reaffirm all covenants, representations and warranties made in the Loan
Agreement to the extent the same are not amended hereby and agree that all such
covenants, representations and warranties shall be deemed to have been remade as
of the effective date of this Amendment.
(c) No Event of Default or Default has occurred and is
continuing or would exist after giving effect to this Amendment.
(d) Borrowers have no defense, counterclaim or offset with
respect to the Loan Agreement.
5. EFFECT ON THE LOAN AGREEMENT.
(a) Upon the effectiveness of this Amendment, each reference
in the Loan Agreement to "this Agreement," "hereunder," "hereof," "herein" or
words of like import shall mean and be a reference to the Loan Agreement as
amended hereby.
(b) Except as specifically amended herein, the Loan Agreement,
and all other documents, instruments and agreements executed and/or delivered in
connection therewith, shall remain in full force and effect, and are hereby
ratified and confirmed.
(c) The execution, delivery and effectiveness of this
Amendment shall not operate as a waiver of any right, power or remedy of Lender,
nor constitute a waiver of any provision of the Loan Agreement, or any other
documents, instruments or agreements executed and/or delivered under or in
connection therewith.
6. ADDITIONAL AGREEMENTS. In the event that Borrowers shall permanently
reduce the outstanding Revolving Advances and the Maximum Revolving Advance
Amount by at least $5,000,000 on or before December 2, 1999, LTC shall have the
right to reduce the aggregate amount of Warrants issued to the Lenders to 5% of
the outstanding Capital Stock of LTC.
7. GOVERNING LAW. This Amendment shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and assigns and
shall be governed by and construed in accordance with the laws of the State of
New York.
8. HEADINGS. Section headings in this Amendment are included herein for
convenience of reference only and shall not constitute a part of this Amendment
for any other purpose.
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9. COUNTERPARTS. This Amendment may be executed by the parties hereto
in one or more counterparts, each of which shall be deemed an original and all
of which when taken together shall constitute one and the same agreement.
IN WITNESS WHEREOF, this Amendment has been duly executed as of the day
and year first written above.
LET'S TALK CELLULAR & WIRELESS, INC.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: CFO
TELEPHONE WAREHOUSE, INC.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: CFO
NATIONAL CELLULAR INCORPORATED
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: CFO
CELLULAR USA
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: CFO
▇▇▇▇▇▇▇ ENTERPRISES, INC.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: CFO
(Signatures Continued On Following Page)
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THE CHASE MANHATTAN BANK, as Agent and a
Lender
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Vice President
Commitment Percentage: 25%
NATIONSBANK, N.A., Lender
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
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Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
Title: Vice President
Commitment Percentage: 25%
IBJ WHITEHALL BANK & TRUST COMPANY, Lender
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Director
Commitment Percentage: 25%
▇▇▇▇▇▇▇ ▇▇▇▇▇ BUSINESS FINANCIAL
SERVICES, Lender
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President
Commitment Percentage: 25%
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