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UNITED STATES
SECURITIES EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported) December 8, 1999
LET'S TALK CELLULAR & WIRELESS, INC.
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(Exact Name of Registrant as Specified in its Charter)
Florida 0-23351 65-0292891
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(State or other jurisdiction of (Commission (I.R.S. Employer
incorporation or organization) File Number) Identification Number)
800 Brickell Ave., Ste. 400
Miami, FL 33131 33131
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (305) 358-8255
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(Former name, former address and fiscal year, if changed since last report.)
Item 5. Other Events.
The Company's Loan and Security Agreement with The Chase Manhattan
Bank, establishing a revolving credit facility for up to $13.5 million and a
term loan of $21.5 million (the "Credit Facility") was amended effective October
22, 1999 ("Amendment No.: 5"), November 2, 1999 ("Amendment No.: 6") and
December 1, 1999 ("Amendment No.: 7").
Conformed copies of Amendment No. 5, Amendment No. 6 and Amendment No.
7 are set forth as Exhibits 99.1, 99.2 and 99.6 hereto.
Item 7. Financial Statements, Proforma Financial Statements and Exhibits.
(c) Exhibits
Exhibit No. Description
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4.1 Warrant dated November 3, 1999 by Let's Talk Cellular & Wireless,
Inc. in favor of Chase Manhattan Bank.
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4.2* Warrant dated November 3, 1999 by Let's Talk Cellular & Wireless,
Inc. in favor of NationsBank, N.A.
4.3* Warrant dated November 3, 1999 by Let's Talk Cellular & Wireless,
Inc. in favor of IBJ Whitehall Bank & Trust Company
4.4* Warrant dated November 3, 1999 by Let's Talk Cellular & Wireless,
Inc. in favor of Merrill Lynch Business Financial Services
4.5 Registration Rights Agreement dated November 3, 1999 between
Let's Talk Cellular & Wireless, Inc. and The Chase Manhattan
Bank; IBJ Whitehall Bank & Trust Company; NationsBank, N.A.; and
Merrill Lynch Business Financial Services, Inc., as lenders.
99.1 Amendment No. 5 to Loan and Security Agreement dated October 22,
1999 by and among the Company and certain of its subsidiaries,
certain lenders and The Chase Manhattan Bank, as Agent.
99.2 Amendment No. 6 to Loan and Security Agreement dated November 2,
1999 by and among the Company and certain of its subsidiaries,
certain lenders and The Chase Manhattan Bank, as Agent.
99.3 Let's Talk Cellular & Wireless, Inc. Summary of terms and
Conditions New Facility dated October 28, 1999 by Let's Talk
Cellular & Wireless, Inc., Telephone Warehouse, Inc., National
Cellular, Incorporated, Cellular USA, Sosebee Enterprises, Inc.
in favor of The Chase Manhattan Bank, IBJ Whitehall, Merrill
Lynch, NationsBank as Lenders.
99.4 Guaranty dated November 2, 199 by HIG Capital LLC in favor of the
Chase Manhattan Bank, as Agent.
99.5 Subordination Agreement dated November ___, 1999 by HIG Capital
LLC in favor of The Chase Manhattan Bank, as agent.
99.6 Amendment No. 7 to Loan and Security Agreement dated December 1,
1999 by and among the Company and certain of its subsidiaries,
certain lenders and The Chase Manhattan Bank, as Agent.
* Omitted. This document is substantially identical to the warrant included as
Exhibit 4.1 except for the Warrant Holder.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
LET'S TALK CELLULAR & WIRELESS, INC.
(Registrant)
December 8, 1999 By: /s/ David Eisenberg
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DAVID H. EISENBERG
Chief Executive Officer
December 8, 1999 By: /s/ Daniel Cammarata
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DANIEL CAMMARATA
Chief Financial Officer
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EXHIBIT INDEX
Exhibit No. Description
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4.1 Warrant dated November 3, 1999 by Let's Talk Cellular & Wireless,
Inc. in favor of Chase Manhattan Bank.
4.2* Warrant dated November 3, 1999 by Let's Talk Cellular & Wireless,
Inc. in favor of NationsBank, N.A.
4.3* Warrant dated November 3, 1999 by Let's Talk Cellular & Wireless,
Inc. in favor of IBJ Whitehall Bank & Trust Company
4.4* Warrant dated November 3, 1999 by Let's Talk Cellular & Wireless,
Inc. in favor of Merrill Lynch Business Financial Services
4.5 Registration Rights Agreement dated November 3, 1999 between
Let's Talk Cellular & Wireless, Inc. and The Chase Manhattan
Bank; IBJ Whitehall Bank & Trust Company; NationsBank, N.A.; and
Merrill Lynch Business Financial Services, Inc., as lenders.
99.1 Amendment No. 5 to Loan and Security Agreement dated October 22,
1999 by and among the Company and certain of its subsidiaries,
certain lenders and The Chase Manhattan Bank, as Agent.
99.2 Amendment No. 6 to Loan and Security Agreement dated November 2,
1999 by and among the Company and certain of its subsidiaries,
certain lenders and The Chase Manhattan Bank, as Agent.
99.3 Let's Talk Cellular & Wireless, Inc. Summary of terms and
Conditions New Facility dated October 28, 1999 by Let's Talk
Cellular & Wireless, Inc., Telephone Warehouse, Inc., National
Cellular, Incorporated, Cellular USA, Sosebee Enterprises, Inc.
in favor of The Chase Manhattan Bank, IBJ Whitehall, Merrill
Lynch, NationsBank as Lenders.
99.4 Guaranty dated November 2, 199 by HIG Capital LLC in favor of the
Chase Manhattan Bank, as Agent.
99.5 Subordination Agreement dated November ___, 1999 by HIG Capital
LLC in favor of The Chase Manhattan Bank, as agent.
99.6 Amendment No. 7 to Loan and Security Agreement dated December 1,
1999 by and among the Company and certain of its subsidiaries,
certain lenders and The Chase Manhattan Bank, as Agent.
* Omitted. This document is substantially identical to the warrant included as
Exhibit 4.1 except for the Warrant Holder.
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THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED, OR ANY STATE SECURITIES LAW AND MAY NOT BE TRANSFERRED, SOLD OR
OFFERED FOR SALE UNLESS REGISTERED PURSUANT TO SUCH ACT AND ANY APPLICABLE STATE
SECURITIES LAW OR UNLESS AN EXEMPTION FROM SUCH REGISTRATION IS AVAILABLE.
Dated: November 3, 1999
WARRANT
To Purchase 1.5% of the Shares of Common Stock of
LET'S TALK CELLULAR & WIRELESS, INC.
Expiring November 3, 2009
THIS IS TO CERTIFY THAT, for value received, THE CHASE
MANHATTAN BANK or registered assigns (the "HOLDER") is entitled to purchase from
LET'S TALK CELLULAR & WIRELESS, INC., a Florida corporation (the "COMPANY"), at
any time or from time to time after 9:00 a.m., New York City time, on November
3, 1999 and prior to 5:00 p.m., New York City time, on November 3,2009 (the
"EXPIRATION DATE"), at the place where the Warrant Agency (as hereinafter
defined) is located, at the Exercise Price, 131,246 shares of Common Stock, par
value $.001 per share (the "COMMON STOCK"), of the Company, all subject to
adjustment and upon the terms and conditions as hereinafter provided, and is
entitled also to exercise the other appurtenant rights, powers and privileges
hereinafter described.
This Warrant is one of one or more warrants (the "WARRANTS")
of the same form and having the same terms as this Warrant, entitling the
holders initially to purchase up to an aggregate of 524,984 shares of Common
Stock.
Certain terms used in this Warrant are defined in Article V.
ARTICLE I
EXERCISE OF WARRANTS
1.1. METHOD OF EXERCISE. To exercise this Warrant in whole or
in part, the Holder shall deliver to the Company, at the Warrant Agency, (a)
this Warrant, (b) a written notice, in
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substantially the form of the Subscription Notice attached hereto, of such
Holder's election to exercise this Warrant, which notice shall specify the
number of shares of Common Stock to be purchased, the denominations of the share
certificate or certificates desired and the name or names in which such
certificates are to be registered, and (c) payment of the Exercise Price with
respect to such shares. Such payment may be made, at the option of the Holder,
by cash, money order, certified or bank cashier's check or wire transfer;
PROVIDED, HOWEVER, that the Holder shall have the right, at its election, in
lieu of delivering the Exercise Price in cash, to instruct the Company in the
form of Subscription Notice to retain, in payment of the Exercise Price, a
number of shares of Common Stock (the "PAYMENT SHARES") equal to the quotient of
the aggregate Exercise Price of the shares as to which this Warrant is then
being exercised divided by "AVERAGE CLOSING PRICE" as of the date of exercise
and to deduct the number of Payment Shares from the shares to be delivered to
the Holder. "Average Closing Price" means, as of any date, (x) if shares of
Common Stock are listed on a national securities exchange, the average of the
closing sale prices therefore on the largest securities exchange on which such
shares are traded on the last ten (10) trading days before such date, (y) if
such shares are listed on the NASDAQ National Market System but not on any
national securities exchange, the average of the closing sales prices therefor
on the NASDAQ National Market System on the last ten (10) trading days before
such date or (z) if such shares are not listed on either a national securities
exchange or the NASDAQ National Market System, the average of the sales prices
therefor on the last twenty (20) trading days before such date.
The Company shall, as promptly as practicable and in any event
within seven days thereafter, execute and deliver or cause to be executed and
delivered, in accordance with such notice, a certificate or certificates
representing the aggregate number of shares of Common Stock specified in said
notice. The share certificate or certificates so delivered shall be in such
denominations as may be specified in such notice or, if such notice shall not
specify denominations, in denominations of 100 shares each, and shall be issued
in the name of the Holder or such other name or names as shall be designated in
such notice. Such certificate or certificates shall be deemed to have been
issued, and such Holder or any other Person so designated to be named therein
shall be deemed for all purposes to have become a holder of records of such
shares, as of the date the aforementioned notice is received by the Company. If
this Warrant shall have been exercised only in part, the Company shall, at the
time of delivery of the certificate or certificates, deliver to the Holder a new
Warrant evidencing the rights to purchase the remaining shares of Common Stock
called for by this Warrant, which new Warrant shall in all other respects be
identical with this Warrant, or, at the request of the Holder, appropriate
notation may be made on this Warrant which shall then be returned to the Holder.
The Company shall pay all expenses, taxes and other charges payable in
connection with the preparation, issuance and delivery of share certificates and
new Warrants, except that, if share certificates or new Warrants shall be
registered in a name or names other than the name of the Holder, funds
sufficient to pay all transfer taxes payable as a result of such transfer shall
be paid by the Holder at the time of delivering the aforementioned notice of
exercise or promptly upon receipt of a written request of the Company for
payment.
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1.2. SHARES TO BE FULLY PAID AND NONASSESSABLE. All shares of
Common Stock issued upon the exercise of this Warrant shall be validly issued,
fully paid and nonassessable and, if the Common Stock of any class is then
listed on any national securities exchange (as such term is used in the Exchange
Act) or quoted on NASDAQ, shall be duly listed or quoted thereon, as the case
may be.
1.3. NO FRACTIONAL SHARES TO BE ISSUED. The Company shall not
be required to issue fractions of shares of Common Stock upon exercise of this
Warrant. If any fraction of a share would, but for this Section, be issuable
upon any exercise of this Warrant, in lieu of such fractional share the Company
shall pay to the Holder, in cash, an amount equal to the same fraction of the
greater of the Earnings Value or Fair Market Value of the Company per share of
outstanding Common Stock on the Business Day immediately prior to the date of
such exercise.
1.4. SHARE LEGEND. Each certificate for shares of Common Stock
issued upon exercise of this Warrant, unless at the time of exercise such shares
are registered under the Securities Act, shall bear the following legend:
"This security has not been registered under the Securities
Act of 1933, as amended, or any state securities law and may not be
transferred, sold or offered for sale unless registered pursuant to
such Act and any applicable state securities law or unless an exemption
from such registration is available."
Any certificate issued at any time in exchange or substitution
for any certificate bearing such legend (except a new certificate issued upon
completion of a public distribution pursuant to a registration statement under
the Securities Act) shall also bear such legend unless, in the opinion of
counsel selected by the holder of such certificate (who may be an employee of
such holder) and reasonably acceptable to the Company, the securities
represented thereby need no longer be subject to restrictions on resale under
the Securities Act.
ARTICLE II
WARRANT AGENCY; TRANSFER, EXCHANGE AND
REPLACEMENT OF WARRANTS
2.1. WARRANT AGENCY. If any Warrantholder shall request
appointment of an independent warrant agency with respect to the Warrants, the
Company shall promptly appoint and thereafter maintain, at its own expense, an
agency in New York State (the "WARRANT AGENCY"), for purposes specified herein,
and shall give prompt notice of such appointment (and appointment of any
successor Warrant Agency) to holders of all Warrants. Until an independent
Warrant Agency is so appointed, the Company shall perform the obligations of the
Warrant Agency provided herein at its address at 800 Brickell Avenue, Suite 400,
Miami, Florida, 33131or such other address as the Company shall specify by
notice to all Warrantholders.
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2.2. OWNERSHIP OF WARRANT. The Company may deem and treat the
Person in whose name this Warrant is registered as the holder and owner hereof
(notwithstanding any notations of ownership or writing hereon made by any Person
other than the Company) for all purposes and shall not be affected by any notice
to the contrary, until presentation of this Warrant for registration of transfer
as provided in this Article II.
2.3. TRANSFER OF WARRANT. The Company agrees to maintain at
the Warrant Agency books for the registration of transfers of the Warrants, and
transfer of this Warrant and all rights hereunder shall be registered, in whole
or in part, on such books, upon surrender of this Warrant at the Warrant Agency,
together with a written assignment of this Warrant duly executed by the Holder
or his duly authorized agent or attorney, with (unless the Holder is the
original Warrantholder or another institutional investor) signatures guaranteed
by a bank or trust company or a broker or dealer registered with the NASD, and
funds sufficient to pay any transfer taxes payable upon such transfer. Upon
surrender the Company (subject to being satisfied that such transfer is exempt
from registration under the Securities Act) shall execute and deliver a new
Warrant or Warrants in the name of the assignee or assignees and in the
denominations specified in the instrument of assignment, and this Warrant shall
promptly be canceled. Notwithstanding the foregoing, a Warrant may be exercised
by a new holder without having a new Warrant issued.
2.4. DIVISION OR COMBINATION OF WARRANTS. This Warrant may be
divided or combined with other Warrants upon surrender hereof and of any Warrant
or Warrants with which this Warrant is to be combined at the Warrant Agency,
together with a written notice specifying the names and denominations in which
the new Warrant or Warrants are to be issued, signed by the holders hereof and
thereof or their respective duly authorized agents or attorneys. Subject to
compliance with Section 2.3 as to any transfer which may be involved in the
division or combination, the Company shall execute and deliver a new Warrant or
Warrants in exchange for the Warrant or Warrants to be divided or combined in
accordance with such notice.
2.5. LOSS, THEFT, DESTRUCTION OF WARRANT CERTIFICATES. Upon
receipt of evidence satisfactory to the Company of the loss, theft, destruction
or mutilation of any Warrant and, in the case of any such loss, theft or
destruction, upon receipt of indemnity or security satisfactory to the Company
(the original Warrantholder's or any other institutional Warrantholder's
indemnity being satisfactory indemnity in the event of loss, theft or
destruction of any Warrant owned by such institutional holder), or, in the case
of any such mutilation, upon surrender and cancellation of such Warrant, the
Company will make and deliver, in lieu of such lost, stolen, destroyed or
mutilated Warrant, a new Warrant of like tenor and representing the right to
purchase the same aggregate number of shares of Common Stock.
2.6. EXPENSES OF DELIVERY OF WARRANTS. The Company shall pay
all expenses, taxes (other than transfer taxes) and other charges payable in
connection with the preparation, issuance and delivery of Warrants and Warrant
Shares hereunder.
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ARTICLE III
CERTAIN RIGHTS
3.1. REGISTRATION RIGHTS. This Warrant is entitled to the
benefits of the Registration Rights Agreement dated as of November 3, 1999,
between the Company, the Holder and certain other Warrantholders (the
"REGISTRATION RIGHTS AGREEMENT"). The Company shall keep a copy of the
Registration Rights Agreement, and any amendments thereto, at the Warrant Agency
and shall furnish copies thereof to the Holder upon request.
3.2. CONTEST AND APPRAISAL RIGHTS. Upon each determination of
Earnings Value, Fair Market Value and Market Price hereunder, the Company shall
promptly give notice thereof to all Warrantholders, setting forth in reasonable
detail the calculation of such Earnings Value or Market Price or the method and
basis of determination of such Fair Market Value, as the case may be. If the
Holder (or any permitted transferee of all of the Holder's outstanding Warrants)
shall disagree with such determination and shall, by notice to the Company given
within 15 Business Days after the Company's notice of such determination, elect
to dispute such determination, such dispute shall be resolved in accordance with
this Section 3.2. In the event that a determination of Earnings Value is
disputed, such dispute shall be submitted, at the Company's expense, to the
Company's independent certified public accountants. If the Holder (or any
permitted transferee of all of the Holder's outstanding Warrants) shall disagree
with the determination made by the Company's independent certified public
accountants and shall, by notice to the Company given within 15 Business Days
after notice of such determination, elect to dispute such determination, such
dispute shall be submitted to a different firm of independent certified public
accountants of recognized standing selected by the Holder (or any permitted
transferee of all of the Holder's outstanding Warrants) and reasonably
acceptable to the Company, whose determination shall be binding on the Company
and the Holder (or such transferee). The fees and expenses of such accountants
shall be paid by the Company. In the event that a determination of Market Price
is disputed, such dispute shall be submitted, at the Company's expense, to a New
York Stock Exchange member firm selected by the Company and reasonably
acceptable to the Holder (or any permitted transferee of all of the Holder's
outstanding Warrants), whose determination of Market Price shall be binding on
the Company and the Holder (or any permitted transferee of all of the Holder's
outstanding Warrants). In the event that a determination of Fair Market Value is
disputed, such dispute shall be resolved through the Appraisal Procedure.
3.3 CERTAIN COVENANTS AND REPRESENTATIONS.
(a) The Company covenants and agrees that it shall not permit
any of its Subsidiaries to issue, sell, distribute or otherwise grant in any
manner (whether directly or by assumption in a merger or otherwise) any rights
to subscribe for or to purchase, or any warrants
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or options for the purchase of, any of such Subsidiary's capital stock or any
securities convertible or exchangeable for any of such Subsidiary's capital
stock, whether or not such rights, warrants or options, or the rights to convert
or exchange such convertible or exchangeable securities, are immediately
exercisable.
(b) In case at any time the Company shall declare any dividend
on its Common Stock, whether payable in cash, stock or other property, then the
Company shall give written notice to the Holder of the date on which the books
of the Company shall close or a record shall be taken for such dividend. Such
notice shall also specify the date as of which the holders of Common Stock of
record shall participate in such dividend. Such written notice shall be given at
least 30 days prior to the action in question, and not more than 90 days and not
less than 30 days prior to the relevant record date or the date fixed for
determining stockholders entitled to participate therein, as the case may be.
(c) As of the date hereof, (i) there are 8,749,762 shares of
Common Stock issued and outstanding and (ii) this Warrant is exercisable to
purchase 1.5% of the Company's Common Stock.
(d) If at any time the Company is no longer required to file
Forms 10-K or 10-Q (or any successor forms) under the Exchange Act, the Company
shall deliver to each Holder of Warrants financial statements that comply with
the standards set forth in Section 6.7 of the Credit Agreement, within 45 days
after the end of each of the Company's first three fiscal quarters and within 90
days after the end of the Company's fiscal year. The annual financial statements
shall be reported upon without qualification by an independent certified public
accounting firm selected by the Company and reasonably satisfactory to the
Holders.
