AMENDMENT AGREEMENT
Exhibit
10.1
THIS AMENDMENT AGREEMENT
(the “Agreement”), dated as of October ___,
2008, is entered into by and among Guangzhou Global Telecom, Inc., a Florida
corporation (the “Company”),
and the persons identified as “Holders” on the signature pages hereto (the
“Holders”). Defined
terms not otherwise defined herein shall have the meanings set forth in the
Purchase Agreement (as defined below).
WHEREAS, pursuant to a Securities Purchase
Agreement, dated July 31, 2007 (the “Purchase
Agreement”), among the Company and the Holders, the Holders purchased
from the Company an aggregate of $[____________ in principal amount of 8% Senior
Secured Convertible Debentures of the Company (the “Debentures”)
and were issued warrants exercisable for shares of Common Stock (the “Warrants”);
and
WHEREAS, the parties desire to
amend certain of the Transaction Documents pursuant to the terms
hereof.
NOW THEREFORE, for good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, each Holder hereby agrees as follows:
1. Amended and Restated
Debentures. The Company hereby agrees to issue each Holder, in
exchange for such purchaser’s Debenture, an amended and restated debenture, in
the form of Exhibit
A attached hereto (the “Amended and Restated
Debenture(s)”) with a principal amount equal to the amounts set forth on
Schedule A
attached hereto. Other than as amended thereunder, the rights and
obligations of the Holders and of the Company with respect to the Amended and
Restated Debentures shall be identical in all respects to the rights and
obligations of the Holders and of the Company with respect to the Debentures and
the Underlying Shares issued and issuable pursuant to the Purchase
Agreement. For clarity, the Purchase Agreement and all Transaction
Documents thereunder are hereby amended so that the term “Debentures” includes
the Amended and Restated Debentures and the term “Underlying Shares”
includes the shares of Common Stock issuable upon conversion and redemption
thereof, and the term “Transaction Documents” shall be amended to include this
Agreement.
2. Amendment to Certificate of
Incorporation.
(a)The
Company hereby agrees to hold a special meeting of shareholders (which may also
be at the annual meeting of shareholders) at the earliest practical date
following the date hereof, and in any event on or before January 15, 2009, for
the purpose of obtaining the “Authorized Share Approval” (as defined below),
with the recommendation of the Company’s Board of Directors that such proposal
be approved, and the Company shall solicit proxies from its shareholders in
connection therewith in the same manner as all other management proposals in
such proxy statement and all management-appointed proxyholders shall vote their
proxies in favor of such proposal. In addition, the Company agrees to
use its best efforts to promptly respond to any comments the Commission may have
with respect to any preliminary proxy statement. If the Company does
not obtain the Authorized Share Approval at the first meeting, the Company shall
call a meeting every 30 days thereafter to seek Authorized Share Approval until
the earlier of the date the Authorized Share Approval is obtained or the
Debentures and Warrants are no longer outstanding.
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The
Company agrees to file the amendment to its articles or certificate of
incorporation with the Secretary of State of Florida within one Business Day of
obtaining the Authorized Share Approval. As used herein, “Authorized
Share Approval” means the vote by the stockholders of the Company to approve an
amendment to the Company’s articles or certificate of incorporation that
increases the number of authorized shares of Common Stock from ___________ to at
least 1,000,000,000, and the filing of such amendment and the acceptance thereof
by the Secretary of State of Florida.
(b) On
or prior to the date hereof, the Company shall deliver each Holder irrevocable
written voting agreements, of all of the officers, directors and stockholders
holding more than 10% of the issued and outstanding shares of Common Stock on
the date hereof to vote all Common Stock over which such Persons have voting
control as of the record date for the meeting of stockholders of the Company in
favor of the Authorized Share Approval, amounting to, in the aggregate, at least
50% of the issued and outstanding Common Stock, which agreements shall be in
form and substance acceptable to each Holder.
3. The
Company hereby makes to the Holders the following representations and
warranties:
(a) Authorization;
Enforcement. The Company has the requisite corporate power and
authority to enter into and to consummate the transactions contemplated by this
Agreement and otherwise to carry out its obligations hereunder and
thereunder. The execution and delivery of this Agreement by the
Company and the consummation by it of the transactions contemplated hereby have
been duly authorized by all necessary action on the part of the Company and no
further action is required by the Company, its board of directors or its
stockholders in connection therewith. This Agreement has been duly
executed by the Company and, when delivered in accordance with the terms hereof
will constitute the valid and binding obligation of the Company enforceable
against the Company in accordance with its terms except (i) as limited by
general equitable principles and applicable bankruptcy, insolvency,
reorganization, moratorium and other laws of general application affecting
enforcement of creditors’ rights generally, (ii) as limited by laws relating to
the availability of specific performance, injunctive relief or other equitable
remedies and (iii) insofar as indemnification and contribution provisions may be
limited by applicable law.
