EXHIBIT 10.1
AMENDMENT NUMBER 1
TO
SECURITIES PURCHASE AGREEMENT
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THIS IS AMENDMENT NUMBER 1 (the "Amendment") being executed and
delivered by and between Dial-Thru International Corporation, a Delaware
corporation ("Dial-Thru"), and Global Capital Funding Group, L.P., a
Delaware limited partnership ("GCFG"), and dated as of June 1, 2005 in order
to amend that certain Securities Purchase Agreement by and between Dial-Thru
and the GCFG dated as of November 8, 2002 (the "Securities Purchase
Agreement").
RECITALS
A. The parties to this Amendment wish to (i) amend certain terms of
that certain secured promissory note dated as of November 8, 2002 in the
principal amount of $1,250,000 issued pursuant to the Securities Purchase
Agreement (the "Primary Note"), (ii) restructure the obligations underlying
the Primary Note, including the Maturity Date and the interest rate due
thereunder, and (iii) waive any and all Events of Default arising prior to
the date hereof under the Securities Purchase Agreement, all as further set
forth below.
B. In consideration of the accommodations, amendments and waivers set
forth in this Amendment, Dial Thru will issue to GCFG presently exercisable
warrants to purchase 625,000 shares of Dial Thru's Common Stock (the
"Warrants"), on the terms and conditions set forth below.
AGREEMENT
NOW THEREFORE, in consideration of the mutual promises contained in
this Amendment and other good and valuable consideration, the sufficiency,
mutuality and adequacy of which are hereby acknowledged, the parties hereto
hereby agree as follows:
1. Amendment of the Primary Note; Waiver of Events of Default.
The Primary Note, which shall be substantially in the form of Exhibit A
hereto, shall be amended and restated as follows: (a) the Maturity
Date shall be changed to February 29, 2008, (b) the interest rate
due on such obligation shall be adjusted to ten and eight one hundredths
percent (10.08%), (c) the right of conversion shall be effective
immediately, (d) all accrued but unpaid interest, including past due
interest, due under the Primary Note on the Effective Date (as defined
below), or approximately $400,000, shall become the subject of a new note
(the "Secondary Note"). The Secondary Note shall be substantially in the
form of Exhibit B hereto and shall (w) not bear interest, (x) have a
maturity date of March 30, 2007 (y) have a right of conversion effective
immediately and (z) be subject to regular quarterly payments of $50,000,
with the remaining outstanding principal balance under the Secondary Note
(the issuance of the Secondary Note shall include all accrued but unpaid
interest and all fees relating to) to be due on the maturity date thereof.
2. Fee. In further consideration of this Amendment and the waivers
set forth below, Dial Thru shall issue 100,000 shares (the "Shares") of the
company's Common Stock to GCFG.
3. Waiver of Events of Default. On issuance of the Primary Note, the
Secondary Note, and the Shares any and all prior Events of Default set forth
in Article 12 of the Securities Purchase Agreement, including without
limitation, in Section 12.1(a) and (b), shall be deemed waived without
further recourse by GCFG.
4. Right of First Refusal. The parties acknowledge that, as further
set forth in Section 8.6 of the Securities Purchase Agreement, GCFG has a
right of first refusal with respect to any Discounted Equity Offering that
Dial Thru seeks to complete (a "New Offering"). In that regard, Dial Thru
will abide by the terms of Section 8.6 with respect to any New Offering and
will otherwise present the terms and conditions thereof to GCFG as required
by Section 8.6. If GCFG elects not to exercise its right of first refusal
with respect to any New Offering, then, in connection with Dial Thru's
completion of such offering, GCFG agrees to consider in good faith the terms
and conditions of any subordination and intercreditor agreement which may be
requested by any investor/lender in such New Offering.