3.4 TAG ALONG RIGHTS.
(a) Except as provided in Section 3.4 (c) below, if at any
time HIG Investment Group, L.P., HIG Fund V, Inc. or Texas Cellular Partners
L.P.(each, a "SHAREHOLDER", and collectively, the "SHAREHOLDERS") desires to
sell, transfer or otherwise dispose of any of its shares of Common Stock to any
person or entity (a "DISPOSITION"), such selling Shareholder shall, at least
thirty (30) days prior to the Disposition, give notice to the Holder describing
the terms of the Disposition in reasonable detail (including but not limited to
the name of the proposed transferee, the number of shares of Common Stock
proposed to be transferred, the purchase price per share proposed to be paid
therefor and the payment terms and type of transfer to be effected) and stating
that the Holder has the option to sell to the proposed transferee in the
Disposition up to the number of shares of Common Stock equal to the product of
(A) the total number of shares of Common Stock then owned by the Holder,
multiplied by (B) a fraction, the numerator of which shall be the total number
of shares of Common Stock proposed to be transferred and the denominator of
which shall be the sum of the total number of shares of Common Stock owned by
such selling Shareholder plus the total number of shares then owned by the
Holder. The number of shares of Common Stock which the Holder shall be deemed to
own under clauses (A) and (B)
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of the preceding sentence shall include the number of shares of Common Stock
that the Holder would have owned or been entitled to receive if it had exercised
all of its rights to purchase shares of Common Stock under this Warrant
immediately prior to such Disposition. Such option may be exercised by the
Holder by notice to the selling Shareholder given within 20 Business Days after
receipt by the Holder of notice of the proposed Disposition. The selling
Shareholder shall cause the proposed transferee to pay to the Holder,
immediately upon consummation of the Disposition, the total sales price payable
to the Holder in connection with the Holder's transfer of shares of Common
Stock, and promptly following consummation of the Disposition the selling
Shareholder shall furnish such other evidence of the consummation of the
Disposition and the terms thereof as may be reasonably requested by the Holder.
(b) The Company hereby represents and warrants that the
Shareholders are the only persons or group (as that term is defined in Section
13(d) of the Exchange Act) known by the Company to be the beneficial owners of
more than 10% of the Common Stock as of the date hereof.
(c) The provisions of Section 3.4 (a) shall not apply to sales
by the Selling Shareholders under and in accordance with Rule 144 under the
Securities Act if the aggregate number of shares sold in any calendar quarter is
less than 1% of the outstanding shares of Common Stock on first day of such
quarter.
ARTICLE IV
ANTIDILUTION PROVISIONS
4.1. ADJUSTMENTS GENERALLY. The Exercise Price and the number
of shares of Common Stock (or other securities or property) issuable upon
exercise of this Warrant shall be subject to adjustment from time to time upon
the occurrence of certain events, as provided in this Article IV.
4.2. COMMON STOCK REORGANIZATION. If the Company shall
subdivide its outstanding shares of Common Stock into a greater number of shares
or consolidate its outstanding shares of Common Stock into a smaller number of
shares (any such event being called a "COMMON STOCK REORGANIZATION"), then (a)
the Exercise Price shall be adjusted, effective immediately after the record
date at which the holders of shares of Common Stock are determined for purposes
of such Common Stock Reorganization, to a price determined by multiplying the
Exercise Price in effect immediately prior to such record date by a fraction,
the numerator of which shall be the number of shares of Common Stock outstanding
on such record date before giving effect to such Common Stock Reorganization and
the denominator of which shall be the number of shares of Common Stock
outstanding after giving effect to such Common Stock Reorganization, and (b) the
number of shares of Common Stock subject to purchase upon exercise of this
Warrant shall be adjusted, effective at such time, to a number determined by
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multiplying the number of shares of Common Stock subject to purchase immediately
before such Common Stock Reorganization by a fraction, the numerator of which
shall be the number of shares outstanding after giving effect to such Common
Stock Reorganization and the denominator of which shall be the number of shares
of Common Stock outstanding immediately before such Common Stock Reorganization.
4.3. COMMON STOCK DISTRIBUTION. (a) If the Company shall issue
or otherwise sell or distribute any shares of Common Stock (any such event,
including any event described in paragraphs (b) and (c) below, being herein
called a "COMMON STOCK DISTRIBUTION"), other than the issuance of up to 764,219
shares of Common Stock upon the exercise of employee stock options that have
been granted as of the date hereof under the Company's 1997 Executive Incentive
Compensation Plan or other than pursuant to a Common Stock Reorganization, for a
consideration per share less than the Exercise Price then in effect or less than
the Market Price (except, if the Company has been Delisted, the term "Market
Price" shall be replaced by " greater of the Earnings Value and the Fair Market
Value") of the Company per share of outstanding Common Stock on the date of such
issue, sale or distribution (before giving effect to such issue, sale or
distribution), then, effective upon such issue, sale or distribution, the
Exercise Price shall be reduced to the lowest of the prices (calculated to the
nearest cent) determined as provided in clauses (i), (ii) and (iii) below:
(i) the consideration per share received by the
Company upon the issue, sale or distribution of Common Stock in such Common
Stock Distribution;
(ii) by dividing (A) an amount equal to the sum of
(1) the number of shares of Common Stock outstanding immediately prior to such
Common Stock Distribution multiplied by the then existing Exercise Price, plus
(2) the consideration, if any, received by the Company upon such Common Stock
Distribution by (B) the total number of shares of Common Stock outstanding
immediately after such Common Stock Distribution; and
(iii) by multiplying the Exercise Price in effect
immediately prior to such Common Stock Distribution by a fraction, the numerator
of which shall be the sum of (A) the number of shares of Common Stock
outstanding immediately prior to such Common Stock Distribution multiplied by
the Market Price (except, if the Company has been Delisted, the term "Market
Price" shall be replaced by " greater of the Earnings Value and the Fair Market
Value") per share on the date of such Common Stock Distribution, plus (B) the
consideration received by the Company upon such Common Stock Distribution, and
the denominator of which shall be the product of (1) the total number of shares
of Common Stock outstanding immediately after such Common Stock Distribution,
multiplied by (2) the Market Price (except, if the Company has been Delisted,
the term "Market Price" shall be replaced by " greater of the Earnings Value and
the Fair Market Value") per share on the date of such Common Stock Distribution.
No adjustment of the Exercise Price shall be made in an amount
less than 1% of such Exercise Price, but any such lesser adjustment shall be
carried forward and shall be made at
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the time and together with the next subsequent adjustment which together with
any adjustments so carried forward shall amount to 1% of such Exercise Price or
more.
If any Common Stock Distribution shall require an adjustment
to the Exercise Price pursuant to the foregoing provisions of this paragraph
(a), then, effective at the time such adjustment is made, the number of shares
of Common Stock subject to purchase upon exercise of this Warrant shall be
increased to a number determined by multiplying the number of shares of Common
Stock subject to purchase immediately before such Common Stock Distribution by a
fraction, the numerator of which shall be the number of shares outstanding
immediately after giving effect to such Common Stock Distribution and the
denominator shall be the sum of the number of shares outstanding immediately
before giving effect to such Common Stock Distribution plus the number of shares
of Common Stock which the aggregate consideration received by the Company with
respect to such Common Stock Distribution would purchase at the Market Price
(except, if the Company has been Delisted, the term "Market Price" shall be
replaced by " greater of the Earnings Value and the Fair Market Value") per
share of outstanding Common Stock on the date of such Common Stock Distribution
(before giving effect to such Common Stock Distribution).
The provisions of this paragraph (a), including by operation
of paragraph (b) or (c) below, shall not operate to increase the Exercise Price
or reduce the number of shares of Common Stock subject to purchase upon exercise
of this Warrant.
(b) If the Company shall issue, sell, distribute or otherwise
grant in any manner (whether directly or by assumption in a merger or otherwise)
any rights to subscribe for or to purchase, or any warrants or options for the
purchase of, Common Stock or any stock or securities convertible into or
exchangeable for Common Stock (such rights, warrants or options being herein
called "OPTIONS" and such convertible or exchangeable stock or securities being
herein called "CONVERTIBLE SECURITIES"), whether or not such Options or the
rights to convert or exchange any such Convertible Securities are immediately
exercisable, and the price per share for which Common Stock is issuable upon the
exercise of such Options or upon conversion or exchange of such Convertible
Securities (determined by dividing (i) the aggregate amount, if any, received or
receivable by the Company as consideration for the granting of such Options,
plus the minimum aggregate amount of additional consideration payable to the
Company upon the exercise of all such Options, plus, in the case of Options to
acquire Convertible Securities, the minimum aggregate amount of additional
consideration, if any, payable upon the issue or sale of such Convertible
Securities and upon the conversion or exchange thereof, by (ii) the total
maximum number of shares of Common Stock issuable upon the exercise of such
Options or upon the conversion or exchange of all such Convertible Securities
issuable upon the exercise of such Options) shall be less than the Exercise
Price then in effect or less than the Market Price (except, if the Company has
been Delisted, the term "Market Price" shall be replaced by " greater of the
Earnings Value and the Fair Market Value") per share of outstanding Common Stock
on the date of granting such Options (before giving effect to such grant), then,
for purposes of paragraph (a) above, the total maximum number of shares of
Common Stock issuable upon the
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exercise of such Options or upon conversion or exchange of the total maximum
amount of such Convertible Securities issuable upon the exercise of such Options
shall be deemed to have been issued as of the date of granting of such Options
and thereafter shall be deemed to be outstanding and the Company shall be deemed
to have received as consideration such price per share, determined as provided
above, therefor. Except as otherwise provided in paragraph (d) below, no
additional adjustment of the Exercise Price shall be made upon the actual
exercise of such Options or upon conversion or exchange of such Convertible
Securities.
(c) If the Company shall issue, sell or otherwise distribute
(whether directly or by assumption in a merger or otherwise) any Convertible
Securities, whether or not the rights to exchange or convert thereunder are
immediately exercisable, and the price per share for which Common Stock is
issuable upon such conversion or exchange (determined by dividing (i) the
aggregate amount received or receivable by the Company as consideration for the
issue, sale or distribution of such Convertible Securities, plus the minimum
aggregate amount of additional consideration, if any, payable to the Company
upon the conversion or exchange thereof, by (ii) the total maximum number of
shares of Common Stock issuable upon the conversion or exchange of all such
Convertible Securities) shall be less than the Exercise Price then in effect or
less than the Market Price (except, if the Company has been Delisted, the term
"Market Price" shall be replaced by " greater of the Earnings Value and the Fair
Market Value") per share of outstanding Common Stock on the date of such issue,
sale or distribution (before giving effect to such issue, sale or distribution),
then, for purposes of paragraph (a) above, the total maximum number of shares of
Common Stock issuable upon conversion or exchange of all such Convertible
Securities shall be deemed to have been issued as of the date of the issue, sale
or distribution of such Convertible Securities and thereafter shall be deemed to
be outstanding and the Company shall be deemed to have received as consideration
such price per share, determined as provided above, therefor. Except as
otherwise provided in paragraph (d) below, no additional adjustment of the
Exercise Price shall be made upon the actual conversion or exchange of such
Convertible Securities.
(d) If the purchase price provided for in any Option referred
to in paragraph (b) above, the additional consideration, if any, payable upon
the conversion or exchange of any Convertible Securities referred to in
paragraph (b) or (c) above, or the rate at which any Convertible Securities
referred to in paragraph (b) or (c) above are convertible into or exchangeable
for Common Stock shall change at any time (other than under or by reason of
provisions designed to protect against dilution upon an event which results in a
related adjustment pursuant to this Article IV), the Exercise Price then in
effect shall forthwith be readjusted (effective only with respect to any
exercise of this Warrant after such readjustment) to the Exercise Price which
would then be in effect had the adjustment made upon the issue, sale,
distribution or grant of such Options or Convertible Securities been made based
upon such changed purchase price, additional consideration or conversion rate,
as the case may be; PROVIDED, HOWEVER, that such readjustment shall give effect
to such change only with respect to such Options and Convertible Securities as
then remain outstanding.
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(e) If the Company shall pay a dividend or make any other
distribution upon any capital stock of the Company payable in Common Stock,
Options or Convertible Securities, then, for purposes of paragraph (a) above,
such Common Stock, Options or Convertible Securities, as the case may be, shall
be deemed to have been issued or sold without consideration.
(f) If any shares of Common Stock, Options or Convertible
Securities shall be issued, sold or distributed for cash, the consideration
received therefor shall be deemed to be the amount received by the Company
therefor, after deduction therefrom of any expenses incurred and any
underwriting commissions or concessions paid or allowed by the Company in
connection therewith. If any shares of Common Stock, Options or Convertible
Securities shall be issued, sold or distributed for a consideration other than
cash, the amount of the consideration other than cash received by the Company
shall be deemed to be the Fair Market Value of such consideration, after
deduction of any expenses incurred and any underwriting commissions or
concessions paid or allowed by the Company in connection therewith. If any
shares of Common Stock, Options or Convertible Securities shall be issued in
connection with any merger in which the Company is the surviving corporation,
the amount of consideration therefor shall be deemed to be the Fair Market Value
of such portion of the assets and business of the nonsurviving corporation as
shall be attributable to such Common Stock, Option or Convertible Securities, as
the case may be. If any Options shall be issued in connection with the issue and
sale of other securities of the Company, together comprising one integral
transaction in which no specific consideration is allocated to such Options by
the parties thereto, such Options shall be deemed to have been issued without
consideration.
(g) If the Company shall take a record of the holders of its
Common Stock for the purpose of entitling them to receive a dividend or other
distribution payable in Common Stock, Options or Convertible Securities or to
subscribe for or purchase Common Stock, Options or Convertible Securities, then
such record date shall be deemed to be the date of the issue, sale, distribution
or grant of the shares of Common Stock deemed to have been issued or sold upon
the declaration of such dividend or the making of such other distribution or the
date of the granting of such right of subscription or purchase, as the case may
be.
4.4. SPECIAL DIVIDENDS. If the Company shall issue or
distribute to any holders of shares of Common Stock, evidences of indebtedness,
any other securities of the Company or any cash, property or other assets, and
if such issuance or distribution does not constitute (x) a cash dividend or
distribution out of surplus or net profits legally available therefor, (y) a
Common Stock Reorganization or (z) a Common Stock Distribution (any such
nonexcluded event being herein called a "SPECIAL DIVIDEND"), then at the option
of the Holder:
(a)(i) the Exercise Price shall be decreased, effective
immediately after the record date at which the holders of shares of Common Stock
are determined for purposes of such Special Dividend, to a price determined by
multiplying the Exercise Price then in effect by a fraction, the numerator of
which shall be the Market Price (except, if the Company has been
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Delisted, the term "Market Price" shall be replaced by " greater of the Earnings
Value and the Fair Market Value") per share of outstanding Common Stock on such
record date less the then Fair Market Value of the evidences of indebtedness,
securities or property or other assets issued or distributed in such Special
Dividend with respect to one share of Common Stock, and the denominator of which
shall be the Market Price (except, if the Company has been Delisted, the term
"Market Price" shall be replaced by " greater of the Earnings Value and the Fair
Market Value") per share on such record date, and (ii) the number of shares of
Common Stock subject to purchase upon exercise of this Warrant shall be
increased to a number determined by multiplying the number of shares of Common
Stock subject to purchase immediately before such Special Dividend by a
fraction, the numerator of which shall be the Exercise Price in effect
immediately before such Special Dividend and the denominator of which shall be
the Exercise Price in effect immediately after such Special Dividend; or
(b) the Company shall pay over to the Holder, on the date such
Special Dividend is paid, the cash, stock or other securities and other property
which the Holder would have received if the Holder had exercised this Warrant in
full to purchase Common Stock and had been the record holder of such Common
Stock on the record date at which the holders of shares of Common Stock are
determined for purposes of such Special Dividend.
4.5. CAPITAL REORGANIZATIONS. If there shall be any
consolidation or merger to which the Company is a party, other than a
consolidation or a merger in which the Company is a continuing corporation and
which does not result in any reclassification of, or change (other than a Common
Stock Reorganization or a change in par value) in, outstanding shares of Common
Stock, or any sale or conveyance of the property of the Company as an entirety
or substantially as an entirety or other transaction in which all of the
existing stockholders of the Company sell or exchange their shares (any such
event being called a "CAPITAL REORGANIZATION"), then, effective upon the
effective date of such Capital Reorganization, the Holder shall have the right
to purchase, upon exercise of this Warrant, the kind and amount of shares of
stock and other securities and property (including cash) which the Holder would
have owned or have been entitled to receive after such Capital Reorganization if
this Warrant had been exercised immediately prior to such Capital
Reorganization, with the intention being that the Holders shall participate in
such Capital Reorganization on the same terms and conditions as the then
existing stockholders if the Company). As a condition to effecting any Capital
Reorganization, the Company or the successor or surviving corporation, as the
case may be, shall execute and deliver to each Warrantholder and to the Warrant
Agency an agreement as to the Warrantholders' rights in accordance with this
Section 4.5, providing for subsequent adjustments as nearly equivalent as may be
practicable to the adjustments provided for in this Article IV. The provisions
of this Section 4.5 shall similarly apply to successive Capital Reorganizations.
4.6. CERTAIN OTHER EVENTS. If any event occurs as to which the
foregoing provisions of this Article IV are not strictly applicable or, if
strictly applicable, would not, in the good faith judgment of the Board of
Directors of the Company, fairly protect the purchase rights of the Warrants in
accordance with the essential intent and principles of such provisions, then
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such Board shall make such adjustments in the application of such provisions, in
accordance with such essential intent and principles, as shall be reasonably
necessary, in the good faith opinion of such Board, to protect such purchase
rights as aforesaid, but in no event shall any such adjustment have the effect
of increasing the Exercise Price or decreasing the number of shares of Common
Stock subject to purchase upon exercise of this Warrant.
4.7. ADJUSTMENT RULES. (a) Any adjustments pursuant to this
Article IV shall be made successively whenever an event referred to herein shall
occur.
(b) No adjustment shall be made pursuant to this Article IV in
respect of the issuance from time to time of shares of Common Stock upon the
exercise of Warrants.
(c) If the Company shall set a record date to determine the
holders of shares of Common Stock for purposes of a Common Stock Reorganization,
Common Stock Distribution, Special Dividend or Capital Reorganization and shall
legally abandon such action prior to effecting such action, then no adjustment
shall be made pursuant to this Article IV in respect of such action.
4.8. PROCEEDING PRIOR TO ANY ACTION REQUIRING ADJUSTMENT. As a
condition precedent to the taking of any action which would require an
adjustment pursuant to this Article IV, the Company shall take any action which
may be necessary, including obtaining regulatory approvals or exemptions, in
order that the Company may thereafter validly and legally issue as fully paid
and nonassessable all shares of Common Stock which the holders of Warrants are
entitled to receive upon exercise thereof.
4.9. NOTICE OF ADJUSTMENT. Not less than 30 nor more than 90
days prior to the record date or effective date, as the case may be, of any
action which requires or might require an adjustment or readjustment pursuant to
this Article IV, the Company shall give notice to each Warrantholder of such
event, describing such event in reasonable detail and specifying the record date
or effective date, as the case may be, and, if determinable, the required
adjustment and the computation thereof. If the required adjustment is not
determinable at the time of such notice, the Company shall give notice to each
Warrantholder of such adjustment and computation promptly after such adjustment
becomes determinable.
