EXHIBIT 10.52
AMENDMENT NO. 3 TO LOAN AND NOTE PURCHASE AGREEMENT
Amendment No. 3 to Loan and Note Purchase Agreement (the
"Amendment") is entered into as of this 12th day of September, 2000 by and among
eGlobe, Inc., a Delaware corporation ("eGlobe" or "Parent"), eGlobe Financing
Corporation, a Delaware corporation ("eGlobe Financing"), IDX Financing
Corporation, a Delaware corporation ("IDX Financing"), Telekey Financing
Corporation, a Delaware corporation ("Telekey Financing" and together with
eGlobe Financing and IDX Financing, the "Financing Companies"), eGlobe/Coast,
Inc., a Delaware corporation ("eGlobe/Coast"), and EXTL-Special Investment
Risks, LLC, a Nevada limited liability corporation, including its predecessor
companies ("EXTL").
WHEREAS, Parent, the Financing Companies and EXTL
(collectively, the "Debtors") entered into a Loan and Note Purchase Agreement
dated April 9, 1999, as amended by a letter agreement dated June 16, 1999 and as
further amended by Amendments No. 1 and 2 to Loan and Note Purchase Agreement
(as amended, the "Note Purchase Agreement"), pursuant to which the Financing
Companies originally borrowed $20 million from EXTL as evidenced by a certain 5%
secured note dated as of June 30, 1999 (the "Secured Notes") and a certain
revolving note dated as of June 30, 1999 based on the balance of accounts
receivable (the "A/R Note");
WHEREAS, in connection with the consummation of its merger
with Coast International, eGlobe assumed Coast's obligations to repay promissory
notes payable to Special Investment Risks, LLC in the amount of $3,250,000,
whether at maturity, by acceleration or otherwise (the "Special Investment
Notes");
WHEREAS, Special Investment Risks, LLC has merged into EXTL
Investors, LLC, and both were affiliates of Xxxxxx Xxxxxx;
WHEREAS, principal and interest under the Secured Notes, the
A/R Note and the Special Investment Notes (collectively the "Notes") has been
paid, although not always in a timely fashion under the terms thereof, and there
has been confusion and, from time to time, disagreement about amounts owing
under the Notes, the appropriate timing of payments, and other matters relating
to the proper management of the Notes;
WHEREAS, the parties desire to make certain amendments to the
Note Purchase Agreement and to the Notes intended to preserve for Special
Investment and EXTL the continuing full benefit of the security arrangements
contained therein and in the security agreements and other documents referred to
therein, while at the same time assuring the better management and governance of
the debt by the Parent and, in consequence, to consolidate the Notes into a new
promissory note which will establish a single debt instrument and payment
schedule (the "Amended and Restated Note").
WHEREAS, EXTL has committed to forbear, for the period
beginning on the date of this Amendment No. 3 and ending on October 1, 2001,
from exercising its right to mandate eGlobe to enter into an involuntary
reorganization, provided the Debtors comply with the terms of the Note Purchase
Agreement as amended hereby and the Amended and Restated Note;
NOW THEREFORE, the parties hereto do hereby agree as follows:
1. Capitalized terms used herein and not defined herein shall
have the meaning ascribed to them in the Note Purchase Agreement. All terms and
provisions of the Note Purchase Agreement, as amended hereby, shall continue in
full force and effect, and are hereby confirmed in all respects.
2. The parties acknowledge and agree that the following
amendments are hereby made to the Note Purchase Agreement:
2.1 A new Section 6.1 (j) is inserted as follows: "(j)
the Company shall fail to submit the following
monthly reports on or before the 15th of each month
with reference to the period ending with the
previous calendar month: (1) a Status of Security
report, setting forth a list of the material assets
of Company ;and its Subsidiaries, all material
additions and deletions to the assets, and an
accounting of receivables; (2) a report on whether
or not all provisions of the Note Purchase Agreement
and the Transaction Documents have been complied
with, and specifying any non-compliance; (3) a
report on whether or not all provisions of any other
Indebtedness of the Company have been complied with,
and specifying any non-compliance; and, (4) a report
identifying all litigation in which the Company is
engaged." 2.2 In Section 7.2, the definition of the
phrase "Note Interest Rate" beginning with the word
"means" is deleted and in lieu thereof is inserted
the following: "means the prime interest rate as
reported from time to time in the Wall Street
Journal plus two percentage points."
2.3 In Section 7.2, the phrase "Note Overdue Rate" (but
not its definition) is deleted and in its place is
inserted the following: "Note Late Payment Rate".
3. The Parties agree that the Notes previously issued to the
benefit of EXTL and Special Investments by the Parent and one or more of its
subsidiaries are hereby amended, restated and replaced in their entirety by the
Amended and Restated Secured Note (the "Amended and Restated Note") which is
being issued in connection with the execution of this Amendment No. 3, the form
of which is attached hereto as Exhibit A. The Parties further agree that the
outstanding principal amount under the Amended and Restated Note shall be
$15,000,000.00 (which amount represents the outstanding principal amount of the
Notes). There remains outstanding $1,000,000.00 in accrued and unpaid interest
thereon following the application of $3,577,989.00 of Indebtedness towards the
exercise of the Warrant as provided in Paragraph 4 below.
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4. In consideration for the reduction in the principal amount
due as reflected in the previous paragraph, eGlobe will permit the exercise of
the EXTL warrant, and the issuance of all 5,000,000 shares of eGlobe Common
Stock pursuant to that warrant, contemporaneous with the closing of this
Amendment No. 3.
