Exhibit 99.1
THE OBLIGATIONS, LIABILITIES AND INDEBTEDNESS EVIDENCED HEREBY ARE SUBORDINATE
IN THE MANNER AND TO THE EXTENT SET FORTH HEREIN TO THE INDEBTEDNESS AND OTHER
LIABILITIES OWED BY THE COMPANY (DEFINED BELOW) UNDER AND PURSUANT TO THE
REVOLVING CREDIT, TERM LOAN AND SECURITY AGREEMENT, DATED AS OF JUNE 10, 2003 BY
AND BETWEEN THE COMPANY, CERTAIN AFFILIATES OF THE COMPANY AND THE SENIOR LENDER
(DEFINED BELOW), AND EACH OTHER "LOAN DOCUMENT" (AS DEFINED THEREIN), EACH AS
MAY BE AMENDED, RESTATED, SUPPLEMENTED OR OTHERWISE MODIFIED FROM TIME TO TIME,
AND ANY OTHER HOLDER OF INSTITUTIONAL DEBT (DEFINED BELOW), AND EACH HOLDER
HEREOF, BY ITS ACCEPTANCE HEREOF, ACKNOWLEDGES AND AGREES TO BE BOUND BY SUCH
SUBORDINATION PROVISIONS.
$2,000,000.00
ACCESS WORLDWIDE COMMUNICATIONS, INC.
SUBORDINATED PROMISSORY NOTE
ACCESS WORLDWIDE COMMUNICATIONS, INC., a Delaware corporation (along with
its subsidiaries, the "Company"), promises to pay to Xxxxxxx Xxxxx Xxxx (the
"Holder") the principal sum of two million dollars and 00/100 cents
($2,000,000.00) on the Maturity Date (as defined below).
Pursuant to this subordinated promissory note (the "Note"), the Holder is
funding two million dollars ($2,000,000.00) in cash or other immediately
available funds to the Company on the date of execution hereof.
This Note shall mature on the date (the "Maturity Date") that is the
earlier of (a) four (4) months (the "Term") from the date of this Agreement (the
"Effective Date") or (b) upon a Change of Control (as defined below), in either
case, only after (i) all amounts due under any and all agreements or other
instruments evidencing the Company's Institutional Debt (as defined below) have
been indefeasibly paid in full in cash or (ii) the holder of the Company's
Institutional Debt consents in writing to the repayment of the principal amount
hereof. Provided, however, that if the principal amount hereof is not paid at
the Maturity Date, such failure to pay shall result in an Event of Default as
described in Section 1 below.
For purposes of this Note, a "Change of Control" shall be deemed to occur
on the effective date of any merger, consolidation, or reorganization which
results in the holders of the outstanding voting securities of the Company
(determined immediately prior to such merger or consolidation) owning less than
an majority of the outstanding voting securities of the surviving corporation
(determined immediately following such merger or consolidation), or any sale or
transfer by the Company of all or substantially all of its assets.
Notwithstanding the foregoing, a Change of Control shall not be deemed to occur
if the Company either merges or consolidates with or into another company or
sells or disposes of all or substantially all of its assets to
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another company, if such merger, consolidation, sale or disposition is in
connection with a corporate restructuring wherein the stockholders of the
Company immediately before such merger, consolidation, sale, or disposition own,
directly or indirectly, immediately following such merger, consolidation, sale,
or disposition at least a majority of the combined voting power of all
outstanding classes of securities of the company resulting from such merger or
consolidation, or to which the Company sells or disposes of its assets, in
substantially the same proportion as their ownership in the Company immediately
before such merger, consolidation, sale, or disposition.
For purposes of this Note, "Institutional Debt" means the principal of and
premium, if any, and interest on (including interest which accrues after a
bankruptcy, notwithstanding any law to the contrary), and any other
indebtedness, obligations, liabilities, charges, fees, costs, and expenses
payable pursuant to the terms of agreements or instruments creating or
evidencing indebtedness of the Company outstanding as of the date of initial
issuance of this Note or indebtedness thereafter created, assumed, incurred, or
guaranteed by the Company and its affiliates, and all renewals, extensions, and
refinances thereof, which is payable to banks, commercial finance companies,
insurance companies or other institutional lenders including, without
limitation, CapitalSource Finance LLC and its affiliates, its successors,
assigns or other transferees (the "Senior Lender").