ARTICLE V
DEFINITIONS
The following terms, as used in this Warrant, have the
following respective meanings:
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"APPRAISAL PROCEDURE" means a procedure whereby two
independent appraisers, one chosen by the Company and one by the Holder (or any
permitted transferee of all of the Holder's outstanding Warrants), shall
mutually agree upon the determinations then the subject of appraisal. Each party
shall deliver a notice to the other appointing its appraiser within 15 Business
Days after the Appraisal Procedure is invoked. If within 30 days after
appointment of the two appraisers they are unable to agree upon the amount in
question, a third independent appraiser shall be chosen within 10 Business Days
thereafter by the mutual consent of such first two appraisers or, if such first
two appraisers fail to agree upon the appointment of a third appraiser, such
appointment shall be made by the American Arbitration Association, or any
organization successor thereto, from a panel of arbitrators having experience in
the business of the Company. The decision of the third appraiser so appointed
and chosen shall be given within 30 days after the selection of such third
appraiser. If three appraisers shall be appointed and the determination of one
appraiser is disparate from the middle determination by more than twice the
amount by which the other determination is disparate from the middle
determination, then the determination of such appraiser shall be excluded, the
remaining two determinations shall be averaged and such average shall be binding
and conclusive on the Company and the Holder; otherwise the average of all three
determinations shall be binding and conclusive on the Company and the Holder.
The costs of conducting any Appraisal Procedure shall be borne by the Company.
"BUSINESS DAYS" means each day in which banking institutions
in New York are not required or authorized by law or executive order to close,
unless there shall have been an offering of the Common Stock registered under
the Securities Act, in which case "Business Day" means (a) if any class of
Common Stock is listed or admitted to trading on a national securities exchange,
a day on which the principal national securities exchange on which such class of
Common Stock is listed or admitted to trading is open for business or (b) if no
class of Common Stock is so listed or admitted to trading, a day on which any
New York Stock Exchange member firm is open for business.
"CAPITAL REORGANIZATION" shall have the meaning set forth in
Section 4.5.
"CLOSING PRICE" on any day means (a) if any class of Common
Stock is listed or admitted for trading on a national securities exchange, the
reported last sales price regular way or, if no such reported sale occurs on
such day, the average of the closing bid and asked prices regular way on such
day, in each case on the principal national securities exchange on which such
class of Common Stock is listed or admitted to trading, or (b) if no class of
Common Stock is listed or admitted to trading on any national securities
exchange, the average of the closing bid and asked prices in the
over-the-counter market on such day as reported by NASDAQ or any comparable
system or, if not so reported, as reported by any New York Stock Exchange member
firm selected by the Company for such purpose.
"COMMON STOCK" shall have the meaning set forth in the first
paragraph of this Warrant, subject to adjustment pursuant to Article IV.
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"COMMON STOCK DISTRIBUTION" shall have the meaning set forth
in Section 4.3(a).
"COMMON STOCK REORGANIZATION" shall have the meaning set forth
in Section 4.2.
"COMPANY" shall have the meaning set forth in the first
paragraph of this Warrant.
"CONVERTIBLE SECURITIES" shall have the meaning set forth in
Section 4.3(b).
"CREDIT AGREEMENT" shall mean the Credit Agreement, dated as
of April 2, 1998, as amended, among the Company, the other borrowers named
therein, the Holder and the other lenders named therein.
"DELISTED" means the shares of the Company's Common Stock are
not listed on either a national securities exchange or the NASDAQ National
Market System
"DISPOSITION" shall have the meaning set forth in Section 3.4.
"DISTRIBUTABLE AMOUNT" means the amount of cash plus the Fair
Market Value of property other than cash to which the holder of one and one half
percent (1.5%) of the Common Stock would be entitled to receive in connection
with a Significant Corporate Event (assuming that all proceeds of such
Significant Corporate Event were immediately distributed to the shareholders of
the Company.)
"EARNINGS VALUE" means, as at any date of determination, an
amount equal (A) to the sum of (a) the greater of (i) net income of the Company
and its Subsidiaries during the 12-month period ending on the last day of the
most recently ended fiscal quarter of the Company and (ii) net income of the
Company and its Subsidiaries during the most recently ended fiscal year of the
Company, in each case determined on a consolidated basis in accordance with
GAAP, plus (b) all federal, state and local income and franchise taxes deducted
from income in determining such net income, minus (c) all extraordinary or
nonrecurring losses and gains, and any losses and gains from the sale or
dispositions of assets other than in the ordinary course of business, plus (d)
all depreciation, amortization and interest expense during such period, each
determined in accordance with GAAP, plus (e) all cash and cash equivalents of
the Company and its Subsidiaries determined in accordance with GAAP, minus (f)
the amount of indebtedness of the Company and its Subsidiaries under the Credit
Agreement, times (B) a multiple of five and one half (5.5), except that in the
event of a Call under Section 6.2(a) the multiple shall be six and one half
(6.5) and that in the event of a Call under Section 6.2(b) the multiple shall be
seven and one half (7.5).
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended, and any successor Federal statute, and the rules and regulations of the
Securities and Exchange Commission (or its successor) thereunder, all as the
same shall be in effect at the time.
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"EXERCISE PRICE" means $.01 per share of Common Stock, subject
to adjustment pursuant to Article IV.
"FAIR MARKET VALUE" means the fair market value of the
business, property or asset in question, as determined by the mutual agreement
of the Company and the Holder (or any permitted transferee of all of the
Warrants). If no such agreement is reached within 30 days of the "Agreement
Initiation Date," then Fair Market Value shall be determined in accordance with
the Appraisal Procedure, with the appraised Fair Market Value of the Company
equal to the greater of (a) the fair market value of the Company and its
Subsidiaries as a going concern and (b) the liquidation value thereof. For
purposes hereof, Agreement Initiation Date for determining Fair Market Value
pursuant to Section 6.1 shall mean two Business Days after a Holder has given
notice to the Company of its intention to exercise its put right, for
determining Fair Market Value pursuant to Section 6.2 shall mean two Business
Days after the Company has given notice to the Holders of all of the Warrants of
its intention to exercise its call right, for determining Fair Market Value for
purposes of Section 1.3 shall mean the date on which any Holder has exercised
Warrants and for determining Fair Market Value for purposes of Article IV shall
mean the date on which a Holder has received from the Company a notice of an
adjustment pursuant to Section 4.9. Notwithstanding the foregoing, if at any
date of determination of the Fair Market Value of the Company, the Common Stock
of any class shall then be publicly traded, the Fair Market Value of the Company
on such date shall be the greater of (a) the amount determined as provided above
and (b) the Market Price on such date multiplied by the number of shares of
Common Stock then outstanding.
"HOLDER" shall have the meaning set forth in the first
paragraph of this Warrant.
"HOLDER'S PERCENTAGE" shall have the meaning set forth in
Section 6.3.
"LENDERS" means The Chase Manhattan Bank, IBJ Whitehall Bank &
Trust Company, Nationsbank, N.A. and Merrill Lynch Business Financial Services
Inc.
"MARKET PRICE" on any day means the average of the daily
Closing Prices of a share of Common Stock for the 20 consecutive Business Days
ending on the most recent Business Day for which a closing price is available.
"NASD" means The National Association of Securities Dealers,
Inc.
"NASDAQ" means The National Association of Securities Dealers,
Inc. Automated Quotation System.
"NEW SECURITIES" shall mean any Common Stock, Convertible
Securities, Options or capital stock of any class (including, without
limitation, preferred stock).
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"OPTIONS" shall have the meaning set forth in Section 4.3(b).
"REGISTRATION RIGHTS AGREEMENT" shall have the meaning set
forth in Section 3.1.
"SECURITIES ACT" means the Securities Act of 1933, as amended,
and any successor Federal statute, and the rules and regulations of the
Securities and Exchange Commission (or its successor) thereunder, all as the
same shall be in effect from time to time.
"SHAREHOLDER" shall have the meaning set forth in Section 3.4
hereof.
"SIGNIFICANT CORPORATE EVENT" means any Acquisition,
Recapitalization, Change in Control or Sale of Securities that is arranged or
consummated on or prior to the first anniversary of the date of a purchase of
the Warrants pursuant to Section 6.1. For purposes hereof: "ACQUISITION" means
any transaction pursuant to which all or substantially all of the assets of the
Company or any Subsidiary of the Company are sold, transferred or otherwise
disposed, or the Company or any Subsidiary of the Company merges with or into
another third party entity or consolidates with another such entity, or the
Company or any Subsidiary of the Company liquidates or dissolves; "CHANGE IN
CONTROL" means any transaction or series of related transactions in which
beneficial ownership of more than twenty percent (20%) of the issued and
outstanding shares of capital stock of the Company or any Subsidiary of the
Company are sold, transferred or disposed; "RECAPITALIZATION" means any
transaction pursuant to which the Company or any Subsidiary of the Company shall
declare and pay any Special Dividend in cash or other property (other than
Common Stock), or shall exchange any of its securities for other securities or a
combination of securities and other property, or shall repurchase, redeem or
otherwise acquire any of its securities; and "SALE OF SECURITIES" means any sale
by the Company or any Subsidiary of the Company of any of its securities.
"SPECIAL DIVIDEND" shall have the meaning set forth in
Section 4.4.
"SUBSIDIARY" of the Company means any corporation,
partnership, joint venture, association or other business entity of which more
than 50% of the total voting power of shares of stock or other interests therein
entitled to vote in the election of members of the board of directors,
partnership committee, board of managers or trustees or other managerial body
thereof is at the time owned or controlled, directly or indirectly, by the
Company or one or more of the other Subsidiaries or a combination thereof.
"WARRANT AGENCY" shall have the meaning set forth in Section
2.1.
"WARRANTHOLDER" means a holder of a Warrant.
"WARRANTS" shall have the meaning set forth in the second
paragraph of this Warrant.
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ARTICLE VI
RIGHTS TO PUT AND CALL WARRANT
6.1. PUT RIGHT. The Company shall (or shall cause its
Subsidiaries to) upon the written notice from any Holder of Warrants, given at
any time on or after the earlier to occur of (i) November 3, 2004 and (ii)
maturity (whether by acceleration or otherwise) of the Obligations (as defined
in the Credit Agreement), to the extent that the Company or any such Subsidiary
may legally do so, purchase all or any part of such Holder's Warrants specified
in such notice in accordance with the provisions of this Article VI. The
purchase price payable to each Holder for Warrants purchased pursuant to this
Section 6.1 shall be equal to such Holder's Percentage multiplied by the greater
of (i) the Earnings Value and (ii) the Fair Market Value on the date of such
purchase. The Company shall pay the purchase price for Warrants provided for in
this Section 6.1 at the closing referred to in Section 6.4.
6.2. CALL RIGHT.
(a) The Company may upon the written notice to the Holders of
all of the Warrants, given at any time on or after November 3, 2005, to the
extent that the Company may legally do so, purchase all (but not less than all)
of the outstanding Warrants. The purchase price payable to each Holder of
Warrants purchased pursuant to this Section 6.2 (a) shall be equal to such
Holder's Percentage multiplied by the greater of (i) the Earnings Value (using a
multiple of 6.5) and (ii) the Fair Market Value on the date of such purchase.
(b) The Company may upon the written notice to the Holders of
all of the Warrants, given at any time the Company refinances its indebtedness
under the Credit Agreement in a transaction in which all of the Lenders do not
participate, to the extent that the Company may legally do so, purchase all (but
not less than all) of the outstanding Warrants. The purchase price payable to
each Holder of Warrants purchased pursuant to this Section 6.2(b) shall be equal
to such Holder's Percentage multiplied by the greater of (i) the Earnings Value
(using a multiple of 7.5) and (ii) the Fair Market Value on the date of such
purchase.
6.3. HOLDER'S PERCENTAGE. As used in Section 6.1 or 6.2, the
term "HOLDER'S PERCENTAGE" shall mean the fraction, the numerator of which shall
be the number of shares of Common Stock issuable upon exercise of the portion of
this Warrant requested to be purchased from such Holder, in the case of Section
6.1, or all of such Holder's shares, in the case of Section 6.2, and the
denominator of which shall be the number of number of shares of Common Stock
outstanding on the calculation date.
6.4. CLOSING OF WARRANT PURCHASE. The purchase of any Warrants
by the Company pursuant to Section 6.1 or 6.2 shall take place at a place and
time designated by the
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Company, not less than 30 days nor more than 60 days after the notice of
purchase pursuant to Section 6.1or 6.2. The Company shall notify the Holders of
Warrants to be purchased of such place and time not less than five business days
prior thereto. At the place and time specified in such notice, the Company shall
purchase such Warrants and pay the purchase price therefor, by wire transfer of
immediately available funds to such accounts as the Holders of the Warrants may
specify in writing. If this Warrant has expired, the Company shall, at its
expense, at the closing deliver to said Holder a new Warrant representing the
number of shares with respect to which this Warrant shall not then have been
purchased. Upon the purchase of a Warrant, the Warrant shall be cancelled and
shall not be deemed outstanding for any purpose.
6.5. DEFAULT BY COMPANY. If the Company shall default in its
obligation pursuant to Section 6.1 to purchase such Warrant, the Holder shall
retain all rights to exercise the Warrant in accordance with the terms of this
Warrant and may also claim against the Company for the defaulted purchase price,
with interest as provided in Section 3.1 of the Credit Agreement.
6.6. EXPIRATION OF WARRANTS. If a put notice is given pursuant
to Section 6.1 or 6.2 prior to the expiration of the Warrants, the Company's
obligation to pay the purchase price therefor shall be fixed as of the date of
such notice and shall not be released or otherwise affected by the expiration of
the Warrants subsequent to such notice and prior to the closing of the purchase.
In such case the Company shall purchase the Warrants covered by such notice in
all respects as if such Warrants had not expired.
6.7. CERTAIN LEGAL REQUIREMENTS. Anything herein to the
contrary notwithstanding, no Holder of a Warrant shall be required to sell such
Warrant to the Company under specific circumstances that would constitute a
fraudulent transfer within the meaning of any applicable law or otherwise give
the Holder reasonable grounds to believe that such transaction would expose such
Holder to liability for the return of the purchase price upon the application of
the Company, its creditors or a bankruptcy trustee. If at any time: (i) the
Company is purchasing Warrants, (ii) the Company is required by law or by any
provision of its charter or by-laws or otherwise to make such purchase from its
surplus account and (iii) the Company's surplus is not sufficient for such
purpose, then and in any such event the Company shall promptly take all such
action as shall be necessary and within its power (including reducing its
capital stock account) to enable the Company to make such purchase.
6.8 SIGNIFICANT CORPORATE EVENT. (a) Not less than 30 days
prior to the occurrence of a Significant Corporate Event, the Company shall give
to the Holder written notice of such Significant Corporate Event, the date same
is to occur and all principal terms thereof, including without limitation the
amount of proceeds to be derived therefrom and the Distributable Amount in
connection therewith. Each such notice shall state that (a) Company is not
contemplating or planning any other Significant Corporate Event or (b) the
Company is contemplating or planning another Significant Corporate Event and
describing same to the same extent as that required in the preceding sentence.
The Company shall furnish to the Holder such information concerning each
Significant Corporate Event as the Holder shall reasonably request.
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(b) In the event that a Significant Corporate Event is
consummated, the purchase price payable to each Holder of Warrants purchased
pursuant to Section 6.1 or Section 6.2, as the case may be, shall be increased
by the amount, if any, by which (i) such Holder's Distributable Amount resulting
from such Significant Corporate Event exceeds (ii) the purchase price
theretofore paid to such Holder pursuant to Section 6.1 or Section 6.2, as the
case may be.
(c) The Company shall pay any increased purchase price payable
pursuant to Section 6.8(b) in immediately available funds on the date of the
closing of the relevant Significant Corporate Event.
6.9 DELIVERY OF WARRANTS. The Holders shall deliver the
Warrants to the Company upon the earlier to occur of (i) full payment for the
Warrants under Section 6.8 hereof and (ii) the date one year following the
purchase of the Warrants under Sections 6.1 or 6.2, assuming that (x) no notice
shall have been given of a Significant Corporate Event the consummation of which
might result in a Distributable Amount and (y) the Holder receives a certificate
of the Company to the effect that as of such date, no Significant Corporate
Event has been arranged and not consummated. In the event that as of the date
referred to in clause (ii) of this Section 6.9 the Holder may be entitled to
receive additional amounts from the Company, the Holder shall deliver the
Warrants to the Company on the date such amounts are paid.
ARTICLE VII
MISCELLANEOUS
7.1. NOTICES. Any notice or other communication to be given
shall be in writing and may be personally served, telexed or sent by United
States mail and shall be deemed to have been given when delivered in person,
upon receipt of telex of four Business Days after deposit in the United States
mail, registered or certified, with postage prepaid and properly addressed. In
the case of the Holder, such notices and communications shall be addressed to
its address as shown on the books maintained by the Warrant Agency, unless the
Holder shall notify the Company and the Warrant Agency that notices and
communications should be sent to a different address (or telex number), in which
case such notices and communications shall be sent to the address (or telex
number) specified by the Holder. In the case of the Company, such notices and
communications shall be addressed as follows (until notice of a change is given
as provided herein):
Let's Talk Cellular & Wireless, Inc.
800 Brickell Avenue, Suite 400
Miami, Florida 33131
Attention: David H. Eisenberg
Telephone: (305) 358-8255
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<PAGE> 21
Facsimile: (305) 358-9068
7.2. WAIVERS; AMENDMENTS. No failure or delay of the Holder in
exercising any power or right hereunder shall operate as a waiver thereof, nor
shall any single or partial exercise of such right or power, or any abandonment
or discontinuance of steps to enforce such a right or power, preclude any other
or further exercise thereof or the exercise of any other right or power. The
rights and remedies of the Holder are cumulative and not exclusive of any rights
or remedies which it would otherwise have. The provisions of this Warrant may be
amended, modified or waived with (and only with) the written consent of the
Company and the Holder (or any permitted transferee of all of the Warrants);
PROVIDED, HOWEVER, that no such amendment, modification or waiver shall, without
the written consent of the Holders of all Warrants at the time outstanding, (a)
change the number of shares of Common Stock subject to purchase upon exercise of
this Warrant, the Exercise Price or provisions for payment thereof or (b) amend,
modify or waive the provisions of this Section or Article III, IV or VI. The
provisions of the Registration Rights Agreement may be amended, modified or
waived only in accordance with the respective provisions thereof.
Any such amendment, modification or waiver effected pursuant
to this Section or the applicable provisions of the Registration Rights
Agreement shall be binding upon the holders of all Warrants and Warrant Shares,
upon each future holder thereof and upon the Company. In the event of any such
amendment, modification or waiver the Company shall give prompt notice thereof
to all holders of Warrants and, if appropriate, notation thereof shall be made
on all Warrants thereafter surrendered for registration of transfer or exchange.
No notice or demand on the Company in any case shall entitle
the Company to any other or further notice or demand in similar or other
circumstances.
7.3. GOVERNING LAW. This Warrant shall be construed in
accordance with and governed by the laws of the State of New York except that
matters relating to the corporate power and authority of the Company to carry
out and comply with its agreements and undertakings hereunder shall be governed
by the laws of the State of Florida.
7.4. SURVIVAL OF AGREEMENTS; REPRESENTATIONS AND WARRANTIES,
ETC. All warranties, representations and covenants made by the Company herein or
in the Registration Rights Agreement or in any certificate or other instrument
delivered by or on behalf of it in connection with the Registration Rights
Agreement or the Warrants shall be considered to have been relied upon by the
Holder and shall survive the issuance and delivery of the Warrants, regardless
of any investigation made by the Holder, and shall continue in full force and
effect so long as this Warrant is outstanding. All statements in any such
certificate or other instrument shall constitute representations and warranties
hereunder.
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<PAGE> 22
7.5. COVENANTS TO BIND SUCCESSOR AND ASSIGNS. All covenants,
stipulations, promises and agreements in this Warrant contained by or on behalf
of the Company shall bind its successors and assigns, whether so expressed or
not.
