FORBEARANCE AGREEMENT
Exhibit
10.5
This Forbearance Agreement (this
“Agreement”) is made and entered into this 11th day of November, 2010, by and
among LY Holdings, LLC, a Kentucky limited liability company (the “Borrower”) and Lightyear Network Solutions, Inc.
(f/n/a Libra Alliance Corporation) (the
“Lender“).
WITNESSETH:
WHEREAS, Borrower is currently
indebted to Lender in the principal amount of $5,149,980.00 pursuant to the Term
Note dated February 12, 2010, executed in favor of Lender in the principal
amount of $5,149,980.00 (the “Note”);
WHEREAS, as of the date
hereof, a total of $5,149,980.00 of principal is currently outstanding under the
Note, of which $0 is past due;
WHEREAS, as of the date
hereof, interest in the amount of $184,834.90 is currently accrued and
outstanding under the Note, of which $162,965.12 is past due and payable, which
may be deemed to constitute an event of default under the Note (“Past Due
Interest);
WHEREAS, the Borrower desires
Lender to waive existing events of default and forbear from exercising his
rights and remedies to collect any Past Due Interest on the terms and conditions
set forth herein; and
WHEREAS, Lender is willing to
presently provide a waiver and forbear from exercising its rights and remedies
to collect the Past Due Interest, on the terms and subject to the conditions
contained in this Agreement.
NOW, THEREFORE, in
consideration of the foregoing, the mutual promises and understandings of the
parties hereto set forth herein and other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, Lender and the Borrower
each hereby agree as set forth in this Agreement.
1. Use of Defined
Terms. Except as expressly set forth in this Agreement, all
terms which have an initial capital letter where not required by the rules of
grammar are defined in the Note.
2. Waiver. Lender
hereto waives any existing defaults under the Note.
3. Forbearance. For
good and valuable consideration, Lender agrees to forbear from demanding payment
of Past Due Interest under the Note or commencing any action against the
Borrower with respect to the payment of Past Due Interest until December 31,
2010, or such other date agreed upon by the parties.
4. Authority to Execute this
Agreement. The Borrower and the Lender represent and warrant
that it has the right, power and capacity and is duly authorized and empowered
to enter into, execute, deliver and perform this Agreement.
5. Reservation of
Rights. Lender continues to reserve all of its rights and
remedies pursuant to this Agreement and the Credit Agreements, as well as any
rights and remedies at law, in equity or otherwise. Nothing contained
in this Agreement shall be or be deemed a waiver of any hereafter arising or
occurring breach, default or event of default, including, nor shall preclude the
subsequent exercise of any of Lender’s rights or remedies, subject to Section 3
hereof.
6. Construction.
A. This
Agreement shall be interpreted, construed and governed by and under the laws of
the Commonwealth of Kentucky, without regard to its conflicts of law
doctrine.
B. Wherever
possible, each provision of this Agreement shall be interpreted in such manner
as to be valid and enforceable under applicable law, but if any provision of
this Agreement is held to be invalid or unenforceable by a court of competent
jurisdiction, such provision shall be served herefrom and such invalidity or
unenforceability shall not affect any other provision of this Agreement, the
balance of which shall remain in and have its intended full force and effect;
provided, however, if such provision may be reasonably modified so as to be
valid and enforceable as a matter of law, such provision shall be deemed to be
modified so as to be valid and enforceable to the maximum extent permitted by
law.
C. The
Paragraph headings contained in this Agreement are solely for the purpose of
reference, are not part of the agreement between the Borrower and Lender, and
shall not in any way affect the meaning or interpretation of this Agreement, any
Paragraph or provision thereof.
D. This
Agreement shall be binding on the Borrower and its respective successors and
heirs, and shall inure to the benefit of Lender, his successors, assigns,
affiliates, divisions and parent.
E. This
Agreement may not be altered, changed, amended or modified, except by written
agreement signed by Lender or the Borrower.
F. Whenever
required by context, the masculine pronouns will include the feminine and neuter
genders, and the singular will include the plural, and vice versa.
G. This
Agreement constitutes the entire agreement between the Borrower and Lender with
regard to the subject matter hereof.
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IN
WITNESS WHEREOF, the Borrower and Lender have executed this Agreement as of the
date first set forth above.
Lender:
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By:
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/s/ Xxxxxx X. Xxxx, CFO
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Xxxxxx
X. Xxxx, CFO
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Borrower:
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LY
HOLDINGS, LLC
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By:
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/s/ J. Xxxxxxx Xxxxxxxxx,
III
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Title:
J. Xxxxxxx Xxxxxxxxx, III,
CEO
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