Upon the Effective Date of this Agreement, the Holder of this Note will
earn a Holder's Fee equal to two hundred thousand (200,000) warrants in the form
attached hereto as Exhibit A, (the "Holder's Fee") due and payable upon the
Effective Date. Copies of all credit agreements and other instruments evidencing
the Company's Institutional Debt are available for the Holder's review at the
Company's executive offices. Any outstanding principal balance of this Note
shall be payable in cash or other immediately available funds to the Holder upon
the earlier of (i) the Maturity Date, or (ii) upon acceleration of all amounts
due and owing hereunder in accordance with the terms hereinafter set forth. The
principal amount may be paid before the Maturity Date, in full or in part,
subject to obtaining the prior written consent of any holders of the Company's
Institutional Debt, at any time by providing the Holder thirty (30) days written
notice of its intent to prepay all or any part of the Note.
1. Events of Default. Subject to the terms of any agreements or
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instruments evidencing the Company's Institutional Debt, and subject to the
rights of the holders of such Institutional Debt, the occurrence of any one or
more of the following shall constitute an "Event of Default" hereunder:
(a) nonpayment by the Company of any portion of the principal or
Holders Fee when due in accordance with the terms hereof;
(b) the Company (i) suspending or discontinuing its business, (ii)
making an assignment for the benefit of creditors, or (iii) filing a voluntary
petition in bankruptcy or having a petition in bankruptcy filed against it.
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If an Event of Default occurs, then, subject to the terms of any agreements
or instruments evidencing the Company's Institutional Debt, and subject to the
rights of the holders of such Institutional Debt, (i) the Holder may declare the
principal amount of this Note, to be immediately due and payable, and (ii)
Holder will receive an additional Holders Fee. Additionally, with the passing of
each four (4) month Term of the Note, the Holder will continue to receive
additional Holder's Fees until such time that the principal amount of the Note
is paid in full to Holder. In no event shall Holder seek remedies from Company
as a result of an Event of Default outside that which is set forth in this
Section 1.
2. Use of Proceeds. The Company shall use the proceeds obtained from the
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sale of this Note for, among other things, its working capital needs.
3. Subordination.
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(a) Subordination of Payment. The Holder hereby: (i) subordinates all
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obligations, liabilities, indebtedness, claims and demands arising hereunder to
all of the Institutional Debt; and (ii) agrees that payment of principal and any
other amounts owing hereunder is hereby expressly subordinated to payment in
full of the Institutional Debt (including without limitation all interest
accruing on any Senior Debt or any financing provided by Senior Lender after the
commencement of any proceeding described in Section 1(d) hereof).
(b) Unsecured Note. The Holder and the Company agree that this Note
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and the obligations, indebtedness and liabilities evidenced hereby, are, and at
all times shall be, unsecured.
(c) Limit on Enforcement Actions by the Holder. The Holder hereby
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agrees not to accelerate, demand, xxx for, commence any collection or
enforcement action or proceeding with respect to, take, receive, accept or
retain any payment or distribution of any character, whether in cash, securities
or other property, and whether by set off or otherwise, in respect of the
principal or any other payment in connection with the obligations, liabilities
and indebtedness evidenced hereby; or incur any debt or liability to, or receive
any loan, return of capital, advance, gift, dividend or any other transfer of
any property whether real or personal, or tangible or intangible, from the
Company with respect to the obligations, liabilities and indebtedness evidenced
hereby (each, an "Enforcement Action") until the Institutional Debt shall have
been paid in full with interest (including without limitation interest during
any bankruptcy or similar proceeding involving the Company, from the date of the
filing thereof to the date of distribution, notwithstanding any statute,
including without limitation the Federal Bankruptcy Code, any rule of law or
bankruptcy procedures to the contrary).