7.6. SEVERABILITY. In case any one or more of the provisions
contained in the Registration Rights Agreement or this Warrant shall be invalid,
illegal or unenforceable in any respect, the validity, legality and
enforceability of the remaining provisions contained herein and therein 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
provisions with valid provisions the economic effect of which comes as close as
possible to that of the invalid, illegal or unenforceable provisions.
7.7 SECTION HEADINGS. The section headings used herein are for
convenience of reference only, are not part of this Warrant and are not to
affect the construction of or be taken into consideration in interpreting this
Warrant.
7.8 NO RIGHTS AS STOCKHOLDER. This Warrant shall not entitle
the Holder to any rights as a stockholder of the Company.
7.9 ORIGINAL ISSUE DISCOUNT. Under both generally accepted
accounting principles and the regulations of the Internal Revenue Service, the
issuance of Notes (as defined in the Credit Agreement) and this Warrant to the
Holder, for an aggregate purchase price equal to the principal amount of such
Notes, will result in the creation of "original issue discount" on such Notes
(which original issue discount may also be deemed to constitute the value of
this Warrant) and requires the determination of the value of this Warrant.
Accordingly, the Company and the Holder agree that the amount of original issue
discount on the Notes issued to the Holder and the value of 100% of this Warrant
(which original issue discount and value shall be used by the Company and the
Holder, as well as any subsequent holder of such Notes and this Warrant, for all
purposes, including the preparation of tax returns and the preparation of
financial statements of the Company and its Subsidiaries), shall be determined
no later than 45 days from the date hereof.
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<PAGE> 23
IN WITNESS WHEREOF, LET'S TALK CELLULAR & WIRELESS, INC. has
caused this Warrant to be executed in its corporate name by one of its officers
thereunto duly authorized, and its corporate seal to be hereunto affixed,
attested by its Secretary or an Assistant Secretary, all as of the day and year
first above written.
LET'S TALK CELLULAR & WIRELESS, INC.
By: /s/ Daniel Cammarata
-----------------------------
Title: CFO
[Corporate Seal]
Attest:
/s/ Lazarus Rothstein
- --------------------------------
Secretary
SOLELY WITH RESPECT TO SECTION 3.4 HEREOF:
/s/ Douglas Berman
- ---------------------------------
HIG Investment Group, L.P.
/s/ Douglas Berman
- ---------------------------------
HIG Fund V, Inc.
/s/ Douglas Berman
- ---------------------------------
Texas Cellular Partners L.P.
23
<PAGE> 24
SUBSCRIPTION NOTICE
(To be executed upon exercise of Warrant)
To: LET'S TALK CELLULAR & WIRELESS, INC.
The undersigned hereby irrevocably elects to exercise the
right of purchase represented by the attached Warrant for, and to purchase
thereunder, _____ shares of Common Stock, as provided for therein, and tenders
herewith payment of the Exercise Price in full in the form of ____________.
Please issue a certificate or certificates for such shares of
Common Stock in the following name or names and denominations:
If said number of shares shall not be all the shares issuable
upon exercise of the attached Warrant, a new Warrant is to be issued in the name
of the undersigned for the balance remaining of such shares less any fraction of
a share paid in cash.
Dated: ,
---------------- ----
---------------------------
NOTE: THE ABOVE SIGNATURE SHOULD CORRESPOND EXACTLY WITH THE NAME ON THE FACE OF
THE ATTACHED WARRANT OR WITH THE NAME OF THE ASSIGNEE APPEARING IN THE
ASSIGNMENT FORM BELOW.
24
<PAGE> 25
ASSIGNMENT
(To be executed upon assignment of Warrant)
For value received, _______________________________ hereby
sells, assigns and transfers unto ____________________ the attached Warrant,
together with all right, title and interest therein, and does hereby irrevocably
constitute and appoint _____________________________ attorney to transfer said
warrant on the books of LET'S TALK CELLULAR & WIRELESS, INC., a Florida
corporation, with full power of substitution in the premises.
----------------------------
Dated: ,
-------------- ----
<PAGE> 1
REGISTRATION RIGHTS AGREEMENT, dated as of November 3, 1999, between
Let's Talk Cellular & Wireless, Inc., a Florida corporation (the "Company"), and
The Chase Manhattan Bank, IBJ Whitehall Bank & Trust Company, Nationsbank, N.A.,
and Merrill Lynch Business Financial Services Inc. (each a "Lender" and
collectively, the "Lenders").
WHEREAS, the Company has issued to the Lenders Warrants of
even date entitling the Lenders to purchase up to an aggregate of 524,984 shares
of Common Stock of the Company (the "Warrants); and
WHEREAS, the Lenders have requested that the Company enter
into this Agreement as a condition to Lenders entering into Waiver and Amendment
No. 6 to the Credit Agreement (as defined in the Warrants), and the Company has
so agreed to enter into this Agreement and to issue the Warrants.
NOW, THEREFORE, the parties hereto agree as follows:
ARTICLE I
Definitions
Capitalized terms used herein and not otherwise defined herein
shall have the meanings set forth in the Warrants. The following terms, as used
in this Agreement, have the following respective meanings:
"Person" means any natural person, corporation, limited
partnership, general partnership, joint stock company, joint venture,
association, company, trust, bank, trust company, land trust, business trust or
other organization, whether or not a legal entity, and any government agency or
political subdivision thereof.
"Warrant Shares" means any shares of Common Stock issued upon
exercise of the Warrants.
<PAGE> 2
ARTICLE II
Registration Rights
2.1. Demand Registration. (a) At any time after the date
hereof, upon the written request, from time to time, of any Lender, the Company
will use its best efforts to effect expeditiously the registration under the
Securities Act of all Warrant Shares requested to be registered; provided,
however, that the Company shall not be obligated to effect more than one
registration pursuant to this Section 2.1 at the request of each Lender (i.e.,
up to a total of three registrations).
(b) A request pursuant to this Section 2.1 shall state the
number of Warrant Shares requested to be registered and the intended method of
disposition thereof. If at the time of receipt of any request for registration
pursuant to this Section 2.1 there shall be any public sale of Common Stock
contemplated or in progress by the Company or, to the knowledge of the Company,
by any other Person, then, upon receipt of such request, the Company agrees to
notify the holder requesting such registration advising such holder that it may
elect to withdraw such request and participate in such public offering pursuant
to Section 2.2. Promptly upon receipt of any request pursuant to this Section
2.1 or, if the provisions of the preceding sentence shall be applicable to such
request, promptly upon receipt of notice that the requesting holder wishes to
maintain its request, the Company will send a notice to all other holders of
Warrants and Warrant Shares, together with a copy of the request and, if the
provisions of the preceding sentence shall be applicable to such request, notice
of such public offering. Such other holders may elect to participate in the
registration by notice to the Company given within 30 days following the date of
the Company's notice of request for registration.
(c) In addition, (i) if the Company has issued and sold to
the public, pursuant to a registration statement filed under the Securities Act,
any of its securities in an underwritten offering within ninety (90) days prior
to the date of its receipt of a request for registration pursuant to this
Section 2.1 and the Company's managing underwriter has advised the Company in
writing that the registration of Warrant Shares would materially adversely
affect the market for the Common Stock, or (ii) if the Company (A) is in
possession of material non-public information involving the Company in
connection with a material reorganization, merger, consolidation, acquisition of
securities or assets or disposition of securities or assets, (B) determines on
the advice of counsel that disclosure of such information would be required in a
registration statement, and (C) determines in good faith that disclosure of such
non-public information would have a material adverse effect on the Company and
its stockholders, the Company shall have the right, which may not be exercised
more than once in a twelve month period, to delay the requested registration of
Warrant Shares for, in the case of clause (i) above, up to ninety (90) days
after the effective date of the Company's earlier registration statement or such
shorter period as may be acceptable to the managing underwriter, or, in the case
of clause (ii) above, up to ninety (90) days after the date on which such
request was made.
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<PAGE> 3
2.2. Incidental Registration. If at any time after the date of
issue of the Warrants the Company proposes to register any securities under the
Securities Act for sale to the public, the Company shall, not less than 30 nor
more than 90 days prior to the proposed date of filing a registration statement
under the Securities Act, give written notice to all holders of Warrants and
Warrant Shares of its intention to do so. Upon the written request of any holder
of Warrants or Warrant Shares given within 30 days after transmittal by the
Company of such notice, the Company will use its best efforts to cause Warrant
Shares requested to be registered to be so registered under the Securities Act.
A request pursuant to this Section 2.2 shall state the number of Warrant Shares
requested to be registered and the intended method of disposition thereof. The
rights granted in this Section 2.2 shall apply in each case where the Company
proposes to register securities regardless of whether such rights may have been
exercised previously. Notwithstanding anything herein to the contrary, the
Company will not be obligated or required to include any Warrant Shares in any
registration effected on Form S-4; on Form S-8 to implement an employee benefit
plan (including any option plan) or on any successor forms.
2.3. Registration Procedures. If and whenever the Company is
required by the provisions of this Article II to use its reasonable best efforts
to effect the registration of any securities under the Securities Act, the
Company will as expeditiously as possible:
(a) prepare and file with the Securities and Exchange
Commission a registration statement with respect to such securities and
use its best efforts to cause such registration statement to become and
remain effective for a period of time required for the disposition of
such securities by the holders thereof;
(b) prepare and file with the Securities and Exchange
Commission such amendments and supplements to such registration
statement and the prospectus used in connection therewith as may be
necessary to keep such registration statement effective and to comply
with the provisions of the Securities Act with respect to the sale or
other disposition of all securities covered by such registration
statement whenever the seller or sellers of such securities shall
desire to sell or otherwise dispose of the same;
(c) furnish to each seller and to each duly authorized
underwriter of each seller such number of authorized copies of a
prospectus, including copies of a preliminary prospectus, in conformity
with the requirements of the Securities Act, and such other documents
as such seller or underwriter may reasonably request in order to
facilitate the public sale or other disposition of the securities owned
by such seller;
(d) use its best efforts to register or qualify the securities
covered by such registration statement under such securities or blue
sky laws of such jurisdictions as each seller shall request, and do any
and all other acts and things which may be necessary under such
securities or blue sky laws to enable such seller to consummate the
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<PAGE> 4
public sale or other disposition in such jurisdictions of the
securities to be sold by such seller, except that the Company shall not
for any such purpose be required to qualify to do business as a foreign
corporation in any jurisdiction wherein it is not qualified or to file
any general consent to service of process;
(e) before filing the registration statement or prospectus or
amendments or supplements thereto, furnish to counsel selected by the
holders of Warrant Shares included in such registration statement
copies of all such documents proposed to be filed, all of which shall
be subject to the approval of such counsel;
(f) furnish, at the request of any seller, on the date that
such seller's securities are delivered to the underwriters for sale
pursuant to such registration or, if such securities are not being sold
through underwriters, on the date that the registration statement with
respect to such securities becomes effective, (1) an opinion, dated
such date, of the independent counsel representing the Company for the
purposes of such registration, addressed to the underwriters, if any,
and if such securities are not being sold through underwriters, then to
the sellers, stating that such registration statement has become
effective under the Securities Act and that (i) to the best knowledge
of such counsel, no stop order suspending the effectiveness thereof has
been issued and no proceedings for that purpose have been instituted or
are pending or contemplated under the Securities Act, (ii) the
registration statement, the related prospectus, and each amendment or
supplement thereto comply as to form in all material respects with the
requirements of the Securities Act and the applicable rules and
regulations of the Commission thereunder (except that such counsel need
express no opinion as to financial statements contained therein), (iii)
the descriptions in the registration statement or the prospectus, or
any amendment or supplement thereto, of all legal matters and contacts
and other legal documents or instruments are accurate and fairly
present the information required to be shown, and such counsel does not
know of any legal or governmental proceedings, pending or contemplated,
required to be described in the registration statement or prospectus,
or any amendment or supplement thereto, which are not described as
required, nor of any contracts or documents or instruments of a
character required to be described in the registration statement or
prospectus, or any amendment or supplement thereto, or to be filed as
exhibits to the registration statement, which are not described and
filed or incorporated by reference as required; such counsel shall also
confirm that he has no reason to believe that either the registration
statement or the prospectus, or any amendment or supplement thereto
(other than financial material as to which such counsel need make no
statement) contains any untrue statement of a material fact or omits to
state a material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances in which
made, not misleading; and (2) a letter dated such date, from the
independent certified public accountants of the Company addressed to
4
<PAGE> 5
the underwriters, if any, and if such securities are not being sold
through underwriters, then to the sellers and, if such accountants
refuse to deliver such letter to such sellers, then to the Company
stating that they are independent certified public accountants within
the meaning of the Securities Act and that, in the opinion of such
accountants, the financial statements and other financial data of the
Company included in the registration statement or the prospectus, or
any amendment or supplement thereto, comply as to form in all material
respects with the applicable accounting requirements of the Securities
Act. Such opinion of counsel shall additionally cover such other legal
matters with respect to the registration in respect of which such
opinion is being given as sellers may reasonably request. Such letter
from the independent certified public accountants shall additionally
cover such other financial matters (including information as to the
period ending not more than 5 business days prior to the date of such
letter) with respect to the registration in respect of which such
letter is being given as the holders holding a majority of the Warrant
Shares being so registered may reasonably request;
(g) enter into customary agreements (including an underwriting
agreement in customary form) and take such other actions as are
reasonably required in order to expedite or facilitate the disposition
of such securities; and
(h) otherwise use its best efforts to comply with all
applicable rules and regulations of the Commission, and make available
to its security holders, as soon as reasonably practicable, but not
later than 18 months after the effective date of the Registration
Statement, an earnings statement covering the period of at least 12
months beginning with the first full month after the effective date of
such registration statement, which earnings statements shall satisfy
the provisions of Section 11(a) of the Securities Act.
2.4. Expenses. All expenses (other than underwriting discounts)
incurred in effecting the registrations provided for in this Article II,
including without limitation all registration and filing fees (including all
expenses incident to filing with the NASD and any securities exchange), printing
expenses, fees and disbursements of counsel for the Company, expenses of any
audits incident to or required by any such registration and expenses of
complying with the securities or blue sky laws of any jurisdictions pursuant to
Subsection 2.3(d) hereof, shall be paid by the Company, and the Company shall
pay the reasonable fees and disbursements of one counsel for the holders of
Warrant Shares for performance of the normal and customary functions of counsel
for selling shareholders in each such registration.
2.5. Marketing Restrictions. (a) If (i) any holder of Warrants or
Warrant Shares wishes to register any Warrant Shares in a registration made
pursuant to Section 2.1 hereof, (ii) the offering proposed to be made by such
holder or holders is to be an underwritten public offering, (iii) the Company or
one or more holders of securities other than Warrants or Warrant Shares to whom
the Company has granted registration rights, wish to register securities in such
5
<PAGE> 6
registration and (iv) the managing underwriters of such public offering furnish
a written opinion that the total amount of securities to be included in such
offering would exceed the maximum amount of securities (as specified in such
opinion) which can be marketed at a price reasonably related to the then current
market value of such securities and without materially and adversely affecting
such offering; then the rights of holders of Warrants and Warrant Shares, the
Company and the holders of other securities with registration rights to
participate in such offering shall be in the following order of priority:
First: The holders of Warrants and Warrant Shares requesting
registration of Warrant Shares shall be entitled to participate in
proportion to the number of Warrant Shares held by each such holder if,
pursuant to clause (iv) above, the total amount of securities to be
included in the offering will be less than the number of Warrant Shares
that all of such holders shall request be registered, but with further
pro rata allocations in the event any such holder has requested
registration of fewer Warrant Shares than such holder is entitled to
have registered; and then
Second: The Company and all holders of other securities having
the right to include such securities in such registration shall be
entitled to participate in accordance with the relative priorities, if
any, as shall exist among them and the Company;
and no securities (issued or unissued) other than those registered and included
in the underwritten offering shall be offered for sale or other disposition by
the Company or any other person (unless such person has already entered into a
registration rights agreement with the Company prior to the date hereof with
which this restriction would conflict) in a transaction which would require
registration under the Securities Act (including any additional offering which
is to be registered pursuant to Section 2.1) until the expiration of 90 days
after the effective date of the registration statement requested pursuant to
this Article II or such shorter period as may be acceptable to the holders of
Warrant Shares participating in such underwritten offering.
(b) If (i) any holder of Warrants or Warrant Shares requests
registration of Warrant Shares under Section 2.2, (ii) the offering proposed to
be made is to be an underwritten public offering and (iii) the managing
underwriters of such public offering furnish a written opinion that the total
amount of securities to be included in such offering would exceed the maximum
amount of securities (as specified in such opinion) which can be marketed at a
price reasonably related to the then current market value of such securities and
without materially and adversely affecting such offering; then the rights of the
Company and the holders of Warrants, Warrant Shares and other securities having
the right to include such securities in such registration to participate in such
offering shall be in the following order of priority:
6
<PAGE> 7
First: If such registration shall have been proposed by the
Company, the Company shall be entitled to participate to the extent
requested by it; or if such registration shall have been requested by
the holders of other securities pursuant to a right granted by the
Company to request such registration, the Person or Persons requesting
such registration shall be entitled to participate in accordance with
the relative priorities, if any, as shall exist among them; or if such
registration shall have been requested by a Person or Persons other
than holders of other securities pursuant to a right to request such
registration, such Person or Persons shall be entitled to participate
pro rata among themselves in accordance with the number of securities
held by each such Person with further pro rata allocations to the
extent any such Person has requested registration of less securities
than such Person is entitled to have registered; and then
Second: The holders of Warrants and Warrant Shares, together
with the holders of Common Stock requesting registration thereof
pursuant to a right granted by the Company to request such
registration, shall be entitled to participate pro rata among
themselves in accordance with the number of Warrant Shares or shares of
Common Stock, as the case may be, held by each such holder with further
pro rata allocations to the extent any such holder has requested
registration of fewer Warrant Shares or shares of Common Stock, as the
case may be, then such holder is entitled to have registered; and then
Third: If such registration shall have been requested by a
Person or Persons other than the Company, the Company and the holders
of securities (other than Warrants and Warrant Shares) having the right
to include such securities in such registration shall be entitled to
include securities in such registration in accordance with the relative
priorities, if any, as shall exist among them; or if such registration
shall have been requested by the Company, the holders of securities
other than Warrants, Warrant Shares or securities having the right to
include such securities in such registration shall have the right to
participate in accordance with the relative priorities as shall exist
among them;
and no securities (issued or unissued) other than those registered and included
in the underwritten offering shall be offered for sale or other disposition in a
transaction which would require registration under the Securities Act (including
any additional offering which is to be registered pursuant to Section 2.1) until
the expiration of 90 days after the effective date of the registration statement
in which Warrant Shares were included pursuant to Section 2.2 or such shorter
period as may be acceptable to the holders of Warrant Shares who may be
participating in such offering.
2.6. Termination of Rights. Notwithstanding the foregoing
provisions of this Article II, the rights to registration shall terminate as to
any particular Warrant Shares when (a) such Warrant Shares shall have been
7
<PAGE> 8
effectively registered under the Securities Act or Registration Laws and sold by
the holder thereof in accordance with such registration or (b) written opinions,
to the effect that such Warrant Shares may be sold without registration under
the Securities Act or applicable state law and without restriction as to the
volume and timing of such sales, shall have been received from counsel for both
the Company and the holders thereof.
2.7. Compliance with Rule 144. At the request of any holder of
Warrants or Warrant Shares who proposes to sell Warrant Shares in compliance
with Rule 144 of the Securities and Exchange Commission, or any similar Rule,
assuming that at such time the provisions of such Rule are applicable to such
holder and, in the event such holder is or could be deemed to be an "affiliate"
of the Company, the Company is then required to file reports under Section 13 or
15(d) of the Exchange Act, the Company shall (a) forthwith furnish to such
holder a written statement as to its compliance with the filing requirements of
the Securities and Exchange Commission as set forth in such Rule as such Rule
may be amended from time to time and (b) make such additional filings of reports
with the Securities and Exchange Commission as will enable the holders to make
sales of Warrant Shares pursuant to such Rule.