(b) No
Conflicts. The execution, delivery and performance of this
Agreement by the Company and the consummation by the Company of the transactions
contemplated hereby do not and will not: (i) conflict with or violate any
provision of the Company’s or any Subsidiary’s certificate or articles of
incorporation, bylaws or other organizational or charter documents, or (ii)
conflict with, or constitute a default (or an event that with notice or lapse of
time or both would become a default) under, result in the creation of any Lien
upon any of the properties or assets of the Company or any Subsidiary, or give
to others any rights of termination, amendment, acceleration or cancellation
(with or without notice, lapse of time or both) of, any material agreement,
credit facility, debt or other material instrument
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(evidencing
a Company or Subsidiary debt or otherwise) or other material understanding to
which the Company or any Subsidiary is a party or by which any property or asset
of the Company or any Subsidiary is bound or affected, or (iii) conflict with or
result in a violation of any law, rule, regulation, order, judgment, injunction,
decree or other restriction of any court or governmental authority to which the
Company or a Subsidiary is subject (including federal and state securities laws
and regulations), or by which any property or asset of the Company or a
Subsidiary is bound or affected; except in the case of each of clauses (ii) and
(iii), such as could not have or reasonably be expected to result in a Material
Adverse Effect.
(c) Issuance of the Amended and
Restated Debentures. The Amended and Restated Debentures are
duly authorized and, upon the execution of this Agreement by the Holders will be
duly and validly issued, fully paid and nonassessable, free and clear of all
Liens imposed by the Company other than restrictions on transfer provided for in
the Transaction Documents. The Underlying Shares, when issued in
accordance with the terms of the Amended and Restated Debentures, will be
validly issued, fully paid and nonassessable, free and clear of all Liens
imposed by the Company. The Company has reserved from its duly
authorized capital stock a number of shares of Common Stock for issuance of the
Underlying Shares sufficient for the conversion in full of the Amended and
Restated Debentures.
(d) Equal
Consideration. No consideration has been offered or paid to
any person to amend or consent to a waiver, modification, forbearance or
otherwise of any provision of any of the Transaction Documents.
(e) Survival and Bring
Down. All of the Company’s warranties and representations
contained in this Agreement shall survive the execution, delivery and acceptance
of this Agreement by the parties hereto. The Company
expressly reaffirms that, except as set forth in the disclosure schedules
attached hereto (if any), each of the representations and warranties set forth
in the Purchase Agreement, continues to be true, accurate and
complete, and the Company hereby remake and incorporate herein by reference each
such representation and warranty as though made on the date of this
Agreement.
(f) Holding Period for Amended
and Restated Debentures. Pursuant to Rule 144, the holding period of the
Amended and Restated Debentures (and Underlying Shares issuable upon conversion
and redemption thereof) shall tack back to the original issue date of the
Debentures.
(g) No
Novation. The Amended and Restated Debentures are being issued
in substitution for and not in satisfaction of the Debentures. The
Amended and Restated Debentures shall not constitute a novation or satisfaction
and accord of any of the Debentures. The Company hereby acknowledges
and agrees that the Amended and Restated Debentures shall amend, restate,
modify, extend, renew and continue the terms and provisions contained in the
Debentures and shall not extinguish or release the Company or any of its
Subsidiaries under any Transaction Document (as defined in
the Purchase Agreement) or otherwise constitute a novation of its
obligations thereunder.
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4. On
or prior to the date hereof, the Company hereby agrees to cause its legal
counsel to issue a legal opinion to the undersigned Holders and the Company’s
Transfer Agent regarding this Agreement and the transactions contemplated
hereby, in form and substance reasonably acceptable to the Holders, including an
opinion that the holding period of the Amended and Restated Debentures (and
shares issued and issuable upon conversion thereof) shall tack back to the
original issue date of the Debentures.