(d) Bankruptcy, Insolvency, Etc. Upon any bankruptcy, insolvency,
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dissolution, receivership, or other proceeding involving the Company or its
property, the Holder agrees that all Institutional Debt shall first be
indefeasibly paid in full in cash before any payment or distribution of any kind
is made to the Holder of this Note and any payment or distribution that may be
made with respect to this Note, whether in cash, securities, or otherwise, shall
be held
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in trust for the benefit of the holder of the Institutional Debt and immediately
upon receipt delivered to the holder of the Institutional Debt until all
Institutional Debt has been paid in full and the Holder shall irrevocably
authorize, empower and direct all receivers, trustees, liquidators, conservators
and others having authority to effect all such payments and deliveries. The
Holder shall take no actions which would (i) impair any rights or interests of
the Senior Lender under any Loan Document or of any other holder of
Institutional Debt under any other agreement or instrument or under this Section
3, (ii) contest the validity or enforceability of the Institutional Debt, any
Loan Document, any other agreement or instrument evidencing or relating to the
Institutional Debt, Section 3 of this Note or any of the respective terms
thereof, or (iii) impair the ability of the Senior Lender or any other holder of
Institutional Debt to enforce and collect the Institutional Debt or to preserve,
protect and realize upon any collateral security.
(e) Unauthorized Distributions Held in Trust. The Holder hereby
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agrees that, in the event any payment or distribution of any character, whether
in cash, securities or other property, is received by the Holder in
contravention of the terms of subordination set forth in this Section 3, such
payment or distribution shall be held by the Holder, as trustee of an express
trust, in trust for the benefit of, and shall be paid over or delivered and
transferred to the Senior Lender, for application to all amounts due under the
Institutional Debt remaining unpaid until such amounts shall have been paid in
full. The Holder hereby assigns to the Senior Lender all rights of the Holder to
any such payments or distributions, which the Senior Lender may exercise in the
name of the Payee, and agree to execute such instruments as may be required by
the Senior Lender to enable the Senior Lender to enforce such claims.
(f) Notation of Subordination. The Holder agrees to note on the face
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of any promissory note or other instrument issued by the Company evidencing the
indebtedness under this Note that such promissory note or other instrument is
subject to the terms and conditions set forth herein.
(g) Rights of Senior Lender or other Holder of Institutional Debt
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Regarding Company. This Section 3 is a continuing agreement of subordination and
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the Senior Lender or any other holder of Institutional Debt may continue to make
loans to or otherwise accept the obligations of the Company in reliance hereon,
without notice to the Holder, and may make renewals, extensions or other
modifications of any kind relating to the terms and conditions of any of the
Institutional Debt or any collateral security or guaranty therefor, and may
release or exchange or otherwise deal with any collateral security or guaranty
or may release any balance of funds on deposit or otherwise held by the Senior
Lender without notice to or consent of the Holder and without impairing or
affecting the rights hereunder of Senior Lender or any other holder of the
Institutional Debt.
(h) Intended Third-Party Beneficiaries. The Senior Lender and any
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other holder of the Institutional Debt is the intended third party beneficiary
of Section 3 of this Note and each other provision of this Note which refers to
or relates to the Institutional Debt.
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4. Miscellaneous.
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(a) Usury. Nothing herein contained, nor any transaction related
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hereto, shall be construed or so operate as to require the Company to pay
interest at a greater rate than is now lawful, or to make any payment, or to do
any act contrary to law.
(b) Ownership. The Holder shall be deemed to be the owner of this
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Note for all purposes, and the full payment of the Holder's Fee and principal
under this Note to the Holder shall constitute the full and complete discharge
of the Company for such purposes.
(c) Assignment. This Note and the rights, obligations and duties of
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the Company or the Holder hereunder shall not be assignable or
otherwise transferable by either party; provided, however, that in the event
that Company is acquired by another entity and becomes a wholly-owned subsidiary
of that entity, then all references herein to Company shall also be applicable
to its shareholder and such shareholder shall be bound by the terms hereof as if
it were the Company.