2.8. Company's Indemnification. In the event of any
registration under the Securities Act of any Warrant Shares pursuant to this
Article II, the Company hereby agrees to execute an agreement with any
underwriter participating in the offering thereof containing such underwriter's
standard form representations and indemnification provisions and to indemnify
and hold harmless each holder disposing of Warrant Shares, each Person, if any,
who controls such holder within the meaning of the Securities Act and each other
Person (including each underwriter) who participates in the offering of Warrant
Shares, against any losses, claims, damages or liabilities, joint or several, to
which such holder, controlling person or participating person may become subject
under the Securities Act or otherwise, insofar as such losses, claims, damages
or liabilities (or proceedings in respect thereof) arise out of or are based
upon any untrue statement or alleged untrue statement of any material fact
contained in any registration statement under which the Warrant Shares are
registered under the Securities Act, in any preliminary prospectus or final
prospectus contained therein, or in any amendment or supplement thereto, or
arise out of or are based upon the omission or alleged omission to state therein
a material fact required to be stated therein or necessary to make the
statements therein not misleading, and will reimburse each such holder,
controlling person and participating person for any legal or other expenses
reasonably incurred in connection with investigating or defending any such loss,
claim, damage, liability or proceeding; provided, however, that the Company will
not be liable in any case to any such holder, controlling person or
participating person to the extent that any loss, claim, damage or liability
arises out of or is based upon any untrue statement or alleged untrue statement
or omission or alleged omission made in a registration statement, preliminary or
final prospectus or amendment or supplement in reliance upon and in conformity
8
<PAGE> 9
with written information furnished to the Company by an instrument duly executed
by such holder or controlling or participating person, as the case may be,
specifically for use in the preparation thereof.
2.9. Indemnification by Holder. As a condition of the
Company's obligation under this Article II to effect any registration under the
Securities Act, there shall be delivered to the Company an agreement or
agreements duly executed by each holder for whom Warrant Shares are to be so
registered, whereby such holder agrees to indemnify and hold harmless the
Company, each person referred to in clause (1), (2) or (3) of Section 11(a) of
the Securities Act in respect of the registration statement and each other
person, if any, who controls the Company within the meaning of the Securities
Act, against any losses, claims, damages or liabilities, joint or several, to
which the Company, such person or such other controlling person may become
subject under the Securities Act or otherwise, but only to the extent that the
losses, claims, damages or liabilities (or proceedings in respect thereof) arise
out of or are based upon any untrue statement or alleged untrue statement of any
material fact contained in the registration statement under which the Warrant
Shares are to be registered under the Securities Act, in any preliminary
prospectus or final prospectus contained therein or in any amendment or
supplement thereto, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, which, in each case, is
made in or omitted from the registration statement, preliminary or final
prospectus or amendment or supplement in reliance upon and in conformity with
written information furnished to the Company by an instrument duly executed by
such holder specifically for use in the preparation thereof; provided, however,
that the indemnification obligations of each such holder shall be limited to the
total consideration received by such holder from the sale of Warrant Shares
pursuant to such registration.
2.10. If the indemnification provided for in Section 2.8 or
2.9 from the indemnifying party is unavailable to an indemnified party hereunder
in respect of any losses, claims, damages, liabilities or expenses referred to
therein, then the indemnifying party, in lieu of indemnifying such indemnified
party, shall contribute to the amount paid or payable by such indemnified party
as a result of such losses, claims, damages, liabilities or expenses in such
proportion as is appropriate to reflect the relative fault of the indemnifying
party and indemnified parties in connection with the actions which resulted in
such losses, claims, damages, liabilities or expenses, as well as any other
relevant equitable considerations. The relative fault of such indemnifying party
and indemnified parties shall be determined by reference to, among other things,
whether any action in question, including any untrue or alleged untrue statement
of a material fact or omission or alleged omission to state a material fact, has
been made by, or relates to information supplied by, such indemnifying party or
indemnified parties, and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such action. The amount paid
or payable by a party as a result of the losses, claims, damages, liabilities
and expenses referred to above shall be deemed to include any legal or other
fees or expenses reasonably incurred by such party in connection with any
investigation or proceeding.
9
<PAGE> 10
The parties hereto agree that it would not be just and
equitable if contribution pursuant to this Section 2.10 were determined by pro
rata allocation or by any other method of allocation which does not take account
of the equitable considerations referred to in the immediately preceding
paragraph. No person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Securities Act) shall be entitled to contribution from
any Person who was not guilty of such fraudulent misrepresentation.
2.11. Notification of and Participation in Actions. Promptly
after receipt by an indemnified party under this Article II of notice of
commencement of any action, the indemnified party will, if a claim in respect
thereof is to be made against any indemnifying party under this Article II,
notify the indemnifying party of the commencement thereof, but the omission so
to notify the indemnifying party will not relieve it from any liability unless
the indemnifying party can demonstrate that it has actually been prejudiced
thereby and will not relieve it from any liability which it may have to any
indemnified party otherwise than under this Article II. In case any such action
is brought against the holder of any Warrant Shares and it notifies an
indemnifying party of the commencement thereof, the indemnifying party will be
entitled to participate in and, to the extent that it may wish, jointly with any
other indemnifying party similarly notified, to assume the defense thereof, with
counsel satisfactory to said holder of Warrant Shares. In case any such action
is brought against the Company and it notifies an indemnifying party of the
commencement thereof, the indemnifying party will be entitled to participate in
and, to the extent that it may wish, jointly with any other indemnifying party
similarly notified, to assume the defense thereof, with counsel satisfactory to
the Company, and, after notice from the indemnifying party to the Company of its
election to assume the defense thereof, the indemnifying party will not be
liable to the Company under this Article II for any legal or other expenses
subsequently incurred by the Company, in connection with the defense thereof
other than reasonable costs of investigation. No indemnifying party, in the
defense of any such claim or litigation, shall, except with the consent of each
indemnified party, consent to entry of any judgment or enter into any settlement
which does not include as an unconditional term thereof the giving by the
claimant or plaintiff to such indemnified party of a release from all liability
in respect to such claim or litigation. The reimbursement required by this
Section 2.11 shall be made by periodic payments during the course of the
investigation or defense, as and when bills are received or expenses incurred.
10
<PAGE> 11
ARTICLE III
Benefits of Agreement
The obligations of the Company under this Agreement shall
inure to the benefit of, and be enforceable by, the Lenders and their respective
successors and assigns as holders from time to time of Warrants or Warrant
Shares.
ARTICLE IV
Miscellaneous
4.1. No Inconsistent Agreements. The Company will not, at any
time after the effective date of this Agreement, enter into, and is not now a
party to or otherwise bound by, any agreement or contract (whether written or
oral) with respect to any of its securities which is inconsistent in any respect
with the registration rights granted by the Company pursuant to this Agreement.
4.2. No Other Grant of Registration Rights. The Company will
not at any time grant to any other persons any rights with respect to the
registration of any securities of the Company which have priority or are
inconsistent with the registration rights granted by the Company pursuant to
this Agreement.
4.3. Notices. Notices and other communications provided for
herein shall be in writing and shall be given in the manner and with the effect
provided in the Warrants. Such notices and communications shall be addressed:
(a) if to a holder of Warrants, to its address as shown on the
books maintained by the Warrant Agency (as defined in the Warrants),
unless such holder shall notify the Company and the Warrant Agency that
notices and communications should be sent to a different address (or
telex number), in which case such notices and communications shall be
sent to the address (or telex number) specified by such holder; and
(b) if to a holder of Warrant Shares, to its address as shown
on the stock transfer records of the Company, unless such holder shall
notify the Company that notices and communications should be sent to a
different address (or telex number), in which case such notices and
communications shall be sent to the address (or telex number) specified
by such holder.
11
<PAGE> 12
4.4. Waivers; Amendments. No failure or delay of any holder of
Warrants or Warrant Shares in exercising any power or right hereunder shall
operate as a waiver thereof, nor shall any single or partial exercise of any
such right or power, or any abandonment or discontinuance of steps to enforce
such a right or power, preclude any other or further exercise thereof or the
exercise of any other right or power. The rights and remedies of such holder are
cumulative and not exclusive of any rights or remedies which it would otherwise
have. The provisions of this Agreement may be amended, modified or waived only
by an agreement in writing signed by the party against whom enforcement thereof
is sought or the predecessor in interest of such party and any such waiver shall
be effective only in the specific instance and for the purpose for which given.
Notwithstanding the foregoing, no amendment, modification or waiver of any
provision of this Agreement shall be effective against a holder of Warrants or
Warrant Shares unless (a) agreed to in writing by such holder or (b) agreed to
in writing by such holder's predecessor in interest and notation thereof is set
forth on the certificate evidencing such holder's Warrants or Warrant Shares as
the case may be. No notice or demand on the Company in any case shall entitle
the Company to any other or further notice or demand in similar or other
circumstances.
4.5. Governing Law. This Agreement shall be construed in
accordance with and governed by the laws of the State of New York.
4.6. Survival of Agreements; Representations and Warranties,
etc. All warranties, representations and covenants made by the Company herein or
in the Warrants or in any certificate or other instrument delivered by or on
behalf of it in connection with this Agreement, the Warrants or the Warrant
Shares shall be considered to have been relied upon by the holders of Warrants
and Warrant Shares and shall survive the issuance and delivery of the Warrants
and Warrant Shares regardless of any investigation made by such holder, and
shall continue in full force and effect so long as this Agreement is in effect.
All statements in any such certificate or other instrument shall constitute
representations and warranties hereunder.
4.7. Covenants To Bind Successors and Assigns. All the
covenants, stipulations, promises and agreements in this Agreement contained by
or on behalf of the Company shall bind its successors and assigns, whether so
expressed or not.
4.8. Severability. In case any one or more of the provisions
contained in this Agreement, the Warrants shall be invalid, illegal or
unenforceable in any respect, the validity, legality and enforceability of the
remaining provisions contained herein and therein 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 provisions with
valid provisions the economic effect of which comes as close as possible to that
of the invalid, illegal or unenforceable provisions.
12
<PAGE> 13
4.9. Section Headings. The section headings used herein are
for convenience of reference only, are not part of this Agreement and are not to
affect the construction of or be taken into consideration in interpreting this
Agreement.
IN WITNESS WHEREOF, each party hereto has caused this Agreement to be
duly executed, all as of the day and year above written.
LET'S TALK CELLULAR &
WIRELESS, INC.
By /s/ Daniel Cammarata
---------------------------------------------
Name: Daniel Cammarata
Title: CFO
THE CHASE MANHATTAN BANK
By /s/ Paula C. Cummings
---------------------------------------------
Name: Paula C. Cummings
Title: Vice President
IBJ WHITEHALL BANK & TRUST COMPANY
By /s/ Patricia G. McCormack
---------------------------------------------
Name: Patricia G. McCormack
Title: Director
MERRILL LYNCH BUSINESS FINANCIAL SERVICES INC.
By /s/ Hugh E. Johnson
---------------------------------------------
Name: Hugh E. Johnson
Title: Vice President
NATIONSBANK, N.A.
By /s/ Oscar A. Bruni, Jr.
---------------------------------------------
Name: Oscar A. Bruni, Jr.
Title: Vice President
13
<PAGE> 1
WAIVER AND AMENDMENT NO. 5
TO
LOAN AND SECURITY AGREEMENT
THIS WAIVER AND AMENDMENT NO. 5 ("Amendment") is entered into as of
October 22, 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 Sosebee 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
----------
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. WAIVER. Subject to satisfaction of the conditions precedent set
forth in Section 4 below, Agent and Lenders hereby waives the Event of Default
which has occurred as a result of Borrowers' non-compliance with (a) Section
7.19 of the Loan Agreement at the end of the fiscal quarter ended July 31, 1999
with respect to the immediately preceding four fiscal quarter period to the
extent the non-compliance with such Section occurred prior to such period and
(b) Section 7.21 of the Loan Agreement at the end of the fiscal quarter ended
July 31, 1999 with respect to the immediately preceding four fiscal quarter
period to the extent the non-compliance with such Section occurred prior to such
period.
<PAGE> 2
3. AMENDMENTS TO LOAN AGREEMENT. Subject to satisfaction of the
conditions precedent set forth in Section 4 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. 5" shall mean Amendment No. 5 to this Agreement
dated as of October 22, 1999.
"AMENDMENT NO. 5 EFFECTIVE DATE" shall mean the date on which
all of the conditions precedent contained in Section 4 of Amendment No.
5 shall have been satisfied.
"CUMULATIVE COMMITMENT PERCENTAGE" of any Lender shall mean
the percentage set forth below such Lender's name on the signature page
of Amendment No. 5 as same may be adjusted upon any assignment by a
Lender pursuant to Section 16.3(b) hereof.
(ii) the definition of "Applicable Margin" is amended
in its entirety to provide as follows:
"APPLICABLE MARGIN" shall mean (I) from the Amendment No. 5
Effective Date through April 30, 2000 (a) 1.75% with respect to
Domestic Rate Loans and (b) 3.50% with respect to Eurodollar Rate
Loans, and (II) thereafter for any fiscal quarter commencing with the
fiscal quarter ending July 31, 2000 shall be determined by the Leverage
Ratio at the end of such fiscal quarter with respect to the four fiscal
quarters then ended and shall be subject to adjustment from time to
time as set forth in Section 3.1. If any Borrower shall complete a
Permitted Acquisition, the EBITDA of such Permitted Acquisition shall
be included on a proforma basis for the four (4) fiscal quarters then
being tested when calculating the Leverage Ratio for the purposes of
determining the Applicable Margin. The Applicable Margin with respect
to Eurodollar Rate Loans and Domestic Rate Loans, as the case may be,
shall be the percentage set forth below as corresponds to the
applicable ratio set forth below:
<TABLE>
<CAPTION>
Domestic Eurodollar
Rate Margin Rate Margin
----------- -----------
<S> <C> <C>
LEVERAGE RATIO
Equal to or greater than 2.50 to 1.00 1.75% 3.50%
Equal to or greater than 2.25 to 1.00 but 1.50% 3.25%
less than or equal to 2.49 or 1.00
Equal to or greater than 2.00 to 1.00 but 1.25% 3.00%
less than or equal to 2.24 to 1.00
Equal to or greater than 1.75 to 1.00 but 1.00% 2.75%
less than or equal to 1.99 to 1.00
</TABLE>
2
<PAGE> 3
<TABLE>
<CAPTION>
<S> <C> <C>
Equal to or greater than 1.50 to 1.00 but .75% 2.50%
less than 1.74 to 1.00
Equal to or greater than 1.25 to 1.00 but .50% 2.25%
less than 1.49 to 1.00
Less than 1.25 to1.00 .25% 2.00%
</TABLE>
(iii) the definition of "Commitment Percentage" is
hereby amended in its entirety to provide as follows:
"COMMITMENT PERCENTAGE" of any Lender shall mean (i) with
respect to the Term Loan, 25% for each Lender, (ii) with respect to
Advances other than the Term Loan (x) with respect to the first
$13,500,000 of such Advances which are outstanding at any time or from
time to time, 25% for each Lender, and (y) with respect to such
Advances which are in excess of $13,500,000 which are outstanding from
time to time, 0% as to NationsBank, N.A., and 33.33% for each other
Lender, in each case as same may be adjusted upon any assignment by a
Lender pursuant to Section 16.3(b) hereof.
(iv) the definition of "Maximum Revolving Advance
Amount" is hereby amended by deleting "$13,500,000" and inserting the following
in its place and stead: "(a) $16,500,000 from the Amendment No. 5 Effective Date
through and including October 29, 1999 and (b) $13,500,000 from and after
October 30, 1999."
(v) the definition of "Required Lenders" is hereby
amended by (a) deleting "Commitment Percentages" wherever it appears and
inserting "Cumulative Commitment Percentages" in its place and stead and (b)
deleting "fifty one (51%) percent" and inserting "sixty six and two thirds (66
2/3%) percent in its place and stead.
(b) Section 2.1(y)(ii)(B) of the Loan Agreement is hereby
amended in its entirety to provide as follows:
"(B) (a) $10,000,000 for the period beginning on
September 30, 1999 and ending on December 30, 1999, (b) $9,000,000 for
the period beginning December 31, 1999 and ending on January 30, 2000,
(c) $8,000,000 for the period beginning January 31, 2000 and ending on
February 27, 2000, (d) $7,000,00 for the period beginning February 28,
2000 and ending on March 30, 2000 and (e) $6,000,000 from and after
March 31, 2000."
(c) A new Section 2.9(f) is hereby added to the Loan Agreement
which provides as follows:
"(f) Anything in this Agreement to the contrary
notwithstanding, repayments of Revolving Advances shall be deemed
applied first to Revolving Advances which are in excess of $13,500,000
and second to the balance of Revolving Advances which are outstanding at
the time of any such repayment.
3
<PAGE> 4
(d) New Sections 2.10(a)(iv) and (v) are hereby added to the
Loan Agreement which provides as follows:
"(iv) In the event that LTC shall enter into an
agreement with a potential investor ("Investor") pursuant to which
Investor (i) purchases up to $7,500,000 of Capital Stock of LTC for a
cash purchase price of $7,500,000 (the "Investment") and /or (ii)
obtains an option to purchase all or substantially all of the issued
and outstanding shares of Capital Stock of LTC owned by HIG in
consideration of the payment of monies to LTC and/or HIG (the "Option
Price"), Borrowers shall repay the Advances in an amount equal to the
lesser of (x) the amount of the Investment and/or the Option Payment
and (y) $3,000,000, such repayments to be made promptly but in no event
more than one (1) Business Day following receipt of the Investment
and/or Option Payment from Investor, and until the date of payment,
such portion of the Investment and/or Option Payment shall be held in
trust for Agent. Such repayment shall be applied to the outstanding
Revolving Advances and the Maximum Revolving Advance Amount shall be
automatically and permanently reduced by an amount equal to such
repayment."
"(v) In the event that LTC shall sell, assign or
transfer all or substantially all of the shares of common stock of
[INSERT NAME] owned by LTC, Borrowers shall repay the Advances in an
amount equal to the Net Proceeds of the sale of such stock, such
repayments to be made promptly but in no event more than one (1)
Business Day following receipt of such Net Proceeds and until the date
of payment, the Net Proceeds shall be held in trust for Agent. Such
repayment shall be applied to the outstanding Revolving Advances and
the Maximum Revolving Advances Amount shall be automatically and
permanently reduced by an amount equal to such repayment."
(e) Section 3.1 is hereby amended by deleting "July 31, 1998"
and inserting "July 31, 2000" in its place and stead.
(f) Section 3.2 is hereby amended by deleting "three-eighths
of one percent (.375%") and inserting "one half of one percent (.50%)" in its
place and stead.
(g) A new Section 6.13 is hereby added to the Loan Agreement
and shall read as follows:
"6.13 WARRANTS AND NOTES. On or before October 29,
1999, Borrowers shall deliver the following to Agent: (a) Warrants issued to
Agent in form and substance satisfying to Agent representing Agent's right to
purchase Capital Stock of LTC in an amount designated in the Term Sheet dated as
of October ___, 1999 entered into between Borrowers and Agent, which warrants
shall contain registration rights, put rights, tag-a-long rights, anti-dilution
provisions, and such other terms and conditions as shall be acceptable to Agent
including, without limitation, the right to cashless exercise and (b) duly
executed amended and restated Revolving Credit Notes for each Lender, in an
amount equal to the applicable each Lender's Commitment Percentage of Revolving
Advances."
(h) Each Lender's Commitment Percentage shall be amended to
read as set forth below its signature to Amendment No. 5.