5. To secure the indebtedness of Debtor's under the Amended
and Restated Note, Debtors hereby grant to EXTL a continuing security interest
in and to the following, whether now owned or hereafter acquired, and all
products, proceeds, substitutions, and accessions of the following:
5.1 all accounts and accounts receivable;
5.2 all inventory;
5.3 all general intangibles (excluding software);
5.4 all equipment;
5.5 all goods;
5.6 all fixtures;
5.7 all chattel paper;
5.8 all letter-of-credit rights;
5.9 all investment property, instruments, documents,
deposit accounts, certificates of deposit:
5.10 all payment intangibles;
5.11 all leasehold interests; and
5.12 all books and records relating to any of the
foregoing.
All terms used in this section shall have the same meaning as in the Uniform
Commercial Code as adopted by the State of Texas (from time to time).
6. Prepayment of Principal: (a) EXTL will receive, as a
payment reducing the principal amount due under the Amended and Restated Note,
15% of the net cash proceeds from the sale of the business and assets of the
long distance telephone business of eGlobe/Coast; (b) EXTL will receive, as
payment reducing the principal amount due under the Amended and Restated Note,
15% of the net cash proceeds from the sale of the 0000 Xxxx Xxxxx Xxxxxx, Xxxxxx
Xxxxxxxx property; (c) EXTL will receive, as a payment reducing the principal
amount due under the Amended and Restated Note, 5% of the net cash proceeds from
any equity financing (for purposes of this paragraph, the term "equity
financing" includes the current $6,000,000 held in escrow pending registration
of eGlobe securities); and, (d) if EXTL receives payments reducing principal
under either (a) or (b) or (c), then eGlobe will be relieved of its obligation
under the Amended and Restated Note to make monthly principal payments up to the
amount of such funds received by EXTL.
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7. If Xxxxxx Xxxxxxxx or his affiliates forbears and defers
rent payments for the premises in New York used by eGlobe due and payable from
and after September 15 forward, then EXTL will waive principal payments required
during such period (deferring such payments to July 1, 2002 or until Xxxxxx
Xxxxxxxx or his affiliates are paid the amount accrued during the term of the
forbearance, whichever comes first) in a ratio of the shares owned by the Xxxxxx
Xxxxxxxx and his affiliates (including all members of his family) to the shares
owned by the EXTL and the members of the family of Xxxxxx Xxxxxx.
8. In consideration of the acts and undertakings of EXTL in
this Amendment No. 3, eGlobe will issue at closing a Warrant to purchase
1,000,000 shares of eGlobe Common Stock @$1.94 per share expiring July 1, 2004.
The shares underlying the Warrant shall have reasonable and customary piggyback
registration rights commencing in 2001. The Warrant shall be subject to the
terms and conditions of the existing Registration Rights Agreement.
9. eGlobe shall provide the following reports to EXTL:
9.1 Quarterly un-audited Financial Statements,
contemporaneous with the filing of form 10-Q with
the SEC
9.2 Annual audited Financial Statements, contemporaneous
with the filing of form 10-K with the SEC 9.3
Monthly Reports as outlined in paragraph 2 above.
10. EXTL will have the right to declare the outstanding
principal amount of the Amended and Restated Note (together with accrued
interest) immediately due and payable in the event of a Change of Control. For
purposes of this paragraph, a Change of Control will be deemed to have occurred
if any one or more of the following occurs: (i) any person or group (as defined
under applicable securities laws) becomes the holder of 35% or more of the
voting power or equity interests of the Company on a fully diluted basis,
assuming the conversion of outstanding convertible securities and exercise of
outstanding warrants and options [other than options granted under employee
stock plans] which have an exercise price less than or equal to the then market
price of the eGlobe common stock, (ii) two or more directors are not Continuing
Directors (defined for this purpose as directors nominated for election by a
majority of the existing directors), or (iii) two or more of the Company's chief
executive officer, chief operating officer and chief financial officer, or their
successors who are approved by the lender in writing for purposes of this
provision, are removed or replaced, or resign or decline to stand for
re-appointment for reasons unrelated to health or retirement.
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11. eGlobe shall pay all costs and expenses of EXTL in
connection with the preparation of the loan documents, or in connection with the
perfection and maintenance of any liens thereunder.
12. EXTL hereby waives all past defaults.
13. This Amendment No. 3 to Loan and Note Purchase Agreement
may be executed in several counterparts, each of which is an original, but all
of which together constitute one and the same agreement.
14. All corporate law matters arising under this Amendment No.
3 to Loan and Note Purchase Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware, and all other matters arising
under this Agreement shall be governed by and construed in accordance with the
laws of the State of Texas, in each case regardless of the laws that might
otherwise govern under applicable principles of conflicts of law. Each of the
parties consents to the jurisdiction of the federal courts whose districts
encompass any part of the State of Texas or the state courts of the State of
Texas in connection with any dispute arising under this Amendment No. 3 to Loan
and Note Purchase Agreement and hereby waives, to the maximum extent permitted
by law, any objection, including any objection based on forum non conveniens, to
the bringing of any such proceeding in such jurisdictions
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IN WITNESS WHEREOF, the parties have executed this Amendment
as of the date first set forth above.
eGLOBE, INC.
By:__________________________________
Name/Title:__________________________
eGLOBE FINANCING CORPORATION
By:__________________________________
Name/Title:__________________________
IDX FINANCING CORPORATION
By:__________________________________
Name/Title:__________________________
TELEKEY FINANCING CORPORATION
By:__________________________________
Name/Title:__________________________
EGLOBE/COAST, INC.
By:___________________________________
Name/Title:___________________________
EXTL-SPECIAL INVESTMENT RISKS, LLC
By:__________________________________
Name/Title:__________________________
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