(d) Modification. No term or provision contained herein may be
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modified, amended or waived except by written agreement or consent signed by the
party to be bound thereby. Notwithstanding the foregoing, without the prior
written consent of Senior Lender : (i) this Note shall not be materially
modified, amended or otherwise changed; and (ii) Section 6 of this Note and each
other provision of this Note which specifically refers to or relates to the
Institutional Debt shall not be modified, amended, otherwise changed or waived.
(e) Binding Effect and Benefit. This Note shall inure to the benefit
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of, and shall be binding upon, the parties hereto, their heirs, executors,
administrators, personal representatives, successors in interest and permitted
assigns.
(f) Further Assurances. Company and Holder agree that from time to
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time hereafter, upon request, each party will, at such party's sole expense,
execute and deliver such other instruments and documents and take such further
action as may be reasonably necessary to carry out the intent of this Note.
(g) Governing Law; Waiver of Jury Trial. This Note shall be
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interpreted, and the rights and liabilities of the parties hereto determined, in
accordance with the internal laws (as opposed to conflicts of law provisions) of
the State of Delaware. As part of the consideration for new value this day
received, the Holder hereby consents to the jurisdiction of any state or federal
court located within Wilmington, Delaware. Each of the Company and the Holder
hereby irrevocably and unconditionally waives trial by jury in any suit or
proceeding arising out of or related to this Note.
(h) Incorporation by Reference. All exhibits and documents referred
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to in this Note shall be deemed incorporated herein by any reference thereto as
if fully set out herein.
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(i) Headings and Captions. Subject headings and captions are included
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for convenience purposes only and shall not affect the interpretation of this
agreement.
(j) Notice. All notices, requests, demands and other communications
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permitted or required hereunder shall be in writing, and either (i) delivered in
person, (ii) sent by express mail or other overnight delivery service providing
receipt of delivery, (iii) mailed by certified or registered mail, postage
prepaid, return receipt requested or (iv) sent by telex, telegraph or other
facsimile transmission as follows:
If to Company addressed or Access Worldwide Communications, Inc.
delivered in person to: 0000 Xxxxxxxxxxxxxx Xxxxxx, Xxxxx 000
Xxxx Xxxxx, Xxxxxxx 00000
Attention: Xxxx Xxxxxx
Phone: 000-000-0000
Fax: 000-000-0000
If to the Holder,
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addressed or delivered
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in person to:
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or to such other address as either party may designate by notice in accordance
with this Section.
Any such notice or communication, if given or made by prepaid, registered
or certified mail or by recorded express delivery, shall be deemed to have been
made when actually received.
(k) Severability. If any portion of this Note is held invalid,
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illegal or unenforceable, such determination shall not impair the enforceability
of the remaining terms and provisions herein, which may remain effective, and to
this end this Note is declared to be severable.
(l) Waiver. No waiver of a default, breach or other violation of any
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provision of this Note shall operate or be construed as a waiver of any
subsequent default, breach or other violation or limit or restrict any right or
remedy otherwise available. No delay or omission on the part of the Holder to
exercise any right or power arising by reason of a default shall impair any such
right or power or prevent its exercise at any time during the continuance
thereof.
(m) Gender and Pronouns. Throughout this agreement, the masculine
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shall include the feminine and neuter and the singular shall include the plural
and vice versa as the context requires.
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(n) Entire Agreement. This Note constitutes the entire agreement of
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the parties and supersedes any and all other prior agreements, oral or written,
with respect to the subject matter contained herein.
[SIGNATURES ON FOLLOWING PAGE]
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[SIGNATURE PAGE TO PROMISSORY NOTE]
IN WITNESS WHEREOF, the Company has signed and sealed this Note on this
12th day of June, 2006.
ACCESS WORLDWIDE COMMUNICATIONS, INC.
By:
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Xxxxxxx Xxxxxx
Chairman and Chief Executive Officer
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