4
<PAGE> 5
4. 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 amendment fee for benefit of all Lenders in
the amount of $163,750, (iii) a non-refundable structuring fee for the benefit
of all Lenders other than NationsBank, N.A. of $75,000, (iv) payment of all fees
specified in the Fee Letter dated this date, among Borrowers and Agent, in
accordance with term sheets, (v) an Inducement Agreement duly executed by HIG in
form and substance satisfactory to Agent evidencing HIG's obligation to make a
cash capital contribution to LTC on or before March 1, 2000 and (vi) 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.
5. REPRESENTATIONS AND WARRANTIES. Borrowers hereby represent and
warrant as follows:
(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.
6. 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.
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.
5
<PAGE> 6
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.
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/ Daniel Cammarata
------------------------------------
Name: Daniel Cammarata
Title: CFO
TELEPHONE WAREHOUSE, INC.
By: /s/ Daniel Cammarata
------------------------------------
Name: Daniel Cammarata
Title: CFO
NATIONAL CELLULAR INCORPORATED
By: /s/ Daniel Cammarata
------------------------------------
Name: Daniel Cammarata
Title: CFO
CELLULAR USA
By: /s/ Daniel Cammarata
------------------------------------
Name: Daniel Cammarata
Title: CFO
(Signatures Continued On Following Page)
6
<PAGE> 7
SOSEBEE ENTERPRISES, INC.
By: /s/ Daniel Cammarata
-------------------------------------
Name: Daniel Cammarata
Title: CFO
THE CHASE MANHATTAN BANK, as Agent and a
Lender
By: /s/ Paula C. Cummings
-------------------------------------
Name: Paula C. Cummings
Title: Vice President
Cumulative Commitment Percentage: 25.58%
NATIONSBANK, N.A., Lender
By: /s/ Oscar A. Bruni
-------------------------------------
Name: Oscar A. Bruni
Title: Vice President
Cumulative Commitment Percentage: 23.26%
IBJ WHITEHALL BANK & TRUST COMPANY, Lender
By: /s/ Patricia G. McCormack
-------------------------------------
Name: Patricia G. McCormack
Title: Director
Cumulative Commitment Percentage: 25.58%
MERRILL LYNCH BUSINESS FINANCIAL
SERVICES, Lender
By: /s/ Hugh E. Johnson
-------------------------------------
Name: Hugh E. Johnson
Title: Vice President
Cumulative Commitment Percentage: 25.58%
7
<PAGE> 1
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 Sosebee 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
----------
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.
<PAGE> 2
"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 February 27, 2000, (d) $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).
2
<PAGE> 3
(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 LetsTalk.com 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:
3
<PAGE> 4
(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.
4
<PAGE> 5
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/ Daniel Cammarata
----------------------------------
Name: Daniel Cammarata
Title: CFO
TELEPHONE WAREHOUSE, INC.
By: /s/ Daniel Cammarata
----------------------------------
Name: Daniel Cammarata
Title: CFO
NATIONAL CELLULAR INCORPORATED
By: /s/ Daniel Cammarata
----------------------------------
Name: Daniel Cammarata
Title: CFO
CELLULAR USA
By: /s/ Daniel Cammarata
----------------------------------
Name: Daniel Cammarata
Title: CFO
SOSEBEE ENTERPRISES, INC.
By: /s/ Daniel Cammarata
----------------------------------
Name: Daniel Cammarata
Title: CFO
(Signatures Continued On Following Page)
5
<PAGE> 6
THE CHASE MANHATTAN BANK, as Agent and a
Lender
By: /s/ Paula C. Cummings
----------------------------------
Name: Paula C. Cummings
Title: Vice President
Commitment Percentage: 25%
NATIONSBANK, N.A., Lender
By: /s/ Oscar A. Bruni, Jr.
----------------------------------
Name: Oscar A. Bruni, Jr.
Title: Vice President
Commitment Percentage: 25%
IBJ WHITEHALL BANK & TRUST COMPANY, Lender
By: /s/ Patricia G. McCormack
----------------------------------
Name: Patricia G. McCormack
Title: Director
Commitment Percentage: 25%
MERRILL LYNCH BUSINESS FINANCIAL
SERVICES, Lender
By: /s/ Hugh E. Johnson
----------------------------------
Name: Hugh E. Johnson
Title: Vice President
Commitment Percentage: 25%
6
<PAGE> 1
LET'S TALK CELLULAR & WIRELESS, INC.
SUMMARY OF TERMS AND CONDITIONS
NEW FACILITY
OCTOBER 28,1999
<TABLE>
<CAPTION>
<S> <C>
BORROWERS: Let's Talk Cellular & Wireless, Inc.
Telephone Warehouse, Inc.
National Cellular, incorporated
Cellular USA
Sosebee Enterprises, Inc.
LENDERS: The Chase Manhattan Bank "Chase")
IBJ Whitehall
Merrill Lynch
Nationsbank
AGENT: Chase will act as sole agent (the "Agent") for the Lenders.
NEW FACILITY: Up to a $10,000,000 increase in the Revolving Credit Commitment
PURPOSE: Purchase inventory for the Holiday season.
MATURITY: The Revolving Credit Commitment shall be reduced as follows:
December 31, 1999 to $22,000,000
January 31, 2000 to $20,000.000
February 28, 2000 to $18,000,000
March 31, 2000 to $13.500,000
FEES AND
INTEREST RATES: As set forth in the attached Schedule I.
BORROWING BASE: The sum of (1) up to 85% of eligible
accounts receivable, (ii) 50% of
eligible inventory with an inventory cap
as follows:
September 30, 1999 $10,000,000 until December 30, 1999
December 31, 1999 $9,000,000 until January 30, 2000
January 31, 2000 $8,000,000 until February 27, 2000
February 28, 2000 $7,000,000 until March 30, 2000
March 31, 1000 $6,000,000 thereafter
and (iii) up to $3,000,000 for the period commencing November 2,
1999 and ending December 1, 1999,
</TABLE>
<PAGE> 2
10/29/99 Page 2
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
<S> <C>
COLLATERAL: As per the Credit Agreement, including the delivery of all shares
of LetsTalk.com, Inc. stock held by LTC to the Agent.
FINANCIAL
COVENANTS: A waiver for the fiscal year ended 7/31/99 and an amendment for
fiscal 2000 to the financial covenants:
7.19 Fixed Charge Coverage Ratio:
October 31, 1999 0.84:1.00 (projection)
January 31, 2000 0.91:1.00 ( projection)
April 30, 2000 0.99:1.00 (projection)
July 31, 2000 1.16:1.00 (projection)
7.20 Leverage Ratio:
October 31, 1999 4.10:1.00 (projection)
January 31, 2000 3.50:1.00 (projection)
April 30, 2000 2.50:1.00 (projection)
July 31, 2000 2.00:1,00 (projection)
</TABLE>
<PAGE> 3
10/29/99 Page 3
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
<S> <C>
SUBSEQUENT
CONDITION: Upon the receipt of funds from an outside investor, up to $5,000,000
of the proceeds would be used to reduce the Revolver Commitment
and Outstanding Revolver Advances to the Lenders.
GUARANTEE: HIG Capital, LLC would agree to guarantee $1,000,000 of Let's Talk
Cellular Warehouse Inc.'s Indebtedness until all or substantially all
of HIG's interest in the Company are sold.
SUBORDINATED DEBT: The documentation for the HIG debt previously provided to purchase
Accounts Receivable would be revised to reflect that no sums due and
owing with respect thereto to HIG shall be paid until all Obligations
under the Credit Agreement have been paid in full.
AGREED TO BY:
/s/ Douglas Berman
------------------------------------------
HIG Capital, LLC
/s/ Paula C. Cummings
------------------------------------------
The Chase Manhattan Bank
/s/ Patricia G. McCormack
------------------------------------------
IBJ Whitehall Bank & Trust Company
/s/ Daniel J. McHugh
------------------------------------------
Merrill, Lynch Business Financial Services
/s/ Larry L. Ross
------------------------------------------
NationsBank, N.A.
/s/ Daniel Cammarata
------------------------------------------
Let's Talk Cellular & Wireless, Inc.
/s/ Daniel Cammarata
------------------------------------------
Telephone Warehouse, Inc.
/s/ Daniel Cammarata
------------------------------------------
National Cellular, Incorporated
/s/ Daniel Cammarata
------------------------------------------
Sosebee Enterprises, Inc.
</TABLE>
<PAGE> 4
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- --------------------------------------------------------------------------------
SCHEDULE I
FEES AND INTEREST RATES
<TABLE>
<CAPTION>
<S> <C>
I. AMENDMENT TO FINANCIAL COVENANTS
FEE: $75,000
II. NEW FACILITY
STRUCTURING FEE: 2.50% of the New Revolving Credit Commitment, payable at closing.
ARRANGEMENT FEE: As per the Fee Letter dated October 25, 1999
COMMITMENT FEE: 0.50% of the unused portion of the Revolving Credit, payable
quarterly commencing from the closing date.
WARRANTS: 6.00% of the Company, with a nominal exercise price. Should the
Company reduce the Senior indebtedness by $5,000,000 within four
weeks of the Closing Date of Amendment No, 6, then the warrants
shall decline to 5.00% of the Company
INTEREST RATE: Please add two new pricing lines to the grid, as follows:
Leverage Domestic Rate Eurodollar Rate
-------- ------------- ---------------
Equal to or
Greater than
2.25 to 1.00 1.50% 3.25%
Equal to or
Greater than
2.50 to 1.00 1.75% 3.50%
The Applicable Margin shall be ABR+1.75% or Adjusted LIBOR+3.50%
until the delivery of financial statements for the quarter ended
April 30, 2000.
After April 30, 2000, the Interest Rate shall decrease or increase
based on a grid subject to compliance with the Credit Agreement and
audited financial statements.
"ABR" shall mean the higher of A) Chase's Prime Rate or B) the
Federal Funds Effective Rate plus 1/2 of 1% or C) the Base CD rate
plus 1%. Adjusted LIBOR is the one, two, three or six month London
Interbank Offered Rate adjusted at all times for statutory reserves.
</TABLE>
<PAGE> 5
10/29/99 Page 5
- --------------------------------------------------------------------------------
AGREED TO BY:
/s/ Douglas Berman
------------------------------------------
HIG Capital, LLC
/s/ Paula C. Cummings
------------------------------------------
The Chase Manhattan Bank
/s/ Patricia G. McCormack
------------------------------------------
IBJ Whitehall Bank & Trust Company
/s/ Daniel J. McHugh
------------------------------------------
Merrill, Lynch Business Financial Services
/s/ Larry L. Ross
------------------------------------------
NationsBank, N.A.
/s/ Daniel Cammarata
------------------------------------------
Let's Talk Cellular & Wireless, Inc.
/s/ Daniel Cammarata
------------------------------------------
Telephone Warehouse, Inc.
/s/ Daniel Cammarata
------------------------------------------
Natilonal Cellular, Incorporated
/s/ Daniel Cammarata
------------------------------------------
Sosebee Enterprises, Inc.
<PAGE> 1
GUARANTY
New York, New York November 2, 1999
FOR VALUE RECEIVED, and in consideration of loans made or to be made or
credit otherwise extended or to be extended by The Chase Manhattan Bank
("Chase"), each of the financial institutions (together with Chase collectively,
"Lenders") named in or which hereafter become a party to the Loan Agreement (as
hereinafter defined) and Chase as agent for Lenders (in such capacity "Agent")
to or for the account of Let's Talk Cellular & Wireless, Inc., Telephone
Warehouse, Inc., National Cellular, Incorporated, Cellular USA and Sosebee
Enterprises, Inc. (each a "Borrower" and collectively, the "Borrowers") from
time to time and at any time and for other good and valuable consideration and
to induce Agent and Lenders, to make such loans or extensions of credit and to
make or grant such renewals, extensions, releases of collateral or
relinquishments of legal rights as Agent and Lenders may deem advisable, the
undersigned unconditionally guaranties to Agent for its own benefit and for the
ratable benefit of Lenders, their successors, and permitted assigns the prompt
payment when due (whether by acceleration or otherwise) of all present and
future obligations and liabilities of any and all kinds of Borrowers to Agent or
Lenders and of all instruments of any nature evidencing or relating to any such
obligations and liabilities upon which any Borrower is or may become liable to
Agent or Lenders arising under, out of, or in connection with that certain Loan
and Security Agreement by and among Borrowers, Lenders and Agent (as amended,
supplemented, modified or restated from time to time, the "Loan Agreement") or
any documents, instruments or agreements relating to or executed in connection
with the Loan Agreement or any documents, instruments or agreements referred to
therein (together with the Loan Agreement, the "Loan Documents") (all of which
are herein collectively referred to as the "Obligations"), and irrespective of
any instrument evidencing any of the Obligations or of any collateral therefor
or of the existence or extent of such collateral, and irrespective of the
allowability, allowance or disallowance of any or all of the Obligations in any
case commenced by or against any Borrower under Title 11, United States Code,
including, without limitation, obligations or indebtedness of any Borrower for
post-petition interest, fees, costs and charges that would have accrued or been
added to any Borrower's Obligations to Agent and the Lenders but for the
commencement of such case. Terms defined in the Loan Agreement shall have the
same meanings herein, unless otherwise herein expressly provided. In furtherance
of the foregoing, the undersigned hereby agrees as follows:
1. NO IMPAIRMENT. Agent and Lenders may at any time and from time to
time, either before or after the maturity thereof, without notice to or further
consent of the undersigned, extend the time of payment of, exchange or surrender
any collateral for, renew or extend any of the Obligations or increase or
decrease the interest rate thereon, and may also make any agreement with any
Borrower or with any other party to or person liable on any of the Obligations,
or interested therein, for the extension, renewal, payment, compromise,
discharge or release thereof, in whole or in part, or for any modification of
the terms thereof or of any agreement between or among Agent, Lenders and any
Borrower or any such other party or person, or make any election of rights Agent
and Lenders may deem desirable under the United States Bankruptcy Code, as
amended, or any other federal or state bankruptcy, reorganization, moratorium or
insolvency law relating to or affecting the enforcement of creditors' rights
generally (any of the foregoing, an "Insolvency Law") without in any way
impairing or affecting this Guaranty. This instrument shall be effective
regardless of the subsequent incorporation, merger or consolidation of any
Borrower, or any change in the composition, nature,
<PAGE> 2
personnel or location of any Borrower and shall extend to any successor entity
to any Borrower, including a debtor in possession or the like under any
Insolvency Law.
2. GUARANTY ABSOLUTE. The undersigned guarantees that the Obligations
will be paid strictly in accordance with the terms of the Loan Agreement and/or
any other document, instrument or agreement creating or evidencing the
Obligations, regardless of any law, regulation or order now or hereafter in
effect in any jurisdiction affecting any of such terms or the rights of any
Borrower with respect thereto. The undersigned hereby knowingly accepts the full
range of risk encompassed within a contract of "continuing guaranty" which risk
includes the possibility that one or more Borrowers will contract additional
indebtedness for which the undersigned may be liable hereunder after such
Borrower's financial condition or ability to pay its lawful debts when they fall
due has deteriorated, whether or not such Borrower has properly authorized
incurring such additional indebtedness. The undersigned acknowledges that (i) no
oral representations, including any representations to extend credit or provide
other financial accommodations to any Borrower, have been made by Agent or any
Lender to induce the undersigned to enter into this Guaranty and (ii) any
extension of credit to any Borrower shall be governed solely by the provisions
of the Loan Agreement. The liability of the undersigned under this Guaranty
shall be absolute and unconditional, in accordance with its terms, and shall
remain in full force and effect without regard to, and shall not be released,
suspended, discharged, terminated or otherwise affected by, any circumstance or
occurrence whatsoever, including, without limitation: (a) any waiver,
indulgence, renewal, extension, amendment or modification of or addition,
consent or supplement to or deletion from or any other action or inaction under
or in respect of the Loan Documents or any other instruments or agreements
relating to the Obligations or any assignment or transfer of any thereof; (b)
any assignment or transfer of any Loan Document or other documents, instruments
or agreements relating to the Obligations; (c) any furnishing of any additional
security to Agent for the ratable benefit of the Lenders or its assignees or any
acceptance thereof or any release of any security by Agent or its assignees; (d)
any limitation on any party's liability or obligation under the Loan Documents
or any other documents, instruments or agreements relating to the Obligations;
(e) any bankruptcy, insolvency, reorganization, composition, adjustment,
dissolution, liquidation or other like proceeding relating to any Borrower, or
any action taken with respect to this Guaranty by any trustee or receiver, or by
any court, in any such proceeding, whether or not the undersigned shall have
notice or knowledge of any of the foregoing; (f) any exchange, release or
non-perfection of any collateral, or any release, or amendment or waiver of or
consent to departure from any guaranty or security, for all or any of the
Obligations; or (g) any other circumstance which might otherwise constitute a
defense available to, or a discharge of, the undersigned, subject to Section 9
hereof. Any amounts due from the undersigned to Agent or any Lender shall bear
interest until such amounts are paid in full at the highest rate then applicable
to the Obligations of Borrowers to Lenders under the Loan Agreement. Obligations
include post-petition interest whether or not allowed or allowable.
3. WAIVERS. (a) This Guaranty is a guaranty of payment and not of
collection. Neither Agent nor any Lender shall be under any obligation to
institute suit, exercise rights or remedies or take any other action against any
Borrower or any other person liable with respect to any of the Obligations or
resort to any collateral security held by it to secure any of the Obligations as
a condition precedent to the undersigned being obligated to perform as agreed
herein and the undersigned hereby waives any and all rights which it may have by
statute or otherwise which would require Agent or any Lender to do any of the
foregoing. The undersigned further consents and agrees that neither Agent nor
Lenders shall be under any obligation to marshal any assets in favor of the
undersigned, or against or in payment of any or all of the Obligations.
2
<PAGE> 3
(b) The undersigned further waives (i) notice of the
acceptance of this Guaranty, of the making of any such loans or extensions of
credit, and of all notices and demands of any kind to which the undersigned may
be entitled, including, without limitation, notice of adverse change in any
Borrower's financial condition or of any other fact which might materially
increase the risk of the undersigned subject to this Agreement; and (ii)
presentment to or demand of payment from anyone whomsoever liable upon any of
the Obligations, protest, notices of presentment, non-payment or protest and
notice of any sale of collateral security or any default of any sort.
(c) Notwithstanding any payment or payments made by the
undersigned hereunder, or any setoff or application of funds of the undersigned
by Agent or any Lender, the undersigned shall not be entitled to be subrogated
to any of the rights of Agent or any Lender against any Borrower or against any
collateral or guarantee or right of offset held by Agent or any Lender for the
payment of the Obligations, nor shall the undersigned seek or be entitled to
seek any contribution or reimbursement from any Borrower in respect of payments
made by the undersigned hereunder, until all amounts owing to Agent and each
Lender by Borrowers on account of the Obligations are paid in full and the Loan
Agreement has been terminated. If, notwithstanding the foregoing, any amount
shall be paid to the undersigned on account of such subrogation rights at any
time when all of the Obligations shall not have been paid in full and the Loan
Agreement shall not have been terminated, such amount shall be held by the
undersigned in trust for Agent and Lenders, segregated from other funds of the
undersigned, and shall forthwith upon, and in any event within two (2) business
days of, receipt by the undersigned, be turned over to Agent for the ratable
benefit of the Lenders in the exact form received by the undersigned (duly
endorsed by the undersigned to Agent, if required), to be applied against the
Obligations, whether matured or unmatured, in such order as Agent and Lenders
may determine, subject to the provisions of the Loan Agreement. [Any and all
present and future debts and obligations of Borrowers to any of the undersigned
are hereby subordinated to the full payment and performance of, all present and
future debts and obligations of Borrowers to Agent and Lenders.
