EXHIBIT 10.4
FIRST AMENDMENT TO CREDIT AND SECURITY AGREEMENT
This Amendment, dated as of September 29, 2000, is made by and among
CXR TELCOM CORPORATION, a Delaware corporation ("CXR") and XIT CORPORATION, a
New Jersey corporation ("XIT" and together with CXR, the "Borrowers"), and WELLS
FARGO BUSINESS CREDIT, INC., a Minnesota corporation (the "Lender").
RECITALS
The Borrower and the Lender have entered into a Credit and Security
Agreement dated as of August 16, 2000 (the "Credit Agreement"). Capitalized
terms used in these recitals have the meanings given to them in the Credit
Agreement unless otherwise specified.
CXR now desires to purchase substantially all of the assets of T-Com,
LLC, a Delaware limited liability company ("T-Com"), free and clear of liens, in
consideration of the issuance by MicroTel to T-Com of 150,000 Series B
Convertible Preferred Shares of MicroTel and Warrants exercisable for 250,000
shares of MicroTel common stock, all pursuant to the terms and conditions of
that certain Asset Purchase Agreement, effective September 1, 2000, among
MicroTel, CXR and T-Com (the "Purchase Agreement").
The Borrower has requested that Lender consent to the Purchase
Agreement, which the Lender is willing to do pursuant to the terms and
conditions set forth herein.
AMENDMENT
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants and agreements herein contained, it is agreed as follows:
1. DEFINED TERMS. Capitalized terms used in this Amendment which are
defined in the Credit Agreement shall have the same meanings as defined therein,
unless otherwise defined herein.
2. CONSENT TO THE PURCHASE AGREEMENT. For the purposes of Section 7.7
of the Credit Agreement, Lender hereby consents to the Purchase Agreement and
the transactions contemplated thereby.
3. ACCOUNTS AND INVENTORY OF T-COM. The Accounts and Inventory
purchased by CXR from T-Com shall be included in the Eligible Accounts and
Eligible Inventory of CXR, to the extent (and only to the extent) provided in
the definitions of "Eligible Accounts" and "Eligible Inventory" in Section 1.1
of Credit Agreement, subject to the satisfaction of each of the following
conditions:
(a) Lender shall have completed its audit of T-Com with
results satisfactory to Lender; and
(b) CXR shall have purchased the assets of T-Com, free and
clear of liens, in accordance with the Purchase Agreement, and Lender
shall have received such documents as it may require to evidence such
purchase.
4. NO OTHER CHANGES. Except as explicitly amended by this Amendment,
all of the terms and conditions of the Credit Agreement shall remain in full
force and effect and shall apply to any Advance thereunder.
5. AMENDMENT FEE. The Borrowers shall pay the Lender as of the date
hereof a fully earned, non-refundable fee in the amount of $5,000 in
consideration of the Lender's execution of this Amendment.
6. CONDITIONS PRECEDENT. This Amendment shall be effective when the
Lender shall have received an executed original hereof, together with each of
the following, each in substance and form acceptable to the Lender in its sole
discretion:
(a) The Acknowledgment and Agreement of Guarantors set forth
at the end of this Amendment, duly executed by each Guarantor;
(b) Payment of the fee described in Paragraph 5 hereof; and
(c) Such other matters as the Lender may require.
7. REPRESENTATIONS AND WARRANTIES. The Borrowers hereby represent and
warrant to the Lender as follows:
(a) The Borrowers have all requisite power and authority to
execute this Amendment and to perform all of their obligations
hereunder, and this Amendment has been duly executed and delivered by
the Borrowers and constitutes the legal, valid and binding obligation
of the Borrowers, enforceable in accordance with its terms;
(b) The execution, delivery and performance by the Borrowers
of this Amendment have been duly authorized by all necessary corporate
action and do not (i) require any authorization, consent or approval by
any governmental department, commission, board, bureau, agency or
instrumentality, domestic or foreign, (ii) violate any provision of any
law, rule or regulation or of any order, writ, injunction or decree
presently in effect, having applicability to the Borrowers, or the
articles of incorporation or by-laws of the Borrowers, or (iii) result
in a breach of or constitute a default under any indenture or loan or
credit agreement or any other agreement, lease or instrument to which
any Borrower is a party or by which it or its properties may be bound
or affected; and
(c) All of the representations and warranties contained in
Article V of the Credit Agreement are correct on and as of the date
hereof as though made on and as of such date, except to the extent that
such representations and warranties relate solely to an earlier date.
