EXHIBIT 10.4
AMENDMENT DATED MARCH 26, 2001
AMENDMENT
THIS AMENDMENT (the "AMENDMENT"), dated as of March 26, 2001
to that certain securities purchase agreement dated February 26, 2001 (the
"AGREEMENT") by and among DAMARK International, Inc., a Minnesota corporation,
with headquarters located at 000 Xxxxxxx Xxxxxxx, Xxxxx 000, Xxxxxxxxxxx,
Xxxxxxxxx 00000 (the "COMPANY"), and the investors listed on the signature pages
hereto (individually, a "BUYER" and collectively, the "BUYERS") and the SENIOR
CONVERTIBLE NOTES issued by the Company to the Buyers pursuant to the Agreement.
WHEREAS:
A. All terms defined in the Agreement are used herein as
therein defined.
B. Pursuant to the Agreement, the Company issued $14.2
million of its 10% Senior Convertible Notes due August 26, 2001 (the "SENIOR
CONVERTIBLE NOTES") on February 27, 2001 to the Buyers in the respective amounts
listed on the Schedule of Buyers to the Agreement.
C. The Company and the Buyers have agreed to defer the
Maturity Date of the Senior Convertible Notes to February 4, 2002 and modify
certain acceleration provisions of the Senior Convertible Notes.
NOW, THEREFORE, the Company and the Buyers hereby agree as
follows:
1. AMENDMENT OF MATURITY DATE.
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The Maturity Date under and as defined in the Senior
Convertible Notes is hereby amended by deleting the date "August 26, 2001" and
inserting in lieu thereof the date "February 4, 2002" so that the Maturity Date
of the Senior Convertible Notes is February 4, 2002. Each Buyer for itself or
himself represents that he is the legal owner of the respective Senior
Convertible Note issued to it or him pursuant to the Agreement and will make
notation of the change of the Maturity Date on the Senior Convertible Note
issued to it or him.
2. ACCELERATION PROVISIONS.
------------------------
Section 5(h) of the SeniorConvertible Notes is hereby amended
by deleting the phrase "90 days following the date of this Note" in the first
sentence thereof and inserting "January 2, 2002" in lieu thereof. Clause (j) in
Section 20(a) of the Convertible Notes is hereby amended in its entirety to read
as follows: "(j) the Company fails to obtain the Required Shareholder Approval
by January 2, 2002 or".
3. APPROVAL OF AMENDMENT INCREASING AUTHORIZED NUMBER OF
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SHARES OF PREFERRED STOCK.
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The Buyers hereby consent to and approve the amendment to the
Company's restated article of incorporation to increase the number of authorized
shares of preferred stock to 5,000,000 shares.
1
4. BINDING FORCE AND EFFECT.
------------------------
Except as amended hereby, the Agreement and the Senior
Convertible Notes shall continue in full force and effect in accordance with
their respective provisions.
5. COUNTERPARTS.
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This Amendment may be executed in two or more identical
counterparts, all of which shall be considered one and the same agreement and
shall become effective when counterparts have been signed by each and delivered
to the other party; provided that a facsimile signature shall be considered due
execution and shall be binding upon the signatory thereto with the same force
and effect as if the signature were an original, not a facsimile signature.
IN WITNESS WHEREOF, the Buyers and the Company have caused
this Waiver and Consent to be duly executed as of the date first written above.
COMPANY: BUYERS:
DAMARK INTERNATIONAL, INC. XXXXX TRADING
By: /s/ By: /s/
-------------------------------- --------------------------------
Name: Xxxxxx Xxxxxxxx Name:
Its: Chairman, Chief Executive Its:
Officer and President
SHEPHERD INVESTMENTS
INTERNATIONAL, LTD.
By: /s/
--------------------------------
Name:
Its:
WOODVILLE LLC
By: /s/
--------------------------------
Name:
Its:
CALM WATERS PARTNERSHIP
By: /s/
--------------------------------
Name:
Its:
/s/
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Xxxxxx X. Xxxxxx