4. INTENTIONALLY OMITTED.
5. REPRESENTATIONS AND WARRANTIES. The undersigned hereby represents
and warrants (all of which representations and warranties shall survive until
all Obligations are indefeasibly satisfied in full and there remain no
outstanding commitments under the Loan Agreement), that:
(a) STATUS. The undersigned is a limited liability company
duly organized, validly existing and in good standing under the laws of
the State of Delaware and has full power, authority and legal right to
own its property and assets and to transact the business in which it is
engaged.
(b) AUTHORITY AND EXECUTION. The undersigned has full power,
authority and legal right to execute and deliver, and to perform its
obligations under, this Guaranty and has taken all necessary corporate
and legal action to authorize the execution, delivery and performance
of this Guaranty.
(c) LEGAL, VALID AND BINDING CHARACTER. This Guaranty
constitutes the legal, valid and binding obligation of the undersigned
enforceable in accordance with its terms, except as enforceability may
be limited by applicable Insolvency Law.
3
<PAGE> 4
(d) VIOLATIONS. The execution, delivery and performance of
this Guaranty will not violate any material requirement of law
applicable to the undersigned or any material contract, agreement or
instrument to which the undersigned is a party or by which the
undersigned or its property is bound or result in the creation or
imposition of any mortgage, lien or other encumbrance other than to
Agent for the ratable benefit of Lenders on any of the property or
assets of the undersigned pursuant to the provisions of any of the
foregoing.
(e) CONSENTS OR APPROVALS. No consent of any other Person
(including, without limitation, any creditor of the undersigned) and no
consent, license, permit, approval or authorization of, exemption by,
notice or report to, or registration, filing or declaration with, any
governmental authority is required in connection with the execution,
delivery, performance, validity or enforceability of this Guaranty.
(f) LITIGATION. No litigation, arbitration, investigation or
administrative proceeding of or before any court, arbitrator or
governmental authority, bureau or agency is currently pending or, to
the best knowledge of the undersigned, threatened (i) with respect to
this Guaranty or any of the transactions contemplated by this Guaranty
or (ii) against or affecting the undersigned, or any of its property or
assets, which, if adversely determined, would have a material adverse
effect on the business, operations, assets or condition, financial or
otherwise, of the undersigned.
(g) FINANCIAL BENEFIT. The undersigned has derived or expects
to derive a financial or other advantage from each and every loan,
advance or extension of credit made under the Loan Agreement or other
Obligation incurred by Borrowers to Agent and Lenders.
The foregoing representations and warranties shall be deemed to have
been made by the undersigned on the date of each borrowing by Borrowers under
the Loan Agreement on and as of such date of such borrowing as though made
hereunder on and as of such date.
6. ACCELERATION. (a) If any breach of any covenant or condition or
other event of default shall occur and be continuing under this Guaranty or an
Event of Default shall occur under the Loan Agreement or the undersigned should
at any time become insolvent, or make a general assignment, or if a proceeding
in or under any Insolvency Law shall be filed or commenced by, or in respect of,
the undersigned, or if a notice of any lien, levy, or assessment is filed of
record with respect to any assets of the undersigned by the United States or any
department, agency, or instrumentality thereof, or if any taxes or debts owing
at any time or times hereafter to any one of them becomes a lien or encumbrance
upon any assets of the undersigned in Agent's or any Lender's possession, or
otherwise, any and all Obligations shall for purposes hereof, at Agent's or any
Lender's option, be deemed due and payable without notice notwithstanding that
any such Obligation is not then due and payable by any Borrower.
(b) The undersigned will promptly notify Agent of any default
by the undersigned in the performance or observance of any term or condition of
any agreement to which the undersigned is a party with respect to obligations of
the undersigned in excess of $1,000,000 if the effect of such default is to
cause, or permit the holder of any obligation under such agreement to cause,
such
4
<PAGE> 5
obligation to become due prior to its stated maturity and, if such an event
occurs, Agent shall have the right to accelerate the undersigned's obligations
hereunder.
7. PAYMENTS FROM GUARANTOR. Agent, on behalf of Lenders, in its sole
and absolute discretion, with or without notice to the undersigned, may apply on
account of the Obligations any payment from the undersigned or any other
guarantor, or amounts realized from any security for the Obligations, or may
deposit any and all such amounts realized in a non-interest bearing cash
collateral deposit account to be maintained as security for the Obligations.
8. COSTS. The undersigned shall pay on demand, all fees and expenses
(including reasonable expenses for legal services of every kind) relating or
incidental to the enforcement of the rights of Agent or any Lender hereunder or
under any of the Obligations.
9. NO TERMINATION. This is a continuing irrevocable guaranty and shall
remain in full force and effect and be binding upon the undersigned, and the
undersigned's successors and assigns, until all of the Obligations have been
paid in full and the Loan Agreement has been terminated. If any of the present
or future Obligations are guarantied by persons, partnerships or corporations in
addition to the undersigned, the death, release or discharge in whole or in part
or the bankruptcy, merger, consolidation, incorporation, liquidation or
dissolution of one or more of them shall not discharge or affect the liabilities
of the undersigned under this Guaranty.
10. RECAPTURE. Anything in this Guaranty to the contrary
notwithstanding, if Agent or any Lender receives any payment or payments on
account of the liabilities guarantied hereby, which payment or payments or any
part thereof are subsequently invalidated, declared to be fraudulent or
preferential, set aside and/or required to be repaid to a trustee, receiver, or
any other party under any Insolvency Law, common law or equitable doctrine, then
to the extent of any sum not finally retained by Agent or any such Lender, the
undersigned's obligations to Agent and Lenders shall be reinstated and this
Guaranty shall remain in full force and effect (or be reinstated) until payment
shall have been made to Agent and Lenders, which payment shall be due on demand.
11. BOOKS AND RECORDS. The books and records of Agent showing the
account among Agent, Lenders and any Borrower or Borrowers shall be admissible
in evidence in any action or proceeding, shall be binding upon the undersigned
for the purpose of establishing the items therein set forth and shall constitute
prima facie proof thereof.
12. NO WAIVER. No failure on the part of Agent to exercise, and no
delay in exercising, any right, remedy or power hereunder shall operate as a
waiver thereof, nor shall any single or partial exercise by Agent of any right,
remedy or power hereunder preclude any other or future exercise of any other
legal right, remedy or power. Each and every right, remedy and power hereby
granted to Agent or allowed it by law or other agreement shall be cumulative and
not exclusive of any other, and may be exercised by Agent at any time and from
time to time.
13. WAIVER OF JURY TRIAL. THE UNDERSIGNED DOES HEREBY KNOWINGLY,
VOLUNTARILY AND INTENTIONALLY WAIVE THE RIGHT TO TRIAL BY JURY IN ANY ACTION OR
PROCEEDING BASED ON OR WITH RESPECT TO THIS GUARANTY OR ANY OF THE TRANSACTIONS
CONTEMPLATED HEREBY OR RELATING OR INCIDENTAL HERETO. THE UNDERSIGNED DOES
HEREBY CERTIFY THAT NO
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REPRESENTATIVE OR AGENT OF AGENT OR ANY LENDER HAS REPRESENTED, EXPRESSLY OR
OTHERWISE, THAT AGENT OR ANY LENDER WOULD NOT, IN THE EVENT OF LITIGATION, SEEK
TO ENFORCE THIS WAIVER OF RIGHT TO JURY TRIAL PROVISION.
14. GOVERNING LAW; JURISDICTION; AMENDMENTS. THIS INSTRUMENT CANNOT BE
CHANGED OR TERMINATED ORALLY, AND SHALL BE GOVERNED, CONSTRUED AND INTERPRETED
AS TO VALIDITY, ENFORCEMENT AND IN ALL OTHER RESPECTS IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NEW YORK. THE UNDERSIGNED EXPRESSLY CONSENTS TO THE
JURISDICTION AND VENUE OF THE SUPREME COURT OF THE STATE OF NEW YORK, COUNTY OF
NEW YORK, AND OF THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF
NEW YORK FOR ALL PURPOSES IN CONNECTION HEREWITH. ANY JUDICIAL PROCEEDING BY THE
UNDERSIGNED AGAINST AGENT AND/OR ANY LENDER INVOLVING, DIRECTLY OR INDIRECTLY
ANY MATTER OR CLAIM IN ANY WAY ARISING OUT OF, RELATED TO OR CONNECTED HEREWITH
SHALL BE BROUGHT ONLY IN THE SUPREME COURT OF THE STATE OF NEW YORK, COUNTY OF
NEW YORK OR THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW
YORK. THE UNDERSIGNED FURTHER CONSENTS THAT ANY SUMMONS, SUBPOENA OR OTHER
PROCESS OR PAPERS (INCLUDING, WITHOUT LIMITATION, ANY NOTICE OR MOTION OR OTHER
APPLICATION TO EITHER OF THE AFOREMENTIONED COURTS OR A JUDGE THEREOF) OR ANY
NOTICE IN CONNECTION WITH ANY PROCEEDINGS HEREUNDER, MAY BE SERVED INSIDE OR
OUTSIDE OF THE STATE OF NEW YORK OR THE SOUTHERN DISTRICT OF NEW YORK BY
REGISTERED OR CERTIFIED MAIL, RETURN RECEIPT REQUESTED, OR BY PERSONAL SERVICE
PROVIDED A REASONABLE TIME FOR APPEARANCE IS PERMITTED, OR IN SUCH OTHER MANNER
AS MAY BE PERMISSIBLE UNDER THE RULES OF SAID COURTS. THE UNDERSIGNED WAIVES ANY
OBJECTION TO JURISDICTION AND VENUE OF ANY ACTION INSTITUTED HEREON AND SHALL
NOT ASSERT ANY DEFENSE BASED ON LACK OF JURISDICTION OR VENUE OR BASED UPON
FORUM NON CONVENIENS.
15. SEVERABILITY. To the extent permitted by applicable law, any
provision of this Guaranty which is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.
16. AMENDMENTS, WAIVERS. No amendment or waiver of any provision of
this Guaranty nor consent to any departure by the undersigned therefrom shall in
any event be effective unless the same shall be in writing executed by the
undersigned, Agent and Lenders.
17. NOTICE. All notices, requests and demands to or upon the
undersigned, shall be in writing or by telecopy and shall be deemed to have been
duly given or made (a) when delivered, if by hand, or (b) three (3) days after
being deposited in the mail, postage prepaid, if by mail, in each event, to the
address set forth beneath the signature of the undersigned.
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18. SUCCESSORS. Agent or any Lender may, from time to time, without
notice to the undersigned, sell, assign, transfer or otherwise dispose of all or
any part of the Obligations and/or rights under this Guaranty. Without limiting
the generality of the foregoing, Agent or any Lender may assign, or grant
participations to, one or more banks, financial institutions or other entities
all or any part of any of the Obligations as set forth in the Loan Agreement. In
each such event, Agent, any Lender, its Affiliates and each and every immediate
and successive purchaser, assignee, transferee or holder of all or any part of
the Obligations shall have the right to enforce this Guaranty, by legal action
or otherwise, for its own benefit as fully as if such purchaser, assignee,
transferee or holder were herein by name specifically given such right. Agent or
any Lender shall have an unimpaired right to enforce this Guaranty for its
benefit with respect to that portion of the Obligations which Agent or any such
Lender has not disposed of, sold, assigned, or otherwise transferred.
19. LIMITATIONS. Notwithstanding anything to the contrary contained
herein, the liability of the undersigned hereunder shall in no event exceed the
sum of $1,000,000 exclusive of all fees, costs and expenses relating to the
enforcement, collection and prosecution of this Guaranty. Such limitation shall
not be affected by nor shall anything herein be deemed to be a limitation of the
amount of credit that may be extended to Borrowers or the number of transactions
with Borrowers or the nature or amount of the Obligations that may be incurred
by Borrowers.
IN WITNESS WHEREOF, this Guaranty has been executed by the undersigned
as of the date first above written.
HIG CAPITAL, LLC
By: /s/ Douglas F. Berman
------------------------------------------
Name: Douglas F. Berman
Title: Managing Director
Address:
-----------------------------
-----------------------------
-----------------------------
Telephone:
-----------------------------
Telecopier:
----------------------------
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<PAGE> 1
SUBORDINATION AGREEMENT
Subordination Agreement (this "Agreement") dated as of November __,
1999 between The Chase Manhattan Bank, as agent for the Lenders (as defined
below) ("Senior Lender") and H.I.G. Capital LLC ("Subordinated Lender")
BACKGROUND
As an inducement for Senior Lender to continue to provide a credit
facility in favor of Let's Talk Cellular & Wireless, Inc., Telephone Warehouse,
Inc., National Cellular, Incorporated, Cellular USA and Sosebee Enterprises,
Inc. (collectively, the "Company"), Subordinated Lender has agreed to enter into
this subordination agreement to provide for the subordination of the
"Subordinated Indebtedness" to the "Senior Indebtedness".
AGREEMENTS
NOW, THEREFORE, for good and valuable consideration, receipt of which
is hereby acknowledged, the parties hereto agree as follows:
1. DEFINITIONS.
1.1. GENERAL TERMS. For purposes of this Agreement, the
following terms shall have the following meanings:
"AGREEMENTS" shall mean, collectively, the Senior Lending
Agreements and the Subordinated Lending Agreements.
"COMPANY" shall mean collectively, each Company and its
successors and assigns.
"CREDITORS" shall mean, collectively, Senior Lender and
Subordinated Lender and their respective heirs, administrators, executors,
successors and assigns.
"DISTRIBUTION" shall mean any payment, whether in cash, in
kind, securities or any other property, or security for any such Distribution.
"DOCUMENTS" shall have the meaning given to the term "Other
Documents" set forth in the Loan Agreement.
"EVENT" shall have the meaning set forth in Section 2.2 (c)
hereof.
"HOLDER OF SUBORDINATED INDEBTEDNESS" or "SUBORDINATED LENDER"
shall mean, H.I.G. Capital LLC, and any other Person(s) at any time or in any
manner acquiring any right or interest in any of the Subordinated Indebtedness.
<PAGE> 2
"LOAN AGREEMENT" shall mean the Loan and Security Agreement
dated April 2, 1998 between the Company and Senior Lender as the same may be
amended, supplemented, modified or restated from time to time.
"PERSON" shall mean an individual, a partnership, a
corporation (including a business trust), a joint stock company, a trust, an
unincorporated association, a joint venture, a limited liability company, a
limited liability partnership or other entity, or a government or any agency,
instrumentality or political subdivision thereof.
"SENIOR INDEBTEDNESS" shall mean all Obligations of any kind
owed by the Company to Senior Lender from time to time under or pursuant to any
of the Senior Lending Agreements including, without limitation, all principal,
interest (including all interest accruing after commencement of any case,
proceeding or other action relating to the bankruptcy, insolvency or
reorganization of the Company) accruing thereon, charges, expenses, fees and
other sums chargeable to the Company by the Senior Lender, and reimbursement,
indemnity or other obligations due and payable Senior Lender. Senior
Indebtedness shall continue to constitute Senior Indebtedness, notwithstanding
the fact that such Senior Indebtedness or any claim for such Senior Indebtedness
is subordinated, avoided or disallowed under the federal Bankruptcy Code or
other applicable law. Senior Indebtedness shall also include any indebtedness of
the Company incurred in connection with a refinancing of the Senior Indebtedness
under the Senior Lending Agreements if the terms and conditions of the
agreements, documents and instruments related to such refinancing, taken as a
whole, are not materially more onerous to the Holder of Subordinated
Indebtedness than those set forth in the Senior Lending Agreements, as in effect
on the date hereof.
"SENIOR LENDER" shall have the meaning set forth in the
introductory paragraph of this Agreement.
"SENIOR LENDING AGREEMENTS" shall mean, collectively, the Loan
Agreement and the Ancillary Agreements between the Company and Senior Lender
each as from time to time in effect.
"SUBORDINATED INDEBTEDNESS" shall mean all principal, interest
and other amounts payable or chargeable in connection with the Subordinated
Lending Agreements.
"SUBORDINATED LENDING AGREEMENTS" shall mean, collectively,
the Assignment of Accounts Receivable dated as of _____________, 1999 and all
agreements, documents and instruments now or at any time hereafter executed
and/or delivered by the Company or any other person to, with or in favor of the
Subordinated Lender in connection therewith or related thereto, as all of the
foregoing now exist or may hereafter be amended, modified, supplemented,
extended, renewed, restated or replaced.
1.2. OTHER TERMS. Capitalized terms not otherwise defined
herein shall have the meanings given to them in the Loan Agreement.
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1.3. CERTAIN MATTERS OF CONSTRUCTION. The terms "herein",
"hereof" and "hereunder" and other words of similar import refer to this
Agreement as a whole and not to any particular section, paragraph or
subdivision. Any pronoun used shall be deemed to cover all genders. Wherever
appropriate in the context, terms used herein in the singular also include the
plural and VICE VERSA. All references to statutes and related regulations shall
include any amendments of same and any successor statutes and regulations. All
references to any instruments or agreements, including, without limitation,
references to any of the Senior Lending Agreements or Subordinated Lending
Agreements shall include any and all modifications or amendments thereto and any
and all extensions or renewals thereof.
2. COVENANTS. The Company and each Holder of Subordinated Indebtedness
hereby covenant that until the Senior Indebtedness shall have been paid in full
and satisfied in cash and the Loan Agreement shall have been irrevocably
terminated, all in accordance with the terms of the Loan Agreement, each will
comply with such of the following provisions as are applicable to it:
2.1. TRANSFERS. Each Holder of Subordinated Indebtedness
covenants that any transferee from it of any Subordinated Indebtedness shall,
prior to acquiring such interest, execute and deliver a counterpart of this
Agreement to each other party hereto.
2.2. SUBORDINATION PROVISIONS. To induce Senior Lender to
enter into the Loan Agreement and to make loans and advances thereunder,
notwithstanding any other provision of the Subordinated Indebtedness to the
contrary, any Distribution with respect to the Subordinated Indebtedness is and
shall be expressly junior and subordinated in right of payment to all amounts
due and owing upon all Senior Indebtedness outstanding from time to time.
Notwithstanding anything to the contrary contained in the Subordinated Lending
Agreements and specifically, but not by way of limitation:
(a) PAYMENTS. The Company shall make no Distribution
on the Subordinated Indebtedness until such time as the Senior Indebtedness
shall have been paid in full in cash and the Loan Agreement shall have been
irrevocably terminated.
(b) LIMITATION ON ACCELERATION. No Holder of
Subordinated Indebtedness shall be entitled to accelerate the maturity of the
Subordinated Indebtedness, exercise any remedies or commence any action or
proceeding to recover any amounts due or to become due with respect to
Subordinated Indebtedness, PROVIDED, HOWEVER, the foregoing limitation on
acceleration or exercise of any remedies shall not be applicable following the
occurrence of an Event (as to which Section 2.2 (c) shall apply).
(c) PRIOR PAYMENT OF SENIOR INDEBTEDNESS IN
BANKRUPTCY, ETC. In the event of any insolvency or bankruptcy proceedings
relative to the Company or its property, or any receivership, liquidation,
reorganization or other similar proceedings in connection therewith, or, in the
event of any proceedings for voluntary liquidation, dissolution or other winding
up of the Company or distribution or marshalling of its assets or any
composition with creditors of the Company, whether or not involving insolvency
or bankruptcy, or if the Company shall cease its operations, call a meeting of
its creditors or no longer do business as a going
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concern (each individually or collectively, an "Event") then all Senior
Indebtedness shall be paid in full and satisfied in cash and the Loan Agreement
irrevocably terminated before any Distribution shall be made on account of any
Subordinated Indebtedness. Any such Distribution which would, but for the
provisions hereof, be payable or deliverable in respect of the Subordinated
Indebtedness, shall be paid or delivered directly to the Senior Lender or its
representatives, in the proportions in which they hold the same, until amounts
owing upon Senior Indebtedness shall have been paid in full in cash and the Loan
Agreement irrevocably terminated.