5. Amendment to the Exercise
Price. The Exercise Price (as defined in the Warrants) of all
of the Warrants is hereby amended and reduced to $0.015, subject to further
adjustment therein, and the number of shares underlying the Warrants is hereby
increased in the individual amounts set forth on Schedule B attached
hereto, each subject to further adjustment pursuant to the
Warrants.
6. Miscellaneous.
(a) The
foregoing waivers shall not be effective unless and until all Holders
shall have agreed to the terms and conditions
hereunder. In addition, the respective obligations, amendments,
agreements and waivers of the Holders hereunder are subject to the following
conditions being met: (a) the accuracy in all material respects of the
representations and warranties of the Company contained herein and (b) the
performance by the Company of all if its obligations, covenants and agreements
required to be performed hereunder. Except as expressly set forth above, all of
the terms and conditions of the Transaction Documents shall continue in full
force and effect after the execution of this Agreement and shall not be in any
way changed, modified or superseded by the terms set forth herein.
(b) This
Agreement may be executed in two or more counterparts and by facsimile signature
or otherwise, and each of such counterparts shall be deemed an original and all
of such counterparts together shall constitute one and the same
agreement.
(c)
The
Company shall, on or before 8:30 AM (NY time) on the 1st Trading
Day following the date hereof, issue a Current Report on Form 8-K, reasonably
acceptable to the Holders, disclosing the material terms of the transactions
contemplated hereby, and shall attach this Agreement thereto. The
Company shall consult with the Holders in issuing any other press releases with
respect to the transactions contemplated hereby.
(d)
The Company has agreed to reimburse the Holders $5,000 for its legal fees and
expenses, none of which has been paid prior to the date
hereof. Except as set forth in the preceding sentence, each party
shall pay the fees and expenses of its advisers, counsel, accountants and other
experts, if any, and all other expenses incurred by such party incident to the
negotiation, preparation, execution, delivery and performance of this
Agreement.
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(e) The
Company has elected to provide all Holders with the same terms and form of
agreement for the convenience of the Company and not because it was required or
requested to do so by the Holders. The obligations of each Holder
under this Agreement, and any Transaction Document are several and not joint
with the obligations of any other Holder, and no Holder shall be responsible in
any way for the performance or non-performance of the obligations of any other
Holder under this Agreement or any Transaction Document. Nothing
contained herein or in any Transaction Document, and no action taken by any
Holder pursuant thereto, shall be deemed to constitute the Holders as a
partnership, an association, a joint venture or any other kind of entity, or
create a presumption that the Holders are in any way acting in concert or as a
group with respect to such obligations or the transactions contemplated by this
Agreement or the Transaction Documents. Each Holder shall be entitled
to independently protect and enforce its rights, including without limitation,
the rights arising out of this Agreement or out of the other Transaction
Documents, and it shall not be necessary for any other Holder to be joined as an
additional party in any proceeding for such purpose. Each Holder has
been represented by its own separate legal counsel in their review and
negotiation of this Agreement and the Transaction Documents.
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IN
WITNESS WHEREOF, this Agreement is executed as of the date first set forth
above.
By:
Name:
Title:
[signature
page(s) of Holders to follow]
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COUNTERPART
SIGNATURE PAGE
OF HOLDER
TO
AMONG
GZGT
THE
HOLDERS THEREUNDER
Name of
Holder:___________________________________
By:______________________________________________
Name:____________________________________________
Title:_____________________________________________
New
Principal Amount of Debenture due 7/31/09:
$__________
New
Principal Amount of Debenture due 2/21/2010:
$__________
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SCHEDULE
A
|
Maturity
Date
|
7/31/2009
|
2/21/2010
|
||||||
|
Enable
Growth Partners New Principal Amount(s):
|
$1,828,444.24 |
$1,262,856.99
|
||||||
|
Enable
Opportunity Partners New Principal Amount(s):
|
$215,111.09 |
|
$148,571.41 | |||||
|
Xxxxxx
Diversified Strategy Master Fund LLC, Ena New Principal
Amount(s):
|
$107,555.52 | $74,285.71 | ||||||
|
Total
|
$2,151,110.85 | $1,485,714.10 | ||||||
SCHEDULE
B
Warrants held following
adjustment of exercise price to $0.015
|
Number
of
shares
underlying
warrants
|
||||
|
Enable
Growth Partners
|
132,682,890 | |||
|
Enable
Opportunity Partners
|
15,609,738 | |||
|
Xxxxxx
Diversified Strategy Master Fund LLC, Ena:
|
7,804,906 | |||
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