8. REFERENCES. All references in the Credit Agreement to "this
Agreement" shall be deemed to refer to the Credit Agreement as amended hereby,
and any and all references in the other Loan Documents to the Credit Agreement
shall be deemed to refer to the Credit Agreement as amended hereby.
9. NO WAIVER. The execution of this Amendment and acceptance of any
documents related hereto shall not be deemed to be a waiver of any Default or
Event of Default under the Credit Agreement or breach, default or event of
default under any Security Document or other document held by the Lender,
whether or not known to the Lender and whether or not existing on the date of
this Amendment.
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10. RELEASE. Each Borrower, hereby, and each Guarantor by signing the
Acknowledgment and Agreement of Guarantors set forth below, absolutely and
unconditionally releases and forever discharges the Lender, and any and all
participants, parent corporations, subsidiary corporations, affiliated
corporations, insurers, indemnitors, successors and assigns thereof, together
with all of the present and former directors, officers, agents and employees of
any of the foregoing, from any and all claims, demands or causes of action of
any kind, nature or description, whether arising in law or equity or upon
contract or tort or under any state or federal law or otherwise, which such
Borrower or such Guarantor has had, now has or has made claim to have against
any such person for or by reason of any act, omission, matter, cause or thing
whatsoever arising from the beginning of time to and including the date of this
Amendment, whether such claims, demands and causes of action are matured or
unmatured or known or unknown.
11. COSTS AND EXPENSES. Each Borrower hereby reaffirms its agreement
under the Credit Agreement to pay or reimburse the Lender on demand for all
costs and expenses incurred by the Lender in connection with the Credit
Agreement, the Security Documents and all other documents contemplated thereby,
including without limitation all reasonable fees and disbursements of legal
counsel. Without limiting the generality of the foregoing, each Borrower
specifically agrees to pay all fees and disbursements of counsel to the Lender
for the services performed by such counsel in connection with the preparation of
this Amendment and the documents and instruments incidental hereto. Each
Borrower hereby agrees that the Lender may, at any time from time to time in its
sole discretion and without further authorization by such Borrower, make a
Revolving Advance to such Borrower under the Credit Agreement, or apply the
proceeds of any such Revolving Advance, for the purpose of paying any such fees,
disbursements, costs and expenses and the fee required under Paragraph 5 hereof.
12. MISCELLANEOUS. This Amendment and the Acknowledgment and Agreement
of Guarantors may be executed in any number of counterparts, each of which when
so executed and delivered shall be deemed an original and all of which
counterparts, taken together, shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have executed this Amendment to
be duly executed as of the date first written above.
WELLS FARGO BUSINESS CREDIT, INC. CXR TELECOM CORPORATION
By: /S/ VINCENT L. MADDELA By: /S/ RANDOLPH D. FOOTE
--------------------------------- ---------------------------
Name: VINCENT L. MADDELA Name: RANDOLPH D. FOOTE
-------------------------- --------------------
Title: ASST. VICE PRESIDENT Title: VP - CFO
-------------------------- --------------------
XET CORPORATION
By: /S/ RANDOLPH D. FOOTE
---------------------------
Name: RANDOLPH D. FOOTE
--------------------
Title: VP - CFO
--------------------
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ACKNOWLEDGMENT AND AGREEMENT OF GUARANTORS
The undersigned, each a guarantor of the indebtedness of CXR Telcom
Corporation and XIT Corporation (collectively, the "Borrowers") to Wells Fargo
Business Credit, Inc. (the "Lender") pursuant to a separate Guaranty each dated
as of August 16, 2000 (each, a "Guaranty"), hereby (i) acknowledges receipt of
the foregoing Amendment; (ii) consents to the terms (including without
limitation the release set forth in paragraph 10 of the Amendment) and execution
thereof; (iii) reaffirms his or its obligations to the Lender pursuant to the
terms of his or its Guaranty; and (iv) acknowledges that the Lender may amend,
restate, extend, renew or otherwise modify the Credit Agreement and any
indebtedness or agreement of the Borrowers, or enter into any agreement or
extend additional or other credit accommodations, without notifying or obtaining
the consent of the undersigned and without impairing the liability of the
undersigned under his or its Guaranty for all of the Borrowers' present and
future indebtedness to the Lender.
/S/ CARMINE T. OLIVA
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CARMINE T. OLIVA
MICROTEL INTERNATIONAL, INC.
By: /S/ RANDOLPH D. FOOTE
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Name: Randolph D. Foote
Its: VP/CFO
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