(d) ACCELERATION. In the event of any Senior
Indebtedness becoming due and payable, whether by acceleration, maturity or
otherwise, no Distribution shall thereafter be made on account of the
Subordinated Indebtedness until all Senior Indebtedness shall be paid in full in
cash and the Loan Agreement shall have been irrevocably terminated.
(e) POWER OF ATTORNEY. To enable the Senior Lender to
assert and enforce its rights hereunder in any proceeding referred to in Section
2.2(c) or upon the happening of any Event, the Senior Lender or any person whom
it may designate is hereby irrevocably appointed attorney in fact for the
Subordinated Lender with full power to act in the place and stead of the
Subordinated Lender including the right to make, present, file and vote such
proofs of claim against the Company on account of all or any part of the
Subordinated Indebtedness as the Senior Lender may deem advisable and to receive
and collect any and all dividends or other payments made thereon and to apply
the same on account of the Senior Indebtedness. The Subordinated Lender will
execute and deliver to the Senior Lender such instruments as may be required by
the Senior Lender to enforce any and all Subordinated Indebtedness, to
effectuate the aforesaid power of attorney and to effect collection of any and
all dividends or other payments which may be made at any time on account
thereof, and the Subordinated Lender hereby irrevocably appoints the Senior
Lender as the lawful attorney and agent of the Subordinated Lender to execute
financing statements on behalf of the Subordinated Lender and hereby further
authorizes the Senior Lender to file such financing statements in any
appropriate public office.
(f) CROSS-DEFAULTS. Any "default" or "event of
default" under the Subordinated Lending Agreements shall automatically
constitute an Event of Default under the Senior Lending Agreements so that
payments received by any Holder of Subordinated Indebtedness following any such
occurrence shall not be retained.
(g) PAYMENTS HELD IN TRUST. Should any Distribution
or the proceeds thereof, in respect of the Subordinated Indebtedness, be
collected or received by the Subordinated Lender or any Affiliate (as such term
is defined in Rule 405 of Regulation C adopted by the Securities and Exchange
Commission pursuant to the Securities Act of 1933) of the Subordinated Lender at
a time when the Subordinated Lender is not permitted to receive any such
Distribution or proceeds thereof including if same is collected or received when
there is or would be after giving effect to such payment a Default or an Event
of Default under the Loan Agreement, then the Subordinated Lender will forthwith
deliver, or cause to be delivered, the same to the Senior Lender in precisely
the form held by the Subordinated Lender (except for any necessary endorsement)
and until so delivered, the same shall be held in trust by the
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Subordinated Lender, or any such Affiliate, as the property of the Senior Lender
and shall not be commingled with other property of the Subordinating Lender or
any such Affiliate.
(h) SUBROGATION. Subject to the prior payment in full
in cash of the Senior Indebtedness and the irrevocable termination of the Loan
Agreement, to the extent that Senior Lender has received any Distribution on the
Senior Indebtedness which, but for this Agreement, would have been applied to
the Subordinated Indebtedness, the Subordinated Lender shall be subrogated to
the then or thereafter rights of the Senior Lender including, without
limitation, the right to receive any Distribution made on the Senior
Indebtedness until the principal of, interest on and other charges due under the
Subordinated Indebtedness shall be paid in full; and, for the purposes of such
subrogation, no Distribution to the Senior Lender to which the Subordinated
Lender would be entitled except for the provisions of this Agreement shall, as
between the Company, its creditors (other than the Senior Lender) and the
Subordinated Lender, be deemed to be a Distribution by the Company to or on
account of Senior Indebtedness, it being understood that the provisions hereof
are and are intended solely for the purpose of defining the relative rights of
the Subordinated Lender on the one hand, and the Senior Lender on the other
hand.
(i) SCOPE OF SUBORDINATION. The provisions of this
Agreement are solely to define the relative rights of any Holder of Subordinated
Indebtedness and the Senior Lender. Nothing in this Agreement shall impair, as
between the Company and the Subordinated Lender the unconditional and absolute
obligation of the Company to punctually pay the principal, interest and any
other amounts and obligations owing under the Subordinated Lending Agreements
and Subordinated Lending Agreements in accordance with the terms thereof,
subject to the rights of the Senior Lender under this Agreement.
3. MISCELLANEOUS.
3.1. ADDITIONAL AGREEMENTS. In the event that the Senior
Indebtedness is refinanced in full, Subordinated Lender agrees at the request of
such refinancing party to enter into a subordination agreement on terms
substantially similar to this Agreement.
3.2. SURVIVAL OF RIGHTS. The right of Senior Lender to enforce
the provisions of this Agreement shall not be prejudiced or impaired by any act
or omitted act of the Company or Senior Lender including forbearance, waiver,
consent, compromise, amendment, extension, renewal, or taking or release of
security in respect of any Senior Indebtedness or noncompliance by the Company
with such provisions, regardless of the actual or imputed knowledge of Senior
Lender.
3.3. RECEIPT OF AGREEMENTS. Subordinated Lender hereby
acknowledges that it has delivered to Senior Lender a correct and complete copy
of the Subordinated Lending Agreements as in effect on the date hereof. The
Subordinated Lender, solely for the purposes of this Agreement, hereby
acknowledges receipt of a correct and complete copy of each of the Senior
Lending Agreements as in effect on the date hereof.
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<PAGE> 6
3.4. NO AMENDMENT OF SUBORDINATED LENDING AGREEMENTS. So long
as the Loan Agreement remains in effect, neither the Company nor any Holder of
Subordinated Indebtedness shall enter into any amendment to or modification of
any Subordinated Lending Agreements which relates to or affects the principal
amount, interest rate, payment terms, or any other material covenant or
agreement of the Company thereunder or in respect thereof, without the prior
written consent of Senior Lender.
3.5. AMENDMENTS TO SENIOR LENDING AGREEMENTS. Nothing
contained in this Agreement, or in any other agreement or instrument binding
upon any of the parties hereto, shall in any manner limit or restrict the
ability of any Senior Lender from increasing or changing the terms of the loans
under the Senior Lending Agreements, or to otherwise waive, amend or modify the
terms and conditions of the Senior Lending Agreements, in such manner as such
Senior Lender and the Company shall mutually determine. Each Holder of
Subordinated Indebtedness hereby consents to any and all such waivers,
amendments, modifications and compromises, and any other renewals, extensions,
indulgences, releases of collateral or other accommodations granted by the
Senior Lender to the Company from time to time, and agrees that none of such
actions shall in any manner affect or impair the subordination established by
this Agreement in respect of the Subordinated Indebtedness.
3.6. NOTICE OF DEFAULT AND CERTAIN EVENTS. The Senior Lender
and the Holders of Subordinated Indebtedness shall undertake in good faith to
notify the other of the occurrence of any of the following as applicable:
(a) the obtaining of actual knowledge of the
occurrence of any default under the Subordinated Lending Agreements;
(b) the acceleration of any Senior Indebtedness by
the Senior Lender or of any Subordinated Indebtedness by any Holder of
Subordinated Indebtedness;
(c) the granting by Senior Lender of any waiver of
any Event of Default under the Loan Agreement or the granting by any Holder of
Subordinated Indebtedness of any waiver of any "default" or "event of default"
under the Subordinated Lending Agreements; or
(d) The payment in full by the Company (whether as a
result of refinancing or otherwise) of all Senior Indebtedness.
The failure of any party to give such notice shall not affect the
subordination of the Subordinated Indebtedness as provided in this Agreement.
3.7. NOTICES. Any notice or other communication required or
permitted pursuant to this Agreement shall be deemed given (a) when personally
delivered to any officer of the party to whom it is addressed, (b) on the
earlier of actual receipt thereof or three (3) days following posting thereof by
certified or registered mail, postage prepaid, or (c) upon actual receipt
thereof when sent by a recognized overnight delivery service or (d) upon actual
receipt thereof when sent by telecopier to the number set forth below with
telephone communication
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confirming receipt and subsequently confirmed by registered, certified or
overnight mail to the address set forth below, in each case addressed to each
party at its address set forth below or at such other address as has been
furnished in writing by a party to the other by like notice:
If to Agent or The Chase Manhattan Bank
Chase at: 600 Fifth Avenue, 4th Floor
New York, New York 10020
Attention: Let's Talk Cellular Account
Executive
Telephone: (212) 332-4231
Facsimile: (212) 322-4299
with a copy to: Hahn & Hessen LLP
350 Fifth Avenue
New York, New York 10118
Attention: Linda C. Berman
Telephone: (212) 736-1000
Telecopier: (212) 594-7167
If to Subordinated
Lender: H.I.G. Capital LLC
------------------------------
------------------------------
Attention:
--------------------
Telephone:
-------------------
Telecopier:
-------------------
with a copy to: White & Case LLP
200 South Biscayne Boulevard, Suite 4900
Miami, Florida 33131-2352
Attention: Jorge L. Freeland, Esq.
Telephone: (305) 371-2700
Facsimile: (305) 358-5744
3.8. BOOKS AND RECORDS. The Subordinated Lender shall (a) make
notations on the books of the Subordinated Lender beside all accounts or on
other statements evidencing or recording any Subordinated Indebtedness to the
effect that such Subordinated Indebtedness is subject to the provisions of this
Agreement, (b) furnish Senior Lender, upon request from time to time, a
statement of the account between the Subordinated Lender and the Company and (c)
give Senior Lender, upon its request, full and free access to the Subordinated
Lender's books pertaining only to such accounts with the right to make copies
thereof.
3.9. BINDING EFFECT; OTHER. This Agreement shall be a
continuing agreement, shall be binding upon and shall inure to the benefit of
the parties hereto from time to time and their respective successors and
assigns, shall be irrevocable and shall remain in full force and
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effect until the Senior Indebtedness shall have been satisfied or paid in full
in cash and the Loan Agreement shall have been irrevocably terminated, but shall
continue to be effective, or be reinstated, as the case may be, if at any time
payment, or any part thereof, of any amount paid by or on behalf of the Company
with regard to the Senior Indebtedness is rescinded or must otherwise be
restored or returned upon the insolvency, bankruptcy, dissolution, liquidation
or reorganization of the Company, or upon or as a result of the appointment of a
receiver, intervenor or conservator of, or trustee, custodian, or similar
officer, for the Company or any substantial part of its property, or otherwise,
all as though such payments had not been made. No action which any Senior Lender
or the Company may take or refrain from taking with respect to the Senior
Indebtedness, including any amendments thereto, shall affect the provisions of
this Agreement or the obligations of any Subordinated Lender hereunder. Any
waiver or amendment hereunder must be evidenced by a signed writing of the party
to be bound thereby, and shall only be effective in the specific instance. This
Agreement shall be governed by and construed in accordance with the laws of the
State of New York. The headings in this Agreement are for convenience of
reference only, and shall not alter or otherwise affect the meaning hereof.
4. REPRESENTATIONS AND WARRANTIES.
(a) Subordinated Lender represents and warrants to Senior
Lender that Subordinated Lender is the holder of the Subordinated Indebtedness.
Subordinated Lender agrees that it shall not assign or transfer any of the
Subordinated Indebtedness without (i) prior notice being given to Senior Lender
and (ii) such assignment or transfer being made expressly subject to the terms
of this Agreement. Subordinated Lender further warrants to Senior Lender that it
has full right, power and authority to enter into this Subordination Agreement
and, to the extent Subordinated Lender is an agent or trustee for other parties,
that this Agreement shall fully bind all such other parties.
(b) Senior Lender represents and warrants to Subordinated
Lender that Senior Lender is the holder of the Senior Indebtedness. Senior
Lender agrees that it shall not assign or transfer any of the Senior
Indebtedness without (i) prior notice being given to Subordinated Lender and
(ii) such assignment or transfer being made expressly subject to the terms and
provisions of the Agreement. Senior Lender further warrants to Subordinated
Lender that it has full right, power and authority to enter into this Agreement
and, to the extent Senior Lender is an agent or trustee for other parties, that
this Agreement shall fully bind all such other parties.
5. PROCEEDINGS. ANY JUDICIAL PROCEEDING BROUGHT BY OR AGAINST ANY
SUBORDINATED LENDER WITH RESPECT TO THIS OR ANY RELATED AGREEMENT MAY BE BROUGHT
IN ANY COURT OF COMPETENT JURISDICTION IN THE SUPREME COURT OF THE STATE OF NEW
YORK, ANY FEDERAL DISTRICT COURT WITHIN THE STATE OF NEW YORK, OR ELSEWHERE AND,
BY EXECUTION AND DELIVERY OF THIS AGREEMENT EACH SUBORDINATED LENDER, SENIOR
LENDER AND THE COMPANY ACCEPT FOR THEMSELVES AND IN CONNECTION WITH THEIR
PROPERTIES, GENERALLY AND UNCONDITIONALLY, THE NON-EXCLUSIVE JURISDICTION OF THE
AFORESAID COURTS, AND IRREVOCABLY AGREE TO BE BOUND BY ANY FINAL JUDGMENT
RENDERED THEREBY IN CONNECTION WITH THIS AGREEMENT. NOTHING HEREIN SHALL AFFECT
THE
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RIGHT TO SERVE PROCESS IN ANY MANNER PERMITTED BY LAW OR SHALL LIMIT THE RIGHT
OF THE SENIOR LENDER TO BRING PROCEEDINGS AGAINST THE SUBORDINATED LENDER IN ANY
COURTS OF ANY OTHER JURISDICTION ANY JUDICIAL PROCEEDING BY ANY SUBORDINATED
LENDER AGAINST THE SENIOR LENDER INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER
OR CLAIM IN ANY WAY ARISING OUT OF, RELATED TO OR CONNECTED WITH THIS AGREEMENT
OR ANY RELATED AGREEMENT, SHALL BE BROUGHT ONLY IN A COURT LOCATED IN THE CITY
OF NEW YORK, STATE OF NEW YORK; PROVIDED THAT NOTWITHSTANDING THE FOREGOING, IF
IN ANY JUDICIAL PROCEEDING BY OR AGAINST ANY SUBORDINATED LENDER THAT IS BROUGHT
IN ANY OTHER COURT SUCH COURT DETERMINES THAT SENIOR LENDER IS AN INDISPENSABLE
PARTY, SUCH SUBORDINATED LENDER SHALL BE ENTITLED TO JOIN OR INCLUDE SENIOR
LENDER IN SUCH PROCEEDINGS IN SUCH OTHER COURT. EACH SUBORDINATED LENDER WAIVES
ANY OBJECTION TO JURISDICTION AND VENUE OF ANY ACTION INSTITUTED HEREUNDER AND
SHALL NOT ASSERT ANY DEFENSE BASED ON LACK OF JURISDICTION OR VENUE OR BASED
UPON FORUM NON CONVENIENS.
6. WAIVER OF JURY TRIAL. EACH CREDITOR HEREBY EXPRESSLY WAIVES ANY
RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION (A)
ARISING UNDER THIS AGREEMENT OR ANY OTHER INSTRUMENT, DOCUMENT OR AGREEMENT
EXECUTED OR DELIVERED IN CONNECTION HEREWITH, OR (B) IN ANY WAY CONNECTED WITH
OR RELATED OR INCIDENTAL TO THE DEALINGS OF ANY CREDITOR OR ANY OF THEM WITH
RESPECT TO THIS AGREEMENT OR ANY OTHER INSTRUMENT, DOCUMENTS OR AGREEMENT
EXECUTED OR DELIVERED BY THEM IN CONNECTION HEREWITH, OR THE TRANSACTIONS
RELATED HERETO OR THERETO, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER
ARISING, AND WHETHER SOUNDING IN CONTRACT OR TORT OR OTHERWISE AND EACH CREDITOR
HEREBY AGREES AND CONSENTS THAT ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION
SHALL BE DECIDED BY COURT TRIAL WITHOUT JURY, AND THAT EITHER OF THEM MAY FILE
AN ORIGINAL COUNTERPART OR A COPY OF THIS SECTION WITH ANY COURT AS WRITTEN
EVIDENCE OF THEIR CONSENT TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
9
<PAGE> 10
IN WITNESS WHEREOF, the undersigned have entered into this Agreement
this ____ day of November, 1999.
THE CHASE MANHATTAN BANK, as Agent,
as Senior Lender
By: /s/ Paula C. Cummings
------------------------------
Name: Paula C. Cummings
----------------------------
Title: Vice Presdient
---------------------------
H.I.G. CAPITAL LLC
By: /s/ Douglas Berman
------------------------------
Name: Douglas Berman
----------------------------
Title: Managing Director
---------------------------
10
<PAGE> 11
COMPANY'S ACKNOWLEDGEMENT
The undersigned Company hereby acknowledges and agrees to the foregoing
Subordination Agreement. The undersigned agrees to be bound by the terms and
provisions thereof as they relate to the relative rights of the Creditors with
respect to each other. However, nothing therein shall be deemed to amend,
modify, supersede or otherwise alter the terms of the respective agreements
between the undersigned and each Creditor. The undersigned further agrees that
the Subordination Agreement is solely for the benefit of the Creditors and shall
not give the undersigned, its successors and assigns, or any other person, any
rights vis-a-vis any Creditor.
LET'S TALK CELLULAR & WIRELESS, INC.
TELEPHONE WAREHOUSE, INC.
NATIONAL CELLULAR, INCORPORATED
CELLULAR USA
SOSEBEE ENTERPRISES, INC.,
Company
By: /s/ Daniel Cammarata
------------------------------
Name: Daniel Cammarata
----------------------------
Title: CFO
---------------------------
11
<PAGE> 1
AMENDMENT NO. 7
TO
LOAN AND SECURITY AGREEMENT
THIS AMENDMENT NO. 7 ("Amendment") is entered into as of December 1,
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 Sosebee 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
----------
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 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, Section 2.1(y)(iii) of the
Loan Agreement is hereby amended in its entirety to provide as follows:
"(iii) up to $3,000,000 for the period commencing on
November 2, 1999 and ending December 31, 1999;"
<PAGE> 2
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 and consented to by Guarantor and (ii) 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:
(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 Agent
or any 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. 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.
2
<PAGE> 3
7. 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.
8. 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.
3
<PAGE> 4
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/ Daniel Cammarata
----------------------------------
Name: Daniel Cammarata
Title: CFO
TELEPHONE WAREHOUSE, INC.
By: /s/ Daniel Cammarata
----------------------------------
Name: Daniel Cammarata
Title: CFO
NATIONAL CELLULAR INCORPORATED
By: /s/ Daniel Cammarata
----------------------------------
Name: Daniel Cammarata
Title: CFO
CELLULAR USA
By: /s/ Daniel Cammarata
----------------------------------
Name: Daniel Cammarata
Title: CFO
SOSEBEE ENTERPRISES, INC.
By: /s/ Daniel Cammarata
----------------------------------
Name: Daniel Cammarata
Title: CFO
(Signatures Continued On Following Page)
4
<PAGE> 5
THE CHASE MANHATTAN BANK, as Agent and
a Lender
By: /s/ Paula C. Cummings
----------------------------------
Name: Paula C. Cummings
Title: Vice President
Commitment Percentage: 25%
NATIONSBANK, N.A., Lender
By: /s/ Larry L. Ross
----------------------------------
Name: Larry L. Ross
Title: Senior Vice President
Commitment Percentage: 25%
IBJ WHITEHALL BANK & TRUST COMPANY,
Lender
By: /s/ Patricia G. McCormack
----------------------------------
Name: Patricia G. McCormack
Title: Director
Commitment Percentage: 25%
MERRILL LYNCH BUSINESS FINANCIAL
SERVICES, Lender
By: /s/ Hugh E. Johnson
----------------------------------
Name: Hugh E. Johnson
Title: Vice President
Commitment Percentage: 25%
Consented and Agreed to:
HIG CAPITAL LLC
By: /s/ Douglas Berman
--------------------------------
Name: Douglas Berman
Title: Managing Director
5