5. Issuance of Warrant; Additional Waivers. In connection with the
issuance of the Primary Note, the Shares and the Secondary Note and as
consideration for the waivers and accommodations agreed to by GCFG in
this Amendment, Dial Thru shall issue the Warrants to GCFG, which shall be
substantially in the form of Exhibit C hereto. On receipt of the Primary
Note, the Secondary Note and the Warrants, GCFG shall waive any and all
(a) breaches, violations and Events of Default by Dial Thru arising prior
to the date hereof under or pursuant to the Securities Purchase Agreement,
including without limitation, any Registration Default (including any
violation of Section 3.4(a) in respect thereof) and any Event of Default set
forth in Sections 12.1(d), (e), (i) and (l) and (b) all damages, costs, fees
and expenses arising directly or indirectly from such breaches, violations
and defaults, including without limitation, any and all accrued amounts
arising from or pursuant to default interest rates and liquidated damages
that otherwise may be due and owing by Dial Thru under the Securities
Purchase Agreement. In the interest of clarity, the parties to this
Amendment agree that all existing breaches, violations and Events of Default
under or pursuant to the Securities Purchase Agreement for any action or
failure to act by Dial Thru that remain uncured on the Effective Date are,
and will continue to be, waived by GCFG on and after such date. In that
regard, Dial Thru shall remain subject to the terms and conditions of the
Securities Purchase Agreement following the Effective Date and shall
otherwise be liable for any and all breaches or violations of the terms
thereof after the Effective Date; provided further that, in the interest
of clarity, GCFG has not declared any Event of Default under any of the
Transaction Documents as of the Effective Date.
6. Waiver of Rights under Section 3.4(b). In further consideration
of the Shares and the Warrant, GCFG waives its rights to the mandatory
prepayments required pursuant to Section 3.4(b) of the Securities Purchase
Agreement upon the consummation of one or more Financings, as that term is
defined in the Securities Purchase Agreement, up to the first Five Million
Dollars ($5,000,000) in Financings following the Effective Date.
7. Registration Agreement. In connection with this Amendment, if Dial
Thru files a registration statement on form SB-1 in connection with any new
financing agreement at any time prior to the maturity date of the Primary
Note, then Dial Thru shall include in the registration statement a
sufficient number of shares to allow for the full conversion of the Primary
Note plus any accrued but unpaid interest thereon, the Shares and the full
exercise of all Warrants held by GCFG including the Warrants issued
concurrently herewith. Dial Thru shall use its best efforts to include GCFG
as a party to the registration rights agreement prepared in connection with
such New Offering.
8. No Other Effect on the Securities Purchase Agreement. Except as
amended by this Amendment, the Securities Purchase Agreement remains in full
force and effect.
9. Effective Date. This Amendment shall be effective as of June 1,
2005 (the "Effective Date").
10. Miscellaneous.
(a) Captions; Certain Definitions. Titles and captions of
or in this Amendment are inserted only as a matter of convenience and for
reference and in no way define, limit, extend or describe the scope of this
Amendment or the intent of any of its provisions. All capitalized terms not
otherwise defined herein shall have the meaning therefor, as set forth in
the Securities Purchase Agreement
(b) Controlling Law. This Amendment is governed by, and shall be
construed and enforced in accordance with the laws of the State of Delaware
(except the laws of that jurisdiction that would render such choice of laws
ineffective).
(c) Counterparts. This Amendment may be executed in one or more
counterparts (one counterpart reflecting the signatures of all parties),
each of which shall be deemed to be an original, and it shall not be
necessary in making proof of this Amendment or its terms to account for more
than one of such counterparts. This Amendment may be executed by each party
upon a separate copy, and one or more execution pages may be detached from a
copy of this Amendment and attached to another copy in order to form one or
more counterparts.
Signatures on following page
IN WITNESS WHEREOF, this Amendment has been executed and delivered by
Dial-Thru and GCFG as of the date first set forth above.
Dial-Thru: Dial-Thru International Corporation
By: ___________________________________
Name: ___________________________________
Title:___________________________________
GCFG: GLOBAL CAPITAL FUNDING GROUP, L.P.
By Global Capital Management Services, Inc.
Its General Partner
By: ___________________________________
Name: ___________________________________
Title:___________________________________
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